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MAP OF THE
FEDERAL
RESERVE
DISTRICTS
I
i
A
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KOT
S. D
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B
R A
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ei)fHVe!I
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1i0
FEDERAL R£SERVE IIOARD CITY
AUG RfSEIIVE CITY
FEDfllAL RESERVE CITIES
.I
u.!.:,_!_._ _•.Lt'~=...:x:..-_1_c_o
0
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.
, .,.
FEDERAL IIESERVE CITIES AL,,o
CEN'TRAL RESERVE CITIES.
FEDERAL llfSERVE CITIES,
AL,,o RESEIIVf CITIES
RESf/!Vf CITIES
FEDERAL RESERVE BANK SYSTEM.
Location and Capitalization.
The capitalization, location and territory of the twelve Federal Reserve Banks is as follows:
Distrit:t
*Capital
Stock
Seat
Area
Sq. Mi.
Population
Member
Banks
Territory Covered :
1
Boston . . . . . . .
9,711,900
66,465
6,557,841
441 11e.; N. H.; Vt.; Mass.; R. I.; and Conn.
2
New York.....
19,931,700
49,170
9,113,279
480
N. Y. State.
3
Philadelphia
12,501,500
39,865
8,110,217
758 l'-. J.; Dela.; and eastern Pa.
4
Cleveland
12,101,700
183,995
7,961,022
764 Ohio; western Pa.; northwest W. Va.; eastern Ky.
5
Richmond
6,387,400
173,818
8,519,313
496 D. C. ; Md. ; Va.; N. C. ; S. C.; remainder W. Va.
••
6
Atlanta
4,670,600
233,&60
6,695,341
381 Al_a. ; Ga. ; Fla. ; eastE:,rll Tenn. ; southe:n Miss. ; southeast La.
7
Chicago
12,687,700
176,940
12,630,383
971 Ia. ; southern Wis. ; peninsula Mich.; north. Ill. ; north. Ind.
s
St. Louis ....•.
4,987,500
H6,474
6,726,611
9
Minneapolis .. .
4,811,000
437,930
5,724,895
10
Kansas City .. .
5,530,300
509,649
6,306,850
11
Dallas
5,698,900
404,826
5,310,561
12
San Francisco.
7,775,400
693,658
5,389,303
459 Ark. ; all Mo. except extreme west ; south. Ill. ; south. Ind. ;
west. Ky.; west. Tenn.; north. Miss.
709 Mont. ; No. Dak. ; So. Dak. ; Minn. ; northern Wis. ; remaind~r Mich .
837 Kan. ; Neb.; Co o. ; Wyo.; extreme West Mo.; northern
Okla.; extreme north. N. Mex.
754 Tex.; remainder N. Mex.; south. Okla.; remainder La.;
southeast Ariz.
521 Cal.; Wash.; Ore.; Idaho; Nev.; Utah; remainder Ariz.
Total. ....... $106,795,600
3,016,650
89,045,616
7,571
System commenced operations (Nov. 16,
Capitalization.
Participating Banking Institutions.
•attonal Banks can subscribe !or the
capital stock of the Federal Reserve
Banks (see paragraph Capitallzation)
and thus become member banks; those
falling to do so shall cease to act as
reserve agents, and a!ter December
23rd. 1914, shall forfeit their charters
State
under the National Bank Act.
Companies-by
Trust
and
Banks
a vote of their stockholders owning a
majority of the stock-can take out a
national bank charter, with the approval
of the Comptroller of the Currency, and
also become member banks by subscribing to the capital stock of the Federal
Reserve Banks (with the approval of the
Federal Reserve Board) provided they
comply with the prescribed reserve and
capital requirements, with the regulations and restrictions imposed on the
national bank8 respecting the limitation
of liability, which may be incurred by
any person. firm or corporation to such
banks. the prohibition against buying
of or loaning on their stock, the withdrawal or impairment of capital, or the
p&.yment of unearned dividends and also
provided that their paid-up unimpaired
capital stock is sufficient to entitle them
to become a national banking association
under the provisions of the National
Bank Act. They will be required to
make periodical reports concerning their
condition like the National Banks and
wlll be subject to the same periodical
examinations. National Banks located
in Alai-ka or outside the Continental
United States, are not required to become
member banks, and In that event maintain their reRerves and operations in
arcordance with all present requirementi-. but they may become member
hanks (with the exception of the national
banki- in the Philippine Islands) with
the consent of the Federal Reserve
Boa rel.
1
The national banks and other institutions participating in the Federal
Reserve System must subscribe to ·the
capital stock of the Federal Reserve
Bank in their district up to 6% o! the
amount of their own paid-up capital
and surplus. Of this subscription 50%
( in 3 installments of 16 2/3 % ) must
be paid within 6 months after the
first payment, which was made on
Nov. 2, 1914. The remainder is subject to call at the discretion of the
F'ederal Reserve Board. Payments are
to be made in gold or gold certificates.
There is a double liability for stockholders of the Federal Reserve Banks.
Par value of shares is $100 each. The
stock participations of member banks
must always be equal to 6% of their
own capital stock and surplus. Shares
of l"ederal Reserve Banks are not transferable nor may they be hypothecated.
Additional shares are purchasable at
par plu s 1/:.i of 1% a montll from
the period of the last dividend. Stock
c:an be surrendered at the same orices.
Division of Earnings.
After deduction of all necessary expenses, there will be paid from the net
profits of the Federal Reserve Banks,
a cumulative dividend of 6% per annum
on the amount ot capital stock paid
in. Of the remaining surplus earnings,
50% goes to the United States Government as a franchise tax and the remaining 50% will be paid into a surplus
fund. As soon as this surplus equals
40% of the paid-in capital stock of the
Federal Reserve Bank, the entire surplus earnings go to the United States
The Secretary of the
Government.
Treasury may use these surplus earnings to add to the gold reserve held
against United States notes or shall
apply them to the reduction of tbe outstanding bonded debt of the United
In case of liquidation of a
States .
