Page:Banking Act of 1933 (Federal Reserve Circular 1248).djvu/45

 Federal Reserve System (and probably also to nonmembers which are members of the Corporation) and may enter into negotiations to secure the reopening of such banks; and receivers or liquidators of member banks are authorized, upon receiving permission from the appropriate supervisory authorities to sell the assets of such banks to the Corporation or to obtain loans from the Corporation upon such assets.

Issue of Debentures by Corporation.

The Corporation may issue and have outstanding at any one time debentures or other such obligations aggregating not more than three times the amount of its capital, and may sell short term obligations on a discount basis. Such obligations shall be exempt from all taxation, except estate and inheritance taxes; and the Corporation shall be exempt from all taxation except real estate taxes.

Investment of Funds of Corporation.

Moneys of the Corporation not otherwise employed shall be invested in Government securities, except that for temporary periods they may be deposited in a Federal reserve bank or with the Treasurer of the United States.

Depositary of Public Moneys.

When so designated by the Secretary of the Treasury, the Corporation shall be a depositary of public moneys and may be employed as a financial agent of the Government.

No discrimination against nonmember banks.

The Act declares that it is the purpose to provide all banks with the same opportunity to obtain and enjoy the insurance benefits of the Act, and it is not the purpose to discriminate in any manner against nonmember banks and in favor of national or State member banks.

Criminal Provisions.

There are a number of provisions providing punishment, by fine or imprisonment, for making false statements to influence the action of the Corporation, for counterfeiting obligations of the Corporation, for embezzling the Corporation's funds, for making false entries in reports of or to the Corporation, or for using the words "Federal Bank Deposit Insurance Corporation" or a combination of any three of them in a firm name, for falsely advertising that deposit liabilities are insured, and for doing other similar acts.

SECTION 9 Loans on Member Banks' Collateral Notes.

Section 13 of the Federal Reserve Act is amended so as to increase the maximum maturity of advances to member banks on their promissory notes secured by paper eligible for rediscount or for purchase by Federal reserve banks from 15 to 90 days.

The maximum maturity of 15 days on advances on member banks' notes secured by Government bonds or obligations of Federal intermediate credit banks is not changed. (Bonds of Federal Land Banks are made eligible as security for such notes by the Act of May 12, 1933, but under this Act would not be eligible.)

If a member bank, while indebted to a Federal reserve bank, on such a 15 day or 90 day collateral note and despite a warning of the Federal reserve bank or the Federal Reserve Board, increases its outstanding collateral loans or loans to securities dealers for the purpose of purchasing or carrying stocks or investment securities (except obligations of the United States), its note shall be immediately due and payable and the member bank shall be ineligible to borrow on such a 15 day or 90 day note for a period determined by the Board. (A temporary carrying or clearance loan made solely for the purpose of facilitating the purchase or delivery of securities offered for public subscription is not included in the amount of such loans of a member bank.)

SECTION 10 Foreign transactions of Federal reserve banks.

Section 14 of the Federal Reserve Act is amended to provide that all relationships and