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[PUBLIC L A W 8 4 — 7 9 T H [CHAPTER 186—1ST CONGRESS] SESSION] [S. 510] AN ACT T o amend sections 11 (c) and 16 of the Federal Reserve Act, as amended, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, T h a t (a) the t h i r d paragraph of section 16 of the Federal Reserve A c t , as amended, is amended by changing the first sentence of such paragraph to read as follows: " E v e r y Federal Reserve bank shall maintain reserves i n gold certificates of not less than 25 per centum against its deposits and reserves i n gold certificates of not less than 25 per centum against its Federal Reserve notes i n actual circulation: Provided, however, T h a t when the Federal Reserve agent holds gold certificates as collateral f o r Federal Reserve notes issued to the bank such gold certificates shall be counted as p a r t of the reserve which such bank is required to maint a i n against its Federal Reserve notes i n actual circulation." (b) The first sentence of the f o u r t h paragraph of section 16 of the Federal Reserve A c t , as amended, is amended by s t r i k i n g therefrom "40 per centum reserve hereinbefore required" and by inserting i n lieu thereof "25 per centum reserve hereinbefore required to be maintained against Federal Reserve notes i n actual circulation". (c) Subsection (c) of section 11 of the Federal Reserve A c t , as amended, is amended to read as follows: " ( c ) T o suspend f o r a period not exceeding t h i r t y days, and f r o m time to time to renew such suspension for periods not exceeding fifteen days, any reserve requirements specified i n this A c t : Provided, T h a t i t shall establish a graduated tax upon the amounts by which the reserve requirements of this A c t may be permitted to f a l l below the level hereinafter specified: And provided further, T h a t when the reserve held against Federal Reserve notes falls below 25 per centum, the B o a r d of Governors of the Federal Reserve System shall establish a graduated tax of not more than 1 per centum per annum upon such deficiency u n t i l the reserves f a l l to 20 per centum, and when said reserve falls below 20 per centum, a tax at the rate increasingly o f not less than 1 y 2 per centum per annum upon each 2y 2 per centum or fraction thereof that such reserve falls below 20 per centum. The tax shall be p a i d by the Reserve bank, but the Reserve bank shall add an amount equal to said tax to the rates of interest and discount fixed by the B o a r d of Governors of the Federal Reserve System." SEC. 2. The second paragraph of section 16 of the Federal Reserve A c t , as amended, is amended to read as follows: " A n y Federal Reserve bank may make application to the local Federal Reserve agent f o r such amount of the Federal Reserve notes hereinbefore provided f o r as i t may require. Such application shall be accompanied w i t h a tender t o the local Federal Reserve agent of [ P U B . L A W 84.] 2 collateral i n amount equal to the sum of the Federal Reserve notes thus applied f o r and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills of exchange, or acceptances acquired under the provisions of section 13 of this A c t , or bills of exchange endorsed by a member bank of any Federal Reserve district and purchased under the provisions of section 14 of this A c t , or bankers' acceptances .purchased under the provisions of said section 14, or gold certificates, or direct obligations of the U n i t e d States. I n no event shall such collateral security be less than the amount of Federal Reserve notes applied for. The Federal Reserve agent shall each day n o t i f y the Board of Governors of the Federal Reserve System of a l l issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to w h i c h he is accredited. The said B o a r d of Governors of the Federal Reserve System may at any time call upon a Federal Reserve bank f o r additional security to protect the Federal Reserve notes issued t o i t . " SEC. 3. A l l power and authority w i t h respect to the issuance of circulating notes, known as Federal Reserve bank notes, pursuant to the sixth paragraph of section 18 of the Federal Reserve A c t , as amended by section 401 of the A c t approved M a r c h 9, 1933 (48 Stat. 1, 6), shall cease and terminate on the date of enactment of this A c t . SEC. 4. A l l power and authority of the President and the Secret a r y of the Treasury under section 43 (b) (1) of tHe A c t approved M a y 12,1933 (48 Stat. 31, 52), w i t h respect to the issuance o f U n i t e d States notes, shall cease and terminate on the date of enactment of this A c t . Approved June 12, 1945.
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