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| committer | nfenwick <nfenwick@pglaf.org> | 2025-02-07 11:39:05 -0800 |
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Clark -and Wallace Campbell</h1> -<p>This eBook is for the use of anyone anywhere in the United States -and most other parts of the world at no cost and with almost no -restrictions whatsoever. You may copy it, give it away or re-use it -under the terms of the Project Gutenberg License included with this -eBook or online at <a -href="http://www.gutenberg.org">www.gutenberg.org</a>. If you are not -located in the United States, you'll have to check the laws of the -country where you are located before using this ebook.</p> -<p>Title: The Federal Reserve Monster</p> -<p>Author: Sam H. Clark and Wallace Campbell</p> -<p>Release Date: July 14, 2017 [eBook #55099]</p> -<p>Language: English</p> -<p>Character set encoding: ISO-8859-1</p> -<p>***START OF THE PROJECT GUTENBERG EBOOK THE FEDERAL RESERVE MONSTER***</p> -<p> </p> -<h4>E-text prepared by MFR, Graeme Mackreth,<br /> - and the Online Distributed Proofreading Team<br /> - (<a href="http://www.pgdp.net">http://www.pgdp.net</a>)<br /> - from page images generously made available by<br /> - Internet Archive<br /> - (<a href="https://archive.org">https://archive.org</a>)</h4> -<p> </p> -<table border="0" style="background-color: #ccccff;margin: 0 auto;" cellpadding="10"> - <tr> - <td valign="top"> - Note: - </td> - <td> - Images of the original pages are available through - Internet Archive. See - <a href="https://archive.org/details/federalreservemo00clarrich"> - https://archive.org/details/federalreservemo00clarrich</a> - </td> - </tr> -</table> -<p> </p> -<hr class="pg" /> -<p> </p> -<p> </p> -<p> </p> - -<div class="hidehand"> -<p class="center"> - -<img src="images/cover.jpg" alt="cover" /> - -</p></div> - - - -<p class="ph2"> -<i>The</i></p> -<p class="ph1"><span class="smcap">Federal Reserve<br /> -Monster</span></p> - -<p class="ph4"><i>By</i></p> - -<p class="ph3"><i>Jim Jam Jems</i><br /> -<i>BISMARCK, N.D.</i></p> - -<p class="ph4" style="margin-top: 5em;">Price $2.00 in U.S.A.<br /> -Carriage Prepaid -</p> - - - - -<p class="ph3" style="margin-top: 5em;">COMPILED, EDITED AND PUBLISHED</p> -<p class="ph5">By</p> -<p class="ph4">Sam H. Clark and Wallace Campbell</p> -<p class="ph5">Of</p> -<p class="ph4">JIM JAM JEMS</p> -<p class="ph3">Bismarck, North Dakota</p> - -<p class="ph4">Copyright August 1922</p> - - - - - -<p class="ph2" style="margin-top: 5em;">EDITOR'S FOREWORD.</p> - - -<p><span class="figleft"><img src="images/illus01.jpg" alt="dropcaps" /></span> ITH "charity toward all and malice toward none" we indite this -volume of criticism of the Federal Reserve "Bunking" System as it is -"practiced" in America. We are not posing as a modern David, nor do -we underrate the size of the giant we have tackled herein by several -damsights. And by the same token we are not depending on a single stone -to deliver a knockout; on the contrary we are delivering a veritable -volley of rocks at the object of our criticism and we hope that every -chapter written here will raise bruises and welts on the back and belly -of the critter.</p> - -<p>We have no intention nor desire to kill. And we don't believe in -reform. When a thing needs reforming it needs an axe. But what we -are striving to do is to awaken public sentiment to the damnable -ramifications of the Federal Reserve Octopus in the hope that the -people will "come alive" and eventually force the Federal Reserve -System to be born anew.</p> - -<p>It is the abuse of the Federal Reserve System to which we object. Every -little while some smart Alec mounts the bema and roars about the great -good that the Federal Reserve System has accomplished. It is called the -Savior of Credit and Industry. But it is misbranded. There's a vast -difference between the picture on the tomato can and the contents of -the can.</p> - -<p>If you have ever lived in the West or North or in any part of the -country where wild ducks or partridges or prairie chickens nest, you -are familiar with the antics of the mother duck or prairie hen during -the hatching season. You have come suddenly upon the mother of a brood -along the roadside and as she hops along there is every indication that -the bird is wounded and she leads you away from her nest to a point -where she figures the young are safe and then up and away she goes. -These touters for the Federal Reserve System remind us of the mother -duck and the prairie hen. They flap along and distract your attention -from the nest which they are so beautifully feathering; they prate -about "saving" and "benefiting" and flap you along until you lose sight -of the brood of evils that they are really mothering.</p> - -<p>Our object in attacking the evils of the Federal Reserve System has -been to awaken sentiment—that is all. For the past two years we have -kept up a continuous bombardment against the iniquities of the Federal -Reserve System through the monthly issues of Jim Jam Jems. The demand -for back numbers and extra copies has been so great that we deemed it -advisable to collect all of these charges under one volume and thus -place the whole Truth about the Federal Reserve System before the -people. What we publish herein is fact, carefully compiled from the -System's own reports and from public records. We commend this volume to -all thinking, upstanding Americans who are ever ready to fight for a -square deal.</p> - - - - -<p class="ph2">ZINC! VINEGAR! VITRIOL!</p> - -<p class="center">JIM JAM JEMS</p> - - -<p>Please don't confound JIM JAM JEMS with other magazines that are aping -it in size and general appearance. It is not a joke book, nor a dream -book, nor a slab of fiction. It is just what it is advertised to be—A -Volley of Truth.</p> - -<p>You will find more hard, frozen-in facts and facts that you want to -know about matters of public interest in each issue of JIM JAM JEMS -than you will find in any other publication in America.</p> - -<p>You cannot afford to miss a single number. Fill in the coupon below and -send it to us with your check for three dollars and you will get JIM -JAM JEMS for a year delivered by mail to your office or home address.</p> - -<p>Don't wait! Join our army of regulars with the next number.</p> - -<hr class="tb" /> - -<p> -<span style="margin-left: 1em;">JIM JAM JEMS,</span><br /> -<span style="margin-left: 1em;">Bismarck, N. Dak.</span><br /> -<br /> -<span style="margin-left: 1em;">Gentlemen:</span><br /> -</p> - -<p>Here's my check for $3.00. Send me JIM JAM JEMS for a year at the -following address:</p> - -<p> -<span style="margin-left: 1em;">Name .......................................</span><br /> -<br /> -<span style="margin-left: 1em;">Street .....................................</span><br /> -<br /> -<span style="margin-left: 1em;">City ........................ State ........</span><br /> -</p> - - - - -<p class="ph2" style="margin-top: 5em;">CONTENTS</p> -<table summary="toc" width="60%"> -<tr> -<td>Chapter -</td> -<td> -</td> -<td align="right">Page -</td> -</tr> -<tr> -<td>I -</td> -<td><a href="#CHAPTER_I"><span class="smcap">Federal Reserve "Bunking."</span></a> -</td> -<td align="right"><a href="#Page_1">1</a> -</td> -</tr> -<tr> -<td>II -</td> -<td><a href="#CHAPTER_II"><span class="smcap">The Birth of the Federal Reserve System</span></a> -</td> -<td align="right"><a href="#Page_4">4</a> -</td> -</tr> -<tr> -<td>III -</td> -<td ><a href="#CHAPTER_III"><span class="smcap">The Framework of the Monster</span></a> -</td> -<td align="right"><a href="#Page_9">9</a> -</td> -</tr> -<tr> -<td>IV -</td> -<td><a href="#CHAPTER_IV"><span class="smcap">The Stuffing of the Leviathan</span></a> -</td> -<td align="right"><a href="#Page_16">16</a> -</td> -</tr> -<tr> -<td>V -</td> -<td><a href="#CHAPTER_V"><span class="smcap">Check Collection Banditry</span></a> -</td> -<td align="right"><a href="#Page_21">21</a> -</td> -</tr> -<tr> -<td>VI -</td> -<td><a href="#CHAPTER_VI"><span class="smcap">The Loot of the Monster</span></a> -</td> -<td align="right"><a href="#Page_34">34</a> -</td> -</tr> -<tr> -<td>VII -</td> -<td><a href="#CHAPTER_VII"><span class="smcap">How the Loot Is Gathered</span></a> -</td> -<td align="right"><a href="#Page_40">40</a> -</td> -</tr> -<tr> -<td>VIII -</td> -<td><a href="#CHAPTER_VIII"><span class="smcap">The Partiality of the Pillage</span>CHAPTER VIII</a> -</td> -<td align="right"><a href="#Page_50">50</a> -</td> -</tr> -<tr> -<td>IX -</td> -<td><a href="#CHAPTER_IX"><span class="smcap">The Tragedy of Drastic Deflation</span></a> -</td> -<td align="right"><a href="#Page_56">56</a> -</td> -</tr> -<tr> -<td>X -</td> -<td><a href="#CHAPTER_X"><span class="smcap">The Palaces of the Monster</span></a> -</td> -<td align="right"><a href="#Page_68">68</a> -</td> -</tr> -<tr> -<td>XI -</td> -<td><a href="#CHAPTER_XI"><span class="smcap">The Monster's Expenses</span></a> -</td> -<td align="right"><a href="#Page_75">75</a> -</td> -</tr> -<tr> -<td>XII -</td> -<td><a href="#CHAPTER_XII"><span class="smcap">What the Monster Does with Its Loot</span></a> -</td> -<td align="right"><a href="#Page_83">83</a> -</td> -</tr> -<tr> -<td>XIII -</td> -<td><a href="#CHAPTER_XIII"><span class="smcap">The Camouflage of the Monster</span></a> -</td> -<td align="right"><a href="#Page_86">86</a> -</td> -</tr> -<tr> -<td>XIV -</td> -<td><a href="#CHAPTER_XIV"><span class="smcap">Final Volley at the Monster</span></a> -</td> -<td align="right"><a href="#Page_95">95</a> -</td> -</tr> -</table> - - - - - -<hr class="chap" /> - - - - - - -<p class="ph2">Federal Reserve "Bunking"</p> - - -<p><span class="pagenum"><a name="Page_1" id="Page_1">[Pg 1]</a></span></p> - -<p class="ph2"><a name="CHAPTER_I" id="CHAPTER_I">CHAPTER I</a></p> - -<p class="center">THE FEDERAL RESERVE SYSTEM—WHAT IT REALLY IS</p> - - -<p><span class="figleft"><img src="images/illus02.jpg" alt="dropcaps" /></span>HE Federal Reserve System is the visible hand of the Invisible Empire -picking the pockets of the producers of real wealth. It is the most -leviathan parasite engrafted upon—and grafting on—production in the -world's history. It is an industrial vampire sucking industry's life -blood down its bottomless maw. Its greed is fathomless, its rule is -ruthless and its lust for power is insatiate.</p> - -<p>It is openly and avowedly run and managed in the interest of a -so-called "superior class." It has a cynical contempt for the -public—whom it ruthlessly plunders. It believes—and practices the -belief—that it was instituted for the promotion and protection of -superior privileges; that wealth is produced for its exploitation; -that production of values exists for its parasitical plunder;<span class="pagenum"><a name="Page_2" id="Page_2">[Pg 2]</a></span> that -Shylockery is a virtue and that the fruits of industry belong not to -its producers but to its despoilers.</p> - -<p>Property-owners, property-earners and property-producers are but -its puppets whom it plunders at will. By monopolizing and juggling -money—the mere symbol of wealth—it destroys the value of real wealth. -It has but one interest in the public whom it hypocritically professes -to serve and that interest is expressed in the query "How much will the -people stand?"</p> - -<p>There is nothing with which to compare it for it stands alone in the -world's history as the most gigantic plunderbund ever conceived in -predacity's womb. Czardom at its height and Kaiserdom at its zenith -never held a tithe of the real power held by the Federal Reserve -System. It is the perfected fruit and flower of financial high-bindery, -industrial plunderbund and applied Shylockery. Under the cloak and -mantle of the law it reaches forth its paws of predacity and pouches -filcheries which are simply stupendous.</p> - -<p>That is briefly what the much touted and saccharinely adulated Federal -Reserve System really is. Abraham Lincoln, the greatest human intellect -which ever functioned on this planet, prophetically drew its portrait -in these words: "It (the Civil War) has been indeed a trying hour for -the Republic; but I see in the near future a crisis approaching that -unnerves me and<span class="pagenum"><a name="Page_3" id="Page_3">[Pg 3]</a></span> causes me to tremble for the safety of my country. -As a result of the war, corporations have been enthroned and an era -of corruption in high places will follow and the money power of -the country will endeavor to prolong its reign by working upon the -prejudices of the people until all wealth is aggregated in a few hands, -and the Republic is destroyed. I feel at this moment more anxiety for -the safety of my country than ever before even in the midst of the war. -God grant that my suspicions may prove groundless."</p> - -<p>That is the true portrait, drawn by a master hand, of the Federal -Reserve System.</p> - -<p>In subsequent chapters you will see the birth of the monster, its -ruthless methods of plunder, its machinery of despoilment, its monopoly -of money and credit, its pawnbrokery and Shylockery and its huge mounds -of pillage.</p> - -<p>And in looking it over don't overlook the fact that you, you -yourself—whatever may be your part in American industry—are laying -tribute on the Federal Reserve altar of Mammon. You can't escape its -net of pillage. Amid its mounds of gold, currency and securities—the -hugest ever massed together on this planet—your contribution is there. -Your brain or your brawn, or both, have added to its lootage. If you -live and toil in the U.S.A.—in whatever capacity—your "mickle" adds -to the "muckle"—of its stored pillage.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_4" id="Page_4">[Pg 4]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_II" id="CHAPTER_II">CHAPTER II</a></p> - -<p class="center">THE BIRTH OF THE FEDERAL RESERVE SYSTEM</p> - - -<p><span class="figleft"><img src="images/illus03.jpg" alt="dropcaps" /></span>LICKER than an eel in a bucket of soap suds" is a fair description -of the accomplished financial accoucheurs who ushered this monster -into legal existence. You must understand that the real object was -to establish what was in truth and fact a Central Bank which would -dominate and control currency issues and bank credits in the United -States. To weld those chains upon American industry without appearing -to do it was the object in view. It could be done only by encasing -dirty hands of real pillage in the white gloves of a "Reserve System." -The Invisible Empire must remain invisible. Visibility would defeat its -object. The Money Masters had read history and knew that the American -people stood four square against a Central Bank. If their monster -of pillage were called a Central Bank they knew it would die in the -legislative womb.</p> - -<p><span class="pagenum"><a name="Page_5" id="Page_5">[Pg 5]</a></span></p> - -<p>Two such attempts had been made and had resulted disastrously thusly. -The first attempt was the First United States Bank. It was the child -of Alexander Hamilton's astute brain. It began business on December -12, 1791. It met violent opposition from its birth. It was branded as -a "Money Trust," struggled along with varying fortunes and finally -died on March 3, 1811, when its charter expired—with its renewal -vainly sought. American industry rebelled at the idea of a Central Bank -domination. It savored too much of that aristocracy and oligarchy whose -chains they had recently chiseled.</p> - -<p>The second attempt to engraft a Central Bank on American industry was -the Second Bank of the United States. It was chartered on April 10, -1816, and was a stormy petrel of finance. About it waged a running -battle. It was from birth to death the center of a conflict. Against -its domination American industry rebelled. Real producers of real -wealth constantly fought this parasite of finance. Andrew Jackson was -its bitter foe and it went out of existence during his administration -"unwept, unhonored and unsung" except in the doleful dirges of the -then Money Masters who mourned its demise. The Money Masters of those -two eras read the handwriting on the wall. American industry would -not endure a Central Bank and the Money Masters of 1914 read the -same symbols. History was<span class="pagenum"><a name="Page_6" id="Page_6">[Pg 6]</a></span> against them and the genius of American -institutions was against them. Their idea of a Central Bank had never -changed. It was the very core and center of their scheme to dominate -American industry. But to "get it across" or to "put it over" they must -re-christen the monster. Twice the people had violently repudiated the -Central Bank banditry. Hence in the fertile brainery of predacity was -born the idea of the Federal Reserve System—a camouflage, a deception -and a mere cloak of Pecksniffian hypocrisy. A clever nation-wide -propaganda was at once instituted with every "prop" put under it that -wily astuteness could suggest. A subsidized press ballyhooed, touted -and paeanized the proposed Federal Reserve System. It was hailed as -the Moses which was going to lead America into the Promised Land of -industrial freedom. It was paeanized as an absolutely new discovery in -finance—when in truth and in fact it was one of predacity's oldest -cards soiled in many a game. But it was varnished o'er and played again.</p> - -<p>There wasn't to be any "Central Bank" you understand. The sponsors -of this monster abhorred the idea of a "Central Bank." It was the -furthest possible from their pure thoughts of altruistic finance! They -were going to have twelve banks, each one established in a center of -industry and catering to and upbuilding the industries in its regional -zone. Each one was<span class="pagenum"><a name="Page_7" id="Page_7">[Pg 7]</a></span> going to be a separate and distinct corporation -absolutely disconnected from its eleven brethren. This idea was -advertised, adulated, and saccharinely paeanized until America was -lulled to sleep. For month after month this cone of chloroform was held -over American citizens until the anesthetic took effect. Then came -forth what was known as the Glass-Owen bill. The smoothness of its -head sponsors' name was symbolic. The ground had been prepared for its -reception. Propaganda seed had been diligently sown. Years of the most -astute scheming and plotting of the brainiest schemers who ever schemed -bore its fruit in the Glass-Owen bill. On rails greased by years of -propaganda it slid into the legislative hopper, came through in an oil -bath and went to President Wilson. Whether he was the deceived or the -deceiver none but himself knows. But he painted the Federal Reserve -System with his most magnificent verbal rainbow colors, prated of it -as "the emancipator of credit," signed it in the midst of a coterie -of sycophantic Pecksniffs and the pen whose strokes made it a law was -religiously preserved!</p> - -<p>Its real authors—who had spent years in weaving its phrases and scores -of thousands of dollars in propagandizing for its passage—winked, -smiled in their sleeves and prepared for pillage. The Federal Reserve -System was born with a caul—concealing its grin of greed—and -was brought<span class="pagenum"><a name="Page_8" id="Page_8">[Pg 8]</a></span> into being by the most astute coterie of legislative -accoucheurs who ever delivered a babe of legislation.</p> - -<p>Here and now read just two of the sample promises made by the Money -Masters at the birth of their monster. They told you that the Federal -Reserve System would "prevent unfair and undue constriction of credits -with its consequent paralyzing effect on business and on the productive -energies of the nation." They told you that "men will not be thrown -out of employment wholesale throughout the country by the fright of -financial and commercial panic, but finance and commerce will be -steady. Hundreds and thousands of men will not suddenly be thrown out -of employment during these national waves of depression nor undue -feverish buoyancy." Peg these specious promises in your brainery and -compare them later on with the actual performances of this monster -of depression with the Federal Reserve Board at Washington really -functioning as a Central Bank.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_9" id="Page_9">[Pg 9]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_III" id="CHAPTER_III">CHAPTER III</a></p> - -<p class="center">THE FRAMEWORK OF THE MONSTER</p> - - -<p><span class="figleft"><img src="images/illus04.jpg" alt="dropcaps" /></span>ERE'S the idea. Were you one of a coterie of multi-millionaires -lusting for the control of American industry and finance—exclusively -for pillage—you would, if necessary, join in providing any amount of -capital necessary to obtain the result. You could afford to provide -it for it would make you one of a coterie enabled to loot the richest -prizes on this planet. Any system which could at will open or shut -the valves of American credit, stage an orgy of "inflation" or stage -a debacle of "deflation," increase or decrease the money supply, make -the tide of employment flow to prosperity's height or ebb to despair's -depths, create a "bull" or a "bear" market at will—would justify the -investment of hundreds of millions or even billions of capital! Its -power would be practically boundless, its profits be fabulous and from -its coign of vantage it could coin the sweat of scores of millions of -toilers into its coffers of greed.</p> - -<p><span class="pagenum"><a name="Page_10" id="Page_10">[Pg 10]</a></span></p> - -<p>But if you could do this very same thing and obtain precisely the same -results and reap exactly the same harvest in power and pelf without -investing one thin dime or one plugged nickel you wouldn't put up the -money, would you? That is just exactly what these Federal Reserve -highbinders did and this is just exactly how they did it. There lay -fair to their hands the most successful banking system in the world's -annals—the National Banks.</p> - -<p>Here was the core and center of their pillage. Here was the capital -ready to their hands. They proceeded to levy upon, to appropriate and -to commandeer their capital from the National Banks of the United -States. They divided the U.S.A. into twelve financial satrapies or -dependencies or loot areas with centers of pillage thusly: New York, -Chicago, Atlanta, San Francisco, Boston, Minneapolis, Kansas City, -St. Louis, Cleveland, Philadelphia, Richmond, and Dallas. Upon every -National Bank in the U.S.A. there was levied a capital tribute of six -per cent of their capital and surplus account for subscribed capital -to the Federal Reserve Bank set over them. Of this amount one-half or -three per cent was required to be immediately paid in and the other -half was held subject to call if required.</p> - -<p>Take a look at this first step on the stairway of pillage. Without the -investment of one copper cent, of one plugged nickel or of one thin -dime<span class="pagenum"><a name="Page_11" id="Page_11">[Pg 11]</a></span> and by one stroke of the pen when this infamous law was passed -practically one hundred millions of capital was commandeered into the -coffers of Federal Reserve banditry. Without the risk of one penny of -their own money the Federal Reserve plunderbund seized in its talons -of greed the hugest banking capital in the U.S.A.—practically two -hundred millions of dollars with one-half of it immediately payable -and the other half subject to call! It was the most daring financial -high-bindery ever enacted on earth.</p> - -<p>Right here don't hock your brains—do your own thinking. Without any -option, without any vote of stockholders, without any action by its -officers every National Bank in the U.S.A. was compelled to buy stock -in the Federal Reserve Bank in its fiscal dependency or loot area in -which it was located. Protest was useless—just as useless as if they -stood under the guns of a Jesse James' or Younger Brothers' gang. It -was just "stand and deliver" and they delivered!</p> - -<p>At this time, in 1914, the banking business in the U.S.A., and -particularly National Banks, was functioning soundly and safely. It -was serving—not dominating—industry. It was making reasonable—not -Shylock—profits.</p> - -<p>Suppose the lustful eyes of the Federal Reserve lootage had turned -to the drygoods instead of to the banking business. They would have -compelled every drygoods merchant in the U.<span class="pagenum"><a name="Page_12" id="Page_12">[Pg 12]</a></span>S.A. to contribute six per -cent of his capital and surplus—with one-half immediately payable—to -set up a drygoods jobbing house in the center of a designated loot -area. They would have compelled every drygoods merchant to purchase -his merchandise from that jobbing house at their price. Isn't one -proposition as sane as the other? Of course it is. But there is -this difference. By commandeering capital for the drygoods business -licensed looters <i>could control only the drygoods business</i>. But -by commandeering capital for the banking business licensed looters -<i>could control all business</i>! That's the difference and that's all the -difference. They commandeered capital where it could <i>control not one -industry but all industries</i>. They didn't commandeer a leg or an arm -of industry but they did commandeer <i>the life blood of all industry</i> -and at one leap vaulted into a seat of power where their scepter's sway -really governed all American industry. That's what they really did.</p> - -<p>What price did Federal Reserve lootage pay for this commandeered -capital? It limited the dividends to be paid to these sandbagged -stockholders to six per cent per annum. No matter how fabulous might -be—and really have been—the profits of Federal Reserve pillage the -people who provided its life blood of capital must be content with a -paltry six per cent dividend! Over a long term of years the net profits -of the Nation<span class="pagenum"><a name="Page_13" id="Page_13">[Pg 13]</a></span>al Banks of the U.S.A. have averaged slightly over 12 per -cent per annum. But Federal Reserve lootage says: "We will pay you but -one half what your capital has been earning." Some gall? It was the -absolute acme of refrigerated nerve! No matter what Federal Reserve -Shylockery might make on this commandeered capital the people who -provided it—whose money it really was—could get but a paltry six per -cent.