Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-09-20
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pleted the, taking over of the func-
tons of the ~sub-treasuries of the
United States and the Independent
treasury has become a thing of the
past. The Federal reserve act au-
thorizes the Federal 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-treasur-
les has been made possible.
The sub-treasuries were created in
l1S46 following the long series of DIFF
ficulties which Andrew Jackson and
other officials, of the early govern
ment had with the Bank Of the Unit-
ed States. They were branches Of the
treasury at Washington n were de-
signed to handle government business
lin various parts of the country. The
sub-treasuries were located at strate-
gic points geographically.
With the growth of the banking
business in the United States it was
found that the system set up in 1876
did not answer the demands of mod
ern commerce. The Federal Reserve
banks which are quasi-governmental
organizations, did meet this demand,
so the change was made
These twelve great banks are di-
rect agents OF the government and,
with their 'twenty-three| branches.
render a service which. is declared to
be superior to that possible through
the old sub-treasuries.
Under a general power furnished.
by the secretary of the treasury, the
government revenues and hold them
on deposit, pay checks, and warrants
Of the treasury, redeem bond and note
coupons and conduct a general bank
ing agency business for 1.-THE Federal
treasury. Any government check or
warrant, no matter where drawn, may
be presented to any Federal Reserve
bank or ny n of the branches for.
payment and payment will Ebe made
as readily as If the check were pre-
sented- at the treasury of the United
States.
War Busipess in Bonds.
The Federal Reserve banks got
deeply into this government banking
business during the war. AS fiscal
agents, they handled a. large part of
all the selling of the Liberty bonds
and Victory notes. This service was
not confined to the actual banking
alone. The Federal Reserve banks.
were the headquarters for the public
ity campaigns which assisted in plac-
ing the securities. .
The magnitude of this business is
shown by the figures During the
war the Federal Reserve banks har-
died the subscriptions and payments,
distributed h bonds and kept the
accounts of an aggregate of $21, 00O,-
600, 900 represented by than g.
900, 900: subscriptions. -Druing and
since the the Federal Reserve,
banks also handled for the treasury
the short term securities. known as
treasury certificates of indebtedness.
The sale and distribution Of $4,000
600, 900, Of those were handled and the
subsequent redemption Of $32. 000,-
000, 00O.
There is a vast noun of detail
treasury officials and bankers agree
that II the task had fallen on the old
su~b-treasuries they would have been
swamped.
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 1t does about half OF
1.-THE Federal Reserve banking of the
entire country. An indication of the
bulk Of the Federal Reserve bank OPP
erations 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
1858. 100000. The twelve Federal
Reserve banks, their twenty-three
branches and the treasury a~ndifeder-
al reserve board at ,Washinktpn are
all connected by q private telegraph
syetem which keeps them In constant
touch. Through this system, the New
York bank In 1881 transferred by tell
egraph 4l,220,0o0.0 900 In government
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