Chapter IV
THE FEDERAL RESERVE BANK

The Federal Reserve Bank is a privately owned,
government created, fractional reserve central bank
which has been unconstitutionally granted
the money-issuing power reserved for Congress by the Constitution.
— AUTHOR

In December, 1913, the money pool was ready for its great coup d’etat.  After years of planning, currency contractions, money manipulations, contrived panics and wars, the ax was about to fall on the unsuspecting heads of the American public.  In order to sell Congress on the idea of a central bank, its proponents claimed it would accomplish the following purposes :  (1) stabilize the dollar, (2) prevent panics and depressions, (3) end bank failures, and (4) help farmers and business.  The provision for stabilization of the dollar was killed in committee, however, as the last thing the money pool wanted was a stable domestic dollar.  They prefer a flexible currency which could be expanded or contracted at will—by them.  This expansion or contraction of the economy is achieved through the issuance of great quantities of money (inflation) or contraction of currency (deflation).

The bill, officially known as the Owens-Glass Bill was passed by the House on December 22 and on December 23, 1913 by the Senate.  The Congressional Record of December 22, 1913 (H1464) indicates that the voting was as follows :  209 yeas, 60 nays and 76 not voting.  Senate voting provided 43 in favor of the measure, 25 against and 27 not voting.  (Congressional Record, December 23, 1913 [S1488]).  In view of the proximity to Christmas it is surprising that so many members of Congress had remained in Washington to vote for this betrayal of the American people.  But we must remember that the groundwork had been carefully lain and key people had been groomed for leadership to promote the sinister aims of the internationalists.

There had been sufficient comment and debate in Congress regarding the measure to acquaint most of those voting with its contents, had anyone bothered to listen.  On the day that the House approved the measure, Mr. Charles Lindberg, Sr. remarked that “the money trust caused the 1907 panic and thereby forced Congress to create a National Monetary Commission.”  He further stated in the same remarks that “the Money Trust would cause a money stringency in order to force the bill (Federal Reserve Act) through Congress ... This bill is passed by Congress as a Christmas present to The Money Trust.” (H1445, Dec. 22, 1913). But the voting proceeded with partisan bias and few bothered to worry about the impact that this evil monopoly would have on the lives of the citizens of the nation they had been elected to serve.

The Federal Reserve System consists of twelve regional banks located in various sections of the country.  Altogether these twelve banks have twenty four branches.  It is governed by the Board of Governors whose chairman is appointed by the President of the United States.  The regional Federal Reserve Banks are operated by nine directors, six of them selected from commercial banks within the area served.  The Open Market Committee consists of nineteen members, seven being members of the Federal Reserve Board who are appointed by the President and ratified by the Senate.  The remaining members are selected from the twelve Federal Reserve Banks.

The Open Market Committee is probably one of the most powerful economic factors in our nation.  This small group meets every two to three weeks in Washington to decide financial policy for the nation.  Although all of the regional bank presidents may participate in discussions, only five of them may vote.  When the Federal Reserve Act was first passed by Congress they probably expected the rediscounting procedure to be their most important weapon.  But the Open Market Committee has become its most important tool.  By extending billions of dollars to their selected banks they are able to control the open discount market in New York and also manipulate the price of the stocks and bonds on the other exchanges.  The functions of the Open Market Committee are as follows :

1.  Regulate rediscount rates (e.g. reserves required to be held by member banks.)
2.  Control of interest rates to be charged by member banks.
3.  Regulate stock margin requirements.  (It is the belief of this writer that periods of low margins give the insiders the opportunity to accumulate stocks and when margin rates rise to over 60 or 70 per cent, the pool has already unloaded its stocks.)

According to the late Congressman McFadden, former Chairman of the House Committee on Banking and Currency :  “The sack of these United States by the Fed is the greatest crime in history.”  He further testified that “the Fed has usurped the Government.”  Because of the usurpations of this private monster, the Constitutional guarantees of the American people are being swept away and their property is being confiscated without due process of law.

New York acts as a single district, while the four remaining districts elect the remaining four members.  Thus it can be seen that the financial capital of the world, New York, will always have a man on the Board of Governors.^[1]

The function of the Open Market Committee is summed up in the opening paragraph of The Federal Reserve and the American Dollar, Problems and Policies:

The money of the United States is managed by the Board of Governors of the Federal Reserve System and the Federal Open Market Committee ...^[2]

