Comment: Yes, I have read the Act and

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Republicae's picture

Yes, I have read the Act and

Yes, I have read the Act and I have read the limited debates on Congress on the passage of the Act. The fact remains, that no where does the Act or within the debates, limited though they may be, where the commonly held conception of ownership of stock relays control over the FED, in fact, if you actually read the Act, the various relationships within the construction of the Act.

However, it appears that you are confused about the definition of Outstanding Stock. The definition of Outstanding Stock, for as long as I can remember, and that is a long, long time, is as follows:

Outstanding Stock: Stock currently held by investors, including restricted shares owned by the company's officers and insiders, as well as those held by the public. Shares that have been repurchased by the company are not considered outstanding stock.

Thus, every single share that is held by member banks is considered outstanding stock and is subject, under Section 7. Division of Earnings, subsection (b) Use of Earnings Transferred to the Treasury, to that provision. The reason you cannot find the commonly propagated names of supposed owners is that those are not owners of shares, the member banks are the owners of the shares of the Federal Reserve.

By the way, you can get a complete list of member banks, i.e. stockholders from the FFIEC [Federal Financial Institutions Examination Council]

Now, the Board of Governors are, under the act, empowered to govern the transfer of stock as expressed under the Act which limits proportional shares to 3% of the member banks capital, despite the proportional shares the member bank, regardless of that proportion only receives one vote and each member is limited to a 6% dividend of the earnings, but that too is limited because of the statute, thus when spread across the number of members holding stock the amounts received by the member banks is not what we could possibly consider huge in banking industry terms, some member banks are paid less than some of the CEOs bonuses each year, depending on the proportion of capital that makes up their 3% shares.

Also, you must remember that the original plan for the Federal Reserve was shot down by Congress, which instead of voting for the passage of the Aldrich plan (which was the Big Banker Plan), they rather chose the Owen plan which contrary to the Aldrich plan, the Owen plan transferred the control of the Board of Governors to the government.

Who owns member banks, well…let’s see I have more than a few stocks in several banks, I’m a stockholder, so are thousands of other Americans, thousands of other people, pension funds, mutual funds, etc. Who owns the banks, well, the stockholders of a given bank.

Now, I have no contention whatsoever with the fact that the great banking powers of the late 1800s and early 1900s were, with several politicians, the impetus of the creation of the FED, nor do I deny that those powers were extremely influential in the crafting of the Federal Reserve Act, but I also know that they did not get all that they had hoped for in the Act or the creation of the FED. Read Rothbard’s The Origin of the Federal Reserve.

Within the original Federal Reserve Act, you will also find the following:

No individual, copartnership, or corporation other than a member bank of its district shall be permitted to subscribe for or to hold at anytime more than $25,000 par value of stock in any Federal Reserve Bank. Such stock shall be known as public stock and may be transferred on the books of the Federal Reserve Bank by the Chairman of the board of directors of such bank.

Now, concerning the amount of subscribed capital necessary being $4,000,000. That section refers to the Regional Federal Reserve Banks themselves not to the subscribing banks seeking membership.

Actually, the Act does not give a wide latitude to the Board of Governors regarding shareholders and the shareholders are a matter of public record, for they are member banks which, as Chartered, must disclose various relationships regard all business dealings. As you said the Act itself governs the stock issue, and it is pretty plain language, as seen here in the Act Section 5:

The capital stock of each Federal reserve bank shall be divided into shares of $100 each. The outstanding capital stock shall be increased from time to time as member banks increase their capital stock and surplus or as additional banks become members, and may be decreased as member banks reduce their capital stock or surplus or cease to be members. Shares of the capital stock of Federal reserve banks owned by member banks shall not be transferred or hypothecated. When a member bank increases its capital stock or surplus, it shall thereupon subscribe for an additional amount of capital stock of the Federal reserve bank of its district equal to 6 per centum of the said increase, one-half of said subscription to be paid in the manner hereinbefore provided for original subscription, and one-half subject to call of the Board of Governors of the Federal Reserve System. A bank applying for stock in a Federal reserve bank at any time after the organization thereof must subscribe for an amount of the capital stock of the Federal reserve bank equal to 6 per centum of the paid-up capital stock and surplus of said applicant bank, paying therefore its par value plus one-half of 1 per centum a month from the period of the last dividend. When a member bank reduces its capital stock or surplus it shall surrender a proportionate amount of its holdings in the capital stock of said Federal Reserve bank. Any member bank which holds capital stock of a Federal Reserve bank in excess of the amount required on the basis of 6 per centum of its paid-up capital stock and surplus shall surrender such excess stock. When a member bank voluntarily liquidates it shall surrender all of its holdings of the capital stock of said Federal Reserve bank and be released from its stock subscription not previously called. In any such case the shares surrendered shall be canceled and the member bank shall receive in payment therefore, under regulations to be prescribed by the Board of Governors of the Federal Reserve System, a sum equal to its cash-paid subscriptions on the shares surrendered and one-half of 1 per centum a month from the period of the last dividend, not to exceed the book value thereof, less any liability of such member bank to the Federal Reserve bank.

Thus, I am not sure what you are getting at, but the regulations under the Act are pretty specific regarding the way stock is issued, how it is managed, what qualifies a bank to become a member and actions to be taken in the event of insolvency of any member bank. Additionally, there are disclosures for the FED, regulated by the SEC and banking regulations, a member bank must disclose its largest stockholders of 5% or more, it should be obvious that the member banks proportional stockholdings in the FED is 3% of their capital assets, thus you can, if you don’t want to look up the information, determine exactly how many shares a given bank holds within the FED by simply calculating it based on their capital assets.

Additionally, this is something to consider when thinking of the power of the banks, especially of those which have become known as "too big to fail", what happens when they fail? The entire system is fraught with risk exposure, especially with some of the largest banks in the U.S. and in Europe. When the dominos begin to fall, with the first one, will come a systematic collapse that will, eventually even threaten the very existence of the "lender of last resort", which despite the commonly held views of people when they speak of the ELITE MEME, this system is collapsing and have been collapsing since prior to 2008. 2008 was simply the first expression of the underlying exposure these big banks and indeed this government is subject to in todays economy.

Thus, I must therefore, ask...what is your point?

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