CREATING MONEY IS A TAXING OPERATION
THE HISTORY OF UNITED STATES MONEY
AND ITS RELATION TO THE DOLLAR
What we are going to show by this work is the history of money in the
United States, as well as its origin and purpose.
We assert that the dollar cannot exist without a measure of value, no
more than the "foot" could exist without the measure of
The paper currency has never for any recognizable period in our history
been maintained at parity with the Value Standard; and, the paper issued
by the Federal Reserve, if that paper could be held to represent the
dollar at all, must represent that dollar at a given ratio in excess of
400 to 1.
It is our contention, that Federal Reserve Notes are not "Dollars,"
but dishonored promises to pay dollars.
This work and the citations therein mentioned establish the validity of
There are no existing references that may be cited which show opposing
An appropriate beginning is June 10, 1932; in the midst of the great
depression, when the Honorable Louis T. McFadden (R. Pa.) who was
at that time Chairman of the Committee on Banking and Currency, stated as
he addressed the House of Representatives:
"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 the Federal Reserve Banks. ... This evil institution has
impoverished and ruined the people of the United States. ... Some people
think the Federal Reserve Banks are United States Government
institutions. They are private credit monopolies which prey upon the
people of the United States for the Benefit of themselves and their
foreign customers. ..."
Cong. Record, June 10, 1932
Thirty nine years and eleven months later, the Honorable John B.
Rarick of Louisiana addressed the House of Representatives thus:
"Mr. Speaker, the current efforts by our Government to hold down
price increases have served to focus the attention of thoughtful
students on a little discussed facet of our money system, this system,
because of a long procedure of miseducation and studied silence, is not
now understood as it was prior to the adoption of the Federal Reserve
system more than half a century ago. It is based upon debt; has serious
implications for the future of our country, and invites what may be the
greatest war in history. ...
Every debt Dollar demands an interest tribute from our economy for
every year that Dollar remains in circulation. These interest costs
force up the price of every commodity and service and contribute greatly
to inflation. ..."
Cong. Record, Thursday, May 11, 1972
"But where does the money exist? It exists only in name, in
paper, in public faith, in parliamentary security. ..."
Blackstone on the National Debt
1 Blackstone, Sec. 451
"The Creditors property (Federal Reserve Notes in the current
case) exist in the demand which he has upon the debtor, and nowhere
else; and the dollar is only a trustee to his creditor for ... the value
of his income ... in short, the property of a creditor of the public
consists in a certain portion of the national taxes: by how much,
therefore, he is the richer, by so much the nation, which pays those
taxes, is the poorer."
1 Blackstone, Sec. 451
And further, says Blackstone:
"Our national encumbrances very far exceeds all calculations of
commercial benefit, and is productive of the greatest inconveniences,
for, first, the enormous taxes, that are raised upon the necessaries of
life for the payment of the interest of this Debt are a hurt both to
trade and manufactures, by raising the price as well of the artificer's
subsistence, as of the raw material, and of course in a much greater
proportion, the price of the commodity itself, nay, the very increase of
paper ("Money") circulation itself, when extended beyond what
is requisite for commerce or foreign exchange, has a natural tendency to
increase the price of provisions as well as of all other merchandise,
for as the effect is to multiply the cash of the Kingdom, and this to
such an extent that much must remain unemployed, that cash (which is the
Universal measure of respective values of all other commodities) must
necessarily sink in its own value, and everything grow comparatively
dearer, secondly, if part of this debt be owing foreigners, either they
draw out of the Kingdom annually a considerable quantity of specie for
the interest; or else it is made an argument to grant them unreasonable
privileges, in order to induce them to reside here."
1 Blackstone, Sec. 452
And further, continues Mr. Rarick:
"Under the Constitution, the Congress has responsibility of
issuing the nations money and regulating its value Art. 1, Sec 8, Cl.
5, in a recent brilliant analysis of our money system by T. David
Horton, Chairman of the Executive Council of the Defenders of the
American Constitution, able Lawyer and keen student of basic American
history, he suggests a proven remedy for our current predicament that
will enable the Congress to resume its Constitutional responsibilities
to regulate our nation's money by liberating our economy from the
swindle of the debt-money manipulators by the issuance of national
currency in debt fee form ...
We have a certain amount of non-interest bearing money in
circulation, all of our fractional currency, pennies, nickels, dimes,
quarters, and half dollars. They are manufactured in our mints, and are
paid into circulation, circulate freely, and provide the government with
a valuable source of revenue. From 1966 through 1970 the amount of
seignorage paid into the treasury by the mints amounted to in excess of
4 billion dollars the profit ratio on this type of currency is 6 to 1,
or currency 6 times the cost of production. The cost ration for Federal
Reserve Notes is 600 to 1; however, during these same four years, 1986
through 1970, 50 billion dollars in Federal Reserve Notes were
manufactured by the bureau of printing and engraving and turned over to
the banks; not one cent in seignorage was paid over to the treasury. ...
