you bring up point that the govt gets to appt some people to the board... that does not change a private bank into a hybrid bank.
also... in terms of your hybrid argument most of the control and the profits from printing money happen at the member level.
in short... you have a reality show song and dance in front of congress but control and profits from printing money is in private hands.
http://www.monetary.org/is-the-fede...r-a-privately-controlled-organization/2008/02
Several legal proceedings further illuminate the private aspects of the Fed. This case refers to several of those cases.
1) JOHN L. LEWIS, Plaintiff/Appellant, vs. UNITED STATES OF AMERICA, Defendant/Appellee.
(No. 80-5905, UNITED STATES COURT OF APPEALS, NINTH CIRCUIT
680 F.2d 1239; 1982 U.S. App. LEXIS 20002; March 2, 1982, Submitted; April 19, 1982, Decided)
[Lewis had been injured by a car owned by the San Francisco Fed and sued the US Government for damages. Note that this ruling particularly applies to the regional Federal Reserve Banks, not necessarily the Federal Reserve Board. Thus even more ambiguity!]
Excerpts from the ruling:
The district court dismissed, holding that the Federal Reserve Bank is not a federal agency within the meaning of the Federal Reserve Act and that the court therefore lacked subject matter jurisdictionâ¦.
âFederal agencyâ 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.
There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act (28 U.S.C. § 2671), but the critical factor is the existence of federal government control over the âdetailed physical performanceâ and âday to day operationâ of that entityâ¦. Other factors courts have considered include whether the entity is an independent corporationâ¦, whether the government is involved in the entityâs financesâ¦. 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 purposes 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 Bankâs 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. § 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. § 341, and appoint officers to implement and supervise daily Bank activities. These activities 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. §§ 341 [**5] 361â¦.
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 soâ¦. 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 routineâ¦[Note: neither the Act, nor this court explained how that is done] 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 workerâs compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act. Employees traveling on Bank business are not subject to federal travel regulations and do not receive government [**7] employee discounts on lodging and services.
The Banks are listed neither as âwholly ownedâ government corporations under 31 U.S.C. § 846 nor as âmixed ownershipâ corporations under 31 U.S.C. § 856, ⦠a factor considered in 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. ⦠Additionally, Reserve Banks, as privately owned entities, receive no appropriated funds from Congress. â¦The Reserve Banks have properly been held to be federal instrumentalities for some purposesâ¦.The Reserve Banks are deemed to [**10] be federal instrumentalities for purposes of immunity from state taxationâ¦. The Reserve Banks, which further the nationâs fiscal policy, clearly perform an important governmental functionâ¦.Performance of an important governmental function, however, [**11] is but a single factor and not determinative in tort claims actionsâ¦. Brinkâs 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 [**12] instrumentality for purposes of the Service Contract Act, 41 U.S.C. § 351. ⦠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 judgment of the district court. [end of excerpts]
