The member of the Federal Reserve system enjoys certain privileges which have been the primary cause for entering it and which may now be stated in detail:

Power to rediscount. The member may at any time submit "eligible paper" for rediscount. Proceeds of such discounts are carried to its credit on the books of the Reserve bank.

Authority to use transfer system. The "reserve account" of the member is not a "dead" or inactive account, but can and should be regularly used and drawn upon. The "required reserve" is merely the equivalent of the "minimum balance" required by many banks of their customers. Regular deposits in the Reserve bank should be made by the member, and when collected the proceeds are carried to its credit and offset checks drawn on its account. The reserve account thus serves as a medium for collections and transfers.

Privilege of calling for service. The Federal Reserve Board has prescribed a long list of functions which may be performed by Reserve banks on behalf of their members and for the exercise of which the members are therefore entitled to call. Among these are the services of purchasing securities, "checking" commercial paper, and otherwise performing the duties of a "correspondent." Not all Reserve banks have undertaken these functions on an extensive scale, but their work in these directions may be expected to grow.

Receipt of dividends. Every member bank is entitled to cumulative dividends upon its Reserve bank stock at 6 per cent per annum.