Federal Reserve: A Faustian Bargain?

Federal Reserve:
A Faustian Bargain?
By William P. Litynski
Federal Reserve: The Monopoly of Big Credits?
Current and former presidents of the Federal Reserve Bank of New York pose for a group portrait on May ! "#$% From left to
right: &illiam '% M()onough! &illiam C% )udley! *aul +% ,ol(ker! -% .erald Corrigan! and Timothy F% .eithner% +ll five men
are /or were0 mem1ers of the Coun(il on Foreign Relations and mem1ers of the Trilateral Commission%
/*hoto: Federal Reserve0
+ndrew 'a(kson
2It is to be regretted that the rich and powerful too often bend the acts of
government to their selfish purposes. )istin(tions in so(iety will always e3ist
under every 4ust government% -5uality of talents! of edu(ation! or of wealth (an not
1e produ(ed 1y human institutions% 6n the full en4oyment of the gifts of 7eaven and
the fruits of superior industry! e(onomy! and virtue! every man is e5ually entitled to
prote(tion 1y law8 but when the laws undertake to add to these natural and just
advantages artificial distinctions, to grant titles, gratuities, and exclusive
privileges, to make the rich richer and the potent more powerful, the humble
members of societythe farmers, mechanics, and laborerswho have neither
the time nor the means of securing like favors to themselves, have a right to
complain of the injustice of their Government. There are no necessary evils in
government. Its evils exist only in its abuses. 6f it would (onfine itself to e5ual
prote(tion! and! as 7eaven does its rains! shower its favors alike on the high and the
low! the ri(h and the poor! it would 1e an un5ualified 1lessing%9
: +ndrew 'a(kson! *resident of the ;nited <tates! in his ,eto Message regarding the
<e(ond Bank of the ;%<% on 'uly #! =>"
Federal Reserve Chairman Ben Bernanke /right0 appears with former Federal Reserve Chairman *aul ,ol(ker /left0 and former
Federal Reserve Chairman +lan .reenspan /(enter0 after parti(ipating in the (eremonial signing of a (ertifi(ate (ommemorating the
##th anniversary of the signing of the Federal Reserve +(t at the Federal Reserve Building in &ashington! )%C% on Monday!
)e(em1er ?! "#>% Bernanke! 4oined 1y his two prede(essors! marked the ##th anniversary of the Federal Reserve 1y refle(ting on
the 1old a(tions past (hairmen have had to take in the 1est interest of the +meri(an e(onomy% /+* *hoto@*a1lo MartineA Monsivais0
2ost !mericans have no real understanding of the operation of the international moneylenders. The bankers want it
that way. &e re(ogniAe in a haAy sort of way that the Roths(hilds and the &ar1urgs of -urope and the houses of '% *% Morgan!
Buhn! Coe1 and Company! <(hiff! Cehman! and Ro(kefeller possess and (ontrol vast wealth% 7ow they a(5uired this vast
finan(ial power and employ it is a mystery to most of us% 6nternational 1ankers make money 1y e3tending (redit to
governments% The greater the de1t of the politi(al state! the larger the interest returned to the lenders% The national 1anks of
-urope are a(tually owned and (ontrolled 1y private interests% 6n the early years of the Repu1li( the ;nited <tates e3perimented
with a (entral 1anking system% 'efferson opposed +le3ander 7amiltonDs s(heme for the First Bank of the ;nited <tates! and
+ndrew 'a(kson a1olished Ni(holas BiddleEs <e(ond Bank of the ;nited <tates% The &all <treet 1anks (ontri1uted the finan(ial
mus(le to ele(t &oodrow &ilson *resident in F"% Their agent! Colonel -% M% 7ouse! 1e(ame the most powerful figure in the
&ilson administration% *aul MoritA &ar1urg! s(ion of the M% M% &ar1urg Company of 7am1urg and +msterdam! (ame to the
;%<% in F#"% -ight years later he was a partner in the 1anking house of Buhn! Coe1 of New York% "arburg was the architect
of our #ederal $eserve %ystem, creating a privately owned mechanism to control the currency and credit of the &nited
%tates. The #ederal $eserve is a bank of monetary issue. It is empowered to establish a national discount rate and to
authori'e the printing of the currency of the &nited %tates. The accounts of the #ederal $eserve %ystem have never been
audited. It operates outside the control of (ongress and through its )oard of Governors manipulates the credit of the
&nited %tates. ;nder Franklin )% Roosevelt the original term of offi(e for governors was e3tended from seven to fourteen years
: putting the 1oard 1eyond the rea(h of any *resident% The powerful -uropean 1anker +nselm Roths(hild on(e said! 2.ive me
the power to issue a nationEs money! then 6 do not (are who makes the laws%9
: ;%<% <enator Barry .oldwater! With No Apologies! page "=G"=" /written in FHF0
&illiam '% M()onough! 'ohn *% Cipsky! <tanley Fis(her! &illiam C% )udley /*resident of the Federal Reserve Bank of New
York0! and Roger &% Ferguson 'r% listen as Federal Reserve Chairman 'anet Yellen delivers a spee(h during an -(onomi( Clu1
of New York 1an5uet in New York City on +pril ?! "#$% /*hoto: -(onomi( Clu1 of New York0
&oodrow &ilson
27owever it has (ome a1out! it is more important still that the control of credit also has
become dangerously centrali'ed% 6t is the mere truth to say that the finan(ial resour(es of
the (ountry are not at the (ommand of those who do not su1mit to the dire(tion and
domination of small groups of (apitalists who wish to keep the e(onomi( development of the
(ountry under their own eye and guidan(e% The great monopoly in this country is the
monopoly of big credits. %o long as that exists, our old variety and freedom and
individual energy of development are out of the *uestion. ! great industrial nation is
controlled by its system of credit. +ur system of credit is privately concentrated. The
growth of the nation, therefore, and all our activities are in the hands of a few men who,
even if their action be honest and intended for the public interest, are necessarily
concentrated upon the great undertakings in which their own money is involved and
who necessarily, by very reason of their own limitations, chill and check and destroy
genuine economic freedom. This is the greatest 5uestion of all! and to this statesmen must
address themselves with an earnest determination to serve the long future and the true
li1erties of men% This money trust, or, as it should be more properly called, this credit
trust, of which (ongress has begun an investigation, is no myth, it is no imaginary
thing. It is not an ordinary trust like another. It doesn-t do business every day. It does
business only when there is occasion to do business. You (an sometimes do something
large when it isnIt wat(hing! 1ut when it is wat(hing! you (anIt do mu(h% !nd I have seen
men s*uee'ed by it, I have seen men who, as they themselves expressed it, were put out
of business by "all %treet, because "all %treet found them inconvenient and didn-t
want their competition.9 : ;%<% *resident &oodrow &ilson! The New Freedom /F>0!
Chapter = /Monopoly! or Jpportunity?0
#ederal $eserve . /0/1 2residential 3lection4
!n +ctober %urprise5
#rom the Grassy 6noll in ilwaukee4
7one Gunman or 2atsy5
The !ttempted !ssassination of Theodore $oosevelt on +ctober /8, /0/1
*rogressive *arty (andidate Theodore Roosevelt appears on the (ampaign trail in F"% /*hoto: Ci1rary of Congress0
*rogressive *arty (andidate Theodore Roosevelt appears on the (ampaign trail on J(to1er $! F"! ten days 1efore Theodore
Roosevelt was shot in the (hest 1y a 2lone gunman9 in Milwaukee% /*hoto: Ci1rary of Congress0
Former ;%<% *resident Theodore Roosevelt was shot in the (hest 1y a 2lone gunman9 named 'ohn F% <(hrank /=H?GF$>0! a .ermanG
1orn immigrant from Bavaria! while (ampaigning in Milwaukee! &is(onsin on J(to1er $! F"%
.ermanG1orn 2patsy9 'ohn F% <(hrank /left0 poses for a group portrait as he appears with a group of Milwaukee poli(e offi(ers
shortly after <(hrankEs arrest in Milwaukee in J(to1er F"% /*hoto: Ci1rary of Congress0
President-elect Woodrow Wilson (left), member of the Democratic Party, and outgoing President William oward !aft (right), member of the
"e#ublican Party and a member of $kull % Bones at &ale 'ni(ersity, laugh together outside the White ouse #rior to Wilson)s inauguration on
*arch +, ,-,.. !he ,/th 0mendment of the '.$. 1onstitution legali2ing the federal income ta3 was ratified on 4ebruary ., ,-,.5 the 4ederal
"eser(e 0ct was signed by President Woodrow Wilson on December 6., ,-,.. !he "ockefeller 4oundation and the 0nti-Defamation League
of B)nai B)rith were founded in ,-,.. (Photo7 Library of 1ongress)
8ncoming President Woodrow Wilson (left) shakes hands with outgoing President William oward !aft on *arch +, ,-,.. Kuhn, Loeb & Co.
banking partner Felix Warburg (a Jewish banker from Hamburg, erman!" supporte# William Howar# $aft% Kuhn, Loeb & Co.
banking partner &aul Warburg (a Jewish banker from Hamburg, erman! an# Felix Warburg's brother" supporte# Woo#row Wilson
#uring the ()(* presi#ential ele+tion.
2resident Taft . The 9ewish 7obby at the "hite :ouse4 Mem1ers of the BEnai BErith visit ;%<% *resident &illiam 7oward
Taft /(enter0 at the &hite 7ouse in &ashington! )%C%! ;%<%+% &illiam 7oward Taft was a mem1er of %kull . )ones! a se(ret
so(iety at Yale ;niversity% The +ntiG)efamation Ceague of BEnai BErith /a 'ewish politi(al organiAation0 was founded in F>%
The Federal Reserve +(t and the federal in(ome ta3 /the ?
th
+mendment0 were esta1lished in F>%
/*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress *rints and *hotographs )ivision0
F" +meri(an presidential ele(tion ele(toral map
/*residential ele(tion held on Novem1er L! F"0
/0/1 2residential 3lection $esult
*residential (andidate *arty 7ome state
*opular vote -le(toral
vote
Running mate
Count *(t ,i(eGpresidential (andidate 7ome state -le(t% vote
&oodrow &ilson )emo(rati( New 'ersey ?!"F?!"=$ $%=$M $>LThomas R% Marshall 6ndiana $>L
Theodore Roosevelt *rogressive New York $!""!H" "H%$#M ==7iram &% 'ohnson California ==
&illiam 7oward Taft Repu1li(an Jhio >!$=?!"$" ">%HM =Ni(holas Murray Butler New York =
-ugene ,% )e1s <o(ialist 6ndiana F#!LL L%FFM #-mil <eidel &is(onsin #
-ugene &% Chafin *rohi1ition 6llinois "#=!L? %>=M #+aron <% &atkins Jhio #
+rthur -% Reimer <o(ialist Ca1or Massa(husetts "F!>"$ #%FM #+ugust .illhaus New York #
Jther $!LL? #%#>M NJther N
Total L!#$=!=>$ ##M L> L>
Needed to win "?? "??

Corporate sponsors of the F" *residential ele(tions /from left to right0:
Buhn! Coe1 K Co% 1anking partners Feli3 &ar1urg! *aul &ar1urg! and 'a(o1 7% <(hiff
Federal Reserve: A Continuation of the
Bank of the United States?
!he ($econd) Bank of the 'nited $tates in Philadel#hia o#erated from ,9,/ to ,9./. !he ($econd) Bank of the 'nited $tates, which was
renamed 'nited $tates Bank of Pennsyl(ania in ,9.:, became a #ri(ate bank until the bank failed in ,9+,. President 0ndrew ;ackson (etoed
the renewal of the Bank on ;uly ,<, ,9.6. =icholas Biddle was arrested for fraud in Philadel#hia in ,9+,5 howe(er, Biddle was ne(er tried in
court and was e(entually released from #rison.
&resi#ents of the ,ank of the -nite# .tates ((/)(0(1((, (1(20(132"
$homas Willing
President of the Bank of the
'nited $tates (,:-,-,9<:)5
*ayor of Philadel#hia
(,:/.-,:/+)
William Jones
'nited $tates (,9,/-,9,-)5
$ecretary of the =a(y
(,9,.-,9,+)
Lang#on Che4es
'nited $tates (,9,--,966)5
$#eaker of the '.$. ouse of
"e#resentati(es (,9,+-,9,>)
5i+holas ,i##le
'nited $tates (,96.-,9./)5
President of the 'nited $tates
Bank of Pennsyl(ania
(,9.:-,9.-)
3xcerpts of 2resident !ndrew 9ackson-s #arewell !ddress $egarding the )ank of the &nited %tates
;arch 8, /<=>?
+ndrew 'a(kson
2$ecent events have proved that the paper@money system of this country may be used as an engine to undermine your
free institutions, and that those who desire to engross all power in the hands of the few and to govern by corruption or
force are aware of its power and prepared to employ it. Your 1anks now furnish your only (ir(ulating medium! and money is
plenty or s(ar(e a((ording to the 5uantity of notes issued 1y them% &hile they have (apitals not greatly disproportioned to ea(h
other! they are (ompetitors in 1usiness! and no one of them (an e3er(ise dominion over the rest8 and although in the present state
of the (urren(y these 1anks may and do operate in4uriously upon the ha1its of 1usiness! the pe(uniary (on(erns! and the moral
tone of so(iety! yet! from their num1er and dispersed situation! they (an not (om1ine for the purposes of politi(al influen(e! and
whatever may 1e the dispositions of some of them their power of mis(hief must ne(essarily 1e (onfined to a narrow spa(e and
felt only in their immediate neigh1orhoods%
But when the (harter for the Bank of the ;nited <tates was o1tained from Congress it perfe(ted the s(hemes of the paper system
and gave to its advo(ates the position they have struggled to o1tain from the (ommen(ement of the Federal .overnment to the
present hour% The immense (apital and pe(uliar privileges 1estowed upon it ena1led it to e3er(ise despoti( sway over the other
1anks in every part of the (ountry% #rom its superior strength it could seriously injure, if not destroy, the business of any
one of them which might incur its resentment, and it openly claimed for itself the power of regulating the currency
throughout the &nited %tates. In other words, it asserted ;and it undoubtedly possessed? the power to make money plenty
or scarce at its pleasure, at any time and in any *uarter of the &nion, by controlling the issues of other banks and
permitting an expansion or compelling a general contraction of the circulating medium, according to its own will. The
other 1anking institutions were sensi1le of its strength! and they soon generally 1e(ame its o1edient instruments! ready at all
times to e3e(ute its mandates8 and with the 1anks ne(essarily went also that numerous (lass of persons in our (ommer(ial (ities
who depend altogether on 1ank (redits for their solven(y and means of 1usiness! and who are therefore o1liged! for their own
safety! to propitiate the favor of the money power 1y distinguished Aeal and devotion in its servi(e% The result of the illGadvised
legislation whi(h esta1lished this great monopoly was to (on(entrate the whole moneyed power of the ;nion! with its 1oundless
means of (orruption and its numerous dependents! under the dire(tion and (ommand of one a(knowledged head! thus organiAing
this parti(ular interest as one 1ody and se(uring to it unity and (on(ert of a(tion throughout the ;nited <tates! and ena1ling it to
1ring forward upon any o((asion its entire and undivided strength to support or defeat any measure of the .overnment% 6n the
hands of this formida1le power! thus perfe(tly organiAed! was also pla(ed unlimited dominion over the amount of the (ir(ulating
medium! giving it the power to regulate the value of property and the fruits of la1or in every 5uarter of the ;nion! and to 1estow
prosperity or 1ring ruin upon any (ity or se(tion of the (ountry as might 1est (omport with its own interest or poli(y%
&e are not left to (on4e(ture how the moneyed power! thus organiAed and with su(h a weapon in its hands! would 1e likely to
use it% The distress and alarm which pervaded and agitated the whole country when the )ank of the &nited %tates waged
war upon the people in order to compel them to submit to its demands can not yet be forgotten. The ruthless and
unsparing temper with which whole cities and communities were oppressed, individuals impoverished and ruined, and a
scene of cheerful prosperity suddenly changed into one of gloom and despondency ought to be indelibly impressed on the
memory of the people of the &nited %tates. 6f su(h was its power in a time of pea(e! what would it not have 1een in a season
of war! with an enemy at your doors? No nation 1ut the freemen of the ;nited <tates (ould have (ome out vi(torious from su(h a
(ontest8 yet! if you had not (on5uered! the .overnment would have passed from the hands of the many to the hands of the few!
and this organiAed money power from its se(ret (on(lave would have di(tated the (hoi(e of your highest offi(ers and (ompelled
you to make pea(e or war! as 1est suited their own wishes% The forms of your .overnment might for a time have remained! 1ut
its living spirit would have departed from it%
The distress and sufferings inflicted on the people by the bank are some of the fruits of that system of policy which is
continually striving to enlarge the authority of the #ederal Government beyond the limits fixed by the (onstitution. The
powers enumerated in that instrument do not confer on (ongress the right to establish such a corporation as the )ank of
the &nited %tates, and the evil conse*uences which followed may warn us of the danger of departing from the true rule of
construction and of permitting temporary circumstances or the hope of better promoting the public welfare to influence
in any degree our decisions upon the extent of the authority of the General Government. 7et us abide by the (onstitution
as it is written, or amend it in the constitutional mode if it is found to be defective.
The severe lessons of e3perien(e will! 6 dou1t not! 1e suffi(ient to prevent Congress from again (hartering su(h a monopoly!
even if the Constitution did not present an insupera1le o14e(tion to it% But you must remem1er! my fellowG(itiAens! that eternal
vigilance by the people is the price of liberty, and that you must pay the price if you wish to secure the blessing. It
behooves you, therefore, to be watchful in your %tates as well as in the #ederal Government. The power whi(h the
moneyed interest (an e3er(ise! when (on(entrated under a single head and with our present system of (urren(y! was suffi(iently
demonstrated in the struggle made 1y the Bank of the ;nited <tates% )efeated in the .eneral .overnment! the same (lass of
intriguers and politi(ians will now resort to the <tates and endeavor to o1tain there the same organiAation whi(h they failed to
perpetuate in the ;nion8 and with spe(ious and de(eitful plans of pu1li( advantages and <tate interests and <tate pride they will
endeavor to esta1lish in the different <tates one moneyed institution with overgrown (apital and e3(lusive privileges suffi(ient to
ena1le it to (ontrol the operations of the other 1anks% <u(h an institution will 1e pregnant with the same evils produ(ed 1y the
Bank of the ;nited <tates! although its sphere of a(tion is more (onfined! and in the <tate in whi(h it is (hartered the money
power will 1e a1le to em1ody its whole strength and to move together with undivided for(e to a((omplish any o14e(t it may
wish to attain% You have already had a1undant eviden(e of its power to infli(t in4ury upon the agri(ultural! me(hani(al! and
la1oring (lasses of so(iety! and over those whose engagements in trade or spe(ulation render them dependent on 1ank fa(ilities
the dominion of the <tate monopoly will 1e a1solute and their o1edien(e unlimited% &ith su(h a 1ank and a paper (urren(y the
money power would in a few years govern the <tate and (ontrol its measures! and if a suffi(ient num1er of <tates (an 1e indu(ed
to (reate su(h esta1lishments the time will soon (ome when it will again take the field against the ;nited <tates and su((eed in
perfe(ting and perpetuating its organiAation 1y a (harter from Congress%
It is one of the serious evils of our present system of banking that it enables one class of society@@and that by no means a
numerous one@@by its control over the currency, to act injuriously upon the interests of all the others and to exercise more
than its just proportion of influence in political affairs. The agri(ultural! the me(hani(al! and the la1oring (lasses have little
or no share in the dire(tion of the great moneyed (orporations! and from their ha1its and the nature of their pursuits they are
in(apa1le of forming e3tensive (om1inations to a(t together with united for(e% <u(h (on(ert of a(tion may sometimes 1e
produ(ed in a single (ity or in a small distri(t of (ountry 1y means of personal (ommuni(ations with ea(h other! 1ut they have no
regular or a(tive (orresponden(e with those who are engaged in similar pursuits in distant pla(es8 they have 1ut little patronage
to give to the press! and e3er(ise 1ut a small share of influen(e over it8 they have no (rowd of dependents a1out them who hope
to grow ri(h without la1or 1y their (ountenan(e and favor! and who are therefore always ready to e3e(ute their wishes% The
planter! the farmer! the me(hani(! and the la1orer all know that their su((ess depends upon their own industry and e(onomy! and
that they must not e3pe(t to 1e(ome suddenly ri(h 1y the fruits of their toil% Yet these (lasses of so(iety form the great 1ody of
the people of the ;nited <tates8 they are the 1one and sinew of the (ountryGGmen who love li1erty and desire nothing 1ut e5ual
rights and e5ual laws! and who! moreover! hold the great mass of our national wealth! although it is distri1uted in moderate
amounts among the millions of freemen who possess it% But with overwhelming num1ers and wealth on their side they are in
(onstant danger of losing their fair influen(e in the .overnment! and with diffi(ulty maintain their 4ust rights against the
in(essant efforts daily made to en(roa(h upon them% The mis(hief springs from the power whi(h the moneyed interest derives
from a paper (urren(y whi(h they are a1le to (ontrol! from the multitude of (orporations with e3(lusive privileges whi(h they
have su((eeded in o1taining in the different <tates! and whi(h are employed altogether for their 1enefit8 and unless you become
more watchful in your %tates and check this spirit of monopoly and thirst for exclusive privileges you will in the end find
that the most important powers of Government have been given or bartered away, and the control over your dearest
interests has passed into the hands of these corporations.9
+rti(le of the Constitution for the ;nited <tates of +meri(a /<e(tions =G#0
+rti(le ! <e(tion =% *owers of Congress
The Congress shall have *ower To lay and (olle(t Ta3es! )uties! 6mposts and -3(ises! to pay the )e1ts and provide for the (ommon
)efen(e and general &elfare of the ;nited <tates8 1ut all )uties! 6mposts and -3(ises shall 1e uniform throughout the ;nited <tates8
To borrow money on the credit of the &nited %tates,
To regulate Commer(e with foreign Nations! and among the several <tates! and with the 6ndian Tri1es8
To esta1lish an uniform Rule of NaturaliAation! and uniform Caws on the su14e(t of Bankrupt(ies throughout the ;nited <tates8
To coin oney, regulate the Aalue thereof, and of foreign (oin, and fix the %tandard of "eights and easures,
To provide for the 2unishment of counterfeiting the %ecurities and current (oin of the &nited %tates,
To esta1lish *ost Jffi(es and *ost Roads8
To promote the *rogress of <(ien(e and useful +rts! 1y se(uring for limited Times to +uthors and 6nventors the e3(lusive Right to
their respe(tive &ritings and )is(overies8
To (onstitute Tri1unals inferior to the supreme Court8
To define and punish *ira(ies and Felonies (ommitted on the high <eas! and Jffenses against the Caw of Nations8
To de(lare &ar! grant Cetters of Mar5ue and Reprisal! and make Rules (on(erning Captures on Cand and &ater8
To raise and support +rmies! 1ut no +ppropriation of Money to that ;se shall 1e for a longer Term than two Years8
To provide and maintain a Navy8
To make Rules for the .overnment and Regulation of the land and naval For(es8
To provide for (alling forth the Militia to e3e(ute the Caws of the ;nion! suppress 6nsurre(tions and repel 6nvasions8
To provide for organiAing! arming! and dis(iplining the Militia! and for governing su(h *art of them as may 1e employed in the
<ervi(e of the ;nited <tates! reserving to the <tates respe(tively! the +ppointment of the Jffi(ers! and the +uthority of training the
Militia a((ording to the dis(ipline pres(ri1ed 1y Congress8
To e3er(ise e3(lusive Cegislation in all Cases whatsoever! over su(h )istri(t /not e3(eeding ten Miles s5uare0 as may! 1y Cession of
parti(ular <tates! and the a((eptan(e of Congress! 1e(ome the <eat of the .overnment of the ;nited <tates! and to e3er(ise like
+uthority over all *la(es pur(hased 1y the Consent of the Cegislature of the <tate in whi(h the <ame shall 1e! for the -re(tion of Forts!
MagaAines! +rsenals! do(kGYards! and other needful Buildings8 +nd
To make all Caws whi(h shall 1e ne(essary and proper for (arrying into -3e(ution the foregoing *owers! and all other *owers vested
1y this Constitution in the .overnment of the ;nited <tates! or in any )epartment or Jffi(er thereof%
+rti(le ! <e(tion F%
The Migration or 6mportation of su(h *ersons as any of the <tates now e3isting shall think proper to admit! shall not 1e prohi1ited 1y
the Congress prior to the Year one thousand eight hundred and eight! 1ut a ta3 or duty may 1e imposed on su(h 6mportation! not
e3(eeding ten dollars for ea(h *erson%
The privilege of the &rit of 7a1eas Corpus shall not 1e suspended! unless when in Cases of Re1ellion or 6nvasion the pu1li( <afety
may re5uire it%
No Bill of +ttainder or e3 post fa(to Caw shall 1e passed%
/No (apitation! or other dire(t! Ta3 shall 1e laid! unless in *roportion to the Census or -numeration herein 1efore dire(ted to 1e taken%0
/<e(tion in parentheses modified 1y +mendment O,6%0
No Ta3 or )uty shall 1e laid on +rti(les e3ported from any <tate%
No *referen(e shall 1e given 1y any Regulation of Commer(e or Revenue to the *orts of one <tate over those of another: nor shall
,essels 1ound to! or from! one <tate! 1e o1liged to enter! (lear! or pay )uties in another%
Bo oney shall be drawn from the Treasury, but in (onse*uence of !ppropriations made by 7aw, and a regular %tatement
and !ccount of the $eceipts and 3xpenditures of all public oney shall be published from time to time.
No Title of No1ility shall 1e granted 1y the ;nited <tates: +nd no *erson holding any Jffi(e of *rofit or Trust under them! shall!
without the Consent of the Congress! a((ept of any present! -molument! Jffi(e! or Title! of any kind whatever! from any Bing! *rin(e
or foreign <tate%
+rti(le ! <e(tion #%
Bo %tate shall enter into any Treaty, !lliance, or (onfederation, grant 7etters of ar*ue and $eprisal, coin oney, emit )ills
of (redit, make any Thing but gold and silver (oin a Tender in 2ayment of Cebts, pass any )ill of !ttainder, ex post facto
7aw, or 7aw impairing the +bligation of (ontracts, or grant any Title of Bobility.
No <tate shall! without the Consent of the Congress! lay any 6mposts or )uties on 6mports or -3ports! e3(ept what may 1e a1solutely
ne(essary for e3e(uting itIs inspe(tion Caws: and the net *rodu(e of all )uties and 6mposts! laid 1y any <tate on 6mports or -3ports!
shall 1e for the ;se of the Treasury of the ;nited <tates8 and all su(h Caws shall 1e su14e(t to the Revision and Controul of the
Congress%
No <tate shall! without the Consent of Congress! lay any duty of Tonnage! keep Troops! or <hips of &ar in time of *ea(e! enter into
any +greement or Compa(t with another <tate! or with a foreign *ower! or engage in &ar! unless a(tually invaded! or in su(h
imminent )anger as will not admit of delay%
+meri(an National )e1t sin(e HF
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Fe#eral 6eser4e7 Wall .treet 6obber ,arons
% 1ash 1ow for the 1ouncil on 4oreign "elations?
Ceft to right: Federal Reserve ,i(e Chairman 'anet Yellen! former Federal Reserve Board Chairman *aul +dolph ,olker!
former Federal Reserve Board Chairman <ir +lan .reenspan! and outgoing Federal Reserve Board Chairman Ben Bernanke
listen to remarks during the Federal Reserve (entennial (ommemoration at the Federal Reserve 1uilding in &ashington! )%C% on
)e(em1er ?! "#>% /+((ording to the Chinese (alendar! "#> is known as Year of the <nake%0 The Federal Reserve marked its
##th anniversary with a (ommemoration (eremony featuring the past! outgoing! and in(oming (hairmen of the Federal Reserve%
9anet Dellen, 2aul !dolph Aolcker, and %ir !lan Greenspan are members of the (ouncil on #oreign $elations, a private
foreign affairs organi'ation in Bew Dork (ity. /*hoto 1y Mark &ilson@.etty 6mages0
Federal Reserve 1ankers pose for a group portrait at the Federal Reserve head5uarters in &ashington! )%C% on 'une ?! "#$%
From left to right: 'erome 7% *owell! Federal Reserve Chairman )r% 'anet Yellen! )r% Cael Brainard! and Federal Reserve ,i(e
Chairman )r% <tanley Fis(her% +ll four individuals are mem1ers of the Coun(il on Foreign Relations! a private organiAation in
New York City% )r% Cael Brainard and )r% <tanley Fis(her were mem1ers of the Trilateral Commission%
/*hoto: Federal Reserve0
Dr. $tanley 4ischer (right) is sworn in as a *ember of the Board of @o(ernors of the 4ederal "eser(e $ystem by 4ederal
"eser(e 1hairman Dr. ;anet &ellen on *ay 69, 6<,+. $tanley 4ischer, a dual citi2en of 0merica and 8srael, ser(ed as the
@o(ernor of the Bank of 8srael (8srael)s central bank) from 6<<> until 6<,.. (Photo7 4ederal "eser(e)
4ederal "eser(e 1hairman Dr. ;anet &ellen (left) swears in Dr. $tanley 4ischer as Aice 1hairman of the 4ederal "eser(e in
Washington, D.1. on ;une ,/, 6<,+. (Photo7 4ederal "eser(e)
1urrent and former 4ederal "eser(e Bank Presidents and current and former 4ederal "eser(e 1hairmen #ose for a grou# #ortrait on *ay ,,
6<,+. 4ront row7 William 1. Dudley (.
rd
left), ;anet L. &ellen (+
th
left), 0lan @reens#an (>
th
left), Ben Bernanke (/
th
left), B. @erald 1orrigan (far
right). Paul 0. Aolcker a##ears on the far left in the third row5 !imothy 4. @eithner a##ears .
rd
from left in the third row.
(Photo7 4ederal "eser(e)
4ederal "eser(e 1hairman ;anet &ellen (center) shakes hands with 4ederal "eser(e Board @o(ernor Daniel !arullo (left) after she was sworn
in as 4ederal "eser(e 1hairman, as her husband @eorge 0kerlof (right) stands nearby, at the 4ederal "eser(e Building in Washington, D.1.
on 4ebruary ., 6<,+. ;anet &ellen re#laced Ben Bernanke as 1hairman of the 4ederal "eser(e. ;anet &ellen and Daniel !arullo are members
of the 1ouncil on 4oreign "elations. (Photo by *ark WilsonC@etty 8mages)
4ederal "eser(e 1hairman Ben Bernanke smiles before deli(ering remarks to the 1ouncil on 4oreign "elations in Washington,
D.1. on *arch ,<, 6<<-. ("euters)
Ben <halom Bernanke! Chairman of the Federal Reserve! meets with other Federal Reserve 1ankers at a Federal Reserve 1oard
meeting in "##F% *rominent Federal Reserve 1ankers attending the meeting in(lude: &illiam C% )udley /*resident of the
Federal Reserve Bank of New York0! )onald Bohn /,i(e Chairman of the Federal Reserve0! )aniel Tarullo /Mem1er of the
Federal Reserve Board0! and Bevin &arsh /Mem1er of the Federal Reserve Board0% /Federal Reserve photo0
Ben <halom Bernanke /left0! Chairman of the Federal Reserve! meets with other Federal Reserve 1ankers at a Federal Reserve
1oard meeting% Jther Federal Reserve 1ankers in(lude 'anet Yellen /"
nd
left! ,i(e Chairman of the Federal Reserve0 and )aniel
Tarullo /"
nd
right! Mem1er of the Federal Reserve Board0% 9anet Dellen and Caniel Tarullo are members of the (ouncil on
#oreign $elations, a private organi'ation in Bew Dork (ity. /'im &atson@+gen(e Fran(eG*resse@.etty 6mages0
The Board of .overnors hold an open 1oard meeting on )e(em1er $! "#" to dis(uss proposed rules to implement the
enhan(ed prudential standards and early remediation re5uirements of se(tions ?L and ?? of the )oddGFrank +(t for foreign
1anking organiAations and foreign non1ank finan(ial (ompanies% /*hoto: Federal Reserve0
!he 4ederal "eser(e Board of @o(ernors hold an o#en board meeting on December ,+, 6<,6 to discuss #ro#osed rules to im#lement the
enhanced #rudential standards and early remediation reDuirements of sections ,/> and ,// of the Dodd-4rank 0ct for foreign banking
organi2ations and foreign nonbank financial com#anies. 4ederal "eser(e 1hairman Ben Bernanke and 4ederal "eser(e Aice 1hairman ;anet
&ellen #reside o(er the meeting. (Photo7 4ederal "eser(e)
4ormer 1hairmen of the 4ederal "eser(e $ir 0lan @reens#an (left) and Paul Aolcker share a laugh while #artici#ating in a #anel discussion on
ca#ital markets at @eorgetown 'ni(ersity in Washington, D.1. on *arch ,., 6<<:. .ir 8lan reenspan an# &aul 9ol+ker are members of
the Coun+il on Foreign 6elations, a pri4ate organi:ation in 5ew ;ork Cit!. (Photo by 1hi# $omode(illaC@etty 8mages)
8lan reenspan & Frien#s at the Fe#eral 6eser4e
(Photo7 Back From the Brink: The Greenspan Years by $te(en E. Beckner)
2In addition to these pragmatic goals, the powers of financial capitalism had another far@reaching aim, nothing less than
to create a world system of financial control in private hands able to dominate the political system of each country and
the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the
world acting in concert, by secret agreements arrived at in fre*uent private meetings and conferences. The ape3 of the
system was to 1e the Bank for 6nternational <ettlements in Basle! <witAerland! a private 1ank owned and (ontrolled 1y the
worldEs (entral 1anks whi(h were themselves private corporations% -a(h (entral 1ank! in the hands of men like Montagu
Norman of the Bank of -ngland! Ben4amin <trong of the New York Federal Reserve Bank! Charles Rist of the Bank of Fran(e!
and 74almar <(ha(ht of the Rei(hs1ank! sought to dominate its government by its ability to control Treasury loans, to
manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative
politicians by subse*uent economic rewards in the business world. In each country the power of the central bank rested
largely on its control of credit and money supply. In the world as a whole the power of the central bankers rested very
largely on their control of loans and of gold flows.9 : Tragedy and Hope 1y )r% Carroll Ruigley! p% >"$
Note: )r% Carroll Ruigley was a professor of history at .eorgetown ;niversity in &ashington! )%C%8 one of )r% RuigleyEs
students was Bill Clinton! the former *resident of the ;nited <tates
($ource7 Back From the Brink: The Greenspan Years by $te(en E. Beckner)

Left #hoto7 @old (ault of 4ederal "eser(e Bank of =ew &ork. @old bars are held in ,66 com#artments in the main and au3illary
(aults. (Photo7 htt#7CCgonyc.about.comCodC#hotogalleriesCigC4ederal-"eser(e-Bank-PicturesC*o(ing-@old-Bars.htm)
"ight #hoto7 F(er G6 million in foreign gold are counted by HsittersH in the bottom most (ault, (:/ feet below the busy financial district), of the
4ederal "eser(e Bank of =ew &ork in =ew &ork 1ity on *arch ,9, ,-/9. Bach gold bar weighed between 6: and 69 #ounds and was worth
G,+,<<< (in ,-/9 dollars). F(er one Duarter of all the official monetary gold of the free world--about G,..+ billion worth--is stored in ,6<
com#artments held by o(er :< countries and watched constantly by Hsitters.H $ales occasion freDuent transfers and gold is shifted bar by bar
from one to another of the com#artments. (BettmannC1F"B8$)
2Yeah! itEs interestingSthe former head of .oldman <a(hs! 'ohn &hitehead! was also the former head of the New York Federal
Reserve% +nd 6 met with him! and he said as soon as the Fed stops 1uying all the de1t that weEre issuingNwhi(h theyEve 1een doing!
the FedEs 1uying like threeG5uarters of the de1t that +meri(a issues% 7e said! on(e thatEs over! he said weEre going to have a failed
Treasury au(tion! interest rates are going to have to go up% &eEre living in this 1orrowed fantasy world! where the government keeps
on 1orrowing money% You know! we 1orrow this e3tra trillion a year! we wonder whoEs loaning us the trillion? The Chinese arenEt
loaning us anymore% The Russians arenEt loaning it to us anymore% <o whoEs giving us the trillion? +nd the answer is weEre 4ust
making it up% The Federal Reserve is 4ust taking it and saying! 27ere! weEre giving it%E 6tEs 4ust made up money! and this does not augur
well for our e(onomi( future% You know! some of these things are (omple3 enough itEs not easy for people to understand! 1ut your
point of saying! 1ankrupt(y usually (on(entrates the mind%9
: Mitt Romney! "#" presidential (andidate for the Repu1li(an *arty! in a spee(h that was se(retly videotaped in "#" /2$HM of the
*eople ,ideo90
2There are $H per(ent of the people who will vote for the president no matter what% +ll right! there are $H per(ent who are with him!
who are dependent upon government! who 1elieve that they are vi(tims! who 1elieve the government has a responsi1ility to (are for
them! who 1elieve that they are entitled to health (are! to food! to housing! to youGnameGit GG that thatIs an entitlement% +nd the
government should give it to them% +nd they will vote for this president no matter what% %%% These are people who pay no in(ome ta3% %%%
TMUy 4o1 is not to worry a1out those people% 6Ill never (onvin(e them they should take personal responsi1ility and (are for their lives%9
: Mitt Romney! "#" presidential (andidate for the Repu1li(an *arty! in a spee(h that was se(retly videotaped in "#" /2$HM of the
*eople ,ideo90
4ederal "eser(e Board 1hairman Ben Bernanke (>th ") chairs a meeting of the 4ederal F#en *arket 1ommittee, the 4ederal "eser(eIs
interest rate-setting body, in Washington, D.1. in this *arch ,:, 6<<- #icture released on *arch ,-, 6<<-. !he 4ederal "eser(e announced
the #urchase of longer-dated !reasury securities to hel# end a dee#ening '.$. recession.
("B'!B"$C;oe Pa(elC4ederal "eser(e BoardCandout)
0n em#loyee hauls a set of gold bars inside the gold (ault at the 4ederal "eser(e Bank of =ew &ork in =ew &ork 1ity on ;une 6,, 6<<9.
(J "andy FlsonC=ational @eogra#hic $ocietyC1orbis)
2The real truth of the matter is! as you and 6 know! that a finan(ial element in the large (enters has
owned the government ever sin(e the days of +ndrew 'a(kson%9
: ;%<% *resident Franklin )% Roosevelt! from a Novem1er ">! F>> letter to -dward Mandell 7ouse
=ew $eries 6<<, one dollar bill notes #ass through a #rinting #ress on =o(ember 6,, 6<<, at the Bureau of Bngra(ing and Printing in
Washington, D.1. !he new dollar bills contain the signatures of '.$. !reasury $ecretary Paul FII=eill and '.$. !reasurer "osario *arin.
(Photo by 0le3 WongC@etty 8mages)
+ Vim1a1we man named +le3 Mupondi hangs oneGdollar Federal Reserve Notes on a drying line after washing them in 7arare!
Vim1a1we on 'uly ?! "##% The washing ma(hine (y(le takes a1out $L minutes! and 2.eorge &ashington9 oneGdollar 1ills
(ome out mu(h (leaner than 1efore in Vim1a1weGstyle laundering of dirty money% Vim1a1weans suffer from hyperinflation
after the Muga1e regime massGprodu(ed their own 1ank notes8 Vim1a1weans now use +meri(an (urren(y as legal tender in an
attempt to (ur1 e(onomi( inflation in their own nation% /+* *hoto0
Co(als sell pirated C)Es from the street for ;%<% dollars in )ili! -ast Timor on <eptem1er ! "##% The ;%<% dollar is the offi(ial
(urren(y of -ast Timor% -ast Timor is a former *ortuguese (olony and a former provin(e of 6ndonesia% /.etty 6mages0
Fwen D. &oung watches Bmile *oreau (left),@o(ernor of the Bank of 4rance, shake hands with Kalmar $chacht (right), President of
the "eichsbank, in ,-6- after they acce#ted the terms of the &oung Plan. Kalmar $chacht was tried in =uremberg, @ermany for war
crimes and collaboration with the =a2is after World War 88. Fwen D. &oung was the 1hairman of the board of @eneral Blectric
1om#any (,-66-,-.-, ,-+6-,-++), <eput! Chairman of the Fe#eral 6eser4e ,ank of 5ew ;ork (()*/0()3/", Chairman of the
Fe#eral 6eser4e ,ank of 5ew ;ork (()310()=>", Director of the 1ouncil on 4oreign "elations (,-6:-,-+<), and !rustee of the
"ockefeller 4oundation (,-69-,-.-). (Photo7 Owen D. Young: A New Type of Inustria! "eaer by 8da *. !arbell)
680 F.2d 1239
John L. LEWIS, !ainti""#A$$%!!ant,
&.
'(I)E* S)A)ES o" A+%ri,a, *%"%ndant#A$$%!!%%.
No. 80-5905.
United States Court of Appeals,
Ninth Circuit.
Submitted March 2, 1982.
Decided April 19, 1982.
As Amended une 2!, 1982.
Cafayette C% Blair! Compton! Cal%! for plaintiff@appellant%
'ames R% <ullivan! +sst% ;% <% +tty%! Cos +ngeles! Cal%! argued! for defendant@appellee8 +ndrea <heridan Jrdin! ;% <% +tty%! Cos +ngeles!
Cal%! on 1rief%
+ppeal from the ;nited <tates )istri(t Court for the Central )istri(t of California%
Before *JJC- and BJJC7-,-R! Cir(uit 'udges! and <JCJMJN! )istri(t 'udge%Q
*JJC-! Cir(uit 'udge:
-n Ju!. 2/, 19/9, a$$%!!ant John L%0is 0as in1ur%d 2. a &%hi,!% o0n%d and o$%rat%d 2. th% Los Ang%!%s 2ran,h o" th% F%d%ra!
3%s%r&% Ban4 o" San Fran,is,o. L%0is 2rought this a,tion in distri,t ,ourt a!!%ging 1urisdi,tion und%r th% F%d%ra! )ort 5!ai+s A,t
6th% A,t7, 28 '.S.5. 8 1396627. )h% 'nit%d Stat%s +o&%d to dis+iss "or !a,4 o" su21%,t +att%r 1urisdi,tion. )h% distri,t ,ourt
dis+iss%d, ho!ding that th% F%d%ra! 3%s%r&% Ban4 is not a "%d%ra! ag%n,. 0ithin th% +%aning o" th% A,t and that th% ,ourt
th%r%"or% !a,4%d su21%,t +att%r 1urisdi,tion. W% a""ir+.
In %na,ting th% F%d%ra! )ort 5!ai+s A,t, 5ongr%ss $ro&id%d a !i+it%d 0ai&%r o" th% so&%r%ign i++unit. o" th% 'nit%d Stat%s "or
,%rtain torts o" "%d%ra! %+$!o.%%s. 'nit%d Stat%s &. -r!%ans, 92: '.S. 80/, 813, 96 S.5t. 19/1, 19/:, 98 L.Ed.2d 390 619/67.
S$%,i"i,a!!., th% A,t ,r%at%s !ia2i!it. "or in1uri%s ;,aus%d 2. th% n%g!ig%nt or 0rong"u! a,t or o+ission; o" an %+$!o.%% o" an.
"%d%ra! ag%n,. a,ting 0ithin th% s,o$% o" his o""i,% or %+$!o.+%nt. 28 '.S.5. 88 1396627, 26/1. ;F%d%ra! ag%n,.; is d%"in%d as<
th% %=%,uti&% d%$art+%nts, th% +i!itar. d%$art+%nts, ind%$%nd%nt %sta2!ish+%nts o" th% 'nit%d Stat%s, and ,or$orations a,ting
$ri+ari!. as instru+%nta!iti%s o" th% 'nit%d Stat%s, 2ut do%s not in,!ud% an. ,ontra,tors 0ith th% 'nit%d Stat%s.
28 '.S.5. 8 26/1. )h% !ia2i!it. o" th% 'nit%d Stat%s "or th% n%g!ig%n,% o" a F%d%ra! 3%s%r&% Ban4 %+$!o.%% d%$%nds, th%r%"or%, on
0h%th%r th% Ban4 is a "%d%ra! ag%n,. und%r 8 26/1.
)h%r% ar% no shar$ ,rit%ria "or d%t%r+ining 0h%th%r an %ntit. is a "%d%ra! ag%n,. 0ithin th% +%aning o" th% A,t, 2ut th% ,riti,a!
"a,tor is th% %=ist%n,% o" "%d%ra! go&%rn+%nt ,ontro! o&%r th% ;d%tai!%d $h.si,a! $%r"or+an,%; and ;da. to da. o$%ration; o" that
%ntit.. 'nit%d Stat%s &. -r!%ans, 92: '.S. 80/, 819, 96 S.5t. 19/1, 19/:, 98 L.Ed.2d 390 619/67, Logu% &. 'nit%d Stat%s, 912 '.S.
:21, :28, 93 S.5t. 221:, 2219, 3/ L.Ed.2d 121 619/37. -th%r "a,tors ,ourts ha&% ,onsid%r%d in,!ud% 0h%th%r th% %ntit. is an
ind%$%nd%nt ,or$oration, %ar! &. 'nit%d Stat%s, 230 F.2d 293 610th 5ir. 19:67, Fr%%!ing &. F%d%ra! *%$osit Insuran,%
5or$oration, 221 F.Su$$. 9:: 6W.*.-4!a.19627, a"">d $%r ,uria+, 326 F.2d 9/1 610th 5ir. 19637, 0h%th%r th% go&%rn+%nt is
in&o!&%d in th% %ntit.>s "inan,%s. ?oddard &. *istri,t o" 5o!u+2ia 3%d%&%!o$+%nt Land Ag%n,., 28/ F.2d 393, 39:
6*.5.5ir.19617, ,%rt. d%ni%d, 366 '.S. 910, 81 S.5t. 108:, 6 L.Ed.2d 23: 619617, Fr%%!ing &. F%d%ra! *%$osit Insuran,%
5or$oration, 221 F.Su$$. 9::, and 0h%th%r th% +ission o" th% %ntit. "urth%rs th% $o!i,. o" th% 'nit%d Stat%s, ?oddard &. *istri,t
o" 5o!u+2ia 3%d%&%!o$+%nt Land Ag%n,., 28/ F.2d at 39:. E=a+ining th% organi@ation and "un,tion o" th% F%d%ra! 3%s%r&%
Ban4s, and a$$!.ing th% r%!%&ant "a,tors, 0% ,on,!ud% that th% 3%s%r&% Ban4s ar% not "%d%ra! instru+%nta!iti%s "or $ur$os%s o"
th% F)5A, 2ut ar% ind%$%nd%nt, $ri&at%!. o0n%d and !o,a!!. ,ontro!!%d ,or$orations.
Ea,h F%d%ra! 3%s%r&% Ban4 is a s%$arat% ,or$oration o0n%d 2. ,o++%r,ia! 2an4s in its r%gion. )h% sto,4ho!ding ,o++%r,ia!
2an4s %!%,t t0o thirds o" %a,h Ban4>s nin% +%+2%r 2oard o" dir%,tors. )h% r%+aining thr%% dir%,tors ar% a$$oint%d 2. th%
F%d%ra! 3%s%r&% Board. )h% F%d%ra! 3%s%r&% Board r%gu!at%s th% 3%s%r&% Ban4s, 2ut dir%,t su$%r&ision and ,ontro! o" %a,h Ban4
is %=%r,is%d 2. its 2oard o" dir%,tors. 12 '.S.5. 8 301. )h% dir%,tors %na,t 2.A!a0s r%gu!ating th% +ann%r o" ,ondu,ting g%n%ra!
Ban4 2usin%ss, 12 '.S.5. 8 391, and a$$oint o""i,%rs to i+$!%+%nt and su$%r&is% dai!. Ban4 a,ti&iti%s. )h%s% a,ti&iti%s in,!ud%
,o!!%,ting and ,!%aring ,h%,4s, +a4ing ad&an,%s to $ri&at% and ,o++%r,ia! %ntiti%s, ho!ding r%s%r&%s "or +%+2%r 2an4s,
dis,ounting th% not%s o" +%+2%r 2an4s, and 2u.ing and s%!!ing s%,uriti%s on th% o$%n +ar4%t. S%% 12 '.S.5. 88 391A361.
Ea,h Ban4 is statutori!. %+$o0%r%d to ,ondu,t th%s% a,ti&iti%s 0ithout da. to da. dir%,tion "ro+ th% "%d%ra! go&%rn+%nt. )hus,
"or %=a+$!%, th% int%r%st rat%s on ad&an,%s to +%+2%r 2an4s, indi&idua!s, $artn%rshi$s, and ,or$orations ar% s%t 2. %a,h 3%s%r&%
Ban4 and th%ir d%,isions r%garding th% $ur,has% and sa!% o" s%,uriti%s ar% !i4%0is% ind%$%nd%nt!. +ad%.
It is %&id%nt "ro+ th% !%gis!ati&% histor. o" th% F%d%ra! 3%s%r&% A,t that 5ongr%ss did not int%nd to gi&% th% "%d%ra! go&%rn+%nt
dir%,tion o&%r th% dai!. o$%ration o" th% 3%s%r&% Ban4s<
It is $ro$os%d that th% ?o&%rn+%nt sha!! r%tain su""i,i%nt $o0%r o&%r th% r%s%r&% 2an4s to %na2!% it to %=%r,is% a dir%,t authorit.
0h%n n%,%ssar. to do so, 2ut that it sha!! in no 0a. att%+$t to ,arr. on through its o0n +%,hanis+ th% routin% o$%rations and
2an4ing 0hi,h r%Buir% d%tai!%d 4no0!%dg% o" !o,a! and indi&idua! ,r%dit and 0hi,h d%t%r+in% th% "unds o" th% ,o++unit. in an.
gi&%n instan,%. In oth%r 0ords, th% r%s%r&%A2an4 $!an r%tains to th% ?o&%rn+%nt $o0%r o&%r th% %=%r,is% o" th% 2road%r 2an4ing
"un,tions, 0hi!% it !%a&%s to indi&idua!s and $ri&at%!. o0n%d institutions th% a,tua! dir%,tion o" routin%.
C.3. 3%$ort (o. 69, 63 5ong. 1st S%ss. 18A19 619137.
)h% "a,t that th% F%d%ra! 3%s%r&% Board r%gu!at%s th% 3%s%r&% Ban4s do%s not +a4% th%+ "%d%ra! ag%n,i%s und%r th% A,t. In
'nit%d Stat%s &. -r!%ans, 92: '.S. 80/, 96 S.5t. 19/1, 98 L.Ed.2d 390 619/67, th% Su$r%+% 5ourt h%!d that a ,o++unit. a,tion
ag%n,. 0as not a "%d%ra! ag%n,. or instru+%nta!it. "or $ur$os%s o" th% A,t, %&%n though th% ag%n,. 0as organi@%d und%r "%d%ra!
r%gu!ations and h%a&i!. "und%d 2. th% "%d%ra! go&%rn+%nt. B%,aus% th% ag%n,.>s da. to da. o$%ration 0as not su$%r&is%d 2. th%
"%d%ra! go&%rn+%nt, 2ut 2. !o,a! o""i,ia!s, th% 5ourt r%"us%d to %=t%nd "%d%ra! tort !ia2i!it. "or th% n%g!ig%n,% o" th% ag%n,.>s
%+$!o.%%s. Si+i!ar!., th% F%d%ra! 3%s%r&% Ban4s, though h%a&i!. r%gu!at%d, ar% !o,a!!. ,ontro!!%d 2. th%ir +%+2%r 2an4s. 'n!i4%
t.$i,a! "%d%ra! ag%n,i%s, %a,h 2an4 is %+$o0%r%d to hir% and "ir% %+$!o.%%s at 0i!!. Ban4 %+$!o.%%s do not $arti,i$at% in th%
5i&i! S%r&i,% 3%tir%+%nt S.st%+. )h%. ar% ,o&%r%d 2. 0or4%r>s ,o+$%nsation insuran,%, $ur,has%d 2. th% Ban4, rath%r than th%
F%d%ra! E+$!o.%%s 5o+$%nsation A,t. E+$!o.%%s tra&%!ing on Ban4 2usin%ss ar% not su21%,t to "%d%ra! tra&%! r%gu!ations and do
not r%,%i&% go&%rn+%nt %+$!o.%% dis,ounts on !odging and s%r&i,%s.
)h% Ban4s ar% !ist%d n%ith%r as ;0ho!!. o0n%d; go&%rn+%nt ,or$orations und%r 31 '.S.5. 8 896 nor as ;+i=%d o0n%rshi$;
,or$orations und%r 31 '.S.5. 8 8:6, a "a,tor ,onsid%r%d in %ar! &. 'nit%d Stat%s, 230 F.2d 293 610th 5ir. 19:67, 0hi,h h%!d that
th% 5i&i! Air atro! is not a "%d%ra! ag%n,. und%r th% A,t. 5!os%!. r%s%+2!ing th% status o" th% F%d%ra! 3%s%r&% Ban4, th% 5i&i! Air
atro! is a nonA$ro"it, "%d%ra!!. ,hart%r%d ,or$oration organi@%d to s%r&% th% $u2!i, 0%!"ar%. But 2%,aus% 5ongr%ss> ,ontro! o&%r
th% 5i&i! Air atro! is !i+it%d and th% ,or$oration is not d%signat%d as a 0ho!!. o0n%d or +i=%d o0n%rshi$ go&%rn+%nt
,or$oration und%r 31 '.S.5. 88 896 and 8:6, th% ,ourt ,on,!ud%d that th% ,or$oration is a nonAgo&%rn+%nta!, ind%$%nd%nt
%ntit., not ,o&%r%d und%r th% A,t.
Additiona!!., 3%s%r&% Ban4s, as $ri&at%!. o0n%d %ntiti%s, r%,%i&% no a$$ro$riat%d "unds "ro+ 5ongr%ss. 5". ?oddard &. *istri,t o"
5o!u+2ia 3%d%&%!o$+%nt Land Ag%n,., 28/ F.2d 393, 39: 6*.5.5ir.19617, ,%rt. d%ni%d, 366 '.S. 910, 81 S.5t. 108:, 6 L.Ed.2d
23: 619617 6,ourt h%!d !and r%d%&%!o$+%nt ag%n,. 0as "%d%ra! ag%n,. "or $ur$os%s o" th% A,t in !arg% $art 2%,aus% ag%n,.
r%,%i&%d dir%,t a$$ro$riat%d "unds "ro+ 5ongr%ss.7
Fina!!., th% Ban4s ar% %+$o0%r%d to su% and 2% su%d in th%ir o0n na+%. 12 '.S.5. 8 391. )h%. ,arr. th%ir o0n !ia2i!it. insuran,%
and t.$i,a!!. $ro,%ss and hand!% th%ir o0n ,!ai+s. In th% $ast, th% Ban4s ha&% d%"%nd%d against tort ,!ai+s dir%,t!., through
$ri&at% ,ouns%!, not go&%rn+%nt attorn%.s, %.g., Ban,o *% Es$ana &. F%d%ra! 3%s%r&% Ban4 o" (%0 Dor4, 119 F.2d 938 62d 5ir.
19907E Cuntington )o0%rs &. Fran4!in (ationa! Ban4, ::9 F.2d 863 62d 5ir. 19//7E Bo!!o0 &. F%d%ra! 3%s%r&% Ban4 o" San
Fran,is,o, 6:0 F.2d 1093 69th 5ir. 19817, and th%. ha&% n%&%r 2%%n r%Buir%d to s%tt!% tort ,!ai+s und%r th% ad+inistrati&%
$ro,%dur% o" 28 '.S.5. 8 26/2. )h% 0ai&%r o" so&%r%ign i++unit. ,ontain%d in th% A,t 0ou!d th%r%"or% a$$%ar to 2% ina$$osit% to
th% Ban4s 0ho ha&% not histori,a!!. ,!ai+%d or r%,%i&%d g%n%ra! i++unit. "ro+ 1udi,ia! $ro,%ss.
)h% 3%s%r&% Ban4s ha&% $ro$%r!. 2%%n h%!d to 2% "%d%ra! instru+%nta!iti%s "or so+% $ur$os%s. In 'nit%d Stat%s &. Co!!ingsh%ad,
6/2 F.2d /:1 69th 5ir. 19827, this ,ourt h%!d that a F%d%ra! 3%s%r&% Ban4 %+$!o.%% 0ho 0as r%s$onsi2!% "or r%,o++%nding
%=$%nditur% o" "%d%ra! "unds 0as a ;$u2!i, o""i,ia!; und%r th% F%d%ra! Bri2%r. Statut%. )hat statut% 2road!. d%"in%s $u2!i, o""i,ia!
to in,!ud% an. $%rson a,ting ;"or or on 2%ha!" o" th% ?o&%rn+%nt.; S. 3%$. (o. 2213, 8/th 5ong., 2nd S%ss. 619627, r%$rint%d in
619627 '.S. 5od% 5ong. F Ad. (%0s 38:2, 38:6. S%% 18 '.S.5. 8 2016a7. )h% t%st "or d%t%r+ining status as a $u2!i, o""i,ia! turns
on 0h%th%r th%r% is ;su2stantia! "%d%ra! in&o!&%+%nt; in th% d%"%ndant>s a,ti&iti%s. 'nit%d Stat%s &. Co!!ingsh%ad, 6/2 F.2d at
/:9. In ,ontrast, und%r th% F)5A, "%d%ra! !ia2i!it. is narro0!. 2as%d on traditiona! ag%n,. $rin,i$!%s and do%s not n%,%ssari!. !i%
0h%n th% tort"%asor si+$!. 0or4s "or an %ntit., !i4% th% 3%s%r&% Ban4s, 0hi,h $%r"or+ i+$ortant a,ti&iti%s "or th% go&%rn+%nt.
)h% 3%s%r&% Ban4s ar% d%%+%d to 2% "%d%ra! instru+%nta!iti%s "or $ur$os%s o" i++unit. "ro+ stat% ta=ation. F%d%ra! 3%s%r&%
Ban4 o" Boston &. 5o++ission%r o" 5or$orations F )a=ation, 999 F.2d 60 61st 5ir. 19/97, a"t%r r%+and, :20 F.2d 221 61st 5ir.
19/:7E F%d%ra! 3%s%r&% Ban4 o" Ginn%a$o!is &. 3%gist%r o" *%%ds, 288 Gi,h. 120, 289 (.W. 66/ 619397. )h% t%st "or d%t%r+ining
0h%th%r an %ntit. is a "%d%ra! instru+%nta!it. "or $ur$os%s o" $rot%,tion "ro+ stat% or !o,a! a,tion or ta=ation, ho0%&%r, is &%r.
2road< 0h%th%r th% %ntit. $%r"or+s an i+$ortant go&%rn+%nta! "un,tion. F%d%ra! Land Ban4 &. Bis+ar,4 Lu+2%r 5o., 319 '.S.
9:, 102, 62 S.5t. 1, :, 86 L.Ed. 6: 619917E 3ust &. Johnson, :9/ F.2d 1/9, 1/8 69th 5ir. 19/97, ,%rt. d%ni%d, 999 '.S. 969, 100 S.5t.
9:0, 62 L.Ed.2d 3/6 619/97. )h% 3%s%r&% Ban4s, 0hi,h "urth%r th% nation>s "is,a! $o!i,., ,!%ar!. $%r"or+ an i+$ortant
go&%rn+%nta! "un,tion.
%r"or+an,% o" an i+$ortant go&%rn+%nta! "un,tion, ho0%&%r, is 2ut a sing!% "a,tor and not d%t%r+inati&% in tort ,!ai+s a,tions.
F%d%ra! 3%s%r&% Ban4 o" St. Louis &. G%tro,%ntr% I+$ro&%+%nt *istri,t, 6:/ F.2d 183, 18: n.2 68th 5ir. 19817, 5". %ar! &. 'nit%d
Stat%s, 230 F.2d 293 610th 5ir. 19:67. Stat% ta=ation has traditiona!!. 2%%n &i%0%d as a gr%at%r o2sta,!% to an %ntit.>s a2i!it. to
$%r"or+ "%d%ra! "un,tions than %=$osur% to 1udi,ia! $ro,%ssE th%r%"or% ta= i++unit. is !i2%ra!!. a$$!i%d. F%d%ra! Land Ban4 &.
ridd., 299 '.S. 229, 23:, :: S.5t. /0:, /08, /9 L.Ed. 1908 619::7. F%d%ra! tort !ia2i!it., ho0%&%r, is 2as%d on traditiona! ag%n,.
$rin,i$!%s and thus d%$%nds u$on th% $rin,i$a!>s a2i!it. to ,ontro! th% a,tions o" his ag%nt, and not si+$!. u$on 0h%th%r th%
%ntit. $%r"or+s an i+$ortant go&%rn+%nta! "un,tion. S%% 'nit%d Stat%s &. -r!%ans, 92: '.S. 80/, 81:, 96 S.5t. 19/1, 19/6, 98
L.Ed.2d 390 619/67, 'nit%d Stat%s &. Logu%, 912 '.S. :21, :2/A28, 93 S.5t. 221:, 2219, 3/ L.Ed.2d 121 619/37.
Brin4s In,. &. Board o" ?o&%rnors o" th% F%d%ra! 3%s%r&% S.st%+, 966 F.Su$$. 116 6*.*.5.19/97, h%!d that a F%d%ra! 3%s%r&% Ban4
is a "%d%ra! instru+%nta!it. "or $ur$os%s o" th% S%r&i,% 5ontra,t A,t, 91 '.S.5. 8 3:1. 5iting F%d%ra! 3%s%r&% Ban4 o" Boston and
F%d%ra! 3%s%r&% Ban4 o" Ginn%a$o!is, th% ,ourt a$$!i%d th% ;i+$ortant go&%rn+%nta! "un,tion; t%st and ,on,!ud%d that th% t%r+
;F%d%ra! ?o&%rn+%nt; in th% S%r&i,% 5ontra,t A,t +ust 2% ;!i2%ra!!. ,onstru%d to %""%,tuat% th% A,t>s hu+anitarian $ur$os%s o"
$ro&iding +ini+u+ 0ag% and "ring% 2%n%"it $rot%,tion to indi&idua!s $%r"or+ing ,ontra,ts 0ith th% "%d%ra! go&%rn+%nt.; Id.
288 Gi,h. at 120, 289 (.W.2d 66/.
Su,h a !i2%ra! ,onstru,tion o" th% t%r+ ;"%d%ra! ag%n,.; "or $ur$os%s o" th% A,t is un0arrant%d. 'n!i4% in Brin4s, $!ainti""s ar%
not 0ithout a "oru+ in 0hi,h to s%%4 a r%+%d., "or th%. +a. 2ring an a$$ro$riat% stat% tort ,!ai+ dir%,t!. against th% Ban4E and
i" su,,%ss"u!, th%ir $ros$%,ts o" r%,o&%r. ar% 2right sin,% th% institutions ar% 2oth high!. so!&%nt and a+$!. insur%d.
For th%s% r%asons 0% ho!d that th% 3%s%r&% Ban4s ar% not "%d%ra! ag%n,i%s "or $ur$os%s o" th% F%d%ra! )ort 5!ai+s A,t and 0%
a""ir+ th% 1udg+%nt o" th% distri,t ,ourt.
AFFI3GE*.
L )h% Conora2!% ?us J. So!o+on, S%nior *istri,t Judg% "or th% *istri,t o" -r%gon, sitting 2. d%signation
<our(e: http:@@ftp%resour(e%org@(ourts%gov@(@F"@?=#@?=#%F"d%">F%=#GLF#L%html
*residents of the Federal Reserve Bank of New York
BenKamin $trong
President of the 4ederal
"eser(e Bank of =ew
&ork (,-,+-,-69)
@eorge L. arrison
B.0. &ale ,-,<
"eser(e Bank of =ew
&ork (,-69-,-+<)5
President of =ew &ork
Life 8nsurance 1o.
(,-+,-,-+9)
0llan $#roul
"eser(e Bank of =ew
&ork (,-+,-,->/)
0lfred ayes
B.0. &ale ,-.<
"eser(e Bank of =ew
&ork (,->/-,-:>)
Paul 0. Aolcker
0.B. Princeton ,-+-
"eser(e Bank of =ew
&ork (,-:>-,-:-)5
1hairman of the 4ederal
"eser(e (,-:--,-9:)
0nthony *. $olomon
B.0. '. of 1hicago ,-+,
"eser(e Bank of =ew
&ork (,-9<-,-9+)
B. @erald 1orrigan
"eser(e Bank of =ew
&ork (,-9>-,--.)
William ;. *cDonough
"eser(e Bank of =ew
&ork (,--.-6<<.)
!imothy 4. @eithner
0.B. Dartmouth ,-9.
"eser(e Bank of =ew
&ork (6<<.-6<<-)5
'.$. $ecretary of the
!reasury (6<<--6<,.)
William 1. Dudley
"eser(e Bank of =ew
&ork (6<<--#resent)
4ederal "eser(e Bank of =ew &ork in =ew &ork 1ity (Photo7 4lickr)
*rominent )ire(tors of the Federal Reserve Bank of New York

Chairmen: *ierre 'ay! Jwen )% Young! Beardsley Ruml! *hilip )% Reed! +l1ert C% Ni(kerson! Roswell C% .ilpatri(

Chairmen: 'ohn Brademas! 'ohn R% Jpel! Cyrus ,an(e! Mauri(e R% .reen1erg! 'ohn C% &hitehead! *eter .% *eterson

Class + )ire(tors: &inthrop &% +ldri(h! )avid Ro(kefeller! Cewis T% *reston! &alter ,% <hipley! <anford 6% &eill! 'amie )imon

)ire(tors: Charles -% Mit(hell! +l1ert 7% &iggin! 7oward C% <heperd! 7enry C% +le3ander! .eorge Champion! Ri(hard <% Fuld 'r%

)ire(tors: &illiam B% Thompson! .eorge F% *ea1ody! &illiam 7% &oodin! Thomas '% &atson! 'ohn F% &el(h 'r%! .erald M% Cevin
*rominent )ire(tors of the Federal Reserve Bank of New York
Pierre ;ay 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-,+-,-6/)
1hairman of the board of 4iduciary !rust 1om#any M=ew &ork 1ityN (,-.<-,-+>)
Fwen D. &oung 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-.9-,-+<)
De#uty 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-6:-,-.:)
1hairman of the board of @eneral Blectric 1o. (,-66-,-.-, ,-+6-,-++)
Beardsley "uml 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-+,-,-+/)
!reasurer of ".. *acy % 1o. M*acy)s de#artment storeN (,-.+-,-+>)
1hairman of the board of ".. *acy % 1o. (,-+>-,-+-)
Phili# D. "eed 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-/<-,-/>)
1hairman of the board of @eneral Blectric 1o. (,-+<-,-+6, ,-+>-,->9)
0lbert L. =ickerson 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-/--,-:,)
1hairman and 1BF of $ocony-*obil Fil 1o. (later *obil Fil 1or#.) (,-/.-,-/-)
"oswell L. @il#atric 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-:6-,-:>)
Partner of 1ra(ath, $waine % *oore Mlaw firm in =ew &ork 1ityN (,-.,-,->,, ,->.-,-/,, ,-/+-,-::)
;ohn Brademas 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-9.-,-9:)
President of =ew &ork 'ni(ersity (,-9,-,--,)5 '.$. 1ongressman (D-8ndiana, ,->--,-9,)
;ohn ". F#el 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-9:-,-99)
1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-9,-,-9/)
1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-9:-,-99)
1hairman of the board of 8nternational Business *achines 1or#. (8B*) (,-9.-,-9/)
1yrus ". Aance 1hairman of the 4ederal "eser(e Bank of =ew &ork (,-9--,--,)
Partner of $im#son, !hacher % Bartlett Mlaw firm in =ew &ork 1ityN (,->/-,-/,, ,-/:-,-::, ,-9<-,--9)
*aurice ". @reenberg 1hairman of the 4ederal "eser(e Bank of =ew &ork (,--+-,-->)
1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-9--,-->)
1hairman and 1BF of 0merican 8nternational @rou# (,-9--6<<>)
;ohn 1. Whitehead 1hairman of the 4ederal "eser(e Bank of =ew &ork (,--/-,---)
1o-1hairman of @oldman, $achs % 1o. (,-:/-,-9+)5 1hairman of 0B0 8n(estors 8nc. (,-9--,--:)
Peter @. Peterson 1hairman of the 4ederal "eser(e Bank of =ew &ork (6<<<-6<<.)
1hairman and 1BF of Lehman Brothers (,-:.-,-::) and Lehman Brothers Euhn Loeb % 1o. (,-::-,-9+)
$enior 1hairman of !he Blackstone @rou# (,-9>-#resent)
1hairman of the 1ouncil on 4oreign "elations (,-9>-6<<:)
Winthro# W. 0ldrich 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-+:-,-+-)
1hairman of the board of 1hase =ational Bank (,-.+-,->.)
Da(id "ockefeller 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (;anuary ,, ,-:.-December .,, ,-:/)
1hairman of the board of 1hase *anhattan Bank (,-/--,-9,)
1hairman of the 1ouncil on 4oreign "elations (,-:<-,-9>)5 1o-4ounder of the !rilateral 1ommission (,-:.)
Lewis !. Preston 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-9/-,-99)
1hairman and 1BF of ;.P. *organ % 1o. M*organ @uaranty !rust 1o. of =ew &orkN (,-9<-,-9-)
Walter A. $hi#ley 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,--9-6<<<)
1hairman of the board of 1hase *anhattan 1or#. (,--/-,---)
$anford 8. Weill 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (6<<,-6<</)
1hairman of the board of 1itigrou# (,--9-6<</)
;amie Dimon 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (6<<:-6<,6)
1hairman of the board of ;P *organ 1hase (6<<:-#resent)
1harles B. *itchell 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-69-,-.,)
1hairman of the board of =ational 1ity Bank of =ew &ork (,-6--,-..)
0lbert . Wiggin 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-.6-,-..)
1hairman of the board of 1hase =ational Bank (,-,9-,-.<)
oward 1. $he#erd 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,->/-,->9)
1hairman of the board of =ational 1ity Bank of =ew &ork Mlater 1itibankN (,->6-,->-)
enry 1. 0le3ander 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,->--,-/,)
1hairman of ;.P. *organ % 1o. (,->>-,->-)
1hairman of the board of *organ @uaranty !rust 1o. of =ew &ork (,->--,-/>)
@eorge 1ham#ion 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-/6-,-/+)
1hairman of the board of 1hase *anhattan Bank (,-/,-,-/-)
William B. !hom#son 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-,+-,-,-)
@eorge 4. Peabody 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-,+-,-6,)
William . Woodin 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (0#ril ,, ,-6:-*arch ., ,-..)
$ecretary of the !reasury (,-..)
!homas ;. Watson 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-..-,-+<)
1hairman (,-+--,->/) and President (,-,+-,-+-) of 8nternational Business *achines 1or#. (8B*)
"ichard $. 4uld ;r. 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (6<<6-6<<9)
1hairman and 1BF of Lehman Brothers (,--+-6<<9)
@erald *. Le(in 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (=o(ember 6<<,-6<<.)
1hairman and 1BF of !ime Warner, 8nc. (,--.-6<<6)
;ohn 4. Welch ;r. 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-9>-,--<)
1hairman and 1BF of @eneral Blectric 1o. (,-9,-6<<,)
Federal Reserve )istri(ts and Their Bran(h Territories

4ederal "eser(e chairmen Bugene *eyer (left, *ay .,, ,-.6) and *arriner $. Bccles (right, 4ebruary ,<, ,-./) a##ear on the front co(er of
Time maga2ine during the @reat De#ression.

4ederal "eser(e chairmen William *c1hesney *artin ;r. (left, $e#tember ,<, ,->/) and 0rthur 4. Burns (right, ;une ,, ,-:<) a##ear on the
front co(er of Time maga2ine.

4ederal "eser(e chairmen Paul Aolcker (left, *arch 9, ,-96) and Ben Bernanke (right, December 69, 6<<-) a##ear on the front co(er of Time
maga2ine.

4ederal "eser(e 1hairman 0lan @reens#an a##ears on the front co(er of !ime maga2ine (left, =o(ember ,<, ,--:) and (with "obert B. "ubin
and Lawrence $ummers (right, 4ebruary ,>, ,---).
)h% Esta2!ish+%nt o" th% F%d%ra! 3%s%r&%
!he 4ederal "eser(e $ystem headDuarters in Washington D.1.
Frigins of the 4ederal "eser(e $ystem
!he Panic of ,-<: brought the 0merican economy into a recession. 8n ,-<9, members of 1ongress created a =ational *onetary 1ommission
to e3amine the Panic of ,-<:. '.$. $enator =elson 0ldrich was a##ointed as the 1hairman of the =ational *onetary 1ommission. ($enator
0ldrich)s grandsons are Da(id "ockefeller and =elson "ockefeller.) 8n =o(ember ,-,<, $enator 0ldrich, along with Paul Warburg, enry P.
Da(ison, 4rank Aanderli#, BenKamin $trong, and 0bram Piatt 0ndrew, tra(eled secretly to ;ekyll 8sland, an offshore island near $a(annah,
@eorgia, to write a bill establishing a central bank. !he si3 men de#arted from =ew ;ersey by train at night to ;ekyll 8sland on =o(ember 66,
,-,<5 the secret meeting on ;ekyll 8sland lasted a week.
8n ,-,6, $enator 0ldrich #ro#osed a bill, known as the 0ldrich Bill, establishing a central bank. !he 0ldrich Bill, a "e#ublican bill, failed to #ass
in the Democratic-dominated 1ongress5 after the election of ,-,6, the Democratic-dominated 1ongress #ro#osed an Oalternati(eP bill, known
as the Fwen-@lass Bill, establishing the 4ederal "eser(e. ;.P. *organ, ;acob $chiff, and other Wall $treet bankers financed the #residential
cam#aigns of Woodrow Wilson (Democratic Party), William oward !aft ("e#ublican Party), and !heodore "oose(elt (Progressi(e Party) in
,-,6. !he '.$. ouse of "e#resentati(es a##ro(ed the 4ederal "eser(e 0ct on December 66, ,-,. by a (ote of 6-9 in fa(or, /< against, and
:/ absent5 the '.$. $enate a##ro(ed the 4ederal "eser(e 0ct on December 6., ,-,. by a (ote of +. in fa(or, 6> against, and 6: absent.
'.$. President Woodrow Wilson signed the 4ederal "eser(e 0ct at /7<6 P.*. (Bastern standard time) on December 6., ,-,. (two days before
1hristmas) using Ofour gold #en.P
!he 4ederal "eser(e $ystem is a central bank that is owned and controlled by maKor #ri(ate banks of =ew &ork 1ity and London. !he 4ederal
"eser(e $ystem is neither owned nor controlled by the '.$. go(ernment. !he federal go(ernment)s role in the 4ederal "eser(e is limited to
a##ointments made by the President of the 'nited $tates and confirmations made by 1ongress. 0lthough the '.$. 1onstitution states that
O1ongress shall ha(e Power !o coin *oney, regulate the Aalue thereofP, it is the 4ederal "eser(e that Oha(e Power !o coin *oney, regulate
the Aalue thereofP. !he 4ederal "eser(e e3ercises its OPower !o coin *oneyP by #roducing bank notes, called O4ederal "eser(e =otesP,
which are backed by the OfaithP of the shareholders of the 4ederal "eser(e.
Federal Reserve head5uarters in &ashington! )%C%
Federal Reserve head5uarters in &ashington! )%C%
Prelude to the 4ederal "eser(e7 !he Panic of ,-<:
Wall $treet in =ew &ork 1ity during the Panic of ,-<:
;.P. *organ talks to another banker in Fctober ,-<:, Kust before the Panic.
;.P. *organ % 1o. #artner enry P. Da(ison at his desk. (Photo7 arris % Bwing 1ollectionCLibrary of 1ongress)

New York Bank Note Company protest in New York City in F>
The Godfathers of the #ederal $eserve

Paul *. Warburg (left) and 4rank 0. Aanderli# (right)

Left to right7 0bram Piatt 0ndrew, $en. =elson W. 0ldrich, BenKamin $trong, enry P. Da(ison
1o-4ounders and @odfathers of the 4ederal "eser(e $ystem
Paul Warburg (OPaulP) Q Aice 1hairman of the 4ederal "eser(e (,-,/-,-,9)5 *ember of the Board of @o(ernors of the 4ederal
"eser(e (,-,+-,-,9)5 Director of the 1ouncil on 4oreign "elations (,-6,-,-.6)5 Partner of Euhn, Loeb % 1o. M=ew &ork 1ityN
(,-<6-,-,+)5 @erman-born ;ewish banker from amburg, @ermany
4rank 0. Aanderli# (OFr(illeP) Q President of =ational 1ity Bank M=ew &ork 1ityN (,-<--,-,-)5 0ssistant $ecretary of the !reasury
(,9-:-,-<,)5 1hairman of the Bconomic 1lub of =ew &ork (,-,/-,-,9)
BenKamin $trong (OBenP) Q @o(ernor of the 4ederal "eser(e Bank of =ew &ork (,-,+-,-69)5 President of Banker)s !rust of =ew
&ork (,-,+)5 Aice President of Banker)s !rust of =ew &ork (,-<--,-,+)5 *ember of the 1ouncil on 4oreign "elations
0bram Piatt 0ndrew (O0beP) Q '.$. ouse of "e#resentati(es (,-6,-,-./, "e#ublican-*assachusetts)5 0ssistant $ecretary of
the !reasury (,-,<-,-,6)5 Director of '.$. *int (,-<--,-,<)
=elson W. 0ldrich (O=elsonP) Q '.$. $enator (,99,-,-,,, "e#ublican-"hode 8sland)5 1hairman of the =ational *onetary
1ommission (,-<9-,-,6)5 Da(id "ockefeller)s grandfather5 former Aice President =elson 0. "ockefeller)s grandfather5 father of
former 1hase =ational Bank chairman Winthro# W. 0ldrich
enry P. Da(ison (OWilburP) Q Partner of ;.P. *organ % 1o. M=ew &ork 1ityN5 father of 180 agent 4. !rubee Da(ison
26n )e(em1er F#H! *aul T&ar1urgU first met +ldri(h when the latter visited Buhn! Coe1 to ask how the Rei(hs1ank issued
treasury 1illsSJn the last day of the year! while merrier souls got ready for New YearEs -ve! *aul sent +ldri(h a proposal for a
uniform (urren(y! showing how (ompetitive hoarding of reserves produ(ed (alamity in 1anking (rises% By early F#=! *aul was
giving spee(hes a1out how the *ani( (ould have 1een averted% +t the time! the Bank of -ngland! the Rei(hs1ank! and the
Ban5ue de Fran(e operated independently of government and their 5uasiGprivate (hara(ter aroused alarm in +meri(a% +lthough
a proponent of a strong (entral 1ank! *aul realiAed that any +meri(an (ounterpart would need popular (onstraints on its power%
Jn May >#! F#=! Congress ena(ted the +ldri(hG,reeland Curren(y Bill! whi(h instantly thrust *aul into the hurlyG1urly of
+meri(an politi(s! for the law mandated a National Monetary Commission to investigate foreign 1anking systems and file a
report with Congress% The (hairman would 1e <enator Nelson +ldri(h% Ca(king the re5uisite te(hni(al knowledge! the senator
(ame to lean heavily upon *aulEs e3pertise% &hen +ldri(h and other (ommission mem1ers sailed for -urope that summer!
T'a(o1U <(hiff provided introdu(tory letters to open doors in Berlin and later in Tokyo% 6n New York that fall! +ldri(h held
hearings at the Metropolitan Clu1 and asked *aul to testify% +fterward! he drew him aside for an intimate teteGaGtete at a little
ta1le% *aul was thunderstru(k to find that +ldri(h had not only read his essays 1ut now (ategori(ally endorsed a (entral 1ank%9
: The Warburgs 1y Ron Chernow! p% >"G>>

26n Novem1er F#! TNelsonU +ldri(h! *aul T&ar1urgU! and four other e3perts sneaked off to dis(uss 1ank reform at a se(ret
hideaway on 'ekyll 6sland off the .eorgia (oast% &ith )emo(rats now in (ontrol of Congress and *rogressives railing against
&all <treet! the 1ankers had to travel in(ognito! lest they 1e a((used of hat(hing a (a1al% + favorite haunt of &all <treet
ty(oons! 'ekyll 6sland was deserted in Novem1er and thus was a natural (hoi(e for a (landestine rendeAvous% 6n 'ersey City!
*aul and his (o(onspirators! outfitted as du(k hunters! 1oarded a private railroad (ar% Never having shot a 1ird! *aul had to
1orrow a rifle to parti(ipate in the mas5uerade% The men traveled 1y night! with the 1linds tightly drawn! and they (alled ea(h
other 1y their first names% /7en(e! they were (hristened The First Name Clu1%0 &hen they got off the train in Brunswi(k!
.eorgia! they spoke loudly and ostentatiously a1out sport% +pparently! they were rather amateurish a(tors! for the stationmaster
knew at on(e who they were and said suspi(ious reporters had 1een snooping a1out% For a long time! the (onspirators wouldnEt
admit the meeting had even o((urred% &riting in F"=! *aul still a1ided 1y the oath of se(re(y% 2Though eighteen years have
sin(e gone 1y! 6 do not feel free to give a des(ription of this most interesting (onferen(e (on(erning whi(h <enator +ldri(h
pledged all parti(ipants to se(re(y%9 )uring ten days at 'ekyll 6sland! *aulEs lowGkey 1ut for(eful personality stood out as the si3
men de1ated at a round ta1le% &hen a (ause engaged him! *aul was tena(ious and he semihumorously du11ed himself a
2fanati(9 a1out 1ank reform% +ldri(h wanted a (entral 1ank (ontrolled 1y 1ankers%9
: The Warburgs 1y Ron Chernow! p% >>

Left #hoto7 '.$. $enator "obert Latham Fwen (Democratic Party-Fklahoma, ,-<:-,-6>)
1enter #hoto7 William @. *c0doo, $ecretary of the !reasury (,-,.-,-,9) and President Woodrow Wilson)s son-in-law
"ight #hoto7 1arter @lass, '.$. 1ongressman (Democratic Party-Airginia, ,-<6-,-,9), $ecretary of the !reasury (,-,9-,-6<)
and '.$. $enator (Democratic Party-Airginia, ,-6<-,-+/)
1arter @lass and "obert Latham Fwen were #rimary s#onsors of the 4ederal "eser(e 0ct (formerly Fwen-@lass bill) that would
be signed by President Woodrow Wilson in December ,-,.. "obert Latham Fwen re#udiated his su##ort for the 4ederal
"eser(e later and s#ent the rest of his life condemning the 4ederal "eser(e.
?x+erpts of the arti+le @From Farm ,o! to Finan+ierA written b! Frank 8. 9an#erlip an# ,o!#en .parkes
&ublishe# on Februar! ), ()3B in the Saturday Evening Post
+ <e(ret -3pedition to 'ekyl Tsi(U 6sland
)-<*6T- my views a1out the value to so(iety of greater pu1li(ity for the affairs of (orporations! there was an o((asion! near the (lose
of F#! when 6 was as se(retive : indeed! as furtive : as any (onspirator% None of us who parti(ipated felt that we were (onspirators8
on the (ontrary! we felt we were engaged in a patrioti( work% &e were trying to plan a me(hanism that would (orre(t the weaknesses
of our 1anking system as revealed under the strains and pressures of the pani( of F#H% 6 do not feel it is any e3aggeration to speak of
our se(ret e3pedition to 'ekyl Tsi(U 6sland as the o((asion of the a(tual (on(eption of what eventually 1e(ame the Federal Reserve
<ystem%
Congress! after F#H! had realiAed that something had to 1e done to strengthen our 1anking system% To provide itself with a 1etter
understanding of the pro1lem! there had 1een appointed a 4oint (ommission of twentyGfive mem1ers of 1oth houses! under the
(hairmanship of <enator +ldri(h! who was! on the whole! the 1estGinformed and the most dominant man in Congress on finan(ial
measures% This group had gone to -urope! had interviewed 1ankers and the heads of the (entral 1anks! and then! after a pleasant
summer! they had returned to the ;nited <tates without a definite idea of what they ought to do% <enator +ldri(h did not know what
they ought to do! either! although he really had 1een working hard for two years%
For me the 1eginning of the adventure! 6 should think! was a letter that (ame from Mr% <tillman in *aris% 7e said he had 4ust had a long
(onferen(e with <enator Nelson +ldri(h : Vivil in our (ode : who was very keen to get to work on 1anking and (urren(y revision%
+ldri(h! Mr% <tillman reported! regretted that 7enry )avison! of '% *% Morgan K Co%! and 6 had 1een una1le to 4oin him in -urope
during the summer8 he felt that over there we might have had plenty of time for our dis(ussions! and 1een free from interruptions% 6n a
moment of entire (andor he would have said! 2free from reporters%9 Mr% <tillman said he had told Mr% +ldri(h that freedom from
interruptions was essential! 1ut that it (ould 1e a((omplished 1y getting )avison and me down to &arwi(k : his pla(e in Rhode 6sland
: without anyoneEs knowing of it% That was Mr% +ldri(hIs plan as he left *aris% Mr% <tillman wrote me that 6 should make everything
else su1servient to giving my whole time and thought to a thorough (onsideration of the su14e(t% 7e said that +ldri(h was persuaded
that he (ould a((omplish more 1y getting out of the <enate! so as to put the work of revision on a nonpartisan 1asis% Mr% <tillman
e3pressed to me his fear that after revision the 1anks might not 1e so well off% 7e wrote that from that time on )avison and 6 ought to
follow the matter very (losely! and keep in tou(h with +ldri(h% +ldri(h! 6 was informed! 1elieved in some sort of (entraliAation! 1ut
not in the esta1lishment of a (entral 1ank su(h as Fran(e had% Mr% <tillman also reported to me that in his talk with <enator +ldri(h he
himself had not e3pressed any views! e3(ept as he had impressed on the senator his 1elief in the ne(essity of not 1eing too mu(h
influen(ed 1y 2our &all <treet point of view%9
But would the ele(torate have 1elieved that? 6 5uestion their a1ility to do so% 'ust to give you a faint idea: <enator +ldri(h was the
fatherGinGlaw of 'ohn )% Ro(kefeller! 'r%! and himself a very ri(h man% Jn(e 6 had written to &oodrow &ilson at *rin(eton! inviting
him to speak at a dinner% &ishing to impress him with the importan(e of the o((asion! 6 had mentioned that <enator +ldri(h also had
1een invited to speak% My friend )o(tor &ilson had astonished me 1y replying that he (ould not 1ring himself to speak on the same
platform with <enator +ldri(h% 7e did (ome and make a spee(h! however! after 6 had 6 reported that Mr% +ldri(hEs health would
prevent him from appearing% Now then! fan(y what sort of headlines might have appeared over a story that +ldri(h was (onferring
a1out new money legislation with a Morgan partner and the president of the 1iggest 1ank%
Jn J(to1er "=! F#! 6 wrote to Mr% <tillman in *aris: 2<enator +ldri(h met with what (ame very near 1eing a severe! if not fatal!
automo1ile a((ident% You pro1a1ly have seen the report of it in the papers% 7e was pretty well 1ruised! having (uts on ea(h side of his
fa(e% 7e is very mu(h 1etter now! 1ut the a((ident has naturally postponed the (onferen(e that was in mind% 7e will 1e a1out in a few
days! and Mrs% 'ohn )%! 'r%! tells me that they do not think there will 1e any serious effe(t from the a((ident%9
Bankers in )isguise
+s the time for the assem1ling of Congress drew near! <enator +ldri(h 1e(ame in(reasingly (on(erned a1out the report he must write
on 1ehalf of the 4oint monetary (ommission8 likewise! there ought to 1e! he knew! a 1ill to present to the new Congress! and none had
1een drafted% This was how it happened that a group of us went with him to the 'ekyl Tsi(U 6sland Clu1 on the (oast of .eorgia%
<in(e it would 1e fatal to <enator +ldri(hEs plan to have it known that he was (alling on any1ody from &all <treet to help him in
preparing his report and 1ill! pre(autions were taken that would have delighted the heart of 'ames <tillman% Those who had 1een asked
to go were 7enry )avison! *aul &ar1urg! Ben <trong! and myself% From &ashington (ame +% *iatt +ndrew! 'r%! who was then an
+ssistant <e(retary of the Treasury! and who now is a mem1er of Congress from Massa(husetts% &e were told to leave our last names
1ehind us% &e were told! further! that we should avoid dining together on the night of our departure% &e were instru(ted to (ome one
at a time and as uno1trusively as possi1le to the railroad terminal on the New 'ersey littoral of the 7udson! where <enator +ldri(hEs
private (ar would 1e in readiness! atta(hed to the rear end of a train for the <outh%
&hen 6 (ame to that (ar! the 1linds were down and only slender threads of am1er light showed the shape of the windows% Jn(e a1oard
the private (ar we 1egan to o1serve the ta1oo that had 1een fi3ed on last names% &e addressed one another as 2Ben!9 2*aul!9
2Nelson!9 2+1e9 : it is +1ram *iatt +ndrew% )avison and 6 adopted even deeper disguises! a1andoning our own first names% Jn the
theory that we were always right! he 1e(ame &il1ur and 6 1e(ame Jrville! after those two aviation pioneers! the &right 1rothers%
6n(identally! for years afterward )avison and 6 (ontinued the pra(ti(e! in (ommuni(ations! and when we were together%
<e(ret Meeting on 'ekyl 6sland
The servants and the train (rew may have known the identities of one or two of us! 1ut they did not know all! and it was the names of
all printed together that would have made our mysterious 4ourney signifi(ant in &ashington! in &all <treet! even in Condon%
)is(overy! we knew! simply must not happen! or else all our time and! effort would 1e wasted% 6f it were to 1e e3posed pu1li(ly that
our parti(ular group had got together and written a 1anking 1ill! that 1ill would have no (han(e whatever of passage 1y Congress% Yet!
who was there in Congress who might have drafted a sound pie(e of legislation dealing with the te(hni(al 1anking pro1lem with whi(h
we were (on(erned? 6ndeed! there were surprisingly few 1ankers! 1esides those of us who had 1een (alled together! who had given the
spe(ial matters under (onsideration any thorough study whatever% Most 1ankers were relu(tant to a((ept any (hange8 .eorge Baker
was%
&e pro(eeded! in the rear room of that private (ar! to get to work as soon as the train was moving% That first dis(ussion of the 1anking
stru(ture and of what ought to 1e done a1out it produ(ed s(raps of ideas as formless as the (ontents of a rag 1ag% -veryone had some
little pie(e of a pro4e(t to throw on the ta1le for dis(ussion! and everyoneEs pet s(heme en(ountered some other fellowEs o14e(tion%
&e had traveled a good many miles ! without making mu(h progress! when 6 told my (ompanions of a pie(e of advi(e! as to the proper
way to (ondu(t a (onferen(e! that had 1een given to me 1y Frank Trum1ull! a dear friend of mine who was then the (hairman of the
1oard of the Chesapeake K Jhio Railway%
2&hat we ought to do first!9 6 said! 2is to set down those things a1out whi(h we are agreed8 then! one 1y one! we (an take up those
things a1out! whi(h we seem to disagree%9
From then on we made swift progress% 6 was appointed amanuensis and in my paleolithi( shorthand re(orded those proposals whi(h we
all were ready to e(ho as we heard them8 of (ourse! we knew that what we simply had to have was a more elasti( (urren(y through a
1ank that would hold the reserves of all 1anks%
&e were taken 1y 1oat from the mainland to 'ekyl Tsi(U 6sland and for a week or ten days were (ompletely se(luded! without any
(onta(t 1y telephone or telegraph with the outside% &e had disappeared from the world onto a deserted island% There were plenty of
(olored servants! 1ut they had no idea who Ben and *aul and Nelson were8 even ,anderlip! or )avison! or +ndrew! would have meant
less than nothing to them% There we worked in a (lu1house 1uilt for people with a taste for lu3ury% The liveGoak trees wear fantasti(
1eards of <panish moss on 'ekyl Tsi(U 6sland8 in Novem1er 1rown leaves make its forests utterly (harming% &ithout our ever stopping
to hunt! deer! turkey and 5uail appeared on the ta1le8 there were pans of oysters not an hour old when they were s(alloped8 there were
(ountry hams with that in(ompara1le flavor that is given to them in the <outh% &e were working so hard that we ate enormously% &e
worked morning! noon and night%
&e put in the most intense period of work that 6 have ever had% <ometimes )avison and <trong would 1e up at day1reak to get a
horse1a(k ride! or a swim 1efore 1reakfast! 1ut right after 1reakfast the si3 of us would gather around the ta1le and resume where our
dis(ussion had ended the previous midnight% &e stu(k to the plan of putting down on paper what we agreed upon8 there was no 1a(kG
tra(king! no wrangling% 7arry )avison was a splendid person to prevent wrangles in any (ompany% &ar1urg! the 1estGe5uipped man
there in an a(ademi( sense! was so intense and apparently felt a little antagonism toward +ldri(h that some of our moments of strain
might have developed into real hindran(e had it not 1een for )avison% +lways he (ould 1e (ounted on to (ra(k a 4oke 4ust at the right
moment to ease a strain% No telephones rang! none (ould 1other us to ask for an opinion of the market! there were no dire(torsE
meetings! no interruptions whatever% Thanksgiving o((urred during that week! and we ate wild turkey with oyster stuffing and went
right 1a(k to work% &e gave! ea(h of us! every 1it of our mental energy to the 4o1! and 6 en4oyed that period as 6 never have en4oyed
anything else% 6 lived during those days on 'ekyl Tsi(U 6sland at the highest pit(h of intelle(tual awareness that 6 have ever e3perien(ed%
6t was entirely thrilling%
Colla1orating with +ldri(h
+s we dealt with 5uestions 6 re(orded our agreements in that shorthand 6 had first pra(ti(ed with (halk on the tail sto(k of my lathe
1a(k in +urora% 6f it was to 1e a (entral 1ank! how was it to 1e owned : 1y the 1anks! 1y the .overnment! or 4ointly? &hen we had
fi3ed upon 1ank ownership and 4oint (ontrol! we took up the politi(al pro1lem of whether it should 1e a num1er of institutions or only
one% <hould the rate of interest 1e the same for the whole nation! or should it 1e higher in a (ommunity that was e3panding too fast
and lower in another that was lagging? <hould it restri(t its servi(es to 1anks? &hat openGmarket operations should 1e engaged in?
That was the sort of 5uestions we dealt with! and finally! at the end of our week! we had whipped into shape a 1ill that we felt!
pridefully! should 1e presented to Congress% +s 6 re(all it &ar1urg had some o14e(tions! 1ut we were in su1stantial agreement on the
measure we had (reated% &e returned to the North as se(retly as we had gone <outh% 6t was agreed that <enator +ldri(h would present
the 1ill we had drafted to the <enate% 6t 1e(ame known to the (ountry as the +ldri(h *lan% +ldri(h and +ndrew left us at &ashington!
and &ar1urg! )avison! <trong and 6 returned to New York%
Congress was a1out to meet! 1ut on a <aturday we got word in New York that <enator +ldri(h was ill : too ill to write an appropriate
do(ument to a((ompany his plan% Ben <trong and 6 went on to &ashington and together we prepared that report% 6f what we had done
then had 1een made known pu1li(ly! the effort would have 1een denoun(ed as a pie(e of &all <treet (hi(anery! whi(h it (ertainly was
not% +ldri(h never was a man to 1e a mere servant of the soG(alled money interests% 7e was a (ons(ientious! pu1li(Gspirited man% 7e
had (alled on the four of us who had &all <treet addresses 1e(ause he knew that we had for years 1een studying aspe(ts of the
pro1lem with whi(h it was his pu1li( duty to deal%
6 Be(ome a Millionaire
+s is now well known! the 1ill we drafted did not get through Congress% +ldri(h retired from the <enate! and then a )emo(rati(
ma4ority (ame down to &ashington along with &oodrow &ilson! who had defeated *resident Taft% The platform on whi(h he was
ele(ted (ontained a statement e3pressing the opposition of the )emo(rati( *arty to the +ldri(h *lan! or a (entral 1ank% There was a
good deal of dis(ussion a1out that% 6t was (ontended that originally the platform (ommittee had agreed upon the statement: 2&e are
opposed to the +ldri(h *lan for a (entral 1ank%9
Now! although the +ldri(h Federal Reserve plan was defeated when it 1ore the name of +ldri(h! nevertheless its essential points were
all (ontained in the plan that finally was adopted% 6t provided an organiAation to hold the reserves of all mem1er 1anks and arranged
that they would always 1e ready to relieve a mem1er 1ank under pressure 1y redis(ounting loans that it held% The law as ena(ted
provided for twelve 1anks instead of the one whi(h the +ldri(h *lan would have (reated8 1ut the intent of the law was to (oordinate the
twelve through the Federal Reserve Board in &ashington! so that in effe(t they would operate as a (entral 1ank% There (an 1e no
5uestion a1out it: +ldri(h undou1tedly laid the essential! fundamental lines whi(h finally took the form of the Federal Reserve Caw%
!he ;ekyll 8sland 1lub at ;ekyll 8sland, @eorgia, '.$.0., near $a(annah
O1olonelP Bdward *. ouse (left) stands beside '.$. President Woodrow Wilson. Bdward *. ouse was a #olitical #owerbroker from 0ustin,
!e3as, '.$.0. who su##orted the establishment of the 4ederal "eser(e $ystem. Bdward *. ouse, one of the co-founders of the 1ouncil on
4oreign "elations in =ew &ork 1ity, was the author of #hi!ip Dru: Aministrator, a book in which he #romotes communism, socialism, central
bank, and income ta3 in 0merica. O1olonelP Bdward *. ouse was the son of British-born "ebel (1onfederate) blockade runner and
businessman !homas William ouse5 !homas William ouse was the mayor of ouston, !e3as in ,9/6.
Bdward *. ouse su##orted the establishment of the League of =ations while meeting with Buro#ean #olitical leaders at the Paris Peace
1onference. Woodrow Wilson once said7 @Cr. House is m! se+on# personalit!. He is m! in#epen#ent self. His thoughts an# mine are
one. Df D were in his pla+e D woul# #o Eust as he suggeste#... Df an!one thinks he is refle+ting m! opinion b! whate4er a+tion he takes,
the! are wel+ome to the +on+lusion.A (p.((=, Chapter B, 9olume (, The Intimate Papers of Colonel House"
*resident &oodrow &ilson delivers a spee(h in Congress in &ashington! )%C% on +pril =! F>% /*hoto: Ci1rary of Congress0

Ceft photo: 'ekyll 6sland Clu1 in .eorgia in the early F##s
Right photo: + F> < PL 6ndian 7ead .old 7alf -agle (oin produ(ed 1y the ;%<% Mint
/<our(e: http:@@ar(h#F%goldtent%net@"##F@#L@#=@fullgold(rownG>>=GpmGaGfewGs(atteredGthoughts@0
The signing of the Federal Reserve +(t 1y *resident &oodrow &ilson! )e(em1er ">! F>! is depi(ted in this painting 1y
&il1ur .% BurtA! <r% Commissioned 1y the Federal Reserve Bank of +tlanta in F">% The painting is presently on loan to the
Federal Reserve Board of .overnors in &ashington! )%C% from the &oodrow &ilson Birthpla(e Foundation in ,irginia% &hile
more people were present at the a(tual signing of the +(t! Mr% BurtA (hose to pi(ture the following men% Ceft to right: Cindley
M% .arrison! <e(retary of &ar8 'osephus )aniels! <e(retary of the Navy8 Franklin B% Cane! <e(retary of the 6nterior8 +%<%
Burleson! *ostmaster .eneral8 <enator Ro1ert Jwen! Chairman of the <enateEs Banking and Curren(y Committee8 Champ
Clark! <peaker of the 7ouse8 &illiam .% M(+doo! <e(retary of the Treasury8 &oodrow &ilson! *resident of the ;nited <tates8
Representative Carter .lass! Chairman of the 7ouse Committee on Banking and Curren(y8 Representative Js(ar &%
;nderwood8 and &illiam B% &ilson! <e(retary of Ca1or% /Courtesy! &oodrow &ilson Birthpla(e Foundation0
E7auds Glass and +wenF G Cecember 18, /0/= edition of The New York Times

1o#y of international banker ;acob $chiff)s letter from !reasury $ecretary William @. *c0doo (Fctober 69, ,-,.) and letter to '.$. President
Woodrow Wilson (December 6., ,-,.) ($ource7 $aco% &. 'chiff: &is "ife an "etters by 1yrus 0dler, Aolume ,, #age 69:)
2<ele(t )ire(tors For Reserve Bank9 : New York Times /May "H! F$0

*u1lished: May "H! F$8 Copyright W The New York Times
<our(e: http:@@5uery%nytimes%(om@mem@ar(hiveGfree@pdf?resXF$#)>F)>$L)>H>=)))+-#+F$))$#LB=$=)F)>
Name Class C Directors New York Times (October 1, 1914)

