Financial History of the United States
by Dewey, 12th Ed. 1934,
p. 36 et. seq.
"At last the continental bills became of so little value, that they
ceased to circulate; and in the course of the year 1780, they
quietly died in the hands of their possessors. Thus were redeemed the
solemn pledges of the national government. Thus was a
paper currency which was declared to be equal to gold and silver
suffered to perish in the hands of persons compelled to take
it, and the very enormity of the wrong made the ground of an abandonment
of every attempt to redress it."
3 Story 224
Someone once said, "It is for those who do not learn from history that
history must repeat itself."
The history of the "Federal Reserve Notes" closely resembles that of the
continental Currency ... except that the Currency
today is the product of a private corporation, and that corporation, not
the government, derived value from its issue and
creation. The government receives the cost of printing only, which is
less than one cent for each note, and the banks receive the
full face value of the note as it loans that note into circulation.
The Federal Reserve banks have placed themselves in jeopardy of total
collapse. Their "Note" is worthless abroad and rapidly
declining at home. It is perhaps the only opportunity we shall have in
the next sixty years to escape total enslavement by
allowing the Currency to collapse. It will harm no one; the Federal
government would be let out of a 465 billion dollar debt and
the American consumers would be let out of a 3 trillion dollar debt all
owed to these banks; but our government will not allow
this to happen. The government will treat the bank paper ("Money") as
their obligation and enslave its own citizens in a feeble
attempt to maintain this insane system of finance. It is the
government's own fault that its citizens are enslaved to the Federal
Reserve banks.
As stated before in this summary, it is the obligation of Congress to
pay the money into circulation so that it can be paid back to
Congress in the form and name of taxes and subsequently reissued and
paid into circulation by Congress each year; thus
maintaining a stable economy inflation and depreciation free. But; when
Congress must pay a portion of the taxes to a private
bank as interest, that much less money may be paid into circulation and
a depression must follow. To make up the difference;
one of the two things must happen:
1.Either someone has to borrow money from the banks to maintain the
economy and in so doing, the interest charges would
necessarily force up the cost of the commodities and services or
2.The government must formulate a deficit budget at least equal to
the interest paid to the bank in order to maintain a stable
economy. ...
But when both of these occur; as has been prevalent in the fractional
reserve banking system from its inception, the government
must maintain a deficit equal to the interest paid to the banks by
itself and by all interest paid throughout the nation less normal
bank overhead. Upon the failure of Congress to maintain such a budget,
we can expect to see more unemployment and a total
economic standstill.
This is perhaps the most ideal of times for us to walk out from under
this heave burden that we have been forced to bear. ...
It really amounts to who is guilty of issuing unlawful paper "money."
That party; and that party only, is responsible for its
consequences.
There is no doubt that the "Notes" issued are "bills of credit" in a
legal sense; however, the "Bank Notes" are "bills of debt"
economically. The question is: Whose "bills of credit" are the "Federal
Reserve Notes"?
"To "emit bills of credit" conveys to the mind the idea of issuing
paper intended to circulate through the community for its
ordinary purposes as money, which paper is redeemable at a future day.
This is the sense in which the terms have been always
understood."
Craig v. Missouri, 4 Pet. 431
It might be understood, and must so be implied that upon the open
admission of the inability to redeem this paper, the character
and the ability of these "Notes" to circulate as "Money" ceases to
exist, and they are no more a "bill of credit" than they are gold
or silver coin.
"The issuing of the notes does not embraces the printing or
manufacturing, but comprehends the act of putting them into
circulation."
Craig v. Missouri, Supra. at 436
Who issues these "Notes"?
"Federal Reserve Notes to be issued at the discretion of the board
of governors of the Federal Reserve system.
..."
12 USC 411
The Federal Reserve Board issues the "Notes" at the request of the
member banks, and the members of the board receive their
salaries from those member banks. ..." (Craig v. Missouri, Supra. at
431)
The "Federal Reserve Notes" are no longer instruments by which any
division, either the Federal Government or the private
banking corporations, use in an attempt to engage in the future payment
of their "Notes".
The Federal Government owes the money to the Federal Reserve bank, and
the Federal Reserve bank owes the Money to the
people; both are in default.
The "Notes" are issued by each of the 12 Federal Reserve banks; each
"Note" bears the seal of the bank or issue with the
letter of the bank if issue in its center.
"A" ..... Federal Reserve Bank of Boston
"B" ..... Federal Reserve Bank of New York
"C" ..... Federal Reserve Bank of Philadelphia
"D" ..... Federal Reserve Bank of Cleveland
"E" ..... Federal Reserve Bank of Richmond
"F" ..... Federal Reserve Bank of Atlanta
"G" ..... Federal Reserve Bank of Chicago
"H" ..... Federal Reserve Bank of St. Louis
"I" ..... Federal Reserve Bank of Minneapolis
"J" ..... Federal Reserve Bank of Kansas City
"K" ..... Federal Reserve Bank of Dallas
"L" ..... Federal Reserve Bank of San Francisco
As for the redemption pledge of the "Notes":
"They shall be redeemed in lawful money on demand at the Treasury
Department of the United States ... or at any Federal
Reserve Bank."
