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Federal

reserve

Ba n k

O F D ALLAS

Dallas, Texas, September 8,1948

RESERVES REQUIRED TO BE MAINTAINED BY MEMBER BANKS WITH
FEDERAL RESERVE BANKS
To the Member Banks of the
Eleventh Federal Reserve District:
The Board of Governors of the Federal Reserve System today adopted a supplement to Regu­
lation D, which has the effect of increasing the reserve requirements of member banks. The Board
also adopted certain amendments to Regulation D in order to bring the text of the regulation into
conformity with the text of the law. Copies of the supplement and of the amendments are enclosed.
The Board of Governors has released the following press statement in regard to its action
today in increasing reserve requirements:
“As a further step toward restraining inflationary expansion of bank credit, the Board
of Governors today increased the amount of reserves required to be maintained with Fed­
eral Reserve banks by banks which are members of the Federal Reserve System as follows:

On Net Demand Deposits

Non-reserve city banks .
Reserve city banks . . .
Central reserve city banks

On Time Deposits

Effective

.
.
.

Non-reserve city banks . .
Central reserve and reserve
.
city banks . . . .

. from 14 to 16
. from 20 to 22
. from 24 to 26

per cent
per cent
per cent

September 16, 1948
September 24, 1948
September 24, 1948

.

from

6 to 7V& per cent

September 16, 1948

.

from

6 to

71/2 per cent

September 24, 1948

“ The effect of these increases will be to raise the required reserves of banks in central
reserve cities by approximately 500 million dollars, of banks in reserve cities by approxi­
mately 700 million dollars, and of banks in non-reserve cities by approximately 700 million
dollars.
“ At the recent special session of Congress the Board of Governors was given tem­
porary additional authority to increase reserve requirements of member banks and under
the provisions of Section 19 of the Federal Reserve Act as thus recently amended the
Board now has authority to establish reserve requirements for the various classes of
member banks within the following limits:

Against Net Demand Deposits

Central reserve city b a n k s .........................
Reserve city b a n k s .......................................
Non-reserve city b a n k s ..............................

Against Time Deposits

Minimum

..............................18%

............................... 10%
..............................7%

Maximum
30%
24%
18%

All classes of b a n k s ................................... ..............................3%
7i/2%
“ When the increases become effective on the dates stated above, reserve requirements
on time deposits will be at the maximum limit under existing authority and requirements
on net demand deposits will be 2 percentage points less than the maximum at reserve and
non-reserve city banks and 4 percentage points less than the maximum at central reserve
city banks.”
The enclosures should be inserted in the ring binder containing current bulletins of this bank
and the regulations of the Board of^Governors of the Federal Reserve System. Please acknowledge
receipt on the enclosed post card.
Very truly yours,
R. R. GILBERT
President

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

AMENDMENT TO REGULATION D

ISSUED BY THE BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM

Effective September 16, 1948

Regulation D, Reserves of Member Banks, as amended, is hereby
further amended in the following respects, effective September 16, 1948:
1. Subsection (a ) of section 2 is amended by striking out the
words “ the sixth paragraph o f” in the last sentence thereof.
2. Footnote numbered 6 appended to subsection (a) of section 2
is amended to read as follows:
“ The amount of the reserves required to be maintained by
any such member bank as a result o f any such change may not
be less than the amount of the reserves specified above nor
more than twice such amount, except that through June 30, 1949,
the required reserves for time deposits may be not more than
7y2 percent and those for demand deposits of banks in central
reserve cities, reserve cities, and other places may be not more
than 30 percent, 24 percent, and 18 percent, respectively.”
3. Subsection (b ) of section 2 is amended by striking out the fol­
lowing in the first sentence thereof:
“ And, until six months after the cessation of hostilities in the
present war as determined by Proclamation of the President or
concurrent resolution of the Congress, no deposit payable to the
United States by any member bank arising solely as the result of
subscriptions made by or through such member bank for United
States Government securities issued under authority of the Sec­
ond Liberty Bond Act, as amended, shall be included in net
demand deposits or in time deposits which are subject to reserve
requirements.”

BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM
SUPPLEMENT TO REGULATION D

Effective as to Member Banks not in Reserve and Central Reserve
Cities at opening of business on September 16, 1948, and as to
Member Banks in Reserve and Central Reserve Cities at
opening of business on September 24, 1948

Reserves required to be maintained b y m em ber banks
with Federal Reserve banks

Pursuant to the provisions of section 19 of the Federal Reserve Act
and section 2 (a ) of its Regulation D, the Board of Governors of the
Federal Reserve System hereby prescribes the following reserve balances
which each member bank of the Federal Reserve System is required to
maintain on deposit with the Federal Reserve bank of its district:

7y2 per cent of its time deposits p l u s 16 per cent of its net demand deposits if not in a reserve or central
reserve city;
22 per cent of its net demand deposits if in a reserve city, except as
to any bank located in an outlying district of a reserve city or in territory
added to such city by the extension of the city’s corporate limits, which,
by the affirmative vote of five members of the Board of Governors of
the Federal Reserve System, is permitted to maintain 16 per cent reserves
against its net demand deposits;
26 per cent of its net demand deposits if located in a central reserve
city, except as to any bank located in an outlying district of a central
reserve city or in territory added to such city by the extension of the
city’s corporate limits, which, by the affirmative vote of five members
of the Board of Governors of the Federal Reserve System, is permitted
to maintain 16 per cent or 22 per cent reserves against its net demand
deposits.
The supplements to Regulation D which have previously been issued
are hereby revoked and superseded.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102