Our Debt money system compels the government to spend more than it takes
in, because this is the only way we can keep the economy going..."
Cong. Record, May 11, 1972
Congress has the power to borrow money on the credit of the United
States, Art. I, Sec. 8, Cl. 2, but Congress must provide a mode in
the keeping of the letter and spirit of the Constitution; the deliberate
placing of its citizens in bondage to a private banking corporation does
not follow the mode of establishing justice as the preamble declares.
Other modes are within the spirit of the Constitution, and have been
accepted by the people, without bondage (United States Notes).
Questions have been raised as to who owns the Federal Reserve Banks.
"Some people think the Federal Reserve Banks are United States
government institutions, they are not government institutions, they are
private credit monopolies."
Cong. Record, June 10, 1932, p. 12595
"The Federal Reserve Board, and the Federal Reserve Banks are
Cong. Record, Jan. 24, 1934, p. 1293
"Federal reserve banks are not federal instrumentalities for
purposes of a Federal Tort Claims Act, but are independent, privately
owned and locally controlled corporations in light of fact that direct
supervision and control of each bank is exercised by board of directors,
federal reserve banks, though heavily regulated, are locally controlled
by their member banks, banks are listed neither as "wholly
owned" government corporations nor as "mixed ownership"
corporations; federal reserve banks receive no appropriated funds from
Congress and the banks are empowered to sue and be sued in their own
Lewis v. United States,
680 F.2d. 1239 (1982)
"In a second group of Central Banks, ownership rests entirely in
private hands; this group includes the Central Banks of the United
States, Italy, and South Africa; from most of the Central Banks within
this group, limitations as to who may be stockholders and as to the
amount of their holdings are generally absent. The United States is
exceptional in this regard since the member banks are the exclusive
owners of the Federal Reserve Banks."
"Money & Banking" (1956)
at p. 374 & 375
Rinehart & Co., Inc., N.Y.
"In reality, no stock of the Federal Reserve Banks has been sold
to either the public or the government, and even the member banks have
paid in only half of their subscriptions: thus the Federal Reserve banks
are owned wholly by their member banks, each member bank having paid
into its Federal Reserve bank an amount equal to 36 of its own paid-up
capital and surplus..."
"The Economics of Money & Banking"
Harper & Bros., 1948
The preamble to the Constitution says it all:
"We the people of the United States in order to ... ESTABLISH
JUSTICE ... do ordain and establish this Constitution for the United
States of America ..."
Where is the justice, when Congress borrows we the people into debt to
a private banking corporation? Ultimately it is our money Congress is
borrowing. By borrowing it through the banks, Congress is laying a heavy
tax upon us to repay that debt and the interest thereon; yet, if Congress
borrowed the money directly from us as Congress has done in the past
(1862), there would be no interest due to banks and no need for any heavy
income tax ...
How could it be that a people so dedicated to establish justice would
allow such an act of plunder to be within the authority of Congress? ...
It is admitted that no government could survive without revenue, but
how does a government obtain the funds necessary to meet its expenses and
pay its debts? The only manner is through taxation. Our Constitution
authorizes Congress to borrow money on the credit of the United States.
The credit of the United States is its ability to tax ...
The "Federal Reserve Act" of 1913 established
or attempted to establish a new source of money supply. To date Congress
has borrowed from these banks 465 Billions of Dollars, in Federal Reserve
One can only ponder where the Federal Reserve Banks can obtain such
vast sums of "money" to loan. ... The answer is not
readily obtainable. However, in the Federal Reserve's own library is a
copy of a 1939 edition of THE FEDERAL RESERVE SYSTEM, ITS PURPOSES AND
FUNCTIONS, on page 83 Et. Seq.:
"An increase in reserve requirements does not increase the power
of the Federal Reserve Banks to lend or to hold securities. The lending
and investing power of the Federal Reserve Banks is not derived from
member bank reserve deposits, and larger required reserve balances do
not increase that power. The lending power of the Federal Reserve Banks,
is a statutory power whereby the Federal Reserve Banks may acquire
promissory notes, acceptances, bonds, and other obligations and give in
exchange Federal Reserve Notes of Credit to the Reserve accounts of
member banks. ... Having such power, their ability to lend and to
purchase securities is not limited by the volume of funds deposited with
them by their member banks. ... Federal Reserve Bank credit resembles
bank credit in general, but under the law, it has a limited and special
use as a source of member bank reserve funds. ...
"Federal Reserve Bank Credit, therefore, as already stated, does
not consist of funds that the reserve authorities get somewhere in order
to lend, but constitutes funds that they are empowered to create. The
process of creation is one of giving the promise of the Federal Reserve
Notes and deposit credits ... that is, Federal Reserve Bank promises or
"liabilities" as they are commonly called, serve in the form
of Federal Reserve Notes as the principal element of circulation medium,
and serve in the form of reserve deposits as a basis for the extension
of credit by member banks."
