|
|
 |
|
|
|
Elements in a document such as headings, titles, and captions may be capitalized in either sentence style or headline style:
|
Modern publishers tend toward a down style of capitalization, that is, toward use of fewer capitals, rather than an up style."
Here we see that in headlines, titles, captions, and in sentences, there is no authorized usage of full caps. At 4.4.1. Capitalization With Acronyms, we find the first authoritative use for full caps:
"Acronyms are always formed with capital letters. Acronyms are often coined for a particular program or study and therefore require definition. The letters of the acronym are not capitalized in the definition unless the acronym stands for a proper name:
Wrong The best electronic publishing systems combine What You See Is What You Get (WYSIWIG) features…
Correct The best electronic publishing systems combine what you see is what you get (WYSIWIG) features…
But Langley is involved with the National Aero-Space Plane (NASP) Program."
This cites, by example, that using full caps is allowable in an acronym. Acronyms are words formed from the initial letters of successive parts of a term. They never contain periods and are often not standard, so that definition is required.
Could this apply to lawful proper Christian names? If that were true, then JOHN SMITH would have to follow a definition of some sort, which it does not. For example, only if JOHN SMITH were defined as ‘John Orley Holistic Nutrition of the Smith Medical Institute To Holistics (JOHN SMITH)’ would this apply.
The most significant section appears at 4.5.3. Administrative Names:
"Official designations of political divisions and of other organized bodies are capitalized:
 | Names of political divisions |
Canada New York State
United States Northwest Territories
Virgin Islands Ontario Province
| Names of governmental units |
U.S. Government Executive Department
U.S. Congress U.S. Army
U.S. Navy
According to this official U.S. Government publication, the States are never to be spelled in full caps such as NEW YORK STATE. The proper English grammar style is New York State. This agrees, once again, with Texas Law Review's Manual on Usage & Style.
The Use of a Legal Fiction
The Real Life Dictionary of the Law
We refer to The Real Life Dictionary of the Law. The authors, Gerald and Kathleen Hill, are accomplished scholars and writers. Gerald Hill is an experienced attorney, judge, and law instructor. Here is how the term legal fiction is described:
"Legal fiction. n. A presumption of fact assumed by a court for convenience, consistency or to achieve justice. There is an old adage: ‘Fictions arise from the law, and not law from fictions.’ "
Oran’s Dictionary of the Law
"A legal fiction is an assumption that something that is (or may be) false or nonexistent is true or real. Legal fictions are assumed or invented to help do justice. For example, bringing a lawsuit to throw a nonexistent "John Doe" off your property used to be the only way to establish a clear right to the property when legal title was uncertain."
Merriam-Webster's Dictionary of Law
Merriam-Webster's Dictionary of Law 1996 states:
"legal fiction : something assumed in law to be fact irrespective of the truth or accuracy of that assumption. Example: the legal fiction that a day has no fractions -- Fields v. Fairbanks North Star Borough, 818 P.2d 658 (1991)."
This is the reason behind the use of full caps when writing a proper name. The U.S. and State Governments are deliberately using a legal fiction to "address" the Lawful Christian. We say this is deliberate because their own official publications state that proper names are not to be written in full caps. They are deliberately not following their own recognized authorities.
In the same respect, by identifying their own government entity in full caps, they are legally stating that they are also a legal fiction. As stated by Dr. Mary Newton Bruder in the beginning of this report, the use of full caps for writing a proper name is an "internal style" for what is apparently a pre-determined usage and, at this point, unknown jurisdiction.
The main key to a legal fiction is assumption as noted in each definition above.
Conclusion: There are no official or unofficial English grammar style manuals or reference publications that recognize the use of full caps when writing a proper name. To do so is considered a legal fiction.
The Assumption of a Legal Fiction
An important issue concerning this entire matter is whether or not a legal fiction, such as a proper name written in full caps, can be substituted for a lawful Christian name or any proper name, such as the State of Florida. Is the use of a legal fiction "legal"? If so, from where does this legal fiction originate and what enforces it?
A legal fiction can be used when the name of a "person" is not known by using the fictional name "John Doe". This is understood by all and needs little explanation. If you have no way to identify someone, then the legal fiction John Doe or Jane Doe is used to describe an unknown name until the proper name can be identified.
In all cases, a legal fiction is an assumption of purported fact without having shown the fact to be true or valid. It’s an acceptance with no proof. Simply, to assume is to pretend. Oran’s Dictionary of the Law says that the word assume means:
1. To take up or take responsibility for;
to receive; to undertake. See assumption.
2. To pretend.
3. To accept without proof.
These same basic definitions are used by nearly all of the modern law dictionaries. It should be noted that there is a difference between the meanings of the second and third definitions with that of the first. Pretending and accepting without proof are of the same understanding and meaning. However, to take responsibility for and receive, or assumption, does not have the same meaning. Oran’s defines assumption as:
"Formally transforming someone else's debt into your own debt. Compare with guaranty. The assumption of a mortgage usually involves taking over the seller's ‘mortgage debt’ when buying a property (often a house)."
Now, what happens if all the meanings for the word assume are combined? In a literal and definitive sense, the meaning of assume would be: The pretended acceptance, without proof, that someone has taken responsibility for, has guaranteed, or has received a debt.
Therefore, if we apply all this in defining a legal fiction, the use of a legal fiction is an assumption or pretension that the legal fiction named has received and is responsible for a debt of some sort.
Use of the legal fiction JOHN SMITH in place of the proper name John Smith implies an assumed debt guarantee without any offer of proof. The danger behind this is that if such an unproven assumption is made, then unless the assumption is proven wrong, it is considered valid.
Please go no further until you understand and comprehend exactly what the above paragraphs have stated. If necessary, re-read the above until you have a full understanding of what is involved in the meaning of a legal fiction.
An assumed debt is valid unless proven otherwise. This is in accord with the Uniform Commercial Code valid in every State and made a part of the Statutes in each State. A legal fiction written with full caps - resembling a proper name but grammatically not a proper name - is being held as a debtor for an assumed debt.
What happens if the proper name, i.e. John Doe, answers for or assumes the legal fiction, i.e. JOHN DOE? They become one and the same. This is the crux for the use of the full caps legal fictions by the U.S. Government and the States. It is the way that they can bring someone into their fictional venue and jurisdiction that they have created. By implication of definition, this also is for the purpose of some manner of assumed debt.
Why won’t they use "The State of Texas" or "John Doe" in their courts or on Driver’s Licenses? What stops them from doing this? Obviously, there is a reason for using legal fictions since they are very capable of writing proper names just as their own official style manual states. The reason behind legal fictions is found within the definitions as cited above. At this point, this should be very clear to every reader.
The Legalities Behind Legal Fictions
We could go on for hundreds of pages citing the legal basis behind the creation of legal fictions. In a nutshell, a legal fiction in and of itself, such as the STATE OF TEXAS, can create additional legal fictions. Fictions arise from the law, not the law from fictions. Take a moment to understand what that means. Legal fictions originate from any law that is used to create them, regardless of the fact that the purported foundational law is valid or not. However, a law can never originate from a fictional foundation that doesn’t exist.
The generic and original U.S. Constitution is a valid foundation document of treaty law having been created between the individual state nations. Contained within it is the required due process of law for all the participating nation states of that treaty. Proper representatives of the people in each nation state agreed upon it and signed it with their lawful seals. The federal government is not only created by it, but is also bound to operate within the guidelines of Constitutional due process. Any law that originates from the Constitutional due process is valid law. Any purported law that does not originate from it is a fictional law without validity. Thus, the true test of any American law is its basis of due process according to the generic U.S. Constitution. Was it created according to the lawful process or outside of lawful process based on that constitutional treaty?
Executive Orders and Directives
For years we have researched the lawful basis for creating full caps legal fictions and have concluded that there is no such foundation according to valid laws and due process. But what about those purported "laws" that are not valid and have not originated from constitutional due process? There’s a very simple answer to the creation of such purported laws that are really not laws at all: Executive Orders and Directives. They are the "color of law" without being valid laws of due process. They have the appearance of law and look as if they’re laws, but according to due process, they are not laws. Rather, they are "laws" based on fictional beginnings and are the basis for further fictional "laws" and other legal fictions. They are "regulated" and "promulgated" by Administrative Code, rules and procedures, not due process. Currently, Executive Orders are enforced through the legal fiction known as the federal Administrative Procedures Act. Each State has also adopted the same fictional administrative "laws".
Lincoln Establishes E.O.’s
Eighty-five years after the Independence of the united States, seven southern nation States of America walked out of the Second Session of the thirty-sixth Congress on March 27, 1861. In so doing, the Constitutional due process quorum necessary for Congress to vote was lost and Congress was adjourned sine die, or "without day". This meant that there was no lawful quorum to set a specific day and time to reconvene which, according to Robert's Rules of Order, dissolved Congress. This dissolution automatically took place because there were no provisions within the Constitution allowing the passage of any Congressional vote without a quorum of the States.
Lincoln's second Executive Order of April 1861 called Congress back into session days later, but not under the lawful authority, or lawful due process, of the Constitution. Solely in his capacity as Commander-in-Chief of the U.S. Military, Lincoln called Congress into session under authority of Martial Law. Since April of 1861, "Congress" has not met based on lawful due process. Our current "Congress" is based on legal fiction no different than a proper name written in full caps is.
Legal fiction "laws", such as the Reconstruction Acts and the implementation of the Lieber Code, were soon instituted by Lincoln and thus became the basis for our current "laws". Every purported "Act" in effect today is based on legal fiction, not lawful due process. Lincoln has been called the greatest American Lawyer and his ingenious legal rule of America enforces such a title.
The abolition of the English & American common law
Here’s an interesting quote from the 1973 session of the U.S. Supreme Court:
"The American law. In this country, the law in effect in all but a few States until mid-19th century was the pre-existing English common law... It was not until after the War Between the States that legislation began generally to replace the common law." -- Roe v. Wade, 410 U.S. 113.
In effect, Lincoln’s second Executive Order abolished the recognized English common law in America and replaced it with "laws" based on a fictional legal foundation, i.e., Executive Orders and Directives. Most States still have a reference to the common laws within their present day statutes. For example, in the Florida Statutes (1999), Title I, Chapter 2, at § 2.01 Common law and certain statutes declared in force, it states:
"The common and statute laws of England which are of a general and not a local nature, with the exception hereinafter mentioned, down to the 4th day of July, 1776, are declared to be of force in this state; provided, the said statutes and common law be not inconsistent with the Constitution and laws of the United States and the acts of the Legislature of this state. History. --s. 1, Nov. 6, 1829; RS 59; GS 59; RGS 71; CGL 87."
Note that the basis of the common law is an approved act of the people of Florida by resolution on November 6, 1829, prior to Lincoln’s Civil War. Also note that the subsequent "laws", as a result of acts of the Florida Legislature and the United States, now take priority over the common law in Florida. Since April 1861, the American and English common law was abolished and replaced with legal fiction "laws", a.k.a. Statutes, Rules and Codes, based on Executive Order, not the due process specified within the generic Constitution.
Applying it all to Current "laws"
Title III, Pleadings and Motions, Rule 9(a) Capacity, Federal Rules of Civil Procedure, states:
"When an issue is raised as to the legal existence of a named party, or the party’s capacity to be sued, or the authority of a party to be sued, the party desiring to raise the issue shall do so by specific negative averment, which shall include supporting particulars." [Bold emphasis added].
At this juncture, it’s clear that the existence of a name written with full caps is a legal fiction. This is surely an issue to be raised and the supporting particulars are outlined within this article. Use of the proper name must be insisted upon as a matter of abatement - correction - for all parties of an action of purported "law". However, the current "courts" cannot correct this since they are based on fictional law and must use fictional names. Instead, they expect the lawful Christian man or woman to accept their full caps name and become a fictional entity, just as they are.
Oklahoma Statutes
Do the individual States within the United States follow suit? The requirement of proper names, including a mandate for correction when proper names are provided, is clearly set forth when relating to criminal prosecution in the Oklahoma Statutes, Chapter 22, § 403:
"When a defendant is indicted or prosecuted by a fictitious or erroneous name, and in any stage of the proceedings his true name is discovered, it must be inserted in the subsequent proceedings, referring to the fact of his being charged by the name mentioned in the indictment or information." [Bold emphasis added].
American Jurisprudence
In general, it’s necessary to properly identify parties to court actions. If not properly identified, then judgments are void, as outlined in Volume 46, American Jurisprudence 2d, at Judgments:
"§ 100 Parties - A judgment should identify the parties for and against whom it is rendered, with such certainty that it may be readily enforced, and a judgment which does not do so may be regarded as void for uncertainty. Such identification may be achieved by naming the persons for and against whom the judgment is rendered. Technical deficiencies in the naming of the persons for and against whom judgment is rendered can be corrected if the parties are not prejudiced. A reference in a judgment to a party plainly liable, followed by an omission of that party's name from the language of the decree, at least gives rise to an ambiguity and calling for an inquiry into the court's real intention as reflected in the entire record and surrounding circumstances." [Footnote numbers are omitted; cites have not been reproduced; bold emphasis added]
The present situation in America
A legal person = a legal fiction
One of the terms used predominantly by the present civil governments and courts in America is legal person. According to them, just what is a legal person? We offer some definitions for your review:
legal person : a body of persons or an entity (as a corporation) considered as having many of the rights and responsibilities of a natural person and esp. the capacity to sue and be sued. -- Merriam-Webster's Dictionary of Law 1996.
Person. 1. A human being (a "natural" person). 2. A corporation (an "artificial" person). Corporations are treated as persons in many legal situations. Also, the word "person" includes corporations in most definitions in this dictionary. 3. Any other "being" entitled to sue as a legal entity (a government, an association, a group of Trustees, etc.). 4. The plural of person is persons, not people (see that word). – Oran’s Dictionary of the Law, West Group 1999.
Person. An entity with legal rights and existence including the ability to sue and be sued, to sign contracts, to receive gifts, to appear in court either by themselves or by lawyer and, generally, other powers incidental to the full expression of the entity in law. Individuals are "persons" in law unless they are minors or under some kind of other incapacity such as a court finding of mental incapacity. Many laws give certain powers to "persons" which, in almost all instances, includes business organizations that have been formally registered such as partnerships, corporations or associations. – Duhaime’s Law Dictionary.
PERSON, noun. per'sn. [Latin persona; said to be compounded of per, through or by, and sonus, sound; a Latin word signifying primarily a mask used by actors on the stage.] -- Webster's 1828 Dictionary.
A person is basically an entity - legal fiction - of some kind that has been legally created and has the legal capacity to be sued. Isn’t it odd that the word lawful is not used within these definitions?
Legal or Lawful?
We feel that it’s quite necessary to also define what is legal as opposed with what is lawful. The generic Constitution is lawful. That fact has already been established. The present civil authorities and their courts prefer to use the word legal. Is there a difference in the meanings? The following is quoted from A Dictionary of Law 1893:
Lawful. In accordance with the law of the land; according to the law; permitted, sanctioned, or justified by law. "Lawful" properly implies a thing conformable to or enjoined by law; "Legal", a thing in the form or after the manner of law or binding by law. A writ or warrant issuing from any court, under color of law, is a "legal" process however defective. See legal. [Bold emphasis added]
Legal. Latin legalis. Pertaining to the understanding, the exposition, the administration, the science and the practice of law: as, the legal profession, legal advice; legal blanks, newspaper. Implied or imputed in law. Opposed to actual. "Legal" looks more to the letter, and "Lawful" to the spirit, of the law. "Legal" is more appropriate for conformity to positive rules of law; "Lawful" for accord with ethical principle. "Legal" imports rather that the forms of law are observed, that the proceeding is correct in method, that rules prescribed have been obeyed; "Lawful" that the right is actful in substance, that moral quality is secured. "Legal" is the antithesis of "equitable", and the equivalent of "constructive". 2 Abbott's Law Dict. 24. [Bold emphasis added]
Legal matters administrate, conform to, and follow rules. They are equitable in nature and are implied rather than actual. A legal process can be defective in law. This falls in line with our previous discussions of legal fictions and the color of law. To be legal, a matter does not follow the law. Instead, it conforms to and follows the rules of law. This may help your understanding as to why the Federal and State Rules of Civil & Criminal Procedure are cited in every court petition so as to conform to legal requirements of the legal fictions, i.e., the STATE OF GEORGIA or the U.S. FEDERAL GOVERNMENT, that rule the courts.
Lawful matters are ethically enjoined in the law of the land - the law of the people – and are actual in nature, not implied. This is why the lawful generic Constitution has little bearing or authority in the present day legal courts.
Executive Orders rule the land
The current situation is now this: Legalism has taken over the law. The administration of legal rules, codes, and statutes are now being substituted for actual law. This takes place on a Federal as well as State level. Government administrates what it has created through its own purported "laws", which are not lawful, but purely legal. They are legal fictions based on legally - fictionally - created authority. They are authorized and enforced by legal Executive Orders. Executive Orders are not lawful and never have been. As you read the following, be aware of the words code and administration.
For example, let’s take a quick look at the United States Census 2000. The legal authority for this census comes from Office of Management and Budget (OMB) Approval No. 0607-0856. The OMB is a part of the Executive Office of the President of the United States. The U.S. Census Bureau is responsible for implementing the national census, which is a division of the Economics and Statistics Administration of the U.S. Department of Commerce (USDOC). The USDOC is a department of the Executive Branch. Obviously, Census 2000 is authorized, carried out, controlled, enforced and implemented by the President, a.k.a. the Executive Branch of the Federal Government.
In fact, the Executive Office of the President controls the entire nation through various departments and agencies effecting justice, communications, health, energy, transportation, education, defense, treasury, labor, agriculture, mails, and much more, through a myriad of Executive Orders, Proclamations, Policies, and Decisions.
All the U.S. Presidents since Lincoln have claimed their "authority" for these Executive Orders is generally based on Article II, Section 2 of the U.S. Constitution:
"The President shall be commander in chief of the Army and Navy of the United States, and of the militia of the several states, when called into the actual service of the United States; …He shall have power, by and with the advice and consent of the Senate, to make treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the advice and consent of the Senate, shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court, and all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments."
In reality, the Congress is completely by-passed. Since the Senate was convened in April 1861 by Presidential Executive Order No. 2, not by lawful constitutional due process, the current Senate is also under the direct authority of the Executive Office of the President. The President legally needs neither the consent nor a vote from the Senate simply because the Senate’s legal authority to meet exists only by Executive Order. Ambassadors, public ministers, consuls, Federal judges, and all officers of the UNITED STATES are appointed by, and under authority of, the Executive Office of the President.
The Federal Registry is an Executive function
For the past 65 years, every Presidential Executive Order has become purported "law" simply by its publication in the Federal Registry, which is operated by the Office of the Federal Register (OFR). In 1935, the OFR was established by the Federal Register Act. The purported authority for the OFR is found within the United States Code, Title 44, at Chapter 15:
The Administrative Committee of the Federal Register shall consist of the Archivist of the United States or Acting Archivist, who shall be chairman, an officer of the Department of Justice designated by the Attorney General, and the Public Printer or Acting Public Printer. The Director of the Federal Register shall act as secretary of the committee. The committee shall prescribe, with the approval of the President, regulations for carrying out this chapter."
Notice that the entire Administrative Committee of the Federal Register is comprised of officers of the Federal Government. Who appoints all Federal officers? The President does. This act also gives the President the authority to decree all the regulations to carry out the act. This is quite a monopoly we’re seeing here whereby the Executive establishes, controls, regulates and enforces the Federal Government without need for any approval from the Senate. How could anyone possibly call this lawful?
In 1917, President Woodrow Wilson couldn’t persuade Congress to agree with his desire to arm United States vessels utilizing hostile German waters before the United States entered World War I. So, Wilson simply invoked the "policy" through a Presidential Executive Order. President Franklin D. Roosevelt issued Executive Order No. 9066 in December 1941. His order forced 100,000 Americans of Japanese descent to be rounded up and placed in concentration camps while all their property was confiscated.
Is it any wonder that the Congress he legally controls did not impeach President William Jefferson Clinton when the evidence for impeachment was overwhelming? On that note, why is it that the lawyer-Presidents have used Executive Orders the most? Who but a lawyer would know and understand legal rules the best. Sadly, they enforce what’s legal and ignore what’s lawful.
How debt is assumed by legal fictions
We now refer back to the matter of assumption, as already discussed, with its relationship to legal fictions, i.e. THE STATE OF CALIFORNIA or JOHN SMITH. Since an assumption, by definition, implies debt, what debt does a legal fiction assume? Now that we’ve explored the legal - executive - basis of the current Federal and State governments, it’s time to put all of this together.
The government use of full caps in place of proper names is absolutely no mistake. It signifies an internal - legal - rule and authority. Its foundation is legal fiction and the result is further legal fiction that is created, promulgated, instituted, administrated, and enforced via legal rule, code, statute and policy. Let’s just call them ‘the laws that are but never were.’
Qui sentit commodum, sentire debet et onus. He who enjoys the benefit, ought also to bear the burden. He who enjoys the advantage of a right takes the accompanying disadvantage -- a privilege is subject to its condition or conditions. -- Bouvier's Maxims of Law 1856.
The Birth Certificate
Since the early 1960's, State governments - created legal fictions signified by full caps - have issued birth certificates to "persons" with legal fiction full caps names. This is not a lawful record of your physical birth, but a legal fiction as signified by the use of the full caps. It may look as if it’s your proper name, but that’s impossible since no proper name is ever written in full caps. The Birth Certificate is the government's created legal instrument for its legal title of ownership, or deed, to the personal legal fiction they have created just for you.
One important area to address, before going any further, is the governmental use of older data storage from the late 1950’s until the early 1980’s. As a "leftover" from various Teletype oriented systems, many government data storage methods used full caps for proper names. The IRS was supposedly still complaining about some of their antiquated storage systems as recent as the early 1980’s. At first, this may have been a necessity of the technology at the time, not a deliberate act. Perhaps, when this technology was first being used and implemented into the mainstream of communications, some legal experts saw it as a perfect tool for their legal fictions. What better excuse could there be?
However, since local, State and Federal offices primarily used typewriters during that same time period, and Birth Certificates and other important documents, such as Driver’s Licenses, were produced with typewriters, it’s very doubtful that this poses much of an excuse to explain full caps usage for proper names. The only reasonable usage of the older databank full caps storage systems would have been for addressing envelopes or certain forms in bulk, including payment checks, which the governments did frequently.
Automated computer systems, with daisy wheel and pin printers used prevalently in the early 1980’s, emulated the IBM electric typewriter Courier or Helvetica fonts in both upper and lower case letters. Shortly thereafter, the introduction of laser and ink jet printers with multiple fonts became the standard. For the past fifteen years, there is no excuse that the government computers won’t allow the use of lower case letters unless the older data is still stored in its original form, i.e. full caps, and has not been translated due to the costs of re-entry. But this does not excuse the entry of new data, only "legacy" data. In fact, on many government forms today, proper names are in full caps while other areas of the same computer produced document are in both upper and lower case. One can only conclude that now, more than ever, the use of full caps in substitution the writing a proper name is no mistake.
When a child is born, the hospital sends the original, not a copy, of the record of live birth to the State Bureau of Vital Statistics, sometimes called the Department of Health and Rehabilitative Services (HRS). Each STATE is required to supply the UNITED STATES with birth, death, and health statistics. The STATE agency that receives the original record of live birth keeps it and then issues a Birth Certificate in the name of the child's fictional person, as signified in full caps, i.e. JAMES SMITH.
cer·tif·i·cate, noun. Middle English certificat, from Middle French, from Medieval Latin certificatum, from Late Latin, neuter of certificatus, past participle of certificare, to certify, 15th century. 3: a document evidencing ownership or debt. -- Merriam Webster Dictionary 1998.
The Birth Certificate issued by the State is then registered with the U.S. Department of Commerce - the Executive Office - specifically through their own sub-agency, the U.S. Census Bureau, who is responsible to register vital statistics from all the States. The word registered, as it is used within commercial or legal based equity law, does not mean that the full caps name was merely noted in a book for reference purposes. When a birth certificate is registered with the U.S. Department of Commerce, it means that the legal person named on it in full caps has become a surety or guarantor.
registered. Security, bond. -- Merriam-Webster's Dictionary of Law 1996.
Security. 1a: Something (as a mortgage or collateral) that is provided to make certain the fulfillment of an obligation. Example: used his property as security for a loan. 1b: "surety". 2: Evidence of indebtedness, ownership, or the right to ownership. – Ibid.
Bond. 1a: A usually formal written agreement by which a person undertakes to perform a certain act (as fulfill the obligations of a contract) ...with the condition that failure to perform or abstain will obligate the person ...to pay a sum of money or will result in the forfeiture of money put up by the person or surety. 1b: One who acts as a surety. 2: An interest-bearing document giving evidence of a debt issued by a government body or corporation that is sometimes secured by a lien on property and is often designed to take care of a particular financial need. -- Ibid.
Surety. The person who has pledged him or herself to pay back money or perform a certain action if the principal to a contract fails, as collateral, and as part of the original contract. -- Duhaime's Law Dictionary.
