Roberts - The Most Secret Science - Intro to Crow Healing Network

TABLE OF CONTENTSTHE HEGELIAN PRINCIPLE9SPECTATORSHIP VS PARTICIPATION 11DEFEND YOUR MONEY AND PROPERTY 15Operations to harness powers of county and stategovernments to financial survival.LAW OF AGENCY 23INTRODUCTION 25"Constitution secures power to the people;" Hon. JohnR. Rarick, Member of Congress.ONE THE MOST SECRET SCIENCE 29Testimony by Archibald Roberts before Wisconsin StateAffairs Committee, 30 March 1971, reprinted from TheCongressional Record.TWO OUTLAW THE FED 35Arizona Lawmakers move to oust international bankersfrom control of nation's economy. Washington Statechallenges Federal Reserve. Only State can act whenFederal agents violate Constitution. Federal ReserveAct: A Conspiracy Against America.THREE ARKANSAS ACTS ON FED 42Roberts' testimony, House Committee on Aging andLegislative Affairs. U.S. Court of Appeals finds FederalReserve Banks not Federal instrumentalities. Effect ofunconstitutional statutes.FOUR A NATION IN HOCK 51Roberts' testimony, Idaho Senate State AffairsCommittee, reveals Fed has lien on all property. Factsheet, Monetary Control Act, Public Law 96-221.FIVE OREGON FEDERAL RESERVE HEARING 65Jack Metcalf, Washington State Senator: "No problem,other than nuclear war, outweighs this problem."Report on states challenging constitutionality of FederalReserve Act. Indiana H.R. #7. Alabama H.R. #90.Texas Resolution. House Resolution #4358 (Gonzalez)& House Resolution #875 (Paul), U.S. Congress.SIX NCSL BEGINS INVESTIGATION OF FED 77National Conference of State Legislatures question U.S.economic policy. Metcalf addresses NCSL seminar,Washington, DC.VII

SEVEN ON THE CHARACTERISTICS OF GOVERNMENT 84Testimony by T. David Horton, Attorney, beforeKansas Interim Judiciary Committee, on theresponsibility of state legislatures.EIGHT THREAT TO LIBERTY AND THE REMEDY 91John R. Rarick, MC, "United States Monetary Crisis."Horton presents case for interest-free national currency.Congressional action needed.NINE FEDERAL RESERVE PLUNDER 101Dave Wilber, economics writer, speaks for "redeemablecurrency." H.L. Thorndal, President, State Bank ofNorth Dakota, addresses Ohio State legislators on thestate banks option.TEN CONFLICT MANAGEMENT 111Role of the Trilateral Commission. List of members,Trilateral Commission. (Rockefeller agents, Council onForeign Relations / Trilateral Commission, pg. 145-148).ELEVEN PLOT TO SURRENDER AMERICA 122M. Stanton Evans, "America's Arms Race AgainstItself." General Lewis W. Walt, "Nuclear Blackmail andWorld Government." Norman Dodd, "FordFoundation: Merge United States and Russia."TWELVE MATTOID SYNDROME 139America has fallen into the hands of political madmen.Don Bell, "Books That Shake the World." Chart:Trilateral Commission / Council on Foreign Relationscontrol of foreign / domestic policy and conflictmanagement.THIRTEEN THE FEUDAL STATE 149American serfs labor for directors of new federalcorporation. Tom Robison. "The Enlightened Ones."FOURTEEN RUNNYMEDE: PRELUDE AND AFTERMATH 155Bishop James Parker Dees, Anglican Orthodox Church,traces lineage of American freedoms.FIFTEEN TEXT: FEDERAL RESERVE ACT 16023 DECEMBER 1913How Congress illegally conferred control of U.S.economy, domestic and international affairs, on a cartelof private bankers. House and Senate record vote,Federal Reserve Act.INDEX 189Other books, cassettes, publications. 196Biographical brief, Archibald Roberts 197viii

THE HEGELIAN PRINCIPLERevolutionaries in government have created economic chaos, shortages in food andfuel, confiscatory taxation, a crisis in education, the threat of war, and other diversions tocondition Americans for "The New World Order."The technique is as old as politics itself. It is the Hegelian principle of bringing aboutchange in a three-step process: Thesis, Antithesis and Synthesis.The first step (thesis) is to create a problem. The second step (antithesis) is to generateopposition to the problem (fear, panic, hysteria). The third step (synthesis) is to offer thesolution to the problem created in step one - change which would have been impossible toimpose on the people without the proper psychological conditioning achieved in stages oneand two.Applying the Hegelian principle, and irresistable financial influence, concealed mattoidsseek to dismantle social and political structures by which free men govern themselves -ancient landmarks erected at great cost in blood and treasure.Their objective is to emasculate sovereign states, merge nations under universalgovernment, centralize economic powers, and control the world's people and resources.9

"If the American people ever allow privatebanks to control the issue of their currency,first by inflation and then by deflation, thebanks and the corporations that will grow uparound them, will deprive the people of allproperty until their children wake up homelesson the continent their fathers conquered."THOMAS JEFFERSONSPECTATORSHIP VS PARTICIPATIONThe political reality of today is the fact that after fifty years of "fighting communism"the great array of anticommunists have failed to deter the rising tide of revolution.Patriotic organizations still have no real strategy for effective action because of the failureto recognize the obvious; The real enemy of the people lurks in New York andWashington, D.C.Conservative leaders must come to realize that a mattoid "elite" has seized control ofpolicy-making and conflict management in the United States. International financiers andindustrialists, in secret alliance with revolutionary forces, are merging American andSoviet societies under a master plan of infiltration, subversion and rebellion.General reaction of the muzzled majority to increasing exploitation and oppression hasbeen a defense of the status quo. Yet, it must be clear that a political system perpetually onthe defensive is doomed to ultimate defeat. Somewhere, somehow, we must counterattack!The problem might be considered as basically one of inducing movement and action.Relatively few people in America are pro-communist, or even socialists. Still,revolutionaries in government retain an iron grip on American domestic and foreignpolicy, manipulating economic, social and political disciplines to expand their dream ofworld empire at the expense of the Republic.Meanwhile, the vast majority of the people, both captives and targets, remain relativelypassive.This passivity is not accidental. World government conflict managers have long realizedthe significance of the vast gulf between spectators and participants. Their whole strategyis geared to maximize the victim's spectatorship and minimize his participation in thestruggle.11

That principle was shown in South Vietnam. It is estimated that out of every hundredpeople in rural areas, twenty were actively aiding the Communist Viet Cong, forty werepassively anti-communist, and forty were neutral. That active twenty was enough to turnthe country into a major battlefield leading to ultimate defeat of American forces - aidedand abetted, of course, by concealed conflict managers in New York and Washington.Conservative attempts to influence the spectator-participant ratio have been mainlyconfined to vague educational programs, insipid protest, and generalized talk - none ofwhich has been able to inspire much favorable movement. Indeed, many conservativeorganizations obviously regard the national crisis as a popularity contest, not a war forsurvival.In contrast, fear has been the mattoid's chief weapon; economic, political and socialcoercion, for maximizing passivity and spectatorship. Effective though it is, oppression is atwo-edged weapon. Its application generates potential reaction. These suppressedreactions can explode with sudden violence. Channeling anger and frustration intoconstructive action is the task of knowledgeable Americans everywhere. The individualcan do nothing to protect himself and his family until he is armed with knowledge and aplan of action.Defeat of the mattoids now leading America into the twilight zone of national disasterdemands intelligent acceptance of the facts behind the crisis. And, it requires a courageousmarshalling of resources, and the commitment of motivated citizens who will takewhatever action is necessary to reverse the mindless march toward dictatorship.We have clearly lost control of our government. The solution to economic chaos, socialrebellion, and political revolution is planned action at the county level of government toforce the respective state legislatures to protect the lives and property of the people.Political theorizing and personal knowledge of the conspiracy must be translated intopractical plans and implemented at a level of government which the individual caneffectively influence. American citizens, if they are to escape the socialist society plannedfor them, must bring their authority to bear at the point of jurisdictional decision: Countyand State government.No amount of agonizing or protest to a distant congressman will change the design ofthe mattoids who seek to overthrow the Constitution and reduce Americans to the statusof economic serfs on the land which once was theirs. Only the individual can demand thathis County official act to defend and preserve Life, Liberty and Property. He must do thisby a positive act, by challenging "the secret government of monetary power" at its weakestpoint - the County.Although all sovereignty originates from the State, the states delegated a few of theirpowers to their common agents in Washington. However, the vast governmental powersthat touch our lives every day are placed in the hands of County Governments, that areclosest to the people.One historian who has commented on the point is R.J. Rushdoony, whose book, TheNature of the American System, first published in 1965, has an analysis of the County inearly American history. Important as the States are, they are not the basic unit of the12

American system. The basic unit is clearly and without question the COUNTY, saidRushdoony.Significantly, one of the first steps toward independence was taken byMecklenburg County, North Carolina, May 31, 1775, in order to prevent a legalvacuum...........First, the PROPERTY TAX remained in the hands of the county, which earlyestablished its jurisdiction. The people of an area thus controlled their taxassessor and their county supervisors, so that the taxing power was not beyondtheir jurisdiction. When the power to tax leaves the county, tyranny will thenbegin in the United States. Socialism or communism will be only a step away.The people of a county will be helpless as their property is taxed to the point ofexpropriation...Second, CRIMINAL LAW was and is county law in essence. That was animportant safeguard against tyranny and against the political use of criminal law.Law enforcement officers, including judges, were and are officers of the county, inthe main, or of its constituent units. As T. Robert Ingram has pointed out, not toomany years ago executions were also held at the county seat. Police power andcriminal law are thus matters of local jurisdiction in the American system.The third, CIVIL LAW, is also county law to a great degree, enforced by localcourts and by locally elected officials. The American citizen is thus for the mostpart under county government. His basic instruments of civil government arelocal, residing in the county, and the county is his historic line of defense againstthe encroachments of state and federal governments. In early America, townand county elections were properly regarded as more important than state andfederal elections, and property qualifications were strict on the local level. (Endof quote.)Necessary knowledge, and a plan of action enabling the individual to harness powers ofCounty and State governments to financial and political survival, will be found in thefollowing pages. The reader will be transformed from 'spectator' to 'participant' in thestruggle for Life, Liberty and Property.POST SCRIPT:Archibald E. Roberts, LtCol, AUS, ret.Fort Collins, Colorado 1984On 19 December 1942 I was commissioned an Army second lieutenant to serve mycountry and to "defend and preserve the Constitution of the United States against allenemies, both foreign and domestic." I have never relinquished that oath.This book includes material previously circulated in The Bulletin, monthly publication,Committee to Restore the Constitution, Inc.13

LOCAL ORGANIZATION,PERSONAL PARTICIPATION,IS THE SOLUTIONTO ECONOMIC TYRANNYDEFEND YOUR MONEY AND PROPERTYCOUNTY ORDINANCE TO REPEAL THE FEDERALRESERVE ACT OF 23 DECEMBER 1913Here are county action documents to help you inspire direct participation by localleaders in the campaign to repeal the Federal Reserve Act of 23 December 1913.THE COUNTY is the building block of the American political system. The sheriff,county judge and county commissioner are local chieftains in the proper functioning ofcounty government. These offices present the greatest challenge to the misuse of authorityby a central government.It is wasteful to wrestle with the convoluted problems of the world. More real progresswill be made by concentrating on local issues affecting your money, your property andyour family.Only you can demand that your county official, whom you elected to represent you,discharge his obligation to you. He must do this by a positive act, by challenging theunconstitutional Federal Reserve System.By such direct and positive action you and he can escape the 'New World Order'planned for you and your children.Instruments consist of a Petition form and model County Ordinance.Your mission, should you choose to accept it, is to mobilize local leaders and promotecounty government participation in the Federal Reserve project.Your goal is adoption of the model County Ordinance by your County Commission.15

A county ordinance is county law. The model County Ordinance to repeal the Fed listslegal 'findings.' State legislators, ultimate agents of your effort, need not 'prove the case' tojustify compliance with 'decree' included in the County Ordinance.Your county petition operation will focus public demand for protection on countyofficials, leading to adoption of the Ordinance and subsequent corrective action by Statelawmakers.To launch the county petition drive, insert appropriate information in Petition spacesindicated and reproduce (quick-print) one thousand copies of Petition and model CountyOrdinance. Send one of each to persons on your mailing list.Include your letter of instruction on how addressees should circulate Petition/Ordinanceto friends, family and business associates.Mention need for tables to collect Petition signatures at shopping malls and other areasof pedestrian traffic. Use this memorandum as your guide.Urge local leaders to seek participation by Constitution-oriented groups: tax protest,private property, honest money, second amendment, Christian fundamentalist, andregional governance / world government / United Nations opponents.Special interest occupations: eg; real estate, construction, farm & ranch, can beencouraged to translate anger and frustration into a practical solution to the central issue:Money, and those who control it.Cultivate endorsement for repeal of the Federal Reserve Act by local business andindustry, patriotic & civic organizations, and political figures.Make a photo-copy of signed petitions as they are returned to you. Mail Petition /Ordinance, with your instruction letter, to each person listed on returned Petitions.Remember, Petitions are prospective lists of members for your CRC county chapter.Concurrently, meet with your county commission to apprize them of your program.Provide background briefings and documentation to prepare for public hearing andadoption of the Ordinance by the County Commission. Assistance and informationalmaterial is available from Committee to Restore the Constitution, Inc.Advise media on the progress of your drive, and notify radio, television and newspapereditors date of public hearing.Submit original signed Petition and model County Ordinance to your CountyCommission at scheduled public hearing.16

PETITION TO THE __________________ COUNTY COMMISSION,STATE OF __________________WHEREAS: The citizens of_______________________________ County, State of____________ , face immediate economic crisis and undue hardship brought aboutby unconstitutional control of the nation's money system by the Federal Reserve Board,the policy-making arm of the Federal Reserve System, a consortium of private bankers;andWHEREAS: The Federal Reserve Act of 23 December 1913 was imposed upon thecitizens of ________________ County, State of__________________, without theirknowledge or consent and in violation of the prohibitions of the Constitution of theUnited States; andWHEREAS: Elected officials of ________________ County are bound by oath todefend and preserve the Constitution of the United States, and to preserve life andproperty of __________________ County citizens,THEREFORE: We, the undersigned residents of _______ ____ County, State of_____________________do hereby petition the_______________ ___ County Commission,State of ________________ , to adopt the attached ordinance condemning economiccontrol over the citizens of ________________ County, State of _________________ ,by the Federal Reserve Board, the policy-making agency of the Federal Reserve System,and included decree that the ________________ State Legislature shall instructmembers of the_________________State Congressional Delegation to jointly sponsorlegislation to repeal the Federal Reserve Act.SIGNEDADDRESS(add as many lined sheets as desired)MODEL COUNTY ORDINANCE ATTACHEDUpon completion return to _________ County Chapter, COMMITTEE TO RESTORETHE CONSTITUTION, Inc. (address & phone) _______________________________17

THIS MODEL COUNTY ORDINANCE .. .condemns economic control over you and your property by the Federal Reserve Board,and decrees that your state legislature instruct members of Congress from your state tointroduce statutes to repeal the Federal Reserve Act.(1) Append model county ordinance to your county petition form as an exhibit.(2) Submit model county ordinance to your county commission, accompanied by signedpetitions, for implementation.The people, from whom flow all political authority, are responsible for instructing theirrepresentatives to confine the functions of government to limitations defined in thearticles of the Constitution.State officials are required to take whatever action is necessary to enforce provisions ofthe Constitution within the borders of the state.ORDINANCE #_________ _ _ _ _MODELORDINANCE OF THE ____________________COUNTY COMMISSION, State of______________________________________, condemning economic control over the citizens of_________________ County, State of __________________ , by the Federal ReserveBoard, the policy-making agency of the Federal Reserve System, a consortium of privatebankers, and decrees that the _________________________________State legislatureshall protect the money and property of_________________ County citizens, as it isrequired to do under provisions of the State Constitution and Constitution of the UnitedStates, by instructing members of the ______________ _____ State CongressionalDelegation to jointly sponsor legislation to repeal the Federal Reserve Act, as they areauthorized to do under Article 30 of the original Act.THE COMMISSION FINDS that Article 1, section 8, Constitution of the UnitedStates, provides that only the Congress of the United States shall have the power ". . . toborrow Money on the credit of the United States."THE COMMISSION FINDS that Article 1, section 8, Constitution of the UnitedStates, provides that only the Congress of the United States is permitted to ". . . coinMoney, regulate the Value thereof, and of foreign coin."THE COMMISSION FINDS that the Federal Reserve Act (Act of 23 December 1913;38 Stat. 251; 12 United States Code section 221, et seq.) purported to transfer the power toborrow money on the credit of the United States, and the power to coin money andregulate the value thereof to a consortium of private bankers, i.e.; the Federal ReserveSystem, in violation of the prohibitions of Article 1, section 8, Constitution of the UnitedStates.THE COMMISSION FINDS that Article 1, section 1, Constitution of the UnitedStates, provides that "all legislative Powers herein granted shall be vested in a Congress ofthe United States, which shall consist of a Senate and House of Representatives."19

THE COMMISSION FINDS that the Congress of the United States is withoutauthority to delegate any powers which it has received from the people under theconstitutional contract.THE COMMISSION FINDS that the Federal Reserve Act of 23 December 1913 wasimposed upon the citizens of ___ , ____ ._____________________ County, State of______________________ in violation of Article 1, section 1, Constitution of the UnitedStates.THE COMMISSION FINDS that the Federal Reserve System, which is not subject toany official periodic review or oversight by Congress, has unconstitutionally controlled theeconomy of the United States and financial fortunes of _____________ County citizens,State of ____________ , through the alleged powers of the Federal Reserve Actunconstitutionally granted by the Congress of the United States.THE COMMISSION FINDS that the citizens of_______________________County,State of ___________ . face economic crisis and undue hardship brought aboutby the unconstitutional, arbitrary and capricious control and management of the nation'smoney supply by the Federal Reserve Board, the policy-making agency of the FederalReserve System, a consortium of private bankers.THE COMMISSION CONDEMNS economic control over the citizens of _________County by the Federal Reserve Board, and decrees that the___________________ Statelegislature shall instruct members of the __________________ State CongressionalDelegation to jointly sponsor legislation to repeal the Federal Reserve Act of 23 December1913, as they are authorized to do under Article 30 of the original Act.THE COMMISSION URGES the __________________ State legislature to takewhatever additional action may be necessary to protect the money and property of_______________________ County citizens, State of __________________ , as it is requiredto do under provisions of the__________________________State Constitution and theConstitution of the United States.THE COMMISSION DIRECTS that a copy of this ordinance, accompanied bysupporting documents, be forwarded to the State Legislative Delegation, Majority Leadersof Senate and House, Governor, Lieutenant Governor, Secretary of State, AttorneyGeneral, and to the President, State Association of County Commissioners, State of__________________________, requesting enabling legislation. (a)ORDINANCE #__________________, introduced by________________ , seconded by_________________ and unanimously approved, is duly declared passed and adoptedthis _____ day of __________________ , 198___.BY: ___________________________ ChairmanAPPROVED AS TO FORM AND LEGAL SUFFICIENCY:____________________. Counsel(a)Sample Enabling State Memorial (Resolution) attached, "A Concurrent Memorial(Resolution) Urging the President and the Congress of the United States to Repeal theFederal Reserve Act."20

SAMPLE: ENABLING STATE LEGISLATION (HCM #2002 adopted 1 March 1982)State of ArizonaHouse of RepresentativesThirty-fifth LegislatureSecond Regular Session1982Rough Draft Folder #369-11/16/81 DG/dlREFERENCE TITLE:repeal of Federal Reserve Act; memorialH.C.M.___________Introduced by Rep. D. Lee JonesA CONCURRENT MEMORIALURGING THE PRESIDENT AND THE CONGRESS OF THE UNITED STATES TOREPEAL THE FEDERAL RESERVE ACT.To the President and the Congress of the United States of America:Your memorialist respectfully represents:WHEREAS, Article I, section 8, Constitution of the United States provides that onlythe Congress of the United States shall have the power "to borrow Money on the credit ofthe United States;" andWHEREAS, the Federal Reserve Act of December 23, 1913 (Act of December 23,1913; 38 Stat. 251; 12 United States Code section 221 et seq.) transferred the power toborrow money on the credit of the United States to a consortium of private bankers inviolation of the prohibitions of Article I, section 8, Constitituion of the United States; andWHEREAS, Article I, section 8, Constitution of the United States directs that only theCongress of the United States is permitted "to coin Money, regulate the Value thereof,and of foreign coin, and fix the Standard of Weights and Measures;" andWHEREAS, the Federal Reserve Act of 23 December 1913 transferred the power tocoin money, regulate the value thereof, and of foreign coin, to a consortium of privatebankers in violation of the prohibitions of Article I, section 8, Constitution of the UnitedStates; andWHEREAS, Article I, section 1, Constitution of the United States, provides that "alllegislative Powers herein granted shall be vested in a Congress of the United States, whichshall consist of a Senate and House of Representatives;' 1 andWHEREAS, the Congress of the United States is without authority to delegate anypowers which it has received under the Constitution of the United States established bythe People of the United States; andWHEREAS, the Federal Reserve Act of December 23, 1913 was imposed upon thePeople of the State of Arizona in violation of the provisions of Article I, section 1,Constitution of the United States; and21

WHEREAS, members of the Federal Reserve System, a consortium of private bankers,have threatened the very integrity of our national government through their arbitrary andcapricious control and management of the nation's money supply; andWHEREAS, testimony entered into the Congressional Record on April 19, 1971 by oneobserver, Mr. Archibald E. Roberts, indicates that past and present members of theFederal Reserve Board may be guilty of criminal conduct and there is evidence to supporthis view; andWHEREAS, the United States is facing, in the current decade, an economic debacle ofmassive proportions due in large measure to a continued erosion of our national currencyand the resultant high interest rates caused by the policies of the Federal Reserve Board;andWHEREAS, a consortium of private bankers which is not subject to any officialperiodic review or oversight by Congress has unconstitutionally controlled the economy ofthe United States through the Federal Reserve Act since 1913; andWHEREAS, this nation faces an immediate economic crisis. It is extremely urgent thatthe Congress of the United States act before it is too late by repealing the Federal ReserveAct and restoring the economy of this nation to a sound basis through a withdrawal of all"fiat money" now in circulation — the so-called Federal Reserve Notes . . .WHEREFORE, your memorialist, the House of Representatives of the State ofArizona, the Senate concurring, prays:1. That the Congress of the United States immediately enact such legislation as isnecessary to repeal the Federal Reserve Act . . .2. That the President of the United States immediately sign the necessary enablinglegislation once it reaches his desk.3. That the Secretary of State of Arizona transmit copies of this Memorial to thePresident of the United States Senate, the Speaker of the House of Representatives of theUnited States and to each Member of the Arizona Congressional Delegation.22

CORRECTIVE STATE LEGISLATIONIS THE SOLUTIONTO CONSTITUTIONAL CRISISLAW OF AGENCY ...UNAUTHORIZED ACTS BY AN AGENT ARE NOT BINDINGON THE PRINCIPAL"Law of Agency" is central to resolving the constitutional crisis.The original thirteen Nations, recognized as such by the Treaty of Peace whichconcluded the Revolutionary War, created the Federal government.Following the War for Independence, the thirteen nation-states organized themselves asthe United States under a mutual compact, the Constitution of the United States.Every succeeding State entered the Union of States, "... upon an equal footing with theoriginal States in all respects whatsoever," (Chapter XXXVI, 13 United Statutes at Large,1864).The constitutional contract established, in the first three Articles, three branches ofgovernment: Legislative, Executive and Judicial. The People, through their State deputies,delegated to these three agencies certain limited powers, retaining unto themselves allpowers not so delegated.Each sovereign State, as a Principal under the constitutional compact, is supreme overits Federal agencies. The State is empowered to correct acts by its Federal agents which ITdeems violate delegated powers enumerated in the Articles of the Constitution.Each sovereign State has the authority and the responsibility to enforce provisions ofthe Constitution within its borders, and to provide criminal sanctions for violators.The People, from whom flow all political powers, are responsible for instructing theirState senators and representatives to challenge unconstitutional acts by Federal agents, asthey are required to do by oath of office.Each citizen is charged with the mission of defending and preserving freedoms of personand property guaranteed to the People by the Constitution of the United States.23

"The refusal of King George to operate anhonest colonial money system which freed theordinary man from the clutches of themanipulators was probably the prime cause ofthe Revolution."BENJAMIN FRANKLINTHE CONSTITUTION SECURES POWERTO THE PEOPLEHon. John R. Rarick, in the House of Representatives, 19 April 1971Mr. RARICK. Mr. Speaker, "power to the people" is a slogan used not only by radicalsocialists in their plans to communize America but also by President Nixon in his NewAmerican Revolution.In his State of the Union Address on January 22, 1971, the President stated:So let us put the money where the needs are. And let us put the power tospend it where the people are.The further away government is from people, the stronger governmentbecomes and the weaker people become. And a nation with a strong governmentand a weak people is an empty shell.1 reject the idea that government in Washington, D.C. is inevitably more wise,more honest, and more efficient than government at the local or State level. . .The idea that a bureaucratic elite in Washington knows best what is best forpeople everywhere and that you cannot trust local government is really acontention that you cannot trust people to govern themselves. This notion iscompletely foreign to the American experience. Local government is thegovernment closest to the people and it is most responsive to the individualperson; it is people's government in a far more intimate way than thegovernment in Washington can ever be.People came to America because they wanted to determine their own futurerather than to live in a country where others determined their future for them.25

What this change means is that once again in America we are placing our trustin people.1 have faith in people. I trust the judgment of people. Let us give the people ofAmerica a chance, a bigger voice in deciding for themselves those questions thatso greatly affect their lives.Whereas the rhetoric of the President is desirable and encouraging, the wordsunfortunately are made suspect by actions. By consistently asking for more and more taxfunds for more and more Federal programs which add to the Federal payroll an increasingnumber of bureaucrats who increasingly control more and more facets of the daily lives ofcitizens; by grouping the States into regions with unelected Federal overseers, therebyremoving power farther from the people; and by promoting such programs as the AtlanticUnion which if effected would remove power still more distant from the people, the ChiefExecutive is, in effect, fostering power over the people rather than "power to the people.""Power to the people" is a traditionally American concept which is what theConstitution of the United States is all about. When the necessary number of the OriginalThirteen Colonies ratified the U.S. Constitution, they established a government in whichpolitical power was decentralized. By the constitutional contract they surrendered to theFederal Government only specified powers. Powers not delegated to the FederalGovernment were reserved to the States and to the people. And rather than to permit sucha logical conclusion from being misunderstood, the 10th amendment so specified theintent.Under this concept of government, power was concentrated at the bottom — at thelowest denominator of government — the level closest to the people and most responsiveto the desires and wishes of the individual person.Locally controlled governments and systems of education, a basically religious peoplewho in large measure recognized the Holy Bible as a guide to conduct, and a freeenterprise economic system with a minimum of government interference produced themost prosperous and powerful Nation on earth. America abounded in Peace, opportunity,and true progress so long as America adhered to the Holy Bible and the Constitution.The second decade of the present century saw the beginning of a trend in the directionof removing power from the hands of people at the State and local level and concentratingmore and more power over the lives of people in the hands of unelected bureaucrats at theregional and Federal levels, in fact, even the surrendering of national powers andprerogatives to international bodies.This trend was given impetus in 1913, with the enactment of the Federal Reserve Act,which took away people's control over their money; the 16th amendment to theConstitution calling for the graduated Federal income tax — a plank of the Marxistplatform — and in 1919, with the establishment of the Council on Foreign Relationswhich has been instrumental in promoting world government.The ratification of the U.N. Charter, a plan for world government, by the U.S. Senate in1945, transferred "people power" still farther away from the people at the local level. Thepresent emphasis being given to regional government and to an Atlantic Union, both of26

which have the President's approval, further erodes the Constitution and are obstacles tocircumvent "people power."Thanks to the seeds of knowledge planted during the past 2 or 3 decades by variousconstitutional groups and individuals, more and more Americans are becoming informedas to who the anti-Americans are and what they are doing to emasculate our Constitutionand to destroy our country by trapping us into regional and world government. Action atthe local and State levels by informed groups and individuals to salvage and restore theConstitution and, as a consequence, "people power" is a most encouraging sign.One such organization is the Committee to Restore the Constitution which recentlypresented its case to a Special Joint Committee, Wisconsin State Legislature.1 insert to follow my remarks the testimony entitled The Most Secret Science before aspecial joint committee of the Wisconsin State Legislature by Lt. Col. Archibald E.Roberts, A.U.S. — retired, Director of the Committee to Restore the Constitution, Inc.27

ONE"/ believe that banking institutions are moredangerous to our liberties than standingarmies. Already they have raised up a moneyaristocracy that has set the government atdefiance. The issuing power should be takenfrom the banks and restored to thegovernment to whom it properly belongs."THOMAS JEFFERSONTHE MOST SECRET SCIENCEIn consonance with the provisions of 1971Assembly Joint Resolution No. 34, WisconsinState Legislature, "Establishing a specialcommittee to study the constitutionality of thefederal government's relations with the UnitedNations," I respectfully invite the members of thisSpecial Legislative Committee to hear mytestimony on proofs of a conspiracy to overthrowthe Constitution of the United States and erect asocialist state governance over the Americanpeople.Intelligence which I have previously submittedto every member of the Wisconsin StateLegislature ("United Nations-Creature of theInvisible Government of Monetary Power,"Congressional Record, December 14, 1971)provided evidence to indict an ambitious andmorally degenerate group of financiers andindustrialists who seek to erect an international,non-elected authority upon the ruins of theAmerican civilization. This documented studyexplained how, via interlocking subversion, theCouncil on Foreign Relations (Harold PrattHouse, 58 East 68th Street, New York City)captured principal agencies of the FederalGovernment and created the United NationsOrganization as their private instrumentality forglobal conquest.In documents subsequently submitted toWisconsin Legislators, I illustrated the charge thatso-called "Revenue Sharing" and "RegionalGovernment" is the final technique for strippingaway State sovereignty and eliminating electiveoffice at State and national levels.During the next few minutes I will show howthis same group of international bankers andindustrialists, by guile and deceit, gained controlover the money and credit resources of the UnitedStates and thus captured the power centers of theAmerican civilization.First, however, 1 offer my credentials.My ancestors, like yours, were mostly farmers,preachers, soldiers and laborers.They arrived on the North American continentlong before there was a United States of Americaand challenged the wilderness with a confidenceborne of an abiding faith in God. My peoplefought in the Revolutionary War and have servedthis country in every succeeding conflict to thepresent day.Our forebears, yours and mine, raised up mightycities and established a civilization of freemen—the envy of all others. The blood and sweatof our clans fertilized the soil of America. Their29

achievements constitute our heritage; their culturea legacy for our children and our children'schildren.Or so it seemed a few short years ago.It is now evident that a subtle and perilouschange has occurred in our America. Within thepast two or three generations the civilization ofour forefathers has come under sophisticatedassault. The structures of freedom erected at suchgreat cost in blood, sweat and treasure, arecrumbling. Our God is blasphemed, our lineagereviled, and our Constitution dismantled.Our destiny has turned to dust,The descendants of the pioneers, the warriors,and the engineers of this unique order are noweconomic serfs in an industrialized society ruled bya self anointed elite. We are manipulated bymassive propaganda, betrayed in internationalmilitary adventures and exploited by a rapacious,insatiable bureaucracy.The founders of this nation, in the Declarationof Independence, established a course of action towhich every responsible citizen must adhere whengovernment becomes master instead of servant."Governments are instituted among Men,deriving their just powers from the consent of thegoverned. . . whenever any form of Governmentbecomes destructive of (Life, Liberty, and thepursuit of Happiness) it is the right of the Peopleto alter or abolish it. . ."If we are to survive as a race and as a nation, thePeople must regain control over the centers ofpower in America.Let us begin by reviewing the manner in whichthey were lost.The most secret knowledge, a science whichoutdates history, is the science of control overpeople, governments and civilizations. Thefoundation of this ultimate discipline is the controlof wealth.Through the control of wealth comes thecontrol of public information and the necessities oflife.Through the control of news media comesthought control.Through the control of basic necessities comesdirect physical control of people.The rule is to finance the education of membersof the money aristocracy in the professions,business, political science, management, research,public speaking, writing and education. By placingtrusted members, well trained and financed, inpositions of influence in their communities, and inpositions of leadership in nearly all organizations,including the religious order and in opposingassociations, it is possible to direct local, regionaland national policy toward long-range objectives.The fate reserved for less fortunate citizens,those not born of the money aristocracy, wassuccinctly stated by Mr. John D. Rockefeller, Sr.In a policy statement published by his GeneralEducation Board, forerunner to today's ill-famedRockefeller Foundation, John Rockefellerheralded the plan to mold an American peasantrythrough control of educational process."In our dreams," said Rockefeller, "we havelimitless resources and the people yield themselveswith perfect docility to our molding hands. Thepresent educational conventions fade from ourminds," Rockefeller predicted, "and, unhamperedby tradition, we work our own good will upon agrateful and responsive rural folk. . ." (OccasionalLetter No 1, General Education Board, 1904).A significant portion of the American public isyet to become aware of "The InvisibleGovernment of Monetary Power" although thisknowledge is common in Europe. Americans stillbelieve that they are working toward a better wayof life. Surreptitiously, however, social customsand forms of administration in the United Statesare being carefully and gradually modified. Thechange from one type of culture to another is thusaccomplished without arousing serious publicchallenge.'The stark truth is that America is now passingfrom a constitutional republic into a totalitarian,world wide government. World dominion is theages-old dream of the mattoids who have masteredthe science of control over people.Their success in the United States is directlyrelated to two central issues:One—transfer of money control from thepeople into the hands of an international bankingcombine, andTwo—creation of a complex and confusingjudicial system designed to frustrate justice.30

The remainder of this presentation will beconcerned with the first principle—money, andthose who control it.In 1913 the money aristocracy effected a majoradvance toward their long-range goal of worlddominion. They duped the United States Congressinto adopting the Federal Reserve Act. This coupresulted in the transfer of the power to coin andregulate U.S. money from the Congress to theirprivate banking combine, the Federal ReserveSystem.Since passage of the Federal Reserve Act, theAmerican destiny and the personal life of everycitizen has been controlled by a financial elitewhose sick-brained policies have spawneddepression, war and revolutionThe existence of an "Invisible Government ofMonetary Power" was dramatically confirmed in1933 by the late Louis T. McFadden, Chairman,Banking and Currency Committee, United StatesCongress, who said:Every effort has been made by the Fed toconceal its powers but the truth is—the Fedhas usurped the government. It controlseverything here (in Congress) and it controlsall our foreign relations. It makes and breaksgovernments at will.Representative John R. Rarick, denouncingPresident Nixon's plan for deficit spending("Deficit Financing," Congressional Record,February 1, 1971) also revealed the dominantposition held by the Federal Reserve System overthe American economy."He," (President Nixon) said Mr. Rarick, "hasasked the independent Federal Reserve System tocome up with enough new money to reach aprojected increase in the GNP by $88 billion inorder to achieve his 'objective of prosperitywithout inflation.' ""The Federal Reserve," Congressman Rarickpointed out, "is not an agency of Government. Itis a private banking monopoly.""As I have said many times before," Rarickdeclared, "the policies of the monarch are alwaysthose of his creditors."Gentlemen, the safety of the State and thepeace and security of Wisconsin citizens nowurgently require an investigation of the vastpowers claimed by the Federal Reserve System.The first consideration should be a publicexamination of the authority which the FederalReserve System says established its legal status asa Government agency. Such authority is quoted ina statement submitted to Congressman WrightPatman, House Banking and CurrencyCommittee, by the Board of Governors, FederalReserve System and Federal Reserve Banks, datedApril 14, 1952."The 12 Federal Reserve Banks," said theFederal Reserve Board, "are corporations set upby Federal law to operate for public purposesunder Government supervision."The Board further advised Mr. Patman that,"The Board of Governors was created by Congressand is a part of the Government of the UnitedStates. Its members," they said assuringly, "areappointed by the President, with the advice andconsent of the Senate, and it (the Fed) has beenheld by the Attorney General to be a Governmentestablishment (30 Op. Atty. Gen., 308, 1914)."Retorting to these impressive claims to"legality" and "public service" CongressmanPatman stated:"There is no free market that can copewith a national debt of $272 billion (1952),with $85 billion of it to be refunded withinone year. Free market," he said, "meansprivate manipulation of (private) credit."Private manipulation of PUBLIC credit is,of course, the purpose and objective of theFederal Reserve System. This internationalbanking cartel, as will be shown, managesthe credit of the United States for the profitand advantage of its foreign and domesticmembers. In so doing the Federal Reserveexploits the entire producing strata of theAmerican society for the gain of a select,non-producing few."The Federal Reserve Board, to mymind," continued Mr. Patman, "is guilty ofthe grossest kind of misconduct in failing tosupport the Government of the UnitedStates at a time of its greatest economic perilin Government securities."Congressman Patman then revealed thecontradiction in the spurious Federal Reserveclaim of "Government agency" status andexplained how the Fed generates illegitimateprofits for its members.31

"The Open Market Committee of theFederal Reserve System," he said, "iscomposed of the 7 members of the Board ofGovernors and 5 members who arepresidents of the Federal Reserve banks andwho are selected by private commercialbanking interests. The Open MarketCommittee has the power to obtain, anddoes obtain, the printed money of the UnitedStates — Federal Reserve Notes — (free)from the Bureau of Engraving and Printing,and exchanges these printed notes, which ofcourse are not interest bearing, for UnitedStates Government obligations that areinterest bearing. After making theexchange," Patman explained, "the interestbearing obligations are retained by the 12Federal Reserve banks and the interestcollected annually on these Governmentobligations goes into the funds of the 12Federal Reserve banks."Exploding the myth that the Federal ReserveSystem is an instrumentality of the FederalGovernment Mr. Patman declared:"These funds (interest from Governmentobligations) are expended by the (FederalReserve) system without an adequateaccounting to the Congress. In fact there hasnever been an independent audit of eitherthe 12 banks or the Federal Reserve Boardthat has been filed with the Congress wherea Member (of Congress) would have anopportunity to inspect it. The GeneralAccounting Office," he stated, "does nothave jurisdiction over the Federal Reserve.For 40 years (1952) the system, while freelyusing the money (credit) of the Government,has not made a proper accounting."Governor W. P. G. Harding of the FederalReserve Board, in testimony before Congress in1921, admitted that the Fed is a private bankingmonopoly."The Federal Reserve Bank is an institutionowned by the stockholding member banks," hesaid. "The Government has not a dollar's worth ofstock in it."The Government does, however, give theFederal Reserve System free use of its billions ofdollars of credit. This gives the Federal Reservethe characteristic of a central bank; the power toissue currency on the Government's credit.Americans do not have Federal Governmentnotes or gold certificates as currency. We haveFederal Reserve Bank notes, fiat money issued byprivate banks. Every dollar the Federal ReserveSystem prints is a dollar in their pocket.The compatible meshing of the Federal ReserveSystem with a network of international bankingwas explained by Mr. W. Randolph Burgess of theNew York Federal Reserve Bank in an addressbefore the Academy of Political Science in 1930."In its major principles of operation the FederalReserve System is no different," he told Congress,"from other banks of issue, such as the Bank ofEngland, the Bank of France, or the Reichsbank."It is obvious that when control of money istransferred from the People to private bankingcenters, as is the case in Europe and America, thesovereignty of the People is surrendered, too.Control of wealth confers upon those who controlit the final decision in the domestic andinternational affairs of nations. When thefinancial aristocracy usurp the "coin of the realm,"the People are disfranchised and real politicalauthority passes into the hands of an "InvisibleGovernment of Monetary Power."Our founding fathers knew this principle verywell."I believe that banking institutions are moredangerous to our liberties than standing armies,"said Thomas Jefferson. "Already they have raisedup a money aristocracy that has set thegovernment at defiance. The issuing power (ofmoney)," he said, "should be taken from the banksand restored to the people to whom it properlybelongs."Though but dimly perceived today theDeclaration of Independence was actually aproclamation that the colonists would not serve amoney aristocracy. The American Revolution wasa struggle to wrest control of wealth from theBank of England and to restore the centers ofpower to the People where it "properly belongs."The Constitution is specific about the authorityof the People, through their elected officials, tocontrol the money, and thus, the affairs of theirGovernment."The Congress shall have the power. . . To coinmoney (and) regulate the value thereof. . ."(Article 1, section 8, United States Constitution).32

Nowhere does the Constitution authorize orpermit the transfer of this vast power to a moneyaristocracy.Exposure of the hidden forces which havecheated the people of Wisconsin of their birthrightmust be of gravest concern to members of thisState Legislature, each of whom has sworn to"defend and preserve this Constitution." I proposethat we begin the task of identifying the menbehind the Federal Reserve conspiracy.A clue to the origin of the Federal Reserve Actwas given by Colonel Ely Garrison, friend andfinancial adviser to President Theodore Rooseveltand President Woodrow Wilson. In hisautobiographical book, Roosevelt, Wilson and theFederal Reserve Act, Garrison wrote:"Mr. Paul Warburg is the man who got theFederal Reserve Act together after the AldrichPlan aroused such nation-wide resentment andopposition. The mastermind of both plans,"declared Garrison, "was Alfred Rothschild ofLondon."In a preface written for a group of Warburg'sessays calling for a central bank, Professor E. R.A. Seligman, of the international banking family,and head of the Department of Economics,Columbia University, said:"The Federal Reserve Act is the work of Mr.Warburg more than any other man in thecountry."Paul Moritz Warburg, whom President Wilsonsubsequently appointed first Chairman of theFederal Reserve Board of Governors, was animmigrant from Germany. His primary allegiancewas to his family banking house of M. M.Warburg Company of Hamburg and Amsterdam.During World War I the M. M. WarburgCompany financed Germany's war against theAllied forces. Paul's brother, Max, headed theGerman Secret Service.During the war years, Paul Warburg's firm ofKuhn, Loeb Company had five representatives inthe United States Treasury Department in chargeof Liberty Loans, thus financing America's wareffort against the Kaiser.It is unlikely that considerations ofhumanitarianism or patriotism inspired suchinterlocking, international financing of the agonyof World War I.Mr. Eustace Mullins in his book, The FederalReserve Conspiracy, noted that, "WoodrowWilson and (Senator) Carter Glass are given fullcredit for the (Federal Reserve) act bycontemporary historians, but of all the politiciansconcerned, Wilson had the least to do with thefight over the Act in Congress."Mr. George Creel, veteran Washingtoncorrespondent, wrote in Harper's Weekly of June25, 1915:As far as the Democratic Party wasconcerned, Woodrow Wilson was withoutinfluence, save for the patronage hepossessed. It was (William Jennings) Bryanwho whipped Congress into line on. . . thecurrency bill. Mr. Bryan later wrote, That isthe one thing in my public career that Iregret — my work to secure the enactmentof the Federal Reserve Law.'Mullins summed up the effect of this fantasticlaw in the following words:The money and credit resources of theUnited States were now in the completecontrol of the banker's alliance between J. P.Morgan's First National Bank group, andKuhn, Loeb's National City Bank, whoseprincipal loyalties were to the internationalbanking interests then quartered in London,and which moved to New York during theFirst World War.Congressman Charles A. Lindbergh ofMinnesota, father of the famous flyer, made aprophetic statement on the swindle which hadbeen foisted on the American people. Speaking onthe floor of the House on December 23, 1913, theday the Federal Reserve Act became law, Mr.Lindbergh said:This Act establishes the most gigantictrust on earth. When the President (Wilson)signs this bill the invisible government of theMonetary Power will be legalized. . . theworst legislative crime of the ages isperpetrated by this banking and currencybill.The crimes alleged by Congressman Lindberghwere subsequently defined by the HonorableLouis T. McFadden.In a statement of particulars, here offered inabridged form, Chairman McFadden, on May 23,33

1933, brought impeachment charges againstmembers of the Federal Reserve Board and theheads of the 12 member banks (CongressionalRecord, bound volume, pp. 40554058).Whereas I charge them jointly andseverally with having brought about arepudiation of the national currency of theUnited States in order that the gold value ofsaid currency might be given to privateinterests. . . .I charge them. . . with havingarbitrarily and unlawfully taken over$80,000,000,000.00 (eighty billion dollars)from the United States Government in theyear 1928...1 charge them. . . with having arbitrarilyand unlawfully raised and lowered the rateson money . . . increased and diminished thevolume of currency in circulation for thebenefit of private interests. . . .I charge them. . . with having broughtabout the decline in prices on the New YorkStock Exchange. . . .I charge them. . . with having conspiredto concentrate United States Governmentsecurities... and thus... having conspired totransfer to foreigners and internationalmoney lenders title to and control of thefinancial resources of the United States. . . .I charge them. . . with having publishedfalse and misleading propaganda intended todeceive the American people and to causethe United States to lose its independence....I charge them. . ., CongressmanMcFadden concluded, with the crime ofhaving treasonably conspired and actedagainst the peace and security of the UnitedStates, and with having treasonablyconspired to destroy the constitutionalgovernment of the United States.Congressman McFadden's shocking indictmentof the members of the Federal Reserve System,and those who maneuvered its adoption by theCongress, was moved to the Committee on theJudiciary. It still awaits reporting to the Housefloor and action to impeach both former andpresent members of the Board of Governors andFederal Reserve Banks for criminal conspiracyagainst the People of the United States.The final decision as to whether or not an"Invisible Government of Monetary Power" willcontinue to control the American destiny and thelives and fortunes of her People must ultimately bemade by the citizens of this nation.To begin the task of exposing and neutralizingthe men and the system which seeks to overthrowconstitutional government and impose a worldgovernance over our domestic and foreign affairs,I am empowered to present to the lawmakers ofthe State of Wisconsin the following resolutionadopted by the Wisconsin Legislative andResearch Committee, and subscribed to byconstituents who support the Wisconsin campaignto restore the Constitution:A resolution declaring that the people of thisState should debate the question of whether or notany agency or instrumentality of governmentwhich derives its powers from the consent of thegoverned can voluntarily, by treaty or otherwise,alienate the political sovereignty of a free people.The resolution calls for an investigation by theWisconsin State Legislature of the actions ofFederal agents who have purported to negotiatewith foreign governments and with privateinterests to transfer vast powers of government,and to surrender rights and liberties assured to thePeople under the Constitution of the UnitedStates, to foreigners and to international moneylenders in violation of the prohibitions of theConstitution.The resolution further requests that theWisconsin State Legislature promulgate and enactappropriate statutes which will provide for theenforcement of the Constitution of the UnitedStates within the boundaries of the State ofWisconsin, to include criminal sanctions forviolators, with regard to the United NationsCharter, the Federal Reserve Act, and other ultravires acts by agents of the Federal Governmentwho have, by these ultra vires acts, attempted toamend the Constitution of the United States in amanner not sanctioned by Article V.We respectfully demand, if it be God's will, thatthe elected representatives of the People ofWisconsin act at once to restore America's legacyof Freedom to the descendants of the pioneers, thewarriors, and the engineers who gave their blood,sweat and treasure to establish and defend it.Thank you for your courtesy and attention.34

TWO"If Congress has the right to issue papermoney, it was given them to be used bythemselves, and not to be delegated toindividuals or corporations."ANDREW JACKSONOUTLAW THE FEDARIZONA LEGISLATORS PETITION PRESIDENT AND CONGRESSUnited States facing economic debacle ofmassive proportions due to arbitrary andcapricious control of nation's money by privatebanking interests, say lawmakers.Charging that the Federal Reserve Act of 1913was imposed on the people of Arizona in violationof Article I, section 1, Constitution of the UnitedStates, the Arizona State Senate, on 1 March1982, voted 18 to 11 for adoption of HouseConcurrent Memorial #2002, urging the Presidentand Congress to restore control of the nation'seconomy to the People.House of Representative members had, threeweeks earlier, passed the historic petition by a'booming' 51-0 vote.Representative D. Lee Jones, principal sponsorand chief lobbyist for HCM #2002, noted thatArticle I, section 8, Constitution of the UnitedStates, provides that only the Congress isauthorized to, ". . .borrow Money on the credit ofthe United States," and, ". . .to coin Money andregulate the Value thereof."Federal legislative agencies are prohibited fromtransferring these vital powers to private bankinginterests, he said.Adorned with the names of sixty-eight cosponsors(49 Representatives and 19 Senators)House Concurrent Memorial #2002 declares thatthe Congress of the United States is, ". . .withoutauthority to delegate any powers which it hasreceived under the Constitution of the UnitedStates established by the People of the UnitedStates."Being unconstitutional, the Federal ReserveAct of 1913 must be put down.Arizona lawmakers further direct that theSecretary of State transmit copies of the memorialto the President of the United States Senate, theSpeaker of the House of Representatives of theUnited States, and to each Member of the ArizonaCongressional Delegation.Lawmakers in other states, reports Rep. Jones,". . .have contacted me with indications of theirinterest in the move to oust the InternationalBankers . . . from our national pocketbook."Letter of transmittal from Mr. Jones and fulltext of Arizona HCM #2002, "Urging thePresident and Congress of the United States toRepeal the Federal Reserve Act," begin on thefollowing page.35

WHEREAS, Article 1, section 8, Constitutionof the United States, directs that only theCongress of the United States is permitted "to coinMoney and regulate the Value thereof;" andWHEREAS, the Federal Reserve Act of 1913transferred the power to borrow money on thecredit of the United States to a consortium ofprivate bankers in violation of the prohibitions ofArticle I, section 8, Constitution of the UnitedStates; andWHEREAS, the Congress of the United Statesis without authority to delegate any powers whichit has received under the Constitution of theUnited States established by the People of theUnited States; andWHEREAS, Article 1, section 1, Constitutionof the United States, provides that "all legislativePowers herein granted shall be vested in aCongress of the United States, which shall consistof a Senate and House of Representatives;" andWHEREAS, the Federal Reserve Act of 1913was imposed upon the People of the State ofArizona in violation of the provisions of Article I,section 1, Constitution of the United States; andWHEREAS, the Federal Reserve BankingSystem, has threatened the integrity of ourgovernment through the arbitrary and capriciouscontrol and management of the nation's moneysupply; andWHEREAS, the United States is facing, in thecurrent decade, an economic debacle of massiveproportions due in large measure to a continuederosion of our national currency and the resultanthigh interest rates caused by the policies of theFederal Reserve Board; andWHEREFORE, your memorialist, the Houseof Representatives of the State of Arizona, theSenate concurring, prays:1. That the Congress of the United Statesimmediately enact such legislation as is necessaryto repeal the Federal Reserve Act.2. That the Secretary of State of Arizonatransmit copies of this Memorial to the Presidentof the United States Senate, the Speaker of theHouse of Representatives of the United States andto each Member of the Arizona CongressionalDelegation.WASHINGTON STATE LEGISLATORSMOVE TO OUST INTERNATIONAL BANKERS FROM CONTROLOF NATIONAL ECONOMYPurported statutory powers of the FederalReserve System to create and loan money to thegovernment of the United States, and to setinterest rates, are major factors in the presentinflation and the interest rate crisis, say Statelawmakers.The Olympia Herald, 16 February 1982 issue,revealed that Senator Jack Metcalf, WashingtonState Legislator, has introduced Engrossed SenateConcurrent Resolution No. 127, ". . .challengingthe constitutionality of the delegation of thepower to create money to the Federal ReserveSystem.""The Federal Reserve System is nothing morethan a group of private banks which chargeinterest on money that never existed," SenatorMetcalf declared.The Metcalf resolution, which has cleared theSenate, asks the U.S. Supreme Court to look at theFederal Reserve Act of 1913 and see if it isconstitutional.Senate report, "Information Prepared forWashington State Senate in Consideration of SCR#127," and full text of Senator Metcalfsresolution, follow.INFORMATION PREPARED FORWASHINGTON STATE SENATEIN CONSIDERING SCR 127Sen. Senator Metcalf, are you contendingSellar: that inflation and interest rates aredirectly related?Sen. Yes, they are. If you are willing to loanMetcalf: money at 5%, but anticipate a 10%inflation rate, you will ask 15% interestinstead of 5%. What may be worse,you will fear further inflation so tend toask a little more just in case. When

everyone anticipates inflation, it is selffulfilling.Sen. Reading your Resolution, are you reallyMcCaslin: telling us that the Federal ReserveBanking System is a private bankingsystem?Sen. Like most Americans, I believed theMetcalf: Federal Reserve was a part of theFederal government. It is not! It is afederally chartered private bankingcorporation which has by law - not bythe Constitution, but by law - beengiven the power to control and issue the"money" used in the U.S.Sen. How does the Federal Reserve createGuess: money?Sen. This will have to be an overMetcalf: simplification; the actual operation isvery complicated. However, this is anaccurate summary of what happens.The Federal government is going intodebt about a billion dollars a week.Where does that money come from?The government prints a billion dollarsworth of interest bearing U.S.Government bonds, takes them to theFederal Reserve, the Federal Reserveaccepts them and places $1 billion in achecking account. The governmentthen writes checks to a total of $1billion.The crucial question is:"Where wasthat $1 billion just before they touchedthe computer and put it in the checkingaccount?" The answer: "It didn't exist."We, the people, allow a private bankingsystem to create money at will - out ofabsolutely nothing - to call it a loan toour government and then charge usinterest on it forever.Sen. Are you saying the Federal ReserveQuigg: Act gives to the national bankingsystem as a whole the power to createmoney, in addition to what you havesaid about the Federal Reservespecifically?Sen. Yes, the Fractional Reserve SystemMetcalf: implemented under the FederalReserve Act of 1913 allows the bankingsystem, as a system, to create money -toexpand the money supply. Theauthority to expand or contract themoney supply by changing reserverequirements, given to a privatebanking system, puts our whole moneysystem in fearful jeopardy.I would urge you to remember thequote from Thomas Jefferson that Iplaced on your desks in the last session.I believe that banking institutionsare more dangerous to our libertiesthan standing armies. Already theyhave raised up a money aristocracythat has set the government atdefiance. The issuing power shouldbe taken from the banks andrestored to the government, towhom it properly belongs.Jefferson emphasized repeatedly thatno private bank - whether chartered bythe federal or a state government -should ever be permitted to issuecurrency or control credit; for - onceentrusted with such power - theybecome superior to the nation itself.Sen. Do you contend that we, the people,Vognild: are paying interest to a private bankingsystem for use of our own governmentmoney?Sen. Yes, and you bring up the most crucialMetcalf: point. I mentioned the creation of"checkbook money" by the FederalReserve. As these checks from the $1billion of newly created money go outall over America, they become ourmoney in circulation. Why are wepaying interest to a private bankingsystem for use of our own money? Bywhat logic does any private groupcollect a tax from the people for the useof our own money? And - remember -the Federal Reserve System, whichreceives the interest, is allowed to setthe rate of interest they receive!Sen. The Federal Reserve Act delegates toLysen: the Federal Reserve the power to createmoney. Are you contending thatCongress does not have theconstitutional authorization to delegatethat power?38

Sen. Now, we are down to the crux of theMetcalf: matter. We are all aware that powergranted to a body may or may not bedelegated to another body, agency orinstitution. Our most basic document,the U.S. Constitution, states inArticle 1, section 8:The Congress shall have the powerto coin money and regulate thevalue thereof.Nowhere is there the slightest hint ofauthorization to delegate that powereven to another governmentalinstitution - much less to a privatebanking system. That is absolutelyoutside the most broad interpretationpossible.The Constitution does not grant theauthority to delegate the power tocreate money, and this is the heart ofthe resolution introduced in the Senate.This resolution, SCR 127, declares itthe intent of the State of Washington toSTATE OF WASHINGTON47th LEGISLATURESECOND EXTRAORDINARYSESSIONENGROSSED SENATE CONCURRENTRESOLUTION NO. 127Offered by:Senators Metcalf, Vognild, Rasmussen, Moore,McCaslin, Pullen, Guess, Hansen, Bauer, Lysen,Craswell and FullerWHEREAS, A sound money system isabsolutely vital to a free people; andWHEREAS, Inflation and exorbitant interestrates have historically been not only disasterous tothe people but proof of an unsound money systemand thus a real threat to established governments;andWHEREAS, The present rampant inflation andexorbitant interest rates in the American economyare a clear and present danger to the people and tothe governments of the State of Washington andthe United States of America; andWHEREAS, The purported statutory powersof the Federal Reserve System to create and loanmoney to the government of the United States,and to set interest rates are major factors in thecause an action to be filed in the U.S.Supreme Court challenging theconstitutionality of the delegation ofpower embodied in the Federal ReserveAct of 1913. This action is a matter ofmonumental importance to the peopleof this state and of this nation,especially at this time of high interestrates and budget deficits at all levels -federal, state and in the businesses andhomes all across this land.Sen. Has there never been an independentFleming: audit of the Federal Reserve?Sen. It does seem incredible, but the FederalMetcalf: Reserve has never been subject to anindependent audit. On severaloccasions, members of Congress and ofthe U.S. Senate have requested such anaudit, but a way has always been foundto avoid it.Our action here must result in thataudit.present inflation and the interest rate crisis; andWHEREAS, Article I, section 8, clause 5 of theUnited States Constitution grants to Congress theexclusive power "To coin money and regulate thevalue thereof;" andWHEREAS, The Federal Reserve Act of 1913and other acts of Congress purport to delegate to afederally chartered private banking system theauthority to create money and to set interest rates;andWHEREAS, The United States Constitutionnowhere authorizes Congress to delegate suchpower, andWHEREAS, There has never been anindependent audit of the Federal Reserve System;NOW, THEREFORE, BE IT RESOLVED, Bythe Senate of the State of Washington, the Houseconcurring, that it is hereby the declared intent ofthe State of Washington to cause to be filed in theoriginal jurisdiction of the Supreme Court of theUnited States:(1) An action challenging the Constitutionalityof the delegation of the power to create money tothe Federal Reserve System; and(2) An action requiring an independent audit ofthe Federal Reserve System.39

ONLY SOVEREIGN STATE CAN ACT*WHEN FEDERAL AGENTS VIOLATE UNITED STATES CONSTITUTIONNow, we find Mr. Lincoln saying in his firstInaugural Address:I do not forget the position assumed bysome, the Constitutional questions are to bedecided by the Supreme Court. Nor do 1deny that such decisions must be binding inany case upon the parties of a suit. As to theobject of that suit. While they are alsoentitled to very high respect andconsideration in all parallel cases by all otherdepartments of the government. And whileit is obviously possible that such decisionmay be erroneous in any given case, still theevil effects flowing from it being limited tothat particular case with a chance that itmay be overruled and never become aprecedent in other cases, can better be bornethan the evils of a different practice. At thesame time, continues Lincoln, the candidcitizen must confess that if the policy of thegovernment upon vital questions effectingthe whole people is to be irrevocably fixedby decisions of the Supreme Court theinstant they are made in ordinary litigationbetween parties and personal actions, thenthe people would have ceased to be theirown rulers. Having to that extent practicallyresigned their government into the hands ofthat emminent tribunal. Nor is there in thisview, concludes Lincoln, any assault uponthe court or the judges. It is a duty fromwhich they may not shrink to decide casesproperly brought before them and it is nofault of theirs if others seek to turn theirdecision to political purposes.Now, political purposes, of course, have to dowith policy. And if we are to allow members of theCourt who have only judicial power, not legislativepower, to assume a role of telling us what to do inthe legislative area, then we will be doing preciselywhat Lincoln was warning us against, namely,resigning our government into the hands of themembers of the Court.*Extract testimony by Attorney T. David Horton,Counsel, Committee to Restore the Constitutionbefore Kansas State Senate Committee on theJudiciary, hearings on regional governance,Topeka, 23 August 1979.They can't act as a court if they go beyond theauthority specifically granted, but the members ofthe Court can do anything they see fit, and theycan get the Clerk to put the seal of the Court on itand to the casual observer it might appear to bewhat the Court has done. However, if they lackauthority, just as was found in the case ofMarbury v. Madison with regard to a purportedstatute, what the Court attempts to do that isbeyond its authority is void and it is just as void asa statute or an act of the administration would be."Law repugnant to the Constitution is void.. .forI cannot call it law contrary to the first greatprinciples of the social compact. . . (It) cannot beconsidered a rightful exercise of legislativeauthority."U.S. Sup. Ct., Marbury vs Madison, 1803, 2L ed. 60; 1 Cra. 137; ref Whea; 246 & Wal601Now, when it comes to deciding what kind ofremedy to apply, again, I think that we can findsome interesting and instructive material inconsidering the conclusions of those who were alittle closer than we are today to the framers of theagreement. We have, for example, this passage outof the report of the Kentucky legislature ofNovember 19, 1799, which says:Whensoever the general governmentassumes undelegated powers, its acts areunauthoritative, void and of no force. Thatto this contract (that is the Constitution)each state exceeded as a state and is anintegral party, its co-states forming as toitself the other party. That governmentcreated by this contract was not made theexclusive or final judge of the extent of thepowers delegated to itself, since that wouldhave made its discretion and not theConstitution the measure of its powers. Butthat, as in all other cases of compact amongparties having no common judge, each partyhas an equal right to judge for itself as wellof infraction as of the mode and measure ofredress.Now, returning to President James Madison wefind in Mr. Madison's report with specificreference to the judiciary and the manner in whichwe may be departing from the heritage that most40

of us have been taught to believe is a good one.Mr. Madison has said in his report:If the decision of the judiciary be raisedabove the authority of the sovereign partiesto the Constitution (of which Kansas is one)the decisions of the other departments notcarried by the forms of the Constitutionbefore the judiciary must be equallyauthoritative and final with the decisions ofthat department. However true, therefore, itmay be that the judicial department is, in allquestions submitted to it by the forms of theConstitution, to decide in the last resort, thisresort must necessarily be deemed the last inrelation to the authorities of the otherdepartments of the government, not inrelation to the rights of the parties to theconstitutional compact, from which thejudicial, as well as the other departments,hold their delegated trust. On any otherhypothesis, continues Madison, thedelegation of the judicial power would annulthe authority delegating it, and theconcurrence of this department with theothers in usurped powers, might subvertforever and beyond the possible reach of anyrightful remedy, the very Constitutionwhich all were instituted to preserve.FEDERAL RESERVE ACT: A CONSPIRACY AGAINST AMERICAInterest payments (tax money paid to theFederal Reserve System, a consortium of privatebankers) are the third-largest component of theFederal budget, after Defense and Social Security,according to the Office of Management andBudget.The Federal government spent a whopping onehundredeleven billion, eight-hundred milliondollars paying interest on the national debt in the1983 budget year ending 30 September.Gannet News Service, "Interest Drains Budgetas Federal Debt Grows," 16 November 1983,reported that interest on the national debt istaking an ever-larger share of Federal funds,thirteen point eight percent of all spending in1983.The Federal Reserve Act (Act of December 23,1913; 38 Stat: 251; 12 United States Code section221 et seq.) is an unauthorized act by Congress, anagency of the sovereign states.Being illegal, it must be put down byappropriate corrective action by the sovereignstates.Violations of the Constitution inherent in theFederal Reserve Act are illustrated in thefollowing citations:The Constitution of the United States,Article 1, section 8 provides that only theCongress of the United States shall have thepower "to borrow Money on the credit ofthe United States."The Federal Reserve Act illegallytransferred the power to borrow money onthe credit of the United States to aconsortium of private bankers, the FederalReserve Board, in violation of theprohibitions of Article 1, section 8,Constitution of the United States.The Constitution of the United States,Article 1, section 8, directs that only theCongress of the United States is permitted"to coin Money, regulate the Value thereof,and of foreign coin, and fix the Standard ofWeights and Measures."The Federal Reserve Act illegallytransferred the power to coin money,regulate the value thereof, and of foreigncoin, to a consortium of private bankers, theFederal Reserve Board, in violation of theprohibitions of Article 1, section 8,Constitution of the United States.The Constitution of the United States,Article 1, section 1, provides that "alllegislative Powers herein granted shall bevested in a Congress of the United States,which shall consist of a Senate and House ofRepresentatives."The Congress of the United States is withoutauthority to delegate any powers which ithas received under the Constitution of theUnited States, established by the People ofthe United States.41

