"In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed." (Benjamin Franklin)
The infuriated British government responded by passing several acts that came to be known as the Intolerable Acts of 1774. These Acts included, among other measures, the Boston Port Act which closed the important port until the East India Company had been repaid for the destroyed tea and until the king was satisfied that order had been restored.
The harsh measures of these Acts made it difficult for moderates within the colonies to continue supporting Britain and promoted sympathy towards Massachusetts. This resulted in the formation of the First Continental Congress. Measures discussed at this meeting included a formal agreement to boycott British goods unless the Intolerable Acts were reversed and a pledge that all colonies would support Massachusetts in case of any military action from Britain.
The first attempt to set up a European style central bank was the formation of the Bank of North America by Robert Morris who used gold loaned from France as a reserve deposit. Using the system of fractional reserve banking, money was loaned out to eager American political leaders who were cash-strapped from the War of Independence.
Fractional reserve banking is a time-honoured tradition beginning with the English goldsmiths of 1000 A.D. The goldsmiths, who at that time functioned as early bankers, discovered that they could lend out more in paper receipts for gold than they had of the actual metal so long as the majority of depositors never asked for their gold back.
Fractional reserve banking is the tolerated, and now institutionalized, practice of banks lending out money they don't have and charging interest on it. In any other industry, this would be considered fraud.
Six years after the collapse of the Bank of North America, bankers in Europe installed a private central bank, known as the (First) Bank of the United States. The bank bill was officially proposed by Alexander Hamilton, Secretary of the Treasury, to the first session of the First Congress in 1790.
President Jackson was an advocate of sound monetary policies as outlined in the U.S. Constitution. He opposed the central bank system of issuing currency against debt.
Jackson had an investigation done on the Second Bank of the United States which he said established "beyond question that this great and powerful institution had been actively engaged in attempting to influence the elections of the public officers by means of its money."
In 1832, Andrew Jackson's re-election slogan was "JACKSON and NO BANK!" On July 10, 1832 President Jackson vetoed congress' decision to renew the charter of The Second Bank of The United States.
"It is not our own citizens only who are to receive the bounty of our government. More than eight millions of the stock of this bank are held by foreigners..
From 1921 to 1929 the Federal Reserve increased the money supply by 62% thus fuelling the period known as the Roaring Twenties.
The mass calling in of these margin loans by the New York banking establishment resulted in the devastating market crashes of October of 1929. "Black Thursday", the initial crash, occurred on October 24. The crash that caused general panic five days later on October 29 was known as "Black Tuesday".
Then, instead of expanding the money supply, the Federal Reserve contracted it, thereby creating the period known as the Great Depression. Congressman Wright Patman in A Primer On Money reported that the money supply decreased by eight billion dollars from 1929 to 1933, causing 11,630 banks of the total of 26,401 in the United States to go bankrupt. This allowed central bankers to buy up rival banks and whole corporations at a deep discount.
"If the orgies of unrestrained speculation are permitted to spread, the ultimate collapse is certain not only to affect the speculators themselves, but to bring about a general depression involving the entire country." (Paul Warburg, March 1929)
On June 10, 1932, Congressman Louis McFadden, a long-time adversary to the Federal Reserve, made a 25-minute speech before the House of Representatives, in which he accused the Federal Reserve of deliberately causing the Great Depression.
In 1933, McFadden introduced House Resolution No. 158, Articles of Impeachment for the Secretary of the Treasury, the Comptroller of the Currency, and the Board of Governors of the Federal Reserve, for numerous criminal acts, including but not limited to, conspiracy, fraud, unlawful conversion, and treason.
In 1945, the U.S. produced half the world's coal, two-thirds of the oil, and more than half of the electricity. The U.S. manufacturing industry was able to produce great quantities of machinery, including ships, airplanes, vehicles, armaments, machine tools, and chemicals. In addition, the U.S. held over 65% of world's gold reserves and was the sole possessor of the atomic bomb.
Delegates from 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire for the United Nations Monetary and Financial Conference during the first three weeks of July 1944. The purpose of the conference was to establish the rules for commercial and financial relations amongst the world's major industrial states. The agreements signed at this conference became known as the Bretton Woods Monetary System.
