Art. 3. Religion, morality, and knowledge, being
necessary to good government and the happiness of mankind, schools and
the means of education shall forever be encouraged.
May Religion and Morality continue to spread throughout our land, that we may once again have good government, happiness, and true knowledge.
The Principles of Liberty: Principle 17
The 28 Principles of Liberty: Principle 17
“A System of Checks and Balances Should be Adopted to Prevent the Abuse of Power”
After John Adams had sold the people on the separation of powers, it must have been shocking to him to see that they wanted to make the separation so complete that it would have made the system unworkable.
The individuals who took a puritanical view opposed the adoption of the Constitution because they wanted the separation complete and absolute. They missed the most important part, and that was that they were to be separate in their functions, but subject to the checks and balances of the other two departments in case it became abusive in performing those functions.
James Madison spent 5 of the Federalist Papers numbers, 47 to 51, explaining why the separation of powers should not be absolute, but should make allowances for a built-in system of checks and balances. He conceded that keeping the three departments separated was fundamental to the preservation of liberty.
“The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.”
The purpose of checks and balances is a constitutional control in the hands of each department of government to prevent any usurpation of power by another department or abusive administration of the power granted to it.
The failure to use the checks and balances effectively has resulted in allowing the judiciary to create new laws by pretending to be merely interpreting old laws. Failure to use checks and balances has also allowed the President to make thousands of new laws, instead of congress, by issuing executive orders. It has allowed the federal government to invade the reserved rights of the states on a massive scale. It has allowed the legislature to impose taxes on the people never contemplated by the Founders, or the Constitution. Each department of the government has the responsibility to rise up and protect its prerogatives by exercising the checks and balances which have been provided, and even more so, the people have the responsibility to be the watchmen over their representatives and elect ONLY those that will function within Constitutional boundaries.
James Madison said, “As the people are the only legitimate foundation of power, and it is from them that the constitutional charter under which the power of the several branches of government is derived, it seems strictly consonant to the republican theory to recur to the same original authority whenever an one of the departments may commit encroachment on the chartered authorities of the others.”
How do the people protect themselves? Madison sought many different avenues and found that the only protection was within the machinery of checks and balances provided in the Constitution as written.
The three departments are independent, yet reliant on each other to fulfill their functions, so they are mutually dependent. Their resulting system was far more complex then Montesquieu. Here are their provisions:
1. The House of Representatives serves as a check on the Senate since no statue can become a law without their approval.
2. The Senate also serves as the check on the House of Representatives since no statue can become a law without its approval.
3. A President can restrain them both by using his veto to send back a bill not meeting his approval.
4. The Congress has on the other hand, a check on the President by being able to pass a bill over his veto with a 2/3 majority of each house.
5. The legislature also has a further check on the President through its power of discrimination in appropriating funds for the operation of the executive branch.
6. The President must have the approval of the Senate in filing important offices of the executive branch.
7. The President must also have the approval of the Senate before any treaties with foreign nations can go into effect.
8. The Congress has the authority to conduct investigations of the executive branch to determine whether or not funds are being properly expended and the laws enforced.
9. The President has a certain amount of political influence on the legislature by letting it be known that he will not support the reelection of those who oppose his program.
10. The executive branch also has further check on the Congress by using its discretionary powers in establishing military bases, building dams, improving navigable rivers, and building interstate highways so as to favor those areas from which the President feels he is getting support by their representatives.
11. The judiciary has a check on the legislature through its authority to review all laws and determine their constitutionality.
12. The Congress, on the other hand, has a restraining power over the judiciary by having the constitutional authority to restrict the extent of its jurisdiction.
13. The Congress also has the power to impeach any of the judges who are guilty of treason, high crimes or misdemeanors.
14. The President also has a check on the judiciary by having the power to nominate new judges subject to the approval of the senate.
15. The Congress has further restraining power over the judiciary by having the control of appropriations for the operation of the federal court system.
16. The Congress is able to initiate amendments to the Constitution which, if approved by three-fourths of the states, could seriously effect the operation of both the executive and judicial branches.
17. The Congress, by joint resolution, can terminate certain powers granted to the President such as war powers without his consent.
18. The people have a check on their congressmen every two years, on their President every four years, and on their Senators every six years.
The Founders Device for Peaceful Self-Repair
In other nations that copied our constitution, they forgot to incorporate adequate checks and balances. Instead, when a usurper takes over, they must use an army and result to machine guns and bombs to get them out. What the founders wished to achieve in the Constitution of 1787 was machinery for the peaceful means of self-repair when the system when out of balance.
During Watergate, this peaceful process was used. The Congress threatened to impeach, and the President who used his high office for purposes that were outside his scope of authority and the ramifications of legal conduct, he resigned. There was no command of the army to allow him to stay in power; it was a quiet and peaceful transition. This was the primary purpose of the United States Constitution, to have a peaceful means in order to repair distortions of power. While it requires more patience then the use of force, its outcome is much more certain.
The Principles of Liberty: Principle 16
The 28 Principles of Liberty: Principle 16
“The Government Should be Separated into Three Branches-Legislative, Executive and Judicial.”
Polybius, recognized as the greatest of all Greek Historians, lived 204 to 122 B.C. When Greece was conquered by Rome, Polybius was deported to the Roman capital. This is where he quickly recognized the advantages of the Roman republic. He was the author of 40 books of history.
During his day, there were three main types of government discussed; Monarchy, Aristocracy and Democracy. Unfortunately, none of these systems, when allowed to govern, provided equality, prosperity, justice or domestic tranquility for the whole of society. He felt that he understood why this was. Each form carries within itself, the seed of it s own degeneration, if allowed to operate without checks or balances. Monarchy could easily become tyranny, aristocracy sink into an oligarchy and democracy into mob rule by force and violence.