THREE"The Government should create, issue andcirculate all the money and currency needed tosatisfy the spending power of the governmentand the buying power of the consumers."ABRAHAM LINCOLNARKANSAS ACTS ON FEDCITIZENS SEEK ESCAPE FROM IMPENDING ECONOMIC DEBACLEFirst hearing on Arkansas' House ConcurrentResolution #18, "Urging the Congress of theUnited States to Repeal the Federal Reserve Act,"introduced by Representative Jim Smithson,House Committee on Aging and LegislativeAffairs, held 16 February, revealed that the Fed isa private banking cartel.Pointing to a decision by the United StatesCourt of Appeals, Ninth Circuit, in the case of,Lewis v. United States, Archibald Roberts, Lt.Col., AUS, ret., Director, Committee to Restorethe Constitution, Inc., charged that, "Federalreserve banks are not federal instrumentalities . . .but are independent, privately owned and locallycontrolled corporations. . . ." 1and,"Each Federal Reserve Bank is a separatecorporation owned by commercial banks in itsregion. The stockholding commercial banks electtwo thirds of each Bank's nine member board ofdirectors. The remaining three directors areappointed by the Federal Reserve Board. TheFederal Reserve Board regulates the ReserveBanks, but direct supervision and control of eachBank is exercised by its board of directors."Congressman Wright Patman, House Bankingand Currency Committee, Congress of the UnitedStates, said in 1952:"The Open Market Committee (of the FederalReserve System) has the power to obtain, and doesobtain, the printed money of the United States -Federal Reserve Notes - (free) from the Bureau ofEngraving and Printing," quoted Colonel Roberts."The Fed exchanges these printed notes, whichof course are not interest bearing, for UnitedStates Government obligations that are interestbearing. After making the exchange," Patmanexplained, "the interest bearing obligations areretained by the 12 Federal Reserve banks and theinterest collected annually on these Governmentobligations goes into the funds of the 12 FederalReserve Banks.""U.S. Treasury financial report for 1982 placedthe Federal debt (money borrowed from theFederal Reserve System) at one trillion, seventybillion, two hundred forty-one million dollars,"said Roberts. "Interest paid to Federal Reservestockholders by American taxpayers on the$1,070,241,000,000 debt," Roberts stated in histestimony, "is one hundred fifteen billion, eighthundred million dollars."Charging that the federal debt is a lien on allproperty, both public and private, in the UnitedStates, Roberts said that the Open MarketCommittee of the Federal Reserve Systemdetermines the course of the U.S. economy bysetting interest rates charged by member banks,42

egulating the volume of Federal Reserve notes incirculation, determining the value of money,regulating the stock market, and by controllingother economic factors."The Fed," he stated, "controls the governmentand determines whether American citizens willlive in a prosperous or bankrupt society."Congress has no authority to transfer these vastpowers to a cartel of private bankers. TheConstitution is very specific about this. Article 1,section eight of the Constitution of the UnitedStates directs that, "The Congress is authorized toborrow money on the credit of the United States,"and, ". . .to coin money and regulate the valuethereof."Quoting Constitution Law (16 Am Jur 2d),Roberts said,The general rule is that anunconstitutional statute, whether federal orstate, though having the form and name oflaw, is in reality no law, but is wholly voidand ineffective for any purpose, sinceunconstitutionality dates from the time of its,enactment, and not merely from the date ofthe decision so branding it. Anunconstitutional law, in legal contemplation,is as inoperative as if it had never beenpassed. 2Being unconstitutional, Roberts told panelmembers, the Federal Reserve Act (H.R. 7837)must be put down.The State of Arkansas, operating at its highestsovereign capacity, has the power to correct the"unconstitutional" Federal Reserve Act of the1913 Congress by directing its agents inWashington to "enact such legislation as isnecessary to repeal the Federal Reserve," as theyare authorized to do under the provisions ofsection 30 of the Act.Corrective action in the twenty-fifth state,inspired by a coalition of conservativeorganizations headed by Mathias Frank, issupported by parallel legislation in Arizona,Washington, Nebraska, North Carolina, SouthCarolina, Montana, Pennsylvania, Utah,Alabama, Idaho, Illinois, Texas, Virginia, Oregon,and Indiana.In special session, the Arkansas House ofRepresentatives heard Roberts summarize theeffect on the state's economy passage of HCR #18would ultimately have. By supporting U.S.Congressman Ron Paul's bill to rescind theFederal Reserve Act, Arkansas agriculture wouldbe energized, business and industry rejuvinated,and the freedoms of person and propertyguaranteed to the people of Arkansas by theConstitution would be restored and preserved."EXHIBITS1 Lewis v. United States, No. 80-5905, UnitedStates Court of Appeals, Ninth Circuit, 19 April1982, beginning on this page.Constitutional Law (16 Am Jur 2d), "D.Effect ofTotally or Partially Unconstitutional Statutes," "1.Total Unconstitutionality," beginning on page 47.EXHIBIT 1AMENDED OPINIONLEWIS v. UNITED STA TESJohn L. LEWIS, Plaintiff/Appellant,v.UNITED STATES of America,Defendant/Appellee.No. 80-5905.United States Court of Appeals,Ninth Circuit.Submitted March 2, 1982.Decided April 19, 1982.As Amended June 24, 1982.Plaintiff, who was injured by vehicle owned andoperated by a federal reserve bank, brought actionalleging jurisdiction under the Federal Tort ClaimsAct. The United States District Court for theCentral District of California, David W. Williams,Jr., dismissed holding that federal reserve bankwas not a federal agency within meaning of Actand that the court therefore lacked subject-matterjurisdiction. Appeal was taken. The Court ofAppeals, Poole, Circuit Judge, held that federalreserve banks are not federal instrumentalities forpurposes of the Act, but are independent,privately owned and locally controlledcorporations.Affirmed.1. United States — 78(4)There are no sharp criteria for determiningwhether an entity is a federal agency withinmeaning of the Federal Tort Claims Act, but the43

critical factor is existence of federal governmentcontrol over "detailed physical performance" and"day to day operation" of an entity. 28 U.S.C.A.§1346(b).2. United States — 78(4)Federal reserve banks are not federalinstrumentalities for purposes of a Federal TortClaims Act, but are independent, privately ownedand locally controlled corporations in light of factthat direct supervision and control of each bank isexercised by board of directors, federal reservebanks, though heavily regulated, are locallycontrolled by their member banks, banks are listedneither as "wholly owned" governmentcorporations nor as "mixed ownership"corporations; federal reserve banks receive noappropriate funds from Congress and the banksare empowered to sue and be sued in their ownnames. 28 U.S.C.A.§ 1346(b); Federal ReserveAct §§ 4, 10(a, b), 13, 13a, 13b, 14, 14(a-g), 16, 12U.S.C.A. §§ 301, 341-360; 12 U.S.C.A. § 361;Government Corporation Control Act, §§ 101,201, 31 U.S.C.A. §§ 846, 856.3. United States — 78(4)Under the Federal Tort Claims Act, federalliability is narrowly based on traditional agencyprinciples and does not necessarily lie whentortfeasor simply works for an entity, like theReserve Bank, which performs importantactivities for the government. 28 U.S.C.A.§ 1346(b).4. Taxation — 6The Reserve Banks are deemed to be federalinstrumentalities for purposes of immunity fromstate taxation.5. States — 4.15Taxation — 6Tests for determining whether entity is federalinstrumentality for purposes of protection fromstate or local action or taxation, is very broad;whether entity performs important governmentalfunction.Appeal from the United States District Courtfor the Central District of California.Before POOLE and BOOCHEVER, CircuitJudges, and SOLOMON, District Judge.*POOLE, Circuit Judge:On July 27, 1979, appellant John Lewis wasinjured by a vehicle owned and operated by theLos Angeles branch of the Federal Reserve Bankof San Francisco. Lewis brought this action indistrict court alleging jurisdiciton under theFederal Tort Claims Act (the Act), 28 U.S.C. §1346(b). The United States moved to dismiss forlack of subject matter jurisdiction. The districtcourt dismissed, holding that the Federal ReserveBank is not a federal agency within the meaning ofthe Act and that the court therefore lacked subjectmatter jurisdiction. We affirm.In enacting the Federal Tort Claims Act,Congress provided a limited waiver of thesovereign immunity of the United States forcertain torts of federal employees. United States v.Orleans, 425 U.S. 807, 813, 96 S. Ct. 1971, 1975,48 L.Ed.2d 390 (1976). Specifically, the Actcreates liability for injuries "caused by thenegligent or wrongful act or omission" of anemployee of any federal agency acting within thescope of his office or employment. 28 U.S.C. §§1346(b), 2671. "Federal agency" is defined as:the executive departments, the militarydepartments, independent establishments ofthe United States, and corporations actingprimarily as instrumentalities of the UnitedStates, but does not include any contractorswith the United States.28 U.S.C. § 2671. The liability of the UnitedStates for the negligence of a Federal ReserveBank employee depends, therefore, on whetherthe Bank is a federal agency under § 2671.[1,2] There are no sharp criteria for determiningwhether an entity is a federal agency within themeaning of the Act, but the critical factor is theexistence of federal government control over the"detailed physical performance" and "day to dayoperation" of the entity. United States v. Orleans,425 U.S. 807, 814, 96 S.Ct. 1971. 1975, 48L.Ed.2d 390 (1976), Logue v. United States, 412U.S. 521, 528, 93 S.Ct. 2215, 2219, 37 L.Ed.2d121 (1973). Other factors courts have consideredinclude whether the entity is an independentcorporation, Pearl v. United States, 230 F.2d 243(10th Cir. 1956), Freeling v. Federal DepositInsurance Corporation, 221 F.Supp. 955 (W.D.Okla. 1962), aff'd per curiam, 326 F.2d 971 (10thCir. 1963), whether the government is involved inthe entity's finances. Goddard v. District ofColumbia Redevelopment Land Agency, 287 F.2d343, 345 (D.C.Cir. 1961), cert, denied, 366 U.S.910, 81 S.Ct. 1085, 6 L.Ed.2d 235 (1961), Freeling44

v. Federal Deposit Insurance Corporation, 221F.Supp. 955, and whether the mission of the entityfurthers the policy of the United States, Goddardv. District of Columbia Redevelopment LandAgency, 287 F.2d at 345. Examining theOrganization and function of the Federal ReserveBanks and applying the relevant factors, weconclude that the Reserve Banks are not federalinstrumentalities for purposes of the FTCA, butare independent, privately owned and locallycontrolled corporations.Each Federal Reserve Bank is a separatecorporation owned by commercial banks in itsregion. The stockholding commercial banks electtwo-thirds of each Bank's nine member board ofdirectors. The remaining three directors areappointed by the Federal Reserve Board. TheFederal Reserve Board regulates the ReserveBanks, but direct supervision and control of eachBank is exercised by its board of directors. 12U.S.C. § 301. The directors enact by-lawsregulating the manner of conducting general Bankbusiness, 12 U.S.C. § 341, and appoint officers toimplement and supervise daily Bank activities.These activities include collecting and clearingchecks, making advances to private andcommercial entities, holding reserves for membersbanks, discounting the notes of members banks,and buying and selling securities on the openmarket. See 12 U.S.C. §§ 341-361.Each Bank is statutorily empowered to conductthese activities without day-to-day direction fromthe federal government. Thus, for example, theinterest rates on advances to member banks,individuals, partnerships, and corporations are setby each Reserve Bank and their decisionsregarding the purchase and sale of securities arelikewise independently made.It is evident from the legislative history of theFederal Reserve Act that Congress did not intendto give the federal government direction over thedaily operation of the Reserve Banks:It is proposed that the Government shallretain sufficient power over the reservebanks to enable it to exercise a directauthority when necessary to do so, but thatit shall in no way attempt to carry onthrough its own mechanism the routineoperations and banking which requiredetailed knowledge of local and individualcredit and which determine the funds of thecommunity in any given instance. In otherwords, the reserve-bank plan retains to theGovernment power over the exercise of thebroader banking functions, while it leaves toindividuals and privately owned institutionsthe actual direction of routine.H.R. Report No. 69, 63 Cong. 1st Sess. 18-19(1913).The fact that the Federal Reserve Boardregulates the Reserve Banks does not make themfederal agencies under the Act. In United States v,Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d390 (1976), the Supreme Court held that acommunity action agency was not a federalagency or instrumentality for purposes of the Act,even though the agency was organized underfederal regulations and heavily funded by thefederal government. Because the agency's day today operation was not supervised by the federalgovernment, but by local officials, the Courtrefused to extend federal tort liability for thenegligence of the agency's employees. Similarly,the Federal Reserve Banks, though heavilyregulated, are locally controlled by their memberbanks. Unlike typical federal agencies, each bankis empowered to hire and fire employees at will.Bank employees do not participate in the CivilService Retirement System. They are covered byworker's compensation insurance, purchased bythe Bank, rather than the Federal EmployeesCompensation Act. Employees traveling on Bankbusiness are not subject to federal travelregulations and do not receive governmentemployee discounts on lodging and services.The Banks are listed neither as "wholly owned"government corporations under 31 U.S.C. § 846nor as "mixed ownership" corporations under 31U.S.C. § 856, a factor considered in Pearl v.United States, 230 F.2d 243 (10th Cir. 1956),which held that the Civil Air Patrol is not a federalagency under the Act. Closely resembling thestatus of the Federal Reserve Bank, the Civil AirPatrol is a non-profit, federally charteredcorporation organized to serve the public welfare.But because Congress' control over the Civil AirPatrol is limited and the corporation is notdesignated as a wholly owned or mixed ownershipgovernment corporation under 31 U.S.C. §§ 846and 856, the court concluded that the corporationis a non-governmental, independent entity, notcovered under the Act.Additionally, Reserve Banks, as privatelyowned entities, receive no appropriated funds45

from Congress. Cf. Goddard v. District ofColumbia Redevelopment Land Agency, 287 F.2d343, 345 (D.C.Cir. 1961), cert, denied, 366 U.S.910, 81 S.Ct. 1085, 6 L.Ed.2d 235 (1961) (courtheld land redevelopment agency was federalagency for purposes of the Act in large partbecause agency received direct appropriated fundsfrom Congress.)Finally, the Banks are empowered to sue and besued in their own name. 12 U.S.C. § 341. Theycarry their own liability insurance and typicallyprocess and handle their own claims. In the past,the Banks have defended against tort claimsdirectly, through private counsel, not governmentattorneys, e.g.. Banco De Espana v. FederalReserve Bank of New York, 114 F.2d 438 (2d Cir.1940); Huntington Towers v. Franklin NationalBank, 559 F.2d 863 (2d Cir. 1977); Bollow v.Federal Reserve Bank of San Francisco, 650 F.2d1093 (9th Cir. 1981), and they have never beenrequired to settle tort claims under theadministrative procedure of 28 U.S.C. § 2672. Thewaiver of sovereign immunity contained in theAct would therefore appear to be inapposite to theBanks who have not historically claimed orreceived general immunity from judicial process.[3] The Reserve Banks have properly been heldto be federal instrumentalities for some purposes.In United States v. Hollingshead, 672 F.2d 751(9th Cir. 1982), this court held that a FederalReserve Bank employee who was responsible forrecommending expenditure of federal funds was a"public official" under the Federal Bribery Statute.That statute broadly defines public official toinclude any person acting "for or on behalf of theGovernment." S. Rep. No. 2213, 87th Cong., 2ndSess. (1962), reprinted in [1962] U.S. Code Cong.& Ad. News 3852 3856. See 18 U.S.C. § 201 (a).The test for determining status as a public officialturns on whether there is "substantial federalinvolvement" in the defendant's activities. UnitedStates v. Hollingshead, 672 F.2d at 754. Incontrast, under the FTCA, federal liability isnarrowly based on traditional agency principlesand does not necessarily lie when the tortfeasorsimply works for an entity, like the Reserve Banks,which perform important activities for thegovernment.[4, 5] The Reserve Banks are deemed to befederal instrumentalities for purposes of immunityfrom state taxation. Federal Reserve Bank ofBoston v. Commissioner of Corporations &Taxation, 499 F.2d 60 (1st Cir. 1974), afterremand, 520 F.2d 221 (1st Cir. 1975); FederalReserve Bank of Minneapolis v. Register of Deeds,288 Mich. 120, 284 N.W. 667 (1939). The test fordetermining whether an entity is a federalinstrumentality for purposes of protection fromstate or local action or taxation, however, is verybroad: whether the entity performs an importantgovernmental function. Federal Land Bank v.Bismarck Lumber Co., 314 U.S. 95, 102, 62 S.Ct.1, 5, 86 L.Ed. 65 (1941); Rust v. Johnson, 597F.2d 174, 178 (9th Cir. 1979), cert, denied, 444U.S. 964, 100 S.Ct. 450, 62 L.Ed.2d 376 (1979).The Reserve Banks, which further the nation'sfiscal policy, clearly perform an importantgovernmental function.Performance of an important governmentalfunction, however, is but a single factor and notdeterminative in tort claims actions. FederalReserve Bank of St. Louis v. MetrocentreImprovement District, 657 F.2d 183, 185 n.2 (8thCir. 1981), Cf. Pearl v. United States, 230 F.2d243 (10th Cir. 1956). State taxation hastraditionally been viewed as a greater obstacle toan entity's ability to perform federal functionsthan exposure to judicial process; therefore taximmunity is liberally applied. Federal Land Bankv. Priddy, 294 U.S. 229, 235, 55 S.Ct. 705,708, 79L.Ed. 1408 (1955). Federal tort liability, however,is based on traditional agency principles and thusdepends upon the principal's ability to contol theactions of his agent, and not simply upon whetherthe entity performs an important governmentalfunction. See United States v. Orleans, 425 U.S.807, 815, 96 S.Ct. 1971, 1976, 48 L.Ed.2d 390(1976), United States v. Logue, 412 U.S. 521,527-28, 93 S.Ct. 2215, 2219, 37 L.Ed.2d 121(1973).Brinks Inc. v. Board of Governors of theFederal Reserve System, 466 F.Supp. 116(D.D.C.1979), held that a Federal Reserve Bank is afederal instrumentality for purposes of the ServiceContract Act, 41 U.S.C. § 35. Citing FederalReserve Bank of Boston and Federal ReserveBank of Minneapolis, the court applied the"important government function" test andconcluded that the term "Federal Government" inthe Service Contract Act must be "liberallyconstrued to effectuate the Act's humanitarianpurposes of providing minimum wage and fringebenefit protection to individuals performingcontracts with the federal government." Id. 288Mich. at 120, 284 N.W.2d 667.46

Such a liberal construction of the term "federalagency" for purposes of the Act is unwarranted.Unlike in Brinks, plaintiffs are not without aforum in which to seek a remedy, for they maybring an appropriate state tort claim directlyagainst the Bank; and if successful, their prospectsof recovery are bright since the institutions areboth highly solvent and amply insured.For these reasons we hold that the ReserveBanks are not federal agencies for purposes of theFederal Tort Claims Act and we affirm thejudgment of the district court.AFFIRMED.* The Honorable Gus J. Solomon, Senior DistrictJudge for the District of Oregon, sitting bydesignation.EXHIBIT 2CONSTITUTIONAL LAW 16 Am Jur 2dD. Effect of Totally or Partially UnconstitutionalStatutes1. Total Unconstitutionality§ 256. Generally.The general rule is that an unconstitutionalstatute, whether federal 29 or state, 30 though havingthe form and name of law, is in reality no law, 31but is wholly void, 33 and ineffective for anypurpose, 33 since unconstitutionality dates from thetime of its enactment, and not merely from thedate of the decision so branding it, 34 anunconstitutional law, in legal contemplation, is asinoperative as if it had never been passed. 35 Such astatute leaves the question that it purports to settlejust as it would be had the statute not beenenacted. 36 No repeal of such an enactment isnecessary. 37Since an unconstitutional law is void, thegeneral principles follow that it imposes noduties, 38 conferes no rights, 39 creates no office, 40bestows no power or authority on anyone, 41affords no protection, 42 and justifies no actsperformed under it. 43 A contract which rests on anunconstitutional statute creates no obligation tobe impaired by subsequent legislation. 44No one is bound to obey an unconstitutionallaw 45 and no courts are bound to enforce it. 46Persons convicted and fined under a statutesubsequently held unconstitutional may recoverthe fines paid. 47A void act cannot be legally inconsistent with avalid one. 48 And an unconstitutional law cannotoperate to supersede any existing valid law. 49Indeed, insofar as a statute runs counter to thefundamental law of the land, it is supersededthereby. 50 Since an unconstitutional statute cannotrepeal or in any way affect an existing one, 51 if arepealing statute is unconstitutional, the statutewhich it attempts to repeal remains in full forceand effect. 52 And where a clause repealing a priorlaw is inserted in an act, which act isunconstitutional and void, the provision for therepeal of the prior law will usually fall with it andwill not be permitted to operate as repealing suchprior law. 53The general principles stated above apply to theconstitutions as well as to the laws of the severalstates insofar as they are repugnant to theConstitution and laws of the United States. 54Moreover, a construction of a statute which bringsit in conflict with a constitution will nullify it aseffectually as if it had, in express terms, beenenacted in conflict therewith. 55An unconstitutional portion of a statute may beexamined for the purpose of ascertaining the scopeand effect of the valid portions'. 56___________________29 Under Article VI of the United StatesConstitution, it is not the laws of the UnitedStates, but the laws of the United States whichshall be made in pursuance of the Constitution,that bind the judges in every state. People v LongI.R.R., 113 Misc 700, 185 NYS 594, revd on othergrounds 195 App Div 897, 186 NYS 589.30 Atkins v Hertz Drivurself Stations, Inc. 261 NY352, 185 NE 408, affd 291 US 641, 78 L Ed 1039,54 S Ct 437.31 Chicago, I. & LR. Co. v Hackett, 228 US 559,57 L Ed 966, 33 S Ct 581; United States v RealtyCo., 163 US 427, 41 L Ed 215, 16 S Ct 1120;Huntington v Worthen, 120 US 97, 30 L Ed 588,7 S Ct 469; Norton v Shelby County, 118 US 425,30 L Ed 178, 6 S Ct 1121; Ex parte Royall, 117US 241, 29 L Ed 868, 6 S Ct 734; Hirsh v Block,50 App DC 56, 267 F 614, 11 ALR 1238, cert den254 US 640, 65 L Ed 452, 41 S Ct 13; Texas Co. vState, 31 Ariz 485, 254 P 1060, 53 ALR 258;Quong Ham Wah Co. v Industrial Acci. Com.,184 Cal 26, 192 P 1021, 12 ALR 1190, writ dism255 US 445, 65 L Ed 723, 41 S Ct 373; State ex47

el. Nuveen v Greer, 88 Fla 249, 102 So 739, 37ALR 1298; Commissioners of Roads & Revenuesv Davis, 213 Ga 792, 102 SE2d 180; Grayson-Robinson Stores, Inc. v Oneida, Ltd., 209 Ga 613,75 SE2d 161, cert den 346 US 823, 98 L Ed 348,74 S Ct 39; State v Garden City, 74 Idaho 513,265 P2d 328; Security Sav Bank v Cornell, 198Iowa 564, 200 NW 8, 36 ALR 486; Flournoy vFirst Nat. Bank, 197 La 1067, 3 So 2d 244; ReOpinion of Justices, 269 Mass 611, 168 NE 536,66 ALR 1477;State ex rel. Miller v O'Malley,342Mo 641, 117 SW2d 319; Garden of EdenDrainage Dist. v Bartlett Rust Co., 330 Mo 554,50 SW2d 627, 84 ALR 1078; Anderson vLehmkuhl, 119 Neb 451, 229 NW 773; Daly vBeery, 45 ND 287, 178 NW 104; Threadgill vCross, 26 Okla 403, 109 P 558; Ex parte Hollman,79 SC 9, 60 SE 19; Atkinson v Southern ExpressCo., 94 SC 444, 78 SE 516; Henry County vStandard Oil Co., 167 Tenn 485, 71 SW2d 683, 93ALR 1483; Peay v Nolan, 157 Tenn 222, 7 SW2d815, 60 ALR 408; State ex rel. University of Utahv Candland, 36 Utah 406, 104 P 285; Miller vState Entomologist, 146 Va 175, 135 SE 813, 67ALR 197, affd 276 US 272, 72 L Ed 568, 48 S Ct246; Bonnett v Vallier, 136 Wis 193, 116 NW885; Cincinnati, W. & Z. R. Co. v Commissionersof Clinton County, 1 Ohio St 77."An unconstitutional law is void and is as nolaw. An offense created by it is no crime. Aconviction under it is not merely erroneous, but isillegal and void and cannot be a legal cause ofimprisonment." Ex parte Siebold, 100 US 371, 25L Ed 717.A discriminatory law is, equally with the otherlaws offensive to the constitution, no law at all.Quong Ham Wan Co. v Industrial Acci. Com.,184 Cal 26, 192 P 1021, 12 ALR 1190, writ dism255 US 445, 65 L Ed 723, 41 S Ct 373.32 Ex parte Royall, 117 US 241, 29 L Ed 868, 6 S Ct734; Ex parte Siebold, 100 US 371, 25 L Ed 717;Cohens v Virginia, 19 US 264, 5 L Ed 257; Stateex rel. Nuveen v Greer, 88 Fla 249,102 So 739, 37ALR 1298; Commissioners of Roads & Revenuesv Davis, 213 Ga 792, 102 SE2d 180; Grayson-Robinson Stores, Inc. v Oneida Ltd., 209 Ga 613,75 SE2d 161, cert den 346 US 823, 98 L Ed 348,74 S Ct 39; Hillman v Pocatello, 74 Idaho 69, 256P2d 1072; Henderson v Lieber's Ex'r, 175 Ky 15,192 SW 830, 9 ALR 620; Flournoy v First Nat.Bank, 197 La 1067, 3 So 2d 244; Re Opinion ofJustices, 269 Mass 611, 168 NE 536, 66 ALR1477; President, Directors & Co. of MichiganState Bank v Hastings (Mich) 1 Dougl 225;Garden of Eden Drainage Dist. v Bartlett RustCo., 330 Mo 554, 50 SW2d 627, 84 ALR 1078;Anderson v Lehmkuhl, 119 Neb 451, 229 NW773; State ex rel. Stevenson v Tufly, 20 Nev 427,22 P 1054; State v Williams, 146 NC 618, 61 SE61; Daly v Beery, 45 ND 287, 178 NW 104;Atkinson v Southern Express Co., 94 SC 444, 78SE 516; Ex parte Hollman, 79 SC 9, 60 SE 19;Henry County v Standard Oil Co., 167 Tenn 485,71 SW2d 683, 93 ALR 1483; Peay v Nolan, 157Tenn 222, 7 SW2d 815, 60 ALR 408; Miller vDavis, 136 Tex 299, 150 SW2d 973, 136 ALR177; Almond v Day, 197 Va 419, 89 SE2d 851;Miller v State Entomologist, 146 Va 175, 135 SE813, 67 ALR 197, affd 276 US 272, 72 L Ed 568,48 S Ct 246; Servonitz v State, 133 Wis 231, 113NW 277; State ex rel. Hostetter v Hunt, 132 OhioSt 568, 8 Ohio Ops 558, 9 NE2d 676, reh den.Unconstitutionality is illegality of the highestorder. Board of Zoning Appeals v Decatur Co. ofJehovah's Witnesses, 233 Ind 83, 117 NE2d 115.33 State v One Oldsmobile Two-Door Sedan, 227Minn 280, 35 NW2d 525; Grieb v Department ofLiquor Control, 153 Ohio St 77, 41 Ohio Ops 148,90 NE2d 691.An unconstitutional statute is of no effect andbinding on no one. Ex parte Messer, 87 Fla 92, 99So 330.34 State ex rel. Nuveen v Greer, 88 Fla 249, 102 So739, 37 ALR 1298; State ex rel. Miller v O'Malley,342 Mo 641,117 SW2d 319; Bonham v Hamilton,66 Ohio St 82, 63 NE 597.35 Chicago, I. & L. R. Co. v Hackett, 228 US 559,57 L Ed 966, 33 S Ct 581; Norton v ShelbyCounty, 118 US 425, 30 L Ed 178, 6 S Ct 1121;Louisiana v Pilsbury, 105 US 278, 26 L Ed 1090;Gunn v Barry, 82 US 610, 21 L Ed 212; Hirsh vBlock, 50 App DC 56, 267 F 614, 11 ALR 1238,cert den 254 US 640, 65 L Ed 452, 41 S Ct 13;Texas Co. v State, 31 Ariz 485, 254 P 1060, 53ALR 258; Morgan v Cook 211 Ark 755, 202SW2d 355; Connecticut Baptist Convention vMcCarthy, 128 Conn 701, 25 A2d 656;Commissioners of Roads & Revenues v Davis, 213Ga 792, 102 SE2d 180; Grayson-Robinson Stores,Inc. v Oneida, Ltd., 209 Ga 613 75 SE2d 161, certden 346 US 823,98 L Ed 348,74 S Ct 39; SecuritySav. Bank v Connell, 198 Iowa 564, 200 NW 8, 36ALR 486; Flournoy v First Nat. Bank, 197 La48

1067, 3 So 2d 244; Cooke v Iverson, 108 Minn388, 122 NW 251; Clark v Grand Lodge, B.R.T.,328 Mo 1084, 43 SW2d 404, 88 ALR 150; St.Louis v Polar Wave Ice & Fuel Co., 317 Mo 907,296 SW 993, 54 ALR 1082; Anderson vLehmkuhl 119 Neb 451, 229 NW 773; Daly vBeery, 45 ND 287, 178 NW 104; State ex rel.Tharel v Board of County Com'rs, 188 Okla 184,107 P2d 542; Atkinson v Southern Express Co.,94 SC 444, 78 SE 516; Henry County v StandardOil Co., 167 Tenn 485, 71 SW2d 683, 93 ALR1483; State ex rel. University of Utah v Candland,36 Utah 406, 104 P 285; Bonnett v Vallier, 136Wis 193, 116 NW 885; Brandenstein v Hoke, 101Cal 131, 35 P 562; State ex rel. West v Butler, 70Fla 102, 69 So 771; Briggs v Campbell, Wyant &Cannon Foundry Co., 2 Mich App 204, 139NW2d 336, affd 379 Mich 160, 150 NW2d 752;State ex rel. Allison v Garver, 66 Ohio St 555, 64NE 573.36 Commissioners of Roads &. Revenues v Davis,213 Ga 792, 102 SE2d 180; Grayson-RobinsonStores, Inc. v Oneida, Ltd., 209 Ga 613, 75 SE2d161, cert den 346 US 823, 98 L Ed 348, 74 S Ct39; Flournoy v First Nat. Bank, 197 La 1067, 3 So2d 244; Clark v Grand Lodge, B.R.T, 328 Mo1084, 43 SW2d 404, 88 ALR 150; Cleveland vWatertown, 99 Misc 66, 165 NYS 305, affd 179App Div 954, 166 NYS 286, revd 222 NY 159,118 NE 500; Atkinson v Southern Express Co., 94SC 444, 78 SE 516.37 A nullity needs no repeal. Nicol v Board ofEducation, 125 Misc 678, 211 NYS 749.38 Norton v Shelby County, 118 US 425, 30 L Ed178, 6 S Ct 1121; Security Sav. Bank v Cornell,198 Iowa 564, 200 NW 8, 36 ALR 486; Flournoyv First Nat. Bank, 197 La 1067, 3 So 2d 244;Kesbec, Inc. v Taylor, 253 App Div 353, 2 NYS2d241, mod on other grounds 278 NY 293, 16 NE2d288, 119 ALR 536, reh den 278 NY 716, 17NE2d 136; Anderson v Lehmkuhl, 119 Neb 451,229 NW 773; Daly v Beery, 45 ND 287, 178 NW104; Henry County v Standard Oil Co., 167 Tenn485, 71 SW2d 683, 93 ALR 1483; State ex rel.University of Utah v Candland, 36 Utah 406, 104P 285.39 Chicago, I. & L.R. Co. v Hackett, 228 US 559,57 L Ed 966, 33 S Ct 581; Norton v ShelbyCounty, 118 US 425, 30 L Ed 178, 6 S Ct 1121;Hirsh v Block, 50 App DC 56, 267 F 614, 11 ALR1238, cert den 254 US 640, 65 L Ed 452, 41 S Ct13; Smith v Costello, 11 Idaho 205, 290 P2d 742,56 ALR2d 1020; Security Sav. Bank v Connell,198 Iowa 564, 200 NW 8, 36 ALR 486, Flournoyv First Nat. Bank, 197 La 1067, 3 So 2d 244;Garden of Eden Drainage Dist. v Bartlett Rust.Co., 330 Mo 554, 50 SW2d 627, 84 ALR 1078; StLouis v Polar Wave Ice & Fuel Co., 317 Mo 907,296 SW 993, 54 ALR 1082; Watkins v Dodson,159 Neb 745, 68 NW2d 508; State ex rel.Charleston, C. & CR. Co. v Whitesides. 30 SC579, 9 SE 661;Kesbec, Inc. v Taylor, 253 App Div353,2 NYS2d 241, mod on other grounds 278 NY293, 16 NE2d 288, 119 ALR 536, reh den 278NY 716, 17 NE2d 136; Henry County v StandardOil Co., 167 Tenn 485, 71 SW2d 683, 93 ALR1483.Under Nebraska law an unconstitutional statuteis an utter nullity, is void from the date of itsenactment, and is incapable of creating any rights.Propst v Board of Educational Lands & Funds(DC Neb) 103 F supp 457, app dismd 343 US 901,96 L Ed 1321, 72 S Ct 636, reh den 343 US 937,96 L Ed 1344, 72 SCt 769.Compare Swift v Calnan, 102 Iowa 206, 71 NW233, holding that while no right may be basedupon an unconstitutional statute, part of itsprovisions may be considered in construing otherprovisions confessedly good, in arriving at thecorrect interpretation of the latter.As to the effect of, and rights under, a judgmentbased upon an unconstitutional law, see 46 AmJur 2d, JUDGMENTS § 19; as to the res judicataeffect of such a judgment, see 46 Am Jur 2d,JUDGMENTS §441.40 Norton v Shelby County, 118 US 425, 30 L Ed178, 6 S Ct 1121; Security Sav. Bank v Connell,198 Iowa 564, 200 NW 8, 36 ALR 486; Flournoyv First Nat. Bank, 197 La 1067, 3 So 2d 244.4l Felix v Board of Com'rs, 62 Kan 832, 62 P 667;Henderson v Lieber's Ex'r, 175 Ky 15, 192 SW830, 9 ALR 620; Flournoy v First Nat Bank, 197La 1067, 3 So 2d 244; Anderson V Lehmkuhl, 119Neb 451, 229 NW 773; Daly v Beery, 45 ND 287,178 NW 104.42 Norton v Shelby County, 118 US 425, 30 L Ed178,6 S Ct 1121;Huntington v Worthen, 120US97, 30 L Ed 588, 7 S Ct 469; Osborn v President,Directors & Co. of Bank, 22 US 738, 6 L Ed 204;Smith v Costello, 11 Idaho 205, 290 P2d 742, 56ALR2d 1020; Board of Highway Com'rs vBloomington, 253 III 164, 97 NE 280; SecuritySav. Bank v Connell, 198 Iowa 564, 200 NW 8, 36

ALR 486; Flournoy v First Nat. Bank. 197 La1067, 3 So 2d 244; Flournoy v First Nat. Bank,197 La 1067, 3 So 2d 244; St. Louis v Polar WaveIce & Fuel Co., 317 Mo 907, 296 SW 993, 54ALR 1082; Anderson v Lehmkuhl, 119 Neb 451,229 NW 773; State v Williams, 146 NC 618, 61SE 61; Daly v Beery 45 ND 287, 178 NW 104;Atkinson v Southern Express Co., 94 SC 444, 78SE 516; Sharber v Florence, 131 Tex 341, 115SW2d 604; State ex rel. University of Utah vCandland, 36 Utah 406, 104 P 285; Bonnett vVallier, 136 Wis 193, 116 NW 885; Little Rock &F.S. Railway v Huntington, 120 US 160, 30 L Ed591, 7 SCt 517.It is said that all persons are presumed to knowthe law, meaning that ignorance of the lawexcuses no one; if any person acts under anunconstitutional statute, he does so at his peril andmust take the consequences. Sumner v Beeler, 50Ind 341.As to the limitations to which this rule issubject, see §257, infra.43 Osborn v President, Directors & Co. of Bank, 22US 738, 6 L Ed 204; Millet v Rizzo (La App) 2 So2d 244; Board of Managers v Wilmington, 237NC 179, 74 SE2d 749; State ex rel. Tharel v Boardof County Com'rs, 188 Okla 184, 107 P2d 542;Sharber v Florence, 131 Tex 341, 115 SW2d 604;People ex rel. McLees v Berner, 170 Misc 501,10NYS2d 339.44 A contract executed solely for the purpose ofcomplying with the provisions of anunconstitutional statute is not valid, and theperson who under its terms is obligated to complywith the provisions of the unconstitutional act isentitled to relief. Cleveland v Clements Bros.Const. Co., 67 Ohio St 197, 65 NE 885; Jones vColumbian Carbon Co., 132 W Va 219, 51 SE2d790.Generally, as to the application to invalidcontracts of the obligation of contracts guaranty,see §688, infra.45 Flournoy v First Nat. Bank, 197 La 1067, 3 So2d 244; State ex rel. Clinton Falls Nursery Co. vSteele County Board of Com'rs, 181 Minn 427,232 NW 737, 71 ALR 1190; St. Louis v PolarWave Ice & Fuel Co., 317 Mo 907, 296 SW 993,54 ALR 1082; Anderson v Lehmkuhl, 119 Neb451, 229 NW 773; Amyot v Caron, 88 NH 394,190 A 134; State v Williams, 146 NC 618, 61 SE61; Daly v Beery, 45 ND 287, 178 NW 104.46 Chicago, I. & L.R. Co, v Hackett, 228 US 559,57 L Ed 966, 33 S Ct 581; United States v RealtyCo., 163 US 427, 41 L Ed 215, 16 S Ct 1120;Payne v Griffin (DC GA) 51 F Supp 588;Hammond v Clark, 136 Ga 313, 71 SE 479;Flournoy v First Nat. Bank, 197 La 1067,3So2d244; Anderson v Lehmkuhl, 119 Neb 451, 229NW 773; State v Williams, 146 NC 618,61 SE 61,Daly v Beery, 45 ND 287, 178 NW 104; State exrel. Weinberger v Miller, 87 Ohio St 12, 99 NE1078.Only the valid legislative intent becomes the lawto be enforced by the courts. State ex rel. Clarksonv Philips, 70 Fla 340,70 So 367; Flournoy v FirstNat. Bank, 197 La 1067, 3 So 2d 244.47 Neely v United States (CA3 Pa) 546 F2d 1059,41 ALR Fed 331, reh den (CA3 Pa) 554 F2d 114and on remand

FOUR"If the Nation can issue a dollar bond it canissue a dollar bill. The element that makes thebond good makes the bill good also. Thedifference between the bond and the bill is thatthe bond lets the money broker collect twicethe amount of the bond and an additional20%. Whereas the currency, the honest sortprovided by the Constitution, pays nobody butthose who contribute in some useful way. It isabsurd to say our Country can issue bonds andcannot issue currency. Both are promises topay, but the one fattens the usurer and theother helps the People."THOMAS EDISONA NATION IN HOCKIDAHO TESTIMONY REVEALS FEDERAL RESERVE HAS LIENAGAINST ALL U.S. PROPERTYTrillion dollar national debt, money borrowed bythe Federal government from the Federal ReserveSystem, a private banking cartel, is a lien againstall property in the United States, both public andprivate, constitutionalist tells panel investigatingcause for bankrupt society.Solution is citizen participation in State demandfor repeal of Federal Reserve Act, restoring toCongress power to 'borrow money on credit of theUnited States,' and returning control of economyto the people, speaker says.On 7 March 1983 Archibald Roberts, Director,Committee to Restore the Constitution, appearedbefore the Idaho Senate State Affairs Committee,Honorable Walter H. Yarbrough, Chairman, totestify in support of House Joint Memorial #3,calling for repeal of the Federal Reserve Act of1913.Introduced by Representative Frank Findlay inresponse to demand by thousands of irate Idahocitizens, HJM #3 was adopted 46 to 22 by theHouse of Representatives on 4 February.Senate hearings of 7 March resulted in passageby voice vote on 14 March, propelling Idaho intoranks of states challenging the constitutionality ofthe Federal Reserve Act.State legislative action on the Federal Reservedemonstrates a national movement of enormouspotential for reversing decline of the Americancivilization.Following is a transcription from a live taperecording of address by Col. Roberts, andquestions on the issue by Senate Committeemembers.Mr. Chairman and members of the Senate StateAffairs Committee, my name is ArchibaldRoberts. I am a resident of Fort Collins, Colorado,and the Director of the Committee to Restore theConstitution. The Committee is a non-profitcorporation. We are a political research and publicinformation organization. The thrust of the51

Committee to Restore the Constitution, Mr.Chairman and members, is to encourage supportof the Articles of the Constitution within theborders of each State. The reason for that, ofcourse, is that the State is the principal under theConstitution having created the Federalgovernment by the first three articles of theConstitution. Since we are dealing with Principaland Agent, it is clearly the responsibility of therespective States, as Principals, to correct anyexcesses of their Federal agencies in Washington,D.C. And so, in the case of the Federal ReserveAct, which we will show later in this presentationto be unconstitutional, it will be our purpose tosupport the resolution now before this Committee,that is House Joint Resolution No. 3, calling forrepeal of the Federal Reserve Act of 1913.During the next few minutes, Mr. Chairman, Iwould like to present to the Committee the originsof the national economic crisis. This, of course isat the heart of any consideration for correctiveaction. We will also reveal what we consider to bethe proper solution for these excesses by Federalagencies, namely repeal of the Federal ReserveAct of 1913.Because the State is superior to its creature, it isobviously the constitutional responsibility ofelected state officials, representing theirconstituencies, to take whatever action isnecessary to enforce the articles of theConstitution within the borders of the State ofIdaho. Of course, all political power flows fromthe people. It is the responsibility of the individualcitizen, therefore, to bring to the attention ofelected officials violations of the Constitution, orabridgements thereof, which threaten any of thefreedoms of persons or property guaranteed to thepeople by the Constitution.Now the issue of economic crisis.I believe that the magnitude of this problem,Mr. Chairman, was revealed by an AssociatedPress story out of Washington dated the 24th ofJune, 1982. The Treasury financial report of thisdate stated that the Federal debt was$1,070,241,000,000. The Associated Press storystated that Congress' limitation on the nationaldebt is the reason the Senate had raised the ceilingto accommodate an anticipated budget deficit inexcess of $100,000,000,000.Mr. Chairman, we know now that since thatdate the deficit has been raised substantially.These are very grave conditions with a nationaldebt of over one trillion dollars and an estimateddeficit of 170 billion. Mr. Marvin Stone, Mr.Chairman, the editor of U.S. News and WorldReport, declared on the 28th of June, 1982, thattodays interest on the national debt is over $100billion annually, based on the trillion dollarnational debt. $100 billion interest paid on thenational debt. The significance here of course, isthat the so-called trillion dollar debt is moneyborrowed by the Federal government from theFederal Reserve which is, as we will show, aprivate banking establishment. Therefore, theinterest of $ 100 billion paid on the national debt isactually paid to the private banking cartel calledthe Federal Reserve, and its Class A stockholders.I think that Americans, and particularly thepeople of Idaho should know to whom this trilliondollars is owed, and who collects the $100 billiondollar interest payment which we have identified.And finally, are America's taxpayers actuallyvictims of a gigantic hoax. If the later is the case,then we of course are dealing with a criminalconspiracy,A clue to these questions is found in a UnitedPress International release which stated, and Iquote, "Panel to Decide U.S. Monetary Course."Panel meaning the Federal Reserve Panel. This isa Rocky Mountain News article Mr. Chairman,and it revealed that the Federal Reserve OpenMarket Committee is the policy making body ofthe Federal Reserve System. Therefore, thisCommittee sets the course of the U.S. economy. Itsets the interest rates on all money loaned by thebanks and trickles down to the other lendingagencies. It also, of course, determines the amountof Federal Reserve notes in circulation, which arenot based on anything of value but are created outof thin air. It determines the stock market action,whether it will be up or down, and other factorswhich have a direct bearing on whetherAmericans and the citizens of Idaho will live in abankrupt or a prosperous society. We are nowliving in a bankrupt society directly due to themanipulation of credit and the volume of currencyput into circulation by the Federal ReserveSystem.I think it would be prudent to follow this leadwhich we have uncovered to determine how itaffects individuals involved in the lawmakingprocess, and of course, their constituents living inthe State of Idaho.52

Mr. Chairman and members of this Committee,J testified on the Federal Reserve System beforethe Wisconsin State Affairs Committee inMadison, Wisconsin on 30 March 1971. The titleof my address was "The Secret Government ofMonetary Power." This address was placed in theCongressional Record on the 19th of April, 1971,under the title "The Most Secret Science."Extracts of the Madison speech have a directbearing on today's economic ills and explain how asecret government of monetary power did seizecontrol of the Federal government in 1913. Sincethat time, Americans have existed at the whim ofthose who control the economy through theFederal Reserve System.Before we examine this particular part of thepresentation Mr. Chairman, it would be well toagree on the authority, the Law, affecting theeconomic situation in the United States. Mr.Chairman, the Constitution is very specific aboutcontrol of the economy and the fiscal process ofthe United States. Article 1, section 8, directs thatthe Congress is authorized to borrow money onthe credit of the United States, and to coin moneyand regulate the value thereof. Federal Agents,Mr. Chairman, are prohibited from modifying theConstitution or to transfer these vast powers to aprivate banking cartel. There is no authority in theConstitution permitting such usurpation of power.Later in this presentation, Mr. Chairman, wellshow how the State of Arizona, acting on thisauthority, that is the quoted authority of theConstitution, memorialized the President andCongress to rescind the Federal Reserve Act, asthe resolution before this Committee proposes todo.The Federal Reserve, as we have pointed outpreviously, is not a government agency. It is aprivate banking cartel. This is the crux of the issue.I think it might be pertinent therefore, Mr.Chairman, to examine the authority which theFederal Reserve itself declares established its legalstatus. This authority is quoted in a statementsubmitted to Congressman Wright Patman, whowas then Banking and Currency Board Chairman,by the Board of Governors of the Federal ReserveSystem. This statement was made the 14th ofApril, 1952, and is as applicable today as it wasthen. I quote, "The twelve Federal Reserve Banksof the Federal Reserve Board are corporations setup by Federal law to operate for public purposesand are placed under government supervision."The Board further advised Mr. Patman, and again1 quote, "The Board of Governors was created byCongress and is a part of the government of theUnited States. Its members," they said assuringly,"are appointed by the President with the adviceand consent of the Senate and it," that is the Fed,"has been held by the Attorney General to be agovernment establishment."Mr. Patman retorted to these rather impressiveclaims and exploded the myth that the FederalReserve acts with legality as a public servant. Mr.Patman stated, "There is no free market that cancope with a national debt of $272 billion dollars.(This was in 1952. We are now well over onetrillion dollars in debt as a result of themanipulation of the Federal Reserve) with 85billion of it to be refunded within one year. Thefree market," he said, "means privatemanipulation of private credit."As we have pointed out, Mr. Chairman, privatemanipulation of public credit is the purpose andobjective of the Federal Reserve. I invite yourattention again, Mr. Chairman and members, toArticle 1 section 8 of the Constitution whichdeclares that only the Congress can "borrowmoney on the credit of the United States." But infact, as Mr. Patman pointed out, the objective ofthe private Federal System is to borrow money onthe public credit of the United States in violationof prohibitions of the Constitution.Then Congressman Patman revealed thecontradiction in this Federal Reserve claim ofgovernment agency status, and explained how theFed generates illegitimate profits for its members. Iquote, "The Open Market Committee of theFederal Reserve System is composed of sevenmembers of the Board of Governors and fivemembers who are presidents of Federal Reservebanks, and who are directed by privatecommercial banking interests. The Open MarketCommittee has the power to obtain, and doesobtain, the printed money of the United States(Federal Reserve Notes) (free) from the Bureau ofEngraving and Printing. The Fed exchanges theseprinted notes," the Federal Reserves notes, "whichare not, of course, interest bearing, forgovernment obligations which are interestbearing."This is how interest is generated on the Federaldebt, the one trillion dollar Federal debt; $100billion interest. And then Mr. Patman explained,"The interest bearing obligations are retained bythe 12 Federal Reserve banks and the interest53

collected annually on these governmentobligations goes to the funds of the 12 FederalReserve banks."Then Mr. Patman exploded the myth that theFederal Reserve System is an instrumentality ofthe Federal government. "These funds," that isinterest paid on the national debt to the FederalReserve banks, "these funds are expended by theFederal Reserve System without an accounting tothe Congress. In fact, there has never been anindependent audit of any of the 12 FederalReserve banks or by the Federal Reserve Boardthat has been made available to the Congress,where members of the Congress would have anopportunity to inspect it. The General AccountingOffice," Mr. Patman pointed out, "does not havejurisdiction over, the Federal Reserve. For 40years," (that was in 1952), "for 40 years theSystem while freely using the money, that is thecredit of the government of the United States, hasnot made a proper accounting."An even more damning indictment of theFederal Reserve System was made by the lateLewis T. McFadden, Chairman of the Bankingand Currency Committee, United States Congress.Mr. McFadden stated, "Every effort has beenmade by the Fed to conceal its power, but thetruth is the Fed has usurped the government and itcontrols everything here (in Congress) and itcontrols all of our foreign relations. It makes andbreaks governments at will."Mr. Chairman, it is obvious that when thepower to control money is transferred from thepeople to a private banking monopoly, as it is nowproven the case in America, that the sovereigntyof the people is surrendered too. Control of wealthconfers upon those who control it final decision inthe domestic and international affairs of nations.When an invisible government of monetary powerusurps the coin of the realm, the people aredisfranchised and real political authority istransferred into the hands of a financialaristocracy. Mr. Chairman, I believe that aninvisible government of monetary power willcontinue to control the American destiny and thelives of the people until informed citizensdismantle the Federal Reserve System.As I suggested at the beginning of thispresentation, Mr. Chairman and members, we dohave good news. Returning America to fiscalsanity and political responsibility has alreadybegun. We believe that the first State to introducelegislation challenging the constitutionality of theFederal Reserve Act is Arizona. The 21st ofJanuary, 1982 is perhaps the most significant dateof this century. On this date members of theArizona State Legislature, in both the House andSenate, memorialized the President and Congressto enact such legislation as is necessary to repealthe Federal Reserve Act. The Arizona resolutionis identical to the proposal now before thisCommittee.I quote from a statement made byRepresentative D. Lee Jones, principal sponsor ofthe Arizona resolution. "We are determined tooust the Federal Reserve System out and awayfrom our national pocketbook."Asserting that only the Congress has the powerto borrow money on the credit of the UnitedStates, and to coin money and regulate the valuethereof, Arizona lawmakers, by a boomingmajority, affirmed that Congress is withoutauthority to delegate these powers to privatebanking interests.Again I quote the Arizona resolution. "TheUnited States," they warned, "is facing in thecurrent decade an economic debacle of massiveproportions due in large measure to a continuingerosion of our national currency and the resultinghigh interest rates caused by policies of the FederalReserve Board."Mr. Chairman, quick to follow the Arizonalead, the following States also introducedcompanion resolutions: Washington State, Utah,Nebraska, Alabama, Indiana, North Carolina,South Carolina, Pennsylvania and Montana. Allchallenging the constitutionality of the FederalReserve Act. Since that time we have hadadditional states join this most importantmovement. The latest of these being the state ofArkansas, where I testified before the ArkansasState Affairs Committee on the 15th of Februaryand endorsed their resolution to rescind theFederal Reserve Act.Without quoting any of the points of theArkansas action [ merely point out that it is thesame resolution as is before this Committee.Mr. Chairman, 1 believe that in this very briefpresentation we have pointed out three importantfactors for consideration by this panel. First, thetrillion dollar national debt is not owed toourselves as government handouts would haveyou believe. It is owed to a private banking54

monopoly, the Federal Reserve System.Therefore, Mr. Chairman, the national debt is alien against all property in the United States bothpublic and private. Two, interest on the nationaldebt, which is over $100 billion for this year, $115billion as a matter of fact, is paid to the Class Astockholders of the Federal Reserve System, aprivate banking monopoly. Three, the FederalReserve Open Market Committee, that is thepolicy making body of the Federal ReserveSystem, determines interest rates, sets the volumeof Federal Reserve notes in circulation, controlsthe stockmarket and rules on other publiceconomic factors which determine whetherAmericans will live in a prosperous or a bankruptsociety. We have also found, Mr. Chairman, thatthe Federal Reserve System, which is the source ofour economic crisis, exists outside the Law; that is,in violation of prohibitions of the Constitution.Being in violation of the Constitution, Mr.Chairman, it must be put down. I believe, Mr.Chairman, that, the issue is clearly before us.Survival is not a spectator sport but requires theattention and consideration of all concernedAmericans. This is the reason why I have beeninvited by your constituency to appear andpresent some of the facts behind the FederalReserve System for your consideration.Mr. Chairman, I invite questions if it is yourpleasure.Chairman Yarbrough: Thank you, Colonel. Isthere a question?Q: Mr. Chairman and Colonel Roberts, I wasreading your Bulletin Committee to Restore theConstitution on the second page it refers to a courtcase, John L. Lewis v. the United States ofAmerica. Where the U.S. Court of Appeals heldthat the Reserve banks are independent, privatelyowned and locally controlled corporations. Thatbeing the case and considering the considerabledamage that is being cited as being done to thecitizens of this great State, wouldn't it be possiblewithin our laws to have our own AttorneyGeneral file suit against them for reparation ofsome of the damages done to the citizens?ROBERTS: Mr. Chairman, members, sir; Indeedthis is one of the options available to members ofthis body, and we certainly would encourage suchan investigation inasmuch as the Court has, infact, found that the Federal Reserve is a privatecorporation, and therefore operates for the profitof its members, its member banks and thestockholders of these banks.Q: Mr. Chairman, Colonel Roberts, then if 1understand you correctly, you would view theurging of this legislative body to reintroduceperhaps a concurrent resolution that would askthe Attorney General of the State of Idaho to filesuit in the appropriate court against the FederalReserve System, or the Reserve banks, perhaps Ishould differentiate there, so that we might indeedrecover damages for what we suffer.ROBERTS: Mr. Chairman, members, sir, This is,of course, a later option in our opinion. The reasonwe believe it a later option is, number one, that it isour responsibility, first, to clarify the Law. Well,the Law is the Constitution, therefore, we must, inour opinion, go to the Congress with petitionsfrom the various states demanding repeal of theFederal Reserve Act to clarify the Law. Once thisaction is under consideration, it is very feasible tothen bring such action. However, in the case ofthe State of Washington, Mr. Chairman, sir, theaction was, as you suggested, taken by one of thesenators (Senator Jack Metcalf) in the State ofWashington. However, the Attorney General ofthe State of Washington recommended withholdingaction on this case until such time asadditional States entered into a supportingmovement. So this is really a first step, in ouropinion, to present, first, the clear cut statement ofthe State of Idaho that there is violation of theConstitution. Then when we have a sufficientnumber of States, and we already have 16involved, so when we have a sufficient number ofStates to support such action as bringing a legalcase, then we are obviously in a much betterposition. Thank you very much.Q: Mr. Chairman, Just one more. ColonelRoberts, 1 have one case before the SupremeCourt now 1 am in no hurry to start another one.You spoke about the size of the deficit, are youable to recall those, or do you have in print thevarious deficits for different years?ROBERTS: No, I don't have that list before me,but certainly we could find it. The deficits areobviously mounting in proportion to the increasedmoney borrowed by the government from theFederal Reserve System. So it is a variable of anever increasing size, Mr. Chairman.Chairman Yarbrough: Any other questions?Q: Mr. Chairman, Colonel Roberts, would you beproviding stockholding members of the FederalReserve System by name?ROBERTS: I think first, Mr. Chairman, it would55

e helpful to identify the origins of the FederalReserve System itself. Very briefly, without goinginto a lot of historical background, we can quoteColonel Ely Garrison who was a friend andfinancial advisor to President Theodore Rooseveltand President Woodrow Wilson, who wasPresident at the time the Federal Reserve Act waspassed. In his autobiographical book which isentitled, Roosevelt, Wilson and the FederalReserve Act, Garrison wrote, and I quote, "Mr.Paul Warburg was the man who got the FederalReserve Act together after the Aldrich planaroused such nationwide resentment andopposition. The master mind of both plans,"declared Garrison, "was Alfred Rothschild ofLondon," end of quote.Now to identify the real owners of the FederalReserve which is your question sir, . . . Mr.Chairman, I would like to quote from sourcesfrom Switzerland and Saudi Arabia who werequeried on the real owners of the Federal Reserve.Mr. Chairman and sir, we do not mean themanagers of the twelve Federal Reserve bankswho merely run the banks for the owners, the realowners. Nor do we mean the members of theFederal Reserve Board who merely makedecisions in line and in consonance with thedirections they receive from the real owners of theFederal Reserve. We certainly don't mean thosewho sit on the Open Market Committee of theFederal Reserve which we mentioned earlier inthis presentation. We mean the real owners of theFederal Reserve. Mr. Chairman, this has been thebest kept secret of this century. And it is the bestkept secret because of a proviso on passage of theFederal Reserve Act. It was agreed that noinformation would be released on the Class Astockholders of the Federal Reserve. But, a Mr.R.E. McMaster, publisher of a newsletter, TheReaper, asked his Swiss and Saudi Arabiancontacts which banks hold controlling interest inthe Federal Reserve System. This was the answerreceived, and I quote, "Owner number one,Rothschild Banks of London and Berlin; Ownernumber two, Lazard Brothers Banks of Paris;Owner number three, Israel Moses Seif Banks ofItaly; Owner number four, Warburg Bank ofHamburg and Amsterdam; Owner number five,Lehman Brothers Bank of New York; Ownernumber six, Kuhn, Loeb Bank of New York;Owner number seven. Chase Manhattan Bank ofNew York." Mr. Chairman, it is the ChaseManhattan Bank which controls all of the othereleven Federal Reserve Banks. Finally, "Ownernumber eight, Goldman, Sachs Bank of NewYork."Mr. Chairman, sir, there are approximatelythree hundred people, all known to each other andsometimes related to one another, who hold stockor shares in the Federal Reserve System. Theycomprise an interlocking, international bankingcartel of wealth beyond comprehension.Q: You mentioned Class A stockholders. Nowwho would they be? The same bank members?ROBERTS: These are the three hundred, sir, Mr.Chairman. These are the same three hundred thatI mentioned at the end of this presentation whoare Class A stockholders. We are in the process, ofcourse, of seeking to identify these by name andaddress, but you can understand the difficulty ofsuch investigative process. In fact, we are still inthe process of locating the Articles ofIncorporation of the Federal Reserve at the time itwas passed in 1913. Again, we are obviouslyconfronted by a massive wall of silence. So it is adifficult task. But nonetheless, we have madesome breaches in their defense.Q; What are the names of those eight members. 1didn't get a chance to write them down.ROBERTS: Mr. Chairman, sir, the listed names ofthe banks which own the Federal Reserve in theUnited States are in the copy of my presentationleft with your secretary.Q: Mr. Chairman, sir, supposing we had enoughstates to ratify this proposition and we stalled andcurtailed the Federal Reserve Board. Do we havea plan where we could continue business as usual?ROBERTS: Mr. Chairman, the question, ofcourse is a very explicit one and that is that itreally asks are we able to continue operating theeconomy without the Federal Reserve. I wouldpoint out, Mr. Chairman, sir, that the UnitedStates of America operated until 1913 without theservice of the Federal Reserve through theexisting agencies of government which still existand function today. But the real control has beenusurped from these agencies, authorized under theConstitution, and their power has been limited tomerely approving what decisions are made by theowners of the Federal Reserve. So to answer yourquestion, of course we'd continue the economy,but without paying the horrendous interest ratesto the owners of the Federal Reserve. I would56

point out further, Mr. Chairman, that it would beour objective to repudiate the one trillion dollarnational debt because it is not owed to us, it isowed to the Federal Reserve System. Since theFederal Reserve System, Mr. Chairman, is acriminal conspiracy, the ill-gotten gains, thistrillion dollar debt, a lien against all privateproperty in the United States, obviously is acriminal act against the people of the UnitedStates.Chairman Yarbrough: Any further questions? Ifnot Colonel, I believe there has always been aquestion involved in a lot of minds whether or notthe Federal Reserve Board is a government agencyor a private agency. Has there not been a recentcourt case to that effect.ROBERTS: Mr. Chairman and members, theMarch 1983 CRC Bulletin produces in its entiretythe Court decision to which you refer. This is,Lewis v. the United States, Court Case number80-5905, United States Court of Appeals, NineCircuit Court, San Francisco, 19th of April, 1982.The entire text is reprinted so that there would beno question as to the finding, the ruling of theCourt. The Court specifically stated that theFederal Reserve is a private banking monopoly.Chairman Yarbrough: One further question alongthese same lines. Has this been appealed to theSupreme Court?ROBERTS: Mr. Chairman, members, we do nothave any record of appeal. If there is to be anappeal, and possibly there will be, then we'll bringthat out later. I think the finding speaks for itself,and this is really the issue we want to bring out.With your indulgence, Mr. Chairman, I wouldlike to add one more thing to the evidence beforethis body, and that is the Monetary Control Act of1980 which is, of course, an authority passed bythe Congress allegedly placing all economicorganizations under control of the FederalReserve System. First, Mr. Chairman, it brings allU.S. depository institutions under the authority ofthe Federal Reserve System which is, as we havepointed out, an international banking cartel. Two,it expands the definition of collateral for FederalReserve credit and Federal Reserve notes incirculation. This means that any asset the Fed canpurchase on the open market can be used as anasset against such borrowing. The cartel thus, as Ihave pointed out, has a lien against all property inthe United States, because all of the bankinginstitutions and lending institutions under theFederal Reserve today use their collateral asauthority to create money out of thin air. This,then, is the means by which the internationalistshave placed their control over all real estate of theUnited States, and, of course, all individuals whoown private property of any kind.For example, the Feds can now purchase suchcollateral as FHA and VA backed mortgages orcorporate debt obligations. Also, the Fed can nowbail out Chrysler, as it did, and any othercorporation, by buying all of the commercial paperof that corporation. Therefore, the Fed controlsthe American economy and American industrythrough this technique. Also, the Fed can bail outthe Chase Manhattan Bank, City Bank, or anyother bank with the acception of federally backedmortgages from such banks. That is, irresponsiblebank loans, foreign and domestic, as we have seen,through the activity of the Federal Reserve andthe International Monetary Fund. They are ableto bail out bankrupt foreign governments, placingthe burden of repayment for those bad loans uponthe backs of the American taxpayer.Chairman Yarbrough: One further question. Ithink history teaches us when most everygovernment went on paper money, off of a goldstandard or silver standard, got in trouble. Andknowing politicians pretty well, if we eliminatedthe Federal Reserve and gave that authority toCongress of the United States, unless we did go ona gold standard or have something behind themoney to back it up, do you suppose we, in a shorttime, we'd be in worse shape than we are in now?ROBERTS: Mr. Chairman, of course, we arespeaking about violations of the Law, andtherefore, a criminal conspiracy. So it is not anoption of whether or not we will continue with theFederal Reserve. It is a matter of whether we areto enforce the Constitution. The Constitution isnot a constitution of convenience, it is not whatpeople may want to make it from day to day. It isvery specific and, as we quoted in the early part ofthis presentation, Article I, section 8 of theConstitution is very clear on the responsibility ofCongress to control fiscal activity of the UnitedStates through the apparatus established by theCongress. Therefore, the action of returningcontrol of the economy to the American peoplethrough the Congress, as is proper under theConstitution, is a requirement. Either that, or weabolish the Constitution. Now I think it is clear57

that once we are in a position to control our owndestiny by controlling the economy through theexisting agencies now available, voiding and.rescinding the Federal Reserve Act, that we goback to the same system which gave us the mostpowerful and most prosperous nation in the world,the United States of America. America is a freeeconomy and became a free economy because ofthe Revolutionary War, which was not a warmerely against the tax on tea imports, but rather itwas a war against Thread Needle Street, theBritish debit money system imposed upon thecolonists in violation of their free will. That wasthe real reason for the Revolutionary War.Q: Could you give us a little broader base inparticular on the Monetary Deregulation Act of1980?ROBERTS: Mr. Chairman, sir, the MonetaryControl Act of 1980 is available in your referencelibrary, I am sure. Its purpose was to bringtogether under the authority, alleged authority, ofthe Federal Reserve System, all lending agenciesof the United States, as well as the banks whichmust operate in conformity with ChaseManhattan Bank guidelines. This Act, in fact, wasresponsible for a very powerful, silent revolutionin the economy, and in the banking world of theUnited States. It did prepare and accomplished theconsolidation or centralization of all economicfactors in the United States under control of theFederal Reserve itself. The Federal Reserve,therefore, controls not only the twelve FederalReserve Banks, but also all of the lendinginstitutions in the United States. As we mentionedearlier, the mortgages held by these lendingagencies are part and parcel of the credit controlsupon which the Federal Reserve now exercises itsalleged authority to create money out of thin air.It is a real lien against all private property in theUnited States, as well as Federal property, I mightadd.Chairman Yarbrough: Any other questions? Ifnot, I have one more. You say we can't get thestockholders in the Federal Reserve. Now if it is aFederal institution, as we have been lead to believeover these years, under the Freedom ofInformation Act, which was passed at a later date,should not that make all information ofstockholders and such available to any person inthe United States who wanted it?ROBERTS: Mr. Chairman, that is precisely whatwe are doing. Several months ago I presented arequest to several Congressmen in Washingtonquoting the Freedom of Information Act andasking, number one, for a copy of the Articles ofIncorporation of the Federal Reserve System. TheArticles of Incorporation obviously would have tolist the owners at that point. It would notnecessarily, however, have to list the foreignowners. So we are working in both directions.That is, we want to secure a copy of the Articles ofincorporation to identify the domestic owners, butat the same time we are seeking further expansionof the identification of the owners of these eightbanks, and the three hundred stockholders whoactually own the Federal Reserve System in theUnited States. So, yes, we are working in thisdirection. As a matter of fact, it would be myassumption, sir, that the State of Idaho, in itshighest sovereign capacity, would have a higherauthority to bring pressure upon yourrepresentatives in Congress than does theCommittee to Restore the Constitution. Thiswould be an excellent avenue of investigation.Chairman Yarbrough: Any further questions?Q: What about bank deposits insured by a Federalagency?ROBERTS: Mr. Chairman, sir. Since all banks arecontrolled or owned by the Federal ReserveSystem obviously it would be very risky to permitany independent agency of government to bewithout supervision of the Federal Reserve,because then the entire System would be at risk.So obviously all of these agencies, including theinsurance procedure which you noted are part ofthe Fed control mechanism which we haveoutlined here today.Chairman Yarbrough: 1 have a question. 1understand the big banks are taking money toMexico, Brazil, and all the developing nations. Arethey responsible in case of default, or is the UnitedStates government?ROBERTS: Mr. Chairman, under the provisionsof the Monetary Control Act, as we pointed out,all of the foreign debts granted by the variousbanks are all based upon the ability of theAmerican taxpayer to pay. All of these debts,under this alleged authority, are subject tomonetization. That is, the tremendous Mexicandebt, which you pointed out, can be monetizedand declaring that it now is a responsibility of the58

Federal government to collect. Therefore, thetaxpayers become subject to paying not only theinterest on these horrendous debts, but also theprincipal. This is one of the aspects of the ControlAct of 1980 which is so ominous. TheInternational Monetary Fund is exercising thatalleged authority to place the burden ofrepayment, not on the resources of the hostcompany, Mexico, in this case, but on the backs ofthe American taxpayers.Chairman Yarbrough: Thank you. Any furtherquestions? If not, Colonel, we thank you verymuch.ROBERTS: Thank you, sir, it's an honor.STATE OF IDAHOMEMORIAL TO REPEALFEDERAL RESERVE ACTLEGISLATURE OF THE STATE OF IDAHOFORTY-SEVENTH LEGISLATUREFIRST REGULAR SESSION—1983IN THE HOUSE OF REPRESENTATIVESHOUSE JOINT MEMORIAL NO. 3BY STATE AFFAIRS COMMITTEEA JOINT MEMORIALTo the President of the United States, thePresident of the United States Senate, theSpeaker of the House of Representatives of theUnited States in Congress assembled, and to theCongressional Delegation representing theState of Idaho in the Congress of the UnitedStates.We, your Memorialists, the House ofRepresentatives and the Senate of the State ofIdaho assembled in the First Regular Session ofthe Forty-seventh Idaho Legislature, do herebyrespectfully represent that:WHEREAS, the Constitution of the UnitedStates vests in the Congress of the United Statesthe supreme power "to coin money, regulate thevalue thereof and of foreign coin, and fix thestandard of weights and measures;" andWHEREAS, Congress passed the FederalReserve Act in 1913 and thereby abdicated itsduty to fix a constant lawful value for UnitedStates money; andWHEREAS, the national debt in 1913 was lessthan two billion dollars while the national debt in1983 exceeds one trillion dollars; andWHEREAS, the people of Idaho are sufferingfrom the effects of high unemployment and therecession, which has been caused principally byhigh interest rates; andWHEREAS, the control of interest rates by theBoard of Governors of the Federal Reserve Boardhas led the Nation down a course towardeconomic calamity; andWHEREAS, section 19, of the Federal ReserveAct specifically precludes the State of Idaho fromeffectively legislating or enacting any lawfulceiling for interest rates charged by the FederalReserve, thereby immunizing banks and bankersfrom any threat of civil or criminal liability forinterest rates charged; andWHEREAS, the United States Governmentowns no stock in the Federal Reserve System, andthe Federal Reserve, as such, is not a governmentagency, and is, in fact, a monopoly entirelyindependent of U.S. Government control absentdirect legislative action by the Congress.NOW, THEREFORE, BE IT RESOLVED bythe members of the First Regular Session of theForty-seventh Idaho Legislature, the House ofRepresentatives and the Senate concurringtherein, that the United States Congress enactlegislation providing for the immediate repeal ofthe Federal Reserve Act and place back in theCongress the power to regulate the value ofUnited States money.BE IT FURTHER RESOLVED that the ChiefClerk of the House of Representatives be, and sheis hereby authorized and directed to forwardcopies of this Memorial to the President of theUnited States, the President of the United StatesSenate, the Speaker of the House ofRepresentatives of the United States in Congressassembled and the congressional delegationrepresenting the State of Idaho in the Congress ofthe United States.59

