Liberty Street Economics

« | Main | »

March 8, 2013

Historical Echoes: The Founding and Foundation of the New York Fed

Megan Cohen

On November 17, 1914, the New York Times reported on Treasury
Secretary W. G. McAdoo’s involvement in the
authorization of the Federal Reserve System’s operations, including a notice to member Banks, telegrams, and new Reserve notes. Appearing
with the article is a copy of the receipt for the first Reserve payment.

Paul M. Warburg, original New York member of the Federal Reserve Board, wrote:

The 16th of November may
be considered as the Fourth of July in the economic life of the United States. Coming
generations will commemorate it as marking the foundation of our financial

The foundation that the Federal Reserve Bank of New York provided to the
financial system was also notable for the people and materials involved in constructing
the building
. The plots of land selected for the building were purchased from
1918 to 1919, with actual construction delayed until the associated costs went
down after the end of World War I. The building’s creation involved wide public
participation, beginning with the 1921 architectural competition. A thirty-three-page
document containing precise requirements became the basis for judging the
competitors’ contract proposals to design the new building.

In addition, the multicolored Indiana limestone and Ohio sandstone
used in the construction were unusual for the time, when monochromatic
buildings were the standard. The colorful masonry was incorporated, as the architects
felt that this feature would relieve the plainness of the building’s exterior
walls. Additionally, the commission of the building’s priceless ironwork by the
now-legendary Samuel
involved more tonnage of materials than other buildings he worked
on, such as those at Harvard University or the Cathedral of St. John the Divine.
The result was an instant classic, a building listed in both the New York State
and National Registries of Historic Places.

In the course of the ninety-nine years since its inception, the
Federal Reserve System has continued to progress toward its goal of providing
“safety, independence, and gradual, healthy expansion” to the United States. The
Federal Reserve Bank of New York building has evolved over the decades as well:
a restoration effort taking more than fifteen years is projected to be completed
in 2014. This overhaul of the building includes infrastructure improvements, technology
and electrical system upgrades, and a deep-cleaning of the masonry. Relatedly,
the Federal Reserve Bank of New York is currently nearing its 2013 centennial,
and has created a site
containing more information on the people and events that have shaped its past
100 years.

The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.


Megan Cohen is a research librarian in the Federal Reserve Bank of New York’s Research and Statistics Group.

About the Blog

Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.

Liberty Street Economics does not publish new posts during the blackout periods surrounding Federal Open Market Committee meetings.

The views expressed are those of the authors, and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.

Economic Research Tracker

Image of NYFED Economic Research Tracker Icon Liberty Street Economics is available on the iPhone® and iPad® and can be customized by economic research topic or economist.

Economic Inequality

image of inequality icons for the Economic Inequality: A Research Series

This ongoing Liberty Street Economics series analyzes disparities in economic and policy outcomes by race, gender, age, region, income, and other factors.

Most Read this Year

Comment Guidelines


We encourage your comments and queries on our posts and will publish them (below the post) subject to the following guidelines:

Please be brief: Comments are limited to 1,500 characters.

Please be aware: Comments submitted shortly before or during the FOMC blackout may not be published until after the blackout.

Please be relevant: Comments are moderated and will not appear until they have been reviewed to ensure that they are substantive and clearly related to the topic of the post.

Please be respectful: We reserve the right not to post any comment, and will not post comments that are abusive, harassing, obscene, or commercial in nature. No notice will be given regarding whether a submission will or will
not be posted.‎

Comments with links: Please do not include any links in your comment, even if you feel the links will contribute to the discussion. Comments with links will not be posted.

Send Us Feedback

Disclosure Policy

The LSE editors ask authors submitting a post to the blog to confirm that they have no conflicts of interest as defined by the American Economic Association in its Disclosure Policy. If an author has sources of financial support or other interests that could be perceived as influencing the research presented in the post, we disclose that fact in a statement prepared by the author and appended to the author information at the end of the post. If the author has no such interests to disclose, no statement is provided. Note, however, that we do indicate in all cases if a data vendor or other party has a right to review a post.