Polybius felt that there were essential elements in each form and questioned why not combine them into a single system? This idea began its birth in the Roman system, but shortly after Polybius died, the Romans abandoned their principles of a republic and chose an emperor instead. So, Polybius’s idea of a system that restrained government from acquiring enough power to abuse the people died with him, until Baron Charles de Montesquieu determined to resurrect it. He wanted to submit this mixed constitution for consideration of modern man.
Montesquieu became one of the best-educated scholars in France. He wrote a book called “The Spirit of Laws”, which has been described as one of the most important books ever written. The final writing took him two solid years. It was greatly admired by the Founders. It documented the practical possibility of a government based on ‘separation of powers’ or a mixed constitution.
In book XI, Montesquieu set forth the ingredients for a model constitution. The Founders used many portions of it as a guide in their own work. The Founders joint effort far exceeded Montesquieu, but he does deserve credit for his contribution.
A single executive was ideal to Montesquieu due to what he witnessed as a weakness of the Roman system in setting up two or more consuls. Having a single person who can make decisions quickly and decisively and cannot escape either credit or blame for the consequences would be ideal.
It was John Adams that pushed the idea of the separation of powers. It was a very revolutionary idea and very unpopular when first presented. It was only Dr. Benjamin Rush that agreed with John Adams at first. In writing a letter to Benjamin Rush, John Adams mentions how Thomas Paine came to talk to him about it. John Adams felt that politics was a divine science and dedicated much of his life to studying it, so that his children and grandchildren may be blessed by his efforts. He started by planting his seeds of separation of powers in Massachusetts.
It was quite the struggle, but he did succeed, and for the first time in the world, a constitution read:
“In the government of the Commonwealth of Massachusetts the legislative, executive and judicial powers shall be placed in separate departments, to the end that it might be a government of laws and not of men…”
Years later, he got his ideas incorporated into the U.S. Constitution, but was never able to gain genuine acceptance for himself. Even though he had been the first U.S. vice president and the second President, he very shortly disappeared into history and was nearly forgotten. It was when scholars started digging into the origins of American constitutionalism that he came into perspective. He, himself, thought that few would remember what he had attempted to accomplish. To a friend he wrote, “Mausoleums, statues, monuments will never be erected to me. Panegyrical romances will never be written, nor flattering orations spoken to transmit me to posterity in brilliant colors.”
His ideas however, did catch on. Pennsylvania revised their constitution to include a separation of powers and Benjamin Franklin, one of the last to be converted, acknowledged that the Constitution of the United States was as perfect as man could be expected to produce, and urged all members of the Convention to sign it.
We close with John Adams aspiration “To see rising in America an empire of liberty, and the prospect of two or three hundred millions of freemen, without one noble or one king among them.”
The 28 Principles of Liberty are adapted from W. Cleon Skousen's book, The 5000 Year Leap and are brought to you by Fragrant Smoke.
Grand Jury Indictment of the Federal Reserve
Grand Jury Indictment Of The Federal Reserve
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
UNITED STATES OF AMERICA,INDICT-MENT
VIOLATION OF U.S.
Plaintiff CURRENCY LAW
CR-82-0107W
vs.
FEDERAL RESERVE BANK
Defendants _______________________________________
Inasmuch as we have issued indictments and subpoenas which the U.S. Attorney and the courts would not act upon, we issue this final indictment of the federal reserve and its principals (Board of Governors, Directors of Federal Reserve and Members of the Open Market Committee). This is not done in anger or as an act of disrespect, but still disagreeing with the U.S. Attorney and the courts.
The Grand Jury finds that—The power to print paper money or to issue bills of credit, was never given to the Federal government and it is contrary to both the letter and the spirit of the Constitution for it to do so.
While the power “to coin money, regulate the value thereof and of foreign coin” and the power “to borrow money on the credit of the United States” were both delegated to the Congress, the power to print money was never given. A proposal was made in the Constitutional convention to give Congress this power and it was defeated by a vote of nine states against, two for. (See Madison’s Notes on Debates in the Federal Convention for August 16, 1787). But the wording of the Constitution itself denies such a power to Congress. It provides that “No state shall make anything but gold and silver coin a tender in payment of debts.” This being so, when the Federal government issues irredeemable paper as a tender in payment of debts it compels them to violate this prohibition. Inasmuch as the laws dealing with lawful money are still intact (gold and silver coin) the federal reserve, in ignoring these laws is also violating statutes.
“No state shall…pass any law…impairing the obligation of contract.” By compelling the states to use irredeemable paper as a tender in payment of debts, Congress thereby causes the states to impair the obligation of contracts to the extent of billions of dollars each year. This can be seen by noting the effect which inflation has upon people. According to the Statistical Abstract of 1980 there was at the end of 1979 $3,222 Billion of Life Insurance in force. Assuming an annual inflation rate of just 10%, holders of policies are systematically robbed each year of over $322 Billion. The combined CPI for the past five years totaled 48.6% inflation (1977, 6.5%; 1978, 7.7%; 1979, 11.3%, 1980, 14.4%; 1981, 8.7%). Life insurance in force averaged approximately $3,024 Billion per year. 48.6% X $3,024 Billion = $1,469 Billion, or nearly $1.5 Trillion impairment of insurance in force. Holders of the national debt would be robbed of over $100 Billion at just 10% inflation annually. This is not to mention the loss being suffered by old age pensions, retired people, people with bonds, savings accounts, and holders of mortgages, etc. The states, by ignoring their constitutional charge are guilty of participating with the federal reserve in impairing contracts, violating citizens civil and property rights, all without due process of law for citizens. Why then do governments leave good money and go to bad? One reason is that it enables them to effectively eliminate (assuming a 10% inflation rate) 10% of their obligations annually and to pay off long term bonds with severely devalued dollars, except as offset by excessive interest.
