out-of-town branches; it passes on applications of national banks for authority to exercise trust powers or to act in fiduciary capacities; it may grant authority to national banks to establish branches in foreign countries or dependencies or insular possessions of the United States, or to invest in the stock of banks or corporations engaged in international or foreign banking; and it supervises the organization and activities of corporations organized under Federal law to engage in international or foreign banking. Another function of the Board is the operation of a settlement fund, by which balances due to and from the various Federal Reserve Banks arising out of their own transactions or transactions of their member banks or of the United States Government are settled in Washington through telegraphic transfer of funds without physical shipments of currency.

In exercising its supervisory functions over the Federal Reserve banks and member banks, the Board of Governors promulgates regulations, pursuant to authority granted by the law, governing certain of the above-mentioned activities of Federal Reserve banks and member banks. To meet its expenses and to pay the salaries of its members and its employees, the Board makes semiannual assessments upon the Federal Reserve banks in proportion to their capital stock and surplus. The Board keeps a complete record of all action taken by it and by the Federal Open Market Committee on any question of policy, and in the annual report which it makes to the Speaker of the House of Representatives for the information of Congress as required by law, it includes a full account of all such action and also a copy of the records required to be kept in that connection. The Federal Reserve banks are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. There are also in operation 24 branches of the Federal Reserve banks, all of which are located in other cities of the United States. The capital stock of the Federal Reserve banks is entirely owned by the member banks and may not be transferred or hypothecated. Every national bank in existence in the United States at the time of the establishment of the Federal Reserve System was required to subscribe to the capital stock of the Federal Reserve bank of its district in an amount equal to 6 percent of the subscribing bank's paid-up capital and surplus. A like amount of Federal Reserve bank stock must be subscribed for by every national bank in the United States organized since that time and by every State bank or trust company (except mutual savings banks) upon becoming a member of the Federal Reserve System; and, when a member bank increases or decreases its capital or surplus, it is required to alter its holdings of Federal Reserve bank stock in the same proportion. A mutual savings bank which is admitted to membership in the Federal Reserve System must subscribe for Federal Reserve bank stock in an amount equal to six-tenths of 1 per centum of its total deposit liabilities; and thereafter such subscription must be adjusted semiannually on the same percentage basis. One-half of the subscription of each member bank must be fully paid and the remainder is subject to call by the Board of Governors of the Federal Reserve System; but call for payment of the remainder has not been made.

After all necessary expenses of a Federal Reserve bank have been paid or provided for, its stockholding member banks are entitled to receive an annual dividend of 6 percent on the paid-in capital stock, which dividend is cumulative. After these dividend claims have been fully met, the net earnings are paid into the surplus fund of the Federal Reserve bank. In case of liquidation or dissolution of a Federal Reserve bank, any surplus remaining after payment of all debts, dividends, and the par value of its capital stock becomes the property of the United States Government. Federal Reserve banks are exempt from Federal, State, and local taxation, except taxes upon real estate.

The board of directors of each Federal Reserve bank is composed of nine members, equally divided into three classes, designated class A, class B, and class C. Directors of class A are representative of the stockholding member banks. Directors of class B must be actively engaged in their district in commerce, agriculture, or some other industrial pursuit, and may not be officers, directors, or employees of any bank. Class C directors may not be officers, directors, employees, or stockholders of any bank. The six class A and B directors are elected by the stockholding member banks, while the Board of Governors of the Federal Reserve System appoints the three class C directors. The term of office of each director is 3 years, so arranged that the term of one director of each class expires each year.

One of the class C directors appointed by the Board of Governors is designated as chairman of the board of directors of the Federal Reserve bank and as Federal Reserve agent, and in the latter capacity he is required to maintain a local office

of the Board of Governors on the premises of the Federal Reserve bank. Another class C director is appointed by the Board of Governors as deputy chairman.

Each Federal Reserve bank has as its chief executive officer a president appointed for a term of 5 years by its board of directors with the approval of the Board of Governors of the Federal Reserve System. There is also a first vice president appointed in the same manner and for the same term.

