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Matt Erickson
Dollars and nonCents
By: Matt Erickson
Dollars and nonCents
Released into the Public Domain April 17, 2014
Dollars and nonCents is available as a free electronic download at:
www.PatriotCorps.org www.Scribd.com/Matt_Erickson_6 www.Archive.org
For information on a royalty-free printed book, please see www.PatriotCorps.org or www.OnDemandBooks.com
Restoring Liberty and Justice, Once and For All Vancouver, Washington
To my loving wife, Pam; for all her love and support.
Front Cover: Philadelphia building which housed the first bank of the United States. Back Cover: Philadelphia building which housed the second bank of the United States.
Table of Contents Chapter 1. American Lawful Tender Money .............................................. 1 Section 1. April 2, 1792 Coinage Act .................................................. 1 Section 2. Standard Unit of Value ........................................................ 9 Section 3. Legal Tender Value — Weight & Purity ................................ 10 Section 4. Regulating the Value of Foreign Coinage ............................. 14 Section 5. Money - vs. - Coin ............................................................. 17 Section 6. June 28, 1834 Coinage Act ............................................... 21 Chapter 2. Political Feuding .................................................................. 31 Section 1. The Banks of the United States ............................................ 31 Section 2. The Independent Treasury .................................................. 33 Chapter 3. Promise Money and the Courts ............................................. 41 Section 1. Bronson v. Rodes, 74 U.S. 229 (1869) ............................... 41 Section 2. Hepburn v. Griswold, 75 U.S. 603 (1870) .......................... 42 Section 3. Legal Tender ..................................................................... 43 Section 4. The Legal Tender Cases, 79 U.S. 457 (1871) ...................... 45 Section 5. Criminal Jurisdiction .......................................................... 48 Section 6. First Bank of the United States ............................................. 54 Section 7. in all Cases whatsoever ..................................................... 57 Section 8. Electors ............................................................................ 61 Section 9. Legislative Representation in States ...................................... 62 Section 10. within the United States .................................................... 65 Section 11. Presidential Elections ....................................................... 66 Section 12. The Legal Tender Cases (concurring opinion) ...................... 69 Section 13. Juilliard v. Greenman, 110 U.S. 421 (1884) ..................... 71 Section 14. Necessary and Proper-vs.-All Means Not Prohibited ............ 80 Section 15. Exigencies of Government ................................................ 84 Section 16. Promise Money ............................................................... 86 Chapter 4. Gold 'Confiscation' ............................................................. 93 Section 1. F.D.R. .............................................................................. 93 Section 2. Executive Order No. 6102 ................................................ 96 Section 3. Gold Clauses .................................................................. 102 Section 4. Gold Reserve Act of 1934 ............................................... 105 Chapter 5. Restoring Liberty and Justice Once and For All. ..................... 109 Section 1. Cohens v. Virginia, 19 U.S. 264 (1821) ........................... 109 Section 2. Once and For All Amendment .......................................... 113 Section 3. Implications .................................................................... 116
Chapter 6. Individual Restorative Action ............................................... 121 Section 1. Market Reforms ............................................................... 121 Section 2. 18 USC 485 .................................................................. 127 Section 3. February 12, 1873 Coinage Act ...................................... 128 Section 4. 18 U.S.C. 486 ............................................................... 129 Section 5. June 8, 1864 Act ............................................................ 132 Section 6. Private Mints ................................................................... 134 Section 7. Branch Mints .................................................................. 136 Section 8. Except as Now Authorized by Law .................................... 137 Section 9. Gold Bullion Coins .......................................................... 145 Section 10. The Grain of Gold ......................................................... 148 Section 11. Silver ........................................................................... 152 Section 12. Electronic Trading in Gold .............................................. 153 Chapter 7. State Restorative Action ...................................................... 161 Section 1. Gold and Silver Coin ....................................................... 161 Section 2. Gold and Silver Bi-Metallism ............................................. 162 Section 3. June 28, 1834 Coinage Act ............................................. 167 Section 4. February 21, 1853 Coinage Act ...................................... 172 Section 5a. States Declarations of Tender .......................................... 175 Section 6a. May States Regulate the Value of Money? ........................ 176 Section 7. Varied Money in each State ............................................. 177 Section 6b. May States Regulate the Value of Money? ........................ 180 Section 8. Gold and Silver Coin ........................................................ 183 Section 9. State of Utah Legal Tender Legislation ................................ 184 Section 10. Market-Rate Value Legal Tender Legislation ...................... 185 Section 5b. State Declarations of Tender ........................................... 187 Chapter 8. Federal Restorative Action .................................................. 189 Section 1. Get Out Of Our Way! ..................................................... 189 Chapter 9. Summation — Where to Go From Here ............................... 191 Section 1. Education ....................................................................... 191 Section 2. Ratification of a Constitutional Amendment......................... 192 Section 3. The Grain of Pure Gold .................................................... 193 Section 4. Establishing an Electronic Gold Exchange .......................... 193 Section 5. Other Efforts ................................................................... 194
Foreword Although the present dollar of the United States is but a slip of paper stamped with an official government seal, this was hardly always the case. All lawful tender monetary acts during the first 70 years under the Constitution dealt exclusively with gold and silver coin (copper cents and half-cents, which weren't a tender, were also struck). Given this sound beginning, just how did we get so far off our proper original course? That is the ultimate journey of this book, showing precisely how the United States were cunningly diverted away from legal tender money remaining only coins of gold and silver at precise weights and purity. Learning this specific information then informs readers of the mechanism how the United States in other cases ignores the spirit of the Constitution also with impunity. But learning this material isn't much good if nothing could be done to correct matters: accordingly this book provides the blueprint needed for Restoring Liberty and Justice, Once and For All; for returning these United States of America to limited government operating under strict construction of the whole U.S. Constitution. The first legal tender paper currencies emitted under the Constitution entered into commerce beside gold and silver coin during the Civil War. When gold was effectively withdrawn from circulation during the Great Depression, the typical legal tender circulating within the United States remained silver coin and paper currency. That is, until the mid-1960's, when at the direction of Congress the once-proud mint began passing off cupro-nickel coins at values previously reserved for silver coins, as would any counterfeiter. Thereafter, the only legal tender remaining in common circulation was paper.
The legal tender monetary history of the United States may therefore be summed up as initially only gold and silver coins; transitioning to gold, silver and paper as the latter was added into the mix. Legal tender eased for a time to silver and paper, before effectively ending in paper. The transition to paper away from gold and silver begun in 1862 was thus completed a century later, in 1965. In no other category is the diversion away from strict construction of the Constitution more dangerous to American liberty than involving our money. After all, Americans throughout the country spend their whole adult lives working and investing to earn money, and then using that money to purchase their needed goods and services. With money playing this pivotal economic role, it is appropriate to learn our Constitution's fundamental monetary principles while keeping a watchful eye on how they were artfully circumvented. While paper currency works well enough as a medium of exchange, it has performed extremely poorly as a store of value, again proving paper currencies wholly incapable of serving as the Standard of Value required of our constitutional money. The primary drawback to paper currency is that it is a true promissory 'note' which represents debt. Long-term exclusive circulation of paper money loaned into existence at compound interest has worked its mathematical, rolled-over magic, and, without surprise, the United States is awash in debt. Today we Americans — individuals, businesses, and governments — are up-to-our-eyeballs in debt, debt which crushes us as an equalopportunity destroyer without consideration of race, color or creed.
Although man has proven impressively-productive, he has not yet proven exponentially-productive and able to keep ahead of compound interest rates of return over the long haul — the longer we exclusively use paper currency as money and ignore proper constitutional limitations on government, the further enslaved we become, both to debt and unrestricted government. Whereas the Civil War is typically viewed as the justified means needed to rightly-free the improperly-enslaved black race, perhaps it should instead be viewed really as the start of the unjustified transition towards universal enslavement of all races — enslavement by debt and omnipotent government. Does the long-standing exclusive use of an ever-depreciating legal tender paper currency earning compound interest have everything to do with our figurative enslavement to debt? Or are gold and silver but 'ancient relics', inconsequential throw-backs to an earlier simple era, meaningless for today's sophisticated economy? A careful examination into our nation's monetary history will help answer such questions.
Chapter 1. American Lawful Tender Money This chapter provides compelling evidence of an original, strict and perhaps even fanatical intention by Congress to value American lawful tender money solely according to weight and fineness of gold and silver, in proper accordance with the U.S. Constitution.
Section 1. April 2, 1792 Coinage Act
The first coinage act under the U.S. Constitution was the legislative act of April 2, 1792.1 Several of its sections clearly show that American lawful tender money is only gold and silver coin at precise weights and purity. But perhaps the oddest feature of the act — the purity standard therein set for all silver coins — shows just how determined were members of Congress as they instituted our gold and silver coin monetary standard. The 'standard' initially set for silver coins — the ratio between pure silver to the total weight of the coin (including the copper alloy) — was specified in Section 13 of the 1792 act to be 1,485 parts pure silver out of 1,664 total parts (with 179 parts copper), stating:2
"That the standard for all silver coins of the United States, shall be one thousand four hundred and eighty-five parts fine to one hundred and seventy-nine parts alloy; and accordingly that one thousand four hundred and eighty-five parts in one thousand six hundred and sixty-four parts of the entire weight of each of the said coins shall consist of pure silver, and the remaining one hundred and seventy-nine parts of alloy; which alloy shall be wholly of copper."3
1. 1792, April 2; Chapter 16. (Volume I, Statutes at Large, Page 246 [1 Stat. 246]).
See also: The public domain compilation of America's monetary laws; Monetary Laws of the United States, Matt Erickson, Volume II, Appendix D, Page 100, 2012. (freely available electronically online at www.PatriotCorps.org and www.Scribd.com/matt_erickson_6).
Section 1. April 2, 1792 Coinage Act
That the initial silver standard involved such a precise but oddlyproportioned ratio of 1,485/1,664ths-fine silver stands even further out of the ordinary considering the standard set for gold coins in Section 12 was a simple 11 parts pure gold-to-1 part alloy (11/12ths-fine [.91666-fineness {or 22/24ths-pure, which is 22-carat gold}]). The particular silver purity of 1,485/1,664ths-fine established in 1792 has baffled many modern-day Americans who have sought to understand it. Book publishing company Doubleday of New York published "the most comprehensive guide to U.S. coins ever published" in 1988, written by renowned American numismatist Walter Breen, entitled, Walter Breen's Complete Encyclopedia of U.S. and Colonial Coins.4 In his magnum opus, Breen infers that this "awkward fineness" was the result of inadequate attempts to match the supposed-fineness of the Spanish milled dollar (the international trade coin of the day and the coin after which the American dollar was otherwise modeled), writing:
"primitive assaying methods available at the time prevented authorities from learning the true Spanish standard, which was 65/72 silver and 7/72 copper."5
2. Copper, of course, was added as an alloy to silver to 'toughen' the coin, to better resist abrasion during circulation and wear in one's pocket or purse. 3. 1792, April 2; Chapter 16, Section 13. (I Stat. 246 @ 249).
See also: Monetary Laws, Volume II, Appendix D, Page 102, 2012.
www.PatriotCorps.org. 4. Reference to the book as quoted on the inside flap of its front cover. 5. Walter Breen's Complete Encyclopedia of U.S. and Colonial Coins, Walter Breen, Doubleday, New York, Page 423, 1988.
Chapter 1. American Lawful Tender Money
Breen continues, after acknowledging the mint Assayer's complaints about working with the "cumbersome" fineness prescribed for silver:
"Congress in 1794 violently opposed any such change, for reasons forever obscure."6
The story told by "America's top coin historian," the man "widely considered the foremost U.S. coin historian alive today" 7 (in 1988), is that the 1,485/1,664ths–fine silver standard established in 1792 was due to an inability to learn the true standard of the Spanish milled dollar. While authorities hadn't settled on one answer for the true Spanish standard by that time,8 this author of Dollars and nonCents asserts that the single greatest consideration for the purity of American silver coins in 1792 did not involve whatsoever the 'purity' of the Spanish milled dollar, but the legal 'parity' between American gold and silver. The secondary consideration also undoubtedly had less to do with the purity than with the overall weight of the Spanish dollar. The most important number in the American purity standard established in 1792 would be the numerator in the fraction 1,485/1,664ths, which again reflects the number of parts of pure silver. The origin of this number can be shown.
6. Ibid. 7. References to the late Mr. Breen are quoted from the publisher of his coinage Encyclopedia; front and back inside cover flaps, respectively. 8. The early government report writers reporting on the establishment of a mint wrote about the wide differences in weight and especially purity of the Spanish milled dollar. Secretary of the Treasury Alexander Hamilton wrote that "the results of various assays…being as various as the (number of) assays themselves."9 9. Alexander Hamilton's January 28, 1791 Report #24 to the House of Representatives on the Establishment of a Mint.
See: Monetary Laws, Volume II, Appendix C, Page 81, 2012.
Section 1. April 2, 1792 Coinage Act
Section 11 of the 1792 act provides important clues regarding the derivation of this number, 1485, which section declared:
"That the proportional value of gold to silver in all coins which shall by law be current as money within the United States shall be fifteen to one, according to quantity of weight, of pure gold or pure silver; that is to say, every fifteen pounds weight of pure silver shall be of equal value in all payments, with one pound weight of pure gold, and so in proportion as to any greater or lesser quantities of the respective metals."10
There are two commands in Section 11 for examining the proportional value of gold and silver at the coin level. The first, of course, is the express wording that the "proportional value of gold to silver in all coins which shall by law be current as money" must be "fifteen to one." The second command of a 15:1 proportional value between gold and silver occurs not only at the coin level, but also must be maintained "according to quantity of weight" and "in proportion as to any greater or lesser quantities of the respective metals" (than also at the pound level). A few hundred grains of weight in a coin is obviously a lesser quantity of weight of the precious metals than the pound weight at 5,760 grains to the troy pound. For those readers not accustomed to the troy weight system used in the United States to weigh precious metals, a 'grain' is the smallest unit of troy weight. There are 24 grains in a 'pennyweight'; 20 pennyweights in a troy 'ounce'; and 12 troy ounces in the troy 'pound'. There are therefore 480 grains in a troy ounce and 5,760 grains in the troy pound.11
10. 1792, April 2; Chapter 16, Section 11. (I Stat. 246 @ 248 & 249).
See also: Monetary Laws, Volume II, Appendix D, Pages 101 & 102,
2012. www.PatriotCorps.org. 11. There are 7,000 (of the same) 'grains' in the avoirdupois pound used in standard American commerce, which pound is divisible by 16 ounces.
Chapter 1. American Lawful Tender Money
To compare the relative proportional values between gold and silver coins, obviously an examination of a coin of each metal is necessary. Since a one-dollar gold coin was not authorized until 1849 and since factors of ten are easiest to understand mathematically, it is appropriate to start with a ten-dollar gold eagle coin. The 'eagle' was a coin specified in Section 9 to be a coin of 247.5 grains of pure gold weighing, with alloy, a total of 270 grains and valued at $10. With 240 grains in one-half of a troy ounce, there was just over a half of a troy ounce of pure gold in the original 1792 ten-dollar eagle. Since 247.5 grains involves a measure of weight and the eagle is a coin then-made current as money, both mandates requiring 15:1 proportions between gold and silver found in Section 11 remain in play. Section 11 requires — at any given proportional value level (i.e., at any dollar [and even cent] level) — the amount of silver in coins adding to that value must be precisely 15 times greater by weight than there is gold at the same value (for 15:1 proportional value, gold-to-silver). Since the 1792 act specified that the ten dollar gold eagle must contain 247.5 grains of pure gold, it is therefore appropriate to multiply this number by 15, which equals 3,712.5 grains. According to the principle twice established by Section 11 and given the amount of gold in a ten dollar gold eagle, there must therefore be precisely 3,712.5 grains of pure silver weight in silver coins whose value equals exactly ten dollars. Since 371.25 grains of pure silver was the weight specified in Section 9 for every dollar, ten of these silver dollars do actually equate precisely with 3,712.5 total grains of fine silver.12
12. Section 9 of the 1792 act specifically called for "three hundred and seventy-one grains and four sixteenth parts of a grain of pure silver, or four hundred and sixteen grains of standard silver" in every dollar. 1792, April 2; Chapter 16, Section 9. (I Stat. 246 @ 248). See also: Monetary Laws, Volume II, Appendix D, Page 101, 2012. www.PatriotCorps.org.
Section 1. April 2, 1792 Coinage Act
Thus one finds that the gold-to-silver ratio mandate of 15:1 established by Section 11 of the 1792 act was strictly and literally followed at the individual coin level, as one would expect (given Section 11).13 Recall that Section 13 of the 1792 act specifically set the silver standard at 1,485 parts of pure silver and 179 parts of pure copper, for a total of 1,664 parts. Working with fractions (371 and 4/16ths) is difficult. So is working with numbers to the right of decimal points (in this case, 371.25). Thus, it is advantageous to get rid of fractions and any numbers to the right of decimals, so work can be performed in whole numbers. To eliminate the fraction in 371 grains and 4/16ths of a grain (or to eliminate numbers to the right of the decimal in 371.25 grains), one must multiply that number in this instance by four. Multiplying 371.25 (grains) by four equals 1,485. 1,485, of course, was the precise number of parts of pure silver specified in the standard for all silver coins by the 1792 Act. Since the numerator in the fraction of 371.25/416 was multiplied by four, so too must the denominator 416 be multiplied by four, to keep the value of the fraction equivalent. 416 times four equals 1,664. 1,664 total parts minus 1,485 parts silver equals 179. Recall that Section 13 of the 1792 Act explicitly specified 179 parts copper alloy for the silver dollar.
13. Since Section 9 of the 1792 act made the half-eagle ($5) and quartereagle ($2.50) coins proportional in weight of gold to the ten-dollar eagle and the same section made the half-dollar, quarter-dollar, dime (then spelled 'disme'), and half-disme (the U.S. had silver half-dimes then) proportional in weight with the silver dollar, all gold and silver coins remained in the strict proportion of 15 parts silver by weight for every part gold at any given dollar (and cent) value level.
Chapter 1. American Lawful Tender Money
Therefore the 1,485 parts in the purity standard for pure silver in 1792 comes not only explicitly from Section 13 of the 1792 act, but also mathematically from the clear principle twice-mandated for strict proportionality between gold and silver coins in Section 11, given the pure metal weight of both coins as specified in Section 9 and after getting rid of fractions/decimals. The actual reason(s) of the 179 parts copper, for 1,664 parts total, is more sketchy in origin, and the precise reason(s) for these numbers may perhaps be 'forever obscure' as Breen asserts. More than likely neither number (179 or 1,664) were themselves targeted, but both were simply derived as the product of the desired overall weight of the American dollar coin (416 grains), given the weight of pure silver (371.25 grains) and then eliminating fractions to work in whole numbers. Breen listed the weight of the Spanish milled dollar at 417.75 grains.14 The overall weight of the Spanish milled dollar certainly would be among the primary considerations Congress would look at when deciding to strike their own coin at the same value. It is thus quite likely that after Congress determined 371.25 grains of fine silver for the dollar (it being precisely 15 times the weight of a dollar's equivalent of fine gold [24.75 grains]), that the next consideration would be the overall standard weight for their coin; they likely considered 416 grains as the best-suited for their overall needs. 412.5 grains (which equates with 90% silver when the pure-silver weight remains at 371.25 grains [which numbers and ratio would ultimately be designated in 1837]) was likely at that time simply too far below the total weight of that Spanish coin which would long remain in circulation as legal tender beside, and compete domestically with, the American dollar.
14. Walter Breen's Complete Encyclopedia of U.S. and Colonial Coins, Walter Breen, Doubleday, New York, Page xiii,1988.
Section 1. April 2, 1792 Coinage Act
418 grains for the standard weight for the American dollar would not only have added two more grains of copper at additional weight and cost (but without additional value), but the resultant fineness of only .888 would have likely been considered as being too base for American coinage.15 417 grains had the same issues, to a less extent, while 415 grains would have again been likely getting too far below the average weight of the Spanish dollar. 416 grains standard weight was almost certainly simply the targeted overall weight picked for the American dollar. With 371.25 grains locked-in as the given weight of pure silver, the purity therefore became 371.25/416ths. Eliminating fractions/decimals would then make 1,485 parts of pure silver in 1,664 parts total. Since members of Congress weren't then willing to change the goldsilver equivalency (locking-in the number of parts of silver at 1,485), there wasn't any reason for them to so soon reconsider the 1792 standard (if the number of parts copper changed slightly, it still wouldn't have much eased the assayer's difficulty in working with the purity standard). In other words, Congress in 1794 stubbornly refused to change the silver standard no matter how difficult the assayer's job became, based upon strict adherence to principles supporting true monetary standards, of value being determined solely by precise and proportional weights of gold and silver. The 1792 silver standard had everything to do with keeping fifteen times as much silver as there was gold at every particular dollar (and cents) value level, while undoubtedly also having something to do with keeping a keen eye on the standard weight of the American dollar's primary 'competition', the Spanish milled dollar. No wonder Americans, including the 20th-century's "top coin historian," didn't readily understand the actions of the 18th-century Congress — because that early Congress intended to uphold strict and literal construction of the Constitution, supporting money as our true standard of value (unlike current Congresses)!
15. Alloy doesn't add to the value of gold or silver coins.
Chapter 1. American Lawful Tender Money
The point of highlighting Mr. Breen's inference isn't any form of disrespect, but simply to point out that even people of the greatest renown, well-earned from a lifetime of study of their highly-specialized field of expertise may yet fail to grasp fundamental principles of American liberty, so far have we been removed from those principles.
Section 2. Standard Unit of Value
Article I, Section 8, Clause 5 of the U.S. Constitution makes the monetary unit established by Congress (the dollar) the Standard Unit of Value, the standard by which all things of value are to be measured. Article I, Section 8, Clause 5 of the Constitution reads:
"Congress shall have power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."
Just as the 'inch' and 'foot' were ultimately fixed as standards for our measures of length or distance; just as the 'ounce' and 'pound' were made standards for our measures of weight; just as the 'pint' and 'gallon' were made standards for our measures of capacity; the 'dollar' divisible by tenths, hundredths and thousandths (milles) was made our money of account, our standard unit of measure in the measurement of value.16 It is no coincidence that the same constitutional clause granting Congress the power "To coin Money" is the same constitutional clause granting Congress the power "to fix the Standard of Weights and Measures." Just as distance, weight and capacity are not left up to measure-less and therefore meaningless phrases, neither is our money for the U.S. of A. One can imagine the economic havoc if, for example, an avoirdupois pound (say, of butter) didn't always equate with 16 ounces, if one mile didn't always measure 5,280 feet, or if a gallon (of gas or milk, for example) didn't always equate with 128 fluid ounces.
16. 1792, April 2; Chapter 16, Section 20. (I Stat. 246 @ 250 & 251).
See also: Monetary Laws, Volume II, Appendix D, Page 103, 2012.
Section 2. Standard Unit of Value
Short measures have always reflected injustice — whether by ignorance, incompetence or fraud. It should come as no surprise whatsoever that the American economy has long suffered once our most important economic measure, the dollar, was severed from its objective constitutional rudder of a particular number of (371.25) grains of fine silver (and proportional measures of gold). Instead the dollar became a slip of paper without tie to any measureable quantity of anything, left to flutter in the wind without meaning — but a standard without tie to any actual standard is no standard at all.
Section 3. Legal Tender Value — Weight & Purity
Strictly speaking, Congress initially established a silver coin standard along with a gold coin equivalency, effectively placing America on a bimetallic coined monetary standard. Although the 1792 Congress established the 'dollar' (also called the 'unit') as a coin with 371.25 grains of pure silver weighing 416 grains, coins struck at the dollar denomination still were not necessarily legally valued at that rate of one dollar.17 Congress also established the 'eagle' as a coin with 247.5 grains of pure gold, weighing 270 grains of standard gold and "to be of the value of ten dollars," but neither were coins struck at that denomination necessarily valued legally at that ten-dollar rate.17 The actual lawful tender value of any given coin under the 1792 act was determined only based upon its actual weight of properly-fine gold and silver. Section 16 of the 1792 act read as follows:
"That all the gold and silver coins which shall have been struck at, and issued from the said mint, shall be a lawful tender in all payments whatsoever, those of full weight according to the respective values herein before declared, and those of less than full weight at values proportional to their respective weights."18
17. 1792, April 2; Chapter 16, Section 9. (I Stat. 246 @ 248). See also: Monetary Laws, Volume II, Appendix D, Page 101, 2012. www.PatriotCorps.org.
Chapter 1. American Lawful Tender Money
One must realize that coinage methods at this time were rather crude (precisely the assayer's problem dealing with purity) and quite laborintensive. Each coin struck was unique and its precise weight fluctuated slightly. While the 1792 Congress went to great lengths to ensure the precise purity of "every separate mass of standard gold or silver, which shall be made into coins at the said mint,"19 they cared less about the uniformity of weight of any particular coin, figuring each new holder of any coin would weigh it (individually or in bulk) to accurately determine value. Since purity was difficult to field-measure, Congress went to great pains at the mint to ensure it. Weight and therefore value, however, could still be determined simply by individuals, businesses, and government officers with use of accurate balances and precise counter-weights. The first U.S. silver and gold coins weren't typically minted with any face value struck on them for well over a decade, because their declared face value didn't necessarily represent any coin's actual lawful tender value. The original intent for U.S. coins was that they would pass at their actual weight of their standard fineness, rather than by 'tale', than at their count at their declared value ($1, $10, etc.). Those coins of full weight would pass at their stated value, but worn, clipped or improperly-struck coins would legally pass only at their measured weight.
18. 1792, April 2; Chapter 16, Section 16. (I Stat. 246 @ 250).
See also: Monetary Laws, Volume II, Appendix D, Page 103, 2012.
www.PatriotCorps.org. 19. 1792, April 2; Chapter 16, Section 18. (I Stat. 246 @ 250).
See also: Monetary Laws, Volume II, Appendix D, Page 103, 2012.
Section 3. Legal Tender Value — Weight & Purity
A dollar coin only 99% of its proper weight would then be valued only at 99 cents, rather than one dollar. It was not until mint practices had advanced sufficiently that all American coins in 1837 finally had tolerances also prescribed for weight.20 Light-weight coins thereafter would soon be pulled from circulation by the treasury and re-struck into full-weight coins by the mint, meaning all coins in common circulation were soon of full and accurate weight. While Americans today typically think of coins only at their given face value, the most demanding of early Americans looked to the weight of the substance inside to determine the actual legal value for their coins. Substance and principles mattered, not the name of the unit or its designated face value. Under the 1792 standards, it would have been quite difficult to hold anything without gold and silver — paper — as a lawful tender, for money was valued only "according to quantity of weight, of pure gold and pure silver."22 But just because the wording of laws later changed, doesn't mean that constitutional principles for our money changed (our money simply wasn't as clearly protected [from our own ignorance]).
20. 1837, January 18; Chapter 3, Section 25. (5 Stat. 136 @ 140).
See also: Monetary Laws, Volume II, Appendix D, Page 108, 2012.
www.PatriotCorps.org. Gold coins were first prescribed weight tolerances in 1834.21 21. 1834, June 28; Chapter 95, Section 4. (4 Stat. 699 @ 700).
See also: Monetary Laws, Volume II, Appendix D, Page 104, 2012.
www.PatriotCorps.org. 22. 1792, April 2; Chapter 16, Section 11. (I Stat. 246 @ 249).
See also: Monetary Laws, Volume II, Appendix D, Pages 102, 2012.
Chapter 1. American Lawful Tender Money
Sadly, the safety net which at one time ensured the lawful tender value of all money would be determined solely by weight and fineness of actual gold and silver in the coin was removed from the marketplace in 1837 as coins were made a tender at their face or nominal value, even as the weight and purity of our legal tender money at that time came under stricter tolerances than ever before.23 The very perfection of the coins and the appropriate government guarantee of that perfection helped loosen the protections which could later help free our money from inherent value. That coin, as the only (lawful tender) money, is valued only according to (the) weight (of properly-fine gold and silver) is acknowledged in Jefferson's 1791 notes on the establishment of a money mint, where he writes:
"no money should be received, or paid at their treasuries, or by any of their officers, or any bank, but on actual weight."25
23. 1837, January 18; Chapter 3, Sections 8 - 11. (5 Stat. 136 @ 137 & 138).
See also: Monetary Laws, Volume II, Appendix D, Page 106 - 107,
2012. www.PatriotCorps.org. An 1873 act restored this sound principle for gold coins below their legal weight, which low-weight coins were again properly made "a legal tender at valuation in proportion to their actual weight."24 24. 1873, February 12; Chapter 131, Section 14. (17 Stat. 424 @ 426)
See also: Monetary Laws, Volume II, Appendix D, Page 116, 2012.
www.PatriotCorps.org. Of course, by this time, the 1871 Supreme Court had already ruled that United States notes were a legal tender within the United States at their face values. To properly understand the absurd irony of a slip of paper without any gold or silver whatsoever now being held a legal tender at its face value, but a gold or silver coin at only 98% of its weight being worth only 98% of its face value, see Chapter 3. 25. Monetary Laws, Volume II, Appendix C, Page 77, 2012. www.PatriotCorps.org.
Section 3. Legal Tender Value — Weight & Purity
Valuation based "but on actual weight" was to make sure the coin's "lawful tender" value reflected not merely the coin's stated or intended value, but actual weight in silver or gold, in case any coin be "clipped, or otherwise diminished."26
Section 4. Regulating the Value of Foreign Coinage
Another important indicator that our money is valued only according to the weight and fineness of gold and silver is the long-forgotten ability of Congress to "regulate the (American) Value…of foreign Coin" under Article I, Section 8, Clause 5 of the Constitution which again reads:
"Congress shall have power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."
That the Constitution allows foreign coin to be made current as American money provides compelling evidence that they must have their own inherent value, that these coins must be made of inherently-valuable materials. For if the materials didn't allow for objective determination of value based upon weight (and purity), then the United States would incur serious financial repercussions due to foreign government 'seigniorage', arbitrarily valuing (base metal) coins (and fiat currencies) far above their true worth. That the Constitution did not yet expressly list the type of foreign coins that members of Congress were empowered to make current as American money (i.e., "To…regulate the Value…of foreign Coins…of gold and silver") confirms that both foreign and domestic coins made current as American money are to be made of the same inherently-valuable materials. Foreign coins of silver have their value regulated by their proportional amount of silver as compared with American silver coins and foreign coins of gold have their valued regulated by their proportional amount of gold as compared with American gold coins.
26. Ibid.
Chapter 1. American Lawful Tender Money
In his 1826 report on the assay of foreign coins, director of the mint Samuel Moore admits to valuation of foreign coins by weight and fineness of gold or silver relative to American coinage, stating that:
"The proportion of fine metal and alloy in the various foreign coins examined, and the actual quantity composing each specific coin, are derived from the average of repeated assays made for this occasion…The actual value of the several gold and silver coins, according to the standard and denomination of the coins of the United States, has been deduced from the fine gold or fine silver contained therein, respectively, at the rate of 247.5 grains of fine gold to the eagle of ten dollars, and 371 ¼ grains of fine silver to the dollar."27
Since making foreign base-metal coins or especially foreign fiat currencies current as American money would soon devastate our economy, the Constitution obviously cannot allow them (while American base-metal coins and fiat currencies are actually little better [still causing improper harm to some people for the unjust benefit of others]). The act of February 9, 1793 was the first foreign coinage act under the Constitution.28 Section 1 regulated the American value of various foreign coins which would thereafter "pass current as money in the United States" and be "a legal tender for the payment of all debts and demands." 29 While the 1792 coinage act established a mint for the coinage of American money, it would take several years to get the mint organized, erect the necessary structures, build the presses, and assemble all the various tools and equipment needed to strike coins.
27. Volume 5, American State Papers, Finance Series, Pages 585 and 586. 28. 1793, February 9; Chapter 5. (I Stat. 300).
See also: Monetary Laws, Volume II, Appendix F, Page 162, 2012.
www.PatriotCorps.org. 29. Ibid., Section 1.
Section 4. Regulating the Value of Foreign Coinage
Thus foreign coins made current as American money in 1793 would better help tide things over until the United States finally began coining their own money. Another year would pass before the coinage of American silver would commence and two before the first American gold coins would be struck.30 Section 1 of the 1793 foreign coinage act specified that "the gold coins of Great Britain and Portugal, of the present standard," shall be at the "rate of one hundred cents" for "every twenty-seven grains of the actual weight thereof."31 The same section also provided that "the gold coins of France, Spain and the dominions of Spain, of the present standard," shall be at the "rate of one hundred cents" for "every twenty-seven grains and two fifths of a grain, of the actual weight thereof."32 In this and later foreign coinage acts, Congress provided an exchange rate between foreign gold coins and American values in "cents per grain" of the standard weight of the coins, while foreign silver coins were stated in "cents per pennyweight and grains." 33 Cents per grain (or per pennyweight) directly acknowledges that American legal tender money as a weight and purity of gold or silver.
30. See; the July 22, 1797 proclamation of President John Adams detailing that the coinage of silver at the mint of the United States commenced on October 15, 1794 and of gold on July 31, 1795.
See also: Monetary Laws, Volume II, Appendix F, Page 163, 2012. www.PatriotCorps.org.
31. 1793, February 9; Chapter 5, Section 1. (I Stat. 300).
See also: Monetary Laws, Volume II, Appendix F, Page 162, 2012. www.PatriotCorps.org.
32. Ibid. 33. The Spanish milled silver dollar was rated at "one hundred cents for each dollar, the actual weight whereof shall not be less than seventeen pennyweights and seven grains."34
Chapter 1. American Lawful Tender Money
It matters not where gold or silver are mined ; it matters little where gold and silver coins are minted ; what matters most is that our legal tender money is made of gold and silver of determined weight and purity.
Section 5. Money - vs. - Coin
Proponents of a legal tender paper currency occasionally point to the Constitution's wording of the power "To coin Money" and claim that the word "Money" must include paper currency, since 'money' appears to be a word of greater meaning than that used in the same clause as it relates to "foreign Coin." This is but a slight variation of the same argument which compares this power "To coin Money" in the Constitution with the wording used in the Ninth of the earlier Articles of Confederation (the articles under which the United States were joined together in common union before the Constitution was ratified), which stated, in part:
"The United States in Congress assembled shall also have the sole and exclusive right and power of regulating the alloy and value of coin struck by their own authority, or by that of respective states…"
These proponents of paper money correctly point out that no foreign paper currency can be made current as American money since only "foreign Coin" is specified and also that "regulating the alloy and value of coin struck" obviously restricts that older authority to 'coin' which could be 'struck' with an 'alloy' and given (objective) 'value'.35
34. 1793, February 9; Chapter 5, Section 1. (I Stat. 300).
See also: Monetary Laws, Volume II, Appendix F, Page 162, 2012.
www.PatriotCorps.org. Seventeen pennyweights and seven grains equal 415 grains ([17X24] + 7 = 415). Being that the Spanish milled dollar had a slightly-higher standard of silver, it didn't need to weigh quite as much as the 416grain American dollar (to contain an equivalent amount of pure silver). 35. To argue that Congress could regulate value based upon artificial subjective considerations (i.e., token coins w/o gold or silver), one would argue Congress have arbitrary powers of (unlimited) discretion.
Section 5. Money - vs. - Coin
Paper money advocates of course then point to the Constitution's more generic phrase "To coin Money" to argue that the Constitution must allow Congress greater power over money — including the power to emit a paper currency — since the Constitution mentions nothing of alloy, and since paper currencies are commonly and casually considered 'money'. An important refutation of this argument comes from the very court cases themselves which upheld the power of Congress to issue a legal tender paper currency. Here the Supreme Court repeatedly denied that this power to issue legal tender paper currencies had anything whatsoever to do with the coining of money or with the regulating of its value (stating among other things, that such topic was "foreign to the subject before us").36 In refutation of these false claims, it should be noted that Congress under the Articles were expressly authorized the power to emit "bills of credit" (paper currency) in Articles XII and IX, alongside the power to borrow money (separately listing the separate powers to strike coin [and regulate its value], to borrow money and to emit bills of credit). In contrast, Congress under the Constitution only have power to "borrow Money" and "coin Money" (and regulate its value) so the monetary powers under the Constitution are actually far more restricted than under the Confederation.37 But while the ninth Article of Confederation dealt with "regulating the alloy and value of coin struck," proponents of the false argument conveniently fail to mention that the same article also later discusses the power therein for the confederate Congress to "coin money" (any time nine States assented to the same). This second reference to the same power in the same document shows that the wording (to) "coin money" and the power "of regulating the alloy and value of coin struck" are identical powers within the Articles of Confederation, actually meaning the same thing.
36. See; Chapter 3. 37. See Chapter 3 regarding the courts' holding that the power to emit a legal tender paper currency rests on the power "to borrow money" (i.e., not on the power 'to coin money').
Chapter 1. American Lawful Tender Money
Paper currency proponents also conveniently ignore the wording of Article I, Section 8, Clause 6 of our own Constitution and the power of Congress:
"To provide for the Punishment of counterfeiting the Securities and current Coin of the United States."
