First Revision, General Functions of the Federal Reserve Bank
Title
First Revision, General Functions of the Federal Reserve Bank
Creator
Strong, Benjamin, 1872-1928
Identifier
WWP18883
Date
No date
Source
Benjamin Strong Jr. Papers, New York Federal Reserve Bank
Language
English
Text
First Revise.
GENERAL FUNCTIONS OF THE FEDERAL RESERVE BANK.
Sec. 14.
That the Federal reserve bank shall have power
:(a) To purchase and sell the obligations or other securities of the United States, as defined by Section 5413 of the Revised Statutes, and also such of the obligations of the Territories and Insular possessions of the United States as are guaranteed principal and interest by the United States;
(b) To purchase, sell and deal in gold coin and bullion, to make loans thereon, and to contract for loans of gold coin and bullion, giving security therefor when necessary, which security may include the bonds and other obligations of the United States owned by the Federal reserve bank;
(c) To receive for deposit or collection from any depositing bank or trust company deposits of current funds in lawful money, national bank notes, notes of the Federal reserve bank, or checks or drafts upon solvent banks payable upon presentation;
(d) With the acceptance or endorsement of any depositing bank or trust company, to discount notes, drafts, and bills of exchange arising out of commercial transactions, such notes, drafts and bills to be of a character to be determined and defined by the Federal Reserve Board. Such definition shall only include notes, drafts and bills of exchange issued or drawn or the proceeds of which shall be used for agricultural, industrial or commercial purposes, or which shall represent a bona fide sale of agricultural products or other goods, wares or merchandise, or which shall have been issued for the purchase or sale of the bonds or other obligations of the United States. Such definition shall not, however, include notes, drafts or bills of exchange issued or drawn for the purpose of carrying agricultural products or other goods, wares or merchandise, or for carrying or trading in stocks, bonds or investment securities, other than the bonds and obligations of the United States. Notes, drafts and bills of exchange admitted to rediscount, as so defined under this paragraph, must mature within not exceeding ninety days from the date of discount.
(e) With the acceptance or endorsement of any depositing bank or trust company to discount notes, drafts or bills of exchange which are based upon the exportation or importation of goods, where, wares, merchandise or agricultural products, as determined and defined by the Federal Reserve Board, and which mature within not exceeding six months from the date of discount;
(f) To purchase from member banks and to sell with or without its endorsement, bills of exchange arising out of commercial transactions as determined and defined by the Federal Reserve Board and payable in foreign countries, but such bills of exchange must mature in not exceeding ninety days from the date of the purchase and must bear the signature, endorsement or acceptance of two or more responsible parties, of which at least one shall be that of a depositing bank or trust company;
(g) Under rules and regulations prescribed by the Federal Reserve Board, to purchase and sell in the open market, either from or to depositing banks and trust companies, or through its foreign agencies from or to foreign banks, firms, corporations or individuals, notes, drafts and bills of exchange of the kinds and maturities by this Act made eligible for discount, and cable transfers;
(h) To open and maintain banking accounts in foreign countries, and establish agencies in such countries, for the purpose of purchasing, selling, collecting, and dealing in foreign bills of exchange, gold coin and bullion, and cable transfers, and to buy and sell, with or without its endorsement, through such correspondents or agencies, prime foreign bills of exchange, arising out of commercial transactions, as may be defined by the Federal Reserve Board, which have not exceeding ninety days to run, and which bear the signature, acceptance or endorsement of two or more responsible parties.
GENERAL FUNCTIONS OF THE FEDERAL RESERVE BANK.
Sec. 14.
That the Federal reserve bank shall have power
:(a) To purchase and sell the obligations or other securities of the United States, as defined by Section 5413 of the Revised Statutes, and also such of the obligations of the Territories and Insular possessions of the United States as are guaranteed principal and interest by the United States;
(b) To purchase, sell and deal in gold coin and bullion, to make loans thereon, and to contract for loans of gold coin and bullion, giving security therefor when necessary, which security may include the bonds and other obligations of the United States owned by the Federal reserve bank;
(c) To receive for deposit or collection from any depositing bank or trust company deposits of current funds in lawful money, national bank notes, notes of the Federal reserve bank, or checks or drafts upon solvent banks payable upon presentation;
(d) With the acceptance or endorsement of any depositing bank or trust company, to discount notes, drafts, and bills of exchange arising out of commercial transactions, such notes, drafts and bills to be of a character to be determined and defined by the Federal Reserve Board. Such definition shall only include notes, drafts and bills of exchange issued or drawn or the proceeds of which shall be used for agricultural, industrial or commercial purposes, or which shall represent a bona fide sale of agricultural products or other goods, wares or merchandise, or which shall have been issued for the purchase or sale of the bonds or other obligations of the United States. Such definition shall not, however, include notes, drafts or bills of exchange issued or drawn for the purpose of carrying agricultural products or other goods, wares or merchandise, or for carrying or trading in stocks, bonds or investment securities, other than the bonds and obligations of the United States. Notes, drafts and bills of exchange admitted to rediscount, as so defined under this paragraph, must mature within not exceeding ninety days from the date of discount.
(e) With the acceptance or endorsement of any depositing bank or trust company to discount notes, drafts or bills of exchange which are based upon the exportation or importation of goods, where, wares, merchandise or agricultural products, as determined and defined by the Federal Reserve Board, and which mature within not exceeding six months from the date of discount;
(f) To purchase from member banks and to sell with or without its endorsement, bills of exchange arising out of commercial transactions as determined and defined by the Federal Reserve Board and payable in foreign countries, but such bills of exchange must mature in not exceeding ninety days from the date of the purchase and must bear the signature, endorsement or acceptance of two or more responsible parties, of which at least one shall be that of a depositing bank or trust company;
(g) Under rules and regulations prescribed by the Federal Reserve Board, to purchase and sell in the open market, either from or to depositing banks and trust companies, or through its foreign agencies from or to foreign banks, firms, corporations or individuals, notes, drafts and bills of exchange of the kinds and maturities by this Act made eligible for discount, and cable transfers;
(h) To open and maintain banking accounts in foreign countries, and establish agencies in such countries, for the purpose of purchasing, selling, collecting, and dealing in foreign bills of exchange, gold coin and bullion, and cable transfers, and to buy and sell, with or without its endorsement, through such correspondents or agencies, prime foreign bills of exchange, arising out of commercial transactions, as may be defined by the Federal Reserve Board, which have not exceeding ninety days to run, and which bear the signature, acceptance or endorsement of two or more responsible parties.
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Files
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Citation
Strong, Benjamin, 1872-1928, “First Revision, General Functions of the Federal Reserve Bank,” No date, WWP18883, Benjamin Strong Jr. Papers, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.