The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
W, P. 8. HARDING, li<>YI.....
PAUL II, WARBURGI, Y..l . .Y...... R
FREDERIC A. DELANO
ADOLPH C. MILLER
CHARLES S. HAMLIN
EX•OFFICIO MBMBKRS
WILLIAM G. McADOO
SECRETARY OF THE TREASURY
CHAIRMAN
JOHN SKELTON WILLIAMS
COMPTROLLIII OF THE CURRENCY
II. PARKER WILLIS. SECRITART
FEDERAL RESERVE BOARD
IHIRMAN P. ALLEN, AIIT,IICRETARY
AND fiSCAL AGJ:NT
WASHINGTON
ADDilKSS RIEPL.Y TO
FEDERAL RESERVE IIOARD
X-840
March 25, l918
Dear Sir:.
On
beh~lf
herewith outline of
of the Federal Reserve Board, I trunsmit
org~nization
together with typicQl chart.
of
Feder~l
Reserve bQnks,
The Bodrd requests that you
bring this to the dttention of your bodrd of directors with
the request
th~t
it consider
~king ~ny ch~nges
in by-laws
which may be necessary to curry into effect the plan of organization proposed •.
Very truly yours•
Governor ..
....
X-840
OUTLINE OF ORGANIZA'B.ION OF FEDERAL RESERVE
IAHJ!L.
While ihe o!fico o! Chairr:..an of tha ·BoC:.I.rd. of Dir0ctors and that of
the Federal Reserve Agent are by statute required to be held by one and
the same person, the duties
separate and distinct.
and~responsibilities
of the two officee
are
The holder of these offices occupies therefore,
a dual capacity in relation to the Federal Reserve bank.
CHAIRMAN OF THE BOARD.
Unuer the terms of the Act the Chairman of the Boara
~ust
be a
person of "tested banking experience" and it is. evic.ently conten;plated
that he should be qualified to j uage intelligently as. t c the efficiency
and ctderly cono.uct
ot
'
the r.•abagellient of the barlk•
±n so far as his
'
duties as Chairr:nan of the Boo.ra are speoifi6al1:'{ clefi.:hed; they are
{a)
To preside at weetings of the Beard of Directors;
(b)
To con;.uct elections of directo.rs, and
(c)
To transfer "public stock" i.e., stock held by subscribers
other than ::.an:.ber banks.
These apf'ear to be the only specif.ic a.ut ies anu powers vested by the Act
in any officer connected with the bank.
by the
All other powers are conferred
·• Board of Directors which is expressly authorized to apt:,oint such
officers and eruployes as it O.eel:ls necessary and to define their duties.
FEDERAa RESERVE AGENT.
The o.uties of the Federal Reserve ag,ent are defined in detail by the
statute •
Unc.er the ter<Us of the Act he is the official representative of
the Federal Reserve Boaro. in the exercise cf its supervisory powe·rs over
.
,..
1·840.
the bank, and all of his duties are performed in the capacity of a re17 ...
resentative of the United States .rather than in the capacity of an officer
of the bank.
It will be observed that the stat1,1te proviaes that the
duties of the Federal Reserve Agent shall be in adaition to his duties as
Chairrr,an of the Board of Directors of the Federal. Reserve Bank.
The Chairillan of the Boarci ana. Federal Reserve Agent is appointed by
the Federal Reserve Boaru, ana the chief executive officer or oanager of
the bank, who has been st'yled ''Governo·r" • is elected by the directors of.
the bank, two thirde of whom are chosen by the member banks, and he de40
rives his authority from the Board of Directors.
In accordance with the evident intent of the Aet, the following
division of functions in the organization and administration of Federal
~eserve banks is suggested:
(l)
Administrative, supervisory, and advisory;
{2)
Managerial and executive.
The first of these functions is governmental in character and is
perfon1ed by the Chairman of the B-oard and the Federal Reserve Agent, who
acts as the official representat:j.ve of the Federal Reserve Board and who is
required by law"t o maintain
pre~ises
o~
*
** *
a local office of said board on the
the Federal Reserve bank".
The second grol.1p of functions belongs to the Governor of the bank,
subject to sl.1ch liwitations as way be
Fro~
pr~scribed
by the Board of Directors.
the fore6oing a chart of organization has been developed, which
is submitted herewith and which may be
e~plained
as follows:
X-840
••
-3EXPLJU\fATIOlif OF ORGANIZATIOl'T CHART"
1.·
n~e Chairman znd Federal Reserve Agent, in his dual oapacity, as
Chc;,irm:::>n of tl~e Boarc of Directors of his banl: an:-' re:Jresentative· of the
Federal Reserve Board, must have active supervision of the ban: throus;h
the AucU tor 7 who Hill be elected by the Board of Directo:;.~s of the Banl{
anc'.. wi 11 re:__)ort to the Board. throu'~h him.
It 'llill )robably be found oQfiVenient for tl1e Auditor to make his
re:;.Jorts in du)licate or tri:olicate, so that at lec..st one COlJY ::1ay be
given to the Chairman of the Board and one CO:GJY to the. Governor of the
Barr:.
The Chairma~ .::..nd. Federal Reserve Agent ·will >.ve on his stc..ff one or
more i..ssistant Fede1·a1 Reserve Agents? to aid. l1i:1 in his no;::"J: c.s custodian
of the notes of tbe ~)2J.1k, anc'.. of the collateral for Yrhicll he is responsible.
He will also have on his staff such examiner or examiners as rr.ay be
required. for the examination of member banks or of state banlcs desiring
admission to the system; operating in this respect under cUrection of the
Federal Reserve Board at .Jashington.
n1e credit files of the banl:: sb,ould be in ~'1e joint custod.y of the
Government's representative and the chief executive officer of the bank.
ll·
The Governor, as the chief executive or managerial ofiicer of the bank,
will have direct charge of the various activities of the barut. There will
be one or more "I:eputy Governors, 11 a" Cashier, '1 and one or nlore "Assistant
Cashiers;r who, under eli recti on of the Governor, \Vill have charge of the
various operating departments of the banlc.
The Auditor of the Bank may be styled, 11 General Auditor, 1' or in the
case of the larger banlcs, ;'Comptroller. 11
'.lhile this independent officer relJOrts directly to the Board of Directors~ by which he is elected., and. is not on the staff of the Chairi"Han and
Federal Reserve Agent 9 he should transmit his reports through the Chairman
as the representative of the Board of Directorse
No cl~o.nges in the personnel or salaries of the Aucli ting De::x>.rtment
should be maC:.e until submitted. for approval through the Chainnan to the
Board of Directors.
It is assu.mee., though it is not mandator~)- uno.er the law, thc::.t the counsel of the banl-c should. be elected by the board of C'.irectors reporting directly to
X-840
-4-
it qs the legal advisor of the Board, and that he be consulted as occasion requires,
by the Ch~irman ae well es by the executive officers of the bank. Inasmuch as the
Federal Reserve Board, from time to· time, makes rulings on questions of law, or
gives its interpretation of the law, it is obvious that the counsel of each Federal
Reserve bank should~ work in absolute harmony with the Counsel of the Federal Reserve
Board.
v.
The Board of Directors of the Federal Reserve Bank will require a Secretary,
to have chqrge of·all its official minutes and records., The position may be elective by the Board, its incumbent reporting directly to the Board of Directors, or
it may very proper:J,y be merk.ed with "thjit of Counsel or with that of some member
of the Chairman's staff.
The latter method 1 on the whole, is to be preferred.
@FedFRASER