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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

finance agencies use dignified terms to cover their usurious practices, never the obnoxious term "interest." Cost of investigating the borrowers' responsibilities, expense of making small loans, on and on; and interest is not mentioned. They don't have the borrower sign a note any more, they present him a "loan agreement" which the borrower signs, with the unctuous statement, "here is your cheque, we will complete filling in the agreement (the terms of which have not been discussed), and mail them to you in a few days." When the nineteen men who met in New York City to ponder our money supply back in the early fifties, the problem they pondered was, a double header: (a) What are we going to do with the hundreds of billions of deposit dollars we have piled up since World War II? (b) Must we stop the pumps and begin to siphon this excess money off. So they ordered the interest rate increased and informed their customers that "The Government will not let us make that sort of loan." They always say the "Government won't let us do that." When as a matter of fact, they tell the Government what it can do and never bother about what the Government may think about what they do. These 19 men had put on the squeeze, and today the little fellow can't get money at the banks' main loan desk; he has to go to another building and get a loan from an agency of the bank, and pay 50 percent of the total loan as "carrying charges." Ask a bank if it is behind or owns that lending agency, and he will blandly say, "Why, of course not we are in the money lending business ourselves." But back to the results of the chain of actions and reactions the issuing of $250 billion U.S. Bonds had on the volume of money following World War II. We will suppose the volume of bank deposits (time and demand deposits) at the beginning of the war was $33,360,000,000. By 1947 these deposits had increased to $108,500,000,000, or over 300 percent. That represents only time and demand deposits to the accounts of customers of banks. Lending has been wild since 1947, as the Korean War shot new blood into the industrial and economic arteries, and a building boom and industrial expansion that has astounded the world has been financed by additions

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