</p> - -<p>But one fact or series of facts is worth more than pages of language. -So right here and now look at the actual results for the year 1920. -Here is a list of Federal Reserve profits and pillage for that year:</p> - - -<table summary="sandbaggery" width="80%"> -<tr> -<td class="tdr">Location<a name="FNanchor_1_1" id="FNanchor_1_1"></a><a href="#Footnote_1_1" class="fnanchor">[1]</a> -</td> -<td class="tdr">Capital -</td> -<td>Per cent<br />on Capital -</td> -<td>Net Sandbaggery<br /> Per Cent -</td> -</tr> -<tr> -<td>New York -</td> -<td>$24,618,000 -</td> -<td><span style="margin-left: 1em;">217</span> -</td> -<td><span style="margin-left: 1em;">211</span> -</td> -</tr> -<tr> -<td>Chicago -</td> -<td><span style="margin-left: 0.5em;">13,213,000</span> -</td> -<td><span style="margin-left: 1em;">195</span> -</td> -<td><span style="margin-left: 1em;">189</span> -</td> -</tr> -<tr> -<td>Atlanta -</td> -<td><span style="margin-left: 1em;"> 3,759,000</span> -</td> -<td><span style="margin-left: 1em;">162</span> -</td> -<td><span style="margin-left: 1em;">156</span> -</td> -</tr> -<tr> -<td>San Francisco -</td> -<td><span style="margin-left: 1em;"> 6,412,000</span> -</td> -<td><span style="margin-left: 1em;">159</span> -</td> -<td><span style="margin-left: 1em;">153</span> -</td> -</tr> -<tr> -<td>Boston -</td> -<td><span style="margin-left: 1em;"> 7,454,000</span> -</td> -<td><span style="margin-left: 1em;">137</span> -</td> -<td><span style="margin-left: 1em;">131</span> -</td> -</tr> -<tr> -<td>Minneapolis -</td> -<td><span style="margin-left: 1em;"> 3,265,000</span> -</td> -<td><span style="margin-left: 1em;">131</span> -</td> -<td><span style="margin-left: 1em;">125</span> -</td> -</tr> -<tr> -<td>Kansas City -</td> -<td><span style="margin-left: 1em;"> 4,295,000</span> -</td> -<td><span style="margin-left: 1em;">129</span> -</td> -<td><span style="margin-left: 1em;">123</span> -</td> -</tr> -<tr> -<td>St. Louis -</td> -<td> <span style="margin-left: 1em;"> 4,229,000</span> -</td> -<td><span style="margin-left: 1em;">124</span> -</td> -<td><span style="margin-left: 1em;">118</span> -</td> -</tr> -<tr> -<td>Cleveland -</td> -<td><span style="margin-left: .5em;"> 10,070,000</span> -</td> -<td><span style="margin-left: 1em;">119</span> -</td> -<td><span style="margin-left: 1em;">113</span> -</td> -</tr> -<tr> -<td>Philadelphia -</td> -<td><span style="margin-left: 1em;"> 8,278,000</span> -</td> -<td><span style="margin-left: 1em;">116</span> -</td> -<td><span style="margin-left: 1em;">110</span> -</td> -</tr> -<tr> -<td>Richmond -</td> -<td><span style="margin-left: 1em;"> 4,884,000</span> -</td> -<td><span style="margin-left: 1em;">110</span> -</td> -<td><span style="margin-left: 1em;">104</span> -</td> -</tr> -<tr> -<td>Dallas -</td> -<td><span style="margin-left: 1em;"> 3,757,000</span> -</td> -<td><span style="margin-left: 1.5em;">89</span> -</td> -<td><span style="margin-left: 1.5em;">83</span> -</td> -</tr> -</table> - - -<p><span class="pagenum"><a name="Page_14" id="Page_14">[Pg 14]</a></span></p> -<p>Take all of your reading, take all of the history of banking or of -finance since banks were first founded and see if you can approximate -any such leviathan Shylockery. The stockholders in National Banks who -provided the capital for this orgy of profiteering were gyped out of -all the way from 211 per cent in the New York satrapy to 83 per cent -in the Dallas satrapy. For the year 1920 all over the U.S.A. on the -average Federal Reserve lootage took away from the real providers of -its capital—the stockholders in National Banks—better than 154 per -cent on the money they provided!</p> - -<p>These records are taken from the accounts of its own pillage rendered -by the Federal Reserve System itself.</p> - -<p>You could be quite some banker yourself, you could orate and strut -and preen and propagandize, you could swell out your pouter pigeon -breast at stage-managed banquets and be a prince of high finance with a -limitless expense account and with an altitudinous salary—if you could -commandeer your neighbor's money at 6 per cent and then sandbag out -from 211 to 83 per cent profit on it, couldn't you?</p> - -<p>Legal? Of course it's quasi-legal and that's the infamy of it. A -coterie of the most astute lobbyists who ever enchained a people's -industry log-rolled through a piece of legislation whereby they -commandeered for their capital the people's mon<span class="pagenum"><a name="Page_15" id="Page_15">[Pg 15]</a></span>ey at a petty 6 per -cent and in the year 1920 alone pouched on it a profit varying from 211 -to 83 per cent! That's the record and those are the facts—hidden and -concealed from you and draped in a mantle of silence. Federal Reserve -lootage, Federal Reserve propaganda, Federal Reserve publicity—all -paid for from your money—is too astute to "toot" anent this legalized -sandbaggery. Do you, the stockholders in the eight thousand and odd -National Banks in the U.S.A., know of any reason why you should provide -at 6 per cent the capital for Federal Reserve lootage on which it made -in one year alone from 217 to 89 per cent? That is, do you know of -any reason except your legal helplessness and the bottomless greed of -Federal Reserve sandbaggery? If the law—cleverly lobbied through your -Congress—didn't compel you to do it, would you do it? Would you of -your own free will provide capital at 6 per cent and be gypped out of -154 per cent? You know you wouldn't! Here is the core and center and -solar plexus of the whole Federal Reserve System—commandeer capital at -a petty six per cent and realize out of it profits that make Shylock -look like a philanthropist. Peg this in your brainery and look further.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_16" id="Page_16">[Pg 16]</a></span></p> - -<div class="footnotes"><h3>FOOTNOTES:</h3> - -<div class="footnote"> - -<p><a name="Footnote_1_1" id="Footnote_1_1"></a><a href="#FNanchor_1_1"><span class="label">[1]</span></a> The average paid in capital for 1920 was $94,234,000 and -total net earnings were $151,408,031. This is 160.7% profit and so -stated on pages 153 and 154 of Federal Reserve Bulletin of February, -1921. When the net average of the individual banks are footed and -averaged the average is 140.9%. This discrepancy is for Federal -Reservists—not us—to explain.</p></div></div> - - - - -<p class="ph2"><a name="CHAPTER_IV" id="CHAPTER_IV">CHAPTER IV</a></p> - -<p class="center">THE STUFFING OF THE LEVIATHAN</p> - - -<p><span class="figleft"><img src="images/illus05.jpg" alt="dropcaps" /></span>OU 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:</p> - - - - -<table summary="capital" width="80%"> -<tr> -<td>Boston -</td> -<td><span style="margin-left: 1em;">$7,935,500</span> -</td> -</tr> -<tr> -<td>New York -</td> -<td><span style="margin-left: 1em;">27,114,000</span> -</td> -</tr> -<tr> -<td>Philadelphia -</td> -<td><span style="margin-left: 1.5em;">8,736,500</span> -</td> -</tr> -<tr> -<td>Cleveland -</td> -<td><span style="margin-left: 1em;">11,134,000</span> -</td> -</tr> -<tr> -<td>Richmond -</td> -<td><span style="margin-left: 1.5em;">5,428,500</span> -</td> -</tr> -<tr> -<td><span class="pagenum"><a name="Page_17" id="Page_17">[Pg 17]</a></span>Atlanta -</td> -<td><span style="margin-left: 1.5em;">4,189,500</span> -</td> -</tr> -<tr> -<td>Chicago -</td> -<td><span style="margin-left: 1em;">14,307,000</span> -</td> -</tr> -<tr> -<td>St. Louis -</td> -<td><span style="margin-left: 1.5em;">4,603,000</span> -</td> -</tr> -<tr> -<td>Minneapolis -</td> -<td><span style="margin-left: 1.5em;">3,569,000</span> -</td> -</tr> -<tr> -<td>Kansas City -</td> -<td><span style="margin-left: 1.5em;">4,570,000</span> -</td> -</tr> -<tr> -<td>Dallas -</td> -<td><span style="margin-left: 1.5em;">4,203,000</span> -</td> -</tr> -<tr> -<td>San Francisco -</td> -<td><span style="margin-left: 1.5em;">7,374,500</span> -</td> -</tr> -<tr> -<td> -</td> -<td>—————— -</td> -</tr> -<tr> -<td>Total -</td> -<td>$103,165,000 -</td> -</tr> -</table> - -<p>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 writ<span class="pagenum"><a name="Page_18" id="Page_18">[Pg 18]</a></span>ing 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!</p> - -<p>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<span class="pagenum"><a name="Page_19" id="Page_19">[Pg 19]</a></span> 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.</p> - -<p>But at a few strokes of a pen Federal Reserve oligarchs reversed the -custom of generations and <i>conscripted this mass of deposits—the -largest on earth—into their coffers without interest</i>! 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<span class="pagenum"><a name="Page_20" id="Page_20">[Pg 20]</a></span> 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!</p> - -<p>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!</p> - -<p>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.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_21" id="Page_21">[Pg 21]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_V" id="CHAPTER_V">CHAPTER V</a></p> - -<p class="center">CHECK COLLECTION BANDITRY</p> - - -<p><span class="figleft"><img src="images/illus06.jpg" alt="dropcaps" /></span>OU have seen the birth of the monster; you have seen how it -conscripted its capital at a petty six per cent interest rate; you -have seen how it commandeered—at no interest rate—the mightiest mass -of deposits ever gathered together on earth and you have seen how it -did these things by its absolute control over the money and over the -destinies of the National Banks in the United States. It could and it -did and it does practically control their affairs.</p> - -<p>But it could not—except by intimidation, by oppression or by practical -banditry—control the State Banks of the United States. It could not -legislate them into its sheep pen for shearing, but it could attempt -to intimidate, bulldoze and banditize them. This it attempted to do in -this wise:</p> - -<p>One of the chief specialties of this Federal Reserve System of -applied banditry is to attempt to force every bank in the United -States—whether a member of its Shylockery or not—to collect<span class="pagenum"><a name="Page_22" id="Page_22">[Pg 22]</a></span> checks -for its benefit and advantage for nothing. In other words, where it -couldn't conscript nor commandeer—purely for its own sordid profit—it -proceeded to bulldoze.</p> - -<p>There are just two ways to collect money on checks, one by presenting -them at the counter of the bank on which they are drawn and getting the -cash and the other by sending them through the mail for remittance by -draft drawn on some large city depository. The latter method obtains in -99 per cent of the hundreds of millions of checks drawn. The bank upon -which the check is drawn makes a small charge of one tenth of one per -cent to compensate for clerk hire, postage, stationery and the like. It -is a perfectly legitimate charge in vogue and practiced for generations -in banking circles. But the Federal Reserve System, with its customary -greed, insists upon sandbagging this service for nothing. This arrogant -rule—purely for its own sordid profit—it could and did and does -enforce against its conscripted and commandeered National Banks. But -State Banks—not wearing the Federal Reserve yoke of bondage—were at -liberty to make the usual collection charge of one tenth of one per -cent. Thereupon the Federal Reserve System had a series of fits and -fell into them. From an enormous number of its banditries three typical -ones are selected for your observation—mere<span class="pagenum"><a name="Page_23" id="Page_23">[Pg 23]</a></span>ly straws showing whence -blow the most arrogant winds of oppression.</p> - -<p>First take a look at the Cones State Bank of Pierce, Nebraska. "I -don't want a smug lot of experts to sit down behind closed doors in -Washington and play Providence to me." That is what President Wilson -said—on page 60 of his book, "The New Freedom"—before he, himself, -was sitting tight "behind closed doors in Washington."</p> - -<p>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. First, read the subjoined affidavit -about "hard boiled and armed" Federal Reserve Bank agents and then our -comments on the whole proposition.</p> - -<blockquote> - -<p>"In the Superior Court of Fulton County, Georgia.</p> - -<p style="margin-left: 5%;"> -AMERICAN BANK & TRUST CO., et al.<br /> -<span style="margin-left:15%;"> vs.</span><br /> -FEDERAL RESERVE BANK, et al.</p> -<p> -THE STATE OF NEBRASKA } SS.<br /> -PIERCE COUNTY <span style="margin-left:10%;">}</span> -</p> - -<p>"Personally appeared before the undersigned attesting officer, Wood -Cones, who makes this affidavit to be used as evidence in the above -stated case and who being first duly sworn deposes and says:</p> - -<p>"That I am, and for many years have been, the president of the Cones -State Bank of Pierce, Nebraska,<span class="pagenum"><a name="Page_24" id="Page_24">[Pg 24]</a></span> and as such officer of said bank, -I was interviewed some time last September by a Mr. Jones, claiming -to represent the Omaha branch of the Federal Reserve Bank of Kansas -City, Missouri. I was urged by him to join the system. I refused and -was then asked to sign a card agreeing that my bank would remit all -items at par sent us by mail by the Federal Reserve Bank. I refused -to sign and was told that I would be compelled to at an early date, -as there was no limit to the power of the Federal Reserve Bank.</p> - -<p>"Early in October of the same year, the local express agent presented -quite a number of checks on our bank from the Federal Reserve Bank -and we gave him a draft for the full amount payable to the Federal -Reserve Bank. A short time after, another bunch of checks of the same -kind came in the same way but the express agent was instructed to -collect in cash. I offered him silver dollars for the checks and he -said he did not have time to count it and accepted an Omaha draft for -the face of the checks.</p> - -<p>"Following this, W.S. Lower, claiming to represent the Omaha branch, -came with some checks and demanded legal tender in payment. We -offered him a draft payable to the Federal Reserve Bank but refused -to pay him the currency without better identification than was -produced by him. After considerable loud talk and threat to protest -the checks he accepted a draft. Shortly after this Mr. Lower came -again, properly identified, and demanded cash on checks he had and we -refused payment on account of improper and insufficient endorsement. -He stormed around for a day and finally accepted a draft payable to -the Federal Reserve Bank.</p> - -<p>"November 14, 1919, a high powered auto containing four people, drove -into Pierce and stopped in front of the Bank, but the engine kept -running. Two men, W.<span class="pagenum"><a name="Page_25" id="Page_25">[Pg 25]</a></span> S. Lower and M.L. Bishop, got out of the car, -armed with revolvers and entered our bank. As agents of the Federal -Reserve Bank, they demanded the currency on checks drawn against the -Cones State Bank of Pierce, Nebraska, of the aggregate face value of -$31,900, some of which had been held for over three weeks. While one -of our Bank force was counting out the money (about $13,000 more than -we are legally required to carry in our vault) to Mr. Bishop, Mr. -Lower told us that Bishop was a United States marshal, hard boiled -and armed, and that he had cleaned up the State of Kansas and would -get us anyway, so we had better sign up the agreement and keep our -money.</p> - -<p>"Bishop said that a banker in Kansas who had the only bank in the -town, held out against parring, and that he told him they would start -a National Bank and drive him out of business, and that he personally -was instrumental in starting the National Bank and said he would -stick to it until he drove the Kansas bank out entirely.</p> - -<p>"Mr. Jones and a Mr. Davis came along later and claimed they were -peacemakers direct from the Federal Reserve Bank of Kansas City. Said -that Lower and Bishop were —— fools and had done entirely wrong -at Pierce and advised us to forget what Lower and Bishop had done -and sign up as the day was near when we would be forced. They took -a draft for the checks they had and departed saying that they had -enough of this —— business.</p> - -<p>"Subsequently checks were sent through the Express Company and -returned by the express agent for the reason as I said that he didn't -have time to count the money.</p> - -<p>"Along about the 27th day of December, 1919, a Mr. Farley came to -Pierce from Kansas City and asked<span class="pagenum"><a name="Page_26" id="Page_26">[Pg 26]</a></span> us to sign the paper relative to -parring checks or join the Federal Reserve System. We refused. He -then stated that he was instructed to stay in Pierce until he had -accomplished something. From that date until the day of making this -affidavit Mr. Farley has been here continuously and collects cash -every day on checks sent him by the Federal Reserve Bank.</p> - -<p>"On January 5, 1920, a Mr. J.G. Bryan came in from Kansas City and he -and Mr. Farley have been instrumental in trying to start a National -Bank at Pierce, devoting practically their entire time collecting -cash on checks sent by the Federal Reserve Bank upon banks in Pierce -and promoting a National Bank that they will compel the banks of -Pierce to join the system. Our customers report to us that these men -have told them that we are robbing them out of ten cents on every -hundred dollars of their money.</p> - -<p>"On or before the 14th day of January, 1920, Mr. Jones joined Mr. -Farley and Mr. Bryan and has acted as Notary Public, protesting -checks presented by the aforesaid agents of the Federal Reserve Bank -of Kansas City, notwithstanding such checks were endorsed on the -face 'not payable through the Federal Reserve Bank, their branches -or agents, nor Express Company nor Postoffice' and are continuing to -protest such checks when we refuse payment of them in their hands and -in one case have presented a check a second time and protested it -each time.</p> - -<p>"Every agent of the Federal Reserve Bank that has been here has -advised us in substance that they were spending the Government's -money like drunken sailors and will not stop at any expense to force -us to join the system.</p> - -<p>"One of my competitors told me that Mr. Davis told him in substance -that the Federal Reserve Board had a steam roller on the way from -Washington to<span class="pagenum"><a name="Page_27" id="Page_27">[Pg 27]</a></span> crush me personally and ruin my bank if I persisted -in refusal to comply with their demands. I subsequently called Mr. -Davis' attention to this report and he personally acknowledged to me -that he had made such a statement in substance.</p> - -<p style="margin-left:40%;"> -(Signed) "Wood Cones.<br /> -</p> - -<p>"Sworn to and subscribed before me this 10th day of February, 1920.</p> - -<p style="margin-left:40%;"> -(Signed) "Douglas Cones.<br /> -</p> - -<p>"Notary Public in and for Pierce County, Nebraska.</p> - -<p>"My commission expires September 25, 1925."</p></blockquote> - -<p>The Cones State Bank couldn't be bulldozed, banditized by gun play -nor coerced into the Federal Reserve slaughter pen. When the Federal -Reserve System grabbed Wood Cones it grabbed a hot wire which it -finally dropped, nursing its badly burnt paws!</p> - -<p>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.</p> - -<p>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. Noth<span class="pagenum"><a name="Page_28" id="Page_28">[Pg 28]</a></span>ing 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.</p> - -<p>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.</p> - -<p>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 -$50 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 oc<span class="pagenum"><a name="Page_29" id="Page_29">[Pg 29]</a></span>topus 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!</p> - -<p>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 $102,000 in checks. -Counting his salary, expenses, expressage of currency and the like, it -must have cost it at least $4,000. It could have had precisely the same -service for one tenth of one per cent or just $102.</p> - -<p>Then when that didn't work it sent out its fictitious "dishonor -notices" and bumped into a United States Court injunction!</p> - -<p>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.</p> - -<p>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<span class="pagenum"><a name="Page_30" id="Page_30">[Pg 30]</a></span> 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.</p> - -<blockquote> - -<p>"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 pay<span class="pagenum"><a name="Page_31" id="Page_31">[Pg 31]</a></span>ment 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.</p> - -<p>"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 (right) 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.</p> - -<p>"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<span class="pagenum"><a name="Page_32" id="Page_32">[Pg 32]</a></span> 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.</p> - -<p>"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.</p> - -<p>"Decree reversed."</p></blockquote> - -<p><span class="pagenum"><a name="Page_33" id="Page_33">[Pg 33]</a></span></p> - -<p>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."</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_34" id="Page_34">[Pg 34]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_VI" id="CHAPTER_VI">CHAPTER VI</a></p> - -<p class="center">THE LOOT OF THE MONSTER</p> - - -<p><span class="figleft"><img src="images/illus07.jpg" alt="dropcaps" /></span>ERE 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.</p> - -<p>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<span class="pagenum"><a name="Page_35" id="Page_35">[Pg 35]</a></span> 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.</p> - -<p>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?</p> - -<p>Here is a list of the twelve Federal Reserve<span class="pagenum"><a name="Page_36" id="Page_36">[Pg 36]</a></span> Banks in the precise -order of their pillage with the percentage of their takings to their -paid in capital for the year 1920!</p> - -<table summary="pillage" width="60%"> -<tr> -<td class="tdr">Location -</td> -<td class="tdr">Capital -</td> -<td>Per cent<br />on Capital -</td> -</tr> -<tr> -<td>New York -</td> -<td>$24,618,000 -</td> -<td><span style="margin-left: 1em;">217.4</span> -</td> -</tr> -<tr> -<td>Chicago -</td> -<td><span style="margin-left: .5em;">13,213,000</span> -</td> -<td><span style="margin-left: 1em;">195.6</span> -</td> -</tr> -<tr> -<td>Atlanta -</td> -<td> <span style="margin-left: 1em;">3,759,000</span> -</td> -<td><span style="margin-left: 1em;">162</span> -</td> -</tr> -<tr> -<td>San Francisco -</td> -<td><span style="margin-left: 1em;">6,412,000</span> -</td> -<td><span style="margin-left: 1em;">159.1</span> -</td> -</tr> -<tr> -<td>Boston -</td> -<td><span style="margin-left: 1em;">7,454,000</span> -</td> -<td><span style="margin-left: 1em;">137.3</span> -</td> -</tr> -<tr> -<td>Minneapolis -</td> -<td><span style="margin-left: 1em;">3,265,000</span> -</td> -<td><span style="margin-left: 1em;">131.5</span> -</td> -</tr> -<tr> -<td>Kansas City -</td> -<td><span style="margin-left: 1em;">4,295,000</span> -</td> -<td><span style="margin-left: 1em;">129.3</span> -</td> -</tr> -<tr> -<td>St. Louis -</td> -<td><span style="margin-left: 1em;">4,229,000</span> -</td> -<td><span style="margin-left: 1em;">124.3</span> -</td> -</tr> -<tr> -<td>Cleveland -</td> -<td><span style="margin-left: .5em;">10,070,000</span> -</td> -<td><span style="margin-left: 1em;">119</span> -</td> -</tr> -<tr> -<td>Philadelphia -</td> -<td><span style="margin-left: 1em;">8,278,000</span> -</td> -<td><span style="margin-left: 1em;">116.8</span> -</td> -</tr> -<tr> -<td>Richmond -</td> -<td><span style="margin-left: 1em;">4,884,000</span> -</td> -<td><span style="margin-left: 1em;">110.3</span> -</td> -</tr> -<tr> -<td>Dallas -</td> -<td><span style="margin-left: 1em;">3,757,000</span> -</td> -<td><span style="margin-left: 1.5em;">89.3</span> -</td> -</tr> -</table> - - -<p>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<span class="pagenum"><a name="Page_37" id="Page_37">[Pg 37]</a></span> 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?</p> - -<p>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 <i>one-thirtieth</i> of the amount! Ought the real -providers of the real capital, upon which stupendous profits were made, -to be fobbed off with <i>one-thirtieth</i> 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!</p> - -<p><span class="pagenum"><a name="Page_38" id="Page_38">[Pg 38]</a></span></p> - -<p>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.</p> - -<p>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!</p> - -<p>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.</p> - -<p>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 -comman<span class="pagenum"><a name="Page_39" id="Page_39">[Pg 39]</a></span>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? 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.</p> - -<p>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.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_40" id="Page_40">[Pg 40]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_VII" id="CHAPTER_VII">CHAPTER VII</a></p> - -<p class="center">HOW THE LOOT IS GATHERED</p> - - -<p><span class="figleft"><img src="images/illus08.jpg" alt="dropcaps" /></span>EASURE 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 $100,000,000 -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 $1,800,000,000 conscripted at no per cent interest as reserve -deposits from the member banks. 