That 'coin' is used in Clause 5 as a verb only to be used in the very next clause of our present Constitution as a noun (in place of the noun 'Money' that was used in Clause 5) does not bode well for proponents of legal tender paper currency under Article I, Section 8, Clause 5 of the Constitution. 'Money' and 'Coin' are therefore actually used interchangeably in both the Articles of Confederation and in our present Constitution and mean the same thing. If 'Money' included anything other than coin, then the sixth clause of the eighth section of the first article of our present Constitution would have needed additional wording to also mention this other type of money (one could imagine the chaos if Congress were empowered to create a type of money which they couldn't then punish the counterfeiting thereof). The only 'Money' members of Congress are allowed to coin under Clause 5 (or make current) is the same 'current Coin' of the sixth clause which they may punish the counterfeiting thereof. The 'Securities' mentioned in the Article I, Section 8, Clause 6, of course, are documents which provide written evidence of the money borrowed by the United States. But debt-based securities cannot form part of our lawful tender money for all our United States of America which must have a fixed, known and determinable value as our monetary Standard of Value.38
38. See Chapter 3 for full and proper support of this assertion, including full and open judicial acknowledgment that even paper currencies declared legal tender even eventually fully payable in gold coin are still not "money" constitutionally.
Section 5. Money - vs. - Coin
The future repayment of debt is always somewhat in question, but even if it is taken for granted, there is still a discount for securities from their face value for their time delay until repayment to allow for the payment of interest over time.39 At the time of the Constitutional Convention in 1787 when the wording of the Constitution was proposed and later ratified, the $231,552,775 in Continental Currency emitted by the Second Continental Congress between 1775 and 1779 was wholly worthless.40
39. Even now, with the AA+ credit rating of the federal government, longterm bonds are sold at a significant discount from face value, the amount of discount to reflect a given rate of return until maturity. These securities do not have the fixed value necessary for our Standard of Value over their life, but get closer to their face value the closer to maturity when they are to be repaid in full at their face value. 40. See: Monetary Laws, Volume I, Pages 31 - 32, 2012. www.PatriotCorps.org.
Chapter 1. American Lawful Tender Money
To argue that those delegates (and those members of the State ratifying conventions) could consider bills of credit such as Continental Currency as our Standard of Value makes a wholesale mockery out of the concept of true standards.41
Section 6. June 28, 1834 Coinage Act
One additional mint-related act especially helps show that American money is but an amount and purity of gold and silver, that the power "To coin Money" (as a lawful tender) under the Constitution refers only to striking gold and silver coin. This is the act of June 28, 1834.42 This 1834 coinage act is a short act with far-reaching ramifications, of which there is not here room to examine other than for the above-stated purpose.43 By 1823, the world parity between gold and silver approached 16-to-1. Undervalued American gold coins (undervalued relative to silver, at fixed ratios of 15:1 established in 1792) soon vanished from circulation, since they weren't being valued sufficiently in law at home.
41. On August 4, 1790, Congress under the Constitution finally provided to pay these bills of credit at the rate of "one hundred dollars in the said bills, for one dollar in specie." One-penny-on-the-dollar value is hardly a credible standard of fixed value (and that rate was a 'gimme' to those politically-connected speculators who earlier purchased the worthless paper in anticipation of Congress finally redeeming them for something). 1790, August 4; Chapter 34, Section 3. (I Stat. 138 @ 140).
See also: Monetary Laws, Volume I, Page 51, 2012.
www.PatriotCorps.org. 42. 1834, June 28; Chapter 95. (4 Stat. 699).
See also: Monetary Laws, Volume II, Appendix D, Page 104. 2012. www.PatriotCorps.org.
43. For a fuller discussion of this act, please see Chapter 7 herein, and Monetary Laws, Vol. I, Ch. 6, Section B, Pages 121 - 142. 2012. www.PatriotCorps.org.
Section 6. June 28, 1834 Coinage Act
People with gold coins could obtain more than face value-equivalent for their gold (paid in silver) when that gold was sold overseas as bullion rather than continuing to hold it as money at home. According to its legal tender monetary value domestically, one tendollar gold eagle was worth ten silver dollars (and one troy ounce of gold under the 1792 coinage act was worth 15 troy ounces of silver). According to their equivalent trade value as gold bullion in 1834, however, one ten dollar gold eagle was worth more than ten silver dollars, while one troy ounce of gold was worth about 16 troy ounces of silver in foreign trade. The correct remedy applied by Congress in 1834 was to properly value gold domestically so it wouldn't be exported abroad. In 1834, Congress made the old gold valuation rates obsolete and established a new 'current' valuation rate for the old 1792-era gold coins (while also establishing new lighter-weight gold coins at their familiar valuation rates of $10, $5, and $2.50). Thereafter the 1792-era gold coins were valued according to the principle established by Section 3 of the 1834 act which stated:
"That all gold coins of the United States, minted anterior to the thirty-first day of July next shall be receivable in all payments at the rate of ninety-four and eight-tenths of a cent per pennyweight."44
The 1834 act provided that gold coins minted before the effective date of the act were to be "receivable in all payments" at a new rate, of 94.8 cents per pennyweight of their standard gold weight. No longer were old 1792-era gold coins 'current' as money at their old valuation rates (such as $10 per eagle).
44. 1834, June 28; Chapter 95, Section 3. (4 Stat. 699 @ 700).
See also: Monetary Laws, Volume II, Appendix D, Page 104. 2012. www.PatriotCorps.org.
Chapter 1. American Lawful Tender Money
The old heavier coins (of greater fineness) were made more valuable than the new, lighter-weight gold coins (struck in a lower purity), because world-wide the value of gold rose in relation to silver but our value ratios had imprudently remained fixed as a matter of law. Gold coins struck at the old standard were made "receivable in all payments" in 1834 at 94.8 cents/pennyweight; thus full-weight 1792-era eagles became worth $10.665 each (in 1834 dollars). In 1834, Congress used their power to "regulate the Value" of money to come up with a new market rate for the old coins (and new weight for new gold coins at familiar dollar values) to again match the world market rate between gold and silver.45 Although the amount of gold in a dollar in 1834 was lightened as compared with its initial weight fixed in 1792, this was done merely to reflect the greater current worth of the gold in the coin (relative to silver). The value of each grain of fine gold in the gold coins from two different eras (1792 and 1834) remained identical — in terms of the 1834 dollar — but one must account for differences in both weight and purity to determine this.46
45. Congress also established a new valuation rate for foreign gold coins, also on June 28, 1834 (4 Stat. 700, Chapter 96).
See also: Monetary Laws, Volume II, Appendix F, Page 173. 2012.
www.PatriotCorps.org. 46. See: Monetary Laws, Volume I, Chapter 6, Section B, Pages 121 – 142 (especially pages 127 – 128 & 130) 2012. www.PatriotCorps.org. Most of the remaining 1792-era gold coins which had not been yet exported overseas were sent to the mint to get re-struck in the new gold coins — after all, who would want to use a $10.665-valued coin in everyday trade? Thus one sees the general difficulty in using foreign coins, or obsolete American coins, over current American coins — because their dollarequivalent rates are typically oddly-valued and far greater care must be exercised when spending them to obtain their values mathematically-determined by weight and purity.
Section 6. June 28, 1834 Coinage Act
This principle of valuing two different gold coins — each originally having the same face value (i.e., $10) — but struck under two different monetary acts (1792 and 1834) which specified different weights and purities but which in 1834 were then given two different monetary values (i.e., $10.665 and $10 [in terms of 1834 dollars]) clearly shows that it was
the varied number of grains of pure gold which gave these gold coins their different legal values.
That same principle, of course, is what separates a $5 half-eagle and $2.50 quarter-eagle from a $10 eagle. The true legal tender value of any coin is determined only according to its actual weight of properly-fine gold or silver (including coins light of weight [even when lightened as a matter of law]). The point for examining this 1834 act is to understand that in 1834 Congress completely ignored the face value of the 1792-era gold coins when they established their new receivable rate of 94.8 cents per pennyweight of 11/12ths-fine gold ($10.665 per 1792-era [full-weight] eagle). While the lawful tender value of the 1792-era gold coins could not be originally determined solely by their face value because of Section 16 of that 1792 act which legally determined value of the gold coins based only upon actual weight of properly-fine gold, the actual worth of those 1792era gold coins under the 1834 act could no longer even be determined at all by their original face values, but now only according to their actual weight of gold at its known standard of fineness (just like current foreign coins). In other words, this 1834 act also directly provided a given monetary value for a given troy weight of domestic gold coins (in a standard fineness) — without any reference whatsoever to any coin's given face value — for again as clear an idea which ever presented itself, of valuation being
determined solely by an amount of gold (or silver) at its standard fineness (even for domestically-struck coins).47
47. Of course, standard fineness is valued only according to its absolute purity of gold in gold coins or silver in silver coins — the silver/copper alloy in the gold coins and the copper alloy in the silver coins add no value.
Chapter 1. American Lawful Tender Money
Although all the early monetary acts (before the Civil War) otherwise all dealt with coin, Section 11 of the original 1792 coinage act clearly details further that it is not the 'coining' of any material which makes it 'money', but only the gold or silver throughout which qualifies any coin as money. The words of Section 11 that "every fifteen pounds weight of pure silver shall be of equal value in all payments with one pound weight of pure gold" rings with absolute clarity that 'money' is but weight of pure silver and pure gold.48 That one pound of gold is equal in value "in all payments" with every fifteen pounds of silver doesn't even point to money in coin form. Those 22 words of Section 11 help prove the proper foundation for 'money' being only (an amount of ) gold and silver, which section also directly acknowledges by stating that:
"the…value of…money within the United States shall be…according to quantity of weight, of pure gold or pure silver."49
Therefore, anything which has not any gold or silver cannot form any part of the legal 'money' of these United States of America whatsoever, even if it is coined (such as base-metal coins). Article I, Section 10, Clause 1 of the U.S. Constitution, however, expressly prohibits the States from making anything "but gold and silver Coin a Tender in Payment of Debts" thereby firmly establishing the principle that the only legal tender money is gold and silver in coin form. Striking coin in precise purities at specific weights for rounded values ($1, $10, etc.) is convenient for trade, but the vital ingredient is simply that gold and silver be found throughout.
48. 1792, April 2; Chapter 16, Section 11. (1 Stat. 246 @ 249).
See also: Monetary Laws, Volume II, Appendix D, Page 102. 2012. www.PatriotCorps.org.
49. Ibid.
Section 6. June 28, 1834 Coinage Act
While 'money' can be any pure gold or silver (even with an alloy to increase its durability [but the alloy adds no value]), legal or lawful 'tender' money within any of the States of the Union is only silver or gold coin, by express constitutional mandate which cannot be changed by congressional [in]action. The 1792, 1793 and 1834 monetary acts of Congress herein discussed fully show that the legal tender value of money in the U.S. of A. is determined solely by its actual weight of fine silver and gold (in coin form), period. Thus, a base-metal coin without gold or silver would not have any legal tender value whatsoever; obviously neither could a slip of paper. But just because the wording of laws later changed, doesn't mean that constitutional principles for our money changed (our money simply wasn't as clearly protected [from our own ignorance]). The power delegated to Congress "to regulate the Value" of (current and obsolete) American and foreign coins under Article I, Section 8, Clause 5 helps prove the principle that our money is only an amount and purity of gold and silver (since 'to regulate' or 'make regular' the value, objective standards must be used). To oppose this principle, one would have to argue that American government is an arbitrary government with truly unlimited powers — being able to determine value solely according to subjective whim — by omnipotent government dictate, rather than objective proportional measure. "Regulating the value" of American and foreign coin at the time the Constitution was proposed and ratified was by then an age-old custom and practice meaning to devise an objective system of proportional weights and values of properly-pure gold and silver, making the values regular, consistent and uniform according to proportional weight.
Chapter 1. American Lawful Tender Money
To attempt to change the meaning of those words to their opposite, to wholly-remove money from all objective measure, would be as arbitrary as it would be capricious. Either knowable objective standards are to be used to regulate values or everything is up for grabs and nothing is safe. And if members of Congress are allowed arbitrary powers, then there is certainly no reason for a written Constitution. Arbitrary government therefore degenerates into the absolute rule of man, ever changing as new rulers rise to power using ever-escalating measures of force. In arbitrary government, scum rises to the top. The ruthless massmurdering despot advances over the casually-murderous tyrant, who overthrows the sneaky but spineless swindler, who tricks the masses with false promises against the man of integrity and faith who could not ever travel down such a sure road to absolute ruin. That the Constitution outlines powers ceded by State governments and delegated to the United States proves that these United States of America are ruled by a proper delegation of authority within knowable standards, not arbitrary whim. One cannot have a written Constitution, law and order, and arbitrary whim…at least other than in a highly-unusual case.50 Secretary of the Treasury Alexander Hamilton's 1791 Report on the Establishment of a Mint helps us understand how the harmful diversion away from value being determined solely by weight of properly-fine gold and silver could ever first get an improper foothold; how strict adherence to sound measures ever provided fertile ground for an effective switch to valuation based upon declared value.
50. One exception — a case unlike all other cases — actually does tragically exist within our present Constitution; it will be covered in great detail in Chapter 3.
Section 6. June 28, 1834 Coinage Act
Hamilton writes, referencing the Spanish milled dollar, that although this particular "species of coin has never had any settled or standard value, according to weight or fineness", it nevertheless:
"has been permitted to circulate by tale, without regard to either, very much as a mere matter of convenience."51
In other words, although American money at law is legally valued only and actually by its weight and fineness of gold or silver, in everyday practice, however, people often readily accepted gold and silver coins of honest reputation at their stated face value (even if their weight tended to vary to minor degree), rather than take the time and trouble to weigh them. U.S. gold and silver coins quickly developed an honest reputation and also ended up largely passing by tale rather than by precise weight actually determined on a balance as a "mere matter of convenience," even before (1834 and) 1837 when both gold and silver coins had tolerances implemented also for weight. Tragically, the very integrity which the mint of the United States could once rightfully claim for competently striking just and honest coin of high and consistent quality, over time led to a complacency of the people who ceased the careful scrutiny of the substance of things. For a "mere matter of convenience," coins could be accepted at face value without much thought of the substance inside, allowing people eventually to be made what Hamilton referred to as the 'dupes of sounds', when 'names' became 'substituted for things', as gold and silver were replaced with other things cleverly yet declared to be a 'dollar'. It is quite obvious from reading the early coinage acts that members of Congress were quite serious about striking honest money, but the fact of the matter is that they were deadly serious.
51. Monetary Laws, Volume II, Appendix C, Page 80. 2012. www.PatriotCorps.org.
Chapter 1. American Lawful Tender Money
Section 19 of the original 1792 act imposed the death penalty for any mint worker "with fraudulent intent" or "connivance" who sought to debase or make worse the proportion of fine gold or fine silver, lighten the weight (and thereby the value) of coins, or embezzle any of the metals.52 It is but a sad commentary that actions taken by all mint employees since 1965 under the express direction of that Congress would have resulted in their facing the death penalty if those same actions had been unilaterally taken under the 1792 Congress. Some of the 'connivance' once deterred by the death penalty in the individual case is now purposefully mandated for every case by the very government instituted to secure man's unalienable rights, his person and property, against force and fraud. Questions this chapter raises include: 1. Can America's fundamental monetary principle under the United States Constitution — that the value of our lawful tender money be determined solely according to the weight and fineness of our gold and silver coins — be so easily transformed to its opposite? 2. Can the government instituted to protect persons and their property from force and fraud also be so easily transformed into its opposite, into the engine which may easily deprive us of our most liquid form of property, our financial safe-haven, our gold and silver coins? Such are the topics of our next chapters (but the short answers are thankfully 'no').
52. 1792, April 2; Chapter 16, Section 19. (I Stat. 246 @ 250).
See also: Monetary Laws, Volume II, Appendix D, Page 103, 2012.
Section 6. June 28, 1834 Coinage Act
Chapter 1. American Lawful Tender Money
Chapter 2. Political Feuding
Section 1. The Banks of the United States
The Revolutionary War officially ended in 1783, but that didn't mean the extensive war debts would be repaid anytime soon. So serious was the problem of lingering war debts that a new Constitution was ultimately proposed in 1787 to replace the 1781 Articles of Confederation which failed to produce adequate government revenue.1 Two clauses in the Constitution as ultimately ratified attest to this pressing need for adequate government revenue and to allay fears of creditors that they wouldn't be paid their just due: Article I, Section 8, Clause 1 and the words "to pay the Debts…of the United States" and especially Article VI, Clause 1 and its words:
"All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation."
In 1790, Congress passed an act to finally fund the (past due) debts of the United States.3 In 1791, Secretary of the Treasury Alexander Hamilton pushed forward the second plank of his funding program, the establishment of a congressionally-chartered national bank, the bank of the United States.4 Whereas Hamilton pressed hard for the bank, Secretary of State Thomas Jefferson, Attorney General Edmund Randolph and Congressmen James Madison all denied the ability of Congress to charter a bank.
1. The February 21, 1787 call by the Second Continental Congress was actually only for a convention meeting "for the sole and express purpose of revising the Articles of Confederation" (and reporting the recommendations to Congress and the States), to adequately meet "the exigencies of (Confederacy/) Government."2 2. Volume 32, Journals of the Continental Congress, Page 74. 3. 1790, August 4; Chapter 34. (I Stat. 138). 4. 1791, February 25; Chapter 10. (I Stat. 191).
Section 1. The Banks of the United States
America's financial history all the way up to the Civil War ultimately became a long-standing political feud between Jefferson's hard-money advocates who pushed for limited government under strict construction of the Constitution and Hamilton's central bank and paper currency proponents who favored a strong central government capable of bestowing political favors upon the favored elite for mutual benefit. Although Hamilton and the Federalists scored the initial victory in the banking and paper currency feud, by 1811 when the 20-year charter for the bank was coming up for renewal, Madison was President and the early Republicans controlled Congress.5 The bill to extend the charter for the (first) bank of the United States failed to even clear Congress and the bank ceased operation at the expiration of its original charter. But only a year later, however, the War of 1812 commenced; by 1816 a second bank of the United States was chartered for another 20-year term, again due to pressing war debts.6 Democratic President Andrew Jackson's presidency later became infamous for his figurative duels with the second bank's supporters who began in earnest to extend their charter four years early, in 1832 (learning the invaluable lesson to start early from the failed attempt to extend the charter of the first bank). But even with additional time, bank supporters again failed to extend their charter, again during an era of profound peace. Peace coupled with limited government which strictly followed the dictates of the Constitution was simply proving quite unfavorable to banking proponents — hard money advocates always ended up winning their political battles against the national banks during times of peace.
5. The early Republicans today are often referred to as JeffersonianRepublicans or Democratic-Republicans to separate them from the modern-day Republican party of Lincoln. 6. 1816, April 10; Chapter 44. (3 Stat. 266).
Chapter 2. Political Feuding
Section 2. The Independent Treasury
Soon, however, defeated banking proponents realized their whole future had just been placed into dire jeopardy — for on July 4, 1840, Democratic President Martin Van Buren ceremoniously signed into law the first Independent Treasury act.7 President Van Buren labeled this Independent Treasury as our Second Declaration of Independence, this time the 'separation of bank and state' — our independence from banks and their debasing paper currencies (even though none of these bank currencies had [yet] ever been made a legal tender). When Andrew Jackson won his fight against the second bank of the United States, he still placed government funds in banks, only in this case they were favored State-chartered banks rather than a congressionallychartered national bank (banks began forming in the States in the 1780's). The Independent Treasury, also known as the sub-treasury system, sought however to divorce government from banks completely, including State banks, which really upset banking advocates. Under the new system, the government would soon deal with all payments only within its own treasury, which meant no government money would be deposited in any bank whatsoever, which bank could then use those extensive funds as an asset-base for making large loans within their fractional reserve banking system. And, importantly, neither would any bank's paper money be capable of being used for any payment due to or by government. Van Buren began a four-year implementation of a system which would soon operate only in gold and silver coin (the conversion rate set at 25% per year, over four years). But in 1841, however, the Whigs were swept into power both in Congress and in the presidency.
7. 1840, July 4; Chapter 41. (5 Stat. 385).
See also: Monetary Laws, Volume II, Appendix I, Page 401, 2012.
Section 2. The Independent Treasury
Like the Federalists before them, the Whigs favored a strong central government, banks, paper currencies based on debt, and returning the political favors for their friends who got them elected to positions of power. Together the Whigs in Congress and in the presidency overturned the 1840 Independent Treasury act in 1841.8 Thus the system which sought a four-year conversion to using only gold and silver coin was never fully implemented. Buoyed by their win against the 1840 independent treasury, the Whigs and banking proponents again tried to establish another national bank. Both Houses of Congress soon passed a bill for a third national bank, which landed on President John Tyler's desk for his signature. But the Whig President nevertheless vetoed the proposed bank bill, because to approve it:
"would be to commit a crime which I would not willfully commit to gain any earthly reward."9
All of President Tyler's cabinet members but Secretary of State Daniel Webster resigned in protest, attempting to show a vote of no-confidence in the President, trying to force his resignation. Banking advocates rioted in front of the White House. The D.C. police were soon formed in response to this incident. While the long-term plans of banking proponents suffered a significant setback in 1841 when they were unable to establish a third bank of the United States, in 1846 their worst nightmare became reality.
8. 1841, August 13; Chapter 7. (5 Stat. 439).
See also: Monetary Laws, Volume II, Appendix I, Page 409, 2012.
www.PatriotCorps.org. 9. Miscellaneous Documents of the House of Representatives, Volume 37. 53rd Congress, 2nd Session, House Misc. Doc. 210, Part 4, A
Compilation of the Messages and Papers of the Presidents 17891897; Veto Messages to the Senate of the United States, August 16,
1841, by President John Tyler. Page 64.
Chapter 2. Political Feuding
The long-standing, back-and-forth struggle for political superiority which began in 1791 finally ended under limited government which followed the strict commands of the Constitution in 1846 in clear favor of the hard money advocates with the signing of the second Independent Treasury act on August 6, 1846, by Democratic President James K. Polk.10 This 1846 act which became fully-established proved impenetrable to subsequent attack by national banking advocates for as long as limited government operated under the strict confines of the Constitution. Even international war did not shake this independent treasury system; the United States successfully fought the Mexican War even as half again as many soldiers soon became embroiled in that war as compared with the War of 1812, without the wild swings developing in the economy as were suffered in the aftermath of the War of 1812. With its excellent credit, the government was able to affordably borrow all the money it needed in addition to the excises, imposts and duties it raised, importantly while none of the government securities issued in acknowledgment of its debt entered into circulation as additional forms of money which could spiral the economy out of control. Under the 1846 act, the fire-proof vaults and safes of the Treasurer of the United States were made the literal Treasury of the United States. The coinage mints of Philadelphia and New Orleans were made sub-treasuries, as were the custom-houses of New York and Boston. Section 6 of the act absolutely prohibited the deposit of any public money into any bank, while Section 16 spectacularly made it felony embezzlement for any government officer to "deposit in any bank…any portion of the public moneys intrusted to him."11
10. 1846, August 6; Chapter 90. (9 Stat. 59).
See also: Monetary Laws, Volume II, Appendix I, Page 411, 2012.
www.PatriotCorps.org. 11. 1846, August 6; Chapter 90, Section 16. (9 Stat. 59 @ 63).
See also: Monetary Laws, Volume II, Appendix I, Page 411 @ 415,
2012. www.PatriotCorps.org.
Section 2. The Independent Treasury
Section 6 required all receivers of public moneys "to keep safely, without loaning" all public money collected by them.12 Section 16 prohibited the exchange any of the public money for anything besides gold and silver coin or the government's Treasury notes (i.e., no public money could be exchanged for any bank notes whatsoever). This same section also made it felony embezzlement for any officer to loan out any government funds, with or without interest. All payments due to government by private individuals and businesses, including for postage, were required to be paid under Section 18 in silver coin, gold coin or in the government's interest-bearing Treasury notes, the latter of which were essentially readily-marketed bonds. No paper notes issued by any State-chartered private bank could be used for any government payment whatsoever. Of course, since 1836, no national bank continued in operation. Section 19 required all federal officials to pay the government's obligations due its creditors only in gold coin or silver coin, unless the creditor voluntarily agreed to accept payment in Treasury notes. Only with each individual creditor's specific approval could government officials then pay government obligations to that person in interest-bearing Treasury notes. Section 20 also required each department head to suspend any disbursing officer who violated any portion of the act, forwarding the facts of each incident to the President for prompt removal of each officer and court trial, when warranted. Section 21 made it the express duty of the Secretary of the Treasury to guard against the 'drafts' authorized under Section 1 from ever:
"being used or thrown into circulation, as a paper currency, or medium of exchange."13
12. 1846, August 6; Chapter 90, Section 6. (9 Stat. 59 @ 60).
See also: Monetary Laws, Volume II, Appendix I, Page 411 @ 412,
2012. www.PatriotCorps.org. 13. 1846, August 6; Chapter 90, Section 21. (9 Stat. 59 @ 65).
See also: Monetary Laws, Volume II, Appendix I, Page 411 @ 417,
2012. www.PatriotCorps.org.
Chapter 2. Political Feuding
1846 ushered in an era of hard money which became firmly established as long as limited government continued to operate under the strict confines of the Constitution. National banking interests who advocated for paper money suffered crushing political losses as the courageous young Democratic Party then proudly fought for the common man and limited government under strict construction of the Constitution, against old-school political favor which sought to hand out perpetual rewards for mutual benefit between the ruling elite and the privileged financial class. All government gold and silver not in active circulation rested in government vaults and not one dollar of government funds were found in any bank. Although modern financial wizards cringe at the thought of money 'resting' in government vaults, those who haven't learned the invaluable lesson of a 'return of money' versus a 'return on money' will someday all too soon have it firmly and forever ingrained in their minds. When the purchasing power of money actually grows over time because it represents an actual store of inherent value saved from past production, one needn't put it at risk just to keep even. In such a system, money is working even as it is safely kept without additional risk, as hard money best provides economic stability and thus best grows a predictable economy where private industry may moreaccurately forecast future business concerns. Productivity increases are passed on to consumers and investors in the form of lowered prices aided by free market competition, naturally putting saved money to work with little risk — making it more valuable in the future. The primary drawback to a stable monetary system is to financiers. Money saved by inexperienced savers doesn't necessarily enter into a ready pool out of which savvy speculators may cunningly drain from time to time with their self-serving boom-bust speculative lending policies for massive short-term profits virtually impossible under monetary stability. Section 2. The Independent Treasury 37
Monetary devaluation instead encourages people to become restless speculators and place their money into jeopardy to attempt to recoup their losses incurred simply from holding it. Their inexperience, however, makes them sitting ducks for the more experienced, who seem all too happy to separate their naive counterparts from their hard-earned money. After 1846, financial leaders soon only dreamed again of becoming national powerhouses with direct access to tap into government funds or supply government with its fiscal needs. Government then carried out its important role well, of safeguarding the public money, protecting it even from debasement. People's savings bought more in the future, promoting savings, frugality, and hard work. State-chartered private banks nevertheless flourished and (over-) issued their commercial paper, causing localized booms and busts as the quantity of (non-tender) paper money issued by the banks in localized circulation ebbed and flowed with their issuances. Their poison, however, was mainly localized; making currency and credit over-issuance by individual banks stand out more clearly as the culprit in the resultant localized downturn. The common man could thus more-easily understand the direct cause of the local boom-bust cycle which did not extend to other nearby towns in neighboring States otherwise with similar characteristics. Increasing numbers of average Americans soon began understanding one bank's too-easy of credit as the true cause for the coming bust which was sure to follow, which would inevitably consolidate local wealth into fewer and fewer hands. The harm in these fractional-reserve banking policies (where bookkeeping entries leveraged money greater than actually in store, in effect creating money out of thin air), is that if additional lending doesn't continuously grow and keep ahead of those loans being paid down monthly, then the money being paid off monthly as loan payments evaporate back into the thin air out of which they were created. 38 Chapter 2. Political Feuding
While that paid-off money has the potential to be re-loaned back into existence, if either the banks are unwilling or unable to lend to the public who is unwilling or unable to borrow, then the money supply contracts violently, leading to further economic contractions in a vicious downward spiral. The harmful effect of fictitiously-creating something out of nothing when loaning money is that as it is paid off it goes back to nothing. In contrast, gold and silver offer stability as actual, physical objects which offer permanence impossible under fractional reserve banking practices coupled with paper currencies issued as evidence of debt which are lent out for a time and then repaid. Although paper currencies also have physical presence unlike their account notation cousins, they are just a small proportion of the total monetary claims in circulation, with far greater amounts found as mere accounting notations and checkbook figures. Banking proponents only dreamed again after 1846 of a uniform liberal banking policy extending nationwide which helped hide their system's faults from easy detection by large numbers of people, so financiers could be viewed in respectful light while making pocketfuls of money. Tragically, as America suffered her greatest crisis 15 years later, her internal War Between the States, the United States of America became a banker's paradise, a veritable heaven on earth for advocates for a strong central government, legal tender paper currencies, and political favor. In 1862, legislation enacted by the 37th Congress and signed into law by first Republican President Abraham Lincoln issued hundreds of millions of dollars worth of new United States notes, the first paper currencies ever declared a lawful money and a legal tender under the Constitution.14
14. 1862, February 25; Chapter 33. (12 Stat. 345).
See also: Monetary Laws, Volume II, Appendix J, Page 506, 2012.
Section 2. The Independent Treasury
Precisely one year later, new legislation allowed creation of a multitude of new national banking associations, each of which could serve as a depository of the public money and fiscal agent of the government.15 Paper currencies issued by the new national banks in 1863 were made receivable for all public dues payable to and by the government, except for duties on imports and interest payments, bringing credibility to those notes while extending their circulation far and wide. The proven Independent Treasury system was gutted in 1862 with paper currencies and further in 1863 with national bank charters. It remained in name form, suffering through to 1920 when it was summarily cancelled seven years after enactment of the Federal Reserve act.16 A more complete paradigm shift of the U.S. financial and political foundation could perhaps not have occurred between 1846 and 1863. The financial elite and the politically-adept became unstoppable forces as government treaded new ground, enacting legislation never before within its sphere. Dividing and conquering the nation from within finally proved successful for ending once and for all the long-standing political feud between hard money proponents of limited government under strict construction of the Constitution and advocates of paper currency and banking under a strong, central government which bestowed political favors on those deemed worthy by government officials whose power suddenly knew no bounds. From that point on, the United States would drift far from the spirit of the Constitution as government officials acted in all cases whatsoever with a power which defied all apparent limitation.
15. 1863, February 25; Chapter 58. (12 Stat. 665).
See also: Monetary Laws, Volume II, Appendix J, Page 513, 2012.
www.PatriotCorps.org. 16. 1920, May 29; Chapter 214. (41 Stat. 631 @ 654 & 655).
See also: Monetary Laws, Volume II, Appendix I, Page 449, 2012.
Chapter 2. Political Feuding
Chapter 3. Promise Money and the Courts Without surprise, the power of Congress to emit a legal tender paper currency was soon challenged in court.
Section 1. Bronson v. Rodes, 74 U.S. 229 (1869)
This first of four primary court cases involving legal tender paper notes was heard by the Supreme Court in 1868 (with their ruling read in 1869), but that court didn't actually address the constitutionality of United States notes being made a legal tender. Even though the Bronson court stated that it was unnecessary for them to address that particular question for their present case, several of the court's general comments are nevertheless informative, including:
"The design of all this minuteness and strictness in the regulation of coinage is easily seen. It indicates the intention of the legislature to give a sure guaranty to the people that the coins made current in payments contain the precise weight of gold or silver of the precise degree of purity declared by the statute. "It recognizes the fact, accepted by all men throughout the world, that value is inherent in the precious metals; that gold and silver are in themselves values, and being such, and being in other respects best adapted to the purpose, are the only proper measures of value; that these values are determined by weight and purity; and that form and impress are simply certificates of value, worthy of absolute reliance only because of the known integrity and good faith of the government which give them."1
The primary favorable ruling of the Bronson court was that:
"express contracts to pay coined dollars can only be satisfied by the payment of coined dollars. They are not 'debts' which may be paid by the tender of United States notes".2
1. Bronson v. Rodes, 74 U.S. 229 @ 249, (1869). 2. Ibid., Page 254.
Section 1. Bronson v. Rodes, 74 U.S. 229 (1869)
Though the court didn't rule on the legal tender quality of United States notes, they nevertheless condoned them in principle, at least for debts incurred after the legal tender acts were enacted (but only those contracts which didn't specify the precise form of repayment), stating:
"when contracts have been made payable in dollars generally, without specifying in what description of currency payment is to be made, judgments may be entered generally, without such specification."3 Section 2. Hepburn v. Griswold, 75 U.S. 603 (1870)
The next case making it to the Supreme Court sought to answer:
"whether Congress has power to make notes issued under its authority a legal tender in payment of debts, which, when contracted, were payable by law in gold and silver coin."4
In proper support of the Constitution and to the great dismay of the proponents of legal tender paper currencies, the Hepburn court explicitly held such power unconstitutional, stating:
"We are obliged to conclude that an act making mere promises to pay dollars a legal tender in payment of debts previously contracted, is not a means appropriate, plainly adapted, really calculated to carry into effect any express power vested in Congress; that such an act is inconsistent with the spirit of the Constitution; and that it is prohibited by the Constitution."5
A few other comments of the court regarding the coining of money were also instructive, including that the power of "regulating" money:
"is a power to determine the weight, purity, form, impression, and denomination of the several coins, and their relation to each other, and the relations of the foreign coins to the monetary unit of the United States."6
3. Ibid., Page 254. 4. Hepburn v. Griswold, 75 U.S. 603 @ 610, (1870). 5. Ibid., Page 625. 6. Ibid., Page 616.
Chapter 3. Promise Money and the Courts
The Hepburn court acknowledged that the power of Congress to issue notes and the power to make them a legal tender aren't the same, saying:
"Indeed, we are not aware that it has ever been claimed that the power to issue bills or notes has any identity with the power to make them a legal tender. On the contrary, the whole history of the country refutes the notion." 7
Both the Bronson and especially Hepburn cases properly prevented United States notes from being held legal tender in the specific cases before them. Of course, proponents of legal tender paper currencies didn't like either of these court rulings, so they pushed ever forward until they got their way. Not even a year would pass before the Hepburn case was seemingly overturned.
Section 3. Legal Tender
But before examining this next case, it is important to realize that
nowhere in the Constitution is the express power given to Congress to explicitly declare anything a legal tender, even gold and silver coin.
The only place in the Constitution where 'tender' is discussed is in Article I, Section 10, Clause 1 where it expressly prohibits States from making "any Thing but gold and silver Coin a Tender in Payment of Debts." This wording therefore acknowledges the reserved power of the States to make formal declarations of legal tender within their borders, but which clause now limits those State declarations of tender to be only gold and silver coin. But when Congress established our money of account and authorized the striking of specified coins, they necessarily provided meaning for those different accounting terms and new coins all regulated in their value. In Sections 9 and 20 of the April 2, 1792 coinage act, Congress chose the terms 'eagles', 'half eagles', 'quarter eagles', 'dollars' or 'units', 'half dollars', 'quarter dollars', 'dismes' (tenths), 'half-dismes', 'cents' (hundredths), 'half cents', and also the value for thousandths ('milles') and described them all.
7. Ibid.
Section 3. Legal Tender
The inevitable effect of declaring the money of account and regulating the value of those coins therefore defined them at law; thereby establishing for all practical purposes the lawful tender for all debts due in that money of account (even if Section 16 had never actually expressly declared it [for the gold and silver coins]). Therefore dollars are the proper tender for all payments due and payable in 'dollars'; whether those dollars are actually declared a tender at law is simply redundant or perhaps even beside the point. That gold and silver coins regulated in their value in terms of dollars end up being declared a tender would at least seem to be an implied means to an allowed end, more beneficial than in any way harmful. But at best, the Constitution only allows Congress to coin money and regulate its legal value (and regulate the legal American value of foreign gold and silver coin made current as American money) but allows only the States to make gold and silver coin a tender in payment of debts. At worst then, in regulating the value of the coins they strike of gold and silver, and in regulating the American value of foreign gold and silver coins they make current as American money, Congress may also declare the said gold and silver coins a tender (to which the States may also declare). But any effective ability for Congress to declare as tender those things which may be made a tender in no way equates with an original power to declare other things also a tender, those things which may not be declared a tender in any of the States united together under a common Union. That Congress may have the implied ability to declare gold and silver coins a tender in payment of debts in no way equates with any express or even implied ability to declare other things a tender, even if those other things are also cleverly called a 'dollar'. Members of Congress have no authorized means to forbidden ends (for the whole country). Only where the remainder of this chapter shows where members of Congress are authorized to make paper currencies a legal tender may they therefore actually do so, under implied powers not expressly prohibited.
