The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1932-11-12

| tom, with small exception. is built
on credit instead of on real money.
This creates situation wherein there
is room for countless thousands of
human leeches to live upon society,
through the interest they collect for
pure hot air." better known as cred
it. Let us take the intermediate Credit
banks as an illustration.
The Federal intermediate Credit
banks, in the original act were Or
ganized with 100000 authorized
capital stock for each bank, said
stock to be purchased by the United
States treasury. This is all the actual
money the government is supposed to
put into the project. Local credit
associations are then to be formed by
local parties in each community de-
string the use OF these credit facilities
Such an association can be organ
lied with an authorized capital of
$4,000 but they can contract loans
for 100000, Or ten times their cap
ital. If the association is successful
in placing loans in the community,
how long will it take before the
amount OF loans outstanding will ex-
coed the $4,000 originally invested?
And when this happens. what does the
farmer get, who loans later? He gets
credit and not money. thereby Great
ing an opening in our credit system
for "leech No. L."
The local credit association then
takes the notes it accepted from the
farmers and discounts them with the
Federal intermediate Credit bank in
its district. When the $4,000, 900 au-
thorized capital is exhausted the In
termediate Credit bank does not 20
to the United States treasury and
ask Uncle Sam for more money, but
instead issues debenture bonds to be
sold on the money market, thereby
paving the road into our credit sys-
tenn for 'leech No. o. In other
words, Uncle Sam goes out into the
open market to buy more money, even
though he has the authority to coin
and regulate the value thereof. He
thereby pays interest to the banking
system for the use of money of which
ne has an unlimited amount himself.
He then passes the interest charged
by the money masters down to the
local credit associations for them to
collect from the original borrowers.
This creates the odd situation that
the farmer pays4nterest to the money
masters for the debentures the In
termcdiate Credit banks sell on the
market and also to the local credit
association, both of which could be
eliminated If Uncle Sam ran his own
business for the good of the people
instead Of permitting it to be run
by and for these human leeches that
live upon society through their COL
lection of interest at every turn of
the road.
The next proposition we face is the
question of why the debentures? With
little study the matter becomes quite
clear. The $4,000, 900 authorized cap
ital stock of each Federal Intermedi-
ate Credit bank is just enough CAPT.
tai to give the money masters work.
ing basis. Debentures can then be
issued to the amount of $4,000 900
for each intermediate Credit bank,
or $600,000O00 for the whole Federal
Intermediate Credit bank system
These amounts are 10 times the au-
thorized capital stock, as the law stip-
ulates. These amounts of debenture
bond issues can, however, be in
creased still more to the extent of
10 times the amount of the surplus,
whatever that might be. The fed
erM government can not put into this
loan agency one Speck more than the
original S. 100000 called for and must
go into the open money market for
every cent it desires above this. And
what is more, the limit of debenture
issues is beyond the clouds, because
II the surplus is kept continually on
the increase the 40 times the sur
plus" stipulation in the law makes
this limit without an end. This SIM
ply guarantees the money masters
the privilege of collecting interest
from the farmer and using Uncle
Sam as his collection agency. Not
alone this, but through this means
OF furnishing credit facilities to the
farmer, the risk and responsibility of
making loans is foisted upon the fed
eral government and the local credit
associations, leaving the big money
masters free from all worry from this
source. Al they do is to set the price
of interest from the Federal Inter-
mediate Credit banks and then Just
forget about the risk of the loan it.
self. Uncle Sam takes care of that
for them, so why should they worry?
This brings us to the next question.
Why is it that the rich, who have
more than they can use of this
worlds wealth. can get money from
the federal government for an inter,
est rate that is infinitesimal while the
people, who are the government. can
not get this r,oney without paying
an exorbits.lt rate, and this mostly
to the money masters? We ask
why? This is the system of finance
back of the Federal Reserve; this
is the system back Of the Federal
intermediate Credit banks, and this
you consider as such q marvellous
means of getting credit to the farmer.
Just why? If we look into some his
tory Of the past we can get at least
some idea Of why these conditions
prevail.
Frederick Townsend Martin, a cap
ita1ist, wrote in his book. 1.-THE Pass
ing of the Idle Rich," published in
1911, the following in regard to the
aims and activities of the rich. 1.-The
Plutocrats always rule by force or
fraud, or combination of the two.
/. In America they rule by fraud
alone. -. We arc the rich, we own