grem - the liberty amendment money trap (analysis of central banking)(1979)

Everyone actively engaged in the stock market keeps one eye on the Open Market Committee of the Federal Reserve Bank.. 16 List of Government Securities Dealers Reporting to the Market St

ABOUT THE AUTHOR:

June Grem is a native Chicagoan She received an A.B degree from Stanford University and has worked as an insurance underwriter, secretary, researcher and public speaker In 1971 she organized Enterprise Publications, Inc and has been its president since that time She is married to a physician and is the mother of four children She has been active in girl scout work, has received the Congress of Freedom award and is listed in the Dictionary of International Biography, Who's Who in the Midwest and Who's Who

of American Women Despite a busy schedule as a homemaker, she found time to become active in the stock market as a technical analyst and chartist It was through her knowledge of how the stock market operated that she became aware of the Federal Reserve Bank's role in our economy Everyone actively engaged in the stock market keeps one eye on the Open Market Committee of the Federal Reserve Bank It is through their manipulations of interest and discount rates, as well as stock margin requirements, that the market

is moved up or down, thus ultimately affecting the financial and economic fortunes of our entire nation

A more penetrating analysis of the forces which control the market led to an investigation of our money system The results revealed a sinister, well-organized and almost unknown plot to gain control of the entire world through the issuance and control of money These operations have been shrouded in such, secrecy that very few people either know or suspect that the same forces which control our money, stock market and economy also control the world-wide revolutionary movement

It is hoped that when people gain an understanding of this vitally important subject of money issuance and control, an informed citizenry will take the necessary steps to reconstruct society on the basis of reason, constitutional law and peace and prosperity for all of our citizens If America is to survive as a free nation, we must resist all attempts to throw us into a world monetary system

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Dedication

To Mr Peter Cook Who is, as yet, unrecognized by many as one of the greatest living

monetary analysts of our times

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CONTENTS

Chapter Page

Foreword ix

I THE LIBERTY AMENDMENT 1

The Liberty Amendment 5

Section I Promises to get Government out of Business 5

II DOES THE UNITED STATES GOVERNMENT OWN THE FEDERAL RESERVE BANKS? 7

Department of the Treasury 7

What Would Getting the Government Out Of The Banking Business Mean to You? 9

Operations of the Federal Reserve System 12

This Part of the Earnings Picture is not Generally Known to the Public 13

The Board of Governors 16

List of Government Securities Dealers Reporting to the Market Statistics Division of the Federal Reserve Bank of New York 17 The Open Market Committee 19

III A REVIEW OF SECTION II OF THE LIBERTY AMENDMENT 22

IV A REVIEW OF SECTION III OF THE LIBERTY AMENDMENT 23

Text of H.R 17140 23

V JERRY VOORHIS AND HIS MONEY BILLS 26

VI COMPANION LEGISLATION 29

VII A BRIEF ANALYSIS OF THE MONEY BILLS 30

No Constitutional Amendment is Necessary 32

About the Income Tax 35

VIII THE NEW MONEY SYSTEM 47

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Constitutional Money Bill 47

How Will the New Money System Work? 51

Foreign Investments in the United States 55

United States Government Financing 56

How Would the Government Finance its Own Activities? 57

IX PROGRAM FOR SURVIVAL 61

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F O R E W O R D Everybody hates taxes, but throughout history death and taxes have both been accepted as inevitable However, when taxes approach the confiscatory level there is bound to be opposition And

so it was in California When Proposition 13, which limited taxes on property was passed overwhelmingly, everybody in the country hailed this great victory At last the voice of the people had been heard loud and clear and the politicians "got the message." Would any politician dare to oppose tax reduction or the Liberty Amendment, which would phase out the income tax and compel the federal government to cease competing with private enterprise, especially in the face of an imminent nationwide tax revolt? The Liberty Amendment provides that during a three year period, all business enterprises not specified by the Constitution would be sold back to the public At the end of this time the 16th (Income Tax) Amendment would stand repealed We wonder who, except the big banks, could afford to buy these money-losing government enterprises We also wonder what other activities the Insiders have planned for the interim three year period, should the Liberty Amendment be adopted

Tax reduction and limitation ideas have begun to mushroom in other states and even now, before Congress there is a bill in committee to abolish the income tax This is House Joint Resolution

23, or the Liberty Amendment

The big question: Is all this a victory or defeat? We must be wary of the sly maneuvers of the establishment and ask ourselves whether or not the whole fanfare regarding Proposition 13 was planned by the Insiders or was it a spontaneous rebellion by the people The overwhelming majority of the people involved were concerned with just one thing Reducing the taxes on their homes which had become so oppressive that many people were obliged to give them up These people were honest, ordinary citizen tax-payers who believed that this was THE METHOD of finally controlling wild government spending It was also an expression of rebellion against bureaucratic intrusions in their lives

Howard Jarvis, the man who masterminded Proposition 13,

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has become a national hero His associate, Paul Gann, is travelling around the country urging the support of a Constitutional Convention which is designed to put a "new constitution" into effect

We wonder if this constitution (or non-constitution) is the one that has been prepared by the Center for the Study of Democratic Institutions, a misnomer if there ever was one They are located at P.O Box 4068, Santa Barbara, Ca 93103, Phone: (805) 969-3281 The Center formerly had offices in New York City and Chicago which have now been closed Presumably their preliminary work has been completed

The Center for the Study of Democratic Institutions has been funded by foundation money and has been working on this Soviet-style "constitution" for years It will effectively cancel all our liberties and transfer total power to government The "new constitution" or non-constitution, would divide the present regions (formerly states) into "republics." The only source of revenue mentioned in the Center's non-constitution is from corporate and individual incomes No mention is made of a money system, but it is presumed that the present debt-money system will be retained What banker or Insider would give up this wonderful plunder! If the Liberty Amendment is passed, the Constitutional Convention will have provided us with a new form of income tax through the Center's non-constitution, which will, no doubt, take effect as soon

as it is passed This will render our present Constitution valueless and of no effect Hence, passage of the Liberty Amendment would also be meaningless It would, however, divert attention from the Insiders' gear shifting into new and better forms of individual and corporate tax theft and plunder Could the Liberty Amendment be the bait for the calling of a constitutional convention?

