Are the 12 Regional Banks of the Fed Private Entities?

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Well, if you take the US Supreme Court and representatives of the Federal Reserve System at their own words, the case is pretty clear: the member banks of the Federal Reserve System are private corporations / banks.

By Lars Schall

Related to a book that I’m writing in German, I was asking myself whether the 12 regional Federal Reserve banks are privately owned.

The US Supreme Court, I found out, said this on January 3, 1928 in the case “United States Shipping Board Emergency Fleet Corporation v. Western Union Telegraph Co.“:

Instrumentalities like the national banks or the federal reserve banks, in which there are private interests, are not departments of the government. They are private corporations in which the government has an interest. Compare Bank of the United States v. Planters’ Bank, 9 Wheat. 904, 907, 6 L. Ed. 244.

See here for yourself.

Connected to the Freedom of Information Act (FOIA) case “Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan)“, Bloomberg reported in May 2009:

The New York Fed is one of 12 regional Federal Reserve banks and the one charged with monitoring capital markets. It is also managing $1.7 trillion of emergency lending programs. While the Fed’s Washington-based Board of Governors is a federal agency subject to the Freedom of Information Act and other government rules, the New York Fed and other regional banks maintain they are separate institutions, owned by their member banks, and not subject to federal restrictions.

See here for yourself.

In connection to the same FOIA case, Yvonne Mizusawa, Senior Council of the Board of Governors of the Federal Reserve System, stated on January 11, 2010 that the regional banks of the Federal Reserve System are indeed “private banks“.

See here for yourself.

Moreover, I’ve asked today Nomi Prins, the author of the book “All the Presidents‘ Bankers“, the following:

Do you think it is right to say that the Federal Reserve System includes private member banks, which receive a 6% dividend for their shares from the profits that the regional fed banks are making on their market operations?

Nomi Prins responded:

As I understand Section 7 of the Federal Reserve Act, that is the case. Stockholders, or member banks, of the Federal Reserve System are entitled to receive a 6% per annum dividend on their paid-in capital stock, and any surplus fund can be used to pay dividends in the event that any year’s current earnings of the Federal Reserve System are insufficient to cover funds for that year.

See the early 1922 letter from its General Counsel, here:

The material portions of Section 7 of the Federal Reserve Act read as follows:

„After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders shall be entitled to receive an annual dividend of six per centum on the paid-in capital stock, which dividend shall be cumulative. After the aforesaid dividend claims have been fully met, the net earnings shall be paid to the United States as a franchise tax except that the whole of such net earnings, including those for the year ending December thirty-first, nineteen hundred and eighteen, shall be paid into a surplus fund until it shall amount to one hundred per centum or the subscribed capital stock of such bank, and that thereafter ten per centum of such net earnings shall be paid into the surplus.

„…Should a Federal reserve bank be dissolved or go into liquidation, any surplus remaining, after the payment of all debts, dividend requirements as hereinbefore provided, as the par value of the stock, shall be paid to and become the property of the United States and shall be similarly applied.“

See here.

As additional information on the dividends, the law requires dividends are paid to reserve member banks, before the Fed transfers any excess earnings to the Treasury Dept. as interest on Federal Reserve notes, (see p 398 of the Fed’s 2013 annual report)…It should be noted that the amounts aren’t huge, for 2013, annual dividends were $1.65 billion.

See here.

Update – July 10, 2014:

On the same day, I wrote this e-mail to some people at the press office of the New York Fed:

Dear Ladies and Gentlemen,
I am a financial journalist from Germany. Related to this article, I would like to know whether the NY Fed pays local property tax, and if it doesn’t, on what ground does it claim exemption?

Moreover, may I ask you whether the NY Fed sees itself as a private entity as suggested in its response to the FOIA case “Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan)“? You find the quote to which I’m referring in the article above.

Furthermore, how does the NY Fed respond to the statement by Yvonne Mizusawa, Senior Council of the Board of Governors of the Federal Reserve System, that the regional banks of the Federal Reserve System are “private banks“? See also in the article above, please.

Thank you very much for your attention!

Kind regards,
Lars Schall.

That e-mail was inspired by an idea that it might be worthwhile to check whether the regional Fed banks pay local property tax. After all, that was how Wright Patman established that the Board of Governors, in Washington, is a public entity. But I believe the same logic would apply to the regional banks.

