part of the lawful reserve of National banks and the board is authorized to act as a clearing house for federal reserve banks, it would seem that its certificates would come within the spirit of the act. In other words, while section 5192 relates to the reserves of National banks, the Federal Reserve Act makes no distinction between the character of reserve of such banks and the character of reserve of federal reserve banks.

In answer to the second question, while the act does not in terms provide for deposits by the federal reserve banks, or by the Federal Reserve Board, with the Treasurer of the United States, the Attorney General has rendered an opinion on the status of the Federal Reserve Board, in which he holds that the Board is an independent establishment and the members are officers of the United States.

As such officers it is entirely consistent with the established practices of the Government that accounts should be opened with the treasurer or assistant treasurer for the deposit of any funds held by the Federal Reserve Board. In other words, since that fund will be deposited with the Federal Reserve Board and since the board at this time is without the necessary facilities for keeping such fund, the Treasury of the United States would seem to be the proper place for its deposit.

The bookkeeping incident to handling the clearings could, of course, be handled by the board without reference to the physical location of the funds in question.

I am therefore of the opinion that both questions may be answered in the affirmative.

Respectfully,

M. C. ELLIOTT, Counsel.

DETAILS AS TO THE ESTABLISHMENT OF GOLD CLEARANCE

FUND

May 11, 1915, the Federal Reserve Board announced details of an important step in coördinating the work of the federal reserve system to the end that a fund of $12,000,000 in gold would be collected for clearing balances among the federal reserve banks under the direction of the Federal Reserve Board. The Federal Reserve Board was specifically authorized in the act creating the system, to act as a clearing house for the federal reserve banks, and it was pointed out in the debates in Congress that such authority might permit a long step in the direction of modifying the system in the direction of a central bank.

Under regulations issued by the Federal Reserve Board, each federal reserve bank was directed not later than May

24, 1915, to forward to the Treasury or the nearest subtreasury "for credit to the amount of the gold settlement fund," $1,000,000 in gold or gold certificates, and in addition, an amount at least equal to its net indebtedness to all other federal reserve banks. This deposit to be maintained at all times at the $1,000,000 mark, settlements of amounts due to the reserve banks to be made each Thursday.

The determination of the Board to require the physical presence of the gold in Washington is indicated by a regulation as to a safe in the vaults of the Treasury to be set aside for it, with a combination known to two designated officials. The fund would be audited not less than once in three months by an official of the Federal Reserve Board and an agent designated by the banks.

Each bank will be permitted to count as part of its reserves its deposits in the clearance fund.

FORM FOR DISCOUNT RATES

June 1, 1915, the Federal Reserve Board adopted a form for discount rates. This is done to the end that the recommendations in connection with discount rates from the twelve federal reserve banks may be uniform and the board prepared the following form for such recommendations. It is to be forwarded to reach the board not later than Thursday morning of each week.

Date

FEDERAL RESERVE BOARD, Washington, D. C.:

1915.

SIR: I have the honor to forward the recommendation that no change be made in the existing discount rates for the Federal Reserve Bank of for the week ending Thursday, Respectfully,

1915.

Federal Reserve Agent.

I have the honor to request that the following rates be approved by the Federal Reserve Board for the Federal Reserve Bank of

1Article III., section 106, subdivision 4, of the banking laws of the State of New York, provides that banks shall have the power—

To purchase and hold, for the purpose of becoming a member of a federal reserve bank, so much of the capital stock thereof as will qualify it for membership in such reserve bank pursuant to an act of Congress, approved December twenty-three, nineteen hundred and thirteen, entitled the "Federal Reserve Act"; to become a member of such federal reserve bank, and to have and exercise all powers, not in conflict with the laws of this State which are conferred upon any such member bank by the Federal Reserve Act. Such member bank and its directors, officers and stockholders shall continue to be subject, however, to all liabilities and duties imposed upon them by any laws of this State and to all the provisions of this chapter relating to banks.