In other words, the Federal Reserve Banks merely create whatever funds
it wishes to loan, without restraint. ...
The Federal Reserve did not have the 465 Billion to loan Congress, so
it merely created it upon the credit of the United States, giving nothing
of value to Congress, but demanding in return value from the people in the
form of interest and, when possible principal payments.
The interest that the people pay upon the national public debt
(creation and use of Federal Reserve Notes) amounts to a taking of private
property without just compensation, in contravention to the 5th
What have the Federal Reserve Banks done for Congress that Congress
could not do for itself?
There would be no objection to Congress borrowing something of value
from the banks, such as lawful money, gold and silver dollars or bullion,
but when the banks create the money, the United States guarantee the
redemption of the paper. The people pay an interest to the banks, and the
banks end up owning all the property because of their unrestricted
inflation of the Currency; the sanity of this entire process is above our
The taking of the wealth of the people to pay an interest tribute to
these private banks for a contract containing no lawful consideration
again makes one wonder what has happened to sanity and justice for which
our forefathers spilled their blood.
During the June 6, 1960, second session of the 86th Congress, at
the hearings before the Subcommittee #3 on H.R. 8516 and H.R.
8627, the Committee on Banking and Currency, lead by the Honorable
Wright Patman, posed several questions to Mr. Allen, the
President of the Federal Reserve Bank of Chicago; at page 41 we find:
Mr. Patman: Now Mr. Allen, when the Federal Open Market
Committee buys a million dollar bond you create that money on the credit
of the nation to pay for that bond don't you?
Mr. Allen: That is correct.
Mr. Patman: And the credit of the nation is represented by
Federal Reserve Notes in that case, isn't it? If the banks want the
actual money, you give them Federal Reserve Notes in payments don't you?
Mr. Allen: That could be done, but nobody wants the Federal
Mr. Patman: Nobody wants them, because the banks would rather
have the credit as reserves but that is the modus operandi if currency
Mr. Allen: That is right.
Mr. Patman: In other words, when the open market committee
buys a million dollar bond, it doesn't take a million dollars out of
anybody's account; there is no money taken from any bank or any
individual; they create that money on the books of the banks, the 12
Federal Reserve Banks, to by that bond, don't they?
Mr. Allen: That is correct.
June 6, 1960 @ pgs. 39 and 43
What value are we repaying? There wasn't any money in the banks, and
none was actually loaned to the government, yet the income tax is laid to
return, if possible, the principal borrowed or at least the interest
The Income Tax as a tax that must be imposed solely to pay the interest
and, if possible, the principle borrowed from the banks. ...
The Income Tax is the ability by which the banks tax out of circulation
the credit they have
The Income Tax is only necessary because of our debt-money system; when
the money is borrowed into circulation, there must be a mode of repayment,
that mode is the Income Tax. ...
If the money were paid into circulation as was intended by the issue of
every coin and currency created by our government. ... There would be no
need of the Income Tax. ...
Does any intelligent being, believe for one honest moment that the
national debt could ever be
As long as there is an interest charge against the Federal Reserve
Notes that debt could never be paid. ... One might pay back to the bank
all the money borrowed, but, if all the money borrowed, is all the money
that exists (as in the case of Federal Reserve Notes), where would we then
have anything to pay interest?
In 1972, the Federal Government borrowed from the Banks 465 Billion
Dollars in Bank Credit at interest amounting to 22 Billion Dollars. In
1973, congress will pay this debt to the Banks; 487 Billion Dollars to the
Banks Credit will be due.
Congress must, to pay this debt, tax every Federal Reserve Note out of
circulation. ... at that point Congress would only be short 22 Billion
This simple rule of logic is: You cannot give more than you have, or,
more than exists.
What must necessarily happen: Congress must renew the debt either by
re-borrowing 467 Billion Dollars (which of course the bank would not
permit) or pay the interest and re-borrow the principle. The new debt for
the next fiscal year is 465 Billion Dollars, however, now only 443 Billion
Dollars actually exists, the balances of the money, i.e. interest, is now
the property of the bank. ...
Progressing through stages, the second year Congress again goes to the
bank to extend the loan, Congress again owes 487 Billion Dollars, but it
now only has 443 Billion Dollars with which to repay that loan, now
Congress is 44 Billion Dollars with which to repay that loan, now Congress
is 44 Billion Dollars short. ... ultimately the banks have all the Federal
Reserve Notes back as its property and the United States is still owing
the original 465 Billion Dollars with no way to pay that debt.
The banks have all the money, own all the property, and the citizens
must ultimately borrow from the banks to pay their taxes just to maintain
the interest payment. ...
Even if Congress should attempt to repay the debt in small increments
without borrowing additional funds, the recession that must follow as the
money is taken from circulation would totally destroy our economy and
drastically reduce our ability to pay any further taxes until that money
was borrowed back into circulation.
