Federal Reserve Is A Government Entity …

[.. NWS has 2 of its Columnists taking opposite positions regarding this most important, Federal Reserve, issue for – We The People – It is rare that the same publication will present opposing points of view by their own Columnists. A link to the other NWS Columnist, Michael Webster, will be provided below [1]. End -]

…. with impunity that the Federal Reserve is not a government entity.

Only for the purpose of the Federal Tort Claims Act [the Act] will the Court declare in determining a tort claim filed against a Fed employee that the Federal Reserve does not operate as a federal agency. Lewis v.

United States

680 F.2d 1239 (1982). Congress granted only a “limited waiver … of sovereign immunity …” to the Fed branch as a Federal government entity of the

United States


Other than the purpose of the Federal Tort Claims Act – and only if there is a tort liability claim filed in court – the Fed was created by Congress as a government body.

Consequently, in determining the merit of a tort case, the Court will rule as it has ruled, that an employee of the Fed branch is not subject to a federal tort claim — it will dismiss the case for “lack of subject matter jurisdiction”, the language the Court used.

There is “lack of subject matter jurisdiction” because under the Federal Tort Claims Act and I quote: “Congress did not intend to give the federal government direction over the daily operation of the Reserve Banks:

“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 [statute] 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, 63 Cong. [**6] 1st Sess. 18-19 (1913).”

You are reading the House Report of Congress through the eyes of the Court. The Court ruled that a Fed branch does not operate as a government entity only in this singular instance … but only for the purpose – repeat, only for the purpose – of the Federal Tort Claims Act.

It simply means that aside from the purpose of Federal Tort Claims Act, the high courts have always ruled that the Fed is always and has always been a government entity. Critics of the Fed deliberately ignore this truth in order to wage a campaign of opposition and hate against what the U.S. Central Bank is doing, which unfortunately, technically beyond the reach of average-thinking Americans.

For example, the ignorant fault the Fed for printed money. That’s what all central banks all over the world do. In our case, our forefathers printed paper money to finance the American Revolution. In 1690, Massachusetts Bay Colony issued the First Paper Money. By 1775, American colonies issued paper money to finance the Revolutionary War without any reserve – only a promised liability of the colony in anticipation of tax revenues yet to be collected. Loud abolitionists in the wetland of ignorance hardly understand that the issuance of fiat and use of paper money are centuries-old functions of central banks. What it did for progress and freedom in this country is as historical as the Statute of Liberty!

Abuses of our highly structured credit system, real or imagined, are also blamed by twiggy minds on the Fed when, by using our finance houses and elaborate I.O.U banking infrastructure, our advance economic development and tremendous power in science and technology continue to grow and now aimed at the conquest of outer space. But you have to be learned, not a ham-fisted backward economic know-it-all impostor, to appreciate the Fed’s central banking mechanisms [you must know the Fed's macroeconomic Function]that employ flexible Keynesian fiscal and monetary policies to good advantage … and yet, still even if you are an erudite scholar, this appreciation is not possible when the ideological mind is beclouded with spite and malice.

This hate campaign with malice usually intensifies when ordinary households across


feel the pain of a worsening economic pinch, and opportunist politicians quickly jump into it to take advantage of the situation. To gain public support political scavengers make the mind of the mentally vulnerable spin with flattery that it goes vengefully crazy, and that’s when the layman succumbs to public cajolery.

For example, a clever but ill-motivated politician will use the case of Lewis v. United States 680 F.2d 1239 (1982) to make a blanket declaration that the Fed is a parasitic private bank, to serve a revolutionary purpose. When the truth is compromised, the confused layman would have a hard time understanding as to why at the same time the 9th Circuit Court of Appeals has ruled in the Lewis case itself that Reserve Banks are “federal instrumentalities”. The case cited by the high court in disposing the Lewis tort claim was

United States

v. Hollingshead, 672 F.2d 751 (9th Cir. 1982). In Hollingshead, under the Federal Bribery Statute a Fed employee is a ‘public official’ “acting for or on behalf of the Government” S. Rep. No. 2213, 87th Cong., 2nd Sess. (1962), reprinted in (1962) U.S. Code Cong. & Ad. News 3852, 3856. See 18 U.S.C. § 201(a). Did we hear this from leftist abolitionists? Not at all… they mess-up and scuttle the truth.

