'Money of Account' of the United States
'Money of Account' of theUnited States
In the United States today we have in effect two governments . . . We have the duly constitutional Government . . . Then we have an independent, uncontrolled and uncoordinated government in the Federal Reserve System, operating the money powers which are reserved to Congress by the Constitution."
Congressman Wright Patman,
Chairman, House Banking Committee
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31§ 5101. Decimal system
United States money is expressed in dollars, dimes or tenths, cents or hundreths, and mills or thousandths. A dime is a tenth of a dollar, a cent is a hundredth of a dollar, and a mill is a thousandth of a dollar.
Source ( U.S. Code)
Source (Statutes at Large)
R.S. § 3563.
The word money is substituted for money of account to eliminate unnecessary words. As far as can be determined, the phrase money of account has not been interpreted by any court or Government agency. The phrase was used by Alexander Hamilton in his Report on the Establishment of the Mint (1791). In that Report, Hamilton propounded 6 questions, including:
1st. What ought to be the nature of the money unit of the United States ?
Thereafter, Hamilton uses the phrases money unit of the United States and money of account interchangeably and in the sense that the phrases are used to denote the monetary system for keeping financial accounts. In short, the phrases simply indicate that financial accounts are to be based on a decimal money system:
., and it is certain that nothing can be more simple and . . convenient than the decimal subdivisions. There is every reason to expect that the method will speedily grow into general use, when it shall be seconded by corresponding coins. On this plan the unit in the money of account will continue to be, as established by that resolution [of August 8, 1786], a dollar, and its multiples, dimes, cents, and mills, or tenths, hundreths, [sic] and thousands.
Thus, the phrase money of account did not mean, by itself, that dollars or fractions of dollars must be equal to something having intrinsic or substantive value. This concept is supported by earlier writings of Thomas Jefferson in his Notes on the Establishment of a Money Unit, and of a Coinage for the United States (1784), and the 1782 report to the President of the Continental Congress on the coinage of the United States by the Superintendent of Finances, Robert Morris, which was apparently prepared by the Assistant Superintendent, Gouverneur Morris. See Paul L. Ford, The Writings of Thomas Jefferson, vol. III (G.P. Putnams Sons, 1894) pp. 446457; William G. Sumner, The Financier and the Finances of the American Revolution, vol. II (Burt Franklin, 1891, reprinted 1970) pp. 3647; and George T. Curtis, History of the Constitution, vol. I (Harper and Brothers, 1859) p. 443, n2. The words or units and and all accounts in the public offices and all proceedings in the courts shall be kept and had in conformity to this regulation are omitted as surplus. [snip]
(c) Procurements Relating to Coin Production.
(1) In general. The Secretary may make contracts, on conditions the Secretary decides are appropriate and are in the public interest, to acquire articles, materials, supplies, and services (including equipment, manufacturing facilities, patents, patent rights, technical knowledge, and assistance) necessary to produce the coins referred to in this title.
(A) Subject to subparagraph (B), in order to protect the national security through domestic control of the coinage process, the Secretary shall acquire only such articles, materials, supplies, and services (including equipment, manufacturing facilities, patents, patent rights, technical knowledge, and assistance) for the production of coins as have been produced or manufactured in the United States unless the Secretary determines it to be inconsistent with the public interest, or the cost to be unreasonable, and publishes in the Federal Register a written finding stating the basis for the determination.
(B) Subparagraph (A) shall apply only in the case of a bid or offer from a supplier the principal place of business of which is in a foreign country which does not accord to United States companies the same competitive opportunities for procurements in connection with the production of coins as it accords to domestic companies.
(e) Notwithstanding any other provision of law, the Secretary shall mint and issue, in quantities sufficient to meet public demand, coins which
(1) Sale price. The Secretary shall sell the coins minted under subsection (e) to the public at a price equal to the market value of the bullion at the time of sale, plus the cost of minting, marketing, and distributing such coins (including labor, materials, dies, use of machinery, and promotional and overhead expenses).
The standard troy pound of the National Institute of Standards and Technology of the Department of Commerce shall be the standard used to ensure that the weight of United States coins conforms to specifications in section of this title.