Another little noticed effect from the passage of Proposition 13

is that the politicians in California haven't taken it lying down The people of California have unknowingly implemented regional government by relinquishing control over their locally-elected tax assessors and other local officials Their wrath should have been righteously turned against the local assessors and tax collectors Now this power is gone It has been

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moved up to the state which is busily adjusting its budget to allocate the dole of public money to local governments so that they can continue their profligate spending programs This will effectively control spending and shut out local communities from any say in the matter Also, it is part and parcel of the Federal program of regionalism which will put the states more readily under the thumb

of big brother in Washington

The way to attack high taxes, whether on individual incomes, corporations, estates or property, is not through any means provided for by the tricksters who have fooled us far too many times There is only one sensible way to relieve the American people of the outrageous taxes under which this nation is suffering AND THAT

IS REFORM OF THE MONEY SYSTEM In the pages ahead, the reader will be given insights into the true nature of the Liberty Amendment and its real purposes During the next few financially chaotic years, no doubt a few "money reform bills" will be trotted out These are discussed in the text of the book A sample of a true money reform bill is also given LET THE VOTER BEWARE The Insiders are too close to victory to stop now Since they have achieved everthing so far by lies, trickery and fraud, why expect anything different from them now?

Do not support the Center's non-constitution or any Constitutional Convention Make it plain to your senators and representatives that you KNOW what it is all about and if they are

"in the bankers' pocket" and go along with the non-constitution, throw them out of office But we must have facts Since truth and facts are the last thing we can expect from the media we must turn to other sources

Those who have supported the Liberty Amendment for years should not be angry at this author I, too, at one time, supported it until I began to study the meaning behind its seemingly innocuous phrases and the inconsistencies of some of the statements made by its proponents We all want to get rid of the income tax, and stridently limit all others But, let's do it the right way Let's do it by establishing a truly honest money system in which all the people will benefit It can be done or we will be thrown into the chaos and slavery of a world government in which a plastic credit card will be your money

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All of your property will be confiscated (stolen) by the money trust

to pay off their fraudulent debt WAKE UP AMERICA It's time to stop believing lies and being taken in by propaganda Study the money issue Be aware of what an honest money system is and what

it could do for you and your country THEN WORK FOR THE TRUE REFORM OF OUR MONEY SYSTEM When we have a Constitutional and honest money system, the income tax will wither away and be uncollectible We must not be diverted by diversionary tactics THE PRIMARY ISSUE IS MONEY ISSUANCE BY PRIVATE BANKS, AND THE FEDERAL RESERVE SYSTEM The fight should be in this area If we understand the money issue and begin our fight now, WE CAN WIN!

June Grem

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Chapter I THE LIBERTY AMENDMENT

"Words are the most powerful drug used by mankind"

Rudyard Kipling Twentieth century America has been besieged by an almost continuous flow of crippling and disastrous legislation Although the death of our nation has been well planned, the executioners were not organized enough until 1913 to get their Marxist central bank and graduated income tax enacted into law For decades thereafter, the Federal Reserve Bank was ignored and the income tax was accepted

by a docile and law-abiding people It was only when the gradualism began to escalate to the point of confiscation that ominous rumblings against the income tax began to develop

Because of mounting dissatisfaction with this burdensome legislation, it was natural for people to turn to any organization or plan which promised to reduce or eliminate the merciless plunder of America's most productive citizens, the working and middle classes The Liberty Amendment seemed tailor made to do the job Not only would the income tax be abolished by Constitutional Amendment, but, as an added bonanza, it promised to get government out of any business not specifically mentioned in the Constitution Everyone who abhors the chaos, confusion and regulatory horrors wrought by government meddling would most certainly welcome its exodus from our lives, both personal and corporate

The Liberty Amendment Committee was founded in Los Angeles in 1944 by Mr Willis Stone and several other men who met

to discuss the Sewell Avery Case.1 These men were concerned with the continual invasion by government into the

1

Sewell Avery was the Board Chairman of Montgomery Ward & Co who had been physically removed from his office by United States soldiers

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lives of citizens and wanted to form an organization which would combat these evils Thus the Liberty Amendment Committee was formed The Liberty Amendment Committee was formerly located at

8413 Franklin Avenue, Los Angeles, Ca 90028, and Mr Stone was its chairman until 1976 when he retired Since his retirement, he has continued to tour the country in speaking engagements on behalf of the Liberty Amendment

After Mr Stone's retirement, headquarters were moved to Provo, Utah, and Mr W Cleon Skousen headed up the organization until January of 1979 The Liberty Amendment Committee is now located

in El Cajon, Ca., 92021, P.O Box 2386, (714) 442-8045 and tax fighter Armin Moths is the new chairman The Liberty Analysis Committee (its research arm) is still in Provo, Utah, at 839 No 700 East, 84601 Their phone number is (801) 374-1800

How did the Liberty Amendment Committee plan to eliminate the income tax, the sacred darling of the Marxist banking crowd; their primary weapon for the theft of the wealth produced by others? Its plan was to establish a nationwide organization which would distribute literature, inform citizens of the appaling waste in government, and urge disgruntled taxpayers to put pressure on state legislatures to repeal the income tax via the Constitutional Amendment route

During the years since its founding it has built an impressive organization with local committees in thousands of communities through the country It has a speakers bureau, and a diversified list of books and publications, as well as film strips, records and cassettes The bi-monthly magazine FREEDOM has been replaces by occasional issues of REPORT ON FREEDOM

