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Title: The Federal Reserve Monster
Author: Sam H. Clark and Wallace Campbell
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Language: English
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THE FEDERAL RESERVE MONSTER
by
_JIM JAM JEMS_
Bismarck, N.D.
Price $2.00 in U.S.A.
Carriage Prepaid
Compiled, Edited and Published
by
Sam H. Clark and Wallace Campbell
Of
JIM JAM JEMS
Bismarck, North Dakota
Copyright August 1922
EDITOR'S FOREWORD.
WITH "charity toward all and malice toward none" we indite this
volume of criticism of the Federal Reserve "Bunking" System as it is
"practiced" in America. We are not posing as a modern David, nor do
we underrate the size of the giant we have tackled herein by several
damsights. And by the same token we are not depending on a single stone
to deliver a knockout; on the contrary we are delivering a veritable
volley of rocks at the object of our criticism and we hope that every
chapter written here will raise bruises and welts on the back and belly
of the critter.
We have no intention nor desire to kill. And we don't believe in
reform. When a thing needs reforming it needs an axe. But what we
are striving to do is to awaken public sentiment to the damnable
ramifications of the Federal Reserve Octopus in the hope that the
people will "come alive" and eventually force the Federal Reserve
System to be born anew.
It is the abuse of the Federal Reserve System to which we object. Every
little while some smart Alec mounts the bema and roars about the great
good that the Federal Reserve System has accomplished. It is called the
Savior of Credit and Industry. But it is misbranded. There's a vast
difference between the picture on the tomato can and the contents of
the can.
If you have ever lived in the West or North or in any part of the
country where wild ducks or partridges or prairie chickens nest, you
are familiar with the antics of the mother duck or prairie hen during
the hatching season. You have come suddenly upon the mother of a brood
along the roadside and as she hops along there is every indication that
the bird is wounded and she leads you away from her nest to a point
where she figures the young are safe and then up and away she goes.
These touters for the Federal Reserve System remind us of the mother
duck and the prairie hen. They flap along and distract your attention
from the nest which they are so beautifully feathering; they prate
about "saving" and "benefiting" and flap you along until you lose sight
of the brood of evils that they are really mothering.
Our object in attacking the evils of the Federal Reserve System has
been to awaken sentiment--that is all. For the past two years we have
kept up a continuous bombardment against the iniquities of the Federal
Reserve System through the monthly issues of Jim Jam Jems. The demand
for back numbers and extra copies has been so great that we deemed it
advisable to collect all of these charges under one volume and thus
place the whole Truth about the Federal Reserve System before the
people. What we publish herein is fact, carefully compiled from the
System's own reports and from public records. We commend this volume to
all thinking, upstanding Americans who are ever ready to fight for a
square deal.
ZINC! VINEGAR! VITRIOL!
JIM JAM JEMS
Please don't confound JIM JAM JEMS with other magazines that are aping
it in size and general appearance. It is not a joke book, nor a dream
book, nor a slab of fiction. It is just what it is advertised to be--A
Volley of Truth.
You will find more hard, frozen-in facts and facts that you want to
know about matters of public interest in each issue of JIM JAM JEMS
than you will find in any other publication in America.
You cannot afford to miss a single number. Fill in the coupon below and
send it to us with your check for three dollars and you will get JIM
JAM JEMS for a year delivered by mail to your office or home address.
Don't wait! Join our army of regulars with the next number.
* * * * *
JIM JAM JEMS,
Bismarck, N. Dak.
Gentlemen:
Here's my check for $3.00. Send me JIM JAM JEMS for a year at the
following address:
Name .......................................
Street .....................................
City ........................ State ........
CONTENTS
Chapter Page
I FEDERAL RESERVE "BUNKING." 1
II THE BIRTH OF THE FEDERAL RESERVE SYSTEM 4
III THE FRAMEWORK OF THE MONSTER 9
IV THE STUFFING OF THE LEVIATHAN 16
V CHECK COLLECTION BANDITRY 21
VI THE LOOT OF THE MONSTER 34
VII HOW THE LOOT IS GATHERED 40
VIII THE PARTIALITY OF THE PILLAGE 50
IX THE TRAGEDY OF DRASTIC DEFLATION 56
X THE PALACES OF THE MONSTER 68
XI THE MONSTER'S EXPENSES 75
XII WHAT THE MONSTER DOES WITH ITS LOOT 83
XIII THE CAMOUFLAGE OF THE MONSTER 86
XIV FINAL VOLLEY AT THE MONSTER 95
Federal Reserve "Bunking"
CHAPTER I
THE FEDERAL RESERVE SYSTEM--WHAT IT REALLY IS
THE Federal Reserve System is the visible hand of the Invisible Empire
picking the pockets of the producers of real wealth. It is the most
leviathan parasite engrafted upon--and grafting on--production in the
world's history. It is an industrial vampire sucking industry's life
blood down its bottomless maw. Its greed is fathomless, its rule is
ruthless and its lust for power is insatiate.
It is openly and avowedly run and managed in the interest of a
so-called "superior class." It has a cynical contempt for the
public--whom it ruthlessly plunders. It believes--and practices the
belief--that it was instituted for the promotion and protection of
superior privileges; that wealth is produced for its exploitation;
that production of values exists for its parasitical plunder; that
Shylockery is a virtue and that the fruits of industry belong not to
its producers but to its despoilers.
Property-owners, property-earners and property-producers are but
its puppets whom it plunders at will. By monopolizing and juggling
money--the mere symbol of wealth--it destroys the value of real wealth.
It has but one interest in the public whom it hypocritically professes
to serve and that interest is expressed in the query "How much will the
people stand?"
There is nothing with which to compare it for it stands alone in the
world's history as the most gigantic plunderbund ever conceived in
predacity's womb. Czardom at its height and Kaiserdom at its zenith
never held a tithe of the real power held by the Federal Reserve
System. It is the perfected fruit and flower of financial high-bindery,
industrial plunderbund and applied Shylockery. Under the cloak and
mantle of the law it reaches forth its paws of predacity and pouches
filcheries which are simply stupendous.
That is briefly what the much touted and saccharinely adulated Federal
Reserve System really is. Abraham Lincoln, the greatest human intellect
which ever functioned on this planet, prophetically drew its portrait
in these words: "It (the Civil War) has been indeed a trying hour for
the Republic; but I see in the near future a crisis approaching that
unnerves me and causes me to tremble for the safety of my country.
As a result of the war, corporations have been enthroned and an era
of corruption in high places will follow and the money power of
the country will endeavor to prolong its reign by working upon the
prejudices of the people until all wealth is aggregated in a few hands,
and the Republic is destroyed. I feel at this moment more anxiety for
the safety of my country than ever before even in the midst of the war.
God grant that my suspicions may prove groundless."
That is the true portrait, drawn by a master hand, of the Federal
Reserve System.
In subsequent chapters you will see the birth of the monster, its
ruthless methods of plunder, its machinery of despoilment, its monopoly
of money and credit, its pawnbrokery and Shylockery and its huge mounds
of pillage.
And in looking it over don't overlook the fact that you, you
yourself--whatever may be your part in American industry--are laying
tribute on the Federal Reserve altar of Mammon. You can't escape its
net of pillage. Amid its mounds of gold, currency and securities--the
hugest ever massed together on this planet--your contribution is there.
Your brain or your brawn, or both, have added to its lootage. If you
live and toil in the U.S.A.--in whatever capacity--your "mickle" adds
to the "muckle"--of its stored pillage.
CHAPTER II
THE BIRTH OF THE FEDERAL RESERVE SYSTEM
"SLICKER than an eel in a bucket of soap suds" is a fair description
of the accomplished financial accoucheurs who ushered this monster
into legal existence. You must understand that the real object was
to establish what was in truth and fact a Central Bank which would
dominate and control currency issues and bank credits in the United
States. To weld those chains upon American industry without appearing
to do it was the object in view. It could be done only by encasing
dirty hands of real pillage in the white gloves of a "Reserve System."
The Invisible Empire must remain invisible. Visibility would defeat its
object. The Money Masters had read history and knew that the American
people stood four square against a Central Bank. If their monster
of pillage were called a Central Bank they knew it would die in the
legislative womb.
Two such attempts had been made and had resulted disastrously thusly.
The first attempt was the First United States Bank. It was the child
of Alexander Hamilton's astute brain. It began business on December
12, 1791. It met violent opposition from its birth. It was branded as
a "Money Trust," struggled along with varying fortunes and finally
died on March 3, 1811, when its charter expired--with its renewal
vainly sought. American industry rebelled at the idea of a Central Bank
domination. It savored too much of that aristocracy and oligarchy whose
chains they had recently chiseled.
The second attempt to engraft a Central Bank on American industry was
the Second Bank of the United States. It was chartered on April 10,
1816, and was a stormy petrel of finance. About it waged a running
battle. It was from birth to death the center of a conflict. Against
its domination American industry rebelled. Real producers of real
wealth constantly fought this parasite of finance. Andrew Jackson was
its bitter foe and it went out of existence during his administration
"unwept, unhonored and unsung" except in the doleful dirges of the
then Money Masters who mourned its demise. The Money Masters of those
two eras read the handwriting on the wall. American industry would
not endure a Central Bank and the Money Masters of 1914 read the
same symbols. History was against them and the genius of American
institutions was against them. Their idea of a Central Bank had never
changed. It was the very core and center of their scheme to dominate
American industry. But to "get it across" or to "put it over" they must
re-christen the monster. Twice the people had violently repudiated the
Central Bank banditry. Hence in the fertile brainery of predacity was
born the idea of the Federal Reserve System--a camouflage, a deception
and a mere cloak of Pecksniffian hypocrisy. A clever nation-wide
propaganda was at once instituted with every "prop" put under it that
wily astuteness could suggest. A subsidized press ballyhooed, touted
and paeanized the proposed Federal Reserve System. It was hailed as
the Moses which was going to lead America into the Promised Land of
industrial freedom. It was paeanized as an absolutely new discovery in
finance--when in truth and in fact it was one of predacity's oldest
cards soiled in many a game. But it was varnished o'er and played again.
There wasn't to be any "Central Bank" you understand. The sponsors
of this monster abhorred the idea of a "Central Bank." It was the
furthest possible from their pure thoughts of altruistic finance! They
were going to have twelve banks, each one established in a center of
industry and catering to and upbuilding the industries in its regional
zone. Each one was going to be a separate and distinct corporation
absolutely disconnected from its eleven brethren. This idea was
advertised, adulated, and saccharinely paeanized until America was
lulled to sleep. For month after month this cone of chloroform was held
over American citizens until the anesthetic took effect. Then came
forth what was known as the Glass-Owen bill. The smoothness of its
head sponsors' name was symbolic. The ground had been prepared for its
reception. Propaganda seed had been diligently sown. Years of the most
astute scheming and plotting of the brainiest schemers who ever schemed
bore its fruit in the Glass-Owen bill. On rails greased by years of
propaganda it slid into the legislative hopper, came through in an oil
bath and went to President Wilson. Whether he was the deceived or the
deceiver none but himself knows. But he painted the Federal Reserve
System with his most magnificent verbal rainbow colors, prated of it
as "the emancipator of credit," signed it in the midst of a coterie
of sycophantic Pecksniffs and the pen whose strokes made it a law was
religiously preserved!
Its real authors--who had spent years in weaving its phrases and scores
of thousands of dollars in propagandizing for its passage--winked,
smiled in their sleeves and prepared for pillage. The Federal Reserve
System was born with a caul--concealing its grin of greed--and
was brought into being by the most astute coterie of legislative
accoucheurs who ever delivered a babe of legislation.
Here and now read just two of the sample promises made by the Money
Masters at the birth of their monster. They told you that the Federal
Reserve System would "prevent unfair and undue constriction of credits
with its consequent paralyzing effect on business and on the productive
energies of the nation." They told you that "men will not be thrown
out of employment wholesale throughout the country by the fright of
financial and commercial panic, but finance and commerce will be
steady. Hundreds and thousands of men will not suddenly be thrown out
of employment during these national waves of depression nor undue
feverish buoyancy." Peg these specious promises in your brainery and
compare them later on with the actual performances of this monster
of depression with the Federal Reserve Board at Washington really
functioning as a Central Bank.
CHAPTER III
THE FRAMEWORK OF THE MONSTER
HERE'S the idea. Were you one of a coterie of multi-millionaires
lusting for the control of American industry and finance--exclusively
for pillage--you would, if necessary, join in providing any amount of
capital necessary to obtain the result. You could afford to provide
it for it would make you one of a coterie enabled to loot the richest
prizes on this planet. Any system which could at will open or shut
the valves of American credit, stage an orgy of "inflation" or stage
a debacle of "deflation," increase or decrease the money supply, make
the tide of employment flow to prosperity's height or ebb to despair's
depths, create a "bull" or a "bear" market at will--would justify the
investment of hundreds of millions or even billions of capital! Its
power would be practically boundless, its profits be fabulous and from
its coign of vantage it could coin the sweat of scores of millions of
toilers into its coffers of greed.
But if you could do this very same thing and obtain precisely the same
results and reap exactly the same harvest in power and pelf without
investing one thin dime or one plugged nickel you wouldn't put up the
money, would you? That is just exactly what these Federal Reserve
highbinders did and this is just exactly how they did it. There lay
fair to their hands the most successful banking system in the world's
annals--the National Banks.
