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F E D E R A L R E S E R V E B A N K O F S T. L O U I S

100 Years of Service

On the occasion of the centennial anniversary of the
Federal Reserve Bank of St. Louis, this book is a tribute to
the thousands of employees who have worked diligently
at the St. Louis Fed over the past century to serve the public.
We dedicate it to them and those who will follow for the next 100 years.

October 2014


Table of Contents
A Commitment to Serving the Public
A Message from James Bullard, President and CEO............................................................................................................................................ 5

Serving the Public Good
A Message from Sharon Fiehler, Chair, Board of Directors............................................................................................................................ 11

Our History
The Fed Is Born
The Idea of a Central Bank Was Anathema to Many........................................................................................................................................ 17

Lessons from a Maverick
How the St. Louis Fed Helped Shape the Nation’s Monetary Policy.................................................................................................... 27

A Foregone Conclusion
How and Why St. Louis Was Chosen for a Federal Reserve Bank............................................................................................................53

Reaching Our Constituents
To Better Serve the Eighth District, the St. Louis Fed Established Three Branches......................................................................83

A Symbol of Strength
One Federal Reserve Bank Plaza.................................................................................................................................................................................... 97

Our Work
Premier Service Provider
Listening, Assessing, Maximizing Performance.................................................................................................................................................. 103

A Competition of Ideas
Economists Need Freedom To Challenge Policymakers..............................................................................................................................107

Keeping a Watchful Eye
Banking Supervisors Take On New Challenges................................................................................................................................................... 111

Fiscal Agent for the U.S. Treasury
Delivering Innovation and Efficiency in Federal Financial Management...........................................................................................115

Adapting as Payments Evolve
Reducing Costs While Maximizing Service............................................................................................................................................................ 119

Structure and Governance
Providing Oversight and a Window to Main Street.........................................................................................................................................125

Yes, the Fed Is Audited, and It Has Been Since Its Founding................................................................................................................... 129

Earning the Public’s Trust
Open and Direct Communication Is Key................................................................................................................................................................133


St. Louis Fed Branch Offices
Bringing the Fed Closer to the Community..........................................................................................................................................................139

Dialogue with the Fed
Meeting with the Public and Taking the Discussion beyond Financial Headlines.....................................................................144

Economic Education
Fostering a Stronger Economy through the Classroom............................................................................................................................... 145

FRED and Family
Bringing Data from around the World to Your Desk, Phone or Tablet............................................................................................... 147
The History of FRED.............................................................................................................................................................................................................149

IDEAS on the Web
Keeping Up with Research from Economists around the World..............................................................................................................151

Center for Household Financial Stability
Researching How Families Can Strengthen Their Household Balance Sheets.............................................................................153

Community Development
Opening Doors for Low- and Moderate-Income Communities.............................................................................................................. 155

Office of Minority and Women Inclusion
Fostering Diversity in the Workplace, in Contracts and in Educational Outreach......................................................................157

Inside the Economy Museum
What’s Your Role in the Economy? Find Out in the St. Louis Fed’s New Museum..................................................................160

Our People
St. Louis Board of Directors.....................................................................................................................................................................165
Little Rock Board of Directors.............................................................................................................................................................166
Louisville Board of Directors..................................................................................................................................................................167
Memphis Board of Directors..................................................................................................................................................................168
Bank Management Committee..........................................................................................................................................................169
St. Louis Fed Councils.......................................................................................................................................................................................170
Board and Council Retirees......................................................................................................................................................................172
Bank Officers..................................................................................................................................................................................................................173
This commemorative centennial book also serves as this year’s annual report. Read our financial statements at There, you can also find this entire report, plus our centennial video. The number of data
series available on FRED, the amount saved through the Go Direct campaign and the officer and council lists of the
St. Louis Fed are as of Aug. 31, 2014.



A Commitment
to Serving the Public
By James Bullard

The 100th anniversary of the founding of the Federal Reserve System


provides an opportunity not only for reflection on the past 100 years, but
for preparation and anticipation. As we look back, we cannot help but
be struck by the wisdom and foresight of the designers of the Federal
Reserve. Moreover, history offers many lessons for the leaders of the
System. As we look forward to the next 100 years, we can use the lessons
of the past to equip us to deal with the challenges of the future.
One defining feature of the System and its employees that has not
changed over time is a commitment to public service. Regardless of the
specific activity, the policies championed and the services provided by the
Federal Reserve Bank of St. Louis have been and always will be motivated
by a customer focus that serves the public.


At the outset, the design of the Fed—the third attempt at

not have survived the 2007-09 financial crisis without its Main

a U.S. central bank—required careful thinking. The first two

Street component, given the amount of backlash against New

attempts failed because of political backlash, especially in the

York and Washington at the time.

case of the Second Bank of the United States, which became

Reserve bank district lines were drawn in 1913 and would

fodder for Andrew Jackson’s presidential ambitions. He wanted

probably be drawn differently today, given that relative shares

to shut it down based on the notion that the financial centers

of population and economic activity have moved south and

on the Eastern Seaboard were benefiting at the expense of the

west. For instance, four banks are along the Eastern Seaboard,

Midwest and the South. After Jackson allowed the charter of

as is the Board of Governors. However, the Fed is able to

the Second Bank of the United States to expire, the U.S. had

collect economic intelligence from all across the country, not

no central bank for more than 70 years. With no lender of

just in the cities where the 12 Reserve banks have their main

last resort, the free banking era that followed was marked by

offices. Many of the Reserve banks have branches in their

liquidity crises and a number of widespread financial panics,

districts. There are currently 24 in all, from those in Los

culminating in the Panic of 1907.

Angeles, Seattle and Miami to the St. Louis Fed’s branches in

In the wake of that panic, contemporaries pressed for American financial markets to become more stable and more orga-

Little Rock, Ark., Louisville, Ky., and Memphis, Tenn.
The branches play a key outreach role for the Fed. The

nized. They also wanted to ensure that any new central bank

St. Louis Fed’s branches, for example, are heavily involved in our

had more accountability across the nation. Their solution was a

community development and economic education efforts, as

central bank with three components—a Washington component

well as in making sure the voices of our constituents through-

(what is now the Board of Governors), a Wall Street component

out the Eighth District are heard. (See the essay “St. Louis Fed

(the Federal Reserve Bank of New York) and a Main Street

Branch Offices” on page 139 for more details.)

component (the 11 other Reserve banks around the country).
This decentralized, regional structure has been an important


aspect of the Fed’s design over the past 100 years. The Fed may

The regional representation is central to the effectiveness

St. Louis Fed Governors/Presidents

of the Federal Open Market Committee (FOMC), our main

Rolla Wells


monetary policymaking body. The 19 FOMC participants (the

David C. Biggs


William McChesney Martin Sr.


Chester C. Davis


bank presidents) bring different views to monetary policy

Delos C. Johns


discussions. Obtaining input from a diverse group results in

Harry A. Shuford


Darryl R. Francis


Lawrence K. Roos


Theodore H. Roberts


decisions are made, they rely on input from various people

Thomas C. Melzer


both within and outside the Federal Reserve System. Research

William Poole


James Bullard


seven members of the Board of Governors and the 12 Reserve

better decisions and, hence, better macroeconomic outcomes. While the 19 FOMC participants are at the table when

economists, boards of directors at regional Reserve banks, and
business, labor and civic leaders throughout the U.S. provide
input that informs monetary policy decision-making.
As we know from recent experience, no single person can

The head of each Reserve bank was originally called a governor.
The Banking Act of 1935 changed the title to president, which is
what the person in that position is still called today.

that there is no simple formula for how to conduct monetary

have all the answers. Over the past several years, central

policy and macroprudential regulation in the modern world.

bankers in the U.S. and around the world have been faced

Traditional approaches must continue to evolve.

with dramatic challenges. For instance, encountering the zero

Given all the inherent uncertainty and given that traditional

lower bound on short-term nominal interest rates presented

theories are under scrutiny, monetary policy decision-making

new problems in terms of tools and the processes as to how

is confronted with major challenges. Nonetheless, the Fed’s

monetary policy affects economic activity. Central bankers have

decision-making system is well-structured to deal with these

struggled to find the appropriate policy response given their

challenges. Because of the diversity of views among FOMC

countries’ situations. The past few years have demonstrated

participants, one can be assured that all aspects of a partic-


ular decision are well-examined. In the end, the committee

more, while the presidents and the first vice presidents of the

typically rallies around decisions and the chair. However,

Reserve banks are selected by their respective boards of

members do dissent on occasion, sometimes for tactical

directors, they must be approved by the Board of Governors.

reasons concerning the circumstances around a particular deci-

Thus, everyone serving in a top executive role in the Federal

sion, and sometimes for more fundamental reasons that the

Reserve System has been approved by the Board of Governors.

committee’s policy is headed in the wrong direction. While
consensus-driven, the FOMC is by its very structure designed

System a step away from politics, while still maintaining the

to ensure diverse views are brought to the table.

right amount of accountability to elected representatives


in Washington.

The regional structure affects the balance of power within
the Federal Reserve System. The seven members of the Board


These checks and balances help to keep the Federal Reserve

Central banks traditionally have been seen as secretive insti-

of Governors in Washington are each appointed directly by the

tutions that move behind the scenes to design policies that

U.S. president and confirmed by the Senate. The New York

affect the macroeconomy. That was certainly the tradition

Fed provides the connection with financial markets, which is a

of the Fed throughout much of its first 100 years, although

necessary element in order to have a good central bank. The

transparency had been increasing gradually. The notion of

other 11 Reserve banks around the nation allow input from

a secretive central bank changed forever in the wake of the

Main Street for important policy decisions. This is a good way

2007-09 financial crisis. Because of the Fed’s central role in

to ensure the right mix of input to System decision-makers.

stabilizing the financial system during the crisis and the various

The Reserve banks were set up according to the Federal

monetary policy responses, the public has sought more trans-

Reserve Act of 1913 as individual corporations, and each bank

parency in recent years than in previous decades. The public

has a board of directors. However, strict rules dictate who can

at large and financial markets want to know what decisions are

be on these boards of directors, and some of the appoint-

being made and how they are made, as well as the rationale.

ments are officially done by the Board of Governors. Further-

Through such transparency, the public can also see that the

System is an open, accountable institution that does reflect

solutions to problems that remain in the wake of the financial

diverse perspectives. Simultaneously, based on the wisdom

crisis (such as “too big to fail”). The Fed has to be ready to

of the designers of the System, while political accountability

respond to the potential crises of the future. We strive to

to governmental leaders is desirable, political domination is not.

learn from our mistakes to continue to have good results

An independent Federal Reserve System is necessary to ensure

going forward.

the best monetary policy for the nation.
Unlike during the 1980s and parts of the 1990s, the Fed

Perhaps one of the biggest challenges to the Fed relates to
the pace of technological advance. The diffusion of infor-

now makes extensive statements about changes in policy and

mation technology into financial markets might change the

explains the motivation behind them. The chair regularly holds

nature of banking completely in the decades ahead. We could

press conferences after meetings, and FOMC participants,

see person-to-person and electronic payments that do not

including me, frequently discuss monetary policy in interviews

go through any banking system. The old notions of writing

and speeches to the public. This turnaround on the transpar-

checks or clearing pieces of paper are going out the door as

ency dimension has been a change for the better in central

we speak, with unknown consequences. This calls for a deeper

banking. Policy is more effective if it is well-understood, and

understanding of what money is, how monetary systems work

to some extent transparency allows for buy-in from finan-

and the Fed’s role in this changing environment.

cial markets and the public at large about why the chosen


policy is reasonable. I expect continued progress toward

The St. Louis Fed has historically been known for espousing

more transparency in the coming years. It will be of utmost

monetarist monetary policy, or the idea that inflation can be

importance as we begin to unwind the extraordinary monetary

controlled by controlling the supply of money. While the

policy accommodation that we have had in place during the

modern St. Louis Fed remains a leading player in monetary

recession of 2007-09 and subsequent recovery.

policy, based on a strong research staff, we perform many

Over the next 100 years, central banking will face many
challenges. The Fed continues to play a role in finding

other functions that are in service to the Federal Reserve
System and the public in general.


For instance, as the fiscal agent for the U.S. Treasury,

financial landscape is critical to being a useful contributor within

the Fed provides operational support to the Treasury. The

the Federal Reserve System in the years ahead. We must

St. Louis Fed coordinates this activity for the entire Federal

have the skills not only to identify opportunities, but to pro-

Reserve System. While these services are provided to the

vide the leadership to transform opportunities into valuable

U.S. Treasury, the general public is the ultimate beneficiary.

services for the public.

As one concrete example, the St. Louis Fed has managed

We now have the first 100 years behind us as an

the Treasury’s Go Direct campaign, which encouraged

institution. I am confident that for the next 100 years,

people to receive their benefit payments electronically

the St. Louis Fed and the Federal Reserve System will

instead of via paper checks. This campaign saved over

continue to provide great service to the nation in the

$1.15 billion in taxpayer dollars by the time it concluded.

realm of central banking.

The St. Louis Fed also plays a leading role in communicating
important supervisory and regulatory information. Our
online data products continue to evolve and expand; the
Federal Reserve Economic Data (FRED) database, in particular, is known worldwide. In addition, the St. Louis Fed is a
leader in the provision of economic education resources for
students and consumers. In this commemorative book, the
Bank’s leadership team dives into these and other examples
of innovation done by the Bank.
Going forward, the St. Louis Fed must continue to find
ways to provide valuable public services to the Federal
Reserve System and to the nation within the Fed’s mission.
Our ability to continue to identify opportunities in a changing


James Bullard
President and CEO

Serving the
Public Good
By Sharon D. Fiehler

2014 marks a full century since the Federal Reserve Bank of St. Louis
began serving the Eighth District. With so many changes having taken
place in society since 1914, the St. Louis Fed and the Federal Reserve as a
whole have evolved to better serve our nation. Since joining the Bank’s
board of directors in 2009, I have been fortunate to witness the Bank’s
vital contributions in recent years.
When I step back and reflect, it is indeed humbling to recognize the
magnitude of the work performed by the Federal Reserve, which must
balance the interests of Main Street, Wall Street and Washington. The
Fed was specifically designed by Congress to carry out its responsibilities
without interference from partisan politics. The regional Reserve banks are
the voice of Main Street in monetary policy deliberations and other central
bank affairs, taking into account business, economic and banking conditions of each district. Reserve bank boards of directors play an integral role
in this balance and have done so since the Fed’s founding.


Directors represent a diverse range of interests and industries.

thinking. Today, the Bank ranks No. 5 among the world’s

The inaugural St. Louis Fed board not only represented the

central banks in terms of economic research, and Bank

banking community, but included LeRoy Percy, a former U.S.

President James Bullard is recognized globally for his

senator from Mississippi; W.B. Plunkett, president of a grocery

scholarship and policy views. That commitment to being in

company based in Little Rock, Ark.; and Murray Carleton,

the forefront and driving change persists throughout the Bank.

president of Ferguson-Carleton Hardware Co. in St. Louis.

During my five years on the board, I have seen the Bank’s

Today’s board includes leaders from health care and

innovative spirit lead to better approaches and programs for

pharmacy benefits management, banking, energy, retail,

serving the public good. Notable recent examples include:

life science and specialty chemicals, and law; they hail from


Little Rock, Memphis, Tenn., Texarkana, Texas, and

program, which assists bank examiners across the Federal

Vandalia, Ill., as well as St. Louis.

Reserve System and state banking regulatory agencies by

Over the years, the St. Louis Fed has been a leader in

keeping them current on emerging policy and financial

striving for strong diversity among its staff, and the board

market issues. Shortly thereafter, the Bank began its Ask

reflects that commitment. In 1977, Virginia Bailey became

the Fed program, which helps educate bankers and state

the first woman to serve on the board. Today, I am one of

banking commissioners on the latest financial and regula-

three women serving on the St. Louis Fed’s board; three

tory developments.

more women serve on our branch boards.


In 2008, the St. Louis Fed launched its Rapid Response


In 2011, the St. Louis Fed opened its Office of Minority

It is an honor for me to chair an organization with such

and Women Inclusion to complement the Bank’s efforts

strong roots in leadership and innovation. Research has long

to support diversity and inclusion. As noted in the essay

been at the heart of the St. Louis Fed. Some may recall the

“Fostering Diversity in the Workplace, in Contracts and in

1960s and 1970s, when the St. Louis Fed was known as a

Educational Outreach” on page 157, at the end of last year,

maverick for its views on the role of monetary policy in con-

44 percent of the Bank’s workforce was female and

trolling inflation—views that have since become the accepted

26 percent belonged to a minority group.


In 2013, the Go Direct campaign, which the St. Louis Fed
administered on behalf of the U.S. Treasury, concluded.
Started in 2004, the effort encouraged recipients of federal
benefit payments to switch to electronic direct deposit from
checks for such payments. More than $1.15 billion in taxpayer
savings has been realized, with $1 billion more in savings
expected over the next 10 years.



In 2013, the Bank established the Center for Household

Chairs of the St. Louis Fed Board of Directors

Financial Stability. The center focuses on research and

William McChesney
Martin Sr.


awareness about the importance of the household

Rolla Wells


balance sheet in building financially stable families.

John S. Wood


William T. Nardin


Russell L. Dearmont


to its acclaimed Federal Reserve Economic Data (FRED)

M. Moss Alexander


free public database. Today, FRED has more than 236,000

Pierre B. McBride


Ethan A.H. Shepley


So far in 2014, the St. Louis Fed added 54,000 data series

data series.

Raymond Rebsamen 1963-1966
I am confident that this commitment to innovating for

Frederic M. Peirce


the public good will carry forward into our next 100 years,

Edward J. Schnuck


with the St. Louis Fed continuing to shine as a leader in the

Armand C. Stalnaker 1978-1982

W.L. Hadley Griffin


Robert L. Virgil Jr.


H. Edwin Trusheim


Robert H. Quenon


John F. McDonnell


Susan S. Elliott


Charles W. Mueller


Walter L. Metcalfe Jr. 2004-2006
Irl F. Engelhardt


Steven H. Lipstein


Ward M. Klein


Sharon D. Fiehler


Federal Reserve System.

Sharon D. Fiehler
Chair, board of directors



Through a series of essays, this section explores the St. Louis
Fed’s history, beginning with the founding of the Federal

Our History

Reserve, our nation’s third attempt at a central bank. The
unique structure of the Fed—centralized and decentralized,
public and private—is explained in the second essay. The
St. Louis Fed’s days as a maverick illustrate how the regional
structure of our central bank ensures that all voices are heard
at the policymaking table. Other essays in this section delve
into the reasons for choosing St. Louis as the site of a Federal
Reserve bank and for selecting Little Rock, Ark., Louisville, Ky.,
and Memphis, Tenn., as locations for branches, and also into
the building of our St. Louis offices.


Bank runs were not uncommon in the late 1800s and early 1900s when customers found out that banks were
running out of currency. The Federal Reserve was created, in part, to deal with such shortages.


The Fed Is Born
By David Wheelock

In 1913, both houses of the U.S.
Congress passed a bill that was
sent to the desk of President

Woodrow Wilson. He signed that bill into law Dec. 23 and set in
motion the process of creating the Federal Reserve System.
The president and the Congress did this in the face of some
opposition, but they were propelled by a clear purpose and a
strong commitment to confront disorder in the banking system.
The Federal Reserve has since served this nation’s economic
interests for a century.
This year, the Federal Reserve Bank of St. Louis enters its
second century in operation. The St. Louis Fed is one of 12 Federal Reserve banks established under the Federal Reserve Act of
1913. The act called for the establishment of at least eight, but
not more than 12, Federal Reserve districts, each with its own
Federal Reserve bank. The act also called for the establishment
of a Federal Reserve Board, comprising government officials
and located in Washington, D.C., to provide public oversight of


In the early days of the St. Louis Fed, armored trucks, such as this Ford Model T,
were used to shuttle cash between the Fed and commercial banks.

the System. The act charged a Reserve Bank Organization

American and reflects our nation’s long tradition of

Committee—consisting of the secretary of the Treasury,

balancing local, regional and national interests.

the secretary of agriculture and the comptroller of the
currency—with drawing Federal Reserve district boundaries

Act, the idea of a central bank was anathema for most

and selecting a city in each district for the headquarters of

members of government, the business community and the

a Federal Reserve bank. The organization committee drew

general public. The central banks of European countries

the boundaries of the Eighth Federal Reserve District to

were private and secretive, and they served highly concen-

include the entire state of Arkansas and portions of Illinois,

trated banking systems from national capitals. The Fed’s

Indiana, Kentucky, Mississippi, Missouri and Tennessee, and

proponents stressed that the Fed would not be a “central

selected St. Louis as the location for the District’s Reserve

bank,” but rather a confederation of regional Reserve banks

bank. The Federal Reserve Bank of St. Louis received its

that served their local community banks and citizens.

charter May 18, 1914, and, along with the other 11 Reserve

Like all legislation, the Federal Reserve Act was a political

banks, opened for business Nov. 16, 1914.

balancing act, in this case between the interests of com-

The Fed’s principal responsibilities include the conduct
of monetary policy, the supervision and regulation of key
portions of the banking and payment systems, the provision


When Congress was deliberating the Federal Reserve

mercial banks and the general public, of large banks and
small banks, and of Wall Street and Main Street.
First and foremost, the Federal Reserve was created to

of fiscal agency services for the U.S. Treasury, and the

overcome some observed defects of the U.S. banking and

provision of payment services for depository institutions.

monetary system that caused relatively frequent crises,

The structure of the Federal Reserve System is uniquely

known as banking panics. Panics were widely blamed on


The establishment of the Federal Reserve System, commemorated in this photo of
representatives of all the Reserve banks prior to their openings, marked a major turning point in the
country’s efforts to overcome defects in the U.S. banking and monetary system that caused relatively
frequent crises, known as banking panics. The four members of the St. Louis contingent are in the eighth
column from the left (symbolizing the Bank serving the Eighth Federal Reserve District).

the “inelastic,” or inflexible, supply of U.S. currency, which at the time consisted primarily of notes issued by national banks,
and gold and silver coins minted by the U.S. government. Reformers also decried the concentration of the nation’s bank
reserves in a small number of banks in New York City and a few other cities, and the investment of those reserves in loans to
stock market speculators.
The Federal Reserve Act created a new currency—the Federal Reserve note—and a means by which banks could quickly
obtain additional currency from the Fed to satisfy any change in the demand for cash. The act also sought to end the geographic concentration of the nation’s bank reserves and their diversion to the stock market.
The Federal Reserve Act called for the System’s member banks, which included all banks with a federal charter, to hold
their required reserves as balances with Federal Reserve banks. Previously, national banks could hold a portion of their



Bank runs on individual
banks, as happened at this
one in New York City, could
cause depositors at other
institutions to become
worried about their own
money. If that fear causes
subsequent bank runs, a
banking panic is born.


required reserves in the form of correspondent balances

invested in short-term loans to stock market investors. Crit-

with other national banks located in New York City,

ics argued that this arrangement made the banking system

Chicago and St. Louis, which were designated as central

vulnerable to Wall Street panics and drained the country’s

reserve cities under Civil War-era banking acts.

financial resources away from productive uses nationwide.

New York City banks held, by far, the largest volume of

Congress established a regional system of Fed banks and

correspondent balances, and many of those balances were

districts to reduce the concentration of bank reserves in

New York City and other money centers and to encourage the productive use of the nation’s banking resources
throughout the country.
Whereas banking reformers expressly did not want to
create a central bank dominated by large banks, let alone
by Wall Street, there was also little support for a central
bank that was merely an arm of the Treasury Department
or under the direct control of politicians. Reformers
understood that the power to print money was too great a
temptation for governments to use to finance expenditures,
which would invariably lead to inflation.
The result was a compromise. Under the Federal Reserve
Act, the Federal Reserve banks are organized as private corporations. The stock of each bank is owned by its member
banks. The members elect six of the bank’s nine directors,
who in turn select the bank’s chief executive and chief
operating officers. The Federal Reserve Board, however,
is a government entity whose governors are appointed by
the president of the United States and confirmed by the
U.S. Senate. Under the Federal Reserve Act, the Board
is charged with establishing regulations under which the
Reserve banks operate, appointing three directors of each
Reserve bank, approving the appointments of Reserve



bank chief officers and providing general supervision of

structure set up by Congress has stood the test of time and

the Federal Reserve banks. The Federal Reserve Act was,

continues to serve the nation well.

thus, a carefully crafted law that sought to balance public

This book commemorates the 100-year history of the

and private interests, as well as to ensure a System that is

Federal Reserve Bank of St. Louis and the Federal Reserve

responsive to all geographic regions of the country.

System. We illustrate in these pages how the unique

Over the years, there has been some rebalancing. In

structure of the Federal Reserve System has served the

the wake of the Great Depression, Congress enacted the

nation well in the past and continues to be a strength of

Banking Act of 1935, which reduced the autonomy of the

the System. We focus on contributions of the St. Louis Fed

individual Reserve banks and gave more authority to the

to show how the Federal Reserve and the nation benefit

Federal Reserve Board (which was then renamed the Board

from the System’s structure: Like the other 11 Reserve

of Governors of the Federal Reserve System). The extent

banks, the St. L0uis Fed is responsive to local and national

to which the Fed’s structure contributed to the failures of

banking and economic conditions, fosters innovation, brings

the Great Depression remains debated, but the rebalancing

diverse views to bear in policymaking, and enables two-way

of authority within the Fed reflected a general desire for

communication between policymakers and the public.

a larger federal government response to the Depression.

