§ 355. — Purchase and sale of obligations of National, State, and municipal governments; open market operations; purchases and sales from or to United States; maximum aggregate amount of obligations acquired directly from or loaned directly to United States.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC355]
TITLE 12--BANKS AND BANKING
CHAPTER 3--FEDERAL RESERVE SYSTEM
SUBCHAPTER IX--POWERS AND DUTIES OF FEDERAL RESERVE BANKS
Sec. 355. Purchase and sale of obligations of National, State,
and municipal governments; open market operations; purchases and
sales from or to United States; maximum aggregate amount of
obligations acquired directly from or loaned directly to United
States
Every Federal Reserve bank shall have power:
(1) To buy and sell, at home or abroad, bonds and notes of the
United States, bonds issued under the provisions of subsection (c) of
section 1463 \1\ of this title and having maturities from date of
purchase of not exceeding six months, and bills, notes, revenue bonds,
and warrants with a maturity from date of purchase of not exceeding six
months, issued in anticipation of the collection of taxes or in
anticipation of the receipt of assured revenues by any State, county,
district, political subdivision, or municipality in the continental
United States, including irrigation, drainage and reclamation districts,
and obligations of, or fully guaranteed as to principal and interest by,
a foreign government or agency thereof, such purchases to be made in
accordance with rules and regulations prescribed by the Board of
Governors of the Federal Reserve System. Notwithstanding any other
provision of this chapter, any bonds, notes, or other obligations which
are direct obligations of the United States or which are fully
guaranteed by the United States as to principal and interest may be
bought and sold without regard to maturities but only in the open
market.
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\1\ See References in Text note below.
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(2) To buy and sell in the open market, under the direction and
regulations of the Federal Open Market Committee, any obligation which
is a direct obligation of, or fully guaranteed as to principal and
interest by, any agency of the United States.
(Dec. 23, 1913, ch. 6, Sec. 14(b), 38 Stat. 264; Jan. 31, 1934, ch. 7,
Sec. 16(b), 48 Stat. 348; Apr. 27, 1934, ch. 168, Sec. 7(b), 48 Stat.
646; Aug. 23, 1935, ch. 614, title II, Secs. 203(a), 206(a), 49 Stat.
704, 706; Mar. 27, 1942, ch. 199, title IV, Sec. 401, 56 Stat. 180; Apr.
28, 1947, ch. 44, 61 Stat. 56; June 30, 1950, ch. 425, 64 Stat. 307;
June 23, 1952, ch. 454, 66 Stat. 154; June 29, 1954, ch. 422, 68 Stat.
329; June 25, 1956, ch. 447, 70 Stat. 339; Pub. L. 85-476, June 30,
1958, 72 Stat. 261; Pub. L. 86-567, July 1, 1960, 74 Stat. 295; Pub. L.
87-353, Sec. 3(d), Oct. 4, 1961, 75 Stat. 773; Pub. L. 87-506, June 28,
1962, 76 Stat. 112; Pub. L. 88-344, June 30, 1964, 78 Stat. 235; Pub. L.
89-484, June 30, 1966, 80 Stat. 235; Pub. L. 89-597, Sec. 6, Sept. 21,
1966, 80 Stat. 825; Pub. L. 90-300, May 4, 1968, 82 Stat. 113; Pub. L.
91-360, July 31, 1970, 84 Stat. 668; Pub. L. 92-45, July 2, 1971, 85
Stat. 100; Pub. L. 93-93, Aug. 14, 1973, 87 Stat. 314; Pub. L. 93-495,
title I, Sec. 109, Oct. 28, 1974, 88 Stat. 1505; Pub. L. 94-125, Nov.
12, 1975, 89 Stat. 678; Pub. L. 95-22, title II, Sec. 201, Apr. 19,
1977, 91 Stat. 49; Pub. L. 95-128, title II, Sec. 209, Oct. 12, 1977, 91
Stat. 1131; Pub. L. 95-154, Nov. 7, 1977, 91 Stat. 1256; Pub. L. 95-534,
Oct. 27, 1978, 92 Stat. 2032; Pub. L. 96-18, Secs. 1, 3, June 8, 1979,
93 Stat. 35, 36; Pub. L. 96-221, title I, Sec. 105(b)(2), Mar. 31, 1980,
94 Stat. 140.)
References in Text
Section 1463 of this title, referred to in text, was repealed by
Pub. L. 89-554, Sec. 8(a), Sept. 6, 1966, 80 Stat. 648.