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or . regardless of . silver coins are not legal tender for debts. The words All . when coined or issued are omitted as unnecessary because of the restatement. The word debts is substituted for debts, public and private to eliminate unnecessary words. The words are omitted as included in debts.
In his book "The Miracle on Main Street ", (ISBN# 978-0-911805-00-0) at pg 77, F. Tupper Saussy ask the following question, 'Is Dream Money Lawful Money?' (You've got to get this book! Note; this book was first copyrighted in 1980 so many of the statute number are outdated. I'll attempt to identify the current ones within the writing.)
Title 31§321 () declares FRNs to be "legal tender". (See "The U.S. Monetary System," p. 148) Since no state or municipal authority can order debts to be settled in irredeemable paper, this statute merely means that FRN's can be offered and accepted as payment in full if neither party objects.
Legal tender is quite different from lawful money. in no US law are FRN's declared to be "lawful money." Lawful money is that money described in The Coinage Act of April 2, 1792 and in Article 1§10 of the US Constitution: gold and silver coined by Congress, the only money the Supreme Law of the land allows the states to make a legal tender.
It's important for you to mark well that FRNs 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 G-d 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 FRN is intrinsically worth about one cent. It's extrinsic worth is whatever it will buy from day to day in the marketplace, just like the 1916-1923 German mark.
Is this any kind of money for a stable country to have?
Between 1913 and 1963, the Fed 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 G-d We Trust" in exchange for your silver dollar back for the note. An unfair deal, you might say, but who took steps to prevent it?
Interestingly, the first 50,000,000 no-promise FRNs were shipped out on Nov 26, 1963, which happened to be the day of JFK'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.
Before 1963, FRNs, defined by law as "obligations of the US " (12 US 411)  were "REDEEMABLE IN LAWFUL MONEY AT THE US TREASURY OR AT ANY FR BANK." Lawful money, you'll remember, "shall be construed to mean gold or silver coin of the US ." (12§152) ( -- repealed in 1994)
Before 1963, "This note is legal tender for all debts, public and private, and is redeemable in lawful money at the US Treasury, or at any FR Bank."
After 1963, "This note is legal tender for all debts, public and private."
The silver certificate was a US treasury receipt for one dollar's worth of silver, or 412.5 grains of silver 90% fine. Since it did not specify silver "coin", many silver certificates were redeemed for little bags of silver power! The irredeemable FRN was treated (and still is by many judges) as a "new kind" of silver certificate, when in fact it bears no relation (other than likeness) in the real world to the silver certificate whatsoever.
To declare the FRN to be a modification of the silver certificate is to perpetrate a fraud. Yet, on November 26, 1963, the Fed Reserve sent out the following press release announcing the changeover. [C.O'Donnell, the Standard Handbook of United States paper Money, Sixth Edition, Harry J. Forman, Inc.., Philadelphia, p. 28]
For immediate release. November 26, 1963. The Board of Governors of the Federal Reserve System and the Treasury Department announced today that more than 50 million new $1 Federal Reserve notes are going into circulation. Issuance of the new $1 notes, authorized by Congress last June, has already begun at all 12 Federal Reserve Banks and their 24 Branches to commercial banks in every part of the country. This will make more silver available for coinage purposes and help to meet the increased demand for currency in connection with pre-Christmas business.
To facilitate the widest possible distribution, the initial supply of the new notes is being distributed through normal commercial banking channels; none of the first 50 million notes will be available to the public at any of the Federal Reserve Banks or Branches.
The new $1 Federal reserve notes clearly resemble the present $1 silver certificates, which ultimately they will replace completely. the back of the new notes and the portrait of George Washington on the face will be exactly the same as the silver certificates. the main difference will be the addition of a symbol, appearing to the left of the portrait, identifying the issuing Federal Reserve Bank, and the wording on the face of the bill. the notes bear the signatures of the Secretary of the Treasury and the Treasurer of the United States , as do Federal Reserve notes of other denominations.
The new notes will read [above the portrait] "The United States of America " and [below the portrait] "One Dollar." The legend stating that the bill "Is Legal Tender For All Debts, Public and Private" appearing on the silver certificates will also appear on the new Federal Reserve notes, but the new notes will not contain any reference to silver. Thus, they will not carry the language: "This Certifies That There Is On Deposit In The Treasury Of The United States of America" [above portrait] and "One Dollar In Silver Payable To The Bearer On Demand" [below the portrait].
