Quote- The US system of money is controlled by private banks, not by Congress. In a depression, wealth is not destroyed but transferred from the unaware to the aware. The banks who control the Fed create artificial business cycles in order to gradually siphon wealth from The Federal Reserve scam works like this: Bankers in the City of London control the Fed's member banks through proxy banks. These bankers don't make money directly from the interest collected on the printing and loaning of money to the US govt. Instead what they get from the deal is the ability to know what the interest rates are going to be before anyone else does.


Because they know what they are going to agree to set the interest rate to, they are always ahead of everyone else in the world in predicting market cycles since they are the ones creating the cycles. 

The Great Depression was a perfect example. They overheated the economy and then pulled the rug out from under it. Because they knew this would happen they were perfectly positioned after the crash to pick up the collateral on loans at pennies on the dollar. 

That is how they convert control an imaginary concept (the interest rate) into control of real assets (the collateral on the loans) without actually producing anything of value. They also prolong wars by funding both sides in order to get everyone in deeper debt to them. Presidential quotations on the evils of a money supply based on usury: 

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." 

-Thomas Jefferson 

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson a few years after having created the Federal Reserve and realizing his mistake -End quote

Secret of oz


Thirteen years ago, in a documentary called "The MoneyMasters", we asked the question why is America going broke. It wasn't clear then that we were, but it is today. Now the question is how can we get out of this mess. Foreclosures are everywhere, unemployment is skyrocketing - and this is only the beginning. America's economy is on a long, slippery slope from here on. The bubble ride of debt has come to an end.What can government do? The sad answer is - under the current monetary system - nothing. It's not going to get better until the root of the problem is understood and addressed. There isn't enough stimulus money in the entire world to get us out of this hole.Why? Debt. The national debt is just like our consumer debt - it's the interest that's killing us.Though most people don't realize it the government can't just issue it's own money anymore. It used to be that way. The King could just issue stuff called money. Abraham Lincoln did it to win the Civil War.No, today, in our crazy money system, the government has to borrow our money into existence and then pay interest on it. That's why they call it the National Debt. All our money is created out of debt. Politicians who focus on reducing the National Debt as an answer probably don't know what the National Debt really is.


To reduce the National Debt would be to reduce our money - and there's already too little of that.No, you have to go deeper. You have to get at the root of this problem or we're never going to fix this. The solution isn't new or radical. America used to do it. Politicians used to fight with big bankers over it. It's all in our history - now sadly - in the distant past.But why can't we just do it again? Why can't we just issue our own money, debt free? That, my friends, is the answer. Talk about reform! That's the only reform that will make a huge difference to everyone's life - even worldwide.The solution is the secret that's been hidden from us for just over 100 years - ever since the time when author L. Frank Baum wrote "The Wonderful Wizard of Oz."



Related links: 

The Money Changers
The History Of Money: 

Quote from the DVD-"The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole...Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money..." - Prof. Carroll Quigley, renowned, late Georgetown macro-historian (mentioned by former President Clinton in his first nomination acceptance speech), author of Tragedy & Hope: A History of the World in Our Time 

This 2-volume, 3.5 hour, fast-paced, non-fiction, historical documentary explains how international bankers gained control of America. 


"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money." - Sir Josiah Stamp, Director of the Bank of England (in the 1920s); reputed to be the 2nd wealthiest man in England at that time. -End quote

Federal Reserve banking building located in the United States of America.


The Federal Reserve is a private company of bankers with twelve branch banks that confiscate our money and they have been doing this for almost a hundred years,--- this time! They are not part of the United States Government. Yet today they collect hundreds of billions of dollars from American taxpayers every year. Pay attention you're about to read about the biggest and most successful scam in History. 

Mayer Amchel Rothchild (1743-1812) -"Let me issue and control a nation's money, and I care not who writes its laws" --- Meyer Rothschild 

A Little History Lesson 

Alexander Hamilton


It was Alexander Hamilton who lobbied for the first privately owned Federal Bank, and in 1789 Congress chartered the bank. Thomas Jefferson was adamantly opposed to the idea of a privately owned federal bank and said " I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies". 


James Madison 


In 1811, under President James Madison, Vice President George Clinton broke the tied vote in congress to cast the bankers out refusing to renew the charter for the bankers. Unfortunately it was President Madison who proposed a second United States privately owned Central bank and it came into existence in 1816 

Andrew Jackson

.However, in 1836 President Jackson, overriding Congress, closed it commenting, "The bold effort the present bank had made to control the government are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it." (we now have another one like it) Andrew Jackson also said, when speaking to the bankers: "You are a den of vipers and thieves. I intend to rout you out, and by the eternal God I will rout you out." 

Martin Van Buren 


When speaking to his closest friend, Martin Van Buren, Jackson said, "The bank, is trying to kill me, but I will kill it!" (and he did) 

The first two Federal Reserve Systems lasted about 20 years each and we are now almost a hundred years into the third one. 

Woodrow Wilson 

The year is now 1913, the year after Woodrow Wilson was elected president of the United States. Prior to his election he needed financial support to pay for his campaign, so he reluctantly agreed, that if elected, he would sign the Federal Reserve Act, in return for that financial support. 


In December 1913 while many members of Congress were home for Christmas, the Federal Reserve Act was rammed through Congress and was later signed by President Wilson. At a later date, Wilson admitted with remorse, when referring to the Fed: "I have unwittingly ruined my country".


Now Comes the Income Tax

We didn't have nor did we need an income tax until we got the bankers back. The income tax was only needed to pay interest to the bankers for our money that they loan to our government. Yes, you read that right, the Fed, mostly on paper and computer, creates money or pays the treasury a small printing fee for currency, and then loans this money to our government. Our taxes pay them interest on this loan that cost the FEDS virtually nothing to make, what a sweetheart of a deal they have going for them. As of March 6, 2006, the national debt stands at 8.2 trillion dollars. The American taxpayers have paid the FED banking system $173,875,979,369.66 in interest on that debt in just five short months, from October, 2005, through February, 2006. No con artist or group of con artists in history has ever perpetrated a scam that even approaches the scope of this one. 

