The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-09-20
Frederick Haskin' S | etter'
SUB.TREASURIES ABOLISHED
- ouiiuunsulllD Q - 49,

TEN, the New York bank in 1921
transferred by telegraph 1920.
000, 900 In government funds. Gov.
eminent bonds and notes were coz
verted and exchanged to the ex.
tent of $5,639, 100000 and treasury
certificates of Indebtedness and
short term notes were sold by this
bank to the extent of $1,48l, 000.-
900.
All this. in addition to MANY
other routine services. was per-
formed for the government At a
cost of $572,74S, a negligible item
in comparison with what it Would
have cost the treasury to handle
this vast volume of business d.
rect.
Bullion Now In Treasury.
All of the banking functions Of
tae old sub-treasuries now have
been taken over by the reserve
banks and the former have been
wholly abolished. But one func-
ton was omitted and that not Of
an active banking nature. This
consisted of the storage Of the ME.
tallic reserve of the treasury-the
gold and silver security for the cn-
culating notes of the United States.
| This coin and bullion was trans.
! ferred directly to the treasury at
Washington and it reposes in the
vaults there.
To transact this enormous bank
| ing business the federal reserve
/ banks require capacious quarters
and large working forces. The
work is not so heavy as during the
! war. but it is heavier than it was in
the days when the old sub-treasury
system was in use. When the war
was at its height the federal re-
serve bank of New York alone had
a staff of more than three thou
sand employees and occupied rent
ed quarters. A great new struc-i
ture now is under construction for
:, the New York bank. 1t is to cost
in the neighborhood of $4,000, 600
and probably will be the biggest
bank building in the world. Othe,
federal reserve banks, including
! some Of the branches, have build
iings under construction. They are
all being equipped with the most
modern machinery and appliances
I for the handling of the great yols
ume of the governments banking
business. in addition to the even
greater volume of private BUSH
ness.
| During the last year there has
been some criticism of the federal
reserve banks for erecting build
ings Of a costly nature at period
of depression but this disappeared
in the face of appeals to give en-
ployment Of the many who have
been out of work. Also it was shown
that the cost of the building is
, coming wholly from surplus &C.
!; counts set aside some time ago in
anticipation of the time when the
expansion of the banks business
, would require larger quarters.
4 However, no federal reserve
bank can erect q building for itseli
;. or any branch which costs in ex
| cess of $250,0O0 without expires:
: permission Of congress. So far NJ
difficulty has been experienced il
, obtaining this permission when i
is asked for because it has beer
: shown that the volume of bushes!
: done by the banks is so large as Il
make new space imperative.
4. The federal reserve banks dt
!, mot deprive other banks of de
J posts Of government money while
, acting as fiscal agents. When take!
| are paid or government securities
purchased, the funds are left on de
f post in the private banks unit
, such time as the treasury require!
t them for use in meeting the ma
t tional payroll or for other simiial
t expenses. Then the funds arr
f drawn out by the federal reserve
I banks and held at the instant dis
e position of the treasurer of tn
Y United States. This involves
v large amount of bookkeeping which
t is done by the federal reserv
s banks.
e In summary, these institution
8 perform the functions of a privat
: secretary, financial manager, mes
q senger and several other agencie
! for the United States, simplifying
n the whole financial machinery o
! the government.