*u1lished: J(to1er ! F$8 Copyright W The New York Times
<our(e: http:@@5uery%nytimes%(om@mem@ar(hiveGfree@pdf?resXF=#?->)=$>--#>>+"LHL"C#+F??F)F$?LF?)?CF
2aul "arburg-s (rusade to 3stablish a (entral )ank in the &nited %tates
*aul &ar1urg was an advo(ate for a (entral 1ank in the ;nited <tates and was (hosen 1y *resident &oodrow &ilson to serve as
one of the first mem1ers of the Federal Reserve Board%
Mi(hael +% &hitehouse
May F=F
Whitehouse is staff assistant in the Office of the Secretary at the oard of !o"ernors in Washington# $%&% He has written and
lectured e'tensi"ely on the early history of the Federal (eser"e System and )%S% banking%
6n paying tri1ute re(ently to 7enry &alli(h! late mem1er of the Federal Reserve Board of .overnors! Bankers MagaAine noted
that &alli(h was a su((essor! in more than one respe(t! to *aul &ar1urg% Both of these 1oard mem1ers were emigrants from
.ermanyNand from the higher (ir(les of .erman and -uropean finan(e% &ar1urg! a mem1er of the first Federal Reserve Board!
like &alli(h! was a staun(h advo(ate of sound finan(e% Both! having witnessed the strengths and weaknesses of the -uropean
1anking system during e(onomi( de1a(les as younger men! 1rought their e3perien(e to the ;nited <tates (ommitted to putting
those lessons to use%
6tIs 1een said that .overnor &alli(hIs spee(hes and essays represent one of the 1est finan(ial histories of our time% The same (an
(ertainly 1e said of &ar1urgIs writings! spee(hes and testimony for the period after the turn of the (entury% 7is lifeIs work
(onstitutes perhaps the 1est history of the development of (entral 1anking in the ;nited <tates and mirrors its (ontroversies!
struggles and the final a((omplishment%
6tIs seems fitting then! in this HLth anniversary year of the Federal Reserve <ystem! to look at the life of &ar1urg! one of the
<ystemIs ar(hite(ts and staun(hest proponents%
"arburgHs 3arly )anking 3xperience
*aul &ar1urg was 1orn in 7am1urg in =?=% The offspring of a prominent .erman 1anking family! he had 1een trained in
1anking in the -uropean finan(ial (apitals% +fter attending the university! at age = he 1egan his (areer in Condon where for two
years he worked for a 1anking and dis(ounting firm! followed 1y a short stint with a Condon sto(k1roker% +fter that he moved to
Fran(e and gained additional e3perien(e at the Russian 1ank for foreign trade! whi(h had an agen(y in *aris% 7e then traveled to
6ndia! China and 'apan 1efore returning to 7am1urg to 1e(ome a partner in M%M% &ar1urg K Co%! the family 1anking firm%
&ar1urgIs father had fully e3pe(ted that *aul would take (harge of his familyIs 1anking 1usiness along with his 1rothers +1y
and Ma3! 1ut in =FL &ar1urg married an +meri(an (itiAen! Nina Coe1! an a((omplished violinist! and 1egan to live part of the
year in New York% <i3 years later! at age >$! he left .ermany! took up permanent residen(y in the ;nited <tates! and a((epted a
position as a partner at his fatherGinGlawIs firm! Buhn! Coe1 and Co%None of &all <treetIs most important and respe(ted 1anking
houses% &hile adapting 5ui(kly to his new 1usiness! he still viewed the ;nited <tates through the eyes of a -uropean 1anker and
was literally sho(ked at what he (onsidered the primitive status of 1anking and finan(ial affairs%
6n the early F##s! the nation was suffering from periodi( li5uidity (rises% These (rises or Ypani(sY o((urred 1e(ause the 1anking
system was fettered with a rigid amount of (urren(y that (ould not meet unusual demands! and a system of reserves that
pyramided up to New York% )uring these pani(s 1usinessmen and farmers were una1le to o1tain (redit to finan(e inventories
and the produ(tion and transportation of (rops% The (rises spread a(ross the (ountry and (onverged upon &all <treet! resulting in
plunges in the sto(k market! a large num1er of 1ank and 1usiness failures! and a further shortage of (urren(y%
<u(h phenomena deeply affe(ted &ar1urg! a small unassuming man whose most o1vious physi(al (hara(teristi( was a large
drooping musta(he that gave him more the appearan(e of a tenor in a 1ar1ershop 5uartet than an important international 1anker%
&hile small in stature! however! he was hardly tame or timid in his professional assessment of (onditions then prevailing in his
new (ountry% YThe ;nited <tates!Y he said! Yis at a1out the same point that had 1een rea(hed 1y -urope at the time of the
Medi(is%Y &itnessing firstGhand a period of high interest rates N Ywhere (all money went up to "L and ## per(ent!Y he felt
(ompelled to Ywrite an arti(le on the su14e(t then and there for ThisU own 1enefit%Y
&ar1urg thought it a 1it presumptuous to attempt to edu(ate a (ountry to whi(h he was so new a resident! so when advised 1y an
asso(iate to put the paper aside! he did so and attended to duties at his firm% 7owever! when the same (onditions arose in the
1eginning of F#H! he (ould hold his tongue no longer! and he 1egan to (ir(ulate his writings for the 1enefit of others as well%
The 2anic of /0I>
-arly in F#H! New York Times +nnual Finan(ial Review pu1lished &ar1urgIs first offi(ial reform plan! entitled Y+ *lan for a
Modified Central Bank!Y in whi(h he outlined remedies that he thought might avert pani(s! like the great one that would o((ur
later that year% Furthermore! he identified what he saw as the YevilsY of the system in the ;nited <tates N the Yde(entraliAation
of reserves and the immo1iliAation of T(ommer(ialU paper%Y To remedy this! he advo(ated the development of an +meri(an
dis(ount market and a -uropeanGstyle (ommer(ial paper% This system was 1ased partly on a (on(ept known as the Yreal 1illsY
do(trine! whi(h maintained that the money supply should vary with the shortGterm YlegitimateY needs of 1usiness and (ommer(e%
By allowing 1anks to 1orrow only against shortGterm loans! the real 1ills do(trine! in theory! provided li5uidity through the
dis(ounting /or selling0 of loans and at the same time restri(ted the a1ility of a (entral 1ank to e3pand the supply of money%
&ar1urg also proposed the (reation of a Y(entral reserveY or (entral 1ank that would hold the reserve funds of mem1er 1anks so
that (olle(tive funds (ould 1e made availa1le to a 1ank in need of li5uidity% Both the dis(ounting and reserve (on(ept! he
(ontended! would help make money and (redit more elasti( and keep interest rates sta1le%
The *ani( of F#H hit full stride in J(to1er% The (rash was of su(h severity that it immediately helped fo(us pu1li( awareness on
the pro1lems with the monetary and 1anking system% +lthough the issue of a (entral 1ank was unpopular 1e(ause of its
(onnotations of powerful (entral authority! Congress was now for(ed to a(t% The +ldri(hG,reeland +(t! passed 1y Congress in
May F#=! provided for the issuan(e of emergen(y (urren(y and (reated a 1ipartisan National Monetary Commission to study
(entral 1anking and other alternatives for monetary and 1anking reform% &ar1urg would serve this (ommittee and! through his
efforts for the (ommission! a(hieve an influen(e on su1se5uent proposals for reform%
"arburg eets %en. !ldrich
<en% Nelson +ldri(h of Rhode 6sland! (hairman of the <enate Finan(e Committee! was appointed head of the National Monetary
Commission% 7e divided the (ommission into two groups: one would study the ;< 1anking system and (ompile a report! and the
other! headed 1y the senator himself! would travel to -urope and study the (entral 1anking systems in Condon! *aris and Berlin%
+ldri(h was a known advo(ate of the e3tant 1ondG1a(ked (urren(y arrangement! whi(h provided that 1ank notes (ould only 1e
issued 1y national 1anks on the 1asis of the amount of ;< government 1onds that were held to 1a(k them% 7owever! the ?HG
yearGold +ldri(h! who was (onsidered the most influential figure in Congress on finan(ial matters! was (ommitted to e3ploring
new ideas for reform% 6n F#=! he announ(ed that he would not seek offi(e again and instead would devote his full attention to
the (urren(y and 1anking 5uestion%
Meanwhile! &ar1urg 1egan to enlarge his (ir(le of professional (onta(ts and have his voi(e heard throughout the (ountry%
7owever! the .erman 1anker still didnIt have the ear of the man who mattered most N +ldri(h%
+ldri(h first met &ar1urg 1y (han(e when the senator was preparing for the -uropean trip and visited Buhn! Coe1 and Co% to
gather preliminary material a1out the .erman 1anking system% Following that meeting! the .erman native 1egan writing to
+ldri(h outlining his proposals! 1ut +ldri(h was (ool to &ar1urgIs plan and deferred his (orresponden(e to +% *iatt +ndrew! a
7arvard professor whom +ldri(h had appointed offi(ial se(retary of the National Monetary Commission% +s new ideas on
1anking reform 1egan to (rystalliAe for the senator! +ndrew 1rought the work of &ar1urg to the senatorIs attention again and
soon +ndrew was (orresponding with &ar1urg on 1ehalf of the senator% &ar1urg was asked to write a study on the Ydis(ounting
of (ommer(ial 1illsY for the National Monetary Commission! and 1e(ame an unoffi(ial advisor to the group% 7owever! the
1anker and the senator still were at loggerheads on the 5uestion of what shape the (entral 1ank should take in the ;nited <tates!
and on the issue of dis(ounting (ommer(ial paper%
6n his monograph! YThe )is(ount <ystem in -urope!Y &ar1urg de(lared that the effe(tive utiliAation of the dis(ount poli(y was
one of the most impressive vi(tories for (entral 1anks in -urope during the *ani( of F#H% The only stru(ture that is safe! he
(on(luded! is one that provides for effe(tive (on(entration of (ash reserves and their freest use in (ase of need! ena1ling 1anks!
when ne(essary! to turn into (ash a ma3imum of their assets with a minimum distur1an(e to general (onditions% 7e noted further
that a (entral 1ank is a1le to guard the (ash reserve of the (ountry and a((ommodate nonreserve 1anks 1y a((epting prime
se(urity! like 1ankGa((epted 1ills%
&ar1urg! in the meantime! (ontinued his (ampaign on other fronts% 7e had followed his first New York Times arti(le with a
spee(h at Colum1ia ;niversity on Y+meri(an and -uropean Banking Methods and Banking Cegislation Compared!Y and
privately pu1lished a new! more (omplete proposal for a ;< 1anking system! entitled Y+ Modified *lan for a Central Bank%Y
6n May F#=! the New York Times gave his revised plan prominent (overage% *rimarily! &ar1urg (ontinued to emphasiAe that
the ;nited <tates must finally develop some sort of (entral 1ank system! giving the (ountry an elasti( (urren(y 1ased on modern
(ommer(ial 1ills paya1le in gold: a system similar in prin(iple! if not e3a(tly alike in form! to those of the important -uropean
(entral 1anks% 7e 1elieved that Yno measure that 1ases (urren(y on a long term 1asis like the +ldri(hG,reeland -mergen(y
Curren(y 1ill! /whi(h allowed 1anks in regional (urren(y asso(iations to use their aggregate 1ank 1alan(es as the 1asis for the
issuan(e of (urren(y0 (an 1e a((epta1le%Y +lso! he stressed that issuing notes Ymust 1e (entraliAed into a few organs! or if
feasi1le! into one organ to ensure effe(tive e3pansion and (ontra(tion of reserves%Y The tireless reformer further stated that no
(entral 1ank (ould 1e effe(tive that Yvests the powers of a (entral 1ank in politi(al offi(ers alone% That power (learly defined!
ought to 1e vested in politi(al offi(ers and 1usinessmen (om1ined! in a way that would render impossi1le any politi(al or
finan(ial a1use%Y +ny hasty de(isions on the (omposition of the dire(tors of a (entral 1ank! he said! (ould stand in the way of the
(reation of su(h an organiAation% Better that those pra(ti(al and politi(al 5uestions (ould 1e worked out after (areful
(onsideration%
"arburgHs (ontribution
The idea of an Yelasti( (urren(y!Y whi(h would e3pand to meet the legitimate needs of 1usiness and (ommer(e! was not new% 6n
fa(t! &ar1urg himself (laimed no originality for the idea! 1ut through his writings! spee(hes and (ounsel to others he 1egan to
have a greater impa(t than anyone else% &ar1urg did! however! su((eed in in4e(ting two new ideas into the dis(ussion: first!
shifting of emphasis from the (urren(y pro1lem to the reserve pro1lem8 and se(ond! advo(a(y of the prin(iple of redis(ounting a
new kind of (ommer(ial paper%
These ideas were starting to 1e dis(ussed more seriously throughout the (ountry! and other individuals involved in the 1anking
and (urren(y reform movement 1egan to take note% &ith 1oth the 1uilding momentum of other 1anking reform advo(a(y groups
and +ldri(hIs own e3posure to the effi(ient and effe(tive (entral 1anking system in -urope! the senator finally opened to these
other ideas%
The de1ate on (entral 1anking reform was still in full swing several years after the F#H *ani(% 6ndeed! it 1egan to heat up! with
the +meri(an Bankers +sso(iation standing opposed to Yany form of (entral 1ank yet suggested 1y legislators%Y Meanwhile!
&ar1urg! +ldri(h and several other prominent figures intensified their efforts and 1egan to form an allian(e that was to last over
the (oming (ru(ial years of the 1anking reform movement%
!ldrich $econsiders :is 2osition
The -uropean interviews of the National Monetary Commission had a profound influen(e upon +ldri(h% 7e had a (lear plan for
reform when he returned from -urope! radi(ally different from his original 1eliefs% The (hange in the senatorIs thinking was so
drasti( that +ldri(hIs 1iographer e3plained it as an epiphany! saying! Y+ldri(h was (onverted on the road to )amas(us%Y
&hen +ldri(h and the National Monetary Commission returned from -urope in the fall of F#=! +ldri(h asked &ar1urg to
present his own ideas and answer 5uestions regarding the -uropean interviews at a meeting at New YorkIs Metropolitan Clu1%
+fter &ar1urgIs Metropolitan Clu1 testimony! +ldri(h pulled the 1anker aside and told him that he liked his plan for reform 1ut
he was 1eing too timid a1out it% &ar1urg was surprised to learn that +ldri(h! who 1efore his -uropean travels had not favored
(entraliAation and had advo(ated a national (urren(y 1a(ked 1y government 1onds! had (hanged his thinking and envisioned a
-uropeanGtype (entral 1ank for the ;nited <tates% &hile &ar1urg now warned the senator against attempts to esta1lish a fullG
s(ale (entral 1ank in the -uropean senseN1elieving it politi(ally unrealisti(N he was nonetheless en(ouraged%
+ parti(ular key feature of the -uropean systems persuaded the senator to re(onsider his thinking% +((ording to (ommission
mem1er <en% Theodore Burton! the (on(ept of (urren(y 1a(ked 1y (ommer(ial assets 1egan to take hold in +ldri(hIs mind in
Condon! and the interviews in Berlin finally (onvin(ed him% Commission +ssistant .eorge Reynolds (on(urred! noting that Ythe
e3perien(e and pra(ti(e of .erman 1ankers in meeting the needs of (ommer(e in their (ountry demonstrated to +ldri(h the
validity of the use of (ommer(ial assets as a 1asis for (urren(y% The idea! formerly so o1s(ure! (ame home to him in great for(e
from its demonstration in a nonGpoliti(al! pra(ti(al atmosphere%Y
&hile +ldri(hIs (onversion was a wel(ome one to &ar1urg and other progressive reformers! the very (on(ept of a -uropeanG
style (entral 1ank was still an anathema to a great many 1ankers and politi(ians% Bankers wanted reform that would make the
1anking system more effi(ient and 1etter (oordinated 1ut were fearful of government interferen(e in the management of a
(entral 1ank% &hile Reynolds! as president of the +meri(an Bankers +sso(iation! had traveled to -urope and had 1e(ome an
intimate of +ldri(h! his asso(iation was not supportive of reform% Moreover! many politi(ians 1elieved that the geographi( siAe
of the ;nited <tates and its diverse 1usiness (onditions warranted a different 1anking system than those e3isting in -urope%
Compli(ating the matter further was the fa(t that any plan to whi(h +ldri(h atta(hed himself was sure to 1e atta(ked 1y
)emo(rats and others who 1elieved the senator had only the interest of eastern 1usinessmen and 1ankers in mind% +ldri(h had
(lose ties with '% *% Morgan and other important 1ankers! and his eldest daughterIs marriage to 'ohn )% Ro(kefeller 'r% did not
help to dispel this suspi(ion%
The 9ekyll Island 3xpedition
Jne evening in early Novem1er F#! &ar1urg and a small party of men from New York 5uietly 1oarded <en% +ldri(hIs private
railway (ar! ostensi1ly for a trip south to an e3(lusive hunting (lu1 on an island off the (oast of .eorgia%
6n addition to &ar1urg and +ldri(h! the others! all highly regarded in the New York 1anking (ommunity! were: Frank ,anderlip!
president of National City Bank8 7arry *% )avison! a '%*% Morgan partner8 Ben4amin <trong! vi(e president of BankerIs Trust
Co%8 and +% *iatt +ndrew! former se(retary of the National Monetary Commission and now assistant se(retary of the Treasury%
The real purpose of this histori( Ydu(k huntY was to formulate a plan for ;< 1anking and (urren(y reform that +ldri(h (ould
present to Congress%
-ven &ar1urg at first 5uestioned the motives of this gathering! not knowing if he was in(luded 1e(ause the group knew what he
prea(hed and was interested in what he had to offer! or if he was to 1e involved as a (onspirator in order to 1e muAAled% 7e soon
saw that the 'ekyll 6sland (onferen(e was pulled together 1e(ause! as &ar1urg later wrote! +ldri(h was Y1ewildered at all that he
had a1sor1ed a1road and he was fa(ed with the diffi(ult task of writing a highly te(hni(al 1ill while 1eing harassed 1y the daily
grind of his parliamentary duties%Y
The group was se(luded on 'ekyll 6sland for a1out # days% +ll the parti(ipants (ame to the (onferen(e with strong views on the
su14e(t and did not agree on the e3a(t shape a ;< (entral 1ank should take% ,anderlip noted: YJf (ourse we knew that what we
simply had to have was a more elasti( (urren(y through a 1ank that would hold the reserves of all 1anks%Y But there were many
other 5uestions that needed to 1e answered% 6f it was to 1e a (entral 1ank! how was it to 1e owned: 1y the 1anks! 1y the
government! or 4ointly? <hould there 1e a num1er of institutions or only one? <hould the rate of interest 1e the same for the
whole nation! or would it 1e higher in a (ommunity that was e3panding too fast and lower in another that was lagging? 6n what
open market operations should the 1ank 1e engaged?
&ar1urg realiAed that he had not 1een a1le to persuade the senator that if a (entral 1anking organiAation was to 1e (reated! it had
to 1e a modified s(heme 1ased on the -uropean models% 6n fa(t! &ar1urg! Ythe 1est e5uipped man there in the a(ademi( sense!Y
a((ording to ,anderlip! Ywas so intense %%% and apparently felt a little antagonism towards +ldri(h!Y so that there were some
moments of strain that had to 1e eased 1y the others% +ldri(h had his mind set on a -uropeanGstyle (entral 1ank! Ya model he
seemed loath to a1andon!Y a((ording to &ar1urg! and the senator strongly 1elieved that the proposed (entral 1ank should 1e kept
out of politi(s% &ar1urg and the others felt that whatever the theoreti(al 4ustifi(ation for su(h a (entral 1ank! +meri(an
(onditions would re5uire some sort of (ompromise and that (on(essions should 1e made (onsidering government influen(e and
representation% +ldri(h! yielding somewhat! allowed that the government should 1e represented on the 1oard of dire(tors and
have full knowledge of the 1ankIs affairs! 1ut a ma4ority of the dire(tors were to 1e (hosen! dire(tly or indire(tly! 1y the
mem1ers of the asso(iation%
&ar1urg also didnIt agree with +ldri(hIs position on note issuan(e! (onditions of mem1ership of state 1anks and trust
(ompanies! or on the need for a uniform dis(ount rate% +ldri(h insisted! however! that a (entral 1ank should maintain a uniform
rate of dis(ount throughout the ;nited <tates% 7e thought su(h a measure politi(ally wise 1e(ause it would refute the (harges
that other Ygreat finan(ial (entresY would attempt to esta1lish favora1le rates for themselves in different regions to the
disadvantage of other lo(alities in the (ountry%
-ventually all of the individuals at the 'ekyll 6sland (onferen(e had to modify their views on a (entral 1ank plan% Nonetheless!
+ldri(h got out of the (onferen(e 4ust what he intendedNa 1anking s(heme that rested upon a (onsensus of opinion representing
the 1estGinformed 1ankers of this (ountry%
The 1anking 1ill the group 1rought north! whi(h (ame to 1e known as the Y+ldri(h *lan!Y (alled for the esta1lishment of a
(entral 1ank in &ashington! to 1e named the YNational Reserve +sso(iation!Y meaning a (entral reserve organiAation with an
elasti( note issue 1ased on gold and (ommer(ial paper% The asso(iation was to have L 1ran(hes at geographi(ally strategi(
lo(ations throughout the (ountry% The 1ank was to serve as fis(al agent for the ;< government and! 1y mo1iliAing the reserves of
its mem1er 1anks! 1e(ome a lender of last resort to the +meri(an 1anking system% The asso(iation as a whole was to serve as a
1ank of redis(ount! that is! it was empowered to dis(ount a se(ond time (ommer(ial paper that mem1ers of the asso(iation had
already dis(ounted% By redis(ounting! the asso(iation (ould issue new money that might stay in (ir(ulation so long as the paper
for whi(h it was issued was not redeemed%
No one person was responsi1le for the final draft 1ill that was written% 6t was a re(ord of their (omposite views% Yet ,anderlip
regarded &ar1urg as having made signifi(ant and important (ontri1utions to the final result: Y+s a philosophi(al student of
1anking he was first among us at that time%Y &ar1urg was satisfied that the +ldri(h *lan was not a (entral 1ank in the -uropean
sense% Y6t was stri(tly a 1ankersI 1ank with 1ran(hes under the (ontrol of separate dire(torates having supervision over the
redis(ount operations with mem1er 1anks!Y he said%
&ar1urg viewed the result of the 'ekyll 6sland meeting as pivotal: YThe period during whi(h nonpoliti(al thought held the
leadership in the 1anking reform movement may 1e (onsidered as having ended with this (onferen(e%Y ;p until then! 1ank
reform had 1een an edu(ational (ampaign (arried on 1y individuals and groups8 1ut at that point! the movement assumed a
national (hara(ter% &ar1urg saw <enator +ldri(h as 1eing the standardG1earer of a politi(al proposal for a (entral 1ank% <aid
&ar1urg: YFrom then on until the final passage of the Federal Reserve +(t! the generalship was in the hands of politi(al leaders!
while the role of 1anking reformers was to aid the movement 1y edu(ational (ampaigns and! at the same time! to do their utmost
to prevent fundamental parts of the nonpoliti(al plan from 1eing disfigured 1y (on(essions 1orn of politi(al e3pedien(y%Y
+ldri(h presented his draft plan to the pu1li( in 'anuary F% Jne year later! on 'an% F! F"! the National Monetary
Commission presented its report and endorsed the +ldri(h *lan%
The #inal (ampaign
&ar1urg playfully des(ri1ed himself as a Yfanati(Y for what he (onsidered sound finan(e% 7e was also pragmati( and sensitive to
politi(al realities! however% Thus he tempered his approa(h to a (entral 1ank in the ;nited <tates! and his (ampaign over the ne3t
several years refle(ted that position% &hen he saw the road1lo(ks that lay ahead with +ldri(h attempting to sell his plan to a
greater part of the (ountry! &ar1urg 1egan a formal edu(ational (ampaign to assist% &ar1urg 1elieved that Y1eyond dou1t!
unless pu1li( opinion all over the ;nited <tates (ould 1e edu(ated and mo1iliAed! any sound 1anking reform plan was doomed to
fail%Y
The National Board of Trade appointed &ar1urg the head of a sevenGman (ommittee to set up a national group to promote
reform% The group was (alled The National CitiAens Ceague For the *romotion of <ound Banking% 6t a((omplished mu(h of
what it set out to do: esta1lishing effe(tive organiAations in $L states! printing a vast amount of edu(ational materials for the
1usinessman and layman alike! and pu1lishing essays in pamphlets and arti(les in newspapers% &ar1urg also (ontinued to
pu1lish in important 4ournals and le(ture 1efore influential groups! doing all he (ould to help promote sound 1anking prin(iples
and (onvin(e larger audien(es of the urgen(y for reform%
The #inal 2lan The #ederal $eserve !ct
Before the +ldri(h *lan (ould 1e ena(ted into law! the )emo(rats won the &hite 7ouse and took (ontrol of the Congress in
F"% The )emo(rati( position (alled for a divisional reserve 1ank system! with a num1er of reserve 1anks or (entral 1anking
(ities% Nevertheless! *resident &oodrow &ilson 1elieved that the +ldri(h *lan was Y?#GH# per(ent (orre(t%Y +s a result! the plan
1e(ame the 1asis for (onstru(ting the Federal Reserve 1ill! whi(h 1egan to take shape in Congress with the presentation of a 1ill
proposed 1y <en% Ro1ert Catham Jwen in May F>%
&hen the +ldri(h 1ill was re4e(ted and the )emo(rats 1egan to rework the 1anking 1ill! the group of 1ankers that had worked so
hard in support of the +ldri(h *lan 1egan to split apart! and many of those 1ankers refused to (onsider an alternative plan%
&ar1urg was more (on(iliatory and remained in (onta(t with prominent )emo(rats! in(luding Carter .lass! (hairman of the
7ouse 1anking (ommittee! and 7% *arker &illis! the (ommittee e3pert! and (ontinued to write and speak on the new legislation%
&ar1urgIs reserve and dis(ounting (on(epts were em1ra(ed in the Federal Reserve plan! though the (entral 1ank gradually
a1andoned the emphasis on dis(ounting in favor of open market operations as the ma4or monetary poli(y tool% Nonetheless! his
efforts in edu(ating the (ountry! 1ringing sound 1anking te(hni5ues to the forefront of de1ate! were of tremendous importan(e in
final preparation and passage of the Federal Reserve +(t%
3pilogue
&ar1urgIs (areer didnIt end with passage of the Federal Reserve +(t% 6n a sense! the (lose of this (hapter marked the 1eginning
of his ne3t important role as a (entral 1anker% 7e was to wield a tremendous influen(e on the development of the <ystem he
worked so hard to help esta1lish% 6n spite of vehement opposition from many )emo(rats and populists! *resident &ilson asked
&ar1urg to 1e(ome a mem1er of the first Federal Reserve Board%
6t appears *resident &ilson made a wise de(ision% Jn(e &ar1urg was appointed to the 1oard! <e(retary of the Treasury &illiam
M(+doo! who often (lashed with &ar1urg over poli(y matters! e3plained &ar1urgIs appointment this way: Y6t was thought that
his te(hni(al knowledge in international finan(e would 1e useful% 6t was useful! in some respe(ts it was invalua1le%Y Ben4amin
<trong! governor of the Federal Reserve Bank of New York! went even further in his estimation of &ar1urg% +lthough &ar1urg
was appointed as a mem1er of the 1oard /not as the (hairman or vi(e (hairman0! <trong (alled &ar1urg Ythe real head of the
1oard in &ashington! so far as knowledge and a1ility goes%Y
But the fa(t that he was at all (hosen to serve on the 1oard seems to have 1een as mu(h a surprise to the -uropeanG1orn 1anker
as to those who took issue with his nomination% 6ndeed! he first de(lined the appointment 1e(ause of the Yrampant pre4udi(e in
this (ountry against a &all <treet man!Y and 1alked at testifying 1efore the <enate 1anking (ommittee 1e(ause other nominees
had not 1een asked to do so% 7owever! when &orld &ar 6 erupted in -urope! &ar1urg de(ided to waive all personal
(onsiderations Yin deferen(e to the presidentIs urgent re5uest and in view of the present urgen(y whi(h render desira1le the
promptest organiAation of the Federal Reserve Board!Y and appeared 1efore a largely antagonisti( (ommittee%
&ith &ar1urg 1efore them! rather than take advantage of his vast knowledge in (entral 1anking to learn how the (ountry would
adapt to this new system! the senators (hose instead to 5uestion the 1anker on Buhn! Coe1 and Co%Is Ymoney trustY (onne(tions%
Thus! one of the 1est opportunities for history to re(ord &ar1urgIs e3temporaneous impressions on the final .lassGJwen Federal
Reserve 1ill was lost% But when &ar1urg was 5uestioned as to his motives for making the sa(rifi(e N finan(ial and otherwise N
to 1e(ome a mem1er of the Federal Reserve Board! the nomineeIs answer was (hara(teristi(ally to the point:
Y&hen *resident &ilson asked me TagainU whether 6 would take this TonU and make the sa(rifi(e %%% 6 felt that 6 had no right to
de(line it8 and 6 will 1e glad to make the sa(rifi(e! 1e(ause 6 think there is a wonderful opportunity for 1ringing a great pie(e of
(onstru(tive work into su((essful operation! and it appeals to me to do that%Y
<our(e: The Federal Reserve Bank of Minneapolis
http:@@www%minneapolisfed%org@pu1li(ationsZpapers@pu1Zdisplay%(fm?idX>=L
2But then the (onferen(e (losed! after a week of earnest deli1eration! the rough draft of what later 1e(ame the +ldri(h Bill had
1een agreed upon! and a plan had 1een outlined whi(h provided for a DNational Reserve +sso(iation!E meaning a (entral reserve
organiAation with an elasti( note issue 1ased on gold and (ommer(ial paper % % %The results of the conference were entirely
confidential. 3ven the fact there had been a meeting was not permitted to become public% % %Though eighteen years have
sin(e gone 1y! 6 do not feel free to give a des(ription of this most interesting (onferen(e (on(erning whi(h <enator +ldri(h
pledged all parti(ipants to se(re(y% % % The matter of a uniform dis(ount rate was dis(ussed and settled at 'ekyll 6sland%9
: *aul &ar1urg! F"=% *aul &ar1urg served as ,i(e Chairman of the Federal Reserve during &orld &ar 6%
Congressman Lin#bergh's 8rti+les of Dmpea+hment against the Fe#eral 6eser4e
&ongressional (ecord /;%<% 7ouse of Representatives0! Fe1ruary "! FH! p% >"?G>>#
;%<% Congressman Charles +% Cind1ergh <r% /=LFGF"$0
Mr% C6N)B-R.7% Mr% <peaker and the 7ouse of Representatives! 6! Charles +% Cind1ergh! the undersigned! upon my responsi1ility
as a Mem1er of the 7ouse of Representatives! do here1y impea(h &% *% .% 7arding! governor8 *aul M% &ar1urg! vi(e governor8
Frederi(k +% )elano! +dolph C% Miller! and Charles <% 7amlin! mem1ers! ea(h individually as a mem1er of the Federal Reserve
Board! and also all of them (olle(tively as the five a(tive working mem1ers of said 1oard! or high (rimes and misdemeanors%
6! upon my responsi1ility as a Mem1er of the 7ouse of Representatives! do here1y impea(h &% *% .% 7arding! governor8 *aul M%
&ar1urg! vi(e governor8 and Frederi(k +% )elano! +dolph C% Miller! and Charles <% 7amlin! mem1ers! and ea(h of them as mem1ers
of the Federal Reserve Board! and also impea(h all of them (olle(tively as the five a(tive working mem1ers of the Federal Reserve
Board! of high (rimes and misdemeanors in aiding! a1etting! and (onspiring with (ertain persons and firms hereinafter named! and
with other persons! and firms! known and unknown! in a (onspira(y to violate the Constitution and the laws of the ;nited <tates and
the 4ust and e5uita1le poli(ies of the .overnment! whi(h said (onspira(y developed and grew out of and was (onsummated from the
following fa(ts and a(ts! to wit:
First% Jn or a1out the month of 'uly! F#?! the e3a(t date 1eing unknown to the relater! the late '%*% Morgan of the firm of '% *% Morgan
K Co%! and the said firm! private 1ankers and 1rokers! with their main offi(e in New York City and doing 1usiness all over the world8
*aul M% &ar1urg! of the firm Buhn! Coe1 K Co%! and the firm of Buhn! Coe1 K Co! also private 1ankers and 1rokers! doing 1usiness
all over the world! with their main offi(e in New York City8 Cee! 7igginson! K Co%! also private 1ankers and 1rokers! doing 1usiness
all over the world with their main offi(es in Boston and New York: Bidder! *ea1ody K Co% +lso private 1ankers and 1rokers! doing
1usiness all over the world! with their main offi(es in Boston and New York! the National City Bank of New York with its offi(e in the
(ity of New York and doing a general 1anking 1usiness domesti( and foreign8 the First National Bank of New York with its offi(e in
New York (ity doing a general 1anking 1usiness domesti( and foreign8 and various other persons and firms! known unknown to the
relator ! did (onspire with ea(h other to devise a means through so(ial! politi(al! and other ways of strategy of and 1y general
(hi(anery! to de(eive the people of the ;nited <tates! the Congress! and the *resident of the ;nited <tates for the purpose and with the
o14e(t to se(ure an a(t of Congress providing for a new monetary and 1anking system to have in in a provision for a managing 1oard
vested with unusual and e3traordinary powers and to se(ure the appointment upon the 1oard of management that should 1e provided
for in the a(t persons for mem1ership on the 1oard who would 1y su1terfuge manipulation! and false administration! so manage as to
avoid the spirit and the purpose of the people of the ;nited <tates! the Congress! and the *resident aimed at in the passage of an a(t
and instead of administering the a(t to meet with the spirit and (omply with its terms! to indu(e and se(ure su(h 1oard to enter in the
(onspira(y aforesaid! to administer the a(t for the spe(ial 1enefit and advantage of all of the said (onspirators herein1efore named! and
their asso(iates and (ontrary to the letter! intent and purpose of the a(t itself and in (ontravention of the Constitution and law8 that in
order to start the (ampaign with a plan well matured to su((eed in said (onspira(y *aul M% &ar1urg! now vi(e governor of the Federal
Reserve Board! 1ut then a mem1er of the firm of Buhn! Coe1! K Co was a most a(tive parti(ipant in drafting the main features and
prin(iples whi(h should 1e em1odied into whatever 1ill might 1e put through Congress! and did also assist in a plan for a se(ond
(ampaign to 1e kept from the knowledge of the *resident with the appointing power! and from the <enate! with the (onfirming power
in the sele(tion and (onfirmation of all high Federal appointive offi(ials in order that a 1oard of administration should! when the time
(ame for its sele(tion! 1e appointed that would (arry out the designs of the (onspirators aforesaid8 that there that were many se(ret
meetings held 1y the (onspirators for this purpose whi(h under the very (ir(umstan(es would 1e s(reened and kept from the pu1li( and
made pra(ti(ally impossi1le to dis(over! 1ut nevertheless made (ertain of the fa(t 1e(ause of the a(ts whi(h point 1a(k to their
(reation8 that one of su(h meetings whi(h your relator does not undertake to verify the truth of its holding! 1ut is relia1ly informed that
it was held : is des(ri1ed in CeslieEs 6llustrated &eekly MagaAine in the J(to1er F! F?! num1er thereof! whi(h is here1y referred to
as showing the method most likely to have 1een followed for planning the then (ontemplated a(t of Congress whi(h is now the a(t
known as the Federal reserve a(t%
<e(ond% That in pursuan(e of said (onspira(y to promote the o14e(t of the (onspirators aforesaid and as part of that general s(heme to
indu(e Congress to legislate upon the monetary and 1anking system as stated herein1efore! said (onspirators (aused to 1e organiAed
the soG(alled CitiAens Ceague with head5uarters in the (ity of Chi(ago! to a(t as a mother organiAation and promoter to indu(e
organiAation of the several states of au3iliary and affiliated leagues! and 1y misrepresentation to the pu1li( and to the origin of said
mother league and its purpose to indu(e (itiAens who should have no knowledge of the said (onspira(y and would 1e inno(ent of any
wrong intention! and whose motives and intent would 1e to a(t in the (ommon interests of their (ountry! to 4oin in the formation of
au3iliary league throughout the several <tates in order to give the outward and surfa(e appearan(e of respe(ta1ility and honor! and that
in pursuan(e of that plan the (onspirators su((eeded in organiAing affiliated leagues in $L of the <tates8 that when organiAed the
(onspirators herein1efore named! themselves dire(ted who should 1e sent to these organiAations as speakers and instru(tors! and also
the kind of literature that should 1e distri1uted to the mem1ers and to the general pu1li(! the design of whi(h was to have only su(h
speakers! instru(tors! and literature as would dis(redit the then e3isting 1anking and (urren(y system and pre4udi(e the people in every
way possi1le against it8 1ut notwithstanding the then e3isting 1anking and (urren(y system was 1ad and unfitted to the demands of the
Nation and the needs of (ommer(e and trade! and su(h (ampaign was 1y its (onspirators aforesaid dire(ted not to designate to the
pu1li( what sort of a 1anking and (urren(y system would 1e adopted in its stead! 1ut the promoters of the (onspira(y should pretend
that the o14e(t of the (ampaign was to aid in every way to (reate a new monetary 1anking and (urren(y system to take the pla(e of the
then e3isting 1ad one! and! as far as it (ould 1e (one! the (onspirators should prevent the people getting together to prepare a plan of
their own to 1e presented to Congress: that the purpose of the (onspirators was simply to make the pu1li( 1elieve that a new 1anking
and (urren(y system was a1solutely ne(essary and at the same time keep the pu1li( from find out what would 1e its form and details!
all this for the reason that the (onspirators aforesaid had their own pre(on(eived plan prepared as a part of their (onspira(y! whi(h they
would se(retly manage in their own way to have presented to Congress as the plan in response to all this pu1li( sentiment whi(h the
(onspirators themselves had ingeniously worked out through the (ampaign aforesaid! and with the intent that Congress and the
*resident would legislate the (onspiratorsE said plan into effe(t8 that it was part of said plan to (reate many offi(es and positions with
lu(rative salaries! whi(h offi(es and positions would 1e e5uivalent to a 1id for the am1itious to support it! 1e(ause these offi(es and
positions would 1e filled 1y the leaders and most a(tive persons who would 4oin in the (ampaign to put the (onspira(y into effe(t and
influen(e Congress and the *resident for the purpose of se(uring the legislation%
Third% That in further pursuan(e of said (onspira(y and to 1e in (ontrol of the information and literature that should 1e distri1uted
through the Nation! the said (onspirators then having (ontrol of a large num1er of magaAines! newspapers! and pu1lishing (ompanies!
used all of these! and pro(eeded to pro(ure (ontrol of as many more as (ould 1e pur(hased or su1sidiAed to pu1lish arti(les prepared 1y
su1sidiAed writers who would (riti(iAe the e3isting 1anking and (urren(y system so as to (reate pu1li( sentiment against8 that of the
thousands of (ountry newspapers! a ma4ority of them use DsoG(alled 2patent9 arti(les not edited or even pra(ti(ally (ontrolled 1y the
owners of the papers! whi(h patent arti(les are (ommonly (alled 21oilerGpla(e9 stuff! and no responsi1ility as to the influen(e su(h
arti(les have upon the pu1li( atta(hes to any1ody8 that those writing this 21oilerGplate9 stuff so pu1lished! many of them were also
su1sidiAed and (ontrolled 1y the said (onspirators! so that the small newspapers were pra(ti(ally for(ed to (arry on a (ampaign against
the then e3isting 1anking and (urren(y system along the same lines of the others referred to herein1efore8 that readers generally do not
have the opportunity to distinguish 1etween 21oilerGplate9 arti(les and the arti(les whi(h the editors of the smaller papers write
themselves8 that the newsGdistri1uting agen(ies through the telegraph and telephone were then and still are largely (ontrolled 1y said
(onspirators! and the operators of the news agen(ies have 1een allowed to report only su(h news relating to a new 1anking and
(urren(y system as would promote said (onspira(y! and re5uired to suppress and everything in the way of information or news that
would tend to en(ourage the people to prepare for themselves a (on(rete plan for 1anking and (urren(y in the interest of all the people8
that the general play of the (onspira(y was to suppress every arti(le! statement! and thing so far as possi1le! whi(h would give any
information as to the e3isten(e of said (onspira(y all of whi(h was for the purpose of ena1ling the (onspirators aforesaid to de(eive the
people as well as Congress and the *resident! in order that said (onspirators might finally (onsummate their aforesaid (onspira(y%
Fourth% That in (onse5uen(e of the (ampaign (arried on 1y said (onspirators stated and re(ited in paragraphs named 2First!9 2<e(ond9
and 2Third9 in these impea(hment arti(les! and numerous se(ret! (landestine! and underground methods employed 1y said
(onspirators! the people of the ;nited <tates! the Congress! and the *resident were de(eived! and as the first offi(ial a(t in the
(onsummation of the o14e(ts sought 1y said (onspirators Congress did legislate and pass and a(t of Congress whi(h was signed 1y the
*resident! and is known as the Federal reserve a(t! whi(h a(t is su1stantially the plan prepared 1y said (onspirators as aforesaid%
Fifth% That immediately upon the passage of the Federal reserve a(t the said (onspirators disorganiAed the soG(alled 2CitiAensE Ceague9
and all the affiliated leagues in the $L <tates referred to in the paragraph named 9<e(ond9 herein8 that prior to su(h disorganiAation the
said (onspirators had 1y se(ret and underground methods! and for the purpose of using the same in (ompleting and perpetuating their
(onspira(y! organiAed another 2 asso(iation 2 and (alled it the 2;nited <tates Cham1er of Commer(e!9 giving it that name in order to
de(eive the pu1li( 1y making it appear that is a department of the .overnment! whi(h organiAation is administered with more intri(ate
ma(hinery for management the soG(alled 2CitiAensE Ceague9 was! and with a purpose of taking up the work of (oordinating everything
so(ial! politi(al! 1usiness and other to work for the 1enefit of the said (onspirators in (arrying out their plan to for(e the masses of
mankind into a1solute and a14e(t industrial slavery8 that the methods and the design of the 2;nited <tates Cham1er of Commer(e9 are
set forth to remarks whi(h your relator pla(ed in the CJN.R-<<6JN+C R-CJR) Mar(h #! F?! and are here1y referred to for
more spe(ifi( detail8 that the influen(e of the 2;nited <tates Cham1er of Commer(e9 is one of the agen(ies 1eing used as an aid to
further (onsummate the (onspira(y (harged in these arti(les of impea(hment%
<i3th% That the said Federal reserve a(t is so framed that it has the possi1ility and (ontains the provisions whi(h! under proper and
impartial administration! would furnish a remedy to some of the faults that e3isted in the 1anking and (urren(y system whi(h it
superseded! 1ut also (ontains provisions whi(h! under a 1ad and improper administration! makes it more dangerous to the pu1li(
welfare than ever the old 1anking and (urren(y system was8 that the main feature of the said Federal reserve a(t in giving effe(t to it is
the authority vested in the Federal Reserve Board and the dis(retion entrusted to the mem1ers thereof in its 2administration98 that the
2administration9 of said Federal reserve a(t is vested in the Federal Reserve Board! advised 1y the Federal reserve advisory (oun(il
made up of " persons! sele(ted 1y ea(h of the " Federal reserve 1anks8 that the L a(tive working mem1ers of the Federal Reserve
Board are the said &%*%.% 7arding! governor8 *aul M% &ar1urg! vi(e governor8 and Frederi(k +% )elano! +dolph C% Miller! and
Charles <% 7amlin! mem1ers8 and that the Federal reserve advisory (oun(il is formed 1y the following persons to wit: )aniel .% &ing
of Boston8 '% *% Morgan! or New York8 Cevi C% Rue! of *hiladelphia8 &%<% Rose! of Cleveland8 '% N% Norwi(h of Ri(hmond8 Charles +%
Cyerly! of +tlanta8 '%B% Forgan% of Chi(ago8 Frank J% &atts! of <t Couis8 '%R% Mit(hell! of Minneapolis8 -%F% <winney! of Bansas City8
T% '% Re(ord! of )allas8 and 7er1ert Fleish1a(ker! of <an Fran(is(o8 that the said Federal Reserve Board and the said Federal reserve
advisory (oun(il held many meetings and are now and have 1een ever sin(e the Federal reserve a(t was passed! fully advised as to
finan(ial and 1usiness (onditions! domesti( and foreign8 that the mem1ers of the Federal Reserve Board and the mem1ers of the
Federal reserve advisory (oun(il are men with enormous 1usiness interests! and ea(h of them have 1een for more than L years last
past! and are now e3(essive operators and spe(ulators for individual profit and gain in the markets! and (ontrol several of the largest
1anks in the (ountry8 that '%*% Morgan 'r% is the lending mem1er of the firm of '%*% Morgan K Co%! one of the firm herein1efore
(harged with 1eing a party to the (onspira(y aforesaid8 that several of the mem1ers of the Federal reserve advisory (oun(il own sto(k
in the National City Bank of New York and the First National Bank of New York! they 1eing the two 1anks (harged herein1efore with
1eing parties to the said (onspira(y! and said mem1ers also own sto(k and are interested in 1usiness and managed and (ontrolled 1y
the parties spe(ifi(ally named as the (onspirators in the paragraph herein1efore designated as 2First98 that *aul M% &ar1urg! a mem1er
and vi(e governor of the Federal Reserve Board! was at the time of the original formation of the (onspira(y aforesaid a party to the
said (onspira(y! and a partner and mem1er of the firm of Buhn! Coe1 K Co%! one of the (onspirators8 that ea(h of the mem1ers of the
Federal Reserve Board and of the Federal reserve advisory (oun(il are asso(iated with and form a part of a group of promoters and
spe(ulators! the individual mem1ers of whi(h reside in various parts of the ;nited <tates! prin(ipally in the large (ities! and a few of
them live in -urope! whi(h said group individually and (olle(tively deal in (redits! sto(ks! 1onds! se(urities and various promoting
enterprises from whi(h they have made 1illions of dollars in profits! and still operate and propose to (ontinue their operations for the
purpose of making still greater profits upon their future dealings8 that in further pursuan(e of their said purpose! they 4oined in the
original (onspira(y aforesaid and it was planned as a part of the said original (onspira(y to (reate several great 1usiness and finan(ial
(enters in different parts of the ;nited <tates in order to fa(ilitate with (elerity a (oordination of all 1ig 1usiness and all finan(ial
(ontrol8 for the 1enefit of the said (onspirators in (arrying out their plan of personal gain in (ontravention to the pu1li( welfare8 that
said group instigated the (ampaign whi(h finally resulted in the passage of the Federal reserve a(t8 that in the administration of said a(t
1y the said five a(tive working mem1ers of the Federal Reserve Board! and through the influen(e e3er(ised over them 1y the mem1ers
of the Federal reserve advisory (oun(il! and (olle(tively all of the mem1ers and mem1ership of 1oth the Federal Reserve Board and of
the Federal reserve advisory (oun(il! a part of and influen(ed 1y said larger 2group9 in this paragraph designated as having 4oined in
the (onspira(y aforesaid! the said five a(tive working mem1ers of the Federal Reserve Board! ea(h individually and all (olle(tively! at
all times sin(e they 1e(ame mem1ers of the said Federal Reserve Board! knowingly and intentionally have 1een improperly influen(ed
1y the said 2group!9 and 1e(ause of su(h influen(e have failed to administer the Federal reserve a(t in a((ordan(e with the spirit! letter!
and intent of Congress and the *resident when the a(t was passed8 1ut! on the (ontrary! the said five a(tive working mem1ers of the
Federal Reserve Board herein1efore spe(ifi(ally named as su(h! with intent to evade and set aside 1y 2administration9 all the purposes
of Congress and of the *resident in the passage and approval of the a(t! and of the a(t itself! have administered! and are now
administering! the Federal reserve a(t with the intent to (oordinate 21ig 1usiness9 and 2spe(ulation9 for the 1enefit of the said 2group9
of operators and spe(ulators herein1efore designated as having taken part in the original (onspira(y8 that said National City Bank
herein1efore named! in whi(h many of the other (onspirators own sto(k! a(ts as the 2offi(ial mouthpie(e9 for them all! to give
te(hni(al information to ena1le them all to a(t in (on(ert8 that to fa(ilitate its distri1ution said 1ank issues a monthly 1ulletin8 that in its
Fe1ruary! FH! 1ulletin! in an arti(le dealing with the present plethora of money and (redit availa1le! among other 2tips9 intended for
the (onspirators to a(t upon! is the following : and 6 would like the 7ouse to hear it : this is what is (ontained the 1ulletin whi(h the
National City Bank issued:
&nder the circumstances money promises to be in abundant supply, but if bankers have a proper regard for their
responsibilities it will not be correspondingly cheap. (ompensatory rates for money and ample reserves should be consistently
maintained.
That said 1ulletin was sent to the Federal Reserve Board! to all the Federal reserve 1anks! to all the larger National and <tate 1anks and
trust (ompanies! in order to 2tip9 off to the (onspirators and those a(ting in (on(ert to tighten the rates of interest8 that su(h 2tips9 are a
(ommon pra(ti(e and do prevent the redu(tion of interest rates to 1orrowers for legitimate 1usiness! (ontrary to the intent and purpose
of Congress and the *resident and in (ontravention of the a(t itself and to the enormous loss of the people and in4ury to the general
welfare%
<eventh% That there are appro3imately "#!### <tate 1anks and trust (ompanies in the ;nited <tates! in(orporated and organiAed under
the <tate laws of the respe(tive <tates in whi(h their offi(es and pla(es of 1usiness are lo(ated! and doing a general 1anking 1usiness!
<tate and interstate! many of whi(h are eligi1le to 1e(ome mem1ers of the Federal Reserve <ystem! and many not know eligi1le (ould
1e(ome so without an in(rease of their (apitaliAation8 that of those now eligi1le and that (ould 5ualify for mem1ership in the Federal
Reserve <ystem without an in(rease of their (apital! they have more than half of the (apitaliAation of all the 1anks not now in(luded in
the Federal Reserve <ystem8 that the (apitaliAation of <tate 1anks and trust (ompanies! whi(h are not mem1ers of the Federal Reserve
<ystem e3(eeds the (apital of the 1anks whi(h are mem1ers of the Federal <ystem8 that the governors and other high and
administrative offi(ials of the " Federal reserve 1anks! through their influen(e with mem1er 1anks! wittingly or unwittingly! 1ut most
of them wittingly! 1e(ame a((essories to the said (onspira(y of the said persons and parties named in these arti(les of impea(hment in
the paragraph herein designated as 2First9 and have (aused a 1oy(ott of all 1anks not mem1ers of the Federal Reserve <ystem 1y
influen(ing the mem1er 1anks to hamper! in(onvenien(e! and annoy the patrons of the nonmem1er 1anks 1y dis(rimination against
them in the (learing of (he(ks drawn upon them and otherwise! that they threaten and seek to (a4ole the nonmem1er 1anks in an
attempt to for(e them to 1e(ome mem1ers of the Federal Reserve <ystem8 that the said five a(tive working mem1ers of the Federal
Reserve Board are (ogniAant of the same8 that the intent! purpose! and aim of ea(h and all of the said (onspirators aforesaid is to
(ompel the <tate 1anks to 4oin the Federal Reserve <ystem for the purpose of 1ringing the said 1anks under the 4urisdi(tion of the
Federal Reserve Board in order that all of the 1anks! National and <tate! may 1e(ome one giganti( (om1ination with an a1solute and
(omplete monopoly and have the power of e3ploiting the people for the 1enefit of the (onspirators aforesaid%
-ighth% That Congress in (reating the Federal Reserve Board had in mind! and it is the spirit of the Federal reserve a(t! that the said
1oard should keep a guardian wat(h over the operations of the 1anking and (urren(y system and report to Congress and the (ountry8
from time to time su(h fa(ts and o((urren(es relating to 1anking and (urren(y as affe(t the 1usiness of the people in trade and
(ommer(e e3(hanges! domesti( and foreign! so that Congress should re(eive information that would give to Congress the fa(ts upon
whi(h to 1ase any ne(essary amendments to the a(t in order to make it responsive to the general welfare8 that (ontrary to the spirit of
the Federal Reserve a(t! the aforesaid five a(tive working mem1ers of the Federal Reserve Board have willfully failed to keep the
pu1li( and Congress informed of the inflation of 1ank (redits and the effe(t of it that has taken pla(e under the 2administration9 of the
said a(t! and in violation of the spirit thereof said mem1ers have (onspired with the mem1ers of the Federal reserve advisory (oun(il
and their 1usiness asso(iates herein1efore named and have aided and a1etted in a (onspira(y to a systemati( inflation of 1ank (redits
for the 1enefit of the said (onspirators and against the pu1li( welfare8 that in (onse5uen(e of said unlawful a(ts and misfeasan(e in
offi(e of the said mem1ers of the Federal Reserve Board the 1ank have! for private gain! in(reased the 1ank (redits of the (ountry sin(e
the passage of said a(t appro3imately seven thousand millions of dollars and without effe(ting a (orresponding redu(tion in the interest
rate! thus in(reasing the aggregate amount of interest paid 1y the people to the said 1anks e5ual to that (harged upon said sum8 that the
effe(t of the inflation of 1ank (redits has 1een and is to also in(rease spe(ulative (redits enormously more than e5ual to the inflation of
1ank (redits! and that su(h in(rease sin(e the Federal reserve a(t took effe(t has 1een 1illions of dollars that the in(rease in the
aggregate sum of interest paid to the 1anks upon the said inflated 1ank (redits and the in(rease (aused 1y the said inflation in the
spe(ulative values upon (ommodities re5uired to supply the ne(essities of life for the people has 1een many 1illions of dollars! whi(h
have 1een added to the (ost of living for the people to pay8 that said in(rease in the (ost of living is mainly the profits that the
(onspirators have added to their individual fortunes to the e5uivalent loss of the people generally and to the .overnment as well%
Ninth% That as part of the said (onspira(y and in furtheran(e of the same the said aforesaid (onspirators! in violation of the NationEs
heretofore esta1lished e(onomi( poli(y of (onservation of material and natural resour(es! (onspired -uropean spe(ulators to draw
upon the material resour(es of this Nation for e3port with no (orrelation 1etween value of the materials e3ported and the value of the
materials imported8 that in (onse5uen(e of the (onspira(y to affe(t said e3port of material resour(es 1elonging to this Nation and to the
people of it appro3imately eight thousand millions of dollars in value of the material resour(es have 1een e3ported sin(e the war in
-urope 1egan8 that as a result thereof the said (onspirators a(ted with the said five mem1ers of the Federal Reserve Board in
manipulating 1ank (redits! and through (redits the markets in(reased the (ost to +meri(an (onsumers in the same period
appro3imately si3teen thousand millions of dollars in e3(ess of the real values! whi(h e3tra (ost has mainly 1een the profits that have
1een added to the fortunes of the aforesaid (onspirators8 that as an additional and future loss to the people of this Nation in
(onse5uen(e of the fa(ts aforesaid! the natural material resour(es of the Nation are forever less! and the (osts made forever higher than
they would 1e if trade and (ommer(e were not manipulated through a false administration of finan(es%
Tenth% That to further (arry out the said (onspira(y the aforesaid (onspirators have! ever sin(e the Federal reserve a(t took effe(t!
sought to influen(e! and in fa(t have influen(ed! said five mem1ers of the Federal Reserve Board in an attempt to further de(eive
Congress to se(ure legislation granting to the said 1oard enlarged powers of 2administration98 that in the <i3tyGthird Congress the said
1oard! (on(ealing the real purpose to aid said (onspirators! de(eived the <enate Banking and Curren(y Committee to get it to report for
passage the then <enate 1ill ?L#L and it passed the <enate and su1se5uently (ame 1efore the 7ouse Banking and Curren(y Committee
and was favora1ly reported! your relator! however! filing a minority report in opposition% Cater! on the floor of the 7ouse! the (hairman
of the Banking and Curren(y Committee withdrew a(tion on the 1ill8 that the aim of said 1ill was to give the Federal Reserve Board
greater 2administrative9 power over the gold supply! so that it (ould! whenever the (onspirators aforesaid wished it! inflate still further
the 1anking (redit 1y an issue of the FederalGreserve notes for the 1enefit of said (onspirators8 that again in this <i3tyGfourth Congress
said a(tive working mem1ers of the Federal Reserve Board alleged! repeatedly sought the 7ouse Banking and Curren(y Committee to
report a 1ill giving greater 2administrative9 powers to said 1oard than is authoriAed 1y the original a(t8 in fa(t! to give said 1oard
power to for(e from 1anks all over the (ountry the gold in their vaults and into the " Federal reserve 1anks! there to form a 1asis upon
whi(h to issue still more FederalGreserve notes and further inflate (redit without (ausing a redu(tion of interests that in the aggregate
would e5ual the (harge made on the inflated (urren(y! 1ut serving mainly as a guaranty to reinfor(e the (onspirators herein1efore
named in e3ploiting of the people for private gain%
-leventh% That the Federal reserve a(t o1ligates the ;nited <tates to redeem in gold at the ;nited <tates Treasury all Federal reserve
notes! and as a part of the said (onspira(y and in furtheran(e of the same! and to e3tend the spe(ulation of the operators and
perpetrators of the said (onspira(y to in(lude -urope and other foreign territory! they! most of them 1eing international as well as
domesti( 1ankers! seek to dominate the relations of the ;nited <tates with foreign (ountries and to selfishly influen(e the same 1y
means of the (ontrol of finan(es! and in furtheran(e of said 1ran(h of their spe(ulations have (onspired with the said five a(tive
working mem1ers of the Federal Reserve Board to se(ure aid from the Federal Reserve <ystem for said selfish purposes and not in the
interest of the pu1li(! the (onspirators in (onnivan(e with the said five a(tive working mem1ers of the Federal Reserve Board had the
said 1oard sele(t and appoint! through the Federal reserve 1ank of New York! the soG(alled Bank of -ngland as its agent! thus putting
the (redit of the .overnment of the ;nited <tates 1a(k of this foreign (orporation! organiAed for private gain! whi(h is no longer a1le
to make payments in gold and fails to give a statement of its true (onditions8 that said Federal Reserve Board is threatening to permit
and also to render aid to the international 1ankers in +meri(a who dominate the 1anking system! to enter into further entangling
allian(es with 1ankrupt (ountries of -urope at the very time this .overnment (ontemplates issuing hundreds of millions of dollars of
interestG1earing 1onds upon the (redit of the people of the Nation to meet the .overnment e3penses%
Twelfth% That during the Civil &ar the .overnment of the ;nited <tates issued money (ommonly (alled 2green1a(ks9 8 the same
1eing issued upon the (redit of the people of the Nation8 that of said 2green1a(ks9 so issued there have 1een ever sin(e their issue and
now are outstanding and in general (ir(ulation 1ased upon the (redit of the people of the ;nited <tates P>$?!?=!#?! for whi(h a
reserve of PL#!###!### in gold is held 1y the .overnment to guarantee their redemption if demanded8 that said (ir(ulating
2green1a(ks9 have already saved the .overnment from paying appro3imately P!###!###!### interest during the time they have 1een
in (ir(ulation and are now saving the .overnment appro3imately P?!###!### annually8 that in furtheran(e of said (onspira(y in these
arti(les of impea(hment alleged and as part thereof! the (onspirators have sought and 1y se(ret (onnivan(e new seek to have the said
2green1a(ks9 retired and the PL#!###!### of gold guarantee pla(ed in the Federal reserve 1anks on whi(h to 1ase the loaning of
21ank (redits9 as a su1stitute for the money owned 1y the people8 that if the Federal reserve 1anks are allowed to se(ure possession of
said gold! when the time (omes that the (onspirators aforesaid shall 1e a1le to use additional 1ank (redits to their advantages in
e3ploiting the people! the same would 1e(ome the 1asis for additional 1ank inflation! dire(tly and indire(tly! to the e3tent of over a
1illion dollars upon whi(h the 1anks would (olle(t a great sum of interest! and the spe(ulators would s(alp even greater profits from
additional manipulation of the markets! all of whi(h would 1e added to the (ost of living for the people to pay%
Thirteenth% That in furtheran(e of the said aforesaid (onspira(y and as a part of the same the said five a(tive working mem1ers of the
Federal Reserve Board! in their (apa(ity as mem1ers! have ar1itrarily at all times and with intent to prevent the legitimate 1usiness
interests of the (ountry se(uring the advantages that Congress sought to give 1y the passage of the Federal reserve a(t! and in
(onnivan(e with the 1ig reserve and (entral reserve 1anks (ontrolled 1y the (onspirators aforesaid! esta1lished redis(ount rates for
mem1er 1anks desiring to 1orrow from Federal reserve 1anks a1ove the rates (harged 1y the reserve and (entral reserve 1anks! whi(h
(reates an e3(use for the mem1er 1anks in the (ountry to (harge higher rates of interest to legitimate 1orrowers than they otherwise
would8 that the interest rates (harged 1y the reserve and (entral reserve 1anks! on the one hand! and the higher rates (harged 1y the
Federal reserve 1anks on the other hand! is maintained at (ertain times when the (onspirators aforesaid desire to draw the reserves of
the (ountry 1anks to the reserve and (entral reserve (ities for the interest that these reserve 1anks pay on deposit 1alan(es and in
anti(ipation of times when the (ountry 1anks may wish to redis(ount paper with said 1anks8 that 1y following the ar1itrary pra(ti(e of
redis(ounts aforesaid the said (onspirators are ena1led to and do go on with their spe(ulations! manipulate the markets! and e3ploit the
people! and whenever they find themselves in finan(ial stress they (an raise the rates of interest in the reserve and (entral reserve
1anks! whi(h they (ontrol! a1ove the Federal reserve 1ank dis(ount rates! thus for(ing the (ountry 1anks! whi(h may have redis(ounted
with reserve 1anks in order to give a((ommodations to their 1orrowers! to redis(ount with the Federal reserve 1anks to ena1le them to
repay the reserve and (entral reserve 1anks! in order to (reate free money and (redit for said (onspirators to (arry on their spe(ulations8
that the Federal reserve a(t (ontains several provisions whi(h when applied under the 2administrative9 power of the Federal Reserve
Board serve as a means of taking or imposing a toll in the nature of dis(riminatory interest rates in order to for(e a shift of money and
(redits from one se(tion of the (ountry to another! or out of the (ountry and to foreign (ountries8 that this dis(riminatory power vested
in the Federal Reserve Board is willfully a1used 1y the said five a(tive working mem1ers of the said 1oard for the 1enefit and in the
interest of the said aforesaid (onspirators8 that the people of the ;nited <tates have 1een in4ured to the e3tent of several 1illions of
dollars 1y reason thereof%
Fourteenth% That in furtheran(e of said aforesaid (onspira(y and to give the said aforesaid (onspirators (omplete pra(ti(al power to
(arry out and put into effe(t their purpose of making the masses of mankind a1solutely dependent upon 21ig 1usiness!9 and in order to
(reate industrial slaves of the masses the said aforesaid (onspirators did (onspire and now (onspire to have the Federal reserve a(t
2administered9 so as to ena1le the (onspirators to (oordinate all kinds of 21ig 1usinessE and to keep themselves in (ontrol of 21ig
1usiness!9 in order to amalgamate all of the 2trusts9 into one great trust in restraint and (ontrol of trade and (ommer(e! and thus 1e
a1le to e3ploit the masses and take from them their earnings! e3(ept what they would re5uire for 1are su1sisten(e8 that to that end and
to give them power to a((omplish the same said (onspirators have marshaled all of the different kinds of 21ig 1usiness9 and indu(ed
those in (ontrol to use their means and whatever kind of patronage and favors they have to give in su(h way as to promote the o14e(ts
and purposes of said (onspirators and to enslave the masses of humanity8 that at the same time that the said (onspirators marshal their
own 21ig 1usiness9 supporters 1y a (oordination of all their interests they have use every tri(k and su1terfuge possi1le to (reate
fri(tion among the masses and divide them into hostile (ontending fa(tions! thus keeping the masses from (oordinating their affairs to
promote the general welfare that the said aforesaid five a(tive working mem1ers of the Federal Reserve Board have all the time! 1y a
willful and wrongful 2administration9 of the Federal reserve a(t! aided and a1etted the said aforesaid (onspirators in promoting and
(arrying out the o14e(ts of their said (onspira(y and have refused and failed to so administer the Federal reserve a(t as to have the
same promote and operate in favor of the general welfare%
Fifteenth% That the Federal reserve a(t is void and un(onstitutional! 1ut that notwithstanding! the (onspirators aforesaid have so
manipulated things as to prevent the 5uestion of (onstitutionality of the a(t from 1eing 1rought 1efore the (ourts%
C7+RC-< +% C6N)B-R.7
Mr% <7-R&JJ)% Mr% <peaker! 6 would like to ask the gentleman a 5uestion%
Mr% C6N)B-R.7% 6 suppose my privilege stops now! does it?
The <*-+B-R% 6t does%
Mr% C6N)B-R.7% 6 ask for five minutes in whi(h to answer the 5uestion of the gentleman%
The <*-+B-R% The gentleman asks five minutes% 6s there o14e(tion? There was no o14e(tion%
Mr% <7-R&JJ)% 6n (ase the <enate should sit as an impea(hment (ourt! you have eviden(e to esta1lish that (harge?
Mr% C6N)B-R.7% 6 want to say this: 6 have spent enough time and made enough investigation of this (ase to know that 6 (an
demonstrate : a((urately! 6 may say! 1ut to a mathemati(al (ertainty : that the (harges in this impea(hment are su1stantially true% 6
may not 1e a1le to esta1lish 1y dire(t proof that that some of these meetings to whi(h the impea(hment refers were held! 1ut that the
(harges are su1stantially true! 6 will (ertainly show%
Mr% <7-R&JJ)% That is! 1y su1stantial eviden(e?
Mr% C6N)B-R.7% By su1stantial eviden(e! and 1y effe(ts whi(h the 1usiness of this (ountry demonstrates 1eyond 5uestion% Now!
Mr% <peaker! 6 ask leave to insert! following the reading of these arti(les! my remarks upon them and the 5uestions that are in(identally
involved in the impea(hment arti(les%
The <*-+B-R% The gentleman from Minnesota asks unanimous (onsent to e3tend his remarks in the R-CJR)% 6s there o14e(tion?
Mr% <6-.-C% 6 o14e(t%
The <*-+B-R% The gentleman from New York o14e(ts%
Mr% B6TC76N% Mr% Chairman! 6 move that the impea(hment arti(les 1e referred to the Committee on the 'udi(iary! and on that 6
demand the previous 5uestion%
The <*-+B-R% The gentleman from North Carolina moves that the impea(hment arti(les 1e referred to the Committee on the
'udi(iary! and on that he demands the previous 5uestion% The previous 5uestion was ordered%
The <*-+B-R% The 5uestion is on agreeing to the motion to refer% The 5uestion was taken! and the motion was agreed to%
Note: Charles +% Cind1ergh <r% /Repu1li(an *artyGMinnesota0 was a Mem1er of the ;%<% 7ouse of Representatives from Mar(h
$! F#H to Mar(h >! FH%
Congressman Couis T% M(FaddenEs <pee(h
6n the ;%<% 7ouse of Representatives
# 'une F>"
Mr% Chairman! at the present session of Congress we have 1een dealing with emergen(y situations% &e have 1een dealing with
the effe(t of things rather than with the (ause of things% 6n this parti(ular dis(ussion 6 shall deal with some of the (auses that lead
up to these proposals% There are underlying prin(iples whi(h are responsi1le for (onditions su(h as we have at the present time
and 6 shall deal with one of these in parti(ular whi(h is tremendously important in the (onsideration that you are now giving to
this 1ill%
r. (hairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the
#ederal $eserve )oard and the #ederal $eserve )anks. The #ederal $eserve )oard, a Government board, has cheated
the Government of the &nited %tates and the people of the &nited %tates out of enough money to pay the national debt.
The depredations and ini*uities of the #ederal $eserve )oard has cost this country enough money to pay the national
debt several times over. This evil institution has impoverished and ruined the people of the &nited %tates, has
bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under
which it operates, through the maladministration of that law by the #ederal $eserve )oard, and through the corrupt
practices of the moneyed vultures who control it.
%ome people think the #ederal $eserve banks are &nited %tates Government institutions. They are not Government
institutions. They are private credit monopolies which prey upon the people of the &nited %tates for the benefit of
themselves and their foreign customers, foreign and domestic speculators and swindlers, and rich and predatory money
lenders. In that dark crew of financial pirates there are those who would cut a manHs throat to get a dollar out of his
pocket, there are those who send money into %tates to buy votes to control our legislation, and there are those who
maintain international propaganda for the purpose of deceiving us and of wheedling us into the granting of new
concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.
These twelve private credit monopolies were deceitfully and disloyally foisted upon this country by the bankers who
came here from 3urope and repaid us for our hospitality by undermining our !merican institutions. Those 1ankers took
money out of this (ountry to finan(e 'apan in a war against Russia% They (reated a reign of terror in Russia with our money in
order to help that war along% They instigated the separate pea(e 1etween .ermany and Russia and thus drove a wedge 1etween
the +llies in the &orld &ar% They finan(ed TrotskyIs passage from New York to Russia so that he might assist in the destru(tion
of the Russian -mpire% They fomented and instigated the Russian revolution and they pla(ed a large fund of +meri(an dollars at
TrotskyIs disposal in one of their 1ran(h 1anks in <weden so that through him Russian homes might 1e thoroughly 1roken up
and Russian (hildren flung far and wide from their natural prote(tors% They have sin(e 1egun the 1reaking up of +meri(an
homes and the dispersal of +meri(an (hildren%
6t has 1een said that *resident &ilson was de(eived 1y the attentions of these 1ankers and 1y the philanthropi( poses they
assumed% 6t has 1een said that when he dis(overed the manner in whi(h he had 1een misled 1y Colonel 7ouse! he turned against
that 1usy1ody! that Yholy monkY of the finan(ial empire! and showed him the door% 7e had the gra(e to do that! and in my
opinion he deserves great (redit for it%
*resident &ilson died a vi(tim of de(eption% &hen he (ame to the *residen(y! he had (ertain 5ualities of mind and heart
whi(h entitled him to a high pla(e in the (oun(ils of this Nation8 1ut there was one thing he was not and whi(h he never aspired
to 1e8 he was not a 1anker% 7e said that he knew very little a1out 1anking% 6t was! therefore! on the advi(e of others that the
ini5uitous Federal Reserve a(t! the death warrant of +meri(an li1erty! 1e(ame law in his administration%
Mr% Chairman! there should 1e no partisanship in matters (on(erning the 1anking and (urren(y affairs of this (ountry! and 6
do not speak with any%
6n F" the National Monetary +sso(iation! under the (hairmanship of the late <enator Nelson &% +ldri(h! made a report
and presented a vi(ious 1ill (alled the National Reserve +sso(iation 1ill% This 1ill is usually spoken of as the +ldri(h 1ill%
<enator +ldri(h did not write the +ldri(h 1ill% 7e was the tool! 1ut not the a((ompli(e! of the -uropeanG1orn 1ankers who for
nearly twenty years had 1een s(heming to set up a (entral 1ank in this (ountry and who in F" had spent and were (ontinuing
to spend vast sums of money to a((omplish their purpose%
The +ldri(h 1ill was (ondemned in the platform upon whi(h Theodore Roosevelt was nominated in the year F"! and in
that same year! when &oodrow &ilson was nominated! the )emo(rati( platform! as adopted at the Baltimore (onvention!
e3pressly stated: Y&e are opposed to the +ldri(h plan for a (entral 1ank%Y This was plain language% The men who ruled the
)emo(rati( *arty then promised the people that if they were returned to power there would 1e no (entral 1ank esta1lished here
while they held the reigns of government% Thirteen months later that promise was 1roken! and the &ilson administration! under
the tutelage of those sinister &all <treet figures who stood 1ehind Colonel 7ouse! esta1lished here in our free (ountry the wormG
eaten monar(hi(al institution of the YkingIs 1ankY to (ontrol us from the top downward! and to sha(kle us from the (radle to the
grave% The Federal Reserve a(t destroyed our old and (hara(teristi( way of doing 1usiness8 it dis(riminated against our oneG
name (ommer(ial paper! the finest in the world8 it set up the anti5uated twoGname paper! whi(h is the present (urse of this
(ountry! and whi(h wre(ked every (ountry whi(h has ever given it s(ope8 it fastened down upon this (ountry the very tyranny
from whi(h the framers of the &onstitution sought to save us%
Jne of the greatest 1attles for the preservation of this Repu1li( was fought out here in 'a(ksonIs day! when the <e(ond
Bank of the ;nited <tates! whi(h was founded upon the same false prin(iples as those whi(h are here e3emplified in the Federal
Reserve a(t! was hurled out of e3isten(e% +fter the downfall of the <e(ond Bank of the ;nited <tates in =>H! the (ountry was
warned against the dangers that might ensue if the predatory interests! after 1eing (ast out! should (ome 1a(k in disguise and
unite themselves to the -3e(utive! and through him a(5uire (ontrol of the .overnment% That is what the predatory interests did
when they (ame 1a(k in the livery of hypo(risy and under false pretenses o1tained the passage of the Federal Reserve a(t%
The danger that the (ountry was warned against (ame upon us and is shown in the long train of horrors attendant upon the
affairs of the traitorous and dishonest Federal Reserve Board and the Federal Reserve 1anks are fully lia1le% This is an era of
finan(ed (rime and in the finan(ing of (rime! the Federal Reserve Board does not play the part of a disinterested spe(tator%
6t has 1een said that the draughtsman who was employed to write the te3t of the Federal Reserve 1ill used a te3t of the
+ldri(h 1ill for his purpose% 6t has 1een said that the language of the +ldri(h 1ill was used 1e(ause the +ldri(h 1ill had 1een
drawn up 1y e3pert lawyers and seemed to 1e appropriate% 6t was indeed drawn up 1y lawyers% The +ldri(h 1ill was (reated 1y
a((eptan(e 1ankers of -uropean origin in New York City% 6t was a (opy and in general a translation of the statutes of the
Rei(hs1ank and other -uropean (entral 1anks%
7alf a million dollars was spent one part of the propaganda organiAed 1y those same -uropean 1ankers for the purpose of
misleading pu1li( opinion in regard to it! and for the purpose of giving Congress the impression that there was an overwhelming
popular demand for that kind of 1anking legislation and the kind of (urren(y that goes with it! namely! an asset (urren(y 1ased
on human de1ts and o1ligations instead of an honest (urren(y 1ased on gold and silver values% )r% 7% *arker &illis had 1een
employed 1y the &all <treet 1ankers and propagandists and when the +ldri(h measure (ame to naught and he o1tained
employment with Carter .lass to assist in drawing a 1anking 1ill for the &ilson administration! he appropriated the te3t of the
+ldri(h 1ill for his purpose% There is no se(ret a1out it% The te3t of the Federal Reserve a(t was tainted from the 1eginning%
Not all of the )emo(rati( Mem1ers of the <i3tyGthird Congress voted for this great de(eption% <ome of them remem1ered
the tea(hings of 'efferson8 and! through the years! there had 1een no (riti(isms of the Federal Reserve Board and the Federal
Reserve 1anks so honest! so outGspoken! and so unsparingly as those whi(h have 1een voi(ed here 1y )emo(rats% +gain!
although a num1er of Repu1li(ans voted for the Federal Reserve a(t! the wisest and most (onservative mem1ers of the
Repu1li(an *arty would have nothing to do with it and voted against it% + few days 1efore the 1ill (ame to a vote! <enator 7enry
Ca1ot Codge! of Massa(husetts! wrote to <enator 'ohn &% &eeks as follows:
New York City, December 17, 1913
My Dear Senator Weeks:
Throuhout my !ub"ic "i#e $ ha%e su!!orte& a"" measures &esine& to take the 'o%ernment out o#
the bankin business(((( This bi"" !uts the 'o%ernment into the bankin business as ne%er
be#ore in our history an& makes, as $ un&erstan& it, a"" notes 'o%ernment notes when they
shou"& be bank notes(
The !owers %este& in the )e&era" *eser%e +oar& seem to me hih"y &anerous,
es!ecia""y where there is !o"itica" contro" o# the +oar&( $ shou"& be sorry to ho"& stock in a
bank sub,ect to such &omination( The bi"" as it stan&s seems to me to o!en the way to a %ast
in#"ation o# the currency( There is no necessity o# &we""in u!on this !oint a#ter the
remarkab"e an& most !ower#u" arument o# the senior Senator #rom New York( $ can be content
here to #o""ow the e-am!"e o# the .n"ish can&i&ate #or /ar"iament who thouht it enouh 0to
say &itto to Mr( +urke(0 $ wi"" mere"y a&& that $ &o not "ike to think that any "aw can be
!asse& which wi"" make it !ossib"e to submere the o"& stan&ar& in a #"oo& o# irre&eemab"e
!a!er currency(
$ ha& ho!e& to su!!ort this bi"", but $ can not %ote #or it as it stan&s, because it
seems to me to contain #eatures an& to rest u!on !rinci!"es in the hihest &eree menacin to
our !ros!erity, to stabi"ity in business, an& to the enera" we"#are o# the !eo!"e o# the
1nite& States(
2ery sincere"y yours,
3enry Cabot 4o&e
6n eighteen years that have passed sin(e <enator Codge wrote that letter of warning all of his predi(tions have (ome true% The
.overnment is in the 1anking 1usiness as never 1efore% +gainst its will it has 1een made the 1a(ker of horsethieves and (ard
sharps! 1ootleggers! smugglers! spe(ulators! and swindlers in all parts of the world% Through the Federal Reserve Board and the
Federal Reserve 1anks the riffraff of every (ountry is operating on the pu1li( (redit of this ;nited <tates .overnment%
Meanwhile! and on a((ount of it! we ourselves are in the midst of the greatest depression we have ever known% Thus the mena(e
to our prosperity! so feared 1y <enator Codge! has indeed stru(k home% From the +tlanti( to the *a(ifi( our (ountry has 1een
ravaged and laid waste 1y the evil pra(ti(es of the Federal Reserve Board and the Federal Reserve 1anks and the interests whi(h
(ontrol them% +t no time in our history has the general welfare of the people of the ;nited <tates 1een at a lower level or the
mind of the people so filled with despair%
Re(ently in one of our <tates ?#!### dwelling houses and farms were 1rought under the hammer in a single day% +((ording
to the Rev% Father Charles -% Coughlin! who has lately testified 1efore a (ommittee of this 7ouse! H!### houses and farms in
Jakland County! Mi(higan! have 1een sold and their erstwhile owners dispossessed% <imilar o((urren(es have pro1a1ly taken
pla(e in every (ounty in the ;nited <tates% The people who have thus 1een driven out are the wastage of the Federal Reserve a(t%
They are the vi(tims of the dishonest and uns(rupulous Federal Reserve Board and Federal Reserve 1anks% Their (hildren are the
new slaves of the au(tion 1lo(ks in the revival here of the institution of human slavery%
6n F>! 1efore the <enate Banking and Curren(y Committee! Mr% +le3ander Cassen made the following statement:
+ut the who"e scheme o# the )e&era" *eser%e bank with its commercia"5!a!er basis is an
im!ractica", cumbersome machinery, is sim!"y a co%er, to #in& a way to secure the !ri%i"ee o#
issuin money an& to e%a&e !ayment o# as much ta- u!on circu"ation as !ossib"e, an& then
contro" the issue an& maintain, instea& o# re&uce, interest rates( $t is a system that, i#
inauurate&, wi"" !ro%e to the a&%antae o# the #ew an& the &etriment o# the !eo!"e o# the
1nite& States( $t wi"" mean continue& shortae o# actua" money an& #urther e-tension o#
cre&its6 #or when there is a "ack o# rea" money !eo!"e ha%e to borrow cre&it to their cost(
+ few days 1efore the Federal Reserve a(t was passed <enator -lihu Root denoun(ed the Federal Reserve 1ill as an outrage on
our li1erties and made the following predi(tion: YCong 1efore we wake up from our dreams of prosperity through an inflated
(urren(y! our gold! whi(h alone (ould have kept us from (atastrophe! will have vanished and no rate of interest will tempt it to
return%Y
6f ever a prophe(y (ame true! that one did% 6t was impossi1le! however! for those luminous and instru(ted thinkers to
(ontrol the (ourse of events% Jn )e(em1er ">! F>! the Federal Reserve 1ill 1e(ame law! and that night Colonel 7ouse wrote to
his hidden master in &all <treet as follows:
$ want to say a wor& o# a!!reciation to you #or the si"ent but no &oubt e##ecti%e work you
ha%e &one in the interest o# currency "eis"ation an& to conratu"ate you that the measure has
#ina""y been enacte& into "aw( We a"" know that an entire"y !er#ect bi"", satis#actory to
e%erybo&y, wou"& ha%e been an im!ossibi"ity, an& $ #ee" 7uite certain that un"ess the
/resi&ent ha& stoo& as #irm as he &i& we shou"& "ike"y ha%e ha& no "eis"ation at a""( The
bi"" is a oo& one in many res!ects6 anyhow oo& enouh to start with an& to "et e-!erience
teach us in what &irection it nee&s !er#ection, which in &ue time we sha"" then et( $n any
e%ent you ha%e !ersona""y oo& reason to #ee" rati#ie& with what has been accom!"ishe&(
The words Yunless the *resident had stood as firm as he did we should likely have had no legislation at all!Y were a gentle
reminder that it was Colonel 7ouse himself! the Yholy monk!Y who had kept the *resident firm%
The foregoing letter affords striking eviden(e of the manner in whi(h the predatory interests then sought to (ontrol the
.overnment of the ;nited <tates 1y surrounding the -3e(utive with the personality and the influen(e of a finan(ial 'udas% Ceft
to itself and to the (ondu(t of its own legislative fun(tions without pressure from the -3e(utive! the Congress would not have
passed the Federal Reserve a(t% +((ording to Colonel 7ouse! and sin(e this was his report to his master! we may 1elieve it to 1e
true! the Federal Reserve a(t was passed 1e(ause &ilson stood firm8 in other words 1e(ause &ilson was under the guidan(e and
(ontrol of the most fero(ious usurers in New York through their hireling! 7ouse% The Federal Reserve a(t 1e(ame law the day
1efore Christmas -ve in the year F>! and shortly afterwards the .erman international 1ankers! Buhn! Coe1 and Co%! sent one
of their partners here to run it%
6n F>! when the Federal Reserve 1ill was su1mitted to the )emo(rati( (au(us! there was a dis(ussion in regard to the
form the proposed paper (urren(y should take% The proponents of the Federal Reserve a(t! in their determination to (reate a new
kind of paper money! had not needed to go outside of the +ldri(h 1ill for a model% By the terms of the +ldri(h 1ill! 1ank notes
were to 1e issued 1y the National Reserve +sso(iation and were to 1e se(ured partly 1y gold or lawful money and partly 1y
(ir(ulating eviden(es of de1t% The first draft of the Federal Reserve 1ill presented the same general plan! that is! for 1ank notes as
opposed to .overnment notes! 1ut with (ertain differen(es of regulation%
&hen the provision for the issuan(e of Federal Reserve notes was pla(ed 1efore *resident &ilson he approved of it! 1ut
other )emo(rats were more mindful of )emo(rati( prin(iples and a great protest greeted the plan% Foremost amongst those who
denoun(ed it was &illiam 'ennings Bryan! the <e(retary of <tate% Bryan wished to have the Federal Reserve notes issued as
.overnment o1ligations% *resident &ilson had an interview with him and found him adamant% +t the (on(lusion of the interview
Bryan left with the understanding that he would resign if the notes were made 1ank notes% The *resident then sent for his
<e(retary and e3plained the matter to him% Mr% Tumulty went to see Bryan and Bryan took from his li1rary shelves a 1ook
(ontaining all the )emo(rati( platforms and read e3tra(ts from them 1earing on the matter of the pu1li( (urren(y% Returning to
the *resident! Mr% Tumulty told him what had happened and ventured the opinion that Mr% Bryan was right and that Mr% &ilson
was wrong% The *resident then asked Mr% Tumulty to show him where the )emo(rati( *arty in its national platforms had ever
taken the view indi(ated 1y Bryan% Mr% Tumulty gave him the 1ook! whi(h he had 1rought from BryanIs house! and the *resident
read very (arefully plank after plank on the (urren(y% 7e then said! Y6 am (onvin(ed there is a great deal in what Mr% Bryan
says!Y and thereupon it was arranged that Mr% Tumulty should see the proponents of the Federal Reserve 1ill in an effort to 1ring
a1out an ad4ustment of the matter%
The remainder of this story may 1e told in the words of <enator .lass% Con(erning BryanIs opposition to the plan of
allowing the proposed Federal Reserve notes to take the form of 1ank notes and the manner in whi(h *resident &ilson and the
proponents of the Federal Reserve 1ill yielded to Bryan in return for his support of the measure! <enator .lass makes the
following statement:
The on"y other #eature o# the currency bi"" aroun& which a con#"ict rae& at this time was the
note5issue !ro%ision( 4on be#ore $ knew it, the /resi&ent was &es!erate"y worrie& o%er it(
3is economic oo& sense to"& him the notes shou"& be issue& by the banks an& not by the
'o%ernment6 but some o# his a&%isers to"& him Mr( +ryan cou"& not be in&uce& to i%e his
su!!ort to any bi"" that &i& not !ro%i&e #or a 0'o%ernment note(0 There was in the Senate an&
3ouse a "are +ryan #o""owin which, unite& with a natura""y a&%ersary !arty %ote, cou"&
!re%ent "eis"ation( Certain o%ercon#i&ent ent"emen !ro##ere& their ser%ices in the task o#
0manain +ryan(0 They &i& not bu&e him(((( When a &ecision cou"& no "oner be !ost!one& the
/resi&ent summone& me to the White 3ouse to say he wante& )e&era" *eser%e notes to 0be
ob"iations o# the 1nite& States(0 $ was #or an instant s!eech"ess( With a"" the earnestness
o# my bein $ remonstrate&, !ointin out the unscienti#ic nature o# such a thin, as we"" as
the e%i&ent inconsistency o# it(
0There is not, in truth, any 'o%ernment ob"iation here, Mr( /resi&ent,0 $ e-c"aime&(
0$t wou"& be a !retense on its #ace( Was there e%er a 'o%ernment note base& !rimari"y on the
!ro!erty o# bankin institutions8 Was there e%er a 'o%ernment issue not one &o""ar o# which
cou"& be !ut out e-ce!t by &eman& o# a bank8 The sueste& 'o%ernment ob"iation is so remote
it cou"& ne%er be &iscerne&,0 $ conc"u&e&, out o# breath(
0.-act"y so, '"ass,0 earnest"y sai& the /resi&ent( 0.%ery wor& you say is true6 the
'o%ernment "iabi"ity is a mere thouht( 9n& so, i# we can ho"& to the substance o# the thin
an& i%e the other #e""ow the sha&ow, why not &o it, i# thereby we may sa%e our bi""80
<hadow and su1stan(e[ Jne (an see from this how little *resident &ilson knew a1out 1anking% ;nknowingly! he gave the
su1stan(e to the international 1anker and the shadow to the (ommon man% Thus was Bryan (ir(umvented in his efforts to uphold
the )emo(rati( do(trine of the rights of the people% Thus the Yuns(ientifi( 1lurY upon the 1ill was perpetrated% The Yuns(ientifi(
1lur!Y however! was not the fa(t that the ;nited <tates .overnment! 1y the terms of BryanIs edi(t! was o1liged to assume as an
o1ligation whatever (urren(y was issued% Mr% Bryan was right when he insisted that the ;nited <tates should preserve its
sovereignty over the pu1li( (urren(y% The Yuns(ientifi( 1lurY was the nature of the (urren(y itself! a nature whi(h makes it unfit
to 1e assumed as an o1ligation of the ;nited <tates .overnment% 6t is the worst (urren(y and the most dangerous this (ountry has
ever known% &hen the proponents of the a(t saw that the )emo(rati( do(trine would not permit them to let the proposed 1anks
issue the new (urren(y as 1ank notes! they should have stopped at that% They should not have foisted that kind of (urren(y!
namely! an asset (urren(y! on the ;nited <tates .overnment% They should not have made the .overnment lia1le on the private
de1ts of individuals and (orporations and! least of all! on the private de1ts of foreigners%
The Federal Reserve note is essentially unsound% +s Bemmerer says: YThe Federal Reserve notes! therefore! in form have
some of the 5ualities of .overnment paper money! 1ut! in su1stan(e! are almost a pure asset (urren(y possessing a .overnment
guaranty against whi(h (ontingen(y the .overnment has made no provision whatever%Y 7on% -%'% 7ill! a former Mem1er of the
7ouse! said! and truly: YThey are o1ligations of the .overnment for whi(h the ;nited <tates has re(eived nothing and for the
payment of whi(h at any time it assumes the responsi1ility looking to the Federal Reserve to re(oup itself%Y
6f the ;nited <tates .overnment is to redeem the Federal Reserve notes when the general pu1li( finds out what it (osts to
deliver this flood of paper money to the twelve Federal Reserve 1anks! and if the .overnment has made no provision for
redeeming them! the first element of unsoundness is not far to seek%
Before the Banking and Curren(y Committee! when the Federal Reserve 1ill was under dis(ussion! Mr% CroAier! of
Cin(innati! said:
$n other wor&s, the im!eria" !ower o# e"asticity o# the !ub"ic currency is wie"&e& e-c"usi%e"y
by these centra" cor!orations owne& by the banks( This is a "i#e an& &eath !ower o%er a""
"oca" banks an& a"" business( $t can be use& to create or &estroy !ros!erity, to war& o## or
cause strinencies an& !anics( +y makin money arti#icia""y scarce, interest rates throuhout
the country can be arbitrari"y raise& an& the bank ta- on a"" business an& cost o# "i%in
increase& #or the !ro#it o# the banks ownin these reiona" centra" banks, an& without the
s"ihtest bene#it to the !eo!"e( These twe"%e cor!orations toether co%er the who"e country
an& mono!o"i:e an& use #or !ri%ate ain e%ery &o""ar o# the !ub"ic currency an& a"" !ub"ic
re%enue o# the 1nite& States( Not a &o""ar can be !ut into circu"ation amon the !eo!"e by
their 'o%ernment without the consent o# an& on terms #i-e& by these twe"%e !ri%ate money
trusts(
6n defian(e of this and all other warnings! the proponents of the Federal Reserve a(t (reated the twelve private (redit
(orporations and gave them an a1solute monopoly of the (urren(y of the ;nited <tates! not of the Federal Reserve notes alone!
1ut of all the (urren(y! the Federal Reserve a(t providing ways 1y means of whi(h the gold and general (urren(y in the hands of
the +meri(an people (ould 1e o1tained 1y the Federal Reserve 1anks in e3(hange for Federal Reserve notes! whi(h are not
money! 1ut merely promises to pay money% <in(e the evil day when this was done the initial monopoly has 1een e3tended 1y
vi(ious amendments to the Federal Reserve a(t and 1y the unlawful and treasona1le pra(ti(es of the Federal Reserve Board and
the Federal Reserve 1anks%
Mr% Chairman! when a Chinese mer(hant sells human hair to a *aris wigmaker and 1ills him in dollars! the Federal Reserve
1anks (an 1uy his 1ill against the wigmaker and then use that 1ill as (ollateral for the Federal Reserve notes% The ;nited <tates
.overnment thus pays the Chinese mer(hant the de1t of the wigmaker and gets nothing in return e3(ept a shady title to the
Chinese hair%
Mr% Chairman! if a <(ottish distiller wishes to send a (argo of <(ot(h whiskey to the ;nited <tates! he (an draw his 1ill
against the pur(hasing 1ootlegger in dollars8 and after the 1ootlegger has a((epted it 1y writing his name a(ross the fa(e of it! the
<(ot(h distiller (an send that 1ill to the nefarious open dis(ount market in New York City! where the Federal Reserve Board and
the Federal Reserve 1anks will 1uy it and use it as (ollateral for a new issue of Federal Reserve notes% Thus the .overnment of
the ;nited <tates pays the <(ot(h distiller for the whiskey 1efore it is shipped8 and if it is lost on the way! or if the Coast .uard
seiAes it and destroys it! the Federal Reserve 1anks simply write off the loss and the .overnment never re(overs the money that
was paid to the <(ot(h distiller% &hile we are attempting to enfor(e prohi1ition here! the Federal Reserve Board and the Federal
Reserve 1anks are finan(ing the distillery 1usiness in -urope and paying 1ootleggersI 1ills with the pu1li( (redit of the ;nited
<tates .overnment%
Mr% Chairman! if a .erman 1rewer ships 1eer to this (ountry or anywhere else in the world and draws his 1ill for it in
dollars! the Federal Reserve 1anks will 1uy that 1ill and use it as (ollateral for Federal Reserve notes% Thus! they (ompel our
.overnment to pay the .erman 1rewer for his 1eer% &hy should the Federal Reserve Board and the Federal Reserve 1anks 1e
permitted to finan(e the 1rewing industry in .ermany! either in this way or as they do 1y (ompelling small and fearful ;nited
<tates 1anks to take sto(k in the 6sen1e(k 1rewery and in the .erman 1ank for 1rewing industries?
Mr% Chairman! if )ynamit No1el of .ermany wishes to sell dynamite to 'apan to use in Man(huria or elsewhere! it (an
draw its 1ill against the 'apanese (ustomers in dollars and send that 1ill to the nefarious open dis(ount market in New York City!
where the Federal Reserve Board and Federal Reserve 1anks will 1uy it and use it as (ollateral for a new issue of Federal
Reserve notes! while at the same time the Federal Reserve Board will 1e helping )ynamit No1el 1y stuffing its sto(k into the
;nited <tates 1anking system% &hy should we send our representatives to the disarmament (onferen(e at .eneva while the
Federal Reserve Board and the Federal Reserve 1anks are making our .overnment pay 'apanese de1ts to .erman munition
makers?
Mr% Chairman! if a 1ean grower of Chile wishes to raise a (rop of 1eans and sell them to a 'apanese (ustomer! he (an draw
a 1ill against his prospe(tive 'apanese (ustomer in dollars and have it pur(hased 1y the Federal Reserve Board and Federal
Reserve 1anks and get the money out of this (ountry at the e3pense of the +meri(an people 1efore he has even planted the 1eans
in the ground%
Mr% Chairman! if a .erman in .ermany wishes to e3port goods to <outh +meri(a or anywhere else! he (an draw his 1ill
against his (ustomer and send it to the ;nited <tates and get the money out of this (ountry 1efore he ships or even manufa(tures
the goods%
Mr% Chairman! why should the (urren(y of the ;nited <tates 1e issued on the strength of Chinese human hair? &hy should
it 1e issued on the trade whims of a wigmaker? &hy should it 1e issued on the strength of .erman 1eer? &hy should it 1e
issued on the (rop of unplanted 1eans to 1e grown in Chile for 'apanese (onsumption? &hy should the .overnment of the
;nited <tates 1e (ompelled to issue many 1illions of dollars every year to pay the de1ts of one foreigner to another foreigner?
&as it for this that our nationalG1ank depositors had their money taken out of our 1anks and shipped a1road? &as it for this that
they had to lose it? &hy should the pu1li( (redit of the ;nited <tates .overnment and likewise money 1elonging to our
nationalG1ank depositors 1e used to support foreign 1rewers! nar(oti( drug vendors! whiskey distillers! wigmakers! humanGhair
mer(hants! Chilean 1ean growers! and the like? &hy should our nationalG1ank depositors and our .overnment 1e for(ed to
finan(e the munition fa(tories of .ermany and <oviet Russia?
Mr% Chairman! if a .erman in .ermany! wishes to sell wheel1arrows to another .erman! he (an draw a 1ill in dollars and
get the money out of the Federal Reserve 1anks 1efore an +meri(an farmer (ould e3plain his re5uest for a loan to move his (rop
to market% 6n .ermany! when (redit instruments are 1eing given! the (reditors say! Y<ee you! it must 1e of a kind that 6 (an (ash
at the reserve%Y Jther foreigners feel the same way% The reserve to whi(h these gentry refer is our reserve! whi(h! as you know!
is entirely made up of money 1elonging to +meri(an 1ank depositors% 6 think foreigners should (ash their own trade paper and
not send it over here to 1ankers who use it to fish (ash out of the po(kets of the +meri(an people%
Mr% Chairman! there is nothing like the Federal Reserve pool of (onfis(ated 1ank deposits in the world% 6t is a pu1li( trough
of +meri(an wealth in whi(h foreigners (laim rights e5ual to or greater than those of +meri(ans% The Federal Reserve 1anks are
agents of the foreign (entral 1anks% They use our 1ank depositorsI money for the 1enefit of their foreign prin(ipals% They 1arter
the pu1li( (redit of the ;nited <tates .overnment and hire it out to foreigners at a profit to themselves%
+ll this is done at the e3pense of the ;nited <tates .overnment! and at a si(kening loss to the +meri(an people% Jnly our
great wealth ena1led us to stand the drain of it as long as we did%
6 1elieve that the nations of the world would have settled down after the &orld &ar more pea(efully if we had not had this
standing temptation here GG this pool of our 1ank depositorsI money given to private interests and used 1y them in (onne(tion
with illimita1le drafts upon the pu1li( (redit of the ;nited <tates .overnment% The Federal Reserve Board invited the world to
(ome in and to (arry away (ash! (redit! goods! and everything else of value that was mova1le% ,alues amounting to many
1illions of dollars have 1een taken out of this (ountry 1y the Federal Reserve Board and the Federal Reserve 1anks for the
1enefit of their foreign prin(ipals% The ;nited <tates has 1een ransa(ked and pillaged% Jur stru(tures have 1een gutted and only
the walls are left standing% &hile this (rime was 1eing perpetrated everything the world (ould rake up to sell us was 1rought in
here at our own e3pense 1y the Federal Reserve Board and the Federal Reserve 1anks until our markets were swamped with
unneeded and unwanted imported goods pri(ed far a1ove their value and made to e5ual the dollar volume of our honest e3ports
and to kill or redu(e our favora1le 1alan(e of trade% +s agents of the foreign (entral 1anks! the Federal Reserve Board and the
Federal Reserve 1anks try 1y every means within their power to redu(e our favora1le 1alan(e of trade% They a(t for their foreign
prin(ipals and they a((ept fees from foreigners for a(ting against the 1est interests of the ;nited <tates% Naturally there has 1een
great (ompetition among foreigners for the favors of the Federal Reserve Board%
&hat we need to do is to send the reserves of our national 1anks home to the people who earned and produ(ed them and
who still own them and to the 1anks whi(h were (ompelled to surrender them to predatory interests% &e need to destroy the
Federal Reserve pool! wherein our nationalG1ank reserves are impounded for the 1enefit of the foreigners% &e need to make it
very diffi(ult for outlanders to draw money away from us% &e need to save +meri(a for +meri(ans%
Mr% Chairman! when you hold a P# Federal Reserve note in your hand you are holding a pie(e of paper whi(h sooner or
later is going to (ost the ;nited <tates .overnment P# in gold! unless the .overnment is o1liged to give up the gold standard% 6t
is prote(ted 1y a reserve of $# per (ent% or P$ in gold% 6t is 1ased on Cim1urger (heese! reputed to 1e in foreign warehouses8 or
on (ans purported to (ontain peas 1ut whi(h may (ontain salt water instead8 or on horse meat8 illi(it drugs8 1ootleggersI fan(ies8
rags and 1ones from <oviet Russia of whi(h the ;nited <tates imported over a million dollarsI worth last year8 on wines!
whiskey! natural gas! on goat or dog fur! garli( on the string! or Bom1ay du(ks% 6f you like to have paper money whi(h is se(ured
1y su(h (ommodities! you have it in the Federal Reserve note% 6f you desire to o1tain the thing of value upon whi(h this paper
(urren(y is 1ased GG that is! the Cim1urger (heese! the whiskey! the illi(it drugs! or any of the other staples GG you will have a
very hard time finding them% Many of these worshipful (ommodities are in foreign (ountries% +re you going to .ermany to
inspe(t her warehouses to see if the spe(ified things of value are there? 6 think not% +nd what is more! 6 do not think you would
find them there if you did go%
6mmense sums 1elonging to our nationalG1ank depositors have 1een given to .ermany on no (ollateral se(urity whatever%
The Federal Reserve Board and the Federal Reserve 1anks have issued ;nited <tates (urren(y on mere finan(e drafts drawn 1y
.ermans% Billions upon 1illions of our money has 1een pumped into .ermany and money is still 1eing pumped into .ermany 1y
the Federal Reserve Board and the Federal Reserve 1anks% 7er worthless paper is still 1eing negotiated here and renewed here
on the pu1li( (redit of the ;nited <tates .overnment and at the e3pense of the +meri(an people% Jn +pril "H! F>"! the Federal
Reserve outfit sent PHL#!###! 1elonging to +meri(an 1ank depositors! in gold to .ermany% + week later! another P>##!### in
gold was shipped to .ermany in the same way% +1out the middle of May P"!###!### in gold was shipped to .ermany 1y the
Federal Reserve Board and the Federal Reserve 1anks% +lmost every week there is a shipment of gold to .ermany% These
shipments are not made for profit on the e3(hange sin(e the .erman marks are 1elow parity with the dollar%
Mr% Chairman! 6 1elieve that the nationalG1ank depositors of the ;nited <tates are entitled to know what the Federal
Reserve Board and the Federal Reserve 1anks are doing with their money% There are millions of nationalG1ank depositors in this
(ountry who do not know that a per(entage of every dollar they deposit in a mem1er 1ank of the Federal Reserve system goes
automati(ally to +meri(an agents of the foreign 1anks and that all their deposits (an 1e paid away to foreigners without their
knowledge or (onsent 1y the (rooked ma(hinery of the Federal Reserve a(t and the 5uestiona1le pra(ti(es of the Federal Reserve
Board and the Federal Reserve 1anks% Mr% Chairman! the +meri(an people should 1e told the truth 1y their servants in offi(e%
6n F># we had over half a 1illion dollars outstanding daily to finan(e foreign goods stored in or shipped 1etween
(ountries% 6n its yearly total! this item amounts to several 1illion dollars% &hat goods are those on whi(h the Federal Reserve
1anks yearly pledge several 1illions of dollars of the pu1li( (redit of the ;nited <tates? &hat goods are those whi(h are hidden
in -uropean and +siati( storehouses and whi(h have never 1een seen 1y any offi(er of this .overnment! 1ut whi(h are 1eing
finan(ed on the pu1li( (redit of the ;nited <tates .overnment? &hat goods are those upon whi(h the ;nited <tates .overnment
is 1eing o1ligated 1y the Federal Reserve 1anks to issue Federal Reserve notes to the e3tent of several 1illions of dollars a year?
The Federal Reserve Board and the Federal Reserve 1anks have 1een international 1ankers from the 1eginning! with the
;nited <tates .overnment as their enfor(ed 1anker and supplier of (urren(y% But it is none the less e3traordinary to see those
twelve private (redit monopolies 1uying the de1ts of foreigners against foreigners in all parts of the world and asking the
.overnment of the ;nited <tates for new issues of Federal Reserve notes in e3(hange for them%
6 see no reason why the +meri(an ta3payers should 1e hewers of wood and drawers of water for the -uropean and +siati(
(ustomers of the Federal Reserve 1anks% 6 see no reason why a worthless a((eptan(e drawn 1y a foreign swindler as a means of
getting gold out of this (ountry should re(eive the lowest and (hoi(est rate from the Federal Reserve Board and 1e treated as
1etter se(urity than the note of an +meri(an farmer living on +meri(an land%
The magnitude of the a((eptan(e ra(ket! as it has 1een developed 1y the Federal Reserve 1anks! their foreign
(orrespondents! and the predatory -uropeanG1orn 1ankers who set up the Federal Reserve institution here and taught our own
1rand of pirates how to loot the people GG 6 say the magnitude of this ra(ket is estimated to 1e in the neigh1orhood of
PF!###!###!### a year% 6n the past ten years it is said to have amounted to PF#!###!###!###% 6n my opinion! it has amounted to
several times as mu(h% Coupled with this you have! to the e3tent of 1illions of dollars! the gam1ling in the ;nited <tates
se(urities! whi(h takes pla(e in the same open dis(ount market GG a gam1ling upon whi(h the Federal Reserve Board is now
spending P##!###!### per week%
Federal Reserve notes are taken from the ;nited <tates .overnment in unlimited 5uantities% 6s it strange that the 1urden of
supplying these immense sums of money to the gam1ling fraternity has at last proved too heavy for the +meri(an people to
endure? &ould it not 1e a national (alamity if the Federal Reserve Board and the Federal Reserve 1anks should again 1ind this
1urden down on the 1a(ks of the +meri(an people and! 1y means of the long rawhide whips of the (redit masters! (ompel them
to enter another seventeen years of slavery? They are trying to do that now% They are taking P##!###!### of the pu1li( (redit of
the ;nited <tates .overnment every week in addition to all their other seiAures! and they are spending that money in the
nefarious open market in New York City in a desperate gam1le to reesta1lish their graft as a going (on(ern%
They are putting the ;nited <tates .overnment in de1t to the e3tent of P##!###!### a week! and with the money they are
1uying up our .overnment se(urities for themselves and their foreign prin(ipals% Jur people are disgusted with the e3periments
of the Federal Reserve Board% The Federal Reserve Board is not produ(ing a loaf of 1read! a yard of (loth! a 1ushel of (orn! or a
pile of (ordwood 1y its (he(kGkiting operations in the money market%
+ fortnight or so ago great aid and (omfort was given to 'apan 1y the firm of +% .erli K <ons! of New York! an importing
firm! whi(h 1ought P?!###!### worth of raw silk from the 'apanese .overnment% Federal Reserve notes will 1e issued to pay
that amount to the 'apanese .overnment! and these notes will 1e se(ured 1y money 1elonging to our nationalG1ank depositors%
&hy should ;nited <tates (urren(y 1e issued on this de1t? &hy should ;nited <tates (urren(y 1e issued to pay the de1t of
.erli K <ons to the 'apanese .overnment? The Federal Reserve Board and the Federal Reserve 1anks think more of the
silkworms of 'apan than they do of +meri(an (itiAens% &e do not need P?!###!### work of silk in this (ountry at the present
time! not even to furnish work to dyers and finishers% &e need to wear homeGgrown and +meri(anGmade (lothes and to use our
own money for our own goods and staples% &e (ould spend P?!###!### in the ;nited <tates of +meri(a on +meri(an (hildren
and that would 1e a 1etter investment for us than 'apanese silk pur(hased on the pu1li( (redit of the ;nited <tates .overnment%
Mr% <peaker! on the >th of 'anuary of this year 6 addressed the 7ouse on the su14e(t of the Re(onstru(tion Finan(e
Corporation% 6n the (ourse of my remarks 6 made the following statement:
$n 19;< the member banks o# the )e&era" *eser%e system borrowe& =>?,@9<,>9?,??? #rom the
)e&era" *eser%e banks on their #i#teen5&ay !romissory notes( Think o# itA Si-ty bi""ion
&o""ars !ayab"e u!on &eman& in o"& in the course o# one sin"e year( The actua" !ayment o#
such ob"iations ca""s #or si- times as much monetary o"& as there is in the entire wor"&(
Such transactions re!resent a rant in the course o# one sin"e year o# about =7,???,??? to
e%ery member bank o# the )e&era" *eser%e system( $s it any won&er that there is a &e!ression
in this country8 $s it any won&er that 9merican "abor, which u"timate"y !ays the cost o# a""
bankin o!erations o# this country, has at "ast !ro%e& une7ua" to the task o# su!!"yin this
hue tota" o# cash an& cre&it #or the bene#it o# the stock5market mani!u"ators an& #orein
swin&"ers8
Mr% Chairman! some of my (olleagues have asked for more spe(ifi( information (on(erning this stupendous graft! this frightful
1urden whi(h has 1een pla(ed on the wage earners and ta3payers of the ;nited <tates for the 1enefit of the Federal Reserve
Board and the Federal Reserve 1anks% They were surprised to learn that mem1er 1anks of the Federal Reserve system had
re(eived the enormous sum of P?#!LF=!?F#!### from the Federal Reserve Board and the Federal Reserve 1anks on their
promissory notes in the (ourse of one single year! namely! F"=% +nother Mem1er of this 7ouse! Mr% Beedy! the honora1le
gentleman from Maine! has 5uestioned the a((ura(y of my statement and has informed me that the Federal Reserve Board denies
a1solutely that these figures are (orre(t% This Mem1er has said to me that the thing is unthinka1le! that it (an not 1e! that it is
1eyond all reason to think that the Federal Reserve Board and the Federal Reserve 1anks should have so su1sidiAed and
endowed their favorite 1anks of the Federal Reserve system% This Mem1er is horrified at the thought of a graft so great! a 1ounty
so detrimental to the pu1li( welfare as si3ty and a half 1illion dollars a year and more shoveled out to favored 1anks of the
Federal Reserve system%
6n F>#! while the spe(ulating 1anks were getting out of the sto(k market at the e3pense of the general pu1li(! the Federal
Reserve Board and the Federal Reserve 1anks advan(ed them P>!#""!H="!###% This shows that when the 1anks were gam1ling
on the pu1li( (redit of the ;nited <tates .overnment as represented 1y the Federal Reserve (urren(y! they were su1sidiAed to
any amount they re5uired 1y the Federal Reserve Board and the Federal Reserve 1anks% &hen the swindle 1egan to fall! the
1ankers knew it in advan(e and withdrew from the market% They got out with whole skins and left the people of the ;nited
<tates to pay the piper%
Jn Novem1er "! F>! 6 addressed a letter to the Federal Reserve Board asking for the aggregate total of mem1er 1ank
1orrowing in the years F"=! F"F! F>#% 6n due (ourse! 6 re(eived a reply from the Federal Reserve Board! dated Novem1er F!
F>! the pertinent part of whi(h reads as follows:
My Dear Conressman:
$n re!"y to your "etter o# No%ember ;, you are a&%ise& that the areate amount o# #i#teen5
&ay !romissory notes o# member banks &urin each o# the !ast three ca"en&er years has been as
#o""ows:
19;< ( ( ( ( ( ( ( ( ( ( ( ( ( =>?,@9<,>9?,???
19;9 ( ( ( ( ( ( ( ( ( ( ( ( ( ( @<,?B>,>97,???
193? ( ( ( ( ( ( ( ( ( ( ( ( ( ( 13,?;;,7<;,???
This will show the gentleman from Maine the a((ura(y of my statement% +s for the denial of these fa(ts made to him 1y the
Federal Reserve Board! 6 (an only say that it must have 1een prompted 1y fright! sin(e hanging is too good for a .overnment
1oard whi(h permitted su(h a misuse of .overnment funds and (redit%
My friend from Bansas! Mr% M(.ugin! has stated that he thought the Federal Reserve Board and the Federal Reserve 1anks
lent money 1y redis(ounting% <o they do! 1ut they lend (omparatively little that way% The real redis(ounting that they do has
1een (alled a mere penny in the slot 1usiness% 6t is too slow for genuine high flyers% They dis(ourage it% They prefer to su1sidiAe
their favorite 1anks 1y making these P?#!###!###!### advan(es! and they prefer to a(5uire a((eptan(es in the notorious open
dis(ount market in New York! where they (an use them to (ontrol the pri(es of sto(ks and 1onds on the e3(hanges% For every
dollar they advan(ed on redis(ounts in F"= they lent P>> to their favorite 1anks for gam1ling purposes% 6n other words! their
redis(ounts in F"= amounted to P!=$!"H!###! while their loans to mem1er 1anks amounted to P?#!LF=!?F#!###% +s for their
openGmarket operations! these are on a stupendous s(ale! and no ta3 is paid on the a((eptan(es they handle8 and their foreign
prin(ipals! for whom they do a 1usiness of several 1illion dollars every year! pay no in(ome ta3 on their profits to the ;nited
<tates .overnment%
This is the 'ohn Caw swindle all over again% The theft of Teapot )ome was trifling (ompared to it% &hat king ever ro11ed
his su14e(ts to su(h an e3tent as the Federal Reserve Board and the Federal Reserve 1anks have ro11ed us? 6s it any wonder that
there have lately 1een ninety (ases of starvation in one of the New York hospitals? 6s there any wonder that the (hildren of this
(ountry are 1eing dispersed and a1andoned?
The .overnment and the people of the ;nited <tates have 1een swindled 1y swindlers delu3e to whom the a(5uisition of
+meri(an gold or a par(el of Federal Reserve notes presented no more diffi(ulty than the drawing up of a worthless a((eptan(e
in a (ountry not su14e(t to the laws of the ;nited <tates! 1y sharpers not su14e(t to the 4urisdi(tion of the ;nited <tates (ourts!
sharpers with a strong 1anking Yfen(eY on this side of the water GG a Yfen(eY a(ting as a re(eiver of the worthless paper (oming
from a1road! endorsing it and getting the (urren(y out of the Federal Reserve 1anks for it as 5ui(kly as possi1le! e3(hanging that
(urren(y for gold! and in turn transmitting the gold to its foreign (onfederates%
<u(h were the e3ploits of 6var Breuger! Mr% 7ooverIs friend! and his hidden &all <treet 1a(kers% -very dollar of the
1illions Breuger and his gang drew out of this (ountry on a((eptan(es was drawn from the .overnment and the people of the
;nited <tates through the Federal Reserve Board and the Federal Reserve 1anks% The (redit of the ;nited <tates .overnment
was peddled to him 1y the Federal Reserve Board and the Federal Reserve 1anks for their own private gain% That is what the
Federal Reserve Board and the Federal Reserve 1anks have 1een doing for many years% They have 1een peddling the (redit of
this .overnment and the signature of this .overnment to the swindlers and spe(ulators of all nations% That is what happens when
a (ountry forsakes its &onstitution and gives its sovereignty over the pu1li( (urren(y to private interests% .ive them the flag and
they will sell it%
The nature of BreugerIs organiAed swindle and the 1ankrupt (ondition of BreugerIs (om1ine was known here last 'une
when 7oover sought to e3empt BreugerIs loan to .ermany of P"L!###!### from the operation of the 7oover moratorium% The
1ankrupt (ondition of BreugerIs swindle was known here last summer when P>#!###!### was taken from the +meri(an
ta3payers 1y (ertain 1ankers in New York for the ostensi1le purpose of permitting Breuger to make a loan to Colom1ia%
Colom1ia never saw that money% The nature of BreugerIs swindle and the 1ankrupt (ondition of Breuger was known here in
'anuary when he visited his friend! Mr% 7oover! at the &hite 7ouse% 6t was known here in Mar(h 1efore he went to *aris and
(ommitted sui(ide there%
Mr% Chairman! 6 think the people of the ;nited <tates are entitled to know how many 1illions of dollars were pla(ed at the
disposal of Breuger and his giganti( (om1ine 1y the Federal Reserve Board and the Federal Reserve 1anks and to know how
mu(h of our .overnment (urren(y was issued and lost in the finan(ing of that great swindle in the years during whi(h the
Federal Reserve Board and the Federal Reserve 1anks took (are of BreugerIs re5uirements%
Mr% Chairman! 6 1elieve there should 1e a (ongressional investigation of the operations of Breuger and Toll in the ;nited
<tates and that <wedish Mat(h! 6nternational Mat(h! the <wedishG+meri(an 6nvestment Corporation! and all related enterprises!
in(luding the su1sidiary (ompanies of Breuger and Toll! should 1e investigated and that the issuan(e of ;nited <tates (urren(y
in (onne(tion with those enterprises and the use of our nationalG1ank depositorsI money for BreugerIs 1enefit should 1e made
known to the general pu1li(% 6 am referring! not only to the se(urities whi(h were floated and sold in this (ountry! 1ut also to the
(ommer(ial loans to BreugerIs enterprises and the mass finan(ing of BreugerIs (ompanies 1y the Federal Reserve Board and the
Federal Reserve 1anks and the predatory institutions whi(h the Federal Reserve Board and the Federal Reserve 1anks shield and
har1or%
+ few days ago! the *resident of the ;nited <tates! with a white fa(e and shaking hands! went 1efore the <enate on 1ehalf
of the moneyed interests and asked the <enate to levy a ta3 on the people so that foreigners might know that the ;nited <tates
would pay its de1t to them% Most +meri(ans thought it was the other way around% &hat do the ;nited <tates owe to foreigners?
&hen and 1y whom was the de1t in(urred? 6t was in(urred 1y the Federal Reserve Board and the Federal Reserve 1anks when
they peddled the signature of this .overnment to foreigners for a pri(e% 6t is what the ;nited <tates .overnment has to pay to
redeem the o1ligations of the Federal Reserve Board and the Federal Reserve 1anks% +re you going to let those thieves get off
s(ot free? 6s there one law for the looter who drives up to the door of the ;nited <tates Treasury in his limousine and another for
the ;nited <tates veterans who are sleeping on the floor of a dilapidated house on the outskirts of &ashington?
The Baltimore K Jhio Railroad is here asking for a large loan from the people and the wage earners and the ta3payers of
the ;nited <tates% 6t is 1egging for a handGout from the .overnment% 6t is standing! (ap in hand! at the door of the Re(onstru(tion
Finan(e Corporation! where all the other 4a(kals have gathered to the feast% 6t is asking for money that was raised from the
people 1y ta3ation! and wants this money of the poor for the 1enefit of Buhn! Coe1! K Co%! the .erman international 1ankers% 6s
there one law for the Baltimore K Jhio Railroad and another for the needy veterans it threw off its freight (ars the other day? 6s
there one law for sleek and prosperous swindlers who (all themselves 1ankers and another law for the soldiers who defended the
;nited <tates flag?
Mr% Chairman! some people are horrified 1e(ause the (ollateral 1ehind Breuger and Toll de1entures was removed and
worthless (ollateral su1stituted for it% &hat is this 1ut what is 1eing done daily 1y the Federal Reserve 1anks? &hen the Federal
Reserve a(t was passed! the Federal Reserve 1anks were allowed to su1stitute Yother like (ollateralY for (ollateral 1ehind Federal
Reserve notes 1ut 1y an amendment o1tained at the re5uest of the (orrupt and dishonest Federal Reserve Board! the a(t was
(hanged so that the word YlikeY was stri(ken out% +ll that immense trou1le was taken here in Congress so that the law would
permit the Federal Reserve 1anks to swit(h (ollateral% +t the present time 1ehind the s(enes in the Federal Reserve 1anks there is
a nightGandGday movement of (ollateral% + visiting -nglishman! leaving the ;nited <tates a few weeks ago! said that things
would look 1etter here after Ythey (leaned up the mess at &ashington%Y Cleaning up the mess (onsists in fooling the people and
making them pay a se(ond time for the 1ad foreign investments of the Federal Reserve Board and the Federal Reserve 1anks% 6t
(onsists in moving that heavy load of du1ious and worthless foreign paper GG the 1ills of wigmakers! 1rewers! distillers! nar(oti(G
drug vendors! munition makers! illegal finan(e drafts! and worthless foreign se(urities! out of the 1anks and putting it on the
1a(k of +meri(an la1or% That is what the Re(onstru(tion Finan(e Corporation is doing now% They talk a1out loans to 1anks and
railroads 1ut they say very little a1out that other 1usiness of theirs whi(h (onsists in relieving the swindlers who promoted
investment trusts in this (ountry and dumped worthless foreign se(urities into them and then resold that mess of pottage to
+meri(an investors under (over of their own (orporate titles% The Re(onstru(tion Finan(e Corporation is taking over those
worthless se(urities from those investment trusts with ;nited <tates Treasury money at the e3pense of the +meri(an ta3payer
and the wage earner%
6t will take us twenty years to redeem our .overnment% Twenty years of penal servitude to pay off the gam1ling de1ts of
the traitorous Federal Reserve Board and the Federal Reserve 1anks and to earn again that vast flood of +meri(an wages and
savings! 1ank deposits! and ;nited <tates .overnment (redit whi(h the Federal Reserve Board and the Federal Reserve 1anks
e3ported out of this (ountry to their foreign prin(ipals%
The Federal Reserve Board and the Federal Reserve 1anks lately (ondu(ted an antiGhoarding (ampaign here% Then they
took that e3tra money whi(h they had persuaded the +meri(an people to put into the 1anks and they sent it to -urope along with
the rest% 6n the last several months! they have sent P!>##!###!### in gold to their foreign employers! their foreign masters! and
every dollar of that gold 1elonged to the people of the ;nited <tates and was unlawfully taken from them%
6s not it high time that we had an audit of the Federal Reserve Board and the Federal Reserve 1anks and an e3amination of
all our .overnment 1onds and se(urities and pu1li( moneys instead of allowing the (orrupt and dishonest Federal Reserve Board
and the Federal Reserve 1anks to spe(ulate with those se(urities and this (ash in the notorious open dis(ount market of New
York City?
Mr% Chairman! within the limits of the time allowed me! 6 (an not enter into a parti(ulariAed dis(ussion of the Federal
Reserve Board and the Federal Reserve 1anks% 6 have singled out the Federal Reserve (urren(y for a few remarks 1e(ause there
has lately 1een some talk here of Yfiat money%Y &hat kind of money is 1eing pumped into the open dis(ount market and through
it into foreign (hannels and sto(k e3(hanges? Mr% Mills of the Treasury has spoken here of his horror of the printing presses and
his horror of dishonest money% 7e has no horror of dishonest money% 6f he had! he would 1e no party to the present gam1ling of
the Federal Reserve Board and the Federal Reserve 1anks in the nefarious open dis(ount market of New York! a market in whi(h
the sellers are represented 1y ten great dis(ount dealer (orporations owned and organiAed 1y the very 1anks whi(h own and
(ontrol the Federal Reserve Board and the Federal Reserve 1anks% Fiat money! indeed[
+fter the several raids on the Treasury Mr% Mills 1orrows the spee(h of those who protested against those raids and speaks
now with pretended horror of a raid on the Treasury% &here was Mr% Mills last J(to1er when the ;nited <tates Treasury needed
PLF=!###!### of the ta3payersI money whi(h was supposed to 1e in the safeGkeeping of +ndrew &% Mellon in the designated
depositories of Treasury funds! and whi(h was not in those depositories when the Treasury needed it? Mr% Mills was the
+ssistant <e(retary of the Treasury then! and he was at &ashington throughout J(to1er! with the e3(eption of a very signifi(ant
week he spent at &hite <ulphur <prings (loseted with international 1ankers! while the 6talian minister! <ignor .randi! was 1eing
entertained GG and 1argained with GG at &ashington%
&hat Mr% Mills is fighting for is the preservation whole and entire of the 1ankerIs monopoly of all the (urren(y of the
;nited <tates .overnment% &hat Mr% *atman proposes is that the .overnment shall e3er(ise its sovereignty to the e3tent of
issuing some (urren(y for itself% This (onfli(t of opinion 1etween Mr% Mills as the spokesman of the 1ankers and Mr% *atman as
the spokesman of the people 1rings the (urren(y situation here into the open% Mr% *atman and the veterans are (onfronted 1y a
stone wall GG the wall that fen(es in the 1ankers with their spe(ial privileges% Thus! the issue is 4oined 1etween the host of
demo(ra(y! of whi(h the veterans are a part! and the men of the kingIs 1ank! the wouldG1e aristo(rats! who deflated +meri(an
agri(ulture and ro11ed this (ountry for the 1enefit of their foreign prin(ipals%
Mr% Chairman! last )e(em1er! 6 introdu(ed a resolution here asking for an e3amination and an audit of the Federal Reserve
Board and the Federal Reserve 1anks and all related matters% 6f the 7ouse sees fit to make su(h an investigation! the people of
the ;nited <tates will o1tain information of great value% This is a Government of the people, by the people, for the people.
(onse*uently, nothing should be concealed from the people. The man who deceives the people is a traitor to the &nited
%tates. The man who knows or suspects that a crime has been committed and who conceals or covers up that crime is an
accessory to it. r. %peaker, it is a monstrous thing for this great Bation of people to have its destinies presided over by a
traitorous Government board acting in secret concert with international usurers. 3very effort has been made by the
#ederal $eserve )oard to conceal its power but the truth is the #ederal $eserve )oard has usurped the Government of
the &nited %tates. It controls everything here and it controls all our foreign relations. It makes and breaks governments
at will. Bo man and no body of men is more entrenched in power than the arrogant credit monopoly which operates the
#ederal $eserve )oard and the #ederal $eserve banks. These evil@doers have robbed this country of more than enough
money to pay the national debt. "hat the Bational Government has permitted the #ederal $eserve )oard to steal from
the people should now be restored to the people. The people have a valid claim against the #ederal $eserve )oard and
the #ederal $eserve banks. If that claim is enforced, !mericans will not need to stand in the breadlines or to suffer and
die of starvation in the streets. :omes will be saved, families will be kept together, and !merican children will not be
dispersed and abandoned. The #ederal $eserve )oard and the #ederal $eserve banks owe the &nited %tates Government
an immense sum of money. "e ought to find out the exact amount of the peopleHs claim. "e should know the amount of
the indebtedness of the #ederal $eserve )oard and the #ederal $eserve banks to the people and we should investigate
this treacherous and disloyal conduct of the #ederal $eserve )oard and the #ederal $eserve banks.
7ere is a Federal Reserve note% 6mmense num1ers of these notes are now held a1road% 6 am told that they amount to
upwards of a 1illion dollars% They (onstitute a (laim against our .overnment and likewise a (laim against the money our people
have deposited in the mem1er 1anks of the Federal Reserve system% Jur peopleIs money to the e3tent of P!>##!###!### whi(h
has within the last few months 1een shipped a1road to redeem Federal Reserve notes and to pay other gam1ling de1ts of the
traitorous Federal Reserve Board and the Federal Reserve 1anks% The greater part of our monetary sto(k has 1een shipped to
foreigners% &hy should we promise to pay the de1ts of foreigners to foreigners? &hy should our .overnment 1e put into the
position of supplying money to foreigners? &hy should the Federal Reserve Board and the Federal Reserve 1anks 1e permitted
to finan(e our (ompetitors in all parts of the world? )o you know why the tariff was raised? 6t was raised to shut out the flood of
Federal Reserve goods pouring in here from every 5uarter of the glo1e GG (heap goods! produ(ed 1y (heaply paid foreign la1or
on unlimited supplies of money and (redit sent out of this (ountry 1y the dishonest and uns(rupulous Federal Reserve Board and
the Federal Reserve 1anks% .o out in &ashington to 1uy an ele(tri( light 1ul1 and you will pro1a1ly 1e offered one that was
made in 'apan on +meri(an money% .o out to 1uy a pair of fa1ri( gloves and in(onspi(uously written on the inside of the gloves
that will 1e offered to you will 1e found the words Ymade in .ermanyY and that means Ymade on the pu1li( (redit of the ;nited
<tates .overnment paid to .erman firms in +meri(an gold taken from the (onfis(ated 1ank deposits of the +meri(an people%Y
The Federal Reserve Board and the Federal Reserve 1anks are spending P##!###!### a week 1uying .overnment
se(urities in the open market and are making a great 1id for foreign 1usiness% They are trying to make rates so attra(tive that the
humanGhair mer(hants and distillers and other 1usiness entities in foreign lands will (ome here and hire more of the pu1li( (redit
of the ;nited <tates .overnment and pay the Federal Reserve outfit for getting it for them%
Mr% Chairman! when the Federal Reserve a(t was passed! the people of the ;nited <tates did not per(eive that a world
system was 1eing set up here whi(h would make the savings of an +meri(an s(hoolGtea(her availa1le to a nar(oti(Gdrug vendor
in Ma(ao% They did not per(eive that the ;nited <tates were to 1e lowered to the position of a (oolie (ountry whi(h has nothing
1ut raw materials and heavy goods for e3port8 that Russia was destined to supply the man power and that this (ountry was to
supply finan(ial power to an international superstate GG a superstate (ontrolled 1y international 1ankers and international
industrialists a(ting together to enslave the world for their own pleasure%
The people of the ;nited <tates are 1eing greatly wronged% 6f they are not! then 6 do not know what Ywronging the peopleY
means% They have 1een driven from their employments% They have 1een dispossessed of their homes% They have 1een evi(ted
from their rented 5uarters% They have lost their (hildren% They have 1een left to suffer and to die for la(k of shelter! food!
(lothing! and medi(ine%
The wealth of the ;nited <tates and the working (apital of the ;nited <tates has 1een taken away from them and has either
1een lo(ked in the vaults of (ertain 1anks and the great (orporations or e3ported to foreign (ountries for the 1enefit of the
foreign (ustomers of those 1anks and (orporations% <o far as the people of the ;nited <tates are (on(erned! the (up1oard is 1are%
6t is true that the warehouses and (oal yards and grain elevators are full! 1ut the warehouses and (oal yards and grain elevators
are padlo(ked and the great 1anks and (orporations hold the keys% The sa(k of the ;nited <tates 1y the Federal Reserve Board
and the Federal Reserve 1anks is the greatest (rime in history%
Mr% Chairman! a serious situation (onfronts the 7ouse of Representatives toGday% &e are trustees of the people and the
rights of the people are 1eing taken away from them% Through the Federal Reserve Board and the Federal Reserve 1anks! the
people are losing the rights guaranteed to them 1y the &onstitution% Their property has 1een taken from them without due
pro(ess of law% Mr% Chairman! (ommon de(en(y re5uires us to e3amine the pu1li( a((ounts of the .overnment and see what
(rimes against the pu1li( welfare have and are 1eing (ommitted%
&hat is needed here is a return to the &onstitution of the ;nited <tates% &e need to have a (omplete divor(e of Bank and
<tate% The old struggle that was fought out here in 'a(ksonIs day must 1e fought over again% The independent ;nited <tates
Treasury should 1e reGesta1lished and the .overnment should keep its own money under lo(k and key in the 1uilding the people
provided for that purpose% +sset (urren(y! the devi(e of the swindler! should 1e done away with% The .overnment should 1uy
gold and issue ;nited <tates (urren(y on it% The 1usiness of the independent 1ankers should 1e restored to them% The <tate
1anking systems should 1e freed from (oer(ion The Federal Reserve distri(ts should 1e a1olished and the <tate 1oundaries
should 1e respe(ted% Bank reserves should 1e kept within the 1orders of the <tates whose people own them! and this reserve
money of the people should 1e prote(ted so that the international 1ankers and a((eptan(e 1ankers and dis(ount dealers (an not
draw it away from them% The e3(hanges should 1e (losed while we are putting our finan(ial affairs in order% The Federal
Reserve a(t should 1e repealed and the Federal Reserve 1anks! having violated their (harters! should 1e li5uidated immediately%
Faithless .overnment offi(ers who have violated their oaths of offi(e should 1e impea(hed and 1rought to trial% ;nless this is
done 1y us! 6 predi(t that the +meri(an people! outraged! ro11ed! pillaged! insulted! and 1etrayed as they are in their own land!
will rise in their wrath and send a *resident here who will sweep the money (hangers out of the temple%
<our(e: http:@@www%afn%org@\govern@m(faddenZspee(hZF>"%html
;%<% Congressman Couis T% M(Fadden /Ci1rary of Congress0
FJR-&JR) to *oney &reators
1y former <enator Ro1ert C% Jwen
To the +meri(an *eople:
6t gives me spe(ial pleasure to have the opportunity to e3plain the prin(iples and purposes of this 1ook! written 1y Miss .ertrude
M% Coogan of Chi(ago%
The fa(ts that Miss Coogan was awarded a MasterIs )egree in -(onomi(s and Finan(e 1y Northwestern ;niversity8 was for
eight years a <e(urity +nalyst for The Northern Trust Company of Chi(ago8 that from the 1eginning she had a deep desire to
understand the fan(ied enigma of money! have given her great insight into monetary s(ien(e%
The 1asi( prin(iples of monetary s(ien(e are simple% ] Bnowledge of the s(ien(e has 1een made diffi(ult 1y those who have
(onverted these simple prin(iples into an enigma% They have done so with ponderous volumes written on pri(es and on the
pro(esses of produ(tion! transportation! distri1ution and allied topi(s8 weaving into the su14e(t matter de(eptive terms so that the
pu1li( has 1een grossly misled 1y the use of words whi(h (ontain a((epted false premises% %%%
The purpose of this 1ook is to 1ring 1efore the +meri(an people the knowledge that they must have regarding the nature and
manipulations of their money system% 6n my opinion! +meri(a fa(es a (risis whi(h may result in the loss of our Representative
Constitutional .overnment unless every man and woman! ri(h or poor! young or old8 do(tor! lawyer! mer(hant la1orer! edu(ator!
(lergyman! so(ial worker! so(iety leader8 will 1estir himself or herself toward the pro1lem of 1ringing the fundamental truths of
monetary s(ien(e to every fireside%
6t is time for intelligent +meri(ans to e3amine their money system %%%% Those who own insuran(e poli(ies and savings a((ounts
must 1estir themselves to prote(t those a((umulations% %%%
%%% The truths themselves are very simple! 1ut many of the newspapers and pu1lishing (ompanies allow themselves to 1e used to
(arry misinformation to the +meri(an pu1li(! while negle(ting to print the truths% 7onest money prin(iples are understanda1le to
every one when the money su14e(t is presented in its true light%
6t re5uired the assistan(e of every loyal +meri(an to help win the &orld &ar% 6n my opinion! the +meri(an people have more at
stake today than they had at the time of the &orld &ar% 6 1elieve the future of our nation and the prin(iples for whi(h it has
stood! were less in 4eopardy then than they are today% %%%
The solution of the pro1lem to prote(t our homes does not rest with a few leaders in a distant (ity% 6t is ne(essary that every man
and woman appoint himself and herself a leader% 7onest Money .roups must 1e formed in every 1lo(k! in every pre(in(t
throughout the ;nited <tates! and in every rural (ommunity% The rural (ommunity (enters and s(hoolhouses (an 1e most
profita1ly employed this winter in showing the +meri(an farmers how simply they (an solve all of their own pro1lems% Their
grave trou1les have 1een (aused not 1y overprodu(tion! 1ut 1y money manipulations fre5uently e3e(uted upon foreign advi(e
and to harmoniAe with foreign Ypoli(ies%Y The result has 1een the e3tra(tion of dollars of a distorted pur(hasing power from the
+meri(an farmer% Colle(ting dollars of su(h unfair pur(hasing power has deprived many +meri(an farmers of their homes! and
all farmers of their share in the industrial produ(ts whi(h this nation is so well e5uipped to manufa(ture and distri1ute%
The prin(ipal reason for endorsing this 1ook is that 6 feel it is an intelligent vehi(le for the dissemination of the truths whi(h
must 1e understood in every home %%%%
%%% 6 am glad to (ommend it8 to give the 1ook my 1lessings in its prin(iples and purposes %%% 6t (ontains s(ientifi( truths GG not
5ua(kery% %%%
This writer is informed% The information is sound% %%% it is written in an attra(tive way with an engaging style! and it (onveys to
the +meri(an people truths of the very first magnitude%
&hen these truths are known! and the +meri(an people demand their (onstitutional right of an honest money system! this
(ountry will enter upon an era of material and physi(al prosperity8 of opportunity! and spiritual and (ultural advan(ement that
will not only (harm and delight its own people 1ut will 1e(ome a model for the rest of the human ra(e%
Ro1ert C% Jwen! New York City! J(to1er "F! F>$%
<our(e: http:@@www%sonnet%(om@usr@kidogo@(oogan%html
2The 2monetary reform9 plan prepared at 'ekyll 6sland was to 1e presented to Congress as the (ompleted work of the National
Monetary Commission% 6t was imperative that the real authors of the 1ill remain hidden% <o great was popular resentment against
1ankers sin(e the *ani( of F#H that no Congressman would dare to vote for a 1ill 1earing the &all <treet taint! no matter who
had (ontri1uted to his (ampaign e3penses% The 'ekyll 6sland plan was a (entral 1ank plan! and in this (ountry there was a long
tradition of struggle against infli(ting a (entral 1ank on the +meri(an people% 6t had 1egun with Thomas 'effersonEs fight against
+le3ander 7amiltonEs s(heme for the First Bank of the ;nited <tates! 1a(ked 1y 'ames Roths(hild% 6t had (ontinued with
*resident +ndrew 'a(ksonEs su((essful war against +le3ander 7amiltonEs s(heme for the <e(ond Bank of the ;nited <tates! in
whi(h Ni(holas Biddle was a(ting as the agent for 'ames Roths(hild of *aris% The result of that struggle was the (reation of the
6ndependent <u1GTreasury <ystem! whi(h supposedly had served to keep the funds of the ;nited <tates out of the hands of the
finan(iers% + study of the pani(s of =H>! =F>! and F#H indi(ates that these pani(s were the result of the international 1ankersE
operations in Condon% The pu1li( was demanding in F#= that Congress ena(t legislation to prevent the re(urren(e of artifi(ially
indu(ed money pani(s% <u(h monetary reform now seemed inevita1le% 6t was to head off and (ontrol su(h reform that the
National Monetary Commission had 1een set up with Nelson +ldri(h at its head! sin(e he was ma4ority leader of the <enate%
The main pro1lem! as *aul &ar1urg informed his (olleagues! was to avoid the name 2Central Bank9% For that reason! he had
de(ided upon the designation of 2Federal Reserve <ystem9% This would de(eive the people into thinking it was not a (entral
1ank% 7owever! the 'ekyll 6sland plan would 1e a (entral 1ank plan! fulfilling the main fun(tions of a (entral 1ank8 it would 1e
owned 1y private individuals who would profit from ownership of shares% +s a 1ank of issue! it would (ontrol the nationEs
money and (redit%9 : Secrets of the Federal (eser"e 1y -usta(e Mullins! Chapter

