Criminal
01-16-2003, 12:47 AM
http://www.visi.com/~contra_m/pc/1957/3-12theft.html
The Federal Reserve System As A System Designed To Permit More Theft
by Frederick Nymeyer
Copyright © 1957 Progressive Calvinism League
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The Preamble to the Act creating in 1913 the Federal serve Banking System of the United States begins as follows:
An Act to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.
The first reason given is "to furnish an elastic currency." "Elastic" here means and can mean only one thing, namely, creating more fiduciary media. The quantity of gold is not elastic. The quantity of gold certificates cannot be elastic. It is only fiduciary media which can be elastic. The Federal Reserve System is therefore a system designed to increase public theft and fraud. That, of course, was not the understanding of the creators of the Act, Senator Carter H. Glass of Virginia and others.
They earnestly wished to provide the United States with a better banking structure. What they did was just the opposite; they created a worse banking structure.
These monetary and banking experts did not set out to cure the cause of the disease; they set out only to cure the symptoms of the disease. Prior to the organization of the Federal Reserve system in 1913 the cause of the disease was putting out fiduciary media. Whenever the limit on fiduciary media set by law had been reached, then there was a tight spot, a crisis, and in 1907 there had been a very severe tight spot, a panic. The banking experts of the country had this solution for the problem, to wit: we must no' have an absolute barrier beyond which the issuance of fiduciary media cannot go. Our trouble is that there is a limit. We will make the limit elastic.
Behind this program there was an astounding blindness, part of which we shall explain later in this issue. Here was no solution that endeavored to correct the cause of the trouble. It was only a solution which attempted to ameliorate the consequences. To cure an economic society of its disease consisting of a money ailment
(too much fiduciary media), the real cure is to eliminate the fiduciary media, and not to increase the quantity of fiduciary media in emergencies, in crises, in panics.
The history of the Federal Reserve Act makes clear that the new system of reserve banking was designed to promote economic stability. In 1952, nearly forty years after the original Act, the then Chairman of the Board of Governors said that the long-run pupose of the System was:
To minimize economic fluctuations caused by irregularities in the flow of credit and money, foster more stable values, and thus make possible the smooth functioning of monetary machinery so necessary to promote growth of the country and to improve standards of living. . . . Credit and monetary policy alone, of course, cannot attain the indicated goal of steady economic progress. But credit and monetary policy is an indispensable element in the achievement of stable progress.
The foregoing is quoted from Chapter 2 of The Federal Reserve Re-examined, a study made by the New York Clearing House Association and published in 1953. This study goes on to say:
In its practical administration credit control involves the expansion and contraction of Federal Reserve credit which, in turn affect the money supply and influence the cost and availability of credit of all kinds. The critical questions of the day relate to the considerations which guide the expansion and contraction of Federal Reserve credit and to the methods by which this is accomplished. The authorities now have a large measure of discretion in the exercise of credit policy. Although they are bound by certain statutory duties and requirements, the Act does not prescribe automatic rules of action nor set forth any economic formula for the guidance of policy.
In other words, the Federal Reserve Act provides for great elasticity in making a mistake, a mistake which consists in issuing fiduciary media. It does not aim at controlling the fiduciary media or eliminating it, but making it elastic. In our language, sin has been made elastic.
The technical methods for accomplishing this elasticity are three:
1. Variations in the rediscount rate (that is, variations in the interest rate
2. Variations in the reserve requirements of the member banks:
3. Purchases and sales of government securities; sales of government securities by the Federal Reserve banks tighten the money market, and purchases by the Federal Reserve banks ease the money market.
We shall not at this time go into the technicalities of the Federal Reserve Banking System. The essential idea to remember is that it aims at elasticity and that that elasticity essentially consists in variations in the quantity of fiduciary media.
Underlying the monetary structure of the United States and of the world is gold. The nations of the world may think that they are "off" the gold standard, but really they are in error. They have only declared that they are off the gold standard and their prices are quoted in their own paper currencies, basically their fiduciary media. But mentally everybody attempts to adjust his thinking by saying to himself: what is the gold price of that currency (as well as the fiduciary media price). It is that financial calculation in terms of gold which controls the thinking of all well-informed people. The quotations may be in terms of fiduciary media; the valuations are in terms of gold or are endeavored to be appraised in terms o! f gold. The peoples of the world may not be able quickly and clearly to recompute their fiduciary media money into terms of gold money. They may make some serious errors. They may be wrong for a considerable period of time. But eventually all quotations are adjusted as well as can be to some currency measured by gold, or by gold itself.
In the monetary field the vicious doctrine of the late John Maynard Keynes consisted in this idea: to unhinge the fiduciary media of a particular country from relationship to gold. The idea is a mirage. It cannot be attained. It will not work.
