The board has no source of income, but it has power to assess its expenses upon the federal reserve banks in proportion to their capitalization. The expenses, levied semiannually, amount to less than $250,000 per year.
The Federal Advisory Council The Federal Reserve Act provides for an advisory council consisting of as many members as there are districts. The board of directors of each federal reserve bank elects one member and determines his compensation subject to approval by the board. The meetings of this council are held at Washington at least four times a year, and oftener if called by the board. The council may meet elsewhere at such other times as it pleases. It elects its own officers and determines its own procedure. It has power to call for information regarding discount rates, rediscount business, note issues, reserve conditions in the various districts, the pur chase and sale of gold and securities by the reserve banks, open market operations by said banks, and the general affairs of the system, and to make recommendations concerning them; it can make oral and written representations regarding matters within the jurisdiction of the Federal Reserve Board, and it can confer directly with the board on general business conditions.
The council was created in response to the feeling that in the administration of the system the banks should be given an avenue of direct access to the responsible heads. It is wholly advisory. The practice has been for the reserve bank to elect some very prominent banker of its district, making membership on the council honorary and without compensation. Though composed of experts in banking, the council may not be able to give expert advice upon the operation of the reserve bank mechanism, for it has not the experience or information gained from conferences of the federal reserve agents or governors of the reserve banks, and most of the members' time is necessarily devoted to interests outside the reserve system. The term of office is but one year, although members may be re-elected. Even with such eligibility for re-election, however, the terms are likely to be short, and therefore the policies of the council tend to be less consistent and permanent and its work less efficient than if terms were long and there were rotation in office. The law does not confer clear and
definite responsibilities upon the council nor provide opportuni ties for broad usefulness. Nor is the authority granted to it necessarily exclusive, since other bodies may also advise with the board, as for instance, the officers of the American Bankers' Association, as well as the federal reserve agents and the gover nors of the reserve banks.
The Comptroller of the and Duties The National Banking Act of 1864 provided for the establish ment of a separate bureau of the Treasury, under the Comptroller of the Currency, charged with the execution of that and subse quent laws respecting the issue and regulation of national bank notes. The Comptroller is appointed by the President, upon recommendation of the Secretary of the Treasury, for a term of five years at an annual salary of $5,000. Neither the Comptroller nor his deputy may be interested directly or indirectly in any national bank.
The powers and duties of the Comptroller's office as they developed under the national bank laws were, in part, as follows: 1. To make investigations to determine whether a bank had satisfied the conditions prerequisite to issuing a certifi cate authorizing it to commence business; to issue such certificates or withhold them for good cause; to deter mine the maximum and minimum capitalization of a bank; to issue permits to increase or decrease the capi tal stock or to merge with other banks; to extend charters; to approve the name or change of name of a bank; to require and file oaths of directors; and the like.
2. To take possession of defaulting banks, appoint receivers, liquidate the banks, cancel their notes, and pay de positors.
3. To care for the issue, redemption, security, withdrawal, and cancellation of bank notes. This includes the engraving of plates and the making of dies and the custody of same; the printing of new notes and the custody of new and old notes; furnishing notes to banks; issuing new notes for those worn or mutilated; calcu lating and watching the redemption fund; requiring deposits of bonds and increases of such deposits if values fall; examining bonds, notes, dies, etc.; trans ferring these bonds for owners; redeeming notes; etc.