The purpose of the Constitution’s provision is to protect the right of private property including contract rights, not to impair them.
The Grand Jury finds that—The founding fathers interpreted the Constitution as requiring the use of gold and silver coin as the only legal tender which could be used in the nation.
It is a fact that for the first seventy years of its existence, the nation was on a silver and gold standard. This is all the evidence one would ever need as to the type of monetary system intended for this nation by those who drafted and adopted the United States Constitution. It was not until the great crisis brought on by the Civil War that the North, in an attempt to provide additional financing, for the first time issued “bills of credit” and made them a tender in payment of debts.
An irredeemable currency is directly contrary to the spirit of the Constitution which was designed to protect contract rights. There is a specific provision contained in the Constitution which says: “No state shall…pass any law…impairing the obligation of contract.” This same law should apply to the federal government. By printing worthless currency and compelling state courts to use it as a legal tender in payment of debts, it forces them to disobey the prohibition. Recognizing the danger of allowing state governments to pass laws destroying contract rights and also desiring that states should act honorable, this prohibition was adopted. Morally and legally, it is equally applicable to the Federal.
If this matter was so plain to those who drafted the Constitution, how did it happen that we use neither gold nor silver today but only an irredeemable paper and a debased coinage? The answer is found in the fact that when a nation gets into serious trouble, those in government tend to ignore the restraints of the Constitution, and the people, under the stress of the times tend to permit it.
Thus it happened that in the desperate days of the Civil War, a sorely beset Congress first authorized the issue of paper money by the Federal Government. The term “greenbacks” was used to describe this issue and they were made a legal tender in payment of debts both public and private. Of course the constitutionality of this act was tested in the United States Supreme Court which held in a five to three decision that paper money was unconstitutional.
This victory for sound money did not last long however because shortly thereafter when the personnel of the Court had been changed by the addition of two new members, another case involving essentially the same issue was brought before it, and this time in a five to four majority reversed the prior decision. It is a matter for reflection that the decision of a single Court Justice can affect the destiny of an entire nation.
Eventually the issue of greenbacks was redeemed in gold and silver coin as was always intended, and the nation returned to a hard money system which continued until the money manipulation policies of the federal reserve created the Great Depression. It was during the agony of that crisis that government once again ignored the Constitution, and a confused and distraught nation failed to restrain them. A prior Congress passed an administration measure under which the use by citizens of gold as money was made a criminal offense, the gold of the citizens was confiscated and paper was issued in its place. The private federal reserve banks in 1934 issued to themselves the only gold redeemable certificates—laying claim to the gold just taken from the citizens. Once more the matter came before a prior Supreme Court—and once more in another 5 to 4 decision the Court upheld Congress. This opened the door to an unlimited issue of paper money for the citizens which has continued ever since.
The change in our national fiscal affairs since the hard money system was abandoned to the federal reserve is reflected in the following approximated figures:
1933 1982
National Debt $27 Billion $1,000 Billion
Annual National Budget $5 Billion $750 Billion
*Gold and Prices, George F. Warren & Frank A. Person, John Welsey & Sons (1935), Page 138.
The Grand Jury Finds—Why it is so important that we use the precious metals rather than paper for money. The virtue of gold and silver is that governments or private credit monopolies cannot destroy citizens contract rights.
Gold and silver are perfectly suited to serve as money. Being largely impervious to decay, their value is not destroyed by the passage of time. Also they are probably the most versatile of all metals and this intrinsic worth together with their natural beauty has preserved their value in every nation and in every age. Every civilization has found them desirable and sought after them and it is this fact which makes them more stable than any other standard of value. Governments and private credit monopolies cannot manipulate nor corrupt this standard without such coming to the immediate attention of the people—and it has. Gold and silver have very distinctive physical characteristics which makes it relatively easy to observe a reduction in the weight or size of coins.
One ofttimes hears it said that there is not enough gold in the world to serve our monetary needs today—that the demand for money has grown so enormously since the Constitution was adopted that the monetary system it provided for will no longer suffice. The first answer to this argument is that the Constitution does not provide for a gold standard, but for a standard of gold and silver. Both metals were decreed as legal tender.
A second answer to the shortage argument is that it is utterly wrong to assume that we need a stock of gold and silver equal to the amount of money in circulation. We need only a small fraction of that amount. The truth of this fact can be seen by noting that the size of our gold stocks when we were on the gold standard between 1900 and 1933 was generally less than 10% (Statistical Abstract of the U.S. [1937]. Pages 163 & 200) of the total money and bank deposits. The reason why such a relatively small amount of the precious metals will suffice is easily seen.
Imagine, if you can, everyone who has a claim for money simultaneously demanding that his debtor pay in gold and silver coin. Such a situation is unthinkable, especially when it is realized that we are all debtor and creditors at the same time. The great majority of us cannot afford to invest in the precious metals. When we have a claim for money we want to turn that claim into food, clothing, services, etc. as soon as possible without going through the cumbersome and useless process of converting it into gold and silver first.
But the scarcity argument is seen in its most ridiculous light when it is remembered that it is this very scarcity which makes it possible to use gold and silver as an unchanging standard of value. If they were to become as plentiful as, say paper, they could not possibly retain their value in the eyes of the people. It is the very fact that they are scarce together with the fact that they have intrinsic worth, which preserves their value from generation to generation.
On the other hand, paper has none of the characteristics needed as a standard of value because it has no intrinsic worth. This is not to say we should not use paper as a medium of exchange to represent a claim for money. Paper is certainly convenient to use for transferring claims to gold and silver and there is nothing against using it for this purpose. Common sense dictates that we do so. There is no danger in using paper as a claim or an evidence of ownership of something of value. The great danger—and indeed the terrible harm—comes from making it irredeemable—in asserting that the paper has value rather than that it represents a claim for some commodity which has value.
