The board of directors of each federal reserve bank elects one of its members as a member of the Federal Advisory Council, a body composed of one member from each reserve bank, which meets in Washington at least four times a year to consult, advise, and question the Federal Reserve Board in regard to the business of the reserve banking system.

At the head of our federal reserve banking system is the Federal Reserve Board. This board was created in 1913 by

the same act of Congress which provided for the federal reserve banks. It is composed of seven members, five of whom are appointed by the President and Senate for a term of ten years. The Secretary of the Treasury and the Comptroller of the Currency are ex officio members, the Secretary of the Treasury being ex officio chairman of the board. The salary for each of the appointed members is $12,000 per annum and expenses, and the Comptroller of the Currency receives $7000 in addition to his salary as Comptroller.

The Federal Reserve Board has general supervision of our federal reserve banking system. For instance, it may examine

any bank in the system; it regulates, through the Comptroller of the Currency, the issue and retirement of reserve notes, and determines the rate of interest to be paid the government for these notes; it suspends or removes federal reserve bank officers, taking possession of such bank if necessary; and it publishes a weekly statement of the reserve banks. This board has its offices in the Treasury Building at Washington.

Farm Loan Banks. The federal land bank system, which was created by Congress in 1916, does for the farmer, to some extent, what the federal reserve system does for the commercial The farmer is given an opportunity to secure money on his most available commodity — his land — just as the merchant or the manufacturer is able through the federal reserve system to obtain money on paper based on commercial transactions.

man.

The United States is divided into twelve land bank districts 1 with a federal land bank located in each. These twelve banks are supervised by the Federal Farm Loan Board consisting of four members appointed by the President and Senate for terms of eight years and the Secretary of the Treasury, who is a member and ex-officio chairman of the board. Each of the four members appointed receives an annual salary of $10,000.

These twelve banks will not, except in special cases, lend money directly to farmers; but there are three ways through which a farmer may borrow money by giving a first mortgage on his farm property. First, any ten owners of farm land who desire to borrow at least $20,000 may form a National Farm Loan Association, and receive the amount desired from the land bank of their district through this agency. Second, the Federal Farm Loan Board may authorize federal land banks to make loans to farmers through local agents, such as State

11. Me., N. H., Vt., Mass., R. I., Conn., N. Y., N. J. (Springfield). 2. Pa., Del., Md., Va., W. Va., D. C. (Baltimore). 3. N. C., S. C., Ga., Fla. (Columbia). 4. Tenn., Ky., Ind., O. (Louisville). 5. Ala., Miss., La. (N. Orleans). 6. Ill., Mo., Ark. (St. Louis). 7. Mich., Minn., Wis., N. D. (St. Paul). 8. Neb., S. D., Wy., Ia. (Omaha). 9. Okla., Kan., Col., N. M. (Wichita). 10. Tex. (Houston). 11. Cal., Nev., Utah, Ariz. (Berkeley). 12. Wash., Ore., Mont., Idaho (Spokane).

banks. Third, joint stock land banks may be created under the supervision of the Federal Farm Loan Board to lend money secured by first mortgages on farm lands.

The money to be lent to farmers is obtained principally from the sale of bonds which may not bear more than five per cent interest. The money thus obtained is lent through the above agencies at a rate not to exceed six per cent.

Loans are made only for the purchase of land, for its improvement, or for purchase of live stock, equipment, fertilizers, or to provide buildings on a farm, or to liquidate indebtedness existing when the first association was formed in the county where the land is located. No loan is made of more than $10,000 or less than $100. The loan itself is reduced by annual or semi-annual payments on the principal. No mortgage shall run for more than forty years nor less than five.

119. The Federal Trade Commission. - In 1914 Congress created a Federal Trade Commission composed of five commissioners, who are appointed by the President and Senate. Not more than three of the commissioners may be of the same political party. The salary of each commissioner is $10,000 a year. The powers of the commission are twofold. First, it is empowered to prevent persons, partnerships, or corporations, except banks and common carriers (e.g., railroads),1 from using unfair methods of competition in commerce among the States or with foreign nations. In performing this duty the Commission has access to the books and documents of a commercial firm whenever there is reason to believe that such a concern is using unfair methods of competition. If any irregularity is discovered the Commission may order the concern to cease using such unfair methods.

The second power of the Commission is to gather and compile information from such commercial corporations as are under its control and require them to furnish the Commission

1 Federal banks are under the control of the Federal Reserve Board and the Comptroller of the Currency. Common carriers are under the control of the Interstate Commerce Commission.

with detailed reports of their transactions. It also makes investigations for the Attorney-General, the President, or Congress, concerning violations of the anti-trust laws; it classifies corporations and makes rules and regulations to assist the commission in the performance of its duties; it investigates trade conditions in and with foreign countries; and it submits to Congress recommendations for additional legislation.

As an illustration of the Commission's investigation of trade conditions, it has just investigated how manufacturers of European countries combine in order to capture foreign trade. As a result of this investigation it was found that manufacturers of these countries form selling agencies which send representatives to foreign countries to advertise and to obtain orders. The orders are distributed among the manufacturers in proportion to the amount paid toward the maintenance of the agency. By thus coöperating, orders can be obtained on a large scale at much less cost than if each manufacturer attempted to maintain his own agents in foreign countries.

120. The United States Shipping Board was created by Congress in 1916 and enlarged in 1920. It consists of seven commissioners appointed by the President and Senate for terms of six years, and not more than one may be appointed from the same State. Each receives a salary of $12,000 a year.

The duty of the Board is to promote a privately owned merchant marine that can be used as a naval or military auxiliary in time of war.

(1) It controls the hundreds of merchant and transport vessels purchased by our Government during the War.

(2) It disposes of these vessels as soon as practicable, and only to American citizens if they are needed for the maintenance of our merchant marine.

(3) It determines what steamship lines should be established to develop our commerce and sells vessels under especially favorable conditions to concerns that agree to operate such lines; or, if necessary, it leases vessels to such concerns.

(4) It lends not exceeding two thirds the cost of constructing vessels of special types needed for certain lines.

(5) It investigates water terminals, advises with communities regarding harbor, river, and port improvements, and brings to the attention of the Interstate Commerce Commission any detrimental rates or regulations of railroads that are injurious to water transportation.

Copyright, Underwood & Underwood, N. Y.

THE LIBRARY OF CONGRESS, WASHINGTON, D. C.

It has the most beautiful interior of any American building.

(6) It reports to the Secretary of Commerce navigation companies that give rebates or unjustly discriminate among shippers or use a "fighting ship" (ship run at a loss to destroy a competitor). The Secretary then refuses such company the right of entry for its ships until the evil is corrected.

The United States Tariff Commission. In 1916 the United States Tariff Commission was established by Congress. It is composed of six members, not more than three of whom shall