Federal Reserve Bank, all proceeds
ovel' and above the par amounts of
c·apita I s tock and accumulated dividrnds , accrue to the United States
Federal Reserve Banks
Government.
(including their capital stock and surplus and the income derived therefrom)
are free from taxation, except taxes
upon real e tate.
1914).
Working Capital of the Federal
Reserve Banks.
Working capital of the Federal Re·erve Banks will be provided through
the capital subscriptions and deposits
of the member banks, the issuance of
Federal Reserve notes to the Federal
Reserve Banks, the carrying of reserves
of member banks with the Federal
Reserve Banks and through other operations to which the Federal Reserve
Danks are authorized, while the general fund of the Treasury (except the
redemption funds for National Bank and
and also
notes)
Federal Reserve
the Government revenues, may be deposited in the Federal Reserve Banks;
Government disbursements to be made
by checks drawn against these deposits.
The Secretary of the Treasury can continue to use member banks as depositories.
Branch Offices.
1
Earh Federal Reserve Bank s hall
establish branch banks within the Federal Reserve District in which it is
located, or in the district of any Federal Reserve Bank which may have been
suspended. These branch offices will be
operated by seven directors (four to be
selected by the Federal Reserve Bank,
one of whom will be designated as manager, and three by the Federal Reserve
Board) under rules and regulations of
the Federal Reserve Board.
Copyright 1914 by A. B. LEACH & Co.
3.
Opr,rat · ons of the Federal Reserve
Banks.
The Feder a I Reserve Danks may reRestrictions to the Operations of
ceive deposits from member banks,
the Federal Reserve Banks.
from the United States, and solely for
Aside from certain limitations stated
ex •hauge purposes from other Reserve
in the foregoing paragraph, the folBanks; they will discount notes, drafts
lowing restrictions may still be given.
and bill:; of exchange not having more
The amount of agricultural and livethan 90 days to run, endorsed by memstock bills rediscounted, shall be limber banks, such bills growing out of
ited to a percentage of the paid-in capicommercial transactions and not protal of each Reserve Bank to be ascerhi biting notes, drafts and bills of extained and fixed by the Federal Reserve
change secured by staple agricultural
Board (the Board has fixed this
products, or other goods, wares, or
percentage, until i'.urther notice, and
merchandise but not including those
subject to modification in all cases
covering merely investments or issued
where deemed de::;irable, at 25%) ;
or drawn for the purpose of carrythe amount of acreptances discounted
ing or trading 10 securities, except
by each Federal Reserve Bank shall
those of the U. S. Government. Notes,
not exceed 50%
f the capital stock
drafts aml bills issued or drawn for
and surplus of the bank for which the
agricultural purposes or based on liverediscounts are made; bills and notes
stock, may have a maturity of not exof any one person, company, firm or
ceeding 6 months. (The member banks
corporation rediscounted for a memmay accept drafts or bills of exchange
be r bank may not exceed 10% of the
ba,;ed upon the importation and excapital and surplus of the bank, but
this does not apply to the discount of
portation of goods, not running more
bills of exchange drawn in good faith
than 6 months and not exceeding 50%
against actually existing values. Ceror their capital stock and surplus.)
tain open market dealings and transactions abroad of the Federal Reserve
The Federal Resef\'e Banks will discount
Banks as well as the rediscount busiacceptances endorsed
by
at least
nl:'ss of the Federal Reserve Banks are
one member bank based upon the
subject to rules and regulations to be
prescribed by the Federal Reserve
lmportation and exportation of goods
Board while all tran sactions of the
aud not having more than three
Banks' are under tbe s upervi : ion and
wonths
to
run.
They will
purcontrol of this Board.
chase and sell in the open market
at home or abroad, cable transfers,
Check Clearance System.
b&nke1•s' acceptances and bills of exchange with or without endorsement
Evr,ry Federal Reserv e 0 • ok -;ha ·1 reof the member banks ; they will
ceive on deposit at pa• ,.-om IIHtVber
deal in and make loans on gold
banks or
Federal Rese rve
Bank~
coin
and
bullion
at
home
and
abroad, exchange Federal Reserve notes
checks and drafts dra n on any of its
for gold or gold certificates, contract
depositors and, when remitted by a
for loans or gold, buy and sell at home
Federal Reserve Ban.c, checks and
and abroad Government securities and
drafts drawn by any dP,positor in any
bills, notes, etc., not running more than
other Federal Reserve Bank or member
ti months, issued ( in anticipation of the
bank upon funds to th€. credit of this
receipt of assured revenue) by states,
depositor in the Reserve Bank or the
counties and municipalities in the conmember bank.
The Fe<leral Reserve
tinental United States, including irrigaBoard will fix the charges to be collected
tion and drainage districts. They will , by the member bank!' from their patrnns
furthermore buy from member banks, ' whose checks are so clf'ared, and the
and l'ell with or ithout their own encharge which· may be made for cleardorsement, bills of exchange as before
ings and collections by the Federal
defined, and establ sh from time to time,
ReserYe Banks. The Fecleral Reserve
rates of discount Rubject to review and
Uoard, may at its discr_t:tion, exercise
d termination by the Federal Reserve ' the function of a Clearing House for
Board, which latt"r can permit or rethe Federal Reserve Is nks in the transquire (by an affirmative vote of at
fer of funds, chargt ,, etc., or may
lea. t 5 or its 10embers) one Reserve
designate for this rune, ion a Federal
Bank to rediscount for another ReRel'erve Bank, wiu
tl1e Ferleral Reserve Bank. The Federal Reserve Banks
bel' , e Banks m2v ~
be re ·.tired to
will also establish accounts with other
act as a Clearing
e for t11, ir memFederal Rel'erve Banks for exchange
h• r banks. Memc1u, ~anhs are not propurpn!<es (see also Check Clearance
hibited from chargmg their actual exSy!:tem J and open and maintain bank- 1 penses for collec~ng and remitting
Ing accounts, appoint correspondents and
funds or for excuange sold to their
e. tablisb agencies abroad for the purpatrons.
