money in the constitution "if any person had told me that there would have been such a...
TRANSCRIPT
Money in
The Constituti
on
"If any person had told me that there would have been such a formidable rebellion as exists, I would have thought him fit for a madhouse."
- George Washington, February 3, 1787
"Tranquility reigns … Our public credit stands on that high ground which
three years ago it would have been considered as a species of madness to have foretold.”
- George Washington, July 20, 1791
1. Definitions of Monetary Terms
2. The Founders’ View on Money
3. The Actual Words of The Constitution in Regards to Money
4. Modern Day Abuses of Money
5. What We Can Do About It
What We Will Cover:
What is Money?
Definition of Money:
Any article or substance used as a medium of exchange, measure of wealth, or means of payment
• Intrinsic Worth
•Divisible
•Portable
•Durable
•Relative Scarcity
What is Money?
What is Money?
Commodity Money
Fiduciary Money
Fiat Money
What is a Dollar?
What is a Dollar?
The Founders’ View on Money
“If . . . we should [use] unfunded paper money or any similar species of fraud, we shall assuredly give a fatal stab to our national credit in its infancy. Paper money will invariably operate in the body of politics as spirit liquors on the human body. They prey on the vitals and ultimately destroy them.”
George Washington
The Founders’ View on Money
“Paper money has had the effect in your state that it will ever have - to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”
George Washington
The Founders’ View on Money
"Paper is poverty,... it is only the ghost of money, and not money itself."
Thomas Jefferson
The Founders’ View on Money
“The extension of the prohibition to bills of credit must give pleasure to every citizen, in proportion to his love of justice and his knowledge of the true springs of public prosperity.”
James Madison
The Founders’ View on Money
In today’s terms, Madison was essentially saying,
“Americans will be happy to know that under the Constitution inflation is prohibited.”
"The trifling economy of paper, as a cheaper medium, or its convenience for transmission,
Thomas Jefferson
weighs nothing in opposition to the advantages of the precious metals... it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted."
“Shut and bar the door against paper money” Oliver Ellsworth, CT
“Remove the possibility of paper money.” James Wilson,
PA
“Disarm the government of such power.” Pierce Butler, SC
“[I will] reject the whole Constitution [if paper money is not barred].
John Langdon, NH
Founding Fathers’ Attitude Toward Paper Money:
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 10, Clause 1
“No State shall … coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts”
What is Constitutional Money?
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 10, Clause 1
“No State shall … coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts”
The 10th Amendment
“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 10, Clause 1
“No State shall … coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts”
Article 1, Section 8, Clause 5
“Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Article 1, Section 10, Clause 1
“No State shall … coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts”
Article 1, Section 8, Clause 2
“Congress shall have power to borrow money on the credit of the United States.”
Article 1, Section 8, Clause 2
“Congress shall have power to borrow money on the credit of the United States.”
Article 1, Section 8, Clause 2
“Congress shall have power to borrow money, or emit bills on the credit of the United States.”
removed!
Article 1, Section 8, Clause 2
“Congress shall have power to borrow money on the credit of the United States.”
How Do Loans Work?
A farmer works hard and earns $100He decides he doesn’t want to spend it yet so he deposits it in a bank, and the bank gives him $105 for doing so.The bank turns around and loans that money to a borrower the bank thinks is worthy of the risk of giving the money toThe bank charges the borrower $110 for the $100 it gives him The borrower takes the $100 and invests his time and effort into the capital it purchases and creates a revenue of $130In the end, the depositor makes $5, the bank makes $5, and the borrower makes $20. All because a farmer had worked hard to save up $100
How Do Loans Work Under Fractional Reserve Banking?
A farmer works hard and earns $100He decides he doesn’t want to spend it yet so he deposits it in a bank, and the bank gives him $105 for doing so.The bank turns around and loans $900 to a borrower it thinks is worthy of the loan (because the bank is only required to keep 10% on reserve, it creates $900 out of thin air) The bank charges the borrower $1000 for the $900 loan it created out of thin air The borrower takes the $900 to buy capital and invests his time and effort in order to create a revenue of $1200In the end, the depositor makes $5, the bank makes $1000, and the borrower makes $200. All because a farmer had worked hard to save up $100
Article 1, Section 7, Clause 1
“All bills for raising revenue shall originate in the House of Representatives . . .”
Prior to the 16th and 17th Amendments and the Federal Reserve Act of 1913
The People
U.S. House of Representatives
U.S. Senate
State Legislature
Bill
Increased Taxes?
No more taxes!