In the 1970s, the St. Louis Fed became known as the

Nonetheless, Congress retained a substantial role for the

maverick Reserve bank for its monetarist views about

Federal Reserve banks, both in determining monetary

monetary policy. Our essay “Lessons from a Maverick” on

policy and in carrying out the supervisory and operating

page 27 describes the debates within the System about the

functions of the System. To a great extent, the regional

causes of inflation and the appropriate role of monetary

The St. Louis Fed moved into this building on the southeast
corner of Broadway and Olive Street in late 1915. The building
(no longer there) had been called the National Bank of
Commerce and was renamed the Federal Reserve Bank of
St. Louis while the Bank was in occupancy.

policy in the economy. The St. Louis Fed lost the battle in
the 1970s, but eventually won the war when the Fed, under
Chairman Paul Volcker, brought inflation under control
and accepted responsibility for maintaining price stability.
The episode illustrates how the Fed’s unusual structure
promotes a competition of ideas that ensures that different
perspectives are heard at the policymaking table.
The other essays in this book are both historical and
current. We describe the selection of St. Louis as the
home of one of the 12 Federal Reserve banks and the
selection of Little Rock, Ark., Louisville, Ky., and Memphis,
Tenn., as locations of our branch offices. We also develop
our theme by describing the work of our Bank’s functional
areas and the important roles of our St. Louis and branch
office boards of directors and advisory boards.


The Federal Reserve Bank of St. Louis bucked
the System in the 1960s and ‘70s, arguing that Fed
policies and excessive growth of the money supply
were to blame for higher inflation. When the Bank,
led then by President Darryl Francis (pictured),
couldn’t convince the rest of the Federal Open
Market Committee, it took its case to the public,
leading to the St. Louis Fed’s being labeled
a maverick. Business Week reported on the
“family dispute” in 1967. The St. Louis Fed’s
reasoning eventually became widely embraced.


Lessons from
a Maverick
By David Wheelock

Today, the Federal Reserve is best
known for monetary policy. However,
monetary policy was not on the radar
when the Fed was established. The

idea of managing interest rates, credit conditions or the money
supply to smooth the business cycle or control inflation was an
idea that came later and developed slowly.
On the heels of the Panic of 1907, financial stability was the
main goal. The Fed’s founders believed that a geographically
decentralized organization, composed of regional Reserve banks
and branches, would be more responsive to differences in banking conditions across the nation and, thereby, contribute better
to financial stability. Accordingly, the Federal Reserve Act of 1913
established a system of Federal Reserve districts, each with its
own Reserve bank, rather than a central bank located solely in the
nation’s capital or largest financial center.
Although the Federal Reserve System was not set up with
monetary policy in mind, the Fed’s decentralized structure has


All national banks (those with a charter issued by the federal government) were required to join
the Federal Reserve System. Membership was optional (and still is) for state banks. At this early
location of the St. Louis Fed, business was conducted in person and, in some cases, over the
telephone, such as the “candlestick” phone in the lower right.

distinct benefits for the conduct of monetary policy. Such a

the System’s founders establish a central bank with a geo-

structure: 1) contributes to the Fed’s political independence;

graphically decentralized structure? What were the origins

2) promotes a greater diversity of views in policy deliber-

of Federal Reserve monetary policy? Why was the Banking

ations; and 3) ensures that the concerns and conditions

Act of 1935 so significant?

of different parts of the country are recognized in making
policy. This structure allows greater freedom to develop
and promote alternative ideas—and get them heard at the
policy table—than does a more “top-down” central bank.
The history of the Federal Reserve Bank of St. Louis illus-

The Fed was established mainly to correct defects in
the U.S. banking and monetary system that reformers
viewed as contributing to financial instability. Those

trates how the Fed’s structure provides a channel through

defects included: 1) a national currency whose supply was

which different points of view can be expressed in policy

relatively fixed and did not adjust to changes in demand;

deliberations. In the 1960s and 1970s, the St. Louis Fed

2) the concentration of the nation’s bank reserves in a few

became known as the maverick Reserve bank for its strong

major financial centers, especially New York City; and

and public advocacy of a policy different from what the

3) the investment of those reserves in short-term loans to

System was pursuing at the time. Although the St. Louis

stock market speculators.

Fed lost many battles on this issue, its policy views eventually were widely adopted within the System.
Before getting into details of this episode in Fed history,
it’s important to understand what came before. Why did



To address the first defect, the Fed’s founders created
a new currency—Federal Reserve notes—and a system
to ensure that the supply of currency would adjust to
changes in demand.


Research Director Homer Jones (top photo, in middle) and
President Darryl Francis (below) were at the helm of the
St. Louis Fed when it gained the reputation in the 1960s and
1970s as being a monetary policy maverick.

The second and third defects were addressed by establishing a system composed of distinct regional districts,
each with its own Reserve bank, and requiring commercial
banks that joined the Federal Reserve System to hold
reserve balances with their local Federal Reserve bank.
Although many banks also kept some deposits in New York
City and other major cities, the geographic concentration
of the nation’s bank reserves and the banking system’s
exposure to the stock market were reduced.
The Federal Reserve Act required all national banks
(i.e., commercial banks with a charter issued by the federal
government) to join the System. Membership was made
optional for state banks that met certain criteria and
agreed to Fed supervision and regulation. A member bank
could obtain Federal Reserve notes or additional reserve
deposits by borrowing from its Federal Reserve bank.
The Fed’s lending facility became known as the “discount
window,” and the interest rate it charged on loans, the
“discount rate.” 1


The Federal Reserve Act called for the establishment of

price stability and maximum employment. The founders

at least eight and as many as 12 Federal Reserve districts,

expected the Reserve banks to set their discount rates at

each with its own Reserve bank. (See the accompanying

levels that would enable member banks to satisfy their cus-

essay “A Foregone Conclusion” on page 53.) The Fed’s

tomers’ demands for currency and short-term agricultural

founders believed that a geographically decentralized struc-

and business loans. First and foremost, however, Reserve

ture would make the Fed more responsive to banking and

banks were expected to protect their own reserve positions.

economic conditions in the nation’s different regions and,

Reserve banks were required to hold gold reserves worth

thereby, more effective at protecting the banking system

at least 40 percent of their outstanding note issues and 35

and public from banking crises. Each Reserve bank was

percent of their deposit liabilities. A Reserve bank could

given its own board of directors, the right to set its own

increase its reserve ratio by raising its discount rate. Doing

discount rate (subject to Federal Reserve Board approval)

so would discourage member banks from borrowing at

and considerable latitude to administer its own discount

the Reserve bank’s discount window, thereby reducing the

window and carry out its other operations.

Reserve bank’s note and deposit liabilities relative to its gold
reserves. Of course, if a Reserve bank set its discount rate


The Fed’s founders did not conceive of monetary policy
in the modern sense of taking actions to influence interest
rates, credit conditions or the growth of the money supply
to achieve broad macroeconomic policy goals, such as

too high, then it would neither fulfill its mission of accommodating the currency and credit needs of its district, nor
generate income to cover the bank’s expenses.2
Almost as an afterthought, the Federal Reserve Act
authorized Reserve banks to purchase government securities



In the Money department at the Louisville Branch of the St. Louis
Fed in 1947, employees worked in what amounted to a cage—typical
for those handling cash at any Fed office.

in the open market. In modern times, such open market
operations in government securities have been the principal means by which the Fed conducts monetary policy.
However, it was not until the 1920s that the Reserve banks
began to coordinate their open market operations with one
another or to use them to achieve macroeconomic policy
objectives, such as price stability and stable economic
growth—that is, to conduct monetary policy.3
The Fed’s first attempts at macroeconomic stabilization
were apparently successful. In their classic study, A Monetary History of the United States, 1867-1960, economists
Milton Friedman and Anna J. Schwartz contended that under
the leadership of New York Fed Gov. Benjamin Strong, the
Fed pursued policies that moderated the business cycle and
maintained price stability. 4 Friedman and Schwartz argued
that the Fed’s decentralized structure necessitated a forceful leader like Strong to formulate a coherent monetary
policy. Strong’s death in 1928 robbed the System of a
forceful leader; the loss, Friedman and Schwartz contended,


William McChesney Martin
Sr. (left) served as the first
chairman of the St. Louis
Fed’s board of directors
until 1929, when he became
its governor (CEO). His
son, William McChesney
Martin Jr. (right), was the
longest-tenured chairman of
the Federal Reserve System,
serving from 1951 to 1970.

caused policy to disintegrate under the weight of petty

governor of the Board in 1933, thought so. Eccles argued

jealousies, parochialism and infighting among the individual

that the Board should have the sole responsibility for mone-

Reserve banks and between the Reserve banks and the

tary policy and advocated legislation to reduce or eliminate

Board. The consequence was disastrous, as the System failed

the role of the Reserve banks in monetary policymaking.

to respond to banking panics or to prevent a sharp economic

Congress did not go as far as Eccles desired, but the Bank-

contraction during the Great Depression of the 1930s.

ing Act of 1935 shifted the balance of power in monetary

From this perspective, a lesson of the Great Depression
would seem to be that decision-making authority should be


policymaking away from the Reserve banks to the Board.5
Not all histories view the Fed’s decentralized structure or

concentrated within a single, small group whose members

the death of Benjamin Strong as being as significant as did

share common goals and understanding of policy. Marriner

Friedman and Schwartz. Economist and Fed historian Allan

Eccles, whom President Franklin Roosevelt appointed to be

Meltzer, for example, argued that Strong’s policy framework

was flawed because it relied on potentially misleading

or third year. All 12 presidents (or their representatives)

indicators of monetary conditions, such as nominal

attend and participate in the deliberations of every FOMC

interest rates (as opposed to interest rates adjusted for

meeting; each president has the opportunity to present his

expected inflation). Strong’s successor at the New York

or her views to the committee regardless of whether he or

Fed, George Harrison, usually advocated a more vigorous

she currently is a voting member of the committee.

response to the Depression than did the other Reserve

At various times, Congress has considered eliminating

bank governors, including William McChesney Martin Sr.

the role of Federal Reserve bank presidents in setting mon-

of the St. Louis Fed. However, Meltzer contended that the

etary policy or limiting the presidents to an advisory role.

principal reason for the Fed’s policy mistakes in the 1930s

However, such proposals have never won much support,

stemmed from a lack of understanding about policy, rather

perhaps because there are clear benefits from the service of

than the Fed’s structure.6

Reserve bank presidents as voting FOMC members, rather
than as just advisers.


The Banking Act of 1935 created the modern form of the

One benefit is that the participation of Reserve bank
presidents in monetary policymaking contributes to the

Federal Open Market Committee (FOMC), which is the

Fed’s political independence. That is because the appoint-

Fed’s principal monetary policymaking committee. The vot-

ment process of Reserve bank presidents is more insulated

ing members of the FOMC are the seven members of the

from politics than is the appointment of Federal Reserve

Fed’s Board of Governors and five Reserve bank presidents.

governors. Whereas members of the Board are appointed

The chair of the Board also chairs the FOMC, and the presi-

by the president of the United States and confirmed by

dent of the Federal Reserve Bank of New York serves as the

the Senate, Reserve bank presidents are appointed by

FOMC’s vice chair. Of the other 11 Reserve bank presidents,

their respective Reserve bank boards of directors with

four serve at a time as voting members of the FOMC on

the approval of the Board of Governors in Washington,

a rotating basis, with each president voting every second

D.C.7 Many studies have found that political independence


Prior to research by the St. Louis Fed showing otherwise, the FOMC
(shown here in the mid-1960s) largely discarded the idea that
monetary policy was either a cause of or a cure for inflation.

enhances central bank performance and that countries with independent central banks tend to have better-performing economies than do countries with less-independent central banks.8
Some observers contend that a second benefit of having Reserve bank presidents in a policymaking role is that the opportunity to vote enables the Fed to attract more-talented individuals to serve as Reserve bank presidents than if presidents served
merely as advisers to the Board. When asked in congressional hearings for his opinion about a proposed change in the Federal
Reserve Act that would make all Reserve bank presidents nonvoting members of the FOMC, Cleveland Fed President and
former St. Louis Fed Research Director Jerry Jordan testified: “Making the presidents [of Federal Reserve banks] nonvoting
members … would alter the Federal Reserve substantially and in a very harmful way. It would not be a job I would want—it
would destroy the system.” 9



Top: The St. Louis Fed’s board of directors gathered in its boardroom
in 1964 to mark the 50th anniversary of the Fed.
Bottom: Marriner Eccles, who served as Fed chairman from 1934 through 1948,
argued that the Federal Reserve Board should have the sole responsibility for monetary policy.
He advocated legislation to reduce or eliminate the role of the Reserve banks in monetary policymaking.

More broadly, the participation of Reserve bank presi-

independent policy analysis and research. Reserve bank

dents on the FOMC contributes to monetary policymaking

economists report only to their respective bank presidents

in the United States by ensuring a greater diversity of views

and not to members of the Board of Governors or its staff.

in policy deliberations. Over time, the Fed’s structure

This arrangement helps ensure a hearing for diverse

ensured that the differences in banking and economic con-

views and limits “groupthink” in policy analysis and at

ditions across the nation were recognized in policy deliber-

FOMC meetings.

ations. Almost from the System’s beginning, the Reserve
banks invested in gathering and reporting information
about banking and economic conditions in their districts

The history of the St. Louis Fed, particularly in the 1960s

for use in monetary policymaking, as well as in banking

and 1970s, illustrates well how Federal Reserve bank presi-

supervision and other operations of the bank. To this day,

dents and their research staffs can contribute to monetary

Federal Reserve bank directors, advisory council members

policy deliberations.

and other local contacts continue to provide important

The Fed essentially had no monetary policy from the mid-

information about district conditions for use in policymak-

1930s through World War II and for a few years thereafter.

ing. (See the essay “Structure and Governance” on page 125

In fact, it played little role in fostering the expansion that

for more on the role of Reserve bank directors.)

pulled the U.S. economy out of the Great Depression.

In addition to bringing information about economic



Monetary growth drove the economic recovery, but that

conditions in their districts to the policy table, Reserve bank

growth mainly reflected gold inflows from abroad rather

presidents are supported by economic research teams with

than actions by the Fed.10 During World War II, the Fed



annual rate since 1947, when wartime price controls had
just been lifted.
The rising and highly variable rate of inflation in the
1970s and soon thereafter and the economic instability that
accompanied it were widely blamed, both within the Fed
and by outside observers, on shocks to energy prices associated with the Arab oil embargo in 1973 and the Iranian
Revolution in 1979, the granting of wage increases in excess
acted to peg the market yields on short-term government

of productivity growth, monopolistic price setting by firms

securities and enforce a ceiling on Treasury bond yields.

and federal government budget deficits. For example, Fed

The policy continued until March 1951, when, in the face of

Gov. Sherman Maisel claimed that the rising rate of inflation

rising inflation, the Fed struck an agreement with the Trea-

of the late 1960s and early 1970s was caused by “govern-

sury Department that freed the Fed to pursue an indepen-

ment deficits; … speculative investment in plant, equipment

dent monetary policy.11

and labor by business corporations; … use of economic

Following this agreement, inflation declined and
remained low and stable through the 1950s and early 1960s.


power to raise wages and profits; … but most significant
were the government deficits.” 12

Then, it began to rise in waves, with peaks in 1970, 1974 and

Fed Chairman Arthur Burns held a similar view. Accord-

1980, as shown in Figure 1. Each peak came early in a reces-

ing to Burns, “A dominant source of the problem appears to

sion and followed deliberate actions by the Fed to tighten

have been the lack of discipline in government finances.” 13

policy. In each successive cycle, however, the inflation nadir

Burns also blamed inflation on “excessive” wage increases:

and subsequent peak were higher than those associated

“Government efforts to achieve price stability continue to

with the previous cycle. In 1980, the consumer price index

be thwarted by the continuance of wage increases substan-

(CPI) inflation rate briefly exceeded 14 percent—its highest

tially in excess of productivity gains. … The inflation that

we are still experiencing is no longer due to excess demand.

were not held by Darryl Francis, the president of the

It rests rather on the upward push of costs—mainly, sharply

St. Louis Fed from 1966 to 1976. Citing the research of

rising wage rates.” He argued, moreover, that “monetary

his staff economists, as well as of Milton Friedman, Karl

and fiscal tools are inadequate for dealing with sources of

Brunner and other academic economists, Francis blamed

price inflation such as are plaguing us now—that is, pres-

inflation on the Fed’s monetary policies: “When we talk

sures on costs arising from excessive wage increases.” 14

about the ‘problem of inflation,’ I think it is safe to say that
the fundamental cause is excessive money growth.” Fur-


The views of Maisel and Burns about the causes of infla-

ther, Francis argued that “the cure [for inflation] is to slow
down the rate of money expansion.” 15

tion were widely held at the time, both within the Fed and

Burns and most other members of the FOMC largely

among academic and business economists. However, they

discarded the idea that monetary policy was either a cause

St. Louis Fed President
Darryl Francis (left) chats
with Frederic M. Peirce,
chairman of the Bank’s board
of directors, in 1966.


When St. Louis Fed President Darryl Francis (left) and Research Director Homer Jones (right) couldn’t convince the Fed’s leadership in Washington that
monetary policy was causing the waves of inflation that started in the late 1960s, the two men took their case to the public. The Board of Governors
was not pleased. One governor said: “It is a weakness for a regional bank to concentrate on national matters. ... We have a fine staff in Washington.”


of or a cure for rampant inflation. At an FOMC meeting

price controls: “The adoption of administrative controls in

June 8, 1971, Burns argued: “Monetary policy could do very

attempting to hold down inflation, or to shorten the period

little to arrest an inflation that rested so heavily on wage-

of adjustment, would impose a great cost on the private

cost pressures. ... A much higher rate of unemployment

enterprise economy. Serious inefficiencies would develop

produced by monetary policy would not moderate such

in the operations of the market system” (FOMC, Mem-

pressures appreciably.” Burns then said that he intended to

orandum of Discussion, Dec. 15, 1970, p. 74). In Francis’

continue to press the Nixon administration hard for an effec-

view, “a freeze or other control programs could not be

tive incomes policy (FOMC, Memorandum of Discussion, June

expected to effectively restrain inflation unless accompa-

8, 1971, p. 51). Burns advocated government control of wages

nied by sound monetary actions” (FOMC, Memorandum

and prices, rather than monetary policy, to contain inflation.

of Discussion, Oct. 19, 1971, p. 36).

According to Burns, “The persistence of rapid advances of

For Francis, “sound monetary actions” meant maintain-

wages and prices in the United States and other countries,

ing a moderate, stable growth of the money stock. This

even during periods of recession, has led me to conclude

put Francis at odds with Burns and several other FOMC

that governmental power to restrain directly the advance of

members. According to Jordan, the former St. Louis Fed

prices and money incomes constitutes a necessary addition

research director who went on to become the president

to our arsenal of economic weapons.” 16

of the Cleveland Fed, “No one was paying attention to

As previously stated, the St. Louis Fed’s Francis held a

any kind of quantitative measures, and the ideas that

different view. At an FOMC meeting in December 1967,

[St. Louis Fed Research Director] Homer Jones and Darryl

Francis noted some downsides of wage and price controls:

Francis supported at this Bank of looking at aggregates,

“[They] raised problems of resource allocation; they interfered

looking at bank reserves, looking into money supply, was

with freedom; and they were difficult to administer” (FOMC,

just out of tune with what everybody else was saying.” 17

Memorandum of Discussion, Dec. 12, 1967, pp. 54-55). At a
subsequent meeting, he again argued against wage and

Burns explicitly argued against a focus on the money
supply, saying at an FOMC meeting in 1971 that “the


heavy emphasis that many people were placing on the

St. Louis Fed staff economist, and a memo by Robert

behavior of M1 [a measure of the money stock] involved

Rasche, a visiting scholar at the St. Louis Fed and a future

an excessively simplified view of monetary policy” (FOMC,

director of research at the Bank (appointed in 1999).19

Memorandum of Discussion, Feb. 9, 1971, p. 87). Further,

Francis’ immediate predecessors as presidents of the

Burns argued that the Fed could not reliably control the

St. Louis Fed—Delos Johns and Harry Shuford—had also

growth of the money stock even if it desired to do so: “All

argued for the use of monetary aggregates in the conduct

we can control over such brief periods [as short as three

and description of monetary policy. Of the three, however,

months] is the growth of member bank reserves; but a

Francis was the most vocal critic of System policy; he also

given growth of reserves may be accompanied by any of

served as president when inflation was rising and highly

a wide range of growth rates of … the money supply.” 18

variable. During Francis’ tenure, the St. Louis Fed became

Francis again held a different view, which he made
known in public forums as well as in FOMC meetings and

cies and for its advocacy of an alternative approach.20

correspondence with Burns and other FOMC members.

The St. Louis Fed’s very public criticism of the Fed’s

For example, in a letter to Burns (Figure 2), Francis chal-

policies was often not welcomed by the Board and other

lenged claims made at a recent FOMC meeting that

Reserve banks. A few governors expressed the view that

the growth of monetary aggregates was impossible to

Reserve banks should stick to reporting on local economic

predict or to control: “Damn it all, Arthur, we here [at the

conditions and not criticize System policy. One governor

Federal Reserve Bank of St. Louis] could and did predict

said, for example: “It is a weakness for a regional bank to

just such an outcome! Furthermore, there is a control

concentrate on national matters. … We have a fine

mechanism which will assure much better results than

staff in Washington.” 21

we have achieved in the past by our reliance on short term


known as a maverick for its outspoken criticism of Fed poli-

At times, pressure on the Reserve banks to support Sys-

interest rates [to conduct policy].” To bolster his case, Fran-

tem policy was intense. According to Lawrence Roos, who

cis included with his letter an article by Albert Burger, a

succeeded Francis as president of the St. Louis Fed in 1976,

other Reserve banks would sometimes express support
for St. Louis in private, but were unwilling to disagree with
Burns and other members of the Board at FOMC meetings
or in public. “I think some of them were concerned about
their own Reserve bank budgets,” Roos said. “They wanted
to be on the right side of the chairman and the Board. …
[T]here was politics in the Open Market [Committee].” 22
Francis and his immediate predecessors were undoubtedly influenced by Homer Jones, the St. Louis Fed’s director
of research from 1958 to 1971. Jones had been a teacher
and later a student of Milton Friedman, the University of
Chicago economist who championed “monetarism” in
both scholarly journal articles and popular writings and
speeches. Friedman coined the phrase, “Inflation is
always and everywhere a monetary phenomenon.”
Further, he and other monetarists argued that
fluctuations in money supply growth had historically
been an important source of macroeconomic instability. Consequently, Friedman and other monetarists
advocated monetary policies geared toward maintaining a

modest, stable rate of growth of monetary aggregates.
Under Jones, the St. Louis Fed developed an interna-

St. Louis Fed President Darryl Francis did not shy away from challenging Fed Chairman
Arthur Burns and others on the FOMC at the time. Francis had faith in his researchers,
whose data showed that the growth of the money supply led to a growth in inflation and,

tional reputation for economic research and monetarist

historically, to macroeconomic instability.


Top: Leonall Andersen, standing next to
Homer Jones in 1971, co-authored a famous
and influential paper titled “Monetary
and Fiscal Actions: A Test of Their Relative
Importance in Economic Stabilization.”
St. Louis Fed President Darryl Francis used
this paper and subsequent research to
promote a monetary policy based on
controlling the growth of monetary aggregates.

Bottom: At a meeting of Mississippi
bankers in 1947—19 years before he
served as St. Louis’ Fed president—
Darryl Francis referred to conditions
on farms in Lee County.


policy views. Former staff economists at the St. Louis Fed

ing public opinion outside the System and bringing pressure

remember Jones as a hard-driving economist who insisted

upon the Federal Reserve, and Homer Jones decided that

on precise arguments and strong empirical support for

we would do this through publications.” 23 Accordingly,

any claim. According to Jordan: “Homer drove everyone

Jones marshaled his staff to conduct research for publica-

absolutely crazy. I think part of his method was to really

tion in the Bank’s Review and other professional journals.

make us angry. He was a total agnostic as far as both theory

Jones also introduced a series of publications that reported

and empirical evidence. He would needle everyone

and analyzed monetary growth rate trends and other

to, ‘Prove it to me. Where’s your theory? Say it better.

macroeconomic data. As noted by Gilbert, the roots of

Where’s your evidence?’ ”

the Bank’s online data and information services, such as

Francis was similar, according to Jordan: “Darryl was the

Federal Reserve Economic Data (FRED), “go back to the

Harry Truman of the Federal Reserve System. He lived what

leadership of Homer Jones.” (See the essay “The History

was meant by the ‘Show Me’ state philosophy. He really

of FRED” on page 149.)

believed, ‘Well, OK, let’s shine some light on it, and let’s see,’

Economic research played an important role in sup-

and he would stand his ground. He didn’t need a sign on his

porting Francis and other St. Louis Fed presidents in their

desk that says, ‘The buck stops here.’ Everybody knew that

monetary policy positions. The most famous and influen-

with Darryl, and he wasn’t willing to be intimidated though

tial paper was written by Jordan and fellow St. Louis Fed

the pressures were at times very considerable—especially

researcher Leonall Andersen, titled “Monetary and Fiscal

after Arthur Burns became chairman of the Board of Gover-

Actions: A Test of Their Relative Importance in Economic

nors—to stop what we were doing at this Bank.”