('ba~<-'. :-ale and collection of bill'- of
x,·hange. and to buy and sell, with or
without their endorsement, bills of exchange with two or more names arising out of commercial transactions and
not having more than 90 days to run.
The Federal Re!-erve Banks, when requlr~d by the Sec·retary of the Treasm·y, . ha 11 a<"t a s Fiscal Agents of the
11lted ~tates.
1
Federal Reserve Notes.
Federal Reserve notes to be issued at
the discretion of the Federal Reserve
Board, for the purpose of making advances to the Federal Reserve Banks,
are an obligation of the United States
and receivable for all taxes, customs
and other public dues ; they are
furthermore a first and paramount lien
on all the assets of the Federal Reserve Bank to which they are issued ;
they are redeemable in gold at the
Treasury in Washington or in gold or
lawful money at any Federal Reserve
Bank; they bear distinctive numbers of
the Federal Reserve Bank through which
they are issued ; they are secured by an
equal amount of commercial paper accepted for rediscount under the provisions of the law, the Federal Reserve
Board having the authority to ask for
additional collateral to protect the
notes, while the Federal Reserve Banks
have the right to make changes in the
collateral under regulations of the Federal Reserve Board. The notes are in
denominations of $5, $10, $20, $50 and
$100 each. The Federal Reserve Banks
shall pay upon the notes issued to them
a rate of interest to be established by
the Federal Reserve Board. Whenever
a Federal Reserve Bank receives notes
Issued by another, it shall promptly return these notes for credit or redemption to the Federal Reserve Bank
through which they were originally issued. No Federal Reserve Bank may
pay out the notes of another under a
penalty of 10%.
4.
The Federal Reserve Board, whose
Is In the Trea ury DepartWashiogton, D. C., will exercise general supervision over the
Federal Reserve Banks, define character
or bills eligible for discount and will
Jlt nnit, or, by an affirmative vote of at
least 5 members, require (at rates of inlt-rc;;t to be fixed by it) Federal Reserve
Banks to redi:::count the discounted paper
It
n( another Federal Reserve Bank.
will regulate and supervise the issue and
retirement of Federal Reserve Notes.
lt may add to and reclassify re erve
and eentral reserve cities (it is understood that In the future no cities with
le,;s than 100,000 inhabitants will be
approved as reserve cities) readjust
Federal Re~erve Districts, suspend or
1 emm·e officers or directors of Federal
H.e:--erve Banks, require the writing off
of doubtful and worthless assets, suspc-nd or take i,ossession, liquidate or
reorganize any Federal Reserve Bank
which violates the law, require bonds
of reserve agents, permit national banks
to act a,; trustee, executor, adminisll a tor or registrar of tocks and bonds
"hen not in contravention of State
or local laws. It will employ experts,
clerk:,, etc., without civil service requirements unless so ordered by the
Pre:,ident. It may suspend the reserve
requirements of the Federal Reserve
Banks (as shown in foregoing paragraph), and it will examine at its discretion the Federal Reserve Banks and
member banks and publish weekly a
statement for each Federal Reserve Bank
and a consolidated statement for the
entire system showing in detail assets
and liabilities and character of reserve
mouie:; and nature and maturity of
paper and other investment· held. It
,·an levy semi-annually upon the Federal Reserve Banks in proportion to
their eapital stock and surplus assessments tor defraying its expenses ( including those of printing, issuing, etc., of Federal Reserve Notes) for the succeeding
6 months including any deficit carried
forward. It will submit each year an
annual report to Congre s.
Reserve• and Redemption Funds
of Federal Reserve Banks.
Resen·es of not less than 35% shall
be held In gold or lawful money against
the deposits of the Federal Reserve
Banks and of not less than 40% in gold
against the Federal Reserve notes in circulation ; part of the latter (to an extent
as fixed by the Secretary of the Treasury but never less than 5%) shall be
kept with the Treasury as a redemption fund. The Federal Reserve Bank ·
. l all reimburse this tund for the Federal Re,;erve notes redeemed at the
11 a,,ury and returned to the Federal
Re erve Banks through which they were
originally i,;sued. If Federal Reserve
note. have been redeemed in gold or gold
certificates, the funds must be reimbur ·ed to an extent deemed necessary
by the Secretary of the Treasury in
gold or gold certificates. Federal Re.·en·e notes received by the Treasury
utb rwl!-e than for redemption may be
n turned lo the issuing Federal Reserve
Ur.uk for the credit of the United States
or may t,e exchanged for gold out of the
1 demvtlon fund and returned to such
The Federal Reserve Board may
.·u:-pencl !or not more than 30 days
and from time to time renew such sus1,~n ion, !or periods not exceeding 15
day·, any of the reserve requirements
or the act, provided it establishes a
graduated tax on the deficiencies. If
the gold reserve held against the Federal Reserve notes falls from 40% to
auy percentage above 32 ½ %, a tax of
nut more than 1 % upon such deficiency
shall be establi~hed ; under 32 ½%, the
tax rate increases by not less than 1 ½ %
upon each 2 ½ % or fraction o! the deThe Federal Reserve Bank
ficiency.
will have to add an amount equal to
the tax to the rates of interest and discount ftxed by the Federal Resen·e
Membershir of the Federal Reserve
Board.
'fhe Board consists of seven members,
viz : The Secretary of the Treasury,
Ex-Officio Member and Chairman; The
Comptroller of the Currency, Ex-Officio
Member ; and five members (not more
than one from any one Federal Reserve
District) appointed by the President, by
and with the consent and advice of the
Senate ( one of whom shall act as governor and another as vice-governor), in
due regard to a fair representation o!
the different commercial, industrial and
geographical divisions of the country,
two of whom to be experienced in banking or finance. After the first period
of incumbency, which ranges from two
to ten years, bas elapsed, all appointive
members shall serve for ten years, unless sooner removed for cause by the
President. No member of the Board
shall be a member of Congress nor an
officer or director of any bank, banking
institution, trust company or Federal
Reserve Bank, nor hold stock in any
bank. The members of the Board incl udin§. the ex-officio members and the
a sistant secretaries of the Treasury
are ineligible during the time they are
in office and for two years thereafter to
hold any office, position or employment
in any member bank. The governor of
the Board shall act as the active executive officer.
