ABOUT THE AUTHOR: June Grem is a native Chicagoan. She received an A.B. degree

from Stanford University and has worked as an insurance underwriter, secretary, researcher and public speaker. In 1971 she organized Enterprise Publications, Inc. and has been its president since that time. She is married to a physician and is the mother of four children. She has been active in girl scout work, has received the Congress of Freedom award and is listed in the Dictionary of International Biography, Who's Who in the Midwest and Who's Who of American Women. Despite a busy schedule as a homemaker, she found time to become active in the stock market as a technical analyst and chartist. It was through her knowledge of how the stock market operated that she became aware of the Federal Reserve Bank's role in our economy. Everyone actively engaged in the stock market keeps one eye on the Open Market Committee of the Federal Reserve Bank. It is through their manipulations of interest and discount rates, as well as stock margin requirements, that the market is moved up or down, thus ultimately affecting the financial and economic fortunes of our entire nation.

A more penetrating analysis of the forces which control the market led to an investigation of our money system. The results revealed a sinister, well-organized and almost unknown plot to gain control of the entire world through the issuance and control of money. These operations have been shrouded in such, secrecy that very few people either know or suspect that the same forces which control our money, stock market and economy also control the world-wide revolutionary movement.

It is hoped that when people gain an understanding of this vitally important subject of money issuance and control, an informed citizenry will take the necessary steps to reconstruct society on the basis of reason, constitutional law and peace and prosperity for all of our citizens. If America is to survive as a free nation, we must resist all attempts to throw us into a world monetary system.

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Dedication

To Mr Peter Cook

Who is, as yet, unrecognized by many as one of the greatest living monetary analysts of our times.

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CONTENTS

Chapter Page

Foreword ..................................................................................... ix I. THE LIBERTY AMENDMENT ............................................ 1 The Liberty Amendment .............................................................. 5 Section I Promises to get Government out of Business 5 II. DOES THE UNITED STATES GOVERNMENT OWN THE FEDERAL RESERVE BANKS? .......................... 7 Department of the Treasury ..................................................... 7 What Would Getting the Government Out Of The Banking Business Mean to You? ...................................... 9 Operations of the Federal Reserve System................................... 12 This Part of the Earnings Picture is not Generally Known to the Public ................................................. 13 The Board of Governors .......................................................... 16 List of Government Securities Dealers Reporting to the Market Statistics Division of the Federal Reserve Bank of New York 17 The Open Market Committee .................................................. 19 III. A REVIEW OF SECTION II OF THE LIBERTY AMENDMENT ................................................ 22 IV. A REVIEW OF SECTION III OF THE LIBERTY AMENDMENT ................................................ 23 Text of H.R. 17140 .................................................................. 23 V. JERRY VOORHIS AND HIS MONEY BILLS .................... 26 VI. COMPANION LEGISLATION ....................................... 29 VII. A BRIEF ANALYSIS OF THE MONEY BILLS .... 30 No Constitutional Amendment is Necessary ........................... 32 About the Income Tax ............................................................. 35 VIII. THE NEW MONEY SYSTEM ....................................... 47

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Constitutional Money Bill ..................................................... 47 How Will the New Money System Work?............................... 51 Foreign Investments in the United States ............................. 55 United States Government Financing .................................. 56 How Would the Government Finance its Own Activities? ..................................................................... 57 IX. PROGRAM FOR SURVIVAL ........................................ 61

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F O R E W O R D

Everybody hates taxes, but throughout history death and taxes have both been accepted as inevitable. However, when taxes approach the confiscatory level there is bound to be opposition. And so it was in California. When Proposition 13, which limited taxes on property was passed overwhelmingly, everybody in the country hailed this great victory. At last the voice of the people had been heard loud and clear and the politicians "got the message." Would any politician dare to oppose tax reduction or the Liberty Amendment, which would phase out the income tax and compel the federal government to cease competing with private enterprise, especially in the face of an imminent nationwide tax revolt? The Liberty Amendment provides that during a three year period, all business enterprises not specified by the Constitution would be sold back to the public. At the end of this time the 16th (Income Tax) Amendment would stand repealed. We wonder who, except the big banks, could afford to buy these money-losing government enterprises. We also wonder what other activities the Insiders have planned for the interim three year period, should the Liberty Amendment be adopted.

Tax reduction and limitation ideas have begun to mushroom in other states and even now, before Congress there is a bill in committee to abolish the income tax. This is House Joint Resolution 23, or the Liberty Amendment.

The big question: Is all this a victory or defeat? We must be wary of the sly maneuvers of the establishment and ask ourselves whether or not the whole fanfare regarding Proposition 13 was planned by the Insiders or was it a spontaneous rebellion by the people. The overwhelming majority of the people involved were concerned with just one thing. Reducing the taxes on their homes which had become so oppressive that many people were obliged to give them up. These people were honest, ordinary citizen tax-payers who believed that this was THE METHOD of finally controlling wild government spending. It was also an expression of rebellion against bureaucratic intrusions in their lives. Howard Jarvis, the man who masterminded Proposition 13,

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has become a national hero. His associate, Paul Gann, is travelling around the country urging the support of a Constitutional Convention which is designed to put a "new constitution" into effect. We wonder if this constitution (or non-constitution) is the one that has been prepared by the Center for the Study of Democratic Institutions, a misnomer if there ever was one. They are located at P.O. Box 4068, Santa Barbara, Ca. 93103, Phone: (805) 969-3281. The Center formerly had offices in New York City and Chicago which have now been closed. Presumably their preliminary work has been completed.

The Center for the Study of Democratic Institutions has been funded by foundation money and has been working on this Soviet-style "constitution" for years. It will effectively cancel all our liberties and transfer total power to government. The "new constitution" or non-constitution, would divide the present regions (formerly states) into "republics." The only source of revenue mentioned in the Center's non-constitution is from corporate and individual incomes. No mention is made of a money system, but it is presumed that the present debt-money system will be retained. What banker or Insider would give up this wonderful plunder! If the Liberty Amendment is passed, the Constitutional Convention will have provided us with a new form of income tax through the Center's non-constitution, which will, no doubt, take effect as soon as it is passed. This will render our present Constitution valueless and of no effect. Hence, passage of the Liberty Amendment would also be meaningless. It would, however, divert attention from the Insiders' gear shifting into new and better forms of individual and corporate tax theft and plunder. Could the Liberty Amendment be the bait for the calling of a constitutional convention?

Another little noticed effect from the passage of Proposition 13 is that the politicians in California haven't taken it lying down. The people of California have unknowingly implemented regional government by relinquishing control over their locally-elected tax assessors and other local officials. Their wrath should have been righteously turned against the local assessors and tax collectors. Now this power is gone. It has been x

moved up to the state which is busily adjusting its budget to allocate the dole of public money to local governments so that they can continue their profligate spending programs. This will effectively control spending and shut out local communities from any say in the matter. Also, it is part and parcel of the Federal program of regionalism which will put the states more readily under the thumb of big brother in Washington.

The way to attack high taxes, whether on individual incomes, corporations, estates or property, is not through any means provided for by the tricksters who have fooled us far too many times. There is only one sensible way to relieve the American people of the outrageous taxes under which this nation is suffering. AND THAT IS REFORM OF THE MONEY SYSTEM. In the pages ahead, the reader will be given insights into the true nature of the Liberty Amendment and its real purposes. During the next few financially chaotic years, no doubt a few "money reform bills" will be trotted out. These are discussed in the text of the book. A sample of a true money reform bill is also given. LET THE VOTER BEWARE. The Insiders are too close to victory to stop now. Since they have achieved everthing so far by lies, trickery and fraud, why expect anything different from them now?

Do not support the Center's non-constitution or any Constitutional Convention. Make it plain to your senators and representatives that you KNOW what it is all about and if they are "in the bankers' pocket" and go along with the non-constitution, throw them out of office. But we must have facts. Since truth and facts are the last thing we can expect from the media we must turn to other sources.

Those who have supported the Liberty Amendment for years should not be angry at this author. I, too, at one time, supported it until I began to study the meaning behind its seemingly innocuous phrases and the inconsistencies of some of the statements made by its proponents. We all want to get rid of the income tax, and stridently limit all others. But, let's do it the right way. Let's do it by establishing a truly honest money system in which all the people will benefit. It can be done or we will be thrown into the chaos and slavery of a world government in which a plastic credit card will be your money. xi

All of your property will be confiscated (stolen) by the money trust to pay off their fraudulent debt. WAKE UP AMERICA. It's time to stop believing lies and being taken in by propaganda. Study the money issue. Be aware of what an honest money system is and what it could do for you and your country. THEN WORK FOR THE TRUE REFORM OF OUR MONEY SYSTEM. When we have a Constitutional and honest money system, the income tax will wither away and be uncollectible. We must not be diverted by diversionary tactics. THE PRIMARY ISSUE IS MONEY ISSUANCE BY PRIVATE BANKS, AND THE FEDERAL RESERVE SYSTEM. The fight should be in this area. If we understand the money issue and begin our fight now, WE CAN WIN!

June Grem

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Chapter I

THE LIBERTY AMENDMENT

"Words are the most powerful drug used by mankind" Rudyard Kipling

Twentieth century America has been besieged by an almost continuous flow of crippling and disastrous legislation. Although the death of our nation has been well planned, the executioners were not organized enough until 1913 to get their Marxist central bank and graduated income tax enacted into law. For decades thereafter, the Federal Reserve Bank was ignored and the income tax was accepted by a docile and law-abiding people. It was only when the gradualism began to escalate to the point of confiscation that ominous rumblings against the income tax began to develop. .

Because of mounting dissatisfaction with this burdensome legislation, it was natural for people to turn to any organization or plan which promised to reduce or eliminate the merciless plunder of America's most productive citizens, the working and middle classes.

The Liberty Amendment seemed tailor made to do the job. Not only would the income tax be abolished by Constitutional Amendment, but, as an added bonanza, it promised to get government out of any business not specifically mentioned in the Constitution. Everyone who abhors the chaos, confusion and regulatory horrors wrought by government meddling would most certainly welcome its exodus from our lives, both personal and corporate.

The Liberty Amendment Committee was founded in Los Angeles in 1944 by Mr Willis Stone and several other men who met to discuss the Sewell Avery Case.1 These men were concerned with the continual invasion by government into the

1Sewell Avery was the Board Chairman of Montgomery Ward & Co. who had been physically removed from his office by United States soldiers.

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lives of citizens and wanted to form an organization which would combat these evils. Thus the Liberty Amendment Committee was formed. The Liberty Amendment Committee was formerly located at 8413 Franklin Avenue, Los Angeles, Ca. 90028, and Mr Stone was its chairman until 1976 when he retired. Since his retirement, he has continued to tour the country in speaking engagements on behalf of the Liberty Amendment.

After Mr Stone's retirement, headquarters were moved to Provo, Utah, and Mr W. Cleon Skousen headed up the organization until January of 1979. The Liberty Amendment Committee is now located in El Cajon, Ca., 92021, P.O. Box 2386, (714) 442-8045 and tax fighter Armin Moths is the new chairman. The Liberty Analysis Committee (its research arm) is still in Provo, Utah, at 839 No. 700 East, 84601. Their phone number is (801) 374-1800.

How did the Liberty Amendment Committee plan to eliminate the income tax, the sacred darling of the Marxist banking crowd; their primary weapon for the theft of the wealth produced by others? Its plan was to establish a nationwide organization which would distribute literature, inform citizens of the appaling waste in government, and urge disgruntled taxpayers to put pressure on state legislatures to repeal the income tax via the Constitutional Amendment route.

During the years since its founding it has built an impressive organization with local committees in thousands of communities through the country. It has a speakers bureau, and a diversified list of books and publications, as well as film strips, records and cassettes. The bi-monthly magazine FREEDOM has been replaces by occasional issues of REPORT ON FREEDOM.

Article V provides that the Constitution may be amended as follows. If two thirds of both Houses of Congress approve an amendment, it will then be submitted to the States. The amendment will become law if three quarters of the states so approve. Or, two thirds of the states may call a convention for the purpose of proposing amendments, which would then become law if three quarters of the states ratified the amendment, after having been submitted to them by Congress. The second type of amendment is initiated by the states, the

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first by Congress. The Liberty Amendment Committee chose the second method.