And finally this time under the Federal Bribery Statute [FBS], the U.S. Supreme Court now sealed the definition of what is a ‘public official’ in order to avoid further confusions.

“To be a public official under the statute [FBS], an individual must possess some degree of official responsibility for carrying out a federal program or policy. Pp. 499-501.”


United States



482 (1984) 465


482.Supreme Court, Dixson v. United States 456U.S. (1984).

How many Americans read the Dixson and Hollingshead cases? Fed- bashers purposely close their eyes and pay no attention to the judicial dicta enunciated in those landmark cases, albeit, it is written in stone that the Fed is in fact – and it is the truth — a government entity.

In still many similar cases, e.g. Land Bank v. Vismarck Lumber Co., 314 U.S. 95, 102, 62 S. Ct. 1, 5, 86 L. Ed. 65 (1941); Rust v. Johnson, 597 F.2d 174, 178 (9th Cir. 1979), cert. denied, 444 U.S. 964, 100 S. Ct. 450, 62 L. Ed. 2d 376 (1979), Reserve Banks “…clearly perform an important governmental function … which further the nation’s fiscal policy.”

In 1979, the whole Federal Reserve System has also been challenged in court by agnostics in central banking as a non-governmental entity in the case of Brink’s Inc. v. Board of Governors of the Federal Reserve System, 466 F. Supp. 116 (D.D.C.1979) under the Service Contract Act, 41 U.S.C. § 351. Citing the


and Minneapolis Federal Reserve Bank jurisprudence, the Court easily ruled that “the Federal Reserve Bank is a federal [**12] instrumentality.”

There are more of these judiciary proofs where the high courts have declared without any iota of doubt that the Federal Reserve is not a private but a government institution.

However, no matter how exhaustive the presentation of proof that the Fed is a federal entity and not a “private” agency, a prejudiced revolutionary weirdo would still swear that the United States central bank is a ruffian cartel run by financial gangsters and purse muggers, just to simulate Jesus Christ’s Calvary in carrying the Cross of evil America being attacked. The Cross stands for


’s condemnable wrongdoing and contemptible “sins”, which President Obama himself admitted in the April 2009 American Summit as "errors" of the evil American Empire. [By the way, whose president is he?]

Examples of those “sins” are those preposterous accusations that


is controlled by a rogue institution called the Federal Reserve, and 911 was not the handiwork of Al Qaeda assassins but of Americans themselves! They didn’t see the two flying aircrafts manned by terrorist hijackers rammed the buildings, but they saw demolition bombs allegedly planted under the buildings that caused the terrifying implosion in front of national televisions! Normal right thinking Americans are totally outraged with this insult of American intelligence; it is a blatant display of misplaced ignorance. I need not assure anyone anymore that these innuendoes are concocted, to dispel any doubt that offended Americans are insuperably outraged.

Considering that the Fed is a federal entity, all what reproachful Fed abolitionists need to do is bring to court any corrupt member of the Central Bank whom they alleged as some kind of a monetary vampire sucking the blood of the American public, and like those bad guys of the underworld in the Dixson case, they will be hauled to jail and there to rot the rest of their remaining life on earth.

Notice carefully, that all these court rulings declaring the Fed as a government body have been judicially differentiated from the Lewis case under the Federal Tort Claims Act. As the courts said, I would like to make it clear that the governmental function of the Fed is “not determinative in tort claims actions”. Lawyers worth their salt knew very well the reason behind this dictum … traditional agency principles govern tort liability that required the showing of control in the performance of the principal’s agent.

I take the pain of showing and annotating these court rulings in this editorial report to dispel hate-motivated accusations that poison the mind of the ignorant into believing that the nation’s Federal Reserve is a private bank under the control of financial hijackers.

OurFederal Reserve System – known as one of the best Central Banks in the world [and you know this if you are schooled in comparative study of monetary economics, if you are not, and you are slaying the Fed, you are like Don Quixote of La Mancha jousting the windmill] — is a creation of the United States Congress, not a creation of and I quote a very angry protester, “slimy crawlers from the bowels of the earth that suck the blood of this nation”. We hear this crap when extremely pissed off anti-Fed ax-welders who lose control of themselves spit the anger off their chest right into the face of those who argue otherwise because they knew better.