Federal Reserve notes have been the basic circulating currency of the United States for many years, comprising over 85 percent (more than $30 billion) of the face amount of all currency in circulation today. They are back 100 percent by collateral in the form of gold certificates, U.S. Government securities, or short-term paper discounted or purchased by the Federal Reserve Banks.
Aside from Changing Times, the only national magazine to mention the Federal Reserve's subtle issuance of irredeemable paper was U.S. News & World Report, December 9, 1963. The event was treated like the introduction of a "new, improved" product. The logic is completely Alice-in-Wonderland : how does the withdrawal of silver certificates from circulation promote the coinage of silver dollars? here's the U.S.N.W.R. story in its entirety:
NOW, A NEW TYPE OF DOLLAR BILL
Fifty million $1 bills of a new kind are being put into circulation. The new and old notes ~ as shown in photos above ~ are very similar. The major difference between the two is that the new bill contains no reference to silver. Congress authorized the Treasury to start withdrawing the $1 silver certificates so the Government's stock of silver bullion could be used for coins or other purposes.
If Congress approves, silver dollars are to be coined next year for the first time in 30 years.
These days it appears like there's not enough gold and silver "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 check things out! How easily we surrender our lives to gossip! Oh, that ideasphere! forAmerica to be "off the gold (or silver) standard" the Coinage Act of April 2, 1792, which specifies in detail how our money is to be 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 to be passed and ratified by three-fourths of the states.
As of 1980, neither of these events has happened. G-d help us if they 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 uses of the public) and demand deposits (checking accounts in commercial banks). Since $1 in currency and $1 in demand deposits are freely convertible into each other at the option of a bank's customer, both are money to an equal degree. What... makes these instruments acceptable at face value payments of all debts? mainly, it is the confidence people have that they will be able to exchange such money for real goods and services whenever they choose to do so."
[Modern Money Mechanics, Dorothy Nichols, published 1975 by the Federal Reserve Bank of Chicago ]
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?
The government is limited to a special kind of money by federal statute. For, you see, in order to live up to the Constitution's promise of establishing domestic tranquility 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 31§371, which you should memorize. (now 31§5101 - above)
31§371 The money of account of the US 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 into he public offices and all proceedings in the courts shall be kept and had in conformity to this regulation.
Thus, it is federal regulation that all accounts in the public offices and all proceedings in the courts must be conducted in whatever has been declared to be "the money of account of the US ," this money being expressed -- or measured -- in "dollars."
A dollar, therefore, is neither a coin nor a piece of 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 parking ticket, "Fifteen dollars of what?"
When courts and public offices require us to pay in dollars, the dollars must -- until Article 1 §10 is amended or repealed -- be dollars (or units) of the money of account of the US . Is there any doubt in your mind as to what the money of account of the US is?
The Coinage Act of 1792 specifically declared gold and silver to be "as money in theUS ." But in the 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 US from the banking system w/out declaring a replacement, with the astonishing result that neither our courts nor our public offices are complying with 31§371. [N.B. Perhaps due to the surge of inquiries by readers of this little book, section 371 was changed by Public Law 97-258 on September 12, 1982 to read, "US money is expressed in dollars, dimes or tenths, cents or hundredths, mills or thousandths..." Importantly, the change does not affect the meaning of 371 (found in July 2003 at 31§5101). The purpose of PL. 97-258, according to its preamble, was to "revise, codify, and enact w/out substantive change, certain general permanent laws, related to money and finance..." ["Without substantive change" means that if ever a dispute should arise over the meaning of any part of the revision, the original statute must be reverted to.]
Federal Reserve notes and all those confidence-building, 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 US , as gold and silver have. They may even be measured in dollars or units, but not in dollars or units of money of account of the US .
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 US that is measured in dollars in which "all accounts in the public offices and all the 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 disproves me.
In short, Federal Reserve notes are compelling images charged with charm and enchantment, like movies and TV and pages in a magazine. 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.
