The purpose of the Federal Reserve Act was to establish the current Federal Reserve System. The act helped to create the central banking system, which is in charge of monetary stability.
The Federal Reserve Act of 1913 was signed into law by President Woodrow Wilson. Before 1913, economic panic was commonplace. Investors were not sure whether or not their deposits were safe. The Federal Reserve Act gave the Federal Reserve banks the right to print money, which led to economic stability.
The Federal Reserve also was given the power to buy and sell treasuries and influence credit and money conditions. This power helped to stabilize prices and make full employment more likely for larger shares of the population. The act also gave banks permission to loan money to farmers to buy land.
As a result of the act, 12 Federal Reserve Banks were established. Each bank had a board of directors and boundaries. The Federal Reserve Board was established to oversee the banks. The board had seven members who were appointed by the president. Each appointee had to be confirmed by the Senate.
The board underwent restructuring in 1935. The restructure led to the addition of more members and adjustments to their responsibilities.