12 USC 411
The faith of the United States was solemnly pledged to the payment in
coin, or its equivalent, of all the obligations of the United
States; such payment was intended to be made in lawful money, unless
expressly provided that such payment could be made in
Currency other than Gold and Silver (See 31 USC 731).
It is our contention that the United States has merely assumed the
obligation for those "Notes" and that in the Constitution
sense; those "Notes" are not "bills of credit" issued by a sovereign
power.
"Even where the state, owned the entire capital stock of a bank,
and elected its directors, makes its bills receivable for
public dues and pledges its faith for their redemption, do not make the
bills of such bank, bills of credit in the Constitutional
sense."
Darrington v. Bank of Alabama,
13 how. 12;
Briscoe v. Bank of Kentucky,
11 Pet. 257
More classical and applying cases could not be found than the Darrington
and Briscoe cases above; comparing the "Notes"
issued by those banks to the "Federal Reserve N otes", we find that in
the Brisco case, the State was the sole owner of the
bank and that the operation of the bank was for the profit of the State
of Kentucky; and yet, the "Notes" were not issued by
the State in the Constitutional sense. Could it be any more so with the
"Federal Reserve Notes" when the United States owns
no interest in the bank but pays interest to it?
We allege that "Federal Reserve Notes" are merely depreciated "Bank
Notes"; and as such, they have no more value than the
assumed value given them by the legal tender statute.
It is relatively simple to define a bank note; the term embraces: "the
instruments issued by a bank for circulation"; they are
technically and more accurately designated as "Bank Notes"; they are
ordinarily so called in England. The name bank bill has,
however, come to have a like significance, and in the United States, it
is more frequently used in ordinary parlance; the terms
bank note and bank bill are equivalent and interchangeable (Eastman v.
Commonwealth, 4 Grey (Mass) 416; Banks and
Banking, 5th Ed., Vol. II, Sec. 635; State v. Hays, 21 Ind. 176).
"A bank note or bill so far as its language goes, is simple the
promissory note of the corporation. It expresses nothing but
the corporate engagement to pay a certain sum. That the payment is to be
made on demand, and without interest, may or may
not be stated. The presence of the statement is not indispensable, for
it would
always be deemed to be implied."
Banks and Banking,
Supra., Sec. 635
>From 1913 until 1934, the "Federal Reserve Note" have this inscription:
"Redeemable in Gold on demand at the United States Treasury or in
Gold or lawful money at any Federal Reserve Bank"
"Will pay to the bearer on demand one dollar"
>From 1934 to 1968, the "Federal Reserve Note" bore the inscription:
"This note is legal tender for all debts public and private and is
redeemable in lawful money at the United States
Treasury, or at any Federal Reserve Bank."
"Will pay to the bearer on demand one dollar"
And from 1968, the "Federal Reserve Note" was to bear this inscription:
"This note is legal tender for all debts public and private"
"One Dollar"
Until 1968, the "Note" was intended to be paid in Dollars.
Did something occur in 1968 to suddenly give this paper a value of its
own? Did this paper suddenly become the measure of
value equal to the inch that was relative to the foot? We think not, but
in fact we believe that the "Federal Reserve Notes"
were given up by Congress as they being depreciated beyond all possible
hope of redemption. This is evident by the following
Public Law:
"A bank note or bill must be payable over the counter immediately
upon demand made in business hours at any time after its
issue."
Banks and Banking,
Supra., Sec. 636;
Fulton Bank v. Phoenix Bank,
1 Hall, (N.Y.) 577
"The doctrine that bank bills are a good tender, unless objected to
at the time, on the ground that they are not money,
applies only to current bills, which are redeemable at the counter of
the bank on presentation, and pass at par value in business
transactions at the place where offered."
Ward v. Smith,
7 Wall (US) 447,
19 L.Ed. 207
"Federal Reserve Notes" are not redeemable at the counter of the bank
where they were issued, nor do they pass at the par
value of Gold and Silver.
"Notes not thus current at their par value nor redeemable on
presentation, are not a good tender to principal or agent,
whether they are objected to at the time or not."
Ward v. Smith, Supra.;
Ontario Bank v. Lightbody,
3 Wend. 101
"The payment of a check in the bill of a bank which had previously
suspended was not a satisfaction of the debt, though the
suspension was unknown by either of the parties, and its bill was
current at the time, the court observing that the bills of the
bank could only be considered and treated as money so long as they are
redeemed by the bank in specie."
Ontario Bank v. Lightbody,
Supra., at 105
"Money in its strictly technical sense is coined metal, either Gold
or Silver on which the government has impressed its stamp
to indicate its value: in its more popular sense it means currency, bank
notes, or other circulating medium in general use as the
representatives of value."
Johnson v. State, 167 Ala. 82
"Bank Notes" then, as all forms of paper Currency, merely represent the
value standard, as before stated. "Federal Reserve
Notes" no longer represent any value standard and consequently they can
not represent the dollar.
Congress has established procedure upon which we may proceed against
banks who fail to redeem their paper.
"Whenever any national banking association fails to redeem in the
lawful money of the United States any of its circulating
notes, upon demand of payment duly made ... the holder may cause the
same to be duly protested."
