The Federal Reserve Is A Privately Owned Bank

[Mad Scientist]

For those of you who are under the impression that the Federal Reserve is a Gov't entity I ask you this: What other Gov't agency has Shareholders?
FRB: Federal Reserve Act: Section 7

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. The entitlement to dividends under subparagraph (A) shall be cumulative.

Well ok, they're not a Gov't agency, but surely they must pay taxes on what they make right? I mean, every privately owned bank pays taxes on earnings right?

Not the "Non-Federal" Reserve:

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.

Oh but they graciously pay property taxes. How nice of them!

I wish I was exempt from Federal, State and Local taxation!

 

[editec]

The Federal Reserve Is A Privately Owned Bank

Yup.

Its originally largest investor?

The BANK OF ENGLAND, though the beard J.P. Morgan.

 

[Toro]

nm

 

[Toro]

For those of you who are under the impression that the Federal Reserve is a Gov't entity I ask you this: What other Gov't agency has Shareholders?
FRB: Federal Reserve Act: Section 7

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. The entitlement to dividends under subparagraph (A) shall be cumulative.

Well ok, they're not a Gov't agency, but surely they must pay taxes on what they make right? I mean, every privately owned bank pays taxes on earnings right?

Not the "Non-Federal" Reserve:

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.

Oh but they graciously pay property taxes. How nice of them!

I wish I was exempt from Federal, State and Local taxation!

Virtually all of the profits are swept away to the Treasury. Banks who are members of the Federal Reserve System receive a 6% dividend off the profits from the regional banks. In past years, this dividend paid has accounted for 1%-2% of total profits generated by the Fed banks, i.e. 98%-99% of the profits go to the government.

That's not exactly a model for a private institution.

 

[expat_panama]

...Virtually all of the profits are swept away to the Treasury. Banks who are members of the Federal Reserve System receive a 6% dividend off the profits from the regional banks. In past years, this dividend paid has accounted for 1%-2% of total profits generated by the Fed banks, i.e. 98%-99% of the profits go to the government.

That's not exactly a model for a private institution.

True, and irrelevant. Hey Toro, they don't call him 'Mad' for nothing. Anyone starting a thread about sinister powerful 'shareholders' is really in this league--

--because any serious question of--

...What other Gov't agency has Shareholders?...

--should have stopped with--

* Corporation for National and Community Service (Americorps)
* Corporation for Public Broadcasting
* Federal Crop Insurance Corporation
* Federal Deposit Insurance Corporation
* Legal Services Corporation
* Millennium Challenge Corporation
* National Railroad Passenger Corporation (Amtrak)
* Overseas Private Investment Corporation
* Panama Canal Commission
* Pension Benefit Guaranty Corporation
* St. Lawrence Seaway Development Corporation
* Tennessee Valley Authority​

 

[editec]

Virtually all of the profits are swept away to the Treasury. Banks who are members of the Federal Reserve System receive a 6% dividend off the profits from the regional banks. In past years, this dividend paid has accounted for 1%-2% of total profits generated by the Fed banks, i.e. 98%-99% of the profits go to the government.

That's not exactly a model for a private institution.

AGreed.

It is neither fish nor fowl.

It is an entirely unique organziation that doesn't fit into the private v public model.

 

[Mad Scientist]

Virtually all of the profits are swept away to the Treasury. Banks who are members of the Federal Reserve System receive a 6% dividend off the profits from the regional banks. In past years, this dividend paid has accounted for 1%-2% of total profits generated by the Fed banks, i.e. 98%-99% of the profits go to the government.

That's not exactly a model for a private institution.

The Fed paid the Treasury 78 Billion last year. That more than covers the 16 Trillion they lent out doesn't it?
Audit: Fed Lent $16 Trillion Globally in Three Years | The American Pundit

The audit, conducted by the Government Accountability Office, found that the Federal Reserve lent $16 trillion — with a “t” — to global financial institutions in the past three years. That’s more than the entire gross domestic product (GDP) of the United States. Just in Federal Reserve loans to financial institutions.
In fact, about $3 trillion went to institutions located overseas — including in countries like the United Kingdom, Germany, Switzerland, and Belgium. Asset swap arrangements were executed with countries like Brazil, Singapore, Mexico, Norway, and South Korea. Twelve of those arrangements are ongoing.

Let's see; 16 Trillion divided by 78 Billion, it should only take the Fed a little over 200 years to get all that money back (and that's not including interest)

Tell me: What "Model of Economics" does that fit into? Rape and Pillage or just plain Mafia?

 

[CentristFiasco]

For those of you who are under the impression that the Federal Reserve is a Govt entity I ask you this: What other Govt agency has Shareholders?
FRB: Federal Reserve Act: Section 7

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. The entitlement to dividends under sub paragraph (A) shall be cumulative.

Well OK, they're not a Govt agency, but surely they must pay taxes on what they make right? I mean, every privately owned bank pays taxes on earnings right?

Not the "Non-Federal" Reserve:

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.

Oh but they graciously pay property taxes. How nice of them!

