Editing Federal Reserve Act (section)

== Amendments ==
The Federal Reserve Act was amended in major ways over time, e.g. to account for Hawaii and Alaska's admission to the Union, for restructuring of the Fed's districts, and to specify jurisdictions.<ref>Federal Reserve. [http://www.federalreserve.gov/aboutthefed/section2.htm "Federal Reserve Act, Section 2"]</ref>

=== Monetary expansion in World War I ===
In June 1917 Congress passed major amendments to the Act in order to enable monetary expansion to cover the expected costs of World War I, which the US had just entered in April.  The amendments allowed a more flexible definition of the gold backing the dollar currency in circulation.  This relaxation de facto allowed less gold backing for each dollar note, and enabled the currency in circulation to more than double from $465m to $1247m just from June to December 1917. This reform has been argued to have been necessary to finance the expected $2 billion dollar cost of participating in the war for a year. Price inflation followed.<ref>Raymond Fishe. 1991. [https://www.jstor.org/stable/1992748 The Federal Reserve Amendments of 1917: The Beginning of a Seasonal Note Issue Policy]. ''[[Journal of Money, Credit and Banking]]'' 23:3, Part 1 (Aug., 1991), pp. 308-326. (On jstor]).</ref><ref>[https://fraser.stlouisfed.org/files/docs/publications/FRB/1910s/frb_071917.pdf ''Federal Reserve Bulletin'' 3:7, 1 July 1917].</ref>

=== Charter extension ===
The Federal Reserve Act originally granted a twenty-year charter to the Federal Reserve Banks: "To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law.".<ref>{{cite web|url=https://fraser.stlouisfed.org/title/975 |title=Federal Reserve Act &#124; Title &#124; FRASER &#124; St. Louis Fed |publisher=Fraser.stlouisfed.org |date= |accessdate=2022-07-04}}</ref> This clause was amended on February 25, 1927: "To have succession after the approval of this Act until dissolved by Act of Congress or until forfeiture of franchise for violation of law."<ref>{{cite web|url=https://uscode.house.gov/statviewer.htm?volume=44&page=1234#|title=Sixty-Ninth Congress Sess. II|date=1927|page=1234|website=Uscode.house.gov|access-date=5 July 2022}}</ref> The success of this amendment is notable, as in 1933, the US was in the throes of the [[Great Depression]] and public sentiment with regards to the Federal Reserve System and the banking community in general had significantly deteriorated. Given the political climate, including of [[Franklin D. Roosevelt]]’s administration and [[New Deal]] legislation, it is uncertain whether the Federal Reserve System would have survived.

=== Federal Open Market Committee ===
In 1933, by way of the [[1933 Banking Act|Banking Act of 1933]], the Federal Reserve Act was amended to create the [[Federal Open Market Committee]] (FOMC), which consists of the seven members of the Board of Governors of the Federal Reserve System and five representatives from the Federal Reserve Banks. The FOMC is required to meet at least four times a year (in practice, the FOMC usually meets eight times) and has the power to direct all open-market operations of the Federal Reserve banks.

=== 12 USC § 225a ===
On November 16, 1977, the Federal Reserve Act was [[Amendment|amended]] to require the Board and the FOMC "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."  The Chairman was also required to appear before Congress at semi-annual hearings to report on the conduct of monetary policy, on economic development, and on the prospects for the future. The Federal Reserve Act has been amended by some 200 subsequent laws of Congress. It continues to be one of the principal banking laws of the United States. {{citation needed|date=October 2020}}