Here was the core and center of their pillage. Here was the capital
ready to their hands. They proceeded to levy upon, to appropriate and
to commandeer their capital from the National Banks of the United
States. They divided the U.S.A. into twelve financial satrapies or
dependencies or loot areas with centers of pillage thusly: New York,
Chicago, Atlanta, San Francisco, Boston, Minneapolis, Kansas City,
St. Louis, Cleveland, Philadelphia, Richmond, and Dallas. Upon every
National Bank in the U.S.A. there was levied a capital tribute of six
per cent of their capital and surplus account for subscribed capital
to the Federal Reserve Bank set over them. Of this amount one-half or
three per cent was required to be immediately paid in and the other
half was held subject to call if required.
Take a look at this first step on the stairway of pillage. Without the
investment of one copper cent, of one plugged nickel or of one thin
dime and by one stroke of the pen when this infamous law was passed
practically one hundred millions of capital was commandeered into the
coffers of Federal Reserve banditry. Without the risk of one penny of
their own money the Federal Reserve plunderbund seized in its talons
of greed the hugest banking capital in the U.S.A.--practically two
hundred millions of dollars with one-half of it immediately payable
and the other half subject to call! It was the most daring financial
high-bindery ever enacted on earth.
Right here don't hock your brains--do your own thinking. Without any
option, without any vote of stockholders, without any action by its
officers every National Bank in the U.S.A. was compelled to buy stock
in the Federal Reserve Bank in its fiscal dependency or loot area in
which it was located. Protest was useless--just as useless as if they
stood under the guns of a Jesse James' or Younger Brothers' gang. It
was just "stand and deliver" and they delivered!
At this time, in 1914, the banking business in the U.S.A., and
particularly National Banks, was functioning soundly and safely. It
was serving--not dominating--industry. It was making reasonable--not
Shylock--profits.
Suppose the lustful eyes of the Federal Reserve lootage had turned
to the drygoods instead of to the banking business. They would have
compelled every drygoods merchant in the U.S.A. to contribute six per
cent of his capital and surplus--with one-half immediately payable--to
set up a drygoods jobbing house in the center of a designated loot
area. They would have compelled every drygoods merchant to purchase
his merchandise from that jobbing house at their price. Isn't one
proposition as sane as the other? Of course it is. But there is
this difference. By commandeering capital for the drygoods business
licensed looters _could control only the drygoods business_. But
by commandeering capital for the banking business licensed looters
_could control all business_! That's the difference and that's all the
difference. They commandeered capital where it could _control not one
industry but all industries_. They didn't commandeer a leg or an arm
of industry but they did commandeer _the life blood of all industry_
and at one leap vaulted into a seat of power where their scepter's sway
really governed all American industry. That's what they really did.
What price did Federal Reserve lootage pay for this commandeered
capital? It limited the dividends to be paid to these sandbagged
stockholders to six per cent per annum. No matter how fabulous might
be--and really have been--the profits of Federal Reserve pillage the
people who provided its life blood of capital must be content with a
paltry six per cent dividend! Over a long term of years the net profits
of the National Banks of the U.S.A. have averaged slightly over 12 per
cent per annum. But Federal Reserve lootage says: "We will pay you but
one half what your capital has been earning." Some gall? It was the
absolute acme of refrigerated nerve! No matter what Federal Reserve
Shylockery might make on this commandeered capital the people who
provided it--whose money it really was--could get but a paltry six per
cent.
But one fact or series of facts is worth more than pages of language.
So right here and now look at the actual results for the year 1920.
Here is a list of Federal Reserve profits and pillage for that year:
Per cent Net Sandbaggery
Location[1] Capital on Capital Per Cent
New York $24,618,000 217 211
Chicago 13,213,000 195 189
Atlanta 3,759,000 162 156
San Francisco 6,412,000 159 153
Boston 7,454,000 137 131
Minneapolis 3,265,000 131 125
Kansas City 4,295,000 129 123
St. Louis 4,229,000 124 118
Cleveland 10,070,000 119 113
Philadelphia 8,278,000 116 110
Richmond 4,884,000 110 104
Dallas 3,757,000 89 83
Take all of your reading, take all of the history of banking or of
finance since banks were first founded and see if you can approximate
any such leviathan Shylockery. The stockholders in National Banks who
provided the capital for this orgy of profiteering were gyped out of
all the way from 211 per cent in the New York satrapy to 83 per cent
in the Dallas satrapy. For the year 1920 all over the U.S.A. on the
average Federal Reserve lootage took away from the real providers of
its capital--the stockholders in National Banks--better than 154 per
cent on the money they provided!
These records are taken from the accounts of its own pillage rendered
by the Federal Reserve System itself.
You could be quite some banker yourself, you could orate and strut
and preen and propagandize, you could swell out your pouter pigeon
breast at stage-managed banquets and be a prince of high finance with a
limitless expense account and with an altitudinous salary--if you could
commandeer your neighbor's money at 6 per cent and then sandbag out
from 211 to 83 per cent profit on it, couldn't you?
Legal? Of course it's quasi-legal and that's the infamy of it. A
coterie of the most astute lobbyists who ever enchained a people's
industry log-rolled through a piece of legislation whereby they
commandeered for their capital the people's money at a petty 6 per
cent and in the year 1920 alone pouched on it a profit varying from 211
to 83 per cent! That's the record and those are the facts--hidden and
concealed from you and draped in a mantle of silence. Federal Reserve
lootage, Federal Reserve propaganda, Federal Reserve publicity--all
paid for from your money--is too astute to "toot" anent this legalized
sandbaggery. Do you, the stockholders in the eight thousand and odd
National Banks in the U.S.A., know of any reason why you should provide
at 6 per cent the capital for Federal Reserve lootage on which it made
in one year alone from 217 to 89 per cent? That is, do you know of
any reason except your legal helplessness and the bottomless greed of
Federal Reserve sandbaggery? If the law--cleverly lobbied through your
Congress--didn't compel you to do it, would you do it? Would you of
your own free will provide capital at 6 per cent and be gypped out of
154 per cent? You know you wouldn't! Here is the core and center and
solar plexus of the whole Federal Reserve System--commandeer capital at
a petty six per cent and realize out of it profits that make Shylock
look like a philanthropist. Peg this in your brainery and look further.
FOOTNOTES:
[Footnote 1: The average paid in capital for 1920 was $94,234,000 and
total net earnings were $151,408,031. This is 160.7% profit and so
stated on pages 153 and 154 of Federal Reserve Bulletin of February,
1921. When the net average of the individual banks are footed and
averaged the average is 140.9%. This discrepancy is for Federal
Reservists--not us--to explain.]
CHAPTER IV
THE STUFFING OF THE LEVIATHAN
YOU have seen the framework and skeleton of the monster--the
commandeering of the capital for the operation of the twelve Federal
Reserve Banks in each one of the satrapies. You have seen that
the Federal Reserve oligarchs not only never put up one thin dime
of their own for the capital for their System but obtained that
capital--practically in perpetuity--at a paltry 6 per cent interest or
dividend charge. This capital would naturally fluctuate somewhat--but
ever upward--as new National Banks were commandeered into the jack-pot.
By January 1, 1922, the paid-in capital legally sandbagged into the
twelve regional Shylockeries was as follows:
Boston $7,935,500
New York 27,114,000
Philadelphia 8,736,500
Cleveland 11,134,000
Richmond 5,428,500
Atlanta 4,189,500
Chicago 14,307,000
St. Louis 4,603,000
Minneapolis 3,569,000
Kansas City 4,570,000
Dallas 4,203,000
San Francisco 7,374,500
------------
Total $103,165,000
This is the assembled capital commandeered from National Banks in each
one of the Federal Reserve satrapies. This is the framework or skeleton
of the leviathan. Observe now how adroitly by another provision of the
Federal Reserve legal grabbery and graftery this skeleton is stuffed
and over-stuffed. A bank without depositors would be like a railroad
without shippers, a store without customers, a hotel without guests
or a doctor without patients--a mere expense account. But the same
astuteness which could commandeer into its maw over a hundred millions
of capital wouldn't falter for lack of deposits--you know that. If the
Federal Reserve System could--as it could--commandeer capital, couldn't
it commandeer and conscript deposits? Certainly it could and certainly
it did. Every National Bank in the United States is compelled to carry
in the Federal Reserve Bank in its satrapy or dependency a reserve
account, i.e., the amount of money which the law compels it to carry in
its reserve against its deposit liabilities. That sum of money is of
course enormous and at this writing at the close of business on May
10, 1922, amounts to the stupendous sum of $1,806,464,000! This is the
mightiest mound of massed deposits on this planet. And every dollar of
that gigantic sum has been conscripted and commandeered into the hands
of Federal Reserve oligarchs--without the capital investment on their
part of one penny for its security! By a few strokes of a pen or taps
of a typewriter Midas was made a piker, Aladdin's lamp was made but a
tallow dip and Croesus was made a small change artist. What generations
of toil and astute commercialism couldn't accomplish in centuries in
the banking business adept Federal Reserve oligarchical lobbyists could
accomplish--and did accomplish--by a few pen strokes! You don't know
which to admire most--their supernal gall or their astute lobbying
ability! But hang your cap of admiration on either horn of the dilemma
which you choose you find the mightiest single mass of money on this
planet swept into Federal Reserve coffers without toil, without effort,
without one penny of capital contributed by them and without one
scintilla of ability proven by them--except the ability of accomplished
and astute lobbyists!
But did they stop there--after commandeering over $100,000,000 of
capital and after conscripting over $1,800,000,000 of deposits? Little
you know those birds if you think it. After they had got their beaks
into that capital and their claws firmly fixed on those deposits they
spread their wings and took a financial flight hitherto absolutely
untried--even by the boldest buzzardry of finance. Here it is, scan
it, take a look at it. For generations of banking the reserve deposits
of banks have always drawn a minimum rate of at least 2 per cent per
annum. Why? Because of their size and because of their stability.
Experience of generations had demonstrated the fairness and the wisdom
of that usage. Reserve deposits rarely fluctuate--except upwards.
But at a few strokes of a pen Federal Reserve oligarchs reversed the
custom of generations and _conscripted this mass of deposits--the
largest on earth--into their coffers without interest_! Tie a towel
about your throbbing brow so that you won't get dizzy, seize your
trusty pencil and "figger" a moment. You will find that on this one
item alone at 2 per cent interest on $1,800,000,000 Federal Reserve
satrapists and oligarchs and legalized tyrants sweep just $36,000,000
a year into their profit pouch. It's $36,000,000 a year that National
Banks and their stockholders and their depositors used to get that
they don't get and that Federal Reserve predacity does get! If you and
a few hundred of your friends could, by astute lobbying ability, get
the titanic sum of $1,800,000,000 placed in your hands, practically
in perpetuity, without interest, you could do quite a bit with it,
couldn't you? You could, as do those Federal Reserve oligarchs, wield
the mightiest scepter of power which ever ruled man. And you could do
it with "other people's money"--every penny of it--just as they do and
you could do it without the investment of a penny of your own--just as
they do it!
Here they are: the Federal Reserve Board at Washington, really a
Central Bank, dominating and domineering over the whole Federal Reserve
System; the twelve Federal Reserve Banks, each one dominating and
domineering over its own zone or regional satrapy; the commandeered
and conscripted National Banks in each satrapy and finally their
stockholders and depositors--working and toiling--at the base of the
pyramid!
You have seen the birth of the Federal Reserve monster, you have seen
the skeleton or framework of the monster and you have seen the stuffing
of the monster. The Invisible Empire were the accomplished accoucheurs
at its Congressional birth; they conscripted the capital, the framework
of the monster; they commandeered the stuffing, the leviathan deposits,
for the monster; it is in their keeping and now what do they do with
it, whom do they "do" and how do they do it? Keep right on reading and
you will find out.
CHAPTER V
CHECK COLLECTION BANDITRY
YOU have seen the birth of the monster; you have seen how it
conscripted its capital at a petty six per cent interest rate; you
have seen how it commandeered--at no interest rate--the mightiest mass
of deposits ever gathered together on earth and you have seen how it
did these things by its absolute control over the money and over the
destinies of the National Banks in the United States. It could and it
did and it does practically control their affairs.
But it could not--except by intimidation, by oppression or by practical
banditry--control the State Banks of the United States. It could not
legislate them into its sheep pen for shearing, but it could attempt
to intimidate, bulldoze and banditize them. This it attempted to do in
this wise:
One of the chief specialties of this Federal Reserve System of
applied banditry is to attempt to force every bank in the United
States--whether a member of its Shylockery or not--to collect checks
for its benefit and advantage for nothing. In other words, where it
couldn't conscript nor commandeer--purely for its own sordid profit--it
proceeded to bulldoze.
There are just two ways to collect money on checks, one by presenting
them at the counter of the bank on which they are drawn and getting the
cash and the other by sending them through the mail for remittance by
draft drawn on some large city depository. The latter method obtains in
99 per cent of the hundreds of millions of checks drawn. The bank upon
which the check is drawn makes a small charge of one tenth of one per
cent to compensate for clerk hire, postage, stationery and the like. It
is a perfectly legitimate charge in vogue and practiced for generations
in banking circles. But the Federal Reserve System, with its customary
greed, insists upon sandbagging this service for nothing. This arrogant
rule--purely for its own sordid profit--it could and did and does
enforce against its conscripted and commandeered National Banks. But
State Banks--not wearing the Federal Reserve yoke of bondage--were at
liberty to make the usual collection charge of one tenth of one per
cent. Thereupon the Federal Reserve System had a series of fits and
fell into them. From an enormous number of its banditries three typical
ones are selected for your observation--merely straws showing whence
blow the most arrogant winds of oppression.