Kill the bill!
The People
U.S. House of Representatives
U.S. Senate
State Legislature
After the 16th and 17th Amendments and the Federal Reserve Act of 1913
“Among the enumerated powers, we do not find that of establishing a bank.”
Chief Justice John Marshall
But because the Constitution does not “expressly” prohibit one, Marshall claimed establishing a national bank to be Constitutional.
“… a den of vipers and thieves.”
1913The Wilson Administration passed:
• 16th Amendment - a heavy, progressive income tax (Plank #2 of the Communist Manifesto)
•17th Amendment – removes power of State Legislatures to check Federal usurpation of power
•A central bank, the Federal Reserve System (Plank #5 of the Communist Manifesto)
"Let us control the money of a nation, and we care not who makes its laws"
What is The Federal Reserve?In 2009, in an attempt to avoid transparency, the Federal Reserve Bank of New York Board of Governors argued:
“The FRBNY is not an establishment of the executive branch because it is a corporation whose stock is privately held . . . [It] is overseen by a board of directors the majority of whom are privately appointed. . . none of the stock of the FRBNY is government-owned.”
What is The Federal Reserve?In 2009, in an attempt to avoid transparency, the Federal Reserve Bank of New York Board of Governors argued:
“The FRBNY is not an establishment of the executive branch because it is a corporation whose stock is privately held . . . [It] is overseen by a board of directors the majority of whom are privately appointed. . . none of the stock of the FRBNY is government-owned.”
What is The Federal Reserve?In 2009, in an attempt to avoid transparency, the Federal Reserve Bank of New York Board of Governors argued:
“The FRBNY is not an establishment of the executive branch because it is a corporation whose stock is privately held . . . [It] is overseen by a board of directors the majority of whom are privately appointed. . . none of the stock of the FRBNY is government-owned.”
What is The Federal Reserve?In 2009, in an attempt to avoid transparency, the Federal Reserve Bank of New York Board of Governors argued:
“The FRBNY is not an establishment of the executive branch because it is a corporation whose stock is privately held . . . [It] is overseen by a board of directors the majority of whom are privately appointed. . . none of the stock of the FRBNY is government-owned.”
What is The Federal Reserve?
The Federal Reserve is NOT . . .
FEDERAL
and it is NOT
a RESERVE
“An act to provide for the establishment of Federal reserve banks, to furnish an elastic currency . . .”
The Federal Reserve Act of 1913
“An act to provide for the establishment of Federal reserve banks, to furnish an elastic currency . . .”
The Federal Reserve Act of 1913
Bad money drives good money out of circulation
Gresham’s Law
What is inflation?
Is it a rise in prices?
It is an increase in the money supply . . . which results in a rise in prices
“[Inflation] affects property without trial by Jury.”
James Madison, 1786
5th Amendment:
“No person shall be . . .deprived of life, liberty, or property, without due process of law . . .”
What is inflation?
“By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens … in a manner that not one man in a million can diagnose.”
John Maynard Keynes
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.”
- _______________?
What is inflation?
What is inflation?
What is inflation?
What is inflation?
"During a 2½ year period starting at the end of 2007, the Federal Reserve provided more than $16 trillion in secret bailouts to banks and other companies around the world …"
•BNP Paribas (France): $175 billion•Bank of Scotland (United Kingdom): $181 billion•Lehman Brothers: $183 billion•Credit Suisse (Switzerland): $262 billion•UBS (Switzerland): $287 billion•Deutsche Bank (Germany): $354 billion•JP Morgan Chase: $391 billion•Royal Bank of Scotland (UK): $541 billion•Goldman Sachs: $814 billion•Bear Sterns: $853 billion•Barclays PLC (United Kingdom): $868 billion•Bank of America: $1.34 trillion•Merrill Lynch: $1.95 trillion•Morgan Stanley: $2.04 trillion•Citigroup: $2.5 trillion
Total Over $16 Trillion!
(In addition to the $850 Billion authorized for TARP)
Thomas Jefferson
“I believe that banking institutions are more dangerous to our liberties than standing armies. …
Thomas Jefferson
“… If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [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.”
What Can Be Done?
1) We need to introduce competing currencies: Congress – Art. 1, Sec. 8, Clause 5
State Legislatures – Art. 1, Sec.10, Clause 12) Repeal legal tender laws3) Reduce spending first, then reduce taxation4) Abolish the Federal Reserve – step by step5) State Legislatures need to send resolutions to
Congress advocating these measures6) Tremendous grassroots effort to educate and to
activate