I’ve arranged a PDF copy of a certain passage in William Greider’s book “Secrets of the Temple,” so that you can read for yourself that strange story about Wright Patman and the Fed’s headquarter building in Washington DC – see here. According to Patman, “constitutionally, the Federal Reserve is a pretty queer duck.”

Furthermore, I wrote yesterday an e-mail to US economist L. Randall Wray. In the book that I’ve mentioned, I quote Prof. Wray from an essay about the so called “independence” of the Federal Reserve, and specifically one sentence in the sense of this article:

“The Glass-Owen bill split the difference, with private ownership and a decentralized system, but with the Treasury Secretary and the Comptroller of the Currency sitting on the Board.”

With regards to this sentence, I’ve asked him: Where does the „private ownership“ come from?

Prof. Wray replied by stating that I was “barking up the wrong tree” and pointing to a paper he co-authored (1). He added: “The Fed is a creature of congress. The ownership by member banks amts to getting a 6% return and some delegated fairly insignificant duties, which can be changed at any time by congress. The shares cannot be sold.”

Chris Powell, the press secretary of the Gold Anti-Trust Action Committee (GATA) in the US wrote me:

“While the share structure of the Federal Reserve System is peculiar, this issue has always seemed to me to be of no point. The system was created by federal law and is a creature of government. OF COURSE the system, like the rest of government, contrives reasons not to be accountable to the public, and OF COURSE the system, like all other government agencies, is captured by the private interests it is supposed to regulate, and OF COURSE as a result it tends not to serve the public interest. But it remains a creature of government and the public, through its elected representatives, could take control of it any time the public could mobilize itself to do so.

„If the Federal Reserve Board was not a government agency, GATA could not have sued it under the Freedom of Information Act and won a federal court order for disclosure against it (and a court award for legal costs) a few years ago. And didn’t Bloomberg win its similar case against the New York Fed for the QE records?”

I’ve told Powell about the court ruling from March 19, 2010 by the United States Court of Appeals, Second Circuit – see here. It said:

“As the records of the Federal Reserve Bank of New York had not been searched, we need not decide here whether what may be found must be produced.”

Chris Powell replied: “Thanks for the resolution of the Bloomberg case. I think that settles the issue. The FOI Act applies only to government agencies.”

“All in all, nothing to see here, I guess…”, I thought.

I also saw then two more significant statements:

1) The Board and the Clearing House appeal only on the ground that a proper interpretation of FOIA Exemption 4 covers the requested material. No contest is made as to Exemption 5, or as to the scope of the Board’s (disputed) obligation to conduct a search of records at the Federal Reserve Bank of New York. Any argument that the Board had as to Exemption 5, or either side had as to the scope of the ordered search at the Federal Reserve Bank of New York is therefore deemed waived. Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir.1998). Whether certain records of the twelve Federal Reserve Banks are records of the Board is an issue that is decided in an opinion-filed simultaneously with this opinion-in the appeal (heard in tandem with this appeal) from the Southern District’s decision in Fox News Network, LLC v. Board of Governors of the Fed. Reserve Sys., 639 F.Supp.2d 384 (S.D.N.Y.2009). See Fox News Network, LLC v. Bd. of Governors of the Fed. Reserve Sys, —F.3d —-, 2010 WL 986665 (2d Cir.2010). (2)

2) The requests sought (in relevant part) detail about loans that the twelve Federal Reserve Banks made to private banks in April and May 2008 at the Discount Window and pursuant to ad hoc emergency lending programs (described in the margin )… The Board denied these requests (in relevant part) in December 2008. The Board conceded possession of records showing the loan information Bloomberg sought, with the exception of the collateral; collateral information is held by the lending Federal Reserve Banks. But the Board advised that the responsive information in its possession—contained in “Remaining Term Reports”–was exempt from disclosure under FOIA Exemptions 4 and 5. The Board did not search the lending records of the twelve Federal Reserve Banks, explaining that a request to the Board does not constitute a request for information held by those institutions.

Chris Powell then replied: “Yes. They can claim that the law exempts certain records from disclosure but they can’t claim that they are not a government agency or that they are not covered by the law.”

I asked Powell in a provocative manner: “Why not filing a FOIA request re the NY Fed and the German gold? Perhaps, one could solve two issues at once…”

Powell: “That WOULD be an interesting one. One must remember that while GATA won its case against the Fed in a technical sense, the court still ruled that the Fed could keep all of its gold records except one. Among the records the Fed was allowed to keep secret were records of gold swaps with foreign banks.”

I asked: “Have you specifically asked for something re the NY Fed?”

