Tuesday 18 June 2024

1943 book by US Representative Jerry Voorhis "Out of debt, out of debt" describes why priv Fed must be ended and US gov must print own money

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 Key excerpt

THE FEDERAL RESERVE BANKS 
AND THE CREDIT OF 
THE UNITED STATES 


The amount of credit a man can get at a store or at a bank 
depends upon either the value of property which he owns and 
can pledge as security or else upon his ability to produce wealth 
and thus earn money with which to repay the loan or extension 
of credit made to him. 

The credit of the United States Government is the credit 
of the American people as a whole. It rests squarely upon two 
things: (i) the ability of the American people to produce and 
(2) the power of the Government to tax. The sovereign right 
of the nation to coin or issue money is an unlimited right but 
prudence and sound judgment and a concern for the future will 
always dictate that this right be not exercised beyond the 
amount of credit which the nation possesses according to the 
definition just given. 

The American people each day that they work and produce 
broaden the base of their own national credit. The amount of 
money that should be in circulation at any given time is limited 
by but one main factor — the amount of goods available to be 
purchased with the money. Therefore, the central and basic 
truth about money is that by their industry and labor and the 
abundance of their production the American people, or any 
other people, determine the extent to which they have a right 
to have their government create money and feed it into the 
channels of their trade. 

No rational mind has yet been able to conceive why, therefore. 



152 OUT OF DEBT, 

a sovereign people should be required to pay interest to private 
financial houses when their national money is created. 

By “money” we mean, of course, not cash or currency alone 
but demand bank credit of every sort as well, since it performs 
all the functions of cash money. 

The credit of the United States belongs by every right and 
legitimate title to all the people of the United States. It belongs 
to the farmers, the managers, the business men, the laborers, the 
inventors, the scientists, the doctors, the teachers, the home- 
makers of America. The reason the nation’s credit belongs to all 
the people is because they produce the real wealth that makes it 
possible for the nation to have any credit at all and because 
they pay the taxes that enable the government to make good on 
its obligations. 

But we don’t act as if the credit of the United States belonged 
to the people of the United States. 

In 1913 the Federal Reserve Act was passed. That Act as 
amended by later Congresses has given to the twelve Central 
Federal Reserve banks the opportunity to claim that they own 
the credit of the United States. Through these twelve central 
banks all the thousands of member banks of the Federal Re- 
serve system share in this claim. 

But the Central Federal Reserve Banks are private institu- 
tions. They belong to the member banks, which are private 
institutions. The United States Government does not own one 
penny’s worth of stock in these central banks of issue. The 
Board which governs the system is paid by the private banks 
and therefore is responsible to the private banks first and to the 
people and government of the United States second. 

A surprising number of people don’t believe that the twelve 
Central Federal Reserve Banks are privately owned institutions. 

Millions of people believe “Federal” Reserve Banks means 
what it says and that there is something “federal” about them. 
Some documentary evidence at this point would seem to be 
necessary. 



OUT OF DANGER 153 

First, a letter from the Director of Research and Statistics 
of the Board of Governors of the Federal Reserve System itself. 

BOARD OF GOVERNORS 
of the 

FEDERAL RESERVE SYSTEM 
Washington 

February 14, 1940 

Honorable Jerry Voorhis 
House of Representatives 
Washington, D. C. 

Dear Mr. Voorhis: 

In reply to your letter of February 10, the stock in the 
Federal Reserve banks is owned by the member banks 
and such State banks as were eligible and wished to join. 
The law requires the member banks to subscribe to the 
capital of the Federal Reserve bank of their respective 
districts 6 per cent of their own capital and surplus. Of 
this amount, 3 per cent has been paid in and the remainder 
is subject to call. There are no other stockholders in the 
Federal Reserve banks. If you wish it, I shall be glad to 
furnish you with a list of the approximately 6,300 banks 
that belong to the Federal Reserve System and their hold- 
ings of Federal Reserve Stock. 

In this connection, I take the liberty of sending you a 
statement on “The Nature of Federal Reserve Banks’" in 
which there is a discussion of the ways in which stock 
ownership in the Federal Reserve banks differs from ordi- 
nary corporate stock ownership. 

Very truly yours, 
(Signed) E. A. Goldenweiser 
Director of Research and Statistics 



OUT OF DEBT, 


154 

Second, a letter from the Assistant Secretary of the Board 
to a gentleman who had contended that the Government did 
own the Federal Reserve Banks. 

BOARD OF GOVERNORS 
of the 

FEDERAL RESERVE SYSTEM 
Washington 

Dec. 20, 1940 

Mr. Andrew N. Hildebrand, 

124 Lincoln way East, 

South Bend, Indiana 

Dear Sir: 

Receipt is acknowledged of your letter of December 6, 
1940, in which you suggest that the United States is the 
equitable owner of the assets of the Federal Reserve Banks, 
that legal and equitable title are merged in the name of the 
real party in interest, and that therefore the United States 
is the legal owner of the Federal Reserve System. 

As stated in the Board’s letter of December 3, 1940, 
although the Federal Reserve Banks are corporations cre- 
ated by Congress as instrumentalities of the Government 
for the purpose of carrying into effect monetary powers 
of Congress, they are not owned by the Government. Their 
stock is owned entirely by the member banks of the Federal 
Reserve System. In a broad sense, of course. Congress and 
its instrumentalities may be regarded as representing and 
acting in behalf of the interests of the people of the United 
States; but clearly this is not what is meant by “equitable 
ownership” as used in your letter. 


https://ia801506.us.archive.org/3/items/in.ernet.dli.2015.224092/2015.224092.Out-Of.pdf

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