Renewal

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Xeno
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Renewal

I have to put the question here because once you hear/read it you will realize that the ramifications encompass everything from war to the price of trinkets.

As we all know and should be aware, The Federal Reserve's bank charter is coming up for renewal. The authorization for the Fed's banking charter was passed by congress and signed by the prez. during Christmas break in 1912 but the Fed did not go operational until July of 1913 (i think). At any rate, it is a 100 year charter and either this year or next the Fed will have to have it's banking charter renewed to continue it's operations.

  • Have you seen or heard any reporting about this charter renewal or the renewal process?
  • How big of a sh**storm should we expect as the renewal date gets closer?
  • Is all the talk regarding a new currency system in any way related to an acceptance or refusal of renewing the Fed's banking charter?
  • If the Fed does not get it's charter renewed, how long would the transition period be? And in what shape and form would it take? What would be the basis for a new system? And how would the old be reconciled with the old?
  • What is/will be the US Treasury's role in this process?
  • What would be the role of the IRS?
  • Could what's going on in Asia, MENA, Europe, The UK, and the US, militarily, monitarily, and politically be related to the renewal of the Fed's banking charter?
  • Do we, through our representatives in the senate and congress have any input whatsoever in the renewal process? And if not, why not?

Just a few questions about a very important topic which I have seen or heard absolutely nothing from anyone anywhere. And most assuredly a topic which will determine the course of the world for the next generation. Or two, or three, maybe four or more.

Edited by admin on 11/08/2014 - 06:27
stephanie
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hmmm

Interesting topic...thanks for sharing!

Xeno
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I shouldn't have said or

I shouldn't have said or implied nothing has been said or written about this. But the silence is deafening. Here's a nice tidbit from a 2004 article at; http://news.goldseek.com/GoldSeek/1095269452.php 

Sec. 341 Second. To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law. The Federal Reserve was only given a corporate life of 20 years! Their time was up in 1933 Who was President at that time? Franklin. D. Roosevelt, of course. Somehow, the Federal Reserve's termination did not occur. Reader, do I have your attention yet? My research failed to find any reauthorization of the Federal Reserve Act of 1913, other than the tacit approval given by the Sarbanes-Oxley Act of 2002.

So it seems that although the Fed Reserve act of 1913(P.L. 63-43, 38 STAT. 251, 12 USC 221) did originally have a 20 yr charter, this was changed by the Act of Feb. 25, 1927 (44 Stat. 1234) as follows:

Second. To have succession after February 25, 1927, until dissolved by Act of Congress or until forfeiture of franchise for violation of law. (12 U.S.C. § 341)

It also seems that there was no 100 or 99 yr charter and the Fed will not "expire" unless Congress votes to dissolve it. It also seems that the banking charter of The Act is not directed towards the Fed itself but rather the banks that make up the Federal Reserve System of banks do require the renewable charters.

With how far entrenched the Fed is in the system, it would be nearly impossible to just dissolve it overnight. And would the Fed member banks really go quietly?

Any regulations and oversight the fed currently has would have to be carefully rewritten in order to repeal it and or reassign it to the appropriate departments (ie Treasury, SEC or IRS.)

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Charter thoughts/observations

Pretty fascinating stuff. The bottom line is that it does not appear to me that the Fed has to have any type of 100 yr. Charter renewed or voted on by Congress in 2013.

Here's a few brief historical mile-makers in banking history overall that got us to where we are and about the "Charter" itself.

First Bank of the United States

The First Bank of the United States was modeled after the Bank of England and differed in many ways from today's central banks. For example, it was partly owned by foreigners, who shared in its profits. Also, it wasn't solely responsible for the country's supply of bank notes. It was responsible for only 20% of the currency supply; state banks accounted for the rest. Several founding fathers bitterly opposed the Bank. Thomas Jefferson saw it as an engine for speculation, financial manipulation, and corruption. In 1811 its twenty year charter expired and was not renewed by Congress. The next several years witnessed a proliferation of federally issued Treasury Notes as the government struggled to finance the War of 1812 and an eventual suspension of specie payment by most banks.

Second Bank of the United States

After a five-year interval, the federal government chartered its successor, the Second Bank of the United States (1816–1836). James Madison signed this charter, expressing the hope that it would end the runaway inflation of the five year interim. It was basically a copy of the First Bank, with branches across the country.

He (Andrew Jackson) did not get the bank dissolved, but refused to renew its charter. The end of the bank saw a period of runaway inflation, until Jackson's executive order requiring all federal land payments be made in gold or silver, driving all banks to require payments in gold and silver, producing the depression of 1837, which lasted for four years.

1837–1862: "Free Banking" Era

In this period, only state-chartered banks existed. They could issue bank notes against specie (gold and silver coins) and the states heavily regulated their own reserve requirements, interest rates for loans and deposits, the necessary capital ratio etc. These banks had existed from 1781, in parallel with the Banks of the United States. The Michigan Act (1837) allowed the automatic chartering of banks that would fulfill its requirements without special consent of the state legislature.