“Yes”, he wrote back. “A few months ago I asked the New York Fed whether, as its former vice president said in a speech, the bank provided gold accounts to banks. Couldn’t get the publicist to answer and so wrote to Dudley, the NYFed president. Couldn’t get an answer there either and so wrote to my congressman and senators to ask them to bludgeon an answer out of the NYFed.

“Maybe a month after that I got a letter from an underling to Dudley contradicting the speech of the former NYFed vice president. See the middle of the speech here. And then this.”

If the NY Fed responds to my questions, I will let you know, although I wouldn’t expect anything; they’re not very good at answering my questions – as you can see for yourself here, for instance.

I will also let you know whether Yvonne Mizusawa, the Senior Council of the Board of Governors of the Federal Reserve System, has anything to add to her remarks that were brought forward in the Second Circuit Court of Appeals related to the FOIA cases “Fox News Network LLC v. Board of Governors of the Federal Reserve System” and “Bloomberg LP v. Board of Governors of the Federal Reserve System”. Today I sent a press inquiry to Michelle A. Smith, press secretary of the Washington-based Board of Governors, in order to ask her to forward it to Ms. Mizusawa, whom I made familiar with my e-mail to the NY Fed – and then added the following:

May I ask you on the record:

Why are the regional banks of the Federal Reserve System “private banks“?

How do they differ from other private banks?

Thank you for your attention!

Kind regards,
Lars Schall.

To be continued, I guess…

Update – July 11, 2014:

Thank You For Filling Out This Form

Shown below is your submission to NYC.gov on Friday, July 11, 2014 at 11:09:48

This form resides at http://www.nyc.gov/html/dof/html/contact/contact_emailcorrespondence.shtml

NAME of FIELDS
DATA
NAME: Lars Schall
YOUR POSITION: Financial Journalist
QUESTION TYPE: OTHER
QUESTION: Press Inquiry Dear Ladies and Gentlemen, I haven’t been able to contact directly your press office. Related to a current research of mine, I would like to know whether the NY Fed pays local property tax, and if it doesn’t, on what ground does it claim exemption? Is this public information? Kind regards, Lars Schall.

What you’ve just read is an inquiry that I sent today to the tax department of the City of New York, after I had tried for 45 minutes to get in touch with its press office via phone.

I think, a Title Insurance Company could tell you the answer within 5 minutes. But, you would have to hire them and pay about $500 for the search. All they would need is the street address of the building.

In addition, pull this up, and then go to page 25, #12: Federal Reserve Bank of New York / 33 Liberty Street / Block 35 / Lot 1.

This is a register of all public buildings in NYC – hospitals; jails; fire halls; schools; etc. Public Buildings are exempt from real estate taxes. See here. All exemptions are listed there. Check out the specific exemption for: Federal property (see United States, property owned by). Other exemptions may apply. You would have to ask someone to research the building – the value (assessment) for real estate tax purposes is a matter of public record. If there is an exemption, the particular exemption will be stated on the „card“ for that particular property: 33 Liberty Street / Block 35 / Lot 1.

The foregoing does not answer my questions, but provides a good guess that: This property is exempt from real estate taxes because it is classified as „Federal property“.

After he saw my inquiry re the NYC Department of Finance, Chris Powell wrote me:

“I’m sure that the New York Fed pays no local property taxes. But to resolve the issue of the government nature of the Fed and the regional Federal Reserve banks, it is necessary only to look at a dollar bill.

“On the front the bill says ’Federal Reserve Note’ on the top and then, just underneath, ’The United States of America.’ It is signed by the treasurer of the United States and the secretary of the treasury, both U.S. government officials. It carries the seal of a regional Federal Reserve bank; all the regional banks issue such notes. And it says: ’This note is legal tender for all debts, public and private.’ That is, the law — made by the government — is what gives value to Federal Reserve notes.

“On the back the bill carries the Great Seal of the United States.

“If the Fed and its regional banks were not government agencies, the dollar bill would look very different.”

And yet, we still have Yvonne Mizusawa saying officially on behalf of the Board of Governors of the Federal Reserve System: The regional banks of the Fed are not agencies, they are private banks.

I haven’t made this up.

After I had not seen any response from Ms. Smith coming my way with regards to my inquiry, I looked for Ms. Mizusawa’s e-mail address at the Fed – and I was successful. Therefore, I have been able to write her directly:

Dear Ms. Mizusawa,

my name is Lars Schall. I’ve tried yesterday to get in touch with you via Michelle A. Smith, press secretary of the Board of Governors of the FRS. I copy my inquiry below.