1: a formal engagement (as a pledge) given for the fulfillment of an undertaking. 2: one who promises to answer for the debt or default of another. Under the Uniform Commercial Code, however, a surety includes a guarantor, and the two terms are generally interchangeable. -- Merriam Webster's Dictionary of Law 1996.
Guarantor. A person who pledges collateral for the contract of another, but separately, as part of an independently contract with the obligee of the original contract. -- Duhaime's Law Dictionary.
It's not difficult to see that a State created birth certificate, written with full caps in the name of a legal person, is a document evidencing debt the moment it's issued. This is how it works: Once each State has registered the Birth Certificates with the U.S. Department of Commerce, the U.S. Department of the Treasury - also a part of the Executive Office - then issues Treasury Securities in the form of Treasury Bonds, Notes, and Bills using the birth certificates as sureties or guarantors for these purported Securities. This is based on the future tax revenues of the legal person. This means that the bankrupt corporate U.S. can guarantee to the purchasers of their securities the lifetime labor and tax revenues of all Americans as collateral for payment. They simply do this by converting the lawful name into a legal person.
Cujusque rei potissima pars principium est-- The principal part of everything is in the beginning.
Legally, you are considered a slave or indentured servant to the various Federal, State and local governments via your STATE issued and created Birth Certificate in the name of your full caps person. The reason this Birth Certificate was issued is so that - exclusively - they hold the title of birth to your legal person. This is compounded further when one voluntarily obtains a driver's license or a Social Security Identification number. They own even your personal and private life through your STATE issued marriage certificate issued in the names of legal persons. You have no Rights in birth, marriage, or even death. They hold the sovereign right to all legal fiction titles they have created.
Our current problem is that we have voluntarily agreed to their system of legal fiction law by simply remaining silent - a legal default - and not taking claim to our own Rights. The legal rules and codes enforce themselves. There is no court hearing to determine if those rules are correct. Their "law" is self-regulating and self-supporting. Once set into motion, their "laws" automatically come into effect provided the legal process has been followed.
The various bankruptcies
The legally created fiction called the UNITED STATES is bankrupt and holds no lawful Constitutionally mandated silver or gold - coin and bullion - to back up or pay their debts. For example: all privately held and federally held gold coins and bullion in America was seized by Executive Order of April 5, 1933 and paid to the creditor, the private Federal Reserve Bank Corporation (FRB) under the terms of bankruptcy.
Congress - still meeting under Executive Order authority - confirmed this bankruptcy through the Joint Resolution to Suspend The Gold Standard And Abrogate The Gold Clause, June 5, 1933 in H.J. Res. 192, 73rd Congress, 1st session, Public Law 73-10. Within this 1933 Public Law, it states in part:
"...every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, is declared to be against public policy".
In 1950, the corporate U.S. declared bankruptcy a second time, whereby the Secretary of Treasury was appointed as "Receiver" of the bankruptcy in Reorganization Plan No. 26, Title 5 USC 903, Public Law 94-564, Legislative History, page 5967.
The only asset the UNITED STATES has, in order to pay their bankruptcy debt since 1933, is the people themselves. But, if the UNITED STATES openly declared this, the people would never allow their labors and future to be collateral to this bankruptcy debt. Consequently, they legally pledge the future labor and tax revenues of Americans, by and through the full caps fictional legal persons they have created, as collateral for credit - loans - to pay daily operational costs and the ever increasing debt.
Full caps legal person v. the lawful being
Just who is the full caps person, i.e. JOHN JAMES SMITH? He’s the legal fiction the government created to take the place of the real being, i.e. John James Smith. The lawful Christian name of birthright has been substituted by a legal fiction created by the government. If the lawful Christian name answers as the legal person, the two are recognized as being one and the same. However, if the lawful being refuses acceptance of the legal fiction, the two are separated. Therein lies the simple solution to the entire matter: refusal by the lawful Christian to accept or answer for the legal person.
How did this happen? A result of the federal government bankruptcies was their creation of a legal fiction known as THE UNITED STATES as a part of their legal reorganization. Each STATE was also converted to their respective fictional legal person, i.e. THE STATE OF TEXAS. Legal fictions can create further legal fictions, such as corporations or any other fictional persons easily identified by being written with full caps. Once this was accomplished, the entire process was set into motion.
All areas of government, including the purported courts of law, are currently authorized by, and operating as, legally created fictions. For example, the CIRCUIT COURT OF WAYNE COUNTY or the U.S. DISTRICT COURT can only recognize other legal persons. This is why your lawful name is never entered in their records. It has been substituted with the legal person written with full caps. Jurisdiction in such legal fiction courts is only with other legal fictions – persons. The only jurisdiction a lawful being can enter into is a lawful constitutional court – a common law venue. The "catch 22" is that lawful courts no longer exist. Only legal courts are available to Americans.
The purpose and reason for the government use of proper names written in full caps is now revealed. The only way to counter this is for lawful Americans to stop accepting the use of the substituted legal fiction the State has given them. Every document now issued by any government addresses the person written in full caps. Lawful Americans must insist that they are not that legal fiction and refuse to accept it. By joining together and doing so from the local level, each community will begin to upset the legal order. Lawful Americans must begin to demand lawful government and lawful courts. The legal fictions can only come to an end when the people refuse to use or recognize them.
The only way to restore lawful government in America is for the people to refuse the privileges of the legal government now unlawfully in place. We’ve all been duped and the billboard was right before our own eyes. The use of full caps to write a proper name is absolutely no mistake.
Religious Liberty Protection Act
Calendar No. 436
106th CONGRESS
2d Session
S. 2081
Entitled the `Religious Liberty Protection Act of 2000'.
IN THE SENATE OF THE UNITED STATES
February 22, 2000
Mr. HATCH introduced the following bill; which was read the first time
February 23, 2000
Read the second time and placed on the calendar
A BILL
Entitled the `Religious Liberty Protection Act of 2000'.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Religious Liberty Protection Act of 2000'.
SEC. 2. PROTECTION OF RELIGIOUS EXERCISE.
(a) GENERAL RULE- Except as provided in subsection (b), a government shall not substantially burden a person's religious exercise--
(1) in a program or activity, operated by a government, that receives Federal financial assistance; or
(2) in any case in which the substantial burden on the person's religious exercise affects, or in which a removal of that substantial burden would affect, commerce with foreign nations, among the several States, or with Indian tribes;
even if the burden results from a rule of general applicability.
(b) EXCEPTION- A government may substantially burden a person's religious exercise if the government demonstrates that application of the burden to the person--
(1) is in furtherance of a compelling governmental interest; and
(2) is the least restrictive means of furthering that compelling governmental interest.
(c) LIMITATION- This Act does not apply if the only basis for applying the Act is subsection (a)(2) and if the government demonstrates that all similar religious exercise and all substantial burdens on, or the removal of all substantial burdens from, similar religious exercise would not lead in the aggregate to a substantial effect on commerce or on activities having a substantial relation to commerce.
(d) REMEDIES OF THE UNITED STATES- Nothing in this section shall be construed to authorize the United States to deny or withhold Federal financial assistance as a remedy for a violation of this Act. Nothing in this subsection shall be construed to deny, impair, or otherwise affect any right or authority of the Attorney General, the United States, or any agency, officer, or employee of the United States, under law other than this subsection, including section 4(d), to institute or intervene in any action or proceeding.
SEC. 3. ENFORCEMENT OF CONSTITUTIONAL RIGHTS.
(a) PROCEDURE- If a claimant produces prima facie evidence to support a claim alleging a violation of the Free Exercise Clause or a violation of a provision of this Act enforcing that clause, the government shall bear the burden of persuasion on any element of the claim, except that the claimant shall bear the burden of persuasion on whether the law (including a regulation) or government practice that is challenged by the claim burdens or substantially burdens the claimant's exercise of religion.
(b) LAND USE REGULATION-
(1) LIMITATION ON LAND USE REGULATION-
(A) INDIVIDUALIZED ASSESSMENTS- If, in applying or implementing any land use regulation (including an exemption), or system of land use regulations (including exemptions), a government has the authority to make individualized assessments of the proposed uses to which real property would be put, the government may not impose a substantial burden on the religious exercise of a religious assembly or institution, or of a person in the person's home, unless the government demonstrates that application of the burden to that assembly, institution, or person--
(i) is in furtherance of a compelling governmental interest; and
(ii) is narrowly tailored to further that compelling governmental interest.
(B) EQUAL TERMS- No government shall impose or implement a land use regulation in a manner that does not treat religious assemblies or institutions on equal terms with nonreligious assemblies or institutions.
(C) NONDISCRIMINATION- No government shall impose or implement a land use regulation that discriminates against any assembly or institution on the basis of religion or religious denomination.
(D) EXCLUSIONS AND LIMITS- No government with zoning authority shall unreasonably exclude from the jurisdiction over which that government has authority, or unreasonably
limit within that jurisdiction, assemblies or institutions principally devoted to religious exercise.
(2) FULL FAITH AND CREDIT- Adjudication of a claim of a violation of the Free Exercise Clause or this subsection in a non-Federal forum shall be entitled to full faith and credit in a Federal court only if the claimant had a full and fair adjudication of that claim in the non-Federal forum.
(3) NONPREEMPTION- Nothing in this subsection shall preempt State law that is equally or more protective of religious exercise.
SEC. 4. JUDICIAL RELIEF.
(a) CAUSE OF ACTION- A person may assert a violation of this Act as a claim or defense in a judicial proceeding and obtain appropriate relief against a government. Standing to assert a claim or defense under this section shall be governed by the general rules of standing under article III of the Constitution.
(b) ATTORNEYS' FEES- Section 722(b) of the Revised Statutes (42 U.S.C. 1988(b)) is amended--
(1) by inserting `the Religious Liberty Protection Act of 2000,' after `Religious Freedom Restoration Act of 1993,'; and
(2) by striking the comma that follows a comma.
(c) PRISONERS- Any litigation under this Act in which the claimant is a prisoner shall be subject to the Prison Litigation Reform Act of 1995 (including provisions of law amended by that Act).
(d) AUTHORITY OF UNITED STATES TO ENFORCE THIS ACT- The United States may bring an action for injunctive or declaratory relief to enforce compliance with this Act.
(e) SOVEREIGN IMMUNITY- Nothing in this Act shall be construed to abrogate the sovereign immunity of a State.
SEC. 5. RULES OF CONSTRUCTION.
(a) RELIGIOUS BELIEF UNAFFECTED- Nothing in this Act shall be construed to authorize any government to burden any religious belief.
(b) RELIGIOUS EXERCISE NOT REGULATED- Nothing in this Act shall create any basis for restricting or burdening religious exercise or for claims against a religious organization, including any religiously affiliated school or university, not acting under color of law.
(c) CLAIMS TO FUNDING UNAFFECTED- Nothing in this Act shall create or preclude a right of any religious organization to receive funding or other assistance from a government, or of any person to receive government funding for a religious activity, but this Act may require government to incur expenses in its own operations to avoid imposing a burden or a substantial burden on religious exercise.
(d) OTHER AUTHORITY TO IMPOSE CONDITIONS ON FUNDING UNAFFECTED- Nothing in this Act shall--
(1) authorize a government to regulate or affect, directly or indirectly, the activities or policies of a person other than a government as a condition of receiving funding or other assistance; or
(2) restrict any authority that may exist under other law to so regulate or affect, except as provided in this Act.
(e) GOVERNMENTAL DISCRETION IN ALLEVIATING BURDENS ON RELIGIOUS EXERCISE- A government may avoid the preemptive force of any provision of this Act by changing the policy or practice that results in a substantial burden on religious exercise, by retaining the policy or practice and exempting the substantially burdened religious exercise, by providing exemptions from the policy or practice for applications that substantially burden religious exercise, or by any other means that eliminates the substantial burden.
(f) EFFECT ON OTHER LAW- With respect to a claim brought to enforce section 2(a)(2), proof that a substantial burden on a person's religious exercise, or removal of that burden, affects or would affect commerce shall not establish any inference or presumption that Congress intends that any religious exercise is, or is not, subject to any law other than this Act.
(g) BROAD CONSTRUCTION- This Act shall be construed in favor of a broad protection of religious exercise, to the maximum extent permitted by the terms of this Act and the Constitution.
(h) SEVERABILITY- If any provision of this Act or of an amendment made by this Act, or any application of such provision to any person or circumstance, is held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the application of the provision to any other person or circumstance shall not be affected.
SEC. 6. ESTABLISHMENT CLAUSE UNAFFECTED.
Nothing in this Act shall be construed to affect, interpret, or in any way address that portion of the first amendment to the Constitution prohibiting laws respecting an establishment of religion (referred to in this section as the `Establishment Clause'). Granting government funding, benefits, or exemptions, to the extent permissible under the Establishment Clause, shall not constitute a violation of this Act. As used in this section, the term `granting', used with respect to government funding, benefits, or exemptions, does not include the denial of government funding, benefits, or exemptions.
SEC. 7. AMENDMENTS TO RELIGIOUS FREEDOM RESTORATION ACT.
(a) DEFINITIONS- Section 5 of the Religious Freedom Restoration Act of 1993 (42 U.S.C. 2000bb-2) is amended--
(1) in paragraph (1), by striking `a State, or subdivision of a State' and inserting `a covered entity or a subdivision of such an entity';
(2) in paragraph (2), by striking `term' and all that follows through `includes' and inserting `term `covered entity' means'; and
(3) in paragraph (4), by striking all after `means,' and inserting `religious exercise, as defined in section 8 of the Religious Liberty Protection Act of 2000.'.
(b) CONFORMING AMENDMENT- Section 6(a) of the Religious Freedom Restoration Act of 1993 (42 U.S.C. 2000bb-3(a)) is amended by striking `and State'.
SEC. 8. DEFINITIONS.
In this Act--
(1) the term `demonstrates' means meets the burdens of going forward with the evidence and of persuasion;
(2) the term `Free Exercise Clause' means that portion of the first amendment to the Constitution that proscribes laws prohibiting the free exercise of religion and includes the application of that proscription under the 14th amendment to the Constitution;
(3) the term `government'--
(A) means--
(i) a State, county, municipality, or other governmental entity created under the authority of a State;
(ii) any branch, department, agency, instrumentality, subdivision, or official of an entity listed in clause (i); and
(iii) any other person acting under color of State law; and
(B) for the purposes of sections 3(a) and 5, includes the United States, a branch, department, agency, instrumentality, subdivision, or official of the United States, and any person acting under color of Federal law;
(4) the term `land use regulation' means a law or decision by a government that limits or restricts a private person's use or development of land (including a structure affixed to land), if--
(A) the law or decision applies to 1 or more particular parcels of land or to land within 1 or more designated geographical zones; and
(B) the private person has an ownership, leasehold, easement, servitude, or other property interest in the regulated land or a contract or option to acquire such an interest;
(5) the term `program or activity' means a program or activity as defined in paragraph (1) or (2) of section 606 of the Civil Rights Act of 1964 (42 U.S.C. 2000d-4a); and
(6) the term `religious exercise'--
(A) means any exercise of religion, whether or not compelled by, or central to, a system of religious belief; and
(B) includes--
(i) the use, building, or conversion of real property by a person or entity intending that property to be used for religious exercise; and
(ii) any conduct protected as exercise of religion under the first amendment to the Constitution.
Calendar No. 436
106th CONGRESS
2d Session
S. 2081
A BILL
Entitled the `Religious Liberty Protection Act of 2000'.
Back to Top
War Powers Act Public Law 93-148
93rd Congress, H. J. Res. 542 November 7, 1973
Joint Resolution Concerning the war powers of Congress and the President.
Resolved by the Senate and the House of Representatives of the United States of America in Congress assembled,
SHORT TITLE
SECTION 1. This joint resolution may be cited as the "War Powers Resolution".
PURPOSE AND POLICY
SEC. 2. (a) It is the purpose of this joint resolution to fulfill the intent of the framers of the Constitution of the United States and insure that the collective judgment of both the Congress and the President will apply to the introduction of United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicate by the circumstances, and to the continued use of such forces in hostilities or in such situations.
(b) Under article I, section 8, of the Constitution, it is specifically provided that the Congress shall have the power to make all laws necessary and proper for carrying into execution, not only its own powers but also all other powers vested by the Constitution in the Government of the United States, or in any department or officer thereof.
© The constitutional powers of the President as Commander-in-Chief to introduce United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, are exercised only pursuant to (1) a declaration of war, (2) specific statutory authorization, or (3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.
CONSULTATION
SEC. 3. The President in every possible instance shall consult with Congress before introducing United States Armed Forces into hostilities or into situation where imminent involvement in hostilities is clearly indicated by the circumstances, and after every such introduction shall consult regularly with the Congress until United States Armed Forces are no longer engaged in hostilities or have been removed from such situations.
REPORTING
Sec. 4.
(a) In the absence of a declaration of war, in any case in which United States Armed Forces are introduced--
(1) into hostilities or into situations where imminent involvement in hostilities is clearly indicated by the circumstances;
(2) into the territory, airspace or waters of a foreign nation, while equipped for combat, except for deployments which relate solely to supply, replacement, repair, or training of such forces; or
(3) in numbers which substantially enlarge United States Armed Forces equipped for combat already located in a foreign nation; the president shall submit within 48 hours to the Speaker of the House of Representatives and to the President pro tempore of the Senate a report, in writing, setting forth--
(A) the circumstances necessitating the introduction of United States Armed Forces;
(B) the constitutional and legislative authority under which such introduction took place; and the estimated scope and duration of the hostilities or involvement.
a. The President shall provide such other information as the Congress may request in the fulfillment of its constitutional responsibilities with respect to committing the Nation to war and to the use of United States Armed Forces abroad Whenever United States Armed Forces are introduced into hostilities or into any situation described in subsection (a) of this section, the President shall, so long as such armed forces continue to be engaged in such hostilities or situation, report to the Congress periodically on the status of such hostilities or situation as well as on the scope and duration of such hostilities or situation, but in no event shall he report to the Congress less often than once every six months.
CONGRESSIONAL ACTION SEC. 5. (a) Each report submitted pursuant to section 4(a)(1) shall be transmitted to the Speaker of the House of Representatives and to the President pro tempore of the Senate on the same calendar day. Each report so transmitted shall be referred to the Committee on Foreign Affairs of the House Representatives and to the Committee on Foreign Relations of the Senate for appropriate action. If, when the report is transmitted, the Congress has adjourned sine die or has adjourned for any period in excess of three calendar days, the Speaker of the House of Representatives and the President pro tempore of the Senate, if they deem it advisable (or if petitioned by at least 30 percent of the membership of their respective Houses) shall jointly request the President to convene Congress in order that it may consider the report and take appropriate action pursuant to this section.(b) Within sixty calendar days after a report is submitted or is required to be submitted pursuant to section 4(a)(1), whichever is earlier, the President shall terminate any use of Untied States Armed Forces with respect to which such report was submitted (or required to be submitted), unless the Congress (1) has declared war or has enacted a specific authorization for such use of United States Armed Forces, (2) has extended by law such sixty-day period, or (3) is physically unable to meet as a result of an armed attack upon the United States. Such sixty-day period shall be extended for not more than an additional thirty days if the President determines and certifies to the Congress in writing that unavoidable military necessity respecting the safety of United States Armed Forces requires the continued use of such armed forces in the course of bringing about a prompt removal of such forces. © Notwithstanding subsection (b), at any time that United States Armed Forces are engaged in hostilities outside the territory of the United States, its possessions and territories without a declaration of war or specific statutory authorization, such forces shall be removed by the President if the Congress so directs by concurrent resolution.
CONGRESSIONAL PRIORITY PROCEDURES FOR JOINT RESOLUTION OR BILL
SEC. 6. (a) Any joint resolution or bill introduced pursuant to section
(b) at least thirty calendar days before the expiration of the sixty-day period specified in such section shall be referred to the Committee on Foreign Affairs of the House of Representatives or the Committee on Foreign Relations of the Senate, as the case may be, and such committee shall report one such joint resolution or bill, together with its recommendations, not later than twenty-four calendar days before the expiration of the sixty-day period specified in such section, unless such House shall otherwise determine by the yeas and nays.
(b) Any joint resolution or bill so reported shall become the pending business of the House in question (in the case of the Senate the time for debate shall be equally divided between the proponents and the opponents), and shall be voted on within three calendar days thereafter, unless such House shall otherwise determine by yeas and nays.
© Such a joint resolution or bill passed by one House shall be referred to the committee of the other House named in subsection (a) and shall be reported out not later than fourteen calendar days before the expiration of the sixty-day period specified in section 5(b). The joint resolution or bill so reported shall become the pending business of the House in question and shall be voted on within three calendar days after it has been reported, unless such House shall otherwise determine by yeas and nays.
(d) In the case of any disagreement between the two Houses of Congress with respect to a joint resolution or bill passed by both Houses, conferees shall be promptly appointed and the committee of conference shall make and file a report with respect to such resolution or bill not later than four calendar days before the expiration of the sixty-day period specified in section 5(b). In the event the conferees are unable to agree within 48 hours, they shall report back to their respective Houses in disagreement. Notwithstanding any rule in either House concerning the printing of conference reports in the Record or concerning any delay in the consideration of such reports, such report shall be acted on by both Houses not later than the expiration of such sixty-day period.
CONGRESSIONAL PRIORITY PROCEDURES FOR CONCURRENT RESOLUTION
SEC. 7.
(a) Any concurrent resolution introduced pursuant to section 5(b) at least thirty calendar days before the expiration of the sixty-day period specified in such section shall be referred to the Committee on Foreign Affairs of the House of Representatives or the Committee on Foreign Relations of the Senate, as the case may be, and one such concurrent resolution shall be reported out by such committee together with its recommendations within fifteen calendar days, unless such House shall otherwise determine by the yeas and nays.
(b) Any concurrent resolution so reported shall become the pending business of the House in question (in the case of the Senate the time for debate shall be equally divided between the proponents and the opponents), and shall be voted on within three calendar days thereafter, unless such House shall otherwise determine by yeas and nays.
© Such a concurrent resolution passed by one House shall be referred to the committee of the other House named in subsection (a) and shall be reported out by such committee together with its recommendations within fifteen calendar days and shall thereupon become the pending business of such House and shall be voted on within three calendar days after it has been reported, unless such House shall otherwise determine by yeas and nays.
(d) In the case of any disagreement between the two Houses of Congress with respect to a concurrent resolution passed by both Houses, conferees shall be promptly appointed and the committee of conference shall make and file a report with respect to such concurrent resolution within six calendar days after the legislation is referred to the committee of conference.
Notwithstanding any rule in either House concerning the printing of conference reports in the Record or concerning any delay in the consideration of such reports, such report shall be acted on by both Houses not later than six calendar days after the conference report is filed. In the event the conferees are unable to agree within 48 hours, they shall report back to their respective Houses in disagreement.
INTERPRETATION OF JOINT RESOLUTION
SEC. 8. (a) Authority to introduce United States Armed Forces into hostilities or into situations wherein involvement in hostilities is clearly indicated by the circumstances shall not be inferred—
(1) from any provision of law (whether or not in effect before the date of the enactment of this joint resolution), including any provision contained in any appropriation Act, unless such provision specifically authorizes the introduction of United States Armed Forces into hostilities or into such situations and stating that it is intended to constitute specific statutory authorization within the meaning of this joint resolution; or
(2) from any treaty heretofore or hereafter ratified unless such treaty is implemented by legislation specifically authorizing the introduction of United States Armed Forces into hostilities or into such situations and stating that it is intended to constitute specific statutory authorization within the meaning of this joint resolution.
(b) Nothing in this joint resolution shall be construed to require any further specific statutory authorization to permit members of United States Armed Forces to participate jointly with members of the armed forces of one or more foreign countries in the headquarters operations of high-level military commands which were established prior to the date of enactment of this joint resolution and pursuant to the United Nations Charter or any treaty ratified by the United States prior to such date.
© For purposes of this joint resolution, the term "introduction of United States Armed Forces" includes the assignment of member of such armed forces to command, coordinate, participate in the movement of, or accompany the regular or irregular military forces of any foreign country or government when such military forces are engaged, or there exists an imminent threat that such forces will become engaged, in hostilities.
(d) Nothing in this joint resolution--
(1) is intended to alter the constitutional authority of the Congress or of the President, or the provision of existing treaties; or
(2) shall be construed as granting any authority to the President with respect to the introduction of United States Armed Forces into hostilities or into situations wherein involvement in hostilities is clearly indicated by the circumstances which authority he would not have had in the absence of this joint resolution.
SEPARABILITY CLAUSE
SEC. 9.
If any provision of this joint resolution or the application thereof to any person or circumstance is held invalid, the remainder of the joint resolution and the application of such provision to any other person or circumstance shall not be affected thereby.
EFFECTIVE DATE
SEC. 10. This joint resolution shall take effect on the date of its enactment.
CARL ALBERT Speaker of the House of Representatives.
JAMES O. EASTLAND President of the Senate pro tempore.
IN THE HOUSE OF REPRESENTATIVES, U.S.,
November 7, 1973.The House of Representatives having proceeded to reconsider the resolution (H. J. Res 542) entitled "Joint resolution concerning the war powers of Congress and the President", returned by the President of the United States with his objections, to the House of Representatives, in which it originated, it was
Resolved, That the said resolution pass, two-thirds of the House of
Representatives agreeing to pass the same.