Management of Federal Reserve
Banks.
The management of each Federal Reserve Bank rests with a Board of Directors, each consisting of three classes ;
Class "A" being three members chosen
by and representative of the stockholding banks; Class "B", three members {also chosen by the stockholding
banks) who at the time of their election
are actively engaged in their district in
commerce, agriculture or some other industrial pursuit; Class "C", three members (residents of the district at least 2
years) to be designated by the Federal
Reserve Board, one of whom will act
as Chairman of the Federal Reserve
Bank, and another as Deputy Chairman. Both shall be persons of tested
The Chairman
banking experience.
shall act as "Federal Reserve· Agent"
and the Deputy Chairman, as "Deputy
Feneral Reserve Agent." The Chairman will act as the official representative of the Federal Reserve Board,
and the Deputy Chairman as such in
case of absence or disability of his
principal. Directors of class "B" may
not be an officer, director or employee,
and those of class "C" may not be an
officer, director, employee, or ·a stockholder, in any bank. Senators and
Representatives in Congress are not
eligible. After tbe first term of incumbency, which ranges from one to three
years, all directors shall serve three
years.
Federal Advisory Council.
Salaries and Compensation s.
The Federal Advisory Council will be
composed of as many members as there
are Federal Reserve Districts (at the
present time numbering twelv~) one
chosen annually by each Board of Directors of each Federal Reserve Bank.
The Federal Advisory Council will act
in an advisory capacity to the Federal
Reserve Board. lt will hold meetings
in Washington, D. C., at least four
times each year and oftener if called
by the Federal Reserve Board. It may
hold additional meetings in Washington,
D. C., and elsewhere, if considered necessary, and it may select its own officers.
A majority of its members will constitute a quorum. It will confer directly
with the Federal Reserve Board on general business conditions. It will make
oral or written representations concerning matters within the jurisdiction of the
Federal Reserve Board nd call for information and make recommendation s in
regard to discount rates, rediscount business, note issues, reserve conditions,
purchase and sale of gold or securities,
open market operations and the general
affairs of the system.
Appointive members of the Federal
Reserve Board shall receive an annual
salary of $12,000, plus necessary traveling expenses, and the Comptroller of
the Currency in addition to his salary
as such shall receive $7,000 for his
services as a member of the board.
Each Federal Reserve Bank shall fix
the compensation and allowances of
the members of the Federal Advisory
Council. Directors of Federal Reserve
Banks shall receive in addition to any
compensation otherwise provided, a reasonable allowance for necessary expenses in attending board meetings. All
of the above compensations as well as
the salaries, etc., of officers aucl employees of the Federal Reserve Banks
shall be subject to the approval of the
Federal Reserve Board.
Gold Standard.
Nothing in the Federal Reserve Act
shall be construed to repeal the parity
provisions contained in the act establishing the gold standard and the Secretary of the Treasury may, for the
purpose of maintaining the gold parity
and strengthening the gold reserve, borrow gold on the security of United
States bond~ or on one-year gold notes
or sell the same, i! necessary, to obtain
gold .
The Aldrich-Vreel and Act.
The Aldrich-Vreelan d Act has been
extended to June 30, 1915, and the tax
rate on emergency circulation has been
changed to 3% per annum for the first
three months upon the average amount
of emergency circulation outstanding
and ½ of 1 % per annum for each succeeding month until a tax of 6% per
annum is reached, which latter rate
will be in force thereafter. Emergency
circulation can be taken out up to 125%
of the capital stock and surplus of the
applying bank.
District No. 5-Federal Reserve Bank
of Richmond, Class A, Group 1 : Waldo
Newcomer, Baltimore; Group 2: John
F. Bruton, Wilson, N. C.; Group 3:
Edwin Mann, Bluefield, W. Va. Class
B: Group 1: George J. Seay, Richmond;
Group 2: D. R. Coker, Hartsville, S. C. ;
Group 3 : j. F. Oyster, Washington.
Class C: William Ingle, Baltimore,
Md., Chairman; James A. Moncure,
Richmond, Vice-Chairman; M. F. H.
Gouverneur, Wilmington, N. C. Gover11c;t·: Geo. J. Seay, Richmond.
Personnel of the Federal Reserve
Board.
William G. McAdoo, Ex-officio member and Chairman (Secretary o! the
Treasury, Builder o! the McAdoo Tubes
under the Hudson River, New York) ;
John Skelton Williams, Ex-officio member (Comptroller o! the Currency, Exmember of the banking firm John L.
Williams & Son, Richmond, Va. ; Expresident and organizer o! the Seaboard
Air Line Railway System) ; Charles
S. Hamlin, Governor (Ex-Asst. Secretary of the Treasury) ; Adolph Caspar
:O.Iiller (Ex-Asst. Secretary of the Interior, Economist, Ex-professor University of California, Author of publications on monetary matters) ; William
G. P. Harding (Ex-president of the
First National Bank o! Birmingham,
Ala.) ; Paul M. Warburg (Ex-member
of the banking firm Kuhn, Loeb & Company, New York City) ; and F. A.
Delano ( Ex-president of the Chicago,
Railway
& Louisville
Indianapolis
Company)_
Ramsey, Muskogee, Okla., Vice-Chairman; R. H, Malone, Denver, Colo. Governor: Charles M. Sawyer, Topeka Kan.
District No. 11-Federal Reserve
Bank of Dallas, Class A, Group 1 :
Oscar \Velis, Houston, Tex. ; Group 2 :
E. K. Smith, Shreveport, La.; Group 3:
B. A. McKinney, Durant, Okla. Class B,
Group 1: Marion Sanson, Fort Worth,
T ex. ; Group 2: Frank Kell, Wichita
Falls, Tex.; Group 3: J. J. Culbertson,
Class C: E . 0. Tenison,
Paris, Tex.