We sometimes wonder why our elected officials in Washington desire to
spend so much money. They spend more each year than they receive in taxes;
yet, the year Congress balances its budget and has no need for deficit
spending, that will be the year of total economic collapse of our country
will commence; for, it is these deficits that allow us to maintain a
circulating principal by which we may pay some interest without borrowing
from the banks ourselves.
The following excerpts are from the 1957 Senate Finance
Investigation Committee in which Senator Malone posed several
questions to William McChesney Martin the now former Chairman
of the Federal Reserve Board.
Sen. Malone: The public is catching up with you, my personal
opinion is, for whatever it may be worth, that if we don't stop
inflation, go back on the Gold Standard, stop the free trade with low
wage nations by refusing to extend the 1934 trade agreement act in June,
1958, and stop this centralization of power in Washington; if we do not
accomplish these things in the next two or three years, there will not
be another Republican President in the life of the youngest Republican
voter today. This is how serious it is, in my opinion. ... What does the
Constitution say about the coining of money and the fixing of the values
Mr. Martin: The power is in Congress.
Mr. Malone: Where is it now?
Mr. Martin: The Congress has delegated authority over the
money supply to the Federal Reserve System.
Mr. Malone: But we can abolish or amend the Federal Reserve
Act any time we want to.
Mr. Martin: That is right.
Mr. Malone: But Congress has nothing to do with it, unless
they amend the act do they? We can talk to you, but we cannot do
anything through the Federal Reserve Act, your judgment cannot be
questioned for anything done under the act unless we amend it.
Mr. Martin: That is correct, but the Act itself can be changed
at any time.
Mr. Malone: Of course it can, but at the moment, Congress has
not one iota of authority except the authority to change the act, in the
coining of the money, and the fixing of the value thereof, do they?
Mr. Martin: Well, Congress decided this was a problem, that
money will not manage itself, so they set up this means of handling.
Mr. Martin: .... I think Congress is certainly watching the
Federal Reserve System very carefully.
Mr. Malone: I do not think they have watched it at all, I
think this is the first time Congress has looked at it for 24 years. ...
I believe, I actually believe this, that if the people of this nation
suddenly fully understand what the Congress has done to them over the 40
years, they would move on Washington, they would not wait for an
election. ... It all adds up to a preconceived plan to destroy the
economic and social independence of the United States.
Now, only is there no authority on the part of Congress to delegate its
responsibility under Art. I, Sec. 8, par. 5 of the Constitution,
but the Supreme Court, in the case of Ling Su Fan v. US, held,
their power to be nondelegatable. See Ling Su Fan v. U.S., 218 US
302, 54 L.Ed. 1049
Thomas Jefferson once said: "If the American people ever
allow private banks to control the issue of their money, first by
inflation and then by deflation, the banks and corporations that will grow
up around them will deprive the people of their property until their
children will wake up homeless on the continent their fathers
I must assert here, that, the power over money rests entirely with
Congress, it is an act of sovereignty, and one strictly legislative in
"All legislative power herein granted shall be vested in a
Congress of the United States."
Article I, Section 1, U.S. Constitution
We the people have to Congress the power to borrow money on the credit
of the United States, and to coin the money and regulate its value: Article
I, Section 8, Clauses 2 & 5 respectively.
Since Congress derives its power from "We the People"
and "We the People" have never amended the Constitution
to enable Congress to delegate strictly legislative power, it must be
asked, where does such authority exist?
The answer is that no such authority does exist; Congress has side
stepped its responsibility; this responsibility pertains to what must
perhaps be the most important function of Congress, creation and
management of the nation's money.
We the people want to know why Congress has forced us to borrow our own
money into circulation at interest with United States bonded indebtedness?
We believe as did President Lincoln, that if a nation can issue a
$5 bond, it can issue a $5 bill.
We the people gave no authority to the Federal Reserve Bank to
coin or create the nations money. We delegated that power to Congress.
Even if Congress should feel incompetent to manage the nation's money,
it has no power to delegate nor to relinquish that authority.
The Supreme Court has held some of the powers of Congress to be
delegatable, but no power strictly legislative in nature Panama Ref.
Co. v. Ryan, 293 US 388, 79 L.Ed. 446. Even where the power was held
to be delegatable, Congress was required to lay a policy and to set up a
standard. Avent v. U.S., 266 US 127; Central Securities Corp. v.
U.S., 287 US 12; U.S. v. Chemical Foundations Inc., 271 US 1.
In the statute creating the Federal Reserve System, and in its
subsequent amendments, there appears no stated limitation on the powers
and authority of this corporation.
To constitute a proper delegation of legislative power, Congress must
Field v. Clark, 143 US 640; Hampton & Co. v. U.S., 276
US 394; Buttfield v. Stranahan, 192 US 470; Union Bridge Co.
v. U.S., 204 US 364; U.S. v. Shreveport Grain & Elevator Co.,
287 US 77; U.S. v. Grimaud, 220 US 506
A definite standard for administrative action to carry out that
An administrative procedure and action which complies with due
process of law.