Article V provides that the Constitution may be amended as follows If two thirds of both Houses of Congress approve an amendment, it will then be submitted to the States The amendment will become law if three quarters of the states so approve Or, two thirds of the states may call a convention for the purpose of proposing amendments, which would then become law if three quarters of the states ratified the amendment, after having been submitted to them by Congress The second type of amendment is initiated by the states, the

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first by Congress

The Liberty Amendment Committee chose the second method When two thirds of the states approve this legislation, it would be submitted to Congress for the calling of a Constitutional Convention (Could this be a tie in with the present proposed Constitution Convention?) Congress would then submit the proposal to all fifty states If three quarters of them vote in favor of the measure, it becomes law Remember, approval by a state does not constitute ratification Thus far, after over thirty years, only seven states have approved the Liberty Amendment This is a cumbersome, time consuming and round about way of attacking the menacing problem

of our Marxist money system, of which the income tax is merely one manifestation Even now, with the income tax as a number one on people's hate parade, it is doubtful if many states will approve the plan because it has four separate sections This type of "packaged" legislation must be adopted in toto exactly as it is worded For this reason alone, it might be difficult to get the required number of states to approve this legislation The Liberty Amendment has suddenly popped up in Congress under House Joint Resolution No

23 All this has transpired in conjunction with the passage of Proposition 13 in California The California referendum declared that the tax on the land would not rise more than 1% per year of the Assessment of the properties

The Jarvis Amendment also requires a 2/3 vote of the legislature

to increase sales taxes, income taxes or any other taxes This is fine unless the California legislature is filled with spendthrift Socialist meddlers The question is, were the people of California tricked? The assessors could always increase the municipal assessment of property It would have been better to have completely abolished the land tax This could easily be accomplished under a legal and ethical money system People should rebel against the banking system and demand financing without taxes instead of financing with taxes through the fake credit creation of the banks

We must also remember that nowhere in the Constitution is the Federal Government authorzied to engage in its multi-faceted Socialist, anti-business and anti-people activities

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These programs are already unconstitutional and illegal Since the law-defying Congress has been busily ignoring and flaunting the Constitution for decades, why would another Constitutional amendment change their attitudes? This situation will continue unabated until grass roots America finally becomes enraged enough

to oust the lawbreakers from government and replace them with people who will represent the interests of this nation and not alien and special-interest groups

Since there is an easier and more effective way to get the income tax repealed, why hasn't it been utilized? The most effective method would be to have ONE STATE DECLARE THE 16th AMENDMENT ILLEGALLY RATIFIED The Supreme Court would then have to rule on the question While we might not expect too much from the bar association types enthroned in their privileged sanctuary, it would put them on the spot and force a decision one way or another It would also focus a great deal of attention on this matter and force many a fence-straddling politician to take a definitive stand on the issue Ohio was not legally a state in 1913, therefore the 16th Amendment failed to meet the requirements of having 36 states ratify the Amendment The politicians in Ohio who railroaded its 1802 Constitution through, never submitted it to the people for ratification This, too, violated the provision guaranteeing that all states will have a republican form of government Congress attempted to write a finale, to this outrageous situation by passing a Joint Resolution for admitting the State of Ohio into the Union on August 7, 1953 This Joint Resolution is Public Law 204 and is found in 67 U.S Statutes at Large, page 407 The Joint Resolution further provided that "it shall take effect as of March 1, 1803" (or

150 years retroactively) Art I, Sec 9 prohibits the passing of retroactive laws It would be interesting to observe the methods used

by the Supreme Court to wriggle their way out of this one

Liberty Amendment supporters have spent thousands of dollars and thousands of hours working for the adoption of this legislation According to the Liberty Amendment Committee: "Over 6,000 organizations have passed resolutions of support These include service clubs, patriotic organizations, political clubs, labor unions,

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trade associations, medical associations and others." At this point perhaps we should ask whether or not its passage would accomplish what its supporters expected, or have they been kept busy "spinning their wheels" working for legislation which has little likelihood of becoming law, and which, if passed, would not achieve the hoped-for results Examine the facts and make up your own mind

THE LIBERTY AMENDMENT

Sec.I: The Government of the United States shall not engage in any business, professional, commercial, financial or industrial enterprise except as specified in the Constitution

Sec.II: The Constitution or laws of any state, or the laws of the United States shall not be subject to the terms of any foreign or domestic agreement which would abrogate this amendment

Sec.III: The activities of the United States Government which violate the intent and purpose of this amendment shall, within a period of three years from the date of the ratification of this amendment, be liquidated and the properties and facilities affected shall be sold

Sec.IV: Three years after the ratification of the amendment the sixteenth article of amendments to the Constitution of the United States shall stand repealed and thereafter Congress shall not levy taxes on personal property, estates and/or gifts

SECTION I PROMISES TO GET GOVERNMENT OUT OF

BUSINESS Almost everybody, except the Socialist busybodies and people-hating leftists would agree with this premise Wherever government exists we find the ghastly evidence of bungling, corruption, monumental waste, favoritism, political tyranny and plunder Certainly "our government" has proved itself to be the dedicated enemy of majority America, and has shown itself

1

Your Introduction to the Liberty Amendment, by the Liberty Amendment Committee of the U.S.A., 6413 Franklin Ave., Los Angeles, CA 90028

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over and over again to be the least qualified institution on earth to run anything properly — even itself Before we streak off to support another piece of legislation, however, let us make sure that we know exactly what it is proposing We have been fooled too many times If government is to be gotten out of business, what business is meant? The Constitution never specified that the government could engage

in any business, therefore, should we conlcude that the getting out of business refers to "the banking business" or, as the Liberty Amendment puts it, "financial enterprise." This is a very important point It is probably the key to the entire matter

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Chapter II DOES THE UNITED STATES GOVERNMENT OWN THE

FEDERAL RESERVE BANKS?