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!</p> - -<p><span class="pagenum"><a name="Page_41" id="Page_41">[Pg 41]</a></span></p> - -<p>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 $100,000 -at three-tenths of one per cent interest! Then figure what it means to -them to have the use of 20,000 times $100,000 at three-tenths of one -per cent interest. Gives you an attack of vertigo, doesn't it?</p> - -<p>Member banks and their stockholders and depositors furnish this titanic -amount of practically $2,000,000,000 at three-tenths of one per cent -interest and then member banks are graciously permitted to borrow from -the Federal Reserve System <i>their own money</i> at rates varying from -<i>six to eighty-seven and one-half per cent per annum</i>. Impossible, you -say? Not even organized Federal Reserve banditry, not even Amalgamated -Shylockery, would have the supernal gall to so sandbag productive -industry?</p> - -<p>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 Washing<span class="pagenum"><a name="Page_42" id="Page_42">[Pg 42]</a></span>ton 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.</p> - -<p>In a small town in Alabama was struggling a small National Bank. Its -capital was $25,000 and its surplus was $12,500. 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.</p> - -<p>This little National Bank in Alabama was in the grip of the Federal -Reserve Octopus. It had to move the cotton crop in its territory. -Farmers, planters, merchants—and in short, all industry in its -territory including its own salvation—depended on the moving and on -the marketing of the cotton crop. It was "root hog or die" and this -little bank rooted and was looted precisely in this wise: It had to -borrow from the Federal Reserve Super-Shylockery at Atlanta. It had no -other house of refuge. It had to borrow something over $100,000 from -the Federal Reserve<span class="pagenum"><a name="Page_43" id="Page_43">[Pg 43]</a></span> Bank at Atlanta and for the week's period ending -on July 31, 1920, it was charged and it paid as high as <i>thirty-one per -cent per annum interest</i>! Two months later when its loan reached as -high as $115,000 it was charged and it paid as high as <i>eighty-seven -and one-half per cent per annum interest</i> to this subter-human -super-Shylock. For the two weeks ending on September 30, 1920, it was -borrowing an average of $115,211. Two weeks' interest at six per cent -would have been $288, but the records show that this little bank paid -the Federal Reserve Pawnbrokery at Atlanta for interest on that amount -for that time $2,189—running all the way from six to <i>eighty-seven and -one-half per cent per annum</i>! The actual average time for this loan for -that two weeks' period was almost exactly at the rate of <i>forty-five -per cent per annum</i>, or at the rate of $51,884 per year for the use -of $115,211! In about nine months that loan of $115,211 at that rate -would have eaten up the capital and surplus of that little Alabama -National Bank. Was that banking or was it putrid pawnbrokery? Oughtn't -the Federal Reserve Bank at Atlanta to put the three ball sign of -pawnbrokery over its portals?</p> - -<p>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<span class="pagenum"><a name="Page_44" id="Page_44">[Pg 44]</a></span> "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!</p> - -<p>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.</p> - -<p>When a bank has to pay up to <i>eighty-seven and a half per cent</i> -interest you can imagine what its customers must pay it.</p> - -<p>And at the very time—during these very two weeks ending September -30, 1920—when this little Alabama National Bank right at the door of -real<span class="pagenum"><a name="Page_45" id="Page_45">[Pg 45]</a></span> production was being charged those Shylock rates for a paltry -loan, banks in New York were getting as high as $100,000,000 handed -out to them at from <i>five to seven per cent</i>. And yet you read about -the Federal Reserve System "equalizing interest rates," "emancipating -credit" and the like bunk! Why, it's enough to make Shylock and -Pecksniff rend their cerements and jump from their graves and have -another try at extortion and at applied hypocrisy. A difference of -<i>eighty per cent per annum</i> between New York City—where nothing but -parasitism is grown—and Alabama—where real wealth of real cotton -grows—is some difference, isn't it? And the eighty per cent difference -coddles parasitism and penalizes production. This isn't the only -sandbaggery of extortion perpetrated by the Federal Reserve oligarchy. -But it's a pretty good example, isn't it?</p> - -<p>Now take a look at the twelve regional pawnbrokeries for the year 1921 -in the order of their pillagements. Here they are:</p> -<table summary="pillagements" width="60%"> -<tr> -<td>Location -</td> -<td align="center">Paid in Capital -</td> -<td align="center"> Net Earnings -</td> -</tr> -<tr> -<td>Atlanta -</td> -<td align="center">$4,189,500 -</td> -<td align="center"> 131.18% -</td> -</tr> -<tr> -<td>Chicago -</td> -<td align="center">14,307,000 -</td> -<td align="center"> 101.31% -</td> -</tr> -<tr> -<td>New York -</td> -<td align="center">27,114,000 -</td> -<td align="center"> <span style="margin-left: 1em;">96.23%</span> -</td> -</tr> -<tr> -<td>Minneapolis -</td> -<td align="center"><span style="margin-left: .5em;">3,569,000</span> -</td> -<td align="center"> <span style="margin-left: 1em;">88.21%</span> -</td> -</tr> -<tr> -<td>Richmond -</td> -<td align="center"><span style="margin-left: .5em;">5,428,500</span> -</td> -<td align="center"> <span style="margin-left: 1em;">80.94%</span> -</td> -</tr> -<tr> -<td>Kansas City -</td> -<td align="center"><span style="margin-left: .5em;">4,570,500</span> -</td> -<td align="center"><span style="margin-left: 1em;"> 66.86%</span> -</td> -</tr> -<tr> -<td>San Francisco -</td> -<td align="center"><span style="margin-left: .5em;">7,374,500</span> -</td> -<td align="center"><span style="margin-left: 1em;"> 66.72%</span> -</td> -</tr> -<tr> -<td><span class="pagenum"><a name="Page_46" id="Page_46">[Pg 46]</a></span>St. Louis -</td> -<td align="center"><span style="margin-left: .5em;">4,603,000</span> -</td> -<td align="center"> <span style="margin-left: 1em;">64.13%</span> -</td> -</tr> -<tr> -<td>Philadelphia -</td> -<td align="center"><span style="margin-left: .5em;">8,736,500</span> -</td> -<td align="center"><span style="margin-left: 1em;"> 61.11%</span> -</td> -</tr> -<tr> -<td>Cleveland -</td> -<td align="center">11,134,000 -</td> -<td align="center"><span style="margin-left: 1em;"> 56.44%</span> -</td> -</tr> -<tr> -<td>Boston -</td> -<td align="center"><span style="margin-left: .5em;">7,935,500</span> -</td> -<td align="center"> <span style="margin-left: 1em;">53.94%</span> -</td> -</tr> -<tr> -<td>Dallas -</td> -<td align="center"><span style="margin-left: .5em;">4,203,000</span> -</td> -<td align="center"><span style="margin-left: 1em;"> 38.40%</span> -</td> -</tr> -<tr> -<td> -</td> -<td align="center">—————— -</td> -<td align="center"> ——— -</td> -</tr> -<tr> -<td>Total -</td> -<td>Capital $103,165,000 -</td> -<td> Average 79.56% -</td> -</tr> -</table> - - - -<p>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 $4,189,500, it vampired and blood-sucked out a -net profit of $5,496,000, 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!</p> - -<p>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<span class="pagenum"><a name="Page_47" id="Page_47">[Pg 47]</a></span> doesn't brand such a system as -outrageous Shylockery?</p> - -<p>But that isn't the worst of it. Before making these net earnings -this Federal Reserve System sandbagged out an "expense account" of -$36,066,065, or an average of $3,005,083 for each regional pawnbrokery. -The most reckless expense squandermaniac was the New York sandbaggery -with an expense account of $8,167,780, and the most economical was -the Minneapolis satrapy with an expense account of $1,325,867. 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?</p> - -<p>Here is a table showing the location, the capital and the piled up -pillagements of these twelve regional pawnbrokeries:</p> - -<table summary="pillagement" width="60%"> -<tr> -<td>Location -</td> -<td>Paid in Capital -</td> -<td>Surplus Percentage -</td> -</tr> -<tr> -<td>New York -</td> -<td>$27,114,000 -</td> -<td align="center">222 -</td> -</tr> -<tr> -<td>Atlanta -</td> -<td><span style="margin-left: 1em;">4,189,500</span> -</td> -<td align="center" ><span style="margin-left: .5em;">217.6</span> -</td> -</tr> -<tr> -<td>Kansas City -</td> -<td><span style="margin-left: 1em;">4,570,500</span> -</td> -<td align="center">211 -</td> -</tr> -<tr> -<td>Minneapolis -</td> -<td><span style="margin-left: 1em;">3,569,000</span> -</td> -<td align="center"><span style="margin-left: .5em;">209.2</span> -</td> -</tr> -<tr> -<td>Boston -</td> -<td><span style="margin-left: 1em;">7,935,500</span> -</td> -<td align="center"><span style="margin-left: .5em;">207.8</span> -</td> -</tr> -<tr> -<td>San Francisco -</td> -<td><span style="margin-left: 1em;">7,374,500</span> -</td> -<td align="center"><span style="margin-left: .5em;">206.2</span> -</td> -</tr> -<tr> -<td><span class="pagenum"><a name="Page_48" id="Page_48">[Pg 48]</a></span>Philadelphia -</td> -<td><span style="margin-left: 1em;">8,736,500</span> -</td> -<td align="center"><span style="margin-left: .5em;">205.4</span> -</td> -</tr> -<tr> -<td>St. Louis -</td> -<td><span style="margin-left: 1em;">4,603,000</span> -</td> -<td align="center">204 -</td> -</tr> -<tr> -<td>Cleveland -</td> -<td><span style="margin-left: .5em;">11,134,000</span> -</td> -<td align="center"><span style="margin-left: .5em;">203.2</span> -</td> -</tr> -<tr> -<td>Richmond -</td> -<td><span style="margin-left: 1em;">5,428,500</span> -</td> -<td align="center"><span style="margin-left: .5em;">203.2</span> -</td> -</tr> -<tr> -<td>Chicago -</td> -<td><span style="margin-left: .5em;">14,307,000</span> -</td> -<td align="center"><span style="margin-left: .5em;">202.8</span> -</td> -</tr> -<tr> -<td>Dallas -</td> -<td><span style="margin-left: 1em;">4,203,000</span> -</td> -<td align="center">176 -</td> -</tr> -<tr> -<td> -</td> -<td>—————— -</td> -<td align="center">——— -</td> -</tr> -<tr> -<td>Total -</td> -<td>$103,165,000 -</td> -<td><span style="margin-left: 1em;">Average 209</span> -</td> -</tr> -</table> - - - - - - -<p>Upon this capital (commandeered at a petty 6 per cent) and from its -gigantic deposits (conscripted at no per cent) this super-vampire -Federal Reserve System has in a few brief years—after paying -stupendously extravagant expense accounts—piled up an accumulated -pillage of $215,523,000. 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?</p> - -<p>And incidentally these mazuma monarchs have $42,231,240 invested in the -palatial emporiums where they ply their traffic and gild their pills of -pillage—to which reference will later be made.</p> - -<p>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<span class="pagenum"><a name="Page_49" id="Page_49">[Pg 49]</a></span> "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!</p> - -<p>The next chapter will tell you of the Partiality of the Pillage.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_50" id="Page_50">[Pg 50]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_VIII" id="CHAPTER_VIII">CHAPTER VIII</a></p> - -<p class="center">THE PARTIALITY OF THE PILLAGE</p> - - -<p><span class="figleft"><img src="images/illus09.jpg" alt="dropcaps" /></span>ERE 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.</p> - -<p>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 $88,000,000 -and had "bought paper" to a total of $16,000,000—and that included -some $10,000,000 which it was loaning to other Federal Reserve -Banks, principally in the North for speculative<span class="pagenum"><a name="Page_51" id="Page_51">[Pg 51]</a></span> loans. Mark that -down—$94,000,000 of loans covering that enormous area of production.</p> - -<p>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 $80,000,000 -and had $31,000,000 of bought paper—including $20,000,000 taken from -other Federal Reserve Banks. Mark that down—$91,000,000 of loans in -that area of production.</p> - -<p>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 $88,000,000 and had $17,000,000 of bought -paper. Mark that down—$105,000,000 of loans in that fertile area of -production.</p> - -<p>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 $57,000,000 and had $6,000,000 of bought paper. Mark -that down—$63,000,000 of loans in that vast area.</p> - -<p>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<span class="pagenum"><a name="Page_52" id="Page_52">[Pg 52]</a></span> 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 $100,000,000 to hurl into the New York maelstrom of speculation!</p> - -<p>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 $51,068,000—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.</p> - -<p>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<span class="pagenum"><a name="Page_53" id="Page_53">[Pg 53]</a></span> 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.</p> - -<p>At this very time—in the middle of November, 1920—one speculative -bank in New York borrowed $134,000,000 from the Federal Reserve Bank in -New York, or $20,000,000 more than the Federal Reserve Bank of Kansas -City was lending to the 1,091 member banks in the Tenth Federal Reserve -District.</p> - -<p>Another speculative bank in New York borrowed from the Federal Reserve -Bank in New York $40,000,000 more than the Federal Reserve Bank in -Minneapolis was lending to its 1,000 member banks in Minnesota, North -Dakota, South Dakota, Montana and part of Wisconsin.</p> - -<p><span class="pagenum"><a name="Page_54" id="Page_54">[Pg 54]</a></span></p> - -<p>Another speculative bank in New York borrowed from the New York Federal -Reserve Bank $30,000,000 more than the Federal Reserve Bank of Dallas -was lending all its member banks in all its huge territory.</p> - -<p>Another speculative bank in New York borrowed from the New York Federal -Reserve Bank $20,000,000 more than the Federal Reserve Bank of Richmond -was lending to all its member banks in the Fifth Federal Reserve -District.</p> - -<p>Massing these gigantic figures in another form, the fact is that at -the time four speculative banks in New York were borrowing from the -New York Federal Reserve Bank an average of $118,000,000 apiece—or -practically as much money as the Federal Reserve Banks of St. Louis, -Kansas City, Minneapolis, Dallas and Richmond were lending more than -4,000 member banks in 21 states comprising more than half the entire -area of the United States!</p> - -<p>If this isn't coddling parasitism and penalizing production, you find a -name for it!</p> - -<p>Millions by the hundreds for parasitical speculation, for the pounding -down of prices in "short" markets in a "bear" campaign waged against -real values and millions by the paltry tens only for the real producers -of real wealth! If these actual figures don't batter down the "prop" of -Federal Reserve propaganda about "furthering agricultural interests," -nothing will. "Furthering agricul<span class="pagenum"><a name="Page_55" id="Page_55">[Pg 55]</a></span>tural interests" with a bludgeon! -"Equalizing credits" with a meter of equality so stretched as to enwrap -parasitism! If these actual figures don't convict Federal Reserve -Oligarchy of the height of Pecksniffian hypocrisy it's convict-proof! -Look over—and don't overlook—these figures. You can't consider them -in cold blood without irresistibly concluding that Federal Reserve -Oligarchy pampers parasitism, penalizes production and bestrews its -gigantic resources by favoritism instead of by merit. It is obsessed -by a squandermaniac prodigality for speculation and by a niggardly -parsimony for real production of real wealth. It exalts the tokens of -wealth and the jugglers of it far, far above its real producers. It -reaches out almost limitless largess to the pinnacles of parasitism -while practically starving the real makers of real wealth on whose -shoulders parasitism gaily rides. It shovels out hundreds of millions -for speculation and serves with an eye-dropper tens of millions for -production. It's unfair, unjust, inequitable and Janus-faced. It -mumbles and mutters and chitters and chatters and propagandizes about -"equalizing credits" and "emancipating credit," while in truth and -in fact it is grossly discriminating in its credits and instead of -"emancipating" credit enchains it to the golden chariot of speculative -splendors! That's what it really does and that's the true tale of its -Partiality of Pillage.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_56" id="Page_56">[Pg 56]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_IX" id="CHAPTER_IX">CHAPTER IX</a></p> - -<p class="center">THE TRAGEDY OF DRASTIC DEFLATION</p> - - -<p><span class="figleft"><img src="images/illus10.jpg" alt="dropcaps" /></span>OUR money masters, the Federal Reserve Board at Washington and the -twelve tentacular Federal Reserve Banks in their regional satrapies, -staged in 1920 the greatest financial debacle in human history. -They were, and they are, as much your money masters, as was ever a -slave-holder the master of his human chattel. Your labor and the -produce of your labor—in whatever capacity you worked—were, and are -today, as completely under their control as was ever the labor and -the production of the labor of slavery before Lincoln's Emancipation -Proclamation chiseled chains. So long as you exist in the U.S.A. and -the Federal Reserve System exists, the lash of these money masters will -writhe over your back and you must cringe under its sting. Make no -mistake about that. No sceptered king nor bedizened kaiser ever wielded -a tithe of the power which rests in the cunning brains and in the -ruthless edicts of these money masters.</p> - -<p><span class="pagenum"><a name="Page_57" id="Page_57">[Pg 57]</a></span></p> - -<p>Here are the facts. Read first these quotations from their own lips and -from their own pens which prove that these Federal Reserve oligarchs -deliberately staged the greatest financial debacle in all human -history. Nothing in human history approaches it for cold-blooded, -wanton, ruthless slaughter of values.</p> - -<p>"Credit must be brought under effective control."</p> - -<p>"The Board (meaning the Federal Reserve Board) will not hesitate to use -every statutory power to regulate currency and credits."</p> - -<p>"Our present task therefore is to proceed with the deflation of credits -as rapidly and as systematically as possible."</p> - -<p>If for "deflation" you read "destruction" you get the real intent and -the real meaning of these ichor-veined assassinators of real values. -Don't let these word jugglers and these money jugglers confuse you with -their lacquered language. When they say "inflation" what they really -mean is increase of values and when they say "deflation" what they -really mean is destruction of values.</p> - -<p>The tragedy was staged in 1920—about fourteen months after the World -War was closed—but it didn't get going good and strong until the -summer and fall of 1920. After the summer had arrived, after grain and -cotton were in the ground, after cattle and sheep were on the ranges, -after merchants' stocks were on the shelves, after fac<span class="pagenum"><a name="Page_58" id="Page_58">[Pg 58]</a></span>tories had -run at full capacity and after all producers and merchandisers were -hopelessly committed and couldn't retrace their footsteps, the lash -fell. Or to change the figure the trap wasn't sprung until every foot -was within its iron ring.</p> - -<p>The first proof of a murder is the corpse and here are the corpses of -murdered values just as they were struck down by the Federal Reserve -bludgeon. Look at them.</p> -<table summary="corpses" width="60%"> -<tr> -<td class="tdr">1920 No. 3. -</td> -<td class="tdr">Chicago Corn -</td> -<td>New Orleans<br />Middling Cotton -</td> -</tr> -<tr> -<td>January -</td> -<td><span style="margin-left: 2em;">1.47</span> -</td> -<td><span style="margin-left: 2em;">.40</span> -</td> -</tr> -<tr> -<td>May -</td> -<td><span style="margin-left: 2em;">1.98</span> -</td> -<td><span style="margin-left: 2em;">.40</span> -</td> -</tr> -<tr> -<td>June -</td> -<td><span style="margin-left: 2em;">1.83</span> -</td> -<td><span style="margin-left: 2em;">.40</span> -</td> -</tr> -<tr> -<td>July -</td> -<td><span style="margin-left: 2em;">1.53</span> -</td> -<td><span style="margin-left: 2em;">.39</span> -</td> -</tr> -<tr> -<td>August -</td> -<td><span style="margin-left: 2em;">1.53</span> -</td> -<td><span style="margin-left: 2em;">.33</span> -</td> -</tr> -<tr> -<td>September -</td> -<td><span style="margin-left: 2em;">1.29</span> -</td> -<td><span style="margin-left: 2em;">.27</span> -</td> -</tr> -<tr> -<td>October -</td> -<td><span style="margin-left: 2.5em;">.87</span> -</td> -<td><span style="margin-left: 2em;">.20</span> -</td> -</tr> -<tr> -<td>November -</td> -<td><span style="margin-left: 2.5em;">.80</span> -</td> -<td><span style="margin-left: 2em;">.17</span> -</td> -</tr> -<tr> -<td>December -</td> -<td><span style="margin-left: 2.5em;">.73</span> -</td> -<td><span style="margin-left: 2em;">.14</span> -</td> -</tr> -<tr> -<td>1921 -</td> -<td> -</td> -<td> -</td> -</tr> -<tr> -<td>January -</td> -<td><span style="margin-left: 2.5em;">.65</span> -</td> -<td><span style="margin-left: 2em;">.14</span> -</td> -</tr> -<tr> -<td>February -</td> -<td><span style="margin-left: 2.5em;">.63</span> -</td> -<td><span style="margin-left: 2em;">.13</span> -</td> -</tr> -<tr> -<td>March -</td> -<td><span style="margin-left: 2.5em;">.61</span> -</td> -<td><span style="margin-left: 2em;">.11</span> -</td> -</tr> -<tr> -<td>April -</td> -<td><span style="margin-left: 2.5em;">.55</span> -</td> -<td><span style="margin-left: 2em;">.11</span> -</td> -</tr> -<tr> -<td>May -</td> -<td><span style="margin-left: 2.5em;">.60</span> -</td> -<td><span style="margin-left: 2em;">.11</span> -</td> -</tr> -<tr> -<td>June -</td> -<td><span style="margin-left: 2.5em;">.60</span> -</td> -<td><span style="margin-left: 2em;">.11</span> -</td> -</tr> -<tr> -<td>July -</td> -<td><span style="margin-left: 2.5em;">.60</span> -</td> -<td><span style="margin-left: 2em;">.11</span> -</td> -</tr> -<tr> -<td>August -</td> -<td><span style="margin-left: 2.5em;">.55</span> -</td> -<td><span style="margin-left: 2em;">.12</span> -</td> -</tr> -</table> - - - - - - -<p>Here you get from January, 1920, to August, 1921, when these value -assassinations culminated, a corn debacle of 92 cents a bushel and a -cot<span class="pagenum"><a name="Page_59" id="Page_59">[Pg 59]</a></span>ton debacle of 28 cents a pound. If you had known that this value -assassination was en route and had "gone short" 1,000,000 bushels of -corn you could have robbed the corn growers of this land of $920,000, -couldn't you? And some "high financiers" did that very thing. If you -had known that cotton was going to shrink at least 28 cents a pound and -had "gone short" 10,000 bales (500 pounds to the bale) you could have -robbed the cotton growers of this land of $1,400,000, couldn't you? And -some high financiers did.</p> - -<p>Take a look at some more value murders.</p> -<table summary="murders" width="60%"> -<tr> -<td class="tdr" align="left">1920 -</td> -<td class="tdr" align="center">Wheat No. 2 <br /> Red Winter<br /> Chicago -</td> -<td class="tdr">Wool<br /> Ohio Grades -</td> -</tr> -<tr> -<td>January -</td> -<td><span style="margin-left: 5em;">2.63</span> -</td> -<td><span style="margin-left: 2em;">1.23</span> -</td> -</tr> -<tr> -<td>May -</td> -<td><span style="margin-left: 5em;">2.97</span> -</td> -<td><span style="margin-left: 2em;">1.16</span> -</td> -</tr> -<tr> -<td>June -</td> -<td><span style="margin-left: 5em;">2.89</span> -</td> -<td><span style="margin-left: 2em;">1.00</span> -</td> -</tr> -<tr> -<td>July -</td> -<td><span style="margin-left: 5em;">2.80</span> -</td> -<td><span style="margin-left: 2.5em;">.90</span> -</td> -</tr> -<tr> -<td>August -</td> -<td><span style="margin-left: 5em;">2.47</span> -</td> -<td><span style="margin-left: 2.5em;">.87</span> -</td> -</tr> -<tr> -<td>September -</td> -<td><span style="margin-left: 5em;">2.40</span> -</td> -<td><span style="margin-left: 2.5em;">.83</span> -</td> -</tr> -<tr> -<td>October -</td> -<td><span style="margin-left: 5em;">2.20</span> -</td> -<td><span style="margin-left: 2.5em;">.72</span> -</td> -</tr> -<tr> -<td>November -</td> -<td><span style="margin-left: 5em;">2.05</span> -</td> -<td><span style="margin-left: 2.5em;">.69</span> -</td> -</tr> -<tr> -<td>December -</td> -<td><span style="margin-left: 5em;">2.01</span> -</td> -<td><span style="margin-left: 2.5em;">.54</span> -</td> -</tr> -<tr> -<td>1921 -</td> -<td> -</td> -<td> -</td> -</tr> -<tr> -<td>January -</td> -<td><span style="margin-left: 5em;">1.96</span> -</td> -<td><span style="margin-left: 2.5em;">.54</span> -</td> -</tr> -<tr> -<td>February -</td> -<td><span style="margin-left: 5em;">1.91</span> -</td> -<td><span style="margin-left: 2.5em;">.54</span> -</td> -</tr> -<tr> -<td>March -</td> -<td><span style="margin-left: 5em;">1.67</span> -</td> -<td><span style="margin-left: 2.5em;">.52</span> -</td> -</tr> -<tr> -<td>April -</td> -<td><span style="margin-left: 5em;">1.38</span> -</td> -<td><span style="margin-left: 2.5em;">.52</span> -</td> -</tr> -<tr> -<td>May -</td> -<td><span style="margin-left: 5em;">1.56</span> -</td> -<td><span style="margin-left: 2.5em;">.50</span> -</td> -</tr> -<tr> -<td>June -</td> -<td><span style="margin-left: 5em;">1.43</span> -</td> -<td><span style="margin-left: 2.5em;">.49</span> -</td> -</tr> -<tr> -<td>July -</td> -<td><span style="margin-left: 5em;">1.22</span> -</td> -<td><span style="margin-left: 2.5em;">.49</span> -</td> -</tr> -<tr> -<td>August -</td> -<td><span style="margin-left: 5em;">1.23</span> -</td> -<td><span style="margin-left: 2.5em;">.49</span> -</td> -</tr> -</table> - - - - - - -<p><span class="pagenum"><a name="Page_60" id="Page_60">[Pg 60]</a></span></p> - -<p>A destruction of $1.40 a bushel on wheat and of 74 cents a pound on -wool ought to satisfy the most murderous destructionist of values, -oughtn't it? You can make your own computations as to the millions -coteries of "bears" could make—and doubtless did make—out of these -value assassinations.