I wish I was exempt from Federal, State and Local taxation!

I'm liking what you've researched on your own and you bring an excellent point, pal about the Federal Reserve System. What I've researched in the past too is how if you search, "Recessions of the United States" by taking a read at the Wikipedia Contribution to the subject you'll find an interesting connection between the Reserve and the Private Sector Economy. Of course, the private sector engages in mischievous practices on practically a daily to monthly basis but they produce results which have always driven the American economy to remain strong. It's the fact that the Reserve keeps on interfering as if they're the government into these Matters to the extent, they end up making fools out of themselves by their assumptions that the economy is going to burst or even collapse. This is what makes the Reserve rise interest rates and so on and so forth. I can't believe that the Congress agreed to former President, Woodrow Wilson's idea about establishing an independent central banking entity. Unconstitutional.

General Reading at the Recessions of the United Statess

 

[EdwardBaiamonte]

I wish I was exempt from Federal, State and Local taxation!

do you think a person steals money from the Fed?

 

[DSGE]

Banks entering the Federal Reserve System are forced to buy equity in the Fed. The equity is there to absorb any losses the Fed may take on its balance sheet.

Private banks are allowed to elect presidents of the 12 regional reserve banks. The Board of Governors is comprised of 12 people appointed by the President of the US and confirmed by the senate. The Board of Governors controls the discount rate and reserve requirements.

The Federal Open Market Committee (FOMC) makes monetary policy decisions and is composed of 7 members of the Board of Governors (including the Chairman) and 5 regional presidents (who serve on a rotating basis).

So it's strange that private banks are allowed as much input as they get still, definitely something that needs to be reformed (why not just make monetary policy decisions the Board of Governors' job?). But the BoG forms a voting majority on the FOMC. Monetary policy decisions are ultimately decided by people appointed by the President and confirmed by the senate. So it's hard to say that it's a "privately owned bank" since the people who are forced to own equity ultimately don't get to make any decisions.

 

[Toro]

Plus 98% of the profits are swept away to the Treasury.

 

[Paulie]

Plus 98% of the profits are swept away to the Treasury.

This hardly reconciles the damage their monetary policy does to markets.

 

[EdwardBaiamonte]

Plus 98% of the profits are swept away to the Treasury.

This hardly reconciles the damage their monetary policy does to markets.

it does not matter one wit who owns the Fed. What matters is the Feds mandate and its understanding of monetary policy!

 

[OohPooPahDoo]

For those of you who are under the impression that the Federal Reserve is a Gov't entity I ask you this: What other Gov't agency has Shareholders?
FRB: Federal Reserve Act: Section 7

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. The entitlement to dividends under subparagraph (A) shall be cumulative.

Well ok, they're not a Gov't agency, but surely they must pay taxes on what they make right? I mean, every privately owned bank pays taxes on earnings right?

Not the "Non-Federal" Reserve:

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.

Oh but they graciously pay property taxes. How nice of them!

I wish I was exempt from Federal, State and Local taxation!

You are seriously confused.

The Federal Reserve itself is the entity that is exempt from taxation. The Federal Reserve already sends all of its profits to the Treasury.

The shareholders of the Federal Reserve are the commercial depository banks. Bank of America, for instance, owns shares in the Federal Reserve. Their income from their shares IS taxable income.

 

[waltky]

Would be better to base it on silver, IMO...

What If Ron Paul Really Killed the Fed?
3/14/12 --- The most radical proposals to surface during this year's presidential primaries are Congressman Ron Paul's dual efforts to abolish the Federal Reserve and return the Unites states to a monetary standard backed by gold.

Should he prevail in November, and make good on his mission, how would that feat be accomplished and, perhaps more importantly, how would it affect average Americans? It depends on whom you ask. Economists -- many freely admit it -- have a spotty record when it comes to prognostication. There are diverse schools of thought within economics, and it is hardly an exact science despite the seeming precision of its mathematical formulas.

Abolishing the Federal Reserve is to take less than a year during a Ron Paul presidency. It would start with an audit of the Fed and end with the Treasury Department assuming its duties, overseeing a monetary supply backed by gold. (Silver has been touted as a potential secondary monetary commodity). Paul is not the only high-profile figure who has championed an end to the Fed. The late Nobel Prize-winning economist Milton Friedman proposed, for instance, that the Federal Reserve could be eliminated and replaced by a computer control the nation's money supply without the interference of politics and emotion and at a shrewd and steady rate.

Across the political aisle from Paul -- though perhaps so far to the left it completes a full circle back to his libertarian brand of conservatism -- Ohio Democrat Dennis Kucinich (recently defeated in his home state's primary election) has floated his own such plan. A bill he filed in September, the National Emergency Defense Act, sees the termination of the Fed and its policies as a move necessary to improve employment, restore homeownership as a "safe harbor for savings," ensure the affordability of higher education and spark national infrastructure projects.

Source

 

[EdwardBaiamonte]

privately owned?

if you disapprove of private ownership you must say why you disapprove. In the course of trying you will come to understand that you are not qualified to approve or disapprove.