73d CONGRESS . SESS. I. CH. 8. MARCH 24 .1933 . said Federal reserve bank, in its discretion and after inspection and approval of the collate ral and a tho rough examinat ion of the applying bank or trust company, may make direct loans to such State bank or trust company under the terms provided in section 10 (b) of the Federal Reserve Act, as amended by section 402 of this Act : Provided, That loans may be made t o any appl ying nonmember State bank or trust company upon eligible security . All appl icat ions for suc h lo ans shal l be acc ompa nied by the writ ten approval of the State banking department or commission of the State from w hich t he St ate ba nk or trust compa ny has recei ved its charter and a statement from the said State banking department or commission that in its judgment said State bank or trust company is in a sound condition . The notes representing such loans shall be eligible as security for circulating notes issued under the provisions of the sixth paragraph of section 18 of the Federal Reserve Act, as amended by sec tion 401 of t his Act, to t he same extent as notes, drafts, bills of exchange, or bankers' acceptances acquired under the provisions of the Federal Reserve Act . Du ring t he tim e tha t such bank or trust company is indebted in any way to a Federal Reserve bank it shall be required to comply in all respects to the provisions of the Federal R eserve Act ap plicable to me mber State banks and the regulations of the Federal Reserve Board issued thereunder : Provided, That in lieu of subscribing to stock in the Federal reserve bank it shall maintain the reserve balance required by section 19 of the Federal Reserve Act during the existence of such indebtedness . As used in this section and in section 304, the te r m ` State bank o r trust compa ny' shall inc lude a bank or trust company organized under the laws of any State, Territory, or possession of the United States, or the Canal Zone ." SEc. 2 . (a) Section 304 of such Act of March 9, 1933, is amended by adding after the first sentence thereof the following new sen- tences : "Nothing in this section shall be construed to authorize the Reconstruction Finance Corporation to subscribe for preferred stock in any State bank or trust company if under the laws of the State in which said State bank or trust company is located the holders of such preferred stock are not exempt from double liability . In any case in which under the laws of the State in which it is located a State bank or trust company is not permitted to issue preferred stock exempt from double liability, or if such laws permit such issue of preferred stock only by unanimous consent of stockholders, the Reconstruction Finance Corporation is authorized, for the purposes of this sectio n, to p urchas e the l egally issued capita l notes or de ben- tur es of such St ate bank or t rust company ." (b) The second sentence of said section 304 is amended to read as follows : " The Reconstruction Finance Corporation may, with the approval of the Secretary of the Treasury, and under such rules and regulations as he may prescribe, sell in the open market the whole or any part of the preferred stock, capital notes, or debentures of any na tional banki ng as sociat ion, S tate b ank o r trus t comp any acquired by the corporation pursuant to this section ." Such section 304 is further amended by adding at the end thereof the following new sentence : ( c) " As u sed in t his sect ion, the ter m `State bank or trust company' shall include other banking corpora- tions engaged in the business of industrial banking and under the supervision of State banking departments or of the Comptroller of the Currency ." App roved, March 24, 1 933 . Terms. Vol .47,p.86. Ante, p. 7 21 Provsos . Security . Approval of applica- tio ns by State . N otes to have cir- culating privilege . Vol . 38, p. 263. Ante, p.6. Applicability of Fed- eral Reserve Act, etc . Maintenance of req- uisite reserve in lieu of stock subscription . Vol .38,p.270 . A nte, p. 6. Rec onstruction Fi- nanee Cnrpnratinn May not hold pre- f erred sto ck un less ex- empt from double lia- bil ity . Ante, p. 6. Capital notes, etc ., in lieu of pre ferred stock . Sale of, permitted . Ante, p.6. "State bank or trust company" defined . Ante, p. 6.
