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FEDERAL RESERVE BOARD
X-3295
WASHINGTON
SUBJECT:
January 51 1922.
Building Operations of Federal Reserve Banks
Dear Sir:
On December 191 1921, an amendment was 'pronosed by Senator
Harris of Georgia to Senate Bill 2263, which by agreement will come to a
vote on the 17th instant, reading as follows: "The Federal Reserve Board
shall have no authority hereafter to enter into any contract or contracts
for the erection of any building of any kind or character~ or to authorize
the erection of any buildine,., without the consent of Congress having previously been given therefor in express terms".
The Federal Reserve Board has never assumed that it has authority:
to enter into any contract for the erection of any kind of building. The
directors of Federal Reserve Ban1m are .• however., em!'owered under tne provisions of Section 4 of the Federal .Reserve Act "to make contracts" and ''to
exercise**all powers specifically grarned by the provisions of this .Act and
such incidental powers as shall be necessary to carry on the business of
bankin6 within the limitations prescribed by this Act".
The Board has alvvays taken the view that the law autnorizes
directors of Federal he serve Ban:{s to provide their banks and branches with
such buildings and equipment as 1nay be necessarJ for the proper conduct of
their business. There is nothing in the Federal Reserve Act tnat requires
the specific approval of building contracts by the Federal Reserve Board,
but under its power of general supervis:i.on (paragraph j 1 Section ll) ".;he
Board has required all Federal Reserve Banks to submit for its consid~ration
all options for the purchase of real estate., all plans and specif1cations
for buildings and vaults and has advised the b~~ks that they should not
enter into any contracts involving investments of this kind until the Board
had had an opportunity to make any sug~;est:i.ons or offer any objections as
it might deem proper.
In some cases buildings of Federal Beserve Banks and brauch·es r1ave
been completed and in others contracts have been let which must necessc:.rily
be carried out. Although the amounts involved in the erection of Federal
Reserve Bank buildings represent investments of the banks 1 own funds ad.
not the expenditure of public moneys., the Board feels., nevertheless.~ tLat
no attempt should be made by any Federal heserve Bank to anticipate any
action by Congress which may tend to restrict or modity its present authority and you are requested to advise your directors at once that the Board
advises that no new contracts for the construction of a building be entered
into by them until there has been opportunity of ascertaining the disp osition of Congress toward the amendment above quoted.
Very truly yours,
(Signed) W. P. G. HARDING,
G o v e r n o r.
CHAIRMEN OF ALL F.R.BANKS
@FedFRASER