</p> - -<p>Have some more views of values on the toboggan.</p> - -<table summary="toboggan" width="60%"> -<tr> -<td>1920 -</td> -<td>Steers at Chicago -</td> -<td>Penn. Crude Oil -</td> -</tr> -<tr> -<td>January -</td> -<td><span style="margin-left: 3em;">15.93</span> -</td> -<td><span style="margin-left: 2em;">5.06</span> -</td> -</tr> -<tr> -<td>May -</td> -<td><span style="margin-left: 3em;">12.60</span> -</td> -<td><span style="margin-left: 2em;">6.10</span> -</td> -</tr> -<tr> -<td>June -</td> -<td><span style="margin-left: 3em;">15.03</span> -</td> -<td><span style="margin-left: 2em;">6.10</span> -</td> -</tr> -<tr> -<td>July -</td> -<td><span style="margin-left: 3em;">15.38</span> -</td> -<td><span style="margin-left: 2em;">6.10</span> -</td> -</tr> -<tr> -<td>August -</td> -<td><span style="margin-left: 3em;">15.35</span> -</td> -<td><span style="margin-left: 2em;">6.10</span> -</td> -</tr> -<tr> -<td>September -</td> -<td><span style="margin-left: 3em;">15.25</span> -</td> -<td><span style="margin-left: 2em;">6.10</span> -</td> -</tr> -<tr> -<td>October -</td> -<td><span style="margin-left: 3em;">14.68</span> -</td> -<td><span style="margin-left: 2em;">6.10</span> -</td> -</tr> -<tr> -<td>November -</td> -<td><span style="margin-left: 3em;">14.57</span> -</td> -<td><span style="margin-left: 2em;">6.10</span> -</td> -</tr> -<tr> -<td>December -</td> -<td><span style="margin-left: 3em;">12.09</span> -</td> -<td><span style="margin-left: 2em;">6.10</span> -</td> -</tr> -<tr> -<td>1921 -</td> -<td> -</td> -<td> -</td> -</tr> -<tr> -<td>January -</td> -<td><span style="margin-left: 3.5em;">9.84</span> -</td> -<td><span style="margin-left: 2em;">5.79</span> -</td> -</tr> -<tr> -<td>February -</td> -<td><span style="margin-left: 3.5em;">9.31</span> -</td> -<td><span style="margin-left: 2em;">4.18</span> -</td> -</tr> -<tr> -<td>March -</td> -<td><span style="margin-left: 3.5em;">9.56</span> -</td> -<td><span style="margin-left: 2em;">3.00</span> -</td> -</tr> -<tr> -<td>April -</td> -<td><span style="margin-left: 3.5em;">8.71</span> -</td> -<td><span style="margin-left: 2em;">3.18</span> -</td> -</tr> -<tr> -<td>May -</td> -<td><span style="margin-left: 3.5em;">8.42</span> -</td> -<td><span style="margin-left: 2em;">3.35</span> -</td> -</tr> -<tr> -<td>June -</td> -<td><span style="margin-left: 3.5em;">8.09</span> -</td> -<td><span style="margin-left: 2em;">2.65</span> -</td> -</tr> -<tr> -<td>July -</td> -<td><span style="margin-left: 3.5em;">8.40</span> -</td> -<td><span style="margin-left: 2em;">2.25</span> -</td> -</tr> -<tr> -<td>August -</td> -<td><span style="margin-left: 3.5em;">8.77</span> -</td> -<td><span style="margin-left: 2em;">2.25</span> -</td> -</tr> -</table> - - -<p>When you grease the toboggan with $2.81 a barrel on oil and $7.16 a -hundred on steers you can slide a good many millions of dollars into -the<span class="pagenum"><a name="Page_61" id="Page_61">[Pg 61]</a></span> maws of foresighted "short sellers," can't you?</p> - -<p>This panorama of value murders could be continued for pages of tables. -They all tell the same story. Granulated sugar dropped in the same time -from .15 cents a pound to .05 cents a pound; copper ingots from .19 -cents a pound to .11 cents a pound; cotton yarn from 72 cents a pound -to 25 cents a pound; pig iron from $37.75 per ton to $18.20 per ton; -hides from 40 cents a pound to 14 cents a pound and so on down the line.</p> - -<p>These are the corpses strewn all along America's highways of -production. What was the bludgeon which hit all these commodities on -the head and drove them into the pit of loss? It was the persistent, -wanton, ruthless and cold-blooded calling of loans and refusal of bank -credits and contraction of currency by Federal Reserve oligarchy. They -said they'd do it and they did it—aplenty. Here is the bludgeon, look -at it.</p> - -<p>Their total of all loans and discounts including "bought paper" in - -all of the twelve Federal Reserve Shylockeries stood around from -$2,700,000,000 to $3,000,000,000 from January to October, 1920, when -the bludgeon pounded hard. Here is the bludgeon. Look at it in action.</p> - -<table summary="bludgeon" width="60%"> -<tr> -<td>1920 -</td> -<td> -</td> -</tr> -<tr> -<td>October -</td> -<td>$3,099,672,000 -</td> -</tr> -<tr> -<td>November -</td> -<td><span style="margin-left: .5em;">2,983,103,000</span> -</td> -</tr> -<tr> -<td>December -</td> -<td><span style="margin-left: .5em;">2,974,836,000</span> -</td> -</tr> -<tr> -<td>1921<span class="pagenum"><a name="Page_62" id="Page_62">[Pg 62]</a></span> -</td> -<td> -</td> -</tr> -<tr> -<td>January -</td> -<td><span style="margin-left: .5em;">2,622,174,000</span> -</td> -</tr> -<tr> -<td>February -</td> -<td><span style="margin-left: .5em;">2,500,013,000</span> -</td> -</tr> -<tr> -<td>March -</td> -<td><span style="margin-left: .5em;">2,356,160,000</span> -</td> -</tr> -<tr> -<td>April -</td> -<td><span style="margin-left: .5em;">2,180,178,000</span> -</td> -</tr> -<tr> -<td>May -</td> -<td><span style="margin-left: .5em;">1,995,051,000</span> -</td> -</tr> -<tr> -<td>June -</td> -<td><span style="margin-left: .5em;">1,782,951,000</span> -</td> -</tr> -<tr> -<td>July -</td> -<td><span style="margin-left: .5em;">1,661,036,000</span> -</td> -</tr> -<tr> -<td>August -</td> -<td><span style="margin-left: .5em;">1,527,255,000</span> -</td> -</tr> -</table> - - -<p>And from May 28, 1920, to January 25, 1922—when the slaughtered -were piled the highest—the twelve Federal Reserve Shylockeries -hammered and battered down their bank credits in the leviathan sum -of $2,005,149,000, or from $2,938,031,000 to $932,000,000! And -incidentally the circulation of Federal Reserve notes contracted in the -same period by the stupendous sum of $923,020,000! So that from May 28, -1920, to January 25, 1922, the Federal Reserve oligarchy—at their will -or at their whim or for hidden purposes—contracted bank credits and -currency by the titanic total of $2,928,169,000, almost $3,000,000,000, -almost 3,000 million dollars. That was the pile driver battering your -values down into the mire of loss.</p> - -<p>Take now a look at the financial corpses so slaughtered. Here they are. -Look 'em over and don't overlook the hands that killed them.</p> - -<p>In 1921 there were 19,625 business failures as compared with 6,451 -in 1919, or an increase of 13,174—more than three for one. And the -lia<span class="pagenum"><a name="Page_63" id="Page_63">[Pg 63]</a></span>bilities reached the stupendous total of $627,401,000, an increase -of $514,000,000 over 1919, more than five for one. In the so-called -panic year of 1907, the high tide of business failures, liabilities -were only $197,000,000, as against $627,000,000 in 1921. Why, if 1907 -was a "panic year," 1921 was a pandemic year!</p> - -<p>And here is another destruction meter, absolutely infallible—the -suicides. In the first six months of 1921 there were 4,527 men -suicides, as against 1,810 for the same period in 1920; 1,982 women as -against 961; 214 boys as against 88 and 293 girls as against 137—7,016 -suicides for the first six months of 1921 as against 2,996 for the -same period of 1920. The enormous increase in men suicides—over two -and one-half for one—tells its own story. They came from all classes, -bankers, merchants, farmers, laborers and professional men. None know -how many of this enormous increase, the largest since statistics have -been kept, were driven to desperation and to death from hunger, from -unemployment, from the loss of life's toil or from the failure of -enterprises in which they had spent their lives. No statistics can -summarize human emotions, but they can tell and they do tell of the -greatest holocaust of suicides ever ravaging this land—undoubtedly -due to industrial tragedies staged by the cold blooded butchery of -production. This much is certain. Never before in a given time<span class="pagenum"><a name="Page_64" id="Page_64">[Pg 64]</a></span> in this -land has there been such a holocaust of failures, of suicides and of -unemployment. Never before in this land were such sacrifices laid on -the twin altars of Moloch and of Mammon. And they precisely correspond -in time with the Tragedy of Drastic Deflation!</p> - -<p>During all this time and particularly beginning with the late summer -and early fall of 1920, individuals, associations, committees -and organizations representing farmers, planters, cattlemen, -manufacturers, bankers and merchants—in short, representatives of -all industries—were entreating and beseeching Governor Harding of -the Federal Reserve Board and his associates to be more mild and more -lenient and more reasonable in their drastic tragedy of destruction. -They might as well have besought a cyclone or entreated a tornado or -prayed to an earthquake. Cold-bloodedly, relentlessly and wantonly -loans were called, extensions were refused, renewals were tabooed and -bank credit put on the chopping block. The very people whose toil and -whose labor and whose real wealth were building the magnificent palaces -wherein these Shylockeries were housed and were paying the exorbitant -salaries of these money despots were being ruined by their servants! -The Federal Reserve System at that very time had a loaning ability -of over $2,000,000,000 more than it then used and not only wouldn't -use it, but contracted<span class="pagenum"><a name="Page_65" id="Page_65">[Pg 65]</a></span> its loans by $2,005,149,000 and currency by -over $932,000,000. Instead of aiding production, it throttled it. And -instead of aiding the producers of commodities to carry them it forced -producers to market them at most ruinous losses! Instead of dropping -the curtain on this Tragedy of Drastic Destruction, it ran it to its -close! It staged the greatest debacle of blasted credit, number of -failures, magnitude of liabilities, suicides and unemployment ever -witnessed in this land. It did it deliberately, ruthlessly and as per -program too.</p> - -<p>Go back over these figures, all taken from official records—all -undenied and undeniable—and ask yourself if ever before in human -history the industries and credit of a successful nation and -successful in the greatest War ever waged, too, were so butchered? -These figures indict and convict the Federal Reserve System, as it -has been maladministered, as the arch betrayer of a people's trust. -It indicts and convicts them as juggling with the symbols of value -to the destruction of real values. No sane man can read this record, -frozen into Government statistics, and defend the oligarchs who made -it. It never was "deflation." That is just a sonorous euphemism to -disguise sandbaggery. It was destruction to scores of thousands and to -hundreds of thousands of the real producers of real wealth. Billions -of dollars of real values were annihilated, not by the trend<span class="pagenum"><a name="Page_66" id="Page_66">[Pg 66]</a></span> of the -markets, but by artificial "bear" markets artificially created by the -throttling of credit. You can't withdraw literally billions of credit -and currency—almost three billions of them—the very life-blood of -commerce from industry and have it thrive any more than you can tap a -man's jugular vein and have him live! That's what really happened in -this Tragedy of Drastic Destruction.</p> - -<p>And upon whom did this Tragedy bear the hardest? Upon those least able -to endure its fearful pressure—the farmers. Bear in mind that farming -is not only the largest industry in the U.S.A., but it is the only -absolutely basic industry—the keystone upon which rests the entire -industrial superstructure.</p> - -<p>Here is what this Tragedy of Drastic Deflation did to the farmer as -measured for the years of 1919, 1920 and 1921.</p> - -<table summary="deflation" width="60%"> -<tr> -<td>Value in 1919 -</td> -<td>$13,500,000,000 -</td> -</tr> -<tr> -<td>Value in 1920 -</td> -<td><span style="margin-left: 1em;">9,000,000,000</span> -</td> -</tr> -<tr> -<td>Value in 1921 -</td> -<td><span style="margin-left: 1em;">5,675,000,000</span> -</td> -</tr> -</table> - - -<p>In each of these years there was practically the same acreage under -cultivation, 350,000,000 acres. In 1919, farm products were worth -$39 per acre, in 1920, $26 per acre and in 1921, $16 per acre. Here -is where the Federal Reserve credit crusher pulpified the finest—at -the very foundation of all industry! The production of these basic -farm products—the real foundation of all this Federal<span class="pagenum"><a name="Page_67" id="Page_67">[Pg 67]</a></span> Reserve -splendor—was practically the same in volume for these three years, -but the Federal Reserve credit crusher crushed it from $39 to $26 to -$16 per acre measured by its purchasing value! That's the Tragedy of -Drastic Deflation in its final analysis battering down the money value -of America's basic industry almost two-thirds! But the profits of the -Federal Reserve System—and its exorbitant expense account and its -lavish salary rolls—kept off the toboggan down which slid all the -others!</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_68" id="Page_68">[Pg 68]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_X" id="CHAPTER_X">CHAPTER X</a></p> - -<p class="center">THE PALACES OF THE MONSTER</p> - - -<p><span class="figleft"><img src="images/illus11.jpg" alt="dropcaps" /></span>EDERAL Reserve Oligarchy houses itself most palatially. There is -nothing in Government annals or in corporate prodigality private or -public to anywhere approximate the absolute squandermania of Federal -Reserve obsession for luxurious quarters.</p> - -<p>If you want in your city a Post Office Building, a Federal Court -Building or a Custom House Building you must lobby and beseech and -petition and "trade" and pull wires in Congress until you do—or -don't—get it. But it's different with Federal Reserve satraps. 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. And not only that, but the speed with which enormous -sums have been "charged off" from building accounts<span class="pagenum"><a name="Page_69" id="Page_69">[Pg 69]</a></span> is absolutely -appalling. Take a look at some of the items of this profligacy.</p> - -<p>The Philadelphia Federal Reserve Bank bought a building for $600,000 -and spent in "remodeling" it $1,099,638, making a total cost to -September 30, 1921, of $1,699,638, and then "charged off" to -"depreciation allowance" the enormous sum of $1,166,848! In other -words, after spending $1,099,638 in "remodeling" its building it -"charges off" for "depreciation" $1,166,848, or $67,210 more than it -cost to "remodel" it! So that after spending $1,099,638 on "remodeling" -the whole property is worth only $532,790, or $67,210 less than it -cost before "remodeling." Either Philadelphia real estate depreciates -with lightning-like rapidity or Federal Reserve judgment isn't worth -a picayune or this huge "charge out" for "depreciation" is a mere -camouflage or deception. Take your choice. It's either damphoolishness -or incompetency's height of deception. And that's all you can make it.</p> - -<p>The San Francisco Federal Reserve Bank spent originally in "original -investment" for a building $520,785, spent $232,895 for "remodeling," -spent $448,776 for "new building" operations, making a total cost -to September 30, 1921, of $1,202,456 and then "charged off" for -"depreciation allowance" $530,795, so that after spending $681,671 on -"remodeling" and new buildings on an original purchase of $520,785, -it emerges with<span class="pagenum"><a name="Page_70" id="Page_70">[Pg 70]</a></span> a value of but $671,661! Or in other words, after -spending $681,671 on a $520,785 purchase it claims the gross value to -be but $671,661, or but $150,876 more than the original purchase! Or -in other words, it got but $150,876 of value for an expenditure of -$681,671! Does San Francisco real estate depreciate as fast as that, -or are Federal Reserve business oligarchs futile wastrels, or is this -method of accountancy just a camouflage? Figure it out for yourself.</p> - -<p>The St. Louis Federal Reserve Bank made an "original investment" -in building of $1,311,197, spent $560 on "remodeling" and "charged -off" $685,000 for "depreciation allowance," emerging with a value -of $626,575 for an expenditure of $1,311,757! Another case of swift -shrinkage in value or wastrelcy in expenditure or camouflage in -accountancy. Figure it to suit yourself.</p> - -<p>The New York Federal Reserve Bank paid $4,797,882 for its site, spent -up to September 30, 1921, $758,072 on building operations, making -a total expenditure of $5,555,954 and immediately charged off to -"depreciation" the enormous sum of $1,841,618! Did it pay too much for -its site or does real estate in the heart of the greatest city on earth -depreciate almost 40 per cent almost immediately after purchase? Figure -it for yourself. Later on reference will be made to this New York -oligarchical palace of splendor.</p> - -<p><span class="pagenum"><a name="Page_71" id="Page_71">[Pg 71]</a></span></p> - -<p>Up to September 30, 1921, Federal Reserve satrapists had spent -$36,158,056 on its twelve building operations and had "charged off" -as "depreciation allowance" the gigantic sum of $6,684,213! In other -words, in a very few years, and in most cases practically at once, it -depreciated its own building accounts by about eighteen per cent!</p> - -<p>Incidentally up to the same date it had spent $3,212,349 on its Branch -Bank buildings and had depreciated them by $346,369. In its Helena -Branch it made an "original investment" of $15,000, blew in $161,438 -on the purchase and then "charged off" for "depreciation allowance" -$77,738 when it got through, or about 45 per cent on the whole -transaction.</p> - -<p>Up to September 30, 1921, Federal Reservists, including branch banks, -had "reserved" $39,370,405 of your money in building operations and -had them "depreciated" by the enormous sum of $7,030,582, or about -18 per cent, almost immediately. You are entitled to draw your own -conclusions as to the necessity for these palaces, for the splendor -of their equipment and for the real motive of so speedily "charging -off" such enormous sums for "depreciation allowance." You are entitled -to draw your own conclusions as to the wisdom of allowing a coterie -of bureaucrats to spend such huge sums for their personal comfort or -convenience or splendor unsupervised and unhindered.<span class="pagenum"><a name="Page_72" id="Page_72">[Pg 72]</a></span> You are entitled -to ponder on the proposition that these huge expenditures aren't -obtained by legislation from Congress, but are made to suit the whim or -ambition or convenience or extravagant ideas of an appointive body.</p> - -<p>The New York Federal Reserve Bank in cost, in expenditure, in -equipment, in splendors purely for the convenience of its occupants -is intended to surpass any like building on earth. Its cost has been -estimated at from $17,000,000 to $20,000,000. Its corner stone—amid -speeches and plutocratic glorifications—was laid on May 31, 1922. The -fees of architects and engineers alone amounted to the stupendous sum -of $1,106,000. It is intended to house 5,000 employees—about 2,500 -more than it now has.</p> - -<p>Make right here some comparisons.</p> - -<p>In the first week of May, 1922, the loans and discounts of the New -York Federal Reserve Bank amounted to $89,956,248, and it must have a -$17,000,000 building and equipment to handle its activities. On the -same date the loans and discounts of the National City Bank of New York -amounted to $506,840,494, and its bank buildings to but $6,060,000. On -the same date the loans and discounts of the National Bank of Commerce -of New York amounted to $259,165,930, and its bank building to but -$4,000,000. Figure it for yourself. It makes some difference whose -money is being spent, doesn't it? Private business is one<span class="pagenum"><a name="Page_73" id="Page_73">[Pg 73]</a></span> thing, and -public business is another thing, when it comes to housing it, isn't -it? Compare the volume of the loans of these banks, compare their -building costs and draw your own conclusions.</p> - -<p>In addition to veined marble and polished brass and in addition to a -mass of luxurious equipment the New York Federal Reserve Bank has, or -will have on completion, a beautiful auditorium, a gymnasium, a club -room for men, a club room for women, and a restaurant.</p> - -<p>It will doubtless gratify farmers on the prairies, workmen all over -the land, merchants, and manufacturers and professional men to know -that their toil, their efforts and their earnings are in effect being -levied upon to provide this modern palace equipped with an auditorium, -a gymnasium, two clubs and a restaurant.</p> - -<p>It will doubtless gratify the stockholders in National Banks, whose -money is commandeered to capitalize this leviathan, to know that -their money, or its proceeds, or its earnings, is being used to erect -and equip a veritable Temple of Mammon with all these attendant -luxuries—which they themselves cannot afford in their places of -business!</p> - -<p>If you, who read these lines, could commandeer over a hundred millions -of dollars for capital at 6 per cent and could conscript over -$1,800,000,000 of deposits at no per cent you could transact your -business in a palace in the heart of New<span class="pagenum"><a name="Page_74" id="Page_74">[Pg 74]</a></span> York with an auditorium and -club rooms and a gymnasium and a restaurant, couldn't you? But as you -can't commandeer your neighbor's capital nor conscript for nothing the -deposits of the public, you find yourselves compelled to work and to -provide the wherewithal for those who can!</p> - -<p>You can measure these lavish expenditures for buildings and equipments -and luxuries by any known measure, by volume of business, or by like -buildings for like purposes and it is as clear as day that these -Federal Reserve Palaces are a monument of needless extravagance and -of wanton wastage—pulled off by the ukase of enthroned bureaucracy -spending "other people's money!" That's all you can make of the -Monster's Palaces.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_75" id="Page_75">[Pg 75]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_XI" id="CHAPTER_XI">CHAPTER XI</a></p> - -<p class="center">THE MONSTER'S EXPENSES</p> - - -<p><span class="figleft"><img src="images/illus12.jpg" alt="dropcaps" /></span>OU are going now to look over—and not overlook—the most stupendous, -wasteful and exorbitant bank expense account ever entered on bank -ledgers on this earth. You are going to look at the details of an -expense account where the items run by millions, where expenses have -no legal limit and where they are incurred, paid and audited without -any supervisory authority. You are going to gaze at an expense account -where the "sky is the limit."</p> - -<p>Take first a look at the New York Federal Reserve Bank's expense -account. That one is the most arrogant, wasteful and prodigal of all -the twelve regional satrapies.</p> - -<p>In 1917 the entire salary and wages account of the New York Federal -Reserve Bank was $970,580 and their total loans and discounts were -$399,078,000. Mark that down—salaries and wages of $970,580 and -loans and discounts (which really measure the business of a bank) of -$399,<span class="pagenum"><a name="Page_76" id="Page_76">[Pg 76]</a></span>078,000, or $1 of expense to every $413 of loans and discounts.</p> - -<p>On January 25, 1922, the salary and wages account of the New York -Federal Reserve Bank was $4,988,703, with loans and discounts of -$146,526,938, or $1 of expense to every $29 of loans and discounts!</p> - -<p>Ask any practical banker, any administrative business man, any expert -accountant or any efficient expert if it is possible to justify any -such expense ratio. One to four hundred and thirteen in 1917 and one to -twenty-nine in 1921—fourteen to one raise!</p> - -<p>In 1917 there were 12 officers of that bank to administer loans of -$399,078,000. In 1921 there were 40 officers of that bank to administer -loans of $146,526,938. In other words, you get 28 more officers to -administer a business shrunken down over sixty per cent! In other -words, you get over a two hundred per cent increase in officers to -administer a sixty per cent business shrinkage!</p> - -<p>And now incidentally the pay of those 40 officers—administering a -sixty per cent shrunken business—amounted to more money than the -salaries of the President of the United States, the Vice President of -the United States, half the United States Senate and the Governors of -twelve American States besides! If that isn't bottomless bureaucratic -greed expressed mathematically, you express it yourself!</p> - -<p><span class="pagenum"><a name="Page_77" id="Page_77">[Pg 77]</a></span></p> - -<p>Look further into the depths of this golden pool of New York Federal -Reserve expense plunderbund. You are helping pay it and you are -entitled to scrutinize the salary items. Take 'em as they come.</p> - -<p>J. Crane entered the bank at a yearly salary of $1,080 as manager -foreign department and now receives a yearly salary of $7,500, or an -increase of 594 per cent.</p> - -<p>A.J. Lins, manager at large, entered the bank at a yearly salary of -$1,500 and now receives a yearly salary of $10,000 or an increase of -566 per cent.</p> - -<p>John Raasch, manager supply department, entered the bank at a yearly -salary of $1,000 and now receives a yearly salary of $6,000, or an -increase of 500 per cent.</p> - -<p>E.R. Kenzel, deputy governor, entered the bank at a yearly salary of -$4,200 and now receives a yearly salary of $22,000, or an increase of -423 per cent.