First take a look at the Cones State Bank of Pierce, Nebraska. "I
don't want a smug lot of experts to sit down behind closed doors in
Washington and play Providence to me." That is what President Wilson
said--on page 60 of his book, "The New Freedom"--before he, himself,
was sitting tight "behind closed doors in Washington."
That is just exactly how Wood Cones, president of the Cones State Bank
of Pierce, Nebraska, feels about a smug coterie of banking oligarchs
known as the Federal Reserve Board at Washington and the Federal
Reserve Bank at Omaha, Nebraska. First, read the subjoined affidavit
about "hard boiled and armed" Federal Reserve Bank agents and then our
comments on the whole proposition.
"In the Superior Court of Fulton County, Georgia.
AMERICAN BANK & TRUST CO., et al.
vs.
FEDERAL RESERVE BANK, et al.
THE STATE OF NEBRASKA } SS.
PIERCE COUNTY }
"Personally appeared before the undersigned attesting officer, Wood
Cones, who makes this affidavit to be used as evidence in the above
stated case and who being first duly sworn deposes and says:
"That I am, and for many years have been, the president of the Cones
State Bank of Pierce, Nebraska, and as such officer of said bank,
I was interviewed some time last September by a Mr. Jones, claiming
to represent the Omaha branch of the Federal Reserve Bank of Kansas
City, Missouri. I was urged by him to join the system. I refused and
was then asked to sign a card agreeing that my bank would remit all
items at par sent us by mail by the Federal Reserve Bank. I refused
to sign and was told that I would be compelled to at an early date,
as there was no limit to the power of the Federal Reserve Bank.
"Early in October of the same year, the local express agent presented
quite a number of checks on our bank from the Federal Reserve Bank
and we gave him a draft for the full amount payable to the Federal
Reserve Bank. A short time after, another bunch of checks of the same
kind came in the same way but the express agent was instructed to
collect in cash. I offered him silver dollars for the checks and he
said he did not have time to count it and accepted an Omaha draft for
the face of the checks.
"Following this, W.S. Lower, claiming to represent the Omaha branch,
came with some checks and demanded legal tender in payment. We
offered him a draft payable to the Federal Reserve Bank but refused
to pay him the currency without better identification than was
produced by him. After considerable loud talk and threat to protest
the checks he accepted a draft. Shortly after this Mr. Lower came
again, properly identified, and demanded cash on checks he had and we
refused payment on account of improper and insufficient endorsement.
He stormed around for a day and finally accepted a draft payable to
the Federal Reserve Bank.
"November 14, 1919, a high powered auto containing four people, drove
into Pierce and stopped in front of the Bank, but the engine kept
running. Two men, W. S. Lower and M.L. Bishop, got out of the car,
armed with revolvers and entered our bank. As agents of the Federal
Reserve Bank, they demanded the currency on checks drawn against the
Cones State Bank of Pierce, Nebraska, of the aggregate face value of
$31,900, some of which had been held for over three weeks. While one
of our Bank force was counting out the money (about $13,000 more than
we are legally required to carry in our vault) to Mr. Bishop, Mr.
Lower told us that Bishop was a United States marshal, hard boiled
and armed, and that he had cleaned up the State of Kansas and would
get us anyway, so we had better sign up the agreement and keep our
money.
"Bishop said that a banker in Kansas who had the only bank in the
town, held out against parring, and that he told him they would start
a National Bank and drive him out of business, and that he personally
was instrumental in starting the National Bank and said he would
stick to it until he drove the Kansas bank out entirely.
"Mr. Jones and a Mr. Davis came along later and claimed they were
peacemakers direct from the Federal Reserve Bank of Kansas City. Said
that Lower and Bishop were ---- fools and had done entirely wrong
at Pierce and advised us to forget what Lower and Bishop had done
and sign up as the day was near when we would be forced. They took
a draft for the checks they had and departed saying that they had
enough of this ---- business.
"Subsequently checks were sent through the Express Company and
returned by the express agent for the reason as I said that he didn't
have time to count the money.
"Along about the 27th day of December, 1919, a Mr. Farley came to
Pierce from Kansas City and asked us to sign the paper relative to
parring checks or join the Federal Reserve System. We refused. He
then stated that he was instructed to stay in Pierce until he had
accomplished something. From that date until the day of making this
affidavit Mr. Farley has been here continuously and collects cash
every day on checks sent him by the Federal Reserve Bank.
"On January 5, 1920, a Mr. J.G. Bryan came in from Kansas City and he
and Mr. Farley have been instrumental in trying to start a National
Bank at Pierce, devoting practically their entire time collecting
cash on checks sent by the Federal Reserve Bank upon banks in Pierce
and promoting a National Bank that they will compel the banks of
Pierce to join the system. Our customers report to us that these men
have told them that we are robbing them out of ten cents on every
hundred dollars of their money.
"On or before the 14th day of January, 1920, Mr. Jones joined Mr.
Farley and Mr. Bryan and has acted as Notary Public, protesting
checks presented by the aforesaid agents of the Federal Reserve Bank
of Kansas City, notwithstanding such checks were endorsed on the
face 'not payable through the Federal Reserve Bank, their branches
or agents, nor Express Company nor Postoffice' and are continuing to
protest such checks when we refuse payment of them in their hands and
in one case have presented a check a second time and protested it
each time.
"Every agent of the Federal Reserve Bank that has been here has
advised us in substance that they were spending the Government's
money like drunken sailors and will not stop at any expense to force
us to join the system.
"One of my competitors told me that Mr. Davis told him in substance
that the Federal Reserve Board had a steam roller on the way from
Washington to crush me personally and ruin my bank if I persisted
in refusal to comply with their demands. I subsequently called Mr.
Davis' attention to this report and he personally acknowledged to me
that he had made such a statement in substance.
(Signed) "Wood Cones.
"Sworn to and subscribed before me this 10th day of February, 1920.
(Signed) "Douglas Cones.
"Notary Public in and for Pierce County, Nebraska.
"My commission expires September 25, 1925."
The Cones State Bank couldn't be bulldozed, banditized by gun play
nor coerced into the Federal Reserve slaughter pen. When the Federal
Reserve System grabbed Wood Cones it grabbed a hot wire which it
finally dropped, nursing its badly burnt paws!
Now take a look at the Brookings State Bank of Brookings, Oregon.
It wouldn't wear the Federal Reserve yoke of bondage and made the
customary collection charge of one tenth of one per cent for remitting
check collections. It couldn't be bluffed, bulldozed, sandbagged nor
coerced and the Federal Reserve System had its usual fit.
On October 8, 1920, it stationed an emissary from the Portland branch
of its San Francisco Shylockery at Brookings, Oregon, for the sole
purpose of collecting in cash over the counter all checks coming from
all over the U.S.A., drawn on the Brookings State Bank--with the avowed
object of whipping it into abject surrender. Nothing doing! Daily the
Federal Reserve sub-bandit presented himself at the counter with his
wad of checks and daily the Brookings State Bank smilingly handed over
the cash! The Federal Reserve emissary--pursuant to orders--stuck at
Brookings, Oregon, from October 8, 1920, until October 1, 1921, vainly
endeavoring to wear down the Brookings State Bank. Positively nothing
doing. The Federal Reserve octopus had struck at one bank where its
slimy tentacle slipped.
Then this Federal Reserve sandbaggery resorted to the scheme of sending
out what it called "notices of dishonor" against the Brookings State
Bank, whereupon the Brookings State Bank went into the United States
Court and obtained from Judge Wolverton an injunction against such
"dishonor notices!" Drawing cash over its counter for over a year
couldn't bluff the Brookings State Bank and the United States Court
forbade its fictitious "dishonor notice" game! So the octopus tried
another method--equally damphoolish but characteristic of its banditry
methods.
There lies before us as we write a photographic copy of a "transit
slip" made out by the Federal Reserve Bank of San Francisco at its Los
Angeles Branch on November 19, 1921. On this "transit slip" is listed a
$50 check drawn on the Brookings State Bank of Brookings, Oregon, and
over against the item is marked "Bank Closed!" It is as foul a libel as
even the Federal Reserve octopus ever spewed from its sac of venom!
The Brookings State Bank was never "closed" for the fractional part
of a second! In fact it was and is a damsite too "open" to suit the
Federal Reserve thuggery!
Now look at the venom spat out by this Federal Reserve octopus at
the Brookings State Bank because it wouldn't do its bidding. During
the year it kept its emissary there it collected $102,000 in checks.
Counting his salary, expenses, expressage of currency and the like, it
must have cost it at least $4,000. It could have had precisely the same
service for one tenth of one per cent or just $102.
Then when that didn't work it sent out its fictitious "dishonor
notices" and bumped into a United States Court injunction!
Then when that didn't work it sent out its lying "Bank Closed" notice
on its "transit slip!" And it cowers behind the skirts of a girl clerk
in trying to skulk out of this picture of malice. In the meantime the
Brookings State Bank held the fort--unshackled by Federal Reserve
oligarchy.
Now jump down into the Atlanta Federal Reserve loot area and take a
look at its banditry there and read what the United States Supreme
Court has to say on this whole thuggery proposition. The method of
Federal Reserve thuggery at this point was to hold out and hoard up a
mass of checks and present them at one time over the counter of the
Atlanta Bank and Trust Company--with the avowed object of crippling it.
Here are quotations from the opinion of the United States Supreme Court
handing out a solar plexus blow to this Federal Reserve thuggery.
"The plaintiffs are not members of the Federal Reserve System and
many of them have too small a capital to permit their joining it--a
capital that could not be increased to the required amount in the
thinly populated sections of the country where they operate. An
important part of the income of these small institutions is a charge
for the service rendered by them in paying checks drawn upon them
at a distance and forwarded, generally by other banks, through the
mail. The charge covers the expense incurred by the paying bank and a
small profit. The banks in the Federal Reserve System are forbidden
to make such charges to other banks in the System. It is alleged
that in pursuance of a policy accepted by the Federal Reserve Board
the defendant bank has determined to use its power to compel the
plaintiffs and others in like situation to become members of the
defendant, or at least to open a non-member clearing account with
defendant, and thereby under the defendant's requirements, to make
it necessary for the plaintiffs to maintain a much larger reserve
than in their present condition they need. This diminution of their
lending power coupled with the lose of the profit caused by the above
mentioned clearing of bank checks and drafts at par will drive some
of the plaintiffs out of business and diminish the income of all. To
accomplish the defendants' wish they intend to accumulate checks upon
the country banks until they reach a large amount and then to cause
them to be presented for payment over the counter or by other devices
detailed to require payment in cash in such wise as to compel the
plaintiffs to maintain so much cash in their vaults as to drive them
out of business or force them, if able, to submit to defendant's
scheme. It is alleged that the proposed conduct will deprive the
plaintiffs of their property without due process of law contrary to
the Fifth Amendment of the Constitution and that it is ultra vires.
The bill seeks an injunction against the defendants collecting checks
except in the usual way.
"The defendants say that the holder of a check has a right to present
it to the bank upon which it was drawn for payment over the counter,
and that however many checks he may hold he has the same right as to
all of them and may present them all at once, whatever his motive
or intent. They ask whether a mortgagee would be prevented from
foreclosure because he acted from disinterested malevolence and not
from a desire to get his money. But the word (right) is one of the
most deceptive of pitfalls; it is so easy to slip from a qualified
meaning in the premise to an unqualified one in the conclusion. Most
rights are qualified. A man has at least as absolute a right to give
his own money as he has to demand money from a party that has made
no promise to him; yet if he gives it to induce another to steal or
murder the purpose of the act makes it a crime.
"A bank that receives deposits to be drawn upon by check of course
authorizes its depositors to draw checks against their accounts and
holders of such checks to present them for payment. When we think
of the ordinary case the right of the holder is so unimpeded that
it seems to us absolute. But looked at from either side it cannot
be so. The interests of business also are recognized as rights,
protected against injury to a greater or less extent and in case of
conflict between the claims of business on the one side and of third
persons on the other lines have to be drawn that limit both. A man
has a right to give advice but advice given for the sole purpose of
injuring another's business and effective on a large scale, might
create a cause of action. Banks as we know them could not exist if
they could not rely upon averages and lend a large part of the money
that they receive from their depositors on the assumption that not
more than a certain fraction of it will be demanded on any one day.
If without a word of falsehood but acting from what we have called
disinterested malevolence a man by persuasion should organize and
carry into effect a run upon a bank and ruin it, we cannot doubt
that an action would lie. A similar result even if less complete in
its effect is to be expected from the course that the defendants are
alleged to intend, and to determine whether they are authorized to
follow that course it is not enough to refer to the general right of
a holder of checks to present them but it is necessary to consider
whether the collection of checks and presenting them in a body
for the purpose of breaking down the petitioner's business as now
conducted is justified by the ulterior purpose in view.
"If this were a case of competition in private business it would be
hard to admit the justification of self interest considering the
now current opinion as to public policy expressed in statutes and
decisions. But this is not a private business. The policy of the
Federal Reserve Banks is governed by the policy of the United States
with regard to them and to these relatively feeble competitors. We
do not need aid from the debates upon the statute under which the
Reserve Banks exist to assume that the United States did not intend
by that statute to sanction this sort of warfare upon legitimate
creations of the States.
