There is set forth below a summary of the principal provisions of the Banking Act of 1933 (Glass Bill), as approved by the President on June 16, 1933.
Title.
This section merely provides that the short title of the act shall be the "Banking Act of 1933."
Definitions.
In view of the concise language in which the definitions are phrased, no attempt will be made to summarize them, but for convenience the definitions are set forth here:
" (a) The terms 'banks', 'national bank', 'national banking association', 'member bank', 'board', 'district', and 'reserve bank' shall have the meanings assigned to them in section 1 of the Federal Reserve Act, as amended.
"(b) Except where otherwise specifically provided, the term 'affiliate' shall include any corporation, business trust, association, or other similar organization—
"(1) Of which a member bank, directly or indirectly, owns or controls either a majority of the voting shares or more than 50 per centum of the number of shares voted for the election of its directors, trustees, or other persons exercising similar functions at the preceding election, or controls in any manner the election of a majority of its directors, trustees, or other persons exercising similar functions; or
"(2) Of which control is held, directly or indirectly, through stock ownership or in any other manner, by the shareholders of a member bank who own or control either a majority of the shares of such bank or more than 50 per centum of the number of shares voted for the election of directors of such bank at the preceding election, or by trustees for the benefit of the shareholders of any such bank; or
"(3) Of which a majority of its directors, trustees, or other persons exercising similar functions are directors of any one member bank.
"(c) The term 'holding company affiliate' shall include any corporation, business trust, association, or other similar organization—
"(1) Which owns or controls, directly or indirectly, either a majority of the shares of capital stock of a member bank or more than 50 per centum of the number of shares voted for the election of directors of any one bank at the preceding election, or controls in any manner the election of a majority of the directors of any one bank; or
"(2) For the benefit of whose shareholders or members all or substantially all the capital stock of a member bank is held by trustees."
Control of Federal reserve bank credit by Federal Reserve Board.
Section 4 of the Federal Reserve Act is amended so as to provide that the board of directors of each Federal reserve bank shall administer its affairs fairly and impartially and without discrimination among member banks and may extend to each member bank such accommodations as may be safely and reasonably made with due regard for the claims of other members, the maintenance of sound credit conditions and the accommodation of commerce, industry and agriculture.
Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for any purpose inconsistent with sound credit conditions, and shall give consideration to such information in determining whether to make advances to such member banks. Undue use of bank credit shall be reported to the Federal Reserve Board by the Chairman of the Federal reserve bank, and the Board may suspend a member bank from the use of the credit facilities of the System if, in its judgment, the bank is making such undue use of bank credit.
