Word: rediscounted
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Dates: during 1930-1939
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...last week made the Glass-Steagall bill law. Its enactment sent a strong new quiver of hope and confidence through the nation's banking nerves. Now the Federal Reserve System could lend money to its members (in groups of five) on assets which before were ineligible for rediscount. Now it could substitute U. S. securities for gold and commercial paper as coverage for its currency. With the gold thus released, it could withstand foreign raids on the dollar or print more paper money...
Passed without roll call the Glass-Steagall bill to broaden the Federal Reserve's rediscount base, free gold and increase currency; returned it to a conference with the House to adjust two Senate amendments: 1) an effective time limit of two years instead of one; 2) a limit of $2,000,000 capital for individual borrowing banks instead of $500,000. ¶ Defeated (48-to-35) the Costigan-La Follette $355,000,000 direct unemployment relief bill...
...must hold in actual gold or gold certificates at least 40% of the amount of its outstanding currency. Likewise behind each dollar of Reserve currency must be 100¢ of commercial paper or of gold or of gold certificates. U. S. Government bonds and other Treasury obligations (although eligible for rediscount at Federal Reserve banks) cannot be used to cover the Reserve's paper money...
...Senate bill carried, however, two amendments which threatened dispute. One was that groups of five or more banks could not apply for new Reserve loans until they had used up all their commercial paper now eligible for rediscount. Senator Glass put in that provision because he claimed large banks were now hoarding $8,500,000,000 in such assets, which should be rediscounted before other securities were offered as collateral. The other amendment provided that only single banks with capital of $500,000 or less could apply for special loans under the "exceptional and exigent" clause of the bill. Senator...
...Rediscount: the process whereby a bank re-borrows from its Federal Reserve bank on U. S. securities or short-term commercial notes to reimburse itself for loans it has already made...