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F e d e r a l R e s e r v e Ba n k OF DALLAS D allas, T exas, M a rch 30, 1951 A M E N D M E N T TO R E G U L A T IO N A To All Member Banks in the Eleventh Federal Reserve District: P rin te d on the r e v e r s e s id e o f t h is le t t e r is th e te x t o f an a m en dm en t to R eg u la tion A o f the B o a rd o f G ov ern ors o f th e F e d era l R eserv e S ystem e ffectiv e M a rch 21, 1951. O nly th e la n gu a ge o f the last clau se o f th e am endm ent is n e w . S im ila r la n gu a ge ex em p tin g V -lo a n p a p er fr o m th e n e g o tia b ility req u irem en t o f th e reg u la tion w a s in co rp o ra te d in the re g u la tio n d u rin g th e p rev iou s V -lo a n p ro g r a m o f W o rld W a r II, b u t w a s elim in ated b y an a m en dm en t to th e reg u la tio n in 1949. T h e p u r p ose o f th e p resen t a m en dm en t is to re s to re th a t p r o v is io n in o rd e r to fa c ilita te op era tion s u n der th e cu r re n t V -lo a n p ro g r a m . M em ber ban k s a re requ ested to file th is letter in rin g b in d e r co n ta in in g cop ies o f th e reg u la tion s o f th e B o a rd o f G o v e rn o rs o f th e F ed era l R eserv e S ystem and th e bulletin s o f th is b an k . V e r y tr u ly y ou rs, R . R . G IL B E R T P re s id e n t This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) D ISC O U N T FOR A N D A D V A N C E S TO M E M B E R B A N K S B Y FEDERAL RESERVE BANKS A M E N D M E N T T O R E G U L A T IO N A T h e B o a r d o f G ov ern ors h as am ended its R egu la tion A , effe c tive M a rch 21, 1951, b y a m en d in g th e last sen ten ce o f su bsection ( h ) o f section 1 to rea d as f o l l o w s : “ T h e req u irem en t o f th is section th a t a n ote be n e g o tiab le shall n ot be a p p lica b le w ith resp ect to a n y n ote ev id en cin g a loan w h ich is m ade p u rsu a n t to a co m m o d ity loan p ro g r a m o f the C om m od ity C red it C o rp o ra tion and w h ich is su b je c t to a com m itm en t to p u rch a se b y th e C om m od ity C red it C orp o ra tio n o r w ith re sp e ct to a n y n ote ev id en cin g a loan w h ich is in w h ole o r in p a r t the s u b je c t o f a gu a ra n tee o r com m itm en t m ade p u r su an t to section 301 o f th e D efen se P ro d u ctio n A c t o f 1950.” DISCOUNTS FOR AND ADVANCES TO MEMBER BANKS BY FEDERAL RESERVE BANKS AMENDMENTS TO REGULATION A I s s u e d b y t h e B oard o f G o v e r n o r s o f t h e F ed era l R e s e r v e S y s t e m The l a s t s e n t e n c e o f s u b s e c t i o n (h) o f s e c t i o n 1, which was a d d e d i n 1 9 4 2 , was amended, e f f e c t i v e March 2 1 , 1 9 5 1 , t o r e a d as f o l l o w s : The r e q u i r e m e n t o f t h i s s e c t i o n t h a t a n o t e b e n e g o t i a b l e s h a l l n o t b e a p p l i c a b l e wi t h r e s p e c t t o any n o t e e v i d e n c i n g a l o a n w h i c h i s made p u r s u a n t t o a c o m m o d i t y l o a n p r o g r a m o f t h e Commodity C r e d i t C o r p o r a t i o n and whi c h i s s u b j e c t t o a commitment t o p u r c h a s e b y the Commodity C r e d i t C o r p o r a t i o n o r w i t h r e s p e c t t o any n o t e e v i d e n c i n g a l o a n w h i c h i s i n w h o l e o r i n p a r t t h e s u b j e c t o f a g u a r a n t e e o r c ommi tment made p u r s u a n t t o s e c t i o n 301 o f t h e D e f e n s e P r o d u c t i o n A c t o f 19 5 0 . Subsection February 17, 1949, (a) o f s e c t i o n 2 was a me nde d, e f f e c t i v e b y adding thereto the f o l l o w i n g sentence: In the e v e n t n o t e s w h i c h e v i d e n c e l o a n s made p u r s u a n t t o a c o m m o di t y l o a n p r o g r a m o f t he Commodity C r e d i t C o r p o r a t i o n a nd w h i c h c o m p l y w i t h t h e m a t u r i t y r e q u i r e m e n t s o f s u b s e c t i o n (a) o f s e c t i o n 1 o f t h i s r e g u l a t i o n h a v e b e e n d e p o s i t e d i n a p o o l o f n o t e s o p e r a t e d b y the Commodity C r e d i t C o r p o r a t i o n , the c e r t i f i c a t e o f i n t e r e s t i s s u e d by the Commodity C r e d i t C o r p o r a t i o n whi c h e v i d e n c e s t h e d e p o s i t o f s u c h n o t e s may b e a c c e p t e d as s e c u r i t y f o r an a d v a n c e made t o a member b a n k u n d e r t h i s s u b s e c t i o n . Subsection March 2 0 , 1942, to (b) o f s e c t i o n 2 was amended, read effective as f o l l o w s : ( b ) Advances on Government obligations.— Any F e d e r a l R e s e r v e Bank may make a d v a n c e s , u nd e r a u t h o r i t y o f s e c t i o n 13 o f t h e F e d e r a l R e s e r v e A c t , t o any o f i t s member b a n k s for periods not exceeding n i n e t y d a y s 6 on t h e promissory n o t e o f s u c h member b a n k s e c u r e d b y d i r e c t o b l i g a t i o n s o f t h e U n i t e d S t a t e s , and f o r p e r i o d s n o t e x c e e d i n g f i f t e e n d a y s on t h e p r o m i s s o r y n o t e o f s u c h member b a n k s e c u r e d (1) h y t h e d e p o s i t o r p l e d g e o f d e b e n t u r e s o r o t h e r s u c h o b l i g a t i o n s o f F e d e r a l I n t e r m e d i a t e C r e d i t banks having m a t u r i t i e s o f n o t e x c e e d i n g s i x months f r o m t h e d a t e o f the a d v a n c e , o r (2) b y t h e d e p o s i t o r p l e d g e o f F e d e r a l Farm M o r t g a g e C o r p o r a t i o n b o n d s i s s u e d u n d e r t h e F e d e r a l Farm Mortgage C o r p o r a t i o n Ac t and g u a r a n t e e d b o t h as t o p r i n c i p a l and i n t e r e s t b y t he U n i t e d S t a t e s , or (3) b y t he d e p o s i t or p l e d g e o f Home Owner s ' Loan C o r p o r a t i o n b o n d s i s s u e d unde r the p r o v i s i o n s o f s u b s e c t i o n (c ) o f s e c t i o n (4) o f t he Home Owners' Loan A c t o f 1933, as amended, and g u a r a n t e e d b o t h as t o p r i n c i p a l and i n t e r e s t b y t h e U n i t e d S t a t e s . g °The eighth paragraph of section 13 of the Federal Reserve Act authorizes advances to member banks for periods not exceeding fifteen days secured by bonds, notes, certificates of indebted ness, or Treasury bills of the United States. However, the last paragraph of section 13 authorizes any Federal Reserve Bank to make advances for periods not exceeding ninety days "to any individual, partnership or corporation" on the promissory notes of such individual, partnership or corporation secured by "direct obligations of the United States"; and the term "corporation" includes an incorporated bank.
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