HOUSE BILL.

matters within the jurisdiction of said board; (3) to call for complete information and to make recommendations in regard to discount rates, rediscount business, note issues, reserve conditions in the various districts, the purchase and sale of gold or securities by reserve banks, open-market operations by said banks, and the general affairs of the reserve banking system.

24

REDISCOUNTS.

SEC. 14. That any Federal reserve bank may receive from any member, bank deposits of current funds in lawful money, national bank notes, Federal reserve notes, or checks and drafts upon solvent banks, payable upon presentation; or, solely for exchange purposes, may receive from other Federal reserve banks deposits of current funds in lawful money, national bank notes, or checks and drafts upon solvent banks, payable upon presentation.

Upon the indorsement of any member bank any Federal reserve bank may discount notes and bills of exchange arising out of commercial transactions; that is, notes and bills of exchange issued or drawn for agricultural, industrial, or commercial purposes, or the proceeds of which have been used, or may be used, for such purposes, the Federal Reserve Board to have the right to determine or define the character of the paper thus eligible for discount, within the meaning of this Act; nothing herein contained shall be construed to prohibit such notes and bills of exchange, secured by staple agricultural products, or other goods, wares, or merchandise from being eligible for such discount; but such definition shall not include notes or bills issued or drawn for the purpose of carrying or trading in stocks, bonds, or other investment securities. Notes and bills

S D-63-2-vol 25- -5

SEC. 14 13. That any Any Federal reserve bank may receive from any of its member bank banks, and from the United States, deposits of current funds in lawful money, national-bank notes, Federal reserve notes, or checks and drafts upon solvent banks of the Federal reserve system, payable upon presentation; or, solely for exchange purposes, may receive from other Federal reserve banks deposits of current funds in lawful money, national-bank notes, or checks and drafts upon solvent member or other Federal reserve banks, payable upon presentation.

Upon the indorsement of any of its member bank banks, with a waiver of demand notice and protest by such bank, any Federal reserve bank may discount notes, drafts, and bills of exchange arising out of actual commercial transactions; that is, notes, drafts, and bills of exchange issued or drawn for agricultural, industrial, or commercial purposes, or the proceeds of which have been used, or may are to be used, for such purposes, the Federal Reserve Board to have the right to determine or define the character of the paper thus eligible for discount, within the meaning of this Act; nothing herein. Nothing in this Act contained shall be construed to prohibit such notes, drafts, and bills of exchange, secured by staple agricultural products, or other goods, wares, or merchandise from being eligible for such discount; but such

42

HITCHCOCK AMENDMENT.

representations concerning matters within the jurisdiction of said board; (3) to call for complete information and to make recommendations in regard to discount rates, rediscount business, note issues, reserve conditions in the various districts, the purchase and sale of gold or securities by reserve banks, open-market operations by said banks, and the general affairs of the reserve banking system.

REDISCOUNTS.

SEC. 14. That any Federal reserve bank may receive from any member bank and from the United States deposits of current funds in lawful money, national bank notes, Federal reserve notes, er and checks and drafts upon solvent member banks of the Federal reserve system, payable upon presentation; or and, solely for exchange purposes, may receive from other Federal reserve

40

bank deposits of current funds in lawful money, national bank notes, er and checks and drafts upon solvent member or other Federal · reserve banks, payable upon presentation. Reserve banks shall not pay interest on deposits.

Upon the indorsement of any member bank with a waiver of demand notice and protest any Federal reserve bank may discount notes, drafts, and bills of exchange arising out of actual commercial transactions; that is, notes, drafts, and bills of exchange issued or drawn for agricultural, industrial, or commercial purposes, or the proceeds of which have been used, or may be used, for such purposes, the Federal Reserve Board to have the right to determine or define the character of the paper thus eligible for discount, within the meaning of this Act; nothing herein contained shall be construed to prohibit such notes, drafts, and bills of exchange, secured by staple agricultural products, or other goods, wares, or merchandise from being eligible for such discount; but such definition shall not include notes, drafts, or bills covering merely invest

HOUSE BILL.

admitted to discount under the terms of this paragraph must have a maturity of not more than ninety days.

