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F E D E R A L R E S E R V E BANK
O F NEW YORK
J" Circular N o. 3 4 8 O '!
L
A u gust S, 1949
J

SUPPLEMENT TO REGULATION D
Reserves Required To Be Maintained By Member Banks
With Federal Reserve Banks
Reductions in Reserve Requirements
To all Member Banks in the
Second Federal Reserve D istrict:

The Board of Governors of the Federal Reserve System has today amended the Supple­
ment to Regulation D, a printed copy of which is enclosed, reducing reserve requirements
of member banks effective as to member banks not in reserve and central reserve cities in
instalments from August 1, 1949, and effective as to member banks in reserve and central
reserve cities in instalments commencing at the opening of business on August 11, 1949.
"V e quote below from a statement released for publication today by the Board of Gover­
V
nors of the Federal Reserve System regarding this action:
The Board of Governors has reduced by 2 per cent of net demand deposits and 1 per cent of time
deposits the amount of reserves required to be maintained by member banks of the Federal Reserve
System. The reduction, which will amount to approximately $1.8 billion, will become effective as
follows:
On net demand deposits
24
23%
23
22%

to
to
to
to

23%
23
22%
22

per
per
per
per

cent
cent
cent
cent

jEffective

Beserve city banks

Central reserve city tanks

From
From
From
From

From
From
From
From

20
19 %
19
1 8%

to
to
to
to

19 %
19
18 %
18

per
per
per
per

cent
cent
cent
cent

August 11,
August 18,
August 25,
September

1949
1949
1949
1 , 1949

Non-reserve city banks

From 14 to 13 per cent
From 13 to 12 per cent
On time deposits
Central reserve and
reserve city banks
Non-reserve city banks

August 1, 1949
August 16, 1949

From 6 to 5 per cent
From 6 to 5 per cent

August 11, 1949
August 16, 1949

The effect of these decreases will be to lower the reserve requirements of banks in central reserve
cities by approximately $500 million, of banks in reserve cities by approximately $675 million, and
of banks in non-reserve cities by approximately $625 million.
In announcing this action, Mr. McCabe, Chairman of the Board of Governors of the Federal
Reserve System, stated that it was taken after full discussion by the Board and the Federal Open
Market Committee of the coordination of policies with respect to reserve requirements, open market
operations, and other system credit instruments, with primary regard to the general credit and busi­
ness situation and the maintenance of orderly conditions in the Government security market.

Additional copies of this circular and of the enclosed supplement will be furnished upon
request.




A

llan

S

proul,

President.

SUPPLEMENT TO REGULATION D
ISSUED B Y T H E BOARD OF GOVERNORS OF T H E FEDERAL RESERVE SYSTE M

ON AUGUST 5, 1949

RESERVES REQUIRED TO BE
MAINTAINED B Y MEMBER BANKS
W IT H 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 bal­
ances which each member bank of the Federal Reserve System is
required to maintain on deposit with the Federal Reserve Bank of its
district:
1. I f not in a reserve or central reserve city—
(a) 6 per cent of its time deposits until the opening of busi­
ness on August 16, 1949, and 5 per cent of its time deposits
thereafter, plus
(b) 13 per cent of its net demand deposits from August 1
to August 15, 1949, inclusive, and 12 per cent of its net demand
deposits thereafter.
2. 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 the reserves
specified in paragraph 1 above)—
(a) 6 per cent of its time deposits until the opening of busi­
ness on August 11, 1949, and 5 per cent of its time deposits
thereafter, plus
(b) 20 per cent of its net demand deposits until the open­
ing of business on August 11, 1949, 19*4 per cent of its net
demand deposits from August 11 to August 17, 1949, inclusive,
19 per cent of its net demand deposits from August 18 to
August 24, 1949, inclusive, 1 8 ^ per cent of its net demand
deposits from August 25 to August 31, 1949, inclusive, and 18
per cent of its net demand deposits thereafter.
3. I f 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 main­
tain the reserves specified in paragraph 1 or 2 above)—
(a) 6 per cent of its time deposits until the opening of busi­
ness on August 11, 1949, and 5 per cent of its time deposits
thereafter, plus
(b) 24 per cent of its net demand deposits until the open­
ing of business on August 11, 1949, 23 % per cent of its net
demand deposits from August 11 to August 17, 1949, inclusive,
23 per cent of its net demand deposits from August 18 to
August 24, 1949, inclusive, 22 % per cent of its net demand
deposits from August 25 to August 31, 1949, inclusive, and
22 per cent of its net demand deposits thereafter.




PRINTED IN NEW YORK

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