Chapter 3. Promise Money and the Courts
Section 4. The Legal Tender Cases, 79 U.S. 457 (1871)
The first court to uphold the legality of legal tender paper currency for payment of debts contracted not only after the passage of the legal tender acts but now also even for debts contracted before passage of the legal tender acts was the Legal Tender Cases (of Knox v. Lee and Parker v. Davis, heard and ruled jointly). Of primary interest to us initially is the court's following admission (here broken out into separate paragraphs for easier analysis):
"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 that of conferring a power to coin money and regulate its value. "It is said there can be no uniform standard of weights without weight, or of measure without length or space, and we are asked how anything can be made a uniform standard of value which itself has no value? "This is a question foreign to the subject before us. "The legal tender acts do not attempt to make paper a standard of value. "We do not rest their validity upon the assertion that their emission is coinage, or any regulation of the value of money; nor do we assert that Congress may make anything which has no value money. "What we do assert is, that Congress has power to enact that the government's promises to pay money shall be, for the time being, equivalent in value to the representative value determined by the coinage acts, or to multiples thereof."8
This precedent-setting case, being the first Supreme Court case to uphold the constitutionality of Congress emitting a legal tender paper currency, is, of course, extremely important to both sides of the argument. This one long paragraph is a virtual gold mine for hard money advocates.
8. The Legal Tender Cases, 79 U.S. 457 @ 552 – 553 (1871).
Section 4. The Legal Tender Cases, 79 U.S. 457 (1871)
This first court to support legal tender paper currency admits:
1. The legal tender acts do not attempt to make paper 'a standard of value'; 2. The legal tender acts (and the notes they authorize) do not rest upon the assertions that: a. The emission of legal tender notes is 'coinage'; b. The emission of legal tender notes is any 'regulation of the value' of money; c. Legal tender notes have (inherent) 'value'; or that d. Legal tender notes are 'money'.
In other words, the court admitted that legal tender paper currency:
1. is not 'coinage'; 2. is not emitted as a 'regulation of the value of money'; 3. is not 'money'; and 4. does not have inherent 'value'.
In case anyone doubts such conclusions, the court also declared:
"We do not, however, rest our assertion of the power of Congress to enact legal tender laws upon this grant."9
As the Legal Tender Cases clearly stated in their admission, the coining of money and the regulating of its value were topics (wholly):
"foreign to the subject before us."
And finally, the court clarified matters even further, simply stating:
"It is, then, a mistake to regard the legal tender acts as either fixing a standard of value or regulating money values, or making that money which has no intrinsic value."10
From our earlier study of the coinage acts and brief study of several of the Constitution's monetary clauses, we know that American lawful tender money — the 'dollar' — consists only of a precise amount of pure gold or silver (in coin form, mixed with an alloy into a proper standard of purity).
9. Ibid., Pg 546-547 (on the grant of power to coin money and regulate its value). 10. Ibid., Page 553.
Chapter 3. Promise Money and the Courts
By the Legal Tender Cases' express admission, the justices importantly did not refute this fundamental position! The first court to support the legality of legal tender paper notes only asserted and upheld, that, "for the time being":
"the government's promises to pay money shall be… equivalent in value to the representative value determined by the coinage acts."11
From this obtuse statement, from such extreme literary gymnastics, one begins to understand that this 150-year-old American tradition of legal tender paper currencies rests upon a support structure so weak that it cannot be overtly admitted without threatening the whole kit and caboodle. The central question raised by the Legal Tender Cases' clear confession is that if the power to emit a legal tender paper currency does not rest upon this power to coin money or regulate its value, then under which constitutional power does that ability rest? Sadly there is little knowledge today of the points expressly admitted by the Legal Tender Cases (that the power to emit legal tender paper currencies do not rest upon the power to coin money or regulate its value), but such important admissions are seemingly lost down the 'memory hole'. The Hepburn court called paper dollars "mere promises to pay dollars;" the Legal Tender Cases calls them "the government's promises to pay money;" while the Bronson court stated that "The note dollar" was a "promise to pay a coined dollar."12 This 'promise money' promises at some point to pay the bearer 'dollars', 'money', and 'coined dollars'. Earlier study informs us that these latter terms constitutionally point only to coined dollars of silver and gold.
11. Ibid. 12. Hepburn v. Griswold, 75 U.S. 603 @ 625 (1870); Legal Tender Cases, 79 U.S. 457 @ 553 (1870); Bronson v. Rodes, 74 U.S. 229 @ 251. (1869), respectively.
Section 4. The Legal Tender Cases, 79 U.S. 457 (1871)
Section 5. Criminal Jurisdiction
Before examining a later key paragraph which helps constitutional strict constructionists come to a full and proper understanding of the Legal Tender Cases, odd as it sounds, it is helpful to first know a little about the express criminal jurisdiction of the United States which is detailed in the Constitution, which is:
1. Treason;13 2. Counterfeiting the Securities and current Coin of the United States;14 and 3. Piracies and Felonies committed on the high Seas and Offences against the Law of Nations.15, 16
For example, if a criminal performed his illicit trade of counterfeiting the current coin of the United States within the boundaries of a State, it would nevertheless yet be a federal crime because the federal jurisdiction for this crime is expressly conferred in the Constitution. Federal officers pursuing the alleged criminal could pursue him throughout the United States and federal courts would hear his case after he was caught and indicted. Being found guilty, the counterfeiter would be punished in accordance with federal law within the federal court and penal system. However, with federal jurisdiction properly limited, if a criminal instead committed a crime such as robbery within the boundaries of a State, since the Constitution doesn't expressly list the crime, it would therefore be a State crime punishable locally by the appropriate political subdivision where the crime was committed (county, city, etc.) and federal authorities would have no jurisdiction in the matter.
13. U.S. Constitution: Article III, Section 3, Clauses 1 & 2. 14. U.S. Constitution: Article I, Section 8, Clause 6. 15. U.S. Constitution: Article I, Section 8, Clause 10. 16. Impeachment is also discussed in the Constitution, in Article I, Section 2, Clause 5; Article I, Section 3, Clauses 6 & 7; and Article II, Section 4.
Chapter 3. Promise Money and the Courts
The early federal crime acts explicitly followed this strict constitutional outline, while they also yet listed a large class of crimes not overtly mentioned in the Constitution. For example, besides discussing the federal crimes of treason, piracy and counterfeiting, the April 30, 1790 crime act also discussed this large class of crimes such as found in Section 3, which stated (with italics added):
"That if any person or persons shall, within any fort,
arsenal, dock-yard, magazine, or in any other place or district of the country, under the sole and exclusive jurisdiction of the United States, commit the crime of wilful murder, such person
or persons on being thereof convicted shall suffer death."17
Section 7 of the 1790 crime act similarly stated (italics added):
"That if any person or persons shall within any fort, arsenal, dock-yard, magazine, or other place or district of country, under the sole and exclusive jurisdiction of the United States, shall commit the crime of manslaughter, and shall be thereof convicted, such person or persons shall be imprisoned not exceeding three years, and fined not exceeding one thousand dollars."18
On March 3, 1825, Congress enacted another crime act, which also followed the same principles and covered the crimes of treason, counterfeiting, piracy and again listed certain crimes within the exclusive legislative jurisdiction for the seat of government and forts, magazines, arsenals, dock-yards, other needful buildings; areas under the sole and exclusive jurisdiction of the United States.19
17. 1790, April 30; Chapter 9, Section 3. (1 Stat. 112 @ 113)
See also: Monetary Laws, Volume II, Appendix K, Page 590. 2012.
www.PatriotCorps.org. 18. 1790, April 30; Chapter 9, Section 7. (1 Stat. 112 @ 113)
See also: Monetary Laws, Volume II, Appendix K, Page 591. 2012.
www.PatriotCorps.org. 19. 1825, March 3; Chapter 65. (4 Stat. 115).
See also: Monetary Laws, Volume II, Appendix K, Page 597. 2012.
Section 5. Criminal Jurisdiction
To properly understand the 1790 and 1825 crime acts, one must first understand Article I, Section 8, Clause 17 of the U.S. Constitution, which states:
"Congress shall have Power…To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings."
Anyone reading Article I, Section 8, Clause 17 will see that while this clause does not explicitly 'mention' the express criminal jurisdiction for such exclusive legislative areas, it does, however, explicitly mention and expressly discuss exclusive Legislation "in all Cases whatsoever," to which "all Cases" would naturally extend to criminal as well as civil jurisdiction. It is therefore patently obvious the 1790 and 1825 crime acts actually followed express jurisdictional principles of the Constitution, of a proper separation between the federal and State government jurisdictions, and thus that there was no constitutional infirmity whatsoever by either act. With that brief review of constitutional criminal jurisdiction and look into the 1790 and 1825 crime acts, it is now appropriate to return to the Legal Tender Cases, to properly examine the vital clue therein 'hidden in plain sight'. Our purpose for examining the Legal Tender Cases is to learn in detail precisely how that court upheld the power of Congress to emit legal tender paper currencies (without the support of Article I, Section 8, Clause 5 of the Constitution). The trick to understand the Legal Tender Cases is to pay strict attention to what is being inferred versus what is being legally stated. The all-important clue for reconciling this case with the Constitution was provided by Justice Strong who wrote the opinion of the court. 50 Chapter 3. Promise Money and the Courts
After specifically listing treason, counterfeiting, piracy and mentioning impeachments (which Justice Strong elsewhere correctly acknowledged are "the only direct reference[s] to criminal legislation contained in the Constitution"),20 Justice Strong writes (again separating his comment into different paragraphs for greater ease of understanding [and adding underscore, above and below]):
"This is the extent of power to punish crime expressly conferred. "It might be argued that the expression of these limited powers implies an exclusion of all other subjects of criminal legislation. "Such is the argument in the present cases. "It is said because Congress is authorized to coin money and regulate its value it cannot declare anything other than gold and silver to be money and make it a legal tender. "Yet Congress, by the act of April 30, 1790, entitled "An act more effectually to provide for the punishment of certain crimes against the United States," and the supplementary act of March 3d, 1825, defined and provided for the punishment of a large class of crimes other than those mentioned in the Constitution, and some of the punishments prescribed are manifestly not in aid of any single substantive power. "No one doubts that this was rightfully done, and the power thus exercised has been affirmed by this court in United States v. Marigold. (9 Howard, 560)."21
It should be stated that the matter before the court involved acknowledged debts being paid in legal tender notes; it was not a criminal matter where any defendant was being tried for any crime. One could perhaps all-too-easily therefore dismiss this discussion of criminal matters as immaterial to the case at hand. However, discussion of seemingly-irrelevant topics could perhaps actually provide important clues to the careful reader that he or she is missing something of profound importance.
20. The Legal Tender Cases, 79 U.S. 457 @ 545 (1871). 21. Ibid., Pages 535 – 536.
Section 5. Criminal Jurisdiction
Justice Strong noted the (correct) argument that "the extent of power to punish crime expressly conferred" by the Constitution implies "an exclusion of all other subjects of criminal legislation." He noted that the same principle — the limitation of power to being only that expressly conferred — was actually being argued in the present cases before him, that "because Congress is authorized to coin money and regulate its value" that it "cannot declare anything other than gold and silver to be money and make it a legal tender." This, of course, is precisely the strict-constructionist's claim; that a government of expressly delegated powers has no more powers given to it than are expressly given or are necessarily and properly incident to their actual delegations of authority. Or, as often paraphrased; that where the ends are given, government has a certain amount of discretion to decide the means used to pursue those appropriate ends, but no discretion to pursue ends which are not given. But in seeking to justify Congress declaring paper currency a legal tender, Justice Strong interestingly next jumps to the 1790 and 1825 crime acts, detailing that they "defined and provided for the punishment of a large class of crimes other than those mentioned in the Constitution," other than those crimes which had "direct reference…in the Constitution", other than that criminal jurisdiction which was "expressly conferred" in the Constitution.22 Justice Strong then adds that "No one doubts this was rightfully done," and that this power to do so in other particular instances actually "has been affirmed by this court in United States v. Marigold." The only "large class of crimes" not "mentioned" or not "directly referenced" in the Constitution, or where that criminal jurisdiction was not "expressly conferred" but which were otherwise discussed within both the 1790 and 1825 crime acts were only those crimes occurring "within any fort, arsenal, dock-yard, magazine, or other place or district of country, under the sole and exclusive jurisdiction of the United States" or other words used to reach that same effect.23
22. Ibid., Pages 536, 545, and 536, respectively.
Chapter 3. Promise Money and the Courts
In words few people would notice, in a phrase few citizens would readily understand for its vast implications, the perhaps seeminglyirrelevant reference by Associate Justice William Strong to the exclusive legislative power of Congress in criminal cases was his deft and subtle reference to the actual authority under which that court was now upholding the power of Congress to emit a legal tender paper currency. Congress could punish murder or manslaughter in the exclusive legislative jurisdiction of the United States without express criminal authority for those crimes being 'mentioned', 'directly referenced' or 'expressly conferred' within the Constitution because the Constitution grants Congress the power to exercise exclusive legislation "in all Cases whatsoever" for these limited areas. These "all Cases" under the "sole and exclusive jurisdiction of the United States" includes the power in these areas to enact criminal legislation. These "all Cases" under the "sole and exclusive jurisdiction of the United States" also includes the power in these areas to emit legal tender bills of credit, as now ruled by the Legal Tender Cases (and one cannot find direct fault with their reasoning, as things currently stand).
23. Advocates for omnipotent government will likely attempt to argue against this conclusion, supporting their point by showing that U.S. v. Marigold dealt with counterfeit coins brought into the U.S. and fraudulently passed on to others (and thus had nothing to do with the exclusive legislative jurisdiction). While their take on Marigold is accurate, it is beside the point. It is noteworthy to realize that the Marigold court itself only referenced the act of March 3, 1825. The 1790 crime act did not deal with counterfeit coins whatsoever, as the first coinage act wasn't even enacted until 1792. It was actually Justice Strong who so cleverly sought to hide well the basis for his opinion in plain sight by intermixing several points; but his opinion very clearly points to both the 1825 and 1790 crime acts. In both of those acts, the only "large class of crimes other than those mentioned in the Constitution" dealt with the exclusive legislative jurisdiction of Congress.
Section 5. Criminal Jurisdiction
Members of Congress were able to enact the legal tender acts in the same manner as they enacted the 1790 and 1825 crime acts even as some of the crimes discussed in those two acts were not overtly mentioned, directly referenced, or expressly conferred in the Constitution — under the power of Article I, Section 8, Clause 17!
Section 6. First Bank of the United States
An historical look into the exclusive legislation power is helpful to better understand it today. As discussed earlier, in 1791, the first bank of the United States was chartered for a 20-year term. However, President George Washington had been reluctant to sign the proposed bill which sat upon his desk and awaited his signature because there was no express delegation to Congress for this power within the Constitution and he served as President of the constitutional convention where the express power to incorporate was thrice denied to Congress. Thus in accordance with Article II, Section 2, Clause 1 of the Constitution, President Washington sent the proposed bill to his principal officers of pertinent executive departments and required their formal written opinions as it related to the duties of their respective offices. Secretary of State Thomas Jefferson replied the bank act would "break down" our "most ancient and fundamental laws" which "constitute the pillars of our whole system of jurisprudence."24 Attorney General Edmund Randolph likewise categorically denied Congress the power to charter a bank or corporation. Whereas Jefferson and Randolph (and Congressman James Madison) responded as Americans ever since have responded to questions of government authority (by looking to the general rules of the Constitution and responding accordingly), Secretary of the Treasury Alexander Hamilton took a slightly different route.
24. George Washington Papers at the Library of Congress, Series 2, Letterbook 32, Page 115: http://memory.loc.gov/ammem/gwhtml/gwseries2.html.
Chapter 3. Promise Money and the Courts
After all, Hamilton affirmed "that the power of erecting a corporation is not included in any of the enumerated powers" and conceded "that the power of incorporation is not expressly given to Congress," but the bank was nevertheless pivotal to his plans for a strong central government.25 Hamilton's opinion on the constitutionality of a bank didn't concentrate so much on rules, but on their single exception, stating:
"Surely it can never be believed that Congress with exclusive powers of legislation in all cases whatsoever, cannot erect a corporation within the district which shall become the seat of government...And yet there is an unqualified denial of the power to erect corporations in every case on the part both of the Secretary of State and of the Attorney General."26
After directly quoting the express power of Congress under Article I, Section 8, Clause 17, Hamilton stated:
"Here then is express power to exercise exclusive legislation in all cases whatsoever over certain places, that is, to do in respect to those places all that any government whatsoever may do; For language does not afford a more complete designation of sovereign power than in those comprehensive terms."27
Hamilton's rarely-admitted words about the wholly-misunderstood power of Congress to exercise exclusive legislation "in all Cases whatsoever" ring with omnipotence. Congress may "do in respect to those places all that any government whatsoever may do," Hamilton argues, because "language does not afford a more complete designation of sovereign power than in those comprehensive terms." Powerful words indeed: awe-inspiring power, in fact.
25. Ibid., Pages 121and 136, respectively. 26. Ibid., Page 137. 27. Ibid.
Section 6. First Bank of the United States
Concluding those thoughts, Hamilton wrote:
"As far, then, as there is an express power to do any particular act of legislation, there is an express one to erect a corporation in the case above described."28
Under such reasoning, the first bank was chartered for a 20-year term (at the government seat), after President Washington signed the bill. It would be difficult to find a single decision which would more determine the fate of the United States over the next 200+ years, than this act which first began clearing a path away from strict construction of the whole Constitution, with one single clause rising to dominate all others. But Hamilton was right, members of Congress are empowered by the Constitution to charter a corporation at the government seat due to their power to exercise exclusive legislation in all Cases whatsoever for that district constituted as the seat of government of the United States. The principle established by Secretary of the Treasury Alexander Hamilton and conceded by President George Washington which bolstered strong central government was that if the words of any law cannot be reconciled with any other clause but Article I, Section 8, Clause 17, then to keep it from being held 'unconstitutional', government may there allow it. This is the invaluable lesson to be learned from the 1791 banking act, and now, by the 1871 Legal Tender Cases. Bear in mind that the great legal minds of Jefferson, Randolph and Madison all had to be told by that bank bill's leading proponent that the authority for that bill rested on Article I, Section 8, Clause 17 (they had all explicitly argued that the bill was unconstitutional). But Hamilton pointed out the bank bill was not unconstitutional, because one single clause of the Constitution could authorize it, and so that was the power under which they were actually going to authorize it.
28. Ibid., Page 138. Hamilton was directly referring to incorporating the District of Columbia as a government, but was inferring that if they could there incorporate a municipal government corporation, then they could also incorporate a bank to meet one of the purposes for which government was to be incorporated.
Chapter 3. Promise Money and the Courts
The single clause of the Constitution which could authorize a national bank was the clause which gave Congress the power to exercise exclusive legislation in all cases whatsoever for the government seat, and like authority for forts, magazines, arsenals, dock-yards, & other needful buildings.
Section 7. in all Cases whatsoever
To properly understand the ramifications and scope of this power to exercise exclusive legislation "in all Cases whatsoever," please realize that this is precisely the same exact claim that British Parliament made in their March 18, 1766 Declaratory Act — that the king and Parliament could bind the American colonies "in all cases whatsoever."29 Given this bold and audacious British claim, it should come as no surprise that we Americans directly countered it with our Declaration of Independence (a decade later) and in several State Constitutions.30 The thirteenth of the "He has…" paragraphs in the Declaration (which list facts of "repeated injuries and usurpations" being submitted to a candid world) lists nine subcategories, nine "For…" paragraphs which pertain back to that heading of "Acts of pretended Legislation" which all had in direct object "the establishment of an absolute Tyranny over these States." The ninth and final of these "For…" sub-paragraphs lists (italics added):
"For suspending our own Legislatures, and declaring themselves invested with Power to legislate for us in all cases whatsoever."
Among our principal reasons for declaring independence was these acts of "pretended legislation" which were "formidable to tyrants only," acts which suspended our own colonial legislative representation, which representation was and is our fundamental and "inestimable" right.
29. A.k.a., The American Colonies Act. www.constitution.org/bcp/decl_act.htm.
An Act for the Better Securing the Dependency of His Majesty's Dominions in America Upon the Crown and Parliament of Great Britain. 6 George III, c. 12, The Statutes at Large, ed. Danby Pickering
(London, 1767), XXVII, 19 - 20. 30. South Carolina's 1776 Constitution began with this complaint: "Whereas the British Parliament, claiming of late years a right to bind the North American colonies by law in all cases whatsoever…without the consent and against the will of the colonists..."
Section 7. in all Cases whatsoever
It is yet vital to realize that the U.S. Constitution also uses this same precise phrase of historical importance, again word-for-word — "in all Cases whatsoever" — to explicitly describe the extent of power Congress may lawfully exercise in the government seat, power rightly referred to as tyranny and despotism. And, without surprise, the same complaints made by millions of Americans today against their ruling tyrant — the government of the United States — are all rooted in that same despotic power of government being able to legislate for us "in all cases whatsoever" which the Declaration of Independence complained about, which words were originally found in the 1766 Declaratory Act of British Parliament claiming absolute power and total dominion over the American colonies of Great Britain. With Congress being able to exercise exclusive legislation "in all Cases whatsoever" over the seat of government, there is here almost no case where they need refrain from acting. Such awe-inspiring power signifies they can do most anything here they please (at least that which is proper to free government), except where they are expressly prohibited. Kind of like exactly what has been going on to varying degrees especially for the last 150 years, especially since onset of the Civil War, only seemingly in places well beyond those geographically-limited areas. But the key point to realize is that the federal government is, in fact, authorized to act with a superabundance of power; it just ostensibly acts in such manner beyond its express physical limits. First off, one must understand the limitations on this power. Article I, Section 8, Clause 17 legally restricts the government seat to "ten Miles square" (100 square miles). The district constituting the seat of government cannot be extended beyond this area by express constitutional prohibition. The district also had to first be ceded by a particular State (or States) willing to cede given lands and governing authority over to the United States (which Maryland and Virginia voluntarily did). 58 Chapter 3. Promise Money and the Courts
"Like" authority may also be exercised within federal forts, magazines, arsenals, dock-yards, and other needful buildings, as long as those lands were "purchased" with the "Consent of the Legislature of the State in which the Same shall be," which States then ceded their governing authority over to Congress for these ceded areas.
31. 1835 Map of the District of Columbia. www.memory.loc.gov/ammem/gmdhtml/citymapsubjectindex1.html. (First, click on 2nd-to-last group ("From Warner (N. H.)—Aerial viewfacsimile To White House (Washington, D.C.)"; Second, then click on "Washington (D.C.) – Maps."; Third, then click on map #41).
Section 7. in all Cases whatsoever
So, in all these various exclusive legislation lands (which do not extend to the 'public lands') which have been ceded by States, no State authority remains and Congress hereafter exercise 'all' legislative jurisdiction, 'exclusively'.32 These enclaves are the only places in the United States where one government handles all matters; everywhere else jurisdiction is divided into federal and State issues according to the Constitution. Of course, when acting in the place of a State, Congress needn't follow only their restricted powers which are only meant to be followed when they legislate for the whole country. After all, since States ceded all their governing authority in these specified lands to Congress, someone must still enact and carry out law for these areas (it's not like murder can therein be condoned, for example).33 In these areas now without State authority, Congress acts in the place of States on a wide variety of topics without running afoul with normal Constitutional restrictions against a Congress of otherwise limited powers. However, unlike States with their own (State) constitutions to guide and restrict State action, the seat of government has no similar local framework (only Article I, Section 8, Clause 17). And since the seat of government is not a State (but created from States), neither must the constitutional restrictions meant for States be here followed (like the Article I, Section 10, Clause 1 restrictions on States from making anything other than gold and silver coin a tender in payment of debts within their borders).
32. Local D.C. councils are irrelevant, as the Constitution itself vests with Congress 'exclusive' legislative jurisdiction "in all Cases whatsoever." 33. Some people may argue to the contrary, since State laws have been adopted for exclusive legislation federal areas (see; 18 USC 13). But this argument actually reinforces the point; State laws for federal areas are adopted by Congress and enforced federally (under Article I, Section 8, Clause 17), not by and under State authority (and inhabitants of exclusive legislative lands have no inherent right of legislative representation in any State and none in Congress).
Chapter 3. Promise Money and the Courts
The Constitution consistently treats the district constituting the seat of government of the United States separately and wholly apart from the several States.
Section 8. Electors
Article II, Section 1, Clause 2 of the U.S. Constitution provides that "Each State shall appoint…Electors" for electing the President and V-P. Of course, since the district constituting the seat of government is not a State, residents of the District of Columbia were long wholly unable to have any say whatsoever in electing a President. Until, that is, 1961, when the States ratified the 23rd Amendment to our Constitution. The 23rd Amendment now provides that "The District constituting the seat of government of the United States shall appoint…A number of electors" as "if it were a State" ("but in no event more than the least populous State") and those electors "shall be considered…to be electors appointed by a State" (for the purposes of electing the President and V-P). Thus, because the Constitution was explicitly amended to purposely allow the district constituting the seat of government to be held as "if it were a State" only for the express purpose of allowing residents to vote for President and Vice-President through their electors, this Amendment overrode the earlier constitutional command that originally allowed only States to appoint electors. Now local residents of the District of Columbia may have their electoral votes counted as if the District were a State. But the District of Columbia is not held as if it were a State for any other reason. Thus, without another amendment expressly holding the district as if it were a State also for the express purposes of Article I, Section 10, then it will continue to remain separate from the States also for this purpose. Therefore, when Article I, Section 10, Clause 1 declares that "No State shall…coin Money, emit Bills of Credit; (or) make any Thing but gold and silver Coin a Tender in Payment of Debts," these express words do not apply to the District of Columbia (or to Congress, of course, which members may act with indifference to that clause for D.C.)! Section 8. Electors 61
Consequently, there is no express prohibition against Congress emitting bills of credit and here declaring them a legal tender. Under the whole of the Constitution — other than Article I, Section 8, Clause 17 — members of Congress are delegated only express powers which they are powerless to expand beyond. But in the district which constitutes the seat of government of the United States, Congress here exercises exclusive legislation "in all Cases whatsoever" and may here pass laws well-beyond their express delegations which they must follow when enacting laws for the whole Union. Congress does not here in the government seat need any express delegation of authority to act beyond the general authority to act "in all Cases whatsoever." If they want to charter a bank, Congress may do so, as pointed out by Alexander Hamilton in 1791. And accordingly, as ruled in the Legal Tender Cases, Congress may also emit bills of credit for the district constituted as the seat of government of the United States and here declare them a legal tender. Most any powers common to western-style governments near the end of the 18th century (when the Constitution was proposed and ratified) are essentially fair game for the government seat — most everything here is up for debate and nothing much need be left off the discussion table. Article I, Section 8, Clause 17 therefore provides Congress with an exceptionally powerful escape route from which they may escape not only their normal constitutional restraints, but most any restraint!
Section 9. Legislative Representation in States
The Constitution only authorizes States to elect U.S. Representatives and U.S. Senators.34 Since it is no longer part of a State, the seat of government can have no direct and actual legislative representation in Congress for its inhabitants.
34. See; Article I, Section 2, Clause 1, Article I, Section 3, Clause 1, and the 17th Amendment.
Chapter 3. Promise Money and the Courts
U.S. Senators and U.S. Representatives enact laws for the district constituted as the seat of government of the United States; local residents therein are under a federally-authorized tyranny where others may legislate for them "in all Cases whatsoever," just like the colonial Americans with regard to Parliament. But the pressing concern isn't for the relatively small number of people who willingly live without legislative representation in federal areas, but
how this federal tyranny has seemingly extended its omnipotent powers beyond its strictly-limited borders.
While Article I, Section 8, Clause 17 authorizes exclusive legislative jurisdiction for the seat of government (and like authority for areas within the States purchased for forts, etc.), the remainder of the Constitution is then the guidebook for which Congress must follow when enacting laws for all the States united, the Union of States. On the one hand and in a very specific case, members of Congress have awesome amounts of power ; while on the other hand and in all other cases, they have but limited powers. The 'trick', for those addicted to government power, has obviously been to work under the former whenever possible and as long as possible. The length of time under which they may continue to act beyond their express geographic limitations is until we Americans learn what they have been doing and then put an appropriate stop to it !35 The district constituted as the seat of government of the United States is the Seed of Tyranny which has deceptively spread its disease throughout the United States "in all Cases whatsoever." In the 1790 and 1825 crime statutes earlier detailed, if the sections of federal law which detailed crimes such as murder, manslaughter, robbery, etc., had been worded to instead operate outside of this exclusive legislative jurisdiction and throughout all the United States, they would have violated the constitutional separation of powers between Congress and the States.
35. See; Chapter 5 regarding how to stop it.
Section 9. Legislative Representation in States
However, by limiting those statutes to only that appropriate exclusive legislative jurisdiction, no constitutional infirmity was created. The same principle applies to all later laws enacted under this authority; only don't expect any proponent today to admit that the true applicability of their omnipotent laws only directly pertains to exclusive legislative lands as did Hamilton with the 1791 bank act (who needed to admit that power only the first time it was used in such manner).36 Thankfully, the vast bulk of the whole charade of omnipotent government, of government appearing to operate beyond the Constitution, only legally operates within these exclusive legislative jurisdiction parameters where members of Congress are enacting otherwise local laws and the normal constitutional limitations on federal government power which are meant to operate throughout all the States do not apply. The U.S. government operating in apparent excess of the Constitution is based upon this simple concept (of course, the details get complicated). For example, the February 25, 1862 legal tender act made the new United States notes, except for payment of duties on imports and for payments of interest, "lawful money and a legal tender in payment of all debts, public and private, within the United States."37 A July 11, 1862 legal tender act likewise made United States notes "lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest."38
36. What was important to Hamilton was simply to get the bank authorized; he didn't care whether he had to then admit the source of the power. In time, it would be forgotten by all except those who would use its power to extend their own. 37. 1862, February 25; Chapter 33, Section 1. (12 Stat. 345).
See also: Monetary Laws, Volume II, Appendix J, Page 506, 2012.
www.PatriotCorps.org. 38. 1862, July 11; Chapter 142, Section 1. (12 Stat. 532)
See also: Monetary Laws, Volume II, Appendix J, Page 511. 2012.
Chapter 3. Promise Money and the Courts
A March 3, 1863 legal tender act stated that Treasury notes "may be made a legal tender to the same extent as United States notes, for their face value excluding interest."39
Section 10. within the United States
Supporting the holding of Treasury and United States notes as "legal tender" can be as simple as holding the phrase "within the United States" to mean only the exclusive legislation jurisdiction lands. Since every legislative act begins, "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That…", one would find the phrase "within the United States" rather redundant, unless the words had alternate meaning on occasion. Thus, while those same words "within the United States" as found in the foreign coinage acts of April 29, 1816, June 25, 1834, and June 28, 1834 (Chapter 96) can and do mean all the United States of America, they don't mean that in the legal tender acts. It is important to always look at the actual use of any words in any given act to find their true meaning. Such acts are not unconstitutional because they do not actually violate the Constitution. They are certainly opposed to the spirit of the whole Constitution beyond one particular clause, but not its letter, due to that one particular clause. If the use of the words cannot signify powers meant for the whole country under the Constitution, then to avoid constitutional conflict, they must have the more limited meaning assigned to them (for the seat of government, in this case). Either words must be given very precise and limited definitions to keep them from violating express constitutional principles or the act will be thrown out as unconstitutional — there is no third choice of true
government omnipotence!
39. 1863, March 3; Chapter 73, Section 2. (12 Stat. 709)
See also: Monetary Laws, Volume II, Appendix J, Page 530. 2012.
Section 10. within the United States
Section 11. Presidential Elections
Presidential elections help provide a clear refutation of the possibility of a third choice, of an omnipotent form of government operating directly throughout the whole Union. Both major political parties today push hard for the candidate of their choice in a great game of winner-take-all politics, with expenditures on or against each of the two major candidates now surpassing $1 billion by the political parties, PACs, and related or independent entities. That one billion dollars are now spent on or against each of the two major candidates every presidential election season simply to select one President for a four-year term which pays but $400,000 per year (and $50,000 of expenses) provides compelling evidence of a sincere belief by many Americans that the outcome of the race is of profound importance in the direction of our country over the next four years. It seems unquestioned today that those persons elected to political offices (or legislative seats) may move their parameters of allowed operation at will (at least if enough of their colleagues agree), and thus the critical need to elect the "right" persons to those positions. But proponents who argue that people elected to positions of power may change their parameters of allowed action at will must explain why the Constitution sets such low thresholds for determining who wins elections, while it actually sets very high thresholds for changing the powers allowed government (and that the people involved in exercising federal power never have final say in setting those boundaries). For example, in selecting the President in 2012, under the 2010 census, California had 55 electoral votes, while the fourteen least-populated States such as Vermont, Idaho and Nebraska had but three, four, or five each, totaling only 51 electoral votes. In the run to win the majority of electoral votes (270), the single State with the greatest population numbers had greater political pull for determining who wins the office of President all by itself than 14 other States with the least population numbers. 66 Chapter 3. Promise Money and the Courts
When intentionally changing the allowed powers of the U.S. government by ratifying a constitutional amendment however, even those 14 States with the lowest population numbers — all by themselves — may prohibit ratification, even if all 35 other States of the Union sided with California ! What would here be a veritable landslide in a presidential election would yet fail to ratify an Amendment. It would be absurd to make such a high standard for changing the powers of government if those exercising its power may simply change them at will. This provides compelling evidence that matters outside common understanding come into play; that those who believe office-holders or legislative members may change the direction of government away from the Constitution at will are utterly and completely wrong. If our Constitution's framers protected us so well against deliberate increases in government power, just how much more would they protect us against illegitimate increases, of the President, Congress, or the Courts simply taking it upon themselves to do as they please? As Article V of the Constitution plainly declares, after all, only the States may ratify amendments to the U.S. Constitution (or attend conventions) and therefore only the States are empowered to actually change the powers of the federal government. Thus the President, Congress, and/or the Courts — individually or combined — are wholly incapable of changing their own (or one another's) powers (we simply haven't properly understood their mode of action). The illegitimate exercise of discretion outside of allowed parameters, after all, is but a polite term for tyranny. Since the whole point of declaring our independence and setting up a new form of government was to remove ourselves from despotism and institute free government based upon the consent of the governed, is it really likely that we threw off one tyrant only to accept another? Section 11. Presidential Elections 67
Our forefathers did not set up a system of government which may hold us hostage at every election cycle, legislative session, or sitting of the courts, but it is incumbent upon us citizens to learn not only more about our constitutional form of government, but explicitly how our government has seemingly circumvented the Constitution's very restrictions against omnipotent government. Members of Congress enacting laws for the whole Union only have expressly-delegated powers, or powers necessarily incident to those powers. Thus, since they do not have the express power extended to them under the Constitution to emit bills of credit or otherwise issue a legal tender paper currency, they may not do so for the whole Union. But that same Congress may enact laws for the district constituted as the seat of government "in all Cases whatsoever," except where they are expressly prohibited. Since the Constitution nowhere expressly prohibits Congress from issuing a legal tender paper currency, Congress may therefore emit a legal tender paper currency in the locale where they may act without any additional specific grant of general power, (but, of course, that currency is then only a legal tender within those same limited locales). Remember, the States may not emit bills of credit or make them a tender in payment of debts due to the express constitutional prohibition found in Article I, Section 10, Clause 1.40 And since Congress may exercise reserved and even original powers of States within the district constituted as the seat of government of the United States, but aren't held to the same restrictions which the Constitution today imposes upon States, Congress may here emit a legal tender paper currency, as upheld by the Legal Tender Cases.
40. Before ratification of the Constitution, many States emitted bills of credit, many of which were also declared a legal tender (thus the purpose of this clause, prohibiting activities which were before exercised).
Chapter 3. Promise Money and the Courts
But just because the district's monetary unit is also called a "dollar" however, or because members of Congress are enacting these primarilylocal laws, do not jump to the incorrect conclusion that this dollar has replaced our constitutionally-authorized money of only gold or silver coin. Just because Canada has a dollar as its monetary unit — like Fiji, Australia, New Zealand, Hong Kong, Singapore, Belize, Zimbabwe, and over a dozen other countries— they aren't the same as our American dollar. Neither is the District of Columbia paper dollar (or base-metal coins) the same as our American gold or silver dollar. Giving a word or phrase a limited legal definition, to change the meaning of things, allows people to be made the 'dupes of sounds'. When people hear a word, term, or phrase, their mind naturally jumps to the common (but incorrect) meaning. They soon lose track of what is going on, because their mind has jumped to the wrong conclusions. Next they start questioning their ability to understand the limitations of Congress; start asking how government may ignore the Constitution with impunity; how the Courts became a power unto themselves; or if words any longer have meaning. Of course, that doesn't mean the courts, Congress, or others in government (or in private industry who also benefit) go out of their way to disclose the true facts of the matter. But those acting in secretive fashion must walk a very fine line or they will themselves be guilty of acting in a criminal manner. Thus, always be on the lookout for clues.
Section 12. The Legal Tender Cases (concurring opinion)
The concurring opinion written by Associate Justice Joseph P. Bradley in the Legal Tender Cases is also quite informative.41
41. Both Justices Strong and Bradley were appointed to the court on February 7, 1870 (the same day the Hepburn v. Griswold decision was read), by third Republican President Ulysses S. Grant (as the Judiciary Act of 1869 [enacted April 10th {16 Stat. 44, Chapter 22}] allowed one more associate justice and one vacancy was filled).