</p> - -<p>A.W. Gilbart, controller of administrations, entered the bank at a -yearly salary of $2,400 and now receives a yearly salary of $12,500, or -an increase of 420 per cent.</p> - -<p>L.R. Rounds, controller of accounts, entered the bank at a yearly -salary of $2,400 and now receives a salary of $12,500, an increase of -420 per cent.</p> - -<p><span class="pagenum"><a name="Page_78" id="Page_78">[Pg 78]</a></span></p> - -<p>Chas. H. Coe, manager of the check department, entered the bank at a -yearly salary of $1,500 and now receives a yearly salary of $7,200, an -increase of 380 per cent.</p> - -<p>W.B. Matteson entered the bank at a yearly salary of $2,400 and now -receives $10,000, an increase of 316 per cent.</p> - -<p>J.D. Higgins, controller of cash, entered the bank at a yearly salary -of $3,000 and now receives a yearly salary of $12,000, an increase of -300 per cent.</p> - -<p>S.S. Vansant, manager discount department, entered the bank at a -yearly salary of $1,500 and now receives a yearly salary of $5,000, an -increase of 233 per cent.</p> - -<p>R.M. Gidney, controller at large, entered the bank at a yearly salary -of $4,000 and now receives a yearly salary of $15,000, or an increase -of 275 per cent.</p> - -<p>I.W. Waters, manager personal service department, entered the bank at a -yearly salary of $2,250 and now receives a yearly salary of $7,200, or -an increase of 220 per cent.</p> - -<p>James Rice, manager government bond department, entered the bank at a -yearly salary of $1,800 and now receives a yearly salary of $5,500, or -an increase of 205 per cent.</p> - -<p>L.H. Hendricks entered the bank on a yearly salary of $6,000 and now -receives a yearly salary of $18,000, or an increase of 200 per cent.</p> - -<p><span class="pagenum"><a name="Page_79" id="Page_79">[Pg 79]</a></span></p> - -<p>Incidentally Benjamin Strong, the governor of the New York Federal -Reserve Bank, has had his salary increased from $30,000 per year to -$50,000 per year—more than six times the pay of a United States -Senator!</p> - -<p>Ask any corporate manager, any practical banker, or any efficiency -expert if they permit, or if they know of any such stupendous salary -increases—increased and maintained in a time of general disaster and -enforced economies. If this isn't strutting bureaucracy running amuck -with public money, what is it?</p> - -<p>Take now a look at the total expense account—which you are helping to -pay—of the Federal Reserve System for the year 1921. It amounted to -the stupendous sum of $36,066,065, or an average of $3,005,500 for each -one of the twelve regional satrapies! You can't measure it—because -there is nowhere on earth any other banking expense account by which to -measure it! Like an Andean peak it towers aloft in solitary splendor. -But you can look at some of the items. Here they are. The New York -Federal Reserve Bank heads the list of extravagance with an expense -account of $8,167,780, and the Minneapolis Federal Reserve Bank was the -most modest—and not any too modest at that—with an expense account -of $1,325,867. It cost you for bank officers' salaries $2,383,994, for -clerk hire $15,201,393, for special officers and watchmen $789,879 and -for<span class="pagenum"><a name="Page_80" id="Page_80">[Pg 80]</a></span> "all other" $1,102,984. What that "all other" item of $1,102,984 -really is, is deep buried in Federal Reserve archives. When you get -through with bank officers, bank clerks, special officers and watchmen, -you would think that included about all possible bank employees, but -Federal Reserve ingenuity slips over $1,102,984 under the cloak of "all -other!"</p> - -<p>It cost you $7,750 for Federal Reserve Governors to "confer," $4,443 -for Federal Reserve Agents to "confer" and $10,522 for the Federal -Advisory Council—whatever that is—to "confer." "Conferences"—in -bureaucracy—come high, don't they? And it cost you $168,556 to hold -directors' meetings with 173 out of 254 of them living in the same town -where the bank or its branch is located. Traveling expenses cost you -$357,962—some travelers these Federal Reserve tourists are!</p> - -<p>These bureaucratic "expenses" of a parasitical system hooked on to -your banking system are stupendous, titanic, gigantic! They are -indefensible—and undefended too—from any possible standpoint of -efficiency, economy or necessity. Look them over in cold blood. -Look over the stupendous salary raises—both in amounts and in -percentages—in the New York Federal Reserve satrapy and compare -them with any private business on earth. Private stockholders—not -commandeered by law and not chained by act of<span class="pagenum"><a name="Page_81" id="Page_81">[Pg 81]</a></span> Congress—would drive -out any such maladministration of extravagance. You know it.</p> - -<p>Who is responsible—directly, morally and legally responsible—for -this orgy of Federal Reserve extravagance absolutely unequaled in -the history of the world or in the history of banking? Why, the -Federal Reserve Board at Washington is responsible. What makes them -responsible? Here is the exact language. Read it. "Any compensation -that may be provided by Boards of Directors of Federal Reserve -Banks for directors, officers or employees shall be subject to the -approval of the Federal Reserve Board." That's plain, isn't it? If -the Federal Reserve Board at Washington doesn't "approve" these huge -compensations, they can not be paid. 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. At their -nod or at their beck every Federal Reserve employee holds his job, for -if they don't "approve" his "compensation" he can't<span class="pagenum"><a name="Page_82" id="Page_82">[Pg 82]</a></span> attach his lips -to the public teat with its golden flow of "compensation!" It's the -Federal Reserve Board at Washington—unsupervised and with legally -limitless power—which is responsible for this Federal Reserve expense -orgy.</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_83" id="Page_83">[Pg 83]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_XII" id="CHAPTER_XII">CHAPTER XII</a></p> - -<p class="center">WHAT THE MONSTER DOES WITH ITS LOOT</p> - - -<p><span class="figleft"><img src="images/illus13.jpg" alt="dropcaps" /></span>HIS chapter is going to be like a tack—short but pointed. Federal -Reserve apologists—on and off the floor of Congress—when driven -into their last retreat always take their final stand and make their -last play in the "franchise tax" stronghold. Their assertion is -in effect that no matter what may be the abuses and sandbaggeries -and extravagances of this system the "big money" gets back to the -Government in the shape of the mythical "franchise tax." Here is where -you get the facts precisely as they are. What became of the lootage of -the Federal Reserve System for the year 1921 and what proportion of it -did your Government get?</p> - -<p>The gross takings of the Federal Reserve System—extracted from -American production and industry—amounted to $122,864,605. That's -what it euphoniously calls its "earnings." First there came out -the gigantic expense account, of which you have already read, of -$36,066,065, leav<span class="pagenum"><a name="Page_84" id="Page_84">[Pg 84]</a></span>ing $86,798,540, which the monster calls its "current -net earnings." There is then added to this $360,856, which in previous -years had been deducted for "depreciation on U.S. Bonds," which didn't -finally "depreciate." There is also added $131,536 under an "all other" -blanket—much favored in the Federal Reserve System vocabulary. You -now have $87,290,932 "current net earnings." From this are deducted -$1,251,675 for "depreciation allowance on bank premises;" $2,861,500 -for "reserve for possible losses" which probably won't occur; $400,000 -"reserve for self insurance"—whatever that is; $49,295 "reserve for -depreciation on U.S. Bonds"—which probably won't depreciate now that -they have been sandbagged out of the hands of the original purchasers; -$641,237 sandbagged out under the favorite "all other" Federal Reserve -blanket. Here are $5,203,707 gone out in mere bookkeeping entries -with the real money which these entries represent still in Federal -Reserve custody. This leaves $82,087,225. From this is deducted a petty -$6,119,673 dividends paid on the capital commandeered. From this is -deducted $15,993,086 to be added to the already swollen Federal Reserve -Surplus Account. And there is left just $59,974,466 for the much touted -franchise tax.</p> - -<p>If you have followed these figures you have seen that in order to -get a petty "franchise tax" of $59,974,466 into the hands of your -Govern<span class="pagenum"><a name="Page_85" id="Page_85">[Pg 85]</a></span>ment, it cost you just exactly $62,890,139 to collect it—the -precise difference between the Federal Reserve "earnings" and the -amount paid into the Government. Ask yourself, is a tax of $59,974,466, -which costs $62,896,139 to collect a "painless tax?" Is there any more -painful tax levied on American industry? That's what this ballyhooed -"franchise tax" amounted to in 1921 and all it amounted to—a tax of -$59,974,466, which cost $62,890,139 to collect!</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_86" id="Page_86">[Pg 86]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_XIII" id="CHAPTER_XIII">CHAPTER XIII</a></p> - -<p class="center">THE CAMOUFLAGE OF THE MONSTER</p> - - -<p><span class="figleft"><img src="images/illus14.jpg" alt="dropcaps" /></span>ON'T check your brains at the portals of the Federal Reserve "Bunking" -System. That is what its touters and ballyhooers want you to do. -Federal Reserve bureaucrats and its beneficiaries and its hirelings and -an artfully subsidized press have really put the "prop" in propaganda.</p> - -<p>They would have you believe—and literally hundreds of columns of -inspired writings have been used to make you believe—that the Federal -Reserve System is composed of twelve independent Federal Reserve Banks, -each one especially devoted to fostering industry in its own regional -territory.</p> - -<p>Such is not the fact. The fact is that the Federal Reserve System is in -truth a huge Central Bank, managed, manipulated, directed and operated -from Washington by the Federal Reserve Board. There sits the spider and -there the web is woven—spreading all over the U.S.A.—in which are -enmeshed the victims.</p> - -<p><span class="pagenum"><a name="Page_87" id="Page_87">[Pg 87]</a></span></p> - -<p>You can read—if you want to waste your time—oodles of language about -how the Boards of Directors of these twelve Federal Reserve Banks are -seated in office and how part of them are elected by member banks -and how part of them are appointed by the Federal Reserve Board. You -can—if you want to waste more of your time—absorb messes of artfully -worded verbiage about the duties of the Boards of Directors. But -it's all "gammon and spinach," it's all artful camouflage. <i>The real -government of the Federal Reserve Banking System and of its twelve -Federal Reserve Banks and branches is in the absolute dictatorial -control of the Federal Reserve Board at Washington.</i> It is all -contained in one little joker of just thirty words. Here it is. Read -it. "<i>Any compensation that may be provided by Boards of Directors of -Federal Reserve Banks for directors, officers or employees shall be -subject to the approval of the Federal Reserve Board.</i>" In every one -of the twelve Federal Banks every director, every Governor, every one -of the Deputy Governors, Federal Reserve Agents, Cashiers, Assistant -Cashiers, Controllers, Secretary, Counsel, Assistant Counsel, Clerks, -Stenographers, Messengers and Watchmen—in short, the whole horde of -Federal Reserve bureaucratic parasites—are subject to the approval of -the Federal Reserve Board at Washington because <i>their compensation -is subject to the approval of the Federal Reserve Board</i>. You<span class="pagenum"><a name="Page_88" id="Page_88">[Pg 88]</a></span> know -that the hands that hold the money rule the enterprise. You know -that approval or disapproval of compensation is in effect "hiring -and firing." You know that "approval of compensation" is simply a -euphonious bit of language or smoke screen behind which really sits an -enthroned autocracy. No matter how many "conferences" are held between -Governors of Federal Reserve Banks, between Federal Reserve Agents and -with the Federal Advisory Council—"conferences" which during 1921 cost -you $22,716—the Federal Reserve Board at Washington is the supreme -and final dictator of the personnel and of the pay of its 10,313 -employees and of its 231 officers. The Federal Reserve Board as to -the compensation of this horde—and hence as to its personnel—is an -absolute autocracy from whose order there is no appeal! It draws its -expense account from a practically bottomless treasury without let, -hindrance, supervision or veto! Kaiserdom and Czardom in their palmiest -days drew from no such lake of liquid gold as draws the Federal Reserve -Board at Washington. Set that down on your mental tablets and proceed -to the next camouflage station.</p> - -<p>Here it is. Federal Reserve propaganda—with a practical limitless -expense account to further it—would have you believe that its favored -coterie of 231 officials are top notch bankers. Take a look at this -as it really is. The bankers whom<span class="pagenum"><a name="Page_89" id="Page_89">[Pg 89]</a></span> you know and with whom you do your -business and to whom you entrust your money and from whom you borrow -your money have taken their own money and the money of their associates -and contributed the capital of their banks and put it at risk. They -wager their own money that they are good bankers. They have initiative -and confidence in their own ability and they prove that they have by -putting up their own money before they ask you to entrust yours to -their keeping. The officers of the Federal Reserve Banks don't put -up a copper cent, a plugged nickel, or a thin dime of capital. The -capital which they manipulate is commandeered by law for their use at -a petty six per cent rate. They may charge—and they have charged—as -high as eighty-seven per cent in one of their Shylockeries, but six -per cent is all that those who furnish the capital can claim. In 1919 -the Federal Reserve System sandbagged out of other people's money a -profit of 110 per cent, in 1920 160 per cent and in 1921 79 per cent. -In 1919 its stockholders received 104 per cent less than their capital -really earned, in 1920 154 per cent less than their capital really -earned, and in 1921 73 per cent less than their capital really earned. -For the three years of 1919, 1920 and 1921 the average net profits of -the Federal Reserve System were 116 per cent and the real owners of -the capital were gypped legally—but none the less gypped—out of an -average of 110<span class="pagenum"><a name="Page_90" id="Page_90">[Pg 90]</a></span> per cent for each of those three years. Do you suppose -that officers of any bank not legally so buttressed could "get away" -with any such proposition? You know they couldn't—and hold their jobs. -No body of stockholders in the U.S.A., unless legally chained, would -endure a profit of 116 per cent and a dividend of but 6 per cent! And -no bank officers in the U.S.A., unless legally permitted, would attempt -to "put over" any such proposition. You know it. Peg that and proceed -to the next proposition.</p> - -<p>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. Fed<span class="pagenum"><a name="Page_91" id="Page_91">[Pg 91]</a></span>eral 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!</p> - -<p>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.</p> - -<p>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 amounted<span class="pagenum"><a name="Page_92" id="Page_92">[Pg 92]</a></span> to $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!</p> - -<p>Sum up some of these differences between National and State Banks and -Federal Reserve parasitism.</p> - -<p>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.</p> - -<p>National bankers make practically over a large term of years about -12 per cent net profits and<span class="pagenum"><a name="Page_93" id="Page_93">[Pg 93]</a></span> Federal Reserve bankers make the most -fabulous profits ever registered on bank ledgers—during the three -years last past an average of 116 per cent.</p> - -<p>National and State bankers earn their deposits in the hottest kind of -competition. Federal Reserve bankers conscript their deposits—without -a scintilla of effort.</p> - -<p>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.</p> - -<p>National and State bankers pay interest upon deposits of other banks. -Federal Reserve bankers do not pay any interest.</p> - -<p>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!</p> - -<p>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 no<span class="pagenum"><a name="Page_94" id="Page_94">[Pg 94]</a></span> risk -but reaping profits which would make Shylock frenzy with envy?</p> - -<p>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?</p> - -<hr class="chap" /> - -<p><span class="pagenum"><a name="Page_95" id="Page_95">[Pg 95]</a></span></p> - - - - -<p class="ph2"><a name="CHAPTER_XIV" id="CHAPTER_XIV">CHAPTER XIV</a></p> - -<p class="center">FINAL VOLLEY AT THE MONSTER</p> - - -<p><span class="figleft"><img src="images/illus15.jpg" alt="dropcaps" /></span>ET right down to brass tacks and ask yourself these questions:</p> - -<p>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?</p> - -<p>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?</p> - -<p>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?</p> - -<p>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?</p> - -<p><span class="pagenum"><a name="Page_96" id="Page_96">[Pg 96]</a></span></p> - -<p>No. 5. Do you want such titanic expense accounts and such altitudinous -salaries paid to favored bank officers?</p> - -<p>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?</p> - -<p>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?</p> - -<p>No. 8. Do you want such a Partiality of Pillage whereby parasitical -speculation is coddled and the necessary production of real wealth is -throttled?</p> - -<p>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?</p> - -<p>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?</p> - -<p>No. 11. Do you want pawnbrokering interest rates charged and Shylockery -practiced under the aegis of your flag?</p> - - - -<p><span class="pagenum"><a name="Page_97" id="Page_97">[Pg 97]</a></span></p> - -<p>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?</p> - -<p>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?</p> - -<p>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?</p> - -<p>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 and<span class="pagenum"><a name="Page_98" id="Page_98">[Pg 98]</a></span> Lincoln 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?</p> - -<p>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?</p> - -<p>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?</p> - - -<p class="center">End</p> - - - - -<p class="ph2" style="margin-top: 5em;">ZINC! VINEGAR! VITRIOL!</p> - -<p class="center">JIM JAM JEMS</p> - - -<p>Please don't confound JIM JAM JEMS with other magazines that are aping -it in size and general appearance. It is not a joke book, nor a dream -book, nor a slab of fiction. It is just what it is advertised to be—A -Volley of Truth.</p> - -<p>You will find more hard, frozen-in facts and facts that you want to -know about matters of public interest in each issue of JIM JAM JEMS -than you will find in any other publication in America.</p> - -<p>You cannot afford to miss a single number. 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Clark -and Wallace Campbell - - -This eBook is for the use of anyone anywhere in the United States and most -other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms of -the Project Gutenberg License included with this eBook or online at -www.gutenberg.org. If you are not located in the United States, you'll have -to check the laws of the country where you are located before using this ebook. - - - - -Title: The Federal Reserve Monster - - -Author: Sam H. Clark and Wallace Campbell - - - -Release Date: July 14, 2017 [eBook #55099] - -Language: English - -Character set encoding: ISO-646-US (US-ASCII) - - -***START OF THE PROJECT GUTENBERG EBOOK THE FEDERAL RESERVE MONSTER*** - - -E-text prepared by MFR, Graeme Mackreth, and the Online Distributed -Proofreading Team (http://www.pgdp.net) from page images generously made -available by Internet Archive (https://archive.org) - - - -Note: Images of the original pages are available through - Internet Archive. See - https://archive.org/details/federalreservemo00clarrich - - - - - -THE FEDERAL RESERVE MONSTER - -by - -_JIM JAM JEMS_ - -Bismarck, N.D. - - - - - - -Price $2.00 in U.S.A. -Carriage Prepaid - -Compiled, Edited and Published -by -Sam H. Clark and Wallace Campbell -Of -JIM JAM JEMS -Bismarck, North Dakota - -Copyright August 1922 - - - - -EDITOR'S FOREWORD. - - -WITH "charity toward all and malice toward none" we indite this -volume of criticism of the Federal Reserve "Bunking" System as it is -"practiced" in America. We are not posing as a modern David, nor do -we underrate the size of the giant we have tackled herein by several -damsights. And by the same token we are not depending on a single stone -to deliver a knockout; on the contrary we are delivering a veritable -volley of rocks at the object of our criticism and we hope that every -chapter written here will raise bruises and welts on the back and belly -of the critter. - -We have no intention nor desire to kill. And we don't believe in -reform. When a thing needs reforming it needs an axe. But what we -are striving to do is to awaken public sentiment to the damnable -ramifications of the Federal Reserve Octopus in the hope that the -people will "come alive" and eventually force the Federal Reserve -System to be born anew. - -It is the abuse of the Federal Reserve System to which we object. Every -little while some smart Alec mounts the bema and roars about the great -good that the Federal Reserve System has accomplished. It is called the -Savior of Credit and Industry. But it is misbranded. There's a vast -difference between the picture on the tomato can and the contents of -the can. - -If you have ever lived in the West or North or in any part of the -country where wild ducks or partridges or prairie chickens nest, you -are familiar with the antics of the mother duck or prairie hen during -the hatching season. You have come suddenly upon the mother of a brood -along the roadside and as she hops along there is every indication that -the bird is wounded and she leads you away from her nest to a point -where she figures the young are safe and then up and away she goes. -These touters for the Federal Reserve System remind us of the mother -duck and the prairie hen. They flap along and distract your attention -from the nest which they are so beautifully feathering; they prate -about "saving" and "benefiting" and flap you along until you lose sight -of the brood of evils that they are really mothering. - -Our object in attacking the evils of the Federal Reserve System has -been to awaken sentiment--that is all. For the past two years we have -kept up a continuous bombardment against the iniquities of the Federal -Reserve System through the monthly issues of Jim Jam Jems. The demand -for back numbers and extra copies has been so great that we deemed it -advisable to collect all of these charges under one volume and thus -place the whole Truth about the Federal Reserve System before the -people. What we publish herein is fact, carefully compiled from the -System's own reports and from public records. We commend this volume to -all thinking, upstanding Americans who are ever ready to fight for a -square deal. - - - - -ZINC! VINEGAR! VITRIOL! - -JIM JAM JEMS - - -Please don't confound JIM JAM JEMS with other magazines that are aping -it in size and general appearance. It is not a joke book, nor a dream -book, nor a slab of fiction. It is just what it is advertised to be--A -Volley of Truth. - -You will find more hard, frozen-in facts and facts that you want to -know about matters of public interest in each issue of JIM JAM JEMS -than you will find in any other publication in America. - -You cannot afford to miss a single number. Fill in the coupon below and -send it to us with your check for three dollars and you will get JIM -JAM JEMS for a year delivered by mail to your office or home address. - -Don't wait! Join our army of regulars with the next number. - - * * * * * - - JIM JAM JEMS, - Bismarck, N. Dak. - - Gentlemen: - -Here's my check for $3.00. Send me JIM JAM JEMS for a year at the -following address: - - Name ....................................... - - Street ..................................... - - City ........................ State ........ - - - - -CONTENTS - - - Chapter Page - - I FEDERAL RESERVE "BUNKING." 