The fundamental control of the Federal Reserve bank is in the hands of the board of directors, consisting of nine members. This board of directors consists of three classes, each containing three members and each class being designated by a letter, as A, B, and C. Class C directors are nominated by the Federal Reserve Board and represent the government. Class B directors are business men not engaged in banking who are presumed to represent in a general way the industrial, commercial, and agricultural interests of the district in which the bank is situated. Class A directors are directly representative of the banks.

Both Class A and Class B directors are chosen by the banks, and for the purpose of this selection the banks in each district are divided into three groups. Group one chooses one Class A and one Class B director, group two the same number, and group three the same. In group one, the voters or electors are the banks of large capitalization; in group two those of medium capitalization; and in group three the small banks. The banks are divided into three groups in such a way as to place banks of similar 'capitalization in each. Each bank has one vote, irrespective of its size. The group division, however, prevents the small banks from electing men who represent them exclusively and insures approximately equal representation to banks of somewhat smaller size. The directors in question are appointed for equal terms of three years each, but these terms are so arranged that two directors go out of office each year, thus insuring opportunity for rotation.

The chairman of the board of directors is designated by the government and is the Federal Reserve Agent of the bank. The Federal Reserve Agent is aided by another officer known as the Assistant Agent, confirmed by the Board. The Federal Reserve Agent is one of the Class C directors. The remaining Class C directors, sometimes described as the "unattached" directors, have no specific functions other than those assigned to any director of the bank.