The Project Gutenberg eBook, The Federal Reserve Monster, by Sam H. Clark and Wallace Campbell
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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.
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.
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.
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JIM JAM JEMS
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CONTENTS
Federal Reserve "Bunking"
THE FEDERAL RESERVE SYSTEM—WHAT IT REALLY IS
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.
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.
THE BIRTH OF THE FEDERAL RESERVE SYSTEM
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.
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.
THE FRAMEWORK OF THE MONSTER
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.
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:
| Location[1] | Capital | Per cent on Capital | Net Sandbaggery 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.