When two thirds of the states approve this legislation, it would be submitted to Congress for the calling of a Constitutional Convention. (Could this be a tie in with the present proposed Constitution Convention?) Congress would then submit the proposal to all fifty states. If three quarters of them vote in favor of the measure, it becomes law. Remember, approval by a state does not constitute ratification. Thus far, after over thirty years, only seven states have approved the Liberty Amendment. This is a cumbersome, time consuming and round about way of attacking the menacing problem of our Marxist money system, of which the income tax is merely one manifestation. Even now, with the income tax as a number one on people's hate parade, it is doubtful if many states will approve the plan because it has four separate sections. This type of "packaged" legislation must be adopted in toto exactly as it is worded. For this reason alone, it might be difficult to get the required number of states to approve this legislation. The Liberty Amendment has suddenly popped up in Congress under House Joint Resolution No. 23. All this has transpired in conjunction with the passage of Proposition 13 in California. The California referendum declared that the tax on the land would not rise more than 1% per year of the Assessment of the properties.

The Jarvis Amendment also requires a 2/3 vote of the legislature to increase sales taxes, income taxes or any other taxes. This is fine unless the California legislature is filled with spendthrift Socialist meddlers. The question is, were the people of California tricked? The assessors could always increase the municipal assessment of property. It would have been better to have completely abolished the land tax. This could easily be accomplished under a legal and ethical money system. People should rebel against the banking system and demand financing without taxes instead of financing with taxes through the fake credit creation of the banks.

We must also remember that nowhere in the Constitution is the Federal Government authorzied to engage in its multi-faceted Socialist, anti-business and anti-people activities.

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These programs are already unconstitutional and illegal. Since the law-defying Congress has been busily ignoring and flaunting the Constitution for decades, why would another Constitutional amendment change their attitudes? This situation will continue unabated until grass roots America finally becomes enraged enough to oust the lawbreakers from government and replace them with people who will represent the interests of this nation and not alien and special-interest groups.

Since there is an easier and more effective way to get the income tax repealed, why hasn't it been utilized? The most effective method would be to have ONE STATE DECLARE THE 16th AMENDMENT ILLEGALLY RATIFIED. The Supreme Court would then have to rule on the question. While we might not expect too much from the bar association types enthroned in their privileged sanctuary, it would put them on the spot and force a decision one way or another. It would also focus a great deal of attention on this matter and force many a fence-straddling politician to take a definitive stand on the issue. Ohio was not legally a state in 1913, therefore the 16th Amendment failed to meet the requirements of having 36 states ratify the Amendment. The politicians in Ohio who railroaded its 1802 Constitution through, never submitted it to the people for ratification. This, too, violated the provision guaranteeing that all states will have a republican form of government. Congress attempted to write a finale, to this outrageous situation by passing a Joint Resolution for admitting the State of Ohio into the Union on August 7, 1953. This Joint Resolution is Public Law 204 and is found in 67 U.S. Statutes at Large, page 407. The Joint Resolution further provided that "it shall take effect as of March 1, 1803" (or 150 years retroactively). Art. I, Sec. 9 prohibits the passing of retroactive laws. It would be interesting to observe the methods used by the Supreme Court to wriggle their way out of this one. Liberty Amendment supporters have spent thousands of dollars and thousands of hours working for the adoption of this legislation. According to the Liberty Amendment Committee: "Over 6,000 organizations have passed resolutions of support. These include service clubs, patriotic organizations, political clubs, labor unions,

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trade associations, medical associations and others."1 At this point perhaps we should ask whether or not its passage would accomplish what its supporters expected, or have they been kept busy "spinning their wheels" working for legislation which has little likelihood of becoming law, and which, if passed, would not achieve the hoped-for results. Examine the facts and make up your own mind.

THE LIBERTY AMENDMENT

Sec.I: The Government of the United States shall not engage in any business, professional, commercial, financial or industrial enterprise except as specified in the Constitution.

Sec.II: The Constitution or laws of any state, or the laws of the United States shall not be subject to the terms of any foreign or domestic agreement which would abrogate this amendment.

Sec.III: The activities of the United States Government which violate the intent and purpose of this amendment shall, within a period of three years from the date of the ratification of this amendment, be liquidated and the properties and facilities affected shall be sold. Sec.IV: Three years after the ratification of the amendment the sixteenth article of amendments to the Constitution of the United States shall stand repealed and thereafter Congress shall not levy taxes on personal property, estates and/or gifts.

SECTION I PROMISES TO GET GOVERNMENT OUT OF BUSINESS

Almost everybody, except the Socialist busybodies and people-hating leftists would agree with this premise. Wherever government exists we find the ghastly evidence of bungling, corruption, monumental waste, favoritism, political tyranny and plunder. Certainly "our government" has proved itself to be the dedicated enemy of majority America, and has shown itself

1Your Introduction to the Liberty Amendment, by the Liberty Amendment Committee of the U.S.A., 6413 Franklin Ave., Los Angeles, CA 90028.

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over and over again to be the least qualified institution on earth to run anything properly — even itself. Before we streak off to support another piece of legislation, however, let us make sure that we know exactly what it is proposing. We have been fooled too many times. If government is to be gotten out of business, what business is meant? The Constitution never specified that the government could engage in any business, therefore, should we conlcude that the getting out of business refers to "the banking business" or, as the Liberty Amendment puts it, "financial enterprise." This is a very important point. It is probably the key to the entire matter.

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Chapter II

DOES THE UNITED STATES GOVERNMENT OWN THE FEDERAL RESERVE BANKS?

One of the cardinal tenets of the Liberty Amendment Committee is that the Federal Reserve System is government owned and operated and that the Treasury Department receives more than "98% of the profit" (plunder). To substantiate their argument that the Fed is a part of the government, listing in the United States Organization Manual is cited. Reference is also made to figures in the Treasury Bulletin regarding some receipts of money from the Federal Reserve System.

First of all, listing in the United State Organization Manual is no indication of government ownership. Such organizations as the World Bank, IDA (International Development Association), a World Bank Affiliate, IMF, Organization of American States and the UN, just to mention a few, are also listed. The United States acquired "membership" (underwriting privileges) in these organizations through treaties. In fact, the UN is listed as an "international organization." Furthermore, in a chart outlining the Treasury Department, the Federal Reserve System is not even shown.

DEPARTMENT OF THE TREASURY1

Here is other evidence showing that the Federal Reserve System is not government owned.

1. Employees of the Federal Reserve System are not under Civil Service.2

2. Employees have their own pension system: The Thrift Plan. 80% of the money is invested with the Equitable Life 1 United States Government Manual, 1975-1976 edition, p. 394.

2U.S. Statistical Abstract, 1970 ed., page 396, and Title 5, Gvt. Organization & Employees, Sec. 5314.

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Assurance Society and the remaining 20% with Prudential Life Insurance Company and the Morgan Guarantee and Trust Company.1

3. The Federal Reserve Banks have been exempted from payment of income taxes by legislative action. (Government Departments do not pay income taxes.)2

4. The Government Corporation Control Act of 1945 exempted the Federal Reserve System from audit. (All government agencies are audited annually by the General Accounting Office.)

5. Federal Reserve Banks pay their own employees and executives with their own checks.

6. Reserve Banks use stamps and postage in their mailings. U.S. Government departments mail postage free.

7. Federal Reserve Banks and branches pay real estate taxes. U.S. Government departments and agencies do not.

Perhaps the words of the late, great Hon. Louis T. McFadden best describe the situation: In his Collective Speeches to Congress, he said: "The Federal Reserve is a government created private corporation. It is a quasi-government agency in which the President appoints the directors of the Board of Governors, but the Bank pays their salaries. The Government has NO CONTROL over the Fed."

While the President may appoint the head of the Board of Governors, he has no power to remove him. The Federal Reserve Bank has been called the fiscal agent of the 1 Hearings before the Committee on Banking and Currency, House of Representatives: To provide for an Audit of the Federal Reserve System by the General Accounting Office, H.R. 10265, 93rd Congress, Oct. 2 and 3, 1973, p. 99.

2 U.S. Code, Title 12, Sec. 531.

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government. The exact opposite is the more correct view. The government is the fiscal agent of the Federal Reserve Banking empire and is totally under the control of the Bankers, both national and international.

Why does the Liberty Amendment Committee so vehemently contend that the Federal Reserve System is part of the United States Government despite overwhelming evidence to the contrary? The answer is that if they admitted that this octopus were a private banking monopoly which has been illegally granted the privilege of creating the nation's money and credit, they "couldn't get government out of the banking business." AND THIS IS THE CRUX OF THE ENTIRE MATTER. It is the real, but never mentioned, reason for the existence of the entire movement. To "remove government" from the banking business would involve the payment of billions of dollars in illegal gains to these banking shylocks. They would just "change hats" and move into the Treasury Department. Nothing would change except titles. BUT, they would have total and complete power over the nation's financial institutions now and Congress would have lost its last chance to REVOKE, RESCIND, AND REPEAL the outrageous Federal Reserve Act. An example is England. The only redress the people now have against the Bank of England is revolution.

WHAT WOULD GETTING THE GOVERNMENT OUT OF THE BANKING BUSINESS MEAN TO YOU?

First and foremost, THE GOVERNMENT IS NOT IN THE BANKING BUSINESS, so how can it be "gotten out of" something it is not in? Does the government's printing of Federal Reserve notes for the Federal Reserve Bank constitute "being in the banking business?" Of course not! Also, if the government were to "buy back" the stock of the Federal Reserve Banks, would this constitute engaging in the banking business? Who are the stockholders and where is the stock? Nobody seems to know.

The sovereign right of a nation to issue its own money and credit must never be regarded as a banking function. The truth is that the banks have usurped this sovereign power because of

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stupidity, legislative laxity, corruption and treason. Passage of the Liberty Amendment would remove what few rights Congress still has over the Federal Reserve System, which, at this point, is ONLY THE RIGHT OF REPEAL. The whole Liberty Amendment scheme is a hoax to further entrap Americans so that the final noose of enslavement might be twisted around our ever-trusting necks.

We must not overlook the generous support Congress has given to such other international, non-government financial institutions as the World Bank, IMF, Inter-American Development Bank, Asian Development Bank, plus a host of other financial institutions. Does "getting the government out of the banking business" mean a cessation of all appropriations to these supra-national financial empires? We wish to that extend it would. But this is not what is meant by this deceptive phrase. United States relationship to these institutions is of a contributory nature only. The management is totally international and even those officials who may hold United States citizenship are, in reality, world citizens. They pay no income taxes, travel on diplomatic passports and the United States Government has absolutely no right of management or control over these institutions or individuals. It cannot enter the premises of these banks, even when located within the limits of this nation, to serve suppoenas, audit its books, arrest executives or employees or exercise any other type of control. Obviously the United States is not "in the banking business" in any sense of the word in its relationship to these financial institutions.

Many supporters of the Liberty Amendment may not be aware of the historic nature of the controversy regarding the government's alleged involvement or non-involvement in the banking business. Opponents of honest, Constitutional money have always taken the position that the Constitution never gave the government any authority to issue money, but only to "coin money." This is a ridiculous and absurd position. The coinage of a nation always represents but a fraction of the total amount of money and credit. To coin money is a phrase which includes the right to emit not only coins but paper money and bonds. If the bankers really meant what they say about the

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"coinage" of money pertaining exclusively to dimes, quarters, etc., watch them scream if their illicit power to deal in the credit aspect of money were suddenly taken away from them. The nation's wealth is produced by the people and not by the banks. The government should create the medium of exchange so that the creators of wealth (productive citizens) may exchange their goods and services without incurring debts to private banks.

The controversy regarding the government's involvement in the banking business is as pertinent in 1979 as it was in 1876. For example, Mr Horace White, a banker apologist of that period, in his book, Money and Banking, wrote that he was opposed to the Government being in the Banking business, and was opposed to having the Government create Treasury Notes unless based on the gold which was controlled by the Wall Street International Bankers.1

Since the Liberty Amendment Committee contends that the government is in the banking business and that it must be ousted from these activities, it points to certain figures published in the Treasury Bulletin showing the income received by the Federal Government from the Reserve System. Liberty Amendment apologists also contend that the government pockets over 98% of the earnings of the entire Reserve System. We should be entitled to know if this is true or not.

