Federal Reserve Bank of St. Louis
The Federal Reserve Bank of St. Louis is led by president and CEO James B. Bullard. The Eighth Federal Reserve District, headquartered in St. Louis, includes all of Arkansas and portions of six other states: Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. The St. Louis Fed has branch locations in Little Rock, Louisville and Memphis.
Adapted by Federal Reserve Bank of St. Louis staff from David C. Wheelock's historical essays in "A Century of Service"
Like all Federal Reserve Banks, the St. Louis Fed works to promote stable prices and economic growth; foster a sound financial system; provide payment services to financial institutions; support the U.S. Treasury's financial operations, and advance economic knowledge, community development, and fair access to credit.
A Federal Reserve Bank in St. Louis
The selection of St. Louis for a Federal Reserve Bank seems to have been, in the words of historian James Neal Primm, a "foregone conclusion."1 In announcing its decisions on April 2, 1914, the Reserve Bank Organization Committee (RBOC) made clear that St. Louis, along with New York City, Chicago, Philadelphia, Boston, and Cleveland, were obvious choices: "In population these are the six largest cities in the United States; their geographical situation and all other considerations fully justified their selection."2
In the competition for Reserve Banks, St. Louis had several advantages: It was the nation's fourth-largest city, with a population of 687,029. Only New York, Chicago, and Philadelphia were larger.3 St. Louis was also a regional banking and commercial center, as well as a transportation hub. Its banks provided financial services, and its businesses sold and distributed manufactured goods throughout the Midwest, South, and Southwest.
St. Louis was also one of only three cities designated as a "central reserve city"4 in the national banking system, along with New York and Chicago. The designation recognized and contributed to St. Louis's importance as a banking center. Being at the top of the reserve system, national banks in St. Louis and the other central reserve cities were required to hold their bank reserves in the form of gold.
When the RBOC asked for the preferences of thousands of bankers and businessmen in cities across the U.S. to determine the best location of the new Federal Reserve Banks, St. Louis was the first or second choice of nearly 1000 survey respondents, with a total exceeded only by New York City and Chicago.5
Along with the other 11 banks, the St. Louis Fed received its charter in May and opened for business on November 16, 1914. The Bank made its first loan, in the sum of $1 million, on November 18, and began to provide clearing services a few days later. By December 4, the Bank was offering to collect checks and drafts drawn on any Federal Reserve Bank and on all Eighth District member banks, and it made its first delivery of currency to a member bank December 1, 1914.6 New branches opened in the major Eighth District cities of Louisville (1917), Memphis (1918), and Little Rock (1919).7
Like the other Federal Reserve Banks, over the next few decades the St. Louis Fed was an active participant in the Liberty Loan campaigns of World War I; the early monetary policy attempts of the 1920s and the ineffectual response to the Great Depression; and the financing of World War II. William McChesney Martin, the Bank's third president and a leader in this era, would later be overshadowed by the Fed career of his son, William McChesney Martin, Jr., the longest-serving Federal Reserve Chair.
A Maverick in the System
During the tenure of Bank president Darryl Francis, the St. Louis Fed of the late 1960s became known as a maverick for its outspoken criticism of Fed policies and for its advocacy of an alternative approach to handling inflation.8 Members of the Federal Open Market Committee including Chairman Arthur Burns largely discarded the idea that monetary policy was either a cause of or a cure for rampant inflation. Francis and his immediate predecessors were undoubtedly influenced by Homer Jones, the St. Louis Fed's director of research from 1958 to 1971. Jones had been a teacher and later a student of Milton Friedman, the University of Chicago economist who championed "monetarism" in both scholarly journal articles and popular writings and speeches. Under Jones, the St. Louis Fed developed an international reputation for economic research and monetarist policy views.