FACT SHEET ON THE MONETARY CONTROL ACT, PUBLIC LAW 96-221,Prepared by Dr. Ron Paul, Member of Congress, 23 March 1983On March 31, 1980 President Carter signed theDepository Institutions Deregulation andMonetary Control Act, Public Law 96-221. TheLaw consists of nine titles, most of which areunobjectionable. But the first title is not, yet it isthe first title that went largely unexamined — andeven unnoticed — when the House and the Senatedebated the final version of the Act. That titleprovides that:1. The Federal Reserve is given control over alldepository institutions, not just its own members.Credit unions, savings and loans, savings banks,and nonmember commercial banks are chafingunder the burdens imposed by the MonetaryControl Act. The Federal Reserve's direct controlover financial institutions expanded fromcoverage of about 3000 institutions to about14,000.2. Reserve requirements are to be lowered overseveral years. This means that banks will be able tocreate more money out of thin air, aided andabetted by the Federal Reserve. Also, the FederalReserve can now lower reserve requirements tozero.3. The Federal Reserve can print unlimitedquantities of Federal Reserve notes and store themin their vaults. All collateral requirements for"vault cash" were abolished. Collateral is requiredonly when such notes are actually issued by theFederal Reserve banks.4. The Federal Reserve can issue more papermoney because it can now use virtually any of itsassets as collateral for circulating notes. Suchassets include debts issued by sewer commissions,municipalities, and irrigation districts, forexample.5. The Federal Reserve can monetize foreigndebt by buying "obligations of, or fully guaranteedas to principal and interest by, a foreigngovernment or agency thereof."6. The Federal Reserve can further inflate byusing this foreign debt as collateral for issuingFederal Reserve notes. In fact the Fed has donethis on at least 139 occasions, from April 1981 toJanuary 1983, as you will see from the tables atthe end of this paper.Because of the vast inflationary and bailoutpotential of section 105(b) (2) of Title 1 of PublicLaw 96-221,1 have introduced a bill, H.R. 876, torepeal that section.Under that section, the Federal Reserve is givenblanket authority to purchase the debt of anysovereign debtor. There is no language, either inthe Act itself or in its scant legislative history, thatrestricts the number of governments from whichthe Federal Reserve can purchase debt.Further, there is no restrictive language in theAct itself or in its virtually non-existent legislativehistory that restricts the Federal Reserve in whatit may use to purchase the debt of foreigngovernments. The Federal Reserve has alwaysmaintained that (1) it would never purchase thedebt of Third World nations and (2) that it wouldpurchase debt only with the currencies ofcountries which it already holds as a result of itsforeign exchange operations. Such a position isirrelevant: The Federal Reserve may have the bestof intentions, but intentions and legal authorityare two quite different things. It is the granting ofthis power that must be rescinded, and if theFederal Reserve really does have good intentions,it ought to support H.R. 876, for the bill wouldsimply make the law conform to the Fed's goodintentions.The House Subcommittee on DomesticMonetary Policy is circulating a memorandum onthe Monetary Control Act (MCA) that is seriouslymisleading.it says, for example, that ". . . section 105(b) (2). . . allows the Federal Reserve to purchase shortterm securities of a foreign government." Thestatement is true, but misleading. The MCA doesallow the Fed to purchase short-term securities,and also medium and long-term securities. Theactual language of section 105(b) (2) permits theFederal Reserve to buy and sell, at home orabroad, "obligations of or fully guaranteed as toprincipal and interest by, a foreign government oragency thereof."The MCA says nothing about short-term orlong-term securities. The Fed is simply empoweredto purchase all and any obligations of a foreign60

government or agency without regard to theirmaturities. The Subcommittee's statement isincomplete on several counts: (1) All maturities,not merely short-term securities, are involved;(2) agencies of foreign governments, as well as thegovernments themselves, are involved; (3)obligations guaranteed by foreign governments ortheir agencies are involved. While the Fed hasrepeatedly rolled over the short-term securities ithas purchased, the purchase of long-termsecurities would signal an actual attempt to usesection 105(b) as a device to bailout both foreigngovernments and overextended U.S. banks.Second, the Subcommittee memorandum saysthat section 105(b) (2) was "Inserted during theHouse-Senate Conference with unanimousconsent upon the motion of Chairman Proxmire. . ." But the Senator's office has repeatedly deniedthat the provision was inserted on the Senator'smotion. In fact, according to the Senator's staff, itwas the House Republican members of theConference Committee who offered the motion onbehalf of the Federal Reserve. The HouseCommittee, I was astounded to learn, has norecords of the Conference proceedings.Third, the memorandum states that ". . . thecontroversy over this section has been derivedfrom great misunderstanding and mischievious(sic) intent." I do not believe that I havemisunderstood the provision — it is really quiteclear — and my only intent is to limit the broadpower conferred on the Fed by this section of thelaw.Fourth, the memorandum reads: "Contrary tosome beliefs, this provision was not put in byFederal Reserve Chairman Volcker since onlyRepresentatives and Senators can be conferees."Whose beliefs are these? Chairman Volcker didrequest this provision in his testimony before theSenate Banking Committee in September 1979,and, as noted above, the Representatives whoallegedly offered the motion at the ConferenceCommittee were acting on behalf of the FederalReserve.Fifth, and most important, the memorandumshifts the debate: "There is no intention to permitthe United States Government, through theactions of its Federal Reserve System, to subsidizeany country, any central bank, or buy the debt ofany financially troubled nation."The central issue is not one of intent orintentions, despite the memorandum's interest inthese things. The matter is one of authorityconferred by Congress in the Act itself, and thatauthority is unlimited. Nowhere does the Act saythat subsidies to any country or bank are illegal. Itdoes say that the Fed may purchase the debt ofany country, or any agency of any country, withany acceptable medium of exchange. The entire"legislative history" of this provision is as follows:. . . the Federal Reserve Act alreadypermits us to hold foreign bank deposits andbills of exchange; it would be helpful to usoperationally if short-term foreigngovernment securities could be added to ourauthorized holdings — an omission at thetime of the original Federal Reserve Actwhen such securities were not widelyavailable. (Paul Volcker, September 26,1979, Testimony before the Senate BankingCommittee.)This paragraph is the first mention of allowingthe Fed to use foreign government assets ascollateral, and only 19 words of the paragraphrefer to the Fed's ability to purchase foreigngovernment securities. There were no questionsfrom the Senators on the issue, and the provisionrequested by Chairman Volcker was not added tothe Senate bill. Neither did it appear in the Housebill; it was added to the Conference Report, andthe House had to adopt a special rule forconsideration of the Conference Report, since theReport contained new material and the confereesexceeded their authority.The next mention of the provision allowing theFed to purchase the securities of foreigngovernments and use them as collateral forFederal Reserve notes occurred on March 27,1980. In his explanation of the ConferenceReport, Senator Proxmire said:It (the Monetary Control Act) alsoauthorizes the Federal Reserve to purchaseand sell obligations issued by foreigngovernments.Under existing statutory authority, theFederal Reserve, in the course of its normalactivities in the foreign exchange marketsfrom time to time acquires balances inforeign currencies. Under presentarrangements there is no convenient way in61

which foreign currency balances held by theFed can be invested to earn interest.The Monetary Control Act would amendsection 14 of the Federal Reserve Act toprovide a vehicle whereby such foreigncurrency holdings could be invested inobligations of foreign governments andthereby earn interest. This authority wouldbe used only to purchase such obligationswith foreign currencies balances acquired bythe Federal Reserve in the normal course ofbusiness.(By this statement, the Congress was led tobelieve that this provision was needed so that theFed could conveniently earn interest on its foreignexchange holdings. But the Fed could then, andnow is, earning interest on these holdings bydepositing them in interest-bearing bank accounts.The excuse given for this provision - to earninterest - is misleading. The Fed did and does earninterest on the foreign currencies it holds withoutbuying foreign debt.)There is no mention of section 105(b) (2) in theConference Report on H.R. 4986.Those three paragraphs are the entire"legislative history" of this provision. Nothingappears in any House document; no testimonywas taken on the provision; and no mention of theprovision was made during the House debate onthe Conference Report. It is this scant "legislativehistory" that, we are told, overrides the explicitlanguage of the Act itself. But intentions are notlaw, and the intentions of the legislature are usefulonly when the law is ambiguous. Unfortunately,there is nothing ambiguous about section 105(b)(2) of the Monetary Control Act.On June 25, 1981 Chairman Volcker testifiedbefore the House Banking Committee:Rep. Paul:"I am concerned about theFed's legal ability to do it (useforeign debt as collateral)."Chrm. Volcker: "I think we can use it ascollateral, that is correct asmany other assets we can useas collateral."Rep. Paul:"A Brazilian bond or a Polishbond, you could use this ascollateral?"Chrm. Volcker: "We only do this when weacquire a balance in theordinary course of our foreignexchange operations. Wedon't have any foreignexchange operations withBrazil, so the issue does notarise in that case, and wewould not use the authority tojust go out and buy."Rep. Paul:"I understand, you would notuse it. I am still back to thelong-term legal concernwhether you could or couldnot if you decided to."Chrm. Volcker: "I guess in connection withthe legal concern there's myrecollection that there isnothing in that provision thatwould theoretically stop itexcept the legislative historywhich is quite clear. Whetherthere is any other authority inthe Federal Reserve Act thatwould authorize us to simplybuy securities of foreigncountries at random orwhatever, and I'm not quitesure under which generalauthority that approach couldcome, but that provision itselfdoes not constrain us."(Emphasis added.)The law is clear, and the legislative history islegally irrelevant. The question is not what thepresent Governors of the Fed intend to do, butwhat they and future Governors are empoweredto do. We might not always have such trustworthymen at the Fed as we have now.Finally, the memorandum states that "Thelegislation nowhere makes Fed membershipmandatory." That is true, but incomplete. Whatthe MCA does is make Fed membershipsuperfluous, for it amends the original FederalReserve Act by striking out the phrase " 'memberbank' each place it appears therein and inserting inlieu there 'depository institution.' "In conclusion, the memorandum offers noevidence to contradict the statement that the62

Monetary Control Act of 1980 empowered theFederal Reserve to purchase the obligations offoreign governments, or obligations fullyguaranteed by foreign governments, and use thoseobligations as collateral for Federal Reserve notes.As a matter of fact, the Fed has done so on at least139 different occasions. Below is a list provided bythe Federal Reserve:FOREIGN GOVERNMENT OBLIGATIONS PURCHASED BY FEDERAL RESERVE BANKSAND USED AS COLLATERAL TO ISSUE FEDERAL RESERVE NOTES (1981-1983)(Federal Reserve Bank Principal identified by asterisks)April 21, 1981April 28, 1981May 7,1981May 13,1981June 9,1981June 23,1981July 1,1981July 13, 1981October* 5,1981October 7, 1981November 17,1981November 24, 1981November 30, 1981December 2,1981December 4,1981December 8,1981December 15, 1981December 18, 1981December 22, 1981December 24,1981December 29,1981January 6,1982January 19,1982March* 5,1982March* 8,1982March* 9,1982March* 10, 1982April* 6, 1982April 7, 1982April** 7,1982April 13, 1982April 14,1982April** 14,1982July 6,1982July* 7,1982September** 15,1982October** 6,1982October 11, 1982October 13, 1982October 20,1982October 28,1982$ 11.6 million$ 17.1 million$ 36.6 million$ 96.7 million$ 44.8 million$ 1.0 million$ 18.1 million$ 49.0 million$ 8.0 million$ 7.0 million$ 51.0 million$ 20.0 million$ 57.0 million$ 64.0 million$ 36.0 million$ 5.0 million$ 8.0 million$ 15.0 million$ 71.0 million$102.0 million$ 73.0 million$ 88.0 million$ 8.0 million$ 86.0 million$188.0 million$216.0 million$235.0 million$246.0 million$ 93.0 million$183.0 million$ 25.0 million$ 27.0 million$ 51.0 million$ 43.0 million$ 27.0 million$ 17.0 million$121.0 million$ 40.0 million$ 69.0 million$ 50.0 million$ 18.0 millionApril 24, 1981May 5,1981May 12,1981May 27,1981June 10,1981June 30, 1981July 10,1981July 14,1981October* 6, 1981October* 7, 1981November 18,1981November 27, 1981December 1, 1981December 3,1981December 7, 1981December 9,1981December 16, 1981December 21,1981December 23,1981December 28,1981December 30, 1981January 13, 1982March* 4,1982March 8, 1982March 9, 1982March 10, 1982March* 31,1982April** 6, 1982April* 7, 1982April** 12,1982April* 13,1982April* 14, 1982June 30,1982July 7, 1982July 8,1982September** 29,1982October 8,1982October 12,1982October 14,1982October 21,1982October 29,1982$ 38.4 million$ 18.0 million$ 64.3 million$ 9.3 million$109.0 million$ 27.0 million$ 48.8 million$ 76.4 million$106.0 million$196.0 million$ 45.0 million$ 31.0 million$ 82.0 million$ 28.0 million$ 31.0 million$ 55.0 million$ 45.0 million$104.0 million$106.0 million$121.0 million$ 22.0 million$ 31.0 million$125.0 million$ 9.0 million$ 77.0 million$ 90.0 million$ 64.0 million$ 76.0 million$239.0 million$ 31.0 million$ 42.0 million$ 1.0 million$ 39.0 million$ 81.0 million$ 7.0 million$ 11.0 million$ 40.0 million$ 52.0 million$ 39.0 million$ 10.0 million$ 14.0 million*Richmond Federal Reserve Bank **Kansas City Federal Reserve Bank ***Philadelphia Federal ReserveBank

FOREIGN GOVERNMENT OBLIGATIONS PURCHASED BY FEDERAL RESERVE BANKSAND USED AS COLLATERAL TO ISSUE FEDERAL RESERVE NOTES (1981-1983)(Federal Reserve Bank Principal identified by asterisks)November** 1,1982November 3, 1982November 5, 1982November 9,1982November** 10,1982November** 11,1982November**, 15, 1982November** 16,1982November** 18,1982November** 23,1982November** 25, 1982November** 29,1982December** 2,1982December** 6, 1982December** 8, 1982December** 9,1982December** 13,1982December** 15,1982December** 17,1982December** 22,1982December** 23, 1982December** 27,1982December*** 28,1982December*** 29,1982December*** 30, 1982January** 3, 1983January** 6,1983January** 10,1983January** 12,1983$ 30.0 million$ 66.0 million$ 91.0 million$ 75.0 million$ 60.0 million$ 60.0 million$ 47.0 million$ 2.0 million$ 51.0 million$ 23.0 million$107.0 million$ 3.0 million$ 82.0 million$ 75.0 million$191.0 million$108.0 million$ 77.0 million$ 10.0 million$ 44.0 million$153.0 million$133.0 million$ 87.0 million$ 36.0 million$ 57.0 million$ 12.0 million$ 74.0 million$ 49.0 million$ 57.0 million$ 46.0 millionNovember 2, 1982November 4,1982November 8, 1982November 9, 1982November 10, 1982November 11, 1982November 15, 1982November** 16,1982November** 19, 1982November** 24, 1982November** 26,1982December** 1,1982December** 3,1982December** 7, 1982December** 8, 1982December** 10,1982December** 14,1982December** 16,1982December** 21,1982December*** 22, 1982December** 24, 1982December** 28,1982December** 29,1982December** 30,1982December** 31, 1982January** 5, 1983January** 7, 1983January** 11,1983$ 25.0 million$ 38.0 million$ 42.0 million$ 15.0 million$ 18.0 million$ 18.0 million$ 25.0 million$ 5.0 million$ 17.0 million$107.0 million$ 82.0 million$ 89.0 million$ 13.0 million$213.0 million$ 30.0 million$ 14.0 million$ 45.0 million$ 66.0 million$ 85.0 million$ 21.0 million$134.0 million$187.0 million$205.0 million$143.0 million$107.0 million$ 4.0 million$ 96.0 million$ 61.0 million* Richmond Federal Reserve Bank **KansasCity Federal Reserve Bank ***Philadelphia Federal ReserveBank64

FIVE"Under the Federal Reserve Act panics arescientifically created; the present (1920) is thefirst scientifically created one, worked out aswe figure a mathematical problem."CONGRESSMAN CHARLES LINDBURGHOREGON FEDERAL RESERVE HEARINGNO PROBLEM, OTHER THAN NUCLEAR WAR, OUTWEIGHS THIS PROBLEM,SAYS WASHINGTON STATE SENATOR JACK METCALFAn act of war was perpetrated against UnitedStates citizens and their descendants on 23December 1913. On this day of infamy a privatebanking cartel affected passage of the FederalReserve Act, usurped the government, andassumed control of the American destiny, but,Americans don't have to take it anymore.The battle to restore and defend money andproperty of U.S. citizens has already begun. Overtwenty-five sovereign States have challenged theconstitutionality of the Federal Reserve Act.Several State legislatures have memorialized thePresident and Congress to repeal it, as they areauthorized to do under Article 30 of the Act.Some States propose that their Attorney Generalfile suit to force Federal Reserve Banks to disgorgeillicit interest paid by tax-paying victims of thesystem. Reparation to citizens injured by FederalReserve policies is under consideration.Authority, indeed, the requirement for Stateaction to protect the interests of the people, iscontained in the Constitution, the 'Law of theLand.'Concept of 'Principal vs Agent' is central to thestruggle. The State is the Principal under theConstitution, a contract between sovereign States.Executive, Legislative, and Judicial departmentsof the Federal government are, therefore, agenciesof the State.Thirteen original nation-states created theFederal government by the first three articles ofthe Constitution. Each succeeding State enteredthe Union of States on an equal footing with everyother State. Each State is charged to defend andpreserve freedoms of person and propertyguaranteed to their people by the Constitution.Superior to its creature, the State isconstitutionally bound to correct, by action at itshighest sovereign capacity, violations of theConstitution by its Agents, and to providecriminal sanctions for transgressors.Elected State officials, representing theirconstituencies and responsible to them, arerequired to take whatever action is necessary toenforce provisions of the Constitution within theborders of the State.The people, from whom flow all politicalpowers, are responsible for instructing theirrepresentatives to confine the functions ofgovernment to limitations defined in Articles ofthe Constitution of the United States.Correctly claiming that the Federal Reserve Actviolates Article 1, section 8 of the Constitution,which authorizes only Congress to 'borrow moneyon the credit of the United States - and to coinmoney and regulate the value thereof,' irateOregon citizens requested public hearings on the65

Fed. Control of the American economy, anddominion over their lives and fortunes should berestored to the people where it rightfully belongs,they charge.Congress had no sanction from the people totransfer these vast powers to a consortium ofinternational bankers. The people, therefore, callupon their State government to release them fromthe Federal Reserve System which enriches itsclass 'A' stockholders and pauperizes theAmerican taxpayer.Oregon Senate Joint Memorial #12 urgingCongress to repeal the Federal Reserve Act,initiated by Jane Button, Treasurer, ColumbiaCounty Chapter, Committee to Restore theConstitution, is an example of the burgeoningnational campaign.Spilling into hallways, an overflow crowdobserved members of the Oregon SenateCommittee on Commerce, Banking and PublicFinance, Senator Joyce Cohen, Chairman, giveattentive consideration to testimony supportingSJM #12. Twenty individuals requested time tospeak on the measure, including ArchibaldRoberts, Director, Committee to Restore theConstitution, Colorado, and Senator Jack Metcalf,Washington State Legislature.Following is a transcript from a live taperecording of Senator Metcalf's address, I June1983, State Capitol Building, Salem, Oregon,urging State lawmakers to free their people fromthe grip of a debit money system.State Representative Paul Hanneman, who,with Senator Charles Hanlon, sponsored SenateJoint Memorial #12, calling upon Congress torepeal the Federal Reserve Act, introduced theproposal.REPRESENTATIVE HANNEMANMadame Chair and members of the committee,I am Paul Hanneman, House District Three,representing portions of Washington, Yamhill,Polk, Lincoln and Tillamook counties. SenatorHanlon and I did co-sponsor Senate JointMemorial #12 at the request of a number of peoplewho approached us. I am pleased today that somany people are here, I think essentially insupport of the memorial and it did occur to us thatthe proposal had a great deal more support than Ioriginally thought it did.I am pleased to be a sponsor on it for yourdiscussion and consideration for passage to theSenate floor. The following witnesses will indicateto you how many states have already passed asimilar Memorial with, I think nearly or exactlyidentical language, to the one that we have here inOregon.For the record, I support Senate Joint Memorial#12. I will take no further time away, fromespecially those who have come from out of state,and the many people I see in the room who cameseveral hours traveling distance. I appreciate theopportunity to say hello in support of thisMemorial.SENATOR METCALFMembers of the Oregon Senate it is a realpleasure and an honor to be here. I bring yougreetings from the Washington State Senate.There was a delegation from the OregonLegislature that came up to visit us during thesession. I might say that we, just last Wednesday,adjourned sine die. Hopefully we will not be backin session in 1983.Just one personal note, I have four daughtersand the youngest, the number four daughter,graduated from Winfield College at McMinville,Oregon. We came down several times, of course,and I'm quite familiar in driving through Oregon. Iwas reminded as we drove down this morningwhat a beautiful, fertile land this is. Our ancestorshad to come a long way west to get here. We inWashington and Oregon are so lucky to live in thisspecially favored corner of the nation.Our country is a favored land. Look at what wehave in America. We have a benevolent selfgovernment,natural resources, investment capital,skilled labor, excellent transportation system.Theoretically with all this, there is no limit to thewell being of our people. That's theoretically. Letus view the real world in recent years. We haveraging double-digit inflation, or we did have, thatrobs the elderly, and it pauperizes the poor. Itsteals the sustenance of labor and locks smallbusiness into a vise on constant wage-price spiral.To curb inflation, this system prescribes highinterest rates that have been up to over twentypercent. That can only be called usurious rates.The high interest rates destroy jobs. It bankruptssmall business and farmers. It devastates thehousing market. And you all know the effect on66

eal estate, which is dependent, of course, onhousing. The counties in Washington State had,and still have, thirty to forty percentunemployment rates.What is going wrong between what should beand what really is in America? Something isdrastically wrong. Can we isolate the cancer that isgnawing at the vitals of this nation? Can we reallyfind out what it is? And the answer is-yes we can.Small business people know. Labor knows in adeep instinctive way. A growing awarenesspervades America. A condition that there issomething wrong with our money. There issomething drastically and tragically wrong withthis money system. That somehow, someone hasfound a way to take terrible economic advantageof us by manipulation of our money system. Oursystem forces a trade-off between either raginginflation or high interest rates that bring highunemployment and business stagnation.I was thirty years a teacher in Washington Stateand I always looked for-I was a history teacher forthe last half of the time-I always looked for wordsof wisdom from the past and I would just like tobring to you what Benjamin Franklin said thatrelates directly to what we are talking about today,the Federal Reserve Money System and thisMemorial which urges its abolition. BenjaminFranklin said, "The refusal of King George tooperate on an honest, colonial money systemwhich freed the ordinary man from the clutches ofthe manipulators was probably the prime cause ofthe Revolution." The same cancer that is gnawingat the vitals of America today is probably theprime cause of the Revolutionary War. How didwe get where we are today? Well the answer isspecialinterest legislation. A special advantagewas granted by government. It happened, itstarted, in Congress in 1913. Historically a specialinterest came to Congress in that year and gotspecial interest legislation passed. Now we are allfamiliar in this setting with special interest. It is thejob of the legislature to balance the various needsof the special interest against the very importantbest interests of the people. And that's our job. Iam here to tell you that Congress failed in that job.We are talking about special interests when we aretalking about the Federal Reserve. This issomething that most people really don't realize.We are talking about a private special interest. Thesuper big eastern money interest. Now, I'm aconservative Republican, and I feel more like aliberal Democrat when I talk about the evils of thesuper big eastern money interests. But it is still afact and I think we should say it.The Federal Reserve is not a governmentagency as such. It is a federally chartered, privatebanking consortium. We have put absolutecontrol of the nation's money system in privatehands in America today. "How You Pack It" is anadvertisement from the San Francisco FederalReserve Bank that says, "We are not a part of thegovernment, we are the banks' bank." And if youlook at it you'll see that. That's their statement.This private, this Federal Reserve, does notfunction in the best interests of the people. It wasnot really designed to. It, like many specialinterests that come to the legislature, had a specialposition in mind. Well, they made many promisesin 1913. They said among them, the three criticalones. End the boom and bust cycle. The FederalReserve System would end the boom and bustcycle. It would stabilize the currency and stabilizebank reserves, and would end farm foreclosures.Just look at those three. There was one week nottoo long ago when there were three thousand farmforeclosures in this nation-in one week. Theycertainly have failed in that count. The scandalousinflation rates and interest rates, to stabilize thecurrency, we have seen a total failure there.The boom and bust cycle is worse than ever. Wehave back to back recessions now, even notcounting the terrible recession in 1920 and theGreat Depression of the 30's. Judged by thepromises made, by any objective standard, or I liketo say when weighed in the balance of history, theFederal Reserve System is at best a colossalfailure. You might say, "Okay, Metcalf, that'sgenerally, but specifically what's wrong?" Thereare three things wrong. One is Congressionaloverspending. I am not going to speak on thattoday; it's another subject. The second is theFractional Reserve Banking System which is apart of the Federal Reserve System. And the thirdthing is the Federal Reserve System itself. Andthat's what I am going to dwell on today.There has been a 200 year debate in Americaand here again the history teacher, I guess shows,as to who should issue this nation's money. Whatdid the founders and the early presidents say onthis issue? And I have got some quotes here, andthis by the way is also in your packet, this list ofquotations. James Madison, our fourth President,the man who was called the Father of theConstitution, he said, "History records that the67

money changers have used every form of abuse,intrigue, deceit and violent means possible tomaintain their control over governments bycontrolling the money and its issuance."Thomas Jefferson didn't like the big banks. Ireally like his quote. Pretty strong language. Hesaid, "I believe that banking institutions are moredangerous to our liberties than standing armies.The issuing power should be taken from the banksand restored to the government to whom itproperly belongs."If you remember, President Andrew Jacksonvetoed the Bank Bill of 1836. They couldn'toverride the veto and it wiped out the Bank Bill inAmerica. President Jackson said, "If Congress hasthe right to issue paper money it was given tothem to be used by themselves and not to bedelegated to individuals or corporations."Abraham Lincoln said, "The governmentshould create, issue and circulate all the moneyand currency needed."In other words, the founders and earlypresidents said, "Don't let the banks issue themoney." Well, why not? What's the difference?Well the difference is specifically, when the banksissue the nation's money, they charge us intereston it. The people and the businesses of Americaare paying interest on every Federal Reservedollar in circulation-five hundred billions todaybecausethe government doesn't issue the money.People say, "Wait a minute, what do you mean?The Government doesn't issue the money?" Lookat the bills that we use. Take them out and look atthem. They don't say United States Notes. Theysay Federal Reserve Note. Now I have here fivedifferent kinds of money, you can't see from adistance, but they look almost exactly the same, atleast these three. This one is a Federal ReserveNote. This one is a silver certificate. This one is aUnited States Note. And I have also a coin. Andall these are entirely different kinds of money. Ihappen to have a Susan B. Anthony Dollar. Andthe checkbook money that we have. Sincecheckbook money is denominated in FederalReserve Notes, it is really the same kind of moneyas the Federal Reserve Note. But suffice it to saythat today there are $125 billion in circulation inFederal Reserve Notes in America. If that $125billion were in United States Notes or silvercertificates, as an example, if that change weremade, the national debt could be reduced $125billion and the interest saved per year would beabout $10 billion a year, by that simple change.Now $10 billion doesn't seem to mean too muchwhen you're talking about deficits of $150 billion.But like the old saying goes, "A billion here, abillion there, pretty soon that adds up to realmoney." Actually in ten years that amount, justthe difference in the currency would save $100billion for this government and I think that issignificant.By the way, I made the statement we're payinginterest, the people and businesses of America arepaying interest to the banks on every FederalReserve dollar in America. If you have questions Iwould be real happy to run through a very briefscenario and explain that and make it very clearhow that operates. I don't have time for my twohour speech in ten or fifteen minutes. So what Iam going to do to summarize is say that there istoo much power placed in the hands of any specialinterests group. Even if this were just totally theUnited States Government, I would beuncomfortable with that much power placed inthose hands. They would tend to look out for theirown interests over the people's interest, and that isthe proposition that I am submitting to you today.And that is one of the great problems that we havein America. People think that the business cycle,you know the boom and bust cycle, is a naturalcycle. People sort of feel that, like the tide, it risesand falls, by natural laws. That isn't true at all. It isproven untrue by empirical evidence today. Veryinteresting. Congressman Lindburgh was amember of Congress in 1913 at the time of thepassage of the Federal Reserve Act. He was aviolent opponent of it. He was father of theaviator, and he, Congressman Lindburgh, said ofthe inflation or the recession-they called it panicthen-the recession of 1920, "Under the FederalReserve Act panics are now scientifically created.The present 1920 one is the first scientificallycreated one, worked out as we figure amathematical problem." It's not a natural law atall.We had a hearing of the National Conference ofState Legislatures, I am sure you are aware of it, inWashington, D.C. in December, and I was askedto line up testimony on this issue, the FederalReserve. Our report, by the way, is in your packetthereport from that National Conference of StateLegislatures meeting-and I think it makes veryinteresting reading. Milton Friedman could not bethere, he sent testimony. I don't know that this isin your packet, but I would be happy to send you68

his total testimony. But, I want to read you justone quote from the first page. As you know,Milton Friedman has gone back and looked at theempirical evidence, has studied all the statistics,and here is what he says. "From 1929 to 1933 theFed permitted or forced the quantity of money todecline by one-third, thereby converted a seriousrecession into a major depression. In the processforcing the failure or closing of some five thousandbanks, one-third of the number in existence in1929." In other words the business cycle did nothappen by accident, it's caused.Without going into a lot of detail, I'd like to justcomment on an amendment to the FederalReserve Act-The Monetary Control Act of 1980,passed in 1980. Many people are deeply concernedabout the ramifications of that Act. CongressmanRon Paul was very much concerned about it andCongressman Paul did some homework after thepassage of The Monetary Control Act of 1980 andhe found that one of the things, the powersgranted to the Fed that year, was the power tomonetize foreign debt. That means to use theassets of America to buy up foreign debts. And,you might say, "Why? What is going on there?"Just a couple of quotes, if you will permit me toread, from Congressman Ron Paul's newsletter.He said,In 1980, radical changes were made inthe Federal Reserve Act, the MonetaryControl Act of 1980, allowing a massiveincrease in the power of the Federal ReserveSystem. Among those powers is theauthority of the Fed to use the debt offoreign nations as collateral for the printingof Federal Reserve notes. That's what ishappening in America. This is of the greatestsignificance in light of the $850 billion debtowed to the West by Third World andCommunist nations. To begin with theforeign bonds of the Fed purchases arebought with paper money backed with ourown debt. Then we turn around and use thenewly purchased foreign bonds as collateralto print up more Federal Reserve notes. Thisis responsible for the dramatic increase in themoney supply recently. This system ofmoney creation is unbelievable to rationalhuman beings. It will surely lead to adisastrous end to the American dollar.Congressman Paul published a letter in June of1982 wherein he delineated $3.3 billion of foreign69debt that had been monetized up until that time.After he published the letter, six months or solater, I had a telephone conversation with him andI said, "Congressman we really need you to updatethat letter. Tell us what further foreignmonetizations have taken place." He told mesomething that was unbelievable, he said, "I am amember of the House Banking and CurrencyCommittee and the Fed will not answer myquestions." This went on for months and months.He couldn't get the information as to how the Fedwas using the American money system and,essentially, saddling the American taxpayers withforeign debts. He has gotten the information nowand now it is up to about $9 billion.Just one further quote from CongressmanPaul's newsletter.Mexico owes $81 billion and Argentina$39 billion. This is only a small fraction ofthe total debt owed to Western governmentsand Western banks. Eastern blockcommunist nations and Third World nationsowe over $850 billion and reasonable peopledo not expect that this sum will ever berepaid. The race now going on is to financeall this debt to governments, principally theUnited States, and bail out the internationalbanking system.This, then, seems to be one of the purposes ofthe Monetary Control Act of 1980, an extensionof Federal Reserve power. He says, "The defaultwhich many pretend can be avoided is inevitable.The only question that remains is who the victimwill be. The question is, shall it be the bankers orthe innocent uninformed American citizens?"This thing has gotten, by now, completely outof hand. We in Washington State, cognizant ofthis, and being devastated by the problems in thelumber industry, passed in 1982, SenateConcurrent Resolution 127, that called upon ourAttorney General to go to Washington D.C. andfile an action challenging the constitutionality ofthe delegation of the power to create and issuemoney; delegation to the Fed of the power tocreate and issue money. Now, our attorney of thispast legislature is very concerned about this. TheAttorney General declined. And in a way, I canunderstand. "You know," he said, "Jack, look, thisis a pretty heavy issue. How does it appear to youfor a small state to go back to the United StatesSupreme Court and challenge the money system

of the whole western world?" And I agree thatthat is pretty heavy.Any other state that has passed legislation suchas you're considering today, or a measure like SCR127, would be very helpful, because I believe theCongress is at the present time unable to act onthis issue. Now, it may be necessary for the statesto provide the impetus for success in that area.One question that always comes up. You say,"Well what system would you use to replace it?Given their record would you just place all thepower in the hands of the Congress to printmoney?" Congress doesn't print the money at thepresent time. The answer is, I wouldn't urge aConstitutional amendment to protect the interestsof the citizens. But I would say there are twothings absolutely essential, just to answer thequestion relative to what system should we have.Honest money consists of two things: 1. Moneyissued by the government upon which is not anevidence of debt and upon which interest is notcharged. 2. A stable money supply. Those twothings are absolutely essential to an honest moneysystem.There are many alternative systems that wouldfit this and they all have advantages anddisadvantages. And I'll just run through them verybriefly. You could have a gold standard currency.You could have a silver standard currency. Youcould have a bi-metal system. In this country silverand gold circulated at a 16-1 ratio for manymany years. Sixteen ounces of silver was equal, bylaw, to one ounce of gold. You could have, insteadof a standard system, you could haveconvertability, convert to metal. There is a statesenator in Kansas who advocates a private moneysystem. Some people say we could have a systembased entirely upon U.S. notes with aConstitutional amendment to limit the expandingof the money supply. You could base a moneysystem on commodities; grain, oil or whatever.You could base a money system on land value. Itcould be done. There are advocates of all thesesystems today.Actually there are advantages anddisadvantages to each of these, but the time is nowcome to remove this special interest and get asystem that best serves the interest of the people.The bottom line is, of course-I am asking, and Ihope that many other people are asking-that youpass this Memorial. You can say that it is only aMemorial. It is a Christmas card to Congress. It70doesn't matter much. Well it does matter a greatdeal, because they are taking notice. This feeling isgrowing. I hope we can create an atmospherewhere the money system will be an issue ofnational debate and in many congressionalelections all around this coutry, because in thefinal analysis it will take an action by Congress tosolve this problem. So, I would say to you that theState of Oregon and the Oregon Legislature canplay a crucial role in this vital issue of today.1 would like to close with a quote from a man Iconsider the greatest American President, ThomasJefferson. He had the ability to look at what weare doing today and to look ahead and to say wellif you do this today, this will follow, and this willfollow and from this, this will follow, and this willbe the end result. Listen to what Thomas Jeffersonsaid about a system allowing the banks to issue thenation's money. He said:If the American people ever allow privatebanks to control the issue of their currency,first by inflation and then by deflation, thebanks and the corporations that will grow uparound them, will deprive the people of allproperty until their children wake uphomeless on the continent their fathersconquered.Thank you very much. I would be happy toanswer any questions.Madame Chair: Are you considering, we read alsoabout the Washington State Pension System,buying part of the Bank of Seattle?SENATOR METCALF: We have talked aboutthat. We did not authorize it. Frankly, there aresome reasons why that should be considered anoption. I would frankly much rather have, nothave out of state banking able to move intoWashington State as we authorized under the lawwe passed. I voted against it and I would preferthat, but that is pretty hard to say exactly howthat will happen.I would like to just throw in one thing that 1forgot. This is a bi-partisan effort. The SCR 127we passed in Washington State as well as aMemorial, same as the one you are consideringtoday, was sponsored by six Democrat Senatorsand six Republican Senators and is a bi-partisaneffort in our state.Madame Chair: Are there questions?

Senator McCoy: You mentioned in your remarksthat, something to the effect that the FederalReserve System was more or less the catalyst forthe high usury rates. You mentioned usury severaltimes in your remarks. Do you believe that is thecause?SENATOR METCALF: Yes it is.Senator McCoy: Okay, go ahead.SENATOR METCALF: The Federal Reservedoes not now, though they should have the powerto set interest rates. But they control interest ratesby money supply, by the expansion or contractionof the currency. So they do, definitely controlinterest rates.Senator Frye: To what extent does the state havea responsibility of doing something about thoseinterest rates that are passed on?SENATOR METCALF: We have a usury law inour state and I am not sure if you do in Oregon.Senator Frye: Well, we were unwise enough, tojust say, "Come take it all."Senator Frye: In reference to the MonetaryControl Act of 1980, do you know whether therehas been any effort made by President Reagan tohave that law repealed?SENATOR METCALF: I have not been aware ofany statements he has made to have that lawrepealed. I think there should be. I think this is oneof the most dangerous things that was ever doneby Congress.Senator Frye: Well then I would assume that youand he probably share basically the samephilosophy. That's why I thought you might knowif he had made any effort to repeal that law.SENATOR METCALF: I am not aware of anyeffort. I certainly think that he should have madethat effort.Senator Frye: Would you happen to knowwhether he has taken a position on the issue that isnow before us?SENATOR METCALF: He has not to myknowledge. I believe there is is no issue in Americathat the President should be more on top of andfollowing. As a conservative Republican, I supportReagan, and I am not being particularly criticalbecause he has a lot of problems. But there is noproblem, other than maybe nuclear war, thatoutweighs this problem for the American people.STATE OF OREGONMEMORIAL TO REPEALFEDERAL RESERVE ACT62nd OREGON LEGISLATIVE ASSEMBLY1983 REGULAR SESSIONSENATE JOINT MEMORIAL 12Sponsored by Senator HANLON, RepresentativeHANNEMAN (at the request of Jane L. Buttonand Kenneth Schmidt)SUMMARYThe following summary is not prepared by thesponsors of the measure and is not a part of thebody thereof subject to consideration by theLegislative Assembly. It is an editor's briefstatement of the essential features of the measureas introduced.Memorializes Senate and House of Representativesof United States to repeal Federal Reserve Act.JOINT MEMORIALTo the Senate and House of Representatives of theUnited States of America, in Congress assembled:We, your memorialists, the Sixty-secondLegislative Assembly of the State of Oregon, inlegislative session assembled, respectfullyrepresent as follows:WHEREAS Article I, section 8, Constitution ofthe United States, provides that only the Congressof the United States shall have the power "toborrow Money on the credit of the United States;"andWHEREAS Article I, section 8, Constitution ofthe United States, directs that only the Congressof the United States is permitted "to coin Moneyand regulate the Value thereof;" andWHEREAS the Federal Reserve Act of 1913transferred the power to borrow money on thecredit of the United States to a consortium ofprivate bankers in violation of the prohibitions ofArticle I, section 8, Constitution of the UnitedStates;" andWHEREAS the Congress of the United Statesis without authority to delegate any powers whichit has received under the Constitution of theUnited States established by the People of theUnited States; and71

WHEREAS Article I, section 1, Constitution ofthe United States, provides that "all legislativePowers herein granted shall be vested in aCongress of the United States, which shall consistof a Senate and House of Representatives;" andWHEREAS the Federal Reserve Act of 1913was imposed upon the People of the State ofOregon in violation of the provisions of Article I,section 1, Constitution of the United States; andWHEREAS the Federal Reserve BankingSystem, has threatened the integrity of ourgovernment through the arbitrary and capriciouscontrol and management of the nation's moneysupply; andWHEREAS the United States is facing, in thecurrent decade, an economic debacle of massiveproportions due in large measure to a continuederosion of our national currency and the resultanthigh interest rates caused by the policies of theFederal Reserve Board; now, therefore,BE IT RESOLVED BY THE LEGISLATIVEASSEMBLY OF THE STATE OF OREGON:(1) The Congress of the United States ismemorialized to enact legislation immediately as isnecessary to repeal the Federal Reserve Act.(2) Copies of this memorial shall be sent to thePresident of the United States Senate, the Speakerof the House of Representatives and each memberof the Oregon Congressional Delegation.REPORTSTATES CHALLENGINGCONSTITUTIONALITY OFTHE FEDERAL RESERVE ACT OF 1913Washington State Senate Jack MetcalfMarch 15, 198310th DistrictSTATES THAT HAVE TAKEN ACTION ONTHE FEDERAL RESERVE1982: Alabama and Arizona passed memorialscalling for abolishing the Fed.North Carolina passed a memorial askingfor a shift in the Fed's policy on credit.Washington passed a Senate ConcurrentResolution calling for a suit in U.S.Supreme Court challenging theconstitutionality of the delegation of thepower to create money to the Fed andcalling for an audit.Indiana and Nebraska introducedresolutions calling for abolishing the Fed.1983: Nebraska re-introduced memorial. It failed,but they will try again.Indiana introduced memorials calling forabolishing the Fed and also calling for anaudit. They have passed the House.(Adopted 103d session, 1983)Virginia's resolution calling for an auditpassed the Assembly without a singledissenting vote.Idaho passed a memorial calling forabolishing the Fed.Arkansas has introduced a memorialcalling for abolishing the Fed; it is in committee.Oregon has introduced a memorial callingfor abolishing the Fed; it is in committee.Utah's Senate has a memorial with 22sponsors (out of a 29 member Senate)Washington's memorial calling forabolishing the Fed has passed a SenateCommittee and will be heard on the floorthis week. Quick action is expected in theHouse.Work is also under way in Montana,Wyoming, Texas, Pennsylvania, SouthDakota, Nevada and California. AlsoIowa, Florida, Louisiana and Mississippi.Two other major efforts are being mountedout of California. One is a suit to be filed inDistrict Court in Washington, D.C.challenging the Fed; another an effort toput an initiative on the Fed on the 1984ballot.3273 E. Saratoga Road, Langley, WA 98260(206) 321-5483Institutions Bldg., Olympia, WA 98504(206)753-761872

STATE OF INDIANAMEMORIAL TO REPEALFEDERAL RESERVE ACTINDIANA GENERAL ASSEMBLYOffered by Representatives: LEE CLINGAN,DEAN R. MOCK, DONALD E. HUME,RICHARD W. MANGUSHOUSE RESOLUTION NO. 7URGING CONGRESS TO REPEALTHE FEDERAL RESERVE ACTWHEREAS, Article 1, section 8 of theConstitution of the United States, provides thatonly the Congress of the United States shall havethe power "to borrow money on the credit of theUnited States" andWHEREAS, The Federal Reserve Act ofDecember 23, 1913 (Act of December 23, 1913;38 Stat. 251; 12 U.S.C. 221 et seq.) transferred thepower to borrow money on the credit of theUnited States to a consortium of private bankersin violation of the prohibitions of Article 1, section8, of the Constitution of the United States; andWHEREAS, The Congress of the United Statesis without authority to delegate any powers whichit has received under the Constitution of theUnited States established by the people of theUnited States; andWHEREAS, Article 1, section 1, of theConstitution of the United States, provides that"all legislative powers herein granted shall bevested in a Congress of the United States, whichshall consist of a Senate and House ofRepresentatives;" andWHEREAS, The Federal Reserve Act ofDecember 23, 1913 was imposed upon the peopleof the State of Indiana in violation of theprovisions of Article 1, section 1, of theConstitution of the United States; andWHEREAS, Members of the Federal ReserveSystem, a consortium of private bankers, havethreatened the very integrity of our nationalgovernment through their arbitrary and capriciouscontrol management of the nation's moneysupply; andWHEREAS, The United States is facing, in thecurrent decade, an economic debacle of massiveproportions due in large measure to a continuederosion of our national currency and the resultanthigh interest rates caused by the policies of theFederal Reserve Board; andWHEREAS, A consortium of private bankerswhich is not subject to any official periodic reviewor oversight by Congress has unconstitutionallycontrolled the economy of the United Statesthrough the Federal Reserve Act since 1913; andWHEREAS, This nation faces an immediateeconomic crisis. It is extremely urgent that theCongress of the United States act before it is toolate by repealing the Federal Reserve Act andrestoring the economy of this nation to a soundbasis through withdrawal of all "fiat money" nowin circulation—the so-called Federal ReserveNotes—and return to the gold standard;Therefore,BE IT RESOLVED BY THE HOUSE OFREPRESENTATIVES OF THE GENERALASSEMBLY OF THE STATE OF INDIANA:SECTION 1. That the Indiana House ofRepresentatives urges the Congress of the UnitedStates to enact immediately such legislation as isnecessary to repeal the Federal Reserve Act andrestore the gold standard.SECTION 2. That the President of the UnitedStates immediately sign the necessary enablinglegislation once it reaches his desk.SECTION 3. That the Principal Clerk of theHouse of Representatives transmit copies of thisresolution to the President of the United States,the President of the United States Senate, theSpeaker of the House of Representatives of theUnited States, and to each member of the UnitedStates Senate, and to each member of the House ofRepresentatives.J. ROBERTS DAILEY SHARON THUMASpeaker of the HousePrincipal Clerk(seal)Adopted by the Indiana General Assembly, 103rdSession, 198373

STATE OF ALABAMAReps. Willis, Boles H.J.R. 90MEMORIALIZING CONGRESS TOREPEAL THE FEDERAL RESERVE ACTENROLLED, HOUSE JOINT RESOLUTIONWHEREAS, The state of Alabama has a dutyto support and defend the Constitution of theUnited States against all enemies, foreign anddomestic; andWHEREAS, The Constitution vests in theCongess of the United States supreme power "tocoin money, regulate the value thereof and offoreign coin, and fix the standard of weights andmeasures;" andWHEREAS, The Congress passed the FederalReserve Act in 1913 ". . . to furnish an elasticcurrency," and thereby abdicated its duty to theAmerican people to fix a constant lawful value forUnited States money and thus insure prosperityfor honest, law-abiding, productive citizens; andWHEREAS, The national debt in 1913 was lessthan TWO BILLION DOLLARS for the entireNation, while the national debt in 1981approximates ONE TRILLION DOLLARS; andWHEREAS, The people of Alabama aresuffering the disastrous effects of bankruptcy,unemployment, and privation, when they areready, willing and able to work for an honestliving, but many find themselves unable to do so,for lack of available jobs or capital; andWHEREAS, The direct effect of the dictatorialcontrol of interest rates exercised by the Board ofGovernors of the Federal Reserve System hasbeen steeply accelerating and inflationary interestcharges, with the consequent and predictabledestruction of business, agriculture and industry inAlabama and the Nation; andWHEREAS, The Federal Reserve Act, Section19, specifically precludes the State of Alabamafrom effectively legislating or enacting any lawfulceiling on the extortionate interest rates or usurydemanded of our people by the Federal Reservebankers, thereby immunizing the banks andbankers from any threat of civil or criminalpenalty on account of their extortionate monetarydemands; andWHEREAS, The direct effect of the FederalReserve Act, as amended, is to lay an interestcharge upon every single dollar of paper currencywhich circulates in our State and Nation as aFederal Reserve Note, and it thereby lays aninvisible burden on uncontrolled anduncontrollable debt and taxes upon the backs ofour people; andWHEREAS, The United States Governmentowns no stock in the Federal Reserve System, andthe Federal Reserve is not a government agency,and is, in fact, an oppressive and extortionate,privately owned economic monopoly, entirelyindependent of any real government control,except by means of direct legislative action andintervention by the Congress, which establishedthe Federal Reserve in the first place; andWHEREAS, Section 30 of the Federal ReserveAct provides the "The right to amend, alter orrepeal this Act is expressly reserved," andWHEREAS, The Honorable Henry Gonzales,United States Congressman from the State ofTexas has introduced a Bill, H.R. 4358, in theUnited States Congress, expressly providing forthe immediate repeal of the Federal Reserve Act;now therefore,BE IT RESOLVED BY THE LEGISLATUREOF THE STATE OF ALABAMA, BOTHHOUSES THEREOF CONCURRING, That thisbody hereby memorializes the Congress of theUnited States, and especially Alabama'sCongressional Delegation, both Senate and Houseof Representatives, for the immediate passage ofthis important legislation, H.R. 4358, to the endthat peace and prosperity, and the blessings of aSovereign God may be the lot of our people.RESOLVED FURTHER, That a copy of theresolution be sent to each member of the AlabamaCongressional Delegation and to each presidingofficer of the United States Congress.Speaker of the House of RepresentativesPresident and Presiding Officer of the SenateHouse of RepresentativesI hereby certify that the within House JointResolution originated in and was adopted by theHouse February 9, 1982.John W. PembertonClerkSenate Feb. 25, 1982 Adopted74

STATE OF TEXASHOUSE OF REPRESENTATIVESWHEREAS, The Congress is without authorityto unconditionally delegate its powers, yet hasdone so by relinquishing them to the FederalReserve System, this relinquishment constituting athird major violation of Article I provisions; andRESOLUTION TO REPEAL THE FEDERALRESERVE ACT AND RESTORE THE GOLDSTANDARD.B y _ _ _ _ _ _ H.C.R. No. _________(Submitted for consideration)HOUSE CONCURRENT RESOLUTIONWHEREAS, Article I, section 8, of the UnitedStates Constitution reserves to the United StatesCongress the power "To borrow Money on thecredit of the United States;" andWHEREAS, The Federal Reserve Act of 1913transferred this power to an independentconsortium of private, regional bankers, thistransferral being free of any form of legislativereview or oversight, constituting a clear violationof Article I provisions; andWHEREAS, Article 1, section 8, of the UnitedStates Constitution reserves to the United StatesCongress the power "To coin Money, regulate theValue thereof, and of foreign Coin;" andWHEREAS, Members of the Federal ReserveSystem have threatened the very integrity of ournational government through their arbitrary andcapricious management of the nation's moneysupply; andWHEREAS, The United States faces aneconomic debacle of massive proportions, due inlarge measure to a continued erosion of ournational currency and the resultant high interestrates caused by the policies of the Federal ReserveBoard; andWHEREAS, This crisis makes it imperativethat the United States Congress act immediately torepeal the Federal Reserve Act that has beenimposed unconstitutionally on the people of thisstate and nation and to restore a sound economyvia a withdrawal of all Federal Reserve notes anda return to the gold standard; now, therefore, be itRESOLVED BY THE HOUSE OFREPRESENTATIVES OF THE STATE OFTEXAS, THE SENATE CONCURRING, Thatthe 68th Legislature hereby request the UnitedStates Congress to repeal the Federal Reserve Actand to restore the gold standard; and, be it furtherWHEREAS, The United States has abandonedthe gold standard, has ceased redeeming currencyin coin, and has floated the value of the dollar; andthe Federal Reserve System now issues fiat moneyin the form of unbacked Federal Reserve notes,this issuance and related monetary controlconstituting a second major violation of Article Iprovisions; andWHEREAS, Article I, section 1, of the UnitedStates Constitution provides that "All legislativePowers herein granted shall be vested in aCongress of the United States;" andRESOLVED, That the Texas Secretary of Stateforward official copies of this resolution to thePresident of the United States, to the Speaker ofthe House of Representatives and President of theSenate of the United States Congress, and to allmembers of the Texas delegation to the Congress,with the request that it be officially entered in theCongressional Record as a memorial to theCongress of the United States of America.68R6239 CCK-D75

ACTION IN CONGRESS97th CONGRESSH.R. 43581st SESSIONTo repeal the Federal Reserve Act and transferthe functions formerly carried out under the Actto the Department of the Treasury.IN THE HOUSE OF REPRESENTATIVESJuly 31, 1981Mr. Gonzalez introduced the following bill;which was referred to the Committee on Banking,Finance and Urban AffairsA BILLTo repeal the Federal Reserve Act and transferthe functions formerly carried out under the Actto the Department of the Treasury.Be it enacted by the Senate and House ofRepresentatives of the United States of America inCongress assembled,SHORT TITLESECTION 1. This Act shall be known as the"Monetary Policy Reorganization Act."REPEAL OF FEDERAL RESERVE ACTSEC. 2 The Federal Reserve Act is herebyrepealed.TRANSFER OF FUNCTIONSSEC. 3. Such functions as were carried outunder the Federal Reserve Act on the date of theenactment of this Act are hereby transferred tothe Department of the Treasury.DEPUTY SECRETARYFOR MONETARY AFFAIRSSEC. 4. There shall be in the Department of theTreasury a Deputy Secretary for MonetaryAffairs, who shall be responsible for administeringthe functions transferred to the Department undersection 3 of this Act. The Deputy Secretary forMonetary Affairs shall be appointed by thePresident, by and with the advice and consent ofthe Senate.DISPOSAL OF ASSETSSEC. 5. Within one hundred and eighty daysalter the date of the enactment of this Act, theDeputy Secretary for Monetary Affairs shalldispose of all the assets formerly under the custodyand control of the Federal Reserve System, exceptsuch assets as are necessary to continue essentialfunctions relating to check clearing or otherservices provided directly to financial institutionsin the United States, or such other assets as theDeputy Secretary for Monetary Affairs shall byrule determine to be essential to the carrying outof effective monetary policy for the United States.The proceeds from the sale of such assets shall bepaid into the Treasury as miscellaneous receipts.ADVISORY COUNCILSEC. 6. There is hereby created a MonetaryPolicy Advisory Council, which shall consist of sixmembers appointed by the President, by and withthe advice and consent of the Senate. The Councilshall provide advice to the Deputy Secretary forMonetary Affairs relating to all aspects ofmonetary policy, including those functions carriedout by the Federal Open Market Committee priorto the date of the enactment of this Act.98th CONGRESS1st SESSIONH.R. 875To repeal the Federal Reserve Act.IN THE HOUSE OF REPRESENTATIVESJanuary 25, 1983Mr. Paul introduced the following bill; whichwas referred to the Committee on Banking,Finance and Urban AffairsA BILLTo repeal the Federal Reserve Act.Be it enacted by the Senate and House ofRepresentatives of the United States of America inCongress assembled. That, one year after the dateof the enactment of this Act, the Federal ReserveAct (12 U.S.C. 221 et seq.) is hereby repealed. TheBoard of Governors of the Federal ReserveSystem shall take such actions as are necessary todispose of all assets of the Federal Reserve System,and to achieve an orderly termination of theaffairs of the Federal Reserve System, prior to theeffective date for the repeal of the Federal ReserveAct.16

SIX"Some people think that the Federal ReserveBanks are United States Governmentinstitutions. They are not Governmentinstitutions. They are private monopolieswhich prey upon the people of these UnitedStates for the benefit of themselves and theirforeign customers."CONGRESSMAN LOUIS T McFADDENNCSL BEGINS INVESTIGATION OF FEDNATIONAL CONFERENCE OF STATE LEGISLATURESQUESTION U.S. ECONOMIC POLICYIn a major policy move at the August, 1983Quarterly meeting of the National Conference ofState Legislatures (NCSL) the GovernmentOperations Committee voted to study the nationalmonetary system.Washington State Senator Jack Metcalf, NCSLGovernment Operations Committee, authoredand submitted the resolution, which passed by anoverwhelming majority.*Metcalf commented, "By adopting thisresolution, we (legislators) are saying that theFederal Reserve is a colossal failure. Uncontrolledinflation and usurious interest rates are a result ofthe monetary policies of the Fed. The governmentpays interest on all Federal Reserve dollars incirculation - practically every piece of papermoney now in use. With the federal deficit wellover a trillion dollars - and mounting daily - we willcontinue to pay interest on this debt forever,unless action is taken now."*Senator Jack Metcalf, Washington StateLegislature, Institutions Building, Olympia,Washington 98504 (206) 753-7618Metcalf was directed by the committee toprovide information leading to a one-year study onstate actions that will help protect citizens fromthe effects of the current policies of the FederalReserve System. The final report of the year longstudy will have considerable influence on thevarious state legislatures and will undoubtedlyresult in further pressure on Congress to act. Itmay also result in more direct actions by the statesto protect themselves and their citizens."Many state legislatures, includingWashington's, have passed resolutions demandingCongress do something about the Fed.Individually, each state has limited impact onCongress. United, we have a vast opportunity toimpact Congressional actions," Metcalf said."Many of our Congressional representativesconsider the national debt and the huge powers ofthe Federal Reserve System as issues they can puton the back burner. But, state elected officialshave more opportunity to talk with people. Weknow that citizens are demanding action now toavoid impending economic disaster," Metcalfconcluded.Text of the resolution is as follows:77

WHEREAS, a Government OperationsCommittee hearing at the December, 1982meeting in Washington, D.C. producedevidence that our nation's money system is notproperly serving the people of this nation, andWHEREAS, the impact on our states of inflation,recession, h i g h interest and highunemployment has made proper planningimpossible and has severely damaged fiscalresponsibility in many states, andWHEREAS, the Congress has been unwilling orunable to deal with any meaningful monetaryreform.NOW, THEREFORE, BE IT RESOLVED thatthe Government Operations Committee, eitherdirectly or through a sub-committee, study thenational monetary system to determine andrecommend actions that may be taken by statesto protect state governments and our citizensfrom the ravages of the present malfunctioningmoney system.When promoting passage of the FederalReserve Act of 1913, its sponsors and thoseworking to see it passed made ten promises. Theywere:1. To operate entirely under the direction andcontrol of the President and his appointees tothe Board of Governors.2. Pay interest to the government for theprivilege of printing Federal Reserve notes asthe nation's currency.3. Perform many banking services for thegovernment free of charge.4. They would manage the nation's moneysupply in such a manner that it would stabilizethe dollar which, in turn, would keep pricesrelatively stable.5. The Act would take the U.S. out from undercontrol of Wall Street.6. The Federal Reserve would prevent futuredepressions and eliminate the "boom andbust" cycles.7. The Fed would be friend and helper to thefarmer and to the monetary needs of smallbusinesses.788. The new system would remain foreverdecentralized so each Federal Reserve Bankwould have as much influence in monetarypolicies as the one in New York.9. The Fed would protect American interestsagainst foreign monetary assaults.10. The Federal Reserve System would superviseand inspect local banks, provide funds wherethey were pressed by unexpected demands.History has shown the Fed has been unable tokeep any of these promises. History also recordsthat many of the major promoters of the Act latersaid it was their greatest mistake. Many tried,without success, to repeal the Act.Senator Metcalf urged fellow state legislators tojoin in a suit before the United States SupremeCourt challenging the constitutionality of theFederal Reserve System (Letter, 24 January1983):State legislators are today on the cutting edge ofthe economic battle. Caught between plummetingstate revenues and sharply reduced federal dollars,nearly every state faces a budget crisis.The major culprits in the economic battle havebeen years of lavish Congressional overspendingand Federal Reserve policies that have both addedto the monstrous national debt and also delayed -possibly too long - effective economic recovery.State Legislators have felt defeated; unable toreach or cope with the problem.But, there is something we can - and must - do.Though we do not have the votes in Congress oron the Federal Reserve Board, sufficient pressurebrought from enough state legislatures hashistorically produced results.In 1982, the Washington State Legislaturedecided to act and passed Senate ConcurrentResolution 127 which called for a constitutionalchallenge of the Federal Reserve Act of 1913 andits subsequent amendments.Armed with SCR 127, Washington Statedelegates to the July, 1982 National Conference ofState Legislatures Meeting requested and weregranted a hearing before the GovernmentOperations Committee of NCSL. At the WinterMeeting in Washington, D.C. last December, nineexperts presented testimony on the Fed and thenation's money system in general. The major

conclusions drawn from the hearing are ofenormous significance to both the statelegislatures and the federal government. In brief:1. Judged by the promises at the time the actwas passed (including a stable currency andelimination of boom and bust cycles in theeconomy), the Fed has to be rated, at best, acolossal failure.2. The Federal Reserve action of curtailingthe nation's money supply by a third in 1929converted a serious recession into a disastrousdepression, destroying 1/3 of the nation'sbanksin the process; a similar Fed policy in effect in1981/82 was changed only last October.3. Judged on the basis of the Constitutionand by the intent of its authors, the FederalReserve Act and amendments are clearlyunconstitutional.4. The present system requiring the peopleand businesses of America to pay interest to thebanks on every Federal Reserve dollar incirculation (total annual interest approximately$50 billion) is a devastating and needlessburden, adding to bankruptcies in a recessionand severely hampering recovery. An HonestMoney System (debt-free money) is absolutelyessential to the economic well-being of thepeople all across America.5. An unstable national money supply is adebilitating handicap at best and at worst notonly causes, but worsens, the "boom or bust"business cycle so destructive of the people's bestinterests.A sixth point, covered in written testimony, wasthat the people of America now suffer from aneedless recession (depression?) brought on byhigh interest rates artificially created by FederalReserve actions.The implications for state legislators areimmense. We must determine what we can do toprotect our states and our people from the ravagesof a fatally flawed national money system.Another hearing is planned at next summer'sNCSL meeting, but we cannot afford to wait.Action must begin now.The immediate and most helpful action anystate legislature can take now is to joinWashington State in passing a measure similar toSCR 127. With even 2 or 3 more states joining us,a suit may be brought in the original jurisdiction ofthe U.S. Supreme Court challenging theconstitutionality of the present system.I urge you to introduce and pass such a measurein your current legislative session. My office isprepared to give as much help as possible. Wehave materials available, can supply sources offurther information and I may be able to come totestify or provide other experts to do so. I wouldappreciate hearing of any action taken in yourstate and being kept informed of any progress.There is no doubt that the most importantpolitical issue in the last two decades of the 20thCentury will be the Federal Reserve System vs. anhonest money system for America. Our actions atthis very critical time may well determine theeconomic position of this nation and its people forcenturies to come.UNITED STATES ECONOMIC POLICIES AND THE FEDERALRESERVE SYSTEM*The economic disaster that may be just aroundthe corner for the U.S. and for the world is nowopenly discussed and written about. Economistswho warn of collapse are no longer considered"doomsayers." While many factors brought us tothis point, there are three major contributors: U.S.banking practices with regard to economically*Remarks prepared by Senator Metcalf forpresentation at the Washington, D.C. hearing onfederal monetary practices, National Conferenceof State Legislatures, 10 December 1982.distressed countries, decades of U.S. governmentoverspending and the failure of the FederalReserve System to achieve the goals for which itwas created.The evidence is grim. In August, 1982, autosales were 35% below the already low sales of ayear ago. Housing starts are at the lowest levels in35 years. Farmers are losing money, even withrecord crops. In July, 1982, our factories andmines were operating at 69.5% of capacity. Pulpsales are radically depressed. Weyerhauser Timbercompany has no capital investments planned79

eyond this quarter. Banks all over the countryare merging in an attempt to strengthen failingfinancial positions; 27 banks had failed up to earlySeptember. According to Dunn & Bradstreet, 572companies bankrupted during the week of August9th, the highest failure rate since 1932, the deepestyear of the Great Depression. Yet, until August,the Federal Reserve System kept interest rates atrecord highs!Though President Reagan took dead aim at twoof the biggest roadblocks halting economicrecovery - runaway federal spending and federalincome tax rates - the powerful restorative effectsof these historic policy shifts have been delayed forone reason; the Federal Reserve's refusal to loosenits stranglehold on the nation's money supply.The Federal Reserve System ("Fed") possesseswhat amounts to life-or-death power overpresidential and congressional economicprograms. If you asked most Americans what theFed is and what it does, they'd probably reply thatthe Fed is just another branch of government. It'snot! As the Federal Reserve Bank of SanFrancisco points out in it's own job advertisementin the magazine Computer World, "Some peoplestill think we're a branch of government. We'renot. We're the bank's Bank."The Fed is a federally chartered, privatebanking consortium. It is empowered to act withabsolutely no control by any elected person orbody. Though the President appoints the Boardmembers and they are confirmed by the Senate,they represent the banking community and, oncein office, are completely beyond the reach of thepublic whose lives and businesses are deeplyaffected by their decisions. Neither their meetingsnor the minutes of their meetings are open to thepublic. There has never been an independent auditof the Fed, thus, no one knows who owns howmuch stock in it, other than the required stockpurchased by member banks under a formula setby the Federal Reserve Act of 1913. The U.S.government owns absolutely no stock in the Fed,What further proof do we need that the Fed isnot an agency of the government than tounderstand that when the government needs moremoney, the Fed does not merely create and print itas it would do were it a government agency. No,the Fed creates it as a loan and charges thegovernment interest on it.80It is this private banking system - not thePresident or the Congress - that controls thenation's money supply and is the major factorcontrolling interest rates and the economic climatein the United States.The Federal Reserve System is headed by aseven member Board of Governors, each memberappointed by the President and confirmed by theSenate for a 14 year term. The Board is vestedwith oversight of the nation's money supply andbanking system. The Board of Governors, thepresident of the Federal Reserve Bank in NewYork and four other Reserve Bank presidentschosen in rotation make up the Federal OpenMarket Committee (FOMC), who decide whetheror not to buy and sell government securities on theopen market. It is important to recognize thefreedom with which the Board and the FOMC canoperate. Once the Senate approves the members ofthe Board, they are free to do whatever they feel isnecessary with no constitutional checks andbalances, regardless of the wishes of the President,Congress or the public.Beneath these two entities, the system consistsof 12 Federal Reserve Banks, located in 12districts. In addition, there are 25 branch banksand numerous member banks. All Federal banksare required to be members. Commercial banksmay choose, and 4 of every 10 commercial banksare members of the System; but these bankscontrol 70% of the nation's bank deposits. Tobelong to the system, member banks agree todeposit a reserve with the Fed.This network allows the Fed to keep a closewatch on the operations of our nation's bankingsystem. But, their most powerful tool is the power,delegated to them by the Federal Reserve Act of1913, to expand and contract the nation's moneysupply.How can the Federal Reserve System createmoney? By simply touching a computer; literallycreating money out of thin air. It is a complexprocess, but following are two accurate, butsimplified, explanations.At current budget levels, the governmentspends in excess of receipts by more than $ 1 billioneach week. This deficit is raised through a processcalled "monetizing the debt." The governmentprints a billion dollars worth of interest-bearingU.S. Government bonds and takes them to the

Federal Reserve. The Fed accepts the bonds andenters $1 billion of credit on their computer,allowing the government to write $1 billion inchecks.Three points are crucial: (1) Where was the $1billion just before the Fed touched the computer?It didn't exist! By monetizing the debit, the Fedcreated money to buy the bonds. (2) What did theFed give for the bonds? Nothing! They received$1 billion in interest bearing bonds withoutexchanging anything for them. (3) The Fedconsiders this a loan and will charge interest to theFederal government forever! Therefore, thebanking system of this country is paid interest onevery paper dollar in circulation.This same thing occurs when the Fed decides toincrease the money supply by selling governmentsecurities. This is the province of the Federal OpenMarket Committee. Once the FOMC decides themoney supply should expand, they instruct theopen-market desk at the Federal Reserve Bank ofNew York to buy a certain amount of treasurybills from a securities dealer, paying with a check.The "money" to honor this check is automaticallycreated out of thin air, as earlier mentioned. Forthis example, securities purchased will be worth$100 million. The dealer deposits the Fed's checkin his bank, which we'll call Bank A, increasing hisaccount and the nation's money supply by $100million. Bank A, a member of the Federal ReserveSystem, must set aside part of the money into areserve, possibly 15%. Once Bank A puts $15million in reserve, they are free to do whateverthey want with the remaining $85 million.The chain reaction continues when Bank Alends $85 million to XYZ Company. When XYZ'sbank account increases by $85 million, thenation's money supply also increases by $85million. B.I.G. Steel deposits the check into BankB. Once Bank B puts their 15% into reserve, theyhave $72 million more to put back intocirculation.The process continues and the money supplykeeps expanding. By the time the sum of reservesset aside by all the banks involved in this particularchain of transactions reaches $100 million, the neteffect on the money supply is staggering. Theoriginal $100 million placed into circulation by theFed has actually expanded the money supply byover $600 million. Just like in the previousexample, the money exists only on computerizedcredit and debit sheets.One technique is to buy back governmentsecurities on the open market. The Fed can alsochange the reserve ratio and the discount rate toinfluence the activity of member banks. There isvast potential for abuse by insiders who, thus,have advance information regarding major shiftsin the economic climate. This obviously could bemanipulated into huge profits.It is the use of these restrictive tools that isexacerbating our present economic crisis. Whenthe Fed contracts the money supply, thegovernment must monetize the debt by borrowingmoney from the banking system at prevailingrates. This drastically reduces the amount of creditavailable to businesses and private borrowers.Also, by raising Reserve requirements (orincreasing the discount rate) the Fed can decreasethe amount of money member banks have to loan.Whether the cause is the Federal Governmentdriving private borrowers out of the credit market,or the Fed restricting lenders, the net result is thesame: less money in circulation means higherinterest rates and fewer loans, which meansdecreased business activity and delayed economicrecovery.The Federal Reserve controls the nation'smoney supply as well as the rate at which itcirculates through the economy. Most people donot understand the Fed's power, believing interestrates are the key factor controlling the moneysupply. However, interest rates are the symptoms,not the source, of our economic malaise. Bankstake many factors into account when they setinterest rates - a borrowers credit rating, the risk tothe bank, and the current rate of inflation. Thereal key is the size of the money supply, and therate at which it circulates. With tight money andthe Federal Government borrowing on the openmarket, banks aren't eager to make loans. Whenmember banks are forced to pay a higher discountrate to borrow from the Fed, the added cost ispassed on to the borrower as higher interest rates.The high interest rates that have fueled aworldwide recession and blocked attempts tostimulate economic recovery in the U.S. are thedirect result of the Federal Reserve System'sdecision to enact policies limiting the amount ofmoney in circulation and the rate at which it canbe circulated.The Federal Reserve System possesses awesomeinfluence over U.S. and world economy. Do we81

eally benefit from the Fed's use of these potentmonetary tools?The evidence suggests not. When the FederalReserve System was created in 1913, itsproponents argued that a powerful centralbanking system was necessary if our nation hopedto avoid the boom-and-bust swings in the businesscycle that had plagued mankind through history.The Federal Reserve Act was sold to Congress as away that would guarantee stable economic growthby maintaining a stable money supply.This hoped-for stability has not occurred. In1929, 1936-37, 1953, 1955-57, 1960, 1966 andmuch of the 1970's, the U.S. economy wentthrough notable periods of recession or depression.In each instance, the Federal Reserve hadincreased, then rapidly decreased the moneysupply, contributing significantly to the downturnin economic activity.Recent history suggests things haven't gottenany better. The U.S. is in the middle of the firstback-to-back pair of recessionary years in itshistory. The second shortest period of economicexpansion in 100 years (July, 1980 to July, 1981)followed the shortest period of recession in history(January, 1980 to July 1980). The reason for thesevolatile ups and downs, according to MiltonFriedman (Newsweek, February 15, 1982) issquarely with the Fed. Friedman argues that aseries of wild swings in the size of the moneysupply over the past 2 1/2 years led to the widestfluctuations in short-term interest rates during themore than a century in which detailed records ofAmerican economic activity have been kept.According to Friedman, these erratic changes inthe money supply have "put the economy througha dismaying roller coaster." His solution: "steadymonetary growth in order for the Fed to regainthe confidence of the financial community and forPresident Reagan's economic program to succeedin both ending inflation and providing a stablebasis for health noninflationary economicgrowth."By its own definition, the Federal ReserveSystem is a colossal failure. Ostensibly created toguarantee economic stability, it is in truth asignificant source of economic instability. Ratherthan providing consistent monetary growth, itspolicies have produced what Friedman calls the"yo-yo" economy.The concept of a private banking consortiumcontrolling the issuance of our nation's money wasnot what the Founding Fathers had in mind. TheConstitution is very explicit on this point -Congress, and only Congress, has the power toissue money.The framers of our Constitution had learnedfrom bitter experience what the unrestrainedissuance of currency could do to an economy.Shortly after the Declaration of Independence waswritten, Congress and the 13 original coloniesbegan issuing paper money. The money was notbacked by precious metals and no limits wereplaced on the quantities issued. The resultinginflation nearly destroyed the fledgling Republicbefore it got started. Therefore, the Constitution,in Article I, Section 8, states "The Congress shallhave power . . . to coin money, regulate the valuethereof, and of foreign coin."Men like John Adams, Benjamin Franklin,James Madison, James Monroe and ThomasJefferson were highly distrustful of the motives ofprivate banking institutions. History had giventhem good reason to be suspicious. As Jeffersononce said, "I believe that banking institutions aremore dangerous to our liberties than standingarmies ... The issuing power should be taken fromthe banks and restored to the government, towhom it properly belongs." James Madison wasslightly more colorful, but no less certain, when hesaid, "History records that the money changershave used every form of abuse, intrigue, deceit andviolent means possible to maintain their controlover governments by controlling the money andits issuance."The Founding Fathers understood theimportance of a sound money supply. They werecognizant of the difference between "debt" money(money issued simply to finance government debt)as opposed to honest legal tender issued by thegovernment. They knew Constitutional control ofthe money supply was the only way to protect thepeople.There has been a two hundred year struggle inAmerica over "who should issue the nation'smoney?" The Founding Fathers and earlypresidents spoke out on this issue. They said,"Don't let the banks issue the money." Either thegovernment issues the money or the banks issuethe money. The problem is that when the banks82

issue the money they charge us interest on it.Thus, under the Federal Reserve money system,the people and businesses of America pay interestto the banks for the privilege of using our nation'smoney.We pay interest, needlessly, on every FederalReserve dollar in circulation! With approximately$500 billion in circulation, the interest due isabout $50 billion!It is time for us to clearly address the problemspresented to the American economy by theFederal Reserve System. It is time for us to addressthe constitutionality of the Federal Reserve Act of1913, granting those representing the moniedinterests control over our nation's money supply.It is time for us to truly understand the monetarypolicies of our country.We have a clear choice. Fifty years of deficitspending and debt money has left our nationdangerously near the precipice of economicdisaster. We can choose to continue on thisruinous course or we can take steps to guarantee asound, stable money supply for ourselves andfuture generations.Honest money could very well be the mostexplosive political issue over the remainder of thecentury. Some in Congress have recognized thisand opened the debate - but Congress will not act.As has happened before in our nation's history, itis now the duty of State Legislators all over thisnation to accept the challenge, study this problemand demand solutions that protect our states andour citizens.SOLUTION TO ECONOMIC CRISIS IS LOCAL ORGANIZATIONAND CORRECTIVE STATE LEGISLATIONIn the present climate of economic emergency itappears that the greatest stumbling block toacceptance of necessary data for financial survival,and the conclusions which must be reached by theindividual, is the feeling of "unreality" which thetruth holds for the very people who seek it.The impending economic / political disaster ispermitted its fantastic rate of growth through noother factor as much as incredulity masked asapathy. The resulting inaction of the people is apowerful propellant to nihilistic doctrine.Knowledgeable response to crisis is, of course,more difficult than protest. But, protest alone willnot defend your family, your money and your83property. A vital first requirement for financialsurvival in a hostile political environment isidentification of the men, and the system, whodirect the course of America to oblivion and herpeople to a soviet twilight zone.Now you have the key to unlock the mystery of"the secret government of monetary power," andlearn how to defend your money and propertyagainst their confiscatory stratagems.It is wasteful to wrestle with the convoluted,impersonal problems of the world. More realprogress will be made in defense of freedom byconcentrating your time and energy on economicissues affecting your resources and your family.

