Helena Branch History
85th Anniversary—1921-2006

The War Years and Postwar Modernization (1941-1960)

The war years

The early years of World War II brought a number of new duties to the Branch, one of which was the sale of Defense Bonds, which began in 1941.1 The Branch was in charge of setting up, organizing, and running the War Bond drives throughout Montana.

Also in 1941, a 40-hour workweek was established by the federal government. In order for the Branch to maintain its six-day workweek, the staff began working staggered shifts. This allowed the Branch to maintain its six-day workweek for another 15 years.

In February 1942, the Fiscal Agency Department of the United States Treasury was opened at the Branch to aid in the sale and redemption of War Bonds. This department began with four clerks, but increased to 35 staff before this function was transferred to the federal government in 1944. After the attack on Pearl harbor in 1941, the United States lost access to its main importers of rubber in Asia. Montanans began to sell their old or extra automobile tires to the government to alleviate the rubber shortage, and the Branch was responsible for reimbursing them for the government by issuing checks and redeeming war savings stamps.

During the summer of 1942, Branch employees began noticing a number of shortages in the coin shipments made by Railway Express from the Denver Mint to the Helena Branch. The Federal Bureau of Investigation (FBI) arrested a railroad employee at the Billings railroad station who confessed to the thefts.

The war drained the Branch of its male employees, and by 1943, there were only four men left at the Bank, in addition to six security officers. Similar to businesses all across the country, the Branch began filling all of its jobs with women, including more physically demanding positions like those in the Coin Department, which, because of the popularity of silver dollars in Montana, was one of the larger functions at the Branch. Moving heavy coin was a difficult job for many of the women, so the Helena Branch started a drive to reduce the use of silver dollars, urging Banks to start relying more on paper currency. This action was met with such strong opposition that Montana's U.S. Senator Mike Mansfield brought up the issue on the floor of the U.S. Senate, and an objection was entered into the Congressional Record. Over time, member banks did make an effort to reduce the use of silver dollars in Montana by ordering and distributing more paper money.

Because of the creation of the Fiscal Agency Department and the expanding activities of the Reconstruction Finance Corporation in 1942, the north end of the basement, which had been excavated at the time of construction, but had not been finished for occupancy, was completed, and several employees were moved there to relieve the crowded conditions.

In 1944, the Branch began experiencing high turnover of personnel in the Transit (Check) Department. According to Betty Lindstrom, Branch manager from 1979 to 1982, during this time, Branch officers would help out in the operation so that employees could finish their workday on time. Therefore, the Branch launched an initiative to automate check processing by purchasing and installing four IBM 803 proof machines. Employees could be trained more quickly on these machines, which also kept tallies of the checks processed automatically. This allowed the Branch to process checks more rapidly and with fewer personnel.

The Branch moves up

With its wartime expansion of operations and personnel, the Helena Branch building had become overcrowded by 1945. Branch management submitted a proposal to the Minneapolis Board of Directors that year to build an 18-foot x 70-foot storage shed at the rear of the building for a cost of $5,000. The Minneapolis Board instead advised the Branch to look into adding a second floor rather than simply constructing a shed. Thus, construction of a second-story brick addition began in July 1945.

The construction of the second floor, while easier than the move into the new building in 1938, according to employees, created an unfriendly working environment. Jackhammers pounded over employees' heads, and water from wet concrete leaked through the skylights over the cages in the Coin and Currency Department. Coin and Currency employees draped tarps over the cages and worked in these makeshift "tents" until the concrete dried. Scaffolding used during the construction process also remained up for a total of 11 months.

By March 1, 1946, the second floor was completed, with the exception of an elevator, which was installed that fall. The cost of the second floor addition totaled $75,468, which included $8,771 for the Otis elevator.

Photo: Helena Branch building 1946
The second story of the building on North Park
and Lawrence was completed in 1946.