By 1797 there were 24 chartered banks in the U.S.; with the beginning of the Free Banking Era (1837) there were 712.

1863–1913: National Banks

To create a system of national banks. They had higher standard s concerning reserves and business practices than State banks.

To finance the war. National banks were required to back up their notes with Treasury securities, enlarging the market and raising its liquidity

Two problems still remained in the banking sector. The first was the requirement to back up the currency with treasuries. When the treasuries fluctuated in value, banks had to recall loans or borrow from other banks or clearinghouses. The second problem was that the system created seasonal liquidity spikes.

When combined liquidity demands were too big, the bank again had to find a lender of last resort.

1907 - 1913: Creation of the Federal Reserve System

Panic of 1907 Alarms Bankers

Bankers felt the real problem was that the United States was the last major country without a central bank, which might provide stability and emergency credit in times of financial crisis. While segments of the financial community were worried about the power that had accrued to JP Morgan and other 'financiers', most were more concerned about the general frailty of a vast, decentralized banking system that could not regulate itself without the extraordinary intervention of one man. Financial leaders who advocated a central bank with an elastic currency after the Panic of 1907 include Frank Vanderlip, Myron T. Herrick, William Barret Ridgely, George E. Roberts, Isaac Newton Seligman and Jacob H. Schiff.

A Regional Federal Reserve System

The new President, Woodrow Wilson, then became the principal mover for banking and currency reform in the 63rd Congress, working with the two chairs of the House and Senate Banking and Currency Committees, Rep. Carter Glass of Virginia and Sen. Robert L. Owen of Oklahoma. It was Wilson who insisted that the regional Federal reserve banks be controlled by a central Federal reserve board appointed by the President with the advice and consent of the U.S. Senate.

Wilson assured southerners and westerners that the system was decentralized into 12 districts, and thus would weaken New York City's Wall Street influence and strengthen the hinterlands.

The Federal Reserve

The Federal Reserve's power developed slowly in part due to an understanding at its creation that it was to function primarily as a reserve, a money-creator of last resort to prevent the downward spiral of withdrawal/withholding of funds which characterizes a monetary panic. At the outbreak of World War I, the Federal Reserve was better positioned than the Treasury to issue war bonds, and so became the primary retailer for war bonds under the direction of the Treasury.

After Franklin D. Roosevelt took office in 1933, the Federal Reserve was subordinated to the Executive Branch, where it remained until 1951, when the Federal Reserve and the Treasury department signed an accord granting the Federal Reserve full independence over monetary matters while leaving fiscal matters to the Treasury.

The Federal Reserve's monetary powers did not dramatically change for the rest of the 20th century, but in the 1970s it was specifically charged by Congress to effectively promote "the goals of maximum employment, stable prices, and moderate long-term interest rates" as well as given regulatory responsibility over many consumer credit protection laws.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Bottom-line... during the era of Free-Banking and the era of National Banks, Lincoln had a need to finance the Civil war and issue bonds and needed a more centralized system of banking. It is in that period from Free Banking and National Banking where "Charters" lost all meaning due to a Presidents needs during the Civil War. The period of bank charters was somewhat officially ended with Andrew Jackson's refusal to extend The Second National Banks charter in 1836-37.

As you can see right above me there in bold... FDR subordinated the Federal reserve into the Executive Branch in 1933. The Federal Reserve Chairman serves at the pleasure and appointment of the President.

There hasn't been an actual Central or National Bank charter for quite some time and nothing is up for consideration next year when it seems like a 100 yr. charter might come into play. As I just found out for myself, there never was a 100 year charter. It's an Executive Branch 'privelege/decree'/accord that will serve it's purpose until it doesn't.

My observation on this is quite simple. The Bank of England and the UK obviously set up the banking system in this country and when it was time in the early 1900's to do so (with no real competition anywhere) they decided to arbitrarily make the U.S. the lender of last resort and give it reserve currency status over the entire planet basically. They did so because they could.

Which begs the obvious and over 200 year old question....why didn't England set up this system for itself and make it's currency the lender of last resort way before any of that happened in the U.S.'s late 1700's and 1800's?

Think about that. They were far more powerful and wealthy then we were early on after we split from them. Did we ever really and truly split from England or was it more like we were this incredible new country who had unlimited upside potential for growth and development and they saw the vast potential for a new market system and banking one as well?

Did we essentially turn into their banking 'colony' after the fact?

http://en.wikipedia.org/wiki/History_of_central_banking_in_the_United_St...

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An epic lack of foresight, accuracy and humility over 3 1/2 years ago. Once a pumper, always a pumper!
http://www.tfmetalsreport.com/comment/170246#comment-170246

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