2The *residential (ampaign of F" re(ords one of the more interesting politi(al upsets in +meri(an history% The in(um1ent!
&illiam 7oward Taft! was a popular president! and the Repu1li(ans! in a period of general prosperity! were firmly in (ontrol of
the government through a Repu1li(an ma4ority in 1oth houses% The )emo(rati( (hallenger! &oodrow &ilson! .overnor of New
'ersey! had no national re(ognition! and was a stiff! austere man who e3(ited little pu1li( support% Both parties in(luded a
monetary reform 1ill in their platforms: The Repu1li(ans were (ommitted to the +ldri(h *lan! whi(h had 1een denoun(ed as a
&all <treet plan! and the )emo(rats had the Federal Reserve +(t% Neither party 1othered to inform the pu1li( that the 1ills were
almost identi(al e3(ept for the names% 6n retrospe(t! it seems o1vious that the money (reators de(ided to dump Taft and go with
&ilson% 7ow do we know this? Taft seemed (ertain of reele(tion! and &ilson would return to o1s(urity% <uddenly! Theodore
Roosevelt 2threw his hat into the ring%9 7e announ(ed that he was running as a third party (andidate! the 2Bull Moose9% 7is
(andida(y would have 1een ludi(rous had it not 1een for the fa(t that he was e3(eptionally wellGfinan(ed% Moreover! he was
given unlimited press (overage! more than Taft and &ilson (om1ined% +s a Repu1li(an e3Gpresident! it was o1vious that
Roosevelt would (ut deeply into TaftEs vote% This proved the (ase! and &ilson won the ele(tion% To this day! no one (an say
what Theodore RooseveltEs program was! or why he would sa1otage his own party% <in(e the 1ankers were finan(ing all three
(andidates! they would win regardless of the out(ome% Cater Congressional testimony showed that in the firm of Buhn Coe1
Company! Feli3 &ar1urg was supporting Taft! *aul &ar1urg and 'a(o1 <(hiff were supporting &ilson! and Jtto Bahn was
supporting Roosevelt% The result was that a )emo(rati( Congress and a )emo(rati( *resident were ele(ted in F" to get the
(entral 1ank legislation passed% 6t seems pro1a1le that the identifi(ation of the +ldri(h *lan as a &all <treet operation predi(ted
that it would have a diffi(ult passage through Congress! as the )emo(rats would solidly oppose it! whereas a su((essful
)emo(rati( (andidate! supported 1y a )emo(rati( Congress! would 1e a1le to pass the (entral 1ank plan% Taft was thrown
over1oard 1e(ause the 1ankers dou1ted he (ould deliver on the +ldri(h *lan! and Roosevelt was the instrument of his demise%
The final ele(toral vote in F" was &ilson G $#F8 Roosevelt G ?H8 and Taft G L%9
: Secrets of the Federal (eser"e 1y -usta(e Mullins! Chapter >
2Col% T-lisha -lyU .arrison! an agent of Brown Brothers 1ankers! later Brown Brothers 7arriman! had entree everywhere in the
finan(ial (ommunity% 7e writes of Col% 7ouse! 2Col% 7ouse agreed entirely with the early writing of Mr% &ar1urg%9 T-lisha -ly
.arrison! Roosevelt! &ilson and the Federal Reserve Caw! Christopher *u1li(ations! Boston! F> *age >>H!U he 5uotes Col%
7ouse: 26 am also suggesting that the Central Board 1e in(reased from four mem1ers to five and their terms lengthened from
eight to ten years% This would give sta1ility and would take away the power of a *resident to (hange the personnel of the 1oard
during a single term of offi(e%9 7ouseEs phrase! 2take away the power of a *resident9 is signifi(ant! 1e(ause later *residents
found themselves helpless to (hange the dire(tion of the government 1e(ause they did not have the power to (hange the
(omposition of the Federal Reserve Board to attain a ma4ority on it during that *residentEs term of offi(e% .arrison also wrote in
this 1ook! 2*aul &ar1urg is the man who got the Federal Reserve +(t together after the +ldri(h *lan aroused su(h nationwide
resentment and opposition% The mastermind of 1oth plans was Baron +lfred Roths(hild of Condon%99
Colonel -dward Mandell 7ouse was referred to 1y Ra11i <tephen &ise in his auto1iography! Challenging Years as 2the
unoffi(ial <e(retary of <tate9% 7ouse noted that he and &ilson knew that in passing the Federal Reserve +(t! they had (reated an
instrument more powerful than the <upreme Court% The Federal Reserve Board of .overnors a(tually (omprised a <upreme
Court of Finan(e! and there was no appeal from any of their rulings% 6n F! prior to &ilsonEs taking offi(e as *resident! 7ouse
had returned to his home in Te3as and (ompleted a 1ook (alled +hilip $ru# Administrator% Jstensi1ly a novel! it was a(tually a
detailed plan for the future government of the ;nited <tates! 2whi(h would esta1lish <o(ialism as dreamed 1y Barl Mar39!
a((ording to 7ouse% This 2novel9 predi(ted the ena(tment of the graduated in(ome ta3! e3(ess profits ta3! unemployment
insuran(e! so(ial se(urity! and a fle3i1le (urren(y system% 6n short! it was the 1lueprint whi(h was later followed 1y the
&oodrow &ilson and Franklin )% Roosevelt administrations% 6t was pu1lished 2anonymously9 1y B% &% 7ue1s(h of New York!
and widely (ir(ulated among government offi(ials! who were left in no dou1t as to its authorship% .eorge <ylvester ,iere(k!
who knew 7ouse for years! later wrote an a((ount of the &ilsonG7ouse relationship! The <trangest Friendship in 7istory%$ 6n
FLL! &est1rook *egler! the 7earst (olumnist from F>" to FL?! heard of the *hilip )ru 1ook and (alled ,iere(k to ask if he
had a (opy% ,iere(k sent *egler his (opy of the 1ook! and *egler wrote a (olumn a1out it! stating: 2Jne of the institutions
outlined in *hilip )ru is the Federal Reserve <ystem% The <(hiffs! the &ar1urgs! the Bahns! the Ro(kefellers and Morgans put
their faith in 7ouse% The <(hiff! &ar1urg! Ro(kefeller and Morgan interests were personally represented in the mysterious
(onferen(e at 'ekyll 6sland%9
The .lass Bill /the 7ouse version of the final Federal Reserve +(t0 had passed the 7ouse on <eptem1er =! F> 1y "=H to =L%
Jn )e(em1er F! F>! the <enate passed their version 1y a vote of L$G>$% More than forty important differen(es in the 7ouse
and <enate versions remained to 1e settled! and the opponents of the 1ill in 1oth houses of Congress were led to 1elieve that
many weeks would yet elapse 1efore the Conferen(e 1ill would 1e ready for (onsideration% The Congressmen prepared to leave
&ashington for the annual Christmas re(ess! assured that the Conferen(e 1ill would not 1e 1rought up until the following year%
Now the money (reators prepared and e3e(uted the most 1rilliant stroke of their plan% 6n a single day! they ironed out all forty of
the disputed passages in the 1ill and 5ui(kly 1rought it to a vote% Jn Monday! )e(em1er ""! F>! the 1ill was passed 1y the
7ouse "="G?# and the <enate $>G">% Jn )e(em1er "! F>! The New York Times (ommented editorially on the a(t! 2New
York will 1e on a firmer 1asis of finan(ial growth! and we shall soon see her the money (entre of the world%9
These developments following the passing of the Federal Reserve +(t proved every one of the allegations Thomas 'efferson had
made against a (entral 1ank in HF: that the su1s(ri1ers to the Federal Reserve Bank sto(k had formed a (orporation! whose
sto(k (ould 1e and was held 1y aliens8 that this sto(k would 1e transmitted to a (ertain line of su((essors8 that it would 1e pla(ed
1eyond forfeiture and es(heat8 that they would re(eive a monopoly of 1anking! whi(h was against the laws of monopoly8 and
that they now had the power to make laws! paramount to the laws of the states% No state legislature (an (ountermand any of the
laws laid down 1y the Federal Reserve Board of .overnors for the 1enefit of their private sto(kholders% This 1oard issues laws
as to what the interest rate shall 1e! what the 5uantity of money shall 1e and what the pri(e of money shall 1e% +ll of these
powers a1rogate the powers of the state legislatures and their responsi1ility to the (itiAens of those states%
The true purposes of the Federal Reserve +(t soon 1egan to disillusion many who had at first 1elieved in its (laims% &% 7% +llen
wrote in MoodyEs MagaAine! F?! 2The purpose of the Federal Reserve +(t was to prevent (on(entration of money in the New
York 1anks 1y making it profita1le for (ountry 1ankers to use their funds at home! 1ut the movement of (urren(y shows that the
New York 1anks gained from the interior in every month e3(ept )e(em1er! FL! sin(e the +(t went into effe(t% The
sta1iliAation of rates has taken pla(e in New York alone% 6n other parts! high rates (ontinue% The +(t! whi(h was to deprive &all
<treet of its funds for spe(ulation! has really given the 1ulls and the 1ears su(h a supply as they have never had 1efore% The truth
is that far from having (logged the (hannel to &all <treet! as Mr% .lass so (onfidently 1oasted! it a(tually widened the old
(hannels and opened up two new ones% The first of these leads dire(tly to &ashington and gives &all <treet a string on all the
surplus (ash in the ;nited <tates Treasury% Besides! in the power to issue 1ankGnote (urren(y! it furnishes an ine3hausti1le
supply of (redit money8 the se(ond (hannel leads to the great (entral 1anks of -urope! where1y! through the sale of a((eptan(es!
virtually guaranteed 1y the ;nited <tates .overnment! &all <treet is granted immunity from foreign demands for gold whi(h
have pre(ipitated every great (risis in our history%9
2For many years! there has 1een (onsidera1le mystery a1out who a(tually owns the sto(k of the Federal Reserve Banks%
Congressman &right *atman! leading (riti( of the <ystem! tried to find out who the sto(kholders were% The sto(k in the original
twelve regional Federal Reserve Banks was pur(hased 1y national 1anks in those twelve regions% Be(ause the Federal Reserve
Bank of New York was to set the interest rates and dire(t open market operations! thus (ontrolling the daily supply and pri(e of
money throughout the ;nited <tates! it is the sto(kholders of that 1ank who are the real dire(tors of the entire system% For the
first time! it (an 1e revealed who those sto(kholders are% This writer has the original organiAation (ertifi(ates of the twelve
Federal Reserve Banks! giving the ownership of shares 1y the national 1anks in ea(h distri(t% The Federal Reserve Bank of New
York issued "#>!#L> shares! and! as filed with the Comptroller of the Curren(y May F! F$! the large New York City 1anks
took more than half of the outstanding shares% The Ro(kefeller Buhn! Coe1G(ontrolled National City Bank took the largest
num1er of shares of any 1ank! >#!### shares% '%*% MorganEs First National Bank took L!### shares% &hen these two 1anks
merged in FLL! they owned in one 1lo(k almost one fourth of the shares in the Federal Reserve Bank of New York! whi(h
(ontrolled the entire system! and thus they (ould name *aul ,ol(ker or anyone else they (hose to 1e Chairman of the Federal
Reserve Board of .overnors% Chase National Bank took ?!### shares% The Marine Nation Bank of Buffalo! later known as
Marine Midland! took ?!### shares% This 1ank was owned 1y the <(hoellkopf family! whi(h (ontrolled Niagara *ower Company
and other large interests% National Bank of Commer(e of New York City took "!### shares% The shareholders of these 1anks
whi(h own the sto(k of the Federal Reserve Bank of New York are the people who have (ontrolled our politi(al and e(onomi(
destinies sin(e F$% They are the Roths(hilds! of -urope! CaAard Freres /-ugene Meyer0! Buhn Coe1 Company! &ar1urg
Company! Cehman Brothers! .oldman <a(hs! the Ro(kefeller family! and the '%*% Morgan interests% These interests have merged
and (onsolidated in re(ent years! so that the (ontrol is mu(h more (on(entrated% National Bank of Commer(e is now Morgan
.uaranty Trust Company% Cehman Brothers has merged with Buhn! Coe1 Company! First National Bank has merged with the
National City Bank! and in the other eleven Federal Reserve )istri(ts! these same shareholders indire(tly own or (ontrol shares
in those 1anks! with the other shares owned 1y the leading families in those areas who own or (ontrol the prin(ipal industries in
these regions%9 : Secrets of the Federal (eser"e 1y -usta(e Mullins! Chapter >
2T&Ue have in this (ountry one of the most (orrupt institutions the world has ever known% 6 refer to the Federal Reserve Board
and the Federal Reserve Banks% The Federal Reserve Board! a .overnment 1oard! has (heated the .overnment of the ;nited
<tates and the people of the ;nited <tates out of enough money to pay the national de1t% The depredations and ini5uities of the
Federal Reserve Board has (ost this (ountry enough money to pay the national de1t several times over% This evil institution has
impoverished and ruined the people of the ;nited <tates! has 1ankrupted itself! and has pra(ti(ally 1ankrupted our .overnment%
6t has done this through the defe(ts of the law under whi(h it operates! through the maladministration of that law 1y the Federal
Reserve Board! and through the (orrupt pra(ti(es of the moneyed vultures who (ontrol it% <ome people think the Federal
Reserve 1anks are ;nited <tates .overnment institutions% They are not .overnment institutions% They are private (redit
monopolies whi(h prey upon the people of the ;nited <tates for the 1enefit of themselves and their foreign (ustomers8 foreign
and domesti( spe(ulators and swindlers8 and ri(h and predatory money lenders% 6n that dark (rew of finan(ial pirates there are
those who would (ut a manIs throat to get a dollar out of his po(ket8 there are those who send money into <tates to 1uy votes to
(ontrol our legislation8 and there are those who maintain international propaganda for the purpose of de(eiving us and of
wheedling us into the granting of new (on(essions whi(h will permit them to (over up their past misdeeds and set again in
motion their giganti( train of (rime%9
: ;%<% Congressman Couis Thomas M(Fadden /Repu1li(an *artyG*ennsylvania0! in a spee(h to the ;%<% 7ouse of
Representatives on 'une #! F>"% TNote: M(Fadden was a Congressman from Mar(h $! FL to 'anuary >! F>L8 M(Fadden
died on J(to1er ! F>? while on a visit in New York City%U
2Jur finan(ial system is a false one and a huge 1urden on the people % % % This TFederal ReserveU +(t esta1lishes the most
giganti( trust on earth% &hen the *resident signs this 1ill! the invisi1le government 1y the Monetary *ower will 1e legaliAed%
The people may not know it immediately! 1ut the day of re(koning is only a few years removed% The trusts will soon realiAe that
they have gone too far even for their own good% The people must make a de(laration of independen(e to relieve themselves
from the Monetary *ower% This they will 1e a1le to do 1y taking (ontrol of Congress% &all <treeters (ould not (heat us if you
<enators and Representatives did not make a hum1ug of Congress % % % 6f we had a peopleEs Congress! there would 1e sta1ility%
The greatest (rime of Congress is its (urren(y system% The worst legislative (rime of the ages is perpetrated 1y this 1anking 1ill%
The (au(us and the party 1osses have again operated and prevented the people from getting the 1enefit of their own
governmentS From now on! depressions will 1e s(ientifi(ally planned and (reated%9
: ;%<% Congressman Charles +% Cind1ergh! <r%! in a spee(h to the ;%<% 7ouse of Representatives on )e(em1er ""! F>
2The finan(ial system has 1een turned over to the Federal Reserve Board% That Board administers the finan(e system 1y
authority of a purely profiteering group% The system is private! (ondu(ted for the sole purpose of o1taining the greatest possi1le
profits from the use of other peopleEs money%9 : Charles +% Cind1ergh! <r%! F">
!he 4ederal 8ncome !a3 (enforced by the 8nternal "e(enue $er(ice) and the 4ederal "eser(e $ystem were established in ,-,..
(Photo7 4lickr)
.ignifi+ant Histori+al ?4ents in ()(3
!he "ockefeller 4oundation was founded in ,-,..
!he 0nti-Defamation League of B)nai B)rith was founded in ,-,..
!he ,/th 0mendment of the '.$. 1onstitution establishing the federal income ta3 was ratified on 4ebruary ., ,-,..
!he ,:th 0mendment of the '.$. 1onstitution recogni2ing #o#ular election of '.$. $enators was ratified on 0#ril 9, ,-,..
!he '.$. De#artment of Labor was established on *arch +, ,-,..
'.$. President Woodrow Wilson signed the 4ederal "eser(e 0ct into law on December 6., ,-,..
4rancisco 8. *adero, former President of *e3ico, was assassinated in *e3ico on 4ebruary 66, ,-,..
Woodrow Wilson was inaugurated President of the 'nited $tates on *arch +, ,-,..
Eing @eorge 8 of @reece was assassinated in !hessaloniki, @reece on *arch ,9, ,-,.
0merican international banker ;ohn Pier#ont *organ $r. died in "ome, 8taly on *arch .,, ,-,..
!he !reaty of London ending the 4irst Balkan War was signed on *ay .<, ,-,..
!he !reaty of Bucharest ending the $econd Balkan War was signed on 0ugust ,<, ,-,..
Fe#eral 6eser4e earne# F=B billion in *>>)
By Neil 6rwin
&ashington *ost <taff &riter
Tuesday! 'anuary "! "##
&all <treet firms arenEt the only 1anks that had a 1anner year% The #ederal $eserve made record profits in 1II0! as its un(onventional efforts to
prop up the e(onomy (reated a windfall for the government%
The Fed will return a1out P$L 1illion to the ;%<% Treasury for "##F! a((ording to (al(ulations 1y The &ashington *ost 1ased on pu1li( do(uments%
That refle(ts the highest earnings in the F?Gyear history of the (entral 1ank% The Fed! unlike most government agen(ies! funds itself from its own
operations and returns its profits to the Treasury%
The num1ers are good news for the federal 1udget and a sign that the Fed has 1een su((essful! at least so far! in prote(ting ta3payers as it intervenes
in the e(onomy GG though there remains a risk of signifi(ant losses in the future if the Fed sells some of its investments or loses money on its stakes in
1ailedGout firms%
This turn of events (omes as the 1anks that 1enefited from the FedIs a(tions are under the mi(ros(ope% <tarting at the end of the week! ma4or 1anks
are e3pe(ted to announ(e signifi(ant earnings and employee 1onuses% +nger in &ashington is at su(h a high 1oil that the J1ama administration will
pro1a1ly propose a fee on finan(ial firms to re(oup the (ost of their 1ailout! offi(ials (onfirmed Monday%
+s it happens! the FedEs earnings for the year will dwarf those of the large 1anks! easily topping the e3pe(ted profits of Bank of +meri(a! .oldman
<a(hs and '%*% Morgan Chase (om1ined%
Mu(h of the higher earnings (ame a1out 1e(ause of the FedIs aggressive program of 1uying 1onds! aiming to push interest rates down a(ross the
e(onomy and thus stimulate growth% By the end of "##F! the Fed owned P%= trillion in ;%<% government de1t and mortgageGrelated se(urities! up
from P$FH 1illion a year earlier% The interest in(ome on those investments was a ma4or sour(e of Fed profits GG though that in(ome (omes with risks!
as the (entral 1ank (ould lose money if it later sells those se(urities to redu(e the money supply%
The Fed also made money on its emergen(y loans to 1anks and other firms and on spe(ial programs to prop up lending! su(h as one that supports
(redit (ards! auto loans! and other (onsumer and 1usiness lending% Those programs impose interest and fees on parti(ipants! with the aim of ensuring
that the Fed does not lose money%
+nd while the (entral 1ank in its most re(ent finan(ial report had re(orded a P>%= 1illion de(line in the value of loans it made in 1ailing out the
investment 1ank Bear <tearns and the insurer +meri(an 6nternational .roup! the Fed also logged P$%H 1illion in interest payments from those loans%
Further losses GG or gains GG on the two 1ailouts are possi1le as time goes 1y% The Fed also (harges fees for operating the plum1ing of the finan(ial
system! su(h as (learing (he(ks and ele(troni( payments 1etween 1anks%
From its revenue! the Fed dedu(ts operating e3penses! su(h as employee salaries! then returns to the Treasury almost all of the earnings that remain%
The largest previous refund to the Treasury was P>$%? 1illion! in "##H%
2This shows that (entral 1anking is a great 1usiness to 1e in! espe(ially in a (risis!9 said ,in(ent Reinhart! a resident s(holar at the +meri(an
-nterprise 6nstitute and a former Fed offi(ial% 2You 1uy assets that have a ni(e yield! and your (ost of funds is very low% The differen(e is profit%9
The Fed plans to release its estimate of "##F earnings Tuesday% The *ostIs (al(ulation is 1ased on (om1ining data through <eptem1er from the FedIs
monthly 1alan(e sheet report with more re(ent data from the TreasuryIs daily 1udget statement%
Fed offi(ials do not make poli(y with an eye toward ma3imiAing profits% They are (harged 1y law with managing the nationIs money supply to keep
employment high and pri(es sta1le! and earnings flu(tuate depending on a wide range of fa(tors as they pursue that goal% 6n the (risis! the (entral
1ankIs poli(y has 1een to (reate money and use it to 1uy a wide variety of assets! whi(h in turn pay interest%
6n effe(t! the unpre(edented range of a(tions taken to address the (risis has made the FedIs 1alan(e sheet more like that of a private 1ank% + firm su(h
as Bank of +meri(a takes money from depositors! whom it pays little or nothing in interest! and lends it out at signifi(antly higher rates% The Fed!
similarly! takes money that 1anks keep on deposit! at a rate of #%"L per(ent! and lends it to the ;%<% government 1y 1uying Treasury se(urities and!
lately! to home 1uyers and other private 1orrowers though more e3oti( investments%
&hile that resulted in higher earnings in "##F! it e3poses the Fed to more risks down the road% YTheyIve moved up the riskGreturn (urve! as they have
more longGterm assets and more things that involve (redit risk!Y said )iane <wonk! (hief e(onomist at Mesirow Finan(ial%
6f the pri(e of Treasury 1onds or mortgageGrelated se(urities issued 1y Fannie Mae and Freddie Ma( were to fall in the years ahead! and Fed leaders
de(ided they need to drain money from the finan(ial system 1y selling off some of their portfolio! the (entral 1ank would lose money% 26f they do
enough asset sales and rates go high enough! that (ould eat into future profits pretty su1stantially!9 said Mi(hael Feroli! an e(onomist at '%*% Morgan
Chase%
-ven as the Fed (omes to resem1le private 1anks in terms of its 1alan(e sheet and its earnings power! there remains one 1ig differen(e% The C-J of
the Federal Reserve! Chairman Ben <% Bernanke! re(eived a modest (ostGofGliving raise for "##! despite the re(ord earnings: 7e now makes
PFF!H##! with no 1onus at all%
<our(e: The Washington +ost8 http:@@www%washingtonpost%(om@wpGdyn@(ontent@arti(le@"##@#@@+R"####>=F"%html
)-C-MB-R "#! "##= : -ssay
6s the Medi(ine &orse Than the 6llness?
The world ran out of trust in "##= GG 1ut there is no shortage of money 1e(ause the Fed is printing like mad% 6tIs the wrong
approa(h! with potentially dire (onse5uen(es! says 'ames .rant%
By '+M-< .R+NT
8t is a sorry #lace at which we 0mericans find oursel(es this none-too-festi(e holiday season. !he biggest names on Wall $treet ha(e
gone to their rewards or into #artnershi# with the '.$. !reasury. 4oreigners stare wide-eyed from across the waters. 0 G>< billion Pon2i
scheme (baited with, of all things in this age of e3cess, the #romise of low, s#uriously #redictable returns)? 8nterest rates o(er which
tiny ;a#anese rates fairly tower? "egulatory #olicy seemingly set by a weather (ane? 0 4ederal "eser(e that canIt make u# its mind7 8s
it in the business of central banking or of central #lanning? 0nd to think -- our disa##ointed foreign friends mutter -- all of these
enormities taking #lace under a "e#ublican administration.
!rust itself entered a bear market in 6<<9, com#lementing and #erha#s sur#assing the selloffs in stocks, mortgages and commodities.
=e(er to be confused with angels, we humans seem to outdo oursel(es when money is on the line. $o it is that Bernard *adoff,
su##osed #illar of the community, stands accused of #er#etrating one of the greatest hoa3es since ;ohn Law disco(ered the
inflationary #ossibilities of #a#er money in the early ,9th century.
Barely nudging *r. *adoff out of the to# of the news was the 4ederal "eser(eIs announcement last !uesday that it intends to debase
its own #a#er money. !he year Kust ending has been a time of confusion as much as it has been of loss. But here, at least, was the
bright beam of clarity. $#ecifically, the 4ed #ledged to #rint dollars in unlimited (olume and to trim its funds rate, if necessary, all the
way to 2ero. =or would it rest on its laurels e(en at an interest rate low enough to dri(e the creditor class back to work. 8t would, on the
contrary, Hcontinue to consider ways of using its balance sheet to further su##ort credit markets and economic acti(ity.H
Wall $treet that day did hands#rings. B(en go(ernment securities #rices raced higher, as if, somehow, !reasury bonds were not
denominated in the currency with which the 4ed had announced its intention to #a#er the face of the earth. Bconomic commentators
#raised the central bankIs determination to fight deflation -- that is, to reinstate inflation. 0ll hands, including President-elect Fbama,
seemed to agree that wholesale money-#rinting was the answer to the nationIs #rayers.
Fne market, only, registered a #rotest. !he 4edIs declaration of inflationary intent knocked the dollar for a loo# against gold and foreign
currencies. 8n many different languages and from many time 2ones came the Duestion, H!ell me, again, now that the dollar yields so
little, why do we own it?H
8t was on Fct. /, ,-:-, that then-4ed 1hairman Paul 0. Aolcker (owed to #rint less money to bring down inflation. $o doing, he closed
one monetary era and o#ened another. With !uesdayIs #romise to #rint much more money, the 4ederal "eser(e of Ben $. Bernanke
has o#ened its own new era. Whether *r. BernankeIs #olicy of debasement will lead to as ha##y an outcome as that which crowned
the Aolcker anti-inflation initiati(e is, howe(er, doubtful. Whate(er the road to riches might be #a(ed with, it isnIt little green #ieces of
#a#er stam#ed Hlegal tender.H
Fur troubles, o(er which we will certainly #re(ail, stem from a basic contradiction. !he dollar is the worldIs currency, yet the 4ed is
0mericaIs central bank. *r. BernankeIs remit is to #romote low inflation, high em#loyment and sol(ent finance -- in the >< states. e
wishes the 1hinese well, of course, and the 4rench and the $inga#oreans and all the rest besides, but they donIt #ay his salary.
!hey do, howe(er, buy the '.$. !reasuryIs bonds, which frames the emerging 0merican dilemma. 8f the 4ed is going to create
boatloads of de#reciating, non-yielding dollar bills, who will absorb them? Who will finance the Fbama administrationIs looming titanic
fiscal deficits? Who will finance 0mericaIs annual sur#lus of consum#tion o(er #roduction (after 6> more or less continuous years,
almost a national trait)? 8nflation is a kind of go(ernmentally sanctioned white-collar crime. B(ery crime needs a du#e. =ow that the 4ed
has announced its #lan to decei(e, where will it find its (ictims?
*r. Bernanke has good reason to worry about the economy. We all do. 8n the boom, a su#erabundance of mis#riced debt led countless
#eo#le down innumerable blind in(estment alleys. B-R credit financed bubbles in real estate, commodities, mortgage-backed securities
and a myriad of other assets. 8t #unished sa(ing and encouraged s#eculation. 8magine a man at the to# of a ste#ladder. e is u# on his
toes reaching for something. 1all that something Hyield.H 1all the ste#ladder Hle(erage.H =ow kick the ladder away. !he man falls,
#ieces of debt crashing to the floor around him. !he 4ed, watching this #re(entable accident unfold, rushes to the scene too late. =ot
only did Bernanke et al. not see it coming, but they actually egged the man higher. &ou will recall the ultra-low interest rates of the early
6<<<s. !he 4ed im#osed them to s#eed reco(ery from an earlier accident, this one in(ol(ing a man u# on a ste#ladder reaching for
technology stocks.
!he underlying cause of these misha#s is the dollar and the central bank that mani#ulates it. 8n ages #ast, it was so sim#le. 0 central
banker had one Kob only, and that was to assure that the currency under his care was e3changeable into gold at the lawfully sti#ulated
rate. 8t was his office to make the #ublic indifferent between currency or gold. 8n a crisis, the bankerIs Kob descri#tion e3#anded to
#ermit emergency lending against good collateral at a high rate of interest. But no self-res#ecting central banker did much more.
1ertainly, none arrogated to himself the Kob of steering the economy by fi3ing an interest rate. =one, 8 belie(e, had an economist on the
#ayroll. =one facilitated deficit s#ending by buying u# his go(ernmentIs bonds. =one cared about the a(erage le(el of #rices, which
rose in wartime and sank in #eacetime. 8t sank in #eacetime because technological #rogress and the o#ening of new regions to
agricultural #roduction made merchandise and commodities chea#er and more abundant.
=ot e(eryone agreed that these arrangements were hea(en-sent. 8n com#arison to the rigor of the gold standard, #a#er money
seemed, to many, an intelligent and forgi(ing alternati(e. 8n ,9:9, a committee of the ouse of "e#resentati(es was formed to
in(estigate the causes of the suffering of working #eo#le in the de#ression that was fi(e years old and counting. =ot a few witnesses
#leaded for the creation of more greenbacks. !hey asked that the go(ernment not go through with its #lan to return to the gold
standard in ,9:-. But the nation did return to gold -- it had financed the 1i(il War with #a#er money -- and the de#ression ended in the
(ery same year.
@old is a hard master, and a ca#ricious one, too, insofar as growth in the worldIs monetary base de#ends on the enter#rise of mining
engineers. But, as we ha(e seen lately, there is no ca#rice like the ca#rice of slee#-de#ri(ed *andarins im#ro(ising a monetary
solution to a credit crisis (or, for that matter, of fully rested *andarins setting interest rates by the lights of their econometric models).
!he times were hard in the ,9:<s and, for that matter, again in the ,9-<s, but 0mericans re#eatedly s#urned the Po#ulist cries for a
dollar you didnIt ha(e to dig out of the ground but could rather #rint u# by the Kob lot. H8f the @o(ernment can create money,H as a hard-
money #ro#agandist #ut it in an ,9-6 broadside entitled H1hea# *oney,H Hwhy should not it create all that e(erybody wants? Why
should anybody work for a li(ing?H 0nd -- in a most #rescient rhetorical Duestion -- he went on to ask, HWhy should we ha(e any limit
#ut to the (olume of our currency?H
0 cou#le of #anics later, the 4ederal "eser(e came along -- the year was ,-,.. Promoters of the legislation to establish 0mericaIs new
central bank #rotested that they wanted no soft currency. !he dollar would continue to be e3changeable into gold at the customary rate
of G6<./: an ounce. But, they added, under the 4edIs enlightened stewardshi#, the currency would become He3#ansi(e.H 0ccordion-
fashion, the number of dollars in circulation would e3#and or contract according to the needs of commerce and agriculture.
?lihu 6oot, 6epubli+an senator from 5ew ;ork, thought he smelle# a rat. 8nti+ipating the +re#it inflations of the future an#
re+alling the #isturban+es of the past, Cr. 6oot atta+ke# the bill in this fashion7 GLittle b! little, business is enlarge# with eas!
mone!. With the exhaustless reser4oir of the o4ernment of the -nite# .tates furnishing eas! mone!, the sales in+rease, the
businesses enlarge, more new enterprises are starte#, the spirit of optimism per4a#es the +ommunit!.
G,ankers are not free from it,G Cr. 6oot went on. G$he! are human. $he members of the Fe#eral 6eser4e boar# will not be free
of it. $he! are human....?4er!one is making mone!. ?4er!one is growing ri+h. Dt goes up an# up, the margin between +osts
an# sales +ontinuall! growing smaller as a result of the operation of ine4itable laws, until finall! someone whose Eu#gment
was ba#, someone whose +apa+it! for business was small, breaks% an# as he falls he hits the next bri+k in the row, an# then
another, an# then another, an# #own +omes the whole stru+ture.
G$hat, sir,G Cr. 6oot +on+lu#e#, Gis no #ream. $hat is the histor! of e4er! mo4ement of inflation sin+e the worl#Hs business
began, an# it is the histor! of man! a perio# in our own +ountr!. $hat is what happene# to greater or less #egree before the
pani+ of (13/, of (1B/, of (1/3, of (1)3 an# of ()>/. $he pre+ise formula whi+h the stu#ents of e+onomi+ mo4ements ha4e
e4ol4e# to #es+ribe the reason for the +rash following the uni4ersal pro+ess is that when +re#it ex+ee#s the legitimate
#eman#s of the +ountr! the +urren+! be+omes suspe+te# an# gol# lea4es the +ountr!.G
Little did *r. "oot sus#ect that the dollar would lose its gold backing altogether -- that, starting in ,-:,, there would be nothing behind it
more than the good intentions of the '.$. go(ernment and (somewhat more substanti(ely) the demonstrated strength of the '.$.
economy. $till less could he ha(e guessed that the world would nonetheless fall in lo(e with that uncollaterali2ed #iece of #a#er or --
e(en more astoundingly -- that the 'nited $tates would enKoy so great a reser(oir of good will that it would be allowed to borrow its way
to a net international in(estment #osition of minus G6.++ trillion (G,:./+ trillion of foreign assets held by 0mericans (s. G6<.<9 trillion of
0merican assets held by foreigners). H8t goes u# and u#,H *r. "oot said of the inflationary cycle, but Kust how high he could not ha(e
dreamt.
Enowledge of the #rece#ts of classical central banking #re#ared no one to understand, much less to antici#ate, the 4edIs conduct in
this credit cracku#. !he central bank is lending freely, all right, but not at the sti#ulated HhighH interest rate. 0s a matter of fact, it is
starting to lend at a rate below which there is no #ositi(e rate. !he gold standard was obKecti(e. *odern monetary management is
subKecti(e (under 0lan @reens#an, it was intuiti(e). !he gold standard was rules-based. !he 6,st century 4ed goes with what works --
or seems to work. What it ho#es is going to work for the fellow who fell off the ste#ladder is more debt and more dollars. ;ust how much
of each can be found e(ery !hursday e(ening on the 4edIs own Web site. F#en u# form +., and #re#are to be ama2ed. $ince Labor
Day, the 4edIs assets ha(e 2oomed to G6.., trillion from G-<>.: billion. 0nd what is the significance of this stunning rate of asset
growth? $im#ly this7 !he 4ed #ays for its assets with freshly made dollars. 8t conKures them into e3istence on a com#uter5 H#rintingH is a
figure of s#eech.
8n this crisis, the 4edIs assets ha(e grown much faster than its ca#ital. !he truth is that the 4ederal "eser(e is itself a highly le(eraged
financial institution. !he flagshi# branch of the ,6-bank system, the 4ederal "eser(e Bank of =ew &ork, shows assets of G,.. trillion
and ca#ital of Kust G,6.6 billion. 8ts le(erage ratio, a mere <.-S, is less than one-third of that #rescribed for banks in the #ri(ate sector.
$uch a thin film of #rotection would #resent no s#ecial risk if the bank managed by !imothy 4. @eithner, the !reasury secretary-
designate, owned only short-dated !reasurys. owe(er, the mystery meat acDuired from Bear $tearns and 08@ foots to G//./ billion. 0
writedown of Kust ,9..S in the (alue of those risky #ortfolios would erase the =ew &ork 4edIs ca#ital account. Dn +ongressional
testimon! eight !ears ago, Lauren+e Ce!er, then a Fe# go4ernor, trie# to alla! an! su+h +on+erns (whi+h then must ha4e
seeme# remote, in#ee#". GCre#itors of +entral banks...are at no risk of a loss be+ause the +entral bank +an alwa!s +reate
a##itional +urren+! to meet an! obligation #enominate# in that +urren+!,G he soothingl! remin#e# his listeners.
&es, todayIs #olicy makers allow, there are risks to HcreatingH a trillion or so of new currency e(ery few months, but that is tomorrowIs
worry. Fn todayIs agenda is a deflationary abyss. 4rostbite (ictims tend not to dwell on the summertime #erils of heatstroke.
But the seasons of finance are un#redictable. Prescience is rare enough in the #ri(ate sector. 8t is almost unheard of in Washington.
!he credit troubles took the 4ed unawares. $o, likely, will the outbreak of the ne3t inflation. 0lready the stars are aligned for a doo2y.
=ot only the 4ed, but also the other leading central banks are frantically ram#ing u# money #roduction. $imultaneously, miners and oil
#roducers are ram#ing down commodity #roduction -- as is, for instance, is "io !into, the hea(ily encumbered mining giant, which the
other day disclosed ,+,<<< layoffs and a G> billion cutback in ca#ital e3#enditure. 1ome the economic reco(ery, resource #roducers
will certainly increase out#ut. But it is far less certain that, once the cycle turns, the central banks will #unctually tighten.
!he #ublic has been slow to anger in this costliest and scariest of #ost World War 88 financial crises. Wall $treet and the debt ratings
agencies ha(e come in for well-deser(ed castigation. But #ointing fingers rarely find the 4ederal "eser(e, whose low, low interest rates
hel#ed to set house #rices le(itating in the first #lace.
0fter *r. Bernanke gets a good nightIs slee#, he should be called to account for once again cutting interest rates at the e3#ense of the
long-suffering (and #ossibly hungry) sa(ers. e should be asked to e3#lain how the central-banking methods of the #a#er-dollar era
re#resent any im#ro(ement, either in #ractice or theory, o(er the rigor, elegance, sim#licity and #redictability of the gold standard. e
should be directed to read aloud the te3t of critiDue by Blihu "oot and e3#lain where, if at all, the old gentleman went wrong. 4inally, he
should be directed to #ut himself into the shoes of a foreign holder of '.$. dollars. H!ell us, *r. Bernanke,H a congressman might
consider asking him, Hif you had the choice, would you hold dollars? 0nd may 8 remind you, *r. 1hairman, that you are under oath?H
;ames @rant, the editor of @rantIs 8nterest "ate Fbser(er, is the author most recently of H*r. *arket *iscalculates.H
#rinte in The (a!! 'treet $ourna!) page (*
<our(e: The Wall Street ,ournal! http:@@online%ws4%(om@arti(le@<B""FH>$>L"LL">"L%html
2Cittle 1y little! 1usiness is enlarged with easy money% &ith the e3haustless reservoir of the .overnment of the ;nited <tates
furnishing easy money! the sales in(rease! the 1usinesses enlarge! more new enterprises are started! the spirit of optimism
pervades the (ommunity% Bankers are not free from it% They are human% The mem1ers of the Federal reserve 1oard will not 1e
free of it% They are human% Regional 1ankers will not 1e free from it% They are human% +ll the world moves along upon a
growing tide of optimism% -veryone is making money% -veryone is growing ri(h% 6t goes up and up! the margin 1etween (ost
and sales (ontinually growing smaller as a result of the operation of inevita1le laws! until finally someone whose 4udgment was
1ad! some one whose (apa(ity for 1usiness was small! 1reaks8 and as he falls he hits the ne3t 1ri(k in the row! and then another!
and then another! and down (omes the whole stru(ture% That! sir! is no dream% That is the history of every movement of inflation
sin(e the worldIs 1usiness 1egan! and it is the history of many a period in our own (ountry% That is what happened to greater or
less degree 1efore the pani( of =>H! of =LH! of =H>! of =F>! and of F#H% <o! sir! 6 (an see in this 1ill itself! in the dis(harge
of our duty! no influen(e interposed 1y us against the o((urren(e of one of those periods of false and delusive prosperity whi(h
inevita1ly end in ruin and suffering% For! Mr% *resident! the most direful results of the awakening of the people from su(h a
dream are not to 1e found in the 1anking houses : no8 not even in the 1usiness houses% They are to 1e found among the millions
who have lost the means of earning their daily 1read%9
: Former ;%<% <enator -lihu Root! in a spee(h he delivered in the ;%<% <enate on )e(em1er >! F>! from Addresses on
!o"ernment and &iti-enship /F?0! p% >>HG>>=
2ST.Uold always leaves a (ountry in whi(h the amount of (urren(y e3(eeds the demands of legitimate 1usiness%9
: Former ;%<% <enator -lihu Root! in a spee(h he delivered in the ;%<% <enate on )e(em1er >! F>! from Addresses on
!o"ernment and &iti-enship /F?0! p% >LL
I!!ustrat%d Cistor. o" th% F%d%ra! 3%s%r&%
!he 4ederal "eser(e Board in ,-,+. !he se(en original members of the 4ederal "eser(e Board sit for a grou# #ortrait on 0ugust ,<, ,-,+,
shortly after being sworn in. $tanding, left to right7 Paul *. Warburg, ;ohn $kelton Williams (1om#troller of the 1urrency), W.P.@. arding,
and 0dol#h 1. *iller5 seated, left to right7 1harles amlin (@o(ernor), William @. *c0doo (1hairman and $ecretary of the !reasury), and
4rederic 0. Delano. 4rederic 0. Delano was the son of "ussell % 1om#any M1hina o#ium syndicateN #artner Warren Delano ;r. and '.$.
President 4ranklin Delano "oose(elt)s uncle. *c0doo is wearing a mourning armband to commemorate the death, four days earlier, of his
mother-in-law, Bllen 03son Wilson, the former 4irst Lady and wife of President Woodrow Wilson. William @. *c0doo had married Woodrow
Wilson)s daughter Bleanor "andol#h Wilson in *ay ,-,+. (Photo7 @eorge @rantham Bain 1ollectionCLibrary of 1ongress)
4ederal "eser(e bankers #ose for a grou# #ortrait in ,-,+. 4ront row, left to right7 Paul Warburg, ;ohn $kelton Williams, 1harles amlin, and
4rederic 0. Delano. 8n the rear is a large grou# of @o(ernors and *embers of the (arious branches of the 4ederal "eser(e banks.
(Photo7 arris % Bwing 1ollectionCLibrary of 1ongress)
*embers of the "ed 1ross War 1ouncil meet with President Woodrow Wilson during World War 8. 4ront row, left to right7 "obert W. De4orest,
President Woodrow Wilson, former President William oward !aft, unidentified. Back row, left to right7 enry P. Da(ison, unidentified, 1harles
D. =orton, and Bdward =. urley. Fne of the unidentified #erson in this #hoto is 1ol. @rayson *.P. *ur#hy. 1harles D. =orton, Bdward =.
urley, and "obert W. De4orest were members of the 1ouncil on 4oreign "elations. enry P. Da(ison went to ;ekyll 8sland in ,-,< along
with Paul Warburg and $enator =elson 0ldrich to create a legislation that would establish the 4ederal "eser(e.
+ group portrait of the )istri(t .overnors of the Federal Reserve in (ir(a Novem1er F$: -% R% FR+NC7-R! Cleveland!
)istri(t $8 .-JR.- '% <-+Y! Ri(hmond! )istri(t L8 'J<-*7 +% M(CJR)! +tlanta! )istri(t ?8 T7-J)JR- &JC)!
Minneapolis! )istri(t F8 C7+RC-< M% <+&Y-R! Topeka! )istri(t #% B+CB RJ&: C7+RC-< '% R7J+)<! *hiladelphia!
)istri(t >8 J<C+R &-CC<! 7ouston! )istri(t 8 +CFR-) C% +6B-N! Boston! )istri(t 8 B-N'+M6N <TRJN.! New York!
)istri(t "8 +RC76B+C) B+6N<! <an Fran(is(o! )istri(t "%
/Repository: Ci1rary of Congress *rints and *hotographs )ivision0
/<our(e: http:@@www%lo(%gov@pi(tures@item@he("##=##>$F>@?sidX>#H1?dHde(>FL(eeF>"f?ea(1?(=f$0
+ group portrait of the Chairmen of the Federal Reserve )istri(ts in (ir(a Novem1er F$: Front row: FR-)-R6CB 7%
C;RT6<<! Boston! )istri(t 8 *6-RR- '+Y! New York City! )istri(t "8 R6C7+R) C% +;<T6N! *hiladelphia! )istri(t >8 )%C%
&6CC<! Bellevue! *ennsylvania! )istri(t $8 &6CC6+M 6N.C-! Baltimore! )istri(t L8 M%B% &6CCBJRN! +nniston! +la1ama!
)istri(t ?8 Ba(k row: C%7% BJ<&JRT7! Chi(ago! )istri(t H8 +%-% R+M<-Y! Muskogee! Jklahoma! )istri(t #8 -%J%
T-NN6<JN! )allas! )istri(t 8 'J7N *-RR6N! <an Fran(is(o! )istri(t "% *ierre 'ay and 'ohn *errin were mem1ers of <kull
K Bones at Yale ;niversity% /Repository: Ci1rary of Congress *rints and *hotographs )ivision0
/<our(e: http:@@www%lo(%gov@pi(tures@item@he("##=##>$F"@resour(e@he(%#$=?@?sidX?("FL"#e#?fL(d?>"(#?L>$=LeF("F0
Federal Reserve Board mem1er *aul M% &ar1urg /wearing a top hat and a mousta(he0 attends the First *an +meri(an Finan(ial
Conferen(e in &ashington! )%C% in May FL% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
*hotograph of a Federal Reserve Board meeting in (ir(a FH% Clo(kwise! 1eginning from left: &illiam .% M(+doo /<e(retary
of the Treasury0! 'ohn <kelton &illiams /Comptroller of the Curren(y0! +dolph C% Miller! Frederi( +% )elano! unknown! &%*%.%
7arding /.overnor of the Federal Reserve0! *aul &ar1urg /,i(e .overnor of the Federal Reserve0! and Charles <% 7amlin%
/*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0

4ederal "eser(e Board members #ose for a grou# #ortrait during World War 8. 1lockwise, from left7 unidentified, W.P.@. arding, Paul
Warburg, William @. *c0doo (1hairman and $ecretary of the !reasury), 1harles amlin, ;ohn $kelton Williams (1om#troller of the 1urrency),
0dol#h 1. *iller, and 4rederic 0. Delano. (Photo7 arris % Bwing 1ollectionCLibrary of 1ongress)
Paul Warburg stands on the far left in the rear as a member of the 4ederal "eser(e Board. Paul Warburg was one of the founders of the
4ederal "eser(e. Paul Warburg was a @erman citi2en at the time he attended a secret meeting in ;ekyll 8sland, @eorgia in =o(ember ,-,<5
he became an 0merican citi2en on *arch 6,, ,-,,. Paul Warburg ser(ed as Aice 1hairman of the 4ederal "eser(e during World War 85 he
ser(ed as director of the 1ouncil on 4oreign "elations from ,-6, until his death in ,-.6.
William Boyce !hom#son (bottom left, seated) was a Class , <ire+tor of the Fe#eral 6eser4e ,ank of 5ew ;ork from ()(=
to ()() and one of the original 6,, members of the 1ouncil on 4oreign "elations. e is seen with se(eral "ussian Bolshe(iks.
+ photo of a Federal Reserve Board .overnorEs meeting in the early F"#s% Federal Reserve 1ankers in the (onferen(e room
in(lude *ierre 'ay /third from right! Chairman of the Federal Reserve Bank of New York0 and 'ohn *errin /se(ond from right!
Chairman of the Federal Reserve Bank of <an Fran(is(o0% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
Take BoticeJ Federal Reserve Board mem1ers pose for a group portrait in )e(em1er F"% From left to right: +ndrew &%
Mellon /<e(retary of the Treasury0! &%*%.% 7arding /.overnor TChairmanU of the Federal Reserve0! -dmund *latt /,i(e
.overnor of the Federal Reserve0! Charles <% 7amlin! +dolph C% Miller! )aniel R% Crissinger /Comptroller of the Curren(y0! and
'%R% Mit(hell% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
Federal Reserve Board mem1ers pose for a group portrait on May ?! F">% From left to right! +dolph C% Miller! 7enry M%
)awes /Comptroller of the Curren(y0! unidentified! +ndrew &% Mellon /<e(retary of the Treasury0! -dmund *latt /,i(e
.overnor of the Federal Reserve0! unidentified! )aniel R% Crissinger /.overnor TChairmanU of the Federal Reserve0! and Charles
<% 7amlin% The two unidentified men are Federal Reserve Board mem1ers .eorge R% 'ames /appointed on May $! F">0 and
-dward 7% Cunningham /appointed on May $! F">0% /*hoto: National *hoto Company Colle(tion@Ci1rary of Congress0
*embers of the 4ederal "eser(e Board #ose for a grou# #ortrait in December ,-6,, with 0ndrew W. *ellon, $ecretary of the !reasury, as its
1hairman. 4rom left to right, 0ndrew W. *ellon, 1hairman, W.P.@. arding, @o(ernor, Bdmund Platt, Aice @o(ernor, 1harles $. amlin,
0dol#h 1. *iller, Daniel ". 1rissinger, 1om#troller of the 1urrency, and ;.". *itchell. (J 'nderwood % 'nderwoodC1F"B8$)
'.$. President 4ranklin D. "oose(elt signs the @old Bill in Washington, D.1. on ;anuary .<, ,-.+. Witnesses standing in the rear include
!reasury $ecretary enry *orgenthau ;r. (second from left) and @eorge L. arrison (second from right), the President of the 4ederal "eser(e
Bank of =ew &ork. (J BettmannC1F"B8$)
*resident Franklin )% Roosevelt signs the .old Bill in &ashington! )%C% on 'anuary >#! F>$% &itnesses standing in the rear
in(lude Treasury <e(retary 7enry Morgenthau 'r% /se(ond from left0 and .eorge C% 7arrison /se(ond from right0! the *resident
of the Federal Reserve Bank of New York%
/*hoto Credit: ;nderwood K ;nderwood@Franklin )% Roosevelt *residential Ci1rary and Museum0
*resident Franklin )elano Roosevelt smiles as he signs The Banking +(t of F>L on +ugust ">! F>L! (ompleted the
restru(turing of the Federal Reserve and finan(ial system 1egun during the 7oover administration and (ontinued during the
Roosevelt administration% <tanding 1ehind Roosevelt is Treasury <e(retary 7enry Morgenthau 'r%
/*hoto Credit: 7arris K -wing0 http:@@www%fli(kr%(om@photos@federalreserve@"#=$F=LL@
New home of Federal Reserve Board in (ir(a F>H% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
The governmentEs e3perts on money matters met with <enate and 7ouse leaders in &ashington! )%C% on 'anuary H! F>H to
dis(uss legislation to 1e su1mitted to the HLth session of Congress% + dis(ussion was made at the (onferen(e to e3tend the life of
important federal monetary lending agen(ies! and also! to move in giving the *resident authority to dis(ontinue the R%F%C% at
anytime the (onditions warrant% 6n the photograph! from left to right: 'esse 7% 'ones! ;%<% <enator Carter .lass /)emo(ratG
,irginia0! Chairman of the <enate Finan(e Committee ;%<% <enator *at 7arrison /)emo(ratGMississippi0! and Marriner -((les!
Chairman of the Federal Reserve Board% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
Marriner -((les /right0! Chairman of the Federal Reserve Board! gestures with his middle finger as he drives home a point to
;%<% <enator *at 7arrison! Chairman of the <enate Finan(e Committee! during a private (onversation in &ashington! )%C% on
'anuary H! F>H% They were snapped while attending a (onferen(e 1etween the administration fis(al e3perts and <enate and
7ouse leaders to dis(uss legislation to 1e su1mitted to the HLth session of Congress%
/*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
4ederal "eser(e Board 1hairman *arriner Bccles, seen with both of his hands on his face, urges a##ro(al of administrationIs lending #rogram
during a $enate Banking and 1urrency 1ommittee hearing in Washington, D.1., ;uly ,-, ,-.-. Bccles told the $enate Banking and 1urrency
1ommittee that the President)s lending #rogram is the only immediately #racticable means of stimulating business and em#loyment u# to
#ros#erity le(els. (Photo7 arris % Bwing 1ollectionCLibrary of 1ongress)
!homas ;. Watson (sitting to itler)s left), the President of 8nternational Business *achines 1or#. (also known as 8B*), meets with =a2i
@ermany)s dictator 0dolf itler in ,-.:. $homas J. Watson was a Class , <ire+tor of the Fe#eral 6eser4e ,ank of 5ew ;ork from ()33
to ()=> and a member of the 1ouncil on 4oreign "elations. !homas ;. Watson and his 8B* #ro(ided 0dolf itler and the =a2is with #unch-
card machines. !he =a2i @erman go(ernment, military, and cor#orations used #unch-card machines to create and assign serial numbers for
#risoners working as sla(e laborers in the concentration cam#s.
+ppearing 1efore the <pe(ial <enate Committee on unemployment in &ashington! )%C% on 'anuary $! F>=! Federal Reserve
Board Chairman Marriner -((les de(lared that payment of the soldiers 1onus in F>? helped (reate pri(e distortion that pushed
re(overy out of 1alan(e and led toward the (urrent 1usiness re(ession% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
Marriner -((les /left0! Chairman of the Federal Reserve Board! and -%+% .oldeneiser! )ire(tor of the BoardEs )ivision of
Resear(h and <tatisti(s! putting their heads together to find an answer during the (ommittee meeting of the <pe(ial <enate <ilver
Committee in &ashington! )%C% on Mar(h ">! F>F% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
+n impe((a1ly dressed Marriner -((les! Chairman of the Federal Reserve Board! attends a party in &ashington! )%C% on
)e(em1er ! F>F% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
Marriner <% -((les! Chairman of the Federal Reserve Board! appears 1efore the <enate Banking and Curren(y <u1(ommittee in
&ashington! )%C% on 'une >! F$# and e3presses his opposition to a 1ill li1eraliAing provisions of the Federal 7ome Coan +(t%
7e said that ena(tment of the a(t! sponsored 1y <enator &agner! would e3pand operations of the 7ome Coan Bank <ystem far
1eyond the s(ope of its original purposes% /*hoto: 7arris K -wing Colle(tion@Ci1rary of Congress0
.roup portrait of +meri(an delegation to international monetary (onferen(e to plan for postwar re(onstru(tion at Bretton
&oods! New 7ampshire /;%<%+%0 on 'uly "! F$$% <eated /left to right0: <enator Ro1ert F% &agner! Congressman Brent <pen(e!
<e(retary of the Treasury 7enry Morgenthau 'r% and <enator Charles &% To1ey8 <tanding /left to right0: 7enry )e3ter &hite!
Fred ,inson! )ean +(heson! -dward -% Brown! Federal Reserve Chairman Marriner <% -((les and Congressman 'esse &ol(ott%
/Time Cife photo 1y +lfred -isenstaedt0
*edestrians walk down Nassau <treet past the Federal Reserve Bank of New York Building /left0 in F$$ during &orld &ar 66%
The New York <to(k -3(hange (an 1e glimpsed at the foot of the image%
/+ndreas Feininger@Time K Cife *i(tures@.etty 6mages0
Federal Reserve Chairman Thomas M(Ca1e leaves the &hite 7ouse after visiting with *resident 7arry <% Truman in )e(em1er
F$=% Thomas M(Ca1e was a mem1er of the Coun(il on Foreign Relations% /Cife MagaAine photo 1y Thomas )% M(+voy0
William *c1hesney *artin ;r. Bra (,->,-,-:<)
President Lyndon B. ;ohnson meets with !reasury $ecretary enry 4owler (left, front), 4ederal "eser(e 1hairman William *c1. *artin ;r.
(left, rear), 1ouncil of Bconomic 0d(isers 1hairman @ardner 0ckley, and ;ames Duesenberry. 4owler and *artin were members of the
1ouncil on 4oreign "elations.
'nder $ecretary of !reasury Paul Aolcker (") a##ears before the $enate Banking subcommittee on $e#tember ,<, ,-/- to testify against a
bill to regulate ma3imum interest rates in loans charged by federally su#er(ised banks, which was introduced after the #rime rate rose to a
record 9.> #ercent. 0##earing with him are from left to right7 Preston *artin, 1hairman of 4ederal ome Loan Bank Board5 Eenneth "andall,
1hairman of 4ederal De#osit 8nsurance 1or#.5 William *c1hesney *artin, 1hairman of the 4ederal "eser(e5 and Aolcker.
(BettmannC1F"B8$)
Aice President "ichard =i3on chats with 4ederal "eser(e 1hairman William *c1. *artin ;r. (second from right) at a dinner in =ew &ork 1ity in
,->>. "udol#h $mutny stands on the far left, and *organ @renfell #artner Aiscount William arcourt stands on the far right. "ichard =i3on
and William *c1. *artin ;r. were members of the 1ouncil on 4oreign "elations.
Aice President ubert um#hrey, $ecretary of 1ommerce ;ohn !. 1onnor, 0ndrew Brimmer, and 4ederal "eser(e 1hairman William
*c1hesney *artin ;r. a##ear at the White ouse on *arch -, ,-//. Brimmer was sworn in as a @o(ernor of the 4ederal "eser(e Board that
day. 0ll four men are or were members of the 1ouncil on 4oreign "elations.
(Photo7 &oichi ". Fkamoto, Lyndon B. ;ohnson Presidential Library)
President Lyndon Baines ;ohnson (left) meets with 4ederal "eser(e 1hairman William *c1hesney *artin ;r. (right) and 1ouncil
of Bconomic 0d(isers chairman Walter eller (center) at the White ouse in Washington, D.1. on ;anuary ,<, ,-/+. William
*c1hesney *artin ;r. was a member of the 1ouncil on 4oreign "elations, a #ri(ate organi2ation in =ew &ork 1ity. (0P Photo)
*embers of the Board of @o(ernors of the 4ederal "eser(e $ystem #ose for a grou# #ortrait in Washington, D.1. on *ay 9,
,-/:. 4ederal "eser(e 1hairman William *c1hesney *artin ;r. a##ears in the foreground. Fther members, from left to right,
are7 seated Q ;.L. "obertson, Aice 1hairman5 ;. Dewey Daane5 and @eorge W. *itchell5 standing Q $herman ;. *aisel, 0ndrew
4. Brimmer, and William W. $herrill. (0P Photo)
President Lyndon B. ;ohnson watches 4ederal "eser(e 1hairman William *c1hesney *artin ;r. administer the oath of office to 0ndrew
Brimmer, the incoming member of the Board of @o(ernors of the 4ederal "eser(e $ystem, at the White ouse on *arch -, ,-//. !he woman
is *rs. Brimmer, and the child is Bsther Brimmer. William *c1hesney *artin ;r. was a member of the 1ouncil on 4oreign "elations.
(Photo7 "obert EnudsenCLyndon B. ;ohnson Library)
0rthur 4. Burns Bra (,-:<-,-:9)
"e#ublican Party #residential candidate "ichard =i3on (center) meets with 0rthur 4. Burns (6
nd
right) and economics #rofessor *ilton
4riedman (second from left) on Fctober ,,, ,-/9. '.$. President "ichard =i3on a##ointed 0rthur 4. Burns as the 1hairman of the 4ederal
"eser(e in ,-:<.
Futgoing 4ederal "eser(e chairman 0rthur 4. Burns (left), '.$. President ;immy 1arter (6
nd
left), and incoming 4ederal "eser(e chairman @.
William *iller (6
nd
right) #ose for a #ortrait. (0ssociated Press5 Photogra#her7 Barry !humma)
President @erald 4ord meets with international bankers at the White ouse in ,-:> to discuss the Ofiscal crisisP of =ew &ork 1ity. 4rom left to
right7 L. William $eidman, ;.P. *organ 1hairman Bllmore 1. Patterson, 1iticor# 1hairman Walter Wriston, !reasury $ecretary William $imon,
@erald 4ord, 1hase *anhattan Bank 1hairman and 1BF Da(id "ockefeller, and 4ederal "eser(e 1hairman 0rthur Burns. B(eryone in this
#hoto e3ce#t for L. William $eidman is or was a member of the 1ouncil on 4oreign "elations. Da(id "ockefeller was a director of the 4ederal
"eser(e Bank of =ew &ork at the time this #hoto was taken in ,-:>.
President ;immy 1arter signs the Windfall Profits !a3 Bill in Washington, D.1. on 0#ril 6, ,-9< as $enators and "e#resentati(es who hel#ed it
#ass look on. 0lso #resent is !reasury $ecretary and former 4ederal "eser(e 1hairman @. William *iller (far left). (Wally *c=ameeC1F"B8$)
/<our(e: !reenspan. The *an ehind *oney 1y 'ustin Martin0
*embers of the Board of @o(ernors of the 4ederal "eser(e $ystem #ose for a #ortrait in Washington, D.1. on *ay 6,, ,-:<. @rou#ings are
as follows7 4oreground7 1hairman 0rthur Burns5 background (left to right)7 ;.L. "obertson, (ice chairman5 $herman ;. *aisel5 ;. Dewey Daane5
0ndrew 4. Brimmer5 @eorge *itchell5 and *itchell W. $herrill. (BettmannC1F"B8$)
0rthur 4. Burns (left), 1hairman of the 4ederal "eser(e, meets with former !e3as @o(ernor ;ohn 1onnally at a @eneral
0ssembly of the 8nternational *onetary 4und (8*4) in Washington, D.1. on $e#tember 6:, ,-:,. President "ichard =i3on
a##ointed ;ohn 1onnally as $ecretary of the !reasury the day after the meeting. (BettmannC1F"B8$)
Paul 0. Aolcker (left), the 'nder $ecretary of the !reasury for *onetary 0ffairs, $ecretary of the !reasury @eorge P. $hult2 (center),
and 4ederal "eser(e 1hairman 0rthur 4. Burns (right) attend the international monetary meeting at Paris 1hateau de la *uette
on *arch ,/, ,-:., called in by the western worldIs wealthiest countries to sol(e the monetary crisis. 0ll three men are (or were)
members of the 1ouncil on 4oreign "elations. (BettmannC1F"B8$)
President @erald 4ord faces a formidable array of economic ad(isers during a meeting in the 1abinet "oom of the White ouse on 0ugust 6:,
,-:+. 0t the economic meeting are (left to right)7 L. William $eidman, chief #lanner for a economic summit conference held in $e#tember
,-:+5 ousing $ecretary ;ames !. Lynn5 0lan @reens#an, chairman of the 1ouncil of Bconomic 0d(isers5 !reasury $ecretary William $imon5
1ounselor Eenneth "ush5 Budget Director "oy 0sh5 0rthur Burns, 1hairman of the 4ederal "eser(e $ystem5 and President 4ord.
(BettmannC1F"B8$)
President @erald 4ord meets with his ad(isers in a secret meeting in the 1abinet "oom on 0#ril 69, ,-:>. 1lockwise from left to right7 4ederal
"eser(e Board 1hairman 0rthur Burns, !reasury $ecretary William $imon, Aice President =elson "ockefeller, F*B Director ;ames !. Lynn,
Domestic 1ouncil Director ;ames 1annon, Domestic 1ouncil De#uty Director "ichard Dunham, De#uty 0ssistant Dick 1heney, BPB Director
Bill $eidman, 1ommerce $ecretary "ogers 1.B. *orton, @erald 4ord, F*B 0ssociate Director 4rank Rarb, and 1B0 1hairman 0lan
@reens#an. B(eryone e3ce#t for *orton, $eidman, and Dunham is or was a 14" member. (Photo7 @erald ". 4ord Library)
+ugust L! FH: 2Ni3on <ho(k9
*embers of the Board of @o(ernors of the 4ederal "eser(e $ystem #ose for a #ortrait in Washington, D.1. on *ay 6,, ,-:<. @rou#ings are
as follows7 4oreground7 1hairman 0rthur Burns5 background (left to right)7 ;.L. "obertson, (ice chairman5 $herman ;. *aisel5 ;. Dewey Daane5
0ndrew 4. Brimmer5 @eorge *itchell5 and *itchell W. $herrill. (BettmannC1F"B8$)
0rthur Burns (L), 1hairman of the 4ederal "eser(e, meets with 4ormer !e3as @o(ernor ;ohn 1onnally at a @eneral 0ssembly of the
8nternational *onetary 4und (8*4) in Washington, D.1. on $e#tember 6:, ,-:,. President "ichard =i3on a##ointed ;ohn 1onnally as
$ecretary of the !reasury the day after the meeting. (BettmannC1F"B8$)
President "ichard =i3on meets with $ecretary of $tate William P. "ogers (left) and =ational $ecurity 0d(isor enry Eissinger (right) aboard 0ir
4orce Fne on ;uly ,9, ,-:,. (BettmannC1F"B8$)
President "ichard =i3on began a series of budget meetings at the White ouse on ;uly 6., ,-:,. 4rom left to right7 1as#er Weinberger,
De#uty Director of the Fffice of *anagement and Budget5 Paul *c1racken, 1hairman of the 1ouncil of Bconomic 0d(isors5 and !reasury
$ecretary ;ohn B. 1onnally, "ichard =i3on, and =ational $ecurity 0d(isor enry Eissinger. President "ichard =i3on and his financial ad(isors
Oclosed the gold windowP on 0ugust ,>, ,-:, by ending the con(ersion between the '.$. Dollar (O4ederal "eser(e =oteP) and gold.
(BettmannC1F"B8$)
!rading on the floor of the 0merican $tock B3change in =ew &ork 1ity on 0ugust ,/, ,-:, was at a record #ace following President "ichard
=i3onIs announcement on 0ugust ,>t, ,-:, of a new Oeconomic courseP for the nation to combat inflation. =i3on)s included a -<-day free2e on
wages and #rices, ta3 benefits and what amounted to an unofficial de(aluation of the dollar. (J BettmannC1F"B8$)
0n 0merican em#loyee re(iews co#ies of the O4ederal "eser(e =oteP at the Bureau of Bngra(ing and Printing in Washington, D.1. on Fctober
,9, ,-:,. Fn $unday 0ugust ,>, ,-:,, '.$. President "ichard =i3on scra##ed the gold e3change standard, in effect cancelling the ,-++
Bretton Woods agreement that set u# the 8nternational *onetary 4und (8*4), leading to the introduction of a ,<S ta3 on im#orts and a free2e
on #rices and 0merican salaries for three months. 0s a result, the #rinting of dollar notes accelerated at the Bureau of Bngra(ing and Printing
(BBP), em#loying .<<< #eo#le. Bach #late #asses a strict (isual control test and any faulty dollar #lates are subseDuently withdrawn and sent
to the basement to be burned under the su#er(ision of ins#ectors. (J ;P LaffontC$ygmaC1orbis)
President "ichard =i3on (third from right) meets with (left to right) retired '.$. 0rmy @eneral Lucius 1lay, !homas Dewey (former @o(ernor of
=ew &ork), Dean 0cheson (former '.$. $ecretary of $tate), ;ohn *c1loy (former 1hairman and 1BF of 1hase *anhattan Bank), and
=ational $ecurity 0d(isor enry Eissinger at the White ouse on December :, ,-:<. 1lay, Dewey, 0cheson, *c1loy, and Eissinger were
members of the 1ouncil on 4oreign "elations in ,-:<. (BettmannC1F"B8$)
@eorge .W. Bush shares a light moment after he is sworn-in as the 'nited $tates "e#resentati(e to the 'nited =ations at the White ouse in
Washington, D.1. on 4ebruary 6/, ,-:,. 4rom left to right7 '.$. $u#reme 1ourt ;ustice Potter $tewart, Barbara Bush, @eorge .W. Bush, and
'.$. President "ichard *. =i3on. @eorge .W. Bush, Potter $tewart, and "ichard =i3on are (or were) members of the Bohemian @ro(e in
1alifornia. @eorge .W. Bush and Potter $tewart were members of $kull % Bones at &ale 'ni(ersity. @eorge .W. Bush)s father Prescott
$heldon Bush was a #artner of Brown Brothers arriman % 1o., an international banking firm in =ew &ork 1ity, in ,-:,.
(J "on $achsC1=PC1orbis)
West @ermany)s 1hancellor Willy Brandt (second from left) chats with Da(id "ockefeller (second from right), 1hairman and 1BF of 1hase
*anhattan Bank and 1hairman of the 1ouncil on 4oreign "elations, after a meeting was held at the arold Pratt ouse, headDuarters of the
1ouncil on 4oreign "elations, in =ew &ork 1ity on ;une ,9, ,-:,. 4rankfurt (am *ain) was the financial ca#ital of West @ermany in ,-:,5
4rankfurt continues to ser(e as @ermany)s banking city. Buro#ean 1entral Bank is located in 4rankfurt. (BettmannC1F"B8$)
Baron @uy de "othschild, President of the BanDue "othschild, is one of fi(e of the foremost figures in Buro#ean finance and industry to s#eak
and gi(e to# 0merican cor#orate leaders an insight into o##ortunities in Buro#e during a meeting at the Waldorf-0storia otel in =ew &ork 1ity
on December 6, ,-:<. !he theme of the s#eakers was H!he 1hallenge of Buro#e.H 0##ro3imately ,,<<< 0merican e3ecuti(es were e3#ected
to attend. !he gathering was s#onsored by The Financia! Times of "onon. (J BettmannC1F"B8$)
Paul Aolcker Bra (,-:--,-9:)
Aice President @eorge .W. Bush (1), a former director of the 1entral 8ntelligence 0gency, gi(es a thumbs-u# sign while meeting with
!reasury $ecretary Donald "egan (L) and 4ederal "eser(e Board 1hairman Paul Aolcker at the White ouse on ;anuary .,, ,-9+ to ratify
their agreement on a swee#ing #ro#osal to reorgani2e commercial bank regulating agencies. (BettmannC1F"B8$)
President "onald "eagan arri(es at the De#artment of the !reasury in Washington, D.1. on ;anuary 6., ,-9, for a luncheon with $ecretary of
the !reasury Donald "egan (center), 4ederal "eser(e 1hairman Paul Aolcker (right), and other economic ad(isors. (BettmannC1F"B8$)
4ederal "eser(e 1hairman Paul Aolcker (left) and 1ouncil on 4oreign "elations chairman Peter @. Peterson eat at the arold
Pratt ouse. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
4ederal "eser(e 1hairman Paul Aolcker (left), *argaret Fsmer-*cTuade (center), and former President ;immy 1arter ha(e a
dinner at the arold Pratt ouse in c. ,-96. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
4ederal "eser(e 1hairman Paul Aolcker, left, confers with ;ohn 0shcroft, the @o(ernor of *issouri, before the o#ening general session of the
$outhern @o(ernors 0ssociation meeting in *iami, 4lorida on $e#tember -, ,-9>. (BettmannC1F"B8$)
4inance ministers of the maKor industriali2ed nations meet in the 'nited $tates of 0merica to discuss the international economy on $e#tember
66, ,-9>. 0ttending are from left to right7 4inance *inister @erhard $toltenberg of West @ermany, 4inance *inister Pierre Berego(oy of
4rance, '.$. !reasury $ecretary ;ames 0. Baker 888, '.$. 4ederal "eser(e Bank 1hairman Paul Aolcker, 4inance *inister =igel Lawson of
@reat Britain, and 4inance *inister =oboru !akeshita of ;a#an. Aolcker, $toltenberg, Berego(oy, and Lawson ha(e attended the Bilderberg
*eetings in the #ast. (J BettmannC1F"B8$)
0lan @reens#an Bra (,-9:-6<</)
President "onald "eagan a##ears with (left to right) 0lan @reens#an, 4ederal "eser(e 1hairman Paul Aolcker, and $ecretary of the !reasury
;ames 0. Baker 888 in the Press "oom at the White ouse on ;une 6, ,-9: as he announces the nomination of 0lan @reens#an as 1hairman
of the Board of @o(ernors of the 4ederal "eser(e Board. @reens#an, Aolcker, and Baker are members of the 1ouncil on 4oreign "elations.
(Photo7 "onald "eagan Presidential Library)
4ederal "eser(e 1hairman 0lan @reens#an is gi(en his honorary knighthood from Tueen Bli2abeth 88 of the 'nited Eingdom of @reat Britain
(left) at Balmoral castle in the $cottish ighlands on !hursday, $e#tember 6/, 6<<6 as 0lan @reens#an)s wife 0ndrea *itchell, a Kournalist for
=B1, stands at his side. $ir 0lan @reens#an and 0ndrea *itchell are members of the 1ouncil on 4oreign "elations5 $ir 0lan @reens#an and
0ndrea *itchell attended the 6<<6 Bilderberg *eetings in 1hantilly, Airginia together in *ay-;une 6<<6. (0P PhotoC Da(id 1heskin)
+lan .reenspan shakes hands with *resident Ronald Reagan at the &hite 7ouse as outgoing Federal Reserve Chairman *aul
,ol(ker stands ne3t to .reenspan% /*hoto: Ronald Reagan *residential Ci1rary0
President "onald "eagan holds an economic briefing with !reasury $ecretary ;ames 0. Baker 888, 4ederal "eser(e 1hairman 0lan
@reens#an, 1ouncil of Bconomic 0d(isers 1hairman Beryl $#rinkel, White ouse 1hief of $taff oward Baker, and Dan 1ri##en in the F(al
Fffice on 4ebruary ,<, ,-99. (Photo7 "onald "eagan Presidential Library)
(0PCWide World Photos5 $ource7 Back From the Brink: The Greenspan Years by $te(en E. Beckner)
President "onald "eagan attends an economic meeting with 4ederal "eser(e 1hairman 0lan @reens#an, White ouse 1hief of $taff oward
Baker, and !reasury $ecretary ;ames 0. Baker 888 in the West $itting all on Fctober 6<, ,-9:, a day after OBlack *ondayP, when the stock
markets crashed. 0lan @reens#an, oward Baker, and ;ames 0. Baker 888 are members of the 1ouncil on 4oreign "elations.
(Photo7 "onald "eagan Presidential Library)
=B1 Kournalist 0ndrea *itchell watches Aice President Dick 1heney (right) administer the oath of office to her husband $ir 0lan
@reens#an, the 1hairman of the 4ederal "eser(e, in the home of former President @erald 4ord in Bea(er 1reek, 1olorado on
;une ,-, 6<<+. (Photo by Da(id BohrerCWhite ouse)
4ederal "eser(e 1hairman 0lan @reens#an (left) shakes hands with '.$. President @eorge .W. Bush. eorge H.W. ,ush's gran#father
(an# former -... .enator &res+ott ,ush's father" .amuel &. ,ush was a Class , <ire+tor of the Fe#eral 6eser4e ,ank of Cle4elan#
from ()*/ to ()3>. (Photo7 Greenspan: The +an Behin +oney by ;ustin *artinC@eorge Bush Presidential Library)
$o(iet 1ommissar *ikhail @orbache(, President @eorge .W. Bush, and 4ederal "eser(e 1hairman 0lan @reens#an a##ear in a recei(ing
line at a state dinner in Washington, D.1. on *ay .,, ,--<. !his #hoto a##ears in the book The Age of Tur%u!ence: A,entures in a New
(or! by 0lan @reens#an. (Photo7 @eorge .W. Bush Presidential Library)
President Bill 1linton a##ears with 4ederal "eser(e 1hairman 0lan @reens#an at the White ouse.
4ederal "eser(e 1hairman 0lan @reens#an, right, shakes hands with $enator illary "odham 1linton (D-=&) #rior to testifying
before the $enate Budget 1ommittee on 1a#itol ill on ;anuary 6>, 6<<,. (Photo by 0le3 WongC=ewsmakers)
'.$. $ecretary of the !reasury Lawrence $ummers (left), '.$. President Bill 1linton (center), and 4ederal "eser(e 1hairman 0lan @reens#an
meet at the White ouse on =o(ember ,6, ,--- after a new financial law was #assed by 1ongress. (J "on $achsC1=PC$ygmaC1orbis)
'.$. !reasury $ecretary ;ohn $now (1), 4ederal "eser(e 1hairman 0lan @reens#an (L), and $ecurities and B3change 1hairman William
Donaldson confer during at a meeting of the PresidentIs Working @rou# on 4inancial *arkets at the !reasury De#artment in Washington, D.1.
on =o(ember ,+, 6<<.. (J '.$. !reasury De#artment andoutC"eutersC1orbis)
+lan .reenspan! the Federal Reserve Chairman! appears with Treasury <e(retary Ro1ert -% Ru1in! left! at a 7ouse hearing in
FFL% Both men were mem1ers of the Coun(il on Foreign Relations at the time this photo was taken%
President Bill 1linton meets with (from left to right) 4ederal "eser(e 1hairman 0lan @reens#an, @ene $#erling, *artin =. Baily,
!reasury $ecretary Lawrence $ummers, and ;ohn Podesta on ;anuary +, 6<<<.
President @eorge W. Bush (left) and Aice President Dick 1heney listen to 4ederal "eser(e 1hairman 0lan @reens#an. Dick
1heney and 0lan @reens#an are members of the 1ouncil on 4oreign "elations. (Washington PostCWhite ouseC0P Photo)
=ational Bconomic 1ouncil Director $te#hen 4riedman (right) watches President @eorge W. Bush talk with 4ederal "eser(e
Board 1hairman 0lan @reens#an (left) in the F(al Fffice on *ay ,9, 6<<+.
!reasury $ecretary ;ohn $now, $en. Lindsey @raham ("-$1), 4ederal "eser(e 1hairman 0lan @reens#an, and $en. 1harles
$chumer (D-=&) discuss #olicy on "ed 1hina trade during a meeting on 1a#itol ill on ;une .<, 6<<>.
(Photo by 0le3 WongC@etty 8mages)
4ederal "eser(e Board 1hairman 0lan @reens#an discusses his #ending testimony with '.$. $enator illary "odham 1linton (D-=ew &ork)
and '.$. $enator Eit Bond ("-*issouri) before the '.$. $enate Budget 1ommittee meeting in Washington, D.1. on ;anuary 6>, 6<<,.
(J "on $achsC1=PC1orbis)
0lan @reens#an, 1hairman and Board of @o(ernors of 4ederal "eser(e $ystem, chats with 1hairman Paul $arbanes (D-*aryland), center,
and '$ $enator Bill =elson (D-4lorida) following @reens#anIs testimony before the '$ $enate Banking, ousing, 'rban 0ffairs 1ommittee in
Washington, D.1. on ;uly ,/, 6<<6. !he hearing focused on the 4ederal "eser(e BoardIs monetary #olicy re#ort.
(J "on $achsC1=PC1orbis $ygma)
4ederal "eser(e 1hairman 0lan @reens#an talks with $en. 1harles $chumer (D-=&) before a $enate Banking, ousing and
'rban 0ffairs 1ommittee hearing on 1a#itol ill on ;uly 6,, 6<<>. 0lan @reens#an is a member of the 1ouncil on 4oreign
"elations (14")5 1harles $chumer is a former 14" member. (Photo by *ark WilsonC@etty 8mages)
!reasury $ecretary "obert "ubin (left) and 4ederal "eser(e 1hairman 0lan @reens#an arri(e for hearings on 1a#itol ill on
*ay 6,, ,--9. (;amal 0. WilsonC04PC@etty 8mages)
4ederal "eser(e Board 1hairman 0lan @reens#an s#eaks during a luncheon meeting held by the 1ouncil on 4oreign "elations
in Washington, D.1. on =o(ember ,-, 6<<6. (Photo by 0le3 WongC@etty 8mages)
4ederal "eser(e 1hairman 0lan @reens#an talks to !reasury $ecretary =icholas Brady in ,--<.
4ederal "eser(e 1hairman 0lan @reens#an listens to !reasury $ecretary Lloyd Bentsen.
4ederal "eser(e 1hairman 0lan @reens#an Kokes with 1ongressman ;im Leach (left) and !reasury $ecretary "obert "ubin
(center) in ,---. 0ll three men are members of the 1ouncil on 4oreign "elations.
/<our(e: ack From the rink. The !reenspan Years 1y <teven B% Be(kner0
4ederal "eser(e 1hairman 0lan @reens#an (center) and *er(yn Eing (right), @o(ernor of !he Bank of Bngland, #ose with
1hancellor of the B3cheDuer @ordon Brown after collecting their honorary doctorate degrees in the #resence of !he Duke of
Bdinburgh on 4ebruary :, 6<<> in Bdinburgh, $cotland. @reens#an, Eing, and Brown ha(e attended the Bilderberg *eetings in
the #ast. (Photo by 1hristo#her 4urlongC@etty 8mages)
4ederal "eser(e Board 1hairman 0lan @reens#an testifies as !reasury $ecretary Lawrence . $ummers looks on before the
Banking, ousing and 'rban 0ffairs 1ommittee in Washington D.1. on ;une 6,, 6<<<. (Photo by *ichael $mithC=ewsmakers)
4ederal "eser(e 1hairman 0lan @reens#an (right) recei(es an honorary Doctor of 1ommercial $cience degree from =ew &ork
'ni(ersity President ;ohn $e3ton in =ew &ork 1ity on December ,+, 6<<>. @reens#an and $e3ton are members of the 1ouncil
on 4oreign "elations. (Photo by *ario !amaC@etty 8mages)
$ir 0lan @reens#an (left), the 1hairman of the 4ederal "eser(e, shakes hands with @ordon Brown, 1hancellor of the B3cheDuer
of the 'nited Eingdom, after recei(ing honorary degrees from =ew &ork 'ni(ersity in =ew &ork 1ity on December ,+, 6<<>.
(Photo by *ario !amaC@etty 8mages)
4ederal "eser(e 1hairman 0lan @reens#an talks to Buro#ean 1entral Bank President ;ean-1laude !richet at the beginning of
the @6< finance ministers and central bank go(ernorsI meeting in Berlin, @ermany on =o(ember ,-, 6<<+. @reens#an and
!richet attended the 6<<6 Bilderberg *eetings in 1hantilly, Airginia, '.$.0. together in 6<<6.
(Photo by $ean @allu#C@etty 8mages)
4rom left to right7 4ederal "eser(e 1hairman 0lan @reens#an, '.$. !reasury $ecretary ;ohn $now, (unidentified), Buro#ean
'nion 1entral Bank @o(ernor ;ean-1laude !richet, 8nternational *onetary 4und *anaging Director "odrigo de "ato, and World
Bank President ;ames D. Wolfensohn a##ear at the beginning of the @-: ministerial meeting on 0#ril ,/, 6<<> in Washington,
D.1. @reens#an, !richet, "odrigo de "ato, and Wolfensohn ha(e attended the Bilderberg *eetings in the #ast. (0P Photo)
!reasury $ecretary ;ames 0. Baker 888 (left) watches outgoing 4ederal "eser(e 1hairman Paul Aolcker shake hands with incoming 4ederal
"eser(e 1hairman 0lan @reens#an (right) in ;uly ,-9:.
"oger 4erguson (left), Aice 1hairman of the 4ederal "eser(e, s#eaks with 4ederal "eser(e 1hairman 0lan @reens#an during a meeting of the
8nternational *onetary and 4inancial 1ommittee Board of @o(ernors at the 8nternational *onetary 4und Building in Washington, D.1. on
Fctober 6, 6<<+. (Photo by Brendan $mialowskiC@etty 8mages)