15 F.R. 4935,
64 Stat. 1280,
12 USC 131,
as reorganized under
plan #26, Sec. 1,
eff. July 31, 1950
All National Banks are members of the Federal Reserve, and the "Federal
Reserve Notes" replaced the "National Bank Notes"
as a circulating bank medium (12 USC 282 et. seq.).
The laws relating to National Banks apply with equal force to Federal
Reserve Banks (12 USC 341, para 8 et. seq.).
The purpose of the "National Bank Act" and the "Federal Reserve Act" was
to provide a national Currency secured by a
pledge of United States Bonds, and to provide for the circulation and
redemption thereof (12 USC 38; 12 USC 411).
The Federal Reserve banks are in violation of the very "Act" that
established their creation.
The "Act" of Congress (12 USC 411) binds the redemption of those
"Notes", and no subsequent "Act" passed after the issue
and acceptance of the contract and promise of the government to pay
could invalidate or repudiate that pledge. ... If the
government repudiates its promise, that "Act" is fatal to the character
of the "Notes" to circulate as legal tender, or in fact to
circulate at all. ...
There is no question as to the power of Congress to regulate the value
of money, that is, to establish a monetary system and
thus to determine the currency of the Country. The question is whether
the Congress can use that power so as to invalidate the
terms of the obligations which the government has therefore issued in
the exercise of the power to borrow money on the credit
of the United States. ...
This very question was before the Supreme Court as late as 1935 (See
Perry v. U.S., 204 US 330, 79 L.Ed. 917). The
position of Congress in that case was:
"That earlier Congresses could not validly restrict the 73rd
Congress from exercising its Constitutional powers to regulate
the value of money, borrow money, or regulate foreign and interstate
commerce," and said the court,
"from this premise, the government seems to deduce the proposition
that when, with adequate authority, the government
borrows money, and pledges the credit of the United States, it is free
to ignore that pledge and alter the terms of its obligations
in case a later Congress finds their fulfillment inconvenient. The
governments
contention thus raises a question of far greater importance than
the particular claim of the plaintiff, on that reasoning if the
terms of the governments bond as to the standard of payment can be
repudiated, it inevitable follows that the obligation as to
the amount to be paid may also be repudiated. The contention necessarily
imports that the Congress can disregard the obligations of the
government at its discretion and that, when the government
borrows money, the credit of the United States is an illusory pledge."
"We do not so read the Constitution" said Mr. Chief Justice Hughes,
"there is a clear distinction between the power of the
Congress to control or interdict the contracts of private parties when
they interfere with the exercise of its Constitutional
authority, and the power of the Congress to alter or repudiate the
substance of its own engagements when it has borrowed
money under the authority which the Constitution confers, in authorizing
the Congress to borrow money, the Constitution
empowers the congress to fix the amount to be borrowed and the terms of
payment, by virtue of the power to borrow money
"on the credit of the United
States" the Congress is authorized to pledge that credit as an
assurance the government can give, its plighted faith. To say
that Congress may withdraw or ignore that pledge is to assume that the
Constitution contemplates a vain promise, a pledge
having no other sanction than the pleasure and convenience of the
pledger. This court has given no sanction to such a
conception of the obligation of our government."
Perry v. U.S., Supra.
The Supreme Court held that Congress could not withdraw its terms of
payment, and implied that the United States could not
withdraw its credit once that credit had been pledged.
"The United States are as much bound by their contracts as are
individuals, if they repudiate their obligations, it is as much
repudiation, with all the wrong and reproach that term implies, as it
would be if the repudiator had
been a State or a municipality or a citizen."
Sinking fund cases,
99 US 700, 25 L.Ed. 496
"When the United States with Constitutional authority makes
contracts, it has rights and incurs responsibility similar to those
of individuals who are parties to such instruments, there is no
difference."
U.S. v. Bank of the Metropolis,
15 Pet. 377, 10 L.Ed. 774
"When a government enters into a contract with an individual, it
deposes, as to the matter of the contract, itsConstitutional
authority, and exchanges the character of legislator for that of a moral
agent, with the same rights and obligations as an
individual. Its promises may be justly considered as excepted out of its
powers to
legislate unless in aid of them. It is in theory impossible to
reconcile the idea of a promise which obliges, with a power to
make a law which can vary the effect of it."
3 Hamilton's Works 518
Once the faith of the United States was pledged to redeem and pay the
obligations which bore the form of "Federal Reserve
Notes" it was beyond the authority of Congress to pass legislation which
would impair or repudiate that pledge.
The intent and "Act" of Congress, if allowed to stand, must invalidate
the legal tender quality of those "Notes" and reduce them
to mere depreciated evidences of worthless debts as would be known by
any "Act" of repudiation. A check not honored by a
bank would have no value and just as all contractual failures would
render those contracts valueless so must the repudiation of
redemption render these obligations of no value.
"The Congress cannot invoke the sovereign power of the people to
override their will. ... The Constitution gives to the
congress the power to borrow money on the credit of the United States,
an unqualified power, a power vital to the
government, upon which in an extremity its very life may depend. The
binding quality of the promise of the United States is of
the essence of the credit which is so pledged. Have this power to
authorize the issue of definite obligations for the payment of
money borrowed, the Congress has not been vested with authority to
alter or destroy those obligations."