Thus this small group of men have the control of our nation’s money and economy in their hands.  They also preside over the purchase and sale of government securities.  With these controls the Fed has a virtual monopoly over our fiscal life.  “In the statute creating the Federal Reserve System, and as subsequently amended, there is no limitation on its actions, and the result of the delegation of power has been the abject abandonment of governmental control over the power to create money and credit.”^[3]  Every stock market operator keeps one eye on the policies of the Fed in order to determine which way the economic winds are blowing.  To show how important these powers are to the stock market, an article which appeared in Barron’s May 6, 1968 issue entitled Market Pitfall, discusses the “Three-Step-and-Stumble rule developed by the well-known market analyst, Mr. Edson Gould.  In this article he provides a method of forecasting the direction which the market will take based on the activities of the Open Market Committee.  The rule states :  “Whenever three successive rises occur in any one of the three rates set by the monetary authorities (the discount rate, reserve requirements, stock margin requirements) investors should beware—for sometime thereafter the market is likely to suffer a substantial, perhaps serious, setback.”  Here is what a well-known market investment service which serves brokers primarily has to say :  “What part the Fed may play in manipulating the psychological climate of finance we do not know.”^[4]  When the money supply is withdrawn from the economy by fiat of the Open Market Committee the economy cannot function efficiently.  These maneuvers are designed to bring about either a setback in stock prices and business activities, or an artificial inflation of prices by pumping money into the economy.  We are being manipulated in a yoyo-like fashion by these private banking interests who care nothing for the welfare of the nation.  With such concentrated power in so few hands, market rallies and crashes can be planned with precision.  1929 is a case in point.  Mr. Curtis B. Dall in his book, F.D.R., My Exploited Father-in-Law, states :  “Probably the actual date (October 24, 1929) was accidental, though the month was evidently selected for the sudden withdrawal of the normal supply of credit.  My guess is that the `signal’ came from abroad.”^[5]  He further adds “the operation was carried out with ruthless finesse and vigor.”  Mr. Wickliffe B. Vennard, Sr. comments on the origins of the 1929 crash as follows :  “The Slump.  No unavoidable accident, but a deliberately organized plot, this might be termed the financial assassination of millions.  Those who survived did so only through large-scale borrowing, thus placing industry and agriculture further in pawn to the financiers.”^[6]  Charles A. Lindberg, Sr. observed :  “Under the Federal Reserve Act panics are scientifically created;  the present panic (1929) is the first scientifically created one, worked out as we figure a mathematical problem.”  In 1933 there were over 12 million unemployed.  The cause of this panic was simply a lack of money.  Had our Congress voted to abolish the Federal Reserve Bank then and create a sound money system, it is estimated that the depression would not have lasted for more than three to four months.

Prior to 1932 the Federal Reserve Notes were backed by sixty per cent gold and forty per cent commercial paper.  But during the first part of the Roosevelt administration, the ratio was changed to forty per cent gold and sixty per cent government bonds.  After the United States went off the gold standard, the gold backing was entirely removed and gold certificates were quietly withdrawn from circulation.  This mw permitted the money pool to issue their Federal Reserve Notes with 100 per cent backing in the form of government bonds.  It increased their profits and put the American taxpayer in increasing financial jeopardy to them.  Gradually the banking cartel was able to control the selection of the Open Market Committee so that the Reserve Gold Certificates could be used to control the gold in Ft. Knox.  Through manipulation of bookkeeping entries, they obtained control of this gold.  Another effect of this act was to release the Federal Reserve Bank from its obligation to redeem their notes in gold for American citizens.  The gold which Americans believed was owned by the government was in reality turned over to the Federal Reserve Bank after passage of the act, and our government acted merely as its custodian.  We must remember, however, that gold in a vault does not draw interest, and the greedy bankers decided to sell the bulk of this metal in foreign markets at prices above our pegged price of $35.00 per ounce.  Since it is unlawful for Americans to own gold (under most circumstances), foreign interests have been given a bonanza to profit from at our expense.

The privately owned Federal Reserve Bank now has a virtual monopoly on the economy of our nation because of their power to issue the currency for the people of the United States.  By law, Federal Reserve Notes are obligations of the United States government.  12USC 411 reads :  “Federal Reserve Notes to be issued at the discretion of the Board of Governors of the Federal Reserve System ... The said notes shall be obligations of the United States and ... They shall be redeemable in lawful money on demand.” (December 23, 1913).  This act unconstitutionally delegated the power to issue our money to this monopolistic cartel and is the culminating achievement of over 100 years of intrigue and plotting.

Our money gets into circulation as follows.  When the government needs money for current operating expenses, a request is sent to the Federal Reserve Bank stating the amount needed.  Authorization to issue the notes is sent to the Treasury Department’s Bureau of Printing and Engraving which in turn prints bonds (I.O.U.s) in the amount requested.  These bonds are then exchanged for an equivalent amount in Federal Reserve Notes.  The government is credited with the amount of the deposited bonds and now may draw checks against the entry.  When the new money is ready, it is delivered by the Treasury Department to the Federal Reserve Banks which in turn pays it out to commercial banks.  The government pays interest to the bank for these bonds which amounts to billions of dollars per year.  It is now estimated that our yearly interest tab (1970) is about 19 billion dollars.

LICENSE TO STEAL

How would you like to have the right to step into our Bureau of Engraving, authorize the printing of a $50,000 bill, walk out with it, and leave a tab of two-thirds of a cent.

Fantastic, isn’t it ?  But that is just the beginning.  Now you step into the Treasury Department and purchase a $50,000 interest-bearing U.S. Bond with said bill.  This is the manner by which Treasury finances the budget.  In most instances the FED merely credits Government account, and hands Government a book of check-book currency thereby saving the cost of printing the Federal Reserve Notes $.0084 per Note, regardless of denomination.

Then deposit the Bond with the Comptroller of Currency and he will give you $50,000 currency.  Remember, you retain ownership of the Bond, and the interest from the Bond is payable to you.

Now then, you hoard the $50.000 currency in your bank vault as reserve for the creation of $1,500,000 of check-book currency which you can lend to John Q. Public at six per cent interest, under their Fractional Reserve System.

The bond pays four per cent annual interest and matures in thirty years, at which time the FED will receive a second cash payment of $50,000 from Treasury.

Now remember by law all Federal Reserve Notes are obligations of the Federal Government.

