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
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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.