According to the two volume work by Bill Benson and Red Beckman, "The Law That Never Was" the 16th amendment, which created the IRS, was never properly ratified, not even by one state! These gentlemen traveled the then 48 states to verify that fact. So in a very real sense the income tax isn't legal, as many have proclaimed, but try not paying it and see how far you get before the Feds come after you and confiscate everything you own.



Henry Ford once said "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning". 

Federal Reserve Bank, Minneapolis, Minnesota

In the nearly 100 years of the existence of the Fed, it has NEVER been audited and they don't pay income tax on the billions of dollars they take from us. 


According to Congressional record the U.S. Government can buy back the FED at any time for $450 million. That's about half the amount of money we pay them daily. Do we have the most stupid and/or the most corrupt leaders in the world, or what? It seems their #1 concern is getting re-elected, they seem to think nothing of shirking their responsibilities to the people who elected them to their powerful prestigious high paying jobs. 

Congress likes the Fed because they can spend all they want with no restraints, they just put our children, grandchildren and great-grandchildren into debt. A Federal Reserve note is just what it looks like, it's just a piece of paper with no backing whatsoever. This is why Congress hates gold and silver backed money, it forces them to live within their means. Of course they also get other perks from the Fed. Perks far too numerous to mention here. 

Article 1, section 8, of the Constitution reads: The Congress shall have the Power.....To coin Money, regulate the Value thereof,.... Nowhere in that document does it give Congress the authority to delegate this responsibility to anyone, much less a bunch of private bankers. 


It may be that you were never a big fan of John F. Kennedy, but you may see him in a different light after you learn how he took on the FEDS. He had the foresight to see what a bad deal had been struck in the creation of the Federal Reserve. He also had the courage to do something about it. Which unfortunately, may have cost him his life. 

On June 4, 1963, President Kennedy signed a Presidential decree, Executive Order 11110. This order virtually stripped the Federal Reserve Bank of its power to loan money to the United States Government at interest. President Kennedy declared the privately owned Federal Reserve Bank would soon be out of business. This order gave the Treasury Department the authority to issue silver certificates against any silver in the treasury. This executive order still stands today. In less than five months after signing that executive order President Kennedy was assassinated on November 22, 1963. 


Think about the moment at about 2 minutes before JFK was assassinated 

The United States Notes (silver certificates) he had issued were taken out of circulation immediately. Federal Reserve Notes continued to serve as the legal currency of this nation. It is estimated that 99% of all U.S. paper currency circulating in 1999 are Federal Reserve Notes. 


Lincoln also took on the bankers and that brave bold step may also have cost him his life. During the Civil War (from 1861-1865), President Lincoln needed money to finance the War for the North. The Bankers were going to charge him 24% to 36% interest. Lincoln was horrified and greatly distressed, and he would not think of plunging his beloved country into a debt that the country would find impossible to pay back. 

So Lincoln advised Congress to pass a law authorizing the printing of full legal tender Treasury notes to pay for the War effort. Lincoln recognized the great benefits of this issue. At one point he wrote: "... (we) gave the people of this Republic the greatest blessing they have ever had - their own paper money to pay their own debts..." The Treasury notes were printed with green ink on the back, so the people called them "Greenbacks". Lincoln had printed 400 million dollars worth of Greenbacks (the exact amount being $449,338,902), money that he delegated to be created, a debt-free and interest-free money to finance the War. It served as legal tender for all debts, public and private. He printed it, paid it to the soldiers, to the U.S. Civil Service empoyees, and bought supplies for the war. 

Lincoln was assassinated shortly after the war and Congress revoked the Greenback Law and enacted, in its place, the National Banking Act. The national banks were to be privately owned and the national bank notes they issued were to be interest-bearing. The Act also provided that the Greenbacks should be retired from circulation as soon as they came back to the Treasury in payment of taxes.


Follow The Money

When you follow the money you find there was no-one in the world who had a better reason to kill these two Presidents than the bankers. It seems inconceivable that anyone could still think there was no conspiracy in the assassination of JFK, especially when you consider the many people that were murdered or had suspicious deaths and who were associated in some way with Kennedy's assassination. 

Is this proof? 

NO is this strong circumstantial evidence? YOU DECIDE, but wake up before you do Concern Without Action Is A Waste Of Time!! The Federal Reserve, United Nations, Council of Foreign Relations, Trilateral Commission, the Illuminati, the Bilderbergers and other elites of the hidden government are leading us into The New World Order and they are leading us fast. You are not going to like it when we get all the way there, and we are over half way there now. Only we can save this Republic. -End


Another prospective and enforcement of the facts.

Entitled - The Federal Reserve is PRIVATELY OWNED by Thomas D. Schauf 


Quote:"There is a self-satisfied dogmatism with which mankind at each period of its history cherishes the delusion of the finality of existing modes of knowledge." -End quote

Another prospective and enforcement of the facts.

Entitled - The Federal Reserve is PRIVATELY OWNED by Thomas D. Schauf 


Quote:"There is a self-satisfied dogmatism with which mankind at each period of its history cherishes the delusion of the finality of existing modes of knowledge." -End quote

Alfred North Whitehead 

Dear American: Pursuant to your request, I will attempt to clear up questions you have about the Federal Reserve Bank (FED). I spent much time researching the FED and these are the shocking and revealing conclusions. 


Article 1, Section 8 of the Constitution states that Congress shall have the power to coin (create) money and regulate the value thereof. Today however, the FED, which is a privately owned company, controls and profits by printing money through the Treasury, and regulating its value. 

