Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: gao seng who wrote (107942)	6/10/2001 11:57:36 AM
From: Ilaine	Respond to of 436258

1. The U.S. Supreme Court ruled that Congress may create a central bank in one of its earliest cases, McCulloch v. Maryland, 4 Wheat. 316, 415 (1819). That case adjudicated the constitutionality of the first central bank, the Bank of the United States. Justice Marshall found the authority in the "necessary and proper" clause. caselaw.lp.findlaw.com 2. Federal Reserve Banks are private entities. 3. The Board of Governors of the Federal Reserve System is a part of the federal government. 4. The Federal Reserve system is a method that the US government uses to control banks, not vice versa. >>The governmental controls of American banking are manifold. First, the Federal Reserve System, through its open-market operations, see 12 U.S.C. §§ 263(c), 353-359, control of the rediscount rate, see 12 U.S.C. § 357, and modifications of reserve requirements, see [Page 328] 12 U.S.C. §§ 462, 462b, regulates the supply of money and credit in the economy and thereby indirectly regulates the interest rates of bank loans. This is not, however, rate regulation. The Reserve System's activities are only designed to influence the prime, i. e., minimum, bank interest rate. There is no federal control of the maximum, although all banks, state and national, are subject to state usury laws where applicable. See 12 U.S.C. § 85. In the range between the maximum fixed by state usury laws and the practical minimum set by federal fiscal policies (there is no law against undercutting the prime rate but bankers seldom do), bankers are free to price their loans as they choose. Moreover, charges for other banking services, such as service charges for checking privileges, are free of governmental regulation, state or federal. U.S. v. PHILADELPHIA NAT. BANK, 374 U.S. 321, 327-328 (1963) Federal supervision of banking has been called "[p]robably the outstanding example in the federal government of regulation of an entire industry through methods of supervision . . . . The system may be one of the most successful [systems of economic regulation], if not the most successful." Id., § 4.04, at 247. To the efficacy of this system we may owe, in part, the virtual disappearance of bank failures from the American economic scene. U.S. v. PHILADELPHIA NAT. BANK, 374 U.S. 321, 330 (1963)<<