For Francis and Jones, sensible monetary policy meant maintaining a moderate, stable growth of the money stock. This put Francis at odds with Burns and several other FOMC members. According to Jerry Jordan, the former St. Louis Fed research director who went on to become the president of the Cleveland Fed, "No one was paying attention to any kind of quantitative measures, and the ideas that Homer Jones and Darryl Francis supported at this Bank of looking at aggregates, looking at bank reserves, looking into money supply, was just out of tune with what everybody else was saying." Homer Jones marshaled his staff to conduct research for publication in the Bank's Review and other professional journals. Jones also introduced a series of publications that reported and analyzed monetary growth rate trends and other macroeconomic data. The roots of the Bank's online data and information services, such as FRED, the St. Louis Fed's globally renowned economic data site, go back to the leadership of Homer Jones.9
A Legacy of Research and Innovation
Since the mid 20th century, the St. Louis Fed has continued to gain and share knowledge in innovative ways. This mission has underpinned much of the Bank's work.
For instance, the St. Louis Fed's community development program has long built on the Bank's tradition of research-focused policymaking. In the first two decades of the 21st century, community development initiatives have grown and evolved. Community development researchers, including the Institute for Economic Equity, have explored how wealth outcomes vary by race, age, education level, and other factors. They work to understand how the flow of government, private, and philanthropic capital can impact some of the nation’s most distressed communities.
Similarly, the Federal Reserve System provides key services to the U.S. Treasury and the American people, and the St. Louis Fed specifically supports and coordinates dozens of business operations crucial to the smooth financial function of the federal government. In 1999, St. Louis Fed Treasury support teams were recognized by the federal government for their work to simplify and reduce costs for the government. Bank Treasury support was instrumental in moving Treasury functions online and, with the GoDirect program, encouraging members of the public to use direct deposit for their federal benefits like Social Security.
When the Federal Reserve System made the decision to consolidate much of the nation's check processing services at the Atlanta Fed, St. Louis took the opportunity to build its branches in Louisville, Memphis, and Little Rock into new regional outreach hubs. Under the guidance of senior vice president Mary Karr, the 2003 "Branching Out" program transformed the check- and cash-processing centers into dynamic centers for community building, economic education, and regional economic research. In Memphis, pioneering Regional Executive Martha Perine Beard (a longtime leader who had become St. Louis's first Black woman officer in 1978), rose to the challenge of leading a transformed Branch. In the Bank's 2003 annual report she said, "Overnight, we will leap from being the smallest to the largest operations office in the District. Our operations in Check and Cash will double. Memphis’ employees, however, are eager to face the challenge. Although the Memphis office will have a strong operations presence, I am excited about the expansion that will occur with regard to our intellectual presence in the community."
One of the key functions of those reimagined Branch offices is economic education and teacher training. St. Louis economic education specialists reach teachers in all 50 states and across the world with their classroom materials for teaching economics, personal finance, economic history, and more. They provide the award-winning econlowdown teacher portal, and their expertise informs the development of FRED, FRASER, and, since 2020, FederalReserveHistory.org.
Written by the Federal Reserve Bank of St. Louis as of September 13, 2021. See disclaimer.
- 1 Primm, James Neal. A Foregone Conclusion: The Founding of the Federal Reserve Bank of St. Louis. St. Louis: Federal Reserve Bank of St. Louis, 1989.
- 2 See United States. Reserve Bank Organization Committee. Decision of the Reserve Bank Organization Committee, April 2, 1914 (With Statement of the Committee in Relation Thereto, April 10, 1914), p. 24.
- 3 See United States Bureau of the Census. Statistical Atlas of the United States, 1910, plate 139.
- 4 Federal Reserve Bank of Boston. "Chapter 1: Early Experiments in Central Banking," Historical Beginnings...The Federal Reserve, 2010, p. 8.
- 5 United States. Reserve Bank Organization Committee. First-Choice Vote for Reserve Bank Cities, July 29, 1914.
- 6 Federal Reserve Bank of St. Louis. Annual Report for the Year Ended December 31, 1915.
- 7 Federal Reserve Bank of St. Louis. FRASER Centennial Timeline, 2014.
- 8 See, for example, "Maverick in the Fed System," Business Week, Nov. 18, 1967, pp. 128-34.
- 9 Wheelock, David C. "Lessons from a Maverick: The Maverick Reserve Bank." Federal Reserve Bank of St. Louis Annual Report, 2013.