In order to understand these Figures, we must be aware of just what this income represents. The amounts in question indicate the interest earned from the U.S. Treasury notes and agency bonds which are held by the various Reserve Banks throughout the country. After deducting all their expenses, the remainder is returned to the Treasury Department. Always bear in mind that these banks do not pay face value, or even a discounted price for securities pruchased, but obtain them for pennies by simply "paying for them" with their own bank-created funds. It is the power to create credit against miniscule fractional reserves which commercial and Reserve banks employ that is the primary cause of inflation and the debauching of our currency. How would you like to buy a

1Andrae B. Nordskog, Spiking the Gold (Los Angeles, Ca., Gridiron Publishing Co., 1932).

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couple of billion dollars worth of bonds (or goods and services) for just the cost of printing?

OPERATIONS OF THE FEDERAL RESERVE SYSTEM

The operations of the Federal Reserve System may be divided as follows: a) The Federal Reserve System: includes the 12 Federal Reserve banks and their branches scattered throughout the country.1 b) The Board of Governors c) The Open Market Committee

In 1972 the amount returned to the Treasury from this source was about $3.8 billion. It rose to $4.3 billion in 1973. Remember that even these billions are pitifully small in comparison to the current $47 billion interest tab now paid on the national debt alone. This fraudulent government debt of $47 billion has been created because of the existence of our debt-money system under which the government borrows all of its money and credit from this illegally-constituted banking monopoly. The cheeks issued to the U.S. Treasury by the Fed are merely bookkeeping creations by them and represent no funds, but credits created out of thin air.

"Federal Reserve Bank credit, therefore, as already stated, does not consist of funds that the Reserve authorities "get" somewhere in order to lend, but constitute funds that thev are EMPOWERED TO CREATE."2 (Emphasis added)

1"The Federal Reserve System derives income from interest received from its government bond portfolio. Monies not spent from this income are returned to the Treasury." (Hearings Before the Committee on Banking and Currency, ibid., page 85).

2The Federal Reserve System, Its Purpose and Functions, published by the Board of Governors of the Federal Reserve System, Washington, D.C., 1939, page 85.

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You will never find the following information in the literature of the Liberty Amendment Committee:

"The Federal Reserve doesn't 'get the money, it creates it.' When the Federal Reserve writes a check, it is creating money. This can result in an increase in bank reserves — a demand deposit — or in cash; if the customer prefers cash, he can demand Federal Reserve Notes, and the Federal Reserve will have the total money-making machine. It can issue money or checks. And it never has a problem of making its checks good because it can obtain the $5 and $10 bills necessary to cover its checks simply by asking the Treasury Department's Bureau of Engraving to print them."1 (Emphasis added)

THIS IMPORTANT PART OF THE EARNINGS PICTURE IS NOT GENERALLY KNOWN TO THE PUBLIC

If the Treasury Bulletin reports of the budget receipts from the Federal Reserve System were their only source of income, why would even a reluctant Banking Committee hold hearings for an adult? The truth is that over 95% of the tax-free earnings of the Reserve System are never reported. Never let it be thought that this banking cartel has overlooked a single item in corralling funds from every imaginable source. Its sources of income include the following: 1. Interest and fees from loans 2. Income from purchase and sales of Federal funds 3. Interest and dividends from securities a. U.S. Treasury securities b. Other U.S. Govt. securities (agencies and corpo-

1 Subcommittee on Domestic Finance. Committee on Banking and Currency. House of Representatives. 88th Congress, 2nd Session, Sept. 21, 1964.

2Federal Reserve Bulletin, Board of Governors, Washington, D.C. 20551, 21, 1964.

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rations) 4. Obligations of States and political subdivisions 5. Trust department income 6. Other charges, fees, etc.

Remember that by law all Federal Reserve Notes are obligations of the Federal Government. When the Treasury Department receives an order to print up say $50,000.00 worth of paper "money", we can summarize the transaction as follows:

The Treasury has received the $50,000.00 cash, whereas the Federal Reserve has received and will receive on a 30 year bond the following: $50,000.00 from the Bureau of Engraving $50,000.00 from the Treasury when the bond matures $60,000.00 interest on the bond $2,700,000.00 on loans to John Q. Public $2,860,000.00 total.2

(Computed at 5% interest. As interest rates go up, so do profits.) No other profit machine like this ever existed in the history of our planet.

The U.S. Government bonds held by the Federal Reserve Bank went from $16,000,000 in 1914 to $107,148,000,000 in 1977. Many of these bonds have been paid but have been "rolled over" and still collect interest. The billions earned from its bond portfolio constitute only a fraction of their total tax-free income. Other sources include their overseas trans-actions. The latest figure available constituted "$17 trillion

1Federal Reserve Bulletin, Board of Governors, Washington, D.C. 20551, June 1975.

2Wicliffe B. Vennard, Sr., The Solution to the Federal Reserve Fraud, Hawthorne, Ca., Omni Publications, 1968, p.4

31914-1938, Historical Statistics of the United States from Colonial Times, Washington, D.C., Dept. of Commerce, Bureau of Census. 1939-1977: Economic Report of the President, January 1978. Washington, D.C, U.S. Government Printing Office.

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worth of transactions by wire."1 The so-called balance o payments is in reality "a form of credit that is extended"2 by central banks and manipulated by them in violation of the Constitution. The wire transactions include not only central banks but commercial multi-national banks as well. Of course, this figure does not represent pure profit, but total transactions. But the volume alone indicates that huge amounts of money were made out of these transactions.

Until we rid ourselves of this private money monster and its fellow vampire commercial banks, our nation will continue to flounder in a monetary mess. It is up to the citizens to inform themselves of the facts and correct them before we are drawn into the next step of the monetary noose which is being prepared for us — a credit card system and then a world monetary unit. THIS MUST BE AVOIDED AT ALL COSTS. And don't forget possible devaluation of the dollar by giving you, the sucker, one new dollar for every ten or twenty Federal Reserve Notes (or bank credits) you now have. The same scenario has been repeated by the Socialist-Communist bankers in many countries. Now its our turn. It can only be prevented if enough aroused Americans can regain control over those who supposedly represent us and vote in a Constitutional money system.

"If all the bank loans were paid, no one would have a bank deposit and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit If the banks create ample synthetic (bank credit) money, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of

1 Hearings before the Committee on Banking and Currency, House of Representatives, 93rd Congress, H.R. 10265, Oct. 2 & 3, 1973, p. 123.

2lbid., p. 122.

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our hopeless position is almost incredible, but there it is. It (the private credit money monopoly) is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied soon."1

THE BOARD OF GOVERNORS

In 1921 the General Accounting Office (GAO) was created with audit authority over the receipt, disbursement and application of public funds. From 1921 to 1933 the Board of Governors, but not the Federal Reserve Banks, came under the GAO's scrutiny. In 1933 Congress voted to remove the Board of Governors from the jurisdiction of the GAO. This left the Board of Governors to "the determination of its own internal management policies." It was alleged that non-interference (by the government or banking committees) would provide better monetary and credit policies. Better monetary and credit policies for whom? Certainly not the long-suffering American taxpayers who have footed the bills for this unholy counterfeiting agency.

The Board of Governors has broad powers which include the internal management of the entire Federal Reserve System, regulation of reserve requirements for member banks and control of interest rates and margin requirements for the stock market. It also determines fiscal policy for the entire nation by manipulating the nation's money supply through the purchase and sale of government bonds and securities. It also supervises Open Market Committee activities and selects the dealers who will be privileged to deal in the highly-profitable U.S. government bond market.

It might interest many readers to learn the identity of the top thirty five dealers, of which over twenty are in New York City. The rest are scattered throughout the country in financialcenters. 1From Senate Document No. 23, page 102, January 24, 1939. Robert H. Hemphill, 8 yrs. Credit Manager of the Federal Reserve Bank in Atlanta.

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LIST OF THE GOVERNMENT SECURITIES DEALERS REPORTING TO THE MARKET STATISTICS DIVISION OF

THE FEDERAL RESERVE BANK OF NEW YORK

Bache Halsey Stuart Shields, Inc. Bank of America NT & SA Bankers Trust Company A.G. Becker Incorporated Blyth Eastman Dillon Capital Market, Incorporated Briggs, Schaedle & Co., Inc. Carroll McEntee & McGinley Incorporated The Chase Manhattan Bank, N.A. Chemical Bank Citibank Continental Illinois Bank and Trust Co. of Chicago Crocker National Bank Discount Corporation of New York Donaldson Lufkin & Jenrette Securities Corp. The First Boston Corporation First National Bank of Chicago First Pennco Securities, Inc. Goldman, Sachs & Co. Harris Trust and Savings Bank E.F. Hutton & Company, Inc. Aubrey Lanston & Co., Inc. Lehman Government Securities Incorporated Merrill Lynch Government Securities, Inc. Morgan Guaranty Trust Company of New York Morgan Stanley and Co., Inc. The Northern Trust Company Nuveen Government Securities, Inc. Paine, Webber, Jackson and Curtis, Inc. Wm.E. Pollock & Co., Inc. Chas. E. Quincey & Co. Salomon Brothers Second District Securities Co., Inc. Stuart Brothers N.Y. Hanseatic Division United California Bank

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Dean Witter Reynolds Incorporated

This money market consists of U.S. Government and Agency bonds, negotiable Certificates of Deposit, as well as corporate and municipal bonds, bankers acceptances, etc.

"The government security market is the heart of the money market."2

And, believe it or not, the volume in the money market is between ten and fifteen times greater than that of the stock market.

"If one includes the trading in corporate and municipal bonds, bankers acceptances, CD's sold directly by banks and other similar instruments — much of which is not centrally reported, the total money-market volume reaches an estimated $8-10 billion per day."3

Commercial banks also enjoy the privilege of writing their own checks against minimal reserves to pay for the securities and bonds purchased in the money markets. Their customers, however, which include insurance companies, state and local governments, corporations and individuals, must pay for these securities and bonds in earned or borrowed money. Thus we can see how the Reserve authorities, and to a slightly lesser extent the commercial banks, are able to underwrite their purchases in the stock and money markets by writing checks against a fraction of their reserve funds. This is the side of the securities and money market which is not generally known by

1This list has been compiled and made available for statistical purposes only and has no significance with respect to other relationships between dealers and the Federal Reserve Bank of New York. Qualification for the reporting list is based on the achievement and maintenance of reasonable standards and activity. Market Statistics Division, Federal Reserve Bank of New York, May 16,1978.

2Martin D. Weiss, The Money Panic, (New York: Latham Process Corp., 1975), p. 38.

3Ibid., p. 372.

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the public and the one which the pro-banking elements want concealed at all costs.

THE OPEN MARKET COMMITTEE

This is the elite group that sets policies for the "purchase and sale of U.S. Government and Federal agency securities, bankers acceptances, and foreign exchange."1

The functions of the Open Market Committee are best 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

These men have a virtual monopoly and stranglehold on the economic well-being of our entire nation. Their policies can make credit easily available or unavailable, interest rates high or low, business prosper or stagnate. Every municipality, individual and business is directly and intimately concerned with the decisions which are made by this small group of usuror imposters. Their decisions are not made with any concern for the well-being of our nation or economy, but for the sole purpose of furthering their global, collectivist empire building.

The fiscal transactions of the Open Market Committee are so vast that they make the national debt seem paltry in comparison. The Audit Hearings of this dictatorial group are most revealing.

Excerpts from the testimony of Gov. George W. Mitchell, Vice-Chairman, Board of Governors of the Federal Reserve System, and former House Banking Committee chairman, Wright Patman, are quoted below:

1Open Market Operations, by Paul Meek, Federal Reserve Bank of New York, 1973.

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

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The Chairman: "The Open Market Committee had transactions last year, I believe it was of $738 billion. In other words, it was between $2 and $3 billion a day. Somebody made money on that." Mr Patman added that "the Federal Reserve had at least a trillion dollars in transactions during that year." (1971).