The FED began with approximately 300 people or banks that became owners (stockholders purchasing stock at $100 per share - the stock is not publicly traded) in the Federal Reserve Banking System. They make up an international banking cartel of wealth beyond comparison (Reference 1, 14). The FED banking system collects billions of dollars (Reference 8, 17) in interest annually and distributes the profits to its shareholders. The Congress illegally gave the FED the right to print money (through the Treasury) at no interest to the FED. The FED creates money from nothing, and loans it back to us through banks, and charges interest on our currency. The FED also buys Government debt with money printed on a printing press and charges U.S. taxpayers interest. Many Congressmen and Presidents say this is fraud (Reference 1,2,3,5,17). 

Who actually owns the Federal Reserve Central Banks? The ownership of the 12 Central banks, a very well kept secret, has been revealed: 

Rothschild Bank of London 
Warburg Bank of Hamburg 
Rothschild Bank of Berlin 
Lehman Brothers of New York 
Lazard Brothers of Paris 
Kuhn Loeb Bank of New York 
Israel Moses Seif Banks of Italy 
Goldman, Sachs of New York 
Warburg Bank of Amsterdam 
Chase Manhattan Bank of New York 

(Reference 14, P. 13, Reference 12, P. 152) 


These bankers are connected to London Banking Houses which ultimately control the FED. When England lost the Revolutionary War with America (our forefathers were fighting their own government), they planned to control us by controlling our banking system, the printing of our money, and our debt (Reference 4, 22). The individuals listed below owned banks which in turn owned shares in the FED. The banks listed below have significant control over the New York FED District, which controls the other 11 FED Districts. These banks also are partly foreign owned and control the New York FED District Bank. (Reference 22) 

First National Bank of New York 
James Stillman National City Bank, New York 
Mary W. Harnman 
National Bank of Commerce, New York 
A.D. Jiullard 
Hanover National Bank, New York 
Jacob Schiff 
Chase National Bank, New York 
Thomas F. Ryan 
Paul Warburg 
William Rockefeller 
Levi P. Morton 
M.T. Pyne 
George F. Baker 
Percy Pyne 
Mrs. G.F. St. George 
J.W. Sterling 
Katherine St. George 
H.P. Davidson 
J.P. Morgan (Equitable Life/Mutual Life) 
Edith Brevour T. Baker 

(Reference 4 for above, Reference 22 has details, P. 92, 93, 96, 179) 


How did it happen? After previous attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson's campaign for President. He had committed to sign this act. In 1913, a Senator, Nelson Aldrich, maternal grandfather to the Rockefellers, pushed the Federal Reserve Act through Congress just before Christmas when much of Congress was on vacation (Reference 3, 4, 5). When elected, Wilson passed the FED. Later, Wilson remorsefully replied (referring to the FED), "I have unwittingly ruined my country" (Reference 17, P. 31). 

Now the banks financially back sympathetic candidates. Not surprisingly, most of these candidates are elected (Reference 1, P. 208-210, Reference 12, P. 235, Reference 14, P. 36). The bankers employ members of the Congress on weekends (nickname T&T club -out Thursday...-in Tuesday) with lucrative salaries (Reference 1, P. 209). Additionally, the FED started buying up the media in the 1930's and now owns or significantly influences most of it Reference 3, 10, 11, P. 145). 

Presidents Lincoln, Jackson, and Kennedy tried to stop this family of bankers by printing U.S. dollars without charging the taxpayers interest (Reference 4). Today, if the government runs a deficit, the FED prints dollars through the U.S. Treasury, buys the debt, and the dollars are circulated into the economy. In 1992, taxpayers paid the FED banking system $286 billion in interest on debt the FED purchased by printing money virtually cost free (Reference 12, P. 265). Forty percent of our personal federal income taxes goes to pay this interest. The FED's books are not open to the public. Congress has yet to audit it. 

Congressman Wright Patman was Chairman of the House of Representatives Committee on Banking and Currency for 40 years. For 20 of those years, he introduced legislation to repeal the Federal Reserve Banking Act of 1913. 


Congressman Henry Gonzales, Chairman of a banking committee, introduces legislation to repeal the Federal Reserve Banking Act of 1913 nearly every year. It's always defeated, the media remains silent, and the public never learns the truth. The same bankers who own the FED control the media and give huge political contributions to sympathetic members of Congress (Reference 12, P. 155-163, Reference 22, P. 158, 159, 166). 



We, the People, are at fault for being passive and allowing this to continue. Rep. Louis T. McFadden (R. Pa.) rose from office boy to become cashier and then President of the First National Bank in Canton Ohio. For 12 years he served as Chairman of the Committee on Banking and Currency, making him one of the foremost financial authorities in America. He fought continuously for fiscal integrity and a return to constitutional government (Reference 1). The following are portions of Rep. McFadden's speech, quoted from the Congressional Record, pages 12595-12603: 


The depredations and the iniquities of the Federal Reserve Board and the Federal Reserve banks acting together have cost this country ENOUGH MONEY TO PAY THE NATIONAL DEBT SEVERAL TIMES OVER." About the Federal Reserve banks, Rep. McFadden said, "They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; the rich and predatory money lenders. This is an era of economic misery and for the reasons that caused that misery, the Federal Reserve Board and the Federal Reserve banks are fully liable." 

On the subject of media control he state, "Half a million dollars was spent on one part of the propaganda organized by those same European bankers for the purpose of misleading public opinion in regard to it." Rep. McFadden continued, "Every effort has been made by the Federal Reserve Board to conceal its power but the truth is the Federal Reserve Board has USURPED THE GOVERNMENT OF THE UNITED STATES. IT CONTROLS EVERYTHING HERE AND IT CONTROLS ALL OUR FOREIGN RELATIONS. IT MAKES AND BREAKS GOVERNMENTS AT WILL. 

No man and no body of men is more entrenched in power than the arrogant credit monopoly which operates the Federal Reserve Board and the Federal Reserve banks. These evil-doers have robbed this country of more than enough money to pay the national debt. What the Government has permitted the Federal Reserve Board to steal from the people should now be restored to the people." 


