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Minutes of the 1041st Meeting

The 1041st meeting of the Chicago Coin Club was called to order at 7 PM by President Robert Feiler with 12 members and 1 guest present. The Minutes as published in the Chatter were approved. Robert Leonard added a correction to the separate “Show and Tell” section in the Chatter concerning the 1913 200-cash coin from China: it is listed in Krause Publications. Steve Zitowsky’s Treasurer’s Report as of August 31st showed $930.00 in revenue, $408.17 in expenses and $8,175.37 in assets.

First V.P. Jeff Rosinia introduced the featured speaker Jerry L. Nelson, Corporate Communications and Public Affairs with the Federal Reserve Bank of Chicago. He spoke for over an hour while answering questions. When finished, he presented every attendee with a bag of shredded currency. Jeff Rosinia presented Jerry with an engraved club medal.

Second V.P. Lyle Daly introduced the exhibitors for the evening. They were: DON DOOL – 1972 San Marin Medal from Guayaquil, Ecuador, a 1583 3-stuiver from Zierikzee, and a 1542 scherf from the city of Lübeck; ROBERT FEILER: Dead Man’s Penny memorial plaque struck in 1918 in Britain as memorial to those who died in World War I; STEVE HUBER: 7 Austrian and German Thalers, 1621-1755; LYLE DALY: a Peruvian sol from 1893, but shown as 1393, a silver merchant token dated 1811 from Stamford, England, and a bronze medal believed to be a Woodsman of the World token; JEFF ROSINIA: a selection of U.S. currency with signatures of various U.S. Treasury and Federal Reserve officials; ROBERT LEONARD: four books on the Federal Reserve Bank.

Under old business Jeff Rosinia volunteered to provide the name of the printer used for the club’s CPMX souvenir when the tri-fold brochure is ready. Robert Leonard spoke on behalf of Dr. Saul Needleman who was unable to attend inquiring the status of a club book. Carl Wolf reported that funds are not secured. Treasurer Steve Zitowsky reported receiving a letter of resignation from Don Srbeny who moved to Arizona. He announced the following five members in default of 2005 dues: Lee Atkins, Sidney Bick, Harry W. Collier, Jr., Louis B. Jordan and Tom Ryan. A motion was made and passed to drop them from the rolls.

Carl Wolf reported final plans for the December banquet preparations at Marcello’s Restaurant, 645 W. North Ave., Chicago. The cost will be $25.00 each with a cash bar. Earlier Steve Zitowsky announced that he was donating the $250.00 deposit which would cover the cost of hors d’oeuvres. A round of applause followed.

Under new business Don Dool showed an acrylic plaque to display the engraved Cabeen Award medals and Featured Speaker medals. He also showed a personalized membership medal from another club which started a discussion whether the club should issue such a medal. A quick survey of the attendees showed a majority would pay $5.00-$10.00 for such a medal. Robert Feiler announced the upcoming Midwest Civil War Collectors Show, September 17, Midwest Conference Center/Concord Plaza, 401 W. Lake Street, Northlake, IL. Lyle Daly spoke on the free use of the meeting room and brought up the possibility that it may end in 2006. Carl Wolf showed an article in the September 19th issue of Coin World reporting on the club’s April meeting at the CICF.

Respectfully submitted, Carl Wolf
Secretary

Speaker's Wor[l]d
What's New at the Federal Reserve Bank

A presentation by Jerry Nelson to our September 14, 2005 meeting.

Jerry Nelson started his presentation with an overview of how the Federal Reserve system is organized, and then used operational details from the last 20 years to show how the money business has changed.

The Federal Reserve system is a combined governmental and commercial venture operating as a not-for-profit; all profits go to the US Treasury. The country is divided into 12 districts, with a Federal Reserve Bank in each district. The G in the seal on the left side of dollar bills indicates a note issued through the Chicago Federal Reserve Bank; the newer style notes, $5 and higher, no longer show the issuing bank's identification in the seal.

Membership in the system is mandatory for all federally chartered banks while membership is otional for other financial institutions such as credit unions and state chartered banks. Currently, 1500 chartered banks must use 3% of their capital surplus to buy Federal Reserve Bank stock which pays 6% annual interest. The stock price does not fluctuate, and only financial institutions can own Federal Reserve stock; the stock is not traded on any public exchange.

Most of the talk was spent covering just two Federal Reserve functions: check clearing and money circulation. When you go to your bank and deposit a check drawn on another bank, the Fed is involved; it is the clearing house for checks. For a long time, the clearing process involved moving the physical piece of paper; even with automation, moving a check between distant banks could take days. In 1995, the Chicago Fed processed 95 million checks per night, but now it processes 3 million physical checks each night. What happened? Electronic procesing happened. In addition to electronic bank transfers (which first exceeded check transfers in 2004), transmitting a check's scanned image recently replaced transferring the physical check in many cases. It costs 79¢ to process a paper check, but only ½¢ to process an electronic check.

The rest of the program covered the Fed's part in circulating coins and paper money. Twenty years ago, the Chicago Fed still distributed coins from its downtown location: large containers of coins came from the Philadlphia mint, they were broken down into smaler lots on site, then taken away by armored truck companies. Currently, coins from the Philadelphia mint are shipped to about 20 armored truck companies in the Chicago district, completely bypassing the downtown Chicago location. The Chicago district uses more coins than any other district.

The downtown Chicago facility still processes the paper money for its district, with $17 million arriving each day from the Bureau of Engraving and Printing (BEP). The $1 notes arrive in 50-foot trailers (no identifying marks - we asked!), with the larger notes arriving in armored trucks. 95% of the BEP's shipment typically replaces the wornout notes that the Fed destroys. The Fed burned old notes before 1991, but the Environmental Protection Agency complained about the released chemicals; although some shredded waste is used in novelty products, most of the shredded waste ends up in a hazardous waste dump. The lead was finally removed in 1996, but the cadmium, mercury, and other substances still remain.