SEVEN"Whensoever the general government assumesundelegated powers, its acts areunauthoritative, void and of no force. That tothis contract (the Constitution) each Stateacceeded as a State and is an integral Party, itsco-States forming as to itself the other Party.That government created by this Contract wasnot made the exclusive or final judge of theextent of the powers delegated to itself sincethat would have made its discretion and notthe Constitution the measure of its powers.But that, as in all other cases of compactamong parties having no common judge, eachParty has an equal right to judge for itself aswell of infraction as of the mode and measureof redress."KENTUCK Y STA TE LEGISLA TURE19 November 1799ON THE CHARACTERISTICS OF GOVERNMENT*If we study the Constitutional history and theprinciples of agencies that are involved in thisagreement called the Constitution of the UnitedStates, we'll see that the . . . States are in fact theprincipal. Each of the specified agencies inWashington is just that: a special or limitedagency, not a general agent. For example, thelegislative power of this body (Kansas InterimJudiciary Committee) is a general legislativepower. A State legislature has authority to doanything it sees fit as long as it is not prohibited byeither the state or the federal constitution. Thisdistinction is very clearly spelled out in theVirginia Blue Book of the Virginia Legislature if*Testimony, Attorney T. David Norton, StateSenate Committee on the Judiciary, Topeka,Kansas, 23 August 1979.you want to get a broader view, or broaderstatement, of it. But, the federal legislature on theother hand has to look at that Agreement and thatAgreement alone to find specific authorization forwhat it does. They haven't been doing that aseverybody knows. That's part of the problem. Andalong with the problem comes a question of whatto do about it. But in order to see more clearlywhat the nature of the Agreement is and who'sresponsibility it is in the constitutional sense, tocure infractions, I think it is sometimes importantto look at what some of the framers of theAgreement thought about it. If anybody knowswhat that Agreement said and what it meant, itought to be the people who wrote it.We have here for example a statement fromJames Madison whose role in the formation of theagreement between the states is very well known.84

He says, "The ultimate right of the parties to theconstitutional compact to judge whether thatcompact has been dangerously violated mustextend to violations by one delegated authority aswell as another. By the judiciary as well as by theexecutive, or the legislature." That particularquote you will find reprinted in the little pamphletcalled Nevada's Public Lands, copies of whichhave been distributed to the Committee.In addition, we have the further considerationthat something else is happening in connectionwith how things are run and we have a lot ofpeople trying to have somebody else make ourdecisions for us. It's a very easy copout to say"Well we've got a problem. Why don't we havesomebody else come in here and decide theproblem for us. That way we won't have theresponsibility of making the decision ourselves."Of course, the Constitution doesn't provide forthings to be run that way, but until we find out abetter way, that's generally the way it goes.If we look to some very capable attorneys, oneof whom was Abraham Lincoln, we'll find aquotation from him that examines one of theprocesses of the law that has been developed, ormisdeveloped, to substitute for Constitutionalgovernment, and that is the process whereby weexpect the Myrmidons on the Potomac everyMonday morning to pronounce from Olympussome new rules for us to go by. And all lawyersoffices are filled with volumes of this stuff. We arekept poor keeping the legal publishers in business,by necessarily having copies of all this material.However, the scope that is being given to whatgoes on in Washington, particularly with regard,let's say, to the Supreme Court, is much broaderthan the Constitution provides, and much broaderthan any member to this Constitutional Compactever agreed to. We find Mr. Lincoln saying in hisfirst Inaugural Address,"I do not forget the position assumed bysome, that constitutional questions" (ofcourse, the word used in the Constitution iscases, not questions. We start playing gameswith our terminology and frequently we findour ability to accurately gain concepts ofwhat we are dealing with is compromised)Lincoln says, "that constitutional questionsare to be decided by the Supreme Court. Nordo I deny that such decisions must bebinding in any case upon the parties of a suit,as to the object of that suit, while they are85also entitled to a very high respect andconsideration in all parallel cases by all otherdepartments of the government. And whileit is obviously possible that such decisionmay be erroneous in any given case, still theevil effects flowing from it, being limited tothat particular case with a chance that itmay be overruled and never become aprecedent in other cases, can better be bornethan the evils of a different practice. At thesame time" continues Lincoln, "the candidcitizen must confess that if the policy of thegovernment upon vital questions affectingthe whole people is to be irrevocably fixedby decisions of the Supreme Court theinstant they are made in ordinary litigationbetween parties and personal actions, thenthe people will have ceased to be their ownrulers, having to that extent practicallyresigned their government into the hands ofthat emminent tribunal."Nor is there in this view" concludesLincoln, "any assault upon the court or thejudges. It is a duty from which they may notshrink to decide cases properly broughtbefore them, and it is no fault of theirs ifothers seek to turn their decision to politicalpurposes."Political purposes, of course, have to do withpolicy. And if we are to allow members of thecourt, who have only judicial power not legislativepower, to assume a role of telling us what to do inthe legislative area, then we will be doing preciselywhat Lincoln was warning us against, namely,resigning our government into the hands of themembers of the Court. They can't act as a Court ifthey go beyond the authority specifically granted.But the members of the Court can do anythingthey see fit, and they can get the Clerk to put theseal of the Court on it, and to the casual observerit might appear to be what the Court has done.However, if they lack authority, just as was foundin the case of Marbury v. Madison with regard toa purported statute, what the Court attempts to dothat is beyond its authority is void and it is just asvoid as an unauthorized statute or act of theadministration would be.When it comes to deciding what kind of remedyto apply, again, I think that we can find someinteresting and instructive material in consideringthe conclusions of those who were a little closerthan we are today to the framers of the agreement.

We have, for example, this passage out of thereport of the Kentucky Legislature of November19, 1799, which saysWhensoever the general governmentassumes undelegated powers, its acts areunauthoritative, void and of no force. Thatto this contract, (that is the Constitution),each State acceeded as a State and is anintegral Party, its co-States forming as toitself the other Party. That governmentcreated by this Contract was not made theexclusive or final judge of the extent of thepowers delegated to itself, since that wouldhave made its discretion and not theConstitution the measure of its powers. Butthat, as in all other cases of compact amongparties having no common judge, each Partyhas an equal right to judge for itself as wellof infraction as of the mode and measure ofredress.Returning to President Madison we find in Mr.Madison's Report specific reference to thejudiciary and the manner in which we may bedeparting from the heritage that most of us havebeen taught to believe is a good one. Mr. Madisonsaid in his report,"If the decision of the judiciary be raisedabove the authority of the sovereign partiesto the Constitution" (of which Kansas is one)"the decisions of the other departments notcarried by the forms of the Constitutionbefore the judiciary must be equallyauthoritative and final with the decisions ofthat department. However true, therefore, itmay be that the judicial department is, in allquestions submitted to it by the forms of theConstitution to decide in the last resort, thisresort must necessarily be deemed the last inrelation to the authority of the otherdepartments of the government, not inrelation to the rights of the parties to theConstitutional Compact, from which thejudicial, as well as the other departments,hold their delegated trust. On any otherhypothesis" continues Madison, "thedelegation of the judicial power would annulthe authority delegating it, and theconcurrence of this department with theothers in usurped powers, might subvertforever and beyond the possible reach of anyrightful remedy, the very Constitutionwhich all were instituted to preserve."86So if we see what the Parties to theConstitutional Compact had to say about it, wefind that they understood where the Constitutionbegan much better than we do. And that shouldn'tsurprise us because they figured out theConstitution. If we look at the text itself, we'll seea number of things that frequently escape ournotice. For example, the fact that it is anagreement between sovereignties. We sometimessay that sovereignty inheres in the State and thatall legitimate power, all power, whether legitimate(or illegitimate for that matter) originates in theState, both the power that is delegated to countygovernments and municipalities and the powerthat is lawfully exercised by the common agents ofthe States in Washington. Also, illegitimatelyexercised power arises from these sovereignties,and when usurpation occurs, it is the State powerthat is being seized ordinarily. Sometimes (andwe'll get to it in another quotation from JudgePine on this subject) sometimes there areencroachments by one branch on the functions ofanother.But the principal problem that we are dealingwith today is the overall grab for power by theagencies in Washington, most of it being exercisedby nameless and faceless bureaucrats where eventhe President can't find out who is exercising thepower. We have a little anecdote about that that Ican regale you with if you are interested withregard to Nevada's public lands. But the first thingI'd invite your attention to with regard to theConstitution itself would be the signaturesthemselves that appear at the end of theAgreement. The first signature here, for example,is George Washington, and he is described asPresident. He was selected President of theConstitutional Convention. But the rest of his titleis what shows he had any authority to be there atall. And that language is, "and Deputy fromVirginia." Now if Virginia had not been willing toagree to the Constitutional Compact or agree tosend a representative to the Convention, GeorgeWashington would never have made it.Likewise, we find in the text of the Agreementitself, in Article VII, "the ratification of theconventions of nine states shall be sufficient forthe establishment of this constitution between thestates so ratifying the same." In other words,unless and until they had nine states agree to itthey didn't have any Constitution. And each ofthe states up that point, even those that hadratified, retained their complete and independent

sovereignty, that was recognized by the Treaty ofParis that concluded the Revolutionary War, eachof them having power to declare war; and each ofthem having the supreme prerogative ofgovernment, the power to issue its own money,which many of them did, prior to the formation ofthis Agreement. And it was only the signature ofthe ninth state, the agreement of the ninth state,that made it operable with regard to those nine. Ithappened, of course that the other four agreed.However, this makes it unmistakably clear thatthis is an agreement between sovereignties. Andwhen Kansas or Nevada comes in on an equalfooting with the thirteen original Nations, itmeans that the only entity that the Congress hasauthority to admit to this union is a sovereignty.And in the constitutional sense, the term State,remember what Louis the Fourteenth said, "I etatce moi," I am the State. The term State meanssovereignty. And, we have tended to get awayfrom this concept some with the passage of timebecause we have such free communicationbetween the various Parties. We have lost sight ofthe fact that each of the Parties to theConstitutional Compact is just that - a principalunder the Constitution. So, we find basically thatthe text that is frequently quoted, namely theNinth and Tenth Amendments of theConstitution, is what we lawyers sometimes referto as mere surplusage. It doesn't add anything towhat's already there. The fact that you have anAgreement between the sovereign Parties to beginwith would basically mean everything that I havereferred to in the Constitution itself. But inaddition, the fact that you had representatives ofthe sovereignties there drafting the agreement; andyou have the individual sovereignties ratify forthemselves and no one else. These things indicatethat it is an Agreement between sovereignties. Itmakes it (the ninth and tenth amendments makeit) much more difficult for those who don't wantto be bound by this principle of limitedgovernment to pretend that those limitationsaren't there.One of the principal limitations that wasincorporated into the Agreement was thelimitation that, number one, it is an agreementbetween Sovereignties. What the agents have asany legitimate authority, had to come from thosesovereignties by specific and limited delegation forauthority.There are some other points that I thinksometimes have an effect to clarify our thinking ofthe matter. For example, on pages three throughfive on this little pamphlet that has beendistributed entitled, Stop Usurpation, with StateAction, you will see the report of the New YorkLegislature of 1833. It goes on to someconsiderable extent and I won't quote it to you,but it will point out I think that the language thatsome of us as school kids even memorized in thePreamble of the Constitution, We the people ofthe United States, does not mean all the peoples,the several peoples in the United States, but itrefers to the individual States and the politicalsocieties within those particular states, each actingin it's highest sovereign capacity, which it must doin forming an Agreement with a sister State. Ibelieve it was the Virginia Commission onConstitutional Government that some years agobrought out a rather thick volume on documentsrelating to the formation of the Union and theyentitled this volume, interestingly enough, We theStates. James Kilpatrick was the editor of thatvolume. And he was at that time unaware of thestrong support for that interesting selection of titlethat is to be found in the report of the New YorkLegislature of 1833 which also approves a similarfinding made by the Virginia Legislature.So if we look at all the historical authorities,we'll see that there is a position that the state canand should assume that it is being neglected andthat is the position of a sovereign Party to thisAgreement. This blindness on our part, a numberof people have come up with different theories asto how we come to ignore sometimes the mostsimple of truths. I suppose we lawyers are the mostguilty of anyone, because we are looked at as thegurus of the law, and they say, "We have a legalproblem here - the Constitution seems to bedismantled - what are you lawyers going to doabout it?" Those who have been spared thehumiliation of a law school education find itconsiderably difficult to understand that thecourse that we get taught in law school called'Constitutional Law' has very little to do with theConstitution. I nearly got thrown out of my firstcourse in Constitutional Law for having thetemerity to suggest to the professor that becausethis was advertised in the catalog as a course inconstitutional law maybe we ought to read theConstitution. 1 was told in unmistakable termsthat Dowling on Constitutional Law, the casebook, is this course, and anybody who doesn't likeit is at liberty to leave. Well, I wasn't about to87

leave. I wanted to see what they were up to. Butthis was the process that was used in the graduateschool and in the law school - all of these variousareas where they teach courses in constitutionallaw. They would be amazed, the professorsthemselves would be amazed, to find how far theyare going from the Constitution in the process ofpretending to teach constitutional law.There is an anecdote that comes from therecently deceased Dean Clarence Manion thatpoints this out very clearly. I won't burden youwith it but in summary it shows that evenClarence Manion, who taught constitutional lawfor 22 years, blew a basic question on it when hewas asked, because he was dealing with casebooks. He wasn't dealing with the Constitution.He was straightened out interestingly enough byLouis Budenz, a former Communist, who hadstudied our institutions to the point where heknew what the Constitution was all about and it'srather an interesting side light that many of us inthe legal profession where we answer legalquestions all the time find ourselves as babes in thewoods when it comes to dealing with basicconsitutional principles.That's what the movement for state action toenforce the Constitution is all about. Because thisis where the power started and this is wherecorrections of the Constitution have to take placeif they are to be corrected and there is a veryinteresting reason for this. That is summarized ingreater detail in this little pamphlet, StopUsurpation. I will review it briefly for you. If theparty or a particular party that has jurisdictionover a given State - and that means the statelegislature - if the party does not correct aninfraction that is committed through usurpation,by one or another of its common agents inWashington, then the agent that starts out havingno authority whatever under the Constitution canend up bossing the citizens around - even inviolation of the Constitution - because the Party tothe Constitutional Compact did not correct theunlawful act of its agent.Sometimes we use a rather homely analogy(which can be rather dangerous, analogiesfrequently are) but it points up this particularrelationship. We say "Farmer Brown sends hishired hand to market with a load of potatoes to sellthe potatoes and the hired hand sells the team andwagon." We have a specific or limited agency, thatthe hired hand ignores. Another hired hand cansay "Charlie, you knew that was Farmer Brown'sfavorite team and wagon, you shouldn't have soldit." But all such scoldings are ineffectual if FarmerBrown doesn't do anything about it. And thatagent starts out having no authority whatever tobegin with ends up with giving good title to thatteam and wagon, that is good even against theFarmer himself.The farmer has three options. (1) He can do theobvious thing and repudiate. (2) He can find outhow much Charlie got for the team and wagonand if it was a good enough price, he can ratifyand get a bill of sale, and even though the hiredhand didn't start out having any authority, thedeal is perfected and consumated by the laterauthorization of the principal. (3) Or he can do athird thing. And this is what the States have beendoing. It is not really a third separate thingbecause it results in one of the other two thingshappening, and that is he can do nothing.If he does nothing, he implicitly ratifies theunauthorized act of his agent. Some of us getconfused when we talk about ratification, and wethink that since we've left this thing go on so long,maybe we can't undo it. But I invite yourattention to the fact that the State, being asovereign, is never estopped. It is the statelegislature that determines what your statue oflimitations shall be, for example. On murder,frequently there is no statute; on a writtencontract it might be four years or six years; on apersonal injury action it might be one or twoyears. But these are decisions that are made by thesovereign power of the Legislature and anyestoppel that is worked by an inaction is good onlyinsofar as what has happened. It cannot beprospective. You cannot bind, as you arefrequently told, you cannot bind the acts of asubsequent Legislature. Even by inaction, thiscan't be done. So the option remains open to anyState Legislature that wishes to do so to use it'slegislative powers to correct constitutionalinfractions whether this comes from the Congressor from the executive or the judiciary.With regard to how this is done and why don'twe let somebody else do it, and "can't we bring asuit and have somebody else decide it for us," I'mafraid the answer to this last question is, no, wereally can't, no matter how convenient that mightbe. It is nevertheless, our responsibility, and thereis the good news and the bad news. As Pogo says,"We has met the enemy and they is us." If this is88

the case we may have to take the blame for thingsgoing wrong that we've previously tried to sloughoff onto someone else. But there is good newsthere. That good news is - that if it really is ourfault, then we can fix it. It is only if it is our faultthat we have the power to fix it. And we find thatas we study more deeply into the subject, that wehave almost unlimited power to fix theseinfractions - if we dig far enough.Judge David Pine is a district judge inWashington, D.C. You may remember him - he isthe one who decided when Harry Truman tried tograb the steel companies that Pine was the districtjudge who said, "No, you're not allowed to dothat." And he was sustained by the United StatesSupreme Court (by a vote of 6 to 3) butnevertheless, it shows that he gave a certainamount of attention to this question ofconstitutional limitation. In a speech that wasprinted by the American Bar Association inNovember of 1954, he points out a number ofthings that deal with this general subject ofusurpation. He starts by quoting fromWashington's Farewell Address which is read onthe floor of each House every February 22nd andregarded by most as very sound advice. (Howmuch it is followed by the people who aresupposed to listen to it is anybody's guess.) It isnevertheless, very sound advice - particularlyinsofar as it deals with the subject of usurpation.Washington says, "the spirit of encroachment,tends to consolidate all powers of governments inone and thus to create, from whatever the form ofgovernment, a real despotism." Then Pine quotesfrom Madison and the Federalist Papers, "Theaccumulation of all powers, legislative, executive,and judicial, in the same hands whether of one, afew, or many, whether hereditary, self-appointedor elective, may just be pronounced the verydefinition of tyranny." In Nevada it is avery express violation of our Constitution -Article 3 is unmistakeable in its terms.It says, if you exercise legislativeauthority, you may not exercise eitherexecutive or judicial authority with suchexceptions as the Constitution, and only theConstitution, may provide. These exceptionswould include such things as the Governor'slegislative veto which does have something to dowith the legislative power. He does have thisauthority - to veto a legislative bill. It is not acomplete or uncontrolled legislative authority, butis an authority that we have entrusted to our stateexecutive. It is nevertheless specified in theConstitution and therefore, it is lawfully exercised.However, we find in Nevada we are doing whatmaybe you have done here and adopted in theState a so-called "Administrative Procedures Act."Under the Federal Administrative ProceduresAct, nameless and faceless bureaucrats, if theydon't have any success in using our tax money tolobby their bills through our legislature to givethem power over us, they have another expedient.That is to stick it into the Federal Register record.That is what the federal bureaucrats did with theduplicate mining regulations in Nevada. Theywere shot down in Congress and on the 23rd ofDecember, shortly before Christmas, here thesesame regulations came full blown, published out inthe Federal Register and as I mentioned, evenJimmy Carter can't find out who did it. If we findin administrative procedures that by use of theFederal Register bureaucrats are making policymaking decisions, they are exercising legislativepower.They even have such anomalous soundingoffices as "administrative law judges." In thosethree words they have succeeded in contradictingthemselves twice, Because if it is law, it has tocome from the legislature. If it's administrative,they are not allowed to exercise it if they happento be a member of the legislature or a member ofthe judiciary. And further, if they are judges, thenthey are not allowed to be either administrative orpolicy making. Yet, they have with considerableboldness combined into one title one of the veryproblems that Judge Pine is concerned with. Hesays,The moral to which I said I would pointbefore concluding my remarks is this. Followthe example of the founding fathers and beas alertly fearful as they were of usurpationof power, and forerunner of tyranny andoppression. When you say that that is seeingghosts, the Constitution stands in the way itis in no jeopardy, and is held in such highesteem and reverence as to be immune fromdestruction, I agree, if you refer to a frontalattack. But what I ask you to fear are attackson the flanks, made in the cause ofexpediency and supported by vast populardemand at the moment. (Witness DavyCrockett.)89

The technique of the subverters will be theargument that the Constitution is a living thingand therefore susceptable to "growth" and must beadaptable and flexible enough to allow for changesin the social and economic life of the country.Judge Pine continues,In recent years there has been a trendtoward enhancement of the powers of thefederal govenment. Now all of us are awareof this. This has been accomplished by theexpansion of what was formerly believed tobe the limits of the interstate commercepower and the taxing and spending powersand the federal government has therebytaken over the control of great fields ofactivity formerly considered the province ofthe states. There has also been a dispositionin the federal government itself towardencroachment by one department upon theother. Particularly the executive upon thelegislative and the judicial. This is not to saythat the legislative has not cast covetous eyestoward the executive nor that the judicialhas been demurely free from flirtations withthe legislative powers. But at the moment, asI see it, the executive advances predominate.90That is an interesting comment to be comingfrom a pretty well versed gentleman in the affairsof Washington. He concludes that, "I am awarethat the view I expressed has vocal opponents. Buton consideration of their argument I detect thatbeneath their reasoning a predisposition toauthoritarian government. So often, such peopleare willing to exchange liberty for efficiency, andfreedom for temporary security or reward."I don't think that we lawyers are completelyabsent in our contributions to a solution to this.More often, our reported remarks are likely to beconfined to an examination of a problem ratherthan an examination of a solution and that's onereason why I think this committee is to beparticularly commended for having theopportunity to inquire into this basic question of"Is regional government unconstitutional?" and topossibly make some recommendations as to thecourse that the Kansas legislature might take inthe event that they find, as a number of othercommittees have found in a similar study of thesubject, that there are indeed numerous andflagrant infractions of the ConstitutionalAgreement.

EIGHT"Daniel Webster, James Otis and Sir EdwardCoke all pointed out that the mere fact ofenactment does not and cannot raise statutesto the standing of Law. Not everything whichmay pass under the form of statutoryenactment can be considered the Law of theLand."16 Am Jur, 2nd Sec.547THREAT TO LIBERTY AND THE REMEDYUNITED STATES MONETARY CRISISHON. JOHN R. RARICKof LouisianaIN THE HOUSE OF REPRESENTATIVESThursday, May 11, 1972Mr. RARICK. Mr. Speaker, the current effortsby our Government to hold down price increaseshave served to focus the attention of thoughtfulstudents on a little discussed facet of our moneysystem. This system, because of a long process ofmiseducation and studied silence, is not nowunderstood as it was prior to adoption of theFederal Reserve System more than half a centuryago. It is based upon debt, has serious implicationsfor the future of our country, and invites whatmay be the greatest war in history.Every debt-dollar demands an interest tributefrom our economy for every year that dollarremains in circulation. These interest costs forceup the price of every commodity and service andcontribute greatly to inflation.One hundred and ten years ago, on PresidentLincoln's recommendation, the Congressauthorized the issue of interest-free U.S. notes.Many of these notes are still in circulation andtheir interest-free status has saved the Americaneconomy billions of dollars.Attempts to fight inflation in the United Statesby the highest interest rates here in over 100 yearsare bound to fail for high interest rates drive costsand prices up while holding production down. Forthis reason, the present administration hassucceeded only in bringing about the anomaloussituation of a depression in the midst of risingprices. The result has been to engorge financierswith profits at the expense of every other sector ofthe economy.Moreover, so long as the manipulators of themoney seek to maximize bank profits by highinterest rates, prices must continue to skyrocket.Only by forcing these rates down can productionbe encouraged and costs reduced, which willminimize price increases.Under the Constitution, the Congress hasresponsibility of issuing the Nation's money andregulating its value—Article I, section 8, clause 5.In a recent brilliant analysis of our money systemby T. David Horton, chairman of the executivecouncil of the Defenders of the AmericanConstitution, able lawyer and keen student ofbasic American history, he suggests a provenremedy for our current predicament that willenable the Congress to resume its constitutionalresponsibility to regulate our Nation's money by91

liberating our economy from the swindle of thedebt-money manipulators by the issuance ofnational currency in debt-free form.Early in the present Congress I introducedlegislation (H.R. 351) the main aim of which wasto accomplish such liberation by authorizing ourNational government to purchase the FederalReserve System and to place it under the controlof experienced administrators who recognize thebasic soundness of the traditionalist money systemand who can be depended on to act in the interestsof the American people and American financialneeds.In order that the indicated analysis and proposalof Mr. Horton may be available to our colleagues,I quote it as part of my remarks.MONETARY CRISIS—ITS THREAT TOLIBERTY AND THE REMEDY (Address of T.David Horton)In 1797 John Adams wrote to ThomasJefferson:All the perplexities, confusion and distress inAmerica arise, not from defects of theConstitution or Confederation; not from anywant of honor or virtue, as much asdownright ignorance of the nature of coin,credit and circulation.The power to issue money is the supremeprerogative of government.The history of contemporary money policiesmay be traced back to what has been called "thecrime of 1666" when Barbara Villiers, mistress toCharles II, helped the British East India Companygain a rake-off starting at two pence on the poundof the royal coinage. These corrupt practices weremultiplied, and by 1694, William Paterson,founder of the privately owned Bank of England,would declare:The Bank hath benefit of the interest on allmonies that it creates out of nothing.With the crime of 1864, the National Bank Act,we find private banks gaining the power to issuemoney directly and a struggle commenced that hascontinued to the present day. Our own nationalheritage, if we are allowed to know it, is full ofemphatic statements upon the subject of money.Abraham Lincoln was one of our nation'sforemost statesmen on the subject of money.The great American monetary historian,Alexander Del Mar, declared:Money is perhaps the mightiest engine towhich man can lend an intelligent guidance.Unheard, unfelt, unseen, it has the power toso distribute the burdens, gratifications andopportunities of life that each individualshall enjoy that share of them to which hismerits or good fortune may fairly entitlehim, or, contrariwise, to dispense with themso partial a hand as to violate every principleof justice, and perpetuate a succession of...slaveries to the end of time.What have we done with our money? Morethan a hundred years ago John C. Calhoun saidthat we had given the banks the government creditfor nothing, only to borrow it back again atinterest.In the 1930's Marriner Eccles, then chairman ofthe board of governors of the Federal ReserveSystem, admitted to Congressman Wright Patmanthat: What that privately owned central bank usedto buy three billion dollars worth of governmentbonds was the right, as he called it, to create creditmoney.Yes, banks create money—ex nehil—out ofnothing.Congressman Usher L. Burdick confirmed thisin an interview published in 1959 in which he said:We want to sell four billion dollars worth ofbonds, and we sell it in New York to thosewho haven't got a dime, and they don't needany money because they simply enter creditto the government on their books! ----------And then, before such money is paid out,they get the currency because they bundleup those bonds and bring them down here toWashington and get an equal amount ofcurrency. Then they've got the money! Butthey didn't have the money before thegovernment gave it to them.In the meantime, of course, the governmentcontinues to pay interest on those bonds.There is an incredulity regarding money mattersthat may be due in part to the fact that thesegigantic legalized swindles simply boggle theimagination.92

G.W.L. Day wrote in his book, This Leads toWar:The mystery which has shrouded the subjectof banking is every whit as deep as thatwhich obscures the hocus-pocus of witchdoctoring;and with just the same blindrespect with which the simple natives ofSumeria once gaped and goggled while theirpriests muttered their incantations andexamined the entrails of chickens. Forcenturies we have listened with awe to thedictums of finance, believing that its highpriesthood is possessed of knowledgesuperhuman and that its mysteries aresacrosanct and incomprehensible to thecommon run of man.Henry Ford put it this way:If the American people knew the corruptionin our money system, there would be arevolution before morning.What are the reasons for the disparity that wefind in the manner in which we tend to acceptsome things, but refuse and fail to know some ofthe simplest of truths with regard to our money?One of the reasons may be explained this way;We have a situation here where—if one ofyou deposits $100 in a bank account and ifyou write checks upon that deposit twice—ifyou do it in my county, I have to comearound and put you in jail and lock you up!You have committed a felony. Yet the verysame bank in which you deposited that $100can write checks on that same $100 notonce, not twice, but five or 10 times, even 20times, and can do so with impunity. This iscalled the fractional reserve system.We penalize one man who writes checkson the same money twice and send him tojail.We glorify the banker who writes checkson the same money 10 times and send him toCongress.The difference between the banker's activityand the activity of the "paperhanger," as we'll callhim, (who writes checks on the same money morethan once) is that the banker charges interest forlending the same money 10 times!93Dr. Carl F.M. Sandberg said:From those not previously familiar withthese things, have come expressions ofinterest and enthusiasm, but also reluctanceto accept as truth the fact that ourgovernment, without getting anythingwhatsoever in return, gives the FederalReserve notes to private bankers for them toloan out at interest, even back to thegovernment itself. To them this seems sosenseless as to be unbelievable.This is one reason why we find a certainincredulity with regard to accepting some of thebasic facts of life that relate to our money system.But it is not the enormity of the outrage that ismost important. It is not the fact that the swindlesof high finance amount to billions of dollars. It isthe fact that our present debt money system doesnot work, that is doing us the greatest injury.Let us consider two points about our presentsystem.First: That every dollar we carry around in ourbillfolds is a debt dollar.Dr. Willis A. Overholser said:Our present Federal Reserve System is aflagrant case of the government conferring aspecial privilege upon bankers. Thegovernment hands to the banks its credit, atvirtually no cost to the banks, for theirprivate profit. Still worse, however, is thatfact that it gives the bankers practicallycomplete control of the amount of moneythat shall be in circulation. Our presentmoney system is a debt money system.Before a dollar can circulate, a debt must becreated.The foregoing statement, with regard to themoney we use for our trade today, applies alike tothe dollars we carry in our pockets and also to theso-called checkbook dollars that banks createwhen making loans. These two sources of debtdollars make up our money.Who profits from having all our money basedon debt? To find the answer to this question, wecan refer to the controllers of our commercethemselves.

Brooks Adams, the brother of Henry Adams,wrote in his book, the Law of Civilization andDecay:Perhaps no financier has ever lived ablerthan Samuel Loyd. Certainly he understoodas few men, even of later generations, haveunderstood the mighty engine of (money).He comprehended that, with expandingtrade, an inelastic currency must rise invalue; he saw that, with sufficient resourcesat command, his class might be able toestablish such a rise, almost at pleasure . . .He perceived that, once established, acontraction of the currency might be forcedto an extreme, and that when money rosebeyond price, as in 1825, debtors wouldhave to surrender their property on suchterms as creditors might dictate.Loyd was father of the Bank Act of 1844. Hewas no idle theoretician. He obviously knew whathe was doing, and he knew that his clique couldprofit immensely by causing a boom-bust cycle toravage the economy periodically.The importance of controlling the volume ofcurrency in circulation was pointed out byPresident James A. Garfield, who remarked:Whoever controls the volume of money inany country is absolute master of allindustry and commerce.Added to the fact that all of our money is debtmoney, we need to consider a second point, andthat is our profit system: I remember as a smallboy, puzzling myself over a problem that arosewhen I was reflecting upon the profits that I wasmaking out of shoveling snow, mowing lawns,delivering newspapers, or whatever, saving up forthe day when I would go to college. I figured: If Imake a profit (and I'm supposed to be working tomake a profit) and if everybody else is making aprofit, where is the money to come from? I takemy quarters and put them in a little bank—I wastaking money out of circulation. My profit is whatI took out of circulation. If everybody else did thesame, a problem might develop.I didn't come to any conclusions, but it wasobvious to me, and it is probably obvious to anyother ten-year-old, that there is a problem withregard to our money if we are to operate on aprofit system.If every business is run at a profit, then everybusiness is creating a partial vacuum in the moneysupply and this can lead, and always has led over aperiod of time to cataclysm.This is the assistance that the free enterprisesystem affords to the controllers of our moneysystem, when it is decided by those controllers tocause a depression.Unwittingly, so long as we tolerate a debtmoney system, we contribute to our own undoing.Periodically, we get into a depression, as we'renot able to distribute to our own people the verynecessaries of life. Willing workers are left idle,producing nothing, while products rust and foodrots—for want of the money which our debtmoneysystem deprives us.A physician told me recently that the secondmost common diagnosis made today by thegeneral practitioner is malnutrition. This isAmerica in 1972.At the same time, we are sending more than 100million dollars worth of wheat to Russia, to feedtheir workers, who make more guns to kill ourboys (and more ICBMs to threaten our cities).Our own people are hungry, and themanipulators of our debt money system decreethat we send our food to our enemies.This is insane.But we are not without remedy.First, we must understand that our debt moneysystem creates a vacuum in the money supply.Second, we must understand that in order to havea healthy economy with everybody making moreand more goods and reflecting more and moreprofit we must have an expanding money supply.So, our debt money system is exactly the wrongkind of money system that we need for a healthyeconomy. Rather than continually expanding thesupply of money to meet the demands of everincreasinggoods and services that are being placedon the market, our debt money system decreesthat the money supply shall contract becauseevery dollar that is in circulation has a little tag onit, called interest, which commands that theremust be withdrawn from circulation six cents ornine cents or 12 cents or whatever the interest tagdictates, in order for that dollar to remain incirculation for another year.94

The solution to this problem is not new. We canfind it in the works of Abraham Lincoln that arenow more than 100 years old. These quotationsare from Lincoln's speeches on money reform:Money is the creature of law, and thecreation of the original issue of moneyshould be maintained as an exclusivemonopoly of the national government.The wages of men should be recognized inthe structure of and in the social order asmore important than the wages of money.No duty is more imperative on thegovernment than the duty it owes the peopleto furnish them a sound and uniformcurrency, and of regulating the circulation ofthe medium of exchange, so that labor willbe protected from a vicious currency, andcommerce will be facilitated by cheap andsafe exchanges.The monetary needs of increasing numbersof people advancing toward higher standardsof living can and should be met by thegovernment.The circulation of a medium of exchangeissued and backed by the government can beproperly regulated. . . .Government has the power to regulate thecurrency and the credit of the nation.Government possessing the power to createand issue currency and credit as money andenjoying the right to withdraw bothcurrency and credit from circulation bytaxation and otherwise need not and shouldnot borrow capital at interest as the means offinancing government work and publicenterprise.The Government should create, issue andcirculate all the currency and credit neededto satisfy the spending power of thegovernment and the buying power ofconsumers. The privilege of creating andissuing money is not only the supremeprerogative of government, but it is thegovernment's greatest creative opportunity.By the adoption of these principles, thelongfelt want for a uniform medium will besatisfied.The taxpayers will be saved immense sumsof interest, discounts and exchanges.The financing of all government enterprise,the maintenance of stable government andordered progress, and the conduct of thetreasury will become matters of practicaladministration.The people can and will be furnished acurrency as safe as their own government.Money will cease to be the master andbecome the servant of humanity.Democracy will rise superior to the moneypower.What Lincoln was referring to was the issuanceof a national currency, sometimes are referred toas Lincoln Greenbacks. I don't know how manyhere have seen or remember seeing what today arethe remaining issue of approximately 300 milliondollars that was put into circulation more than100 years ago. They are the United States Noteswhich bear the red seal. Our ordinary FederalReserve notes bear, appropriately enough, a dourblack seal. These black seals are debt money.Before they may circulate, a debt must be created.A United States note with a red seal is spent intocirculation and is interest free. There is no interestincurred in the issuance of it. There is no interestincurred in maintaining it in circulation.Now, it would be interesting to note how muchthis original issue of Lincoln Greenbacks has savedthe American taxpayer since its original issuance.February 25 of this year was the 110thanniversary of the statue authorizing the issuanceof Lincoln Greenbacks. Three hundred milliondollars of them is supposed to be maintained incirculation under statue, but they have beenwithdrawn, or at least placed into some form thatthe common variety of people rarely gets to see.They have been outstanding for 110 years.If we compute the amount necessary to redeemthe principal and interest of this 300 milliondollars that was saved 100 years ago by theissuance of Lincoln Greenbacks, we find that, atmerely 3 per cent interest, the amount ofindebtedness which would be represented, hadbonds been used instead, would be 7.75 billionsdollars. We are dealing, of course, with anexponential, and we find that if we paid 6 per cent,the amount that the Lincoln Greenbacks savedour taxpayers and our commerce is 182.5 billiondollars; and the amount at 7 percent is 511.6billion dollars.95

The importance of this device that Lincolninitiated during the Civil War (which we need tocopy if we are to emancipate our commerce fromthe thralldom of debt money) is recognized by thebankers themselves. The London Times is quotedas being the mouthpiece of high finance in JohnHowland Snow's book, Government by Treason.The Times is quoted as follows, referring to theLincoln Greenbacks:If that mischievous financial policy, whichhad its origin in the North AmericanRepublic during the late war in that country,(Civil War) should become indurated downto a fixture, then that government willfurnish its own money without cost. It willpay off its debts and be without debt. It willhave all the money necessary to carry on itscommerce. It will become prosperousbeyond precedent in the history of thecivilized governments of the world. Thebrains and the wealth of all countries will goto North America. That government mustbe destroyed. . .This is what the bankers had to say aboutLincoln Greenbacks.If we want to try to remedy the situation whereour money system, instead of expanding at a timewhen we need more money, contacts and therebyforces us into periodic depression, we need toadopt the measures that Lincoln initiated:Namely, the issuance of a national currency. If,coupled with this, we require the banks to lend ourmoney not 10 or 15 times, but limit them to threetimes, (this would be enough) and this can be doneby setting the reserve requirements at 33-1/3 percent: If these two things are done, it will not onlyprovide an immense source of tax-free revenueand provide our commerce with a source of moneythat is interest-free, but also, it will keep thebanking institutions from taking away the controlof the amount of money in circulation, which theynow do by their fractional reserve system.As it stands, by multiplying the number of timesthat the same dollar is loaned out, the bankingfraternity in fact controls much more of the totalpurchasing power available to bid for goods thanthe control that is exercised by the original issuingauthority. This can be stopped by doing these twothings: Issuing United States Notes on the onehand, and increasing reserve requirements on theother.It has been wondered why it is we are driftingslowly, but apparently uncontrollable, towardSocialism. The answer to that perplexing questioncan be found in our debt money system. If wehave a situation where there are two things thatare drawing money out of circulation, namely thedebt issuance of the currency in the first place andthe profit motive in the second place, we find thatit is necessary, in order to make the economy runat all, for this slack to be taken out.The manner in which this is characteristicallydone in modern times is by means of a governmentdeficit: Namely, the government spending moremoney than it takes in. The theory apparently is,that if the government operates at enough of a loss(and we've lost more than 400 billion dollars) thenthis will keep enough money in circulation tomake up for the vacuum that the debt-moneysystem on the one hand and the profit motivesystem on the other creates in the money supply.Yet, we all know it is impossible to borrow ourway out of debt. We know that sooner or later inthis type of operation there must be anaccounting, and with that accounting we finddepression.When we come up to a period of recession ordepression we find that the Socialists and theCommunists are the only ones around withavailable remedies. The remedy that they suggestfor the problem that is created by a restrictedmoney supply, of having more productivity thanyou can distribute, is the same remedy that wasadvocated by the fellow who decided to kill thegoose that laid the golden egg. They can take careof the problem—too many golden eggs todistribute—by killing the goose. And there is nodoubt it is possible to eliminate theseunmarketable surpluses by restricting production.But restricting production is not the answer. It'scomparable to killing the goose that laid thegolden egg.The answer is to have sufficient money.Sufficient blood supply in our economy: To haveit stay viable and to have it stay prosperous. Thiscan be done only if we get away from our debtmoneysystem which forces us periodically intodepression.Another measure that we may consider inattempting to deal with the problems that we havein a money system that is basically diseased, is totry to establish some means of local control oflocal purchasing power.96

The Roman Empire survived for manyhundreds of years on the basis of a split control, asplit authority over its money system.The pounds, shillings, pence system in England(which was being phased out only last year) is thevestigial remainder of the original Romanmonetary system. The pounds, the gold coinage,were the exclusive prerogative of the PontifexMaximus, or Caesar; the silver coinage was vestedin certain favored municipalities and, ex senatusconsulto, in certain favored princes. The bronzecoinage, however, which, as the coinage of everyday commerce allowed the Roman empire tosurvive, was de-centralized.And in our own country the original theorybehind the Federal Reserve System was that itwould provide de-centralized control. With 12 decentralizedFederal Reserve Banks, we were told,we would have an ability to adjust local needs tolocal demands. We know now that this was merelya pretext. It was a gigantic fraud. It never did andnever was intended to do any such thing. It was aEuropean-style central bank subject to the controlof money manipulators which would keep us fromhaving any local control of our local purchasingpower.What can we do individually in our states tooffset this? One suggestion is to have other statesfollow the example of North Dakota. NorthDakota has a bank. North Dakota is the only statein the Union that does have a bank. The Bank ofNorth Dakota is owned and operated by thatstate. It allows a certain limited amount of localcontrol of local purchasing power.Local improvements are financed through thatbank. Student loans are supported through thatbank. You would not find it possible in NorthDakota to get the people there to give up the Bankof North Dakota.We have in other parts of the country, banksthat are similarly named, but the Bank of Nevadaor the Bank of Oregon or the Bank of California inevery instance is a state chartered, privatelyownedfinancial institution.If we wish to copy the example of the Bank ofNorth Dakota we will find that that bank providedits people with a source of credit that survivedeven the great depression of the 1930's.Coupled to this we can institute in our localcommunities a certain amount of local purchasingpower issued by the community itself. This can bein either one of two forms:In one case, the merchants of a particularcommunity can agree to honor each other'schecks, payable to bearer and insured againstbeing cleared through the bank, which wouldcancel them, but intended to circulate as a localcurrency. Those merchants in that particularcommunity will find that they will have authorityto control a certain amount of their own localpurchasing power. They will find that their ownpeople, on whom they depend for livelihood, areless likely to trade elsewhere than they will be intheir own local community, as long as thecurrency that is there is circulating locally.The other way to obtain local control of localpurchasing power is by means of local or countyvouchers circulating as currency. These voucherscan be made substantially interest-free under moststate statutes. If this is done, local improvementscan be made without our local governments goingto the lending institutions to borrow back the verytax money that the local communities have withthe commercial financial institutions.These two means can combine to give us acertain amount of local control of local purchasingpower. But the most important thing for us toconcentrate on is the emancipation of our entirenational currency from the thralldom of controlby the money manipulators. This we can do byconcentrating upon the issuance of nationalcurrency, in debt-free form.In case too many people become alarmed of theconsequences of this, it is to be pointed out that wenow have a certain amount of non-interest bearingmoney in circulation. All of our fractionalcurrency: That is to say, the pennies, the nickels,the dimes, the quarters and the halves, all of theseare non-interest bearing in their form. They aremanufactured in our mints; they are paid intocirculation; circulate freely; they do not drawinterest, and they provide the government a veryvaluable source of revenue.In the fiscal years 1966 through 1970, inclusive,the amount of seigniorage paid into the treasuryby the mints amounted to more than four billiondollars. The profit ratio on this type of currency issomething on the order of six-to-one. (You end upwith six times as much currency as you have costgoing into making the fractional coinage.)97

The cost ratio in making the Federal Reservenotes is more on the order of 600 to 1. And duringthese same four fiscal years, in spite of the factthat more than 50 billion dollars in FederalReserve notes was manufactured by the Bureau ofPrinting and Engraving and turned over to thebanks—not one cent in seigniorage was paid intothe treasury!In arresting this swindle and in emancipatingour commerce from a debt-money system we willfind that the threat that is now posed by theSocialists and the Communists largely disappears.Their remedies for our ills are being acceptedgradually for two reasons:One—There are no competing remedies beingoffered.Two—Our debt-money system compels thegovernment to spend more than it takes in,because this is the only way we can keep theeconomy going!And this defect, this use of a debt-moneysystem, is what is forcing us gradually, andsometimes more rapidly than many of us like tothink, down the tube to Socialism.By liberating our economy from its debt-moneysystem, we will be safeguarding our own freedoms.Further than this, we will be protecting the worldfrom a threat which seems ominous enough now,but if we usher in the era of prosperity that isavailable to us and that the bank controllersthemselves admit will come to us, we will find thatthe threat of Socialism and Communism, even onthe international scale, will largely dwindle andfade away.Therefore, we must order our priorities. Wemust decide as individuals whether we are going toaddress ourselves to the problem of correcting agrave injustice that is perpetrated on our economyand on our government, by getting rid of a debtmoneysystem. We must order our priorities anddecide that we are going to spend our money andgive of our substance and ourselves to this fight,rather than be distracted by the current basketballgame, football game or by any number of otherdiversions that are continually waved before us.If we want bread and circuses, then what we'regoing to get is Socialism. If we want to make ourprincipal pastime, our principal activity, therunning of our own affairs and the reinstallationof Constitutional control over our currency, thenwe will find that the support of such organizationsas the Oregon Legislative and ResearchCommittee will reward our individual efforts,which will be responsive to a real national andlocal need.Therefore, those who have elected to forego theentertainments of the hour to come here to studythe question of what to do about our moneysystem are to be commended. It is the people righthere in this auditorium upon whom the well-beingof our Republic rests.Those of us who have studied the AmericanRevolution realize that it took a very smallpercentage of the American people to accomplishthat feat. The burden rested upon relatively fewshoulders. The fact that we can see about usothers who appear to be more interested in otherthings should not dissuade us. We should beprepared to give of our substance and our time tosuch organizations as this, that have a positiveremedy that is something other than a Socialistremedy: A remedy that has been proven; a remedythat will work; and a remedy for which ourposterity will thank us, if we are able toaccomplish it.CONGRESS CAN FREE U.S. FROM BANKERS DEBT MONEY"There is well over $100 Billion in FederalReserve Notes now in circulation," said Mr.Horton* in a letter to Senator Paul Laxalt,Chairman, Senate Appropriations Committee."Replacing $100 Billion in interest-bearingFederal Reserve Notes with a like amount of U.S.Notes that are interest-free in their originalissuance saves the American taxpayer and theU.S. economy interest on $100 billion every year."A draft bill is enclosed," he said, "that could beclipped to the Memorandum on IncreasingCirculation of U.S. Notes that was forwarded toyou through your Reno office last November."* T. David Norton, Counsel, Committee toRestore the Constitution, is a Carson City,Nevada, Attorney.98

The mechanics for immediately resolving theproblem of America held hostage by a megabankdebt-money system are set out in Horton's letterand attached exhibits, Memorandum onIncreasing Circulation of U.S. Notes, and, "A Billto Provide for the increase in the circulation ofUS. Notes. . .," reprinted in the same sequence,below._____________________18 January 1982Honorable Paul Laxalt315 Russell Office BuildingWashington, D.C. 20510Dear Paul,Princess Catherine Caradja from Romaniawrites:"I have never understood how you in theU.S.A. left the gain on the money to othersnot, as in Europe, to the State itself: Afault."To implement the issuance into circulation of$100 Billion in U.S. Notes, the change in 31 U.S.Code, Section 402, is quite simple. A draft bill isenclosed that could be clipped to theMemorandum on Increasing Circulation of U.S.Notes that was forwarded to you through yourReno office last November (another copy isenclosed).The fact that $100 Billion is being borrowed onthe New York money market shows that theappropriations have already been made and themoney will be spent. Whether that money will be"debt-money," with interest ad infinitum, orinterest-free U.S. Notes, depends upon whether 31U.S.C. 402 is amended.There is well over $100 Billion in FederalReserve Notes now in circulation. Replacing $100Billion of interest-bearing Federal Reserve Noteswith a like amount of U.S. Notes that are interestfreein their original issuance saves the Americantaxpayer and the U.S. economy interest on $100Billion every year.The effect on interest rates of reducing federalborrowings by $100 Billion is outlined in theMemorandum.Section 404 provides that U.S. Notes be kept incirculation:Except as provided in Sections 403, 406,and 821 of this title, it shall not be lawful forthe Secretary of the Treasury or other officerunder him to cancel or retire any more of theUnited States legal-tender notes. And whenany of said notes may be redeemed or bereceived into the Treasury under any lawfrom any source whatever and shall belongto the United States, they shall not beretired, canceled, or destroyed, but they shallbe reissued and paid out again and kept incirculation: Provided, that nothing hereinshall prohibit the cancellation anddestruction of mutilated notes and the issueof other notes of like denomination in theirstead, as provided by law: And providedfurther, That in the event of anydetermination by the Secretary of theTreasury under section 915 of this title thatan amount of said notes has been destroyedor irretrievably lost and so will never bepresented for redemption, the amount ofsaid notes required to be kept in circulationshall be reduced by the amount sodetermined.This last provisal keeps the Treasury secretaryfrom worrying about keeping in circulation theentire amount of U.S. Notes issued. If notes arelost or destroyed, it results in legitimate profit tothe government. For example, Section 405a-2provides for the writeoff of silver certificatesdeemed destroyed, lost, or held in collections. It isan easy matter to adjust the amount of currencyissued to make up for that which has been takenout of circulation. The profit from this type ofoperation properly belongs to the Treasury, and isa form of non-tax revenue.MEMORANDUM ON INCREASINGCIRCULATION OF U.S. NOTESAmending 31 U.S. Code 402 to provide for thecirculation of $100 Billion in U.S. Notes ratherthan the present $300 Million can be expected tohave the following results:a) By providing nearly $100 Billion in taxfreerevenue, it will be unnecessary for theFederal Government to bid up the price(interest rate) of available credit in order tofinance its operation. Chairman Volckersays that there should be $100 Billion lessFederal borrowing on the money market inorder to bring interest rates down. Replacing99

interest-bearing Federal Reserve Notes withU.S. Notes that are non-interest-bearing intheir original issuance will relieve thepressure currently forcing interest rates up.Reducing interest rates will unshackle theeconomy and allow production anddistribution to get moving.b) Retaining $100 Billion of U.S. Notesby forbidding their cancellation (as providedin Section 404 of 31 U.S. Code) will keep$100 Billion of the public debt in circulationas currency in interest-free form. The longtermaffect will be to save annually theinterest on $ 100 Billion (by 1972, the savingsof the $300 Million authorized by Section402 of 31 U.S.C., when compared with"conventional" debt-money financing wasover $511 Billion).c) By re-asserting its control over thenation's currency, as required by Article 1,Section 8, Clause 5 of the U.S. Constitution,Congress will be serving notice on thecontrollers of the present system of debtmoneythat the economy may no longer beheld hostage to increase bank profits.d) A debt-free currency that sparks theeconomy will abate pressures for unconstitutionalsocialist spending programs,and make possible further reductions inFederal spending and taxes.DEMISE OF THE GERMAN REPUBLIC97th CONGRESSS _______2nd SESSIONIN THE SENATE OF THE UNITED STATESMr. Laxalt introduced the following bill: whichwas read twice and referred to the Committee onA BILLTo provide for the increase in the circulation ofU.S. Notes from $300,000,000 to$100,000,000,000.Be it enacted by the Senate and House ofRepresentatives of the United States of America inCongress assembled.Sec. 402 of Title 31 of the United States Code ishereby amended to read as follows (new materialunderscored; old material lined through):Sec. 402. Limitation of amount of United Statesnotes in circulation.The amount of United States notes outstandingand to be used as a part of the circulating medium,shall not exceed the sum of $100,000,000,000.$300,000,000 which sum shall appear in eachmonthly statement of the public debt, and no partthereof shall be held or used as a reserve."There is a pattern in the situation of chaos inAmerica," said H.I.H. Aleksei Romanoff in theAugust 1979 issue of Double Eagle, "similar invarious areas to such a pattern in Germany beforethe usurpation of power by the Nazi gang underthe leadership of the Fuehrer Hitler."The Nazis polled fewer than a million votes atthe 1928 election in the German Republic," saidRomanoff, "and were represented by only 12 seatsin the German Congress (Reichstag). But with theWall Street crash of 1929 disaster came. Germanywas like a man who has been leapfrogging chequesinto and out of his bank account and is suddenlylet down by the non-arrival of the credit intendedto cover the post-dated debit made the day beforeyesterday and due to be presented today."By 1932 there were five million unemployed,and the disease of hopelessness spread throughoutthe German Republic. Food, warmth and shelterwere pulled out of the people's grasp with terrible100frequency. Savings vanished in a wave ofprofiteering and a desperate effort to pay themortgages on farms and houses. Millions ofGermans saw the apparently solid framework oftheir existence cracking and crumbling. In suchcircumstances men are no longer amenable to thearguments of reason. In such circumstances menentertain fantastic fears, extravagant hatreds andextravagant hopes. And in such circumstances theextravagant demagogy of Hitler began to attract amass following as it had never done before."In these conditions," said Romanoff, "it wasnot only the Nazi Party which brought Hitler tounlimited dictatorial power. Indeed, it was theGerman Congress (Reichstag) which, subverted byCommuno-Fascist cunning intrigues, in conditionsof threats, bribery, murder and treason, broughtHitler to the Chancellorship of the GermanRepublic in January 1933, bringing also an end tothis German Republic and to so-called democracy."

NINE'Where does the Federal Reserve get themoney with which to create bank reserves?Answer: It doesn't get money, it creates it.When the Federal Reserve writes a check for agovernment bond it does exactly what anybank does, it creates money . . . it createdmoney purely and simply by writing a check.And the recipient of the check wants cash,then the Federal Reserve can oblige him byprinting the cash - Federal Reserve Notes -which the check receivers commercial bankcan hand over to him. The Federal Reserve, inshort, is a total money-making machine."CONGRESSMAN WRIGHT PATMANFEDERAL RESERVE PLUNDER*There is a theory known as the Theory ofCognitive Dissonance (TCD) which holds that themind involuntarily rejects information not in linewith previous thoughts and/or actions. Braceyourself, the following message may be entirelydifferent from anything you believed to be trueheretofore. If you are unaware, you are unaware ofbeing unaware!—Merrill Jenkins, M.R.It can be extremely difficult for well fed,comfortable and amused people to conceive of asystem of plunder that they, their parents andgrandparents were born into along with theplunderers, their parents and grandparents, yetsuch failure to see does not prove the nonexistenceof that system, it only insures that it willcontinue until the people are stripped of all of theirwealth and reduced to serfs. Throughout history,governments have plundered their citizens.Ancient governments clipped the edges of coinsand melted the clippings to make new coins, which*By Dave Wilber, economics writer, P.O. Box22431, St. Louis, MO 63126.also were clipped. The serrated or milled edge ofcoins was intended to prevent that practice. Astime passed, the plunderers progressed to debasedcoinage, that is, base metals were switched for allor part of the precious metals in the coins. Stilllater, non-redeemable paper currency was used tosteal the fruits of men's labor. The mostsophisticated plunder yet inflicted on trustingcitizens combines the use of controlled newsmedia; paper and metal tokens; credit (monetizeddebt) and imaginary taxes. The news media andschools deceive the people to believe that coppertokens and credit are "money"; that prices areinflation and that some of the "money" must bereturned to the plunderers as taxes even thoughthe plunderers have access to unlimited "money."The plunderers' creation and financing of foreign"enemies" helps to convince the victims that taxesare needed to support government while largess tothe most robbed poor buys votes to perpetuate theplunder. The ancient Chinese carved in stone,"Disperse the money, collect the people." As theRomans had bread and circuses, we today, havefood stamps, football, foosball and fools on TV adinfinitum. We must be distracted at any cost, after101

all, when the plunderers originate "money"themselves, cost, to them becomes meaningless!With 50 different ways to spell "theft" in theEnglish language, the most insidious method,inflation, is seldom thought of as being a criminalact. Unprosecuted fraud is no less fraud! In spiteof what the inflater controlled news media tellsyou, inflation is bank credit or any purchasing unitthat the first party to use gave up nothing to get.Counterfeit currency is a good example. Everhigher prices are the result of a privileged groupintroducing into and bidding in the marketplace,fraudulent purchasing units and getting somethingfor nothing. Check your billfold. Any bills youhave without a promise to pay on them arecounterfeit! That is, if counterfeit can be definedas anything fraudulently labeled to be somethingthat it is not. Until 1963, our currency bore apromise to pay x dollars to the bearer on demand.How could the paper become what it oncepromised to pay by simply deleting the promise? Ifit promised 10 oranges, how much orange juicecould you squeeze from one 10 orange note?Congress sanctioned this form of theft bypassage of the infamous and unconstitutionalFederal Reserve Act on Dec. 23, 1913. It was onthat day that today's runaway inflation began toaccelerate. The purported purpose of that act wasto create an "elastic currency," a "currency" thatwas superior to rubber checks in that it could bestretched but it would not "bounce" back at theissuers. This feat was accomplished simply byseeing that there was no space provided on theirchecks (dollar bills) for endorsements. Clever, huh?Their unfunny money was needed to promotebooms like World War II and busts like 1929neither of which could have occurred withouttheir fantastic elastic. Modern wars require muchmodern "money" and the Federal Reserve"system" is the only source of such unlimitedlarcenous devices. Please see your dictionary for'device.'In passage of that act and creation of a privatecorporation, deceitfully named the "FederalReserve," Congress and President WoodrowWilson sanctioned what inflaters were once hungfor, that is, fractional reserve banking. In so doing,they showed their contempt for the Constitutionthat they swore to uphold. (See Art. 1, sec. 10,U.S. Constitution.)When the private corporation now known asthe "Fed." issued their first fraudulentirredeemable note in 1914, they began to fill thelake behind the dam that is now ready to burst anddrown us all including many bankers in a sea ofspurious specie.Knowing the possibility of such a disaster, themoney manipulators devised a "spillway" for their"dam" which became the 16th amendment(income tax). As they issued more and morefraudulent notes to expropriate our wealth, agraduated income tax was necessary to relieve thepressure of competitive bidding of their fraudulentdevices by the unsuspecting non-bank public. Apressure which unrelieved, would ultimately cracktheir "dam." The same duped Congress in thesame year, passed the 16th amendment for thatpurpose. It was falsely claimed at the time that thetax was needed to "pay the interest on the debt"and that it would "soak the rich." Apparentlyenough congressmen believed that propaganda. Itwas in fact to keep the rich from getting "soaked"by their "dam" bursting!The tax started at 1% and was never to exceed3%. That wasn't too hard to swallow, was it?When they saw that "spillway" was inadequate,they carefully planned another. It was called"Social Security." Since they couldn't findjustification for increasing income taxes, a brandnew tax was the answer. To make it morepalatable to the people, employers were compelledto pay one half. It started out at just 1% on amaximum of $3,000 which came to only $30 peryear. Who could argue about that? Wow! Onlythirty bucks a year and no worries in your old age.Ponzi was a piker! How much are you beinggigged for now?Their whole scheme wasn't too complicated.They first established that they would havereserve requirements of 40%. That meant thatwhen a sucker deposited ten dollars in gold in their"system," they issued a paper certificate that borea promise to pay ten dollars in gold to the beareron demand. They gave that certificate to theirmark (sucker) and simultaneously they issued 15Federal Reserve notes while they kept the gold!The people saw nothing wrong with that, after all,they could return their certificate to the bank andredeem their gold anytime they wanted to. Theysimply didn't see the barb on the hook; therewasn't enough gold for all of the certificates andnotes outstanding, only 40%. As time passed, theyreduced their reserve requirements to only 25%,which meant that for every dollar of gold102

deposited, they issued one certificate and 3 noteswhile they kept the gold. Abbott and Costellomade a fortune with the routine, one for you, twofor me, three for you, four for me, etc.Where there was once just one purchasing unit,now there were five, one gold coin; one papercertificate for gold; and three Federal Reservenotes, all but the gold coin were ready to be bidagainst each other causing prices to rise. Take notethat we said rising prices were caused by the excesspurchasing units. The Federal Reserve notes werethe inflation, higher prices were the result of theinflation; the extra purchasing units. (Please referto the third sentence of paragraph three above.)The certificate would be inflation too, if and whenthe gold coin was being bid in the marketplaceagainst it. Theoretically, prices would quintuple ifall of the purchasing units were being bid againsteach other at the same time. The income tax wasinstituted to remove from bidding, some of thepurchasing units held by the non-bank public. Theprimary function of all Federal taxes and manystate taxes today is the same as income tax; reducebidding of non-bank public. National HealthInsurance tax will cause a substantial reduction inprivate spending if passed.When the Federal Reserve wrote in TheNational Debt, "The Federal Government incooperation with the Federal Reserve, has theinherent power to create money—almost anyamount of it," you don't need Einstein to explainthat taxation is not used to support government!Several Federal Reserve and IRS publicationsopenly admit or at least allude to the truth.Every Federal Reserve note issued was one unitof inflation for each unit (dollar) of money thatappeared on the note. By 1933, the inflaters heldenough notes to claim all of the gold so they hadtheir front man, the con man of all con men, FDR,issue an executive order declaring that it wasagainst public policy for the people to use gold intrade. When 95% of the suckers turned in theirgold, the "price" of gold was changed from $20 to$35 per ounce. That's what you call getting them"coming and going." Not only had the people beenrobbed of their gold, they were conned to believethat the dollar was something tangible, concreterather than abstract, and this misconceptiongreatly facilitated further plunder of their silver.The dollar, since April 2, 1792, has always been ameasurement of money, it is not and never wasthe money. How can anyone say "dollars perounce" when the dollar itself is a measurement?Title 31, United States Code 371, tells us that themoney shall be expressed in dollars. What furtherproof does anyone need that dollars are not thesame as money?Until June 24, 1968, silver coins were current asmoney. What took their place? Before anyone tellsthe IRS that they received or spent dollars ofmoney, it would be advisable for them to learnwhat became current as money by law, whensilver coins ceased to be the money. Anyonecharged with tax offenses should file aninterrogatory, asking the revenue agents to tellthem what commodity is current as moneypursuant to Title 31, U.S.C. 371.After the crash of 1929, many people lostconfidence in the banks and were more inclined tomake "deposits" in their back yard. When theFederal Reserve tells us today in Modem MoneyMechanics that our bank deposits are merely"book entries," do you think that the F.D.I.C. wascreated to insure depositors against loss of theiruninflatable silver or was this agency createdsolely to instill confidence in the Federal Reserve"system" while "book entries" were systematicallyswitched for their uninflatable silver? TheEconomics textbook in one St. Louis County highschool reads: "To help restore the public'sconfidence in banks . . . Congress passedlegislation setting up the F.D.I.C." There's youranswer!! Further they state: "Income tax is one ofthe government's most potent weapons. . ."Income tax, a weapon? Yes, it is but their mostpowerful weapon is fear. The average citizen is socowed with fear that they'd rather play the gameand send reports of "dollars" earned and spent toIRS than to ask the IRS what the money is by lawthat those dollars are quantities of. Also, on page3, of MMM, the Fed readily admits the mainreason we accept their spurious devices is becauseof "confidence." Are they or are they notessentially admitting that they operate aconfidence game? "By their fruits, ye shall knowthem!"We were told in 1965 that silver got "tooexpensive" to use as money. Silver never gotexpensive! The Fed. had simply issued so manyfraudulent claim checks for silver that to preventexposure of their crime, reserves had to be reducedto zero. In 6 years time our circulating coinsbecame silverless. The Federal governmentprofusely publicized the fact that the new "dollar"coins contain only 3 cents worth of copper andnickel. Those who accept them sustain a 97% loss103

and tell IRS that they had a profit! Speaking ofmind control in 1984 . . . it's here!In 1920, writing in Economic Consequences ofthe Peace, English economist, John MaynardKeynes said, "Lenin was certainly right, there is nomore surer, more subtler means of destroying theexisting basis of society than to debauch thecurrency. By a continuing process of inflation,(credit usage) governments can confiscate secretlyand unobserved, an important part of the wealthof the citizens. The process engages all of thehidden forces of economics on the side ofdestruction and does it in a manner that not oneman in a million can diagnose. 1 ' Further on hewrote, "If governments should refrain fromregulation (taxation) and allowed matters to taketheir course (price explosion), the worthlessness ofthe money becomes apparent and the fraud uponthe public can be concealed no longer." How true!In 1971, Richard Nixon said, "I am a Keynesian ineconomics." The high school text (above) says theKeynes theory is "most widely accepted byeconomists in the nations of the Westernindustrial world." This writer believes that weneed never fear an invasion as long as we haveKeynesian economists showing 15,000commercial bankers how to destroy the existingbasis of society by issuing credit that they call"money."Writing to Amos Bruce of St. Louis, theHonorable Ron Paul of Texas said,Strictly speaking, it probably is not'necessary' for the federal government to taxanyone directly. It could simply print themoney it needs. However, that would be toobold a stroke, for it would then be obvious toall what kind of counterfeiting operation thegovernment is running. The present systemcombining taxation and inflation is akin towatering the milk: too much water and thepeople catch on.There you have it from a congressman!Taxation is used to get some of the "water" out ofthe "system" so that we won't "catch on" thatgovernment takes everything they want from uswithout compensation in total violation of the 5thamendment. Legal tender laws compel us toaccept their "water" and we don't complainbecause the same laws compel others to accept itfrom us. Only if we hurry, can we obtainsomething of value equal to what we surrenderedfor their illusory, watery "payment." Their"water," like water, cannot flow uphill to itscreator as taxes.When the dollar by law is a measure of wealthand the Federal Reserve admits in print that theyhave removed all of our wealth from our banksand reduced all deposits to "merely book entries,"there are no tax dollars going to Washington butthere are unlimited checks coming fromWashington as salaries, pensions, grants, socialsecurity, food stamps, welfare, warfare, federalfunds, "revenue" sharing, foreign aid, adinfinitum. There is no such thing as taxpayer'smoney, it's all federal "money"! The aim is to getas many individuals and political subdivisions aspossible dependent on federal checks that arenonpayable! Total dependency is total slavery!You can't bite the hand that feeds you! Who willfight the unconstitutional federal monster whenthey are dependent on it? Very few! All wealththat Washington takes is theft but the victims donot recognize it as such because they don't end upempty handed. They get checks which authorizethem to steal a like amount (less taxes) from theirneighbors.To complete the communizing of America bythe elite, all that is necessary is to legislate ourremaining freedom away from us and the massesare programmed to promote that legislation, ERAbeing a classic example. Marx's 8th plank calls for"Equal liability of all to labor," Income tax,inheritance tax and Federal Reserve filled Marx's2nd, 3rd and 5th planks while the ICC, DOT,FCC, CAB and postal monopoly fill the 6th and"free" education fills the 10th. We are beingplanked into submission! "Freedom is the absenceof legislation!" —Merrill Jenkins.When we accept the debt instruments of aprivate corporation for all that we produce, thenthrough fear of imprisonment, return a graduatedpercentage of those green papers to the sameprivate citizens who first got them for nothing, ifthat isn't slavery, what is? Kublai Kahn did thesame trick in the 13th century with strips ofimprinted mulberry bark!To regain our freedom, all legal tender lawsmust be repealed and 100% redeemable currencymust be instituted. Government by the producersof wealth can exist only when wealth is used as amedium of exchange and public servants aredependent on being paid with some form ofwealth. Inflation is bank credit. Bank credit is thecancer of civilization.104

