approval of the Board establish
foreign branches, and one not situated in a central reserve city may
loan on farm lands for a term not longer than five years, but not to
exceed one third of its time deposits or 25 per cent of its capital
and surplus. National banks may now be granted permission by the board
to act as trustee, executor, administrator, or registrar of stocks and
bonds, thus having the rights that have proved in many cases to be of
advantage to trust companies organized under state laws.

Sec. 10. #Operation of the Act#. It was fortunate that this act was
nearly ready to be put into operation when, August 1, 1914, the great
European war broke out. The able appointees to the Federal Reserve
Board commanded the confidence of the bankers and of the public. The
knowledge that the reserve banks would early begin operations was
reassuring during the grave financial stress of the next three months,
and the opening of the district banks in November, 1914, at once made
possible the release for commercial uses of cash reserves and
credits to meet the needs of reviving business.[11] Only an extended
experience can show how this enormous new banking organization will
operate as a whole and in its details.

Because of the very wide discretionary powers given to the board
in the administration of the act much depends on the character and
ability of the members of the board as well as on a sound public
opinion that will keep this great power from use in partisan and
selfish ways. No doubt amendments of the act will appear necessary,
but there can be no question that the Federal Reserve Act has
inaugurated a new epoch in the banking and financial history of our
country.[12]

[Footnote 1: See ch. 8, sec. 1.]

[Footnote 2: The law provided that an organization committee should
designate not less than eight nor more than twelve cities as Federal
reserve cities and should divide the continental United States,
excluding Alaska, into districts each containing one such city. Twelve
districts were designated. Wherever, therefore, the act speaks of "not
less than eight nor more than twelve," or of "as many as there are
Federal reserve districts," we may, for convenience, speak of twelve.]

[Footnote 3: On agreeing to comply with reserve and capital
requirements of national banks and to submit to Federal examination.]

[Footnote 4: Except that until the surplus of any reserve bank amounts
to 40 per cent of its paid-in capi