A Social Choice Analysis of the Selection of Federal Reserve Bank Cities

(Pages: 30-36)

Jac C. Heckelman*

Wake Forest University, 205 Kirby Hall, Winston-Salem, NC 27109, USA


The Federal Reserve Act (1913) established the Reserve Board Organization Committee (RBOC) to determine the number and location of Federal Reserve districts and Reserve banks. As part of their information gathering, the RBOC conducted two polls of national banks. One poll requested preferences on up to 12 cities, and the other requested a rank ordering of the top three. We analyze these votes and show that the selected cities are not wholly consistent with either poll. An aggregation based on simple plurality vote sorted by district correctly identifies 11 of the 12 selected cities; the exception being Cleveland’s selection over Pittsburgh. Other aggregation methods analyzed here predict fewer of the selected cities, and we show that any other scoring rule would be inconsistent with at least one of the 12 selections.


Federal Reserve; preference aggregation rules; monetary institutions.