SteveSy wrote:The entire thing is commercially owned. If the government repealed the act tomorrow the banks would lose monetary control but the banks would still exist, they are federally chartered corporations, but a corporation none the less. Their stock is 100% held by other private commercial bank.
The Federal Reserve district banks are setup SIMILAR to corporations but the stock "ownership" does not confer any rights of ownership beyond the par value of the stock.
SteveSy wrote:The number of directors selected at each regional bank gives the commercial banks the majority 6-3 vote.
While it is true that 6 out of 9 board of directors for each district bank are elected by the member banks, there are specific rules regarding those selected directors. Those six directors that are elected by the member banks cannot be officers, directors, or employees of ANY bank. Three of the six cannot even be shareholders in ANY bank. Each member bank can only nominate TWO directors. Each member bank gets ONE vote per seat regardless of how many shares they have subscribed to. Additionally, all directors are subject to the approval of the Board of Governors.
SteveSy wrote:The Board of Governors is appointed by the President and approved by the Senate but those nominees come from the suggestion of the regional banks. Once appointed they are there for up to 14 years if they desire and can not be removed by the President or congress.
Famspear has already pointed out how wrong you are about that.
SteveSy wrote:The government isn't going to end the Fed,...
I never said they would. I said they could. However, many Ron Paul supporter claim he would end the Federal Reserve.
SteveSy wrote: ...more importantly congress has no control over anything the banks do, at most congress gets an update of what's happening.
Congress gets formal annual updates and the GAO performs certain types of audits and inspections. Full financial audits are performed by independent auditors. Congress could pass legislation that would give them more direct control, but the Federal Reserve was setup the way it was to provide a certain amount of independence. Do you really think politicians would make sound economic decisions?
SteveSy wrote:The government could if it wanted not renew their charter as Jackson once did but the banks would not just end they would just be reformed due to the fact that the regional bank's stock is commercially owned anyway.
The Federal Reserve Act was originally written with a time limit, similar to the act that created the First Bank of the U.S. and the Second Bank of the U.S., however, legislation by Congress in 1927 removed the time limit. Do you know who proposed that legislation? Congressman Lewis T. McFadden
However, as I mentioned before, the stock subscription to the district banks do not confer any rights of ownership. Also, national banks, like Bank of America, N.A., don't have any choice whether or not to subscribe to Federal Reserve stock. The amount they MUST subscribe to is set BY LAW to 3% of their paid-in capital with an additional 3% subject to call by the Board of Governors. If a member bank has a reduction in their paid-in capital, they must SURRENDER the additional shares they hold above the 3% of their new paid-in capital amount. If a member bank has an increase in their paid-in capital, they must subscribe to additional shares. State banks can choose whether or not to become members of the system if they meet certain requirements. However, to become a member bank, the stock subscription is a requirement of that membership.
If a member bank liquidates, they are required to SURRENDER their shares back to the district bank. The district bank pays the liquidated bank back the amount of the subscription plus any unpaid dividend. Beyond that, the member banks do not have any rights to any assets of the district banks or of the Federal Reserve system.
SteveSy wrote:In Jackson's time the chartered bank had much less control than they do now. Go back and look how tough it was when he refused to renew the charter. Now it would be devastation.
On that, we can agree. As I mentioned, I said Congress COULD dissolve the Federal Reserve. I never said they would and I never said it would be smart.
SteveSy wrote:You act as if the government has all this control when they really have none.
You act as if the member banks have all this control when, in reality, they have none.
SteveSy wrote:You asked where the interest goes, well anything beyond operating expenses is returned to the treasury...
Well, at least you got something right.
SteveSy wrote:yes that sounds great until you realize the operating expense, which include services provided by private banks, also includes a 6% dividend back to the stockholders who are, yes, commercial banks. The private banks are making big bucks.
That dividend is very small compared to the amount of interest returned to the Treasury. BTW, the purpose of that dividend is to compensate the member banks for having to tie up a portion of their capital in the district banks. All corporations, not just commercial banks, use their capital to hopefully generate profit. Banks who become members of the Federal Reserve system are required to give up the use of some of that capital. The 6% annual dividend is to compensate them for the loss of the use of that capital. BTW, I don't have the exact numbers, but the average dividend paid to a member bank was about $300 thousand.
SteveSy wrote:As far as saying I'm clueless....sure, when you said the government could just take their treasury securities from the Fed, have them for assets, and those securities would never have to be repaid topped the cake. I have no worries about outdoing your cluelessness.
The government doesn't own nor controls the banks that have possession of those securities.
I stand by my statement.
Light travels faster than sound, which is why some people appear bright, until you hear them speak.