Mr Mitchell: "Our portfolio is $75 billion. That is what we own in government securities." (He carefully dodged the other issue.)1

Mr Mitchell also supplied the following information on the Federal Reserve Bank of New York. The assets in custody for foreign official and international accounts were $15.5 billion in earmarked gold and $55.9 billion in U.S. Treasury securities. The New York Fed also has a wire service with foreign central banks and in 1972, according to Mr Mitchell's testimony, there were about $17 TRILLION WORTH OF TRANSACTIONS BY WIRE IN ONE YEAR.2

We must never forget that bonds and securities involving billions are "purchased" in one of the following ways: a) a bond is "rolled over" or exchanged for another; b) reserves are temporarily reduced by the purchasing bank; c) a check is written against no funds, e.g. funds created at the time of the transaction. Or, as Silas Adams in his Legalized Crime of Banking describes it:

"Banks buy notes and other investment obligations and pay with new deposits; sell notes and other investment obligations, and take deposit credits for them. Pay nothing for what they get; get cash for what they sell."3 1Hearings Before the Committee on Banking and Currency: House of Representatives, H.R. 10265, Oct. 2 & 3, 1973, pp. 116-117.

2Hearings Before the Committee on Banking and Currency: House or Representatives, H.R. 10265, Oct 2 & 3, 1973, pp. 116-117.

3Silas Walter Adams, The Legalized Crime of Banking, (Hawthorne, Ca. 90250, Omni Publications, 1958)

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Although the Federal Reserve Bank now possesses stranglehold power over the American economic scene, it is still seeking more. A bill was introduced in July, 1975, which outlined the plan by the Federal Reserve Bank for the taking over of all banks and financial institutions in the nation.1 This bill would extend the Board's authority to impose reserve requirements on all depository lending institutions and thereby control the volume of their lending activity. This power would extend to all non-member commercial banks, mutual savings banks, savings and loan associations, and even credit unions. This bill has not yet passed, but should the Liberty Amendment become law, passage of this bill would be unnecessary as the new powers given to the Monetary Authorities under its terms would incorporate all of these features, plus the added benefits of international gold and other lending and trading practices.

A great deal of attention has been given to Section I of the Liberty Amendment because the core of the proposed legislation rests upon the money question. The following chapters will briefly review the remaining sections of the Liberty Amendment.

1Congressional Record, Thursday, July 17, 1975, Vol. 121, No. 113, pp.H7024-7028.

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Chapter III

A REVIEW OF SECTION II OF THE LIBERTY AMENDMENT

Section II contains a tremendous amount of appeal to people who are outraged by continual foreign alliances and bondage to other nations. The vague wording in this section DOES NOT REPEAL ANY EXISTING TREATY, INCLUDING THE UNITED NATIONS CHARTER. Therefore, it will have no effect whatsoever on any currently-existing or future treaties. It is a deceptive trap. Furthermore, our present crop of social-experiment type "justices" on the Supreme Court treat treaties as the "Supreme law of the land." They would, in effect, say that no law or Constitutional Amendment will supercede treaties.

By what line of reasoning can we believe that those who have already stretched the Constitution out of shape will suddenly adhere to it — unless, of course, it suited their decision of the moment.

Since our Constitution now declares treaties to be the supreme law of the land, the section in the Liberty Amendment pertaining to treaties affecting that Amendment only is redundant. This paragraph was probably inserted to make it more appealing to many people. Its phraseology otherwise serves no tangible purpose.

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Chapter IV

A REVIEW OF SECTION III OF THE LIBER TY AMENDMENT

The primary purpose of the Liberty Amendment has always been the repeal of the Income Tax Amendment. If this is so, why wasn't it simply confined to the repeal of the 16th Amendment? Also, the fact that it would not take effect until three years after passage indicates that some very important interim activity can be expected in connection with our money system.

It is the opinion of this writer that the Liberty Amendment has nothing to do with income taxes. It is a clever maneuver to set the stage for the next step: a brand new money bill which will "return to Congress the right to coin and regulate its own money." An updated "buy back the Federal Reserve Bank" bill will make a much-heralded debut, backed, no doubt, by some of the most prestigious conservative organizations in the nation.

Although many people may not be aware of it, the Liberty Amendment was introduced in Congress as H.R. Res. 23 by John R. Rarick (D)La., John H. Rousselot (R), Calif., and John G. Schmitz (R), Calif. Also, while Mr Rarick was still in Congress he introduced H.R. 17140 in 1970 and the same bill again in 1971 as H.R. 351. The bills were referred to the Committee on Banking and Currency but never got out of Committee.

Here is the text of H.R. 17140

91st Congress 2nd Session H.R. 17140

IN THE HOUSE OF REPRESENTATIVES April 21, 1970

Mr Rarick introduced the following bill, which was referred to the Committee on Banking and Currency.

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A BILL

To vest in the Government of the United States the full, absolute, complete and unconditional ownership of the twelve Federal Reserve Banks.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That

(a) the Secretary of the Treasury of the United States is hereby authorized and directed forthwith to purchase the capital stock of the twelve Federal Reserve Banks and branches, and agencies thereof, and to pay to the owners thereof the par value of such stock at the date of purchase.

(b) All member banks of the Federal Reserve System are hereby required and directed to deliver forthwith to the Treasurer of the United States, by the execution and delivery of such documents as may be prescribed by the Secretary of the Treasury, all the stock of said Federal Reserve Banks owned or controlled by them, together with all claims of any kind or nature in and to the capital assets of the said Federal Reserve Banks, it being the intention of this Act to vest in the Government of the United States the absolute, complete and unconditional ownership of the said Federal Reserve Banks.

(c) There is hereby authorized to be appropriated, out of any funds not otherwise appropriated, such sums as may be necessary to carry out the purpose of this act.

* * * * *

From the wording of this bill it appears that a transfer of stock will be accomplished, BUT NOTE, the government (taxpayers) will pick up the tab for "all claims of any kind or nature" and the banks will be reimbursed on a dollar for dollar basis. Also please note that there is absolutely no mention in the bill of how money will be issued, who will have the authority for its issuance, whether or not bonds will continue to be the basis for our money or whether or not it will be a debt

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and interest free money. This bill is obviously so incomplete that its contents would be supplemented and implemented by hand-picked and subservient legislative aids in Congress.

I am not questioning the sincerity of the sponsors of the bill, including ex-Congressman Rarick. Many of his supporters are untrained in the devious propaganda surrounding money problems and the pitfalls contained in its seemingly beguiling language. The Voorhis Bill, H.R. 8209, of January, 1940, had similarities to the Rarick Bill. These bills would do away with the Federal Reserve Bank in name only. Money issuance would not be nationalized, but would assure the super Capitalist-Socialists, who are presently manipulating our money and economy, a continuation of their exploitive global financial plunder. Can anyone be so naive as to imagine that with victory in sight, and Congress under its total control, that a bill (which would no doubt pass) would change things for the better (for the citizen, that is!)? We must be more wary now than ever for traps to be set which will ensnare us even further into the global dictatorship which is presently nearing completion.

This should prove that the "Buy Back the Federal Reserve Bank" bills are the real objective for the smoke screen raised by the Liberty Amendment Committee. During the three year period, Conservatives will believe they have achieved a victory and attention will be diverted from the "new" (non)con-stitution which the planners hope to put into effect. It will provide for income taxes. TAXPAYERS, BEWARE!

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Chapter V

JERRY VOORHIS AND HIS MONEY BILLS

Since Jerry Voorhis has played an important role both in Congress and on the legislative scene, let's take a closer look at this man in order to determine his qualifications for introducing a money-reform bill.

The former Congressman from California has been regarded by many as a staunch conservative, especially by supporters of money reform. From 1939-1941 he was a member of the House Committee on Un-American Activities. BUT: he was listed as an official of the United World Federalists in their 1951 World Government Highlights publication. A New York Times ad dated November 15, 1957, carried a full page advertisement by the National Committee for a Sane Nuclear Policy. Jerry Voorhis was listed as a signer.

In the official Communist journal, Political Affairs, May 1958 issue, Herbert Aptheker, in his column, Ideas of Our Times, praised Voorhis for having supplied leadership in the drive to end U.S. nuclear testing.

The New York Times, in its issue of September 17, 1959, carried a full page advertisement "WE SUPPORT PRESIDENT EISENHOWER'S INVITATION TO PREMIER KRUSHCHEV." Voorhis was listed as a signer along with Norman Thomas, Steve Allen, Mrs Eleanor Roosevelt and the late Rev. Martin Luther King.

The Tom Mooney Committee, a successor to the American League for Peace and Democracy, listed the Hon. Jerry Voorhis as a committee member. The Tom Mooney Committee was cited as a Communist front on page 130 of the Guide to Subversive Organizations and Publications, House Document No. 398, 87th Congress, 2nd Session, prepared by the Committee on Un-American Activities of the House of Representatives (1957).

In passing, it might be interesting to note that Mr Voorhis did not go along with Wright Patman in his attempt to get an audit of the Federal Reserve Bank in 1974. This same Jerry Voorhis trotted out two "Buy Back the

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Federal Reserve" money bills. The first, H.R. 8209, in January 1940, and H.R. 118, in January of 1943. Sec. 1 (a) of H.R. 118 provided that: The Secretary of the Treasury of the United States is hereby authorized and directed forthwith to purchase from the member banks the capital stock of the twelve Federal Reserve Banks and branches, and agencies thereof, and to pay to such member banks in lawful money or deposits in a Federal Reserve Bank the amount paid by them for such stock ..."

This bill would have created a Monetary Authority which would exercise absolute control over all banks and financial institutions in the nation. Power to issue money would be vested exclusively in the Monetary Authority (not Congress) which could also engage in international gold transactions, as well as the purchase, sale and redemption of United States government bonds. It also gave the Monetary Authority the right to select members from the Board of Governors of the Federal Reserve System for its staff.

With a Monetary Authority possessing even more awesome powers than the Board of Governors now has, it makes little difference who owns the stock of the Federal Reserve System. This bill would have frozen the Monetary Authorities into a position of absolute power over Congress and the Nation. It also would continue the same old debt-money system by inserting the provision for bond dealings by the Monetary Authority. In other words, the government would still be borrowing its money and credit from a monetary monster which would now be housed in the Treasury Department. Their operations would be the same as the Open Market Committee under a different name.

We might as well ask, what would a dedicated internationalist like Mr Voorhis be doing sponsoring a "money reform bill"? Can we believe that a man with such questionable connections would be qualified as the person most likely to sponsor a TRUE money-reform bill, or would we be more correct in assuming that his loyalties remained with the same interests he had always served? In cases like this, actions speak louder than

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words, especially when the words are deliberately ambiguous and intended to achieve just the opposite results to what trusting and propagandized supporters would imagine.

We must be continually on guard for trickery, double talk, double think and double cross in legislative phraseology since lies and deception have always been one of the primary tools in the arsenal of the global slavemakers.

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Chapter VI

COMPANION LEGISLATION

We can see that it would be meaningless to repeal the Income Tax Amendment without settling the problem of the Federal Reserve System and money issuance. Therefore, we should expect that companion legislation will shortly be re-introduced — another "Buy Back the Federal Reserve" bill which will generously reimburse all the member banks for whatever government securities they have by reissuing new ones on a dollar for dollar basis with whatever type of money is to be used. You may be sure that the bankers won't lose a dime on the deal. But you, the taxpayer, will lose everything; your savings, your life insurance, your property and eventually perhaps even your life.

Now if the purpose of such legislation were to let the citizen have an honest money system, we would all approve. Be assured, however, that the deception will continue and very few people will understand or be aware of the nature of the "new money bill." This bill will probably receive the highest acclaim and support from many prestigious conservative organizations. On the basis of people's previous loyalty and support for these organizations, thousands will work long and hard for the passage of what may very well be their passport into the concentration camp of economic slavery.

In order to properly assess the merits of any proposed "money-reform bills", it will be necessary to have certain standards by which they should be judged. The following chapter will briefly review the pertinent aspects which must be known so that we will know what pitfalls to avoid and to be able to properly assess the factors necessary in the eventual establishment of a really new, and truly honest money system.

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Chapter VII

A BRIEF ANALYSIS OF THE MONEY BILLS

We have briefly reviewed several "money-reform" bills which have been submitted to Congress from time to time. A startling similarity among them is the feature which provides for "buying back the stock of the Federal Reserve Bank." Since no part of this stock is owned by the U.S. Government, something obviously can't be bought back which is not now, and never has been owned. No part of the Federal Reserve System is owned by the government. At first a class C stock was intended for purchase by the government but this option was never exercised. So we can see that the "buy back the stock" phrase is merely the first in a series of psychological entrapments.