Section 12. The Legal Tender Cases (concurring opinion)
Rather than point to the exclusive legislative jurisdiction in criminal cases as did Justice Strong, Justice Bradley pointed to that same jurisdiction instead by pointing to the example of Congress incorporating corporations (namely the first and second banks of the United States) also without 'express authority' under the Constitution.42 Justice Bradley was even so kind as to first relate the history at the constitutional convention of an early proposal to vest with Congress the express power to charter corporations, which proposal was there resoundingly defeated. Bradley then relayed how proponents of this power limited their proposal twice further, finally to only empower Congress to charter corporations only for the express purpose of building canals. Convention delegates still rejected even this third proposal; thus Congress was (thrice) purposefully denied any express power to charter corporations. But then Justice Bradley next arrogantly boasts:
"Yet Congress has…chartered two United States banks, whose constitutionality has been sustained by this court."43
Of course, Secretary of the Treasury Alexander Hamilton already taught us precisely how Congress was actually able to charter the bank(s). But Bradley atones for such sins by clarifying the power to issue notes:
"is entirely distinct from that of coining money and regulating the value thereof…It is a promise…to pay dollars…not…to make dollars."44
With the necessary implications of the Legal Tender Cases adequately covered, it is appropriate to now examine Juilliard v. Greenman.
42. Justice Strong also mentions the banks, but not as extensively as did Justice Bradley. See the Legal Tender Cases, 79 U.S. 457 @ 537 (1870). Justice Gray also expressly mentions incorporating banks in Juilliard v.
Greenman, 110 U.S. 421 @ 444 - 445 (1884).
43. Ibid., Page 559. 44. Ibid., Page 560.
Chapter 3. Promise Money and the Courts
Section 13. Juilliard v. Greenman, 110 U.S. 421 (1884)
The single question which this 1884 case sought to answer was:
"whether notes of the United States, issued in time of war, under acts of Congress declaring them to be a legal tender in payment of private debts, and afterwards in time of peace redeemed and paid in gold coin at the Treasury, and then reissued under the act of 1878, can, under the Constitution of the United States, be a legal tender in payment of such debts."45
The final conclusion of the Juilliard court regarding the emission of legal tender paper currencies was that:
"The exercise of this power not being prohibited to Congress by the Constitution, it is included in the power expressly granted to borrow money on the credit of the United States."46
Ignoring for the moment the court's assertion that members of Congress have absolute power to do all that is not (expressly) prohibited them, it is proper to examine their statement that the power to emit a legal tender paper currency "is included in the power expressly granted to borrow money on the credit of the United States." It should first be noticed that as with the Legal Tender Cases, neither does this Juilliard court rest the power to emit a legal tender paper currency upon the power "To coin Money" or regulate its value. That none of the legal tender court cases ever held the power to issue legal tender paper currencies rested upon the power "To coin Money" or regulate its value means that never should strict constructionists today concede such false assertions of any modern-day proponent of legal tender paper currency who incorrectly claim otherwise (as they attempt to bolster their doomed case [that paper money is 'real' money {constitutionally}]).
45. Juilliard v. Greenman, 110 US 421@ 437 – 438, (1884). 46. Ibid., Page 448.
Section 13. Juilliard v. Greenman, 110 U.S. 421 (1884)
From our careful study of the early coinage acts of Congress and the Constitution, we know, strictly speaking, only coined dollars of silver and gold fit within the legal definition of 'money' under the Constitution, which money strictly is only gold or silver coin at precise weights and purity, proportional in their weights and value. But as we've earlier seen, members of Congress have powers beyond those enumerated for use throughout the whole country, within the enumerated power to exercise exclusive legislation "in all Cases whatsoever" for the district constituted as the seat of government of the United States. As ruled by the Juilliard court, the Congress of the United States may emit a paper currency and declare it a legal tender under the express power to borrow money on the credit of the United States, but only as that power
relates to the district constituted as the seat of government of the United States under Article I, Section 8, Clause 17.47
As this meaning isn't yet obvious, it is important to support this conclusion; which brings us back to:
"The exercise of this power not being prohibited to Congress by the Constitution, it is included in the power expressly granted to borrow money on the credit of the United States." 48
Obviously, from the very structure of this absolutely-crucial sentence, the second portion rests solely upon the finding in the first.
A priori reasoning — "because of this, therefore that" — is a 'cause and
effect' form of reasoning under which the conclusions are supported by the premise. If the cause fails or is limited, the supported effect also fails or is likewise limited. Therefore, in this instance, only where the first portion of the sentence is true can the second portion of the sentence also be true.
47. In his concurring opinion in the Legal Tender Cases, Justice Bradley also held that the power for legal tender paper currencies was "incidental to the power of borrowing money" (@ Page 560 [see also; Page 567]). 48. Juilliard v. Greenman, 110 US 421@ 448, (1884).
Chapter 3. Promise Money and the Courts
Thus, since we know the whole of the Constitution — except for Article I, Section 8, Clause 17 — authorizes only a government of delegated powers, we know that the emission of legal tender paper currency
cannot be here authorized under the whole country where government has but delegated powers.
After all, a government of delegated powers cannot support the power to emit bills of credit (even under the express power to borrow money) since the express power to emit a legal tender paper currency is nowhere found within the Constitution, nor is emitting bills of credit necessarily or properly incident to the express power of borrowing money.49 But as the Juilliard court appropriately and correctly held, only where government has power to act in all cases except where prohibited may Congress actually emit bills of credit and declare them a tender, under the power to borrow money. Only where this explicit power "is not prohibited to Congress by the Constitution" and where Congress may act without a positive express grant of authority may Congress therefore enact a legal tender paper currency. The power of emitting bills of credit is only incident to the express power to borrow money only as it relates to the exercise of exclusive legislation in all cases whatsoever for the government seat. "In all cases except where (expressly) prohibited" is actually a more accurate statement of the power for Congress today for the government seat than the original constitutional phrase "in all Cases whatsoever," due to the 1791 ratification of the Bill of Rights which placed specific constitutional restrictions upon Congress which weren't expressed in the 1787 Constitution.
49. See; Section 15 ("Exigencies of Government") of Chapter 3 herein, showing legal tender paper currencies are only proper (even in the government seat) only under some form of emergency or pressing exigency.
See also; Section 14 ("Necessary and Proper-vs.-All Means Not Prohibited") of Chapter 3 herein, showing the standards for implied means (when legislating for the whole country) are they must be
'necessary and proper' for implementing expressly-delegated powers.
Section 13. Juilliard v. Greenman, 110 U.S. 421 (1884)
The power of Congress to emit bills of credit for the government seat is further supported by the following masterpiece (which is again broken up for greater ease of understanding [with italics and underscore added]):
"that Congress has the power to issue the obligations of the United States in such form, and to impress upon them such qualities as currency for the purchase of merchandise and the payment of debts, as accord with the usage of sovereign governments. "The power, as incident to the power of borrowing money and issuing bills or notes of the government for money borrowed, of impressing upon those bills or notes the quality of being a legal tender for the payment of private debts, was a
power universally understood to belong to sovereignty, in Europe and America, at the time of the framing and adoption
of the Constitution of the United States. "The governments of Europe, acting through the monarch or the legislature, according to the distribution of powers under their respective constitutions, had and have as sovereign a power of issuing paper money as of stamping coin. "This power has been argued and fully considered, in which the Emperor of Austria, as King of Hungary, obtained from the English Court of Chancery an injunction against the issue in England, without his license, of notes purporting to be public paper money of Hungary."50
One must be careful not to ascribe too much meaning to such legal filler designed to confuse the reader, to lead him or her astray. Is it true that the Emperor of Austria, as King of Hungary, obtained an injunction from the English Court of Chancery? Probably, but so what? That otherwise-irrelevant matters are pressed merely points to the high level of desperation of those who propound such a position. That these efforts have had the winning hand for 125 years sadly shows our level of constitutional ignorance.
50. Ibid., Page 447.
Chapter 3. Promise Money and the Courts
All these legal gyrations are but evidence of the futility of crafty magicians who use sleight of hand while distracting their audience as they practice make-believe powers in attempt to shock and awe their audience. The next remarks are also revealing (italics and underscore added):
"The power to make the notes of the government a legal tender in payment of private debts being one of the powers belonging to sovereignty in other civilized nations, and not expressly withheld from Congress by the Constitution ; "we are irresistibly impelled to the conclusion that the impressing upon the treasury notes of the United States the quality of being a legal tender in payment of private debts is an appropriate means, conducive and plainly adapted to the execution of the undoubted powers of Congress, consistent with the letter and spirit of the Constitution, and therefore, within the meaning of that instrument, 'necessary and proper for carrying into execution the powers vested by this Constitution in the government of the United States.' "Such being our conclusion in matter of law, the question whether at any particular time, in war or in peace, the exigency is such, by reason of unusual and pressing demands on the resources of the government, or of the inadequacy of the supply of gold and silver coin to furnish the currency needed for the uses of the government and of the people, that it is, as a matter of fact, wise and expedient to resort to this means, is a political question, to be determined by Congress when the question of exigency arises, and not a judicial question, to be afterwards passed upon by the courts."51
The repeated pointing of the Juilliard court to government sovereignty as the source of power for our Congress simply admits too much.52 This is especially true in the passage where the court expresses concern for the "distribution of powers" of the "governments of Europe under their respective constitutions."
51. Ibid., Page 450. 52. Justices Strong and Bradley also repeatedly referenced 'sovereignty'. See; the Legal Tender Cases, 79 U.S. 457 @ Pages 529, 533, 545, 555, 559, 561, 563, and 564.
Section 13. Juilliard v. Greenman, 110 U.S. 421 (1884)
Must we seriously believe that the European constitutions (which admittedly and properly act to distribute power to those various and respective European nations) influence our form of government but our own Constitution does not? The Juilliard court's comments make absolutely no sense if one only thinks of our normal American government model for our whole Union, where the powers of government are determined and detailed by our own Constitution. Since the Juilliard court's comments make no sense if one thinks of our normal constitutional government model of delegated government powers, this must obviously be the wrong government model used to support legal tender paper currencies! Since we now know the Constitution actually authorizes two very different forms of government — our Republican Form of Government guaranteed every State of this Union under Article IV, Section 4 of the Constitution and a virtual federal tyranny under Article I, Section 8, Clause 17 — we need to ask if the court's comments make sense in light of the latter government model. Viewed only in light of the government model for the district constituting the seat of the government of the United States, the Juilliard court's comments actually make perfect sense. It is not by mere coincidence that the Juilliard court expressly and literally ruled that the legal tender treasury notes are necessary and proper means for carrying out the powers vested by the Constitution in "the government of the United States," and not in the Congress of the United States. One must realize that in the normal constitutional government model for our Republican Form of Government, the whole of the Constitution but one clause provides many express parameters for allowable government action. Thus those powers are well-defined by a written Constitution which may be studied and thereafter referenced.
Chapter 3. Promise Money and the Courts
Likewise with the State governments under this same government model, one may look to the U.S. Constitution and the various individual State Constitutions to study the allowable powers of each State. The question of what is allowable government action within the exclusive legislative jurisdiction for the district constituting the seat of government of the United States is, however, a wholly different equation. What, for instance, are the allowable parameters allowed there? Where does one go to study them? While one can find any number of express powers prohibited Congress within the Constitution even for this area, one still can't find out what powers are there actually authorized.53 Answers to these questions are anything but simple, or well-defined.
53. Examples showing prohibitions are common — the First Amendment to our Constitution reads: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or the right of the people peacefully to assemble, and to petition the Government for a redress of grievances." Due to Congress being expressly prohibited these powers, this prohibition would extend even into the district constituted as the seat of government of the United States (there are no words in the First Amendment which would otherwise limit these express prohibitions from applying to Congress in every situation ). By such example, one understands the principle of Congress being able to operate within the district in all cases except where prohibited. To better understand the power of Congress for the district seat, just think of this power as an 'alternate universe' where everything is contrary to our existing rational universe and one will have a pretty good understanding of this alternate irrational government, and will therefore have a better-understanding where any individual power practiced by Congress will inevitably fall.
Section 13. Juilliard v. Greenman, 110 U.S. 421 (1884)
One may look far and wide, but that power for the district constituted as the seat of government of the United States is nowhere defined, other than Article I, Section 8, Clause 17 of the U.S. Constitution. That power is of course shaped by hundreds of thousands of legislative enactments, regulations, and codes, as well as probably tens of thousands of court cases, but nowhere is there a formative outline for its allowed powers in any type of constitution (beyond Article I, Section 8, Clause 17). Therefore it is here pertinent and helpful to know what powers sovereign, western-style governments exercised at the time the Constitution was ratified and the district seat was created, for this knowledge does help determine from which powers Congress may choose to exercise. Recall Alexander Hamilton's words regarding establishing the first banks of the United States, that (underscore added):
"Here then is express power to exercise exclusive legislation in all cases whatsoever over certain places, that is, to do in respect to those places all that any government whatsoever may do; For language does not afford a more complete designation of sovereign power than in those comprehensive terms."54
Congress may "do in respect to those places all that any government whatsoever may do," Hamilton argues, because "language does not afford a more complete designation of sovereign power than in those comprehensive terms." Looking to the sovereignty of the United States — considering ratification of the U.S. Constitution — is only appropriate in the district which constitutes the seat of the government of the United States. No form of government the world over has ever existed with such raw, undefined power, of a single authorizing statute which simply authorizes the government to act "in all Cases whatsoever" along with only a relative handful of express prohibitions.
54. George Washington Papers at the Library of Congress, Series 2, Letterbook 32, Page 137: http://memory.loc.gov/ammem/gwhtml/gwseries2.html.
Chapter 3. Promise Money and the Courts
Thus, the United States have the MOST- and LEAST-restricted forms of government on the planet — sadly, we have by default chosen to operate under the latter almost exclusively for the last 150 years. No wonder these United States have drifted so far from the spirit of the Constitution! The Juilliard court upheld the power of Congress to emit a legal tender paper currency by holding that Congress emitted these notes within their exclusive legislative jurisdiction for the district constituting the seat of the government of the United States. This is the only form of American government where Congress may act in all cases not otherwise prohibited. Therefore, the "exercise of this power" for the district constituted as the seat of the government of the United States "not being prohibited to Congress by the Constitution", Congress may here in this exclusive legislative jurisdiction emit these paper currencies and here designate them a legal tender. One must realize that the Juilliard court not only claims that the power "to borrow 'money'" authorizes the creation of something new, but that the power "To borrow Money on the credit of the United States" in effect authorizes Congress to regulate the value of the money it borrows. Because Congress is expressly empowered with the power "To coin Money, regulate the Value thereof, and of foreign Coin," Congress may of course coin our money and also regulate its value. Congress may also regulate the American value of foreign coins of silver and gold they make current as money, by express authority. But nowhere are Congress expressly empowered to regulate the value of money they borrow. Therefore Congress may only borrow money and issue bills of credit and regulate the value of those bills for the district constituted as the seat of government of the United States where they may act in all cases except where they are prohibited (and since the Constitution nowhere expressly prohibits Congress from emitting bills of credit or making them a tender, they may therefore do so for that district). Section 13. Juilliard v. Greenman, 110 U.S. 421 (1884) 79
Section 14. Necessary and Proper-vs.-All Means Not Prohibited
Several extremely important matters must yet be discussed before moving past the courts. As covered earlier, Justice Bradley wrote (italics added):
"Yet Congress has…chartered two United States banks,
whose constitutionality has been sustained by this court."55
Although Justice Bradley did not there expressly name that case which sustained the constitutionality of the bank(s),56 Justice Strong did, stating:
"Under the same power and other powers over the revenue and the currency of the county…a corporation known as the United States Bank was created…Its incorporation was a constitutional exercise of congressional power for no other reason than that it was deemed to be a convenient instrument or means of accomplishing one or more of the ends for which the government was established…Yet this court, in McCulloch v. Maryland, unanimously ruled that in authorizing the bank, Congress had not transcended its powers."58
Justices Bradley and Strong in the Legal Tender Cases thus both repeatedly reference McCulloch v. Maryland, among the top few of the most important cases found in all of American legal history. 59, 60
55. The Legal Tender Cases, 79 U.S. 457 @ 559 (1870) (concur. op.). 56. Although Justice Bradley later writes in his concurring opinion: "A parade of authorities would serve but little purpose after Chief Justice Marshall's profound discussion of the power of Congress in the great case of McCulloch v. The State of Maryland." 57 57. The Legal Tender Cases, 79 U.S. 457 @ 568. (1870). 58. Ibid., Page 537. The "same power" references the power to regulate commerce, while "and other powers" points to Art. I:8:17. 59. The Legal Tender Cases, 79 U.S. 457 @ Pages 532, 537, 538, 539, 542 & 568. 60. Justice Gray writing in the Juilliard case also repeatedly quotes McCulloch v. Maryland. See; Juilliard v. Greenman, 110 US 421@ 438, 441, 442, 445 & 450. (1884).
Chapter 3. Promise Money and the Courts
Justice Bradley acknowledges the legal profession's reverential view toward Chief Justice John Marshall's "profound discussion" in the "great case" of McCulloch v. Maryland.56
McCulloch v The State of Maryland (17 U.S. 316 [1819]) is perhaps surpassed in importance only by Marbury v. Madison wherein Chief
Justice John Marshall there asserted the court's role of interpreting the Constitution, writing: "It is emphatically the province and duty of the judicial department to say what the law is. Those who apply the rule to particular cases, must of necessity expound and interpret that rule. If two laws conflict with each other, the courts must decide on the operation of each." 61, 62, 63, 64 61. Marbury v. Madison, 5 U.S. 132 @ 177 (1803). It should also be noted that Marbury v. Madison discussed the commission of William Marbury as a justice of the peace…for the District of Columbia (Washington county). It is not by mere coincidence that so many important precedentsetting cases dealt with the District of Columbia!65 62. All who swear an oath to support the Constitution face the same solemn responsibility to support the Constitution against every transgression, whether that transgression be found in the legislative, executive or even judicial departments, even if every other officer or legislative member broke their own oath! 63. When "two laws conflict with each other, the courts must decide" properly explains the fundamental basis of 'judicial activism' — the improper watering-down of legislative representation, the fundamental building-block of our Republican Form of Government.64 64. The proper way to curb judicial activism is to enact every law by its supreme yardstick — the whole Constitution — for proper consistency. 65. See also; Cohens v. Virginia, 19 U.S. 264 (also mentioned in the Legal Tender Cases @ 533), which discussed lotteries in D.C.
Section 14. Necessary and Proper-vs.-All Means Not Prohibited
It was the McCulloch v. Maryland case where Chief Justice John Marshall wrote:
"Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional."66
As Justice Strong's opinion clearly stated,67 McCulloch v. Maryland dealt with the constitutionality of the (second) bank of the United States. But as Alexander Hamilton clearly acknowledged in his formal opinion written in response to the President's command (in conformance with the President's requirement under authority of Article II, Section 2, Clause 1 of the Constitution), the legal authority for incorporating the (first) bank of the United States was ultimately founded only on Article I, Section 8, Clause 17 of the U.S. Constitution. It is here where there "is express power to exercise exclusive legislation in all cases whatsoever," where there is power "to do…all that any government whatsoever may do," since "language does not afford a more complete designation of sovereign power than in those comprehensive terms" that members of Congress may incorporate a bank. Since McCulloch v. Maryland dealt with incorporating the bank of the United States, and because the power of incorporation is nowhere expressly delegated within the Constitution, nor is that power both necessary and proper to any other expressly-delegated power, Chief Justice John Marshall's most famous of words in this case only apply to the power of Congress within the District of Columbia, under Article I, Section 8,
Clause 17!
66. McCulloch v. Maryland, 17 U.S. 316 @ 421 (1819). 67. with the words "Yet this court, in McCulloch v. Maryland, unanimously ruled that in authorizing the bank, Congress had not transcended its powers." The Legal Tender Cases, 79 U.S. 457 @ 559 (1870).
Chapter 3. Promise Money and the Courts
It is no wonder that the Chief Justice's most-famous quote from McCulloch so closely resembles the very words of Hamilton in his opinion on the constitutionality of the bank, where Hamilton in 1791 wrote:
"If the end be clearly comprehended within any of the specified powers, and if the measure have an obvious relation to that end, and is not forbidden by any particular provision of the Constitution, it may safely be deemed to come within the compass of the national authority."68
These famous principles elucidated by Hamilton and popularized by Marshall are therefore necessarily limited and apply only to the scope of Article I, Section 8, Clause 17 of the U.S. Constitution for the exclusive legislative jurisdiction areas of Congress! In other words, following Hamilton and Marshall's principles, government may use any and all means within the plain scope of its ends which are not expressly prohibited by the Constitution only for the district constituted as the seat of government of the United States (and forts, etc.)! Therefore government may not use any and all means within the scope of its ends which simply are not expressly prohibited by the Constitution beyond the district constituted as the seat of government of the United States, but must only use those means both necessary and proper (see Article I, Section 8, Clause 18 of the U.S. Constitution)! This all-encompassing rule of being able to act except where prohibited, first elaborated by Hamilton and then wide-promoted by Marshall, is wholly inappropriate for a government of delegated powers in every other case beyond the seat of government (and like areas ceded by States for forts, etc.). The rules of government under the district constituted as the seat of government of the United States are wholly different that those which may be lawfully used for the whole country.
68. George Washington Papers at the Library of Congress, Series 2, Letterbook 32, Pages 130 – 131. http://memory.loc.gov/ammem/gwhtml/gwseries2.html
Section 14. Necessary and Proper-vs.-All Means Not Prohibited
The two forms of government authorized by the Constitution cannot be intermixed both ways. While the delegated powers may be exercised in the government seat, the remainder of powers for the government seat cannot be exercised throughout the whole Union — the whole of the remainder of the Constitution forbids it!
Section 15. Exigencies of Government
Before ending the discussion of court cases, comments in both the Legal Tender Cases and the Juilliard regarding the appropriateness of Congress issuing legal tender paper currencies in the district constituted as the seat of government of the United States even in the first place must be examined. Both the opinion and concurring opinion in the Legal Tender Cases use the terms 'emergency', 'exigency', 'contingency' or 'necessity' (or their plural forms) no less than 31 different times on 19 different pages.69 In other words, even in the district constituted as the seat of government of the United States, it was only considered proper to emit legal tender bills of credit only in extraordinary situations! By time of the 1884 Juilliard opinion, some of the legal tender United States notes which had been issued in 1862 and 1863 had been paid off in gold coin but were now being reissued under an act of May 31, 1878.70 The Juilliard court was thus called to answer if legal tender notes which had been issued in times of pressing urgency and afterwards paid off, if those notes reissued now "in time of peace" could yet be declared a legal tender.71
69. The Legal Tender Cases, 79 U.S. 457 @ 529, 534, 536, 537, 538, 540, 541, 542, 546, 556, 558, 560, 561, 562, 563, 564, 565, 567 & 568. (1870). 70. 1878, May 31; Chapter 146. (20 Stat. 87).
See also: Monetary Laws, Volume II, Appendix J, Page 540, 2012.
www.PatriotCorps.org. 71. Juilliard v. Greenman, 110 US 421@ 437 - 438, (1884)
Chapter 3. Promise Money and the Courts
The court answered:
"Upon full consideration of the case, the court is unanimously of opinion that it cannot be distinguished in principle form the cases heretofore determined."72
Winding down the ruling, the court stated:
"Such being our conclusion in matter of law, the question whether at any particular time, in war or in peace, the exigency is such, by reason of unusual and pressing demands on the resources of the government, or of the inadequacy of the supply of gold and silver coin to furnish the currency needed for the uses of the government and of the people, that it is, as matter of fact, wise and expedient to resort to this means, is a political question, to be determined by Congress when the question of exigency arises, and not a judicial question, to be afterwards passed upon by the courts." 73
Whereas the Legal Tender Cases upheld legal tender paper currencies under the express power of Congress to exercise exclusive legislation in all cases whatsoever for the district constituted as the seat of government of the United States as but under an extraordinary emergency situation (war), the Juilliard court held that the existence of any exigency is always at the discretion of Congress not within the court's purview. In other words, the true nature of any exigency didn't matter legally— if the unusual demand placed on government was war, economic calamity, a 'shortage' of gold and silver coin, or whatever the proffered excuse, it was always within the discretion of Congress to determine the appropriateness of issuing legal tender bills of credit for the district constituting the seat of government of the United States. But in stating that the exact nature of the extraordinary circumstance didn't matter legally, the Juilliard court nevertheless clearly inferred some exigency was still yet necessary, no matter how seemingly trivial.
72. Ibid., Page 438. (which cases included the Legal Tender Cases). 73. Ibid., Page 450.
Section 15. Exigencies of Government
Justice Bradley had gone even further in his concurring opinion in the Legal Tender Cases, writing:
"It follows as another corollary from the views which I have expressed that the power to make treasury notes a legal tender…is nevertheless a power not to be resorted to except upon extraordinary and pressing occasions, such as war or other public exigencies of great gravity and importance; and should be no longer exerted than all the circumstances of the case demand."74
In other words, the courts upheld the limited use of such a wideranging power in a particularly-limited geographical area for only as long as circumstances necessitated. Remember, the Legal Tender Cases had stated (italics added):
"What we do assert is, that Congress has power to enact that the government's promises to pay money shall be, for the time being, equivalent in value to the representative value determined by the coinage acts, or to multiples thereof."75
Such restrictions "for the time being" however hardly equates to upholding this power in the absence of any exigency, for use in all times of normalcy, forevermore.
Section 16. Promise Money
But an even more important concern regarding the courts' holdings should become readily evident upon a careful consideration of the various terms the courts used to discuss the bills of credit. As herein covered repeatedly, the Hepburn court called paper dollars "mere promises to pay dollars;" the Legal Tender Cases called them "the government's promises to pay money" and "promise[s]…to pay dollars… not…to make dollars;" while the Bronson court stated that the "note dollar" was a "promise to pay a coined dollar.76
74. The Legal Tender Cases, 79 U.S. 457 @ 567 (1870). 75. The Legal Tender Cases, 79 U.S. 457 @ 553 (1870). 76. Hepburn v. Griswold, 75 U.S. 603 @ 625 (1870); Legal Tender Cases, 79 U.S. 457 @ 553 & 560 (1870); Bronson v. Rodes, 74 U.S. 229 @ 251. (1869), respectively.
Chapter 3. Promise Money and the Courts
All this 'promise money' at some point promised to pay the bearer 'dollars', 'money', and 'coined dollars' — dollars of gold or silver coin. But in 1933 and 1934, gold coin was effectively confiscated from the American public and withdrawn from circulation, thereafter melted into bars & locked up in impenetrable vaults (while silver was removed in 1965). At their most basic level, the Legal Tender Cases and Juilliard courts only upheld the power of Congress to emit legal tender bills of credit only in extraordinary circumstances only for the district constituting the seat of government of the United States, only given that they were actual, solemn government 'promises to pay money', government 'promises to pay dollars', government 'promise[s] to pay… coined dollar[s]'. But what happens to that underlying judicial support when the government breaks its promise to 'pay money', to ever someday pay 'a coined dollar' ? The answer must be that the past court support wholly evaporates. The Legal Tender Cases and Juilliard courts upheld the validity of the legal tender United States notes and Treasury notes in an exigency in the seat of government only because the government solemnly promised to pay money, because the government would someday ultimately redeem those certificates of indebtedness for coined dollars of silver or gold. The effect of those legal tender rulings was that the courts allowed an individual debtor to substitute his or her own contractual promise to pay money to the creditor with the government's promise 'to pay money'. If a creditor was willing to give terms to a debtor calling for future payment, it wasn't considered too unjust in pressing emergencies in the government seat to have the creditor instead receive the government's 'promise to pay money' as their form of payment (the government promised to repay in gold or silver coin, after all). Besides, in pressing exigencies, any particular creditor should find the government's 'promises to pay money' more reliable and marketable than the individual promissory note of the individual debtor which the creditor had earlier willingly placed under contract (rather than demand full and immediate payment). Section 16. Promise Money 87
But the central, pivotal support for these precedent-setting court cases which upheld legal tender paper currencies was that these paper dollars always promised to pay real money, real coined dollars of silver or gold at some future point. That the government still actually paid off their promises with coined dollars, after all, was directly acknowledged in the "single question" which the 1884 court sought to specifically answer.77 Any paper currency which no longer promises to pay either gold or silver coin has broken that explicit promise upon which the courts' opinions entirely rested, even in the government seat and even issued under times of pressing emergency. But 'our' present Federal reserve note paper currencies today simply declare that "This Note is Legal Tender for All Debts, Public and Private" without ever promising eventual payment in anything else. These notes only overtly acknowledge that the U.S. government has borrowed ('money'?). 'Our' Federal reserve notes which no longer promise any future repayment in gold or silver coin can therefore find no direct support from the precedent-setting Legal Tender Cases of Knox v. Lee and Parker v. Davis, nor even the important case of Juilliard v. Greenman. Justice Bradley's concurring opinion even went further to say (italics in original):
"No one supposed that these government certificates are never to be paid — that the day of specie payments is never to return…Through whatever changes they may pass, their ultimate destiny is to be paid."79
77. The single question the court sought to answer was (italics added): "whether notes…issued in time of war…and afterwards in time of peace redeemed and paid in gold coin…and then reissued…can under the Constitution…be a legal tender in payment of such debts."78 78. Juilliard v. Greenman, 110 US 421@ 437 - 438. (1884)
79. The Legal Tender Cases, 79 U.S. 457 @ 561-562. (1870).
Chapter 3. Promise Money and the Courts
The value which the original legal tender paper notes once held therefore stemmed not from the inherent value of a government stamp or paper and ink, but really only from that government promise to actually at some point 'pay money', 'pay dollars' or pay 'coined dollars'. It was the promise (as well as the integrity and the financial strength) of the issuer to actually and someday pay coined dollars which gave the notes their actual credibility, their residual value, their ultimate worth. But if there is no longer any actual direct promise to ever pay coined dollars, these notes can no longer have value based upon any actual promise to pay real value — thus one is now only left with a piece of paper with some ink and government stamp (of 'approval' [for what?]). Since 'paying off ' promise dollars with irredeemable note dollars is fundamentally different than paying them off in gold coin, it is important to also look into the gold 'confiscation' tactics of F.D.R. and his congressional cohorts, which is the topic of the next chapter. But it is important to also realize that if there are no actual specie dollars any longer in circulation, then our remaining 'money' is all based only on promises to pay more 'promises to pay' (no longer to pay real coined money); in other words, our 'money' today rests only on debt.80 Today when 'promises' are made, our debts increase; (which is another way of saying when additional debts are incurred, our money supply may increase). When promises are paid (with 'promise dollars'), the promise is fulfilled, so the promise/debt is cancelled; thus when debts are paid, our money supply decreases. When all money is debt-based, then without debts, there is no money!
80. It should be pointed out that without circulating coins of silver and gold, the only type of money which today is not based in debt is our base-metal coinage. Unfortunately, these coins have such small value that they are incapable of paying off much debt, and thus we Americans fall further behind debt every year.
Section 16. Promise Money
We Americans now have the perfect system in place for perpetual debts which either grow continuously because of compound interest or we may pay off debts so we can directly cause monetary contraction to short-circuit the economy (we lose either way ). To better-understand the principles involved as they now stand, it is appropriate to simplify things immensely and examine a very small and simple paper-currency economy which is just starting out from scratch, where there are no gold or silver dollars in circulation. In year one, to provide the necessary medium of exchange, $100 of paper currency is loaned into circulation at four percent simple interest, which interest is due at the end of the year when those notes also become due and payable (when they expire [as loans always have a due date]). Without gold or silver coins in circulation, however, the only way then to pay off that $104 due at the end of year one is that if at least 104 new paper dollars are borrowed and thereby emitted into circulation (to pay off the old expiring principal of $100 and the $4 in interest). At the end of the second year, the amount owed climbs to $108.16 (to pay now $104 of principle and the $4.16 in interest); at least $108.16 must then be lent into circulation for the third year. Although interest rolled-over into new principal climbs slowly at first, it continues to escalate as compound interest works its mathematical magic year-after-year, as current interest is accumulated on top of old interest. It becomes more difficult for Americans to stay ahead of the game, as greater percentages of income are paid as interest, which never subsides. The fourth year, at least $112.49 must be borrowed by the members of this society to pay back the $108.16 of principal and the $4.33 in interest. But, without gold and silver coin in circulation, just how is this debt ever going to be paid down, let alone off (without money evaporating)? But let's say for the fifth year, that only $110 of new loans were subscribed or borrowed by all the members of society; that no one individually or combined were willing to borrow that additional $6.99 ($2.49 of principal and $4.50 of interest) that was due the fourth year end. 90 Chapter 3. Promise Money and the Courts
In that case, the unpaid creditor at the end of the fourth year has a few options; act as if the note is still good and extend it by rolling it over (even if it is unlikely to be paid) or acknowledge the debt as bad and write it off while foreclosing on the pledged assets. In the first case, the debtor has an additional opportunity to make good on his obligations, although he is by no means assured of doing so, especially with the added burden of additional interest. The creditor is yet willing to give him that chance, although the next year the creditor may not be so willing and the debtor may be less able to pay his extra debt. In the second case, the monetary contraction from $112.49 which last circulated (which should have been $116.99) down to $110 will create further economic uncertainty as there is suddenly less money in active circulation and thus prices fall and businesses find lowered demand for their goods and services. Undoubtedly after that fifth year, either some of the creditors or debtors (or both) won't be as likely to lend or borrow for the sixth year. Thus, further economic contractions are likely anytime the supply of money contracts, unless government intervenes in the economy. One sees that with the sole circulation of debt-based money, that future economic 'stability' rests on the unstable practice of constantly-increasing the money supply (and therefore debt) to always at least cover principal and interest. Absent continued debt growth, assets occasionally transfer to lenders and/or the government grows in size and scope as it attempts to 'balance' an increasingly-complicated economy. The choice for debtors is to become increasingly indebted, watch creditors assume control of pledged assets, or watch the government gain greater control over the whole economy until it also fails [until all the wealth is then inevitably transferred to the creditors as exponential growth of compound interest becomes impossible to keep up with]).
Section 16. Promise Money
It is utterly foolish to circulate only a debt-based form of money which bears interest while it is active, but upon repayment its monetary value is extinguished, shrinking the supply of money. Perhaps that is why the courts all repeatedly stated paper currencies were only appropriate (in the government seat) only in pressing emergencies. While it is true that America's productive capacity typically increases year-after-year (and thus offsets some the growing monetary and debt base), it is also true that while man has proven extraordinarily productive, he has yet proven to be exponentially productive (and thus able to keep up with exponentially-compounding interest).
Chapter 3. Promise Money and the Courts
Chapter 4. Gold 'Confiscation'
Section 1. F.D.R.
Although there is no current restriction against private gold ownership as there appeared between 1933 and 1974, the recommendations listed in Chapter 6 involve gold. Since any discussion regarding gold would inevitably bring up the subject of gold 'confiscation', it is important to briefly cover this topic.1 As harmful as were the legal tender court cases for upholding the legal tender nature of paper currency, people could bypass much of the court's damage simply by inserting gold clauses into their contracts, specifying the type of money required for future repayment.2 Proponents who pushed for government to be all things at all times couldn't be as successful as long as silver and especially gold remained legal tender alongside paper currency, for the precious metals still did their proper job serving as the proper Standard of Value, of safeguarding value and keep debt manageable. Which leads to the 1933 gold 'confiscation' tactics of President Franklin D. Roosevelt and his congressional cohorts, as they sought to remove the barrier which had long prevented government from being all that it could be, from doing all it wanted to do (but which it couldn't afford as long as gold protected monetary value).
1. Readers especially interested in this topic are encouraged to read Chapter 12 of Monetary Laws, Volume I, Pages 258 – 318, at www.PatriotCorps.org. 2. If a contract didn't specify the type of money needed for repayment, then the debtor could repay in any legal tender of his choice and the creditor could not refuse. However, if a lender (in the example of a bank) would not lend money unless the borrower agreed to repay in gold, then the borrower would have to agree or do without the loan. Once the borrower voluntarily agreed to repay in gold, then the courts enforced that mutually-agreed-upon contract which violated no law.
Section 1. F.D.R.
Gold confiscation tactics implemented in the depths of the Great Depression redefined words to again make Americans "the dupes of sounds;" amounting to a type of 'government by deception through redefinition'. But the government's tactics in this case weren't here wholly tied to the exclusive legislative jurisdiction of the United States for the District of Columbia, since even residents at the seat of government cannot be deprived of their property without due process and just compensation (and receiving paper for gold in any forced case is certainly neither).3, 4 Gold prohibition obviously needed an added punch. When banking customers in 1933 realized that too many banks overleveraged themselves in attempt to make profits unobtainable at standard risk, many of these customers ran to their banks not only to withdraw their bank deposits, but also to redeem the paper dollars they held in their hands for the gold which could be redeemed for them. The banks had three separate problems. The first were their customers' "demand deposits;" defined in Section 19 of the 1913 Federal Reserve Act as "all deposits payable within thirty days" (i.e., checking accounts).5 The second problem for the banks was their customers' "time deposits," which were defined as "all deposits after thirty days" and "all savings accounts and certificates of deposit which are subject not less than thirty days' notice before payment."6
3. Although the executive order necessarily involved Federal Reserve Banks, which are authorized only by Article I, Section 8, Clause 17. 4. See the Fifth Amendment which prohibits any person from being deprived of life, liberty, or property without due process, or private property from being taken for public use without just compensation (being expressly listed, such prohibitions therefore also directly apply to Congress for the government seat). 5. 1913, December 23; Chapter 6, Section 19. (38 Stat. 251 @ 270).
