The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-09-21
TOPEKA STATE JOURNAL
Information Bureau
suB-TREAsURIEs ABOLISHED.
FREDERIC }. HASKIN, Dizectoz
washington, d. Q.

federal reserve banks completed the
taking over of the functions of the
sub-treasuries of the United States
and the Independent treasury has be-
come a thing of the past. The federal
reserve act authorizes the federal re-
serve banks to act as fiscal agents of
the United States and they have been
able to handle this business so thoroly
/ that the abolition of the sub-treas-
uries has been made possible.
The sub-treasuries were created in
l1s46 following the long series of diff
IficuIties which Andrew jackson and
| other officials of the early government
| had with the Bank of the United
Sta es. They were branches of the
| ire. sury at Washington and were de-
in various part of the country. The
sub treasures were located at strategic
| points geographically.
With the growth of the banking
business in the United States it was
| found that the system set up in 1916
did not answer the demands of mod
| ern commerce. The federal reserve
banks which. are quasi-governmentaf
! orga nizations, did meet this demand,
so the change was made.
| These twelve great banks are direct
| agents of the government and, with
| their tWenty-three branches, render
service which is declared to be SUI
perior to that possible thru the old
| sub treasures
| Under a general power furnished by
the secretary of the treasury, the Fed
eraI Reserve banks may accept gov
eminent revenues and hold them on
deposit pay checks. and warrants of
the treasury, redeem bond and note
coupons and conduct a general bank
ling agency business for the 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
sented at the treasury of the United
States.
| War Business 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
We're the headquarters for the pub
licity campaigns which assisted in
placing the securities.
| The magnitude of this business is
shown by the figures. During the war
| the Federal Reserve banks handled
| the subscriptions and payments, dis
tributed the bonds and kept the ac-
counts of an aggregate of S21 ,000,-
000,00 subscriptions. During and
since the war, the Federal Reserve
banks also handled for the treasury
the short term securities known as
treasury certificates of Indebtedness,
| The sale and distribution of $685.
900, 100000 of these were handled and
the subsequent redemption of $32,-
900. 600, OoS.
There is a vast amount of detail in
performing this sort of work and
Il. l..
that if the task had fallen on the old
sub treasures they would have been
lswan1psd. 49,
| 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
| 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
S1,63S, 100000. The twelve Federal
| Reserve Banks, their twenty three
branches and the Treasury and Fed
eral Reserve Board at Washington are
| all connected by a private telegraph
system which keeps them in constant
| touch. Thru this system, the New
York bank in 1921, transferred by
telegraph $1,220.00O,o00 in Govern
ment funds. Government bonds and
notes were converted and exchanged
! to the extent of $3.50, 100000 and
Treasury certificates of indebtedness
| and short term notes were sold by this.
| bank to the extent of S1,4S1,000,000.
All this. in addition to many other
1 routine services, was performed for
| the Government at cost of $572,74s,
a negligible item in comparison with
what it would have cost the Treasury
| to handle this vast volume of bust
ness direct.
Bullion Now In Treasury.
! All of the banking functions of the
! old Sub Treasures now have been
| taken over by the Reserve Banks and
! the former have been wholly abof-
| ished-- But one function was omitted
| and that not of an active banking ma
| ture. This consisted of the storage
| of the metallic reserves of the Treas
| ury-the gold and silver security for
| the circulating notes of the United
| States. This coin and bullion was
| transferred directly to the Treasury at
! Washington and it reposes in the
| vaults there.
To transact this enormous banking
! business the Federal Reserve banks
require capacious quarters and large
working forces. The work is not 50
heavy as during the war, but it is
heavier than it was in the days when
| the old suhtreasury system was in
use. When the war was at its height
the Federal Reserve bank of New
York alone had a staff of more than
| three thousand employees and occupied
rented quarters. A great new struc-
| ture now is under construction for
the New York bank. 1t is to cost in
the neighborhood of 5000, 600 and
probably will be the biggest bank
\ building IN the world. Other Federal
Reserve banks, including some of the
branches, have. buildings under con-
struction. They are all being equipped
with the most modern ma chinery and
appliances for the handbag of the
great volume of the governments
banking business. in addition to the
even greater volume of private bust
ness.
| During the last year there has been
some criticism of the Federal Reserve
banks for erecting buildings of cost
| ly nature at a period of depression,
[ hut this disa rad in the face If