Federal Reserve is Privately Owned
Mr.Smartypants
Below are excerpts from a court case proving the Federal Reserve
system's status. As you will see, the court ruled that the Federal
Reserve Banks are "independent, privately owned and locally controlled
corporations", and there is not sufficient "federal government control
over 'detailed physical performance' and 'day to day operation'" of
the Federal Reserve Bank for it to be considered a federal agency:
Lewis v. United States, 680 F.2d 1239 (1982)
John L. Lewis, Plaintiff/Appellant,
v.
United States of America, Defendant/Appellee.
No. 80-5905
United States Court of Appeals, Ninth Circuit.
Submitted March 2, 1982.
Decided April 19, 1982.
As Amended June 24, 1982.
Plaintiff, who was injured by vehicle owned and operated by a federal
reserve bank, brought action alleging jurisdiction under the Federal
Tort Claims Act. The United States District Court for the Central
District of California, David W. Williams, J., dismissed holding that
federal reserve bank was not a federal agency within meaning of Act
and that the court therefore lacked subject-matter jurisdiction.
Appeal was taken. The Court of Appeals, Poole, Circuit Judge, held
that federal reserve banks are not federal instrumentalities for
purposes of the Act, but are independent, privately owned and locally
controlled corporations.
Affirmed.
1. United States
There are no sharp criteria for determining whether an entity is a
federal agency within meaning of the Federal Tort Claims Act, but
critical factor is existence of federal government control over
"detailed physical performance" and "day to day operation" of an
entity. . . .
2. United States
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. . . .
3. United States
Under the Federal Tort Claims Act, federal liability is narrowly based
on traditional agency principles and does not necessarily lie when a
tortfeasor simply works for an entity, like the Reserve Bank, which
performs important activities for the government. . . .
4. Taxation
The Reserve Banks are deemed to be federal instrumentalities for
purposes of immunity from state taxation.
5. States Taxation
Tests for determining whether an entity is federal instrumentality for
purposes of protection from state or local action or taxation, is very
broad: whether entity performs important governmental function.
--------------
Lafayette L. Blair, Compton, Cal., for plaintiff/appellant.
James R. Sullivan, Asst. U.S. Atty., Los Angeles, Cal., argued, for
defendant/appellee; Andrea Sheridan Ordin, U.S. Atty., Los Angeles,
Cal., on brief.
Appeal from the United States District Court for the Central District
of California.
Before Poole and Boochever, Circuit Judges, and Soloman, District
Judge. (The Honorable Gus J. Solomon, Senior District Judge for the
District of Oregon, sitting by designation)
Poole, Circuit Judge:
On July 27, 1979, appellant John Lewis was injured by a vehicle owned
and operated by the Los Angeles branch of the Federal Reserve Bank of
San Francisco. Lewis brought this action in district court alleging
jurisdiction under the Federal Tort Clains Act (the Act), 28 U.S.C.
Sect. 1346(b). The United States moved to dismiss for lack of subject
matter jurisdiction. The district court dismissed, holding that the
Federal Reserve Bank is not a federal agency within the meaning of the
Act and that the court therefore lacked subject matter jurisdiction.
We affirm.
In enacting the Federal Tort Claims Act, Congress provided a limited
waiver of the sovereign immunity of the United States for certain
torts of federal employees. . . . Specifically, the Act creates
liability for injuries "caused by the negligent or wrongful act or
omission" of an employee of any federal agency acting within the scope
of his office or employment. . . . "Federal agency" is defined as:
the executive departments, the military departments, independent
establishments of the United States, and corporations acting
primarily as instrumentalities of the United States, but does not
include any contractors with the United States.
28 U.S.C. Sect. 2671. The liability of the United States for the
negligence of a Federal Reserve Bank employee depends, therefore, on
whether the Bank is a federal agency under Sect. 2671.
[1,2] There are no sharp criteria for determining whether an entity is
a federal agency within the meaning of the Act, but the critical
factor is the existence of federal government control over the
"detailed physical performance" and "day to day operation" of that
entity. . . . Other factors courts have considered include whether the
entity is an independent corporation . . ., whether the government is
involved in the entity's finances. . . ., and whether the mission of
the entity furthers the policy of the United States, . . . Examining
the organization and function of the Federal Reserve Banks, and
applying the relevant factors, we conclude that the Reserve Banks are
not federal instrumentalities for purpose of the FTCA, but are
independent, privately owned and locally controlled corporations.
