§ 417. Custody and safe-keeping of notes issued to and collateral deposited with Reserve agent

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1917

   Pub. L. 65–32 § 7 · 40 Stat. 232

   Enacted · 12 U.S.C. § 417

   June 21, 1917, ch. 32, § 7 (par.), 40 Stat. 238

   Source evidence

   Code source credit
   June 21, 1917, ch. 32, § 7 (par.), 40 Stat. 238

   Enacted provision · exact public law section
   Sec. 7. That section sixteen, paragraphs two, three, four, five, six, Applications for, by reserve banks. Vol. 38, p. 265. Vol. 39, p. 754, amended. and seven, be further amended and reenacted so as to read as follows: “Any Federal reserve bank may make application to the local Federal reserve agent for such amount of the Federal reserve notes hereinbefore provided for as it may require. Such application shall be accompanied with a tender to the local Federal reserve agent of Collateral for. collateral in amount equal to the sum of the Federal reserve notes thus Classes of paper extended. applied for and issued pursuant to such application. The collateral security thus offered small be notes, drafts, bills of exchange, or acceptances acquired under the provisions of section thirteen of this Act, or bills of exchange indorsed by a member bank of any Federal reserve district and purchased under the provisions of section fourteen of Ante, p. 235. Vol. 38, p. 264. this Act, or bankers’ acceptances purchased under the provisions of said section fourteen, or gold or gold certificates; but m no event shall such collateral security, whether gold, gold Daily notices of issues and withdrawals. certificates, or eligible paper, be less than the amount of Federal Additional security. reserve notes applied for. The Federal reserve agent shall each day notify the Federal Reserve Board of all issues and withdrawals of Federal reserve notes to and by the Federal reserve bank to which he is accredited. The said Federal Reserve Board may at any time call upon a Federal reserve bank for additional security to protect the Federal reserve notes issued to it. Reserves for deposits and circulation. Vol. 38, p. 266, amended. “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 Proviso. Gold collateral with reserve agents included in. 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 Designation of notes. in actual circulation. Notes so paid out shall bear upon their faces a Received by another to be returned to issuing bank or the Treasurer. 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 Penalty for other use. 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 Redemption at the Treasury. 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 Fed eral reserve bank shall, upon demand of the Secretary of the Treasury, reimburse such redemption fund in lawful money or, if such Federal Reimbursement by issuing bank. 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 Gold reserve to be kept. 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 Exchange, etc., it not redeemed. 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 Destruction of unfit notes. returned by the Federal reserve agents to the Comptroller of the Currency for cancellation and destraction. “The Federal Reserve Board shall require each Federal reserve bank Gold redemption fund in the Treasury. 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 Included in circulation reserve. counted and included as part of the forty per centum reserve hereinbefore required. The board shall have the right, acting through the Board to control issue. 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 applving, and such bank shall be charged with the amount of notes issued to it and shall pay Interest payment limited. such rate of interest as may be established by the Federal Reserve Board on only that amount of such notes which equals the total amount of its outstanding Federal reserve notes less the amount of gold or gold certificates held by the Federal reserve agent as collateral security. Federal reserve notes issued to any such bank shall, upon Lien for notes issued. Vol. 38, p. 268. delivery, together with such notes of such Federal reserve 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 the assets of such bank. “Any Federal reserve bank may at any time reduce its liability for Reduction of reserve liability. Vol. 38, p. 267. outstanding Federal reserve notes by depositing with the Federal reserve agent its Federal reserve notes, gold, gold certificates, or lawful money of the United States. Federal reserve notes so deposited shall not be reissued, except upon compliance with the conditions of an original issue. “The Federal reserve agent shall hold such gold, gold certificates, or Reserve agent’s duties. Vol. 38, p. 267, amended. lawful money available exclusively for exchange for the outstanding Federal reserve notes when offered by the reserve bank of which he is a director. Upon the request of the Secretary of the Treasury the Transfer of gold to Treasurer. Federal Reserve Board shall require the Federal reserve agent to transmit to the Treasurer of the United States so much of the gold held by him as collateral security for Federal reserve notes as may be required for the exclusive purpose of the redemption of such Federal reserve notes, but such gold when deposited with the Treasurer Security as collateral retained. shall be counted and considered as if collateral security on deposit with the Federal reserve agent. “Any Federal reserve bank may at its discretion withdraw collateral Exchange of collateral. Vol. 3 8, p. 2 6 7, amended. deposited with the local Federal reserve agent for the protection of its Federal reserve notes issued to it and shall at the same time substitute therefor other collateral of equal amount with the approval of the Federal reserve agent under regulations to be prescribed by Deposit for retirement. the Federal Reserve Board. Any Federal reserve bank may retire any of its Federal reserve notes by depositing them with the Federal reserve agent or with the Treasurer of the United States, anil such Return of collateral. Federal reserve bank shall thereupon be entitled to receive back the collateral deposited with the Federal reserve agent for the security of such notes. Federal reserve banks shall not be required to maintain the reserve or the redemption fund heretofore provided for against Reissue restricted. Federal reserve notes which have been retired. Federal reserve notes so deposited shall not be reissued except upon compliance with the conditions of an original issue.” Notes and gold deposits. All Federal reserve notes and all gold, gold certificates, and lawful money issued to or deposited with any Federal reserve agent under the provisions of the Federal reserve Act shall hereafter be hold for such agent, under such rules and regulations as the Federal Reserve Joint custody of reserve agent and Board. Board may prescribe, in the joint custody of himself and the Federal reserve bank to which he is accredited. Such agent and such Federal Liability. reserve bank shall be jointly liable for the safe-keeping of such Federal reserve notes, gold, gold certificates, and lawful money. Nothing herein contained, however, shall be construed to prohibit a Deposits of gold with Board or Treasurer. Federal reserve agent from depositing gold or gold certificates with the Federal Reserve Board, to be held by such board subject to his order, or with the Treasurer of the United States for the purposes authorized by law.

2. 1968

   Special Drawing Rights Act

   Pub. L. 90–349 § 5(c) · 82 Stat. 188

   Inserted · 12 U.S.C. § 417

   Pub. L. 90–349, which directed amendment of “[t]he seventh paragraph of section 16 of the Federal Reserve Act, as amended (12 U.S.C. 417)” by inserting “, Special Drawing Right certificates,” after “gold certificates” in the first sentence, “Special Drawing Right certificates,” after “gold certificates,” in the second sentence, and “and Special Drawing Right certificates” after “gold certificates” in the third sentence, was executed by making the insertions in this section, to reflect the probable intent of Congress

   Source evidence

   Code amendment note
   Pub. L. 90–349, which directed amendment of “[t]he seventh paragraph of section 16 of the Federal Reserve Act, as amended (12 U.S.C. 417)” by inserting “, Special Drawing Right certificates,” after “gold certificates” in the first sentence, “Special Drawing Right certificates,” after “gold certificates,” in the second sentence, and “and Special Drawing Right certificates” after “gold certificates” in the third sentence, was executed by making the insertions in this section, to reflect the probable intent of Congress.

   Enacted provision · exact public law section
   (c) The seventh paragraph of section 16 of the Federal Reserve Act, as amended (12 U.S.C. 417), is amended by (i) inserting “, Special Drawing Right certificates,” after “gold certificates” in the first sentence; (ii) inserting “Special Drawing Right certificates,” after “gold certificates,” in the second sentence; and (iii) inserting “and Special Drawing Right certificates” after “gold certificates” in the third sentence.

2 of 2 references resolved to an enrolled provision