Administrative functions are essentially of two kinds: (a) The regular and recurring duties necessary to the operation of the system, and (b) the sporadic or occasional duties which grow out of the operation of the Act, but which do not occur at any definite time or times.

Of the regular and stated duties of administration, probably the most conspicuous is that of regularly approving discount rates when they are submitted by the several banks. To do this work intelligently involves careful study and consideration of the general business conditions throughout the nation, of the situation in each of the reserve districts themselves, and of the broad general outlook for the future. An incidental consideration is necessarily that of the earnings of Federal Reserve banks, and the degree in which it is necessary or desirable to enlarge those earnings through the taking on of more business.

Another administrative function practically continuous in its operation is that of granting to banks power to enlarge their acceptances of paper up to 100 per cent of their capital and surplus, and of extending to them the right to exercise the functions of trustee, executor, administrator, and the like. Under the terms of the Federal Reserve Act these powers cannot be conveyed except by special permit, and any member bank which desires to make use of them must, therefore, obtain the consent of the board. Under the system which has been laid down by the board this involves an application first of all to a local Federal Reserve bank, and when such an application has been approved the board is in position to take action, either confirming or disapproving the findings of the Federal Reserve bank which had passed upon it.

The law requires also that each Federal Reserve bank shall submit to the Federal Reserve Board statements of compensation paid to officers and directors, that they may be approved by the board. This naturally implies a study of proper rates of compensation, and the taking of action designed to fix such rates when occasion demands. Once established, the salary fists of the Federal Reserve banks are not likely to show extensive changes, but such alterations as there are will recur and require attention from time to time.

Other administrative duties must likewise be performed, among them the passing upon and approval of applications for and surrender of capital stock in Federal Reserve banks, the holdings of the member banks varying according as their own capital and surpluses increase and decrease. These, however, are for the most part technical, and no further enumeration is necessary.