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Clean Money

By on October 20, 2010 in Constitution, Featured, Federal Reserve, money

by Paul Warren, Colorado Tenth Amendment Center

The United States Constitution declares, in Article I, Section 10,

“No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts.”

State-Level Constitutional Tender laws seek to nullify federal legal tender laws in the state by authorizing payment in gold and silver or a paper note backed 100% by gold or silver.

The concept of Honest Money is lost on most US citizens, thanks in part to a complete and utter lack of discussion in public schools and universities, but certainly not lost on the elite financial organizations who vehemently oppose such reform. When Nixon decoupled the dollar from its traditional gold backing and replaced it with fiat debt (private Federal Reserve notes) in 1971 because we could no longer cover our bets with gold, he substituted the last vestige of real value (our dollar) with a promissory note (debt) representing nothing more than the willingness and ability of US citizens to shoulder the artificially created debt burden via taxes.

The current private US Federal Reserve, the third central bank in our history, creates money from nothing but the unacceptable privilege to do so, making an arbitrarily agreed upon bookkeeping entry and thus creating an imaginary value which it then extends to their private member banks to trickle down to Main Street, or tells the Treasury they have a like amount of credit to either print money or issue Treasury bills with nothing to back it but an elaborate accounting and taxing scheme which can be viewed as a tenuous financial house of cards.

The first version of the Fed was Hamilton’s first US National or Central Bank as described in this timeline:
  • February 25, 1791
    President Washington asks his cabinet members for opinions on the National Bank. Thomas Jefferson submitted that such a Bank was unconstitutional and would also violate the yet to be ratified 10th Amendment. Alexander Hamilton submitted that Congress’s power to collect taxes was also power to create a national bank. Not convinced by either side, Washington sided with Hamilton as it was Hamilton’s job as Secretary of the Treasury to know what he was doing.
  • December 12, 1791
    The Bank of the United States opens its doors in Philadelphia.
  • January 21, 1793
    Hamilton and the National Bank are accused of corruption and mismanagement. Opponents to the National Bank call for the demise of the unconstitutional Bank. Congress fails to act.
  • February 20, 1811
    Congress refuses to let the National Bank renew its Charter on the grounds that the Bank is unconstitutional.
  • March 4, 1811,
    The Bank of the United States is dissolved.

What is astounding about our current situation is the continued willingness of Congress to take one of the highest powers granted them in the Constitution and surrenders it to the private Federal Reserve. This being the same body which consistently erodes our basic rights and freedoms with powers they do not have, passing unlawful legislation such as the Patriot Act and nebulous health care reform, yet it hands away a rightful power they do have to a highly secretive and self-serving third party. One would almost believe there was a parallel government in DC.

In fact, Wright Patman, Chairman of the United States House Committee on Banking and Currency, had this exact sentiment in when he stated in 1964, “In the US today, we have in effect two governments. We have the duly constituted government, then we have an independent, uncontrolled and uncoordinated government in the Federal Reserve, operating the money powers which are reserved to congress by the Constitution.”

He went on to say, “”The dollar represents a one dollar debt to the Federal Reserve System. The Federal Reserve Banks create money out of thin air to buy Government Bonds from the U.S. Treasury … and has created out of nothing a … debt which the American people are obliged to pay with interest.”

US monetary policy, the resultant money supply and interest rates are the life’s blood of our economy. From providing for the national defense to underwriting Main Street, nothing happens in our market without this critical resource. We depend on a stable and legitimate money supply for our basic pursuits of life and liberty and to divorce ‘We the People’ from our basic right of influence and understanding of this critical element of our lives is simply unthinkable. But it is our economic reality; all by the design of an unaudited cabal of bankers who answer to no one.

There is no elected US official who has the power of the Chairman of the Fed. He dictates our monetary policy and answers to no one. It is interesting to watch the omnipotent Fed Chairman, when asked by Congress to delve into details of our current monetary state. His typical condescending reply is that the inner machinations of his private financial gambling house are simply too complex for the average citizen to understand, that it is beyond our modest comprehension, and to ‘just trust us’, they have our best interests at heart and are doing a fine job. So let’s take a quick look at exactly how this financial behemoth evolved and what our trust and ignorance of it has wrought since we lost our financial sovereignty to it in 1913.

The Original Constitution

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Within 20 years of its inception, the US Federal Reserve had managed to finance a world war which very well never would have happened without it, incurred a record $24b war debt which caused major US inflation and halving the net worth of the nation, then facilitating a bubble economy followed immediately by a devastating manufactured depression which literally redrew the face of the nation, allowed insider elites to plunder assets, and finally to underwrite an emerging Germany which set the stage for yet another world war.