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The Federal Reserve System As A System Designed To Permit More Theft
by Frederick Nymeyer
Copyright © 1957 Progressive Calvinism League
--------------------------------------------------------------------------------
The Preamble to the Act creating in 1913 the Federal serve Banking System of the United States begins as follows:
An Act to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.
The first reason given is "to furnish an elastic currency." "Elastic" here means and can mean only one thing, namely, creating more fiduciary media. The quantity of gold is not elastic. The quantity of gold certificates cannot be elastic. It is only fiduciary media which can be elastic. The Federal Reserve System is therefore a system designed to increase public theft and fraud. That, of course, was not the understanding of the creators of the Act, Senator Carter H. Glass of Virginia and others.
They earnestly wished to provide the United States with a better banking structure. What they did was just the opposite; they created a worse banking structure.
These monetary and banking experts did not set out to cure the cause of the disease; they set out only to cure the symptoms of the disease. Prior to the organization of the Federal Reserve system in 1913 the cause of the disease was putting out fiduciary media. Whenever the limit on fiduciary media set by law had been reached, then there was a tight spot, a crisis, and in 1907 there had been a very severe tight spot, a panic. The banking experts of the country had this solution for the problem, to wit: we must no' have an absolute barrier beyond which the issuance of fiduciary media cannot go. Our trouble is that there is a limit. We will make the limit elastic.
Behind this program there was an astounding blindness, part of which we shall explain later in this issue. Here was no solution that endeavored to correct the cause of the trouble. It was only a solution which attempted to ameliorate the consequences. To cure an economic society of its disease consisting of a money ailment
(too much fiduciary media), the real cure is to eliminate the fiduciary media, and not to increase the quantity of fiduciary media in emergencies, in crises, in panics.
The history of the Federal Reserve Act makes clear that the new system of reserve banking was designed to promote economic stability. In 1952, nearly forty years after the original Act, the then Chairman of the Board of Governors said that the long-run pupose of the System was:
To minimize economic fluctuations caused by irregularities in the flow of credit and money, foster more stable values, and thus make possible the smooth functioning of monetary machinery so necessary to promote growth of the country and to improve standards of living. . . . Credit and monetary policy alone, of course, cannot attain the indicated goal of steady economic progress. But credit and monetary policy is an indispensable element in the achievement of stable progress.
The foregoing is quoted from Chapter 2 of The Federal Reserve Re-examined, a study made by the New York Clearing House Association and published in 1953. This study goes on to say:
In its practical administration credit control involves the expansion and contraction of Federal Reserve credit which, in turn affect the money supply and influence the cost and availability of credit of all kinds. The critical questions of the day relate to the considerations which guide the expansion and contraction of Federal Reserve credit and to the methods by which this is accomplished. The authorities now have a large measure of discretion in the exercise of credit policy. Although they are bound by certain statutory duties and requirements, the Act does not prescribe automatic rules of action nor set forth any economic formula for the guidance of policy.
In other words, the Federal Reserve Act provides for great elasticity in making a mistake, a mistake which consists in issuing fiduciary media. It does not aim at controlling the fiduciary media or eliminating it, but making it elastic. In our language, sin has been made elastic.
The technical methods for accomplishing this elasticity are three:
1. Variations in the rediscount rate (that is, variations in the interest rate
2. Variations in the reserve requirements of the member banks:
3. Purchases and sales of government securities; sales of government securities by the Federal Reserve banks tighten the money market, and purchases by the Federal Reserve banks ease the money market.
We shall not at this time go into the technicalities of the Federal Reserve Banking System. The essential idea to remember is that it aims at elasticity and that that elasticity essentially consists in variations in the quantity of fiduciary media.
Underlying the monetary structure of the United States and of the world is gold. The nations of the world may think that they are "off" the gold standard, but really they are in error. They have only declared that they are off the gold standard and their prices are quoted in their own paper currencies, basically their fiduciary media. But mentally everybody attempts to adjust his thinking by saying to himself: what is the gold price of that currency (as well as the fiduciary media price). It is that financial calculation in terms of gold which controls the thinking of all well-informed people. The quotations may be in terms of fiduciary media; the valuations are in terms of gold or are endeavored to be appraised in terms o! f gold. The peoples of the world may not be able quickly and clearly to recompute their fiduciary media money into terms of gold money. They may make some serious errors. They may be wrong for a considerable period of time. But eventually all quotations are adjusted as well as can be to some currency measured by gold, or by gold itself.
In the monetary field the vicious doctrine of the late John Maynard Keynes consisted in this idea: to unhinge the fiduciary media of a particular country from relationship to gold. The idea is a mirage. It cannot be attained. It will not work.
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