"Our people's money to the extent of $1,200,000,000 has within the last few months been shipped abroad to redeem Federal Reserve Notes and to pay other gambling debts of the traitorous Federal Reserve Board and the Federal Reserve banks. The greater part of our monetary stock has been shipped to foreigners. Why should we promise to pay the debts of foreigners to foreigners? Why should American Farmers and wage earners add millions of foreigners to the number of their dependents? Why should the Federal Reserve Board and the Federal Reserve banks be permitted to finance our competitors in all parts of the world?" Rep. McFadden asked.


"The Federal Reserve Act should be repealed and the Federal Reserve banks, having violated their charters, should be liquidated immediately. FAITHLESS GOVERNMENT OFFICERS WHO HAVE VIOLATED THEIR OATHS SHOULD BE IMPEACHED AND BROUGHT TO TRIAL", Rep. McFadden concluded (Reference 1, contains an entire chapter on Rep. McFadden's speech). 

If the media is unbiased, independent and completely thorough, why haven't they discussed the FED? Currently, half the states have at least a grass roots movement in action to abolish the FED, but there's no press coverage. In July, 1968, the House Banking Subcommittee reported that Rockefeller, through Chase Manhattan Bank, controlled 5.9% of the stock in CBS. Furthermore, the bank had gained interlocking directorates with ABC. 


In 1974, Congress issued a report stating that the Chase Manhattan Bank's stake in CBS rose to 14.1% and NBC to 4.5% (through RCA, the parent company of NBC). The same report said that the Chase Manhattan Bank held stock in 28 broadcasting firms. After this report, the Chase Manhattan Bank obtained 6.7% of ABC, and today the percentage could be much greater. It only requires 5% ownership to significantly influence the media (Reference 14, P. 56-57). This is only one of 300 wealthy shareholders of the FED. It is believed other FED owners have similar holdings in the media. To control the media, FED bankers call in their loans if the media disagrees with them (Reference 25, P. 134-137). 

Rockefeller also controls the Council on Foreign Relations (CFR), the sole purpose of which is to aid in stimulating greater interest in foreign affairs and in a one world government. Nearly every major newscaster belongs to the Council on Foreign Relations. The Council on Foreign Relations controls many major newspapers and magazines. Additionally, major corporations owned by FED shareholders are the source of huge advertising revenues which surely would influence the media (Reference 14, P. 56-59). It can be no wonder why groups such as FED-UP(tm) receive minimal, if any, press attention. 

How do taxpayers stop financing those whose purpose it is to destroy us? First, expose their activity, then demand change. 


Currently all we do is exchange FED money (interest attached) for real U.S. money (interest-free) dollar for dollar as Kennedy tried to do. We should not be required to pay interest on our own currency. According to Benjamin Franklin, this was one of the primary reasons we fought the Revolutionary War. Today we are still fighting the same family of bankers (Reference 4, Reference 1, P. 211, 212). 

The U.S. Government can buy back the FED at any time for $450 million (per Congressional record). The U.S. Treasury could then collect all the profit on our money instead of the 300 original shareholders of the FED. The $4 trillion of U.S. debt could be exchanged dollar for dollar with U.S. non- interest bearing currency when the debt becomes due. There would be no inflation because there would be no additional currency in circulation. Personal income tax could be cut if we bought back the FED and therefore, the economy would expand. According to the Constitution, Congress is to control the creation of money, keeping the amount of inflation or deflation in check. If Congress isn't doing their job, they should be voted out of office. Unfortunately, voters can't vote the FED or its Chairman out of office. 

If the government has a deficit, we could handle it as Lincoln and Kennedy did. Print money and circulate it into the economy, but this time interest-free. Today the FED, through foreign banks, owns much of our debt and therefore controls us. The FED will cease to exist as taxpayers become informed and tell other taxpayers. The news media and Congress will have no choice but to meet the demands of grass roots America. (Reference 1, P. 17, 22) 


This force must be allowed to intervene "at the local and community levels," the UN leader told the American publishers. What is "especially gratifying," Kissinger said, "is that the publishers showed no reservations about the prospects of UN forces landing in the United States and imposing the UN's will." Reference - The Spotlight, June 8, 1992, page 10. Liberty Lobby, 300 Independence Ave. S.E., Washington, D.C. 20003 (Newspaper) 


* Various dates and proofs that the Bankers created panic to push Congress to pass laws favoring bankers... Reference 22 

* President Wilson received $85,000 bribe from bankers... Reference 22, pages 25-26 * How England, through the Bankers, controls our Congress... Reference 22, pages 47-48 * Rockefeller is connected to President Carter... Reference 22, page 171; Reference 25, page 103 

* How George Bush is directly connected to the FED bank... Reference 22, page 49 * President Hoover and President Roosevelt were international Bankers... Reference 22, pages 69-71 and pages 157-159 * President Nixon was hired by Rockefeller's law firm to become President... Reference 25, pages 100-101 

* FED owner's manual to destroy and control U.S. citizens... Reference 22, pages 55-56 

* Proof Bankers claim they control the government... Reference 22, page 59 * Proof the FED knowingly created the Great Depression for their gain... Reference 22, pages 137-170 

* FED bankers are directly linked to the New World Order and the United Nations. New World Order was discussed by George Bush, Rockefeller, Adolph Hitler, and Jimmy Carter... Reference 25, pages 5-7 

* The Great Seal on back of the FED $1 bill, below pyramid, the NOVUS ORDO SECLORUM means "New World of the Ages" or --->> New World Order... Reference 25, page 35 

* How the Banker's tax-exempt organizations fund activities to destroy America's freedom by attacking our Constitution and way of life... Reference 25, pages 138-159; Reference 14 (throughout whole book) 


* Senator Barry Goldwater warned of economic powers capable of bypassing or controlling the political powers. Bank induced depression is possible in the future to force political change... Reference 25, 131 

* Rockefeller's money was used to seize control of America's teaching and training of students by rewriting history and textbooks. Rockefeller has also funded the National Education Association (NEA)... Reference 14, page 61 

* Gary Kah, high-ranking government liaison having first-hand knowledge of the New World Order exposes the truth. Read his book and En Route To Global Occupation... Reference 14 


First, we must uphold the Constitution. Please call the Hotline (217-854-7504) weekly for new information. When a state considers a Constitutional Convention, concerned Americans call the Hotline and it gives us the names and telephone numbers of the legislators involved. It tells us exactly what to say, and to whom. The Hotline helps us to fight and win! Secondly, we must change the opinions of the masses with information. The brochure has been a big help, and once 10% of the population agrees to abolish the FED, the rest will follow. 