25

Upon the indorsement of any member bank any Federal reserve bank may discount the paper of the classes hereinbefore described having a maturity of more than ninety and not more than one hundred and twenty days, when its own cash reserve exceeds thirtythree and one-third per cent of its total outstanding demand liabilities exclusive of its outstanding Federal reserve notes by an amount to be fixed by the Federal Reserve Board; but not more than fifty per cent of the total paper so discounted for any member bank shall have a maturity of more than ninety days.

Upon the indorsement of any member bank any Federal reserve bank may discount acceptances of such banks which are based on the exportation or importation of goods and which mature in not more than six months and bear the signature of at least one member bank in addition to that of the acceptor. The amount so discounted shall at no time exceed one-half the capital stock of the bank for which the rediscounts are made.

The aggregate of such notes and bills bearing the signature or indorsement of any one person, company, firm, or corporation rediscounted for any one bank shall at

OWEN AMENDMENT.

definition shall not include notes, drafts, or bills covering merely investments or issued or drawn for the purpose of carrying or trading in stocks, bonds, or other investment securities, except bonds and notes of the Government of the United States.

Notes, drafts, and bills admitted to discount under the terms of this paragraph must have a maturity at the time of discount of not more than ninety days.

Upon the indorsement of any member bank any Federal reserve bank may discount the paper of the elasses hereinbefore described hav ing a maturity of more than ninety and not more than one hundred and twenty days, when its own cash re serve exceeds thirty three and onethird per cent of its total outstand ing demand liabilities exclusive of its outstanding Federal reserve notes by an amount to be fixed by the Federal Reserve Board; but not more than fifty per cent of the total paper so discounted for any member bank shall have a maturity of more than ninety days.

43

Federal

Upon the indorsement of any member bank any Any reserve bank may discount acceptances of such banks which are based on the exportation or importation or exportation or domestic shipment of goods and which mature in have a maturity at time of discount of not more than six three months, and bear the signature of indorsed by at least one member bank in addition to that of the acceptor. The amount of acceptances so discounted shall at no time exceed one-half the paid-up capital stock and surplus of the bank for which the rediscounts are made.

The aggregate of such notes and bills bearing the signature or indorsement of any one person, company, firm, or corporation rediscounted for any one bank shall at

HITCHCOCK AMENDMENT.

ments or issued or drawn for the purpose of carrying or trading in stocks, bonds, or other investment securities, except bonds and notes of the Government of the United States and interest-bearing obligations of its dependencies the principal and interest of which have been guaranteed by the United States.

41

Notes and

bills admitted to discount under the terms of this paragraph must have a maturity at the time of discount of not more than ninety one hundred and eighty days: Provided, however, That not more than fifty per centum of the paper discounted for any member bank shall have a maturity exceeding ninety days and in no case shall any member bank have more than $200,000 of rediscounts having a maturity longer than ninety days.

Upon the indorsement of any member bank any Federal reserve bank may discount the paper of the classes hereinbefore described hav ing a maturity of more than ninety and not more than one hundred and twenty days, when its own cash reserve exceeds thirty three and one third per cent of its total out standing demand liabilities exclu sive of its outstanding Federal reserve notes by an amount to be fixed by the Federal Reserve Board; but not more than fifty per cent of the total paper so discounted for any member bank shall have a ma turity of more than ninety days.

Upon the indorsement of any member bank-any Any Federal reserve bank may discount acceptances of such member banks which are based on the exportation or importation of goods and which ma ture in have a maturity at time of discount of not more than six months and of acceptances based on domestic shipments of goods and which have a maturity at time of discount of not more than four months and bear the signature of at least one member bank in addition to that of the

acceptor. The amount SO discounted shall at no time. exceed one-half the capital stock of the bank for which the rediscounts are made.

The aggregate of such notes and bills bearing the signature or indorsement of any one person, company, firm, or corporation rediscounted for any one bank shall at