Perry v. U.S., Supra.
As Congress has repudiated its obligation, that "Act" necessarily leaves
an important question unanswered ... are "Federal
Reserve Notes" still qualified to remain a legal tender? We do not think
that the "Legal Tender Acts" previously passed by
Congress were meant to deprive the Citizens of their property without
just compensation as is now intended.
The Supreme Court decisions have been witness to our contention and all
they maintain that no attempt was made to coin
dollars nor to make anything without value; money. What the Supreme
Court did say was that the pledge of the United States
to pay dollars was temporarily to be accepted as being as good as the
money promised by it to be paid. ...
"Hepburn v. Griswald" was the first legal tender case to be decided by
the Supreme Court. There Justice Miller (who along
with Swayne and Davis JJ dissented from the majority opinion and who
later in the case of "Knox v. Lee" [which over
ruled the "Hepburn" case]) became part of the majority. He says:
"All experience shows that a currency not redeemable promptly in
coin, but dependent on the credit of a promissor whose
resources are rapidly diminishing, while his liabilities are increasing,
soon sinks to be dead level of worthless paper."
Hepburn v. Griswald,
8 Wall 634
In "Knox v. Lee" the majority opinion was written by Justice Strong:
"We will notice briefly an argument presented in support of the
position that the unit of money value must possess intrinsic
value. The argument is derived from assimilating the Constitutional
provision respecting a standard of weights and measures to
conferring, the power to coin money and regulate its value, it is said
there can be no uniform standard of weights without
weight, or measure without length or space and we are asked how anything
can be made a uniform standard of value which has
itself no value? This is a question of value. We do not rest their
validity upon the assertion of the value of money, nor do assert
that Congress may make anything which has no value, money. What we do
assert is that Congress has power to enact that the
governments promises to pay money shall be for the time being equivalent
in value to the representative of value
determined by the coinage acts."
Knox v. Lee,
12 Wall 552, 553
In March 1968, the government repudiated its promise to pay money and
according to what Justice Strong implied if there
were no promise there could be no value, the value was derived from the
promise of the government and nothing else...
Justice Bradley, who wrote a separate concurring opinion, felt that the
"Legal Tender Act":
"is not an attempt to coin out of valueless material, like the
coinage of leather or ivory or kowrie shells, it is a pledge of the
national credit, it is a promise by the government to pay dollars, it is
not an attempt to make dollars, the standard of value is not
changed. The government simply demands that its credit shall be accepted
and received by public and private creditors..."
Knox v. Lee,
Supra., at 560;
Bank of New York v. New York County,
Supra.
"No one supposes that these government certificates are never to be
paid, that the day of specie payments is never to
return, and it matters not in what form they are issued. The principal
is still the same. Instead of certificates they may be
Treasury Notes, or paper of any other form, and their payment may not be
made directly in coin, but they may be first
convertible into government bonds, or other government securities,
through whatever changes they pass, their ultimate destiny is
to be paid."
Knox v. Lee,
Supra., at 561 and 562
That day has come; Congress has repudiated its solemn pledge; there can
be no sustaining a value in the circulation of these
Federal Reserve Notes." All the opinions in the many important cases
hold that the "Federal Reserve Notes" are not now alegal
tender and are of no value; they can no more represent the dollar than
they could be that dollar.
In the last of the important legal tender cases it was held that
Congress, under its authority to borrow money on the credit of the
United States, could make its obligations to pay money as good for
payment of money debts as the money it owed (Julliard v.
Greenman, 110 US 421).
What we are to understand from this eight Justice majority is that the
promise of the government has a value; and so long as
that promise is intact, so long as that pledge remains, the value may
exist; but, once the pledge is withdrawn, once the
government admits its promise cannot be kept, nothing can give value to
those dishonored "Notes", and they must fall as any
contract without consideration.
The legal tender question has raised many interesting points, one,
itself being the validity of Supreme Court decisions.
It was intended by the separation of powers inherent in our Constitution
that the judiciary should be independent and free from
all encroachment by the other departments of government. Yet the Supreme
Court was totally dominated by Congress and
President Grant.
"It all started in 1864 when President Lincoln appointed Salmon P.
Chase, the then Secretary of the Treasury, to head the
Supreme Court as its Chief Justice...
Lincoln felt that the appointment of Chase to the post of Chief
Justice and the influence he would wield upon the court,
could guarantee the future of the two important issues, the emancipation
and legal tender questions. ... Chase as Secretary of
the Treasury had been the chief architect of the legal tender act, and
his anti-slavery
views made Lincoln sure both would ultimately be upheld by the
Supreme Court.
The adoption of the 13th Amendment removed from doubt the question
of emancipation. But the question of legal tender
meant a more challenging fight and was almost quashed by no other than
Chase himself ...
Chase's chief responsibility as head of the Treasury was to finance
the war. To help accomplish this; Congress in 1862
enacted a law authorizing the issuance of paper money "Greenbacks" which
were declared to be legal tender with which people
pay their debts and which creditors would be compelled to accept. As
those greenbacks continued to be issued (almost half a
billion dollars worth) their value in terms of gold exchange continued
to depreciate. The banks, business interest, and others in
the creditor classes naturally opposed being compelled to accept payment
either of principal or interest in depreciated
currency. Conversely, the debtor classes, and those included not only
the farmers but also the railroads which had floated
bonds in large amounts to finance their rapid expansion, supported the
law...
