The Federal Reserve Act conferred authority upon the Federal Reserve Board either to add to the number of cities classified as reserve and central reserve cities, or to terminate their designation as such. As the reserves of member banks are now carried exclusively with the federal reserve banks, the designation of any-city as a reserve city relates only to the percentage of reserve that must be carried by its banks. The question of profits from re-deposited legal reserve balances no longer applies. Since the country and reserve city banks no longer look primarily to the reserve city and central reserve city banks, respectively, for support, but rather to their federal reserve bank, the reason for requiring higher reserves from the reserve city and central reserve city banks is less important; reserves required of central reserve city and reserve city banks are higher than those required of country banks for reasons only that non-member banks keep part of their legal reserves in central reserve city and reserve city banks, and that some member banks also carry non-reserve balances in reserve city and central reserve city banks other than the federal reserve banks.
The reserve cities at present are: Boston, Albany, Brooklyn and Bronx, Buffalo, Philadelphia, Pittsburgh, Baltimore, Washington, Richmond, Charleston, Atlanta, Jacksonville, Birmingham, New Orleans, Dallas, El Paso, Fort Worth, Galveston, Houston, San Antonio, Waco, Little Rock, Louisville, Chattanooga, Memphis, Nashville, Cincinnati, Cleveland, Columbus, Toledo, Indianapolis, Chicago, Peoria, Detroit, Grand Rapids, Milwaukee, Minneapolis, St. Paul, Cedar Rapids, Des Moines, Dubuque, Sioux City, Kansas City (Mo.), St. Joseph, Lincoln, Omaha, Kansas City (Kan.), Topeka, Wichita, Denver, Pueblo, Muskogee, Oklahoma City, Tulsa, Seattle, Spokane, Tacoma, Portland, Los Angeles, Oakland, San Francisco, Ogden, Salt Lake City - 63 in all. These cities have now to carry 10 per cent reserve against demand deposits. Boston and Philadelphia, although important banking centers, each having a greater population than St. Louis, continue to be classed as reserve cities and their banks are required to carry but 10 per cent reserve, whereas St. Louis banks must carry 13 per cent.
The Federal Reserve Board has adopted the following requirements as necessary before consideration will be given to the designation of any city as a reserve city: A population of at least 50,000; combined capital and surplus of national banks in the applying city of not less than $3,000,000, with deposits of not less than $10,000,000; indorsement of the application by at least 50 national banks located outside of the applying city, stating that they are carrying or intend to carry, if the applying city is designated, accounts with a national bank in the city in question. Applications will be referred for report and recommendation to the federal reserve bank of the district in which the applying bank is located.