Mr. Saussy says in his footnote on page 83, "I'm being intentionally repetitive about this "money-of-account-of-the-United-States-that-is-expressed-in-dollars" business because there's so much misinformation we must set right. The dollar is NOT the money of account, it is the UNIT by which the money of account is measured. Please re-read this section until you have it cold."
George Washington wrote to John Laurens in 1781, "Experience has demonstrated the impracticability long to maintain a paper credit without funds for its redemption."
All the perplexities, confusion and distress in America arise not from defects in their constitution or confederation, not from a want of honor or virtue so much as from downright ignorance of the coin, credit, and circulation." John Adams to Thomas Jefferson, 1787
THE MAIN STREET JOURNAL, Vol. 1 No. 3, October 1981... Assertions of economic rights increased with such fervor that on July 4, 1981, it was reported of a Kansas municipal judge who was so impressed with the constitutional solution to our economic problems that he began reading "money rights" to anyone facing a fine in his courtroom. Judge Larry Moritz's "money rights" warning was praised by all lovers of the Constitution:
It is clear by Article 1 Section 10 of the US Constitution and by Title 31§371 of the US Code that this court can only make gold and silver coin a tender in payment of debts. However, this court will accept other forms of money, such as Federal Reserve notes or personal checks if tendered.
Judge Thomas Rallis, Justice of the Peace in Pima County , Arizona reached a Constitutional compromise:
The Court finds you guilty because you still don't have registration but I will not impose a fine. Because I don't want you to pay the Court in gold or silver if you do not have it
On October 3, 1983, County Attorney for Chase County, Nebraska, Guy Curtis wrote:
My opinion to your inquiry regarding the payment of your tax debt... is applicable to any state ...Article 1, Section 10 requires the state ... to denominate your tax debt in gold or silver coin.
Unless and until the state authority denominates your tax debt in gold or silver coin, you are legally immune from such tax since any assessment repugnant to Article 1, Section 10 is absolutely void ...
The stereotyped response by the state attorney general is to cite the federal legal tender law and peremptorily claim that it overrides the state's obligation under Art.1, Sec 10. That this "supremacy" argument is spurious is proved by the fact that the mandate of Article 1, Section 10 comes from theU.S. Constitution itself and is the supreme law of the land. The feds can insure their fiat paper money decree for payment of debts between individuals and for payment of federal taxes and debts, but not between states and their citizens.
Article 1 Section 10 doesn't prohibit the state from accepting paper money. It merely prohibits the state from declaring that things other than gold and silver coin are lawful tender. In other words, when the state Attorney General is asked "What does the state declare is legal tender", he must answer "Gold and silver coin."
If any property or sales tax form or citation ~ any bill from state or local government, even a parking ticket ~ is labeled "Dollars," we have the right to ask the state, "Does this mean dollars of paper or dollars of silver and/or gold?" The state is not likely to answer gold and silver, since there are none in circulation, and if it answers paper or Federal Reserve dollars, we have the right to ask, "May I see the statute declaring paper to be a tender in payment of debts in this state?"
Of course, there will be no statute declaring paper to be tender in payment of debts. it would bean embarrassing, flagrant violation of the United States constitution. Here's an example of how rigidly a state must adhere to Article 1 Section 10. This is a case cited in the NOTES TO DECISIONS involving Article 1 Section 10 as published in the Tennessee Code Annotated:
Since nothing but gold and silver coin is a legal tender, tender in bank notes of the bank of the United States to redeem land sold under execution, if objected to will not be good, although equal to coin. ~ LOWRY v McGHEE (1835), 16 Tenn. 242
So there it is, still on the books in the 1980 edition, a case in which the court had no choice but to sustain a man's objection to paper currency, even though the currency was redeemable in gold and silver coin! You can imagine what that court would have said to irredeemable Federal Reserve paper.
If there is no law entitling the state to enforce payment in paper money, and if our paper notes are not redeemable for gold and silver dollars, we and the state have reached an impasse in our economic favor, or what the St. Louis monetary realist Amos Bruce calls a Mexican standoff. We'll pay as soon as they show us how we lawfully can.