One of the cardinal tenets of the Liberty Amendment Committee

is that the Federal Reserve System is government owned and operated and that the Treasury Department receives more than "98%

of the profit" (plunder) To substantiate their argument that the Fed

is a part of the government, listing in the United States Organization Manual is cited Reference is also made to figures in the Treasury Bulletin regarding some receipts of money from the Federal Reserve System

First of all, listing in the United State Organization Manual is no indication of government ownership Such organizations as the World Bank, IDA (International Development Association), a World Bank Affiliate, IMF, Organization of American States and the UN, just to mention a few, are also listed The United States acquired

"membership" (underwriting privileges) in these organizations through treaties In fact, the UN is listed as an "international organization." Furthermore, in a chart outlining the Treasury Department, the Federal Reserve System is not even shown

DEPARTMENT OF THE TREASURY1

Here is other evidence showing that the Federal Reserve System

is not government owned

1 Employees of the Federal Reserve System are not under Civil Service.2

2 Employees have their own pension system: The Thrift Plan 80%

of the money is invested with the Equitable Life

1

United States Government Manual, 1975-1976 edition, p 394

2 U.S Statistical Abstract, 1970 ed., page 396, and Title 5, Gvt Organization & Employees, Sec 5314

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Assurance Society and the remaining 20% with Prudential Life Insurance Company and the Morgan Guarantee and Trust Company.1

3 The Federal Reserve Banks have been exempted from payment

of income taxes by legislative action (Government Departments do not pay income taxes.)2

4 The Government Corporation Control Act of 1945 exempted the Federal Reserve System from audit (All government agencies are audited annually by the General Accounting Office.)

5 Federal Reserve Banks pay their own employees and executives with their own checks

6 Reserve Banks use stamps and postage in their mailings U.S Government departments mail postage free

7 Federal Reserve Banks and branches pay real estate taxes U.S Government departments and agencies do not

Perhaps the words of the late, great Hon Louis T McFadden best describe the situation: In his Collective Speeches to Congress,

he said: "The Federal Reserve is a government created private corporation It is a quasi-government agency in which the President appoints the directors of the Board of Governors, but the Bank pays their salaries The Government has NO CONTROL over the Fed." While the President may appoint the head of the Board of Governors, he has no power to remove him The Federal Reserve Bank has been called the fiscal agent of the

1

Hearings before the Committee on Banking and Currency, House of Representatives: To provide for an Audit of the Federal Reserve System by the General Accounting Office, H.R 10265, 93rd Congress, Oct 2 and 3, 1973, p 99 2

U.S Code, Title 12, Sec 531

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government The exact opposite is the more correct view The government is the fiscal agent of the Federal Reserve Banking empire and is totally under the control of the Bankers, both national and international

Why does the Liberty Amendment Committee so vehemently contend that the Federal Reserve System is part of the United States Government despite overwhelming evidence to the contrary? The answer is that if they admitted that this octopus were a private banking monopoly which has been illegally granted the privilege of creating the nation's money and credit, they "couldn't get government out of the banking business." AND THIS IS THE CRUX OF THE ENTIRE MATTER It is the real, but never mentioned, reason for the existence of the entire movement To

"remove government" from the banking business would involve the payment of billions of dollars in illegal gains to these banking shylocks They would just "change hats" and move into the Treasury Department Nothing would change except titles BUT, they would have total and complete power over the nation's financial institutions now and Congress would have lost its last chance to REVOKE, RESCIND, AND REPEAL the outrageous Federal Reserve Act An example is England The only redress the people now have against the Bank of England is revolution

WHAT WOULD GETTING THE GOVERNMENT OUT OF THE

BANKING BUSINESS MEAN TO YOU?

First and foremost, THE GOVERNMENT IS NOT IN THE BANKING BUSINESS, so how can it be "gotten out of" something

it is not in? Does the government's printing of Federal Reserve notes for the Federal Reserve Bank constitute "being in the banking business?" Of course not! Also, if the government were to "buy back" the stock of the Federal Reserve Banks, would this constitute engaging in the banking business? Who are the stockholders and where is the stock? Nobody seems to know

The sovereign right of a nation to issue its own money and credit must never be regarded as a banking function The truth is that the banks have usurped this sovereign power because of

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stupidity, legislative laxity, corruption and treason Passage of the Liberty Amendment would remove what few rights Congress still has over the Federal Reserve System, which, at this point, is ONLY THE RIGHT OF REPEAL The whole Liberty Amendment scheme

is a hoax to further entrap Americans so that the final noose of enslavement might be twisted around our ever-trusting necks

We must not overlook the generous support Congress has given

to such other international, non-government financial institutions as the World Bank, IMF, Inter-American Development Bank, Asian Development Bank, plus a host of other financial institutions Does

"getting the government out of the banking business" mean a cessation of all appropriations to these supra-national financial empires? We wish to that extend it would But this is not what is meant by this deceptive phrase United States relationship to these institutions is of a contributory nature only The management is totally international and even those officials who may hold United States citizenship are, in reality, world citizens They pay no income taxes, travel on diplomatic passports and the United States Government has absolutely no right of management or control over these institutions or individuals It cannot enter the premises of these banks, even when located within the limits of this nation, to serve suppoenas, audit its books, arrest executives or employees or exercise any other type of control Obviously the United States is not

"in the banking business" in any sense of the word in its relationship

to these financial institutions

Many supporters of the Liberty Amendment may not be aware of the historic nature of the controversy regarding the government's alleged involvement or non-involvement in the banking business Opponents of honest, Constitutional money have always taken the position that the Constitution never gave the government any authority to issue money, but only to "coin money." This is a ridiculous and absurd position The coinage of a nation always represents but a fraction of the total amount of money and credit To coin money is a phrase which includes the right to emit not only coins but paper money and bonds If the bankers really meant what they say about the

