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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 X Some Examples Of Pyramiding Of Profits

your little $18.00 will earn. Just do a little figuring, Joe. There it is. Over 3%. To be correct to four decimals, it is 3.8888% per year! Of course Bob and his buddies were raking in just a mere 30,666% profit a year. But, my boy, they are big fellows. Why, Jodie, they rule the United States, but if you Joe, just must have $18 to run down to Lufkin to pa's burial, and if you will get one of their good depositors to sign a $25 note to be paid in 30 days, they hand you the $18. Of course that is paying them interest at the rate of 133-1/3% a year in advance! On October 17, 1904, in a San Francisco old waterfront saloon building, A. Giannini opened up the Bank of Italy with $10,000 of his own money plus $140,000 his Italian buddies put up. In one year it had $1 million in resources and six months later it had increased to $1,900,000. Then the earthquake, but five years later it had reached $11 million with six branches. Then in 1913 he bought, 400 miles away, Los Angeles Park Bank with $6 million assets. ("Buying and merging banks is easy," said Giannini. "People don't understand that as soon as you buy a bank you have cash and assets, and as soon as you take over you get your money back." He simply paid by handing each stockholder a deposit slip which created new bank deposits. He never touched a dollar of his $11 million assets, and after adding the Park Bank $6 million the Bank of Italy's assets were $17 million. By 1919, at end of World War I, the Bank of Italy's assets had climbed to $150 million, just a measly 100,000% profit on his original $150,000 in 15 years! That's too slow for produce boy, Giannini "Big Bull of the West." So he added to straight commercial banking-financing corporations, selling his own and, other corporation securities, and handling investments. By 1927 he had $200 million assets. His stock-selling machinery could float $50 million to $100 million new stock issue overnight. A $100 share in 1919, after many dividends and a split up, reached a value of $1,700 in 1928. Said Giannini "I made $80 million profit for my stockholders in one year, $90 million the next." A linotype operator bought 100 shares in 1921 for $20,000, found them worth $150,000 in 1928, a 750% increase. He retired. A young bank teller

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