Friday, April 25, 2014

List of Member Banks--Stockholders and Owners--of the Federal Reserve Bank

The following is a complete list of members of and stockholders in the Federal Reserve Bank.  The list includes all regions.  I obtained it through a Freedom of Information Act request. The request and the Fed's response are as follows.  The Fed did not respond to my second request, which was for information about the law governing the fiduciary status of its stockholders.  

My inquiry

Dear FOIA Officer: 

Pursuant to the federal Freedom of Information Act, 5 U.S.C. § 552, I request access to and copies of a list of all (a) stockholders of and, if there are any differences, (b) member banks and other financial institutions of the Federal Reserve Bank. The list would include all members and stockholders in all regions and all types of institutions, including but not limited to national banks and state banks. I agree to pay reasonable duplication fees for the processing of this request up to $150. If my request is denied in whole or part, I ask that you justify all deletions by reference to specific exemptions of the act. I will also expect you to release all segregable portions of otherwise exempt material. I, of course, reserve the right to appeal your decision to withhold any information or to deny a waiver of fees. I look forward to your reply within 20 business days, as the statute requires. Thank you for your assistance. Sincerely, Mitchell Langbert, Ph.D.  

The Fed's response

Dear Dr. Langbert,
 This is in response to your email message dated April 15, 2014, and received by the Board’s Freedom of Information Office on April 16, 2014, in which you request copies of a list of all (a) stockholders of and, if there are any differences, (b) member banks and other financial institutions of the Federal Reserve Bank. Attached is a list of institutions regulated by the Federal Reserve System. We are also providing you with a link to the Board’s website regarding information about stock issues.
 The link about stock issues says this:

Federal Reserve Act

Section 5. Stock Issues; Increase and Decrease of Capital

1. Amount of shares; increase and decrease of capital; surrender and cancellation of stock

The capital stock of each Federal reserve bank shall be divided into shares of $100 each. The outstanding capital stock 
shall be increased from time to time as member banks increase their capital stock and surplus or as additional banks 
become members, and may be decreased as member banks reduce their capital stock or surplus or cease to be members. 
Shares of the capital stock of Federal reserve banks owned by member banks shall not be transferred or hypothecated. 
When a member bank increases its capital stock or surplus, it shall thereupon subscribe for an additional amount of 
capital stock of the Federal reserve bank of its district equal to 6 per centum of the said increase, one-half of said 
subscription to be paid in the manner hereinbefore provided for original subscription, and one-half subject to call 
of the Board of Governors of the Federal Reserve System. A bank applying for stock in a Federal reserve bank at 
any time after the organization thereof must subscribe for an amount of the capital stock of the Federal reserve bank 
equal to 6 per centum of the paid-up capital stock and surplus of said applicant bank, paying therefor its par value plus o
ne-half of 1 per centum a month from the period of the last dividend. When a member bank reduces its capital stock or 
surplus it shall surrender a proportionate amount of its holdings in the capital stock of said Federal Reserve bank. 
Any member bank which holds capital stock of a Federal Reserve bank in excess of the amount required on the 
basis of 6 per centum of its paid-up capital stock and surplus shall surrender such excess stock. When a member 
bank voluntarily liquidates it shall surrender all of its holdings of the capital stock of said Federal Reserve bank and 
be released from its stock subscription not previously called. In any such case the shares surrendered shall be 
canceled and the member bank shall receive in payment therefor, under regulations to be prescribed by the Board of 
Governors of the Federal Reserve System, a sum equal to its cash-paid subscriptions on the shares surrendered and 
one-half of 1 per centum a month from the period of the last dividend, not to exceed the book value thereof, less any 
liability of such member bank to the Federal Reserve bank.

I mailed the Fed the following inquiry, to which it did not respond:

I teach business at Brooklyn College and have a question; maybe you can help me or direct me to the best person to ask.  Normally, corporation law applies to  corporations in the state in which the corporation is domiciled. For instance, the common law of Delaware applies to the many corporations domiciled in Delaware.

(1) As a corporation owned by its members but authorized by federal law and governed in part through the political process, what body of common law or federal statutory interpretation applies to the Fed? Is it the law of the states where the district Feds are located, federal law, federal regulation, or some other body of law?

(2) As a corollary of (1), where is the Fed domiciled for application of law concerning governance, fiduciary versus business judgment responsibility of its board, and similar kinds of governance issues: Washington, DC; the states where the branches are located; both; or elsewhere?
(3) Is there a specific statute or section of the Federal Reserve Act that concerns governance,  the governors’ fiduciary duty to members, and  what that fiduciary duty would constitute given the Fed’s broad social mandates (reduction in unemployment, reducing inflation, and the like)?