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"coinage" of money pertaining exclusively to dimes, quarters, etc., watch them scream if their illicit power to deal in the credit aspect of money were suddenly taken away from them The nation's wealth is produced by the people and not by the banks The government should create the medium of exchange so that the creators of wealth (productive citizens) may exchange their goods and services without incurring debts to private banks

The controversy regarding the government's involvement in the banking business is as pertinent in 1979 as it was in 1876 For example, Mr Horace White, a banker apologist of that period, in his book, Money and Banking, wrote that he was opposed to the Government being in the Banking business, and was opposed to having the Government create Treasury Notes unless based on the gold which was controlled by the Wall Street International Bankers.1Since the Liberty Amendment Committee contends that the government is in the banking business and that it must be ousted from these activities, it points to certain figures published in the Treasury Bulletin showing the income received by the Federal Government from the Reserve System Liberty Amendment apologists also contend that the government pockets over 98% of the earnings of the entire Reserve System We should be entitled to know if this is true or not

In order to understand these Figures, we must be aware of just what this income represents The amounts in question indicate the interest earned from the U.S Treasury notes and agency bonds which are held by the various Reserve Banks throughout the country After deducting all their expenses, the remainder is returned to the Treasury Department Always bear in mind that these banks do not pay face value, or even a discounted price for securities pruchased, but obtain them for pennies by simply "paying for them" with their own bank-created funds It is the power to create credit against miniscule fractional reserves which commercial and Reserve banks employ that is the primary cause of inflation and the debauching of our currency How would you like to buy a

1

Andrae B Nordskog, Spiking the Gold (Los Angeles, Ca., Gridiron Publishing Co., 1932)

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couple of billion dollars worth of bonds (or goods and services) for just the cost of printing?

OPERATIONS OF THE FEDERAL RESERVE SYSTEM

The operations of the Federal Reserve System may be divided as follows:

a) The Federal Reserve System: includes the 12 Federal Reserve banks and their branches scattered throughout the country.1

b) The Board of Governors

c) The Open Market Committee

In 1972 the amount returned to the Treasury from this source was about $3.8 billion It rose to $4.3 billion in 1973 Remember that even these billions are pitifully small in comparison to the current $47 billion interest tab now paid on the national debt alone This fraudulent government debt of $47 billion has been created because of the existence of our debt-money system under which the government borrows all of its money and credit from this illegally-constituted banking monopoly The cheeks issued to the U.S Treasury by the Fed are merely bookkeeping creations by them and represent no funds, but credits created out of thin air

"Federal Reserve Bank credit, therefore, as already stated, does not consist of funds that the Reserve authorities "get" somewhere in order to lend, but constitute funds that thev are EMPOWERED TO CREATE."2 (Emphasis added)

1

"The Federal Reserve System derives income from interest received from its government bond portfolio Monies not spent from this income are returned to the Treasury." (Hearings Before the Committee on Banking and Currency, ibid., page 85)

2

The Federal Reserve System, Its Purpose and Functions, published by the Board of Governors of the Federal Reserve System, Washington, D.C., 1939, page 85

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You will never find the following information in the literature of the Liberty Amendment Committee:

"The Federal Reserve doesn't 'get the money, it creates it.' When the Federal Reserve writes a check, it is creating money This can result

in an increase in bank reserves — a demand deposit — or in cash; if the customer prefers cash, he can demand Federal Reserve Notes, and the Federal Reserve will have the total money-making machine

It can issue money or checks And it never has a problem of making its checks good because it can obtain the $5 and $10 bills necessary

to cover its checks simply by asking the Treasury Department's Bureau of Engraving to print them."1 (Emphasis added)

THIS IMPORTANT PART OF THE EARNINGS PICTURE IS NOT

GENERALLY KNOWN TO THE PUBLIC

If the Treasury Bulletin reports of the budget receipts from the Federal Reserve System were their only source of income, why would even a reluctant Banking Committee hold hearings for an adult? The truth is that over 95% of the tax-free earnings of the Reserve System are never reported Never let it be thought that this banking cartel has overlooked a single item in corralling funds from every imaginable source Its sources of income include the following:

1 Interest and fees from loans

2 Income from purchase and sales of Federal funds

3 Interest and dividends from securities

a U.S Treasury securities

b Other U.S Govt securities (agencies and corpo-

1 Subcommittee on Domestic Finance Committee on Banking and Currency House

of Representatives 88th Congress, 2nd Session, Sept 21, 1964

2

Federal Reserve Bulletin, Board of Governors, Washington, D.C 20551, 21, 1964

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rations)

4 Obligations of States and political subdivisions

5 Trust department income

6 Other charges, fees, etc

Remember that by law all Federal Reserve Notes are obligations

of the Federal Government When the Treasury Department receives

an order to print up say $50,000.00 worth of paper "money", we can summarize the transaction as follows:

The Treasury has received the $50,000.00 cash, whereas the Federal Reserve has received and will receive on a 30 year bond the following:

$50,000.00 from the Bureau of Engraving

$50,000.00 from the Treasury when the bond matures

$60,000.00 interest on the bond

$2,700,000.00 on loans to John Q Public

$2,860,000.00 total.2

(Computed at 5% interest As interest rates go up, so do profits.)