The Grand Jury Finds that—Irredeemable paper money is the fundamental cause of inflation, that this irredeemability is a violation of statutes dealing with lawful money and the money of account of the U.S. The federal reserve itself continued to publicly show its recognition of these statutes into the late 1960’s by printing on its notes we used as money that they were redeemable in lawful money. Statutes and the Constitution did not change, only their printing the recognition of their still existing obligation to redeem in lawful money changed.
COUNT I
The Grand Jury Charges that:
By issuing and circulating irredeemable paper as legal tender in payment of debts the Federal Reserve Bank in this district, in concert with other Federal Reserve Banks under authority of a prior congress is compelling the states to violate that provision of the Constitution which forbids them to make “anything but gold and silver coin a tender in payment of debts.”
COUNT II
The Grand Jury Charges that:
By issuing and circulating irredeemable paper money as legal tender in payment of debts, the Federal Reserve Bank in this district, in concert with other Federal Reserve Banks is causing the states to violate that provision of the Constitution which forbids them to impair the obligations of contract.
COUNT III
The Grand Jury Charges that:
By issuing and circulating irredeemable paper as legal tender in payment of debts the Federal Reserve Bank in this district, in concert with other Federal Reserve Banks under authority of a prior congress is using something other than what the Constitution allows.
COUNT IV
The Grand Jury Charges that:
In 1980 the FRB in this district in concert with agents and employees of other Federal Reserve banks did issue and put in circulation Federal Reserve notes in an amount in excess of $1,025,547,000 from the branch of the Federal Reserve Bank of San Francisco, some of which were also issued and put in circulation through the Salt Lake City Branch; and provisions of 12 U.S.C. 411 require that the said notes shall be obligations of the United States and shall be receivable by all national banks and member banks and Federal Reserve banks and for all taxes, customs, and other public dues, and they shall be redeemed in lawful money of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve Bank, and as defined at 12 U.S.C. 152, the terms “lawful money” and “lawful money of the United States” shall be construed to mean gold or silver coin of the United States, and 18 U.S.C. 334, crimes and criminal procedure requires that whosoever, being a Federal Reserve Agent, or an agent or employee of such Federal Reserve Agent, or of the Board of Governors of the Federal Reserve System, issues or puts in circulation any Federal Reserve notes, without complying with or in violation of the provisions of law regulating the issuance and circulation of Federal Reserve notes shall be fined not more than $5,000 or imprisoned not more than five years or both, and the defendants being members of the Board of Governors of the Federal Reserve System, or agents or employees thereof, did issue and put in circulation Federal Reserve notes without complying with and in violation of the provisions of 12 U.S.C. 411, and that such Federal Reserve notes are not obligations of the United States as required at 12 U.S.C. 411 and as defined at 18 U.S.C. 8, and that such notes were issued and were not redeemed, are not now being redeemed nor can they be redeemed in lawful money of the United States which is defined in 12 U.S.C. 152 as gold and silver coin of the United States as required in 12 U.S.C. 411, and therefore the said notes were issued and put in circulation in violation of 18 U.S.C. 334.
A TRUE BILL
/s/ Hans V. Andersen Jr.
Foreman of the Grand Jury
___________________
U.S. Attorney
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
UNITED STATES OF AMERICA,INDICT-MENT
VIOLATION OF U.S.
Plaintiff CURRENCY LAW
CR-82-0107W
vs.
FEDERAL RESERVE BANK
Defendants ______________________________
Inasmuch as we have issued indictments and subpoenas which the U.S. Attorney and the courts would not act upon, we issue this final indictment of the federal reserve and its principals (Board of Governors, Directors of Federal Reserve and Members of the Open Market Committee). This is not done in anger or as an act of disrespect, but still disagreeing with the U.S. Attorney and the courts.
The Grand Jury finds that—The power to print paper money or to issue bills of credit, was never given to the Federal government and it is contrary to both the letter and the spirit of the Constitution for it to do so.
While the power “to coin money, regulate the value thereof and of foreign coin” and the power “to borrow money on the credit of the United States” were both delegated to the Congress, the power to print money was never given. A proposal was made in the Constitutional convention to give Congress this power and it was defeated by a vote of nine states against, two for. (See Madison’s Notes on Debates in the Federal Convention for August 16, 1787). But the wording of the Constitution itself denies such a power to Congress. It provides that “No state shall make anything but gold and silver coin a tender in payment of debts.” This being so, when the Federal government issues irredeemable paper as a tender in payment of debts it compels them to violate this prohibition. Inasmuch as the laws dealing with lawful money are still intact (gold and silver coin) the federal reserve, in ignoring these laws is also violating statutes.
“No state shall…pass any law…impairing the obligation of contract.” By compelling the states to use irredeemable paper as a tender in payment of debts, Congress thereby causes the states to impair the obligation of contracts to the extent of billions of dollars each year. This can be seen by noting the effect which inflation has upon people. According to the Statistical Abstract of 1980 there was at the end of 1979 $3,222 Billion of Life Insurance in force. Assuming an annual inflation rate of just 10%, holders of policies are systematically robbed each year of over $322 Billion. The combined CPI for the past five years totaled 48.6% inflation (1977, 6.5%; 1978, 7.7%; 1979, 11.3%, 1980, 14.4%; 1981, 8.7%). Life insurance in force averaged approximately $3,024 Billion per year. 48.6% X $3,024 Billion = $1,469 Billion, or nearly $1.5 Trillion impairment of insurance in force. Holders of the national debt would be robbed of over $100 Billion at just 10% inflation annually. This is not to mention the loss being suffered by old age pensions, retired people, people with bonds, savings accounts, and holders of mortgages, etc. The states, by ignoring their constitutional charge are guilty of participating with the federal reserve in impairing contracts, violating citizens civil and property rights, all without due process of law for citizens. Why then do governments leave good money and go to bad? One reason is that it enables them to effectively eliminate (assuming a 10% inflation rate) 10% of their obligations annually and to pay off long term bonds with severely devalued dollars, except as offset by excessive interest.
