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The Commoner
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purpose, aro hereby authorized. The
oaid notes Hhnll ho obligations of the
United States and shall ho rccolvablo
by all national and member banks
and Federal rosorvo banks and for all
taxes, customs, and other public dues.
Thoy shall ho rodeomod In gold on
doraand at tho Treasury department
of tho United Statos, in tho city of
Washington, District of Columbia, or
in gold or lawful money at any Fed
eral rosorvo bank.
Any Fedoral rosorvo bank may
make application to tno local Fedoral
reservo agont for such amount of tho
Federal reservo notes herembeforo
provldod for as it may require. Such
application shall bo accompanied with
h tender to tho local Fedoral reservo
agent of collateral In amount equal
to tho sum of tho Federal reservo
notes thus appliod for and issued
pursuant to such application. The
collateral security thus offered shall
bo notes and bills accoptod for redis
count under tho provisions of section
thirteen of this Act, and the Federal
reservo agont Bhall each day notify
tho Federal Rosorvo Board of all
issues and withdrawals of Fedoral re
eorvo nqtes to and by tho Fedoral re
servo bank to which ho is accredited.
Tho said Fedoral Reserve Board may
nl any time call upon a Fedoral re
Borvo bank for additional security to
protect tho Fedoral reserve notes
issued to it.
Evory Federal reserve bank shall
maintain reserves In gold or lawful
monoy of not less than thirty-five
per contum against its deposits and
reserves In gold of not less than forty
per contum against its Fedoral re
servo notos in actual circulation, and
not offset by gold or lawful money
doposlted with tho Federal reserve
agont. Notos so paid out shall bear
upon their faces a distinctive letter
and serial number, which shall be
assignod by the Federal Reserve
Board to each Fodeal reserve bank.
Whonevor Fedoral reserve notes
Issued through one Fedoral reserve
hunk shall bo received by another
Federal reservo bunk thoy shall bo
promptly returned for credit or re
demption to the Federal reserve bank
through which they wore originally
issued. No Federal resorve bank
shall pay out notes issued through
another under penalty of a tax of ten
per centum upon tho faco valuo of
notos so paid out. Notos presented
for redemption at the Treasury of tho
United States shall he paid out of the
redemption fund and returned to tho
Federal reservo banks through which
they were originally issued, and
thereupon such Federal reserve bank
shall, upon demand of tho Secretary
of tho Treasury, reimburse such re
demption fund in lawful monoy or if
such Federal reserve notes have been
rodeomod by tho Treasurer in gold or
gold certificates, then such funds
shall bo reimbursed to tho extent
deemed necessary by tho Secretary of
tho Treasury in gold or gold certifi
cates, and such Federal reserve bank
shall, so long as any of its Federal
reserve notes remain outstanding,
maintain with the Treasurer in gold
an amount sufllcient in the judgment
of the Secretary to provide for all re
demptions to be made by tho Treas
urer. Federal reservo notes received
by tho Treasury, otherwiso than for
redemption, may bo exchanged for
gold out of the redemption fund here
inafter provided and returned to the
reservo bank through which they
were originally issued, or they may
be returned to such bank for the
credit of the United States. Federal
reservo notes unfit for circulation
shall be returned by the Fedoral re
serve agents to the Comptroller of
the Curreucy for cancellation and de
struction. The Fedoral Reserve Board shall
require each Federal reserve bank to
maintain on deposit in the Treasury
of the United States a sum in gold
sufllcient in tho judgment of tho Sec
retary of tho Treasury for tho re
demption of the Federal reserve notes
issued to such bank, but In no event
less than flvo per centum; but such
deposit of gold shall be counted and
included as part of tho forty per
centum reservo hereinbeforo re
quired. Tho board shall have the
right, acting through the Federal re
serve agont, to grant in whole or in
part or to reject entirely the applica
tion of any Federal reserve bank for
Federal reservo notes; but to tho ex
tent that such application may be
granted tho Fedoral Reserve Board
shall, through its local Federal re
serve agont, supply Federal reserve
notes to tho bank so applying, and
such bank shall bo charged with the
amount of such notes and shall pay
such rate of intorest on said amount
as may bo established by the Federal
Reserve Board, and tho amount of
such Federal resorve notes so issued
to any such bank shall, upon de
livery, together with such notes of
such Federal reservo bank as may be
issued under section eighteen of this
Act upon security of United States
two per centum Government bonds,
become a first and paramount lien
on all assets of such bank.
