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June 1998

Remembering When ...

1950s: Preparing the payroll

Before the days of computers and automatic deposits, Minneapolis Fed employees received their biweekly salary in cash. It was a time-consuming process. Payroll staff manually calculated deductions and overtime wages. A Burroughs machine was used to simultaneously print net pay and deductions on each employee's payroll sheet, pay envelope and posting record. All figures were balanced and the results audited. Sufficient money was obtained from the vault, and it took an entire day to fill and seal individual pay envelopes. On payday, two members of the payroll staff, accompanied by two guards, visited each department throughout the bank to distribute pay envelopes.

It wasn't until 1961 that employees began receiving their pay by check. While many employees enjoyed this new convenience, some didn't have checking accounts or simply preferred receiving cash. To accommodate them, the Minneapolis Fed provided a mobile check cashing station on paydays, allowing employees to exchange their check for cash.

In the mid-1970s the Minneapolis Fed, along with other area employers participating in the APEX (automated payments exchange), began offering employees the convenience of having their paycheck automatically deposited in their bank account. It was the beginning of the Automated Clearinghouse (ACH). Today, nearly all employees at the Minneapolis Fed—and many other employers nationwide—have their paycheck automatically deposited.

Not only is the ACH a convenient means of having payroll checks deposited, many businesses and consumers take advantage of this efficient electronic transfer of funds to make other payments. In 1997, the Federal Reserve System originated 3.4 billion electronic payments totaling more than $10.7 trillion.

—Patti Lorenzen

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