Federal Reserve "Accounts"
http://quod.lib.umich.edu/p/ppotpus/...+reserve+notes
If one wants a clear depiction of the system, straight from the horse's mouth, FDR himself...(Just read page 18 and 19, gems abound.)
The federal reserve was originally created as a temporary backup to solve liquidity issues. If there was a run on the bank, they needed a "lender of last resort", a separate currency to allow for those times when a bank couldn't meet the demands for real currency. This is why the notes had to be redeemable, as they were issued, they needed to have value. Since it was just a temporary liquidity issue, the notes should be redeemed, and when the crisis is over, all is well.
This was the inception of the beast that we know now. They started their money manipulation scheme by toying with their reserve requirements, have since abandoned that practice as more control has been found in total control of interest rates through the discount window.
Either way, in the text above that David posts on a regular basis, the things that stood out to me the most...
Quote:
...was to prevent the withdrawal of any further gold and currency. The old War Statute of 1917 had not been repealed and we used it. It was an exceedingly useful instrument.
You might hoard gold, therefore you are the enemy (according to FDR, and Woodrow Wilson)! We now can steal your gold, thanks...
Quote:
..was to provide some form of circulating medium for the country in addition to the outstanding currency, because a large part had been put into hiding. I have confidence the public will accept that circulating medium.
The circulating medium is obviously the FRN. Before this he states how the county now needed cooperation between the States and the Federal Government. The FRN is federal, this statement gives a little insight into how little control the Feds had of the system prior to this date.
Quote:
It is proposed through the Treasury Department that every bank will be authorized to open new accounts, and that the money deposited in the new accounts can be withdrawn at any time. The only way in which that money can be kept "absolutely safe" beyond peradventure of doubt is by using methods to keep it safe-first, keeping the money in cash the way it is put in; second, depositing it in the Federal Reserve Bank; and third, purchasing Government bonds with it.
New accounts. These new accounts are held in the federal reserve system, same as today.
Quote:
Recognized Government bonds (I believe federal reserve notes here) are as safe as Government currency (coin and united states notes, gold certificates, silver certificates, etc.). They have the same credit in back of them. And, therefore, if we can persuade people all throughout the country, when their salary checks come in, to deposit them in new accounts, which will be held in trust and kept in on of the new forms I have mentioned, we shall have made progress
So obviously it's a con. The biggest thing from reading this over and reflecting, a bank gets it's charter from the state. It is a bank that is a "member" of the federal reserve system. It is not a federal reserve bank. It was in the past and is now a bank that accepts multiple types of currency, having a currency in federal reserve notes back in 1933 became the preferred method as it is today, and since they just assume you keep your money that way, because it's the norm. They have to accept your money the way you demand it, hell they are a bank. The federal reserve notes are held, as FDR said, "in a new account." They prefer FRNs because they can fractionally lend them, a huge plus.
Now, I know all that is required is a demand. But I'm trying to go a little further. I bought a few notes, a silver certificate, a united states note, and an old federal reserve note with the "redeemable" verbiage on it. I also contacted the VP at my credit union and backed him into a corner. I said, what if I deposit $20 into a new account with these united states notes, it is illegal for you to use them as a reserve. He basically stated those would be added to the general fund, and used a reserve. He also tried to add the practicality aspect of it, trying to say the amount is so small, it wouldn't matter anyway. I said I just want to know how I can deposit this form of currency and allow you to keep it's substance (he has seen the united states notes code we talk about frequently). He's forwarded it to legal. The goal of all this is to get the terminology. If it is possible, what "type" of account do they say it is. Further, can I deposit a check in that form, the form of a united states note into that account, and it be held in that type. I actually care what happens behind the clerks window, as I find this to be my most assured way of passing the info to others. "I have a solid account with my credit union, of this type, that is proven by their accounting dept. to not break the law and be used a reserve currency in fractional lending." I don't think I'll get it out of them, but, a bank is a bank first and a member of the federal reserve system second, they just prefer FRNs and don't want you to know about anything else. As I stated earlier, I'll update any responses I receive.
Might be barking up the wrong tree with a credit union...
My question...
Quote:
I have some old Federal Reserve Notes with the language "is redeemable in lawful money at the united states treasury or at any federal reserve bank."
Is a credit union a federal reserve bank? I know it is a member of the Federal Reserve Bank, but, according to the language above, is it specifically a "federal reserve bank," or does this mean 1 of the 12 district banks?
The response
Quote:
hank you for your recent correspondence to the Federal Reserve Board regarding Federal Reserve notes. Because of the nature of your question, you may be interested in our Frequently Asked Questions about currency and coin:
http://www.federalreserve.gov/faqs/currency-coin.htm
You may also be interested in the Federal Reserve Bank of Philadephia's online publication, "Symbols on American Money," which can be found at
http://www.philadelphiafed.org/educa...merican-money/.
As for your question about credit unions, please know the Federal Reserve supervises only state-chartered banks that are members of the Federal Reserve System. The National Credit Union Administration (NCUA) is the agency that supervises and regulates federal credit unions.
I hope this information is helpful.
Sincerely,
LOD
Board Staff
I am going to pursue a bank, my understanding was credit union and bank are nearly identical, just with different owners, maybe a little more restriction with a credit union. Either way, better off at a bank I would say, at least judging from the email.