A suit testing the validity of the act came before the Supreme
Court in 1867, Hepburn v. Griswald. When two years had
passed and no decision had been rendered by the court, Grant who was
then President began to feel
uneasy. ... Rumors were wide spread that the court would invalidate
the act. ... The rumors, as rumors would go were quite
accurate of the eight member court. Chase, Nelson, Clifford, and Field,
voted to declare the law unconstitutional, whereas
Miller, Swayne, and Davis voted to uphold it, Grier was the fly in the
ointment. At first he seemed to side with Miller, then
changed his mind and sided with Chase. ...
The Court, not sure where Grier stood and feeling he was too senile
to give such an important decision, asked for his
resignation. Upon Grier's resignation; the opinion rendered was a 4 to 3
decision against the legal tender act. It was announced
that Grier had finally decided with Chase at the time the decision was
finally written in 1870. ...
Chase recognized the incongruity of his voting against a law for
which he was chiefly responsible but he apologetically
explained that in the excitement and exigencies of war; clear and lawful
deliberation was not always possible. ... He held that
Congress had no power to issue paper money; even to finance a war. He
accepted Marshall's principles of implied powers. The Congress may
enact all appropriate means to carry out express
powers but he held that the ultimate decision as to what are appropriate
means to carry out the express powers is the
responsibility of the Supreme Court, rather than Congress, and that the
issuance of paper money was not within that category
even to finance a war.
The effect of this decision, if it were allowed to stand, would
have been that not only the civil war legal tender act, but all
similar future acts as well were unconstitutional. ... This would have
brought bankruptcy to every
railroad in America. Fortunately; if one believes in change,
Congress in 1869 (four years after the adopting of the 14th
Amendment), while the court was two years into debates over the Hepburn
case, enacted legislation increasing the number of
Justices to 9. ... On the day the Hepburn decision was announced, Grant
nominated to the court William Strong of
Pennsylvania and Joseph P. Bradley of New Jersey. As soon as both were
confirmed by Congress and took their seats; the
Attorney General of the United States made a motion that the question
decided in Hepburn v. Griswald be reconsidered by
the court. As chance would have it; the two newly appointed Justices
sided with the minority, now forming a new majority,
which ruled to re-hear the argument in a new case; Knox v. Lee. ... It
is submitted that the two Attorneys nominated by Grant
were not selected by chance, but were selected because of their views
and affirmed by Congress because of these same views.
... Both were railroad Attorneys, Strong's principal client being the
Philadelphia and Reading R.R. and Bradley's the Camden
and Amboy R.R. of New Jersey.
Strong had earlier been a Democratic member of Congress and Bradley
was not only a Lawyer for the Camden and
Amboy; but actively involved in its management as Secretary of its board
and member of its executive committee. ..."
"This Honorable Court"
by Leo Pfeffer, p. 182 et. seq.
The only real area of disagreement in the legal tender cases was: could
Congress make its obligations a legal tender? No
argument was presented to deny the fact that the paper "Notes" were
obligations and no intent was conceived that the
obligations would not be honored at a future day.
Chief Justice Chase said, in regard to the "United States Notes", that
their value is:
"But a purchasing value, determined by the quantity in circulation,
by general consent to its currency in payments, and by
opinion as to the probability of redemption in coin."
Hepburn v. Griswald, 8 Wall 607
"There is a well known law of currency, that notes or promises to
pay, unless made conveniently and promptly convertible
into coin at the will of the holder, can never, except under unusual and
abnormal conditions, be at par in circulation with coin.
...
It is an equally well known law, that depreciation of notes must
increase with the increase of the quantity put in circulation
and the diminution of confidence in the ability or disposition to
redeem. ...
No act making them a legal tender can change materially the
operation of these laws ... [their] force has been strikingly
exemplified in the history of the United States Notes. Beginning with a
very slight depreciation when
first issued, in March 1862, they sank in July 1864 to the rate of $2.85
for a dollar in gold."
Hepburn v. Griswald, Supra., 608
There is ample precedent for the devaluation of currency made legal
tender and although Congress had forbidden their
depreciation in payment of money debts; they have said nothing regarding
the receiving of the payment. Congress has enacted
that all coins or currencies offered in payment shall, dollar for dollar
in whatever form tendered, be accepted at its nominal
value in discharge of that debt. This leaves to the receiving party the
obligation of determining how much he has lost by the
payment in different currencies, and their representative value in
respect to the dollar (its value).
In the "Vaughan" and "Telegraph" cases of October 1864, the libelants
were given a decree for the value in gold of the cargo
lost and at the same time the court converted the decree into "Legal
Tender Notes", $201.00 in gold. Affirmed by the
Supreme Court - 1870 (Vaughan & telegraph, 14 Wall. 258).
Chief Justice Chase, dissenting to much of the court's opinion to grant
the remedy based upon the variance of the value
standard to the "United States Notes" at the height of their
depreciation, said: "This case strikingly illustrates the evil
consequences of rendering judgments payable in legal tender currency,
hardly anything fluctuates in value more than such judgments
everyday witnesses a change, the judgment debtor gains by
depreciation and loses by appreciation."