Attest: W. PAT JENNINGS Clerk.
I certify that this Joint Resolution originated in the House of Representatives.
W. PAT JENNINGS Clerk.
IN THE SENATE OF THE UNITED STATES November 7, 1973
The Senate having proceeded to reconsider the joint resolution (H. J. Res. 542) entitled "Joint resolution concerning the war powers of Congress and the President", returned by the President of the United States with his objections to the House of Representatives, in which it originate, it was Resolved, That the said joint resolution pass, two-thirds of the Senators present having voted in the affirmative.
Attest: FRANCIS R. VALEO Secretary.
Back to Top
NOTICE
OF
NATIONAL EMERGENCY
In Reg: U.S. Senate Report No. 93-549 dated 11/19/73
(73 CIS Serial Set S963-2 607 Pages)The United States went "Bankrupt" in 1933 and was declared so by President Roosevelt by Executive Orders 6073, 6102, 6111 and Executive Order 6260, (See: Senate Report 93-549, Pgs. 187 & 594) under the "Trading With The Enemy Act" (Sixty-Fifth Congress, Sess. I, Chs. 105, 106, October 6, 1917), and as codified at 12 U.S.C.A. 95a. The several States of the Union then pledged the faith and credit thereof to the aid of the National Government, and formed numerous socialist committees, such as the "Council of State Governments", "Social Security Administration", etc., to purportedly deal with the economic "Emergency." These Organizations operated under the "Declaration Of INTERdependence" of January 22, 1937 and published some of their activities in "The Book of the States." The 1937 Edition of the "Book of the States" openly declared that the people engaged in such activities as the Farming/Husbandry Industry had been reduced to mere feudal "Tenants" on their Land (Book Of The States, [1937], pg. 155). This of course was compounded by such activities as price fixing Wheat and Grains (7 U.S.C.A. 1332), quota regulations (7 U.S.C.A. 1371), and livestock products (7 U.S.C.A. 1903), which have been consistently below the costs of production, interest on loans and inflation of the paper "Bills of Credit", leaving the food producers and others in a state of peonage and involuntary servitude, constituting the taking of private property, for the benefit and use of others - without just compensation.
The United States thereafter entered the second World War during which time the "League of Nations" was reinstituted under pretense of the "United Nations" and the "Bretton Woods Agreement" (See: 60 Stat. 1401). The United States, as a corporate body politic (artificial), came out of World War II in worse economic shape than when it entered, and in 1950 declared "Bankruptcy" and "Reorganization." The Reorganization is located in Title 5 of the United States Code Annotated. The "Explanation" at the beginning of 5 U.S.C.A. is most informative reading. The "Secretary of Treasury" was appointed as the "Receiver" in Bankruptcy (See: Reorganization Plan No. 26 5 U.S.C.A. 903, Public Law 94-564, the Legislative History thereof at pg. 5967). The United States went down the road and periodically filed for further Reorganization. Things and situations worsened, having done what they were Commanded NOT to do (See: Madison's Notes, Constitutional Convention, August 16, 1787; Federalist Papers No. 44), and in 1965 the Congress passed the "Coinage Act of 1965" completely debasing the Constitutional gold and silver Coin (See: 18 U.S.C.A. 331, 332; U.S. v. Marigold, 50 US 560, 13 L.Ed. 257). At the signing of the Coinage Act on July 23, 1965; Lyndon B. Johnson stated in his Press Release that:
It is important to take cognizance of the fact that NO Constitutional Amendment was ever obtained to FUNDAMENTALLY CHANGE, amend, abridge or abolish the Constitutional mandates, provisions or prohibitions, but due to internal and external diversions surrounding the Viet Nam War, etc.; the usurpation and breach went basically unchallenged and unnoticed by the general public at large, who became "a wealthy man's cannon fodder or cheap source of slave labor" (See: Silent Weapons For Quiet Wars, TM-SW7905.1, Pgs. 6-9, 12, 13, & 56). Congress was clearly delegated the Power and Authority to regulate and maintain the true and inherent "value" of the Coin within the scope and purview of Article I, Section 8, Clauses 5 & 6 and Article I, Section 10, Clause 1 of the ordained (1787) Constitution, and further, under a corresponding duty and obligation to maintain said gold and silver Coin and Foreign Coin at and within the necessary and proper "equal weights and measures" clause (See also: Holy Bible; Deuteronomy 25:13-16; Public Law 97-289; 96 Stat. 1211).
Those exercising the Offices of the several States, in equal measure, knew such "De Facto Transitions" were unlawful and unauthorized, but sanctioned, implemented and enforced the complete debauch and the resulting "governmental, social, industrial economic change" in the "De Jure" States and in the United States of America (See: Public Law 94-564, Legislative History thereof, pg. 5936, 5945; 31 U.S.C.A. 314, 321, 5112; C.R.S. [Colorado Revised Statutes] 11-61-101; C.R.S. 39-22-103.5; and C.R.S. 18-11-203), and were and are now under the delusion that they can do both directly and indirectly what were absolutely prohibited from doing (See also: Federalist Papers No. 44; Craig v. Missouri, 4 Peters 903).
In 1966, Congress being severally compromised, passed the "Federal Tax Lien Act of 1966", by which the entire taxing and monetary system i.e. "Essential Engine" (See: Federalist Papers No. 31) was placed under the Uniform Commercial Code (See: Public Law 89-719; and the Legislative History thereof, pg. 3722; also see: C.R.S. 5-1-106). The Uniform Commercial Code was, of course, promulgated by the "National Conference of Commissioners On Uniform State Laws" in collusion with the "American Law Institute" for the "banking and business interests" (See: "Handbook Of The National Conference Of Commissioners On Uniform State Laws" (1966 ed.) pgs. 152-153). The United States being engaged in numerous U.N. conflicts including the Korean and the Viet Nam wars of which were under the direction of the United Nations (See: 22 U.S.C.A. 287d), and agreeing to foot the bill (See: 22 U.S.C.A. 287j), and not being able to honor their obligations and hypothecated debt credit; openly and publicly dishonored and disavowed their "Notes" and "obligations" (12 U.S.C.A. 411) i.e. "Federal Reserve Notes" through Public Law 90-269, section 2; 82 Stat. 50 to wit:
Things steadily grew worse and on March 28, 1970; President Nixon issued Proclamation No. 3972 declaring an "emergency" because the Postal Employees struck against the de facto government (?) for higher pay, due to inflation of the paper "Bills of Credit" (See: Senate Report No. 93-549, pg. 596). President Nixon placed the U.S. Postal Department under control of the "Department of Defense" (See: Department Of The Army Field Manual, FM 41-10 (1969 ed.)).
NOTE: The System had been faltering for a decade, but the bench
mark date of the collapse is put at August 15, 1971. On this day,
President Nixon reversed the U.S. International Monetary Policy by
officially declaring the non-convertibility of the U.S. Dollar [F.R.N.]
into Gold.
See also:
Public Law 94-564, the Legislative History thereof at pg. 5937; Senate
Report No. 93-549, the "Forward" at pg. III; Presidential Proclamation No.
4074, at page 597; 31 U.S.C.A. 314, 5112
On September 21, 1973; the Congress passed Public Law 93-110, amending the "Bretton Woods Par Value Modification Act" (82 Stat. 116; 31 U.S.C.A. 449) and reiterated the "Emergency" (12 U.S.C.A. 94a; and section 8 of the "Bretton Woods Agreements Act" of 1945 [22 U.S.C.A. 286f]), which included "reports on foreign currency transactions" (See also: Executive Order No. 10033). This "Act" further declared in Section 2(b) that: "No provision of any law in effect on the date of enactment of this Act, and no rule, regulation, or order under authority of any such law, may be construed to prohibit any person from purchasing, holding, selling, or otherwise dealing with gold."
On January 19, 1976; Marjorie S. Holt noted for the record, a second "Declaration Of INTERdependence" and clearly identified the United Nations as a "Communist" organization, and that they were seeking both production and monetary control over the Union and People through International Organization promoting the "New World Order" (See: 8 U.S.C.A. 1101(40); see also: 50 U.S.C.A. 781, 783).
The social/economic situation worsened as noted in the
Complaint/Petition filed in the U.S. Court of Claims under
docket No. 41-76 on February 11, 1976 by 44 Federal Judges, (Atkins
et.al. v. U.S.). Atkins et.al. complained that: "As a result of
inflation, the compensation of federal judges has been substantially
diminished each year since 1969, causing direct and continuing monetary
harm to plaintiffs ... the real value of the dollar decreased by
approximately 34.5 percent from March 15, 1969 to October 1, 1975 ... . As
a result, plaintiffs have suffered an unconstitutional deprivation of
earnings"
and in the prayer for relief claimed:
"damages for the constitutional violations enumerated above, measured as
the diminution of his earnings for the entire period since March 9, 1969."
It is quite apparent that the persons holding and enjoying Offices of Public Trust, Honor, and/or Profit knew of the emergency emergent problem and sought protection for themselves, to the damage and injury of the People and Children, who were classified as "a club that has many other members" who "have no remedy." And knowing that "heinous" acts had been committed, stated that they [judges/lawyers] would not apply the Law, nor would any substantive remedy be applied ("checked" more or less, but never stopped) "until all of us [judges] are dead." Such persons "Fraudulently" swore on "Oath" to uphold, defend, and preserve the sovereignty of the Nation and several Republican States of the Union, and breached the Duty to protect the People/Citizens and their "Posterity" from fraud, imposition, avarice, and stealthy encroachment (See: Atkins et. al. v. U.S., 556 F2d 1028 @ 1072, 1074; The Tempting Of America (supra.) pgs. 155-159; also see: 5 U.S.C.A. 5305, 5335; Senate Report No. 93-549, pgs. 69-71; C.R.S. 24-75-101). This is verified in Public Law 94-564, and the Legislative History thereof at page 5944 which states: "Moving to a floating exchange rate for international commerce means private enterprise and not central governments bear the risk of currency fluctuations."
Numerous serious debates were held in Congress, including but not limited to, Tuesday, July 27, 1976 (See: Congressional Record - House, July 27, 1976), concerning the International Financial Institutions and its operations. Representative, Ron Paul, Chairman of the House Banking Committee, made numerous references to the true practices of the "International" financial institutions including, but not limited to, the conversion of $27,000,000 (27 million) in gold, contributed by the United States as part of its "quota obligations," which the International Monetary Fund (Governor-Secretary of Treasury) sold (See: Public Law 94-564, the Legislative History thereof at pages 5945 & 5946), under some very questionable terms and concessions (See also: "The Ron Paul Money Book," (1991), by Ron Paul, Plantation Publishing, 837 W. Plantation, Clute, Texas 77531).
On October 28, 1977; the passage of Public Law 95-147, (91 Stat. 1227) declared most banking institutions, including State banks, to be under direction and control of the corporate "Governor" of the "International Monetary Fund" (See: Public Law 94-564, the Legislative History thereof at page 5942; United States Manual 1990/91, pgs. 480-481). The Act further declared that:
"(2) Section 10(a) of the Gold Reserve Act of 1934 (31 U.S.C. 822a(b))
is amended by striking out the phrase `stabilizing the exchange value of
the dollar' ..."
"(c) The joint resolution entitled `Joint resolution to assure uniform
value to the coins and currencies of the United States', approved June 5,
1933 (31 U.S.C. 463) shall not apply to obligations issued on or after the
date of enactment of this section."
The United States, as Corporator, (22 U.S.C.A. 286e, et. seq.) and "State" (C.R.S. 24-36-104, C.R.S. 24-60-1301(h)) had declared "Insolvency" (See: 26 I.R.C. 165(g)(1); U.C.C. 1-201(23); C.R.S. 39-22-103.5; Westfall v. Braley, 10 Ohio 188; 75 Am.Dec. 509; Adams v. Richardson, 337 S.W.2d 911; Ward v. Smith, 7 Wall. 447). A permanent state of "Emergency" was instituted, formed and erected within the Union through the contrivances, fraud, and avarice of the International Financial Institutions, Organizations, Corporations, and Associations, including the Federal Reserve; their "fiscal and depository agent" (22 U.S.C.A. 286d). This has led to such "Emergency" legislation as the "Public Debt Limit-Balance Budget And Emergency Deficit Control Act of 1985" (Public Law 99-177) etc..
The government, by becoming a corporator, (See: 22 U.S.C.A. 286e) lays down its sovereignty and takes on the status that of a private citizen. It can exercise no power which is not derived from the corporate charter (See: The Bank of the United States v. Planters Bank of Georgia, 6 L.Ed. ( Wheat) 244; U.S. v. Burr, 309 US 242). The real party in interest is not the de jure "United States of America" or "State;" but "The Bank" and "The Fund" (22 U.S.C.A. 286, et. seq., C.R.S. 11-60-103). The acts committed under fraud, force, and seizures are many times done under "Letters of Marque and Reprisal" i.e. "recapture" (See: 31 U.S.C.A. 5323). Such principles as: "Fraud and Justice never dwell together" (Wingate's Maxims 680) and: "A right of action cannot arise out of fraud" (Broom's Maxims 297, 729; Cowper's Reports 343; 5 Scott's New Reports 558; 10 Mass. 276; 38 Fed. 800) are to high of a thought concept, as is "Due Process," "Just Compensation," and "Justice" itself. "Honor" is earned by honesty and integrity, not under false and fraudulent pretenses, nor will the color of the cloth one wears cover-up the usurpations, lies, trickery, and deceits. When "Black" is fraudulently declared to be "White;" not all will live in darkness. As astutely observed by Will Rogers: "There are men running governments who shouldn't be allowed to play with matches" and it is as applicable today as Jesus' statements about Lawyers and Judges.
The contrived "emergency" has created numerous abuses and usurpations, and abridgments of delegated Powers and Authority. As stated in Senate Report 93-549:
"These proclamations give force to 470 provisions of Federal law. These
hundreds of statutes delegate to the President extraordinary powers,
ordinarily exercised by the Congress in a host of all-encompassing
manners. This vast range of powers, taken together, confer enough
authority to rule the country without reference to normal constitutional
process.
"Under the powers delegated by these statutes, the President may: seize
property; organize and control the means of production; seize commodities;
assign military forces abroad; institute martial law; seize and control
all transportation and communication; regulate the operation of private
enterprise; restrict travel; and in a plethora of particular ways, control
the lives of all American citizens." (See also: "Forward" at pg. III)
The "Introduction," on page 1, begins with a phenomenal
declaration, to wit:"A majority of the people of the United States have
lived all of their lives under emergency rule. For 40 years, freedoms and
governmental procedures guaranteed by the Constitution have in varying
degrees been abridged by laws brought into force by states of national
emergency ..."
According to the research done in 16 Am.Jur.2d 71, 82; no "emergency" justifies a violation of any constitutional provision. Argumentum: "Supremacy Clause" and "Separation of Powers," it is clearly admitted in Senate Report No. 93-549 that abridgment has occurred. The statements heard in the Federal and State Tribunals, on numerous occasions, that Constitutional arguments are "immaterial," "frivolous," etc., is based upon the concealment, furtherance and compounding of the Frauds and "Emergency" created and sustained by the "Expatriated," ALIENS of the United Nations and its Organizations, Corporations, and Associations (See: Letter, "Insight Magazine," February 18, 1991, pg. 7, Lowell L. Flanders, President, U.N. Staff Union, New York). U.S. Code Title 8, Section 1481 is one of the controlling statutes on expatriation as is 22 U.S.C.A. 611, 612 & 613 and 50 U.S.C.A. 781.
The Internal Revenue Service entered into a "service agreement" with the U.S. Treasury Department (See: Public Law 94-564, the Legislative History there of at pg. 5967; Reorganization Plan No. 26) and the "Agency For International Development" pursuant to Treasury Delegation Order No. 91. The "Agency For International Development" is an international paramilitary operation (See: Department Of The Army Field Manual, FM 41-10, (1969) pgs. 1-4, Sec. 1-7(b), 1-6, 1-10(7)(c)(1); 22 U.S.C.A. 284) and includes such activities as "Assumption of full or partial executive, legislative, and judicial authority over a country or area" (See: FM 41-10, pg. 1-7, Section 110(7)(c)(4)); see also: "Agreement Between The United Nations And The United States Of America Regarding The Headquarters Of The United Nations," Sections 7(d), (8); 22 U.S.C.A. 287 (1979 ed) at pg. 241). It is to be further observed that the "Agreement" regarding the "Headquarters District of the United Nations" was NOT agreed to (See: Congressional Record - Senate, December 13, 1967, Mr. Thurmond) and is illegally within the Country in the first instant. The Internal Revenue Service Agreement (Treasury Delegation Order No. 91) may be found at the: U.S. Department of Treasury, Office of the Assistant General Counsel (International Affairs), 1500 Pennsylvania Ave., N.W., Washington, D.C. 20220.
The International Organizational intents, purposes and activities include complete control of "Public Finance" i.e. "control, supervision, and audit of indigenous fiscal resources; budget practices, taxation, expenditures of public funds, currency issues, and banking agencies and affiliates" (See: FM 41-10, pgs. 2-10 thru 2-31, Section 251, Public Finance). This, of course, complies with "Silent Weapons For Quiet Wars" (Research Technical Manual TM-SW7905.1) which discloses a declaration of war upon the American people (See: pgs. 3 & 7), monetary control by the Internationalist, through information etc., solicited and collected by the Internal Revenue Service (See: TM-SW7905.1, pg. 48, also see: 22 U.S.C.A. 286f & Executive Order No. 10033; 26 U.S.C.A. 6103(k)(4)) and who is operating and enforcing the seditious International program (See: TM-SW7905.1, pg. 52). The 1985 Edition of the Department Of Army Field Manual, FM 41-10 further describes the International "Civil Affairs" operations. At page 3-6 it is admitted that the A.I.D. is autonomous and under direction of the "International Development Cooperation Agency," and at page 3-8 that the operation is "paramilitary." The International Organizations(s) intents and purposes was to promote, implement, and enforce a "DICTATORSHIP OVER FINANCE IN THE UNITED STATES" (See: Senate Report No. 93-549, pg. 186).
It appears from the documentary evidence that the Agents of the Internal Revenue Service, etc., are "Agents of a Foreign Principal" within the meaning and intent of the "Foreign Agents Registration Act of 1938." They are directed and controlled by the corporate "Governor" of "The Fund" a/k/a "Secretary of Treasury" (See: Public Law 94-564, supra., pg. 5942; U.S. Government Manual 1990/91, pgs. 480 & 481; 26 U.S.C.A. 7761(a)(11); Treasury Delegation Order No. 150-10), and the corporate "Governor" of "The bank" (22 U.S.C.A. 286, 286a) acting as "information-service employees" (22 U.S.C.A. 611(c)(ii)) have been and does now solicit, collect, disburse or dispense contribution (Tax-pecuniary contribution, Blacks Law Dict. 5th ed.), loans, money, or other things of value for or in interest of such foreign principal (22 U.S.C.A. 611(c)(iii)), and they have entered into agreements with a "Foreign Principal" pursuant to Treasury Delegation Order No. 91 i.e. the "Agency For International Development" (See: 22 U.S.C.A. 611(c)(2)). The Internal Revenue Service is also an agency of the "International Criminal Police Organization" and solicits and collects information for 150 Foreign Powers (See: 22 U.S.C.A. 263a; The United States Government Manual, 1990/91, pg. 385; See also: "The Ron Paul Money Book", pgs. 250-251). It should be further noted that Congress has appropriated, transferred, and converted vast sums to Foreign Powers (See: 22 U.S.C.A. 262c(b)) and has entered into numerous Foreign Taxing Treaties (conventions) (See: 22 U.S.C.A. 285g, 287j) and other Agreements, which are solicited and collected pursuant to 26 U.S.C.A. 6103(k)(4). Along with the other documentary evidence submitted herein, this should absolve any further doubt as to the true character of the party. Such restrictions as: "For the general welfare and common defense of the United States" (See: U.S. Const., (1787), I:8:1) apparently aren't applicable, and the fraudulent hypothecated debt credit will be merely added to the insolvent nature of the continual "emergency", and the reciprocal social/economic repercussions laid upon present and future generations.
Among other reasons for lack of authority to act, such as a "Foreign Agents Registration Statement" (22 U.S.C.A. 612; 18 U.S.C.A. 219, 951), military authority cannot be imposed into civil affairs (See: Department Of The Army Pamphlet 27100-70; Military Law Review, Vol. 70). The United Nations Charter (Article 2, Section 7) further prohibits the U.N. from: "intervening in matters which are essentially within the domestic jurisdiction of any state ...". Korea, Viet Nam, Ethiopia, Angola, Kuwait, etc., are evidence enough of the "BAD FAITH" of the United Nations and its Organizations, Corporations, and Associations, not to mention the seizing of two day care centers in the State of Minnesota by their agents, and holding the children as collateral/hostages for payment/ransom of their fraudulent, dishonored, hypothecated debt credit and worthless securities. Such is the "Rule Of Law" (as envisioned by the Founders) of the United Nations. Such is Communist terrorism, despotism, and tyranny. ALL WERE AND ARE OUTLAWED HERE IN THE UNITED STATES OF AMERICA.
It is quite apparent that the "Treasonous" and "Seditious" are brewing up a storm of untold magnitude. President Bush's public address of September 11, 1991 (See: Weekly Compilation Of Presidential Documents) should further qualify what is being said here. He admitted "INTERdependence" (See also: Public Law 94-564, the Legislative History thereof at page 5950), "New World Order" (See also: Extension Of Remarks, January 19, 1976, Marjorie S. Holt; 8 U.S.C.A. 1101(40)), affiliation and collusion with the Soviet Union Oligarchy (50 U.S.C.A. 781), direction by the U.N. (22 U.S.C.A. 611) etc.. You might also find it interesting that Treasury Delegation Order No. 92 states that the I.R.S. is trained under direction of the Division of "Human Resources" (U.N.) and the Commissioner (INTERNATIONAL) by the "Office Of Personnel Management." In the 1979 Edition of 22 U.S.C.A. 287 ("The United Nations" at page 248); you will find Executive Order No. 10422. The "Office of Personnel Management" is under direction of the Secretary General of the United Nations. And as stated previously; the I.R.S. is also a member of a one hundred fifty (150) Nation pact called the "International Criminal Police Organization" (22 U.S.C.A. 263a). The "Memorandum & Agreement" between the Secretary of Treasury/Corporate Governor of "The Fund" and "The Bank" and the "Office of the U.S. Attorney General" would indicate that the Attorney General and his associates are soliciting and collecting information for "Foreign Principals" (See also: The United States government Manual, (1990/91), pg. 385; also see: The Ron Paul Money Book, (supra.), pg. 250, 251).
It is worthy of note that an Attorney/Representative is required to file a "Foreign Agents Registration Statement" pursuant to 22 U.S.C.A. 611(c)(1)(iv), 612, if representing the interests of a "Foreign Principal" or Power (See: 22 U.S.C.A. 613; Rabinowitz v. Kennedy, 376 US 605, 11 L.Ed.2d 940; 18 U.S.C.A. 219, 951).
On January 17, 1980; the President and the Senate confirmed another "Constitution", namely, the "Constitution Of The United Nations Industrial Development Organization", found at Senate, Treaty Document No. 97-19, 97th Congress, 1st Session. A perusal of this "Foreign Constitution" should more than qualify the internationalist intents. The "Preamble;" Article 1 ("Objectives"), and Article 2 ("Functions"), clearly evidences their intent to direct, control, finance, and subsidize all "natural and human resources" and "agro-related as well as basic industries," through "dynamic social and economic changes" "with a view to assisting in the establishment of a new international economic order." The high flown rhetoric is obviously of "Communist" origin and intents. An unelected, unrepresentative, unaccountable oligarchy of expatriates and aliens who fraudulently claim in the "Preamble" that they intend to establish "rational and equitable international economic relations", yet they openly declared that they no longer "stabilize the value of the dollar" nor "assure the value of the coin and currency of the United States." This is purely misrepresentation, deceit, and fraud (See: Public Law 95-147, 91 Stat. 1227, at pg. 1229). This was augmented by Public Law 101-167, 103 Stat. 1195, which discloses massive appropriations of hypothecated debt credit for the general welfare and common defense of other Foreign Powers, including "Communist" countries or satellites, International control of natural and human resources, etc.. A "Resource" is a claim of "property" and when related to people constitutes "slavery."
It is now necessary to ask which Constitution they are operating under. The "Constitution For The Newstates Of The United States," which was locates at Liberty Lobby, 100 Independence Ave., S.E., Washington, D.C. 20003; was the subject matter of the book entitled: "The Emerging Constitution" by Rexford G. Tugwell, which was accomplished under the auspices of the Rockefeller tax-exempt foundation called the "Center For The Study Of Democratic Institutions." The People and Citizens of this Nation were forewarned against formation of "Democracies." "Democracies have ever been the spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths." [The Federalist Papers No. 10; The Law (Fredrick Bastiat); Code Of Professional Responsibility (Preamble)]
This Alien Constitution, however, has nothing to do with democracy in
reality. It is the basis of and for a despotic, tyrannical oligarchy. At
Article I ("Rights and Responsibilities"); Section 1
and 15 admits to the "emergency." The Rights of expression,
communication, movement, assembly, petition and Habeas Corpus are all
excepted from being exercised under and in a "declared emergency."
