§ 414. — Authority of Board of Governors respecting issuance of notes; interest; lien.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC414]
TITLE 12--BANKS AND BANKING
CHAPTER 3--FEDERAL RESERVE SYSTEM
SUBCHAPTER XII--FEDERAL RESERVE NOTES
Sec. 414. Authority of Board of Governors respecting issuance of
notes; interest; lien
The Board of Governors of the Federal Reserve System shall have the
right, acting through the 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 Board of Governors of the Federal Reserve System shall,
through its local Federal Reserve agent, supply Federal Reserve notes to
the banks so applying, and such bank shall be charged with the amount of
the notes issued to it and shall pay such rate of interest as may be
established by the Board of Governors of the Federal Reserve system on
only that amount of such notes which equals the total amount of its
outstanding Federal Reserve notes less the amount of gold certificates
held by the Federal Reserve agent as collateral security. Federal
Reserve notes issued to any such bank shall, upon delivery, together
with such notes of such Federal Reserve bank as may be issued under
subchapter XIII \1\ of this chapter upon security of United States 2 per
centum Government bonds, become a first and paramount lien on all the
assets of such bank.
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\1\ See References in Text note below.
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(Dec. 23, 1913, ch. 6, Sec. 16 (par.), 38 Stat. 266; June 21, 1917, ch.
32, Sec. 7, 40 Stat. 237; Jan. 30, 1934, ch. 6, Sec. 2(b)(5), 48 Stat.
338; Aug. 23, 1935, ch. 614, title II, Sec. 203(a), 49 Stat. 704; June
12, 1945, ch. 186, Sec. 1(b), 59 Stat. 237; Pub. L. 90-269, Sec. 4, Mar.
18, 1968, 82 Stat. 50.)
References in Text
Subchapter XIII of this chapter, referred to in text, was in the
original ``section 18 of this Act'', meaning section 18 of act Dec. 23,
1913, ch. 6, 38 Stat. 251, as amended, known as the Federal Reserve Act.
Section 18 of the act was classified generally to subchapter XIII
(Sec. 441 et seq.) of this chapter.
Codification
Section is comprised of fourth par. of section 16 of act Dec. 23,
1913. For classification to this title of other pars. of section 16, see
Codification note set out under section 411 of this title.
Amendments
1968--Pub. L. 90-269 repealed first sentence provisions that Board
of Governors require each Federal Reserve bank to maintain on deposit in
the Treasury a sum in gold certificates sufficient, in the judgment of
the Secretary of the Treasury, for redemption of Federal Reserve notes
issued to such bank, but not less than 5 percent of total amount of
notes issued less amount of gold certificates held by the Federal
Reserve agent as collateral security, and counting and including such
deposit of gold certificates as part of the 25 percent reserve formerly
required by section 413 of this title to be maintained against Federal
Reserve notes in actual circulation and substituted in the first,
formerly second sentence, ``Board of Governors of the Federal Reserve
System'' for ``Board''.
1945--Act June 12, 1945, substituted in first sentence ``25 per
centum reserve required by section 413 of this title to be maintained
against Federal Reserve notes in actual circulation'' for ``40 per
centum reserve required by section 413 of this title''.
1934--Act Jan. 30, 1934, amended first sentence.
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.
Section Referred to in Other Sections
This section is referred to in sections 348, 420, 421, 467 of this
title.
