Helena Branch History
85th Anniversary—1921-2006

Transformation and Expansion (1961-1980)

A number of significant changes occurred between 1961 and 1980. While management continued to wrestle with the need for more space, operations—particularly in the Money and Check departments—continued to transform and expand.1

The Federal Reserve System began processing food stamp coupons in 1961; 250 food coupons, in 25-cent and $1 denominations, were processed by the Check Department that first year. In 1968, processing moved to the Money Department. Food coupon volume grew dramatically during the 1960s, culminating in the processing of 1,600 food coupons annually by the end of the decade. By the end of the 1970s, the Branch was processing close to 4 million coupons annually.

The disappearing silver dollar

Silver dollars had always been a popular mode of exchange in the state of Montana, but by the early 1960s, the supply of silver dollars began to dwindle. By 1964, the U. S. supply of silver dollars was exhausted, and even silver certificates were replaced by Federal Reserve notes. A lawsuit was filed by consumers against the Federal Reserve Bank of Minneapolis and several commercial banks charging it with issuing unlawful currency in the form of Federal Reserve notes. The suit was based on the idea that currency had no value if it was not backed by silver or gold. The court, however, ruled in favor of the Federal Reserve Bank, and the Branch began reissuing the notes late in 1964.

Coin machine from the 1960s
Coin machine from the 1960s.

Coinciding with the depletion of the silver dollar supply, a shortage of coins in all denominations developed across the nation in April 1964. This prompted the Branch to ration most coins over the next two and one-half years. In October 1965, the coin shortage was alleviated when a new "sandwich" style coin was released—the silver content in the sandwich coin style was reduced in the half dollar denominations and eliminated altogether in the dime and quarter denominations. Despite this effort, half dollars, in particular, remained in short supply and continued to be rationed by the Branch until 1969.

Money Department employees were happy to see the shift in focus from coin to paper currency during this time period because it made for a less physically demanding work environment. According to Bill Bell, a Money Department employee during the 1960s, the employees felt that "paper dollars were much easier to handle than the silver." Coin shipments were unloaded from a truck outside the building, sent down a chute into the basement, loaded onto pallets by Money Department employees, moved into the elevator, lifted to the first floor, and then taken into the vault. Currency, on the other hand, was brought directly into the building and loaded into the vault. The minting of silver dollars resumed in 1970, when the U.S. Mint began producing Eisenhower silver dollars and Kennedy half dollars in 1971, signaling the end of the six-year coin shortage. The only other new coins handled by the Branch after this time were the Susan B. Anthony dollar, minted in 1979, and the Sacagawea golden dollar, minted in 2000. Both of these coins, for the most part, were unfavorably received by the public.

While the supply of coin was undergoing transformation, the supply and handling of currency was changing as well. In 1966, the original $2 bill was discontinued; six years later, in 1972, a new $2 bill was printed and circulated. The use of the new bill was encouraged in an effort to reduce the popularity of the $1 bill and, therefore, to reduce printing costs of new currency.

Increased currency volume handled by the Branch required faster processing. In 1969, the Branch purchased two currency sorting machines, which automated processing and made hand counting obsolete. Larger Federal Reserve offices began using sorting machines several years earlier, but Branch management did not purchase and install these machines until the volume of currency justified the expense and the technology proved reliable.

Check volume increases

As the Branch's volume of currency, coin, and food coupons continued to expand, so too did the volume of checks processed. In 1961, magnetic ink character recognition technology (MICR) allowed for computerized check processing. Using this process, codes printed in magnetic ink were placed on the bottoms of checks and could be read by high-speed reader-sorters and processed by computer. Throughout the 1960s and 1970s, check volume outstripped the Branch's automation capacity, despite the repeated upgrading of equipment.

To accommodate the increases in check volume, an IBM Model 1240 sorting machine was installed in 1964; over the next 17 years, a series of Burroughs computers was purchased and installed, as check technology continued to expand.

New functions added

Changes in both the business climate and technology necessitated changes in other Branch departments during this time period. An Audit Department was established in 1966, an Adjustments Division was added to the Check Department in 1970, and an automatic bookkeeping machine called the Burroughs L-5000 posting machine was purchased for the Accounting Department.

Security enhancements began to occur in 1967 with the installation of an eight-station intercom system at the recommendation of the Secret Service. Later, a closed circuit television was installed, and in 1978, the Protection Department purchased equipment to photograph employees and issue employee identification cards.2

In 1971, a Planning and Records Management Department was established at the Branch. Personnel from the Minneapolis office came to Helena to assist in setting up retention and filing systems. In 1975, all records having a retention time of five years or more were microfilmed, reducing record storage space by one-half.