I hope this e-mail address that I just found in the web works.

I would appreciate a response from you very much!

Kind regards,

Lars Schall.

Then followed a copy of my original inquiry that I sent to Ms. Smith.

To be continued, I guess…

Update – July 15, 2014: The Final Twist

Until today I haven’t received any response from the NY Fed or Ms. Mizusawa. And that’s the end of that part of the story, I would say.

However, meanwhile, it came to my attention what the Fed is writing about itself on its own web site as the answer to the question “Does the Federal Reserve pay taxes?“ – take a look for yourself here:

“After paying expenses, the Fed turns our profits over to the Treasury Department each year. We pay no income taxes. However, we pay real estate taxes, personnel related taxes such as unemployment insurance, workers compensation tax and social security withholding tax, etc.“

Have you seen it? This is the point where it becomes quite interesting. It said: we pay real estate taxes… Real estate taxes are local property taxes. Why does it pay such taxes when it is supposedly exempt from such taxes – and when William Greider told his readers that story about the Federal Reserve building in Washington DC in order to show them that the Fed is a public entity through and through?

And then I received an e-mail from New York, subject: City of New York – Correspondence #1-1-990246465 Department of Finance – General Question. It said:

Dear Mr. Schall,
That property, listed as 19 Liberty Street, is in our records as block 66, lot 1 for Manhattan.
There is no exemption or abatement on the property. A recent payment of $3,589,297.91 has been applied to 2014/2015 Property Tax and a filing fee with the NYC Tax Commission.
Thank you for your correspondence.
David Feinberg
Finance Correspondence Unit

I wrote back:

Dear Mr. Feinberg,
I need a clarification, I’m afraid. The note from the New York tax office cites property at 19 Liberty St. But the New York Fed’s Internet site gives its address as 33 Liberty St. – see here.
Best,
Lars Schall.

The response was as follows:

Dear Mr. Schall,
Many tax lots cover a range of addresses. Sometimes the address in our property system is different from the address used by the owner. 19 Liberty St. is also the bill mailing address. If they request it, we would have no problem changing the address in our files.

David Feinberg
Finance Correspondence Unit

So, now you know that the NY Fed pays local property taxes.

Moreover, to conclude this story, here is a PDF file of an interview with Dino Kos of the FRBNY, which was conducted for the 9/11 Commission in January 2004. At the bottom of page 1 Kos describes the 12 Fed Banks as „basically private entities with a special set of customers“. (3)

But again, nothing to see here, I guess…

Notes:

(1) “Federal Reserve Bank Governance and Independence during Financial Crisis”, published at Levy Economics Institute of Bard College, April 2014, here. You may also want to read an interview that I did with Randall Wray in the past: „Truths and Myths of the Federal Reserve“, published on May 6, 2010 here.

(2) The court ruling can be found here. „The Federal Reserve System–the central bank of the United States–is composed of twelve regional Federal Reserve Banks and the defendant-appellee Board of Governors of the Federal Reserve System („Board“) in Washington, D.C. The Board is a federal agency that (among other things) supervises the operations of the twelve Federal Reserve Banks. (…) As the district court concluded, not all lending records of the twelve Federal Reserve Banks necessarily become records of the Board. However, Board regulations provide that some records at the Federal Reserve Banks– those kept at the Federal Reserve Banks under certain conditions for „administrative reasons“–are records of the Board; these must be searched. We remand to the district court to order further searches and to determine if the fruits of those searches must be disclosed. The district court did not reach the question of whether the Board misconstrued the scope of the Fox News FOIA requests (the district court having ruled these documents would be [**6] exempt from disclosure in any instance); we remand for further consideration of that question as well.“

(3) Compare National Commission on Terrorist Attacks Upon the United States (11/27/2002 – 08/21/2004): Memorandum for the Record (MFR) of the Briefing by Dino Kos of the Federal Reserve Bank of New York Conducted by Team 8, 01/09/2004, published at Online Public Access here.

