(c) They may establish accounts with other reserve banks for exchange purposes and may open accounts in foreign countries and establish branches abroad with the consent of the Reserve Board. Thru these agencies they may buy and sell, with or without in dorsement, bills of exchange having not over ninety days to run and bearing the signatures of at least two responsible parties. With the consent of the Re serve Board they may also open banking accounts for their foreign correspondents or agencies.
(d) Thcy are required to establish branches in their districts, and they may do so in the districts of other reserve banks which fail or suspend. Only one branch had been established up to January 1, 1917. The Federal Reserve Bank of Atlanta has a branch in New Orleans which has operated successfully from the beginning. The branches are to have not more than seven nor less than three directors, a majority of one appointed by the reserve bank and the remainder by the Board.
(e) The banks may rediscount commercial notes, drafts and bills of exchange indorsed by member banks, "protest waived." This does not include those drawn to carry stocks or securities except obligations of the United States. Such discounted paper may not run over ninety days, exclusive of days of grace, except agricultural and cattle paper, which may run for six months exclusive of days of grace.
(f) They may rediscount bank acceptances hav ing not more than six months to run, exclusive of days of grace, and indorsed by a member bank. Four kinds of bank acceptances may be rediscounted for member banks: (1) bills accepted by member banks, • • arising out of transactions involving the importa tion or exportation of goods; (2) bills accepted by member banks drawn upon them by foreign bank ers for the purpose of furnishing dollar exchange; (3) bills accepted by member banks, arising out of transactions involving the domestic shipment of goods and with shipping documents conveying or securing title attached at the time of acceptance; (4) bills accepted by member banks, secured at the time of ac ceptance by a warehouse receipt or other such docu ment conveying or securing title to readily market-' able staples. Only bills of the first type described could be accepted by national banks and rediscounted for members by the reserve banks under the Federal Reserve Act as originally passed. But on Septem ber 7, 1916, the Act was amended so as to permit the other three classes of acceptances described.
(g) They may make loans to their member banks for not over fifteen days, provided that loans so made are secured by the deposit of pledge of bonds or notes of the United States, or by such notes, bills, etc., as the reserve banks are permitted to rediscount or buy.
(h) They may establish rates of discount from time to time, subject to review and determination by the Reserve Board. All of the rediscounting opera tions of the reserve banks are subject to the super vision and control of the Board. The rediscount fea ture makes the assets of member banks liquid, for they can be realized upon at any time so long as the reserve banks are able to continue rediscounting.
(i) They may issue Federal Reserve bank notes se cured by bonds under the same conditions that apply to national bank notes, except that the total amount is not limited to the capital stock of the issuing bank.
( j ) They may issue Federal Reserve notes under conditions which will be explained later. These notes should not be confused with the Federal Reserve bank notes described in the preceding paragraph.
(k) They may buy and sell in the open market, at home or abroad, cable transfers and bankers' accept ances and bills of exchange, of the kind eligible for rediscount, with or without the indorsement of a mem ber bank.
(1) They may deal in gold coin or bullion at home or abroad.
(m) They may buy or sell, at home or abroad, se curities of the United States and of any political di vision thereof, including irrigation, drainage and re clamation districts. Securities other than those of the United States cannot be bought until they are within six months of maturity. The Board issues regulations under which this power is exercised.
(n) They may purchase from member banks and sell bills of exchange arising out of commercial trans actions.
11. Powers and duties of the Federal Reserve Board.—Many of the powers of the Board cannot be expressed in so many words. Some of them are not even fully understood as the Board has not had occa sion to test its authority on all points before the courts. , It may be said, in general, that the Board is able to step in and do almost anything it wishes with the re serve banks. The more important powers and du ties may be summarized as follows: (a) To pay its expenses, it levies semi-annually upon the reserve banks an assessment in proportion to their capital and surplus.