The "Constitution for the Newstates of America" openly
declares, among other seditious things and delusions that: "Until each
indicated change in the government shall have been completed, the
provisions of the existing Constitution (U.S. Constitution) and the organs
of government shall be in effect." [The Constitution of the New
States, Article XII,
Section 4].
This is apparently what Burger was promoting in 1976, after he resigned as Supreme Court Justice and took up the promotion of being a member of the "Constitutional Convention." No trial by jury is mentioned, "JUST" Compensation has been removed, along with being informed of the "Nature & Cause of the Accusation," etc., and every one will, of course, participate in the "democracy." This Constitution is but a reiteration of the Communist Doctrines, intents and purposes, and clearly establishes a "Police Power" State, under direction and control of a self appointed oligarchy.
Apparently the present operation of the "de facto" government is under Foreign/Alien Constitutions, Laws, Rules, and Regulations. The overthrow of the "essential engine" declared in and by the ordained and established Constitution for the United States of America (1787), and by and under the "Bill of Rights" (1791) is obvious. The covert procedure used to implement and enforce these Foreign Constitutions, Laws, Procedures, Rules, Regulations, etc., has not, to our knowledge, been collected and assimilated nor presented as evidence to establish seditious collusion and conspiracy.
Fortunately and Unfortunately; it is necessary to seek, obtain, and present EVIDENCE to sustain a convection and/or judgment. Our patience and tolerance for those who pervert the very necessary and basic foundations of society has been pushed to insufferable levels. They have "fundamentally" changed the form and substance of the "de jure" Republican form of Government, exhibited a willful and wanton disregard for the Rights, Safety, and Property of others, evinced a despotic design to reduce the People to slavery, peonage and involuntary servitude, under a fraudulent, tyrannical, seditious foreign oligarchy, with intent and purpose to institute, erect and form a "Dictatorship" over the Inhabitants and our Posterity. They have completely debauched the de jure monetary system, destroyed the livelihood and lives of thousands, aided and abetted our enemies, turned Sodomites lose amongst our young. They have implemented foreign laws, rules, regulations, and procedures within the body of the Country, incited insurrection, rebellion, sedition, and anarchy within the de jure society. The have illegally entered onto our land, taken false Oaths, entered into seditious Foreign Constitutions, Agreements, Pacts, Confederations, and Alliances, and under pretense of "emergency," which they themselves have created, promoted and furthered; formed a multitude of offices and retained those of Alien Allegiance to perpetuate their frauds and to eat out the substance of the good and productive People of our land. They have arbitrarily dismissed and held mock trials for those who trespassed upon our lives, Liberties, Properties, and Families and endangered our Peace, Safety, Welfare, and Dignity. The damage, injury, and costs to our Rights, Liberties, and Posterity have been higher than mere money can repay. They have done what they were COMMANDED NOT TO DO. The time for just correction is NOW!
How and Why the Federal Government Legislates Outside the Constitutional Limitations.
United States Constitution
Article 1, Section 8, Clause 17
"To exercise exclusive Legislation in all cases whatsoever, over such district (not exceeding ten miles square) as may, by cession of particular States, and the acceptance of Congress, become the seat of the government of the United States, and to exercise like authority over all places purchased by the consent of the Legislature of the State in which the same shall be, for the erection of forts, magazines, arsenals, dock-yards, and other needful buildings;"
- and -
United States Constitution
Article 4, Section 3, Clause 2
" The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States; and nothing in this Constitution shall be so construed as to prejudice any claims of the United States, or of any particular State." These two clauses authorize Congress to make all needful and necessary legislation in respect to non-state territories. These territories include the District Columbia (not exceeding 10 by 10 miles), U.S. Virgin Islands, Guam, American Samoa, Northern Mariana Islands, Puerto Rico and the Trust Territory of the Pacific Islands. These geographic lands belong to the exclusive jurisdiction of the U.S. government and are controlled by such and under no obligation or limitations to the Constitution, as long as the legislation does not "prejudice any claims of the United States, or of any particular states." Why such an extreme authority? James Madison, in the Federalist Papers puts it this way.
"The indispensable necessity of complete authority at the seat of government, carries its own evidence with it. It is a power exercised by every legislature of the Union, I might say of the world, by virtue of its general supremacy. Without it, not only the public authority might be insulted and its proceedings interrupted with impunity; but a dependence of the members of the general government on the State comprehending the seat of the government, for protection in the exercise of their duty, might bring on the national councils an imputation of awe or influence, equally dishonorable to the government and dissatisfactory to the other members of the Confederacy."
In brief, Hamilton is saying that the territory of the U.S. government requires the same powers as of any State in order to be recognized accordingly as a national government.
We now need to keep in mind that the U.S. government passes legislation in observance of making all needful rules and regulations for its territorial jurisdiction.
This legislation is "exclusive" to its jurisdiction, the same as a State’s legislation is for regulating within its territorial jurisdiction.
So why doesn’t all legislation pertain to me, in one of the States?
Under the Constitution, the Federal government has some limited powers over the states; those powers granted to it by the States and the Constitution.
These limited powers are listed in Article 1, Section 8 of the U.S. Constitution.
"The Congress shall have power
1.) To lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
2,) To borrow money on the credit of the United States;
If legislation coming from Congress is to have force and affect of law within the States, the legislation must be specific and specify the intent, otherwise, the legislation is made pursuant to making all needful rules and regulations for within its territorial jurisdiction.
Congress has long forgotten about this requirement to specify which laws apply to the States and which apply only to federal territory.
In the late 1800’s, school books taught that every American should automatically know which federal laws apply to them and which don’t because every American should know the Constitution.
Failure to know which laws apply to them as Citizens of the States and those that only apply to Territorial citizens would result in the unfortunate situation of unconstitutional laws being enforced onto them.
The sad truth is that this warning taught to school children a hundred years ago, is an every day fact of life today.
In the early 1990’s, Congress attempted to pass legislation making it law for all Congressional legislation to specify the Constitutional Intent of each law. Such legislation never passed. The thought of Americans realizing that Federal controls on Citizens of and within the States was unconstitutional, was too much for Congress to deal with.
In Foley Brothers, Inc V. Filardo, the Court said,
"It is a well established principle of law that all federal legislation applies only within the territorial jurisdiction of the United States unless a contrary intent appears."
Again, the territorial jurisdiction of the United States is defined as property owned by the United States, not the States themselves.
This is further clarified in Hooven v. Evatt in which the Court said, "In exercising its constitutional power to make all needful regulations respecting territory belonging to the United States, Congress...is not subject to the same constitutional limitations as when legislating for the United States"
Also, in Hooven v. Evatt, the Court puts to rest the definition of "United States", and the Court listed 3 definitions:
1. It may be merely the name of a sovereign occupying the position analogous to that of other sovereigns in the family of nations.
2. It may designate the territory over which the sovereignty of the United States extends, or
3. It may be the collective names of the states which are united by and under the Constitution.
When legislating for definition number 2, congress is making all needful rules and regulations outside the limitations of Article 1 Section 8 of the U.S. Constitution.
When legislating for definition number 3, Congress is bound to the limitations of Article 1, Section 8 and such legislation must be specific as to it’s intend of applying to the states.
It is necessary for Americans to know the distinction of the two types of legislation and which applies to them.
It is also important that the Courts and Congress know the distinction and keep the distinction alive. In Downes vs Bidwell, Supreme Court justice, Jon Harlan, forewarned of such a disaster in which the distinction disappears.
"The idea prevails with some, indeed it has found expression in arguments at the bar, the we have in this country substantially two national governments; one to be maintained under the Constitution, with all of its restrictions; the other to be maintained by Congress outside and independently of that instrument, by exercising such powers as other nations of the earth are accustomed to...I take leave to say that, if the principles thus announced should ever receive sanction of a majority of this court, a radical and mischievous change in our system of government will result. We will, in that event, pass from the era of constitutional liberty guarded and protected by a written constitution into an era of legislative absolutism.... It will be an evil day for American Liberty if the theory of a government outside the Supreme Law of the Land finds lodgment in our Constitutional Jurisprudence. No higher duty rests upon this court to exert its full authority to prevent all violation of the principles of the Constitution."
Copyright, American Patriot Network 1995-97
Hi,
Someone sent me a copy of your "Focus on the FED" from the Mises Institute. Attached is some FED information from "The Center for Constitutional Studies" that you might find interesting.
Byron
The following 3 articles were written by W. Cleon Skousen. Each article is from a separate report. The reports are copyright protected and published by The Freemen Institute of Salt Lake Utah in 1980.
(18 March 1995. The Freeman Institute is now known as National Center For Constitutional Studies. The mail address is P.O. Box 841, West Jordan, Utah 84084 (1-800-388-4512).)
(This is an optical scan. Errors were corrected as found, other errors might exist.)
What Every American Should Know About The Federal Reserve System Recently the popular TV show, "Little House on the Prairie," portrayed a sharp, avaricious neighbor of the Ingalls family pulling a raw business deal on a young man who wanted to get a small farm going so he could marry Laura.
The land had a small stream originating on the seller's farm. After the young man had made a down payment and worked hard all spring to put in a good crop, the seller cut off the stream of water which not only threatened the growing crop but made the farm useless. The seller then offered to buy the land back for a mere $100 including the crop. When Mr. ingalls challenged this conniving neighbor for pulling such a crooked deal on a trusting young man, the shrewd neighbor replied, "Well, that's business!"
The audience enjoyed the satisfaction of seeing Mr. Ingalls wind up and deliver a fistful of righteous indignation directly to the sneaky neighbor's jutting jaw.
The point is that sometimes strange things are done in the name of "business."
Cheating and Robbing in the Name of "Business"
Robbery is defined as taking property from another by threat, force or violence. When this is done by a hi-jacker or mugger it is counted a felon ious crime with heavy penalties. When it is done by manipulating circumstances within the technicalities of the law, some people call it "business " Of course, it is not business in any ethical sense because legitimate business described by Adam Smith is a transaction where both parties feel they have improved their position. Business which amounts to "legal" robbery is really a very dirty business. This happens whenever a person with a technical advantage "legally" robs another under threat of using the force of the courts to support his "rights" in carrying out a deal. We mention this simply because this has been the tragic and unfortunate history of the privately-owned "central" banking business during the past four hundred years. That is what this article is about.
Different Kinds of Banks
Banks ordinarily represent depositories for the savings of the people.
This accumulated capital then becomes available for loans to buy farms, build homes, construct factories and do a multitude of other things which are indispensable to a prosperous industrial society. Banks, therefore, are extremely important and represent the major source of investment capital needed to promote the growth of a nation and provide millions of new jobs for our ever-increasing population.
But then there is a different kind of bank, a sort of super-bank, which represents far larger deposits of accumulated wealth. This type of bank is often referred to as the "central" bank of a particular country. Even though each bank of this type is privately owned, it often carries the name of the country it serves because the government of that country uses it as the depository for government funds and borrows from it in times of emergency. This privately-owned central bank therefore becomes the manager of money and credit for the entire country. It handles major investments in agriculture, industry, homes, and factories. It also provides the funds in time of war for the armaments of the nation. The money managers of central banks are in a very powerful position to manipulate the affairs of a country for good or for ill.
Central Banks Suffer from Two Temptations
The record shows that when the managers of a central bank in any particular country are looking around for ways and means to accumulate more wealth, they are often tempted by two things which are inherently evil and totally destructive to the foundation of civilized countries. One is to encourage an involvement in war so the nation will be forced to borrow heavily. Bonds (which are really government IOU's paying substantial interest) are considered to be a most valuable form of collateral assets in a central bank.
The other temptation is to promote a cycle of "boom and bust" economics. This simply consists of starting a boom with generous loans at low interest and after a few years suddenly raising the interest rates, calling in loans, and bankrupting home-owners, industries, farmers and millions of people who had trusted the bank to continue its policies.
Some economists, including Karl Marx, have tried to maintain that these boom and bust cycles are an inescapable characteristic of a free-market economy. The truth of the matter is that these so-called boom and bust cycles are primarily a phenomenon of manipulated economics, engineered by men who find themselves in an extremely powerful position to control money and credit but seem to lack the moral integrity to resist the opportunity to fleece the common people who have genuinely trusted them.
We mention these problems right here at the beginning of our discussion because any study of central banking will disclose the highly visible profile of these two pernicious problems with which central banking has been continually involved. Wealthy money managers seem to have a strong proclivity toward both war-mongering and the manipulating of the economy in cycles of boom and bust. Having personally passed through several of these wars and cycles of boom and bust, this writer has been constantly on the lookout for any trends which might signify a repeat performance of this abusive use of power.
The Latest Banking Invention-Making Money Out of Nothing
In addition to the above, we have to mention one other problem which the central banks have invented to plague mankind. This consists of "making money out of nothing." This incredible device was invented almost by accident. Here is the story.
Several hundred years ago the goldsmiths of Europe were under the necessity of building substantial vaults for their precious metals. As one might have expected, it wasn't long before many others asked to leave their gold in these vaults for safekeeping. The goldsmiths consented and gave each depositor a certificate which could be used to reclaim their precious metal at any time. These certificates were therefore considered "as good as gold" and soon circulated in business channels as though they were gold. .
In fact, they were so much more convenient to handle than gold that very few depositors ever went back to the goldsmiths' except to make more deposits.
In very short order it became entirely apparent to the goldsmiths that since only a small percentage of the depositors came back for their gold, the goldsmiths only had to keep enough on hand as a "reserve" to satisfy those who did come back. Realizing this, the goldsmiths decided they could safely issue considerably more gold certificates than the amount of gold "on deposit." By this set of fortuitous circumstances they had discovered how a shrewd goldsmith could issue certificates on gold he didn't have and thus become super-rich by "making money out of nothing." Furthermore , these spurious certificates could be used to buy up all kinds of tangible property or they could be loaned out on interest. Here indeed was the royal road to wealth.
The Problem of a "Run on the Bank"
Of course, it was important to keep a good "reserve" for those who did want to cash in their certificates, but this ordinarily involved only a fraction of the certificates in circulation.
Thus "fractional banking" was born.
It turned out, however, that once in awhile people would become suspicious that perhaps the goldsmith-banker didn't really have as much gold as he claimed. Then there would be a rush to cash in the certificates and get the available gold before it ran out. This is called a "run on the bank. "
On such occasions the goldsmith-bankers usually tried to allay the fears of those who first demanded their gold by promptly hauling out the precious metal and redeeming the certificates. However, if the "run" continued they would not be able to keep up the pretense for long since the bank would run out of gold. When this happened the only alternative was to "close their doors" in disgrace and go out of business.
Can You Sell a Horse Four Times in a Row?
What the goldsmith-bankers were doing might be compared to a farmer who had a fine saddle horse in his corral.
Along came a city dude who asked to buy the horse but wanted to have the farmer take care of him. The farmer agreed. Later the farmer noticed that the new owner never rode the horse except in the early morning. Another city dude came along and asked to buy the horse, saying that he only rode during lunchtime. Therefore the farmer felt fairly safe in selling the horse a second time. Later he sold the horse a third time to a fellow who claimed he only rode in the afternoon, and eventually, the horse was sold a fourth time to another city dude who claimed he only rode in the evening.
This story would have had a wonderfully happy ending for the newly enriched farmer if it had not been for the fact that these four horse-lovers belonged to the same country club. All four of them got to bragging about their horses and finally decided they would get their horses and race them to see which one was best. Each of the dudes immediately went to the farmer to get his horse.
This is called a "run" on the bank!
How the Central Banks of Europe Learned to Avoid "Runs" on Their Banks
As "fractional banking" became an established practice, it did not take long for the wealthy bankers of Europe to realize that if they were to prevent occasional runs on their banks by suspicious depositors who wanted their gold, they would have to work out a cooperative agreement with other banking families. It was agreed that if a bank had a "run," the other banks would quickly pool their gold and send it to the trouble spot until things cooled down. They learned from experience that if a bank could demonstrate that it did have plenty of gold to redeem its certificates, the people would regain confidence in the bank and re-deposit their gold. The yellow metal could then be returned to the various central banks from which it had been hastily gathered.
Fractional Bankers Do Something Ordinary People Cannot Do
It will be immediately realized that "making money out of nothing" is selling something the money-managers don't really have.
We know it is considered a criminal fraud if a person sells a house he doesn't own. The same thing is true if he sells something which doesn't exist and never will exist. Then how do the bankers get away with it? The answer is rather amazing.
Apparently the bankers saw the danger of their position and decided to protect themselves by getting the government in on the deal. They reasoned that the government certainly wouldn't prosecute the bankers if the government itself was getting a significant benefit from the operation.
So this is what the bankers set out to achieve, first in Europe and then, more recently, in the United States.
How this tricky game is played may be illustrated by the origin of the privately-owned Bank of England.
The Story of the Bank of England
In 1694 William III was involved in a war with France. He needed money and he needed it in large quantities. The British coffers were empty so he asked for vast loans of money from a super-rich Englishman named William Paterson and some of his wealthy friends. Paterson and his friends were perfectly agreeable to the loan providing they were allowed to do two things:
1. Set up a privately-owned bank to be called the Bank of England.
2. Receive authority from the king to issue their own bank notes or certificates as the official legal tender of England.
Since the Paterson bank notes were what the king would be loaned to build and equip his armies, he readily agreed. This gave legal sanction to a private bank being authorized to print bank notes as the legal tender for the whole nation. Each bill promised to pay in gold "on demand," but the bankers actually had only a small fraction of the gold needed to cover the vast quantity of bank notes being printed.
By this means the bankers brought the king in as a patron and beneficiary of a system of "fractionalized banking" or making money out of nothing.
Nevertheless, it gave the king what he needed, and it gave the bankers what they wanted. What did it matter if the bankers were making money out of nothing? At least William would have the needed bank notes which merchants accepted as "money" and so he could buy the mercenaries and needed armaments to carry on his war with France! Governments take precisely the same attitude today.
The king even went so far as to eliminate any possible competition for the so-called "Bank of England" by giving Paterson and his friends an official charter from the Crown and commanding the goldsmiths of London to immediately discontinue issuing receipts as depositories for precious metals. This drove most of the merchants to store their gold with the Bank of England.
So this was the means by which a privately-owned bank became the official depository of the Crown, printed its own bank notes as the king's legal tender, and "legalized" its magic formula for "making money out of nothing."
By any standard, William Paterson considered this fantastic achievement pure genius.
It is interesting that right at the time William III was setting up his privately-owned Bank of England based on "fractional banking" the American colonists were moving in the opposite direction.
How the American Colonists Developed A System of "Sound" Money
Between 1690 and 1700 Massachusetts decided that money should be issued exclusively by the central authority of the government to represent the interests of the whole people. At the same time they set out to discover a "natural law" by which they could issue sound or stable money. When money is stable people are encouraged to invest because they know their money will have the same value when they get it back as it did when they loaned it. Furthermore, stable money encourages people to save because they know it will have the same value when they are old as it had when they put it in savings. Meanwhile, it will have earned a great deal of interest. Sound money is the only way to structure a sound economy.
Historically, there are only two ways to make money stable. One way is to relate all currency to precious metals which maintain a reliable degree of stability in their value or buying power. The other is to maintain the same relative amount of money and credit in operation and only add to the money supply as fast as the growth of the productivity of the people will justify it.
Massachusetts issued its own paper money and made it full legal tender July 2, 1692. This money could be used to pay all debts, public and private. It was used to cover public expenses, finance public works, and to lend to private citizens for long periods of time at a low rate of interest.
Notice that these bills of currency were physically loaned out as though they were gold or silver. Furthermore, the treasurer of the colony loaned out currency at a modest interest rate and the proceeds from this interest were paid into the treasury of the colony. This provided public revenue to the colony and greatly reduced taxes!
Meanwhile, the colony paid no interest to anyone. Other colonies began following this same sound procedure and it soon resulted in a period of unrivaled prosperity for Colonial America.
The Bank of England Invades America
Then everything changed. The privately-owned Bank of England wanted to force the colonies to borrow "bank notes" from them.
Beginning around 1720, the Parliament was induced by the Bank of England to suppress all colonial money. Many years of defiance on the part of the colonies finally terminated in 1749 when Parliament passed the Resumption Act requiring that taxes and contracts all had to be paid in gold or silver. Gold and silver were so scarce in the colonies that the results were disastrous. A deep depression ensued.
Prices fell. Trade stagnated. This was one of the major causes of the Revolutionary War.
Early Americans Learn a Bitter Lesson in How Not to Issue Money
Following the Declaration of Independence, the American Congress began issuing their own paper money again but without any particular limitation. The States did the same. None of this money was tied to precious metal nor was it limited in quantity. Naturally, these "continental" dollars soon inflated out of sight, eventually becoming worthless --worth less than a penny. Even after winning the Revolutionary War, this fatal monetary system almost resulted in the destruction of the United States as a nation.
There was not only skyrocketing inflation but a deep depression and rioting. The New England States became so antagonistic toward developments that at one point they threatened to secede. This was the critical situation when the Constitution was finally put into operation to save the country.
With the adoption of the Constitution, Jefferson hoped the nation would go back to the earlier procedure with government issuing its money based on a precious metal standard. The treasury could then set up branches for loaning money as was done prior to 1720. And as before, all payments of interest would go to the general funds of the nation, thereby greatly reducing the required taxes.
The first of Jefferson's hopes were realized when the gold and silver standard was explicitly written into the Constitution (Article I, Section 1 0). However, his second hope was shattered when Alexander Hamilton was appointed Secretary of the Treasury and pushed through a private central bank similar to those in Europe.
The First Bank of the United States
Even though most of the stock in Hamilton's bank was privately owned by some of his associates in New York, it was called the Bank of the United States. This led people to assume it was a government bank. This same trick was used in 1913 when a group of bankers called their consortium of financial power the Federal Reserve System.
But that story comes later.
The advantages of the new bank was that it provided immediate credit resources for the nation which was otherwise bankrupt. This practical reality is what appealed to Washington first and foremost. He also recognized the dangers involved but felt these could be circumvented by the fact that the charter for the bank would end in 20 years. The disadvantages of the bank were vigorously protested by Jefferson and dispute with Hamilton became so heated that it finally led to Jefferson's resignation as Secretary of State. Critics of the new bank points out that:
1. The issuing of the charter for the bank was without any Constitutional authority. In other words, the bank was unconstitutional.
2. It was authorized to issue bank notes or paper money which was also without Constitutional authority.
3. It allowed this private central bank to loan out its bank notes for interest.
4. This private central bank was made exempt from paying any taxes.
5. It was unconstitutionally designed to collect taxes and serve as the depository of government funds instead of the U.S. Treasury.
6. The banking act also held the U.S. Government responsible or liable for the fiscal transactions of the bank.
7. Only one-fifth of the stock was owned by the government so policies and decision-making would always be in the hands of the private banks.
Jefferson considered the whole scheme an unconstitutional threat to the basic fabric of the American civilization.
He prophesied:
"If the American people allow the banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and corporations that will grow up around them will deprive people of all property until their children will wake up homeless on the continent their fathers occupied.
The issuing power of money should be taken from the banks and restored to Congress and the people to whom it belongs." (Oliver Cusing Swinelll, The Story of Our Money, Forham Publishing Co., Hawthorne, California, 1964, p. 84)
The Second Bank of the United States
Dissatisfaction with the First Bank of the United States resulted in its charter expiring in 1811. However, the financial pressures of the War of 1812 resulted in demands for another central bank. The Second Bank of the United States went into operation in 1816 with the U.S. government owning only 5% of the stock. The bank fulfilled its basic function during a period of relative prosperity and was popular with many people. However, President Jackson saw this small body of powerful bankers gradually building a financial kingdom at the expense of the American people and so he vetoed the act which would have extended the life of the bank with a new charter. Stockholders of the bank never forgave him for that.
Nevertheless, the fiscal policies of Andrew Jackson resulted in the Government getting completely out of debt.
He even ended up with a surplus of $35,000,000! Jackson made $28,000,000 available to the various States as "loans." There had never been anything like it before and certainly nothing like it since.
The Bankers' Feud with Abraham Lincoln
When the Civil War broke out the new President found the treasury empty and payments in gold had been necessarily suspended. Since supplies were desperately needed to mobilize and equip the Union Army, he appealed to the banks for loans.
At that time there were 1600 banks chartered by 29 different States and altogether they were issuing 7,000 different bank notes. To the shocked amazement of President Lincoln, these banks demanded 28% yearly interest for any loans granted to the Federal Government in this hour of crisis.
Lincoln immediately induced the Congress to let him borrow from the American tax payers without interest. This was done by having Congress authorize the issuing of Government notes (called Greenbacks) promising to pay "on demand" the amount shown on the face of the note. These notes were not issued as "dollars" but as promissory notes authorized under the borrowing power of the Constitution. As the notes were gradually turned in for payment of taxes it allowed the government to pay off these notes in an orderly way without interest.