To summarize the transaction, Treasury has received $50,000 cash, whereas the Federal Reserve has received and will receive within thirty years :

$50,000 from the Bureau of Engraving
$50,000 from Treasury when the bond matured
$60,000 interest on the bond
$2,700,000 interest on loans to John Q. Public
$2,860,000 total.^[7]

Now let us follow this money and see where it goes.  The Federal Reserve Bank has the bond and the government has the money.  Mr. Citizen wants to borrow $1,000 to purchase a new car, so he goes to a commercial bank to borrow the money.  In cases where he has an account with the bank, he merely receives a bookkeeping credit for the amount borrowed and a credit entry will be made to his account.  He signs a note and receives a check in the amount of $1,000 less interest which is usually deducted from the amount.  Also, he may be required to put up collateral in the form of stocks, bonds or other chattels.  This bank has created a credit out of nothing.  It may now lend $900 to a second customer.  Second customer creditor now deposits the $900 in his bank and this bank in turn may lend out ninety per cent of this amount to a third customer—keeping the ten per cent reserve requirement intact.  If, however, the reserve requirements are raised, e.g. to fifteen per cent, the bank will find itself short of reserves and will have to :  (1) curtail further loans, (2) call in loans, (3) sell some of its commercial paper to the member Federal Reserve Bank to comply with the new reserve requirements.  This results in a contraction of currency—lately called a credit crunch.  Translated, it merely means a shortage of cash.  This has been arbitrarily created by fiat of the Open Market Committee usually under the guise of some flowery phrases such as “cooling off the economy” or “controlling inflation.”  Let us assume a ten per cent reserve requirement :

1st loan 90% of $1,000 is $900
2nd loan 90% of $ 900 is $810
3rd loan 90% of $ 810 is $729

We can now see how this method can be multiplied into the billions of dollars which represents the creation of money out of nothing.  If we had an honest money system its issuance would be regulated by a relationship to a standard such as the Gross National Product or Consumer’s Price Index.  This method of creating money out of nothing is causing inflation, impoverishing the wealthiest nation on earth and will end in the creditor (Federal Reserve Bank) confiscating all of the assets of the nation to pay off its counterfeit debts.  When the debt is over the trillion mark we must ask ourselves what is behind the collateral which the government pledged when it issued government bonds in exchange for the Federal Reserve Notes now in circulation.  Banks should not be in the business of creating money—their business is to lend money.

If, however, the Federal Reserve Bank needs currency, it deposits United States Bonds with the Treasury and they draw interest for the bank.  The bank does not pay interest to the government for the currency.  These bonds are merely used as collateral and ownership is retained by the bank until maturity.  It also buys bonds on the open market through the Open Market Committee.  Any of the twelve Federal Reserve Banks can get currency in this manner.  The Federal Reserve Bank is so powerful and independent that it pays no income tax on its profits and allows no independent audit of its books.

All national banks are members of the Federal Reserve System.  They are required to keep a specified amount of reserves in the Central Reserve Bank in their district.  If the reserves of a member bank get too low, it will borrow from the Federal Reserve Bank or sell government bonds or commercial paper.  Bankers must “cooperate” with the Fed or they may suddenly find that the collateral which they put up is not acceptable.  This is one of the methods used by the money elite to keep the commercial banks “in line.”

The sale of government bonds is a very profitable one for the Reserve Banks.  It has been estimated that the Federal Reserve Bank receives roughly 75 cents interest out of every dollar in circulation from the bonds it holds.  This gives the Federal Reserve Bank a virtual mortgage on the wealth of the entire nation.  If money were wealth, then the unconstitutional and fraudulent notes issued by the Federal Reserve Bank would be similar to their issuing wealth.  However, these notes are not wealth, they are not even money.  They represent an indebtedness which was acquired when the government issued a bond to the Fed in exchange for Federal Reserve Notes.  Can anyone justify why a citizen who has earned a certain amount of money per week should suddenly be in debt to the private Federal Reserve Bank and pay it interest for being allowed to use money ?  We have been deluged with propaganda that the national debt is meaningless because, “we owe it to ourselves.”  We don’t owe the debt to ourselves we owe it to the bondholders.  Our skyrocketing debt now stands at over $380 billion.  But that isn’t the end of the debt picture.  We have items called contingent liabilities which generally are not included in the debt category.  Other billions are concealed in such categories as pension funds, guaranteed loan liabilities and international liabilities.  Additionally, the higher the national debt, the more interest the Reserve Banks get.  Bondholders may be banks, insurance companies, pension funds, investment trusts or even foundations which are required by law to hold a certain percentage of their assets in government bonds.  A huge national debt is one of the methods now being used to undermine the financial health of our nation.  When the national government is bankrupt, the creditors will demand collateral from the people who are the producers of the wealth.  This will enable them to claim that in lieu of payment, they will confiscate all of the private property in the nation.  This pyramiding of debt is one of the primary policies of the Socialist money elite.  It is not unlikely that a debt of $2 trillion was never intended to be paid.  This debt is represented primarily by government bonds which are backed up by the citizens’ ability to pay taxes.  Collection of the collateral may take the form of confiscation of wealth through ever increased taxes or outright nationalization of real property.  It is probable that another 1929 type depression will be engineered.  At this point millions of Americans will have their entire savings wiped out and the Federal Reserve Bank and associates will declare themselves owners of the collateral which was pledged by “our government.”

When the Federal Reserve Bank was established, there were two classes of stock :  Class A and Class B. Member Federal Reserve Banks hold the Class B stock, but the identity of the Class A stockholders has never been revealed, even in attempted Congressional probes.  “It was the creation of this monster which has geared this nation to a war economy.”^[8]

After over 50 years of the Federal Reserve System, the abject failure of its stated purposes is apparent.  Panics and depressions were not prevented.  Instead a recurrence of panics and depressions continued :  as the farmers panic of 1920 and the crash of 1929.  Nor have bank failures been prevented.  In the period between 1929 and 1933 alone, over 9,000 banks failed.  Helping businessmen and farmers was represented as one of their goals.  Since our money has lost more than fifty per cent of its value, it has clearly not helped farmers, businessmen, or anyone else.  One of the leading Wall Street economists, Mr. J. Irving Weiss, in his August 30, 1968 Money and Credit Reports stated :  “No matter how the Federal Reserve twists and turns, it has become pretty sterile as an effective instrument for controlling money and credit along with interest rates.”