Left #hoto7 4ederal "eser(e 1hairman 0lan @reens#an and 4ederal "eser(e Aice 1hairman "oger W. 4erguson #re#are for a
meeting.
"ight #hoto7 4ederal "eser(e 1hairman 0lan @reens#an a##ears with President @eorge W. Bush.
4rench 4inance *inister =icolas $arko2y (right) meets with '$ 1hairman of the 4ederal "eser(e Board 0lan @reens#an (L) at the
8nternational *onetary 4und building in Washington, D.1. on 0#ril 6+, 6<<+ !he leaders met during the 8*4 and World Bank @rou# 6<<+
$#ring *eetings. (=icholas "obertsC04PC@etty 8mages)
4ederal "eser(e Board 1hairman 0lan @reens#an s#eaks to the #ress at the White ouse in Washington, D.1. on ;uly ,<, ,--, after being
rea##ointed by President Bush (") to a second four-year term. (J BettmannC1F"B8$)
1ongressman Dick @e#hardt and William ;. *cDonough, the President of the 4ederal "eser(e Bank of =ew &ork, are seen
laughing during a 1ouncil on 4oreign "elations meeting on *arch ., ,--9. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
($ource7 The Age of Tur%u!ence: A,entures in a New (or! by 0lan @reens#an)
;anet L. &ellen, the President of 4ederal "eser(e Bank of $an 4rancisco, and *ichael . *oskow, the President of 4ederal
"eser(e Bank of 1hicago, a##ear at the arold Pratt ouse in =ew &ork 1ity.
(Photo7 6<</ 1ouncil on 4oreign "elations 0nnual "e#ort)
!he 4ederal "eser(e Board in ,--/. 4ront row7 0lice "i(lin, 0lan @reens#an, ;anet &ellen. Back row7 Laurence . *eyer, $usan *. Philli#s,
Bdward O*ikeP Eelley ;r., and Lawrence B. Lindsay. "i(lin, @reens#an, and &ellen are members of the 1ouncil on 4oreign "elations.

Left #hoto7 4ederal "eser(e 1hairman 0lan @reens#an (left) and World Bank President ;ames Wolfensohn a##ear at a #arty together in ;une
6<<+. (Photo7 htt#7CCwww.washingtonlife.comCissuesC6<<+-</CbloombergC)
"ight #hoto7 Washington Post Kournalist ;im oagland and 4ederal "eser(e 1hairman 0lan @reens#an a##ear at a #arty in $e#tember 6<<>.
(0##eared in7 ;ane $tanton itchcock Book Partys on $e#tember 6<<>)
htt#7CCwww.washingtonlife.comCdirectoriesC#hotosC?letterU;%nameU;im-oagland
4ederal "eser(e 1hairman 0lan @reens#an (right) shakes hands with 1ommunist 1hina)s President ;iang Remin as '.$.
President Bill 1linton is seen engaging in a con(ersation with ;iang during a White ouse state dinner in Washington, D.1. in
Fctober ,--:. (Photo7 !he =ew &ork !imesC"euters)
4ederal "eser(e 1hairman 0lan @reens#an listens to "ichard D. Parsons (left) as he s#eaks to 1ouncil on 4oreign "elations
members at the arold Pratt ouse on December /, ,--<. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
;essica !. *athews (left), 4ederal "eser(e 1hairman 0lan @reens#an (center), and 4ranklin D. "aines a##ear at a 1ouncil on
4oreign "elations meeting on $e#tember ,:, ,--/. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
President of 4ederal "eser(e Bank of =ew &ork B. @erald 1orrigan (left), 0lan @reens#an (center), and 8sidor "abi meet
#ri(ately at a 1ouncil on 4oreign "elations meeting. (1ouncil on 4oreign "elations 0nnual "e#ort)
*artin 4eldstein (left) and 0lan @reens#an walk u# the stairs at the arold Pratt ouse.
(Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)

Left #hoto7 0lan @reens#an and "obert A. "oosa sign their names in a ledger. "obert A. "oosa was a #artner of Brown
Brothers arriman % 1om#any, a banking firm in =ew &ork 1ity. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
"ight #hoto7 Da(id "ockefeller listens to enry 1. Wallich, *ember of the @o(ernor of the 4ederal "eser(e $ystem, during a
meeting held at the arold Pratt ouse. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
elene D. @ayle, President of the 4ederal "eser(e Bank of 1hicago *ichael *oskow (center), and =orthwestern 'ni(ersity
President enry $. Bienen a##ear at a 1ouncil on 4oreign "elations meeting. 0ll three indi(iduals are members of the 1ouncil
on 4oreign "elations. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
William ;. *cDonough (left) was the President of the 4ederal "eser(e Bank of =ew &ork at the time this #hoto was taken.
0dmiral Aern 1lark was the 1hief of =a(al F#erations at the time this #hoto was taken.

Left #hoto7 B. @erald 1orrigan (left), the President of the 4ederal "eser(e Bank of =ew &ork, and 0ir 4orce 1hief of $taff @en.
Larry D. Welch smile for the camera at the arold Pratt ouse in =ew &ork 1ity on December :, ,-9-.
"ight #hoto7 1itibank 1hairman Walter Wriston (left) and 0lan @reens#an are seen laughing during a 1ouncil on 4oreign
"elations meeting. (Photo7 1ouncil on 4oreign "elations 0nnual "e#ort)
4ederal "eser(e 1hairman 0lan @reens#an (left), 0ndrea *itchell (center), and !reasury $ecretary "obert "ubin laugh together in ,--/.

Left #hoto7 Paula Dobriansky talks to 4ederal "eser(e 1hairman 0lan @reens#an at a meeting on ;anuary ,-, ,---.
"ight #hoto7 4ederal "eser(e 1hairman 0lan @reens#an listens to 0merican 8nternational @rou# 1hairman and 1ouncil on 4oreign "elations
Aice 1hairman *aurice @reenberg at a 1ouncil on 4oreign "elations meeting in ;uly 6<<<.
(Both #hotos from the 1ouncil on 4oreign "elations 0nnual "e#ort)
enry Eissinger (left) s#eaks with 4ederal "eser(e 1hairman 0lan @reens#an in Philadel#hia on *ay 6<, 6<<+.
(Photo by William !homas 1ainC@etty 8mages)
4irst De#uty *anaging Director of the 8nternational *onetary 4und $tanley 4ischer (left), 4ederal "eser(e 1hairman 0lan
@reens#an (center), and 8nternational *onetary 4und *anaging Director *ichel 1amdessus ha(e a #ri(ate con(ersation at a
meeting on $e#tember 6/, ,---. 0lan @reens#an and $tanley 4ischer are members of the 1ouncil on 4oreign "elations.
$tanley 4ischer is currently the @o(ernor of the Bank of 8srael.
@erman 1hancellor 0ngela *erkel (1) with 4ederal "eser(e 1hairman 0lan @reens#an (left) and former '.$. $ecretary of $tate 1olin Powell
(right) during a rece#tion at the @erman Bmbassy in Washington, D.1. on ;anuary ,6, 6<</. (J @'8DF BB"@*0== CPFFLCBP0C1orbis)
;a#anese Prime *inister ;unichiro Eoi2umi (") shakes hands with '.$. 4ederal "eser(e 1hairman 0lan @reens#an before their talks at the
#rime ministerIs official residence in !okyo, ;a#an on Fctober ,:, 6<<>. Eoi2umi and @reens#an discussed macroeconomic and financial
issues on *onday, a senior finance ministry official said. (J Ea2uhiro =ogiCPoolC"eutersC1orbis)
'.$. 4ederal "eser(e 1hairman 0lan @reens#an (L) meets with Bank of ;a#an (BF;) @o(ernor !oshihiko 4ukui at BF; headDuarters in
!okyo, ;a#an on Fctober ,:, 6<<>. @reens#an was in !okyo for a two-day (isit. (J 8$$B8 E0!FC"eutersC1orbis)
'.$. 4ederal "eser(e 1hairman 0lan @reens#an (L) s#eaks with Peo#leIs Bank of 1hina @o(ernor Rhou Viaochuan during a @-6< finance
ministers and central bank go(ernors meeting in Vianghe, 1ommunist 1hina in ebei #ro(ince, about ,<< kms (/6 miles) east of BeiKing on
Fctober ,>, 6<<>. 1ommunist 1hina)s President u ;intao, under #ressure from Washington to let the yuan rise faster, said on $aturday
during the o#ening ceremony of the meeting that maKor countries had an obligation to kee# their currencies reasonably steady for the sake of
the world economy. (J 0lfred 1heng ;inC"eutersC1orbis)
!reasury $ecretary "obert "ubin (left), 4ederal "eser(e 1hairman 0lan @reens#an (center), and 1ommunist 1hina)s Premier Rhu "ongKi
#ose for #ress #hotogra#hers at Blair ouse in Washington, D.1. on 0#ril -, ,---. (Photo7 0le3 WongC@etty 8mages)
4ederal "eser(e Board 1hairman 0lan @reens#an (left) shakes hands with "ed 1hina)s 1ommissar u ;intao during a meeting with leaders
of the :th @-6< 4inance *inisters and 1entral Bank @o(ernors inside the @reat all of the Peo#le in BeiKing, 1ommunist 1hina on Fctober >,
6<<>. (Photo by ;ason Lee-PoolC@etty 8mages)
!his #hoto a##ears in the book The Age of Tur%u!ence: A,entures in a New (or! by 0lan @reens#an.
;iang Remin (left), the 1ommissar of 1ommunist 1hina, entertains Aice 1hairman of the 4ederal "eser(e 0lice "i(lin (wearing a
red dress) and !reasury $ecretary "obert "ubin (right) at a tem#le in BeiKing on $e#tember 6/, ,--:. Both 0lice "i(lin and
"obert "ubin were members of the 1ouncil on 4oreign "elations at the time this #hoto was taken on $e#tember 6/, ,--:.
(Photo by *ike 4iala)
4ormer 1hairman of 1hase *anhattan Bank Da(id "ockefeller (left), former !reasury $ecretary "obert "ubin (center), and
President of 4ederal "eser(e Bank of =ew &ork William ;. *cDonough meet #ri(ately at the arold Pratt ouse. !his #hoto
a##ears on the back co(er of the 6<<< 1ouncil on 4oreign "elations 0nnual "e#ort.
4ederal "eser(e 1hairman 0lan @reens#an has a meeting with 1ouncil on 4oreign "elations 1hairman Peter @. Peterson.
World Bank President ;ames Wolfensohn (left) greets 4ederal "eser(e 1hairman 0lan @reens#an before their meeting at the
World Bank in Washington D.1 on 0#ril 6-, ,---. (;oyce =altchayanC04PC@etty 8mages)
4ederal "eser(e Board 1hairman 0lan @reens#an (left), 4ederal "eser(e Aice 1hairman 0lice "i(lin (center), and World Bank
President ;ames Wolfensohn talk together before the start of 8nternational *onetary 4und (8*4) 8nterim 1ommittee meetings at
the 8*4 in Washington, D.1. on 0#ril 69, ,---. (*ario !amaC04PC@etty 8mages)
4ederal "eser(e 1hairman 0lan @reens#an leans o(er to chat with '.$. Labor $ecretary Blaine 1hao before he addressed the =ational
$ummit on "etirement $a(ings at a Washington D.1. hotel on 4ebruary 69, 6<<6. President @eorge W. Bush addressed the summit following
@reens#an. ("B'!B"$CEe(in LamarDue)
!reasury $ecretary ;ohn $now (L) and 1hairman of the 4ederal "eser(e 0lan @reens#an ha(e a laugh during the un(eiling of the new G6<
bills at the '.$. Bureau of Bngra(ing and Printing in Washington, D.1. on *ay ,., 6<<.. !he new bill, to be issued this autumn, has enhanced
security features and subtle background colors as #art of an ongoing effort to stay ahead of the counterfeiting of '.$. currency.
("B'!B"$CEe(in LamarDue)
4ederal "eser(e 1hairman 0lan @reens#an (left) and ;ean-1laude !richet, President of the Buro#ean 1entral Bank (B1B),
attend the,+th 4rankfurt Buro#ean Banking 1ongress (BB1) in 4rankfurt, @ermany on =o(ember ,-, 6<<+.
(Photo by "al#h FrlowskiC@etty 8mages)
4ederal "eser(e 1hairman 0lan @reens#an (center) meets with Buro#ean 1entral Bank President ;ean-1laude !richet (right)
and Bank of Bngland @o(ernor *er(yn Eing at the beginning of the @6< finance ministers and central bank go(ernorsI meeting
in Berlin on =o(ember ,-, 6<<+. 0ll three men ha(e attended the Bilderberg *eetings at least once.
(Photo by $ean @allu#C@etty 8mages)
1hairman of the 4ederal "eser(e 0lan @reens#an (L) and @reat BritainIs Duke of Bdinburgh stand outside the *cBwan all in Bdinburgh,
$cotland, @reat Britain after attending an award ceremony on 4ebruary :, 6<<>. @reens#an recei(ed a onorary Degree from the 'ni(ersity of
Bdinburgh. (J ;B44 ; *8!1BLLC"eutersC1orbis)
Lawrence $ummers (far left) watches 4ederal "eser(e 1hairman 0lan @reens#an shake hands with $ecretary of the !reasury "obert "ubin
at a conference held in Washington, D.1. in $e#tember ,--9. (J *ark PetersonC1F"B8$)
'.$. President @eorge W. Bush (") awards his Presidential *edal of 4reedom to former 1hairman of the 4ederal "eser(e 0lan @reens#an at
a ceremony in the Bast "oom of the White ouse in Washington, D.1. on =o(ember -, 6<<>. Bush #resented the highest ci(il award
recogni2ing e3ce#tional meritorious ser(ice to ,+ honorees from the s#ort, entertainment and #olitical world at the ceremony.
(J ;0$F= "BBDC"eutersC1orbis)
4ederal "eser(e 1hairman 0lan @reens#an (L) and World Bank President Paul Wolfowit2 attend a @: ministers working lunch at the !reasury
De#artment in Washington, D.1. on $e#tember 6., 6<<>. (J &'"8 @"8P0$C"eutersC1orbis)
$ecretary of Defense Donald . "umsfeld (right) congratulates 4ederal "eser(e 1hairman 0lan @reens#an (left) after awarding
him the De#artment of Defense *edal for Distinguished Public $er(ice at the Pentagon in 0rlington, Airginia on ;anuary 6.,
6<</. (Photo7 '.$. De#artment of DefenseCPetty Ffficer ,st 1lass 1had ;. *c=eeley, '.$. =a(y)
Ben Bernanke Bra (6<</-6<,+)
President Barack Fbama meets with !reasury $ecretary !imothy @eithner (left) and 1hairman of the 4ederal "eser(e Ben Bernanke (right) in
the "oose(elt "oom of the White ouse in Washington, D.1. on ;une ,:, 6<<-. ("euters)
'.$. President Barack Fbama shakes hands with 4ederal "eser(e 1hairman Ben Bernanke (left) after nominating Bernanke for a second term
in Fak Bluffs, *assachusetts on the island of *arthaIs Aineyard on 0ugust 6>, 6<<-. ("euters)
President Barack Fbama (center) s#eaks during an economic daily meeting in the 1abinet "oom of the White ouse in Washington, D.1. on
*arch 6., 6<<-. L-" with the President are7 Larry $ummers, head of the White ouse Bconomic 1ouncil, 1ouncil of Bconomic 0d(isers 1hief
1hristina "omer, !reasury $ecretary !imothy @eihtner, Fbama, 4ederal "eser(e 1hairman Ben Bernanke and 4D81 1hairman $heila 1. Bair.
(@etty 8mages)
Ffficials listen as '.$. President Barack Fbama s#eaks at the White ouse in Washington, D.1. on ;une ,:, 6<<-. 4rom left to right7
1ongressman Barney 4rank (D-*0), $enator Dick Durbin (D-8L), $enator 1hris Dodd (D-1!), Director of the Fffice of *anagement and
Budget Peter Frs2ag, !reasury $ecretary !im @eithner, Director of the =ational Bconomic 1ouncil Lawrence $ummers and 4ederal "eser(e
Board 1hairman Ben Bernanke. Barney 4rank, 1hris Dodd, Peter Frs2ag, !im @eithner, and Lawrence $ummers are (or were) members of
the 1ouncil on 4oreign "elations. ("euters)
Lawrence $ummers (left), Director of =ational Bconomic 1ouncil, s#eaks with Ben Bernanke, 1hairman of the Board of
@o(ernors of the 4ederal "eser(e, before President Barack Fbama s#eaks on the economy and com#rehensi(e #lan for
financial regulations in the Bast "oom at the White ouse in Washington, D.1., on ;une ,:, 6<<-. Lawrence $ummers and Ben
Bernanke attended the Bilderberg *eetings in 1hantilly, Airginia in ;une 6<<9. (@etty 8mages)
4ederal "eser(e Board 1hairman Ben $. Bernanke (left) shakes hands with 4ederal "eser(e Board @o(ernor Daniel E. !arullo, as his wife
Louisa B. !arullo looks on during the swearing-in ceremony in Washington, D.1. on ;anuary 69, 6<<-. !arullo on Wednesday took the oath of
office as a member of the Board of @o(ernors of the 4ederal "eser(e $ystem to fill an une3#ired term ending ;anuary .,, 6<66. ("euters)
President-elect Barack Fbama shakes hands with Daniel !arullo after introducing him as his selection to the 4ederal "eser(e Board of
@o(ernors during a #ress conference at the Drake otel in 1hicago, 8llinois on December ,9, 6<<9. Daniel !arullo is a member of the 1ouncil
on 4oreign "elations. (@etty 8mages)
'$ President @eorge W. Bush (6nd left) looks at the 1hairman of the President)s Working @rou# on 4inancial *arkets, !reasury
$ecretary enry Paulson (6nd right), as he s#eaks following a meeting with the @rou# in the "oose(elt "oom of the White
ouse in Washington, D.1. on ;anuary +, 6<<9. Looking on from left are Aice President Dick 1heney and 4ederal "eser(e
1hairman Ben Bernanke. (04PC@etty 8mages)
'.$. !reasury $ecretary enry Paulson (left), 4ederal "eser(e 1hairman Ben Bernanke (center) and President and 1BF of the 4ederal
"eser(e Bank of =ew &ork !imothy 4. @eithner listen as 4D81 1hairman $heila Bair (not #ictured) s#eaks at the !reasury De#artment 1ash
"oom in Washington, D.1. on Fctober ,+, 6<<9. Paulson announced the !reasury De#artmentIs #lan to take eDuity stakes in #otentially
thousands of banks totaling about G6>< billion. 0ll three men attended the 6<<9 Bilderberg *eetings in 1hantilly, Airginia in ;une 6<<9.
("euters)
4ederal "eser(e 1hairman Ben Bernanke (right) s#eaks with committee chairman '.$. 1ongressman Barney 4rank before gi(ing testimony to
the ouse 4inancial 1ommittee on 1a#itol ill in Washington, D.1. on ;uly 6,, 6<<-. (@etty 8mages)
4ederal "eser(e 1hairman Ben Bernanke (center) s#eaks to the $enate Banking, ousing and 'rban 0ffairs 1ommittee 1hairman $en.
1hristo#her Dodd (left) and "anking *ember $en. "ichard $helby as he arri(es to testify before the committee on 1a#itol ill in Washington,
D.1. on ;uly 66, 6<<-. ("euters)
President @eorge W. Bush (left) looks on as 4ederal "eser(e Aice 1hairman "oger W. 4erguson, ;r. (center) administers the oath of office,
during the swearing-in ceremony for Ben Bernanke (right) as the new 1hairman of the 4ederal "eser(e, while BernankeIs wife, 0nna
Bernanke, holds a bible at the 4ederal "eser(e in Washington, D.1. on 4ebruary /, 6<</. (Photo by ;ay L. 1lendenin-PoolC@etty 8mages)
President @eorge W. Bush (left) looks on as 4ederal "eser(e Aice 1hairman "oger W. 4erguson, ;r., (6nd left) administers the oath of office,
during the swearing-in ceremony for Ben Bernanke, (6nd right) as the new 1hairman of the 4ederal "eser(e Bank , while BernankeIs wife,
0nna holds a bible, at the 4ederal "eser(e Bank in Washington, D.1. on 4ebruary /, 6<</. 4ormer 1hairman of 4ederal "eser(e Board 0lan
@reens#an (right) looks on during the ceremony. (Photo by ;ay L. 1lendenin-PoolC@etty 8mages)
President @eorge W. Bush nominates Ben Bernanke (right) to succeed 0lan @reens#an (left) as 4ederal "eser(e 1hairman on
Fctober 6+, 6<<>. (Photo by *ark WilsonC@etty 8mages)
'.$. President @eorge W. Bush (1), flanked by '.$. !reasury $ecretary enry Paulson (right) and 4ederal "eser(e 1hairman Ben Bernanke
(left) and also followed by $B1 1hairman 1hristo#her 1o3, arri(e for a statement in the "ose @arden at the White ouse for an
announcement on a federal go(ernment #lan to try and shore u# failing financial markets on $e#tember ,-, 6<<9. !he #lan would attem#t to
stabili2e money market mutual funds, absorb bad debt held by mortgage com#anies, and ban short selling of financial com#any stocks.
(@etty 8mages)
'.$. President @eorge W. Bush (6nd left), flanked by (left to right) 4ederal "eser(e 1hairman Ben Bernanke, '.$. !reasury
$ecretary enry Paulson and $B1 1hairman 1hristo#her 1o3, announces a #lan by the federal go(ernment to try and shore u#
failing financial markets in Washington, D.1. on $e#tember ,-, 6<<9. !he #lan would attem#t to stabili2e money market mutual
funds, absorb bad debt held by mortgage com#anies, and ban short selling of financial com#any stocks. (@etty 8mages)
President @eorge W. Bush s#eaks about the economy in the "ose @arden of the White ouse in Washington, D.1. on
$e#tember ,-, 6<<9. 4rom left to right are7 1hairman of the 4ederal "eser(e Ben Bernanke, Bush, '.$. $ecretary of the
!reasury enry Paulson, and $B1 1hairman 1hristo#her 1o3. ("euters)
4ederal "eser(e 1hairman Ben Bernanke (center) s#eaks ne3t to !reasury $ecretary enry Paulson (left) and ouse $#eaker
=ancy Pelosi after their meeting with other congressional leaders in the '.$. 1a#itol in Washington, D.1. on $e#tember ,9,
6<<9. ("euters)
4ederal "eser(e 1hairman Ben Bernanke (.rd left) and !reasury $ecretary enry Paulson (+th left) attend a closed meeting
with '.$. ouse $#eaker =ancy Pelosi (Democrat-1alifornia) (.rd right), '.$. 1ongressman "ahm Bmanuel (left, Democrat-
8llinois), '.$. $enator 1hristo#her Dodd (/
th
left), and other congressional leaders in the '.$. 1a#itol in Washington, D.1. on
$e#tember ,9, 6<<9. ("euters)
!reasury $ecretary enry Paulson (left) talks to 4ederal "eser(e Board 1hairman Ben Bernanke before testifying with
$ecurities and B3change 1ommission 1hairman 1hristo#her 1o3 (right) at the $enate Banking, ousing and 'rban 0ffairs
1ommittee on 1a#itol ill in Washington, D.1. on ;uly ,>, 6<<9. 8n light of recent bank failures and the housing crisis, the
financial leaders testified about the rescue of 4annie *ae and 4reddie *ac, the nationIs largest mortgage buyers, and #ro#osed
regulatory res#onses. (@etty 8mages)
'.$. !reasury $ecretary enry Paulson (left) rubs his eyes as he and 4ederal "eser(e Board 1hairman Ben Bernanke (right)
testify at a hearing of the ouse 4inancial $er(ices 1ommittee on 1a#itol ill in Washington, D.1. on ;uly ,<, 6<<9. enry
Paulson and Ben Bernanke attended the 6<<9 Bilderberg *eetings conference held in 1hantilly, Airginia in ;une 6<<9. ("euters)
!imothy @eithner (left), President of the 4ederal "eser(e Bank of =ew &ork, and 4ederal "eser(e 1hairman Ben Bernanke
(right) use na#kins during lunch at the Bconomic 1lub of =ew &ork in =ew &ork 1ity on Fctober ,>, 6<<9.
(0ssociated PressC*ark Lennihan)

Left #hoto7 !his #hoto, #ro(ided by the 4ederal "eser(e, shows Ben Bernanke, right, sworn in as the ,+th 1hairman of the
4ederal "eser(e Board by Aice 1hairman "oger 4erguson ;r. (Britt Leckman C 4ederal "eser(e $ystem (ia 0P)
"ight #hoto7 ;ohn Li#sky (left), the 1hief Bconomist of ;P *organ 1hase, listen to ;anet &ellen, the President of the 4ederal
"eser(e Bank of $an 4rancisco. ;ohn Li#sky and ;anet &ellen are members of the 1ouncil on 4oreign "elations.
4ederal "eser(e 1hairman Ben Bernanke (left), !im @eithner (center), the President of the 4ederal "eser(e Bank of =ew &ork,
and 4ederal "eser(e Aice 1hairman Donald Eohn take a walk for a #hoto o##ortunity during the 0nnual Bconomic $ym#osium
in ;ackson ole on Wyoming on 0ugust 66, 6<<9. ("euters)
=ew &ork 4ederal "eser(e President !im @eithner (left), 4ederal "eser(e Aice 1hairman Donald Eohn (center), and 4ederal
"eser(e 1hairman Ben Bernanke take a walk during the 0nnual Bconomic $ym#osium in ;ackson ole, Wyoming on 0ugust
66, 6<<9. @eithner and Bernanke attended the 6<<9 Bilderberg *eetings conference held in 1hantilly, Airginia near
Washington, D.1. from ;une >-9, 6<<9. ("euters)
$ecurities and B3change 1ommission 1hairman 1hristo#her 1o3 (left) and !imothy @eithner (right), the President of the 4ederal "eser(e
Bank of =ew &ork, listen during a hearing before the ouse 4inancial $er(ices 1ommittee on 1a#itol ill in Washington, D.1. on ;uly 6+,
6<<9. !he hearing was focused on H4inancial *arket "egulatory "estructuring.H (@etty 8mages)
0lan @reens#an ("), former 1hairman of the 4ederal "eser(e, shakes hands with current 4ederal "eser(e 1hairman Ben
Bernanke at a rece#tion to celebrate the 6<th anni(ersary of !he 8nternational Bconomy maga2ine at the ay-0dams otel in
Washington, D.1. on Fctober ,9, 6<<:. ;ean-1laude !richet, President of the Buro#ean 1entral Bank, was honored as 6<<:
#olicymaker of the year. (@etty 8mages)
President of the Buro#ean 1entral Bank ;ean-1laude !richet (center) stands with 4ederal "eser(e 1hairman Ben Bernanke
(right) and former 4ederal "eser(e 1hairman 0lan @reens#an (left) during a #arty in !richetIs honor at the ay 0dams otel in
Washington, D.1. on Fctober ,9, 6<<:. (!im $loanC04PC@etty 8mages)
Buro#ean 1entral Bank 1hairman ;ean-1laude !richet (left), former 4ederal "eser(e 1hairman Paul 0. Aolcker (center), and
4ederal "eser(e 1hairman Ben Bernanke attend the 8nternational Banking $eminar on *onday, Fctober 66, 6<<:.
($ource7 @rou# of !hirty)
8nternational bankers #artici#ate in the 8nternational Banking $eminar meeting on *onday, Fctober 66, 6<<:. 4ederal "eser(e
1hairman Ben Bernanke is seated on the far right. (Photo7 @rou# of !hirty)
!imothy @eithner, President of the =ew &ork 4ederal "eser(e Bank, s#eaks at the 1ouncil on 4oreign "elations in =ew &ork
1ity on ;anuary ,,, 6<<:. (Photogra#her7 Daniel 0ckerCBloomberg =ews)
!imothy 4. @eithner (left) was the President of the 4ederal "eser(e Bank of =ew &ork at the time this #hoto was taken. B.
@erald 1orrigan is a former President of the 4ederal "eser(e Bank of =ew &ork. !his #hoto was #ublished in the 6<<: 1ouncil
on 4oreign "elations 0nnual "e#ort.
4ederal "eser(e 1hairman Ben Bernanke (left) recei(es the 1olumbia Business $chool Distinguished Leader in @o(ernment
award at the Waldorf-0storia in =ew &ork 1ity on *ay >, 6<<9. ("euters)
Prime *inister of @reat Britain @ordon Brown meets with Ben Bernanke, 1hairman of the 4ederal "eser(e, before a breakfast
meeting at the British Bmbassy in Washington, D.1. on 0#ril ,9, 6<<9. (1rown co#yrightC4lickr)
Britain)s Prime *inister @ordon Brown (left) greets 4ederal "eser(e Bank 1hairman Ben Bernanke at ,< Downing $treet in
London on ;anuary ,., 6<<-. ("euters)
Britain)s Prime *inister @ordon Brown (L) greets 4ederal "eser(e chairman Ben Bernanke at ,< Downing $treet, in London on
;anuary ,., 6<<-. (04PC@etty 8mages)
4ederal "eser(e 1hairman Ben Bernanke (left) greets 1ommunist 1hina)s Aice Premier Wang Tishan in Washington, D.1. on ;uly 6-, 6<<-.
("euters)
4ederal "eser(e 1hairman Ben Bernanke (left) shakes hands with Rhou Viaochuan (right), @o(ernor of the Peo#le)s Bank of 1hina, before a
meeting with 1ommunist 1hinaIs Aice Premier Wang Tishan (center) at the conclusion of the '.$.-1hina $trategic and Bconomic Dialogue, in
Washington, D.1. on ;uly 6-, 6<<-. (0P Photo)
!he @-: central bank go(ernors stand together for a #ortrait in Washington D.1. on 0#ril ,., 6<<:. 4rom left to right7 Da(id
Dodge of 1anada, 1hristian =oyer of 4rance, 03el Weber of @ermany, 4ederal "eser(e 1hairman Ben Bernanke of the 'nited
$tates, *ario Draghi of 8taly, !oshihiko 4ukui of ;a#an, *er(yn Eing of the 'nited Eingdom, and ;ean-1laude !richet of the
Buro#ean 1entral Bank, and World Bank President Paul Wolfowit2. (Photo by Brendan $mialowskiC@etty 8mages)
4rom left to right7 4ederal "eser(e 1hairman Ben Bernanke, $ecurities and B3change 1ommission ($B1) 1hairman
1hristo#her 1o3, 'nder $ecretary of !reasury for Domestic 4inance "obert $teel, and the President of the 4ederal "eser(e
Bank of =ew &ork !imothy @eithner testify before the $enate Banking 1ommittee hearing on the go(ernment bailout of Bear
$tearns on 1a#itol ill in Washington, D.1. on 0#ril ., 6<<9. '.$. senators e3#ressed concern that billions of dollars in ta3#ayer
funds has been #ut on the line to back last monthIs emergency takeo(er of troubled in(estment bank Bear $tearns.
(04PC@etty 8mages)
4ederal "eser(e Board 1hairman Ben Bernanke (left) talks to ;ean-1laude !richet, President of the Buro#ean 1entral Bank (B1B), during the
@: summit in Bssen, @ermany on 4ebruary ,<, 6<<:. !he @: finance ministers and central bank go(ernors discussed the de(elo#ment of
global economy for 6<<:. (Photo by "al#h FrlowskiC@etty 8mages)
Buro#ean 1entral Bank President ;ean-1laude !richet (L) s#eaks alongside ;acob 4renkel from the 0merican 8nternational @rou# (6nd L),
Deutsche Bundesbank 1hairman 03el Weber (6nd ") and '.$. 4ederal "eser(e 1hairman Ben Bernanke, at a rece#tion where !richet was
#resented with the H6<<: Policymaker of the &earH award, gi(en out by an international economy maga2ine, in Washington, D.1. on Fctober
,9, 6<<:. ("euters)
4ederal "eser(e 1hairman Ben $. Bernanke is seen lea(ing the 6<<9 Bilderberg *eetings at the Westfields *arriott otel in
1hantilly, Airginia, '.$.0., located near the Dulles 8nternational 0ir#ort, on $unday, ;une 9, 6<<9.
Donald Eohn, Aice 1hairman of the 4ederal "eser(e, reacts to a Duestion during a s#eech at the 1ouncil on 4oreign "elations
in =ew &ork 1ity on =o(ember 69, 6<<:. Eohn said that recent financial turbulence has re(ersed some of the im#ro(ement seen
in markets in #re(ious weeks, and could sDuee2e credit for households and businesses. (0ssociated PressC*ark Lennihan)
4ormer Bconomic 1lub of =ew &ork 1hairmen William ;. *cDonough (left) and Peter @. Peterson (center) #ose with @uest of onor !imothy
4. @eithner at the @rand yatt otel in =ew &ork 1ity on ;une -, 6<<9. William ;. *cDonough ser(ed as President of the 4ederal "eser(e
Bank of =ew &ork from ,--. to 6<<.. !imothy 4. @eithner ser(ed as President of the 4ederal "eser(e Bank of =ew &ork from 6<<. to 6<<-.
Peter @. Peterson ser(ed as the 1hairman of the 4ederal "eser(e Bank of =ew &ork from 6<<< to 6<<.. (Photo7 Bconomic 1lub of =ew &ork)
!he 4ederal "eser(e Fne-4inger $alute7 4ederal "eser(e Board 1hairman Ben Bernanke testifies before the $enate Banking 1ommittee on
1a#itol ill in Washington, D.1. on ;uly 66, 6<<-. (@etty 8mages)
President @eorge W. Bush (6nd ") laughs with 4ederal "eser(e 1hairman Ben Bernanke ("), $ecretary of the !reasury enry
Paulson (1), $ecurities and B3change 1ommission 1hairman 1hristo#her 1o3 (6nd L) and others during a meeting with the
PresidentIs Working @rou# on 4inancial *arkets at the White ouse on *arch ,:, 6<<9. enry Paulson is a member of the
1ouncil on 4oreign "elations. (04PC@etty 8mages)
Ben Bernanke (1), 1hairman of the 4ederal "eser(e, #oses for a #hoto with *er(yn Eing (L), @o(ernor of the Bank of Bngland,
and ;ean-1laude !richet, President of the Buro#ean 1entral Bank, during the @: meeting in !okyo, ;a#an on 4ebruary -, 6<<9.
("euters)
!reasury $ecretary !imothy @eithner (L) looks at his watch at the beginning of his meeting with 4ederal "eser(e 1hairman Ben Bernanke in
the $ecretary)s office at the !reasury De#artment in Washington, D.1. on *ay :, 6<<-. ("euters)
4ederal "eser(e 1hairman Ben Bernanke (L) testifies with Paul Aolcker, 1hairman of the PresidentIs Bconomic "eco(ery 0d(isory Board,
during a ouse 4inancial $er(ices 1ommittee hearing on 1a#itol ill in Washington, D.1. on *arch ,:, 6<,<. (@etty 8mages)
'.$. President Barack Fbama (1) s#eaks alongside 4ederal "eser(e 1hairman Ben Bernanke (L) and !reasury $ecretary !imothy @eithner
(") during the Bconomic Daily Briefing in the F(al Fffice of the White ouse in Washington, D.1. on ;une 6-, 6<,<. (@etty 8mages)
4ederal "eser(e Board 1hairman Ben Bernanke (1) #oses with board members at a two-day meeting of the 4ederal F#en *arket 1ommittee,
the 4ederal "eser(eIs interest rate-setting body, in Washington, D.1. in this *arch ,:, 6<<- #icture released on *arch ,-, 6<<-. !he 4ederal
"eser(e on Wednesday announced the #urchase of longer-dated !reasury securities to hel# end a dee#ening '.$. "ecession. 4ront row (left
to right)7 @o(ernor Bli2abeth Duke, @o(ernor Ee(in Warsh, 1hairman Bernanke, Aice 1hairman Donald Eohn, @o(ernor Daniel !arullo. Back
row (left to right)7 =ew &ork 4ed President William Dudley, Boston 4ed President Bric "osengren, $t. Louis 4ed President ;ames Bullard,
1hicago 4ed President 1harles B(ans, Eansas 1ity 4ed President !homas oenig, Dallas 4ed President "ichard 4isher, *innea#olis 4ed
President @ary $tern, 1le(eland 4ed President $andra Pianalto, 0tlanta 4ed President Dennis Lockhart, Philadel#hia 4ed President 1harles
Plosser, "ichmond 4ed President ;effrey Lacker, and $an 4rancisco 4ed President ;anet &ellen. <aniel $arullo, <ennis Lo+khart, 6i+har#
Fisher, an# Janet ;ellen are members of the Coun+il on Foreign 6elations. (J oC"eutersC1orbis)
William 1. Dudley, President and 1hief B3ecuti(e Ffficer of the 4ederal "eser(e Bank of =ew &ork, s#eaks at the 1ouncil on 4oreign
"elations in =ew &ork 1ity on *ay 6+, 6<,6. ("euters)
With the !eton *ountains behind them, 4ederal "eser(e 1hairman Ben Bernanke (left) and Bank of 8srael @o(ernor $tanley 4ischer (right)
walk together outside of the ;ackson ole Bconomic $ym#osium at @rand !eton =ational Park near ;ackson ole, Wyoming, '.$.0. on 4riday
0ugust .,, 6<,6. (Photo7 !ed $. WarrenC0P)
Federal Reserve Chairman Ben <% Bernanke /left0 appears with Timothy F% .eithner! *resident of the Federal Reserve Bank of
New York% /+ndrew 7arrer@Bloom1erg News0
President Barack Fbama (left) a##lauds after announcing his nomination of ;anet &ellen (center) to ser(e as the ne3t chairman of the 4ederal
"eser(e as outgoing 4ederal "eser(e 1hairman Ben Bernanke stands by at the White ouse in Washington, D.1. on Fctober -, 6<,..
(Pablo *artine2 *onsi(aisC0ssociated Press)
President Barack Fbama shakes hands with ;anet &ellen (left), Aice 1hairman of the 4ederal "eser(e, in the $tate Dining "oom of the White
ouse in Washington, D.1. on Fctober -, 6<,.. Fbama a##ointed &ellen to ser(e as the ne3t 1hairman of the 4ederal "eser(e, succeeding
Ben Bernanke. ;anet &ellen is a member of the 1ouncil on 4oreign "elations. (Photo7 1harles Dhara#akC0ssociated Press)
Ben $. Bernanke lea(es the Board of @o(ernors of the 4ederal "eser(e $ystem on ;anuary .,, 6<,+ after eight years as its
1hairman. (Photo7 4ederal "eser(e)
E=tra hotos o" au! Ho!,4%r F A!an ?r%%ns$an
$ir 0lan @reens#an (left) and Paul Aolcker (right) share a laugh while #artici#ating in a #anel discussion on ca#ital markets at
@eorgetown 'ni(ersity in Washington, D.1. on *arch ,., 6<<:. Both men once ser(ed as 1hairman of the 4ederal "eser(e.
@reens#an and Aolcker are members of the 1ouncil on 4oreign "elations. (Photo by 1hi# $omode(illaC@etty 8mages)
1hairman of the 4ederal "eser(e Ben Bernanke (L) talks with former chairman of the 4ederal "eser(e 0lan @reens#an (") at a cocktail #arty
hosted by 8nternational Bconomy *aga2ine, in Washington, D.1. on Fctober ,9, 6<<:. (J $tefan RaklinCBP0C1orbis)
Left to right7 4ormer 4ederal "eser(e 1hairman 0lan @reens#an, former '.$. $u#reme 1ourt ;ustice $andra Day F)1onnor, '.$. $u#reme
1ourt ;ustice Da(id $outer, $te#hen Breyer, @eorgetown 'ni(ersity President ;ohn ;. De@ioia, and @eorgetown Law Dean 0le3 0leinikoff
stand together for a grou# #ortrait at @eorgetown 'ni(ersity Law 1enter in Washington, D.1. on Fctober 6, 6<<9.
(Photo7 @eorgetown 'ni(ersity Law 1enter)
B. @erald 1orrigan (left) and ;ames Wolfensohn (right) celebrate as Paul Aolcker holds a #laDue. 0ll three men are members of
the Bretton Woods 1ommittee.
Paul Aolcker (left), $tanley 4ischer (center, red tie), and William ;. *cDonough (right) ha(e attended the Bilderberg *eetings in
the #ast.
Paul Aolcker shakes hands with 'nited =ations $ecretary-@eneral Eofi 0nnan.
!rilateral 1ommission members Peter $utherland, $adako Fgata, Rbigniew Br2e2inski, Paul Aolcker, and Da(id "ockefeller
smile for the camera at a #arty on December ,, ,--9.
Left to right7 !reasury $ecretary ;ames 0. Baker 888, retiring 4ederal "eser(e Board 1hairman Paul 0. Aolcker, and '.$. $ecretary of $tate
@eorge P. $hult2 #ose for a #hoto in ;uly ,-9:. (Photo by 1ynthia ;ohnsonCC!ime Life PicturesC@etty 8mages)
'.$. $enator ;udd @regg (of =ew am#shire) recei(es the 1oncord 1oalitionIs Paul B. !songas Bconomic Patriot 0ward on =o(ember ,9,
6<<-. Pictured left to right are7 4ormer '.$. 1om#troller @eneral Da(id *. Walker, $enator @regg, 1oncord 1oalition President Peter @.
Peterson, and former 1hairman of the 4ederal "eser(e Paul Aolcker. Peter @. Peterson and Paul Aolcker are members of the 1ouncil on
4oreign "elations. (Photo7 Fffice of '.$. $enator ;udd @reggChtt#7CCgregg.senate.go(CaboutCawardsC)
4ormer 1hairman of 4ederal "eser(e 0lan @reens#an (left) smiles as his wife, =B1 1hief 4oreign 0ffairs 1orres#ondent,
0ndrea *itchell (right) s#eaks during a ta#ing of H!ake !woH segment of H*eet the PressH at the =B1 studios on $e#tember 6.,
6<<: in Washington, D.1. 0lan @reens#an and his wife 0ndrea *itchell attended the 6<<6 Bilderberg *eetings in 1hantilly,
Airginia together in 6<<6. 0lan @reens#an and his wife 0ndrea *itchell are members of the 1ouncil on 4oreign "elations.
(Photo by 0le3 WongC@etty 8mages for *eet the Press)
Left to right7 4rank 1arlucci, Paul Aolcker, and Donna $halala testify before 1ongress.
Left to right7 !reasury $ecretary enry Paulson, former 4ederal "eser(e $ystem chairmen 0lan @reens#an and Paul Aolcker,
0rthur Le(itt, senior ad(iser to !he 1arlyle @rou# and former 1hairman of the $ecurities and B3change 1ommission ($B1), and
$B1 1hairman 1hristo#her 1o3 meet at @eorgetown 'ni(ersity in Washington, D.1. on *arch ,., 6<<:.
(Photo by 1hi# $omode(illaC@etty 8mages)
Left to right7 =ew &ork 1ity *ayor *ichael Bloomberg, former 4ederal "eser(e $ystem 1hairman 0lan @reens#an, and former
4ederal "eser(e $ystem 1hairman Paul Aolcker #artici#ate in a #anel discussion on ca#ital markets at @eorgetown 'ni(ersity
in Washington, D.1. on *arch ,., 6<<:. 0ll three men are members of the 1ouncil on 4oreign "elations.
=ew &ork 1ity *ayor *ichael Bloomberg (left) listens as former 4ederal "eser(e $ystem 1hairman 0lan @reens#an talk about
the economy at @eorgetown 'ni(ersity in Washington, D.1. on *arch ,., 6<<:. (Photo by 1hi# $omode(illaC@etty 8mages)
!reasury $ecretary enry Paulson (left), =ew &ork 1ity *ayor *ichael Bloomberg (center), and former 4ederal "eser(e
1hairman 0lan @reens#an #artici#ate in a discussion on ca#ital markets at @eorgetown 'ni(ersity in Washington, D.1. on
*arch ,., 6<<:. Paulson, Bloomberg, and @reens#an are members of the 1ouncil on 4oreign "elations.

Left #hoto7 !reasury $ecretary enry Paulson and former 4ederal "eser(e 1hairman 0lan @reens#an a##ear at @eorgetown 'ni(ersity in
Washington, D.1. on *arch ,., 6<<:. $ecretary Paulson hosted the H!reasury 1onference on '.$. 1a#ital *arkets 1om#etiti(eness,H a day-
long #rogram to focus on ca#ital market issues like regulation, com#etition and other related to#ics. (Photo by 1hi# $omode(illaC@etty 8mages)
"ight #hoto7 Paul 0. Aolcker, the 1hairman of the 4ederal "eser(e, #oses for a #ortrait in front of the 4ederal "eser(e building in Washington,
D.1. in ;anuary ,-9/. (J Wally *c=ameeC1F"B8$)
;ohn Deutch (left), former Director of 1entral 8ntelligence 0gency, and former 4ederal "eser(e 1hairman Paul Aolcker smile for the camera at
a 1ouncil on 4oreign "elations meeting on *arch ,., ,--:.
4ormer 4ederal "eser(e 1hairman 0lan @reens#an talks to former !reasury $ecretary "obert "ubin (left) at @eorgetown
'ni(ersity on *arch ,., 6<<:. (Photo by 1hi# $omode(illaC@etty 8mages)
4ormer 4ederal "eser(e 1hairman Paul Aolcker (left), 0rthur Le(itt (center), senior ad(iser to !he 1arlyle @rou# and former
1hairman of the $ecurities and B3change 1ommission, and former !reasury $ecretary "obert "ubin #artici#ate in a #anel
discussion called O4raming the 8ssues7 *arkets Pers#ecti(esP at @eorgetown 'ni(ersity in Washington, D.1. on *arch ,., 6<<:.
0ll three men in this #hoto are members of the 1ouncil on 4oreign "elations. (Photo by 1hi# $omode(illaC@etty 8mages)
Bconomists ;ohn Eenneth @albraith (L) and 0lan @reens#an a##ears before a ;oint Bconomic 1ommittee in Washington, D.1. on Fctober .<,
,-:- in obser(ance of the ><th anni(ersary of the H1rash of I6-.H @albraith #ro#osed a G> a gallon H#enalty le(elH federal gasoline ta3 aimed at
cutting oil im#orts before the committee. (J Larry DowningCBettmannC1F"B8$)
*illion dollar newscaster Barbara Walters, escorted by her date, 0lan @reens#an, arri(es at the s#ecial screening of #roducer 0llen EleinIs
The Greek Tycoon at the Pla2a !heatre on *ay ,,, ,-:9. !he film, an o#ulent look at the li(es of the su#er rich, was followed by an e(ening of
disco dancing and a la(ish dinner at "egineIs, the society discotheDue. (J BettmannC1F"B8$)
0lan @reens#an (center) a##ears with his mother "ose @oldsmith (far left), his mentor 0yn "and (second from right), 0yn "and)s husband
4rank F)1onnor (far right), and President @erald ". 4ord (second from left) at the White ouse in ,-:+. 0yn "and, who was born 0lisa
Rino(Iye(na "osenbaum, was a "ussian-born ;ewish economic #hiloso#her. (Da(id ume EennerlyC@erald ". 4ord Library)
President "ichard =i3on (left) a##oints 0lan @reens#an as the new 1hairman of the 1ouncil of Bconomic 0d(isers during a meeting in $an
1lemente, 1alifornia, '.$.0. on ;uly 6., ,-:+. @reens#an was an economist from =ew &ork 1ity and President of !ownsend and @reens#an,
a #ri(ate consulting firm. (J BettmannC1F"B8$)
4ormer 4ederal "eser(e chairman 0lan @reens#an a##ears with his wife 0ndrea *itchell and '.$. $u#reme 1ourt ;ustice $te#hen Breyer at
the 6<</ 0s#en 8nstitute 8deas 4esti(al in 0s#en, 1olorado, '.$.0. on ;uly -, 6<</. !hey #resented their ideas on current issues at the 0s#en
8deas 4esti(al. 0ll three indi(iduals are members of the 1ouncil on 4oreign "elations. (J Lynn @oldsmithC1orbis)
0lan @reens#an, former 1hairman of the 4ederal "eser(e, a##ears with Democratic '.$. $enator Dianne 4einstein (Democrat-1alifornia) at
the 6<</ 0s#en 8nstitute 8deas 4esti(al in 0s#en, 1olorado, '.$.0. on ;uly >, 6<</. !hey were s#eaking on current issues at the 0s#en 8deas
4esti(al in 0s#en, 1olorado. (J Lynn @oldsmithC1orbis)
4ederal "eser(e 1hairman 0lan @reens#an testifies during a $enate Banking, ousing and 'rban 0ffairs 1ommittee hearing on
1a#itol ill on ;uly 6,, 6<<>. @reens#an commented on "ed 1hinaIs #lan to use a more fle3ible currency system, stating it is Ha
good start.H (Photo by *ark WilsonC@etty 8mages)
4ederal "eser(e 1hairman 0lan @reens#an testifies during a $enate Banking, ousing and 'rban 0ffairs 1ommittee hearing on
1a#itol ill on 4ebruary ,/, 6<<>. (Photo by *ark WilsonC@etty 8mages)
0lan @reens#an, former 1hairman of the 4ederal "eser(e, s#eaks about his new memoir The Age of Tur%u!ence: A,entures in
a New (or! at Barnes % =oble in =ew &ork 1ity on $e#tember ,:, 6<<:. 0lan @reens#an is a member of the 1ouncil on
4oreign "elations and a former member of the !rilateral 1ommission. 0lan @reens#an attended the 6<<6 Bilderberg *eetings
in 1hantilly, Airginia in 6<<6. (Photo by $#encer PlattC@etty 8mages)
4ederal "eser(e 1hairman 0lan @reens#an smiles as he is welcomed at the $enate Banking, ousing and 'rban 0ffairs
1ommittee in Washington, 4ebruary 6+, 6<<+. @reens#an s#oke about im#ro(ing the regulation of the housing go(ernment
s#onsored enter#rises such as 4annie *ae. (J ;F=0!0= B"=$!C"eutersC1orbis)

4ederal "eser(e 1hairman 0lan @reens#an (1), his wife, =B1 Kournalist 0ndrea *itchell (L), and 1== anchor ;udy Woodruff enter the annual
White ouse 1orres#ondentsI 0ssociation dinner in Washington, D.1. on 0#ril 6/, 6<<.. 0ll three indi(iduals in this #hoto are members of the
1ouncil on 4oreign "elations, an internationalist organi2ation in =ew &ork 1ity. ("eutersCBrendan *cDermid)
4ormer '.$. !reasury $ecretary enry Paulson (left) and former 4ederal "eser(e 1hairman 0lan @reens#an a##ear on O*eet the PressP in
Washington, D.1. on 4ebruary :, 6<,<. enry Paulson and 0lan @reens#an are members of the 1ouncil on 4oreign "elations, an
internationalist organi2ation in =ew &ork 1ity. ("euters) htt#7CCwww.daylife.comC#hotoC<:t(fA8eEc,=w?DU#aulsonWgreens#an
embership of the )oard of Governors
of the #ederal $eserve %ystem, /0/8@2resent
+ppointive Mem1ers
Mem1ers ^ Chairmen ^ ,i(e Chairmen
-3GJffi(io Mem1ers
<e(retaries of the Treasury ^ Comptrollers of the Curren(y
7istori(al Notes
!ppointive embers
Bame
and Cistrict
Cate of
initial
oath of office
+ther dates and information relating to membership
Charles <% 7amlin
Boston
+ug% #! F$ Reappointed in F? and F"?% <erved until Fe1% >! F>?%
*aul M% &ar1urg
New York
+ug% #! F$ Term e3pired +ug% F! F=%
Frederi( +% )elano
Chi(ago
+ug% #! F$ Resigned 'uly "! F=%
&%*%.% 7arding
+tlanta
+ug% #! F$ Term e3pired +ug% F! F""%
+dolph C% Miller
<an Fran(is(o
+ug% #! F$
Reappointed in F"$% Reappointed in F>$ from the
Ri(hmond )istri(t% <erved until Fe1% >! F>?%
+l1ert <trauss
New York
J(t% "?! F= Resigned Mar% L! F"#%
7enry +% Moehlenpah
Chi(ago
Nov% #! FF Term e3pired +ug% F! F"#%
-dmund *latt
New York
'une =! F"# Reappointed in F"=% Resigned <ept% $! F>#%
)avid C% &ills
Cleveland
<ept% "F! F"# Term e3pired Mar% $! F"%
'ohn R% Mit(hell
Minneapolis
May "! F" Resigned May "! F">%
Milo )% Camp1ell
Chi(ago
Mar% $! F"> )ied Mar% ""! F">%
)aniel R% Crissinger
Cleveland
May ! F"> Resigned <ept% L! F"H%
.eorge R% 'ames
<t% Couis
May $! F"> Reappointed in F>% <erved until Fe1% >! F>?%
-dward 7% Cunningham
Chi(ago
May $! F"> )ied Nov% "=! F>#%
Roy +% Young
Minneapolis
J(t% $! F"H Resigned +ug% >! F>#%
-ugene Meyer
New York
<ept% ?! F># Resigned May #! F>>%
&ayland &% Magee
Bansas City
May =! F> Term e3pired 'an% "$! F>>%
-ugene R% Bla(k May F! F>> Resigned +ug% L! F>$%
+tlanta
M%<% <Aym(Aak
Chi(ago
'une $! F>> Reappointed in F>? and F$=% Resigned May >! F?%
'%'% Thomas
Bansas City
'une $! F>> <erved until Fe1% #! F>?%
Marriner <% -((les
<an Fran(is(o
Nov% L! F>$
Reappointed in F>?! F$#! and F$$% Resigned
'uly $! FL%
'oseph +% Broderi(k
New York
Fe1% >! F>? Resigned <ept% >#! F>H%
'ohn B% M(Bee
Cleveland
Fe1% >! F>? <erved until +pr% $! F$?%
Ronald Ransom
+tlanta
Fe1% >! F>? Reappointed in F$"% )ied )e(% "! F$H%
Ralph &% Morrison
)allas
Fe1% #! F>? Resigned 'uly F! F>?%
Chester C% )avis
Ri(hmond
'une "L! F>? Reappointed in F$#% Resigned +pr% L! F$%
-rnest .% )raper
New York
Mar% >#! F>= <erved until <ept% ! FL#%
Rudolph M% -vans
Ri(hmond
Mar% $! F$" <erved until +ug% >! FL$%
'ames B% ,ardaman! 'r%
<t% Couis
+pr% $! F$? Resigned Nov% >#! FL=%
Cawren(e Clayton
Boston
Fe1% $! F$H )ied )e(% $! F$F%
Thomas B% M(Ca1e
*hiladelphia
+pr% L! F$= Resigned Mar% >! FL%
-dward C% Norton
+tlanta
<ept% ! FL# Resigned 'an% >! FL"%
Jliver <% *owell
Minneapolis
<ept% ! FL# Resigned 'une >#! FL"%
&m% M(C% Martin! 'r%
New York
+pr% "! FL Reappointed in FL?% Term e3pired 'an% >! FH#%
+%C% Mills! 'r%
<an Fran(is(o
Fe1% =! FL" Reappointed in FL=% Resigned Fe1% "=! F?L%
'%C% Ro1ertson
Bansas City
Fe1% =! FL" Reappointed in F?$% Resigned +pr% >#! FH>%
C% Can1y Balderston
*hiladelphia
+ug% "! FL$ <erved through Fe1% "=! F??%
*aul -% Miller
Minneapolis
+ug% >! FL$ )ied J(t% "! FL$%
Chas% N% <hepardson
)allas
Mar% H! FLL Retired +pr% >#! F?H%
.%7% Bing! 'r%
+tlanta
Mar% "L! FLF Reappointed in F?#% Resigned <ept% =! F?>%
.eorge &% Mit(hell
Chi(ago
+ug% >! F? Reappointed in F?"% <erved until Fe1% >! FH?%
'% )ewey )aane
Ri(hmond
Nov% "F! F?> <erved until Mar% =! FH$%
<herman '% Maisel
<an Fran(is(o
+pr% >#! F?L <erved through May >! FH"%
+ndrew F% Brimmer
*hiladelphia
Mar% F! F?? Resigned +ug% >! FH$%
&illiam &% <herrill
)allas
May ! F?H Reappointed in F?=% Resigned Nov% L! FH%
+rthur F% Burns
New York
'an% >! FH# Term 1egan Fe1% ! FH#% Resigned Mar% >! FH=%
'ohn -% <heehan
<t% Couis
'an% $! FH" Resigned 'une ! FHL%
'effrey M% Bu(her
<an Fran(is(o
'une L! FH" Resigned 'an% "! FH?%
Ro1ert C% 7olland
Bansas City
'une ! FH> Resigned May L! FH?%
7enry C% &alli(h
Boston
%Mar% =! FH$ Resigned )e(% L! F=?%
*hilip -% Coldwell
)allas
J(t% "F! FH$ <erved through Fe1% "F! F=#%
*hilip C% 'a(kson! 'r%
+tlanta
'uly $! FHL Resigned Nov% H! FH=%
'% Charles *artee
Ri(hmond
'an% L! FH? <erved until Fe1% H! F=?%
<tephen <% .ardner
*hiladelphia
Fe1% >! FH? )ied Nov% F! FH=%
)avid M% Cilly
Minneapolis
'une ! FH? Resigned Fe1% "$! FH=%
.% &illiam Miller
<an Fran(is(o
Mar% =! FH= Resigned +ug% ?! FHF%
Nan(y 7% Teeters
Chi(ago
<ept% =! FH= <erved through 'une "H! F=$%
-mmett '% Ri(e
New York
'une "#! FHF Resigned )e(% >! F=?%
Frederi(k 7% <(hultA
+tlanta
'uly "H! FHF <erved through Fe1% ! F="%
*aul +% ,ol(ker
*hiladelphia
+ug% ?! FHF Resigned +ugust ! F=H%
Cyle -% .ramley
Bansas City
May "=! F=# Resigned <ept% ! F=L%
*reston Martin
<an Fran(is(o
Mar% >! F=" Resigned +pril >#! F=?%
Martha R% <eger
Chi(ago
'uly "! F=$ Resigned Mar(h ! FF%
&ayne )% +ngell
Bansas City
Fe1% H! F=? <erved through Fe1% F! FF$%
Manuel 7% 'ohnson
Ri(hmond
Fe1% H! F=? Resigned +ugust >! FF#%
7% Ro1ert 7eller
<an Fran(is(o
+ug% F! F=? Resigned 'uly >! F=F%
-dward &% Belley! 'r%
)allas
May "?! F=H Reappointed in FF#8 resigned )e(% >! "##%
+lan .reenspan
New York
+ug% ! F=H Reappointed in FF"8 term e3pired 'an% >! "##?%
'ohn *% Ca&are
Boston
+ug% L! F== Resigned +pril >#! FFL%
)avid &% Mullins! 'r%
<t% Couis
May " FF# Resigned Fe1% $! FF$%
Cawren(e B% Cindsey
Ri(hmond
Nov% "?! FF Resigned Fe1% L! FFH%
<usan M% *hillips
Chi(ago
)e(% "! FF <erved through 'une >#! FF=%
+lan <% Blinder
*hiladelphia
'une "H! FF$ Term e3pired 'an% >! FF?%
'anet C% Yellen
<an Fran(is(o
+ug% "! FF$ Resigned Fe1% H! FFH8 reappointed J(t% $! "##%
Cauren(e 7% Meyer
<t% Couis
'une "$! FF? Term e3pired 'an% >! "##"%
+li(e M% Rivlin
*hiladelphia
'une "L! FF? Resigned 'uly ?! FFF%
Roger &% Ferguson! 'r%
Boston
Nov% L! FFH Reappointed in "##8 resigned +pril "=! "##?
-dward M% .ramli(h
Ri(hmond
Nov% L! FFH Resigned +ugust >! "##L%
<usan <% Bies
Chi(ago
)e(% H! "## Resigned Mar(h >#! "##H%
Mark &% Jlson
Minneapolis
)e(% H! "## Resigned 'une >#! "##?%
Ben <% Bernanke
+tlanta
+ug% L! "##" Resigned 'une "! "##L8 reappointed Fe1% ! "##?%
)onald C% Bohn
Bansas City
+ug% L! "##" Resigned <eptem1er ! "##%
Bevin M% &arsh
New York
Fe1% "$! "##? Resigned +pril "! "#%
Randall <% BrosAner
Ri(hmond
Mar% ! "##? Resigned 'anuary "! "##F%
Frederi( <% Mishkin
Boston
<ept% L! "##? Resigned +ugust >! "##=%
-liAa1eth +% )uke
*hiladelphia
+ug% L! "##= Resigned +ugust >! "#>%
)aniel B% Tarullo
Boston
'an% "=! "##F
<arah Bloom Raskin
Ri(hmond
J(t% $! "## Resigned Mar(h >! "#$%
'erome 7% *owell
New York
May "L! "#"
'eremy C% <tein
Chi(ago
May >#! "#" Resigned May "=! "#$%
<tanley Fis(her
New York
May "=! "#$
Cael Brainard
Ri(hmond
'une ?! "#$
(hairmen Cate of term
Charles <% 7amlin +ug% #! F$G+ug% F! F?
&%*%.% 7arding +ug% #! F?G+ug% F! F""
)aniel R% Crissinger May ! F">G<ept% L! F"H
Roy +% Young J(t% $! F"HG+ug% >! F>#
-ugene Meyer <ept% ?! F>#GMay #! F>>
-ugene R% Bla(k May F! F>>G+ug% L! F>$
Marriner <% -((les Nov% L! F>$G'an% >! F$=
Thomas B% M(Ca1e +pr% L! F$=GMar% >! FL

&m% M(C% Martin! 'r +pr% "! FLG'an% >! FH#
+rthur F% Burns Fe1% ! FH#G'an% >! FH=
"
.% &illiam Miller Mar% =! FH=G+ug% ?! FHF
*aul +% ,ol(ker +ug% ?! FHFG+ug% ! F=H
+lan .reenspan +ug% ! F=HG'an% >! "##?
>
Ben <% Bernanke Fe1% ! "##? G 'an% >! "#$
'anet C% Yellen Fe1% >! "#$ G
% <erved as Chairman *ro Tempore from Fe1ruary >! F$=! to +pril L! F$=% Return to te3t
"% <erved as Chairman *ro Tempore from Fe1% ! FH=! to Mar(h H! FH=8 served as .overnor from Mar(h =! FH=! to Mar(h >!
FH=% Return to te3t
>% <erved as Chairman *ro Tempore from Mar(h >! FF?! to 'une "#! FF?% Return to te3t
Return to top
Aice (hairmen Cate of term
Frederi( +% )elano +ug% #! F$G+ug% F! F?
*aul M% &ar1urg +ug% #! F?G+ug% F! F=
+l1ert <trauss J(t% "?! F=GMar% L! F"#
-dmund *latt 'uly ">! F"#G<ept% $! F>#
'%'% Thomas +ug% "! F>$GFe1% #! F>?
Ronald Ransom +ug% ?! F>?G)e(% "! F$H
C% Can1y Balderston Mar% ! FLLGFe1% "=! F??
'%C% Ro1ertson Mar% ! F??G+pr% >#! FH>
.eorge &% Mit(hell May ! FH>GFe1% >! FH?
<tephen <% .ardner Fe1% >! FH?GNov% F! FH=
Frederi(k 7% <(hultA 'uly "H! FHFGFe1% ! F="
*reston Martin Mar% >! F="G+pr% >#! F=?
Manuel 7% 'ohnson +ug% $! F=?G+ug% >! FF#
)avid &% Mullins! 'r% 'uly "$! FFGFe1% $! FF$
+lan <% Blinder 'une "H! FF$G'an% >! FF?
+li(e M% Rivlin 'une "L! FF?G'uly ?! FFF
Roger &% Ferguson! 'r% J(t% L! FFFG+pr% "=! "##?
)onald C% Bohn 'une ">! "##?G'une ">! "##
'anet C% Yellen J(t% $! "## G Fe1% >! "#$
<tanley Fis(her 'une ?! "#$G
Return to top
3x@+fficio embers
%ecretaries of the Treasury Cate of term
&%.% M(+doo )e(% ">! F>G)e(% L! F=
Carter .lass )e(% ?! F=GFe1% ! F"#
)avid F% 7ouston Fe1% "! F"#GMar% >! F"
+ndrew &% Mellon Mar% $! F"GFe1% "! F>"
Jgden C% Mills Fe1% "! F>"GMar% $! F>>
&illiam 7% &oodin Mar% $! F>>G)e(% >! F>>
7enry Morgenthau! 'r% 'an% ! F>$GFe1% ! F>?
(omptrollers of the (urrency Cate of term
'ohn <kelton &illiams Fe1% "! F$GMar% "! F"
)aniel R% Crissinger Mar% H! F"G+pr% >#! F">
7enry M% )awes May ! F">G)e(% H! F"$
'oseph &% M(6ntosh )e(% "#! F"$GNov% "#! F"=
'%&% *ole Nov% "! F"=G<ept% "#! F>"
'%F%T% JIConnor May ! F>>GFe1% ! F>?
:istorical Botes
;nder the provisions of the original Federal Reserve +(t! the Federal Reserve Board was (omposed of seven mem1ers! in(luding five
appointive mem1ers! the <e(retary of the Treasury! who was e3Goffi(io (hairman of the Board! and the Comptroller of the Curren(y% The
original term of offi(e was ten years! and the five original appointive mem1ers had terms of two! four! si3! eight! and ten years respe(tively%
6n F"" the num1er of appointive mem1ers was in(reased to si3! and in F>> the term of offi(e was in(reased to twelve years%
The Banking +(t of F>L! approved +ug% ">! F>L! (hanged the name of the Federal Reserve Board to the Board of .overnors of the Federal
Reserve <ystem and provided that the Board should 1e (omposed of seven appointive mem1ers8 that the <e(retary of the Treasury and the
Comptroller of the Curren(y should (ontinue to serve as mem1ers until Fe1% ! F>?8 that the appointive mem1ers in offi(e on the date of that
a(t should (ontinue to serve until Fe1% ! F>?! or until their su((essors were appointed and had 5ualified8 and that thereafter the terms of
mem1ers should 1e fourteen years and that the designation of Chairman and ,i(e Chairman of the Board should 1e for a term of four years%
)ate after words YResignedY and YRetiredY denotes final day of servi(e%
Chairman and ,i(e Chairman were designated .overnor and ,i(e .overnor 1efore +ug% ">! F>L%
Return to top
7ome ^ +1out the Fed
+((essi1ility ^ Conta(t us
Cast update: May >#! "#"
Federal Reserve Board Mem1ers /as of 'une ?! "#$0