The Vaughan and Telegraph,
Supra., 267 & 268.
The only money that may lawfully circulate within the United States is
gold and silver coin; this is the only money Congress may
legally issue and it is the only money to be honored by the courts. The
legal tender "Notes" have been the representative of the
values and have circulated by general consent as the equivalent to
money; but not as money by any legal standard.
Money, says Sir William Blackstone, is:
"A universal medium, or common standard, by comparison with which
the value of all merchandise may be ascertained, or it
is a sign, which represents the respective values of all commodities,
metals are well calculated for this sign, because they are
durable and are capable of many subdivisions; and a precious metal is
still better calculated for this purpose, because it is the
most portable. A metal is also the most proper for a common measure,
because it can easily be reduced to the same standard
in all nations; and every particular nation fixes on its own impression
that the weight and standard (wherein exist the intrinsic
value) may both be known by
inspection only."
Commentaries on the Laws of England,
1 Blackstone, Sec. 387
With regard to the materials, Sir Edward Coke lays it down:
"The money of England must either be gold or silver...
None other was ever issued by the Royal Authority until 1672, when
copper farthings and half pence were coined by King
Charles the second, and ordered by proclamation to be current in all
payments under the value of six pence, and not
otherwise."
1 Blackstone, Sec. 389
The legal tender quality of the copper (zinc) coin was restricted just
as our nickel and copper coins are restricted to a tender
of$5.00 or less.
When the silver coins of England were below the established standard of
weight, they were made a legal tender in law for their
value determined by that weight. It was enacted in 1774:
"No tender of payment in silver money, exceeding twenty five pounds
at one time, shall be a sufficient tender in law for more
than its value by weight."
14 Geo. III c 42;
1 Blackstone, Sec. 389
"... in order to fix the value, the weight and fineness of the
metals are to be taken into consideration together, when a given
weight of gold or silver is of a given fineness, it is then of the true
standard."
1 Blackstone, Sec. 391
"The power to coin money is one of the ordinary prerogatives of
sovereignty, and is almost universally exercised in order to
preserve a proper circulation of good coin of a known value in the home
markets, in order to secure it from debasements, it is
necessary, that it should be exclusively under the control and
regulation of the
government."
3 Story 16
"In former ages, as today the power to coin money was greatly
abused, base coin was often coined and circulated under
authority, at a value far above its intrinsic worth, this in effect lays
an indirect tax upon the subjects."
3 Story 18
The intrinsic value of our coin today is so base that, due to inept
leadership, we have a value standard whereby the nickel has
an intrinsic worth of 2.5 times that of the dime and our paper medium,
not representing any value at all, is in reality a complete
and thorough tax. The paper medium, having no intrinsic value and being
non redeemable, is merely taxing the citizens as much
as that currency circulates.
Under the existing principle of double taxation; it is doubted if
Congress can tax the "Federal Reserve Notes" in any manner.
Since the issuance of such "Notes" constitutes a complete tax; the
government would be precluded from any further taxation. It
could merely print all the "Notes" it needed and issue them; taking the
property from the Citizens and merely leaving them this
"Note" as a receipt for the wealth they have given up ... a negotiable
tax receipt.
In speaking of the views of the framers of the Constitution on the
subject of money, it was said that: "At the time Gold and
Silver molded into forms convenient for use, and stamped with their
value by public authority, constituted with the exception of
pieces of copper for small values, the money of the entire civilized
world. It was added that these metals divided up and thus
stamped always have constituted money with all people having any
civilization, from the earliest periods in the history of the
world down to the present time. Coin was the sacred currency as well as
the profane, of the ancient world. It became legal
tender by the Lex Mercatoria of Nations, and contracts, made without
specifying a medium of payment, were understood by
the law of nations to be payable in coin."
Pol. Economy, p. 222;
2 Mill's Pol. Economy, p. 19;
18 Ind. 471
"Historically considered we find that the Almighty and his prophets
and apostles were for a specie basis, that Gold and
Silver were the theme of their constant eulogy.
Abraham the Patriarch, 1875 years before Christ being about 3740
years ago, purchased of Ephron, among the sons of
Heth, the field in which was the cave of Machpelah shaded by a
delightful grove, for the burial place of his dead; and he paid
for it "400 shackles of silver, current money with the merchant."
Gen. 23, 16.
"Solomon the wisest of men, seems to have had a decided preference
for a hard money currency, in 1st of Kings, Chap. 9,
Verses 27, 28, it is said, "and Hiram sent in the Navy his servants, and
they came to Ophir, and fetched
from thence gold 420 talents, and brought it to King Solomon."
"Now the weight of gold came to Solomon in one year was 666
talents, besides that he had of the merchants men and of
the traffic of the spice merchants, and a chariot came up and went out
of Egypt for 600 sheckles of silver and a horse for 150
sheckles."
1st of Kings, Chapter 10,
Verses 14, 15, 29.
"The prophet Jeremiah, one of the "Greater Prophets" says, "and I bought
the field of Hanamerl, my Uncle's son, that was in
Anothoth, and I weighed him the money, even 17 sheckles of silver, and I
subscribed the evidence and sealed it, and took
witnesses, and weighed the money in the balances."