All by an organization that was simply to insure reliable and secure money supply. So rather than serving we people, instead the Federal Reserve has not only been a failure in monetary policy and controlling inflation, it has literally been an instrument of tyranny on the populace and a parasitic drain on national finance.

The 10th Amendment and honest money can bring this 97 year Federal Reserve crime wave to an end, by first creating, at the state level, a competing currency to inhibit the Federal Reserve from continuing to debase the currency. Contact your State Representative and ask them to support a Constitutional Tender Law, model legislation is provided here for you.

Paul Warren [send him email] is the Communications Director for the Colorado Tenth Amendment Center.

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14 comments
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Asia date
Asia date

This post is full of win. I really like the way your have described here

Richard Lefew
Richard Lefew

I'm surprised at the negative responses to this article. Acting as if it's a radical departure from the norm. Gold and/or Silver have been used as money for most of human history. Bankers and governments have introduced fiat currency (paper money, backed only by government decree) for one simple reason, they want to spend more than they have. They can't print up gold or silver, their spending is limited by the amount of Silver or Gold they possess, so they create an alternative, which they can manipulate the supply of, always in their benefit, to the detriment of the people.

The Federal Reserve is a Private Bank, owned by commercial banks. It is a private corporation. It pays dividends to it's owners, which are the largest commercial banks, both foreign and domestic. Don't take my word for it, just do a Google search, or go to the Federal Reserve's website.

Fiat monetary systems are not free market based, if they were, they wouldn't rely on "legal tender" laws for their existence. If we suddenly ended the fed, and used real money, such as gold or silver for commerce and storing our wealth, we the people would be a whole lot better off. This is why the powers that be fight it tooth and nail. You have the bankers who produce nothing, yet own virtually everything who would immediately loose their grip on our economy and nation.

Ever wonder why everyone in the country, the government, and companies included all simultaneously owe money to banks? Shouldn't we owe debts to each other? Everyone owes the bank, yet the bank is the one party to a transaction that contributed nothing.

You have to really think about the banks role & investigate how money is created by banks. Most people think banks lend out saver's deposits. This is not true. Savings account deposits are NEVER lent out. They are the basis by which a bank determines how much fiat money they can create. If banks lent out some of their savings deposits, they would be able to create less money, and earn less in interest. The gearing is supposed to be 10 to 1, but in reality, it's much higher.

william readling
william readling

I believe that if you offer someone a choice of receiving the price of an ounce of silver in dollar bills, or an ounce of silver, most would take the silver at this time. I personally bought lots of stuff with silver coin as a kid. It spends just fine.

Faction
Faction

This is why we fact check http://en.wikipedia.org/wiki/Gold_standard

This wouldn't work for various reasons. Nuff said.

anonymous
anonymous

gold has worked for thousands and thousands of years. It's paper that has a track record of failing.

CaliforniaCitizen
CaliforniaCitizen

I would love it if our money were backed by either gold or silver... but we would have to check and see if the U.S. still even has it's gold in Fort Knox. There are rumors that the Fed has taken it as collateral and I am inclined to believe it since no one has taken inventory since the 50's and ever attempt is blocked.

If money is going to be printed out of nothing... why doesn't Congress do it? Why have a middle man? There is no reason, other than malicious intent to rip off a nation.

Frank DeMartini
Frank DeMartini

this is great in theory, but it will not work.

1. The second anyone tries to for goods and services with Nevada Gold Certificates in Oklahoma it becomes interstate commerce and violates Article 1, Section 8; and,
2. Foreign Relations and Trade will become a disaster.

This clause in Article 1, Section 10 was intended for small barter trades in the early part of the country. i.e. Farmer one pays for goods at General Store in Gold. Once the world became small, this became unworkable.

I don't know whether this is 100% true or not, but I don't believe any state has tried to issue currency of any kind since the Civil War.

I also believe that article has two mistatements of fact:

1. The Fed is not a Central Bank. It is a private institution created by an Act of Congress and authorized by Congress to handle the mony supply; and,
2. Nixon took us off of the Silver Standard. I believe the Gold Standard was stopped long before Nixon's Presidency.