1 - - II THE BIRTH OF THE FEDERAL RESERVE SYSTEM 4 - - III THE FRAMEWORK OF THE MONSTER 9 - - IV THE STUFFING OF THE LEVIATHAN 16 - - V CHECK COLLECTION BANDITRY 21 - - VI THE LOOT OF THE MONSTER 34 - - VII HOW THE LOOT IS GATHERED 40 - - VIII THE PARTIALITY OF THE PILLAGE 50 - - IX THE TRAGEDY OF DRASTIC DEFLATION 56 - - X THE PALACES OF THE MONSTER 68 - - XI THE MONSTER'S EXPENSES 75 - - XII WHAT THE MONSTER DOES WITH ITS LOOT 83 - - XIII THE CAMOUFLAGE OF THE MONSTER 86 - - XIV FINAL VOLLEY AT THE MONSTER 95 - - - - -Federal Reserve "Bunking" - - - - -CHAPTER I - -THE FEDERAL RESERVE SYSTEM--WHAT IT REALLY IS - - -THE Federal Reserve System is the visible hand of the Invisible Empire -picking the pockets of the producers of real wealth. It is the most -leviathan parasite engrafted upon--and grafting on--production in the -world's history. It is an industrial vampire sucking industry's life -blood down its bottomless maw. Its greed is fathomless, its rule is -ruthless and its lust for power is insatiate. - -It is openly and avowedly run and managed in the interest of a -so-called "superior class." It has a cynical contempt for the -public--whom it ruthlessly plunders. It believes--and practices the -belief--that it was instituted for the promotion and protection of -superior privileges; that wealth is produced for its exploitation; -that production of values exists for its parasitical plunder; that -Shylockery is a virtue and that the fruits of industry belong not to -its producers but to its despoilers. - -Property-owners, property-earners and property-producers are but -its puppets whom it plunders at will. By monopolizing and juggling -money--the mere symbol of wealth--it destroys the value of real wealth. -It has but one interest in the public whom it hypocritically professes -to serve and that interest is expressed in the query "How much will the -people stand?" - -There is nothing with which to compare it for it stands alone in the -world's history as the most gigantic plunderbund ever conceived in -predacity's womb. Czardom at its height and Kaiserdom at its zenith -never held a tithe of the real power held by the Federal Reserve -System. It is the perfected fruit and flower of financial high-bindery, -industrial plunderbund and applied Shylockery. Under the cloak and -mantle of the law it reaches forth its paws of predacity and pouches -filcheries which are simply stupendous. - -That is briefly what the much touted and saccharinely adulated Federal -Reserve System really is. Abraham Lincoln, the greatest human intellect -which ever functioned on this planet, prophetically drew its portrait -in these words: "It (the Civil War) has been indeed a trying hour for -the Republic; but I see in the near future a crisis approaching that -unnerves me and causes me to tremble for the safety of my country. -As a result of the war, corporations have been enthroned and an era -of corruption in high places will follow and the money power of -the country will endeavor to prolong its reign by working upon the -prejudices of the people until all wealth is aggregated in a few hands, -and the Republic is destroyed. I feel at this moment more anxiety for -the safety of my country than ever before even in the midst of the war. -God grant that my suspicions may prove groundless." - -That is the true portrait, drawn by a master hand, of the Federal -Reserve System. - -In subsequent chapters you will see the birth of the monster, its -ruthless methods of plunder, its machinery of despoilment, its monopoly -of money and credit, its pawnbrokery and Shylockery and its huge mounds -of pillage. - -And in looking it over don't overlook the fact that you, you -yourself--whatever may be your part in American industry--are laying -tribute on the Federal Reserve altar of Mammon. You can't escape its -net of pillage. Amid its mounds of gold, currency and securities--the -hugest ever massed together on this planet--your contribution is there. -Your brain or your brawn, or both, have added to its lootage. If you -live and toil in the U.S.A.--in whatever capacity--your "mickle" adds -to the "muckle"--of its stored pillage. - - - - -CHAPTER II - -THE BIRTH OF THE FEDERAL RESERVE SYSTEM - - -"SLICKER than an eel in a bucket of soap suds" is a fair description -of the accomplished financial accoucheurs who ushered this monster -into legal existence. You must understand that the real object was -to establish what was in truth and fact a Central Bank which would -dominate and control currency issues and bank credits in the United -States. To weld those chains upon American industry without appearing -to do it was the object in view. It could be done only by encasing -dirty hands of real pillage in the white gloves of a "Reserve System." -The Invisible Empire must remain invisible. Visibility would defeat its -object. The Money Masters had read history and knew that the American -people stood four square against a Central Bank. If their monster -of pillage were called a Central Bank they knew it would die in the -legislative womb. - -Two such attempts had been made and had resulted disastrously thusly. -The first attempt was the First United States Bank. It was the child -of Alexander Hamilton's astute brain. It began business on December -12, 1791. It met violent opposition from its birth. It was branded as -a "Money Trust," struggled along with varying fortunes and finally -died on March 3, 1811, when its charter expired--with its renewal -vainly sought. American industry rebelled at the idea of a Central Bank -domination. It savored too much of that aristocracy and oligarchy whose -chains they had recently chiseled. - -The second attempt to engraft a Central Bank on American industry was -the Second Bank of the United States. It was chartered on April 10, -1816, and was a stormy petrel of finance. About it waged a running -battle. It was from birth to death the center of a conflict. Against -its domination American industry rebelled. Real producers of real -wealth constantly fought this parasite of finance. Andrew Jackson was -its bitter foe and it went out of existence during his administration -"unwept, unhonored and unsung" except in the doleful dirges of the -then Money Masters who mourned its demise. The Money Masters of those -two eras read the handwriting on the wall. American industry would -not endure a Central Bank and the Money Masters of 1914 read the -same symbols. History was against them and the genius of American -institutions was against them. Their idea of a Central Bank had never -changed. It was the very core and center of their scheme to dominate -American industry. But to "get it across" or to "put it over" they must -re-christen the monster. Twice the people had violently repudiated the -Central Bank banditry. Hence in the fertile brainery of predacity was -born the idea of the Federal Reserve System--a camouflage, a deception -and a mere cloak of Pecksniffian hypocrisy. A clever nation-wide -propaganda was at once instituted with every "prop" put under it that -wily astuteness could suggest. A subsidized press ballyhooed, touted -and paeanized the proposed Federal Reserve System. It was hailed as -the Moses which was going to lead America into the Promised Land of -industrial freedom. It was paeanized as an absolutely new discovery in -finance--when in truth and in fact it was one of predacity's oldest -cards soiled in many a game. But it was varnished o'er and played again. - -There wasn't to be any "Central Bank" you understand. The sponsors -of this monster abhorred the idea of a "Central Bank." It was the -furthest possible from their pure thoughts of altruistic finance! They -were going to have twelve banks, each one established in a center of -industry and catering to and upbuilding the industries in its regional -zone. Each one was going to be a separate and distinct corporation -absolutely disconnected from its eleven brethren. This idea was -advertised, adulated, and saccharinely paeanized until America was -lulled to sleep. For month after month this cone of chloroform was held -over American citizens until the anesthetic took effect. Then came -forth what was known as the Glass-Owen bill. The smoothness of its -head sponsors' name was symbolic. The ground had been prepared for its -reception. Propaganda seed had been diligently sown. Years of the most -astute scheming and plotting of the brainiest schemers who ever schemed -bore its fruit in the Glass-Owen bill. On rails greased by years of -propaganda it slid into the legislative hopper, came through in an oil -bath and went to President Wilson. Whether he was the deceived or the -deceiver none but himself knows. But he painted the Federal Reserve -System with his most magnificent verbal rainbow colors, prated of it -as "the emancipator of credit," signed it in the midst of a coterie -of sycophantic Pecksniffs and the pen whose strokes made it a law was -religiously preserved! - -Its real authors--who had spent years in weaving its phrases and scores -of thousands of dollars in propagandizing for its passage--winked, -smiled in their sleeves and prepared for pillage. The Federal Reserve -System was born with a caul--concealing its grin of greed--and -was brought into being by the most astute coterie of legislative -accoucheurs who ever delivered a babe of legislation. - -Here and now read just two of the sample promises made by the Money -Masters at the birth of their monster. They told you that the Federal -Reserve System would "prevent unfair and undue constriction of credits -with its consequent paralyzing effect on business and on the productive -energies of the nation." They told you that "men will not be thrown -out of employment wholesale throughout the country by the fright of -financial and commercial panic, but finance and commerce will be -steady. Hundreds and thousands of men will not suddenly be thrown out -of employment during these national waves of depression nor undue -feverish buoyancy." Peg these specious promises in your brainery and -compare them later on with the actual performances of this monster -of depression with the Federal Reserve Board at Washington really -functioning as a Central Bank. - - - - -CHAPTER III - -THE FRAMEWORK OF THE MONSTER - - -HERE'S the idea. Were you one of a coterie of multi-millionaires -lusting for the control of American industry and finance--exclusively -for pillage--you would, if necessary, join in providing any amount of -capital necessary to obtain the result. You could afford to provide -it for it would make you one of a coterie enabled to loot the richest -prizes on this planet. Any system which could at will open or shut -the valves of American credit, stage an orgy of "inflation" or stage -a debacle of "deflation," increase or decrease the money supply, make -the tide of employment flow to prosperity's height or ebb to despair's -depths, create a "bull" or a "bear" market at will--would justify the -investment of hundreds of millions or even billions of capital! Its -power would be practically boundless, its profits be fabulous and from -its coign of vantage it could coin the sweat of scores of millions of -toilers into its coffers of greed. - -But if you could do this very same thing and obtain precisely the same -results and reap exactly the same harvest in power and pelf without -investing one thin dime or one plugged nickel you wouldn't put up the -money, would you? That is just exactly what these Federal Reserve -highbinders did and this is just exactly how they did it. There lay -fair to their hands the most successful banking system in the world's -annals--the National Banks. - -Here was the core and center of their pillage. Here was the capital -ready to their hands. They proceeded to levy upon, to appropriate and -to commandeer their capital from the National Banks of the United -States. They divided the U.S.A. into twelve financial satrapies or -dependencies or loot areas with centers of pillage thusly: New York, -Chicago, Atlanta, San Francisco, Boston, Minneapolis, Kansas City, -St. Louis, Cleveland, Philadelphia, Richmond, and Dallas. Upon every -National Bank in the U.S.A. there was levied a capital tribute of six -per cent of their capital and surplus account for subscribed capital -to the Federal Reserve Bank set over them. Of this amount one-half or -three per cent was required to be immediately paid in and the other -half was held subject to call if required. - -Take a look at this first step on the stairway of pillage. Without the -investment of one copper cent, of one plugged nickel or of one thin -dime and by one stroke of the pen when this infamous law was passed -practically one hundred millions of capital was commandeered into the -coffers of Federal Reserve banditry. Without the risk of one penny of -their own money the Federal Reserve plunderbund seized in its talons -of greed the hugest banking capital in the U.S.A.--practically two -hundred millions of dollars with one-half of it immediately payable -and the other half subject to call! It was the most daring financial -high-bindery ever enacted on earth. - -Right here don't hock your brains--do your own thinking. Without any -option, without any vote of stockholders, without any action by its -officers every National Bank in the U.S.A. was compelled to buy stock -in the Federal Reserve Bank in its fiscal dependency or loot area in -which it was located. Protest was useless--just as useless as if they -stood under the guns of a Jesse James' or Younger Brothers' gang. It -was just "stand and deliver" and they delivered! - -At this time, in 1914, the banking business in the U.S.A., and -particularly National Banks, was functioning soundly and safely. It -was serving--not dominating--industry. It was making reasonable--not -Shylock--profits. - -Suppose the lustful eyes of the Federal Reserve lootage had turned -to the drygoods instead of to the banking business. They would have -compelled every drygoods merchant in the U.S.A. to contribute six per -cent of his capital and surplus--with one-half immediately payable--to -set up a drygoods jobbing house in the center of a designated loot -area. They would have compelled every drygoods merchant to purchase -his merchandise from that jobbing house at their price. Isn't one -proposition as sane as the other? Of course it is. But there is -this difference. By commandeering capital for the drygoods business -licensed looters _could control only the drygoods business_. But -by commandeering capital for the banking business licensed looters -_could control all business_! That's the difference and that's all the -difference. They commandeered capital where it could _control not one -industry but all industries_. They didn't commandeer a leg or an arm -of industry but they did commandeer _the life blood of all industry_ -and at one leap vaulted into a seat of power where their scepter's sway -really governed all American industry. That's what they really did. - -What price did Federal Reserve lootage pay for this commandeered -capital? It limited the dividends to be paid to these sandbagged -stockholders to six per cent per annum. No matter how fabulous might -be--and really have been--the profits of Federal Reserve pillage the -people who provided its life blood of capital must be content with a -paltry six per cent dividend! Over a long term of years the net profits -of the National Banks of the U.S.A. have averaged slightly over 12 per -cent per annum. But Federal Reserve lootage says: "We will pay you but -one half what your capital has been earning." Some gall? It was the -absolute acme of refrigerated nerve! No matter what Federal Reserve -Shylockery might make on this commandeered capital the people who -provided it--whose money it really was--could get but a paltry six per -cent. - -But one fact or series of facts is worth more than pages of language. -So right here and now look at the actual results for the year 1920. -Here is a list of Federal Reserve profits and pillage for that year: - - Per cent Net Sandbaggery - Location[1] Capital on Capital Per Cent - New York $24,618,000 217 211 - Chicago 13,213,000 195 189 - Atlanta 3,759,000 162 156 - San Francisco 6,412,000 159 153 - Boston 7,454,000 137 131 - Minneapolis 3,265,000 131 125 - Kansas City 4,295,000 129 123 - St. Louis 4,229,000 124 118 - Cleveland 10,070,000 119 113 - Philadelphia 8,278,000 116 110 - Richmond 4,884,000 110 104 - Dallas 3,757,000 89 83 - -Take all of your reading, take all of the history of banking or of -finance since banks were first founded and see if you can approximate -any such leviathan Shylockery. The stockholders in National Banks who -provided the capital for this orgy of profiteering were gyped out of -all the way from 211 per cent in the New York satrapy to 83 per cent -in the Dallas satrapy. For the year 1920 all over the U.S.A. on the -average Federal Reserve lootage took away from the real providers of -its capital--the stockholders in National Banks--better than 154 per -cent on the money they provided! - -These records are taken from the accounts of its own pillage rendered -by the Federal Reserve System itself. - -You could be quite some banker yourself, you could orate and strut -and preen and propagandize, you could swell out your pouter pigeon -breast at stage-managed banquets and be a prince of high finance with a -limitless expense account and with an altitudinous salary--if you could -commandeer your neighbor's money at 6 per cent and then sandbag out -from 211 to 83 per cent profit on it, couldn't you? - -Legal? Of course it's quasi-legal and that's the infamy of it. A -coterie of the most astute lobbyists who ever enchained a people's -industry log-rolled through a piece of legislation whereby they -commandeered for their capital the people's money at a petty 6 per -cent and in the year 1920 alone pouched on it a profit varying from 211 -to 83 per cent! That's the record and those are the facts--hidden and -concealed from you and draped in a mantle of silence. Federal Reserve -lootage, Federal Reserve propaganda, Federal Reserve publicity--all -paid for from your money--is too astute to "toot" anent this legalized -sandbaggery. Do you, the stockholders in the eight thousand and odd -National Banks in the U.S.A., know of any reason why you should provide -at 6 per cent the capital for Federal Reserve lootage on which it made -in one year alone from 217 to 89 per cent? That is, do you know of -any reason except your legal helplessness and the bottomless greed of -Federal Reserve sandbaggery? If the law--cleverly lobbied through your -Congress--didn't compel you to do it, would you do it? Would you of -your own free will provide capital at 6 per cent and be gypped out of -154 per cent? You know you wouldn't! Here is the core and center and -solar plexus of the whole Federal Reserve System--commandeer capital at -a petty six per cent and realize out of it profits that make Shylock -look like a philanthropist. Peg this in your brainery and look further. - -FOOTNOTES: - -[Footnote 1: The average paid in capital for 1920 was $94,234,000 and -total net earnings were $151,408,031. This is 160.7% profit and so -stated on pages 153 and 154 of Federal Reserve Bulletin of February, -1921. When the net average of the individual banks are footed and -averaged the average is 140.9%. This discrepancy is for Federal -Reservists--not us--to explain.] - - - - -CHAPTER IV - -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 - ------------ - 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. - - - - -CHAPTER V - -CHECK COLLECTION BANDITRY - - -YOU have seen the birth of the monster; you have seen how it -conscripted its capital at a petty six per cent interest rate; you -have seen how it commandeered--at no interest rate--the mightiest mass -of deposits ever gathered together on earth and you have seen how it -did these things by its absolute control over the money and over the -destinies of the National Banks in the United States. It could and it -did and it does practically control their affairs. - -But it could not--except by intimidation, by oppression or by practical -banditry--control the State Banks of the United States. It could not -legislate them into its sheep pen for shearing, but it could attempt -to intimidate, bulldoze and banditize them. This it attempted to do in -this wise: - -One of the chief specialties of this Federal Reserve System of -applied banditry is to attempt to force every bank in the United -States--whether a member of its Shylockery or not--to collect checks -for its benefit and advantage for nothing. In other words, where it -couldn't conscript nor commandeer--purely for its own sordid profit--it -proceeded to bulldoze. - -There are just two ways to collect money on checks, one by presenting -them at the counter of the bank on which they are drawn and getting the -cash and the other by sending them through the mail for remittance by -draft drawn on some large city depository. The latter method obtains in -99 per cent of the hundreds of millions of checks drawn. The bank upon -which the check is drawn makes a small charge of one tenth of one per -cent to compensate for clerk hire, postage, stationery and the like. It -is a perfectly legitimate charge in vogue and practiced for generations -in banking circles. But the Federal Reserve System, with its customary -greed, insists upon sandbagging this service for nothing. This arrogant -rule--purely for its own sordid profit--it could and did and does -enforce against its conscripted and commandeered National Banks. But -State Banks--not wearing the Federal Reserve yoke of bondage--were at -liberty to make the usual collection charge of one tenth of one per -cent. Thereupon the Federal Reserve System had a series of fits and -fell into them. From an enormous number of its banditries three typical -ones are selected for your observation--merely straws showing whence -blow the most arrogant winds of oppression. - -First take a look at the Cones State Bank of Pierce, Nebraska. "I -don't want a smug lot of experts to sit down behind closed doors in -Washington and play Providence to me." That is what President Wilson -said--on page 60 of his book, "The New Freedom"--before he, himself, -was sitting tight "behind closed doors in Washington." - -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. First, read the subjoined affidavit -about "hard boiled and armed" Federal Reserve Bank agents and then our -comments on the whole proposition. - - "In the Superior Court of Fulton County, Georgia. - - AMERICAN BANK & TRUST CO., et al. - vs. - FEDERAL RESERVE BANK, et al. - - THE STATE OF NEBRASKA } SS. - PIERCE COUNTY } - - "Personally appeared before the undersigned attesting officer, Wood - Cones, who makes this affidavit to be used as evidence in the above - stated case and who being first duly sworn deposes and says: - - "That I am, and for many years have been, the president of the Cones - State Bank of Pierce, Nebraska, and as such officer of said bank, - I was interviewed some time last September by a Mr. Jones, claiming - to represent the Omaha branch of the Federal Reserve Bank of Kansas - City, Missouri. I was urged by him to join the system. I refused and - was then asked to sign a card agreeing that my bank would remit all - items at par sent us by mail by the Federal Reserve Bank. I refused - to sign and was told that I would be compelled to at an early date, - as there was no limit to the power of the Federal Reserve Bank. - - "Early in October of the same year, the local express agent presented - quite a number of checks on our bank from the Federal Reserve Bank - and we gave him a draft for the full amount payable to the Federal - Reserve Bank. A short time after, another bunch of checks of the same - kind came in the same way but the express agent was instructed to - collect in cash. I offered him silver dollars for the checks and he - said he did not have time to count it and accepted an Omaha draft for - the face of the checks. - - "Following this, W.S. Lower, claiming to represent the Omaha branch, - came with some checks and demanded legal tender in payment. We - offered him a draft payable to the Federal Reserve Bank but refused - to pay him the currency without better identification than was - produced by him. After considerable loud talk and threat to protest - the checks he accepted a draft. Shortly after this Mr. Lower came - again, properly identified, and demanded cash on checks he had and we - refused payment on account of improper and insufficient endorsement. - He stormed around for a day and finally accepted a draft payable to - the Federal Reserve Bank. - - "November 14, 1919, a high powered auto containing four people, drove - into Pierce and stopped in front of the Bank, but the engine kept - running. Two men, W. S. Lower and M.L. Bishop, got out of the car, - armed with revolvers and entered our bank. As agents of the Federal - Reserve Bank, they demanded the currency on checks drawn against the - Cones State Bank of Pierce, Nebraska, of the aggregate face value of - $31,900, some of which had been held for over three weeks. While one - of our Bank force was counting out the money (about $13,000 more than - we are legally required to carry in our vault) to Mr. Bishop, Mr. - Lower told us that Bishop was a United States marshal, hard boiled - and armed, and that he had cleaned up the State of Kansas and would - get us anyway, so we had better sign up the agreement and keep our - money. - - "Bishop said that a banker in Kansas who had the only bank in the - town, held out against parring, and that he told him they would start - a National Bank and drive him out of business, and that he personally - was instrumental in starting the National Bank and said he would - stick to it until he drove the Kansas bank out entirely. - - "Mr. Jones and a Mr. Davis came along later and claimed they were - peacemakers direct from the Federal Reserve Bank of Kansas City. Said - that Lower and Bishop were ---- fools and had done entirely wrong - at Pierce and advised us to forget what Lower and Bishop had done - and sign up as the day was near when we would be forced. They took - a draft for the checks they had and departed saying that they had - enough of this ---- business. - - "Subsequently checks were sent through the Express Company and - returned by the express agent for the reason as I said that he didn't - have time to count the money. - - "Along about the 27th day of December, 1919, a Mr. Farley came to - Pierce from Kansas City and asked us to sign the paper relative to - parring checks or join the Federal Reserve System. We refused. He - then stated that he was instructed to stay in Pierce until he had - accomplished something. From that date until the day of making this - affidavit Mr. Farley has been here continuously and collects cash - every day on checks sent him by the Federal Reserve Bank. - - "On January 5, 1920, a Mr. J.G. Bryan came in from Kansas City and he - and Mr. Farley have been instrumental in trying to start a National - Bank at Pierce, devoting practically their entire time collecting - cash on checks sent by the Federal Reserve Bank upon banks in Pierce - and promoting a National Bank that they will compel the banks of - Pierce to join the system. Our customers report to us that these men - have told them that we are robbing them out of ten cents on every - hundred dollars of their money. - - "On or before the 14th day of January, 1920, Mr. Jones joined Mr. - Farley and Mr. Bryan and has acted as Notary Public, protesting - checks presented by the aforesaid agents of the Federal Reserve Bank - of Kansas City, notwithstanding such checks were endorsed on the - face 'not payable through the Federal Reserve Bank, their branches - or agents, nor Express Company nor Postoffice' and are continuing to - protest such checks when we refuse payment of them in their hands and - in one case have presented a check a second time and protested it - each time. - - "Every agent of the Federal Reserve Bank that has been here has - advised us in substance that they were spending the Government's - money like drunken sailors and will not stop at any expense to force - us to join the system. - - "One of my competitors told me that Mr. Davis told him in substance - that the Federal Reserve Board had a steam roller on the way from - Washington to crush me personally and ruin my bank if I persisted - in refusal to comply with their demands. I subsequently called Mr. - Davis' attention to this report and he personally acknowledged to me - that he had made such a statement in substance. - - (Signed) "Wood Cones. - - "Sworn to and subscribed before me this 10th day of February, 1920. - - (Signed) "Douglas Cones. - - "Notary Public in and for Pierce County, Nebraska. - - "My commission expires September 25, 1925." - -The Cones State Bank couldn't be bulldozed, banditized by gun play -nor coerced into the Federal Reserve slaughter pen. When the Federal -Reserve System grabbed Wood Cones it grabbed a hot wire which it -finally dropped, nursing its badly burnt paws! - -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 -$50 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 $102,000 in checks. -Counting his salary, expenses, expressage of currency and the like, it -must have cost it at least $4,000. It could have had precisely the same -service for one tenth of one per cent or just $102. - -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 (right) 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." - - - - -CHAPTER VI - -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. - - - - -CHAPTER VII - -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 $100,000,000 -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 $1,800,000,000 conscripted at no per cent interest as reserve -deposits from the member banks. 