“The Reserve banks are owned by the private commercial banks, including the bank that bought the bonds. The Federal Reserve banks are Federal in name only; they are owned lock, stock and barrel by the private commercial banks, which have invested a very small sum of money upon which they get 6% per annum.
“Remember, the U.S. Treasury has caused the Bureau of Engraving and Printing to print and deliver to the Federal Reserve Bank a million dollars in U.S. Government bonds, interest bearing, and then it added a million dollars in currency. Each is a Government obligation. The Federal Reserve Bank delivers to the local commercial bank the million dollars in bonds and obtains for the Government a million dollars in bank deposits which it cheques out to pay its debts. Then the Reserve Bank delivers to the local commercial bank the million dollars in cash.
“The present banking system, thru the use of the Government’s credit, as now (1943) proposed to finance the war can issue more than $240 billions in money, and every bit of it will be issued on the banks’ $8 billions capital and surplus and the Government’s credit. Of course, it will be the Government’s credit that will make it secure, as the $8 billions will be insufficient for that purpose. . . . The Government pays interest for the use of its own credit.
“Who created such a system that is costing the taxpayers $1,750,000,000 this year (1942) and will cost the taxpayer $4,500,000,000 a year (years and years ahead) when our anticipated expenditures for [our] war purposes are made? The answer is that such a system was built up over a long period of years (from 1781 to 1942). Congress (has) passed monetary laws without giving a great deal of attention to them, being told (by bankers who had written the bills) that money was (is) a mystery and that few people understood it and those understanding it were the ones wanting the laws. It was (and is) smart (alecky) for a Congressman to say, 'All I know about money is that I don’t have enough of it,’ or