It is obvious the media (radio and newspapers) have lied about the FED and the efforts of FED-UP(tm) to educate people with the truth. This will not stop us - we will persist! Decide for yourself if you want to win America back. If 10,000 patriotic Americans each distribute 1,000 brochures, 10 million Americans will become informed. It would be almost impossible to stop people from talking about abolishing the FED if that many Americans were informed. Another way you can participate is to put a bumper sticker on your car. Over 1,000 people every month will see that bumper sticker about abolishing the FED. If you think our goal is impossible, remember this; only 3% of Americans supported the Revolutionary War, and we won that war. We can win this war too, but only with your help. 



For the secret owners of the FED to control the volume of money and become our absolute masters, they had to get the Gold away from our grandparents. This was accomplished in 1933 with the threats of fines and imprisonments by their President Franklin D. Roosevelt with aide Harry Hopkins, who said... "Elect, elect, elect, tax, tax, tax, spend, spend, spend, for the people are too damned stupid to understand". By the way, Roosevelt was an international Banker. See Fool's Gold is Green by Winston Smith. 



Our government never had a chance...with political corruption ravaging its Constitution. The *real facts* don't lie...and neither do government documents...Congressional Record, Congressman Wright Patman, A Primer On Money prepared by the Sub-committee on Domestic Finance, House of Representatives, Committee on Banking and Currency - 88th Congress, 2nd session, August 4th, 1964 and December 23, 1913, page 1464 & 1478. Congressional Record, Congressman Louis McFadden, June 10, 1932, House of Representatives, pages 12604-12605 

Congressional Record, 98th Congress, 1st session, February 3, 1983, Congressman Ron Paul 

Congressional Record, Committee on Banking and Currency, House of Representatives, 77th Congress, 1st session, Tuesday, September 30, 1941, pages 1342-1345 




The Revolutionary War was fought and the Constitution was written to prevent other nations and private banks from issuing (printing) money and controlling our currency. 


In 1913, members of Congress committed treason and violated their oath of office to defend the Constitution against all enemies foreign and domestic by voting in the Federal Reserve Bank. 

For the New World Order to create a one world government, they must control a central bank, eliminate the Constitution, end Christian values, disarm America, and control the media. The Council on Foreign Relations has openly said they will take us over in favor of a one world government. 

The American people must be warned or we may lose our freedom forever. If we do not demand our rights and uphold the Constitution, the CFR and bankers will continue their march toward socialism. If we allow them to continue, they will abolish our rights and put an end to our present government. I urge all Americans to distribute the "main" FED-UP brochure ("saving $6000 in taxes per year, per person & balancing the budget) and collect signatures on the petition (see order form in the main brochure). Then all informed Americans can take action and hold their politicians accountable. The bankers control the media, but can not stop patriotic Americans from using copy machines to distribute information and inform America. Once informed, people will demand an explanation why Congress allowed this fraud as the media appeared to be independent and investigative, but remained silent on this important issue. 

The ones who scream the loudest to keep the Federal Reserve Bank probably profit the most. 

[About the Author:] Thomas D. Schauf, CPA, is a national speaker to Certified Public Accountants and business leaders. Mr. Schauf's expertise includes banking, the economy, business appraisals, mergers, and acquisitions. We are looking for leaders in all states to help us abolish the FED. Please write and let us know you're willing to help. The future of America depends on you. 

CONTRIBUTIONS TO CONTINUE THE CAUSE ARE APPRECIATED PLEASE HELP DISTRIBUTE INFORMATION AND COLLECT SIGNATURES ON PETITIONS Mr. Schauf and other speakers are available to speak at seminars, group meetings, on radio, and on television. 

FED-UP(tm) * P.O. Box 834 * Streamwood, IL 60103-0834 





Our country likes to thank our forefathers for the Constitution. 

I wish to thank Mr. Lou Gamboa for his research of the Constitution and our banking system. Lou Gamboa is a national speaker on the subject, and has spoken on numerous radio programs in an effort to educate the public. I also want to thank Bob Corcoran for his research and encouragement. 

I applaud the thousands of patriotic Americans who are spreading the word so we can live in economic prosperity and uphold our Constitutional rights. ARTICLE 1, SECTION 8 OF THE CONSTITUTION STATES THAT CONGRESS SHALL HAVE THE POWER TO COIN (CREATE) MONEY AND REGULATE THE VALUE THEREOF. IN 1935 THE SUPREME COURT RULED THAT CONGRESS CANNOT CONSTITUTIONALLY DELEGATE ITS POWER TO ANOTHER GROUP. (Reference 22, P. 168) 

Rothschild, a London Banker, wrote a letter saying "It (Central Bank ) gives the National Bank almost complete control of national finance. The few who understand the system will either be so interested in its profits, or so dependent on its favours, that there will be no opposition from that class... The great body of the people, mentally incapable of comprehending, will bear its burden without complaint, and perhaps without even suspecting that the system is inimical (contrary) to their interests." [The bankers created the legislation for the FED] 

In 1913, before the Senate Banking and Currency Committee, Mr. Alexander stated: "But the whole scheme of a Federal Reserve Bank with its commercial-paper basis is an impractical, cumbersome machinery, is simply a cover, to find a way to secure the privilege of issuing money and to evade payment of as much tax upon circulation as possible, and then control the issue and maintain, instead of reduce, interest rates. It is a system that, if inaugurated, will prove to the advantage of the few and the detriment of the people of the United States. It will mean continued shortage of actual money and further extension of credits; for when there is a lack of real money people have to borrow credit to their cost." 