"Decree reversed."
The fact is that this Federal Reserve octopus in pursuance of its
policy of gun play, banditry and oppression against State Banks--all
from the dirtiest motives of pure sordidness--presented one of its
tentacles of greed to the Supreme Court of the United States and it
was ruthlessly severed! This is but an introduction--a mere curtain
raiser--to the greatest drama of greed ever enacted under the guise
of law in a civilized land. But here are two things settled by the
highest tribunal in the land; first, that State Banks can't be coerced,
banditized nor bulldozed by the Federal Reserve System and second, that
the Federal Reserve System "is not a private business"--but it is in
fact the business of the United States and "is governed by the policy
of the United States."
CHAPTER VI
THE LOOT OF THE MONSTER
HERE is the proposition. The Federal Reserve System is the most
gigantic parasite and despoiler of industry in the world's annals! You
can search history from its first impression of stylus on parchment
to this minute and you can find nothing which will approximate the
bottomless greed and the fathomless lust for gold of this monstrous
parasite. It isn't banking, it's banditry. It isn't business, it's
pillage. The dirty paws of predacity are encased in the white gloves of
officialdom and constantly dry-cleaned in propagandized hot air! Here
follow some of the records--every figure in them taken from official
reports--carefully concealed from your view by the money masters and by
their lackeys who fatten and batten on the lootage.
And as you look over this record don't overlook this fact. No bank
or no system of banks ever really makes or produces one copper cent
in industry. They take toll from industry. Banks are a necessity
to production and to commerce, but they should be servants, not
masters. This touted and ballyhooed, propagandized and rainbow-painted
"emancipator of credit" has proved itself to be the most leviathan
industrial parasite of the ages. Here is what they call their
"earnings" for the year 1920. Filchery from industry bulls-eyes the
proposition.
For the calendar year 1920 the gross "earnings"--more properly called
filcheries--of the twelve Federal Reserve Banks reached the stupendous
sum of $181,297,338, as against $102,380,583 for the calendar year
of 1919! Quite some money to suck from the teat of industry, isn't
it? The expenses for the calendar year of 1920 were $29,889,307, as
against $20,341,798 for the calendar year of 1919! Over nine million
dollars more in expense account but over seventy-eight million dollars
more in net "takings!" The net filcheries for the calendar year 1920
was the leviathan sum of $151,408,031, as against $82,038,785 for the
calendar year 1919. Almost a two-for-one shot and every dollar of it
peeled from industry's roll! And incidentally meditate on the titanic
expense accounts of these twelve tentacles--$29,889,307, or more than
an average of $2,490,000 apiece for the year 1920! Some luscious
salaries nesting and nestling there--to which reference will hereafter
be made--aren't there?
Here is a list of the twelve Federal Reserve Banks in the precise
order of their pillage with the percentage of their takings to their
paid in capital for the year 1920!
Per cent
Location Capital on Capital
New York $24,618,000 217.4
Chicago 13,213,000 195.6
Atlanta 3,759,000 162
San Francisco 6,412,000 159.1
Boston 7,454,000 137.3
Minneapolis 3,265,000 131.5
Kansas City 4,295,000 129.3
St. Louis 4,229,000 124.3
Cleveland 10,070,000 119
Philadelphia 8,278,000 116.8
Richmond 4,884,000 110.3
Dallas 3,757,000 89.3
The total capital employed was $94,234,000, the total net earnings
$151,408,031, and the average percentage of profit taken on this
capital--after charging most exorbitant expenses--was 160.7 per cent!
Is this a system of banking of, for and by the people, is this the
"emancipation of credit," or is it the hugest parasite ever engrafted
and wrapped about a nation's industry? Compare this with a savings bank
rate of 4 per cent or compare it with a high bank stock dividend rate
of 10 per cent! It's 40 times a savings bank rate, it's 16 times a
high bank stock dividend rate! It's unconscionable, excessive, unfair,
unjust, and a gigantic burden on industry's overloaded back. You're
satisfied--and tickled pink too--to get a safe 8 per cent return
on your investments, but your "emancipator of credit" wolfs down 20
times as much! Is this "credit emancipation" or is it the sandbagging
of industry? Is this twenty-to-one shot "conserving the nation's
resources" or is it practicing the arts of thuggery upon the real
production of real wealth? Is this "binding up the nation's wounds" of
finance or is it blood-letting to the point of exhaustion?
What became of this huge lootage wrung from America's brawn and brain
for the year 1920? Here's where it went. Dividends to the people who
provided the capital, i.e., the scores of thousands of member bank
stockholders, amounted to just a pitiful 6 per cent or $5,654,018 out
of $151,408,031, or about _one-thirtieth_ of the amount! Ought the real
providers of the real capital, upon which stupendous profits were made,
to be fobbed off with _one-thirtieth_ of its real earnings? Ought their
money to be commandeered at 6 per cent, profiteered upon at 160 per
cent and they be practically sandbagged out of 154 per cent? But it's
the law, you say! Of course it's the law and that's one of the infamies
of the System! On the one hand it sandbags commandeered investors, on
the other hand it filches from industry and then with both hands this
legalized parasitism smugly pouches the proceeds into its bottomless
bag of greed!
These twelve octopi have a surplus account and then another receptacle
for loot called a super-surplus account. There was swept for the year
1920 into the surplus account $78,168,287 and into the super-surplus
account $6,747,727. The remainder went as a franchise tax, so called,
to the Government. In a subsequent chapter you will read of this
franchise tax chimera.
The total surplus of the twelve Federal Reserve Banks at the close of
1920, after they had sandbagged out a profit of 160.7 per cent upon
their paid in capital for that year, amounted to the stupendous total
of $202,036,367 upon a paid in capital of $94,234,000 or 214.8 per
cent--accumulated in practically but six years of operations!
Shylock was a pure philanthropist, the Rothschilds and J.P. Morgan &
Co. are just alms givers compared with these gigantic toll takers on
industry's pike.
Do you know or do you know anybody who does know, or have you a friend
who knows of anybody who knows of any such gigantic banking predacity
on earth? The people through their ownership of the member banks in
the Federal Reserve System provide the capital--commandeered from
them--for these Federal Reserve octopi. Why should they be restricted
to a 6 per cent dividend when these Federal Reserve Banks "earned" 160
per cent or over 25 times as much? How do you like to have your money
commandeered for capital and get for one year less than one dollar
out of twenty-five dollars made? Is that "democratizing" banking or
is it bourbonizing banking? Is that "emancipating credit" or is it
shackling it with you wearing the shackles? Can any sane or honest
man--outside the ranks of its lolling beneficiaries--defend any such
division of profits as fair or just or equitable? In this banking the
lamb (the people) and the lion (the Federal Reserve System) lie down
together--with the lamb inside the lion! But you say you're not a
stockholder in any of the commandeered Banks of the Federal Reserve
System and aren't hurt. Very well then. But the chances are that you
are a depositor in one of those member banks and you are furnishing
the Federal Reserve System with a part of its huge conscripted reserve
deposits with no interest paid on them. If member banks were getting
the interest they should get from these octopi they could pay you more
interest than they do pay you.
The fact is that the real owners of the commandeered capital and of
the conscripted deposits get the "rind" only of the huge "melon" when
it's cut. The juicy interior of the "melon" goes to the Federal Reserve
bureaucrats and to their money-masters who batten and fatten and thrive
on the pillagement of real production.
CHAPTER VII
HOW THE LOOT IS GATHERED
MEASURE now the reservoir of liquid capital--the hugest on this
planet--siphoned into the coffers of the Federal Reserve System.
The first pool comes from the capital of upwards of $100,000,000
commandeered at 6 per cent interest from the member banks. That is
but a little pond or lakelet. Then there comes the ocean of money,
over $1,800,000,000 conscripted at no per cent interest as reserve
deposits from the member banks. This capital and these deposits--almost
$2,000,000,000--are held practically in perpetuity. It is the hugest
reservoir of liquid money on earth, it costs its manipulators and
managers and controllers not one red cent of their own money and only a
petty 6 per cent on a petty $100,000,000 of the gigantic sum. In other
words, for an interest charge of practically $6,000,000 a year the
Federal Reserve System gets the use of practically $2,000,000,000 or
$2,000,000,000 at the absurd interest charge of three-tenths of one per
cent!
That is what it really costs the money masters, the Invisible Empire
of the U.S.A. and the Federal Reserve System--three-tenths of one per
cent--for the practical control in perpetuity of the mightiest mass of
liquid wealth ever massed on earth! Look at this in cold blood! Figure
what it would mean to you if you could get the use of a petty $100,000
at three-tenths of one per cent interest! Then figure what it means to
them to have the use of 20,000 times $100,000 at three-tenths of one
per cent interest. Gives you an attack of vertigo, doesn't it?
Member banks and their stockholders and depositors furnish this titanic
amount of practically $2,000,000,000 at three-tenths of one per cent
interest and then member banks are graciously permitted to borrow from
the Federal Reserve System _their own money_ at rates varying from
_six to eighty-seven and one-half per cent per annum_. Impossible, you
say? Not even organized Federal Reserve banditry, not even Amalgamated
Shylockery, would have the supernal gall to so sandbag productive
industry?
Here are the figures taken from the records of the Federal Reserve Bank
at Atlanta, from the records of the Federal Reserve Board at Washington
and from the records of the Comptroller of the Currency at Washington.
The Governor of the Federal Reserve Bank at Atlanta, the Governor
of the Federal Reserve Board at Washington and the Comptroller of
the Currency at Washington--each of them and all of them--are hereby
challenged to refute or question their absolute correctness and
authenticity.
In a small town in Alabama was struggling a small National Bank. Its
capital was $25,000 and its surplus was $12,500. It was a compulsory
customer of the Federal Reserve Super-Shylockery sucking blood at
Atlanta, Georgia. Its money had been commandeered by law to buy stock
in the Super-Shylockery. Its reserve deposits had been conscripted
by law to feed pap to the same parasite. It served the cotton
industry--the breath of industrial life in its territory. Its name is
not given because identification might work it great harm--but the
Federal Reserve Oligarchs know its identity. Don't you ever doubt it.
This little National Bank in Alabama was in the grip of the Federal
Reserve Octopus. It had to move the cotton crop in its territory.
Farmers, planters, merchants--and in short, all industry in its
territory including its own salvation--depended on the moving and on
the marketing of the cotton crop. It was "root hog or die" and this
little bank rooted and was looted precisely in this wise: It had to
borrow from the Federal Reserve Super-Shylockery at Atlanta. It had no
other house of refuge. It had to borrow something over $100,000 from
the Federal Reserve Bank at Atlanta and for the week's period ending
on July 31, 1920, it was charged and it paid as high as _thirty-one per
cent per annum interest_! Two months later when its loan reached as
high as $115,000 it was charged and it paid as high as _eighty-seven
and one-half per cent per annum interest_ to this subter-human
super-Shylock. For the two weeks ending on September 30, 1920, it was
borrowing an average of $115,211. Two weeks' interest at six per cent
would have been $288, but the records show that this little bank paid
the Federal Reserve Pawnbrokery at Atlanta for interest on that amount
for that time $2,189--running all the way from six to _eighty-seven and
one-half per cent per annum_! The actual average time for this loan for
that two weeks' period was almost exactly at the rate of _forty-five
per cent per annum_, or at the rate of $51,884 per year for the use
of $115,211! In about nine months that loan of $115,211 at that rate
would have eaten up the capital and surplus of that little Alabama
National Bank. Was that banking or was it putrid pawnbrokery? Oughtn't
the Federal Reserve Bank at Atlanta to put the three ball sign of
pawnbrokery over its portals?
And yet you read subsidized headlines sprawled athwart the columns
of a lick-spittle press about "Agricultural Interests Fostered by
Federal Reserve Banks" and "Farmers Aided by Federal Reserve System"
and messes of the like "bull" and "bunk" fed out by paid press agents
and absorbed by a befooled people chained to such pawnbrokery! "Aided"
by a sandbag! "Fostered" by pawnbrokery thuggery! It's enough to make
a "kike" pawnbroker sob and moan at his soft-heartedness. It's enough
to make Olomon Solomon Levi pull down his three balls and wail in the
Synagogue!
Later on and for what real reason no one knows--except that it wasn't
from soft-heartedness--a portion of the usurious loot was disgorged by
the Atlanta Federal Reserve pawnbrokery. That isn't really interesting.
What is really interesting is the super-supernal and subter-brutal
gall to first extort it. Many a usurer when caught and cornered has
disgorged loot--that's as old as usury. Jesse James' press agent
could boast of as much. When grilled on this interesting subject the
multi-initialed Governor Harding of the Federal Reserve Board chittered
and chattered about "basic lines of credit" and "progressive rates of
interest," but that doesn't chlorinate such sandbaggery. Any pawnbroker
can mutter and mumble such phrases.
When a bank has to pay up to _eighty-seven and a half per cent_
interest you can imagine what its customers must pay it.
And at the very time--during these very two weeks ending September
30, 1920--when this little Alabama National Bank right at the door of
real production was being charged those Shylock rates for a paltry
loan, banks in New York were getting as high as $100,000,000 handed
out to them at from _five to seven per cent_. And yet you read about
the Federal Reserve System "equalizing interest rates," "emancipating
credit" and the like bunk! Why, it's enough to make Shylock and
Pecksniff rend their cerements and jump from their graves and have
another try at extortion and at applied hypocrisy. A difference of
_eighty per cent per annum_ between New York City--where nothing but
parasitism is grown--and Alabama--where real wealth of real cotton
grows--is some difference, isn't it? And the eighty per cent difference
coddles parasitism and penalizes production. This isn't the only
sandbaggery of extortion perpetrated by the Federal Reserve oligarchy.
