Benko: Gold, the States, and Federal Monetary Policy

By: Ralph Benko
Senior Advisor, American Principles Project

Why are so many state legislators beginning to call for issuance of a form of gold money?The Constitution prohibits states from coining money but allows them make “gold and silver Coin a Tender in Payment of Debts….” By prohibiting everything except “gold and silver Coin” the Constitution clearly contemplates this as legitimate.

Legislators in a dozen states are looking at legislation about gold or silver-based currency, including, right now, Utah, South Carolina, Virginia and New Hampshire. States haven’t issued money for over a hundred years. So … why now? There is disgust by state legislators with the federal government’s promiscuously printing money. This reflects the views of those who wrote and adopted the United States Constitution.

The transcript of the debates in the original Constitutional Convention shows the attitude of the Founders toward paper money was one of disgust. In debate one delegate, Roger Sherman, called for the insertion of an absolute prohibition against states issuing their own paper money.

Mr. Wilson and Mr. Sherman moved to insert after the words ‘coin money’ the words ‘nor emit bills of credit, nor make any thing but gold and silver coin a tender in payment of debts’ making these prohibitions absolute…

Mr. Sherman thought this a “favourable” crisis for crushing paper money.

The Founders voted to adopt Sherman’s “crushing” of state-based paper money.

As for the federal government, the original draft of the Constitution included language permitting the federal government to issue unbacked paper money. The Founders objected strongly to this power. The objections were summed up by delegate Oliver Ellsworth:

Mr. Elsesworth thought this a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By witholding the power from the new Governt. more friends of influence would be gained to it than by almost any thing else. Paper money can in no case be necessary. Give the Government credit, and other resources will offer. The power may do harm, never good.

Those who wrote the Constitution decisively stripped the federal government of the power to issue inconvertible paper money. And stripped it stayed… until, temporarily, during the Civil War. Saving the Union was of transcendent importance. A strong constitutional argument exists for the legitimacy of paper money as an expedient. But it set a bad precedent.

“The American people are patient but we are not stupid.”

Ralph Benko
Senior Advisor, American Principles Project

For most of American history dollars were convertible into gold or sometimes silver. It is a 20th century innovation to have inconvertible money. FDR suspended domestic convertibility. And then… Richard Nixon’s 1971 suspension of the convertibility of the dollar into gold put the final nail into the dollar’s coffin. President Nixon announced this as a temporary suspension.

President Nixon made certain promises to America when he suspended convertibility of the dollar. August 15, 1971:

“I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold ….

Now, what is this action–which is very technical–what does it mean for you?

Let me lay to rest the bugaboo of what is called devaluation.

If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.” (Emphasis supplied.)

Well. The dollar today is worth less than a quarter was worth in 1971.

Ralph Benko
Senior Advisor,
American Principles Project

The American people are patient but we are not stupid. We have noticed the steady erosion of the dollar’s buying power, that fact that our dollars are worth 80% less than the day of “the Nixon shock.” We have noted the bankruptcy of the assurances we were given.

Yet Washington has been curiously unresponsive to the suffering brought by its failed promise. Why? Washington has itself been a primary beneficiary of monetary depreciation.

The federal government spent $15 billion from 1789 – 1900. Not $15 billion a year. $15 billion cumulatively. Uncle Sam will spend $10 billion a day in 2011. The federal government spends more every two days than it did altogether for more than America’s first century. Although these sums are not adjusted for inflation they give a correct impression of the magnitude of the change from what our Founders set forth and our early statesmen delivered.

How does Washington get its hands on so much money? Three ways. Taxing us, on which it is maxed out. Borrowing — deficits — to which there is a growing massive resistance. And there is a third and even more pernicious way: printing dollars. Washington prints money – such as Chairman Bernanke’s massive $800B+ “quantitative easing.” Wildly printing money erodes the value of the dollar. It will damage every American’s hard-earned savings.

The power to print money at whim is wrong.

It is toxic to our personal and national wellbeing.

And it is unconstitutional.

So legislators in twelve states are exploring gold-based currency. It is reprehensible for national elites to deride those who are doing so. Whatever objections one might have to the mechanisms being considered the impulse is legitimate and even noble. State legislators are challenging the federal abuse of an unconstitutional power, challenging the issuance of unhinged paper money.