We cannot "buy back" the class A stock and we certainly shouldn't buy any of the rest, even if we could. It would be the most hideous crime in the history of mankind for the American taxpayer to reimburse these bandit institutions which acquired their wealth and power through their trick money manipulation and credit creations.. The Federal Reserve System should be NATIONALIZED, including ALL CLASSES OF STOCK, whether the stockholders are known or not known, and all of its assets confiscated. Yet, these money bills would ask the exploited American taxpayer to reimburse these robber barons who have been exploiting the American public out of literally trillions of dollars for decades and then let them continue their operations under another name.

True nationalization will be exactly what we mean it to be: OUTRIGHT OWNERSHIP AND CONTROL by the government of the money and credit-creating power. This is what nationalization usually means in other industries and countries. Usually, that is! In the case of banking, however, we must exercise extreme caution because in this area, nothing ever is what it seems to be.

For example, the Bank of England was "nationalized" in 1947. Since that time the purchasing power of the pound sterling has been reduced by over 75%, and England is beset by many economic problems. What deceived the people is the

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belief that the "nationalization" of the bank gave the government control. Clearly, this did not happen. Again, we must be aware of the clever use of upside-down semantics. The British people do not own their money-creating machine. "Nationalization" meant that the treacherous bankers moved right into government premises and continued to tighten their control over the people, their property and the nation. Now the bankers reign supreme and have brought England to the exact point of economic chaos where they may now demand "a new money system;" an international one. This was their goal all along. The same thing will happen here IF WE PERMIT IT.

Many things are happening on the international monetary scene which spell more disasters ahead for the dollar. In January of 1979 Europe adopted its new monetary unit, the ECU, or European Currency Unit, which will be backed to some extent by gold. It will also serve as a form of international currency and be acceptable not only in international settlements, but later it may well be as readily acceptable in Ireland as in Germany. This portends for an international currency, but what will happen to the dollar meanwhile. You may be sure that those bankers who have brought the United States deliberately into semi-pauperism will continue their present course of totally wrecking our currency and economy. Unless we replace the present Congress with sane people, our future looks bleak indeed.

We must remember that the Marxist bankers use reverse psychology. Their revolution is aimed at overthrowing the people of a nation. True, some governments have been overthrown in the past by their highly financed "hit men", but most have been slyly infiltrated and have been under banker control for generations. Who else would have the power and finances available to organize global wars and mercilessly slaughter millions of innocent victims for years after the government has been "overthrown." After the Russian Revolution, and long after the Czar's government had been removed, citizens were slaughtered mercilessly for many years. Why? If the purpose of the revolution was the overthrow of the government, this had been accomplished. The same thing is planned for the United States.

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We do not want a Bank of England situation here. We want true nationalization which means that the bankers WILL BE THROWN OUT FOREVER. The people, through new and reliable representatives, will see that OUR MONEY AND CREDIT is issued by OUR GOVERNMENT, debt and interest free, and in sufficient amounts so that recessions, depressions and inflation can never occur again.

In the discussions of the stock sale in these bills, the specific class of stock has never been classified, clarified or discussed. The Voorhis-Rarick type bill would simply install a Bank of England system in the United States. This is the "alternative" being proposed to the Federal Reserve System. The only honest and effective solution to our debt money problem is to REPEAL, RESCIND AND REVOKE THE FEDERAL RESERVE ACT AND ALL OF ITS SUBSEQUENT AMENDMENTS AND NATIONALIZE ALL OF ITS ASSETS. Have you seen a bill yet which has proposed this totally honest approach?

NO CONSTITUTIONAL AMENDMENT IS NECESSARY

A Constitutional Amendment is not necessary to rid ourselves of the Federal Reserve System. This can be done by an Act of Congress, simply by a majority vote in both houses. At the present time there is probably not one person in the entire government who has the courage or intelligence to propose such legislation for consideration. Even if such a person existed, the proposal would be bottled up in Committee.

Often the argument is used that you can't trust politicians with money management. Fact number 1. Our politicians now are "in the hip pocket" of the bankers and represent their interests totally and completely. If we had an honest money system, no politician would be able to cater to bankers' interests as their power would have been permanently dismantled.

It has also been said that with government issuing the money, inflation would be rampant. What is it now with bankers controlling the issuance of money? How about the German inflation of the '20's, a classic example of wild inflation? The United States may now be headed in the same

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direction under banker control. With our present system of debt money, we can never eliminate inflation because there is never enough money to pay the interest. The principal is loaned into existence. To pay back the interest, more loans must be forthcoming in a continuing cycle. The banks contribute to inflation each time they buy government bonds and pay for them by bookkeeping entry. The volume of these transactions is fantastic. For example, in November of 1975 the commercial banking system increased this type of asset over $12 billion in one month alone. These bonds do not represent goods and services that entered into the stream of our economy. This is one of the primary causes for the continued rise in prices. One of the most fundamental rules for a sound money system is that the volume of money should be equal to the amount of goods and services produced in a nation. Contrary to what establishment economists tell us, inflation is not caused because government prints more and more money. As we have seen, paper money is but a fraction of our money supply. Inflation is caused by our present money system which permits bankers to create figures or bank credits at an accelerating rate. As the over-all debt goes up, so does the interest. Eventually the interest will smother us and we will have no money. Rather than an oversupply of money, we really have a scarcity of money. The average taxpayer now works almost six months just to keep up with federal and local taxes. Therefore, he has less money to spend. Not more. Here is just another example of where the government spokesmen and their henchmen lie to the public.

In order to get an honest money bill enacted, millions of Americans must begin to unscramble their thinking on the subject of money and KNOW WHAT FACTORS MUST BE PRESENT in order to achieve an honest, debt-free money system. They will then exert enough pressure on Congress so that the present batch of banker-agent traitors will tremble before the angry roar of an aroused and enraged public.

Another factor to consider in this hodgepodge of confusion is the proposed New Constitution which the Center for the Study of Democratic Institutions of Santa Barbara has prepared for our nation. This document is the blueprint for tyranny

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which would reduce our free citizens to the status of slavery. This "Constitution" divides the former United States into what is termed "Republics" on a population basis. Presumably, the former states, which have already been illegally and unconstitutionally regionalized by executive order, will form the basis for the territorial divisions.

A draft of this proposed constitution appeared in the Center Magazine, September-October 1970 issue.1 It is interesting to note that only a few brief lines are devoted to the all-important subject of money. The references to money are quoted as follows:

"The United Republics [former states] . . .

Art. I, Sec. 11, .... may not coin money, provided for the payment of debts in any but legal tender ..." [legal tender not defined.]

Art. IV, Sec. 3, "The Chancellor of Financial Affairs shall supervise the nations' monetary system and regulate its capital markets and credit-issuing institutions as they may be established by law, and THIS SHALL INCLUDE LENDING INSTITUTIONS FOR OPERATIONS IN OTHER NATIONS OR IN COOPERATION WITH THEM, EXCEPT THAT TREATIES MAY DETERMINE THEIR PURPOSES AND STANDARDS." (Emphasis added).

There is not one other word in the "new constitution" on the subject of money. Do these two paragraphs mention the right of the people's representatives (e.g. Congress) to issue the nations' money and credit? Of course not. This is the final coup that the bankers have been waiting for. The absolute, unchallenged control over our nation's entire assets without any

1Copies of this Constitution may be obtained from The Center for the Study of Democratic Institutions, P.O. Box 4068, Santa Barbara, CA 93103, Phone: (805) 969-3281. ($2.00 postpaid).

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restraining factors on the Chancellor of Financial Affairs. This is exactly the type of money system we are going to get — and the next money bill will be one of the final steps in the direction of the goal outlined in the "new constitution," unless we stop it.

ABOUT THE INCOME TAX

Lest we wonder whether or not income taxes will disappear in the brave new world the bankers have planned for us. IT APPEARS THAT ABOUT THE ONLY SOURCE OF REVENUE for the United Republics is indicated as follows:

Art. V: B Sec. 9 (l)c. "Except for corporate levies to be held in the National Sharing Fund, hereinafter authorized, may be collected ONLY FROM INDIVIDUALS AND ONLY FROM INCOMES: but there may be withholdings from current incomes."

This is a direct quote from the non-constitution that the Center for the Study of Democratic Institutions has drawn up for us and the very same non-constitution which the trained seals now want to adopt through a Constitutional Convention. There is no mention about bond and gold dealings by the monetary authorities. The continuation of a debt-money system seems assured by this non-constitution.

Our enemies are becoming ever more arrogant and tyrannical as they scent the nearness of victory. If we are to survive the critical months and years ahead, we must be ruthlessly discerning of every action — not only of our enemies, because we know what they are doing, but of our friends. Every war has its traitors and spies. This one is no exception. We must also analyze any proposed legislation in the light of its probable effects on our nation, our lives and our future. Often people or organizations will appear to be dedicated patriots. Some, to be sure, are sincere. Some may be misguided. For this we cannot excuse them as too much is at stake. Others may have been placed in conservative organizations for the purpose of achiev-ing "one shot legislation." False remedies will be proposed and

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often it may be difficult for us to determine what person, bill or organization to support. In cases like this it might be wise to observe the programs or people within the conservative movement who are being ignored or ridiculed. When this ridicule extends into the realm of the money problem, we must be very wary. The very ones who are most criticized may be the ones with the right answer. But again, we must emphasize that free discussion is imperative and all aspects of the problem should be considered.

If we sharpen our wits, and dust off our thinking capacity so that we react less to slogans (even our own) and search for truth, we may yet emerge with a program for victory.

Conservative and anti-Communist organizations have had a very dismal record of success. Hundreds, perhaps thousands have come and gone. A few remain. Most are beset with the problems of a small staff, inadequate funds and an adverse media. Majority America has been dispossessed of control over our nation and our own destinies by cunning and hostile alien enemies who have ascended to the pinnacles of power. Their success would not have occurred, however, without the treacherous cooperation of racial traitors, who betrayed their own people for wealth, prestige and positions of power. This fact alone should alert us to the fact that the enemy works in every area, including anti-Communist organizations.

Tax protest groups have had their share of infiltrators and spies. Many other organizations have also been infiltrated by disruptors who have sown seeds of dissention and confusion.

How then, will we be able to indentify a truly dangerous bill or policy, especially when it may be sponsored by one or more organizations which many conservatives know and trust? The answer is not easy. However, we must remember that we are fighting for our very lives. Every utterance, policy and piece of legislation must be judged on the basis of its contents and its ultimate effect on majority America, the potential victims.

Learn the art of propaganda. Put yourselves in the place of the adversary and imagine how you would try to convince the public on a particular point. Certainly truth is the last thing you would ever tell people. The unfortunate fact is that the whole diabolical program must be made to look so celestial that

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millions will crowd into your movement to create this politically-contrived utopia. You must view every piece of literature or legislation as a trap which will weave a noose around your neck. Carefully extract the key points and analyze them in reverse. Remember that the enemy thinks upside down. When you are able to master this technique, you will be nearer to the real facts. Discuss the topic with friends. Analyze every possible effect a bill or proposal could have on your life and property. Never assume for a single moment that anything is meant for your benefit. The chaotic events of today are like a jigsaw puzzle but the power elite knows exactly how the total picture will emerge. Their success up to this point in time has been largely due to the fact that the White race thinks logically and rationally and not in riddles. Until we understand the demonic and cunning nature of our enemy, we will never be able to defeat him. We must not let him continue to control our lives through the continued control of our thinking.

Most conservative organizations at least pay lip service to the concept of freedom of speech. Now is their chance to put this principle into practice. Disagreements and contrary opinions should be published and discussed in an objective manner. If analysis is not permitted on ideas, BEWARE. Unless we have conflicting opinions and open discussion, we can never hope to know the truth. We need not agree on everything. We shouldn't. However, open discussion is good for everybody. We all learn this way and it enables us to share in both agreements and disagreements. Too often, however, only one point of view is permitted and others are silenced. An example is the gold standard. Gold advocates raise their eyes in a haughty stare and curl up like a cobra about to strike when a constitutional issuance of money without gold is advocated. No discussion is permitted. The answer is adamant and certain. We MUST have gold — like God. It is a settled fact. Disagreement is not permitted. Why not let those who realize that gold is not a necessary ingredient to a sound money system have a forum? They should be permitted to present their views — whether anyone agrees or not. The gold standard, in its variations, has served the bankers well. The fact that it is not needed is shown by a gradaul turning from commodity money to an eventual cashless society.