The "Federal Reserve Act" does not place
limitations on the reserve authority, or upon the Federal Reserve banks.
Authority of the Federal Government in general may not be delegated,
without restrictions and safeguards, even when power is delegatable,
control must, at all times, remain in the Congress ... Panama Refining
Co. v. Ryan, 293 US 386, 79 L.Ed. 446.
The "Federal Reserve Act" is without authority;
Congress has made an unlawful delegation of power strictly legislative ...
"Delegation by Congress of its essential legislative functions
is precluded by the provisions of the Federal Constitution. Article
I, Section 1, that all legislative powers granted to the Federal
Government shall be vested in Congress and of Article I, Section 8,
Clause 13, empowering Congress to make all laws which shall be
necessary and proper for carrying into execution its general
Panama Ref. Co., supra. at 388;
Union Bridge Co. v. U.S., supra.;
Wayman v. Southland,
10 Wheat. (U.S.) 1, 6 L.Ed. 253;
Schechter Poultry Corp. v. U.S.,
295 US 495, 79 L.Ed. 1570;
Knickerbocker Inc. Co. v. Stewart,
253 US 149, 64 L.Ed. 834
It must be understood that the "Federal Reserve Note"
is not United States money, as defined by our Constitution, although it
might be implied by the legal tender at 31 USC 392:
(NOTE: all U.S. Code citations cited herein are those of
"All coins and currencies of the United States (including
Federal Reserve Notes and circulating notes of Federal Reserve banks,
and national bank associations) regardless of when coined shall be legal
tender for all debts public and private, public charges, taxes, duties,
Our Constitution has declared that gold and silver shall be the money
of the United States. Congress being fully aware of the will of the people
passed Section 311 of Title 31:
"It is declared to be the policy of the United States to
continue to use both gold and silver as standard money, and to coin both
gold and silver into money of equal intrinsic and exchangeable value
31 USC 311
The United States can declare Federal Reserve Notes to be a legal
tender in payment of money debts, but the United States cannot change the
standard of value nor make anything lawful money, but the value of gold
In the United States, the dollar has been declared to be the standard
unit of money - and -
The dollar of gold 9/10 fine consisting of the weight determined under
the provisions of Section 821, of this Title shall be the
standard unit of value, and all forms of money issued or coined by the
United States shall be maintained at a parity of value with this standard
... (31 USC 314)
Gold has been declared to be the standard of value for the dollar, just
as the inch is declared to be standard of value for the foot and the ounce
for the pound.
In the first "United States Coinage Act" of
April 2, 1792; it was declared in Section 11, that the relative
value of the two dollars, silver to gold, was to be 15 parts silver to 1
part gold. ... Here we see that Congress had established a standard that
being the gold dollar containing at that time 24.75 grains fine, and to
maintain the silver at a parity of value with that standard as 371.25
grains fine silver.
Then of course Congress declared the silver coins of the United States
to be a dollar (31 USC 316).
Congress had never, and could never, declare Federal Reserve Notes to
be a "Dollar." What then are these Federal Reserve Notes?
They are not a measure of value within themselves, but only exist as the
representative of value. Our money must have a measure of value with the
gold dollar. Congress declared that:
"The gold coins of the United States shall be a one dollar
piece, which at the standard weight of 24.75 grains shall be the unit of
31 USC 314 and record
of the 42nd Congress, Feb. 12, 1873
"... which coins shall be a legal tender in all payments at
their nominal value when not below the standard weight and limit of
tolerance provided in this act for the single piece, and when reduced in
weight, below said standard and tolerance, shall be a legal tender at
valuation in proportion to their actual weight."
31 USC 457 and record
of the 42nd Congress, Feb. 12, 1873
The "Dollar" is the unit of money in the United
States, just as the "pound" is the unit of weight, and
the "foot" is the unit of distance.
What are these terms in themselves without any measure of value? Could
the "foot" exist without 12 inches or could the "pound"
exist without 16 ounces?
If there were never more than 11 inches to measure, nor more than 15
ounces to weigh, would the foot or the pound exist? but the foot and the
pound would exist, but in name only; they would never be represented by
any measure of value.
We know that there must be a measure of value; in order for the units
to be maintained, we know that 12 inches are 12 inches; and also, that 12
inches represent a foot and that a foot is for all purposes that which is
the measure of its value ...
We might say that a foot is 12 inches, but we must say that 12 inches
represent a foot ...
Could a piece of paper then represent a foot? This is a relatively
simple question; of course a piece of paper could represent a foot by
being 12 inches long. ... The same holds true with all units of measure;
the pound is merely represented by 16 ounces, but 16 ounces merely
represent that pound just as a piece of paper might represent a pound by
weighing 16 ounces ...