Stabilization.” In that 1968 St. Louis Fed Review article, the

Like Francis, Jones felt strongly that monetary policy had

authors reported empirical evidence that the growth of

gone awry. According to R. Alton Gilbert, another St. Louis

the money stock had a larger, more predictable and faster

Fed staff economist at the time, Jones’ “view was that the

impact on the growth of nominal gross national product

only way we could change it [i.e., policy] … [was by] influenc-

(GNP) than did fiscal policy actions. Francis used the


Andersen and Jordan results and subsequent research to

innovated by bringing cutting-edge monetary policy and

promote a monetary policy based on controlling the growth

macroeconomic research to policymaking. Eventually, that

of monetary aggregates. At FOMC meetings, he frequently

innovation was copied by other Reserve banks and by the

referred to his staff’s forecasts of output and inflation under

Board. According to Jordan: “Our focus in St. Louis was …

alternative money stock growth assumptions.24

on trying to be useful to the president in the decisions he

Homer Jones retired in 1971, and Darryl Francis retired in

had to make. … That was rare in the Reserve banks and

1976. Although they were not able to persuade the FOMC

probably nonexistent at the Board of Governors. … I’m

to change course during their tenures, the Fed’s organi-

sure that we were sending our president off much better

zational form ensured that their views were heard, both

prepared to engage in the important decisions that had to

publicly and in policy deliberations. Pressure was brought

be voted on than just about anybody else.”

to bear on the Fed to reduce inflation, and eventually the
Fed did accept responsibility for inflation. Under Chairman

St. Louis approach. Jordan said, “I think because of the com-

Paul Volcker, the Fed finally adopted policies to control

petition among peers, over the subsequent years, the other

money stock growth and to lower inflation. The Fed never

Reserve bank presidents … wanted to build up a staff that

embraced monetary targeting wholeheartedly, but did

was able to help prepare them to also sit at the table and

come to recognize the importance of maintaining a credible

engage in a serious way as a policymaker.”

commitment to price stability.

The legacy of the maverick Reserve bank thus demon-

The Great Inflation era of the 1970s illustrates how the

strates that the Fed’s decentralized structure, though estab-

Fed’s structure and FOMC composition promote open and

lished 100 years ago, remains vital and continues to benefit

frank discussion of policy views and ultimately can lead to

the Federal Reserve System and the nation.

better policymaking. Further, this episode in Fed history
illustrates how the System’s organization encourages
innovation within the Reserve banks. The St. Louis Fed


The other Reserve banks then sought to emulate the

1. When the Fed was established, most short-term bank loans were made on a
discount basis, the discount being the difference between the amount borrowed

15. See Francis, pp. 6-7.
16. “Some Problems of Central Banking.” Address before the 1973 International
Monetary Conference, June 6, 1973 (reprinted in Burns, p. 156).

and the amount repaid on a loan. Hence, the act of acquiring currency or reserves

17. Interview with Jerry Jordan, St. Louis Fed, April 11, 2012.

from the Fed was known as “rediscounting” because the Fed paid out less currency

18. “Monetary Targets and Credit Allocation.” Testimony before the Subcommittee

(or reserves) to the member bank than the face value of the loans presented at the

on Domestic Monetary Policy, U.S. House Banking, Currency, and Housing

discount window. When the rediscounted loans approached maturity, the Reserve
bank would return them to the member bank for collection, and upon maturity the
bank’s reserve account with the Fed would be charged for the full amount of the
original loan. An amendment to the Federal Reserve Act in 1916 permitted Reserve

Committee, Feb. 6, 1975.
19. Letter from Darryl R. Francis to Arthur F. Burns, January 14, 1972. Box D7, Folder
St. Louis Fed (2). Gerald R. Ford Library.

banks to make direct loans, known as “advances,” to member banks; these loans

20. See, for example, “Maverick in the Fed System,” Business Week, Nov. 18, 1967, pp. 128-34.

were secured by the same types of loans that banks could rediscount with the Fed.

21. Ibid.

For more on the distinction between rediscounts and advances and for a history of
the Fed’s lending functions, see Hackley.
2. The Fed has never received a congressional appropriation and has always depended
on its income to cover expenses and pay dividends to its member banks. In the
early days, earnings were a big concern, but over time, Fed officials understood
that maximizing revenue or profits was not an appropriate criterion for conducting

22. Oral history interview of Lawrence Roos conducted by Richmond Fed economist
Robert L. Hetzel, June 30, 1994.
23. Interview with R. Alton Gilbert. Federal Reserve Bank of St. Louis, Sept. 9, 2011.
24. See Hafer and Wheelock (1991) for more on the monetarist-oriented research and
policy advocacy at the St. Louis Fed from the 1960s through the early 1980s.

policy. See Meltzer (p. 78) for a discussion about the Fed’s concern over earnings
during the System’s first years.


3. The Fed’s “discovery” of open market operations and development of a monetary

Andersen, Leonall C.; and Jordan, Jerry L. “Monetary and Fiscal Actions: A Test of Their

policy in the 1920s is discussed in Chandler, Friedman and Schwartz, Meltzer and

Relative Importance in Economic Stabilization.” Federal Reserve Bank of St. Louis

references therein.
4. Before 1936, the chief executive officers of the Federal Reserve banks held the title

Review, November 1968, Vol. 50, No. 11, pp. 11-24.
Burns, Arthur F. Reflections of an Economic Policy Maker: Speeches and Congressional

of “governor,” as did the chairman of the Federal Reserve Board. (Other members

Statements, 1969-1978. Washington, D.C.: American Enterprise Institute for Public

of the Board were simply referred to as “members” of the Board.) The Banking Act

Policy Research, 1978.

of 1935 designated all members of the Board as governors (and changed the name
of the Board to the Board of Governors) and changed the title of the chief executive
officers of the Reserve banks to “president.”
5. See Meltzer (pp. 467-86) on Eccles’ views and the legislative history of the Banking
Act of 1935.
6. See also Wheelock (1991, 1992) and references therein for more information about
the Fed’s policy goals and strategy during the 1920s and early 1930s.
7. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amended
the Federal Reserve Act to remove Class A directors of Reserve banks from the
process of appointing Reserve bank presidents and first vice presidents. At present,
those officers are appointed by the Class B and C directors with the approval of the
Board of Governors (Section 4 of the Federal Reserve Act [12 USC 341]).
8. See Waller for more on the rationale for central bank independence and how the
Fed’s structure contributes to its political independence.
9. H.R. 28, the Federal Reserve Accountability Act of 1993, Hearing before the Committee
on Banking, Finance, and Urban Affairs, House of Representatives, Oct. 19, 1993, p. 35.
10. See Friedman and Schwartz (Chapter 9) and Romer.
11. See Meltzer (Chapter 7) for a discussion of policy and events leading to this agreement.
12. See Maisel (p. 12).
13. “The Current Recession in Perspective.” Remarks before the annual meeting of the Society
of American Business Writers, Washington, D.C., May 6, 1975 (reprinted in Burns, 1978).
14. “The Basis for Lasting Prosperity.” Address to Pepperdine College Great Issues Series,
Los Angeles, Dec. 7, 1970 (reprinted in Burns, pp. 112-13).

Chandler, Lester V. Benjamin Strong: Central Banker. Washington, D.C.: Brookings
Institution, 1958.
Francis, Darryl. “Inflation, Recession—What’s a Policymaker to Do?” Federal Reserve
Bank of St. Louis Review, November 1974, Vol. 56, No. 11, pp. 3-7.
Friedman, Milton; and Schwartz, Anna J. A Monetary History of the United States, 1867-1960.
Princeton: Princeton University Press, 1963.
Hackley, Howard H. Lending Functions of the Federal Reserve System: A History.
Washington, D.C.: Board of Governors of the Federal Reserve System, 1973.
Hafer, R.W.; and Wheelock, David C. “The Rise and Fall of a Policy Rule: Monetarism at
the St. Louis Fed, 1968-1986.” Federal Reserve Bank of St. Louis Review, January/
February 2001, Vol. 83, No. 1, pp. 1-24.
Maisel, Sherman. Managing the Dollar. New York: W.W. Norton & Co., 1973.
Meltzer, Allan H. A History of the Federal Reserve, Volume 1, 1914-1951. Chicago: University
of Chicago Press, 2003.
Romer, Christina. “What Ended the Great Depression?” The Journal of Economic History,
December 1992, Vol. 52, No. 4, pp. 757-87.
Waller, Christopher J. Independence+Accountability: Why the Fed Is a Well-Designed Central
Bank. Federal Reserve Bank of St. Louis Annual Report, 2009.
Wheelock, David C. The Strategy and Consistency of Federal Reserve Monetary Policy, 19241933. Cambridge: Cambridge University Press, 1991.
Wheelock, David C. “Monetary Policy In the Great Depression: What the Fed Did
and Why.” Federal Reserve Bank of St. Louis Review, March/April 1992,
Vol. 74, No. 2, pp. 3-28.


Employees at the Louisville Branch
showed up in force in the early 1940s
during a savings bond drive to
benefit the war effort. The sign on the
side of the teller cage (left) reads,
“The enemy is listening.”



In the Currency Sorting division in 1924, employees wearing aprons counted, sorted and bundled bills.


A Foregone
By David Wheelock

The selection of St. Louis for a Federal
Reserve bank seems to have been,
in the words of historian James Neal
Primm, a “foregone conclusion.” 1

In announcing its decisions on April 2, 1914, the Reserve Bank
Organization Committee (RBOC) made clear that St. Louis, along
with New York City, Chicago, Philadelphia, Boston and Cleveland,
were obvious choices: “In population these are the six largest
cities in the United States; their geographical situation and all
other considerations fully justified their selection.” 2
In the competition for Reserve banks, St. Louis had several
advantages. It was the nation’s fourth-largest city, with a population
of 687,029. Only New York City (4,766,883), Chicago (2,185,283) and
Philadelphia (1,549,008) were larger.3 St. Louis was also a regional
banking and commercial center, as well as a transportation hub.
Its banks provided financial services, and its businesses sold and
distributed manufactured goods throughout the Midwest, South
and Southwest. St. Louis was a manufacturing powerhouse, one


Fifth and Olive streets in downtown St. Louis in 1910. When it was awarded a
Reserve bank in 1914, St. Louis was the nation’s fourth-largest city.
One of the numerous options for downtown shoppers was Boyd’s.

with a diverse base. The city was the largest shoe distributor in the nation, the second-largest millinery market, the foremost producer of tobacco products and home to the nation’s largest brewery. 4
Good railroad connections were an important consideration for the location of a Reserve bank
because they ensured rapid delivery of currency and checks between the Reserve bank and the
commercial banks in its district, as well as between the Reserve bank and other Reserve banks.
With 26 trunk lines linking over 64,000 miles of rail and a prime location at the confluence of the
Mississippi and Missouri rivers, St. Louis’ transportation infrastructure made the city a strong choice
for the location of a Federal Reserve bank.5
St. Louis was one of only three cities designated as a “central reserve city” in the national banking
system—the structure and rules governing commercial banks with federal charters under the
national banking acts of the 1860s. New York City and Chicago were the other two. The designation
recognized and contributed to St. Louis’ importance as a banking center by enabling national banks



Missouri History Museum, St. Louis

Among the reasons for selecting St. Louis as a Reserve bank city was its
status as a banking center, commercial powerhouse and transportation
hub. Around the time of its selection, the city was also still basking in
the glow as host of the 1904 World’s Fair (top).

throughout the country to satisfy a portion of their legal
reserve requirements by holding deposits in national banks
in St. Louis. Being at the top of the reserve pyramid, national
banks in St. Louis and the other central reserve cities were
required to hold their legal reserves solely in the form of gold.
St. Louis was home to 44 banks and trust companies in
1914, including seven national banks. Its national banks ranked
fifth behind those in New York City, Chicago, Philadelphia and
Boston in terms of correspondent deposits.6 Although less
than 20 percent of the amount held by New York City banks,
the correspondent balances held by St. Louis’ national banks
far exceeded those held by banks in several other cities chosen
for Federal Reserve banks.7
Data on state-chartered banks and trust companies were
not available to the RBOC for all states. So, in evaluating
proposals for the location of Reserve banks, the committee
focused primarily on the size and prominence of a city’s
national banks. Among all U.S. cities, St. Louis ranked seventh
in terms of national bank capital, deposits and loans. The


seven national banks in St. Louis had combined capital of

tee held hearings in Boston, Washington, D.C., and Chicago

$29 million, deposits for individuals and firms of $62 million,

before meeting in St. Louis on Jan. 21-22, 1914. 10

and loans of $102 million.8

The RBOC consisted of Secretary of the Treasury William
G. McAdoo, Secretary of Agriculture David Houston and

Six cities may have been obvious choices for Reserve

Comptroller of the Currency John Skelton Williams. At the
time, Houston was on leave from Washington University in

banks, but the RBOC was charged with naming at least eight

St. Louis, where he was chancellor. In St. Louis, the RBOC

cities for Reserve banks and setting the boundaries for all

heard testimony from several nationally prominent residents,

Federal Reserve districts. The RBOC evaluated proposals

including David R. Francis, a former St. Louis mayor, Missouri

from 37 cities seeking Federal Reserve banks, including

governor and U.S. secretary of the interior; Rolla Wells, also

St. Louis, Louisville, Ky., and Memphis, Tenn., and held hear-

a former St. Louis mayor and treasurer of Wilson’s 1912 pres-

ings in 18 cities, including St. Louis, where they interviewed

idential campaign; Robert Brookings, a leading businessman

local bankers, businessmen and civic leaders. The committee

and benefactor of Washington University; Festus Wade, pres-

also relied heavily on a survey of national banks in which

ident of Mercantile Trust Co. and head of the St. Louis Clear-

the banks were asked to name their preferred location for a

ing House Association; Frank O. Watts, president of Third

Reserve bank that would serve their region. 9

National Bank and chairman of the St. Louis Clearing House

The RBOC held its first hearing Jan. 5-7, 1914, in New York

Association’s RBOC presentation committee; A.L. Shapleigh,

City, less than two weeks after President Woodrow Wilson

president of a leading national hardware company and

signed the Federal Reserve Act. Subsequently, the commit-

president of the St. Louis Businessmen’s League; and several



This map, one of the documents submitted to the Reserve Bank
Organization Committee in support of locating a Reserve bank in
St. Louis, shows retail trade territory of St. Louis, Chicago, Kansas City,
Denver, Minneapolis-St. Paul and Memphis.

other leading bankers and businessmen from St. Louis
and nearby states.11
In their testimony before the RBOC, officials of the
St. Louis clearinghouse presented letters they had solicited
from bankers and businessmen across the Midwest, South
and Southwest to support their bid for a large St. Louis-based
Federal Reserve district. Many of the letters were effusive
in their support of St. Louis’ bid for a Reserve bank, such
as one submitted by the officers of the Lumbermen’s
Exchange of St. Louis:
Whereas: St. Louis is the Gateway to the Great Southwest,
having connections, through its railroads, with a region that
is fertile in nature’s products and in manufacturing industries
which are in their infancy, which will from year to year be developed, and will out-rival all regions in fertility and productiveness:
Whereas: St. Louis be the Gateway to this wonderful region, all
commerce must and will move through St. Louis and:
Whereas: St. Louis is a Gateway between the North and the
South, and lying as it does in the center of the greatest country


on earth, St. Louis excels all other cities as a point of center
for the establishment of a Great Regional Bank and;
Whereas: St. Louis is situated in the midst of and is without
doubt the greatest manufacturing center in the United States,

celebration in 1939. Pictured
(from left) are Fed Gov. Matthew
Szymczak, Fed Chairman
Marriner Eccles, St. Louis Fed
President William McChesney
Martin Sr. and St. Louis Fed
Chairman William Nardin.


population of over thirty million people, who trade through
and in St. Louis, therefore:
Be it resolved: By the Board of Directors that the Lumbermen’s

having the largest Shoe, Beer, Vehicle, Implement, Tobacco

Exchange of St. Louis respectfully urges the Organization Com-

and Stove manufacturing plants in the world. The Dry Goods

mittee … to establish a Great Regional Bank in St. Louis.12

display is greater than any City in the United States, and as a

St. Louis Fed’s 25th anniversary

Whereas: Within ten hours ride of St. Louis is located a

The Implement, Vehicle and Hardware Association of

Lumber center St. Louis is without doubt the greatest in the

St. Louis was another of the many organizations offering

Country and;

strong support, writing:

St. Louis and Chicago already are the leading financial and
mercantile centers west of the Atlantic Seaboard, and the
two great centers of the enormous intermountain territory—
Chicago in the north and northwest and St. Louis in the south
and southwest. … We, as an Association, put ourselves on record
as urging the selection of St. Louis for the location of one of the
regional reserve banks.13

At the time that St. Louis
was vying for a Reserve

The St. Louis Association of Credit Men was no less clear

bank, the city stood out
in many areas of business,

in its support:

including the brewing of

Saint Louis, Missouri is the logical and natural location for

beer. The Anheuser-Busch
brewery, then and now,

the regional bank by its rank in population, its great facilities

was a landmark on the
south side of the city. The

as a railroad center, its rank as a manufacturing center and

brewhouse, shown in 1926,
was built in 1892.

distributor of merchandise, … stability and financial strength,
its volume of annual clearings and by reason of its importance

districts—the minimum specified in the Federal Reserve

in trade movements from contiguous territory, the states of

Act—and proposed a large territory encompassing much of

Missouri, Oklahoma, Texas, Mississippi, Arkansas, Louisiana,

the Midwest, South and Southwest United States for a district

Tennessee, Kentucky, Kansas, Nebraska, Southern Indiana

based in St. Louis.

and Southern Illinois.14
St. Louis boosters wanted a large territory for a Federal

In his testimony to the RBOC, Frank O. Watts, the clearinghouse association’s lead advocate, indicated that the territory

Reserve district headquartered in St. Louis. The clearinghouse

his group desired for a St. Louis-based district was similar to

association may have viewed the location of a Reserve bank in

the territory represented in a map submitted by E.C. Simmons,

St. Louis as a certainty. Perhaps for that reason, the associa-

chairman of Simmons Hardware Co. (shown in Figure 1 on

tion recommended the creation of just eight Federal Reserve

pages 58-59). According to Simmons, the shaded region


labeled “St. Louis Zone” represented the “legitimate bounds” of the region served predominantly by St. Louis manufacturers and
wholesalers. The map also shows areas where other cities, including Chicago, Denver, Kansas City and Memphis, had significant
business ties. The map clearly was intended to convince the RBOC that the commercial territories of Chicago and St. Louis were
of roughly equal size and largely distinct—Chicago in the Upper Midwest and St. Louis in the Midsouth and Southwest. Simmons’
map represented the commercial territories of Denver, Kansas City and Memphis as being much smaller, with those of Kansas City
and Memphis—two cities also vying for Federal Reserve banks—appearing as local submarkets within the larger St. Louis zone and,
therefore, perhaps less worthy candidates for Reserve banks.
Shapleigh, president of another St. Louis hardware distributor, also pushed for a large St. Louis-based Federal Reserve district.
In his testimony before the RBOC, Shapleigh argued:



Top: Employees clocked into work in 1924.
Bottom: In the Currency Canceling and Cutting division in 1923, employees halved
unwanted bills lengthwise and bundled them for shipping.

With the transportation facilities offered from Saint Louis and
with the immense stock of goods kept here … this district has

territory they recommended was economically diverse, with

looked upon Saint Louis not only as its financial central reserve

different types of agriculture and a strong manufacturing base.

city, but its merchandise central reserve city. A by-word in the

For example, Jackson Johnson, president of International Shoe

trade is “Saint Louis has the Goods.” The channels of trade follow

Co., argued the following:

the channels of transportation. The channels of banking follow

You would like to balance the borrowers with the lenders as

the channels of trade. These channels for this district all lead to

nearly as possible, and to that end we should have to take not

and from Saint Louis.15

only the manufacturing sections but the grain section along with

Proponents of a large Federal Reserve district based in

the cotton section. In the last few years, [the region] west of the

St. Louis stressed the advantages of the proposed territory’s

[Mississippi] River has produced from forty-five to fifty per cent

economic diversity. A key objective of the authors of the Fed-

of the cotton crop. If St. Louis covers Texas, Louisiana, Arkansas

eral Reserve Act was to facilitate the movement of funds from

and Oklahoma they will then have in their territory half of

regions of the country that had surplus funds to those where

all the cotton crops looking to this center [i.e., St. Louis] to be

money and credit were in short supply. Reformers observed

financed. Now to balance that I think that we should take

that interest rates rose, credit supply tightened and banking

along with Missouri, say, Kansas and a portion of Nebraska

crises occurred most often at those times of the year when

and southern Illinois.16

the demands for money and credit reached seasonal peaks.


large, St. Louis-based Federal Reserve district noted that the

A Mississippi banker expressed a similar concern. Although

Some of the seasonal variation in money and credit demand

located closer to Memphis, R.I. Peebles, cashier of the Bank of

reflected the seasonal nature of agriculture. Proponents of a

Boyle, Miss., wrote, “St. Louis can better serve us than Memphis


because Memphis feels the burden of making a cotton crop just
like we do and is so dependent on the cotton growing industry
that their funds are low at the time our funds are low.”17 In other
words, at the times of the year when banks in Mississippi
needed help satisfying their customers’ demand for loans,
which were closely tied to the planting, harvesting and marketing of the cotton crop, Memphis banks faced similar demands
and, thus, were of less help than St. Louis banks.
St. Louis was not the only city where local interests sought
support for their cause from bankers and businessmen in
nearby states. Many bankers and businessmen were contacted
for support by more than one city. For example, the St. Louis
clearinghouse sought letters of support from bankers and
firms in western Kentucky and Tennessee who were also being
courted by Louisville, Memphis and Nashville, Tenn., to support
their own bids for Reserve banks. Most bankers in Kentucky
and Tennessee expressed a preference for being members of a
Reserve bank in their own states, but many wrote or testified
Before it was decided which cities would be named headquarters for Federal Reserve districts,
communities in the running solicited letters of support from commercial banks and others.
St. Louis backers were happy to see that some bankers who were being courted by Chicago or
elsewhere would cross out the suggested city and pencil in St. Louis, as did this employee at the

that St. Louis was their second choice. For example, Thomas W.
Long, the cashier of the First National Bank of Hopkinsville, Ky.,
testified to the RBOC: “Louisville is our first preference in the
establishment of a regional [Reserve] Bank. … Next to Louisville

Exchange Bank of Milton, Ill., in early 1914.

our choice is St. Louis, beyond any possible question. …


[T]he majority of the national bankers in eastern Kentucky have

which had been sent to them by the Chicago clearinghouse

accounts in St. Louis. It would be very much to the advantage

requesting support for Chicago’s bid, with the name

of our community if we could not get in the Louisville district to

“Chicago, Illinois” scratched out and replaced with “St. Louis,

come to St. Louis.” 18

Missouri.” (An example is shown in Figure 2 on page 66.)

In its St. Louis hearings, the RBOC focused much of its

Others expressed their preference for membership in a

attention on the boundaries between possible St. Louis- and

St. Louis district in testimony before the RBOC. For example,

Chicago-based districts and possible St. Louis- and Kansas

David S. Lansden, a director of the Alexander County National

City-based districts. Chicago bankers proposed a territory

Bank of Cairo, Ill., testified, “We believe Cairo and … all of

that encompassed nearly all of Illinois and the northern tier

Southern Illinois should be in the St. Louis district.” 20 J.M. Winters,

of counties in Missouri, as well as several states in the Upper

president of Quincy National Bank in Illinois, testified, “We

Midwest and Great Plains. St. Louis’ supporters argued,

desire to be attached to the St. Louis district, believing that

however, that all of Missouri and the southern half of Illinois,

our interests are materially with that city.” 21 Noting that

including Springfield, would be served better by a Federal

Quincy banks regularly lend to customers in Missouri and

Reserve district headquartered in St. Louis. When asked by the

have developed business to the south and west, Winters

RBOC why Springfield should be located in a St. Louis-based

stated: “We have cultivated the West and Southwest for our

district, Francis, the former governor of Missouri, claimed,

investments and we believe it is very important to us that we

“The social relations between Springfield and St. Louis … are

be in the same district. … We feel that if we were cut off from

closer than they are between Springfield and Chicago. South-

this West and Southwest district, it would be almost a calamity to

ern Illinois is settled very largely by Kentuckians and Virginians,

us.” 22 St. Louis’ bid received less support from Springfield-area

and people from the South generally.” 19

bankers, however, and ultimately the RBOC placed Springfield

Many bankers in southern Illinois did prefer St. Louis and

in a Chicago-headquartered district while placing Quincy and

expressed their sentiments in letters and testimony to the

most of Southern Illinois in the Eighth Federal Reserve District,

RBOC. Several southern Illinois bankers returned a form letter,

based in St. Louis.