No other profit machine like this ever existed in the history of our planet

The U.S Government bonds held by the Federal Reserve Bank went from $16,000,000 in 1914 to $107,148,000,000 in 1977 Many

of these bonds have been paid but have been "rolled over" and still collect interest The billions earned from its bond portfolio constitute only a fraction of their total tax-free income Other sources include their overseas trans-actions The latest figure available constituted

Wicliffe B Vennard, Sr., The Solution to the Federal Reserve Fraud,

Hawthorne, Ca., Omni Publications, 1968, p.4

3

1914-1938, Historical Statistics of the United States from Colonial Times, Washington, D.C., Dept of Commerce, Bureau of Census 1939-1977: Economic Report of the President, January 1978 Washington, D.C, U.S Government Printing Office

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worth of transactions by wire." The so-called balance o payments is

in reality "a form of credit that is extended"2 by central banks and manipulated by them in violation of the Constitution The wire transactions include not only central banks but commercial multi-national banks as well Of course, this figure does not represent pure profit, but total transactions But the volume alone indicates that huge amounts of money were made out of these transactions

Until we rid ourselves of this private money monster and its fellow vampire commercial banks, our nation will continue to flounder in a monetary mess It is up to the citizens to inform themselves of the facts and correct them before we are drawn into the next step of the monetary noose which is being prepared for us

— a credit card system and then a world monetary unit THIS MUST BE AVOIDED AT ALL COSTS And don't forget possible devaluation of the dollar by giving you, the sucker, one new dollar for every ten or twenty Federal Reserve Notes (or bank credits) you now have The same scenario has been repeated by the Socialist-Communist bankers in many countries Now its our turn It can only

be prevented if enough aroused Americans can regain control over those who supposedly represent us and vote in a Constitutional money system

"If all the bank loans were paid, no one would have a bank deposit and there would not be a dollar of coin or currency in circulation This is a staggering thought We are completely dependent on the commercial banks Someone has to borrow every dollar we have in circulation, cash or credit If the banks create ample synthetic (bank credit) money, we are prosperous; if not, we starve We are absolutely without a permanent money system When one gets a complete grasp of the picture, the tragic absurdity of

our hopeless position is almost incredible, but there it is It (the private credit money monopoly) is the most important subject intelligent persons can investigate and reflect upon It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied soon."1

THE BOARD OF GOVERNORS

In 1921 the General Accounting Office (GAO) was created with audit authority over the receipt, disbursement and application of public funds From 1921 to 1933 the Board of Governors, but not the Federal Reserve Banks, came under the GAO's scrutiny In 1933 Congress voted to remove the Board of Governors from the jurisdiction of the GAO This left the Board of Governors to "the determination of its own internal management policies." It was alleged that non-interference (by the government or banking committees) would provide better monetary and credit policies Better monetary and credit policies for whom? Certainly not the long-suffering American taxpayers who have footed the bills for this unholy counterfeiting agency

The Board of Governors has broad powers which include the internal management of the entire Federal Reserve System, regulation of reserve requirements for member banks and control of interest rates and margin requirements for the stock market It also determines fiscal policy for the entire nation by manipulating the nation's money supply through the purchase and sale of government bonds and securities It also supervises Open Market Committee activities and selects the dealers who will be privileged to deal in the highly-profitable U.S government bond market

It might interest many readers to learn the identity of the top thirty five dealers, of which over twenty are in New York City The rest are scattered throughout the country in financialcenters

1

From Senate Document No 23, page 102, January 24, 1939 Robert H Hemphill, 8 yrs Credit Manager of the Federal Reserve Bank in Atlanta

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LIST OF THE GOVERNMENT SECURITIES DEALERS REPORTING TO THE MARKET STATISTICS DIVISION OF THE FEDERAL RESERVE BANK OF NEW YORK Bache Halsey Stuart Shields, Inc

Bank of America NT & SA

Bankers Trust Company

A.G Becker Incorporated

Blyth Eastman Dillon Capital Market, Incorporated

Briggs, Schaedle & Co., Inc

Carroll McEntee & McGinley Incorporated

The Chase Manhattan Bank, N.A

Chemical Bank

Citibank

Continental Illinois Bank and Trust Co of Chicago

Crocker National Bank

Discount Corporation of New York

Donaldson Lufkin & Jenrette Securities Corp

The First Boston Corporation

First National Bank of Chicago

First Pennco Securities, Inc

Goldman, Sachs & Co

Harris Trust and Savings Bank

E.F Hutton & Company, Inc

Aubrey Lanston & Co., Inc

Lehman Government Securities Incorporated

Merrill Lynch Government Securities, Inc

Morgan Guaranty Trust Company of New York

Morgan Stanley and Co., Inc

The Northern Trust Company

Nuveen Government Securities, Inc

Paine, Webber, Jackson and Curtis, Inc

Wm.E Pollock & Co., Inc

Chas E Quincey & Co

Salomon Brothers

Second District Securities Co., Inc

Stuart Brothers N.Y Hanseatic Division

United California Bank

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Dean Witter Reynolds Incorporated

This money market consists of U.S Government and Agency bonds, negotiable Certificates of Deposit, as well as corporate and municipal bonds, bankers acceptances, etc

"The government security market is the heart of the money market."2

And, believe it or not, the volume in the money market is between ten and fifteen times greater than that of the stock market

"If one includes the trading in corporate and municipal bonds, bankers acceptances, CD's sold directly by banks and other similar instruments — much of which is not centrally reported, the total money-market volume reaches an estimated $8-10 billion per day."3Commercial banks also enjoy the privilege of writing their own checks against minimal reserves to pay for the securities and bonds purchased in the money markets Their customers, however, which include insurance companies, state and local governments, corporations and individuals, must pay for these securities and bonds

in earned or borrowed money Thus we can see how the Reserve authorities, and to a slightly lesser extent the commercial banks, are able to underwrite their purchases in the stock and money markets

by writing checks against a fraction of their reserve funds This is the side of the securities and money market which is not generally known by

1

This list has been compiled and made available for statistical purposes only and has

no significance with respect to other relationships between dealers and the Federal Reserve Bank of New York Qualification for the reporting list is based on the achievement and maintenance of reasonable standards and activity Market Statistics Division, Federal Reserve Bank of New York, May 16,1978

the public and the one which the pro-banking elements want concealed at all costs

