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.