Any Federal reserve bank may at
any time reduce Its liability for out
standing Federal reserve notes by do
positing, with tho Fedoral reserve
agent, its Fedoral reservo notes, gold,
gold certificates, or lawful money of
tho United States. Federal reserve
notes so deposited shall not he re
issued, except upon compliance with
the conditions of. an original Issue.
The Federal reserve agent shall
hold such gold, gold certificates, or
lawful monoy available exclusively
for exchange for the outsanding Fed
oral reserve notes when offered by
the resorve hank of which he is a di
rector. Upon the request of the Sec
retary of the Treasury the Federal
Reserve Board shall require tho Fed
oral reserve agent to transmit so
much of said gold to the Treasury of
tho United States as may bo required
for the exclusive purpose of the re
demption of such notes.
Any Federal reserve bank may at
its discretion withdraw collateral de
posited with the local Federal reserve
agent for the protection of its Fed
eral reservo notes deposited with it
and shall at the same time substitute
therefor other like collatcrc.l of equal
amount with the approval of the Fed
eral reserve agent upon regulations
to bo prescribed by the Federal Re
servo Board.
' In order to furnish suitable notes
for circulation as Federal resorve
notes, the Comptroller of the Cur
rency shall, under the direction of
the Secretary of the Treasury,cause
plates and dies to be engraved in the
best manner to guard against coun
terfeits and fraudulent alterations,
and shall have printed therefrom and
numbered such quantities of such
notes of the denominations of $5,
$10, $20, $50, $100, as may be re
quired to supply the Federal reserve
banks. Such notes shall be in form
and tenor as directed by the Secre
tary of the Treasury under the pro
visions of this Act and shall bear the
distinctive numbers of the several
Federal reservo banks through which
they are Issued.
When such notes have been pre
pared, they shall be deposited in the
Treasury, or in the subtreasury or
mint of tho United States nearest the
piace ol Dusmess of each Federal re
sorve bank and shall be held for the
use of such bank subject to the order
of the Comptroller of the Currency
for their delivery, as provided by this
Act.
The plates and dies to be procured
but the Comptroller of the Currency
for the printing of such circulating
notes shall remain under his control
and direction, and the expenses
necessarily incurred in executing the
laws relating to the procuring of such
notes, and all other expenses inci
dental to their issue and retirement,
shall be paid by the Federal reserve
banks, and the Federal Reserve
Board shall include in its estimate of
expenses levied against the Federal
reserve banks a sufficient amount to
cover the expenses herein provided
for.
Tho examination of plates, dies,
bed pieces, and so forth, and regula
tions relating to such examination of
plates, dies, and so forth, of national
bank notes provided for in section
fifty-one hundred and seventy:tour
Revised Statutes, is hereby extended
to include notes herein provided for.
Any appropriation heretofore made
out of the general funds of the Treas
ury for engraving plates and dies, the
purchase of distinctive paper, or to
cover any other expense in connec
tion with the printing of national
bank notes or notes provided for by
the Act of May thirtieth, nineteen
hundred and eight, and any distinc
tive paper that may be on hand at
the time of the passage of this Act
may be used in the discretion of the
Secretary for the purposes of this
Act, and should the appropriations
heretofore made be insufficient to
meet the requirements of this Act in
addition to circulating notes provided
for by existing law, the Secretary is
hereby authorized to use so much of
any funds in the Treasury not other
wise appropriated for the purpose of
furnishing the notes aforesaid: Pro
vided, however, That nothing in this
section contained shall be construed
as exempting national banks or Fed
eral resorve banks from their liability
to reimburse the United States for
any expenses incurred in printing
and issuing circulating notes.
Every Federal reserve bank shall
receive on deposit at par from mem
ber banks or from Federal reserve
banks checks and drafts drawn upon
any of its depositors, and when re
mitted by a Federal reserve bank,
checks and drafts drawn by any de
positor in any other Federal reserve
bank or member bank upon funds to
the credit of said depositor in said
reserve bank or member bank.
