Y.
COMMITTEE REPORT
nearly nine thousand member banks. It can take action within the
district only on important matters of an inter-district or national
~haracter.
District
Management
Board’s Task
Board Membership
Strong Board
No matter how judiciously the Board functions, however, effi-
sient administration of the reserve system depends to an important
extent upon the activities of the district directorates and their offi-
cers. Their functions as regards the determination of rediscount rates
and open-market operations are of the greatest importance, and the
large degree of autonomy wisely permitted them must be zealously
guarded in the interest of proper servicing of district situations. It
is encouraging that the district directors, representative of industry
and commerce, as well as of banking, are developing special knowl-
edge and experience in these and other system matters.
Emphasis upon the necessity of an efficient district administra-
tion does not mean that an able Federal Reserve Board is not of
the highest importance. Although the Board’s executive powers are
exercised chiefly in emergency situations, its very detachment from
daily district administration and its sources of general information,
both domestic and foreign, furnish a background which should
prove of great value in judging financial trends and in exercising
‘ts persuasive, interpretative and harmonizing influences which are
always imperative in the continuous task of adapting the total volume
of reserve credit to the requirements of the country as a whole.
Some objection is encountered to increasing the attractiveness
of Board membership on the ground that in the interest of district
dank autonomy a weak Board is actually to be preferred. There is
also another view that it is impracticable to develop the conditions
‘hat are conducive to the existence of a strong Board and that the
nevitable had better be expected. This committee, however, does
aot accept the opinion that even with the most competent district
management the system can be properly administered without the
assistance of a strong and able Board. Even a cursory review of
the broad powers of the Board indicates that membership upon it
offers the opportunity for public service of the greatest importance
‘0 the whole country and that relatively simple adjustments will
‘ncrease its attractiveness to able men. It must not be overlooked that
a weak Board would be more inclined to interfere with the autonomy
of the reserve banks than a strong Board, and that the policies it
would favor would be more likely to work injury to the country
than those sponsored by a capable Board. The specific recommenda-
tions listed below are intended to assist in developing the dignity
and independence of the Board and to improve its working con-
iitions.
Continued on page 44)