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."