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Among the, many fallacies to which mankind has been exposed, none in the economic realm has been more misleading than the notion that our money must be backed by gold or convertible into that particular metal. Arthur Kitson, in his book A Fraudulent Standard1, said that the "gold standard is a legalized fraud, a delusion and a snare." From the dawn of civilization man has used some form of exchange. Money has consisted of many things, including shells wampum, cattle, talley sticks, clay tablets, tobacco, coins of various metals and many kinds of bills of exchange. As far back as the Babylonian period, receipts were issued for coins and other valuables which were stored in the temple vaults. This was the beginning of the fractional reserve banking system. These shekels were the only contribution the religious pirates of the day would accept. Shekels were issued in greater amounts than the goods stored in the temple. 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 in the middle ages, the same practices were followed. Occasionally runs on the goldsmith - bankers occurred when there was insufficient species to redeem the receipts. This usually led to the demise of that particular goldsmith, but it did not stop the practice. Had the money been issued by the king and not borrowed from private bankers, such ridiculous practices as fractional reserve banking (or the issuance of money against non-existent gold) would never have developed. Yet today millions of people believe that gold bars in a bank vault gives their money value. This is patently untrue as we shall shortly see. Logic indicates that only a small portion of the population will be able to redeem the gold that mostly isn't there. This effectively strips the group of citizens who don t hold the winning receipts of their wealth. Is this fair? Why should only 10, or maybe 25% of the people be permitted to

1Arthur Kitson, A Fraudulent Standard, Hawthorne, Ca., Omni Publications, 1971, p. 90.

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hold "non fiat" money (e.g. paper convertible to gold)? Do you imagine that under our present banking system, any other than the insiders would ever get their hands on the gold anyway?

The argument is now being advanced that since our paper money is becoming worthless, value is to be found in gold and silver coins or bullion. 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 misery and monetary collapse to nation after nation for centuries.

Gold has always been a commodity close to the bankers' hearts. The stabilized exchange is the dream of bankers, and this is the reason the gold standard had been used. In a free market economy there will be occasional imbalances, but these will be largely self-correcting. 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 in a given country.

Another problem with the gold exchange standard is that its prices are controlled by those who run the foreign exchanges and United Nations banks. In this way, a small group can move gold from country to country. Since the gold window was "slammed shut" in 1971 by President Nixon on behalf of the bankers, we have seen the dollar slide. Yet some currencies have risen in value. We are told that this is because we are running a trade deficit and the "hard currencies" are backed by gold. If immediate cessation of foreign aid occurred and a halt to the bankers literally giving billions to bankrupt backward nations, there would be no trade deficit. Without the trade deficit, we would not need to convert the dollar into gold for the Arabs, or anybody else.

It is the opinion if this author that the dollar attack has been deliberate, and the complete collapse is what the bankers have wanted all along. The only way to prevent this disaster is to legislate them out of existence and return our money issuing power to Congress. This also pertains to the control of foreign trade. It is illegal for the government to permit private

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international banks to violate the Constitution by allowing them to control foreign trade.

In reviewing the problems which gold has wrought on the world, we must not forget that its so-called universal economic supremacy comes almost entirely from the nations which have compelled its use through legislation. That the gold standard prevents panics is also not true. For example, England, "The Panic of 1847 was stopped by suspending gold payments and permitting the Bank to issue inconvertible notes."1 The general public doesn't care for gold as long as their paper money serves its purpose. When gold is sought for as a refuge, it is entirely due to our idiotic money system and the actions of the bankers.

The two historical examples which are always pulled out to illustrate the orthodox view of inflation due to lack of specie banking are the French assignats and the Greenbacks issued during the Civil War. These currencies were created during great national emergencies to carry on those respective wars. These "cheap paper monies" enabled both France and the United States to win their wars. It may be of interest to note that no modern wars have been fought on a gold currency basis. Francis Walker, a well-known American economist has said:

"The so-called greenbacks of the American Civil War never, from 1862 to the close of 1878, lost their currency value in the smallest degree. At their price they were always taken readily, eagerly. Men never thought to avoid their use by taking gold at a premium, or by resorting to barter or credit."

The real reason Americans suffered the industrial ills which followed the Civil War was due to the attempt to bring all currency to a gold and silver basis. The exception clause, passed by a subservient Congress at the behest of the bankers, refused to accept this money in payment for duties or taxes. This was the real crime. Every dollar the bankers had invested in the war

1Arthur Kitson, A Fraudulent Standard, Hawthorne, Ca., Omni Publications, 1972.

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loans grew to as much as five or six dollars later. They grew rich while the country grew poor. The national currency was destroyed and the public again had to resort to the old trick of borrowing its credits from the bankers at from 7 to 10% interest.

Re government borrowing: If the bankers are willing to issue their own credit to purchase government bonds, is there any reason why the government can't use its own credit for carrying on its necessary functions?

Foreign trade: In settling foreign accounts one must pay in the medium that is acceptable to that country. This may be gold, goods, securities or services. However, when a country has been prefinanced in its development, and given billions in the form of foreign aid, bank loans and technology, the balance scale of the donor country should be that of creditor — not the reverse as we now see.

The gold standard: A nation whose money is used as the international medium of exchange (fulcrum currency, as the dollar) stands at a disadvantage with all other nations with whom it trades. When foreign trade is merely an exchange of surplus products for those of other nations, no problem arises. The gold standard substitutes trade for competition and a scramble for gold or dollars exchangeable into gold. Since, for many years, Americans were not permitted to own gold, it put our country at a double disadvantage. When gold is exported, the rival country is able to affect our domestic prices, causing them to rise. This, in turn, produces a decrease in domestic production and a depression. If, for example, America exchanges an equal amount of tobacco for English woolen goods, there is no competition. However, through the export of gold, the rival country produces items which we also produce, the result is fierce competition. Then cries for protective tariffs result.

The remedy: According to the United States Constitution, Article I, Section 8, Congress "shall have the power to regulate commerce with foreign nations." This clearly points out that the law denies to private bankers such powers as they have now usurped in the realm of adjusting trade balances. But the bankers are persistent, and over a period of years were able to

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consolidate their power to such an extent that by 1931 the Bank of International Settlements was established. During the Bretton Woods, N.H. conferences in 1944, two more international banks were established; the IMF (International Monetary Fund) and the World Bank (International Bank for Reconstruction and Development). These institutions opened their doors for business in 1946. The alleged purpose of these institutions was "to establish and maintain exchange stability among currencies, and to promote and facilitate the expansion of world economic activity and trade." One of the key aspects of this whole operation was to adopt the dollar as a "reserve currency" which would be used by other nations to settle their international obligations. At that time, the dollar was convert-ible into gold at $35 per ounce. This was the beginning of a long-term assault on the dollar which is now reaching its final climax.

To add insult to the dollar, the multi-billion dollar foreign aid program was implemented and many of the huge American-based corporations began to expand into other countries. Many of the large i banks also opened branches all around the world. The Chase Manhattan Bank of New York, for example, has over sixty branches in different countries. Most of the huge corporations have bankers on their board of directors, and often very favorable loan terms with low rates of interest were granted for the building of factories and development of resources in various nations. For several decades the earnings from these sources made Wall Street very happy as the income from these facilities were reflected in higher earnings. However, this did not help to improve our international liquidity position but it was a bonanza for the banking circles. Excess dollars could be converted into gold and then sold at un-pegged prices for substantial profits. With all that money going out of the country, is it any wonder the banker-created balance of payments gimmick showed a deficit in the account of the United States.

Our entire foreign trade policy has been handled by America's enemies and for the benefit of Communist countries. The dollar should never have been used as a fulcrum currency. It is domestic money and should not have been converted into

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an international convertible currency. The foreign aid racket and all the other methods used to separate the American taxpayer from his money are paying off very well for the banking crowd, but poorly for Mr and Mrs Citizen.

There were a few half-hearted attempts to curb the outflow of dollars, but never any which would solve the basic problem of an unsound, privately-owned money issuance monopoly. In 1963 the Interest Equalization Tax on foreign securities sold in the United States was passed. Also the Voluntary Credit Restraint Program was begun to encourage U.S. financial institutions from limiting their capital outflow. In 1968 the Foreign Direct Investment Program was instituted making some of the foreign investment curbs that had previously been voluntary now mandatory.

In 1970 SDR's (Special Drawing Rights) were made to members of the IMF. SDR's were l/35th of an ounce of gold, then equivalent to one dollar each, but they were not convertible into gold.

President Nixon "closed the gold window" in 1971. Now the Treasury refused to redeem in gold any foreign-held dollars. This would tend to bring international trade more in line with simple barter, or an exchange of surplus supplies. The paper money would not be acceptable in another country. Under these circumstances, if differences in balances were settled in gold, it would not affect the national currency rates. Under the international gold-standard system, only the international banking houses are the beneficiaries.

It might be pointed out that even gold might, under certain circumstances, be considered a fiat currency. Even now, gold coins of one nation are not acceptable in another nation. They must first be melted down and given new inscriptions and values. The value of the gold in the coin fluctuates with the market. Its commodity value should have no relation to the unit of monetary value. Also, for a commodity (as gold or silver) to be a measure of value for money is patently foolish as the prices of all commodities fluctuate. In the case of gold, its demand (or value) is largely determined by the international banking houses who manipulate its demand, and by the national governments who put legal tender laws into effect. This forces the nation to

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accept a gold piece as a certain stipulated value of "money." In the United States, for many years, gold circulated equally with paper and everyone willingly accepted the paper. This attests to the value of a paper currency. As mentioned earlier, the reason paper currencies deteriorate in value has nothing to do with papers as acceptable medium of exchange, but is due to artificial devaluation through the manipulation by the bankers.

If all nations are forced to accept a single international trade standard, it will weaken the strong and strengthen the weak. In other words, the United States, through its foolish foreign policy, has subsidized most of the world for decades. It has given away its valuable technology, built vast industries in other nations, extended huge multi-billion bank loans, sent experts to teach foreigners to compete with us and added the insult of more billions in foreign aid. Now that many nations are on an equal footing with us technologically speaking, an attack is made on our dollar, and direct competition with our domestic industry occurs. The net result is the weakening of our nation to the extent that we now have lost our number one standard of living and are number five or six. Do we want to sink even lower? Isn't it about time that our own self interest propels us to rid oursleves of the system which is enslaving us and robbing us of our heritage?

These beneficiaries of our largess now undersell us in our own markets and our government treasonously grants them even more benefits, while hobnailing our own industry under some silly guise of ecology, restrictive regulations and outlandish taxes. No banker was ever concerned with human rights. That is a ruse to grab all peoples' rights through the confiscation of property and freedom. Bankers operate in devious ways and we must not be fooled by rhetoric. Our government has no interest in the welfare of any American, black or white. They play politics and adopt different "special interest groups" from time to time to play off against each other. These are political traps which will eventually work to the detriment of everyone.

Our businessmen operate under most difficult conditions. Tax laws, depreciaten and every angle government can turn against them, is used to promote the foreign market and stifle our own. Until we realize this, and replace those legislators who

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are responsible, our nation will continue to slide downhill while the world looks on and laughs.

The loss of trade supremacy is not due to any lack of genius or inventiveness on the part of the Americans. It is due solely to government interference which has been masterminded by the banking clique. Our nation has been operated for the benefit of the bankers for generations while the industrial community is ignored. Degeneration of a nation can only be avoided if the government will consider its own self interests first and always. It is treason to downgrade our own and hobble it with impossible restrictions, while allowing millions of hostile immigrants to enter our nation, and add more millions to be put on welfare rolls to further tax the productive citizen. This is the program of the Marxist billionaires who know only how to ruin — not build. But this is hardly the program of progress and prosperity. We must change all this and we must begin by rational thinking.

Never mentioned by many books on money is the fact that England had a successful economy for about 700 years by using talleys (or matching pieces of wood). There was never a shortage of money during this period and never a depression. Why was its use discontinued? Simply because the system wasn't extended or updated when the industrial revolution commenced. Also to be remembered is the fact that the Bank of England made its debut in 1694 and this effectively transferred the money-creating power from the crown into private hands which outlawed the talley system.