Federal officials should take these state initiatives as a cue. Federal officials have sworn to preserve, protect and defend the Constitution of the United States. Let them take their oath seriously and restore the convertibility of dollars to gold.

Source: http://www.cnbc.com/id/41665142

By Dr. Edwin Vieira, Jr., Ph.D., J.D.
November 17, 2009

NewsWithViews.com

[The following is the full text of an address presented to the National Heritage Center for Constitutional Studies at its 2009 Constitution Day conference.]

The Tenth-Amendment Resolutions from State Legislatures, the Tea Parties, the Town Hall Meetings, and other manifestations of WE THE PEOPLE’S feedupidness with monkey-business as usual in the Disgrace of Columbia—even the massive congregation on the Mall last September—are some of the most enlightening, encouraging, and energizing developments that American patriots have witnessed in a long time. For these events are all premised on the idea: “We don’t want you!”—that WE THE PEOPLE do not want any more, indeed they demand a great deal less, interference in their lives from rogue public officials in the General Government.

These events notwithstanding, the problem remains that too many among WE THE PEOPLE will start but then stop right there, with “We don’t want you!” That is not enough.

The complaint “We don’t want you!” needs to go further, to the resolve, “We won’t have you!” — that WE THE PEOPLE intend to rid themselves of the General Government’s interference.

And to make this resolve effective, WE THE PEOPLE need to design and put into effect remedial action, so that they can say with finality: “We don’t need you!”

The sequence must be—

(i) We don’t NEED you!” which makes it realistic to say:

(ii) We don’t WANT you!” which combined with the ability to make WE THE PEOPLE’S wants effective will lead to the necessary and sufficient action:

(iii) We won’t HAVE you!” and finally will yield the desired result:

(iv) We are RID of you!”

If WE THE PEOPLE have the ability they can give “teeth” to the desire, take the necessary action, and thereby accomplish their goal.

But what will all of this require?

• WE THE PEOPLE need to create actual workable institutions that take advantage of the political and legal position THE PEOPLE hold—i.e., as the ultimate sovereigns.

• WE THE PEOPLE need to create actual workable institutions that take advantage of the economic resources THE PEOPLE command—that THE PEOPLE are the true source of all real wealth in this country, and are in actual physical possession of most of it.

True enough, the Establishment holds bundles of paper claims to wealth, many (if not most) of them generated through the unconstitutional Federal Reserve System. But the insuperable problem for the Establishment will be how to collect on those claims if WE THE PEOPLE simply refuse to honor them. Anyone in the paper-currency racket who doubts that these claims can be declared unenforceable should read the Supreme Court’s decision in Craig v. Missouri, 29 U.S. (4 Peters) 410 (1830).

• WE THE PEOPLE need to create actual workable institutions that are politically, economically, and legally independent of the General Government:

Institutions that can compete with the faulty and fraudulent mechanisms that rogue officials in the General Government have foisted on this country in the key areas of economic and political control, particularly in the areas of (i) money and banking and (ii) what is called “homeland security”.

Institutions that can replace these fraudulent control-mechanisms with proper means to “establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity”. And

Institutions that will enable WE THE PEOPLE to defend themselves against retaliation from rogue officials in the General Government and from the private centers of multinational economic power.

In sum, WE THE PEOPLE must combine their economic resources and abilities with political and legal authority in large-scale organizations that will reflect the power inherent in numbers.

This cannot be done by or through the General Government at the present time, because the General Government is the main locus of this country’s problem, not the source of any solution for them.

It cannot be done through political parties, because parties (along with other factions and special-interest groups) are the control-mechanisms in the “divide and conquer” strategy the Establishment employs to prevent WE THE PEOPLE from asserting their political sovereignty in their own interest.

It cannot be done by individuals or private groups alone, primarily because: (i) private individuals and groups enjoy no independent legal authority; and (ii) there is probably no way to create a sufficiently large and effective private operation in any State, let alone throughout the entire country, in time.

It cannot be done by the State governments alone, because it is not simply a political question of governmental finance and administration, but will require a revamping of the entire private economies in each State, too.

Therefore, it will require both (i) participation by the State governments, because they have the legal authority and the ability to mobilize people in sufficient numbers, and (ii) mass action by WE THE PEOPLE as a whole.

