Perth Amboy evening news., 1922-09-19
ENDED
RY FEDERAL RESERVE
Daily Letter by Frederic !. Haskin

WASHINGTON. Sept. 1.-THE fed
erai reserve banks have completed
the taking over of the functions OF
the sub-treasuries OF the United
States and the independent treas
ury has become a thing of the past.
The federal reserve act authorizes
the federal reserve banks to act as
fiscal agents Of the United States
and they have been able to handle
this business SO thoroughly hat the
abolition of the sub-treasuries has
been made possible.
The s~ub-treasuries were created
in 1876 following the long series of
difficulties which Andrew Jackson
and other officials of the early gov
eminent had with the Bark Of the
United States. They were branches
of the Treasury at Washington and
were designated to handle govern
ment business in various parts OF The
country. The sub-treasuries were
located at strategic points geo
graphically.
With the growth of the banking
business in the United States it was
found hat the system set UP in 1916
did not answer the demands of med
| ern commerce. The Federal Reserve
Banks which are quasi-governmen:al
organizations, did meet this demaGd,
SO the change was made
These twelve great banks are CT
rect agents of the government with
their twenty-three branches. render
a service which is declared to be su-
perior to that possible through the
old sub-treasuries.
Under a general power furnished
by the Secretary Of the Treasury, the
Federal Reserve Banks may accept
government revenue and hold tn IN
on deposit, pay checks, and warrants
Of the Treasury, redeem bond and
note coupons and conduct a general
banking agency business for tae
Federal Treasury. Any government
check or warrant, no matter where
drawn, may be presented - to any
Federal Reserve Bank or any one
Of the branches for payment and
payment will be made as readily IS
il the check were presented at the
Treasury of the United States.
War Business III BOnds
The Federal reserve Banks sot
deeply into this government ahk
ing business during the war. as
fiscal agents, they handled a large
part Of all the selling of the Liberty
Bonds and Victory Notes. This serv-
ice was no confined to the actual
banking alone. The Federal Re
serve Banks were the headquarters
for the publicity campaigns which
assisted in placing the securities,
The magnitude OF his business is
shown by the figures. During ne
war the Federal reserve Banks han
died the subscriptions and payments
distributed the bonds and kept tee
accounts of an aggregate of S2l,0Vo,-
OOO, 900 represented by more thar
G. 100000 subscriptions. During
and since the war, the Federal Re-
serve Banks also handled for the
Treasury the short term securities
known as Treasury certificates of in
cebtedness. The sale and dlstrlbu-
ton of S36. 000, 100000 of these ere
handled and the subsequent redemr-
ton OF $32. 900, 900. 1000.
There is a vast amount of detail
in performing this sort of work M
Treasury officials and bankers agree
that il the task had fallen on the
old sub~-treasuries they would have
been swamped.
New York is the greatest OF the
twelve banks. In fact In many re-
srects It is as great as all the other
eleven put together in that 1t does
about halt of the Federal Reserve
banking of the entire country. An
indication of the bulk of the tedera
Reserve Bank operations is furnish
ed nv some of the figures for ;he
New York bank. For the year l92l
that bank handled government
lckecks to the amount OF $!,6Ss,ooo''
600. The twelve Federal Reserve
Banks, their twenty-three branches
and the Treasury and Federal Re'
serve Board at Washington are al
lconnected by private telegraph sys,
tenn which keeps them in constant
touch. Through this system. ths
New York bank in 1921 transfer
red by telegraph $1,220.00O,000 IL
~lgovernment funds. Governmen
bonds and notes were converted an
Exchanged to the extent OF $3.50
000, 900 and Treasury certificates O.
Indebtedness and short term notes
were sold nv this bank to the extent
OF S1,4S1,0 900 900.
All this. in addition to many Other
routine services, was performed fol
the government at a cost of S5i2.-
74S. a negligible item in comparison
with what it would have cost tlt
Treasury to handle this vast volume
Of business direct.