But it's a pretty good example, isn't it?
Now take a look at the twelve regional pawnbrokeries for the year 1921
in the order of their pillagements. Here they are:
Location Paid in Capital Net Earnings
Atlanta $4,189,500 131.18%
Chicago 14,307,000 101.31%
New York 27,114,000 96.23%
Minneapolis 3,569,000 88.21%
Richmond 5,428,500 80.94%
Kansas City 4,570,500 66.86%
San Francisco 7,374,500 66.72%
St. Louis 4,603,000 64.13%
Philadelphia 8,736,500 61.11%
Cleveland 11,134,000 56.44%
Boston 7,935,500 53.94%
Dallas 4,203,000 38.40%
------------ ------
Total Capital $103,165,000 Average 79.56%
You would expect to find--from the facts set forth in the first part of
this chapter--that the most conscienceless of these gentry, the Atlanta
super-Shylockery, would show the hugest pile of pillage, and it does!
On a paid in capital of $4,189,500, it vampired and blood-sucked out a
net profit of $5,496,000, or 131.18 per cent. What the other vampires
blood-sucked out you can read from the above table. You know the net
earnings made by banks where you live. You know that a net earning of
12 per cent is a large one, but here--in a year of general disaster
and of huge losses--you have an average net earning for these twelve
vampires of production of 79.56 per cent or over six times the average
net earnings of National Banks for a long term of years!
Ask yourself if this enormous net earning percentage, made out of
commandeered capital and out of conscripted deposits, isn't outside
the realm of banking and in the realm of unconscionable vampire
pawnbrokery? Ask yourself--in a land where pawnbrokers are licensed
and restricted to two to three per cent a month or 24 to 36 per cent
per year--if 79.56 per cent per year doesn't brand such a system as
outrageous Shylockery?
But that isn't the worst of it. Before making these net earnings
this Federal Reserve System sandbagged out an "expense account" of
$36,066,065, or an average of $3,005,083 for each regional pawnbrokery.
The most reckless expense squandermaniac was the New York sandbaggery
with an expense account of $8,167,780, and the most economical was
the Minneapolis satrapy with an expense account of $1,325,867. In a
succeeding chapter reference will be made to these expense orgies. But
ask yourself if, in a year of commercial disasters and of enforced
economies, such leviathan expenses aren't an outrage? Ask yourself
if such squandermania--imposed upon the producers of real wealth--by
bureaucratic pillagement isn't alone and in itself an alarm clock?
Here is a table showing the location, the capital and the piled up
pillagements of these twelve regional pawnbrokeries:
Surplus
Location Paid in Capital Percentage
New York $27,114,000 222
Atlanta 4,189,500 217.6
Kansas City 4,570,500 211
Minneapolis 3,569,000 209.2
Boston 7,935,500 207.8
San Francisco 7,374,500 206.2
Philadelphia 8,736,500 205.4
St. Louis 4,603,000 204
Cleveland 11,134,000 203.2
Richmond 5,428,500 203.2
Chicago 14,307,000 202.8
Dallas 4,203,000 176
------------- -------
Total $103,165,000 Average 209
Upon this capital (commandeered at a petty 6 per cent) and from its
gigantic deposits (conscripted at no per cent) this super-vampire
Federal Reserve System has in a few brief years--after paying
stupendously extravagant expense accounts--piled up an accumulated
pillage of $215,523,000. Do you know or do you know of anybody who does
know--outside the magic circle of Hebraic pawnbrokery pillagement--of
any such banking pillagement for the years 1914-1921, inclusive?
And incidentally these mazuma monarchs have $42,231,240 invested in the
palatial emporiums where they ply their traffic and gild their pills of
pillage--to which reference will later be made.
Why don't you find these facts elsewhere? Why have they been hidden
from you? Why doesn't the "Independent Press"--about as "independent"
as a shackled slave--blazon them forth? Why don't editors of "Fearless
Magazines"--about as "fearless" as a galley slave at the oars--ring
the tocsin of alarm? Learn why here and now. Because in plain
Americanese, they haven't the "guts." These Federal Reserve money
despots have the press of this land "buffaloed" and "hog-tied"--and
"hog"-tied is particularly right too. Through their credit channels
these Federal Reserve despots have a strangle hold on the banks and
on the advertisers of the U.S.A. and the banks and the advertisers
have a strangle hold on the press and there you are! Federal Reserve
propaganda tinted and tainted with the extract of gold is published by
the yard. But the real facts, the interesting details of pillage are
all surrounded by Maxim silencers!
The next chapter will tell you of the Partiality of the Pillage.
CHAPTER VIII
THE PARTIALITY OF THE PILLAGE
HERE is the idea. For reasons best known to themselves Federal Reserve
Oligarchs penalize production and favor parasitism. Who are really
entitled to the largest loans from the huge storage or reservoir of
Federal Reserve money? Why, the real producers of the real wealth, the
agricultural interests in the U.S.A. Have they had it? They have not.
Look at the figures--official, please remember--as of January 1, 1920,
when the Federal Reserve "Drastic Deflation" Drama was beginning to be
staged.
At this time the Federal Reserve Bank of Atlanta was lending to all
its member banks in the States of Georgia, Florida, Alabama and
parts of Louisiana, Tennessee and Mississippi a total of $88,000,000
and had "bought paper" to a total of $16,000,000--and that included
some $10,000,000 which it was loaning to other Federal Reserve
Banks, principally in the North for speculative loans. Mark that
down--$94,000,000 of loans covering that enormous area of production.
At this same time the Federal Reserve Bank of St. Louis was lending to
all its member banks covering the greater part of Missouri, Arkansas
and parts of Illinois, Indiana, Kentucky and Mississippi $80,000,000
and had $31,000,000 of bought paper--including $20,000,000 taken from
other Federal Reserve Banks. Mark that down--$91,000,000 of loans in
that area of production.
At this same time the Federal Reserve Bank of Kansas City was lending
all its member banks in Kansas, Nebraska, parts of Missouri, Oklahoma,
Wyoming and Colorado $88,000,000 and had $17,000,000 of bought
paper. Mark that down--$105,000,000 of loans in that fertile area of
production.
At this same time the Federal Reserve Bank of Dallas was lending to all
its member banks in all of Texas, parts of Oklahoma, Louisiana, New
Mexico and Arizona $57,000,000 and had $6,000,000 of bought paper. Mark
that down--$63,000,000 of loans in that vast area.
At this very time, in January, 1920, one huge speculative bank in
New York City was borrowing of the New York Federal Reserve Bank
$130,000,000! This one New York Bank--catering to speculators, to
money masters, to "corner" builders and to "high financiers," not
even remotely connected with the real production of real wealth--was
borrowing more money from the New York Federal Reserve Bank than the
Federal Reserve Bank of Atlanta or of St. Louis or of Kansas City or of
Dallas was lending to their member banks in their huge areas of real
production of real wealth! And not only that, but at that very time the
Federal Reserve Bank of New York was borrowing of other Federal Reserve
Banks $100,000,000 to hurl into the New York maelstrom of speculation!
And not only that, but at that very time all the money which all the
twelve Federal Reserve Banks in the U.S.A. were lending on agricultural
and live stock paper to the 9,000 member banks in the 48 states of the
U.S.A. amounted to the pitiful and piffling sum of but $51,068,000--not
one-half of the amount borrowed by one speculative bank in New York
from the New York Federal Reserve Bank. At that time agricultural
interests, particularly in the South, and live stock interests all over
the land were beseeching the Federal Reserve Oligarchy for money and
beseeching in vain.
Take another look at the official figures for the month of November,
1920. At this time the real producers of real value--in the West and
the Northwest and in the South and the Southwest--were gasping for
money and credit. Bear in mind that their property, their production
and their toil forms the real foundation for the vast superstructure
of American wealth. Where you find a lily-fingered parasite lolling in
a mahoganized eyrie of splendor and gambling with money--the tokens
of production--you find a battalion of real producers in the great
stretches of America toiling to produce real values. If there is to
be any discrimination, if there is to be any partiality shown by the
overlords of the Federal Reserve System, it ought to favor production
of real wealth, and not parasitism gambling with its proceeds. When
there was this drouth of credit and money where real wealth is made,
how was the Federal Reserve System opening its irrigation gates of
money? It shut them in production's face and opened them wide at
parasitism's demands.
At this very time--in the middle of November, 1920--one speculative
bank in New York borrowed $134,000,000 from the Federal Reserve Bank in
New York, or $20,000,000 more than the Federal Reserve Bank of Kansas
City was lending to the 1,091 member banks in the Tenth Federal Reserve
District.
Another speculative bank in New York borrowed from the Federal Reserve
Bank in New York $40,000,000 more than the Federal Reserve Bank in
Minneapolis was lending to its 1,000 member banks in Minnesota, North
Dakota, South Dakota, Montana and part of Wisconsin.
Another speculative bank in New York borrowed from the New York Federal
Reserve Bank $30,000,000 more than the Federal Reserve Bank of Dallas
was lending all its member banks in all its huge territory.
Another speculative bank in New York borrowed from the New York Federal
Reserve Bank $20,000,000 more than the Federal Reserve Bank of Richmond
was lending to all its member banks in the Fifth Federal Reserve
District.
Massing these gigantic figures in another form, the fact is that at
the time four speculative banks in New York were borrowing from the
New York Federal Reserve Bank an average of $118,000,000 apiece--or
practically as much money as the Federal Reserve Banks of St. Louis,
Kansas City, Minneapolis, Dallas and Richmond were lending more than
4,000 member banks in 21 states comprising more than half the entire
area of the United States!
If this isn't coddling parasitism and penalizing production, you find a
name for it!
Millions by the hundreds for parasitical speculation, for the pounding
down of prices in "short" markets in a "bear" campaign waged against
real values and millions by the paltry tens only for the real producers
of real wealth! If these actual figures don't batter down the "prop" of
Federal Reserve propaganda about "furthering agricultural interests,"
nothing will. "Furthering agricultural interests" with a bludgeon!
"Equalizing credits" with a meter of equality so stretched as to enwrap
parasitism! If these actual figures don't convict Federal Reserve
Oligarchy of the height of Pecksniffian hypocrisy it's convict-proof!
Look over--and don't overlook--these figures. You can't consider them
in cold blood without irresistibly concluding that Federal Reserve
Oligarchy pampers parasitism, penalizes production and bestrews its
gigantic resources by favoritism instead of by merit. It is obsessed
by a squandermaniac prodigality for speculation and by a niggardly
parsimony for real production of real wealth. It exalts the tokens of
wealth and the jugglers of it far, far above its real producers. It
reaches out almost limitless largess to the pinnacles of parasitism
while practically starving the real makers of real wealth on whose
shoulders parasitism gaily rides. It shovels out hundreds of millions
for speculation and serves with an eye-dropper tens of millions for
production. It's unfair, unjust, inequitable and Janus-faced. It
mumbles and mutters and chitters and chatters and propagandizes about
"equalizing credits" and "emancipating credit," while in truth and
in fact it is grossly discriminating in its credits and instead of
"emancipating" credit enchains it to the golden chariot of speculative
splendors! That's what it really does and that's the true tale of its
Partiality of Pillage.
CHAPTER IX
THE TRAGEDY OF DRASTIC DEFLATION
YOUR money masters, the Federal Reserve Board at Washington and the
twelve tentacular Federal Reserve Banks in their regional satrapies,
staged in 1920 the greatest financial debacle in human history.
They were, and they are, as much your money masters, as was ever a
slave-holder the master of his human chattel. Your labor and the
produce of your labor--in whatever capacity you worked--were, and are
today, as completely under their control as was ever the labor and
the production of the labor of slavery before Lincoln's Emancipation
Proclamation chiseled chains. So long as you exist in the U.S.A. and
the Federal Reserve System exists, the lash of these money masters will
writhe over your back and you must cringe under its sting. Make no
mistake about that. No sceptered king nor bedizened kaiser ever wielded
a tithe of the power which rests in the cunning brains and in the
ruthless edicts of these money masters.
Here are the facts. Read first these quotations from their own lips and
from their own pens which prove that these Federal Reserve oligarchs
deliberately staged the greatest financial debacle in all human
history. Nothing in human history approaches it for cold-blooded,
wanton, ruthless slaughter of values.
"Credit must be brought under effective control."
"The Board (meaning the Federal Reserve Board) will not hesitate to use
every statutory power to regulate currency and credits."
"Our present task therefore is to proceed with the deflation of credits
as rapidly and as systematically as possible."
If for "deflation" you read "destruction" you get the real intent and
the real meaning of these ichor-veined assassinators of real values.
Don't let these word jugglers and these money jugglers confuse you with
their lacquered language. When they say "inflation" what they really
mean is increase of values and when they say "deflation" what they
really mean is destruction of values.
The tragedy was staged in 1920--about fourteen months after the World
War was closed--but it didn't get going good and strong until the
summer and fall of 1920. After the summer had arrived, after grain and
cotton were in the ground, after cattle and sheep were on the ranges,
after merchants' stocks were on the shelves, after factories had
run at full capacity and after all producers and merchandisers were
hopelessly committed and couldn't retrace their footsteps, the lash
fell. Or to change the figure the trap wasn't sprung until every foot
was within its iron ring.