If it cannot be disputed that the Fed is by law a creation of Congress [only a hateful leftist radical or a crusading oddball among opportunist politicians or the hallucinating mind of a lost street urchin suffering a delusion of grandeur would pose a challenge that the Fed was not created by Congress], then in truth it is you and I who created the Fed because by inference the members of the Legislature that created this government entity, are only representing each one of us – we the American people who, in the exercise of our constitutional prerogative, had voted each one of them to public office. But many cranks cut their nose to spite the face.

It is my honest and sincere hope that in presenting this eye-opening expose, the general public will stop listening to economic saboteurs. Righteous Americans should discontinue wasting their time joining the revolutionary campaign against the Central Bank waged by anti-Fed-mongers who obviously have a hidden ax to grind.

The right to express a protest or dislike for any given reason, is constitutional, and so is the right to be intentionally ignorant of what is being disliked or protested, like this nation’s Central Bank that whirled America’s millennium of progress to outer space for the latest scientific exploration of the Universe.

In exposing the derogatory campaign against the country’s central banking system primarily based on false allegation that the Fed is a private institution, the court rulings I have presented, which abolitionists flouted, stand as proof that bucket kickers are attacking the Fed with a clandestine agenda. Carrying along a hate-generating baggage that I have just described is prevalent among politicians from both sides of the aisles who would rather suppress the truth, than lose their chance to jump into the limelight and salivate a lie to attract support and patronage.

This kind of public deception has a dangerous backlash. Imagine that this anti-Fed campaign is caught by millions of ignorant radicals and very angry leftist revolutionaries across the country. The hate-propelled falsehood that is spread around – that the Fed is a private bank run by thieves – becomes the gospel of truth through constant exposure that fires up deeper hatred against the Establishment the result of which is for rush people to undermine law and order, or even kill.

The U.S. Holocaust Memorial Museum shooting in

Washington ,


recently killing a security guard demonstrated this fired up hatred of 88-year-old white supremacist named James W. von Brunn. When this random killing flares up and more bodies are brought to the morgue, we know what causes it.

If the intention to spread this hate contagion to the public at large is to change America by invoking our constitutional right to arm ourselves and start a bloody shooting war with the government to show how we smartly distorted our forefathers’ concept of the right to revolt in the name of liberty and freedom, then we must condemn this public deception against the Federal Reserve as a terrorist revolt worse than the insane agenda Osama bin Laden and Al Qaeda have, i.e., butchering Americans and bombing this nation to kingdom come.

There is no doubt that most if not all of those who hate the Fed hate


. We do not need a local political 911 spawned by the likes of Bill Ayers, Barack Obama’s previous working colleague otherwise known as the anti-Vietnam-war “Bomber”, or Colorado University’s “Little Eichmann” Ward Churchill, Timothy McVeigh, Oklahoma’s bombing notoriety, or Theodore Kaczynski, The Unabomber, detonating all kinds of “bombs” in our midst hurting and killing people. Having Barack Obama as president whose birth certificate millions believed could be fake, is already terror this country has to survive when it explodes in many devastating ways anytime of the day. To many worried Americans, that horror is already more than enough to bear!

Anyone who is privileged to know the truth of what the Fed is all about, especially its function in the economy as the nation’s Central Bank, has a public duty of a law-abiding citizen to confront the lies and expose any vicious charlatan who by dragging the reputation of the agency down the gutter the general public ends up the loser. We, the public, end up the loser because such abomination injects into the veins of the enemy additional lifeblood of terror to kill more and destroy more.

I wrote down these disquieting concerns all over the Internet. The reading public may “Google” or search the Web, to locate what I have written about the Federal Reserve. One of these several writings could be found right here in the nationalwriterssyndicate.com, and also in FP.com, others are caught and published by other nationally known Websites. [Click on these links to get a sample of it:Federal Reserve, Fed I, Fed II or America sans the Fed.]

To engage in this drive down the road to right an ignorant wrong merits a lot of sweet and sour rewards … including being called names, by very emotional character assassins whose doggy dry mind unfortunately can only bite hard but cannot argue intelligently in any respectable collegial debate.

The American public knows that Dr. Ron Paul leads this revolt against the Fed. The Congressman from


should not be denied his voice against the Fed. Neither should his right be suppressed or ridiculed, in advocating his manifest intention to exhibit his patriotic-sounding but rather strange political agenda against the Federal government run by a different breed of politicians he believes are less perceptive or less heroic than he is as a libertarian crusader.