To celebrate the opening of the second floor, as well as the 25th anniversary of the Helena Branch, the Branch and Montanans Inc. co-sponsored a display of Montana manufacturers' products from February 23 through March 8, 1946. Eighty-two exhibits were displayed on the second floor of the Bank, except for the Anaconda Company exhibit, which took up the entire lobby on the first floor. The exhibit drew 85 percent of the bankers in Montana and was considered a great success.

In conjunction with the anniversary celebration, a 157-page booklet, "Your Bank—Historical Sketches of Montana Banks and Bankers," was prepared by the Branch. It contained information and photographs on every bank in Montana. Copies of this booklet were later furnished to all banks, colleges and state societies in Montana, including the Montana Historical Society.

The winds of change

Several significant events occurred at the Branch in 1947.

  • On January 1, the title for the manager of the Helena Branch was changed from Managing Director to Vice President of the Federal Reserve Bank of Minneapolis, and the manager's role as a member of the Board of Directors of the Branch was discontinued.

  • Staff was reduced by 22 at the Branch when the Treasury Department transferred the Bond Divisions of all Fiscal Agency Departments at Federal Reserve Branches around the country to their head offices.

  • Branch management attempted to establish a five-day workweek at the Branch, largely in an effort to align with the Minneapolis office, which began a five-day workweek the previous year. However, because the Branch's workload could not be accomplished by the small staff of 49 using this schedule, the six-day workweek was resumed.

  • At the request of the Board of Governors, the FBI sent a team to survey Helena Branch protection and security. This team showed the guards how to get out of the armored car with the least amount of exposure. The team also made the following recommendations that were implemented by the Bank:

    • Purchase two 12-gauge pump shotguns with double aught buckshot for ammunition.
    • Purchase gas grenades and two gas masks.
    • Provide regular and periodic firearm training courses.
    • Install additional gun ports in the Control Room over the front entrance of the Branch building.
    • Install a locking device on the outer garage door.

By 1948 many check and other shipments were sent to and from the Branch by airmail.

The silver dollar was a predominant monetary unit in Montana from 1949 until 1964 when the supply of silver dollars in the United States was exhausted. In 1949, 72 percent of the coin shipped out of the Helena Branch was silver dollars; in 1959, $4.5 million in silver dollars was shipped; and in 1961, silver dollar shipments totaled $6 million.

Ushering in a new decade

1950 ushered in a busy decade for the Branch, with a variety of changes in the business. The Reconstruction Finance Corporation was disbanded in 1950, and the Branch was no longer the custodian of all its affiliates. In addition, check routing symbols were introduced to expedite the sorting of checks, and the Branch started a promotional campaign in Montana to encourage commercial banks to use the new routing symbols and standardize check design. This campaign was ultimately successful, and by the end of the decade, over 98 percent of Montana banks had standardized their check designs and were using routing symbols.

Volume in the Coin and Currency Department doubled in 1950, the result of a Supreme Court ruling outlawing slot machines in Montana. After this new law went into effect, coin no longer used in the gambling operations in the state began pouring into the Branch for processing.

In October 1950, the first and only fire ever recorded at the Branch occurred. Retained trash that had been stored on shelves in the basement boiler room apparently caught fire by spontaneous combustion. After this fire, which caused very little damage, the retained trash was stored in metal-lined storage bins.

In 1952, the first tours of the Branch for students were arranged by the Department of Public Instruction. During that year, eight groups of high school students toured the Branch. This practice continues today as a part of the Branch's Public Relations program.

The Branch's first formal attempt at business continuity planning occurred in 1953, when the Ninth District's security file system was established. Through this system, daily work records were exchanged between the Branch and the Minneapolis office so that if a disaster ever occurred, all transactions recorded through the date of the disaster could be reconstructed at one office or the other. This system was so successful that by 1959, two full-time employees staffed the Security Files section in Helena

Service charges were also initiated in 1953. Beginning that year, the Branch began to charge member banks a service fee for the delivery of currency by the Branch's armored car. As a result of this new source of revenue, a new armored car was purchased for $5,647. The old armored car was traded in on a new Mercury station wagon that Branch employees could use to travel on business.