“During the early years of the Great Depression, 1929 to 1933, nearly forty per cent of the nation’s banks (more than 9,000) failed, and the losses to depositors were a major influence in deepening the business depression.  Loud were the lamentations when depositors lost $1.3 billion in bank failures during those three years.  During the last three decades, the losses to savers and holders of life insurance alone has been 460 times as great as the losses to depositors during the depression years.”^[9]

The United States has a medium of exchange which might be called circulating debts.  Federal Reserve Notes are not money :  they are obligations of the United States Government (12 U.S.C. 411).  “The said notes shall be obligations of the United States and shall be redeemable by the national and member banks and Federal Reserve Banks for all taxes, customs and other public dues.  They shall be redeemed in lawful money on demand ...”  If they are to be redeemed in lawful money, we must assume that they are not lawful money.  But we know that they aren’t money at all, but obligations or debts, backed up by the ability of the American taxpayer to continue to finance this crime.  “Not one dollar can be put into circulation without the consent and on terms fixed by these twelve money trusts.”^[10]

Every American should look through his wallet and see if he finds any United States Notes or Silver Certificates.  In all probability, only Federal Reserve Notes will be found.  United States Notes and Silver Certificates have been withdrawn from circulation.  United States Notes and Silver Certificates and coins are lawful money.  On older Federal Reserve Notes a three line inscription bearing the following words will be found :

This note is legal tender for all debts, public and private and is redeemable in lawful money at the U.S. Treasury or any Federal Reserve Bank.

This note is legal tender for all debts, public and private.

The reverse side of the one dollar Federal Reserve Note contains a seal which is actually the back side of the Great Seal of the United States.  Federal Reserve spokesmen define this seal as follows :

On the back of the Seal is an unfinished pyramid, a symbol of material strength and enduring foundation for future growth and a goal of perfection.  Above the pyramid is a “glory” or burst of light with an eye inside a triangle, referring to the eternal eye of God, and placing the spiritual above the material.  At the top and around the edge, in Latin, is the 13-letter motto, Annuit Coeptis, meaning “He Has Favored Our Undertakings.”  The base of the pyramid bears the numerals MDCCLXXVI or 1776, and below is the motto Novus Ordo Seclorum or “A New Order of the Ages.”^[11]

Although this pyramid has a Masonic significance, it had been used earlier by the Order of Illuminati which had been founded in 1776 by Adam Weishaupt, a turncoat priest.  This arch-criminal envisioned world control (one world government) with himself and followers in control.  The Roman numerals 1776 on the base of the pyramid represents this date and not the date of the Declaration of Independence.  The seeing eye is symbolic of the terrorist tactics used by the conspirators to force their brutal rule on the population.  Destruction of the Catholic Church is depicted by the pyramid.  “Annuit Coeptis” means our enterprise (conspiracy) has been crowned with success.^[12]  “Novus Ordo Seclorum” refers to the New Social Order.  The New Deal, Fair Deal, New Frontier, etc., are all variations of the same program that their puppet presidents have carried out for the conspiracy with such slave-like faithfulness.  This seal first appeared on our money in 1933.  Can we assume that the United States has been openly ruled by this Illuminist-Socialist gang since that time ?

A government should be the sole determining factor on what constitutes legal tender.  Instead we see a private corporation usurping government functions by manipulating Congress into declaring that their circulating debts constitute legal tender.  This unconstitutional power to acquire securities and the wealth of the nation through their usurious tactics is robbing the American people of all the fruits of their labor, and unless stopped, we will become serfs in a slave state.  “Our indebtedness to the private Federal Reserve System and member banks represents the most vicious form of human bondage servitude and slavery ever known to the human race.”^[13]

Instead of printing Federal Reserve Notes for the money mob, the government should print United States Notes which would be interest (debt) free and spend them into circulation.  “If the debts of a nation are good security on which to base its money, why is not the wealth better.”^[14]

The people must regain control of their money and its issuance.  Congress must be made to represent the people of the nation and not special interests.  We must begin to understand this great problem and demand that the Federal Reserve Banking Act be repealed and a constitutional money system be instituted.  Because of deliberate miseducation, most people haven’t the foggiest notion that the fundamental problems facing the world today are not those the press mentions—it is our immoral money system which has handed the world’s assets to this money elite that is the cause for our inflation, deteriorating moral standards and near bankruptcy as a nation.

Since the same forces which control our nation’s currency are also busy undermining those of every other nation, we see increasing chaos both in the domestic and international money markets.  With an honest and constitutional monetary system, a dollar would be worth a dollar, and inflation could never occur.  The value of money would remain stable year after year thus enabling people who plan for their retirement to know just what their dollar income will be worth at a given date.

Rising prices have been a vexing characteristic in the past few decades.  Increasing productive ability in industrial nations should have seen a decrease in prices.  However, just the reverse has happened due to the fact that money has been deliberately kept in short supply.  As the needs of commerce and industry rise, the supply of money should rise also, not the cost of obtaining it.  Money is an absolute necessity in commercial transactions and should never be scarce.  Yet at the present time, American business is scrambling for cash.  In the midst of the worst monetary inflation in history, money is scarce.  This is the paradoxical situation facing our country today.

