The following is just about as quick, simple, and concise as I can get on the Federal Reserve System established by the 1913 Federal Reserve Act. There are some people still posting on various articles that the Federal Reserve is a public bank, which is run by the government and owned by the people. Of course, this is totally absurd, but since they are saying it, I feel obliged to respond--concisely, and entirely from the Federal Reserve Act! Here's my letter to them:
Dear Citizen who thinks that you own the Federal Reserve,
I know this is gonna hurt, but, I'm sorry--you don't own the Federal Reserve. None of it. Not one little, tiny bit. In fact, not only do you not own it, but instead, you owe it. And me too. As in owe it interest--6% to be exact--on every dollar that it makes up out of thin air and sells your government and people. The US government has no stock in the FRS or any of its banks, and no shareholder status. Zero. In fact, senators and representatives are expressly prohibited from holding office in the Federal Reserve System (FRS Act Section 4, paragraph 13). Again, the US government and the US people have zero ownership interest in the FRS. I know that's hard to take, but you don't have to believe me, because here it is directly from the Federal Reserve Act, Section 2, paragraph 10. You can read for yourself at: http://www.federalreserve.gov/aboutthefed/section2.htm. Here it goes:
"As originally enacted the Federal Reserve Act provided for a Reserve Bank Organization Committee to have charge of the initial steps in organizing the Federal Reserve System and this Committee was authorized to allot Federal Reserve Bank stock to the United States in the event that subscriptions to such stock by banks and by the public were inadequate. However, subscriptions by member banks were adequate and there was no necessity or authority for the allocation of any stock to the United States. Accordingly, [this paragraph] is now of no practical effect and may be regarded as obsolete."]"
All stock in the FRS was allocated to banks, none to the government. Also, government officials are expressly prohibited from the Board of the FRS, including senators and representatives (Section 4), and also (after 1935) the Secretary of the Treasury and Comptroller of the Currency (Section 10). Some people say that the FRS is a "non-profit" bank, and that it "gives" back all its surplus to the Treasury. Well, no: the Federal Reserve System also is NOT a "non-profit" organization, either. The FRS is made of 12 district branches, each of which is wholly owned by the member banks of each district. You can easily learn about this by reading the FRS Act of 1913 from the FR's website, and then you'll have done something that your own representatives and senators probably haven't even bothered to do (unless you rep is Ron Paul or Dennis Kucinich, or your senator is Bernie Sanders).
Additionally, when you do this, you'll learn that only national association (NA) banks and for-profit banks can even attempt to buy into the FRS or purchase stock in the District bank of their specific regional area. This means that state-chartered banks, which are banks operating in a single state under the authority of the state, supervised by the Comptroller of the Currency, must specially apply to the Board of the FRS to buy stock (Section 9), and the Board may deny them at their will. Most state banks only gain entry to the FRS after having mergered with a member NA, and all national association (NA) banks must be FRS members. In addition to this, credit unions of any size are prohibited from joining the Federal Reserve System, and only have access to the Fed funds window in emergency situations, and even then only at the will of the Board. In case you don't know, credit unions are non-profit banks, as they are co-operatives owned by the account holders. So the real non-profit "banks" are literally prohibited from the FRS. As is the government, as is demonstrated above.
If you need more proof, read the FRS Act, which is available from the above FRS link. You'll also see Section 4, paragraphs 20-22, which detail the fact that the Chairman, Board, and staff ("staff" including the private "police" authorized in Section 11, paragraph Q) are paid not by the government, but by the member banks of the privately-owned Federal Reserve district stockholders. They are not "public servants," and they are not paid by the government or the tax-payer (directly, that is, as we are ALL paying for ALL of this!). Check out Section 16, paragraph 10, and you'll also see how the FRS in fact must pay the Bureau of Engraving (which is a government body) to make the notes for them, and then the notes become the property of the FRS and the "obligation" of the US. Some people say, again, that the "left-over" is put back in the Treasury, and while this is certainly inventive, it is also totally not true. Directly from Section 7, Subsection A, paragraph 1:
"a.) After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders of the bank shall be entitled to receive an annual dividend of 6 percent on paid-in capital stock."
It is true that every year the FRS "gives back" a small amount to the Treasury, but this money was created up by the FRS itself, and, as per section 7, the money is placed "on account" with the Treasury to settle the "debt" that the Treasury has --has with the FRS, because the FRS is making up money and selling it to Treasury. The Treasury has no authority over the issuance of Federal Reserve notes. Since you probably don't believe me saying that, here's it from the FRS Act, Section 16, which my emphasis:
"Federal reserve notes, TO BE ISSUED AT THE DISCRETION OF THE Board of Governors of the Federal Reserve System for the purpose of MAKING ADVANCES TO Federal reserve banks through the Federal reserve agents as hereinafter set forth and for NO OTHER PURPOSE, are hereby authorized."
Are you getting mad yet? Yes, that's a common response, but unfortunately, that's not all: check out Section 7, Subsection (c):
“Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom SHALL BE EXEMPT from Federal, State, and local taxation, except taxes upon real estate.”
So, the profits of the FRS are non-taxable as well. Again, the FRS banks pays no taxes on their profits, and the member banks pay no taxes on their dividends payments. As for those member banks--in addition to the tax-free 6% post-expenses dividend, the member banks are also currently recieving interest on their deposits with the FRS, as per the TARP legistation of 2008. Yes, interest on their made-up money on deposit with their district Bank, being charged back as a liability of the US taxpayer. That was unprecendented until last October, but indeed, member banks are now getting PAID to hold money in the system, "money" of course which is being produced from thin air. Don't believe me about the "thin air" part, either? Well, this might interest you, directly from the US Treasury's website at http://www.ustreas.gov/education/faq/currency/legal-tender.shtml :
"Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything. This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy."
So finally, consider the above against the rest of Section 16, Subsection 1 of the Federal Reserve Act, the first part of which I already quoted:
"Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are hereby authorized. The said NOTES SHALL BECOME OBLIGATIONS of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank."
Of course, you cannot even get "lawful money" for a Federal Reserve note that you might present to a FRS bank, because there is no more "lawful money." Again, I'm sorry to have to break it you, but the Federal Reserve is a totally criminal bankster operation, and now you know for certain. Sucks, doesn't it?