classes of
three men each. Classes A and B are elected by the member banks by a
system of group and preferential voting designed to prevent the large
banks from outvoting the smaller ones. Directors of class A are chosen
by the banks to represent them, and are expected to be bankers; those
of class B, tho chosen by the banks and tho they may be stockholders,
shall not be officers of any bank, and shall at the time of their
election be actively engaged within the district in commerce,
agriculture, or some other industrial pursuit. Directors in class
C are appointed by the Federal Reserve Board, one of them being
designated as chairman of the board of directors and as Federal
reserve agent. They represent the public particularly, and may not be
stockholders of any bank.

Any Federal reserve bank may:

a. Receive deposits from member banks and from the United States.

b. Discount upon the indorsement of any of its member banks negotiable
papers, with maturity not more than ninety days, that have arisen
out of actual business transactions, but not drawn for the purpose of
trading in stock and other investment securities.

c. Purchase in the open market anywhere various kinds of negotiable
paper.

d. Deal anywhere in gold coin and bullion.

e. Buy and sell anywhere bills, notes, revenue bonds, and warrants of
the states and subdivisions in the continental United States.

f. Fix the rate of discount it shall charge on each class of paper
(subject to review by the Federal Reserve Board).

g. Establish accounts with other Federal reserve banks and with banks
in foreign countries or establish foreign branches.

h. Apply to the Federal Reserve Board for Federal reserve notes to be
issued in the manner below indicated.

Sec. 4. #Federal reserve notes#. In 1914 there were outstanding about
$750,000,000 of what we may now call the old-style bank notes
(bond-secured). These were by the new act not forcibly retired at
once; but, as the law is shaped, they probably will be retired at
the rate of about $25,000,000 a year, and will all disappear from
circulation in thirty years.[5]

Whenever the banks having old-style bank notes outstanding desire to
retire any of their circulating notes, the Federal reserve banks
are required[6] to purchase the bonds in due quota (not to exceed
$25,000,000 in any one year). On the deposit of these bonds with the
Treasurer of the United States, the Federal reserve banks may receive
other c