At the end of March, my friend Kyle at work emailed a bunch of us to organize a tour of the Federal Reserve Bank of NY. Space was limited and we were not able to get on FRB’s calendar until June, but we still signed up. I later chatted with Kyle about my 28 Things list and we decided that since I wouldn’t have signed up for the tour without his initial email and since we hadn’t gone on it yet, that it should count. If you disagree, please take it up with my lawyers.
#4 Visit the Federal Reserve Bank of New York
I was hoping our visit would be like the visits Harry Potter and his friends take to Gringott’s Bank. I imagined taking a roller-coaster-like ride down into the vaults in minecars and walking into giant secure rooms filled with ornate swords and challices and maybe some priceless items that duplicate themselves when you touch them (image below). Unfortunately, this was not the case. There were also, sadly, no dragons as far as I could tell.
Although it is no Gringotts, the Federal Reserve building in the Financial District is beautiful and very secure. We had to go through airport-like security and were warned repeatedly that we were not allowed to take any pictures. But after we were in, we were let loose in an exhibit called Drachmas, Doubloons, and Dollars: The History of Money where there were thousands of coins and monetary objects from history. It’s really amazing to think about how they used some form of money in seemingly every society across the globe and to see some of the currencies used back in the day, including painted-on seashells which were exchanged as recently as last century.
The tour started with a small history of economics, finance, banking, and of course the Federal Reserve Bank itself and what they do. As listed on the Federal Reserve Bank of NY’s website, the Fed is responsible for:
- formulating and executing monetary policy,
- supervising and regulating depository institutions,
- providing an elastic currency,
- assisting the federal government’s financing operations, and
- serving as the banker for the U.S. government.
After the finance lesson, we were finally able to go down to the vaults to see the gold reserves. This was of course, the cool part of the tour and everyone was looking forward to it. We took an elevator down 80 feet underground, which doesn’t seem that low, but it is five stories underneath street-level, three stories below subway-level, and probably the lowest I will ever be in NYC. The vault is built on top of the bedrock of Manhattan so don’t even think about getting down below the vault and drilling into it from underneath. This is another idea of what I wanted the vault to look like:
The Federal Reserve Bank vault is actually a little different than Scrooge McDuck’s. There are about 7,000 tons of gold bars in the vault; each one weighs 28 pounds and is worth between $600,000 and $700,000 depending on the value of gold that day. Today, 95% of the gold bars there are owned by foreign nations and only 5% is owned by the United States or organizations like the IMF. The video playing in the FRB and the data on the website says it is 98/2% but this has changed in the last few years.
When gold transactions are made between countries, workers at the FRB physically weigh and move each bar from compartment to compartment. They have to wear special metal shoe-covers over their shoes so that they will not get hurt if they drop anything on their toes. It makes me wonder if at one point, a worker’s foot was smashed during one of these transactions.
Seeing the gold reserves was definitely cool, but for some reason I thought we would be able to walk through the vault and all we got to do was go down into a room where we could see it through gates. The gold bars themselves actually looked really fake as if they were just spray-painted. It was a little strange because the tour itself was a little anti-climactic considering the value of the gold and what goes on down there. I think they could have used some dragons.