And, what if some government official should come after us and bug us in any way? We have the protection of the law, not he. All states have official misconduct statutes. The important part here being "willfully and corruptly". This means that we must first inform the official of Article 1 Section 10, of the fact that bank credits and Federal Reserve paper money are not fold and silver coin, and that you know he is bound by oath to support the Constitution. You see, we're helping them not to break the law by educating him. Now we've given him fair warning. If he tries to oppress us from this point onward, he is being "willful and corrupt," and all we have to do ~ if the District Attorney plays dead ~ is appear before a Grand Jury ourselves, tell those taxpayers what this official did, and get him indicted!
Don't believe the false notion that government officials are permitted to operate corruptly and safely behind "sovereign immunity" laws. There are no sovereigns inAmerica (except us, the people) and no government official is immune from justice if he abuses your rights. We can establish a personal fortune upon the ruins of anyone who runs roughshod over our Constitutional guarantees: he who would unlawfully jeopardize our property loses property to us, and that's what justice is all about.
42§1983 (as of Jan. 2, 2006)
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officers judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia .
As soon as even the most ornery government enforcement people figure out what the issue is all about (and we have to help them, work with them), they instantly join our side. They have to, because the Constitution is on our side. Not to agree with us is to deplore the Constitution, and many people still consider that TREASON.
The people ~ that's us too ~ are entitled to a constant and dependable value of gold and silver coin, responsibly delegated by Congress, not the free market. [This is not to say Congress should ignore the free market. Rather, its regulations should issue in response to free market prices of gold and silver commodities, buffering us from the dangers of wild fluctuations. Is this not carrying out the Constitutional mandate to promote the general welfare"?] That's the whole purpose of Article 1 Sections 8 and 10. What all this means is that knowledgeable persons, persons who object to paper money under Article 1 Sections 8 and 10, are immune from all taxes, fees, debts of any kind under state authority until paper money is made redeemable in gold and silver coin. This is perfectly just. Shouldn't obedience to law and truth contain a reward? Isn't it fitting that economic benefits should flow abundantly upon those with the knowledge and courage to do the right thing by law?
History's paramount lesson is this: when tragedy gathers on the horizon, the knowers act to survive. Only the knowers survive. The knowers. The Noahs. If you still doubt the authority of the people and Article 1 Section 10, consider these principles from American Jurisprudence, supported by cases too numerous to cite.
1. No public policy of a state can be allowed to override the positive guarantees of the Federal Constitution. (16 Amjur 2nd, 70)
2. No emergency justifies the violation of any of the provision so the United States Constitution. (16 Amjur 2nd, 71)
3. Neither emergency nor economic necessity justifies a disregard of cardinal constitutional guarantees. (16 Amjur 2nd, 81)
4. Any attempt to do that which is prescribed in the constitution in any manner other than that prescribed, or to do that which is prohibited is repugnant to that supreme and paramount law and is invalid. (16 Amjur 2nd, 82)
When we consider the nature and the theory of our institutions of government, the principles upon which they are supposed to rest, and review the history of their development, we are constrained to conclude that they do not mean to leave room for the play and action of purely personal and arbitrary power. Sovereignty itself is, of course, not subject to law, for it is the author and source of law; but in our system, while sovereign powers are delegated to the agencies of government, sovereignty itself remains with the people, by whom and for whom all government exists and acts. And the law is the definition and limitation of power (118 US 356).
The term "office" embraces the idea of tenure, duration, and duties in exercising some portion of the sovereign power conferred or defined by law, and the term "employment" does not authorize the exercise of one's own right of any sovereign power or any prescribed independent authority of a governmental nature. Palmer v. State ex rel. Axelroad, 6 so.2d 550, 551, 149 Fla. 615. The term "office" implies a delegation of power of sovereignty to an individual whose duty it becomes to perform or discharge all powers of sovereignty so conferred, and it embraces tenure, duration and duties, and may or may not include compensation. State ex rel. Arthur Kudner, Inc. v. Lee, 7 So.2d 110, 114, 150 Fla. 35.
As set out in the notes of PL 94-412 #60. Joint Resolution of June 5, 1933 (48 Stat. 113, §1). Abrogation of gold clause in government obligations, held a repudiation of the pledge implicit in the power to borrow money (Art.1§8.2), and within the prohibition of the Fourteenth Amendment, against questioning the validity of the public debt.