What is a "Dollar?" A dollar, like the foot and pound,
backs a "standard of value." Congress has said that the
standard unit of value for the dollar is to be gold, 15 5/21 grains 9/10
fine by weight, and that this gold at this weight is to represent the
dollar, and further that the dollar of gold, shall be the standard unit of
value by which all coins and currencies are to be maintained (31 USC
As early as the second Congress, it was established that the
proportional value of silver to the gold dollar of 15 5/21 grains of gold
We know that the "Federal Reserve Note" does not
represent either gold or silver. There were 67 billion of dollars in bills
as of June 1973 circulating in the form of these "Notes"
and at that time there was only 10 billion Dollars in gold within the
continental United States.
The "Federal Reserve Note" represents no standard of
value and is incapable of representing the dollar. This lack of value is
fatal to its character and the intention of Congress.
What then are "Federal Reserve Notes", if they are not
Was the purpose and effect of the "Federal Reserve Act"
to authorize a new kind of money?
Did the government and the Federal Reserve bank really and in fact
contract by these "Notes" to pay the bearer on demand, or
at any time?
Are these "Notes" really promises to make other
"Federal Reserve Notes" are in many respects similar
to the "United States Notes"; they are both paper; they
are both "Notes", and they both circulate on the credit
of the United States. ...
"United States notes are engagements to pay dollars and the
dollars intended were the coined dollars of the United States."
Bank of New York v. N.Y. County,
7 Wall. (U.S.) 26
"Their name imports obligation, everyone of them expresses upon
its face an 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, a certain quantity
in weight and fineness of gold or silver ... no other dollars had before
been recognized by the legislature of the national government as lawful
Bank of New York, supra., at 30
The Supreme court held that the issue of "United States
Notes," was not an attempt by Congress to make dollars, but an
attempt to borrow dollars and to repay that debt.
From the beginning it was intended that "Federal Reserve
Notes" would represent the dollar at a ratio of $1 in "Federal
Reserve Notes" to be equal to $1 in value ... but by 1935; the
ratio of gold to "Federal Reserve Notes" had slipped to
40% and at that time it was enacted:
"Every Federal Reserve Bank shall maintain reserves in gold
certificates, or lawful money of not less than 35% against its deposits,
and reserves in gold certificates of not less than 40% against its
Federal Reserve notes in actual circulation."
12 USC 413
as enacted on August 23, 1935
Now the ratio was established at $2.50 in "Federal Reserve
Notes" to be equal to $1 in value; however, this, too, did not
last for long; in less than 10 years, the ratio had changed once more, and
out of necessity the reserve requirements were reduced to 25% (see the "Act"
of June 12, 1945, 59 Stat. 237).
The "Act" of June 12, 1945, established a new ratio
for the value; at that time $4 in "Federal Reserve Notes"
circulating that the banks and the government were beginning to become
nervous; they then enacted legislation to attempt to curb the redemption
of "Federal Reserve Notes" by restricting the Federal
Reserve banks from paying out "Notes" of another Federal
Reserve bank (See "Act" of July 19, 1954, 68
By 1965, all was totally lost; the ratio of "Federal Reserve
Notes" then circulation and Bank Credit to the value standard was
approaching $400 to $1; that is to say, 400 "Federal Reserve
Notes" to be equal to $1 in value. It was out of desperate
necessity that Congress enacted legislation eliminating reserve
requirements altogether (See "Act" of March 3,
1965, 79 Stat. 5).
By 1968, Congress finally admitted what was known for some 35 years,
that the "Notes" were hopelessly depreciated and no
possibility of redemption existed (See "Act" of
March 18, 1968, 28 Stat. 50).
If history is at all accurate, we can soon expect Congress to issue a
new Currency to be used to replace the present Currency at a discount of
approximately 100 to 1 or 100 "Federal Reserve Notes" for
1 Note of the new Currency. If any less of a depreciation is maintained at
that time, subsequent changes in Currency must prevail until that level is
This was exemplified as recently as 1780, 193 years ago our Currency
followed the same path and ultimately died in the hands of those who
"Almost the first financial steps of Congress after the
hostilities began was to vote an issue of paper money, and within a week
of the battle of Bunker Hill, under date of June 22, 1775
authority was given for an issue of $2,000,000. of bills of credit,
based upon the credit of the States with a careful apportionment of the
amount each colony should redeem between 1779 and 1782. Between that
date (June 22, 1775) and November 29, 1779, a period of about 4 years
and a half, forty of these emissions with a total issue of $241, 552,
780. were authorized, and there is a strong possibility that more was
surreptitiously put out by the embarrassed treasury officials. ... In
addition to the continental issues the States put out $209,524,776. in
paper notes. ..."
Congress itself did not declare these issues to be a legal tender, but
called upon the States to do so. The Congress lacked authority under the "Articles
of Confederation" to declare "legal tender".
The States acknowledged with appropriate legislation and enacted ...
"That if any person shall hereafter be so lost to all virtue and
regard for his Country as to refuse to accept its notes, such person
shall be deemed an enemy of his Country."
