FeperAL RESERVE ACT
Every Federal reserve bank shall maintain reserves in gold or lawful money of not
less than thirty-five per centum against its deposits and reserves in gold of not less
than forty per centum against its Federal reserve notes in actual circulation: Provided,
however, That when the Federal reserve agent holds gold or gold certificates as collateral
for Federal reserve notes issued to the bank such gold or gold certificates shall be
counted as part of the gold reserve which such bank is required to maintain against
its Federal reserve notes in actual circulation. Notes so paid out shall bear upon their
faces a distinctive letter and serial number which shall be assigned by the Federal
Reserve Board to each Federal reserve bank. Whenever Federal Reserve notes issued
through one Federal reserve bank shall be received by another Federal reserve bank,
they shall be promptly returned for credit or redemption to the Federal reserve bank
through which they were originally issued or, upon direction of such Federal reserve
bank, they shall be forwarded direct to the Treasurer of the United States to be retired.
No Federal reserve bank shall pay out notes issued through another under penalty of a
tax of ten per centum upon the face value of notes so paid out. Notes presented for
redemption at the Treasury of the United States shall be paid out of the redemption
fund and returned to the Federal reserve banks through which they were originally
issued, and thereupon such Federal reserve bank shall, upon demand of the Secretary
of the Treasury, reimburse such redemption fund in lawful money or, if such Federal
reserve notes have been redeemed by the Treasurer in gold or gold certificates, then
such funds shall be reimbursed to the extent deemed necessary by the Secretary of the
Treasury in gold or gold certificates, 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 sufficient in the judgment of the Secretary to provide for all redemptions to
be made by the Treasurer. Federal reserve notes received by the Treasurer otherwise
than for redemption may be exchanged for gold out of the redemption fund hereinafter
provided and returned to the reserve bank through which they were originally issued,
or they may be returned to such bank for the credit of the United States. Federal
reserve notes unfit for circulation shall be returned by the Federal reserve agents to the
Comptroller of the Currency for cancellation and destruction.
The Federal Reserve Board shall require each Federal reserve bank to maintain on
deposit in the Treasury of the United States a sum in gold sufficient in the judgment
of the Secretary of the Treasury for the redemption of the Federal reserve notes issued
to such bank, but in no event less than five per centum of the total amount of notes
issued less the amount of gold or gold certificates held by the Federal reserve agent as
collateral security; but such deposit of gold shall be counted and included as part of
the forty per centum reserve hereinbefore required. The board shall have the right,
acting through the Federal reserve agent, to grant in whole or in part, or to reject
entirely the application of any Federal reserve bank for Federal reserve notes; but to
the extent that such application may be granted the Federal Reserve Board shall,
through its local Federal reserve agent, supply Federal reserve notes to the banks so
pplying, and such bank shall be charged with the amount of notes issued to it and
shall pay such rate of interest as may be established by the Federal Reserve Board on
only that amount of such motes which equals the total amount of its outstanding
Federal reserve notes less the amount of gold or gold certificates held by the Federal
feserve agent as collateral security. Federal reserve notes issued to any such bank
[119]