Undoubtedly these notes helped Lincoln save the Union. Lincoln wrote: "...we finally accomplished it and gave to the people of this Republic the greatest blessing they ever had --their own paper to pay their own debts." (DwinelI, The Story of Our Money, p. 115)
But the banks retaliated and open hostilities were launched against Lincoln's Greenbacks. By a variety of devious techniques, the Congress was in duced to pass several bills which seriously distorted everything the President was trying to accomplish. Circumstances finally forced him to issue bonds which the banks could buy with depreciated Greenbacks and then charge the Government substantial interest rates on the bonds. Even Chase, the Secretary of the Treasury joined the Bankers in their demand that the power to issue the nation's money be returned to them.
In 1863, the Congress capitulated under the pressure of Wall Street and authorized the setting up of a privately-owned system of National Banks. Each bank was given virtually tax-free status and was allowed to print money. By 1939 there were 14,348 National Banks.
After the end of the Civil War and Lincoln's death, the major banking interests jockeyed the economy back and forth in a series of boom and bust disasters that finally set the stage for the biggest coup of all, the creation of the Federal Reserve System.
The circumstances which created the climate for the U.S. adoption of a European-type central bank in the guise of the Federal Reserve System, evolved in an atmosphere of intrigue, political manipulation and a deliberately fabricated economic crisis. It would be virtually impossible to believe the unfolding of events unless the size of the prize and the desperation of the major money-managers to capture it, are allowed to account for the totally ruthless tactics employed.
The record shows that in this instance there was certainly no honor among thieves. Probably one of the most shocking aspects of the nation's financial history during this period was the savage and unrelenting malevolence with which the top money-managers treated each other. In Western vernacular, it was the jungle law of "dog-eat-dog"." Furthermore, the record shows that when it came to abusing, deceiving and exploiting the small fry --the common people-- the same jungle code applied except that the common people were far more helpless because they didn't really understand what was happening to them.
But in the circles of high finance all of the contestants vying for power knew exactly what was going on. Carefully and stealthily they maneuvered their way through the maze of the money markets seeking to squirm into some surprise position of superior legal advantage where they could annihilate one or more opponents.
This was the game the money managers were playing when they triggered the crash of 1907.
Wall Street Goes for a Bust in 1907-1908
The war on Wall Street which spread economic devastation across the nation during 1907-1908 was the direct result of one huge money trust trying to cannibalize its competition.
The record shows that the Rockefeller interests of "Amalgamated Copper" set out to destroy the Heinze combination which owned Union Copper Company. By cleverly manipulating the stock market, the Rockefeller faction drove down Heinze stock in Union Copper from 60 to 10. The rumor was then spread that not only Heinze Copper but also the Heinze banks were folding under Rockefeller pressure. J.P. Morgan joined the Rockefeller enclave to announce that he thought the Knickerbocker Trust Company would be the first Heinze bank to go.
That was all it took to send depositors storming to the tellers' cages of the Knickerbocker Bank to get their money. Within a few days the bank was forced to close its doors. Similar fear spread to other Heinze banks and then to the whole banking world. The crash was on. Millions of people were sold out and rendered homeless. The destitute and hungry shifted for themselves as best they could.
Circulating money was hoarded by any who happened to get some, so before long a viable medium of exchange became practically nonexistent. Many business concerns began printing IOU's on small pieces of paper and exchanging these for raw materials as well as giving them to their workers for wages. These "tokens" passed around as a temporary medium of exchange.
At this critical juncture, J.P. Morgan came to the front. He offered to salvage the last Heinze bank (Trust Company of America) if it would turn over to him for merely a pittance of its true worth, the fabulously valuable Tennessee Coal and Iron Company in Birmingham. Morgan wished to add this to the U.S. Steel Company which he had purchased from Andrew Carnegie This arrangement violated the anti- trust laws but in the prevailing climate of crisis, the proposed transaction was approved in Washington. At this point J.P. Morgan told his partners he was intrigued by the "tokens" of paper or printed IOU's which various business houses were being allowed to circulate as a medium of exchange. He sold Washington on the idea of letting him put out 200 million dollars in such "tokens" issued by one of the Morgan establishments. He said this flow of Morgan "certificates" might get the economy going again. Approval was granted and as these new forms of Morgan" money" began circulating, the public regained its confidence so that hoarded money began to circulate again as well. Morgan never forgot how exciting it was to circulate 200 million dollars in "cert ificates" creating out of nothing more than his own "corporate credit" and the formal approval of Washington. Here was a superb device to make millions. In the mind of J.P. Morgan, the seeds for the Federal Reserve System had been sown.
How J.P. Morgan Became Attracted to Woodrow Wilson
On the surface J.P. Morgan seemed to have saved the day --like throwing a child in the river and then being lionized for saving him. No one was more fascinated with the new heroic image of Mr. Morgan than Woodrow Wilson. In the early 1900's Woodrow Wilson had gained a tremendous reputation as a writer and educator. People listened to him. He had practically "founded" the department of political science soon (sic) at Princeton. In fact, his philosophy of political science permeated universities all across the nation and to a large extent still represents the prevalent view today. Wilson reflected a strong criticism of what some called the "archaic nature" of the American system of government and the necessity of getting stronger administrative control over the affairs of the people. In many are as Wilson was very critical of the Founders' Constitutional concepts. Wilson wrote: "All this trouble (the 1907 depression) could be averted if we appointed a committee of six or seven public-spirited men like J.P. Morgan to handle the affairs of our country." Although, reputed to be a great spokesman for "democracy", Woodrow Wilson actually had a powerful instinct for the further strengthening of centralized power. Morgan liked what Wilson was saying.
Soon after Wilson became President of Princeton University, certain Morgan interests began encouraging him to enter the political arena. By 1910, he found himself winning the election for Governor of New Jersey. In 1912, these same forces pushed Wilson into the Presidency of the United States. But that is getting ahead of our story.
The Popular Demand for Monetary Reform
By 1908 J.P. Morgan was already working through his wealthy friend, Senator Nelson Aldrich of Rhode Island, to establish a private central banking system similar to those operating in Europe. Mr. Morgan could not forget the exhilarating satisfaction of printing and circulating millions of dollars worth of "certificates" merely on Morgan's corporate "credit." It was even better than the schemes of the goldsmith-bankers!
Meanwhile, public pressure was making increased demands for a plan to eliminate Wall Street control and exploitation of the economy. Accordingly, Morgan's friend, Senator Adlrich, had arranged to have himself made the chairman of the National Monetary Commission. Congress assigned this Commission the task of studying the United States monetary system and making recommendations of ways to improve it. The Commission promptly took off for Europe and after spending $300,000 returned to write 20 massive volumes extolling the advantages of Europe's central banking system.
This report was barely published when there arrived on the scene none other than Paul Warburg whose brother, Max Warburg, was in charge of the Reichsbank, the privately-owned central bank of Germany. Paul Warburg came well-financed by the Rothschild family and they bought him a partnership in the Rothschild-dominated firm of Kuhn, Loeb and Company. Paul Warburg immediately associated himself with other Wall Street financial leaders as well as Senator Nelson Aldrich. Then he began circulating all over the country lecturing to universities and business organizations. He emphasize d the absolute necessity of setting up a new national banking system which would prevent Wall Street from putting the nation through those devastating "boom and bust" cycles as it had in the past. He promised that the new system he had in mind would really "clip the wings" of the big bankers It was exactly the sound of monetary music the people had been waiting to hear! Little did people know that Wall Street was preparing a plan of its own.
The Meeting at Jekyll's Island
On November 22, 1910, a private railroad car pulled out of the station at Hoboken, New Jersey, with some notable people aboard. Others joined them later. They met at the J.P. Morgan estate on Jekyll's island, Georgia. This secret meeting included Senator Nelson Aldrich, A.P. Andrews, professional economist and Assistant Secretary of the Treasury who had traveled with Aldrich to Europe, Frank Vanderlip, President of the National Bank of New York City, Harry P. Davidson, senior partner of the J.P. Morgan Company; Charles D. Norton, President of Morgan's First National Bank of New York; Paul Warburg, partner of the banking house of Kuhn, Loeb Company in New York; and lastly, Benjamine Strong of the J.P. Morgan Company central office in New York.
After nine days, they had prepared a bill for Congress which was later submitted as "The Aldrich Plan." Five million dollars were pressured out of major banks to "educate" the Congress and the American people to accept the plan.
The main resistance to the Plan came from the House of Representatives where an official investigation had revealed some of the ruthless operations of powerful financial interests on Wall Street and definitely fixed responsibility on Wall Street (especially Rockefeller and Morgan) for the crash of 1907-1908. With the tide of opposition rising, it was obvious that the Republicans were not going to be able to get the Aldrich plan adopted.
Strategy then switched to the Democratic Party which immediately came up
with an "alternate" plan to be called
the Federal Reserve System. It was almost identical with the Aldrich
Plan but with a different name.
The Election of President Wilson
The next task was to defeat the Republican President, William Howard
Taft, in the 1912 election and get a
Democratic administration in power. Taft was popular, but opposed to the
Aldrich Plan. The political strategy was
therefore redesigned to induce another Republican, popular Teddy
Roosevelt, to run on an independent ticket
against Taft and thus divide the Republican Party. Two prominent Morgan
officers, Fran Munsey and George
Perkins, provided both the money and the strategy to help Roosevelt win
Republican votes away from Taft.
Meanwhile, George Harvey, President of the Morgan-controlled Harpers
Weekly, and the Rockefeller money got
behind Wilson. The Wilson team included Cleveland H. Dodge of
Rockefellers' National City Bank, J. Ogden
Armour, James Stillman, George F. Baker, Jacob Schiff, Bernard Baruch,
Henry Morgenthau, and the publisher of
the New York Times, Adolph Ochs.
It is interesting that the Morgan officials who managed Teddy
Roosevelt's campaign were also found to have put
extensive money behind Wilson. As might have been expected, the strategy
worked and Wilson was elected.
The Wilson Administration Begins Reshaping America
When Woodrow Wilson took over the White House in 1913, he brought with
him his Wall Street advisors
including "Colonel" Edward Mandell House who is now known to have been
the major policy-maker and manager
of the entire Wilson administration. In his personal writings, House
describes the pile-driver tactics that were
used to force a bill through Congress which would authorize the setting
up of the new Federal Reserve System as
a privately-owned central bank.
A strong element of deception surrounded the team involved in the
promoting of this legislation. To begin with,
the bill was simply the Aldrich Bill in new dress, something the
Congress had already rejected. Secondly, the
leading financiers of Wall Street went into a carefully orchestrated act
of vehemently pretending to protest
against the bill.
In his autobiography, William McAdoo, Wilson's son-in-law, who became
Secretary of the Treasury, says he was
very impressed by the way the "banke rs fought the Federal Reserve
legislation --and every provision of the
Federal Reserve Act -- with the tireless energy of men fighting a forest
fire. They said it was populistic, socialistic,
half-baked, destructive, infantile, badly conceived and unworkable."
But Mr. McAdoo found that when he engaged these bankers in private
conversation, he realized their opposition
was merely a smokescreen to hide their true feelings. He wrote: "These
interviews with bankers led me to an
interesting conclusion. I perceived gradually, through all the haze and
smoke of controversy, that the banking
world was not really, as much opposed to the bill as it pretended to be.
It was in this illusionary climate of Wall Street antagonism that
Congress finally bit the bullet and took a chance
on this new wonder-plan which promised to prevent depressions, stabilize
the nation's money system and get
Wall Street off the back of the American people. Congressman Charles
Lindbergh of Minnesota whose son would
later fly the Atlantic, raised a mighty voice of protest against the
whole scheme, but the majority of the Congress
were either too busy or too enamored with the promises of the new system
to detect the snare.
On December 22, 1913, with the prospects of the Christmas Holiday
pressuring the Congress into final action
before the session closed, the House voted 298 to 60 in favor of the new
Federal Reserve System, and the Senate
passed it 43 to 25.
Had Thomas Jefferson, James Madison or Andrew Jackson been around, they
would have no doubt exploded
with indignation.
Perhaps without quite realizing it, the Congress had created a powerful
engine of private central banking which
was given the power to indulge the bankers' voracious appetite for
boom-and-bust economics, confiscatory
taxation, smothering national indebtedness and the promotion of war on a
world-wide scale. No one suspected
that this power would be used to confiscate the people's gold, diminish
their savings with inflation, erode away
the value of insurance policies and fixed incomes, destroy the stability
of the dollar, and eventually engulf the
nation in a miasma of foreign entanglements which would threaten the
very existence of the United States as a
free and independent people.
All of this would have to be demonstrated as the future unfolded chapter
by chapter during the Twentieth
Century.
In our next "Behind the Scenes" letter we will cover "What Every America
n Should Know About How the
Federal Reserve System Works." In this next l etter we will trace the
well-nigh incredible story which is finally
coming out in several national best-sellers. These include Time For
Truth by former U.S. Treasury Secretary
William Simon, and Free to Choose by the Nobel prize-winning economist,
Dr. Milton Friedman
_________________________________________________________________________
What Americans Find Hard to Believe- How the Federal Reserve System
Works
The American colonists suffered so bitterly from the constant
manipulation of their economy by the British
money-trust and the privately-owned Bank of England that they structured
the Constitution so that the issuing of
money and the fixing of its value would be under the exclusive control
of the people's government.
Unfortunately, their original design was never carried out. From the
very beginning the vested interests of the
private money-trusts were successful in acquiring sufficient control of
the country's finances so that they were
able to make fabulous profits from carefully engineered "boom and bust"
cycles which came on the average of
about once every seven to fifteen years.
One of the worst of these "busts" came in 1907-8 and the universal
outcry from coast-to-coast was "Monetary
Reform!" So the Federal Reserve was set up with elaborate machinery
which its sponsors promised would achieve
some very exciting things. It would stabilize the dollar, prevent
depressions and promote prosperity. The fact that
the entire operation would be in direct violation of the Constitution
seemed trivial compared to all of the
marvelous things it promised to accomplish.
How America Adopted the Idea of a Privately-Owned Central Bank
In spite of the warning of Jefferson, Jackson, Lincoln, and the
provisions of the Constitution, Woodrow Wilson
ran for President on the platform of adopting a privately-owned central
banking system to be called the Federal
Reserve.
In the campaign Wilson promised that the Federal Reserve would get the
nation out from under the oppressive
control of Wall Street. What the public was never told, however, was the
astonishing fact that the Federal
Reserve Act actually had been written and promoted by the Wall Street
money-trust itself. Nevertheless,
Woodrow Wilson had come to trust these men. They had financed his
campaign for President.
It is not necessary to review all of the intrigue and deception which
surrounded the passage of the Federal
Reserve Act. We will simply outline its highly persuasive promises
compared with the cold reality of its historical
performance during the past 65 years. The record shows that Woodrow
Wilson was one of the first to recognize
what a horrendous mistake had been made.
"From Woodrow Wilson with Regrets"
In 1916, just three years after the Federal Reserve System got into
operation President Wilson seems to have
suddenly realized what a virtually uncontrollable power monopoly had
been vested in the nation's new Federal
Reserve System. He wrote: "A great industrial nation is controlled by
its system of credit. Our system of credit is
concentrated (in the Federal Reserve System). The growth of the nation,
therefore, and all our activities are in the
hands of a few men.... We have come to be one of the worst ruled, one of
the most completely controlled and
dominated governments in the civilized world -- no longer a government
by free opinion, no longer a government
by conviction and the vote of the majority, but a government by the
opinion and duress of small groups of
dominant men." (Quoted in "National Economy and the Banking System,"
Senate Documents Co. 3, No. 23 , 76th
Congress, 1st session, 1939.)
President Wilson's protest against the "duress" of a few dominant men is
especially interesting in view of the
dozens of articles he had written as head of the political science
department at Princeton criticizing the thinking of
the Founding fathers and calling for stronger centralized power in
Washington.
In fact, these men from whom President Wilson was feeling such duress an
d domination in 1916 were the very
ones he had been praising a few years earlier when he said: "All this
trouble (1907 depression) could be averted if
we appointed a committee of six or seven public-spirited men like P.
Morgan to handle the affairs of the country."
H.A. Kenan, "The Federal Reserve Bank," p. 103.) It would seem that by
1916 the superior wisdom of the
Founding Fathers had become increasingly apparent, even to Wilson.
Additional Mourners
The Federal Reserve Act was sponsored by Senator Robert L. Owen and
Senator Carter Glass. Senator Owen was
chairman of the Senate Banking and Currency Committee where the bill was
drafted. The original bill required the
Federal Reserve to maintain stable money which would produce a stable
price level. Very shortly Senator Owen
also became one of the mourners and wrote:
"This mandatory provision was stricken out in the House under the leader
ship of Carter Glass. I was unable to
keep this mandatory provision in the Bill because of the secret
hostilities developed against it, the origin of which
at that time I did not fully understand."
But he later found out where these hostilities were coming from. He said
: "Under the administrations of Wilson,
Harding, Coolidge and Hoover, this Act was diverted from its proper
purpose on the advice of some who
controlled the policies of a number of the largest banks." (Gertrude M.
Coogan , Money Creators, p. IX of
Introduction.) Owen spent the rest of his life trying to get the Federal
Reserve System repealed.
It is mentioned in most of the texts that the Federal Reserve Act would
never have passed the House without the
support of the Democratic Party whip, William Jennings Bryan, who later
became Secretary of State.
Bryan also became a mourner and wrote: "In my long political career, the
one thing I genuinely regret is my part in
getting the banking and curre ncy legislation enacted into law." (Quoted
by H.S. Kenana, The Federal Reserve
Bank, 1967 ed. rev., p. 125.)
Unfortunately, all of these powerful political personalities who had so
much to do with adoption of the Federal
Reserve System, found that it was too big and too powerful to control or
repeal once it had become entrenched.
All they could do was mourn.
Federal Reserve System Operates on Three False Premises
The whole purpose of establishing the Federal Reserve System was to
prevent depressions, stabilize the
currency, and protect the savings and chec king deposits of the people
in the custody of the banks.
However, there are three things Jefferson, Jackson and Lincoln
identified as outright enemies of a sound money
system, and the Federal Reserve co ntains all three of them.
The first thing they said the nation should avoid is turning over to a
group of private bankers the right to print
the official currency of the nation. They said this right is inherent in
the people and belongs to the people's
government. Whenever this right has been delegated to private bankers
they have always used it to abuse the
people and gradually devour the wealth of the nation. Jefferson wrote:
"If the American people ever allow private banks to control the issue of
currency, first by inflation, then by
deflation, the banks and corporations that will group up around them
will deprive the people of all property until
their children will wake up homeless on the continent their fathers
conquered." (K.S. Kenan, The Federal Reserve
Bank, 1967 ed. rev., p. 2 34.)
When Abraham Lincoln was not able to initiate a monetary reform act but
was compelled to accept the National
Bank Act in 1863, he wrote:
"I see in the near future a crisis approach which unnerves me and cause
me to tremble for the safety of my
country. Corporations (of banking) have been enthroned, an era of
corruption in high places will follow, and the
money power of the country will endeavor to prolong its reign by working
upon the prejudices of the people until
the wealth is aggregated in a few hands and the Republic destroyed."
(H.S. Kenan, The Federal Reserve Bank, p.
6.)
Why the U.S. Now Borrows Its Own Currency and Pays interest on It
The second fallacy in the whole Federal Reserve System is the fact that
the private banks which own the stock in
the Federal Reserve System, charge the United States interest for
borrowing the country's own currency!
The Federal Reserve scheme not only provides that all U.S. currency
shall be printed up as Federal Reserve Notes
but that if the government wants to use these notes it must give the
Federal Reserve IOU's in the form of
government bonds on which interest will be paid until the bonds have
been redeemed.
The question immediately arises, "Well, what did the banks loan to the
government in exchange for these
bonds?" The answer is, "Nothing, absolute ly nothing." The banks paid
for the printing of their Federal Reserve
notes and gave them to us, but they are not redeemable in gold, silver
or anything else of value. They are just
paper, backed by virtually nothing. The question next arises, "Then why
are they able to charge us interest when
all they are doing is printing up some of our own currency?"
The answer is that in 1913 the Congress gave the Federal Reserve the
legal "right" to print our money and that
right is "as good as gold." Therefore, if we want to use the Fed's
money, we have to borrow it and give the m Fed
IOU's, for the amount obtained. And, of course, each IOU (government
bond) is something on which interest
must be paid.
This whole arrangement is so totally irrational that the chairman of the
Banking and Currency committee,
Congressman Wright Patman, asked Marriner Eccles, Chairman of the
Federal Reserve Board, the following:
"Mr. Eccles, how did you get the money to buy these two billion dollars
of government bonds?
Mr. Eccles: "We created it."
Mr. Patman: "Out of what?"
Mr. Eccles: "Out of the right to create credit money.
Lincoln Denounces This Second Fallacy in Government Financing
Since it is the Government's right to create money in the first place,
why should it have to borrow its own money
from the Federal Reserve Banks and give interest-bearing bonds or IOU's
in exchange for the money?
Lincoln said: "Government possessing the power to create and issue
currency and credit as money and enjoying
the right to withdraw both currency and credit from circulation by
taxation or otherwise, need not and should not
borrow capital at interest as the means of financing governmental work
and public enterprises. The government
should create, issue, and circulate all the currency and credit needed
to satisfy the spending power of the
government and the buying power of consumers. The privilege of creating
and issuing money is not only the
supreme prerogative of Government, but it is the Government's greatest
creative opportunity." (H.S. Kenan,
Federal Reserve Bank, 1967 ed. rev. pp. 187-8.)
By creating and issuing its own money, Lincoln said the people could
avoid a national "debt" economy which
bankers instinctively promote. By creating their own money, "The
taxpayers will be saved immense sums of
interest, discounts and exchanges. The financing of all public
enterprises, the maintenance of stable government
and ordered progress, and the conduct of the treasury will become
matters of practical administration. The people
can and will be furnished with a currency as safe as their own
government. Money will cease to be master and
become the servant of humanity. Democracy will rise superior to the
money power." (Ibid. p. 188.)
The Third Fallacy of the Federal Reserve is "Fractional" Banking
Fractional banking was invented in Europe around four hundred years ago.
It allows a bank to set up a "reserve"
to cover any claims which happen to come in and then go ahead and loan
many times more money on credit than
the "reserve" in the bank. By this means the bank loans out and charges
interest on something it doesn't even
have. With everybody else it is a fraud to loan, rent or sell something
which does not exist. Fractional banking
should have been outlawed 200 years ago.
One of the most dangerous devices employed by the Federal Reserve under
fractional banking, is its power to
bounce the level of required reserves up and down so as to control the
money supply and the interest rates. The
Congress which passed the Federal Reserve Act assumed that this would be
done in the interest of the public,
but as we shall see later, the very opposite occurred.
Promises of the Federal Reserve Turned Out to be Pie-Crusts Made to be
Broken
As mentioned earlier, the original promises of the Federal Reserve
promoters were so glorious that it seemed it
would be the height of stupidity to turn down such a marvelous
opportunity, the Constitution to the contrary
notwithstanding.
All the Federal Reserve wanted was the privilege of printing the
nation's currency and serving as the
government's bank. In exchange for this great privilege, the following
promises were made:
1. The Federal Reserve promised to operate entirely under the direction
and control of the President and his
appointees to the Board of Governors. The Fed escaped from this control
almost immediately. It has so much
influence in Congress that over 200 amendments were added to the
original Act, and these gradually altered the
entire statutory profile of the Act. Even the Secretary of the Treasury
and the Comptroller of Currency were
eliminated from its Board of Governors. Hundreds of times the Fed has
defiantly acted against the interests of the
American people and made billion-dollar decisions favorable to its
banker stockholders. In these cases, the
President and the Congress found themselves helpless and unable to
intervene. The Chairman of the Board,
Marriner Eccies, admitted this to the head of the Banking and Currency
Committee of the House. When Mr.
Eccles was asked if the Federal Reserve had more power than either the
Congress or the President, Mr. Eccles
replied: "In the field of money and credit, yes." (Joint Economic
Committee Report, 1962, p. 525, quoted by Kenan,
p. 192.)
Fed Pays Nothing for the Right to Print Money
2. Section 16 of the Act provided that the Federal Reserve would pay the
Government interest for the privilege of
printing Federal Reserve notes as the nation's currency. However, the
Act left this to the discretion of the Board
of Governors who elected from the beginning to pay the government zero
interest for this right to manufacture the
nation's money. No legal remedy to enforce this section is available.
Failure to Provide Free Banking Services
3. The Fed promised to perform many banking services for the Government
free of charge, but in spite of this
provision it began charging for its services right from the start.
Wright Patman, Chairman of the House Banking
and Currency Committee asked Mr. Eccles: "Wasn't it intended when the
Federal Reserve Act was passed that
the Federal Reserve Bank would render this service without charge-since
under the Act the Government would
give them the use of Government's credit free?" Mr. Eccles seemed
shocked an d replied, "I wouldn't think so!"
Failure to Stabilize the Dollar
4. It was promised that the Federal Reserve would manage the nation's
money supply so that the American dollar
would be protected and remain stab le so as to keep prices relatively
stable. The Federal Reserve stockholders are
now known to have manipulated the dollar until today its purchasing
power is not worth more than ten cents of
what it was when the Federal Reserve took over. The Federal Reserve was
behind the legislation which took the
nation off the gold standard and used its lobby in Congress to force the
bill through without a hearing. Later it
removed the nation from what was left of the silver standard and has
since been found maneuvering behind the
scenes in an attempt to get the dollar replaced with some kind of
international money.
