THE CAMOUFLAGE OF THE MONSTER
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.
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.