Evolution Of The Federal Reserve

To understand and appreciate the importance and the various functions of the Federal Reserve banks, it is necessary to look back to the last century when the nation's sixteen hundred banks were issuing about ten thousand different kinds of bank notes, which then served as currency. Some notes were good, some worth but half the amount printed on them, and many were worthless. Counterfeit bills were easily printed and passed freely. After a wave of bank closings caused thousands of Americans to lose their savings in 1857, busi¬nessmen and even astute bankers were unable to determine which bank notes were good and which were worthless or counterfeit. The situation became so unwieldy that in 1863 Congress passed an act creating a national currency. Thereafter national banks chartered by the government were permitted to issue paper money only if their bank notes were backcd by federal bonds that had been deposited with the Treasurer of the United States. Three years later, a tax on all notes issued by state banks forced them to stop printing their own money and obtain national charters. At last the country had sound currency. But this step by itself was not enough.

The Federal Reserve Bank

If you were planning a field trip to Washington DC, which sites would you choose to visit? If you're like most tourists who visit our nation's capital, the White House, the Lincoln Memorial, the Wash­ington Monument, and the Smithsonian Institution would be tops on your list. However, there is another site most people don't consider when traveling to Washington DC. That site is our country's central bank, the Federal Reserve Building, which sits back a distance on Constitution Avenue. The building is made of white Georgia marble and stands three stories high. The main entrance is guarded by an American eagle, the windows are framed in bronze, and the inside marble hallways lead to various meeting rooms and offices used by the governors who head the Federal Reserve System.

Behind The Scenes Of Banking Career

Since banks come in all sizes and differ greatly in the ways they conduct their business, the departments mentioned here, though typical of those you will find in most institutions, may vary greatly with regard to their names, sizes, and functions.

Full-Service Banking

Consider for a moment some of the other services that banks of­fer their customers, many of which require a separate department or group of employees. Full-service is an enticing phrase that some smart banker invented and that gasoline stations copied. To­day the public takes a full-service bank for granted, but just what full-service really means we leave to your imagination. Probably it is what many banks have been offering as normal services for years. At any rate, here are some of the principal services banks make available to their customers. 

At Work With Bankers

How do you define the word bank? If you were like most of us, you probably would say a bank is a large room with a long counter that has tellers standing behind it giving out and receiving money. On one end of the banking floor you may visualize various women and men occupying large polished desks. Usually these employees deal with the bank's clients. Some of their responsibilities may in­clude establishing the rental of a safe deposit box, describing the bank's possible role in setting up a trust, taking care of all docu­ments concerning the consideration and granting of mortgages, discussing loan applications, and opening new accounts. At an­other end of the banking floor, across from those employees seated at the desks, there may be a huge steel door that leads to a safe de­posit vault where customers can rent individual lock boxes to keep jewelry, valuable papers, and other items.