You may be sure that a new money bill will be presented within the next year or so. It should be analyzed, picked apart, discussed and criticized by many analysts. Comments should be solicited and welcomed. Also study the sponsorship of any bill. With the present crop of idiots in Congress you may be sure that if it gets support from the majority - IT IS A TRAP. This is why we must be fanatically cautious of everything, including people and organizations.

Since the whole illicit Capitalist-Socialist empire rests on money control, be assured that a really good money bill won't be found, regardless of how many in Congress support it, unless

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America first wakes up to the truth and forces them to enact an honest money system. With an impending worthless dollar and multiple bank crashes facing us, it's about time we, the people, take matters into our own hands and force the issue. We must know how to erect a sensible, Constitutional money system and demand that it be adopted into law.

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Chapter VIII

THE NEW MONEY SYSTEM

The entire Capitalist-Socialist empire has been built on the issuance and control of money. It is therefore imperative that we understand just what constitutes an honest money system so that their key tool may be stripped from them. The only good money system is one which will achieve a stable dollar, eliminate the income tax, the national debt and inflation. Money must be ISSUED INTO CIRCULATION BY THE GOVERNMENT, INTEREST AND DEBT FREE. If a money system cannot do all these things, it is no good and should be opposed by every thinking individual. Since all of these goals are entirely possible, why should we settle for anything less?

Here is an example of a money system which will achieve these goals. We must have all of the following elements. Nothing less will suffice.

CONSTITUTIONAL MONEY BILL

An Act to establish in the United States of America a Constitutional debt and interest-free monetary system; to liberate our Government out of the corporate and money-monopolists' strangle-hold; to equitably dispose of the National Debt; to eliminate the Income Tax, and drastically reduce most other taxes; to wipe out inflation, and halt the ever-tight business of money supply.

Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled, that: This Act may be cited as the "Constitutional Inflationless Money Act."

Section 1. The Federal Reserve Act of 1913 and all subsequent amendments, related codes and regulations are rescinded, revoked, repealed and declared null and void, including the Open Market Committee and all its operations.

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Section 2. All private individuals, banking and financial institutions and other entities are henceforth prohibited from creating Money or money credits in any form. All fractional reserve banking is prohibited.

Section 3. All assets of the Federal Reserve Banks, including the gold, shall be nationalized and become the property of the U.S. Treasury Department.

Section 4. As delegated in Article I, Section 8, Clause 5, of the United States Constitution, Congress shall commence to issue, create and provide Constitutional, National Debt-Free Money and money credits, for all National requirements; backed by the same elements as our present United States Bonds.

Section 5. The Congress-issued and created national debt-free funds shall be used to finance all the National Government's expenditures, obligations and appropriations in peace and war time.

Section 6. Congress (instead of the banks) shall create and make available national debt-free funds, with no conditions attached, to the state and local governments, in the form of long-term, low or no interest loans or grants; for social and public works such as schools, hospitals, municipal transit systems, roads and freeways, land, water, forest conservation, etc.

Section 7. For the encouragement, operation and expansion of all segments of the Nation's free enterprise economy, Congress (instead of the banks) shall create and provide adequate national debt-free funds in the form of self-liquidating loans, including the banks, but at no preferred rates.

Section 8. The free enterprise banks and money lending and investment institutions shall be completely free to bid and obtain their lending and investing funds in the open

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market, from the general public and also from the United States Treasury System, as prescribed in Section 7.

Section 9. The people, through Congress, shall establish and regulate the interest rates of all Congress-created funds, loaned into the free enterprise economy as self-liquidating loans. The interest charges on all Congress-created and loaned funds shall be credited into the general tax revenue fund, for the benefit of all the people; to reduce or eliminate the Nation's Federal Taxes.

Section 10. Congress shall instruct the Secretary of the Treasury to remove out of circulation all Federal Reserve Notes currency, by exchanging it for United States Notes currency, and convert and coordinate all demand and savings deposits into the Constitutional monetary aggregates and systems, on a dollar for dollar basis.

Section 11. Constitutional money coordinated, bank credit loan repayment amounts of funds, may again be used by the banks for re-lending and investing as prescribed in Section 9. The previously bank-created funds coordinated into the Constitutional Money aggregates are then considered as Congress-created and loaned funds.

Section 12. All the Congress-authorized funds shall be issued or disbursed through the United States Treasury (sub and mini treasuries, deputized post offices and banks) System, in modern and convenient forms.

Section 13. Congress shall instruct the Secretary of the Treasury to keep an adequate stock of United States Notes currency on hand, and have it freely available through the Treasury System, to convert 100% of the Constitutional Money credits transferrable by checks, into United States Notes Currency, if the public shall so demand.

Section 14. Congress, through its power to tax, shall remove out of circulation and extinguish the excess

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Government expenditure and appropriation funds, after they have accomplished their purpose.

Section 15. Congress, through its power to lay and collect taxes, shall regulate and maintain an adequate and inflation-less monetary equilibrium, to maintain a healthy and robust economy.

Section 16. Congress shall create and appropriate adequate funds to carry out this Act, and to equitably dispose of the National debt, by redeeming before or at maturity, all United States Securities purchased with earned funds with Constitutional National Debt-free Money credits, convertible into U.S. Notes currency — and expunge out of existence all U.S. Securities held by the Reserve and Commercial banks and associated entities, which they had procured with their own created funds.

Section 17. This legislation shall become effective upon passage (not three years later).

After the passage of this act the government will no longer need the revenue it now extracts in the form of income taxes. You may be sure it wouldn't be more than a matter of weeks, or at best a few months, before this horror of an amendment would be repealed. IF IT IS NOT, YOU MAY BE SURE that the tax revolt now brewing will encompass the entire land, and no bureaucrat would have the courage to extract any further financial penance from an awakened and angry public.

THE THREE R's: The key provisions in any proposed money bill rests with three words: RESCIND, REVOKE AND REPEAL. If the legislation does not contain these provisions, DO NOT SUPPORT IT. We do not want any BUY BACK bills. We have been fooled long enough. It is time for Americans to reclaim our homeland and take it back from the enemy aliens and their fellow travellers who have brought this once-great nation almost to its knees in shameful wars, monetary and economic chaos, legislative lunacy and international disaster.

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HOW WILL THE NEW MONEY SYSTEM WORK?

Under the new monetary system, how will money come into circulation and how will it get into the hands of the people? If we examine various segments of our society, we will have a better insight into how the system will work.

INDIVIDUALS: Most people will still be paid through the usual check by their employer. They will then go to their local banks, deposit the check and either take all cash, or retain some in their accounts for bills and savings. When Mr Citizen wants to borrow money, he will go to his local bank as he now does. The difference will be in the method in which the credit (money) comes into existence. Instead of the banks being permitted to create money through their present numbers game, they will deduct the amount of the loan from the money which the government has made available to that particular bank. The money the bank has available will depend on two sources: 1) Savings, and 2) Government-created credits. The bank would obtain these credits in proportion to its financial standing. Credit or money obtained by the bank from the government would be obtained at a wholesale rate of say 2 or 3%, and reloaned at a slight premium. Our present interest system (which is a legally-created scarcity), e.g. the entire amount is never loaned, is usury. A small interest or service charge for the use of the entire amount of money, created against the wealth of the nation, is not usury. Mr Citizen would repay his loan in instalments, but he would not have the same collateral requirements as now. Provision would be made against dead-beats, of course, but never would a hard-working breadwinner be permitted to lose his home, car or other property after years of payments because, through illness or other unexpected consequences, he may be unable to pay for a period of time.

CORPORATIONS: Corporations requiring smaller loans would go to the bank, as now, and borrow the money from the bank. In cases of large loans amounting to multi-millions of dollars, they would go directly to the Currency Office of the Treasury Department and make their arrangements. The Currency Office would use the same discretion in lending money as prudent banks now do, and could refuse loans which seem

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frivolous or excessive. The company must prove by accurate estimates how the money will be spent. Would this give the Currency Office too much power? What about the bankers at the present time? The multi-national bank combines would be dissolved, and interlocking directors representing bankers' interests would no longer exist. If prudent banking practices were now used, would all that credit (money) have been loaned, especially to lesser developed countries (LDC loans)? It is precisely due to these politically-motivated loans to such dictatorships as, for example, Panama, that has led to our loss of this vital military and strategic property of our United States. Only the banks will profit from this treason. Besides, there would be provision for an appeal by the Corporation to a special Committee so designated by Congress should a loan be refused the first time.

Another source of revenue for corporations and industry would be the stock market. There would be much more stability in prices under the new system, and less speculative opportunity, but more investment quality, as the sinister influence of the money pools and banking combines buying huge quantities of stock at their uniquely - discounted prices would disappear. The stock market, as it now exists, is completely manipulated and is an unsafe haven for all but the most sophisticated analyst and stock buyer.

The main job of the Currency Office would be to maintain a stable currency and this must be done by keeping enough money in circulation to equal the productivity of the nation. As productivity increases, so should the money supply. If it decreases, the money supply should decrease. Such severe penalties would be placed on the top brass of the Currency Office to keep the money stable that bribery and treason would not occur. It would become a moral imperative for the money to be kept stable, and this would mean the granting of credit to all legitimate business. How else could industry get the money to finance itself? The large loans would be repaid to the Currency Office plus a small interest or use fee. These fees would go into the till of the government. As money credits are paid, they are wiped out of the money supply. In the case of banks, their profit would be the difference between selling

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money it got wholesale and loaned out at retail. The bank will eventually return to the Currency Office the principal, keeping the interest as profit.

STATE AND LOCAL GOVERNMENTS: These institutions would go directly to the local branch of the Currency Office and be granted the loan automatically for any project which the citizens had approved through referendum. The local government could arrange to repay the loan, WITHOUT INTEREST, over the period agreed upon. Without the heavy hand of usury, usually local taxes or the revenue realized by tbe project would be sufficient to repay the principal. Under the present system, municipal, state and local bonds cost more than twice the original amount due to the huge interest tab tacked on to the bonds. About the only ones to enjoy benefits under this bondage system now are the banks, who pick up bonds at about 10 cents on the dollar, collect interest during the bonds' lifetime and then are repaid in full at its termination. Wealthy individuals also collect tax-free interest. But the average working person, who pays the tab, derives only more debt out of the entire system.

Another source of revenue for states could come from the establishment of a state bank similar to the Bank of North Dakota. This bank, the only one in the nation, provides financing to communities, business, invests in productive industry, and generates capital to economically finance public service instrumentalities. While still working within our present banking system, states should study the North Dakota Bank and establish similar institutions in their own states. Such institutions, if run in accordance with sound banking procedures, would relieve overtaxation, finance local projects and give the state a profit at the end of the year. Opposed, of course, are the establishment bankers who see this as a threat to their stranglehold on the business of financing through the bond(age) method.

State and local government would benefit greatly by government-money issue. They could modernize their facilities, build the bridges, sewers, roads, etc. at a fraction of the present cost. Under our Babylonian system of usury, the interest costs through the bonds issued make these projects cost two to three 54

times the original amount. Under the new Constitutional money system, the National Currency Office could be repaid at a stipulated fee WITHOUT INTEREST. A $10 million municipal bond issued today is subscribed to by banks, insurance companies, corporations and wealthy individuals. Now the community has the cash in hand. The banks use the bonds as collateral to create more credit money and all the bondholders collect the interest paid by the municipality. The community has really paid twice, considering all the interest paid during the lifetime of the bond. This interest is usually tax free so that the national government gets no benefit whatever from this situation. The only ones who would not benefit from a reformed money system would be the tyrants who are enslaving us under the present debt-money system.

It must also be remembered that in our future world the government will no longer be in the business of providing housing, welfare, or running our schools, health, lives and business. Government will be limited to those functions for which it was created. Private enterprise will create enough jobs to enable all who are physically able to work to do so. It is not the job of government to breed millions of low I.Q. voters to keep these same gangsters in office. There are always some unfortunates who cannot work due to age, handicap or other reasons. They will be taken care of at the local level. Under our present insane welfare system, it is a definite conflict of interest to permit these hordes to vote or hold office. A continuation of this system will destroy our civilization.

FOREIGN GOVERNMENTS: Loans of all kinds to foreign nations, governments, corporations, individuals or other entities or organizations by banks would be prohibited. All multi-national banks which are American based would be forced to divest themselves of their foreign affiliations. They would also be prohibited from having any bank employee or executive from sitting on the board of directors of any corporation, whether loans had been extended or not.