Jeremiah, Chapter 32,
Verses 9, 10.
"The circulating medium of a commercial community," says Mr. Webster,
"must be that which is also the circulating medium of
other commercial communities, or must be capable of being converted into
that medium without loss, it must also be able not
only to pass in payments and receipts among individuals of the same
society and nation, but to adjust and discharge the balance
of exchanges between different nations, it must be something which has a
value abroad as well as at home, by which foreign as
well as domestic debts can be satisfied. The precious metals alone
answer these purposes, they therefore alone, are money, and whatever
else is to perform the functions of money must be their
representative and capable of being turned into them at will as long as
bank paper retains this quality it is a
substitute for money, DIVESTED OF THIS NOTHING CAN GIVE IT THAT
CHARACTER."
3 Webster's Works 41
"Doubtless the word "money" is often used as applicable to other
media of exchange than coin, bank notes lawfully issued
and actually current at par in lieu of coin are treated as "money" be
cause flowing as such through the channels of trade and
commerce without question."
Miller v. Race,
1 Burrow 452;
United States Bank v. Bank of Georgia,
10 Wheat. 333
"Bank Notes" and all "Paper Notes" are treated as money only so long as
they remain current at par and in lieu of coin; but no
paper, in a strictly legal sense, could be money as money, strictly
applied, is coined metal. There is a necessary distinction
between paper being treated as money and paper actually being money.
There is a possibility of the former but there is no
possibility of the latter. "Bills of credit" and "negotiable tax
receipts" were actually the forerunners of the legal tender
"United States Notes," "Treasury Notes," and all other legal tender
paper. The sole distinction is that "Bank Notes" are
guaranteed by the bank of issue; whereas, the "Legal Tender Notes" are
ultimately guaranteed by the government. The laws,
necessarily relevant to "Bank Notes," must apply with like force to
"Notes" guaranteed and ultimately pledged to be redeemed
by the government.
"Even prior to 1844, it was held that an action of debt would not
lie upon a note to pay a sum certain in current bank notes."
Young v. Scott, 5 Ala. 475
"The reasoning which led to the conclusion attained in the above
case, was, that bank notes were not money, although they
might profess to be its representative."
Carlisle v. Davis, 7 Ala. 42
"The term "Bank Notes" as employed here import in their ordinary
acceptance such bank bills only as are redeemable in
gold or silver, or such as are equivalent thereto."
Flemming v. Nall,
1 Tex. 246;
Pierson v. Wallace,
7 Ark. 282
There are numerous cases where a designation of the payment of such
instruments in "Notes" of particular banks, associations
or in paper not current as money; have been held to destroy their
negotiability (Irvine v. Laury, 14 Pet. 295; Miller v.
Austin, 13 How. 218, 228; Ontario Bank v. Lightbody, 3 Wend. 101).
"In the use of the term, currency, includes only such bank notes as are
current, that is, bank notes which are issued for
circulation by authority of law, and are in actual and general
circulation at par with coin, as a substitute for coin, interchangeable
with coin; bank notes which actually represent dollars and cents, and
are paid and received for dollars and cents at their legal
standard value, whatever is at a discount, that is whatever represents
less than the standard value of coined dollars and cents, at
par does not properly represent dollars and cents, and is not money."
Leeger v. Goodrich,
5 Cw. 187;
Pierson v. Wallace,
7 Ark. 293;
Ontario Bank v. Lightbody, Supra.;
Klauber v. Biggerstaff,
47 Wis. 561
"Federal Reserve Notes" are so hopelessly depreciated that Congress has
given up any attempt at redemption. Twice in
fourteen months they have depreciated some 18% in the foreign markets
and Congress, here at home, has offered standard
silver dollars for sale at a ratio of $30 dollars in "Federal Reserve
Notes" for $1 in standard lawful money (See General Service
Administration, Form T-588-R [12-72] - and like offers over the years).
Thus Congress has established that there is a ratio of value somewhere
exceeding 30 to 1. That "Act" necessarily raises another
question; namely. if all coins and currencies, regardless of when coined
or issued shall be a legal tender (31 USC 392);
what is Congress doing when it sells one "legal tender" for thirty
dollars ($30.00) in another "legal tender" ("Federal Reserve
Notes")? Is it not depreciating the dollar "Federal Reserve Note" tender
and declaring that there is a difference in the
measure of value? Congress has declared that it cannot redeem its
obligations, and yet they have offered to sell lawful legal
tender silver dollars (at a premium) for its depreciated legal
obligations called "Federal Reserve Notes." Does this "Act"
make sense?
"The term, current bank paper, has a definite and legal
significance. It certainly does not mean notes at a 50% discount and
such as are bought and sold as merchandise."
Leiber v. Goodrich, Supra.;
Pierson v. Wallace, Supra.
Congress was actually purchasing Federal Reserve paper for "Lawful
Money" and doing so at a discount of 3000% by the San
Francisco Mint sale of lawful silver dollars.
"The dollar is the money unit of the United States."
