73d CONGRESS . SESS . I. CH. 89. JUNE 16, 1933 .
181 bank shall be ineligible as a borrower at the reserve bank of the district under the provisions of this paragraph for such period as t he Fed eral R eserve Boar d shal l dete rmine : Provided, That no temporary carrying or clearance loans made solely for the purpose of facilitating the purchase or delivery of securities offered for public subscription shall be included in the loans referred to in this paragraph ." SEC. 10. Section 14 of the Federal Reserve Act, as amended (U . S . C ., title 12, sees . 353-358), is amended by adding at the end thereof the f ollowi ng new parag raph "(g) The Federal Reserve Board shall exercise special supervision over all relationships and transactions of any kind entered into by any Federal reserve bank with any foreign bank or banker, or with any group of foreign banks or bankers, and all such relationships and transactions shall be subject to such regulations, conditions, and limitations as the Board may prescribe . No officer or other represen- tative of any Federal reser ve bank shall conduct negot iations of any kind with the officers or representatives of any foreign bank or banker without first obtaining the permission of the Federal Reserve Board. The Federal Reserve Board shall have the right, in its discretion, to be represented in any conference or negotiations by such representative or representatives as the Board may designate . A full report of all conferences or negotiations, and all understand- ings or agreements arrived at or transactions agreed upon, and all other material facts appertaining to such conferences or negotiations, shall be filed with the Federal Reserve Board in writing by a duly authorized o fficer of eac h Federal res erve bank whic h shall have participated in such conferences or negotiations ." SEC. 11. (a) Section 19 of the Federal Reserve Act, as amended (U.S .C ., title 12, sees . 142, 374, 461-466 ; Supp . VI, title 12, sec . 462a), is amended by inserting after the sixth paragraph thereof the follow- ing new paragraph : " No member bank shall act as the medium or agent of any non- banking corpor ation, partne rship, associa tion, busines s trust , or i ndi- vidual in making loans on the security of stocks, bonds, and other investm ent sec urities to br okers o r deale rs in stocks, bonds, and o ther investment securities . Every violation of this provision by any member bank shall be punishable by a fine of not more than $100 per day during the continuance of such violation ; and such fine may be collected, by suit-or otherwise, by the Federal reserve bank of the district in which such member bank is located ." (b) Such secti on 19 of the Federal Reser ve Act, as ame nded, is further amended by adding at the end thereof the following new paragraphs : " No member bank shall, directly or indirectly by any device what- aem~a payments o- soev er, pay any inte rest on any depo sit whic h is pay able on dema nd
- hibited.
Provided, That nothing herein contained shall be construed as pro- hibiting the payment of interest in accordance with the terms of any cert ific ate of d epos it o r ot her cont ract her etof ore ente red into in good faith which is in force on the date of the enactment of this paragraph ; but no such certificate of deposit or other contract shall be renewed or extended unless it shall be modified to conform to this paragraph, and every member bank shall take such action as may be necessary to conform to this paragraph as soon as possible consist- ently with its contractual obligations : Provided, however, That this Appli cati on to de- paragraph shall not apply to any deposit of such bank which is ccountryyable in foreign payable only at an office thereof located in a foreign country, and shall not apply to any deposit made by a mutual savings bank, nor to any deposit of public funds made by or on behalf of any State, Public funds . In eligi ble as bo rrow - er at reserve bank thereafter . Proviso . Te mpor ary c arry ing or clearance loans. Vol.38,p. 265. U.S.C., p. 282. Supervision by Board, foreign trans- actions of reserve bank . Regulations . P ermis sion to con- duct foreign negotia- tions. Right of Board to representation during conferences Report to be filed . Vol. 38, p. 270. U.S .C., pp . 268, 284, 287; Supp. VI, p. 138. Memb er bank as agent in making loans to stock brokers pro- hibited . Penalty provision. Vol . 38, p. 270. Provisos . Prior cont ract s.