Each Federal Reserve Bank is a separate corporation owned by
commercial banks in its region. The stockholding commercial banks
elect two thirds of each Bank's nine member board of directors. The
remaining three directors are appointed by the Federal Reserve Board.
The Federal Reserve Board regulates the Reserve Banks, but direct
supervision and control of each Bank is exercised by its board of
directors. 12 U.S.C. Sect. 301. The directors enact by-laws regulating
the manner of conducting general Bank business, 12 U.S.C. Sect. 341,
and appoint officers to implement and supervise daily Bank activities.
These activites include collecting and clearing checks, making
advances to private and commercial entities, holding reserves for
member banks, discounting the notes of member banks, and buying and
selling securities on the open market. See 12 U.S.C. Sub-Sect.
341-361.
Each Bank is statutorily empowered to conduct these activites without
day to day direction from the federal government. Thus, for example,
the interest rates on advances to member banks, individuals,
partnerships, and corporations are set by each Reserve Bank and their
decisions regarding the purchase and sale of securities are likewise
independently made.
It is evident from the legislative history of the Federal Reserve Act
that Congress did not intend to give the federal government direction
over the daily operation of the Reserve Banks:
It is proposed that the Government shall retain sufficient power
over
the reserve banks to enable it to exercise a direct authority
when
necessary to do so, but that it shall in no way attempt to carry
on
through its own mechanism the routine operations and banking
which
require detailed knowledge of local and individual credit and
which
determine the funds of the community in any given instance. In
other
words, the reserve-bank plan retains to the Government power over
the
exercise of the broader banking functions, while it leaves to
individuals and privately owned institutions the actual direction
of
routine.
H.R. Report No. 69 Cong. 1st Sess. 18-19 (1913).
The fact that the Federal Reserve Board regulates the Reserve Banks
does not make them federal agencies under the Act. In United States v.
Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976), the
Supreme Court held that a community action agency was not a federal
agency or instrumentality for purposes of the Act, even though the
agency was organized under federal regulations and heavily funded by
the federal government. Because the agency's day to day operation was
not supervised by the federal government, but by local officials, the
Court refused to extend federal tort liability for the negligence of
the agency's employees. Similarly, the Federal Reserve Banks, though
heavily regulated, are locally controlled by their member banks.
Unlike typical federal agencies, each bank is empowered to hire and
fire employees at will. Bank employees do not participate in the Civil
Service Retirement System. They are covered by worker's compensation
insurance, purchased by the Bank, rather than the Federal Employees
Compensation Act. Employees travelling on Bank business are not
subject to federal travel regulations and do not receive government
employee discounts on lodging and services.
The Banks are listed neither as "wholly owned" government corporations
under 31 U.S.C. Sect. 846 nor as "mixed ownership" corporations under
31 U.S.C. Sect. 856, a factor considered is Pearl v. United States,
230 F.2d 243 (10th Cir. 1956), which held that the Civil Air Patrol is
not a federal agency under the Act. Closely resembling the status of
the Federal Reserve Bank, the Civil Air Patrol is a non-profit,
federally chartered corporation organized to serve the public welfare.
But because Congress' control over the Civil Air Patrol is limited and
the corporation is not designated as a wholly owned or mixed ownership
government corporation under 31 U.S.C. Sub-Sect. 846 and 856, the
court concluded that the corporation is a non-governmental,
independent entity, not covered under the Act.
Additionally, Reserve Banks, as privately owned entities, receive no
appropriated funds from Congress. . . .
Finally, the Banks are empowered to sue and be sued in their own name.
12 U.S.C. Sect. 341. They carry their own liability insurance and
typically process and handle their own claims. In the past, the Banks
have defended against tort claims directly, through private counsel,
not government attorneys . . ., and they have never been required to
settle tort claims under the administrative procedure of 28 U.S.C.
