Cleveland may not seem like a city that comes to mind as a banking center in the United States, but nearly 100 years ago, Cleveland was awarded one of the 12 regional reserve banks that make up the Federal Reserve System.
So how was Cleveland chosen as a Federal Reserve Bank city? In 1914, a well-organized campaign led by a group of Cleveland businessmen, financiers and politicians was instrumental in the decision to locate the Fourth District headquarters in Cleveland.
A Federal Reserve Organizing Committee was established under the Federal Reserve Act legislation, says Mark Sniderman, chief policy officer, Federal Reserve Bank of Cleveland.
“Members were appointed and they were charged with determining which cities around the country should be the headquarters for these reserve banks,” he says.
“Cities were invited to apply, so the business and banking communities in the cities that were interested got together and outlined what their resources and strengths were.”
The Fourth Federal Reserve District comprises Ohio, western Pennsylvania, eastern Kentucky and the northern panhandle of West Virginia.
“The reason for the boundaries of Cleveland’s district was due to the fact that it was steel and coal country,” Sniderman says. “It was an economic cycle in this part of the country that was driven by heavy industry.
“When cities were bidding to become headquarter cities, they were thinking about themselves as the center of an economic region of the country that had its own need for credit depending on what was driving those economic cycles.”
The other 11 banks that make up the Fed are Boston, New York, Philadelphia, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Mo., Dallas and San Francisco.
“From a reputation point of view, getting a Federal Reserve Bank in Cleveland elevated the stature of the city … and would be a validation that Cleveland was a major league city in the financial world,” Sniderman says.
At the time the Cleveland Federal Reserve was built, it held total assets of $613.7 million, making it the third largest of the 12 district banks. Today, the bank has assets of some $79 billion, making it the ninth largest by assets.
The Cleveland Federal Reserve location quickly outgrew its original building and in 1921 construction started on a new headquarters for the bank. Two years and $8.25 million later, the bank was completed in August 1923 at the corner of Superior Avenue and East Sixth Street. The 13-story building is a modern adaptation of an Italian Renaissance palazzo, or fortress palace.
When the new Federal Reserve Bank of Cleveland opened to the public, an estimated 40,000 visitors passed through. In 2012, about 10,000 people visited the Cleveland Reserve Bank. That includes individuals who were part of a bank tour and individuals who visited its Learning Center and Money Museum.
While free tours are given in the building today and security measures are aided by technology, back when the building was first established they didn’t have those luxuries and were worried about robberies.
“In the days when the building was built, they were worried about mobsters like the Dillinger Gang breaking in with machine guns and things like that,” Sniderman says.
As a result, steps were taken to provide as much security as possible. The original vault is housed in its own building and was constructed before and completely separate from the main bank because of its size.
The concrete walls are 6½ feet thick, reinforced throughout with an intricate, interlaced type of fabricated steel. The vault door is 5 feet thick and has a 47-ton, 19-foot-high hinge. Yet, despite its 100-ton weight, the door is so precisely balanced that one person can swing it closed.
Today, much of the purpose for the Federal Reserve System remains the same with obvious changes in technology and banking advancements forcing some adaptations.
“What’s happened over time is technology has changed some of the ways we do business,” Sniderman says. “Banks and financial entities have become more complicated. They deal in a much wider range of products. They interact in so many kinds of financial markets that supervising banks has become a more sophisticated endeavor.”
Today, the Federal Reserve Bank of Cleveland supervises 35 state member banks and 285 bank holding companies, financial holding companies and savings and loan holding companies.
How to reach: Federal Reserve Bank of Cleveland, (216) 579-2000 or www.clevelandfed.org
