Page:Banking Act of 1933 (Federal Reserve Circular 1248).djvu/39

 SUMMARY OF BANKING ACT OF 1933

There is set forth below a summary of the principal provisions of the Banking Act of 1933 (Glass Bill), as approved by the President on June 16, 1933.

SECTION 1 Title.

This section merely provides that the short title of the act shall be the "Banking Act of 1933."

SECTION 2 Definitions.

In view of the concise language in which the definitions are phrased, no attempt will be made to summarize them, but for convenience the definitions are set forth here:

SECTION 3(a) Control of Federal reserve bank credit by Federal Reserve Board.

Section 4 of the Federal Reserve Act is amended so as to provide that the board of directors of each Federal reserve bank shall administer its affairs fairly and impartially and without discrimination among member banks and may extend to each member bank such accommodations as may be safely and reasonably made with due regard for the claims of other members, the maintenance of sound credit conditions and the accommodation of commerce, industry and agriculture.

Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for any purpose inconsistent with sound credit conditions, and shall give consideration to such information in determining whether to make advances to such member banks. Undue use of bank credit shall be reported to the Federal Reserve Board by the Chairman of the Federal reserve bank, and the Board may suspend a member bank from the use of the credit facilities of the System if, in its judgment, the bank is making such undue use of bank credit.