The Bretton Woods Monetary System was basically a pegged rate currency exchange system with the U.S. dollar functioning as the underlying currency. All countries would peg their currency to the U.S. Dollar and would buy and sell U.S. Dollars to keep the market exchange rates within a trading band of plus or minus 1% from the original ratio. The U.S. Dollar would be convertible into gold at a rate of US$35 per troy ounce. In effect, the U.S. Dollar took over the role held by gold under the previous international gold standard financial system.
The U.S. has enjoyed an enormous advantage of such a system because they are the only entity legally capable of creating more of the reserve currency, that being U.S. Dollars. Other nations were forced to buy large amounts
As a result, $4,292,893,815 of new "Kennedy Bills" were created through the U.S. Treasury instead of the Federal Reserve System. In 1964, Kennedy's successor, Lyndon B. Johnson, stated that, "Silver has become too valuable to be used as money." The Kennedy bills were removed from circulation.
Increasingly, foreign nations, in particular the French under Charles de Gaulle, began to send the U.S. Dollars earned by exporting to the U.S. back to be redeemed in gold as legally entitled under the Bretton Woods Agreement signed in 1944.
The drain on U.S. gold threatened to completely empty the U.S. Treasury. To prevent this from happening, on August 15, 1971, President Richard Nixon unilaterally closed the gold window. He made the Dollar inconvertible to gold directly, except on the open market.
The current monetary system uses questionable practices on both ethical and legal grounds. Monetary inflation erodes the wealth of citizens. Fractional reserve banking enable banks to fraudulently lend out more than they have. Debt is incurred every time new money is created. This debt must is inherited by future generations.
Below are three measures that would establish an honest monetary system.
Repay the Public Debt
The U.S. government must begin by first balancing the annual budget and then begin reducing the public debt. This would reduce the tax burden and ultimately allow tax dollars to be spent only on services requested by the people and not to banking agencies.
Introduce a Hard Currency
A hard currency should be introduced that competes against Federal Reserve Notes. Each of these bills would be backed by a defined quantity of a hard asset, such as gold, that are fully convertible at any time. Such a system could be comprised of bills representing a number of grams of gold.
There should be no legislation regarding the exchange ratios between gold and any other commodity or fiat currency. The free market should determine what the price of silver or Euros is in gold.
Borrowers and lenders should negotiate an interest rate on any lending arrangement using the hard currency. There should also be no law requiring that people must use this new currency. Legal tender laws are needed to make people accept a bad currency, not a good one.
This hard currency would require banks to store gold in their vaults. Any bank without gold would be unable to issue out the hard currency either in cash or as a loan.
In essence, the hard currency is a paper receipt convertible on a 1:1 exchange basis with gold. The gold is the money; the paper receipt is merely a representation of the physical metal.
Abolish Fractional Reserve Banking
The practice of fractional reserve banking should be criminalized, as is any other form of fraud. No business should be able to lay claim to assets they do not have, let alone lend out these assets and charge interest on them. This would eliminate the phenomena of bank-runs whereby panicked depositors line up to withdraw their assets for fear that the bank is insolvent. A bank should be able to lend out $10,000, only if it has $10,000 to begin with.
With the present system, banks can lend out multiples in loans to what they have in reserve deposits.
U.S. Reserve Requirements
Amount of Liability Reserve Required
$0 to $8.5 million 0%
$8.5 million to $45.8m 3%
More than $45.8m 10%
Within these ratios a financial institution may legally lend out up to $8.5 million without any reserve or $45.8 million with less than $1.4 million in assets.
Benefits of an Honest Monetary System
The most significant expenses facing people are: taxes, interest and inflation. The relative significance of each of these costs depends upon one's socio-economic status. Each of them is further exacerbated by the current fiat monetary system of centralized banks and the industry's use of fractional reserve banking.
The amount of gold being mined inflates the gold supply by about 2% per year. Much less than the estimated 12-15% money supply growth rate of fiat money.