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! - -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 $100,000 -at three-tenths of one per cent interest! Then figure what it means to -them to have the use of 20,000 times $100,000 at three-tenths of one -per cent interest. Gives you an attack of vertigo, doesn't it? - -Member banks and their stockholders and depositors furnish this titanic -amount of practically $2,000,000,000 at three-tenths of one per cent -interest and then member banks are graciously permitted to borrow from -the Federal Reserve System _their own money_ at rates varying from -_six to eighty-seven and one-half per cent per annum_. Impossible, you -say? Not even organized Federal Reserve banditry, not even Amalgamated -Shylockery, would have the supernal gall to so sandbag productive -industry? - -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 $25,000 and its surplus was $12,500. 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. - -This little National Bank in Alabama was in the grip of the Federal -Reserve Octopus. It had to move the cotton crop in its territory. -Farmers, planters, merchants--and in short, all industry in its -territory including its own salvation--depended on the moving and on -the marketing of the cotton crop. It was "root hog or die" and this -little bank rooted and was looted precisely in this wise: It had to -borrow from the Federal Reserve Super-Shylockery at Atlanta. It had no -other house of refuge. It had to borrow something over $100,000 from -the Federal Reserve Bank at Atlanta and for the week's period ending -on July 31, 1920, it was charged and it paid as high as _thirty-one per -cent per annum interest_! Two months later when its loan reached as -high as $115,000 it was charged and it paid as high as _eighty-seven -and one-half per cent per annum interest_ to this subter-human -super-Shylock. For the two weeks ending on September 30, 1920, it was -borrowing an average of $115,211. Two weeks' interest at six per cent -would have been $288, but the records show that this little bank paid -the Federal Reserve Pawnbrokery at Atlanta for interest on that amount -for that time $2,189--running all the way from six to _eighty-seven and -one-half per cent per annum_! The actual average time for this loan for -that two weeks' period was almost exactly at the rate of _forty-five -per cent per annum_, or at the rate of $51,884 per year for the use -of $115,211! In about nine months that loan of $115,211 at that rate -would have eaten up the capital and surplus of that little Alabama -National Bank. Was that banking or was it putrid pawnbrokery? Oughtn't -the Federal Reserve Bank at Atlanta to put the three ball sign of -pawnbrokery over its portals? - -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. - -When a bank has to pay up to _eighty-seven and a half per cent_ -interest you can imagine what its customers must pay it. - -And at the very time--during these very two weeks ending September -30, 1920--when this little Alabama National Bank right at the door of -real production was being charged those Shylock rates for a paltry -loan, banks in New York were getting as high as $100,000,000 handed -out to them at from _five to seven per cent_. And yet you read about -the Federal Reserve System "equalizing interest rates," "emancipating -credit" and the like bunk! Why, it's enough to make Shylock and -Pecksniff rend their cerements and jump from their graves and have -another try at extortion and at applied hypocrisy. A difference of -_eighty per cent per annum_ between New York City--where nothing but -parasitism is grown--and Alabama--where real wealth of real cotton -grows--is some difference, isn't it? And the eighty per cent difference -coddles parasitism and penalizes production. This isn't the only -sandbaggery of extortion perpetrated by the Federal Reserve oligarchy. -But it's a pretty good example, isn't it? - -Now take a look at the twelve regional pawnbrokeries for the year 1921 -in the order of their pillagements. Here they are: - - Location Paid in Capital Net Earnings - Atlanta $4,189,500 131.18% - Chicago 14,307,000 101.31% - New York 27,114,000 96.23% - Minneapolis 3,569,000 88.21% - Richmond 5,428,500 80.94% - Kansas City 4,570,500 66.86% - San Francisco 7,374,500 66.72% - St. Louis 4,603,000 64.13% - Philadelphia 8,736,500 61.11% - Cleveland 11,134,000 56.44% - Boston 7,935,500 53.94% - Dallas 4,203,000 38.40% - ------------ ------ - Total Capital $103,165,000 Average 79.56% - -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 $4,189,500, it vampired and blood-sucked out a -net profit of $5,496,000, 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 -$36,066,065, or an average of $3,005,083 for each regional pawnbrokery. -The most reckless expense squandermaniac was the New York sandbaggery -with an expense account of $8,167,780, and the most economical was -the Minneapolis satrapy with an expense account of $1,325,867. 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: - - Surplus - Location Paid in Capital Percentage - New York $27,114,000 222 - Atlanta 4,189,500 217.6 - Kansas City 4,570,500 211 - Minneapolis 3,569,000 209.2 - Boston 7,935,500 207.8 - San Francisco 7,374,500 206.2 - Philadelphia 8,736,500 205.4 - St. Louis 4,603,000 204 - Cleveland 11,134,000 203.2 - Richmond 5,428,500 203.2 - Chicago 14,307,000 202.8 - Dallas 4,203,000 176 - ------------- ------- - Total $103,165,000 Average 209 - -Upon this capital (commandeered at a petty 6 per cent) and from its -gigantic deposits (conscripted at no per cent) this super-vampire -Federal Reserve System has in a few brief years--after paying -stupendously extravagant expense accounts--piled up an accumulated -pillage of $215,523,000. 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 $42,231,240 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. - - - - -CHAPTER VIII - -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 $88,000,000 -and had "bought paper" to a total of $16,000,000--and that included -some $10,000,000 which it was loaning to other Federal Reserve -Banks, principally in the North for speculative loans. Mark that -down--$94,000,000 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 $80,000,000 -and had $31,000,000 of bought paper--including $20,000,000 taken from -other Federal Reserve Banks. Mark that down--$91,000,000 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 $88,000,000 and had $17,000,000 of bought -paper. Mark that down--$105,000,000 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 $57,000,000 and had $6,000,000 of bought paper. Mark -that down--$63,000,000 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 -$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 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 $100,000,000 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 $51,068,000--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 $134,000,000 from the Federal Reserve Bank in -New York, or $20,000,000 more than the Federal Reserve Bank of Kansas -City was lending to the 1,091 member banks in the Tenth Federal Reserve -District. - -Another speculative bank in New York borrowed from the Federal Reserve -Bank in New York $40,000,000 more than the Federal Reserve Bank in -Minneapolis was lending to its 1,000 member banks in Minnesota, North -Dakota, South Dakota, Montana and part of Wisconsin. - -Another speculative bank in New York borrowed from the New York Federal -Reserve Bank $30,000,000 more than the Federal Reserve Bank of Dallas -was lending all its member banks in all its huge territory. - -Another speculative bank in New York borrowed from the New York Federal -Reserve Bank $20,000,000 more than the Federal Reserve Bank of Richmond -was lending to all its member banks in the Fifth Federal Reserve -District. - -Massing these gigantic figures in another form, the fact is that at -the time four speculative banks in New York were borrowing from the -New York Federal Reserve Bank an average of $118,000,000 apiece--or -practically as much money as the Federal Reserve Banks of St. Louis, -Kansas City, Minneapolis, Dallas and Richmond were lending more than -4,000 member banks in 21 states comprising more than half the entire -area of the United States! - -If this isn't coddling parasitism and penalizing production, you find a -name for it! - -Millions by the hundreds for parasitical speculation, for the pounding -down of prices in "short" markets in a "bear" campaign waged against -real values and millions by the paltry tens only for the real producers -of real wealth! If these actual figures don't batter down the "prop" of -Federal Reserve propaganda about "furthering agricultural interests," -nothing will. "Furthering agricultural interests" with a bludgeon! -"Equalizing credits" with a meter of equality so stretched as to enwrap -parasitism! If these actual figures don't convict Federal Reserve -Oligarchy of the height of Pecksniffian hypocrisy it's convict-proof! -Look over--and don't overlook--these figures. You can't consider them -in cold blood without irresistibly concluding that Federal Reserve -Oligarchy pampers parasitism, penalizes production and bestrews its -gigantic resources by favoritism instead of by merit. It is obsessed -by a squandermaniac prodigality for speculation and by a niggardly -parsimony for real production of real wealth. It exalts the tokens of -wealth and the jugglers of it far, far above its real producers. It -reaches out almost limitless largess to the pinnacles of parasitism -while practically starving the real makers of real wealth on whose -shoulders parasitism gaily rides. It shovels out hundreds of millions -for speculation and serves with an eye-dropper tens of millions for -production. It's unfair, unjust, inequitable and Janus-faced. It -mumbles and mutters and chitters and chatters and propagandizes about -"equalizing credits" and "emancipating credit," while in truth and -in fact it is grossly discriminating in its credits and instead of -"emancipating" credit enchains it to the golden chariot of speculative -splendors! That's what it really does and that's the true tale of its -Partiality of Pillage. - - - - -CHAPTER IX - -THE TRAGEDY OF DRASTIC DEFLATION - - -YOUR money masters, the Federal Reserve Board at Washington and the -twelve tentacular Federal Reserve Banks in their regional satrapies, -staged in 1920 the greatest financial debacle in human history. -They were, and they are, as much your money masters, as was ever a -slave-holder the master of his human chattel. Your labor and the -produce of your labor--in whatever capacity you worked--were, and are -today, as completely under their control as was ever the labor and -the production of the labor of slavery before Lincoln's Emancipation -Proclamation chiseled chains. So long as you exist in the U.S.A. and -the Federal Reserve System exists, the lash of these money masters will -writhe over your back and you must cringe under its sting. Make no -mistake about that. No sceptered king nor bedizened kaiser ever wielded -a tithe of the power which rests in the cunning brains and in the -ruthless edicts of these money masters. - -Here are the facts. Read first these quotations from their own lips and -from their own pens which prove that these Federal Reserve oligarchs -deliberately staged the greatest financial debacle in all human -history. Nothing in human history approaches it for cold-blooded, -wanton, ruthless slaughter of values. - -"Credit must be brought under effective control." - -"The Board (meaning the Federal Reserve Board) will not hesitate to use -every statutory power to regulate currency and credits." - -"Our present task therefore is to proceed with the deflation of credits -as rapidly and as systematically as possible." - -If for "deflation" you read "destruction" you get the real intent and -the real meaning of these ichor-veined assassinators of real values. -Don't let these word jugglers and these money jugglers confuse you with -their lacquered language. When they say "inflation" what they really -mean is increase of values and when they say "deflation" what they -really mean is destruction of values. - -The tragedy was staged in 1920--about fourteen months after the World -War was closed--but it didn't get going good and strong until the -summer and fall of 1920. After the summer had arrived, after grain and -cotton were in the ground, after cattle and sheep were on the ranges, -after merchants' stocks were on the shelves, after factories had -run at full capacity and after all producers and merchandisers were -hopelessly committed and couldn't retrace their footsteps, the lash -fell. Or to change the figure the trap wasn't sprung until every foot -was within its iron ring. - -The first proof of a murder is the corpse and here are the corpses of -murdered values just as they were struck down by the Federal Reserve -bludgeon. Look at them. - - New Orleans - 1920 No. 3. Chicago Corn Middling Cotton - January 1.47 .40 - May 1.98 .40 - June 1.83 .40 - July 1.53 .39 - August 1.53 .33 - September 1.29 .27 - October .87 .20 - November .80 .17 - December .73 .14 - 1921 - January .65 .14 - February .63 .13 - March .61 .11 - April .55 .11 - May .60 .11 - June .60 .11 - July .60 .11 - August .55 .12 - -Here you get from January, 1920, to August, 1921, when these value -assassinations culminated, a corn debacle of 92 cents a bushel and a -cotton debacle of 28 cents a pound. If you had known that this value -assassination was en route and had "gone short" 1,000,000 bushels of -corn you could have robbed the corn growers of this land of $920,000, -couldn't you? And some "high financiers" did that very thing. If you -had known that cotton was going to shrink at least 28 cents a pound and -had "gone short" 10,000 bales (500 pounds to the bale) you could have -robbed the cotton growers of this land of $1,400,000, couldn't you? And -some high financiers did. - -Take a look at some more value murders. - - Wheat No. 2 - Red Winter Wool - 1920 Chicago Ohio Grades - January 2.63 1.23 - May 2.97 1.16 - June 2.89 1.00 - July 2.80 .90 - August 2.47 .87 - September 2.40 .83 - October 2.20 .72 - November 2.05 .69 - December 2.01 .54 - 1921 - January 1.96 .54 - February 1.91 .54 - March 1.67 .52 - April 1.38 .52 - May 1.56 .50 - June 1.43 .49 - July 1.22 .49 - August 1.23 .49 - -A destruction of $1.40 a bushel on wheat and of 74 cents a pound on -wool ought to satisfy the most murderous destructionist of values, -oughtn't it? You can make your own computations as to the millions -coteries of "bears" could make--and doubtless did make--out of these -value assassinations. - -Have some more views of values on the toboggan. - - Penn. - 1920 Steers at Chicago Crude Oil - January 15.93 5.06 - May 12.60 6.10 - June 15.03 6.10 - July 15.38 6.10 - August 15.35 6.10 - September 15.25 6.10 - October 14.68 6.10 - November 14.57 6.10 - December 12.09 6.10 - 1921 - January 9.84 5.79 - February 9.31 4.18 - March 9.56 3.00 - April 8.71 3.18 - May 8.42 3.35 - June 8.09 2.65 - July 8.40 2.25 - August 8.77 2.25 - -When you grease the toboggan with $2.81 a barrel on oil and $7.16 a -hundred on steers you can slide a good many millions of dollars into -the maws of foresighted "short sellers," can't you? - -This panorama of value murders could be continued for pages of tables. -They all tell the same story. Granulated sugar dropped in the same time -from .15 cents a pound to .05 cents a pound; copper ingots from .19 -cents a pound to .11 cents a pound; cotton yarn from 72 cents a pound -to 25 cents a pound; pig iron from $37.75 per ton to $18.20 per ton; -hides from 40 cents a pound to 14 cents a pound and so on down the line. - -These are the corpses strewn all along America's highways of -production. What was the bludgeon which hit all these commodities on -the head and drove them into the pit of loss? It was the persistent, -wanton, ruthless and cold-blooded calling of loans and refusal of bank -credits and contraction of currency by Federal Reserve oligarchy. They -said they'd do it and they did it--aplenty. Here is the bludgeon, look -at it. - -Their total of all loans and discounts including "bought paper" in -all of the twelve Federal Reserve Shylockeries stood around from -$2,700,000,000 to $3,000,000,000 from January to October, 1920, when -the bludgeon pounded hard. Here is the bludgeon. Look at it in action. - - 1920 - October $3,099,672,000 - November 2,983,103,000 - December 2,974,836,000 - 1921 - January 2,622,174,000 - February 2,500,013,000 - March 2,356,160,000 - April 2,180,178,000 - May 1,995,051,000 - June 1,782,951,000 - July 1,661,036,000 - August 1,527,255,000 - -And from May 28, 1920, to January 25, 1922--when the slaughtered -were piled the highest--the twelve Federal Reserve Shylockeries -hammered and battered down their bank credits in the leviathan sum -of $2,005,149,000, or from $2,938,031,000 to $932,000,000! And -incidentally the circulation of Federal Reserve notes contracted in the -same period by the stupendous sum of $923,020,000! So that from May 28, -1920, to January 25, 1922, the Federal Reserve oligarchy--at their will -or at their whim or for hidden purposes--contracted bank credits and -currency by the titanic total of $2,928,169,000, almost $3,000,000,000, -almost 3,000 million dollars. That was the pile driver battering your -values down into the mire of loss. - -Take now a look at the financial corpses so slaughtered. Here they are. -Look 'em over and don't overlook the hands that killed them. - -In 1921 there were 19,625 business failures as compared with 6,451 -in 1919, or an increase of 13,174--more than three for one. And the -liabilities reached the stupendous total of $627,401,000, an increase -of $514,000,000 over 1919, more than five for one. In the so-called -panic year of 1907, the high tide of business failures, liabilities -were only $197,000,000, as against $627,000,000 in 1921. Why, if 1907 -was a "panic year," 1921 was a pandemic year! - -And here is another destruction meter, absolutely infallible--the -suicides. In the first six months of 1921 there were 4,527 men -suicides, as against 1,810 for the same period in 1920; 1,982 women as -against 961; 214 boys as against 88 and 293 girls as against 137--7,016 -suicides for the first six months of 1921 as against 2,996 for the -same period of 1920. The enormous increase in men suicides--over two -and one-half for one--tells its own story. They came from all classes, -bankers, merchants, farmers, laborers and professional men. None know -how many of this enormous increase, the largest since statistics have -been kept, were driven to desperation and to death from hunger, from -unemployment, from the loss of life's toil or from the failure of -enterprises in which they had spent their lives. No statistics can -summarize human emotions, but they can tell and they do tell of the -greatest holocaust of suicides ever ravaging this land--undoubtedly -due to industrial tragedies staged by the cold blooded butchery of -production. This much is certain. Never before in a given time in this -land has there been such a holocaust of failures, of suicides and of -unemployment. Never before in this land were such sacrifices laid on -the twin altars of Moloch and of Mammon. And they precisely correspond -in time with the Tragedy of Drastic Deflation! - -During all this time and particularly beginning with the late summer -and early fall of 1920, individuals, associations, committees -and organizations representing farmers, planters, cattlemen, -manufacturers, bankers and merchants--in short, representatives of -all industries--were entreating and beseeching Governor Harding of -the Federal Reserve Board and his associates to be more mild and more -lenient and more reasonable in their drastic tragedy of destruction. -They might as well have besought a cyclone or entreated a tornado or -prayed to an earthquake. Cold-bloodedly, relentlessly and wantonly -loans were called, extensions were refused, renewals were tabooed and -bank credit put on the chopping block. The very people whose toil and -whose labor and whose real wealth were building the magnificent palaces -wherein these Shylockeries were housed and were paying the exorbitant -salaries of these money despots were being ruined by their servants! -The Federal Reserve System at that very time had a loaning ability -of over $2,000,000,000 more than it then used and not only wouldn't -use it, but contracted its loans by $2,005,149,000 and currency by -over $932,000,000. Instead of aiding production, it throttled it. And -instead of aiding the producers of commodities to carry them it forced -producers to market them at most ruinous losses! Instead of dropping -the curtain on this Tragedy of Drastic Destruction, it ran it to its -close! It staged the greatest debacle of blasted credit, number of -failures, magnitude of liabilities, suicides and unemployment ever -witnessed in this land. It did it deliberately, ruthlessly and as per -program too. - -Go back over these figures, all taken from official records--all -undenied and undeniable--and ask yourself if ever before in human -history the industries and credit of a successful nation and -successful in the greatest War ever waged, too, were so butchered? -These figures indict and convict the Federal Reserve System, as it -has been maladministered, as the arch betrayer of a people's trust. -It indicts and convicts them as juggling with the symbols of value -to the destruction of real values. No sane man can read this record, -frozen into Government statistics, and defend the oligarchs who made -it. It never was "deflation." That is just a sonorous euphemism to -disguise sandbaggery. It was destruction to scores of thousands and to -hundreds of thousands of the real producers of real wealth. Billions -of dollars of real values were annihilated, not by the trend of the -markets, but by artificial "bear" markets artificially created by the -throttling of credit. You can't withdraw literally billions of credit -and currency--almost three billions of them--the very life-blood of -commerce from industry and have it thrive any more than you can tap a -man's jugular vein and have him live! That's what really happened in -this Tragedy of Drastic Destruction. - -And upon whom did this Tragedy bear the hardest? Upon those least able -to endure its fearful pressure--the farmers. Bear in mind that farming -is not only the largest industry in the U.S.A., but it is the only -absolutely basic industry--the keystone upon which rests the entire -industrial superstructure. - -Here is what this Tragedy of Drastic Deflation did to the farmer as -measured for the years of 1919, 1920 and 1921. - - Value in 1919 $13,500,000,000 - Value in 1920 9,000,000,000 - Value in 1921 5,675,000,000 - -In each of these years there was practically the same acreage under -cultivation, 350,000,000 acres. In 1919, farm products were worth -$39 per acre, in 1920, $26 per acre and in 1921, $16 per acre. Here -is where the Federal Reserve credit crusher pulpified the finest--at -the very foundation of all industry! The production of these basic -farm products--the real foundation of all this Federal Reserve -splendor--was practically the same in volume for these three years, -but the Federal Reserve credit crusher crushed it from $39 to $26 to -$16 per acre measured by its purchasing value! That's the Tragedy of -Drastic Deflation in its final analysis battering down the money value -of America's basic industry almost two-thirds! But the profits of the -Federal Reserve System--and its exorbitant expense account and its -lavish salary rolls--kept off the toboggan down which slid all the -others! - - - - -CHAPTER X - -THE PALACES OF THE MONSTER - - -FEDERAL Reserve Oligarchy houses itself most palatially. There is -nothing in Government annals or in corporate prodigality private or -public to anywhere approximate the absolute squandermania of Federal -Reserve obsession for luxurious quarters. - -If you want in your city a Post Office Building, a Federal Court -Building or a Custom House Building you must lobby and beseech and -petition and "trade" and pull wires in Congress until you do--or -don't--get it. But it's different with Federal Reserve satraps. 