When depreciation of the bills became so marked that wages and prices
began rapid increases, the legislature was forced to pass wage and price
controls; the first of these were passed in December of 1776, but, as the
depreciation was inherent in the paper itself, all attempts to support the
credit of the bills failed; depreciation was quickly accelerated.
Valuation of "Notes" as depreciated to money:
1779- January 14 .................. 8 to 1
February 3 ....................... 10 to 1
April 2 .......................... 17 to 1
May 5 ............................ 24 to 1
June 4 ........................... 20 to 1
September 17 ..................... 24 to 1
October 14 ....................... 30 to 1
November 17 .................... 38.5 to 1
1781- January ................... 100 to 1
In May 1781 the "Notes" ceased to pass as Currency. ...
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
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:
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
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
"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
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
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
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
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
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 Notes", 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
"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
"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 note is legal tender for all debts public and
Until 1968, the "Note" was intended to be paid in
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
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
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
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
"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
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
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, its Constitutional 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,
"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 a legal
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
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
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
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
"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
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
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
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
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
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
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"
"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
Cook v. State,
130 Ark. 95;
15 Am. & Eng. Enc. of Law, 701
"The "Dollar" means lawful money of the United
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,
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
"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
"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
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
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,
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
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
"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
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."
Hepburn v. Griswald,
"Indeed, it may not improperly be said that the Federal
Constitution is the government of the United States, though in common
parlance we apply that term to administration. It was the Constitution
that the convention formed and the people ordained for their government.
The Constitution provided for installing temporary administrations to
administer, to execute the provisions of the Constitution, but it
constituted no body of men as the government, it provided for placing
men temporarily in office to execute the powers specified in the
Constitution, and nothing more. The very preamble to the Constitution
This Constitution, then, is in fact, the government created by our
fathers, and when it dies, that government expires. And officers that
carry on a government independent of a Constitution, constitute but a de
facto government of assumed and unlimited powers."
Thayer v. Hedges,
22 Ind. 296
"Mr. Webster in his great debate with Hayne on Foote's
resolution in 1830, expressly asserted that the Constitution was the
government of the United States, he said "they (our fathers)
ordained such a government; they gave it the name of a Constitution. It
contemplates every contingency, and makes provisions for each and all,
and it indicates the powers, embracing all that are necessary and
proper, that administration may exercise in each and all, to assume the
contrary would be against the fact, and an impeachment of the wisdom of
the fathers who made the Constitution. It provided for the time of
peace, and the powers of administration therein. It provided for the
contingency of foreign war and the powers of administration therein. It
provided for the contingency of insurrection and rebellion and specifies
the powers and all the power necessary and proper to be exercised by
administration herein, and the country had had experiences in all these
exigencies when the Constitution was formed. The importance, then of
carefully studying that Constitution, assuming it to be still a living
instrument is manifest.
All legislative powers herein granted shall be vested in a Congress
of the United States, which shall consist of a Senate and House of
Representatives. (But) the powers not delegated to the United States by
the Constitution, nor prohibited by it to the states, are reserved to
the states respectively, or to the people.
This, then, locates all the governmental power in the United States
that can be exercised by a legislative, a part of it is granted to the
Federal Congress; and that part is all that it can exercise. ...
The power to coin money is one power, and the power to declare any
Thing a legal tender is another and different power both possessed by
the states severally at the adoption of the Constitution; that by that
adoption the power to coin money was delegated to the Federal government
while the power to declare a legal tender was not, but was retained by
the states with a limitation, thus: "Congress should have power to
coin money," and "No state shall make anything but gold and
silver coin a legal tender." States then though they could not coin
money, could declare that gold or silver coin, or both whether coined by
the Federal Government or the Spanish or Mexican Governments, could be a
legal tender. And as Congress was authorized to make money only of coin
and the states were forbidden to make any Thing but coin a legal tender,
a specie currency was secured in both Federal and State governments,
there was then no need of delegating to Congress the power of declaring
a legal tender in transactions within the domain of the Federal
Legislation the money coined by it was the necessary medium.
The words "to coin money" regulate the value thereof and
"of foreign coin" do not include the right to make coined
money out of paper, if they could be so interpreted then the states must
have a right to make such paper a legal tender be incidental to any
granted power, could it be a necessary and proper incident for carrying
such power into effect.
Not every act of Congress is to be regarded as the Supreme Law of the
Land; not is it by every act of Congress that he Judges are bound."
Hepburn v. Griswald,
"The extension of power by implication was regarded with some
apprehension by the wise men who framed, and by the intelligent citizens
who adopted the Constitution."
Hepburn v. Griswald,
"The means used in the execution of an express power
"should be bona fide, appropriate to the end" within the
letter and spirit of the Constitution."
