Directors of class A and class B are chosen as follows: The banks of the district are classified by the chairman of the board of directors into three groups, each containing about one-third of the banks and consisting of banks of similar capitalization. Each group elects one A and one B director every third year. If vacancies occur they are filled in the same manner as the original election, and such appointees hold office for the unexpired term. The board of directors of each member bank elects a district reserve elector and certifies his name to the chairman of the reserve bank board, who prepares lists of the electors thus named in each group and sends one list to each elector in the group. Each member bank may nominate to the chairman one candidate for class A and another for class B, and a copy of the list of these nominees is sent to each elector. The electors vote by preferential ballot.
The method of election has been criticized, first, because of its awkwardness and the fact that few member banks are sufficiently interested to participate in the election, and, secondly, because the "one bank, one vote" equality provided by the act gives the preponderating power to the smaller banks. But this last objection is probably more than counterbalanced by avoidance of the opposite criticism that would arise if the larger banks were given plural voting, namely, that the system was run by and in the interests of the larger institutions.
Directors of class C at the time of their appointment shall have been for at least two years residents in the district for which they are appointed. One of them is designated by the Federal Reserve Board as "Chairman of the Board of Directors of the Federal Reserve Bank" and as "Federal Reserve Agent." Another class C director is designated as "Deputy Chairman," to exercise the powers of the chairman when necessary. In case of absence of both the chairman and deputy chairman, the third class C director presides at meetings of the board.