WORK OF THE BOARD. During the month of January the Federal Reserve Board has continued the preparation of its annual report to Congress, and has compiled full data regarding the work of the several Federal Reserve Banks during the past year. These data will be embodied in appendices supplementary to the annual report, which is now practically ready for publication. Selection of additional class C directors, in order to complete the directorates of the several banks, has also been necessary, there being a number of vacancies not filled at the close of December, some having also occurred since that date. The directorates are now complete for

the

year 1916, except in so far as future vacancies not now foreseen may occur. Elsewhere in this issue is furnished a complete list of the new class C directors. It has been determined that henceforward Federal Reserve Agents and deputy Federal Reserve Agents shall be designated as such from year to year, their terms as directors being three years under the statute, but their designation in their official capacity being made from year to year, thereby affording greater flexibility and latitude, and securing more effective service in cases where vacancies occur before the expiration of a given term. In the same way it has been arranged that Federal Reserve Banks shall annually submit to the Board schedules of their staffs and salaries for approval, thereby placing members of such staffs practically upon a basis of appointment for terms not to exceed one year. The understanding is that within the year's period thus fixed the officers and employees of the banks shall hold office subject to the pleasure of the several boards of directors, but that the confirmation of the staffs, with their salaries, by the Federal Reserve Board, shall occur annually. This, of course, would be a pro forma matter so far as regards the ordinary routine or administrative appointments. Paralleling this decision, the Board

No. 2

has voted that it will annually consider and confirm the salaries of national bank examiners, making report of the same to Congress each year, under the terms of the Federal Reserve Act, such determination being considered to be a compliance with the spirit of the law regarding the examination staff.

As a result of the resolutions passed by the Board during the month of January, changes have occurred in the Federal Advisory Council,

the Governors of Federal Reserve Banks who

were formerly members of that body having been replaced by other representatives elected by their respective boards of directors. In addition to the changes thus necessitated, one or two other changes of personnel have also occurred in the Advisory Council. Due to the delay incidental to effecting these changes and giving the usual notice thereof, the Advisory Council determined to defer its regular statutory meeting, which would otherwise have occurred on January 19, until February 15.

During the past month many inquiries have been received with respect to the question of refunding outstanding United States 2 per cent bonds bearing the circulation privilege into 3 per cent bonds. Numerous applications have been received from member banks desirous of converting at par under the $25,000,000 limit provided under section 18 of the Federal Reserve Act, while Federal Reserve Banks have presented plans for the exchange and steady conversion of the bonds in question. The fact that the subject had thus presented itself in practical form led to a reopening of the matter, and the Treasury Department has for the past few weeks given detailed legal and financial investigation to the whole problem. The situation has also been carefully discussed by the Board itself, and it is expected that within a very short time the details of the policy to be pursued in regard to this refunding, both in so far as affects the Treasury Department and the Board as well, will be made known.