In 1973, the Minneapolis Banking Supervision Department moved four examiners from Minneapolis to the Helena Branch to cover the Montana territory. Prior to that time, all Montana state member banks were examined by Minneapolis examiners who traveled to Montana to conduct examinations. Thus, basing examiners in Helena resulted in considerable travel cost savings.

The original four Branch examiners were headquartered in a brick house immediately to the north of the Branch building, which did not have enough space to accommodate four more employees. When that house was moved to allow for expansion of the Branch parking lot, the examiners were relocated to the employee break room in the basement of the Branch building, adjacent to the boiler room and the shooting range. According to Randy Fraser, winter brought both the clanking of the old boiler as well as the crack of gun shots. More than one phone call to a member banker was interrupted by the question coming back over the telephone line, "Are you folks getting robbed or something?"

Until July 1977, the Branch processed unfit currency only up to the verification and destruction stage. From 1972 to 1977, a large electric paper cutter sliced the unfit currency in half, lengthwise. The bottom halves of the cut bills were mailed to the head office in Minneapolis with the upper halves shipped separately at a later date. In 1977, new procedures were established, new equipment was purchased, and retirees were rehired to assume the verification and destruction process at the Branch. In addition to eliminating costly mailing expenses, internal controls were improved.

Branch building program begins

During the 1960s and 1970s, operations at the Branch expanded and contracted, while the very existence of the Branch was, at times, in question. Clement Van Nice, Helena Branch Manager, along with Robert Groe and Bruce Hedblom from Minneapolis, conducted a study in 1967 to determine the need for a Branch to service banks in Montana and whether Helena was the proper geographical location for such a Branch. Their findings reaffirmed the value of Helena Branch services to Montana banks.

In 1971, another study was conducted by the Branch to predict staffing and space requirements for each Branch business function through 1986. This study reaffirmed the 1967 study's findings that Montana banks did need the services of the Helena Branch and that Helena was the best geographical location for providing services to Montana's financial institutions.

With two studies in four years confirming the need for Branch services, management began to explore the idea of constructing a new building to alleviate a significant space shortage that appeared in the late 1960s and early 1970s.

The Real Estate Research Corporation of St. Paul, Minnesota, was hired to conduct a space and location analysis, and its conclusion paralleled Branch management estimates. This consultant recommended that a new Branch facility be constructed on the grounds of the former Helena High School at the corner of Lawrence and Warren Streets, across from the St. Helena Cathedral.

In 1972, Gunnar, Birkerts and Associates, of Birmingham, Michigan (who were also the architects of the new Federal Reserve Bank Building on Marquette Avenue in downtown Minneapolis), were hired to design a new Branch building on the recommended site. An option to buy the old school grounds was exercised by the Branch in 1973, and $1,000 earnest money was offered and accepted. Both the Helena and Minneapolis Board of Directors approved the building program and prepared plans for the Board of Governors in Washington, D.C.

Meanwhile, legal action was brought against the Helena School District by residents in the neighborhood to stop the sale of the proposed site to the Federal Reserve for fear that, among other things, if a robbery occurred at the Branch, the children in the school yard next door would be in danger. The court ruled in favor of the school district, and an extension of the option was granted to the Branch.

Soil tests were made on the proposed site in 1974, and the complete set of plans was sent to the Board of Governors. Despite overcoming numerous hurdles in developing these building plans, the Board rejected the proposal and suggested that the Branch instead attempt to solve its space problem by remodeling and expanding the present building. An architect was sent from the Board of Governors to design an addition to the current structure. After reviewing this recommendation, however, in 1975, the Helena Board of Directors rejected it as infeasible.

While plans for a new building were submitted and subsequently rejected, conditions at the Branch continued to deteriorate. By 1975, the space shortage was so egregious that an immediate solution was required. Thus, the Branch leased approximately 8,500 square feet in the basement of a building located at 1625 11th Avenue (currently the USF&G building) at a cost of $34,000 per year. The Check, Mail, Wire Transfer, and Accounting departments, all of which were previously located on the second floor at the main Branch facility on North Park Avenue, were moved to the leased quarters. This move occurred over a weekend, and equipment and systems were restored and processing checks by the following Monday morning. The new leased facility was called “Helena East.”

After moving several business functions to the Helena East location, the Planning, Personnel, Records Management, and part of the Stockroom were relocated to the vacant second floor of the main Branch building. However, a structural study of the building in 1976 found that the second floor was unsafe to house anything exceeding the weight of normal office use. Thus, the Records Management and Stockroom functions were immediately moved into two vacant houses at 420 and 422 North Park Avenue, which had been purchased in 1972.