Did you know that images of all notes to be shredded are kept for 45 days? Among the reported information generated each month is the number of destroyed notes, listed by denomination. For instance, 22 $1000 notes were destroyed in July, 2005. That led to some interesting stories from attendees about the Fed's long standing rule that banks must turn in (at face value) all deposited $500 and $1000 notes, and how some old-time banks had archives and vault "back corners" where they would show new employees the "good stuff." We tried to pin down Jerry as to details - such as, "Are the serial numbers checked for duplication, as an indication of counterfeiting?" - but he deftly dodged details. He did say that the expected life of the $1 note is 15 months and 4 years for the $20 note, but he again dodged the details of how those numbers are calculated. We did find out that the expected life of the $20 note has decreased recently, due to its heavy use in Automatic Teller Machines. Jerry also told us that a 16-grade scale is used to judge the quality of a note (a 16 is the best and a 1 is the worst), and that while an 11 used to be the point for shredding, 13 now is used because cash machines are more sensitive to faults in the notes.

At more than one hour, Jerry's presentation was one of the longest in recent memory, with much more information than is here summarized. The Chicago Fed (at LaSalle and Jackson Streets) has an exhibit area open to the public M-F, from 9AM until 4PM. Some of the displays can be seen from the windows along Jackson, just west of LaSalle, but there are heavy bars on the windows and the exhibits are too far away to be read. Jerry concluded by handing out small pouches of Fed shreds, about a handful of shredded currency. More information is at Chicagofed.org

Show and Tell

Items shown at our September 14, 2005 meeting.

1. Don Dool continued some of his previous exhibiting themes:
   • From Ecuador, a medal for the sesquicentennial of the meeting between San Martín and Simon Bolivar. The planchet quality is very poor, and Don ventured that maybe this piece had been diverted from the melting pot.
   • A double struck 1585 3 stuyver of Zeelandia (Zierikzee); this "poor penny" was given by churches, for the poor to buy food. (Neumann II 12837)
   • A copper 1542 1 scherf of Lubeck (Behrens 547). Don had sent this to a friend who performs x-ray analysis of metal objects; this showed mostly copper with some other metals, and one area did show signs of silver. So maybe this piece is really billon?
2. Bob Feiler brought back his dead man's penny exhibit from June, but with more information. The British government made one million of these, each bearing the engraved name of a fatality during WW I. Bob found much information about these and their story on the web.
3. Steve Huber showed Talers acquired during the ANA in San Francisco:
   • A 1621 taler from Hall in Austria. This is typical of the many early talers which are oriented to religion; here showing an officer of a religious order in regalia.
   • An early rendition of the wild man appears on a 1647 taler of Brunswick Wolfenburg.
   • A 1654 taler from Austria, with no religious connection.
   • A 1718 taler of Hall in Austria, showing Charles VI.
   • A 1723 taler from the Passau Bishopric.
   • A 1728 taler of Brunswick-Wolfenbuttel with a more artistic rendition of the wild man. This design was new to at least one person in attendance, so a short discussion ensued.
   • A 1755 commemorative taler of Eichstadt, but minted in Nurnberg.
4. Lyle Daly showed a range of items:
   • An 1893 Peruvian 1 sol with the date appearing as 1391; this variety is not scarce.
   • An 1811 one shilling six pence token from Stamford. The design includes a lion and a crown, and bears the names "Edward & Frances Dutt."
   • An American token issued by the Woodmen of the World. The legend Dum Tacet Clamat means, "Though silent, he speaks."
5. Jeff Rosinia showed US paper money with signatures of various Treasury officials, including Mary Ellen Withrow, Angela Buchanan, Francine Neff, and William Simon. As with most collecting interests, Jeff had no interest in signatures until he obtained his first signature, then he felt compelled to gather more. Some signatures are on notes not bearing that person's printed signature because Jeff did not have an appropriate note available when meeting that person.
6. Bob Leonard showed four books abut the Federal Reserve system:
   • The Federal Reserve Act, Hon. Robert L. Owen, New York: 1919.
   • The Federal Reserve System, Its Purposes and Functions, second ed. Board of Governors of the Federal Reserve System, Washington: 1947.
   • The Federal Reserve System, Purposes and Functions, fifth ed. Board of Governors of the Federal Reserve System, Washington: 1963.
   • Historical Beginnings ... The Federal Reserve. Roger T. Johnson, Federal Reserve Bank of Boston, Boston: 1995.
     Note: these last two, though with slightly different titles (the latter is also called 50th Anniversary Edition), are listed on the verso of the title page as two editions of the same book.

Call for Club Auction Lots
November 9, 2004

The club auction is scheduled for 7PM, at the start of the regular November club meeting. In the past few years, club related material (and Chicago area numismatic items) have had the best results. Some printed material also has shown good results. Please consider using the club auction to dispose of the numismatic items you no longer need.

You can place a reserve on each lot, and there is no commission charged to either the buyer or seller. Auction lot viewing will be held before the meeting starts, and again briefly before the auction starts.

The November Chatter will contain a list of all auction lots that are known to us by Tuesday, October 25. You can either e-mail your list to Paul Hybert by Tuesday, October 25 if you plan to bring your lots with you to the November meeting; or you can ship your items to Bill Burd by Tuesday, October 25.

If you have questions, Bill can be reached at 773-586-7666.

Our 1042nd Meeting

Important Dates

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