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. And not only that, but the speed with which enormous -sums have been "charged off" from building accounts is absolutely -appalling. Take a look at some of the items of this profligacy. - -The Philadelphia Federal Reserve Bank bought a building for $600,000 -and spent in "remodeling" it $1,099,638, making a total cost to -September 30, 1921, of $1,699,638, and then "charged off" to -"depreciation allowance" the enormous sum of $1,166,848! In other -words, after spending $1,099,638 in "remodeling" its building it -"charges off" for "depreciation" $1,166,848, or $67,210 more than it -cost to "remodel" it! So that after spending $1,099,638 on "remodeling" -the whole property is worth only $532,790, or $67,210 less than it -cost before "remodeling." Either Philadelphia real estate depreciates -with lightning-like rapidity or Federal Reserve judgment isn't worth -a picayune or this huge "charge out" for "depreciation" is a mere -camouflage or deception. Take your choice. It's either damphoolishness -or incompetency's height of deception. And that's all you can make it. - -The San Francisco Federal Reserve Bank spent originally in "original -investment" for a building $520,785, spent $232,895 for "remodeling," -spent $448,776 for "new building" operations, making a total cost -to September 30, 1921, of $1,202,456 and then "charged off" for -"depreciation allowance" $530,795, so that after spending $681,671 on -"remodeling" and new buildings on an original purchase of $520,785, -it emerges with a value of but $671,661! Or in other words, after -spending $681,671 on a $520,785 purchase it claims the gross value to -be but $671,661, or but $150,876 more than the original purchase! Or -in other words, it got but $150,876 of value for an expenditure of -$681,671! Does San Francisco real estate depreciate as fast as that, -or are Federal Reserve business oligarchs futile wastrels, or is this -method of accountancy just a camouflage? Figure it out for yourself. - -The St. Louis Federal Reserve Bank made an "original investment" -in building of $1,311,197, spent $560 on "remodeling" and "charged -off" $685,000 for "depreciation allowance," emerging with a value -of $626,575 for an expenditure of $1,311,757! Another case of swift -shrinkage in value or wastrelcy in expenditure or camouflage in -accountancy. Figure it to suit yourself. - -The New York Federal Reserve Bank paid $4,797,882 for its site, spent -up to September 30, 1921, $758,072 on building operations, making -a total expenditure of $5,555,954 and immediately charged off to -"depreciation" the enormous sum of $1,841,618! Did it pay too much for -its site or does real estate in the heart of the greatest city on earth -depreciate almost 40 per cent almost immediately after purchase? Figure -it for yourself. Later on reference will be made to this New York -oligarchical palace of splendor. - -Up to September 30, 1921, Federal Reserve satrapists had spent -$36,158,056 on its twelve building operations and had "charged off" -as "depreciation allowance" the gigantic sum of $6,684,213! In other -words, in a very few years, and in most cases practically at once, it -depreciated its own building accounts by about eighteen per cent! - -Incidentally up to the same date it had spent $3,212,349 on its Branch -Bank buildings and had depreciated them by $346,369. In its Helena -Branch it made an "original investment" of $15,000, blew in $161,438 -on the purchase and then "charged off" for "depreciation allowance" -$77,738 when it got through, or about 45 per cent on the whole -transaction. - -Up to September 30, 1921, Federal Reservists, including branch banks, -had "reserved" $39,370,405 of your money in building operations and -had them "depreciated" by the enormous sum of $7,030,582, or about -18 per cent, almost immediately. You are entitled to draw your own -conclusions as to the necessity for these palaces, for the splendor -of their equipment and for the real motive of so speedily "charging -off" such enormous sums for "depreciation allowance." You are entitled -to draw your own conclusions as to the wisdom of allowing a coterie -of bureaucrats to spend such huge sums for their personal comfort or -convenience or splendor unsupervised and unhindered. You are entitled -to ponder on the proposition that these huge expenditures aren't -obtained by legislation from Congress, but are made to suit the whim or -ambition or convenience or extravagant ideas of an appointive body. - -The New York Federal Reserve Bank in cost, in expenditure, in -equipment, in splendors purely for the convenience of its occupants -is intended to surpass any like building on earth. Its cost has been -estimated at from $17,000,000 to $20,000,000. Its corner stone--amid -speeches and plutocratic glorifications--was laid on May 31, 1922. The -fees of architects and engineers alone amounted to the stupendous sum -of $1,106,000. It is intended to house 5,000 employees--about 2,500 -more than it now has. - -Make right here some comparisons. - -In the first week of May, 1922, the loans and discounts of the New -York Federal Reserve Bank amounted to $89,956,248, and it must have a -$17,000,000 building and equipment to handle its activities. On the -same date the loans and discounts of the National City Bank of New York -amounted to $506,840,494, and its bank buildings to but $6,060,000. On -the same date the loans and discounts of the National Bank of Commerce -of New York amounted to $259,165,930, and its bank building to but -$4,000,000. Figure it for yourself. It makes some difference whose -money is being spent, doesn't it? Private business is one thing, and -public business is another thing, when it comes to housing it, isn't -it? Compare the volume of the loans of these banks, compare their -building costs and draw your own conclusions. - -In addition to veined marble and polished brass and in addition to a -mass of luxurious equipment the New York Federal Reserve Bank has, or -will have on completion, a beautiful auditorium, a gymnasium, a club -room for men, a club room for women, and a restaurant. - -It will doubtless gratify farmers on the prairies, workmen all over -the land, merchants, and manufacturers and professional men to know -that their toil, their efforts and their earnings are in effect being -levied upon to provide this modern palace equipped with an auditorium, -a gymnasium, two clubs and a restaurant. - -It will doubtless gratify the stockholders in National Banks, whose -money is commandeered to capitalize this leviathan, to know that -their money, or its proceeds, or its earnings, is being used to erect -and equip a veritable Temple of Mammon with all these attendant -luxuries--which they themselves cannot afford in their places of -business! - -If you, who read these lines, could commandeer over a hundred millions -of dollars for capital at 6 per cent and could conscript over -$1,800,000,000 of deposits at no per cent you could transact your -business in a palace in the heart of New York with an auditorium and -club rooms and a gymnasium and a restaurant, couldn't you? But as you -can't commandeer your neighbor's capital nor conscript for nothing the -deposits of the public, you find yourselves compelled to work and to -provide the wherewithal for those who can! - -You can measure these lavish expenditures for buildings and equipments -and luxuries by any known measure, by volume of business, or by like -buildings for like purposes and it is as clear as day that these -Federal Reserve Palaces are a monument of needless extravagance and -of wanton wastage--pulled off by the ukase of enthroned bureaucracy -spending "other people's money!" That's all you can make of the -Monster's Palaces. - - - - -CHAPTER XI - -THE MONSTER'S EXPENSES - - -YOU are going now to look over--and not overlook--the most stupendous, -wasteful and exorbitant bank expense account ever entered on bank -ledgers on this earth. You are going to look at the details of an -expense account where the items run by millions, where expenses have -no legal limit and where they are incurred, paid and audited without -any supervisory authority. You are going to gaze at an expense account -where the "sky is the limit." - -Take first a look at the New York Federal Reserve Bank's expense -account. That one is the most arrogant, wasteful and prodigal of all -the twelve regional satrapies. - -In 1917 the entire salary and wages account of the New York Federal -Reserve Bank was $970,580 and their total loans and discounts were -$399,078,000. Mark that down--salaries and wages of $970,580 and -loans and discounts (which really measure the business of a bank) of -$399,078,000, or $1 of expense to every $413 of loans and discounts. - -On January 25, 1922, the salary and wages account of the New York -Federal Reserve Bank was $4,988,703, with loans and discounts of -$146,526,938, or $1 of expense to every $29 of loans and discounts! - -Ask any practical banker, any administrative business man, any expert -accountant or any efficient expert if it is possible to justify any -such expense ratio. One to four hundred and thirteen in 1917 and one to -twenty-nine in 1921--fourteen to one raise! - -In 1917 there were 12 officers of that bank to administer loans of -$399,078,000. In 1921 there were 40 officers of that bank to administer -loans of $146,526,938. In other words, you get 28 more officers to -administer a business shrunken down over sixty per cent! In other -words, you get over a two hundred per cent increase in officers to -administer a sixty per cent business shrinkage! - -And now incidentally the pay of those 40 officers--administering a -sixty per cent shrunken business--amounted to more money than the -salaries of the President of the United States, the Vice President of -the United States, half the United States Senate and the Governors of -twelve American States besides! If that isn't bottomless bureaucratic -greed expressed mathematically, you express it yourself! - -Look further into the depths of this golden pool of New York Federal -Reserve expense plunderbund. You are helping pay it and you are -entitled to scrutinize the salary items. Take 'em as they come. - -J. Crane entered the bank at a yearly salary of $1,080 as manager -foreign department and now receives a yearly salary of $7,500, or an -increase of 594 per cent. - -A.J. Lins, manager at large, entered the bank at a yearly salary of -$1,500 and now receives a yearly salary of $10,000 or an increase of -566 per cent. - -John Raasch, manager supply department, entered the bank at a yearly -salary of $1,000 and now receives a yearly salary of $6,000, or an -increase of 500 per cent. - -E.R. Kenzel, deputy governor, entered the bank at a yearly salary of -$4,200 and now receives a yearly salary of $22,000, or an increase of -423 per cent. - -A.W. Gilbart, controller of administrations, entered the bank at a -yearly salary of $2,400 and now receives a yearly salary of $12,500, or -an increase of 420 per cent. - -L.R. Rounds, controller of accounts, entered the bank at a yearly -salary of $2,400 and now receives a salary of $12,500, an increase of -420 per cent. - -Chas. H. Coe, manager of the check department, entered the bank at a -yearly salary of $1,500 and now receives a yearly salary of $7,200, an -increase of 380 per cent. - -W.B. Matteson entered the bank at a yearly salary of $2,400 and now -receives $10,000, an increase of 316 per cent. - -J.D. Higgins, controller of cash, entered the bank at a yearly salary -of $3,000 and now receives a yearly salary of $12,000, an increase of -300 per cent. - -S.S. Vansant, manager discount department, entered the bank at a -yearly salary of $1,500 and now receives a yearly salary of $5,000, an -increase of 233 per cent. - -R.M. Gidney, controller at large, entered the bank at a yearly salary -of $4,000 and now receives a yearly salary of $15,000, or an increase -of 275 per cent. - -I.W. Waters, manager personal service department, entered the bank at a -yearly salary of $2,250 and now receives a yearly salary of $7,200, or -an increase of 220 per cent. - -James Rice, manager government bond department, entered the bank at a -yearly salary of $1,800 and now receives a yearly salary of $5,500, or -an increase of 205 per cent. - -L.H. Hendricks entered the bank on a yearly salary of $6,000 and now -receives a yearly salary of $18,000, or an increase of 200 per cent. - -Incidentally Benjamin Strong, the governor of the New York Federal -Reserve Bank, has had his salary increased from $30,000 per year to -$50,000 per year--more than six times the pay of a United States -Senator! - -Ask any corporate manager, any practical banker, or any efficiency -expert if they permit, or if they know of any such stupendous salary -increases--increased and maintained in a time of general disaster and -enforced economies. If this isn't strutting bureaucracy running amuck -with public money, what is it? - -Take now a look at the total expense account--which you are helping to -pay--of the Federal Reserve System for the year 1921. It amounted to -the stupendous sum of $36,066,065, or an average of $3,005,500 for each -one of the twelve regional satrapies! You can't measure it--because -there is nowhere on earth any other banking expense account by which to -measure it! Like an Andean peak it towers aloft in solitary splendor. -But you can look at some of the items. Here they are. The New York -Federal Reserve Bank heads the list of extravagance with an expense -account of $8,167,780, and the Minneapolis Federal Reserve Bank was the -most modest--and not any too modest at that--with an expense account -of $1,325,867. It cost you for bank officers' salaries $2,383,994, for -clerk hire $15,201,393, for special officers and watchmen $789,879 and -for "all other" $1,102,984. What that "all other" item of $1,102,984 -really is, is deep buried in Federal Reserve archives. When you get -through with bank officers, bank clerks, special officers and watchmen, -you would think that included about all possible bank employees, but -Federal Reserve ingenuity slips over $1,102,984 under the cloak of "all -other!" - -It cost you $7,750 for Federal Reserve Governors to "confer," $4,443 -for Federal Reserve Agents to "confer" and $10,522 for the Federal -Advisory Council--whatever that is--to "confer." "Conferences"--in -bureaucracy--come high, don't they? And it cost you $168,556 to hold -directors' meetings with 173 out of 254 of them living in the same town -where the bank or its branch is located. Traveling expenses cost you -$357,962--some travelers these Federal Reserve tourists are! - -These bureaucratic "expenses" of a parasitical system hooked on to -your banking system are stupendous, titanic, gigantic! They are -indefensible--and undefended too--from any possible standpoint of -efficiency, economy or necessity. Look them over in cold blood. -Look over the stupendous salary raises--both in amounts and in -percentages--in the New York Federal Reserve satrapy and compare -them with any private business on earth. Private stockholders--not -commandeered by law and not chained by act of Congress--would drive -out any such maladministration of extravagance. You know it. - -Who is responsible--directly, morally and legally responsible--for -this orgy of Federal Reserve extravagance absolutely unequaled in -the history of the world or in the history of banking? Why, the -Federal Reserve Board at Washington is responsible. What makes them -responsible? Here is the exact language. Read it. "Any compensation -that may be provided by Boards of Directors of Federal Reserve -Banks for directors, officers or employees shall be subject to the -approval of the Federal Reserve Board." That's plain, isn't it? If -the Federal Reserve Board at Washington doesn't "approve" these huge -compensations, they can not be paid. 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. At their -nod or at their beck every Federal Reserve employee holds his job, for -if they don't "approve" his "compensation" he can't attach his lips -to the public teat with its golden flow of "compensation!" It's the -Federal Reserve Board at Washington--unsupervised and with legally -limitless power--which is responsible for this Federal Reserve expense -orgy. - - - - -CHAPTER XII - -WHAT THE MONSTER DOES WITH ITS LOOT - - -THIS chapter is going to be like a tack--short but pointed. Federal -Reserve apologists--on and off the floor of Congress--when driven -into their last retreat always take their final stand and make their -last play in the "franchise tax" stronghold. Their assertion is -in effect that no matter what may be the abuses and sandbaggeries -and extravagances of this system the "big money" gets back to the -Government in the shape of the mythical "franchise tax." Here is where -you get the facts precisely as they are. What became of the lootage of -the Federal Reserve System for the year 1921 and what proportion of it -did your Government get? - -The gross takings of the Federal Reserve System--extracted from -American production and industry--amounted to $122,864,605. That's -what it euphoniously calls its "earnings." First there came out -the gigantic expense account, of which you have already read, of -$36,066,065, leaving $86,798,540, which the monster calls its "current -net earnings." There is then added to this $360,856, which in previous -years had been deducted for "depreciation on U.S. Bonds," which didn't -finally "depreciate." There is also added $131,536 under an "all other" -blanket--much favored in the Federal Reserve System vocabulary. You -now have $87,290,932 "current net earnings." From this are deducted -$1,251,675 for "depreciation allowance on bank premises;" $2,861,500 -for "reserve for possible losses" which probably won't occur; $400,000 -"reserve for self insurance"--whatever that is; $49,295 "reserve for -depreciation on U.S. Bonds"--which probably won't depreciate now that -they have been sandbagged out of the hands of the original purchasers; -$641,237 sandbagged out under the favorite "all other" Federal Reserve -blanket. Here are $5,203,707 gone out in mere bookkeeping entries -with the real money which these entries represent still in Federal -Reserve custody. This leaves $82,087,225. From this is deducted a petty -$6,119,673 dividends paid on the capital commandeered. From this is -deducted $15,993,086 to be added to the already swollen Federal Reserve -Surplus Account. And there is left just $59,974,466 for the much touted -franchise tax. - -If you have followed these figures you have seen that in order to -get a petty "franchise tax" of $59,974,466 into the hands of your -Government, it cost you just exactly $62,890,139 to collect it--the -precise difference between the Federal Reserve "earnings" and the -amount paid into the Government. Ask yourself, is a tax of $59,974,466, -which costs $62,896,139 to collect a "painless tax?" Is there any more -painful tax levied on American industry? That's what this ballyhooed -"franchise tax" amounted to in 1921 and all it amounted to--a tax of -$59,974,466, which cost $62,890,139 to collect! - - - - -CHAPTER XIII - -THE CAMOUFLAGE OF THE MONSTER - - -DON'T check your brains at the portals of the Federal Reserve "Bunking" -System. That is what its touters and ballyhooers want you to do. -Federal Reserve bureaucrats and its beneficiaries and its hirelings and -an artfully subsidized press have really put the "prop" in propaganda. - -They would have you believe--and literally hundreds of columns of -inspired writings have been used to make you believe--that the Federal -Reserve System is composed of twelve independent Federal Reserve Banks, -each one especially devoted to fostering industry in its own regional -territory. - -Such is not the fact. The fact is that the Federal Reserve System is in -truth a huge Central Bank, managed, manipulated, directed and operated -from Washington by the Federal Reserve Board. There sits the spider and -there the web is woven--spreading all over the U.S.A.--in which are -enmeshed the victims. - -You can read--if you want to waste your time--oodles of language about -how the Boards of Directors of these twelve Federal Reserve Banks are -seated in office and how part of them are elected by member banks -and how part of them are appointed by the Federal Reserve Board. You -can--if you want to waste more of your time--absorb messes of artfully -worded verbiage about the duties of the Boards of Directors. But -it's all "gammon and spinach," it's all artful camouflage. _The real -government of the Federal Reserve Banking System and of its twelve -Federal Reserve Banks and branches is in the absolute dictatorial -control of the Federal Reserve Board at Washington._ It is all -contained in one little joker of just thirty words. Here it is. Read -it. "_Any compensation that may be provided by Boards of Directors of -Federal Reserve Banks for directors, officers or employees shall be -subject to the approval of the Federal Reserve Board._" In every one -of the twelve Federal Banks every director, every Governor, every one -of the Deputy Governors, Federal Reserve Agents, Cashiers, Assistant -Cashiers, Controllers, Secretary, Counsel, Assistant Counsel, Clerks, -Stenographers, Messengers and Watchmen--in short, the whole horde of -Federal Reserve bureaucratic parasites--are subject to the approval of -the Federal Reserve Board at Washington because _their compensation -is subject to the approval of the Federal Reserve Board_. You know -that the hands that hold the money rule the enterprise. You know -that approval or disapproval of compensation is in effect "hiring -and firing." You know that "approval of compensation" is simply a -euphonious bit of language or smoke screen behind which really sits an -enthroned autocracy. No matter how many "conferences" are held between -Governors of Federal Reserve Banks, between Federal Reserve Agents and -with the Federal Advisory Council--"conferences" which during 1921 cost -you $22,716--the Federal Reserve Board at Washington is the supreme -and final dictator of the personnel and of the pay of its 10,313 -employees and of its 231 officers. The Federal Reserve Board as to -the compensation of this horde--and hence as to its personnel--is an -absolute autocracy from whose order there is no appeal! It draws its -expense account from a practically bottomless treasury without let, -hindrance, supervision or veto! Kaiserdom and Czardom in their palmiest -days drew from no such lake of liquid gold as draws the Federal Reserve -Board at Washington. Set that down on your mental tablets and proceed -to the next camouflage station. - -Here it is. Federal Reserve propaganda--with a practical limitless -expense account to further it--would have you believe that its favored -coterie of 231 officials are top notch bankers. Take a look at this -as it really is. The bankers whom you know and with whom you do your -business and to whom you entrust your money and from whom you borrow -your money have taken their own money and the money of their associates -and contributed the capital of their banks and put it at risk. They -wager their own money that they are good bankers. They have initiative -and confidence in their own ability and they prove that they have by -putting up their own money before they ask you to entrust yours to -their keeping. The officers of the Federal Reserve Banks don't put -up a copper cent, a plugged nickel, or a thin dime of capital. The -capital which they manipulate is commandeered by law for their use at -a petty six per cent rate. They may charge--and they have charged--as -high as eighty-seven per cent in one of their Shylockeries, but six -per cent is all that those who furnish the capital can claim. In 1919 -the Federal Reserve System sandbagged out of other people's money a -profit of 110 per cent, in 1920 160 per cent and in 1921 79 per cent. -In 1919 its stockholders received 104 per cent less than their capital -really earned, in 1920 154 per cent less than their capital really -earned, and in 1921 73 per cent less than their capital really earned. -For the three years of 1919, 1920 and 1921 the average net profits of -the Federal Reserve System were 116 per cent and the real owners of -the capital were gypped legally--but none the less gypped--out of an -average of 110 per cent for each of those three years. Do you suppose -that officers of any bank not legally so buttressed could "get away" -with any such proposition? You know they couldn't--and hold their jobs. -No body of stockholders in the U.S.A., unless legally chained, would -endure a profit of 116 per cent and a dividend of but 6 per cent! And -no bank officers in the U.S.A., unless legally permitted, would attempt -to "put over" any such proposition. You know it. Peg that and proceed -to the next proposition. - -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 amounted to $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 and Federal 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 no risk -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 - - -GET 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 and Lincoln 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 - - - - -ZINC! 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