STATE BANK OF NORTH DAKOTAA SOLUTION TO FEDERAL RESERVE PLUNDERThe privilege of creating and issuing moneyis not only the supreme prerogative ofGovernment, but it is the Government'sgreatest creative opportunity.LINCOLNBanking institutions are more dangerous toour liberties than standing armies.JEFFERSONThe right to coin and issue money is afunction of Government. It is a part ofsovereignty and cannot, with safety, bedelegated to private individuals.W. J. BRYANThese American leaders advocated the use ofpublic credit by the public, as provided in Article I,section 8, clause 5, Constitution of the UnitedStates.Today, many recognize that provisions of theConstitution which require that Congress issueand control the volume of money are violated.The power to issue our currency and credit haspassed to private interests for their exploitation.The sovereign state, however, can soften theeffects of these violations. By legislative remedythe state can alleviate crushing interest rates andreduce rampant inflation. To challengemonopolistic control of the U.S. economy thestate can establish state owned and operated banksto handle public credit.The Bank of North Dakota, formed by Act ofthe State Legislature in 1919, is such a bank. It'sphilosophy is threefold:To encourage and promote agriculture,commerce, and industry in North Dakota.To provide the most efficient andeconomical financial services to the State, itsagencies, and instrumentalities.To provide professional assistance wheneverpossible and wherever it will encourage andpromote the well being and advancement ofNorth Dakota and its citizens.Mr. H.L. Thorndal, President, Bank of NorthDakota, testified on the advantages of a state bankbefore a Committee of the Ohio State Legislatureon 15 May 1979. His remarks, based upon asuccessful pattern of experience, points the way toa solution to Federal Reserve banking plunder.MR. H. L, THORNDAL, PresidentSTATE BANK OF NORTH DAKOTAMr. Chairman, Members of the Committee:Thank you for allowing me the opportunity totalk with you. My name is Herb Thorndal. I amfrom Bismarck, North Dakota and I am Presidentand Manager of the Bank of North Dakota, theonly wholly state-owned bank in the UnitedStates. I, and most all of my fellow NorthDakotans, are proud of the Bank of NorthDakota. We think we are doing things for thecitizens of our state that either wouldn't get done,or at least not done as well, if it wasn't for theBank of North Dakota's efforts.Let me give you a little history of the Bank ofNorth Dakota, and what we are presently doing.Bank of North Dakota was established by Act ofthe State Legislature in 1919. It was an outgrowthof the populist movement that started in the lastcentury and culminated with the Non-PartisanLeague gaining control of North Dakota stategovernment in the election of 1918. Even the mostoptimistic boosters of the idea of a state-ownedbank would be surprised by the magnitude of itssuccess today. The Bank of North Dakota wascreated for the purpose of "encouraging andpromoting agriculture, commerce and industry,"as stated in the enabling act. Too often farmers inNorth Dakota, at that time, were taken advantageof by out-of-state interests, both as to marketingfarm products and financing operations. Most ofthe banks in North Dakota, today, as they were 58years ago, are quite small; and adequate financingoften was difficult to obtain, not only for thefarmer but for small manufacturing firms,economic developments, housing, student loansand other socially desirable projects. TheLegislature in 1919 hoped the creation of a stateownedbank would alleviate some of the financialproblems the citizens of the State wereexperiencing. The Bank of North Dakota is theonly one of its kind in the United States. From itsstart, the Bank of North Dakota did not proposeto enter into competition with existing banks, butto cooperate with them and assist in developingand coordinating all parts of the financial services105

of the State, so as best to meet the needs of thepeople. That policy has continued to the presentday. The Bank of North Dakota feels that it is a"partner in progress' with other financialinstitutions in North Dakota. All one hundredseventy-three of North Dakota's banks maintainan account relationship with the Bank of NorthDakota. At the time of the creation of the Bank ofNorth Dakota, the Legislature also created theState Mill and Elevator. The State IndustrialCommission was also created by the 1919Legislature, and was charged with the operation,control and management of the Bank and theState Mill and Elevator. The IndustrialCommission is composed of the Governor, whoacts as Chairman, the Attorney General and theCommissioner of Agriculture. This is, I believe, asit should be. In order to be sure the Bank respondsto public needs, it should be controlled by electedofficials. However, I believe the State Treasurershould be on the board.The Bank of North Dakota officially openedbusiness on June 20, 1919, with $2,000,000 incapital. This $2,000,000 in capital was providedthrough the sale of Bank Series Bonds, which havesince been retired out of the Bank's earnings.Since 1919, through 1978, the Bank has madenet operating profits of over $122,146,000. TheBank had total resources of over $616,000,000 inAugust of 1978, when it "peaked" at its seasonalhigh. It had over $581,000,000 in resources lastweek, as we approach our seasonal low.The original act provided all public funds shouldbe deposited in the Bank of North Dakota. Thiswas changed by an initiated measure in 1921 toprovide that all political subdivisions, with theexception of the State, itself, make deposits eitherin private institutions or in the Bank of NorthDakota. At the present time, the Bank of NorthDakota has approximately 10% of all publicdeposits, other than the State's. Because the lawstates that all monies of the State and Stateinstitutions must be deposited in the Bank ofNorth Dakota, we do not have the problem ofallocating funds to various financial institutions;and all political pressures are eliminated. The Bankof North Dakota pays competitive interest rateson state deposits that we set up as TimeCertificates. The Bank does accept time andchecking accounts from individuals andcorporations, but is prohibited from makingprivate and commercial loans, with the followingexceptions: Veterans Administration (VA) andFederal Housing Administration (FHA)guaranteed home loans and Federally InsuredStudent Loans (FISL), and loans to actual farmers,if secured by real estate, and not exceeding 50% ofvalue, and to North Dakota residents if secured bystock in a North Dakota bank. The Bank of NorthDakota may participate with other banks, savingsand loan associations and credit unions in loansmade by them. It may loan to the variousdepartments of state government and any politicalsubdivision within the State. All deposits in theBank of North Dakota are guaranteed by the Stateof North Dakota, and we feel the State has manymore assets than the Federal Deposit InsuranceCorporation.Earlier I mentioned that one of the mainpurposes in organizing the Bank was to promoteagriculture, and in this connection, from 1919 to1932 inclusive, the Land Department of the Bankmade a total of 16,482 loans on 4,219,130 acres ofland, amounting to $38,573,000. These werefinanced by real estate bonds issued between 1921and 1932. All of these bonds have long since beenretired. In 1933, 1934, and 1935 approximately8,000 tracts of land were refinanced through theFederal Land Bank and the Land BankCommissioner. Of the remaining 8,500 tracts,about 2,000 were put on an amortized loan basisby the Land Department. This left approximately6,500 tracts which the Bank took by foreclosure orquit claim deeds. These were sold back to theformer owners, where possible, and to otherinterested parties. During 1941, to the present, theBank has retained 50% of the mineral rights,which previously was 5%. All of these tracts havenow been sold. We are out of the real estatebusiness. As I stated, since 1941, the Bank hasretained 50% of the mineral rights on the landthey held and were selling; which totaledapproximately 750,000 mineral acres. As of July31, 1977, the Bank has received oil revenue in theform of bonuses, rentals, and royalties in theamount of $9,669,817.83. This is paid directly tothe State Treasurer and is not part of the Bank'snet operating earnings, as (earnings) reportedpreviously. The mineral leasing function wastransferred to the State School Land Departmentin 1977.Because of the collapse of the agriculturaleconomy in the 1920's and 1930's, the Bank wasnot the panacea for North Dakota financial

problems that the State had hoped it would.However, it went a long way in alleviating theproblems created by the agricultural economycollapse of the 1920's and 1930's.In 1973, we started to get back into the farmreal estate loan business. We now have over 460farm ownership loans, amounting to over $14million. These 460 and some loans amount to justover 1% of all North Dakota farmers. We alsoservice about 1400 farm real estate loansamounting to about $45 million that belong to theState School Land funds. We expect to be evenmore involved in farm ownership real estate loansin the future, as we try to get and keep youngpeople started farming.We do have a program to finance beginningfarmers. Last summer (1978) we started a programin cooperation with the Farmers HomeAdministration, to finance land purchases forbeginning farmers. Basically, this program extendsterm to 40 years, may waive principal paymentsthe first two years, and allows a reduced interestrate the first five years of the loan. This helps the"cash flow" of a beginning farmer during the "startup" years, which are the most critical for any newbusiness. We made 38 loans amounting to $1.8million the first 4 months of the program, and areprocessing another $3.2 million as of today. Imention this to show that a state-owned bank canthink new, innovative ideas, and put them intopractice in a minimum amount of time, andwithout adding people to "the bureaucracy."During the 1940's and 1950's, the Bank becamethe leading underwriter for political subdivisionbond issues. The last few years the Bankunderwrote and sold over $12 million per year ofthese tax exempt issues, over $17 million in 1978.Since the Bank pays no income tax, you might askwhy do we buy tax-exempt securities? The answeris to provide an efficient and economic service tothe instrumentalities of our state. Many of theseissues are so small that they preclude publicbidding. In the last few years, we have institutedan aggressive marketing program and our totalportfolio dropped from $30,000,000 to less than$10,000,000. A recent Legislative Session alsopassed a North Dakota Bond Bank law, which isoperated out of the Bank of North Dakota,allowing us to tap the national market with largeissues backed up by numerous smaller tax exemptissues from around the state. Through the NorthDakota Industrial Development Act, the Bank ofNorth Dakota became the leading underwriter ofMunicipal Industrial Revenue Bonds. Theseunderwriting activities are particularly helpful in astate that does not have dealer banks or homebased bond dealer underwriters.After World War II, the Bank became one ofthe major lenders of financing VeteransAdministration (GI) and Federal HousingAdministration (FHA) insured home loans. Thisdepartment has since expanded to where today ithas over $89.4 million of these mortgages fromthroughout the State. We were the first institutionin the State to accept subsidized housingprograms, such as the FHA 235 Program. TheBank of North Dakota instituted its own InterestSupplement Program to aid home buyers. Wedetermined that a large segment of the State'spopulation could not buy a home at today's rates.From our past experience with the FHA 235Program, we knew that interest supplementprograms work, and helped some of our citizensbecome homeowners. Under our program, allloans are insured or guaranteed by the FederalHousing Administration or the VeteransAdministration. We take 80% of a household'sincome, subtract an additional $300.00 perdependent, and take 20% of the balance todetermine what a household can pay for housing.We then project this to a scale to determine therate charged, in no case more than 3% under theallowable FHA rates. This subsidy will in no caseextend beyond the intitial six years of the loan. Weexpect to reach many people in the $14,000 to$17,000 income range and help them to becomehomeowners.North Dakota needs a housing finance agencythat could issue bonds, backed up by thesemortgages and this agency could be part of theBank of North Dakota. Unfortunately, this wasdefeated in this session of the Legislature, but weanticipate to bring it up again if the demand forhousing continues in our State. I might suggestthat the State Housing Finance Agency and othersimilar agencies could be incorporated under oneinstitution such as a state-owned bank.Last December the Bank of North Dakotaissued $50 million of mortgaged backed bonds.This was the largest bond issue to have originatedin North Dakota. We received a AAA rating fromboth Moody's and Standard & Poors, which israther remarkable, when you realize that our"parent" the state of North Dakota, is only rated107

AA. We needed this $50 million for liquidity, sothat we could continue to purchase home loansthroughout our state.In August of 1967, the Bank of North Dakotamade the first Federally Insured Student Loan inthe nation. Since that time, the Bank hasprocessed 71,960 loans, amounting to over$65,923,362.92 to students throughout the state.We are actually number two of all banks in thecountry (Bank of America, a $70 billion plus bankis first) and fifth in numbers, by lender, in thenumber of student loans we have disbursed. Weare eleventh in dollar volume. Over 60% of theFederally Insured Student Loans made in NorthDakota have been processed by the Bank of NorthDakota. We finance students seeking highereducation throughout the world; even in Ohio.Our only requirement is that they be residents ofNorth Dakota at the time they make theapplication. We generally limit vocational trainingto in-state schools. No schools in North Dakotaact as a lender. All loans must originate with afinancial institution. The reason we limitvocational schools to in-state, is we find thetraining costs less in North Dakota, and thedanger of a student being "ripped-off" byunscrupulous proprietory schools is eliminated. Inother words, we know our schools, and watchwhat they promise to do. We now have over28,637 loans in repayment. The Student LoanProgram is completely computerized; and we feelit is one of the most efficient lending operations inthe country. It's profitable, but more important, ofgreat benefit and service to thousands of youngpeople, and their parents. We also buy FISL fromother lenders. We made a secondary market forFISL several years before they dreamed up SallyMae! Our past due and claim status with theFederal Government is running less than 2%,which we feel is the best in the country. Because ofthe leadership of the Bank of North Dakota, ourstate leads the nation in making financialassistance available to students seeking educationand training beyond high school.Today we are in the process of issuing up to $65millon in Student Loan Backed bonds. We are notgoing to pledge anything but student loans behindthese bonds. There will be no take-out provisions,no guarantee, direct or implied on the part of theState of North Dakota, no student fees or generalfund monies, and no moral obligation on the partof the state. With our very favorable repaymentrecord, we are confident that we will get a veryfavorable rate. This type of financing could not beaccomplished this way without the experience of astate-owned bank.In the past, the Bank of North Dakota has madeloans to various State Departments andinstitutions and has purchased real estatecontracts from the State and its instrumentalities.At the present time, this totals only $385,000, butin years past, this was an important part of theBank's operation. Some examples are loans toerect a building for the Employment SecurityBureau, to finance buildings for the State FairBoard, and to the State Plumbing Board. All ofthese were self liquidating loans, (from income).Usually, the Bank sells these loans. Since they aretax-exempt to others, we will trade for highquality, higher yielding loans. In every instance,the instrumentalities could not get a satisfactoryrate until the Bank provided it. Yet the Bank isable to sell or trade and saves money for theinstrumentality.The Bank of North Dakota starting in 1968.took a leadership position in SBA loans.Generally, the Bank will purchase the 90%guaranteed portion from the other institutions,thus providing local institutions with liquidity totake care of their other customers. We had asecondary market for SBA loans 7 years beforethey developed in the rest of the country. Duringthe right money period, in 1971 and again in 1974.the Bank accelerated its participation programwith other institutions and presently has over$118.8 million participation loans. These can befor any purpose for any time period. We anticipatethis to be expanded by $20,000,000 during 1979.This is particularly helpful to the smaller banksthat have a low "legal lending limit," and thisenables them to service their larger customers.During the last legislative session a bill wasintroduced to get the Bank of North Dakotainvolved in a small way ($3,000,000) in solarenergy loans for residences. The bill failed.However, I have attended a special RegionalBusiness and Financial Services to Develop SolarEnergy Technology Transfer meeting. We expectto be involved in financing solar energy in NorthDakota in the years ahead.The Bank also serves as Trustee and PayingAgent for bond issues of the Institution of HigherEducation in the State and further serves as108

Trustee for the North Dakota Public RetirementSystem and manages several State Trust Funds,whose assets are approximately $160,000,000. InNorth Dakota, in 1976, we placed $6.5 million ofFHA insured home mortgages in one of our statetrust funds. Today, that market is off somewhat,but when it is right again, we may place moremortgages in these funds. All of these mortgageswere purchased from, and are being serviced by,local banks and savings & loan associations. Theyare a good investment, yielding as much or morethan out-of-state corporate bonds of the sameaverage maturity. This investment helped thehousing situation in North Dakota. It is anexample of "Public money for public good!"The Bank of North Dakota somewhatresembles a "little Fed," since we are the clearingbank for many of the institutions in NorthDakota. The Bank of North Dakota has processedas high as 213,000 items (checks) a day and all ofthe 173 banks maintain an account with the Bank.Their combined balance averages in excess of$20,000,000 per day.The success of the Bank of North Dakota maybe summed up by the Bank's philosophy which is,"I. To encourage and promote Agriculture,Commerce, and Industry in North Dakota. II. Toprovide the most efficient and economicalfinancial services to the State, its Agencies, andInstrumentalities. III. To provide professionalassistance whenever possible and wherever it willencourage and promote the well-being andadvancement of North Dakota and its citizens."The growth and soundness of the Bank ofNorth Dakota is a tribute not only to those whoconceived it and to those who have operated it,but to all North Dakotans who have benefitedfrom the services of such an institution. Thecitizens of the State of North Dakota take greatpride in the philosophies and soundness of theBank.A bank owned, operated by and for the peopleof a state, will not be a panacea for all of a state'seconomic and social problems. However, it can beof great help in alleviating many of these problemsand can give leadership and financial input inisolated and special areas. I believe a state-ownedbank would be a good asset for any state, andparticularly to the smaller states.I understand you will have testimony againststarting a state owned bank. Let me comment onsome of the usual arguments against a state ownedbank:It concentrates credit in one area - not true! Thebank serves the entire state, working throughother financial institutions. There is noconcentration of loans in any one area.It invests funds out of state, such as governmentbonds - only to the extent necessary to provide forits liquidity needs. In the past, loan demand hasbeen increasing and we expect it to continue toincrease. We presently are about 65% loaned up.To be profitable, a state owned bank wouldhave to compromise its purpose of advancing"socially desirable programs" - not so! We point toour record of student loans, housing loans, farmownership loans, and municipal bondunderwriting as accomplishing "socially desirablegoals" and we are still more profitable than anybank in the country.The Bank pays no taxes - We pay more into theState Treasury, as a percentage of profits, thanany bank would pay in combined taxes anddividends. If you believe banks are paying largeamounts into your state treasury, then I suggestyou check the records. We, the Bank of NorthDakota, pay more than 7 times the amount paidby all banks and savings and loans combined inNorth Dakota in taxes to the state. In no waycould the financial community make this up, if theBank of North Dakota dispersed its deposits to theother institutions.The Bank has lower expenses - True! Because ofpublic funds having to be deposited in the bank,low occupancy expenses (we don't need thebiggest, tallest, newest, most opulent building intown), little or no advertising, no giveaways (nomatter how cold it has been in North Dakota, wehave never given away a blanket!) and stateemployees wage scales. To be fair, a state-ownedbank must pay competitive interest rates on timemoney, and the Bank of North Dakota does.Abuse of lending authority because of politicalcontrol - 1 believe this danger is over stated. It hasnever been a problem in North Dakota. Of course,we have open meeting laws. If you have a broadbased board, of both public officials andrepresentatives of the private sector, I don't seehow you could have a problem.Not able to keep capable management If youkeep partisan politics out of the bank and pay109

adequately, there are no problems in keepingcapable management.With the exception of the Bank of NorthDakota, state-owned banks have been tried anddidn't work out! - There were various reasons forthe failure or discontinuance of these variousexperiences. Perhaps, at some time in history, theneed for a state-owned bank was not necessary insome states at a certain time period. The questionbeing concerned in Ohio today is, "Does Ohioneed a state owned bank?"A state owned bank is a form of "creditallocation." - True, public money for public good -what's wrong with that?It eliminates the need for "pledging" by otherbanks against public deposits and weakens themarket for tax exempt securities in a state. - Thestate-owned bank would be a market for a state'spolitical subdivision securities. We have improvedour market and I believe your proposed bankwould do the same.It can do what other banks can't do. True, that'swhy you want a state owned bank.Not bound by Regulation Q - This isn't so inNorth Dakota. The law specifies that we can onlypay rates that other banks are authorized to payand North Dakota law refers specifically to therates allowed by banks that are members of theFederal Reserve System. This could be included inyour law, but I don't recommend that it be. Froma practical experience, the proposed bank wouldprobably only pay what other banks pay.Incidentally, in 1978 the State Treasurer had anaverage of almost 94% of his funds in interestbearing deposits with us and only 6% in interestfree demand deposits.Salaries of the executive officers would behigher than state officials - So what? If you areunder-paying your elected officials, that's noargument about the merits of a state-owned bank.Members of the Committee, I know a stateownedbank works in North Dakota. I amconfident it would work in Ohio. It would helpyour state and its citizens.Thank you for allowing me to visit with you. Iwould be happy to answer questions.110

TEN"The behavior of the Christian remnant at thisjuncture," states Professor Revilo P. Oliver inhis monumental book, Christianity and theSurvival of the West, "and the extent of itsability to subordinate religious emotions to thegrim task of racial survival, will be a datum tobe considered if you try to guess whether thefuture holds for us more than a day in whichthe crucial questions will have beendefinatively answered - when Americans willhave been the only people in historycompulsively and yet knowingly to commitsuicide, and when all that is left of them will lieforgotten in dishonored tombs."CONFLICT MANAGEMENT*ROLE OF THE TRILATERAL COMMISSIONAs we enter the eighties, the internationalpower brokers have managed once again to propelthe world into a violent encounter which threatensto grow beyond the bounds of Iran andAfghanistan and possibly involve the whole world,as occurred in 1914-18 and again in 1939-45. "It'sCold War Again," blared the front page headlineof the London Daily Mirror, a tabloid that isbought by nearly 4 million people every day. Thepaper claimed that a cold war between the Westand the Soviet Union had begun because of theSoviet invasion of Afghanistan and PresidentCarter's threat that the West's response was goingto involve more than notes of protest.There is, of course, the greater danger, that thiscold war could evolve into a hot war betweensuperpowers, because of the generally unsettledcondition, not just in that part of the world, but inall parts of the world, due to economic upheavalsand financial and energy crises brought on by the*By Don Bell, Don Bell Reports, 4 Jan. 1980,Member, Council of Advisors, CRC.international power brokers. In the troubledMiddle East there is the constant confrontationbetween immigrating Israelis and indigenousArabs. Also, Iran is under mob rule with noresponsible government; Turkey is in turmoil withterrorism and Shiite rebellion ever present;Pakistan is trembling between Moslem theocracyand authoritarian autocracy. Devoid ofpropaganda, there is one hard fact which must beunderstood: The Soviet Union has alwaysdemanded that all of its neighboring nations havewhat it considers to be "stable governments." Itused this argument in taking over Latvia, Estonia,Poland, East Germany and the nations of EasternEurope. It once invaded Iran on this same pretext,but our government under President Eisenhowerwas not as patient as our government underPresident Carter, and the Soviets retired fromAzerbaijan, not a shot having been fired. Now,however, two of Russia's neighbors do not have"stable" governments: Iran and Afghanistan.Regarding Iran, there is a deal in the works, a dealconcerning Iranian oil for Russia, and Iranianmillions for the International Bankers. So Iran can111

wait. But, to create a greater atmosphere of crisis(which is expedient for the international powerbrokers), an invasion of Afghanistan seemedappropriate. Under the excuse of creating a"stable" government in Afghanistan, Moscow hadput one of its own puppets in as dictator. But hewasn't able to quell the disturbances made by theminority dissidents. So the Soviets sent some45,000 troops in to occupy the land and to installanother Communist puppet who would "maintainstability," even if it took half a million Soviettroops to do it.But now comes the next step in crisis creation:When Afghanistan is a part of the Soviet bloc,then the next neighbor with an "unstablegovernment" will be Pakistan. Now, ever since thetime of Czar Peter the Great, Russia has had adream - a dream of having a land corridor fromRussia proper all the way to the Arabian Sea, andthus a gateway into the Indian Ocean. So, Russiawants not just Afghanistan, but Pakistan as well.And the West has promised to protect Pakistan,just as Western Europe promised to protectPoland in 1939 and thus causing World War II. Infact, AP reported on Dec. 31, 1979: "NationalSecurity Adviser Zbigniew Brzezinski said Sundaythat the United States has assured Pakistan of U.S.aid - including the use of armed force - should theSoviet action in Afghanistan widen to include thatneighboring nation."But why such an about face on the part ofCarter and the Trilateralists? From friendlycollaboration with the Communists to threats ofpossible military confrontation within just a fewdays? Ben Barker, editor of Survival Manual, hasthis answer: with the international power brokers"wars are the trump card in their stacked deck andit is the one that is played when the populace isgetting out of hand. The chaos precipitated by warof necessity brings about the repressive controlledenvironment that power brokers thrive upon."(Quoted from The Middle Class Survival Manual,500 Espalanda Drive, Suite 1520, Oxnard CA93030). In other words, because of general unrestand chaos and the fear that the populace is gettingout of hand, it was planned this way!"In governing the populace, unrest cannot beaverted. Therefore, it must be channeled andcultivated." This is the creed of Big Brother,fictional dictator in George Orwell's book, 1984,originally published in 1948. To channel thisunrest that cannot be averted, the world is dividedinto three Regional Governments, threeSuperpowers that exist in a state of permanent warwith each other in varying combinations. To"channel the unrest," Oceania (the WesternWorld) sometimes is allied with Eastasia (theEastern World) against Eurasia (the Third World,including Red China). Sometimes Oceania is alliedwith Eurasia against Eastasia. Sometimes Eurasiaand Eastasia find a common enemy in Oceania.And so on. Thus, by maintaining permanent war,the unrest of the populace is channeled (loyalty,patriotism, united effort, moral equivalent to war,etc.). To cultivate unrest, each superpower isgoverned by four ministries; a Ministry of Peacewhich conducts war; a Ministry of Plenty whichregulates the manufacture and distribution ofgoods; a Ministry of Love which directs espionage,terror and hate; and a Ministry of Truth whichkeeps "truth" up to date. Over all stands BigBrother who sees all, knows all, who must be lovedby all while everybody must hate everybody else.This is 1980, not yet 1984, at least not bycalendar reckoning. But now there is great unrestamong the peoples of the world; economic,political, religious, ethnic, social unrest. There arerevolutions, rebellions, attacks upon embassiesand holy places, kidnappings and sometimesmurder of hostages, invasion of whole countries.Terror is epidemic, law is laughed at. In short,there is great unrest and since "unrest cannot beaverted," it must be channeled, and cultivated!War is the way unrest has always beenchanneled, from the time of Cain to the time ofBig Brother. And it would seem that theInternational Power Brokers have utilized thisstrategy from the very beginning. Therefore, asStates and Empires began to develop in Europeand the New World, they began the task ofbuilding their three Regional Superpowers whichthey might play one against the other. TripleEntente, Triple Alliance, such were beginnings.But, geopolitics required global governments.First, the international power brokers set aboutdeveloping a Western Alliance, which mustinclude the United States as its leader. But therewas Washington's advice concerning intercoursewith other nations, backed up by the MonroeDoctrine. These had to be discarded, and theUnited States built into a global power. This wasour "Manifest Destiny," and there came anarranged war with Spain, Teddy Roosevelt's112

negotiation of peace between warring Russia andJapan, his "big stick" display of the United StatesNavy on its world tour. Then, throughinternational agent, Colonel House, PresidentWilson was induced to involve us in a world war,at the same time promoting a League of Nations.The work of constructing a first WorldSuperpower was completed with the creation ofthe Atlantic Alliance in which the United Stateswould be the leader.Meanwhile, the creation of the second RegionalSuperpower was underway. A Bolshevik conquestof Imperial and Christian Russia was financed bythe International Power Brokers. M.M. Warburgof Germany made millions available to Lenin andhis band of revolutionaries, arranged for their safepassage into Russia. In New York City JacobSchiff, partner and brother-in-law of Warburg,contributed a known $20 million. Leon Trotsky,living in luxury with an excellent apartment, rentpaid three months in advance, traveling in achauffered limousine, suddenly was given $10,000pocket money, and an American passport suppliedby the intervention of Woodrow Wilson. Hetraveled to Canada, then to Russia to join Lenin,openly declaring his determination to "carryforward" the revolution.The international power brokers then proceededto develop Communist Russia into a Superpower.From 1919 onward, each time the Communistdictatorship was about to fail, aid was rushed toLenin, Stalin, Khrushchev or Brezhnev, from theWest, especially from the United States. It mightbe said that World War I was fought to create aCommunist State, and World War II was foughtto expand that Communist State into aSuperpower and a Regional World Government(Eastasia?).As an example of how Monopoly Capitalismpromoted International Communism - an examplewhich is pertinent because it concerns oil as doestoday's crisis in Iran - the following articleappeared in The Washington Observer of Sept. 15,1974:During the Korean War and the recentVietnam War, Soviet Russia, whose oilfields,except for a few very minor ones onSakhalin Island, are too remote, was unableto supply the Communist satellite countriesin the Far East across more than 20,000miles of ocean. So the Soviets went shoppingon the international oil market and made adeal with the world oil cartel to provide mostof the liquid fuels for the Communist warmachines in Korea and Vietnam. To supplythe oil, the Rockefeller interests used mainlythe Arabian-Amercian Oil Company(ARAMCO), which is jointly owned byStandard Oil of California (30%), Texaco(30%), Standard Oil of New Jersey (30%),and Socony Vacuum (10%).This occurred while the United States andCommunist countries were at war against eachother!But, back to our original theme regarding thecreation of three Regional World Governments.Having "Regionalized" and made"Interdependent" the Western World and theEastern World, now came time for thedevelopment of the Third World, the principalpart of which would be Communist China. WhenWorld War Two was ended, Mao Tse-tung wasmaneuvered into dictatorial control and the samestrategy that was used to build the USSR afterWorld War One, was now used to build the PRCafter World War Two. The Rockefeller fundedInstitute of Pacific Relations laid the groundwork,the CFR-controlled State Department followedthrough, Kissinger and Nixon completed theframework, and the Orwellian strategy of playingSuperpowers, one against the others, could beginin earnest. In the initial stage, Russia and RedChina were allied against the United States. Later,PRC spread the report that the US and the USSRwere allied against her. Now comes anotherchange in the alternating alliance: It's time for thePRC and the US to be allied against the USSR.Consequently, Russia invades Afghanistan to setthe stage for the shift in strategy. The US followsthrough via Rand Corp. think-tank advising ourgovernment to make deals with China againstRussia. Comes The New York Times of Jan. 3,1980 with the news that "The CarterAdministration is seeking China's cooperation inmeasures to shore up Pakistan's defenses againstSoviet military pressure possibly including aproposal for an increase of arms sent from bothgovernments to the south Asian country,American officials said today . . ."In this article from The New York Times ofJanuary 3, note the ways in which the UnitedStates government is to aid in the development ofRed China as a Regional Superpower, and how we113

are to be allied with China against Russia, exactlyas Orwell predicted over thirty years ago. Wequote:The (American) officials said that a jointAmerican-Chinese effort to strengthenPakistan's defenses was one of several stepstoward closer security collaboration betweenWashington and Peking that were likely tobe discussed during a visit Secretary ofDefense Harold Brown is to make to China.The trip which begins this weekend, hadbeen scheduled several months ago. But inan interview today a senior official said thatMoscow's military intervention inAfghanistan had given Secretary Brown'smission 'a new dimension.' Asserting that'the Soviets have forced us and the Chineseinto a posture in which we both see theworld in the same way,' the aide said thatcloser security ties with Peking were viewedby many officials as a principal way theUnited States could respond to the Sovietactions in Afghanistan . . . In addition tofocusing on the immediate situation inAfghanistan, Mr. Brown was likely todiscuss longer range forms of securitycooperation in Peking, including WesternEuropean arms sales to China and possibleAmerican exports of military-relatedtechnology. (Unquote).When President Carter took to the TV toannounce the return of the cold war against theUSSR (we delayed our deadline in case he mightsay something of great import), there was nary amention of the budding alliance with Red Chinaagainst Red Russia. Carter spoke with bitternessbut with little authority. His response to theCommunist invasion of Islamic Afghanistan wasqualified. 17 million tons of grain would not bedelivered, but it was cow-feed, not Communistfeed.Russians mustn't go fishing in our watersanymore (the Carribean excluded, we presume).Cultural and economic exchanges might bedelayed but the Olympic games would not beboycotted. The shipment of highly technologicalequipment might be delayed. But, we repeat, nomention was made of the fact that the US isentering into a security alliance with oneCommunist Regional World Government againstanother Communist Regional WorldGovernment. And George Orwell isn't around tosay, "I told you so."In Conclusion, let us also repeat: In governingthe populace, unrest cannot be averted; thereforeit must be channeled and cultivated. And threat ofwar - be it cold war, limited war, controlled war,even world war - is the time-proven way tochannel a people's unrest. And this is the strategychosen by enemies of competitive capitalism, freeenterprise, and freedom of choice. We believe thatthis alliance between Monopoly Capitalism andInternational Communism is three-pronged. First,there is an economic alliance between the two.This is proved by the fact that MonopolyCapitalists of the West rescue the Communistsfrom total oblivion every time their systemthreatens to collapse. Secondly, there is anideological compatibility in that both seek todestroy competition and control the total market,including manpower. Thirdly, both share themutual conviction that the human race must bemolded into a single, monolithic system of worldwideeconomic, political, and social control.Against such an enemy, who has been called BigBrother, there is but one sure defense: we mustreinstate the Bible and the Constitution as theguiding principles of our Nation. Unless we dothis, national collapse seems inevitable.Speaking in 1973, Don Bell noted the unresistedremolding of America and recorded unheededwarnings.What we are suggesting is that a highlysophisticated coup d'etat is being staged in theseUnited States, and that the people areunconsciously and unknowingly aiding andabetting the elitists who are destroying our form ofgovernment and setting up in its place a newSocialist World Order. People are being told thatthings are so bad because we need a change, thesystem must be changed to fit the times.Of course, any student of history willunderstand that the real trouble is not with thesystem, but with the individuals holding positionsof power within the system; the fault is with thePresident, not the Presidency; with theCongressmen, not with the Congress; with theJudges, not with the Courts; with the occupants,not with the offices. It is true that a parasiticalgrowth called bureaucracy has grown like Spanishmoss and threatens to strangle our Tree of Liberty.It is also true that corruption and abuse havebrought on pollution and putrefaction. But a goodhouse-cleaning is all that is required so long as the114

United States Constitution remains as the heart ofour civil system, and the Son of God is recognizedas our King of Kings. A massive job of ChristianReconstruction is called for; but our need is toclean up the motor, and change the driver, not thevehicle.And the elitists would have us throw out theoffice along with the office holder.Some twenty years ago, one of America'sstatesman-Senators, William E. Jenner of Indiana,explained the situation existing at that time:The noble edifice of constitutional liberty issilently disintegrating into a crumbling ruin. . . this continuous silent disintegration ofevery policy is due to the most importantpolitical fact in the world today. We have inthe United States not one center ofgovernment, but two. One center I will callthe collectivist one-worlders. The other is thelegal constitutional government.The collectivist bloc has been operating nowfor 20 years. It has the strong root systemthat comes from 20 years of unhamperedgrowth. The chief characteristic of thiscollectivist bloc is that it operates above theConstitution and above the law. Its membersare carrying out a secret revolutionarypurpose, without any attempt to tell theAmerican people what they are doing, orasking their consent.I say there is irrepressible conflict betweenthis elite which operates above theConstitution and the laws, and theAmerican people, and those members of theCongress, the Courts, and of the ExecutiveBranch, who operate under the Constitutionand the law.Senator Jenner wrote the preceding twentyyears ago, and he notes that the conspiracy hadthen been growing unhampered for a previoustwenty years. Now, forty years later (or since theinstallation of the New Deal), comes time for thenext Giant Step. A whole new army of managersand controllers has been trained and prepared forthe take-over: political scientists, social scientists,behavioral scientists, change artists, computerizedspecialists to replace the bungling electedrepresentatives of the people. There is a new"modern" constitution already drafted by thesocial architects of the Center for the Study ofDemocratic Institutions; there is also a WorldConstitution awaiting the next Giant Step of theConspiratorial Elite.And Americans, without ever knowing it, willfall for this well planned, highly sophisticated coupd'etat; they will probably never know that it wasengineered. They will charge Nixon with theresponsibility for the deluge that will follow, inmuch the same manner that Herbert Hoover willforever bear the responsibility for the GreatDepression. It is merely incidental that bothHoover and Nixon were knowledgeable membersof the Conspiracy. The more important facts arethat Hoover was needed in the White House tobring about a situation that would cause thepeople to demand a Great Change and welcome inthe New Deal; and Nixon was needed in theWhite House to bring about a situation that wouldcause the people to demand a Great Change, andthen welcome in the well planned New Order ofthe Ages.1913, 1933, 1973; years in which the WorldElite took great leaps that ushered in whole newforms of control and tightened reign over thepeople of the United States.But there is an ominous counterplot in all theseengineered schemes: The Great Leap of 1913 wasbut partially successful, and led to an "escapist"entry into World War I. Likewise, the Great Leapof 1933 was but partially successful and the elitistplotters had to bring about World War II as anescape from total chaos.Will the Great Leap of 1973 land us in yetanother World Conflagration?115

THE TRILATERAL COMMISSIONGeorge Orwell's three world superpowers, "Oceania," "Eastasia," and "Eurasia," exist today, governed byThe Trilateral Commission, a cabal of international bankers, industrialists and academicians.Below is a membership roster (1978) of this semi-secret world government administration.Decision-making is reserved to the "Secret Government of Monetary Power."THE TRILATERAL COMMISSION(As of January 31, 1978)345 East 46th StreetNew York, New York 10017(212)661-1180Georges Berthoin Takeshi WatanabeEuropean Chairman Japanese ChairmanDavid Rockefeller Mitchell SharpNorth American North AmericanChairman Deputy ChairmanEgidio Ortona George S, FranklinEuropean Deputy CoordinatorChairmanHanns W. Maull Tadashi YamamotoEuropean Secretary Japanese SecretaryCharles B. HeckNorth American SecretaryNORTH AMERICAN MEMBERS*I.W. Abel, Former President, United Steelworkersof AmericaDavid M. Abshire, Chairman, Georgetown UniversityCenter for Strategic and InternationalStudiesGardner Ackley, Henry Carter Adams UniversityProfessor of Political Economy, University ofMichiganGraham Allison, Dean, Public Policy Program,John F. Kennedy School of Government, HarvardUniversityDoris Anderson, Former Editor, ChatelaineMagazineJohn B. Anderson, House of RepresentativesAnne Armstrong, Former U.S. Ambassador toGreat BritainJ. Paul Austin, Chairman, The Coca-ColaCompanyGeorge W. Ball, Senior Partner, LehmanBrothersMichel Belanger, President, Provincial Bank ofCanada* Robert W. Bonner, Q.C., Chairman, BritishColumbia HydroJohn Brademas, House of RepresentativesAndrew Brimmer, President, Brimmer & Company,Inc.William E. Brock, III, Chairman, RepublicanNational CommitteeGeorge Bush, Former Director of Central Intelligence;former Chief of U.S. Liaison Office inPekingClaude Castonguay, President, Fonds Laurentien;Chairman of the Board, Imperial LifeAssurance Company, former Minister in theQuebec GovernmentSol Chaikin, President, International LadiesGarment Workers UnionWilliam S. Cohen, House of Representatives* William T. Coleman, Jr., Senior Partner, O'Melveny & Myers; former Secretary of TransportationBarber B. Conable, Jr., House of RepresentativesJohn Cowles, Jr., Chairman, Minneapolis Star& Tribune Co,Alan Cranston, United States SenateJohn C. Culver, United States SenateGerald L. Curtis, Director, East Asian Institute,Columbia UniversityLloyd N. Cutler, Partner, Wilmer, Cutler &PickeringJohn C. Danforth, United States SenateLouis A. Desrochers, Partner, McCuaig andDesrochers, EdmontonPeter Dobell, Director, Parliamentary Centre forForeign Affairs and Foreign Trade, OttawaHedley Donovan, Editor-in-Chief, Time Inc.Claude A. Edwards, Member, Public ServiceStaff Relations Board; former President, PublicService Alliance of CanadaDaniel J. Evans, President, The Evergreen StateCollege; former Governor of WashingtonGordon Fairweather, Chief Commissioner;Canadian Human Rights CommissionThomas S. Foley, House of RepresentativesGeorge S. Franklin, Coordinator, The TrilateralCommission; former Executive Director, Councilon Foreign RelationsDonald M. Fraser, House of RepresentativesJohn H. Glenn, Jr., United States SenatePhilip M. Hawley, President, Carter HawleyHale Stores, Inc.116

THE TRILATERAL COMMISSION (Cont.)Walter W. Heller, Regents' Professor of Economics,University of MinnesotaWilliam A. Hewitt, Chairman, Deere & CompanyCarla A. Hills, Cochairman, Alliance to SaveEnergy; former Secretary of Housing and UrbanDevelopmentAlan Hockin, Executive Vice President,Toronto-Dominion BankJames F. Hoge, Jr., Chief Editor, Chicago SunTimesHendrik S. Houthakker, Henry Lee Professor ofEconomics, Harvard UniversityThomas L. Hughes, President, Carnegie Endowmentfor International Peace* Robert S. Ingersoll, Deputy Chairman of theBoard of Trustees, The University of Chicago;former Deputy Secretary of StateD. Gale Johnson, Provost, The University ofChicagoEdgar F. Kaiser, Jr., President and Chief ExecutiveOfficer, Kaiser Resources Ltd.Michael Kirby, President, Institute for Researchon Public Policy, MontrealLane Kirkland, Secretary-Treasurer, AFL-CIO* Henry A. Kissinger, Former Secretary of StateSol M. Linowitz, Senior Partner, CoudertBrothers; former Ambassador to the Organizationof American StatesWinston Lord, President, Council of ForeignRelations* Bruce A. MacLaury, President, The BrookingsInstitutionPaul W. McCracken, Edmund Ezra Day Professorof Business Administration, Universityof MichiganArjay Miller, Dean, Graduate School of Business,Stanford UniversityLee L. Morgan, President, Caterpillar TractorCompanyKenneth D. Naden, President, National Councilof Farmer Cooperatives* Henry Owen, Director, Foreign Policy StudiesProgram, The Brookings InstitutionDavid Packard, Chairman, Hewlett-PackardCompanyGerald L. Parsky, Partner, Gibson, Dunn &Crutcher; former Assistant Secretary of theTreasury for International AffairsWilliam R. Pearce, Vice President, CargillIncorporatedPeter G. Peterson, Chairman, Lehman BrothersEdwin O. Reischauer, University Professor andDirector of Japan Institute, Harvard University;former U.S. Ambassador to Japan* Charles W. Robinson, Vice Chairman, BlythEastman Dillon & Co.; former DeputySecretary of State* David Rockefeller, Chairman, The Chase ManhattanBank, N.A.John D. Rockefeller, IV, Governor of WestVirginiaRobert V. Roosa, Partner, Brown Bros., Harriman& Company* William M. Roth, Roth PropertiesWilliam V. Roth, Jr., United States SenateJohn C. Sawhill, President, New York University;former A dministrator, Federal Energy A d-ministrationHenry B. Schacht, President, Cummins EngineCompany* William W. Scranton, Former Governor ofPennsylvania; former U.S. Ambassador to theUnited Nations* Mitchell Sharp, Member of Parliament; formerMinister of External AffairsMark Shepherd, Jr., Chairman, Texas InstrumentsIncorporatedEdson W. Spencer, President and Chief ExecutiveOfficer, Honeywell Inc.Robert Taft, Jr., Partner, Taft, Stettinius &HollisterArthur R. TaylorJames R. Thompson, Governor of IllinoisRussell E. Train, Former Administrator,Environmental Protection AgencyPhilip H. Trezise, Former Assistant Secretaryof State for Economic AffairsPaul A. Volcker, President, Federal ReserveBank of New YorkMartha R. Wallace, Executive Director, TheHenry Luce Foundation, Inc.Martin J. Ward, President, United Associationof Journeymen and Apprentices of thePlumbing and Pipe Fitting Industry of theUnited States and CanadaGlenn E. Watts, President, CommunicationsWorkers of AmericaCaspar W. Weinberger, Vice President andGeneral Counsel, Bechtel CorporationGeorge Weyerhaeuser, President and ChiefExecutive Officer, Weyerhaeuser CompanyMarina v.N. Whitman, Distinguished PublicService Professor of Economics, University ofPittsburghCarroll L. Wilson, Mitsui Professor in Problemsof Contemporary Technology, Alfred P. SloanSchool of Management; Director, Workshopon Alternative Energy Strategies, MIT

THE TRILATERAL COMMISSION (Cont.)T.A. Wilson, Chairman of the Board, TheBoeing Company*Executive CommitteeFormer Members in Public ServiceLucy Wilson Benson, Under Secretary of Statefor Security AssistanceW. Michael Blumenthal, Secretary of theTreasuryRobert R. Bowie, Deputy to the Director ofCentral Intelligence for National Intelligence* Harold Brown, Secretary of Defense*Zbigniew Brzezinski, Assistant to the Presidentfor National Security Affairs* Jimmy Carter, President of the United StatesWarren Christopher, Deputy Secretary of StateRichard N. Cooper, Under Secretary of State forEconomic AffairsRichard N. Gardner, U.S. Ambassador to ItalyRichard Holbrooke, Assistant Secretary of Statefor East Asian and Pacific AffairsWalter F. Mondale, Vice President of the UnitedStatesJean-Luc Pepin, P.C., Cochairman Task Forceon Canadian UnityElliot L. Richardson, U.S. Ambassador at Largewith Responsibility for UN Law of the SeaConferenceGerard C. Smith, U.S. Ambassador at Largefor Non-Proliferation MattersAnthony M. Solomon, Under Secretary of theTreasury for Monetary AffairsCyrus R. Vance, Secretary of StatePaul C. Warnke, Director, U.S. Arms Controland Disarmament Agency; Chief DisarmamentNegotiatorAndrew Young, U.S. Ambassador to the UnitedNationsEUROPEAN MEMBERS*Giovanni Agnelli, President, FIAT*P. Nyboe Andersen, Chief General Manager,Andelsbanken A/S; former Danish Minister forEconomic Affairs and TradePiero Bassetti, Chamber of Deputies, Rome* Georges Berthoin, Former Chief Representativeof the Commission of the European Communitiesto the United Kingdom*Kurt Birrenbach, President, German ForeignPolicy Association; President, Thyssen Stiftung*Henrik N. Boon, Former Dutch Ambassadorto NA TO and ItalyGuido Carli, President, Confmdustria; formerGovernor, Bank of Italy118Jean-Claude Casanova, Professor of PoliticalScience, Institute of Political Studies, ParisWilly de Clercq, Chairman, Party for Freedomand Progress, BelgiumUmberto Colombo, Director-General, Research& Development Divsion, MontedisonGuido Colonna di Paliano, Former President,La Rinascente; former Member of the Commissionof the European CommunitiesFrancesco Compagna, Chamber of Deputies,RomeMichel Crepeau, Member, French NationalAssembly; Mayor of La RochelleThe Earl of Cromer, Advisor to Baring Bros.& Co., Ltd; former British Ambassador to theUnited StatesMichel Debatisse, Chairman of the FrenchNational Farmers Union*Paul Delouvrier, Chairman, French ElectricityBoardBarry Desmond, Member of Lower House, IrishRepublicJean Dromer, President Directeur General,Banque Internationale pour lAfrique OccidentaleFrancois Duchene, Director, Centre for ContemporaryEuropean Studies, University ofSussexG. Eastwood, General Secretary, Associationof Patternmakers & Allied Craftsmen, LondonHorst Ehmke, Deputy Chairman, ParliamentaryFraction of Social Democratic Party, FederalRepublic of Germany; former Minister ofJusticePierre Esteva, Administrates Directeur GeneralUnion des Assurances de ParisM. H. Fisher, Editor, Financial TimesGarret Fitzgerald, Leader of Fine Gael Party;former Foreign Minister of IrelandRene Foch, Member of Executive Committee,Parti des Republicans IndepedantsFrancesco Forte, President, Tescon, S.p.A.,RomeJacques de Fouchier, President, CompagnieFinancierre de Paris et des Pays-Bas'Michel Gaudet, President, Federation Frnncaisedes Societes dAssurancesSir Reay Geddes, Chairman, Dunlop Holdings,Ltd.Giuseppe Glisenti, President, La RinascenteRonald Grierson, Director, General ElectricCo., Ltd.Lord Harlech, Chairman, Harlech Television;former British Ambassador to the United States

THE TRILATERAL COMMISSION (Cont.)Hans Hartwig, President, German Associationfor Wholesale and Foreign TradeBernard Hayhoe, Member of British ParliamentJozef P. Houthuys, Chairman, Belgian Confederationof Christian Trade UnionsLudwig Huber, President, Bayerische LandesbankHorst K. Jannott, Chairman, Board of Directors,Munich Reinsurance SocietyDaniel E. Janssen, Administrates Delegue etDirecteur General, Belgian Chemical UnionHans-Jurgen Junghans, Member of the BundestagKarl Kaiser, Director, Research Institute of theGerman Society for Foreign PolicySir Kenneth Keith, Chairman, Rolls Royce Ltd.Henry Keswick, Chairman, Matheson & Company,Ltd.Michael Killeen, Managing Director, IndustrialDevelopment Authority of the Irish RepublicSir Arthur Knight, Chairman, Courtaulds. Ltd.*Max Kohnstamm, Principal, European UniversityInstitute, FlorenceErwin Kristoffersen, Director, InternationalDivision, German Federation of Trade Unions* Baron Leon Lambert, President, CompagnieBruxelles Lambert pour la Finance et {'IndustrieArrigo Levi, Director, La Stampa, TurinMark Littman, Deputy Chairman, British SteelCorporationRichard Lowenthal, Professor Emeritus, FreeUniversity of Berlin* Roderick MacFarquhar, Member of BritishParliamentRobert Marjolin, Former Vice President of theCommission of the European CommunitiesRoger Martin, President, Compagnie Saint-Gobain Pont-a-MoussonReginald Maudling, Member of British Parliament;former Cabinet MinisterCesare Merlini, Director, Institute for InternationalAffairs, RomeThierry de Montbrial, Professor of Economics,Eco/e Polytechnique, ParisAlwin Munchmeyer, Chairman of the Board,Bank Schroder, Munchmeyer, Hengst & Co.;President, German Banking FederationPreben Munthe, Professor of Economics, OsloUniversity; Official Chief Negotiator inNegotiations between Labor Unions and IndustryDan Murphy, Secretary-General of the CivilService Executive Union, Dublin119Karl-Heinz Narjes, member of the BundestagFriedrich A. Neuman, Chairman, State Association,Industrial Employers Societies, North-Rhine Westphalia*Egidio Ortona, President, Honeywell InformationSystems, Italia; former Italian Ambassadorto the United StatesBernard Pagezy, President Directeur General,Societes d'Assurances du Groupe de ParisSir John Pilcher, Former British Ambassadorto JapanJean Rey, Ministre dEtat; Chairman, Sojlna;former President of the Commission of theEuropean CommunitiesJulian Ridsdale, Member of British Parliament;Chairman, Anglo-Japanese ParliamentaryGroupSir Frank Roberts. Advisory Director, UnileverLtd.; Advisor on International Affairs, Lloyd'sof London; former British Ambassador to Germanyand the Soviet Union*Mary T. W. Robinson, Member of Senate,Irish RepublicLord Roll, Chairman, S.G. Warburg and Co.,Ltd.John Roper, Member of British ParliamentFrancois de Rose, Ambassadeur de France; President Directeur General, Societe Nouvelle PatheCinemaBaron Edmond de Rothschild, President, CompagnieFinanciere Holding, Parislvo Samkalden, Former Mayor of AmsterdamJohn C. Sanness, Director, Norwegian Instituteof International AffairsW. E. Scherpenhuijsen Rom, Chairman, Board ofDirectors, Nederlandsche Middenstandsbank,N.V.Gerhard Schroder, Member of the Bundestag;former Foreign Minister of the Federal Republicof GermanyErik Seidenfaden, Directeur de la FondationDanoise, Institut Universitaire International deParisFederico Sensi, President, INGENS, S.p.A.Roger Seydoux, Ambassadeur de France; President,Banque de Madagascar et des Comores;President, Fondation de FranceLord Shackleton, Deputy Chairman, Rio Tinto-Zinc Corporation Ltd., LondonAndrew Shonfield, Director, Royal Institute ofInternational AffairsHans-Gunther Sohl, Chairman of the Board,August Thyssen Hutte A.G.Theo Sommer, Editor-in-Chief, Die Zeit

THE TRILATERAL COMMISSION (ContMyles Staunton, Member of Senate, Irish RepublicG. R. Storry, St. Antony's College, Oxford (FarEast Center)John A. Swire, Chairman, John Swire and Sons,Ltd.*Otto Grieg Tidemand. Shipowner; former NorwegianMinister of Defense and Minister ofEconomic AffairsA.F. Tuke, Chairman, Barclays Bank InternationalLtd.Heinz-Oskar Vetter, Chairman, German Federa-tion of Trade UnionsPaolo Vittorelli, Director, Avanti; formerMember of Italian ParliamentSir Frederick Warner, Director, Guinnes PeatGroup Ltd.; former British Ambassador toJapanLuc Wauters, Chairman, Kredietbank, BrusselsEdmund Wellenstein, Former Norwegian DirectorGeneral for External Affairs, Commission ofthe European CommunitiesKenneth Whitaker, Member of Senate, Irish Republic; former Governor of the Central Bank ofIrelandAlan Lee Williams, Member of British ParliamentOtto Wolf von Amerongen, President, Otto WolffA.G.; President, German Federation of Tradeand Industry*Sir Philip de Zulueta, Chairman, Antony GibbsHoldings Ltd.* Executive CommitteeFormer Members in Public ServiceSvend Auken, Minister of Labor, DenmarkRaymond Barre, Prime Minister and FinanceMinister, French RepublicHerbert Ehrenberg, Minister of Labor and SocialAffairs, Federal Republic of GermanyMarc Eyskens, Belgian State Secretary for FlemishRegional EconomyOtto Graf Lambsdorff, Minister of Economics,Federal Republic of GermanyJean-Philippe Lecat, Presidential Spokesman,French RepublicEvan Luard, Parliamentary Under Secretary ofState for the British Foreign OfficeMichael O'Kennedy, Minister for Foreign Affairs,Irish RepublicHenri Simonet, Foreign Minister of BelgiumThorvald Stoltenberg, Secretary of State, NorwegianMinistry of Foreign AffairsOlaf Sund, Senator for Labor and Social Affairs,Land Government of BerlinJAPANESE MEMBERSIsao Amagi, Advisor to the Minister of Education;former Vice Minister of EducationYoshiya Ariyoshi, Chairman, Nippon, YusenKaishaShizuo Asada, President, Japan Air LinesYoshishige Ashihara, Chairman, Kansai ElectricPower Company, Inc.Toshiwo Doko, President, Japan Federation ofEconomic Organizations (Keidanren)JunEto, Professor, Tokyo Institute of TechnologyShinkichi Eto, Professor of International Relations,Tokyo University*Chujiro Fujino, Chairman, Mitsubishi CorporationShintaro Fukushima, President, Kyodo NewsServiceNoboru Gotoh, President, TOKYU CorporationToru Hagiwara, Advisor to the Minister ofForeign Affairs; former Ambassador to FranceNihachiro Hanamura, Vice President, JapanFederation of Economic Organizations(Keidanren)Sumio Hara, Chairman, Bank of Tokyo, Ltd.*Yukitaka Haraguchi, Chairman, Central ExecutiveCommittee, All Japan Federation of MetalMine Labor UnionsNorishige Hasegawa, President, SumitomoChemical Company, Ltd.Teru Hidaka, Chairman, Yamaichi SecuritiesCompany, Ltd.Gen Hirose, President, Nihon Insurance Co., Ltd.Hideo Hori, President, Employment PromotionProjects Corporation*Takashi Hosomi, Advisor, Industrial Bank ofJapanShozo Hotta, Chairman, Sumitomo Bank, Ltd.Hosai Hyuga, Chairman, Sumitomo Metal Industries,Ltd.Shinichi Ichimura, Professor of Economics,Kyoto UniversityYoshizo Ikeda, President, Mitsui & Co., Ltd.Hiroki Imazato, Chairman, Nippon Seiko, K.K.Yoshihiro Inayama, Chairman, Nippon SteelCorporationKaoru Inouye, Chairman, Dai-Ichi Kangyo Bank,Ltd.Rokuro Ishikawa, Executive Vice President,Kajima Corporation120

THE TRILATERAL COMMISSION (Cont.)Tadao Ishikawa, Professor, Department of PoliticalScience, Keio UniversityJoji Itakura, President, The Mitsui Bank, Ltd.Yoshizane Iwasa, Chairman, Japan-U.S. EconomicCouncilMotoo Kaji, Professor of Economics, TokyoUniversityFuji Kamiya, Director, Institute of ModernInternational Relations, Keio UniversityYusuke Kashiwagi, President, Bank of Tokyo,Ltd; former Special Advisor to the Minister ofFinanceKoichi Kato, Member of the DietRyoichi Kawai, President, Komatsu, Ltd.Katsuji Kawamata, Chairman, Nissan MotorCompany, Ltd.Kiichiro Kitaura, President, Nomura SecuritiesCompany, Ltd.Koji Kobayshi, President, Nippon Electric Company,Ltd.Kenichiro Komai, Chairman, Hitachi, Ltd.Shinichi Kondo, Former Ambassador to CanadaFumihiko Kono, Counsellor, Mitsubishi HeavyIndustries, Ltd.Masataka Kosaka, Professor, Faculty of Law,Kyoto UniversityFumihiko Maki, Principal Partner, Maki andAssociates, Design, Planning and DevelopmentShigeharu Matsumoto, Chairman, InternationalHouse of Japan, Inc.Daigo Miyado, Chairman, The Sanwa Bank, Ltd.Akio Morita, President, SONY CorporationTakashi Mukaibo, President, Tokyo University*Kinhide Mushakoji, Vice Rector, United NationsUniversity; Professor of Political Science, SophiaUniversityNorihiko Nagai, Executive Director, MitsuiO.S.K. LinesYonosuke Nagai, Professor of Political Science,Tokyo Institute of TechnologyShigeo Nagano, President, Japan Chamber ofCommerce and IndustryEiichi Nagasue, Member of the DietNobuyuki Nakahara, Managing Director, ToaNenryo Kogyo, K.K.Toshio Nakamura, President, Mitsubishi Bank,LtdIchiro Nakayama, President, Japan Institute ofLaborSohei Nakayama, Counsellor, Industrial Bank ofJapanAkira Ogata, Chief News Commentator, JapanBroadcasting Corporation (NHK)Yoshihisa Ohjimi, Executive Vice President,Arabian Oil Company, Ltd.; former ViceMinister of International Trade and Industry*Saburo Okita, President, Overseas EconomicCooperation Fund* Kiichi Saeki, President, Nomura Research Instituteof Technology and EconomicsKunihiko Sasaki, Chairman, Fuji Bank, Ltd.Yukio Shibayama, President, Sumitomo ShojiKaisha, K.KYoshihito Shimada, President, Takahashi Foundation;former President, Japan PetroleumDevelopment CorporationTatsuo Shoda, Chairman, The Nippon FudosanBank, Ltd.Toshisuke Sugiura, President, The Long TermCredit Bank of Japan, Ltd.*Ryuji Takeushi, Advisor to the Minister forForeign Affairs; former Ambassador to theUnited StatesEiji Toyoda, President, Toyota Motor Company,Ltd.Seiki Tozaki, President, C. Itoh & Co., Ltd.Seiji Tsutsumi, President, Seibu DepartmentStore, Inc.Kogoro Uemura, Honorary President, JapanFederation of Economics Organizations(Keidanren)Tadao Umesao, Director, National Museum ofEthnologyShogo Watanabe, Chairman, Nikko SecuritiesCompany, Ltd.* Takeshi Watanabe, Chairman, TridentInternationalFinance, Ltd., Hong Kong; former President,Asian Development BankErne Yamashita, Former Vice Minister of InternationalTrade and IndustryKizo Yasui, Chairman, Toray Industries, Inc.* Executive Committee121

ELEVEN"A concentrated foreign policy must give wayto a complex foreign policy, no longer focusedon a single dramatic task such as the defense ofthe west. Instead we must engage ourselves onthe distant and difficult goal of giving shape toa world that has suddenly become politicallyawakened and socially restless, A wider andmore cooperative world system has to includealso that part of the world which is ruled bycommunists. One third of mankind now livesunder communist systems and these stateshave to be assimilated into a wider fabric ofglobal cooperation."ZB1GN1EW BRZEZ1NSK1,National Security Council Advisor,Bonn, GermanyPLOT TO SURRENDER AMERICA"The revolutionary movement of 1776 to thepresent day is therefore the work of a continuousconspiracy working for its own ends and againstthe interests of the people." World Revolution,p 291, by Nesta WebsterContrary to popular belief the origins of theRussian Revolution are deeply rooted in theFrench Revolution and even more ancientintrigues."The cabalistic roots of revolution," saidColonel Roberts in The Anatomy of a Revolution,"from the French Revolution of the eighteenthcentury to the pattern of rebellion wracking theAmerican civilization today, lead to the formulafor secret societies and subversive movementsinspired by Adam Weishaupt. ProfessorWeishaupt (b. 1748) adapted the principles ofnation-wrecking from more archaic conspiraciesand formalized a system for world revolution. Theaim of the intrigue was, and continues to be, thesurreptitious imposition of a world government ofself-annointed elite (of mattoids) over the people ofevery nation."Concealed from the American people is thesecret role of America's financial community inthe Russian Revolution - and in subsequentexpansion of international communism. Review ofthese contributions to Soviet Communism doesmuch to explain the contradictions in Americanforeign policy.Villains of the Russian agony were theinternational banking families who financedTrotsky, Lenin and Stalin. The gold was providedin large measure by Jacob Schiff and SolomonLoeb of Kuhn-Loeb and Company; WilliamRockefeller, National City Bank; John D.Rockefeller, Chase Bank; Paul Warburg,Manhattan Bank, and J.P. Morgan, MorganGuaranty.122

Under the visible leadership of Lev DavidovichBronstein (alias Leon Trotsky) three hundredtrained assassins from the lower east side of NewYork were spirited into Russia to usurp the(Alexandre Feodorovich) Kerensky BolshevikRevolution.Owing allegiance only to their megabankmasters these nihilists were ultimately responsiblefor the liquidation of 12,000,000 Russian citizens.How the hapless Russian people, nowAmerica's designated enemy, were molded into aSoviet armed fist, will be shown later.Ambivalence of American Foreign policyconcerning the Soviet connection, was underlinedby Zbigniew Brzezinski, then National SecurityCouncil Advisor, during a talk at Bonn, WestGermany. Said Mr. Brzezinski:A concentrated foreign policy must give wayto a complex foreign policy, no longerfocused on a single dramatic task such as thedefense of the west. Instead we must engageourselves on the distant and difficult goal ofgiving shape to a world that has suddenlybecome politically awakened and sociallyrestless. A wider and more cooperativeworld system has to include also that part ofthe world which is ruled by communists.One third of mankind now lives undercommunist systems and these states have tobe assimilated into a wider fabric of globalcooperation.Soviet Communism, a creature of those whoplot to surrender America, is an instrument todestroy the existing social order and establish a'World Government' slave state upon the ruins ofthe Republic. "The Secret Government ofMonetary Power" would then fully controlAmerica's resources and production facilities . . .as they do in Russia.Interlocking subversion in governmentdepartments, brought into focus by Dodd,Brzezinski and Walt, is a clear and present danger.Chilling evidence of the manner in whichmegabankers and multinational industrialistsarmed a designated 'enemy' is revealed in,"America's Arms Race Against Itself." M. StantonEvans' article, first published in American LegionMagazine, reveals that the Soviet militaryjuggernaut is structured on American technologyand financed by American tax dollars.This force may be used to bring down the lastbastion of freedom - the United States of America.AMERICA'S ARMS RACE AGAINST ITSELFIncredibly and to a large extent, the United Statesis financing the Soviet Union's unprecedentedmilitary escalation.By M. Stanton Evans*In one of the most incredible stories in theannals of diplomacy, the United States forupwards of a decade has been conducting a lethalarms race against itself.Evidence accumulated by Congressionalinvestigators makes it increasingly plain that the*M. Stanton Evans is a former chairman of theAmerican Conservative Union. This article,reprinted from Speak Up, P.O. Box 272, Sta B,Toronto, Ontario M5T, 2W2 Canada, originallyappeared in American Legion Magazine, October1981. Copyright ©1981, The American LegionMagazine, reprinted by permission.Soviet Union's recent military build-up, seen asthreatening our strategic deterrent and survival,has been powerfully aided by U.S. industry.Numerous elements needed to build the Sovietwar machine have been obtained, it now appears,from American and other Western businessfirms—with the approval of our government.Among the most vivid examples of this processwas the Soviet invasion of Afghanistan inDecember 1979. When Soviet troops rolled intoKabul to subjugate that hapless nation, they did soin vehicles produced at the enormous Kama Rivertruck plant, built for the Kremlin with the help of80 U.S. firms and an estimated $350 million worthof our technology.When completed, Kama River will be thelargest truck factory in the world, capable ofproducing 250,000 heavy-duty trucks annually123