The only establishment or institution that combines all of these elements is “the Militia of the several States”, the “well regulated Militia” that the Second Amendment tells us are “necessary to the security of a free State”.

But a true constitutional “well regulated Militia” exists in not one State in this Union today.

So, WE THE PEOPLE need to revitalize “the Militia of the several States” in order to regain and retain popular control over State governments, and through them to regain and retain control over the two fundamental powers of sovereignty: (i) the Power of the Purse—i.e., currency and credit, and (ii) the Power of the Sword—i.e., community self-defense.

Revitalization of the Militia will enable WE THE PEOPLE to exercise community self-reliance and ultimately true self-government in “a free State” with a sound free-market economy.

Americans need to combine all of the following elements in a single plan for mass action:

1. Revitalization of “the Militia of the several States”.

·The Second Amendment instructs every American that “[a] well regulated Militia” is “necessary to the security of a free State”—not just “useful”, and certainly not “optional”, but “necessary”. And not “necessary” in only some general sense, but specifically with respect to “the security of a free State”—which means that, according to “the supreme Law of the Land” itself, the very survival of constitutional freedom in this country depends upon the Militia.

The Constitution identifies no other establishment, institution, or entity as “necessary” for this vital purpose, or for any other purpose.

So why is not revitalization of the Militia, immediately if not sooner, “job one” on the agenda of every constitutionalist? How can patriots continue to deny in their actions what the Constitution tells them is “necessary” for the maintenance of constitutional government? Americans may say that they have faith in the Constitution—but faith without works is dead; and the Constitution is not self-executing.

·The purpose of revitalizing the Militia is to combine all the elements of each State’s “homeland security”—including police, emergency response, and so on—under the Militia, in order to obviate “top down” control by the police-state apparatus being set up through the Department of Homeland Security in Washington, D.C., and its various satellites, transmission-belts, and fellow travelers around the country. Revitalization of the Militia will return control to whom it belongs, in the hands of WE THE PEOPLE directly, with:

(i) total organizing, arming, disciplining, and training of THE PEOPLE to handle any emergency;
(ii) State production and provision of arms, ammunition, and accoutrements for the Militia—with all individuals to possess their arms and ammunition, whenever obtained from whatever source, as part of their Militia service—thus ending all of the General Government’s oppressive “gun control”; and, perhaps of most immediate importance,

(iii) assignment to the Militia of oversight over all new institutions of “economic homeland security” within the State.

2. Adoption of an alternative currency.

This is an idea which began in New Hampshire, and subsequently spread to other States, including Indiana, Colorado, and Montana. An alternative-currency bill has yet to be reported out of committee in any State legislature. But as the national economy melts down, the pressure for serious consideration and then passage of such a bill will become overwhelming, simply because there is no workable alternative consistent with the maintenance of America’s national economic sovereignty that can be put into operation in time.

The alternative-currency system will require not just the State to participate through its own public financial operations, but also will require every individual member of the Militia—that is, every able-bodied adult man and women—to participate in his or her own private economic transactions, in order to move both the State’s government and the State’s private economy as quickly as possible out from under the control of the Federal Reserve System and the rotten financial power-structure of the New York City-Washington, D.C. axis of fraud.

The actual silver and gold will be held: (i) in a State vault controlled by the Militia, and (ii) in the hands of Militiamen (the private holding of silver and gold will be as important as the private possession of arms). And,

Experts drawn from and subject to supervision by the Militia will be in charge of or will provide oversight for the system.

3. Establishment of a State Credit Exchange.

This Exchange will deal solely in so-called “real bills” financed with actual deposits of the alternative currency (no “fractional reserves”). This will be necessary in order to protect the State’s private economy from retaliation by the multinational financial power-structure, which will doubtlessly attempt to cut off credit to the State’s businessmen, farmers, and others, so as to sabotage the alternative-currency system.

Experts drawn from and subject to supervision by the Militia will be in charge of or will provide oversight for this Exchange, too.

4. Additional areas of concern and action could include:

Food independence and security through the suppression of multinational corporate agribusinesses.

Energy independence and security through mobilization of local resources and radical innovation in the provision of energy.

Assertion of local control over land and water usage, and other natural resources.

…et cetera…

All of these arrangements will be statutorily structured as functions of the State government and thereby extensions of direct popular sovereignty, and will be administered through the Militia, thus coming under the Second and Tenth Amendments’ guarantees of reserved powers to the States and the people.