See also: Monetary Laws, Volume II, Appendix J, Page 573. 2012.
www.PatriotCorps.org. 6. Ibid.
Chapter 4. Gold 'Confiscation'
Banks could forestall repayment of these deposits to their customers for the stated lengths of time, providing sufficient delay to give banks time to begin calling in bank loans to generate liquid funds, even if the loans were current.7 But the pressing problem for banks which could not be easily delayed stemmed from the Federal reserve notes issued on their behalf, those notes which could be individually "redeemed in gold on demand," but which bank only had liquid reserves typically allocated at only 40% of face value.8 Having individually-redeemable Federal reserve notes being backed only at 40% of total face value meant that any time a majority of people requested gold for their paper dollars, large numbers of them would inevitably come up short. Thus the original gold-redeemable Federal reserve notes took their cue from the game of musical chairs; the object of the game to be learned by players was that he who last waits for the music to stop before finding a seat will be left out in the cold.9 To protect the over-leveraged banks and the financial community at large but without one grain of concern for the whole people, property or every principle of truth, honesty, fairness or justice, Democratic President Franklin D. Roosevelt issued executive order number 6102 on April 5, 1933, a month after taking office, which required "all persons" to deliver their gold (coin, bullion, and certificates) to a Federal Reserve Bank, branch or agency, or member bank of the Federal Reserve System.10
7. See; the fine print in any bank loan contract, allowing banks to call loans or seize collateral in given conditions (even if loan payments are fully current) described in wording sufficiently-general to give banks ample leeway and discretion. 8. 1913, December 23; Chapter 6, Section 16. (38 Stat. 251 @ 265 and 266).
See also: Monetary Laws, Volume II, Appendix J, Page 569. 2012.
www.PatriotCorps.org. 9. This short-sighted problem of partial-reserves of notes is 'solved' today, of course, by making none of the current Federal reserve notes redeemable or backed by anything.
Section 1. F.D.R.
Section 2. Executive Order No. 6102
"Person" was specifically defined within executive order 6102 to mean "any individual, partnership, association, or corporation."11 But the important clue for realizing that "person" could not mean every "individual, partnership, association, or corporation," was realizing that the Federal Reserve Banks, branch or agency, and member banks of the Federal Reserve System were interestingly enough designated as the private businesses where the gold was specified to be taken (to exchange for currency which would not ever be redeemed in gold). This was important because nowhere in the executive order were there any exemptions anywhere listed for any "person" or any "individual, partnership, association, or corporation." If there was therefore one "person, individual, partnership, association, or corporation" who wasn't a "person, individual, partnership, association, or corporation" who had to turn in gold somewhere else, then couldn't there be more? It wasn't, after all, as if every "person, individual, partnership, association, or corporation" had to take their gold to some government office, such as the Department of the Treasury. Thus, since some "persons, individuals, partnerships, associations, or corporations" were required to turn in their gold to other private businesses — ostensibly to other "persons, individuals, partnerships, associations or corporations" — it was of utmost importance to learn who was this first type and who was the second! If some persons weren't required to turn in their gold, but were instead designated as the persons to whom the gold would be initially turned in, then it stood to reason that there may be other persons who were also not required to turn in their gold (to anyone).
10. See: Monetary Laws, Volume II, Appendix L, Page 634.
www.PatriotCorps.org. 11. Ibid. 2012.
Chapter 4. Gold 'Confiscation'
But the only "person" or "individual, partnership, association, or corporation" who could actually be "required" to surrender their gold could actually only extend to the banks and thereby their shareholders who had previously contractually-obligated themselves to send gold to the treasury to properly back their banking liabilities.12 Thus, executive order number 6102 and its supporting legislation amounted legally only to a margin call on these bank shareholders who earlier over-speculated on margin. Their broker (the government) was simply telling them they had to now send in more gold to shore up their government deposits to properly back the notes their customers were now seeking in record numbers to redeem in gold. This is no different from any private investment broker calling clients who speculated on margin who suffered a downturn on their positions, whereby the broker was now 'ordering' them to send in more money to cover their shortfall. In either case, those persons not covering their obligations would see their initial investment sold by the brokerage house to cover the investors' speculative losses (and in this case, close the banks). Although the banks normally had to maintain their gold reserves at the treasury only to 40% of the face value of the notes issued to or through them, the 1913 act actually gives discretion to the Secretary of the Treasury in his "judgment" to determine adequate gold reserves, up to full redemption value for all the notes issued to such bank, as the notes were all individually and fully redeemable in gold.
12. "The Federal Reserve Board shall require each Federal reserve bank to maintain on deposit in the Treasury of the United States, a sum of gold sufficient in the judgment of the Secretary of the Treasury for the redemption of the Federal reserve notes issued to such bank."13 13. 1913, December 23; Chapter 6, Section 16. (38 Stat. 251 @ 266).
See also: Monetary Laws, Volume II, Appendix J, Page 569. 2012.
Section 2. Executive Order No. 6102
Therefore bank shareholders originally agreed to send gold to the treasury at the Secretary's discretion, whenever he demanded it, to adequately back their note liabilities.14 Thus, this requirement that the banks (shareholders) had to "maintain on deposit" with the Treasury of the United States, "a sum of gold sufficient in the judgment of the Secretary of the Treasury" for the "redemption of the Federal reserve notes issued to such bank" served as the actual legal justification for the President's margin call. Of course, that is not how President Roosevelt's order was effectively enforced; instead it was inferred that it was the banks' customers and all others who were required to cough up their gold or be summarily and severely punished. Those people who incorrectly thought they were "persons" who were legally obligated to turn in their gold to avoid hefty fines (up to $10,000) and 10-year prison terms did not realize they were not actually "persons" or "individuals" for the express legal purposes of executive order number 6102! Rather than let the speculators who over-speculated on margin bear the full responsibility for their actions and directly suffer their losses (which would inevitably ricochet throughout the economy, of course), instead the largest banks shared in the biggest gold heist ever perpetrated, as they took a 59% cut of all the gold which was soon handed over to them.
14. Of course, shareholders were also fully liable for all the other liabilities of the bank, also to the full extent of the value of their bank stock.15 15. Shareholders were held "individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such bank to the extent of the amount of their subscriptions to such stock at the par value thereof in addition to the amount (of stock) subscribed" by Section 2 of the 1913 act. 1913, December 23; Chapter 6, Section 2. (38 Stat. 251 @ 252).
See also: Monetary Laws, Volume II, Appendix J, Page 557. 2012.
Chapter 4. Gold 'Confiscation'
Later, when the 'Gold Reserve Act of 1834' was enacted:
"all right, title, and interest, and every claim of the Federal Reserve Board, of every Federal Reserve bank, and of every Federal Reserve agent, in and to any and all gold coin and gold bullion shall pass to and are hereby vested in the United States."16
These banks were credited "in equivalent amounts of dollars" which were "payable in gold certificates" (those same certificates which 'all persons, individuals, partnerships, associations, and corporations' were supposedly 'prohibited' from owning!).17 In other words, while the government eventually got all the gold, they really only received the responsibility to safe-keep it. As the banks were paid for their collected gold coin and bullion in gold certificates, the biggest banks actually received the 'pink-slip' ownership/equity rights to the dollar value of all that delivered gold (including other gold certificates). The following day, on January 31, 1934, President Franklin D. Roosevelt issued Presidential Proclamation No. 2072, which declared the "weight of the gold dollar to be 15 5/21 grains nine tenths fine." 18 15 5/21 grains of gold "nine-tenths fine" equates with 13.7142 grains of fine gold in one dollar, or gold valued at $35.00 per troy ounce.19
16. 1934, January 30; Chapter 6, Section 2. (48 Stat. 337).
See also: Monetary Laws, Volume II, Appendix L, Page 665. 2012.
www.PatriotCorps.org. 17. Ibid. 18. See: Monetary Laws, Volume II, Appendix L, Page 672 @ 673. 2012. www.PatriotCorps.org. 19. $35.00 is derived by divided the number of grains in one troy ounce (480) by the number of grains of fine gold in one gold dollar (13.7142) (480/13.7142=35.00).
Section 2. Executive Order No. 6102
Since the Constitution "vests" or permanently fixes with Congress the delegated legislative powers (including the power to "regulate the Value" of the money they coin) members of Congress are absolutely barred from passing any vested legislative authority for the whole U. S. of A. to the President (or any executive or judicial officer); thus this gold dollar regulated in its value at 15 & 5/21 grains of gold nine-tenths-fine to the dollar ($35.00/troy ounce gold) is only another of the types of dollars for the district constituting the seat of government of the United States.20 The banks obtained the 'pink slip' title to the face value amount in dollars for all the gold they turned in (valued at $20.67/troy ounce), even as every other "person, individual, partnership, association, or corporation" were effectively denied effective ownership of gold certificates.21 The government then devalued those D.C.-based dollars from 25.8 grains of gold nine-tenths-fine to 15 & 5/21 grains of gold nine-tenthsfine, taking as its cut 10.61 grains of standard gold for every dollar (an equivalent of $14.33 for every troy ounce of pure gold) which had been turned in to the banks under threat of fine and imprisonment.22
20. To understand the fundamental differences between legislative members and government officers and the impenetrable wall of separation and absolute constitutional barriers between them, please see Issue No. 5 of The Beacon Spotlight, at www.PatriotCorps.org, entitled "Constitutional Separation of Powers and the Conflicting Practice of Members of Congress Taking an Oath of Office." 21. $20.67 is derived by divided the number of grains in one troy ounce (480) by the number of grains of fine gold then found in one gold dollar (which was, since 1837, 23.22 grains). (480/23.22=20.67). 22. The September 21, 1973 act (87 Stat. 352) amended the 'Par Value Modification Act' of March 31, 1972 (86 Stat. 116) and established a new gold rate per troy ounce of fine gold at "forty-two and twoninths dollars," or $42.22 per troy ounce of fine gold (where it yet remains on the books of government).23 23. See Monetary Laws, Volume II, Appendix L, Pages 683 and 682, respectively. 2012. www.PatriotCorps.org.
Chapter 4. Gold 'Confiscation'
The Federal Reserve Banks received gold certificates in the dollarequivalent face value of all the gold which was turned in to them. But with the devaluing of the gold dollar for the District of Columbia on January 31, 1934, those certificates valued in dollars now held claim to only 59% as much gold as the day before (but that was evidently the 'arrangement' worked out from the beginning [with the government's 'take' being 41%]). And today the government (which sanctioned and materially participated in the legalized theft of perhaps thousands of tons of gold from law-abiding Americans) has the unmitigated gall to send hundreds of thousands of petty criminals to jail for years and decades who combined, have not stolen anywhere near as much wealth (and who didn't typically make their victims help them [acting as if it was for their own good]). Instead, the greatest of all financial scoundrels bet the farm to earn great profits, but after their bet goes south due to extreme over-leverage, they win even bigger as government not only covers their losses, but uses its guns to steal the financial safe-haven of millions of innocent victims and set loose a perpetual debt-generation machine to provide for them ever-after. While the common man was effectively prohibited from owning gold for the next forty years, those biggest of bankers maintained the pink-slip ownership to 59% of the take, while the government assumed the duty to safe-keep all the physical gold, keeping 41% of the gold as their stake.24 Property cannot be taken from Americans but by due process and just compensation, but for our tragic misunderstanding of clever mechanisms used to deceive us. Gold and paper currencies are not equivalent with one another. Paper cannot be mandated as just payment for gold by those owners of gold not voluntarily choosing on their own accord to accept them.
24. In 1974, Congress enacted an act to 'allow' again private ownership of gold when the "private ownership of gold will not adversely affect the United States' international monetary position."25 25. 1974, August 14; Public Law 93-373 (88 Stat. 445).
See also: Monetary Laws, Volume II, Appendix L, Pages 685. 2012.
Section 2. Executive Order No. 6102
Section 3. Gold Clauses In a Joint Resolution of June 5, 1933, Congress nominally sought to abolish gold clauses within contracts, asserting that gold clauses:
"obstruct the power of the Congress to regulate the value of money of the United States, and are inconsistent with the declared policy of the Congress to maintain at all times the equal power of every dollar, coined or issued by the United States, in the markets and in the payment of debts."26
Therefore, Congress resolved that:
"every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency…is declared to be against public policy; and...Every obligation…shall be discharged upon payment, dollar for dollar, in any coin or currency which…is legal tender for public and private debts."27
If gold ownership was actually prohibited by the April 5, 1933 executive order, then no one would have much gold for payment on gold clauses (except as 'allowed' by executive order 6102), and no one receiving the gold could keep it (except as 'allowed'). Definitions, as we have seen, are critical to examine. Section 1 (b) of the resolution stated:
"the term 'obligation' means an obligation (including every obligation of and to the United States, excepting currency) payable in money of the United States; and the term 'coin or currency' means coin or currency of the United States, including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations."28
26. 1933, June 5 Resolution. (48 Stat. 112).
See also: Monetary Laws, Volume II, Appendix L, Pages 657. 2012.
www.PatriotCorps.org. 27. Ibid., Page 113. 28. Ibid. Isn't it nice to know that "the term 'obligation' means an obligation (including every obligation…)"?
Chapter 4. Gold 'Confiscation'
The United States are not empowered to prohibit the use of gold as money, under the whole Constitution, or otherwise. The Constitution supports property, and further expressly forbids the taking of it without due process and just compensation under the Fifth Amendment. 'Just compensation' means an adequate amount of money, of gold or silver dollars, are paid for the property taken for public use. Government cannot take anyone's private property, especially their gold (simply their most liquid form of property) without "just compensation;" but, now if government can trick people to 'willingly' hand over their gold for 'payment' in a 'nonredeemable currency', then that isn't exactly a 'taking', is it? But we know that this resolution necessarily has escape clauses to keep it from being legally binding, certainly on the whole country. 'Obligation' was defined for the purposes of the resolution to mean only that which was noted within parentheses "(including every obligation of and to the United States, excepting currency)." While the words 'include' or 'including' bring the words which next follow into the scope of the matter and do not necessarily exclude other items which should also be appropriately brought in, they still do not necessarily take in other things which may jump to one's mind which are not actually meant to be embraced (even if the reader mistakenly thinks they should be brought in). 'Include' is therefore a useful tool to remain appropriately general to keep from accurately disclosing the true and accurate answer, to leave out other things not actually incorporated while appearing as if maybe they are. 'Obligation' in this case means only "every obligation of and to the United States, excepting currency" and does not extend to private parties or other State or local governments. This resolution was the official notice that anyone wanting to do business with the government must accept payment in the currency of the United States, defined as "including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations." Section 3. Gold Clauses 103
Being now in the midst of the Great Depression, there were no shortages of willing takers to supply the government with its needs who would accept paper currency if any regular suppliers wouldn't. Government was able to effectively switch over to pay only in notes for its purchases because everyone was then extremely anxious for any form of money (because of improper activity of government in decades past). Since the only legal tenders for the whole country remain gold and silver coin at their proper value (and not the 15 & 5/21-grain gold dollar determined by the President), this resolution was not binding on the whole country. Private American citizens could and can still use gold clauses. Recapping the chain of related events, under the April 5, 1933 executive order number 6102, private citizens were supposedly prohibited from owning all but the smallest amounts of gold and for only a few other authorized reasons. Reading between the lines showed this executive order covered only member banks of the Federal Reserve System and indirectly their shareholders who could be 'required' to send in sufficient gold to the Treasury (to back their banking liabilities they willingly assumed for chance to profit). After all, it is not as if the President is empowered to despotically rule in these United States of America. Thus we know that his executive orders have no authority for the whole country except as expressly authorized by the Constitution, such as the power to grant reprieves and pardons for offences against the United States (except in cases of impeachment). We therefore know that there is something hidden which must be found. Thereafter the June 5, 1933 joint resolution of Congress supposedly prohibited gold clauses, but careful analysis of it showed only that no longer would the government pay out gold for covering its obligations (and no longer did anyone need to pay their bills owed to the government in gold).
Chapter 4. Gold 'Confiscation'
Section 4. Gold Reserve Act of 1934
Next was the Gold Reserve Act of 1934, enacted on January 30, 1934. Its Section 5 ominously stated that:
"No gold shall hereafter be coined, and no gold coin shall hereafter be paid out or delivered by the United States: Provided, however, That coinage may continue to be executed by the mints of the United States for foreign countries in accordance with the Act of January 29, 1874 (U.S.C., title 31, sec. 367). All gold coin of the United States shall be withdrawn from circulation, and, together with all other gold owned by the United States, shall be formed into bars of such weights and degrees of fineness as the Secretary of the Treasury may direct."29
Under this Gold Reserve Act of 1834, all gold coins were now supposedly ordered to be withdrawn from circulation and the mints were seemingly ordered to stop striking gold coin for domestic use. From experience, we know there must be some legal catch to properly understand this act. The 'key' needed to properly understand the Gold Reserve Act of 1934 'puzzle' was found inconspicuously within Section 15 of the act, where the term "United States" was explicitly defined to mean (only and literally) "the Government of the United States."30 In differentiation, the term "the continental United States" was therein defined to mean "the States of the United States, the District of Columbia, and the Territory of Alaska."31
29. 1934, January 30; Chapter 6, Section 5. (48 Stat. 337 @ 340).
See also: Monetary Laws, Volume II, Appendix L, Pages 667. 2012.
www.PatriotCorps.org. 30. 1934, January 30; Chapter 6, Section 15. (48 Stat. 337 @ 344).
See also: Monetary Laws, Volume II, Appendix L, Pages 671. 2012.
31. Ibid.
Section 4. Gold Reserve Act of 1934
Because "United States" was specifically defined within the act to mean — for purposes of this act — "the Government of the United States", anytime "United States" was used within the act, "the Government of the United States" must be always understood as the only true, and correct meaning. To actually mean the United States as we know the term — the Union of States, the States united together under the Constitution — the term "continental United States" had to be used (which term here also meant the District of Columbia and the Territory of Alaska). Therefore the proviso that "All gold coin of the United States shall be withdrawn from circulation," legally only meant that "All gold coin of the Government of the United States shall be withdrawn from circulation" (and melted into bars). Congress may perhaps decide to pull the government's own gold coin out of government's own storage and melt it (since they were confident they would be able to find willing suppliers who would accept the government's non-redeemable paper dollars), but this does not imply that the government may prohibit the circulation of gold between private parties. The Gold Reserve Act of 1934 was again but clever legal deception; gold was not legally prevented circulation in the United States of America. "Currency of the United States" was expressly defined also by Section 15 to mean "currency which is legal tender in the United States" (and since we know the meaning of the "United States" for purposes of this act, the phrase really means "currency which is legal tender in the Government of the United States," which was stated to include:
"United States notes, Treasury notes of 1890, gold certificates, silver certificates, Federal Reserve notes, and circulating notes of the Federal Reserve banks and national banking associations."32
32. Ibid.
Chapter 4. Gold 'Confiscation'
Thus, one finds that within the exclusive legislation jurisdiction for the Government of the United States, the following are its legal tender: United States notes, Treasury notes of 1890, gold certificates, silver certificates, Federal Reserve notes, and circulating notes of the Federal Reserve banks and national banking associations. The proviso "No gold shall hereafter be coined…by the United States," legally meant, of course, that "No gold shall hereafter be coined, by the Government of the United States" but this doesn't necessarily include coining by the United States of America (although it is tough to force Congress to carry out their duty to strike gold coin [which therefore pushes the supplying of gold coin toward private mints]33). Section 5 of the Gold Reserve Act of 1934 contained a specific proviso:
"That coinage may continue to be executed by the mints of the United States for foreign countries in accordance with the Act of January 29, 1874 (U.S.C., title 31, sec. 367)."34
Realize that the jurisdiction for the district constituted the seat of the 'government of the United States' is different from, and therefore otherwise foreign to, the jurisdiction for the whole United States of America. It would not be too much of a stretch to hold that the mint of 'the government of the United States' (the 'United States Mint') was different from the mint of the United States and that restrictions of the former do not extend to the same restrictions of the latter (even if the same buildings, people, and machinery are involved in both).
33. See; Chapter 6. 34. 1934, January 30; Chapter 6, Section 5. (48 Stat. 337 @ 340).
See also: Monetary Laws, Volume II, Appendix L, Pages 667. 2012.
www.PatriotCorps.org.35 35. See: 1874, January 29; Chapter 19. (18 Stat. 6).
See also: Monetary Laws, Volume II, Appendix I, Pages 435. 2012.
Section 4. Gold Reserve Act of 1934
Chapter 4. Gold 'Confiscation'
Chapter 5. Restoring Liberty and Justice Once and For All. Ever since Congress used their exclusive legislative power to act "in all Cases whatsoever" to impose the 1791 banking act at the government seat, government has expanded its reach, especially after a little help from the courts. Section 1. Cohens v. Virginia, 19 U.S. 264 (1821) Questions of the exclusive legislative authority of Congress for the district constituted as the seat of government of the United States reached the Supreme Court in the 1821 case of Cohens v. Virginia. Three important points in the ruling interest us, including:
1. The power to legislate for the district, like all other powers
conferred in Article I, Section 8 upon Congress, is "conferred on Congress as the legislature of the Union."1
In other words, members of Congress do not step down from their national capacity even when they enact laws that would otherwise be considered local legislation for the government seat. The impact of the court's ruling is that otherwise locally-effective laws enacted by Congress for the District of Columbia may actually be enforced nationwide throughout the United States; they are not strictly-limited to the geographical boundaries of the exclusive legislation areas. For example, if a crime is committed in the exclusive legislative area, enforcement needn't stop "at the district line;" federal officers may proceed throughout the States to carry out that law and catch 'the bad guy' (unlike State or local officers who must seek extradition of any criminal captured elsewhere). That, of course, does not mean that it would necessarily be a federal crime if that same activity occurred 'outside the gates', for such legislation must then conform to the whole Constitution for that to occur.
1. Cohens v. Virginia, 19 U.S. 264 @ 424 (1821).
Section 1. Cohens v. Virginia, 19 U.S. 264 (1821)
In other words, enforcement could not normally start if the banned activity occurred beyond the fence unless it conformed to the whole Constitution. Nevertheless, exclusive legislation laws may be enforced nationwide as long as the activity started inside that jurisdiction, even if the perpetrators have travelled to any of the several States afterwards. These laws are only locally-effective, even as they can now be nationally enforced; i.e., after the laws are locally broken. Given the original wording and structure of the Constitution, it is difficult to argue the Court ruled incorrectly. Clause 17, after all, is within Section 8 of Article I, just like most of the remainder of the express powers delegated to Congress for acting throughout the Union. It is therefore important to look further into the ruling… Another important point of the court's 1821 ruling is:
2. "Whether any particular law be designed to operate without the
District…depends on the words of that law."2
As the 1821 court ruling signifies, the difference between a law enacted for the seat of government or for the whole Union may ultimately simply depend "on the words of that law", with no other overt difference between
Whereas laws meant for the whole Union must conform to the whole Constitution, laws meant for the seat of government need only conform to Article I, Section 8, Clause 17 (meaning that laws may there be enacted "in all Cases whatsoever", except as otherwise prohibited). Seemingly extra-constitutional activities are not necessarily 'unconstitutional', per se, because they are not necessarily beyond the Constitution. Those activities are likely simply being enacted under the one particular clause capable of authorizing them.
2. Ibid., 429.
Chapter 5. Restoring Liberty and Justice Once and For All.
An 'unconstitutional law' is an oxymoron which cannot exist — if unconstitutional, it is not a 'law'. If a law is reasonably charged as 'unconstitutional', chances are high that it has simply been enacted under Article I, Section 8, Clause 17 and that it is legal (just that its actual jurisdictional scope is strictly limited). If a particular government action is beyond the authority of the other constitutional clauses (besides Article I, Section 8, Clause 17), then none of those other clauses have actually authorized the action in question (although fanciful court rulings typically imply that false illusion, as if words have no meaning).3 To keep the "words of that law" from being held unconstitutional, the courts will simply strictly-limit their meaning to avoid constitutional conflict (in these cases, to limit the acts to the district constituted as the seat of government of the United States and areas ceded by States for forts, magazines, arsenals, dock-yards and other needful buildings). The last of the 1821 court's statements of special significance provides us the clear direction we need to restore strict construction of the U.S. Constitution once and for all:
3. "Those who contend that acts of Congress, made in
pursuance of this power, do not, like acts made in pursuance of other powers, bind the nation, ought to show some safe and clear rule which supports their contention."4
Chief Justice John Marshall indirectly informs us with these words that if we cannot 'show' a 'safe and clear rule' which keeps these acts enacted for the government seat from 'binding the nation', that we must 'make' one! The single "magic button" needed to restore limited government under the whole Constitution is to finally now provide that "safe and clear rule" that would clearly make all laws enacted under Article I, Section 8, Clause 17 local laws only for exclusive legislation areas, incapable of being enforced nationwide.
3. See; the Legal Tender Cases, Juilliard, and McCulloch cases herein discussed in Chapter 3.
4. Cohens v. Virginia, 19 U.S. 264 @ 424 - 5 (1821).
Section 1. Cohens v. Virginia, 19 U.S. 264 (1821)
While Marshall caused a great deal of harm in other court opinions (such as by commenting on the power of Congress actually only for the government seat, but inferring his proffered rule was meant for the whole country), in this particular case he atones for part of his past transgressions by clearly identifying the simple and proper means for restoring strict construction of the whole Constitution once and for all. When the States sought to correct the Supreme Court's 'misinterpretation' of the Constitution regarding States being sued against their will by citizens of other States, they ratified the 11th Amendment in 1795 to clarify that matter 'once and for all'.5 Thus, to best overturn the Supreme Court's invalid 1821 Cohens v. Virginia ruling (invalid because it has tragically allowed Article I, Section 8, Clause 17 to be used as the ultimate tool for implementing American tyranny), the States should ratify a new 'Once and for All' Amendment.
5. The 11th Amendment proves false the assertion that the Constitution is whatever the majority of the Supreme Court declare. Of course, this is obvious from a Republican Form of Government where none of the office holders (including judges), nor even the legislative members, are empowered to change their own authority. Only the States are empowered to ratify amendments or attend conventions and thus only the States are empowered to change the Constitution and therefore they are the final word on the meaning of the Constitution.
Chapter 5. Restoring Liberty and Justice Once and For All.
Section 2. Once and For All Amendment
Although the precise wording of the 'Once and For All' Amendment would necessarily be left up to any convention should there be one, here nevertheless is a tentative proposal:6
"The exclusive legislation power of the Congress of the United States under the seventeenth Clause of the eighth Section of the first Article of the Constitution for the United States of America shall not be construed to be any part of the supreme Law of the Land within the meaning of second Clause of the sixth Article of the said Constitution. "Every law, resolution, rule, regulation, or order enacted, passed or otherwise hereinbefore or hereinafter acted upon under the seventeenth Clause of the eighth Section of the first Article of the said Constitution shall be strictly limited to its precise jurisdictional limits strictly applicable to exclusive legislation areas as must therein be hereafter designated." 7
A new amendment would simply clarify that no law enacted under Article I, Section 8, Clause 17 constitutes any part of the Supreme Law of the Land under Article VI, Clause 2.
6 Although this author long-feared an Article V Convention of States for proposing Amendments (out of concern of another 'runaway' convention [recall the 1787 convention was expressly called only to revise the Articles of Confederation]), if the information within this book became widely known, this author wouldn't necessarily fear it. After all, either separate ratifying conventions or the State legislatures must still ratify any proposed changes, during which time ample discussion on the decentralized internet could take place, giving voice to concerns never as easily or widely communicated by our ancestors. But hopefully this information widely known would prove a convention unnecessary, as members of Congress were left little choice but to conform to the whole Constitution (even without a new amendment [or propose it themselves, because their hand was forced]). 7. A section in the proposed Amendment on formal extradition for the government seat (similar to that for States in Art. IV:2:2) would likely prove necessary, but that is but a small matter to add in (laws truly national in scope would yet be executed throughout all the States).
Section 2. Once and For All Amendment
Should Congress, the courts, and/or the executive department yet somehow creatively discover a method to bypass this new amendment, then another should be ratified which repeals Article I, Section 8, Clause 17 in its entirety (with those lands being retroceded back to the States, similar to Virginia accepting back her portion of the District of Columbia [county and town of Alexandria] in 1846). Repeal, though extremely appealing in its own right (to forever remove the power of Congress to act beyond normal constitutional restraints in any case), should probably be merely a backup plan to avoid more drastic changes to the Constitution if matters can otherwise be helped.8 The great thing about teaching how government has expanded beyond the Constitution or working toward a constitutional amendment is that they are not mutually exclusive matters — working for one helps the other.
8. Article IV, Section 3, Clause 2 of the U.S. Constitution delegates to Congress the power "to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States." This power, which extends to public trust lands, allows Congress greater discretion for 'government property' than otherwise allowed by the remainder of the Constitution and may thus be used creatively, especially if Article I, Section 8, Clause 17 were properly circumscribed (and thus this power also must be carefully monitored). It is therefore appropriate to begin minimizing the improper extension of this law for other purposes, by disposing of the public trust lands as therein first expressly stated (finally making good to all those later public land States for entering the Union "on an equal footing with the original States, in all respects whatever," [as earlier States have no public lands carved out of their rightful jurisdiction] as worded in the Northwest Ordinance of July 13, 1787).9 9. Volume 32, Journals of the Continental Congress, Page 334 @ 342. The primary purpose for the original western lands — why the seven of the 13 original States having western lands ever ceded them over to the United States in the first place — was for later sale to properly pay down the public debt.10
Chapter 5. Restoring Liberty and Justice Once and For All.
Fully understanding the implications of Congress exercising exclusive legislation authority "in all Cases whatsoever" over the District constituting the Seat of Government of the United States is absolutely critical in our quest to regain limited government. Most everything done beyond strict construction of the Constitution especially since the 1860's has been deceptively done within the authority of but one clause of the Constitution, the clause which allows for government to act "in all Cases whatsoever," Article I, Section 8, Clause 17. The wonderful implication about restoring the spirit of the Constitution with the 'Once and For All' Amendment is that a federal government of limited powers, along the lines of 1850's government (except as modified by the 13th – 27th Amendments which have since been ratified) is capable of being fully restored. No longer must strict-constructionists be satisfied with measly goals to incrementally restore the Constitution in piecemeal fashion (only to then fail); the whole Constitution is available in one fell swoop once one understands how we have been improperly moved beyond the spirit of the Constitution even as its letter was being followed.
10. While Section 1 of the act of August 4, 1790 appropriated out of import and tonnage duties (earlier enacted) money sufficient for paying interest on the Revolutionary War debts, Section 22 provided for the repayment of debt principal, therein detailing that: "the proceeds of the sales which shall be made of lands in the western territory, now belonging, or that may hereafter belong to the United States, shall be, and are hereby appropriated towards sinking or discharging the debts, for the payment whereof the United States now are, or by virtue of this act may be holden, and shall be applied solely to that use until the said debts shall be fully satisfied."11 11. 1790, August 4; Chapter 34, Section 22. (1 Stat. 138 @ 144). See also; Section 1 (1 Stat. 138 @ 138 - 139)
Section 2. Once and For All Amendment
Section 3. Implications
Although this recommended amendment perhaps appears impotent, its power is perhaps unfathomable for all mere mortals who cannot see into the future. In McCulloch v. Maryland, Chief Justice John Marshall laid down the standard of government action for nearly 200 years as 'all appropriate means not prohibited'. However, Marshall unethically inferred that this was the proper standard for all of American government, everywhere, rather than only in the district constituted as the seat of government of the United States (only those places where such means may be so held). After all, the court was examining the constitutionality of the government incorporating the (second) bank of the United States; but Alexander Hamilton clearly showed that the government was (only) authorized to charter a bank in the district which constituted the seat of government of the United States. The Legal Tender Cases even boasted that bank incorporation wasn't at all 'necessary and proper', but merely 'convenient'. The true and proper standard for all of government action throughout the whole U.S. of A. is clearly provided in Article I, Section 8, Clause 18 of the U.S. Constitution — only those means which are both necessary and proper for implementing the powers expressly vested anywhere in government by the Constitution. The 1819 standard of all appropriate means not prohibited has tragically served as the wholly-invalid standard for American government which for 195 years has allowed the government to grow far beyond its originally-circumscribed principles. Our new once and for all amendment will properly sweep aside all such improper government and restrict omnipotent government back to its tenmiles-square jurisdiction for the seat of government and like areas ceded by States for forts, magazines, arsenals, dock-yards and other needful buildings. 116 Chapter 5. Restoring Liberty and Justice Once and For All.
With the information found in Dollars and nonCents, Americans today may finally restore limited government under the proper restrains of strict construction of the whole Constitution, once and for all. A hypothetical example shows how a different standard easily reaches wholly-different results. For example, what if the standard in criminal cases wasn't simply 'beyond a reasonable doubt', but what if the jury which determines innocence or guilt would always be open to all civil and criminal penalties to which everyone else is subject (i.e., if they wrongly punished an innocent person, that they would yet stand for punishment to the full extent of the law)? In this alternate-universe system, if an innocent man was unjustly sent to prison but his innocence was later undeniably proven — in this case, without immunity, the jury would then be charged with kidnapping and false-imprisonment themselves. Or if an innocent man was put to death, but later proved undeniably innocent — in this case the judge and jury would be charged with cold, calculating, examine-all-the-facts-before-acting premeditated murder. Does anyone have any doubt whatsoever that under this different standard that over-crowded prisons would never again be an issue? Of course, given the implications, neither would any new jury trying the old judge and jury ever even find them guilty, knowing they too would suffer the same fate if they were wrong. Well, the standards which have allowed government to grow far beyond the proper limited confines of the Constitution are just as different; the difference between liberty and tyranny, between a republican form of representative government of one's peers where representatives work within confined powers versus despotic government acting with utter discretion and impunity. Government has grown wildly over the past 195 years without so much as even a mild pruning, simply because we used the completely wrong standard of all appropriate means not prohibited under Marshall's despotism. Section 3. Implications 117
And since the government itself has determined the 'legitimacy' and 'scope' of the 'appropriate' means 'adapted' to the ends as it determines, as well as the measure of 'prohibition' provided by the 'spirit' of the Constitution (with government given the benefit of the doubt in every case), the standard has over time has effectively become 'all means not expressly prohibited'. Chief Justice John Marshall and his fellow cohorts on the bench, all those past Presidents (of which F.D.R. stands front-row-center), many members of Congress, and political party activists who used improper government activity to further their own wealth, power and control should finally be appropriately dealt with in America's history books as the utter scoundrels they were. Those still alive yet today should be given the opportunity to come clean and help restore proper government, or suffer like fate in the history books as the purifying light of truth soon pervades every nook and cranny. The real question won't simply be questioning how this information has not come out in decades and centuries past (evidently because too many people benefitted wildly by keeping the secret to themselves), but what is the reader going to do about it now that he or she knows? There are literally millions of Americans who have taken a sworn oath to support the Constitution, against all enemies, foreign and domestic. That sworn oath is not limited to support but only one clause, but the whole Constitution. It is the express duty of every person who has taken that oath to support our whole Constitution against every transgression. If this author of Dollars and nonCents, a truck driver without any formal education whatsoever in law, politics or history, who researches and writes on constitutional issues on only a part-time basis (admittedly, with all the free-time which he can make available, for decades) can investigate and write about this information, certainly there aren't many valid reasons why others far better-positioned cannot greatly expand upon this information and make it the central topic in every coffee shop and watering-hole in the country. 118 Chapter 5. Restoring Liberty and Justice Once and For All.
If a penniless truck driver with large unpaid debts remaining from the last of his failed business ventures who hasn't any fully-functioning organization behind him, can write this book and several others like it; surely those with better writing skills, business contacts, and financial muscle can do far better. The only thing going for this author is profound stubbornness and sheer determination, with enough faith to know something has gone terribly wrong with our country and that he must help search for its cause. He has simply followed the lead of Toto, knowing that something smells terribly bad and that he must keep searching until he found the proper curtain to pull back to expose the man behind as a monumental fraud, pulling improper levers to bend control of the country to his choosing. The magnificent power of the wizard ends up being nothing but the timely release of a bunch of hot air coupled together in a spectacular sound and light-show to impress and confuse the long line of people who came before him who were told to go and steal their neighbor's assets (shoes) because he had nothing of his own to give. Like the Emperor's new clothes which were not, our government has no real bottomless power beyond the power to make millions believe that it had unfathomable power. The only unfathomable power of the U.S. government is that of deception, that so many people falsely-believed a giant fraud instead of trusting their gut. John 8:32 (N.I.V.) provides us today with appropriate counsel:
"Then you will know the truth and the truth will set you free."