The purpose of the Constitution’s provision is to protect the right of private property including contract rights, not to impair them.
The Grand Jury finds that—The founding fathers interpreted the Constitution as requiring the use of gold and silver coin as the only legal tender which could be used in the nation.
It is a fact that for the first seventy years of its existence, the nation was on a silver and gold standard. This is all the evidence one would ever need as to the type of monetary system intended for this nation by those who drafted and adopted the United States Constitution. It was not until the great crisis brought on by the Civil War that the North, in an attempt to provide additional financing, for the first time issued “bills of credit” and made them a tender in payment of debts.
An irredeemable currency is directly contrary to the spirit of the Constitution which was designed to protect contract rights. There is a specific provision contained in the Constitution which says: “No state shall…pass any law…impairing the obligation of contract.” This same law should apply to the federal government. By printing worthless currency and compelling state courts to use it as a legal tender in payment of debts, it forces them to disobey the prohibition. Recognizing the danger of allowing state governments to pass laws destroying contract rights and also desiring that states should act honorable, this prohibition was adopted. Morally and legally, it is equally applicable to the Federal.
If this matter was so plain to those who drafted the Constitution, how did it happen that we use neither gold nor silver today but only an irredeemable paper and a debased coinage? The answer is found in the fact that when a nation gets into serious trouble, those in government tend to ignore the restraints of the Constitution, and the people, under the stress of the times tend to permit it.
Thus it happened that in the desperate days of the Civil War, a sorely beset Congress first authorized the issue of paper money by the Federal Government. The term “greenbacks” was used to describe this issue and they were made a legal tender in payment of debts both public and private. Of course the constitutionality of this act was tested in the United States Supreme Court which held in a five to three decision that paper money was unconstitutional.
This victory for sound money did not last long however because shortly thereafter when the personnel of the Court had been changed by the addition of two new members, another case involving essentially the same issue was brought before it, and this time in a five to four majority reversed the prior decision. It is a matter for reflection that the decision of a single Court Justice can affect the destiny of an entire nation.
Eventually the issue of greenbacks was redeemed in gold and silver coin as was always intended, and the nation returned to a hard money system which continued until the money manipulation policies of the federal reserve created the Great Depression. It was during the agony of that crisis that government once again ignored the Constitution, and a confused and distraught nation failed to restrain them. A prior Congress passed an administration measure under which the use by citizens of gold as money was made a criminal offense, the gold of the citizens was confiscated and paper was issued in its place. The private federal reserve banks in 1934 issued to themselves the only gold redeemable certificates—laying claim to the gold just taken from the citizens. Once more the matter came before a prior Supreme Court—and once more in another 5 to 4 decision the Court upheld Congress. This opened the door to an unlimited issue of paper money for the citizens which has continued ever since.
The change in our national fiscal affairs since the hard money system was abandoned to the federal reserve is reflected in the following approximated figures:
1933 1982
National Debt $27 Billion $1,000 Billion
Annual National Budget $5 Billion $750 Billion
*Gold and Prices, George F. Warren & Frank A. Person, John Welsey & Sons (1935), Page 138.
The Grand Jury Finds—Why it is so important that we use the precious metals rather than paper for money. The virtue of gold and silver is that governments or private credit monopolies cannot destroy citizens contract rights.
Gold and silver are perfectly suited to serve as money. Being largely impervious to decay, their value is not destroyed by the passage of time. Also they are probably the most versatile of all metals and this intrinsic worth together with their natural beauty has preserved their value in every nation and in every age. Every civilization has found them desirable and sought after them and it is this fact which makes them more stable than any other standard of value. Governments and private credit monopolies cannot manipulate nor corrupt this standard without such coming to the immediate attention of the people—and it has. Gold and silver have very distinctive physical characteristics which makes it relatively easy to observe a reduction in the weight or size of coins.
One ofttimes hears it said that there is not enough gold in the world to serve our monetary needs today—that the demand for money has grown so enormously since the Constitution was adopted that the monetary system it provided for will no longer suffice. The first answer to this argument is that the Constitution does not provide for a gold standard, but for a standard of gold and silver. Both metals were decreed as legal tender.
A second answer to the shortage argument is that it is utterly wrong to assume that we need a stock of gold and silver equal to the amount of money in circulation. We need only a small fraction of that amount. The truth of this fact can be seen by noting that the size of our gold stocks when we were on the gold standard between 1900 and 1933 was generally less than 10% (Statistical Abstract of the U.S. [1937]. Pages 163 & 200) of the total money and bank deposits. The reason why such a relatively small amount of the precious metals will suffice is easily seen.
Imagine, if you can, everyone who has a claim for money simultaneously demanding that his debtor pay in gold and silver coin. Such a situation is unthinkable, especially when it is realized that we are all debtor and creditors at the same time. The great majority of us cannot afford to invest in the precious metals. When we have a claim for money we want to turn that claim into food, clothing, services, etc. as soon as possible without going through the cumbersome and useless process of converting it into gold and silver first.
But the scarcity argument is seen in its most ridiculous light when it is remembered that it is this very scarcity which makes it possible to use gold and silver as an unchanging standard of value. If they were to become as plentiful as, say paper, they could not possibly retain their value in the eyes of the people. It is the very fact that they are scarce together with the fact that they have intrinsic worth, which preserves their value from generation to generation.