(larger than the output of the entire U.S. truckindustry), plus 100,000 diesel engines suitable foruse in tanks. The plant is being built by free worldfirms as a result of "peaceful" trade between theEast and West.The Afghan invasion focused attention onsomething previously known to U.S. intelligence,but usually passed over in public debate: KamaRiver has been systematically used for militarypurposes. Six months prior to the invasion, it wasknown that a substantial part of the 50,000-a-yearengine production was being installed in Sovietmilitary trucks, armored personnel carriers andassault vehicles, and that Kama products were online with Soviet military formations in EasternEurope.Kama River is one of dozens of examples ofsupposedly peaceful trade from U.S. and otherWestern firms being diverted to military purposesby the Soviets. Such diversion has a long historygoing back to the 1920s. In his monumental study,"Western Technology and Soviet EconomicDevelopment," Anthony Sutton estimates that 90percent of the advanced technology needed by theSoviets to pursue their military goals has comefrom the United States and its allies.In the past decade, this process has vastlyaccelerated as U.S. administrations have pursuedthe notions of detente and bridge building with theSoviets. As a result, the United States and otherWestern nations have been systematicallytransferring to the Soviets the advancedtechnology that once provided the West itsmilitary "edge" essential to modern warfare.Miles Costick, president of the Institute forStrategic Trade, which closely monitors suchdevelopments, sums up the process this way:During the past decade the free world hasbeen the source of much of the SovietUnion's electronic and computer technologyand manufacturing 'know how.' Further,the West has supplied the Soviet industrialsector with over $50 billion worth ofefficient machine tools, transfer lines,chemical plants, precise instruments andassociated technologies . . . Seldom if everhas a country been able, as the Soviet Unionhas, to persuade the countries against whommost of its military build-up is directed tofinance so much of such a build-up.Among the items traded to Moscow in this spanhave been laser technology, high-speed computers,semi-conductors, jet-engine technology, advancedradar systems, inertial guidance technology andnumerous other items needed to construct amodern military force. Far from applying these topeaceful commercial purposes, the Soviets havesystematically used them to build their warmakingpotential—a situation that has set alarm bellsringing in Congress and caused Senators JakeGarn (R-UT), William Cohen (R-ME) and HenryJackson (D-WA) to demand corrective action.A foremost object of Congressional concern isthe Soviets' gigantic SS-18 missile. According toU.S. intelligence, this missile comes equipped with12 independently targetable warheads (MIRV),accurate enough to seek out and hit our fixed-baseMinutemen. If true, this means the SS-18s candestroy a major component of our strategicarsenal.Considering the fact that the Soviets havehistorically been backward in the technologicalareas needed for such weaponry, includingcomputers and miniaturization, how could theyhave devised such an advanced system? Theanswer is that we provided it to them. Over thestrenuous objections of the Pentagon, wepermitted the sale of ]64 percision ball-bearinggrinders needed to manufacture gyros used inMIRVing—machinery capable of tolerances to a25th millionth of an inch, far beyond the state ofthe art available to Moscow or anywhere elseoutside America. As a result, says Garn:Not only have Soviet-MIRVed ICBMsreached accuracies previously undreamed ofby U.S. strategic analysts, but all Sovietmilitary systems and equipment requiringprecision inertial guidance have also reacheda new level of accuracy and sophistication.According to official U.S. governmentsources, we can expect Soviet advances inother areas as a result of the end products ofthis ill-fated sale that could be most crucialto the strategic balance, including advancesin Cruise missiles and ABM technology. . .While the SS-18 is the most formidable ofmilitary devices apparently made available to theSoviets through technology transfer, there aremany other developments in a similar veininjurious to our security interests. While many124

aspects of this subject have been mantled inofficial secrecy, transactions that have come topublic view include the following:• A corporation in the Southwest has sold,either directly or through foreign subsidiaries, 36array transform processor systems, needed for thedevelopment of advanced submarine detection.According to Costick, these systems are now beinginstalled in Soviet ships used in anti-submarinemissions and, along with other technologiesprovided by U.S. firms, are capable of threateningthe Trident submarine—another key componentof our strategic deterrent.• Between 1975 and 79, on the estimate ofdefense specialist Sean Randolph, U.S. computerand electronics firms sold the Soviets $300 millionworth of computer and related equipment.Computer technology is essential to ICBMguidance, ABM warfare and numerous otheraspects of modern warfare. The Soviet "Ryad"system, used in its ICBM and SLBM programs, isbased on IBM 360 and 370 computers illegallydiverted into the USSR in the early 1970s. TheKama River truck complex contains an IBM 370computer. In 1976, Control Data sought to sell theSoviets an even more advanced computer—atransaction halted by an outcry in Congress.• In 1974, the U.S. government approved thesale to Poland by a French consortium ofintegrated circuits based on U.S.-licensedtechnology—miniaturized systems essential toICBM guidance. These circuits, Costick notes, aretypical "dual-use technology," used in pocketcalculators, digital watches and TV sets, but alsoin ICBM guidance and aircraft fire controlsystems.• In like fashion, our government approved thesale to Moscow by a Swedish Firm—again usingU.S. technology—of the advanced air controlsystem at Vnukovo airport in Moscow. Thishighly sophisticated system employing computerguidedradar can detect any kind of airborneobject and calculate its future flight path withinstantaneous accuracy.• The Soviets also obtained the RB-211 engineused to power wide-bodied jets and well suited tolong range bombers. This engine was developedwith $300 million in research and developmentgrants from the U.S. government.• In 1980, the Carter administration approvedthe sale to Moscow of $144 million worth oftechnology for developing super-hardened drillingbits for deep oil well drilling, technology that notonly could augment the energy potential of theUSSR, but also could be transferred to such usesas making armored projectiles.These data from a burgeoning record wouldseem to bear out the grim conclusion of SenatorGarn that "what remains of our once-vauntedmilitary superiority, on which our nationalsecurity increasingly depends, is in part beingwhittled away through a wide variety oftechnology transfer mechanisms. . . History willshow that it was during the so-called period ofdetente that the Soviet Union began to challengeWestern interests on a global scale and mounted itsdrive for total military superiority over the U.S."The alleged rationale for this transfer oftechnology is that it builds bridges of mutualdependence between the U.S. and the USSR, andthat as such contacts grow the Soviets will becomemore reasonable.In this frame of mind, Western policy makershave accepted assurances that Kama River,though capable of manufacturing militaryvehicles, would be used for essentially peacefulpurposes. And that the advanced Cyber 76computer, 40 times faster than the computers nowbeing used by the Soviet military, would be appliedto "weather analysis" and "earthquake studies."Such an outlook has never conformed to thereality of Soviet behavior. That the Soviets wouldgladly divert "dual use" technologies to militarypurposes should be apparent to anyone familiarwith the tenets and performance of Marxism-Leninism. As noted by defense intelligencespecialist Jack Verona, the Soviets have theworld's largest R&D force—an estimated 800,000people—working overtime to make the USSR preeminentin military power, and bent on absorbingtechnology and information from the West."The Soviet Union," says Soviet historianRoy Medvedev, "is moving in one direction-—toward the strengthening of our militarymight. . . We are going to overtake theUnited States, and that is inevitable—ourcountry is a military machine. .. They don'trealize that we put everything into rocketry,125

that the government does not care aboutwhether or not anything is left over for thepopulation."The difference in mentality between Americantheorists of detente and their Soviet partners maybe observed in another facet of the process, theexchange of "students" between the U.S. andUSSR. Americans in Russia typically study socialsciences, liberal arts or cultural subjects (sampletopics: "The Heroine in the Russian Fairy Tale"and "Performance Practices in Russian ChoralMusic in the Late 19th and 20th Centuries"),Soviet "students"—whose average age is35—come to America and study aircraft design,optics, laser technology and computers.These "students" and other Soviet visitors toour shores, whose numbers have increaseddramatically in the era of detente, show aninordinate interest in technical institutions such asMIT and Cal Tech, scientific laboratories, airplanefactories, electronics labs and the like. In onememorable case, Soviet visitors to Lockheed,Boeing and McDonnell Douglas plants worespecial shoes that picked up metal filings from thefloor—helping them solve a nagging problem inmanufacturing alloys."Reverse engineering" from American processesand designs is a classic Soviet technique inweapons manufacture. The famous "Strella"missile used by the Communists in Vietnam andemployed by Marxist guerrillas around the worldwas reverse-engineered from the U.S. "Red Eye"missile, obtained by Moscow through aScandinavian country. Airborne missiles used inSoviet MIGs were similarly reverse-engineeredfrom the U.S. Sidewinder missile.In addition to the technologies and processesthey can obtain through purchase and "student"exchange visits, the Soviets also secure as much asthey can through outright espionage and illegalpurchases. Last year, the managers of a Californiaoptical firm were indicted for exportingsophisticated laser mirrors to the Soviets,technology now being used in the USSR's hunterkillersatellite program.Such arrests and prosecutions occur becauseU.S. export law requires the CommerceDepartment to police—and prevent—the exportof materials harmful to our national securityinterests. The U.S. government is thus in theschizoid position of taking punitive actions againstthe export of some strategic materials whilestrenuously encouraging the export of others.The irony of the situation was aptly symbolizedin 1972 when President Nixon announced theblockade of Haiphong Harbor and intensifiedbombing of North Vietnam to prevent the furtherinflux of Communist men and material in SouthVietnam. In support of this action, theDepartment of Defense released reconnaissancephotos showing the Soviet cargo ship Michurinsteaming toward Haiphong with dozens of SovietZIL trucks on deck, obviously intended for dutyon the Ho Chi Minh Trail.What was not stated was that both theMichurin and the trucks were products of U.S.technology—built for Moscow courtesy ofWestern industry. We were stepping up ourmilitary pressure on the Communists to preventthe use of trucks supplied to them by us. Whilethis was going on, we were simultaneouslypressing forward with the Kama River deal to givethem still more trucks, later used againstAfghanistan.Illustrating the mentality that has prevailed insome official circles was a 1977 proposal toapprove the export of a computer to the ZILplant. An interagency memo unearthed by thiswriter spelled out the differing attitudes towardthis proposal among the four govenment agenciesthat participate in reviewing exports."Problem is," said the memo, "that a quarterof the 200,000 trucks ZIL produces annuallygoes to the military, including 100 missilelaunchers. State and Commerce supportapproval, on the grounds that U.S.government has licensed exports to it severaltimes during the 1970s, that 100 missilelaunchers of a 200,000 vehicles annualproduction is small, and that the remainingtrucks for the military are basically nodifferent from heavy duty civilian trucks.Defense and ERDA support denial ongrounds that ZIL's military contribution isunacceptably high, and past exportapprovals should not be dispositive of theinstant case."Also suggesting the outlook that has prevailed126

at Commerce in recent years was the officialreaction to military use of products from theKama River truck plant. In May 1979, LawrenceJ. Brady, then acting director of the Office ofExport Administration, testified that Kama Riverproducts were being used for military purposesand that further exports to the plant should besuspended.Rather than acting on this recommendation,Brady's superiors argued that the Soviets hadnever actually promised to use Kama River trucksfor exclusively civilian purposes and that militaryuse was therefore not "diversion." Rather thancracking down on the Soviets, Commerce crackeddown on Brady, relieving him of export duties andin effect forcing him out of the department.Even in 1980, after a supposed tightening ofexport controls because of the Afghanistaninvasion, Commerce approved the shipment of adiesel-engine assembly line that would havegreatly enhanced the productivity of the KamaRiver plant. As with the Cyber 76, this was haltedonly by a vigorous protest in Congress. Nor didCommerce make any effort, in the aftermath ofthe invasion, to block shipments to EasternEurope-—where they could be easily diverted tothe USSR.A standard justification for such deals—aboveand beyond the supposed potencies of detente—isthat if we don't sell advanced products andtechnologies to the Soviets, somebody else will."Foreign availability," in fact, is the mainargument used by Commerce to promote relaxedrestrictions on exports to the East and pushthrough disputed sales. If the Soviets can get itsomewhere else, why shouldn't American firmsreap the profits instead?Such arguments ignore the fact that there is aninternational structure aimed at preventingstrategic exports harmful to the interests of theWest that could be utilized to reduce the "foreignavailability" problem. This is the Co-ordinatingCommittee for Multilateral Export Controls—Cocom for short—which includes the NATOallies and Japan, and which is supposed to screentechnology transfers to the Eastern bloc.Since the objection of a single Cocom membercan halt a transaction, the United States obviouslycould use its veto power—not to mention otherkinds of leverage—to prevent the flow of criticaltechnologies from our allies to the Soviets. Ratherthan do this, however, we have done exactly theopposite, using our influence to break down thesystem of controls. Instead of trying to preventour allies from seeking exceptions, we have led theway in seeking them ourselves; in recent years anestimated 50 percent of Cocom exemptions havebeen requested by our government.With increasing Congressional sensitivity to thisproblem, there are signs that a change of policy isunderway. In the new Commerce Departmentunder President Reagan, Lawrence Brady hasbeen brought back and currently is the AssistantSecretary for Trade Administration. White Housenational security adviser Richard Allen is knownto take a tough-minded view of the issue. SenatorGarn and others in Congress are pressing for amuch tighter set of controls on strategic exports.Such moves are all to the good. The evidence isoverwhelming that our technology is now arrayedagainst us in the strategic arms race, posing adeadly threat to our security. That process mustobviously be halted. By the same token, however,the fact that the Soviets are so dependent on theproducts of our industry provides us withpotentially enormous leverage in the otherdirection: by denying them access to ourtechnological advances, while continuing to makestrides ourselves, we can go far toward correctingthe military balance in our favor."The Soviets," Garn concludes, "haveobtained too many of the national securitysensitive technologies and commodities thathave provided the U.S. with a margin ofmilitary safety over the Soviet Union. Only adramatic change in our export policy,combined with the administrative capabilityto protect our national security will besufficient to do the job."127

NUCLEAR BLACKMAIL AND WORLD GOVERNMENT*General Lewis W. Walt addresses a FloridaChamber of Commerce*Reprinted from The Congressional Record, 15March, 1978, p E1327.*Mr. Kelly. Mr. Speaker, Gen. Lewis W. Walt,one of the most respected marines of our time,whose career culminated in the four-star post ofAssistant Commandant of the Marine Corps, hascontinued to serve his country vigorously since hisretirement from the corps.One of the most memorable covers of Lifemagazine was a picture of General Walt in thethick of the fighting in Vietnam, trying to win anawful war under impossible rules. If anyone couldhave done it, it would have been Lew Walt—amarine's marine, if there ever was one.General Walt is no less concerned about whathe regards as the challenges to America today.Always a popular speaker at public events, LewWalt is wading into this battle with all the spiritand determination for which he is famous. He seesan America that needs to be alerted to themovement toward loyalties that transcendnational boundaries. This movement woulddestroy our constitutional freedoms and ourrepresentative republican form of government.Implicit in this movement is also the likelihoodthat our standard of living and prosperity wouldbe divided and reduced by the world government.When a great leader speaks with earnestconcern regarding our Nation's welfare we shouldat least listen. It is for this reason that I submit foryour consideration the recent speech by GeneralWalt before a Chamber of Commerce audience inFlorida:*Hon. Richard Kelly of Florida in the House ofRepresentatives.Ladies and gentlemen, I am here today, not as amember of the Armed Forces but as a commoncitizen, an average Amerian. As one who is deeplyand alarmingly concerned about the security ofour freedoms.I am here today to speak to you because 1 feel itis my duty and my obligation to my country. Moredeeply, I feel an obligation to those Americans,whom I have seen sacrifice their lives on the fieldof battle to preserve our freedoms. I believe ourfreedoms are in greater jeopardy today than everbefore in the history of our nation. We are joinednow in a most critical battle to preserve ourfreedoms. To me it is a continuation of the battlesin which our heroic Americans have sacrificedtheir lives. There are no booming of guns ordropping of bombs but the enemy is real, manyfaced, insidious and clever, and the results can bejust as deadly to our freedoms.In a democractic Republic, military leaders donot commit their countries to wars. Politicalleaders initiate the wars and order the military tofight them. The leaders who start the war arenever active participants on the field of battle.Personally, on the battlefield as a Marineinfantryman, I was always trying to kill my"designated" enemy, because he was trying to killme. War is "Hell" only for those on the battlefieldand for those who have had their loved onesmangled or killed on the field of battle. For thosewho maneuver us into war, a war is a game inwhich our young men are pitted against a"designated" enemy in deadly combat.With the advent of jet aircraft, satellites, atomicpowered ships and submarines, instant world-widecommunications and nuclear weapons, the natureof war has changed! No longer are the Atlanticand Pacific oceans a shield behind which we canhide from our potential enemies. More important,no longer can the internationalist political leadershope not to be personally involved in a majorconflict because intercontinental nuclear weaponsare boundless in death and destruction effects. Forthis reason, I do not believe international politicalleaders will ever allow a nuclear conflict. But, Ialso believe that these same boundless weapons ofdeath and destruction will be used to blackmailnations into submission, submission to a newinternational order, a "one world" governmentwhere the Government will be the master and thepeople will be the slaves.I believe that our country, the United States ofAmerica, will be the first target. I believe that thestage is now being set for the blackmail action.128

How else can we explain:Why we were not allowed to win the war inKorea or Vietnam—Why we have given the USSR money, food,materials, and technology to allow them to buildup the greatest military power in the world insome respects—Why we are deserting our friends in Taiwan,South Korea, and South Africa, and at the sametime, extending a friendly and helping hand toCuba, Red China, and other Communistdominated countries—Why we are trying to give away the PanamaCanal when its loss would divide our Naval Forcesinto two parts—and be a severe blow to theeconomy of our country—Why have we deliberately cut back theeffectiveness and capability of our Armed Forcesby denying them the B-l and other criticallyneeded weapons systems without even requiring areciprocal reduction of Russian BackfireBombers—Why have we denied our nation an anti-aircraftdefense, a ballistic missile defense, and a civildefense while the Soviet Union, in direct violationof the intent and spirit of SALT I agreement, hasbuilt a civil defense to protect its people andindustries and an anti-aircraft and missile defenseof enormous proportions.The Soviet Union has six times more nuclearexplosive power in their intercontinental missilewarheads than we have. They have nearly fourtimes the number of submarines and twice thenumber of combat surface ships than we have. Formore than ten years, they have had, in theiroperating forces, several hundred cruise missiles oftwo hundred miles range which can be fired fromboth submarine and surface ships and againstwhich we have no proven defense.As a result of my military training, I havelearned to consider only the enemy's capabilitiesand not his intentions. His intentions can changeover night, his capabilities cannot.Today, the Soviet Union has the capability tocontrol the sea lanes and cut off, either on the seaor at their source, the vital raw materials whichour nation must have for its economy and itsmilitary readiness. Of the 72 vital materials weneed, a part of 66 of them have to be imported. Bysuch a move, our potential enemies could strangleour country economically, close down ourindustries, throw millions of our people out ofwork, cause economic chaos in our country which(due to the weakness of our military reserves andnational guard—result of no draft) would require amajor effort on the part of our regular forces tomaintain order.This then could be a time for nuclear blackmail.With the Soviet Union "armored" (Civil, Anti-Air& Missile Defense) and our Nation naked for thelack of these defenses, the blackmail could forcesome political leaders to capitulate.These national and international politicalleaders have made other preparations for theopportune hour. They have prepared a"Declaration of Interdependence" and a "NewStates of America" Constitution which wouldsubordinate our Constitution, our Armed Forcesand our economy to that of the "One WorldGovernment" (The United Nations). Ourfreedoms as guaranteed by our Constitutionwould no longer exist. No longer would our peoplebe the power and our Government the servant.The Government would be the master and ourpeople would be the slaves.Is our position hopeless?No! Not if our people can be awakened to themilitary, economic and political threat facing us.However, time is running out! This year'scongressional elections are the most critical of ourNation's history. The results will determinewhether or not our freedoms will be maintained. Ipredict, that before too long, those who signed orendorsed the "Declaration of Interdependence,"will be telling us that the only way we can saveourselves and other nations from a nuclearholocaust, is to form into a "New World Order"with a one world government. If the averageAmerican continues to be misinformed oruninformed or unaware of the blackmailmaneuver and the majority of the members of ourCongress refuse to stand up against such a threatthen our case will be hopeless and the middle class,free enterprise and all other freedoms, we havemistakenly taken for granted, will be onlymemories.129

AMERICAN POLICY AND GLOBAL CHANGE*"None of the funds appropriated in this title shallbe used to pay the United States contribution toany international organization which engages inthe direct or indirect promotion of the principle ofone-world government or one-world citizenship."—Public Law 495, Section 112, 82d CongressAt this point in our study we have, I believe,clearly defined the terrifying war-makingfunctions of the United Nations Security Council.Now, let us learn something about theinternational sleight-of-hand which has transferredour soldiers to the United Nations army.For this part of our search we must turn againto the military articles of the United NationsCharter. Under Article 43, Chapter VII is foundthe basic "treaty law" for establishing an "ArmedUnited Nations.""All members of the United Nations," statesArticle 43, ""in order to contribute to themaintenance of international peace andsecurity, undertake to make available to theSecurity Council, on its call and inaccordance with a special agreement, oragreements, armed forces, assistance, andfacilities, including rights of passage,necessary for the purpose of maintaininginternational peace and security." 1The most cursory examination of Article 43permits only one conclusion: It is the intent of thisarticle to provide the United Nations withunlimited war-making powers.Article 43 will wipe national boundaries off themap. It will create an irresistible internationalarmy. And it will chain the people of the world tothe wheel of a military juggernaut.We have now arrived at the concealed objectiveof the United Nations Charter.Absolute, monolithic world military power isthe concealed objective of the United Nations.However, this monstrous goal cannot beachieved by raw force alone. Force must be*From Victory Denied by Col. Roberts, 1966.1 United Nations Charter, Chapter VII, 'Actionswith Respect to Threats to the Peace, Breachesof the Peace, and Acts of Aggression, Article 43.130preceded by brainwashing, which will conditionthe population to accept a world militarydictatorship. Therefore, the Planners employFabian 2 Socialist techniques to accomplish theirpurpose.The internationalists, by gradualism andindirection, have made collectivism an acceptablepolitical philosophy. And, through the media ofmass propaganda, they have conferred legal statusupon illegal acts.In illustration of this technique, we might recallthat on September 1, 1961, the United StatesGovernment filed with the U.N. SecretaryGeneral a plan for the transfer of our entiremilitary establishment to the United Nations.Yet—there was no cry of outrage from theAmerian people.The policy document for surrender is StateDepartment Publication Number 72 77, titled"Freedom From War: The United States Programfor General and Complete Disarmament in aPeaceful World." 3In it, our State Department calls for ". . .progressive reduction of the war-making capabilityof the nations and the simultaneous strengtheningof international institutions to settle disputes andmaintain the peace. . ." Which means, of course,the disarming of the United States and theestablishment of a United Nations Army.Our government now states that we must pluckthe deterrent to Communist aggression from thecontrol of American citizens and place our defenseforces in the hands of the Communist-dominatedU.N. Security Council.Allegedly acting in the name of the Americanpeople, and for the "nations of the world," theU.S. State Department set forth the objectives oftheir program of general and complete2 Fabian. . . In the manner of the Roman generalQuintas Fabius Maximus, surnamed Cunctator(delayer) who avoided decisive contests againstHannibal; hence cautious, indirect activities.3 Exhibit—"Freedom From War: The UnitedStates Program for General and CompleteDisarmament in a Peaceful World," StateDepartment Publication Number 7277,September, 1961.

disarmament in a "Declaration on Disarmament"in a world where adjustment to change "takesplace in accordance with the principles of theUnited Nations.""The Nations of the world," says our StateDepartment, "declare their goal to be thedisbanding of all national armed forces and theprohibition of their reestablishment in any formwhatsoever, other than those required to preserveinternal order and for contributions to a UnitedNations Peace Force.""The Nations of the world," says our StateDepartment, are determined to eliminate allarmaments, including weapons of massdestruction, "other than those required for aUnited Nations Peace Force.""The Nations of the world," says our StateDepartment, will establish an effectiveInternational Disarmament Organization withinthe framework of the United Nations, "to ensurecompliance at all times with all disarmamentobligations.""The Nations of the world," says our StateDepartment will institute effective means for theenforcement of international agreements, for thesettlements of disputes, and for the maintenanceof peace, "in accordance with the principles of theUnited Nations." 4Under this plan, the United States will financeand man a totalitarian U.N. military complex. We,of course, will exercise no control over thisinternational army.The State Department proposes that thedisarmament of the United States and theconcurrent build-up of the United Nations armybe accomplished in the following three stages:Stage One: "The States shall developarrangements in Stage One for theestablishment in Stage Two of aU.N. Peace Force."Stage Two: "During Stage Two, States shalldevelop further the peace-keepingprocess of the United Nations to theend that the United Nations caneffectively in Stage Three deter orsuppress any threat or use of force4 "Freedom from War. . . , " USS Department ofState Publication 7277, page 11.in violation of the purposes andprinciples of the United Nations."Stage Three: "In Stage Three, progressivecontrolled disarmament andcontinuously developing principlesand procedures of international lawwould proceed to a point where nostate would have the military powerto challenge the progressivelystrengthened U.N. Peace Force."And there you have it—neatly spelled out bythe U.S. State Department: a totalitarian, oneworldgovernment—its edicts enforced by aninternational army.To implement the U.N. take-over, of course, it isnecessary to go through the motions of translatingthe policy of State Department Publication 7277into so-called law and to assure brainwashedAmericans that this "law" is in their own bestinterest.This is the way it was worked.In the same month that the State Departmentpresented its "Freedom from War" plan to theU.N., the U.S. Congress was pressured intopassing Public Law 87-297, "The Arms Controland Disarmament Act"... This Public Law, datedSeptember 26, 1961 established the United StatesArms Control and Disarmament Agency. 5Among the functions of this agency are thefollowing:"The preparation for and management ofUnited States participation in internationalnegotiations in the arms control and disarmamentfield."The dissemination and coordination of publicinformation concerning arms control anddisarmament."And . . ."The preparation for, operation of, or asappropriate, direction of United Statesparticipation in such control systems as maybecome part of United States control anddisarmament activities."Stripped of its deliberately confusing andevasive semantics, the "Arms Control and5 Exhibit - "The Arms Control and DisarmamentAct," Public Law 87-297, 87th Congress,September 26, 1961.131

Disarmament Act" purports to confer uponsocialistic bureaucrats the authority to destroy oursovereignty in secret international agreements; topropagandize the American people into acceptingthese felonious acts as being in the best interest ofthe United States, and to transfer the ArmedForces of America into the United Nations"Control System.""The so-called Disarmament Act," statedCongressman James B. Utt, "sets up a superagencywith power greater than the power ofCongress, which delegated it. The law wasalmost a duplication, word for word, of adisarmament proposal by the Kremlin in1959, and so we find ourselves againadvancing the Moscow policy. As anexample of the power. Section 43 (of theDisarmament Act) provided that thePresident may, in advance, exempt actionsof the Director (U.S. Disarmament Agency)from the provisions of law relating tocontracts or expenditures of Governmentfunds whenever he determines that suchaction is essential in the interest of UnitedStates arms control and disarmament andsecurity policy."The Disarmament legislation," continuedCongressman Utt, "was passed for thepurpose of implementing the Department ofState Publication 7277, entitled 'Freedomfrom War—The United States Program forGeneral and Complete Disarmament in aPeaceful World. 1 This little gem from theState Department," he said, "laid out theprogram for complete disarmament on athree-stage basis, the purpose of which wasto reduce the armaments of every nation toalmost the zero point, including our ownNational Guard and to concurrentlyaugment an international peace force underthe benevolent guidance of the CommunistdominatedUnited Nations, whose recent,murderous actions in Katanga should makeevery American shudder at the thought ofthe U.N. blue helmets enforcing the edicts ofU Thant in this Republic. The idea was toreduce our military capability to zero withthe exception of a small federal army trainedin counterinsurgency to put down civil strifewithin this country."One of the first steps of the ArmsControl Agency," said Mr. Utt, "was torecommend the repeal of the ConnallyAmendment and to make this countrycompletely subservient to the InternationalCourt of Justice, The International Court ofJustice is about as un-American as possible.It is true that the World Court is notsupposed to act on domestic matters, but sodoes the U.N. Charter provide that the U.N.should not inject itself into domestic matters.Yet, the Congo is living proof that they haveno intention of living by the Charter. Thereis every intention," said Congressman Utt inconclusion, "on the part of the DisarmamentAgency to destroy the sovereignty of thisnation and put us under the control ofinternational tyranny, and they are movingrapidly in this direction." 6Significantly, the U.S. Arm Control andDisarmament Agency published an "Outline ofBasic Provisions of a Treaty on General andComplete Disarmament in a Peaceful World"which faithfully reflects State DepartmentPublication 7277. Headlined, "Blueprint for thePeace Race," dated May, 1962, the newly formedDisarmament Agency declared that a UnitedNations "Peace Force" would be establishedwhich would be equipped with "agreed types ofarmaments" and would be supplied "agreedmanpower." 7"Blueprint" was to become a major weapon inreorienting the allegiance of United States militarypersonnel to the U.N. banner.Six months after initial publication theDisarmament Agency "Blueprint" appeared, wordfor word, in a Department of Defense "ArmedForces Information and Education" publicationtitled, For Commanders—This Changing World.For Commanders is designed to provide militaryleaders and their information staffs with "official"policy and is expected to influence officer andenlisted education programs within the armedforces."States," the Department of Defense toldU.S. armed forces personnel, "should retain6 Washington Report, Congressman James B.Utt,February 14, 1963.7 Blueprint for the Peace Race, U.S. ArmsControl and Disarmament Agency, May, 1962,page 3.132

at their disposal only those minimum forcesand non-nuclear armaments required for themaintenance of internal order and theprotection of the personal security ofcitizens. While disarmament was beingcarried out (under the U.S. Control andDisarmament Agency), states shouldcontribute agreed manpower and arms to aU.N. peace force to 'deter or suppress anythreat or use of arms in violation of thepurposes of the United Nations'."U.S. conformity with the provisions of StateDepartment Publication 7277, and with Article43, United Nations Charter, was thus "legalized"by the U.S. Congress and the Department ofDefense.The enormity of this subversion is nearlyincomprehensible—as is the failure of theAmerican people to protest the criminalabrogation of the United States Constitution.As one American soldier I bitterly resent beingturned over to an organization whose everyprecept and very existence contravenes theConstitution I have sworn to uphold.I reject the illegal agreements which wouldplace me under a foreign flag and an enemycommander-in-chief.And I deny the right of anybody in mygovernment or anywhere else to enlist me in aUnited Nations army.Redirecting the allegiance of American fightingmen toward the United Nations banner andreshaping the role and mission of United Statesmilitary forces for global responsibility in a oneworldgovernment is, of course, prerequisite to thesuccess of the Planners. The importance ofcapturing U.S. military forces for enforcing theedicts of a one-world government is suggested bythe thrust of the infamous Reuther Memorandum,authored by Victor Reuther.It will be remembered that the brothersReuther, Victor and Walter, wrote to friends inthe U.S. from their factory jobs in Soviet Russiaduring the 1920's, urging unstinting efforts for thecreation of a "Soviet America."In the fall of 1961, Victor and Walter Reuthervisited Attorney General Robert Kennedy todiscuss their views on the so-called "right-wing" inAmerica with particular attention given to "The133Radical Right Inside The Armed Services." Theyhad, they said, some specific suggestions thatmight be considered for a campaign to silence thegrowing voice of conservatism. These suggestionswere put in written form at the suggestion of Mr.Kennedy and subsequently were sent to theAttorney General as a twenty-four page documenton December 19, 1961. 8"The problem of radical right influencesinside the Armed Services," said VictorReuther, "is an immediate one made all themore so by the up-coming hearings of theSenate Armed Services Subcommittee (onmilitary 'muzzling')."It has been widely reported," the ReutherMemorandum continues, "that GeneralWalker's (Major General Edwin A. Walker)radical right viewpoint is shared by asubstantial number of his colleagues. Oneobserver, Louis J. Nalle, has reported thatWalker's position 'represents the publiclyunexpressed but privately outspoken viewsof an important part of our American officercorps in all three services.' 9 Drew Pearsonhas twice reported without contradictionthat a Lieutenant General has leaked secretinformation to Senator Thurmond insupport of the Walker position. The'Americanism Seminars* espousing radicalright wing doctrine and sponsored or cosponsoredby the Armed Services in variousplaces could only have been accomplishedby radical right officer personnel with thearmed forces," said Messers Reuther."It also appears," continues this amazingreport, "to have been widespread pressurefrom right-wing Generals and Admirals inthe Pentagon which brought about the recallto duty of General Van Fleet. . . All that therecall has accomplished is to embarrass theAdministration when Van Fleetirresponsibly attacked the Administration'sAmbassador to the United Nations."The brothers Reuther then exposed the realreason for their report to the Attorney General:8 The Reuther Memorandum, by VictorReuther,Office of the Attorney General, Washington,B.C.9 'New Republic, November 20, 1961.

An alternative to getting Senator (RichardB.) Russell to broaden the hearings would befor Secretary McNamara to start his owninvestigation of radical right Generals andAdmirals.The report then states with gross impertinence:This might have the effect of causing theresignation of some of these Generals andAdmirals which would certainly be in thenational interest. At any rate, politicalactivity after such warnings would begrounds for dismissal from the service.A major objective of the take-over crowd is, ofcourse, the silencing of articulate anti-Communistswithin the military services. This one mission has,and continues to receive, high priority. Thesuccess of the Planners in imposing one-worldgovernment on the nations of the world isdependent upon eradication of resistance orpossible resistance, by the United States militaryestablishment.It will be recalled that Secretary of DefenseRobert S. McNamara immediately implemented asimilarly motivated Fulbright Memorandum andprecipitated a witch hunt in the American army in1961. On July 31 of that year, Army News Servicereleased a Pentagon Directive giving fullresponsibility to Mr. Arthur Sylvester, Secretaryof Defense for Public Affairs, for "providingpolicy guidance not only for all public affairsactivities of the Department and its entities, butalso for the conduct of any informationalprograms directed in whole or in part to thegeneral public." 10"Defense Secretary Robert S. McNamarahas ordered the Joint Chiefs of Staff to revisea directive that permits military men toinstruct civilians in anti-communism," saidthe Chicago Sun-Times in an article coveringthe Secretary's action. 11The importance of this anti-anti-Communistvictory over conservatives in uniform is succinctlypresented in an article by Gus Hall, GeneralSecretary, Communist Party, U.S.A. Writing for10 Release Number 47, Army News Service, July13, 1961.11 "Curb Military Anti-Red Crusaders," ChicagoSun-Times, July 13, 1961.The Worker three days following the McNamaracrack-down on military anti-communists, Hallsaid:In the opinion of the Communist Party therecan be no question but that the threat fromthe extreme Right is serious . . . Anotherpronounced characteristic of this growingfascist movement is its spreading influenceamong the higher military personnel. Thecase of General Walker was only a symptomof a much deeper affliction. Even thePentagon had to admit recently that it was'worried' over the extent of Birchite andsimilar influences among the ranking officersof the military services. 12Following the pattern of the now wellpublicizedFulbright Memorandum, the Reuthers,in continuation of their recommendations to theAttorney General, state with ill-concealedhysteria:"The strong posture against radical rightGenerals and Admirals suggested in thismemorandum would go far to answer Sovietpropaganda that American foreign policy isnot in responsible hands and that there is asubstantial 'preventative war' group in thePentagon which may ultimately get theupper hand. This strong posture would notonly reassure our own allies," says Reutherin the logic of the anti-anti-Communist, "butmight give support to factions within theSoviet Union that strive for a more flexibleposition on the Soviet's part."The validity of the Reuther rationale may bejudged by the comments of Lieutenant Colonel O.Aleksandrovsky who wrote in the July 18 editionof Red Star (official Soviet Army newspaper):No matter what happens, this scandalousstory of the business of General Walker andthe Birch Society clearly shows that thePentagon is teeming with generals andadmirals who openly profess facism and areattempting to drag the country down theroad to unleashing the Third World War. 1312 "The Ultra-Right, Kennedy, and the Rise of theProgressives," by Gus Hall, The Worker, July16, 1961.13 "Reds make Hay out of Rebuke to GeneralWalker," New York Journal American, Aug.15, 1961.134

The intemperate charges placed against GeneralWalker and his troop education program in the24th Infantry Division by Reuther, Hall,Aleksandrovsky, and other like-mindedindividuals, were part of the witch hunt in theAmerican army.A top source for hard facts with which toconfront these professional internationalists isfound in United States Senate Report, "MilitaryCold War Education and Speech ReviewPolicies," a Committee summary of the findingsmade by the Special Preparedness Subcommittee,Committee on Armed Services during the courseof the 'Military Muzzling' hearings."It is well," states this Senate report, "tocomment on the popular misconception thatGeneral Walker was disciplined because ofhis troop indoctrination activities inconnection with the 'pro-Blue' program.This is incorrect. The army investigatingofficer specifically found that the divisioninformation and education programconducted by General Walker under thename of 'pro-Blue' was 'basically sound' andhe consequently recommended that it'continue to be implemented in the 24thInfantry Division'." 1414 Committee Print, USS, Committee on ArmedServices Report, October 19, 1962, page 31."While it is unfortunate that tradition forbidsour military leaders from becoming politicallyoriented, there are many brilliant exceptions suchas retired Maj. Arch E. Roberts, author of VictoryDenied, who is still fighting for his country andpeople."Hon. John R. Rarick, M.C.Congressional Record, November 8, 1967HI4944 Maj. Roberts (now Lt. Col.) authored the24th Inf. Div. "Pro-Blue"program in Germany.FORD FOUNDATION: MERGE UNITED STATES & RUSSIANorman Dodd Testimony, Illinois JointLegislative Committee on Regional Government*Mr. Chairman, after listening to the very abledescription of how complex the question that isbefore the committee is, I have been thinking interms of drawing on my own experiences thatrelate to the development of the proposal calledregional government which might be helpful tothe committee. I think the committee deserves tounderstand and have a first hand look at the originof the idea of regional government and also to bemade aware of the purpose for which the idea hasbeen introduced. So, I would like to share with thecommittee, two experiences, one of them—andthese experiences are traceable to a position I atone time held as the Executive Director of a*Mr. Norman Dodd, former Director, Committeeto Investigate Tax Exempt Foundations, U.S.House of Representatives, and Council Member,National Committee to Restore the Constitution,Inc., statement before Illinois Joint LegislativeCommittee on Regional Government hearing,University of Southern Illinois, Edwardsville, 26September 1978, State Representative GeorgeRay Hudson, Chairman. Investigation instigatedand talk by Mr. Dodd sponsored by IllinoisCommittee to Restore the Constitution, Mr. JohnSmith, President.135Congressional committee that was called upon toinvestigate the relationship of the economy andwealth in this country to the purposes representedby the Constitution of the United States. As aresult of that investigation, experiences began toaccrue and one of them stemmed from the entityor the head of the entity responsible for theproposition which you all now face called regionalgovernment. This individual was the head of theFord Foundation and this experience took placeback in 1953. It took the form of an invitationfrom the President of the Ford Foundation to meto visit the Foundations offices, which I did.On arrival I was greeted by Mr. RomanGaither, the President of the Ford Foundationwith this statement: "Mr. Dodd, we have invitedyou to come to New York and stop in and see usin the hope that off the record you would tell uswhy the Congress of the United States should beinterested in operations such as ours."Before I could think of just exactly how I wouldreply, Mr. Gaither volunteered the followinginformation and these are practically in his exactwords."Mr. Dodd, we operate here under directiveswhich eminate from the White House. Would youlike to know what the substance of these directivesis?"

1 said, "Indeed I would Mr. Gaither."Whereupon he then said the following, "Wehere operate and control our grant making policiesin harmony with directives the substance of whichis as follows: We shall use our grant making powerso as to alter life in the United States that it can becomfortably merged with the Soviet Union."This is as shocking, almost unbelieveable,attitude you can run across. Nevertheless, this iswhat clarified the nature of the grants of the FordFoundation, which incidently, of course, was thenthe largest aggregation of privately directed wealthin the United States.Now the second experience that I would like toshare with you, and incidentaly it is the FordFoundations' grants which are responsible forformulation of this idea of regional governmentand also the idea that given regional government,we must in turn develop and accept and agree to atotally new constitution which has already beendrawn up which was mentioned just a few minutesago. My next experience ran this way andfollowed an invitation from the head of theCarnegie Endowment for International Peace. Itentailed visiting their offices, which I did. Theinvitation itself came because of a letter which Ihad written to the Carnegie Endowment askingthem certain questions which would claify thereasons for many of the grants which they hadmade over a period of time.On arrival at the office of the President, I wasgreeted with this statement, "Mr. Dodd, wereceived your letter. We can answer all thequestions but it will be a great deal of trouble. Thereason it will be a great deal of trouble is because,with the ratification by the Senate of the UnitedStates of the United Nations Treaty, our job wasfinished. So we bundled all our records up,spanning roughly speaking 50 years, and put themin the warehouse. We have a counter suggestionand that counter suggestion is that if you will senda member of your staff to New York, we will givehim a room in our library and the minute books ofthis organization since its inception in 1908."My first reaction to that suggestion was thatthese officers had lost their minds. I had a prettygood idea by that time of what those minute booksmight well show.The executives who made this proposal to mewere relatively recent in terms of their positionsand I was satisfied that none of them had everread the minutes. To make a long story short, asshort as possible, a member of my staff was sent toNew York and spent 2 weeks there and did whatthey call spot reading of the minutes of theCarnegie Endowment for International PeaceOrganization.Now we are back in the period of 1908 andthese minutes reported the following: The trusteesof the Carnegie Endowment bring up a singlequestion, namely if it is desirable to alter the life ofan entire people, is there any means more efficientthan war to getting that end and they discussedthis question at a very high academic andscholarly level for a year and they came up withan answer. There are no known means moreefficient than war, assuming the objective isaltering the life of an entire people. That leadsthem to a question. How do we involve UnitedStates in a war. This is in 1909. I doubt if therewas any question more removed or any idea moreremoved from the minds of us as a people at thattime than war. There were certain what we callintermittent shows in the Balkans. I also doubt ifvery many of us knew really where the Balkanswere, or their relation, or possible effect on us.We jump then to the time when we are in a warand these trustees . . ., oh, before that the trusteesthen answered the question of how to involve usin a war by saying we must control the diplomaticmachinery of the United States. That brings upthe question of how to secure that control and theanswer is: We must control the State Department.Now at that point, research discloses arelationship between the effort to control the StateDepartment and an entity which the CarnegieEndowment set up, namely the Council ofLearned Societies and through that entity, arecleared all of the appointments, high appointmentsin the State Department. They have continued tobe cleared that way since then.Now, finally we're in a war, eventually the waris over and the trustees turn their attention then toseeing to it that life does not revert in this countryto what it was prior to 1914 and they hit upon theidea that in order to prevent that reversion theymust control education in this country. Theyrealize that that is a very tremendous, reallystupendous and complex task, much too great forthem alone. So they approach the RockefellerFoundation with the suggestion that the task bedivided between the two of them. The CarnegieEndowment takes on that aspect of education that136

has a tinge of international significance and theRockefeller Foundation takes on that portion ofeducation which is domestic in this relationship.These two run along in tandum that waydisciplined by a decision, namely that the answerlies entirely in the changing of the teaching of thehistory of the United States. They then approachfive of the then most prominent historians in thiscountry with the proposition that they alter themanner of the teaching of the subject. They getturned down flatly. So they realize then they mustbuild their own stable of historians, so to speak,and they approach the Guggenheim Foundation,which specializes in fellowships and suggest tothem that when they locate a relatively youngpotential historian, will the GuggenheimFoundation give that person a fellowship merelyon their say so. The answer is, they will.Utlimately a group of twenty are so assembledand that becomes the nuclei of the policy whichemanates to the American Historical Association.Subsequently, around 1928, the CarnegieEndowment granted to the American HistoricalAssociation $400,000, in order to make a study ofwhat the future of this country will probably turnout to be. And they come up with a 7 volume setof books. The last volume being a summary anddigest of the other 6. In the last volume the answeris as follows: The future in the United Statesbelongs to collectivism administered withcharacteristic American efficiency. That becomesthe policy which finally picks up and manifestsitself in the expression of collectivism all the wayalong the line, of which the dividing of thiscountry into regions, using all of the logic whichsupports the idea, has a rhyme and reason for it. It(collectivism) supports the ultimate idea that, inorder for the regional government in turn beeffective, there must be a new Constitution of theUnited States.That is the background, gentlemen, of this veryserious question with which you all are nowwrestling. I felt that possibly this historicalbackground might tend to help a little bit as youtake on this high responsibility which istremendous. You must have been thoroughlyimpressed with the complexities which arise andconfront you if you do not go at this problem interms of the origin of the idea and the real purposebehind that idea. And that, and skipping all theway over to try to distill a system, or a workingplan, whereby our society can cope with thesecomplexities as they exist today.I wanted to make these points as brief as Icould. I appreciate very much the privilege ofbeing with you and wanted to give you these twobits of experience which tend to focus on thedifficulty of discharging the responsibility whichhas been presented to you.Chairman Hudson:Thank you, very much, Mr. Dodd, for yourtestimony, and for coming from such a distance, asI believe you must have, to do so.Now are there questions from the Committeemembers here?Committee Member:Yes, Mr. Dodd, Mr. Chairman. Mr. Dodd, first,I shouldn't use the word amazed but I amthoroughly amazed at your ability to recall thepages through history which you have done and Icongratulate you on that. It proved to vary greatlyfrom my education. I'm just a little coal miner'sson and I haven't been around except to twocounty fairs and rodeos, but I would like to knowa little bit about you, Sir. Could you in a briefcapsule tell me what have you done since let's saythe age 25.Mr. Dodd:Yes, indeed, I can. My life has been spent inpretty much every phase of the world of financethat you can think of, as Commercial banking,what they know as fudiciary banking, investmentadvisory work, membership in the firm, memberof the stock exchange.Committee Member:Let me interrupt you sir, if I might, as that typeof a background, how do you feel about holdingcompanies and consolidation branch banking,etc.?Mr. Dodd:Gracious you don't want me to start in onanything such . . .Committee Member:Well, to me it would be relative as we are talkingabout regionalism and to me regionalism is bad,then these other things could be bad.Mr. Dodd:Not only could be sir, but in my opinion theyare detrimental to the objectives of the foundingfathers of this country.Committee Member:You've answered my question. Now anotherthing, you took us back to 1908 and I came home137

... in 1912 about the time of the Balkan wars,which you alluded to in the World War I. Nowtoday you said that we actually created, they,whoever they are, actually created a situation of awar.Mr. Dodd:Wait, you deserve to know who the "they" are.The "they" in this instance are, were the trusteesof the Carnegie Endowment for InternationalPeace. They were men who were prominentlawyers in New York, like Nicholas Murray Butlerthe head of Columbia University, alsosubsequently Allen & Foster Dulles as attorneys,and that caliber of gentlemen.Committee Member:Well, I'm trying to correlate what you're talkingabout, 1912, with 1978, the meeting of CampDavid, the problems in the Middle East, theChinese-Russian situation, as we see now. Are"they" now getting us ready for a Third WorldWar?Mr. Dodd:Well, my answer to that sir is that they have setforces in motion, and they can't help but, theseforces cannot help but culminate in World WarIII. I happen to personally believe it's possible toprevent it working out that way but I'm alone inmy belief.Committee Member:You're not alone.I was in public education for 39 years, Ibasically was a history teacher. When I walk in theclassroom today I don't see American historytaught as you alluded to, and who used to teach it.American history is, in fact, not a course anymore.We have a general smattering of human relations,or what not, but not American history. I agreewith you on that. Now, one other question, I amfrom a small community of about 700 people, Igraduated from a high school of 110. But therewere seven of us in my graduating class, and I wasthe only boy. And the 6 girls elected me presidentand I've been trying to make up from that eversince.But the idea is that today we are doing awaywith these small community schools. The problemas I see it is not only of Regional Government butof consolidation of schools. I was principal of thehigh school this year that had 1,900 students,when I came here there were 550 students in thishigh school and we had a lovely school, I thought,then it grew to 750 and still it was a tremendousschool. Then we got 1,000 and I thought wereached our peak and from then on and I'm nottrying to be critical of anyone in the schooladministration but I'm just saying that I thinkwe've gotten too big and with 1,950 students inour present high school in this community, wehave problems that did not exist, and I don't thinkindividuals have changed that much. It's a matterof groupings, and numbers of people. You get toomany people here so I think you and I would be inagreement that possibly regionalism might lead,and is leading, and has been to the consolidation ofschools, doing away with the small school on theidea they can't get a good education here. In mybackground, I don't claim to be successful by anymeans, but coming from a coal mining town froma coal mining family, from an ethnic backgroundof Italian immigrants, I think we done real well...of the small school so I agree wholeheartedly withyou that the idea that regionalism, I am talkingabout Government, may lead to the wiping out ofsuch things. We've had so much busing, so muchtransportation, so much taxation, so much budgetthat I don't know whether we can continue livingwith it. Thank you very much.Chairman Hudson:Mr. Dodd, I have one question. You mentioneda proposed new constitution, a federal charter, forthis country sort of waiting in the wings. Is that,the one, I have heard tell of a Tugwell (newstatesconstitution), is that the one that you refer to?(See: "A Constitution for the Newstates ofAmerica," Emerging Struggle for StateSovereignty, by Archibald E. Roberts, LtCol,A US, ret.Mr. Dodd:Yes, that's it.Chairman Hudson:Alright, Well thank you very much.Mr. Dodd:Thank you very much, Mr. Chairman.Other references:"Reece Committee on Foundations, 'EmergingStruggle for State Sovereignty, by Archibald E.Roberts, LtCol, AUS, ret.'Reece Committee Revisited," EmergingStruggle for State Sovereignty, by Archibald E.Roberts, LtCol, AUS, ret.138

TWELVE"A third (mattoid or half-fool), who suffersfrom moral insensibility, so that no bond ofsympathy links him with his fellow man orwith any living thing, and who is obsessed byvanity amounting to megalomania, preaches adoctrine of the Superman, who is to know noconsideration and no compassion, to be boundby no moral principle, but 'live his own life'without regard for others."SOCIOLOGIST MAX NORDAUTHE MATTOID SYNDROMEAMERICA THE BEAUTIFUL HAS FALLEN INTO THE HANDSOF POLITICAL MADMEN*It is appallingly clear that America the beautifulhas fallen into the hands of political madmen!Our people are exploited and terrorized bycoercive domestic policy at home, our sons arebetrayed in "no-win" military adventures abroad,and our national honor and integrity arecompromised all over the globe.An increasing number of U.S. citizens, seekingrecovery of national reason, recommend andendorse a public examination of this strategy ofdefeat. They believe, as you believe, that the perilof political madness can be ignored only on pain ofextinction of the State. Americans must, theywarn, isolate the psychology of those whopromote rebellion and inspire a study of theanatomy of revolution.One of these alarmed Americans is David O.Woodbury, author of 23 books of science, whosaid in the Manchester Union Leader,*from The Anatomy of a Revolution, byArchibald E. Roberts, Lt. Col, AUS, ret.,pub. 1968.We are confronted by a horde of madmen.Mad in the same sense that Hitler was mad— a fact which the whole world accepts.Mad in the sense that their conduct, theiraspiration, their reasoning, their actions arethose of minds out of control, irrational,unsound, blown by a hurricane of willfulinsistence upon principles that civilizationhas proved over and over again to bespecious and often degenerate. 1It is also apparent that insanity has recruited avast apparatus of propaganda and employs adiabolical cleverness in posing as the protector andbenefactor of mankind while actually furtheringnihilistic objectives.Contemporary history, in fact, convincinglysuggests that those who head the FederalGovernment are manipulated by mattoids — bymen of unbalanced and dangerous brilliance.These hidden exploiters of the United States1 David O. Woodbury, The Madmen, Manchester,N.H., Union Leader, January 17, 1966.139

power structure apply an inverted psycho-eugenicscience as a weapon against the people. Theyhave, seemingly, perfected a sophisticated andsystematized plan, incorporating brainwashingand genetic prostitution, to achieve soviet-stylecontrol over the American social order.To escape the dolorous fate of yesterday'speople, Americans can dispel this doctrine ofdarkness by disseminating definitive intelligenceand by adopting corrective political action. Powerentrenchedmattoids can only be overthrown byan informed and indignant electorate.It is proposed that the psychopathic malignancythreatening the American civilization be examinedin depth and the knowledge gained thereby beapplied with surgical finality. Let us begin bydefining the nature of the foe.Sociologist Max Nordau has identified threeclassifications of the mattoid."A mattoid or half-fool," Nordau said,"who is full of organic feelings of dislike,generalizes his subjective state into a systemof pessimism, of 'Weltschmertz'—wearinessof life."Another, in whom a loveless egoismdominates all thought and feeling, so thatthe whole exterior world seems to himhostile, organizes his anti-social instincts intothe theory of anarchism."A third, who suffers from moralinsensibility, so that no bond of sympathylinks him with his fellow man or with anyliving thing, and who is obsessed by vanityamounting to megalomania, preaches adoctrine of the Superman, who is to knowno consideration and no compassion, bebound by no moral principle, but live hisown life' without regard for others."When these half-fools, as often happens,speak an excited language," said Nordau,"when their imaginations, unbridled by logicor understanding, supplies them with odd,startling fancies and surprising associationsand images—their writings make a strongimpression on thought in the cultivatedcircles of their times." 22 Max Nordau, The Degeneration of Classes andPeoples. Hibbert Journal, July, 1912.Irrational political decisions at policy-makinglevels force upon perceptive Americans theconclusion that an invisible government of men"unbridled by logic or understanding" hasacquired ultimate power and influence in theUnited States. Furthermore, the image-buildingmanipulations of these mattoids favor thedevelopment of similar attitudes in others and givethousands—perhaps millions—of normally wellbalancedpersons the courage to overtly engage inabsurd or infamous acts.". . . Through the influence of theteachings of degenerate half-fools," Nordaucontinued, "conditions arise which do not,like the cases of insanity and crime, admit ofexpression in figures, but can nevertheless inthe end be defined through their politicaland social effects. We gradually observe ageneral loosening of morality, adisappearance of logic from thought andaction, a morbid irritability and vacillationof public opinion, a relaxation of character.Offenses are treated with a frivolous orsentimental indulgence which encouragesrascals of all kinds. People lose the power ofmoral indignation, and accustom themselvesto despise it as something banal,unadvanced, inelegant, unintelligent. Deedsthat would formerly have disqualified a manforever from public life are no longer anobstacle in his career, so that suspicious andtainted personalities find it possible to rise toresponsible positions. . . Nobody is shockedby the most absurd proposals, measures, andfashions, and folly rules in legislation,administration, domestic and foreignpolitics.. . Everybody harps upon his 'rights'and rebels against every limitation of hisarbitrary desires by law or custom.Everybody tries to escape from thecompulsion of discipline and shake off theburden of duty." 3Published fifty-six years ago, Nordau'scommentary, The Degeneration of Classes andPeoples, is a shocking prophecy of the mattoiddirectedmalaise besetting America today. Thedestructive social doctrines of our own time,attractive on the surface but basically subversive,are essentially the product of unsound reasoning3 Ibid.140

y unsound brains. Sociologist Nordau ablyanalyzed the enormous harm done by suchindividuals preaching negative dogma. They leadastray vast numbers of average people whoseintelligence is not high enough to protect themagainst clever fallacies clothed in emotionalappeal, and they arouse the degenerate elementsand primitive types in society.In his book, The Revolt Against Civilization,Lothrop Stoddard indicts these political madmenand suggests the manner in which protectors ofthe American civilization may meet the challengeof our day.Stoddard observed,". . . Construction and destruction, progressand regress, evolution and revolution, arealike the work of dynamic minorities.Numerically small, talented elites create andadvance high civilizations; while JacobineFrance and Bolshevic Russia prove how asmall but ruthless revolutionary faction canwreck a social order and tyrannize a greatpopulation. Of course," he said, "thesedynamic groups are composed primarily ofleaders—they are the officers' corps of muchlarger armies which mobilize instinctivelywhen crises arise." 4The profound effect which a numericallyinsignificant intellectual elite can have on theprogress of a civilization is illustrated by the classicAthenian example."In the two centuries between 500 and300 B.C.," reported geneticist EdwinConklin, "the small and relatively barrencountry of Attica, with an area and totalpopulation about equal to that of the presentState of Rhode Island, but with less thanone-fifth as many free persons, produced atleast 25 illustrious men. Among statesmenand commanders there were: Miltiades,Themistocles, Aristides, Cimon, Pericles,Phocion; among poets, Aeschylus,Euripides, Sophocles, Aristophanes; amongphilosophers and men of science, Socrates,Plato, Aristotle, Demetrius, Theophrastus;among architects and artists, Ictinus,Phidias, Praxiteles, Polygnotus; among4 Lothrop Stoddard, The Revolt AgainstCivilization, p. 224.historians, Thucydides and Xenophon;among orators, Aeschines, Demosthenes,Isocrates, Lysias."In this small country," said Conklin, "inthe space of two centuries there appearedsuch a galaxy of illustrious men as has neverbeen found on the whole earth in any twocenturies since that time. Galton 5 concludesthat the average ability of the Athenian raceof that period was, on the lowest estimate, asmuch greater than that of the English race ofthe present day as the latter is above that ofthe African negro." 6Eugenically, civilization has been a catastropheto the race which has created it. Geneticist SamuelJ. Holmes, Ph.D., in his book, The Trend of theRace, quotes from an earlier authority, Lapouge,who noted the depressing effects which selectiveagencies have had on ancient and modernsocieties. Both of these authorities determined thatrobust blood lines are consumed by an advancingculture, while those of little worth are artificiallyprotected and, eventually, overwhelm theestablished order. The morbid statistics of declinewere discussed in Lapouge's work, Les SelectionsSociales, published in 1869. Lapouge described theoperation of several forms of social selection, i.e.,military, political, religious, moral, legal, economicand systematic, all of which are brought into playas a consequence of the development ofcivilization."The racial influence of civilization," concludedHolmes, "is therefore bad." 7 It will continue to be"bad" until advanced societies learn to copesuccessfully with overt and covert forces inimicalto the bearers of the social order.The decay of ancient races and civilizations mayhave been tolerable to man at a time when therewere available evolved and millenial-temperedraces to move into the vacuum created by the fallof a preceding culture. Such reservoirs of highqualitylineage, however, no longer exist; andnone appear visible on the genetic horizon.The attritional loss of "talented elites" has beenfurther accelerated in our era by the introduction5 Sir Francis Galton, English anthropologist andoriginator of Eugenics Theory.6 Edwin Grant Conklin, Heredity andEnvironment, p. 276.7 Samuel J, Holmes, The Trend of the Race, p. 3.141

into society of chromosomal-damaging chemicals— a genetic horror which Lapouge and Holmescould not have imagined in their studies ofagencies affecting selection in man. Mankind'stwentieth-century threat, psychedelic drugs, hasthe dimensions of a genocidal time bomb.The American civilization, no less than did theAthenian, depends upon the quality of the menand women who are the bearers of it. All theaccumulations of instruments and ideas, massedand welded into marvelous structures, rest uponliving foundations. Should these livingfoundations decay by attrition, crumble bysubversion, or be destroyed by artificial means, themightiest civilization will sag, crack, and at lastcrash down in ruin."The revolt against civilization," said Stoddard,"goes deeper than we are apt to suppose. Howeverelaborate and persuasive may be the moderndoctrines of rebellion, they are mererationalizations of an instinctive, primitive urge." 8A factor carefully avoided in today's studies ofthe rise and progress of revolution is the fact thatindividuals or groups placed at cultural levelsabove their capacities instinctively revert to lowerand more congenial surroundings. Atavistic forcesforever seek to disrupt advanced societies and dragthem down to more aboriginal levels. The highplacedmattoid recruits, molds, inflames, and thenunleashes these forces against the existing socialorder, to bring it crashing down in "ruin."Stoddard stated a self-evident fact, to which allof us may subscribe: Revolutions do not spring8 Stoddard, p. 125.from nothing. Behind the revolt against anestablished society, there lies a long formativeperiod during which the forces of chaos gatherwhile the forces of order decline. Revolutions thusgive ample warning of their approach.The symptoms of revolution, Stoddardobserved, may be categorized in three stages:(1) destructive criticism of the existing order, (2)revolutionary theorizing and agitation, and (3)revolutionary action. 9Americans have witnessed the promotion andimplementation of the first two stages of incipientrevolution and now behold the beginnings ofrevolutionary action aimed at toppling this socialorder — all the work of degenerate forces whichhave gained decisive position in the socialstructure for the purpose of destroying it. Strongsocieties are not overturned by revolution. Beforerevolution can succeed, the social order must beundermined and morally compromised.Subverting the existing order is a geneticcompulsion of the mattoid. Sick-brained men,occupying rarified position, have nailed therevolutionary banner of "Liberty, Equality,Fraternity" to the mast of our ship of state. Behinda concealing curtain of "humanitarianism," theynow direct the course of our nation to chaos, tooblivion, to a soviet twilight zone.The cynical program of these madmen will lead,unless reversed, to the eclipse of the Americancivilization.9 Ibid, p. 126.BOOKS THAT SHAKE THE WORLD*On rare occasions a book is published whichmust forever alter the way in which we viewthe world around us. Within a short while itbecomes difficult to understand how wecould have functioned without theknowledge gained from it.In less than twenty years three such books havebeen published, books dealing with history, books*Reprinted from Don Bell Reports, 21 May 1982,P.O. Box 2223, Palm Beach, FL 33480.that are quite possibly the most important studiesof modern history since de Tocqueville'sDemocracy in America. One of these books waswritten by James H. Billington: Fire in the Mindsof Men — Origins of the Revolutionary Faith.The other two are by the late Carroll Quigley.Most of our readers will be familiar with what iscontained in Quigley's Tragedy and Hope, AHistory of the World in Our Time. Equallyimportant, there has been published posthumouslyand quite recently, The Anglo-AmericanEstablishment. This latter book was written and142

prepared for publication as early as 1949. But itscontents were so sensational, and so very truthful,that no publisher could be found until recently,1981 to be precise. This is a book which traces thedevelopment of the One World Conspiracy fromthe time of "The Round Table," "Milner'sKindergarten," Rhode's Secret Society, and theRoyal Institute of International Affairs, throughthe establishment of the Council on ForeignRelations, the Institute of Pacific Relations, andother organizations of the Anglo-AmericanEstablishment. In his introduction to this book,Quigley wrote:It is not easy for an outsider to write thehistory of a secret group of this kind, but.. .it should be done, for this group is . . . one ofthe most important historical facts of thetwentieth century . . . I suppose in the longview my attitude would not be far differentfrom that of the society ... but agreeing withthe group on goals, 1 cannot agree with themon methods . . . In this group were personswho must command the admiration andaffection of all who know of them. On theother hand, in this group were personswhose lives have been a disaster to our wayof life. Unfortunately, the influence of thelatter have been stronger. I have been toldthat the story I relate here would be betterleft untold . . . but I feel the truth, once told,can be of injury to no men of good will.In his book Fire in the Minds of Men, Billingtondelineates and documents a different phase of theOne World Conspiracy. When taken together, theworks of Quigley and Billington illustrate the factthat there are two broad highways leading toWorld Government. One is usually referred to asthe Socialist Route, which includes any number ofmass movements and political parties thatpromote ''equality" as well as collectivism, such asCommunisim, Fascism, Fabianism, SocialDemocracy, Welfare Statism, etc. The other broadhighway leading toward the New World Order isin no sense a movement involving masses ofpeople. It is a closely knit secret society whosemembers are International Bankers, IndustrialMonopolists, Media Managers, and their carefullyselected agents who usually are found in suchexclusive "clubs" as the Council on ForeignRelations, the Trilateral Commission, theCommittee for Economic Development, theOrganization for Economic and CommercialDevelopment, the Bilderberg Group, the Club ofRome, and the rest of the organizations notspecifically identified with and supposedly inopposition to the Communist wing of the Socialistmovement. It is with the Socialist Route thatBillington deals, and favors. He insists that it ismore than just a revolutionary movement as such;it is a kind of new religion, a "faith" which as asecular religion is due to replace Christianity (evenas Secular Humanism is about to do in the UnitedStates). Billington writes:.This book seeks to trace the origins of a faith— perhaps the faith of our time. Modernrevolutionaries are believers, no lesscommitted and intense than were theChristians and Muslims of an earlier era.What is new is the belief that a perfectsecular order will emerge from the forcibleoverthrow of traditional authority. Thisinherently implausible idea gave dynamismto Europe in the nineteenth century, and hasbecome the most successful ideologicalexport of the West to the world, in thetwentieth.This "faith" about which Billington writesbegan, as he documents it, with the MasonicLodges of the eighteenth century; its ritualism andorders copied from the Jesuits. The "faith"progressed from Germany to France where itinspired the French Revolution, to the othercountries of Europe, was especially promoted byKarl Marx who found both Germany and Francetoo hot for his presence, settled in London fromwhere he lived on the bounties of his associateFrederich Engels. Billington notes that "the city isthe crucible of modern revolution." Although thefirst revolutionary leaders were intellectuals (stillare), Marx originally had the idea that therevolution would be accomplished through theproletarian class, the "workers of the world" who"had nothing to lose but their chains." He soonlearned, however, that though it still was called a"revolution of the proletariat," the proletarianmasses provided a poor army, that he mustcontinue to depend upon the intellectuals and themen with money who would support him (as didhis partner, Engels). In writing about it, Billingtonagrees that if this new "faith" is to overturn theworld, it must begin in the cities. He writes that"The revolutionary tradition, seen from below, is anarrative of urban unrest successfully dominatedby Paris and St. Petersburg (now Moscow)." But,most important in his history of this "fire that is afaith," Billington starts at the proper beginning of143

the "Socialist Route" to the New World Order. Hewrites:If freemasonry provided a general milieu andsymbolic vocabulary for revolutionaryorganization, it was Illuminism thatprovided its basic structural model. It may bewell to trace in some detail the nature andimpact of this baffling movement, becauseits influence was far from negligible and hasbeen as neglected in recent times as it wasexaggerated in an earlier era.The Order of Illuminism was founded onMay 1,1776, by a professor of canon law atthe University of Ingolstadt in Bavaria,Adam Weishaupt, and four associates. Theorder was secret and hierarchical, modeledon the Jesuits and dedicated to Weishaupt'sRousseauian vision of leading all humanityto a new moral perfection freed from allestablished religious and political authority.Weishaupt did not so much inviteintellectuals to join his new pedagogic eliteas taunt them to do so. He radiatedcontempt for men of the Enlightenment who'go into ecstacies over antiquity, but arethemselves unable to do anything,' andinsisted that 'what is missing is the force toput into practice what has long beenaffirmed by our minds.'In a review of Billington's book by MedfordEvans, appearing in the October 1981 issue ofAmerican Opinion, Evans writes:The logical link with Marx and with Lenin isobvious. The link with the FrenchRevolution is established, through Mirabeauand others. The point I want to leave withyou . . . is simply this: Why have a thousandscholarly experts for two decades treatedwith a show of silent contempt, as if theIlluminati were all a fairy tale, the wellestablished position ... that in this order wasthe central focus of what is now a MasterConspiracy?The answer to Evans' question might beconsidered academic. Any number of qualifiedand reputable historians and researchers haverecognized that the Order of the Illuminati was thebeginning of what is now a Master Conspiracy.John Robison in 1797 published the first Englishlanguagebook exposing the Illuminati andexplaining how it had penetrated into certainMasonic Lodges. He titled his book Proofs of aConspiracy. Nesta Webster, in her books on thesubject, especially The Socialist Network,identified the movement as a conspiracy. In latertimes there have been many accredited writerswho accept "The Conspiracy" as a fact, not atheory.The same is true of the "second avenue" towardthe New World Order, which Quigley hasidentified as "The Society of the Elect." It too hasbeen thoroughly identified, and the factsdocumented, proving it to be the other side of theMaster Conspiracy. But, following the pattern laiddown by Weishaupt, control and censorship of thecommunications media have been so firmlyestablished that books and articles revealing thetruth are never mentioned in such publications asThe New York Times Book Review Section.Historians and researchers who dare to call it aconspiracy are criticized, condemned, subjected tocharacter assassination, and their workssuppressed whenever and wherever possible. Asthe author of the blurb on the dust jacket of TheAnglo-American Establishment comments:While the notion of conspiratorial influenceon world events has gained credence withboth extremities of the American politicalspectrum, and to a degree with the generalpublic, the more academically-orientedperson has tended to downplay suchinfluence, largely because of the lack ofscholarship in the presentation and analysisof the facts by those supporting theconspiracy theories. In addition, many suchsupporters have made themselves easy toignore and, in fact, have themselves alwaysassumed that they would be ignored.Professor Quigley's work does not sufferfrom these defects. The evidence hepresents.. . appears irrefutable.In this denigrating statement concerning usother Conspiracy buffs, the writer (not Quigley)makes our point and also emphasizes the realimportance of books written by men such asQuigley and Billington. The blurb-writer indicatedthat we others — John Robison, Nesta Webster,Dan Smoot, Gary Allen, or name your ownfavorite Conspiracy advocate — can be treatedwith "silent contempt." Not because what wewrite is neither factual nor truthful, but becausewe can be labeled as "extremists." Therefore weare prejudiced and our works deserve to be144

urned. On the other hand, take a writer who is infavor of the aims of the Conspirators, hasexamined their files and records with approval,but merely dislikes the methods used by theConspirators; let such a person write the samemessage as ours, perhaps even in the same words,and those who won't believe us will probablybelieve him. That is why Quigley's witness isimportant. Our evidence is labeled"Questionable," but his (the same evidence)becomes "irrefutable." Of course, Quigley didoverstep the limits a bit. When the members of the"Society of the Elect" learned what Quigley hadactually written in his Tragedy and Hope, therewas an attempt to ban the book, and his suddendeath did seem a little strange. Billington, on theother hand, is being accepted wholeheartedly bythe "elitists." His book is being advertised inForeign Affairs and being promoted in intellectualpublications. This is probably because he wroteonly about the Socialist wing of the Conspiracy,wrote not a word about the more sinister,controlling, closed "Society of the Elect."Furthermore, the affiliations and connectionsbetween the Socialist and Super Capitalist forcesof the Conspiracy were spelled out by Quigley, leftuntouched by Billington. Nevertheless, Fire in theMinds of Men is a very important book, because itfills in those times, events and spaces betweenWeishaupt in 1776 and Lenin in 1917. Thisinformation, so thoroughly documented, has beenhard to come by previously.BOOKS DISCUSSED IN THIS REPORTFire in the Minds of Men, by James H. Billington.Copyright 1980. 677 pages including extensivedocumentation. Basic Book, New York, N.Y.$25.00.Tragedy and Hope, by Carroll Quigley. Copyright1966. The Macmillan Co., New York, N.Y. 1348pages. Probably available from Alpine Enterprises,P.O. Box 766, Dearborn, Mich. 48121. Lastquoted price, $27.00.The Anglo-American Establishment, by CarrollQuigley. Copyright 1981 by Books in Focus, Inc.,P.O. Box 3481, Grand Central Station, NewYork, N.Y. 10163. 354 pages including extensivenotes. $20.00.ROCKEFELLER AGENTS FROM COUNCIL ON FOREIGN RELATIONS /TRILATERAL COMMISSION PERPETUATE CONTROL OF AMERICANDESTINY BY INTERNATIONAL BANKING CABALBeginning on the following page is a three-pagechart, "CFR/Trilateral Commission Control of theUnited States," illustrating the network ofCFR/TC agents holding vital decision-makingpositions in U.S. government.Trilateral Commission is a lineal descendant ofthe Council on Foreign Relations.Exposure of the CFR/TC should be a toppriority goal of every citizen and every patrioticorganization in our country.The Council on Foreign Relations has about1800 members, average age 60, average wealthundoubtedly staggering, carefully selected tocompose a kind of leadership elite in Americanforeign affairs. There is a large segment of WallStreet, some midtown tycoons, the more eminentradio and newspaper executives, a sprinkling ofacademics, a few public relations people dealingwith really big foreign investors.145Assisted by a grant from the CarnegieFoundation, the Council set out, in 1938, toorganize a number of discussion groups in citiesthroughout the country. The undertaking wasfrankly experimental; its objective was to see if theCouncil could aid in stimulating greater interest inforeign affairs on the part of community leaders inwidely separated areas.Within a year, Francis P. Miller, on behalf ofthe Council, had organized groups, or Committeeson Foreign Relations, in Cleveland, Denver, DesMoines, Detroit, Houston, Louisville, Portland(Oregon) and St. Louis. By 1942, additionalCommittees had been established in Birmingham,Los Angeles, Nashville, Providence, and St. Paul-Minneapolis. By 1946, the list had grown toinclude Boise, Indianapolis, Milwaukee, Omaha,Salt Lake City, San Francisco, Seattle, and Tulsa.Membership in the twenty-one Committeestotaled over eleven hundred. The enterprise wasno longer an "experiment."

