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FEDERAL RESERVE BOARD
WASHINGTON
X-
March
3351
9, 1922.
SUBJECT: Printing of Federal Reserve Notes.
Dear Sir:
Your attention is invited to the enclosed copy
of a letter received from the Pssistant Secretary of the
Treasury, regarding the printing of li'ederal Reserve notes.
You are re~uested to give the matter careful consideration
and to advi-se the Board just how far your bank can go in
carrying out the suggestions of the Assistant Secretary.
Very truly yours,
GOVF.R~OR
Enclosure.
Chai nnen of e 11 F. R • Banks
Copies to Governors.
-.
r~.
X) ))~t( a)
COPY
'T'R'EIISURY
\-'
DEP,~R'T'MF."'JT
Washington
Dear Governor Harding:
Under date of Pugust 31, 1921, I addressed a
letter to you advising as to the number of employees in the Bureau of
Engraving and Printing engaged in making Federel Reserve Notes, and
st~ted
that in planning a reduction in the Bureau force it would be
helpful to secure from you some gener;:cl estimate as to the
prob~ble
deliveries of Federal Reserve Notes which would be required by .the
Feder~l
Reserve Board. within the period of the next six months.
1l
schedule showing production, delivery from the vault and average daily
delivery from the vault,of Federal Reserve Notes during the months of
July
~md
~ugust,
1)21, and the deliveries for the fiscal years 1919, ·
1920, and 1921 were also submitted.
On September 27, 1921, you replied that shipments
of Federal Reserve Notes to the
bex..~s
a-:c-o·::?;:ed 131,505 sheets and
that in your opinion it was unlikely there would be any decrease in
these figures during the remaining months of the year.
You stated
that during the months of Janua.ry and February, it might 'be possible
that the shipments would decline to about 100,000 or 125,0CO sheets
daily.
Your estimate as to deliveries to be re1uired from the
Bureau for six months from the date of your letter was 225 ,COO sheets
of Federal Reserve Notes daily, part of which '.vould be used in building up a reserve stock.
On February 1, 1922, you advised that there had
b~en
buiLt up a sufficient stock of Federal Reserve Notes and that
,,
X3351(a)
- 2-
the printing orders hereafter placed by the Boarl for account of the
banks will be to replace week by week notes Nithd.rawn from the reserve
stock for shipment to the banks.
five months, the average
You estimated that during the next
daily delivery of Federal Reserve Notes would
be 125,000 sheets, and further stated thflt it was inpossible to estimate the avera?e ieliveries during the period July 1 to December 31,1922 ..
You expressed the belief, however, that the average daily delivery during the latter part of this year would not exceed 150,0CO sheets daiJ.y.
The demand for Federal Reserve Bank Notes has been
steadily decreasing for some time past and under dste of Febroary 7, the
flssistsnt Secretary of the Federal Reserve Board advised that the Board
deemed it desirable to reduce the stock of Federal Reserve
]grik
Notes
on hand, and, therefore, req.uests the discontinuance of the delivery
of all Federal Reserve Bank Notes until further
notice~
In accordance with your letter of February 1, as recited
above 1 and the discontinuance of production of Federal Reserve Bank
Notes, the Bureau has adjusted its force to meet the re;uired
productio~
This involved furloughing for one day in seven slightly over 4,000 e~
ployees, which plan is in operation at the present moment.
lt should be understood that the reduction in working
•
hours which was made to apply to 4,000 employees covers all errployees
engaged in the production of currency.
The
re~uirements
of currency, such as National Bank NOtes, Silver
h~ve
only be3n slightly reduced.
for other. fonns
Certific~tes,
etc.,
The services of certain employees
which had been entirely devoted to the production of Federal Reserve
Notes and Bank Notes were not dispensed with but were utiliz.ed in the
production of other forms of currency.
This plan seemed more advisable
.
...
X3351(a)
- 3than breaking up the organization and discharging a number of employees,
under existing business conditions.
I understand that it is now proposed to discontinue for the
time being the printing of ·notes for the New York and Chicago Federal
Reserve Banks.
The present daily printings for the New York Federal Re-
serve Barik are 78,500 sheets and for the Chicago Bank are 8,750 sheets, a
total of 87,250 sheets.
If this action should be taken and the schedule
for the other banks maintained, it will leave the :Bureau of Engre.ving and
Printin~
with only 37,750 sheets to print daily.
This further drastic reduction in the requirements for Federal
Reserve Notes, amounting to 87,250 sheets, will mean a further
~eadjustment
in the organization and personr,el of the Bureau of Engraving and Printing.
I fear that such a radical cut in the work will have a far-reaching effect
and will cause serious complaint.
The err.ployees have accepted the necessity
of being laid off one day in seven in good spirit.
If it should be necessary
to make this reduction two days or more in seven, the loss in earning power
would constitute a serious hardship.
I, therefore, beg to inluire if it is possible at this time to
loOk forward for the balance of the calendar year and estimate the need for
Federal Reserve Notes ani Federal Reserve Bank Notes during that perioi. With
such figures in hend, the Bureau could adjust its organization and personnel
to approximately the monthly average production re<i,uired. I make this sugg'3stion 1dth the understanding that the New York and Chicago Federal Reserve
banks could probably not go through the balance of this year without
calling for any new printing of Federal Reserve Notes and that other
Federal Reserve Benks
may
be receiving month by month •.rore than their
'
- 4average
re~uirement?
for the
bal~nce
of the year and so might later
ask for a reduction or discontinuance of new printings.
This is
~'J.reJy
a•"l operat:i.ng
~:·oolern
of th2
E~.::.es.·~
of
En~
graving and Printing and I trust that we may have the co-operation of
the Federal Reserve Board and banks in rneeting a situation which at best
will prove embarrassing to a large number of employees.
Sincerely yours,
(Signed) Eliot Wadsworth
~ssistant
Honorable W. P. G. Barding,
Governor, Federal Reserve Board,
Treasury Department.
Secretary.
@FedFRASER