On the other hand, paper has none of the characteristics needed as a standard of value because it has no intrinsic worth. This is not to say we should not use paper as a medium of exchange to represent a claim for money. Paper is certainly convenient to use for transferring claims to gold and silver and there is nothing against using it for this purpose. Common sense dictates that we do so. There is no danger in using paper as a claim or an evidence of ownership of something of value. The great danger—and indeed the terrible harm—comes from making it irredeemable—in asserting that the paper has value rather than that it represents a claim for some commodity which has value.
The Grand Jury Finds that—Irredeemable paper money is the fundamental cause of inflation, that this irredeemability is a violation of statutes dealing with lawful money and the money of account of the U.S. The federal reserve itself continued to publicly show its recognition of these statutes into the late 1960’s by printing on its notes we used as money that they were redeemable in lawful money. Statutes and the Constitution did not change, only their printing the recognition of their still existing obligation to redeem in lawful money changed.
COUNT I
The Grand Jury Charges that:
By issuing and circulating irredeemable paper as legal tender in payment of debts the Federal Reserve Bank in this district, in concert with other Federal Reserve Banks under authority of a prior congress is compelling the states to violate that provision of the Constitution which forbids them to make “anything but gold and silver coin a tender in payment of debts.”
COUNT II
The Grand Jury Charges that:
By issuing and circulating irredeemable paper money as legal tender in payment of debts, the Federal Reserve Bank in this district, in concert with other Federal Reserve Banks is causing the states to violate that provision of the Constitution which forbids them to impair the obligations of contract.
COUNT III
The Grand Jury Charges that:
By issuing and circulating irredeemable paper as legal tender in payment of debts the Federal Reserve Bank in this district, in concert with other Federal Reserve Banks under authority of a prior congress is using something other than what the Constitution allows.
COUNT IV
The Grand Jury Charges that:
In 1980 the FRB in this district in concert with agents and employees of other Federal Reserve banks did issue and put in circulation Federal Reserve notes in an amount in excess of $1,025,547,000 from the branch of the Federal Reserve Bank of San Francisco, some of which were also issued and put in circulation through the Salt Lake City Branch; and provisions of 12 U.S.C. 411 require that the said notes shall be obligations of the United States and shall be receivable by all national banks and member banks and Federal Reserve banks and for all taxes, customs, and other public dues, and they shall be redeemed in lawful money of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve Bank, and as defined at 12 U.S.C. 152, the terms “lawful money” and “lawful money of the United States” shall be construed to mean gold or silver coin of the United States, and 18 U.S.C. 334, crimes and criminal procedure requires that whosoever, being a Federal Reserve Agent, or an agent or employee of such Federal Reserve Agent, or of the Board of Governors of the Federal Reserve System, issues or puts in circulation any Federal Reserve notes, without complying with or in violation of the provisions of law regulating the issuance and circulation of Federal Reserve notes shall be fined not more than $5,000 or imprisoned not more than five years or both, and the defendants being members of the Board of Governors of the Federal Reserve System, or agents or employees thereof, did issue and put in circulation Federal Reserve notes without complying with and in violation of the provisions of 12 U.S.C. 411, and that such Federal Reserve notes are not obligations of the United States as required at 12 U.S.C. 411 and as defined at 18 U.S.C. 8, and that such notes were issued and were not redeemed, are not now being redeemed nor can they be redeemed in lawful money of the United States which is defined in 12 U.S.C. 152 as gold and silver coin of the United States as required in 12 U.S.C. 411, and therefore the said notes were issued and put in circulation in violation of 18 U.S.C. 334.
A TRUE BILL
/s/ Hans V. Andersen Jr.
Foreman of the Grand Jury
___________________
U.S. Attorney
The 28 Principles of Liberty: Principle 15
“The Highest Level of Prosperity Occurs when there is a Free-Market Economy and a Minimum of Government Regulations.”
Having a good idea of what was possible with setting up a political and social structure based on natural law, the founders sought for natural law for the market place as well. In 1776 the book “The Wealth of Nations” came out. It was not easy reading, but became the watershed between mercantilism and the doctrines of free-market economics. It fit the experiences and thinking of the Founders.
Thomas Jefferson wrote, “In political economy, I think Smith’s Wealth of Nations the best book extant.”
There was no where on earth that these principles were being practiced by any nation of any consequence. The United States was the first people to undertake the structuring of a whole national economy on the basis of natural law and the free-market concept described by Adam Smith. Among other things, this formula called for the Following:
1. Specialized production: Let every person or corporation of persons do what they do best.
2. Exchange of goods takes place in a free-market environment without governmental interference in production, prices or wages.
3. The free market provides the needs of the people on the basis of supply and demand, with no government imposed monopolies.
4. Prices are regulated by competition on the basis of supply and demand.
5. Profits are looked upon as the means by which production of goods and services is made worthwhile.
6. Competition is looked upon as the means by which quality is improved, quantity is increased, and prices are reduced.
There are four laws of economic freedom:
1. The freedom to try.
2. The freedom to buy.
3. The freedom to sell
4. The freedom to fail.
By 1905 the United States had become the richest industrial nation in the world. With only 5% of the earth’s continental land area and merely 6% of the world’s population, the American people were producing over half of almost everything, clothes, food, houses, transportation, communications, even luxuries. It was a great tribute to Adam Smith.
The Founding Fathers agreed with Adam Smith, that the greatest threat to economic prosperity was the intervention of the government into the economic affairs of private businesses and the buying public. Historically, governments have tried to do this through fixing prices, fixing wages, controlling production, controlling distribution, granting monopolies, or subsidizing certain products.
There are four legitimate areas of responsibility which properly belong to the government.