COUNCIL ON FOREIGN RELATIONS/TRILATERAL COMMISSION AGENTS IN MEDIA, MILITARY &CONGRESS148

THIRTEEN"The great cause, therefore, of the devastatingmarch of revolutions, and the total subversionwhich they in general effect in the liberties ofthe people, is the fundamental change in lawsand institutions which they effect."SIR ARCHIBALD ALISON (1792-1867)THE FEUDAL STATE*AMERICAN SERFS LABOR FOR DIRECTORS OFTHE NEW FEDERAL CORPORATIONThe constitutional crisis arises from attempts byfederal agencies to centralize political power in thehands of private interests. The instrument ofsubversion is the Council on Foreign Relations. Itsagents are the departments of the federalgovernment.Semi-secret and quasi-official, the Council onForeign Relations is dominated by the Rockefellerbrothers, David Rockefeller being Chairman ofthe Board.Some researchers declare that the RockefellerFamily represents the U.S. interests of aninternational banking cartel founded by MeyerAnseim Rothschild in the eighteenth century."The C.F.R.," says Don Bell, editor ofCloser Up, "is a 'conglomerate of leaders'wherein are banded together—for purposesof control and direction—the principalpolicy makers and opinion molders of theNation. Membership," he says, "includesinternational bankers, multinational moguls,conglomerate chieftains, labor leaders,religious luminaries, educationalists, andmedia managers, journalists, columnists,commentators, authors, editors andpublishers."* Reprinted from, The Republic: Decline andFuture Promise, (1975) by Archibald RobertsThe objective of this "conglomerate of leaders"is overthrow of the United States Constitution andthe erection of a federal corporation upon theruins of the Republic. Directors of the new federalcorporation are the masters of the financial /industrial cabal who head the Council on ForeignRelations.Devastation of individual freedom and propertyrights, twin goals of C.F.R. planners, is atechnique of revolution. An eighteenth centurybarrister, Sir Archibald Alison, noted theinevitable consequence of overthrowing theestablished order by revolutionary techniques:When it is said that institutions formed bythe wisdom of our former ages should not bechanged, it is not meant that our ancestorswere gifted with any extraordinary sagacity,or were in any respect superior to what weare—what is meant is, that the customswhich they adopted were the result ofexperienced utility and known necessity; andthat the collection of usages, called theconstitution, is more perfect than anyhuman wisdom could at once have framed,because it has arisen out of social wants, andbeen adapted to the exigencies of actualpractice, during a long course of ages.The Constituion of the United States has justsuch a lineage, having been based upon ancient149

ecords of human endeavor, among these beingthe Magna Carta."To demolish and reconstruct such aconstitution," Alison warned, "to removepower from the hands in which it wasformerly vested, and throw it into channelswhere it never was accustomed to flow, is anevil incomparably greater, an experimentinfinitely more hazardous, than the totalsubversion of the liberties of the people byan ambitious monarch or a miliary usurper,because it not only destroys the balance ofpower at the moment, but renders itimpossible for the nation to right itself at theclose of the tyranny, and raises up a host ofseparate revolutionary interests, vested atthe moment with supreme authority, anddependent for their existence upon thecontinuance of the revolutionary regime. Itis to government," Alison explained, "what atotal change of landed property is to thebody politic; a wound which, as Irelandsufficiently proves, a nation can neverrecover."The capability for revolutionary change of thismagnitude by the Council on Foreign Relations isdifficult to comprehend unless the power behindthe Rockefeller name is understood. One mustvisualize the interlocking relationships that existbetween the corporate royalists and the bankerbarons.One example may serve to illustrate thisinterlock:Sir John J. Loudon of London is chairman ofthe International Advisory Committee of theRockefeller Chase Manhattan Bank of New York,and a board member of the Chase ManhattanCorporation which controls the Chase ManhattanBank, with world-wide branches. Sir Loudon isalso chairman of Royal Dutch Petroleum, TheHague, as well as director of Shell PetroleumCompany Limited. Royal Dutch Shell is rankednumber one among some five hundred of thelargest corporations in Europe. Significantly,Loudon of London is also a trustee of the FordFoundation.Closer Up, 4 January 1974 issue, lists no lessthan eleven corporate royalist / banker baronsholding similar interlocking policy-makingpositions in the new federal corporation.The parallel between the political revolutioncurrently in progress in America and thetransformation which ultimately overturned theBritish system, was drawn by Sir Alison, Englishhistorian and barrister in, Alison's MiscellaneousEssay, over one hundred years ago. Thecomparisons are shockingly familiar."As the Reform Bill proposes to throw alarge part of the political power in the Stateinto new and inexperienced hands," saidAlison, "the change thereby contemplated isincomparably greater and more perilousthan the most complete prostration of theliberties, either of the people or thearistocracy, by a passing tyranny. It is thecreation of new and formidablerevolutionary interests which will neverexpire; the vesting of power in hands jealousof its possession, in proportion to the noveltyof its acquisition, and their own unfitness towield it, which is the insuperable evil. Such acalamity," he said, "is inflicted as effectuallyby the tranquil and pacific formation of anew constitution as by the most terrible civilwar, or the severest military oppression. Theliberties of England survived the Wars of theRoses, the fury of the Covenant, and thetyranny of Henry VIII; but those of Francewere at once destroyed by the insaneinnovations of the Constituent Assembly.And this destruction took place without anybloodshed or opposition, under the auspicesof a reforming king, a conceding nobility,and an intoxicated people, by the mereunresisted votes of the States-General."As though inspired by today's headlines SirAlison then stated:The example of France is so extremely andexactly applicable to our changes—thepacific and applauded march of itsinnovations was so precisely similar to thatwhich has so long been pressed upon thelegislature of this country, that it is notsurprising that it should be an extremely soresubject with the Reformers that they shouldendeavor, by every method of ingenuity,misrepresentation, and concealment, towithdraw the public attention from sodamning a precedent.Sir Alison, a voice of reason from an earlier age,150

might well be heeded in contemplating thedistractions of Watergate.Since Watergate we no longer have an accuratelist of CFR members who are also employees ofthe Executive Branch of government. We doknow that, in his first term, Nixon appointed overone hundred CFR members to his staff ofadvisors, assistants, bureau chiefs, agency heads,and other key positions. It may safely be assumedthat the Rockefeller-CFR interlock has fullcontrol over the federal government.Don Bell points out that, shortly after theRockefellers gained mastery of the Council onForeign Relations and began to use it to directU.S. foreign policy, there was also established inChicago, on ground donated to the University ofChicago by the Rockefeller Family, a PublicAdministration Clearing House, better known as"1313." This Rockefeller-financed center has beenresponsible for the training and placement ofappointed public administrators who now controlall levels of domestic government. Transfer ofresponsibility from elected officials at State,county, and municipal levels of government hasbeen going on for fifty years and few Americanshave been aware of this, or of its implications.CFR domination of communications mediaeffectively prevents the majority of Americancitizens from knowing that a revolutionary level ofgovernment has been installed in this nation, andthat it is rapidly replacing State and localgovernments. These traditional and constitutionalgovernmental bodies are being phased out of thesociety as the new federal corporation is phased in.How many Americans realize that Roy Ash,former president of a multinational conglomerate,the Litton Industries, was appointed chairman ofthe President's Advisory Council on ExecutiveOrganization. The Advisory Council on ExecutiveOrganization fathered the restructuring of theFederal System into a Federal Corporation.Roy Ash was then brought in as head of thisvast new federal control system which spreadsitself from the Executive Office of the President,through the Office of Management and Budget,then to the Undersecretaries of the various federaladministrations, down to the Ten FederalRegional Councils that are scattered throughoutthe temporarily existing States.This revolutionary level of government iscomplete within itself, Don Bell reports. Acting aschairman and absolute dictator, responsible onlyto Roy Ash, is the Deputy Director of the Officeof Management and Budget. The Deputy Directorof OMB chairs the Undersecretaries Group forRegional Operations.The Undersecretaries Group controls, in turn,the Ten Federal Regional Councils, with theirseats of government at the ten Federal RegionCapitols in Boston, New York, Philadelphia,Chicago, Dallas/Fort Worth, Kansas City,Denver, San Francisco, and Seattle.Thirty years ago James Burnham, in his book,The Managerial Revolution, predicted the rise of anew ruling class whose ascent to power if notchallenged was inevitable. Burnham identifiedthese "managers" as a type of professional withcommand training quite distinct and toweringabove the capabilities needed for routine jobs.Rule over the United States, he predicted, wouldbe obtained through state (federal) ownership andcontrol, with appointed managers rather thanelected officials heading the departments ofgovernment.Burnham's "new ruling class" is here. The issueis no longer who is the candidate in an election—any charismatic can be president, governor, ormayor—if he can take and deliver orders.The new breed of appointed managers wasconceived, nourished, trained, and placed inposition by the use of funds supplied by taxexemptfoundations—Ford, Rockefeller,Carnegie, Alfred P. Sloan, and others. Foundationfunds are used to finance special courses atcolleges and universities where these new publicmanagers are trained. Post-graduate courses areprovided to special persons by the Council onForeign Relations and its branches; HenryKissinger being such a foreign affairs trainee.Meantime, "1313" was able to unionize andprovide job placement for their domestic expertsas city managers, metro managers, regionalcouncil officials, and other takeover positionswithin local governments. Big business, of course,provided top-echelon directors for the newrevolutionary government.Thus has developed the New FederalCorporation, with its new ruling class operatingthrough trained appointed managers.These revolutionary programs reveal asystematic attack upon the American people.151

Corporate royalists and banker barons havegained control of the federal government andemploy its agencies to cancel the rights of personand property guaranteed to the people by theConstitution.The Constitutional Compact does not permitusurpation of constitutional powers.Transformation of our elective form ofgovernment to an appointed form of governmentis specifically prohibited by its articles. Lackingconstitutional authority, acts by federal agentswhich effect such change are against the law.Being unlawful, they must be put down.The law is clear on this point:"The general rule," the Court has declared,"is that an unconstitutional act of thelegislature protects no one. It is said that allpersons are presumed to know the law,meaning that ignorance of the law excusesno one; if any person acts under anunconstitutional statute he does so at hisperil and must take the consequences." 1State officeholders, therefore have a positiveduty to enforce the provisions of the Constitution.It is a continuing obligation and may not be metmerely by an empty oath taken upon acceptingpublic office.In the past State legislators have found itnecessary to reaffirm the restrictions placed uponthe federal government by the ConstitutionalCompact. Such a case arose from the oppressiveSedition Act of 14 July, 1798, by which theUnited States Congress attempted to abridgefreedom of the press. This act elicited theKentucky Resolution of 19 November, 1799,repudiating the unauthorized acts of the Congress.The Kentucky Resolution, to which all sisterStates became party, holds special importance formodern lawmakers in the respective Statelegislatures."Resolved that the several States composingthe United States of America," declared theKentucky Legislature, "are not united on theprinciples of unlimited submission to theirgeneral government; but that by Compactunder the style and title of a Constitution,for the United States and of amendments1 16 Am Jur, 2nd Sec. 178,Constitutional Lawthereto, they constituted a generalgovernment for special purposes, delegatedto that government certain definite powers,reserving to each State to itself the residuarymass of right to their own self-government;and that whensoever the generalgovernment assumes undelegated powers, itsacts are unauthoritative, void, and of noforce; that to this Compact each Stateacceded as a State and is an integral party, itsco-states forming as to itself the other party,that the government created by thisCompact was not made the exclusive or finaljudge of the extent of the power delegated toitself since that would have made itsdiscretion, and not the Constitution, themeasure of its powers; but that as in all othercases of Compact among parties having nocommon judge, each party has an equal rightto judge for itself, as well of infractions as ofthe mode and measure of redress."The reason that the people of each State areburdened by illegal acts of federal agents, and theirsurrender of the powers of government to privateinterests, is because the State has not repudiatedthe attempts of its agents in Washington to actbeyond their authority. These unlawful acts havethe effect of "law" not by reason of a nonexistentauthority of the federal agent, but because of theauthority the State gave to these acts by failing tochallenge the attempts of its federal agents toexceed their authority.To meet the constitutional crisis the people,acting through officials they have elected torepresent them, must force the State legislature toinsure that all provisions of the Constitution arerespected and enforced within the boundaries ofthe State.The State, acting at its highest sovereigncapacity, must wrest control of its destiny fromthe evil hands of those unfit to wield such power.Federal regulation over land, business,development, utilities, production, services,property, and people has never been delegated toany government or federal agency by the people ofthe State. Only by corrective action by the Statelegislature can the insane innovations of therevolutionary federal corporation be terminatedand the laws and institutions of the Republicrestored.The place to begin is at the county level ofgovernment, the government closest to the people.152

THE ENLIGHTENED ONES*As most of our readers will probably know, theOrder of the Illuminati are the self-proclaimed"enlightened ones" who have taken it uponthemselves to lead humanity out of their miserablestate of bondage to usher in an age of equality andinjustice for all (except them). Let us take a closerlook at them and see just who the enlightenedones really are.The order was founded in the 1760's by oneAdam Weishaupt, a Jesuit priest and a professor ofthe Canon law at Ingolstadt University inGermany; a Jew (khazar) by birth who convertedto Catholicism. When the Illuminati wereestablished, they used the Masonic Lodge as acover, a breeding ground for their detestabledoctrines, and as a front into which they couldlure and through which they could screen themost likely candidates to whom and eventually bywhom to propagate their nihilistic doctrines ofconquest, through deception and treachery.They found it much to their advantage to leadthe Masons to think that the Illuminati were thesecret leaders of the Masonic Lodges, carefullyconcealing their true nature. It was the wish ofWeishaupt to set up the Masons to take the bruntof the criticism and suspicion which wouldotherwise be thrown on him and his order, werethe truth known. This was to be accomplished bymaking the mysterious Illuminati seem abovesuspicion as the "enlightened" Masonic leaderswho could not possibly suffer reproach for theconduct of the less enlightened, but secretdocuments and intra-order correspondence wereboth divulged by disgusted defectors anddiscovered by accident, which gave the Elector ofBavaria, after one fruitless attempt to quell theirrevolutionary activities, the ammunition heneeded to outlaw and disband the Illuminati in hiscountry, which sent Weishaupt fleeing into exilein Switzerland but he did not stop him or thewheels he had set in motion.Let me now give a profile on Weishaupt, toshow just what kind of degenerate he really was,using the facts John Robison, professor of NaturalPhilosophy and Secretary to the Royal Society ofEdinburgh in Scotland, brought forth in his book,Proofs of a Conspiracy, published in 1798.Weishaupt:Of all the means I know to lead men, themost effectual is a concealed mystery. The— --------------------------*Tom Robison, reprint permission The AmericanSunbeam, Springdale, ARhankering of the mind is irresistible; and ifonce a man has taken it into his head thatthere is a mystery in a thing, it is impossibleto get it out, either by argument orexperience. And then, we can so changenotions by merely changing a word. Whatmore contemptible than fanaticism; but callit enthusiasm, then add a little word noble,and you may lead him over the world.Weishaupt's manner of gaining entrants into theorder and "illuminating" them by degrees,concerning the higher secrets of the order puts meto mind of a spider who spins a web which, to hisunwitting prey, appears to be a long tunnelthrough which he may travel, but on entrance heis promptly ensnared, leaving him helplessly at themercy of his predator, because; once the entranthas been lured into and successfully qualified forthe higher degrees of the order, he is bound by anoath of secrecy, the breaking of which will evokethe promise of sure death at the hands of theorder's faithful adherents.Weishaupt's initial lure was a promise ofestablishing a Utopian happiness (cosmopolitism)by liberating people from the prejudices whichdivide them, by teaching them to knowthemselves, illuminating their minds with the "sunof reason," making all men equal. He baited thetrap further by telling the initiates that they wereto affect this change by obtaining, for all theIlluminati members, prestigious positionsaccording to each person's abilities, from whichthey could influence governments, and eventuallyrule over them in an advisory capacity.By infiltrating and / or influencing publishinghouses, booksellers, and the Literati, he began tofoment diatribe against the depotism of monarchsand the corruption of religion using this generalatmosphere of political and religious descension toput over his schemes.Weishaupt:Many will come over to our party, and weshall bind the hands of the rest, and finallyconquer them.As the initiate of the Illuminati made his way upthrough the degrees, the true nature of Weishauptand his plans were gradually revealed. He createda religion which was a very much diluted andperverted form of Christianity, of which heboasted having deceived a protestant minister whoclaimed it to be the one true religion. In thedoctrines of this religion, he claimed that Christ is153

the true Grand Master of the Masonic Lodge andthe original cosmopolite, subtly reducing him tothe state of a mere philosopher and perverting theChrist's true teachings. By degrees, he revealed tothe initiate that even this religion is really only ahoax, a deterrent, or a test of the initiate'sgullibilities, until he finally reveals the order'sdoctrine as Atheism, but he used this religion inmodified forms to lead astray many who were notof the order.When the Great Secrets are fully revealed, it isfinally clear to his prey that:1. True cosmopolitism which is first supposedto be the state of universal equality and liberty forall, which, through the strivings of the order,would replace the despotism and oppression of themonarchs, is really oligarchy, in which the higherupsof the Illuminati will reign with their owndespotic system as the god-state to which a worldof (equal) slaves must pay tribute and homage.2. The "sun of reason" which is supposed toilluminate their understanding and release themfrom all prejudices, superstitions, etc. is really thelife consuming fire of vanity, which casts deludingshadows upon truth in the darkness of aconsciousness totally lacking in reason,illuminating in them only cunning, treachery,deceit, and absolute corruption with fear, hate,shame, guilt, lust, greed, and prejudice.3. It is too late for him to turn back now, and itis all or nothing. The inferior type of mind that islured this far into the trap will either reject hisconscience, if he has one, and embrace"illuminism" with all his zeal or become helplesslyfrustrated by his conscience and fearfully resignhimself to playing party to the greatest deceptionput over on humanity in all our recorded history.Weishaupt would stop at nothing to accomplishhis aims, as Robison proved with facts. He wasabove no act of depravation, yet; it is said that,with the help of Rothschild finances, heeventually recruited some 2,000 followers; easilyattracting men with some vendetta against therich, the monarchs or the religions; often nonindustriousmen who resented the wealth of theindustrious. These profligates became some of themost active participants of the order, insinuatingthemselves, with Rothschild financial aid, intopositions of clergy, law, the judicial systems,education, literati, booksellers, etc.Weishaupt also attracted more industriouspeople in the fields of arts and letters, education,the sciences, finance and industry, and even somemembers of the royal families, but these, as a rule,were never admitted into the higher degrees of theorder, but proved to be useful tools in his hands bydeceiving them to believe they were engaged in anorder quite different from what it was.Weishaupt, it is obvious, was a depraveddegenerate, and all the leaders of the "illuminati"since him have been no less the same. Thoughunforeseen occurrences may have altered theimplementation of their plans slightly, over theyears, their aim has not changed and everymethod they have employed to accomplish it isstill characteristic of a spider. They are no longercalled the "illuminati," but the Bilderberger family,yet they still retain their aura of mystery andattempt to present a general air of philanthropy.The United Nations is their vehicle forcosmopolitism. Their members may be foundamong the CFR and the Rockefeller baby, theTrilateral Commission; they have infected ourlearning institutions, our governments, ourreligions, communications media and so forth, butyou will never find one of them who is trulyilluminated by the "sun of reason." In this theyprove themselves totally inferior, for they havebeen inculcated with something that is quite thereverse of intelligence. No intelligent man wouldgo to these extremes to conquer what God hasordained by nature.They cannot possibly prevail, for even if they doinfest the entire earth with the disease they arecarrying, they have not conquered until no traceof freedom is left in even a single human being,which if they accomplish God can and surely willeradicate even our entire species to prevent thedisease from spreading to other parts of His body,but; if we are aware of this disease and separateourselves from it, adhering to the patterns of truthwhich exist apart from it, gearing ourselves tosurvive in it's face, vigilant of the capabilities ofthe infected to kill or murder and stop at nothingto accomplish their aims, they will come to theircertain end, nonetheless, and humanity canproceed with their potential to be "illuminated" bythe true "sun of reason" unto the day when wemay live peacefully and happily, though vigilantly,in equality and liberty, with justice for all, not asslaves, but as dignified and diverse human beings,as told us by St. John in his book of Revelations.'There is a light that shineth in the darkness,and the darkness comprehendeth it not."154

FOURTEEN"Freedom can only be won . . . the warfare iscontinuous and each generation comes to thefront to fight for it as though the battle hadjust been joined."BISHOP R. A. BROWNRUNNYMEDE: PRELUDE AND AFTERMATH*On a cannon in a fortress on an island in theCaribbean Sea is engraved the statement,"Resistance to tyranny is obedience to God."Tyranny, since man's creation, since his fall, hassought to dominate him from one source oranother. The first man, Adam, in disobeying God,fell under the power and sway of tyranny, ofSatan, and has had to do battle with him eversince. Satan never lets up. "Sin lieth ever at thedoor." Man is not a free agent except to the extentthat he is free in God, freed by the blood shed byJesus Christ. He is free and strengthened in theSpirit of God, as he serves God; otherwise he isenslaved by the powers of evil that lead to sin,darkness, doubts, fear, uncertainty, loneliness, andfinally to death and hell.Freedom cannot be won in one generation andbe expected to survive, to continue. The Battle forFreedom is a continuing battle, a perennial battle,that must be carried on constantly. We cannotachieve a victory in one generation, or in onecentury, and rest on our laurels, our victory. Wecannot "lay our armour down," as the hymn says.We must be fighting continually or be submergedin the flood of the backwash. As someone haswisely said, "The roots of the tree of freedom mustbe watered with the blood of patriots in everygeneration."*Address by The Most Reverend James ParkerDees, A.B., B.D., D.D., to the North CarolinaChapter, Dames of Magna Carta, Chapel Hill,North Carolina, 19 March 1983. Bishop Dees isa Council Member, Committee to Restore theConstitution, Inc.Satan and his powers and his forces and hissubtle maneuvering against mankind has never letup since his seduction of Adam in the Garden ofEden, and Satan has never been more active thanhe is today. Through the ages we have seenmankind enslaved by one instrument of Satan,after another, acting through his human agents,who have tried to enslave him through the use ofeconomic power, political power, spiritual power,and indeed every sort of diabolic power to wrestman from his freedom in God,—through drugaddiction, alcoholic addiction, through thetemptations and sins of the flesh, lust, greed,hatred, and all the other natural frailties of thenatural man. As we look around us in the worldtoday and see the forces that control man, hisgreed, greed, greed, and his disregard for God'sWord, disregard for the call of Jesus, we can't helpbut wonder that He does not wash his hands ofthis world.Man's desire for freedom is instilled in him as helooks to Jesus. In Jesus we see God. Jesus said,"He that hath seen me hath seen the Father." Tosee Him is to desire Him, to desire freedom inHim. To call on Him is to be given His Spirit,which working in us through faith, frees us fromslavery to sin, gives us dignity and value in HisSight, makes sin and slavery intolerable, and givesus the will to fight, and the strength with which tofight. We become new creatures in his sightdemanding our God-given birthright of freedom,spiritual freedom, economic freedom, politicalfreedom, freedom from the personal and physicaland spiritual sins that encompass our nature asfallen men. He gives us the strength with which to155

fight for freedom. Strength is of God, not ofourselves. Our direction is from God, notourselves. We are called by Him, to Him, to dwellin Him, and find cleansing and freedom.Today we are pleased to remember the Baronsof Runnymede who took up the banner offreedom against the slavery imposed on them byKing John. The Barons did not come to thisFreedom on June 15, 1215, nor in a few days, noreven a hundred years. William the Conquerortook England at the Battle of Hastings in 1066,bringing his army over from Normandy. Hisfollowers settled and spread through the landseizing property, exacting fines from thelandowners, throwing them into dungeons,prisons, unjustly, without recourse to justice, andotherwise creating hostility between himself andthe landed gentry.The hostility between the landed gentry and theroyal authority increased through the years,through Williams I's reign and through his sonWilliam IIs reign; until, when he was succeededby Henry I in the year 1100, the landed gentry,the Barons and other nobles, succeeded inprocuring a charter which was a significant forerunner to the Charter of 1215. In order to securehis position on the throne, Henry I in 1100granted the landed gentry a charter which securedtheir support for the new king himself, in 1100.This charter of Henry I (in 1100) is extremelyimportant, not merely as a direct precedent for theGreat Charter of John, but as the first limitationon the despotism established by William theConqueror and carried to such a height by his son,Rufus, William II. The "evil customs" by whichthe "Red King," Rufus, had enslaved andplundered the church were explicitly renounced inthis charter, the unlimited demands made by boththe Conqueror and his son on the baronage wereexchanged for customary fees, while the rights ofthe people themselves were not forgotten. Thebarons were ordered to do justice to their undertenantsand to renounce tyrannical exactions fromthem, and the king in turn promising to restoreorder and the "law of Edward," the oldconstitution of the realm, of Edward theConfessor.We move on now to the next century, the1200's, the century of the Magna Carta. Manyevents of interest preceded the immediate signingof the charter. John, the youngest son of Henry IIwas given the oath of fealty by the Barons in 1199.Early in the century in 1207, King Johnforfeited the support of the Roman Church byrefusing to accept the appointment by PopeInnocent HI of Stephen Langton to serve theChurch in England as the Archbishop ofCanterbury; and as a result the Pope placedEngland under a papal interdict, in 1208, whichallowed no religious services in England and in1209 the Pope excommunicated John himself.John began to find himself in trouble. Facedwith demands at home from his barons for justicein taxation and for proper treatment in the courts,he was faced also with threats of war from abroad.He sensed the need of help from the church, andso he began to seek reconciliation with it.And so in 1213-1214, John resigned to the Popehis kingdoms of England and Ireland and receivedthem back again from the Pope in exchange for hisvow of allegiance to the Pope and for an annualpayment of 1000 marks. Stephen Langton wasreceived as papal legate, Archbishop ofCanterbury, who absolved John fromexcommunication and reinstated him in thechurch. Thus John secured important new sourcesof support in the Pope and in the clergy.The proposal from the barons to secure acharter of liberties was first put forward to John inJuly of 1213. In August "his honesty of purpose"was questioned. More specific guarantees for hisfuture conduct were sought. At a meeting in St.Paul's on August 25, 1213 Stephen Langton, therestored Archbishop of Canterbury, proposed thatthe King should be asked to confirm or reissue thecharter of liberties granted by Henry I in 1100,which contained grantings of freedom of the sortnow being demanded. At this point, all presentswore that when the opportune moment arose,they would fight to the death to secure such acharter.At this point John planned a campaign of armsin France, and made fresh demands on the knightsfor more men and money. The opposition to thesedemands was fierce. His campaign was notsuccessful. John continued to make his demandsand the barons continued to resist. The baronscontinued to make their demands for a charterrecognizing their rights. John continued to putthem off or circumvent in one way or another, forone reason or another, giving them no definiteanswer. While he was staying at the Temple, inLondon, in January 1215, a party of baronsappeared before him, arrayed in full armour, andpresented the demands—by this time moreelaborately conceived—for a charter that should156

confirm the ancient liberties of the kingdom, as setout in Edward the Confessor's laws, in thecoronation charter of Henry I, and in thecoronation oath renewed by John himself, justeighteen months beforehand.To these demands John succeeded, with somedifficulty, in deferring an answer to a meeting atNorthampton on the Sunday after Easter—26April—on the grounds that the matter was toocomplex for immediate reply. Meanwhile he atonce dispatched envoys to Rome, to apprise hisoverlord, the Pope, of the situation. He also beganto marshall his resources for a trial of strength.Among other preparatory measures, on 4 Marchhe took the Cross as a crusader, a step that securedfor his person and his possessions the Church'smost special protection.In Holy Week 1215, ten days before the dateappointed by John for the delivery of his answer,the storm finally broke. On May 5th the baronsformally renounced their allegiance to John. Theangry barons came together at Stamford, inLincolnshire and moved forward to force theking's hand. Proposals and counter proposals weremade and rejected. On May 17 the baronscaptured London, which strengthenedconsiderably their position.In the meantime less conspicuous negotiationsseem to have been taking place between Langtonand the Earl of Pembroke. And to the influence ofthese intermediaries should probably be givencredit for the eventual meeting between the Kingand the barons on the Field of Runnymede onJune 15, 1215 to work out their differences and tofinally get John's signature on their charter.John signed the Charter on the field ofRunnymede by the River Thames, by WindsorCastle, between Windsor and Staines.Magna Carta has come to be regarded byEnglishmen, and by all who have adopted Englishlaws, as their chief constitutional defense againstarbitrary or unjust rule. Its two most famousclauses (39 & 40) express and give warranty tosome of the Englishman's most deeply heldpolitical beliefs. They read:No free man shall be seized or imprisoned, orstripped of his rights or possessions, oroutlawed or exiled, or deprived of hisstanding in any other way, nor will weproceed with force against him, or sendothers to do so, except by the lawfuljudgement of his equals or by the law of theland.In these and other clauses, seventeenth-centurylawyers were to find a basis for such fundamentalEnglish privileges and rights as trial by jury,Habeas Corpus, equality before the law, freedomfrom arbitrary arrest, and parliamentary control oftaxation. For such reasons Magna Carta could bedescribed by William Pitt, Earl of Chatham, in1770 as forming, with the Petition of Right (1629)and the Bill of Rights (1689), the 'Bible of theEnglish Constitution. 1Besides the many rights and privileges accordedto the barons by the Charter, of specialsignificance is the establishment of the Council ofBarons to protect the barons and citizens generallyfrom encroachments of the rights specified in thecharter and from harrassment by John. Paragraph61 of the Charter reads:(61) SINCE WE HAVE GRANTED ALLTHESE THINGS FOR GOD, for the betterordering of our kingdom, and to allay thediscord that has arisen between us and ourbarons, and since we desire that they shall beenjoyed in their entirety, with lastingstrength, for ever, we give and grant to thebarons the following security:The barons shall elect twenty-five of theirnumber to keep, and cause to be observedwith all their might, the peace and libertiesgranted and confirmed to them by thischarter.If we, our chief justice, our officials, orany of our servants offend in any respectagainst any man, or transgress any of thearticles of the peace of this security, and theoffence is made known to four of the saidtwenty-five barons, they shall come tous—or in our absence from the kingdom tothe chief justice—to declare it and claimimmediate redress. If we, or in our absenceabroad the chief justice, make no redresswithin forty days, reckoning from the day onwhich the offence was declared to us or tohim, the four barons shall refer the matter tothe rest of the twenty-five barons, who maydistrain upon and assail us in every waypossible, with the support of the wholecommunity of the land by seizing our castles,lands, possessions, or anything else savingonly our own person and those of the queenand our children, until they have secured157

such redress as they have determined upon.Having secured the redress, they may thenresume their normal obedience to us.The Council of Barons evolved ultimately intothe British Parliament. The Magna Carta hasreceived much praise for what it ultimatelyaccomplished. Sir Edward Coke finds in MagnaCarta a full and proper legal answer of everyexaction of the Stuart Kings, and a remedy forevery evil suffered at the time. Sir WilliamBlackstone is almost equally admiring. EdmundBurke says, "Magna Carta, if it did not give usoriginally the House of Commons, gave us at leasta House of Commons of weight and excellence."More modern historians speak in the highest termsof the importance of Magna Carta summing uptheir evaluation of it with the observation: "Thewhole of the constitutional history of England is acommentary of this charter."Magna Carta represents a treaty of peaceimposed upon King John by barons who hadrebelled against him for reasons that the charter'sterms themselves make clear. His financialdemands in aid of his foreign wars were held to beoppressive; the methods by which taxation wasassessed and collected were arbitrary andextortionate; reprisals against defaulters wereruthless and brutal; for wrongs suffered there wasno redress. For these abuses a remedy was sought,and since it was by charters that medieval kingscustomarily made their most solemn and bindinggrants to their subjects, it was through a charterthat men thought that an effective remedy mightbe found.But signing of the charter at Runnymede wasnot the ending of the war of the Barons for theirrights. It was a significant point in establishing anew beginning for it.John had no intention of abiding by theCharter, and it was apparent that "No securitiescould bind him." Even before Magna Carta wassigned, he had set to work to destroy it, and henow turned to this task with renewed vigor. Heappealed to the Pope, and hoped to crush hisenemies with foreign troops, while the baronsthemselves prepared for war, and the prelatesstrove to keep the peace. On the 24th of August1215, less than two months after the signing, PopeInnocent III published a bill which declaredMagna Carta null and void, since, he said, it hadbeen extorted from the King by force. He followedthis up by excommunicating the barons who hadobtained it, and in the autumn of 1215 theinevitable war began. John achieved somesuccesses, and the barons asked the French forhelp. At this point, "The aim of the barons was nolonger to secure an agreement with John, to gethim to agree to the Charter, but to achieve hisdestruction." In the midst of these warringfactions, one writer says that "The Charter ofRunnymede seemed likely to pass into the limboof forgotten things. John died unexpectedly inOctober 1216, at the age of 49, from dysentarybrought on, it was said, by too much of peachesand new cider. He died at Newark, and was buriedin Worcester Cathedral."His successor, Henry III, was no more inclinedto abide by the Charter than was King John, buthe thought it expedient to accept it two weeksafter his coronation and after it had been re-edited,somewhat to meet the changed circumstanceswith him king. This time it was re-edited andissued with the Pope's approval. It was revised andre-issued again in 1217, and again in 1225, eachtime after more controversy between the baronsand the king. The rights given the people andbarons were continually fought over anddemanded and denied and reissued throughout thereign of Henry III, in 1237, 1253, and 1265. J. R.Green in his History of the English People,remarks that "Henry had sworn again and again toobserve the Charter, and his oath was no soonertaken than it was unscrupulously broken. Thebarons had secured the freedom of the realm; thesecret of their long patience lay in the difficulty ofsecuring its right administration." The Earl ofNorfolk once refused Henry aid, and Henry said,"I will send reapers and reap your fields for you,"to which the Earl replied, "And I will send youback the heads of your reapers."Edward I followed Henry to the throne afterHenry's death, being recognized by the barons onNovember 20, 1272. The development of theCharter continues to make history, and theconflicts between the king and the barons over histaxing of his subjects to support his wars continue."The admission of the burgesses and the knightsof the shire to the assembly of 1295 completed thefabric of representative government," says Greenin his history. "The Great Council of the Baronsbecame the Parliament of the Realm. Every orderof the state found itself represented in thisassembly, and took part in the grant of supplies,the work of legislation, and in the end the controlof government." (111,366).But in 1297 the King and the Barons were still158

attling over their respective rights. The Kingcontinued to demand despotically taxes tocontinue his war with the French in Gascony andnorthern France, and the nobles, as well as thechurch, were rejecting his demands. The baronsdrew together and called a meeting for the redressof their grievances. The two greatest of theEnglish nobles, Humfey de Bohun, Earl ofHereford, and Roger Bigod, Earl of Norfolk,placed themselves at the head of the opposition ...Edward bade them to lead a force to Gascony ashis lieutenants while he himself sailed to Flanders.Their departure would have left the Baronagewithout leaders, and the two earls refused to go onthe grounds that they were not bound to doforeign service except in attendance on the King,and they refused to obey his orders. [These wordsfollowing are the words of the men involved, notmine] "By God, Sir Earl," swore the King to theEarl Marshal, "you shall either go or hang!" "ByGod, Sir King," was the cool reply, "I will neithergo nor hang!"This was in 1297. The King backed down.Edward in 1297 again confirmed the GreatCharter in exchange for a grant from the clergyand a subsidy from the Commons. "With one ofthose sudden revulsions of feeling of which hisnature was capable the King stood before hispeople in Westminster Hall and owned with aburst of tears that he had taken their substancewithout due warrant of law." The Great Charterwas solemnly confirmed by him in Ghent inNovember (1297); and formal pardon was issuedto the Earls of Hereford and Norfolk. The Charteris relatively secure from this point on.Freedom must be fought for and won in everygeneration. The price of freedom is eternalvigilance. It is bought with courage, and it ismaintained with courage, and frequently withblood letting. The Charter of English freedomfinds its roots in the Charter of Henry I in 1100,whose roots went back much earlier, to Edwardthe Confessor, at least. The victory of Runnymedein 1215 was not secured until 1297, eighty-twoyears later, eighty-two years of standing fast by thegoals that had been won. Green's history tells us (Ipg 372), "The confirmation of the Charter [in1297], the renunciation of any right to theexactions by which the people were aggrieved, thepledge that the King would no more take 'suchaids, tasks, prizes, but by common assent of therealm,' the promise not to impose on wool anyheavy customs without the same assent, was theclose of the great struggle which had begun atRunnymede."God had a hand in both these events, in 1215and in 1297. When John faced the Barons atRunnymede he had just lost battles in France thathad decimated his forces, and he did not want torisk an armed encounter with his foes. In 1297 theScots were poised for battle on the border. "It wasScotland which had won this victory for Englishfreedom," we read in Green's history. "At themoment when Edward and the earls stood face toface, the King saw his work in the north suddenlyundone." (Green 1:373) God works in history,working his purposes out. The masterplan ofhistory is in the hands of God.We need a Runnymede today. We need acontinuing Runnymede. Powers today are seekingto take away our freedoms, our living, ourpersonal freedom, our lives, our religious freedom,our political freedom, our economic freedom,powers, forces, conspiracies, that dwarf theconfrontation at Runnymede into insignificance.We must have men and women today to confrontthese forces, to withstand these forces, to supportthose who are opposing these forces, such as theworld has never known. We need in our times menof moral courage as those barons who met in St.Paul's Cathedral, London, on August 25, 1213,and who voted unanimously "to fight to thedeath," esteeming freedom more to be desired thanlife. Most people don't even want to know aboutthese forces, the enemies of mankind. It isextremely difficult to get support from people inorder to do battle with these enemies. We need redblooded men and women of courage today, or ourcountry is gone, our civilization is gone. Manycurrent historians and students of events havealready written it off. But I stand with my friendwho said, "Not to fight is unthinkable."But God is still in his heaven, He still is the Godof history and of human events. And we still havemen and women of courage, not too many, but westill have some. Men and women who will standup for God and country, and who are willing tomake sacrifices. Men and women who don'tmeasure every value by the dollar sign. Men andwomen who value freedom, freedom in God,freedom in the Spirit of Christ, the freedom ofEternal Life in the Infinite, above everything. Wedon't have many, but we have a few. The Enemyknows them, and they are under attack. Stand bythem. God protect them. God save us.Thank you.159

FIFTEEN"This Act establishes the most gigantic truston earth. When the President (Wilson) signsthis bill (Federal Reserve Act) the invisiblegovernment of the Monetary Power will belegalized. . . the worst legislative crime of theages is perpetrated by this banking andcurrency bill."CONGRESSMANCHARLES A. LINDBERGHTEXT: THE FEDERAL RESERVE ACTComplete text H.R. 7837, December 23, 1913*Control of the United States economy, domestic and international affairs,unconstitutionally conferred upon a cartel of international bankers by Congress, isdetailed under seventeen headings and thirty sections of the Federal Reserve Act:FEDERAL RESERVE DISTRICTS Sec. 2BRANCH OFFICES Sec. 3FEDERAL RESERVE BANKS Sec. 4STOCK ISSUES: INCREASE AND DECREASE OF CAPITAL Sec. 5 & 6DIVISION OF EARNINGS Sec. 7 & 8STATE BANKS AS MEMBERS Sec. 9FEDERAL RESERVE BOARD Sec. 10 & 11FEDERAL ADVISORY COUNCIL Sec. 12POWERS OF FEDERAL RESERVE BANKS Sec. 13OPEN-MARKET OPERATIONS Sec. 14GOVERNMENT DEPOSITS Sec. 15NOTE ISSUES Sec. 16 & 17REFUNDING BONDS Sec. 18BANK RESERVES Sec. 19 & 20BANK EXAMINATIONS Sec. 21-23LOANS ON FARM LANDS Sec. 24FOREIGN BRANCHES Sec. 25-28*UNITED STATES STATUTES AT LARGE, 63rd Congress, 1913-1915, Vol 38,Part 1, PUBLIC LA WS, Chap 6, pp 251-275160

Section 29 provides for striking offending (to the owners of the Federal Reserve System)clauses, sentences, paragraphs or parts of the Act.Section 30 reserves the right to amend, alter, or repeal the Act.Congressman Charles A. Lindbergh of Minnesota, father of the famous flyer, made aprophetic statement on the swindle which had been foisted on the American people byadoption of the Federal Reserve Act. Speaking on the floor of the House on December 23,1913, the day the Federal Reserve Act became law, Mr. Lindbergh said:"This act establishes the most gigantic trust on earth. When the President (Wilson)signs this bill the invisible government of the Monetary Power will be legalized.. . .the worst legislative crime of the ages is perpetrated by this banking andcurrency bill."--------------------------------------------------------------------------------------------------------FEDERAL RESERVE ACT H.R. 7837, December 23,1913December 23,1913.in, R, 7837][Public, No. 43.]CHAP. 6.—An Act To provide for the establishment of Federal reserve banks,to furnish an elastic currency, to afford means of rediscounting commercial paper,to establish a more effective supervision of banking in the United States, and forother purposes.Federal Reserve Act.Terms construed.Be it enacted by the Senate and House of Representatives of the United States ofAmerica in Congress assembled, That the short title of this Act shall be the "FederalReserve Act."Wherever the word "bank" is used in this Act, the word shall be held to includeState bank, banking association, and trust company, except where national banks orFederal Reserve banks are specifically referred to.The terms "national bank" and "national banking association" used in this Actshall be held to be synonymous and interchangeable. The term "member bank" shallbe held to mean any national bank, State bank, or bank or trust company which hasbecome a member of one of the reserve banks created by this Act. The term "board"shall be held to mean Federal Reserve Board; the term "district" shall be held tomean Federal Reserve District; the term "reserve bank" shall be held to meanFederal Reserve Bank.Federal reserve districtscities.Districts.Designation of Federal reserveFEDERAL RESERVE DISTRICTS.SEC. 2. As soon as practicable, the Secretary of the Treasury, the Secretary ofAgriculture and the Comptroller of the Currency, acting as "The Reserve BankOrganization Committee," shall designate not less than eight nor more than twelvecities to be known as Federal reserve cities, and shall divide the continental UnitedStates, excluding Alaska, into districts, each district to contain only one of suchFederal reserve cities. The determination of said organization United States two percentum Government bonds, become a first and paramount lien on all the assets ofsuch bank.Reduction of reserve liability. Any Federal reserve bank may at any time reduce its liability for outstandingFederal reserve notes, by depositing, with the Federal reserve agent, its Federalreserve notes, gold, gold certificates, or lawful money of the United States. Federalreserve notes so deposited shall not be reissued, except upon compliance with theconditions of an original issue.161

Reserve agent's duties. The Federal reserve agent shall hold such gold, gold certificates, or lawful moneyavailable exclusively for exchange for the outstanding Federal reserve notes whenoffered by the reserve bank of which he is a director. Upon the request of theTransfer of gold to the Secretary of the Treasury the Federal Reserve Board shall require the FederalTreasury,reserve agent to transmit so much of said gold to the Treasury of the United Statesas may be required for the exclusive purpose of the redemption of such notes.Exchange of collateral.Provisions for priming, etc.,notes.Any Federal reserve bank may at its discretion withdraw collateral depositedwith the local Federal reserve agent for the protection of its Federal reserve notesdeposited with it and shall at the same time substitute therefor other like collateralof equal amount with the approval of the Federal reserve agent under regulations tobe prescribed by the Federal Reserve Board.In order to furnish suitable notes for circulation as Federal reserve notes, theComptroller of the Currency shall, under the direction of the Secretary of theTreasury, cause plates and dies to be engraved in the best manner to guard againstcounterfeits and fraudulent alterations, and shall have printed therefrom andnumbered such quantities of such notes of the denominations of $5, $10, $20, $50,$100, as may be required to supply the Federal reserve banks. Such notes shall be inform and tenor as directed by the Secretary of the Treasury under the provisions ofthis Act and shall bear the distinctive numbers of the several Federal reserve banksthrough which they are issued.Custody of notes before issue. When such notes have been prepared, they shall be deposited in the Treasury, orin the subtreasury, or mint of the United States nearest the place of business of eachFederal reserve bank and shall be held for the use of such bank subject to the orderof the Comptroller of the Currency for their delivery, as provided by this Act.Custody of plates and dies. The plates and dies to be procured by the Comptroller of the Currency for theprinting of such circulating notes shall remain under his control and direction, andthe expenses necessarily incurred in executing the laws relating to the procuring ofsuch notes, and all other expenses incidental to their issue and retirement, shall bepaid by the Federal reserve banks, and the Federal Reserve Board shall include in itsestimate of expenses levied against the Federal reserve banks a sufficient amount tocover the expenses herein provided for.Annual examination of plates,etc.R.S,sec. 5174,p. IOOO.The examination of plates, dies, bed pieces, and so forth, and regulations relatingto such examination of plates, dies, and so forth, of national-bank notes providedfor in section fifty-one hundred and seventy-four Revised Statutes, is herebyextended to include notes herein provided for.Payment for engraving, Any appropriation heretofore made out of the general funds of the Treasury forprinting, paper, etc.engraving plates and dies, the purchase of distinctive paper, or to cover any otherexpense in connection with the printing of national-bank notes or notes providedvol. 35, p. 547.for by the Act of May thirtieth, nineteen hundred and eight, and any distinctivepaper that may be on hand at the time of the passage of this Act may be used in thediscretion of the Secretary for the purposes of this Act, committee shall not beProviso.subject to review except by the Federal Reserve Board when organized: Provided,Apportionment of territory. That the districts shall be apportioned with due regard to the convenience andcustomary course of business and shall not necessarily be coterminous with anyState or States. The districts thus created may be readjusted and new districts mayDesignation, etc.from time to time be created by the Federal Reserve Board, not to exceed twelve inall. Such districts shall be known as Federal reserve districts and may be designatedby number. A majority of the organization committee shall constitute a quorumwith authority to act.Reserve Bank Organization Said organization committee shall be authorized to employ counsel and expert aid,Committee.to take testimony, to send for persons and papers, to administer oaths, and to make162

Duties and authority.such investigation as may be deemed necessary by the said committee indetermining the reserve districts and in designating the cities within such districtswhere such Federal reserve banks shall be severally located. The said committeeshall supervise the organization in each of the cities designated of a Federal reservebank, which shall include in its title the name of the city in which it is situated, as"Federal Reserve Bank of Chicago."Written acceptance of Act by Under regulations to be prescribed by the organization committee, every nationalbanks.banking association in the United States is hereby required, and every eligible bankin the United States and every trust company within the District of Columbia, ishereby authorized to signify in writing, within sixty days after the passage of thisFederal reserve banks. Act, its acceptance of the terms and provisions hereof. When the organizationSubscriptions by national committee shall have designated the cities in which Federal reserve banks are to bebanks to, required.organized, and fixed the geographical limits of the Federal reserve districts, everynational banking association within that district shall be required within thirty daysafter notice from the organization committee, to subscribe to the capital stock ofPayment for stock. such Federal reserve bank in a sum equal to six per centum of the paid-up capitalstock and surplus of such bank, one-sixth of the subscription to be payable on call ofthe organization committee or of the Federal Reserve Board, one-sixth within threemonths and one-sixth within six months thereafter, and the remainder of thesubscription, or any part thereof, shall be subject to call when deemed necessary bythe Federal Reserve Board, said payments to be in gold or gold certificates.Responsibility of shareholders. The shareholders of every Federal reserve bank shall be held individuallyresponsible, equally and ratably, and not one for another, for all contracts, debts,and engagements of such bank to the extent of the amount of their subscriptions tosuch stock at the par value thereof in addition to the amount subscribed, whethersuch subscriptions have been paid up in whole or in part, under the provisions ofthis Act.Nonaccepting banks not to bereserve agents.Any national bank failing to signify its acceptance of the terms of this Act withinthe sixty days aforesaid, shall cease to act as a reserve agent, upon thirty daysnotice, to be given within the discretion of the said organization committee or of theFederal Reserve Board.Dissolution of nonaccepting Should any national banking association in the United States now organized failnational banks.within one year after the passage of this Act to become a member bank or fail tocomply with any of the provisions of this Act applicable thereto, all of the rights,privileges, and franchises of such association granted to it under the national-bankDissolution for violations of Act, or under the provisions of this Act, shall be thereby forfeited. Anythis Act.noncompliance with or violation of this Act shall, however, be determined andadjudged by any court of the United States of competent jurisdiction in a suitbrought for that purpose in the district or territory in which such bank is located,under direction of the Federal Reserve Board, by the Comptroller of the CurrencyLiability of directors. in his own name before the association shall be declared dissolved. In cases of suchnoncompliance or violation, other than the failure to become a member bank underthe provisions of this Act, every director who participated in or assented to the sameshall be held liable in his personal or individual capacity for all damages which saidbank, its shareholders, or any other person shall have sustained in consequence ofsuch violation.Further remedies.Public subscriptions to stockof Federal reserve banks.Such dissolution shall not take away or impair any remedy against suchcorporation, its stockholders or officers, for any liability or penalty which shall havebeen previously incurred.Should the subscriptions by banks to the stock of said Federal reserve banks orany one or more of them be, in the judgment of the organization committee,163

insufficient to provide the amount of capital required therefor, then and in thatevent the said organization committee may, under conditions and regulations to beprescribed by it, offer to public subscription at par such an amount of stock in saidFederal reserve banks, or any one or more of them, as said committee shalldetermine, subject to the same conditions as to payment and stock liability asprovided for member banks.Limit of public subscriptions. No individual, copartnership, or corporation other than a member bank of itsdistrict shall be permitted to subscribe for or to hold at any time more than $25,000par value of stock in any Federal reserve bank. Such stock shall be known as publicstock and may be transferred on the books of the Federal reserve bank by thechairman of the board of directors of such bank.Conditional allotment toUnited states.Payment, etc.No voting power.Should the total subscriptions by banks and the public to the stock of said Federalreserve banks, or any one or more of them, be, in the judgment of the organizationcommittee, insufficient to provide the amount of capital required therefor, then andin that event the said organization committee shall allot to the United States such anamount of said stock as said committee shall determine. Said United States stockshall be paid for at par out of any money in the Treasury not otherwiseappropriated, and shall be held by the Secretary of the Treasury and disposed of forthe benefit of the United States in such manner, at such times, and at such price, notless than par, as the Secretary of the Treasury shall determine.Stock not held by member banks shall not be entitled to voting power.Transfers of stock.The Federal Reserve Board is hereby empowered to adopt and promulgate rulesand regulations governing the transfers of said stock.Capital required.No Federal reserve bank shall commence business with a subscribed capital lessan $4,000,000. The organization of reserve districts and Federal reserve citiesshall not be construed as changing the present status of reserve cities and centralreserve cities, except in so far as this Act changes the amount of reserves that mayAppropriation for expenses of be carried with approved reserve agents located therein. The organizationorganization committee. committee shall have power to appoint such assistants and incur such expenses incarrying out the provisions of this Act as it shall deem necessary, and such expensesshall be payable by the Treasurer of the United States upon voucher approved bythe Secretary of the Treasury, and the sum of $100,000, or so much thereof as maybe necessary, is hereby appropriated, out of any moneys in the Treasury nototherwise appropriated, for the payment of such expenses.Branch offices.banks.Management, etc.Establishment of branchBRANCH OFFICES.SEC. 3. Each Federal reserve bank shall establish branch banks within theFederal reserve district in which it is located and may do so in the district of anyFederal reserve bank which may have been suspended. Such branches shall beoperated by a board of directors under rules and regulations approved by theFederal Reserve Board. Directors of branch banks shall possess the samequalifications as directors of the Federal reserve banks. Four of said directors shallbe selected by the reserve bank and three by the Federal Reserve Board, and theyshall hold office during the pleasure, respectively, of the parent bank and theFederal Reserve Board. The reserve bank shall designate one of the directors asmanager.Federal reserve banks. F E D E R A L R E S E R V E B A N K S .reserve cities.Establishment of districts andSEC. 4. When the organization committee shall have established Federal reservedistricts as provided in section two of this Act, a certificate shall be filed with theComptroller of the Currency showing the geographical limits of such districts and164

Notice for organization. the Federal reserve city designated for each of such districts. The Comptroller ofthe Currency shall thereupon cause to be forwarded to each national bank locatedin each district, and to such other banks declared to be eligible by the organizationcommittee which may apply therefor, an application blank in form to be approvedby the organization committee, which blank shall contain a resolution to be adoptedby the board of directors of each bank executing such application, authorizing asubscription to the capital stock of the Federal reserve bank organizing in thatdistrict in accordance with the provisions of this Act.Organization proceedings..Deposit of certificate.Corporate powers.General.Issue of circulating notes.When the minimum amount of capital stock prescribed by this Act for theorganization of any Federal reserve bank shall have been subscribed and allotted,the organization committee shall designate any five banks of those whoseapplications have been received, to execute a certificate of organization, andthereupon the banks so designated shall, under their seals, make an organizationcertificate which shall specifically state the name of such Federal reserve bank, theterritorial extent of the district over which the operations of such Federal reservebank are to be carried on, the city and State in which said bank is to be located, theamount of capital stock and the number of shares into which the same is divided,the name and place of doing business of each bank executing such certificate, and ofall banks which have subscribed to the capital stock of such Federal reserve bankand the number of shares subscribed by each, and the fact that the certificate ismade to enable those banks executing same, and all banks which have subscribed ormay thereafter subscribe to the capital stock of such Federal reserve bank, to availthemselves of the advantages of this Act.The said organization certificate shall be acknowledged before a judge of somecourt of record or notary public; and shall be, together with the acknowledgmentthereof, authenticated by the seal of such court, or notary, transmitted to theComptroller of the Currency, who shall file, record and carefully preserve the samein his office.Upon the filing of such certificate with the Comptroller of the Currency asaforesaid, the said Federal reserve bank shall become a body corporate and as such,and in the name designated in such organization certificate, shall have power—First. To adopt and use a corporate seal.Second. To have succession for a period of twenty years from its organizationunless it is sooner dissolved by an Act of Congress, or unless its franchise becomesforfeited by some violation of law.Third. To make contracts.Fourth. To sue and be sued, complain and defend, in any court of law or equity.Fifth. To appoint by its board of directors, such officers and employees as are nototherwise provided for in this Act, to define their duties, require bonds of them andfix the penalty thereof, and to dismiss at pleasure such officers or employees.Sixth. To prescribe by its board of directors, by-laws not inconsistent with law,regulating the manner in which its general business may be conducted, and theprivileges granted to it by law may be exercised and enjoyed.Seventh. To exercise by its board of directors, or duly authorized officers oragents, all powers specifically granted by the provisions of this Act and suchincidental powers as shall be necessary to carry on the business of banking withinthe limitations prescribed by this Act.Eighth. Upon deposit with the Treasurer of the United States of any bonds of theUnited States in the manner provided by existing law relating to national banks, to165

eceive from the Comptroller of the Currency circulating notes in blank, registeredand countersigned as provided by law, equal in amount to the par value of thebonds so deposited, such notes to be issued under the same conditions andprovisions of law as relate to the issue of circulating notes of national banks securedby bonds of the United States bearing the circulating privilege, except that the issueof such notes shall not be limited to the capital stock of such Federal reserve bank.Restriction of business.Board of directors.General duties.Administration.But no Federal reserve bank shall transact any business except such as isincidental and necessarily preliminary to its organization until it has beenauthorized by the Comptroller of the Currency to commence business under theprovisions of this Act.Every Federal reserve bank shall be conducted under the supervision and controlof a board of directors.The board of directors shall perform the duties usually appertaining to the officeof directors of banking associations and all such duties as are prescribed by law.Said board shall administer the affairs of said bank fairly and impartially andwithout discrimination in favor of or against any member bank or banks and shall,subject to the provisions of law and the orders of the Federal Reserve Board, extendto each member bank such discounts, advancements and accommodations as maybe safely and reasonably made with due regard for the claims and demands of othermember banks.Number and term of directors. Such board of directors shall be selected as hereinafter specified and shallconsist of nine members, holding office for three years, and divided into threeClassification. classes, designated as classes A, B, and C.Class A.Post, p. 733.Class B.Class C.Chairman of board.Service of Senators orRepresentatives forbidden.other disqualifications.Directors of class A & class B.Procedure for choosing.Class A shall consist of three members, who shall be chosen by and berepresentative of the stock-holding banks.Class B shall consist of three members, who at the time of their election shall beactively engaged in their district in commerce, agriculture or some other industrialpursuit.Class C shall consist of three members who shall be designated by the FederalReserve Board. When the necessary subscriptions to the capital stock have beenobtained for the organization of any Federal reserve bank, the Federal ReserveBoard shall appoint the class C directors and shall designate one of such directors aschairman of the board to be selected. Pending the designation of such chairman, theorganization committee shall exercise the powers and duties appertaining to theoffice of chairman in the organization of such Federal reserve bank.No Senator or Representative in Congress shall be a member of the FederalReserve Board or an officer or a director of a Federal reserve bank.No director of class B shall be an officer, director, or employee of any bank.No director of class C shall be an officer, director, employee, or stockholder ofany bank.Directors of class A and class B shall be chosen in the following manner:The chairman of the board of directors of the Federal reserve bank of the districtin which the bank is situated or, pending the appointment of such chairman, theorganization committee shall classify the member banks of the district into threegeneral groups or divisions. Each group shall contain as nearly as may be one-thirdof the aggregate number of the member banks of the district and shall consist, asnearly as may be, of banks of similar capitalization. The groups shall be designatedby number by the chairman.166

Electors for member banks. At a regularly called meeting of the board of directors of each member bank inthe district it shall elect by ballot a district reserve elector and shall certify his nameto the chairman of the board of directors of the Federal reserve bank of the district.The chairman shall make lists of the district reserve electors thus named by banks ineach of the aforesaid three groups and shall transmit one list to each elector in eachgroup.Nomination of candidates. Each member bank shall be permitted to nominate to the chairman one candidatefor director of class A and one candidate for director of class B. The candidates sonominated shall be listed by the chairman, indicating by whom nominated, and acopy of said list shall, within fifteen days after its completion, be furnished by thechairman to each elector.Balloting for directors.Declaration of result.Every elector shall, within fifteen days after the receipt of the said list, certify tothe chairman his first, second, and other choices of a director of class A and class B,respectively, upon a preferential ballot, on a form furnished by the chairman of theboard of directors of the Federal reserve bank of the district. Each elector shallmake a cross opposite the name of the first, second, and other choices for a directorof class A and for a director of class B, but shall not vote more than one choice forany one candidate.Any candidate having a majority of all votes cast in the column of first choiceshall be declared elected. If no candidate have a majority of all the votes in the firstcolumn, then there shall be added together the votes cast by the electors for suchcandidates in the second column and the votes cast for the several candidates in thefirst column. If any candidate then have a majority of the electors voting, by addingtogether the first and second choices, he shall be declared elected. If no candidatehave a majority of electors voting when the first and second choices shall have beenadded, then the votes cast in the third column for other choices shall be addedtogether in like manner, and the candidate then having the highest number of votesshall be declared elected. An immediate report of election shall be declared.class c directors.Appointment.chairman of board andFederal reserve agent.Duties, etc.Pay,Deputy.Class C directors shall be appointed by the Federal Reserve Board. They shallhave been for at least two years residents of the district for which they areappointed, one of whom shall bedesignated by said board as chairman of the boardof directors of the Federal reserve bank and as "Federal reserve agent." He shall be aperson of tested banking experience; and in addition to his duties as chairman ofthe board of directors of the Federal reserve bank he shall be required to maintainunder regulations to be established by the Federal Reserve Board a local office ofsaid board on the premises of the Federal reserve bank. He shall make regularreports to the Federal Reserve Board, and shall act as its official representative forthe performance of the functions conferred upon it by this Act. He shall receive anannual compensation to be fixed by the Federal Reserve Board and paid monthlyby the Federal reserve bank to which he is designated. One of the directors of classC, who shall be a person of tested banking experience, shall be appointed by theFederal Reserve Board as deputy chairman and deputy Federal reserve agent toexercise the powers of the chairman of the board and Federal reserve agent in caseof absence or disability of his principal.compensation of directors. Directors of Federal reserve banks shall receive, in addition to any compensationotherwise provided, a reasonable allowance for necessary expenses in attendingmeetings of their respective boards, which amount shall be paid by the respectiveFederal reserve banks. Any compensation that may be provided by boards ofdirectors of Federal reserve banks for directors, officers or employees shall besubject to the approval of the Federal Reserve Board.preliminary meetingsThe Reserve Bank Organization Committee may, in organizing Federal reservebanks, call such meetings of bank directors in the several districts as may be167

Designation of first terms ofmembers.Subsequent tenure.Vacancies.necessary to carry out the purposes of this Act, and may exercise the functionsherein conferred upon the chairman of the board of directors of each Federalreserve bank pending the complete organization of such bank.At the first meeting of the full board of directors of each Federal reserve bank,it shall be the duty of the directors of classes A, B and C, respectively, to designateone of the members of each class whose term of office shall expire in one year fromthe first of January nearest to date of such meeting, one whose term of office shallexpire at the end of two years from said date, and one whose term of office shallexpire at the end of three years from said date. Thereafter every director of aFederal reserve bank chosen as hereinbefore provided shall hold office for a term ofthree years. Vacancies that may occur in the several classes of directors of Federalreserve banks may be filled in the manner provided for the original selection of suchdirectors, such appointees to hold office for the unexpired terms of theirpredecessors.Capital stock.Provision for increase ordecrease.Stock of member banks nottransferable.Additional subscription frommember banks increasing theircapital.Subscription from newmembers.Certificate of increases.Surrender fromreducing capital, etc.membersCancellation and payment ofsurrendered shares.Insolvent members.Cancellation of stock, etc.Certificate of reductions.STOCK ISSUES; INCREASE AND DECREASE OF CAPITAL.SEC. 5. The capital stock of each Federal reserve bank shall be divided intoshares of $100 each. The outstanding capital stock shall be increased from time totime as member banks increase their capital stock and surplus or as additional banksbecome members and may be decreased as member banks reduce their capital stockor surplus or cease to be members. Shares of the capital stock of Federal reservebanks owned by member banks shall not be transferred or hypothecated. When amember bank increases its capital stock or surplus, it shall thereupon subscribe foran additional amount of capital stock of the Federal reserve bank of its district equalto six per centum of the said increase, one-half of said subscription to be paid in themanner hereinbefore provided for original subscription, and one-half subject to callof the Federal Reserve Board. A bank applying for stock in a Federal reserve bankat any time after the organization thereof must subscribe for an amount of thecapital stock of the Federal reserve bank equal to six per centum of the paid-upcapital stock and surplus of said applicant bank, paying therefor its par value plusone-half of one per centum a month from the period of the last dividend. When thecapital stock of any Federal reserve bank shall have been increased either onaccount of the increase of capital stock of member banks or on account of theincrease in the number of member banks, the board of directors shall cause to beexecuted a certificate to the Comptroller of the Currency showing the increase incapital stock, the amount paid in, and by whom paid. When a member bank reducesits capital stock it shall surrender a proportionate amount of its holdings in thecapital of said Federal reserve bank, and when a member bank voluntarily liquidatesit shall surrender all of its holdings of the capital stock of said Federal reserve bankand be released from its stock subscription not previously called. In either case theshares surrendered shall be canceled and the member bank shall receive in paymenttherefor, under regulations to be prescribed by the Federal Reserve Board, a sumequal to its cash-paid subscriptions on the shares surrendered and one-half of oneper centum a month from the period of the last dividend, not to exceed the bookvalue thereof, less any liability of such member bank to the Federal reserve bank.SEC. 6. If any member bank shall be declared insolvent and a receiver appointedtherefor, the stock held by it in said Federal reserve bank shall be canceled, withoutimpairment of its liability, and all cash-paid subscriptions on said stock, withone-half of one per centum per month from the period of last dividend, not toexceed the book value thereof, shall be first applied to all debts of the insolventmember bank to the Federal reserve bank, and the balance, if any, shall be paid tothe receiver of the insolvent bank. Whenever the capital stock of a Federal reserve168

ank is reduced, either on account of a reduction in capital stock of any memberbank or of the liquidation or insolvency of such bank, the board of directors shallcause to be executed a certificate to the Comptroller of the Currency showing suchreduction of capital stock and the amount repaid to such bank.Division of earnings.Annual dividends.Franchise tax.Surplus fund.Disposition of earning;derived by United States.Banks dissolving, etc.Tax exemption.National banks.Conversion of State, etc.,banks into.R.S., sec. 5154, p. 996,amended.Proviso.Not to contravene State law.Declaration by directors.Capital stock.Certificate, etc.DIVISION OF EARNINGS.SEC. 7. After all necessary expenses of a Federal reserve bank have been paid orprovided for, the stockholders shall be entitled to receive an annual dividend of sixper centum on the paid-in capital stock, which dividend shall be cumulative. Afterthe aforesaid dividend claims have been fully met, all the net earnings shall be paidto the United States as a franchise tax, except that one-half of such net earningsshall be paid into a surplus fund until it shall amount to forty per centum of thepaid-in capital stock of such bank.The net earnings derived by the United States from Federal reserve banks shall,in the discretion of the Secretary, be used to supplement the gold reserve heldagainst outstanding United States notes, or shall be applied to the reduction of theoutstanding bonded indebtedness of the United States under regulations to beprescribed by the Secretary of the Treasury. Should a Federal reserve bank bedissolved or go into liquidation, any surplus remaining, after the payment of alldebts, dividend requirements as hereinbefore provided, and the par value of thestock, shall be paid to and become the property of the United States and shall besimilarly applied.Federal reserve banks, including the capital stock and surplus therein, and theincome derived therefrom shall be exempt from Federal, State, and local taxation,except taxes upon real estate.SEC. 8. Section fifty-one hundred and fifty-four, United States Revised Statutes,is hereby amended to read as follows:Any bank incorporated by special law of any State or of the United States ororganized under the general laws of any State or of the United States and havingan unimpaired capital sufficient to entitle it to become a national bankingassociation under the provisions of the existing laws may, by the vote of theshareholders owning not less than fifty-one per centum of the capital stock of suchbank or banking association, with the approval of the Comptroller of the Currencybe converted into a national banking association, with any name approved by theComptroller of the Currency:Provided, however, That said conversion shall not be in contravention of theState law. In such case the articles of association and organization certificate maybe executed by a majority of the directors of the bank or banking institution, andthe certificate shall declare that the owners of fifty-one per centum of the capitalstock have authorized the directors to make such certificate and to change orconvert the bank or banking institution into a national association. A majority ofthe directors, after executing the articles of association and the organizationcertificate, shall have power to execute all other papers and to do whatever may berequired to make its organization perfect and complete as a national association.The shares of any such bank may continue to be for the same amount each as theywere before the conversion, and the directors may continue to be directors of theassociation until others are elected or appointed in accordance with the provisionsof the statutes of the United States. When the Comptroller has given to such bankor banking association a certificate that the provisions of this Act have beencomplied with, such bank or banking association, and all its stockholders, officers,and employees, shall have the same powers and privileges, and shall be subject to169

State banks, etc.Application to becomemember banks.Issue of stock.Organization.By-laws.Capital required.Additional restrictions.Subject to specifiedregulations.R.S., sec. 5198, 5201, 5208,5209, pp. 1005-1007R.S., secs. 5211-5213, pp.1007, 1008.Member banks not complyingwith regulations, etc., to besuspended.Cancellation of stock, etc.the same duties, liabilities, and regulations, in all respects, as shall have beenprescribed by the Federal Reserve Act and by the national banking Act forassociations originally organized as national banking associations.STATE BANKS AS MEMBERS.SEC. 9. Any bank incorporated by special law of any State, or organized underthe general laws of any State or of the United States, may make application to thereserve bank organization committee, pending organization, and thereafter to theFederal Reserve Board for the right to subscribe to the stock of the Federal reservebank organized or to be organized within the Federal reserve district where theapplicant is located. The organization committee or the Federal Reserve Board,under such rules and regulations as it may prescribe, subject to the provisions of thissection, may permit the applying bank to become a stockholder in the Federalreserve bank of the district in which the applying bank is located. Whenever theorganization committee or the Federal Reserve Board shall permit the applyingbank to become a stockholder in the Federal reserve bank of the district, stock shallbe issued and paid for under the rules and regulations in this Act provided fornational banks which become stockholders in Federal reserve banks.The organization committee or the Federal Reserve Board shall establish by-lawsfor the general government of its conduct in acting upon applications made by theState banks and banking associations and trust companies for stock ownership inFederal reserve banks. Such by-laws shall require applying banks not organizedunder Federal law to comply with the reserve and capital requirements and tosubmit to the examination and regulations prescribed by the organizationcommittee or by the Federal Reserve Board. No applying bank shall be admitted tomembership in a Federal reserve bank unless it possesses a paid-up unimpairedcapital sufficient to entitle it to become a national banking association in the placewhere it is situated, under the provisions of the national banking Act.Any bank becoming a member of a Federal reserve bank under the provisionsof this section shall, in addition to the regulations and restrictions hereinbeforeprovided, be required to conform to the provisions of law imposed on the nationalbanks respecting the limitation of liability which may be incurred by any person,firm, or corporation to such banks, the prohibition against making purchase of orloans on stock of such banks, and the withdrawal or impairment of capital, or thepayment of unearned dividends, and to such rules and regulations as the FederalReserve Board may, in pursuance thereof, prescribe.Such banks, and the officers, agents, and employees thereof, shall also be subjectto the provisions of and to the penalties prescribed by sections fifty-one hundredand ninety-eight, fifty-two hundred, fifty-two hundred and one, and fifty-twohundred and eight, and fifty-two hundred and nine of the Revised Statutes. Themember banks shall also be required to make reports of the conditions and of thepayments of dividends to the comptroller, as provided in sections fifty-two hundredand eleven and fifty-two hundred and twelve of the Revised Statutes, and shall besubject to the penalties prescribed by section fifty-two hundred and thirteen for thefailure to make such report.If at any time it shall appear to the Federal Reserve Board that a member bankhas failed to comply with the provisions of this section or the regulations of theFederal Reserve Board, it shall be within the power of the said board, after hearing,to require such bank to surrender its stock in the Federal reserve bank; upon suchsurrender the Federal reserve bank shall pay the cash-paid subscriptions to the saidstock with interest at the rate of one-half of one per centum per month, computedfrom the last dividend, if earned, not to exceed the book value thereof, less any170