Codification
Section is comprised of subsec. (b) of section 14 of act Dec. 23,
1913. For classification to this title of remainder of section 14, see
Codification note set out under section 353 of this title.
Amendments
1980--Par. (1). Pub. L. 96-221 inserted provisions relating to
obligations of a foreign government or agency thereof.
1979--Par. (1). Pub. L. 96-18, Sec. 1(a), struck out proviso under
which Federal Reserve banks had been allowed, until May 1, 1979, to buy
and sell either in the open market or directly from or to the United
States bonds, notes, or other obligations which were direct obligations
of the United States or which were fully guaranteed by the United States
and, after Apr. 30, 1979, had allowed such obligations to be purchased
but only in the open market.
Pub. L. 96-18, Sec. 3(b), inserted provision that notwithstanding
any other provision of this chapter, any bonds, notes, or other
obligations which are direct obligations of the United States or which
are fully guaranteed by the United States as to principal and interest
may be bought and sold without regard to maturities but only in the open
market.
Par. (2). Pub. L. 96-18, Secs. 1(b), 3(a), temporarily substituted
``the United States or any agency of the United States, and to lend,
under the direction and regulations of the Federal Open Market
Committee, any such obligation to the Secretary of the Treasury'' for
``any agency of the United States''. See Effective and Termination Dates
of 1979 Amendment note set out below.
Pars. (3), (4). Pub. L. 96-18, Secs. 1(c), 3(a), temporarily added
pars. (3) and (4). See Effective and Termination Dates of 1979 Amendment
note set out below.
1978--Par. (1). Pub. L. 95-534 substituted ``May 1, 1979'' for ``May
1, 1978'' and ``April 30, 1979'' for ``April 30, 1978''.
1977--Par. (1). Pub. L. 95-154 substituted ``May 1, 1978'' for
``October 1, 1977'' and ``April 30, 1978'' for ``September 30, 1977''.
Pub. L. 95-128 substituted ``October 1, 1977'' for ``November 1,
1978'' and ``September 30, 1977'' for ``October 31, 1978''.
Pub. L. 95-22 substituted ``November 1, 1978'' for ``November 1,
1976'' and ``October 31, 1978'' for ``October 31, 1976''.
1975--Par. (1). Pub. L. 94-125 substituted ``November 1, 1976'' for
``November 1, 1975'' and ``October 31, 1976'' for ``October 31, 1975''.
1974--Par. (1). Pub. L. 93-495 substituted ``November 1, 1975 for
``November 1, 1973'' and ``October 31, 1975'' for ``October 31, 1973''.
1973--Par. (1). Pub. L. 93-93 substituted ``November 1, 1973'' for
``July 1, 1973'' and ``October 31, 1973'' for ``June 30, 1973''.
1971--Par. (1). Pub. L. 92-45 substituted ``July 1, 1973'' for
``July 1, 1971'' and ``June 30, 1973'' for ``June 30, 1971''.
1970--Par. (1). Pub. L. 91-360 substituted ``July 1, 1971'' for
``July 1, 1970'' and ``June 30, 1971'' for ``June 30, 1970''.
1968--Par. (1). Pub. L. 90-300 substituted ``July 1, 1970'' for
``July 1, 1968'' and ``June 30, 1970'' for ``June 30, 1968''.
1966--Pub. L. 89-597 designated existing provisions as par. (1) and
added par. (2).
Pub. L. 89-484 substituted ``July 1, 1968'' for ``July 1, 1966'' and
``June 30, 1968'' for ``June 30, 1966''.
1964--Pub. L. 88-344 substituted ``July 1, 1966'' for ``July 1,
1964'', and ``June 30, 1966'' for ``June 30, 1964''.
1962--Pub. L. 87-506 substituted ``July 1, 1964'' for ``July 1,
1962'' and ``June 30, 1964'' for ``June 30, 1962.''
