Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-09-20

J. X
s~UB-TREAsURY ABOLISHED

connected by a private telegraph sys-
tenn which keeps them In constant
touch. Through this system, the New
York bank in 1921 transferred by tel
egraph 1920, 100000 in government
funds. Government bonds and notes
were converted and exchanged to the
extent of $5,639,0O0,000 and treasury
certificates of indebtedness and short
term notes were sold by this bank to
the extent of S1,4S1, 100000.
All this, in addition TO many other
routine services, was performed for the
government at a cost of S573,74S, a
negligible item in comparison with
what it would have cost the treasury
to handle this vast volume of business
direct.
Bullion Now In Treasury
All of the banking functions of the
old sub-treasuries now have been taken
over by the reserve banks and the for
mer have been wholly abolished. But
one function was omitted and that not
of an active banking nature. This
consisted of the storage of the metallic
reserves of the treasury,-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 1t reposes
in the vaults there.
To transact this enormous banking
business the federal reserve banks re-
Quire 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 wal was at it's height
the federal reserve bank of New York
alone had . staff of more than 5000
avn nal oont,nanI -anfnI
\ great new structure now is under
construction for the New York bank.
1t is to cost in the neighborhood of
S15,000,000 and probably will be the
biggest bank building in the world.
Other federal reserve banks, including
some of the branches, have buildings
under construction. They are all be-
ing equipped with the most modern
machinery and appliances for the hand
ling of the great volume of the govern
ment's banking business, in addition to
the even greater volume Of private
business.
During the last year there has been
some criticism of the federal reserve
banks for erecting building of a costly
nature at a period of depression, but
this disappeared in the face of appeals
to give employment to the many who
have been out of work. Also it was
shown that the cost of the buildings
is coming wholly from surplus accounts
set aside some time ago in anticipation
of the time when the expansion of
the banks business would require
larger quarters.
However. no federal reserve bank
can erect a building for itself or any
branch which costs in excess of $780,
900 without express permission of con-
gress. So far no difficulty has been
experienced In obtaining this permits
! sion when it is asked for because it
has been shown that the volume of
business done by the banks is so large
as to make new space imperative.
The federal reserve banks do not
deprive other banks of deposits of gov
eminent money while acting as fiscal
agents. When taxes are paid or gov
eminent securities purchased, the
funds are left on deposit in the private
banks until such time as the treasury
requires them for use in meeting the
national payroll or for other similar
expenses. Then the funds are drawn
out by the federal reserve banks and
held at the instant disposition of the
treasury of the United States. This
involves a large amount of bookkeep-
ing which is done by the federal re-
serve banks.
In summary. these institutions per-
form the functions of a private secre-
tary, financial manager, messenger and
several other agencies for the United
States, simplifying the whole financial
machinery of the government.