The Bottineau courant. (Bottineau, Bottineau County, N.D.) 1895-1929, 1922-06-15
|DR. I. F. LADD'S :. !.
WEEKLY LETTER
q Continued from last Week) Es r.
What does the Federal Reserve Pay
the Government for Money il y
{ ~ Gets From the Government

What does the Federal Reserve Pay
the Government for Money it y
I & Gets From the Government s.. b
The last definite information I have
in this subject is as late as February
g, 1922, and I do not think the con-
ditions have materially changed since
that date. Under the provisions of
Section Is of the Federal Reserve Act,
Federal Reserve banks are required
to reimburse The Treasury department
for all expenses necessarily incurred
in connection with the printing issue
and retirement of Federal Reserve
notes. The Act also empowers the
Federal Reserve Board to establish a
rate Of interest which each Federal
Reserve Bank shall pay on the total
amount of it's Federal Reserve notes
outstanding, less the amount of gold
and gold certificates held by the Fed
eral Reserve Agent as collateral Sc
curity. Up to February 8, 1922, how
ever, the. Board had not required the
Reserve Banks to pay interest on the
Federal Reserve notes issued to them,
justifying such failure to do so upon
the ground that all net earnings af-
ter the payment of the, annual divi-
dend of per cent, are either paid to
the Government as franchise tax or
are transferred to surplus account in
accordance with the provisions Of the
Federal Reserve Act. However, the
ingenuity of bankers help them takel
care of great many things. Sewers
criticism has been made relative tos
Increase of salaries of bank officials
and employees and the building Of,
bank buildings, the New York Feder-.
al Reserve Bank proposed to build a
marble banking palace to cost approx
Is millions of dollars. The
banks are also required to pay tax
of u of l per centum each half year
on the average amount of such banks
notes in circulation. This is equivalent
to the rate charged National banks on
their circulation. Up until December
81, 1921, the Federal Reserve Banks
paid to the Government in franchise
taxes the sum of $124, ,537 1886. This
was all! Notwithstanding the fact
that they were doing billions of dol
lars worth of business. The proposed
bank building in New York was to
cost a fifth of this sum.
Who are the Beneficiaries of the Fed
eral Reserve System
Those who own and control the sys-
tenn, of course, and it is owned and
controlled by the big bankers. 1t is a
common misunderstanding that the
Federal Reserve Banks are public in
and their officials have so
testified before Congressional Com
mittees. They are operated for priv
ate gain. Congress simply delegated
to them, under the provisions of the
Federal Reserve Act, the control and
use of the money and credit of this
country. Congress had no moral right
to do so, if it had the legal right.
The Constitution places upon Con-
gress the duty of regulating and con-
trolling the money and credit of this
aation,i and it was morally criminal
to delegate those functions to private
bankers to operate for their own priv
ate gain. Of course, at times there
must be resultant benefits to the peo-
Pile and temporary prosperity, in or
der to make the system. profitable to
the bankers; but there are also the
periods of depression which sweep
away all of savings and prosperity
and more completely fork the chains
If economic servitude. The power is
n the hands of the bankers who con-
;rol the system to bring about either
hat they desire. It is mere prating
for them to talk about prosperity is
Just around the corner, because they
alone can turn the corner when they
lesire. Natural economic conditions
40 longer control the situation in this
country. Unnatural, ficticious condi- |
ions of the bank manipulators con-
srol, and they control under a quasi
partnership with the Government, and
lnder the protection of delegation
# powers by congress. Congress must
1ndo what it has done and restore to |
he people the control and exercise of |
he sovereign function of the issuance
md control of money and credit.
How Can Money Be Contracted Thru
The Federal Reserve System
The Federal Reserve System set up
system of bank credits that enveloped
he country in debt without putting
he necessary orresponding amount
# money into circulation to help them
,ay out when paying time came. The
most Of the loans made throughout
he country were loans of bank cred
t. is you went to b bank 10 borrow,
,eur loan was placed to your credit
i the bank and you drew your checks
lgainst II. You saw very little of the
money that your debt was supposed
9 orepresent. # was . system Of book
Keeping. The debts we're created but
he money did not 60 into circulation
When the Federal Reserve System
vas ready to contract it simply stop
I'D the issuance of bank credit and
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