The interviewer, Emily Walker, writes about her briefing of Dino Kos, who was back then at the NY Fed responsible for open market operations, foreign exchange trading, treasury auctions, the discount window, and the correspondent banking services provided by the FRBNY to other central banks:

“He gave me a general overview of the Federal Reserve System in order to clarify the role of the FRBNY versus the other regional fed banks as well as the differentiation with the Federal Reserve Board in Washington, D.C. He said that the Washington Federal Reserve is a Government agency, not a bank. It does not have means to execute payments, make loans, trade etc. It provides policies on how the reserve banks should operate. It makes the critical decisions. Below the Federal Reserve Agency in DC are the 12 Federal Reserve Banks. They have accounts, manage portfolios, have stockholders (commercial banks), and are basically private entities with a special set of customers. Their profits go back to the US Treasury. The FRBNY is an operating arm of the Federal Reserve in the markets. They buy or sell securities to drain or add liquidity to the marketplace and set the interest rate. The Federal Reserve in DC makes the policy and the FRBNY executes. The FRBNY operates the FEDWIRE which is the technological mechanism which banks can make payments to each other. (He added that it was unaffected by 9-11 because it was in East Rutherford NJ). …. He did say that the Fedwire is the hub to the rest of the banks and if those links are cut (from the banks – which they were on 9-11), the banks have to call and manually make the payments. He also said that the CHIPs system is the private sector clearing house system that pulls together the payment instructions and nets them out at the end of the day and send the remaining to be settled to the FEDWIRE.”

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18 Responses to “Are the 12 Regional Banks of the Fed Private Entities?”

  1. curlydan sagt:

    yes, glad you found this out. I knew it long ago because I talked to an employee of the Fed. The „Federal“ in the Fed is kind of a joke. The Fed is not run for „us“, it’s run for the banks–all the private ones. And as you might expect, the big boys dominate it.

  2. Tester sagt:

    The Social Security is a privately owned corporation too, if you view it through the same lens. The chief there is also „chosen“ by the president and can act independently etc.

    This „private FED“ talk is nonsense. First, the membership and (non-transferrable) stocks (limited to $20.000 max. for ANY private shareholders) are mandatory. Second, the dividends are peanuts and a side-show.

    The place where banks make the big money is in their ability to create money out of thin air and get the (compound) interest – which has nothing to do with the FED as such, it would be the same if the FED didn’t exist. And of course the whole creative „investment/credit instruments“ where they blow up the money 100-fold yet again.

    As for the „private“ shareholders, these are mostly entities that belong to the state – pension funds etc. You can read it in every darn C.A.F.R. you can find. And every municipality, company etc. have a full CAFR on their website with all their investments listed.

    To say it more bluntly, pretty much 90% of everything of value on this planet belongs to the US Government via the countless „stealth“ funds. Or even more bluntly, if you think that the US government as we know it would EVER let the control of anything out of its hands, I have a bridge in Brroklyn to sell you.

    Poor research, bad translation (it is legalese, not regular english), and still learned nothing – you should do your homework better.

  3. Tester sagt:

    From the „Federal Reserve Act“ section 2:

    „No individual, copartnership, or corporation other than a member bank of its district shall be permitted to subscribe for or to hold at any time more than $20,000 par value of stock in any Federal reserve bank. Such stock shall be known as public stock and may be transferred on the books of the Federal reserve bank by the chairman of the board of directors of such bank.“

    And you missed a part of sec. 7:

    „SEC. 7. After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders shall be entitled to receive an annual dividend of six per centum on the paid-in capital stock, which dividend shall be cumulative. After the aforesaid dividend claims have been fully met, all the net earnings shall be paid to the United States as a franchise tax, except that one-half of such net earnings shall be paid into a surplus fund until it shall amount to forty per centum of the paid-in capital stock of such bank.

    The net earnings derived by the United States from Federal reserve banks shall, in the discretion of the Secretary, be used to supplement the gold reserve held against outstanding United States notes, or shall be applied to the reduction of the outstanding bonded indebtedness of the United States under regulations to be prescribed by the Secretary of the Treasury….“

  4. Tester sagt:

    Citing from the link above:

    „There are no ownership shareholders of the Federal Reserve because the Federal Reserve does not offer ownership stock. Wallmart and Monsanto offer “public” ownership stock, for which people and government has been purchasing for decades. But government corporations do not offer public (ownership) stock, which means that government is not owned.

    Thus, the myth that “corporations own the government” can also be dismissed here. It is quite the opposite, actually. The word “own” is the legal holding of stock of a corporation. So while there is very much a symbiotic relationship between corporations (including banks) and government, the fact is that government owns shares in corporations, and not the other way around. The reality is that at any time government, with the swish of a pen or the dumping of its collective stock, can indeed shut down or make insignificant any corporation it chooses to. On the other hand, no corporation can do the same to government.