Wisdom And Freedom produced by WORLD NEWSSTAND 
Copyright © 1999. ALL RIGHTS RESERVED.
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Quote:An Act 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.1 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, that: Section 

1. SHORT TITLE. This Act may be cited as the Monetary Reform Act.

Sec. 2. IMPLEMENTATION. This Act shall be implemented over a one-year transition period, beginning thirty days after the date of the enactment of this Act. 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 therefore 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. 


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 called, 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 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 thereof. 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. 


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), or imprisoned not more than 20 years, or both; but if the amount of the violation does not exceed $1,000, the violator(s) shall be fined treble damages or imprisoned not more than one year, or both. 

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.1' 

In any period in which the exchange stabilization find 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.12 

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. 

* * *



1. A draft in 17 sections; last revised 8/31/98, Copyright 1996, 1997. All rights reserved. For a free copy of the latest revision of the Act, send a SASE to: Monetary Reform Act, P.O. Box 4605, Rolling Bay, WA 98061 - 0684, or call 1-888-THE PLOT to order the video The Money Masters which has the Act as an insert, or visit link. Minor revision is an ongoing process in response to suggestions received. Return to 

main article 

2. The principal point of this section and of the entire Act is to replace private creation of money by debt-based, bank-book-entry creation (i.e. by bank loans), based on fractional reserves (i.e. high-powered money) which is inherently unstable and unjust, with government creation of money by credit-based Treasury deposits and U.S. Notes (i.e. for government payments or purchases) which are based on full reserves (i.e. not high-powered money), by definition, for the benefit of all the people, not just for bankers. Return to main article 3. The net National Debt (i.e. net of what the government owes itself) is c. $3.7 trillion. C. $400 billion is held by the Fed, and c. $300 billion by financial institutions; paying off these amounts would consist of little more than a Treasury Department book entry, and the balance of merely surrendering and substituting one form of government obligation for another (e.g. interest bearing U.S. bonds for non-interest bearing U.S. currency Notes.). See section 3., supra. 

Alternatively, in a less comprehensive but arguably easier reform, full-reserve banks could be required to keep their reserves in either the form of cash or federal debt securities. This would be equivalent to keeping their reserves in interest-bearing Treasury Deposits. Both methods would effectively require banks to substitute existing bank liabilities for the entire marketable government debt in one form or another. Free markets to facilitate this substitution would very rapidly arise and should be allowed to so function. Similarly, Federal Reserve Notes and/or Deposits could be used instead of U.S. Notes and Treasury Deposits, PROVIDED one hundred percent (100%) reserve banking (section 4.) is enacted. The form of the new reserves required for the transition to full-reserve banking is immaterial provided they result in the substitution of government securities for existing bank liabilities, and provided fractional reserve banking is terminated as the reserve requirement is increased to one hundred percent (100%), scheduled concurrently to avoid any inflationary/deflationary effect. Return to main article 4. As the net U.S. Debt less Savings Bonds/Notes is c. $3.6 trillion, and commercial bank liabilities, less net assets total c. $3.6 trillion, retiring the National Debt with U.S. 

Notes or their equivalent would not change the total of the money supply and would provide sufficient funds for the transition to one hundred percent (100%) reserve banking with neither inflation nor deflation. Section 6. also provides the Secretary of the Treasury with the flexibility to purchase the c. $184 billion of Savings Bonds/Notes with U.S. Notes during the transition period as well, should this prove advisable to provide additional funds for reserves; otherwise, this relatively minor debt facility shall be retired out of future monetary growth (see section 7.). Return to main article 5. The three percent (3%) figure represents the low end of the three-to-five percent (3-5%) range proposed by Prof. Friedman and Mrs. Friedman, for a Constitutional Amendment limiting monetary growth, which we completely support (see endnote 13. for text). However, this draft Act takes the practically-easier legislative approach and adds the critical prohibition of fractional reserve banking as well as other related issues. With population growth and productivity increases averaging approximately one percent (1%) each per year for the last thirty years, a three percent (3%) growth figure will insure stable prices within a vary narrow range and would allow for price-level or cost-of-living adjustments (COLAs) in contracts with a predictable effect to address any slight variation in economic activity from the three percent (3%) monetary growth rate.


 Further, as perfect fine-turning of monetary growth in a complex economy is not possible, to err on the side of a very slight inflation would at least relieve those burdened by debt of some of the effects of the prior inequity caused by private money creation, whereas to err on the side of deflation would exacerbate such inequity. A fixed rate of growth will provide the needed stability so long lacking monetary policy, which instability has caused every economic depression in United States history. In 1931, Sweden established a mixed commodity krona by setting up an official C.P.I., and succeeded in keeping it stable (within 1.75%) for several years, until she had to give up the system under pressure from international bankers to stabilize foreign exchange rates.


 This example demonstrates both empirical proof of the validity of this ideal approach, and of its susceptibility to failure by political manipulation Periodic, non-discretionary, fine-tuned adjustments based on widespread indexation of prices, by a Monetary Commission of some sort would be the ideal, but lack the stability and predictability of a fixed growth rate and are subject to corruption and to manipulation indirectly (e.g. such as by alteration of index definitions, components or base years as has repeatedly occurred with the Department of Labor's Consumer Price Index [CPI]). 

The zero (0%) monetary growth proposal, particularly if tied to freezing high-powered money, lacks the essential feature of abolishing fractional reserve banking. 

