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SEC. 18 
FEDERAL RESERVE ACT 
secured by such bonds, which notes shall be canceled and 
Dermanently retired when redeemed. 
The Federal reserve banks purchasing such bonds shall 
be permitted to take out an amount of circulating notes 
*qual to the par value of such bonds. 
. Upon the deposit with the Treasurer of the United 
States of bonds so purchased, or any bonds with the cir- 
culating 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 circulating 
Dotes in blank, registered and countersigned as provided 
by law, equal in amount to the par value of the bonds 
30 deposited. Such notes shall be the obligations of the 
Federal reserve 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 now 
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, ap- 
proved by the Federal Reserve Board, the Secretary of the 
Treasury may issue, in exchange for United States two 
per centum gold bonds bearing the circulation privilege, 
but against which no circulation is outstanding, one- 
year gold notes of the United States without the circula- 
tion privilege, to an amount not to exceed one-half of the 
‘wo per centum bonds so tendered for exchange, and 
“hirty-year three per centum gold bonds without the 
circulation privilege for the remainder of the two per 
centum bonds so tendered: Provided, That at the time of 
such exchange the Federal reserve bank obtaining such 
one-year gold notes shall enter into an obligation with 
the Secretary of the Treasury binding itself to purchase 
from the United States for gold at the maturity of such 
one-year notes, an amount equal to those delivered in ex- 
change for such bonds, if so requested by the Secretary, 
and at each maturity of one-year notes so purchased by 
such Federal reserve bank, to purchase from the United 
States such an amount of one-year notes as the Secretary 
may tender to such bank, not to exceed the amount issued 
to such bank in the first instance, in exchange for the two 
45