Federal Reserve banks are authorized, among other things, to receive and hold on deposit the reserve balances of member banks; to issue Federal Reserve notes; to discount for their member banks notes, drafts, bills of exchange, and bankers' acceptances of short maturities arising out of commercial, industrial, or agricultural transactions, and short-term paper secured by obligations of the United States; to make advances to their member banks upon their promissory notes for periods not exceeding 90 days upon the security of paper eligible for discount or purchase or upon direct obligations of the United States, and for periods not exceeding 15 days upon certain other securities; to make advances upon security satisfactory to the Federal Reserve banks to member banks for periods not exceeding 4 months at a rate of interest at least one-half of 1 percent higher than that applicable to discounts and advances of the kinds mentioned above; in certain exceptional circumstances and under certain prescribed conditions, to make advances to groups of member banks; under certain prescribed conditions, to grant credit accommodations to furnish working capital for established industrial or commercial businesses for periods not exceeding 5 years, either through the medium of financing institutions or, in exceptional circumstances, directly to such businesses, and to make commitments with respect to the granting of such accommodations; in unusual and exigent circumstances, when authority has been granted by at least five members of the Board of Governors, to discount for individuals, partnerships, or corporations, under certain prescribed conditions, notes, drafts, and bills of exchange of the kinds and maturities made eligible for discount for member banks; to make advances to individuals, partnerships, or corporations upon their promissory notes secured by direct obligations of the United States for periods not exceeding 90 days; at the direction of the Federal Open Market Committee, to purchase and sell in the open market bankers' acceptances and bills of exchange of the kinds and maturities eligible for discount, obligations of the United States, and certain other securities; to act as clearing houses and as collecting agents for their member banks, and under certain conditions for nonmember banks, in the collection of checks and other instruments; to act as depositaries and fiscal agents of the United States; and to exercise other banking functions specified in the Federal Reserve Act.

Federal Reserve notes are a first and paramount lien on all the assets of the Federal Reserve banks through which they are issued and are also obligations of the United States. They are issued against the security of gold certificates, commercial and agricultural paper discounted or purchased by Federal Reserve banks, and direct obligations of the United States. Every Federal Reserve bank is required to maintain reserves in gold certificates of not less than 25 percent against its Federal Reserve notes in actual circulation and against its deposits.

The Federal Advisory Council acts in an advisory capacity, conferring with the Board of Governors on general business conditions and making recommendations concerning_matters within the Board's jurisdiction and the general affairs of the Federal Reserve System. The Council is composed of 12 members, 1 from each Federal Reserve district being selected annually by the board of directors of the Federal Reserve bank of the district. The Council is required to meet in Washington at least four times each year, and oftener if called by the Board of Governors.

FEDERAL SECURITY AGENCY

As presently constituted the Federal Security Agency consists of the following units: Food and Drug Administration, Office of Education, Office of Vocational Rehabilitation, Public Health Service (including Freedmen's Hospital), Social Security Administration, Bureau of Employees' Compensation, Employees' Compensation Appeals Board, and St. Elizabeths Hospital. The Agency discharges certain duties prescribed by law in connection with the American Printing House for the Blind, Columbia Institution for the Deaf, and Howard University. The Federal Security Agency was created by Executive order of the President, dated April 25, 1939, putting into effect the President's First Plan on Government Reorganization in accordance with the provisions of the Reorganization

Act of 1939. The Federal Security Agency was established to carry out the purposes of this act which were: (1) To reduce expenditures; (2) to increase efficiency; (3) to consolidate agencies according to major purposes; (4) to reduce the number of agencies by consolidating those having similar functions and by abolishing such as may not be necessary; (5) to eliminate overlapping and duplication of effort. Grouped in the Federal Security Agency are those agencies of the Government, the major purposes of which are to promote social and economic security, educational opportunity, and the health of the citizens of the Nation.

The organizations grouped in the Federal Security Agency under the First Plan were the Social Security Board, the United States Employment Service, the Office of Education, the Public Health Service, the National Youth Administration, and the Civilian Conservation Corps. The National Youth Administration and the United States Employment Service were transferred to the War Manpower Commission by Executive Order No. 9247, dated September 17, 1942. The Civilian Conservation Corps and the National Youth Administration are both now substantially liquidated. The Second Plan on Government Reorganization transferred to the Federal Security Agency Government participation in the work of the American Printing House for the Blind. The Fourth Plan on Government Reorganization transferred to the Federal Security Agency the Food and Drug Administration from the Department of Agriculture, and St. Elizabeths Hospital, Freedmen's Hospital, Howard University, and Columbia Institution for the Deaf from the Department of the Interior.

Executive Order No. 9338, dated April 29, 1943, transferred to the Federal Security Agency from the Office for Emergency Management the functions of the Office of Defense Health and Welfare Services. Under this order and a Federal Security Agency order implementing it, the Office of Community War Services and a Committee on Physical Fitness were established as integral parts of the Office of the Administrator, Federal Security Agency. The Committee on Physical Fitness was terminated June 30, 1945. The Office of Community War Service was terminated on June 30, 1946.