Now is the time to restore liberty and justice once and for all, under strict construction of the whole Constitution; won't you please help? Please help spread the truth in any way you can.
Section 3. Implications
Chapter 5. Restoring Liberty and Justice Once and For All.
Chapter 6. Individual Restorative Action
Section 1. Market Reforms
Whereas the previous chapter proposed a politically-oriented solution aimed at restoring limited government operating under strict construction of the whole Constitution, this work will undoubtedly progress quite slowly, especially at first. It is therefore prudent to also seek private, market-based reforms which can be implemented more quickly, even though they will also take ample time to mature. This chapter seeks to separate us from the destabilizing paper dollar, again using gold and perhaps silver, including striking coin privately. Two major options confront us concerning gold and silver; dealing with them either at their historic monetary rates or in bullion weights. Looking first monetarily, it is helpful to initially defer for the moment any legal impediments to privately coining money while a few other matters are first examined. After gold was effectively pulled from domestic circulation in 1933 (and from international redemption in 1971 [as President Nixon 'closed the gold window']) and silver in 1965, the paper dollar was allowed to 'float' in value, without tie to either metal. Although the post-1837 price-equivalent of one troy ounce of pure gold was $20.67, today it takes some 1,350 paper dollars to buy that same troy ounce of gold.1 The historic dollar-equivalent price of one troy ounce of silver was $1.29; today that same troy ounce costs about $22 in paper.2
1. $20.67 is derived by divided the number of grains in one troy ounce (480) by the number of grains of fine gold in one gold dollar (23.22 [under the 1837 standards]) (480/23.22=20.67). 2. $1.29 is derived by divided the number of grains in one troy ounce (480) by the number of grains of fine silver in one silver dollar (371.25) (480/371.25=1.2929).
Section 1. Market Reforms
That silver has jumped 17-fold while gold catapulted 65-fold when priced in paper dollars really shows only how poorly paper currency has held its value over the long term.3 The dollar (of silver, with an equivalency in gold) was established in 1792 under our Constitution and became our monetary unit, our standard unit of value by which all other things of value are to be measured. It is therefore appropriate to measure anything other than gold and silver (including paper dollars, anytime they are no longer equivalent) in relation to their actual worth in those specie dollars. This is the same process used by the 1790 Congress when they finally established our country on a solid financial footing and discounted the over-issued Revolutionary War bills of credit to their specie-value, receiving in "one hundred dollars in the said bills," and paying out but "one dollar in specie" in return.4 Sadly, our current paper dollars have not fared all that much better than the penny-on-the-dollar returns ultimately paid on the Continental Currency, although the paper dollars we now use have lasted much longer (before they lost so much of their former value). Since gold still circulated in the early 1930's, one paper dollar was at that time still redeemable in one gold (or silver) dollar (and therefore still worth one dollar of gold or silver). However that same paper dollar has fallen today to the corresponding value of only 1.5 cents in gold and 6 cents in silver.5
3. $22/$1.29≈17 $1,350/$20.67≈65 4. 1790, August 4; Chapter 34, Section 3. (I Stat. 138 @ 140).
See also: Monetary Laws, Volume I, Page 51, 2012.
www.PatriotCorps.org. 5. $20.67/$1,350≈$.015 $1.29/$22≈$.06
Chapter 6. Individual Restorative Action
Of course, the harmful thing about paper dollars is that they may be printed ever so easily, but the more they are printed (relative to greater stability of all other goods), the greater their value plummets, as our own history easily attests. But with paper dollars circulating exclusively, gold and silver dollars tragically soon lose their important capability to rein-in and control debt. That one may yet use paper dollars to buy gold and silver (at market prices) doesn't reciprocally mean that gold and silver dollars may pay off, cancel or extinguish the equivalent amount of debt that it takes in paper to buy the precious metals. While it takes some 650 paper dollars today to buy an eagle's worth of gold, one gold eagle may yet only pay off 10 paper dollars in debts, as that remains the eagle's (correct) legal tender value.6 Neither will (regular) stores, banks, or governments credit $650 for that $10 gold eagle, but they will only accept it at its $10 face value.8 To receive proper exchange value for gold and silver coins, one must now go to coin or other specialty shops which treat them not as legal tender money, but as commodities based primarily upon their metal content (or perhaps according to their numismatic value, if that is greater).
6. "All coins and currencies of the United States (including Federal Reserve notes and circulation notes of Federal Reserve banks and national banking associations), regardless of when coined or issued, shall be legal tender for all debts, public and private, public charges, taxes, duties, and dues."7 7. 1965, July 24; Section 102. (79 Stat. 254).
See also: Monetary Laws, Volume II, Appendix M. Page 687. 2012.
See also: 31 U.S.C. 5103. See also: Monetary Laws, Volume II, Appendix N. Page 699. 2012.
www.PatriotCorps.org. 8. See; Chapter 7 (Section 9) regarding ill-conceived recommendations to hold otherwise.
Section 1. Market Reforms
As paper currency loses purchasing power, soon its face value buys but a fraction of what it once did. But the further the purchasing power of paper falls, the more powerless gold and silver become at controlling paperdenominated debt (when paper rather than metal is held as the standard). This is because no one is going to spend gold and silver coins as money once their value as bullion becomes worth so much more. Obviously no one is going to spend a $10 gold eagle as money at $10 when that amount of gold as bullion is valued 65 times greater, at $650. But without gold or silver dollars any longer ever paying off debt, debt inexorably grows, as it has throughout America across all spectrums — government (federal, State, and local), business and private individuals. As older debts mature and become due, they are now 'paid' only with 'broken-promises dollars' which could not fulfill old promises to pay specie dollars. Thus outstanding principal and accrued interest are rolled over into new debt which now accrues new interest on top of old interest. Since the day for paying off individual maturing debts doesn't ever really come, the day of reckoning for all of that debt inevitably will… Our examination of gold and silver dollars clearly shows they will always now be treated as commodities and never any longer as money (under our current paper 'standard') once paper currencies severed their tie to the precious metals and the purchasing power of that paper plummeted to such extent that it would be foolish to use gold and silver as money. One can therefore readily-understand that striking new gold and silver coins at their historic legal tender monetary levels won't really help us restore matters (under current practices). And there certainly isn't any reason to strike coins of gold or silver at artificially-inflated rates, such as making that same 232.2 grains of pure gold found in one post-1837 $10 gold eagle and declaring it valued instead at $100 or $1,000 or valued at their paper currency value. A long prison sentence for counterfeiting inevitably awaits anyone who sought to practice something so foolish. 124 Chapter 6. Individual Restorative Action
Strictly speaking, only gold and silver coins are yet legal tender within the United States of America. Promise money was never made legal tender for the whole country, but only for the district constituting the seat of government of the United States (see Chapter 3). Therefore the true solution to our mounting debt woes would be to finally drive that proper wedge between these two different legal tender dollars of these two separate legal jurisdictions. With that accomplished, an appropriate exchange rate between coined dollars and note dollars would develop. Massive debts currently denominated in paper dollars would then be appropriately discounted to their specie value anytime specie dollars were tendered. Debts could then actually begin being paid off (at greatly discounted rates) without plummeting the economy into a severe monetary contraction.9 Of course, concurrent with a proper division of these two forms of money would be the division between the whole United States of America government and the District of Columbia government. This proper separation would soon bring about a wholesale restriction of improper government activity, stopping the perpetual debt-generation machine as probably some 95% of the federal government closed its doors forever. While it is possible to institute this strict division between the two different legal jurisdictions and between the two different legal forms of money, this again is as massive educational undertaking (likely taking place only together with implementation of the political recommendations of the previous chapter). But once more, it is important to proceed forward and begin instituting needed changes, now.
9. Undoubtedly at rates far below their current equivalent rate;10 for once the legal differences are understood and widely acknowledged, paper dollars' worth in specie dollars would inevitably plummet even further. 10. $100 in face value of broken-promises money-to-$1.5 in gold.
Section 1. Market Reforms
Therefore, in essence, we acknowledge that the paper dollar effectively displaced the specie dollar from national usage and that those paper dollars currently serve as the de facto medium of exchange throughout the country. Taking things as they are found, we begin moving forward by recommending a solution which would actually be recommended for the whole country anyway (as more conducive to justice than dollars of silver and gold with their fixed exchange ratios between them which are wholly impossible to maintain [and are no longer maintained] and between three different types of 'dollars' confusingly all called the same name but having three inherently-different values). With the paper dollar currently serving as our 'standard' and without the proper acknowledgment of the legal division between specie dollars of the U.S.A. and paper dollars of the district constituted as the seat of the government of the United States, coining more gold or silver dollars would do us very little good. Thus there currently isn't any good reason to resume coining gold and silver dollars as money. But before looking into striking gold and silver in bullion weights, it is still important to examine our right to privately coin gold as money.11 In other words, just because we decide we don't want to do something at any given point in time doesn't mean we should ever willingly surrender any of our rights to a usurping government.
11. Privately coining silver won't be examined due to the 1853 lightening of the (half-dime,) dime, quarter and half-dollar some seven percent while their values remained at their historic proportional rates (proportional in value [but not in weight] to the unchanged silver dollar). Such lightening of the fractional coins in relation to the unchanged silver dollar while their values were all improperly maintained would fit the first parameter for the strict definition of counterfeiting (coins of proportional value having disproportionate weight). Striking disproportionate coins should make intent to defraud easier to prove. Privately coining fractional silver coins at the last silver standards implemented in 1873 (based primarily on 1853 standards) today would seem like a sure-fire way to be convicted for counterfeiting.
Chapter 6. Individual Restorative Action
Section 2. 18 USC 485
The first of multiple penal sections which are today thrown at any would-be modern-day private mint seeking to honestly provide the market with stable money, incredibly, is the anti-counterfeiting law found at Title 18 of the United States Code, in Section 485, which reads:
"Whoever falsely makes, forges, or counterfeits any coin or bar in resemblance or similitude of any coin of a denomination higher than 5 cents or any gold or silver bar coined or stamped at any mint or assay office of the United States, or in resemblance or similitude of any foreign gold or silver coin current in the United States or in actual use and circulation as money within the United States; or "Whoever passes, utters, publishes, sells, possesses, or brings into the United States any false, forged, or counterfeit coin or bar, knowing the same to be false, forged, or counterfeit, with intent to defraud any body politic or corporate, or any person, or attempts the commission of any offense described in this paragraph — "Shall be fined under this title or imprisoned not more than fifteen years, or both."
This code section traces its roots back to the anti-counterfeiting section of the last major coinage act in 1873, which sections trace back to the earliest federal penal statutes involving counterfeiting of coin, the laws of 1806 and 1825.12
12. 17 Stat. 424; 2 Stat. 404; and 4 Stat. 115, respectively.
See also:
Monetary Laws, Volume II, Appendix D; Page 114: Appendix K, Pages 596 and 597, 2012. www.PatriotCorps.org.
Section 2. 18 USC 485
Section 3. February 12, 1873 Coinage Act
As the first of four sections dealing with counterfeiting, Section 61 of the February 12, 1873 act was worded somewhat of representative fashion as the rest, stating in part:
"That if any person…shall falsely make… or counterfeit…or assist in falsely making…any coins or bars in resemblance…of the gold or silver coins or bars…coined or stamped at the mints and assay-offices of the United States…or shall…attempt to pass…or bring into the United States from any foreign place…any such false…or counterfeited coin or bars, knowing the same to be false…or counterfeited, every person so offending shall be deemed guilty of felony..."13
These sections read in familiar anti-counterfeiting fashion; dealing with falsely-made, counterfeited coins struck (and bars stamped) or brought into the United States with intent to defraud. As knowingly and falsely-making coin with fraudulent intent are central facts needed for conviction for the typical anti-counterfeiting law, these anti-counterfeiting laws will not by themselves be used against a private mint which produces honestly-struck coins of gold of original design meant for circulation as money. The same goes with criminal conspiracy to defraud charges used in conjunction with these anti-counterfeiting laws. This is because without additional help, these anti-counterfeiting and conspiracy to defraud statutes simply cannot prove that honestly-struck coins of original design are in any way 'counterfeit', nor can intent to defraud be easily shown when everything is honestly done in full disclosure. These two arrows in the government quiver used to repel the private coinage of honestly-struck original money need additional vital aid; they need yet another law to act as the necessary catalyst to bring about the desired reaction, conviction, which thus stops any would-be competitor.
13. 1873, February 12; Chapter 131, Section 61. (17 Stat. 424 @ 434).
See also: Monetary Laws, Volume II, Appendix D, Page 123, 2012.
Chapter 6. Individual Restorative Action
Of course, the irony is that if Congress and the U.S. Mint coined fullbodied, proportional-weight coins of proportional value for circulation as money, private mints wouldn't have much of a market, as history readily attests (as covered shortly). The old adage that "perfection of the coins" is "a great safeguard against counterfeits" especially rings true in this case, of Congress and the mint failing to provide gold and silver coins of proper weight and purity for circulation as money.14
Section 4. 18 U.S.C. 486
The third and by far the most potent arrow in the government quiver used to thus far stop any and all potential competition for the U.S. Mint (and indirect competition to the U.S. Bureau of Printing and Engraving) is today found at Title 18, United States Code, Section 486, which reads:
"Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloy of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both."
This code section amazingly mentions nothing of the false-making of coins or fraudulent intent and has thus long-served as the greatest obstacle to the market taking proper steps for correcting the omissions of Congress and the U.S. Mint. This section seemingly prohibits even the honest making of full-bodied gold coins intended for use as money, even if of original design.
14. Alexander Hamilton's January 28, 1791 Report #24 to the House of Representatives on the Establishment of a Mint.15 15. Monetary Laws, Volume www.PatriotCorps.org. II, Appendix C, Page 94, 2012.
Section 4. 18 U.S.C. 486
The explicit purpose of this code section is that if the government can make all privately-coined money illegal, then all private coin is therefore 'against the law' or, in other words, 'counterfeit'. Such determination then allows use of the anti-counterfeiting laws and conspiracy to defraud statutes to then really bring home the hammer and show any would-be competitor who is king. Thus, to unhinge also the use of anti-counterfeiting laws and conspiracy to defraud statutes against private mints seeking to strike fullbodied original gold coins for use as money, one must only eviscerate Section 486 of Title 18 of the U.S. Code, as everything hinges on it. The most obvious weakness Section 486 of Title 18 is the wording therein which itself authorizes an absolute exception to punishment, the phrase "except as authorized by law." If one is "authorized by law," one may therefore strike honest originaldesigned gold coins for use as money with impunity. The all-important question needing a correct answer to avoid fines and imprisonment is, of course, who is authorized by law to coin honest money of original design in these United States of America? Unfortunately, current laws don't seem to directly help answer the question, as they only discuss coins struck at the mint or currency printed at the U.S. Bureau of Printing and Engraving. Without finding any express law stating who is expressly "authorized by law" to privately coin honest gold money of original design, it therefore perhaps appears only government is authorized to do so. But appearances can be deceiving, so one mustn't stop quite so easily. To learn more about any particular law or code section, it is helpful to know its origin, to trace its historical roots. Under the Historical and Revision Notes associated with 18 USC 486, the earliest reference one finds here refers to an act of March 9, 1909 (Chapter 321; specifically at Section 167), which is found at Volume 35 of the Statutes at Large, on page 1120. 130 Chapter 6. Individual Restorative Action
This 1909 act is "An Act To codify, revise, and amend the penal laws of the United States." The words of the 167th section of the 1909 act are almost word-forword with Section 486 of Title 18 of the U.S. Code, but vary ever so slightly with differences which are to us irrelevant. It should be noted that the wording "except as authorized by law" is identical in each. The sidebar notation on this 1909 act references Section 5461 of the early Revised Statutes, at page 1059. Section 5461 of the 1873 Revised Statutes again shows a few differences from the 1909 act, but the identical wording "except as authorized by law" is again used.16 The sidebar notation for this Section 5461 of the 1873 Revised Statutes itself references back to the act of June 8, 1864, at Chapter 114. Looking up Chapter 114 — the act of June 8, 1864 — one notices there is here no earlier act noted in sidebar ; this 1864 act serves as the original roots for 18 USC 486.
16. Volume 18, Part 1, Statutes at Large, Page 1059.
Section 4. 18 U.S.C. 486
Section 5. June 8, 1864 Act
The June 8, 1864 act, Chapter 114, is entitled "An Act to punish and prevent the Counterfeiting of Coin of the United States" and reads, in its entirety:
"Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That if any person or persons, except as now
authorized by law, shall hereafter make, or cause to be made, or shall utter or pass, or attempt to utter or pass, any coins of gold or silver, or other metals or alloys of metals, intended for the use and purpose of current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, every person so offending shall, on conviction thereof, be punished by fine not exceeding three thousand dollars, or by imprisonment for a term not exceeding five years, or both, at the discretion of the court, according to the aggravation of the offense. "APPROVED, June 8, 1864."17
This 1864 act, together with the 1933 confiscation of gold and the 1965 substitution of nickel-clad coins for silver, together serve as the evil triumvirate which has long allowed the government to become the greatest thief and foremost counterfeiter that especially won't tolerate honest, hardmoney competition. One notices titles of law are found before the enactment phrase ("Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That…"). Only the words which follow the enactment phrase are actually part of the enacted law, as one may understand literally by examining the precise wording chosen, "Be it enacted…That…" Therefore titles of law not also recited within the law after the enactment phrase are not actually part of the enacted law.
17. 1864, June 8; Chapter 114. (13 Stat. 120).
See also: Monetary Laws, Volume II, Appendix K, Page 604, 2012.
Chapter 6. Individual Restorative Action
Thus this title has no legal effect, since its words are nowhere found within the enacted law. This title is provided for 'convenience', in this case the convenience of leading readers astray, to the false conclusion that this 1864 act actually has anything whatsoever to do with counterfeiting. Counterfeiting, of course, is properly made illegal in acts of Congress dating back to Section 19 of the 1792 coinage act and the 1806 crime act under the express authority of Article I, Section 8, Clause 6 of the Constitution.18 The body of this 1864 act contains nothing mentioning the falsemaking or fraudulent practice of lightening gold or silver coins "for gain's sake" or otherwise falsifying, diminishing, or impairing the coins as worded by the April 21, 1806 and later acts.19 But the words of this 1864 act look even more ominous and potent than the true anti-counterfeiting acts, since this act seemingly restricts the making of "any coins of gold or silver" or other metals "intended for the use and purpose of current money," including those "of original design," without expressly excepting full-weight gold coins struck with honest intent. This 1864 act appears to outlaw the private coinage of honestly-struck gold even of original design. To better understand this act, it may be of some help to discard some of the redundancy which isn't really needed to understand its primary point. Thus the following (which is incomplete as to wording, but not too much regarding overall meaning for our point):
"That if any person…except as now authorized by law, shall hereafter make…any coins of gold or silver… intended for the use and purpose of current money… every person so offending shall, on conviction…be punished..."
18. The 1790 crime act was passed before the first coinage act was enacted and therefore dealt with counterfeiting only for securities. 19. 1806; April 21; Chapter 49, Section 3. (2 Stat. 404).
See also: Monetary Laws, Volume II, Appendix K, Page 596, 2012.
Section 5. June 8, 1864 Act
Although the 1864 act looks mighty powerful, it is absolutely crucial to notice the all-important disclaimer within that law:
"except as now authorized by law."
The only piece of critical difference between this 1864 act and all later revisions is the word "now" is found in the 1864 act, but not in any later code revision. And this three-letter word makes substantial difference for learning about who is "authorized by law" in the first place to privately coin honest full-bodied gold coins for use as money.20
Section 6. Private Mints
Before examining this thought, it is important to briefly review some early American history concerning the private coinage of money. Although small discoveries of gold had been found in Georgia and North Carolina earlier, large discoveries were found in 1828. As this area was quite isolated from the Philadelphia mint, several local proprietors took it upon themselves to establish private mints to begin privately coining discovered gold into local money. The Bechtler mint in North Carolina struck several million dollars' worth of gold coin for use as money from 1831 to as late as 1850 while the Reid mint struck gold in Georgia as late as 1849; neither of which received any interference from any government official or agency.21 Following the discovery of massive amounts of gold in California beginning first in 1848, several dozen private firms struck gold coins through 1856, including those which maintained the best reputations, Moffat & Co. and Wass, Molitor & Co.22
20. Again, we avoid the question of (fractional) silver coins due to the 1853 act which lightened the small silver coins some seven percent in relation to the unchanged silver dollar. 21. Walter Breen's Complete Encyclopedia of U.S. and Colonial Coins, Walter Breen, Doubleday, New York, 1988, Pages 624 and 621. 22. Ibid., Pages 629 - 654.
Chapter 6. Individual Restorative Action
As would be expected from so many private mints operating quite footloose and fancy free in rapidly-expanding, western gold-fever boomtowns, many were not overly competent in their new endeavors. Most of the coins were struck in low fineness, but they typically made up for their inadequate purity (compared with federal standards) simply by adding a few more grains of standard gold to make their coins heavier (than federal coins). The Mormon Church also struck gold coins at their Deseret Mint in Salt Lake City from 1848 through 1860.23 The discovery of gold in Jefferson Territory (Colorado) in 1858 brought a few private mints to the area, who struck private gold coins there in 1860 and 1861.24 No federal authorities intervened in any of these private mints, for as long as the private mints did not falsely-strike gold at lower weights or purities than advertised or attempt to fraudulently hold their own coins as actual federal issues, they broke no law and were thus free to do as they wanted. Besides, customers accepting (privately-struck) gold coins without at least weighing them to verify their true weight fell under the free-market principle of caveat emptor, 'buyer beware'. Most of the private mints struck coin at rates of two and a half dollars, five dollars, ten dollars, and twenty dollars, although (round and octagonal) dollar, half-dollar, and quarter-dollar gold coins were also struck, as well as fifty-dollar coins and even "rectangular specie ingots" at odd-valued denominations (according to their equivalent rates). The Constitution only prohibits the States from coining money, not private individuals. But this doesn't mean that Congress necessarily made it easy for private individuals to ever compete with the mint of the United States.
23. Ibid., Pages 655 - 656. 24. Ibid., Pages 659 - 662.
Section 6. Private Mints
Section 14 of the original 1792 coinage act allowed any individual to bring in silver or gold bullion to the mint and have it there (italics added):
"assayed and coined as speedily as may be after the receipt thereof…free of expense."25 Section 7. Branch Mints
With Congress authorizing the establishment of branch mints at New Orleans, Louisiana; Charlotte, North Carolina; and Dahlonega, Georgia under an 1835 act, any private mint which operated nearby soon found their chosen profession rather difficult.26 The same matters also came into play with the later branch mints being authorized in San Francisco, California, on July 3, 1852; Denver, Colorado, on April 21, 1862; Carson City, Nevada, on March 3, 1863; and The Dalles, Oregon, on July 4, 1864.27 What all the privately-operating mints discovered was that once Congress established nearby branch mints which adequately met local needs as to the quantity and denomination of gold coins desired by the public, that it was very hard for these private companies to compete against a competent government branch mint which produced an ample supply of well-struck legal tender coins free of charge.
25. 1792, April 2; Chapter 16, Section 14. (I Stat. 246 @ 249)
See also: Monetary Laws, Volume II, Appendix D, Page 102, 2012.
www.PatriotCorps.org. This same section allowed the mint a half percent deduction if the person depositing gold or silver bullion instead preferred to make an immediate exchange for gold or silver coins already struck (rather than wait for coins to be struck out of his own bullion). 26.1835, March 3; Chapter 39. (4 Stat. 774).
See also: Monetary Laws, Volume II, Appendix I, Page 395, 2012.
www.PatriotCorps.org. 27. 10 Stat. 11; 12 Stat. 382; 12 Stat. 770; 13 Stat. 382, respectively.
See also: Monetary Laws, Volume II, Appendix I, Pages 421, 426,
428, & 431, respectively. 2012. www.PatriotCorps.org.
Chapter 6. Individual Restorative Action
As long as the branch mints of the United States struck gold coins in adequate quantity and valuation levels sufficient to meet local demand, no private company needing profits could really ever hope to compete. Thus as soon as local branch mints began full production, the local private mints were quickly run out of business. Therefore the real lesson to be learned from early American history is that if the mint does not supply the public with the quantity and valuation levels for gold coin the public desires, private mints may compete.28
Section 8. Except as Now Authorized by Law
It is now time to resume careful examination of the 1864 act, the first act which attempted to limit the private coinage of money. Referring back to the shortened version is adequate for our purposes.
"That if any person…except as now authorized by law, shall hereafter make…any coins of gold or silver… intended for the use and purpose of current money… every person so offending shall, on conviction…be punished..."
Let's ignore for the moment the absolutely critical question which should never be ignored, whether members of Congress are actually empowered in the first place to ever prohibit the private coinage of money (for the whole country, at least). Let's further assume only for our present purposes that they do actually have this power and that Article I, Section 10, Clause 1 expressly authorizes Congress to enact laws to prohibit the private coining of money. But even if members of Congress were empowered with the express power to prohibit the private coining of money, this 1864 act nevertheless still could not be the first or only act (including revisions) used to prohibit the private coinage of honest gold coin of original design for use as money.
28. The U.S. Mint's disproportionately stated value to proportionate weights destroys the strict viability of its American Eagle coinage program from meeting one of the principal attributes of money; its (proportional) divisibility, the ability of money to be used in purchases large and small. Of course, they are excellent if used at proportional values (rather than their disproportional values struck on their face).
Section 8. Except as Now Authorized by Law
That disclaimer, "except as now authorized by law" provides an
absolute exception to the making of any practice which was otherwise legal apart from that act, illegal by that act.
The 1864 act thus only adds another layer of punishment to anything covered within it which was actually made illegal by any other act, but it was powerless to bring anything new under the prohibition umbrella due to the express exemption wording therein used, "except as now authorized by law." Well-documented early American history clearly shows dozens of proprietors struck with impunity honest gold coins of original design (even those made rather sloppily) for use as money before enactment of this 1864 act. The important point for properly understanding this 1864 act is to realize that not one of these private mints ever needed any express government 'authorization' to privately coin money. They all were, in fact, 'authorized by law' to privately strike honest gold coin of original design for use as money simply because no express law ever prohibited that practice in the first place. Whereas the false-making of counterfeit coins for gain's sake with fraudulent intent had long been properly prohibited, the honest striking of gold coins of original design for use as money has never been made illegal.29
29. We of course still pass on the subject of fractional silver coins being privately struck because the 1853 act improperly designated that lightened fractional silver coins were yet valued at their historic rates (we would strictly argue that neither is it proper for the mint of the United States to strike such coins at such values disproportionate to the silver dollar). The only credible defense for striking these fractional silver coins would be to argue that those lightweight coins met the current standard of Congress for silver coins. Thus the only reason to privately strike fractional silver coins under the 1853/1873 weights and values would be to serve as the sacrificial lamb to show that neither did Congress truly have the power to lighten these coins while holding them at their historical values.
Chapter 6. Individual Restorative Action
Since the 1864 act expressly exempted from punishment all persons who were "now authorized by law" to do all the things which were next mentioned, this 1864 could not make anything illegal which was yet legal outside of and apart from this act. Although the 1864 law was a clever attempt to appear to prohibit the private striking of gold coins of original design for use as money, it importantly could prohibit nothing new. "[E]xcept as now authorized by law" — is in no way equivalent to "except as may be hereafter expressly authorized by law." It is not as if the act reads "that no person…except as hereafter expressly authorized by law, shall hereafter make…" (the prohibited coins). In other words, "except as now authorized by law" was inserted into the act to rightfully allow what must be allowed (because members of Congress are powerless to restrict it [certainly for the whole country, at least]), while yet providing government with a useful tool for instituting a prima facie case against people who don't know how to fight the act. Or if the 1864 act had omitted the exception wording, then it would have actually prohibited something new (all that which was next listed). But of course, Congress could not actually prohibit the private striking of honest gold coins of original design for use as money because they may only act as they are expressly empowered, and no such power grants them such authority to restrict such actions (certainly for the whole country).
(cont'd) In other words, the only legitimate purpose to privately strike these lightweight silver coins would be ultimately to get the courts to throw out that bad coinage law as beyond the power of Congress to regulate the value of coins (after all, the coinage clause does not empower Congress to make irregular the value of coins they strike). One would then have to hope in this test case that sincere motives would be properly noticed, keeping the government from therefore also proving fraudulent intent even as the coins privately struck were light of historical weight given their value.
Section 8. Except as Now Authorized by Law
Since there were no express exceptions actually listed within the 1864 act itself, the exception wording wasn't therefore actually needed in fact to provide any specific express exceptions at that time. And since the 1864 act expressly pointed to 'law', if it was ever decided in the future that there should be some express exceptions added, then it would yet take another full 'law' to finally provide them. Since it would still take another law to finally implement any explicit exceptions in the future, then why even include an exception in the first place unless long-established general principles of law still allowed anyone honestly striking gold coin of original design for use as money to do so ? Why not simply prohibit the action in question in every case and then later amend that law if express exemptions were finally added? It was not either as if the 1864 act provided that "that no person…shall hereafter make…without a license…" (the prohibited coins), which wording could then allow, say the Treasury Department, to make exceptions without Congress needing to enact a whole new law. The answer, again, is that members of Congress are nowhere granted such express authority to actually prohibit the private coining of honest, full-bodied gold coins for use as money of original design. It is a fundamental axiom in free society that people may legally do all that is not expressly made illegal by their government (moral questions aside). Even in the most-oppressive dictatorship on the face of the planet, nothing is likely illegal until it is actually made illegal by some actual law. The precise purpose of all those bazillions of laws, codes, regulations, orders, proclamations, acts, rules, and resolutions implemented within the United States over the last 150 years is to specifically and excessively restrict and regulate private action. If the government didn't need all those legal decrees to restrict private action, we wouldn't have them.
Chapter 6. Individual Restorative Action
If instead we needed express authorization from government to act, we'd have only a handful of regulations which allowed us to do only as they saw fit to authorize. That we may do all that is not legally prohibited by express law necessarily follows from our Republican Form of Government guaranteed under Article IV, Section 4 of the Constitution — government of delegated powers — that people reserve all rights and powers they did not expressly delegate to government (see the 10th Amendment which expressly voices this principle as the Supreme Law of the Land ). Our federal government is a creation of man (through our State governments) which is delegated certain powers to act in specified cases. While man is free to do all that is not prohibited, free government may only do that which is properly delegated to it. Government is actually that artificially-created entity which needs proper authorization to act! The 1864 act seeks to reverse cause and effect, to hold government as omnipotent and able to do everything except which is expressly prohibited while it holds man as mere automaton who may only act as 'allowed'. Our Constitution does not, and certainly cannot ever for the whole country, allow the absolute reversal of the fundamental maxim acknowledged by our Declaration of Independence, that man is endowed by our Creator with unalienable rights. Governments are instituted by man and delegated specific powers as evidenced by written constitutions, in order to protect man's God-given rights, not usurp them. Man may act with freedom to do all that is not prohibited; to act except where government has properly circumscribed a given course of action as the proper means needed to better-secure our God-given rights of life, liberty and property within their proper delegation of authority. Counterfeiting is properly circumscribed by government since the unjust use of weights and measures — especially involving our money — is theft, not only of property, but also that portion of one's life which was expended to obtain or create that property. Section 8. Except as Now Authorized by Law 141
That is precisely why government must not be the biggest thief, the principal counterfeiter, the leading proponent of false-measures. And that government has been these awful things is precisely why America is in such dire straits. We do not need to look to government to know what we can do, but only to learn from it what we may not. Given the express words chosen by the 1864 Congress ("except as now authorized by law"), this 1864 law actually left matters as it found them and changed nothing. The exemption wording in the 1864 act provides an absolute exception to all persons who honestly struck full-bodied, honest gold coins of original design for use as money. Of course, later revisions omitted the word "now" from the exception, so it is important to understand the implications of that change. Anyone striking honest gold coins of original design for use of money before the 1864 law was enacted could still continue to strike them after enactment of the 1864 law, given its express words (and so could all other persons who followed that same lead [but with the mint and branch mints adequately providing coin, it was unprofitable for private mints to do so]). Thus when Section 5461 of the 1873 Revised Statutes listed "except as authorized by law," we know that, in essence, that 1873 law would
necessarily look to the existing situation to know who had been and therefore continued to be "authorized by law" to strike honest, full-bodied gold coin of original design for use as money.
In other words, neither did the 1873 law do anything to change the status quo of the conditions which operated before it was enacted. The 1909 and later revisions also simply continued things as they were found. The implication of the exemptions used in every revision of the 1864 law was to change nothing as it existed before 1864.
Chapter 6. Individual Restorative Action
It would thus take a different law to actually prohibit the private coining of honestly-struck gold coin of original design for use of money (or to remove the exemption wording altogether [which importantly was never done in any later revision]). Of course, if such a law existed, that other law would be the one quoted in any criminal case against the private mint proprietor! The true principle involved in this matter is not that private mints and private individuals need any particular express authorization to 'authorize' them to privately coin honest gold money; it is that the prohibition against this practice needs an actual law to legally prohibit it, without exception. Thus the law to be searched regarding 18 USC 486 is not therefore any authorization to privately strike coins in the first place, but that law which actually prohibits the practice of privately coining honest gold money without exception. One cannot prove a negative, so one will not find an express law "authorizing" private mints and individuals to strike honest gold coins as money, because it doesn't exist in a single form of law. Thus, any person in 2014 who yet strikes honest, full-bodied gold coins of original design for use as current money may do so, just as any person before 1864 could do the same thing, just as some people actually did just before that time without government harassment or molestation. In other words, Title 18, United States Code, Section 486 is yet another impotent law falsely masquerading as a just and proper law. And the 'Justice' Department of the United States of America has the unmitigated nerve today to prosecute honest private individuals who merely seek to provide the market with sorely-missed honest money of gold or silver coin which Congress will not authorize and the mint will not strike. It is of utmost importance that all revisions of the June 8, 1864 act yet contain the phrase "except as authorized by law." Sadly, the 1864 act and later revisions all attempt to make Americans guilty until they properly prove their innocence. Section 8. Except as Now Authorized by Law 143
Defendants seek to prove their innocence by searching for that particular law which does not exist which would expressly-authorize them to privately coin honest money. But the burden of proof for proving guilt is on federal authorities; so they must point to that specific law which actually prohibits the private striking of honest gold coin as money. If the government cannot point to any law earlier than this June 8, 1864 act which supposedly made the private coinage of honest gold money illegal, and if they cannot point to any other law enacted since 1864 which expressly did so without similar exemption, then they simply cannot use those later revisions of that 1864 law which contain an exemption to win their case against any honest gold coinage program of original design.30 The 1864 act is simply a bad law that increased the stakes of not knowing how to correctly prove one's innocence. And the matter of utmost importance which can never be forgotten — this practice of privately coining honest gold money of original design cannot be made illegal in these United States of America under a government of delegated powers, because no constitutional power grants Congress such authority! The whole of the Constitution supports private property; it does not undermine it. Information earlier provided in this chapter showed that there is little reason for private mints to strike gold coins at their historic monetary rates. This latest information shows that it remains legal for them to do so if they so desired, as long as the coins are honestly struck of original design with proper weight and purity as advertised.
30. Of course, this still will not likely stop government from indicting a person and placing him before the court and burdening him with defending his innocence, but it means they cannot win on that point. Remember though, cornered animals are the most dangerous and thus beware of every clever legal maneuver possible, as they must defend their unjust system, and they simply must win at any and all cost.
Chapter 6. Individual Restorative Action
Section 9. Gold Bullion Coins
It is now time to examine the recommended course of action, the use of gold at specific bullion weights. If we seek to devise the most-workable gold program possible, it should include the possibility of privately striking gold coin instead of just accepting what is readily available now, if it proves more advantageous. Since gold coins were never successfully 'legally-counterfeited' on a large scale like silver coins being effectively replaced with nickel-clad counterfeits in 1965 for the government seat, gold coins remain an option for private mints; thus they may strike gold either in coins or bars. While gold may be struck in either coins or bars, silver should only be struck in bars due to all the nickel-clad 'counterfeit' coins struck by the mint since 1965 which too closely resemble the real thing for far too many people. Bars provide a clear break from nickel-clad coins, providing immediate verification to all users that they are a completely different animal. Figuring uniformity better-ensures the success of both metals, this author recommends bars in both silver and gold if both will be struck. If only gold will be struck, then the long familiarity of coins would favor them over small bars. But small gold bars are popular in countries where gold is favored, such as India and China; there isn't much reason to suspect things would be substantially different in the U.S. (so private mints may do as they please). It is appropriate to first examine at what precise weights should private mints strike gold. The model for the recommended program is the 1834 act which made the 1792-era gold coins obsolete (no longer 'current' at their old monetary rates) and valued them monetarily only at their troy weight of standard gold, treating them as standard-purity bullion coins. But in our instance, we will make no attempt to value our gold monetarily (such as 94.8 cents per pennyweight of .91666-standard gold). Section 9. Gold Bullion Coins 145
What we seek as our primary consideration will be simply to strike gold coins or bars at convenient weight increments far more conducive to trade. As Alexander Hamilton noted in his January 28, 1791, report on the Establishment of a Mint, Thomas Jefferson originally proposed:
"that the weight of the dollar should correspond with the unit of weight."31
Hamilton's response to "incorporating so systematic an idea" was that "the execution of that idea becomes more difficult."32 But unlike 1790's America, we may start afresh with a clean slate since no country today uses gold and silver coin in everyday trade. We may thus do so now without the burdens which would have been originally present. What we are seeking to provide is a voluntary, market-based alternative to using government-issued, debt-based, broken-promises money which is loaned into existence at compound interest. Our purpose is simply to make barter as convenient as using 'money', but without odd-weighted coins or legal compulsion. In other words, we are seeking a free market solution to a huge government problem which has straight-jacketed our economy with promise money now issued with broken promises. We need not seek Jefferson's extensive reworking of all units of weights and measures to take advantage of his coinage recommendations that money "should correspond with the unit of weight" to "render uniform and stable the system" so the coins would reference "standards unchangeable in their nature."33
31. See: Monetary Laws, Volume II, Appendix C, Page 97. 2012. www.PatriotCorps.org. 32. Ibid. 33. American State Papers, Senate, 1st Congress, 3rd Session, Miscellaneous Documents, Volume 1, Pages 13 - 20. Report # 15 —
Plan for Establishing Uniformity in the Coinage, Weights, and Measures, of the United States, Communicated to the House of
Representatives, July 13, 1790.