The only problem is – and this problem the public already knows — Paul is a doctor of medicine that speaks economics most economists admit they hardly understand. In this discipline no matter how far, and notwithstanding where my experience and academic advantage like the few other academicians have are coming from, I am afraid that those who hardly understand his economics includes me … the truth, I cannot hide but must humbly confess.

I do not criticize Dr. Paul’s person not because of fear of a threat of a nasty gang that I am sure Paul’s decent judgment is first to disapprove. In fact count me among those who admire the Congressman’s courage next to his amiable person who as a doctor of medicine [my son is also a doctor] is gentle to life he saves. I am only not in accord with his political ideas and critiques aired in public that many Americans like me cannot help but disagree.

For instance, we can name a couple or so of our forefathers who criticized banks and greedy bankers many, many years ago. We owe them our traditional vigilance on freedom. Their liberating wisdom always fits the problem of their time, as well as warns of foreseen harm to avoid in the future.

But their social, political and economic environments then had now changed so drastically that this latest change for a better world boggled the imagination. The explosion of scientific information, modern discoveries and technology many centuries later, was unimaginable then than it is now, and we are still warping in time towards the unknown, and therefore we expect more changes coming our way.

The harsh criticisms of a couple or so of our great ancestors against the weaknesses of banking and bankers in their time should be remembered at all times, but these should not be used against today’s central banking system or the Federal Reserve at a wrong time. These are of two different times. It is wrong to fault the Fed for the printing of paper money and for the creation of our credit system needed to make this nation the greatest, the wealthiest and the mightiest on the planet. I already explained the workings of apathy and ignorance in this regard [supra].

Are their rogue officials in the Fed banking system? It is important to repeat that if there are, they should be brought to court. There are existing laws under which the culprit could be punished.

In his relentless campaign against the Fed, the Texas Congressman is sponsoring HR 1207 to audit the Federal Reserve. It is still being brewed in Congress at this writing and to comment on it this early is premature. We may criticize or praise it when it is “cooked” and served for public blessing, in the altar of public opinion.

The need for a government audit is premised on Paul’s argument – actually based on his widely published criticisms — that the Federal Reserve is a “private” bank owned and managed by greedy bankers.

Based on that concept, this bill will create a dangerous precedent. When HR 1207 becomes a law, the door is ajar for the government to come in anytime and “audit” private corporations or any private business or entity, like how it audits the Fed, which Paul declared is a “private”, not a government, corporation. It is just a matter of time when there will be no more free enterprise to talk about outside the control of government.

Dr. Paul criticized President Obama’s drive towards radical socialism or extreme Marxist collectivism where the government holds our free enterprise by the neck.

In this sense, unknowingly, he is playing himself dangerously right into Obama’s hands.

And so are those who declare that the Fed is a private bank run by thugs because they have not read the Federal Tort Claims Act or if they did had misread its relevance to the liability of the Federal Reserve and its employees in tort claims when the Court ruled on it in the celebrated Lewis case.

Any adventurous layman pretending to know more than the lawyer knows, is bound to misunderstand the landmark ruling of the Court that I have just dissected, viz: that in tort claims the Fed does not fall into the category of ‘wholly owned’ government corporations or ‘mixed ownership’ corporations [see 31 U.S.C. Sec.856].

Those who have difficulty trying to comprehend the legalese of the rulings of the high courts shouldn’t be too lazy to read the 1913 Congressional Record, specifically H.R. Report No. 69, 63 Cong. [**6] 1st Sess. 18-19 (1913) that explains the legislative history of the United States Federal Reserve as a government authority on fiscal and monetary matters the nation has to rely on.

If only those all-knowing dragon critics of this nation’s Central Bank are resourceful, not lazy or apathetically slothful in their passion to bring down the Fed, they cannot make any foolish mistake in knowing the truth … the Fed is a government, not a private, institution that Congress intended it to be. #

© Copyright Edwin A. Sumcad. NWS access

June 20, 2009 .

The writer is an award-winning journalist. Read more about the author and his writings by clicking the NWS columnist button, or you may e-mail your comment at ed.superx722@yahoo.com.sg.




Audit The Fed Who Controls Our Money


Michael Webster

NWS Columnist

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