One of the lesser known means by which the New York Federal Reserve Bank exploits Americans is to carry on a yearly multi-billion dollar foreign trade program with its favored customers.  It works like this :  The New York bank may extend credit to a foreign company.  When the favored foreign customer applies to the bank for credit, the Fed, through its Open Market Committee in New York receives the bill of the promoter itemizing the products they intend to sell.  The delivery date will be made for a later date, e.g. thirty, sixty or ninety days.  These bills are then stamped for future delivery.  This acceptance is then deposited with the Federal Reserve Bank as collateral for new currency.  This money may then be sent to the foreign customer to use in producing the item—or the money may even be sent in the form of gold.  This enables the Insiders to manufacture the item without putting up any money.  Foreign importers ship goods to the United States produced with cheap labor and financed by the credit of the United States.  The reason for the “Kennedy Round” of tariff reductions is to permit more of this type of foreign imports to come into the United States, resulting in additional billions of profit for the money pool.

All of our wars, both before and after World War I, have been purposely provoked by the insatiable greed of the money pool and their multiple banking and political affiliates.^[15]  Phony incidents are provoked and then ballyhooed by the puppet press to make people accept the continual wars in the belief that we are either defending ourselves or fighting Communism.  Wars produce huge debts, and huge debts produce huge profits for the bank manipulators and their corporate insiders.  It also makes the people ready to make more sacrifices and accept more controls than they would otherwise tolerate in an era of peace.  Our foreign policy since World War II was designed to prevent the winning of any wars, and the continuation of fighting all around the world.  We are being unilaterally disarmed while the might of the Soviet is being built up with our money and knowhow.  At some future date a “takeover” of the United States can be achieved with relative ease.  Can we assume that all the mistakes and errors of judgment in domestic and foreign policy were simply mistakes, or was it all planned that way ?

Our standard of living is directly related to money regulation.  Our present society is capable of producing an undreamed of capacity for plenty for all citizens.  But with our feudal monetary system, there is no future for America except slavery and insolvency in a totalitarian worldwide slave state called world government.

Many people feel that money possesses no real value unless it is backed up by gold, silver or both.  We must remember, that from the dawn of civilization man has used some form of exchange.  Barter became cumbersome and other methods of exchange were developed.  Coins of various metals have been used for centuries, including bronze, silver and gold.  As civilization progressed, gold became more generally used for jewelry and objects of art for the palaces and churches.  But as far back as the Babylonian period receipts were issued for metal coins and other valuables which were stored in the temple.  This was the beginning of the fractional reserve banking system.  The gold standard can be traced back to King Nebuchadnezzar of the Babylonian period.  During Christ’s lifetime the custom of issuing shekels to those who worshipped at the Temple was highly developed.  These shekels were the only contribution the religious pirates of the time would accept.  Shekels were issued in greater amounts than the valuables stored in temple vaults.  As a result those who controlled the money became rich and powerful and able to control the fortunes of kings.  Christ Himself regarded them with contempt and chased the money changers out of the temple.

When the fractional reserve system was reintroduced by the goldsmiths centuries later, the same practices were followed.  When occasional runs on the goldsmith bankers occurred, there was insufficient specie to redeem the receipts.  This left most people holding the proverbial bag.  Had the money been issued by the government (not borrowed from private bankers) in proportion to the needs of trade and commerce, such ridiculous practices as fractional banking would never have developed.  Yet today millions of people follow this ancient argument on the necessity of having a portion of metallic backing for money.  This means that only a small percentage of the people have “redeemable or convertible” money.  This obvious absurdity continues to dominate the thinking of even many monetary experts.  How does one determine the percentage of money which would be redeemable, and therefore valuable ?  And who selects that group of citizens who will hold the winning receipts ?  If only ten or twenty per cent of the money is redeemable, it means that eighty or ninety per cent of the people are holding worthless currency.  Isn’t this an absurd system upon which to base the issuance of a nation’s money ?  There will be those who envision the utter collapse of the value of our money and they then want the security of having gold or silver coins for emergency measures.  It is precisely this fractional, inflatable, collapsible, privately-owned unstable monetary system which has enabled the manipulators to reduce the value of our money to a fraction of its former value.  Hiding gold or silver coins for an emergency is hardly the solution for a system which has brought monetary collapse to the nation.

Gold has always been an integral part of this fractional reserve system of swindling the public, and it continues to be the cornerstone on which the money pool has built its international fiscal empire.  The control of the money mob has been so absolute that they have been able to convince Congress to (a) go on the gold standard when it was advantageous to the manipulators, and to (b) reject the gold standard when it was in their interest.  They also have been able to get their puppet legislators to put a dollar value on an ounce of gold.  How did Congress arrive at this figure ?  Value does not exist in the abstract.  It depends on free market exchange and should follow the law of supply and demand.  People will then determine what price, (value) they attach to a given product.  Yet our Congress has attempted to regulate the value of this commodity by setting it first at $22.00 an ounce and later raising it to $35.00.  A pegged gold price insured lack of fluctuation in the international markets.  And this is the purpose behind the manipulation.

Gold was chosen because it is a commodity close to the goldsmiths’ hearts.  Its price should be regulated by a free market wherein it would eventually find its own price level.  By tying it to money and using it as a basis for international exchange, it gave the money pool the power to move it back and forth among nations, collapsing currencies in one country after another.

Preservation of stability has been the argument used for the adoption of a gold international exchange standard.  The example of a firm selling products abroad is cited as an illustration.  Payment is desired in a currency which will have a relationship with the value of the product or loan.  However, this is the exact opposite of the law of the free market which allows prices to swing freely and become self-correcting.  Additionally, if business and industry desire to invest in plants and products in other nations, it should be assumed as a business risk and not passed on to the American taxpayer in the form of guaranteed payment in case of currency fluctuations or defaults.  The stabilized exchange is the dream of the bankers and this is the reason the gold standard has been used.  In a market economy there will be occasional imbalances, but these will be largely self-correcting, if allowed to do so.  Under the rigid gold standard rule the exchange rate remains stable but it results in internal price fluctuations.  It is an artificial pegging which may have no relationship to the value of the money of a given country.

