alleryStart learning →How did the Federal Reserve Act of December 23, 1913, organise the banking system?
ATwelve districts, each with a Reserve Bank
BTwenty districts, each with a Reserve Bank
COne central bank in the national capital
DTwelve districts sharing one Reserve Bank
Answer & Solution
Correct answer: A. Twelve districts, each with a Reserve Bank
1. 1. The country was divided into 12 districts.
2. 2. Each district was given a Federal Reserve Bank of its own.
3. 3. All of them were supervised by a single Federal Reserve Board.
4. 4. Those banks held the cash reserves of the member banks that joined the system.
5. 5. Federal reserve notes could be issued to meet business demands, which gave the money supply flexibility.
6. 6. A single central bank is exactly the arrangement the twelve districts replaced.
_Source: An Outline of American History (U.S. Information Agency, 1990, public domain), section ROOSEVELT ACTS TO SAVE RESOURCES_
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