LOANS BY THE UNITED STATES GOVERNMENT TO FOREIGN NATIONS: Such loans would all but disappear. If an occasional credit were to be extended, it would be by Act of Congress, for a friendly nation, for a specific time-repayment

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period. All such loans would be expected to be repaid IN FULL. A revolving fund could be maintained for such purposes, but not to engage in the nation's internal development, war efforts, schooling or welfare. The loan could not be made for more than a three year period and MUST BE REPAID IN FULL PLUS A SERVICE FEE OF 5 or more percent. This would effectively stop the multi-billion dollar credit extraction racket by all nations. Remember, our currency would be a national currency and its value would be stable year after year. We could not permit either inflation or deflation of its value by disturbing the stability ratio. Loans now being made to backward countries by international banks have been estimated by columnist Jack Anderson to be about $700 billion. Most will never be repaid. Many of these loan-gifts, especially those coming from the United Nations Bank, run as long as fifty years, with interest forgiven for the first ten years. After that the rates range between 1 and 2%. Your tax dollars are financing this outrage. Despite the hundreds of billions poured out to these tribal units, they are no better off than before — except for the high-living primitive dictators and their entourage. Only the multi-national banks and international corporations benefit. Besides, why should one nation interfere with the culture and lives of backward peoples. Let them alone, and if the corporations want to exploit the natural resources, they must finance these endeavors without the aid of taxpayers and a crooked fractional reserve banking system.

FOREIGN INVESTMENTS IN THE UNITED STATES

At the present time, countries which have received our technology and subsidies for generations are now enjoying more solvent currencies. These individuals and nations no longer want our dollars. They want our stocks, bonds, land, factories and farms, and are busily buying all of these assets in great quantities. Since our future government will be more concerned with the welfare of America than the present crop of traitors in Washington, such activities will be greatly curtailed or totally eliminated. In some nations, such as Mexico, foreign interests are not permitted to own a majority of stock in their

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companies, even though many of the companies are American, and the money and technology was exported to them. This will be the case here. These companies brought a higher standard of living to Mexico and other countries by bringing in vast industries, technology, and creating the jobs and prosperity they never before enjoyed. Foreign interests will no longer be permitted to purchase our most valuable resource, our land. This is irreplaceable and cannot be permitted to be acquired by alien or possibly hostile parties, countries, companies, etc. Our factories must be American owned, financed and operated. Nor will we permit our technology to be exported by government treaty or any other ruse.

UNITED STATES GOVERNMENT FINANCING

In place of the income tax, Social Security and other assorted taxes, the government will finance its legitimate activities by issuing its own money on the credit of the nation. Since it will no longer be necessary to issue bonded indebtedness to private bankers for its credit, the government bond market as we know it will largely disappear. In times of national emergency, it might be possible for the government to raise additional sources of revenue by issuing bonds which would be SOLD DIRECTLY TO THE PEOPLE. This is a legitimate method of financing. In such cases, the people would hand over their money to the government for the bonds and no excessive money would be created. Under the present system, banks "buy" the bonds and pay for them with their outrageous brand of credit creation which represents an addition to the money supply and feeds inflation. This particular fraud is multiplied thousands of times per week and is one of the main, but seldom mentioned cause, of the plight of our dying dollar. There will be certain issues ot government bonds which will be for varying periods of time, from three months to perhaps ten years, or even more. The function of these bonds would be to provide a small return to the holders, but their primary function would be the insurance of the stability of the currency.

The present national debt would be liquidated as follows: to legitimate bondholders, e.g. those who paid earned dollars

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for their bonds, new bonds would be issued and gradually paid off over a period of about ten years or less. The bonds acquired by banks through credit creation would not be paid as it is not a legitimate debt. These bonds literally represent a theft of assets from the American people. In stead of being repaid, such holders should he put in prison. This would automatically cancel several hundred billions of dollars from the national debt. It would also eliminate our $40 billion plus per year interest tab.

HOW WOULD THE GOVERNMENT FINANCE ITS OWN ACTIVITIES?

It may seem too Utopian for the average reader to grasp the idea that the government may acquire its own money without debt or taxation. But it can be done. In fact, this is what the Cramers of the Constitution intended when it was drawn up. They had their fill of debt money from the Bank of England with its consequent boom and bust cycles. Let the government get its money the same way the banks now get theirs. They create it All government activities would henceforth be financed in this manner. This is how it would work.

Let us say that the national government wanted to build ten high-powered military jets at the cost of 500 million dollars. Remember that our nation has the capacity, ability, resources and skills to produce just about anything that can be produced. All we have lacked up to this point is money. Now the money will be available WITHOUT DEBT BY THE PEOPLE TO THE BANKERS. The company or companies selected by competitive bidding to manufacture the jets will be issued government checks by the local Currency Office. These checks will then be deposited in various banks and the company begins to pay all bills arising out of the planning and construction of the jets. This money will circulate freely, without debt or bonds, in the community and the nation. The local Currency Office will have no option to withhold this credit once the legislation has been enacted authorizing the building of the jets. Nor will the government be permitted to interfer in the production of the jets through enforcement of job quotas or any other type of "social legislation". Free enterprise must be permitted to

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operate unhampered by reactionary and restrictive Marxist doctrine. Actually, the financing will be nothing more than a national accounting system. This is really all our money system is now. The BIG DIFFERENCE is that it is borrowed from private banks and carries a huge interest tab, which means the indebtedness of citizens. Another good effect would be that most prices would come down as the huge interest costs would no longer be a factor in company expenses or a drag on our economy.

Would such unlimited credit creation cause inflation? The answer to that is NO because the money supply would be kept stable and only be allowed to expand as the economy and population expands. The thing that causes inflation is our present usurious money system which thrives on interest through credit expansion or creation by private banks. Our inflation is staggering and will probably get much worse before the entire money system breaks down — as planned. If we don't call debts of over $5 trillion inflation, what is? The interest alone on such a staggering debt load is probably more than the total value of all the assets in the nation. If our dollar goes down to zero value, as the German mark did after World War I, it will have been caused by this very system which created the disaster in the first place. There would be the restraints of law on the Currency Office and their personnel to maintain the currency at a stable level. Without the interest tab of billions of dollars annually, the money available for normal expenditure would be enormous. Additionally, the government would receive billions per year in fees for the money it discounts to banks and from corporate borrowings. This could add up to several hundred billion dollars per year. Without an interest tab of $40 plus billion on the national debt alone, without foreign aid and gifts to the United Nations international banks, with the abolition of the welfare system and other typical non-government activities, this income should be sufficient to support the national government.

One can readily see that the interest load on the total public and private debt erodes the effective purchasing power of the continually-increasing money supply. It must be remembered that as the bankers' influence

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Courtesy Monetary Science Institute, Wickliffe, Ohio.

disappears, we will have more responsive and responsible people in Washington. Members of secret societies, internationalists, traitors and the anti-American groups we now have MUST GO. The people involved in building the jets (and all other similarly financed projects) contribute their wealth to the community through their work and skills, as well as from their purchases of food, clothing, payment of rent, recreation, etc. This is the true gross national product (true wealth) and not the distorted average which is now used. We must re-orient our thinking into regarding the farms, factories, products and technological skill of the work force as representing the true wealth of the nation — the source from which our money supply must originate. If we can do this, America and mankind will have, for the first time in centuries, a truly honest and representative money system.

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Chapter IX

PROGRAM FOR SURVIVAL

Our money system can and must be reformed. We must recognize that those who got us into this present mess will not give us honest reforms. We will simply be led into the next step which will either be a cashless society, or a world-wide money situation in which everyone will be equally poor. We don't want the bankers' version of a cashless society to be established through the use of computer numbers or a plastic one-world credit card. That program spells total disaster for any hope of financial freedom or survival. There is also no sane reason why advanced peoples who have developed civilization should be put on the same level as primitive people.

Once enough Americans have grasped the necessity of re-oriented thinking on the money question, it will become a matter of political pressure to force the elected turncoats to obey their oath of office and stop betraying the people they are supposed to represent.

The debt money system must be replaced with the credit and productivity of the nation. This concept is a positive one. It encourages production, inventiveness and industry. The more a nation produces, the wealthier it is. And the more it produces, the more money it has. The money will be kept in proportion to the increased population, production and wealth of the nation.

First and foremost, the Federal Reserve Bank and all of its branches and properties MUST BE NATIONALIZED and their assets confiscated by the government. These buildings and appurtenances belong to the people. Everything the banks now "own" was stolen from the nation through their fraudulent creation of credit money. In order to restore the United States to sanity, solvency, and economic freedom, the following steps must be taken. 1. The Federal Reserve Banking Act and all of its subsequent amendments MUST BE REPEALED, RESCINDED AND REVOKED. 2. All fractional reserve banking must be abolished in

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commercial banks and all financial institutions. 3. Usury must be outlawed. Usury is the practice of permitting

banks to create money credits (or credit money). The borrowing of money at small interest rates is not usury, but the bankers have been careful to miseducate the public on this subject. Our future money will be real money which the bank either earned or had obtained at a discount rate from the government and loaned out to corporations or individuals for a small service charge. Banks could operate profitably on a small percentage of return which would include all their expenses. Many industrial firms, after taxes and all expenses, are proud to report profits of 4 to 5% to their stockholders. Banks should do the same. Banks would no longer be permitted to purchase real estate, stocks and bonds or anything else for that matter, by issuing checks against bookkeeping figures.

4. Abolition of the income tax. This Marxist anachronism must GO. It is the most vicious, repressive and reactionary tool in the armamentarium of the international bankers. The income tax was never intended as a revenue-raising device. Its purpose was to pay interest on the bonds issued as a result of Uncle Sam's borrowing money from the private money monopoly. It also served to put the people under surveillance and control.

6. Abolition of ALL TAX FREE FOUNDATIONS. Such discriminatory favoritism has no place in a world in which all citizens will share in the prosperity of the nation as a whole. When these sinister foundations are dissolved, their influence on universities, governments and other organizations will cease. We can then get back to fundamentals and stop training robotized puppets who will fit into the Socialist scheme of the bankers' "utopia" which will be an Orwellian hell.

6. Abolition of interest on mortgages and the prohibition of speculation in land. People with good work records would be permitted to borrow money for only a small service charge. No longer would a house cost 35 to 40% more than its original cost because of huge interest payments. Our land is too precious a resource to permit speculation therein. Land is a trust and must be treated as irreplaceable. It must be respected. Speculators have no interest in the benefits to be brought to land — only a quick profit. The land speculators will have to find work

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elsewhere. Ownership of land will be a trust in which the land must be properly developed and cared for, or the owner would forfeit his right to occupy it

7. Criminal penalties will be invoked against those who attempt to war against a system which will bring justice, prosperity and peace to our nation. Banker-sponsored revolutionists and foundation-funded freaks will feel the full impact of a sane, objective and rational law which will be invoked for the benefit of the population and not be geared, as at present, to the undermining of the majority and protection of revolutionist minorities.

8. New money will be issued on a dollar for dollar basis. This money will be based not on debt as now, but on the wealth of the nation. This money could be called National Currency or United States Notes and would be debt and interest free.

Establishment of a Department of Currency within the Treasury Department which would be responsible for the issuance of ALL MONEY AND CREDIT. Criminal penalties, including death, will be faced by any member of the Currency Department who acts in any way to disturb the stability of our national currency on the level established by law.

10. Establishment of a monetary standard using 100 as a basis for the issuance of money. With our present sophisticated computers, the value of our national wealth could be accurately established along with the concurrent need for an equal amount of money or credit. Issuance of money and credit would be kept within two percentage points either above or below the base line. If credit expands beyond the 102 level, further issuance of money or credit would be curtailed until the norm had been reached. Conversely, if the demand for money decreased below the 98% level, tax refunds would be made and public projets encouraged. Never, however, could the level of either side be exceeded. A watchdog committe in Congress would oversee the Committe on Currency and their obligations would be as strict as those on the Currency Committee. This would not be a partisan project. With the establishment of a national, Constitutional, interest-free money system, in all likelihood the absurd political so-called two-party system will vanish. Government would be reduced in size and the power 64

and influence of bankers would disappear. Therefore, we could expect and demand honest representatives for a change, and the tyranny of Marxist Capitalism would vanish from the face of the earth.

"The right money bill is the thing on which our republic will hang. The wrong money bill will hang our republic." Author

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