 We all know what this is, it's money. And people like you use money every day. We all know how to spend money, that's easy. But do you know where it comes from? Or for that matter, what happens to it after you spend it? The answer to these and many other questions are right here behind these doors. The Federal Reserve is the bankers bank. Our customers are banks, like the ones in your neighborhood. And just as you go to the bank to make a deposit or cash the check you got for your birthday, banks from all over Missouri, Mississippi, Indiana, Illinois, Kentucky, Tennessee, and Arkansas come to us to take care of their banking needs. Your parents manage your family's money. The Federal Reserve manages the nation's money. But before the Federal Reserve system was established, things in America were different. The United States was facing severe financial problems. At the turn of the century, most banks were issuing their own currency called banknotes. The trouble was, currency that was good in one state was sometimes worthless in another. People began to lose confidence in their money, since it was only a sound as the bank that issued it. Fearful that their bank might go out of business, they rushed to exchange their banknotes for gold or silver. By attempting to do so, they created the panic of 1907. This threw the banking system into turmoil. As a result, Congress decided that the management of our nation's money and banking system should be under federal control. In 1913, President Woodrow Wilson signed the Federal Reserve Act. This act created a central bank and a board of governors to control it. A system of 12 district banks located throughout the U.S. was established to regulate the banking system and manage the nation's money. Here in the Midwest, the Eight Federal Reserve District has branches in Louisville, Kentucky, Little Rock, Arkansas, and Memphis, Tennessee, as well as a head office in St. Louis, Missouri. The Federal Reserve is an important part of our economic system, and as important as this system is to our country, it's surprising how little we all know about it. People pass this building in downtown St. Louis every day and have no idea how important the jobs and services are that are performed inside. Like any bank, the Federal Reserve has cash and lots of it. In fact, all the new currency, the U.S. Treasury Prince, is distributed by one of the 12 Federal Reserve banks. Armored cars are an everyday sight here, pulling in to pick up currency for commercial banks or dropping off their deposits. This high-speed currency sorter electronically scans each bill in a split second. In fact, in one hour, it can scan between 50,000 to 60,000 bills to determine the denomination, condition, and authenticity. Good bills are stacked and strapped in packs of 100. The old or unfit bills are automatically shredded and disposed of. When counterfeit bills are detected, they are removed and sent to the Secret Service for further investigation. Most of the counterfeit bills today are 20s. There are usually two or three detected on any given day. You know, there's a lot of information on our currency, and most people don't realize it all means something. Take a look for yourself. Each Federal Reserve note has a seal to the left of the portrait of the President. This seal, along with a code letter, tells which Federal Reserve district originally issued the currency. For example, a dollar bill from the 8th district has the 8th letter of the alphabet, H, in the seal. To the right of the portrait is the Treasury seal. This seal and the serial number are printed in green. No two serial numbers are the same for two bills of the same denomination. Like any bank, the Fed takes many steps to protect your money. Security is tight. At the end of the day, millions of dollars of currency and government securities are stored in this vault. The door alone weighs some 45 tons and has four time locks. It's safe to say that this vault holds more money than you'll probably ever see in a lifetime. When you're not using cash, the most popular way to pay for things is to write a check. Nine out of every ten dollars spent by Americans are in the form of a check. So naturally, processing checks is one of our largest operations. In fact, this operation you see behind me processes and clears more than two million of them for banks like yours every 24 hours. That's quite a job when you consider writing a check takes minutes and it's done. But that's just the beginning. Each check as a rule must be processed and verified several times before it is returned to the person who wrote it. Let me show you what I mean. Let's say your family decides to go to a synchronous Cardinals baseball game. Your mom or dad pays for the tickets with a check. After accepting the check, the ticket office sends it to the bank that the Cardinals use. The Cardinals bank sends the check, along with hundreds of others it received that day, to the Federal Reserve Bank or to another check processing center in a sack or cash letter. Here the checks are divided into batches and sent to a high-speed check sorter. A sorter reads the magnetic symbols on the bottom of the check and sorts it along with millions of others. The magnetic code determines which Federal Reserve District the check came from, which bank it goes to, the account number, and the amount. After the amount of the check has been verified against the depositing bank's cash letter, it's sent back to your parent's bank where that amount is deducted from their checking account. Once it gets here, it is canceled and sent to your parents to keep for their records. Even though there are many steps that a check goes through, it usually only takes about three days. The way we pay for things is constantly changing. There was a time when everything was paid for in cash. In cash, checks became the way to pay for goods and services. Today, several types of payments are now being made electronically, by computers. Many people get their paychecks automatically deposited in their bank accounts. This type of technology means that someday, paper checks could be a thing of the past. Keeping up with technology is another one of our jobs at the Fed. Here in St. Louis, our computers handle over $15 billion worth of electronic transfers daily. Banks can now exchange money or make payments by simply pressing the keys on a computer. Payments are transferred through the telephone lines by computers that talk to each other. The computer has reduced to minutes, a process that used to take days. The world's largest bank account is in our bank. That account belongs to the U.S. government, all taxes, federal payments, and even the government's payroll is processed by the Federal Reserve System. And just as your parents write checks to pay bills, the government does the same thing, except on a larger scale. As an agent for the U.S. Treasury, the Federal Reserve also sells Treasury notes, savings bonds, and other forms of investments that are guaranteed by the U.S. government. This is one part of the bank that you can visit anytime. Another service we provide helps banks and their customers feel confident about their money's safety. The Federal Reserve Bank regularly examines banks in our area to make sure that they are following the laws set by the federal government. To keep our economic system strong, the St. Louis Fed constantly studies financial conditions that affect us locally, nationally, and worldwide. By keeping a close watch on these conditions and advising the Board of Governors in Washington, D.C. about them, we help the nation make better decisions to keep both the dollar and our economy strong. Whether it's cash, checks, or electronic transfers, our work goes into every dollar you spend. At the Federal Reserve Bank of St. Louis, we are committed to supporting and strengthening our financial system. And that's a commitment you can take to the bank.