The Act of 1864 required that national banks located in the seventeen principal cities named carry reserves consisting of lawful money, equal to 25 per cent of the aggregate amount of their circulation and deposits, and that all other national banks keep similar reserves, which, however, needed to equal only 15 per cent.

Whenever the reserves on hand fell below these minimum amounts for any bank, the bank was forbidden to make time loans, to discount time paper, or to pay dividends. Three-fifths of the 15 per cent required reserves might be carried as balances with approved banks of the seventeen cities named and thus be available to redeem the circulation of the bank.

The Act of 1874 abolished the reserve requirements against national bank notes, and provided that the 5 per cent redemption fund against national bank notes might be counted as part of the required reserve against deposits.

The Act of 1887 provided for additional reserve cities. Whenever three-fourths of the national banks located in any city having a population of 50,000 or over applied to the Comptroller of the Currency to have their city added to the list of cities above mentioned, the Comptroller was empowered to grant the request, and the city was thereafter known as a "reserve city." Though all the banks in such city were thereafter required to have reserves equal to 25 per cent of their deposits, they had the profits and advantages arising from the bank balances carried with them. The classification of the banks, therefore, turned on the net balance of these advantages and disadvantages and proved to be somewhat artificial, for in many cities the banks were technically country banks, while in many smaller places they were reserve city banks.

Also, whenever three-fourths of the national banks in any city having 200,000 population or over requested it, the Comptroller might designate it a "central reserve city," in which one-half of the lawful money reserve of the reserve city banks might be deposited, and such city was required thereafter to carry reserves equal to 25 per cent of its deposits.

The Act of 1903 reduced the minimum population of a reserve city from 50,000 to 25,000.