;anet L. &ellen (left, 1hairman) and $tanley 4ischer (right, Aice 1hairman)
Board *embers, left to right7 Daniel E. !arullo, ;erome . Powell, and Lael Brainard
0ll fi(e board members of the 4ederal "eser(e (as of ;une ,/, 6<,+) are members of the 1ouncil on 4oreign "elations, a #ri(ate
organi2ation in =ew &ork 1ity.
Board Mem1ers
!he se(en members of the Board of @o(ernors of the 4ederal "eser(e $ystem are nominated by the President and confirmed by the $enate.
0 full term is fourteen years. Fne term begins e(ery two years, on 4ebruary , of e(en-numbered years. 0 member who ser(es a full term may
not be rea##ointed. 0 member who com#letes an une3#ired #ortion of a term may be rea##ointed. 0ll terms end on their statutory date
regardless of the date on which the member is sworn into office. !he 1hairman and the Aice 1hairman of the Board are named by the
President from among the members and are confirmed by the $enate. !hey ser(e a term of four years. 0 memberIs term on the Board is not
affected by his or her status as 1hairman or Aice 1hairman. ($ource7 htt#7CCwww.federalreser(e.go(CaboutthefedCbiosCboardCdefault.htm)
9anet 7. Dellen
;anet L. &ellen took office as 1hair of the Board of @o(ernors of the 4ederal "eser(e $ystem on 4ebruary ., 6<,+, for a four-year term
ending 4ebruary ., 6<,9. Dr. &ellen also ser(es as 1hairman of the 4ederal F#en *arket 1ommittee, the $ystemIs #rinci#al monetary
#olicymaking body. Prior to her a##ointment as 1hair, Dr. &ellen ser(ed as Aice 1hair of the Board of @o(ernors, taking office in
Fctober 6<,<, when she simultaneously began a ,+-year term as a member of the Board that will e3#ire ;anuary .,, 6<6+.
Dr. &ellen is Professor Bmeritus at the 'ni(ersity of 1alifornia at Berkeley where she was the Bugene B. and 1atherine *. !refethen
Professor of Business and Professor of Bconomics and has been a faculty member since ,-9<.
Dr. &ellen took lea(e from Berkeley for fi(e years starting 0ugust ,--+. $he ser(ed as a member of the Board of @o(ernors of the
4ederal "eser(e $ystem through 4ebruary ,--:, and then left the 4ederal "eser(e to become chair of the 1ouncil of Bconomic
0d(isers through 0ugust ,---. $he also chaired the Bconomic Policy 1ommittee of the Frgani2ation for Bconomic 1oo#eration and
De(elo#ment from ,--: to ,---. $he also ser(ed as President and 1hief B3ecuti(e Ffficer of the 4ederal "eser(e Bank of $an
4rancisco from 6<<+ to 6<,<.
Dr. &ellen is a member of both the 1ouncil on 4oreign "elations and the 0merican 0cademy of 0rts and $ciences. $he has ser(ed as
President of the Western Bconomic 0ssociation, Aice President of the 0merican Bconomic 0ssociation and a 4ellow of the &ale
1or#oration.
Dr. &ellen graduated summa cum laude from Brown 'ni(ersity with a degree in economics in ,-/:, and recei(ed her Ph.D. in
Bconomics from &ale 'ni(ersity in ,-:,. $he recei(ed the Wilbur 1ross *edal from &ale in ,--:, an honorary doctor of laws degree
from Brown in ,--9, and an honorary doctor of humane letters from Bard 1ollege in 6<<<.
0n 0ssistant Professor at ar(ard 'ni(ersity from ,-:, to ,-:/, Dr. &ellen ser(ed as an Bconomist with the 4ederal "eser(eIs Board
of @o(ernors in ,-:: and ,-:9, and on the faculty of the London $chool of Bconomics and Political $cience from ,-:9 to ,-9<. Dr.
&ellen has written on a wide (ariety of macroeconomic issues, while s#eciali2ing in the causes, mechanisms, and im#lications of
unem#loyment. Dr. &ellen is married and has an adult son.
Last up#ate7 Februar! 3, *>(=
htt#7CCwww.federalreser(e.go(CaboutthefedCbiosCboardCyellen.htm
%tanley #ischer
$tanley 4ischer took office as a member of the Board of @o(ernors of the 4ederal "eser(e $ystem on *ay 69, 6<,+, to fill an
une3#ired term ending ;anuary .,, 6<6<.
Prior to his a##ointment to the Board, Dr. 4ischer was go(ernor of the Bank of 8srael from 6<<> through 6<,..
4rom 4ebruary 6<<6 to 0#ril 6<<>, Dr. 4ischer was (ice chairman of 1itigrou#. Dr. 4ischer ser(ed as the first de#uty managing director
of the 8nternational *onetary 4und from $e#tember ,--+ through 0ugust 6<<,. 4rom ;anuary ,-99 to 0ugust ,--<, he was the chief
economist of the World Bank.
4rom ,-:: to ,---, Dr. 4ischer was a #rofessor of economics at the *assachusetts 8nstitute of !echnology (*8!). 4rom ,--6 to ,-->,
he was the Bli2abeth and ;ames Eillian 1lass of ,-6/ #rofessor. 4rom ,-:. to ,-::, Dr. 4ischer was an associate #rofessor of
economics at *8!. Prior to Koining the *8! faculty, Dr. 4ischer was an assistant #rofessor of economics and a #ostdoctoral fellow at the
'ni(ersity of 1hicago.
Dr. 4ischer has #ublished many articles on a wide (ariety of economic issues, and he is the author and editor of se(eral scholarly
books. e has been a fellow at the @uggenheim 4oundation, the 0merican 0cademy of 0rts and $ciences, and the Bconometric
$ociety, as well as a research associate at the =ational Bureau of Bconomic "esearch and an honorary fellow at the London $chool of
Bconomics.
Dr. 4ischer was born in Lusaka, Rambia, in Fctober ,-+.. e recei(ed his B.$c. and *.$c. in economics from the London $chool of
Bconomics. e recei(ed his Ph.D. in economics from the *assachusetts 8nstitute of !echnology in ,-/-.
Dr. 4ischer is married with three adult children.
Last up#ate7 June 3, *>(=
htt#7CCwww.federalreser(e.go(CaboutthefedCbiosCboardCfischer.htm
Caniel 6. Tarullo
Daniel E. !arullo took office on ;anuary 69, 6<<-, to fill an une3#ired term ending ;anuary .,, 6<66.
Prior to his a##ointment to the Board, *r. !arullo was Professor of Law at @eorgetown 'ni(ersity Law 1enter, where he taught courses
in international financial regulation, international law, and banking law. Prior to Koining the @eorgetown Law faculty, *r. !arullo held
se(eral senior #ositions in the 1linton administration.
4rom ,--. to ,--9, *r. !arullo ser(ed, successi(ely, as 0ssistant $ecretary of $tate for Bconomic and Business 0ffairs, De#uty
0ssistant to the President for Bconomic Policy, and 0ssistant to the President for 8nternational Bconomic Policy. e also ser(ed as a
#rinci#al on both the =ational Bconomic 1ouncil and the =ational $ecurity 1ouncil. 4rom ,--> to ,--9, *r. !arullo also ser(ed as
President 1lintonIs #ersonal re#resentati(e to the @:C@9 grou# of industriali2ed nations.
Before Koining the 1linton administration, he ser(ed as 1hief 1ounsel for Bm#loyment Policy on the staff of $enator Bdward *.
Eennedy, and #racticed law in Washington, D.1. e also worked in the 0ntitrust Di(ision of the De#artment of ;ustice and as $#ecial
0ssistant to the 'ndersecretary of 1ommerce. 4rom ,-9, to ,-9:, *r. !arullo taught at ar(ard Law $chool.
*r. !arullo has also ser(ed as a senior fellow at the 1ouncil on 4oreign "elations and as a non-resident senior fellow at the 1enter for
0merican Progress. *r. !arullo has also held a (isiting #rofessorshi# at Princeton 'ni(ersity.
*r. !arullo was born in =o(ember ,->6 in Boston, *assachusetts. e recei(ed his 0.B. from @eorgetown 'ni(ersity in ,-:. and his
*.0. from Duke 'ni(ersity in ,-:+. 8n ,-::, *r. !arullo recei(ed his ;.D. (summa cum laude) from the 'ni(ersity of *ichigan Law
$chool, where he ser(ed as 0rticle and Book "e(iew Bditor of the +ichigan "aw -e,iew.
*r. !arullo is married and has two children.
Last up#ate7 I+tober =, *>(>
htt#7CCwww.federalreser(e.go(CaboutthefedCbiosCboardCtarullo.htm
9erome :. 2owell
;erome . Powell took office on *ay 6>, 6<,6, to fill an une3#ired term ending ;anuary .,, 6<,+.
Prior to his a##ointment to the Board, *r. Powell was a (isiting scholar at the Bi#artisan Policy 1enter in Washington, D.1., where he
focused on federal and state fiscal issues. 4rom ,--: through 6<<>, *r. Powell was a #artner at !he 1arlyle @rou#.
*r. Powell ser(ed as an 0ssistant $ecretary and as 'ndersecretary of the !reasury under President @eorge .W. Bush, with
res#onsibility for #olicy on financial institutions, the !reasury debt market, and related areas. Prior to Koining the 0dministration, he
worked as a lawyer and in(estment banker in =ew &ork 1ity.
8n addition to ser(ice on cor#orate boards, *r. Powell has ser(ed on the boards of charitable and educational institutions, including the
Bendheim 1enter for 4inance at Princeton 'ni(ersity and !he =ature 1onser(ancy of Washington, D.1., and *aryland.
*r. Powell was born in 4ebruary ,->. in Washington, D.1. e recei(ed an 0.B. in #olitics from Princeton 'ni(ersity in ,-:> and
earned a law degree from @eorgetown 'ni(ersity in ,-:-. While at @eorgetown, he was editor-in-chief of the Georgetown "aw $ourna!.
*r. Powell is married with three children.
Last up#ate7 Jul! 3, *>(3
htt#7CCwww.federalreser(e.go(CaboutthefedCbiosCboardC#owell.htm
&6?.D<?5$. IF $H? F?<?68L 6?.?69? ,685CH ,85K.
F-)-R+C R-<-R,- B+NB JF N-& YJRB
President Term of office Reason for Termination Source Date Page
William C. Dudley 01/27/2009 - present
Timothy F. Geithner 11/17/2003 - 01/27/2009 ppt. !e"retary o# Treasury F$%&'
(amie %. !te)art* 0+/11/2003 - 11/17/2003 $esi,ned F$%&'
William (. -"Donou,h 07/19/1993 - 0+/11/2003 $etired F$%&'
.. Gerald Corri,an 01/01/19/0 - 07/19/1993 $etired F$%&'
nthony -. !olomon 01/01/19/0 - 01/01/19/0 $etired F$%&'
2aul . 3ol"4er 0//01/1970 - 0//02/1979
ppt. Chairman %oard o#
Go5ernors
F$% 0//1979 p. +31
l#red 6ayes 0//01/190+ - 0//01/1970 $etired F$%&'/$ 1970 p. 31
llan !proul 01/01/1911 - 0+/30/190+ $esi,ned F$% 07/190+ p. 70/
Geor,e 7. 6arrison 11/22/192/ - 12/31/1910 $esi,ned F$% 01/1911 p. 21
%en8amin !tron, 10/00/1911 - 10/1+/192/ Died in o##i"e F$% 11/192/ p. 739
*9nterim
$ - nnual $eport
F$% - Federal $eser5e %ulletin
F$%&' - Federal $eser5e %an4 o# &e) 'or4
F-)-R+C R-<-R,- B+NB JF C76C+.J
Charles 7. .5ans 09/01/2007 - present
-i"hael 6. -os4o) 09/01/1991 - 0//31/2007 $etired F$%C
!ilas :eehn 07/01/19/1 - 0//31/1991 $etired F$%C
$o;ert 2. -ayo 07/29/1970 - 01/01/19/1 $etired F$%C
Charles (. !"anlon 01/01/19+2 - 01/10/1970 $esi,ned F$%C
Carl .. llen 10/01/190+ - 12/31/19+1 $esi,ned F$% 01/19+2 p. 37
Cli##ord !. 'oun, 03/01/1911 - 02/29/190+ $etired F$%C
Geor,e (. !"haller 03/02/1931 - 02/2//1911 $etired %G$ 1911 p. 21
(ames %. -"Dou,al 10/23/1911 - 03/01/1931 $etired F$%C
%G$ - %oard o# Go5ernors nnual $eport
F$%C - Federal $eser5e %an4 o# Chi"a,o
top
F-)-R+C R-<-R,- B+NB JF BJ<TJN
.ri" $osen,ren 07/23/2007 - present
Cathy .. -inehan 07/13/1991 - 07/22/2007 $etired F$%%
$i"hard F. !yron 01/01/19/9 - 03/31/1991 $esi,ned F$%%
Fran4 .. -orris 0//10/19+/ - 12/31/19// $etired
Geor,e 6. .llis 03/01/19+1 - 0+/30/19+/ $esi,ned F$%%
(oseph . .ri"4son 12/10/191/ - 02/2//19+1 $etired F$% 03/19+1 p. 302
7auren"e F. Whittemore 03/01/191+ - 10/01/191/ $esi,ned F$% 10/191/ p. 1239
$alph .. Flanders 00/01/1911 - 02/2//191+ $etired F$% 03/191+ p. 200
William W. 2addo"4 01/01/1912 - 00/01/1911 $etired F$% 00/1911 p. 130
$oy . 'oun, 09/01/1930 - 03/31/1912 $esi,ned F$% 01/1912 p. 32+
Wm. 2.G. 6ardin, 01/1+/1923 - 01/07/1930 Died in o##i"e $ 1930 p. 2+
Charles -orss 12/20/1917 - 12/31/1922 $esi,ned $ 1923 p. 21
l#red 7 i4en 11/20/1911 - 12/20/1917 $esi,ned $ 1917 p. 19
$ - nnual $eport
F$%% - Federal $eser5e %an4 o# %oston
F-)-R+C R-<-R,- B+NB JF *76C+)-C*76+
2resident Term o# o##i"e $eason #or Termination !our"e Date 2a,e
Charles 9. 2losser 0//01/200+ - present
nthony -. !antomero 07/10/2000 - 03/31/200+ $etired F$%2
.d)ard G. %oehne 02/01/19/1 - 00/31/2000 $etired F$%2
Da5id 2. .ast;urn 03/01/1970 - 01/31/19/1 $etired F$%2
:arl $. %opp 03/01/190/ - 02/2//1970 $etired F$%2
l#red 6. Williams 07/01/1911 - 02/2//190/ $etired F$% 03/190/ p. 299
(ohn !. !in"lair 03/13/193+ - 0+/30/1911 $esi,ned F$% 0+/1911 p. 017
Geor,e W. &orris 03/03/1920 - 02/29/193+ $etired $ 193+ p. 3/
.. 2. 2assmore 02/0//191/ - 03/01/1920 $esi,ned $ 1920 p. 2+
Charles (. $hoads 10/0//1911 - 02/0//191/ $esi,ned $ 191/ p. 27
$ - nnual $eport
F$%2 - Federal $eser5e %an4 o# 2hiladelphia
F-)-R+C R-<-R,- B+NB JF +TC+NT+
Dennis 7o"4hart 03/01/2007 - present
(a"4 Guynn 01/01/199+ - 10/01/200+ $etired F$%
$o;ert 2. Forrestal 12/07/19/3 - 01/01/199+ $etired F$%
William F. Ford 0//01/19/0 - 10/01/19/3 $esi,ned F$%
-onroe :im;rel 02/01/19+/ - 03/31/19/0 $etired F$%
6arold T. 2atterson 10/01/19+0 - 01/31/19+/ $etired F$%
-al"olm %ryan 01/01/1901 - 09/30/19+0 $etired F$% 10/19+0 p. 1111
W. !. -"7arin (r. 00/09/1911 - 03/01/1901 $etired F$% 03/1901 p. 27+
$o;ert !. 2ar4er 02/1//1939 - 03/2//1911 Died in o##i"e F$% 01/1911 p. 310
<s"ar &e)ton 01/1+/1930 - 02/13/1939 Died in o##i"e F$% 03/1939 p. 172
.u,ene $. %la"4 0//1+/1931 - 12/19/1931 =2nd term> Died in o##i"e $ 1931 p. 19
.u,ene $. %la"4 01/13/192/ - 00/1//1933 =1st term> --
-. %. Well;orn 03/01/1919 - 12/31/1927 $esi,ned F$% 01/192/ p. 7
(oseph . -"Cord 11/1+/1911 - 03/01/1919 .le"ted F$ ,ent F$% 03/1919 p. 201
$ - nnual $eport
F$% - Federal $eser5e %an4 o# tlanta
F-)-R+C R-<-R,- B+NB JF CC-,-C+N)
!andra 2ianalto 02/01/2003 - present
(erry 7. (ordan 03/10/1992 - 01/31/2003 $esi,ned F$%C7
W. 7ee 6os4ins 09/21/19/7 - 11/10/1991 $esi,ned F$%C7
:aren &. 6orn 00/01/19/2 - 01/0//19/7 $esi,ned F$%C7
Willis (. Winn 09/01/1971 - 01/30/19/2 $etired F$%C7
W. %raddo"4 6i"4man 00/01/19+3 - 11/2//1970 Died in o##i"e F$% 12/1970 p. 9+3
Wil;ur D. Fulton 00/11/1903 - 01/30/19+3 $etired F$% 00/19+3 p. +11
$ay -. Gidney 11/01/1911 - 01/1+/1903 $esi,ned* F$% 00/1903 p. 173
-atthe) (. Flemin, 01/19/1930 - 09/10/1911 $etired F$% 10/1911 p. 9+0
.l5adore $. Fan"her 11/02/1911 - 01/1+/1930 Died in o##i"e F$% 02/1930 p. 71
*ppointed Comptroller o# Curren"y
F$%C7 - Federal $eser5e %an4 o# Cle5eland
F-)-R+C R-<-R,- B+NB JF )+CC+<
$i"hard W. Fisher 1/1/2000 - present F$%D
6elen 6ol"om;* 11/2001 - 1/3/2000 9nterim F$%D 11/2001
$o;ert D. -"Teer (r. 02/1991 - 11/2001 $esi,ned F$%D 11/2001
$o;ert 6. %oy4in 01/01/19/1 - 01/31/1991 $etired F$%D
.rnest T. %au,hman 01/01/1970 -12/31/19/0 $etired F$%D
2hilip .. Cold)ell 02/01/19+/ -10/09/1971 $esi,ned F$% 11/1971 p. 799
Watrous 6. 9rons 02/10/1901 - 02/01/19+/ $etired F$%D
$. $. Gil;ert 01/13/1939 - 09/01/1903 $etired F$% 09/1903 p. 902
%. . -":inney 10/00/1931 - 01/02/1939 Died in o##i"e F$% 00/1939 p. 30+
7ynn 2. Talley 07/01/1920 - 10/01/1931 $esi,ned F$% 10/1931 p. 007
%. . -":inney 01/1+/1922 - 00/1+/1920 $esi,ned $ 1920 p. 1+
$. 7. 3an?andt 01/0+/1910 - 01/07/1922 &ot re-ele"ted
<s"ar Wells 10/1+/1911 - 02/21/1910 $esi,ned $ 1910 p. +
*9nterim
$ - nnual $eport
F$%D - Federal $eser5e %an4 o# Dallas
top
F-)-R+C R-<-R,- B+NB JF M6NN-+*JC6<
Gary 6. !tern 03/21/19/0 - present
.. Gerald Corri,an 0//01/19/0 - 12/31/19/1 $esi,ned F$%-
-ar4 6. Willes 01/1+/1977 - 0+/30/19/0 $esi,ned F$%-
%ru"e :. -a"7aury 07/01/1971 - 02/2//1977 $esi,ned F$% 03/1977 p. 130
6u,h D. Galusha (r. 00/01/19+0- 01/31/1971 Died in o##i"e F$% 02/1971 p. 1+3
Frederi"4 7 Demin, 01/01/1907 - 01/31/19+0 ppt. @nder !e"Ay Treas. F$%-
<li5er !. 2o)ell 07/01/1902 - 03/31/1907 ppt. ."onomi" d5isor F$%-
(ohn &. 2eyton 03/01/193+ - 0+/30/1902 $etired F$% 07/1902 p. 77+
W. %. Geery 09/27/1927 - 03/01/193+ Desi,nated Chair B ,ent F$% 03/193+ p. 110
$oy . 'oun, 10/01/1919 - 09/2+/1927 ppt. to %oard o# Go5ernors $ 1927 p. 13
Theodore Wold 10/27/1911 - 10/01/1919 $etired $ 1919 p. 1/
$ - nnual $eport
F$%- - Federal $eser5e %an4 o# -inneapolis
F-)-R+C R-<-R,- B+NB JF B+N<+< C6TY
Thomas -. 6oeni, 10/01/1991 - present F$%:C
$o,er Gu##ey 03/01/197+ - 10/01/1991 $etired F$% 03/197+ p. 2/0
Geor,e 6. Clay 03/01/19+1 - 02/29/197+ $etired F$%:C
6. G. 7eedy 0//2//1911 - 03/01/19+1 $etired %G$ 1911 p. 22
Geor,e 6. 6amilton 01/07/1932 - 02/2//1911 $etired F$%:C
W. (. %ailey 07/01/1922 - 01/07/1932 $etired $ 1922 p. 12
(. ?. -iller (r. 01/01/191+ - 07/01/1922 $esi,ned F$%:C
Charles -. !a)yer 10/1+/1911 - 01/01/191+ ppt. Chairman
$ - nnual $eport
F$%:C - Federal $eser5e %an4 o# :ansas City
top
F-)-R+C R-<-R,- B+NB JF R6C7MJN)
(e##rey -. 7a"4er 0//01/01 - present
(. l#red %roaddus (r. 01/01/1993 - 07/31/01 $etired F$%$
$o;ert 2. %la"4 0//0+/1973 - 12/31/92 $etired F$%/F$%$ 0//1973 p. +0+
u;rey &. 6e#lin 01/01/19+/ - 01/1+/1973 Died in o##i"e F$% 01/1973 p. 30
.d)ard . Wayne 03/01/19+1 - 03/31/19+/ $etired $ 19+/ p. 17
6u,h 7ea"h 03/12/193+ - 02/2//19+1 $etired F$% 03/19+1 p. 302
Geor,e (. !eay 10/00/1911 - 02/29/193+ $etired F$%$
$ - nnual $eport
F$%$ - Federal $eser5e %an4 o# $i"hmond
top
F-)-R+C R-<-R,- B+NB JF <T% CJ;6<
2resident Term o# o##i"e $eason #or Termination !our"e Date 2a,e
(ames %ullard 01/01/200/ - present
William 2oole 03/23/199/ - 03/31/200/ $etired
Thomas C. -elCer 0+/01/19/0- 01/31/199/ $esi,ned
Theodore 6. $o;erts 02/01/19/3 - 12/31/19/1 $esi,ned $ 19/1 p. 2
7a)ren"e :. $oos 03/22/197+ - 01/31/19/3 $etired $ 19/3 p. 3
Darryl $. Fran"is 01/17/19++ - 02/29/197+ $etired F$% 03/197+ p. 2/0
6arry . !hu#ord 10/01/19+2 - 01/1+/19++ $esi,ned F$% 01/19++ p. 13
Delos C. (ohns 02/01/1901- 02/2//19+2 $etired F$% 03/19+2 p. 300
Chester C. Da5is 01/1+/1911 - 02/01/1901 $esi,ned F$% 02/1901 p. 1+3
Wm. -"C. -artin 01/1+/1929 - 02/2//1911 $etired %G$ 1911 p. 21
Da5id C. %i,,s 02/00/1919 - 12/31/192/ $esi,ned F$% 02/1929 p. 9+
$olla Wells 10/2//1911 - 02/00/1919 $esi,ned $ 1919 p. 11
$ - nnual $eport
%G$ - %oard o# Go5ernors nnual $eport
F-)-R+C R-<-R,- B+NB JF <+N FR+NC6<CJ
(anet 7. 'ellen 0+/11/2001 - present
$o;ert T. 2arry 02/01/19/+ - 0+/01/2001 $etired F$%!F
(ohn (. %alles 09/20/1972* - 02/01/19/+ $etired
.liot (. !)an 03/01/19+1 - 0+/01/1972 $etired F$% 10/1972 p. 912
6. &. -an,els 03/01/190+ - 02/2//19+1 $etired F$% 03/19+1 p. 302
C. .. .arhart 10/17/191+ - 03/01/190+ $etired
F$%!F 2ress
$elease
02/197+
9ra Cler4 01/01/191+ - 09/2//191+ Died in o##i"e F$% 10/191+ p. 1112
William . Day 01/01/193+ - 12/31/1910 $etired F$% 01/191+ p. 32
(ohn @. Cal4ins 00/0+/1919**- 02/29/193+ $etired F$% 03/193+ p. 111
(ames :. 7yn"h 0//07/1917 - 01/2+/1919 Died in o##i"e $ 1919 p. 1/
r"hi;ald :ains 11/20/1911 - 07/00/1917 $esi,ned $ 1917 p. 29
* %io,raphy "ompiled ;y Fran4 <A%rien o# the %oard o# Go5ernors
** 0/2/1919 - $ 1919 p. 199
$ - nnual $eport
F$%!F - Federal $eser5e %an4 o# !an Fran"is"o
=ote7 *arriner $. Bccles was a member of the board of directors of Planned Parenthood World Po#ulation.
1ouncil on 4oreign "elations *embers in the 4ederal "eser(e
,oar# of o4ernors
LPaul Warburg (,-,+-,-,9)
L0lbert $trauss (,-,9-,-6<)
LBugene *eyer (,-.<-,-..)
L"al#h W. *orrison (,-./)
L!homas *c1abe (,-+9-,->,)
LWilliam *c1. *artin ;r. (,->,-,-:<)
0ndrew 4. Brimmer (,-//-,-:+)
L0rthur 4. Burns (,-:<-,-:9)
L"obert 1. olland (,-:.-,-:/)
Lenry 1. Wallich (,-:+-,-9/)
L@. William *iller (,-:9-,-:-)
L=ancy . !eeters (,-:9-,-9+)
LBmmett ;. "ice (,-:--,-9/)
Paul 0. Aolcker (,-:--,-9:)
0lan @reens#an (,-9:-6<</)
0lan $. Blinder (,--+-,--/)
0lice *. "i(lin (,--/-,---)
"oger W. 4erguson (,--:-6<</)
Daniel E. !arullo (6<<--#resent)
;anet L. &ellen (,--+-,--:, 6<,<-#resent)
;erome . Powell (6<,6-#resent)
$tanley 4ischer (6<,+-#resent)
Lael Brainard (6<,+-#resent)
Chairman of the Fe#eral 6eser4e
LBugene *eyer (,-.<-,-..)
L!homas B. *c1abe (,-+9-,->,)
LWilliam *c1. *artin ;r. (,->,-,-:<)
L0rthur 4. Burns (,-:<-,-:9)
L@. William *iller (,-:9-,-:-)
Paul 0. Aolcker (,-:--,-9:)
0lan @reens#an (,-9:-6<</)
;anet L. &ellen (6<,+-#resent)
9i+e Chairman of the Fe#eral 6eser4e
LPaul Warburg (,-,/-,-,9)
L0lbert $trauss (,-,9-,-6<)
LBdmund Platt (,-6<-,-.<)
L4rederick . $chult2 (,-:--,-96)
0lan $. Blinder (,--+-,--/)
0lice *. "i(lin (,--/-,---)
"oger W. 4erguson (,----6<</)
Donald L. Eohn (6<</-6<,<)
;anet L. &ellen (6<,<-6<,+)
$tanley 4ischer (6<,+-#resent)
Fe#eral 6eser4e ,ank of 5ew ;ork
William 1. Dudley Q President
1hristine *. 1umming Q 4irst Aice President
!errence ;. 1hecki Q B3ecuti(e Aice President
@lenn . utchins Q Director (1lass B)
=ote7 !he 1hairman of the 4ederal "eser(e is
also the 1hairman of the 4ederal F#en *arket
1ommittee5 the President of the 4ederal "eser(e
Bank of =ew &ork is the Aice 1hairman of the
4ederal F#en *arket 1ommittee.
=ote7 !he #osition of President of the 4ederal
"eser(e Bank of =ew &ork was called O@o(ernor
of the 4ederal "eser(e Bank of =ew &orkP from
,-,+ to ,-./.
4ederal "eser(e Bank of Boston7
L0lfred L. 0iken Q President of the 4ederal "eser(e Bank of Boston (,-,+-,-,:)
L"al#h B. 4landers Q President of the 4ederal "eser(e Bank of Boston (,-++-,-+/)
LLaurence 4. Whittemore Q President of the 4ederal "eser(e Bank of Boston (,-+/-,-+9)
"ichard 4. $yron Q President of the 4ederal "eser(e Bank of Boston (,-9--,--+)
L0lbert *. 1reighton Q 1hairman of the 4ederal "eser(e Bank of Boston (,-+6-,-><)
L"obert 1. $#rague Q 1hairman (,->/-,-/<) and De#uty 1hairman (,->>) of the 4ederal "eser(e Bank of Boston
L=ils &. Wessell Q 1hairman (,-/,-,-/6) and De#uty 1hairman (,->--,-/<) of the 4ederal "eser(e Bank of Boston
LBrwin D. 1anham Q 1hairman (,-/.-,-/:) and De#uty 1hairman (,-/,-,-/6) of the 4ederal "eser(e Bank of Boston
oward W. ;ohnson Q 1hairman of the 4ederal "eser(e Bank of Boston (,-/9-,-/-)
Louis W. 1abot Q 1hairman (,-:>-,-:9) and De#uty 1hairman (,-:,-,-:>) of the 4ederal "eser(e Bank of Boston
"ichard =. 1oo#er Q 1hairman (,--<-,--6) and De#uty 1hairman (,-99-,-9-) of the 4ederal "eser(e Bank of Boston
LDonald E. Da(id Q De#uty 1hairman (,-+:) and 1lass 1 Director (,-+/-,-+:) of the 4ederal "eser(e Bank of Boston
L;ames ". Eillian ;r. Q De#uty 1hairman (,->/) and 1lass 1 Director (,->+-,->/) of the 4ederal "eser(e Bank of Boston
L1harles W. 1ole Q De#uty 1hairman (,-/:-,-/9) and 1lass 1 Director (,-//-,-/9) of the 4ederal "eser(e Bank of Boston
Warren B. "udman Q De#uty 1hairman (,--.-,--+) and 1lass 1 Director (,--.-,--+) of the 4ederal "eser(e Bank of Boston
LLaurence 4. Whittemore Q 1lass B Director of the 4ederal "eser(e Bank of Boston (,-++-,-+>)
LEarl !. 1om#ton Q 1lass 1 Director of the 4ederal "eser(e Bank of Boston (,->,-,->.)
L*ilton P. iggins Q 1lass B Director of the 4ederal "eser(e Bank of Boston (,->/-,-/6)
*atina $. orner Q 1lass B Director of the 4ederal "eser(e Bank of Boston (,-9.-,-99)
*arshall =. 1arter Q 1lass 0 Director of the 4ederal "eser(e Bank of Boston (,--/-,--9)
"obert ". @lauber Q 1lass B Director of the 4ederal "eser(e Bank of Boston (,--/-6<<,)
Frit @adiesh Q 1lass B Director of the 4ederal "eser(e Bank of Boston (6<<<-6<<6)
"obert E. Eraft Q 1lass B Director of the 4ederal "eser(e Bank of Boston (6<<.-6<,<)
Fther 4ederal "eser(e Bank B3ecuti(es and Directors7
L0rchibald Eains Q President of the 4ederal "eser(e Bank of $an 4rancisco (,-,+-,-,:)
L1harles ;. "hoads Q President of the 4ederal "eser(e Bank of Philadel#hia (,-,+-,-,9)
L4rederick L. Deming Q President of the 4ederal "eser(e Bank of *innea#olis (,->:-,-/>)
Bruce E. *acLaury Q President of the 4ederal "eser(e Bank of *innea#olis (,-:,-,-::)
LB. @erald 1orrigan Q President of the 4ederal "eser(e Bank of *innea#olis (,-9<-,-9+)
Earen =. orn Q President of the 4ederal "eser(e Bank of 1le(eland (,-96-,-9:)
L"obert P. 4orrestal Q President of the 4ederal "eser(e Bank of 0tlanta (,-9.-,--/)
*ichael . *oskow Q President of the 4ederal "eser(e Bank of 1hicago (,--+-6<<:)
;anet L. &ellen Q President of the 4ederal "eser(e Bank of $an 4rancisco (6<<+-6<,<)
"ichard W. 4isher Q President of the 4ederal "eser(e Bank of Dallas (6<<>-#resent)
Dennis P. Lockhart Q President of the 4ederal "eser(e Bank of 0tlanta (6<<:-#resent)
L!homas B. *c1abe Q 1hairman of the 4ederal "eser(e Bank of Philadel#hia (,-.--,-+9)5 De#uty 1hairman of the 4ederal "eser(e Bank of
Philadel#hia (,-.9)5 1lass 1 Director of the 4ederal "eser(e Bank of Philadel#hia (,-.:-,-+9)
L;ohn $. 1oleman Q 1hairman of the 4ederal "eser(e Bank of 1hicago (,->.-,->>)5 De#uty 1hairman of the 4ederal "eser(e Bank of
1hicago (,-><-,->6)5 1lass 1 Director of the 4ederal "eser(e Bank of 1hicago (,-><-,->>)
LBrayton Wilbur $r. Q 1hairman of the 4ederal "eser(e Bank of $an 4rancisco (,-+:-,->.)
L0therton Bean Q 1hairman (,-/,-,-/>) and De#uty 1hairman (,-/<) of the 4ederal "eser(e Bank of *innea#olis
L"obert F. 0nderson Q 1hairman (,-/,-,-/>) and 1lass 1 Director (,-/<-,-/>) of the 4ederal "eser(e Bank of Dallas
$te(en *uller Q 1hairman (,-9,-,-9.) and De#uty 1hairman (,-:--,-9<) of the 4ederal "eser(e Bank of "ichmond
(0dm.) Bobby ". 8nman Q 1hairman (,-9:-,--<) and De#uty 1hairman (,-9>-,-9/) of the 4ederal "eser(e Bank of Dallas
"obert 4. Brburu Q 1hairman (,-99-,--,) and De#uty 1hairman (,-9:, ,--6) of the 4ederal "eser(e Bank of $an 4rancisco
L0. William "eynolds Q 1hairman (,--.-,--/) and De#uty 1hairman (,--,-,--6) of the 4ederal "eser(e Bank of 1le(eland
Da(id E.&. !ang Q 1hairman of the 4ederal "eser(e Bank of $an 4rancisco (6<</-6<<9)
LPaul @. offman Q De#uty 1hairman (,-+:-,-+9) and 1lass 1 Director (,-+6-,-+-) of the 4ederal "eser(e Bank of 1hicago
Patricia *. Patterson Q De#uty 1hairman of the 4ederal "eser(e Bank of Dallas (6<<,-6<<>)
0nthony ". 1hase Q De#uty 1hairman of the 4ederal "eser(e Bank of Dallas (6<</-6<,<)
L0lba B. ;ohnson Q 1lass B (,-,+-,-6/) and 1lass 1 (,-6:-,-.+) Director of the 4ederal "eser(e Bank of Philadel#hia
LAance 1. *c1ormick Q 1lass 1 Director of the 4ederal "eser(e Bank of Philadel#hia (,-,+-,-,>)
L1harles ;. "hoads Q 1lass 0 Director of the 4ederal "eser(e Bank of Philadel#hia (,-,:)
L4rancis Biddle Q 1lass 1 Director of the 4ederal "eser(e Bank of Philadel#hia (,-.9)
Loward 1. Petersen Q 1lass 0 Director of the 4ederal "eser(e Bank of Philadel#hia (,-//-,-/9)
LDa(id *. Eennedy Q 1lass 0 Director of the 4ederal "eser(e Bank of 1hicago (,-/,-,-/.)
L$idney 0. $wensrud Q 1lass 1 Director of the 4ederal "eser(e Bank of 1le(eland (,->.-,->>)
L". $tanley Laing Q 1lass B Director of the 4ederal "eser(e Bank of 1le(eland (,-:<-,-:6)
Lenry 1isneros Q 1lass 1 Director of the 4ederal "eser(e Bank of Dallas (,--,)
L0rthur ". '#gren Q Aice President of 4ederal "eser(e Bank of *innea#olis (,-+6-,-+>)
William 1urt unter Q $enior Aice President of 4ederal "eser(e Bank of 1hicago (,-->-6<<.)
4BDB"0L "B$B"AB B0=E F4 =BW &F"E
&resi#ent of the Fe#eral 6eser4e ,ank of
5ew ;ork
LBenKamin $trong (,-,+-,-69)
L@eorge L. arrison (,-69-,-+<)
L0llan $#roul (,-+,-,->/)
L0lfred ayes (,->/-,-:>)
Paul 0. Aolcker (,-:>-,-:-)
L0nthony *. $olomon (,-9<-,-9+)
LB. @erald 1orrigan (,-9>-,--.)
William ;. *cDonough (,--.-6<<.)
;amie B. $tewart (6<<.) MactingN
!imothy 4. @eithner (6<<.-6<<-)
William 1. Dudley (6<<--#resent)
Chairman of the Fe#eral 6eser4e ,ank of
5ew ;ork
LPierre ;ay (,-,+-,-6/)
L@ates *c@arrah (,-6:-,-.<)
LFwen D. &oung (,-.9-,-+<)
LBeardsley "uml (,-+,-,-+/)
L;ay B. 1rane (,->.-,->/)
L;ohn B. Bierwirth (,->:-,->-)
LPhili# D. "eed (,-/<-,-/>)
LB(erett =. 1ase (,-//-,-/9)
L0lbert Lindsay =ickerson (,-/--,-:,)
L"oswell L. @il#atric (,-:6-,-:>)
L"obert untington Enight (,-:9-,-96)
;ohn Brademas (,-9.-,-9:)
L;ohn ". F#el (,-9:-,-99)
L1yrus ". Aance (,-9--,--,)
Bllen A. 4utter (,--6-,--.)
*aurice ". @reenberg (,--+-,-->)
;ohn 1. Whitehead (,--/-,---)
Peter @. Peterson (6<<<-6<<.)
;ohn B. $e3ton (6<<+-6<</)
;erry 8. $#eyer (6<<:)
$te#hen 4riedman (6<<9)
Lee 1. Bollinger (6<,,-6<,6)
<eput! Chairman of the Fe#eral 6eser4e
,ank of 5ew ;ork
L@eorge 4. Peabody (,-,/-,-6,)
LFwen D. &oung (,-6:-,-.:)
LBeardsley "uml (,-.9-,-+<)
LBdmund B. Day (,-+<-,-+.)
LWilliam 8. *yers (,-+.-,->+)
L4orrest 4. ill (,->>-,-/<)
LB(erett =. 1ase (,-/>)
L;ames *. ester (,-/--,-:<)
L"oswell L. @il#atric (,-:,)
L"obert untington Enight (,-:/-,-::)
1lifton ". Wharton ;r. (,-9+-,-9/)
Bllen A. 4utter (,-9--,--,)
*aurice ". @reenberg (,--6-,--.)
Da(id 0. amburg (,--+-,-->)
;ohn 1. Whitehead (,-->)
L!homas W. ;ones (,--/-,--9)
Peter @. Peterson (=o(ember ,--9-,---)
1harles 0. eimbold ;r. (6<<<-6<<,)
L@erald *. Le(in (=o(ember 6<<,-6<<6)
;ohn B. $e3ton (6<<.)
;erry 8. $#eyer (6<<+-6<</)
Lee 1. Bollinger (6<,<)
Directors of the 4ederal "eser(e Bank of =ew &ork7
LWilliam B. !hom#son Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-,+-,-,-)
L@eorge 4. Peabody Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-,+-,-6,)
LPierre ;ay Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-,+-,-6/)
L;ames $. 0le3ander Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-,--,-66)
L1harles 0. $tone Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-,--,-66)
L1larence *. Woolley Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-6,-,-./)
L@ates W. *c@arrah Q Director of the 4ederal "eser(e Bank of =ew &ork (1lass 07 ,-6.-,-6>, 1lass 17 ,-6:-,-.,)
LFwen D. &oung Q Director of the 4ederal "eser(e Bank of =ew &ork (1lass B7 ,-6.-,-6>, 1lass 17 ,-6/-,-+<)
L$amuel W. "eyburn Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-6>-,-..)
LWilliam . Woodin Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (0#ril ,, ,-6:-*arch ., ,-..)
L1harles B. *itchell Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-69-,-.,)
L0lbert . Wiggin Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-.6-,-..)
L@eorge W. Da(ison Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-..-,-.:)
L!homas ;. Watson Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-..-,-+<)
LBeardsley "uml Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-.:-,-+/)
LBdmund B. Day Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-.9-,-+6)
LDonaldson Brown Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-+,-,-+/)
LLeon 4raser Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-+,-,-+.)
LWilliam 8. *yers Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-+.-,->+)
L1harles B. 0dams Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-+>-,-+9)
LWinthro# W. 0ldrich Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-+:-,-+-)
L*arion B. 4olsom Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-+--,->6)
L;ay B. 1rane Q Director of the 4ederal "eser(e Bank of =ew &ork (1lass B7 ,-+--,->65 1lass 17 ,->.-,->/)
L;ohn 1. !ra#hagen Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-><-,->6)
L"obert P. Patterson Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-><-,->6)
LPhili# &oung Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,->6)
L;ohn B. Bierwirth Q Director of the 4ederal "eser(e Bank of =ew &ork (1lass B7 ,->.-,->/5 1lass 17 ,->:-,->-)
L4orrest 4. ill Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,->>-,-/<)
Loward 1. $he#erd Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,->/-,->9)
Lenry 1. 0le3ander Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,->--,-/,)
LPhili# D. "eed Q Director of the 4ederal "eser(e Bank of =ew &ork (1lass B7 ,->-5 1lass 17 ,-/<-,-/>)
L0lbert Lindsay =ickerson Q Director of the 4ederal "eser(e Bank of =ew &ork (1lass B, ,-/,-,-//5 1lass 1, ,-/--,-:,)
LB(erett =. 1ase Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-/,-,-/9)
L@eorge 1ham#ion Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-/6-,-/+)
L;ames *. ester Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-/>-,-:<)
L0rthur E. Watson Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-/>-,-:<)
L"oswell L. @il#atric Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-/--,-:>)
LWilliam D. Bberle Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-:,)
L0lan Pifer Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-:6-,-:/)
L*aurice 4. @ran(ille Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-:6-,-:-)
Da(id "ockefeller Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (;anuary ,, ,-:.-December .,, ,-:/)
LWilliam $. $neath Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-:.-,-9<)
L"obert untington Enight Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-:/-,-96)
LBllmore 1. Patterson Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-::-,-:-)
L@ordon !. Wallis Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-9<-,-96)
L;ohn ". F#el Q Director of the 4ederal "eser(e Bank of =ew &ork (1lass B7 ,-9,-,-9/, 1lass 17 ,-9:-,-99)
L0lfred Brittain 888 Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-9.-,-9>)
;ohn Brademas Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-9.-,-99)
1lifton ". Wharton ;r. Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-9+-,-9/)
L;ohn 4. Welch ;r. Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-9>-,--<)
LLewis !. Preston Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-9/-,-99)
L;ohn 4. *c@illicuddy Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-99-,--,)
Bllen A. 4utter Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-99-,--.)
L1yrus ". Aance Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-9--,--.)
*aurice ". @reenberg Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,-9--,-->)
L!homas @. LabrecDue Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,--6-,--+)
"obert @. Wilmers Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,--.-,--9)
L$andra 4eldman Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,--+-,--/)
;. 1arter Bacot Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,-->-,--:)
LBugene ". *c@rath Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (,-->-6<<<)
;ohn 1. Whitehead Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork ($e#tember ,-->-,---)
L!homas W. ;ones Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,--/-,--9)
Peter @. Peterson Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (,--/-6<<+)
0nn *. 4udge Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (Fctober ,--/-6<<6)
Walter A. $hi#ley Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,--9-6<<<)
L"ichard L. 1arrion Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (,---)
1harles 0. eimbold ;r. Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (;uly ,----6<<,)
$anford 8. Weill Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (6<<,-6<</)
;erry 8. $#eyer Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (6<<,-6<<:)
L@erald *. Le(in Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (=o(ember 6<<,-6<<.)
;ill *. 1onsidine Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (6<<6-6<<:)
L"ichard $. 4uld ;r. Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (6<<6-6<<9)
*arta !ienda Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (6<<.-6<<>)
;ohn B. $e3ton Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (6<<.-6<</)
;ames O;amieP Dimon Q 1lass 0 Director of the 4ederal "eser(e Bank of =ew &ork (6<<:-6<,6)
Lee 1. Bollinger Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (6<<:-6<,6)
$te#hen 4riedman Q 1lass 1 Director of the 4ederal "eser(e Bank of =ew &ork (6<<9-6<<-)
;ames $. !isch Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (6<<--6<,6)
@lenn . utchins Q 1lass B Director of the 4ederal "eser(e Bank of =ew &ork (6<,.-#resent)
Fther B3ecuti(es of the 4ederal "eser(e Bank of =ew &ork7
L@eorge L. arrison Q De#uty @o(ernor of the 4ederal "eser(e Bank of =ew &ork (,-6<-,-69)
LW. "andol#h Burgess Q De#uty @o(ernor (,-.<-,-./) and Aice President (,-./-,-.9) of 4ederal "eser(e Bank of =ew &ork
LL. Werner Enoke Q Aice President of the 4ederal "eser(e Bank of =ew &ork (c.,-.--,->+)
L"obert @. "ouse Q Aice President of the 4ederal "eser(e Bank of =ew &ork (c.,-.--c.,->/)
L;ohn . Williams Q Aice President of the 4ederal "eser(e Bank of =ew &ork (,-./-,-+:)
L;ohn B3ter Q Aice President of the 4ederal "eser(e Bank of =ew &ork (,->+-,->-)
L0llan $#roul Q 4irst Aice President of the 4ederal "eser(e Bank of =ew &ork (,-./-,-+<)
"ichard 0. Debs Q 4irst Aice President of the 4ederal "eser(e Bank of =ew &ork (,-:.-,-:/)
Brnest !. Patrikis Q 4irst Aice President of the 4ederal "eser(e Bank of =ew &ork (,-->-,--9)5 B3ecuti(e Aice President and @eneral
1ounsel of 4ederal "eser(e Bank of =ew &ork (,-99-,-->)
;amie B. $tewart ;r. Q 4irst Aice President of the 4ederal "eser(e Bank of =ew &ork (,----6<<+)
1hristine *. 1umming Q 4irst Aice President of the 4ederal "eser(e Bank of =ew &ork (6<<+-#resent)
$am &. 1ross Q B3ecuti(e Aice President of 4ederal "eser(e Bank of =ew &ork (c.,-9.-,--,)
Peter ". 4isher Q B3ecuti(e Aice President of 4ederal "eser(e Bank of =ew &ork (,--+-6<<,)
!errence ;. 1hecki Q B3ecuti(e Aice President of the 4ederal "eser(e Bank of =ew &ork (6<<,-#resent)
0lan ". olmes Q $enior Aice President of 4ederal "eser(e Bank of =ew &ork (,-/--,-:6)
"oger *. Eubarych Q $enior Aice President of 4ederal "eser(e Bank of =ew &ork (,-:6-,-9>)
;. 0ndrew $#indler Q $enior Aice President of the 4ederal "eser(e Bank of =ew &ork (,-9--,--.)
Darryll B. endricks Q former $enior Aice President of the 4ederal "eser(e Bank of =ew &ork
Peter Bakstansky Q $enior Aice President of the 4ederal "eser(e Bank of =ew &ork (?-6<<>)
1harles 0. 1oombs Q $enior Aice President in charge of foreign function at 4ederal "eser(e Bank of =ew &ork (,->--,-:>)
$cott B. Pardee Q $enior Aice President for 4oreign B3change at 4ederal "eser(e Bank of =ew &ork (,-:--,-9,)
"obert A. "oosa Q Aice President for "esearch De#artment at the 4ederal "eser(e Bank of =ew &ork (,->/-,-/<)
Dorothy $obol Q former Aice President for "esearch De#artment at the 4ederal "eser(e Bank of =ew &ork
=ote7 1lass 0 Directors are elected by member banks to re#resent member banks, 1lass B Directors are elected by member banks to
re#resent the #ublic, and 1lass 1 Directors are a##ointed by Board of @o(ernors to re#resent the #ublic.
=ote7 LU#ast members of the 1ouncil on 4oreign "elations
)h% Ban4%rs o" th% F%d%ra! 3%s%r&%
Paul *. Warburg
Aice 1hairman of the 4ederal "eser(e (0ugust ,<, ,-,/-0ugust -, ,-,9)
*ember of the Board of @o(ernors of the 4ederal "eser(e (0ugust ,<, ,-,+- 0ugust -, ,-,9)
1o-4ounder of the 4ederal "eser(e at ;ekyll 8sland, @eorgia, '.$.0. (,-<9)
Director, 1o-4ounder, and *ember of the 1ouncil on 4oreign "elations (,-6,-,-.6)
Partner of Euhn, Loeb and 1om#any M;ewish banking firm in =ew &ork 1ityN (,-<6-,-,+)
Partner of *.*. Warburg and 1om#any M;ewish banking firm in amburg, @ermanyN (,9->-,-<:)
*ember of the board of directors of Western 'nion !elegra#h 1om#any
*ember of the board of directors of 'nion Pacific "ailroad 1o.
*ember of the board of directors of 0merican 8.@. 1hemical 1or#oration
8mmigrated to 0merica in ,-<65 =aturali2ed 0merican citi2en in ,-,,
Brother of *a3 Warburg, chief of *.*. Warburg and 1o. and director of 8.@. 4arben chemical cartel
Born in amburg, @ermany on 0ugust ,<, ,9/95 died in =ew &ork 1ity on ;anuary 6+, ,-.6
BenKamin $trong
@o(ernor MPresidentN of the 4ederal "eser(e Bank of =ew &ork (Fctober >, ,-,+-Fctober ,/, ,-69)
1o-4ounder of the 4ederal "eser(e at ;ekyll 8sland, @eorgia (,-<9)
President of Banker)s !rust of =ew &ork (,-,+)
Aice President of Banker)s !rust Mof =ew &orkN (,-<--,-,+)
*ember of the 1ouncil on 4oreign "elations (,-69)
Born December 66, ,9:65 Died in =ew &ork 1ity on Fctober ,/, ,-69
Bugene *eyer
1hairman of the 4ederal "eser(e ($e#tember ,/, ,-.<-*ay ,<, ,-..)
President of !he World Bank (,-+/)
1hairman of the board of !he Washington Post 1o. (,-+:-,->-)
Publisher of The (ashington #ost (,-..-,-+/)
4arm Loan 1ommissioner (De#artment of the !reasury) (,-6:-,-6-)
*ember of the 1ouncil on 4oreign "elations (,-.<-,->9)
B.0. &ale ,9->
4ather of former Washington Post 1o. 1hairman Eatharine @raham
@randfather of Washington Post 1o. 1hairman Donald @raham
Born in Los 0ngeles on Fctober .,, ,9:>5 Died in Washington, D.1. on ;uly ,:, ,->-
William *c1hesney *artin ;r.
1hairman of the 4ederal "eser(e (0#ril 6, ,->,-;anuary .,, ,-:<)
0ssistant '.$. $ecretary of the !reasury for 8nternational 0ffairs (,-+--,->,)
1hairman and President of B3#ort-8m#ort Bank of the 'nited $tates (,-+>-,-+-)
President of =ew &ork $tock B3change (,-.9-,-+,)
*ember of =ew &ork $tock B3change (,-.,-,-.9)
Partner of 0.@. Bdwards % $ons M$t. LouisN (,-.,-,-.9)
*ember of the 1ouncil on 4oreign "elations (,-+:-,-->)
!rustee of &ale 'ni(ersity (,-/9-,-:+)
'.$. 0rmy officer during World War 88
4ormer *ember of the board of directors of 0merican B3#ress, 1ater#illar !ractor, Dow ;ones % 1o.,
8nternational Business *achines (8B*), '.$. $teel 1or#., Bli Lilly, and "oyal Dutch Petroleum
B.0. &ale ,-69
Born in $t. Louis, *issouri on December ,:, ,-</5 Died in Washington, D.1. on ;uly 69, ,--9
0rthur 4rank Burns
1hairman of the 4ederal "eser(e (4ebruary ,, ,-:<-;anuary .,, ,-:9)
'.$. 0mbassador to West @ermany (;une .<, ,-9,-*ay ,/, ,-9>)
1ounselor to the President of the '.$. M"ichard =i3onN (,-/--,-:<)
1hairman of =ational Bureau of Bconomic "esearch (,-/:-,-/9)
President of =ational Bureau of Bconomic "esearch (,->:-,-/:)
1hairman of the 1ouncil of Bconomic 0d(isers (,->.-,->/)
Professor of Bconomics at 1olumbia 'ni(ersity (,-++-,-/-)
*ember of the 1ouncil on 4oreign "elations (,-/<-,-9/)
4ormer *ember of the !rilateral 1ommission
Ph.D. 1olumbia 'ni(ersity ,-.+5 B.0. 1olumbia 'ni(ersity ,-6>
Born in 8(ano-4ranki(sk, 'kraine Mformerly 0ustria-ungaryN on 0#ril 6:, ,-<+5 Died ;une 6/, ,-9:
Paul 0dol#h Aolcker
1hairman of the 4ederal "eser(e (0ugust /, ,-:-Q0ugust ,,, ,-9:)
President of the 4ederal "eser(e Bank of =ew &ork (*ay 6, ,-:>Q0ugust >, ,-:-)
'nder $ecretary of the !reasury for *onetary 0ffairs (,-/--,-:+)
Aice President of 1hase *anhattan Bank (,-/>-,-/9)
Bilderberg *eetings #artici#ant (,-96-,-9., ,-9/-,-99, ,--6, ,--:)
=orth 0merican 1hairman of !he !rilateral 1ommission (,--,-6<<,)
=orth 0merican onorary 1hairman of the !rilateral 1ommission (6<<,-#resent)
1hairman of the Board of !rustees of the @rou# of !hirty (@-.<)
Director of the 8nstitute for 8nternational Bconomics
*ember of the Bretton Woods 1ommittee
*ember of the 1ouncil on 4oreign "elations (,-:<-#resent)
Director of the 1ouncil on 4oreign "elations (,-:>-,-:-, ,-99-,---)
0.B. summa cum laude Princeton 'ni(ersity ,-+-5 *.0. ar(ard ,->,
Postgraduate student at London $chool of Bconomics (,->,-,->6)
Born in =ew ;ersey on $e#tember >, ,-6:
$ir 0lan @reens#an
1hairman of the 4ederal "eser(e (0ugust ,,, ,-9:Q;anuary .,, 6<</)
1hairman of the =ational 1ommission on $ocial $ecurity "eform (,-9,-,-9.)
1hairman of the 1ouncil of Bconomic 0d(isors (,-:+-,-::)
*ember of President)s 4oreign 8ntelligence 0d(isory Board (,-9.-,-9>)
*ember of President)s Bconomic Policy 0d(isory Board (,-9,-,-9:)
*ember of the 1ouncil on 4oreign "elations (,-:9-#resent)
Director of the 1ouncil on 4oreign "elations (,-96-,-99)
4ormer *ember of the @rou# of !hirty (@-.<)
Bilderberg *eetings #artici#ant (6<<6)
4ormer *ember of the Bohemian @ro(e in 1alifornia
*arried to =B1 Kournalist 0ndrea *itchell
Ph.D. =ew &ork 'ni(ersity ,-::5 *.0. =ew &ork 'ni(ersity ,-><
0warded the onorary Enight 1ommander of the British Bm#ire (6<<6)
Born in =ew &ork 1ity on *arch /, ,-6/
Ben $halom Bernanke
1hairman of the 4ederal "eser(e (4ebruary ,, 6<</-;anuary .,, 6<,+)
1hairman of the 1ouncil of Bconomic 0d(isers (6<<>-6<</)
*ember of the Board of @o(ernors of the 4ederal "eser(e (6<<6-6<<>, 6<</-6<,+)
Professor of Bconomics and Public 0ffairs at Princeton 'ni(ersity (,-9>-6<<6)
Bilderberg *eetings #artici#ant (6<<9)
B.0. summa cum laude ar(ard ,-:>5 Ph.D. *assachusetts 8nstitute of !echnology ,-:-
Born in 0ugusta, @eorgia, '.$.0. on December ,., ,->.5 raised in Dillon, $outh 1arolina, '.$.0.
@eorge L. arrison
President of the 4ederal "eser(e Bank of =ew &ork (=o(ember 66, ,-69-December .,, ,-+<)
De#uty @o(ernor of the 4ederal "eser(e Bank of =ew &ork (,-6<-,-69)
@eneral 1ounsel of the 4ederal "eser(e Board (,-,--,-6<)
President of =ew &ork Life 8nsurance 1o. (,-+,-,-+9)
1hairman of the board of =ew &ork Life 8nsurance 1o. (,-+9-,->+)
*ember of the 1ouncil on 4oreign "elations (,-6--,->.)
*ember of $kull % Bones at &ale 'ni(ersity
*ember of the Pilgrims $ociety
B.0. &ale ,-,<5 LL.B. ar(ard ,-,.
Born in $an 4rancisco on ;anuary 6/, ,99:5 Died in Washington, D.1. on *arch >, ,->9
0llan $#roul
President of the 4ederal "eser(e Bank of =ew &ork (;anuary ,, ,-+,-;une .<, ,->/)
4irst Aice President of the 4ederal "eser(e Bank of =ew &ork (,-./-,-+<)
*ember of the 1ouncil on 4oreign "elations (,-.>-,->>)
4ormer *ember of the Bohemian @ro(e in 1alifornia
B.$. 'ni(ersity of 1alifornia at Berkeley ,-,-
Born in $an 4rancisco on *arch -, ,9-/5 Died 0#ril -, ,-:9
0lfred ayes
President of the 4ederal "eser(e Bank of =ew &ork (0ugust ,, ,->/-0ugust ,, ,-:>)
1hairman of *organ $tanley 8nternational 8nc. (,-:>-,-9,)
Aice President of the =ew &ork !rust 1om#any (,-+--,->/)
*ember of the 1ouncil on 4oreign "elations (,-+9-,-9>)
1hairman of the Bconomic 1lub of =ew &ork (,-/>-,-//)
4ormer *ember of the Pilgrims $ociety
"hodes $cholar at F3ford 'ni(ersity
B.0. &ale ,-.<5 B.Litt. F3ford ,-..
Born in 8thaca, =ew &ork on ;uly +, ,-,<5 Died in =ew 1anaan, 1onnecticut on Fctober 6,, ,-9-
0nthony *. $olomon
President of the 4ederal "eser(e Bank of =ew &ork (0#ril ,, ,-9<-December ,, ,-9+)
'nder $ecretary of the !reasury for *onetary 0ffairs (,-::-,-9<)
0ssistant $ecretary of $tate for Bconomic 0ffairs (,-/>-,-/-)
4ormer 1hairman of $.@. Warburg 8nc. ('.$.0.)
*ember of the 1ouncil on 4oreign "elations (,-//-6<<:)
Bilderberg *eetings #artici#ant (,-:9)
Ph.D. ar(ard ,-><5 B.0. 'ni(ersity of 1hicago ,-+,
Born in =ew ;ersey on December 6:, ,-,-5 Died in =ew &ork 1ity on ;anuary ,9, 6<<9
B. @erald 1orrigan
President of the 4ederal "eser(e Bank of =ew &ork (;anuary ,, ,-9>-;uly ,-, ,--.)
President of the 4ederal "eser(e Bank of *innea#olis (,-9<-,-9+)
*anaging Director of @oldman $achs (,--:-#resent)
*ember of the 1ouncil on 4oreign "elations (,-9/-,--:)
Director of the 1ouncil on 4oreign "elations (,--.-,-->)
Bilderberg *eetings #artici#ant (,--+)
*ember of the !rilateral 1ommission
*ember of the Bconomic 1lub of =ew &ork
Ph.D. 4ordham 'ni(ersity ,-:,
Born in Waterbury, 1onnecticut on ;une ,., ,-+,
William ;. *cDonough
President of the 4ederal "eser(e Bank of =ew &ork (;uly ,-, ,--.-;une ,,, 6<<.)
1hairman of the Public 1om#any 0ccounting F(ersight Board (6<<.-6<<>)
Aice 1hairman of *errill Lynch % 1o. (6<</-#resent)
Aice 1hairman of 4irst 1hicago 1or#. and 4irst =ational Bank of 1hicago (,-9/-,-9-)
*ember of the 1ouncil on 4oreign "elations (,-:>-#resent)
Director of the 1ouncil on 4oreign "elations (,-->-6<<+)
Bilderberg *eetings #artici#ant (,--:-6<<<, 6<<6, 6<<+, 6<<9)
1hairman of the Bconomic 1lub of =ew &ork (,--/-6<<<)
*.0. @eorgetown 'ni(ersity ,-/6
Born on 0#ril 6,, ,-.+
!imothy 4ran2 @eithner
$ecretary of the !reasury (;anuary 6/, 6<<-Q;anuary 6>, 6<,.)
President of the 4ederal "eser(e Bank of =ew &ork (=o(ember ,:, 6<<.Q;anuary 6/, 6<<-)
'nder '.$. $ecretary of the !reasury for 8nternational 0ffairs (,--:-6<<,)
*ember of the @rou# of !hirty (@-.<)
*ember of the 1ouncil on 4oreign "elations (,--/-#resent)
Bilderberg *eetings #artici#ant (6<<+-6<<9)
B.0. Dartmouth ,-9.5 *.0. ;ohns o#kins 'ni(ersity ,-9>
Born in =ew &ork 1ity on 0ugust ,9, ,-/,
*ichael . *oskow
President of the 4ederal "eser(e Bank of 1hicago (,--+-6<<:)
De#uty '.$. !rade "e#resentati(e (,--,-,--.)
'nder '.$. $ecretary of Labor (,-:/-,-::)
4ormer 1hairman of !he Bconomic 1lub of 1hicago
*ember of the 1ouncil on 4oreign "elations (,--/-#resent)
Director of the 1ouncil on 4oreign "elations (,--9-6<<9)
Bilderberg *eetings #artici#ant (6<<,-6<<6)
Ph.D. 'ni(ersity of Pennsyl(ania ,-/>
Born in =ew ;ersey on ;anuary :, ,-.9
"oger W. 4erguson ;r.
Aice 1hairman of the 4ederal "eser(e (Fctober >, ,----0#ril 69, 6<</)
1hairman of the Bconomic 1lub of =ew &ork (6<,6-#resent)
President and 1BF of !800-1"B4 (6<<9-#resent)
1hairman of $wiss "e 0merica olding 1or#oration (6<</-6<<9)
*ember of the 1ouncil on 4oreign "elations (6<<+-#resent)
*ember of the !rilateral 1ommission (c.6<<>-#resent)
!rustee of 1arnegie Bndowment for 8nternational Peace (6<<9-#resent)
Ph.D. ar(ard ,-9,5 ;.D. ar(ard ,-:-5 B.0. ar(ard ,-:.
Born in Washington, D.1. on Fctober 69, ,->,
0 co#y of the O4ederal "eser(e =oteP, a bank note #roduced by the 4ederal "eser(e
+ (opy of an +meri(an oneGdollar 1ill that is issued as a 2<ilver Certifi(ate9% This oneGdollar 1ill is re(ogniAed as a
2(ertifi(ate9 as opposed to a 2note%9
2Throughout the ages! national governments have had a (hroni( tenden(y to engage in a(tivities that outstrip the ta3es they are
willing or a1le to (olle(t : a pra(ti(e that was fa(ilitated in earlier times 1y (lipping pre(ious (oins and in modern times 1y
e3(essive printing of paper money and (oer(ion of (entral 1anks% To afford a measure of prote(tion against su(h politi(al
a1uses! the authors of the Federal Reserve +(t provided for an independent (entral 1ank! and their a(tion : while at times
5uestioned : has 1een (onfirmed time and again 1y the Congress% 6n other words! su1stantial independen(e in e3er(ising power
over money (reation is not something that Federal Reserve offi(ials have arrogated unto themselves! nor is it something that
others have (onferred 1e(ause of a 1elief that (entral 1ankers have uni5ue insight that sets them apart from other people% Rather!
the a1ility of the Federal Reserve to a(t with some independen(e from the e3e(utive 1ran(h! and also with immunity from
transient (ongressional pressures! was deli1erately esta1lished and has 1een deli1erately maintained 1y the Congress in the
interest of prote(ting the integrity of our money%9
: +rthur F% Burns! Chairman of the Federal Reserve! in his spee(h to the National *ress Clu1 in 'anuary FH=
<our(e: The &entral anks 1y Mar4orie )eane and Ro1ert *ringle! p% ""F
/<our(e: http:@@rageman(hoo%tripod%(om@dollarZF">Z<ilverCert%4pg0
/<our(e: http:@@rageman(hoo%tripod%(om@us(urren(y%html0
/<our(e: http:@@rageman(hoo%tripod%(om@###dollarZF#HZ.oldCert%4pg0
/<our(e: http:@@rageman(hoo%tripod%(om@####dollarZ=="Z.oldCert%4pg0
/<our(e: http:@@rageman(hoo%tripod%(om@####dollarZF=ZFedReserveNote%4pg0
/<our(e: http:@@rageman(hoo%tripod%(om@"#dollarZF"=Z.oldCert%4pg0
+ (opy of an +meri(an P## 1ill gold (ertifi(ate! printed in F"=%
/<our(e: http:@@usrare(urren(y%(om@F"=P##.oldCertifi(ateFR"$#L*M.+;L=<n+##$=?L>+%htm0
Knighthoo# for Fe#Hs reenspan
!hursday, $e#tember 6/, 6<<6 Posted7 +7>/ P* BD! (6<>/ @*!)
LI5<I5, ?nglan# (C55" 00 -... Fe#eral 6eser4e Chairman 8lan reenspan has re+ei4e# an honorar! knighthoo#
from ,ritainHs Jueen ?li:abeth DD.
!he honour, recommended by the 'E 4oreign Fffice and a##ro(ed by the Tueen in 0ugust, is in recognition of @reens#anIs Hcontribution to
global economic stability.H
@reens#an, :/, has been dubbed the second most #owerful man in 0merica and has steered the countryIs economy through four
#residencies.
H8tIs a (ery unusual day for an economist,H he said, as he recei(ed the knighthood at the DueenIs Balmoral estate in the $cottish ighlands.
H8 am dee#ly a##reciati(e of this honour which 8 shall always cherish,H he said.
e Koked with the Tueen and her husband, Prince Phili#, saying he was tired because the HBritish @o(ernment #ut me to work yesterday.H
e arri(ed in London on Wednesday and made a series of s#eeches to business leaders and dignitaries at both the !reasury and the Bank of
Bngland about the im#act of the euro.
London was still at the Hto# of the financial #yramidH with =ew &ork, he said, des#ite #redictions that foreign e3change trading would shift to
the 1ontinent following the introduction of the euro.
@reens#an was honoured by the @o(ernor of the Bank of Bngland, $ir Bdward @eorge, and British 1hancellor @ordon Brown at a dinner on
Wednesday night.
@reens#an cannot call himself H$irH since he is not a 'E citi2en.
owe(er, he will be able to add the letters EBB -- which stand for Enight 1ommander of the British Bm#ire -- after his name.
8t is an honour shared by former '.$. President "onald "eagan, former '.$. President @eorge Bush, former =ew &ork *ayor "udy @iuliani,
entertainer Bob o#e and '.$. @en. =orman $chwar2ko#f.
@reens#an was decorated with the #restigious 4rench Legion of onour (1ommander) in 6<<<.
e has also recei(ed honorary degrees from ar(ard, &ale, Pennsyl(ania, Leu(en (Belgium), =otre Dame, Wake 4orest and 1olgate
uni(ersities.
!he son of a stockbroker and a retail worker, he took u# his current #ost in ,-9: and has ke#t his #osition through the #residencies of "eagan,
Bush senior, 1linton and Bush Kunior.
is fourth term as chairman of the 4ederal "eser(e Board ends in 6<<+.
<our(e: http:@@ar(hives%(nn%(om@"##"@&JRC)@europe@#F@"?@greenspan%knighthood@inde3%html
+bama taps %tanley #ischer, 7ael )rainard for #ed posts
<T+FF@Reuters G + (om1ination of file photos of /left to right0 <tanley Fis(her8 Cael Brainard8 and 'erome *owell% *resident
J1ama has nominated all three for Federal Reserve posts% ;Bote4 #ischer, )rainard, and 2owell are members of the (ouncil
on #oreign $elations, a private organi'ation in Bew Dork (ity.?
By Va(hary +% .oldfar1! *u1lished: 'anuary #! "#$
*resident J1ama on Friday took another signifi(ant step toward making his mark on the powerful Federal Reserve!
announ(ing he will tap <tanley Fis(her! the former governor of 6sraelEs (entral 1ank and a mentor to many of todayEs
top minds in e(onomi(s! to serve as the FedEs vi(e (hairman%
Jnly days after the <enate (onfirmed J1amaEs nominee to lead the Fed! (urrent ,i(e Chair 'anet C% Yellen! the
president also announ(ed he would nominate Cael Brainard! a longtime )emo(rati( e(onomi( poli(ymaker and the
Treasury )epartmentEs former top diplomat! to serve as a Fed governor% 7e also is nominating 'erome *owell! a
(urrent Fed governor who served in .eorge 7%&% BushEs administration! for a se(ond term%
.iven the <enateEs re(ent de(ision to lower the vote threshold for nonG<upreme Court nominations! all the (andidates
are likely to 4oin the Fed over the (oming months% +s a result! J1ama will have fully shaped the Fed in the final three
years of his presiden(y N when e(onomi( progress might depend as mu(h on what the (entral 1ank does as on
anything he is a1le to a((omplish if Congress (ontinues to prove resistant to new legislation%
2These three distinguished individuals have the proven e3perien(e! 4udgment and deep knowledge of the finan(ial
system to serve at the Federal Reserve during this important time for our e(onomy!9 J1ama said in a statement%
2<tanley Fis(her 1rings de(ades of leadership and e3pertise from various roles! in(luding serving at the 6nternational
Monetary Fund and the Bank of 6srael!9 J1ama added% 27e is widely a(knowledged as one of the worldEs leading and
most e3perien(ed e(onomi( poli(y minds%9
Fed Chairman Ben <% Bernanke is e3pe(ted to step down at the end of the month and 1e repla(ed 1y Yellen% But
despite the highGprofile turnover! the Fed is not e3pe(ted to (hange dire(tion! either when Yellen takes the helm or if
Fis(her and Brainard 4oin%
&ith the unemployment rate at ?%H per(ent! the Fed is starting to wind down its e3traordinary stimulus (ampaign% Cast
month! it announ(ed it would slow its monthly 1ond pur(hases to PHL 1illion per month! a modest P# 1illionGperG
month redu(tion that finan(ial markets seemed to digest easily%
Fed offi(ials have suggested they would stop asset pur(hases 1y the end of the year! though whether the slowdown
itself would 1e tempered was an open 5uestion after FridayEs report that a meager H$!### 4o1s were (reated last
month%
+s governor of 6sraelEs (entral 1ank! Fis(her was (redited with keeping the (ountryEs e(onomy sta1le through the
glo1al finan(ial (risis of "##H through "##F% 7e has also spent time as a senior offi(ial at the 6nternational Monetary
Fund and the &orld Bank and worked in the private se(tor at Citigroup% 7e was a longtime professor at M6T! where
he taught Bernanke and many other top e(onomists%
Brainard spent a1out four years as TreasuryEs underse(retary for international affairs! its top offi(ial fo(used on glo1al
e(onomi( and finan(ial poli(y% 6n that role! she helped manage the ;%<% response to the sovereign de1t (risis in
-urope and e(onomi( affairs with China and other key (ountries% <he also worked at the Brookings 6nstitution and in
the Clinton administration% <he was a professor at M6T early in her (areer%
2Cael Brainard has served as one of my top and most trusted international e(onomi( advisers during a (hallenging
time not 4ust at home! 1ut for our glo1al e(onomy as well! and her knowledge of international monetary and e(onomi(
issues will 1e an important addition to the Fed!9 J1ama said in the statement%
*owell 4oined the Fed in "#" after a (areer that in(luded time as a lawyer! an investment 1anker and a top Treasury
offi(ial in .eorge 7%&% BushEs administration% 7e also was a s(holar at the Bipartisan *oli(y Center%
<our(e: &ashington *ost
4ormer '.$. $ecretary of the !reasury Lawrence $ummers (left), former @o(ernor of the Bank of 8srael $tanley 4ischer (6
nd
left), 4ederal
"eser(e 1hairman Ben Bernanke (6
nd
right), and 8*4 "esearch De#artment Director Fli(ier Blanchard #artici#ate in an economic forum on
HPolicy "es#onses to 1risesH at the 8nternational *onetary 4und headDuarters in Washington, D.1. on =o(ember 9, 6<,.. !he forum was #art
of the fourteenth ;acDues Polak 0nnual "esearch 1onference. $tanley 4ischer was a##ointed Aice 1hairman of the 4ederal "eser(e in
;anuary 6<,+. Ben Bernanke finishes his term as 1hairman of the 4ederal "eser(e at the end of ;anuary 6<,+. Lawrence $ummers, $tanley
4ischer, and Ben Bernanke ha(e attended the Bilderberg *eetings in the #ast. (Photo7 1hi# $omode(illaC@etty 8mages =orth 0merica)
#ederal $eserve !ct
<e(tion _ <e(tion Title
, $hort !itle and Definitions
6 4ederal "eser(e Districts
60 *onetary Policy FbKecti(es
6B 0##earances Before and "e#orts to the 1ongress
. Branch Fffices
+ 4ederal "eser(e Banks
> $tock 8ssues5 8ncrease and Decrease of 1a#ital
/ 8nsol(ency of *ember Banks
: Di(ision of Barnings
9 1on(ersion of $tate Banks into =ational Banks
- $tate Banks as *embers
-0 Partici#ation in Lotteries Prohibited
-B "esolution of 1learing Banks
,< Board of @o(ernors of the 4ederal "eser(e $ystem
,<0 Bmergency 0d(ances to @rou#s of *ember Banks
,<B 0d(ances to 8ndi(idual *ember Banks
,, Powers of Board of @o(ernors of the 4ederal "eser(e $ystem
,,0 Pricing of $er(ices
,,B 0nnual 8nde#endent 0udits of 4ederal "eser(e Banks and Board
,6 4ederal 0d(isory 1ouncil
,60 4ederal F#en *arket 1ommittee
,. Powers of 4ederal "eser(e Banks
,.0 Discount of 0gricultural Pa#er
,+ F#en *arket F#erations
,> @o(ernment De#osits
,/ =ote 8ssues
,: De#osit of Bonds by =ational Banks
,9 "efunding Bonds
,- Bank "eser(es
6< =ational Bank =otes "edem#tion 4und as "eser(e
6, Bank B3amination
66 Fffenses of B3aminers, *ember Banks, Ffficers, and Directors
6. 8nterbank Liabilities
6.0 "elations with 0ffiliates
6.B "estrictions on !ransactions with 0ffiliates
6+ "eal Bstate Loans
6+0 8n(estment in Bank Premises or $tock of 1or#oration olding Premises
6> 4oreign Branches
6>0 Banking 1or#orations 0uthori2ed to Do 4oreign Banking Business
6>B ;urisdiction of $uits
6>1 Potential Liability on 4oreign 0ccounts
6/ M"e#ealedN
6: !a3 on =ational Bank =otes
69 "eduction of 1a#ital of =ational Banks
6- 1i(il *oney Penalty
.< $a(ing 1lause
., "eser(ation of "ight to 0mend
Last up#ate7 8ugust (3, *>>1
<our(e: http:@@www%federalreserve%gov@a1outthefed@fra(t%htm
%ection /. %hort Title and Cefinitions
,. $hort !itle K
Be it enacte %y the 'enate an &ouse of -epresentati,es of the .nite 'tates of America in /ongress assem%!e, !hat the short title
of this 0ct shall be the H4ederal "eser(e 0ct.H
M,6 '$1 66/. Part of original 4ederal "eser(e 0ct5 not amended.N L
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6. Definition of HBankH
Where(er the word HbankH is used in this 0ct, the word shall be held to include $tate bank, banking association, and trust com#any,
e3ce#t where national banks or 4ederal reser(e banks are s#ecifically referred to. 4or #ur#oses of this 0ct, a $tate bank includes any
bank which is o#erating under the 1ode of Law for the District of 1olumbia.
M,6 '$1 66,. Part of original 4ederal "eser(e 0ct. 0s amended by act of Fct. ,., 6<</ (,6< $tat. 6<69). X N
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.. Definitions of Fther !erms
!he terms Hnational bankH and Hnational banking associationH used in this 0ct shall be held to be synonymous and interchangeable.
!he term Hmember bankH shall be held to mean any national bank, $tate bank, or bank or trust com#any which has become a member
of one of the reser(e banks created by this 0ct. !he term HboardH shall be held to mean Board of @o(ernors of the 4ederal "eser(e
$ystem5 the term HdistrictH shall be held to mean 4ederal reser(e district5 the term Hreser(e bankH shall be held to mean 4ederal reser(e
bank5 the term Hthe continental 'nited $tatesH means the $tates of the 'nited $tates and the District of 1olumbia.
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+. Definition of HBonds and =otes of the 'nited $tatesH
!he terms Hbonds and notes of the 'nited $tates,H Hbonds and notes of the @o(ernment of the 'nited $tates,H and Hbonds or notes of
the 'nited $tatesH used in this 0ct shall be held to include certificates of indebtedness and !reasury bills issued under section .,<+ of
title .,.
M,6 '$1 66,. 0s amended by acts of ;une 6>, ,->- (:. $tat. ,+6) and $e#t. ,., ,-96 (-/ $tat. ,<>9). 4or further definitions, see section 6 of Banking 0ct of
,-.., a##ro(ed ;une ,/, ,-... $ection 6<.(a) of the Banking 0ct of ,-.>, a##ro(ed 0ug. 6., ,-.> (+- $tat. :<+), #ro(ided7 Hereafter the 4ederal "eser(e
Board shall be known as the IBoard of @o(ernors of the 4ederal "eser(e $ystemI, and the go(ernor and (ice go(ernor of the 4ederal "eser(e Board shall be
known as the IchairmanI and the I(ice chairmanI, res#ecti(ely, of the Board of @o(ernors of the 4ederal "eser(e $ystem.H 0ccordingly, the words H4ederal
"eser(e BoardH, Hgo(ernorH, and H(ice go(ernorH, where(er they formerly a##eared in the 4ederal "eser(e 0ct (or in other acts of 1ongress), ha(e been
changed here to read HBoard of @o(ernors of the 4ederal "eser(e $ystemH, HchairmanH and H(ice chairmanH, res#ecti(ely, notwithstanding the fact that such
change has not been made by s#ecific amendment of the law.
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L Paragra#h numbers, to#ical headings and notes are not #art of the law and should not be regarded as affecting the construction of the law.
L Paragra#h numbers, to#ical headings and notes are not #art of the law and should not be regarded as affecting the construction of the law.
X 0n identical amendment was made by act of Fct. ,/, 6<</ (,6< $tat. 6<69).
%ection 1. #ederal $eserve Cistricts
,. Bstablishment of "eser(e 1ities and Districts
0s soon as #racticable, the $ecretary of the !reasury, the $ecretary of 0griculture and the 1om#troller of the 1urrency, acting as H!he
"eser(e Bank Frgani2ation 1ommittee,H shall designate not less than eight nor more than twel(e cities to be known as 4ederal reser(e
cities, and shall di(ide the continental 'nited $tates, e3cluding 0laska, into districts, each district to contain only one of such 4ederal
reser(e cities. !he determination of said organi2ation committee shall not be subKect to re(iew e3ce#t by the Board of @o(ernors of the
4ederal "eser(e $ystem when organi2ed7 #ro,ie) !hat the districts shall be a##ortioned with due regard to the con(enience and
customary course of business and shall not necessarily be coterminous with any $tate or $tates. !he districts thus created may be
readKusted and new districts may from time to time be created by the Board of @o(ernors of the 4ederal "eser(e $ystem, not to
e3ceed twel(e in all. $uch districts shall be known as 4ederal reser(e districts and may be designated by number. When the $tate of
0laska or awaii is hereafter admitted to the 'nion the 4ederal "eser(e districts shall be readKusted by the Board of @o(ernors of the
4ederal "eser(e $ystem in such manner as to include such $tate. B(ery national bank in any $tate shall, u#on commencing business
or within ninety days after admission into the 'nion of the $tate in which it is located, become a member bank of the 4ederal "eser(e
$ystem by subscribing and #aying for stock in the 4ederal "eser(e bank of its district in accordance with the #ro(isions of this 0ct and
shall thereu#on be an insured bank under the 4ederal De#osit 8nsurance 0ct, and failure to do so shall subKect such bank to the #enalty
#ro(ided by the si3th #aragra#h of this section.
MPartly incor#orated in ,6 '$1 666 and 66.. 0s amended by acts of ;uly :, ,->9 (:6 $tat. .><)5 *arch ,9, ,->- (:. $tat. ,6).N
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6. Powers of Frgani2ation 1ommittee
$aid organi2ation committee shall be authori2ed to em#loy counsel and e3#ert aid, to take testimony, to send for #ersons and #a#ers,
to administer oaths, and to make such in(estigation as may be deemed necessary by the said committee in determining the reser(e
districts and in designating the cities within such districts where such 4ederal reser(e banks shall be se(erally located. !he said
committee shall su#er(ise the organi2ation in each of the cities designated of a 4ederal reser(e bank, which shall include in its title the
name of the city in which it is situated, as H4ederal "eser(e Bank of 1hicago.H
MFmitted from '.$. 1ode e3ce#t #art of last sentence, which is incor#orated in ,6 '$1 66>. Part of original 4ederal "eser(e 0ct5 not amended.N
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.. $ubscri#tion to $tock by =ational Banks
'nder regulations to be #rescribed by the organi2ation committee, e(ery national banking association in the 'nited $tates is hereby
reDuired, and e(ery eligible bank in the 'nited $tates and e(ery trust com#any within the District of 1olumbia, is hereby authori2ed to
signify in writing, within si3ty days after the #assage of this 0ct, its acce#tance of the terms and #ro(isions hereof. When the
organi2ation committee shall ha(e designated the cities in which 4ederal reser(e banks are to be organi2ed, and fi3ed the geogra#hical
limits of the 4ederal reser(e districts, e(ery national banking association within that district shall be reDuired within thirty days after
notice from the organi2ation committee, to subscribe to the ca#ital stock of such 4ederal reser(e bank in a sum eDual to si3 #er centum
of the #aid-u# ca#ital stock and sur#lus of such bank, one-si3th of the subscri#tion to be #ayable on call of the organi2ation committee
or of the Board of @o(ernors of the 4ederal "eser(e $ystem, one-si3th within three months and one-si3th within si3 months thereafter,
and the remainder of the subscri#tion, or any #art thereof, shall be subKect to call when deemed necessary by the Board of @o(ernors
of the 4ederal "eser(e $ystem, said #ayments to be in gold or gold certificates.
MPartly incor#orated in ,6 '$1 696. Part of original 4ederal "eser(e 0ct5 not amended. 4or #ro(isions concerning stock subscri#tions by state banks and trust
com#anies, see section -.N
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+. Liability of $hareholders of "eser(e Banks
!he shareholders of e(ery 4ederal reser(e bank shall be held indi(idually res#onsible, eDually and ratably, and not one for another, for
all contracts, debts, and engagements of such bank to the e3tent of the amount of their subscri#tions to such stock at the #ar (alue
thereof in addition to the amount subscribed, whether such subscri#tions ha(e been #aid u# in whole or in #art, under the #ro(isions of
this 0ct.
M,6 '$1 ><6. Part of original 4ederal "eser(e 0ct5 not amended.N
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>. 4ailure of =ational Bank to 0cce#t !erms of 0ct
0ny national bank failing to signify its acce#tance of the terms of this 0ct within si3ty days aforesaid, shall cease to act as a reser(e
agent, u#on thirty daysI notice, to be gi(en within the discretion of the said organi2ation committee or of the Board of @o(ernors of the
4ederal "eser(e $ystem.
MFmitted from '.$. 1ode. Part of original 4ederal "eser(e 0ct5 not amended.N
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/. Penalty for Aiolation of 0ct by =ational Banks
$hould any national banking association in the 'nited $tates now organi2ed fail within one year after the #assage of this 0ct to become
a member bank or fail to com#ly with any of the #ro(isions of this 0ct a##licable thereto, all of the rights, #ri(ileges, and franchises of
such association granted to it under the national-bank 0ct, or under the #ro(isions of this 0ct, shall be thereby forfeited. 0ny
noncom#liance with or (iolation of this 0ct shall, howe(er, be determined and adKudged by any court of the 'nited $tates of com#etent
Kurisdiction in a suit brought for that #ur#ose in the district or territory in which such bank is located, under direction of the Board of
@o(ernors of the 4ederal "eser(e $ystem, by the 1om#troller of the 1urrency in his own name before the association shall be
declared dissol(ed. 8n cases of such noncom#liance or (iolation, other than the failure to become a member bank under the #ro(isions
of this 0ct, e(ery director who #artici#ated in or assented to the same shall be held liable in his #ersonal or indi(idual ca#acity for all
damages which said bank, its shareholders, or any other #erson shall ha(e sustained in conseDuence of such (iolation.
M,6 '$1 ><,a. Part of original 4ederal "eser(e 0ct5 not amended.N
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:. Bffect of Dissolution
$uch dissolution shall not take away or im#air any remedy against such cor#oration, its stockholders or officers, for any liability or
#enalty which shall ha(e been #re(iously incurred.
M,6 '$1 ><,a. Part of original 4ederal "eser(e 0ct5 not amended.N
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9. $tock Fffered to Public
$hould the subscri#tions by banks to the stock of said 4ederal reser(e banks or any one or more of them be, in the Kudgment of the
organi2ation committee, insufficient to #ro(ide the amount of ca#ital reDuired therefor, then and in that e(ent the said organi2ation
committee may, under conditions and regulations to be #rescribed by it, offer to #ublic subscri#tion at #ar such an amount of stock in
said 4ederal reser(e banks, or any one or more of them, as said committee shall determine, subKect to the same conditions as to
#ayment and stock liability as #ro(ided for member banks.
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-. Limitation on 0mount to Fne $ubscriber
=o indi(idual, co#artnershi#, or cor#oration other than a member bank of its district shall be #ermitted to subscribe for or to hold at any
time more than G6>,<<< #ar (alue of stock in any 4ederal reser(e bank. $uch stock shall be known as #ublic stock and may be
transferred on the books of the 4ederal reser(e bank by the chairman of the board of directors of such bank.
M,6 '$1 69.. Part of original 4ederal "eser(e 0ct5 not amended.N
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,<. $tock 0llotted to 'nited $tates
$hould the total subscri#tions by banks and the #ublic to the stock of said 4ederal reser(e banks, or any one or more of them, be, in
the Kudgment of the organi2ation committee, insufficient to #ro(ide the amount of ca#ital reDuired therefor, then and in that e(ent the
said organi2ation committee shall allot to the 'nited $tates such an amount of said stock as said committee shall determine. $aid
'nited $tates stock shall be #aid for at #ar out of any money in the !reasury not otherwise a##ro#riated, and shall be held by the
$ecretary of the !reasury and dis#osed of for the benefit of the 'nited $tates in such manner, at such times, and at such #rice, not less
than #ar, as the $ecretary of the !reasury shall determine.
MFmitted from '.$. 1ode. Part of original 4ederal "eser(e 0ct5 not amended. 8n a communication from the Board of @o(ernors of the 4ederal "eser(e $ystem
dated *arch :, ,-+,, it was stated, H0s originally enacted the 4ederal "eser(e 0ct #ro(ided for a "eser(e Bank Frgani2ation 1ommittee to ha(e charge of the
initial ste#s in organi2ing the 4ederal "eser(e $ystem and this 1ommittee was authori2ed to allot 4ederal "eser(e Bank stock to the 'nited $tates in the e(ent
that subscri#tions to such stock by banks and by the #ublic were inadeDuate. owe(er, subscri#tions by member banks were adeDuate and there was no
necessity or authority for the allocation of any stock to the 'nited $tates. 0ccordingly, Mthis #aragra#hN is now of no #ractical effect and may be regarded as
obsolete.HN
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,,. Aoting "ights
$tock not held by member banks shall not be entitled to (oting #ower.
M,6 '$1 69>. Part of original 4ederal "eser(e 0ct5 not amended.N
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,6. !ransfer of $tock
!he Board of @o(ernors of the 4ederal "eser(e $ystem is hereby em#owered to ado#t and #romulgate rules and regulations
go(erning the transfers of said stock.
M,6 '$1 69/. Part of original 4ederal "eser(e 0ct5 not amended.N
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,.. *inimum 1a#ital5 $tatus of "eser(e 1ities
=o 4ederal reser(e bank shall commence business with a subscribed ca#ital less than G+,<<<,<<<. !he organi2ation of reser(e districts
and 4ederal reser(e cities shall not be construed as changing the #resent status of reser(e cities, e3ce#t in so far as this 0ct changes
the amount of reser(es that may be carried with a##ro(ed reser(e agents located therein. !he organi2ation committee shall ha(e
#ower to a##oint such assistants and incur such e3#enses in carrying out the #ro(isions of this 0ct as it shall deem necessary, and
such e3#enses shall be #ayable by the !reasurer of the 'nited $tates u#on (oucher a##ro(ed by the $ecretary of the !reasury, and
the sum of G,<<,<<<, or so much thereof as may be necessary, is hereby a##ro#riated, out of any moneys in the !reasury not
otherwise a##ro#riated, for the #ayment of such e3#enses.
MLast sentence of this #aragra#h is omitted from '.$. 1ode5 rest of #aragra#h is incor#orated in ,6 '$1 66+ and 69,. 0mended by act of ;uly 69, ,->- (:. $tat.
6/+).N
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%ection 1a. onetary 2olicy +bjectives
!he Board of @o(ernors of the 4ederal "eser(e $ystem and the 4ederal F#en *arket 1ommittee shall maintain long run growth of the
monetary and credit aggregates commensurate with the economyIs long run #otential to increase #roduction, so as to #romote
effecti(ely the goals of ma3imum em#loyment, stable #rices, and moderate long-term interest rates.
M,6 '$1 66>a. 0s added by act of =o(ember ,/, ,-:: (-, $tat. ,.9:) and amended by acts of Fctober 6:, ,-:9 (-6 $tat. ,9-:)5 0ug. 6., ,-99 (,<6 $tat.
,.:>)5 and Dec. 6:, 6<<< (,,+ $tat. .<69).N
%ection 1). !ppearances )efore and $eports to the (ongress
(a" 8ppearan+es before the Congress
,. !he 1hairman of the Board shall a##ear before the 1ongress at semi-annual hearings, as s#ecified in #aragra#h (6),
regarding
0. the efforts, acti(ities, obKecti(es and #lans of the Board and the 4ederal F#en *arket 1ommittee with res#ect to the
conduct of monetary #olicy5 and
B. economic de(elo#ments and #ros#ects for the future described in the re#ort reDuired in subsection (b).
6. !he 1hairman of the Board shall a##ear
0. before the 1ommittee on Banking and 4inancial $er(ices of the ouse of "e#resentati(es on or about 4ebruary 6< of
e(en numbered calendar years and on or about ;uly 6< of odd numbered calendar years5
B. before the 1ommittee on Banking, ousing, and 'rban 0ffairs of the $enate on or about ;uly 6< of e(en numbered
calendar years and on or about 4ebruary 6< of odd numbered calendar years5 and
1. before either 1ommittee referred to in sub#aragra#h (0) or (B), u#on reDuest, following the scheduled a##earance of
the 1hairman before the other 1ommittee under sub#aragra#h (0) or (B).
(b" Congressional report. !he Board shall, concurrent with each semi-annual hearing reDuired by this section, submit a written re#ort
to the 1ommittee on Banking, ousing, and 'rban 0ffairs of the $enate and the 1ommittee on Banking and 4inancial $er(ices of the
ouse of "e#resentati(es, containing a discussion of the conduct of monetary #olicy and economic de(elo#ments and #ros#ects for
the future, taking into account #ast and #ros#ecti(e de(elo#ments in em#loyment, unem#loyment, #roduction,in(estment, real income,
#roducti(ity, e3change rates, international trade and #ayments, and #rices.
M,6 '$1 66>b. 0s added by act of Dec. 6:, 6<<< (,,+ $tat. .<69).N
%ection =. )ranch +ffices
,. Bstablishment of Branches of "eser(e Banks
!he Board of @o(ernors of the 4ederal "eser(e $ystem may #ermit or reDuire any 4ederal reser(e bank to establish branch banks
within the 4ederal reser(e district in which it is located or within the district of any 4ederal reser(e bank which may ha(e been
sus#ended. $uch branches, subKect to such rules and regulations as the Board of @o(ernors of the 4ederal "eser(e $ystem may
#rescribe, shall be o#erated under the su#er(ision of a board of directors to consist of not more than se(en nor less than three
directors, of whom a maKority of one shall be a##ointed by the 4ederal reser(e bank of the district, and the remaining directors by the
Board of @o(ernors of the 4ederal "eser(e $ystem. Directors of branch banks shall hold office during the #leasure of the Board of
@o(ernors of the 4ederal "eser(e $ystem.
M,6 '$1 >6,. 0s amended by act of ;une 6,, ,-,: (+< $tat. 6.6).N
6. Discontinuance of Branches
!he Board of @o(ernors of the 4ederal "eser(e $ystem may at any time reDuire any 4ederal "eser(e Bank to discontinue any branch
of such 4ederal "eser(e Bank established under this section. !he 4ederal "eser(e Bank shall thereu#on #roceed to wind u# the
business of such branch bank, subKect to such rules and regulations as the Board of @o(ernors of the 4ederal "eser(e $ystem may
#rescribe.
M,6 '$1 >6,. 0s added by act of 4eb. 6>, ,-6: (++ $tat. ,6.+).N
.. Brection of Branch Buildings
=o 4ederal "eser(e Bank shall ha(e authority hereafter to enter into any contract or contracts for the erection of any branch bank
building of any kind or character or to authori2e the erection of any such building, e3ce#t with the a##ro(al of the Board of @o(ernors of
the 4ederal "eser(e $ystem.
M,6 '$1 >6,. 0s added by act of 0ug. .,, ,-/6 (:/ $tat. +,9).N
%ection 8. #ederal $eserve )anks
,. Frgani2ation of "eser(e Banks
When the organi2ation committee shall ha(e established 4ederal reser(e districts as #ro(ided in section two of this 0ct, a certificate
shall be filed with the 1om#troller of the 1urrency showing the geogra#hical limits of such districts and the 4ederal reser(e city
designated in each of such districts. !he 1om#troller of the 1urrency shall thereu#on cause to be forwarded to each national bank
located in each district, and to such other banks declared to be eligible by the organi2ation committee which may a##ly therefor, an
a##lication blank in form to be a##ro(ed by the organi2ation committee, which blank shall contain a resolution to be ado#ted by the
board of directors of each bank e3ecuting such a##lication, authori2ing a subscri#tion to the ca#ital stock of the 4ederal reser(e bank
organi2ing in that district in accordance with the #ro(isions of this 0ct.
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6. Frgani2ation 1ertificate
When the minimum amount of ca#ital stock #rescribed by this 0ct for the organi2ation of any 4ederal reser(e bank shall ha(e been
subscribed and allotted, the organi2ation committee shall designate any fi(e banks of those whose a##lications ha(e been recei(ed, to
e3ecute a certificate of organi2ation, and thereu#on the banks so designated shall, under their seals, make an organi2ation certificate
which shall s#ecifically state the name of such 4ederal reser(e bank, the territorial e3tent of the district o(er which the o#erations of
such 4ederal reser(e bank are to be carried on, the city and $tate in which said bank is to be located, the amount of ca#ital stock and
the number of shares into which the same is di(ided, the name and #lace of doing business of each bank e3ecuting such certificate,
and of all banks which ha(e subscribed to the ca#ital stock of such 4ederal reser(e bank and the number of shares, subscribed by
each, and the fact that the certificate is made to enable those banks e3ecuting same, and all banks which ha(e subscribed or may
thereafter subscribe to the ca#ital stock of such 4ederal reser(e bank, to a(ail themsel(es of the ad(antages of this 0ct.
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.. 0cknowledgment and 4iling
!he said organi2ation certificate shall be acknowledged before a Kudge of some court of record or notary #ublic5 and shall be, together
with the acknowledgment thereof, authenticated by the seal of such court, or notary, transmitted to the 1om#troller of the 1urrency,
who shall file, record and carefully #reser(e the same in his office.
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+. @eneral 1or#orate Powers
'#on the filing of such certificate with the 1om#troller of the 1urrency as aforesaid, the said 4ederal reser(e bank shall become a body
cor#orate and as such, and in the name designated in such organi2ation certificate, shall ha(e #ower --
4irst. !o ado#t and use a cor#orate seal.
$econd. !o ha(e succession after the a##ro(al of this 0ct until dissol(ed by 0ct of 1ongress or until forfeiture of franchise for (iolation
of law.
!hird. !o make contracts
4ourth. !o sue and be sued, com#lain and defend, in any court of law or eDuity.
4ifth. !o a##oint by its board of directors a #resident, (ice #residents, and such officers and em#loyees as are not otherwise #ro(ided
for in this 0ct, to define their duties, reDuire bonds for them and fi3 the #enalty thereof, and to dismiss at #leasure such officers or
em#loyees. !he #resident shall be the chief e3ecuti(e officer of the bank and shall be a##ointed by the board of directors, with the
a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem, for a term of fi(e years5 and all other e3ecuti(e officers and all
em#loyees of the bank shall be directly res#onsible to him. !he first (ice #resident of the bank shall be a##ointed in the same manner
and for the same term as the #resident, and shall, in the absence or disability of the #resident or during a (acancy in the office of the
#resident, ser(e as chief e3ecuti(e officer of the bank. Whene(er a (acancy shall occur in the office of the #resident or the first (ice
#resident, it shall be filled in the manner #ro(ided for original a##ointments5 and the #erson so a##ointed shall hold office until the
e3#iration of the term of his #redecessor.
$i3th. !o #rescribe by its board of directors, by-laws not inconsistent with law, regulating the manner in which its general business may
be conducted, and the #ri(ileges granted to it by law may be e3ercised and enKoyed.
$e(enth. !o e3ercise by its board of directors, or duly authori2ed officers or agents, all #owers s#ecifically granted by the #ro(isions of
this 0ct and such incidental #owers as shall be necessary to carry on the business of banking within the limitations #rescribed by this
0ct.
Bighth. '#on de#osit with the !reasurer of the 'nited $tates of any bonds of the 'nited $tates in the manner #ro(ided by e3isting law
relating to national banks, to recei(e from the $ecretary of the !reasury circulating notes in blank, registered and countersigned as
#ro(ided by law, eDual in amount to the #ar (alue of the bonds so de#osited, such notes to be issued under the same conditions and
#ro(isions of law as relate to the issue of circulating notes of national banks secured by bonds of the 'nited $tates bearing the
circulating #ri(ilege, e3ce#t that the issue of such notes shall not be limited to the ca#ital stock of such 4ederal reser(e bank.
M,6 '$1 .+,. 0s amended by act of 4eb. 6>, ,-6: (++ $tat. ,6.+), which amended sub#aragra#h H$econd5H by act of 0ug. 6., ,-.> (+- $tat. :<.), which
amended sub#aragra#h H4ifthH effecti(e *arch ,, ,-./5 and by act of $e#t. 6., ,--+ (,<9 $tat. 66-.), which amended sub#aragra#h HBighth.H 0s to issuance of
4ederal "eser(e bank notes and redem#tion of bonds securing such notes, see section ,9, and note to the first #aragra#h of that section.N
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>. 0uthority to 1ommence Business
But no 4ederal reser(e bank shall transact any business e3ce#t such as is incidental and necessarily #reliminary to its organi2ation
until it has been authori2ed by the 1om#troller of the 1urrency to commence business under the #ro(isions of this 0ct.
M,6 '$1 .+,. Part of original 4ederal "eser(e 0ct5 not amended.N
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/. Board of Directors
B(ery 4ederal reser(e bank shall be conducted under the su#er(ision and control of a board of directors.
M,6 '$1 .<,. Part of original 4ederal "eser(e 0ct5 not amended.N
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:. Duties of Directors @enerally
!he board of directors shall #erform the duties usually a##ertaining to the office of directors of banking associations and all such duties
as are #rescribed by law.
M,6 '$1 .<,. Part of original 4ederal "eser(e 0ct5 not amended.N
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9. 0dministration of 0ffairs5 B3tension of 1redit
$aid board of directors shall administer the affairs of said bank fairly and im#artially and without discrimination in fa(or of or against any
member bank or banks and may, subKect to the #ro(isions of law and the orders of the Board of @o(ernors of the 4ederal "eser(e
$ystem, e3tend to each member bank such discounts, ad(ancements, and accommodations as may be safely and reasonably made
with due regard for the claims and demands of other member banks, the maintenance of sound credit conditions, and the
accommodation of commerce, industry, and agriculture. !he Board of @o(ernors of the 4ederal "eser(e $ystem may #rescribe
regulations further defining within the limitations of this 0ct the conditions under which discounts, ad(ancements, and the
accommodations may be e3tended to member banks. Bach 4ederal reser(e bank shall kee# itself informed of the general character
and amount of the loans and in(estments of its member banks with a (iew to ascertaining whether undue use is being made of bank
credit for the s#eculati(e carrying of or trading in securities, real estate, or commodities, or for any other #ur#ose inconsistent with the
maintenance of sound credit conditions5 and, in determining whether to grant or refuse ad(ances, rediscounts or other credit
accommodations, the 4ederal reser(e bank shall gi(e consideration to such information. !he chairman of the 4ederal reser(e bank
shall re#ort to the Board of @o(ernors of the 4ederal "eser(e $ystem any such undue use of bank credit by any member bank,
together with his recommendation. Whene(er, in the Kudgment of the Board of @o(ernors of the 4ederal "eser(e $ystem, any member
bank is making such undue use of bank credit, the Board may, in its discretion, after reasonable notice and an o##ortunity for a
hearing, sus#end such bank from the use of the credit facilities of the 4ederal "eser(e $ystem and may terminate such sus#ension or
may renew it from time to time.
M,6 '$1 .<,. 0s amended by act of ;une ,/, ,-.. (+9 $tat. ,/.).N
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-. =umber and 1lasses of Directors
$uch board of directors shall be selected as hereinafter s#ecified and shall consist of nine members, holding office for three years, and
di(ided into three classes, designated as classes 0, B, and 1.
M,6 '$1 .<6. Part of original 4ederal "eser(e 0ct5 not amended.N
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,<. 1lass 0 Directors
1lass 0 shall consist of three members, without discrimination on the basis of race, creed, color, se3, or national origin, who shall be
chosen by and be re#resentati(e of the stockholding banks.
M,6 '$1 .<6. 0s amended by act of =o(. ,/, ,-:: (-, $tat. ,.9:).N
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,,. 1lass B Directors
1lass B shall consist of three members, who shall re#resent the #ublic and shall be elected without discrimination on the basis of race,
creed, color, se3, or national origin, and with due but not e3clusi(e consideration to the interests of agriculture, commerce, industry,
ser(ices, labor, and consumers.
M,6 '$1 .<6. 0s amended by act of =o(. ,/, ,-:: (-, $tat. ,.99).N
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,6. 1lass 1 Directors
1lass 1 shall consist of three members who shall be designated by the Board of @o(ernors of the 4ederal "eser(e $ystem. !hey shall
be elected to re#resent the #ublic, without discrimination on the basis of race, creed, color, se3, or national origin, and with due but not
e3clusi(e consideration to the interests of agriculture, commerce, industry, ser(ices, labor and consumers. When the necessary
subscri#tions to the ca#ital stock ha(e been obtained for the organi2ation of any 4ederal reser(e bank, the Board of @o(ernors of the
4ederal "eser(e $ystem shall a##oint the class 1 directors and shall designate one of such directors as chairman of the board to be
selected. Pending the designation of such chairman, the organi2ation committee shall e3ercise the #owers and duties a##ertaining to
the office of chairman in the organi2ation of such 4ederal reser(e bank.
M,6 '$1 .<6. 0s amended by act of =o(. ,/, ,-:: (-, $tat. ,.99).N
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,.. $enator or "e#resentati(e 8neligible
=o $enator or "e#resentati(e in 1ongress shall be a member of the Board of @o(ernors of the 4ederal "eser(e $ystem or an officer
or a director of a 4ederal reser(e bank.
M,6 '$1 .<.. Part of original 4ederal "eser(e 0ct5 not amended.N
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,+. 1lass B Directors as Bm#loyees of Banks
=o director of class B shall be an officer, director, or em#loyee of any bank.
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,>. 1lass 1 Directors as Bm#loyees or $tockholders of Banks
=o director of class 1 shall be an officer, director, em#loyee, or stockholder of any bank.
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,/. =omination and Blection of 1lass 0 and B Directors
Directors of class 0 and class B shall be chosen in the following manner7
!he Board of @o(ernors of the 4ederal "eser(e $ystem shall classify the member banks of the district into three general grou#s or
di(isions, designating each grou# by number. Bach grou# shall consist as nearly as may be of banks of similar ca#itali2ation. Bach
member bank shall be #ermitted to nominate to the chairman of the board of directors of the 4ederal reser(e bank of the district one
candidate for director of class 0 and one candidate for director of class B. !he candidates so nominated shall be listed by the
chairman, indicating by whom nominated, and a co#y of said list shall, within fifteen days after its com#letion, be furnished by the
chairman to each member bank. Bach member bank by a resolution of the board or by an amendment to its by-laws shall authori2e its
#resident, cashier, or some other officer to cast the (ote of the member bank in the elections of class 0 and class B directors7 #ro,ie)
!hat whene(er any member banks within the same 4ederal "eser(e district are subsidiaries of the same bank holding com#any within
the meaning of the Bank olding 1om#any 0ct of ,->/, #artici#ation in any such nomination or election by such member banks,
including such bank holding com#any if it is also a member bank, shall be confined to one of such banks, which may be designated for
the #ur#ose by such holding com#any.
M,6 '$1 .<+. 0s amended by acts of $e#t. 6/, ,-,9 (+< $tat. -/9)5 ;une ,/, ,-.. (+9 $tat. ,/.)5 ;uly ,, ,-// (9< $tat. 6+.).N
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,:. Preferential Ballot
Within fifteen days after recei#t of the list of candidates the duly authori2ed officer of a member bank shall certify to the chairman his
first, second, and other choices for director of class 0 and class B, res#ecti(ely, u#on a #referential ballot u#on a form furnished by the
chairman of the board of directors of the 4ederal reser(e bank of the district. Bach such officer shall make a cross o##osite the name of
the first, second, and other choices for a director of class 0 and for a director of class B, but shall not (ote more than one choice for any
one candidate. =o officer or director of a member bank shall be eligible to ser(e as a class 0 director unless nominated and elected by
banks which are members of the same grou# as the member bank of which he is an officer or director.
M,6 '$1 .<+. 0s amended by act of $e#t. 6/, ,-,9 (+< $tat. -/9).N
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,9. 1andidates $er(ing *ore !han Fne *ember Bank
0ny #erson who is an officer or director of more than one member bank shall not be eligible for nomination as a class 0 director e3ce#t
by banks in the same grou# as the bank ha(ing the largest aggregate resources of any of those of which such #erson is an officer or
director.
M,6 '$1 .<+. 0s added by act of $e#t. 6/, ,-,9 (+< $tat. -/9.)N
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,-. 1ounting the Ballots
0ny candidate ha(ing a maKority of all (otes cast in the column of first choice shall be declared elected. 8f no candidate ha(e a maKority
of all the (otes in the first column, then there shall be added together the (otes cast by the electors for such candidates in the second
column and the (otes cast for the se(eral candidates in the first column. !he candidate then ha(ing a maKority of the electors (oting and
the highest number of combined (otes shall be declared elected. 8f no candidate ha(e a maKority of electors (oting and the highest
number of (otes when the first and second choices shall ha(e been added, then the (otes cast in the third column for other choices
shall be added together in like manner, and the candidate then ha(ing the highest number of (otes shall be declared elected. 0n
immediate re#ort of election shall be declared.
M,6 '$1 .<+. 0s amended by act of ;une 6/, ,-.< (+/ $tat. 9,>).N
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6<. 1lass 1 Directors5 1hairman and 4ederal "eser(e 0gent5 De#uty 1hairman
1lass 1 directors shall be a##ointed by the Board of @o(ernors of the 4ederal "eser(e $ystem. !hey shall ha(e been for at least two
years residents of the district for which they are a##ointed, one of whom shall be designated by said board as chairman of the board of
directors of the 4ederal reser(e bank and as H4ederal reser(e agent.H e shall be a #erson of tested banking e3#erience, and in
addition to his duties as chairman of the board of directors of the 4ederal reser(e bank he shall be reDuired to maintain, under
regulations to be established by the Board of @o(ernors of the 4ederal "eser(e $ystem, a local office of said board on the #remises of
the 4ederal reser(e bank. e shall make regular re#orts to the Board of @o(ernors of the 4ederal "eser(e $ystem and shall act as its
official re#resentati(e for the #erformance of the functions conferred u#on it by this 0ct. e shall recei(e an annual com#ensation to be
fi3ed by the Board of @o(ernors of the 4ederal "eser(e $ystem and #aid monthly by the 4ederal reser(e bank to which he is
designated. Fne of the directors of class 1 shall be a##ointed by the Board of @o(ernors of the 4ederal "eser(e $ystem as de#uty
chairman to e3ercise the #owers of the chairman of the board when necessary. 8n case of the absence of the chairman and de#uty
chairman, the third class 1 director shall #reside at meetings of the board.
M,6 '$1 .<>. 0s amended by act of ;une 6,, ,-,: (+< $tat. 6.6).N
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6,. 0ssistant 4ederal "eser(e 0gents
$ubKect to the a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem, the 4ederal reser(e agent shall a##oint one or more
assistants. $uch assistants, who shall be #ersons of tested banking e3#erience, shall assist the 4ederal reser(e agent in the
#erformance of his duties and shall also ha(e #ower to act in his name and stead during his absence or disability. !he Board of
@o(ernors of the 4ederal "eser(e $ystem shall reDuire such bonds of the assistant 4ederal reser(e agents as it may deem necessary
for the #rotection of the 'nited $tates. 0ssistants to the 4ederal reser(e agent shall recei(e an annual com#ensation, to be fi3ed and
#aid in the same manner as that of the 4ederal reser(e agent.
M,6 '$1 .</. 0s added by act of ;une 6,, ,-,: (+< $tat. 6.6).N
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66. 1om#ensation and B3#enses of Directors, Ffficers, and Bm#loyees
Directors of 4ederal reser(e banks shall recei(e, in addition to any com#ensation otherwise #ro(ided, a reasonable allowance for
necessary e3#enses in attending meetings of their res#ecti(e boards, which amounts shall be #aid by the res#ecti(e 4ederal reser(e
banks. 0ny com#ensation that may be #ro(ided by boards of directors of 4ederal reser(e banks for directors, officers or em#loyees
shall be subKect to the a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem.
M,6 '$1 .<:. Part of original 4ederal "eser(e 0ct5 not amended.N
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6.. *eetings of Directors Pending Frgani2ation
!he "eser(e Bank Frgani2ation 1ommittee may, in organi2ing 4ederal reser(e banks, call such meetings of bank directors in the
se(eral districts as may be necessary to carry out the #ur#oses of this 0ct, and may e3ercise the functions herein conferred u#on the
chairman of the board of directors of each 4ederal reser(e bank #ending the com#lete organi2ation of such bank.
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6+. !erms of Directors5 Aacancies
0t the first meeting of the full board of directors of each 4ederal reser(e bank, it shall be the duty of the directors of classes 0, B and 1,
res#ecti(ely, to designate one of the members of each class whose term of office shall e3#ire in one year from the first of ;anuary
nearest to date of such meeting, one whose term of office shall e3#ire at the end of two years from said date, and one whose term of
office shall e3#ire at the end of three years from said date. !hereafter e(ery director of a 4ederal reser(e bank chosen as hereinbefore
#ro(ided shall hold office for a term of three years. Aacancies that may occur in the se(eral classes of directors of 4ederal reser(e
banks may be filled in the manner #ro(ided for the original selection of such directors, such a##ointees to hold office for the une3#ired
terms of their #redecessors.
M,6 '$1 .<9. Part of original 4ederal "eser(e 0ct5 not amended.N
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%ection K. %tock Issues, Increase and Cecrease of (apital
,. 0mount of $hares5 8ncrease and Decrease of 1a#ital5 $urrender and 1ancellation of $tock
!he ca#ital stock of each 4ederal reser(e bank shall be di(ided into shares of G,<< each. !he outstanding ca#ital stock shall be
increased from time to time as member banks increase their ca#ital stock and sur#lus or as additional banks become members, and
may be decreased as member banks reduce their ca#ital stock or sur#lus or cease to be members. $hares of the ca#ital stock of
4ederal reser(e banks owned by member banks shall not be transferred or hy#othecated. When a member bank increases its ca#ital
stock or sur#lus, it shall thereu#on subscribe for an additional amount of ca#ital stock of the 4ederal reser(e bank of its district eDual to
/ #er centum of the said increase, one-half of said subscri#tion to be #aid in the manner hereinbefore #ro(ided for original subscri#tion,
and one-half subKect to call of the Board of @o(ernors of the 4ederal "eser(e $ystem. 0 bank a##lying for stock in a 4ederal reser(e
bank at any time after the organi2ation thereof must subscribe for an amount of the ca#ital stock of the 4ederal reser(e bank eDual to /
#er centum of the #aid-u# ca#ital stock and sur#lus of said a##licant bank, #aying therefor its #ar (alue #lus one-half of , #er centum a
month from the #eriod of the last di(idend. When a member bank reduces its ca#ital stock or sur#lus it shall surrender a #ro#ortionate
amount of its holdings in the ca#ital stock of said 4ederal "eser(e bank. 0ny member bank which holds ca#ital stock of a 4ederal
"eser(e bank in e3cess of the amount reDuired on the basis of / #er centum of its #aid-u# ca#ital stock and sur#lus shall surrender
such e3cess stock. When a member bank (oluntarily liDuidates it shall surrender all of its holdings of the ca#ital stock of said 4ederal
"eser(e bank and be released from its stock subscri#tion not #re(iously called. 8n any such case the shares surrendered shall be
canceled and the member bank shall recei(e in #ayment therefor, under regulations to be #rescribed by the Board of @o(ernors of the
4ederal "eser(e $ystem, a sum eDual to its cash-#aid subscri#tions on the shares surrendered and one-half of , #er centum a month
from the #eriod of the last di(idend, not to e3ceed the book (alue thereof, less any liability of such member bank to the 4ederal
"eser(e bank.
M,6 '$1 69:. 0s amended by act of 0ug. 6., ,-.> (+- $tat. :,.).N
%ection L. Insolvency of ember )anks
,. 8nsol(ency of *ember Banks
8f any member bank shall be declared insol(ent and a recei(er a##ointed therefor, the stock held by it in said 4ederal reser(e bank
shall be canceled, without im#airment of its liability, and all cash-#aid subscri#tions on said stock, with one-half of , #er centum #er
month from the #eriod of last di(idend, if earned, not to e3ceed the book (alue thereof, shall be first a##lied to all debts of the insol(ent
member bank to the 4ederal reser(e bank, and the balance, if any, shall be #aid to the recei(er of the insol(ent bank.
M,6 '$1 699. 0s amended by act of 0#ril 6., ,-.< (+/ $tat. 6><).N
6. =ational Bank Discontinuing Banking F#erations
8f any national bank which has not gone into liDuidation as #ro(ided in section >66< of the "e(ised $tatutes ('nited $tates 1ode, title
,6, section ,9,) and for which a recei(er has not already been a##ointed for other lawful cause, shall discontinue its banking
o#erations for a #eriod of si3ty days the 1om#troller of the 1urrency may, if he deems it ad(isable, a##oint a recei(er for such bank.
!he stock held by the said national bank in the 4ederal reser(e bank of its district shall thereu#on be canceled and said national bank
shall recei(e in #ayment therefor, under regulations to be #rescribed by the Board of @o(ernors of the 4ederal "eser(e $ystem, a sum
eDual to its cash-#aid subscri#tions on the shares canceled and one-half of , #er centum a month from the #eriod of the last di(idend, if
earned, not to e3ceed the book (alue thereof, less any liability of such national bank to the 4ederal reser(e bank.
M,6 '$1 699. 0s added by act of 0#ril 6., ,-.< (+/ $tat. 6><). 0s amended by act of 0ug. 6., ,-.> (+- $tat. :,.).N
%ection >. Civision of 3arnings
Di(idends and $ur#lus 4und of "eser(e Banks
(a"
,.
0. 0fter all necessary e3#enses of a 4ederal reser(e bank ha(e been #aid or #ro(ided for, the stockholders of the bank
shall be entitled to recei(e an annual di(idend of / #ercent on #aid-in ca#ital stock.
B. !he entitlement to di(idends under sub#aragra#h (0) shall be cumulati(e.
6. !hat #ortion of net earnings of each 4ederal reser(e bank which remains after di(idend claims under sub#aragra#h (,)(0)
ha(e been fully met shall be de#osited in the sur#lus fund of the bank.
(b" $ransfer for fis+al !ear *>>>.
,. !he 4ederal reser(e banks shall transfer from the sur#lus funds of such banks to the Board of @o(ernors of the 4ederal
"eser(e $ystem for transfer to the $ecretary of the !reasury for de#osit in the general fund of the !reasury, a total amount of
G.,:>6,<<<,<<< in fiscal year 6<<<.
6. Ff the total amount reDuired to be #aid by the 4ederal reser(e banks under #aragra#h (,) for fiscal year 6<<<, the
Board shall determine the amount each such bank shall #ay in such fiscal year.
.. During fiscal year 6<<<, no 4ederal reser(e bank may re#lenish such bankIs sur#lus fund by the amount of any
transfer by such bank under #aragra#h (,).
M,6 '$1 69-. 0s amended by acts of *arch ., ,-,- (+< $tat. ,.,+)5 ;une ,/, ,-.. (+9 $tat. ,/.)5 0ug. ,<, ,--. (,<: $tat. ..:)5 $e#t. 6., ,--+ (,<9
$tat. 66-,)5 and =o(. 6-, ,--- (,,. $tat. ,><,0-.<+), which added this subsection (b) but failed to redesignate e3isting subsection (b) (,6 '$1 6-<).N
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'se of Barnings !ransferred to the !reasury
(b" !he net earnings deri(ed by the 'nited $tates from 4ederal reser(e banks shall, in the discretion of the $ecretary, be used
to su##lement the gold reser(e held against outstanding 'nited $tates notes, or shall be a##lied to the reduction of the
outstanding bonded indebtedness of the 'nited $tates under regulations to be #rescribed by the $ecretary of the !reasury.
$hould a 4ederal reser(e bank be dissol(ed or go into liDuidation, any sur#lus remaining, after the #ayment of all debts,
di(idend reDuirements as hereinbefore #ro(ided, and the #ar (alue of the stock, shall be #aid to and become the #ro#erty of
the 'nited $tates and shall be similarly a##lied.
M,6 '$1 6-<. Part of original 4ederal "eser(e 0ct5 not amended. Designated subsection (b) by act of 0ug. ,<, ,--. (,<: $tat. ..:).N
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B3em#tion from !a3ation
(+" 4ederal reser(e banks, including the ca#ital stock and sur#lus therein, and the income deri(ed therefrom shall be e3em#t
from 4ederal, $tate, and local ta3ation, e3ce#t ta3es u#on real estate.
M,6 '$1 >.,. Part of original 4ederal "eser(e 0ct5 but in effect amended by ., '$1 .,6+(a), which reads as follows7
H(a) $tocks and obligations of the 'nited $tates @o(ernment are e3em#t from ta3ation by a $tate or #olitical subdi(ision of a $tate. !he e3em#tion
a##lies to each form of ta3ation that would reDuire the obligation, the interest on the obligation, or both, to be considered in com#uting a ta3, e3ce#t--
(,) a nondiscriminatory franchise ta3 or another non#ro#erty ta3 instead of a franchise ta3, im#osed on a cor#oration5 and
(6) an estate or inheritance ta3.H
MDesignated subsection (c) by act of 0ug. ,<, ,--. (,<: $tat. ..9).N
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%ection <. (onversion of %tate )anks into Bational )anks
,. 1on(ersion of $tate Banks into =ational Banks
$ection fifty-one hundred and fifty-four, 'nited $tates "e(ised $tatutes, is hereby amended to read as follows7
0ny bank incor#orated by s#ecial law of any $tate or of the 'nited $tates or organi2ed under the general laws of any $tate or of the
'nited $tates and ha(ing an unim#aired ca#ital sufficient to entitle it to become a national banking association under the #ro(isions of
the e3isting laws may, by the (ote of the shareholders owning not less than fifty-one #er centum of the ca#ital stock of such bank or
banking association, with the a##ro(al of the 1om#troller of the 1urrency be con(erted into a national banking association, with any
name a##ro(ed by the 1om#troller of the 1urrency.
M,6 '$1 .>. Part of original 4ederal "eser(e 0ct5 not amended.N
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6. Frgani2ation of =ew Bank5 0mount of $hares5 Powers and Duties
#ro,ie) howe,er, !hat said con(ersion shall not be in contra(ention of the $tate law. 8n such case the articles of association and
organi2ation certificate may be e3ecuted by a maKority of the directors of the bank or banking institution, and the certificate shall declare
that the owners of fifty-one #er centum of the ca#ital stock ha(e authori2ed the directors to make such certificate and to change or
