The Federal Reserve, in my opinion, should not be classified as a private corporation. It should be termed a government-run fascist cartel. There are several important reasons for this. For example, all nationally chartered banks in the Federal Reserve system are forced by the government to join the cartel. Bernanke and his board of governors are appointed by the President and approved by the Senate. The Federal Reserve came into being because of an act of Congress, and it can be altered or legislated out of being at anytime by Congress. These factors are not how private corporations are created or operated. The Fed entails government involvement in a massive way. Without the special monopoly privileges legislated by Congress that sustain the Fed, it disappears.
Moreover, the great bulk of the profits of the Reserve Banks are turned over to the federal treasury. As John McCormack explains in a Liberty magazine article: "[H]olding shares in the Fed is not a very profitable activity. Dividends to member shareholders are limited to 6% of nominal capital (hardly a great rate of return) and all Fed revenues above this amount (invariably vastly greater sums) are returned to the U.S. Treasury. In 1994, for example, total dividends to member banks amounted to $212 million while the Treasury received $20.5 billion, 97 times as much." [Liberty, March 1996.]
Government is thus a full partner in the Federal Reserve System. And a business entity with the government as a full partner is not a private corporation.
Courts Create a Fallacy
Much of the reasoning behind the mistaken notion that the Federal Reserve is a private corporation lies in court cases such as LEWIS vs. United States on June 24, 1982. In that case, the 9th Circuit Court ruled: "We conclude that the [Federal] Reserve Banks are not federal...but are independent, privately owned...corporations...without day to day direction from the federal government."
There are numerous cases like this where the courts have ruled that the Reserve Banks of the System are privately owned and controlled corporations. The mistake made here by those who support the notion of a "private Fed" is that because the courts declare something to be so, it somehow makes it so. This, of course, is a fallacy. Judges only interpret the law; they do not make the truth. Truth is something we discover through identification of the facts of reality and coherence with the laws of logic. Men find the truth through a process of synthesizing reason, experience and intuition.
What then are the facts of reality and the laws of logic in this case? They are as follows: A private entity in the marketplace is the opposite of a public entity. It is a free entity without monetary support and monopolistic legislation to protect it from government bureaucracy. It is an entity that is operating in a laissez-faire environment. To the extent that government intervenes into and controls, regulates, manipulates, or monopolizes an entity's market policies, then that entity is no longer private or free. It becomes statist / collectivist (i.e., socialist / fascist) to some degree or another. How much government involvement there is will determine how collectivist the entity becomes.
For example, Exxon Corporation is considered a private corporation. So let's compare it to the so called "private" Federal Reserve corporation. Does Exxon have its CEO and board of directors appointed and confirmed by the government? No, but the Fed does. Are 97% of Exxon's profits turned over to the federal Treasury? No, but the Fed's profits are. Can Exxon be voted out of existence tomorrow by Congress? No, but the Fed can. Therefore despite what our courts maintain, the Fed is not a private corporation; it is a government run cartel.
The fact that the courts define the Fed as "private" is the way that tyrannical ideologues pull the wool over the people's eyes. This is done to make the people think we are still a free, "private" enterprise country. This is how they smuggle us into corporate statism, i.e., economic fascism -- by getting the intelligentsia of the country to buy into their redefinition of words. The courts are run by statist judges, and the schools are run by statist professors -- all pretending that we are still a "free" enterprise system. In fact, many of them actually believe their own warped logic. It's the way they were taught, and they lack the intellectual rigor to investigate the fallacies of their assumptions. They ritualistically use the term "private" because it conveys the image of "free." But private in this instance is in name only. If a private entity does not have control over its operations, its profits, and its policies, then it is no longer private; it is public, and socialist or fascist to some degree or another.
Who Controls Who?
So do the bankers control the government, or does the Federal Government control the bankers? One way to answer this question is to ask who can abolish who? Can the Federal Government abolish the Fed? Certainly. Anytime it wants to, Congress could eliminate the Fed by a majority vote of its members. But can the mega-bankers, with all their power to influence politicians, abolish the Federal Government? Hardly. In this respect of creation and abolition, the Federal Government is the power behind the evil of our Federal Reserve system. But in actual practice, I think it is more accurate to say that the evil comes from the combine of the two forces. Separately, neither the mega-bankers, nor the Federal Government would be able to wield the dangerous control over our lives that they gain in concert. It is only when they join forces to become "partners" that they gain the power to do the evil they do. READ MORE ....