5 Am. & Eng. Enc. of Law, 854
"Money, in a strictly technical sense, is coined metal, usually
gold or silver, upon which the government stamp has been
impressed to indicate its value. In its more popular sense, any
currency, token bank note, or other circulating medium in
general use is the representative of value."
Cook v. State,
130 Ark. 95;
15 Am. & Eng. Enc. of Law, 701
"The "Dollar" means lawful money of the United States."
103 US 792
The lawful money of the United States is gold and silver coin stamped by
the sovereign power.
""Currency" means any form of paper money of the United States and
implies genuineness and par value."
110 US 421; 25 Ark. 215;
83 Ala. 51; 23 Ind. 21;
35 Ill. 158; 8 Minn. 324;
27 Mich. 191
"Notes" in general; whether they are "United States Notes,"
"Federal Reserve Notes," or "Private Notes," imply an
obligation.
"[Their] name imports obligation every one of them expresses upon
its face in engagement of the nation to pay to the bearer
a certain sum. The dollar note is an engagement to pay a dollar, and the
dollar intended is the coined dollar of the United
States..."
Bank of New York,
Supra at 30
"We have already said that these notes are obligations, they bind
the national faith, they are, therefore, strictly securities,
they secure the payment stipulated to the holder, by this pledge of the
national faith. The only ultimate security of all national
obligations, whatever form they may assume."
Bank of New york,
Supra., 31
And Justice Stone, concurring in the majority opinion of "Perry v.
United States", condemned the "Acts" of Congress that
refused to honor their gold obligations.
"I do not understand the government to contend that it is any less
bound by the obligation than a private individual would be
..."
Perry v. U.S.,
Supra., at 358
In the "Serbian and Brazilian Bond Cases" it was declared:
"The gold clause merely prevents the borrower from availing itself
of a possibility of discharge of the debt in depreciated
currency" and "the treatment of the gold clause as indicating a mere
modality of payment, without reference to gold standard of
value, would be, not to construe but to destroy it."
Serbian & Brazilian Bond cases,
P.C.I.J. series A, Nos. 20-21,
pp 32-34, 109-119
In "Gregory v. Morris"; Chief Justice Waite said:
"If Morris was willing to accept a judgment which might be
discharged in currency, to have his damage estimated according
to the currency value of bullion."
Gregory v. Morris,
96 U.S. 619,
24 L.Ed. 740
It is true to say that the gold clause frequently used prior to 1934 was
intended to afford a definite standard or measure of value
and this was to protect against a depreciation of the Currency and
against the discharge of the obligation by payment of less
than that prescribed.
Gold is still the standard unit and measure of value. Under authority of
31 USC 821; the President was given authority to
depreciate the value and to declare a lesser unit for the dollar.
President Roosevelt re-established the new standard at 15 5/21 grains
9/10 fine. This is the standard today.
Congress has said all Coins and Currencies shall be a legal tender, and
a tender in any Coins and Currencies shall, dollar for
dollar at their nominal value, satisfy that debt (31 USC 462; 463).
But it must be questioned: does Congress have the ability and authority
to declare the "Federal Reserve Notes" to be a legal
tender?
The obligations under consideration in the legal tender cases Knox v.
Lee, Hepburn v. Griswald, and Julliard v. Greenman,
were promises to pay dollar. They were a pledge of the national credit
and circulated with the intent of ultimate redemption.
The value standard was not changed.
Now comes a new era. Congress has repudiated its pledge and the "Notes"
circulate merely by a lack of understanding as to
what is money and what may pass as money. The people are so bogged down
with debt to the banks that they haven't the time
to question that debt to see if, in fact, it is a lawful debt that they
owe.
The opinion in "Knox v. Lee" was that "Legal Tender Acts" do not attempt
to make paper a standard of value nor did the
Court assert that Congress may make anything which has no value, money.
Where then does Congress have the authority to declare that these
worthless "Notes" are to be equal to money?
The "Act" of Congress, in creating a worthless tender, does no less than
take the property of the people and give it to the
banks without giving any consideration in return.
The legal tender cases merely established precedent for the government
to enact by legislation ("Legal Tender Acts") that its
promises to pay money shall be, for the time being, equivalent in value
to the representative of value determined by the
"Coinage Acts."
There is no longer an attempt, pledge, or intention, by Congress, or any
Federal Reserve Bank, to redeem these "Notes" and
consequently; no authority precedent or ability of Congress exists to
enact legislation that these "Notes" are to be a legal
tender.
"It may well be doubted whether the nature of society and of
governments does not prescribe some limits to the legislative
power; and if any be prescribed, where are they to be found if the
property of an individual fairly and
honestly acquired may be seized without compensation?"
Fletcher v. Peck,
6 Cranch 87, 3 L.Ed. 162
"It must be remembered that the Constitution is the fundamental law
of the United States; by it, the people have created a
government, defined its powers, prescribed their limits, distributed
them [to] the different departments
and directed in general the manner of their exercise. No department
of the government has any other powers than those
thus delegated to it by the people. All legislative power granted by the
Constitution belongs to
Congress; but it has no legislative powers which is not thus
granted."
_______________________________________________
Crashlist resources: http://website.lineone.net/~resource_base
To change your options or unsubscribe go to:
http://lists.wwpublish.com/mailman/listinfo/crashlist
