The Federal Reserve Act required all <u>national</u> banks to become members of the Federal Reserve System, while <u>state</u> banks could choose to become members of the system.
<h3><u>Explanation:</u></h3>In 1913 an act was introduced under the command of Federal government. The act required all national and state banks to become members or to get merge into the Federal Reserve System. This act was known as the Federal Reserve Act. According to this act all the active national and state banks have choices to become members.
President Woodrow Wilson signed the Federal Reserve act on December 23, 1913. The United States Congress passed the law in the supremacy of President Woodrow Wilson. The Federal Reserve System was created and developed because of the Federal Reserve act which also affected the central banking system of the United States US.
The Act was introduced to provide the establishment and foundation to the Federal Reserve banks. It also furnished the elastic currency of the federal corporation, which refers to discounting the use of commercial paper. It established an effective supervision for banking business world in the United States.