5. Considerations for the selection of an initial State in which to bring this project to fruition.

In the nature of things, the necessary legislation will have to be drafted one State at a time. (No “one size fits all” bill is possible). Inevitably, therefore, this work will require the commitment of a great deal of time, effort, and expertise. Before such a commitment can be expected, let alone requested, of anyone, adequate groundwork must be laid:

There must be an extensive local grass-roots “freedom movement” in existence in that State and prepared specifically to promote the reform legislation.

There must be a solid legislative caucus in existence in that State’s legislature, preferably in each house (where a bicameral legislature exists).

There must be a workable plan, ready to implement and adequately funded, for mobilizing large numbers of activists from across the country to work in the targeted State to promote the reform legislation.

It is too late for parochialism on this subject: Everyone throughout this country has an interest in seeing this project succeed in the first State that undertakes it, because that State will be the exemplar for the others.

No one can deny that a crisis of overwhelming proportions is overtaking this country at an ever-accelerating speed. And each day appears darker than the one before it. But that in itself is a cause for hope—because, as the old saying goes, it is always darkest just before the dawn.

© 2009 Edwin Vieira, Jr. – All Rights Reserved

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For more than thirty years he has practiced law, with emphasis on constitutional issues. In the Supreme Court of the United States he successfully argued or briefed the cases leading to the landmark decisions Abood v. Detroit Board of Education, Chicago Teachers Union v. Hudson, and Communications Workers of America v. Beck, which established constitutional and statutory limitations on the uses to which labor unions, in both the private and the public sectors, may apply fees extracted from nonunion workers as a condition of their employment.

He has written numerous monographs and articles in scholarly journals, and lectured throughout the county. His most recent work on money and banking is the two-volume Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (2002), the most comprehensive study in existence of American monetary law and history viewed from a constitutional perspective. www.piecesofeight.us

He is also the co-author (under a nom de plume) of the political novel CRA$HMAKER: A Federal Affaire (2000), a not-so-fictional story of an engineered crash of the Federal Reserve System, and the political upheaval it causes. www.crashmaker.com

His latest book is: “How To Dethrone the Imperial Judiciary“ … and Constitutional “Homeland Security,” Volume One, The Nation in Arms…

He can be reached at his new address:
52 Stonegate Court
Front Royal, VA 22630.

Our goal at BreakTheMatrix is to build a social networking organization and movement that will bring freedom loving people together on the Internet, and then take our message of optimism, hope, freedom and prosperity “off– Internet” through radio and television content broadcasts across America. As Dr. Ron Paul said so eloquently during his 2008 Presidential campaign: “The neocons, the warmongers, the socialists, the advocates of inflation will be hearing much from you and me.” Indeed. The tired empty mantras of “right and left;” of “conservative and liberal;” of “Democrat and Republican” must no longer stand unchallenged in our mainstream media outlets. The matrix of silence and pervasive conformity in our media MUST be broken. The time has come for words of truth to be spoken and heard in America.

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Our tradename “BreakTheMatrix” will stand for something in the new American media marketplace of 2008 and beyond. Our message is optimistic, and hopeful, and will present again an America that is the great shining city envisioned by our founders. In specific terms, we offer the following as a call for fundamental change in Washington DC and Wall Street:

(1) End the overseas empire; and bring the troops home;
(2) End the Federal Reserve; break the debt money culture and the stranglehold of our bankers;
(3) Limit our federal government to its proper Constitutional framework; end the income tax (and so much more;
(4) Dismantle the police state; and free the American people.

Each and all of these objectives are readily achievable once the American people hear and understand that our existing rulers in Washington DC and Wall Street have nothing to offer but decline, failure, bankruptcy, and the loss of our country. We choose these harsh words carefully– for they are the right words to describe what our leaders are bringing to America. Something has gone terribly wrong in our country, and the American people need to learn the reasons why. Our rulers have gone far astray, and our people need to learn that change is something to be embraced, not feared. BreakTheMatrix radio and television will provide a platform for voices of fundamental change in our corrupt federal government and our criminal banking system. We see in America a need and a yearning that is not being satisfied by existing media outlets, and an opportunity to displace the lies and propaganda of old media people with fresh words of truth. We are the displacers.