(b) It is required to make an annual report of its operations to Congress.
(c) It may examine the member banks and all re serve banks and may require such statements and re ports as it may deem necessary. It is required to publish a weekly statement showing the condition of the reserve banks individually and collectively.
(d) It may permit or require one reserve bank to rediscount paper for another at a rate of interest de termined by the Board. This is an important power; it means that the Board can force one reserve bank to go to the rescue of another which is in need of cash. Funds may thus be moved arbitrarily from one dis trict to another.
(e) Suspend any reserve requirements specified in the Act for a period of not over thirty days, provided it establishes a graduated tax on deficiency in re serves.
(f) Supervise and regulate the issue and retire ment of federal reserve notes.
(g) Add to or reclassify the reserve and central reserve cities, or terminate their designation as such.
(h) Suspend or remove any officer or director of a reserve bank for a cause stated in writing.
(i) Require the writing off of doubtful or worth less assets from the books of the reserve banks.
( j) Suspend, administer, liquidate or reorganize a reserve bank for due cause.
(k) Require bonds of Federal Reserve agent's and make other precautionary regulations.
(1) Exercise general supervision over the Federal Reserve banks. Under this clause the Board can assume almost any power over the reserve banks which is not specifically mentioned in the Act.
(m) Permit national banks to act as trustees, ex ecutors, administrators or registrars of stocks and bonds when not contrary to state or local law.
(n) Employ necessary assistants, etc.
(o) Exercise the functions of a clearing house, or require one of the reserve banks to do so, and require reserve banks to do the same for member banks. It may also fix charges to be collected by member banks and reserve banks for checks cleared thru the reserve banks, such charges to approximate the cost of doing the business.
(p) Define the character of bills eligible for re discount by reserve banks and limit and regulate re discounts and acceptances.
(q) Establish the rate of interest to be charged re serve banks on Federal Reserve notes outstanding.
No interest is charged now.
(r) Fix salaries of bank examiners.
It should be noted that the Federal Reserve Board has no capital and that it does no actual banking busi ness. It is a controlling body.
12. Operations of member Federal Reserve Act confers certain powers upon national banks in addition to those which they already pos sessed. Some of these powers are conferred also upon state banks which are members. It should be understood, however, that the Federal law does not confer any powers upon state banks which are con trary to the state laws under which they are incor porated. The Federal law simply affirms that cer tain of the powers granted by state law may be exer cised by state banks after they enter the system. State banks cannot even enter the system if this action would contravene state law. For example, the law of some states forbids banks to own stock in any corporation. To become members of the Federal Reserve system they must buy stock in the reserve bank of their district. Thus they cannot become members until the state law is changed.
Any national bank having a capital and surplus of $1,000,000 or more may, with the permission of the Reserve Board, establish branches in foreign coun tries in order to further the foreign commerce of the United States or to act as fiscal agents of the United States if required. If such a bank does not wish to establish branches of its own, it may combine with other banks and purchase stock in a bank chartered under the laws of the United States or of any individ ual state and engaged principally in the business of international and foreign banking. National banks are not permitted to establish branches within the con tinental United States, but it has been ruled that where a national bank absorbs a state bank having branches in the same city, in accordance with state law, it may continue the branches. State banks which have branches when they enter the reserve system may retain their branches and continue to establish more, so long as in doing so they are not acting contrary to the law of the state and the conditions under which they entered the system.