To restore confidence in and governmental control over money and credit, to stabilize the money supply and price level, to establish full reserve banking, to prohibit fractional reserve banking, to retire the national debt, to repeal conflicting Acts, to withdraw from international banks, to restore political accountability for monetary policy, and to remove the causes of economic depressions, without additional taxation, inflation or deflation, and for other purposes.
Sec. 3. DEFINITIONS. The definitions of terms shall be those set forth in the Federal Reserve Act of December 23, 1913, as amended. United States Notes as used herein shall mean Treasury issue United Stated currency notes (as defined in 31 U.S.C. Sec. 5115) not bearing any interest, being lawful money and legal tender for all debts, public and private, and which term as used herein shall include Treasury Department Deposits (a.k.a. Treasury Deposits or Treasury book entries) convertible to United States Notes, which may be substituted therefor at the discretion of the Secretary of the Treasury. During the transition period, Treasury Deposits as used herein shall include Federal Reserve Deposits.
Sec. 4. ONE HUNDRED PERCENT (100%) RESERVE REQUIREMENT. Section 19(b)(2)(A-D) of the Federal Reserve Act is hereby amended to raise the Reserve Requirement ratio for financial institutions, in equal monthly increments of eight and one-half percent (8.5%), to one hundred percent (100%), during the said transition period. No existing reserve requirements shall be reduced, but shall be increased as the overall Reserve Requirement ratio incremental increase surpasses them. The initial minimum overall Reserve Requirement ratio shall be fixed at eight and one-half percent (8.5%) for all accounts, effective in one month. United States Notes, Federal Reserve Notes, Treasury Deposits and Federal Reserve Deposits shall be included in Reserve calculations in the transition period. No waivers or exemptions to this section may be granted, and any in existence are hereby repealed.2
Sec. 5. RETIRING THE NATIONAL DEBT. The Secretary of the Treasury is hereby authorized and directed to purchase, in open market operations or otherwise, all outstanding Federal Debt held by the public, with United States Notes; thereby the net National Debt is to be completely retired and replaced with United States Notes.3 Treasury Deposits are to be created for intra-U.S. government debt in quantity sufficient to extinguish the remaining National Debt.
Sec. 6. STABLE MONEY SUPPLY. The Secretary of the Treasury is hereby authorized and directed to time and apportion the purchase of United States Bonds and other federal debt securities held by the public, and the issuance of United States Notes and the creation of Treasury Deposits to the rate of the Reserve Requirement ratio increases made pursuant to this Act, in order to keep the money supply (calculated including the monetary substitutions provided for herein) constantly stable, except as is provided in section 7, infra. The Secretary of the Treasury is hereby authorized and directed to purchase such outstanding United States Savings Bonds/Notes during the transition period as may be necessary to accomplish the purposes of this section.4
Sec. 7. FUTURE MONETARY GROWTH. Beginning with the transition year period, and thereafter on an annual basis, the total dollar amount of United States Notes (as defined supra: i.e. the sum of outstanding currency plus Treasury Deposits) outstanding (calculated to include the total amount of outstanding Federal Reserve Notes, i.e. not yet replaced with U.S. Notes) shall be increased by the Treasury Department, steadily, by three per cent (3%) per annum5, which amount shall be paid into the economy by the Treasury Department, first to retire (or purchase) any future war bonds (issued pursuant to section 8. hereof), then any remaining non-marketable federal debt (e.g. Saving Bonds/Notes and fully guaranteed obligations of the government), then, pursuant to appropriation by Congress, to pay for goods, services, or interest. Any such new money not appropriated (i.e. allocated for expenditure) by Congress during any such year, shall be rebated by the Secretary of the Treasury to individual, personal income taxpayers on a fixed percentage basis within thirty (30)days of the close of such year. Except in time of war, no United States government bonds, bills, savings bonds/notes, or other debt obligations may be sold by the government, except as is provided for in this Act. No federal agency or federally-chartered bureau, board or instrumentality may engage in any further lending or borrowing, nor guarantee same, after the date this Act becomes law.