Extensive remodeling began in the Coin area in 1953. The storage vault (used for old records) in the basement and the book vault located on the first floor were converted to coin vaults. The original door of the book vault facing the lobby was sealed off, a new door facing north was added and the walls were reinforced. The final cost of the project was $28,000. Mechanical coin equipment was purchased to handle full skids of coin, with 20 to 40 bags per skid, at one time. Up to this point, coin sacks were moved by push carts.

Improvements in employee benefits occurred in 1956. During this year, a five-day workweek was established. The Branch hours were 9:00 a.m. to 3:00 p.m. for all days except Saturdays, when the Check Department would operate only if it needed to catch up on volume. The minimum wage was raised to $1.00 an hour, and annual Bank-paid medical exams for employees began.

Separate Coin and Currency Divisions were established in 1957 with working areas and head tellers for each division. Several Branch functions were rearranged. The Coin area was remodeled to accommodate this reorganization: the Accounting Department moved to the second floor and Wire Transfers moved into the northwest corner room on the second floor. This was a welcome move, since the Wire Transfer equipment was now in a room with acoustical tile that alleviated the noise for other surrounding departments.

July 1957 saw a rare visit from Frederick L. Deming, president of the Federal Reserve Bank of Minneapolis. Mr. Deming toured Montana for one week, stopping in Butte, Helena, Great Falls, Missoula, Kalispell and Billings. He was accompanied by Helena Branch Manager and Vice President Kyle Fossum. Past and present directors of the Federal Reserve Bank of Minneapolis and the Helena Branch and officials from Helena's commercial banking community met with him at a dinner held at the Montana Club in Helena. Branch employees also met with Deming at an informal reception held at the Helena Branch.

Helena Building Dedication Plaque

In 1958, the Helena Board of Directors (J. Willard Johnson, George M. Lund, Carl McFarland, John M. Otten and O.M. Jorgenson) ordered the creation and installation of a dedication plaque on the south wall of the vestibule between the front doors. The plaque was purchased for $105 and put in place nearly 20 years after the building was constructed on the corner of North Park Avenue and Lawrence Street.

The Board of Directors also recommended in 1958 that the Branch purchase additional lots for later expansion and hire an engineer to determine if extra floors could be added to the present building to accommodate projected growth in volume. The owner of the two adjacent lots north of the Branch building was not interested in selling them. In addition, the engineer recommended that no additional floors be added.

At the same time, a proposal was under consideration by the Board of Governors to change the existing Federal Reserve District boundaries, including moving Montana into the Twelfth District. In response, the Branch Board of Directors sent a letter of protest to Washington, requesting that Montana remain in the Ninth District:

With reference to any possible changes in boundaries of Federal Reserve Districts affecting Montana, it is the consensus of this Board that Montana's orientation should continue to be eastward so far as its Federal Reserve Bank affiliation is concerned.

The existing boundaries were retained.

By 1958, new technology led to more efficient operations at the Branch. The Money Department installed a new currency cancellation machine and an electrical mechanical lift. The Check Department's volume increased from hand sorting 2,472,310 checks in 1921 to machine sorting 15,900,000 checks with 11 proof machines, a tabulator and a key punch machine in 1958.

In 1960, an emergency currency fund was established in an effort to prepare for national emergencies. Sixty-five million dollars was placed in a partitioned area in the main vault on the first floor, and an extra guard was hired so that there would be at least two guards at the Branch at all times.

Also during 1960, a shipment of $16,500 in currency from the Branch that was headed to the First National Bank in Hinsdale was stolen. The Great Northwestern Depot in Hinsdale, Montana, was destroyed by arson in an attempt to cover up this theft, and $970 of $1,000 in coin was found in the ashes. The FBI caught the thief in 1962, but most of the money was never recovered.

Note:
1 In 1943, the name of these bonds was changed to War Savings Bonds.