The first proof of a murder is the corpse and here are the corpses of
murdered values just as they were struck down by the Federal Reserve
bludgeon. Look at them.
New Orleans
1920 No. 3. Chicago Corn Middling Cotton
January 1.47 .40
May 1.98 .40
June 1.83 .40
July 1.53 .39
August 1.53 .33
September 1.29 .27
October .87 .20
November .80 .17
December .73 .14
1921
January .65 .14
February .63 .13
March .61 .11
April .55 .11
May .60 .11
June .60 .11
July .60 .11
August .55 .12
Here you get from January, 1920, to August, 1921, when these value
assassinations culminated, a corn debacle of 92 cents a bushel and a
cotton debacle of 28 cents a pound. If you had known that this value
assassination was en route and had "gone short" 1,000,000 bushels of
corn you could have robbed the corn growers of this land of $920,000,
couldn't you? And some "high financiers" did that very thing. If you
had known that cotton was going to shrink at least 28 cents a pound and
had "gone short" 10,000 bales (500 pounds to the bale) you could have
robbed the cotton growers of this land of $1,400,000, couldn't you? And
some high financiers did.
Take a look at some more value murders.
Wheat No. 2
Red Winter Wool
1920 Chicago Ohio Grades
January 2.63 1.23
May 2.97 1.16
June 2.89 1.00
July 2.80 .90
August 2.47 .87
September 2.40 .83
October 2.20 .72
November 2.05 .69
December 2.01 .54
1921
January 1.96 .54
February 1.91 .54
March 1.67 .52
April 1.38 .52
May 1.56 .50
June 1.43 .49
July 1.22 .49
August 1.23 .49
A destruction of $1.40 a bushel on wheat and of 74 cents a pound on
wool ought to satisfy the most murderous destructionist of values,
oughtn't it? You can make your own computations as to the millions
coteries of "bears" could make--and doubtless did make--out of these
value assassinations.
Have some more views of values on the toboggan.
Penn.
1920 Steers at Chicago Crude Oil
January 15.93 5.06
May 12.60 6.10
June 15.03 6.10
July 15.38 6.10
August 15.35 6.10
September 15.25 6.10
October 14.68 6.10
November 14.57 6.10
December 12.09 6.10
1921
January 9.84 5.79
February 9.31 4.18
March 9.56 3.00
April 8.71 3.18
May 8.42 3.35
June 8.09 2.65
July 8.40 2.25
August 8.77 2.25
When you grease the toboggan with $2.81 a barrel on oil and $7.16 a
hundred on steers you can slide a good many millions of dollars into
the maws of foresighted "short sellers," can't you?
This panorama of value murders could be continued for pages of tables.
They all tell the same story. Granulated sugar dropped in the same time
from .15 cents a pound to .05 cents a pound; copper ingots from .19
cents a pound to .11 cents a pound; cotton yarn from 72 cents a pound
to 25 cents a pound; pig iron from $37.75 per ton to $18.20 per ton;
hides from 40 cents a pound to 14 cents a pound and so on down the line.
These are the corpses strewn all along America's highways of
production. What was the bludgeon which hit all these commodities on
the head and drove them into the pit of loss? It was the persistent,
wanton, ruthless and cold-blooded calling of loans and refusal of bank
credits and contraction of currency by Federal Reserve oligarchy. They
said they'd do it and they did it--aplenty. Here is the bludgeon, look
at it.
Their total of all loans and discounts including "bought paper" in
all of the twelve Federal Reserve Shylockeries stood around from
$2,700,000,000 to $3,000,000,000 from January to October, 1920, when
the bludgeon pounded hard. Here is the bludgeon. Look at it in action.
1920
October $3,099,672,000
November 2,983,103,000
December 2,974,836,000
1921
January 2,622,174,000
February 2,500,013,000
March 2,356,160,000
April 2,180,178,000
May 1,995,051,000
June 1,782,951,000
July 1,661,036,000
August 1,527,255,000
And from May 28, 1920, to January 25, 1922--when the slaughtered
were piled the highest--the twelve Federal Reserve Shylockeries
hammered and battered down their bank credits in the leviathan sum
of $2,005,149,000, or from $2,938,031,000 to $932,000,000! And
incidentally the circulation of Federal Reserve notes contracted in the
same period by the stupendous sum of $923,020,000! So that from May 28,
1920, to January 25, 1922, the Federal Reserve oligarchy--at their will
or at their whim or for hidden purposes--contracted bank credits and
currency by the titanic total of $2,928,169,000, almost $3,000,000,000,
almost 3,000 million dollars. That was the pile driver battering your
values down into the mire of loss.
Take now a look at the financial corpses so slaughtered. Here they are.
Look 'em over and don't overlook the hands that killed them.
In 1921 there were 19,625 business failures as compared with 6,451
in 1919, or an increase of 13,174--more than three for one. And the
liabilities reached the stupendous total of $627,401,000, an increase
of $514,000,000 over 1919, more than five for one. In the so-called
panic year of 1907, the high tide of business failures, liabilities
were only $197,000,000, as against $627,000,000 in 1921. Why, if 1907
was a "panic year," 1921 was a pandemic year!
And here is another destruction meter, absolutely infallible--the
suicides. In the first six months of 1921 there were 4,527 men
suicides, as against 1,810 for the same period in 1920; 1,982 women as
against 961; 214 boys as against 88 and 293 girls as against 137--7,016
suicides for the first six months of 1921 as against 2,996 for the
same period of 1920. The enormous increase in men suicides--over two
and one-half for one--tells its own story. They came from all classes,
bankers, merchants, farmers, laborers and professional men. None know
how many of this enormous increase, the largest since statistics have
been kept, were driven to desperation and to death from hunger, from
unemployment, from the loss of life's toil or from the failure of
enterprises in which they had spent their lives. No statistics can
summarize human emotions, but they can tell and they do tell of the
greatest holocaust of suicides ever ravaging this land--undoubtedly
due to industrial tragedies staged by the cold blooded butchery of
production. This much is certain. Never before in a given time in this
land has there been such a holocaust of failures, of suicides and of
unemployment. Never before in this land were such sacrifices laid on
the twin altars of Moloch and of Mammon. And they precisely correspond
in time with the Tragedy of Drastic Deflation!
During all this time and particularly beginning with the late summer
and early fall of 1920, individuals, associations, committees
and organizations representing farmers, planters, cattlemen,
manufacturers, bankers and merchants--in short, representatives of
all industries--were entreating and beseeching Governor Harding of
the Federal Reserve Board and his associates to be more mild and more
lenient and more reasonable in their drastic tragedy of destruction.
They might as well have besought a cyclone or entreated a tornado or
prayed to an earthquake. Cold-bloodedly, relentlessly and wantonly
loans were called, extensions were refused, renewals were tabooed and
bank credit put on the chopping block. The very people whose toil and
whose labor and whose real wealth were building the magnificent palaces
wherein these Shylockeries were housed and were paying the exorbitant
salaries of these money despots were being ruined by their servants!
The Federal Reserve System at that very time had a loaning ability
of over $2,000,000,000 more than it then used and not only wouldn't
use it, but contracted its loans by $2,005,149,000 and currency by
over $932,000,000. Instead of aiding production, it throttled it. And
instead of aiding the producers of commodities to carry them it forced
producers to market them at most ruinous losses! Instead of dropping
the curtain on this Tragedy of Drastic Destruction, it ran it to its
close! It staged the greatest debacle of blasted credit, number of
failures, magnitude of liabilities, suicides and unemployment ever
witnessed in this land. It did it deliberately, ruthlessly and as per
program too.
Go back over these figures, all taken from official records--all
undenied and undeniable--and ask yourself if ever before in human
history the industries and credit of a successful nation and
successful in the greatest War ever waged, too, were so butchered?
These figures indict and convict the Federal Reserve System, as it
has been maladministered, as the arch betrayer of a people's trust.
It indicts and convicts them as juggling with the symbols of value
to the destruction of real values. No sane man can read this record,
frozen into Government statistics, and defend the oligarchs who made
it. It never was "deflation." That is just a sonorous euphemism to
disguise sandbaggery. It was destruction to scores of thousands and to
hundreds of thousands of the real producers of real wealth. Billions
of dollars of real values were annihilated, not by the trend of the
markets, but by artificial "bear" markets artificially created by the
throttling of credit. You can't withdraw literally billions of credit
and currency--almost three billions of them--the very life-blood of
commerce from industry and have it thrive any more than you can tap a
man's jugular vein and have him live! That's what really happened in
this Tragedy of Drastic Destruction.
And upon whom did this Tragedy bear the hardest? Upon those least able
to endure its fearful pressure--the farmers. Bear in mind that farming
is not only the largest industry in the U.S.A., but it is the only
absolutely basic industry--the keystone upon which rests the entire
industrial superstructure.
Here is what this Tragedy of Drastic Deflation did to the farmer as
measured for the years of 1919, 1920 and 1921.
Value in 1919 $13,500,000,000
Value in 1920 9,000,000,000
Value in 1921 5,675,000,000
In each of these years there was practically the same acreage under
cultivation, 350,000,000 acres. In 1919, farm products were worth
$39 per acre, in 1920, $26 per acre and in 1921, $16 per acre. Here
is where the Federal Reserve credit crusher pulpified the finest--at
the very foundation of all industry! The production of these basic
farm products--the real foundation of all this Federal Reserve
splendor--was practically the same in volume for these three years,
but the Federal Reserve credit crusher crushed it from $39 to $26 to
$16 per acre measured by its purchasing value! That's the Tragedy of
Drastic Deflation in its final analysis battering down the money value
of America's basic industry almost two-thirds! But the profits of the
Federal Reserve System--and its exorbitant expense account and its
lavish salary rolls--kept off the toboggan down which slid all the
others!
CHAPTER X
THE PALACES OF THE MONSTER
FEDERAL Reserve Oligarchy houses itself most palatially. There is
nothing in Government annals or in corporate prodigality private or
public to anywhere approximate the absolute squandermania of Federal
Reserve obsession for luxurious quarters.
If you want in your city a Post Office Building, a Federal Court
Building or a Custom House Building you must lobby and beseech and
petition and "trade" and pull wires in Congress until you do--or
don't--get it. But it's different with Federal Reserve satraps. By
merely a Federal Reserve ukase or decree or resolution or order an
Aladdin's Palace arises like magic--paid for by your money. No such
squandermaniac obsession has ever before been seen in this country in
prodigality of buildings, in luxuriance of equipment or in splendor
of quarters. And not only that, but the speed with which enormous
sums have been "charged off" from building accounts is absolutely
appalling. Take a look at some of the items of this profligacy.
The Philadelphia Federal Reserve Bank bought a building for $600,000
and spent in "remodeling" it $1,099,638, making a total cost to
September 30, 1921, of $1,699,638, and then "charged off" to
"depreciation allowance" the enormous sum of $1,166,848! In other
words, after spending $1,099,638 in "remodeling" its building it
"charges off" for "depreciation" $1,166,848, or $67,210 more than it
cost to "remodel" it! So that after spending $1,099,638 on "remodeling"
the whole property is worth only $532,790, or $67,210 less than it
cost before "remodeling." Either Philadelphia real estate depreciates
with lightning-like rapidity or Federal Reserve judgment isn't worth
a picayune or this huge "charge out" for "depreciation" is a mere
camouflage or deception. Take your choice. It's either damphoolishness
or incompetency's height of deception. And that's all you can make it.
The San Francisco Federal Reserve Bank spent originally in "original
investment" for a building $520,785, spent $232,895 for "remodeling,"
spent $448,776 for "new building" operations, making a total cost
to September 30, 1921, of $1,202,456 and then "charged off" for
"depreciation allowance" $530,795, so that after spending $681,671 on
"remodeling" and new buildings on an original purchase of $520,785,
it emerges with a value of but $671,661! Or in other words, after
spending $681,671 on a $520,785 purchase it claims the gross value to
be but $671,661, or but $150,876 more than the original purchase! Or
in other words, it got but $150,876 of value for an expenditure of
$681,671! Does San Francisco real estate depreciate as fast as that,
or are Federal Reserve business oligarchs futile wastrels, or is this
method of accountancy just a camouflage? Figure it out for yourself.
The St. Louis Federal Reserve Bank made an "original investment"
in building of $1,311,197, spent $560 on "remodeling" and "charged
off" $685,000 for "depreciation allowance," emerging with a value
of $626,575 for an expenditure of $1,311,757! Another case of swift
shrinkage in value or wastrelcy in expenditure or camouflage in
accountancy. Figure it to suit yourself.
The New York Federal Reserve Bank paid $4,797,882 for its site, spent
up to September 30, 1921, $758,072 on building operations, making
a total expenditure of $5,555,954 and immediately charged off to
"depreciation" the enormous sum of $1,841,618! Did it pay too much for
its site or does real estate in the heart of the greatest city on earth
depreciate almost 40 per cent almost immediately after purchase? Figure
it for yourself. Later on reference will be made to this New York
oligarchical palace of splendor.
Up to September 30, 1921, Federal Reserve satrapists had spent
$36,158,056 on its twelve building operations and had "charged off"
as "depreciation allowance" the gigantic sum of $6,684,213! In other
words, in a very few years, and in most cases practically at once, it
depreciated its own building accounts by about eighteen per cent!
