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Interesting things about money


This may surprise you, but Congress has never declared Federal Reserve notes to be a legal tender in payment of debts. Doubt me? Look at your currency:"...LEGAL TENDER FOR ALL DEBTS PUBLIC AND PRIVATE."

The word "FOR" is used rather than "IN PAYMENT OF." Was this just accidental? No. It is well-settled in the courts that lawmakers are presumed to have selected each word that makes up a statue carefully and deliberately, lest the statue be considered void for vagueness. We can be sure, then, that when Congress chose NOT to use "IN PAYMENT OF," it did so for a good reason. That good
reason being the hard fact that no debt can be paid in full in the eyes of American Jurisprudence unless paid in gold or silver coined and regulated in value by the Congress, courtesy of Article I, Sections 8 and 10.

About all a Federal Reserve note can legally do is wipe out a debt and replace it with itself, another debt, a note that promises nothing. If anything's been paid, the payment occurs only in the minds of the parties--in the ideasphere--not the real world.

It's important for you to mark well that Federal Reserve notes are not your government's money. They bear likenesses of our presidents, they bear the signatures of our Treasurer and the Secretary of the Treasury, they bear beautiful engravings of our most sacred political monuments, and even--since the late 1950's--the pious religious motto "In God We Trust", but they are not your government's money. So when you revile American Dream
money, you're in no way insulting your government. Federal Reserve paper is not lawful money, not government money. It is the scrip of a private corporation partially owned by your local banker. Whether it's a $100 bill or a $1 bill, a Federal Reserve note is intrinsically worth about one cent. Its extrinsic worth is whatever it will buy from day to day in the marketplace, just like the 1916-23 German mark.

Is this the kind of money for a stable country to have?

Between 1913 and 1963, the Federal Reserve promised redeemability in lawful money on their notes. But in 1963, they began issuing notes minus the redeemability promise. This enabled your banker to issue you a note that said "In God We Trust" in exchange for your silver dollar, without his having to exchange that silver dollar back for the note. An unfair deal, you might say, but who took steps to prevent it?

Interestingly, the first 50,000,000 no-promise Federal Reserve notes were shipped out on November 26, 1963, which happened to be the day of John F. Kennedy's funeral. A coin dealer friend of mine says, "You know, they couldn't have picked a better day to catch the people off guard."

These days if looks like there's not enough gold and silver
"to go around." That's because there's so much paper. Inflation always makes people think there's a shortage in precious metals. The reason is simple: Increased paper increases prices.

It looks, too, as though we're "off the gold standard," as a
banker told me in earnest not long ago. Both this and the "not enough" assumptions are based on pure hearsay. How rarely we bother to checks things out! How easily we surrender to gossip! Oh, that ideasphere! For America to be "off the gold (or silver) standard" the Coinage Act of April 2, 1782, which specifies in detail how our money is to made, would have to be rescinded or repealed by Congress. Then, a constitutional amendment permitting
the states to make something other than gold and silver coin a tender in payment of debts would have be passed and ratified by three-fourths of the states.

As of 1984, neither of these events has happened. God help us if this ever should happen.

It is the Federal Reserve's monetary system that is no longer on the gold or silver standard. In the Federal Reserve's own published statement:

Today, in the United States, there are only two kinds of money in use in significant amounts--currency (paper money and coins in the pockets and purses of the
public) and demand deposits (checking accounts in
commercial banks). Since $1 in currency and $1 in demand
deposits are freely convertible into each other at the
option of the bank's customer, both are money to an equal
degree. What ... makes these instruments acceptable at
face value payment of all debts? Mainly, it is the confidence people have they will be able to exchange such money for real goods and services whenever they choose to do so.

So there you have it: paper and confidence are the monies in which we conduct our daily commercial transactions, with our friendly banker as our perpetual middleman. But have the instruments of the Federal Reserve monetary system ever qualified to be the money in which the transactions of government must be conducted? Let's investigate.

The government is limited to a special kind of money by
federal statue. For, you see, in order to live up to the
Constitution's promise of establishing domestic tranguility and promoting the general welfare, the people instructed their representatives to keep all official accounts and proceedings in "the money of account of the United States." First legislated in the Coinage Act of 1792, this requirement is found in current law at Section 371 of Title 31 of the United States Code, which should be memorized:


The money of account of the United States shall be expressed in dollars or units, dimes or tenths, cents or hundredths, and mills or thousandths, a dime being the tenth part of a dollar, a cent the hundredth part of a dollar, a mill the thousandth part of a dollar; and all accounts in the public offices and all the proceedings in the courts shall be kept and held in conformity to this regulation.

Thus, it is federal regulation that all accounts in the public
offices and all proceedings in the courts must be conducted in whatever has been declared to be "the money of account of the United States," this money being expressed-or measured-in "dollars."

A dollar, therefore, is neither a coin nor a piece of paper,
but simply the name of the unit by which the paper, but simply the name of the unit by which the value of money is measured, just as "quart" is the name of a unit by which liquid is measured. A dealer selling a car for "1500 quarts" would surely be asked "Quarts of what?" Where, then, is the frivolity in asking of a $15 dollar parking ticket, "Fifteen dollars of what?"?

When courts and public offices require you pay in dollars, the dollars must-by the above law-be dollars (or units) of the money of account of the United States. Is there any doubt in your mind as to what the money of account of the United States is?

The Coinage Act of 1792 specifically declared gold and silver to be "as money in the United States." But in 1933, Congress suspended our currency's redemption in gold, and in 1968 suspended the redemption of silver certificates in silver. (In both cases the excuse was "temporary emergency," as it always is when governments work with bankers to harvest the people's property without due process.) The cumulative effect of those acts of 1933
and 1968 was this: Congress eliminated the money of account of the United States from the banking system without declaring a replacement, with the astonishing result that neither our courts nor our public offices are complying with 31 U.S.C. 371!

Federal Reserve notes and all those confidence-building,
important-looking instruments of Federal Reserve banking may be "money," all right, but they've never been declared to be the money of account of the United States, as gold and silver have. They may even be measured in dollars or units, but not in dollars or units of the money of account of the United States.

Federal Reserve notes can be a tender for debts, and they may even be "lawful" money in the sense that they've never been specifically declared unlawful but they are not the money of account of the United States that is measured in dollars in which "all accounts of the public offices and in all proceedings in the courts shall be kept and had." And if you doubt me, just ask any judge or lawyer or attorney general to show you legislation that disproves it.

In short, Federal Reserve notes are compelling images charged with charm and enchantment, like movies and TV and comic strips and stereo and colorful pages in magazines. If you believe that they, or the bank demand deposits for which they are redeemable, are the money the law requires us to pay into our government, you're living
in a dream world.



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