Working Paper

Effects of Federal Reserve services on the efficiency of the system for collecting checks in the United States: 1915--30

Abstract: This paper investigates whether the services of the Federal Reserve System improved the efficiency of the system in the United States for collecting checks relative to the efficiency of the system used by banks just prior to the formation of the Federal Reserve. There are two types of evidence that the Fed's services improved efficiency. First, the Reserve Banks quickly became major processors of interregional checks, even though banks could have continued to use the prior payments arrangements. Second, declines in the ratios of cash to total assets of banks can be attributed to the development of the Fed's check collection services.

Keywords: Federal Reserve System; Payment systems; Check collection systems;

Status: Published in Explorations in Economic History, April 2000, 37(2), pp. 121-48.

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 1999

Number: 1999-014