Is there someone at the Fed (maybe a legal officer) who knows the answers to these questions?

Thanks for  your help.

Mitchell Langbert, Ph.D.  

This is the list of Fed member banks and stockholders. It should be available on Scribd by clicking on the link. 

Obama's Dismal Presidency

In 1951 David B. Truman, president of Mount Holyoke College, published The Governmental Process: Political Interests and Public Opinion, a monumental, scholarly work on the political science of special interest groups and the federal government. Truman illustrates his chief points with history, and he offers insightful anecdotes about many of the chief twentieth century interest groups such as the American Federation of Labor, the National Association of Manufacturers, the Grange, and the American Medical Association. Truman integrates his discussion of interest groups with a discussion of the structure of the federal government; he shows how the structure of Congress, the presidency, and the Supreme Court determine how interest groups behave.

In Truman's chapter on the executive branch, which is near the end of the book, he dissects the characteristics of successful and effective American presidents.  He writes this (p. 403):

The president's leadership of the legislature depends heavily upon his symbolic supraparty position. Although he cannot completely ignore the pleas of partisanship, he must play upon the multiple memberships of both fellow party-members and nominal opponents in order to effect winning support for the cause he is championing.

Truman also writes this (p. 402):

The president's partisanship and partiality among groups must be kept within limits...despite the need to maintain cohesion among the elements that helped him to power.  The process by which he is nominated and elected inevitably gives some groups better access to him than others can command, but as the dominant symbol of the nation, he cannot be completely identified with a segment of it...The measure of detachment imposed on a president by his position as a chief of state is not necessarily a handicap.  The obligation to remain minimally accessible to all legitimate interests in the society can supply him with a measure of independence and a persuasive power that effectively supplements his formal authority.

By these measures, President Barack Obama's presidency has been a failure.  He has failed to represent all of America.  This failure is due to the American media, which no longer offers diversity of viewpoints that reflect the range of legitimate views in America--a problem that Truman discusses at length but which has become more serious since Truman's day, when it was already a matter of concern. Rather, like the media in a totalitarian state, the American media attempts to delegitimize legitimate opinion that deviates from Obama's narrow party line.  

Obama represents the interests of one segment of America: the pro-Wall Street left wing of the Democratic Party.  He has made no effort to compromise, whether it be in his ideologically motivated health reform, his failed cap-and-trade proposal, his use of the IRS to target conservatives and other dissidents,  and his attacks on the states in areas like his No Child Left Behind Act, er, I mean Common Core.

Obama has so divided America that, for the first time since the 1960s, we see pockets of armed resistance to the federal government. The contretemps at the Cliven Bundy ranch is a symptom of failed president who has divided rather than united a nation.  The media's ideologues, ever eager to support the federal government's authority, paint the militia who support Bundy as extremists.  Their extremism is the fruit of Obama's extremism and the extremism of the American media, which does not tolerate dissent.

A Constitutional Amendment to End the US Supreme Court

Former Supreme Court Justice John Paul Stevens has written a book advocating a series of constitutional amendments that aim to, well, increase the power of the supreme court.  According to USA Today the retired federal judge advocates abridging the right to bear arms, abolishing the death penalty, restricting campaign spending, reducing the independence of states, and changing  congressional rules.

The US Supreme Court is a failed, backward-looking institution, and a former supreme court justice's giving advice about government is akin to a former General Motors executive's giving advice about free enterprise or a former Enron executive's giving advice about morals.  Actually, a former Enron executive, including the ones in jail, is better equipped to give ethics advice than is a retired supreme court justice, for the moral turpitude of the supreme court is worse than Enron's.

Instead of Stevens's stale ideas, why not a constitutional amendment to abolish the Supreme Court, which has been a cancer on the American economy since 1803, the year of Marbury v. Madison?  The worst thing Jefferson did wasn't the Louisiana Purchase--it was the failure to overturn Marshall's illegitimate claim that the supreme court has the right to interpret the constitution.  Instead of a Supreme Court, the state courts could set up an arbitration system to adjudicate disputes among states, and Congress could set up an arbitration system to adjudicate disputes with foreign powers.  The rest of the things that the US Supreme Court does, all of which it has mangled, could be done by state courts.  That would encourage diversity, one of the supposed aims of the totalitarian federal state.

Since centralization and excessive federal power has resulted in a stagnant standard of living for most Americans--but not Stevens, who has spent a lifetime living off federal taxes and centralizing policies that have benefited him at the public's expense--it is difficult for me to understand why Americans could possibly care what Stevens has to say.