Nothing, herein contained shall be
construed as prohibiting a member
bank from charging its actual ex
pense incurred in collecting and re
mitting funds, or for exchange sold
to its patrons. The Federal Reserve
Board shall, by rule, fix the charges
to be collected by the member banks
from its patrons whose checks are
cleared through the Federal reserve
bank and the charge which may be
imposed for the service of clearing
or collection rendered by the Federal
reserve bank.
The Federal Reserve Board shall
make and promulgate from time to
time regulations governing the trans
fer of funds and charges therefor
among Federal reserve banks and
their branches, and may at its dis
cretion exercise the functions of a
clearing house for such Federal re
serve banks, or may designate a Fed
eral reserve bank to exercise such
functions, and may also require each
such bank to exercise the functions
of a clearing house for its member
banks.
Sec. 17. So much of the provi
sions of section fifty-one hundred and
fifty-nine of the Revised Statutes of
the United Statp.s. nnr? nonttnn
of the Act of June twentieth eighteen
hundred and seventy-four, and sec
tion eight of the Act of July twelfth
eighteen hundred and eighty-two'
and of any other provisions of exist
ing statutes as require that before
any national banking associations
shall be authorized to commence
banking business it shall transfer and
deliver to the Treasurer of the United
btates a stated amount of United
States registered bondsjs hereby re
pealed. w -REFUNDING
BONDS
Sec. 18. After two years from tho
passage of this Act, and at any time
during a period of twenty years
thereafter, any member bank desir
ing to retire the whole or any part of
its circulating notes, may file with
the Treasurer of the United States an
application to sell for its account, at
par and accrued interest, United
States bonds securing circulation to
bo retired.
The Treasurer shall, at the end of
each quarterly period, furnish the.
Federal Reserve Board with a list of
such applications, and the Federal
Reserve Board may, in its discre
tion, require the Federal reserve
banks to purchase suchbonds from
the banks whose applications have
been filed with the Treasurer at least
ten days before the end of any quar
terly period at which the Federal
Reserve Board may direct the pur
chase to be made: Provided, That
Federal reserve banks shall not be
permitted to purchase an amount to
exceed $25,000,000 of such bonds in
any one year, and which amount shall
include bonds acquired under section
four of this Act by the Federal re
servo bank.
Provided further, That the Federal
Reserve Board shall allot to each '
Federal reserve bank such proportion
of such bonds as the capital and sur
plus of such bank shall bear to "the
aggregate capital and surplus of all
the Federal reserve banks.
Upon notice from the Treasurer of
the amount of bonds so sold for its '
account, each member bank shall '
duly assign- and transfer, in writing, '
such bonds to the. Federal reserve
bank purchasing the same, au,d such
Federal reserve bank .shall, tnepe-'
upon, deposit lawful money with te'
Treasurer of the United States 'for
the purchase price of such bonds,"
and the Treasurer shall pay to the
member bank selling such bonds any
balance due after deducting a suffi
cient sum to redeem its outstanding'
notes secured by such bonds, which
notes shall be canceled and perma
nently retired when redeemed.
The Federal reserve banks purchas
ing such bonds shall be permitted to .
take out an amount of circulating,
notes equal to the par value of such
bonds.
Upon the deposit with the Treas
urer of the United States of bonds so
purchased, or any bonds with the
circulating privilege acquired under
section four of this Act, any Federal
reserve bank making such deposit in
the manner provided by existing law,
shall be entitled to receive from the
Comptroller of the Currency circulat
ing notes in blank, registered and
countersigned as provided by law,
equal in amount to the par value of
the bonds so deposited. Such notes
shall be obligations of the Federal re-"
serve bank procuring the same, and
shall be in form prescribed by the
Secretary of the Treasury, and to the
same tenor and effect as national
bank notes noT provided by law.
They shall be issued and redeemed
under the same terms and conditions
as national-bank notes except that
they shall not be limited to the
amount of the capital stock of the
Federal reserve bank issuing them.
Upon application of any Federal
reserve bank, annrnvp.ri hv fh !?,
eral Reserve Board, the Secretary of
the Treasury may issue, in exchange
for United States two per centum
gold bonds bearing the circulating
privilege, but against which no circu
lation is outstanding, one-year gold
notes of. the United States without
the circulation privilege, to an
amount not to exceed one-half cf tho
two per centum bonds so tendered for
exchange, and thirty-year three per
centum gold bonds without the cir
culation privilege for the remainder
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