Under a Federal Security Agency order dated September 4, 1943, there was established in the Agency an Office of Vocational Rehabilitation to carry out the provisions of the Vocational Rehabilitation Act amendments of 1943.

The President's Second Reorganization Plan, effective July 16, 1946, pursuant to the Reorganization Act of 1945, transferred to the Federal Security Agency the functions of the Employees' Compensation Commission (the Commission being abolished), the Children's Bureau (with the exception of its child labor functions, which remain in the Department of Labor), and the Division of Vital Statistics. It provided for establishment of a board of three persons to make final decisions on appeals from determinations with reference to compensation claims of employees of the Federal Government or the District of Columbia. This plan also abolished the three-member Social Security Board and transferred its functions to the Federal Security Administrator.

Pursuant to provisions of this plan, the Federal Security Administrator established the Bureau of Employees' Compensation and the Employees' Compensation Appeals Board. The Administrator also established the Social Security Administration to carry on the functions formerly discharged by the Social Security Board and the Children's Bureau.

OFFICE OF THE ADMINISTRATOR

The affairs of the Federal Security Agency are under the direction and supervision of the Federal Security Administrator. In addition to an Assistant Federal Security Administrator, the Assistant Administrator for Program, and a small staff of assistants, the Office of the Administrator consists of the following units which aid in the supervision and coordination of the various programs and organizations within the Agency:

OFFICE OF ADMINISTRATION

This office, under the direction of the Executive Assistant to the Administrator and consisting of the divisions listed below, is responsible for the development and establishment of standards and procedures, and for the general direction, coordination, and review of all management functions of the Agency:

Division of Budget and Finance.

Division of Library Services.

Division of Personnel Management.

Division of Service Operations.

Division of Administrative Planning.

OFFICE OF GENERAL COUNSEL

This office, under the direction of the General Counsel, is responsible for the direction and supervision of all legal activities of the Agency.

OFFICE OF RESEARCH

This office, under the Director of Research, is responsible for the general direction and coordination of all research activities of the Agency.

OFFICE OF PUBLICATIONS AND REPORTS

This office, under the Director of Publications and Reports, is responsible for the general direction and coordination of all information activities of the Agency.

OFFICE OF FEDERAL-STATE RELATIONS

This office, under the Director of Federal-State Relations, is responsible for the development and coordination of policies, methods, and procedures concerning Federal-State relations involved in the various grant-in-aid and other programs of the Agency.

OFFICE OF INTER-AGENCY AND INTERNATIONAL RELATIONS

This office, under the Director of Inter-Agency and International Relations, is responsible for the development and coordination of policies concerning relationships of the Agency with other Federal agencies, international agencies, representatives of foreign governments, and organized groups in the fields of health, education, and security.

AMERICAN PRINTING HOUSE FOR THE BLIND

The American Printing House for the Blind, located at Louisville, Ky., assists public institutions in the education of the blind youth of America. The institution receives the revenue from a perpetual trust fund of $250,000 set aside by Congress in 1879, as well as an annual Federal appropriation of $115,000. These funds are used for labor, materials, and other expenses incident to the embossing of books, the recording of talking books, and the manufacture of apparatus for schools for the blind. These are distributed without cost to public institutions for the education of the blind.

BUREAU OF EMPLOYEES' COMPENSATION

The Bureau of Employees' Compensation was created by the Federal Security Administrator under the authority of Reorganization Plan No. 2 of 1946, to perform the functions formerly vested in the United States Employees' Compensation Commission. Such reorganization plan abolished the Commission and transferred its functions to the Administrator of the Federal Security Agency. The Bureau administers workmen's compensation laws providing benefits for civil employees of the United States, and workmen's compensation protection for other employments within the jurisdiction of the Federal Government. Such laws include the Federal Employees' Compensation Act approved September 7, 1916 (5 U. S. C. ch. 5); the Longshoremen's and Harbor Workers' Compensation Act approved March 4, 1927 (33 U. S. C. secs. 901-950); the District of Columbia Workmen's Compensation Law of May 17, 1928 (45 Stat. 600); the act approved August 16, 1941 (Public, No. 208, 77th Cong.); and the act approved December 2, 1942 (Public, No. 784, 77th Cong.).

