Page:United States Statutes at Large Volume 47 Part 1.djvu/80

 56 Feb ruar y 27, 1932 . [H. It. 0203.1 [Public, Ao. 44.1 Federal Reserve Act, amendment. Vol38, p.260. U.S.C .,p . 275 . Advances t o member banks in groups of five. Security. When authorized. Liability of individ- ual banks. Advances to banks in grou ps of less than fiv e. Distribution. Deposit of secured notes with trustee . inte rest rate. Eligibility as security for Federal reserve no tes . Foreign government, etc ., obligations. Authority of mem- ber banks to obligate them selve s. Loan by Federal re- serv e ba nk to ind ivid- ual member bank . Posl, p. 794 . Consent of Federal Reserve Board re- quired. Security. Prov iso. Inte rest rate. 72d CONGRESS. SESS. I. CH.58. FEBRU ARY 27, 1932 . [CHA PTER 58 .] AN ACT To improve the facilities of the Federal reserve system for the service of com- merce, industry, and agriculture, to provide nieans for meeting the needs of member banks in exceptional circumstances, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in C'onghess assembled, That the Federal Rese rve Act, as amen ded, is furt her amen ded by i nser ting, be twee n sections 10 and 11 thereof, a new section reading as follows " S ic . 10 . (a) Upon receiving the consent of not less than five mem- bers of the Federal Reserve hoard, any Federal reserve bank may make advances, in such amount as the board of directors of such Federal reserve bank . may determine, to groups of five or more Illelll- ber banks within its district, a majority of them independently owned and controlled, upon their tinge or demand promissory notes, pro- vided the bank or banks which receive the proceeds of such advances as herein provided have no adequate amounts of eligible and accept- able assets available to enable such bank or banks to obtain sufficient credi t ac comm odat ions fro m the Fe dera l re ser ve b ank thro ugh rediscounts or advances other than as provided in section 10 (b) . The liability of the individual banks in each group must be limited to such proportion of the total amount advanced to such group as the deposit liability of the respective banks bears to the aggregate deposit liability of all banks in such group, but such advances may be made to a lesser number of such member banks if the aggregate amount of their deposit liability constitutes at least 10 per centum of the entire deposit liability of the member banks within such district. Such banks shall be authorized to distribute the proceeds of such loans to such of their number and in such amount as they may agree upon, but before so doing they shall require such recipient banks to deposit with a suitable trustee, representing the entire group, their individual notes made in favor of the group protected by such collat- eral securi ty as may be agreed upon. Any Federal reserve bank making such advance shall charge interest or discount thereon at a rate not less than 1 per centum above its discount rate in effect at the time of making such advance. No such no te upon which adva nces are made by a Federal reserve bank under this section shall be eligible under section 16 of this Act as collateral security for Federal reserve notes. "N o ob liga tion s of any for eign gov ernm ent, ind ivid ual, par tner - ship, association, or corporation organized under the laws thereof shall be eligible as collateral security for advances under this sect ion . "Member banks are authorized to obligate themselves in accord- ance with the provisions of this section ." SEC. 2. The Federal Reserve Act, as amended, is further amended by adding, immediately after such new section 10 (a), an additional new section reading as follows : " SEC. 10. (b) Until March 3, 1933, and in exceptional and exigent circumstances, and when any member bank, having a capital of not exceeding $5,000,000, has no further eligible and acceptable assets available to enable it to obtain adequate credit accommodations through red iscounting at the Federal reserve bank or any other method provided by this Act other than that provided by section 10 (a ), any Federal reserve bank, subject in each case to affirmative action by not less than five members of the Federal Reserve Board, may make advances to such member bank on- its time or demand promissory notes secured to the satisfaction of such Federal reserve bank : Prov ided , That (1) each such note shall bear interest at a