Failure to Eliminate the Control of Wall Street
5. It was promised that the Federal Reserve Act would take the United
States out from under the control of Wall
Street. This was the biggest dece ption of all. The most powerful money
trusts on Wall Street were the ones
behind the passage of the bill and it was their money-managers who took
over the Federal Reserve System as
soon as the Act went into operation. During debates in the House,
Congressman Charles Lindbergh, father of the
famous Atlantic non-stop flyer, declared, "This Act establishes the most
gigantic trust on earth. When the
President signs this bill, the invisible government by the Monetary
Power will be legalized... The worst legislative
crime of the age is perpetrated by this banking and currency bill. The
caucus of the party bosses have again
operated and prevented the people from getting the benefits of their own
government." (Kenan, p. 137.)
Failure to Forestall Depressions
6. It was promised that the Federal Reserve would prevent any future
depressions. Now it is known that the
Federal Reserve deliberately engineered and prolonged the worst
depression in the history of the United States.
As the well-known economist, Dr. Milton Friedman, states in his text,
Capitalism and Freedom: "I am myself
persuaded, on the basis of extensive study of the historical evidence,
that ... the severity of each of the
contractions [depressions] --1920-21; 1929-33, and 1937-38 -- is
directly attributable to acts of commission and
omission by the Reserve authorities and would not have occurred under
earlier monetary and banking
arrangements." (p. 45.)
Failure to Serve the Farmer and Small Business
7. The promise was made that the Federal Reserve would be the friend and
helper of the farmer and the monetary
needs of small businesses. The Fed so completely failed in this promise
that entirely new lending agencies had to
be created by Congress to help the farmers and small businessmen.
Furthermore, the Federal Reserve used its
power in 1920 to deliberately manipulate the economy to produce an
agriculture collapse. This caused tens of
thousands of farmers to lose their farms. (Kenan, p. 128.)
Failure to Decentralize Banking
8. The promise was made that the new system would forever remain
decentralized so that the Federal Reserve
Bank in San Francisco would have as much to say about monetary policies
as New York. This proved fallacious
from the first year of operation. The centralized money market in the
United States is in New York and the New
York Federal Reserve Bank has dominated the other eleven districts to
the point where the latter are usually not
even consulted when decisions are made by the Open Market Committee.
Foreign Entanglements
9. The promise was made that the Federal Reserve would protect American
interests against foreign monetary
assaults. Studies show that the privately-owned money-trust which set up
the Federal Reserve System is riddled
with foreign entanglements. It operates European branch banks and was
found to have drained off billions in
American resources to underwrite its interests abroad. In the midst of
the depression, Congressman Louis T.
McFadden of Pennsylvania, declared:
"Mr. Chairman, we have in this country one of the most corrupt
institutions the world has ever known. I refer to
the Federal Reserve Board and th e Federal Reserve Banks, hereinafter
called the Fed. The Fed has cheated the
Government of the United States and the people of the United States out
of enough money to pay the Nation's
debt.... The wealth of these Unite d States and the working capital have
been taken away from them and has either
been locked in the vaults of certain banks and the great corporatio ns
or exported to foreign countries for the
benefit of foreign customers of these banks and corporations. So far as
the people of the United States are
concerned, the cupboard is bare." (Congressman Louis T. McFadden on the
Federal Reserve, Forum Pub. Co.,
Boston, p. 3. 26.)
Domestic Commercial Banks at the Mercy of the Federal Reserve
10. The Federal Reserve System was specifically committed to supervising
and inspecting the local banks and
also providing funds in case they were pressed by unexpected demands for
payment. It was recognized that
every time a bank is forced to close its doors the savings and deposits
as well as the stock of the bank's investors
and stockholders are lost. But ins tead of being its protector, the
policies of the Federal Reserve frequently have
been a nightmare to the neighborhood commercial bank with which most
Americans are familiar. Thousands of
them have been forced into bankruptcy by inconsistent and selfish
policies imposed on them by the big money
trusts operating out of New York and Europe.
How the Federal Reserve System is structured
The present structure of the Federal reserve consists of a Board of
Seven Governors who serve 14 years with the
term of one of the members expiri ng every two years. The new members of
the Board are appointed by the
President of the United States who also selects the Chairman. The
original design was to have these 7 men
represent the "public interest" as opposed to the special interest of
the member banks. However, the chairman of
the Board of Governors has nearly always been a prominent member of the
banking community. Great pressure is
also exerted from Wall Street to have sympathetic board members
appointed by the President.
The nation is divided into 12 Federal Reserve Districts with a Federal
Reserve bank in each district and branch
banks in major cities as needed. Local commercial banks which become
part of the Federal Reserve System are
called "member" banks. Each member bank is required to subscribe "stock
" in the Federal Reserve bank. This
amounts to 6% of its capital and surplus. Only 3% must be paid into the
bank, but the remainder is subject to call
if needed. The bank receives an interest payment of 6% per annum on its
paid-up stock. Washington will tell the
bank how much "reserve" it must maintain with the Federal Reserve but
this will always be a small fraction of
what the bank is allowed to loan out at interest. On occasion it may be
allowed to loan out as much as thirty times
more than what it has in reserves. Of course, by doing so, it may risk
having a "run on the bank" by its depositors
if they begin to suspect the soundness of the bank. In these instances,
the Federal Reserve is supposed to come
to the bank's rescue, but very often it has not. Thousands of banks have
gone under in recent years with losses
of hundreds of millions by its depositors.
Each of the 12 District banks has a board of directors. Six are usually
bankers and 3 are selected from the
non-banking business sector.
Four times a year each of the 12 Districts sends a representative to
Washington to confer with the Board of
Governors. These meetings are called the Federal Advisory Council but it
is not really too significant.
An important function of the Federal Reserve System is to provide
clearing houses for collecting checks, notes,
drafts, etc. This is not done by transferring currency but by simply
adding and subtracting from the accounts of
the various banks. Banks with a balance-owing send in the differen ce.
The Board of Governors is also responsible for a large staff of bank
inspectors to check the practices and lending
policies of the members banks. The Board can suspend a bank from
operation or remove the officers of any bank
which are considered to be using unsound practices.
The inspection and check clearing services of the Federal Reserve is one
part of the system which is reported to
be administered with dispatch and efficiency.
The Real Center of Power is the Federal Open Market Committee
When it comes to controlling the money supply, interest rates, and the
purchase or sale of securities , the real
foot on the throttle and toe on the brake belong to the Open Market
Committee. It makes all of the important
decisions and meets in Washington behind closed doors every three wee
ks.
The Open Market Committee consists of the 7 members of the Board of
Governors and 5 of the Board chairmen
selected from the 12 District Banks. One of these will always be the
chairman of the New York Bank. The others
rotate in turn. Although the chairman from all 12 Districts may attend
the se meetings, only the 5 who serve on the
Committee can vote. The Congress originally intended this powerful
committee to be under the close supervision
of the non-banking members of the Board of Governors, but it is
recognized today that this is a strictly
banking-fraternity comm ittee operating completely outside the control
of the President, the Secretary of the
Treasury, the Comptroller or the Congress. As of this point in time, the
Open Market Committee operates just like
any of the privatey-owned central banks of Europe. Dr. Milton Friedman,
a most astute stude nt of the Federal
Reserve, and also William Simon, former Secretary of the Treasury,
consider this Open Market Committee a
dangerous threat to the economic stability of the United States and
recommend that it be terminated.
There Has to Be a Better Way
There is no doubt but what history has caught up with the Federal
Reserve System. It has had disgraceful record
almost from the moment it went in to operation. The Act
unconstitutionally delegated. to a consortium of private
bankers one of the most precious rights a nation possesses -- the right
to manage their own system of money and
credit.
Under the policies of the Federal Reserve System national indebtedness
has been encouraged, inflation has
sky-rocketed, and the value of the American dollar has sunk so low that
savings have been eaten up, fixed income
s have become a dribble, and a once wealthy nation finds itself owing
more than all the rest of the nations of the
earth combined.
Fortunately, there is a way out of all this. It was provided in the last
section of the Act, section 30. It is time
Americans began talking seriously about Section 30 of the Federal
Reserve Act so that we can save what is left of
the American economic heritage.
In our next "Behind the Scenes" letter we will discuss this exciting
possibility. It will be called, "Save the Dollar!"
_________________________________________________________________________
#3 The Urgent Need for U.S. Monetary Reform
Save the Dollar, Save the People Save the Banks!
No issue is creating more turbulence in the minds of Americans today
that our money system. Double-digit
inflation, the crushing burden of public and private debts, harassment
of confiscatory taxation, high interest rates,
depleted savings, leaping prices, crippling strikes, increasing bank
ruptcies, and serious social problems of vice,
crime and divorce -- all these are closely related in one way or another
to the nation's sick money system.
Why Hasn't Something Been Done About It?
The problem in the past has been the fact that too many politicians and
economists have been trying to prevent
the system from exploding by putting billion-dollar paper patches on the
boiler. These billion-dollar patch es have
been squeezed out of America's abused and exploited citizen-taxpayer.
This has aggravated the problem rather
than solved it.
It is amazing that the experts haven't been willing to explore the
possibility that someone in the past may have
found the answer. Always there has been the search for some new, exotic
formula, and always the search has
centered around bigger spending and more government controls. All these
efforts have been counter-productive
and ended in failure.
The Founding Fathers' Formula
What is needed today is a more careful study and a far deeper
appreciation of a formula which was worked out by
the Founding Fathers over 200 years ago but was never used. Not at any
time during the two centuries that this
nation has been in existence have the people enjoyed the rich and
abundant blessings of a sound, honest money
system.
At the Constitutional Convention, the Founders "set their faces like
flint" and determined that they would make
the American dollar completely in dependent of any power or combinations
of powers outside of the American
people. They therefore gave the exclusive power to issue and control
money to the people's representatives --the
Congress-- and forbade anybody, even the States, to meddle with it. Not
only was Congress to be held
responsible for the issue of money, but it was to see that its
purchasing power remained fixed. !n other words, the
"value" of the money must not only remain steady and reliable in the
United States, but also in relation to foreign
money.
It is not difficult to imagine how different the monetary history of the
United States might have been if this
formula had been used.
Why Wasn't the Founders' Formula Followed?
It was extremely unfortunate that the new Constitution was inaugurated
during the depths of a devastating
depression. In fact, at that particular time the whole American money
system was based on a sick, terribly bloated
dollar that had developed during the Revolutionary War. George
Washington knew that unless some healthy
money were immediately introduced into the economic system, the new
government would be discredited and
find Its elf doomed to oblivion. It was a time of extreme desperation.
Alexander Hamilton came up with a plan to
monetize the nation's mammoth war debt by issuing bonds and selling them
to private banks. He also urged the
President and Congress to allow these bankers to temporarily (for 20
years) establish a private bank in the name
of the United States and be responsible for the issuing of money,
controlling the amount, fixing its value, and
financing the United States government. It was this last factor which
appealed to President Washington.
There was, of course, no Constitutional authority to have the Federal
Government set up such a bank, but
Hamilton persuasively argued a theory of "implied powers" which has
seriously damaged the whole concept of
"limited" government ever since. Although the argument was sufficiently
strong to impress Congress,
Washington was uncomfortable with it. In fact, he was actually
contemplating a veto of the Banking Act when
Hamilton drew him aside and filled his mind with such glowing promises
of stability and prosperity under this
"temporary" expediency that Washington finally overrode his professional
instinct as one of America's most
successful farmers, and signed the bill.
Jefferson later accused Hamilton of complicating the whole scheme with
such elaborate trappings that it had
confused the President. It turned out that Washington's original
instructive anxieties concerning the dangers of
the bill were fully justified. By 1798 even Hamilton admitted that the
whole thing had been a serious mistake. He
actually wrote a letter to Oliver Wolcott, the Secretary of the
Treasury, urging that the United State s abandon the
plan he had concocted and return to the original idea expressed at the
Constitutional Convention. He wrote that
the Government should "raise up a (money) circulation of its own" which
would require, of course, that the
Government no longer allow this important task of issuing money to be
assigned to a private banking system.
(Letter dated August 22, 1798, quote in Money Makers, by Gertrude
Coogan, pp. 204-5)
Private Money-Managers Prove Difficult to Dislodge
However, once the vested interests of the powerful and wealthy
money-managers had become thoroughly
entrenched, it proved far more difficult to remove them than Hamilton
had realized. As a result, for nearly 200
years mighty voices have been pleading with Americans to demand that
Congress return to its Constitutional
money system. But always to no avail. These pleas have been coming from
men such as Jefferson, Madison,
Jackson, Lincoln, Lindbergh, and McFadden. They have been like voices in
the wilderness And because their
voices went unheeded, a highly vulnerable and easily manipulated sick
dollar has been employed ever since with
all of its at tendant evils.
The ultimate mistake, as we saw in our last discussion ("How the Federal
Reserve System Works") was setting up
a privately controlled central bank in 1913 under the pretense that it
was a government controlled monetary
service agency. What it actually did was to give to a consortium of
private money-managers the power to issue
money, control the money supply, regulate the interest rate (which
controls the "value" of money) and indulge in
the wildest kind of "fractional" banking wherein these money-managers
were allowed to loan "at interest" billions
of dollars they didn't even own.
What Are the Characteristics of a Sound Money System?
Here are some of the most important characteristics of a sound and
honest money system which the Founders
had in mind when they wrote the Constitution.
1. Money should be recognized as nothing more than a unit of value
designed to facilitate the exchange of goods
and services. The right to create such a symbol therefore, belongs to
those who create the goods and services,
meaning the people themselves. It is an inherent and inalienable right
which they alone can delegate. In the
Constitution the right to create the people's money was delegated to
Congress.
2. Once the right to create money is delegated to the people's
representatives--the Congress-- it is completely
unlawful for the Congress to give that right to a group of private
bankers or "money-managers."
3. It is the responsibility of the Congress to create a healthy dollar
or unit of value which will maintain the same
relative value from generation to generation.
4. It is also the responsibility of the Congress to set up appropriate
machinery to monitor the money supply so
that it will remain in balance with the amount of goods and services
being produced by the people. As
productivity increases, the money supply should be increased, but only
to the same extent. Congress has never
provided the machinery needed to fix and maintain the value of money by
regulating the supply in relation to
goods and services.
5. Machinery should also have been provided so that no powerful group of
private money manipulators could
suddenly drain off large portions of the money supply so as to cause a
depression; or suddenly add to the money
supply and thereby create sky-rocketing inflation. Either of these
developments violates the responsibility of
Congress to "fix" and maintain the "value" of the dollar as provided in
the Constitution.
6. It was also the intention of the founders that the issue of the
dollar be locked into a designated amount of gold
or silver. Throughout the history of modern man, precious metal has
always been the "money of last resort." Of
course, people will ordinarily prefer to use paper money because it is
so much more convenient to handle, but as
Jefferson and others pointed out, it should be redeemable in gold or
silver. And experience has taught us that
U.S. notes should be redeemable in gold and silver at the prevailing
market price rather than some arbitrary price
fixed by statute. A statutory price allowed speculators to play havoc
with our currency.
7. To safeguard the value of money against the manipulation of
speculators, it is essential that the nation have
such a large supply of precious metal in storage that no group of
private speculators, either at home or abroad,
can get a corner on the market and seriously alter the stability of the
paper money which has been issued.
8. When a certain unit of value (the dollar) has been declared the
official legal tender, no bank or individual
should be allowed to make loans except in terms of monetary assets which
are in actual possession or readily
available. Fractional banking or loaning or "credit" backed by merely a
fraction of the loan is inherently fraudulent
and should be outlawed.
The Inherent Deficiencies of the Federal Reserve System
No one should have difficulty immediately recognizing why the present
American money system has produced
such a sick dollar. From our earliest history the Congress has never
fulfilled its responsibility to issue our money
Constitutionally and "fix the value thereof." The creation of the
Federal Reserve System was the most serious
mistake of all. During its operation for nearly three-quarters of a
century, here is what it has done to the American
people:
1. It has allowed a group private central bankers to issue the people's
money and make fabulous profits loaning it
back to the government at a substantial rate of interest.
2. It has manipulated the dollar until it has lost 90% of its buying
power since 1913.
3. It has practiced fractional banking on the people wherein it was able
to use a small "reserve" to loan out many
more times as much money on its "credit" so as to artificially expand
the money supply and bloat the economy.
Then it would withdraw this make-believe money supply or credit so as to
contract the economy and provide an
excuse to foreclose on farms, homes, factories and savings accounts. By
this means the fractional bank ers were
able to replace their make-believe wealth or "credit" with tangible
wealth which would be later sold at a
substantial profit.
4. It is now known that the money-managers back of the Federal Reserve
System lobbied legislation through
Congress which forced the American people off the gold standard in 1934
and off the silver standard by 1964.
They further succeeded in having the people's gold confiscated in
quantities which would now be worth several
hundred billions of dollars.
5. Studies show that the stock of the Federal Reserve System is known to
have beer controlled to a large extent by
the private bankers who operate the central banks of Europe, and they
have continually manipulated the
American economy and its Federal Reserve System to their own selfish
advantage. By alternately using war and
depressions, they have drained off so many billions of dollars from the
American people that it is now difficult to
mentally comprehend the extent of it. Although a few members of Congress
tried to expose these frequent
manipulations, the intricacies of the Federal Reserve System have been
too complex and most Congressmen have
failed to realize what was actually happening.
6. Most importantly, the managers back of the Federal Reserve System
have accumulated such fabulous
quantities of wealth that they have been able to buy up the major news
media and make such extensive grants to
the foundations and universities that it has been virtually impossible
for alarm ed Congressmen and economists
to project their warning through the educational and communications
systems of the nation. This has kept the
public in almost total ignorance of what has been taking place. It has
also prevented the mobilizing of the political
forces needed to recapture the monetary system from this gigantic
establishment of monopolized power which
has a vested interest in hundreds of billions in the Federal Reserve
System.
How Can Americans Liberate Themselves and Set Up a Constitutional Money
System?
It has been known for many years that there is an escape from the
present dilemma if a sufficient number of
Congressmen can be induced to consider the source of the problem and the
requirements for a solution.
The key to solving the problem is Section 30 of the Federal Reserve Act
which provides that the government can
buy back the stock from the Federal Reserve banks at any time, thereby
acquiring all of the assets which have
been accumulating in the Federal Reserve System during close to
three-quarters of a century. At least two
advantages would immediately result from this action.
First of all, the stock of the Federal Reserve banks would cost the
Government less than a billion dollars whereas
the assets of the Federal Reserve System are now nearly 200 billion.
Most of these assets are in U.S. government
bonds. There is also another 100 billion being held in "reserve" for the
member banks and practically all of these
assets are in U.S. government bonds.
Secondly, the Federal Reserve system has obtained these billions in bond
s without paying anything for them
and therefore they can be taken back as part of the assets of the System
without any obligation to compensate
the stockholders for them. in order to understand how the Federal
Reserve has been "buying" U.S. bonds without
paying anything for them it is only necessary to follow the procedure in
one of its purchases for example:
Let us say the Federal Reserve applies to the U.S. Treasury for 500
million dollars worth of bonds. The Treasury
promptly prints up the bonds (Government IOU's) which require the
American taxpayers to eventually redeem
them at their face value plus a regular payment in interest. Now comes
the surprise. The Federal Reserve puts the
bonds in its "reserve" fund and immediately treats these bonds as an
asset. It then writes out a check to the
Government based on the credit created by these bonds! In other words,
nothing of value is surrendered to the
Treasury for these bonds. It is simply a question of writing a check on
the "credit" which the bonds themselves
created.
When the member banks buy U.S. bonds, they follow the same procedure.
How to Wipe out Nearly Half of the Federal Debt
The important point to recognize here is that if the United States
bought back the stock of the Federal Reserve
System, the Government would also be entitled to all of the assets and
"reserves" of the System including these
bonds for which the Federal Reserve. and its member banks paid nothing.
These bonds could then be immediately
canceled since the Government would own them. They would not have to be
redeemed nor would any further
interest be due on them. It would be similar to a man who buys a company
and finds that the assets include his
own notes or IOU's. Through his purchase of the company he gets back
these IOU's and can tear them up
because he owes them to himself.
This procedure would wipe out approximately 200 billion dollars worth of
bonds belonging to the Federal Reserve
System and another 100 billion dollars worth of bonds in the "reserves"
of the member banks.
There is another huge supply of U.S. bonds in the trust funds of various
Federal agencies. These trust funds
were originally set up to maintain a ready supply of emergency cash, but
over the years these trust funds have
been spent and replaced with U.S. bonds or IOU's. All of these bonds
belong to the United States and should
therefore be canceled since they belong to the Government and should be
considered redeemed, with no further
interest due. This would account for another 100 billion dollars or more
which could be wiped off of the Federal
debt, thereby bringing the total to approximately 400 billion dollars in
canceled U.S. bonds which would
practically cut the Federal debt in half. It would also cut the
Government 's annual interest payments in half.
All other outstanding U.S. bonds should also be redeemed and canceled
out as rapidly as the economy would
permit. The United States would then be completely out of debt and by
adopting the Founding Fathers' monetary
formula the nation could stay out of debt forever. Legislative Steps
Needed to Stabilize the U.S. Monetary System
Just as soon as the Government has acquired the stock in the Federal
Reserve System, the Congress could
proceed to take the steps which economist s have been working out in
progressive detail ever since the days of
Jeff erson, Jackson, and Lincoln. The basic requirements for the new
monetary system should be carefully
codified in an amendment to the Constitution. This amendment plus
statutory implementation by Congress would
need to provide for the following:
1. Freezing the money supply at its present level to prevent any further
deterioration by inflation.
2. Setting up the necessary monitoring machinery to keep the supply of
money within 3% of the Gross National
Product (goods and services) and use the price-index to provide a
month-by-month correction so as to keep the
ratio between the money supply and the GNP as exact as possible. The
only exception to the 3% restriction would
be in time of war or an extreme emergency declared by Congress. The law
should require that the excess money
supply which had been pumped into the monetary system to meet the needs
of the emergency, must be drained
off through taxes or other means within five years so as to bring prices
and the supply of money back into their
original ratio. Only by this means will the savings of the people retain
their buying power or "value" from
generation to generation.
3. Appointing the trustees in charge of the Federal Monetary System to
permanent positions until they reach the
age of 70. Their compensation should be substantial and not subject to
being diminished during their term of
service. The law should also provide for severe punitive action in
addition to impeachment for any dereliction of
duty on the part of these trustees or their supervisory officers.
There would also be a provision that no person could qualify as a
trustee if the candidate or any members of his
immediate family held stock or worked for any bank, loan association, or
company which would benefit from the
trustees' decisions and thereby represent a conflict of interest.
4. New United States notes would be issued to replace the Federal
Reserve notes and would be redeemable at the
option of the government in either gold or silver. Congress would
designate the gold and silver reserves required
for domestic currency as well as for transactions in foreign exchange.
5. The Open Market Committee of the Federal Reserve System would be
abolished.
6. No quantities of capital in excess of $5,000 could be taken from the
country without the consent of the Trustees
of the Federal Monetary System.
7. All fractional banking by banks, loan associations and individuals
would be strictly forbidden.
8. Commercial banks and the public bodies of the individual States would
be allowed to borrow funds from the
United States Monetary System at 3% interest, these funds being
allocated to each State according to its
population unless Congress should deem otherwise. In the absence of a
war or emergency, no such loans would
be available unless they could be made within the ratio of balance
required between the money supply and the
GNP.
9. Commercial banks and loan associations would not be allowed to loan
any funds at interest in excess of 10%.
Loans only could be made to the extent of funds borrowed from the
Monetary System or its tangible assets or the
savings of its customers. Each bank would be required to maintain a
dollar for dollar balance on all demand
deposits (check book accounts) and would charge for services rendered in
handling checks, notes or trusts for its
customers. The present Federal Reserve branches would be taken over by
the Federal Monetary System and
would provide clearing house services as at present.
10. Borrowing by the Government would be forbidden. The right to create
additional money for the people would
be achieved by printing United States notes without interest and subject
only to the limits of keeping the money
supply in balance with the GNP. Issuing the people's money without
paying interest and without borrowing
would finally fulfill the formula of the Founders.
11. All commercial banks would be incorporated as entities of the
individual States or territorial possessions.
There would be no Federal banks or national banks. Nevertheless, the
Federal Monetary System would have
supervisory responsibilities over all banks and loan associations to
verify their liquidity and promptly detect any
fractional banking practices or other violations.
Why European Bankers Have Fought the American Founders' Monetary Formula
Europe's fractional bankers have known for years that if Americans ever
made up their minds to adopt the
founding Fathers' original monetary plan , it would force the rest of
the world to abandon fractional banking and
pursue a similar monetary system of sound, honest money.