con(ert the bank or banking institution into a national association. 0 maKority of the directors, after e3ecuting the articles of association
and the organi2ation certificate, shall ha(e #ower to e3ecute all other #a#ers and to do whate(er may be reDuired to make its
organi2ation #erfect and com#lete as a national association. !he shares of any such bank may continue to be for the same amount
each as they were before the con(ersion, and the directors may continue to be directors of the association until others are elected or
a##ointed in accordance with the #ro(isions of the statutes of the 'nited $tates. When the 1om#troller has gi(en to such bank or
banking association a certificate that the #ro(isions of this 0ct ha(e been com#lied with, such bank or banking association, and all its
stockholders, officers, and em#loyees, shall ha(e the same #owers and #ri(ileges, and shall be subKect to the same duties, liabilities,
and regulations, in all res#ects, as shall ha(e been #rescribed by the 4ederal "eser(e 0ct and by the =ational Banking 0ct for
associations originally organi2ed as national banking associations.
M,6 '$1 .>. Part of original 4ederal "eser(e 0ct5 not amended.N
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.. "etention of 0ssets by 1on(erting Bank
!he 1om#troller of the 1urrency may, in his discretion and subKect to such conditions as he may #rescribe, #ermit such con(erting
bank to retain and carry at a (alue determined by the 1om#troller such of the assets of such con(erting bank as do not conform to the
legal reDuirements relati(e to assets acDuired and held by national banking associations.
M,6 '$1 .>. 0s added by act of 0ug. 6., ,-.> (+- $tat. :,,).N
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%ection 0. %tate )anks as embers
,. 0##lications for *embershi# by $tate Banks
0ny bank incor#orated by s#ecial law of any $tate, o#erating under the 1ode of Law for the District of 1olumbia, or organi2ed under
the general laws of any $tate or of the 'nited $tates, including *orris Plan banks and other incor#orated banking institutions engaged
in similar business, desiring to become a member of the 4ederal "eser(e $ystem, may make a##lication to the Board of @o(ernors of
the 4ederal "eser(e $ystem, under such rules and regulations as it may #rescribe, for the right to subscribe to the stock of the 4ederal
reser(e bank organi2ed within the district in which the a##lying bank is located. $uch a##lication shall be for the same amount of stock
that the a##lying bank would be reDuired to subscribe to as a national bank. 4or the #ur#oses of membershi# of any such bank the
terms Hca#italH and Hca#ital stockH shall include the amount of outstanding ca#ital notes and debentures legally issued by the a##lying
bank and #urchased by the "econstruction 4inance 1or#oration. !he Board of @o(ernors of the 4ederal "eser(e $ystem, subKect to
the #ro(isions of this 0ct and to such conditions as it may #rescribe #ursuant thereto, may #ermit the a##lying bank to become a
stockholder of such 4ederal reser(e bank.
M,6 '$1 .6,. 0s amended by act of ;une 6,, ,-,: (+< $tat. 6.6), which com#letely re(ised this section5 and by acts of 4eb. 6>, ,-6: (++ $tat. ,66-)5 ;une ,/,
,-.. (+9 $tat. ,/+)5 ;une ,/, ,-.+ (+9 $tat. -:,)5 and Fct ,., 6<</ (,6< $tat. 6<<,). L 4or admission to membershi# of mutual sa(ings banks, see #aragra#h
,/.N
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6. 1ontinued *embershi# in 4ederal "eser(e $ystem
'#on the con(ersion of a national bank into a $tate bank, or the merger or consolidation of a national bank with a $tate bank which is
not a member of the 4ederal "eser(e $ystem, the resulting or continuing $tate bank may be admitted to membershi# in the 4ederal
"eser(e $ystem by the Board of @o(ernors of the 4ederal "eser(e $ystem in accordance with the #ro(isions of this section, but,
otherwise, the 4ederal "eser(e bank stock owned by the national bank shall be canceled and #aid for as #ro(ided in section > of this
0ct. '#on the merger or consolidation of a national bank with a $tate member bank under a $tate charter, the membershi# of the $tate
bank in the 4ederal "eser(e $ystem shall continue.
M,6 '$1 .6,. 0s added by act of 0ug. ,:, ,->< (/+ $tat. +>9).N
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.. Branches of $tate *ember Banks
0ny such $tate bank which, at the date of the a##ro(al of this 0ct, has established and is o#erating a branch or branches in conformity
with the $tate law, may retain and o#erate the same while remaining or u#on becoming a stockholder of such 4ederal reser(e bank5
but no such $tate bank may retain or acDuire stock in a 4ederal reser(e bank e3ce#t u#on relinDuishment of any branch or branches
established after the date of the a##ro(al of this 0ct beyond the limits of the city, town, or (illage in which the #arent bank is situated.
#ro,ie) howe,er) !hat nothing herein contained shall #re(ent any $tate member bank from establishing and o#erating branches in
the 'nited $tates or any de#endency or insular #ossession thereof or in any foreign country, on the same terms and conditions and
subKect to the same limitations and restrictions as are a##licable to the establishment of branches by national banks e3ce#t that the
a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem, instead of the 1om#troller of the 1urrency, shall be obtained
before any $tate member bank may hereafter establish any branch and before any $tate bank hereafter admitted to membershi# may
retain any branch established after 4ebruary 6>, ,-6:, beyond the limits of the city, town, or (illage in which the #arent bank is situated.
!he a##ro(al of the Board shall likewise be obtained before any $tate member bank may establish any new branch within the limits of
any such city, town, or (illage.
M,6 '$1 .6,. 0s added by act of 4eb. 6>, ,-6: (++ $tat. ,66-)5 and amended by acts of ;une ,/, ,-.. (+9 $tat. ,/+)5 0ug. 6., ,-.> (+- $tat. :6,)5 ;uly ,>,
,->6 (// $tat. /..)5 and Fct. .<, 6<<+ (,,9 $tat. 66.6). !he act referred to in this #aragra#h was a##ro(ed 4eb. 6>, ,-6:. 4or #ro(isions go(erning domestic
branches of national banks, see section >,>>, "e(ised $tatutes5 for #ro(isions go(erning foreign branches, see section 6>, this act.N
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+. 4inancial 1ondition, *anagement, and Powers
8n acting u#on such a##lications the Board of @o(ernors of the 4ederal "eser(e $ystem shall consider the financial condition of the
a##lying bank, the general character of its management, and whether or not the cor#orate #owers e3ercised are consistent with the
#ur#oses of this 0ct.
M,6 '$1 .66. 0s added by act of ;une 6,, ,-,: (+< $tat. 6..), which com#letely re(ised this section.N
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>. Payment of $ubscri#tion
Whene(er the Board of @o(ernors of the 4ederal "eser(e $ystem shall #ermit the a##lying bank to become a stockholder in the
4ederal reser(e bank of the district its stock subscri#tion shall be #ayable on call of the Board of @o(ernors of the 4ederal "eser(e
$ystem, and stock issued to it shall be subKect to the #ro(isions of this 0ct.
M,6 '$1 .6.. 0s amended by act of ;une 6,, ,-,: (+< $tat. 6..), which com#letely re(ised this section.N
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/. Pro(ision of Law to Be 1om#lied with5 "e#orts of 1ondition
0ll banks admitted to membershi# under authority of this section shall be reDuired to com#ly with the reser(e and ca#ital reDuirements
of this 0ct, to conform to those #ro(isions of law im#osed on national banks which #rohibit such banks from lending on or #urchasing
their own stock and which relate to the withdrawal or im#airment of their ca#ital stock, and to conform to the #ro(isions of sections
>,--(b) and >6<+ of the "e(ised $tatutes with res#ect to the #ayment of di(idends5 e3ce#t that any reference in any such #ro(ision to
the 1om#troller of the 1urrency shall be deemed for the #ur#oses of this sentence to be a reference to the Board of @o(ernors of the
4ederal "eser(e $ystem. $uch banks and the officers, agents, and em#loyees thereof shall also be subKect to the #ro(isions of and to
the #enalties #rescribed by sections ..+, />/, and ,<<> of !itle ,9, 'nited $tates 1ode, and shall be reDuired to make re#orts of
condition and of the #ayment of di(idends to the 4ederal "eser(e bank of which they become a member. =ot less than three of such
re#orts shall be made annually on call of the 4ederal "eser(e bank on dates to be fi3ed by the Board of @o(ernors of the 4ederal
"eser(e $ystem. 0ny bank which (0) maintains #rocedures reasonably ada#ted to a(oid any inad(ertent error and, unintentionally and
as a result of such an error, fails to make or #ublish any re#ort reDuired under this #aragra#h, within the #eriod of time s#ecified by the
Board, or submits or #ublishes any false or misleading re#ort or information, or (B) inad(ertently transmits or #ublishes any re#ort
which is minimally late, shall be subKect to a #enalty of not more than G6,<<< for each day during which such failure continues or such
false or misleading information is not corrected. !he bank shall ha(e the burden of #ro(ing that an error was inad(ertent and that a
re#ort was inad(ertently transmitted or #ublished late. 0ny bank which fails to make or #ublish such re#orts within the #eriod of time
s#ecified by the Board, or submits or #ublishes any false or misleading re#ort or information, in a manner not described in the 6nd
#receding sentence shall be subKect to a #enalty of not more than G6<,<<< for each day during which such failure continues or such
false or misleading information is not corrected. =otwithstanding the #receding sentence, if any bank knowingly or with reckless
disregard for the accuracy of any information or re#ort described in such sentence submits or #ublishes any false or misleading re#ort
or information, the Board may assess a #enalty of not more than G,,<<<,<<< or , #ercent of total assets of such bank, whiche(er is
less, #er day for each day during which such failure continues or such false or misleading information is not corrected. 0ny #enalty
im#osed under any of the + #receding sentences shall be assessed and collected by the Board in the manner #ro(ided in
sub#aragra#hs (B), (4), (@), and (8) of section 9(i)(6) of the 4ederal De#osit 8nsurance 0ct (for #enalties im#osed under such section)
and any such assessment (including the determination of the amount of the #enalty) shall be subKect to the #ro(isions of such section.
0ny bank against which any #enalty is assessed under this subsection shall be afforded an agency hearing if such bank submits a
reDuest for such hearing within 6< days after the issuance of the notice of assessment. $ection 9(h) of the 4ederal De#osit 8nsurance
0ct shall a##ly to any #roceeding under this #aragra#h. $uch re#orts of condition shall be in such form and shall contain such
information as the Board of @o(ernors of the 4ederal "eser(e $ystem may reDuire and shall be #ublished.
M,6 '$1 .6+. 0s amended by act of ;une 6,, ,-,: (+< $tat. 6..), which com#letely re(ised this section5 and by acts of 0ug. 6., ,-.> (+- $tat. :,.)5 $e#t. .,
,->+ (/9 $tat. ,6./)5 $e#t. 9, ,->- (:. $tat. +//)5 0ug. -, ,-9- (,<. $tat. +9<)5 and $e#t. 6., ,--+ (,<9 $tat. 66,9). 4or #ro(isions co(ering loans on or
#urchase of their own stock by national banks, see section >6<,, "e(ised $tatutes (,6 '$1 9.)5 for #ro(isions co(ering withdrawal of ca#ital or #ayment of
unearned di(idends by national banks, see sections >6<+ and >,--, "e(ised $tatutes (,6 '$1 >/ and /<)5 for #ro(isions relating to im#airment of ca#ital of
national banks, see section >6<>, "e(ised $tatutes (,6 '$1 >>) and section .+> of Banking 0ct of ,-.> (,6 '$1 >,b-,).N
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:. B3aminations
0s a condition of membershi# such banks shall likewise be subKect to e3aminations made by direction of the Board of @o(ernors of the
4ederal "eser(e $ystem or of the 4ederal reser(e bank by e3aminers selected or a##ro(ed by the Board of @o(ernors of the 4ederal
"eser(e $ystem.
M,6 '$1 .6>. 0s added by act of ;une 6,, ,-,: (+< $tat. 6..), which com#letely re(ised this section.N
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9. 0cce#tance of $tate B3aminations5 B3#enses5 "e#orts of B3aminations and 1onfidential $u#er(isory 8nformation
Whene(er the directors of the 4ederal reser(e bank shall a##ro(e the e3aminations made by the $tate authorities, such e3aminations
and the re#orts thereof may be acce#ted in lieu of e3aminations made by e3aminers selected or a##ro(ed by the Board of @o(ernors
of the 4ederal "eser(e $ystem7 #ro,ie) howe,er) !hat when it deems it necessary the board may order s#ecial e3aminations by
e3aminers of its own selection and shall in all cases a##ro(e the form of the re#ort. !he e3#enses of all e3aminations, other than those
made by $tate authorities, may, in the discretion of the Board of @o(ernors of the 4ederal "eser(e $ystem, be assessed against the
banks e3amined and, when so assessed, shall be #aid by the banks e3amined. !he Board of @o(ernors of the 4ederal "eser(e
$ystem, at its discretion, may furnish any re#ort of e3amination or other confidential su#er(isory information concerning any $tate
member bank or other entity e3amined under any other authority of the Board, to any 4ederal or $tate agency or authority with
su#er(isory or regulatory authority o(er the e3amined entity, to any officer, director, or recei(er of the e3amined entity, and to any other
#erson that the Board determines to be #ro#er.
M,6 '$1 .6/. 0s added by act of ;une 6,, ,-,: (+< $tat. 6..), which com#letely re(ised this section5 and amended by acts of ;une 6/, ,-.< (+/ $tat. 9,+) and
=o(. ,6, ,--- (,,. $tat. ,+:>).N
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-. 4orfeiture of *embershi#
8f at any time it shall a##ear to the Board of @o(ernors of the 4ederal "eser(e $ystem that a member bank has failed to com#ly with
the #ro(isions of this section or the regulations of the Board of @o(ernors of the 4ederal "eser(e $ystem made #ursuant thereto, or
has ceased to e3ercise banking functions without a recei(er or liDuidating agent ha(ing been a##ointed therefor, it shall be within the
#ower of the board after hearing to reDuire such bank to surrender its stock in the 4ederal reser(e bank and to forfeit all rights and
#ri(ileges of membershi#. !he Board of @o(ernors of the 4ederal "eser(e $ystem may restore membershi# u#on due #roof of
com#liance with the conditions im#osed by this section.
M,6 '$1 .6:. 0s amended by act of ;une 6,, ,-,: (+< $tat. 6..), which com#letely re(ised this section5 and further amended by act of 0#ril 6., ,-.< (+/ $tat.
6>,).N
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,<. Aoluntary Withdrawal from *embershi#
0ny $tate bank or trust com#any desiring to withdraw from membershi# in a 4ederal reser(e bank may do so, after si3 monthsI written
notice shall ha(e been filed with the Board of @o(ernors of the 4ederal "eser(e $ystem, u#on the surrender and cancellation of all of
its holdings of ca#ital stock in the 4ederal reser(e bank7 #ro,ie) !hat the Board of @o(ernors of the 4ederal "eser(e $ystem, in its
discretion and subKect to such conditions as it may #rescribe, may wai(e such si3 monthsI notice in indi(idual cases and may #ermit
any such $tate bank or trust com#any to withdraw from membershi# in a 4ederal reser(e bank #rior to the e3#iration of si3 months
from the date of the written notice of its intention to withdraw7 #ro,ie) howe,er) !hat no 4ederal reser(e bank shall, e3ce#t under
e3#ress authority of the Board of @o(ernors of the 4ederal "eser(e $ystem, cancel within the same calendar year more than twenty-
fi(e #er centum of its ca#ital stock for the #ur#ose of effecting (oluntary withdrawals during that year. 0ll such a##lications shall be
dealt with in the order in which they are filed with the board. Whene(er a member bank shall surrender its stock holdings in a 4ederal
reser(e bank, or shall be ordered to do so by the Board of @o(ernors of the 4ederal "eser(e $ystem, under authority of law, all of its
rights and #ri(ileges as a member bank shall thereu#on cease and determine, and after due #ro(ision has been made for any
indebtedness due or to become due to the 4ederal reser(e bank it shall be entitled to a refund of its cash #aid subscri#tion with interest
at the rate of one-half of one #er centum #er month from the date of last di(idend, if earned, the amount refunded in no e(ent to e3ceed
the book (alue of the stock at that time, and shall likewise be entitled to re#ayment of de#osits and of any other balance due from the
4ederal reser(e bank.
M,6 '$1 .69. 0s added by act of ;une 6,, ,-,: (+< $tat. 6..), which com#letely re(ised this section5 and amended by act of 0#ril ,:, ,-.< (+/ $tat. ,:<).N
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,,. 1a#ital "eDuired for *embershi#
=o a##lying bank shall be admitted to membershi# unless it #ossesses ca#ital stock and sur#lus which, in the Kudgment of the Board of
@o(ernors of the 4ederal "eser(e $ystem, are adeDuate in relation to the character and condition of its assets and to its e3isting and
#ros#ecti(e de#osit liabilities and other cor#orate res#onsibilities7 #ro,ie) !hat no bank engaged in the business of recei(ing
de#osits other than trust funds, which does not #ossess ca#ital stock and sur#lus in an amount eDual to that which would be reDuired
for the establishment of a national banking association in the #lace in which it is located, shall be admitted to membershi# unless it is,
or has been, a##ro(ed for de#osit insurance under the 4ederal De#osit 8nsurance 0ct. !he ca#ital stock of a $tate member bank shall
not be reduced e3ce#t with the #rior consent of the Board.
M,6 '$1 .6-. 0s amended by acts of ;une 6,, ,-,: (+< $tat. 6.+), which com#letely re(ised this section5 *arch +, ,-6. (+6 $tat. ,+:9)5 ;une ,/, ,-.. (+9
$tat. ,9>)5 and ;uly ,>, ,->6 (// $tat. /..). 4or #ro(isions relating to minimum ca#ital and sur#lus of national banks, see section >,.9, "e(ised $tatutes.N
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,6. Wai(er of *embershi# "eDuirements as to 8nsured Banks
8n order to facilitate the admission to membershi# in the 4ederal "eser(e $ystem of any $tate bank which is reDuired under subsection
(y) of section ,6B of this 0ct to become a member of the 4ederal "eser(e $ystem in order to be an insured bank or continue to ha(e
any #art of its de#osits insured under such section ,6B, the Board of @o(ernors of the 4ederal "eser(e $ystem may wai(e in whole or
in #art the reDuirements of this section relating to the admission of such bank to membershi#7 #ro,ie) !hat, if such bank is admitted
with a ca#ital less than that reDuired for the organi2ation of a national bank in the same #lace and its ca#ital and sur#lus are not, in the
Kudgment of the Board of @o(ernors of the 4ederal "eser(e $ystem, adeDuate in relation to its liabilities to de#ositors and other
creditors, the said Board may, in its discretion, reDuire such bank to increase its ca#ital and sur#lus to such amount as the Board may
deem necessary within such #eriod #rescribed by the Board as in its Kudgment shall be reasonable in (iew of all the circumstances7
#ro,ie) howe,er) !hat no such bank shall be reDuired to increase its ca#ital to an amount in e3cess of that reDuired for the
organi2ation of a national bank in the same #lace.
M4ormerly ,6 '$1 .6-a, as added by act of 0ug. 6., ,-.> (+- $tat. :<+). Fmitted from the '.$. 1ode. !he #ro(ision of section ,6B(y) reDuiring membershi# in
4ederal "eser(e $ystem was re#ealed by act of ;une 6<, ,-.- (>. $tat. 9+6)5 and all of section ,6B was withdrawn and enacted as a se#arate 4ederal De#osit
8nsurance 0ct by act of $e#t. 6,, ,->< (/+ $tat. 9:.).N
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,.. Laws to Which $ubKect
Banks becoming members of the 4ederal "eser(e $ystem under authority of this section shall be subKect to the #ro(isions of this
section and to those of this 0ct which relate s#ecifically to member banks, but shall not be subKect to e3amination under the #ro(isions
of the first two #aragra#hs of section fifty-two hundred and forty of the "e(ised $tatutes as amended by section twenty-one of this 0ct.
$ubKect to the #ro(isions of this 0ct and to the regulations of the board made #ursuant thereto, any bank becoming a member of the
4ederal "eser(e $ystem shall retain its full charter and statutory rights as a $tate bank or trust com#any, and may continue to e3ercise
all cor#orate #owers granted it by the $tate in which it was created, and shall be entitled to all #ri(ileges of member banks, e3ce#t that
the Board of @o(ernors of the 4ederal "eser(e $ystem may limit the acti(ities of $tate member banks and subsidiaries of $tate
member banks in a manner consistent with section 6+ of the 4ederal De#osit 8nsurance 0ct. =o 4ederal reser(e bank shall be
#ermitted to discount for any $tate bank or trust com#any notes, drafts, or bills of e3change of any one borrower who is liable for
borrowed money to such $tate bank or trust com#any in an amount greater than that which could be borrowed lawfully from such $tate
bank or trust com#any were it a national banking association. !he 4ederal reser(e bank, as a condition of the discount of notes, drafts,
and bills of e3change for such $tate bank or trust com#any, shall reDuire a certificate or guaranty to the effect that the borrower is not
liable to such bank in e3cess of the amount #ro(ided by this section, and will not be #ermitted to become liable in e3cess of this amount
while such notes, drafts, or bills of e3change are under discount with the 4ederal reser(e bank.
M,6 '$1 ..<. 0s added by act of ;une 6,, ,-,: (+< $tat. 6.+), which com#letely re(ised this section5 and amended by acts of ;uly ,, ,-66 (+6 $tat. 96,) and
Dec. ,-, ,--, (,<> $tat. 6.>.). 0s to limitations on loans by national banks to one #erson, see section >6<<, "e(ised $tatutes.N
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,+. 4alse 1ertification of 1hecks
8t shall be unlawful for any officer, clerk, or agent of any bank admitted to membershi# under authority of this section to certify any
check drawn u#on such bank unless the #erson or com#any drawing the check has on de#osit therewith at the time such check is
certified an amount of money eDual to the amount s#ecified in such check. 0ny check so certified by duly authori2ed officers shall be a
good and (alid obligation against such bank, but the act of any such officer, clerk, or agent in (iolation of this section may subKect such
bank to a forfeiture of its membershi# in the 4ederal "eser(e $ystem u#on hearing by the Board of @o(ernors of the 4ederal "eser(e
$ystem.
M,6 '$1 ..,. 0s added by act of ;une 6,, ,-,: (+< $tat. 6.+), which com#letely re(ised this section. 4or additional #ro(isions co(ering false certification of
checks by officers of 4ederal "eser(e Banks and member banks, see also section >6<9, "e(ised $tatutes and ,9 '$1 ,<<+.N
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,>. @o(ernment De#ositaries and 4inancial 0gents
0ll banks or trust com#anies incor#orated by s#ecial law or organi2ed under the general laws of any $tate, which are members of the
4ederal "eser(e $ystem, when designated for that #ur#ose by the $ecretary of the !reasury, shall be de#ositaries of #ublic money,
under such regulations as may be #rescribed by the $ecretary5 and they may also be em#loyed as financial agents of the @o(ernment5
and they shall #erform all such reasonable duties, as de#ositaries of #ublic money and financial agents of the @o(ernment, as may be
reDuired of them. !he $ecretary of the !reasury shall reDuire of the banks and trust com#anies thus designated satisfactory security,
by the de#osit of 'nited $tates bonds or otherwise, for the safe kee#ing and #rom#t #ayment of the #ublic money de#osited with them
and for the faithful #erformance of their duties as financial agents of the @o(ernment.
M,6 '$1 ..6. 0s added by act of *ay :, ,-69 (+> $tat. +-6).N
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,/. 0dmission to *embershi# of *utual $a(ings Banks
0ny mutual sa(ings bank ha(ing no ca#ital stock (including any other banking institution the ca#ital of which consists of weekly or other
time de#osits which are segregated from all other de#osits and are regarded as ca#ital stock for the #ur#oses of ta3ation and the
declaration of di(idends), but ha(ing sur#lus and undi(ided #rofits not less than the amount of ca#ital reDuired for the organi2ation of a
national bank in the same #lace, may a##ly for and be admitted to membershi# in the 4ederal "eser(e $ystem in the same manner
and subKect to the same #ro(isions of law as $tate banks and trust com#anies, e3ce#t that any such sa(ings banks shall subscribe for
ca#ital stock of the 4ederal reser(e bank in an amount eDual to si3-tenths of , #er centum of its total de#osit liabilities as shown by the
most recent re#ort of e3amination of such sa(ings bank #receding its admission to membershi#. !hereafter such subscri#tion shall be
adKusted semiannually on the same #ercentage basis in accordance with rules and regulations #rescribed by the Board of @o(ernors of
the 4ederal "eser(e $ystem. 8f any such mutual sa(ings bank a##lying for membershi# is not #ermitted by the laws under which it was
organi2ed to #urchase stock in a 4ederal reser(e bank, it shall, u#on admission to the system, de#osit with the 4ederal reser(e bank
an amount eDual to the amount which it would ha(e been reDuired to #ay in on account of a subscri#tion to ca#ital stock. !hereafter
such de#osit shall be adKusted semiannually in the same manner as subscri#tions for stock. $uch de#osits shall be subKect to the same
conditions with res#ect to re#ayment as amounts #aid u#on subscri#tions to ca#ital stock by other member banks and the 4ederal
reser(e bank shall #ay interest thereon at the same rate as di(idends are actually #aid on outstanding shares of stock of such 4ederal
reser(e bank. 8f the laws under which any such sa(ings bank was organi2ed be amended so as to authori2e mutual sa(ings banks to
subscribe for 4ederal reser(e bank stock, such sa(ings bank shall thereu#on subscribe for the a##ro#riate amount of stock in the
4ederal reser(e bank, and the de#osit hereinbefore #ro(ided for in lieu of #ayment u#on ca#ital stock shall be a##lied u#on such
subscri#tion. 8f the laws under which any such sa(ings bank was organi2ed be not amended at the ne3t session of the legislature
following the admission of such sa(ings bank to membershi# so as to authori2e mutual sa(ings banks to #urchase 4ederal reser(e
bank stock, or if such laws be so amended and such bank fail within si3 months thereafter to #urchase such stock, all of its rights and
#ri(ileges as a member bank shall be forfeited and its membershi# in the 4ederal "eser(e $ystem shall be terminated in the manner
#rescribed elsewhere in this section with res#ect to $tate member banks and trust com#anies. Bach such mutual sa(ings bank shall
com#ly with all the #ro(isions of law a##licable to $tate member banks and trust com#anies, with the regulations of the Board of
@o(ernors of the 4ederal "eser(e $ystem and with the conditions of membershi# #rescribed for such sa(ings bank at the time of
admission to membershi#, e3ce#t as otherwise hereinbefore #ro(ided with res#ect to ca#ital stock.
M,6 '$1 .... 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/+). 0s to the amount of ca#ital reDuired for the organi2ation of a national bank, see section >,.9,
"e(ised $tatutes.N
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,:. "e#orts of 0ffiliates
Bach bank admitted to membershi# under this section shall obtain from each of its affiliates other than member banks and furnish to
the 4ederal reser(e bank of its district and to the Board of @o(ernors of the 4ederal "eser(e $ystem not less than three re#orts during
each year. $uch re#orts shall be in such form as the Board of @o(ernors of the 4ederal "eser(e $ystem may #rescribe, shall be
(erified by the oath or affirmation of the #resident or such other officer as may be designated by the board of directors of such affiliate
to (erify such re#orts, and shall disclose the information hereinafter #ro(ided for as of dates identical with those fi3ed by the Board of
@o(ernors of the 4ederal "eser(e $ystem for re#orts of the condition of the affiliated member bank. Bach such re#ort of an affiliate
shall be transmitted as herein #ro(ided at the same time as the corres#onding re#ort of the affiliated member bank, e3ce#t that the
Board of @o(ernors of the 4ederal "eser(e $ystem may, in its discretion, e3tend such time for good cause shown. Bach such re#ort
shall contain such information as in the Kudgment of the Board of @o(ernors of the 4ederal "eser(e $ystem shall be necessary to
disclose fully the relations between such affiliate and such bank and to enable the Board to inform itself as to the effect of such
relations u#on the affairs of such bank. !he re#orts of such affiliates shall be #ublished by the bank under the same conditions as
go(ern its own condition re#orts.
M,6 '$1 ..+. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/>). 0s to re#orts of affiliates of national banks, see section >6,,, "e(ised $tatutes (,6 '$1 ,/,).N
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,9. 0dditional "e#orts of 0ffiliates
0ny such affiliated member bank may be reDuired to obtain from any such affiliate such additional re#orts as in the o#inion of its
4ederal reser(e bank or the Board of @o(ernors of the 4ederal "eser(e $ystem may be necessary in order to obtain a full and
com#lete knowledge of the condition of the affiliated member bank. $uch additional re#orts shall be transmitted to the 4ederal reser(e
bank and the Board of @o(ernors of the 4ederal "eser(e $ystem and shall be in such form as the Board of @o(ernors of the 4ederal
"eser(e $ystem may #rescribe.
M,6 '$1 ..+. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/>).N
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,-. 4ailure to Fbtain "e#orts of 0ffiliates
0ny such affiliated member bank which fails to obtain from any of its affiliates and furnish any re#ort #ro(ided for by the two #receding
#aragra#hs of this section shall be subKect to a #enalty of G,<< for each day during which such failure continues, which, by direction of
the Board of @o(ernors of the 4ederal "eser(e $ystem, may be collected, by suit or otherwise, by the 4ederal reser(e bank of the
district in which such member bank is located.
M,6 '$1 ..+. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/>) and amended by act of ;uly ,, ,-// (9< $tat. 6+.). 4or definition of HaffiliateH see section 6 of the
Banking 0ct of ,-.., a##ro(ed ;une ,/, ,-...N
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6<. Dealings in 8n(estment $ecurities and $tock
$tate member banks shall be subKect to the same limitations and conditions with res#ect to the #urchasing, selling, underwriting, and
holding of in(estment securities and stock as are a##licable in the case of national banks under #aragra#h H$e(enthH of section >,./ of
the "e(ised $tatutes, as amended. !his #aragra#h shall not a##ly to any interest held by a $tate member bank in accordance with
section >,./0 of the "e(ised $tatutes of the 'nited $tates and subKect to the same conditions and limitations #ro(ided in such section.
M,6 '$1 ..>. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/>) and amended by act of =o(. ,6, ,--- (,,. $tat. ,.9,).N
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6,. $tock "e#resenting $tock of Fther 1or#orations
0fter the date of the enactment of the Banking 0ct of ,-.>, no certificate e(idencing the stock of any $tate member bank shall bear any
statement #ur#orting to re#resent the stock of any other cor#oration, e3ce#t a member bank or a cor#oration engaged on ;une ,/,
,-.+ in holding the bank #remises of such member bank, nor shall the ownershi#, sale, or transfer of any certificate re#resenting the
stock of any $tate member bank be conditioned in any manner whatsoe(er u#on the ownershi#, sale, or transfer of a certificate
re#resenting the stock of any other cor#oration, e3ce#t a member bank or a cor#oration engaged on ;une ,/, ,-.+ in holding the bank
#remises of such member bank7 #ro,ie) !hat this section shall not o#erate to #re(ent the ownershi#, sale, or transfer of stock of any
other cor#oration being conditioned u#on the ownershi#, sale, or transfer of a certificate re#resenting stock of a $tate member bank.
M,6 '$1 ../. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/>)5 and amended by act of 0ug. 6., ,-.> (+- $tat. :,<). !he Banking 0ct of ,-.>, referred to in this
#aragra#h, was a##ro(ed 0ug. 6., ,-.>. 4or similar #ro(ision a##licable to stock of national banks, see section >,.-, "e(ised $tatutes (,6 '$1 >6).N
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66. B3aminations of 0ffiliates
8n connection with e3aminations of $tate member banks, e3aminers selected or a##ro(ed by the Board of @o(ernors of the 4ederal
"eser(e $ystem shall make such e3aminations of the affairs of all affiliates of such banks as shall be necessary to disclose fully the
relations between such banks and their affiliates and the effect of such relations u#on the affairs of such banks. !he e3#ense of
e3amination of affiliates of any $tate member bank may, in the discretion of the Board of @o(ernors of the 4ederal "eser(e $ystem, be
assessed against such bank and, when so assessed, shall be #aid by such bank. 8n the e(ent of the refusal to gi(e any information
reDuested in the course of the e3amination of any such affiliate, or in the e(ent of the refusal to #ermit such e3amination, or in the e(ent
of the refusal to #ay any e3#ense so assessed, the Board of @o(ernors of the 4ederal "eser(e $ystem may, in its discretion, reDuire
any or all $tate member banks affiliated with such affiliate to surrender their stock in the 4ederal reser(e bank and to forfeit all rights
and #ri(ileges of membershi# in the 4ederal "eser(e $ystem, as #ro(ided in this section.
M,6 '$1 ..9. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,//). 0s to e3aminations of affiliates of national banks, see this act, section 6,.N
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6.. 1ommunity De(elo#ment 0uthority
0 $tate member bank may make in(estments directly or indirectly, each of which #romotes the #ublic welfare by benefiting #rimarily
low- and moderate-income communities or families (such as by #ro(iding housing, ser(ices, or Kobs), to the e3tent #ermissible under
$tate law. 0 $tate member bank shall not make any such in(estment if the in(estment would e3#ose the $tate member bank to
unlimited liability. !he Board shall limit a $tate member bankIs in(estment in any , #roKect and a $tate member bankIs aggregate
in(estments under this #aragra#h. !he aggregate amount of in(estments of any $tate member bank under this #aragra#h may not
e3ceed an amount eDual to the sum of > #ercent of the $tate member bankIs ca#ital stock actually #aid in and unim#aired and >
#ercent of the $tate member bankIs unim#aired sur#lus, unless the Board determines, by order, that a higher amount will #ose no
significant risk to the affected de#osit insurance fund5 and the $tate member bank is adeDuately ca#itali2ed. 8n no case shall the
aggregate amount of in(estments of any $tate member bank under this #aragra#h e3ceed an amount eDual to the sum of ,> #ercent of
the $tate member bankIs ca#ital stock actually #aid in and unim#aired and ,> #ercent of the $tate member bankIs unim#aired sur#lus.
!he foregoing standards and limitations a##ly to in(estments under this #aragra#h made by a $tate member bank directly and by its
subsidiaries.
M,6 '$1 ..9a. 0s added by act of Fct. 6., ,--6 (,</ $tat. 6::+) and amended by acts of 4eb. ,>, 6<</ (,,- $tat. ./,/) and Fct. ,., 6<</ (,6< $tat. ,-:,).N
L 0n identical amendment was made by act of Fct. ,/, 6<</ (,6< $tat. 6<69).
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%ection 0!. 2articipation in 7otteries 2rohibited
(a" 8 .tate member bank ma! not00
,. deal in lottery tickets5
6. deal in bets used as a means or substitute for #artici#ation in a lottery5
.. announce, ad(ertise, or #ublici2e the e3istence of any lottery5
+. announce, ad(ertise, or #ublici2e the e3istence or identity of any #artici#ant or winner, as such, in a lottery.
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(b" 8 .tate member bank ma! not permit00
,. the use of any #art of any of its banking offices by any #erson for any #ur#ose forbidden to the bank under subsection (a), or
6. direct access by the #ublic from any of its banking offices to any #remises used by any #erson for any #ur#ose forbidden to the
bank under subsection (a).
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(+" 8s use# in this se+tion00
,. !he term Hdeal inH includes making, taking, buying, selling, redeeming, or collecting.
6. !he term HlotteryH includes any arrangement whereby three or more #ersons (the H#artici#antsH) ad(ance money or credit to
another in e3change for the #ossibility or e3#ectation that one or more but not all of the #artici#ants (the HwinnersH) will recei(e
by reason of their ad(ances more than the amounts they ha(e ad(anced, the identity of the winners being determined by any
means which includes--
0. a random selection5
B. a game, race, or contest5 or
1. any record or tabulation of the result of one or more e(ents in which any #artici#ant has no interest e3ce#t for its
bearing u#on the #ossibility that he may become a winner.
.. !he term Hlottery ticketH includes any right, #ri(ilege, or #ossibility (and any ticket, recei#t, record, or other e(idence of any
such right, #ri(ilege, or #ossibility) of becoming a winner in a lottery.
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(#" =othing contained in this section #rohibits a $tate member bank from acce#ting de#osits or cashing or otherwise handling checks
or other negotiable instruments, or #erforming other lawful banking ser(ices for a $tate o#erating a lottery, or for an officer or em#loyee
of that $tate who is charged with the administration of the lottery.
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(e" !he Board of @o(ernors of the 4ederal "eser(e $ystem shall issue such regulations as may be necessary to the strict enforcement
of this section and the #re(ention of e(asions thereof.
M,6 '$1 ..-. 0s added by act of Dec. ,>, ,-/: (9, $tat. /<-) effecti(e 0#ril ,, ,-/9. 1orres#onding #rohibitions are contained in section >,./B of the "e(ised
$tatutes, section 6< of the 4ederal De#osit 8nsurance 0ct, and section +,< of the =ational ousing 0ct with res#ect to national banks, nonmember insured
banks, and institutions insured by the 4ederal $a(ings and Loan 8nsurance 1or#oration, res#ecti(ely.N
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%ection 0). $esolution of (learing )anks
(a" Conser4atorship or re+ei4ership
% 8ppointment. !he Board may a##oint a conser(ator or recei(er to take #ossession and control of any uninsured $tate
member bank which o#erates, or o#erates as, a multilateral clearing organi2ation #ursuant to section +<- of the 4ederal
De#osit 8nsurance 1or#oration 8m#ro(ement 0ct of ,--, to the same e3tent and in the same manner as the 1om#troller of the
1urrency may a##oint a conser(ator or recei(er for a national bank.
"% &owers. !he conser(ator or recei(er for an uninsured $tate member bank referred to in #aragra#h (,) shall e3ercise the same
#owers, functions, and duties, subKect to the same limitations, as a conser(ator or recei(er for a national bank.
(b" ,oar# authorit!. !he Board shall ha(e the same authority with res#ect to any conser(ator or recei(er a##ointed under subsection
(a), and the uninsured $tate member bank for which the conser(ator or recei(er has been a##ointed, as the 1om#troller of the
1urrency has with res#ect to a conser(ator or recei(er for a national bank and the national bank for which the conser(ator or recei(er
has been a##ointed.
(+" ,ankrupt+! pro+ee#ings. !he Board (in the case of an uninsured $tate member bank which o#erates, or o#erates as, such a
multilateral clearing organi2ation) may direct a conser(ator or recei(er a##ointed for the bank to file a #etition #ursuant to title ,,,
'nited $tates 1ode, in which case, title ,,, 'nited $tates 1ode, shall a##ly to the bank in lieu of otherwise a##licable 4ederal or $tate
insol(ency law.
M,6 '$1 ..-a. 0s added by act of Dec. 6,, 6<<< (,,+ $tat. 6:/.0-.-6).N
%ection /I. )oard of Governors of the #ederal $eserve %ystem
,. 0##ointment and Tualification of *embers
!he Board of @o(ernors of the 4ederal "eser(e $ystem (hereinafter referred to as the HBoardH) shall be com#osed of se(en members,
to be a##ointed by the President, by and with the ad(ice and consent of the $enate, after the date of enactment of the Banking 0ct of
,-.>, for terms of fourteen years e3ce#t as hereinafter #ro(ided, but each a##ointi(e member of the 4ederal "eser(e Board in office
on such date shall continue to ser(e as a member of the Board until 4ebruary ,, ,-./, and the $ecretary of the !reasury and the
1om#troller of the 1urrency shall continue to ser(e as members of the Board until 4ebruary ,, ,-./. 8n selecting the members of the
Board, not more than one of whom shall be selected from any one 4ederal "eser(e district, the President shall ha(e due regard to a
fair re#resentation of the financial, agricultural, industrial, and commercial interests, and geogra#hical di(isions of the country. !he
members of the Board shall de(ote their entire time to the business of the Board and shall each recei(e an annual salary of G,>,<<<,
#ayable monthly, together with actual necessary tra(eling e3#enses.
M,6 '$1 6+,. 0s amended by acts of ;une ., ,-66 (+6 $tat. /6<)5 0ug. 6., ,-.> (+- $tat. :<+). Prior to the enactment of the Banking 0ct of ,-.>, a##ro(ed
0ug. 6., ,-.>, the Board of @o(ernors of the 4ederal "eser(e $ystem was known as the 4ederal "eser(e Board. $ee note to the third #aragra#h of section ,.
!he #ortion of this #aragra#h dealing with salaries of Board members has in effect been amended numerous times, most recently by B3ecuti(e Frder. Prior to
the act of December 6:, 6<<<, section ,<<6 of which re(ised the e3ecuti(e schedule, the salary of the chairman of the Board was set at e3ecuti(e schedule le(el
6 and the salary of other members at le(el .. !he salary of the chairman of the Board is now set at e3ecuti(e schedule le(el 8, and the salary of other members
at le(el 88 (see 6 '$1 .>9 and > '$1 >.,. and >.,+).N
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6. *embers 8neligible to $er(e *ember Banks5 !erm of Fffice5 1hairman and Aice 1hairman
!he members of the Board shall be ineligible during the time they are in office and for two years thereafter to hold any office, #osition,
or em#loyment in any member bank, e3ce#t that this restriction shall not a##ly to a member who has ser(ed the full term for which he
was a##ointed. '#on the e3#iration of the term of any a##ointi(e member of the 4ederal "eser(e Board in office on the date of
enactment of the Banking 0ct of ,-.>, the President shall fi3 the term of the successor to such member at not to e3ceed fourteen
years, as designated by the President at the time of nomination, but in such manner as to #ro(ide for the e3#iration of the term of not
more than one member in any two-year #eriod, and thereafter each member shall hold office for a term of fourteen years from the
e3#iration of the term of his #redecessor, unless sooner remo(ed for cause by the President. Ff the #ersons thus a##ointed, one shall
be designated by the President, by and with the ad(ice and consent of the $enate, to ser(e as 1hairman of the Board for a term of four
years, and one shall be designated by the President, by and with the consent of the $enate, to ser(e as Aice 1hairman of the Board for
a term of four years. !he chairman of the Board, subKect to its su#er(ision, shall be its acti(e e3ecuti(e officer. Bach member of the
Board shall within fifteen days after notice of a##ointment make and subscribe to the oath of office. '#on the e3#iration of their terms of
office, members of the Board shall continue to ser(e until their successors are a##ointed and ha(e Dualified. 0ny #erson a##ointed as
a member of the Board after the date of enactment of the Banking 0ct of ,-.> shall not be eligible for rea##ointment as such member
after he shall ha(e ser(ed a full term of fourteen years.
MM,6 '$1 6+6. 0s amended by acts of *arch ., ,-,- (+< $tat. ,.,>)5 ;une ., ,-66 (+6 $tat. /6<)5 ;une ,/, ,-.. (+9 $tat. ,//)5 0ug. 6., ,-.> (+- $tat. :<+)5
and =o(ember ,/, ,-:: (-, $tat. ,.99). !he Banking 0ct of ,-.>, referred to in this #aragra#h, became effecti(e 0ug. 6., ,-.>. Prior to the enactment of that
act, the chairman and (ice chairman of the Board of @o(ernors of the 4ederal "eser(e $ystem were known as the go(ernor and (ice go(ernor of the 4ederal
"eser(e Board, res#ecti(ely. $ee note to the third #aragra#h of section ,. !he act of =o(ember ,/, ,-::, amended the second sentence of this #aragra#h. !he
amendment takes effect on ;an. ,, ,-:-, and a##lies to indi(iduals who are designated by the President on or after such date to ser(e as chairman or (ice
chairman.N
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.. 0ssessments on 4ederal "eser(e Banks
!he Board of @o(ernors of the 4ederal "eser(e $ystem shall ha(e #ower to le(y semiannually u#on the 4ederal reser(e banks, in
#ro#ortion to their ca#ital stock and sur#lus, an assessment sufficient to #ay its estimated e3#enses and the salaries of its members
and em#loyees for the half year succeeding the le(ying of such assessments, together with any deficit carried forward from the
#receding half year, and such assessments may include amounts sufficient to #ro(ide for the acDuisition by the Board in its own name
of such site or building in the District of 1olumbia as in its Kudgment alone shall be necessary for the #ur#ose of #ro(iding suitable and
adeDuate Duarters for the #erformance of its functions. 0fter $e#tember ,, 6<<<, the Board may also use such assessments to acDuire,
in its own name, a site or building (in addition to the facilities e3isting on such date) to #ro(ide for the #erformance of the functions of
the Board. 0fter a##ro(ing such #lans, estimates, and s#ecifications as it shall ha(e caused to be #re#ared, the Board may,
notwithstanding any other #ro(ision of law, cause to be constructed on any site so acDuired by it a building or buildings suitable and
adeDuate in its Kudgment for its #ur#oses and #roceed to take all such ste#s as it may deem necessary or a##ro#riate in connection
with the construction, eDui#ment, and furnishing of such building or buildings. !he Board may maintain, enlarge, or remodel any
building or buildings so acDuired or constructed and shall ha(e sole control of such building or buildings and s#ace therein..
M,6 '$1 6+.. 0s reenacted without change by act of ;une ., ,-66 (+6 $tat. /6,)5 and amended by acts of ;une ,-, ,-.+ (+9 $tat. ,,<9) and Dec. 6:, 6<<<
(,,+ $tat. .<6:). By act a##ro(ed ;une 6:, ,-.> (+- $tat. +6>), #ro(ision was made for the furnishing of steam from the central heating #lant to the 4ederal
"eser(e Board, now the Board of @o(ernors of the 4ederal "eser(e $ystem.N
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+. Princi#al Fffices5 B3#enses5 De#osit of 4unds5 *embers =ot to Be Ffficers or $tockholders of Banks
!he #rinci#al offices of the Board shall be in the District of 1olumbia. 0t meetings of the Board the chairman shall #reside, and, in his
absence, the (ice chairman shall #reside. 8n the absence of the chairman and the (ice chairman, the board shall elect a member to act
as chairman #ro tem#ore. !he Board shall determine and #rescribe the manner in which its obligations shall be incurred and its
disbursements and e3#enses allowed and #aid, and may lea(e on de#osit in the 4ederal "eser(e banks the #roceeds of assessments
le(ied u#on them to defray its estimated e3#enses and the salaries of its members and em#loyees, whose em#loyment, com#ensation,
lea(e, and e3#enses shall be go(erned solely by the #ro(isions of this 0ct, s#ecific amendments thereof, and rules and regulations of
the Board not inconsistent therewith5 and funds deri(ed from such assessments shall not be construed to be @o(ernment funds or
a##ro#riated moneys. =o member of the Board of @o(ernors of the 4ederal "eser(e $ystem shall be an officer or director of any bank,
banking institution, trust com#any, or 4ederal "eser(e bank or hold stock in any bank, banking institution, or trust com#any5 and before
entering u#on his duties as a member of the Board of @o(ernors of the 4ederal "eser(e $ystem he shall certify under oath that he has
com#lied with this reDuirement, and such certification shall be filed with the secretary of the Board. Whene(er a (acancy shall occur,
other than by e3#iration of term, among the si3 members of the Board of @o(ernors of the 4ederal "eser(e $ystem a##ointed by the
President as abo(e #ro(ided, a succcessor shall be a##ointed by the President, by and with the ad(ice and consent of the $enate, to
fill such (acancy, and when a##ointed he shall hold office for the une3#ired term of his #redecessor.
M,6 '$1 6++. 0s amended by acts of ;une ., ,-66 (+6 $tat. /6,)5 ;une ,/, ,-.. (+9 $tat. ,/:)5 0ug. 6., ,-.> (+- $tat. :<>). !he reference to Hthe si3
membersH of the Board of @o(ernors is an a##arent error in the law and should read Hthe se(en members.H $ee section ,<, first #aragra#h.N
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>. Aacancies During "ecess of $enate
!he President shall ha(e #ower to fill all (acancies that may ha##en on the Board of @o(ernors of the 4ederal "eser(e $ystem during
the recess of the $enate by granting commissions which shall e3#ire with the ne3t session of the $enate.
M,6 '$1 6+>. 0s amended by act of ;une ., ,-66 (+6 $tat. /6,).N
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/. "eser(ation of Powers of $ecretary of !reasury
=othing in this 0ct contained shall be construed as taking away any #owers heretofore (ested by law in the $ecretary of the !reasury
which relate to the su#er(ision, management, and control of the !reasury De#artment and bureaus under such de#artment, and
where(er any #ower (ested by this 0ct in the Board of @o(ernors of the 4ederal "eser(e $ystem or the 4ederal reser(e agent a##ears
to conflict with the #owers of the $ecretary of the !reasury, such #owers shall be e3ercised subKect to the su#er(ision and control of the
$ecretary.
M,6 '$1 6+/. 0s reenacted without change by act of ;une ., ,-66 (+6 $tat. /6,).N
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:. 0nnual "e#ort
!he Board of @o(ernors of the 4ederal "eser(e $ystem shall annually make a full re#ort of its o#erations to the $#eaker of the ouse
of "e#resentati(es, who shall cause the same to be #rinted for the information of the 1ongress. !he re#ort reDuired under this
#aragra#h shall include the re#orts reDuired under section :<: of the BDual 1redit F##ortunity 0ct, section ,9(f)(:) of the 4ederal
!rade 1ommission 0ct, section ,,+ of the !ruth in Lending 0ct, and the tenth undesignated #aragra#h of this section.
M,6 '$1 6+:. 0s reenacted without change by act of ;une ., ,-66 (+6 $tat. /6,) and amended by acts of ;une ., ,-66, and Dec. 6:, 6<<< (,,+ $tat. .<.<).N
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9. 8ssuance of =ational 1urrency and 4ederal "eser(e =otes
$ection three hundred and twenty-four of the "e(ised $tatutes of the 'nited $tates shall be amended so as to read as follows7
$ec. .6+. !here shall be in the De#artment of the !reasury a bureau charged with the e3ecution of all laws #assed by 1ongress
relating to the issue and regulation of national currency secured by 'nited $tates bonds, and under the general su#er(ision of the
Board of @o(ernors of the 4ederal "eser(e $ystem, of all 4ederal "eser(e notes, e3ce#t for the cancellation and destruction, and
accounting with res#ect to such cancellation and destruction, of 4ederal "eser(e notes unfit for circulation, the chief officer of which
bureau shall be called the 1om#troller of the 1urrency and shall #erform his duties under the general directions of the $ecretary of the
!reasury. !he 1om#troller of the 1urrency shall ha(e the same authority o(er matters within the Kurisdiction of the 1om#troller as the
Director of the Fffice of !hrift $u#er(ision has o(er matters within the DirectorIs Kurisdiction under section .(b)(.) of the ome FwnersI
Loan 0ct. !he $ecretary of the !reasury may not delay or #re(ent the issuance of any rule or the #romulgation of any regulation by the
1om#troller of the 1urrency.
M,6 '$1 ,. 0s reenacted without change by act of ;une ., ,-66 (+6 $tat. /6,)5 and amended by acts of *ay 6<, ,-// (9< $tat. ,/,) and $e#t. 6., ,--+ (,<9
$tat. 66.6).N
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-. Branch 4ederal "eser(e Bank Buildings
=o 4ederal "eser(e bank may authori2e the acDuisition or construction of any branch building, or enter into any contract or other
obligation for the acDuisition or construction of any branch building, without the a##ro(al of the Board.
M,6 '$1 >66. 0s added by act of ;une ., ,-66 (+6 $tat. /66)5 and amended by acts of 4eb. /, ,-6. (+6 $tat. ,66.)5 ;uly .<, ,-+: (/, $tat. >6<)5 *ay 6-, ,->.
(/: $tat. +,)5 0ug. .,, ,-/6 (:/ $tat. +,9)5 Fct. 69, ,-:+ (99 $tat. ,><>)5 and Fct. 6+, ,--6 (,</ $tat. .,++).N
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,<. "ecord of F#en *arket and Fther Policies
!he Board of @o(ernors of the 4ederal "eser(e $ystem shall kee# a com#lete record of the action taken by the Board and by the
4ederal F#en *arket 1ommittee u#on all Duestions of #olicy relating to o#en-market o#erations and shall record therein the (otes
taken in connection with the determination of o#en-market #olicies and the reasons underlying the action of the Board and the
1ommittee in each instance. !he Board shall kee# a similar record with res#ect to all Duestions of #olicy determined by the Board, and
shall include in its annual re#ort to the 1ongress a full account of the action so taken during the #receding year with res#ect to o#en-
market #olicies and o#erations and with res#ect to the #olicies determined by it and shall include in such re#ort a co#y of the records
reDuired to be ke#t under the #ro(isions of this #aragra#h.
M,6 '$1 6+:a. 0s added by act of 0ug. 6., ,-.> (+- $tat. :<>).N
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%ection /I!. 3mergency !dvances to Groups of ember )anks M
,. 0uthority of "eser(e Banks to *ake 0d(ances
'#on recei(ing the consent of not less than fi(e members of the Board of @o(ernors of the 4ederal "eser(e $ystem, any 4ederal
reser(e bank may make ad(ances, in such amount as the board of directors of such 4ederal reser(e bank may determine, to grou#s of
fi(e or more member banks within its district, a maKority of them inde#endently owned and controlled, u#on their time or demand
#romissory notes, #ro(ided the bank or banks which recei(e the #roceeds of such ad(ances as herein #ro(ided ha(e no adeDuate
amounts of eligible and acce#table assets a(ailable to enable such bank or banks to obtain sufficient credit accommodations from the
4ederal reser(e bank through rediscounts or ad(ances other than as #ro(ided in section ,<(b). !he liability of the indi(idual banks in
each grou# must be limited to such #ro#ortion of the total amount ad(anced to such grou# as the de#osit liability of the res#ecti(e
banks bears to the aggregate de#osit liability of all banks in such grou#, but such ad(ances may be made to a lesser number of such
member banks if the aggregate amount of their de#osit liability constitutes at least ,< #er centum of the entire de#osit liability of the
member banks within such district. $uch banks shall be authori2ed to distribute the #roceeds of such loans to such of their number and
in such amount as they may agree u#on, but before so doing they shall reDuire such reci#ient banks to de#osit with a suitable trustee,
re#resenting the entire grou#, their indi(idual notes made in fa(or of the grou# #rotected by such collateral security as may be agreed
u#on. 0ny 4ederal reser(e bank making such ad(ance shall charge interest or discount thereon at a rate not less than , #er centum
abo(e its discount rate in effect at the time of making such ad(ance. =o such note u#on which ad(ances are made by a 4ederal
reser(e bank under this section shall be eligible under section ,/ of this 0ct as collateral security for 4ederal reser(e notes.
M,6 '$1 .+:a. 0s added by act of 4eb. 6:, ,-.6 (+: $tat. >/).N
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6. 4oreign Fbligations as $ecurity for 0d(ances
=o obligations of any foreign go(ernment, indi(idual, #artnershi#, association, or cor#oration organi2ed under the laws thereof shall be
eligible as collateral security for ad(ances under this section.
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.. 0uthority of *ember Banks to Fbligate !hemsel(es
=o obligations of any foreign go(ernment, indi(idual, #artnershi#, association, or cor#oration organi2ed under the laws thereof shall be
eligible as collateral security for ad(ances under this section.
L Pre(iously section ,<(a), this section was redesignated by act of Dec. ,-, ,--, (,<> $tat. 66:-).
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%ection /I). !dvances to Individual ember )anks M
(a" 0ny 4ederal "eser(e bank, under rules and regulations #rescribed by the Board of @o(ernors of the 4ederal "eser(e $ystem, may
make ad(ances to any member bank on its time or demand notes ha(ing maturities of not more than four months and which are
secured to the satisfaction of such 4ederal "eser(e bank. =otwithstanding the foregoing, any 4ederal "eser(e bank, under rules and
regulations #rescribed by the Board of @o(ernors of the 4ederal "eser(e $ystem, may make ad(ances to any member bank on its time
notes ha(ing such maturities as the Board may #rescribe and which are secured by mortgage loans co(ering a one-to-four family
residence. $uch ad(ances shall bear interest at a rate eDual to the lowest discount rate in effect at such 4ederal "eser(e bank on the
date of such note.
M,6 '$1 .+:b(a). 0s added by act of 4eb. 6:, ,-.6 (+: $tat. >/)5 and amended by acts of 4eb. ., ,-.. (+: $tat. :-+)5 *arch -, ,-.. (+9 $tat. :)5 0ug. 6., ,-.>
(+- $tat. :<>)5 Fct. ,9, ,-:+ (99 $tat. ,./9)5 *arch .,, ,-9< (-+ $tat. ,+<)5 and Dec. ,-, ,--, (,<> $tat. 66:-).N
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Limitations on 0d(ances
(b"
,. B3ce#t as #ro(ided in #aragra#h (6), no ad(ances to any underca#itali2ed de#ository institution by any 4ederal "eser(e bank
under this section may be outstanding for more than /< days in any ,6<-day #eriod.
6.
0. 8f--
i. the head of the a##ro#riate 4ederal banking agency certifies in ad(ance in writing to the 4ederal "eser(e
bank that any de#ository institution is (iable5 or
ii. (ii)the Board conducts an e3amination of any de#ository institution and the 1hairman of the Board certifies in
writing to the 4ederal "eser(e bank that the institution is (iable, the limitation contained in #aragra#h (,) shall
not a##ly during the /<-day #eriod beginning on the date such certification is recei(ed.
B. !he /<-day #eriod may be e3tended for additional /<-day #eriods u#on recei#t by the 4ederal "eser(e bank of
additional written certifications under sub#aragra#h (0) with res#ect to each such additional #eriod.
1. !he authority of the head of any agency to issue a written certification of (iability under this #aragra#h may not be
delegated to any other #erson.
D. =otwithstanding #aragra#h (,), an underca#itali2ed de#ository institution which does not ha(e a certificate of (iability
in effect under this #aragra#h may ha(e ad(ances outstanding for more than /< days in any ,6<-day #eriod if the
Board elects to treat--
i. such institution as critically underca#itali2ed under #aragra#h (.)5 and
ii. any such ad(ance as an ad(ance described in sub#aragra#h (0)(i) of #aragra#h (.).
B. =otwithstanding any other #ro(ision of this section, if--
i. in the case of any critically underca#itali2ed de#ository institution--
8. any ad(ance under this section to such institution is outstanding without #ayment ha(ing been
demanded as of the end of the >-day #eriod beginning on the date the institution becomes a critically
underca#itali2ed de#ository institution5 or
88. any new ad(ance is made to such institution under this section after the end of such #eriod5 and
ii. after the end of that >-day #eriod, the De#osit 8nsurance 4und of the 4ederal De#osit 8nsurance 1or#oration
incurs a loss e3ceeding the loss that the 1or#oration would ha(e incurred if it had liDuidated that institution as
of the end of that #eriod the Board shall, subKect to the limitations in sub#aragra#h (B), be liable to the
4ederal De#osit 8nsurance 1or#oration for the e3cess loss, without regard to the terms of the ad(ance or any
collateral #ledged to secure the ad(ance.
4. !he liability of the Board under sub#aragra#h (0) shall not e3ceed the lesser of the following7
i. !he amount of the loss the Board or any 4ederal "eser(e bank would ha(e incurred on the increases in the
amount of ad(ances made after the >-day #eriod referred to in sub#aragra#h (0) if those increased ad(ances
had been unsecured.
ii. !he interest recei(ed on the increases in the amount of ad(ances made after the >-day #eriod referred to in
sub#aragra#h (0).
@. !he Board shall #ay the 4ederal De#osit 8nsurance 1or#oration the amount of any liability of the Board under
sub#aragra#h (0).
. !he Board shall re#ort to the 1ongress on any e3cess loss liability it incurs under sub#aragra#h (0), as limited by
sub#aragra#h (B)(i), and the reasons therefore, not later than / months after incurring the liability.
.. 0 4ederal "eser(e bank shall ha(e no obligation to make, increase, renew, or e3tend any ad(ance or discount under this 0ct
to any de#ository institution.
+.
0. !he term 0appropriate Feera! %anking agency0 has the same meaning as in section . of the 4ederal De#osit
8nsurance 0ct.
B. !he term Hcritica!!y unercapita!i1eH has the same meaning as in section .9 of the 4ederal De#osit 8nsurance 0ct.
1. !he term 0epository institution0 has the same meaning as in section . of the 4ederal De#osit 8nsurance 0ct.
D. !he term 0unercapita!i1e epository institution0 means any de#ository institution which--
i. is underca#itali2ed, as defined in section .9 of the 4ederal De#osit 8nsurance 0ct5 or
ii. has a com#osite 10*BL rating of > under the 'niform 4inancial 8nstitutions "ating $ystem (or an eDui(alent
rating by any such agency under a com#arable rating system) as of the most recent e3amination of such
institution.
B. 0 de#ository institution is 0,ia%!e0 if the Board or the a##ro#riate 4ederal banking agency determines, gi(ing due
regard to the economic conditions and circumstances in the market in which the institution o#erates, that the
institution--
i. is not critically underca#itali2ed5
ii. is not e3#ected to become critically underca#itali2ed5 and
iii. is not e3#ected to be #laced in conser(atorshi# or recei(ershi#.
M,6 '$1 .+:b(b). 0s added by act of Dec. ,-, ,--, (,<> $tat. 66:-).N
L Pre(iously section ,<(b), this section was redesignated by act of Dec. ,-, ,--, (,<> $tat. 66:-).
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%ection //. 2owers of )oard of Governors of the #ederal $eserve %ystem
!he Board of @o(ernors of the 4ederal "eser(e $ystem shall be authori2ed and em#owered7
B3aminations and "e#orts
(a"
,. !o e3amine at its discretion the accounts, books, and affairs of each 4ederal reser(e bank and of each member bank and to
reDuire such statements and re#orts as it may deem necessary. !he said board shall #ublish once each week a statement
showing the condition of each 4ederal reser(e bank and a consolidated statement for all 4ederal reser(e banks. $uch
statements shall show in detail the assets and liabilities of the 4ederal reser(e banks, single and combined, and shall furnish
full information regarding the character of the money held as reser(e and the amount, nature, and maturities of the #a#er and
other in(estments owned or held by 4ederal reser(e banks.
6. !o reDuire any de#ository institution s#ecified in this #aragra#h to make, at such inter(als as the Board may #rescribe, such
re#orts of its liabilities and assets as the Board may determine to be necessary or desirable to enable the Board to discharge
its res#onsibility to monitor and control monetary and credit aggregates. $uch re#orts shall be made (0) directly to the Board in
the case of member banks and in the case of other de#ository institutions whose reser(e reDuirements under section ,- of this
0ct e3ceed 2ero, and (B) for all other re#orts to the Board through the (i) 4ederal De#osit 8nsurance 1or#oration in the case of
insured $tate nonmember banks, sa(ings banks, and mutual sa(ings banks, (ii) =ational 1redit 'nion 0dministration Board in
the case of insured credit unions, (iii) the Director of the Fffice of !hrift $u#er(ision in the case of any sa(ings association
which is an insured de#ository institution (as defined in section . of the 4ederal De#osit 8nsurance 0ct) or which is a member
as defined in section 6 of the 4ederal ome Loan Bank 0ct, and (i() such $tate officer or agency as the Board may designate
in the case of any other ty#e of bank, sa(ings and loan association, or credit union. !he Board shall endea(or to a(oid the
im#osition of unnecessary burdens on re#orting institutions and the du#lication of other re#orting reDuirements. B3ce#t as
otherwise reDuired by law, any data #ro(ided to any de#artment, agency, or instrumentality of the 'nited $tates #ursuant to
other re#orting reDuirements shall be made a(ailable to the Board. !he Board may classify de#ository institutions for the
#ur#oses of this #aragra#h and may im#ose different reDuirements on each such class.
M,6 '$1 6+9(a). 0s amended by acts of *arch .,, ,-9< (-+ $tat. ,.6) and 0ug. -, ,-9- (,<. $tat. +.-).N
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"ediscounts by Fne "eser(e Bank for 0nother
(b" !o #ermit, or, on the affirmati(e (ote of at least fi(e members of the Board of @o(ernors of the 4ederal "eser(e $ystem to reDuire
4ederal reser(e banks to rediscount the discounted #a#er of other 4ederal reser(e banks at rates of interest to be fi3ed by the Board of
M,6 '$1 6+9(b). Part of original 4ederal "eser(e 0ct5 not amended.N
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$us#ension of "eser(e "eDuirements
(+" !o sus#end for a #eriod not e3ceeding thirty days, and from time to time to renew such sus#ension for #eriods not e3ceeding fifteen
days, any reser(e reDuirements s#ecified in this 0ct.
M,6 '$1 6+9(c). 0s amended by acts of ;une ,6, ,-+> (>- $tat. 6.:) and *arch ,9, ,-/9 (96 $tat. ><).N
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8ssue and "etirement of 4ederal "eser(e =otes
(#" !o su#er(ise and regulate through the $ecretary of the !reasury the issue and retirement of 4ederal reser(e notes, e3ce#t for the
cancellation and destruction, and accounting with res#ect to such cancellation and destruction, of notes unfit for circulation, and to
#rescribe rules and regulations under which such notes may be deli(ered by the $ecretary of the !reasury to the 4ederal reser(e
agents a##lying therefor.
M,6 '$1 6+9(d). 0s amended by acts of *ay 6<, ,-// (9< $tat. ,/,) and $e#t. 6., ,--+ (,<9 $tat. 66-.). 4or #ro(isions go(erning the issue of 4ederal
"eser(e notes, see section ,/.N
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"eclassification of "eser(e 1ities
(e" !o add to the number of cities classified as reser(e cities under e3isting law in which national banking associations are subKect to
the reser(e reDuirements set forth in section twenty of this 0ct5 or to reclassifying e3isting reser(e cities or to terminate their designation
as such.
M,6 '$1 6+9(e). 0s amended by act of ;uly 69, ,->- (:. $tat. 6/+), effecti(e ;uly 69, ,-/6. !he reference to Hsection twentyH is an error in the law and should
correctly refer to Hsection nineteen.HN
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$us#ension or "emo(al of Ffficers and Directors of "eser(e Banks
(f" !o sus#end or remo(e any officer or director of any 4ederal reser(e bank, the cause of such remo(al to be forthwith communicated
in writing by the Board of @o(ernors of the 4ederal "eser(e $ystem to the remo(ed officer or director and to said bank.
M,6 '$1 6+9(f). Part of original 4ederal "eser(e 0ct5 not amended.N
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1harging Fff Losses of "eser(e Banks
(g" !o reDuire the writing off of doubtful or worthless assets u#on the books and balance sheets of 4ederal reser(e banks.
M,6 '$1 6+9(g). Part of original 4ederal "eser(e 0ct5 not amended.N
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$us#ension, LiDuidation, or "eorgani2ation of "eser(e Banks
(h" !o sus#end, for the (iolation of any of the #ro(isions of this 0ct, the o#erations of any 4ederal reser(e bank, to take #ossession
thereof, administer the same during the #eriod of sus#ension, and, when deemed ad(isable, to liDuidate or reorgani2e such bank.
M,6 '$1 6+9(h). Part of original 4ederal "eser(e 0ct5 not amended.N
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"ules and "egulations
(i" !o reDuire bonds of 4ederal reser(e agents, to make regulations for the safeguarding of all collateral, bonds, 4ederal reser(e notes,
money or #ro#erty of any kind de#osited in the hands of such agents, and said board shall #erform the duties, functions, or ser(ices
s#ecified in this 0ct, and make all rules and regulations necessary to enable said board effecti(ely to #erform the same.
M,6 '$1 6+9(i). Part of original 4ederal "eser(e 0ct5 not amended.N
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$u#er(ision F(er "eser(e Banks
(E" !o e3ercise general su#er(ision o(er said 4ederal reser(e banks.
M,6 '$1 6+9(K). Part of original 4ederal "eser(e 0ct5 not amended.N
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Delegation of 4unctions
(k" !o delegate, by #ublished order or rule and subKect to the 0dministrati(e Procedure 0ct, any of its functions, other than those
relating to rulemaking or #ertaining #rinci#ally to monetary and credit #olicies, to one or more administrati(e law Kudges, members or
em#loyees of the Board, or 4ederal "eser(e banks. !he assignment of res#onsibility for the #erformance of any function that the Board
determines to delegate shall be a function of the 1hairman. !he Board shall, u#on the (ote of one member, re(iew action taken at a
delegated le(el within such time and in such manner as the Board shall by rule #rescribe.
M,6 '$1 6+9(k). 0s added by the acts of =o(. >, ,-// (9< $tat. ,.,+) and *arch 6:, ,-:9 (-6 $tat. ,9.).N
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Bm#loyees of Board of @o(ernors of the 4ederal "eser(e $ystem
(l" !o em#loy such attorneys, e3#erts, assistants, clerks, or other em#loyees as may be deemed necessary to conduct the business of
the board. 0ll salaries and fees shall be fi3ed in ad(ance by said board and shall be #aid in the same manner as the salaries of the
members of said board. 0ll such attorneys, e3#erts, assistants, clerks, and other em#loyees shall be a##ointed without regard to the
#ro(isions of the 0ct of ;anuary si3teenth, eighteen hundred and eighty-three ((olume twenty-two, 'nited $tates $tatutes at large, #age
four hundred and three), and amendments thereto, or any rule or regulation made in #ursuance thereof7 Pro(ided, !hat nothing herein
shall #re(ent the President from #lacing said em#loyees in the classified ser(ice.
M,6 '$1 6+9(l). Part of original 4ederal "eser(e 0ct5 not amended.N
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Loans by *ember Banks on $tock or Bond 1ollateral
M$ubsection (m) (,6 '$1 6+9(m)) was re#ealed by act of =o(. ,6, ,--- (,,. $tat. ,+:-).N
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B3amination of De#ository 8nstitutions and 0ffiliates
(n" !o e3amine, at the BoardIs discretion, any de#ository institution, and any affiliate of such de#ository institution, in connection with
any ad(ance to, any discount of any instrument for, or any reDuest for any such ad(ance or discount by, such de#ository institution
under this 0ct.
M,6 '$1 6+9(n). 0s added by act of Dec. ,-, ,--,. !he original subsection (n), which authori2ed the $ecretary of the !reasury, as necessary, to reDuire the
#ayment and deli(ery of all gold coin, gold bullion, and gold certificates to the !reasurer of the 'nited $tates in e3change for another form of '.$. currency, was
re#ealed by act of $e#t. ,., ,-96 (-/ $tat. ,</9).N
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0##ointment of 1onser(ator or "ecei(er
(o" !he Board may a##oint the 4ederal De#osit 8nsurance 1or#oration as conser(ator or recei(er for a $tate member bank under
section ,,(c)(-) of the 4ederal De#osit 8nsurance 0ct.
M,6 '$1 6+9(o). 0s added by act of Dec. ,-, ,--, (,<> $tat. 66:.) and redesignated by act of Fct. 69, ,--6 (,</ $tat. +<9<).N
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0uthority
(p" !he Board may act in its own name and through its own attorneys in enforcing any #ro(ision of this title, regulations #romulgated
hereunder, or any other law or regulation, or in any action, suit, or #roceeding to which the Board is a #arty and which in(ol(es the
BoardIs regulation or su#er(ision of any bank, bank holding com#any (as defined in section 6 of the Bank olding 1om#any 0ct of
,->/), or other entity, or the administration of its o#erations.
M,6 '$1 6+9(#). 0s added by act of $e#t. 6., ,--+ (,<9 $tat. 66.6).N
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'niform Protection 0uthority for 4ederal "eser(e 4acilities
(L"
,. =otwithstanding any other #ro(ision of law, to authori2e #ersonnel to act as law enforcement officers to #rotect and safeguard
the #remises, grounds, #ro#erty, #ersonnel, including members of the Board, of the Board, or any 4ederal reser(e bank, and
o#erations conducted by or on behalf of the Board or a reser(e bank.
6. !he Board may, subKect to the regulations #rescribed under #aragra#h (>), delegate authority to a 4ederal reser(e bank to
authori2e #ersonnel to act as law enforcement officers to #rotect and safeguard the bankIs #remises, grounds, #ro#erty,
#ersonnel, and o#erations conducted by or on behalf of the bank.
.. Law enforcement officers designated or authori2ed by the Board or a reser(e bank under #aragra#h (,) or (6) are authori2ed
while on duty to carry firearms and make arrests without warrants for any offense against the 'nited $tates committed in their
#resence, or for any felony cogni2able under the laws of the 'nited $tates committed or being committed within the buildings
and grounds of the Board or a reser(e bank if they ha(e reasonable grounds to belie(e that the #erson to be arrested has
committed or is committing such a felony. $uch officers shall ha(e access to law enforcement information that may be
necessary for the #rotection of the #ro#erty or #ersonnel of the Board or a reser(e bank.
+. 4or #ur#oses of this subsection, the term Hlaw enforcement officersH means #ersonnel who ha(e successfully com#leted law
enforcement training and are authori2ed to carry firearms and make arrests #ursuant to this subsection.
>. !he law enforcement authorities #ro(ided for in this subsection may be e3ercised only #ursuant to regulations #rescribed by
the Board and a##ro(ed by the 0ttorney @eneral.
M,6 '$1 6+9(D). 0s added by act of Fct. 6/, 6<<, (,,> $tat. ...).N
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0uthority of Board When $ufficient =umber of *embers 0re =ot in Fffice or 0(ailable
(r"
,. 0ny action that this 0ct #ro(ides may be taken only u#on the affirmati(e (ote of > members of the Board may be taken u#on
the unanimous (ote of all members then in office if there are fewer than > members in office at the time of the action.
0. 0ny action that the Board is otherwise authori2ed to take under section ,.(.) may be taken u#on the unanimous (ote
of all a(ailable members then in office, if--
i. at least 6 members are a(ailable and all a(ailable members #artici#ate in the action5
ii. the a(ailable members unanimously determine that--
8. unusual and e3igent circumstances e3ist and the borrower is unable to secure adeDuate credit
accommodations from other sources5
88. action on the matter is necessary to #re(ent, correct, or mitigate serious harm to the economy or the
stability of the financial system of the 'nited $tates5
888. des#ite the use of all means a(ailable (including all a(ailable tele#honic, telegra#hic, and other
electronic means), the other members of the Board ha(e not been able to be contacted on the
matter5 and
8A. action on the matter is reDuired before the number of Board members otherwise reDuired to (ote on
the matter can be contacted through any a(ailable means (including all a(ailable tele#honic,
telegra#hic, and other electronic means)5 and
iii. any credit e3tended by a 4ederal reser(e bank #ursuant to such action is #ayable u#on demand of the Board.
B. !he a(ailable members of the Board shall document in writing the determinations reDuired by sub#aragra#h (0)(ii),
and such written findings shall be included in the record of the action and in the official minutes of the Board, and
co#ies of such record shall be #ro(ided as soon as #racticable to the members of the Board who were not a(ailable to
#artici#ate in the action and to the 1hairman of the 1ommittee on Banking, ousing, and 'rban 0ffairs of the $enate
and to the 1hairman of the 1ommittee on 4inancial $er(ices of the ouse of "e#resentati(es.
M,6 '$1 6+9(r). 0s added by act of =o(ember 6/, 6<<6 (,,/ $tat. 6.+<).N
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%ection //!. 2ricing of %ervices
(a" =ot later than the first day of the si3th month after the date of enactment of the *onetary 1ontrol 0ct of ,-9<, the Board shall
#ublish for #ublic comment a set of #ricing #rinci#les in accordance with this section and a #ro#osed schedule of fees based u#on
those #rinci#les for 4ederal "eser(e bank ser(ices to de#ository institutions, and not later than the first day of the eighteenth month
after the date of enactment of the *onetary 1ontrol 0ct of ,-9<, the Board shall begin to #ut into effect a schedule of fees for such
ser(ices which is based on those #rinci#les.
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(b" !he ser(ices which shall be co(ered by the schedule of fees under subsection (a) are--
,. currency and coin ser(ices5
6. check clearing and collection ser(ices5
.. wire transfer ser(ices5
+. automated clearinghouse ser(ices5
>. settlement ser(ices5
/. securities safekee#ing ser(ices5
:. 4ederal "eser(e float5 and
9. any new ser(ices which the 4ederal "eser(e $ystem offers, including but not limited to #ayment ser(ices to effectuate the
electronic transfer of funds.
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(+" !he schedule of fees #rescribed #ursuant to this section shall be based on the following #rinci#les7
,. 0ll 4ederal "eser(e bank ser(ices co(ered by the fee schedule shall be #riced e3#licitly.
6. 0ll 4ederal "eser(e bank ser(ices co(ered by the fee schedule shall be a(ailable to nonmember de#ository institutions and
such ser(ices shall be #riced at the same fee schedule a##licable to member banks, e3ce#t that nonmembers shall be subKect
to any other terms, including a reDuirement of balances sufficient for clearing #ur#oses, that the Board may determine are
a##licable to member banks.
.. F(er the long run, fees shall be established on the basis of all direct and indirect costs actually incurred in #ro(iding the
4ederal "eser(e ser(ices #riced, including interest on items credited #rior to actual collection, o(erhead, and an allocation of
im#uted costs which takes into account the ta3es that would ha(e been #aid and the return on ca#ital that would ha(e been
#ro(ided had the ser(ices been furnished by a #ri(ate business firm, e3ce#t that the #ricing #rinci#les shall gi(e due regard to
com#etiti(e factors and the #ro(ision of an adeDuate le(el of such ser(ices nationwide.
+. 8nterest on items credited #rior to collection shall be charged at the current rate a##licable in the market for 4ederal funds.
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(#" !he Board shall reDuire reductions in the o#erating budgets of the 4ederal "eser(e banks commensurate with any actual or
#roKected decline in the (olume of ser(ices to be #ro(ided by such banks. !he full amount of any sa(ings so reali2ed shall be #aid into
the 'nited $tates !reasury.
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(e" 0ll de#ository institutions, as defined in section ,-(b)(,) (,6 '.$.1. +/,(b)(,)), may recei(e for de#osit and as de#osits any
e(idences of transaction accounts, as defined by section ,-(b)(,) (,6 '.$.1. +/,(b)(,)) from other de#ository institutions, as defined in
section ,-(b)(,) (,6 '.$.1. +/,(b)(,)) or from any office of any 4ederal "eser(e bank without regard to any 4ederal or $tate law
restricting the number or the #hysical location or locations of such de#ository institutions.
M,6 '$1 6+9a. 0s added by acts of *arch .,, ,-9< (-+ $tat. ,+<) and 0ug. ,<, ,-9: (,<, $tat. />6).N
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%ection //). !nnual Independent !udits of #ederal $eserve )anks and )oard
!he Board shall order an annual inde#endent audit of the financial statements of each 4ederal reser(e bank and the Board.
M,6 '$1 6+9b. 0s added by act of =o(. ,6, ,--- (,,. $tat. ,+:>).N
%ection /1. #ederal !dvisory (ouncil
,. 1reation, *embers, and *eetings
!here is hereby created a 4ederal 0d(isory 1ouncil, which shall consist of as many members as there are 4ederal reser(e districts.
Bach 4ederal reser(e bank by its board of directors shall annually select from its own 4ederal reser(e district one member of said
council, who shall recei(e such com#ensation and allowances as may be fi3ed by his board of directors subKect to the a##ro(al of the
Board of @o(ernors of the 4ederal "eser(e $ystem. !he meetings of said ad(isory council shall be held at Washington, District of
1olumbia, at least four times each year, and oftener if called by the Board of @o(ernors of the 4ederal "eser(e $ystem. !he council
may in addition to the meetings abo(e #ro(ided for hold such other meetings in Washington, District of 1olumbia, or elsewhere, as it
may deem necessary, may select its own officers and ado#t its own methods of #rocedure, and a maKority of its members shall
constitute a Duorum for the transaction of business. Aacancies in the council shall be filled by the res#ecti(e reser(e banks, and
members selected to fill (acancies, shall ser(e for the une3#ired term.
M,6 '$1 6/,. Part of original 4ederal "eser(e 0ct5 not amended.N
6. Powers
!he 4ederal 0d(isory 1ouncil shall ha(e #ower, by itself or through its officers, (,) to confer directly with the Board of @o(ernors of the
4ederal "eser(e $ystem on general business conditions5 (6) to make oral or written re#resentations concerning matters within the
Kurisdiction of said board5 (.) to call for information and to make recommendations in regard to discount rates, rediscount business,
note issues, reser(e conditions in the (arious districts, the #urchase and sale of gold or securities by reser(e banks, o#en-market
o#erations by said banks, and the general affairs of the reser(e banking system.
M,6 '$1 6/6. Part of original 4ederal "eser(e 0ct5 not amended.N
%ection /1!. #ederal +pen arket (ommittee
1reation, *embers, and *eetings
(a" !here is hereby created a 4ederal F#en *arket 1ommittee (hereinafter referred to as the H1ommitteeH), which shall consist of the
members of the Board of @o(ernors of the 4ederal "eser(e $ystem and fi(e re#resentati(es of the 4ederal "eser(e banks to be
selected as hereinafter #ro(ided. $uch re#resentati(es shall be #residents or first (ice #residents of 4ederal "eser(e banks and,
beginning with the election for the term commencing *arch ,, ,-+., shall be elected annually as follows7 Fne by the board of directors
of the 4ederal "eser(e Bank of =ew &ork, one by the boards of directors of the 4ederal "eser(e Banks of Boston, Philadel#hia, and
"ichmond, one by the boards of directors of the 4ederal "eser(e Banks of 1le(eland and 1hicago, one by the boards of directors of
the 4ederal "eser(e Banks of 0tlanta, Dallas, and $t. Louis, and one by the boards of directors of the 4ederal "eser(e Banks of
*innea#olis, Eansas 1ity, and $an 4rancisco. 8n such elections each board of directors shall ha(e one (ote5 and the details of such
elections may be go(erned by regulations #rescribed by the committee, which may be amended from time to time. 0n alternate to
ser(e in the absence of each such re#resentati(e shall likewise be a #resident or first (ice #resident of a 4ederal "eser(e bank and
shall be elected annually in the same manner. !he meetings of said committee shall be held at Washington, District of 1olumbia, at
least four times each year u#on the call of the chairman of the Board of @o(ernors of the 4ederal "eser(e $ystem or at the reDuest of
any three members of the 1ommittee.
M,6 '$1 6/.(a). 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/9)5 com#letely re(ised by act of 0ug. 6., ,-.> (+- $tat. :<>)5 and further amended by act of ;uly
:, ,-+6 (>/ $tat. /+:).N
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Partici#ation of "eser(e Banks5 "egulations of 1ommittee
(b" =o 4ederal "eser(e bank shall engage or decline to engage in o#en-market o#erations under section ,+ of this 0ct e3ce#t in
accordance with the direction of and regulations ado#ted by the 1ommittee. !he 1ommittee shall consider, ado#t, and transmit to the
se(eral 4ederal "eser(e banks, regulations relating to the o#en-market transactions of such banks.
M,6 '$1 6/.(b). 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/9)5 and amended by act of 0ug. 6., ,-.> (+- $tat. :</).N
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@o(erning Princi#les
(+" !he time, character, and (olume of all #urchases and sales of #a#er described in section ,+ of this 0ct as eligible for o#en-market
o#erations shall be go(erned with a (iew to accommodating commerce and business and with regard to their bearing u#on the general
credit situation of the country.
M,6 '$1 6/.(c). 0s added by act of ;une ,/, ,-.. (+9 $tat. ,/9)5 and reenacted without change by act of 0ug. 6., ,-.> (+- $tat. :</).N
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%ection /=. 2owers of #ederal $eserve )anks
,. "ecei#t of De#osits and 1ollections
0ny 4ederal reser(e bank may recei(e from any of its member banks, or other de#ository institutions, and from the 'nited $tates,
de#osits of current funds in lawful money, national-bank notes, 4ederal reser(e notes, or checks, and drafts, #ayable u#on
#resentation, or other items, and also, for collection, maturing notes and bills5 or, solely for #ur#oses of e3change or of collection, may
recei(e from other 4ederal reser(e banks de#osits of current funds in lawful money, national-bank notes, or checks u#on other 4ederal
reser(e banks, and checks and drafts, #ayable u#on #resentation within its district, or other items, and maturing notes and bills #ayable
within its district5 or, solely for the #ur#oses of e3change or of collection, may recei(e from any nonmember bank or trust com#any or
other de#ository institution de#osits of current funds in lawful money, national-bank notes, 4ederal reser(e notes, checks and drafts
#ayable u#on #resentation or other items, or maturing notes and bills7 #ro,ie, $uch nonmember bank or trust com#any or other
de#ository institution maintains with the 4ederal reser(e bank of its district a balance in such amount as the Board determines taking
into account items in transit, ser(ices #ro(ided by the 4ederal "eser(e Bank, and other factors as the Board may deem a##ro#riate5
#ro,ie further, !hat nothing in this or any other section of this 0ct shall be construed as #rohibiting a member or nonmember bank or
other de#ository institution from making reasonable charges, to be determined and regulated by the Board of @o(ernors of the 4ederal
"eser(e $ystem, but in no case to e3ceed ,< cents #er G,<< or fraction thereof, based on the total of checks and drafts #resented at
any one time, for collection or #ayment of checks and drafts and remission therefor by e3change or otherwise5 but no such charges
shall be made against the 4ederal reser(e banks.
M,6 '$1 .+6. 0s amended by act of $e#t. :, ,-,/ (.- $tat. :>6), which com#letely re(ised this section5 ;une 6,, ,-,: (+< $tat. 6.+)5 and *arch .,, ,-9< (-+
$tat. ,.-). With res#ect to the recei#t by "eser(e Banks of checks and drafts on de#osit, see also section ,/.N
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6. Discount of 1ommercial, 0gricultural, and 8ndustrial Pa#er
'#on the indorsement of any of its member banks, which shall be deemed a wai(er of demand, notice and #rotest by such bank as to
its own indorsement e3clusi(ely, any 4ederal reser(e bank may discount notes, drafts, and bills of e3change arising out of actual
commercial transactions5 that is, notes, drafts, and bills of e3change issued or drawn for agricultural, industrial, or commercial
#ur#oses, or the #roceeds of which ha(e been used, or are to be used, for such #ur#oses, the Board of @o(ernors of the 4ederal
"eser(e $ystem to ha(e the right to determine or define the character of the #a#er thus eligible for discount, within the meaning of this
0ct. =othing in this 0ct contained shall be construed to #rohibit such notes, drafts, and bills of e3change, secured by sta#le agricultural
#roducts, or other goods, wares, or merchandise from being eligible for such discount, and the notes, drafts, and bills of e3change of
factors issued as such making ad(ances e3clusi(ely to #roducers of sta#le agricultural #roducts in their raw state shall be eligible for
such discount5 but such definition shall not include notes, drafts, or bills co(ering merely in(estments or issued or drawn for the #ur#ose
of carrying or trading in stocks, bonds, or other in(estment securities, e3ce#t bonds and notes of the go(ernment of the 'nited $tates.
=otes, drafts, and bills admitted to discount under the terms of this #aragra#h must ha(e a maturity at the time of discount of not more
than -< days, e3clusi(e of grace.
M,6 '$1 .+.. 0s amended by act of $e#t. :, ,-,/ (.- $tat. :>6), which com#letely re(ised this section5 and by act of *arch +, ,-6. (+6 $tat. ,+:9). 0s used in
this #aragra#h the #hrase Hbonds and notes of @o(ernment of the 'nited $tatesH includes !reasury bills or certificates of indebtedness. ($ee act of ;une ,:,
,-6-, amending section > of $econd Liberty Bond 0ct of $e#t. 6+, ,-,:). 0s to eligibility for discount under this #aragra#h of notes re#resenting loans to finance
building construction, see this act, section 6+).N
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.. Discounts for 8ndi(iduals, Partnershi#s, and 1or#orations
8n unusual and e3igent circumstances, the Board of @o(ernors of the 4ederal "eser(e $ystem, by the affirmati(e (ote of not less than
fi(e members, may authori2e any 4ederal reser(e bank, during such #eriods as the said board may determine, at rates established in
accordance with the #ro(isions of section ,+, subdi(ision (d), of this 0ct, to discount for any indi(idual, #artnershi#, or cor#oration,
notes, drafts, and bills of e3change when such notes, drafts, and bills of e3change are indorsed or otherwise secured to the satisfaction
of the 4ederal "eser(e bank7 #ro,ie, !hat before discounting any such note, draft, or bill of e3change for an indi(idual, #artnershi#,
or cor#oration the 4ederal reser(e bank shall obtain e(idence that such indi(idual, #artnershi#, or cor#oration is unable to secure
adeDuate credit accommodations from other banking institutions. 0ll such discounts for indi(iduals, #artnershi#s, or cor#orations shall
be subKect to such limitations, restrictions, and regulations as the Board of @o(ernors of the 4ederal "eser(e $ystem may #rescribe.
M,6 '$1 .+.. 0s added by act of ;uly 6,, ,-.6 (+: $tat. :,>)5 and amended by acts of 0ug. 6., ,-.> (+- $tat. :,+) and Dec. ,-, ,--, (,<> $tat. 6.9/.N
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+. Discount or Purchase of $ight Drafts
'#on the indorsement of any of its member banks, which shall be deemed a wai(er of demand, notice, and #rotest by such bank as to
its own indorsement e3clusi(ely, and subKect to regulations and limitations to be #rescribed by the Board of @o(ernors of the 4ederal
"eser(e $ystem, any 4ederal reser(e bank may discount or #urchase bills of e3change #ayable at sight or on demand which grow out
of the domestic shi#ment or the e3#ortation of non#erishable, readily marketable agricultural and other sta#les and are secured by bills
of lading or other shi##ing documents con(eying or securing title to such sta#les7 #ro,ie, !hat all such bills of e3change shall be
forwarded #rom#tly for collection, and demand for #ayment shall be made with reasonable #rom#tness after the arri(al of such sta#les
at their destination7 #ro,ie further, that no such bill shall in any e(ent be held by or for the account of a 4ederal reser(e bank for a
#eriod in e3cess of ninety days. 8n discounting such bills 4ederal reser(e banks may com#ute the interest to be deducted on the basis
of the estimated life of each bill and adKust the discount after #ayment of such bills to conform to the actual life thereof.
M,6 '$1 .++. 0s added by act of *arch +, ,-6. (+6 $tat. ,+:-)5 and amended by act of *ay 6-, ,-69 (+> $tat. -:>).N
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>. Limitation on Discount of Pa#er of Fne Borrower
!he aggregate of notes, drafts, and bills u#on which any #erson, co#artnershi#, association, or cor#oration is liable as maker, acce#tor,
indorser, drawer, or guarantor, rediscounted for any member bank, shall at no time e3ceed the amount for which such #erson,
co#artnershi#, association, or cor#oration may lawfully become liable to a national banking association under the terms of section >6<<
of the "e(ised $tatutes, as amended7 #ro,ie) howe,er, !hat nothing in this #aragra#h shall be construed to change the character or
class of #a#er now eligible for rediscount by 4ederal reser(e banks.
M,6 '$1 .+>. 0s reenacted without change by act of *arch ., ,-,> (.9 $tat. ->9)5 and amended by act of $e#t. :, ,-,/ (.- $tat. :>6), which com#letely
re(ised this section5 and by act of 0#ril ,6, ,-.< (+/ $tat. ,/6).N
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/. Discount of 0cce#tances
0ny 4ederal reser(e bank may discount acce#tances of the kinds hereinafter described, which ha(e a maturity at the time of discount
of not more than -< daysI sight, e3clusi(e of days of grace, and which are indorsed by at least one member bank7 #ro,ie, !hat such
acce#tances if drawn for an agricultural #ur#ose and secured at the time of acce#tance by warehouse recei#ts or other such
documents con(eying or securing title co(ering readily marketable sta#les may be discounted with a maturity at the time of discount of
not more than si3 monthsI sight e3clusi(e of days of grace.
M,6 '$1 .+/. 0s amended by act of *arch ., ,-,> (.9 $tat. ->9)5 by act of $e#t. :, ,-,/ (.- $tat. :>6), which com#letely re(ised this section5 and by act of
*arch +, ,-6. (+6 $tat. ,+:-).N
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:. BankerIs 0cce#tances
0. 0ny member bank and any 4ederal or $tate branch or agency of a foreign bank subKect to reser(e reDuirements under section
: of the 8nternational Banking 0ct of ,-:9 (hereinafter in this #aragra#h referred to as HinstitutionsH), may acce#t drafts or bills
of e3change drawn u#on it ha(ing not more than si3 monthsI sight to run, e3clusi(e of days of grace--
i. which grow out of transactions in(ol(ing the im#ortation or e3#ortation of goods5
ii. which grow out of transactions in(ol(ing the domestic shi#ment of goods5 or
iii. which are secured at the time of acce#tance by a warehouse recei#t or other such document con(eying or securing
title co(ering readily marketable sta#les.
B. B3ce#t as #ro(ided in sub#aragra#h (1), no institution shall acce#t such bills, or be obligated for a #artici#ation share in such
bills, in an amount eDual at any time in the aggregate to more than ,>< #er centum of its #aid u# and unim#aired ca#ital stock
and sur#lus or, in the case of a 'nited $tates branch or agency of a foreign bank, its dollar eDui(alent as determined by the
Board under sub#aragra#h ().
1. !he Board, under such conditions as it may #rescribe, may authori2e, by regulation or order, any institution to acce#t such
bills, or be obligated for a #artici#ation share in such bills, in an amount not e3ceeding at any time in the aggregate 6<< #er
centum of its #aid u# and unim#aired ca#ital stock and sur#lus or, in the case of a 'nited $tates branch or agency of a foreign
bank, its dollar eDui(alent as determined by the Board under sub#aragra#h ().
D. =otwithstanding sub#aragra#hs (B) and (1), with res#ect to any institution, the aggregate acce#tances, including obligations
for a #artici#ation share in such acce#tances, growing out of domestic transactions shall not e3ceed >< #er centum of the
aggregate of all acce#tances, including obligations for a #artici#ation share in such acce#tances, authori2ed for such institution
under this #aragra#h.
B. =o institution shall acce#t bills, or be obligated for a #artici#ation share in such bills, whether in a foreign or domestic
transaction, for any one #erson, #artnershi#, cor#oration, association or other entity in an amount eDual at any time in the
aggregate to more than ,< #er centum of its #aid u# and unim#aired ca#ital stock and sur#lus, or, in the case of a 'nited
$tates branch or agency of a foreign bank, its dollar eDui(alent as determined by the Board under sub#aragra#h (), unless
the institution is secured either by attached documents or by some other actual security growing out of the same transaction as
the acce#tance.
4. With res#ect to an institution which issues an acce#tance, the limitations contained in this #aragra#h shall not a##ly to that
#ortion of an acce#tance which is issued by such institution and which is co(ered by a #artici#ation agreement sold to another
institution.
@. 8n order to carry out the #ur#oses of this #aragra#h, the Board may define any of the terms used in this #aragra#h, and, with
res#ect to institutions which do not ha(e ca#ital or ca#ital stock, the Board shall define an eDui(alent measure to which the
limitations contained in this #aragra#h shall a##ly.
. 0ny limitation or restriction in this #aragra#h based on #aid-u# and unim#aired ca#ital stock and sur#lus of an institution shall
be deemed to refer, with res#ect to a 'nited $tates branch or agency of a foreign bank, to the dollar eDui(alent of the #aid-u#
ca#ital stock and sur#lus of the foreign bank, as determined by the Board, and if the foreign bank has more than one 'nited
$tates branch or agency, the business transacted by all such branches and agencies shall be aggregated in determining
com#liance with the limitation or restriction.
M4ormerly ,6 '$1 .:6, as amended by act of *arch ., ,-,> (.9 $tat. ->9)5 by act of $e#t. :, ,-,/ (.- $tat. :>6), which com#letely re(ised this section5 and by
acts of ;une 6,, ,-,: (+< $tat. 6.>) and Fct. 9, ,-96 (-/ $tat. ,6.-). Fmitted from the '.$. 1ode.N
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9. 0d(ances to *ember Banks on Promissory =otes
0ny 4ederal reser(e bank may make ad(ances for #eriods not e3ceeding fifteen days to its member banks on their #romissory notes
secured by the de#osit or #ledge of bonds, notes, certificates of indebtedness, or !reasury bills of the 'nited $tates, or by the de#osit
or #ledge of debentures or other such obligations of 4ederal intermediate credit banks which are eligible for #urchase by 4ederal
reser(e banks under section ,.a of this 0ct, or by the de#osit or #ledge of bonds issued under the #ro (isions of subsection (c) of
section + of the ome FwnersI Loan 0ct of ,-.., as amended5 and any 4ederal reser(e bank may make ad(ances for #eriods not
e3ceeding ninety days to its member banks on their #romissory notes secured by such notes, drafts, bills of e3change, or bankersI
acce#tances as are eligible for rediscount or for #urchase by 4ederal reser(e banks under the #ro(isions of this 0ct, or secured by
such obligations as are eligible for #urchase under section ,+(b) of this 0ct. 0ll such ad(ances shall be made at rates to be established
by such 4ederal reser(e banks, such rates to be subKect to the re(iew and determination of the Board of @o(ernors of the 4ederal
"eser(e $ystem. 8f any member bank to which any such ad(ance has been made shall, during the life or continuance of such ad(ance,
and des#ite an official warning of the reser(e bank of the district or of the Board of @o(ernors of the 4ederal "eser(e $ystem to the
contrary, increase its outstanding loans secured by collateral in the form of stocks, bonds, debentures, or other such obligations, or
loans made to members of any organi2ed stock e3change, in(estment house, or dealer in securities, u#on any obligation, note, or bill,
secured or unsecured, for the #ur#ose of #urchasing andCor carrying stocks, bonds, or other in(estment securities (e3ce#t obligations
of the 'nited $tates) such ad(ance shall be deemed immediately due and #ayable, and such member bank shall be ineligible as a
borrower at the reser(e bank of the district under the #ro(isions of this #aragra#h for such #eriod as the Board of @o(ernors of the
4ederal "eser(e $ystem shall determine7 #ro,ie, !hat no tem#orary carrying or clearance loans made solely for the #ur#ose of
facilitating the #urchase or deli(ery of securities offered for #ublic subscri#tion shall be included in the loans referred to in this
#aragra#h.
M,6 '$1 .+:. 0s added by act of $e#t. :, ,-,/ (.- $tat. :>.), which com#letely re(ised this section5 and amended by acts of *ay ,-, ,-.6 (+: $tat. ,/<)5 *ay
,6, ,-.. (+9 $tat. +/)5 ;une ,/, ,-.. (+9 $tat. ,9<)5 ;an. .,, ,-.+ (+9 $tat. .+9)5 0#ril 6:, ,-.+ (+9 $tat. /+/)5 Fct. +, ,-/, (:> $tat. ::.)5 and $e#t. 6,, ,-/9
(96 $tat. 9>/).N
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-. 0ggregate Liabilities of =ational Banks
"e#ealed by act of Fct. ,>, ,-96 (-/ $tat. ,>,<).
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,<. "egulation by Board of @o(ernors of Discounts, Purchases and $ales
!he discount and rediscount and the #urchase and sale by any 4ederal reser(e bank of any bills recei(able and of domestic and
foreign bills of e3change, and of acce#tances authori2ed by this 0ct, shall be subKect to such restrictions, limitations, and regulations as
may be im#osed by the Board of @o(ernors of the 4ederal "eser(e $ystem.
MFmitted from '.$. 1ode. 0s amended by act of $e#t. :, ,-,/ (.- $tat. :>.), which com#letely re(ised this section.N
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,,. =ational Banks as 8nsurance 0gents or "eal Bstate Loan Brokers
!hat in addition to the #owers now (ested by law in national banking associations organi2ed under the laws of the 'nited $tates any
such association located and doing business in any #lace the #o#ulation of which does not e3ceed fi(e thousand inhabitants, as shown
by the last #receding decennial census, may, under such rules and regulations as may be #rescribed by the 1om#troller of the
1urrency, act as the agent for any fire, life, or other insurance com#any authori2ed by the authorities of the $tate in which said bank is
located to do business in said $tate, by soliciting and selling insurance and collecting #remiums on #olicies issued by such com#any5
and may recei(e for ser(ices so rendered such fees or commissions as may be agreed u#on between the said association and the
insurance com#any for which it may act as agent5 and may also act as the broker or agent for others in making or #rocuring loans on
real estate located within one hundred miles of the #lace in which said bank may be located, recei(ing for such ser(ices a reasonable
fee or commission7 #ro,ie) howe,er, !hat no such bank shall in any case guarantee either the #rinci#al or interest of any such loans
or assume or guarantee the #ayment of any #remium on insurance #olicies issued through its agency by its #rinci#al7 An pro,ie
further, !hat the bank shall not guarantee the truth of any statement made by an assured in filing his a##lication for insurance.
MFmitted from '.$. 1ode. 0s added by act of $e#t. :, ,-,/ (.- $tat. :>.), which com#letely re(ised this section.N
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,6. Bank 0cce#tances to 1reate Dollar B3change
0ny member bank may acce#t drafts or bills of e3change drawn u#on it ha(ing not more than three monthsI sight to run, e3clusi(e of
days of grace, drawn under regulations to be #rescribed by the Board of @o(ernors of the 4ederal "eser(e $ystem by banks or
bankers in foreign countries or de#endencies or insular #ossessions of the 'nited $tates for the #ur#ose of furnishing dollar e3change
as reDuired by the usages of trade in the res#ecti(e countries, de#endencies, or insular #ossessions. $uch drafts or bills may be
acDuired by 4ederal reser(e banks in such amounts and subKect to such regulations, restrictions, and limitations as may be #rescribed
by the Board of @o(ernors of the 4ederal "eser(e $ystem7 #ro,ie) howe,er, !hat no member bank shall acce#t such drafts or bills
of e3change referred to
,
this #aragra#h for any one bank to an amount e3ceeding in the aggregate ten #er centum of the #aid-u# and
unim#aired ca#ital and sur#lus of the acce#ting bank unless the draft or bill of e3change is accom#anied by documents con(eying or
securing title or by some other adeDuate security7 #ro,ie further, !hat no member bank shall acce#t such drafts or bills in an amount
e3ceeding at any time the aggregate of one-half of its #aid-u# and unim#aired ca#ital and sur#lus.
M4ormerly ,6 '$1 .:., as added by act of $e#t. :, ,-,/ (.- $tat. :>+), which com#letely re(ised this section. =ot codified to the 4ederal "eser(e 0ct. Fmitted
from the '.$. 1ode.N
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,.. 0d(ances to 8ndi(iduals, Partnershi#s, and 1or#orations on Fbligations of 'nited $tates
$ubKect to such limitations, restrictions and regulations as the Board of @o(ernors of the 4ederal "eser(e $ystem may #rescribe, any
