COMMITTEE REPORT 
Number of 
Regional Banks 
Branches of 
Regional Banks 
Recommendation 
Applications 
for Rediscounts 
Rediscount Rate 
Power of 
Reserve Banks 
't must be admitted that it would be necessary for the branches to 
possess powers substantially similar to those now possessed by the 
regional banks, and so no apparent advantage would be gained. Any 
‘nfringement upon the regional idea must operate against the prin- 
~iple of cooperation. 
While not asserting that exactly twelve regional banks located 
1s at present comprise an ideal system, we believe that modification 
of this structural feature should not be attempted in the immediate 
future. Peculiar problems that grow out of the departure from the 
form of earlier central bank organizations are well on the road to 
solution. The conduct of business and banking in the United States 
has been adapted to this form. Attempts to eliminate any of the pres- 
ent district reserve banks undoubtedly would develop discord and 
rancor. This would outweigh any mechanical and operating effi- 
ciencies that might be afforded by changing the number of districts. 
Adjustments through approving branches within the areas of the 
respective districts of the regional banks are within the power of the 
Federal Reserve Board, but here it should be emphasized that the 
further extension of regional branch banks to meet the civic pride 
»f any community is inexcusable and should be made only when 
zlearly imperative to serve a territory not now in reasonably close 
-elationship to the regional reserve bank. 
After rejecting the principle of one centralized bank, we prefer 
:0 support for the present the continuance of the present number of 
reserve banks, while not precluding the possible desirability of a 
future adjustment in this feature of the system’s structure. 
The Committee recommends that in the structure of the federal 
reserve system the principle of regional banks with autonomous 
bowers be maintained. 
One of the major responsibilities of the regional reserve banks 
's to act upon applications for rediscount made by member banks. 
Through decrease or increase of rediscount rates such applications 
nay be encouraged or discouraged. The changes in such rates are 
:losely watched by the banks and are of vital interest to the public 
zenerally because of the influence of the rediscount rate upon the 
‘ending rates of the member banks. It is in relation to this function 
»f reserve operation that some tendency to weaken regional auton- 
»my has developed, which if it persists will furnish a considerable 
‘mpetus to undue centralization of power within the system. 
The Federal Reserve Act specifies that the rediscount rates shall 
se fixed “with a view of accommodating commerce and business.” 
[t gives to each reserve bank the power to establish such rates, “sub- 
ject to review and determination of the Federal Reserve Board.” 
(Continued on page 10)