Interesting things about money
IS DREAM MONEY LAWFUL MONEY?
This may surprise you, but Congress has never
declared Federal Reserve notes to be a legal tender
in payment of debts. Doubt me? Look at your
currency:"...LEGAL TENDER FOR ALL DEBTS PUBLIC AND
The word "FOR" is used rather than "IN PAYMENT OF."
Was this just accidental? No. It is well-settled in
the courts that lawmakers are presumed to have
selected each word that makes up a statue carefully
and deliberately, lest the statue be considered void
for vagueness. We can be sure, then, that when
Congress chose NOT to use "IN PAYMENT OF," it did so
for a good reason. That good
reason being the hard fact that no debt can be paid
in full in the eyes of American Jurisprudence unless
paid in gold or silver coined and regulated in value
by the Congress, courtesy of Article I, Sections 8
About all a Federal Reserve note can legally do is
wipe out a debt and replace it with itself, another
debt, a note that promises nothing. If anything's
been paid, the payment occurs only in the minds of
the parties--in the ideasphere--not the real world.
It's important for you to mark well that Federal
Reserve notes are not your government's money. They
bear likenesses of our presidents, they bear the
signatures of our Treasurer and the Secretary of the
Treasury, they bear beautiful engravings of our most
sacred political monuments, and even--since the late
1950's--the pious religious motto "In God We Trust",
but they are not your government's money. So when
you revile American Dream
money, you're in no way insulting your government.
Federal Reserve paper is not lawful money, not
government money. It is the scrip of a private
corporation partially owned by your local banker.
Whether it's a $100 bill or a $1 bill, a Federal
Reserve note is intrinsically worth about one cent.
Its extrinsic worth is whatever it will buy from day
to day in the marketplace, just like the 1916-23
Is this the kind of money for a
stable country to have?
Between 1913 and 1963, the Federal Reserve promised
redeemability in lawful money on their notes. But in
1963, they began issuing notes minus the
redeemability promise. This enabled your banker to
issue you a note that said "In God We Trust" in
exchange for your silver dollar, without his having
to exchange that silver dollar back for the note. An
unfair deal, you might say, but who took steps to
Interestingly, the first 50,000,000 no-promise
Federal Reserve notes were shipped out on November
26, 1963, which happened to be the day of John F.
Kennedy's funeral. A coin dealer friend of mine
says, "You know, they couldn't have picked a better
day to catch the people off guard."
These days if looks like there's not enough gold and
"to go around." That's because there's so much
paper. Inflation always makes people think there's a
shortage in precious metals. The reason is simple:
Increased paper increases prices.
It looks, too, as though we're "off the gold
standard," as a
banker told me in earnest not long ago. Both this
and the "not enough" assumptions are based on pure
hearsay. How rarely we bother to checks things out!
How easily we surrender to gossip! Oh, that
ideasphere! For America to be "off the gold (or
silver) standard" the Coinage Act of April 2, 1782,
which specifies in detail how our money is to made,
would have to be rescinded or repealed by Congress.
Then, a constitutional amendment permitting
the states to make something other than gold and
silver coin a tender in payment of debts would have
be passed and ratified by three-fourths of the
As of 1984, neither of these events has happened.
God help us if this ever should happen.
It is the Federal Reserve's monetary system that is
no longer on the gold or silver standard. In the
Federal Reserve's own published statement:
Today, in the United States, there are only two
kinds of money in use in significant
amounts--currency (paper money and coins in the
pockets and purses of the
public) and demand deposits (checking accounts in
commercial banks). Since $1 in currency and $1 in
deposits are freely convertible into each other at
option of the bank's customer, both are money to an
degree. What ... makes these instruments acceptable
face value payment of all debts? Mainly, it is the
confidence people have they will be able to exchange
such money for real goods and services whenever they
choose to do so.
So there you have it: paper and confidence are the
monies in which we conduct our daily commercial
transactions, with our friendly banker as our
perpetual middleman. But have the instruments of the
Federal Reserve monetary system ever qualified to be
the money in which the transactions of government
must be conducted? Let's investigate.
The government is limited to a special kind of money
federal statue. For, you see, in order to live up to
Constitution's promise of establishing domestic
tranguility and promoting the general welfare, the
people instructed their representatives to keep all
official accounts and proceedings in "the money of
account of the United States." First legislated in
the Coinage Act of 1792, this requirement is found
in current law at Section 371 of Title 31 of the
United States Code, which should be memorized:
31 UNITED STATES CODE 371
The money of account of the United States shall be
expressed in dollars or units, dimes or tenths,
cents or hundredths, and mills or thousandths, a
dime being the tenth part of a dollar, a cent the
hundredth part of a dollar, a mill the thousandth
part of a dollar; and all accounts in the public
offices and all the proceedings in the courts shall
be kept and held in conformity to this regulation.
Thus, it is federal regulation that all accounts in
offices and all proceedings in the courts must be
conducted in whatever has been declared to be "the
money of account of the United States," this money
being expressed-or measured-in "dollars."
A dollar, therefore, is neither a coin nor a piece
but simply the name of the unit by which the paper,
but simply the name of the unit by which the value
of money is measured, just as "quart" is the name of
a unit by which liquid is measured. A dealer selling
a car for "1500 quarts" would surely be asked
"Quarts of what?" Where, then, is the frivolity in
asking of a $15 dollar parking ticket, "Fifteen
dollars of what?"?
When courts and public offices require you pay in
dollars, the dollars must-by the above law-be
dollars (or units) of the money of account of the
United States. Is there any doubt in your mind as to
what the money of account of the United States is?
The Coinage Act of 1792 specifically declared gold
and silver to be "as money in the United States."
But in 1933, Congress suspended our currency's
redemption in gold, and in 1968 suspended the
redemption of silver certificates in silver. (In
both cases the excuse was "temporary emergency," as
it always is when governments work with bankers to
harvest the people's property without due process.)
The cumulative effect of those acts of 1933
and 1968 was this: Congress eliminated the money of
account of the United States from the banking system
without declaring a replacement, with the
astonishing result that neither our courts nor our
public offices are complying with 31 U.S.C. 371!
Federal Reserve notes and all those
important-looking instruments of Federal Reserve
banking may be "money," all right, but they've never
been declared to be the money of account of the
United States, as gold and silver have. They may
even be measured in dollars or units, but not in
dollars or units of the money of account of the
Federal Reserve notes can be a tender for debts, and
they may even be "lawful" money in the sense that
they've never been specifically declared unlawful
but they are not the money of account of the United
States that is measured in dollars in which "all
accounts of the public offices and in all
proceedings in the courts shall be kept and had."
And if you doubt me, just ask any judge or lawyer or
attorney general to show you legislation that
In short, Federal Reserve notes are compelling
images charged with charm and enchantment, like
movies and TV and comic strips and stereo and
colorful pages in magazines. If you believe that
they, or the bank demand deposits for which they are
redeemable, are the money the law requires us to pay
into our government, you're living
in a dream world.