Top left: This map, one of the documents submitted to the Reserve Bank Organization
Committee in support of locating a Reserve bank in Kansas City, shows eight Reserve bank districts, with much of the southern half of the U.S. handled by the three cities of Kansas City,
St. Louis, and either Washington, D.C., or Baltimore.
Top right: This map, presented in support of a Reserve bank in Montgomery, Ala., shows eight
Reserve bank cities, including Denver and Louisville, Ky.
Bottom left: This map, presented in support of a Reserve bank location in New York, shows
10 Reserve bank districts. Among other places, banks would have been based in Denver,
Cincinnati and Baltimore.
Bottom right: This map, presented in support of a Reserve bank in Chicago, shows eight
Reserve bank districts, including a massive Chicago district that would encompass all
or part of 14 states.

The RBOC was also interested in how far west a St. Louis district should
extend. St. Louis firms did extensive business in the Southwest, particularly
in Texas and Oklahoma, but Texas bankers sought a Reserve bank headquartered in their state. Kansas City bankers also desired a Reserve bank and
proposed a district that included some of the territory sought by St. Louis,
including all of Oklahoma and parts of Missouri, Arkansas and Texas. A proposal for eight Federal Reserve districts submitted by Kansas City interests is
shown in Figure 3 in the top left.
At the RBOC hearings in St. Louis, Treasury Secretary McAdoo noted,
“Assuming that a Reserve Bank were established in Kansas City, and another
was established in St. Louis, the division of the territory would be, as
between Kansas City and St. Louis, very difficult.” In his testimony, Francis
argued that western Texas and all of Oklahoma should be in a St. Louis district. Further, in response to a question from Secretary of Agriculture David
Houston about placing western Missouri and Kansas in a separate district,


Long gone is the Transit department’s Country Check division,
but in 1923, there was plenty of
work at the adding machines
(left) and in sorting and stamping
(right). The Transit department
handled checks and cash items.


At the Little Rock Branch
in about 1940, employees
in the Money department
took inventory of stacks
of bundled bills and bags
of coins.

possibly headquartered in Kansas City, Francis replied, “Well, I

request of Kansas City bankers, the Joplin clearinghouse signed

should dislike to see Missouri divided in any way.” 23

a statement supporting Kansas City’s bid for a Reserve bank:

McAdoo asked Frank O. Watts his view of a suggestion “that

The Kansas City boys … are a little quicker on the trigger than

the regional bank should be established in Kansas City with the

the St. Louis boys. … I personally rather want to join the asso-

branch in St. Louis.” Watts replied, “I think they [i.e., Kansas City

ciation in St. Louis … but the clearinghouse passed a resolution

and St. Louis] serve rather different territories; and in the

favoring Kansas City. … [W]hen you go out to Kansas City, you

language of a certain distinguished Admiral, ‘there is glory

will find the busiest live wires out there you ever saw; they are

enough for us all.’” 24

certainly on their job, and Kansas City is full of that sort. We

Bankers in western Missouri, Oklahoma and Texas were

call it “pep.” The nicest lot of fellows you ever met, and if Kansas

divided in their preferences. A.H. Waite, president of Joplin

City was not out there, I think you would have no trouble about

National Bank in Missouri, testified that he personally favored

determining the location of a Federal Reserve Bank for St. Louis,

having his city in a St. Louis-based district, but that at the

but, naturally, they are ambitious.25


Some bankers in western Missouri and Oklahoma

The pneumatic tube system
enabled fast and easy delivery
of documents and other papers
from one department to another
at the St. Louis Fed. Early on, as
in this 1930s photo, a tube
operator was on duty full time,
taking the canisters that
arrived with a “whoosh” at the
central hub and then inserting
them into the destination’s
tube. The system remained in
operation until 2009.


As my Joplin friend said, the Kansas City people are very

testified that they would be satisfied being placed in either

quick on the trigger. They are a very nice bunch of fellows; we

a St. Louis- or a Kansas City-based Federal Reserve district.

are very fond of them; they came to Tulsa and we endorsed

However, they strongly opposed being tied to a Federal

them. Since that time we have become a little more familiar

Reserve bank in Texas. For example, O.H. Leonard, a

with the conditions, and it is a question in our minds whether

vice president of the Exchange National Bank of Tulsa,

the Committee [RBOC] would locate two banks in Missouri. …

Okla., testified:

[I]f you expect to locate a bank in Texas, we do not want to be

attached to that, because we have no business relations with

City district. … The only thing we want to guard against is

Texas, neither do we have any business relations with Denver,

being put in a southern district. The period of the year that we

Colorado. The only business relations we have where we would

need money they need money in the south.” 27

like to be attached to would be either Kansas City or St. Louis.26
L.W. Duncan, cashier of the First National Bank of Musk-

After visiting St. Louis on Jan. 21-22, 1914, the RBOC
traveled to Kansas City, where it held hearings Jan. 23. The

ogee, Okla., and representative of bankers in his region, testi-

RBOC then visited Lincoln, Neb., and Denver. The committee

fied similarly: “We want to be in either St. Louis or the Kansas

then visited several other cities before concluding hearings
in Cleveland, on Feb. 17.

Besides the hearings, the RBOC relied heavily on the
results of its survey of national banks to guide the selection
of Reserve bank cities and district boundaries. The survey
asked bank executives to identify their top three choices for
the location of the Reserve bank to which they desired to be
connected, as well as to recommend at least eight, but no
more than 12, cities nationally for Reserve banks.
Responding to the survey were 6,724 bank leaders, each
naming at least one city as his or her bank’s preferred location
for a Reserve bank. Fifty-nine cities, including St. Louis,
Louisville and Memphis, were the first choice of at least one
respondent. No respondents listed Little Rock as their first
choice, but one listed the city as its second choice.


Top: In the Clearinghouse division in 1923, employees sorted and stamped checks.
Middle: In the Transfer and Check Exchange department in 1923, young men sorted and
bagged bundled items for transfer. The bag on the left was headed for the Federal Reserve
Bank of Kansas City.
Bottom: At the currency counter in the Little Rock Branch in the 1940s-50s, an employee
inserted bills into the counting machine.

St. Louis was the first choice of 307 survey respondents and the second
choice of 583 respondents. The city’s total of 890 first- and second-choice
votes was exceeded only by New York City and Chicago. Figure 4 on page
75 shows the relative number of votes each city received, with the size of a
city’s dot being proportional to the number of first- and second-place votes it
received. The 12 cities chosen for Reserve banks are marked with green dots.
Figure 5 on page 75 shows the relative number of times each city was
named when voters were asked to recommend at least eight, but no more
than 12, cities nationally for the location of Reserve banks. Only New York
City, Chicago and San Francisco were recommended more often by
respondents than St. Louis.28
The RBOC survey of national banks was clearly important in the committee’s selection of Reserve bank cities and their respective districts. The RBOC
felt compelled to explain why, for example, it put a Reserve bank in Richmond,
Va., but not Baltimore, in Atlanta but not New Orleans, and in Kansas City but
not Denver, Lincoln or Omaha, Neb. Regarding the last decision, the committee explained that its survey of bankers had played a major role in the decision:
Careful consideration was given to the claims of Omaha, Lincoln, Denver,
and Kansas City, which conflicted in this region. … [Banks in] the greater part


St. Louis: A Popular Choice for a Federal Reserve Bank
of New Mexico asked for Kansas City. Western Texas, Kansas,
and Nebraska [banks] unanimously protested against going to
Denver. Kansas [banks] desired Kansas City; Nebraska [banks]
preferred Omaha or Lincoln; and Texas [banks] wanted either a
Texas city or Kansas City or St. Louis. … With Montana, Idaho,
Arizona, Texas, Kansas, and Nebraska [banks] in opposition,
it was clearly impossible to make a district with Denver as
the location of a bank. … It seemed impossible to serve

the great section from Kansas City to the mountains in
any other way than by creating a district with Kansas City
as the headquarters.29
A few cities protested when they were not selected for
a Federal Reserve bank. A committee of bankers and other

The Federal Reserve Act of 1913 created a Reserve Bank Organization Committee to draw the boundaries of
the districts (between eight and 12 of them) and then to pick a headquarters city for each district. Besides
holding hearings around the country, the committee surveyed national banks to gauge their preferences
for Reserve bank cities. More than 6,700 national banks responded. The relative total number of first- and
second-choice votes is reflected in the dot size above. Cities chosen by the committee for a Reserve bank
are shown in green; other cities receiving votes are shown in blue. St. Louis came in third in the voting,
after New York City and Chicago.
SOURCE: U.S. Reserve Bank Organization Committee, first-choice vote for Reserve bank cities, July 29, 1914.

citizens of Baltimore submitted a formal request to the Federal
Reserve Board to designate Baltimore, rather than Richmond,
as the location of a Reserve bank for the Fifth Federal Reserve
District.30 The appeal was denied, but a branch of the Richmond Bank was opened in Baltimore.
Although St. Louis was among the 12 cities chosen for a
Federal Reserve bank, the RBOC assigned much of the territory sought by St. Louis boosters to other districts, notably the
Eleventh District headquartered in Dallas and the Tenth District headquartered in Kansas City. Still, when it was formed,

When those taking the survey were asked to recommend between eight and 12 cities for Reserve banks,
St. Louis placed fourth, after New York City, Chicago and San Francisco. Again, the dot size indicates
the total number of times a city was recommended. The winning cities are shown in green.
SOURCE: U.S. Reserve Bank Organization Committee, location of Reserve districts in the U.S., May 28, 1914,
pp. 356-57. See


The St. Louis Fed’s first board of directors, in the 1920s.

the St. Louis-based Eighth District was the sixth-largest in

Walker Hill and Oscar Fenley as Class A directors; and Murray

terms of land area and the third-largest in terms of population,

Carleton, W.B. Plunkett and LeRoy Percy as Class B directors.

after the Second (New York) and Seventh (Chicago) districts.

On Sept. 30, 1914, the Federal Reserve Board announced the

States in the Midwest and South historically had relatively

appointment of three Class C directors: William McChesney

fewer national banks than other states, however; consequently,

Martin Sr., who was named Federal Reserve agent and

the Eighth District ranked only 10th in terms of national bank

chairman of the board of directors; W.W. Smith, who was

capital and deposits.31

named deputy Federal Reserve agent and vice chairman;
and John W. Boehne.

Once it had designated 12 cities for Federal Reserve banks,

boardroom of the Mississippi Valley Trust Co. of St. Louis. One

the RBOC began a process that led to the incorporation of

of the board’s first acts was to appoint Rolla Wells as governor,

the Reserve banks and the election of their boards of directors.

William W. Hoxton as deputy governor and C.E. French as

On May 18, 1914, representatives of five national banks

cashier of the Federal Reserve Bank of St. Louis.

designated by the RBOC met at the offices of the St. Louis


The board of directors met for the first time Oct. 28 in the

All 12 Federal Reserve banks opened for business on Nov. 16,

clearinghouse to sign the organization certificate of the

1914. The Federal Reserve Bank of St. Louis occupied tempo-

Federal Reserve Bank of St. Louis. The RBOC then sent ballots

rary quarters on the fourth floor of the newly built Boatmen’s

to all national banks in the Eighth District to elect a board of

Bank building, at the corner of Olive Street and Broadway in

directors for the St. Louis Reserve Bank. On Aug. 10, 1914,

downtown St. Louis. On opening day, the Bank’s staff con-

the RBOC announced the election of Frank O. Watts,

sisted of six officers and 17 other employees. On that day, the



Security forces stood guard in 1937 at the vault at the
Little Rock Branch of the St. Louis Fed.

Bank established a discount window and set its discount rate at 6 percent. The Bank made its first loan, in the sum of $1 million, on
Nov. 18. The Bank began to provide clearing services a few days later. By Dec. 4, the Bank was offering to collect checks and drafts
drawn on any Federal Reserve bank and on all Eighth District member banks.
Besides lending to member banks through its discount window and providing clearing services, another important function of
the Federal Reserve was to supply currency to its member banks. The Federal Reserve Bank of St. Louis made its first delivery of
currency to a member bank Dec. 1, 1914.32
The Federal Reserve Bank of St. Louis moved to new, though still temporary, quarters in 1915, and eventually to its present
location, at the northeast corner of Broadway and Locust Street, in 1925. Full-service branch offices were also opened in Louisville,
Memphis and Little Rock in 1917, 1918 and 1919, respectively.


Figuring prominently among the criteria for choosing the
This 1896 photo shows the

by rail or, locally, by armored truck. In those days, a city’s size,

locations of Reserve banks and branches in 1914 were the

business connections and transportation networks were crucial

size of a city’s banks and its commercial and transportation

for a Reserve bank to serve its district banks. With nationwide

networks. In 1914, federal law prohibited interstate branch

branch banking and rapid electronic communications, such

banking, and many states disallowed any branching within

infrastructure is no longer as important for the location of a

their state borders. Paper checks, bank drafts and cash moved

Reserve bank. Electronic payments sent over the Internet have

intersection of Broadway and
Locust Street in downtown
St. Louis. The St. Louis Fed was
built in 1923-25 on the corner
occupied in this photo by the
light-colored building on the left,
called the Singer Building.

largely replaced paper checks, for example. Still, many of the
benefits of a structurally decentralized Federal Reserve System
remain as important today as they were in 1914. The structure
remains important, for example, in the gathering of economic
information for use in monetary policymaking, as well as in
communicating policy actions to the public. A local presence
also facilitates and enhances banking supervision, community
outreach and economic education, to name just a few of the
responsibilities and services a Reserve bank provides within
its district. The Fed’s decentralized structure also ensures that
diverse views are heard in monetary policy deliberations.
Over the years, the Federal Reserve Bank of St. Louis has
continued to provide payment services and discount loans
for its member banks and other depository institutions, while
seeing its responsibilities grow to include important roles in
monetary policymaking, banking supervision, the provision of
services to the U.S. Treasury and community outreach.


1. See Primm. This commemoration of the Bank’s 75th anniversary includes a discussion of the
problems of the U.S. banking and monetary systems that Congress sought to overcome by
establishing the Federal Reserve System. The book also includes background on the selection
of St. Louis as the location for a Federal Reserve bank. See
2. See United States. Reserve Bank Organization Committee. Decision of the Reserve Bank

13. Ibid.
14. Ibid.
15. See United States. Reserve Bank Organization Committee. Federal Reserve District Divisions
and Location of Federal Reserve Banks and Head Offices—Saint Louis, Missouri, p. 1,618. See

Organization Committee, April 2, 1914 (With Statement of the Committee in Relation Thereto,

16. Ibid, pp. 1,667-68.

April 10, 1914), p. 24. See

17. R.I. Peebles, cashier, The Bank of Boyle, Miss., to Mr. F.O. Watts, Jan. 17, 1914. United States.

3. The population data are from the census of 1910. The three cities later chosen for branches of
the Federal Reserve Bank of St. Louis—Little Rock, Louisville and Memphis—had populations
of 45,941, 223,928 and 131,105, respectively.
4. See Smith.
5. Rail line miles figure stated in A.L. Shapleigh’s testimony before the RBOC. See

Reserve Bank Organization Committee, 1914, Box 2653, Folder 2: #34, Miscellaneous States. See
18. See United States. Reserve Bank Organization Committee. Federal Reserve District Divisions
and Location of Federal Reserve Banks and Head Offices—Saint Louis, Missouri, pp. 1,730-31. See

United States. Reserve Bank Organization Committee. Federal Reserve District Divisions

19. Ibid., p. 1,646.

and Location of Federal Reserve Banks and Head Offices—Saint Louis, Missouri, p. 1,615.

20. Ibid., p. 1,765.

6. Correspondent deposits, sometimes referred to as interbank deposits, are deposits held on
account for other banks. Correspondent banks often provide services, especially payment

21. Ibid., p. 1,781.
22. Ibid., p. 1,783.

services, for their respondent banks. National banks in St. Louis held a combined $90 million

23. Ibid., p. 1,647.

of deposits for other banks. New York City national banks held by far the largest amount of

24. Ibid., p. 1,606.

correspondent deposits, with $742 million, and Chicago national banks held $279 million. See
United States, Reserve Bank Organization Committee. Decision of the Reserve Bank Organi-

25. Ibid., pp. 1,709-10.

zation Committee, April 2, 1914 (With Statement of the Committee in Relation Thereto, April 10,

26. Ibid., p. 1,715.

1914), Table D, p. 15. See

27. Ibid., p. 1,736.

7. For example, national banks in Kansas City ($55 million), Dallas ($6 million) and Atlanta

28. The number of first-, second- and third-place votes and recommendations for the locations of

($4 million) held substantially less correspondent balances than did St. Louis’ national banks.

Federal Reserve banks is summarized in United States. Reserve Bank Organization

National banks in Louisville and Memphis held $12 million and $2 million of correspondent

Committee, First Choice Vote for Reserve Bank Cities, July 29, 1914. See http://fraser.stlouisfed.

deposits, respectively.

org/publication/?pid=604. See also United States. Reserve Bank Organization Committee.

8. New York City ranked first in national bank capital, deposits and loans. Its 35 national banks
had combined capital of $249 million, deposits of $772 million and loans of $1.1 billion. For
comparison, Louisville had eight national banks, with combined capital of $8 million, deposits
of $20 million and loans of $28 million. Memphis had three national banks, with combined
capital of $2 million, deposits of $7.5 million and loans of $7 million. See United States,
Reserve Bank Organization Committee. Decision of the Reserve Bank Organization Committee,
April 2, 1914 (With Statement of the Committee in Relation Thereto, April 10, 1914), Table E, p. 15.
9. The Federal Reserve Act required all national banks, i.e., all commercial banks with a federal
charter, to join the Federal Reserve System. Membership was made optional for statechartered banks that met minimum capital requirements. State-chartered member banks
were further required to comply with reserve and capital requirements applied to national
banks and to submit to examination and regulations prescribed by the Federal Reserve Board.
10. For the locations of all RBOC hearings and a list of witnesses heard and exhibits presented
at each location, see United States. Reserve Bank Organization Committee. Index of Witnesses and Exhibits for the Hearings before the Reserve Bank Organization Committee.
11. For a complete list of witnesses and transcripts of the hearings, see United States. Reserve
Bank Organization Committee. Hearings Before the Reserve Bank Organization Committee—
St. Louis, Missouri. See
12. See United States. Reserve Bank Organization Committee. 1912-1914, Box 2653,
Folder 1: #33 Missouri Cities Al to W, from Records of the Federal Reserve System.

Location of Reserve Districts in the United States, May 28, 1914, pp. 356–57.
29. See United States. Reserve Bank Organization Committee. Decision of the Reserve Bank
Organization Committee, April 2, 1914 (With Statement of the Committee in Relation Thereto,
April 10, 1914), p. 22. See
30. See United States. Reserve Bank Organization Committee, 1914, Box 2661,
Folder 1: #95, Brief on Behalf of the Citizens of Baltimore Before the Federal Reserve Board.
31. As of March 4, 1914, the District’s 458 national banks had $83 million of capital and
$379 million of deposits. By comparison, the Tenth District had 836 national banks with
$93 million of capital and $521 million of deposits. See United States. Reserve Bank
Organization Committee. Decision of the Reserve Bank Organization Committee, April 2, 1914
(With Statement of the Committee in Relation Thereto, April 10, 1914), Table A, p. 10.
32. The information in the preceding two paragraphs is from the Annual Report of the Federal
Reserve Bank of St. Louis for the year ended Dec. 31, 1915. See

Primm, James Neal. A Foregone Conclusion: The Founding of the Federal Reserve Bank of St. Louis.
St. Louis: Federal Reserve Bank of St. Louis, 1989.
Smith, Eugene. Annual Statement of the Trade and Commerce of St. Louis, for the Year 1913, Reported
to the Merchants’ Exchange of St. Louis. St. Louis: R.P. Studley & Co., 1914, p. 30.


The St. Louis Fed has always been located in downtown St. Louis (second building from the left). Fans of the St. Louis
Cardinals baseball team swarmed the streets after the team won the World Series in 1926.


Reaching Our

Today, Louisville, Ky., Memphis,
Tenn., and Little Rock, Ark.—the
St. Louis Fed’s branch city locations—are known for their leader-

ship in such areas as logistics and shipping, health care and medical
research, music and other entertainment. A hundred years ago,
they were better known for gristmills, cotton exchanges and lumber.

By David Wheelock

Then, and now, these three cities were the economic powerhouses
of their regions. They were also banking centers; in fact, two of the
three were in the running for a Federal Reserve bank.
The branches in all three cities started operations soon after
the Federal Reserve Bank of St. Louis opened for business in 1914:
Louisville opened its doors in 1917, Memphis in 1918 and Little Rock
in 1919. (For a look at what the branches are doing today, see the
essay “St. Louis Fed Branch Offices” on page 139.) What follows is a
little history on why these cities were chosen as branches.


Employees of the Louisville Branch posed with their flood emergency equipment in 1937.
During “the big flood of 1937,” the Branch closed for business, but 20 employees stayed
on the premises for five days, without going home, to manage the emergency and to clean.

Louisville, Ky.

The growth of Louisville’s manufacturing sector was
also explosive. Between 1899 and 1909, the real (inflation-


adjusted) value of manufactured product in Louisville rose
The population, industrial base and banking industry of
25 percent. Although growth subsequently slowed, the
Louisville all grew rapidly in the years following the Civil
total employment and output of the city’s manufacturing
War, especially toward the end of the 19th century and
firms exceeded those of all other Kentucky cities in 1914.
the beginning of the 20th century. The city’s population
In that year, Louisville firms produced 46 percent of the
increased by more than five times between 1890 and 1914,
state’s industrial output. The city’s leading industries
from 43,194 to 235,114. This expansive growth spurred busiincluded distilled liquor, railroad repair, ground flour and
ness and residential development within the city: apartment
grains, metals and machinery, and printing and publishing.2
buildings, skyscrapers and the trappings of modern life.1

As in much of the nation, banking was volatile in
The Louisville Branch
of the St. Louis Fed was
located in this building
at the corner of Fifth
and Market streets

Louisville during the 19th century, which saw numerous
bank failures and general banking instability. Despite these
difficulties, the city was a leading regional banking center.

in the 1920s.

Louisville boasted the first national bank south of the Ohio
River, and its bank clearinghouse was established immediately following the Civil War.




Top: When the Louisville Branch moved into new quarters in 1958, Gov. J.L. Robertson of the Federal Reserve
Board came to cut the ribbon. He was flanked by Louisville employees from the Check Collection department.
Today, the Branch occupies leased space in downtown Louisville.
Bottom: Oftentimes, “outreach” is a literal endeavor for the St. Louis Fed. In 1947, bankers and
others visited the farm of J.I. Lester near Princeton, Ky. Among those in attendance was an
economist from the St. Louis Fed who gave a talk on pastures.

In the years that followed, Louisville’s banking industry

lesser, the independent to the dependent, to reverse the

continued to expand. By 1889, 22 banks, including

natural order of things, to violate precedent, and therefore

10 national banks, were located within the city’s limits.

it is not seriously to be considered.” 5

Louisville’s banks provided much of the capital that was

The RBOC did not choose Louisville for a Reserve

used to develop the city’s industrial base and burgeoning

bank. Instead, the city and the western portion of Ken-

livestock industry, as well as to finance the construction of

tucky were placed in the Eighth Federal Reserve District,

railroads and bridges.3 When the Reserve Bank Organiza-

headquartered in St. Louis. In 1916, Louisville’s represen-

tion Committee (RBOC) surveyed national banks for their

tatives petitioned the Federal Reserve Board for a branch

preferred locations for Federal Reserve banks, 73 percent of

office of the St. Louis Fed, arguing that large amounts of

banks in Kentucky selected Louisville as their first choice. 4

bank deposits were being diverted away from their city to

Louisville was among 37 U.S. cities to petition the RBOC

St. Louis, thereby degrading the integrity and strength of

to be chosen as the headquarters of a Federal Reserve

banks in Louisville. Importantly, Louisville bankers argued

district. The city’s boosters argued that Louisville’s location

that a local branch was needed to properly administer and

and industrial and commercial prominence made it well-

discount the whiskey and tobacco paper, which was in

situated to serve the interests of both its region and the

widespread use throughout the region.6

nation. In its argument before the committee, Louisville left

A few St. Louis bankers opposed the establishment

no room for concession: “We have not seriously considered

of a Fed branch in Louisville. Louisville’s regional

Louisville being attached to some other reserve city. To

importance and national prominence, however, made it

attach it to Atlanta would be to attach the greater to the

nearly inevitable that a branch would be opened in the city.


In November 1939, prices were being recorded at the
Memphis Cotton Exchange before closing time. At the
turn of the 19th century, cotton was king in the area.
The exchange was founded in 1873, and by 1913, Memphis
had the largest inland cotton market in the world.

On Dec. 3, 1917, the first branch of the Federal Reserve Bank
of St. Louis was opened in Louisville. Two years later, the
Branch had 53 employees and served 95 member banks.7

Memphis, Tenn.

