Not less than 8 nor more than 12; (12 have been designated by organization committee) one to be located in each of a like number of cities to be known as Federal Reserve Cities; one of such cities to be located in each of a like number of districts to be known as Federal Reserve Districts covering the entire continental U. S., excluding Alaska.

Each controlled by nine directors, as follows: 3 - Elected by Member Banks representing banks. 3 - Elected by Member Banks representing business interests of District - directors, officers or employees of any bank not eligible.

3 - Appointed by Federal Reserve Board, one a person of banking experience, to be chairman and designated as "Federal Reserve Agent." Directors, officers, employees or stockholders of any bank not eligible.

No member of Congress shall be an officer or director.

Capital not less than $4,000,000. Shares $100 par value, tax exempt, to be subscribed by Member Banks in District, and under certain conditions by U. S. Treasury, and by general public, holdings by latter not to exceed $25,000 each. Only stock owned by Member Banks can be voted; such stock not to be transferred nor hypothecated.

Earnings: - 6 per cent cumulative dividends; remainder - one-half to surplus up to 40 per cent of paid-in capital, after this all earnings to U. S. as a franchise tax, to be applied either to gold reserve, or to retirement of outstanding U. S. bonds.

Must maintain reserves in gold or lawful money of at least 35 per cent of its deposits, in addition to reserves against notes.

Duties And Powers

Receive for deposit at par checks and drafts drawn on any of its depositors; and checks and drafts from other Federal Reserve Banks drawn on any bank in the system.

Accept deposits from U. S., Member Banks of District, and other Federal Reserve Banks.

Discount commercial notes, drafts and bills of exchange endorsed by Member Banks protest waived, not including those drawn or issued to carry stocks or securities, except U. S. bonds; such paper not to run for more than 90 days, except agricultural and cattle paper in amount fixed by Federal Reserve Board, having a maturity not to exceed six months.

Discount acceptances bearing endorsement of one Member Bank based on exportation or importation of goods, and maturing in not more than three months, amount of such acceptances not to exceed one-half of capital and surplus of bank for which discount is made.

Issue circulating notes under conditions provided in National Bank Act, except that issue is not limited to amount of capital.

Under regulations of Federal Reserve Board may buy and sell, with or without endorsement of a Member Bank, cable transfers, bankers' acceptances and bills of exchange of kind named above.*

Deal in gold coin and bullion.

Buy and sell U. S. Bonds and notes; also State, County, District, or Municipal notes, revenue bonds or warrants having not more than six months to run.

Buy from Member Banks and sell bills of exchange arising out of commercial transactions.

Establish branches in District under regulations approved by Federal Reserve Board.

Establish from time to time rates of discount.

With consent of Federal Reserve Board, open bank accounts and establish agencies in foreign countries to deal in two-name bills of exchange, having not more than 90 days to run.

Open accounts with other Federal Reserve Banks for exchange purposes.

No government funds, public funds of the Philippine Islands, nor postal savings funds shall be deposited in any bank in the continental U. S. not belonging to this system.

Note Issue

Federal Reserve Notes, obligations of U. S., to be issued to Federal Reserve Banks at discretion of Federal Board; denominations $5, $10, $20, $50, $100; redeemable in gold or lawful money at any Federal Reserve Bank, and in gold at U. S. Treasury; secured by equal amount of paper accepted for rediscount, and, by first lien equally with circulating notes secured by U. S. bonds, on all assets of issuing bank; receivable for all taxes, customs, and other public dues.

Federal Reserve Banks allowed to substitute collateral.

Notes must be forwarded to issuing bank for credit or redemption when received at other Federal Reserve Banks.

Federal Reserve Banks shall carry 40 per cent gold reserve against outstanding notes, of which not less than 5% shall be with U. S. Treasury.

When gold reserve, by permission of Federal Reserve Board, falls below 40%, Board shall establish tax of not more than 1% on deficiency down to 321/2%; below that not less than 11/2% increasingly upon each 21/2% decrease; tax to be paid by Reserve Bank but added to rates of discount fixed by Board.

No Federal Reserve Bank shall pay out notes of another bank under penalty of 10 per cent face of notes.

Federal Reserve Board has right to reject application for notes of any Federal Reserve Bank.

Notes presented for redemption at U. S. Treasury shall be paid and returned to Federal Reserve Bank. If presented otherwise than for redemption may be exchanged for gold and returned to issuing bank, or they may be returned for credit of U. S.