The people's voice. [volume] (Helena, Mont.) 1939-1969, 1946-09-06
By JERRY vOORHIS

|
When the Federal Reserve Act wa
passed in 1913, a lot of people believed
that the twelve central Federal Re
serve banks created by that act were
going to be government institutions
But they were not then made so ant
never have been. Every penny of stool
in the Federal Reserve banks belongs
to the private member banks of the
Federal Reserve System. In the words
of the late Senator Glass of Virginia
who, as author of the Federal Reserve
Act, certainly should have known
''The Government does not own one
dime Of proprietary interest in the
Federal Reserve Banks"
The first essential step in the build
ing of scientific monetary system
in America is for Congress to purchase
from the member banks all the capital
stock of the central Federal Reserve
Banks and make them government in
situations. This would cost us about
1854, 100000.
| Thomas Jefferson once said, "If the
American people ever allow private
banks to control the Issue of their
currency, first by initiation and then
by deflation, the banks and corpora
lions that grow up around them will
deprive the people of their property
until their children wake up homeless
on the continent their fathers con-
quered."
Today over SO per cent of all the
business of the twelve central Federal
Reserve Banks consists of creating
money and using it to buy interest
bearing bonds and notes of the U. S.
government. They are the central
bank of issue of the United States. No
central bank of issue ever should be-
long to anyone except the whole peo-
pie of the nation. The people of Eng
land have just completed making the
Bank of England a government in
stitution. 1t is high time the American
people did likewise with the central
Federal Reserve Banks.
In a paper entitled 1.-THE Nature of
the Federal Reserve Banks" written
by Mr.. E. A. Goldenwiser, chief of the
research division of the Federal Re.
serve board, we find this statement:
1.-THE Reserve bank derives the
funds available for it's loans and in
vestments from powers conferred
upon it by Congress. The capital it
has is prescribed by Congress and
constitutes small part of the funds
at its disposal. The other sources of
the funds of the Reserve banks are
its power to issue notes and to ac-
cept and create deposits"
Note the words create deposits" 1t !
is with these created deposits that |
bonds of the United States are bought |
The Federal Reserve Banks have |
capital stock of only 154,000,000. But |
today they own over $4,000, 100000 |
Of government bonds, notes, and bills. !
The American people must some time |
pay out of taxes that amount of money |
plus interest on it to these banks And |
yet the Federal Reserve Banks bought
these government bonds and notes
with what is called Reserve Bank
credit" which is nothing more nor less
Judn tuG CIGuiI VI InC Oulltu OLdICb+
It is figures written on the bank books,
which cost the banks nothing to create
but which the government itself
guarantees and stands behind with all
It's resources. If the Federal Reserve
Banks had belonged to the government
our nation would be $22,000,0 100000
ess in debt than it is today. For then
whenever Reserve Bank credit was
treated it would have been credited to
he account of the American people
instead of being debited against the
people and credited to private banks.
According to the terms of the Fed
sral Reserve Act, Federal Reserve
Notes, to be issued at the discretion |
If the Federal Reserve Board for the
purpose of making advances to Fed
sral Reserve banks through the Fed
sral Reserve agents as hereinafter
Jet forth and for no other purposes,
ire hereby authorized" In other
words, Federal Reserve notes can be
made available" to member banks of {
he system for tehir use, but not to !
he United States government unless |
{ pays interest upon them. Should the
Treasury of the United States seek to
any such money (Which is the
oday) it would have to borrow it at
interest from a private banking insti-
utions. Nevertheless, every Federal Re-
erve note bears upon its face these
vords "Redeemable in lawful money
t the United States Treasury or at
ny Federal Reserve bank" The only
hing that lawful money could possibly I
'e is money issued by the United
states government. Therefore, it is
erfectly clear that the government of {