Located on the fourth Chickasaw Bluff along the Mississippi River, Memphis has served as a hub for commerce and
trade regionally, nationally and internationally throughout
most of its history. Like Louisville, Memphis developed
rapidly in the late 19th century, diversifying its economy
and investing heavily in infrastructure improvements.8
The city’s population grew rapidly, from 33,592 in 1880 to
64,495 in 1890 to 102,320 in 1900. By 1914, Memphis’
population was estimated to be 143,231, making it the
largest city in the state of Tennessee.9
At the turn of the 20th century, the cotton trade was
the dominant business in Memphis. Founded in 1873 in
response to the formation of cotton exchanges in New York
City and New Orleans, the Memphis Cotton Exchange



grew to international importance.10 According to the

passed, there were 27 banks operating in Memphis, includ-

Annual Statement of Trade and Commerce of Memphis, in

ing three national banks.14

1913 the city had the largest inland cotton market in the

Memphis was also one of 37 U.S. cities that petitioned

world, with receipts for some 1 million bales of cotton. In

the RBOC for a Reserve bank. Memphis saw itself as

that year, Memphis also reportedly had the world’s largest

having the amenities to meet the region’s economic

hardwood lumber market.11

needs: within 300 miles of 13 states, a well-developed

In addition to its cotton and lumber markets, Memphis

mail service, access to the Mississippi River for transporta-

had a developing manufacturing sector. Between 1909 and

tion and trade, and 17 rail lines connecting it to the rest

1914, the city’s manufacturing output grew by 29 percent,

of the country.15

led primarily by the production of oil and cottonseed

Whereas Memphis was the largest city in Tennessee and

products, tobacco goods and food preparations.12 In 1914,

ranked first in manufacturing output, the city was not the

the industrial output of Memphis exceeded that of all

first choice for the location of a Reserve bank among many

other Tennessee cities.

Tennessee bankers. In the RBOC survey of national banks
about their preferred location for a Reserve bank, Memphis



received fewer first- and second-place votes than did

Memphis’ first bank opened in 1834. Like many cities,

Chattanooga and Nashville—sister cities in Tennessee.

Memphis faced episodic banking instability throughout the

Ultimately, the RBOC placed Memphis, along with the

19th century. A nationwide banking panic in 1873, which

western part of Tennessee, in the Eighth Federal Reserve

coincided with a yellow fever epidemic in the South, nearly

District, headquartered in St. Louis. The St. Louis Fed

brought down all of Memphis’ banks. However, not a single

soon opened a seasonal office in Memphis to provide

Memphis bank failed when another panic struck in 1893.

discount window loans and other services to area member

Memphis’ banks were heavily involved in the financing of

banks during the cotton season. The Memphis office was

cotton agriculture, but also helped to finance the city’s

upgraded to a full-service branch in 1918. By the end of

economic diversification and growth at the turn of the 20th

1919, the Memphis Branch had 68 employees and served

century.13 In 1913, the year the Federal Reserve Act was

42 member banks.16

This building at Jefferson Avenue and Third Street (seen here in 1943)
housed the Memphis Branch from 1929 to 1972.


Little Rock, Ark.

Because of its location along the Arkansas River and
close proximity to the center of the state, Little Rock was
well-situated as the Arkansas state capital and as the state’s
economic leader. In 1914, Little Rock was the only Arkansas
city with more than 50,000 residents, accounting for
3 percent of the state’s population.17
Little Rock grew rapidly during the early 20th century,
doubling in size between 1890 and 1914, including
17 percent between 1909 and 1914. Construction
activity was brisk: The city’s first skyscraper (1907), the
Arkansas Capitol (1899-1914) and the municipal airport
(1917) were all constructed during these first two decades.18
Though small in stature, Little Rock was a city on the rise.
The leading industries of Little Rock in the early
20th century were lumber, cottonseed, and printing
and publishing. Lumber production and allied products
employed 39 percent of the Little Rock manufacturing
labor force and comprised 28 percent of the city’s total
manufacturing output.19



According to University of Arkansas historian John
Dominick, Arkansas state banks were chartered at an
“alarming rate” in the late 19th and early 20th centuries.
The number of banks increased from 83 in 1891 to a peak
of 425 in 1914. This haphazard growth brought with it a

series of bank failures, which, in Dominick’s estimation,

stable foundation from which the banking industry

occurred primarily as a result of an oversaturated market,

could flourish. 20

low capital requirements and poor bank management.

While clearly the most important city in Arkansas, Little

State legislators saw a need for more regulation. In 1913,

Rock was not seen as a national center for banking and

they passed legislation establishing a state bank depart-

finance. In the RBOC’s survey of national banks about

ment to regulate bank operations and institute a more

their preferences for the locations of Reserve banks, Little

Employees of the Transit
department paused from
their work handling checks and
cash items at the Little Rock
Branch in 1940.


Rock received no first-choice votes, one second-choice

quartered in St. Louis. In 1918, the Federal Reserve

vote and just two third-choice votes. The majority of the

Board granted a petition to establish a branch of the

state’s national banks listed St. Louis or Kansas City as

Federal Reserve Bank of St. Louis in Little Rock. The

their first choice. 21

Little Rock Branch opened Jan. 6, 1919. By the end

The RBOC placed Little Rock, along with the entire state
of Arkansas, in the Eighth Federal Reserve District, head-

In 1958, bags of coins were
taken into the vault of the
Louisville branch and
stored in cubicles.


of the year, the Branch had 38 employees and served
57 area member banks.22


12. See Webb.

1. See Yater, pp. xxii-xxiii.

13. See James and Young, pp. 579-83.

2. Preceding two paragraphs are from Sandmeyer, “Kentucky.”

14. Memphis Merchants Exchange, p. 38. However, the RBOC’s Location of Reserve

3. See McCabe, pp. 59-60.
4. See United States. Reserve Bank Organization Committee, 1914, Location of Reserve
Districts in the United States, p. 353.
5. See United States. Reserve Bank Organization Committee, 1914, Box 2654, Folder 1:
Arguments in Behalf of Louisville as a Federal Reserve City, p. 9.
6. See Federal Reserve System Board of Governors, pp. 8-10.
7. See annual reports of the Federal Reserve Bank of St. Louis from 1917 through 1919 at

Districts in the United States (Table F) reports that there were 22 banks in Memphis.
15. See United States. Reserve Bank Organization Committee, 1914. Location of Reserve
Districts in the United States, pp. 205-08.
16. See annual reports of the Federal Reserve Bank of St. Louis from 1917 through 1919 at
17. Compiled from “Cities Having 50,000 or More Inhabitants in 1914: Population at
Each Census, 1850 to 1910, with Estimates for July 1, 1914,” in Statistical Abstract of the
United States of 1914 (U.S. Bureau of Foreign and Domestic Commerce), Table 29, pp.

8. See James and Young, p. 213.

18. See Bell.

9. Compiled from “Area, Natural Resources, and Population,” in Statistical Abstract

19. See Sandmeyer, “Arkansas.” Table 31.

of the United States of 1914 (U.S. Bureau of Foreign and Domestic Commerce),
Table 29, pp. 42-43.
10. See Wrenn.
11. See Memphis Merchants Exchange, pp. 22-23.

20. See Dominick.
21. See United States. Reserve Bank Organization Committee, 1914. Location of
Reserve Districts in the United States, p. 351.
22. See annual reports of the Federal Reserve Bank of St. Louis from 1917 through 1919 at

Bell, James W. “Little Rock (Pulaski County),” in The Encyclopedia of Arkansas History
and Culture, 2013. See
Dominick, John. “Banking,” in The Encycopedia of Arkansas History and Culture, 2009. See
Federal Reserve System Board of Governors. 1916, Hearing Before the Federal Reserve Board
on Behalf of the City of Louisville, Petitioning for a Branch Federal Reserve Bank of the
St. Louis Reserve District. See
James, A.R.; and Young, J.P. Standard History of Memphis: From a Study of the Original Sources
(Knoxville: H.W. Crew & Co., 1912). This history of the city of Memphis provides the
reader with not only the historical development of this major southern city, but also
a glimpse into the way Memphians regarded themselves in view of both their history
and future in the early 20th century.
McCabe, James. R. “Banking.” In The Encyclopedia of Louisville, ed. John E. Kleber (Lexington:
The University Press of Kentucky, 2001), pp. 59-63.
Memphis Merchants Exchange. Annual Statement of Trade and Commerce of Memphis,
Tennessee, for the Year Nineteen Hundred and Twelve. Memphis: Memphis Merchants
Exchange, 1913. Available in by searching the title.

Sandmeyer, Henry W. “Arkansas,” in U.S. Census of Manufactures, 1914: Vol. II, Reports by
States with Statistics for Principal Cities and Metropolitan Districts. Washington, D.C.:
Government Printing Office, 1918, pp. 777-817.
Sandmeyer, Henry W. “Kentucky,” in U.S. Census of Manufactures, 1914: Vol. II, Reports by
States with Statistics for Principal Cities and Metropolitan Districts. Washington, D.C.:
Government Printing Office, 1918, pp. 473-97.
United States. Reserve Bank Organization Committee, 1914, Box 2654, Folder 1:
Arguments in Behalf of Louisville as a Federal Reserve City, from Records of the
Federal Reserve System. See
United States. Reserve Bank Organization Committee, 1914, Location of Reserve Districts in
the United States. See
Webb, Martin T. “Tennessee,” in U.S. Census of Manufactures, 1914: Vol. II, Reports by States
with Statistics for Principal Cities and Metropolitan Districts. Washington, D.C.:
Government Printing Office, 1918, pp. 777-817.
Wrenn, Lynette Boney. “Memphis Cotton Exchange,” in The Tennessee Encyclopedia
of History and Culture, version 2.0, 2011. See
Yater, George H. “Louisville: A Historical Overview,” in The Encyclopedia of Louisville, ed.
John E. Kleber (Lexington: The University Press of Kentucky, 2001), pp. xv-xxxi.



A Symbol
of Strength

During its first 10 years, the St. Louis
Fed lived a nomadic existence. After
opening for business Nov. 16, 1914, at
the Boatmen’s Bank Building at Olive

Street and Broadway (the current Marquette Building), the
Bank relocated several times within downtown St. Louis to
accommodate growth in staff.
Land for the current building at Broadway and Locust
Street was bought in 1918, but high construction costs
delayed the groundbreaking until 1923. The building was
designed by the architectural firm Mauran, Russell and
Crowell in a neoclassic style. It was constructed of Bedford,
Ind., limestone and Rockville, Minn., granite. Medallions

Construction on the St. Louis Fed’s current headquarters at
Broadway and Locust Street started in 1923, and the building
opened on June 1, 1925.

were carved into the stone with the coats of arms of the
United States and of each state the Eighth District serves.
When the Bank opened the doors of its new building
June 1, 1925, it had 219,000 square feet of floor space.
The building sits atop the Bank’s vault, which was
described in a 1925 internal Bank publication as “near burglar,
mob, fire, and explosive proof as science and engineering


skills can make them.” The vault’s 44-ton, 30-inch-thick

consideration were both a new building, and renovation

door remains in use today.

and expansion of its long-standing home. The Bank elected

Over the years, the St. Louis Fed’s headquarters has

to stay in the heart of downtown St. Louis and take on a

undergone several renovations. An annex, consisting of

major renovation of the entire building. Improvements

25,000 square feet, was added in 1946. In 1949, the Bank

included constructing a new attached tower, recladding

bought and renovated property adjacent to the Bank—the

the former Nugent’s building to provide a cohesive

former Nugent’s Department Store. In 1991, the Bank’s

exterior appearance while also improving security,

lobby, research library and mezzanine floor underwent

modernizing the conference and dining facilities,

major renovations.

renovating all staff work areas to better meet current

Following the turn of the 21st century, the Bank undertook an evaluation of its long-term space needs. Under


business needs, and enhancing the physical security in
the wake of the terrorist attacks of Sept. 11, 2001.

The St. Louis Fed was built on top of the
vault, which was described in a 1925 Bank
publication as “near burglar, mob, fire,
and explosive proof as science and
engineering skills can make them.” The
vault, still in use today, has a door that
weighs 44 tons and is 30 inches thick.



What does the St. Louis Fed actually do? Our key
leaders each explain their responsibilities and those

Our Work

of their staff—from everyday operations to the shortand long-term goals. Here and there, some of the
numbers behind this work are highlighted.
Programs and services that serve as the face of
the St. Louis Fed are highlighted as well.


In the 1920s, much of the customer service was provided face to face. For example, tellers were on hand to redeem savings bonds and conduct
other financial transactions. Today, service is provided in many high-tech ways, but in-person connections haven’t been forgotten.


Service Provider
By David Sapenaro

As with those of all organizations,
the Federal Reserve Bank of
St. Louis’ vision, goals and strategies
have evolved over the past century

to address changing times, key environmental factors and our own
aspirations. However, one constant that hasn’t changed (at least
in the two decades I have worked at the Bank) is a commitment to
provide valued services to our constituents and to be viewed by them
as a premier service provider.
How do we turn this commitment into real results, rather than just
management rhetoric? First, we listen to our customers. All Bank
functions, regardless of whom they serve, have mechanisms in place
to capture feedback, such as through formal surveys, social media and
one-on-one interactions, whether in person or over the phone. For
example, close to 550 financial institutions were visited by our Branch
regional executives over the past three years as a part of our regional
Financial Institution Touch program, which is designed to seek input
on local economic conditions and to answer questions about services


provided by our Bank. Second, we systematically use that

metrics to ensure that we meet or exceed targets, as well as

feedback to assess customer satisfaction and to identify

to identify and resolve problems in a timely manner. And

needs that could lead to new products and services. An

fourth, we assess our performance against external bench-

example comes from a survey of users of Federal Reserve

marks to provide additional insight into potential opportuni-

Economic Data (FRED), our signature online economic data-

ties to strengthen the value of our services.

base. They wanted enhanced graphing functionality, and

St. Louis Fed agricultural
economist Don Henry visited
the H.P. Smith Farm in
Hodgenville, Ky., in 1947 and
spoke on cost and return of
soil improvement in front of an
audience of farmers and bankers.


Following these processes isn’t complicated or obscure.

we delivered one-step graph downloading, mouse-sensitive

They are pretty much straight out of a textbook for a busi-

plot displays and other interactive capabilities. Third, we

ness 101 class. But they work because we are committed to

closely monitor our performance against targets that repre-

making them work and because we are disciplined enough

sent a “stretch” for us to achieve. At the executive level, we

to methodically follow them, refine them and assess their

monitor more than 50 quality and constituent-satisfaction

effectiveness. We didn’t achieve 100 percent of our targets


right out of the gate. We still don’t have it perfect. But


the journey continues.
Although listening to our customers is key to being a
premier service provider, equally important are employees



who have a relentless desire to innovate and a positive work
environment. We have both.
Innovation is the engine that drives ongoing constituent satisfaction. Although the core responsibilities of
the Bank have remained largely unchanged over the past


Ask the Fed: This monthly call-in program provides

century, how we meet the needs of the people we serve

an additional communication channel between Fed

has evolved. Listening to and leveraging feedback from

officials and leaders of state member banks and bank

customers has led to innovative services. Recent exam-

holding companies throughout the nation on emerg-

ples include:

ing and important financial and supervisory topics.


Dialogue with the Fed and its Spanish version,


Go Direct: This education and marketing

Diálogo con la Fed: These discussions with Bank

campaign, conducted on behalf of the U.S. Treasury,

economists and other experts are held periodically

was designed to encourage recipients of federal

at the Bank and its branches, providing information

benefit checks (such as Social Security) to switch

on the key economic and financial issues of the day.

to electronic payments, such as direct deposit.

The sessions are free and open to the public; questions

The campaign has resulted in an estimated

from the audience are always encouraged so that there

$1.15 billion savings for the Treasury and, therefore,

is a true dialogue. All discussions are archived in one

the American taxpayer.

form or another and are available to be viewed at any
time on the Bank’s website.


FRED: This is an online database of more than
236,000 time series of economic data from more than



60 sources. At no charge, users can download, graph

We also believe that a positive culture is the most

and track data. FRED and other products in the FRED

powerful, long-term employee motivator. As such, no

family, such as ALFRED, GeoFRED and FRASER, are

organization can be a premier service provider without

used worldwide, and their value is recognized exter-

a sustained positive culture. We are proud that Bank

nally by distinguished economists and columnists.

employees have consistently viewed the work environ-

Econ Lowdown: For teachers at all levels, as well

ment positively. In a national business and industry

as the general public, we’ve got the lowdown on

ranking, the Bank’s workforce commitment score

the basics of economics, personal finance and the

placed in the 93rd percentile among the more than

Fed itself. We’ve got videos, podcasts, lesson plans,

900 organizations participating in the survey. As with

newsletters and more for teaching in the classroom

our process-improvement efforts and our innovative

and for teaching yourself.

spirit, we are committed to providing an outstanding

The final ingredient in our journey to be a premier

work environment for our employees—it’s the right

service provider is a positive work environment. The Bank’s

thing to do for them, and it’s the right thing to do to

management believes an organization’s culture must be man-

serve our constituents.

aged on an ongoing basis, because it can either be an asset or


The Bank has received several awards over the past

a detriment to achieving organizational excellence. The Bank

few years that speak to the quality of our services and

makes ongoing investments in personal learning for employ-

operations. Among other honors, we received the

ees; examples include individual development plans, lunch ‘n’

Missouri Quality Award and were named one of the

learn sessions and similar educational programs, on-site train-

St. Louis Regional Chamber’s “Top 50 Businesses.” We

ing on timely topics, and tuition reimbursement programs.

view these awards as indicators that we are on the right

The work environment is also enhanced through employee

track when it comes to being a premier service provider.

contributions, including volunteers serving on a wide range

But this is a journey that has no end, because we are

of internal groups, such as the Diversity Council, the Green

always pushing ourselves to improve and to exceed our

Team, the Activities Committee and the Safety Committee.

constituents’ expectations.

A Competition
of Ideas
By Christopher J. Waller

The Research division of the Federal
Reserve Bank of St. Louis has long
been renowned for its cutting-edge
research, policy analysis and

provision of economic information to the public. This tradition dates
back to the 1960s, when Homer Jones was the director of the Bank’s
Research division. At that time, the St. Louis Fed took a very contrarian stance on how monetary policy should be conducted and backed
that stance with top-flight economic research.
Although theoretical arguments are necessary to win the war of
ideas, empirical evidence is needed to support those theories.
That requires data. Hence, for more than 50 years, the Research
division has melded the collection and analysis of relevant data with
frontier economic research to support the Bank’s presidents in their
monetary policy role.
Most of our research is in the academic tradition, in which we
encourage economists to identify and pursue good research questions on their own. The objective of academic research is to expand


St. Louis Fed President Darryl
Francis (at the head of the table)
discussed the discount policy and
borrowing records of member
banks with members of the board
of directors in October 1966.

the boundaries of knowledge about economics and policy.

policy and are willing to critique actions taken by the Federal

Thus, for the most part, we encourage our staff economists

Open Market Committee, the main policymaking body of the

to pursue their own ideas, rather than tell them which

Federal Reserve System. To evaluate arguments of academic

questions to work on.

critics and make use of good ideas and research for policy, the

We have found that the best policy advice comes from


Fed must have economists who work at the frontier of knowl-

economists who work at the frontier of economic thinking.

edge. Fed economists must be able to explain their own

Academic economists are often vocal in their views about

views in a rigorous way, as well as explain why an alternative

claim about policy is suspect. A healthy competition of ideas
allows the best theories and policies to win in the end.
At the St. Louis Fed today, we largely eschew “directed”
research. That is, we rarely tell one of our economists to
answer a specific question, let alone to do so in a very


short period of time. (An example of a directed research

question would be: Why did labor force participation rates


drop so much last month? The economist would track current economic data, particularly local conditions, and tell a


narrative to explain the data movements.) Until the 1960s,
however, directed research was the norm throughout the


Federal Reserve System. That changed in St. Louis under


Jones, who believed that research should help guide monetary policy and to do so meant adopting an academic-style
research focus. He demanded that the Bank’s economists
be at the forefront of economic thinking.
Academic research is valuable because the thinking

Academic research is rigorously vetted before publication
in peer-reviewed journals. It is forged in the fires of debate

about economic issues is unrestricted. It is proactive in that

and criticism. Academic research also takes the form of

it often focuses on interesting issues long before they come

program evaluation (economic autopsies) of major eco-

to the attention of policymakers. For example, in 2000, few

nomic events. It can take years to analyze and understand

would have thought that studying the housing market was

what happened and what policies or regulations need to be

relevant for monetary policy. Eight years later, housing was

changed. In this sense, it is timeless.

at ground zero. By that point, it was too late to start doing
research on the topic. Proactive research was required.

In contrast, directed research is time-sensitive and reactive
in nature. It often leads to quick and incomplete answers


that are not vetted by the economics profession.

Consequently, high-quality directed research requires a

Directed research is often done in the form of simpler

deep understanding of academic research, which usually

analysis that involves the gathering and organizing of

requires economists who are engaged in academic

facts, combined with a clear-cut narrative. This sort of

research at a high level.

analysis is often satisfactory for answering questions of
fact or when some information is required in short order,

academic and directed—are valuable; they are comple-

but such analysis is often not very deep. Furthermore,

ments, not substitutes. The research staff at the St. Louis

there is usually no post-mortem of the analysis; once the

Fed engages primarily in academic research because that

issue is off the front page, it is not looked at again.

forms the basis for the directed research and policy advice

Importantly, the basic information source for most
directed research is often the academic literature.

Anatol “Ted” Balbach, seen
here in 1984, headed the
St. Louis Fed’s Research
division from 1975 until 1992.
During his tenure, the division built on its reputation
as a main center for research
on the role of money in the
setting of monetary policy.


The key takeaway is that both forms of research—

that we provide to our president, our board of directors and
the general public.

Keeping a
Watchful Eye
By Julie L. Stackhouse

Banking supervision has changed
considerably over the past 100 years.
While the work of banking supervisors has always been different from

the portrayal in Frank Capra’s 1946 film, It’s a Wonderful Life, the
process has evolved from a point-in-time examination—during which
even the bank’s cash was counted—to a sophisticated approach—
whereby part of the examination might be conducted off-site using
electronic records from the institution.
Perhaps the greatest changes have come in the past five years.
As a result of the Dodd-Frank Act, which was signed into law in 2010,
the Federal Reserve now supervises and regulates all bank holding
companies, savings and loan holding companies, state-chartered
banks that are members of the Federal Reserve System, and any
nonbank that is designated as a systemically important financial
institution by the Financial Stability Oversight Council. Institutions
and industries previously outside of the Fed’s purview now must be




institution, they also look across institutions and business
lines to identify risks. For example, supervisors today
not only will look at the loan portfolio and compensation


practices of an individual institution, but also may conduct a
horizontal review of executive compensation or commercial


real estate lending.
In today’s dynamic environment, banking supervisors also
recognize that risks are not inherent solely in a bank’s loan

supervised with the same amount of skill, critical analysis

book. There are risks related to the processing of payments

and depth of knowledge that is employed in our banking

for third-party vendors, risks related to fair lending and risks

examination processes.

involving cybersecurity, to name a few. Banking supervisors

The changes in our financial and regulatory systems can
be seen in many attributes, many of which are integral to

even those that can emerge from consumer or service opera-

the banking supervision function of the Federal Reserve

tions or through inadequate infrastructure investments.

Bank of St. Louis:
The Fed is focused on forward-looking risk analysis and is


must understand and be able to integrate all sorts of risks,

Banking supervisors strive for a regulatory system that is
balanced relative to institutional risk: Banking supervisors

as concerned with systemic risk as it is with institutional risk:

understand that banks are natural innovators and need

Supervising a spectrum of institutions—from large and

to be able to respond to changing consumer demands

complex to small and community-oriented—requires the

and changing economic factors to be successful. But the

Fed to be adequately prepared to address the challenges of

operations of a community bank are not the same as the

today and to be able to anticipate, and effectively identify,

operations of a large bank. Community banks typically

the risks of tomorrow. While examiners continue to review

have a traditional risk profile that is easy to understand

the financial health and compliance effectiveness of each

and examine. Systemically important financial institutions,

on the other hand, are far more complex and subject to

bankers only) and Rapid Response program (for examination

many additional regulations, including enhanced prudential

staff only). These programs, which were largely originated

standards under the Dodd-Frank Act, capital stress testing

during the financial crisis, allow for important supervisory

and liquidity regulation.

and regulatory information to be communicated, in nearly

Banking supervisors work closely with their regulatory and
functional counterparts: In today’s environment, banking

Supervising a spectrum of institutions—from large and complex to

supervisors must maintain open lines of communication

small and community-oriented—requires the Fed to be adequately

with other state and federal regulators, banking trade
associations and community organizations that operate in

prepared to address the challenges of today and to be able to
anticipate, and effectively identify, the risks of tomorrow.

markets served by these institutions. They must understand the Fed’s traditional role in promoting U.S. financial
stability and the risks posed by payment and settlement
activities, and they must interact with colleagues in lending
and payment risk functions.
The Fed ensures that both examiners and financial institutions understand the laws, regulations and industry issues
Much has changed about

facing them: This responsibility is significant. The DoddFrank Act alone has 848 pages and, by some estimates,

banking supervision since
these St. Louis Fed
examiners were on the job

has resulted in more than 400 new rules for the financial

in Hot Springs, Ark.,

services industry. The St. Louis Fed has taken a leadership

of an exam might now be

in 1958. For example, parts

conducted off-site using a

role in aiding the banking supervision staff and the financial

bank’s electronic records.

industry in understanding the expectations contained within
laws and regulations through its Ask the Fed program (for


real time, to state and federal regulators and financial institu-

of our financial system. The challenges of today will not

tions. Effective communication is paramount to promoting

be the challenges of tomorrow. Banking supervision has

financial stability and ensuring the safety and soundness of

evolved to keep up with the speed of change and innova-

the U.S. banking system.

tion in the banking industry. Although this has never been a

The Federal Reserve’s centennial commemoration

perfect process, the lessons we’ve learned over the past 100

reminds us that the reason we’ve been effective as an

years, including during the most recent financial crisis, position

organization is that we’ve changed to meet the challenges

us for superior effectiveness in the next 100 years.