Dallas , 'I'ex., Chairman; W. F. McCaleb, San Antonio, Tex. , Vil''.l-Clhairman ; Felix Martinez, El Paso, Tex. ;
Governor: Oscar Wells, Houston, Tex.
District No. 6-Federal Reserve Bank
of Atlanta, Class A, Group 1: L. P.
Hlllyer, Macon, Ga. ; Group 2 : F. vV.
Foote, Hattiesburg, )1iss. ; Group 3 :
Class B:
W. H. · Toole, Winder, Ga.
Group 1: P. H. Saunders, New Orleans;
Group 2 : J. A. Mccrary, Decatur, Ga. ;
Group 3: W. H. Hartford, Nashville.
Class C: M. B. Wellborn, Anniston,
D i strict No. 12-Federal Reserve
Bank of San Francisco, Class A, Group
1 : C. K. McIntosh, San Francisco ;
Group 2: James K. Lynch, San Francisco ; Group 3 : Alden Anderson, Sacramento. Class B, Group 1: A. B. C.
Dohrman, San Francisco ; Group 2 :
J. A. McGregor, San Francisco; Group
3 : Elmer H. Cox, Madera, Cal. Class
C: John Perrin, Pasadena, Cal., Chairman ; Claude Gatch., San Francisco,
Peabody,
Chas. E.
Vice-Chairman;
Governor: Archibald
Seattle, Wash.
Ka in s, San Francisco.
rAla.,
1
Directors and Governors of the
Federal Reserve Banks.
Chairman; Edward T. Brown,
Atlanta, Ga., Vice-Chairman ; W. H.
Governor:
Kettig, Birmingham, Ala.
Joseph A. McCord, Atlanta.
t No . 7-Federal Reserve Bank
Di,stric_
District No. 1-Federal Reserve Bank
of Chicago, Class A, Group 1 : George
of Boston, Class A, Group 1 : Thomas
M. Reynolds, Chicago ; Group 2 : J. B.
P. Beal, Boston; Group 2: C. G. Sanl<'organ, Chicago ; Group 3 : E. L.
fcrd. Bridgeport, Conn.; Group 3:
Class B:
John son, Waterloo, Iowa.
Heard, Manchester, N. H.
M.
A.
Group 1 : Henry B. Joy, Detroit; Group
Class B, Group 1 : Charles A. Morse,
2 : M. B. Hutchison, Ottumwa, Iowa ;
Bei. ton ; Group 2 : E. A. Morse, Proctor,
Group 3: A. H. Vogel, Milwaukee.
Vt. ; Group 3 : Charles G. Washburn,
Class C: C. H. Bosworth, Chicago,
Worcester, Mass. Class C, Frederic
Chairman; W. L. McLallen, Columbia
H. Curtiss, Boston, Chairman ; Walter
City, Ind., Vice-Chairman; Edwin T.
S Hackney, Providence, Vice-Chair- '
Meredith, Des Moines, Ia. Govern.or:
man; Allen Hollis, Concord, N. H.
Governor: Alfred L. Aiken, Worcester,
.James B. McDougal, Chicago.
Mass.
8-Federal Reserve
No.
District
Bank of St. Louis, Class A, Group 1;
District No. 2-Federal Reserve Bank
Walker Hlll, St. Louis; Group 2: F. O.
of • ew York, Class A, Group 1 :
"\'i atts, St. Louis; Group 3 : Oscar FenWilliam Woodward, NE>w York; Group
ley , Louisville. Class B, Group 1:
2: R. H. Treman, Ithaca, N. Y.; Group
Murray Carleton, St. Louis; Group 2 :
3: Franklin D. Locke, Buffalo, N. Y.
W. B. Plunkett, Little Rock, Ark.;
Class B. Group 1: H. R. Towne, New
Group 3 : Le Roy Percy, Greenville,
York; Group 2: Wllliam B. Thompson,
Mbs. Class C, Wm. McC. Martin, St.
Yonkeri;, N. Y.; Group 3: Leslie R.
Louis , Chairman; Walter W. Smith,
Palmer, Croton-on-Hudson, N. Y. Class
John
Vice-Chairman;
Louis,
St.
C: Pierre Jay, New York, Chairman;
Ind. Governor:
Boehn e, Evansville,
Rolla Wells, St. Louis.
~
District No. 9-Federal Reserve Bank
Starek, New York, Vice-Chairof )!inneapo!is, Class A, Group 1 : E.
man ; George F. Peabody, Lake George,
W. Decker, Minneapolis; Group 2 : L. B.
N. Y. Governor: Benjamin Strong, Jr.,
Hanna, Fargo, N. D. ; Group 3: J. C .
. ·ew York.
Class B:
Bassett, Aberdeen, S. D.
Group 1 : F. R. Bigelow, St. Paul ;
District No. S-Federal Reserve Bank
Group 2 : F. P. Hixon, La Crosse, Wis.;
of Philadelphia, Class A, Group 1:
Group 3: Norman B. Holter, Helena,
Charles J. Rhoads, Philadelphia; Group
Class C: John F. Rich, Red
)Iont.
2 : W. H. Peck, Scranton ; Group 3 :
\Ying, l\'linn., Chairman ; P. M. Kerst,
.'.\I. J. Murphy, Scranton. Class B,
St. Paul, Vice-Chairman; John W.
Group 1: Alba B. Johnson, Philadelphia,
Mich. Governor:
Houghton,
Black,
Group 2 : Edwin S. Stuart, PhiladelTheodore Wold, Minneapolis.
phia; Group 3: George W. F. Gaunt,
Mullica Hill, N. J. Class C: Richard
District No. 10-Federal Reserve
L. Austin, Philadelphia, Chairman;
Bank of Kansas City, Class A, Group
M. LaMonte, Bound Brook,
1: Gordon Jones, Denver; Group 2:
Vice-Chairman ; George W.