Incidentally up to the same date it had spent $3,212,349 on its Branch
Bank buildings and had depreciated them by $346,369. In its Helena
Branch it made an "original investment" of $15,000, blew in $161,438
on the purchase and then "charged off" for "depreciation allowance"
$77,738 when it got through, or about 45 per cent on the whole
transaction.
Up to September 30, 1921, Federal Reservists, including branch banks,
had "reserved" $39,370,405 of your money in building operations and
had them "depreciated" by the enormous sum of $7,030,582, or about
18 per cent, almost immediately. You are entitled to draw your own
conclusions as to the necessity for these palaces, for the splendor
of their equipment and for the real motive of so speedily "charging
off" such enormous sums for "depreciation allowance." You are entitled
to draw your own conclusions as to the wisdom of allowing a coterie
of bureaucrats to spend such huge sums for their personal comfort or
convenience or splendor unsupervised and unhindered. You are entitled
to ponder on the proposition that these huge expenditures aren't
obtained by legislation from Congress, but are made to suit the whim or
ambition or convenience or extravagant ideas of an appointive body.
The New York Federal Reserve Bank in cost, in expenditure, in
equipment, in splendors purely for the convenience of its occupants
is intended to surpass any like building on earth. Its cost has been
estimated at from $17,000,000 to $20,000,000. Its corner stone--amid
speeches and plutocratic glorifications--was laid on May 31, 1922. The
fees of architects and engineers alone amounted to the stupendous sum
of $1,106,000. It is intended to house 5,000 employees--about 2,500
more than it now has.
Make right here some comparisons.
In the first week of May, 1922, the loans and discounts of the New
York Federal Reserve Bank amounted to $89,956,248, and it must have a
$17,000,000 building and equipment to handle its activities. On the
same date the loans and discounts of the National City Bank of New York
amounted to $506,840,494, and its bank buildings to but $6,060,000. On
the same date the loans and discounts of the National Bank of Commerce
of New York amounted to $259,165,930, and its bank building to but
$4,000,000. Figure it for yourself. It makes some difference whose
money is being spent, doesn't it? Private business is one thing, and
public business is another thing, when it comes to housing it, isn't
it? Compare the volume of the loans of these banks, compare their
building costs and draw your own conclusions.
In addition to veined marble and polished brass and in addition to a
mass of luxurious equipment the New York Federal Reserve Bank has, or
will have on completion, a beautiful auditorium, a gymnasium, a club
room for men, a club room for women, and a restaurant.
It will doubtless gratify farmers on the prairies, workmen all over
the land, merchants, and manufacturers and professional men to know
that their toil, their efforts and their earnings are in effect being
levied upon to provide this modern palace equipped with an auditorium,
a gymnasium, two clubs and a restaurant.
It will doubtless gratify the stockholders in National Banks, whose
money is commandeered to capitalize this leviathan, to know that
their money, or its proceeds, or its earnings, is being used to erect
and equip a veritable Temple of Mammon with all these attendant
luxuries--which they themselves cannot afford in their places of
business!
If you, who read these lines, could commandeer over a hundred millions
of dollars for capital at 6 per cent and could conscript over
$1,800,000,000 of deposits at no per cent you could transact your
business in a palace in the heart of New York with an auditorium and
club rooms and a gymnasium and a restaurant, couldn't you? But as you
can't commandeer your neighbor's capital nor conscript for nothing the
deposits of the public, you find yourselves compelled to work and to
provide the wherewithal for those who can!
You can measure these lavish expenditures for buildings and equipments
and luxuries by any known measure, by volume of business, or by like
buildings for like purposes and it is as clear as day that these
Federal Reserve Palaces are a monument of needless extravagance and
of wanton wastage--pulled off by the ukase of enthroned bureaucracy
spending "other people's money!" That's all you can make of the
Monster's Palaces.
CHAPTER XI
THE MONSTER'S EXPENSES
YOU are going now to look over--and not overlook--the most stupendous,
wasteful and exorbitant bank expense account ever entered on bank
ledgers on this earth. You are going to look at the details of an
expense account where the items run by millions, where expenses have
no legal limit and where they are incurred, paid and audited without
any supervisory authority. You are going to gaze at an expense account
where the "sky is the limit."
Take first a look at the New York Federal Reserve Bank's expense
account. That one is the most arrogant, wasteful and prodigal of all
the twelve regional satrapies.
In 1917 the entire salary and wages account of the New York Federal
Reserve Bank was $970,580 and their total loans and discounts were
$399,078,000. Mark that down--salaries and wages of $970,580 and
loans and discounts (which really measure the business of a bank) of
$399,078,000, or $1 of expense to every $413 of loans and discounts.
On January 25, 1922, the salary and wages account of the New York
Federal Reserve Bank was $4,988,703, with loans and discounts of
$146,526,938, or $1 of expense to every $29 of loans and discounts!
Ask any practical banker, any administrative business man, any expert
accountant or any efficient expert if it is possible to justify any
such expense ratio. One to four hundred and thirteen in 1917 and one to
twenty-nine in 1921--fourteen to one raise!
In 1917 there were 12 officers of that bank to administer loans of
$399,078,000. In 1921 there were 40 officers of that bank to administer
loans of $146,526,938. In other words, you get 28 more officers to
administer a business shrunken down over sixty per cent! In other
words, you get over a two hundred per cent increase in officers to
administer a sixty per cent business shrinkage!
And now incidentally the pay of those 40 officers--administering a
sixty per cent shrunken business--amounted to more money than the
salaries of the President of the United States, the Vice President of
the United States, half the United States Senate and the Governors of
twelve American States besides! If that isn't bottomless bureaucratic
greed expressed mathematically, you express it yourself!
Look further into the depths of this golden pool of New York Federal
Reserve expense plunderbund. You are helping pay it and you are
entitled to scrutinize the salary items. Take 'em as they come.
J. Crane entered the bank at a yearly salary of $1,080 as manager
foreign department and now receives a yearly salary of $7,500, or an
increase of 594 per cent.
A.J. Lins, manager at large, entered the bank at a yearly salary of
$1,500 and now receives a yearly salary of $10,000 or an increase of
566 per cent.
John Raasch, manager supply department, entered the bank at a yearly
salary of $1,000 and now receives a yearly salary of $6,000, or an
increase of 500 per cent.
E.R. Kenzel, deputy governor, entered the bank at a yearly salary of
$4,200 and now receives a yearly salary of $22,000, or an increase of
423 per cent.
A.W. Gilbart, controller of administrations, entered the bank at a
yearly salary of $2,400 and now receives a yearly salary of $12,500, or
an increase of 420 per cent.
L.R. Rounds, controller of accounts, entered the bank at a yearly
salary of $2,400 and now receives a salary of $12,500, an increase of
420 per cent.
Chas. H. Coe, manager of the check department, entered the bank at a
yearly salary of $1,500 and now receives a yearly salary of $7,200, an
increase of 380 per cent.
W.B. Matteson entered the bank at a yearly salary of $2,400 and now
receives $10,000, an increase of 316 per cent.
J.D. Higgins, controller of cash, entered the bank at a yearly salary
of $3,000 and now receives a yearly salary of $12,000, an increase of
300 per cent.
S.S. Vansant, manager discount department, entered the bank at a
yearly salary of $1,500 and now receives a yearly salary of $5,000, an
increase of 233 per cent.
R.M. Gidney, controller at large, entered the bank at a yearly salary
of $4,000 and now receives a yearly salary of $15,000, or an increase
of 275 per cent.
I.W. Waters, manager personal service department, entered the bank at a
yearly salary of $2,250 and now receives a yearly salary of $7,200, or
an increase of 220 per cent.
James Rice, manager government bond department, entered the bank at a
yearly salary of $1,800 and now receives a yearly salary of $5,500, or
an increase of 205 per cent.
L.H. Hendricks entered the bank on a yearly salary of $6,000 and now
receives a yearly salary of $18,000, or an increase of 200 per cent.
Incidentally Benjamin Strong, the governor of the New York Federal
Reserve Bank, has had his salary increased from $30,000 per year to
$50,000 per year--more than six times the pay of a United States
Senator!
Ask any corporate manager, any practical banker, or any efficiency
expert if they permit, or if they know of any such stupendous salary
increases--increased and maintained in a time of general disaster and
enforced economies. If this isn't strutting bureaucracy running amuck
with public money, what is it?
Take now a look at the total expense account--which you are helping to
pay--of the Federal Reserve System for the year 1921. It amounted to
the stupendous sum of $36,066,065, or an average of $3,005,500 for each
one of the twelve regional satrapies! You can't measure it--because
there is nowhere on earth any other banking expense account by which to
measure it! Like an Andean peak it towers aloft in solitary splendor.
But you can look at some of the items. Here they are. The New York
Federal Reserve Bank heads the list of extravagance with an expense
account of $8,167,780, and the Minneapolis Federal Reserve Bank was the
most modest--and not any too modest at that--with an expense account
of $1,325,867. It cost you for bank officers' salaries $2,383,994, for
clerk hire $15,201,393, for special officers and watchmen $789,879 and
for "all other" $1,102,984. What that "all other" item of $1,102,984
really is, is deep buried in Federal Reserve archives. When you get
through with bank officers, bank clerks, special officers and watchmen,
you would think that included about all possible bank employees, but
Federal Reserve ingenuity slips over $1,102,984 under the cloak of "all
other!"
It cost you $7,750 for Federal Reserve Governors to "confer," $4,443
for Federal Reserve Agents to "confer" and $10,522 for the Federal
Advisory Council--whatever that is--to "confer." "Conferences"--in
bureaucracy--come high, don't they? And it cost you $168,556 to hold
directors' meetings with 173 out of 254 of them living in the same town
where the bank or its branch is located. Traveling expenses cost you
$357,962--some travelers these Federal Reserve tourists are!
These bureaucratic "expenses" of a parasitical system hooked on to
your banking system are stupendous, titanic, gigantic! They are
indefensible--and undefended too--from any possible standpoint of
efficiency, economy or necessity. Look them over in cold blood.
Look over the stupendous salary raises--both in amounts and in
percentages--in the New York Federal Reserve satrapy and compare
them with any private business on earth. Private stockholders--not
commandeered by law and not chained by act of Congress--would drive
out any such maladministration of extravagance. You know it.
Who is responsible--directly, morally and legally responsible--for
this orgy of Federal Reserve extravagance absolutely unequaled in
the history of the world or in the history of banking? Why, the
Federal Reserve Board at Washington is responsible. What makes them
responsible? Here is the exact language. Read it. "Any compensation
that may be provided by Boards of Directors of Federal Reserve
Banks for directors, officers or employees shall be subject to the
approval of the Federal Reserve Board." That's plain, isn't it? If
the Federal Reserve Board at Washington doesn't "approve" these huge
compensations, they can not be paid. It is the Federal Reserve Board at
Washington--and no other authority on earth--which is responsible for
the greatest orgy of expense ever strapped on the backs of staggering
business. It's their ukase, it's their decree, it's their order which
registers these titanic expenses--every penny of which is wrung from
American producers of wealth! And they are political appointees--not
elected, but appointed. The Federal Reserve Board at Washington really
wields a power greater than any sceptered monarch ever swayed. At their
nod or at their beck every Federal Reserve employee holds his job, for
if they don't "approve" his "compensation" he can't attach his lips
to the public teat with its golden flow of "compensation!" It's the
Federal Reserve Board at Washington--unsupervised and with legally
limitless power--which is responsible for this Federal Reserve expense
orgy.
CHAPTER XII
WHAT THE MONSTER DOES WITH ITS LOOT
THIS chapter is going to be like a tack--short but pointed. Federal
Reserve apologists--on and off the floor of Congress--when driven
into their last retreat always take their final stand and make their
last play in the "franchise tax" stronghold. Their assertion is
in effect that no matter what may be the abuses and sandbaggeries
and extravagances of this system the "big money" gets back to the
Government in the shape of the mythical "franchise tax." Here is where
you get the facts precisely as they are. What became of the lootage of
the Federal Reserve System for the year 1921 and what proportion of it
did your Government get?
The gross takings of the Federal Reserve System--extracted from
American production and industry--amounted to $122,864,605. That's
what it euphoniously calls its "earnings." First there came out
the gigantic expense account, of which you have already read, of
$36,066,065, leaving $86,798,540, which the monster calls its "current
net earnings." There is then added to this $360,856, which in previous
years had been deducted for "depreciation on U.S. Bonds," which didn't
finally "depreciate." There is also added $131,536 under an "all other"
blanket--much favored in the Federal Reserve System vocabulary. You
now have $87,290,932 "current net earnings." From this are deducted
$1,251,675 for "depreciation allowance on bank premises;" $2,861,500
for "reserve for possible losses" which probably won't occur; $400,000
"reserve for self insurance"--whatever that is; $49,295 "reserve for
depreciation on U.S. Bonds"--which probably won't depreciate now that
they have been sandbagged out of the hands of the original purchasers;
$641,237 sandbagged out under the favorite "all other" Federal Reserve
blanket. Here are $5,203,707 gone out in mere bookkeeping entries
with the real money which these entries represent still in Federal
Reserve custody. This leaves $82,087,225. From this is deducted a petty
$6,119,673 dividends paid on the capital commandeered. From this is
deducted $15,993,086 to be added to the already swollen Federal Reserve
Surplus Account. And there is left just $59,974,466 for the much touted
franchise tax.