Banking Supervision:

The Fed has supervisory and regulatory authority over a variety of

The Basics

staff works to promote: 1) a safe, sound and stable financial system

financial institutions and activities. In general, the Fed’s supervision
that supports the growth and stability of the U.S. economy, and 2) a
fair and transparent market for consumer financial services.
These efforts are accomplished through:

Assessing the safety and soundness of supervised financial


Carrying out consumer compliance supervisory activities to
protect consumers and promote a fair and transparent market
for the services they need


Processing applications to acquire or merge with other institutions or to change ownership



Ensuring enforcement of laws and regulations

Fiscal Agent for
the U.S. Treasury

By Kathleen O’Neill Paese

In 1915, the 12 Federal Reserve banks
were designated as fiscal agents of
the United States. Today, the Reserve
banks provide support for the U.S.

Treasury Department’s accounting, collections, payment and debtmanagement functions. The Federal Reserve System is a trusted partner,
helping the Treasury meet its goal of transforming and modernizing
federal financial management.
The responsibilities for the Fed are great, as it is charged with supporting the essential financial-management services provided by the Treasury
and its bureaus to federal agencies and the public. For the fiscal year
ending September 2013, the Treasury auctioned more than $7 trillion in
marketable securities, collected $3.16 trillion in receipts and issued more
than $2.4 trillion in payments. In addition, the Treasury’s Bureau of the
Fiscal Service accounts for the nation’s debt to the penny each day. As
fiscal agents, the Federal Reserve banks ensure that the systems that
facilitate and track this extensive volume of financial transactions are
working properly; the banks also ensure that the flow of government
funds is efficient, dependable and secure.





needs, ensuring that the total debt outstanding is within
statutory limits.

systems into a single authoritative source for federal governAt the St. Louis Fed, we share the Treasury’s commitment

ment accounting information. The applications developed and

to innovation and efficiency. The St. Louis Fed’s Treasury

operated by St. Louis’ TFM department will provide the Bureau

division is composed of four departments: Treasury Financial

of the Fiscal Service and federal agencies with the ability to

Management (TFM), Treasury Agency Support (TAS), Treasury

produce financial reports that are more timely, accurate and

Collateral and Cash Management (TCCM) and the Treasury

reliable, while reducing the reporting and reconciliation burden

Relations and Support Office (TRSO). Through these, the

on federal agencies.

St. Louis Fed not only provides financial-management systems

Building on our proven record of leadership, the St. Louis

and operations support to the Treasury, but also performs an

Fed’s responsibilities were expanded in 2012 to provide critical

important leadership and coordination function for Treasury

support for the Treasury’s efforts to reduce the issuance of

support activities throughout the Federal Reserve System.

improper government payments. This resulted in the for-

The St. Louis Fed’s Treasury division has been instrumental

mation of a new office within the Treasury division: the TAS

in rewriting several of the federal government’s accounting

department. The Do Not Pay team in TAS is helping all federal

systems. Overhauling these systems is a multiyear endeavor,

agencies to confirm that the right recipients receive the right

one that is necessary for increasing the accuracy and timely

payments for the right reasons at the right times. By incorpo-

reporting of federal accounting information.

rating robust data analytics into the government’s payment

Innovation, likewise, is driving the St. Louis Fed’s efforts to


At the same time, we are working to consolidate multiple


functions, the St. Louis Fed is helping agencies identify and

develop state-of-the-art systems for forecasting and investing

eliminate improper payments. With the data analytics and busi-

federal government funds. These systems will enhance the

ness intelligence services provided by the Do Not Pay team in

Treasury’s ability to produce daily forecasts of its funds held at

St. Louis, government agencies are able to strengthen internal

the Fed and to determine the government’s borrowing

controls to reduce payment errors, waste, fraud and abuse.

In addition to Do Not Pay, TAS provides customer call center
support for a broad portfolio of Treasury programs. TAS interacts with federal agencies on the Treasury’s behalf, providing
outreach and onboarding services for a range of the Treasury’s

An employee of
the St. Louis Fed’s

financial-management applications and services. Collaboration

Treasury support
center assists a

between the Reserve banks and the Treasury is essential, not


only for ensuring the smooth functioning of government
financial systems, but also for establishing future plans to
enhance and evolve these systems to meet the changing
needs of government.
In 2013 and early 2014, the Treasury conducted a review

In 2001, the St. Louis Fed was selected as the Reserve

of all fiscal agent support in the Fed System with a desire to

bank responsible for establishing and leading the TRSO. The

better align similar functions and improve efficiency and cost

TRSO manages the Fed System’s overall relationship with the

effectiveness. In April 2014, the Treasury announced that the

Treasury—coordinating all System initiatives related to the

St. Louis Fed was selected as one of four “core” Reserve banks

Treasury—and serves as the central point of contact for policy

that will support the Treasury’s cash-management, accounting,

issues, new initiatives and problem resolution. The office

collateral and enterprise functions. The St. Louis Fed will be

monitors most of the fiscal agent support provided by the

taking on responsibility for five additional fiscal agent functions

12 Reserve banks. The TRSO serves a unique role among the

currently provided by other Reserve banks. Some of the trans-

Reserve banks, offering System-wide leadership and coor-

ferring functions (such as the Treasury Collateral Monitoring

dination of fiscal agent support to the Treasury. The TRSO

function and the Bank Management Service) and other current

identifies opportunities to improve and streamline existing

St. Louis Fed functions (such as all cash management func-

Fed System support for the Treasury, along with identifying

tions) will fall under the new TCCM department, which was

potential new support activities that would help the Treasury

established in mid-2014.

to achieve its strategic objectives.


Hot-button issues, such as the 2013 debt-ceiling
situation and the government shutdown, often

and save taxpayer dollars. And again, the TRSO was asked to

require the TRSO’s active engagement. The

manage a public education campaign to support the switch.

TRSO works with each Reserve bank and Treasury

The campaign is called Ready.Save.Grow. The move from

representatives to assess the operational impact

paper to electronic bond sales is expected to save American

of policy decisions and to determine appropriate

taxpayers approximately $70 million over the first five years

actions for keeping the government’s payment

of the program. Since being launched, Ready.Save.Grow. has

and support systems fully functional in the event

developed into a robust education campaign to help people

of any type of disruption or crisis.
In addition, in recent years, the TRSO has been tapped to

save through affordable, safe and convenient Treasury savings
options. These include the myRA Treasury retirement account,

manage two high-profile public education campaigns on behalf

announced by President Barack Obama in his 2014 State of

of the Treasury, both with the ultimate goals of increasing effi-

the Union address. A key task for the TRSO will be to raise

ciencies within the government’s financial systems and saving

awareness about and support the implementation of the

taxpayer dollars. The Go Direct program began in 2004 to

myRA Treasury retirement account.

encourage recipients of federal benefit payments to switch to

As fiscal agent, the St. Louis Fed’s Treasury division is

electronic direct deposit for those payments, thereby reducing

committed to providing exceptional support to the Treasury.

the Treasury’s issuance of costly paper checks. The Treasury

Whether developing new systems, providing support to

department estimates that the Go Direct campaign saved

agencies and the public, or leading and coordinating

$1.15 billion in taxpayer dollars and will save $1 billion more over

Reserve bank fiscal agent services, our goal is to help the

the next 10 years. By the time the Go Direct campaign con-

U.S. Treasury meet its strategic objective to transform

cluded in March 2013, the program surpassed the goal to have

federal financial management.

96 percent of all federal benefit payments made electronically.
In 2012, the Treasury discontinued the sale of paper savings
bonds and began selling bonds exclusively online. Again, the


goal was to make government transactions more efficient

Adapting as
Payments Evolve
By Karl W. Ashman

The Federal Reserve System plays an
integral role in ensuring an efficient
and reliable payment system, allowing consumers, businesses and other

organizations to be confident in making transactions. The Federal
Reserve Bank of St. Louis, in particular, has played a significant role in
helping the System respond as consumer payment preferences have
shifted over the years.
It wasn’t that long ago that checks were the dominant form of
payment. As recently as 2007, the St. Louis Fed alone was working
around the clock to process approximately 3.5 million checks per
day. Across the System, the Fed in the early 2000s had 45 checkprocessing sites. These were split among the 12 Reserve banks and
their branches, including the St. Louis Fed and its three branches in
Little Rock, Ark., Louisville, Ky., and Memphis, Tenn.
One of the challenges of having so many processing sites was
that many different methods, software programs and platforms were
used. Toward the end of the 20th century, the System embarked







on a redesign of its check-processing services. The effort,
called Check Modernization, was highly successful. It
also occurred as checks were rapidly losing favor as the
preferred method of noncash payments by consumers.
One study on the Fed payment system shows that the total
number of checks processed fell from about 50 billion in
1995 to about 37 billion in 2003. The System began consolidating its 45 check-processing sites in 2003, eventually
going with a single processing site—the Federal Reserve
Bank of Atlanta—by early 2010. In the Eighth District,
check processing for the Little Rock and Louisville branches
was consolidated in 2004, the Memphis Branch stopped
processing checks in 2008, and the St. Louis Fed processed
its last commercial check Feb. 20, 2009.
When the branches lost their check-processing responsibilities, many lost the bulk of their operations work. The
only such work that was left was providing cash services for
commercial banks. But without the check business to pay
for support and overhead costs, it was no longer economi-


Opening the Bank’s mail in 1923 wasn’t a job for
just a couple of people, but for dozens.

cally efficient to provide these cash services. The St. Louis
Fed pioneered an alternative that has since been adopted in
some Fed offices: cash depots.
With a cash depot, the Fed contracts with a third party,
such as an armored carrier, to act as a secure collection
point for Federal Reserve currency deposits. The depot
also distributes currency that depository institutions order
from the Fed. The work of counting deposits and preparing orders is done by a Fed office in another city, and the
Fed pays for the transportation between the Reserve bank
office and the depot operator.
Establishing cash depots made it possible to continue to
provide cash services to financial institutions on a timely
basis while cutting the Fed’s costs. In fact, this innovation
led to annual savings of $2 million to taxpayers.
Today, cash operations continue to be a significant
function within the St. Louis Fed. In 2013, the St. Louis Fed
and its Memphis Branch received and sent out about
3 billion Federal Reserve currency notes, shredded more


than 136 million notes deemed unfit for circulation and

The St. Louis Fed continues to examine the future of

sent more than 3,000 suspected counterfeit notes to

payments in the U.S., recognizing continued shifts in con-

the U.S. Secret Service for investigation.

sumer preferences and coming up with innovative ways to

These changes to the work done by the St. Louis Fed
have contributed to the ongoing evolution of its workforce.
At one time, most employees worked in operations; today,
more and more are skilled in technology and business
analysis, in addition to banking and economics.

As the “bankers’ bank,” the
St. Louis Fed handles billions of
pieces of currency a year.
In the process, it counts and
sorts the money, discards
currency that is worn out and
hands suspected counterfeit
notes over to the Secret Service.


ensure stability and efficiency of the payment system.

In the days when everybody
wrote checks, various
Federal Reserve banks—
including the St. Louis Fed—
processed millions of them
every day. And that meant
there were check records to
store—nine shelves high in
this St. Louis Fed storeroom
in 1967.


Keypunch operators were high tech in 1964.


Structure and
By Mary H. Karr

An earlier section of this
commemorative book discussed
the political compromises and
considerations that led to the

creation of the Fed and the placement of one of the 12 Reserve banks
in St. Louis. The same consideration—balancing the interests of
Main Street, Wall Street and Washington, D.C.—remains as relevant
today as it was in the early 20th century, when the Fed was created.
That these distinctions remain important to national well-being was
evidenced during the financial events of the early part of the current
century. Views about the ultimate causes of the financial crisis vary
widely, but all acknowledge that its impact was felt differently on
Main Street, on Wall Street and in Washington.
Even in “normal times,” it is beneficial to the nation to have a
decentralized central bank that reflects the needs and interests of
the entire country. The Washington part of the Fed—the Board of
Governors, an independent agency—oversees the regional Reserve
banks, sets supervisory policy for the financial institutions it regulates




in turn, informs the president’s actions and views on the

Each bank’s board is responsible for the general oversight

and leads the Federal Open Market Committee (FOMC),

of the bank and its management. Like directors of any cor-

the monetary policy arm of the central bank. The Federal

poration, the directors review the bank’s strategies, budget,

Reserve Bank of New York reflects the views of Wall Street

audits and financial performance. Directors also concern

and the largest banks, and the other 11 Reserve banks,

themselves with succession planning for key positions in

located throughout the country, reflect the views of their

the bank and with the performance of senior management.

districts—or, as we think of it, the Main Streets throughout
the nation.

In addition, six of the nine directors (the representatives
of banks are excluded) play a key role whenever there is a

The regional Feds, including the St. Louis Fed, reach out

need to appoint the bank’s top two officers—the presi-

to their districts in many ways. The most formal and endur-

dent, who also carries the title of chief executive officer,

ing way is through their boards of directors.

and the first vice president, who is also the chief operating

Directors play a key role in representing Main Street. At
each board meeting, they report on their local economies
by collecting information about their own businesses and


appropriate stance of monetary policy in the FOMC.

officer. These six directors appoint these officers, subject to
approval from the Board of Governors.
Each bank’s board of directors also reviews and recom-

industries and reviewing assessments they receive from

mends a rate that its bank should charge creditworthy

local contacts. This information can vary from the state of

commercial banks within its own district that are eligible to

the coal-mining industry throughout the world to the state

borrow short-term funds from the bank. The actual

of business for a local scrap-metal dealer or jeweler. All

rate to be charged is determined by the Board of

of this real-time information about the economy is used

Governors, but through their recommendations about

by the bank’s president and the research staff to develop

this rate, the directors can express their views on monetary

a more complete view of the state of the economy. This,

policy and credit conditions.

There is a key function of the banks in which the role of

the Board of Governors, it functionally reports to Wash-

the board members is specifically limited. As previously

ington. As a result, the boards of directors of Reserve

noted, the Washington part of the central bank regulates all

banks do not have a role in the supervision of district

bank holding companies and savings and loan holding com-

financial institutions.

panies, certain financial market utilities, designated system-

Reserve bank directors and employees are subject to a

ically important nonbank financial companies and all state

number of policies that relate to ethical conduct. Central

banks that are members of the Federal Reserve System.

banks are more credible and better able to accomplish

The Board of Governors is also responsible for supervising

their primary missions if they are accountable to, but

these companies and banks—a role that it has delegated in

independent of, the political branch of government. To

part to the Reserve banks. Because this duty “belongs” to

ensure that Reserve banks are independent of poli-

The board of directors
(here, circa 1940s) is
responsible for oversight
of the St. Louis Fed
and its management.
The directors also serve
as a link to Main Street,
gathering information on
their local economies and
sharing it with the Bank’s
president for use in discussions on monetary policy.


Directors Represent More than Bankers
Each of the Federal Reserve banks has a

may not be employees or directors of financial

nine-member board, as required under the

institutions. To further ensure wide representa-

Federal Reserve Act. The act sets out details for

tion (and complicate this discussion) within the

the selection or election of directors to ensure

six elected directors, each district’s commercial

representation of the public in each district.

banks are divided into three groups by size, and

Six of the nine directors must not be part of the
banking sector. Three directors, called Class C

the banks in each group elect one “banker” director and one “public” director.

directors, are chosen by the Board of Governors

The St. Louis Fed has three branches: Little

to represent the public in the district. These three

Rock, Ark., Louisville, Ky., and Memphis, Tenn.

directors may not be affiliated with (for example,

Each has a seven-member board. Three mem-

serve as a director or employee) or own stock of a

bers of each board are chosen by the Board of

financial institution. The chair and deputy chair

Governors and must generally meet the same

of each bank’s board are chosen from this group

qualifications as the Class B directors—that is,

of directors by the Board of Governors.

they represent the public and may not be affili-

Six directors are elected by the national and

ated with a financial institution. Four members

state member banks in the district. Of the six,

of each branch board are chosen by the St. Louis

three (Class A directors) represent the district’s

Fed’s board of directors and are business and

banks and three (Class B directors) represent the

community leaders or bankers.

public in the district. These latter three directors

tics, both directors and officers of the Reserve banks are

rules of conduct designed to prevent conflicts of inter-

restricted from many political activities. They may vote,

est. For example, a banker-director’s supervisory matters

donate money and express a personal opinion, but they

or applications to engage in a new business that would

may not run for political office, serve in the campaign of

normally be delegated to the Reserve bank for decision

anyone who is, or be active in a political party.

are instead referred to staff at the Board of Governors.

Reserve bank directors and employees also recognize the
importance of integrity and public trust. All are bound by


Employees are subject to a detailed code of conduct and
are trained to follow it carefully.


Over the past few years, Congress
and the general public have been
clamoring for the Federal Reserve to be
audited. This public outcry is not new:

By Michael D. Renfro

Since the Fed’s inception, bills have been introduced in Congress
calling for expanded auditing of the Federal Reserve. This demand is
probably rooted in the idea that all public entities should be transparent and accountable. The Fed can appear to be neither in the eyes of
some people because of the complexity of its monetary policy decisions and its independence from the executive branch. But, in fact,
the St. Louis Fed and the other 11 Reserve banks have been subject
to auditing ever since the Fed was founded. Here, we’ll explore an
abbreviated history of this auditing, with a focus on current activities.
The Federal Reserve Act of 1913, which established the Fed,
stipulated that the Federal Reserve Board (now called the Board of
Governors) should “order an annual audit of each Federal Reserve
Bank.” The act was not specific on how this examination should be
conducted, so staff of the Board took on the role of “bank examiner”


Keeping good records is
critical to accountability and
transparency. The St. Louis Fed
has always done so—even for
kitchen and cafeteria supplies
back in the 1920s.

by conducting audits of each Reserve bank every year.


Congress, in one of its challenges to the Board’s auditing

This approach had some distinct advantages: The examin-

approach, proposed in 1954 that what is now known as the

ers were familiar with Fed operations and, therefore, were

Government Accountability Office (GAO) perform an audit

very knowledgeable about Fed activities. However, this

of the Board, the Federal Open Market Committee and

arrangement created an appearance of a lack of indepen-

the Federal Reserve banks. Then-Fed Chairman William

dence because the auditors, while not employed directly

McChesney Martin Jr. explained that the Board had been

by the bank being audited, were employees of the Federal

audited for years by a Reserve bank audit department on a

Reserve Board.

rotating basis and recently had contracted with an account-


ing firm to conduct an independent audit to remove any
doubt about impartiality. In addition, another nationally


recognized audit firm was hired to accompany the Board
examiners on one of their 12 bank audits each year. These



arguments were persuasive; the GAO was not granted
broad, sweeping audit powers over all aspects of the Fed.

Additionally, while not required for nonpublic entities, the

However, challenges regarding the Fed’s approach to

external audit reviews the internal control environment of

auditing were ongoing over the next 40 years. Thus, in

each Reserve bank in accordance with the framework set

1996, the Fed hired an external auditor to conduct an inde-

up by the Committee of Sponsoring Organizations of the

pendent audit of two Reserve banks. This was a pilot pro-

Treadway Commission (a non-Fed body that gives guidance

gram to determine whether the concept was beneficial and

to organizations on internal controls and fraud deterrence).

could be applied more broadly to all 12 Reserve banks. The

The Fed voluntarily agreed to this review in an effort to be

results were primarily favorable; therefore, the Fed opted to

fully transparent and in alignment with the banking institu-

extend the annual external audits to all Reserve banks.

tions that it supervises.

Since then, the use of audited financial statements has

The Board and all Reserve banks publish their financial

expanded to include a combined set of financial statements

statements and external audit opinions online or in hard-

for all Reserve banks and a full set of footnotes, providing

copy annual reports. (Copies of the St. Louis Fed’s financial

information about the structure of the Fed and definitions

statements are available at In addi-

and explanations for all financial statement line items.

tion, key aspects of these financial statements are published


in an annual report for the entire Federal Reserve System.

approximately 300 auditors devoted 276,000 hours to

(This report is published, submitted to Congress annually

conduct audit work throughout the System.

and placed on the Board’s public website.) To further
transparency efforts, in August 2012, the Fed began pub-

ety of groups, both internal and external, and many of the

lishing unaudited quarterly financial reports for the Reserve

results are published for the consumption of the general

banks, a practice required by the Securities and Exchange

public. This growing trend toward more transparency has

Commission only for companies whose stocks are publicly

proved to be extremely helpful in expanding understanding

traded on an exchange.

of the Fed’s purpose, role and, more recently, the impact on

In addition to the annual audits conducted by an
external public accounting firm, the Fed is subject to
targeted audits by the GAO, the Fed’s own Office of


Certainly, the Fed is audited. It is audited often by a vari-

the Fed’s balance sheet resulting from the recent financial
crisis and the actions taken by the Fed to address it.
Although not listed on the Fed’s balance sheet today,

Inspector General, the Treasury’s Office of Compliance

accountability and transparency are assets to be valued,

and internal auditors who are housed in all Reserve banks.

protected and fostered if the Fed is to continue to live

The internal auditors also work collectively to coordinate

up to the vision and expectations of the authors of the

audit coverage of select System operations. In 2013,

Federal Reserve Act.

Earning the
Public’s Trust
By Karen L. Branding

Throughout the Federal Reserve’s
history, public opinion and dialogue
about the institution have ebbed
and flowed. When inflation or

unemployment is high, the Fed is often in the public eye. During
1991-2001, the period of the longest economic expansion in modern
U.S. history, the Fed faced generally little criticism. But the financial
crisis of 2007-09 put the Fed in the public spotlight in a way it had
not experienced since the deep recession and high inflation of the
early 1980s. Today’s 24/7 news cycle and rapid expansion of social
media have made the Fed the subject of daily discussion among not
only its traditional audiences of bankers and financial media, but also
mainstream commentators in online and broadcast media.
Congress did not design the Fed to roll over when criticized. The
Fed’s independent, decentralized structure ensures that unpopular
but necessary policy actions can be made to achieve results for the
economy overall. But with independence comes the responsibility for
being accountable. Today and throughout history, confidence in the


Today and throughout history, confidence in the Fed as an institution is contingent on the public’s trust—
trust in the Fed’s competence, dependability and integrity. Open and direct communication from the
Fed plays a vital role in earning that trust.

Fed as an institution is contingent on the public’s trust—
trust in the Fed’s competence, dependability and integrity.

beyond matters of the FOMC. Federal Reserve Bank of

Open and direct communication from the Fed plays a vital

St. Louis President James Bullard, like his predecessors,

role in earning that trust.

regularly addresses business and academic audiences. In

What had been a gradual movement toward more


But the priority the Fed puts on transparency goes

addition, he gives interviews frequently to financial and

transparency on monetary policy since the 1980s was accel-

business reporters here and abroad, leading to a better

erated by former Fed Chairman Ben Bernanke. Under his

understanding by the public of our central bank and

leadership, the Federal Open Market Committee (FOMC)

its monetary policy. He also meets regularly with the

effectively modernized Fed communications on monetary

congressional delegation from the Eighth Federal Reserve

policy, establishing several practices that provide the public

District, serving as a nonpolitical resource for economic and

a clearer view of the Fed’s actions and the tools it uses.

monetary policy analysis. Economists and leaders from our

Press conferences after four FOMC meetings now help

Bank also speak to industry and banking groups throughout

clarify what happened at the meetings and translate the

the Eighth District, providing updates on the economy and

long-standing technical statements handed out after these

gaining insights about the economic conditions on Main

meetings. A long-run goal for inflation is now explicitly

Street, which, in turn, contribute to the Bank’s thinking on

stated. A summary is regularly available of the projections

monetary policy. Events like our Dialogue with the Fed

that each FOMC participant brings to the FOMC table

series connect the general public with Fed experts, who

regarding gross domestic product, inflation, unemployment

translate today’s financial headlines and help people better

and the federal funds rate.

understand how the economy works.

Digital media are central to a more transparent Fed.


The St. Louis Fed launched its first website in 1995; today,
our websites receive more than 6 million visitors every
year. The Bank entered the social media space with Twit-


ter in 2010. Many of our Twitter followers today retweet
our posts, helping the Bank reach millions of people
around the globe each year with news and information



about the economy, monetary policy, banking, economic
data and other services. In 2013, the St. Louis Fed was

The Public Affairs
division has long
produced a variety of
publications for both
external audiences
and employees.