The Fourteenth Amendment, in its fourth section, explicitly declares: 'The validity of the public debt of the United States , authorized by law , ... shall not be questioned.' While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the amendment was adopted. Nor can we perceive any reason for not considering the expression 'the validity of the public debt' as embracing whatever concerns the integrity of the public obligations. We conclude that the Joint Resolution of June 5, 1933, in so far as it attempted to override the obligation created by the bond in suit, went beyond the congressional power.
"The public welfare demands that constitutional cases must be decided according to the terms of our Constitution itself, and not according to judges' views of fairness, reasonableness, or justice. I have no fear of constitutional amendments properly adopted, but I do fear the rewriting of the Constitution by judges under the guise of interpretation."
Justice Hugo Black
in Columbia University 's
Charpentier Lectures, 1968
"The people can discern right, and will make their way to a knowledge of right... The appeal from the unjust legislation of today must be made quietly, earnestly, perseveringly: in a popular government injustice is neither to be established by force, nor to be resisted by force: in a word, the Union, which was constituted by consent, must be preserved by love."
Commemorative Oration Upon the Death of Andrew Jackson,
June 27, 1845
Roger Sherman, the great statesman of Connecticut, gave his mind to the questions about money and mediums, commerce and exchanges, and having mastered them, in 1752, under the name of Philoeuonomos, "the lover of just laws," he addressed to the men of Connecticut "A caveat against injustice, or an inquiry into the evil consequences of a fluctuating medium of exchange." These are some of his words: "The legislature of Connecticut have at length taken effectual care to prevent a further depreciation of the bills of this colony; the other governments," (meaning New Hampshire and Rhode Island) "not having taken the like prudent care, their bills of credit are still sinking in their value." ... "Money ought to be something of certain value, it being that whereby other things are to be valued."... "And this I would lay down as a principle that can't be denied, that a debtor ought not to pay any debts with less value than was contracted for, without the consent of or against the will of the creditor." . .. "If what is used as a medium of exchange is fluctuating in its value, it is no better than unjust weights and measures, both which are condemned by the laws of G-d and man; and, therefore, the longest and most universal custom could never make the use of such a medium either lawful or reasonable.
We, in this colony, are seated on a very fruitful soil; the product whereof, with our labor and industry and the divine blessing thereon, would sufficiently furnish us with and procure us all the necessaries of life and as good a medium of exchange as any people in the world have or can desire. But so long as we part with our most valuable commodities for such bills of credit as are no profit, we shall spend great part of our labor and substance for that which will not profit us; whereas if these things were reformed we might be as independent, flourishing and happy a colony as any in the British dominions."*
In May of the same year, the famous traveller, John Ledyard, and twenty-five other merchants of Connecticut caught up the theme, and in a petition to their legislature said: "The medium of trade whereby our dealings are valued and weighed ought to be esteemed as sacred as any weights and measures whatever, and, to maintain justice, must be kept as stable, for as a false weight and false balance is an abomination to the Lord, a false and unstable medium is equally so, as it occasions as much iniquity and is at least as injurious."*
The Connecticut assembly supported the memorialists, excluded the bills of paper money of Rhode Island , and overcoming every embarrassment, at last, like Massachusetts , redeemed every nine shillings of its paper money with one shilling in specie. After the first day of November, 1756, all accounts in Connecticut were kept in lawful money.
The same monetary system that was established on April 2, 1792, is in effect today.
--Bruce A. Budlong,
Special Financing Staff
Department of the Treasury, Fiscal Service
August 18, 1977
The terms lawful money and lawful money of the United States shall be construed to mean gold or silver coin of the United States . 12 USC §152 repealed Sept. 23, 1994, Pub. L. 103325, title VI, § 602(e)(22), (23), (f)(7), Section , R.S. § 5186, related to mandatory establishment of lawful money reserves by associations issuing gold notes and reception by such associations of gold notes of other associations in payment of debts.
Kenneth-R: of the Nicholson family estate
[Footnote 1] 12§411
Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States , in the city of Washington , District of Columbia , or at any Federal Reserve bank.&
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