Read Ebook: The Federal Reserve Monster by Campbell Wallace Editor Clark Sam H Editor

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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 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 2,000 in checks. Counting his salary, expenses, expressage of currency and the like, it must have cost it at least ,000. It could have had precisely the same service for one tenth of one per cent or just 2.

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 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."

THE LOOT OF THE MONSTER

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 1,297,338, as against 2,380,583 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 ,889,307, as against ,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 1,408,031, as against ,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--,889,307, or more than an average of ,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 ,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 ,234,000, the total net earnings 1,408,031, 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?

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 ,168,287 and into the super-surplus account ,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 2,036,367 upon a paid in capital of ,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 and the lion 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.

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 0,000,000 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 ,800,000,000 conscripted at no per cent interest as reserve deposits from the member banks. This capital and these deposits--almost ,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 0,000,000 of the gigantic sum. In other words, for an interest charge of practically ,000,000 a year the Federal Reserve System gets the use of practically ,000,000,000 or ,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 0,000 at three-tenths of one per cent interest! Then figure what it means to them to have the use of 20,000 times 0,000 at three-tenths of one per cent interest. Gives you an attack of vertigo, doesn't it?

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 ,000 and its surplus was ,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.

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.

Now take a look at the twelve regional pawnbrokeries for the year 1921 in the order of their pillagements. Here they are:

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 ,189,500, it vampired and blood-sucked out a net profit of ,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 ,066,065, or an average of ,005,083 for each regional pawnbrokery. The most reckless expense squandermaniac was the New York sandbaggery with an expense account of ,167,780, and the most economical was the Minneapolis satrapy with an expense account of ,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:

Upon this capital and from its gigantic deposits this super-vampire Federal Reserve System has in a few brief years--after paying stupendously extravagant expense accounts--piled up an accumulated pillage of 5,523,000. 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 ,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.

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 ,000,000 and had "bought paper" to a total of ,000,000--and that included some ,000,000 which it was loaning to other Federal Reserve Banks, principally in the North for speculative loans. Mark that down--,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 ,000,000 and had ,000,000 of bought paper--including ,000,000 taken from other Federal Reserve Banks. Mark that down--,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 ,000,000 and had ,000,000 of bought paper. Mark that down--5,000,000 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 ,000,000 and had ,000,000 of bought paper. Mark that down--,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 0,000,000! 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 0,000,000 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 ,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 4,000,000 from the Federal Reserve Bank in New York, or ,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.

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