Chapter 6. Individual Restorative Action
Neither do we any longer need to use arbitrary and even now-tarnished names such as 'dollar' or use coins of odd-numbered grains, such as 371.25. Our principle idea is to forgo 'money' entirely, and simply strike gold at weights convenient for use in everyday voluntary trade. The 1834 act's valuation of 94.8 cents per pennyweight used the leastfamiliar unit of weight in the troy weight system, which is best to avoid for its unfamiliarity, as well as for being too large a unit for gold. The troy ounce, of course, is the unit involved with the U.S. Mint's popular American Eagle coinage program. This unit, being twenty times larger than a 'pennyweight', however is far too large for convenient trade at lower values, quickly necessitating cumbersome fractions or decimals. Although it may at first sound rather odd, the best way to ensure that proportional value is never severed from proportional weight is to eliminate any possibility from them ever varying; and the only way to eliminate them from ever varying is by eliminating one of them! Whereas Congress decided to eliminate weight from the equation and declare value arbitrarily by government-fiat, the free market ought to do the opposite of omnipotent government and in this case instead eliminate stated value (and arbitrary names used to represent arbitrary value, which names are now tied to harmful geopolitical policies). The free market should simply strike gold at precise units of weight and
allow that precise weight unit to serve as the useful measure of that metal for all purposes, especially accounting for its quantity.
In other words, instead of using the term 'dollar' to describe an oddlydetermined amount of gold at a specific purity (such as 25.8 grains of gold 9/10ths-fine [23.22 grains fine] as one dollar), to instead simply use the given measure of weight as the unit of account itself.
Section 9. Gold Bullion Coins
Section 10. The Grain of Gold
This author asserts that the 'grain' of fine gold is the proper unit for accounting for gold in the land of plenty, the 'grain' being the smallest unit of weight typically used to measure gold and silver. The other primary contender for the unit is the 'gram' and it is used that way to some extent today, but the grain is favored over the gram on each of the several major fronts. First, the grain is smaller; one gram equals 15.432 grains. This allows the grain to reach much more of the vast multitude of lower-priced goods and services before resorting to use of numbers less than one (important if the gold unit ever becomes used in everyday exchange [this author's goal]). Priced in dollars (when gold is $1,350/troy ounce), one gram of gold is worth $43.40; which is too large of unit for easy use in common exchange. One grain of gold at the same rate is worth $2.81, which is a good fit within current conceptions of value based in dollars (which warrants consideration) while yet cutting current values by nearly a third. An example showing prices in grains and grams shows the former better suited for the average mind-set. An eighteen-dollar-per-hour employee (such as this truck-driving author), with gold rated as above, would earn the employee 6.40 grains of pure gold in one hour, instead of a mere 0.42 grams of gold per hour (which is a factor of 10 too big [meaning a 'decigram' would be a better alternative as the gold metric unit]).34 The second huge benefit of the grain is that all the many bullion coins which have been struck at one troy ounce, half-ounce, quarter-ounce, and tenth-ounce (and even one-twentieth-ounce) weights may be directly valued at 480-grains, 240-grains, 120-grains, and 48-grains (and 24-grains).35
34. The chemical symbol of gold is Au (Latin Aurum). 6.40 grains of pure gold could be referenced as 6.40 Au with some symbolism indicated for grains. The symbol chosen should exist on a standard keyboard (w/o widespread use); perhaps ^ (as in ^6.40 Au) could be used. 35. Which coins could also be referenced as 20-pennyweight coins, 10dwt., 5-dwt., & 2-dwt. (and 1-dwt.) coins, if need be for any reason.
Chapter 6. Individual Restorative Action
Typical ounce-denominated coins are widely available in both pure bullion form (many of which are now struck in .9999-fineness) or with an alloy for greater physical durability. Examples of the former are the Canadian Maple Leaf, the Chinese Panda, the Vienna Philharmonic, the Australian Kangaroo, and the new American Buffalo gold coins. The most widely-available alloyed bullion coins are the American gold bullion Eagle and South African Krugerrand coins which are struck in 22carat (11/12ths-fine/.91666-fine) gold.36 The alloyed bullion coins super-add to the alloyed weight on top of the stated ounce-increments, so these alloyed bullion coins still conveniently contain the same precise amount of pure gold as the .9999-fine coins (the standard weight of the alloyed bullion coins are heavier than stated).37 But as there are also many coins (and bars) struck in gram-equivalents; the gram remains in contention for the unit in a distant second place, especially for those persons trading overseas where metric weights are used. Of course, the best fit for coins (and bars) in grains would be for a mint to conveniently strike them at rounded grain figures (for ease of adding them together), striking them at 500 grains, 250 grains, 100 grains, 50 grains and at 25 grains of pure gold (either .9999-fine or alloyed [alloy again in addition to the stated weights]). American gold coins were originally struck by the mint at 22-carat-fine according to old-world custom (in 1834 it became .899225), but in 1837 this was changed to .900-fineness. The alloy of silver and copper was added to toughen the coins, to make them last longer in circulation.
36. The American gold bullion eagle coins should not be confused with the historical American 258-grain coinage eagle (of 232.2 grainsfine, valued at $10 [weights and value since 1837]). 37. The bullion eagle coins weigh with alloy 523.635 grains; 262.288 grains; 130.913 grains; and 52.36 grains overall (respectively to footnote #35 [the eagle isn't available in the 1/20th-ounce]).
Section 10. The Grain of Gold
In the 1826 report on the assay of foreign coins, director of the mint Samuel Moore reports that:
"The average loss on a silver currency, it appears, is nearly four grains of silver from the dollar, or about one cent in value in a period of fifty years. The loss on gold coin…appears…to be not less than two per cent within the same period."38
A one percent loss of standard silver and two percent loss of standard gold in fifty years of circulation show alloyed coins have a rather impressive resistance to abrasion (smaller coins show greater losses). This author does not know what would be the average loss of pure gold or pure silver struck without alloy but yet used in circulation, but realizes it would be much greater (likely too great for smaller coins or bars). For as long as most all Americans now living recall, gold has not circulated for use as money. Thus, to the extent gold is now owned, especially since the mid 1970's, gold coin typically sits in safe storage and is only brought out for occasional examination or infrequent trade. Thus one sees the popularity of the pure-gold bullion coins now typically struck in .9999-fineness (rather than struck with an alloy). However, if the grain of gold was established as the market unit of accounting for gold, there is no reason why trade in gold could not easily resume (especially if electronic trading also develops). In this case, alloyed gold would again be far preferential for its greater durability, unless pure gold coins were kept in protective plastic cases.39 This author prefers alloyed gold over plastic, although if the market established plastic-packaged gold in .9999-fineness, then he would have no objection to it. This author proposes, like the silver Trade Dollars of 1873 and most bullions products, that the weight and purity be struck directly thereon.
38. Volume 5, American State Papers, Finance Series, Page 585 @ 589. 39. See; www.SunshineMint.com/BullionProducts.aspx for examples of Tamper Evident Packaging for their gold bars.
Chapter 6. Individual Restorative Action
A 500-grain pure gold coin or bar would have "500 grains" clearly struck in a large font, with ".999(9) gold" also struck in a readily-readable fashion. Alloyed gold should be struck in .916-fineness, since it uses less silver/copper than .900-fineness, given alloy doesn't add value historically. Therefore a 500-grain pure gold coin in .91666-fineness would have a total weight of 545.45 grains. Struck in small font should be '545.45 grains' and '.916 fineness', but with '500 grains pure gold' struck in a larger font. The wonderful thing about using the 'grain' as the accounting unit for tracking the amount of gold one owned is that all existing gold, in whatever form it is found — whether in dust, flakes, coins, bars, or jewelry — is determinable in the number of grains of pure gold, in any purity. Thus, to trade with gold in any purity or condition, one must only assay and weigh it to immediately know its trade value, without further calculation (other than perhaps converting to grains). Undoubtedly, un-assayed gold would be discounted due to the added effort needed to accurately determine purity. It should be noted (given the long-held negative view of the U.S. government against privately coining money) that even U.S.-based private mints have long-struck large numbers of gold coins or bars in 'troy ounce' increments or its fractions, and then sell them to private American investors, without a second look by regulatory agencies. If a private mint may strike gold coin or bars and private individuals may buy, sell, and trade them in one-ounce troy coins or bars (which is but 480 grains), then they could also easily strike 500-grains coins or bars.38
38. See www.SunshineMint.com for a list of their products, including .9999 fine gold bars at the following weights: 1 gram, 2 grams, 2.5 grams, 5 grams, 10 grams, ½ ounce, 20 gram, 1 ounce, 50 grams, 100 grams, 5 ounces, 10 ounces, and 1 kilogram. One gram equals 15.432 grains.
Section 10. The Grain of Gold
The same goes for one-half ounce troy coins or bars of 240 grains; there would be no reason that they could not be struck instead at 250 grains, for greater convenience (and on down to the 25-grain coin [if not lower]). And just as one may make original verbal, written or electronic orders to buy, sell, or trade troy ounces of gold, so may one use such means to buy, sell, or trade grains of gold. Both troy 'ounces' and 'grains' are simple units of measure and both are equally valid; they are just units of a different size.
Section 11. Silver
The billions of cupro-nickel clad coins substituted for silver coins since 1965 are the billions of reasons why silver shouldn't be again coined for monetary or bullion use (other than the large one-ounce troy coin, as not all that many clad dollars were ever struck). Nickel-clad coins are simply too good of a counterfeit for far too many Americans to readily distinguish them from silver coins without an extensive number of tragic fraud cases developing. This author therefore recommends any silver struck in bullion weights to be struck in bars rather than in coin form. Bars immediately inform everyone they are a different beast than base metal coins everywhere available. But the grain is far too small of unit for silver. In the $18/hour example of an employee earning 6.4 grains of gold per hour, in silver (at $22/troy ounce) the employee would earn the equivalent of 392.73 grains of fine silver per hour (which isn't that much different than saying 1,800 cents/hour). The better unit in silver would be the pennyweight; earning in this case 19.64 pennyweights of silver per hour. But given the strong likelihood for confusion with the term 'pennyweight' (thinking incorrectly that it had anything directly to do with a penny, with a cent being 1/100th of a dollar), a slang term should be predominately used instead. 152 Chapter 6. Individual Restorative Action
To further attempt to minimize possible sources for confusion (from the pennyweight), the unit for silver should perhaps instead be the 'gram', with the employee listed above earning 25.45 grams of silver in one hour. As one readily sees by the examples listed between gold and silver, trade value equivalents 'priced' in gold and silver will always be wholly separate from one another, without correlation between their values. Thus one understands the long (but ultimately futile) attempts of Congress supporting a bi-metallic monetary system, for uniform values in dollars of two differing metals, to reach the wide ranges of market prices in one single monetary unit. Given two separate and incongruent pricing structures for physically trading in two different precious metals, one may more-easily understand why physical and electronic trading in just one metal — gold — may ultimately instead develop.
Section 12. Electronic Trading in Gold
Of course, the greatest benefit with gold will come from also trading it electronically (or even by written checks, drawn in grains), where one needn't make physical trades, only in any coin's set weight. Given advances in technology now completely commonplace, electronic trading in just one metal at any given weight (down to the tenths and hundredths of a grain) is now easily permitted which wasn't (readily) available to our ancestors generations ago. Whereas silver was needed to reach smaller purchases when trade occurred by physical coins (and to less extent with paper currencies), it is now quite simple to make very small trades electronically, where the rights to actual, stored physical gold are traded rather than coin itself. With electronic trading, neither is there specific reason coins need necessarily be struck at the recommended grain weights, although it is still advantageous for account holder to take delivery of gold at convenient unit increments (which ounce-denominated coins do provide, just not at the most-convenient rounded increments). Section 12. Electronic Trading in Gold 153
Interestingly enough, GoldMoney® operated an electronic gold payments accounting system somewhat similar to that described. Unfortunately, as noted at their website:
"owing to both the relatively low use of this service and increasing regulatory burdens, in January 2012 GoldMoney® decided to stop metal payments in all countries except Jersey, Channel Islands."39
The i-Golder® website likewise declares that:
"iGolder is no longer accepting new accounts and balances can only be redeemed."40
The "increasing regulatory burdens" issue has been a big concern in the U. S., limiting their use as customers are understandably concerned about federal intervention and thus steer clear of the system. For instance, the most successful electronic gold trading system which operated in the United States was e-gold Ltd., begun in 1996 by former oncologist Dr. Douglas Jackson. E-gold boasted large numbers of users before being shuttered almost a decade later after it was raided by federal authorities (but not before Jackson easily proved the concept). Being the first of the brave innovators can be unquestionably difficult; Jackson plead guilty for operating a money transmitting business without a license and for money laundering-related crimes after some of his account holders allegedly placed their ill-gotten gains into e-gold accounts. Court documents referenced in a Digital Gold Currency Magazine article asserted that 609 outside e-gold accounts had $8.6 million worth of gold placed with e-gold (out of $80+ million worth of 'legitimate' funds) which was allegedly purchased with ill-gotten gains from criminal activity (especially credit card fraud).41
39. http://www.goldmoney.com/services/gold-payments 40. www.igolder.com. 41. January 2012, Issue No. 50, Page 8. http://issuu.com/dgcmagazine/docs/digital-gold-currency-magjanuary-2012.
Chapter 6. Individual Restorative Action
But it is doubtful other money transmitting services (Western Union, postal money orders, etc.) could prove fewer percentages of criminals use their services (not to mention the U.S. Bureau of Printing and Engraving, whose products [U.S. dollars] are obviously the currency of choice for the most hardened of criminals, the world over). Further in Jackson's defense, his business model (like the business models for PayPal, prepaid debit card companies, etc.) simply didn't originally fit well into any government 'box'; thus when he sought government guidance and clarification, none was often received as nothing specific to that developing industry was then in place. But alternate payment systems have now matured to the point where a fully-regulated and government-approved gold-based electronic payment system is all but inevitable, perhaps even sooner rather than later. The biggest driving force for accepting electronic gold, from the government's perspective, is undoubtedly the increasingly-ubiquitous 'bitcoin'. Jon Matonis, Executive Director of the Bitcoin Foundation, described bitcoins in a Forbes interview as:
"a decentralized cryptocurrency without political borders."42
Matonis further writes (italics in original):
"No one really sends or receives bitcoin. They merely transfer their ownership and specific control rights to the block chain on the giant public ledger in the cloud. It's like an air guitar. The bitcoin itself exists because we all say that it exists. "The same can be said of bitcoin's exchange value – it has value because we all say that it has value. That is both its weakness and its brilliance. Its intangibility prevents its confiscation."43
42. http://www.forbes.com/sites/jonmatonis/2012/07/31/top-10bitcoin-statistics/ 43. http://themonetaryfuture.blogspot.com/2011/11/air-guitars-andbitcoin-regulation.html
Section 12. Electronic Trading in Gold
The 'intangibility' of the bitcoin which "prevents its confiscation" provides sufficient reason to believe that the U.S. government would much rather allow development of electronic gold exchanges under State and federal regulations than continue to suppress them and thus simply drive additional business towards the bitcoin which has defied all attempts to regulate it (at least thus far, and as pertaining to users of the bitcoin). From the government's perspective, electronic gold exchanges which trade in small bits of centralized gold yet offer ample coercive means to induce proprietors to share collected data, or in worst case scenarios, to seize. In contrast, the bitcoin offers no such centralized monitoring capability or ability to seize, other than regulating those businesses which accept or generate bitcoins. But even the regulation of electronic gold is perhaps not to be as much feared as otherwise believed, as long as real ownership to small amounts of authentic gold are actually allowed to be transferred between individuals. This is partly because any number of questionable electronic gold transfer services have operated in the U.S. which were perhaps little other than outright fraudulent schemes with convincing websites, enticing would-be, unsuspecting patriots to send in their hard-earned money to some backwater post office box never to be seen again. Other attempts were probably well-intentioned, but simply beyond the proprietor's capability to pull it off, again leading to wholesale loss of outside investor's money (which is never good). Government regulation and licensing, even if they do not directly minimize fraud, at least force the proprietors behind the proposal to be sufficiently-funded and competent enough to wind-through the difficult government mazes needed for approval. With regulation, of course, user anonymity will be a thing of the past; transaction data will be retrievable and reportable, as with any bank. But even with such liabilities, to begin distancing ourselves from intractable debt-based currencies which have plagued Americans for 80 years will be a monumental blessing which we ignore only at our own peril. 156 Chapter 6. Individual Restorative Action
Besides, regulated electronic gold exchanges will still offer untold advantages over regulated banks and credit unions which continue to operate in paper and electronic dollars (which most of us use extensively, simply because there are few viable alternatives). Electronic gold exchanges won't have FDIC insurance, but neither will they have the same exposure (assuming they do not make loans). Undoubtedly the exchanges will have liability insurance insuring against theft and likely also against fraud (physical destruction of gold shouldn't be an issue). Liability concerns can also be minimized with independent auditing and full accounting disclosure. Inevitably, investors will initially place the excess of their past production, their liquid savings, in electronic gold exchanges. From it they will likely at first make occasional purchases of non-essential items. But in time, as increasing numbers of people and companies become members of electronic gold trading firms, more business will be conducted with electronic gold, including at some point paying wages, buying everyday items and even paying household bills. The day when Americans are again able to protect themselves from inflation (paper currency devaluation) while simultaneously using those same liquid assets for everyday purchases may be closer at hand than we realize, as e-precious metals and money transmitter regulations are now already in place federally and in each State.44 After further mind-set adjustments, even loans in gold are possible. Since most business and small personal loans are for five to seven years, the conversion to gold-based loans can occur within a decade or two. Within one or two generations, it is quite possible and perhaps even inevitable that a unit of gold may again become at least the de facto standard of value in the United States of America.
44. See the March 18, 2013 Guidance paper (FIN-2013-G001) on FinCEN's Regulations regarding Virtual Currencies. www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
Section 12. Electronic Trading in Gold
Thus far, the unit of choice for electronic gold trading systems seems to be the gram weight of gold. As of this writing, both GoldMoney® and the developing Coeptis® electronic gold-trading system use or plan on using a gram of gold as their account standard.45 Again, this author yet argues the gram of gold is far too large of a proper accounting unit in this land of plenty and impressive productive capabilities which are sure to continuously expand. In 1792, a dollar was initially set at an equivalent of 27.0 grains of gold .91666 fine, or 24.7 grains of fine gold. With 24 grains in one pennyweight, the 1792 dollar equivalent of gold was just slightly more than one pennyweight of fine gold. In 1834, the dollar-equivalent amount of fine gold became 23.22 grains (25.8 grains standard gold), getting smaller also as the productivity of the United States increased. But with 15.432 grains of gold in one gram, GoldMoney® and Coeptis® are both effectively stating (with the gram as their unit) that man's productive capacity hasn't really grown much since the late 19th century. Even worse, with their large accounting unit, they are asserting that man's productive capability isn't likely to grow much either in our future. The 'grain' as gold's accounting unit is much better-suited to man's productive past and even more productive future, especially once the shackles currently placed on the free-market are instead appropriately restored back on improper government. But as electronic gold trades occur on an ever-increasing scale, it will be far more difficult to later change the unit.46
45. Coeptis; as in Annuit Ceoptis; from the Great Seal of the United States, meaning "He (God) has favored our undertaking." 46. Can anyone say, 'Q-W-E-R-T-Y' ?
Chapter 6. Individual Restorative Action
Should the gold dollar (of 25.8 grains of standard gold nine-tenthsfine) be properly-recognized as our legal tender, then gold-bullion coins denominated directly in grains will be most-easily converted to dollar equivalents of 23.22 grains of pure gold.47 Metric gram units, however, have never been used to define the American gold or the silver dollar (only fractional silver coins, since 1873).49 Metric grams may still be converted to grains, of course, but it is far better and simpler that the weight units actually defined by American coinage statutes be used rather than converting weights from gram units of the metric standard. While grain- or gram-denominated gold coins may be used to pay off gold- or paper dollar-denominated debts (after discounting the paper dollar to gold-dollar or gold-grain/gram equivalents), this author still recommends the grain of fine gold as our permanent standard unit for determining and measuring value. A transition out of the paper dollar to the grain of fine gold is our true goal, even if a gold dollar is used to reach it.
47. For example, the 250-grain pure gold coin recommended earlier would be valued at $10.766 (under the same principles as 1834, when the 247.5 grains of pure gold in the 1792 gold eagle was made worth $10.665).48 48. The rates for gold coin today won't exactly correlate with the 1834 gold rates per grain without additional figuring, because the post1837 (.900-fine) dollar contains 23.22 grains per dollar instead of 23.20 grains found in the 1834 dollar (.899225-fine). 49. The American bullion eagle coins ($50/1-oz. troy/$25/1/2-oz. troy, etc.) are not dollars of the United States of America, which require proportional value and weight.
Section 12. Electronic Trading in Gold
Government may eventually follow this goal, but they won't lead the way. Just as the Spanish milled dollar as the market-coin-of-preference served as the model for our own American coin, so too can the grain of fine gold in time become our legal standard. Free market initiative will develop the system once a sufficient number of people begin understanding the inherent advantages of trading precise units of actual gold (and the ownership rights thereof, electronically).
Chapter 7. State Restorative Action
Section 1. Gold and Silver Coin
Whereas Chapter 6 dealt with matters within private capabilities, this chapter looks at topics within the theoretical realm of State action — what a State could do if any legislature was ever so-inclined. Article I, Section 10, Clause 1 of the U.S. Constitution provides the fundamental basis for any proposed State gold program. It details in part:
"No State shall…coin Money; emit Bills of Credit; (or) make any Thing but gold and silver Coin a Tender in Payment of Debts…"
Due to the express constitutional prohibition which every State acknowledged and voluntarily relinquished as they individually ratified the Constitution, no State may any longer coin money or emit bills of credit. Without the continued ability to coin money (as they retained under the Articles of Confederation), the States are left with their acknowledged power to make "gold and silver Coin a Tender in Payment of Debts." From this author's perspective, the primary benefit of this power would be to formally re-declare the proper legal standard of value against which all other forms of money and debts are to be measured. This, in turn, would allow development of a market mechanism for discounting debts and costs to their specie-equivalent legal tender values anytime expenses are paid in gold coins.1 This discounting of debts and costs to their gold-equivalent values (based on the dollar of 25.8 grains of nine-tenths-fine gold [as last specified in the year 1900]2) anytime payment was made in gold would correctly support the gold dollar as the standard unit of value, while it would not foreclose standard forms of payment (still made at face value).
1. Payments made with paper dollars would continue to pay off debt at their normal face values. 2. 1900, March 14; Chapter 41, Section 1. (31 Stat. 45).
See also: Monetary Laws, Volume II, Appendix J, Page 552, 2012.
Section 1. Gold and Silver Coin
The recommendations made within this chapter are based on declarations of legal tender; i.e., based upon measures of legal compulsion. This author readily concedes this compulsion, yet believes it isn't necessarily in the best interests of market-oriented individuals who should push for voluntary cooperation (as recommended within Chapter 6).
Section 2. Gold and Silver Bi-Metallism
But before looking at instituting the process for discounting all other forms of money to their specie-equivalent value, it is important to take a literal look at Article I, Section 10, Clause 1 of our U.S. Constitution, especially the phrase:
"No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts…"
This clause speaks of "gold and silver Coin;" not "gold or silver Coin." Holding these words to their strict meaning makes effective State action implausible, because if a State must declare both gold and silver coin a tender, especially at the last rates as set by Congress, such requirements would short-circuit any such program even before it got off the ground. If American coinage history proves anything else, it proves bi-metallism — fixing two precious metals at equivalent ratios — doesn't long work. What was proven in the 19th-century is all the more relevant in the faster-paced 21st-century, where past events which depleted the U.S. Treasury in several years would now happen in a few hiccups. It is helpful to know more about our monetary standard and to learn more about bi-metallism as we nevertheless seek to develop a workable State solution to our monetary woes. In 1792, the silver dollar became our unit of value as it was the only coin struck at the 'unit' value (of one 'dollar'). All silver coins were also not only valued in terms of a dollar, but also directly denominated in that term as well (dollar, half dollar, quarter dollar, disme [tenth {of a dollar}], and half-dismes ['half-tenths' or twentieth of a dollar]). 162 Chapter 7. State Restorative Action
The gold coins were explicitly named in 'eagle' terms (eagle, half eagle and quarter eagle) but valued in terms of the dollar ($10, $5, and $2.50). With the eagle being made equivalent to "the value of ten dollars or units," gold coins were given a set parity with silver coins in dollars (until changed).3 Importantly, gold coins weren't called 'ten dollar' coins, 'five dollar' coins, and 'two-and-a-half dollar' coins. The first assault to the silver dollar as our (primary) monetary standard occurred in 1849 as silver was forced to share its pedestal as the unit coin when a gold dollar coin was first authorized.4 In 1853, fractional silver coins maintained in their value were lightened by law some 7% of their weight while the silver dollar was left unchanged, bringing disproportionate weight to silver coins of proportional values, effectively sabotaging silver from continued worth as a true store of value.5 The silver dollar was kicked off its pedestal in 1873 as the current "silver coins of the United States" outlined in the 1873 act no longer included the venerable silver dollar (as the trade-dollar took its place) and as the gold one-dollar piece was formally declared the "unit of value."6 However, in the 1873 act, all the old silver dollars earlier-coined were left alone and were still fully-valued at their unlimited legal tender quality.
3. 1792, April 2; Chapter 16, Section 9. (1 Stat. 246 @ 248).
See also: Monetary Laws, Volume II, Appendix D, Page 101, 2012.
www.PatriotCorps.org. 4. 1849, March 3; Chapter 109, Section 1. (9 Stat. 397)
See also: Monetary Laws, Volume II, Appendix D, Page 111, 2012.
www.PatriotCorps.org. 5. 1853, February 21; Chapter 79, Sections 1 & 2. (10 Stat. 160)
See also: Monetary Laws, Volume II, Appendix D, Page 112, 2012.
www.PatriotCorps.org. 6. 1873, February 12; Chapter 131, Sections 15 & 14, respectively. (17 Stat. 424 @ 426 – 427).
See also: Monetary Laws, Volume II, Appendix D, Page 116, 2012.
Section 2. Gold and Silver Bi-Metallism
Section 3586 of the 1873 Revised Statutes limited the legal tender status of "all silver coins of the United States at their nominal value for any amount not exceeding five dollars in any one payment," thereafter limiting the legal tender status of all U.S. silver coins (including the 371.25 grainsfine dollar).7, 8 The silver dollar was resurrected in 1878, when its minting was resumed and as it was again made a full legal tender without dollar limit, but which tender was now expressly subjected to the added caveat, "except where otherwise expressly stipulated in the contract."9 The "dollar of twenty-five and eight-tenths grains of gold nine-tenths fine" fully ascended to the monetary throne in 1900 as our formal "standard unit of value."10 Therefore, although the silver dollar was America's first effective monetary standard, our primary unit of value, it suffered incremental dethroning until the process was completed in 1900.
7. Section 5596 of the Revised Statutes repealed: "All acts of Congress passed prior to the said first day of December one thousand eight hundred and seventy-three, any portion of which is embraced in any section of said revision." 8. Given Section 5596 of the Revised Statutes (which revisions were approved June 22, 1874), these statutes thereafter became the controlling force at law, not the originally-enacted laws now repealed by the Revised Statutes. 9. 1878, February 28. Chapter 20. Section 1. (20 Stat. 25). The Bland-Allison Act.
See also: Monetary Laws, Volume II, Appendix D, Page 126, 2012.
www.PatriotCorps.org. Excepting the silver dollar from legal tender where stipulated effectively relegated it second-class monetary status, much like paper. 10. 1900, March 14; Chapter 41, Section 1. (31 Stat. 45).
See also: Monetary Laws, Volume II, Appendix J, Page 552, 2012.
Chapter 7. State Restorative Action
In 1900, the gold dollar officially became America's "standard unit of value" and America fully came under a gold coin standard. But even yet Congress didn't give up the idea of a bi-metallic monetary system — but now of a gold coin standard with a silver coin equivalency — holding out promise for silver coins as "all forms of money issued or coined by the United States" were explicitly ordered to "be maintained at the parity of value with this standard."11 Section 3 supported the silver coins even further (especially the venerable silver dollar), stating:
"That nothing contained in this Act shall be construed to affect the legal-tender quality as now provided by law of the silver dollar, or of any other money coined or issued by the United States."12
The continued persistence to support America's bi-metallic currency was otherwise admirable, even as it was increasingly futile. While the roots of parity trace back to the 1792 monetary act (and even earlier to the coinage reports), by 1878 it was readily apparent that it was clearly beyond the power of Congress to effectively maintain a gold-tosilver parity. Of course, if the government had 'more power', then 'all could be ok'. Thus Congress sought to effectively expand their power by inviting various Latin American and European nations to a conference:
"for the purpose of establishing, internationally, the use of bi-metallic money, and securing fixity of relative value between those metals."13
11. Ibid. 12. Ibid., Section 3. (31 Stat. 45 @ 46). 13. 1878, February 28. Chapter 20. Section 2. (20 Stat. 25). The Bland-Allison Act.
See also: Monetary Laws, Volume II, Appendix D, Page 126, 2012.
Section 2. Gold and Silver Bi-Metallism
This call for an international monetary conference was made repeatedly.14 A July 26, 1933 memorandum was signed at London under which the United States among other things agreed to "purchase or otherwise arrange for the withdrawing from the market…twenty-four million, four hundred and twenty-one thousand, four hundred and ten, fine ounces of silver in each calendar year beginning with…1934" (terminating in 1938).15 The United States passed the Silver Purchase Act of 1934 in pursuance to the agreement.16 The June 5, 1933 Joint Resolution of Congress which ostensibly sought to abolish gold clauses did so nominally "to maintain at all times the equal power of every dollar," which was "the declared policy of the Congress."17 While domestic circulation of gold effectively ceased in 1933 (the year before the Silver Purchase Act of 1934), it is readily apparent from domestic circulation of gold and silver since 1974 that conferences such as this didn't do much long-term good. While 15:1 ratios were established between gold and silver in 1792, becoming 16:1 in 1834, they fluctuated greatly since the mid-1970's at far greater ratios, hitting a high of about 100:1 and currently at about 65:1.
14 a. 1892, August 5; Chapter 380. (27 Stat. 349). b. 1897, March 3; Chapter 376, Section 1. (29 Stat. 642). c. 1900, March 14; Chapter 41, Section 14. (31 Stat. 45 @ 49 – 50).
See also: Monetary Laws, Volume II, Appendix J, Pages 549, 551, 552 @ 555; respectively (a, b, & c). 2012. www.PatriotCorps.org.
15. Memorandum of Agreement between the U.S., Australia, Canada, China, India, Mexico, Peru, and Spain concerning Silver (effective April 24, 1934).
See: Monetary Laws, Volume II, Appendix J, Page 579 - 582, 2012.
www.PatriotCorps.org. 16. 1934, June 19; Chapter 674. (48 Stat. 1178) (the Silver Purchase Act of 1934).
See: Monetary Laws, Volume II, Appendix L, Page 674, 2012.
Chapter 7. State Restorative Action
Section 3. June 28, 1834 Coinage Act
The first real test for bi-metallism came to Congress in 1834. Actually it came a decade earlier, but Congress ignored the growing problem until 1834, as they weren't really sure how to deal with it. Gold coins disappeared from circulation, because gold was undervalued by American law and it inevitably flowed to where it was more highly valued. Internationally, one troy ounce of gold was now worth about 16 troy ounces of silver. In the United States, however, every part gold was still fixed by law monetarily at 15 parts of silver. With the disappearance of gold, by 1834 America was effectively placed by default and inaction on a silver standard. If Congress had continued to do nothing, America would have effectively transitioned to a strict silver standard, without gold, since the outdated parity from the 1792 law served as a fairly potent barrier to continued monetary use of gold (having an inaccurate fixed parity is far worse than having no legally-established parity). The earlier report writers understood that they could not fix for all time the parity between gold and silver. Robert Morris, Superintendent of Finance by Congress operating under the Articles of Confederation, was the only report writer who wisely called for a single monetary standard, stating:
"Arguments are unnecessary to shew that the scale by which every thing is to be measured, ought to be as fixed as the nature of things will permit of. Since, therefore, a money standard affixed to both the precious metals will not give this certain scale, it is better to make use of one only."18
17. 1933, June 5 Resolution. (48 Stat. 112).
See also: Monetary Laws, Volume II, Appendix L, Pages 657. 2012.
www.PatriotCorps.org. 18. See; Robert Morris' 1782 Report to Congress in Monetary Laws, Volume II, Appendix C, Page 61 @ 63, 2012. www.PatriotCorps.org.
Section 3. June 28, 1834 Coinage Act
But the remainder of report writers (including Jefferson and Hamilton), writing over the next decade as Congress attempted to organize a mint, recommended a bi-metallic monetary system using both gold and silver as money, fixing parity values by law at current market rates. In his report on the establishment of a mint, Hamilton discussed the "occasional variations" which would be inevitable, the "fluctuations in the relative value of the metals," but he stressed that "if care be taken to regulate the proportion between them, with an eye toward their average commercial value," then he thought both metals could be safely made money designated in various units (at proportions fixed for periods of time).19 Hamilton unfortunately doesn't describe his preferred method to "regulate the proportion" between the two metals, but undoubtedly it would follow roughly the act of June 28, 1834 (although it isn't known if he would have recommended coining gold at new weights). If the later Congresses had studied-better the 1792 act, they should have found sufficient clues to know what to properly do, earlier. The different treatment of the two metals in 1792 — naming and valuing silver coins in terms of a dollar but naming gold coins in terms of eagles but only valuing them in terms of a dollar — actually provides later Congresses their necessary starting point for adjusting fixed parities — i.e., for knowing what to do when that parity inevitably changes. In 1834, Congress effectively gave a new value in dollars for the old eagle-denominated gold coins, to account for their greater worth worldwide relative to silver which was experiencing somewhat of a glut. Congress acted appropriately even though they waited a decade too long before acting. The original gold eagle coins would now just be valued at numbers no longer convenient and rounded, like the $10.665 value per full-weight (1792-era) eagle which value was (indirectly) established by the 1834 act.
19. See: Alexander Hamilton's January 28, 1791 Report in Monetary Laws, Volume II, Appendix C, Page 79 @ 83. 2012. www.PatriotCorps.org.