4ederal reser(e bank may make ad(ances to any indi(idual, #artnershi# or cor#oration on the #romissory notes of such indi(idual,
#artnershi# or cor#oration secured by direct obligations of the 'nited $tates or by any obligation which is a direct obligation of, or fully
guaranteed as to #rinci#al and interest by, any agency of the 'nited $tates. $uch ad(ances shall be made for #eriods not e3ceeding
-< days and shall bear interest at rates fi3ed from time to time by the 4ederal reser(e bank, subKect to the re(iew and determination of
the Board of @o(ernors of the 4ederal "eser(e $ystem.
M,6 '$1 .+:c. 0s added by act of *arch -, ,-.. (+9 $tat. :) and amended by act of $e#t. 6,, ,-/9 (96 $tat. 9>/).N
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,+. "ecei#t of De#osits from, Discount Pa#er Bndorsed by, and 0d(ances to 4oreign Banks
$ubKect to such restrictions, limitations, and regulations as may be im#osed by the Board of @o(ernors of the 4ederal "eser(e $ystem,
each 4ederal "eser(e bank may recei(e de#osits from, discount #a#er endorsed by, and make ad(ances to any branch or agency of a
foreign bank in the same manner and to the same e3tent that it may e3ercise such #owers with res#ect to a member bank if such
branch or agency is maintaining reser(es with such "eser(e bank #ursuant to section : of the 8nternational Banking 0ct of ,-:9. 8n
e3ercising any such #owers with res#ect to any such branch or agency, each 4ederal "eser(e bank shall gi(e due regard to account
balances being maintained by such branch or agency with such "eser(e bank and the #ro#ortion of the assets of such branch or
agency being held as reser(es under section : of the 8nternational Banking 0ct of ,-:9. 4or the #ur#oses of this #aragra#h, the terms
HbranchH, HagencyH, and Hforeign bankH shall ha(e the same meanings assigned to them in section , of the 8nternational Banking 0ct of
,-:9.
M,6 '$1 .+:d. 0s added by act of $e#t. ,:, ,-:9 (-6 $tat. /6,).N
, $o in original. Probably should read Hreferred to in this #aragra#h.H
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%ection /=!. Ciscount of !gricultural 2aper M
,. 0uthority of 4ederal "eser(e Banks to Discount 0gricultural Pa#er
'#on the indorsement of any of its member banks, which shall be deemed a wai(er of demand, notice, and #rotest by such bank as to
its own indorsement e3clusi(ely, any 4ederal reser(e bank may, subKect to regulations and limitations to be #rescribed by the Board of
@o(ernors of the 4ederal "eser(e $ystem, discount notes, drafts, and bills of e3change issued or drawn for an agricultural #ur#ose, or
based u#on li(e stock, and ha(ing a maturity, at the time of discount, e3clusi(e of days of grace, not e3ceeding nine months, and such
notes, drafts, and bills of e3change may be offered as collateral security for the issuance of 4ederal reser(e notes under the #ro(isions
of section ,/ of this 0ct7 #ro,ie) !hat notes, drafts, and bills of e3change with maturities in e3cess of si3 months shall not be eligible
as a basis for the issuance of 4ederal reser(e notes unless secured by warehouse recei#ts or other such negotiable documents
con(eying or securing title to readily marketable sta#le agricultural #roducts or by chattel mortgage u#on li(e stock which is being
fattened for market.
M,6 '$1 .+9. 0s added by act of *arch +, ,-6. (+6 $tat. ,+:-).N
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6. "ediscounts for, and Discount of =otes Payable to, 4ederal 8ntermediate 1redit Banks
!hat any 4ederal reser(e bank may, subKect to regulations and limitations to be #rescribed by the Board of @o(ernors of the 4ederal
"eser(e $ystem, rediscount such notes, drafts, and bills for any 4ederal 8ntermediate 1redit Bank, e3ce#t that no 4ederal reser(e bank
shall rediscount for a 4ederal 8ntermediate 1redit Bank any such note or obligation which bears the indorsement of a nonmember $tate
bank or trust com#any which is eligible for membershi# in the 4ederal reser(e system, in accordance with section - of this 0ct. 0ny
4ederal reser(e bank may also, subKect to regulations and limitations to be #rescribed by the Board of @o(ernors of the 4ederal
"eser(e $ystem, discount notes #ayable to and bearing the indorsement of any 4ederal intermediate credit bank, co(ering loans or
ad(ances made by such bank #ursuant to the #ro(isions of section 6<6(a) of !itle 88 of the 4ederal 4arm Loan 0ct, as amended
('.$.1., title ,6, ch. 9, sec. ,<.,), which ha(e maturities at the time of discount of not more than nine months, e3clusi(e of days of
grace, and which are secured by notes, drafts, or bills of e3change eligible for rediscount by 4ederal "eser(e banks.
M,6 '$1 .+-. 0s added by act of *arch +, ,-6. (+6 $tat. ,+9<)5 and amended by act of *ay ,-, ,-.6 (+: $tat. ,/<).N
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.. Purchase and $ale of Debentures of 4ederal 8ntermediate 1redit Banks
0ny 4ederal reser(e bank may also buy and sell debentures and other such obligations issued by a 4ederal 8ntermediate 1redit Bank
or by a =ational 0gricultural 1redit 1or#oration, but only to the same e3tent as and subKect to the same limitations as those u#on which
it may buy and sell bonds issued under !itle 8 of the 4ederal 4arm Loan 0ct.
M,6 '$1 .><. 0s added by act of *arch +, ,-6. (+6 $tat. ,+9<). !he meaning of the term HdebenturesH, as used abo(e, was affected by act of 0ug. ,-, ,-.:
(>< $tat. :,9), ,6 '$1 ,<+<, which #ro(ides7
H!he terms IdebentureI and IdebenturesI, when used in any 0ct of 1ongress, whene(er enacted, e3ce#t the 4ederal 4arm Loan 0ct, relating to the #urchase,
sale, or use as security, of debentures issued by or for the benefit and account of any 4ederal intermediate credit bank or banks, shall be deemed to mean
debentures issued by any such bank indi(idually and consolidated debentures issued by such banks acting together.HN
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+. Pa#er of 1oo#erati(e *arketing 0ssociations
=otes, drafts, bills of e3change or acce#tances issued or drawn by coo#erati(e marketing associations com#osed of #roducers of
agricultural #roducts shall be deemed to ha(e been issued or drawn for an agricultural #ur#ose, within the meaning of this section, if
the #roceeds thereof ha(e been or are to be ad(anced by such association to any members thereof for an agricultural #ur#ose, or ha(e
been or are to be used by such association in making #ayments to any members thereof on account of agricultural #roducts deli(ered
by such members to the association, or if such #roceeds ha(e been or are to be used by such association to meet e3#enditures
incurred or to be incurred by the association in connection with the grading, #rocessing, #acking, #re#aration for market, or marketing
of any agricultural #roduct handled by such association for any of its members7 #ro,ie) !hat the e3#ress enumeration in this
#aragra#h of certain classes of #a#er of coo#erati(e marketing associations as eligible for rediscount shall not be construed as
rendering ineligible any other class of #a#er of such associations which is now eligible for rediscount.
M,6 '$1 .>,. 0s added by act of *arch +, ,-6. (+6 $tat. ,+9<).N
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>. Limitations
!he Board of @o(ernors of the 4ederal "eser(e $ystem may, by regulation, limit to a #ercentage of the assets of a 4ederal reser(e
bank the amount of notes, drafts, acce#tances, or bills ha(ing a maturity in e3cess of three months, but not e3ceeding si3 months,
e3clusi(e of days of grace, which may be discounted by such bank, and the amount of notes, drafts, bills, or acce#tance ha(ing a
maturity in e3cess of si3 months, but not e3ceeding nine months, which may be rediscounted by such bank.
M,6 '$1 .>6. 0s added by act of *arch +, ,-6. (+6 $tat. ,+9<).N
L Pre(iously section ,.a, this section was redesignated by act of Dec. ,-, ,--, (,<> $tat. 669,).
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%ection /8. +pen arket +perations
Purchase and $ale of 1able !ransfers, Bank 0cce#tances and Bills of B3change
0ny 4ederal reser(e bank may, under rules and regulations #rescribed by the Board of @o(ernors of the 4ederal "eser(e $ystem,
#urchase and sell in the o#en market, at home or abroad, either from or to domestic or foreign banks, firms, cor#orations, or
indi(iduals, cable transfers and bankersI acce#tances and bills of e3change of the kinds and maturities by this 0ct made eligible for
rediscount, with or without the indorsement of a member bank.
M,6 '$1 .>.. Part of original 4ederal "eser(e 0ct5 not amended.N
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Dealings in, and Loans on, @old
B(ery 4ederal reser(e bank shall ha(e #ower7
(a" !o deal in gold coin and bullion at home or abroad, to make loans thereon, e3change 4ederal reser(e notes for gold, gold coin, or
gold certificates, and to contract for loans of gold coin or bullion, gi(ing therefor, when necessary, acce#table security, including the
hy#othecation of 'nited $tates bonds or other securities which 4ederal reser(e banks are authori2ed to hold5
M,6 '$1 .>+. Part of original 4ederal "eser(e 0ct5 not amended. $ee also ,6 '$1 >,,/ through >,,9.N
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Purchase and $ale of Fbligations of 'nited $tates, $tates, 1ounties, etc., and of 4oreign @o(ernments
(b"
,. !o buy and sell, at home or abroad, bonds and notes of the 'nited $tates, bonds issued under the #ro(isions of subsection (c)
of section + of the ome FwnersI Loan 0ct of ,-.., as amended, and ha(ing maturities from date of #urchase of not
e3ceeding si3 months, and bills, notes, re(enue bonds, and warrants with a maturity from date of #urchase of not e3ceeding
si3 months, issued in antici#ation of the collection of ta3es or in antici#ation of the recei#t of assured re(enues by any $tate,
county, district, #olitical subdi(ision, or munici#ality in the continental 'nited $tates, including irrigation, drainage and
reclamation districts, and obligations of, or fully guaranteed as to #rinci#al and interest by, a foreign go(ernment or agency
thereof, such #urchases to be made in accordance with rules and regulations #rescribed by the Board of @o(ernors of the
4ederal "eser(e $ystem. =otwithstanding any other #ro(ision of this cha#ter, any bonds, notes, or other obligations which are
direct obligations of the 'nited $tates or which are fully guaranteed by the 'nited $tates as to the #rinci#al and interest may
be bought and sold without regard to maturities but only in the o#en market.
6. !o buy and sell in the o#en market, under the direction and regulations of the 4ederal F#en *arket 1ommittee, any obligation
which is a direct obligation of, or fully guaranteed as to #rinci#al and interest by, any agency of the 'nited $tates.
M,6 '$1 .>>. 0s amended by acts of ;an. .,, ,-.+ (+9 $tat. .+9)5 0#ril 6:, ,-.+ (+9 $tat. /+/)5 0ug. 6., ,-.> (+- $tat. :</)5 *arch 6:, ,-+6 (>/ $tat. ,9<)5
0#ril 69, ,-+: (/, $tat. >/)5 ;une .<, ,->< (/+ $tat. .<:)5 ;une 6., ,->6 (// $tat. ,>+)5 ;une 6-, ,->+ (/9 $tat. .6-)5 ;une 6>, ,->/ (:< $tat. ..-)5 ;une .<,
,->9 (:6 $tat. 6/,)5 ;uly ,, ,-/< (:+ $tat. 6->)5 Fct. +, ,-/, (:> $tat. ::.)5 ;une 69, ,-/6 (:/ $tat. ,,6)5 ;une .<, ,-/+ (:9 $tat. 6.>)5 ;une .<, ,-// (9< $tat.
6.>)5 $e#t. 6,, ,-// (9< $tat. 96>) (as amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) and $e#t. 6,, ,-/9 (96 $tat. 9>/)5 *ay +, ,-/9 (96 $tat. ,,.)5 ;uly .,,
,-:< (9+ $tat. //9)5 ;uly 6, ,-:, (9> $tat. ,<<)5 0ug. ,+, ,-:. (9: $tat. .,+)5 Fct. 69, ,-:+ (99 $tat. ,><>)5 =o(. ,6, ,-:> (9- $tat. /.9)5 0#ril ,-, ,-:: (-,
$tat. +-)5 Fct. ,6, ,-:: (-, $tat. ,,.,)5 =o(. :, ,-:: (-, $tat. ,6>/)5 ;une 9, ,-:- (-. $tat. .>)5 and *arch .,, ,-9< (-+ $tat. ,+<). $ee also ,6 '$1 6,>9 and
., '$1 >.<,. !he Hcontinental 'nited $tatesH is defined in #aragra#h . of section , of the 4ederal "eser(e 0ct, so as to mean the H$tates of the 'nited $tates
and the District of 1olumbia.HN
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Purchase and $ale of Bills of B3change
(+" !o #urchase from member banks and to sell, with or without its indorsement, bills of e3change arising out of commercial
transactions, as hereinbefore defined5
M,6 '$1 .>/. Part of original 4ederal "eser(e 0ct5 not amended.N
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"ates of Discount
(#" !o establish from time to time, subKect to re(iew and determination of the Board of @o(ernors of the 4ederal "eser(e $ystem, rates
of discount to be charged by the 4ederal reser(e bank for each class of #a#er, which shall be fi3ed with a (iew of accommodating
commerce and business5 but each such bank shall establish such rates e(ery fourteen days, or oftener if deemed necessary by the
Board5
M,6 '$1 .>:. 0s amended by acts of 0#ril ,., ,-6< (+, $tat. >><)5 *arch +, ,-6. (+6 $tat. ,+9<)5 0ug. 6., ,-.> (+- $tat. :</).N
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4oreign 1orres#ondents and 0gencies
(e" !o establish accounts with other 4ederal reser(e banks for e3change #ur#oses and, with the consent or u#on the order and
direction of the Board of @o(ernors of the 4ederal "eser(e $ystem and under regulations to be #rescribed by said board, to o#en and
maintain accounts in foreign countries, a##oint corres#ondents, and establish agencies in such countries wheresoe(er it may be
deemed best for the #ur#ose of #urchasing, selling, and collecting bills of e3change, and to buy and sell, with or without its
indorsement, through such corres#ondents or agencies, bills of e3change (or acce#tances) arising out of actual commercial
transactions which ha(e not more than ninety days to run, e3clusi(e of days of grace, and which bear the signature of two or more
res#onsible #arties, and, with the consent of the Board of @o(ernors of the 4ederal "eser(e $ystem, to o#en and maintain banking
accounts for such foreign corres#ondents or agencies, or for foreign banks or bankers, or for foreign states as defined in section 6>(b)
of this 0ct. Whene(er any such account has been o#ened or agency or corres#ondent has been a##ointed by a 4ederal reser(e bank,
with the consent of or under the order and direction of the Board of @o(ernors of the 4ederal "eser(e $ystem, any other 4ederal
reser(e bank may, with the consent and a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem, be #ermitted to carry on
or conduct, through the 4ederal reser(e bank o#ening such account or a##ointing such agency or corres#ondent, any transaction
authori2ed by this section under rules and regulations to be #rescribed by the board.
M,6 '$1 .>9. 0s amended by acts of $e#t. :, ,-,/ (.- $tat. :>+)5 ;une 6,, ,-,: (+< $tat. 6.>)5 0#ril :, ,-+, (>> $tat. ,.,).N
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Purchase and $ale of 0cce#tances of 4ederal 8ntermediate 1redit Banks
(f" !o #urchase and sell in the o#en market, either from or to domestic banks, firms, cor#orations, or indi(iduals, acce#tances of
4ederal 8ntermediate 1redit Banks and of =ational 0gricultural 1redit 1or#orations, whene(er the Board of @o(ernors of the 4ederal
"eser(e $ystem shall declare that the #ublic interest so reDuires.
M,6 '$1 .>-. 0s added by act of *arch +, ,-6. (+6 $tat. ,+9<).N
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"elationshi#s and !ransactions with 4oreign Banks and Bankers
(g" !he Board of @o(ernors of the 4ederal "eser(e $ystem shall e3ercise s#ecial su#er(ision o(er all relationshi#s and transactions of
any kind entered into by any 4ederal reser(e bank with any foreign bank or banker, or with any grou# of foreign banks or bankers, and
all such relationshi#s and transactions shall be subKect to such regulations, conditions, and limitations as the Board may #rescribe. =o
officer or other re#resentati(e of any 4ederal reser(e bank shall conduct negotiations of any kind with the officers or re#resentati(es of
any foreign bank or banker without first obtaining the #ermission of the Board of @o(ernors of the 4ederal "eser(e $ystem. !he Board
of @o(ernors of the 4ederal "eser(e $ystem shall ha(e the right, in its discretion, to be re#resented in any conference or negotiations
by such re#resentati(e or re#resentati(es as the Board may designate. 0 full re#ort of all conferences or negotiations, and all
understandings or agreements arri(ed at or transactions agreed u#on, and all other material facts a##ertaining to such conferences or
negotiations, shall be filed with the Board of @o(ernors of the 4ederal "eser(e $ystem in writing by a duly authori2ed officer of each
4ederal reser(e bank which shall ha(e #artici#ated in such conferences or negotiations.
M,6 '$1 .+9a. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,9,).N
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%ection /K. Government Ceposits
,. 4ederal "eser(e Banks as De#ositaries and 4iscal 0gents of 'nited $tates
!he moneys held in the general fund of the !reasury, e3ce#t the fi(e #er centum fund for the redem#tion of outstanding national-bank
notes may, u#on the direction of the $ecretary of the !reasury, be de#osited in 4ederal reser(e banks, which banks, when reDuired by
the $ecretary of the !reasury, shall act as fiscal agents of the 'nited $tates5 and the re(enues of the @o(ernment or any #art thereof
may be de#osited in such banks, and disbursements may be made by checks drawn against such de#osits.
M,6 '$1 .-,. 0s amended by the act of *arch ,9, ,-/9 (96 $tat. ><). 0lso, in effect amended by 0ct of *ay 6-, ,-6< (+, $tat. />+).
"eimbursement as fiscal agents is #ro(ided by ., '$1 ..<6(f) as follows7
H(f) When authori2ed by the $ecretary, an official or agent of the @o(ernment ha(ing custody or #ossession of #ublic money, or #erforming other fiscal agent
ser(ices, may be allowed necessary e3#enses to collect, kee#, transfer, and #ay out #ublic money and to #erform those ser(ices. owe(er, money a##ro#riated
for those e3#enses may not be used to em#loy or #ay officers and em#loyees of the @o(ernment.HN
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6. =onmember Banks as De#ositaries of 'nited $tates
=o #ublic funds of the Phili##ine 8slands, or of the #ostal sa(ings, or any @o(ernment funds, shall be de#osited in the continental
'nited $tates in any bank not belonging to the system established by this 0ct7 #ro,ie) howe,er) !hat nothing in this 0ct shall be
construed to deny the right of the $ecretary of the !reasury to use member banks as de#ositaries.
M,6 '$1 .-6. Part of original 4ederal "eser(e 0ct5 not s#ecifically amended, but amended in effect by the following statutes #ermitting the de#osit of
go(ernment funds in nonmember banks7 'nder section ,< of the act of ;une ,,, ,-+6, all insured banks designated for the #ur#ose by the $ecretary of the
!reasury may be de#ositaries of #ublic moneys of the 'nited $tates under the Liberty Bond 0cts, the #roceeds of sales of Liberty bonds may be de#osited in
nonmember banks5 and under the 8nternal "e(enue 1ode, the $ecretary of the !reasury may authori2e banks or trust com#anies to recei(e ta3es. 4or
designation of state member banks as de#ositaries of #ublic money, see section - of the 4ederal "eser(e 0ct5 for designation of national banks as de#ositaries
of #ublic money, see section >,>. of the "e(ised $tatutes. H1ontinental 'nited $tatesH means Hthe $tates of the 'nited $tates and the District of 1olumbia.H
(4ederal "eser(e 0ct, section ,, third #aragra#h.) Presidential Proclamation =o. 6/-> of ;uly +, ,-+/ (/< $tat. ,.>65 ,6 '$1 ,.-+ note) recogni2es the
inde#endence of the Phili##ine 8slands. !herefore the words Hof the Phili##ine 8slands orH ha(e been omitted from the '.$. 1ode.N
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.. De#ositaries and 4iscal 0gents of 8nstitutions of the 4arm 1redit $ystem
!he 4ederal "eser(e banks are authori2ed to act as de#ositaries for and fiscal agents of any 4ederal land bank, 4ederal intermediate
credit bank, bank for coo#erati(es, or other institutions of the 4arm 1redit $ystem.
M,6 '$1 .-.. 0s added by act of *arch +, ,-6. (+6 $tat. ,+9<)5 and amended by act of Dec. ,<, ,-:, (9> $tat. /6>).N
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%ection /L. Bote Issues
,. 8ssuance of 4ederal "eser(e =otes5 =ature of Fbligation5 Where "edeemable
4ederal reser(e notes, to be issued at the discretion of the Board of @o(ernors of the 4ederal "eser(e $ystem for the #ur#ose of
making ad(ances to 4ederal reser(e banks through the 4ederal reser(e agents as hereinafter set forth and for no other #ur#ose, are
hereby authori2ed. !he said notes shall be obligations of the 'nited $tates and shall be recei(able by all national and member banks
and 4ederal reser(e banks and for all ta3es, customs, and other #ublic dues. !hey shall be redeemed in lawful money on demand at
the !reasury De#artment of the 'nited $tates, in the city of Washington, District of 1olumbia, or at any 4ederal "eser(e bank.
M,6 '$1 +,,. 0s amended by act of ;an. .<, ,-.+ (+9 $tat. ..:). 4or redem#tion of 4ederal reser(e notes whose bank of issue cannot be identified, see act of
;une ,., ,-...N
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6. 0##lication for =otes by 4ederal "eser(e Banks
0ny 4ederal "eser(e bank may make a##lication to the local 4ederal "eser(e agent for such amount of the 4ederal "eser(e notes
hereinbefore #ro(ided for as it may reDuire. $uch a##lication shall be accom#anied with a tender to the local 4ederal "eser(e agent of
collateral in amount eDual to the sum of the 4ederal "eser(e notes thus a##lied for and issued #ursuant to such a##lication. !he
collateral security thus offered shall be notes, drafts, bills of e3change, or acce#tances acDuired under section ,<0, ,<B, ,., or ,.0 of
this 0ct, or bills of e3change endorsed by a member bank of any 4ederal "eser(e district and #urchased under the #ro(isions of
section ,+ of this 0ct, or bankersI acce#tances #urchased under the #ro(isions of said section ,+, or gold certificates, or $#ecial
Drawing "ight certificates, or any obligations which are direct obligations of, or are fully guaranteed as to #rinci#al and interest by, the
'nited $tates or any agency thereof, or assets that 4ederal "eser(e banks may #urchase or hold under section ,+ of this 0ct or any
other asset of a 4ederal reser(e bank. 8n no e(ent shall such collateral security be less than the amount of 4ederal "eser(e notes
a##lied for. !he 4ederal "eser(e agent shall each day notify the Board of @o(ernors of the 4ederal "eser(e $ystem of all issues and
withdrawals of 4ederal "eser(e notes to and by the 4ederal "eser(e bank to which he is accredited. !he said Board of @o(ernors of
the 4ederal "eser(e $ystem may at any time call u#on a 4ederal "eser(e bank for additional security to #rotect the 4ederal "eser(e
notes issued to it. 1ollateral shall not be reDuired for 4ederal "eser(e notes which are held in the (aults of, or are otherwise held by or
on behalf of, 4ederal "eser(e banks.
M,6 '$1 +,6. 0s amended by the acts of $e#t. :, ,-,/ (.- $tat. :>+)5 ;une 6,, ,-,: (+< $tat. 6./)5 4eb. 6:, ,-.6 (+: $tat. >:)5 4eb. ., ,-.. (+: $tat. :-+)5
;an. .<, ,-.+ (+9 $tat. ..9)5 *arch /, ,-.+ (+9 $tat. --,)5 ;une .<, ,-+, (>> $tat. .->)5 *ay 6>, ,-+. (>: $tat. 9>)5 ;une ,6, ,-+> (>- $tat. 6.:)5 ;une ,-,
,-/9 (96 $tat. ,9-)5 =o(. ,<, ,-:9 (-6 $tat. ./:6)5 *arch .,, ,-9< (-+ $tat. ,+<)5 Dec. /, ,--- (,,. $tat. ,/.9)5 and Fct. 69, 6<<. (,,: $tat. ,,-.).N
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.. Distincti(e Letter on =otes5 Destruction of 'nfit =otes
4ederal "eser(e notes shall bear u#on their faces a distincti(e letter and serial number which shall be assigned by the Board of
@o(ernors of the 4ederal "eser(e $ystem to each 4ederal "eser(e bank. 4ederal "eser(e notes unfit for circulation shall be canceled,
destroyed, and accounted for under #rocedures #rescribed and at locations designated by the $ecretary of the !reasury. '#on
destruction of such notes, credit with res#ect thereto shall be a##ortioned among the twel(e 4ederal "eser(e banks as determined by
the Board of @o(ernors of the 4ederal "eser(e $ystem.
M,6 '$1 +,.. 0s amended by acts of ;une 6,, ,-,: (+< $tat. 6./)5 ;an. .<, ,-.+ (+9 $tat. ..9)5 ;une ,6, ,-+> (>- $tat. 6.:)5 ;uly ,-, ,->+ (/9 $tat. +->)5
*arch ., ,-/> (:- $tat. >)5 *ay 6<, ,-// (9< $tat. ,/,)5 and *arch ,9, ,-/9 (96 $tat. ><).N
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+. @ranting "ight to 8ssue =otes
!he Board of @o(ernors of the 4ederal "eser(e $ystem shall ha(e the right, acting through the 4ederal "eser(e agent, to grant in
whole or in #art, or to reKect entirely the a##lication of any 4ederal "eser(e bank for 4ederal "eser(e notes5 but to the e3tent that such
a##lication may be granted the Board of @o(ernors of the 4ederal "eser(e $ystem shall, through its local 4ederal "eser(e agent,
su##ly 4ederal "eser(e notes to the banks so a##lying, and such bank shall be charged with the amount of the notes issued to it and
shall #ay such rate of interest as may be established by the Board of @o(ernors of the 4ederal "eser(e $ystem on only that amount of
such notes which eDuals the total amount of its outstanding 4ederal "eser(e notes less the amount of gold certificates held by the
4ederal "eser(e agent as collateral security. 4ederal "eser(e notes issued to any such bank shall, u#on deli(ery, together with such
notes of such 4ederal "eser(e bank as may be issued under section ,9 of this 0ct u#on security of 'nited $tates 6 #er centum
@o(ernment bonds, become a first and #aramount lien on all the assets of such bank.
M,6 '$1 +,+. 0s amended by acts of ;une 6,, ,-,: (+< $tat. 6.:)5 ;an. .<, ,-.+ (+9 $tat. ..9)5 ;une ,6, ,-+> (>- $tat. 6.:)5 and *arch ,9, ,-/9 (96 $tat.
><).N
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>. De#osit to "educe Liability for Futstanding =otes
0ny 4ederal "eser(e bank may at any time reduce its liability for outstanding 4ederal "eser(e notes by de#ositing with the 4ederal
"eser(e agent its 4ederal "eser(e notes, gold certificates, $#ecial Drawing "ight certificates, or lawful money of the 'nited $tates.
4ederal "eser(e notes so de#osited shall not be reissued, e3ce#t u#on com#liance with the conditions of an original issue. !he liability
of a 4ederal "eser(e bank with res#ect to its outstanding 4ederal "eser(e notes shall be reduced by any amount #aid by such bank to
the $ecretary of the !reasury under section + of the Fld $eries 1urrency 0dKustment 0ct.
M,6 '$1 +,>. 0s reenacted by act of ;une 6,, ,-,: (+< $tat. 6.:)5 and as amended by acts of ;an. .<, ,-.+ (+9 $tat. ..-)5 ;une .<, ,-/, (:> $tat. ,+:)5 *arch
,9, ,-/9 (96 $tat. ><)5 and ;une ,-, ,-/9 (96 $tat. ,9-). !he act of ;une .<, ,-/,, is the Fld $eries 1urrency 0dKustment 0ct.N
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/. $ubstitution of 1ollateral5 "etirement of 4ederal "eser(e =otes
0ny 4ederal reser(e bank may at its discretion withdraw collateral de#osited with the local 4ederal reser(e agent for the #rotection of
its 4ederal reser(e notes issued to it and shall at the same time substitute therefor other collateral of eDual amount with the a##ro(al of
the 4ederal reser(e agent under regulations to be #rescribed by the Board of @o(ernors of the 4ederal "eser(e $ystem. 0ny 4ederal
reser(e bank may retire any of its 4ederal reser(e notes by de#ositing them with the 4ederal reser(e agent or with the !reasurer of the
'nited $tates, and such 4ederal reser(e bank shall thereu#on be entitled to recei(e back the collateral de#osited with the 4ederal
reser(e agent for the security of such notes. 0ny 4ederal "eser(e bank shall further be entitled to recei(e back the collateral de#osited
with the 4ederal "eser(e agent for the security of any notes with res#ect to which such bank has made #ayment to the $ecretary of the
!reasury under section + of the Fld $eries 1urrency 0dKustment 0ct. 4ederal reser(e notes so de#osited shall not be reissued e3ce#t
u#on com#liance with the conditions of an original issue.
M,6 '$1 +,/. 0s amended by acts of ;une 6,, ,-,: (+< $tat. 6.:)5 ;une .<, ,-/, (:> $tat. ,+:)5 and *arch ,9, ,-/9 (96 $tat. ><). !he act of ;une .<, ,-/, is
the Fld $eries 1urrency 0dKustment 0ct.N
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:. 1ustody of "eser(e =otes, @old 1ertificates, and Lawful *oney
0ll 4ederal "eser(e notes and all gold certificates, $#ecial Drawing "ight certificates, and lawful money issued to or de#osited with any
4ederal "eser(e agent under the #ro(isions of the 4ederal "eser(e 0ct shall hereafter be held for such agent, under such rules and
regulations as the Board of @o(ernors of the 4ederal "eser(e $ystem may #rescribe, in the Koint custody of himself and the 4ederal
"eser(e bank to which he is accredited. $uch agent and such 4ederal "eser(e bank shall be Kointly liable for the safekee#ing of such
4ederal "eser(e notes, gold certificates, $#ecial Drawing "ight certificates, and lawful money. =othing herein contained, howe(er,
shall be construed to #rohibit a 4ederal "eser(e agent from de#ositing gold certificates and $#ecial Drawing "ight certificates with the
Board of @o(ernors of the 4ederal "eser(e $ystem, to be held by such Board subKect to his order, or with the !reasurer of the 'nited
$tates for the #ur#oses authori2ed by law.
M,6 '$1 +,:. 0s added by act of ;une 6,, ,-,: (+< $tat. 6.9)5 and amended by acts of ;an. .<, ,-.+ (+9 $tat. ..-) and ;une ,-, ,-/9 (96 $tat. ,9-).N
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9. Bngra(ing of Plates5 Denominations and 4orm of =otes
8n order to furnish suitable notes for circulation as 4ederal reser(e notes, the $ecretary of the !reasury shall cause #lates and dies to
be engra(ed in the best manner to guard against counterfeits and fraudulent alterations, and shall ha(e #rinted therefrom and
numbered such Duantities of such notes of the denominations of G,, G6, G>, G,<, G6<, G><, G,<<, G><<, G,,<<< G>,<<<, G,<,<<< as
may be reDuired to su##ly the 4ederal reser(e banks. $uch notes shall be in form and tenor as directed by the $ecretary of the
!reasury under the #ro(isions of this 0ct and shall bear the distincti(e numbers of the se(eral 4ederal reser(e banks through which
they are issued.
M,6 '$1 +,9. 0s amended by acts of $e#t. 6/, ,-,9 (+< $tat. -:<)5 ;une +, ,-/. (:: $tat. >+)5 and $e#t. 6., ,--+ (,<9 $tat. 66-.).N
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-. 1ustody of 'nissued =otes
When such notes ha(e been #re#ared, the notes shall be deli(ered to the Board of @o(ernors of the 4ederal "eser(e $ystem subKect
to the order of the $ecretary of the !reasury for the deli(ery of such notes in accordance with this 0ct.
M,6 '$1 +,-. 0s amended by acts of *ay 6-, ,-6< (+, $tat. />+) and $e#t. 6., ,--+ (,<9 $tat. 66-.).N
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,<. 1ustody of Plates and Dies5 B3#enses of 8ssue and "etirement of =otes
!he #lates and dies to be #rocured by the $ecretary of the !reasury for the #rinting of such circulating notes shall remain under his
control and direction, and the e3#enses necessarily incurred in e3ecuting the laws relating to the #rocuring of such notes, and all other
e3#enses incidental to their issue and retirement, shall be #aid by the 4ederal reser(e banks, and the Board of @o(ernors of the
4ederal "eser(e $ystem shall include in its estimate of e3#enses le(ied against the 4ederal reser(e banks a sufficient amount to co(er
the e3#enses herein #ro(ided for.
M,6 '$1 +6<. Part of original 4ederal "eser(e 0ct5 not amended.N
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,,. B3aminations of Plates, Dies, Btc.
!he $ecretary of the !reasury may e3amine the #lates, dies, bed #ieces, and other material used in the #rinting of 4ederal "eser(e
notes and issue regulations relating to such e3aminations.
M,6 '$1 +6,. 0s amended by act of $e#t. 6., ,--+ (,<9 $tat. 66-.).N
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,6. 0##ro#riation for Bngra(ing, Btc.
0ny a##ro#riation heretofore made out of the general funds of the !reasury for engra(ing #lates and dies, the #urchase of distincti(e
#a#er, or to co(er any other e3#ense in connection with the #rinting of national-bank notes or notes #ro(ided for by the 0ct of *ay
thirtieth, nineteen hundred and eight, and any distincti(e #a#er that may be on hand at the time of the #assage of this 0ct may be used
in the discretion of the $ecretary for the #ur#oses of this 0ct, and should the a##ro#riations heretofore made be insufficient to meet the
reDuirements of this 0ct in addition to circulating notes #ro(ided for by e3isting law, the $ecretary is hereby authori2ed to use so much
of any funds in the !reasury not otherwise a##ro#riated for the #ur#ose of furnishing the notes aforesaid7 #ro,ie) howe,er, !hat
nothing in this section contained shall be construed as e3em#ting national banks or 4ederal reser(e banks from their liability to
reimburse the 'nited $tates for any e3#enses incurred in #rinting and issuing circulating notes.
MFmitted from '.$. 1ode. Part of original 4ederal "eser(e 0ct. !his #aragra#h was in effect amended by subsection (a) of section , of the Permanent
0##ro#riation "e#eal 0ct of ,-.+, a##ro(ed ;une 6/, ,-.+ (+9 $tat. ,66+5 ., '$1, :6>), which #ro(ides7 H!hat effecti(e ;uly ,, ,-.>, such #ortions of any acts
as #ro(ide #ermanent or continuing a##ro#riations from the general fund of the !reasury to be disbursed under the a##ro#riation accounts a##earing on the
books of the @o(ernment, and listed in subsection (b) of this section, are hereby re#ealed, and any unobligated balances under such accounts as of ;une .<,
,-.>, shall be co(ered into the sur#lus fund of the !reasury.H 0mong the a##ro#riation accounts listed in subsection (b) is that for the #re#aration and issue of
4ederal reser(e notes.N
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,.. 1hecks and Drafts to Be "ecei(ed on De#osit at Par
B(ery 4ederal reser(e bank shall recei(e on de#osit at #ar from de#ository institutions or from 4ederal reser(e banks checks and other
items, including negotiable orders of withdrawal and share drafts and drafts drawn u#on any of its de#ositors, and when remitted by a
4ederal reser(e bank, checks and other items, including negotiable orders of withdrawal and share drafts and drafts drawn by any
de#ositor in any other 4ederal reser(e bank or de#ository institution u#on funds to the credit of said de#ositor in said reser(e bank or
de#ository institution. =othing herein contained shall be construed as #rohibiting a de#ository institution from charging its actual
e3#ense incurred in collecting and remitting funds, or for e3change sold to its #atrons. !he Board of @o(ernors of the 4ederal "eser(e
$ystem shall, by rule, fi3 the charges to be collected by the de#ository institutions from its #atrons whose checks and other items,
including negotiable orders of withdrawal and share drafts are cleared through the 4ederal reser(e bank and the charge which may be
im#osed for the ser(ice of clearing or collection rendered by the 4ederal reser(e bank.
M,6 '$1 ./<. 0s amended by act of *arch .,, ,-9< (-+ $tat. ,+<).N
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,+. !ransfer of 4unds 0mong 4ederal "eser(e Banks
!he Board of @o(ernors of the 4ederal "eser(e $ystem shall make and #romulgate from time to time regulations go(erning the
transfer of funds and charges therefor among 4ederal reser(e banks and their branches, and may at its discretion e3ercise the
functions of a clearing house for such 4ederal reser(e banks, or may designate a 4ederal reser(e bank to e3ercise such functions, and
may also reDuire each such bank to e3ercise the functions of a clearing house for de#ository institutions.
M,6 '$1 6+9-,. 0s amended by acts of 0ug. 6., ,-.> (+- $tat. :<+) and *arch .,, ,-9< (-+ $tat. ,+<). "eclassified (#re(iously ,6 '$1 6+9(o).N
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,>. @old De#osits and @old 1ertificate De#osits
!he $ecretary of the !reasury is hereby authori2ed and directed to recei(e de#osits of gold or of gold certificates or of $#ecial Drawing
"ight certificates with the !reasurer or any 0ssistant !reasurer of the 'nited $tates when tendered by any 4ederal "eser(e bank or
4ederal "eser(e agent for credit to its or his account with the Board of @o(ernors of the 4ederal "eser(e $ystem. !he $ecretary shall
#rescribe by regulation the form of recei#t to be issued by the !reasurer or 0ssistant !reasurer to the 4ederal "eser(e bank or 4ederal
"eser(e agent making the de#osit, and a du#licate of such recei#t shall be deli(ered to the Board of @o(ernors of the 4ederal "eser(e
$ystem by the !reasurer at Washington u#on #ro#er ad(ices from any 0ssistant !reasurer that such de#osit has been made. De#osits
so made shall be held subKect to the orders of the Board of @o(ernors of the 4ederal "eser(e $ystem and de#osits of gold or gold
certificates shall be #ayable in gold certificates, and de#osits of $#ecial Drawing "ight certificates shall be #ayable in $#ecial Drawing
"ight certificates, on the order of the Board of @o(ernors of the 4ederal "eser(e $ystem to any 4ederal "eser(e bank or 4ederal
"eser(e agent at the !reasury or at the subtreasury of the 'nited $tates nearest the #lace of business of such 4ederal "eser(e bank
or such 4ederal "eser(e agent. !he order used by the Board of @o(ernors of the 4ederal "eser(e $ystem in making such #ayments
shall be signed by the chairman or (ice chairman, or such other officers or members as the Board may by regulation #rescribe. !he
form of such order shall be a##ro(ed by the $ecretary of the !reasury.
M,6 '$1 +/:. 0s added by act of ;une 6,, ,-,: (+< $tat. 6.9)5 and amended by acts of ;an. .<, ,-.+ (+9 $tat. ..-) and ;une ,-, ,-/9 (96 $tat. ,9-). Prior to
enactment of the Banking 0ct of ,-.>, a##ro(ed 0ug. 6., ,-.>, the chairman and (ice chairman of the Board of @o(ernors of the 4ederal "eser(e $ystem were
known as the go(ernor and (ice go(ernor of the 4ederal "eser(e Board, res#ecti(ely. $ee note to section ,.N
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,/. B3#enses
!he e3#enses necessarily incurred in carrying out these #ro(isions, including the cost of the certificates or recei#ts issued for de#osits
recei(ed, and all e3#enses incident to the handling of such de#osits shall be #aid by the Board of @o(ernors of the 4ederal "eser(e
$ystem and included in its assessments against the se(eral 4ederal reser(e banks.
M,6 '$1 +/:. 0s added by act of ;une 6,, ,-,: (+< $tat. 6.9).N
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,/. B3#enses
=othing in this section shall be construed as amending section si3 of the 0ct of *arch fourteenth, nineteen hundred, as amended by
the 0cts of *arch fourth, nineteen hundred and se(en, *arch second, nineteen hundred and ele(en, and ;une twelfth, nineteen
hundred and si3teen, nor shall the #ro(isions of this section be construed to a##ly to the de#osits made or to the recei#ts or certificates
issued under those 0cts.
M,6 '$1 +/:. 0s added by act of ;une 6,, ,-,: (+< $tat. 6.-).N
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%ection />. Ceposit of )onds by Bational )anks
,. "e#eal of Pro(isions "eDuiring =ational Banks to De#osit Bonds with 'nited $tates !reasurer
$o much of the #ro(isions of section fifty-one hundred and fifty-nine of the "e(ised $tatutes of the 'nited $tates, and section four of
the 0ct of ;une twentieth, eighteen hundred and se(enty-four, and section eight of the 0ct of ;uly twelfth, eighteen hundred and eighty-
two, and of any other #ro(isions of e3isting statutes as reDuire that before any national banking association shall be authori2ed to
commence banking business it shall transfer and deli(er to the !reasurer of the 'nited $tates a stated amount of 'nited $tates
registered bonds, and so much of those #ro(isions or of any other #ro(isions of e3isting statutes as reDuire any national banking
association now or hereafter organi2ed to maintain a minimum de#osit of such bonds with the !reasurer is hereby re#ealed.
M,6 '$1 ,<,a note. 0s amended by act of ;une 6,, ,-,: (+< $tat. 6.-).N
%ection /<. $efunding )onds
,. 0##lication to $ell Bonds $ecuring 1irculation
0fter two years from the #assage of this 0ct, and at any time during a #eriod of twenty years thereafter, any member bank desiring to
retire the whole or any #art of its circulating notes, may file with the !reasurer of the 'nited $tates an a##lication to sell for its account,
at #ar and accrued interest, 'nited $tates bonds securing circulation to be retired.
M,6 '$1 ++,. Part of original 4ederal "eser(e 0ct5 not amended. Fn *arch ,,, ,-.>, the $ecretary of the !reasury called for redem#tion on ;uly ,, ,-.>, and
0ug. ,, ,-.>, res#ecti(ely, the only bonds of the 'nited $tates bearing the circulating #ri(ilege after ;uly 66, ,-.>, namely the 6 #ercent 1onsols of ,-.< and
the 6 #ercent Panama 1anal Loan bonds of ,-,/-./ and ,-,9-.9.N
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6. Purchase of Bonds by 4ederal "eser(e Banks
!he !reasurer shall, at the end of each Duarterly #eriod, furnish the Board of @o(ernors of the 4ederal "eser(e $ystem with a list of
such a##lications, and the Board of @o(ernors of the 4ederal "eser(e $ystem may, in its discretion, reDuire the 4ederal reser(e banks
to #urchase such bonds from the banks whose a##lications ha(e been filed with the !reasurer at least ten days before the end of any
Duarterly #eriod at which the Board of @o(ernors of the 4ederal "eser(e $ystem may direct the #urchase to be made7 #ro,ie, !hat
4ederal reser(e banks shall not be #ermitted to #urchase an amount to e3ceed G6>,<<<,<<< of such bonds in any one year, and which
amount shall include bonds acDuired under section four of this 0ct by the 4ederal reser(e bank.
M,6 '$1 ++6. Part of original 4ederal "eser(e 0ct5 not amended.N
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.. 0llotment of Bonds to Be Purchased
#ro,ie further) !hat the Board of @o(ernors of the 4ederal "eser(e $ystem shall allot to each 4ederal reser(e bank such #ro#ortion
of such bonds as the ca#ital and sur#lus of such bank shall bear to the aggregate ca#ital and sur#lus of all the 4ederal reser(e banks.
M,6 '$1 +,.. 0s amended by acts of ;une 6,, ,-,: (+< $tat. 6./)5 ;an. .<, ,-.+ (+9 $tat. ..9)5 ;une ,6, ,-+> (>- $tat. 6.:)5 ;uly ,-, ,->+ (/9 $tat. +->)5
*arch ., ,-/> (:- $tat. >)5 *ay 6<, ,-// (9< $tat. ,/,)5 and *arch ,9, ,-/9 (96 $tat. ><).N
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+. !ransfer and Payment
'#on notice from the !reasurer of the amount of bonds so sold for its account, each member bank shall duly assign and transfer, in
writing, such bonds to the 4ederal reser(e bank #urchasing the same, and such 4ederal reser(e bank shall, thereu#on, de#osit lawful
money with the !reasurer of the 'nited $tates for the #urchase #rice of such bonds, and the !reasurer shall #ay to the member bank
selling such bonds any balance due after deducting a sufficient sum to redeem its outstanding notes secured by such bonds, which
notes shall be canceled and #ermanently retired when redeemed.
M,6 '$1 ++.. Part of original 4ederal "eser(e 0ct5 not amended.N
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>. 4ederal "eser(e Bank =otes
!he 4ederal reser(e banks #urchasing such bonds shall be #ermitted to take out an amount of circulating notes eDual to the #ar (alue
of such bonds.
M,6 '$1 +++. Part of original 4ederal "eser(e 0ct5 not amended.N
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/. 1ollateral for =otes5 4orm and !enor5 "edem#tion
'#on the de#osit with the !reasurer of the 'nited $tates, (a) of any direct obligations of the 'nited $tates or (b) of any notes, drafts,
bills of e3change, or bankersI acce#tances acDuired under the #ro(isions of this 0ct, any 4ederal reser(e bank making such de#osit in
the manner #rescribed by the $ecretary of the !reasury shall be entitled to recei(e from the $ecretary of the !reasury circulating notes
in blank, duly registered and countersigned. When such circulating notes are issued against the security of obligations of the 'nited
$tates, the amount of such circulating notes shall be eDual to the face (alue of the direct obligations of the 'nited $tates so de#osited
as security5 and, when issued against the security of notes, drafts, bills of e3change and bankersI acce#tances acDuired under the
#ro(isions of this 0ct, the amount thereof shall be eDual to not more than -< #er cent of the estimated (alue of such notes, drafts, bills
of e3change and bankersI acce#tances so de#osited as security. $uch notes shall be the obligations of the 4ederal reser(e bank
#rocuring the same, shall be in form #rescribed by the $ecretary of the !reasury, shall be recei(able at #ar in all #arts of the 'nited
$tates for the same #ur#oses as are national bank notes, and shall be redeemable in lawful money of the 'nited $tates on
#resentation at the 'nited $tates !reasury or at the bank of issue. !he $ecretary of the !reasury is authori2ed and em#owered to
#rescribe regulations go(erning the issuance, redem#tion, re#lacement, retirement and destruction of such circulating notes and the
release and substitution of security therefor. $uch circulating notes shall be subKect to the same ta3 as is #ro(ided by law for the
circulating notes of national banks secured by 6 #er cent bonds of the 'nited $tates. =o such circulating notes shall be issued under
this #aragra#h after the President has declared by #roclamation that the emergency recogni2ed by the President by #roclamation of
*arch /, ,-.., has terminated, unless such circulating notes are secured by de#osits of bonds of the 'nited $tates bearing the
circulation #ri(ilege. When reDuired to do so by the $ecretary of the !reasury, each 4ederal reser(e agent shall act as agent of the
!reasurer of the 'nited $tates or of the $ecretary of the !reasury, or both, for the #erformance of any of the functions which the
!reasurer or the $ecretary of the !reasury may be called u#on to #erform in carrying out the #ro(isions of this #aragra#h.
0##ro#riations a(ailable for distincti(e #a#er and #rinting 'nited $tates currency or national bank currency are hereby made a(ailable
for the #roduction of the circulating notes of 4ederal reser(e banks herein #ro(ided5 but the 'nited $tates shall be reimbursed by the
4ederal reser(e bank to which such notes are issued for all e3#enses necessarily incurred in connection with the #rocuring of such
notes and all other e3#enses incidental to their issue, redem#tion, re#lacement, retirement and destruction.
M4ormerly ,6 '$1 ++>. 0s amended by acts of *arch -, ,-.. (+9 $tat. /)5 ;une ,6, ,-+> (>- $tat. 6.9)5 and $e#t. 6., ,--+ (,<9 $tat. 66-.). !his #aragra#h
was in effect re#ealed by section . of the act of ;une ,6, ,-+>, which #ro(ided7
H0ll #ower and authority with res#ect to the issuance of circulating notes, known as 4ederal "eser(e bank notes, #ursuant to the si3th #aragra#h of section ,9 of
the 4ederal "eser(e 0ct, as amended by section +<, of the 0ct a##ro(ed *arch -, ,-.. (+9 $tat. ,, /), shall cease and terminate on the date of enactment of
this 0ct.H
0s to redem#tion of 4ederal "eser(e bank notes when the bank of issue cannot be identified, see section 6 of the act of ;une ,., ,-.. (,6 '$1 ,66a).N
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:. B3change of 6 Percent @old Bonds for Fne-&ear @old =otes and .<-&ear . Percent @old Bonds
'#on a##lication of any 4ederal reser(e bank, a##ro(ed by the Board of @o(ernors of the 4ederal "eser(e $ystem, the $ecretary of
the !reasury may issue, in e3change for 'nited $tates two #er centum gold bonds bearing the circulation #ri(ilege, but against which
no circulation is outstanding, one-year gold notes of the 'nited $tates without the circulation #ri(ilege, to an amount not to e3ceed one-
half of the two #er centum bonds so tendered for e3change, and thirty-year three #er centum gold bonds without the circulation
#ri(ilege for the remainder of the two #er centum bonds sotendered7 #ro,ie, !hat at the time of such e3change the 4ederal reser(e
bank obtaining such one-year gold notes shall enter into an obligation with the $ecretary of the !reasury binding itself to #urchase from
the 'nited $tates for gold at the maturity of such one-year notes, an amount eDual to those deli(ered in e3change for such bonds, if so
reDuested by the $ecretary, and at each maturity of one-year notes so #urchased by such 4ederal reser(e bank, to #urchase from the
'nited $tates such an amount of one-year notes as the $ecretary may tender to such bank, not to e3ceed the amount issued to such
bank in the first instance, in e3change for the two #er centum 'nited $tates gold bonds5 said obligation to #urchase at maturity such
notes shall continue in force for a #eriod not to e3ceed thirty years.
M,6 '$1 ++/. Part of original 4ederal "eser(e 0ct5 not amended.N
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9. 8ssue of Fne-&ear !reasury =otes and .<-&ear . Percent @old Bonds
4or the #ur#ose of making the e3change herein #ro(ided for, the $ecretary of the !reasury is authori2ed to issue at #ar !reasury notes
in cou#on or registered form as he may #rescribe in denominations of one hundred dollars, or any multi#le thereof, bearing interest at
the rate of three #er centum #er annum, #ayable Duarterly, such !reasury notes to be #ayable not more than one year from the date of
their issue in gold coin of the #resent standard (alue, and to be e3em#t as to #rinci#al and interest from the #ayment of all ta3es and
duties of the 'nited $tates e3ce#t as #ro(ided by this 0ct, as well as from ta3es in any form by or under $tate, munici#al, or local
authorities. 0nd for the same #ur#ose, the $ecretary is authori2ed and em#owered to issue 'nited $tates gold bonds at #ar, bearing
three #er centum interest #ayable thirty years from date of issue, such bonds to be of the same general tenor and effect and to be
issued under the same general terms and conditions as the 'nited $tates three #er centum bonds without the circulation #ri(ilege now
issued and outstanding.
M,6 '$1 ++:. Part of original 4ederal "eser(e 0ct5 not amended.N
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-. B3change of . Percent Bonds for Fne-&ear =otes
'#on a##lication of any 4ederal reser(e bank, a##ro(ed by the Board of @o(ernors of the 4ederal "eser(e $ystem, the $ecretary may
issue at #ar such three #er centum bonds in e3change for the one-year gold notes therein #ro(ided for.
M,6 '$1 ++9. Part of original 4ederal "eser(e 0ct5 not amended.N
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%ection /0. )ank $eserves
Definition of !erms
(a" !he Board is authori2ed for the #ur#oses of this section to define the terms used in this section, to determine what shall be deemed
a #ayment of interest, to determine what ty#es of obligations, whether issued directly by a member bank or indirectly by an affiliate of a
member bank or by other means, and, regardless of the use of the #roceeds, shall be deemed a de#osit, and to #rescribe such
regulations as it may deem necessary to effectuate the #ur#oses of this section and to #re(ent e(asions thereof.
M,6 '$1 +/,(a). 0s amended by acts of ;une 6,, ,-,: (+< $tat. 6.-) (which com#letely re(ised this section)5 0ug. 6., ,-.> (+- $tat. :,+)5 $e#t. 6,, ,-// (9<
$tat. 96.) (as amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) and $e#t. 6,, ,-/9 (96 $tat. 9>/))5 Dec. 6., ,-/- (9. $tat. .:+)5 Fct. 6-, ,-:+ (99 $tat. ,>>:)5
and *arch .,, ,-9< (-+ $tat. ,.., ,.9). !he amendment inserting the words Hand, regardless of the use of the #roceeds,H made by the act of Fct. 6-, ,-:+,
Hshall not a##ly to any bank holding com#any which has filed #rior to the date of enactment of this 0ct an irre(ocable declaration with the Board of @o(ernors of
the 4ederal "eser(e $ystem to di(est itself of all of its banks under section + of the Bank olding 1om#any 0ct, or to any debt obligation which is an e3em#ted
security under section .(a)(.) of the $ecurities 0ct of ,-..H (,6 '$1 +/, note).N
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"eser(e "eDuirements
(b"
% Definitions. !he following definitions and rules a##ly to this subsection, subsection (c), section ,,0, the first #aragra#h of
section ,., and the second, thirteenth, and fourteenth #aragra#hs of section ,/7
0. !he term Hde#ository institutionH means--
i. any insured bank as defined in section . of the 4ederal De#osit 8nsurance 0ct or any bank which is eligible to
make a##lication to become an insured bank under section > of such 0ct5
ii. any mutual sa(ings bank as defined in section . of the 4ederal De#osit 8nsurance 0ct or any bank which is
eligible to make a##lication to become an insured bank under section > of such 0ct5
iii. any sa(ings bank as defined in section . of the 4ederal De#osit 8nsurance 0ct or any bank which is eligible to
make a##lication to become an insured bank under section > of such 0ct5
i(. any insured credit union as defined in section ,<, of the 4ederal 1redit 'nion 0ct or any credit union which is
eligible to make a##lication to become an insured credit union #ursuant to section 6<, of such 0ct5
(. any member as defined in section 6 of the 4ederal ome Loan Bank 0ct5
(i. any sa(ings association (as defined in section . of the 4ederal De#osit 8nsurance 0ct) which is an insured
de#ository institution (as defined in such 0ct) or is eligible to a##ly to become an insured de#ository institution
under the 4ederal De#osit 8nsurance 0ct5 and
(ii. for the #ur#ose of section ,. and the fourteenth #aragra#h of section ,/, any association or entity which is
wholly owned by or which consists only of institutions referred to in clauses (i) through ((i).
B. !he term HbankH means any insured or non-insured bank, as defined in section . of the 4ederal De#osit 8nsurance
0ct, other than a mutual sa(ings bank or a sa(ings bank as defined in such section.
1. !he term Htransaction accountH means a de#osit or account on which the de#ositor or account holder is #ermitted to
make withdrawals by negotiable or transferable instrument, #ayment orders of withdrawal, tele#hone transfers, or
other similar items for the #ur#ose of making #ayments or transfers to third #ersons or others. $uch term includes
demand de#osits, negotiable order of withdrawal accounts, sa(ings de#osits subKect to automatic transfers, and share
draft accounts.
D. !he term Hnon#ersonal time de#ositsH means a transferable time de#osit or account or a time de#osit or account
re#resenting funds de#osited to the credit of, or in which any beneficial interest is held by, a de#ositor who is not a
natural #erson.
B. !he term Hreser(able liabilitiesH means transaction accounts, non#ersonal time de#osits, and all net balances, loans,
assets, and obligations which are, or may be, subKect to reser(e reDuirements under #aragra#h (>).
4. 8n order to #re(ent e(asions of the reser(e reDuirements im#osed by this subsection, after consultation with the Board
of Directors of the 4ederal De#osit 8nsurance 1or#oration, the Director of the Fffice of !hrift $u#er(ision, and the
=ational 1redit 'nion 0dministration Board, the Board of @o(ernors of the 4ederal "eser(e $ystem is authori2ed to
determine, by regulation or order, that an account or de#osit is a transaction account if such account or de#osit may
be used to #ro(ide funds directly or indirectly for the #ur#ose of making #ayments or transfers to third #ersons or
others.
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"% -eser,e re2uirements.
0. Bach de#ository institution shall maintain reser(es against its transaction accounts as the Board may #rescribe by
regulation solely for the #ur#ose of im#lementing monetary #olicy--
i% in the ratio of . #er centum for that #ortion of its total transaction accounts of G6>,<<<,<<< or less, subKect to
sub#aragra#h (1)5 andL
ii% in the ratio of ,6 #er centum, or in such other ratio as the Board may #rescribe not greater than ,+ #er
centum and not less than 9 #er centum, for that #ortion of its total transaction accounts in e3cess of
G6>,<<<,<<<, subKect to sub#aragra#h (1).X
B. Bach de#ository institution shall maintain reser(es against its non#ersonal time de#osits in the ratio of . #er centum,
or in such other ratio not greater than - #er centum and not less than 2ero #er centum as the Board may #rescribe by
regulation solely for the #ur#ose of im#lementing monetary #olicy.
1. Beginning in ,-9,, not later than December ., of each year the Board shall issue a regulation increasing for the ne3t
succeeding calendar year the dollar amount which is contained in sub#aragra#h (0) or which was last determined
#ursuant to this sub#aragra#h for the #ur#ose of such sub#aragra#h, by an amount obtained by multi#lying such
dollar amount by 9< #er centum of the #ercentage increase in the total transaction accounts of all de#ository
institutions. !he increase in such transaction accounts shall be determined by subtracting the amount of such
accounts on ;une .< of the #receding calendar year from the amount of such accounts on ;une .< of the calendar
year in(ol(ed. 8n the case of any such ,6-month #eriod in which there has been a decrease in the total transaction
accounts of all de#ository institutions, the Board shall issue such a regulation decreasing for the ne3t succeeding
calendar year such dollar amount by an amount obtained by multi#lying such dollar amount by 9< #er centum of the
#ercentage decrease in the total transaction accounts of all de#ository institutions. !he decrease in such transaction
accounts shall be determined by subtracting the amount of such accounts on ;une .< of the calendar year in(ol(ed
from the amount of such accounts on ;une .< of the #re(ious calendar year.
D. 0ny reser(e reDuirement im#osed under this subsection shall be uniformly a##lied to all transaction accounts at all
de#ository institutions. "eser(e reDuirements im#osed under this subsection shall be uniformly a##lied to non#ersonal
time de#osits at all de#ository institutions, e3ce#t that such reDuirements may (ary by the maturity of such de#osits.
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>% (ai,er of ratio !imits in e3traorinary circumstances. '#on a finding by at least > members of the Board that e3traordinary
circumstances reDuire such action, the Board, after consultation with the a##ro#riate committees of the 1ongress, may
im#ose, with res#ect to any liability of de#ository institutions, reser(e reDuirements outside the limitations as to ratios and as to
ty#es of liabilities otherwise #rescribed by #aragra#h (6) for a #eriod not e3ceeding ,9< days, and for further #eriods not
e3ceeding ,9< days each by affirmati(e action by at least > members of the Board in each instance. !he Board shall #rom#tly
transmit to the 1ongress a re#ort of any e3ercise of its authority under this #aragra#h and the reasons for such e3ercise of
authority.
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$% 'upp!ementa! reser,es.
0. !he Board may, u#on the affirmati(e (ote of not less than > members, im#ose a su##lemental reser(e reDuirement on
e(ery de#ository institution of not more than + #er centum of its total transaction accounts. $uch su##lemental reser(e
reDuirement may be im#osed only if--
i. the sole #ur#ose of such reDuirement is to increase the amount of reser(es maintained to a le(el essential for
the conduct of monetary #olicy5
ii. such reDuirement is not im#osed for the #ur#ose of reducing the cost burdens resulting from the im#osition of
the reser(e reDuirements #ursuant to #aragra#h (6)5
iii. such reDuirement is not im#osed for the #ur#ose of increasing the amount of balances needed for clearing
#ur#oses5 and
i(. on the date on which the su##lemental reser(e reDuirement is im#osed, e3ce#t as #ro(ided in #aragra#h
(,,), the total amount of reser(es reDuired #ursuant to #aragra#h (6) is not less than the amount of reser(es
that would be reDuired if the initial ratios s#ecified in #aragra#h (6) were in effect.
B. !he Board may reDuire the su##lemental reser(e authori2ed under sub#aragra#h (0) only after consultation with the
Board of Directors of the 4ederal De#osit 8nsurance 1or#oration, the Director of the Fffice of !hrift $u#er(ision, and
the =ational 1redit 'nion 0dministration Board. !he Board shall #rom#tly transmit to the 1ongress a re#ort with
res#ect to any e3ercise of its authority to reDuire su##lemental reser(es under sub#aragra#h (0) and such re#ort shall
state the basis for the determination to e3ercise such authority.
C% !he su##lemental reser(e authori2ed under sub#aragra#h (0) shall be maintained by the 4ederal "eser(e banks in
an Barnings Partici#ation 0ccount. B3ce#t as #ro(ided in subsection (c)(,)(0)(ii), such Barnings Partici#ation 0ccount
shall recei(e earnings to be #aid by the 4ederal "eser(e banks during each calendar Duarter at a rate not more than
the rate earned on the securities #ortfolio of the 4ederal "eser(e $ystem during the #re(ious calendar Duarter. !he
Board may #rescribe rules and regulations concerning the #ayment of earnings on Barnings Partici#ation 0ccounts by
4ederal "eser(e banks under this #aragra#h.Y
D. 8f a su##lemental reser(e under sub#aragra#h (0) has been reDuired of de#ository institutions for a #eriod of one year
or more, the Board shall re(iew and determine the need for continued maintenance of su##lemental reser(es and
shall transmit annual re#orts to the 1ongress regarding the need, if any, for continuing the su##lemental reser(e.
B. 0ny su##lemental reser(e im#osed under sub#aragra#h (0) shall terminate at the close of the first -<-day #eriod after
such reDuirement is im#osed during which the a(erage amount of reser(es reDuired under #aragra#h (6) are less than
the amount of reser(es which would be reDuired during such #eriod if the initial ratios s#ecified in #aragra#h (6) were
in effect.
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L% -eser,es re!ate to foreign o%!igations or assets. 4oreign branches, subsidiaries, and international banking facilities of
nonmember de#ository institutions shall maintain reser(es to the same e3tent reDuired by the Board of foreign branches,
subsidiaries, and international banking facilities of member banks. 8n addition to any reser(es otherwise reDuired to be
maintained #ursuant to this subsection, any de#ository institution shall maintain reser(es in such ratios as the Board may
#rescribe against--
0. net balances owed by domestic offices of such de#ository institution in the 'nited $tates to its directly related foreign
offices and to foreign offices of non-related de#ository institutions5
B. loans to 'nited $tates residents made by o(erseas offices of such de#ository institution if such de#ository institution
has one or more offices in the 'nited $tates5 and
1. assets (including #artici#ations) held by foreign offices of a de#ository institution in the 'nited $tates which were
acDuired from its domestic offices.
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?% 43emption for certain eposits. !he reDuirements im#osed under #aragra#h (6) shall not a##ly to de#osits #ayable only
outside the $tates of the 'nited $tates and the District of 1olumbia, e3ce#t that nothing in this subsection limits the authority of
the Board to im#ose conditions and reDuirements on member banks under section 6> of this 0ct or the authority of the Board
under section : of the 8nternational Banking 0ct of ,-:9 (,6 '.$.1. .,<>).
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H% Discount an %orrowing. 0ny de#ository institution in which transaction accounts or non#ersonal time de#osits are held shall
be entitled to the same discount and borrowing #ri(ileges as member banks. 8n the administration of discount and borrowing
#ri(ileges, the Board and the 4ederal "eser(e banks shall take into consideration the s#ecial needs of sa(ings and other
de#ository institutions for access to discount and borrowing facilities consistent with their long-term asset #ortfolios and the
sensiti(ity of such institutions to trends in the national money markets.
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=% Transitiona! a5ustments.
0. 0ny de#ository institution reDuired to maintain reser(es under this subsection which was engaged in business on ;uly
,, ,-:-, but was not a member of the 4ederal "eser(e $ystem on or after that date, shall maintain reser(es against
its de#osits during the first twel(e-month #eriod following the effecti(e date of this #aragra#h in amounts eDual to one-
eighth of those otherwise reDuired by this subsection, during the second such twel(e-month #eriod in amounts eDual
to one-fourth of those otherwise reDuired, during the third such twel(e-month #eriod in amounts eDual to three-eighths
of those otherwise reDuired, during the fourth twel(e-month #eriod in amounts eDual to one-half of those otherwise
reDuired, and during the fifth twel(e-month #eriod in amounts eDual to fi(e-eighths of those otherwise reDuired, during
the si3th twel(e-month #eriod in amounts eDual to three-fourths of those otherwise reDuired, and during the se(enth
twel(e-month #eriod in amounts eDual to se(en-eighths of those otherwise reDuired. !his sub#aragra#h does not
a##ly to any category of de#osits or accounts which are first authori2ed #ursuant to 4ederal law in any $tate after
0#ril ,, ,-9<.
B. With res#ect to any bank which was a member of the 4ederal "eser(e $ystem during the entire #eriod beginning on
;uly ,, ,-:-, and ending on the effecti(e date of the *onetary 1ontrol 0ct of ,-9<, the amount of reDuired reser(es
im#osed #ursuant to this subsection on and after the effecti(e date of such 0ct that e3ceeds the amount of reser(es
which would ha(e been reDuired of such bank if the reser(e ratios in effect during the reser(e com#utation #eriod
immediately #receding such effecti(e date were a##lied may, at the discretion of the Board and in accordance with
such rules and regulations as it may ado#t, be reduced by :> #er centum during the first year which begins after such
effecti(e date, >< #er centum during the second year, and 6> #er centum during the third year.
1.
i. With res#ect to any bank which is a member of the 4ederal "eser(e $ystem on the effecti(e date of the
*onetary 1ontrol 0ct of ,-9<, the amount of reser(es which would ha(e been reDuired of such bank if the
reser(e ratios in effect during the reser(e com#utation #eriod immediately #receding such effecti(e date were
a##lied that e3ceeds the amount of reDuired reser(es im#osed #ursuant to this subsection shall, in
accordance with such rules and regulations as the Board may ado#t, be reduced by 6> #er centum during the
first year which begins after such effecti(e date, >< #er centum during the second year, and :> #er centum
during the third year.
ii. 8f a bank becomes a member bank during the four-year #eriod beginning on the effecti(e date of the
*onetary 1ontrol 0ct of ,-9<, and if the amount of reser(es which would ha(e been reDuired of such bank,
determined as if the reser(e ratios in effect during the reser(e com#utation #eriod immediately #receding
such effecti(e date were a##lied, and as if such bank had been a member during such #eriod, e3ceeds the
amount of reser(es reDuired #ursuant to this subsection, the amount of reser(es reDuired to be maintained by
such bank beginning on the date on which such bank becomes a member of the 4ederal "eser(e $ystem
shall be the amount of reser(es which would ha(e been reDuired of such bank if it had been a member on the
day before such effecti(e date, e3ce#t that the amount of such e3cess shall, in accordance with such rules
and regulations as the Board may ado#t, be reduced by 6> #er centum during the first year which begins after
such effecti(e date, >< #er centum during the second year, and :> #er centum during the third year.
D.
i. 0ny bank which was a member bank on ;uly ,, ,-:-, and which withdraws from membershi# in the 4ederal
"eser(e $ystem during the #eriod beginning on ;uly ,, ,-:-, and ending on *arch .,, ,-9<, shall maintain
reser(es during the first twel(e-month #eriod beginning on the date of enactment of this clause in amounts
eDual to one-half of those otherwise reDuired by this subsection, during the second such twel(e-month #eriod
in amounts eDual to two-thirds of those otherwise reDuired, and during the third such twel(e-month #eriod in
amounts eDual to fi(e-si3ths of those otherwise reDuired.
ii. 0ny bank which withdraws from membershi# in the 4ederal "eser(e $ystem on or after the date of
enactment of the De#ository 8nstitutions Deregulation and *onetary 1ontrol 0ct of ,-9< shall maintain
reser(es in the same amount as member banks are reDuired to maintain under this subsection, #ursuant to
sub#aragra#hs (B) and (1)(i).
B. !his sub#aragra#h a##lies to any de#ository institution that, on 0ugust ,, ,-:9, (i) was engaged in business as a
de#ository institution in a $tate outside the continental limits of the 'nited $tates, and (ii) was not a member of the
4ederal "eser(e $ystem at any time on or after such date. $uch a de#ository institution shall not be reDuired to
maintain reser(es against its de#osits held or maintained at its offices located in a $tate outside the continental limits
of the 'nited $tates until the first day of the si3th calendar year which begins after the effecti(e date of the *onetary
1ontrol 0ct of ,-9<. $uch a de#ository institution shall maintain reser(es against its de#osits during the si3th calendar
year which begins after such effecti(e date in an amount eDual to one-eighth of that otherwise reDuired by #aragra#h
(6), during the se(enth such year in an amount eDual to one-fourth of that otherwise reDuired, during the eighth such
year in an amount eDual to three-eighths of that otherwise reDuired, during the ninth such year in an amount eDual to
one-half of that otherwise reDuired, during the tenth such year in an amount eDual to fi(e-eighths of that otherwise
reDuired, during the ele(enth such year in an amount eDual to three-fourths of that otherwise reDuired, and during the
twelfth such year in an amount eDual to se(en-eighths of that otherwise reDuired.
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F% 43emption. !his subsection shall not a##ly with res#ect to any financial institution which--
0. is organi2ed solely to do business with other financial institutions5
B. is owned #rimarily by the financial institutions with which it does business5 and
1. does not do business with the general #ublic.
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#% (ai,ers. 8n indi(idual cases, where a 4ederal su#er(isory authority wai(es a liDuidity reDuirement, or wai(es the #enalty for
failing to satisfy a liDuidity reDuirement, the Board shall wai(e the reser(e reDuirement, or wai(e the #enalty for failing to satisfy
a reser(e reDuirement, im#osed #ursuant to this subsection for the de#ository institution in(ol(ed when reDuested by the
4ederal su#er(isory authority in(ol(ed.
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% Aitiona! e3emptions.
0.
i. =otwithstanding the reser(e reDuirement ratios established under #aragra#hs (6) and (>) of this subsection, a
reser(e ratio of 2ero #er centum shall a##ly to any combination of reser(able liabilities, which do not e3ceed
G6,<<<,<<< (as adKusted under sub#aragra#h (B)), of each de#ository institution.
ii. Bach de#ository institution may designate, in accordance with such rules and regulations as the Board shall
#rescribe, the ty#es and amounts of reser(able liabilities to which the reser(e ratio of 2ero #er centum shall
a##ly, e3ce#t that transaction accounts which are designated to be subKect to a reser(e ratio of 2ero #er
centum shall be accounts which would otherwise be subKect to a reser(e ratio of . #er centum under
#aragra#h (6).
iii. !he Board shall minimi2e the re#orting necessary to determine whether de#ository institutions ha(e total
reser(able liabilities of less than G6,<<<,<<< (as adKusted under sub#aragra#h (B)). 1onsistent with the
BoardIs res#onsibility to monitor and control monetary and credit aggregates, de#ository institutions which
ha(e reser(e reDuirements under this subsection eDual to 2ero #er centum shall be subKect to less o(erall
re#orting reDuirements than de#ository institutions which ha(e a reser(e reDuirement under this subsection
that e3ceeds 2ero #er centum.
B.
i. Beginning in ,-96, not later than December ., of each year, the Board shall issue a regulation increasing for
the ne3t succeeding calendar year the dollar amount s#ecified in sub#aragra#h (0), as #re(iously adKusted
under this sub#aragra#h, by an amount obtained by multi#lying such dollar amount by 9< #er centum of the
#ercentage increase in the total reser(able liabilities of all de#ository institutions.
ii. !he increase in total reser(able liabilities shall be determined by subtracting the amount of total reser(able
liabilities on ;une .< of the #receding calendar year from the amount of total reser(able liabilities on ;une .<
of the calendar year in(ol(ed. 8n the case of any such twel(e-month #eriod in which there has been a
decrease in the total reser(able liabilities of all de#ository institutions, no adKustment shall be made. 0
decrease in total reser(able liabilities shall be determined by substracting the amount of total reser(able
liabilities on ;une .< of the calendar year in(ol(ed from the amount of total reser(able liabilities on ;une .< of
the #re(ious calendar year.
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"% 4arnings on %a!ances.Z
0. Balances maintained at a 4ederal "eser(e bank by or on behalf of a de#ository institution may recei(e earnings to be
#aid by the 4ederal "eser(e bank at least once each calendar Duarter, at a rate or rates not to e3ceed the general
le(el of short-term interest rates.
B. !he Board may #rescribe regulations concerning--
i. the #ayment of earnings in accordance with this #aragra#h5
ii. the distribution of such earnings to the de#ository institutions which maintain balances at such banks, or on
whose behalf such balances are maintained5 and
iii. the res#onsibilities of de#ository institutions, 4ederal ome Loan Banks, and the =ational 1redit 'nion
0dministration 1entral LiDuidity 4acility with res#ect to the crediting and distribution of earnings attributable to
balances maintained, in accordance with subsection (c)(l)(0), in a 4ederal "eser(e bank by any such entity
on behalf of de#ository institutions.
1. 4or #ur#oses of this #aragra#h, the term Hde#ository institutionH, in addition to the institutions described in #aragra#h
(l)(0), includes any trust com#any, cor#oration organi2ed under section 6>0 or ha(ing an agreement with the Board
under section 6>, or any branch or agency of a foreign bank (as defined in section l(b) of the 8nternational Banking 0ct
of ,-:9).
M,6 '$1 +/,(b). 0s amended by acts of ;une 6,, ,-,: (+< $tat. 6.-)5 $e#t. 6/, ,-,9 (+< $tat. -:<)5 *ay ,6, ,-.. (+9 $tat. >+)5 0ug. 6.,
,-.> (+- $tat. :</)5 ;uly :, ,-+6 (>/ $tat. /+9)5 ;uly 69, ,->- (:. $tat. 6/+) effecti(e ;uly 69, ,-/65 $e#t. 6,, ,-// (9< $tat. 96.) (as
amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) and $e#t. 6,, ,-/9 (96 $tat. 9>/))5 Dec. 6., ,-/- (9. $tat. .:>)5 *arch .,, ,-9< (-+ $tat.
,.., ,.9)5 0ug. ,., ,-9, (-> $tat. +..)5 Fct. ,>, ,-96 (-/ $tat. ,>6<, ,>6,)5 0ug. -, ,-9- (,<. $tat. +.-)5 and Fct. ,., 6<</ (,6< $tat.
,-/9, ,-/-).N
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Promulgation of "ules and "egulations "egarding *aintenance of Balances
(+"
,. "eser(es held by a de#ository institution to meet the reDuirements im#osed #ursuant to subsection (b) shall, subKect to such
rules and regulations as the Board shall #rescribe, be in the form of--
+% balances maintained for such #ur#oses by such de#ository institution in the 4ederal "eser(e bank of which it is a
member or at which it maintains an account, e3ce#t that (i) the Board may, by regulation or order, #ermit de#ository
institutions to maintain all or a #ortion of their reDuired reser(es in the form of (ault cash, e3ce#t that any #ortion so
#ermitted shall be identical for all de#ository institutions, and (ii) (ault cash may be used to satisfy any su##lemental
reser(e reDuirement im#osed #ursuant to subsection (b)(+), e3ce#t that all such (ault cash shall be e3cluded from any
com#utation of earnings #ursuant to subsection (b)(+)(1)5 andLL
B. balances maintained by a de#ository institution in a de#ository institution which maintains reDuired reser(e balances
at a 4ederal "eser(e bank, in a 4ederal ome Loan Bank, or in the =ational 1redit 'nion 0dministration 1entral
LiDuidity 4acility, if such de#ository institution, 4ederal ome Loan Bank, or =ational 1redit 'nion 0dministration
1entral LiDuidity 4acility maintains such funds in the form of balances in a 4ederal "eser(e bank of which it is a
member or at which it maintains an account. Balances recei(ed by a de#ository institution from a second de#ository
institution and used to satisfy the reser(e reDuirement im#osed on such second de#ository institution by this section
shall not be subKect to the reser(e reDuirements of this section im#osed on such first de#ository institution, and shall
not be subKect to assessments or reser(es im#osed on such first de#ository institution #ursuant to section : of the
4ederal De#osit 8nsurance 0ct (,6 '.$.1. ,9,:), section +<+ of the =ational ousing 0ct (,6 '.$.1. ,:6:), or section
6<6 of the 4ederal 1redit 'nion 0ct (,6 '.$.1. ,:96).
1. !he balances maintained to meet the reser(e reDuirements of subsection (b) by a de#ository institution in a 4ederal
"eser(e bank or #assed through a 4ederal ome Loan Bank or the =ational 1redit 'nion 0dministration 1entral
LiDuidity 4acility or another de#ository institution to a 4ederal "eser(e bank may be used to satisfy liDuidity
reDuirements which may be im#osed under other #ro(isions of 4ederal or $tate law.
M,6 '$1 +/,(c). 0s amended by acts of 0ug. ,>, ,-,+ (.9 $tat. /-,)5 ;une 6,, ,-,: (+< $tat. 6.-)5 ;uly 69, ,->- (:. $tat. 6/.)5 $e#t. 6,, ,-// (9<
$tat. 96.) (as amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) and $e#t. 6,, ,-/9 (96 $tat. 9>/))5 Dec. 6., ,-/- (9. $tat. .:>)5 *arch .,, ,-9< (-+
$tat. ,.., ,.9)5 Fct ,., 6<</ (,6< $tat. ,-/-, ,-9<).N
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*ember Banks *aking $ecurity Loans for Fthers
(#" =o member bank shall act as the medium or agent of any nonbanking cor#oration, #artnershi#, association, business trust, or
indi(idual in making loans on the security of stocks, bonds, and other in(estment securities to brokers or dealers in stocks, bonds, and
other in(estment securities. B(ery (iolation of this #ro(ision by any member bank shall be #unishable by a fine of not more than G,<<
#er day during the continuance of such (iolation5 and such fine may be collected, by suit or otherwise, by the 4ederal reser(e bank of
the district in which such member bank is located.
M,6 '$1 .:+a. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,9,) and amended by act of $e#t. 6,, ,-// (9< $tat. 96+) (as amended by acts of $e#t. 6,, ,-/: (9,
$tat. 66/) and $e#t. 6,, ,-/9 (96 $tat. 9>/)).N
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De#osits with De#ository 8nstitutions Without 0ccess to 4ederal "eser(e 0d(ances5 Discounts for =onmember Banks
(e" =o member bank shall kee# on de#osit with any de#ository institution which is not authori2ed to ha(e access to 4ederal "eser(e
ad(ances under section ,<(b) of this 0ct a sum in e3cess of ,< #er centum of its own #aid-u# ca#ital and sur#lus. =o member bank
shall act as the medium or agent of a nonmember bank in a##lying for or recei(ing discounts from a 4ederal reser(e bank under the
#ro(isions of this 0ct, e3ce#t by #ermission of the Board of @o(ernors of the 4ederal "eser(e $ystem.
M,6 '$1 +/., .:+. 0s reenacted without change by act of 0ug. ,>, ,-,+ (.9 $tat. /-6)5 and amended by acts of ;une 6,, ,-,: (+< $tat. 6.-) (which com#letely
re(ised this section) and $e#t. 6,, ,-// (9< $tat. 96+) (as amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/)5 $e#t. 6,, ,-/9 (96 $tat. 9>/)5 and *arch .,, ,-9<
(-+ $tat. ,+<).N
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1hecking 0gainst and Withdrawal of "eser(e Balance
(f" !he reDuired balance carried by a member bank with a 4ederal reser(e bank may, under the regulations and subKect to such
#enalties as may be #rescribed by the Board of @o(ernors of the 4ederal "eser(e $ystem, be checked against and withdrawn by such
member bank for the #ur#ose of meeting e3isting liabilities.
M,6 '$1 +/+. 0s reenacted without change by act of 0ug. ,>, ,-,+ (.9 $tat. /-6)5 as amended by acts of ;une 6,, ,-,: (+< $tat. 6.-) (which com#letely
re(ised this section ;uly :, ,-+6 (>/ $tat. /+9))5 and $e#t. 6,, ,-// (9< $tat. 96+) (as amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) and $e#t. 6,, ,-/9 (96
$tat. 9>/)).N
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Deductions in 1om#uting "eser(es
(g" 8n estimating the reser(e balances reDuired by this 0ct, member banks may deduct from the amount of their gross demand de#osits
the amounts of balances due from other banks (e3ce#t 4ederal "eser(e banks and foreign banks) and cash items in #rocess of
collection #ayable immediately u#on #resentation in the 'nited $tates, within the meaning of these terms as defined by the Board of
M,6 '$1 +/>. 0s amended by acts of 0ug. ,>, ,-,+ (.9 $tat. /-6)5 ;une 6,, ,-,: (+< $tat. 6+<) (which com#letely re(ised this section)5 0ug. 6., ,-.> (+- $tat.
:,+)5 and $e#t. 6,, ,-// (9< $tat. 96+) (as amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) and $e#t. 6,, ,-/9 (96 $tat. 9>/)).N
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"eser(es of Banks in De#endencies and 8nsular Possessions
(h" =ational banks, or banks organi2ed under local laws, located in the de#endency or insular #ossession or any #art of the 'nited
$tates outside the continental 'nited $tates may remain nonmember banks, and shall in that e(ent maintain reser(es and com#ly with
all the conditions now #ro(ided by law regulating them5 or said banks may, with the consent of the Board of @o(ernors of the 4ederal
"eser(e $ystem, become member banks of any one of the reser(e districts, and shall in that e(ent take stock, maintain reser(es, and
be subKect to all the other #ro(isions of this 0ct.
M,6 '$1 +//. 0s reenacted without change by act of 0ug. ,>, ,-,+ (.9 $tat. /-6)5 and as amended by acts of ;une 6,, ,-,: (+< $tat. 6+<)5 ;une 6>, ,->- (:.
$tat. ,+6) and $e#t. 6,, ,-// (9< $tat. 96+) (as amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) and $e#t. 6,, ,-/9 (96 $tat. 9>/)). !he Hcontinental 'nited
$tatesH is defined in the third #aragra#h of section , of the 4ederal "eser(e 0ct to mean the H$tates of the 'nited $tates and the District of 1olumbia.HN
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8nterest on Demand De#osits
(i" =o member bank shall, directly or indirectly, by any de(ice whatsoe(er, #ay any interest on any de#osit which is #ayable on
demand7 #ro,ie) !hat nothing herein contained shall be construed as #rohibiting the #ayment of interest in accordance with the
terms of any certificate of de#osit or other contract entered into in good faith which is in force on the date on which the bank becomes
subKect to the #ro(isions of this #aragra#h5 but no such certificate of de#osit or other contract shall be renewed or e3tended unless it
shall be modified to conform to this #aragra#h, and e(ery member bank shall take such action as may be necessary to conform to this
#aragra#h as soon as #ossible consistently with its contractural obligations7 #ro,ie further) !hat this #aragra#h shall not a##ly to any
de#osit of such bank which is #ayable only at an office thereof located outside of the $tates of the 'nited $tates and the District of
1olumbia7 #ro,ie further) !hat until the e3#iration of two years after the date of enactment of the Banking 0ct of ,-.> this #aragra#h
shall not a##ly (,) to any de#osit made by a sa(ings bank as defined in section ,6B of this 0ct, as amended, or by a mutual sa(ings
bank, or (6) to any de#osit of #ublic funds made by or on behalf of any $tate, county, school district, or other subdi(ision or
munici#ality, or to any de#osit of trust funds if the #ayment of interest with res#ect to such de#osit of #ublic funds or of trust funds is
reDuired by $tate law. $o much of e3isting law as reDuires the #ayment of interest with res#ect to any funds de#osited by the 'nited
$tates, by any !erritory, District, or #ossession thereof, or by any #ublic instrumentality, agency, or officer of the foregoing, as is
inconsistent with the #ro(isions of this section is re#ealed. =otwithstanding any other #ro(ision of this section, a member bank may
#ermit withdrawals to be made automatically from a sa(ings de#osit that consists only of funds in which the entire beneficial interest is
held by one or more indi(iduals through #ayment to the bank itself or through transfer of credit to a demand de#osit or other account
#ursuant to written authori2ation from the de#ositor to make such #ayments or transfers in connection with checks or drafts drawn u#on
the bank, #ursuant to terms and conditions #rescribed by the Board.
M,6 '$1 .:,a. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,9,)5 and amended by acts of 0ug. 6., ,-.> (+- $tat. :,+), $e#t. 6,, ,-// (9< $tat. 96+) (as
amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) $e#t. 6,, ,-/9 (96 $tat. 9>/)5 Dec. 69, ,-:- (-. $tat. ,6..)5 and *arch .,,,-9< (-+ $tat. ,+>). !he Banking
0ct of ,-.>, referred to in this #aragra#h, was a##ro(ed 0ug. 6., ,-.>. $ection ,6B was withdrawn and enacted as a se#arate act of $e#t. 6,, ,-><5 for
definition of Hsa(ings bankH under the act, see ,6 '$1 ,9,. (g). Presidential Proclamation =o. 6/-> of ;uly +, ,-+/ (/< $tat. ,.>65 ,6 '$1 ,.-+ note)
recogni2es the inde#endence of the Phili##ine 8slands. !herefore the words H(including the Phili##ine 8slands)H ha(e been omitted from the '.$. 1ode.
$ection 6 of Public Law -.-,<< of 0ug. ,/, ,-:. (,6 '$1 ,9.6) as amended by acts of 4eb. 6:, ,-:/ (-< $tat ,-:)5 =o(. ,<, ,-:9 (-6 $tat. .:,6)5 Dec. 69,
,-:- (-. $tat. ,6.>)5 *arch .,, ,-9< (-+ $tat. ,+/)5 Fct. ,>, ,-96 (-/ $tat. ,>+<)5 and 0ug. ,<, ,-9: (,<, $tat. >:-) #ro(ides as follows7
(a) (,) =otwithstanding any other #ro(ision of law but subKect to #aragra#h (6), a de#ository institution is authori2ed to #ermit the owner of a de#osit or account
on which interest or di(idends are #aid to make withdrawals by negotiable or transferable instruments for the #ur#ose of making transfers to third #arties.
(6) Paragra#h (,) shall a##ly only with res#ect to de#osits or accounts which consist solely of funds in which the entire beneficial interest is held by one or more
indi(iduals or by an organi2ation which is o#erated #rimarily for religious, #hilanthro#ic, charitable, educational, #olitical, or other similar #ur#oses and which is
not o#erated for #rofit, and with res#ect to de#osits of #ublic funds by an officer, em#loyee, or agent of the 'nited $tates, any $tate, county, munici#ality, or
#olitical subdi(ision thereof, the District of 1olumbia, the 1ommonwealth of Puerto "ico, 0merican $amoa, @uam, any territory or #ossession of the 'nited
$tates, or any #olitical subdi(ision thereof.
(b) 4or #ur#oses of this section, the term Hde#ository institutionH means[
,. any insured bank as defined in section . of the 4ederal De#osit 8nsurance 0ct5
6. any $tate bank as defined in section . of the 4ederal De#osit 8nsurance 0ct5
.. any mutual sa(ings bank as defined in section . of the 4ederal De#osit 8nsurance 0ct5
+. any sa(ings bank as defined in section . of the 4ederal De#osit 8nsurance 0ct5
>. any insured institution as defined in section +<, of the =ational ousing 0ct5 and
/. any building and loan association or sa(ings and loan association organi2ed and o#erated according to the laws of the $tate in which it is chartered or
organi2ed5 and, for #ur#oses of this #aragra#h, the term H$tateH means any $tate of the 'nited $tates, the District of 1olumbia, any territory of the
'nited $tates, Puerto "ico, @uam, 0merican $amoa, or the Airgin 8slands.
(c) 0ny de#ository institution which (iolates this section shall be fined G,,<<< for each (iolation.N
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0d(ertisement of 8nterest on !ime and $a(ings De#osits
(E" !he Board may from time to time, after consulting with the Board of Directors of the 4ederal De#osit 8nsurance 1or#oration and the
4ederal ome Loan Bank Board, #rescribe rules go(erning the ad(ertisement of interest on de#osits by member banks on time and
sa(ings de#osits. !he #ro(isions of this #aragra#h shall not a##ly to any de#osit which is #ayable only at an office of a member bank
located outside of the $tates of the 'nited $tates and the District of 1olumbia. During the #eriod commencing on Fctober ,>, ,-/6,
and ending on Fctober ,>, ,-/9, the #ro(isions of this #aragra#h shall not a##ly to the rate of interest which may be #aid by member
banks on time de#osits of foreign go(ernments, monetary and financial authorities of foreign go(ernments when acting as such, or
international financial institutions of which the 'nited $tates is a member.
M,6 '$1 .:,b. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,96). 0mended by acts of 0ug. 6., ,-.> (+- $tat. :,+)5 Fct. ,>, ,-/6 (:/ $tat. ->.)5 ;uly 6,, ,-/>
(:- $tat. 6++)5 $e#t. 6,, ,-// (9< $tat. 96+) (as amended by acts of $e#t. 6,, ,-/: (9, $tat. 66/) and $e#t. 6,, ,-/9 (96 $tat. 9>/), ;oint "esolution of $e#t.
66, ,-/- (9. $tat. ,,>)5 0ct of Dec. 6., ,-/- (9. $tat. .:,)5 ;oint "esolution of *arch .,, ,-:, (9> $tat. ,.)5 and act of *ay ,9, ,-:, (9> $tat. .9))5 $e#t. 6,,
,-/9 (96 $tat. 9>/)5 ;uly /, ,-:. (9: $tat. ,+:)5 0ug. ,/, ,-:. (9: $tat. .+6)5 Fct. 69, ,-:+ (99 $tat. ,><>), Dec. .,, ,-:> (9- $tat. ,,6+)5 0#ril ,-, ,-:: (-,
$tat. +-)5 and =o(. ,/, ,-:: (-, $tat. ,.9:).N
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0##licability of $tate 'sury 1eilings to 1ertain Fbligations 8ssued by Bank and 0ffiliates
M$ubsection (k) (,6 '$1 .:,b-,) was re#ealed by act of *arch .,, ,-9< (-+ $tat. ,/9).N
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1i(il *oney Penalty
(l"
,. 0ny member bank which, and any institution-affiliated #arty (within the meaning of section .(u) of the 4ederal De#osit
8nsurance 0ct) with res#ect to such member bank who, (iolates any #ro(ision of this section, or any regulation issued #ursuant
thereto, shall forfeit and #ay a ci(il #enalty of not more than G>,<<< for each day during which such (iolation continues.
6. =otwithstanding #aragra#h (,), any member bank which, and any institution-affiliated #arty (within the meaning of section .(u)
of the 4ederal De#osit 8nsurance 0ct) with res#ect to such member bank who--
0.
i. commits any (iolation described in #aragra#h (,)5
ii. recklessly engages in an unsafe or unsound #ractice in conducting the affairs of such member bank5 or
iii. breaches any fiduciary duty5
B. which (iolation, #ractice, or breach--
i. is #art of a #attern of misconduct5
ii. causes or is likely to cause more than a minimal loss to such member bank5 or
iii. results in #ecuniary gain or other benefit to such #arty,
shall forfeit and #ay a ci(il #enalty of not more than G6>,<<< for each day during which such (iolation, #ractice, or
breach continues.
.. =otwithstanding #aragra#hs (,) and (6), any member bank which, and any institution-affiliated #arty (within the meaning of
section .(u) of the 4ederal De#osit 8nsurance 0ct) with res#ect to such member bank who--
0. knowingly--
i. commits any (iolation described in #aragra#h (,)5
ii. engages in any unsafe or unsound #ractice in conducting the affairs of such member bank5 or
iii. breaches any fiduciary duty5 and
B. knowingly or recklessly causes a substantial loss to such member bank or a substantial #ecuniary gain or other
benefit to such #arty by reason of such (iolation, #ractice, or breach,shall forfeit and #ay a ci(il #enalty in an amount
not to e3ceed the a##licable ma3imum amount determined under #aragra#h (+) for each day during which such
(iolation, #ractice, or breach continues.
+. !he ma3imum daily amount of any ci(il #enalty which may be assessed #ursuant to #aragra#h (.) for any (iolation, #ractice, or
breach described in such #aragra#h is--
0. in the case of any #erson other than a member bank, an amount not to e3ceed G,,<<<,<<<5 and
B. in the case of a member bank, an amount not to e3ceed the lesser of --
i. G,,<<<,<<<5 or
ii. , #ercent of the total assets of such member bank.
>. 0ny #enalty im#osed under #aragra#h (,), (6), or (.) may be assessed and collected by the Board in the manner #ro(ided in
sub#aragra#hs (B), (4), (@), and (8) of section 9(i)(6) of the 4ederal De#osit 8nsurance 0ct for #enalties im#osed (under such
section) and any such assessment shall be subKect to the #ro(isions of such section.
/. !he member bank or other #erson against whom any #enalty is assessed under this subsection shall be afforded an agency
hearing if such member bank or #erson submits a reDuest for such hearing within 6< days after the issuance of the notice of
assessment. $ection 9(h) of the 4ederal De#osit 8nsurance 0ct shall a##ly to any #roceeding under this subsection.
:. 0ll #enalties collected under authority of this subsection shall be de#osited into the !reasury.
9. 4or #ur#oses of this section, the term H(iolateH includes any action (alone or with another or others) for or toward causing,
bringing about, #artici#ating in, counseling, or aiding or abetting a (iolation.
-. !he Board shall #rescribe regulations establishing such #rocedures as may be necessary to carry out this subsection.
M,6 '$1 ><>, as added by act of =o(. ,<, ,-:9 (-6 $tat. ./+6) and amended by acts of Fct. ,>, ,-96 (-/ $tat. ,>66, ,>6.) and 0ug. -, ,-9- (,<. $tat. +:6).N
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=otice 'nder !his $ection 0fter $e#aration from $er(ice
(m" !he resignation, termination of em#loyment or #artici#ation, or se#aration of an institution-affiliated #arty (within the meaning of
section .(u) of the 4ederal De#osit 8nsurance 0ct) with res#ect to a member bank (including a se#aration caused by the closing of such
a bank) shall not affect the Kurisdiction and authority of the Board to issue any notice and #roceed under this section against any such
#arty, if such notice is ser(ed before the end of the /-year #eriod beginning on the date such #arty ceased to be such a #arty with
res#ect to such bank (whether such date occurs before, on, or after the date of the enactment of this subsection).
M,6 '$1 ><>. 0s added by act of 0ug. -, ,-9- (,<. $tat. +/,).N
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L Bffecti(e Fct. ,, 6<,,, section ,-(b)(6)(0)(i) is amended by striking Hthe ratio of . #er centumH and inserting Ha ratio of not greater than . #ercent (and which
may be 2ero)H (as amended by act of Fct. ,., 6<</ (,6< $tat. ,-/-)).
X Bffecti(e Fct. ,, 6<,,, section ,-(b)(6)(0)(ii) is amended by striking Hand not less than 9 #er centum,H and inserting H(and which may be 2ero)H (as amended by
act of Fct. ,., 6<</ (,6< $tat. ,-/-)).
Y Bffecti(e Fct. ,, 6<,,, section ,-(b)(+)(1) is remo(ed, and sub#aragra#hs (D) and (B) are redesignated as (1) and (D), res#ecti(ely (as amended by act of
Fct. ,., 6<</ (,6< $tat. ,-/-)).
Z $ection ,-(b)(,6), as added by act of Fct. ,., 6<</ (,6< $tat. ,-/9), is effecti(e Fctober ,, 6<,,.
LL Bffecti(e Fct. ,, 6<,,, section ,-(c)(,)(0) is amended by striking Hsubsection (b)(+)(1)H and inserting Hsubsection (b)H (as amended by act of Fct. ,., 6<</
(,6< $tat. ,-/-)).
%ection 1I. Bational )ank Botes $edemption #und as $eserve
,. 4und for "edem#tion of =ational Bank =otes =ot to Be 1ounted as "eser(e
$o much of sections two and three of the 0ct of ;une twentieth, eighteen hundred and se(enty-four, entitled H0n 0ct fi3ing the amount
of 'nited $tates notes, #ro(iding for a redistribution of the national-bank currency, and for other #ur#oses,H as #ro(ides that the fund
de#osited by any national banking association with the !reasurer of the 'nited $tates for the redem#tion of its notes shall be counted
as a #art of its lawful reser(e as #ro(ided in the 0ct aforesaid, is hereby re#ealed. 0nd from and after the #assage of this 0ct such fund
of fi(e #er centum shall in no case be counted by any national banking association as a #art of its lawful reser(e.
M,6 '$1 ,6,. Part of original 4ederal "eser(e 0ct5 not amended. $ection . of the act of ;une 6<, ,9:+, was re#ealed by act of $e#t. 6., ,--+ (,<9 $tat. 66-6).N
%ection 1/. )ank 3xamination
,. 0mendment of $ection >6+<, "e(ised $tatutes
$ection fifty-two hundred and forty, 'nited $tates "e(ised $tatutes, is amended to read as follows7
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6. B3amination of =ational Banks and 0ffiliates of =ational Banks
!he 1om#troller of the 1urrency, with the a##ro(al of the $ecretary of the !reasury, shall a##oint e3aminers who shall e3amine e(ery
national bank as often as the 1om#troller of the 1urrency shall deem necessary. !he e3aminer making the e3amination of any national
bank shall ha(e #ower to make a thorough e3amination of all the affairs of the bank and in doing so he shall ha(e #ower to administer
oaths and to e3amine any of the officers and agents thereof under oath and shall make a full and detailed re#ort of the condition of said
bank to the 1om#troller of the 1urrency. #ro,ie, !hat in making the e3amination of any national bank the e3aminers shall include
such an e3amination of the affairs of all its affiliates other than member banks as shall be necessary to disclose fully the relations
between such bank and such affiliates and the effect of such relations u#on the affairs of such bank5 and in the e(ent of the refusal to
gi(e any information reDuired in the course of the e3amination of any such affiliate, or in the e(ent of the refusal to #ermit such
e3amination, all the rights, #ri(ileges, and franchises of the bank shall be subKect to forfeiture in accordance with section 6 of the
4ederal "eser(e 0ct, as amended ('.$.1., title ,6, secs. ,+,, 666-66>, 69,-69/, and ><6). !he 1om#troller of the 1urrency shall ha(e
#ower, and he is hereby authori2ed, to #ublish the re#ort of his e3amination of any national banking association or affiliate which shall
not within one hundred and twenty days after notification of the recommendations or suggestions of the 1om#troller, based on said
e3amination, ha(e com#lied with the same to his satisfaction. =inety daysI notice #rior to such #ublicity shall be gi(en to the bank or
affiliate.
M,6 '$1 +9,5 "e(ised $tatutes Z >6+<, \ ,. 0s amended by acts of ;une ,/, ,-.. (+9 $tat. ,-6)5 0#ril .<, ,->/ (:< $tat. ,6+)5 and *arch .,, ,-9< (-+ $tat.
,99).N
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.. Powers in B3amining 0ffiliates5 B3#enses of B3aminations
!he e3aminer making the e3amination of any affiliate of a national bank shall ha(e #ower to make a thorough e3amination of all the
affairs of the affiliate, and in doing so he shall ha(e #ower to administer oaths and to e3amine any of the officers, directors, em#loyees,
and agents thereof under oath and to make a re#ort of his findings to the 1om#troller of the 1urrency. 8f any affiliate of a national bank
refuses to #ay any assessments, fees, or other charges im#osed by the 1om#troller of the 1urrency #ursuant to this section or fails to
make such #ayment not later than /< days after the date on which they are im#osed, the 1om#troller of the 1urrency may im#ose such
assessments, fees, or charges against the affiliated national bank, and such assessments, fees, or charges shall be #aid by such
national bank. 8f the affiliation is with 6 or more national banks, such assessments, fees, or charges may be im#osed on, and collected
from, any or all of such national banks in such #ro#ortions as the 1om#troller of the 1urrency may #rescribe. !he e3aminers and
assistant e3aminers making the e3aminations of national banking associations and affiliates thereof herein #ro(ided for and the chief
e3aminers, re(iewing e3aminers and other #ersons whose ser(ices may be reDuired in connection with such e3aminations or the
re#orts thereof, shall be em#loyed by the 1om#troller of the 1urrency with the a##ro(al of the $ecretary of the !reasury5 the
em#loyment and com#ensation of e3aminers, chief e3aminers, re(iewing e3aminers, assistant e3aminers, and of the other em#loyees
of the office of the 1om#troller of the 1urrency whose com#ensation is and shall be #aid from assessments on banks or affiliates
thereof or from other fees or charges im#osed #ursuant to this section shall be without regard to the #ro(isions of other laws a##licable
to officers or em#loyees of the 'nited $tates. !he funds deri(ed from such assessment may be de#osited by the 1om#troller of the
1urrency in accordance with the #ro(isions of section >6.+ of the "e(ised $tatutes ('.$.1., title ,6, sec. ,-6) and shall not be
construed to be @o(ernment funds or a##ro#riated monies5 and the 1om#troller of the 1urrency is authori2ed and em#owered to
#rescribe regulations go(erning the com#utation and assessment of the e3#enses of e3aminations herein #ro(ided for and the
collection of such assessments from the banks andCor affiliates e3amined. $uch funds shall not be subKect to a##ortionment for the
#ur#ose of cha#ter ,> of title .,, 'nited $tates 1ode, or under any other authority. 8f any affiliate of a national bank shall refuse to
#ermit an e3aminer to make an e3amination of the affiliate or shall refuse to gi(e any information reDuired in the course of any such
e3amination, the national bank with which it is affiliated shall be subKect to a #enalty of not more than G>,<<< for each day that any such
refusal shall continue. $uch #enalty may be assessed by the 1om#troller of the 1urrency and collected in the same manner as
e3#enses of e3aminations. !he 1om#troller of the 1urrency, u#on the reDuest of the Board of @o(ernors of the 4ederal "eser(e
$ystem, is authori2ed to assign e3aminers a##ointed under this section to e3amine foreign o#erations of $tate banks which are
members of the 4ederal "eser(e $ystem.
M,6 '$1 +9,5 "e(ised $tatutes Z >6+<, \ 6. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,-6)5 and amended by acts of 0ug. 6., ,-.> (+- $tat. :66)5 ;une .<,
,-+9 (/6 $tat. ,,/.)5 *arch .,, ,-9< (-+ $tat. ,99)5 0ug. ,<, ,-9: (,<, $tat. /..)5 0ug. -, ,-9- (,<. $tat. +:<)5 and Dec. ,-, ,--, (,<> $tat. 66+9).N
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+. $alaries of B3aminers5 0ssessments to Defray B3#enses
=otwithstanding any of the #receding #ro(isions of this section or section .<,(f)(,) of title .,, 'nited $tates 1ode, to the contrary, the
1om#troller of the 1urrency shall fi3 the com#ensation and number of, and a##oint and direct, all em#loyees of the Fffice of the
1om#troller of the 1urrency. "ates of basic #ay for all em#loyees of the Fffice may be set and adKusted by the 1om#troller without
regard to the #ro(isions of cha#ter >, or subcha#ter 888 of cha#ter >. of title >, 'nited $tates 1ode. !he 1om#troller may #ro(ide
additional com#ensation and benefits to em#loyees of the Fffice if the same ty#e of com#ensation or benefits are then being #ro(ided
by any other 4ederal bank regulatory agency or, if not then being #ro(ided, could be #ro(ided by such an agency under a##licable
#ro(isions of law, rule, or regulation. 8n setting and adKusting the total amount of com#ensation and benefits for em#loyees of the
Fffice, the 1om#troller shall consult with, and seek to maintain com#arability with, other 4ederal banking agencies.
!he 1om#troller of the 1urrency may im#ose and collect assessments, fees, or other charges as necessary or a##ro#riate to carry out
the res#onsibilities of the office of the 1om#troller. $uch assessments, fees, and other charges shall be set to meet the 1om#trollerIs
e3#enses in carrying out authori2ed acti(ities.
M,6 '$1 +965 "e(ised $tatutes Z >6+<, \\ . and +. 0s amended by acts of 0ug. 6., ,-.> (+- $tat. :66)5 0#ril .<, ,->/ (:< $tat. ,6+)5 0ug. -, ,-9- (,<. $tat
>6<)5 Dec. ,-, ,--, (,<> $tat. 66+9)5 Fct. 69, ,--6 (,</ $tat. +<:-)5 and $e#t. 6., ,--+ (,<9 $tat. 66.6).N
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>. $#ecial B3aminations by "eser(e Banks
8n addition to the e3aminations made and conducted by the 1om#troller of the 1urrency, e(ery 4ederal reser(e bank may, with the
a##ro(al of the 4ederal reser(e agent or the Board of @o(ernors of the 4ederal "eser(e $ystem, #ro(ide for s#ecial e3amination of
member banks within its district. !he e3#ense of such e3aminations may, in the discretion of the Board of @o(ernors of the 4ederal
"eser(e $ystem, be assessed against the banks e3amined, and, when so assessed, shall be #aid by the banks e3amined. $uch
e3aminations shall be so conducted as to inform the 4ederal reser(e bank of the condition of its member banks and of the lines of
credit which are being e3tended by them. B(ery 4ederal reser(e bank shall at all times furnish to the Board of @o(ernors of the 4ederal
"eser(e $ystem such information as may be demanded concerning the condition of any member bank within the district of the said
4ederal reser(e bank.
M,6 '$1 +9.5 "e(ised $tatutes Z >6+<, \ >. 0s amended by act of ;une 6/, ,-.< (+/ $tat. 9,+).N
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/. Aisitatorial Powers
(a" =o national bank shall be subKect to any (isitatorial #owers other than such as are authori2ed by law, or (ested in the courts of
Kustice or such as shall be or shall ha(e been e3ercised or directed by 1ongress, or by either ouse thereof or by any committee of
1ongress or of either ouse duly authori2ed.
(b" =otwithstanding subsection (a) of this section, lawfully authori2ed $tate auditors and e3aminers may, at reasonable times and u#on
reasonable notice to a bank, re(iew its records solely to ensure com#liance with a##licable $tate unclaimed #ro#erty or escheat laws
u#on reasonable cause to belie(e that the bank has failed to com#ly with such laws.
M,6 '$1 +9+5 "e(ised $tatutes Z >6+<, \ /. 0s amended by acts of Fct. ,>, ,-96 (-/ $tat. ,>6,) and ;an. ,6, ,-9. (-/ $tat. 6>,<).N
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:. B3aminations of 4ederal "eser(e Banks
!he Board of @o(ernors of the 4ederal "eser(e $ystem shall, at least once each year, order an e3amination of each 4ederal reser(e
bank, and u#on Koint a##lication of ten member banks the Board of @o(ernors of the 4ederal "eser(e $ystem shall order a s#ecial
e3amination and re#ort of the condition of any 4ederal reser(e bank.
M,6 '$1 +9>5 "e(ised $tatutes Z >6+<, \ :. Part of original 4ederal "eser(e 0ct5 not amended.N
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9. B3#enses of B3amining !rust De#artments of =ational Banks
8n addition to the e3#ense of e3amination to be assessed by the 1om#troller of the 1urrency as heretofore #ro(ided, all national banks