THE OPEN MARKET COMMITTEE

This is the elite group that sets policies for the "purchase and sale of U.S Government and Federal agency securities, bankers acceptances, and foreign exchange."1

The functions of the Open Market Committee are best summed

up in the opening paragraph of The Federal Reserve and the American Dollar, Problems and Policies:

"The money of the United States is managed by the Board of Governors of the Federal Reserve System and the Federal Open Market Committee."2

These men have a virtual monopoly and stranglehold on the economic well-being of our entire nation Their policies can make credit easily available or unavailable, interest rates high or low, business prosper or stagnate Every municipality, individual and business is directly and intimately concerned with the decisions which are made by this small group of usuror imposters Their decisions are not made with any concern for the well-being of our nation or economy, but for the sole purpose of furthering their global, collectivist empire building

The fiscal transactions of the Open Market Committee are so vast that they make the national debt seem paltry in comparison The Audit Hearings of this dictatorial group are most revealing

Excerpts from the testimony of Gov George W Mitchell, Chairman, Board of Governors of the Federal Reserve System, and former House Banking Committee chairman, Wright Patman, are quoted below:

The Chairman: "The Open Market Committee had transactions last year, I believe it was of $738 billion In other words, it was between

$2 and $3 billion a day Somebody made money on that." Mr Patman added that "the Federal Reserve had at least a trillion dollars

in transactions during that year." (1971)

Mr Mitchell: "Our portfolio is $75 billion That is what we own in government securities." (He carefully dodged the other issue.)1

Mr Mitchell also supplied the following information on the Federal Reserve Bank of New York The assets in custody for foreign official and international accounts were $15.5 billion in earmarked gold and $55.9 billion in U.S Treasury securities The New York Fed also has a wire service with foreign central banks and in 1972, according to Mr Mitchell's testimony, there were about $17 TRILLION WORTH OF TRANSACTIONS BY WIRE IN ONE YEAR.2

We must never forget that bonds and securities involving billions are "purchased" in one of the following ways: a) a bond is "rolled over" or exchanged for another; b) reserves are temporarily reduced

by the purchasing bank; c) a check is written against no funds, e.g funds created at the time of the transaction Or, as Silas Adams in his Legalized Crime of Banking describes it:

"Banks buy notes and other investment obligations and pay with new deposits; sell notes and other investment obligations, and take deposit credits for them Pay nothing for what they get; get cash for what they sell."3

Although the Federal Reserve Bank now possesses stranglehold power over the American economic scene, it is still seeking more A bill was introduced in July, 1975, which outlined the plan by the Federal Reserve Bank for the taking over of all banks and financial institutions in the nation.1 This bill would extend the Board's authority to impose reserve requirements on all depository lending institutions and thereby control the volume of their lending activity This power would extend to all non-member commercial banks, mutual savings banks, savings and loan associations, and even credit unions This bill has not yet passed, but should the Liberty Amendment become law, passage of this bill would be unnecessary

as the new powers given to the Monetary Authorities under its terms would incorporate all of these features, plus the added benefits of international gold and other lending and trading practices

A great deal of attention has been given to Section I of the Liberty Amendment because the core of the proposed legislation rests upon the money question The following chapters will briefly review the remaining sections of the Liberty Amendment

1

Congressional Record, Thursday, July 17, 1975, Vol 121, No 113,

pp.H7024-7028

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Chapter III

A REVIEW OF SECTION II OF THE LIBERTY AMENDMENT Section II contains a tremendous amount of appeal to people who are outraged by continual foreign alliances and bondage to other nations The vague wording in this section DOES NOT REPEAL ANY EXISTING TREATY, INCLUDING THE UNITED NATIONS CHARTER Therefore, it will have no effect whatsoever

on any currently-existing or future treaties It is a deceptive trap Furthermore, our present crop of social-experiment type "justices"

on the Supreme Court treat treaties as the "Supreme law of the land." They would, in effect, say that no law or Constitutional Amendment will supercede treaties

By what line of reasoning can we believe that those who have already stretched the Constitution out of shape will suddenly adhere

to it — unless, of course, it suited their decision of the moment Since our Constitution now declares treaties to be the supreme law of the land, the section in the Liberty Amendment pertaining to treaties affecting that Amendment only is redundant This paragraph was probably inserted to make it more appealing to many people Its phraseology otherwise serves no tangible purpose

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Chapter IV

A REVIEW OF SECTION III OF THE LIBER TY AMENDMENT The primary purpose of the Liberty Amendment has always been the repeal of the Income Tax Amendment If this is so, why wasn't it simply confined to the repeal of the 16th Amendment? Also, the fact that it would not take effect until three years after passage indicates that some very important interim activity can be expected in connection with our money system

It is the opinion of this writer that the Liberty Amendment has nothing to do with income taxes It is a clever maneuver to set the stage for the next step: a brand new money bill which will "return to Congress the right to coin and regulate its own money." An updated

"buy back the Federal Reserve Bank" bill will make a heralded debut, backed, no doubt, by some of the most prestigious conservative organizations in the nation

much-Although many people may not be aware of it, the Liberty Amendment was introduced in Congress as H.R Res 23 by John R Rarick (D)La., John H Rousselot (R), Calif., and John G Schmitz (R), Calif Also, while Mr Rarick was still in Congress he introduced H.R 17140 in 1970 and the same bill again in 1971 as H.R 351 The bills were referred to the Committee on Banking and Currency but never got out of Committee

Here is the text of H.R 17140

91st Congress 2nd Session

H.R 17140

IN THE HOUSE OF REPRESENTATIVES April 21, 1970

Mr Rarick introduced the following bill, which was referred to the Committee on Banking and Currency

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A BILL

To vest in the Government of the United States the full, absolute, complete and unconditional ownership of the twelve Federal Reserve Banks