1. Prevention of illegal force in the market place to compel purchase or sale of products.
2. Preventing Fraud in misrepresenting the quality, location, or ownership of the item being sold or bought.
3. Preventing a Monopoly that eliminates competition that results in restraint of trade.
4. Preventing Debauchery of the cultural standards and moral fibers of society by commercial exploitation of vice pornography, obscenity, drugs, liquor, prostitution, or commercial gambling.
George Washington said, “Let vigorous measures be adopted; not to limit the prices of articles, for this I believe is inconsistent with the very nature of things, and impracticable in itself, but to punish speculators, forestallers, and extortioners, and above all to sink the money by heavy taxes. To promote public and private economy; encourage manufacturers etc.”
After 1900, these principles were lost in the shuffle. Many prominent and influential leaders began to lose confidence in the system. These included wealthy industrialists, heads of multi-national banking institutions, leaders in the academic world, and some of the more innovative minds of the media. The same restlessness was taking hold of similar circles in Europe.
There were many organizations that were demanding that the government get involved in the redistribution of wealth. Many of the problems of the time were created by the very individuals that were demanding a new system. The new system would involve extensive government regulation and outright expropriation of major industries and natural resources. This greatly accelerated the idea of a strong centralized government with regulatory power over every aspect of the marketplace.
By the 1920’s debunking of the Founding Fathers was in full swing. Discussion of the Constitution being obsolete was discussed openly. The ideas of Adam Smith were referred to as out of date, or ancient.
John Chamberlain eventually came to realize what was going on, what the intellectual leaders were doing. They were deliberately tearing down the founders and the free-market economy in order to create a void that they could fill with there new formula. And it was the very economic nostrum that was the very toxin that the Founders had warned about. Chamberlain states that before Franklin Roosevelt that we had the Republic, meaning that the checks and balances were in place, and after 1933 we began to be centralized and there were interventionist controls of industry. That prior to that America had been hallowed out in the Twenties because the colleges ceased to teach anything important about our heritage. You had to be a graduate student to even catch up with the” Federalist Papers” or “The wealth of Nations.” He states that is generation was the ignorant generation. He said that the depression began their education, but the first book in economics that they read was Marx’s “Capital.” They had nothing to put against it, and it laid the foundation brick by brick for Keynes.
W. Cleon Skousen mentions that he too had a similar experience of trying to find America’s roots coming less then a decade behind Chamberlain. He states that the Founders had been relegated for about 25 years at this point. Many had their eyes opened after reading “The Socialist Tragedy,” which explained what socialism had done to Europe. Max Eastman wrote “Reflections on the failure of Socialism,” explaining what socialism had done to America and the world in 1962.
The Founders determined that they would make the American dollar completely independent of any power or combinations of powers outside of the American people. They gave the exclusive power to issue and control money to the people’s representatives, the congress and forbade anyone else from meddling with it.
Not only was congress responsible for issuing the money, but it was to see that is purchasing power remained fixed. In other words, the value of the money was to remain steady and reliable not only in the United States but in relation to foreign money. All money was to be coined in precious metal. Paper notes were to be a promissory note, or a promise to pay in gold or silver. The States were to make certain that they did NOT allow debts to be paid except in terms of gold or silver.
Washington stated, “We should avoid the depreciation of our currency; but I conceive this end would be answered, as far as might be necessary, by stipulating that all money payments should be made in gold and silver, being the common medium of commerce among nations.”
If you are not yet familiar with our monetary system, studying about Fractional banking would be a good start. Jefferson, forsaw that the banks would inflate the economy by loaning out fictitious paper money, with no assets behind it. This would boom the economy and once the financiers had lured borrowers into a precarious situation, they would call for a bust and foreclose on the properties for which the bank had virtually furnished NOTHING. The financiers that gained control of American finance built the economy on debt instead of wealth.
Jefferson, Jackson and Lincoln all tried to get the monetary program turned around so that congress would issue its own money and banks would required to loan on existing assets rather then use fictitious money based on merely a fraction of their assets. At one point when it seemed to be catching on, the London Times came out with a frantic editorial stating:
“If that mischievous financial policy, which had its origins in the North American republic during the late war of that country (the civil war), should become indurated down to a fixture, the that government will furnish its own money WITHOUT COST. It will pay off its debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and the wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.”
In close, I leave you with the words of Thomas Jefferson toward the latter days of his life, “We are overdone with banking institutions, which have banished the precious metals, and substituted a more fluctuating and unsafe medium..These have withdrawn capital from useful improvements and employments to nourish idleness..These are evils more easily to be deplored than remedied.” On another occasion he also said, “We are completely saddled and bridled, and…the bank is so firmly mounted that we must go where it will guide.”
The 28 Principles of Liberty: Principle 14
“Life and Liberty are Secure Only so Long as the Right to Property is Secure”
Under English common law, significance was attached to the unalienable right of possessing, developing and disposing of property. Land and the products from it were considered gifts from God, and were to be cultivated, beautified, and brought under dominion. Psalm 115:16 says, “…Even the heavens are the Lord’s: but the earth hath he given to the children of men.”
John Locke pointed out that the human family originally was given the earth as a common gift and they were given the capacity and responsibility to improve it. Locke said, “God, who hath given the world to men in common, hath also given them reason to make use of it to the best advantage of life and convenience.” He also pointed out that men were commanded to subdue it and have dominion over it in Genesis 1:28.
Since dominion means control, and control requires exclusiveness, private property rights became an inherent aspect of being able to subdue the earth and bring it under dominion. Without private individual property rights, it would have been completely legal for someone to come and take the property that another had cultivated, taking the fruits of their labor. And even then, without property rights, someone stronger then he could come and take the property from him.
If there were no property rights, four things would occur, that would frustrate the Creator’s command to multiply and replenish the earth and subdue it, bring it under dominion.
If the example above occurred, then it would completely destroy the incentive of an industrious person to develop and improve more property.