e3ercising fiduciary #owers and all banks or trust com#anies in the District of 1olumbia e3ercising fiduciary #owers shall be assessed
by the 1om#troller of the 1urrency for the e3amination of their fiduciary acti(ities a fee adeDuate to co(er the e3#ense thereof.
M,6 '$1 +96. 0s added by act of ;uly 6, ,-.6 (+: $tat. >/9)5 and amended by act of 0#ril .<, ,->/ (:< $tat. ,6+).N
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-. Wai(er of "e#orts and B3aminations of 0ffiliates
Whene(er member banks are reDuired to obtain re#orts from affiliates, or whene(er affiliates of member banks are reDuired to submit
to e3amination, the Board of @o(ernors of the 4ederal "eser(e $ystem or the 1om#troller of the 1urrency, as the case may be, may
wai(e such reDuirements with res#ect to any such re#ort or e3amination of any affiliate if in the Kudgment of the said Board or
1om#troller, res#ecti(ely, such re#ort or e3amination is not necessary to disclose fully the relations between such affiliate and such
bank and the effect thereof u#on the affairs of such bank.
M,6 '$1 +9/. 0s added by act of 0ug. 6., ,-.> (+- $tat. :,>).N
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%ection 11. +ffenses of 3xaminers, ember )anks, +fficers, and Cirectors
,. 8nsol(ency of *ember Banks
M$ubsections (a), (b), and (c) were re#ealed by section 6,, act of ;une 6>, ,-+9 (/6 $tat. 9/+), but substance thereof was incor#orated in ,9 '$1 6,6, 6,., 6,>,
/>>, ,-</, and ,-<-.N
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Purchases by *ember Banks from !heir Directors
(#" 0ny member bank may contract for, or #urchase from, any of its directors or from any firm of which any of its directors is a member,
any securities or other #ro#erty, when (and not otherwise) such #urchase is made in the regular course of business u#on terms not less
fa(orable to the bank than those offered to others, or when such #urchase is authori2ed by a maKority of the board of directors not
interested in the sale of such securities or #ro#erty, such authority to be e(idenced by the affirmati(e (ote or written assent of such
directors7 #ro,ie) howe,er) !hat when any director, or firm of which any director is a member, acting for or on behalf of others, sells
securities or other #ro#erty to a member bank, the Board of @o(ernors of the 4ederal "eser(e $ystem by regulation may, in any or all
cases, reDuire a full disclosure to be made, on forms to be #rescribed by it, of all commissions or other considerations recei(ed, and
whene(er such director or firm, acting in his or its own behalf, sells securities or other #ro#erty to the bank the Board of @o(ernors of
the 4ederal "eser(e $ystem, by regulation, may reDuire a full disclosure of all #rofit reali2ed from such sale.
M,6 '$1 .:>. 0s added by act of $e#t. 6/, ,-,9 (+< $tat. -:,), which com#letely re(ised this section.N
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$ales by *ember Banks to !heir Directors
0ny member bank may sell securities or other #ro#erty to any of its directors, or to a firm of which any of its directors is a member, in
the regular course of business on terms not more fa(orable to such director or firm than those offered to others, or when such sale is
authori2ed by a maKority of the board of directors of a member bank to be e(idenced by their affirmati(e (ote or written assent7
#ro,ie) howe,er) !hat nothing in this subsection contained shall be construed as authori2ing member banks to #urchase or sell
securities or other #ro#erty which such banks are not otherwise authori2ed by law to #urchase or sell.
M,6 '$1 .:>. 0s added by act of $e#t. 6/, ,-,9 (+< $tat. -:,), which com#letely re(ised this section.N
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8nterest on De#osits of Directors, Ffficers, and Bm#loyees
(e" =o member bank shall #ay to any director, officer, attorney, or em#loyee a greater rate of interest on the de#osits of such director,
officer, attorney, or em#loyee than that #aid to other de#ositors on similar de#osits with such member bank.
M,6 '$1 .:/. 0s added by act of ;une 6,, ,-,: (+< $tat. 6+<)5 and amended by act of $e#t. 6/, ,-,9 (+< $tat. -:,), which com#letely re(ised this section.N
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Liability for Damages "esulting from Aiolations
(f" 8f the directors or officers of any member bank shall knowingly (iolate or #ermit any of the agents, officers, or directors of any
member bank to (iolate any of the #ro(isions of this section or regulations of the board made under authority thereof, or any of the
#ro(isions of sections 6,:, 6,9, 6,-, 66<, />>, ,<<>, ,<,+, ,-</, or ,-<- of title ,9, 'nited $tates 1ode, e(ery director and officer
#artici#ating in or assenting to such (iolation shall be held liable in his #ersonal and indi(idual ca#acity for all damages which the
member bank, its shareholders, or any other #ersons shall ha(e sustained in conseDuence of such (iolation.
M,6 '$1 ><.. 0s added by act of $e#t. 6/, ,-,9 (+< $tat. -:,), which com#letely re(ised this section5 amended by act of $e#t. ., ,->+ (/9 $tat. ,6./). $ections
6,:, 6,9, 6,-, and 66< were res#ecti(ely redesignated sections 6,6, 6,., 6,+, and 6,> by the act of Fct. 6., ,-/6 (:/ $tat. ,,6>).N
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Loans to B3ecuti(e Ffficers by *ember Banks
(g"
,. B3ce#t as authori2ed under this subsection, no member bank may e3tend credit in any manner to any of its own e3ecuti(e
officers. =o e3ecuti(e officer of any member bank may become indebted to that member bank e3ce#t by means of an
e3tension of credit which the bank is authori2ed to make under this subsection. 0ny e3tension of credit under this subsection
shall be #rom#tly re#orted to the board of directors of the bank, and may be made only if--
0. !he bank would be authori2ed to make it to borrowers other than its officers5
B. it is on terms not more fa(orable than those afforded other borrowers5
1. the officer has submitted a detailed current financial statement5 and
D. it is on condition that it shall become due and #ayable on demand of the bank at any time when the officer is indebted
to any other bank or banks on account of e3tensions of credit of any one of the three categories res#ecti(ely referred
to in #aragra#hs (6), (.), and (+) in an aggregate amount greater than the amount of credit of the same category that
could be e3tended to him by the bank of which he is an officer.
6. 0 member bank may make a loan to any e3ecuti(e officer of the bank if, at the time the loan is made--
0. it is secured by a first lien on a dwelling which is e3#ected, after the making of the loan, to be owned by the officer and
used by him as his residence, and
B. no other loan by the bank to the officer under authority of this #aragra#h is outstanding.
.. 0 member bank may make e3tensions of credit to any e3ecuti(e officer of the bank, to finance the education of the children of
the officer.
+. 0 member bank may make e3tensions of credit not otherwise s#ecifically authori2ed under this subsection to any e3ecuti(e
officer of the bank, in an amount #rescribed in a regulation of the member bankIs a##ro#riate 4ederal banking agency.
>. B3ce#t to the e3tent #ermitted under #aragra#h (+), a member bank may not e3tend credit to a #artnershi# in which one or
more of its e3ecuti(e officers are #artners ha(ing either indi(idually or together a maKority interest. 4or the #ur#oses of
#aragra#h (+), the full amount of any credit so e3tended shall be considered to ha(e been e3tended to each officer of the bank
who is a member of the #artnershi#.
/. !his subsection does not #rohibit any e3ecuti(e officer of a member bank from endorsing or guaranteeing for the #rotection of
the bank any loan or other asset #re(iously acDuired by the bank in good faith or from incurring any indebtedness to the bank
for the #ur#ose of #rotecting the bank against loss or gi(ing financial assistance to it.
:. Bach day that any e3tension of credit in (iolation of this subsection e3ists is a continuation of the (iolation for the #ur#oses of
section 9 of the 4ederal De#osit 8nsurance 0ct.
9. !he Board of @o(ernors of the 4ederal "eser(e $ystem may #rescribe such rules and regulations, including definitions of
terms, as it deems necessary to effectuate the #ur#oses and to #re(ent e(asions of this subsection.
M,6 '$1 .:>a. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,96)5 amended by Public "esolution a##ro(ed ;une ,+, ,-.> (+- $tat. .:>)5 and by acts of 0ug. 6.,
,-.> (+- $tat. :,/)5 0#ril 6>, ,-.9 (>6 $tat. 66.)5 ;une 6<, ,-.- (>. $tat. 9+6)5 ;uly ., ,-/: (9, $tat. ,<-)5 =o(. ,<, ,-:9 (-6 $tat. .//>)5 Fct. ,>, ,-96 (-/
$tat. ,>66)5 $e#t. 6., ,--+ (,<9 $tat. 66..)5 and Fct. ,., 6<</ (,6< $tat. ,-:9).N
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B3tensions of 1redit to B3ecuti(e Ffficers, Directors, and Princi#al $hareholders of *ember Banks
(h"
,. =o member bank may e3tend credit to any of its e3ecuti(e officers, directors, or #rinci#al shareholders, or to any related
interest of such a #erson, e3ce#t to the e3tent #ermitted under #aragra#hs (6), (.), (+), and (/).
6.
0. 0 member bank may e3tend credit to its e3ecuti(e officers, directors, or #rinci#al shareholders, or to any related
interest of such a #erson, only if the e3tension of credit--
i. is made on substantially the same terms, including interest rates and collateral, as those #re(ailing at the time
for com#arable transactions by the bank with #ersons who are not e3ecuti(e officers, directors, #rinci#al
shareholders, or em#loyees of the bank5
ii. does not in(ol(e more than the normal risk of re#ayment or #resent other unfa(orable features5 and
iii. the bank follows credit underwriting #rocedures that are not less stringent than those a##licable to
com#arable transactions by the bank with #ersons who are not e3ecuti(e officers, directors, #rinci#al
shareholders, or em#loyees of the bank.
B. =othing in this #aragra#h shall #rohibit any e3tension of credit made #ursuant to a benefit or com#ensation #rogram--
i. that is widely a(ailable to em#loyees of the member bank5 and
ii. that does not gi(e #reference to any officer, director, or #rinci#al shareholder of the member bank, or to any
related interest of such #erson, o(er other em#loyees of the member bank.
.. 0 member bank may e3tend credit to a #erson described in #aragra#h (,) in an amount that, when aggregated with the
amount of all other outstanding e3tensions of credit by that bank to each such #erson and that #ersonIs related interests,
would e3ceed an amount #rescribed by regulation of the a##ro#riate 4ederal banking agency (as defined in section . of the
4ederal De#osit 8nsurance 0ct) only if--
0. the e3tension of credit has been a##ro(ed in ad(ance by a maKority (ote of that bankIs entire board of directors5 and
B. the interested #arty has abstained from #artici#ating, directly or indirectly, in the deliberations or (oting on the
e3tension of credit.
+. 0 member bank may e3tend credit to any e3ecuti(e officer, director, or #rinci#al shareholder, or to any related interest of such
a #erson, only if the e3tension of credit is in an amount that, when aggregated with the amount of all outstanding e3tensions of
credit by that bank to that #erson and that #ersonIs related interests, would not e3ceed the limits on loans to a single borrower
established by section >6<< of the "e(ised $tatutes. 4or #ur#oses of this #aragra#h, section >6<< of the "e(ised $tatutes
shall be deemed to a##ly to a $tate member bank as if the $tate member bank were a national banking association.
>.
0. 0 member bank may e3tend credit to any e3ecuti(e officer, director, or #rinci#al shareholder, or to any related interest
of such a #erson, if the e3tension of credit is in an amount that, when aggregated with the amount of all outstanding
e3tensions of credit by that bank to its e3ecuti(e officers, directors, #rinci#al shareholders, and those #ersonsI related
interests would not e3ceed the bankIs unim#aired ca#ital and unim#aired sur#lus.
B. !he Board may, by regulation, #rescribe a limit that is more stringent than that contained in sub#aragra#h (0).
1. !he Board may, by regulation, make e3ce#tions to sub#aragra#h (0) for member banks with less than G,<<,<<<,<<<
in de#osits if the Board determines that the e3ce#tions are im#ortant to a(oid constricting the a(ailability of credit in
small communities or to attract directors to such banks. 8n no case may the aggregate amount of all outstanding
e3tensions of credit to a bankIs e3ecuti(e officers, directors, #rinci#al shareholders, and those #ersonsI related
interests be more than 6 times the bankIs unim#aired ca#ital and unim#aired sur#lus.
/.
0. 8f any e3ecuti(e officer or director has an account at the member bank, the bank may not #ay on behalf of that #erson
an amount e3ceeding the funds on de#osit in the account.
B. $ub#aragra#h (0) does not #rohibit a member bank from #aying funds in accordance with--
i. a written #reauthori2ed, interest-bearing e3tension of credit s#ecifying a method of re#ayment5 or
ii. a written #reauthori2ed transfer of funds from another account of the e3ecuti(e officer or director at that bank.
:. =o e3ecuti(e officer, director, or #rinci#al shareholder shall knowingly recei(e (or knowingly #ermit any of that #ersonIs related
interests to recei(e) from a member bank, directly or indirectly, any e3tension of credit not authori2ed under this subsection.
9.
0. 4or #ur#oses of this subsection, any e3ecuti(e officer, director, or #rinci#al shareholder (as the case may be) of any
com#any of which the member bank is a subsidiary, or of any other subsidiary of that com#any, shall be deemed to be
an e3ecuti(e officer, director, or #rinci#al shareholder (as the case may be) of the member bank.
B. !he Board may, by regulation, make e3ce#tions to sub#aragra#h (0) for any e3ecuti(e officer or director of a
subsidiary of a com#any that controls the member bank if--
i. the e3ecuti(e officer or director does not ha(e authority to #artici#ate, and does not #artici#ate, in maKor
#olicymaking functions of the member bank5 and
ii. the assets of such subsidiary do not e3ceed ,< #ercent of the consolidated assets of a com#any that controls
the member bank and such subsidiary (and is not controlled by any other com#any).
-. 4or #ur#oses of this subsection7
0.
i% B3ce#t as #ro(ided in clause (ii), the term 0company0 means any cor#oration, #artnershi#, business or other
trust, association, Koint (enture, #ool syndicate, sole #ro#rietorshi#, unincor#orated organi2ation, or other
business entity.
ii% !he term 0company0 does not include--
8. an insured de#ository institution (as defined in section . of the 4ederal De#osit 8nsurance 0ct)5 or
88. a cor#oration the maKority of the shares of which are owned by the 'nited $tates or by any $tate.
B% 0 #erson contro!s a com#any or bank if that #erson, directly or indirectly, or acting through or in concert with , or more
#ersons--
i. owns, controls, or has the #ower to (ote 6> #ercent or more of any class of the com#anyIs (oting securities5
ii. controls in any manner the election of a maKority of the com#anyIs directors5 or
iii. has the #ower to e3ercise a controlling influence o(er the com#anyIs management or #olicies.
C% 0 #erson is an 0e3ecuti,e officer0 of a com#any or bank if that #erson #artici#ates or has authority to #artici#ate (other
than as a director) in maKor #olicymaking functions of the com#any or bank.
D.
i% 0 member bank e3tens creit by making or renewing any loan, granting a line of credit, or entering into any
similar transaction as a result of which a #erson becomes obligated (directly or indirectly, or by any means
whatsoe(er) to #ay money or its eDui(alent to the bank.
ii. !he Board may, by regulation, make e3ce#tions to clause (i) for transactions that the Board determines #ose
minimal risk.
-% !he term 0mem%er %ank0 includes any subsidiary of a member bank.
F% !he term 0principa! shareho!er0--
i. means any #erson that directly or indirectly, or acting through or in concert with one or more #ersons, owns,
controls, or has the #ower to (ote more than ,< #ercent of any class of (oting securities of a member bank or
com#any5 and
ii. does not include a com#any of which a member bank is a subsidiary.
.% 0 0re!ate interest0 of a #erson is--
i. any com#any controlled by that #erson5 and
ii. any #olitical or cam#aign committee that is controlled by that #erson or the funds or ser(ices of which will
benefit that #erson.
7% !he term 0su%siiary0 has the same meaning as in section 6 of the Bank olding 1om#any 0ct of ,->/.
,. !he Board of @o(ernors of the 4ederal "eser(e $ystem may #rescribe such regulations, including definitions of terms, as it
determines to be necessary to effectuate the #ur#oses and #re(ent e(asions of this subsection.
M,6 '$1 .:>b. 0s added by act of =o(. ,<, ,-:9 (-6 $tat. ./++) and amended by acts of Fct. ,>, ,-96 (-/ $tat. ,>6<, ,>66)5 Dec. ,-, ,--, (,<>
$tat. 6.>>, 6.>9, 6.>-)5 Fct. 69, ,--6 (,</ $tat. .9->, +<9/)5 $e#t. 6., ,--+ (,<9 $tat. 66..)5 and $e#t. .< ,--/ (,,< $tat. .<<--+,<).N
M$ubsections (i), (K), and (k) were re#ealed by section 6,, act of ;une 6>, ,-+9 (/6 $tat. 9//). owe(er, substance of subsections (h), (i), and (k) was
incor#orated in ,9 '$1 6,+, />/, ,<<>, and ,<,+. $ubsection (K), which #rohibited members of 1ongress from recei(ing benefits from any contracts
or agreements of any 4ederal "eser(e Bank was in effect continued in title ,9, section +.., which does not include contracts of 4ederal "eser(e
Banks as e3em#t from the #rohibition of section +., against such members ha(ing an interest in federal agency contracts.N
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%ection 1=. Interbank 7iabilities M
(a" !he #ur#ose of this section is to limit the risks that the failure of a large de#ository institution (whether or not that institution is an
insured de#ository institution) would #ose to insured de#ository institutions.
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0ggregate Limits on 8nsured De#ository 8nstitutionsI B3#osure to Fther De#ository 8nstitutions
(b" !he Board shall, by regulation or order, #rescribe standards that ha(e the effect of limiting the risks #osed by an insured de#ository
institutionIs e3#osure to any other de#ository institution.
M,6 '$1 .:,b-6(b). 0s added by act of Dec. ,-, ,--, (,<> $tat. 6./6).N
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HB3#osureH Defined
(+"
,. 4or #ur#oses of subsection (b), an insured de#ository institutionIs He3#osureH to another de#ository institution means--
0. all e3tensions of credit to the other de#ository institution, regardless of name or descri#tion, including--
i. all de#osits at the other de#ository institution5
ii. all #urchases of securities or other assets from the other de#ository institution subKect to an agreement to
re#urchase5 and
iii. all guarantees, acce#tances, or letters of credit (including endorsements or standby letters of credit) on behalf
of the other de#ository institution5
B. all #urchases of or in(estments in securities issued by the other de#ository institution5
1. all securities issued by the other de#ository institution acce#ted as collateral for an e3tension of credit to any #erson5
and
D. all similar transactions that the Board by regulation determines to be e3#osure for #ur#oses of this section.
6. !he Board may, at its discretion, by regulation or order, e3em#t transactions from the definition of He3#osureH if it finds the
e3em#tions to be in the #ublic interest and consistent with the #ur#ose of this section.
.. 4or #ur#oses of this section, any transaction by an insured de#ository institution with any #erson is a transaction with another
de#ository institution to the e3tent that the #roceeds of the transaction are used for the benefit of, or transferred to, that other
de#ository institution.
M,6 '$1 .:,b-6(c). 0s added by act of Dec. ,-, ,--, (,<> $tat. 6./6.N
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H8nsured De#ository 8nstitutionH Defined
(#" 4or #ur#oses of this section, the term Hinsured de#ository institutionH has the same meaning as in section . of the 4ederal De#osit
8nsurance 0ct.
M,6 '$1 .:,b-6(d). 0s added by act of Dec. ,-, ,--, (,<> $tat. 6./6).N
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"ulemaking 0uthority5 Bnforcement
(e" !he Board may issue such regulations and orders, including definitions consistent with this section, as may be necessary to
administer and carry out the #ur#ose of this section. !he a##ro#riate 4ederal banking agency shall enforce com#liance with those
regulations under section 9 of the 4ederal De#osit 8nsurance 0ct.
M,6 '$1 .:,b-6(e). 0s added by act of Dec. ,-, ,--, (,<> $tat. 6./6).N
L !he original section 6. was re#ealed by section : of the act of $e#t. 9, ,->- (:. $tat. +>:). !his section 6. is effecti(e Dec. ,-, ,--6.
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%ection 1=!. $elations with !ffiliates
"estrictions on !ransactions with 0ffiliates
(a"
,. 0 member bank and its subsidiaries may engage in a co(ered transaction with an affiliate only if--
0. in the case of any affiliate, the aggregate amount of co(ered transactions of the member bank and its subsidiaries will
not e3ceed ,< #er centum of the ca#ital stock and sur#lus of the member bank5 and
B. in the case of all affiliates, the aggregate amount of co(ered transactions of the member bank and its subsidiaries will
not e3ceed 6< #er centum of the ca#ital stock and sur#lus of the member bank.
6. 4or the #ur#ose of this section, any transaction by a member bank with any #erson shall be deemed to be a transaction with
an affiliate to the e3tent that the #roceeds of the transaction are used for the benefit of, or transferred to, that affiliate.
.. a member bank and its subsidiaries may not #urchase a low-Duality asset from an affiliate unless the bank or such subsidiary,
#ursuant to an inde#endent credit e(aluation, committed itself to #urchase such asset #rior to the time such asset was
acDuired by the affiliate.
+. 0ny co(ered transactions and any transactions e3em#t under subsection (d) between a member bank and an affiliate shall be
on terms and conditions that are consistent with safe and sound banking #ractices.
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Definitions
(b" 4or the #ur#ose of this section--
,. the term HaffiliateH with res#ect to a member bank means--
0. any com#any that controls the member bank and any other com#any that is controlled by the com#any that controls
the member bank5
B. a bank subsidiary of the member bank5
1. any com#any--
i. that is controlled directly or indirectly, by a trust or otherwise, by or for the benefit of shareholders who
beneficially or otherwise control, directly or indirectly, by trust or otherwise, the member bank or any com#any
that controls the member bank5 or
ii. in which a maKority of its directors or trustees constitute a maKority of the #ersons holding any such office with
the member bank or any com#any that controls the member bank5
D.
i. any com#any, including a real estate in(estment trust, that is s#onsored and ad(ised on a contractual basis
by the member bank or any subsidiary or affiliate of the member bank5 or
ii. any in(estment com#any with res#ect to which a member bank or any affiliate thereof is an in(estment
ad(isor as defined in section 6(a)(6<) of the 8n(estment 1om#any 0ct of ,-+<5 and
B. any com#any that the Board determines by regulation or order to ha(e a relationshi# with the member bank or any
subsidiary or affiliate of the member bank, such that co(ered transactions by the member bank or its subsidiary with
that com#any may be affected by the relationshi# to the detriment of the member bank or its subsidiary5 and
6. !he following shall not be considered to be an affiliate7
0. any com#any, other than a bank, that is a subsidiary of a member bank, unless a determination is made under
#aragra#h (,)(B) not to e3clude such subisidary com#any from the definition of affiliate5
B. any com#any engaged solely in holding the #remises of the member bank5
1. any com#any engaged solely in conducting a safe de#osit business5
D. any com#any engaged solely in holding obligations of the 'nited $tates or its agencies or obligations fully guaranteed
by the 'nited $tates or its agencies as to #rinci#al and interest5 and
B. any com#any where control results from the e3ercise of rights arising out of a bona fide debt #re(iously contracted,
but only for the #eriod of time s#ecifically authori2ed under a##licable $tate or 4ederal law or regulation or, in the
absence of such law or regulation, for a #eriod of two years from the date of the e3ercise of such rights or the effecti(e
date of this 0ct, whiche(er date is later, subKect, u#on a##lication, to authori2ation by the Board for good cause shown
of e3tensions of time for not more than one year at a time, but such e3tensions in the aggregate shall not e3ceed
three years5
..
0. a com#any or shareholder shall be deemed to ha(e control o(er another com#any if--
i. such com#any or shareholder, directly or indirectly, or acting through one or more other #ersons owns,
controls, or has #ower to (ote 6> #er centum or more of any class of (oting securities of the other com#any5
ii. such com#any or shareholder controls in any manner the election of a maKority of the directors or trustees of
the other com#any5 or
iii. the Board determines, after notice and o##ortunity for hearing, that such com#any or shareholder, directly or
indirectly, e3ercises a controlling influence o(er the management or #olicies of the other com#any5 and
B. notwithstanding any other #ro(ision of this section, no com#any shall be deemed to own or control another com#any
by (irtue of its ownershi# or control of shares in a fiduciary ca#acity, e3ce#t as #ro(ided in #aragra#h (,)(1) of this
subsection or if the com#any owning or controlling such shares is a business trust5
+. the term HsubsidiaryH with res#ect to a s#ecified com#any means a com#any that is controlled by such s#ecified com#any5
>. the term HbankH includes a $tate bank, national bank, banking association, and trust com#any5
/. the term Hcom#anyH means a cor#oration, #artnershi#, business trust, association, or similar organi2ation and, unless
s#ecifically e3cluded, the term Hcom#anyH includes a Hmember bankH and a HbankH5
:. the term Hco(ered transactionH means with res#ect to an affiliate of a member bank--
0. a loan or e3tension of credit to the affiliate5
B. a #urchase of or an in(estment in securities issued by the affiliate5
1. a #urchase of assets, including assets subKect to an agreement to re#urchase, from the affiliate, e3ce#t such #urchase
of real and #ersonal #ro#erty as may be s#ecifically e3em#ted by the Board by order or regulation5
D. the acce#tance of securities issued by the affiliate as collateral security for a loan or e3tension of credit to any #erson
or com#any5 or
B. the issuance of a guarantee, acce#tance, or letter of credit, including an endorsement or standby letter of credit, on
behalf of an affiliate5
9. the term Haggregate amount of co(ered transactionsH means the amount of the co(ered transactions about to be engaged in
added to the current amount of all outstanding co(ered transactions5
-. the term HsecuritiesH means stocks, bonds, debentures, notes, or other similar obligations5 and
,<. the term Hlow-Duality assetH means an asset that falls in any one or more of the following categories7
0. an asset classified as HsubstandardH, HdoubtfulH, or HlossH or treated as Hother loans es#ecially mentionedH in the most
recent re#ort of e3amination or ins#ection of an affiliate #re#ared by either a 4ederal or $tate su#er(isory agency5
B. an asset in a nonaccrual status5
1. an asset on which #rinci#al or interest #ayments are more than thirty days #ast due5 or
D. an asset whose terms ha(e been renegotiated or com#romised due to the deteriorating financial condition of the
obligor.
,,. 8n addition to #aragra#h (.), a com#any or shareholder shall be #resumed to control any other com#any if the com#any or
shareholder, directly or indirectly, or acting through , or more other #ersons, owns or controls ,> #ercent or more of the eDuity
ca#ital of the other com#any #ursuant to sub#aragra#h () or (8) of section +(k)(+) of the Bank olding 1om#any 0ct of ,->/
or rules ado#ted under section ,66 of the @ramm-Leach-Bliley 0ct, if any, unless the com#any or shareholder #ro(ides
information acce#table to the Board to rebut this #resum#tion of control.
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1ollateral for 1ertain !ransactions with 0ffiliates
(+"
,. Bach loan or e3tension of credit to, or guarantee, acce#tance, or letter of credit issued on behalf of, an affiliate by a member
bank or its subsidiary shall be secured at the time of the transaction by collateral ha(ing a market (alue eDual to-
0. ,<< #er centum of the amount of such loan or e3tension of credit, guarantee, acce#tance, or letter of credit, if the
collateral is com#osed of--
i. obligations of the 'nited $tates or its agencies5
ii. obligations fully guaranteed by the 'nited $tates or its agencies as to #rinci#al and interest5
iii. notes, drafts, bills of e3change or bankersI acce#tances that are eligible for rediscount or #urchase by a
4ederal "eser(e Bank5 or
i(. a segregated, earmarked de#osit account with the member bank5
B. ,,< #er centum of the amount of such loan or e3tension of credit, guarantee, acce#tance, or letter of credit if the
collateral is com#osed of obligations of any $tate or #olitical subdi(ision of any $tate5
1. ,6< #er centum of the amount of such loan or e3tension of credit, guarantee, acce#tance, or letter of credit if the
collateral is com#osed of other debt instruments, including recei(ables5 or
D. ,.< #er centum of the amount of such loan or e3tension of credit, guarantee, acce#tance, or letter of credit if the
collateral is com#osed of stock, leases, or other real or #ersonal #ro#erty.
6. 0ny such collateral that is subseDuently retired or amorti2ed shall be re#laced by additional eligible collateral where needed to
kee# the #ercentage of the collateral (alue relati(e to the amount of the outstanding loan or e3tension of credit, guarantee,
acce#tance, or letter of credit eDual to the minimum #ercentage reDuired at the ince#tion of the transaction.
.. 0 low-Duality asset shall not be acce#table as collateral for a loan or e3tension of credit to, or guarantee, acce#tance, or letter
of credit issued on behalf of, an affiliate.
+. !he securities issued by an affiliate of the member bank shall not be acce#table as collateral for a loan or e3tension of credit
to, or guarantee, acce#tance, or letter of credit issued on behalf of, that affiliate or any other affiliate of the member bank.
>. !he collateral reDuirements of this #aragra#h shall not be a##licable to an acce#tance that is already fully secured either by
attached documents or by other #ro#erty ha(ing an ascertainable market (alue that is in(ol(ed in the transaction.
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B3em#tions
(#" !he #ro(isions of this section, e3ce#t #aragra#h (a)(+), shall not be a##licable to--
,. any transaction, subKect to the #rohibition contained in subsection (a)(.), with a bank--
0. which controls 9< #er centum or more of the (oting shares of the member bank5
B. in which the member bank controls 9< #er centum or more of the (oting shares5 or
1. in which 9< #er centum or more of the (oting shares are controlled by the com#any that controls 9< #er centum or
more of the (oting shares of the member bank5
6. making de#osits in an affiliated bank or affiliated foreign bank in the ordinary course of corres#ondent business, subKect to any
restrictions that the Board may #rescribe by regulation or order5
.. gi(ing immediate credit to an affiliate for uncollected items recei(ed in the ordinary course of business5
+. making a loan or e3tension of credit to, or issuing a guarantee, acce#tance, or letter of credit on behalf of, an affiliate that is
fully secured by--
0. obligations of the 'nited $tates or its agencies5
B. obligations fully guaranteed by the 'nited $tates or its agencies as to #rinci#al and interest5 or
1. a segregated, earmarked de#osit account with the member bank5
>. #urchasing securities issued by any com#any of the kinds described in section +(c)(,) of the Bank olding 1om#any 0ct of
,->/5
/. #urchasing assets ha(ing a readily identifiable and #ublicly a(ailable market Duotation and #urchased at that market Duotation
or, subKect to the #rohibition contained in subsection (a)(.), #urchasing loans on a nonrecourse basis from affiliated banks5 and
:. #urchasing from an affiliate a loan or e3tension of credit that was originated by the member bank and sold to the affiliate
subKect to a re#urchase agreement or with recourse.
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(e" "ules relating to banks with financial subsidiaries.
,. 4or #ur#oses of this section and section 6.B, the term Hfinancial subsidiaryH means any com#any that is a subsidiary of a bank
that would be a financial subsidiary of a national bank under section >,./0 of the "e(ised $tatutes of the 'nited $tates.
6. 4or #ur#oses of a##lying this section and section 6.B, and notwithstanding subsection (b)(6) of this section or section 6.B(d)
(,), a financial subsidiary of a bank--
0. shall be deemed to be an affiliate of the bank5 and
B. shall not be deemed to be a subsidiary of the bank.
..
0. =otwithstanding #aragra#h (6), the restriction contained in subsection (a)(,)(0) shall not a##ly with res#ect to co(ered
transactions between a bank and any indi(idual financial subsidiary of the bank.
B. =otwithstanding #aragra#h (6) or subsection (b)(:), a bankIs in(estment in a financial subsidiary of the bank shall not
include retained earnings of the financial subsidiary.
+. 4or #ur#oses of this section and section 6.B--
0. any #urchase of, or in(estment in, the securities of a financial subsidiary of a bank by an affiliate of the bank shall be
considered to be a #urchase of or in(estment in such securities by the bank5 and
B. any e3tension of credit by an affiliate of a bank to a financial subsidiary of the bank shall be considered to be an
e3tension of credit by the bank to the financial subsidiary if the Board determines that such treatment is necessary or
a##ro#riate to #re(ent e(asions of this 0ct and the @ramm-Leach-Bliley 0ct.
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"ulemaking and 0dditional B3em#tions
(f"
,. !he Board may issue such further regulations and orders, including definitions consistent with this section, as may be
necessary to administer and carry out the #ur#oses of this section and to #re(ent e(asions thereof.
6. !he Board may, at its discretion, by regulation or order e3em#t transactions or relationshi#s from the reDuirements of this
section if it finds such e3em#tions to be in the #ublic interest and consistent with the #ur#oses of this section.
..
0. =ot later than ,9 months after the date of the enactment of the @ramm-Leach-Bliley 0ct, the Board shall ado#t final
rules under this section to address as co(ered transactions credit e3#osure arising out of deri(ati(e transactions
between member banks and their affiliates and intraday e3tensions of credit by member banks to their affiliates.
B. !he effecti(e date of any final rule ado#ted by the Board #ursuant to sub#aragra#h (0) shall be delayed for such
#eriod as the Board deems necessary or a##ro#riate to #ermit banks to conform their acti(ities to the reDuirements of
the final rule without undue hardshi#.
M,6 '$1 .:,c. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,9.) and amended by acts of 0ug. 6., ,-.> (+- $tat. :,:)5 ;une .<, ,->+ (/9
$tat. .>9)5 $e#t. 9, ,->- (:. $tat. +>:)5 ;uly ,, ,-// (9< $tat. 6+,, 6+.)5 Fct. ,>, ,-96 (-/ $tat. ,>,>)5 ;an. ,6, ,-9. (-/ $tat. 6><-)5 and
=o(. ,6, ,--- (,,. $tat. ,.:9, ,.:-, ,.9<). $ection +,< of the @arn-$t @ermain De#ository 8nstitutions 0ct of ,-96, which com#letely
re(ised this section, #ro(ides in #aragra#h (c) (,6 '$1 .:,c note) the following7
(c) $ection 6.0 of the 4ederal "eser(e 0ct, as amended by this section, shall a##ly to any transaction entered into after the date of
enactment of this 0ct MFctober ,>, ,-96N, e3ce#t for transactions which are the subKect of a binding written contract or commitment entered
into on or before ;uly 69, ,-96, and e3ce#t that any renewal of a #artici#ation in a loan outstanding on ;uly 69, ,-96, to a com#any that
becomes an affiliate as a result of the enactment of this 0ct, or any #artici#ation in a loan to such an affiliate emanating from the renewal of
a binding written contract or commitment outstanding on ;uly 69, ,-96, shall not be subKect to the collateral reDuirements of this 0ct.N
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%ection 1=). $estrictions on Transactions with !ffiliates
(a"
,. 0 member bank and its subsidiaries may engage in any of the transactions described in #aragra#h (6) only--
0. on terms and under circumstances, including credit standards, that are substantially the same, or at least as fa(orable
to such bank or its subsidiary, as those #re(ailing at the time for com#arable transactions with or in(ol(ing other
nonaffiliated com#anies, or
B. in the absence of com#arable transactions, on terms and under circumstances, including credit standards, that in
good faith would be offered to, or would a##ly to, nonaffiliated com#anies.
6. Paragra#h (,) a##lies to the following7
0. 0ny co(ered transaction with an affiliate.
B. !he sale of securities or other assets to an affiliate, including assets subKect to an agreement to re#urchase.
1. !he #ayment of money or the furnishing of ser(ices to an affiliate under contract, lease, or otherwise.
D. 0ny transaction in which an affiliate acts as an agent or broker or recei(es a fee for its ser(ices to the bank or to any
other #erson.
B. 0ny transaction or series of transactions with a third #arty--
i. if an affiliate has a financial interest in the third #arty, or
ii. if an affiliate is a #artici#ant in such transaction or series of transactions.
.. 4or the #ur#ose of this subsection, any transaction by a member bank or its subsidiary with any #erson shall be deemed to be
a transaction with an affiliate of such bank if any of the #roceeds of the transaction are used for the benefit of, or transferred to,
such affiliate.
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Prohibited !ransactions
(b"
,. 0 member bank or its subsidiary--
0. shall not #urchase as fiduciary any securities or other assets from any affiliate unless such #urchase is #ermitted--
i. under the instrument creating the fiduciary relationshi#,
ii. by court order, or
iii. by law of the Kurisdiction go(erning the fiduciary relationshi#5 and
B. whether acting as #rinci#al or fiduciary, shall not knowingly #urchase or otherwise acDuire, during the e3istence of any
underwriting or selling syndicate, any security if a #rinci#al underwriter of that security is an affiliate of such bank.
6. $ub#aragra#h (B) of #aragra#h (,) shall not a##ly if the #urchase or acDuisition of such securities has been a##ro(ed, before
such securities are initially offered for sale to the #ublic, by a maKority of the directors of the bank based on a determination
that the #urchase is a sound in(estment for the bank irres#ecti(e of the fact that an affiliate of the bank is a #rinci#al
underwriter of the securities.
.. 4or the #ur#ose of this subsection--
0. the term HsecurityH has the meaning gi(en to such term in section .(a)(,<) of the $ecurities B3change 0ct of ,-.+5
and
B. the term H#rinci#al underwriterH means any underwriter who, in connection with a #rimary distribution of securities--
i. is in #ri(ity of contract with the issuer or an affiliated #erson of the issuer5
ii. acting alone or in concert with one or more other #ersons, initiates or directs the formation of an underwriting
syndicate5 or
iii. is allowed a rate of gross commission, s#read, or other #rofit greater than the rate allowed another
underwriter #artici#ating in the distribution.
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0d(ertising "estriction
(+" 0 member bank or any subsidiary or affiliate of a member bank shall not #ublish any ad(ertisement or enter into any agreement
stating or suggesting that the bank shall in any way be res#onsible for the obligations of its affiliates.
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Definitions
(#" 4or the #ur#ose of this section--
,. the term HaffiliateH has the meaning gi(en to such term in section 6.0 (but does not include any com#any described in section
(b)(6) of such section or any bank)5
6. the terms HbankH, HsubsidiaryH, H#ersonH, and HsecurityH (other than security as used in subsection (b)) ha(e the meanings gi(en
to such terms in section 6.05 and
.. the term Hco(ered transactionH has the meaning gi(en to such term in section 6.0 (but does not include any transaction which
is e3em#t from such definition under subsection (d) of such section).
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"egulations
(e" !he Board may #rescribe regulations to administer and carry out the #ur#oses of this section, including--
,. regulations to further define terms used in this section5 and
6. regulations to--
0. e3em#t transactions or relationshi#s from the reDuirements of this section5 and
B. e3clude any subsidiary of a bank holding com#any from the definition of affiliate for #ur#oses of this section,
if the Board finds such e3em#tions or e3clusions are in the #ublic interest and are consistent with the #ur#oses of this section.
M,6 '$1 .:,c-,. 0s added by act of 0ug. ,<, ,-9: (,<, $tat. >/+) and amended by act of =o(. ,6, ,--- (,,. $tat. ,+9<)N.
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%ection 18!. Investment in )ank 2remises or %tock of (orporation :olding 2remises
(a" Con#itions of in4estment. =o national bank or $tate member bank shall in(est in bank #remises, or in the stock, bonds,
debentures, or other such obligations of any cor#oration holding the #remises of such bank, or make loans to or u#on the security of
any such cor#oration--
,. unless the bank recei(es the #rior a##ro(al of the 1om#troller of the 1urrency (with res#ect to a national bank) or the Board
(with res#ect to a $tate member bank)5
6. unless the aggregate of all such in(estments and loans, together with the amount of any indebtedness incurred by any such
cor#oration that is an affiliate of the bank, is less than or eDual to the amount of the ca#ital stock of such bank5 or
.. unless--
0. the aggregate of all such in(estments and loans, together with the amount of any indebtedness incurred by any such
cor#oration that is an affiliate of the bank, is less than or eDual to ,>< #ercent of the ca#ital and sur#lus of the bank5
and
B. the bank--
i. has a 10*BL com#osite rating of , or 6 under the 'niform 4inancial 8nstitutions "ating $ystem (or an
eDui(alent rating under a com#arable rating system) as of the most recent e3amination of such bank5
ii. is well ca#itali2ed and will continue to be well ca#itali2ed after the in(estment or loan5 and
iii. #ro(ides notification to the 1om#troller of the 1urrency (with res#ect to a national bank) or to the Board (with
res#ect to a $tate member bank) not later than .< days after making the in(estment or loan.
(b" <efinitions. For purposes of this se+tion00
,. the term HaffiliateH has the same meaning as in section 6 of the Banking 0ct of ,-..5 andthe term Hwell ca#itali2edH has the
same meaning as in section .9(b) of the 4ederal De#osit 8nsurance 0ct.
M,6 '$1 .:,d. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,9.)5 amended by acts of ;une .<, ,->+ (/9 $tat. .>9) and $e#t. .<, ,--/ (,,< $tat. .<<--+<>).N
%ection 1K. #oreign )ranches
,. 1a#ital and $ur#lus "eDuired to B3ercise Powers
0ny national banking association #ossessing a ca#ital and sur#lus of G,,<<<,<<< or more may file a##lication with the Board of
@o(ernors of the 4ederal "eser(e $ystem for #ermission to e3ercise, u#on such conditions and under such regulations as may be
#rescribed by the said board, the following #owers7
M,6 '$1 /<,. 0s amended by act of $e#t. :, ,-,/ (.- $tat. :>>), which com#letely re(ised this section, and by act of ;uly ,, ,-// (9< $tat. 6+,).N
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6. Bstablishment of 4oreign Branches
4irst. !o establish branches in foreign countries or de#endencies or insular #ossessions of the 'nited $tates for the furtherance of the
foreign commerce of the 'nited $tates, and to act if reDuired to do so as fiscal agents of the 'nited $tates.
M,6 '$1 /<,. 0s amended by act of $e#t. :, ,-,/ (.- $tat. :>>), which com#letely re(ised this section.N
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.. Purchase of $tock in 1or#orations Bngaged in 4oreign Banking
$econd. !o in(est an amount not e3ceeding in the aggregate ten #er centum of its #aid-in ca#ital stock and sur#lus in the stock of one
or more banks or cor#orations chartered or incor#orated under the laws of the 'nited $tates or of any $tate thereof, and #rinci#ally
engaged in international or foreign banking, or banking in a de#endency or insular #ossession of the 'nited $tates either directly or
through the agency, ownershi#, or control of local institutions in foreign countries, or in such de#endencies or insular #ossessions.
M,6 '$1 /<,. 0s added by act of $e#t. :, ,-,/ (.- $tat. :>>), which com#letely re(ised this section.N
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+. 0cDuisition of Fwnershi# of 4oreign Banks
!hird. !o acDuire and hold, directly or indirectly, stock or other e(idences of ownershi# in one or more banks organi2ed under the law of
a foreign country or a de#endency or insular #ossession of the 'nited $tates and not engaged, directly or indirectly, in any acti(ity in
the 'nited $tates e3ce#t as, in the Kudgment of the Board of @o(ernors of the 4ederal "eser(e $ystem, shall be incidental to the
international or foreign business of such foreign bank5 and, notwithstanding the #ro(isions of section 6.0 of this 0ct, to make loans or
e3tensions of credit to or for the account of such bank in the manner and within the limits #rescribed by the Board by general or s#ecific
regulation or ruling.
M,6 '$1 /<,. 0s added by act of ;uly ,, ,-// (9< $tat. 6+,).N
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>. "ight of =ational Banks to 8n(est in 4oreign Banking 1or#orations until ;anuary ,, ,-6,
'ntil ;anuary ,, ,-6,, any national banking association, without regard to the amount of its ca#ital and sur#lus, may file a##lication with
the Board of @o(ernors of the 4ederal "eser(e $ystem for #ermission, u#on such conditions and under such regulations as may be
#rescribed by said board, to in(est an amount not e3ceeding in the aggregate > #er centum of its #aid-in ca#ital and sur#lus in the
stock of one or more cor#orations chartered or incor#orated under the laws of the 'nited $tates or of any $tate thereof and, regardless
of its location, #rinci#ally engaged in such #hases of international or foreign financial o#erations as may be necessary to facilitate the
e3#ort of goods, wares, or merchandise from the 'nited $tates or any of its de#endencies or insular #ossessions to any foreign
country7 Pro(ided, howe(er, !hat in no e(ent shall the total in(estments authori2ed by this section by any one national bank e3ceed ,<
#er centum of its ca#ital and sur#lus.
M,6 '$1 /<,. 0s added by act of $e#t. ,:, ,-,- (+, $tat. 69>). !his #aragra#h, by its terms, is now obsolete.N
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/. 0##lication for Permission to B3ercise Powers
$uch a##lication shall s#ecify the name and ca#ital of the banking association filing it, the #owers a##lied for, and the #lace or #laces
where the banking or financial o#erations #ro#osed are to be carried on. !he Board of @o(ernors of the 4ederal "eser(e $ystem shall
ha(e #ower to a##ro(e or to reKect such a##lication in whole or in #art if for any reason the granting of such a##lication is deemed
ine3#edient, and shall also ha(e #ower from time to time to increase or decrease the number of #laces where such banking o#erations
may be carried on.
M,6 '$1 /<,. 0s amended by act of $e#t. :, ,-,/ (.- $tat. :>>), which com#letely re(ised this section5 and by act of $e#t. ,:, ,-,- (+, $tat. 69/).N
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:. B3aminations and "e#orts of 1ondition
B(ery national banking association o#erating foreign branches shall be reDuired to furnish information concerning the conditions of
such branches to the 1om#troller of the 1urrency u#on demand, and e(ery member bank in(esting in the ca#ital stock of banks or
cor#orations described abo(e shall be reDuired to furnish information concerning the condition of such banks or cor#orations to the
Board of @o(ernors of the 4ederal "eser(e $ystem u#on demand, and the Board of @o(ernors of the 4ederal "eser(e $ystem may
order s#ecial e3aminations of the said branches, banks, or cor#orations at such time or times as it may deem best.
M,6 '$1 /<6. 0s amended by act of $e#t. :, ,-,/ (.- $tat. :>>), which com#letely re(ised this section5 and by act of $e#t. ,:, ,-,- (+, $tat. 69/).N
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9. 0greement to "estrict F#erations
Before any national bank shall be #ermitted to #urchase stock in any such cor#oration the said cor#oration shall enter into an
agreement or undertaking with the Board of @o(ernors of the 4ederal "eser(e $ystem to restrict its o#erations or conduct its business
in such manner or under such limitations and restrictions as the said board may #rescribe for the #lace or #laces wherein such
business is to be conducted. 8f at any time the Board of @o(ernors of the 4ederal "eser(e $ystem shall ascertain that the regulations
#rescribed by it are not being com#lied with, said board is hereby authori2ed and em#owered to institute an in(estigation of the matter
and to send for #ersons and #a#ers, sub#oena witnesses, and administer oaths in order to satisfy itself as to the actual nature of the
transactions referred to. $hould such in(estigation result in establishing the failure of the cor#oration in Duestion, or of the national bank
or banks which may be stockholders therein, to com#ly with the regulations laid down by the said Board of @o(ernors of the 4ederal
"eser(e $ystem, such national banks may be reDuired to dis#ose of stock holdings in the said cor#oration u#on reasonable notice.
M,6 '$1 /<.. 0dded by act of $e#t. :, ,-,/ (.- $tat. :>>), which com#letely re(ised this section.N
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-. 0ccounts of 4oreign Branches
B(ery national banking association o#erating foreign branches shall conduct the accounts of each foreign branch inde#endently of the
accounts of other foreign branches established by it and of its home office, and shall at the end of each fiscal #eriod transfer to its
general ledger the #rofit or loss accrued at each branch as a se#arate item.
M,6 '$1 /<+a. 0s added by act of 0ug. ,>, ,-/6 (:/ $tat. .99).N
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%ection 1K!. )anking (orporations !uthori'ed to Co #oreign )anking )usinessM
,. Frgani2ation
1or#orations to be organi2ed for the #ur#ose of engaging in international or foreign banking or other international or foreign financial
o#erations, or in banking or other financial o#erations in a de#endency or insular #ossession of the 'nited $tates, either directly or
through the agency, ownershi#, or control of local institutions in foreign countries, or in such de#endencies or insular #ossessions as
#ro(ided by this section, and to act when reDuired by the $ecretary of the !reasury as fiscal agents of the 'nited $tates, may be
formed by any number of natural #ersons, not less in any case than fi(e7 #ro,ie, !hat nothing in this section shall be construed to
deny the right of the $ecretary of the !reasury to use any cor#oration organi2ed under this section as de#ositaries in Panama and the
Panama 1anal Rone, or in the Phili##ine 8slands and other insular #ossessions and de#endencies of the 'nited $tates.
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6. Pur#ose
!he congress hereby declares that it is the #ur#ose of this section to #ro(ide for the establishment of international banking and
financial cor#orations o#erating under 4ederal su#er(ision with #owers sufficiently broad to enable them to com#ete effecti(ely with
similar foreign-owned institutions in the 'nited $tates and abroad5 to afford to the 'nited $tates e3#orter and im#orter in #articular, and
to 'nited $tates commerce, industry, and agriculture in general, at all times a means of financing international trade, es#ecially 'nited
$tates e3#orts5 to foster the #artici#ation by regional and smaller banks throughout the 'nited $tates in the #ro(ision of international
banking and financing ser(ices to all segments of 'nited $tates agriculture, commerce, and industry, and, in #articular small business
and farming concerns5 to stimulate com#etition in the #ro(ision of international banking and financing ser(ices, throughout the 'nited
$tates5 and, in conKunction with each of the #receding #ur#oses, to facilitate and stimulate the e3#ort of 'nited $tates goods, wares,
merchandise, commodities, and ser(ices to achie(e a sound 'nited $tates international trade #osition. !he Board of @o(ernors of the
4ederal "eser(e $ystem shall issue rules and regulations under this section consistent with and in furtherance of the #ur#oses
described in the #receding sentence, and, in accordance therewith, shall re(iew and re(ise any such rules and regulations at least once
e(ery fi(e years, the first such #eriod commencing with the effecti(e date of rules and regulations issued #ursuant to section .(a) of the
8nternational Banking 0ct of ,-:9, in order to ensure that such #ur#oses are being ser(ed in light of #re(ailing economic conditions and
banking #ractices.
M,6 '$1 /,,. 0s added by act of Dec. 6+, ,-,- (+, $tat. .:9)5 and amended by act of 4eb. 6:, ,-6, (+, $tat. ,,+>) and $e#t. ,:, ,-:9 (-6 $tat. /<-).
Presidential Proclamation =o. 6/-> of ;uly +, ,-+/ (/< $tat. ,.>65 ,6 '$1 ,.-+ note) recogni2es the inde#endence of the Phili##ine 8slands. !herefore, the
words Hin the Phili##ine 8slands andH ha(e been omitted from the '.$. 1ode.N
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.. 0rticles of 0ssociation
$uch #ersons shall enter into articles of association which shall s#ecify in general terms the obKects for which the association is formed
and may contain any other #ro(isions not inconsistent with law which the association may see fit to ado#t for the regulation of its
business and the conduct of its affairs.
M,6 '$1 /,6. 0s added by act of Dec. 6+, ,-,- (+, $tat. .:9).N
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+. B3ecution of 0rticles of 0ssociation5 1ontents of Frgani2ation 1ertificate
$uch articles of association shall be signed by all of the #ersons intending to #artici#ate in the organi2ation of the cor#oration and,
thereafter, shall be forwarded to the Board of @o(ernors of the 4ederal "eser(e $ystem and shall be filed and #reser(ed in its office.
!he #ersons signing the said articles of association shall, under their hands, make an organi2ation certificate which shall s#ecifically
state7
First. !he name assumed by such cor#oration, which shall be subKect to the a##ro(al of the Board of @o(ernors of the 4ederal
"eser(e $ystem.
.e+on#. !he #lace or #laces where its o#erations are to be carried on.
$hir#. !he #lace in the 'nited $tates where its home office is to be located.
Fourth. !he amount of its ca#ital stock and the number of shares into which the same shall be di(ided.
Fifth. !he names and #laces of business or residence of the #ersons e3ecuting the certificate and the number of shares to which each
has subscribed.
.ixth. !he fact that the certificate is made to enable the #ersons subscribing the same, and all other #ersons, firms, com#anies, and
cor#orations, who or which may thereafter subscribe to or #urchase shares of the ca#ital stock of such cor#oration, to a(ail themsel(es
of the ad(antages of this section.
M,6 '$1 /,.. 0s added by act of Dec. 6+, ,-,- (+, $tat. .:-).N
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>. 4iling Frgani2ation 1ertificate5 8ssuance of Permit
!he #ersons signing the organi2ation certificate shall duly acknowledge the e3ecution thereof before a Kudge of some court of record or
notary #ublic, who shall certify thereto under the seal of such court or notary, and thereafter the certificate shall be forwarded to the
Board of @o(ernors of the 4ederal "eser(e $ystem to be filed and #reser(ed in its office. '#on duly making and filing articles of
association and an organi2ation certificate, and after the Board of @o(ernors of the 4ederal "eser(e $ystem has a##ro(ed the same
and issued a #ermit to begin business, the association shall become and be a body cor#orate, and as such and in the name
designated therein shall ha(e #ower to ado#t and use a cor#orate seal, which may be changed at the #leasure of its board of directors5
to ha(e succession for a #eriod of twenty years unless sooner dissol(ed by the act of the shareholders owning two-thirds of the stock or
by an 0ct of 1ongress or unless its franchises become forfeited by some (iolation of law5 to make contracts5 to sue and be sued,
com#lain, and defend in any court of law or eDuity5 to elect or a##oint directors5 and, by its board of directors, to a##oint such officers
and em#loyees as may be deemed #ro#er, define their authority and duties, reDuire bonds of them, and fi3 the #enalty thereof, dismiss
such officers or em#loyees, or any thereof, at #leasure and a##oint others to fill their #laces5 to #rescribe, by its board of directors, by-
laws not inconsistent with law or with the regulations of the Board of @o(ernors of the 4ederal "eser(e $ystem regulating the manner
in which its stock shall be transferred, its directors elected or a##ointed, its officers and em#loyees a##ointed, its #ro#erty transferred,
and the #ri(ileges granted to it by law e3ercised and enKoyed.
M,6 '$1 /,+. 0s added by act of Dec. 6+, ,-,- (+, $tat. .:-) and $e#t. ,:, ,-:9 (-6 $tat. /<-).N
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/. Powers5 "egulations of Board of @o(ernors of the 4ederal "eser(e $ystem
Bach cor#oration so organi2ed shall ha(e #ower, under such rules and regulations as the Board of @o(ernors of the 4ederal "eser(e
$ystem may #rescribe7
M,6 '$1 /,>. 0s added by act of Dec. 6+, ,-,- (+, $tat. .:-) and amended by act of $e#t. ,:, ,-:9 (-6 $tat. /<-).N
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Banking Powers
(a" !o #urchase, sell, discount, and negotiate, with or without its indorsement or guaranty, notes, drafts, checks, bills of e3change,
acce#tances, including bankersI acce#tances, cable transfers, and other e(idences of indebtedness5 to #urchase and sell, with or
without its indorsement or guaranty, securities, including the obligations of the 'nited $tates or of any $tate thereof but not including
shares of stock in any cor#oration e3ce#t as herein #ro(ided5 to acce#t bills or drafts drawn u#on it subKect to such limitations and
restrictions as the Board of @o(ernors of the 4ederal "eser(e $ystem may im#ose5 to issue letters of credit5 to #urchase and sell coin,
bullion, and e3change5 to borrow and to lend money5 to issue debentures, bonds, and #romissory notes under such general conditions
as to security and such limitations as the Board of @o(ernors of the 4ederal "eser(e $ystem may #rescribe5 to recei(e de#osits
outside of the 'nited $tates and to recei(e only such de#osits within the 'nited $tates as may be incidental to or for the #ur#ose of
carrying out transactions in foreign countries or de#endencies or insular #ossessions of the 'nited $tates5 and generally to e3ercise
such #owers as are incidental to the #owers conferred by this 0ct or as may be usual, in the determination of the Board of @o(ernors of
the 4ederal "eser(e $ystem, in connection with the transaction of the business of banking or other financial o#erations in the countries,
colonies, de#endencies, or #ossessions in which it shall transact business and not inconsistent with the #owers s#ecifically granted
herein. =othing contained in this section shall be construed to #rohibit the Board of @o(ernors of the 4ederal "eser(e $ystem, under
its #ower to #rescribe rules and regulations, from limiting the aggregate amount of liabilities of any or all classes incurred by the
cor#oration and outstanding at any one time. Whene(er a cor#oration organi2ed under this section recei(es de#osits in the 'nited
$tates authori2ed by this section it shall carry reser(es in such amounts as the Board of @o(ernors of the 4ederal "eser(e $ystem
may #rescribe for member banks of the 4ederal "eser(e $ystem.
M,6 '$1 /,>(a). 0s added by act of Dec. 6+, ,-,- (+, $tat. .:-)5 and amended by act of $e#t. ,:, ,-:9 (-6 $tat. /<-).N
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Branches
(b" !o establish and maintain for the transaction of its business branches or agencies in foreign countries, their de#endencies or
colonies, and in the de#endencies or insular #ossessions of the 'nited $tates, at such #laces as may be a##ro(ed by the Board of
@o(ernors of the 4ederal "eser(e $ystem and under such rules and regulations as it may #rescribe, including countries or
de#endencies not s#ecified in the original organi2ation certificate.
M,6 '$1 /,>(b). 0s added by act of Dec. 6+, ,-,- (+, $tat. .:-).N
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Fwnershi# of $tock in Fther 1or#orations
(+" With the consent of the Board of @o(ernors of the 4ederal "eser(e $ystem to #urchase and hold stock or other certificates of
ownershi# in any other cor#oration organi2ed under the #ro(isions of this section, or under the laws of any foreign country or a colony
or de#endency thereof, or under the laws of any $tate, de#endency, or insular #ossession of the 'nited $tates but not engaged in the
general business of buying or selling goods, wares, merchandise or commodities in the 'nited $tates, and not transacting any
business in the 'nited $tates e3ce#t such as in the Kudgment of the Board of @o(ernors of the 4ederal "eser(e $ystem may be
incidental to its international or foreign business7 #ro,ie) howe,er) !hat, e3ce#t with the a##ro(al of the Board of @o(ernors of the
4ederal "eser(e $ystem, no cor#oration organi2ed hereunder shall in(est in any one cor#oration an amount in e3cess of ,< #er
centum of its own ca#ital and sur#lus, e3ce#t in a cor#oration engaged in the business of banking, when ,> #er centum of its ca#ital
and sur#lus may be so in(ested7 Pro(ided further, !hat no cor#oration organi2ed hereunder shall #urchase, own, or hold stock or
certificates of ownershi# in any other cor#oration organi2ed hereunder or under the laws of any $tate which is in substantial
com#etition therewith, or which holds stock or certificates of ownershi# in cor#orations which are in substantial com#etition with the
#urchasing cor#oration.
M,6 '$1 /,>(c). 0s added by act of Dec. 6+, ,-,- (+, $tat. .9<).N
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:. Purchase of $tock to Pre(ent Loss on Debt Pre(iously 1ontracted
=othing contained herein shall #re(ent cor#orations organi2ed hereunder from #urchasing and holding stock in any cor#oration where
such #urchase shall be necessary to #re(ent a loss u#on a debt #re(iously contracted in good faith5 and stock so #urchased or
acDuired in cor#orations organi2ed under this section shall within si3 months from such #urchase be sold or dis#osed of at #ublic or
#ri(ate sale unless the time to so dis#ose of same is e3tended by the Board of @o(ernors of the 4ederal "eser(e $ystem.
M,6 '$1 /,>(c). 0s added by act of Dec. 6+, ,-,- (+, $tat. .9<).N
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9. "estrictions on Business in 'nited $tates
=o cor#oration organi2ed under this section shall carry on any #art of its business in the 'nited $tates e3ce#t such as, in the Kudgment
of the Board of @o(ernors of the 4ederal "eser(e $ystem, shall be incidental to its international or foreign business7 An pro,ie
further, !hat e3ce#t such as is incidental and #reliminary to its organi2ation no such cor#oration shall e3ercise any of the #owers
conferred by this section until it has been duly authori2ed by the Board of @o(ernors of the 4ederal "eser(e $ystem to commence
business as a cor#oration organi2ed under the #ro(isions of this section.
M,6 '$1 /,/. 0s added by act of Dec. 6+, ,-,- (+, $tat. .9,).N
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-. 1or#oration !rading in 1ommodities or 0ttem#ting to 1ontrol Prices
=o cor#oration organi2ed under this section shall engage in commerce or trade in commodities e3ce#t as s#ecifically #ro(ided in this
section, nor shall it either directly or indirectly control or fi3 or attem#t to control or fi3 the #rice of an such commodities. !he charter of
any cor#oration (iolating this #ro(ision shall be subKect to forfeiture in the manner hereinafter #ro(ided in this section. 8t shall be
unlawful for any director, officer, agent, or em#loyee of any such cor#oration to use or to cons#ire to use the credit5 the funds, or the
#ower of the cor#oration to fi3 or control the #rice of any such commodities, and any such #erson (iolating this #ro(ision shall be liable
to a fine of not less than G,,<<< and not e3ceeding G>,<<< or im#risonment not less than one year and not e3ceeding fi(e years, or
both, in the discretion of the court.
M,6 '$1 /,:. 0s added by act of Dec. 6+, ,-,- (+, $tat. 9,).N
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,<. 1a#ital $tock
=o cor#oration shall be organi2ed under the #ro(isions of this section with a ca#ital stock of less than G6,<<<,<<<, one-Duarter of which
must be #aid in before the cor#oration may be authori2ed to begin business, and the remainder of the ca#ital stock of such cor#oration
shall be #aid in installments of at least ,< #er centum on the whole amount to which the cor#oration shall be limited as freDuently as
one installment at the end of each succeeding two months from the time of the commencement of its business o#erations until the
whole of the ca#ital stock shall be #aid in7 #ro,ie) howe,er) !hat whene(er G6,<<<,<<< of the ca#ital stock of any cor#oration is #aid
in the remainder of the cor#orationIs ca#ital stock or any un#aid #art of such remainder may, with the consent of the Board of
@o(ernors of the 4ederal "eser(e $ystem and subKect to such regulations and conditions as it may #rescribe, be #aid in u#on call from
the board of directors5 such un#aid subscri#tions, howe(er, to be included in the ma3imum of ,< #er centum of the national bankIs
ca#ital and sur#lus which a national bank is #ermitted under the #ro(isions of this 0ct to hold in stock of cor#orations engaged in
business of the kind described in this section and in section 6> of the 4ederal "eser(e 0ct as amended. !he ca#ital stock of any such
cor#oration may be increased at any time, with the a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem, by a (ote of
two-thirds of its shareholders or by unanimous consent in writing of the shareholders without a meeting and without a formal (ote, but
any such increase of ca#ital shall be fully #aid in within ninety days after such a##ro(al5 and may be reduced in like manner, #ro(ided
that in no e(ent shall it be less than G6,<<<,<<<. =o cor#oration, e3ce#t as herein #ro(ided, shall during the time it shall continue its
o#erations, withdraw or #ermit to be withdrawn, either in the form of di(idends or otherwise, any #ortion of its ca#ital. 0ny national bank
may in(est in the stock of any cor#oration organi2ed under this section. !he aggregate amount of stock held by any national bank in all
cor#orations engaged in business of the kind described in this section or section 6> shall not e3ceed an amount eDual to ,< #ercent of
the ca#ital and sur#lus of such bank unless the Board determines that the in(estment of an additional amount by the bank would not be
unsafe or unsound and, in any case, shall not e3ceed an amount eDual to 6< #ercent of the ca#ital and sur#lus of such bank.
M,6 '$1 /,9. 0s added by act of Dec. 6+, ,-,- (+, $tat. .9,)5 and amended by acts of ;une ,+, ,-6, (+6 $tat. 69) and $e#t. .<, ,--/ (,,< $tat. .<<--+6/).N
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,,. 1iti2enshi# of $tockholders
B3ce#t as otherwise #ro(ided in this section, a maKority of the shares of the ca#ital stock of any such cor#oration shall at all times be
held and owned by citi2ens of the 'nited $tates, by cor#orations the controlling interest in which is owned by citi2ens of the 'nited
$tates, chartered under the laws of the 'nited $tates or of a $tate of the 'nited $tates, or by firms or com#anies, the controlling
interest in which is owned by citi2ens of the 'nited $tates. =otwithstanding any other #ro(isions of this section, one or more foreign
banks, institutions organi2ed under the laws of foreign countries which own or control foreign banks, or banks organi2ed under the laws
of the 'nited $tates, the $tates of the 'nited $tates, or the District of 1olumbia, the controlling interests in which are owned by any
such foreign banks or institutions, may, with the #rior a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem and u#on
such terms and conditions and subKect to such rules and regulations as the Board of @o(ernors of the 4ederal "eser(e $ystem may
#rescribe, own and hold >< #er centum or more of the shares of the ca#ital stock of any cor#oration organi2ed under this section, and
any such cor#oration shall be subKect to the same #ro(isions of law as any other cor#oration organi2ed under this section, and the
terms HcontrolsH and Hcontrolling interestH shall be construed consistently with the definition of HcontrolH in section 6 of the Bank olding
1om#any 0ct of ,->/. 4or the #ur#oses of the #receding sentence of this #aragra#h the term Hforeign bankH shall ha(e the meaning
assigned to it in the 8nternational Banking 0ct of ,-:9. 0ny com#any, other than a bank as defined in section 6 of the Bank olding
1om#any 0ct of ,->/, that after *arch >, ,-9:, directly or indirectly acDuires control of a cor#oration organi2ed or o#erating under the
#ro(isions of this section or section 6> shall be subKect to the #ro(isions of the Bank olding 1om#any 0ct of ,->/ in the same manner
and to the same e3tent that bank holding com#anies are subKect thereto, e3ce#t that such com#any shall not by reason of this
#aragra#h be deemed a bank holding com#any for the #ur#ose of section . of the Bank olding 1om#any 0ct of ,->/.
M,6 '$1 /,-. 0s added by act of Dec. 6+, ,-,- (+, $tat. .:9) and amended by acts of 0ug. 6., ,-.> (+- $tat. :,:)5 $e#t. ,:, ,-:9 (-6 $tat. /<-)5 and 0ug. ,<,
,-9: (,<, $tat. >//).N
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,6. *embers of Board of @o(ernors of the 4ederal "eser(e $ystem as Directors, Ffficers or $tockholders
=o member of the Board of @o(ernors of the 4ederal "eser(e $ystem shall be an officer or director of any cor#oration organi2ed under
the #ro(isions of this section, or of any cor#oration engaged in similar business organi2ed under the laws of any $tate, nor hold stock in
any such cor#oration, and before entering u#on his duties as a member of the Board of @o(ernors of the 4ederal "eser(e $ystem he
shall certify under oath to the $ecretary of the !reasury that he has com#lied with this reDuirement.
M,6 '$1 /6<. 0s added by act of Dec. 6+, ,-,- (+, $tat. .96).N
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,.. $hareholdersI Liability5 1or#oration =ot to Become *ember of 4ederal "eser(e Bank
$hareholders in any cor#oration organi2ed under the #ro(ision of this section shall be liable for the amount of their un#aid stock
subscri#tions. =o such cor#oration shall become a member of any 4ederal reser(e bank.
M,6 '$1 /6,. 0s added by act of Dec. 6+, ,-,- (+, $tat. .96).N
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,+. 4orfeiture of 1harter for Aiolation of Law
$hould any cor#oration organi2ed hereunder (iolate or fail to com#ly with any of the #ro(isions of this section, all of its rights, #ri(ileges,
and franchises deri(ed herefrom may thereby be forfeited. Before any such cor#oration shall be declared dissol(ed, or its rights,
#ri(ileges, and franchises forfeited, any noncom#liance with, or (iolation of such laws shall, howe(er, be determined and adKudged by a
court of the 'nited $tates of com#etent Kurisdiction, in a suit brought for that #ur#ose in the district or territory in which the home office
of such cor#oration is located, which suit shall be brought by the 'nited $tates at the insistence of the Board of @o(ernors for the
4ederal "eser(e $ystem or the 0ttorney @eneral. '#on adKudication of such noncom#liance or (iolation, each director and officer who
#artici#ated in, or assented to, the illegal act or acts, shall be liable in his #ersonal or indi(idual ca#acity for all damages which the said
cor#oration shall ha(e sustained in conseDuence thereof. =o dissolution shall take away or im#air any remedy against the cor#oration,
its stockholders, or officers for any liability or #enalty #re(iously incurred.
M,6 '$1 /66. 0s added by act of Dec. 6+, ,-,- (+, $tat. .96).N
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,>. Aoluntary LiDuidation
0ny such cor#oration may go into (oluntary liDuidation and be closed by a (ote of its shareholders owning two-thirds of its stock.
M,6 '$1 /6.. 0s added by act of Dec. 6+, ,-,- (+, $tat. .96.)N
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,/. 0##ointment of "ecei(er or 1onser(ator
0. 8n general. !he Board may a##oint a conser(ator or recei(er for a cor#oration organi2ed under the #ro(isions of this section to
the same e3tent and in the same manner as the 1om#troller of the 1urrency may a##oint a conser(ator or recei(er for a
national bank, and the conser(ator or recei(er for such cor#oration shall e3ercise the same #owers, functions, and duties,
subKect to the same limitations, as a conser(ator or recei(er for a national bank.
B. BDui(alent authority. !he Board shall ha(e the same authority with res#ect to any conser(ator or recei(er a##ointed for a
cor#oration organi2ed under the #ro(isions of this section under this #aragra#h and any such cor#oration as the 1om#troller of
the 1urrency has with res#ect to a conser(ator or recei(er of a national bank and the national bank for which a conser(ator or
recei(er has been a##ointed.
1. !itle ,, #etitions. !he Board may direct the conser(ator or recei(er of a cor#oration organi2ed under the #ro(isions of this
section to file a #etition #ursuant to title ,,, 'nited $tates 1ode, in which case, title ,,, 'nited $tates 1ode, shall a##ly to the
cor#oration in lieu of otherwise a##licable 4ederal or $tate insol(ency law.
M,6 '$1 /6+. 0s added by act of Dec. 6+, ,-,- (+, $tat. .96) and amended by act of Dec. ,6, 6<<< (,,+ $tat. 6:/.0-.-/).N
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,:. $tockholdersI *eetings5 "ecords5 "e#orts5 B3aminations
B(ery cor#oration organi2ed under the #ro(isions of this section shall hold a meeting of its stockholders annually u#on a date fi3ed in
its bylaws, such meeting to be held at its home office in the 'nited $tates. B(ery such cor#oration shall kee# at its home office books
containing the names of all stockholders thereof, and the names and addresses of the members of its board of directors, together with
co#ies of all re#orts made by it to the Board of @o(ernors of the 4ederal "eser(e $ystem. B(ery such cor#oration shall make re#orts to
the Board of @o(ernors of the 4ederal "eser(e $ystem at such times and in such form as it may reDuire5 and shall be subKect to
e3amination once a year and at such other times as may be deemed necessary by the Board of @o(ernors of the 4ederal "eser(e
$ystem by e3aminers a##ointed by the Board of @o(ernors of the 4ederal "eser(e $ystem, the cost of such e3aminations, including
the com#ensation of the e3aminers, to be fi3ed by the Board of @o(ernors of the 4ederal "eser(e $ystem and to be #aid by the
cor#oration e3amined.
M,6 '$1 /6>. 0s added by act of Dec. 6+, ,-,- (+, $tat. .96).N
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,9. Di(idends and $ur#lus 4und
!he directors of any cor#oration organi2ed under the #ro(isions of this section may, semiannually, declare a di(idend of so much of the
net #rofits of the cor#oration as they shall Kudge e3#edient5 but each cor#oration shall, before the declaration of a di(idend, carry one-
tenth of its net #rofits of the #receding half year to its sur#lus fund until the same shall amount to 6< #er centum of its ca#ital stock.
M,6 '$1 /6/. 0s added by act of Dec. 6+, ,-,- (+, $tat. .9.).N
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,-. !a3ation
0ny cor#oration organi2ed under the #ro(isions of this section shall be subKect to ta3 by the $tate within which its home office is located
in the same manner and to the same e3tent as other cor#orations organi2ed under the laws of that $tate which are transacting a similar
character of business. !he shares of stock in such cor#oration shall also be subKect to ta3 as the #ersonal #ro#erty of the owners or
holders thereof in the same manner and to the same e3tent as the shares of stock in similar $tate cor#orations.
M,6 '$1 /6:. 0s added by act of Dec. 6+, ,-,- (+, $tat. .9.).N
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6<. B3tension of 1or#orate B3istence
0ny cor#oration organi2ed under the #ro(isions of this section may at any time within the two years ne3t #re(ious to the date of the
e3#iration of its cor#orate e3istence, by a (ote of the shareholders owning two-thirds of its stock, a##ly to the Board of @o(ernors of the
4ederal "eser(e $ystem for its a##ro(al to e3tend the #eriod of its cor#orate e3istence for a term of not more than twenty years, and
u#on certified a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem such cor#oration shall ha(e its cor#orate e3istence
for such e3tended #eriod unless sooner dissol(ed by the act of the shareholders owning two-thirds of its stock, or by an 0ct of
1ongress or unless its franchise becomes forfeited by some (iolation of law.
M,6 '$1 /69. 0s added by act of Dec. 6+, ,-,- (+, $tat. .9.).N
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6,. 1on(ersion of $tate 1or#oration into 4ederal 1or#oration
0ny bank or banking institution, #rinci#ally engaged in foreign business, incor#orated by s#ecial law of any $tate or of the 'nited $tates
or organi2ed under the general laws of any $tate or of the 'nited $tates and ha(ing an unim#aired ca#ital sufficient to entitle it to
become a cor#oration under the #ro(isions of this section may, by the (ote of the shareholders owning not less than two-thirds of the
ca#ital stock of such bank or banking association, with the a##ro(al of the Board of @o(ernors of the 4ederal "eser(e $ystem, be
con(erted into a 4ederal cor#oration of the kind authori2ed by this section with any name a##ro(ed by the Board of @o(ernors of the
4ederal "eser(e $ystem7 #ro,ie) howe,er) !hat said con(ersion shall not be in contra(ention of the $tate law. 8n such case the
articles of association and organi2ation certificate may be e3ecuted by a maKority of the directors of the bank or banking institution, and
the certificate shall declare that the owners of at least two thirds of the ca#ital stock ha(e authori2ed the directors to make such
certificate and to change or con(ert the bank or banking institution into a 4ederal cor#oration. 0 maKority of the directors, after e3ecuting
the articles of association and the organi2ation certificate, shall ha(e #ower to e3ecute all other #a#ers and to do whate(er may be
reDuired to make its organi2ation #erfect and com#lete as a 4ederal cor#oration. !he shares of any such cor#oration may continue to
be for the same amount each as they were before the con(ersion, and the directors may continue to be directors of the cor#oration
until others are elected or a##ointed in accordance with the #ro(isions of this section. When the Board of @o(ernors of the 4ederal
"eser(e $ystem has gi(en to such cor#oration a certificate that the #ro(isions of this section ha(e been com#lied with, such
cor#oration and all its stockholders, officers, and em#loyees, shall ha(e the same #owers and #ri(ileges, and shall be subKect to the
same duties, liabilities, and regulations, in all res#ects, as shall ha(e been #rescribed by this section for cor#orations originally
organi2ed hereunder.
M,6 '$1 /6-. 0s added by act of Dec. 6+, ,-,- (+, $tat. .9.).N
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66. 1riminal Fffenses of Directors, Ffficers, and Bm#loyees
B(ery officer, director, clerk, em#loyee, or agent of any cor#oration organi2ed under this section who embe22les, abstracts, or willfully
misa##lies any of the moneys, funds, credits, securities, e(idences of indebtedness or assets of any character of such cor#oration5 or
who, without authority from the directors, issues or #uts forth any certificate of de#osit, draws any order or bill of e3change, makes any
acce#tance, assigns any note, bond, debenture, draft, bill of e3change, mortgage, Kudgment, or decree5 or who makes any false entry
in any book, re#ort, or statement of such cor#oration with intent, in either case, to inKure or defraud such cor#oration or any other
com#any, body #olitic or cor#orate, or any indi(idual #erson, or to decei(e any officer of such cor#oration, the Board of @o(ernors of
the 4ederal "eser(e $ystem, or any agent or e3aminer a##ointed to e3amine the affairs of any such cor#oration5 and e(ery recei(er of
any such cor#oration and e(ery clerk or em#loyee of such recei(er who shall embe22le, abstract, or willfully misa##ly or wrongfully
con(ert to his own use any moneys, funds, credits, or assets of any character which may come into his #ossession or under his control
in the e3ecution of his trust or the #erformance of the duties of his em#loyment5 and e(ery such recei(er or clerk or em#loyee of such
recei(er who shall, with intent to inKure or defraud any #erson, body #olitic or cor#orate, or to decei(e or mislead the Board of
@o(ernors of the 4ederal "eser(e $ystem, or any agent or e3aminer a##ointed to e3amine the affairs of such recei(er, shall make any
false entry in any book, re#ort, or record of any matter connected with the duties of such recei(er5 and e(ery #erson who with like intent
aids or abets any officer, director, clerk, em#loyee, or agent of any cor#oration organi2ed under this section, or recei(er or clerk or
em#loyee of such recei(er as aforesaid in any (iolation of this section, shall u#on con(iction thereof be im#risoned for not less than two
years nor more than ten years, and may also be fined not more than G>,<<<, in the discretion of the court.
M,6 '$1 /.<. 0s added by act of Dec. 6+, ,-,- (+, $tat. .9+).N
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6.. "e#resentation that 'nited $tates 8s Liable for Fbligations
Whoe(er being connected in any ca#acity with any cor#oration organi2ed under this section re#resents in any way that the 'nited
$tates is liable for the #ayment of any bond or other obligation, or the interest thereon, issued or incurred by any cor#oration organi2ed
hereunder, or that the 'nited $tates incurs any liability in res#ect of any act or omission of the cor#oration, shall be #unished by a fine
of not more than G,<,<<< and by im#risonment for not more than fi(e years.
M,6 '$1 /.,. 0s added by act of Dec. 6+, ,-,- (+, $tat. .9+).N
L Pre(iously section 6>(a), this section was redesignated by act of Dec. ,-, ,--, (,<> $tat. 669,).
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%ection 1K). 9urisdiction of %uits M
,. $uits 0rising Fut of 4oreign Banking Business
=otwithstanding any other #ro(ision of law all suits of a ci(il nature at common law or in eDuity to which any cor#oration organi2ed
under the laws of the 'nited $tates shall be a #arty, arising out of transactions in(ol(ing international or foreign banking, or banking in a
de#endency or insular #ossession of the 'nited $tates, or out of other international or foreign financial o#erations, either directly or
through the agency, ownershi#, or control of branches or local institutions in de#endencies or insular #ossessions of the 'nited $tates
or in foreign countries, shall be deemed to arise under the laws of the 'nited $tates, and the district courts of the 'nited $tates shall
ha(e original Kurisdiction of all such suits5 and any defendant in any such suit may, at any time before the trial thereof, remo(e such
suits from a $tate court into the district court of the 'nited $tates for the #ro#er district by following the #rocedure for the remo(al of
causes otherwise #ro(ided by law. $uch remo(al shall not cause undue delay in the trial of such case and a case so remo(ed shall
ha(e a #lace on the calendar of the 'nited $tates court to which it is remo(ed relati(e to that which it held on the $tate court from
which it was remo(ed.
M,6 '$1 /.6. 0s added by act of ;une ,/, ,-.. (+9 $tat. ,9+).N
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,. $uits 0rising Fut of 4oreign Banking Business
=otwithstanding any other #ro(ision of law all suits of a ci(il nature at common law or in eDuity to which any cor#oration organi2ed
under the laws of the 'nited $tates shall be a #arty, arising out of transactions in(ol(ing international or foreign banking, or banking in a
de#endency or insular #ossession of the 'nited $tates, or out of other international or foreign financial o#erations, either directly or
through the agency, ownershi#, or control of branches or local institutions in de#endencies or insular #ossessions of the 'nited $tates
or in foreign countries, shall be deemed to arise under the laws of the 'nited $tates, and the district courts of the 'nited $tates shall
ha(e original Kurisdiction of all such suits5 and any defendant in any such suit may, at any time before the trial thereof, remo(e such
suits from a $tate court into the district court of the 'nited $tates for the #ro#er district by following the #rocedure for the remo(al of
causes otherwise #ro(ided by law. $uch remo(al shall not cause undue delay in the trial of such case and a case so remo(ed shall
ha(e a #lace on the calendar of the 'nited $tates court to which it is remo(ed relati(e to that which it held on the $tate court from
which it was remo(ed.
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6. $uits 8n(ol(ing 4ederal "eser(e Banks
=otwithstanding any other #ro(ision of law, all suits of a ci(il nature at common law or in eDuity to which any 4ederal "eser(e bank
shall be a #arty shall be deemed to arise under the laws of the 'nited $tates, and the district courts of the 'nited $tates shall ha(e
original Kurisdiction of all such suits5 and any 4ederal "eser(e bank which is a defendant in any such suit may, at any time before the
trial thereof, remo(e such suit from a $tate court into the district court of the 'nited $tates for the #ro#er district by following the
#rocedure for the remo(al of causes otherwise #ro(ided by law. =o attachment or e3ecution shall be issued against any 4ederal
"eser(e bank or its #ro#erty before final Kudgment in any suit, action, or #roceeding in any $tate, county, munici#al, or 'nited $tates
court.
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.. 4ederal "eser(e Banks "ecei(ing Pro#erty of 4oreign $tates and 1entral Banks
Whene(er (,) any 4ederal "eser(e bank has recei(ed any #ro#erty from or for the account of a foreign state which is recogni2ed by
the @o(ernment of the 'nited $tates, or from or for the account of a central bank of any such foreign state, and holds such #ro#erty in
the name of such foreign state or such central bank5 (6) a re#resentati(e of such foreign state who is recogni2ed by the $ecretary of
$tate as being the accredited re#resentati(e of such foreign state to the @o(ernment of the 'nited $tates has certified to the $ecretary
of $tate the name of a #erson as ha(ing authority to recei(e, control, or dis#ose of such #ro#erty5 and (.) the authority of such #erson
to act with res#ect to such #ro#erty is acce#ted and recogni2ed by the $ecretary of $tate, and so certified by the $ecretary of $tate to
the 4ederal "eser(e bank, the #ayment, transfer, deli(ery, or other dis#osal of such #ro#erty by such 4ederal "eser(e bank to or u#on
the order of such #erson shall be conclusi(ely #resumed to be lawful and shall constitute a com#lete discharge and release of any
liability of the 4ederal "eser(e bank for or with res#ect to such #ro#erty.
M,6 '$1 /.6. 0s added by act of 0#ril :, ,-+, (>> $tat. ,.,).N
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+. 8nsured Banks "ecei(ing Pro#erty of 4oreign $tates and 1entral Banks
Whene(er (,) any insured bank has recei(ed any #ro#erty from or for the account of a foreign state which is recogni2ed by the
@o(ernment of the 'nited $tates, or from or for the account of a central bank of any such foreign state, and holds such #ro#erty in the
name of such foreign state or such central bank5 (6) a re#resentati(e of such foreign state who is recogni2ed by the $ecretary of $tate
as being the accredited re#resentati(e of such foreign state to the @o(ernment of the 'nited $tates has certified to the $ecretary of
$tate the name of a #erson as ha(ing authority to recei(e, control, or dis#ose of such #ro#erty5 and (.) the authority of such #erson to
act with res#ect to such #ro#erty is acce#ted and recogni2ed by the $ecretary of $tate, and so certified by the $ecretary of $tate to
such insured bank, the #ayment, transfer, deli(ery, or other dis#osal of such #ro#erty by such bank to or u#on the order of such #erson
shall be conclusi(ely #resumed to be lawful and shall constitute a com#lete discharge and release of any liability of such bank for or
with res#ect to such #ro#erty. 0ny suit or other legal #roceeding against any insured bank or any officer, director, or em#loyee thereof,
arising out of the recei#t #ossession, or dis#osition of any such #ro#erty shall be deemed to arise under the laws of the 'nited $tates
and the district courts of the 'nited $tates shall ha(e e3clusi(e Kurisdiction thereof, regardless of the amount in(ol(ed5 and any such
bank or any officer, director, or em#loyee thereof which is a defendant in any such suit may, at any time before trial thereof, remo(e
such suit from a $tate court into the district court of the 'nited $tates for the #ro#er district by following the #rocedure for the remo(al
of causes otherwise #ro(ided by law.
M,6 '$1 /.6. 0s added by act of 0#ril :, ,-+, (>> $tat. ,.6).N
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>. Licenses "elating to Pro#erty of 4oreign $tates and 1entral Banks
=othing in this section shall be deemed to re#eal or to modify in any manner any of the #ro(isions of the @old "eser(e 0ct of ,-.+ (ch.
/, +9 $tat. ..:), as amended, the $il(er Purchase 0ct of ,-.+ (ch. /:+, +9 $tat. ,,:9), as amended, or subdi(ision (b) of section > of
the 0ct of Fctober /, ,-,: (+< $tat. +,,), as amended, or any actions, regulations, rules, orders, or #roclamations taken, #romulgated,
made, or issued #ursuant to any of such statutes. 8n any case in which a license to act with res#ect to any #ro#erty referred to in this
section is reDuired under any of said statutes, regulations, rules, orders, or #roclamations, notification to the $ecretary of $tate by the
#ro#er @o(ernment officer or agency of the issuance of an a##ro#riate license or that a##ro#riate licenses will be issued on a##lication
shall be a #rereDuisite to any action by the $ecretary of $tate #ursuant to this section, and the action of the $ecretary of $tate shall
relate only to such #ro#erty as is included in such notification. Bach such notification shall include the terms and conditions of such
license or licenses and a descri#tion of the #ro#erty to which they relate.
M,6 '$1 /.6. 0s added by act of 0#ril :, ,-+, (>> $tat. ,.6).N
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/. Definitions
4or the #ur#oses of this section, (,) the term H#ro#ertyH includes gold, sil(er, currency, credits, de#osits, securities, choses in action,
and any other form of #ro#erty, the #roceeds thereof, and any right, title, or interest therein7 (6) the term Hforeign stateH includes any
foreign go(ernment or any de#artment, district, #ro(ince, county, #ossession, or other similar go(ernmental organi2ation or subdi(ision
of a foreign go(ernment, and any agency or instrumentality of any such foreign go(ernment or of any such organi2ation or subdi(ision5
(.) the term Hcentral bankH includes any foreign bank or banker authori2ed to #erform any one or more of the functions of a central
bank5 (+) the term H#ersonH includes any indi(idual, or any cor#oration, #artnershi#, association, or other similar organi2ation5 and (>)
the term Hinsured bankH shall ha(e the meaning gi(en to it in section ,6B of this 0ct.
M,6 '$1 /.6. 0s added by act of 0#ril :, ,-+, (>> $tat. ,.6). $ection ,6B was withdrawn and enacted as a se#arate act by act of $e#t. 6,, ,->< (/+ $tat. 9:.)5
for definition of Hinsured bankH under that act, see ,6 '$1 ,9,.(h).N
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L Pre(iously section 6>(b), this section was redesignated by act of Dec. ,-, ,--, (,<> $tat. 669,).
%ection 1K(. 2otential 7iability on #oreign !ccounts
(a" B3ce#tions from re#ayment reDuirement. 0 member bank shall not be reDuired to re#ay any de#osit made at a foreign branch of the
bank if the branch cannot re#ay the de#osit due to--
,. an act of war, insurrection, or ci(il strife5 or
6. an action by a foreign go(ernment or instrumentality (whether de Kure or de facto) in the country in which the branch is located5
unless the member bank has e3#ressly agreed in writing to re#ay the de#osit under those circumstances.
(b" "egulations. !he Board and the 1om#troller of the 1urrency may Kointly #rescribe such regulations as they deem necessary to
im#lement this section.
M,6 '$1 /... 0s added by act of $e#t. 6., ,--+ (,<9 $tat. 666-). $ection .6/(c) of the "iegle 1ommunity De(elo#ment and "egulatory 8m#ro(ement 0ct of
,--+ (,6 '$1 /.. note) #ro(ides as follows7
(+" $ection 6>1 of the 4ederal "eser(e 0ct (as added by subsection (a)) shall not be a##lied retroacti(ely and shall not be construed to affect or a##ly to any
claim or cause of action addressed by that section arising from e(ents or circumstances that occurred before the date of enactment of this 0ct.N
%ection 1L
M$ection 6/ authori2ed the secretary of the !reasury to maintain #arity of all forms of money and to strengthen the gold reser(e by borrowing gold on security of
'nited $tates bonds or by issuing gold notes for one year. !he authority to issue the bonds was re#ealed by section ,< of the act of *arch ,9, ,-/9 (96 $tat.
>,)5 therefore, in the recodification of title ., (act of $e#t. ,., ,-96, -/ $tat. 9::), section 6/ of the 4ederal "eser(e 0ct, which had been #artly incor#orated in
., '$1 +<-, was deleted as obsolete.N
%ection 1>. Tax on Bational )ank Botes
,. =ational 1urrency 0ssociations5 0mendments to =ational Bank 0ct
!he #ro(isions of the 0ct of *ay thirtieth, nineteen hundred and eight, authori2ing national currency associations, the issue of
additional national-bank circulation, and creating a =ational *onetary 1ommission, which e3#ires by limitation under the terms of such
0ct on the thirtieth day of ;une, nineteen hundred and fourteen, are hereby e3tended to ;une thirtieth, nineteen hundred and fifteen,
and sections fifty-one hundred and fifty-three, fifty-one hundred and se(enty-two, fifty-one hundred and ninety-one, and fifty-two
hundred and fourteen of the "e(ised $tatutes of the 'nited $tates, which were amended by the 0ct of *ay thirtieth, nineteen hundred
and eight, are hereby reenacted to read as such sections read #rior to *ay thirtieth, nineteen hundred and eight, subKect to such
amendments or modifications as are #rescribed in this 0ct7 #ro,ie) howe,er) !hat section nine of the 0ct first referred to in this
section is hereby amended so as to change the ta3 rates fi3ed in said 0ct by making the #ortion a##licable thereto read as follows7
MFmitted from '.$. 1ode. Part of original 4ederal "eser(e 0ct5 not amended. $ections >,>., >,:6, >,-,, and >6,+ of the "e(ised $tatutes, referred to in this
#aragra#h, are incor#orated in ,6 '$1 -<, ,<+, ,+,-,+., and >+,, res#ecti(ely.N
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6. !a3 on =ational Bank =otes =ot $ecured by 'nited $tates Bonds
=ational banking associations ha(ing circulating notes secured otherwise than by bonds of the 'nited $tates, shall #ay for the first
three months a ta3 at the rate of three #er centum #er annum u#on the a(erage amount of such of their notes in circulation as are
based u#on the de#osit of such securities, and afterwards an additional ta3 rate of one-half of , #er centum #er annum for each month
until a ta3 of / #er centum #er annum is reached, and thereafter such ta3 of / #er centum #er annum u#on the a(erage amount of such
notes7 #ro,ie further, !hat whene(er in his Kudgment he may deem it desirable, the $ecretary of the !reasury shall ha(e #ower to
sus#end the limitations im#osed by section one and section three of the 0ct referred to in this section, which #rescribe that such
additional circulation secured otherwise than by bonds of the 'nited $tates shall be issued only to =ational banks ha(ing circulating
notes outstanding secured by the de#osit of bonds of the 'nited $tates to an amount not less than +< #er centum of the ca#ital stock of
such banks, and to sus#end also the conditions and limitations of section fi(e of said 0ct e3ce#t that no bank shall be #ermitted to
issue circulating notes in e3cess of one hundred and 6> #er centum of its unim#aired ca#ital and sur#lus. e shall reDuire each bank
and currency association to maintain on de#osit in the !reasury of the 'nited $tates a sum in gold sufficient in his Kudgment for the
redem#tion of such notes, but in no e(ent less than fi(e #er centum. e may #ermit =ational banks, during the #eriod for which such
#ro(isions are sus#ended, to issue additional circulation under the terms and conditions of the 0ct referred to as herein amended7
#ro,ie further, !hat the $ecretary of the !reasury, in his discretion, is further authori2ed to e3tend the benefits of this 0ct to all
Dualified $tate banks and trust com#anies, which ha(e Koined the 4ederal reser(e system, or which may contract to Koin within fifteen
days after the #assage of this 0ct.
MFmitted from '.$. 1ode. 0s amended by act of 0ug. +, ,-,+ (.9 $tat. /96).N
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%ection 1<. $eduction of (apital of Bational )anks
(a" In genera!. $ubKect to the a##ro(al of the 1om#troller of the 1urrency, a national banking association may, by a (ote of
shareholders owning, in the aggregate, two-thirds of its ca#ital stock, reduce its ca#ital.
(b" 'hareho!er istri%utions authori1e. 0s #art of its ca#ital reduction #lan a##ro(ed in accordance with subsection (a), and with the
affirmati(e (ote of shareholders owning at least two thirds of the shares of each class of its stock outstanding (each (oting as a class),
a national banking association may distribute cash or other assets to its shareholders.
M,6 '$1 >-. $ection >,+., "e(ised $tatutes, as amended and renacted by this section, was further amended by acts of 0ug. 6., ,-.> (+- $tat. :6<) and Fct.
,., 6<</ (,6< $tat. ,-:<).N
%ection 10. (ivil oney 2enalty
4irst !ier
(a" 0ny member bank which, and any institution-affiliated #arty (within the meaning of section .(u) of the 4ederal De#osit 8nsurance
0ct) with res#ect to such member bank who, (iolates any #ro(ision of section 66, 6.0, or 6.B, or any regulation issued #ursuant
thereto, shall forfeit and #ay a ci(il #enalty of not more than G>,<<< for each day during which such (iolation continues.
M,6 '$1 ><+(a). 0s added by act of =o(. ,<, ,-:9 (-6 $tat. ./+,) and amended by acts of Fct. ,>, ,-96 (-/ $tat. ,>6.) and 0ug. -, ,-9- (,<. $tat. +:<).N
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$econd !ier
(b" =otwithstanding subsection (a), any member bank which, and any institution-affiliated #arty (within the meaning of section .(u) of
the 4ederal De#osit 8nsurance 0ct) with res#ect to such member bank who
,.
0. commits any (iolation described in subsection (a)5
B. recklessly engages in an unsafe or unsound #ractice in conducting the affairs of such member bank5 or
1. breaches any fiduciary duty5
6. which (iolation, #ractice, or breach--
0. is #art of a #attern of misconduct5
B. causes or is likely to cause more than a minimal loss to such member bank5 or
1. results in #ecuniary gain or other benefit to such #arty,
shall forfeit and #ay a ci(il #enalty of not more than G6>,<<< for each day during which such (iolation, #ractice, or breach
continues.
M,6 '$1 ><+(b). 0s added by act of =o(. ,<, ,-:9 (-6 $tat. ./+,) and amended by act of 0ug. -, ,-9- (,<. $tat. +:<).N
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!hird !ier
(+" =otwithstanding subsections (a) and (b), any member bank which, and any institution-affiliated #arty (within the meaning of section
.(u) of the 4ederal De#osit 8nsurance 0ct) with res#ect to such member bank who--
,. knowingly--
0. commits any (iolation described in subsection (a)5
B. engages in any unsafe or unsound #ractice in conducting the affairs of such credit union5 or
1. breaches any fiduciary duty5 and
6. knowingly or recklessly causes a substantial loss to such credit union or a substantial #ecuniary gain or other benefit to such
#arty by reason of such (iolation, #ractice, or breach,
shall forfeit and #ay a ci(il #enalty in an amount not to e3ceed the a##licable ma3imum amount determined under subsection (d) for
each day during which such (iolation, #ractice, or breach continues.
M,6 '$1 ><+(c). 0s added by act of =o(. ,<, ,-:9 (:6 $tat. ./+,) and amended by act of 0ug. -, ,-9- (,<. $tat. +:<).N
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*a3imum 0mounts of Penalties for 0ny Aiolation Described in $ubsection (c)
(#" !he ma3imum daily amount of any ci(il #enalty which may be assessed #ursuant to subsection (c) for any (iolation, #ractice, or
breach described in such subsection is--
,. in the case of any #erson other than a member bank, an amount to not e3ceed G,,<<<,<<<5 and
6. in the case of a member bank, an amount not to e3ceed the lesser of --
0. G,,<<<,<<<5 or
B. , #ercent of the total assets of such member bank.
M,6 '$1 ><+(d). 0s added by act of =o(. ,<, ,-:9 (-6 $tat. ./+,) and amended by acts of Fct. ,>, ,-96 (-/ $tat. ,>6.) and 0ug. -, ,-9- (,<. $tat. +:<).N
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0ssessment, Btc.
(e" 0ny #enalty im#osed under subsection (a), (b), or (c) shall be assessed and collected by
,. in the case of a national bank, by the 1om#troller of the 1urrency5 and
6. in the case of a $tate member bank, by the Board,
in the manner #ro(ided in sub#aragra#hs (B), (4), (@), and (8) of section 9(i)(6) of the 4ederal De#osit 8nsurance 0ct for #enalties
im#osed (under such section) and any such assessment shall be subKect to the #ro(isions of such section.
M,6 '$1 ><+(e). 0s added by act of =o(. ,<, ,-:9 (-6 $tat. ./+,) and amended by act of 0ug. -, ,-9- (,<. $tat. +:<).N
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earing
(f" !he member bank or other #erson against whom any #enalty is assessed under this section shall be afforded an agency hearing if
such member bank or #erson submits a reDuest for such hearing within 6< days after the issuance of the notice of assessment. $ection
9(h) of the 4ederal De#osit 8nsurance 0ct shall a##ly to any #roceeding under this section.
M,6 '$1 ><+(f). 0s added by act of =o(. ,<, ,-:9 (-6 $tat. ./+,) and amended by act of 0ug. -, ,-9- (,<. $tat. +:<).N
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Disbursement
(g" 0ll #enalties collected under authority of this #aragra#h shall be de#osited into the !reasury.
M,6 '$1 ><+(g). 0s added by act of =o(. ,<, ,-:9 (-6 $tat. ./+,) and amended by act of 0ug. -, ,-9- (,<. $tat. +:<).N
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HAiolateH Defined
(h" 4or #ur#oses of this section, the term H(iolateH includes any action (alone or with another or others) for or toward causing, bringing
about, #artici#ating in, counseling, or aiding or abetting a (iolation.
M,6 '$1 ><+(h). 0s added by act of 0ug. -, ,-9- (,<. $tat. +:<).N
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"egulations
(i" !he 1om#troller of the 1urrency and the Board shall #rescribe regulations establishing such #rocedures as may be necessary to
carry out this section.
M,6 '$1 ><+(i). 0s added by act of 0ug. -, ,-9- (,<. $tat. +:<).N
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=otice 'nder !his $ection 0fter $e#aration from $er(ice
(m" L !he resignation, termination of em#loyment or #artici#ation, or se#aration of an institution-affiliated #arty (within the meaning of
section .(u) of the 4ederal De#osit 8nsurance 0ct) with res#ect to a member bank (including a se#aration caused by the closing of such
a bank) shall not affect the Kurisdiction and authority of the a##ro#riate 4ederal banking agency to issue any notice and #roceed under
this section against any such #arty, if such notice is ser(ed before the end of the /-year #eriod beginning on the date such #arty
ceased to be such a #arty with res#ect to such bank (whether such date occurs before, on, or after the date of the enactment of this
subsection).
M,6 '$1 ><+(K). 0s added by act of 0ug. -, ,-9- (,<. $tat. +/,).N
L $o in original. $ubsection (m) was added without subsections (K) through (l ).
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%ection =I. %aving (lause
8f any clause, sentence, #aragra#h, or #art of this 0ct shall for any reason be adKudged by any court of com#etent Kurisdiction to be
in(alid, such Kudgment shall not affect, im#air, or in(alidate the remainder of this 0ct, but shall be confined in its o#eration to the clause,
sentence, #aragra#h, or #art thereof directly in(ol(ed in the contro(ersy in which such Kudgment shall ha(e been rendered.
%ection =/. $eservation of $ight to !mend
,. "eser(ation of "ight to 0mend
!he right to amend, alter, or re#eal this 0ct is hereby e3#ressly reser(ed.

Federal Reserve: A Faustian Bargain?

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Federal Reserve: A Faustian Bargain?

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Federal Reserve:

Thomas B% M(Ca1e +pr% L! F$=GMar% >! FL

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