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That

(a) the Secretary of the Treasury of the United States is hereby authorized and directed forthwith to purchase the capital stock of the twelve Federal Reserve Banks and branches, and agencies thereof, and to pay to the owners thereof the par value of such stock at the date of purchase

(b) All member banks of the Federal Reserve System are hereby required and directed to deliver forthwith to the Treasurer of the United States, by the execution and delivery of such documents as may be prescribed by the Secretary of the Treasury, all the stock of said Federal Reserve Banks owned or controlled by them, together with all claims of any kind or nature in and to the capital assets of the said Federal Reserve Banks, it being the intention of this Act to vest in the Government of the United States the absolute, complete and unconditional ownership of the said Federal Reserve Banks (c) There is hereby authorized to be appropriated, out of any funds not otherwise appropriated, such sums as may be necessary to carry out the purpose of this act

* * * * *

From the wording of this bill it appears that a transfer of stock will be accomplished, BUT NOTE, the government (taxpayers) will pick up the tab for "all claims of any kind or nature" and the banks will be reimbursed on a dollar for dollar basis Also please note that there is absolutely no mention in the bill of how money will be issued, who will have the authority for its issuance, whether or not bonds will continue to be the basis for our money or whether or not

it will be a debt

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and interest free money This bill is obviously so incomplete that its contents would be supplemented and implemented by hand-picked and subservient legislative aids in Congress

I am not questioning the sincerity of the sponsors of the bill, including ex-Congressman Rarick Many of his supporters are untrained in the devious propaganda surrounding money problems and the pitfalls contained in its seemingly beguiling language The Voorhis Bill, H.R 8209, of January, 1940, had similarities to the Rarick Bill These bills would do away with the Federal Reserve Bank in name only Money issuance would not be nationalized, but would assure the super Capitalist-Socialists, who are presently manipulating our money and economy, a continuation of their exploitive global financial plunder Can anyone be so naive as to imagine that with victory in sight, and Congress under its total control, that a bill (which would no doubt pass) would change things for the better (for the citizen, that is!)? We must be more wary now than ever for traps to be set which will ensnare us even further into the global dictatorship which is presently nearing completion

This should prove that the "Buy Back the Federal Reserve Bank" bills are the real objective for the smoke screen raised by the Liberty Amendment Committee During the three year period, Conservatives will believe they have achieved a victory and attention will be diverted from the "new" (non)con-stitution which the planners hope

to put into effect It will provide for income taxes TAXPAYERS, BEWARE!

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Chapter V JERRY VOORHIS AND HIS MONEY BILLS

Since Jerry Voorhis has played an important role both in Congress and on the legislative scene, let's take a closer look at this man in order to determine his qualifications for introducing a money-reform bill

The former Congressman from California has been regarded by many as a staunch conservative, especially by supporters of money reform From 1939-1941 he was a member of the House Committee

on Un-American Activities BUT: he was listed as an official of the United World Federalists in their 1951 World Government Highlights publication A New York Times ad dated November 15,

1957, carried a full page advertisement by the National Committee for a Sane Nuclear Policy Jerry Voorhis was listed as a signer

In the official Communist journal, Political Affairs, May 1958 issue, Herbert Aptheker, in his column, Ideas of Our Times, praised Voorhis for having supplied leadership in the drive to end U.S nuclear testing

The New York Times, in its issue of September 17, 1959, carried

a full page advertisement "WE SUPPORT PRESIDENT EISENHOWER'S INVITATION TO PREMIER KRUSHCHEV." Voorhis was listed as a signer along with Norman Thomas, Steve Allen, Mrs Eleanor Roosevelt and the late Rev Martin Luther King The Tom Mooney Committee, a successor to the American League for Peace and Democracy, listed the Hon Jerry Voorhis as a committee member The Tom Mooney Committee was cited as a Communist front on page 130 of the Guide to Subversive Organizations and Publications, House Document No 398, 87th Congress, 2nd Session, prepared by the Committee on Un-American Activities of the House of Representatives (1957)

In passing, it might be interesting to note that Mr Voorhis did not

go along with Wright Patman in his attempt to get an audit of the Federal Reserve Bank in 1974

This same Jerry Voorhis trotted out two "Buy Back the

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Federal Reserve" money bills The first, H.R 8209, in January 1940, and H.R 118, in January of 1943 Sec 1 (a) of H.R 118 provided that:

The Secretary of the Treasury of the United States is hereby authorized and directed forthwith to purchase from the member banks the capital stock of the twelve Federal Reserve Banks and branches, and agencies thereof, and to pay to such member banks in lawful money or deposits in a Federal Reserve Bank the amount paid

by them for such stock "

This bill would have created a Monetary Authority which would exercise absolute control over all banks and financial institutions in the nation Power to issue money would be vested exclusively in the Monetary Authority (not Congress) which could also engage in international gold transactions, as well as the purchase, sale and redemption of United States government bonds It also gave the Monetary Authority the right to select members from the Board of Governors of the Federal Reserve System for its staff

With a Monetary Authority possessing even more awesome powers than the Board of Governors now has, it makes little difference who owns the stock of the Federal Reserve System This bill would have frozen the Monetary Authorities into a position of absolute power over Congress and the Nation It also would continue the same old debt-money system by inserting the provision for bond dealings by the Monetary Authority In other words, the government would still be borrowing its money and credit from a monetary monster which would now be housed in the Treasury Department Their operations would be the same as the Open Market Committee under a different name

We might as well ask, what would a dedicated internationalist like Mr Voorhis be doing sponsoring a "money reform bill"? Can we believe that a man with such questionable connections would be qualified as the person most likely to sponsor a TRUE money-reform bill, or would we be more correct in assuming that his loyalties remained with the same interests he had always served? In cases like this, actions speak louder than

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