TextualistDude
TextualistDude

Frank

You write that paying for goods/services in OK with NV Gold Certificates becomes interstate commerce and "violates Article 1, Section 8." One cannot "violate" art.1, sec. 8. The article simply says that Congress has the power to 'regulate commerce among the several states.' It doesn't say that any trade between or among citizens of different states is unlawful and punishable as some kind of crime.

I suspect what you mean to say is that Congress would likely attempt to regulate such transactions and perhaps prohibit them. While this seems likely to me, too, it's important to understand that Art. 1, sec. 8 does not prevent States from doing this.

Rather, it is Art. 1, sec. 10 that specifically prohibits states from coining money but also expressly refers to the States' ability to make gold or silver coins legal tender. That is why the model 'Constitutional Tender' legislation referred to in the article is drafted as it is.

Your argument that no state "has tried to issue currency of any kind since the Civil War" is irrelevant. You might as well argue that people should not try anything that's never been tried before.

Or perhaps, your argument is that the Civil War somehow determined that States cannot make gold or silver coins legal tender, despite the plain wording in the Constitution. If that's your argument, it is simply wrong.

Your point that the Fed is not a Central Bank seems to be nit-picking with no point. In fact, the author of the article writes the following early on:

"What is astounding about our current situation is the continued willingness of Congress to take one of the highest powers granted them in the Constitution and surrenders it to the private Federal Reserve."

So, it's apparent the author realizes the Fed is a private institution. The simple fact is that the Fed acts much like a typical Central Bank and that is really the point.

Further, as others have noted, Nixon did not take us off the "Silver Standard." It's hard to know where that misconception even came from, but it shows you don't have an accurate understanding of the history of fiat money in America.

The only thing that is guaranteed to "not work" is to do nothing. It's apparent to me that the author of this article is trying to move America away from the unconstitutional Fed by using the powers the States have to make gold or silver legal tender. That's a pretty darn good idea IMHO and I'm VERY willing to look at anything that will kill the Fed.

Rather than grousing that it won't work, I'd rather look at his proposal and give it a chance. Anything we can do to peacefully move us away from the current mess deserves fair consideration.

anonymous
anonymous

states insisting on receiving gold or silver in tax payments is not the same as issuing currency. This distinction is important because the constitution specifically forbids states from coining money and emitting bills of credit: they can't issue currency.

Also, on your 2 points:
1. The Fed is not really private. How many private institutions need to be created with an act of congress? How many private institutions have their chairmen appointed by the president? Though they act like they don't answer to Congress, Congress can revoke their charter anytime they want, just like with the previous central banks (it won't happen though, sadly). Also, the fact remains that the power of currency belongs to Congress under the constitution, not the federal reserve. The constitution never gave congress the authority to charter any organization, period, let alone one with that power. So yes, the Fed was authorized by Congress to handle the money supply, but not by the Constitution: our money is illegal.
2. Nixon closed the gold window. Americans couldn't own gold legally, but foreigners could trade dollars for gold. The dollar was still backed by gold at the time. But other countries figured out that we printed more dollars than there was gold, so there was a run on our supply. Basically, we defaulted. But instead of being honest about it, he closed the window, took us off the standard and said "We're all keynesians now."

anonymous
anonymous

now that I think about it, this means that state sales taxes unconstitutional as well, unless that were paid in with gold and silver. fun!!

Lyra
Lyra

Also a good reason why there should not be state income taxes. "No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts." United States Constitution, Article I, Section 10

Philosopherking
Philosopherking

I really think this is a great idea but it has two problems. The first one is how are we going to overcome the weirdness of gold and silver. The average person will simply see no reason why they should switch and will not support this. Even if we did manage to get this done it wouldn't do any good because the supreme court will order states not to as in the case with so many other things.

MichaelBoldin
MichaelBoldin

1. Payments in gold and silver does not imply actually using physical metal...certificates (i.e. dollars) could be used if backed by specie. and 2. Like everything else, sooner or later it is going to take some backbone to defy the federal courts.

Kinda like the marijuana users in California have been doing since 2005.

Philosopherking
Philosopherking

I like the idea of demanding citizen pay their state taxes with gold or silver backed certificates of some kind. I know many gold companies will be glad to make those. That would force the currency to be in demand on the local level without actually directly eliminating federal reserve notes.

We should also just make businesses pay their taxes in that way so that the entire population won't reject since their lives won't be affected. It would just be one more business regulation that won't bother them.

The advantage is that this can be introduced slowly into the populace because only business that are required to comply with paying taxes with this currency. This will avoid the 'jump back' reaction the public might have to this as they will slowly get use to the idea of a gold backed currency.

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