Sec. 8. WAR EXCEPTION. In the case of a formal Congressional declaration of war with a foreign nation, the three percent (3%) monetary growth provided for in section 7., supra, may be exceeded and United States government bonds may be sold or purchased in open market operations by the Treasury Department, pursuant to Congressional authorization. The suspension of the fixed three per cent (3%) monetary growth, and United States government bond sales, shall terminate annually unless renewed by Congress, or upon the cessation of hostilities, or by formal proclamation of the President declaring the war ended, or upon the exchange of ratifications of the treaty of peace. The provisions of this Act shall supersede the provisions of the National Emergencies Act (50 U.S.C. 1601, et seq., Titles I-V, as amended), and any declaration of emergency by any member of the Executive Branch.
Sec. 9. FULL RESERVE BANKS. After the transition period, institutions using the word bank in their name or title, may not engage in lending, except that the capital of the owners may be invested or loaned on the open market, but may charge fees for their services and may invest deposits in Treasury Department Deposit accounts. These: full reserve; one hundred percent (100%) reserve; deposit; check or narrow; banks, as they, exclusively, may also be titled, must treat deposits received as trust-funds of money held for depositors. By the end of the transition period, for every dollar deposited, banks must have a dollar of United States Notes on hand or invested in a Treasury Department Deposit account. All bank deposits shall be in demand accounts. Banks shall be free to pay any rate of interest on accounts. Only bank deposits may be transferable by check, credit card, electronic transfer or any substitute therefor. At the beginning of the transition period, entry into such one hundred percent (100%) reserve banking shall be open to all persons having no criminal record, subject to minimal bonding requirements to be established by the Secretary of the Treasury.6
Sec. 10. TREASURY DEPOSITS. Funds placed in Treasury Department Deposits shall be utilized by the Secretary of the Treasury pursuant to appropriation by Congress, to pay for goods, services, or interest needed by the federal government. Any such funds received by the government in excess of federal expenditures not funded by tax revenues shall be rebated to individual, personal income taxpayers on a fixed percentage basis within thirty (30) days of the close of that year. Withdrawals of Treasury Deposits in excess of receipts in any given year shall be funded by future monetary growth as provided in section 7., supra, or should the withdrawals ever exceed monetary growth, by tax increases; in this latter, unlikely event, the Secretary of the Treasury is hereby authorized, in the absence of any other, specific authority, to add a fixed percentage surcharge to income taxes for that period, equal to the sum of excess withdrawals.
Sec. 11. INTEREST. The initial rate of interest payable on Treasury Department Deposits shall be equal to the average yield on three-month Treasury bills during the preceding quarter. Thereafter, it shall be adjusted quarterly in accordance with changes in the average yield of ninety-day commercial paper over the preceding quarter.7
Sec. 12. LENDING INSTITUTIONS. Banks or any other persons may establish separate associations, with or without joint ownership or management, not to be titled banks, such as investment trusts, mutual funds, brokerage or lending houses, to sell stock, to receive, borrow, lend or invest money at interest, but by the end of the transition period only from existing funds (i.e. United States Notes and Treasury Deposits). Contractual provisions must be made by such institutions upon the receipt of any funds with their owners, investors or depositors, that at no time may more funds be subject to demand than are presently idle and one hundred per cent (100%) available on demand. For any funds deposited with such associations payable on demand there must be a dollar of United States Notes on hand or deposited in a Treasury Deposit. No such association may denominate any account a demand account, nor promise immediate availability of any funds which may be invested, deposited or otherwise placed by such association without notice in any instrument or account other than Treasury Deposits. No funds deposited or invested with such associations may be transferred by check, credit card, electronic transfer or any substitute therefor. Owners, investors, lenders and depositors must be advised of the use of their funds, fairly appraised of the risks including the risk of total loss, of the maximum term of the use and of the potential and actual lack of availability of their funds, and the agreed or expected interest rate or the rate of return.