Sect. 2672. The waiver of sovereign immunity contained in the Act
would therefore appear to be inapposite to the Banks who have not
historically claimed or received general immunity from judicial
process.
[3] The Reserve Banks have properly been held to be federal
instrumentalities for some purposes. In United States v. Hollingshead,
672 F.2d 751 (9th Cir. 1982), this court held that a Federal Reserve
Bank employee who was responsible for recommending expenditure of
federal funds was a "public official" under the Federal Bribery
Statute. That statute broadly defines public official to include any
person acting "for or on behalf of the Government." . . . The test for
determining status as a public official turns on whether there is
"substantial federal involvement" in the defendant's activities.
United States v. Hollingshead, 672 F.2d at 754. In contrast, under the
FTCA, federal liability is narrowly based on traditional agency
principles and does not necessarily lie when the tortfeasor simply
works for an entity, like the Reserve Banks, which perform important
activities for the government.
[4, 5] The Reserve Banks are deemed to be federal instrumentalities
for purposes of immunity from state taxation. . . . The test for
determining whether an entity is a federal instrumentality for
purposes of protection from state or local action or taxation,
however, is very broad: whether the entity performs an important
governmental function. . . . The Reserve Banks, which further the
nation's fiscal policy, clearly perform an important governmental
function.
Performance of an important governmental function, however, is but a
single factor and not determinative in tort claims actions. . . .
State taxation has traditionally been viewed as a greater obstacle to
an entity's ability to perform federal functions than exposure to
judicial process; therefore tax immunity is liberally applied. . . .
Federal tort liability, however, is based on traditional agency
principles and thus depends upon the principal's ability to control
the actions of his agent, and not simply upon whether the entity
performs an important governmental function. . . .
Brinks Inc. v. Board of Governors of the Federal Reserve System, 466
F.Supp. 116 (D.D.C.1979), held that a Federal Reserve Bank is a
federal instrumentality for purposes of the Service Contract Act, 41
U.S.C. Sect. 351. Citing Federal Reserve Bank of Boston and Federal
Reserve Bank of Minneapolis, the court applied the "important
governmental function" test and concluded that the term "Federal
Government" in the Service Contract Act must be "liberally construed
to effectuate the Act's humanitarian purpose of providing minimum wage
and fringe benefit protection to individuals performing contracts with
the federal government." Id. 288 Mich. at 120, 284 N.W.2d 667.
Such a liberal construction of the term "federal agency" for purposes
of the Act is unwarranted. Unlike in Brinks, plaintiffs are not
without a forum in which to seek a remedy, for they may bring an
appropriate state tort claim directly against the Bank; and if
successful, their prospects of recovery are bright since the
institutions are both highly solvent and amply insured.
For these reasons we hold that the Reserve Banks are not federal
agencies for purposes of the Federal Tort Claims Act and we affirm the
judgement of the district court.
AFFIRMED.
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It is clear from this that in some circumstances, the Federal Reserve
Bank can be considered a government "instrumentality", but cannot be
considered a "federal agency", because the term carries with it the
assumption that the federal government has direct oversight over what
the Fed does. Of course it does not, because most people who know
about this subject know that the Fed is "politically independent."
The only area where one might disagree with the judge's decision is
where he states that the Fed furthers the federal government's fiscal
policy, and therefore performs an important governmental function.
While we would like to think that the federal government and the Fed
work cooperatively with each other, and they may on occasion, the Fed
is by no means required to do so. One example is where Rep. Wright
Patman, Chairman of the House Banking Committee, said in the
Congressional Record back in the '60s, that depending on the
temperament of the Fed's Chairman, sometimes the Fed worked with the
government's fiscal policy, and other times either went in the
complete opposite direction, or threatens to do so in order to
influence policy.
The common claim that the Fed is accountable to the government,
because it is required to report to Congress on its activities
annually, is incorrect. The reports to Congress mean little unless
what the Chairman reports can be verified by complete records. From
its founding to this day, the Fed has never undergone a complete
independent audit. Congress time after time has requested that the Fed
voluntarily submit to a complete audit, and every time, it refuses.
