3. The bank examinations department, which examines the member banks and has custody of the examination reports, handles applications for membership, for capi tal stock, for permission to accept bills drawn upon it up to ioo per cent of its capital stock and surplus, and for permission to do fiduciary business, and which is also on the lookout for violations of the Clayton Act by the banks.
4. The statistics department, which reports to the Federal Reserve Board on the business and banking conditions of the district, and prepares statistical information.
Internal Organization In 1915 and again in 1918, the Federal Reserve Board sug gested a scheme of internal organization for the federal reserve banks. The 1918 scheme is shown in Figure 5.
Reorganization of Federal Reserve Bank of New York 1919 The heavy demands made by the war upon the services of the federal reserve banks led to a disproportionate growth of certain functions and departments, while the general growth of these banks since 1914 had been so great as to require a complete re organization. The Federal Reserve Bank of New York devised a scheme of organization which it believed would facilitate the work of that bank and this reorganization (see Figure 6) was put into operation in September, 1919. It has as its aim the separation of the functions of operation and organization, and it places the responsibility for conducting each department upon its own ad ministrative officer, requiring him to transact completely the business falling within his province. As every activity is def initely allocated to a specific department, responsibility is thus more specifically fixed. One of the most striking features of the change is the abolition of the office of through whose hands in the old organization all operating matters, in the last analysis, had to pass.
The officers of the New York bank are grouped as follows: 1. The junior officers are the managers of the various depart ments, their position corresponding to the former position of assistant cashier. Each of these managers is responsible for the duties of operation or organization, as the case may be, of his department. He has working under him subordinates authorized to sign within specified limitations, as well as a sufficient staff to complete all the business of his department.
2. The senior officers are called "controllers." To each con troller is assigned the supervision of one or more of the important functions of the bank, and each is responsible for the development of the policies relating thereto and for supervision of the depart ments charged with carrying out such functions. The controllers
are not in charge of the operation of the departments, but super vise and control their policies; however, with the present size of the bank, a controller may act as a department manager, and a deputy governor as controller.
3. The general officers include the governor, the deputy governors, and the chairman of the board of directors, corre sponding to the president, vice-presidents, and chairman of the board of directors of other banks. These general officers form the managing committee of the bank, and certain controllers from time to time are invited to confer with this committee at its daily meetings. The members of the committee are concerned with general policies of administration and not with specific functions or departments of the bank.
Another aim of reorganization was to center responsibility upon the junior and senior officers, thus affording them more opportunities for promotion than existed under the old form of organization with its one cashiership to which office all assistant cashiers aspired. The plan of fixing responsibility has been extended to the divisions of the departments, each of which is put in charge of a chief, and many of the larger divisions are divided into sections, each in charge of a supervisor.
As this functional system of management seems to be success ful, it will probably be adopted by the other federal reserve banks.
The Governor The two chief men in a federal reserve bank are the federal reserve agent, whose duties have been stated in a preceding sec tion, and the governor. The governor is the active operating officer of the bank. He supervises, through his subordinates, the details of operation, controls the personnel, devises internal organization, and executes the instructions of the board of direc tors by whom he is elected. Although he is hired on a commercial basis, the responsibilities of his position make him a public ser vant. The federal reserve agent is a government appointee and his salary is not so likely to represent his commercial worth. The question of the relative importance and honor of the two positions has been much discussed. They are approximately co-ordinate in rank, and their duties do not overlap or conflict.