The industrious person would also be robbed of the fruits of his labor. This would also encourage bands of robbers to be tempted to go around the country and confiscate by force and violence all the good things that others had painstakingly and frugally acquired.
Until finally leaving men to exist on a level of hand -to -mouth survival because if they had gained any property of significance, they would be robbed.
Locke also pointed out the fact that property is an extension of a person’s life, energy, and ingenuity. So, to destroy or confiscate such property is to literally attack the life of that individual. When an individual has cultivated a farm, created a thing of beauty, or secured a wage for their labor, they have literally projected their very being, the very essence of their being, the very essence of their life into that labor. The work of our hands and the labor of our bodies belong to us.
Locke also brings up an important question, If all things were originally enjoyed in common with the rest of humanity, would and individual have to get the permission of every other person on earth before he could call certain things his own? Locke has said, “That Labour … added something to them (the acorns or apples) more than Nature, the common mother of all, had done, and so they became his private right. And will any one say he had no right to those acorns or apples he thus appropriated because he had not consent of all mankind to make them his? If such consent as that was necessary, the man would have starved, notwithstanding the plenty God had given him….It is the taking any part of what is common, and removing it out of the state Nature leaves it in, which begins the property, without which the common gift of God is of no use. Thus this law of reason makes the deer that property of the Indian that hath killed it; it is allowed to be his goods who hath bestowed his labor upon it, though, before it was the common right of every one.”
It is important to recognize that common law doesn’t make property sacred, but only the right which someone has acquired in that property. Justice George Sutherland of the U.S. Supreme Court once told the New York State Bar Association:
“It is not the right of property that is protected, but the right to property. Property, per se, has no rights; but the individual, the man, has three great rights, equally sacred from arbitrary interference: the right to his life, the right to his liberty, the right to his property. These three rights are so bound together as to be essentially one right. To give a man his life but deny him his liberty, is to take from him all that makes his life worth living. To give him his liberty but take from him the property which is the fruit and badge of his liberty is to still leave him a slave.”
Abraham Lincoln also said, “Property is the fruit of labor. Property is desirable, is a positive good in the world. That some should be rich shows that others may become rich and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another, but let him work diligently to build one for himself, thus by example assuring that his own shall be safe from violence…I take it that it is best for all to leave each man free to acquire property as fast as he can. Some will get wealthy. I don’t believe in a law to prevent a man from getting rich; it would do more harm than good.”
Early American colonists have much to say on this topic because it was a critical issue leading to the Revolutionary War. The effort of the Crown to take their property through various kinds of taxation without their consent was denounced as a violation of the English constitution and English common law. They often quoted John Locke, “The supreme power cannot take from any man any part of his property without his own consent. For the preservation of property being the end of government, and that for which men enter into society, it necessarily supposes and requires that the people should have property, without which they must be supposed to lose that property by entering society, which was the end for which they entered into it.”
John Adams saw private property as the most important single foundation stone undergirding human liberty and human happiness. He said, “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. PROPERTY MUST BE SECURED OR LIBERTY CANNOT EXIST.”
As we have pointed out earlier, one of the worst sins of government, according to the founders, was the exercise of its coercive taxing powers to take property from one group and give it to another. In our own day, when the government has imposed upon us a multiple trillion dollar budget with a portion of it directly coming from “transfer payments” from the tax paying public to the wards of the government, the following words from James Madison may sound strange:
“Government is instituted to protect property of every sort…This being the end of government, which alone is not a just government, nor is property secure under it, where the property which a man has in his personal safety and personal liberty is violated by arbitrary seizures of one class of citizens for the service of the rest.”
In the early years of the American courts it was held unlawful to take property from one group and transfer it to another and completely outside the constitutional power delegated to the government. It was not until 1936, that the Supreme Court began to distort the meaning of the general welfare clause and started to permit the distribution of federal bounties for the poor and the needy. Before this time, it was completely prohibited.
The Supreme Court had declared, “No man would become a member of a community in which he could not enjoy the fruits of his honest labor and industry. The preservation of property, then, is a primary object of the social compact… The legislature, therefore, had no authority to make an act divesting once citizen of his freehold, and vesting it in another, without a just compensation. It is inconsistent with the principles of reason, justice and moral rectitude; it is incompatible with the comfort, peace and happiness of mankind; it is contrary to the principles of social alliance in every free government; and lastly it is contrary to the letter and spirit of the Constitution.”
Dr. Ludwig von Mises made this observation, “If history could prove and teach us anything, it would be the private ownership of the means of production as a necessary requisite of civilization and material well-being. All civilizations have up to now been based on private property. Only nations committed to the principle of private property have risen above penury and produced science, art and literature. There is no experience to show that any other social system could provide mankind with any of the achievements of civilization.”
A question yet remains, if it corrupts a society for the government to take care of the poor by violating the principle of property rights, who will take care of the poor? The answer of those who built America seems to be “Anybody BUT the federal government.”
Americans have never tolerated the suffering and starvation which has plagued the rest of the world, but until the last generation help was given almost exclusively by the private sector or on a community or state level. In his day, President Grover Cleveland vetoed legislation designed to spend federal taxes on private welfare problems. He stated that there was no warrant for such an appropriation to be found in the Constitution and that government should not be in the position to extend itself to the relief of individual suffering, which is not related to public service or benefit. He felt that this type of expansion needed to be resisted that the lesson be enforced that “Though the people support the government the government should not support the people.” He mentioned that friendliness and charity always came through fellow-citizens. Creating systems like this he said, would weaken our national character.
The 28 Principles of Liberty are adapted by Charity Angel from W. Cleon Skousen's book "The 5000 Year Leap" and are sponsored by Fragrant Smoke, your place for incense and incense burners.
Subscribe to:
Posts (Atom)