Another problem with the gold exchange standard is that its prices are controlled by those who run the foreign exchanges.  In this way international price levels can be determined by a small group who can move gold from country to country, causing both stock booms and slumps.  If a nation has a little gold, it has a little money if this is to be the standard.  There is no relationship in the international exchange market between gold and the standard of living.  We can, therefore, see that it is a banker-devised artifice to use gold as an arbitrary standard of value.  Also, we see wealth as being related to gold which is the inverse way of handling the problem.

Although the money pool has prevailed upon Congress to value and revalue the price of gold, there is no power to fix commodity prices given in the Constitution.  The Constitution does grant to Congress the power to regulate weights and measures as well as money, but not the power to fix the price of a commodity.  It also does not grant Congress the authority to deprive American citizens of their right to own gold.  This high-handed outrage by the national government has permitted foreigners who owe us billions of dollars, to drain our treasury of its last ounce of gold.  It then proceeds to prevent American citizens from owning gold if they so choose and even makes coin collectors felons if they inadvertently purchase a coin of a forbidden date.  The injustice of this is obvious.

In the United States we have a fulcrum currency.  This may be defined as a currency which is issued by a nation on a gold standard wherein the internal price of gold will not be changed.  This situation is taken advantage of by other countries by raising the price of their gold and making a profit on the transaction.  This puts the fulcrum country at a disadvantage.  This planned difficulty has been overcome by the money manipulators by simply abandoning any gold backing for our domestic dollar and then allowing all the dollar creditors to claim their payment in gold rather than dollars.  By bringing the gold to other countries it will create a problem as the gold has no value unless it can be sold to still another buyer at a higher price.^[16]  Most countries will never have enough gold to deal satisfactorily under such a system, and if the gold standard is maintained, it will mean poverty to most of the nations in the world as there simply isn’t enough gold in the world to adequately back all the transactions which an increasingly higher standard of living would demand.^[17]

Most of our difficulties over the problem of gold have been nurtured and taught by the agents of the goldsmith fractional reserve crowd.  We must not regard gold as money nor as a necessary backing for money, since money itself is not wealth.  Money is a vital necessity in a commercial society for the transaction of business and the exchange of goods.  Money is representative of wealth which is the productivity of the entire nation.  Legal money should be issued for the benefit of the entire nation and should not be the private monopoly of a self-anointed few.  Money should be representative of wealth and therefore valued against the wealth (productivity) of the nation.  Wealth must not be valued to money.  To put it another way, if you have a $100 legal tender bill issued debt free by the government you are a creditor on some form of tangible wealth valued at $100.  The Federal Reserve System has made debtors of Americans through their usurpation of the money-creating powers reserved for Congress.  “Owners of money are community creditors.  Money is a national, never-ending interest free debt of the aggregate citizens legal claim for wealth on demand.”^[18]  Money in itself is not wealth.  It functions as a measure of value, a store in value or a medium of exchange.  Wealth consists mainly of two types :  (1) perishable, such as food, exhaustible commodities such as natural gas, coal, etc. and (2) capital wealth represented by the facilities which are used to produce wealth and their products.  Money is a relationship between things that people need in their lives.  We might say that virtual wealth consists in the production and services rendered by all of the citizens.  This constitutes our standard of living.  “Total wealth equals total standard of living worth.  It then follows that level of average prices proportionate to quantity of money.  And purchasing power of money is inversely proportionate to standard of living.”^[19]  When people view money as wealth they are in reality saying that when the unconstitutionally created Federal Reserve System issues money it is issuing wealth.  Obviously circulating debts cannot be considered wealth.  When people realize that our money represents debts they would realize that it is vastly better to have the wealth of the nation as a backing for our money.  This is exactly what our Constitution provided for, but which the international money manipulators have prevented from becoming a reality for over two centuries.

The ideal situation would be where money is tied to neither gold nor debt.  Unfortunately, in the United States today we not only have circulating debts for money, but face a situation whereby the banks, through the use of credit are able to virtually create money of their own.  Because of the inherent evils of a fractional reserve method of banking, only a small percentage of money reserves are held against actual loans.  Again we see banks creating something out of nothing and charging high interest rates for their services.  In an honest money system a debt would not be a dangerous situation because it would be a free market exchange which would be mutually advantageous to both debtor and creditor.  When the debt is a pyramided structure as it is at present, based merely on a credit entry, a very unhealthy and economically dangerous situation exists.  Legitimate borrowing is a normal function of the commercial world but it should represent a value exchange.  With an honest money system, one dollar would represent a dollar’s worth of wealth.

The fundamental concept of our Constitution was that the creation of money was a function of a sovereign power.  To delegate this vast power to a private monopoly giving them control of our nation’s wealth and economy is tantamount to treason.  Our money supply should be interest-free and issued in proportion to the needs of the nation.  There should never be a shortage of money and any nation enjoying an honest money system would find its citizens living an affluent life.  To have our material livelihood depend on the existence of debt is the most absurd doctrine we moderns have swallowed in the realm of economic thought.  Most of our so-called statesmen are mere puppets who have no notion of the workings of the economy.  Usually some self-appointed, foggy minded “expert” from a Keynesian school of thought will attempt to lead the blundering politicos into the enactment of legislation desired by the money manipulators.