This is particularly important in light of all the exceptions to maintaining any reserve ratio. However, if combined with such an abolition (and allowing for COLAs to address the inevitable deflationary effects), would be acceptable and arguably easier to advance politically due to the Schelling point effect of a figure such as zero, as Prof. Friedman has pointed out. But, as Paul A. Samuelson noted, the gyrations in the flitures markets tend to belie the notion that monetary stability can be found in that direction 6. Absent massive fraud or theft, full reserve banks cannot fail, rendering insurance such as F.D.I.C. and F.S.L.I.C. unnecessary. Only a minimal cost to insure against fraud or theft would be necessary. Had full reserve banking been in place before the S & L collapse, this one reform would have saved the U.S. taxpayers over $600 billion. Return to main article 7. 

As now, no interest would be paid on currency in circulation - the government benefitting from the seigniorage. However, as Prof. Friedman and George Tolley warn, if the government pays no (0%) interest on reserves, which is the theoretical ideal (or charges banks interest on Treasury-assumed bank liabilities [e.g. on so-called Commercial Bank Conversion Bonds] - a variation of a one-time government take-over of existing reserveless [i.e. factional-reserve-based loans] bank liabilities), this would create a high incentive for private near-monies of various kinds (e.g. new forms of negotiable debt, equity or derivative instruments) to proliferate, particularly in advanced economies such as the U.S. This would threaten many of the benefits of monetary reform including the stability of the money supply and the prohibition of private fractional reserve money creation. The interest may be viewed as a social cost for the benefits of a stable national money. 

The private trading (circulation) of futures based on widespread price indices as money offers only speculative, though intriguing, reform possibilities at this time. Return to main article 8. While it would theoretically be easier simply to reform the Federal Reserve System than to abolish it, the experience of the last 300 years in Europe and the last 200 in the U.S. has proven time and again that private banking interests invariably utilize any independence afforded a central bank from government control as an opportunity to exert undue influence over it, often by acquiring outright ownership interests in it, and/or to gain control of it through placement of their employees and experts (schooled in protecting and promoting their private interests who often "retire" to very well-paid positions in private banking) in its key positions at the expense of the public good. This is one reason for the seeming anomaly that private banking interests champion the "independence" of central banks from any effective oversight by politicians generally controlled by them. It simply exposes central banks to even greater private manipulation with less interference from and explaining to have to do to "unreliable" politicians. Independent central banks concentrate national economic control in a body too removed from accountability and therefore from responsibility to the body politic, at least in the often critical short-term. 


The so-called independence or autonomy of central banks from governmental control, such as the Federal Reserve System has in the United States, to whatever degree granted, has in practice meant increased private influence and control to that same degree. The avowed purpose of central bank independence or autonomy - to reduce political (i.e. private special interest) influence over its functions - something the present independent central banking system utterly fails to achieve but rather enhances, can be accomplished without this danger, by establishing a fixed rate of monetary growth not subject to any discretionary authority or manipulation, as is set forth in section 7. Of course, this too could be a reform within the present Federal Reserve System, but absent direct accountability to Congress (including for annual budget appropriations - a power now uniquely delegated to the Fed which funds its operations without Congressional budget authorization or audit, from interest it receives on the U.S. bonds it purchases for the cost of the paper) the Fed would remain the powerful, effectively independent and dangerous, entrenched banking lobby with virtually unlimited and unaudited funds, constantly working to resist, obstruct and repeal reforms, just as it did during the Great Contraction (i.e. Depression) which it caused. 

Further, the current division of responsibility for monetary policy between the Fed and the Treasury has allowed both bodies to shift responsibility to the other for harmful actions. This can only be solved by ending this division. Return to main article 9. Other conflicting, or partially conflicting Acts, such as the Banking Acts of 1933 and 1935; Federal Securities Act of 1933; Securities Exchange Act of 1934; Margin Requirements Act of 1934; Public Utility Holding Company Act of 1935; Bretton Woods Agreements Act of 1944; Federal Deposit Insurance Act of 1950; Bank Holding Company Act of 1956; Bank Merger Acts of 1960 and 1966; Emergency Loan Guarantee Act of 1971; Electronic Funds Transfer Act of 1978; International Banking Act of 1978; Financial Institutions Regulatory and Interest Rate Control Act of 1978; Depository Institutions Deregulation and Monetary Control Act of 1980; Bank Export Services Act of 1982; Garn-St. Germain Act of 1982; Financial Institutions Reform Recovery and Enforcement Act of 1989, and subsequent amendments, would be repealed in whole or in part where in conflict with this Act. 

Return to main article 10. The U.S. Supreme Court, in an increasingly important decision, held that an Act of Congress is on full parity with a treaty (or any lesser agreement), and that when a federal statute which is subsequent in time is inconsistent with a treaty, the statute, to the extent of the conflict, renders the treaty null. Whitney v. Robertson, 124 U.S. 190 (1888); et aliacf. Reid v. convert, 354 U.S. 1 (1957)Return to main article 11. 

It is estimated that $200-250 billion in U.S. currency is held outside the U.S. This is high-powered money that would cause hyper inflation if repatriated in large amounts in a short period of time. Additionally, the U.S. presently has a high trade deficit, which has been roughly balanced by U.S. bond sales to foreigners, which total approximately $1 trillion at present. Further, currency speculators manipulate and exacerbate temporary exchange fluctuations, which can radically affect internal price stability, as has been recently demonstrated in several of the Southeast Asian nations. 

Whoever originates and controls the volume of money, controls every single economic operation. Therefore, it is essential to monetary stability, and so to reform, as well as to maintaining national sovereignty, that the import and export of capital be kept in balance, so that the domestic money supply be not subject to manipulation nor to fluctuation in quantity, beyond the rule fixed in section 7., above. 

Stability of the internal quantity of money is the only basis on which to obtain a stable price level, and foreign exchange rates must not be allowed to disrupt internal price stability. This can be accomplished, there being no theoretical difficulty. For example, the government of China simply forbids banks from handling large foreign transactions other than those for the purchase of Chinese goods, and also maintains a large exchange stabilization fund to defend the yuan. Chile requires that 30% of capital inflows stay in the country a minimum of one year. 

