[Audio tour #819] On November 16, 1914, Secretary of the Treasury William G. McAdoo wrote a letter to all the member banks of the Federal Reserve System notifying them that “in accordance with Section 19 [of the Federal Reserve Act], you are hereby notified that said bank has been established and opened for business and that the reserve requirements…from and after this date, become effective.” This letter marks a seminal moment in Federal Reserve history. Years of tireless work had finally paid off and the Federal Reserve’s long history of public service had officially begun. Any state-chartered bank was able to become a member of the Federal Reserve System, but with the benefits of the membership came capital requirements and an agreement to be under the supervisory authority of the Federal Reserve System. Today, more than one-third of US commercial banks are members of the Federal Reserve System. National banks must be members, while state chartered banks may join by meeting certain requirements.
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