Those in the know about the Fed, realize that it does keep certain
records secret. The soon-to-be-former Chairman of the House Banking
Committee, Henry Gonzales, has spoken on record repeatedly about how
the Fed at one point says it does not have certain requested records,
and then it is found through investigation that it in fact does have
those records, or at least used to. It would appear that the Fed
Chairman can say anything he wants to to Congress, and they'll have to
accept what he says, because verification of what he says is not
always possible.
[END]
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Kenneth McVay OBC
Mr.Smartypants <bunghol...@lycos.com> wrote:
>http://www.save-a-patriot.org/files/view/frcourt.html
>
>
>
>Below are excerpts from a court case proving the Federal Reserve
>system's status. As you will see, the court ruled that the Federal
>Reserve Banks are "independent, privately owned and locally controlled
>corporations", and there is not sufficient "federal government control
>over 'detailed physical performance' and 'day to day operation'" of
>the Federal Reserve Bank for it to be considered a federal agency:
Not quite. The Court's ruling only applied to the Federal Tort Claims
Act, and whether or not the Fed qualified as a federal agency
under that act.
--
"Hey Kenneth there are people dying now that never did dye before."
(Kurt Knoll, Kitimat's Leading Revisionist Scholar and Reigning
Village Idiot)
The Nizkor Project http://www.nizkor.org
P. Maffia
Note carefully, stupid,. that the Court carefully stated that the banks are
both Federal agencies and not Federal agencies.
Under the tort claims act, because of the way Congress wrote the law
creating the Federal Reserve banks, it is excluded from the definition of a
Federal Agency under the torts claims act. But for the purpose of state
taxation of Federal Reserve Bank profits, they are under the Federal Law
creating the banks, Federal Agencies exempt from state taxation.
And speaking of taxation, you boobs have NEVER BEEN ABLE TO SATISFACTORILY
explain how, if as you morons insist, they are strictly privately owned,
the banks over their entire existence have paid more money to the Federal
Treasury as a matter of ownership, not taxes, than they have to their
private ownership.
Nor can any of you morons explain why the private owners of Federal Reserve
Banks shares, cannot sell, loan or hypoticate their shares to any other
entity or person for any purpose. Nor that the laws dictate that their
ownership shares are based solely on the individual bank's (and I am not
talking about the Reserve banks in this case) capitalization and the reserve
requirements specified by the Reserve banks in their district.
In other words, you and your fellow morons, look only for isolated and out
of context quotes to support your ignorant claims while ignoring the reality
of exactly how the individual banks and the whole Federal Reserve System is
created and governed and, in the finally analysis, owned.
"Mr.Smartypants" <bunghol...@lycos.com> wrote in message
news:2bba10a7-839c-462c...@f20g2000prn.googlegroups.com...
Vicegerent
The Federal Reserve and the corporate UNITED STATES are 'Dead Men
Walking' anyway.
In a very short time, neither will exist.
Canuck57
Agreed. Be it private or government, they are broke and at some point
will collapse. It is a huge ponzi scheme just waiting for the right pin
prick.
Question is, is this recession or the next one going to do it? I have
heard various opinions that state that this recession might briefly end,
but get tossed right back into recession as taxation for the debt kills
the economic recovery. And that was the bright view. Some said it will
appear as if we are begining a recovery and many currencies will
litterally implode in value, starting a chain reaction that will desroy
banking as we know it. The black day view.
"(¯`·.¸Craig Chilton¸.·´¯) <www.LayoffRemedy.com>"
> this recession might briefly end,
> but get tossed right back into recession as taxation for the debt kills
> the economic recovery.
It won't be taxation. We will just keep borrowing and spending until
the interest on the national debt exceeds the gross national product,
then the U.S. will go bankrupt.
Edmond H. Wollmann
"Kenneth McVay OBC" <kmc...@oldshell.vex.net> wrote in message news:__ydnZVpNPGmtonW...@vex.net...
Abbot
Eldon, you’ve been singing that sad old tune ever since the IRS and
the FBI busted you in the 1980’s.
The fact is you’ll never pay the authorities back for jailing you for
threatening IRS agents. You’ll be molding in your grave and the U.S.
government will still be mumming right along.