The Branch launched another concentrated effort to get construction of a new building in Helena approved in 1977. The architectural firm of Naramore, Bain, Brady, and Johnson of Seattle conducted an analysis and designed a proposed structure. This firm, the Minneapolis Board Building Committee, the Helena Building Committee, and the Board of Governors worked closely to determine the space needs and the best location in Helena for a new facility. They also considered the possibility of tearing down and replacing the Park Avenue building on the same site. The study evaluated the following options:

  1. Add to and renovate the existing facility to house all Branch functions.
  2. Continue separate operations in leased space and expand and renovate the existing facilities.
  3. Consolidate all operations in a new building at a new site.

After considering these options, the four groups proposed building a new facility on a site near St. Peter's Hospital (on the east side of Helena). Unfortunately, downtown Helena businessmen and bankers objected to the proposal.

Similar to today, the city of Helena was in the midst of trying to rejuvenate the downtown business area in 1977. Several attempts were made by a group of downtown bankers and businessmen, collectively referred to as the "Last Chance Downtowners," to persuade Branch management to change their minds about relocating. Federal Reserve Bank officials met with the group to try to convince them not to oppose the new building, with little success. In fact, in 1979 a campaign was launched by the Last Chance Downtowners encouraging citizens to contact congressmen and urge them to assist the businessmen in persuading the Fed to remain downtown.

In an effort at compromise, Federal Reserve Bank management attempted to purchase property that bordered the Branch. Although the Branch was successful in acquiring some adjacent properties, it was not enough to make the building of a new facility feasible. After reaching an impasse, the Helena Branch building program was suspended indefinitely in 1979.

An event-filled end to the decade

While a great deal of effort was expended on the building program during the 1970s, other significant events affecting the Branch occurred as well.

In 1977, budget reductions required the Branch to reduce its staff by 13 percent. In addition, the business functions of Fiscal Agency, Non-cash Collections, and Wire Transfers were centralized in Minneapolis.

In 1978, a Postal Service chartered mail plane crashed near Miles City, Montana, killing the pilot. Twenty-two thousand checks totaling $8.7 million were aboard the plane when it crashed. The checks were scattered over the crash site and partially or fully destroyed. Two Branch employees went to the site and gathered as many of the remaining checks as possible. A task force of 14 employees then reconstructed the checks and cash letters from the debris, and after about 300 hours, all but 100 items were accounted for.

In 1979, the Helena East facility on 11th Avenue was expanded by the building's owner, and an additional 2,800 square feet was leased to the Branch. Departments were rearranged, and areas previously overcrowded were moved into the new addition.

At the main Branch on North Park Avenue, three of the four houses on property adjacent to the main building were demolished after management determined that the cost of the maintenance, taxes and utilities on the residences was no longer feasible. A fourth house on the property, formerly a duplex, was remodeled as a stockroom for the Purchasing Department. The area where property was cleared was later used to expand the employee parking area.

New coin wrapping equipment was purchased in 1979, which improved the ability of the Branch to efficiently wrap coin. This helped with the promotion of the new Susan B. Anthony dollar coins, since they could be distributed in wrapped form.

Also during 1979, the Check Department experienced a prolonged computer failure. Consequently, two private planes were chartered to carry the checks and two employees to the Minneapolis office to begin a contingency check processing operation. Other employees followed on commercial flights to assist with this operation.

A new decade ushered in two significant changes for the branch:

  1. The Monetary Control Act (MCA) was passed by Congress in 1980. This act required all banks and thrift institutions to maintain universal reserves. The Federal Reserve System was required to offer its services to all depository institutions at that time at prices reflecting full cost recovery. Previously, these services were offered without charge to member banks only. The Branch held a series of workshops for over 300 representatives from Montana financial institutions to explain the new legislation.

  2. On December 31, 1980, the Helena Branch discontinued its coin wrapping services for financial institutions. The coin wrapping equipment was sold to commercial banks in the state. The number of coins wrapped in 1980, the last year the service was provided, was in excess of 93 million pieces. This service was resumed three years later.

In addition to the significant changes in the financial services industry and the Branch that occurred during this time period, the May 18, 1980 eruption of the Mount St. Helens volcano, located 600 miles away in Washington state, also provided the Branch with a pinnacle event. As an eastward wind carried tons of heavy volcanic ash into Montana, Gov. Thomas Judge declared a state of emergency and requested that all local businesses close. Thus, for the first and only time in its history, the Helena Branch closed on a day that most of the financial institutions in the state remained open.


1 See Appendix F for a complete record of the volumes of checks processed and coin and currency shipped from 1921 through 2005.

2 From 1972 until 1978, the photographs and identification were produced at Carroll College.

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