12. i. e. the so-called Tobin tax, designed to discourage speculative trading in small differentials in interest on exchange rates.

13. Prior inequitable and usurious profits accumulated by banks from fractional reserve banking practices are not addressed in this draft Act, which therefore leaves the banks in possession of prior profits of some $360 billion (1996 commercial bank net worth), most of it from such unjust practices. Likewise, prior distribution of profits to bank owners is not addressed. This vast wealth and the economic and political influence it represents, particularly through the control of the media it has purchased, constitutes a standing danger to the Republic and should be addressed, perhaps by some effective form of anti-trust legislation and/or Court action breaking-up the giant banks (and media) into small localized units with separate ownership, or more aggressively by a bank nationalization, break-up into smaller units, and immediate reprivatization by public stock sale pursuant to rules insuring widespread ownership.

But any nationalization Act without an immediate reprivatization clause would create a new and unnecessary danger, as the power to loan does not properly rest with the government, is most effectively handled at the local free market level, and is easily abused for political purposes as was the case with pre-war Germany's Reichbank which granted loans to whomever the government chose for political reasons, as do government banks in communist command economies. 

The goal is not nationalization of banks, but of money. By contrast, and by definition, creation of a national currency/money supply can only be effectively and properly handled by a national government, not by local governments or private persons, as reason and experience abundantly prove. It is primarily for these reasons that we disagree with that portion of the monetary reforms advanced by Messrs. Peter Cook, Theodore R. Thoren and Richard F. Warner, insofar as they advance the notion that the Treasury ought to become a lender to banks and local governments, while we are in general agreement with their reform proposals otherwise (including their rejection of a return to a gold standard). Rather, consistent with the sound reform principle of subsidiarity, the private sector alone ought to engage in the various legitimate forms of lending, as set forth in section 12. herein, with free market supply and demand setting the interest rates. 

Government selection of lending proposals for "creditworthiness" or "profound societal impact" etc, or any criteria imaginable, and their evaluation, is inevitably subjective and therefore open to grave abuse by a monolithic lender. As Ms. G. M. Coogan wrote in Money Creators (p. 333-334), for the government to create money as loans is even more vicious than for private banks to create money as loans, carrying with it the power to aid (by granting loans) or destroy (by denying loans) whomever it chooses. Decentralized, private lending agencies generally tend to loan to any creditworthy applicant, their primary motive being profit (or profit-derived power) which is maximized by making more loans; whereas governments replace this profit priority with political ends such as rewarding their supporters, the political value of which is maximized by restricting loans. So government lending tends to arbitrary discrimination for political motives, an abuse generally avoided in a truly free market lending situation. 

Thus, perhaps the most dangerous error of any monetary reform proposal would be to place the lending of money in the hands of the government, which is the essence of communist economics, carrying with it the power to destroy. Indeed, Lenin recommended government origination and control of lending for the political control it affords. That money-lending ought to be carried out by private legal persons rather than the government is a major principle of sound monetary policy. The lending of money ought to be completely divorced from its origination, for as Ms. Coogan pointed out, it is fundamental that money ought not to come into existence as loans or in response to loan applications, but only as the total stock of available goods increases (or a reasonable approximation thereof, such as three percent [3%] in the U.S.). Further, there is simply no need for the government to get involved in lending, and risk the dangers mentioned, in order to reform the present system and achieve all of the ends set forth in the preamble hereof. Return to main article 14.Prof. Milton Friedman on his proposed Constitutional Amendment "When the Constitution was enacted, the power given to Congress 'to coin money, regulate the value thereof, and of foreign coin' referred to a commodity money: specifying that the dollar shall mean a definite weight in grams of silver or gold. 

The paper money inflation during the Revolution, as well as earlier in various colonies, led the framers to deny states the power to 'coin money; emit bills of credit [i.e., paper money]; make anything but gold and silver coin a tender in payment of debts.' The Constitution is silent on Congress's power to authorize the government to issue paper money. It was widely believed that the Tenth Amendment, providing that the 'powers not delegated to the United States by the Constitution . . . are reserved to the States respectively, or to the people,' made the issuance of paper money unconstitutional. 

During the Civil War, Congress authorized greenbacks and made them a legal tender for all debts public and private. After the Civil War, in the first of the famous greenback cases, the Supreme Court declared the issuance of greenbacks unconstitutional. 

One 'fascinating aspect of this decision is that it was delivered by Chief Justice Salmon P. Chase, who had been Secretary of the Treasury when the first greenbacks were issued. Not only did he not disqualify himself, but in his capacity as Chief Justice convicted himself of having been responsible for an unconstitutional action in his capacity as Secretary of the Treasury.' Subsequently an enlarged and reconstituted Court reversed the first decision by a majority of five to four, affirming that making greenbacks a legal tender was constitutional, with Chief Justice Chase as one of the dissenting justices.


It is neither feasible nor desirable to restore a gold-or-silver coin standard, but we do need a commitment to sound money. The best arrangement currently would be to require the monetary authorities to keep the percentage rate of growth of the monetary base within a fixed range. This is a particularly difficult amendment to draft because it is so closely linked to the particular institutional structure. 

One version would be: Congress shall have the power to authorize non-interest-bearing obligations of the government in the form of currency or book entries, provided that the total dollar amount outstanding increases by no more than 5 percent per year and no less than 3 percent. It might be desirable to include a provision that two-thirds of each House of Congress, or some similar qualified majority, can waive the requirement in case of a declaration of war, the suspension to terminate annually unless renewed. A Constitutional Amendment would be the most effective way to establish confidence in the stability of the rule. However, it is clearly not the only way to impose the rule. Congress could equally well legislate it. "Quoted from: A Program for Monetary Stability, by. Dr. Milton Friedman, Fordham University Press (N.Y. 1960, 1992), pgs. X, 66-76, 100-101; and, Free to Choose by Dr. Milton & Rose Friedman, Harcourt Brace & Co. (San Diego 1980, 1990), pgs. 307-308.

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