    These are the facts. And while these facts do not preclude the idea that a bunch of evil bankers and corporate elitists control the government from beyond its borders, they do show quite clearly that while government may be controlled by these men, government is not “owned” by these men.“

  5. […] Are the 12 Regional Banks of the Fed Private Entities? […]

  6. Charlie Sitzes sagt:

    Edward Griffin’s book, „The Creature From Jekyll Island answers the question.

    As he explains, the Federal Reserve is not Federal and it has no reserves.

    Thanks for your efforts to sort this all out.

  7. Rick sagt:

    I live in the Dallas-Ft. Worth area and the Federal Reserve Bank of Dallas is listed in the business pages of the phone book. Not in the government pages. I would also point out that all corporations, except for corporate souls or some other rare types of corporations are created by the state. Not just the Federal Reserve. A government „Agency“ may have specific legal meaning. Normally an „Agent“ is anyone acting in behalf of another an any matter. However that does not make them an Agent in all things the Agent does, only when doing things the principal has authorized on its behalf.

  8. RedTrack.ME sagt:

    […] Submitted by Lars Schall or LarsSchall.com, […]

  9. […] Submitted by Lars Schall or LarsSchall.com, […]

  10. Phil sagt:

    „all the regional banks issue such notes“

    Technically, Federal Reserve notes are not issued by the regional Reserve Banks. They are issued ‚at the discretion of‘ the Board of Governors, by the Federal Reserve Agents, TO the Reserve Banks, which then sell them to member banks.

    „Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.“

    http://www.law.cornell.edu/uscode/text/12/411

    „Any Federal Reserve bank may make application to the local Federal Reserve agent for such amount of the Federal Reserve notes hereinbefore provided for as it may require. Such application shall be accompanied with a tender to the local Federal Reserve agent of collateral in amount equal to the sum of the Federal Reserve notes thus applied for and issued pursuant to such application…. In no event shall such collateral security be less than the amount of Federal Reserve notes applied for. The Federal Reserve agent shall each day notify the Board of Governors of the Federal Reserve System of all issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to which he is accredited. The said Board of Governors of the Federal Reserve System may at any time call upon a Federal Reserve bank for additional security to protect the Federal Reserve notes issued to it. Collateral shall not be required for Federal Reserve notes which are held in the vaults of, or are otherwise held by or on behalf of, Federal Reserve banks.“

    http://www.law.cornell.edu/uscode/text/12/412

  11. Roger sagt:

    The following is from G. Edward Griffin’s book, „The Creature from Jekyll Island“ (an edition was also published in German), Appendix A:

    „This leads to the troublesome question of ownership. The federal government does not own any of the stock in the System. In that sense, the Fed is privately owned. That, however, is misleading in that implies a typical private-ownership relationship in which the stockholders own and control. Nothing can be further from the truth. In this case, the stock carries no proprietary interest, cannot be sold or pledged as collateral, and does not carry ordinary voting rights. … It is not a government agency and is is not a private corporation in the normal sense of the word. It is subject to political control yet, because of its tremendous power over politicians and the elective process, it has managed to remain independent of political oversight. …“

  12. Stilicho sagt:

    Lars,

    You will find this of interest. The Federal Reserve Bank of Cleveland has a branch office in Cincinnati, OH. The main address is 150 E. Fourth St. (they also have some nearby, smaller offices on the same street. Fortunately, Cincinnati (Hamilton County, Ohio) has its property tax records online. A search brings up the Fed property and it shows the appraised value of the property and what the tax assessment would be, but does not show it as paid. Neither does not indicate a reason for the lack of payment. Nearby commercial properties on the same street show the assessments levied against the corporate owners and, importantly, also show the amounts actually paid. Here’s the URL: http://www.hamiltoncountyauditor.org/realestateii/ROVER30.ASP

    Basically, this indicates that the Federal Reserve Bank of Cleveland is exempt from local property taxes. Hope this helps.

  13. Sir:
    See Lewis v. United States, 680 F.2d 1239 (1982) where the US Supreme Court says, Federal reserve banks are not federal instrumentalities for purposes of a Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations in light of fact that direct supervision and control of each bank is exercised by board of directors, federal reserve banks, though heavily regulated, are locally controlled by their member banks, banks are listed neither as „wholly owned“ government corporations nor as „mixed ownership“ corporations; federal reserve banks receive no appropriated funds from Congress and the banks are empowered to sue and be sued in their own names. . . .

    Sounds like to me they are privately owned corporations.

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