The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1922-09-20
BY FREDERICK j. HAskIN


The federal reserve banks have COM
pleted the taking over of the functions
of the sub-treasuries of the United
States and the independent treasury
has become a thing of the past. The
federal reserve act authorizes the fed
eral reserve banks to act as fiscal
agents of the United States and they
have been able to handle this business
so thoroughly that the abolition of the
sub-treasuries has been made possible.
The sub-treasuries were created in
1916 following the long series of diff
culties which Andrew Jackson and 9th
er officials of the early government
had with the banks of the United
States. They were branches of the
treasury at Washington and were de-
signed to handle government business
in various parts of the country. The
sub-treasuries were located at strate-
gle points geographically.
With the growth of the banking bust
ness in the United States it was found
that the system set up in 1916 did not
answer the demands of modern com
merce. The federal reserve banks
which are quasi-governmental organi.
cations, did not meet this demand, so
the change was made.
These twelve great banks are direct
agents of the government and, their
twenty-three branches, render a ser.
vice which is declared to be superior
to that possible through the old sub
treasures.
Under general power furnished by
the secretary Of the treasury, the fed
eral reserve banks may accept govern.
ment revenues and hold them on de-
posit, pay checks, and warrants of the
treasury. redeem bond note coupons
and conduct a general banking agency
business for the federal treasury. Any
/ government check or warrant, no mat
| ter where drawn, may be presented to
| any federal reserve bank or any one
/ of the branches for payment and pay
ment will be made as readily as if the
check were presented at the treasury
of the United States.
War Business
! In Bonds.
The federal reserve banks got deep
ly into this government banking bust
ness during the war. As fiscal agents,
they handled a large part of all the
selling of the Liberty bonds and Vic
| tory notes. This service was not con-
fined to the actual banking alone, The
federal reserve banks were the head
quarters for the publicity campaigns
! which assisted in placing the securi,
ties.
The magnitude of this business is
shown by the figures. During the war
! the federal reserve banks handled the
| subscriptions and payments, distribut-
ed the bonds and kept the accounts of
an aggregate of $21, 1000, 900, 900 repre-
scented by more than 63,000,000 sub
scriptions. During and since the war,
the federal reserve banks also handled
for the treasury the short term Sc
i curitieS known as treasury certificates
of Indebtedness. The sale and distri-
button of $50, 900, 900, 900 of these were
handled and the subsequent redemp-
ton of $32,000,O00,0 900.
There is vast amount of detail in
performing this sort of work and treas
ury officials and bankers agree that if
the task had fallen on the old sub
treasures they would have been
! swamped.
i The federal reserve bank of New
York is the greatest of the twelve
banks. In fact in many respects it is
as great as all the other eleven put
together in that it does about half of
the federal reserve banking of the en-.
tire country. An indication of the bulk
of the federal reserve bank operations
is furnished by some of the figures for
the New York bank For the year
1921, that bank handled government
checks to the amount of 81, 638, 0O0,.