1961--Pub. L. 87-353 struck out provision authorizing every Federal
reserve bank to buy and sell, at home or abroad, bonds of the Federal
Farm Mortgage Corporation having maturities from date of purchase of not
exceeding six months.
1960--Pub. L. 86-567 substituted ``July 1, 1962'' for ``July 1,
1960'' and ``June 30, 1962'' for ``June 30, 1960''.
1958--Pub. L. 85-476 substituted ``July 1, 1960'' for ``July 1,
1958'' and ``June 30, 1960'' for ``June 30, 1958''.
1956--Act June 25, 1956, substituted ``July 1, 1958'' for ``July 1,
1956'' and ``June 30, 1958'' for ``June 30, 1958''.
1954--Act June 29, 1954, substituted ``July 1, 1956'' for ``July 1,
1954'' and ``June 30, 1956'' for ``June 30, 1954''.
1952--Act June 23, 1952, substituted ``July 1, 1954'' for ``July 1,
1952'' and ``June 30, 1954'' for ``June 30, 1952''.
1950--Act June 30, 1950, substituted ``July 1, 1952'' for ``July 1,
1950'' and ``June 30, 1952'' for ``June 30, 1950''.
1947--Act Apr. 28, 1947, substituted proviso which allows the
Federal Reserve banks to buy and sell either in the open market or
directly from or to the United States any bonds, notes, or other
obligations which are direct obligations of the United States or are
fully guaranteed by the United States but limits the aggregate amount to
be held at any one time to $5,000,000,000, and after June 30, 1950
allows such obligation to be purchased, but only in the open market for
former proviso.
1942--Act Mar. 27, 1942, amended proviso generally.
1935--Act Aug. 23, 1935, Sec. 206(a), inserted proviso.
1934--Act Apr. 27, 1934, authorized purchase and sale of bonds
issued under subsec. (c) of [former] section 1463 of this title.
Act Jan. 31, 1934, authorized purchase and sale of bonds of Federal
Farm Mortgage Corporation.
Change of Name
Section 203(a) of act Aug. 23, 1935, changed name of Federal Reserve
Board to Board of Governors of the Federal Reserve System.
Effective Date and Applicability of 1980 Amendment
Amendment by Pub. L. 96-221 effective on first day of sixth month
which begins after Mar. 31, 1980, see section 108 of Pub. L. 96-221, set
out as an Effective Date of 1980 Amendment note under section 248 of
this title.
Section 105(b)(2) of Pub. L. 96-221 provided that the amendment by
that section is applicable as this section is in effect on first day of
sixth month which begins after March 31, 1980, and as it will be in
effect on June 1, 1981.
Effective and Termination Dates of 1979 Amendment
Section 3(a) of Pub. L. 96-18 provided that: ``Except for the
amendments made by subsection (a) of the first section of this Act
[amending par. (1) of this section], and except for the amendment made
by subsection (b) of this section [amending par. (1) of this section
effective upon the expiration of the two-year period beginning on June
8, 1979], the amendments made by this Act [enacting section 359a of this
title and pars. (3) and (4) of this section and amending par. (2) of
this section] shall be effective only during the two-year period which
begins on the date of enactment of this Act [June 8, 1979]. Upon the
expiration of such period, each provision of law amended by this Act
[enacting section 359a of this title and amending this section], except
section 14(b)(1) of the Federal Reserve Act [par. (1) of this section],
is amended to read as it did immediately prior to the enactment of this
Act.''
Section 3(b) of Pub. L. 96-18 provided that the amendment made by
that section is effective ``Upon the expiration of the 2-year period
which begins on the date of enactment of this Act [June 8, 1979]''.
Expiration of 1942 Amendment
Amendment of the proviso of this section by act Mar. 27, 1942,
remained in force only until the date fixed by section 645 of Appendix
to Title 50, War and National Defense, after which provisions in force
before the amendment again became effective. Before the 1942 amendment,
the proviso of this section read: ``Provided, That any bonds, notes, or
other obligations which are direct obligations of the United States or
which are fully guaranteed by the United States as to principal and
interest may be bought and sold without regard to maturities but only in
the open market.''
Section Referred to in Other Sections
This section is referred to in sections 263, 347, 412, 2158 of this
title; title 20 section 1087-2.
