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.