Restoration.liability to said Federal reserve bank, except the subscription liability not previouslycalled, which shall be canceled, and said Federal reserve bank shall, upon noticefrom the Federal Reserve Board, be required to suspend said bank from furtherprivileges of membership, and shall within thirty days of such notice cancel andretire its stock and make payment therefor in the manner herein provided. TheFederal Reserve Board may restore membership upon due proof of compliance withthe conditions imposed by this section.Federal Reserve Board.Created; membership.Appointive members.Duties, salaries, etc.Additional pay to Comptrollerof the Currency.Connections with memberbanks forbidden.Tenure of appointivemembers.Governor and vice governor.Offices, etc.Assessment for expenses.Meetings, etc.Disqualifications.FEDERAL RESERVE BOARD.SEC. 10. A Federal Reserve Board is hereby created which shall consist of sevenmembers, including the Secretary of the Treasury and the Comptroller of theCurrency, who shall be members ex officio, and five members appointed by thePresident of the United States, by and with the advice and consent of the Senate. Inselecting the five appointive members of the Federal Reserve Board, not more thanone of whom shall be selected from any one Federal reserve district, the Presidentshall have due regard to a fair representation of the different commercial, industrialand geographical divisions of the country. The five members of the FederalReserve Board appointed by the President and confirmed as aforesaid shall devotetheir entire time to the business of the Federal Reserve Board and shall eachreceive an annual salary of $12,000, payable monthly together with actualnecessary traveling expenses, and the Comptroller of the Currency, as ex officiomember of the Federal Reserve Board, shall, in addition to the salary now paid himas Comptroller of the Currency, receive the sum of $7,000 annually for his servicesas a member of said board.The members of said board, the Secretary of the Treasury, the AssistantSecretaries of the Treasury, and the Comptroller of the Currency shall be ineligibleduring the time they are in office and for two years thereafter to hold any office,position, or employment in any member bank. Of the five members thus appointedby the President at least two shall be persons experienced in banking or finance.One shall be designated by the President to serve for two, one for four, one for six,one for eight, and one for ten years, and thereafter each member so appointed shallserve for a term of ten years unless sooner removed for cause by the President. Ofthe five persons thus appointed, one shall be designated by the President asgovernor and one as vice governor of the Federal Reserve Board. The governor ofthe Federal Reserve Board, subject to its supervision, shall be the active executiveofficer. The Secretary of the Treasury may assign offices in the Department of theTreasury for the use of the Federal Reserve Board. Each member of the FederalReserve Board shall within fifteen days after notice of appointment make andsubscribe to the oath of office.The Federal Reserve Board shall have power to levy semiannually upon theFederal reserve banks, in proportion to their capital stock and surplus, anassessment sufficient to pay its estimated expenses and the salaries of its membersand employees for the half year succeeding the levying of such assessment, togetherwith any deficit carried forward from the preceding half year.The first meeting of the Federal Reserve Board shall be held in Washington,District of Columbia, as soon as may be after the passage of this Act, at a date to befixed by the Reserve Bank Organization Committee. The Secretary of the Treasuryshall be ex officio chairman of the Federal Reserve Board. No member of theFederal Reserve Board shall be an officer or director of any bank, bankinginstitution, trust company, or Federal reserve bank nor hold stock in any bank,banking institution, or trust company; and before entering upon his duties as amember of the Federal Reserve Board he shall certify under oath to the Secretary of171

Vacancies.Commissions during recess ofthe Senate.Powers of Secretary of theTreasury unimpaired.Annual report.Office of Comptroller of theCurrency.Duties.R.S., sec. 324, p.54, amended.Authority and powers ofBoard.Examination, etc., of reserveind member banks.Published statements.Rediscounted paper.Suspension of reserveequirements.Provisos.Tax imposed.Graduated rates.the Treasury that he has complied with this requirement. Whenever a vacancy shalloccur, other than by expiration of term, among the five members of the FederalReserve Board appointed by the President, as above provided, a successor shall beappointed by the President, with the advice and consent of the Senate, to fill suchvacancy, and when appointed he shall hold office for the unexpired term of themember whose place he is selected to fill.The President shall have power to fill all vacancies that may happen on theFederal Reserve Board during the recess of the Senate, by granting commissionswhich shall expire thirty days after the next session of the Senate convenes.Nothing in this Act contained shall be construed as taking away any powersheretofore vested by law in the Secretary of the Treasury which relate to thesupervision, management, and control of the Treasury Department and bureausunder such department, and wherever any power vested by this Act in the FederalReserve Board or the Federal reserve agent appears to conflict with the powers ofthe Secretary of the Treasury, such powers shall be exercised subject to thesupervision and control of the Secretary.The Federal Reserve Board shall annually make a full report of its operations tothe Speaker of the House of Representatives, who shall cause the same to be printedfor the information of the Congress.Section three hundred and twenty-four of the Revised Statutes of the UnitedStates shall be amended so as to read as follows: There shall be in the Department ofthe Treasury a bureau charged with the execution of all laws passed by Congressrelating to the issue and regulation of national currency secured by United Statesbonds and, under the general supervision of the Federal Reserve Board, of allFederal reserve notes, the chief officer of which bureau shall be called theComptroller of the Currency and shall perform his duties under the generaldirections of the Secretary of the Treasury.SEC. 11. The Federal Reserve Board shall be authorized and empowered:(a) To examine at its discretion the accounts, books and affairs of each Federalreserve bank and of each member bank and to require such statements and reportsas it may deem necessary. The said board shall publish once each week a statementshowing the conditions of each Federal reserve bank and a consolidated statementfor all Federal reserve banks. Such statements shall show in detail the assets andliabilities of the Federal reserve banks, single and combined, and shall furnish fullinformation regarding the character of the money held as reserve and the amount,nature and maturities of the paper and other investments owned or held by Federalreserve banks.(b) To permit, or, on the affirmative vote of at least five members of the ReserveBoard to require Federal reserve banks to rediscount the discounted paper of otherFederal reserve banks at rates of interest to be fixed by the Federal Reserve Board.(c) To suspend for a period not exceeding thirty days, and from time to time torenew such suspension for periods not exceeding fifteen days, any reserverequirement specified in this Act: Provided, That it shall establish a graduated taxuponthe amounts by which the reserve requirements of this Act may be permittedto fall below the level hereinafter specified: And provided further, That when thegold reserve held against Federal reserve notes falls below forty per centum, theFederal Reserve Board shall establish a graduated tax of not more than one percentum per annum upon such deficiency until the reserves fall to thirty-two andone-half per centum, and when said reserve falls below thirty-two and one-half percentum, a tax at the rate increasingly of not less than one and one-half per centum172

Increase of interest rates.Control of Federal reservenotes.Reserve cities.Post, p. 271.Reserve bank officials.Doubtful assets.Suspension of reserve banks.General authority overreserve agents, etc.Supervision of reserve banks.Fiduciary permits.Employees.Appointments without regardto civil service laws, etc.Vol. 22, p. 403.Proviso.Authority of the President.Federal Advisory Council.Created.Selection of members, pay,etc.Meetings, officers, etc.per annum upon each two and one-half per centum or fraction thereof that suchreserve falls below thirty-two and one-half per centum. The tax shall be paid by thereserve bank, but the reserve bank shall add an amount equal to said tax to the ratesof interest and discount fixed by the Federal Reserve Board.(d) To supervise and regulate through the bureau under the charge of theComptroller of the Currency the issue and retirement of Federal reserve notes, andto prescribe rules and regulations under which such notes may be delivered by theComptroller to the Federal reserve agents applying therefor.(e) To add to the number of cities classified as reserve and central reserve citiesunder existing law in which national banking associations are subject to the reserverequirements set forth in section twenty of this Act; or to reclassify existing reserveand central reserve cities or to terminate their designation as such.(f) To suspend or remove any officer or director of any Federal reserve bank, thecause of such removal to be forthwith communicated in writing by the FederalReserve Board to the removed officer or director and to said bank.(g) To require the writing off of doubtful or worthless assets upon the books andbalance sheets of Federal reserve banks.(h) To suspend, for the violation of any of the provisions of this Act, theoperations of any Federal reserve bank, to take possession thereof, administer thesame during the period of suspension, and, when deemed advisable, to liquidate orreorganize such bank.(i) To require bonds of Federal reserve agents, to make regulations for the safeguardingof all collateral, bonds, Federal reserve notes, money or property of anykind deposited in the hands of such agents, and said board shall perform the duties,functions, or services specified in this Act, and make all rules and regulationsnecessary to enable said board effectively to perform the same.(i) To exercise general supervision over said Federal reserve banks.(k) To grant by special permit to national banks applying therefor, when not incontravention of State or local law, the right to act as trustee, executor,administrator, or registrar of stocks and bonds under such rules and regulations asthe said board may prescribe.(1) To employ such attorneys, experts, assistants, clerks, or other employees asmay be deemed necessary to conduct the business of the board. All salaries and feesshall be fixed in advance by said board and shall be paid in the same manner as thesalaries of the members of said board. All such attorneys, experts, assistants, clerks,and other employees shall be appointed without regard to the provisions of theAct of January sixteenth, eighteen hundred and eighty-three (volume twenty-two,United States Statutes at Large, page four hundred and three), and amendmentsthereto, or any rule or regulation made in pursuance thereof: Provided, Thatnothing herein shall prevent the President from placing said employees in theclassified service.FEDERAL ADVISORY COUNCIL.SEC. 12. There is hereby created a Federal Advisory Council, which shall consistof as many members as there are Federal reserve districts. Each Federal reservebank by its board of directors shall annually select from its own Federal reservedistrict one member of said council, who shall receive such compensation andallowances as may be fixed by his board of directors subject to the approval ofthe Federal Reserve Board. The meetings of said advisory council shall be held at173

Authority and duties.Federal reserve banks.Deposits allowed.Discountingpaper.Description.commercialAgricultural, etc., paper.Stock trading paper excluded.Time limit.Proviso.Additional for agriculturalnotes, etc.Rediscounting foreign tradeacceptances.Post. p. 958.Restriction on rediscounts.Washington, District of Columbia, at least four times each year, and oftener if calledby the Federal Reserve Board. The council may in addition to the meetings aboveprovided for hold such other meetings in Washington, District of Columbia, orelsewhere, as it may deem necessary, may select its own officers and adopt its ownmethods of procedure, and a majority of its members shall constitute a quorum forthe transaction of business. Vacancies in the council shall be filled by the respectivereserve banks, and members selected to fill vacancies, shall serve for the unexpiredterm.The Federal Advisory Council shall have power, by itself or through its officers,(1) to confer directly with the Federal Reserve Board on general business conditions;(2) to make oral or written representations concerning matters within thejurisdiction of said board; (3) to call for information and to make recommendationsin regard to discount rates, rediscount business, note issues, reserve conditions in thevarious districts, the purchase and sale of gold or securities by reserve banks, openmarketoperations by said banks, and the general affairs of the reserve bankingsystem.POWERS OF FEDERAL RESERVE BANKS.SEC. 13. Any Federal reserve bank may receive from any of its member banks,and from the United States, deposits of current funds in lawful money, nationalbanknotes, Federal reserve notes, or checks and drafts upon solvent member banks,payable upon presentation; or, solely for exchange purposes, may receive fromother Federal reserve banks deposits of current funds in lawful money, nationalbanknotes, or checks and drafts upon solvent member or other Federal reservebanks, payable upon presentation.Upon the indorsement of any of its member banks, with a waiver of demand,notice and protest by such bank, any Federal reserve bank may discount notes,drafts, and bills of exchange arising out of actual commercial transactions; that is,notes, drafts, and bills of exchange issued or drawn for agricultural, industrial, orcommercial purposes, or the proceeds of which have been used, or are to be used,for such purposes, the Federal Reserve Board to have the right to determine ordefine the character of the paper thus eligible for discount, within the meaning ofthis Act. Nothing in this Act contained shall be construed to prohibit such notes,drafts, and bills of exchange, secured by staple agricultural products, or other goods,wares, or merchandise from being eligible for such discount; but such definitionshall not include notes, drafts, or bills covering merely investments or issued ordrawn for the purpose of carrying or trading in stocks, bonds, or other investmentsecurities, except bonds and notes of the Government of the United States. Notes,drafts, and bills admitted to discount under the terms of this paragraph must havea maturity at the time of discount of not more than ninety days: Provided, Thatnotes, drafts, and bills drawn or issued for agricultural purposes or based onlive stock and having a maturity not exceeding six months may be discounted in anamount to be limited to a percentage of the capital of the Federal reserve bank, to beascertained and fixed by the Federal Reserve Board.Any Federal reserve bank may discount acceptances which are based on theimportation or exportation of goods and which have a maturity at time of discountof not more than three months, and indorsed by at least one member bank. Theamount of acceptances so discounted shall at no time exceed one-half the paid-upcapital stock and surplus of the bank for which the rediscounts are made.The aggregate of such notes and bills bearing the signature or indorsement of anyone person, company, firm, or corporation rediscounted for any one bank shall at174

Dealing in foreign trade paperby member banks allowed.National banks.Debts limited.R.S., sec. 5202, p.1006,amended.Exceptions.Circulating notes.Deposits.Drafts, etc.Dividends, etc.Federal reserve provisionsadded.Regulation of rediscounts, etc.no time exceed ten per centum of the unimpaired capital and surplus of said bank;but this restriction shall not apply to the discount of bills of exchange drawn in goodfaith against actually existing values.Any member bank may accept drafts or bills of exchange drawn upon it andgrowing out of transactions involving the importation or exportation of goodshaving not more than six months sight to run; but no bank shall accept such bills toan amount equal at any time in the aggregate to more than one-half its paid-upcapital stock and surplus.Section fifty-two hundred and two of the Revised Statutes of the United Statesis hereby amended so as to read as follows: No national banking association shallat any time be indebted, or in any way liable, to an amount exceeding the amountof its capital stock at such time actually paid in and remaining undiminished bylosses or otherwise, except on account of demands of the nature following:First. Notes of circulation.Second. Moneys deposited with or collected by the association.Third. Bills of exchange or drafts drawn against money actually on deposit to thecredit of the association, or due thereto.Fourth. Liabilities to the stockholders of the association for dividends and reserveprofits.Fifth. Liabilities incurred under the provisions of the Federal Reserve Act.The rediscount by any Federal reserve bank of any bills receivable and ofdomestic and foreign bills of exchange, and of acceptances authorized by this Act,shall be subject to such restrictions, limitations, and regulations as may be imposedby the Federal Reserve Board.Open-market operations.Federal reserve banks maydeal in commercial paper, etc.Additional powers.Gold transactions.Bonds, notes, etc.Commercial exchange.OPEN-MARKET OPERATIONS.SEC. 14. Any Federal reserve bank may, under rules and regulations prescribedby the Federal Reserve Board, purchase and sell in the open market, at home orabroad, either from or to domestic or foreign banks, firms, corporations, orindividuals, cable transfers and bankers' acceptances and bills of exchange of thekinds and maturities by this Act made eligible for rediscount, with or without theindorsement of a member bank.Every Federal reserve bank shall have power:(a) To deal in gold coin and bullion at home or abroad, to make loans thereon,exchange Federal reserve notes for gold, gold coin, or gold certificates, and tocontract for loans of gold coin or bullion, giving therefor, when necessary,acceptable security, including the hypothecation of United States bonds or othersecurities which Federal reserve banks are authorized to hold;(b) To buy and sell, at home or abroad, bonds and notes of the United States, andbills, notes, revenue bonds, and warrants with a maturity from date of purchase ofnot exceeding six months, issued in anticipation of the collection of taxes or inanticipation of the receipt of assured revenues by any State, county, district,political subdivision, or municipality in the continental United States, includingirrigation, drainage and reclamation districts, such purchases to be made inaccordance with rules and regulations prescribed by the Federal Reserve Board;(c) To purchase from member banks and to sell, with or without its indorsement,bills of exchange arising out of commercial transactions, as hereinbefore defined;175

Discount rates.Foreign accounts andagencies.Government deposits.Use of reserve bank as fiscalagents, etc.Deposit of public fundsrestricted.Proviso.Use of member banks asdepositories.Federal reserve notes.Issue authorized.Receivability.Redemption.Applications for, by reservebanks.Collateral required.Ame, p. 263.Additional security.Reserves required for depositsand circulation.(d) To establish from time to time, subject to review and determination of theFederal Reserve Board, rates of discount to be charged by the Federal reserve bankfor each class of paper, which shall be fixed with a view of accommodatingcommerce and business:(e) To establish accounts with other Federal reserve banks for exchangepurposes and, with the consent of the Federal Reserve Board, to open and maintainbanking accounts in foreign countries, appoint correspondents, and establishagencies in such countries wheresoever it may deem best for the purpose ofpurchasing, selling, and collecting bills of exchange, and to buy and sell with orwithout its indorsement, through such correspondents or agencies, bills ofexchange arising out of actual commercial transactions which have not more thanninety days to run and which bear the signature of two or more responsible parties.GOVERNMENT DEPOSITS.SEC. 15. The moneys held in the general fund of the Treasury, except the fiveper centum fund for the redemption of outstanding national-bank notes and thefunds provided in this Act for the redemption of Federal reserve notes may, uponthe direction of the Secretary of the Treasury, be deposited in Federal reserve banks,which banks, when required by the Secretary of the Treasury, shall act as fiscalagents of the United States; and the revenues of the Government or any partthereof may be deposited in such banks, and disbursements may be made by checksdrawn against such deposits.No public funds of the Philippine Islands, or of the postal savings, or anyGovernment funds, shall be deposited in the continental United States in anybank not belonging to the system established by this Act: Provided, however,That nothing in this Act shall be construed to deny the right of the Secretary of theTreasury to use member banks as depositories.NOTE ISSUES.SEC. 16. Federal reserve notes, to be issued at the discretion of the FederalReserve Board for the purpose of making advances to Federal reserve banksthrough the Federal reserve agents as hereinafter set forth and for no other purpose,are hereby authorized. The said notes shall be obligations of the United States andshall be receivable by all national and member banks and Federal reserve banks andfor all taxes, customs, and other public dues. They shall be redeemed in gold ondemand at the Treasury Department of the United States, in the city ofWashington, District of Columbia, or in gold or lawful money at any Federalreserve bank.Any Federal reserve bank may make application to the local Federal reserveagent for such amount of the Federal reserve notes hereinbefore provided for as itmay require. Such application shall be accompanied with a tender to the localFederal reserve agent of collateral in amount equal to the sum of the Federal reservenotes thus applied for and issued pursuant to such application. The collateralsecurity thus offered shall be notes and bills, accepted for rediscount under theprovisions of section thirteen of this Act, and the Federal reserve agent shall eachday notify the Federal Reserve Board of all issues and withdrawals of Federalreserve notes to and by the Federal reserve bank to which he is accredited. The saidFederal Reserve Board may at any time call upon a Federal reserve bank foradditional security to protect the Federal reserve notes issued to it.Every Federal reserve bank shall maintain reserves in gold or lawful money of notless than thirty-five per centum against its deposits and reserves in gold of not less176

Designation of notes.Reserve banks to return notesto issuing banks.Penalty for using otherwise.Redemption at the Treasury.Reimbursement by reservebank.Gold reserve to be kept.Destruction of unfit notes.Gold-redemption fund to bekept in Treasury.Reserve Board to control noteissue.Interest to be paid.Lien created.Post, p. 268.Additional appropriation.Proviso.Reimbursement.Reserve banks.Deposits, collections, etc.,authorized.than forty per centum against its Federal reserve notes in actual circulation, and notoffset by gold or lawful money deposited with the Federal reserve agent. Notes sopaid out shall bear upon their faces a distinctive letter and serial number, whichshall be assigned by the Federal Reserve Board to each Federal reserve bank.Whenever Federal reserve notes issued through one Federal reserve bank shall bereceived by another Federal reserve bank they shall be promptly returned forcredit or redemption to the Federal reserve bank through which they wereoriginally issued. No Federal reserve bank shall pay out notes issued throughanother under penalty of a tax of ten per centum upon the face value of notes sopaid out. Notes presented for redemption at the Treasury of the United States shallbe paid out of the redemption fund and returned to the Federal reserve banksthrough which they were originally issued, and thereupon such Federal reservebank shall, upon demand of the Secretary of the Treasury, reimburse suchredemption fund in lawful money or, if such Federal reserve notes have beenredeemed by the Treasurer in gold or gold certificates, then such funds shall bereimbursed to the extent deemed necessary by the Secretary of the Treasury in goldor gold certificates, and such Federal reserve bank shall, so long as any of its Federalreserve notes remain outstanding, maintain with the Treasurer in gold an amountsufficient in the judgment of the Secretary to provide for all redemptions to be madeby the Treasurer. Federal reserve notes received by the Treasury, otherwisethan for redemption, may be exchanged for gold out of the redemption fundhereinafter provided and returned to the reserve bank through which they wereoriginally issued, or they may be returned to such bank for the credit of the UnitedStates. Federal reserve notes unfit for circulation shall be returned by the Federalreserve agents to the Comptroller of the Currency for cancellation and destruction.The Federal Reserve Board shall require each Federal reserve bank to maintainon deposit in the Treasury of the United States a sum in gold sufficient in thejudgment of the Secretary of the Treasury for the redemption of the Federal reservenotes issued to such bank, but in no event less than five per centum; but suchdeposit of gold shall be counted and included as part of the forty per centumreserve hereinbefore required. The board shall have the right, acting through theFederal reserve agent, to grant in whole or in part or to reject entirely theapplication of any Federal reserve bank for Federal reserve notes; but to the extentthat such application may be granted the Federal Reserve Board shall, through itslocal Federal reserve agent, supply Federal reserve notes to the bank so applying,and such bank shall be charged with the amount of such notes and shall pay suchrate of interest on said amount as may be established by the Federal Reserve Board,and the amount of such Federal reserve notes so issued to any such bank shall, upondelivery, together with such notes of such Federal reserve bank as may beissued under section eighteen of this Act upon security of and should theappropriations heretofore made be insufficient to meet the requirements of this Act,in addition to circulating notes provided for by existing law, the Secretary is herebyauthorized to use so much of any funds in the Treasury not otherwise appropriatedfor the purpose of furnishing the notes aforesaid: Provided, however, That nothingin this section contained shall be construed as exempting national banks or Federalreserve banks from their liability to reimburse the United States for any expensesincurred in printing and issuing circulating notes.Every Federal reserve bank shall receive on deposit at par from member banksor from Federal reserve banks checks and drafts drawn upon any of its depositors,and when remitted by a Federal reserve bank, checks, and drafts drawn by anydepositor in any other Federal reserve bank or member bank upon funds to thecredit of said depositor in said reserve bank or member bank. Nothing hereincontained shall be construed as prohibiting a member bank from charging its actual177

Charges for collections bymember banks.Clearing house provisions.National banks.Deposit of registered bondsby, repealed.R.S.sec.5159,p.997, amended.Vol. 18, p.124; Vol.22, p.164.expense incurred in collecting and remitting funds, or for exchange sold to itspatrons. The Federal Reserve Board shall, by rule, fix the charges to be collected bythe member banks from its patrons whose checks are cleared through the Federalreserve bank and the charge which may be imposed for the service of clearing orcollection rendered by the Federal reserve bank.The Federal Reserve Board shall make and promulgate from time to timeregulations governing the transfer of funds and charges therefor among Federalreserve banks and their branches, and may at its discretion exercise the functions ofa clearing house for such Federal reserve banks, or may designate a Federal reservebank to exercise such functions, and may also require each such bank to exercise thefunctions of a clearing house for its member banks.SEC. 17. So much of the provisions of section fifty-one hundred and fifty-nineof the Revised Statutes of the United States, and section four of the Act of Junetwentieth, eighteen hundred and seventy-four, and section eight of the Act of Julytwelfth, eighteen hundred and eighty-two, and of any other provisions of existingstatutes as require that before any national banking associations shall be authorizedto commence banking business it shall transfer and deliver to the Treasurer of theUnited States a stated amount of United States registered bonds is hereby repealed.Refunding bonds.Member banks may sell bondsto retire notes.Purchase by reserve banks.Provisos.Annual limit.Ante, p. 254.Allotment.Assignment, etc.Cancellation of outstandingnotes, etc.Issue of Federal reserve notes.Delivery of notes on deposit ofbonds.Ante, p. 254.REFUNDING BONDS.SEC. 18. After two years from the passage of this Act, and at any time during aperiod of twenty years thereafter, any member bank desiring to retire the wholeor any part of its circulating notes, may file with the Treasurer of the United Statesan application to sell for its account, at par and accrued interest, United Statesbonds securing circulation to be retired.The Treasurer shall, at the end of each quarterly period, furnish the FederalReserve Board with a list of such applications, and the Federal Reserve Board may,in its discretion, require the Federal reserve banks to purchase such bonds from thebanks whose applications have been filed with the Treasurer at least ten days beforethe end of any quarterly period at which the Federal Reserve Board maydirect the purchase to be made: Provided, That Federal reserve banks shall not bepermitted to purchase an amount to exceed $25,000,000 of such bonds in any oneyear, and which amount shall include bonds acquired under section four of thisAct by the Federal reserve bank.Provided further, That the Federal Reserve Board shall allot to each Federalreserve bank such proportion of such bonds as the capital and surplus of such bankshall bear to the aggregate capital and surplus of all the Federal reserve banks.Upon notice from the Treasurer of the amount of bonds so sold for its account,each member bank shall duly assign and transfer, in writing, such bonds to theFederal reserve bank purchasing the same, and such Federal reserve bank shall,thereupon, deposit lawful money with the Treasurer of the United States for thepurchase price of such bonds, and the Treasurer shall pay to the member bankselling such bonds any balance due after deducting a sufficient sum to redeem itsoutstanding notes secured by such bonds, which notes shall be canceled andpermanently retired when redeemed.The Federal reserve banks purchasing such bonds shall be permitted to take outan amount of circulating notes equal to the par value of such bonds.Upon the deposit with the Treasurer of the United States of bonds so purchased,or any bonds with the circulating privilege acquired under section four of this Act,any Federal reserve bank making such deposit in the manner provided by existing178

Form and character of notes.Exchange of two per centbonds, for gold notes and bonds.Proviso.Gold purchases, etc.Authority for interest bearingTreasury notes.Issue of three per cent bonds.Exchanges of gold notes forbonds.law, shall be entitled to receive from the Comptroller of the Currency circulatingnotes in blank, registered and countersigned as provided by law, equal in amountto the par value of the bonds so deposited. Such notes shall be the obligations ofthe Federal reserve bank procuring the same, and shall be in form prescribed by theSecretary of the Treasury, and to the same tenor and effect as national-bank notesnow provided by law. They shall be issued and redeemed under the same terms andconditions as national-bank notes except that they shall not be limited to theamount of the capital stock of the Federal reserve bank issuing them.Upon application of any Federal reserve bank, approved by the Federal ReserveBoard, the Secretary of the Treasury may issue, in exchange for United Statestwo per centum gold bonds bearing the circulation privilege, but against which nocirculation is outstanding, one-year gold notes of the United States without thecirculation privilege, to an amount not to exceed one-half of the two per centumbonds so tendered for exchange, and thirty-year three per centum gold bondswithout the circulation privilege for the remainder of the two per centum bonds sotendered: Provided, That at the time of such exchange the Federal reserve bankobtaining such one-year gold notes shall enter into an obligation with the Secretaryof the Treasury binding itself to purchase from the United States for gold at thematurity of such one-year notes, an amount equal to those delivered in exchange forsuch bonds, if so requested by the Secretary, and at each maturity of one-year notesso purchased by such Federal reserve bank, to purchase from the United States suchan amount of one-year notes as the Secretary may tender to such bank, not toexceed the amount issued to such bank in the first instance, in exchange for the twoper centum United States gold bonds; said obligation to purchase at maturity suchnotes shall continue in force for a period not to exceed thirty years.For the purpose of making the exchange herein provided for, the Secretary ofthe Treasury is authorized to issue at par Treasury notes in coupon or registeredform as he may prescribe in denominations of one hundred dollars, or any multiplethereof, bearing interest at the rate of three per centum per annum, payablequarterly, such Treasury notes to be payable not more than one year from the dateof their issue in gold coin of the present standard value, and to be exempt as toprincipal and interest from the payment of all taxes and duties of the United Statesexcept as provided by this Act, as well as from taxes in any form by or under State,municipal, or local authorities. And for the same purpose, the Secretary isauthorized and empowered to issue United States gold bonds at par, bearing threeper centum interest payable thirty years from date of issue, such bonds to be of thesame general tenor and effect and to be issued under the same general terms andconditions as the United States three per centum bonds without the circulationprivilege now issued and outstanding.Upon application of any Federal reserve bank, approved by the Federal ReserveBoard, the Secretary may issue at par such three per centum bonds in exchange forthe one-year gold notes herein provided for.Bank reserves.Demand and time depositsconstrued.Reserves required for deposits.BANK RESERVES.SEC. 19. Demand deposits within the meaning of this Act shall comprise alldeposits payable within thirty days, and time deposits shall comprise all depositspayable after thirty days, and all savings accounts and certificates of deposit whichare subject to not less than thirty days' notice before payment.When the Secretary of the Treasury shall have officially announced, in suchmanner as he may elect, the establishment of a Federal reserve bank in any district,every subscribing member bank shall establish and maintain reserves as follows:179

Banks not in reserve or centralreserve cities.In reserve cities.Post, p. 691.In centra] reserve cities.Acceptance of eligible paper aspart of reserve.Post. p. 691.Reserves by State banks ortrust companies.Post, p. 691.(a) A bank not in a reserve or central reserve city as now or hereafter definedshall hold and maintain reserves equal to twelve per centum of the aggregateamount of its demand deposits and five per centum of its time deposits, as follows:In its vaults for a period of thirty-six months after said date five twelfths thereofand permanently thereafter four-twelfths.In the Federal reserve bank of its district, for a period of twelve months after saiddate, two-twelfths, and for each succeeding six months an additional one-twelfth,until five-twelfths have been so deposited, which shall be the amount permanentlyrequired.For a period of thirty-six months after said date the balance of the reserves maybe held in its own vaults, or in the Federal reserve bank, or in national banks inreserve or central reserve cities as now defined by law.After said thirty-six months' period said reserves, other than those hereinbeforerequired to be held in the vaults of the member bank and in the Federal reservebank, shall be held in the vaults of the member bank or in the Federal reserve bank,or in both, at the option of the member bank.(b) A bank in a reserve city, as now or hereafter defined, shall hold and maintainreserves equal to fifteen per centum of the aggregate amount of its demand depositsand five per centum of its time deposits, as follows:In its vaults for a period of thirty-six months after said date six-fifteenths thereof,and permanently thereafter five-fifteenths.In the Federal reserve bank of its district for a period of twelve months after thedate aforesaid at least three-fifteenths, and for each succeeding six months anadditional one-fifteenth, until six-fifteenths have been so deposited, which shall bethe amount permanently required.For a period of thirty-six months after said date the balance of the reserves maybe held in its own vaults, or in the Federal reserve bank, or in national banks inreserve or central reserve cities as now defined by law.After said thirty-six months' period all of said reserves, except those hereinbeforerequired to be held permanently in the vaults of the member bank and in theFederal reserve bank, shall be held in its vaults or in the Federal reserve bank, or inboth, at the option of the member bank.(c) A bank in a central reserve city, as now or hereafter defined, shall holdand maintain a reserve equal to eighteen per centum of the aggregate amount of itsdemand deposits and five per centum of its time deposits, as follows:In its vaults six-eighteenths thereof.In the Federal reserve bank seven-eighteenths.The balance of said reserves shall be held in its own vaults or in the Federalreserve bank, at its option.Any Federal reserve bank may receive from the member banks as reserves, notexceeding one-half of each installment, eligible paper as described in sectionfourteen properly indorsed and acceptable to the said reserve bank.If a State bank or trust company is required by the law of its State to keep itsreserves either in its own vaults or with another State bank or trust company, suchreserve deposits so kept in such State bank or trust company shall be construed,within the meaning of this section, as if they were reserve deposits in a nationalbank in a reserve or central reserve city for a period of three years after the180

Restriction on deposits, etc,by member banks.Use of reserves.Proviso.Restriction.Basis of reserves.Posi. p. 692.Alaskan and insular banksBanks in Philippine Islands.National bank redemptionfunds not to be part of reserve.Vol. 18. p. 123.Secretary of the Treasury shall have officially announced the establishment of aFederal reserve bank in the district in which such State bank or trust company issituate. Except as thus provided, no member bank shall keep on deposit with anynonmember bank a sum in excess of ten per centum of its own paid-up capital andsurplus. No member bank shall act as the medium or agent of a nonmember bank inapplying for or receiving discounts from a Federal reserve bank under theprovisions of this Act except by permission of the Federal Reserve Board.The reserve carried by a member bank with a Federal reserve bank may, underthe regulations and subject to such penalties as may be prescribed by the FederalReserve Board, be checked against and withdrawn by such member bank for thepurpose of meeting existing liabilities: Provided, however, That no bank shall at anytime make new loans or shall pay any dividends unless and until the total reserverequired by law is fully restored.In estimating the reserves required by this Act, the net balance of amounts dueto and from other banks shall be taken as the basis for ascertaining the depositsagainst which reserves shall be determined. Balances in reserve banks due tomember banks shall, to the extent herein provided, be counted as reserves.National banks located in Alaska or outside the continental United States mayremain nonmember banks, and shall in that event maintain reserves and complywith all the conditions now provided by law regulating them; or said banks, exceptin the Philippine Islands, may, with the consent of the Reserve Board, becomemember banks of any one of the reserve districts, and shall, in that event, take stock,maintain reserves, and be subject to all the other provisions of this Act.SEC. 20. So much of sections two and three of the Act of June twentieth,eighteen hundred and seventy-four, entitled "An Act fixing the amount of UnitedStates notes, providing for a redistribution of the national-bank currency, and forother purposes," as provides that the fund deposited by any national bankingassociation with the Treasurer of the United States for the redemption of its notesshall be counted as a part of its lawful reserve as provided in the Act aforesaid, ishereby repealed. And from and after the passage of this Act such fund of five percentum shall in no case be counted by any national banking association as a part ofits lawful reserve.Bank examinations.Examiners.R.S., sec.5240, p.1013,amended.Appointment, etc.Proviso.Acceptance of Stateexaminations.Authority, etc., of examiners.BANK EXAMINATIONS.SEC. 21. Section fifty-two hundred and forty, United States Revised Statutes,is amended to read as follows:The Comptroller of the Currency, with the approval of the Secretary of theTreasury, shall appoint examiners who shall examine every member bank at leasttwice in each calendar year and oftener if considered necessary: Provided,however, That the Federal Reserve Board may authorize examination by the Stateauthorities to be accepted in the case of State banks and trust companies and may atany time direct the holding of a special examination of State banks or trustcompanies that are stockholders in any Federal reserve bank. The examiner makingthe examination of any national bank, or of any other member bank, shall havepower to make a thorough examination of all the affairs of the bank and in doing sohe shall have power to administer oaths and to examine any of the officers andagents thereof under oath and shall make a full and detailed report of the conditionof said bank to the Comptroller of the Currency.The Federal Reserve Board, upon the recommendation of the Comptroller ofthe Currency, shall fix the salaries of all bank examiners and make report thereof toSalaries and expenses.181

Special examinations.Limit of other examinations.Examinations of reservebanks.Loans, etc., to examinersforbidden.Punishment for violating bybank official.Punishment for acceptance byexaminer.Restriction on service byexaminers.Receiving fees, etc., by bankofficials restricted.Unauthorized disclosures byexaminers forbidden.Punishment for violations.In effect in 60 days.Individual liability of nationalbank stockholders.Congress. The expense of the examinations herein provided for shall be assessed bythe Comptroller of the Currency upon the banks examined in proportion to assetsor resources held by the banks upon the dates of examination of the various banks.In addition to the examinations made arid conducted by the Comptroller of theCurrency, every Federal reserve bank may, with the approval of the Federal reserveagent or the Federal Reserve Board, provide for special examination of memberbanks within its district. The expense of such examinations shall be borne by thebank examined. Such examinations shall be so conducted as to inform the Federalreserve bank of the condition of its member banks and of the lines of credit whichare being extended by them. Every Federal reserve bank shall at all times furnish tothe Federal Reserve Board such information as may be demanded concerning thecondition of any member bank within the district of the said Federal reserve bank.No bank shall be subject to any visitatorial powers other than such as areauthorized by law, or vested in the courts of justice or such as shall be or shall havebeen exercised or directed by Congress, or by either House thereof or by anycommittee of Congress or of either House duly authorized.The Federal Reserve Board shall, at least once each year, order an examinationof each Federal reserve bank, and upon joint application of ten member banks theFederal Reserve Board shall order a special examination and report of the conditionof any Federal reserve bank.SEC. 22. No member bank or any officer, director, or employee thereof shallhereafter make any loan or grant any gratuity to any bank examiner. Any bankofficer, director, or employee violating this provision shall be deemed guilty of amisdemeanor and shall be imprisoned not exceeding one year or fined not morethan $5,000, or both; and may be fined a further sum equal to the money soloaned or gratuity given. Any examiner accepting a loan or gratuity from any bankexamined by him or from an officer, director, or employee thereof shall be deemedguilty of a misdemeanor and shall be imprisoned not exceeding one year or fined notmore than $5,000, or both; and may be fined a further sum equal to the money soloaned or gratuity given; and shall forever thereafter be disqualified from holdingoffice as a national-bank examiner. No national-bank examiner shall perform anyother service for compensation while holding such office for any bank or officer,director, or employee thereof.Other than the usual salary or director's fee paid to any officer, director, oremployee of a member bank and other than a reasonable fee paid by said bank tosuch officer, director, or employee for services rendered to such bank, no officer,director, employee, or attorney of a member bank shall be a beneficiary of orreceive, directly or indirectly, any fee, commission, gift, or other consideration foror in connection with any transaction or business of the bank. No examiner, publicor private, shall disclose the names of borrowers or the collateral for loans of amember bank to other than the proper officers of such bank without first havingobtained the express permission in writing from the Comptroller of the Currency, orfrom the board of directors of such bank, except when ordered to do so by a courtof competent jurisdiction, or by direction of the Congress of the United States, or ofeither House thereof, or any committee of Congress or of either House dulyauthorized. Any person violating any provision of this section shall be punished bya fine of not exceeding $5,000 or by imprisonment not exceeding one year, or both.Except as provided in existing laws, this provision shall not take effect until sixtydays after the passage of this Act.SEC. 23. The stockholders of every national banking association shall be heldindividually responsible for all contracts, debts, and engagements of such182

R.S. sec. 5151, p. 995,amended.Transferred stock.association, each to the amount of his stock therein, at the par value thereof inaddition to the amount invested in such stock. The stockholders in any nationalbanking association who shall have transferred their shares or registered the transferthereof within sixty days next before the date of the failure of such association tomeet its obligations, or with knowledge of such impending failure, shall be liable tothe same extent as if they had made no such transfer, to the extent that thesubsequent transferee fails to meet such liability; but this provision shall not beconstrued to affect in any way any recourse which such shareholders mightotherwise have against those in whose names such shares are registered at the timeof such failure.Loans on farm lands.National banks not in centralreserve cities may make.Limit.Permissible amounts.Extension of restrictions.Foreign branches.National banks may establish.Applications.Approval of Reserve Board.Information to be furnished,etc.Independent accounts to bekept.lnconsistant laws repealed.Proviso.Parity of United States moneymaintained.LOANS ON FARM LANDS.SEC. 24. Any national banking association not situated in a central reserve citymay make loans secured by improved and unencumbered farm land, situatedwithin its Federal reserve district, but no such loan shall be made for a longer timethan five years, nor for an amount exceeding fifty per centum of the actual valueof the property offered as security. Any such bank may make such loans in anaggregate sum equal to twenty-five per centum of its capital and surplus or toone-third of its time deposits and such banks may continue hereafter as heretoforeto receive time deposits and to pay interest on the same.The Federal Reserve Board shall have power from time to time to add to the listof cities in which national banks shall not be permitted to make loans secured uponreal estate in the manner described in this section.FOREIGN BRANCHES.SEC. 25. Any national banking association possessing a capital and surplus of$ 1,000,000 or more may file application with the Federal Reserve Board, upon suchconditions and under such regulations as may be prescribed by the said board, forthe purpose of securing authority to establish branches in foreign countries ordependencies of the United States for the furtherance of the foreign commerce ofthe United States, and to act, if required to do so, as fiscal agents of the UnitedStates. Such application shall specify, in addition to the name and capital of thebanking association filing it, the place or places where the banking operationsproposed are to be carried on, and the amount of capital set aside for the conduct ofits foreign business. The Federal Reserve Board shall have power to approve or toreject such application if, in its judgment, the amount of capital proposed to be setaside for the conduct of foreign business is inadequate, or if for other reasons thegranting of such application is deemed inexpedient.Every national banking association which shall receive authority to establishforeigh branches shall be required at all times to furnish information concerning thecondition of such branches to the Comptroller of the Currency upon demand, andthe Federal Reserve Board may order special examinations of the said foreignbranches at such time or times as it may deem best. Every such national bankingassociation shall conduct the accounts of each foreign branch independently of theaccounts of other foreign branches established by it and of its home office, and shallat the end of each fiscal period transfer to its general ledger the profit or lossaccruing at each branch as a separate item.SEC. 26. All provisions of law inconsistent with or superseded by any of theprovisions of this Act are to that extent and to that extent only hereby repealed:Provided, Nothing in this Act contained shall be construed to repeal the parityprovision or provisions contained in an Act approved March fourteenth, nineteenhundred, entitled "An Act to define and fix the standard of value, to maintain the183

Vol. 31, p. 45.Securing gold by UnitedStates.Retiring bonds and notes.National currency associations.Provisions for, extended loJune 30, 1915.Vol. 35, p. 546.Post, p. 682.R.S. sec. 5153, 5172, 5191,5214, pp. 996, 1000,1004, 1008,amended.Former provisions reenacted.Proviso.Tax on circulation.Vol. 35, p. 550, amended.Tax on notes secured otherthan by United States bonds,reduced.R.S., sec.5214, p.1008,amended.Reduction of capital ofnational banks.R.S.,sec. 5143, p. 994,amended.Approval by Federal ReserveBoard, etc., added.Invalidity of any clause, etc.,not to affect remainder of Act.Amendment, etc.parity of all forms of money issued or coined by the United States, to refund thepublic debt, and for other purposes," and the Secretary of the Treasury may for thepurpose of maintaining such parity and to strengthen the gold reserve, borrow goldon the security of United States bonds authorized by section two of the Act lastreferred to or for one-year gold notes bearing interest at a rate of not to exceedthree per centum per annum, or sell the same if necessary to obtain gold. When thefunds of the Treasury on hand justify, he may purchase and retire such outstandingbonds and notes.SEC. 27. The provisions of the Act of May thirtieth, nineteen hundred and eight,authorizing national currency associations, the issue of additional national-bankcirculation, and creating a National Monetary Commission, which expires bylimitation under the terms of such Act on the thirtieth day of June, nineteenhundred and fourteen, are hereby extended to June thirtieth, nineteen hundred andfifteen, and sections fifty-one hundred and fifty-three, fifty-one hundred andseventy-two, fifty-one hundred and ninety-one, and fifty-two hundred andfourteen of the Revised Statutes of the United States, which were amended by theAct of May thirtieth, nineteen hundred and eight, are hereby reenacted to readas such sections read prior to May thirtieth, nineteen hundred and eight, subject tosuch amendments or modifications as are prescribed in this Act: Provided, however,That section nine of the Act first referred to in this section is hereby amended soas to change the tax rates fixed in said Act by making the portion applicablethereto read as follows:National banking associations having circulating notes secured otherwise than bybonds of the United States, shall pay for the first three months a tax at the rate ofthree per centum per annum upon the average amount of such of their notes incirculation as are based upon the deposit of such securities, and afterwards anadditional tax rate of one-half of one per centum per annum for each month until atax of six per centum per annum is reached, and thereafter such tax of six percentum per annum upon the average amount of such notes.SEC. 28. Section fifty-one hundred and forty-three of the Revised Statutes ishereby amended and reenacted to read as follows: Any association formed underthis title may, by the vote of shareholders owning two-thirds of its capital stock,reduce its capital to any sum not below the amount required by this title toauthorize the formation of associations; but no such reduction shall be allowablewhich will reduce the capital of the association below the amount required for itsoutstanding circulation, nor shall any reduction be made until the amount ofthe proposed reduction has been reported to the Comptroller of the Currency andsuch reduction has been approved by the said Comptroller of the Currency and bythe Federal Reserve Board, or by the organization committee pending theorganization of the Federal Reserve Board.SEC. 29. If any clause, sentence, paragraph, or part of this Act shall for anyreason be adjudged by any court of competent jurisdiction to be invalid, suchjudgment shall not affect, impair, or invalidate the remainder of this Act, but shallbe confined in its operation to the clause, sentence, paragraph, or part thereofdirectly involved in the controversy in which such judgment shall have beenrendered.SEC. 30. The right to amend, alter, or repeal this Act is hereby expressly reserved.Approved, December 23, 1913.184

HOW THEY VOTEDCongressional Record - House, page 1464 December 22, 1913 (record vote - FederalReserve Act.)The question was taken; and there were—yeas 298, nays 60, not voting 76, as follows:YEAS—298.AbercrombieAdamsonAikenAnsberryAshbrookAswellBaileyBakerBaltzBarkleyBarnhartBartonBathrickBeakesBeall, Tex.Bell, Cal.Bell, Ga.BooherBorlandBowdleBremnerBrocksonBrodbeckBrown, N.Y.Brown, W.Va.BrucknerBrumbaughBryanBuchanan, 111.Buchanan, Tex.BulkleyBurgessBurke, S.Dak.BurnettByrnes, S.C.Byrns, Tenn.Candler, Miss.CantorCarawayCarewCarlinCarterCaseyChandler, N.Y.ChurchClancyClark, Fla.ClaypoolClaytonClineCoadyCollierConnelly, Kans.Connolly, IowaConryCooperCovingtonCoxCramtonCrispCrosserCullopCurryDaleDavenportDavisDeckerDeitrickDentDershemDickinsonDiesDifenderferDillonDixonDonohoeDonovanDoolingDoolittleDoremusDoughtonDupreEaganEdwardsEschEvansFaisonFalconerFarrFergussonFerrisFieldsFinleyFitzgeraldFitzHenryFlood, Va.Floyd, Ark.FosterFowlerFrancisFrearGardGarnerGarrett, Tenn.Garrett, Tex.GeorgeGilmoreGlassGodwin, N.C.GookeGoldfogleGordonGormanGouldenGraham, Ill-GrayGreggGriffinGudgerHamillHamlinHard wickHardyHarrisonHartHaugenHayHaydenHeflinHelgesenHelveringHensleyHillHollandHoustonHowardHughes, Ga.Hulings185HullHumphreys, Miss.IgoeJ ace wayJohnson, Ky.Johnson, S.C.KeatingKelley, Mich.Kelly, Pa.Kennedy, Conn.KentKettnerKey, OhioKiess, Pa.KindelKinkaid, Nebr.Kinkead, N.J.KirkpatrickKitchinKonopKorblyLaffertyLa FolletteLazaroLee, Ga.LenrootLesherLeverLevyLewis, Md.LiebLindquistLinthicumLloydLobeckLogueLonerganMcAndrewsMcClellanMcCoyMcDermottMcGillicuddyMcKellarMacDonaldMaguire, NebrMahan

Manahan Post Smith, J.M.C. ThacherMapes Quin Smith, Md. ThomasMetz Ragsdale Smith, Minn. Thompson, Okla.Miller Rainey Smith, Saml. W. Thomson, 111.Mitchell Raker Smith, Tex. TownsendMontague Rauch Sparkman TreadwayMorgan, La. Rayburn Stafford TribbleMorrison Reed Stanley TuttleMoss, W.Va. Reilly, Conn. Stedman UnderhillMurdock Reilly, Wis. Stephens, Cal. UnderwoodMurray, Mass. Riordan Stephens, Miss. WalkerMurray, Okla. Rothermel Stephens, Nebr. WalshNeeley, Kans. Rouse Stephens, Tex. WatkinsNeely, W.Va. Rubey Stevens, Minn. WatsonNelson Rucker Stevens, N.H. WeaverNolan, J.I. Rupley Stone WebbNorten Russell Stout WhaleyO'Brien Sabath Sumners WhitacreOglesby Saunders Sutherland WhiteO'Hair Scully Taggart WilliamsOldfield Seldomridge Talbott, Md. Wilson, Fla.O'Shaunessy Sharp Talcott, N.Y. Wilson, N.Y.Padgett Sherley Tavenner WingoPage, N.C. Sherwood Taylor, Ala. WoodruffPalmer Sims Taylor, Ark. Young, N.Dak.Park Sinnott Taylor, Colo. Young, Tex.Patten, N.Y. Sisson Taylor, N.Y. The SpeakerPeters, Mass. Sloan TemplePhelan Small Ten EyckNAYS-60Anderson Griest Langley Roberts, Mass.Austin Guernsey Lewis, Pa. RogersBartholdt Hamilton, Mich. Lindbergh ScottBrowne, Wis. Hamilton, N.Y. McGuire, Okla. SlempBrowning Hawley McLaughlin Smith, IdahoButler Hayes Mann SteenersonCallaway Hinds Mendell SwitzerDanforth Howell Moore TownerDyer Humphrey, Wash. Morgan, Okla. VareFrench Johnson, Utah Morin VolsteadGardner Johnson, Wash. Parker WallinGood Kahn Patton, Pa. WillisGreen, Iowa Keister Payne WinslowGreene, Mass. Kennedy, R.I. Platt WitherspoonGreene, Vt. Langham Prouty WoodsNOT VOTING—76.Adair Barchfield Burke, Pa. CaryAiney Bartlett Burke, Wis. CopleyAlexander Blackmon Calder CurleyAllen Borchers Campbell DriscollAnthony Britten Cantrill DunnAvis Broussard Carr Eagle186

Edmonds Helm McKenzie PorterElder Henry Madden PouEstopinal Hinebaugh Maher PowersFairchild Hobson Martin RichardsonFess Hoxworth Merritt Roberts, Nev.Fordney Hughes, W.Va. Moon SellsGallagher Jones Mossjnd. ShacklefordGerry Kennedy, Iowa Mott ShreveGillett Knowland, J.R. O'Leary SlaydenGittins Kreider Paige, Mass. Smith, NXGoodwin, Ark. Lee, Pa. Peters, Me. StringerGraham, Pa. L'Engle Peterson VaughanHammond Loft Plumley WaltersThe SPEAKER. The Clerk will call my name.The Clerk called the name of Mr. Clark of Missouri, and he voted in the affirmative.So the conference report was agreed to.Congressional Record - Senate, page 1488 December 23, 1913 (record vote - Federal Reserve Act)The roll call having been concluded, the result was announced—yeas 43, nays 25, as follows:YEAS-43.Ashurst Jones Owen Smith, Ariz.Bacon Kern Pittman Smith, Ga.Bankhead Lane Poindexter Smith, Md.Bryan Lea Pomerene Smith, S.C.Chamberlain Lewis Ransdell SwansonChilton Martin, Va. Reed ThomasGore Martine, N.J. Robinson ThompsonHitchcock Newlands Shafroth VardamanHollis Norris Sheppard WeeksJames O'Gorman Shively WilliamsJohnson Overman SimmonsNAYS—25.Borah Clapp McCumber SutherlandBradley Dillingham Nelson TownsendBrady Gallinger Page WarrenBrandegee Goff Perkins WorksBristow Gronna RootBurton Kenyon ShermanCatron La Follette SmootNOT VOTING-27.Burleigh du Pont McLean StephensonClark, Wyo. Fall Myers SterlingClarke, Ark. Fletcher Oliver StoneColt Hughes Penrose ThorntonCrawford Jackson Saulsbury TillmanCulberson Lippitt Shields WalshCummins Lodge Smith, Mich.So the report of the committee of conference was agreed to.President Woodrow Wilson signed the Federal Reserve Act immediately following itsadoption by the Senate, 23 December 1913.187

OTHER BOOKS, CASSETTES & PUBLICATIONSBOOKSEMERGING STRUGGLE FOR STATESOVEREIGNTYAn action-motivating book by ArchibaldE. Roberts.BIG (8/2 x 11) QUALITY BOOK.303 pages: illustrated, Documented,IndexedSOFTCOVER: $5.95HARDCOVER: $9.95Facts behind national emergency, plus atested, proven course of action to restorefiscal sanity and political responsibility inlocal, state and national affairs.Emerging Struggle for State Sovereigntywill confer upon you a unique authority.You will be informed on facts behind thenational emergency and learn there is asolution to the problem.You need not stand idle while others, forlack of knowledge, watch in helplessfrustration destruction of their family andproperty.VICTORY DENIEDBook Club Edition, 300 pages,paperback. Many official exhibits. List$1.00 ( + $1.00 postage & handling).By Archibald E. Roberts, Lt. Col., AUS,ret.Explains why America's soldier sons arecommitted to an unconscionable policy of"Perpetual War for Perpetual Peace." Anaward-winning book. Should be in everyschool and college library.THE REPUBLIC: DECLINE &FUTURE PROMISE: BIG 8/2 x 11Documented, Illustrated, Indexed.SOFTCOVER: $3.95HARDCOVER $5.95.By Archibald E. Roberts, Lt. Col., AUS,ret.Identifies financial and political forceswhich are reshaping America for TheThird Century.Reveals a plot to erect a corporate stateupon the ruins of the Republic; how a"power elite" seeks to overthrow the U.S.Constitution, seize control of privateproperty, and reduce Americans to thestatus of economic serfs on the land whichonce was theirs.PEACE: BY THE WONDERFULPEOPLE WHO BROUGHT YOUKOREA AND VIET NAMProfusely documented hardcover book.377 pages. List: $6.95.By Archibald E. Roberts, Lt. Col., AUS,ret.Examines "regionalism" andinterlocking subversion in governmentdepartments. Contains importantregionalism documents.THE ANATOMY OF A REVOLUTIONIndexed, 40 pages. List: $2.00By Archibald E. Roberts, Lt. Col., AUS,ret.Self-documented research study tracesorigins of world revolution from AdamWeishaupt to David Rockefeller. Vital tounderstanding forces underlying U.S.social, economic, and political convulsion.THE CRISIS OF FEDERALREGIONALISM: A SOLUTIONForty-page booklet, indexed, annotated.$1.00.An astounding, documented narrative ofthe origins, authors, and objectives of thefederal regional concept.CASSETTESIDAHO CHALLENGES FEDERALRESERVELive tape recording, testimony byArchibald Roberts, Lt. Col., AUS, ret.,Director, Committee to Restore theConstitution, before Idaho SenateCommittee on State Affairs. Your key tounlocking, "Secret Government ofMonetary Power": $5.00.SHOULD THE UNITED STATESPARTICIPATE IN AND ENCOURAGETHE DEVELOPMENT OF THEUNITED NATIONS ORGANIZATIONNew York debate: Rep. Ottinger/Col.Roberts Probes international deceit andUnited Nations as an instrumentality forglobal conquest: $5.00.REGIONAL BUREAUCRACYRare and historically important jointIndiana State Senate Judiciary and HouseGovernment Reorganization committees.Principal speakers: Norman Dodd, T.David Horton, Mrs. Betty Mills, Dr.Richard Blair, Mrs. Robert Houlihan andArchibald Roberts, on Senate Bill #100 andHouse Bill #1029 to void federalregionalism in Indiana. 90 min: S5.00.LAND CONTROL LAWS - DO THEYCANCEL YOUR PRIVATEPROPERTY RIGHTS?By Archibald E. Roberts, Lt. Col., AUS,Ret. 90 minute talk recorded before a liveaudience during a speaking tour in Illinois.(Question and answer period included.!$5.00.U.S. CONSTITUTION V.REGIONALISMTestimony by T. David Horton,Attorney, Indiana GovernmentalReorganization Committee: $5.00.REGIONAL GOVERNMENTCol. Roberts testimony, IndianaLegislative Study Committee: $5.00.VISUAL AIDSREGIONALISM ON TV, VideotapeCassette in Full Color. ProfessionalQuality - 29-minutes. Live interview withArchibald E. Roberts, Lt. Col., AUS, Ret.,Director, Committee to Restore theConstitution, on facts behind the nationalcrisis. Identifies core problem and explainssolution. Not a theory but a working planto halt the silent revolution of federalregionalism and land control.REGIONALISM! #1 COMMERCIALT.V.Price: $50.00. Available for publicservice broadcast on local televisionstations (3/4 in.).REGIONALISM! #2 HOME TVSYSTEMSPrice: $50.00. Video Cassette (VHS) forhome television. Same inteview with Col.Roberts manufactured for home televisionsystems.196

ABOUT THE AUTHORAn ex-paratrooper who served with the11th Airborne Division, the 187thAirborne Regimental Combat Team, the101st Airborne Division, and the 3rdInfantry Division as an ArmyInformation Officer.Wrote and directed the 24th InfrantryDivision, ""Pro-Blue" troop informationprogram which was the central issue inthe 1962 Senate "military muzzling"investigations. (Military Cold WarEducation and Speech Review Policies,Senate Committee on Armed Services,April 4-13, 1962).Successful litigant (1962-65) in aprecedent-setting law suit against theSecretary of the Army, Cyrus R. Vance,involving freedom of speech of militarypersonnel. Voluntarily retired in 1965after twenty-six years Army service.Archibald Edward Roberts, Lieutenant ColonelArmy of the United States, retired (c. 1961).Graduate of the Officer Candidate School, Commandand General Staff College, Armed Forces InformationSchool, Airborne School, and the Medical Field ServiceSchool.Enlisted 2 June 1939 at Denver, Colorado.Commissioned 19 December 1942 at Camp Pickett,Virginia. Assigned Pacific and European Theatres, WorldWar II, and Far East during the Korean Conflict.Author of the award-winning book,Victory Denied (1966), The Anatomy ofa Revolution (1968), Peace: By theWonderful People Who Brought YouKorea and Viet Nam (1972), TheRepublic: Decline and Future Promise(1975), The Crisis of Federal Regionalism:A Solution (1976), Emerging Struggle forState Sovereignty (1979), How toOrganize for Survival (1982), andhundreds of articles on The New WorldOrder and its U.S. manifestations: UnitedNations, Federal Regionalism, andFederal Reserve System. Robertspublishes a monthly bulletin withnational circulation and distribution tostate lawmakers, media and heads ofconservative organizations.197

Roberts has addressed joint sessions of theAlabama and Louisiana state legislatures. He hastestified before Congressional Committees andstate legislative committees on the issues of UnitedNations, Federal Reserve System, FederalRegionalism and Federal Lands (SagebrushRebellion), in Massachusetts, Florida, Georgia,Alabama, Ohio, Michigan, Indiana, Illinois,Wisconsin, Minnesota, Iowa, Missouri, Kansas,Nebraska, South Dakota, Colorado, New Mexico,Texas, Arizona, Nevada, Idaho, Oregon,Washington, Arkansas and Alaska. Statecampaigns for Life, Liberty and Property requiredrepeated appearances over a period of twenty-twoyears. Roberts has also testified before hundreds ofcounty commissions and has spoken beforeuncounted public meetings and seminars.In 1965 Colonel Roberts founded theCommittee to Restore the Constitution forpolitical research and public education. CRC,incorporated under Colorado non-profit statutesin 1970, supports a national network of countychapters and state coordinating committees.In 1975 Roberts was elected President,Foundation for Edcuation, Scholarship,Patriotism and Americanism, Inc. (established1960), a Texas-based, charitable, tax-exemptfoundation.Member of the "Rakkasans!" (187th AirborneRegimental Combat Team) Association, theReserve Officers Association, and Sons of theAmerican Revolution.Recipient: "Noteworthy American" 1978Historical Preservations of America; "LibertyAward" 1976 Congress of Freedom; "ColonelArch Roberts Week" 1974 City of Danville,Illinois; "Speaker of the Year" 1973 We, thePeople; "Medal of Merit" 1972 American Legion;"Man of the Year" 1971 Wisconsin Legislative &Research Committee; "Man of the Year" 1970Women for Constitutional Government; "LibertyAward" 1969 Congress of Freedom; "GoodCitizenship Medal" 1968 Sons of the AmericanRevolution; "Award of Merit" 1967 AmericanAcademy of Public Affairs.Listed: Marquis Who's Who, Who's Who in theWest; Gale Research Company, Authors in Print;Bowker Company, Authors in Print; AmericanBiographical Institute, Noteworthy Americans.Interested scholars may secure furtherinformation from The Roberts Collection,University of Oregon Library, Eugene, Oregon.198

WHAT OTHERS SAYABOUT THE MOST SECRET SCIENCE"The long journey which abolishes the FederalReserve System and will restore national fiscalintegrity must begin with a first step. I believe thatCommittee to Restore the Constitution action isthat first step."HON DAVID L. TOMLINSON,RepresentativeUtah State Legislature"Colonel Roberts efforts to establish an honestmoney system deserves the assistance of allAmericans who value the opportunity to live asfree men."STEPHEN A. ZARLENGA, PresidentBooks in Focus"THE MOST SECRET SCIENCE is anotherimportant building block in the defense of ourrights and liberties."HON JACK METCALF, SenatorWashington State Legislature"THE MOST SECRET SCIENCE is a valuablestep in the right direction - it is based on theConstitution and recognizes that our enemies usethe Hegelian Dialectic as their key weapon. Buy it.. . and use it. We still have time."DR. ANTONY C. SUTTON, Ph.D., Author"Introduction to the Order""We seem bent on losing our precious freedom viaour own inertia."HON D. LEE JONES, Former RepresentativeArizona State Legislature"Until the people of the United States understandthe strategy and tactics of the One Worlders, wecan never succeed in saving the Nation fromcommunist domination."JOHN K. SINGLAUB, Major GeneralUnited States Army, Retired"I feel there are facts that simply would not cometo my attention without your help."HON ORRIN G. HATCH, SenatorUnited States Congress"Our 'Day of Infamy' occured on December 23,1913 with the establishment of the FederalReserve Act which insures that even if the budgetis balanced, the Fed still holds a mortgage on ournation while we hold the bag."JOHNNY STEWART, PresidentFund to Restore an Educated Electorate"THE MOST SECRET SCIENCE is a book ofknowledge of the past to awaken the future.Colonel Roberts' explanation as to how the moneyproblem got where it is today, and the solution tocure this threat to freedom, is truely a beacon oflight."HON JOHN R. RARICK, Former MemberUnited States Congress"Every citizen should read and heed ColonelRoberts book, THE MOST SECRET SCIENCE,if we are to preserve our sovereign heritage. Amost effective weapon against economic tyranny."HON FRANK FINDLAY, RepresentativeIdaho State Legislature"Colonel Roberts' plan to restore interest-freemoney would slash the Federal deficit by $130billion annually, save the average U.S. family$2,400 a year in income taxes, and finance a newAmerican prosperity."HAL BRYAN, PublisherThe Hard Money Investor"The quickest way to learn what really makes theU.S. financial system tick and how you can helpimprove it is to read this eye-opener now . . .before it's too late."DON BALE, Jr., PresidentBale Publications"We feel that nothing can be accomplished in thiscountry until the racial situation is straightenedout. You have other solutions. Since there aremany roads to our salvation, we have three cheersfor anyone who is trying to get us out of themorass."HOWARD ALLEN, PublisherHoward Allen Enterprises, Inc.199

"Good history. Good analysis of the problem.Good recommendations. Buy it and pass itaround."DAVID E. RHOADS, PublisherThe Rhoads Conclusion"Here at last, is a positive action strategy to savethe Republic. But, it is a game plan for dedicatedparticipants. It is not a spectator sport."PEGGY POOR, PublisherThe Upright Ostrich"Only by firing the mind of the citizen to standforth and say 'Stop' to the unrushing tide ofcollectivist tyranny, will America ever be returnedto the ideals of individual freedom andresponsibility."JERROLD D. DICKSON, Editor/PresidentThe Dickson Letter"Abolition of the Federal Reserve System wouldbe a long step in the direction of sound money andcontrol of inflation."DR. AL OWEN, M.D., PublisherThe Newsletter Digest"THE MOST SECRET SCIENCE is a greatcontribution to patriotic knowledge - the only realweaponry Americans have."H.I.H. ALEKSEI ROMANOFFHeir to the All-Russian Imperial ThronePublisherDouble Eagle"Elimination of the Federal Reserve System isessential to the restoration of our once free andindependent constitutional Republic. The onlylogical, legal and constitutional solution to theproblem seems to depend upon the concertedaction of the respective state legislatures."DON BELL, PublisherThe Don Bell Report"Arch Roberts has produced an historical study ofthe Federal Reserve System that should be read byevery person alarmed by U.S. economic crisis.THE MOST SECRET SCIENCE shows what wecan do to resolve the 'inextinguishable nationaldebt' problem."ROBERT WHITE, PublisherFinancial Security Digest"As a long-time observer of the problem, I can saythat, if the Fed is to be defeated - a grass-rootsmovement will be needed. Such a movement isoutlined in the 'county-state' effort pioneered byColonel Roberts in his anti-regional governmentcampaigns of the 60's and 70's. His book, THEMOST SECRET SCIENCE, outlines how to getresults in our battle to repeal the Federal ReserveAct."LAWRENCE T. PATTERSON, PublisherL.T. Patterson Strategy Letter"Colonel Roberts' efforts to expose and neutralizethe mega-bankers deserves the support of everyperson in this country. His book, THE MOSTSECRET SCIENCE, can be a devastating weaponof truth in the hands of action patriots. ThankGod for the men and women who tackle theinternational colossus 'head on'."THE MOST REVERENDJAMES PARKER DEES, Presiding BishopThe Anglican Orthodox Church"It is our hope to see legislation enacted to removecontrol of the money supply away from thediscretion of the Federal Reserve Board back tothe pure market forces of the gold standard."LINDA R. BEVAN, EditorWorld Market Perspective Publishing Company"American citizens cannot enjoy economic orpolitical stability in the United States as long asanonymous private interests manipulate thevolume of money and the value of money to attaintheir secret goals."EUSTACE MULLINS, Author"The Secrets of the Federal Reserve""341 million ounces of the Nation's gold reserve(52%) could not have been removed from theUnited States bullion depositories during the11-year period 1958-1968 without the knowledgeand acquiescence of the Federal Reserve System."EDWARD DURELL, Author"Mr. President - Where Is Our Gold?""Nearly every dollar that is in circulation, whetherit be a Federal Reserve Note, a negotiableinstrument or the new 'plastic money,' is aninterest-bearing debt dollar."HON WAYNE STUMP, SenatorArizona State Legislature200

IN THE PRESENT CLIMATE OF ECONOMIC EMERGENCY . . . .it appears that the greatest stumbling block to acceptance of necessary datafor financial survival, and the conclusions which must be reached by theindividual, is the feeling of "unreality" which the truth holds for the very peoplewho seek it.The impending economic / political disaster is permitted its fantastic rate of growththrough no other factor as much as incredulity masked as apathy. The resulting inaction ofthe people is a powerful propellant to nihilistic doctrine.Knowledgeable response to crisis is, of course, more difficult than protest. But, protestalone will not defend your family, your money and your property. A vital first requirementfor financial survival in a hostile political environment is identification of the men, and thesystem, who direct the course of the Republic to oblivion and her people to an Orwelliantwilight zone.Now you can have the key to unlock the mystery of "the secret government ofmonetary power," and learn how to defend your money and property against theirconfiscatory stratagems.It is wasteful to wrestle with the convoluted, impersonal problems of the world. Morereal progress will be made in defense of freedom by concentrating your time and energyon economic issues affecting your resources and your family.THE MOST SECRET SCIENCE rips the veil of secrecy from the men and thesystem behind America's economic crisis, and —• Provides the necessary knowledge and plan of operations enabling you to harnesspowers of county and state governments to your financial survival.• Shows what Americans like you are doing to escape impending economic /political disaster.• Explains how sovereign states seek to oust international bankers from the nation'spocketbook.THE MOST SECRET SCIENCE makes you privy to the fruits of vasteconomic research, state legislature hearings, and court findings branding theFederal Reserve Act of 1913 "unconstitutional," and Federal Reserve banks"private corporations" which create money out of thin air and charge intereston it forever.