Sec. 13. REPEAL OF CONFLICTING ACTS. The National Banking Act of 1864 and amendments, and the Federal Reserve Act of 1913 and amendments, are hereby repealed,8effective at the end of the transition period. All Federal Reserve System monetary authority and Federal Reserve Deposits shall be transferred to the Treasury Department at the end of the transition period. From the effective date of this Act, and during the transition period, the Federal Reserve System and its District Banks shall not engage in open market transactions, nor change the Federal Funds Discount Rate, nor alter any Reserve Requirements, nor otherwise alter any money aggregate, nor transfer, dispose of, nor move any gold or silver in either their physical or legal possession, except as provided for in this Act, contrary provisions of the Federal Reserve Act or other statutes notwithstanding. The paid-in capital of Federal Reserve System member banks shall be credited to their Federal Reserve Deposit accounts at the beginning of the transition period, and the Federal Reserve Banks, employees, assets and liabilities transferred to the jurisdiction and control of the Treasury Department and employed for the purposes of this Act, including continuation of check-clearing and other services not prohibited by this Act. The Secretary of the Treasury is directed to replace gradually all outstanding Federal Reserve Notes with United States Notes, as soon as is practicable. Outstanding Federal Reserve Notes shall remain legal tender for all debts, public and private. Section 602(g)(14) of the Riegle Act of 1994 amending U.S.C. Title 32, insofar as it removed the requirement of reissuing United States currency notes upon redemption, is hereby repealed. Title 31 U.S.C. Section (a)2(b) limiting United States Notes to a total of $300 million and prohibiting their use as reserves, is hereby repealed. Existing legislation in conflict with this Act, whether in whole or in part, is hereby repealed in whole or in part as may be necessary to resolve any conflict with this Act.9
Sec. 14. PENALTIES. After the transition period, no person may loan, create credit or liabilities payable on demand or transferable by check, credit card or electronic transfer, without having one hundred percent (100%) reserves of United States Notes, dollar for dollar, for any such amounts. Violation of this provision will subject the violator to civil penalties for fraud, and to criminal penalties. 18 U.S.C. Crimes and Criminal Procedure §1344. Bank fraud: is hereby amended to include a new subsection (3) as follows: Whoever knowingly executes, or attempts to execute, a scheme or artifice — (3) to engage in fractional reserve banking practices as described and prohibited by the Monetary Reform Act, Section 14, shall be fined not more than three times the total dollar amount of the violation(s)
Sec. 15. WITHDRAWAL FROM INTERNATIONAL BANKS. It is hereby declared as a matter of federal statutory law that membership and/or participation of the United States government, or its agencies, or of the Federal Reserve Board or Reserve Banks or any officer or employee thereof, with the Bank for International Settlements, the International Monetary Fund, the World Bank, and all other international banks, is inconsistent with and in direct conflict with the purposes of this Act of Congress. The President is hereby authorized and directed to take such steps as may be necessary to withdraw the United States from all participation, and membership, in the Bank for International Settlements, the International Monetary Fund, the World Bank, and all other international banks, in any orderly manner, but in a period not to exceed one year from the effective date of this Act, and to recover the original and any subsequent United States subscriptions, contributions and quotas to such organizations, not already fully and lawfully expended, whether in the form of gold, deposits, currency or otherwise; and to enter into negotiations to establish new exchange facilities consistent with the purposes of this Act having no authority to create money or credit in any form, and having no independent authority to establish laws or regulations binding upon the United States or its banks, financial institutions or citizens, and subject to the ongoing, annual budgetary authority and approval of Congress.10
Sec. 16. FOREIGN EXCHANGE. The Secretary of the Treasury is hereby authorized and directed to enact regulations allowing the external rate of exchange freely to fluctuate, as foreign price levels fluctuate (i.e. in accordance with their respective purchasing power), while utilizing the exchange stabilization fund and foreign currency reserves to counterbalance fluctuations in the exchange rate. The Secretary of the Treasury shall enact such regulations in order to: 1. keep the stable, internal domestic price level established by this Act unaffected by foreign exchange rate fluctuations; 2. maintain imports and exports of capital, in equilibrium. In no event shall foreign exchange rates be allowed to alter the fixed rate of monetary growth set forth in section 7., above.11'
In any period in which the exchange stabilization fund and foreign currency reserves are inadequate to maintain equilibrium in capital flow, the Secretary of the Treasury is hereby authorized and directed: to restrict any imbalanced inflow of dollars to an amount equal to the monetary growth rate for such period (as set forth in Section 7.,supra), which monetary growth shall be thus funded; and, to prohibit any imbalanced outflow of dollars. Imbalances in excess of such amounts must first be chronologically booked for subsequent exchange as soon as the free markets restore the equilibrium necessary for the exchange(s) to occur.
