The Formation and Role of our Federal Reserve System

[WoodenJefferson]

The Federal Reserve Act was passed by Congress in 1913, establishing the Federal Reserve as an independent central bank. The Federal Reserve system is made up of 12 Federal Reserve Districts throughout the United States. They are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City , Dallas, and San Francisco.

 

Additionally, there are Branches of Reserve Banks in 25 other cities (listed).

 

The Federal Reserve is charged with ensuring that enough currency and coin are in circulation to meet the publics demand. New coins are shipped from the Philadelphia and Denver Mints to Federal Reserve Banks and Branches across the United States where the money is stored. When additional coins are needed, the Federal Reserve fills orders placed by local banks or bank delivery companies.

Banks have reserve funds on deposit at the Federal Reserve. As orders for additional currency and coins are received, these funds are reduced by the amount of the order.

 

When the same denomination of coinage is produced at both mints, the Denver Mint will supply coins for the Federal Reserve Banks closest to them. While the Philadelphia Mint will supply coinage on the other side of the country.

 

If there is a shortage of cents in the eastern states, coins will be shipped from the Denver Mint to help supply the demand. Also, if a coin is only struck in the Philadelphia Mint, coins will be shipped to all the Federal Reserve Banks from the Philadelphia Mint.

 

SAN FRANCISCO Los Angeles, Portland, Salt Lake City, Seattle Mark

DALLAS El Paso, Houston, San Antonio

KANSAS CITY Denver, Oklahoma City, Omaha

MINNEAPOLIS Helena

ST. LOUIS Little Rock, Louisville, Memphis

ATLANTA Birmingham, Jacksonville, Miami, Nashville, New Orleans

CHICAGO Detroit

BOSTON

NEW YORK Buffalo

PHILADELPHIA

CLEVELAND Cincinnati, Pittsburgh

RICHMOND Baltimore, Charlotte

 

I was always intruged that Kansas City landed one of the top 12 spots and Denver is only a Branch Reserve (Politics?)

[Zoins]

How big of an impact do the Federal Reserve Districts have on coin collectors? I always thought it was cool that the individual bank was listed on US paper currency but when I looked just now I realized that it's no longer listed on the ultramodern bills. Kind of a sad loss IMO.

[DC Dawg]

The Fed distributes coins it purchases from the Mint and distributes them to member banks which distributes them into commerce through teller and other banking operations.

 

There is an article in January 2007 Coinage that said with the 50 State Quarters program, the Fed has been using a last in, first out method for distributing coins so that the most recent quarters are circulated. This was a change from the original first-in, first-out policy the Fed had prior to 1999. It was said that there may be many bags of the early quarters, which had high mintages stored in the Fed's various currency vaults. It was reported that the Cleveland Fed had an oversupply of coins for a while!

 

Currently, the Fed acknowledges that there is a glut of early 50 State Quarters (Delaware and Virginia are in the highest supply), Kennedy halves, and Sac Dollars. Halves and dollars circulate a lot in gaming areas and New York (?) but not to the degree as in the past. When congress authorized the "small dollar" (the SBA Dollar), casinos did not like it because the large dollar (Ike) worked in their machines. So the casinos started to commission tokens the size of Eisenhower dollars to use in gaming machines, reducing the need for the small dollars. That is one of the reason there were no dollars minted for circulation 1981-1999.

 

The Presidential $1 Coin Program will cause a larger supply of Sac dollars to be accumulated in the Fed's vaults since the law requires Sac Dollars to be minted in the amount of 1/3 of the total of Presidential Dollars. When the Mint sells the new dollars to the fed, the bags of Sac dollars will pile up in the Fed's vaults with the 2001 and 2002 bags that are already there!

 

Unless you live in a district with a high turnover of coins (e.g., New York, San Francisco, Las Vegas), this does not help the change hunter. The last-in, first-out policy means that newer coins will be placed in circulation before older coins. Older coins, are becoming buried in the currency vaults under bags of new coins. This will continue through the Presidential Dollar program and the upcoming Lincoln Cent issues in 2009.

 

Scott

[RWB]

Well, maybe they'll find the "missing" bags of 1895-P dollars sitting behind sombody's lunch box....

[cladking]

How big of an impact do the Federal Reserve Districts have on coin collectors? I always thought it was cool that the individual bank was listed on US paper currency but when I looked just now I realized that it's no longer listed on the ultramodern bills. Kind of a sad loss IMO.

 

 

There is a letter/number code on the new bills under the serial number that corresponds to the federal reserve branch. I didn't notice if the new sawbuck has it or not.

[WoodenJefferson]

Well, maybe they'll find the "missing" bags of 1895-P dollars sitting behind sombody's lunch box....

 

And if they were having "egg salad" sandwhiches for that day, they will be nice and NT'ed!