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.