A century before Amazon H2Q, Denver and other cities battled for coveted Federal Reserve regional bank


Construction on the Denver Branch of ...

A century before Amazon created a national frenzy to host its second headquarters, U.S. cities battled to claim one of a dozen regional banks that would make up the newly formed Federal Reserve system.

Under banker Gordon Jones, Denver made its case for hosting a Federal Reserve Bank serving the Rocky Mountain region. But the state, along with Wyoming and northern New Mexico, were tacked onto the sprawling 10th District.

Kansas City, Mo., which had about 70,000 more residents, won that bidding war, in part because of its better transportation links.

“It was very much like Amazon HQ2,” said Alison Felix, an economist and the executive in charge of the Denver branch of the Federal Reserve Bank of Kansas City. “But Colorado was different then.”

The state had only 512 banks in 1913, when the Federal Reserve Act passed, half as many as Nebraska. By 1918, its population was just over 900,000, close to the number who now live in just Denver and Douglas counties.

Denver, along with Omaha and Oklahoma City, did win branch locations under the Federal Reserve Bank of Kansas City, one of 12 established around the country.

That branch, which has occupied three different downtown locations, celebrates its 100th year on Sunday.

The Fed’s Denver branch, at 1020 16th St., continues to serve several roles. Economists and researchers housed there report back to Kansas City and Washington, D.C., on the state of the economy in Colorado, Wyoming and New Mexico.

Those reports, which go into a publication called the Beige Book, assist members of the Federal Reserve Open Market Committee in setting monetary policy, including the lowering and raising of interest rates.

The Denver branch also hosts bank regulators who keep an eye on the health of the financial institutions in the region. Examiners were especially active in the oil and gas bust of the 1980s and again after the housing crash late last decade.

The highly secure facility is also the storehouse for new currency that will circulate in the region and a “money morgue” where damaged and worn-out bills go to die.

About $2.5 million to $3 million of currency is destroyed each day, said Denver branch spokeswoman Stacee Martin. Check processing, another function once handled at the bank, has gone away as debit and credit cards are used for more transactions.

Shootout at the Mint

The Federal Reserve opened up the doors of its Denver branch on Jan. 14, 1918, in the Interstate Trust Building at 16th and Lawrence streets.

The building was difficult to heat and too small. The lack of space required storing currency at member banks or the nearby U.S. Mint and ferrying the money with an armored truck, according to a history written by Tim Todd, a historian with the Federal Reserve Bank of Kansas City.

That arrangement was less than ideal, and on Dec. 18, 1922, several gunmen robbed the Federal Reserve truck while it was parked outside the U.S. Mint, setting off a gun battle unlike any Denver had ever seen.

Some press reports counted more than 55 shooters, including 50 …read more

Source:: The Denver Post – News

      

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