Article V., section 185, subdivision 12, of the same statute provides that every trust company shall have the power

To purchase and hold, for the purpose of becoming a member of a federal reserve bank, so much of the capital stock thereof as will qualify it for membership in such reserve bank, pursuant to an act of Congress approved December twenty-three, nineteen hundred and thirteen, entitled

1Paine's New York Banking Laws (7th Ed.), pp. 164, 245. Paine's National Banking Laws, pp. 16, 186.

the "Federal Reserve Act"; to become a member of such federal reserve bank, and to have and exercise all powers, not in conflict with the laws of this State, which are conferred upon any such member by the Federal Reserve Act. Such trust company and its directors, officers and stockholders shall continue to be subject, however, to all liabilities and duties imposed upon them by any law of this State and to all the provisions of this chapter relating to trust companies.

1OTHER STATE STATUTES AS TO MEMBERSHIP OF STATE INSTITUTIONS

The following are statutes enacted by the States mentioned, in connection with the membership of their banking institutions.

CALIFORNIA-The California bank act provides in section 56 as follows:

Any bank organized and existing under the laws of this State is hereby authorized and empowered to join or associate itself with any "National reserve association of the United States" or branch thereof, or any plan now or hereafter created or established by act of Congress, whether such banking or currency association or plan be created by Congress under the above or any other name. Nothing in this act shall prohibit any such bank from joining or associating itself with any such association or plan or branch thereof nor from investing any part of its capital or surplus in the stock of such association, plan or branch thereof in accordance with the terms and provisions of such act of Congress: Provided, however, That such investment shall in no case exceed the minimum amount required to join or associate itself with such association, plan, or branch thereof. Any bank joining or associating itself with such association, plan or branch thereof shall have and exercise all powers not in conflict with the laws of this State, which are conferred upon any member bank in any such "National reserve association of the United States" or branch thereof. Such member bank and its directors, officers and stockholders shall continue to be subject, however, to all liabilities and duties imposed upon them by any law of this State and to all the provisions of the "bank act".

COLORADO-July 12, 1915, the State enacted a statute authorizing State and National banks to act as trustee, executor, administrator, and registrar of stocks and bonds.

IDAHO March 11, 1915, a statute was adopted which authorizes any State bank to subscribe for stock in a federal reserve bank.

1 Federal Reserve Bulletin, pp. 150, 156.

INDIANA-March 8, 1915, the following act, giving National banks the right to accept and execute "trusts of any and every description," was approved:

That every person, firm or corporation transacting a banking business subject to the provisions of an act entitled, "An act to regulate and supervise the business of banking by individuals, partnerships or unincorporated persons," approved March eighth, nineteen hundred and seven, and every corporation transacting a banking business as prescribed in "An act to authorize and regulate the incorporation of banks of discount and deposit in the State of Indiana," approved February seventh, eighteen hundred and seventy-three, and all acts amendatory or supplemental thereto, and every National bank coming within the United States Federal Reserve Act shall be empowered by this act to accept and execute trusts of any and every description which may be committed or transferred to them under the same rules and regulations as now govern like powers in loan and trust companies. In case of any person, firm or corporation transacting a banking business and accepting any trust under the provisions of this act, the president or cashier of such bank is authorized to receive and execute the same in the name of the bank.

IOWA-The last session of the Iowa Legislature passed laws authorizing State banks and trust companies to become members of a federal reserve bank and authorizing National banks to exercise the same powers as are conferred upon trust companies and State and savings banks, as follows:

SEC. 1. That any State bank, savings bank or trust company organized under the laws of this State is authorized and empowered, upon a vote of the shareholders thereof owning not less than fifty-one (51) per cent. of the capital stock of such State bank, savings bank or trust company, to become a member of the federal reserve bank in the federal reserve district in which such banks or trust companies are located, and to incur liability therefor.

SEC. 1. That the law as it appears in section eighteen hundred and eighty-nine-d, supplement to the code, 1913, be and the same is hereby amended by adding a paragraph at the end of said section, as follows:

9. When so authorized by any law of the United States now in force or hereafter enacted, National banks may exercise the same powers and perform the same duties as are by this section conferred upon trust companies, State and savings banks.

KENTUCKY-The Legislature of Kentucky at its 1914 session passed the following act, authorizing State banks and trust companies to subscribe for stock in a federal reserve bank: