Federal Reserve

“ 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? ”

“ 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! ”

“ 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. ”

“ 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 comman [Pg 39] deered 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? ”

“ 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. ”

“ 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! ”

“ 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! ”

“ 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 Board, with the approval of the Secretary of the Treasury, may require the Federal Reserve banks to take such action as may be necessary, in the judgment of the Board and of the Secretary of the Treasury, to prevent undue credit expansion. ”

“ 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. ”

“ 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. ”

“ Should a Federal reserve bank be dissolved or go into liquidation, any surplus remaining, after the payment of all debts, dividend requirements as hereinbefore provided, and the par value of the stock, shall be paid to and become the property of the United States and shall be similarly applied. ”

“ 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 [Pg 52] 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! ”

“ We've had better managed, more competitive businesses; more productive working people; the entrepreneurial spirit of small business; a Federal Reserve committed both to low inflation and to economic growth ”

“ 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. ”

“ What Are Bank Reserves? Currency held in bank vaults may be counted as legal reserves as well as deposits (reserve balances) at the Federal Reserve Banks. Both are equally acceptable in satisfaction of reserve requirements. A bank can always obtain reserve balances by sending currency to its Reserve Bank and can obtain currency by drawing on its reserve balance. Because either can be used to support a much larger volume of deposit liabilities of banks, currency in circulation and reserve balances together are often referred to as "high-powered money" or the "monetary base." ”

“ Past differences in policy between the Treasury and the Federal Reserve Board have helped to encourage inflation. Henceforth, I expect that their single purpose shall be to serve the whole Nation by policies designed to stabilize the economy and encourage the free play of our people's genius for individual initiative. ”

“ But if the reserve banks do not feel the pressure of excessive issues in the shape of accumulations of notes or some form of money in their own vaults, they may conceivably be able to invest advantageously all the funds in their possession, and, in that case, the rate of interest charged by the Federal Reserve Board will not furnish an adequate motive for the retirement of their issues. ”

“ By the Federal Reserve Act the supply of currency at the disposal of active business has been rendered elastic, taking its volume, not from a fixed body of investment securities, but from the liquid assets of daily trade; and these assets are assessed and accepted, not by distant groups of bankers in control of unavailable reserves, but by bankers at the many centers of local exchange who are in touch with local conditions everywhere. ”

“ But no Federal reserve bank shall transact any business except such as is incidental and necessarily preliminary to its organization until it has been authorized by the Comptroller of the Currency to commence business under the provisions of this Act.
Every Federal reserve bank shall be conducted under the supervision and control of a board of directors. ”

“ 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. ”

“ Every dollar of gold may become three dollars of Federal Bank credits and each dollar of this may in turn become the basis of eight dollars of credits for the Central Reserve cities, ten dollars for the smaller cities and fifteen dollars for the country banks, which works out to a practical average of ten dollars for all the banks in the Federal Reserve system. ”

“ 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. ”

“ Your Federal reserve banks which are intended to be the equivalent of the Central banks of other countries, such as the Bank of England, Bank of France, and the Reichsbank, should be prepared to rediscount approved bills at all times and to any extent.
The advantages to you of such a market would be the same [Pg 710] advantages that we possess, namely, liquid employment for short money; power to meet demands for money without disorganizing stock exchange prices; power to check overtrading at home, and finally, power to check a foreign drain of gold. ”

“ Whenever the capital stock of a Federal reserve bank is reduced, either on account of a reduction in capital stock of any member bank or of the liquidation or insolvency of such bank, the board of directors shall cause to be executed a certificate to the Comptroller of the Currency showing such reduction of capital stock and the amount repaid to such bank. ”

“ 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. ”

“ 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. ”

“ 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. ”