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nydus/The Legalized Crime of BankingPublic

Silas Walter Adams critiques the Federal Reserve Banking System, arguing that its monetary policies have significantly inflated the costs of war and national debt. The book examines the historical impact of private banking practices on the American economy and proposes a constitutional alternative for the management of the nation's money supply.

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Table of Contents

Chapter VII Simplified Mechanics of Reserve Banking

state. As often as the bankers resell an investment obligation, they transfer to their books a portion of those $1,250 billion bank deposits, and when all notes are paid or all investment obligations are sold, the banks then will have the entire $1,250 billion new bank deposits on their side of the ledger. And they have the bonds — Total $1,500 million! It is an endless chain, forged with three links, endlessly repeated: (1) create bank reserves; (2) lend Bank credit; (3) which creates bank deposits. The forging of these three colourful links go on every banking hour, year in and year out, as the chain about our necks grows longer and longer, ever recoiling around our necks; until now economic death is written on every slave's face. All these steps are just the hocus pocus of the sleight of hand artist, who must move the shell from hand to hand so quickly that the eye cannot follow the movements, and at once the victim becomes confused and actually must "guess" under which shell is the quarter. Bankers will not say that deposits cancel out; they will only say, if they say anything, that these deposits "tend to cancel out." Too at any time the bank may buy investment obligations, and perhaps pay for them by chequeing against the bank's undivided profits but banks have forgotten how to pay cash or their own deposits for investment obligations. They always pay for them by giving the seller deposit credits to his account; which increases the total deposits of the bank. Bank deposits have accumulated in such vast sums to the credit of the bankers, that they have entered the "loansharks' field." In every town and city many "finance companies" have opened offices, and are lending money supplied to them by the banks who own them. They are using the same methods the parent loansharks have always used. During the last few years lending offices, finance companies, have opened throughout the Nation, many in every town. These are departments of banks, through which bankers are now siphoning their actual deposits" not new deposits" into the people's pockets. The banks in this fashion have entered the loanshark field, and are practicing the same sort of robbery that the hole-in-the-wall loansharks have been practicing only these new

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