President James Bullard
welcomes the opportunity
to share his thoughts on
the economy and
monetary policy with
the public, here doing so
through a radio
interview in 2012.

named one of Business Insider’s “106 Finance People


Communication technology will keep changing radically.

You Have to Follow on Twitter.” And in this, our centen-

Paste-ups and typewriters of yesterday’s communications

nial year, we launched the Bank’s first public blog

shops are a distant memory. Social media have revolu-

( and opened the

tionized how news and other information are delivered

Inside the Economy Museum to further transparency

and shared, positioning organizations like the Fed to reach

and financial literacy.

vast audiences—territory enjoyed once only by businesses

Open, timely, transparent communication is also a

through paid advertising. Mobile devices have now sur-

priority with our employees, keeping them in the know

passed personal computers in how Americans access the

about Bank news and information, helping build stronger

Internet. By 2020, an estimated 50 billion devices will be

connections with colleagues and to the Fed’s purpose, and

connected to the Internet, enabling ever-greater hypercon-

equipping them to be ambassadors of the Fed with their

nectivity to other people, information and smart systems.

friends and neighbors.

By then—just six years from now—the aformentioned

St. Louis Fed stats will seem quaint and perhaps even inef-

Bryant—the first female vice president in the Federal Reserve

fectual. It is unimaginable how the technologies of 2050

System—and her staff were charged by then-Bank President

and beyond will evolve the communication function

Lawrence Roos with surveying hundreds of people in the

within organizations.

St. Louis phone book to determine whether the public under-

It is said that the past informs the future. In the 1970s, the
St. Louis Fed’s vice president over public information, Ruth

stood what the Federal Reserve did; she and her staff found
that some 95 percent didn’t. Armed with those results, Roos

In the 1970s, the St. Louis
Fed’s Ruth Bryant (left) was
instrumental in a campaign to
help educate the public about
the Federal Reserve and its
actions. Here, Bryant, the
first female vice president in
the Federal Reserve System,
attended a reception at the
White House in 1970 as part of
the annual convention of the
National Association of Bank
Women, Inc. to which she had
just been elected president.
With her are first lady Pat
Nixon (center) and outgoing
president of the association,
Bobbie Taylor.


helped convince his fellow 11 Reserve bank presidents that it

officers across the Federal Reserve System coordinate on

was a priority for the Fed to undertake a more coordinated

communications, transparency and accountability.

and comprehensive approach to diseminating public infor-

The Public Affairs team
took to the streets in the
1980s to take photos for a
Bank brochure.


As communicators, we must be well-versed in managing

mation and reaching out at each Reserve bank, dedicated to

for both change and continuity. At the Fed, the constant

helping the public to better understand the central bank and

in the midst of ever-changing media is the fundamental

its actions. The task was assigned to the newly formed Fed-

importance of open, straightforward, regular communica-

eral Reserve Subcommittee on Public Information, which still

tion—not only to keep the public informed but also to

exists today as a systematic forum where public information

earn its trust.

St. Louis Fed
Branch Offices

Reserve System was created that
Reserve banks saw the need for
additional offices to serve their

districts. St. Louis was certainly no exception. The Federal
Reserve Bank of St. Louis opened Nov. 16, 1914, and in short
order, branches were opened in Louisville, Ky., Memphis, Tenn.,
and Little Rock, Ark., in 1917, 1918 and 1919, respectively.
The roles of the branches have changed over the years. For
example, the Memphis Branch was started as a seasonal agency
(a limited-service office open only part of the year) to provide
discount window loans and other services to area member banks
during the cotton season. (See the essay “Reaching Our Constit-

Louisville, Ky.

© Katherine Welles


It wasn’t long after the Federal


Little Rock, Ark.

uents” on page 83 for more on the history of the branches.)

nature of the businesses and local economies in the Eighth

Today, the Memphis Branch staff is responsible for cash

District. Branches allow not only for a more efficient collection

services, bank supervision, community development and

of information, but also for deeper relationships through staff

economic education.

involvement in their local economies, producing a breadth and

Branches remain important in helping the St. Louis Fed
serve its region and fulfill its mission. One of the most

Branches gather some of this information through their

significant contributions of our branches is gathering anec-

local boards of directors and the District’s Industry Coun-

dotal economic information about their regions. These data

cils. Each board is a diverse group of local business leaders

help the St. Louis Fed president and our other economists

who meet eight times per year. They provide anecdotal

to understand local economic conditions.

information on a variety of industries, such as banking,

Gathering in-depth information for a district covering more


depth of information not possible from hundreds of miles away.

retail, health care and telecommunications. Again, this

than 180,000 square miles would be a challenging task to

information is passed on to the Bank’s president and other

accomplish from a single location, especially given the diverse

key staff, who consider it in monetary policy deliberations.

Industry Councils meet semiannually to keep an open

was established in 2009 as a means of discussing issues and

line of communication between the Fed and industry

conditions with local financial institutions that may not have

representatives throughout the District. The District has

established contacts with the Fed, may not be member

four councils, focusing on agribusiness, health care, real

banks or are located too far away for their executives to

estate and transportation. Each branch, as well as the main

attend Fed events. The branch executives visit each of the

office in St. Louis, supports one of the councils: Louisville

institutions in their zones at least once every two years.

supports the health care council; Memphis, transportation;

The Community Development function at the branches is

Little Rock, agribusiness; and St. Louis, real estate. The

another example where the St. Louis Fed’s deep knowledge

council members’ observations complement the data and

and strong relationships help local community-based organi-

information developed through the Federal Reserve’s Beige

zations and financial institutions. The Fed’s community devel-

Book, the St. Louis Fed’s Burgundy Books and meetings of

opment specialists are out in the communities they serve,

the Bank’s boards of directors.

identifying and addressing an expansive range of challenges

This flow of information is truly an exchange, not just a

confronting low- and moderate-income communities. The

one-way channel. It helps the public, business leaders and
community bankers—the groups representing Main Street—
to connect to the branches and, thus, the Fed. In turn, the
exchange allows the branches to disseminate economic
data and related information from higher levels of the Fed

informed decisions about their organizations.
The exchange of information takes place on a one-to-one
basis, too, as in the Financial Institution Touch (FIT) program
carried out by the branches’ executives. The FIT program

Memphis, Tenn.

© Shutterstock/ Natalia Bratslavsky

to key audiences, allowing these audiences to make more


relationships they develop also allow for gathering data about

Economic Education staff members at each branch use the

local community and economic development conditions, and

St. Louis Fed’s award-winning education programs to help

they allow the specialists to share their expertise and act as

local teachers better prepare for classroom instruction on

resources for information, technical assistance and regulatory

economics and personal finance.

guidance to financial institutions, community-based organizations, government entities and others.
Key areas of focus include affordable housing, the

Supervision and Regulation division, under the delegated
authority of the Federal Reserve Board, oversees the safety

Community Reinvestment Act, community and economic

and soundness of Eighth District bank holding companies,

development, small-business lending, issues related to

thrifts and state member banks. As part of this mission, the

credit access in underserved markets, neighborhood

Bank conducts on-site examinations with a staff of highly

stabilization and household financial stability. In addition,

trained examiners who are based out of the St. Louis head-

local specialists facilitate productive partnerships, bringing

quarters, as well as out of satellite offices in the Little Rock,

together various organizations to stimulate ideas and share

Louisville and Memphis branches.

insights, and serve as catalysts for local community and
economic development initiatives.
The branches also serve their local communities through


And finally, the Federal Reserve Bank of St. Louis’ Banking

All of these “branching out” efforts are aimed at
providing Fed services at the grass-roots level throughout
the District. These local connections also aim to ensure

educational outreach. The education programs admin-

that the many voices of Main Streets across the District are

istered by the branches are customized for local users.

heard by policymakers in St. Louis and Washington.

What’s Your Fed Connection?
For many people, their connection to the
St. Louis Fed has less to do with monetary
policy, banking supervision and the payment
system and more to do with economic
education, community development and
the sharing of data and economic research.
What follows are snapshots of programs
and services that, for many, are the face
of the St. Louis Fed.



Meeting with the Public and Taking the Discussion
beyond Financial Headlines
Recognizing people’s increasing interest in developments in
today’s economy, the Federal Reserve Bank of St. Louis started
a discussion series for the general public in 2011. Titled
Dialogue with the Fed: Beyond Today’s Financial Headlines,
this series focuses on one important topic at a time. Our
economists (or other experts at the St. Louis Fed) address the
issue of the day, after which the audience has a chance to pose
questions and to otherwise comment. Hundreds of people
have attended these free sessions, which have been held at the
St. Louis Fed’s main office, as well as in its branch cities.
The topics have run the gamut, from the financial crisis of
the recent past to virtual currencies of the future. In between, there have been programs
on the federal deficit, unemployment, European sovereign debt, fiscal sustainability, family
balance sheets, the U.S. payment system and even the St. Louis Fed’s centennial. Occasionally, the dialogues are held in Spanish—Diálogo con la Fed.
The St. Louis Fed has long held similar programs for specific audiences—bankers, other
business executives, teachers and local government officials, for example—but created the
Dialogue With the Fed sessions so that the general public also had access to our experts in
an open forum. Many of those who’ve attended these sessions say they leave with a better
understanding of what the Federal Reserve does.
The dialogues are another opportunity for the public to learn about the economy and the
Fed. The programs complement the Bank’s publications, websites, self-teaching courses
and social media (Twitter, Facebook, etc.). All of the past Dialogue with the Fed events are
available on the Bank’s website. Visit to
view these events or learn about upcoming sessions.


Dialogue with the Fed sessions
cover a wide range of topics.


Fostering a Stronger Economy
through the Classroom
Improved education about banking, economics, money and personal finance should foster a stronger economy. The Federal Reserve
Bank of St. Louis’ economic education effort, Econ Lowdown, seeks
to make a difference by providing K-16 educators and their students
with a variety of award-winning materials for use in the classroom.
These include lesson plans, online courses, videos, podcasts, interactive whiteboard applications, mobile applications and slides. Econ
Lowdown also provides professional development for educators who
teach economics and personal finance. These opportunities include
conferences, in-service programs, a monthly newsletter, online
courses, webinars and workshops.
Econ Lowdown is also a self-teaching tool for the general public,
providing mini courses and other information in a variety of formats
on such topics as establishing credit, paying for college and saving
for retirement.
This material has been developed by nationally recognized experts
and former educators. For example, the head of Econ Lowdown, Assistant Vice President
Mary Suiter, worked with the Council for Economic Education to write the National

The Economic Education staff provides
professional development for educators
who teach economics and personal finance.

Standards for Financial Literacy, published in 2013. The Bank’s Economic Education team
works with several other national, state and local organizations that promote and improve
economic education, in addition to the Council for Economic Ecuation. These groups
include the National Association of Economic Educators and the Jump$tart Coalition for
Personal Financial Literacy.
The Econ Lowdown staff also consults with the local education communities in
St. Louis and the three Eighth District branch cities: Little Rock, Ark., Louisville, Ky., and


Memphis, Tenn. Econ Lowdown has educator

leadership development and career planning.

advisory boards in all four cities. These boards of

The students compete for summer internships at

local teachers advise Bank staff on curriculum and

the Bank, too.

professional development.
The St. Louis Fed’s Economic Education depart-

All Federal Reserve banks produce educational
material on economics and personal finance. The

ment, in cooperation with the Bank’s Office of

content produced by the St. Louis team makes up

Minority and Women Inclusion, also appoints a

more than one-third of all content on the Federal

student board of directors each year. This board is

Reserve System’s economic education website,

made up of high school seniors; they visit the Bank

several times during the school year to learn about
economics and personal finance and to partake in

To see any of the St. Louis Fed’s materials, go to

The Three Most Popular St. Louis Fed Econ Lowdown Courses,
Measured by Enrollment
Supply and Demand: This course includes three interactive lessons that introduce
supply, demand and market equilibrium, using a fictitious chocolate shop to help
explain the concepts.
GDP and Pizza: This course is designed to help students in civics, economics and
social studies classes grasp the various aspects of gross domestic product. It uses an
illustration of a pizza to demonstrate the various points.
It’s Your Paycheck: Course participants learn about budgeting, about the
benefits of saving, about understanding credit reports and about the link
between education and income.



Bringing Data from around the World
to Your Desk, Phone or Tablet
Federal Reserve Economic Data—or FRED, as it’s known to millions of users
around the world—is the St. Louis Fed’s signature online database. FRED
is a free, public resource that includes more than 236,000 economic time
series from more than 60 regional, national and international sources.
Each time series is displayed in a chart on which data are plotted at
regular intervals over a certain span of time—such as gross domestic
product for every quarter from 1947 to the present. The data cover topics
with broad appeal—such as the consumer price index in the U.S.—as
well as niche topics—such as total electricity production for China (in
gigawatt hours, not seasonally adjusted).
A creation of the St. Louis Fed’s Research division, FRED goes beyond
simply providing data: It combines data with a mix of tools that helps
the user understand, interact with, display and disseminate the numbers. Users can, for example,
change the timeline, switch the data from daily to monthly or monthly to annual, and even transform data from levels (such as dollars) to percent change.
FRED is popular with economists, market analysts, government researchers, teachers, students and journalists, but anyone can access the service. Many changes have been made in
recent years to make FRED easier, faster and more convenient to use than ever:

FRED’s free iPhone, iPad and Android apps are convenient for those who need economic
data on the go.


FRED’s toolkit allows users to create custom graphs, share economic data and graphs via
email and social media, and receive alerts when their favorite series are updated. Data
can even be downloaded automatically via the Excel add-in.


Users can download FRED graphs as publication-quality files, share FRED charts on social
media or easily embed graphs into a web page. A FRED widget can also be integrated
into web pages so that visitors see a real-time snapshot of a select group of data series.




Users can create a dashboard allowing them

example), researchers often need to see what was

to assemble a collection of widgets that can be

originally reported. Users often access ALFRED to

shared, such as time-series FRED graphs, data

test economic forecasting models and analyze the

tables, data lists and individual observations.

decisions made by policymakers with the same

Those who use data-centric programs can

data that they used.

automatically retrieve series using FRED’s

Other Databases Available from the St. Louis Fed

application programming interface (API).


API toolkits exist for programs written in

Economic Research) is a digital library of eco-

Python, PHP, Java, Ruby and .net.

nomic, financial and banking materials covering

FRED easily integrates with researchers’ soft-

the economic history of the U.S., from the Amer-

ware packages so that users can smoothly

ican Revolution to the present. The more than

perform sophisticated statistical analysis on

450,000 items include speeches, data and statisti-

FRED data.

cal publications, government documents, archival

More than 2 million people per year from almost

collections, photos and maps. The St. Louis Fed’s

every country in the world take advantage of what

centennial website is hosted on FRASER at

FRED has to offer. If you want to join them, start


Other FRED Tools Available from the St. Louis Fed
GeoFRED allows users to map FRED’s data at

CASSIDI (Competitive Analysis and Structure
Source Instrument for Depository Institutions)
is a one-stop shop for information on banking

county, state, metropolitan statistical area and

competition. CASSIDI helps users find banking

international levels.

markets and the branch structure for depository

ALFRED (ArchivaL Federal Reserve Economic

institutions. CASSIDI can also perform “what if”

Data) is a database that concentrates on vintage

analysis on banking market structures. Map-

data. In ALFRED, users can retrieve versions

ping options make it easy to view banking mar-

of data that were available on specific dates in

ket boundaries and view branch locations in the

history—whether from a day ago or decades ago.

banking market.

Although economic data are commonly updated
(advance estimate, second estimate and third estimate of each quarter’s gross domestic product, for


FRASER (Federal Reserve Archival System for


The History of FRED
No history of the Federal Reserve Bank of St. Louis would be complete without an entry—or chapter—on its leadership in providing
economic data for the masses. From simple beginnings about
20 years ago, Federal Reserve Economic Data, or FRED, has come
to be known around the world by people who care about the numbers driving today’s economies.
FRED is a descendent of the data publications created by Homer
Jones, who was the research director of the St. Louis Fed from 1958
to 1971. Jones was a proponent of making economic data widely
available. His goal was to provide information not just to policymakers but to members of the public—information that would allow
them to judge for themselves the state of the economy and the
outcome of policy.
The technology of the time was paper, so the data were printed
and sent out via the U.S. postal system. Employees from the 1970s
and 1980s have said there was intense pressure to get the main data


publication—the weekly U.S. Financial Data (USFD), still popular today—out on Thursday
afternoons. Reporters were constantly calling, asking for the numbers so that they could
publish them in the next day’s newspaper. The St. Louis Fed would also get calls from
economists, students and college professors, among others.1
These paper data publications translated well to online posting. FRED got its start
in 1991 as a free electronic bulletin board (a precursor to the Internet) and offered “free
up-to-the-minute economic data via modems connected to personal computers,” 2
providing data from the USFD. The response was described as “staggering” and “overwhelming.” 3 Initially, FRED had 620 users who were given access to 30 data series that
could be downloaded at a modem speed of up to 14.4 kilobits per second.


computer located in a special Office Computing
Services area. The computer provided a window
to the Internet, but only for employees who had a
business need.
Over the next 20 years, FRED evolved quickly. By
2004, FRED had more than 2,900 economic time
series and offered data downloads in Excel and text
formats. Graphs of the data were also possible.
By November 2010, FRED had expanded to more
than 24,000 data series, which included more than
21,000 regional data series. Today, FRED has more
than 236,000 regional, national and international
economic data series, with the data coming from
more than 60 reporting agencies around the world.

It operates on a high-speed Ethernet service (with
download speeds in the millions of bits per second),

Because users were limited to one hour a day,

provides sophisticated graphing software, is avail-

they were advised to read the instructions in

able via apps on smartphones and tablets, can be

advance to make the most of their time. Eventu-

mapped, is accessible via Excel and is used in class-

ally, data series from other St. Louis Fed publica-

rooms all over. What began as a simple, printed

tions were added, with FRED housing more than

data publication has grown into a sophisticated and

300 series in 1993.

successful vehicle for sharing important economic

The next innovation for FRED was moving to the
Internet in 1995. FRED contained 865 data series
by then, and the site was accessed an average of

data with anyone around the world.

Interview with employee Pam Hauck, Federal Reserve Bank of St. Louis,
June 21, 2012.


“Introducing FRED…” Federal Reserve Bank of St. Louis Eighth Note,
May/June 1991.



6,000 times per week. At the time, there were only
an estimated 12 million people on the Internet.
So that at least some employees could experience FRED, the St. Louis Fed granted access to a



Keeping Up with Research
from Economists around the World
In an effort to disseminate economics research worldwide, the Federal Reserve Bank of St. Louis hosts IDEAS
(, a website where more than
1.6 million working papers, articles, books and even
software components from economists around the world
can be browsed and searched by anyone at no charge.
Many of these can be downloaded, too.
IDEAS uses Research Papers in Economics (RePEc) data,
with RePEc being one of the world’s largest open bibliographies of academic material. RePEc ( is a
collaborative effort of hundreds of volunteers in more than
80 countries whose goal is to enhance the dissemination
of research in economics and related sciences.
RePEc was started to help those interested in economics
keep up to date on the latest research, rather than force
them to wait for such work to appear in journals, which
usually have relatively long vetting and publishing processes. In many cases, the frontier of economic research advances through the publication of working papers, which is
why RePEc puts a special focus on these publications. More than 3,800 working paper
series submit papers to RePEc. This is not to say that articles in journals are excluded;
indeed, submissions come from 2,000 journals. In addition, material comes from more
than 1,700 archives (including leading publishers, such as Elsevier and Springer) in
more than 80 countries.
IDEAS—one of many services that display or enhance RePEc data for public consumption—makes it easy for anyone to see the papers, articles and work from other


economists that are part of the giant RePEc database. Other services specialize in certain parts of

like are all work and no play, there’s the IDEAS

the data. For example, Economics Departments,

Fantasy League. Players log into the fantasy

Institutes and Research Centers (EDIRC) lists

league using their RePEc Author Service creden-

nearly 13,000 such institutions around the world.

tials to run a virtual economics department, the is a blog aggregator for

goal of which is to improve its ranking relative

discussion about economics research. RePEc

to those of other departments in the league. The

Biblio is a hand-selected collection of relevant

league is yet another way to learn about econo-

articles and papers on a wide variety of econom-

mists and their work.

ics topics; the information is organized as a tree,

IDEAS and other RePEc services can be

and the topics narrow as you follow its branches.

reached via the IDEAS or RePEc websites.

These particular services (and more) are affiliated
with the St. Louis Fed’s Research division.
Researchers in economics or a related field are
invited to register and create their own online
profiles via the RePEc Author Service, also hosted
by the St. Louis Fed’s Research division. Nearly
40,000 have already done so. After registering,
they receive a monthly mailing, detailing the
popularity of their works, their ranking and newly
found citations. RePEc rankings are computed
according to a variety of criteria, including such
things as articles published, citation counts and
number of downloads.


Lest anyone think that RePEc, IDEAS and the


Researching How Families Can Strengthen
Their Household Balance Sheets
The Center for Household Financial Stability is a research initiative
launched by the Federal Reserve Bank of St. Louis in May 2013. The
center is focused on the rebuilding of the household balance sheets of
struggling American families. Its research focuses on three main topics:

What is the state of the American balance sheet? What
can we say quantitatively about the overall health of the
household balance sheet?


Why does it matter? What are the economic and social
outcomes—at both the household and macro levels—
associated with varying levels of savings, assets
and net worth?


What can be done to improve household balance sheets? What are

A public conference held by the
Center for Household Financial Stability in 2014.

the implications for future research, public policy, community practice, financial institutions and households?
A basic premise of the center is that families improve their financial stability through
broad-based economic growth, higher net household incomes and, especially, stronger
balance sheets. Financially stable families face less economic risk and more economic
mobility within and across generations. As financially healthy families spend, save and
invest more, the national economy grows, too.
The center’s work includes conducting and publishing research on key balance-sheet
issues, developing a household balance-sheet index and organizing research and policy
conferences and public forums to better understand the balance-sheet issues affecting
struggling families and communities.


Key Findings in 2013

Families that were younger, that had less than a college education and/or
that were members of a historically disadvantaged minority group (AfricanAmericans or Hispanics of any race) suffered larger wealth losses in the
Great Recession of 2007-09 and have been slower to recover their wealth
since the recession than families that were older, had a college education or
were white or Asian.


Although the status of American household balance sheets had improved
somewhat, the average American family still had not fully recovered the
wealth lost during the recession by the end of 2013. The slow recovery of
wealth was due primarily to housing, which only began to rise in value at the
beginning of 2012.


Today’s seniors—who were born before the end of World War II—fared
better than younger people during the recent recession. Seniors were more
resilient going into the recession, as they had more liquid assets, more
stock-market wealth and much less debt than younger people did.


Between 2005 and 2013, student loan debt per capita in the U.S. grew by
176 percent to $3,407. On average, the increases in student debt since 2005
were larger in Eighth District states than in the nation.

Also Available from the Center for Household Financial Stability

In the Balance: A research brief offering new perspectives on timely
balance-sheet issues


News from the Center for Household Financial Stability: A periodic newsletter
about the center’s publications, events and news

To sign up for the center’s publications and for news about research and
events, see



Opening Doors for Low- and
Moderate-Income Communities
Promoting community and economic development in lowand moderate-income (LMI) areas, as well as promoting fair
and equal access to credit for LMI families, is the mission of the
Federal Reserve’s Community Development offices.
The Federal Reserve Bank of St. Louis’ Community Development staff provides financial institutions, nonprofit organizations and others with information on the Community
Reinvestment Act (CRA), on community and economic development, on household balance sheets and on issues related
to credit access. The staff also facilitates partnerships between
lenders and their communities in the Eighth District to
advance issues pertaining to community development finance,
neighborhood stabilization and household financial stability.
In its outreach efforts, the staff provides information about the availability of public and

Bringing people together to help
underserved communities.

private community development resources; it also promotes an understanding of the
rights and responsibilities of individuals, communities and institutions regarding
federal laws on such topics as community reinvestment and mortgage disclosure.
The key law is the CRA, passed by Congress in 1977. The law requires federal financial
regulatory agencies, such as the Fed, to encourage regulated financial institutions to help
meet the credit needs of their local communities, including LMI neighborhoods. In 1981,
each of the 12 Federal Reserve banks established a Community Development office to
fulfill that mandate.
From its headquarters in St. Louis and branch offices in Little Rock, Ark., Louisville, Ky., and
Memphis, Tenn., the Eighth District Community Development department publishes research,
analysis and other information in various publications, including: Bridges, the Community
Development Outlook Survey, the Housing Market Conditions Report, News from the Center


for Household Financial Stability, In the Balance and

events each year. One of the highlights is the

periodic research reports.

Exploring Innovation program, which uses events

Bridges is a quarterly review of community and
economic development issues, projects and regu-

the field and to search for new ways to improve

latory changes. The publication is aimed at prac-

life in LMI areas.

titioners from community-based organizations,

Leaders from organizations throughout the Dis-

financial institutions’ CRA officers, academics and

trict serve on the Bank’s Community Development

government officials.