W. J. Bailey, Atchison, Kan. ; Group
Philadelphia. Governor: Chas.
3: C. E. Burnham, Norfolk, Neb. Class
J. Rhoads, Philadelphia.
B, Group 1: M. L. McClure, Kansas
City, Mo.; Group 2: T. C. Byrne,
District No. 4-Federal Reserve Bank
Omaha ; Group 3 : L. A. Wilson,
or Cleveland, Class A, Group 1 : Robert
El Reno, Okla. Class C: J. Z. Miller,
Wardrop, Pittsburgh; Group 2: W. S.
Kansas City, Mo., Chairman; A. E.
Rowe, Cincinnati ; Group 3 : S. B.
Rankin, South Charleston, Ohio. Class
B: Group 1 : Thomas A. Combs, LexGroup 2: C. H. Bagley,
ington,
Corry, Penn. ; Group 3 : A. B. Patrick,
'alyersville, Ky. Cla.~s C: D. C. Wills,
Bellevue, Pa., Chairman ; Lyman H.
Treadway, CIElveland, Vice-ChJ.irman;
H. P. Wol!e, Columbus, O. Governor:
E. R. Fancher.
I
Secretaries of the Federal Reserve
Board.
!
Secretary : Dr. Henry Parker Willis,
mon etary expert to the House Committee on Banking and Currency, at the
time of the drafting of the Federal Reserve Act; Assistant Secretary: Sherman A' Jen, formerly Assistant Secretary of the Treasury.
Members Federal Advisory
Council.
DisNames
trict
1 Daniel G. Wing, Bo. ton.
2 J. P. Morgan, New York.
:3 Levi P. Rue, Philadelphia.
4 W. S. Rowe, Cleveland.
5 George J. Seay, Richmond .
6 Charles A. Lyerly, Atlanta.
7 J. B. Forgan, Chicago.
8
. . . . . . . . .. ....... . .. . ... ... . . .
9 C. T. Jaffray, :.\1inneapolis.
10 E. F . Swinney, Kansas City.
11 .J. Howard Ardrey, Dallas.
12 . . . . . . . . . . . . . . . . .............. .
RESERVE REQUIREMENTS OF MEMBER BANKS.
The reserve requirements of the member banks will be as follows :
Country
Banks
Res. City
Banks
Cent. Res.
City Bks.
18%
15%
12%
Demand Deposits (all deposits payable within 30 days)...... . . . . . . . . . . . . . . . . . . . .
5%
5%
5%
Time Deposits (all deposits, saving accounts, etc., payable after 30 days) . . . . . . . . . .
The above reserves will be held as follows from the time of the beginning of the system ( November 16th, 1914) :
From: Nov. 16, 1914 Nov. 16, 1915 May 16, 1916 Nov. 16, 1916 May 16, 1917 Nov. 16, 1917
(A-Country Banks)
and after
To: Nov. 15, 1915 May 15, 1916 Nov. 15, 1916 May 15, 1917 Nov. 15, 1917
(B-Res. City Bks.)
B
A
B
A
B
A
B
A
B
A
B
A
Compulsory :
5-15
4-12
6-15
5-12
5-12 6-15
5-12 6-15
5-12 6-15
In own Vaults ............. ·.... 5-12 6-15
6-15
5-12
6-15
5-12
5-12 6-15
4-12 5-15
3-12 4-15
In Fed. Res. Banks. . . . . . . . . . . . 2-12 3-15
!'-:ot Compulsory:
In own Vaults, Fed. Res. Banks, and
Res. City or Cent. Res. City
2-12 3-15
Banl{s . . . . . . . . . . . . . • . . • . . . 5-12 6-15
*3-12 *4-15
3-15
2-12
3-12 4-15
4-12 5-15
* To be held in own vaults, or in Federal Reserve Banks, or in both at the option of the member bank.
The reserves of the Central Reserve
City member banks shall be held as
follows : 6/18 in own vaults, 7 /18 in
Federal Reserve Banks and remainder
in own vaults or Federal Reserve
Oanks, at option.
Notc.-An amendment is pending allowing the member banks for the first
three years after the beginning of the
system, to carry in the Federal Reserve Banks any portion of their reserves required as above to be held iP
their own vaults . This amendment has
heen endor~,.,d by the Federal Reserve
Board ·•on the ground that it will
greatly facilitate and amplify the relief which the Federal Reserve System
is expected to afford the business interests of the country in the existing
financial emergency.·•
Reserves carried by a member bank
with a Federal Reserve Bank, may be
checked against and withdrawn for the
purpose of meeting existing liabilities,
but no bank shall make new loans or
pay dividends until the total reserve
required by the law is fully restored.
Federal Reserve Banks may receive
from member banks as reserves, paper
eligible and acceptable for rediscount
and properly endorsed, to the extent of
not exceeding 011e-half of each reserve
installment. The 5% redemption fund
of national banks held with the Treasury cannot be considered part of the
reserve·. No deposits of any kind or
character, including Government depos\ts, etc., are 1:?xempt from reserve
requirements.
State banks and trust companies required by the law of their state to
keep reserves In their own vaults or
in those of another state bank or trust
company can continue to do so up to
November 16, 1917 ; such reserve deposits so kept shall be construed as if
they were reserve deposits in a national
bank in a Reserve or Central Reserve
City. Except as thus provided, no
member bank shall keep on deposit
with any non-member bank, more than
10% of its own capital and surplus.
I
II
1
'I
Added Privileges, Etc., of National
Sanks.
Member banks not situated in a central reserve city, unless expressly excepted by the Federal Reserve Board,
are authorized to make loans not running more than fl ve years, on improved
and unincumbered farm lands within
their districts, which loans may not exceed 50% of the actual value of the
property offered as security, the aggregate amount of such loans not to exceed 25% of capital and surplus of the
banks and une-third of their time deposits. Member banks with $1,000,000
or more capital and surplus may, subject to the approval and under regulations of the Federal Reserve Board,
ei;tablish branches in foreign countries
or in dependencies of the United States.