What would happen if the United States went off the gold standard.  It really has, but we haven’t been told this.  The gold standard was officially repealed during the Roosevelt administration for domestic use, but retained for international manipulations.  A two-tiered price system is now being used which this author believes will eventually be abandoned by the goldsmith manipulators.  They will no longer need it when an international currency becomes a deadly reality.  Meanwhile foreigners may purchase what is left of our gold at $35.00 per ounce for resale to other purchasers at higher prices.  If the United States refused to buy or sell gold at all, the price would collapse and the speculators would be left holding the bag.  This would cause wholesale dumping of gold everywhere and this metal would eventually find itself back into industrial use where the price level would be determined by the free market.  But the International Monetary Fund now manages the gold and the matter is out of the hands of the United States.

It is quite obvious that the United States is not an affluent nation.  Our nation stands on the brink of bankruptcy.  Its citizens are overtaxed, mortgaged and in debt.  This chaos has resulted from the evil rule of this Babylonian, fractional reserve debt money system inaugurated by persons in high places.  There is no logical necessity for an entire nation of people to be indebted to a small group of international privateers.  The money changers must be driven from the temple and an honest money system restored to our nation or we will become a vassal state in a world monetary slave empire.

It is imperative for the functioning of a sound economy to have a stable dollar.  Because of the banker controlled issuance of money in the world today, we have seen mad gyrations in currency values and wild inflation in almost every country.  Our own nation has not escaped the devastating effects of the devaluation of our dollar, which is simply another word for inflation.  Compare prices of today with those of a few years ago and you will see what has happened to the value of your money.  It has wrought hardship on older people who have retired on a fixed income.  In many cases their standard of living has become oppressively low, bordering on pauperism.  This amounts to outright larceny on the part of the government.  It is also manifestly unfair to the business community where a creditor may be paid in either half or twice as much as he borrowed, depending on the conditions of the currency at the time of the transaction.  Insurance policies and pension plans are meaningless when an individual is unable to evaluate the purchasing power a dollar may have in say five, ten or twenty years.  If the value of money declines by five per cent per year (e.g., a five per cent inflation rate), at the end of ten years his purchasing power will have been reduced by fifty per cent.  On a twenty year endowment plan he will be throwing away his money if he invests in such a scheme.  Because of this situation, many investors are attempting to put their money in “inflation hedges.”  Why should we need inflation hedges in the first place ?  Why can’t we have a sound dollar which would be the best inflation hedge in the world.  The culprit in our lives is a government which has permitted a select group to have a private monopoly over our economy — and is doing nothing to correct the situation.  We now face the point in history where the visible government in Washington goes through the motions of putting legislation on the books which the “invisible government” has ordered.  The puppets on a string are obeying their masters and destroying the people, whom they are supposed to be representing.

A sound money system is not an impossibility.  In order to achieve this goal, it will be necessary for enough informed, and enraged citizens to force the degenerate politicians to repeal the Federal Reserve Banking Act and all illegal international treaties which have delegated the sovereignty of the United States to the international money manipulators.

If we had an honest, constitutional money system we would pay no interest on our dollar.  It would circulate tax free for years.  It would eliminate the necessity of having to pay huge interest rates on the purchase of a home, car or other necessities.  It would bring undreamed of prosperity to our nation.  Mothers would not have to work and leave their children unsupervised, a problem which has contributed greatly to juvenile delinquency.  Fathers would not have to moonlight, as their income from one job would be adequate to support their families on a decent standard of living.  Citizens would no longer have to spend over six months each year to earn the money stolen from them by banks and the tax collector.  When one realizes that a person purchasing a $20,000 home on a twenty year mortgage at five per cent interest pays over $38,000 back, one realizes the extent of the fraud on the people—and the enormous profits realized by the money changers.

If we had an honest money system, the usurers would not be able to purchase educational, union and political leaders or to corrupt nations.  The tax free foundations would be outlawed and their sinister influence on our educational institutions and children would cease.  We would not only restore monetary sanity to the country but would begin to reconstruct a world based on reason and morality.

How can we achieve this end ?  Only when enough Americans are aware of the problem and demand that Congress repeal the Federal Reserve Banking Act as it now stands.  The Goldsborough Money Reform Bill, HR-9216, introduced August 22, 1935, was never passed.  The Rarick Bill; H.R.351 has recently been introduced.  Those supporting this bill say that nobody in Washington will touch the subject of money.  WHY NOT ?  How long will the citizens permit their continued economic and monetary enslavement to a gang of international monetary criminals.  Once we become free of these parasites, other nations would soon follow suit.  They would be thrown out of nation after nation and a golden age of prosperity would be ushered in.

Steps necessary in the establishment of a sound money system :

1.  Return to Congress the Constitutional power to issue money as provided in Article 1, Section 8, Clause 5.  Abolish the practice by banks of creating deposits on fractional amounts of reserves.

2.  New money would be issued and the Federal Reserve Notes would be called in and exchanged on a dollar-for-dollar basis.  The Goldsborough Bill suggests that the new money be called Certificates of National Credit.

3.  Creation of a Monetary Authority Commission whose duty would be to determine the volume of money needed to maintain a stable dollar.

4.  Tie the issuance of National Credit Certificates (money) to some acceptable index, e.g., the Consumer’s Price Index or Gross National Product.  Using a constant of 100;  the money will be issued or withdrawn as the Index raises or falls.  This would insure that the value of money would never fluctuate more than two per cent, from one per cent above to one per cent below the constant.

5.  Issuance of money will be dependent on the production and consumption of goods and services.  This would prevent any artificially tightening of money.  Thus the needs of commerce, industry and the people at large would be adequately met.

6.  End the system of permitting commercial banks to make loans on the basis of fractional reserves.  Require all loans to hold 100 percent reserves on demand deposits.  These reserves will be legal tender, not a credit entry on a book.

