What is the absolute, final and unquestionable test of a good banker, a real top notcher in his business? It is the volume of deposits which he attracts. That is the ultimate test of his ability and integrity—the confidence he inspires in his institution as measured by the volume of money entrusted to it! That volume of deposits must be obtained, retained and increased in the face of the hottest kind of hot competition. It is the absolute ability and integrity meter of a successful banker. There is no other. Are these strutting, preening, vociferating and vociferous Federal Reserve bankers measured—or measurable—by that standard? Do they battle for their deposits and by those deposits and the volume of them win their spurs? They do not. Their mass of deposits—the largest on earth—are dumped into their banks by law, conscripted into their coffers. They are not won in competition. Federal Reserve bankers don't prove their ability by competition—they smugly admit it. At this writing over $1,800,000,000 of deposits are in their coffers, conscripted there as were soldiers in the World War by law!
And not only that, but that vast mass of deposits—the hugest on earth—is handed to them free of interest charge. All other banks in large American cities not only compete with each other for the deposits of country banks, but pay interest on them at a minimum of 2 per cent per annum. Federal Reserve bankers pay no interest—not even to the Government. If a National Bank wants Government deposits it must put up the unquestioned security to get them and then must pay interest on them, but Federal Reserve bankers do neither! Not much competition for Federal Reserve bankers there, is there? Peg that proposition and look at the next one.
Here it is. The loans of a bank are the life of a bank. From the interest upon them comes practically the sole earnings of a bank and upon their repayment depends the solvency of a bank. The credit department of a bank is its solar plexus. Loans must be successfully made to men engaged in every variety of industry, some secured, some unsecured and in amounts varying from a few hundreds of dollars to hundreds of thousands of dollars. In May, 1922, the loans and discounts of the National City Bank of New York amountedto $506,840,494—larger by over $200,000,000 than all the "earning assets" of the Federal Reserve Bank of New York. But there is a greater difference than even in these figures and here it is. The bulk of the loans of the Federal Reserve System are made to its member banks and require very slight, if any, credit ability. The bulk of the people in the U.S.A. are loaning money to banks—when they make their deposits—without interest and unsecured, while the Federal Reserve System is engaged largely in making loans to banks at rates up to 87 per cent and mostly secured at that! In other words, what the bulk of the people of the U.S.A. do who are bank depositors is to loan banks money for nothing or at a very low rate of interest and unsecured, while the Federal Reserve System loans the banks money often at altitudinous rates and often secured at that! Or to put it another way, Federal Reserve bureaucracy draws fabulous profits for doing practically for the banks what the people of the U.S.A. are daily doing for nothing!
Sum up some of these differences between National and State Banks and Federal Reserve parasitism.
National and State bankers put up their own capital and risk their own money. Federal Reserve bankers commandeer their capital and risk not a penny of their own.
National bankers make practically over a large term of years about 12 per cent net profits andFederal Reserve bankers make the most fabulous profits ever registered on bank ledgers—during the three years last past an average of 116 per cent.
National and State bankers earn their deposits in the hottest kind of competition. Federal Reserve bankers conscript their deposits—without a scintilla of effort.
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!
Which are really the better and more necessary bankers—the National and State bankers or the Federal Reserve System of parasitical camouflage? Which is the more necessary, the National and State bankers close to the people, bearing the risk at petty profits or the Federal Reserve bankers distant from the people bearing practically norisk but reaping profits which would make Shylock frenzy with envy?
Isn't the Federal Reserve System as now constituted and as now administered really a Federal Reserve "Bunking" System astutely camouflaged, smoke screened by artful propaganda and by legalized privilege and favoritism? Isn't it in truth and in fact a commandeering and conscripting monster of finance, politically manipulated, with the most extravagant salaries, buildings, expense accounts and the most fabulous profits in all human history?
CHAPTER XIV
FINAL VOLLEY AT THE MONSTER
dropcapsET right down to brass tacks and ask yourself these questions:
No. 1. Do you want a Federal Reserve System managed and manipulated from Washington by the Federal Reserve Board composed of political appointees subject to no control, supervision nor oversight and in effect a mammoth Central Bank?
No. 2. Do you want capital commandeered at 6 per cent by the use of which are wrung out profits as high as 160 per cent?
No. 3. Do you want deposits—over $1,800,000,000—conscripted at no per cent loaned out at interest charges as high as 87 per cent?
No. 4. Do you want to permit or allow the coercion or sandbaggery of non-member State banks by the Federal Reserve System in its piratical attempts to get its checks collected for nothing? The Supreme Court of the United States frowns on such sandbaggery. Do you favor it?
No. 5. Do you want such titanic expense accounts and such altitudinous salaries paid to favored bank officers?
No. 6. Do you want such an orgy of squandermania in the erection and equipment of sumptuous palaces of pillage with its auditoriums and club rooms and gymnasium and restaurant attachments?
No. 7. Do you want to witness, or be victimized by, Debacles of Drastic Deflation with all the destructions, miseries and disasters in their wake?
No. 8. Do you want such a Partiality of Pillage whereby parasitical speculation is coddled and the necessary production of real wealth is throttled?
No. 9. Do you want such a Croesus-like hoarding of gold—now over $3,000,000,000—which menaces the world and which deprives you of even the sight of your own money? And do you like a gold basis buried so deep that you can't even see, nor get, a stiver of it?
No. 10. Do you want a system where bank credits and bank currency—the very life blood of production and of commerce—can be arbitrarily contracted at the mere whim of a coterie of financial despots?
No. 11. Do you want pawnbrokering interest rates charged and Shylockery practiced under the aegis of your flag?
And if you do want any or all of these things, do you want the financial destinies of your estate, of your children or of your inheritors dependent on the whim—or mayhap on the interests—of what is in reality earth's most autocratic Money-Bund?
Do you want the prosperity or adversity of the U.S.A.—the greatest Nation under Jehovah's canopy—summoned at the beck and call of the real Invisible Empire?
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?
Do you want the very height and apex of Special Privilege enthroned and sceptered governing your Republic? Do you want to continue to be a Republic in name only, while its real destinies—through a money monopoly—are guided by coteries of Special Privilegists strutting under your laws, housed in palaces of splendor paid for by you and extracting fabulous salaries from your toil? Were Washington, Jefferson, Jackson andLincoln all wrong when they warned you against special privileges and the encroachments of massed wealth? Do you want unelected and politically appointed satraps parceling out and administering your Nation in twelve satrapies? Do you want your Government to continue its abdication of finance and to continue to be but a mere puppet in the hands of an organized Money-Bund?
Oughtn't this Federal Reserve "Bunking" System—which has the U.S.A. buncoed and chloroformed out of its financial independence—to be curbed, humanized, restrained, limited and governed instead of devouring the substance of its creators, the people? When the misbranded "emancipator of credit" becomes the destroyer of credit, oughtn't the destroyed to emancipate themselves? When an arrogant creature overrides and oppresses its creators, oughtn't it to be sternly regulated or destroyed? When you were befooled into creating the Federal Reserve System, did you create a Frankenstein monster for your own industrial destruction?
Don't you want this parasite curbed ere it throttles to death the sturdy tree of American production about which it has entwined its throttling tentacles? Really, don't you?
End
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