No member bank shall a ct as the medium or agent of a no_n-memh~r bank
in applying for or rece1 vmg <llscounts
from a Federal Reserve Bank except by
permission of the Federal Res~~ve
Board. No public funds of the Ph1llppine Islands or Postal Savings funds
or any government funds shall be deocsited in any bank in the Continental
United Statei;, not belonging to the
(For acceptance privileges of
System.
the member banks see "Operations o!
the Federal Reserve Banks.") The provision in the national bank act is repealed which requires that befo_re an_y
national bank can commence buswess 1t
shall traw-;fer to the Treasurer of the
United Stales a given amount of U. S.
Government bonds.
Refunding of United States
Government 2 ~o Bonda.
At any time from December 23, 1915,
to December 23, 1935, at the request
of any member bank (filed with the
Treasurer of the United States) desiring
to retire the whole or part of its circuiating notes, the Federal Reserve
Board may require Federal Reserve
Banks to pun·hase (in lawful money J
at par, in quarterly installments, Government 2 % bonds, now used to secure
circulation and so offered for sale by the
member banks the amount of these purchase:; (incrndiug tl,e bonds purchased by
the Fed ,ral Reserve Banks in the regular course of their business) not to . exceed $25,000,000 in any one year. If a
larger sum is offered for sale, the Federal Reserve Board will allot to each
Federal Reserve Bank such I?roportion
of the bonds as the capital and surplus
of the bank shall bear to the aggregate
capital and surplus of all the Federal
Reserve Banks. The Treasurer of the
United States shall pay to the member
banks selling the bonds, any balance due
after deducting a sum sufficient to redeem the outstanding notes ( to be canceled when offered for redemption) secured by such bonds. The Federal Reserve Banks may i~sue on these bonds
and on any bonds with the circulati?g
privilege acquircl1 by the banks, new circulating notes equal to the par value of
the amount of bonds so deposit..-d. These
notes which are a first and paramount
lien du all the assets of the issuing bank,
shall be issued and redeemed under the
same terms a.ud conditions as national
bani{ notes, except that they shall ;1ot
be limited to the amount of cap1tal
stock of the Federal Reserve Bank issuing them. Any Federal Reserve Bank
may exchange (with the approval of the
Federal Reserve Board) U. S. Government 2% bonds, against which no circulation is outstanding, to the amount of
not more than one-half for one-year 3%
U. S. Gold notes without any circulation
privileges and for the remaining onehalf, U. S. 3% 30-year bonds without circulation privileges, provided the bank
agrees to pu1·chase for gold, if so reque,:ted by the Secretary of the Treasury
at the end of each year, for a period of ,
not more than 30 succeeding years, an
amount of notes fixed by the Secretary of
the 'freasurv t-ut not to exceed the
amount of the notes so first received.
The latter notes on the approval of the
Federal Reserve Board may be exchanged for U. S. 3% 30-year bonds,
FEDERAL RESERVE BANKS.
"The New Elastic Financial Reservoir System of the United States."
SAl..IENT
~'EA'l'URES
as pointed out by the Advocates ot the System.
New System.
Old System.
1. Establishment of a 11ormaL discourit
market in the United States (through
1. No such discount market exists at
present. .Most of the paper taken by
th• banks consists of single promissory notes, which are kept until
maturity by the banks that discount
them; this virtually immobilizes
American bank capital so invested.
The absence of a rediscount syi;tem
and of a ready market for America-n
bills, compels our merchants engaged in foreign trade, to pay yearly
a large tribute in colllmission:s ou
bills, etc., abroad.
·
.,
2. American business men, doing business abroad, under the present system, have to depend on foreign bank,,
for their accommodation or finance
themselves prnctically unaided. This
works as a drawback In establishing
credit and trade connections abroad
for the American industry, and gives
the foreign competitor the advantage
of his native banking representation,
there.
the tlii;counting of bills and accept- •
ances and the rediscount business
with the Federal Reserve Banks) for
the enormous amount of commercial
bills, etc., entering into our trade
transactions, domestic as well as
foreign. This will give us a market
of liquid commercial paper.
The
maturities of bills discounted with
the Federal Re::;erve Banks will be
::;hort and well distributed, enabling
these Banks to have a firm hold on
the general ·llloney market.
E.cp1.msiu1i
of
A.mericaIi
banking
a/Jruad, together with greater bank-
ing facilities abroad for our manufacturers, the member banks being
perU1itted to establish branches in
foreign countries, with the approval
or the Federal Reserve Board. This
will serve the foreign interests of
our merchant!; and will put American dealers on a footing of equality
with foreign competitors.
..,_ Esta/Jlishmerit
(ultimately)
of an
elastic cttr1·e1lcy system, the Federal
3.
•L EstabLisnme11t of a clearance check
system on a par basis, through the
4. Checks on country banks are at present collected at great expense and
with much unnecessary labor. Existing charges often cause the sending
of checks by devious routes, making
for considerable delay in redemption.
The exchange charges at present
aggregate an enormous sum annually
5. Ec;u1wmy of uu1· gold supply and concentration and mobilization of our at
present widely scattered gold reserves
into a number of central reservoirs
which through the rediscount provi::,ious are piped together. This justifies a lowering ot the bank reserves
which enhance::; the lending power
of our banks, auli it meanwhile
makes tor quick and effective work
when called tor, while the gold re::;erves of all banks will back those
of each and every bank in the sy:stem, creating a spirit of co-operation and accommodation.
5. We have been compelled to use much
larger gold reserves than any other
country in the world in proportion to
the amount of business done.
At
present, each bank feels that it can
hardly rely on its own reserve in
time ot distress ; which is just the time
when reserves are needed. This invites in such times to a dangerous
struggle for reserves, causes hoarding
and even this does not always prove
adequate.
u.