Under this arrangement, money will not be created out of debt.  It will not be borrowed into existence and created out of nothing.  Money will represent the ability of the nation to produce goods and services.  Thus the wealth of the nation, not its ability to pay debts, will serve as the backing for the money.

By having such a monetary index the people would be able to gauge the value of their dollar at any given time.  They would be able to buy insurance and know that its value would be almost constant in the years ahead.  This would prevent depressions because when the price level drops by one per cent, action will immediately be taken by the Monetary Authorities to rectify it.  Under our present system, when credit is withdrawn, as it is being done now, with the artificial increase in interest rates, business activity dries up, fewer loans are available, people hoard their money and make fewer purchases.  This is how depressions are made.  Under a constitutional money system, depressions and inflations and artificial money shortages could not occur.  Under a constitutional money system there would be no inflation to destroy the value of money and purchasing power of citizens.  The Income Tax would be repealed and this would represent a tremendous amount of buying power which the American people could now spend as they see fit.  Government would be reduced to its proper role, that of protecting the nation from attack and the citizens and his property.  The business of empire building for the revolutionist bankers would cease.  This would also end wars, both hot, and cold.  An armed service of adequately paid professionals could be instituted, thus ending the draft.  Young men who desired to make the armed services their career could do so and be paid the same wages they would earn in private industry for a comparable job.

The prosperity which man could enjoy would be unprecedented in history.  Government would not be permitted to intrude on the private lives of citizens and foreign aid would cease.  As other nations adopted a sound money system, they too could extend their prosperity as their industrial capacities increased.

“Our national indebtedness to the private Federal Reserve System is the most vicious form of human bondage, servitude and slavery ever known in the history of the human race.”^[20]  Let us end this bondage to this criminal cartel and recapture our God-given right to be free men again.  Our future can either be doom or the dawn of a new era.  And this future is in the hands of the American people.  We have so little time left.  Let us act before it is too late.

_____________________________________

THE NATIONAL DEBT IS ILLEGAL
AND THEREFORE SHOULD BE UNCOLLECTIBLE
BECAUSE

It is based on the issuance of Federal Reserve Notes WHICH ARE :

1.  Issued as a result of an unconstitutional delegation of power by the government to a private corporation

2.  A violation of the laws of usury

3.  A fraud against the American people

4.  An outrageous exploitation of the wealth-producing citizens

5.  Based on no lawful consideration

6.  Confiscation of property without due process of law

7.  A denial of equal protection of the law

1. The Federal Reserve Bank of New York conducts most of the international operations of the system.  According to Herbert V. Prochnow, in his book, The Federal Reserve System (New York : Harper & Brothers, 1960), p. 275:  “In December, 1958, the Federal Reserve Bank of New York held accounts for the central banks or governments of seventy-four foreign countries and acted as fiscal agent for such international institutions as the International Monetary Fund, the International Bank for Reconstruction and Development, and the International Finance Corporation (Bretton Woods Agreements Act. Sec. 6: International Finance Corporation Act, Sec. 6)”

2. James L. Knipe, The Federal Reserve and the American Dollar, Problems and Policies, 1946-1964 (University of North Carolina Press, 1965).

3. Warren Jefferson Davies, The Federal Reserve System, Legal or Illegal. p. 6. Hawthorne, California, Omni Publications, 1966.

4. Trendex (February 21, 1969), San Antonio, Texas.

5. Curtis B. Dall, F.D.R., My Exploited Father-In-Law, Tulsa, Oklahoma, (Christian Crusade Publications, 1967), p. 119.

6. Wickliffe B. Vennard, Sr., Conquest or Consent (Boston, Massachusetts: Forum Publishing Co., 1965), p. 155.

7. Wickliffe B. Vennard, Sr., The Solution to the Federal Reserve Fraud; Aawthorne, California, Omni Publications. 1968, p. 4.

8. Wickliffe B. Vennard, Sr., Solution to the Federal Reserve Fraud (Hawthorne, California : Omni Publications, 1967). p. 6.

9. Economic Education Bulletin (February, 1970), published by the American Institute for Economic Research, Great Barrington, Massachusetts.

10. Warren Jefferson Davis, The Federal Reserve System, Legal or Illegal ?

11. Fundamental Facts About U.S. Money (Atlanta, Georgia; Federal Reserve Bank of Atlanta, 1968).

12. Emanuel M. Josephson, Roosevelt’s Communist Manifesto (New York : Chedney Press, 1955).

13. Wickliffe B Vennard, Sr., The Solution to the Federal Reserve Fraud, p. 27.

14. Ibid. p. 25.

15. “The responsibility for World War I rests solely upon the shoulders of the International Financiers. It is they upon whose head the blood of millions of dying rest.”  Senate Document No. 346, 67th Congress, 4th Session.

16. The Merchant Bankers, Joseph Weschberg, New York, Pocket Books.  Division of Simon and Schuster, Inc., 1968, p. 71.  A clerk who had worked in the gold vaults at Hambros Brothers remarked :  “I read somewhere that the entire gold reserves in the world would only be a pile fifteen yards on each side. To think how much violence has been committed for that pile of gold.”

17. “We’re approaching a breakthrough in our battle against the nonsense of international finance.  There is more than a sporting chance that the next time the monetary system, which is built on the lie of the unchanging value of gold, goes into a spasm, it will crash down. People will have to give up pretense and return to the simple truth that gold must price itself against everything else in a free market.”  Enoch Powell, M.P.

18. Durwood O. Gilfillan, Treason By Law (San Jose, California: Book Distributors, 1966), p. 10.

19. Ibid., p. 11.

20. Wickliffe B. Vennard, Sr., The Solution to the Federal Reserve Fraud (Hawthorne, California: Omni Publications, 1967), p. 27.