Advisory Council. The executives are experts in

The annual Community Development Outlook

community and economic development and rep-

Survey monitors the economic factors affecting

resent nonprofit organizations, financial institu-

LMI people and communities in the Eighth District.

tions, universities, governments and foundations.

The Housing Market Conditions Report is a quar-

The council was created to keep the St. Louis Fed’s

terly overview of housing market conditions in

president and Community Development staff

the U.S. as a whole as well as in each of the seven

informed about community development issues

states and the four major metropolitan areas of the

and to suggest ways the Bank might support local

Eighth District.

development efforts.

News from the Center for Household Financial
Stability is a periodic newsletter noting key
research, publications and events at the center.
The center was established in 2013 within the
St. Louis Fed’s Community Development department. The center focuses on the household
balance sheets of struggling American families.
(See the essay “Center for Household Financial
Stability” on page 153.)
In the Balance consists of research briefs
related to new perspectives on timely household
balance-sheet issues.
The staff convenes those working in the field
of community development at several in-person


and webinars to raise awareness of innovations in


Fostering Diversity in the Workplace,
in Contracts and in Educational Outreach
The Federal Reserve Bank of St. Louis is committed to building an
inclusive workplace, where our differences—in gender, race, age
and ethnicity, as well as in cultural traditions, religion, life experiences, education, sexual orientation and socioeconomic backgrounds—are recognized as our strength. We make better decisions
and recommendations when these reflect a variety of perspectives.
Diversity allows each of us to bring our perspectives to the table
when generating ideas and solving problems, and encourages an
environment in which innovation and excellence thrive.
The Bank assumed additional responsibilities mandated by
Section 342 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (Dodd-Frank Act). As required by the DoddFrank Act, the Bank established the Office of Minority and Women

St. Louis Fed summer intern orientation session in 2014.

Inclusion (OMWI) and continues its efforts to ensure the inclusion
of minorities, women, and minority- and women-owned businesses in activities of the
Bank, with emphasis on workforce and procurement diversity.
The OMWI remains committed to developing strategies that will enhance diversity
and inclusion within all the Bank’s business activities. As a complement to the existing
diversity and inclusion efforts of the Bank, the OMWI will continue to coordinate
strategic development of policies and procedures around workplace diversity, supplier
diversity and financial literacy.
The Bank emphasizes building diversity at all levels of the organization, beginning at the
top. Recognizing that the Bank’s board of directors should represent the community it


serves, the Bank makes every attempt to have diverse

program provides developmental opportunities by

members. Of the nine members of the St. Louis

matching employees with diverse backgrounds, skills

board of directors, 33 percent are female and an

and experiences. Mentors, including executives up

additional 33 percent are minority (one Hispanic-

to senior vice presidents, are paired with other Bank

American male, one African-American male and

employees for a year or more. A main goal of the

one Asian-American male). On Dec. 31, 2013, of the

program is to provide developmental guidance to a

Bank’s 1,032 employees, 44 percent were women

diverse pool of Bank employees.

and 26 percent belonged to a minority group.
Strengthening the diversity of the leadership
pipeline continues to be a priority for the Bank.
One initiative aimed at bringing in entry-level
talent as potential future leaders is our intern program. Through the Bank’s ongoing partnerships
with community-based organizations and our
active participation in Historically Black College
and University (HBCU) recruitment fairs, the 2013
College Internship Program included 27 interns:
16 were minorities and 15 were women, including 10 from HBCUs and two from INROADS, an

The Bank has made considerable progress
in enhancing the ability of minority business
enterprises (MBEs) and women business enterprises (WBEs) to provide the Bank with goods
and services. For the second year in a row, the
Bank’s minority- and women-owned business
spending increased over the prior year, rising
from 12.0 percent to 20.1 percent.
The Bank’s successes include:

to MBEs and WBEs through community

organization devoted to developing and placing

organizations and partnerships,

talented underserved youth in business and indus-

such as the Women’s Business

try and preparing them for future corporate and

Development Center

community leadership. During 2013, four interns
were hired as full-time employees. Of them, two


Increasing the Bank’s presence and

are women, three are minorities and two gradu-

outreach efforts through participation in

ated from HBCUs.

local and national conferences

In addition, the Bank’s focus on employee devel-


Expanding sourcing opportunities


Remaining active with local supplier

opment remains strong, as building organizational

diversity councils, such as the St. Louis

capacity and effectiveness are critical factors in

Minority Business Council and the Mid-

accomplishing our vision. The Bank’s mentoring

South Minority Business Council


Hosting a Value of Certification event for
women- and minority-owned businesses

Financial Literacy
The Bank continues its long-standing reputation as a leader in developing financial literacy
programs. According to the most recent data
available from the National Center for Education
Statistics, approximately 20 percent, or 209, of the
high schools within the Eighth District are innercity, majority-minority and girls high schools
(OMWI-defined). The total combined enrollment
includes 145,518 students, 70 percent of whom
are African-American, 5 percent Hispanic and
1 percent Asian. By providing free, high-quality
professional development to the educators in
these schools, participating in local, regional and

Minority- and women-owned businesses
learn how to become certified as Fed suppliers in 2013.

national conferences, and offering highly customizable options for student engagement, the Bank
continues to have a positive impact on OMWIdefined high schools within the Eighth District.
The St. Louis Fed continues to increase the
number of publications, podcasts and brochures
that are translated into Spanish. Lesson plans
such as In Plain English and It’s Your Paycheck
help increase financial literacy education with
Spanish-speaking populations in the District
and beyond.



What’s Your Role in the Economy? Find
Out in the St. Louis Fed’s New Museum
Increased openness, transparency and financial literacy are chief goals of the Federal
Reserve, particularly since the financial crisis of 2007-09. As the Federal Reserve Bank of
St. Louis closes out its centennial year, it is opening the new Inside the Economy
Museum, located inside the St. Louis Fed’s headquarters at Broadway and Locust Street
in downtown St. Louis.
The museum immerses visitors in an engaging, interactive experience designed to
help them better understand how the economy works and their role in it. Students and
adults alike are engaged in a hands-on journey through exhibits that explore:

The global economy




Consumer markets




Bartering and trading


Opportunity cost


Money circulation






The history and role of the Federal Reserve

Exhibits are brought to life through interactive displays, games, sculptures and videos.
A multipurpose classroom is available to groups for discussions and teaching.
The Inside the Economy Museum is yet another vehicle used by the St. Louis Fed to
promote economic education and financial literacy. The museum makes for a unique
stop for St. Louis tourists and an ideal field trip for students in middle-school and above.
Teachers will find that their students’ eyes are opened to vital concepts that will benefit
them for the rest of their lives.
Walk-in visitors are welcome at the museum, as are groups that make arrangements
ahead of time. Admission is free. Visitors usually spend 45 minutes to an hour in the
museum. Learn more at


Exhibits in the Inside the Economy Museum provide an interactive
learning experience on topics ranging from banking to inflation.



As at any big company, our employees perform a wide
variety of work. We have economists and electricians,

Our People

educators and event planners. We have auditors and
programmers, librarians and lawyers. Employees process
cash, manage risk, gather statistics, examine banks,
provide security, build websites, publish periodicals,
staff call-in centers, maintain buildings and keep our
computers running. And that’s just the start of the list.
But our people aren’t just the employees of the Bank.
Dozens more give of their time to serve as directors on
boards or as advisers on various councils. They, too,
believe in the mission of the Fed and the importance of
representing Main Street in the monetary policymaking
decisions that affect us all.


Members of the board of directors pose on the steps of the St. Louis Fed in the 1920s.


St. Louis Board of Directors

Sharon D. Fiehler, Chair

George Paz, Deputy Chair

William E. Chappel

Gregory M. Duckett

Executive Vice President

Chairman and CEO

President and CEO

Senior Vice President and

Peabody Energy (Ret.)

Express Scripts

First National Bank

Corporate Counsel

St. Louis

St. Louis

Vandalia, Ill.

Baptist Memorial Health Care Corp.
Memphis, Tenn.

Sonja Yates Hubbard

D. Bryan Jordan

Cal McCastlain

Rakesh Sachdev

Susan S. Stephenson


Chairman, President and CEO


President and CEO

Co-Chairman and President

E-Z Mart Stores Inc.

First Horizon National Corp.

Dover Dixon Horne PLLC

Sigma-Aldrich Corp.

Independent Bank

Texarkana, Texas

Memphis, Tenn.

Little Rock, Ark.

St. Louis

Memphis, Tenn.


Little Rock Board of Directors


Robert Hopkins

Ray C. Dillon, Chairman

Michael A. Cook

Ronald B. Jackson

Regional Executive

President and CEO

Senior Vice President and

Community Chairman

Little Rock Branch

Deltic Timber Corp.

Assistant Treasurer

Simmons First National Bank

El Dorado, Ark.

Wal-Mart Stores Inc.

of Pine Bluff

Bentonville, Ark.

Russellville, Ark.

Robert Martinez

Mark White

John T. Womack


President and CEO

Chairman and CEO

Rancho La Esperanza

Arkansas Blue Cross and Blue Shield

Arvest Bank–Central Arkansas

De Queen, Ark.

Little Rock, Ark.

Little Rock, Ark.

Louisville Board of Directors

Gerald R. Martin, Chairman

Malcolm Bryant

David P. Heintzman

Maria Hampton

Managing Member


Chairman and CEO

Regional Executive

River Hill Capital LLC

The Malcolm Bryant Corp.

S.Y. Bancorp Inc.

Louisville Branch

Louisville, Ky.

Owensboro, Ky.

Louisville, Ky.

Jon A. Lawson

Susan E. Parsons

Randy W. Schumaker

Kevin Shurn

President, CEO and Chairman

Chief Financial Officer,


President and Owner

Bank of Ohio County

Secretary and Treasurer

Logan Aluminum

Superior Maintenance Co.

Beaver Dam, Ky.

Koch Enterprises Inc.

Russellville, Ky.

Elizabethtown, Ky.

Evansville, Ind.


Memphis Board of Directors

Martha Perine Beard

Charlie E. Thomas III, Chairman

J. Brice Fletcher

Roy Molitor Ford Jr.

Regional Executive

Regional Director-External/Legislative Affairs


Vice Chairman and CEO

Memphis Branch

AT&T Tennessee

First National Bank

Commercial Bank and Trust Co.

Memphis, Tenn.

of Eastern Arkansas

Memphis, Tenn.

Forrest City, Ark.


Carolyn Chism Hardy

Lisa McDaniel Hawkins

Lawrence C. Long

President and CEO



Clyde Warren Nunn
Chairman and President

Chism Hardy Investments LLC

Room to Room Inc.

St. Rest Planting Co.

Security Bancorp of Tennessee Inc.

Collierville, Tenn.

Tupelo, Miss.

Indianola, Miss.

Halls, Tenn.

Bank Management Committee

James Bullard

David A. Sapenaro

Karl W. Ashman

Karen L. Branding

President and CEO

First Vice President and

Senior Vice President

Senior Vice President

Chief Operating Officer

Administration and Payments

Public Affairs

Cletus C. Coughlin

Mary H. Karr

Kathleen O’Neill Paese

Julie L. Stackhouse

Senior Vice President and

Senior Vice President,

Senior Vice President

Senior Vice President

Senior Vice President

Banking Supervision, Credit,

and Director of Research

Policy Adviser to the President

General Counsel and
Corporate Secretary

Treasury Services

Christopher J. Waller

Community Development
and Learning Innovation


Industry Councils 2014

Council members represent a wide range of Eighth District industries and businesses and
periodically report on economic conditions to help inform monetary policy deliberations.



Meredith B. Allen
President and CEO
Staple Cotton Cooperative Association
Greenwood, Miss.

Calvin Anderson
Chief of Staff and Senior Vice President
of Corporate Affairs
BlueCross BlueShield of Tennessee
Memphis, Tenn.

John Rodgers Brashier
Vice President
Consolidated Catfish Producers LLC
Isola, Miss.
Cynthia Edwards
Deputy Secretary
Arkansas Agriculture Department
Little Rock, Ark.
Sam J. Fiorello
Chief Operating Officer
and Senior Vice President
Donald Danforth Plant Science Center
St. Louis
Edward O. Fryar Jr.
CEO and Founder
Ozark Mountain Poultry
Rogers, Ark.
Keith Glover
President and CEO
Producers Rice Mill Inc.
Stuttgart, Ark.
Wayne Hunt
H&R Agri-Power
Hopkinsville, Ky.
Tania Seger
Vice President, Finance
U.S. Commercial Row Crops, Monsanto Co.
St. Louis
Lyle B. Waller II
L.B. Waller and Co.
Morganfield, Ky.

Steven J. Bares
President and Executive Director
Memphis Bioworks Foundation
Memphis, Tenn.
Glenn Burney
Plant Manager
Baxter Heathcare Inc.
Mountain Home, Ark.
Mike Castellano
Esse Health
St. Louis

E. Phillip Scherer III
Commercial Kentucky Inc.
Louisville, Ky.

Anthony Zipple
President and CEO
Seven Counties Services Inc.
Louisville, Ky.


Mark A. Bentley
Principal, Managing Director
Central Arkansas Colliers International
Little Rock, Ark.
Martin Edwards Jr.
Edwards Management Inc., Realtors
Memphis, Tenn.

Reginald W. Coopwood
President and CEO
Regional One Health
Memphis, Tenn.

Janet Horlacher
Principal and Executive Vice President
Janet McAfee Inc.
St. Louis

Cynthia Crone
Insurance Deputy Commissioner
and Director
Arkansas Health Connector Division,
Arkansas Insurance Department
Little Rock, Ark.

Larry K. Jensen
President and CEO
Commercial Advisors LLC
Memphis, Tenn.

June McAllister Fowler
Vice President, Corporate
and Public Communications
BJC HealthCare
St. Louis
Susan L. Lang
St. Louis
LaQuandra S. Nesbitt
Louisville Metro Department of
Public Health and Wellness
Louisville, Ky.
Robert “Bo” Ryall
President and CEO
Arkansas Hospital Association
Little Rock, Ark.


Stephen A. Williams
President and CEO
Norton Healthcare
Louisville, Ky.

Chuck Kavanaugh
Executive Vice President
Building Industry Association
of Greater Louisville
Louisville, Ky.
Gregory J. Kozicz
President and CEO
Alberici Corp.
St. Louis
Chuck Quick
Little Rock, Ark.
Lynn B. Schenck
Managing Director
Jones Lang LaSalle
St. Louis

Bob Blocker
Senior Vice President of
Sales and Customer Service
American Commercial Lines
Jeffersonville, Ind.
Michael D. Garriga
Executive Director of
State Government Affairs
BNSF Railway
Memphis, Tenn.
Thomas Gerstle
Road & Rail Services Inc.
Louisville, Ky.
Rhonda Hamm-Niebruegge
Director of Airports
Lambert St. Louis International Airport
St. Louis
Richard McClure
UniGroup Inc.
St. Louis
Judy R. McReynolds
President and CEO
ArcBest Corp.
Fort Smith, Ark.
Mitch Nichols
Senior Vice President of
Transportation and Engineering
UPS Airlines
Louisville, Ky.
John F. Pickering
Cass Information Systems Inc.
Bridgeton, Mo.
Paul Wellhausen
Executive Vice President
SCF Lewis and Clark
Granite City, Ill.

Community Depository Institutions Advisory Council 2014

The members meet twice a year to advise the

St. Louis Fed’s president on the credit, banking and economic conditions facing their institutions and communities. The council’s chair also meets twice a year in
Washington, D.C., with the Federal Reserve chair and governors.
Glenn D. Barks, Chairman
President and CEO
First Community Credit Union
Chesterfield, Mo.

H. David Hale
Chairman, President and CEO
First Capital Bank of Kentucky
Louisville, Ky.

Dennis McIntosh
President and CEO
Ozarks Federal Savings and Loan
Farmington, Mo.

Mark A. Schroeder
Chairman and CEO
German American Bancorp
Jasper, Ind.

Kirk P. Bailey
Magna Bank
Memphis, Tenn.

John D. Haynes Sr.
President and CEO
Farmers & Merchants Bank
Baldwyn, Miss.

Larry W. Myers
President and CEO
First Savings Bank
Clarksville, Ind.

Steve Stafford
President and CEO
First National Bank in Green Forest
Green Forest, Ark.

Carolyn “Betsy” Flynn
President and CEO
Community Financial Services Bank
Benton, Ky.

Greg Ikemire
President and CEO
Peoples State Bank
Newton, Ill.

Frank M. Padak
President, CEO and Treasurer
Scott Credit Union
Collinsville, Ill.

Larry T. Wilson
President and CEO
First Arkansas Bank & Trust
Jacksonville, Ark.

Community Development Advisory Council 2014

The council keeps the St. Louis Fed’s president and staff informed

about community development in the Eighth District and suggests ways for the Bank to support local development efforts.
John Bucy
Executive Director
Northwest Tennessee
Development District
Martin, Tenn.
Terrance Clark
Helena, Ark.
Rex Duncan
Director, Community Development
and Outreach
Southern Illinois University
Carbondale, Ill.
Tamika Edwards
Director of Public Policy
Southern Bankcorp
Community Partners
Little Rock, Ark.

Brian Fogle
President and CEO
Community Foundation of the Ozarks
Springfield, Mo.
Rita Green
Assistant Professor of Consumer Economics
Mississippi State University
Mississippi State, Miss.
David C. Howard Jr.
Vice President of Equity
Federation of Appalachian Housing
Enterprises Inc. (FAHE)
Berea, Ky.
Ben Joergens
Assistant Vice President
and Financial Empowerment Officer
Old National Bank
Evansville, Ind.
Joe Neri

Federal Advisory Council Member 2014

Eric Robertson
Community LIFT and
River City Capital Investment Corp.
Memphis, Tenn.
Keith Sanders
Executive Director
The Lawrence and Augusta Hager
Educational Foundation
Owensboro, Ky.
Sarina Strack
Senior Vice President
and Director of Compliance
Midwest BankCentre
St. Louis
Elizabeth Trotter
Senior Vice President and
CRA Director
Lafayette, La.

The council is com-

posed of one representative from each of the 12 Federal Reserve districts. Members confer with
the Fed’s Board of Governors at least four times a year on economic and banking developments

Keith Turbett
First Vice President and
Community Development Manager,
Memphis and Nashville Regions
SunTrust Bank
Memphis, Tenn.
Cary Tyson
Assistant Director
Arkansas Historic Preservation Program
Little Rock, Ark.
Johanna Wharton
Executive Vice President
Grace Hill Settlement House
St. Louis
Deborah Williams
Bowling Green, Ky.

Ronald J. Kruszewski
Chairman, President and CEO
Stifel Financial Corp.
St. Louis

and make recommendations on Fed System activities.


Thank You
Thank you to the St. Louis Fed’s recent board and council retirees.
From the Boards of Directors
St. Louis
Robert G. Jones
Ward M. Klein
Little Rock
Mary Ann Greenwood
Kaleybra Mitchell Morehead
Mark D. Ross
Gary A. Ransdell
Charles S. Blatteis
Mark P. Fowler

From the Community Development
Advisory Council
Joe W. Barker
Whitney Bishop
George Hartsfield
Edgardo Mansilla
Paulette Meikle
Ines Polonius
Royce A. Sutton
From the Community Depository
Institutions Advisory Council
Gary E. Metzger
Gordon Waller
Vance Witt

From the Industry Councils
Timothy J. Gallagher
Bert Greenwalt
Leonard J. Guarraia
Richard M. Jameson
John C. King III
Health Care
Jeffrey B. Bringardner
Paul K. Halverson
Rich A. Lechleiter
Dixie L. Platt


Real Estate
Joseph D. Hegger
J. Scott Jagoe
Jack McCray
William M. Mitchell
Mary R. Singer
Charles L. Ewing Sr.
Dennis B. Oakley
David L. Summitt

Board of Directors, St. Louis, 1978


Bank Officers
James Bullard

William T. Gavin

Jane Anne Batjer

Catherine A. Kusmer

James L. Warren

President and CEO

Vice President

Assistant Vice President

Assistant Vice President

Assistant Vice President

David A. Sapenaro

Susan F. Gerker

Diane E. Berry

Maurice D. Mahone

Vice President

Assistant Vice President

Assistant Vice President

Yi Wen

First Vice President and
Chief Operating Officer

Anna M. Hart

Heidi L. Beyer

Jackie S. Martin

Vice President

Assistant Vice President

Karl W. Ashman
Senior Vice President

Karen L. Branding
Senior Vice President

Cletus C. Coughlin
Senior Vice President and
Policy Adviser to the President

Mary H. Karr
Senior Vice President,
General Counsel and Secretary

Cassie R. Blackwell

Vice President

Assistant Vice President

James L. Huang

Dennis W. Blase

Vice President

Assistant Vice President

Debra E. Johnson

Ray Boshara

Vice President

Assistant Vice President

Vicki L. Kosydor

Adam L. Brown

Vice President

Assistant Vice President

Kathleen O’Neill Paese

Michael J. Mueller

Winchell S. Carroll

Senior Vice President

Vice President

Assistant Vice President

Michael D. Renfro

James A. Price

William D. Dupor

Senior Vice President
and General Auditor

Vice President

Assistant Vice President

Julie L. Stackhouse
Senior Vice President

Christopher J. Waller
Senior Vice President
and Director of Research

David Andolfatto
Vice President

Jonathan C. Basden
Vice President

Timothy A. Bosch
Vice President

Timothy C. Brown
Vice President

Marilyn K. Corona
Vice President

Susan K. Curry
Vice President

Kathy A. Freeman
Vice President and
Director of Office of Minority
and Women Inclusion


Roy A. Hendin

B. Ravikumar

William R. Emmons

Vice President

Assistant Vice President

Katrina L. Stierholz

William M. Francis

Vice President

Assistant Vice President

Matthew W. Torbett

James W. Fuchs

Vice President

Assistant Vice President

Assistant Vice President

Michael W. McCracken
Assistant Vice President

Raymond McIntyre
Assistant Vice President

Christopher J. Neely
Assistant Vice President

Arthur A. North II
Assistant Vice President

Shawn W. Oberreiter
Assistant Vice President

Glen M. Owens
Assistant Vice President

Jennifer L. Robinson
Assistant Vice President

Craig E. Schaefer
Assistant Vice President

Abby L. Schafers
Assistant Vice President

Kathy A. Schildknecht

Assistant Vice President

Carl D. White II
Assistant Vice President

Ranada Y. Williams
Assistant Vice President

Christian M. Zimmermann
Assistant Vice President

Terri A. Aly
Information Technology Officer

Subhayu Bandyopadhyay
Research Officer

Alexander Baur
Treasury Officer

Christopher D. Chalfant
Learning Technology Officer

Jill Dorries
Government Relations Officer

Jeromey L. Farmer
Treasury Officer

Carlos Garriga
Research Officer

Scott M. Trilling

Joseph A. Gambino

Assistant Vice President

Kevin L. Henry

Vice President

Assistant Vice President

Philip G. Schlueter

Supervisory Officer

David C. Wheelock

Patricia M. Goessling

Vice President

Assistant Vice President

Marcela Manjarrez

Stephen P. Greene

Vice President

Assistant Vice President

Steven D. Williamson

Karen L. Harper

Vice President

Assistant Vice President

Maria G. Hampton

Timothy R. Heckler

Regional Executive

Assistant Vice President

Robert A. Hopkins

Cathryn L. Hohl

Regional Executive

Assistant Vice President

Martha L. Perine Beard

Terri L. Kirchhofer

Regional Executive

Assistant Vice President

Assistant Vice President

Scott B. Smith
Assistant Vice President

Yvonne S. Sparks
Assistant Vice President

Kristina L.C. Stierholz
Assistant Vice President

Rebecca M. Stoltz

Kevin L. Kliesen
Research Officer

Alexander Monge-Naranjo
Research Officer

Michael Thomas Owyang
Research Officer

Kevin J. Shannon
Treasury Officer

Assistant Vice President

Mary C. Suiter
Assistant Vice President

Donald J. Trankler
Assistant Vice President

Amy B. Simpkins
Treasury Officer

Dean A. Woolcott
Information Technology Officer

The Eighth Federal Reserve District






Little Rock
St. Louis

Federal Reserve Bank
of St. Louis
One Federal Reserve Bank Plaza
Broadway and Locust Street
St. Louis, MO 63102
Little Rock Branch
Stephens Building
111 Center St., Suite 1000
Little Rock, AR 72201
Louisville Branch
National City Tower
101 S. Fifth St., Suite 1920
Louisville, KY 40202
Memphis Branch
200 N. Main St.
Memphis, TN 38103


Senior Vice President of Public Affairs

Creative Director

Karen L. Branding

Brian Ebert

Executive Editor

Designer and Photographer

Marcela Manjarrez

Kathie Lauher

Managing Editor

Historical Photo Research

Julia S. Maues

Kathy Cosgrove

Project Manager

Contributing Writers

RC Balaban

Kristie Engemann
Laura Girresch

Al Stamborski

Peter B. McCrory
Amy B. Simpkins
Katrina L. Stierholz

trademarks of the Federal Reserve Bank of St. Louis. Ask the Fed®, Rapid Response®, the 8-H logo, CASSIDI® and the CASSIDI® logo, Econ Lowdown® and the
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