More imifonnity fo reserve regulations and in general supervision of a
larger number of banking institu-
6. At the preRent time our trust companies and State banks operate under
State charters, and are subject to different requirements as to reserves,
amounts of capital stock and periodical examinations and to other regulations than are in torce for the
national banks. All credit information gathered is now in the files
of the Controller of the CurrP,ncy,
who cannot furnish any information
therefrom without the permission of
the Pre:-ident.
Better accommodatioa /Jy local banks
7. The rigidity of our present currency
system often tends to undue stringency
in some sections, which
(through high interest rates) hampers legitimate business.
It may
also cause superabundance in other
sections. The new system will relieve the extreme pressure on the
money market in the active seasons
of the year, and will abate violent
interest rates. The absence of a discount market tendi- to the loaning of
an undue large part of the resource:of our banks on i-tock exchange call
loani- whl¢) together with sudden
wltlldrnw~s in times or sea:-;onal
monetary. stringency,
makes
for
Reserve notes being issued against
bona fide commercial paper (of es,-;entially a "self-liquidating" character J and coming back for redemption
as soon as they have served their immediate purpose, because they cannot
be counted as reserves, the collateral
is constantly maturing, etc. This, together with provision, making practically impossible the carrying ot
Federal Re::;erve notes of one bank
by another and with reasonable
provi:sions to regulate reserve deticiencie
against the outstanding
notes, will create a currency capable
of expanding when expansion is required by trade activity, the progression of good:; from producer to
consumer, etc., and contracting when
these trade requirements are at an
end.
clearance ot individual checks, and
checks of one .F 'ederal Reserve Bank
on another, through the Federal Reserve machinery.
This will create
a national clearing house system
which will give a higher velocity to
the credit system of the United States,
establh;h parity of exchange between
all places in a Federal Reserve District and between the Federal Reserve Districts themselves.
tions, the law allowing under certain con di t10ns the participation ot
trust companies and State banks in
the stock of the 1''tderal Reserve
Uanks.
Uolrormity iu the relation
of certain liabilities of the member
banks to the amount of their capital
stock and surplus. The {ultimate)
establishment, through the filing of
credit information, of a central credit
bureau for the benefit of all the Federal Reserve Banks of the system.
to aid legitimate local business and a
more eveu and equitable distribution
of our credit resources coupled with
a normalization ot interest rates,
facilitating a free flow of capital anQ
credit, throughout the country; all
thi::; made possible and facilitated
through the discount privileges of the '
member banks with the Federal Reserve Banks and through the rediscoun t business of one Reserve Bank
with auother, with the approval or at
the direction of the I<'ederal Reserve
Board.
Our present ailoual Bank note circulation, which was conceived (11side
from the aim of attaining more uniformity of the circulating medium)
by the necessity for a market for our
Government bonds is based upon the
amount of such Government bonds
outstanding and not upon the actual
currency needs of the country. lt
therefore lacks all qualities of normal expansion and contraction. lt is
rigid, unwieldy, uneconomical and
unscientific.
The Jfederal Reserve
Act contains provisions which may
ultimately refund the present 2%
Government debt with circulation
privilege, into a 3% Government debt
without this privilege.
i
8. 'J'he establishment of a discount
market which may, if desirable, at-
tract foreign capital and will make
c.:ommercial paper a more liquid asset
than hitherto ; the accumulation of a
huge foreign exchange portfolio cont
sbting of foreign bills and ba;:\ker~
acceptances which will gi,ve our
terior gold movement a system
brake:;; the regulation of interes
rates to be effectively used whe
necessary, the dealing in gold an
bullion; the added prestige of Ameri
can commercial paper made possibl
through the backing of the new sy tern and the standardization of co
mercial paper ; the establishment ~
foreign branches and other activitie
abroad; all this will eliminate clums
and devious commercial practices ;
will cut down the cost of banking
and consequently the relative charg
thereof on the entire community-,
and will render the control or the
country's gold stock more s imple a d
easy. It will stabilize commerce a d
finance.
8. The lack of a concentrated and regulated supply of foreign bills militate
against rational foreign exchange
transactions. The absence of a discount market and uniform discount
rates often deprives our markets from
attracting gold when needed ; it
leaves our gold flow without regulators, and sometimes without direction. The backing by the entire banking resources of the United States of
the American b!lls of exchange . under
the new law, will work for a direct
American exchange market where the
importance of our foreign trade permits it and w!ll go far in having the
prestige of the American bill of exchange installed as a gold document,
which will free our country from a
somewhat burdensome commercial
isolation , so far experienced.
1
9. At the helm of the system, guiding
the banking and credit machinery
and gold reserves of the country,
stands a body, representative of the
public of the United States, viz. : the
Federal Reserve Board aided by the
Federal Advisory Council, surveying the entire commercial and credit
relation s within the United States
and without; scanning the financial and commercial horizon and
being in a position (equipped with
economic barometers of every kind
and character) to reasonably forecast
the changes in financial and commercial conditions and act accordingly.
The law will ultimately give the
United States leadership and a conservative influence in finance, it will
afford stability to business conditions
and will give the country a system
of greatest co-operation and co-ordination that will go a long way to
establish the commercial supremacy
of the United States in the world.
9. Our credit system lacks at present
supervision and direction which sometimes makes for entirely unwarranted
feelings of antagonism between several groups of banking, and several
banking sections of the country, and
·oftentimes for unjustified criticism
by the public. It also is a potent
factor in causing unpreparedness
when emergency calls for quick and
decisive action. The excellent manner in which the Federal Reserve
Board and the bankers of the
country are handling the present situation, created by the European war,
in face of the existing decentralized
conditions, augurs well for the good
that will result, when under the new
system, the banking and credit resources of the country are well
mobilized, guided and correlated.
:\'ovember, 1914.
NOTE : The Statements contained in this Chart are based upon information
which we consider trustworthy, but they are not guaranteed by us.
A. B. LEACH & Co.
@FedFRASER