The people who love to weave conspiracy theories about the Fed are twisting the fact that the Fed’s design from the outset was to be a private organization. The banks were the shareholders BECAUSE it was to be a bailout system for them as J.P. Morgan had acted during the Panic of 1907. The banks were to capitalize the Fed because taxpayer’s money was not to be used. The Fed began as independent, but that did NOT last very long. The Fed was usurped when World War I took place and it has been manipulated by Congress ever since for political gain – not by the shareholders.
For World War I Congress intervened and instructed the Fed to buy only government paper to fund the war. As always, once government take some act for an emergency, they NEVER restore the system to whatever it was before. We still have to walk through x-ray machines, take off our shoes and submit to searches by TSA who will confiscate cash we have even on domestic flights. This was all to protect us post-911. Well the terrorists have been defeated. All that remains is perhaps 5 guys and a camel. Yet TSA will never be closed. It is permanent. I cannot wait to see what liberties we lose after this Coronavirus. I suspect freedom of assembly will be surrendered and that is just one liberty we will lose naturally to protect us against future viruses. Those who think this will pass are fools – governments will NEVER surrender power once seized.
When Roosevelt came to power, to impose his vision of Socialism, he usurped the Federal Reserve and eliminated the very purpose of have 12 branches which were once all independent. Interest rates would rise and fall among the branches to manage the internal capital flows. Roosevelt ended that for his New Deal and usurped the Fed placing all the power in Washington.
All these conspiracy theories ignore the truth behind the Fed and always point to the original shareholders as if the private banks actually control the decisions at the Fed. The Fed The U.S. Government does not own shares in the Federal Reserve System or its component banks, but does receive all of the system’s annual profits after a statutory dividend of 6% on their capital investment is paid to member banks and a capital account surplus is maintained.
The Federal Reserve has been effectively nationalized. The shareholders remain only in name. They are not the directors nor do they have any voting rights. The machinations of the Fed are very politically driven today. It would be nice if the conspiracy theories would at least point the finger in the right direction – Congress!