Right after the Civil War there was considerable talk about reviving
Lincoln's brief experiment with the
Constitutional monetary system. Had not the European money-trust
intervened, it would have no doubt become
an established institution. As Europeans observed renewed interest and
growing support for Lincoln's ideas, the
London Times editorialized as follows:
"If that mischievous financial policy, which had its origin in the North
American Republic during the late war in
that country, should become down to a fixture, then that Government will
furnish its own money without cost. It
will pay off its debts and be without a debt. It will have all the money
necessary to carry on its commerce. It will
become prosperous be yond precedent in the history of the civilized
governments of the world. The brains and
the wealth of all countries will go to North America. That government
must be destroyed or it will destroy every
monarchy on the globe." (emphasis added, quoted by Gertrude Coogan,
Money Creators, p. 217)
Several European leaders recognized Abraham Lincoln as the major
obstacle to the European central banks which
wanted to exploit the resources and wealth of the American people. When
Bismarck, the Chancellor of Germany,
learned of the death of Lincoln, he said:
"The death of Lincoln was a disaster for Christendom. There was no man
in the United States great enough to
wear his boots. ... I fear that forei gn bankers with their craftiness
and tortuous tricks will entirely control the
exuberant riches of America, and use it to systematically corrupt modern
civilization. They will not hesitate to
plunge the whole of Christendom into wars and chaos in order that the
earth should become their inheritance."
(Gertrude Coogan, op. cit., p. 216)
From then until now, the little-known history of American finances
demonstrates the tragic accuracy of that
prediction.
Tremendous Advantages of a Constitutional Monetary System
Because the Founders' original formula for monetary reform has never
been made fully operational, a brief period
of adjustment and fine-tuning would be necessary to bring it up to top
efficiency. However, once it began
operating up to speed, it would no doubt achieve everything which the
European bankers and the London Times
feared it might. Here is what it could accomplish within a short time:
1. Put the authority to issue the people's money back in the hands of
Congress as required by the Constitution.
2. Allow money to be created as needed without borrowing or paying
interest for it.
3. Get the United States completely out of debt.
4. Keep the money supply in balance with the productive quantity of
goods and services so that the buying
power of "value" of the U.S. dollar would remain approximately the same
from generation to generation.
5. Stabilizing the dollar would take the major risk out of putting
savings in the bank, making industrial
investments, buying a home, modernizing America's industry, investing in
research and technology, stabilizing
the stock market, and providing a realistic security for those retiring
on a fixed income.
6. It would prevent inflation. The money supply could not increase above
3% and the monitors would have the
power to pull it back even from this minor amount of dislocation.
7. It would also prevent depressions. Since the money supply would not
be allowed to drop below 3% of the GNP
at any time the trustees would closely monitor the price-index and if it
revealed any tendency toward a slum p, a
new supply of money and credit could be immediately released to make up
the difference.
8. There also would be a tremendous reduction in Federal taxes. The 3% i
nterest paid by commercial banks,
public institutions, and loan associations would go directly into the
United States Treasury. The States could
then retain the needed tax resources to properly fulfill their
Constitutional responsibilities.
9. There would be practically no bankruptcy or collapse of banking
institutions. State-incorporated commercial
banks and loan agencies would no longer be subject to the boom-and-bust
cycle. Nor would they be subject to
the whims of the New York and European money trusts which have forced
tens of thousands of American banks
and loan associations out of existence during the past 200 years.
10. Commercial banks and loan associations could borrow money from the
Federal Monetary System at 3% and
loan it out competitively to the public at a higher interest rate
providing it did not exceed 10%. They would charge
a reasonable fee for servicing check accounts and maintain a
dollar-for-dollar balance for all demand (check book)
deposits so there would never need to be a "run on the bank" to recover
these deposits. Savings, or time
deposits, would also be the basis for loans at interest rates not
exceeding 10% and the Federal Monetary System
would monitor the accounts to make certain that every loan had been
realistically underwritten by substantial
collateral. The banks and loan associations would therefore operate like
any other business and make their profits
from services rendered rather than gambling on fractional reserves and
being required to participate in
boom-and-bust economics which in thousands of cases Wave destroyed the
reputation of banks and forced them
out of existence.
11. The stabilizing of the money supply would go a long way toward
stabilizing over-all prices. No longer would
the farmer find himself paying rapidly inflated prices for equipment,
fertilizer and fuel while his crop prices
remained stagnant. No longer would manufacturers find themselves being
forced to pay highly inflated prices for
raw materials and labor thereby pricing themselves out of the world
market.
12. For similar reasons the new monetary system would also greatly
reduce the likelihood of strikes and
tempestuous labor disputes. 13. A stable economy would greatly
accelerate the velocity of business. However,
studies show that the rapid turnover of money does not need to result in
an inflationary cycle as many had
supposed. It does produce a remarkable increase in goods and services
but as this accurred (sic) the monitors of
the Federal Monetary System would simply create additional mon ey to
keep the monetary supply in balance with
the rising GNP.
14. The London Times was undoubtedly correct when it predicted that the
adoption of such a monetary system
by the United States would rapidly force every nation in the world to
follow suit. This system would proliferate
prosperity all over the world and would help to eliminate abject
poverty, one of the most pernicious causes of
war.
Suggestions for A Monetary Reform Amendment to the Constitution
An amendment to the Constitution would be necessary to permanently
galvanize the Founders' monetary formula
(with a modern adaptation) into the nation's fundamental charter. A
suggested text for such an amendment might
be somewhat as follows:
"The President shall appoint, with the advice and consent of two-thirds
of the House and Senate, five trustees,
including a chairman, to govern the Federal Monetary Fund. These
trustees shall serve until they reach the age of
seventy and shall be compensated in the same amount and subject to the
same safeguards as the Justices of the
Supreme Court. "Except in time of war or other emergency declared by
Congress, the Five Trustees shall be
required, under penalties prescribed by Congress, to maintain the money
supply within 3% of the Gross National
Product based on a monthly calculation. Should war or other emergency
require a more extensive increase in the
money supply, the five Trustees shall be allowed five years after the
emergency has passed to absorb the excess
funds by taxes or other means prescribed by Congress.
"The five trustees are authorized to issue currency or gold or silver
coins or withdraw the same from circulation in
order to maintain the requir ed balance between the money supply and the
GNP (Gross National Product). All
coins shall be issued in terms of their weight rather than a prescribed
dollar value or fraction thereof.
"The five trustees are authorized to loan funds at 3% interest to
state-incorporated banks or loan associations or
grant loans for specific projects to the states, counties, communities
of the United States or its territorial
possessions. Loans shall be allocated to states and territories on the
basis of population unless Congress shall
provide otherwise. "There shall be no Federal banks or national banks.
"Borrowing by the United States Government shall be forbidden.
"All state-incorporated banks or other loaning agencies may make loans
based on savings, fixed assets, or money
procured from the Federal Monetary Fund, but no loans shall be made at
interest rates in excess of 10%.
"The five trustees shall be required, under penalties prescribed by
Congress, to prevent any bank, loan
association or other loaning agency, from engaging in fractional or
reserve banking practices.
"The five trustees shall be required to see that all banks or other
loaning agencies have in their possession a
dollar-for-dollar backing for all demand-payment accounts (checkbook
accounts). Although a bank or loan as
sociation may charge a fee for the servicing of demand-payment accounts,
these funds may not be loaned or
treated as a fixed asset on which loans are made.
"For a reasonable fee, the Federal Monetary Fund will maintain clearing
house services for all bank or loan
associations handling demand-payment accounts. It shall also monitor all
banks and loan associations to verify
their liquidity and promptly detect any fractionalized banking or other
violations of monetary regulations.
"The United States Treasury shall be the national depository for the
storage and distribution of all Government
funds.
"No gold, silver or currency in excess of $5,000 per annum shall be
removed from the United States or her
possessions without the consent of the trustees of the Federal Monetary
Fund.
Monetary Reform Is a Practical Solution to Current Fiscal Problems
A careful review of the provisions outlined above will demonstrate the
realistic possibility of an early solution to
the many fiscal problems presently plaguing the nation. For 200 years
Americans have been wandering away from
a Constitutional monetary policy and have repeatedly paid the penalty
for a variety of experiments in fiscal
futility. These experiments have seriously eroded the dollar, subjected
the people to exploitation and abuse, and
continually threatened the stability of local banking establishments. It
is time for Americans to reconsider the
prophetic warning of Jefferson when he wrote:
"If the American people ever allow private banks to control the issue of
currency, first by inflation, then by
deflation, the banks and corporations that will group up around them
will deprive the people of all property and y
until their children will wake up homeless on the continent their
fathers conquered." (K. S. Kennan, The Federal
Reserve Bank, 1967, p. 234)
Tragically, this is the monetary trap in which the American people
enmeshed themselves, and historically we
would have to say that this was primarily because Alexander Hamilton
thought this was a better way to go.
Hamilton's eloquent and persuasive arguments were grounded on a
completely different set of principles than
Jefferson. Dr. Martin S. Larson, author of The Federal Reserve System,
has presented the philosophical
juxtaposition of these two famous men:
Jefferson wanted a limited general government, confined strictly to
those activities, powers, and expenditures
specifically enumerated in the Constitution; under the general welfare
clause. Hamilton intended to expand those
powers to a point at which the states would be reduced to political
non-entities and the people to endless debt
and tax servitude. Jefferson wanted to pay every penny of the real
national debt in hard currency and liquidate it
as soon as possible; Hamilton wanted to fund the Revolutionary debt at
several times its true value and then to
increase it progressively thereafter. Jefferson wanted a frugal and
simple central government; Hamilton wanted
one that would grow, and tax, and spend to the utmost limits of human
endurance. Jefferson advocated the most
rigid fiscal responsibility; Hamilton wanted a federal government and a
United States bank similar to our present
colossus on the Potomac and the Federal Reserve System which is
headquartered there. Jefferson considered
private banks with the power to issue money, control credit, and
determine interest rates more dangerous than
standing armies; Hamiton's great objective was to establish and
perpetuate just such a financial and monetary
system.
So, for two centuries Hamilton's view largely prevailed and as a result,
the American people now find themselves
in the eye of a monetary hurricane which we are reaping a fiscal
whirlwind of debt, inflation and smothering taxes.
1
--------------79097D4FD47
Content-Type: text/plain; charsetiso-8859-1; name"Fed1982.txt"
Content-Transfer-Encoding: quoted-printable
Content-Disposition: inline; filename"Fed1982.txt"
(THIS IS AN OPTICAL SCAN, SOME ERRORS MIGHT EXIST)
(Copywrite, 1982, by Martin A. Larson)
HOW I FOUND OUT ABOUT THE FEDERAL RESERVE
by Dr. Martin A. Larson
An Address Given at the Freemen Institute Century Club Banquet
on April 28, 1982
Dr. Skousen: It becomes my great pleasure to introduce to you our
speaker for the evening.
For a long time, I have watched Dr. Martin Larson. He writes in
newspapers, magazines, and so forth-Pageant,
Reader's Digest, Fortune-but his great contribution has been in the life
and writings of Thomas Jefferson, and in
his analysis of the Federal Reserve System, on which I consider him to
be one of America's foremost experts.
I was just born the year that the Federal Reserve System was adopted. As
a matter of fact, all kinds of tragic
things happened in 1913. The Titanic sank the year before, but
everything else disastrous happened in 1913.
That's the year we got federal income taxes. The states lost their right
to appoint Senators and had~to have them
popularly elected instead, which unbalanced the whole federal system
back there in Washington, D.C. And that's
the year that we got the Federal Reserve. On top of all that, I was
born.
Dr. Martin Larson has had an illustrious background and career. He
obtain ed his masters and Ph.D. degrees from
the University of Michigan. After teaching a few years, he established
his own business in Detroit in 1935.
Having achieved economic independency, he retired in 1950 to devote the
remainder of his life to research,
writing, and lecturing. He has appeared on countless radio and TV
programs. I have listened to him lecture on
many occasions. We spent the afternoon with him, and I'll tell you it
was a real treat to be able to ask him any
question that came to mind. And so tonight you are going to hear one of
America's foremost authorities on the
Federal Reserve System, and what we can do about it. I wish you would
give a hearty Freemen welcome to Dr.
Martin Larson-age eighty-six at his next birthday.
Dr. Larson: Well, friends, this is somewhat overwhelming; but I thank
you from the bottom of my heart.
I want to say that I consider it an extreme pleasure and an honor to
appear before so distinguished an audience to
discuss what I consider to be the most important single issue that now
faces the American people. I also want to
mention the extraordinary amount of ignorance that exists throughout
most of the population in regard to the
Federal Reserve. I'll just take a moment to mention something that
happened yesterday. I met a professional, and
very successful medical doctor in Phoenix, who probably makes $150,000 a
year. I happened to mention that I
would be going to Salt Lake City to give a talk on the Federal Reserve
System. "What is the Federal Reserve
System?" he said. I asked him, "Have you the slightest understanding of
what we mean when we use the term
'fractional reserve banking'?" "Fractional reserve banking?" he said.
"Well, all I know about money is the
difference between a one and a five dollar bill." He said, "You may know
something about the Federal Reserve,
but I certainly don't pretend to know anything about that." Here is the
story I told him.
How I Became Involved
About eight or nine years ago, a group met in Los Angeles, and they
appointed me as the chairman of a
committee to investigate the Federal Reserve System. They also wanted
the committee to make some suggestions
concerning ways and means to improve our banking and monetary systems.
In the course of time, I began reading
a great many books on the subject. I also spent nearly a month in the
Library of Congress in Washington, D.C.,
reading a great many government documents that are not easily obtainable
in any other library.
However, the deeper 1 went into it, the more I became fascinated by the
whole subject; and the result was that in
1974 1 had produced a manuscript called The Federal Reserve and Our
Manipulated Dollar, which was printed in
1975 by Devon-Adair. At the time, this was the only publishing house in
the United States that would touch a
subject as sensitive and dangerous as the Federal Reserve. In fact, at
that time it was very difficult to obtain an
audience which would even listen to a discussion on the Federal Reserve
question.
The Task of Awakening the American People
I have a friend in Phoenix who has a radio program and has been a
student of monetary problems for quite a
number of years. He used to live in Minneapolis, and he said that to the
best of his knowledge there were less
than ten people in the entire state of Minnesota, including the bankers,
who had even a vestigial understanding
of how the Federal Reserve System operated.
Nevertheless, in the last few months, it seems, there has been a
tremendous upsurge of interest in this question.
About two or three months ago, the Arizona State legislature passed a
resolution calling upon the President and
the Congress of the United States to repeal the Federal Reserve Act and
replace it with a monetary system which
would be Constitutional. Just the day before yesterday, one of the
members of the legislature in the state of
Alabama called me up and told me that the Alabama legislature has passed
a similar resolution. Now in the state
of Washington, both houses have passed a resolution calling upon the
United States Supreme Court to determine
once and for all whether the Federal Reserve Act is unconstitutional,
and, if so, to call for its abolition and
replacement with a monetary system that will meet the requirements of
the Constitution.
Many States Calling for the Abolition of the Federal Reserve
Now there are about fifteen or twenty states in which this matter is
coming up for discussion, and we expect that
before long many of these states will pass resolutions similar to those
that have been passed in Arizona and in
Alabama.
Furthermore, I hope that this will be just the beginning of a tremendous
movement, but it will have to come from
the grass roots. It will have to be from people like you bringing
pressure to bear upon your legislators. They
probably don't know too much about this subject, but it is up to you to
help them and educate them. In Arizona
there is a fellow by the name of D. Lee Jones, who is a member of the
state legislature. I have been putting ideas
into his head for the last five or six years. Consequently, he was the
one who led the movement of the Arizona
legislature to get this resolution passed. Furthermore, the legislature
in Arizona has also passed a resolution
calling for the repeal of the Monetary Control Act of 1980. 1 believe
this is one of the most vicious pieces of
legislation that has ever gone through Congress.
1913-the Year We Lost Constitutional Control of Our Money
First of all, I want to say that I consider the year 1913 as the year of
our great monetary betrayal. That was the
year in which the Federal Reserve Act was passed on the twenty-third of
December and signed by the President
that same night. It was also the year in which the Sixteenth Amendment
was ratified and became a part of the
Constitution. It has been documented that this was also the time when
plans were being made secretly to plunge
this nation into the holocaust of World War I.
Since then, terrible things have been happening to the American people.
You see, the American people had
become so productive and so capable of producing more than is necessary
for a mere living, that it became
possible for ambitious parasites, who were well organized, to begin
taking from the American people the greater
proportion of their produce and just leave enough for the producers to
live on. History will demonstrate that it is
always the objective of every despotic government to take from the
people as much as possible and leave them as
little as possible for their own maintenance. Furthermore, they
deliberately seek, as a matter of policy, to prevent
them from building up any extensive wealth of their own, because that
makes them independent of their political
control. It also discourages them from thinking for themselves and
bringing the government to heel when it goes
beyond its Constitutional authority.
I estimate that the bankers made about $40 billion out of the First
World War, and I estimate that they have made
about $3 trillion in profits out of the Second World War. Now you know
why they're so anxious to have these
wars and to build up these enormous debts.
Why the Federal Reserve Is Unconstitutional
The Federal Reserve Act is absolutely unconstitutional, as anyone can
see by examining the Constitution itself.
The Congress is mandated by Article 1, section 8, paragraph 5 of the
Constitution to "coin money [and to]
regulate the value thereof." Section 10, paragraph 1 of Article 1
declares that "no state shall... make anything but
gold and silver coin a tender in payment of debts." In other words, any
money that is not issued and controlled
by the United States government, and any money that is not redeemable a
gold or silver or does not consist of
coins in gold or silver, is unconstitutional money.
How Private Financiers Took Over the American Monetary System
When the Federal Reserve Act was passed, Congress delegated to a
consortium of private financiers, gigantic
powers that almost surpass comprehension. Since the adoption of the
Federal Reserve Act, this group of private
financiers can get together and issue our money. Just look at any
Federal Reserve note and see who has issued it.
Is it issued by the Treasury? No It is an obligation of the United
States government; but it is not issued by the
United States government. It is issued by one of the twelve branch banks
of the Federal Reserve System. There
are twelve of these, and each one of them has the power to issue
currency, and can do so in any quantity that it
desires.
The Power to Set Interest Rates
This Federal Reserve System can set interest rates. Its board of
governors could set the interest rate at 40 percent
if it wanted to, at 50 percent if it wanted to, or it could reduce
interest rates to 1 percent if it wanted to. The Federal
Reserve can create inflation or deflation at will. It can determine the
money supply, and so they have acquired, by
these methods, com plete control over the American economy. And 1 can
assure you that under this kind of
system the President of the United States and the members of the United
States Congress, by and large, become
the servants of those who control the monetary system. This is not only
true of the United States, but the same
situation exists in every nation of the Western world. England has the
privately controlled Bank of England,
Germany has the privately controlled Reichsbank, France has the
privately controlled Banque de France. The
Bank of Italy is very similar. Every one of these banking systems was
set up by government action, but every one
of them is operated by a group of private financiers for their own
benefit and profit.
Thus, one of the principle powers that was mandated to the United States
Congress has been given away to
private concerns in violation of the Constitution. Now Congress had no
more right to convey that power to a
private organization than it would have to give a private group the
power to collect taxes or to raise an army and
wage war.
In addition to these unconstitutional activities, the federal government
has now assumed a thousand different
programs that not only lack any Constitutional authority, but are
categorically prohibited by the Constitution.
The American people therefore find themselves under a powerful despotism
which has merged us into a socialist
type of welfare state. This is what has been happening while the people
have been sleeping and did not fully
realize what has been going on.
Who Has Gained from All This?
Now as I said a moment ago, the privately controlled Federal Reserve
System can create inflation or deflation,
panics or depressions, at will. The financiers are also the ones who
have financed one war after another, which
resulted in the government acquiring enormous debts on which these
financiers reap tremendous profits from
interest on these debts. The greater the debts, the greater their
profits.
I estimate that at the present time, the productive American people are
paying at least 60 percent of all the wealth
they produce in order to pay interest on the national debt and subsidies
for government programs. This is
outrageous. The people should not be forced to pay more than 5 percent
of their gross income for the support of
the central government, and they would never have had to pay any more
than that
3 if the Congress had restricted itself to its Constitutional mandates.
And so, by engaging in one war after
another and by becoming a welfare state, the federal government and the
private financiers have become greater
and more powerful. The government has built a vast bureaucracy which
assumes for itself more and more
activities and takes more taxes from the people to a greater and greater
extent all the time.
How the Federal Reserve Creates Money
I want to say a few words about how the Federal Reserve System creates
money. It issues fiat notes, which means
Federal Reserve notes cannot be redeemed in gold or silver. The Federal
Reserve can print any number of these
notes it desires. Any member, any branch bank of the Federal Reserve
System, can order any number of notes
printed, and the Bureau of Engraving and Printing of the federal
government will print these notes and hand them
to the branch bank of the Federal Reserve System. They could print
enough of these notes next week, if they
wanted to, to pay off the national debt. But I can assure you that they
are not going to do anything of the kind,
because they don't want to pay off the national debt. They want to
increase it. A major source of profit is interest
on the national debt.
So let me repeat what I said earlier: the Federal Reserve can create
inflation, deflation, panics, or depressions at
will. It is completely independent of Congress.
Could the Federal Reserve Be Abolished?
Of course, Congress has the power to repeal the Federal Reserve Act any
day that it wants to. Congress can
amend it or abolish it. But very few Congressmen have dared to undertake
it. The vested interests of these
financiers is very powerful in Washington, D.C.
For example, a number of years ago, Jerry Voorhis introduced a bill-I
think it was in 1945-to abolish the Federal
Reserve System and to replace it with what he called a Constitutional
system of money. He told me himself what
happened. He brought a copy of the bill to Franklin Delano Roosevelt,
who seemed to think that it was a
wonderful thing. But after the Presi dent showed that bill to his Wall
Street supporters in New York, he suddenly
lost all interest this bill, and it wasn't very long before Richard
Milhous Nixon replaced Jerry Voorhis as a member
of the United States Congress.
A number of years later, John L. Rarick of Louisiana introduced a bill
to abolish the Federal Reserve System, but it
didn't take very long before he was put out of business and he was no
longer a member of Congress. In other
words, in the past it has been a matter of suicide for any national
Congressman even to suggest the abolition of
the Federal Reserve Act.
Why There Is a Better Chance to Abolish the Fed Now
But now that this movement is becoming so strong and is spreading to
practically every level of the American
population, I don't think that the Federal Reserve people are able to
punish anyone as they have in the past. After
all, they can get rid of one occasional Congressman, but they can't get
rid of all the state legislatures. Our greatest
support will come from the states. That is where we will find the power
to change the federal government. It must
be done by grass roots organizations rising everywhere.
Now the Freemen Institute is one wonderful group, but remember that
there are organizations, more or less similar
to this, that are rising in all parts of the United States. A fellow in
Los Angeles has developed a group that he
calls "Your Heritage Protection Organization" that now has twenty
thousand members in southern California
alone. All of them are dedicate d to the abolition of the Internal
Revenue Service and the repeal of the Federal
Reserve Act.
There are organizations similar to this that have sprung up in
Wisconsin, in North Carolina, in South Carolina, in
Alabama, and in Texas. All over the country there are movements being
organized and meetings going on. People
are becoming informed and interested as they never have been before
The Triple Threat-Inflation, Taxes, and High Interest Rates
You see, this inflation and these taxes are beginning to eat away at
people's pocketbooks. I addressed a group of
about two thousand people in Detroit two years ago. Something like
130,000 automobile workers had lost their
jobs because people can no longer afford to buy automobiles. Interest
rates are too high.
The entire construction industry is almost without activity at the
present time. Who on earth can afford to build a
house and pay 15 or 18 percent interest for a period of twenty or thirty
years? This is impossible. And that is why
people are beginning to pay attention. When you hit them in the
pocketbook, that's when they are going to
respond. They will accept almost any other kind of tyranny, but if you
take away their bread and butter, by means
of which they feed their children or maintain the living standards which
they have had in the past, they are going
to begin asking questions. And when they get information, they are going
to be ready to rebel.
Managers of the Federal Reserve Have a Vested Interest in Wars
The Federal Reserve System has greatly profited from one war after
another. Each war creates enormous debts,
and because of these debts the banker s are collecting tremendous
amounts of interest from the American people.
At the present time it costs the federal government approximately $100
billion a year just to pay the interest on the
national debt. And if we continue to have a deficit of another $100
billion every year, then there's going to be
another $10 or $15 billion of interest to pay. At this rate you can see
that the interest on the national debt is soon
going to be $200 or $300 billion a year. With such a burden it becomes
impossible to survive. That's why I think
the American people are gradually waking up. This economic debacle must
come to an end.
The Federal Reserve and World War I
Now, let me say a few words about the known history of the Federal
Reserve System. It was first passed in 1913
and became operative soon after. The first thing it did was to act as
the treasurer and the bankroller for the First
World War. The Federal Reserve Banks sold the American people about $30
billion worth of government bonds.
They made a good profit on all of these sales.
In addition to that, the Internal Revenue Service had become
established, so they collected another $25 or $30
billion from the American people to help pay for the interest and some
of the principal on these bonds. And most
of these profits coming from taxes went into the hands, or the pockets,
of the intern-international banking
community of which the Fed was a part.