The benefits provided by the act of September 7, 1916, originally applicable to civil employees of the United States, have subsequently been extended to (a) Employees of the Government of the District of Columbia (except firemen and police). (b) In time of peace to members of the Reserve Corps of the Army, Navy, and Marine Corps, for injuries sustained in line of duty while on active duty or authorized training. (c) The Coast Guard Reserve. (d) Commissioned personnel of the United States Public Health Service. (e) Student nurses in training in Federal hospitals.

The act of September 7, 1916, subject to certain modifications prescribed in the act of February 15, 1934 (5 U. S. C. 796), which limit the circumstances under which compensation benefits may be extended and reduce the scale of such benefits, has been made applicable to (a) Employees of the Civil Works Administration. (b) Enrollees in the Civilian Conservation Corps. (c) Persons employed as employees of the United States on projects financed by the Federal Emergency Relief Appropriation Acts. (d) Certain persons receiving assistance from the National Youth Administration. (e) Persons attached to the work corps estab

lished by the War Relocation Authority and other persons receiving compensation from such Authority for work performed.

The act of September 7, 1916, provides compensation including medical, surgical, and hospital services made necessary by reason of a personal injury sustained while in the performance of duty. In case such injury causes death, compensation is authorized for certain surviving dependents and provision is made for payment of reasonable burial expenses. No benefits may be authorized if the injury is caused by the willful misconduct of the injured person or by his intention to bring about the injury or death of himself or another, or if intoxication of the injured person is the proximate cause of the injury or death.

Compensation under the basic law of September 7, 1916, may be extended to eligible persons for disability or death resulting from an injury by accident or a disease proximately caused by the employment. Persons engaged in employments to which the limitations in the act of February 15, 1934, are applicable may receive benefits only for the effects of a traumatic injury which under a statutory definition is limited to injury by accident. Claims for compensation must be filed within 1 year, but under certain conditions the time limit may be extended in the discretion of the Bureau.

Medical and hospital treatment must be obtained from a United States medical officer or hospital. However, if this is not practicable, treatment must be obtained from a physician or hospital designated by the Bureau of Employees' Compensation. When neither of these is available treatment may be obtained from the nearest physician or hospital.

The monthly compensation for total disability may not be more than $116.66 nor less than $58.33, unless the employee's monthly pay is less than the latter amount, in which case his compensation shall be the full amount of his monthly pay. The minimum rate of $58.33 is not applicable in the case of an employee who is not a citizen of the United States and who is injured outside the continental limits of the United States. Beneficiaries receiving compensation under an award for permanent total disability, which renders them so helpless as to require the constant services of an attendant, may receive additional compensation at a rate not in excess of $50 per month. The maximum monthly compensation for persons employed on work-relief projects was increased from $25 to $30 on June 29, 1937, and to $50 on June 21, 1938. There is no minimum rate applicable to such cases.

Compensation for partial disability is payable at a rate equal to 66% percent of the difference between the employee's monthly pay and his earning capacity after the beginning of such disability. Employees on relief projects are entitled to compensation for partial disability in accordance with a special schedule covering specific injuries. Special provision is made for adjustment of rates in cases of noncitizens outside the United States.

In case of death, compensation is payable to the widow or dependent widower, to children under the age of 18 years, to dependent parents or grandparents, and to other dependents under certain conditions.

Effective January 1, 1947, administration of the Civilian War Benefits program was placed under the Bureau of Employees' Compensation. Authority for continuation of such benefits presently rests upon authorization in annual appropriation acts.

By Executive order the administration of the Compensation Act so far as it relates to Panama Canal employees has been placed under the Governor of the Panama Canal.

The Director of the Bureau is the final authority within the Bureau in the adjudication of claims arising under the Federal Employees' Compensation Act. There is a separate Board of Appeals which functions as an appellate body to hear and decide appeals from the decision of the Director of the Bureau in cases arising under such act.

The Longshoremen's and Harbor Workers' Compensation Act, approved March 4, 1927, covers employees in private industry engaged in maritime employment on the navigable waters of the United States (including drydocks) who sustain injury or death arising out of, and in course of, employment. These employees are mostly longshoremen and men engaged in repair work on vessels. It does not include the master or members of the crews of vessels, nor persons engaged by the master to load or unload or repair vessels under 18 tons. The compensation features of the act were effective July 1, 1927. Compensation is paid by the employer and the cost of administration by the United States.

Ön and after July 1, 1927, every employer having employees coming under the provisions of the act is required to secure payment of compensation by insurance