Chapter 7. State Restorative Action
It was certainly convenient to also have new gold coins struck at rounded dollar figures, at least if the gold-to-silver ratio was likely to stay stable for quite some time; but Congress could have simply kept coining the same eagle, half eagle and quarter eagle gold coins as designated in 1792. In 1834, Congress also specified new gold coins, at lighter weights, so they could be struck at the old convenient dollar levels ($10, $5, & $2.50). In 1792, one dollar in gold was worth one dollar in silver both at law and in the marketplace. But by 1834, the amount of gold legally in one (1792-) dollar's worth of gold had come to be worth in the world market ~$1.07 in silver (1.0665). In the 1834 act, Congress valued all the old gold coins at that equivalent rate (based upon actual weight) and then made newer lighter weight gold coins and regulated their value at the familiar $10, $5, and $2.50 values for convenience. To the uninformed, this change in the gold coins may appear as pure monetary debasement, defined inadequately either as taking an existing coin and valuing it at a new higher value or lightening the weight of new coins but keeping their older (high) values. Strictly speaking, Congress performed both of these procedures in 1834, but yet it still wasn't monetary debasement. While the effect was the same as monetary debasement (of changing values or weights), its cause was certainly not. In an ever-changing world, one must accept change even if one violently desires otherwise. Since, by definition, bi-metallic monetary systems operate on equal parity between two metals, if parities change in any market that overpowers any law to the contrary, then the amount or value of one or both of the metals must at law change. Since gold had grown in value in the 1820's relative to silver, it was proper to either make existing gold coins worth a greater amount of money or remove some gold from new gold coins at their old values (or add more silver to the silver coins or value the silver coins less). Section 3. June 28, 1834 Coinage Act 169
Under the 1792 act, each person who turned in 150 silver dollars to the U.S. Treasury was able to withdraw 15 ten-dollar gold eagles (or greater numbers of smaller gold coins in equivalent dollar figures). But before the 1834 act was enacted, savvy market traders could take those 15 gold eagles they received from the treasury for 150 silver dollars and ship them overseas to effectively exchange them for 160 silver dollars. This arbitrage process could be and was then repeated indefinitely for assured profits, until all the domestic gold was depleted. It was improper for Congress to so long ignore reality and continuing paying out undeserved subsidies until they figured out what to do. It would have been better if Congress a decade earlier had just given new rates for gold coins so decades-worth of gold coinage wouldn't have been exported and melted. None of the report writers who had recommended both metals ever suggested that their parity ever be at anything other than at market rates. Given our original silver standard with a gold parity, anytime the parity changed, the value of the gold coins should have been increased or diminished slightly to reflect that parity back to market equivalent rates. While it would have been necessary to mathematically calculate the value of the gold coins anytime they were spent, their higher value made such calculations more practical on the fewer, large transactions where gold was typically spent (than having a gold standard with a fluctuating silver equivalency, where calculations would then be needed for the vast multitude of small transactions). Sadly, both the Legal Tender Cases and the Juilliard courts blatantly and unethically sought to deceptively trade upon people's general misunderstanding of the true monetary principles involved in the 1834 gold readjustment in the dollar, and both cases inferred that this 1834 change was monetary debasement.20
20. Legal Tender Cases, 79 U.S. 457 @ 548 - 549, 551 - 552. (1870).
See also; Juilliard v. Greenman, 110 US 421@ 449. (1884).
Chapter 7. State Restorative Action
Those justices who swore an oath to support the Constitution then used their holding of money debasement in 1834 to overtly justify their judicial holding which effectively added paper dollars as additional forms of legal tender. The justices, in effect, asserted that if members of Congress have the power to debase a little, then they have the power to debase a lot, and therefore within their discretion Congress could thus emit legal tender paper currencies without any gold or silver. The legal tender opinions inferred that the 1834 Congressional actions cheated Americans out of gold rightfully owed them, and if the 1834 Congress could cheat a little, the 1862 Congress could cheat a lot. Importantly (and which of course wasn't mentioned by the courts), anyone who specified payment in gold in any contract wasn't affected whatsoever by the actions of the 1834 Congress, but received their just due as specified. But the pre-1834 contracts against which the court theorized weren't payable in gold, but in 'dollars', dollars of either gold or silver at the option of the debtor (unless otherwise stipulated in the contract [and if such stipulation was made {but gold clauses weren't then typically used}, then the 1834 act wouldn't have affected them]). While the gold dollar did 'lose weight' in 1834, it was because the gold found in that dollar rose in value. Since by definition gold and silver had to be at equal parity — at equal worth at any given dollar value — they both had to be at the same equivalent worth. While it was proper to readjust those metals back to parity in our bimetallic monetary system any time they varied, it was wholly improper to use that proper re-establishment of equal parity as the (admitted) means to deceptively remove all metal from our money (by powers used for D.C.). While one may certainly and consistently argue against bi-metallism because of that occasional or frequent need to re-establish fixed parities, one should not falsely use those readjustments to get rid of both metals, forevermore destroying money as our actual store and standard of value. Section 3. June 28, 1834 Coinage Act 171
Utilizing a form of money based upon two different metals which need to be finely-balanced at equal parity with one another (which takes competent and timely readjustment) is certainly not a valid reason to throw out both metals as money and thereafter use only paper. Hamilton and Jefferson both argued in favor of using both metals to increase our supply of money and reach all value levels in one money of account. The readjustment process necessary between the metals was then used to remove both metals from our money, to be left only with paper. Much better would it have been to use Morris' single standard (of silver, to reach small trades), with gold coins (denominated in eagles) valued in (silver) dollars at time of use according to their current market equivalent without ever having any fixed parities at law (even for short periods of time).
Section 4. February 21, 1853 Coinage Act
By 1853, silver increased in value back towards its earlier 15-to-1 proportions as the California gold rush brought into production large amounts of newly-discovered gold. Congress again seemed unsure of what to do; tragically they didn't simply undo what they had done in 1834 as circumstances reverted back to normal and thus provide later Congresses with the proper examples of what to do if our bimetallic money changed in either direction. Instead they disastrously established new disproportionate weights for small silver coins (the silver coins less than one dollar) yet proportionally maintained in their value, destroying the very foundation upon which all money properly rests (proportional value for proportional weight). The silver dollar coin was unfortunately left unchanged, while the halfdollar, quarter-dollar, dime and half-dime were all lightened some seven percent — the 206.25-grain standard silver half-dollar was lightened to 192 grains, with the other fractional coins modified in similar proportion. Just as silver was again becoming more valuable in the world (relative to gold, which was at that time falling in value due to the immense California gold discovery), silver was crippled from continuing to serve in its proper monetary role at proportionally-valued rates. 172 Chapter 7. State Restorative Action
With this 1853 monetary act, Americans for the first time could no longer look to proportionally-weighted coins to accurately determine value. Instead people looked to an artificially-declared face value which for the first time no longer matched actual value. The only thing limiting damage was that the light-weight fractional silver coins were limited in their legal tender in payment of debts only for sums not exceeding five dollars. If the silver dollar had also been lightened by a corresponding amount, then this 1853 act would have actually followed the same principles as the 1834 act, only now dealing with silver rather than gold. That the silver dollar wasn't also lightened ironically is what violated fundamental monetary principles. If the dollar had also been lightened by the same corresponding amount, then all silver coins would have remained proportional in value and weight and again a small portion of the morevaluable metal would have been taken from the existing coins. In that case, there would have been less of the more-valuable precious metal in all the coins of that more-valuable metal (like gold in 1834). But Congress understandably didn't want to 'mess' with the dollar of silver, the standard by which everything else of value was meant to be measured (which is why they should have just re-adjusted gold back to its 1792 rates and weights). It is proper that the standard shouldn't be changed; that is, after all, the very definition of a 'standard'. Congress shouldn't have either touched any of the small silver coins in 1853 (they may have thought they were following the lesson of the 1834 Congress [taking out some of the more-valuable metal from new coins of the same value]). But importantly, the 1853 Congress didn't provide any exchange mechanism to value the old heavier silver coins as done with gold in 1834. An exchange mechanism couldn't be provided because the silver dollar wasn't also changed (they couldn't thus make two old half-dollars worth more than the unchanged silver dollar, as the weight would be the same). Section 4. February 21, 1853 Coinage Act 173
In 1837, silver coins had been made tenders at their face-value, rather than in proportion to their weight (but they were still proportionallyweighted). Thus, when the fractional silver coins were lightened in 1853 but kept their value, no existing laws seemed to be directly violated (since there was no express statement in the 1837 law that coins light of weight would be valued only according to their proportional weight). Also conspicuously absent within the 1853 act was no weight tolerances were listed like there actually had been provided in the 1837 act (obviously the new silver coins didn't reach their old minimum weight tolerances). Of additional impact was that Congress also stated that:
"no deposits of coinage into the half dollar, quarter dollar, dime, and half dime, shall hereafter be received, other than those made by the Treasurer of the Mint, as authorized, and on account of the United States."21
Such factors should have made an impression, providing the 1853 Congress sufficient clues something was amiss, but didn't seem to. But the biggest clue that things were radically different from 1834 was the found in Section 3 of the 1853 act (which provides the reason private citizens could no longer have coins struck from their own deposits of silver) which stated:
"That…the Treasurer of the Mint…shall charge himself with the gain arising from the coinage of such bullion into coins of a nominal value exceeding the intrinsic value thereof, and shall be credited with the difference between the intrinsic value and the price paid for said bullion, and with the expense of distributing said coins…The balance to his credit, or the profit of said coinage, shall be…transferred to the account of the Treasurer of the United States."22
Obviously, even if Congress may have not understood fully what was going on in the 1853 act, whoever wrote it clearly understood the ramifications involved.
21. 1853, February 21; Chapter 79, Section 5. (10 Stat. 160)
See also: Monetary Laws, Volume II, Appendix D, Page 112, 2012.
www.PatriotCorps.org. 22. Ibid., Section 3.
Chapter 7. State Restorative Action
This 1853 act provides the first evidence of someone intentionally messing with America's money without proper concern for its inevitable consequences — that there was now seigniorage 'profit' from the coinage of silver, that the 'nominal value' of the small silver coins would now 'exceed' their 'intrinsic value', which necessitated growing balances be 'transferred to the Treasurer' on occasion. There were ample and escalating indicators in the short, two-page act which should have warned anyone paying even the least amount of attention that further examination of their current silver coin shortage was warranted before any action was taken. Even if Congress didn't yet know what to do, the majority of members should still have understood well enough what they should not do. By changing only some of the silver coins in 1853, Congress violated the fundamental rule of our sound monetary policy, of value being based strictly upon proportional weight at given purities of gold and silver. Our money no longer contained strictly-proportional weights of silver, but value was now declared arbitrarily as if members of Congress could create value and wealth by speaking them into existence, as if they were God.
Section 5a. States Declarations of Tender
Once gold was effectively removed from circulation in 1933, the parity between gold and silver no longer affected most Americans, at least directly. With silver removed from coinage in 1965 and gold from international payments in 1971, parity is no longer intentionally maintained. The Constitution clearly acknowledges that the States may only declare "gold and silver Coin" a tender. But a strict and literal reading of this pertinent clause does not read gold or silver; it doesn't read that the States may declare one of the metals a tender without the other. It is important to look further into this power, to see if any clear path may be developed to restore monetary sanity out of the States' ability to declare gold and silver coin a tender. 175
But several factors come into play, the first being: May the States regulate the value of coins they may make a tender within their borders?
Section 6a. May States Regulate the Value of Money?
Article I, Section 8, Clause 5 of the Constitution expressly grants Congress the power to coin money and regulate the value thereof. Article I, Section 10, Clause 1 of the Constitution also expressly prohibits the States from coining money, emitting bills of credit, and making anything but gold and silver coin a tender in payment of debts. But the latter clause is silent on the matter of whether States may (also) or even indirectly regulate the value of money. Under the principle of reserved State powers, it could appear that since this power to regulate the value of money wasn't expressly prohibited like the power to coin money, that the States would retain the ability to regulate the value of money within their borders. But before coming to this conclusion, the principle of reserved powers should be better-examined. Our Tenth Amendment reads:
"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."
Obviously the powers to coin money and also to regulate the value of coined money are clearly and expressly "delegated" to the United States in Article I, Section 8, Clause 5 of the Constitution. By literal reading of the 10th Amendment, since the power to regulate the value of coined money was delegated to the United States, then it wasn't reserved by and to the States. But the power "To coin Money" was also clearly delegated to the United States, but this power was also specifically prohibited to the States. Why this difference?
Chapter 7. State Restorative Action
Are the States doubly-prohibited the power to coin money? Or are there actually instances where the States may regulate the value of coined money (even if only indirectly) since they are not also expressly prohibited this power? The Constitution does not well-support or certainly widely-support the concept of concurrent powers, of powers being exercised simultaneously by both the United States and the several States. But even given that rule, both Congress and the States may independently levy direct taxes and indirect excises, etc., so this rule doesn't necessarily seem quite so hard and fast as one would first guess. Since there seems to be exceptions at least on occasion and in some instances, is the regulation of the value of money one of those instances? After all, before the 1792 coinage act, each State's money was regulated according to their own standards. There were five separate monetary standards used throughout the United States, dependent upon the State, all confusingly using the same terms.
Section 7. Varied Money in each State
In Jefferson's 1791 notes on the establishment of a money mint, he writes:
"But what is the pound? 1,547 grains of fine silver in Georgia, 1,289 grains in Virginia, Connecticut, Rhode Island, Massachusetts, and New Hampshire, 1,031 ¼ grains in Maryland, Delaware, Pennsylvania, and New Jersey, 966 ¾ grains in North Carolina and New York."23
Jefferson's notes inform us that the 'pound' monetary unit (divisible into 20 shillings [shillings divisible by 12 'pence'] [pence divisible by four 'farthings']) in each of the different States yet had different meanings.
23. See: Thomas Jefferson's Report in Monetary Laws, Volume II, Appendix C, Page 74 @ 75. 2012. www.PatriotCorps.org. South Carolina had yet another standard, which was much smaller than the rest.
Section 7. Varied Money in each State
As Jefferson didn't comment on the small South Carolina pound, it is appropriate to look at (Superintendent of Finance under the Articles of Confederation) Robert Morris' 1782 report where he noted that the Spanish milled dollar 'passed' or equaled:
"in Georgia at five shillings; in North Carolina and New York at eight shillings; in Virginia and four Eastern States at six shillings; in all other States, except South Carolina, at seven shillings and six pence; and in South Carolina at thirty-two shillings and six pence."24
Obviously before Congress acted upon the subject in 1792, the value of money was yet reckoned according to each State's own regulations leftover from the colonial era. Each colony had established their own money of account which often differed from other colonies and from Great Britain, even though they all had the same British king who ruled over his subjects with great authority. Neither did ratification of the Constitution void these separate standards.25 American history clearly shows that at least before Congress acted upon the matter, separate monetary standards in the separate States are not contrary to the Constitution. But it was these variegated monetary standards and the resultant source of confusion and continuous use of exchange rates the framers of the Constitution explicitly sought to relieve with a uniform coinage of money. And yet the States reserved their individual power to declare gold and silver coin a tender in payment of debts for a reason; that this power wasn't likewise simply delegated to Congress with the other monetary powers cannot be ignored.
24. See: Robert Morris' 1782 Report in Monetary Laws, Volume II, Appendix C, Page 61 @ 64. 2012. www.PatriotCorps.org. 25. Jefferson's report on a money mint was written in 1791 and reflected the current status of those State monetary units (government under the Constitution began in 1789).
Chapter 7. State Restorative Action
When we examined the monetary powers of Congress, we saw that if they have any ability whatsoever to declare a tender, it would simply be an implied means incident to the lesser power to regulate the value of money. But while members of Congress only have expressly-delegated powers and only those means which are both necessary and proper to achieve authorized ends, it is the States which hold the reserved powers of government (with the American people holding all reserved powers not properly delegated to any American government). Surely then, the greater power to declare gold and silver coins a tender would reach to the lesser power to regulate the value of those coins, at least within those same values as declared by Congress. An even more appropriate argument however is that one cannot actually 'make' anything a 'tender' without formally declaring its legal value and therefore without in some manner regulating (making regular) its value. But the argument used by government to declare as tender things other than gold and silver coin is that their declaration of tender does not simply acknowledge value (which value admittedly does not exist [in their paper money] apart from their declaration), but their declaration of tender is the actual "making" of something at law which had no legal value apart from this formal declaration to now have a legal value, a legal tender value. If that is what the declaration of tender is for the federal government where no express power exists, then it cannot consistently mean something far less for the States which the U.S. Constitution readily acknowledges may declare as tender gold and silver coin. Though Congress regulates the value of coins they strike (and the American value of foreign coins they make current), it wouldn't be until a State 'made' the gold and silver coins legal 'tender' at their declared values that those coins were actually ever properly specified a legal tender value. It is the formal 'making' of a 'thing' a 'tender' that gives that thing its legal value, its legal tender value (versus only a market value).
Section 7. Varied Money in each State
There cannot be any constitutional transgression for a State to declare as tender within its borders the gold and silver coins struck by Congress and regulated in their proper weight, purity and value. The States formally make-regular the value of gold and silver coins they declare a tender (which is undoubtedly why they are not also prohibited the power to regulate the value of coins [that they indirectly affect the regulation of value, even if they cannot perhaps directly regulate it]). With the express constitutional power for States to declare gold and silver coins a tender for payment of debts, there can be no constitutional infirmity for any State to declare as tender the dollar as last properly designated by Congress for the whole United States of America, which is 25.8 grains of standard gold 9/10ths-fine (23.22 grains of fine gold).
Section 6b. May States Regulate the Value of Money?
This brings us back to the question of whether a State may individually regulate the value of money they declare a tender. If the States do not have the separate power, then they must adhere to the last proper values set by Congress. The last major actions of Congress regarding the fractional silver coins were in 1873 as they were modified slightly from their 1853 weights in grains to new metric units in grams, limited in legal tender to five dollars. The silver dollar of 371.25 grains of fine silver re-established in 1878 was restored to full legal tender status except as stipulated in contract. By private contract, silver as a legal tender may be altogether excluded from legal tender. Without express mention in any contract, however, then silver dollars are a full legal tender value, by default. Those silver dollars of 371.25 grains of pure silver, with 23.22 grains of pure gold in the gold dollar, equate one part gold to nearly 16 parts silver, which is approximately four times higher silver value than currently found in the market. 180 Chapter 7. State Restorative Action
It would be wholly improper for any law to hold silver legally at four times its current market value; no just and valid law may lawfully cause such injustice. If no State may change the legal value of the silver dollar from its last value set by Congress (since 1900, the gold dollar is our formal standard unit of value; thus it should remain fixed while silver should be set to vary with any differences in parity) then this path for State restorative action looks foreclosed, unless a State may make gold or silver a tender. A State must certainly be able to declare gold and silver coin a tender in payment of debts within its borders at the proper value rates last set by Congress or the reservation of the tender would be wholly superfluous (and the holding of any constitutional phrase as superfluous is a dangerous path to take, fraught with great difficulties [omnipotence]). Whether the States retain any authority to declare tender at different rates or whether a State may declare only one metal a tender (without the other) remain another story. Historical usage of different monetary rates in the different States even under the Constitution adds some credence to the theory that the States retain the reserved power to declare the gold and silver coins a tender even at rates of their own choosing (at least the secondary metal). That reason would be consistent with and actually provide a good basis for leaving the declarations of legal tender of gold and silver coins with each State, rather than delegated to Congress for a necessarily-unified plan. Perhaps the framers of the Constitution left the power with the States to declare legal tender (at their own State-determined rates) to protect the States exactly from such a situation as we today currently face, to always allow a State to protect its citizens within the State's capabilities. Of course, due to Article I, Section 10, Clause 1, no State may set their own rates to impair the obligation of contracts (effectively allowing its citizens bankruptcy protection without going through federal bankruptcy). As earlier covered, the Supreme Court deceptively alluded to the 1834 parity change in the gold coins as monetary debasement. Section 6b. May States Regulate the Value of Money? 181
True monetary debasement makes the value of money paid by debtors to creditors of less value than originally contracted (even if the number of dollars paid back are correct), by paying back debts in cheaper dollars. That people widely desire this 'little bit of larceny' explains much of the allure of paper dollars (by debtors). In accordance with Gresham's Law, debtors strive to pay their debts in the cheapest dollars available and save for themselves the money which best retains its purchasing power (any time different forms have different rates). The constitutional clauses involving bankruptcy (Article I, Section 8, Clause 4) and impairment of contracts reflect the desire to level the playing field (not allowing debtors any opportunity to pay off creditors other than the value they are rightfully owed). No State could set different rates for gold and silver coin which would impair any obligation of contracts, effectively relieving debts without going through the bankruptcy courts. While a State would undoubtedly have to correlate their legal tender values with those established by Congress anytime Congress kept their rates current with the market, what about if Congress long ignored the matter? What if, as we have now, the rates last set by Congress were wholly obsolete, not regulated for well over a century? The framers may well have left the power to declare gold and silver coin a tender in payment of debts to protect the States from improper action or inaction by Congress. Under Article I, Section 8, Clause 6 of the U.S. Constitution, one sees that members of Congress have the power to provide for the punishment of counterfeiting the "current Coin" of the United States. A literal reading of this clause does not even reach providing for punishment of counterfeiting obsolete coin. With the new 258-grain nine-tenths-fine $10 gold eagle in 1834, the 1792-era 270-grain (.91666-fine) gold $10 eagles (and half- and quartereagles) became obsolete, no longer 'current' as money (at old rates). 182 Chapter 7. State Restorative Action
While 'current' would likely mean no longer current legally, can it also mean no longer current by the market? There is no question that the rates last set by Congress between gold and silver in 1900 are no longer current in the market today. Would such inaction by Congress allow a State which is yet constitutionally empowered to make gold and silver coin a tender for payment of debts thereby allow the State to declare the gold dollar legal tender at 25.8 grains of gold nine-tenths-fine and then make the silver dollar a tender at a dollar at their own determined weight (approximately four times heavier than the old 371.25 grains of pure silver)? Leaving the power to declare a legal tender with the States was surely meant for some form of protection for the States which wholly gave up their power to coin their own money (and emit their own bills of credit). Should any State now attempt such action, surely they would find themselves in court to determine if their powers reached that far. This author is not completely convinced their powers do not reach that far, at least given the default of Congress to coin and continue to regulate our proper money of gold and silver coin. Undoubtedly the framers of the Constitution figured the power to declare a tender was best left with the States, where the power had always before been exercised, where it would best protect the State and her citizens.
Section 8. Gold and Silver Coin
If States must declare both gold and silver coin a tender, at only the last rates set by Congress, then this potential pathway for the States to help clear a path back to constitutional money is closed. For the strict constructionist, there is simply no easy way to get around the Constitution's wording "gold and silver Coin" unless a State may unilaterally declare their own values at least for the secondary metal. With unilateral power, a State could establish a gold coin standard and at least fix parity with silver for only short periods of time (at market rates). Section 8. Gold and Silver Coin 183
Better would it be for a State to declare gold coin a tender (at 25.8 grains gold nine-tenths-fine) and never even mention silver. But the Constitution doesn't seem to allow this (unless "and" may also mean "or"). But even if only gold were declared a tender within a State, that still wouldn't really do us much good unless there was also a functioning electronic gold exchange already set up which would allow precise payments in the metal below the smallest coin size. Thus, it still takes the free market to resolve our monetary issues. State action using measures of compulsion don't really resolve anything. This author just doesn't see any true way for State action to resolve our monetary issues.
Section 9. State of Utah Legal Tender Legislation
The State of Utah has been the first State to recently (2011) enact new legislation aimed to support gold and silver coin as legal tender.26 Unfortunately, there is not a whole lot of 'meat' in the act. While Section 59-1-1502 specifies in (1) that "specie legal tender" (gold or silver coin that is issued by the United States) "is legal tender in the state" subsection (2) then provides that "Except as expressly provided by contract, a person may not compel any other person to tender or accept specie legal tender." In other words, gold and silver coin may be a tender in any transaction when both parties specifically allow it; which isn't much of a tender. The federal government already specifies that all of its coins and currencies are legal tender, and thus any person may tender their gold or silver coin struck or emitted by the United States (at their face value). This author is sure any number of people or businesses would be happy to accept a 232.2-grain fine gold eagle at its ten-dollar face value.
26. Utah Legal Tender Act, 2011 (Utah Code, Title 59, Chapter 1, Sections 1501-1506).
Chapter 7. State Restorative Action
The primary benefit of the Utah act is really to exempt from sales and use tax any "exchange of gold and silver coin issued by the federal government" when purchased with another form of legal tender and to provide a "nonrefundable credit" for any capital gains incurred from the exchange of gold and silver coin with any other form of legal tender.
Section 10. Market-Rate Value Legal Tender Legislation
This author has heard a number of people casually recommend that gold and silver coin should be valued at market rates, i.e., in the number of paper dollars that it takes to buy them. There aren't many suggestions which would be more damaging to gold than this 'recommendation'. At no times in our history was the specie dollar ever artificially inflated in value to match any paper currencies' ever-changing rate. The Continental Currency was our first national attempt at paper currency, which notes were always valued at their specie-equivalent rate. When Congress under the Constitution finally authorized paying off that currency, Congress discounted it to an authorized specie value, of one hundred dollars of paper currency for one dollar in specie. The same mechanism for valuing the early State paper currency emissions during the War of Independence occurred as the State paper currencies were always discounted to their specie equivalent rates. All the paper currency issuances by State banks after the States united together under the Constitution were always discounted to their specie rates; national magazines circulated which did nothing but rate paper's equivalent worth to our coinage standards. When our gold coins varied in their value, their worth was adjusted in 1834 to their rates valued in the silver dollar, then the standard unit of value. Even legal tender paper currencies which would be later redeemed in gold were still discounted to their gold value in dollars when that paper currency value dropped below par. Section 10. Market-Rate Value Legal Tender Legislation 185
The 1862 United States notes which were ultimately redeemed in gold coin and which were specifically declared a legal tender, were still nevertheless discounted to their specie value when they suffered depreciation, with the Supreme Court stating in the Hepburn case:
"There is a well-known law of currency…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…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…when…they sank in July, 1864, to the rate of two dollars and eighty-five cents for a dollar in gold."26
With $2.85 worth of legal tender U.S. notes valued at the equivalent rate of $1 in gold, each dollar-value of notes were discounted in worth to only 35 cents (showing well that invalid powers of government fall to the proper powers of the marketplace). Discounting paper currencies to their specie-equivalent rates has always been the proper legal manner for dealing with inevitable discrepancies. It is wholly improper to artificially inflate the value of the gold dollar to match the transitory value of the paper dollar. Not only does artificially inflating the value of the gold dollar wholly deny gold its rightful due as the standard unit of value, but such tactics effectively debase gold. Inflating the gold dollar to its paper equivalent (when paper currencies buy one troy ounce of gold at $1,350), effectively puts only .3555 grains of pure gold in every 'gold' dollar, instead of its rightful 23.22 grains of pure gold. Placing 1.5 cents worth of gold in every coined dollar hardly shows the healthy respect for gold which proponents of such recommendation undoubtedly strive toward.
26. Hepburn v. Griswold, 75 U.S. 603 @ 608 (1870).
Chapter 7. State Restorative Action
Any person who attempted to strike a gold dollar coin with only onethird of a grain of pure gold (instead of 23.22 grains) should be locked up in prison for counterfeiting. The true dollar of the United States of America remains a coin weighing 25.8 grains of gold .900-fine, for 23.22 grains of pure gold. That is our standard, and everything else must be discounted to its equivalent value (including silver coin).
Section 5b. State Declarations of Tender
State declarations of Legal Tender do not provide magical relief as mistakenly believed by many constitutional strict constructionists. Even when United States notes were declared paper currencies a legal tender in 1862, the Supreme Court acknowledged their market values nevertheless fell by two-thirds within two years (thus declarations of legal tender still didn't protect the paper currency declared a lawful money and a legal tender). Even though the Supreme Court upheld the power of Congress to emit legal tender paper currencies, the courts still found no way to prohibit gold clauses within contracts through the remainder of the 19th century and the first three decades of the 20th, which again effectively nullified much of the legal tender declarations of paper currency. Today, many stores refuse $50 and $100 bills, even though the notes inform them that they are "legal tender for all debts, public and private." Declarations of tender of certain things do not remove from the vast field of available options other things of value which any two people may agree upon in trade. Besides, even if a State could declare gold or silver coin a tender for payment of all debts in the State and prohibit all else, then they could not do so until there was a vast and ready supply of the chosen precious metal(s) were already interspersed widely with the public.
Section 5b. State Declarations of Tender
But the single biggest problem with a State singly declaring as legal tender gold coin is that even if that declaration was made (at 25.8 grains of gold 9/10ths-fine), the discount rate of paper dollars to their gold-dollar equivalent rate still needs to be agreed upon by both parties to any contract. And therein lies the rub of all such legal attempts to even reestablish legal tender gold coin while paper currencies rule the market – establishing the proper market-value of the paper dollar in terms of the gold dollar. No State has the power to mandate even a large private commodity exchange's spot price for a troy ounce of fine gold bullion as priced in U.S. dollars as the legal monetary standard to then establish the discount rate for all transactions in the State. Neither would any other single determinate work. That is the market's job, one transaction at a time, regarding use of gold in many different circumstances (perhaps even including instances where the price of gold is kept unrealistically low because not all [future's] contracts payable in gold are properly enforced [but improperly allowed to be paid instead in paper {without declaring default}]). It is important that when Congress established the rate for paying off the Continental Currency in 1790 that they only established the (fixed) rate at which Congress would accept that currency as it was paid into the treasury. While any State has authority to determine the discount rate they will accept for payments due to the State which are paid in gold dollars, the State does not have authority to determine what any two other parties may use between themselves. No State may properly fix the exchange rate between paper and gold dollars by which all participants in the State must transact business. It is important to simply provide a just and convenient alternative to U.S. dollars and let that market develop and grow over time.28
28. See Chapter 6, Section 10.
Chapter 7. State Restorative Action
Chapter 8. Federal Restorative Action Although many Americans expect a great deal out of Congress as far as leadership goes, this author does not, as history readily proves they have deceptively expanded their powers to benefit themselves and their cronies. In other words, this chapter will be really short —
Section 1. Get Out Of Our Way!
We'll pull members of Congress by their pierced nose rings as one would lead around any stubborn bull, as they snort and kick about and make much ado about nothing (but we'll lead them where they need to go nevertheless, simply because we must get there). We'll get where we need to go in spite of them, not because of them. They'll be busy protecting the status quo, protecting all the special interests who come and bow before them to be anointed with other people's money, because the latter won't work in the free market, but want special protections because they are such special people and real work is beneath them.
Section 1. Get Out Of Our Way!
Chapter 8. Federal Restorative Action
Chapter 9. Summation — Where to Go From Here The information in this book is designed to give liberty-minded Americans an option which has every chance of succeeding in its quest to Restore Liberty and Justice Once and For All, of restoring limited government under strict construction of the U.S. Constitution.
Section 1. Education
The first of two primary tactics recommended to implement the above objectives is education of the methods used by omnipotent government to act in all cases except where prohibited, with a power which has defied all previous attempts to limit it. The specific information in Dollars and nonCents follows the general outline provided in the brief, 15-page booklet, Drowning in Tyranny. This booklet, also by this author, is (like all other of the author's work), in the public domain and is freely available electronically online at www.PatriotCorps.org. As with the rest of this author's works, anyone may publish the works themselves (without compensation due the author) or anyone may take any or all of the work by this author as their own (see www.PatriotCorps.org for Word® documents, in addition to pdf's). The only stipulations are if one places one's own name as author, that at least the title of the book must also be changed and that no one may attempt to claim a copyright on their work directly based on this author's work which would in any way prevent anyone else (or this author) from distributing them. It is important that this information get widely distributed, not that this author receives credit or compensation. It is not fame or fortune which motivates this author, but Freedom! This information is safest when it is broadly-disseminated within the public domain such that any and every person may further circulate it.
Section 1. Education
Printing files for Drowning in Tyranny are also available online for printing two pages side-by-side and stapling the booklet together in half to hand out as paper copies.
Drowning in Tyranny is designed to provide understanding of the
general method used by government to ignore the spirit of the Constitution even as the government follows the Constitution's letter.
Dollars and nonCents then validates that general concept in a specific case, in the case involving our money (as arguably the greatest single example of government tyranny available today [since all Americans work for, invest, and purchase goods and services in U.S. dollars]).
This author highly recommends using Drowning in Tyranny to broadcast the general methods used by government to do as it does with impunity. Anyone wanting to know more information after reading Drowning in Tyranny may then look to Dollars and nonCents, or the easier-reading public domain fiction novels Bald Justice and Base Tyranny (also by the author and also freely available electronically online). Readers desiring even more information may also be pointed to Monetary Laws of the United States, The Beacon Spotlight, and The Beacon of Liberty. Any of the information posted at www.PatriotCorps.org may be reposted on anyone else's websites or in any other form, which rebroadcasting helps better-protect the information by disseminating it.
Section 2. Ratification of a Constitutional Amendment
The second tactic after education is working toward ratification of a new constitutional amendment, to explicitly hold that the power of Congress to act "in all Cases whatsoever" applies only to local laws incapable of being enforced nationwide. Although this simple amendment perhaps appears wholly impotent, nearly every single action of government beyond the spirit of the Constitution since 1791 and especially 1862 has followed this tactic. 192 Chapter 9. Summation — Where to Go From Here
The only single greater method to restore the spirit of the Constitution than the amendment recommended in Chapter 5 is ratification of an Amendment to repeal Article I, Section 8, Clause 17. However, this action of repealing any wording in the Constitution would be of far greater impact than simply offering a clarifying amendment to explain how one of the powers already delegated is to be interpreted. Repeal would obviously raise serious red flags of concern throughout America; therefore repeal should not be broached unless the more conservative approach proves ineffective.
Section 3. The Grain of Pure Gold
Another significant tactic towards restoration of a free America involves working to separate ourselves from our current debt-based legal tender currency. This involves establishing the grain of pure gold as a market-based unit of account. The first step to this program logically would be for individual business to begin accepting alternative payment in grains of gold (accepting paper dollars for any residual values less than the smallest gold coin [until electronic exchanges develop]). Next would be striking of gold coins (or bars) in 25-grain pure gold coins, along with 50-grain, 100-grain, 250-grain, and 500-grain coins. As no known mint currently strikes such bars or coin anywhere in the world, every time any reader wants to buy gold, be sure to start creating a demand for such grain-denominated coins and specifically ask for them. If the seller looks bewildered, then fill him in on your reasons and point him to Dollars and nonCents. If the market starts demanding gold bars or coins denominated in grains, undoubtedly and at some point they may 'magically' appear!
Section 3. The Grain of Pure Gold
Section 4. Establishing an Electronic Gold Exchange
Establishing a gold-warehouse which tracks its clients' gold in the number of grains of pure gold is a more-difficult task than simply coining gold bars or coins in specific number of grains, as it will take someone with very deep pockets (which rules out this author) to implement it. Our current legal monopoly which currently issues our debt-based currency must be broken, before it breaks us. With federal and State regulations already in place for electronic gold, it appears just a matter of time before such an exchange is set up and functioning. Even if these exchanges use a gram as their unit, it will be important to distance ourselves as far as possible from the destabilizing paper dollar. Even if every other law contrary to the spirit of our Constitution somehow magically disappeared overnight, if only the Federal Reserve System with their debt-based currency notes remained, this compoundinterest monetary system alone is sufficient to bring our country to economic ruin (that all those other laws contrary to the spirit of the Constitution yet remain only gets us there sooner).
Section 5. Other Efforts
Education was listed first in this series of recommendations because knowledge of understanding past wrongs empowers individuals to effect great restorative change. With a correct understanding of the actual problems which face America, one may stop wasting so much time and effort chasing irrelevant symptoms and immaterial 'cures' (like electing the 'right' person to office or legislative seat). Anyone with strong education or communication skills may use their talents to directly help restore an America according to the fundamental principles of her founding.
Chapter 9. Summation — Where to Go From Here
This author has had very little success educating Americans to date and thus would gladly have others use his information to come up with better tools to properly reach far greater numbers of people. Especially needed are works taking the information herein and digesting it, providing it in easier-to-understand language (this author purposefully writes to the most demanding of readers, to prove the information correct). While this author is confident he is on the right track technically, he knows that he is currently on the wrong track to sufficiently influence others to bring about real, constructive and necessary change (so if anyone out there is good at teaching or marketing, please get to work doing so). May God again bless these United States of America; Land of the Free and Home of the Brave! Readers desiring additional information on this topic beyond that found in Dollars and nonCents may find the following public domain works by Matt Erickson freely-available electronically online at www.PatriotCorps.org, www.FoundationForLiberty.org, www.Archive.org, and www.Scribd.com/matt_erickson_6: • • • •
Drowning in Tyranny Bald Justice Base Tyranny Monetary Laws of the United States
Volume I: Narrative Volume II: Appendix (listing all America's monetary laws)
• •
The Beacon Spotlight The Beacon of Liberty
Section 5. Other Efforts
The End
About the Author
Matt Erickson is a truck driver and lives in Vancouver, Washington with his wife, Pam. He has two step-kids and seven grandchildren. He is also the author of Drowning in Tyranny, Monetary Laws of the United States, Bald Justice, Base Tyranny, The Beacon of Liberty and The
Beacon Spotlight.
Erickson is the founder and president of the Foundation For Liberty (www.FoundationForLiberty.org), a 501(c)(3) non-profit, tax-exempt organization (which is prohibited by law from recommending legislation [and thus Erickson also is the founder of Patriot Corps, which pursues such matters as herein recommended]).
Chapter 9. Summation — Where to Go From Here
For increasing numbers of liberty-minded Americans, these United States of America today stand uncomfortably close to the perilous edge which descends into absolute tyranny. But America needn't fall into that abyss; we must simply understand precisely how government has creatively expanded beyond the spirit of the Constitution to be able to pull her back within it. Dollars and nonCents discloses how our money of gold and silver coin was cunningly removed from circulation and deceptively substituted with a destabilizing legal tender paper currency. Understanding how the federal government acts in this particular case allows us to understand how it acts "in all Cases whatsoever," in all cases except where it is expressly prohibited, with a power which has defied all attempts to limit it. With this knowledge, a blueprint may then be formed to restore liberty and justice once and for all, with limited government again operating under strict construction of the whole Constitution.
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