Federal Reserve System

“ 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! ”

“ The Federal Reserve System is a system of private banks, the creation of a banking aristocracy within an already existing autocracy, whereby a great proportion of banking independence was lost, and whereby it was made possible for speculative financiers to centralize great sums of money for their own purposes, beneficial or not. ”

“ The Federal Reserve System, instead of being responsible for the crash, was the one agency that saved the whole community, including the banks and brokers, from complete financial chaos by furnishing at the critical moment an abundance of money and credit at low rates. ”

“ It enables us to look to the future with confidence and to make plans far ahead, based on the belief that the Federal reserve system will exercise a steadying influence on credit conditions and thereby prevent tiny sudden or severe reactions from the period of prosperity which we are now enjoying. ”

“ The rediscounting privilege has been little availed of and the larger functions of the Federal Reserve System, such as influencing domestic rates and international gold movements through the development of a discount market and by dealing in foreign bills, appear remote from their spheres of activity. They feel that the system has few advantages to offer in return for the cost it entails upon them. ”

“ I know that many people are worrying about State banks not members of the Federal Reserve System. These banks can and will receive assistance from member banks and from the Reconstruction Finance Corporation. ”

“ The Federal Reserve Act had already proved its value so well that it was being taken as a matter of course, and people were forgetting that they had ever had to depend on a currency which ran for cover in every crisis and on a banking system where each bank was a source of weakness to its neighbors instead of strength. ”

“ It is not the purpose of this section to discriminate, in any manner, against State nonmember, and in favor of, national or member banks; but the purpose is to provide all banks with the same opportunity to obtain and enjoy the benefits of this section. No bank shall be discriminated against because its capital stock is less than the amount required for eligibility for admission into the Federal Reserve System. ”

“ 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 [Pg 22] checks for its benefit and advantage for nothing. ”

“ 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. ”

“ 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. ”

“ The Reserve System's activities are only designed to influence the prime, i.e., minimum, bank interest rate. There is no federal control of the maximum, although all banks, state and national, are subject to state usury laws where applicable. ”

“ 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 [Pg 47] doesn't brand such a system as outrageous Shylockery? ”

“ When the Federal Reserve steps in as a lender of last resort, which it's had to do repeatedly since this financial crisis began, it's providing an insurance policy underwritten by the American taxpayer. ”

“ First, key markets are not functioning because there is a lack of liquidity. So the Federal Reserve has injected hundreds of billions of dollars into the system. The Fed has joined with central banks around the world to coordinate a cut in interest rates, a step that should help free up credit. ”

“ But the actions you took along with those of a forceful and creative Federal Reserve have made the country stronger and have put us in a much better position to face the many challenges still ahead of us -- and they are many. ”

“ 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. ”

“ 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. ”

“ Other influences, such as changes in the public's currency holdings, may persist for longer periods of time.
Still other variations in bank reserves result solely from the mechanics of institutional arrangements among the Treasury, the Federal Reserve Banks, and the depository institutions. The Treasury, for example, keeps part of its operating cash balance on deposit with banks. ”

“ 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! ”

“ The reader should be mindful that deposits and reserves tend to expand simultaneously and that the Federal Reserve's control often is exerted through the market place as individual banks find it either cheaper or more expensive to obtain their required reserves, depending on the willingness of the Fed to support the current rate of credit and deposit expansion. ”