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FE D E R AL R ESER VE BANK
O F D A L LA S

Dallas, Texas, January 10, 1936

IN D U STR IA L LOAN S

To the Bank A dd ressed:

During recent m onths the number of industrial loan applications received by Federal
Reserve banks has decreased considerably as compared with the period immediately fo l­
lowing the date on which Section 13b o f the Federal Reserve A ct became effective. That
section was adopted June 19, 1934, and, as you recall, authorizes Federal Reserve banks to
make credit available to established industrial and commercial businesses fo r the purpose
o f providing or replenishing w orking capital, fo r a period not exceeding five years.
It has been the aim o f the Board of Governors o f the Federal Reserve System, the
Federal Reserve banks and the Industrial A dvisory Committees to make such credit avail­
able to all borrow ers who are in need o f working capital and to whom advances could be
made on a reasonable and sound basis. To that end special efforts have been made to bring
the provisions o f the section to the attention o f member and nonmember banks and indus­
try in general, and applications fo r such credit have been approved whenever possible.
Notw ithstanding these efforts, it may be that some have overlooked this facility which
Congress authorized in the interest o f industry. It m ay be, too, that there are now no
enterprises in your com m unity which are unable to obtain needed working capital from
the usual sources and to which loans fo r this purpose could be made on a reasonable and
sound basis. This bank desires particularly, however, to do what it can fo r industry in its
district, especially in cooperation with financing institutions, and if you know or learn o f
any instances where w orthy enterprises in need of working capital have been unable to
obtain it, w e shall appreciate your bringing them to our attention.
Under the provisions o f the A ct, Federal Reserve banks are authorized to make these
loans either direct to borrow ers or in participation with financing institutions. If you are
interested in participating in any loans o f this type, with your liability limited to not less
than 20 per cent o f an advance, this bank will be glad to cooperate w ith you in any way it
can within the law. Full inform ation concerning direct loans, participating loans and com ­
mitments will be gladly furnished upon request.
Y ours very truly,
b

. a . M cK i n n e y ,
Governor

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)


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