Two Man-Made Depressions
At the end of the war, we had inflation for a couple of years. I
remember it very well. I was a student at Kalamazoo
College at the time. Prices kept going up and up but money was
plentiful. Many farmers and other small -business
men were borrowing money in order to make improvements in their estates.
Then the Federal Reserve called its
loans and they had the depression of 1920 to 1921, in which something
like 600,000 or 700,000 farmer s lost their
property as a result of the sudden change in policy by the Federal
Reserve.
Then the Federal Reserve permitted some prosperity for about seven or
eight years, between 1922 and 1929.
Between 1926 and 1929, they promoted the sale of stocks on margin. And
the result was that the stock market
zoomed up to something like 480 in the Dow Jones average. Then they
called for a contraction. They called in
their loans. The stock market almost immediately collapsed and we had a
depression of such catastrophic
consequences that there had never been anything like it in the history
of modern civilization.
I remember it very well. I was working for the Prudential Insurance
Company in Detroit in 1928 and 1929. When
the Depression struck in the fall of 1929, all the automobile factories
in Detroit closed down. Men were on the
streets. I would say that 80 percent of the entire population of Detroit
was unemployed. A house that had been
built for about five or six thousand dollars during the twenties could
be purchased for a few hundred dollars, if
anybody had a few hundred dollars to buy it. Money became so scarce that
it almost ceased to exist.
>From Depression to War
This depression went on for about eleven years, and it was managed
entire ly by the Federal Reserve System.
They could have ended that depression any time that they had
wished-within a month, if they had wanted to.
And why didn't they want to? It turned out that they were preparing the
United States for entry into the greatest
war that had ever occurred, and they planned that after the war they
would establish the greatest central
government that had ever existed upon the face of this globe. And that's
what the United Nations started out to
be.
5 FDR Firmly Supported Federal Reserve Policies
When Franklin D. Roosevelt went into office in 1933 he followed the
desires of the bankers, just as Woodrow
Wilson had done before him back in 1913 when he promised in his campaign
speech to get the Federal Reserve
Act passed.
How the Federal Reserve Secured America's Gold Without Paying a Penny
One of the first things that Roosevelt did I remember it very well-was
to close all the banks. Then he got the Gold
Reserve Act passed in 1934, under which the United States government
gave the Federal Reserve System all the
gold that was in Fort Knox. They gave it to them as an outright gift.
They didn't even ask for a receipt in return for
the gold.
This was at a time when gold could be produced for about $12 an ounce.
Americans who owned gold were told,
under penalty of felony, that they had to turn in all their gold coins
to the United States government or to the
Federal Reserve System. All they received in return for their gold was
Federal Reserve notes at around $22 for
every ounce of gold. Then President Roosevelt got an act passed by
Congress raising the price of gold bullion to
$35 an ounce. 1 can tell you, however, that a good many Americans were
smart enough not to turn in their gold
coins at $22 an ounce, but melted them into bullion and got $35 an ounce
for it.
How International Financiers Made Billions in Gold Manipulations It is
rather amazing that between 1934 and 1941
the Federal Reserve System was buying gold from all over the world at
$35 an ounce, when it was only worth
about $12. The amount of gold in the Federal Reserve System increased
from $3 billion to about $23 or $24 billion
during that period, at the expense of the taxpayer. Meanwhile, these
foreigners, bankers who had previously
bought their gold for as little as $10 or $12 an ounce, sold it to the
American Federal Reserve System for $35. They
must have made a nice little profit of $15 or $20 billion during those
years by the sale of gold to the American
Federal Reserve System.
After World War II was over, inflation began to take hold. Soon gold was
worth far more than $35 an ounce.
Gradually, between 1955 and 1972, it we nt up, and up, and up, so that
by 1969,or somewhere along in there, gold
was worth about $125 or $150 an ounce, and then the foreign bankers
bought the American gold at $35 an ounce.
As of 1954, the Federal Reserve System owned about twenty-eight thousand
to ns of gold in Fort Knox-worth
something like $30 billion at $35 an ounce. Now, between 1955 and 1972,
this gold was sold to foreign investors at
$35 an ounce. Today it is worth several hundred billion dollars. As it
was sold, the gold was taken out of Fort
Knox and placed in the vaults of the New York Branch of the Federal
Reserve System. So far as 1 know, it lies
there at this date and is stored there for its foreign owners at the
expense of the American taxpayers.
Tax Advantages Given Foreign Investors
These foreigners can sell this gold at any time they wish, and there
will be no income tax on their profits! It is not
even necessary to reveal the names of those who now own what was once
the wealth of the American people.
Read Section 895 of the Internal Revenue Code, and you will find the
loopholes for foreign investors spelled out
in so many words. If you want to know who controls the nation's money
system, just study these monetary laws
along with the provisions of the Internal Revenue Code. You will soon
find out who really owns and controls this
nation's monetary system.
Is the Federal Reserve Under U.S. Government Management?
What, then, is the Federal Reserve System? I meet people all the time
who believe implicitly and profoundly that
the Federal Reserve is a part of the United States government. But such
is not the case. It was set up by
government authority under a law passed by Congress, but it consists of
a consortium of private financiers and
bankers. It might be called a pseudogovernment institution operated by
private financiers for private profit. There
are similar banks in all the great countries of the Western world, and
those in charge of these banks cooperate
together and run their banks in tandem. They are one big, international
conglomerate of power. They manage to
make fabulous profits no matter what happens. Their influence in the
economic and political life of each of these
nations is paramount.
Two Hundred Years of Banking Problems
Let us go back a little in American history.
In spite of everything that was done by Thomas Jefferson and other great
leaders of our Founding
Fathers-including James Madison, Benjamin Franklin, and others-they were
never completely able to defeat the
bankers once they got into power. Under the leadership of Alexander
Hamilton, the first United States Bank was
established in 1791, with a life of twenty years Now, at the end of the
twenty years, James Madison was
President, and he vetoed a bill to renew the franchise of the bank, so
there was no United States Bank between
1811 and 1816.
Nevertheless, all of the debts that had been created during the second
war with England [War of 1812], enough
pressure was brought to bear upon Madison that he finally felt compelled
to accept the establishment of the
second United States Bank in 1816. This bank was also given a life of
twenty years. When the Congress tried to
extend the life of this bank in 1832, it was vetoed by Andrew Jackson.
So between 1836 and 1863 there was no
national bank.
Abraham Lincoln's "Greenbacks"
At the beginning of Civil War, when Abraham Lincoln was desperately
anxious to raise money, the bankers
offered to loan him money at 28 percent interest.
I have always been convinced that he was assassinated because of the
enmity of the bankers against him. Well,
anyhow, he issued $450 million in "greenbacks" without paying any
interest to the banks, and this did a great
deal to help finance the war. These "greenbacks" were simply government
notes issued by the United States
Treasury. They added to the national debt but they did not require the
payment of any interest, so this saved the
taxpayers many millions of dollars.
Eventually, however, the bankers were able to get a law through Congress
declaring these "greenbacks" not to be
legal tender for the payment of import or export duties, nor for the
payment of taxes, nor for the payment of
interest on the national debt.
This resulted in the "greenbacks" losing their value and dropping to
about thirty cents on a dollar. The bankers,
then, were able to buy these "greenbacks" at thirty cents on the market
and use them at par value to buy
government bonds worth several billion dollars. The Congress was then
induced to pass the National Banking
Act of 1863, which allowed the banks to issue their own currency up to
90 percent of the amount of the United
States bonds that they had in their vaults. Most of these were purchased
at thirty cents on the dollar, so they
made their 28 percent all right, and a lot more besides. The tendency of
the banks to exploit our country in time of
war is one of the cruel facts of history.
The Gold Standard
In 1873 the government went from the silver to the gold standard. The
official unit of currency became a gold coin
containing 25.8 grains of standard gold. We operated under that gold
standard from 1873 to 1933, and the se were
years, for the most part, of great prosperity. Nevertheless, the
policies of the banks did cause a number of very,
very severe panics, especially in 1873, 1893, and 1907. But that was
because the bankers simply closed their doors
and shut down the credit. During these depressions, there was a
tremendous amount of unemployment and a
great many people suffered very seriously. However, as a whole, the
country was prosperous Prices kept
dropping at the rate of about 1 percent per year between 1873 and 1900.
Industry flourished, and the development
of the West proceeded at a tremendous pace.
Reduction of the National Debt Alarms Wall Street
By 1900, most of the national debt had been paid off, and the result was
that the bankers did not have enough
government bonds to use as a basis for the issuance of their own
currency. So they became desperately anxious
to establish in the United States, a monetary system very similar to the
privately owned Bank of England and
similar banks that existed in most of the European countries.
But that was not an easy thing to accomplish because by this time the
people in the nation had become very
suspicious of the operations of Wall Street, and they were very hostile
to the machinations of the money
manipulators. Nevertheless, they were finally able to succeed in getting
this kind of a banking system established,
but only after a series of deceitful maneuvers that are without parallel
in the history of the American nation. Here
is what happened to eventually bring the Federal Reserve System i nto
existence.
Paul M. Warburg
In 1902, a man by the name of Paul Moritz Warburg came to the United
States from Germany. He was a member of
the great Warburg family of financier s who were closely allied with the
Rothschilds, who operated banks in
France and in England. It was later disclosed that it was Rothschild
money which financed Mr. Warburg when he
came to the United States and for $500,000 he bought a partnership in
Kuhn, Loeb, and Company, a great financial
concern in New York City. Then he was given a salary of $500,000 a year.
That's a very nice salary, especially
when there was no income tax. And what was his duty? His duty was to go
up and down the United States
promoting the idea of a great central bank that would solve all the
econom ic problems of the United States
forever. He promised that if Congress would pass a bill setting up the
kind of a bank Mr. Warburg was promoting,
there would never again be any such thing as a depression; there would
never again be any such thing as
inflation or deflation; there would always be enough money to carry on
business; and credit would be available
for all necessary and desirable purposes throughout the United States.
Mr. Warburg was a very persuasive
fellow, and he developed a good many friends who liked his ideas,
especially many of the leading bankers on
Wall Street. But he also developed a great many enemies who did not
believe all of his promises.
The Initial Effort to Draft a Bill for an American Central Bank
The banking plan which eventually became the Federal Reserve System was
put together by a group of financiers
who assembled on Jekyll Island, just off of the coast of Georgia, in the
fall of 1910. These bankers met there in the
greatest secrecy. Warburg was one of them. Senator Nelson Aldrich of
Rhode Island was another. There were
also representatives from all the great banking concerns in New York
City. This group gradually hammered out
the kind of bill that they wanted. Senator Aldrich then introduced this
bill into Congress. However, he wasn't
clever enough to make it look like a government institution. Warburg had
told them that if they wanted to get this
bill passed they would have to make the people believe that the new
banking system would be a government
institution independent of Wall Street. Otherwise, it would never get
passed into law.
This turned out to be true. The Aldrich Bill was rejected. The bankers
had to find someone who would convince
Americans that the new banking system would operate under the control of
the government and not Wall Street.
They needed a special kind of political leader to do this. Woodrow
Wilson, the Persuader
So up in New Jersey they found exactly the man they wanted. His name was
Woodrow Wilson. He had
previously been president of Princeton University and was then the
governor of New Jersey. He was one of the
most persuasive and, as it turned out, probably one of the most
hypocritical politician s on the national scene.
What history has established is the fact that Woodrow Wilson went up and
down the United States assailing the
Wall Street bankers right at the time they were paying his campaign
expenses. He accused the bankers of every
crime in the world. He said he was opposed to t hem, and that it would
be his objective in office to prevent them
from ever getting any of their kind of legislation passed.
It was all part of the political strategy to make Woodrow Wilson
President. His backers encouraged him to tell the
people what they wanted to hear.
Of course, at that time the Republican party was the majority party in
the United States, so the bankers realized
that they had to do something to reduce the amount of votes that would
go to the Republican candidate, William
Howard Taft. Therefore, they induced Teddy Roosevelt, who was also a
Republican, to organize the Bull Moose
party in 1912. 1 can remember very well seeing headlines in the
newspapers at that time about how the w onderful
trustbuster, Teddy Roosevelt, had organized the Bull Moose party in
order to bring about a conservative
government for the United States. But what Teddy Roosevelt did was to
split the Republican vote so that
Woodrow Wilson was able to get elected by 42 percent of the popular vote
in 1912.
The Federal Reserve Act Is Passed
Once Woodrow Wilson got into office, he had to operate very carefully,
pretending that he was opposed to
anything that was wanted by the bankers, but all the time working with
them.
Congressman Carter Glass introduced the Federal Reserve Act, but he
later wrote that the mastermind of the
whole performance was Woodrow Wilson. Eventually the Federal Reserve Act
was passed on December 23, 1913.
They got a man by the name of Henry Parker Willis, who was a professor
at the University of Chicago, to prepare
a text of the proposed law. It went through four or five revisions and
was then shown to William Jennings Bryan.
He named four changes that would be necessary.
When President Wilson saw the proposed changes he accepted them because
they were all nonsubstantive.
President Wilson told Congressman Glass the se changes would help make
the people think that the Federal
Reserve was indeed a government institution, whereas it actually
remained as much a private organization as it
was before. So that is the way the Federal Reserve Act was finally
passed.
Original Sponsors Turn Against the Federal Reserve
As I studied the history of the Federal Reserve, it was amazing to
discover how many sponsors of the Fed turned
against it when they saw it in operation. Take for example Professor
Willis, who wrote the first draft. Ten years
after the Fed began operating, he was still praising it to the skies;
but six years after that, he turned bitterly
against it and began condemning it in a series of articles that were
published in several national magazines.
Now, Senator Robert L. Owen, who was the chairman of the Senate Finance
Committee, thought the Fed was a
perfectly wonderful thing in the beginning. He also wrote a book
praising it. But in 1934 he wrote another book in
which he said that it was the most disastrous thing that had ever
happened to the United States.
Even William Jennings Bryan found out what a terrible thing he had done
when he endorsed the final version of
the Federal Reserve Act. I have always wondered whether William Jennings
Bryan was actually deceived, or
whether it was political pressure which caused him to support the
Federal Reserve Act. One thing is certain-without his approval it could never have been passed.
When Bryan asked Wilson to make four changes, the bankers pretended that they were absolutely opposed to it. So when members of Congress heard the bankers express their strong opposition, most of them decided that it must be a very good thing.
In the meantime, of course, Paul Moritz Warburg and his friends were just laughing their heads off behind the scenes. What a wonderful thing they had accomplished! By saying they didn't want it done at all, they got Congress to do it.
I read a letter that Warburg wrote to Carter Glass at the time, admitting what a wonderful ploy this was to pretend that they were opposed to the act when this was the only means of getting it passed in the first place.
Who Belongs to the Federal Reserve?
As I said before, the Federal Reserve System consists of twelve branch banks, but the New York Branch is the principal one. Every national bank must be a member of the Federal Reserve System. State charter banks can become members if they meet certain qualifications. And there are now something like fifty-eight hundred banks that belong to it, of which about forty-five hundred are national banks.
Every member bank must contribute, or must buy stock equal to 3 percent of its capital in surplus. And all the member banks in the United States have invested approximately $1 billion in the entire Federal Reserve System.
Now, so far as I know, that is the only investment made by any private source anywhere in the Federal Reserve System. The Federal Reserve System is not established for the purpose of making profit for the Federal Reserve itself. The system is established for the purpose of making profits for the member banks that belong to the system. And they do this primarily by the system of fractional reserve banking, concerning which I promised to say a few words a while ago.
The Assets of the Federal Reserve
The assets of the Federal Reserve System amounted to about $171 billion,
as of December 31, 1980. That is the
date of the latest annual report presently available. Of that $171
billion, $130 billion consisted of federal securities,
which they have in their vaults. They have about $8 billion in what they
call miscellaneous investments, including
real estate a nd some other things. They also have gold valued at $11.2
billion, rated at $42.24 an ounce. But if that
gold were to be valued at the present market value, its value would be
about $130 billion. I presume that at the
present time, all of the actual assets of the Federal Reserve System are
probably worth at least $200 billion,
possibly more.
Now you can see what Americans could do to improve our whole monetary
system. Congress could repeal the
Federal Reserve Act and get back all the assets of the Federal Reserve
System by simply paying off the stocks
owned by the member banks, which are worth approximately $1 billion. I
would consider that a very, very good
bargain. Congress could do it immediately. It could abolish the Federal
Reserve System and replace it with a
monetary system that would be Constitutional and would go back to the
provisions originally intended by our
Founding Fathers.
The Open Market Committee
1 want to say a few words about what is known as the Open Market
Committee. The Open Market Committee
operates only through the New York Branch of the Federal Reserve System.
The Open Market Committee buys
and sells government securities in the open market. They pay for these
either by writing a check against the
Treasury or by printing more Federal Reserve notes They can print any
number of Federal Reserve notes of any
denomination that they please.
In 1933 there were about $3 billion of Federal Reserve notes in
existence By 1941 there were about $5 billion in
Federal Reserve notes. By 1960 they had increased to about $60 billion.
At the end of 1980 there were $124 billion
of Federal Reserve notes in existence.
It is through this committee that the Fed uses its power to control the
American money supply and the interest
rates. Neither the President nor the Congress can control the money
making power which was given to the
Federal Reserve in the act of 1913.
Fractional Banking
I want to say a few words also about the operation of the fractional
reserve system. How do the member banks of
the system make most of their money? They make most of their money by
operating what is known as a fractional
reserve money lending system. This is controlled by the Federal Reserve
Board, which consists of seven
members who are appointed by the President and confirmed by the Senate.
They are appointed for a period of
fourteen years. These seven men have the power to set what is known as
the reserve requirements for the banks,
and they can fix the reserve requirement at any amount they please.
Now, if reserve requirements for the creation of credit are set at ten,
then these banks can create credit on their
books equal to ten times the amount of the bonds which they have in
their vaults. This permits them to make
enormous profits.
It is also important to remember that the member banks obtain their
supply of Federal Reserve notes absolutely
free. They can also obtain government bonds printed by the Treasury
absolutely free. This is because they are
allowed to pay for these bonds with checks written against the value of
the bonds themselves.
Most people can't understand how this could be allowed. It seems
impossible, but nevertheless, this is the way it
operates. In fact, this is how the Federal Reserve System makes about
$300 or $400 billion profit for the member
banks in the United States every year.
Suppose a member bank has $1 million of government bonds in its vaults.
It obtained these bonds for nothing, as
previously mentioned. It collects 8, or 10, or 12 percent interest on
the bonds, which is paid by the American
taxpayers. Then it can create credit on its books equal to ten times, or
more, of the amount of these bonds.
Do you follow me? It is the greatest profit producing machine that was
ever conceived by the mind of man.
What This Does to the Average American
Suppose you are building a house. We'll say it is going to cost $100,000
to complete this house. You have
$20,000, so you buy the lot and you engage an architect and you start
building your domicile. Then you go to
your friendly banker and say that it's going to take another $80,000 in
order to complete this building. Well, if he
has credit available, he will examine your application very carefully,
and if he finds that the house is going to be
worth at least $100,000 when it is finished, he will take a first
mortgage on it. And then he will give you credit on
the books of the bank equal to approximately $80,000.
Of course, he takes out a couple of points, you understand. He isn't
going to let you write checks equal to a
whole $80,000-maybe $76,000 or $77, 000.
As the building proceeds, you pay off the contractors with checks
written against this account. Now remember
that this banker has not lent you a penny. He has created credit on his
books equal to $80,000. The collateral to
guarantee this loan, if you want to call it that, is your house, which
you are building.
Now, you are going to borrow this money, or borrow this credit, and you
get a thirty-year mortgage at perhaps 15
percent interest, and by the time you pay off that mortgage you will
have repaid that banker not $80,000, but
probably $250,000. In other words, you will be spending the next
twenty-five or thirty years of your life paying
interest on this loan created out of thin air.Wonderful!
It is an operation that staggers the imagination, and yet this is a n
operation by means of which the member banks
of the Federal Reserve System are able to obtain mortgages on most of
the real estate in the United States and
compel the people who are producing the wealth of the nation to turn
over the bulk of all the value of which they
create to these bank ers in order to pay off their loan.
This is the way it operates. This is the technique by which they become
wealthy to a degree that is simply
impossible for ordinary people to under stand. When I tell this to most
people, they just don't believe it. They
don't think that a thing like this could actually happen. But it does.
It 's the routine procedure; it happens all the
time.
The New Awakening
1 have been talking about this for a good many years, and gradually
people all over the country are beginning to
understand. And they are beginning to get so angry that they are ready
to do something about it. There are
thousands of people who are organizing to bring pressure upon the state
legislatures to pass resolutions, like the
ones that I described at the beginning of my talk.
Somebody asked me today, "What should be the next step?" One of the next
steps should be for all the people
here to bring pressure to bear upon some of the members of your state
legislature to pass a resolution like the
ones that were passed in Alabama, and in Arizona. Get thirty or forty
states to pass resolutions of that sort, and if
necessary, have them enact laws that will compel the United States
Congress to do something about monetary
reform. 1 tell you that if we don't get this reform, this nation will
suffer some tremendous difficulties in the near
future.
We Must Organize a United Front
I have been talking for years about these things. For a long time very
few people listened, but I have discovered
over the years that generally something which I have said begins getting
some attention about ten years later.
That means we have to continue teaching that which we know to be true.
Now we need to organize and unite
those who do some thinking for themselves, especially the members of
what I call the middle class-the people
who are self-employed, the people who have little businesses, the
professionals. There is where the power is if we
unite.
You know, there are millions of these people in the United States. There are about thirteen million that are called "proprietors," according to the Internal Revenue Code. In addition to that, we have hundreds of thousands of professionals-doctors, architects, dentists, lawyers, and so on. We have five or six million salesmen and consultants in the United States. We have three million farmers, and six million small property owners Why, if all these people get together and organize to accomplish a single objective, they could control every legislature in the nation, and they could control the United States Congress. This is what I'm looking forward to. If that can be done, believe me, we will have recovered our nation, and we will have reestablished it upon the basis which our Founding Fathers gave us.
Three Specific Suggestions
For years I have been advocating at least three things. I have been saying, first of all, that we have got to abolish the Internal Revenue Service , which exists not primarily to collect taxes, but in order to control the people. It is filled with loopholes and allowances for the rich and the favored, and is filled with traps and snares to destroy the unwary, or the hard-working small-business man.
I have known people who have made millions of dollars but pay no income tax. For example, David Rockefeller testified before a Congressional committee.
"You know, gentlemen," he said, "that I do not owe any personal income tax. But nevertheless, I send a small check, now and then, to the Internal Revenue Service out of the kindness of my heart."
What a philanthropist!
Here is a man who makes probably $100 million in personal income each year, but the loopholes in the law say he doesn't owe any income tax.
And yet, here is the small-business man who works ten or twelve hours a d ay, and he finds out that he is caught in some trap, and he owes more money than he has made all year. These IRS agents go to work on little people and often destroy them. And if there are some publications they don't like, there are teeth in the law, which are both arbitrary and vindictive. They allow the IRS to jump on them and destroy them, no matter how honest they are.
What if we did away with the IRS? People have asked me thousands of times , "Suppose they were to do away with the Internal Revenue Code and the In ternal Revenue Service-how would the government be able to operate?" I have simply replied that if we were to establish a 5 percent general transactions tax, it would produce, without any IRS, approximately the same amount of income for the federal government that the income tax now produces, and at a cost of less than one third of what it costs under the present system.
So I want to see the abolition of the Internal Revenue Code. You know, when Jefferson became President, the first thing he did was to abolish the Department of Internal Revenue. He fired all the collectors of internal revenue. He cut the taxes by 50 percent, and he paid off half of the national debt in eight years. The same thing could be done now with the same kind of statesmanship.
The second thing that must be done is to abolish the Federal Reserve
System and restore a Constitutional monetary system. We have already discussed how that can be :done.
A Retirement Program to Replace Social Security
The third thing that should be done, in my opinion, is to replace the Social Security system. It is getting in greater and greater trouble all the time. People should be putting their money in what 1 call the "Universal Trust Plan."
Under such a plan, tens of millions of families would be building estates for themselves, and would receive interest on money which they had saved throughout their lives.
Do you know that if a man invests $125 a month in a savings account at 8 percent, at the end of forty years he will have a fortune of $475,000? He can then retire and draw about $2,500 a month for the rest of his life without touching the principal. And if he wanted to use up the principal during his retirement, he could be getting about $4,000 or $5,000 a month for his full life expectancy. It would not cost the younger generation one thin dime to support the older people. Did you ever stop to think about what would happen to this country if we found some cure for cancer and for heart failure? The old people would live to be older than I am. How in the name of common sense could young people produce enough money to support all us senior citizens lasting from eighty-five to ninety-five years of age? It would be a hardship But under the system such as I have been advocating for many years, the old people would be a wonderful treasure. They wouldn't cost the young people anything. Instead of paying all this money to the bankers, this interest would be going to about forty or fifty million people who have retired on annuity accounts which they have produced by their own savings.
I say that this would be a good start to reestablish Constitutional government in the United States. Every red blooded American patriot ought to dedicate his life to the accomplishment of objectives of this kind. You people right here are forming a strong nucleus to help accomplish that objective.
Back to Top
|
|
