The functions of the sub-treasuries were in part as follows:
2. Acceptance Of Gold Coins And Silver Dollars For Exchange.
3. Acceptance of fractional silver, greenbacks, minor coins, gold certificates and silver certificates for redemption.
4. Cancellation And Laundering Of Unfit Currency.
5. Exchange Of Various Kinds Of Money For Other Kinds Requested.
7. Receipt Of Deposits Of Postal Savings Funds Direct.
8. Receipt Of Deposits Of Money Order Funds Direct And Indirect.
9. Receipt Of Deposits On Account Of The 5 Per Cent Redemption Fund.
10. Receipt Of Deposits Of Interest On Public Deposits.
11. Receipt Of Deposits Of Funds Belonging To Disbursing Officers.
12. Receipt of funds deposited for transfer to some other point through a payment by a sub-treasury located there.
13. Encashment of checks, warrants, and drafts drawn against the Treasurer of the United States and presented at the sub-treasury for payment.
14. Payment Of The United States Coupons And Interest Checks.
15. Custody Of Large Reserve And Trust Funds.
Efforts have been made during recent years to abolish the sub-treasuries and have their work done by the federal reserve banks. These efforts reached success on May 29, 1920, when Congress authorized and directed the Secretary of the Treasury to discontinue the sub-treasuries by July 1, 1921.
The sub-treasuries were located in New York, Boston, Philadelphia, Baltimore, San Francisco, New Orleans, St. Louis, Chicago, and Cincinnati. In each of these cities there is now either a federal reserve bank or one of its branches. The argument favoring the abolition of the sub-treasuries was the apparent duplication of systems and its unnecessary expense. Against this argument it was contended that little economy would result from the merging of the two sets of institutions; that the trust funds against the gold and silver certificates and the greenbacks should not be committed to the custody of private corporations; and that the services required by the government would be less well rendered under the change of system.
The recent law provides that the Secretary of the Treasury may assign such of the duties performed by the sub-treasuries to the Treasurer of the United States, to the mint, and to the assay offices, as he may deem best; that he may utilize the federal reserve banks as depositories or fiscal agents of the United States; that all trust or special funds must be kept separate and distinct from the other assets of the federal reserve bank and be held in joint custody of the federal reserve agent and the federal reserve bank; and that the Secretary may assign any rooms, vaults, equipment, safes, or space in buildings used by the sub-treasuries to any federal reserve bank acting as fiscal agent for the government.
Between the dates October 25, 1920, and February 10, 1921, the closing of the sub-treasuries and the transfer of their duties were accomplished without interruption to business and without interference with the financial operations of the government. In some cities the former sub-treasury buildings continue to be used, in others the transactions are conducted in the reserve bank buildings.