The classic method of indirect control is through open-market operations, first widely used in the 1920s and now used daily to make some adjustment to the market. Federal Reserve bank sales or purchases of securities on the open market tend to reduce or increase the size of commercial bank reserves. (When the Federal Reserve sells securities, the purchasers pay for them with checks drawn on their deposits, thereby reducing the reserves of the banks on which the checks are drawn. The three instruments of control explained above have been conceded to be more effective in preventing inflation in times of high economic activity than in bring about revival from a period of depression. Another control occasionally used by the Federal Reserve Board is that of changing the margin requirements involved in the purchase of securities. The Federal Reserve System was founded by Congress in 1913 to provide the nation with a safer, more flexible and more stable monetary and financial system. Over the years its role in banking and the economy has expanded. Today the Federal Reserve's Duties fall into four general areas:Conducting the nation's monetary policy by influencing the money and credit conditions in the economy in pursuit of full employment and stable prices.Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system to protect the credit rights of consumers.Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.Providing certain financial services to the United States government, the public, financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments system. HISTORY OF THE FEDERAL RESERVE Before Congress created the Federal Reserve System, periodic financial panics had plagued the nation. These panics had contributed to many bank failures, business bankruptcies, and general economic downturns.