The Secretary shall issue regulations to establish an advance foreign exchange book, open for public inspection, of all contracted, future foreign exchange transactions and obligations, in order to facilitate such exchanges. Such exchanges must be assigned by the Secretary on a first-come, first-served basis, in order to guarantee foreign exchange availability, for a one quarter per cent (0.25%) fee. 12
Sec. 17. APPROPRIATIONS. The Secretary of the Treasury is authorized and directed to establish Treasury Department Deposits, convertible to United States Notes on demand, sufficient to accomplish the provisions of this Act. The Federal Reserve Act is hereby amended to add this section: that the Governors of the Federal Reserve System are authorized and directed to establish Federal Reserve Deposits sufficient to accomplish the purposes of this Act, in amounts to be determined by the Secretary of the Treasury. The Director of the Bureau of Engraving is hereby authorized and directed to print a sufficient quantity of United States Notes to accomplish the provisions of this Act. There is hereby authorized to be appropriated, out of any funds not otherwise appropriated, such sums as may be necessary to carry out the purposes of this Act.13
Sec. 18. SEVERABILITY. If any provision of this Act, an amendment made by this Act, or the application of such provision or amendment to any person or circumstance shall be held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the application of the provisions of such to any person or circumstance shall not be affected thereby.
Fellow conspiracy theorist Eustace Mullins presents a different list in his 1983 book Secrets of the Federal Reserve. He reports the top eight stockholders of the New York Fed in 1982 were
Citibank
Chase Manhatten Bank
Morgan Guaranty Trust
Chemical Bank
Manufacturers Hanover Trust
Bankers Trust Company
National Bank of North America
Bank of New York.
According to the N.Y. Fed itself, as of June 30, 1997 the top eight shareholders were
Chase Manhatten Bank
Citibank
Morgan Guaranty Trust Company
Fleet Bank
Bankers Trust
Bank of New York
Marine Midland Bank
Summit Bank.
http://www.usagold.
Federal Reserve Bank of San Francisco Directors
http://www.frbsf.
Map of the Federal Resever system
http://www.frbsf.
The Federal Reserve System is controlled not by the New York Federal Reserve Bank, but by the Board of Governors (the Board) and the Federal Open Market Committee (FOMC).
Let's say, for example, that to carry out its legitimate functions, the
United States needs $300 billion in credit and $100 million in currency :
1. The U.S. Bureau of Printing and Engraving at the U.S. Treasury is
instructed to print $100 million in Federal Reserve Notes, as currency for
the privately owned Federal Reserve.
2. The privately owned Federal Reserve System pays the U.S. Bureau of
Printing and Engraving $20.60 per 1000 bills it prints! That is
approximately two and a half cents for each bill, regardless of their face
denomination, ie. $1, $5, $10, $20, $50, $100 bill. WHAT A DEAL!!
3. Next, the United States orders the same U.S. Bureau of Printing and
Engraving to print $300 billion, $100 million worth of U.S. Treasury Bonds.
4. The privately owned Federal Reserve then purchases $100 million of U.S.
Treasury Bonds (redeemable at full face value plus interest) from the United
States. To pay for these, the Fed uses the privately owned Federal
Reserve Notes that they just purchased for two and a half cents per bill!
Next, the privately owned Federal Reserve purchases the other $300 billion
in U.S. Bonds with a simple ten second computer entry that transfers $300
billion in "credit" into the United States' Treasury account.
COST TO WE THE PEOPLE: $300 Billion, $100 Million, plus continuously
compounding interest.
COST TO THE PRIVATELY OWNED FEDERAL RESERVE: About $26,000
http://www.apfn.
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit for research and educational purposes. MY NEWSLETTER has no affiliation whatsoever with the originator of this article nor is MY NEWSLETTER endorsed or sponsored by the originator.
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