McCullough v. Maryland,
4 Wheat. 421
"It is not doubted that the power to establish a standard of
value by which all values may be measured; ... in the United States, so
far as it relates to the precious metals; ... is vested in Congress, by
the grant of the power to coin money. But, can a power to impart these
qualities to notes or promises to pay money, ... be derived from the
coinage power or any other expressly given? It is certainly not the same
power as to coin money, nor is it in any reasonable or satisfactory
sense an appropriate or plainly adopted means to the exercise of that
power. Nor is there more reason for saying that it is implied in, or
incidental to, the power to regulate the value of coined money of the
United States, or of Foreign coins ... this power of regulation is a
power to determine the weight, purity, form, impression, and
denomination of the several coins and their relation to each other, and
in relations of Foreign coins to the monetary unit of the United
Hepburn v. Griswald,
Supra., 615 & 616
"Nor is the power to make notes a legal tender the same as the
power to issue notes to be used as currency, the old Congress, under the
Articles of Confederation, was clothed by express grant with the power
to emit bills of credit, which are in fact notes of circulation as
currency; and yet that Congress was not clothed with the power to make
these bills a legal tender in payment. And the Supreme Court has held
that the Congress, under the Constitution possesses as incidental to
other powers, the same power as the old Congress to emit bills or notes;
but it was expressly declared at the same time this decision concluded
nothing on the question of legal tender, indeed, we are not aware that
it has ever been claimed that the power to issue bills or notes has any
identity with the powers to make them a legal tender.
On the contrary, the whole history of the country refutes that
notion. ... The power to issue notes and the power to make them a legal
tender are not the same power."
Thayer v. Hedges,
Hepburn v. Griswald,
"United States legal tender notes circulated with the national
bank notes which notes were never shown unfavorable discrimination even
though they were not made a legal tender."
Hepburn v. Griswald,
"The price (of goods) will rise in a ratio of the depreciation,
and this is all that could happen if its notes were not made a legal
tender, ... if the quantity issued be excessive, and redemption
uncertain and remote great depreciation will take place."
Hepburn v. Griswald,
Now witness this very "Act" with the "Federal
"If on the other hand, the quantity is only adequate to the
demands of business, and confidence in early redemption is strong, the
notes will circulate freely, whether made a legal tender or not."
Hepburn v. Griswald,
A $, according to Noah Webster's 20th Century Dictionary of the English
Language at 43, is a symbol of dollar; a coin or piece of paper money of
the value of one dollar.
We know that the paper itself has no value other than the value it
achieves by the pledge of the United States to pay one dollar. Once that
pledge is removed, the paper then no longer represents value; it is no
longer representing the dollar. This "pledge" of
redemption was officially removed on October 28, 1977 with Public Law
95-147 (91 Stat. 1229) at subsection (c):
"(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 USC 463), shall not
apply to obligations issued on or after the date of enactment of this
Congress may have declared that the payment in Currency, dollar for
dollar in any Currency, is legal tender payment for debts; but Congress
has not, and in fact Congress could not, declare that receiving of payment
in any Currency constitutes a payment for debts in dollars.
It can not be permitted that a government ordained to establish justice
can continually repudiate its obligations.
When the government withdraws its pledge, it must necessarily exempt
its obligations from all forms of taxation.
The "Federal Reserve Note," being at best the evidence
of an imposed tax, is exempt from all further taxation.
That "Note" or "tax receipt" does not
constitute "income" but actually constitutes the giving
of goods and serves labor and commodities without compensation.
Justice Field, the lone dissenter in Julliard v. Greenman,
had a tremendous insight and understanding for what was to come as stated
in his eloquent opinion:
"From the decision of the court I see only evil likely to
follow. There have been times within the memory of all of us when the
legal tender notes of the United States were not exchangeable for more
than one-half of their nominal value, the possibility of such
depreciation will always attend paper money. This inborn infirmity no
mere legislative declaration can cure, if Congress has the power to make
the notes a legal tender and to pass as money or its equivalent, why
should not a sufficient amount be issued to pay the bonds of the United
States as they mature? Why pay interest on the millions of dollars of
bonds now due, when Congress can in one day make the money to pay the
principal? And why should there be any restraint upon unlimited
appropriations by the government for all imaginary schemes of public
improvements, if the printing-press can furnish the money that is needed
Dissenting opinion of Justice Field, Julliard v. Greenman, 110
The wise Justice foresaw what is happening today; let us expand upon
his theory. If Congress, by the means of a printing press, can print all
the money it needs for any imaginary scheme, and it has in fact evolved to
a time in the history of the United States when it can make something of
value out of nothing; then any political body, who uses this Colonial
system of taxation, can no longer justify taxing its Citizens by means of
the socialistic tax on bankers' paper. The mere printing of the paper with
unlimited restraint would serve as a new form of tax. The continuation by
Congress to tax its Citizens in any other manner, when it professes to
have this ability, is nothing less than plunder in the form of unlawful
confiscation of private property to unlawfully pay the unnecessary
interest on an unnecessary government debt because of the purported
delegation of creating demand deposit "money" to bankers
under the fractional-reserve "National Bank Act"
and the "Federal Reserve Act."