If you have followed these figures you have seen that in order to
get a petty "franchise tax" of $59,974,466 into the hands of your
Government, it cost you just exactly $62,890,139 to collect it--the
precise difference between the Federal Reserve "earnings" and the
amount paid into the Government. Ask yourself, is a tax of $59,974,466,
which costs $62,896,139 to collect a "painless tax?" Is there any more
painful tax levied on American industry? That's what this ballyhooed
"franchise tax" amounted to in 1921 and all it amounted to--a tax of
$59,974,466, which cost $62,890,139 to collect!
CHAPTER XIII
THE CAMOUFLAGE OF THE MONSTER
DON'T check your brains at the portals of the Federal Reserve "Bunking"
System. That is what its touters and ballyhooers want you to do.
Federal Reserve bureaucrats and its beneficiaries and its hirelings and
an artfully subsidized press have really put the "prop" in propaganda.
They would have you believe--and literally hundreds of columns of
inspired writings have been used to make you believe--that the Federal
Reserve System is composed of twelve independent Federal Reserve Banks,
each one especially devoted to fostering industry in its own regional
territory.
Such is not the fact. The fact is that the Federal Reserve System is in
truth a huge Central Bank, managed, manipulated, directed and operated
from Washington by the Federal Reserve Board. There sits the spider and
there the web is woven--spreading all over the U.S.A.--in which are
enmeshed the victims.
You can read--if you want to waste your time--oodles of language about
how the Boards of Directors of these twelve Federal Reserve Banks are
seated in office and how part of them are elected by member banks
and how part of them are appointed by the Federal Reserve Board. You
can--if you want to waste more of your time--absorb messes of artfully
worded verbiage about the duties of the Boards of Directors. But
it's all "gammon and spinach," it's all artful camouflage. _The real
government of the Federal Reserve Banking System and of its twelve
Federal Reserve Banks and branches is in the absolute dictatorial
control of the Federal Reserve Board at Washington._ It is all
contained in one little joker of just thirty words. Here it is. Read
it. "_Any compensation that may be provided by Boards of Directors of
Federal Reserve Banks for directors, officers or employees shall be
subject to the approval of the Federal Reserve Board._" In every one
of the twelve Federal Banks every director, every Governor, every one
of the Deputy Governors, Federal Reserve Agents, Cashiers, Assistant
Cashiers, Controllers, Secretary, Counsel, Assistant Counsel, Clerks,
Stenographers, Messengers and Watchmen--in short, the whole horde of
Federal Reserve bureaucratic parasites--are subject to the approval of
the Federal Reserve Board at Washington because _their compensation
is subject to the approval of the Federal Reserve Board_. You know
that the hands that hold the money rule the enterprise. You know
that approval or disapproval of compensation is in effect "hiring
and firing." You know that "approval of compensation" is simply a
euphonious bit of language or smoke screen behind which really sits an
enthroned autocracy. No matter how many "conferences" are held between
Governors of Federal Reserve Banks, between Federal Reserve Agents and
with the Federal Advisory Council--"conferences" which during 1921 cost
you $22,716--the Federal Reserve Board at Washington is the supreme
and final dictator of the personnel and of the pay of its 10,313
employees and of its 231 officers. The Federal Reserve Board as to
the compensation of this horde--and hence as to its personnel--is an
absolute autocracy from whose order there is no appeal! It draws its
expense account from a practically bottomless treasury without let,
hindrance, supervision or veto! Kaiserdom and Czardom in their palmiest
days drew from no such lake of liquid gold as draws the Federal Reserve
Board at Washington. Set that down on your mental tablets and proceed
to the next camouflage station.
Here it is. Federal Reserve propaganda--with a practical limitless
expense account to further it--would have you believe that its favored
coterie of 231 officials are top notch bankers. Take a look at this
as it really is. The bankers whom you know and with whom you do your
business and to whom you entrust your money and from whom you borrow
your money have taken their own money and the money of their associates
and contributed the capital of their banks and put it at risk. They
wager their own money that they are good bankers. They have initiative
and confidence in their own ability and they prove that they have by
putting up their own money before they ask you to entrust yours to
their keeping. The officers of the Federal Reserve Banks don't put
up a copper cent, a plugged nickel, or a thin dime of capital. The
capital which they manipulate is commandeered by law for their use at
a petty six per cent rate. They may charge--and they have charged--as
high as eighty-seven per cent in one of their Shylockeries, but six
per cent is all that those who furnish the capital can claim. In 1919
the Federal Reserve System sandbagged out of other people's money a
profit of 110 per cent, in 1920 160 per cent and in 1921 79 per cent.
In 1919 its stockholders received 104 per cent less than their capital
really earned, in 1920 154 per cent less than their capital really
earned, and in 1921 73 per cent less than their capital really earned.
For the three years of 1919, 1920 and 1921 the average net profits of
the Federal Reserve System were 116 per cent and the real owners of
the capital were gypped legally--but none the less gypped--out of an
average of 110 per cent for each of those three years. Do you suppose
that officers of any bank not legally so buttressed could "get away"
with any such proposition? You know they couldn't--and hold their jobs.
No body of stockholders in the U.S.A., unless legally chained, would
endure a profit of 116 per cent and a dividend of but 6 per cent! And
no bank officers in the U.S.A., unless legally permitted, would attempt
to "put over" any such proposition. You know it. Peg that and proceed
to the next proposition.
What is the absolute, final and unquestionable test of a good banker,
a real top notcher in his business? It is the volume of deposits
which he attracts. That is the ultimate test of his ability and
integrity--the confidence he inspires in his institution as measured
by the volume of money entrusted to it! That volume of deposits must
be obtained, retained and increased in the face of the hottest kind of
hot competition. It is the absolute ability and integrity meter of a
successful banker. There is no other. Are these strutting, preening,
vociferating and vociferous Federal Reserve bankers measured--or
measurable--by that standard? Do they battle for their deposits and
by those deposits and the volume of them win their spurs? They do
not. Their mass of deposits--the largest on earth--are dumped into
their banks by law, conscripted into their coffers. They are not won
in competition. Federal Reserve bankers don't prove their ability by
competition--they smugly admit it. At this writing over $1,800,000,000
of deposits are in their coffers, conscripted there as were soldiers in
the World War by law!
And not only that, but that vast mass of deposits--the hugest on
earth--is handed to them free of interest charge. All other banks in
large American cities not only compete with each other for the deposits
of country banks, but pay interest on them at a minimum of 2 per cent
per annum. Federal Reserve bankers pay no interest--not even to the
Government. If a National Bank wants Government deposits it must put
up the unquestioned security to get them and then must pay interest on
them, but Federal Reserve bankers do neither! Not much competition for
Federal Reserve bankers there, is there? Peg that proposition and look
at the next one.
Here it is. The loans of a bank are the life of a bank. From the
interest upon them comes practically the sole earnings of a bank
and upon their repayment depends the solvency of a bank. The credit
department of a bank is its solar plexus. Loans must be successfully
made to men engaged in every variety of industry, some secured, some
unsecured and in amounts varying from a few hundreds of dollars to
hundreds of thousands of dollars. In May, 1922, the loans and discounts
of the National City Bank of New York amounted to $506,840,494--larger
by over $200,000,000 than all the "earning assets" of the Federal
Reserve Bank of New York. But there is a greater difference than even
in these figures and here it is. The bulk of the loans of the Federal
Reserve System are made to its member banks and require very slight, if
any, credit ability. The bulk of the people in the U.S.A. are loaning
money to banks--when they make their deposits--without interest and
unsecured, while the Federal Reserve System is engaged largely in
making loans to banks at rates up to 87 per cent and mostly secured at
that! In other words, what the bulk of the people of the U.S.A. do who
are bank depositors is to loan banks money for nothing or at a very low
rate of interest and unsecured, while the Federal Reserve System loans
the banks money often at altitudinous rates and often secured at that!
Or to put it another way, Federal Reserve bureaucracy draws fabulous
profits for doing practically for the banks what the people of the
U.S.A. are daily doing for nothing!
Sum up some of these differences between National and State Banks and
Federal Reserve parasitism.
National and State bankers put up their own capital and risk their own
money. Federal Reserve bankers commandeer their capital and risk not a
penny of their own.
National bankers make practically over a large term of years about
12 per cent net profits and Federal Reserve bankers make the most
fabulous profits ever registered on bank ledgers--during the three
years last past an average of 116 per cent.
National and State bankers earn their deposits in the hottest kind of
competition. Federal Reserve bankers conscript their deposits--without
a scintilla of effort.
National and State bankers pay interest to the Government for
Government deposits and give security besides. Federal Reserve bankers
pay no interest and give no security for Government deposits.
National and State bankers pay interest upon deposits of other banks.
Federal Reserve bankers do not pay any interest.
The capital of National Banks is commandeered into the capital of
Federal Reserve Banks at a petty six per cent and their reserve
deposits are conscripted at no per cent and then they are graciously
permitted to borrow their own money at altitudinous rates!
Which are really the better and more necessary bankers--the National
and State bankers or the Federal Reserve System of parasitical
camouflage? Which is the more necessary, the National and State bankers
close to the people, bearing the risk at petty profits or the Federal
Reserve bankers distant from the people bearing practically no risk
but reaping profits which would make Shylock frenzy with envy?
Isn't the Federal Reserve System as now constituted and as now
administered really a Federal Reserve "Bunking" System astutely
camouflaged, smoke screened by artful propaganda and by legalized
privilege and favoritism? Isn't it in truth and in fact a commandeering
and conscripting monster of finance, politically manipulated, with the
most extravagant salaries, buildings, expense accounts and the most
fabulous profits in all human history?
CHAPTER XIV
FINAL VOLLEY AT THE MONSTER
GET right down to brass tacks and ask yourself these questions:
No. 1. Do you want a Federal Reserve System managed and manipulated
from Washington by the Federal Reserve Board composed of political
appointees subject to no control, supervision nor oversight and in
effect a mammoth Central Bank?
No. 2. Do you want capital commandeered at 6 per cent by the use of
which are wrung out profits as high as 160 per cent?
No. 3. Do you want deposits--over $1,800,000,000--conscripted at no per
cent loaned out at interest charges as high as 87 per cent?
No. 4. Do you want to permit or allow the coercion or sandbaggery of
non-member State banks by the Federal Reserve System in its piratical
attempts to get its checks collected for nothing? The Supreme Court of
the United States frowns on such sandbaggery. Do you favor it?
No. 5. Do you want such titanic expense accounts and such altitudinous
salaries paid to favored bank officers?
No. 6. Do you want such an orgy of squandermania in the erection and
equipment of sumptuous palaces of pillage with its auditoriums and club
rooms and gymnasium and restaurant attachments?
No. 7. Do you want to witness, or be victimized by, Debacles of Drastic
Deflation with all the destructions, miseries and disasters in their
wake?
No. 8. Do you want such a Partiality of Pillage whereby parasitical
speculation is coddled and the necessary production of real wealth is
throttled?
No. 9. Do you want such a Croesus-like hoarding of gold--now over
$3,000,000,000--which menaces the world and which deprives you of even
the sight of your own money? And do you like a gold basis buried so
deep that you can't even see, nor get, a stiver of it?
No. 10. Do you want a system where bank credits and bank currency--the
very life blood of production and of commerce--can be arbitrarily
contracted at the mere whim of a coterie of financial despots?
No. 11. Do you want pawnbrokering interest rates charged and Shylockery
practiced under the aegis of your flag?
And if you do want any or all of these things, do you want the
financial destinies of your estate, of your children or of your
inheritors dependent on the whim--or mayhap on the interests--of what
is in reality earth's most autocratic Money-Bund?
Do you want the prosperity or adversity of the U.S.A.--the greatest
Nation under Jehovah's canopy--summoned at the beck and call of the
real Invisible Empire?
You know that when you hand over the financial government of a Nation
to a parasitical coterie of men you hand over to them the real
Government of a nation and, knowing that, do you want this autocratic
Federal Reserve System continued as it is? In other words, do you want
this parasitical Federal Reserve System--remote from the producers of
real wealth--purely a child of astutely lobbied law in the interests of
a few paltry "kings of finance" to really govern the United States by
governing its money?
Do you want the very height and apex of Special Privilege enthroned
and sceptered governing your Republic? Do you want to continue to be
a Republic in name only, while its real destinies--through a money
monopoly--are guided by coteries of Special Privilegists strutting
under your laws, housed in palaces of splendor paid for by you
and extracting fabulous salaries from your toil? Were Washington,
Jefferson, Jackson and Lincoln all wrong when they warned you against
special privileges and the encroachments of massed wealth? Do you
want unelected and politically appointed satraps parceling out and
administering your Nation in twelve satrapies? Do you want your
Government to continue its abdication of finance and to continue to be
but a mere puppet in the hands of an organized Money-Bund?
Oughtn't this Federal Reserve "Bunking" System--which has the U.S.A.
buncoed and chloroformed out of its financial independence--to
be curbed, humanized, restrained, limited and governed instead
of devouring the substance of its creators, the people? When the
misbranded "emancipator of credit" becomes the destroyer of credit,
oughtn't the destroyed to emancipate themselves? When an arrogant
creature overrides and oppresses its creators, oughtn't it to be
sternly regulated or destroyed? When you were befooled into creating
the Federal Reserve System, did you create a Frankenstein monster for
your own industrial destruction?
Don't you want this parasite curbed ere it throttles to death the
sturdy tree of American production about which it has entwined its
throttling tentacles? Really, don't you?
End
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