PAPER MONEYPAPER MONEY

A colonial history of its use prior to A colonial history of its use prior to and after the adoption of the and after the adoption of the

Constitution for the united States Constitution for the united States of Americaof America

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by Michael H. Keehnby Michael H. Keehnhttp://mhkeehn.tripod.com/http://mhkeehn.tripod.com/

SourceSource

• Based on the writing of George Bancroft and found in a document titled:

A PLEA FOR THE CONSTITUTION

OF THE UNITED STATES

Wounded in the House of Its Guardians

Beginning with a QuoteBeginning with a Quote• "The first freedom of every human is freedom of the

mind, the great free will. Essential to this is education. Mankind must accept education as an individual responsibility. Turning over the responsibility for your personal education to another is to surrender your free will. By controlling what you can learn, others control you as neatly as a shepherd herds sheep. If mankind cannot accept the personal responsibility for self education, then I am wrong and mankind deserves to be treated as sheep, both shorn and slaughtered, while in the interim herded by a few smart dogs that lick the shepherd’s hands. (continued > > >)

Quote ContinuationQuote Continuation

• The second freedom of every human is to rise up against oppression, whether it comes from the lowly hands of a common thief or from the high hands of the so called sovereigns.

All of the other great gifts of freedom start here, the headwaters of liberty. " - Michael C. Keehn

IntentIntent• It is the intent of this Power Point

presentation to help the individual understand the use, and detrimental consequences and effects of using private commercial paper (Federal Reserve Notes) as currency. It is assumed that the viewer already knows that the Federal Reserve Bank is not an agency of the government, it is a privately owned bank.

The autumn of 1690The autumn of 1690

• Massachusetts sends an expedition to capture Quebec. They return without success. To defray its cost, which amounted to forty thousand pounds, Massachusetts ordered the issue of "seven thousand pounds of printed bills of equal value with money;" and of the remainder in May, 1691.

THE RESULT?THE RESULT?

• All coin then circulating in Massachusetts was exported to England. It is to be noted that money in all colonial legislation is defined as gold and silver coin, which has intrinsic value.

Intrinsic Value DefinedIntrinsic Value Defined

• “Intrinsic value. The true inherent and essential value of a thing, not depending upon accident, place, or person but same everywhere and to everyone.” – Blacks Law Dictionary, Sixth Edition

DependencyDependency

• Without true money which could be accepted in trade, the colony could not engage in commerce. In July, 1692, within nineteen months of the earliest emission of paper money, the first legislature under the new charter transformed the self-governing colony of Massachusetts Bay into a direct dependency of Great Britain.

SorrowSorrow

• The sorrow of the province was expressed in December, 1697, with the prohibition of "the export of coin, silver money or bullion.” In June, 1700, a joint committee of the council and representatives, was appointed to consider how to revive trade.

17021702

• The first issue of bills of credit of Massachusetts after it became a royal province, was in November, 1702, for ten thousand pounds, in value "equal to money," but to be accepted in all public payments at the advance of five percent. A tax was ordered for their redemption. Sound familiar?

South CarolinaSouth Carolina

• In May, 1703, South Carolina gave a new development to American paper bills, by enacting not only that its new emission of six thousand pounds should be "a good payment and tender in law," but that whoever should refuse them should "forfeit double the value of bills so refused.” As we can see, coercion is now being used.

ConnecticutConnecticut

• In 1712 Connecticut the statute book complains that "money," which in those days meant only gold and silver coin, "was not to be had."

Inter-Colonial CirculationInter-Colonial Circulation

• The inter-colonial circulation of each other's bills wrought a new uncertainty in prices, for which the currency of each one of the four was steadily declining, it declined in each with unequal speed. The United States currency of today (4-8-2009) has declined such that a one dollar Federal Reserve Note of 2009, has $0.035 (3.5 cents) the purchasing power it held in 1962.

Rhode Island & New YorkRhode Island & New York

• Rhode Island, in July, 1710, on its first emission of bills of credit, declared them equal in value to "money," and made them receivable in all public payments.

• New York entered eagerly into the defense of its northern frontier, and in November, 1709, for the first time involved itself in the use of bills of credit.

The FriendsThe Friends

• The Friends in the assembly of New Jersey at first defeated the bill for taking part in the war, but after a short prorogation it was adopted.

• In Pennsylvania, where the Friends had more power, the spread of paper money was, for a while, arrested.

More Bills of CreditMore Bills of Credit

• In November, 1711, Rhode Island discharged a claim by a loan of its bills of credit to the amount of three hundred pounds for four years, free of interest.

• South Carolina gave a wider development to this new form of using paper. Its legislature, on the pretext of creating a fund to sink former bills of credit and to encourage trade and commerce, in July, 1712, ordered fifty-two thousand pounds in new bills of credit to be stamped and put out at interest in loans.

Federal Reserve Bills of CreditFederal Reserve Bills of Credit

• The Federal Reserve Note, as a Bill of Credit is issued upon the deposit of debt with the treasurer of the United States. Therefore it contains evidence of debt which is what one would expect of a bill of credit.

Federal Reserve Note Federal Reserve Note AuthorizationAuthorization

• “Upon the deposit with the Treasurer of the United States; (a) any direct obligation of the United States; (b) any notes, drafts, bills of exchange or bankers acceptances acquired under the provisions of this act, that any Federal Reserve Bank making such deposits in the manner prescribed by the Secretary of the Treasury, shall be entitled to receive from the Comptroller of the Currency, circulating notes in blank, duly registered and countersigned.” – Banking Relief Act, March 9, 1933

Debt: Public & PrivateDebt: Public & Private

• (a) any direct obligation of the United States = Public Debt

• (b) any notes, drafts, bills of exchange or bankers acceptances = Private Debt

• Whenever Federal Reserve Notes are issued, it creates a debt upon which interest must be paid. That obligation falls upon the American people. Money (gold & silver) has no such interest obligation.

Intentional DepreciationIntentional Depreciation

• In November, 1714, Massachusetts ordered fifty thousand pounds to be let out to the inhabitants of the province for five years on real security at five pounds percent per annum, to be paid back in five annual installments. The act was a sacrifice of the public interests to borrowers, who were to return their loan only after a lapse of time sufficient to insure the very great depreciation of the paper in which it was to be paid.

Protecting the SpeculatorsProtecting the Speculators• Moreover, the borrowers needed an

enforcement by law of the circulation of the paper which they borrowed. In December, 1715, under a pretext “to prevent the oppression of debtors,” a stringent statute made the bills legal tender for all debts.

• Protecting the speculators is what just occurred here in the United States (2008-2009) with the bail out, and we are the ones who pays it.

Public MoneyPublic Money

• In 1716 Massachusetts ordered one hundred thousand pounds to be distributed through a loan office in each county. But why should borrowers in the smaller townships be forced to travel to their shire town? Let a public money-lender be near every man's door.

• Sound familiar? Banks, except they lend Public Money that is actually private money.

Magical Money DisappearsMagical Money Disappears

• Of course real money (gold & silver) disappeared; not even a silver penny was to be had; the small change became of paper.

• In the 1930’s the gold of the American people was confiscated, and in the 1960’s, silver coin disappeared.

Preventing OppressionPreventing Oppression

• In 1717, the council of New Hampshire was zealous to follow the fashion of issuing paper money by loans. Its more cautious Assembly restrained their zeal, and confined the issue to fifteen thousand pounds.

• In October, 1718, Connecticut, to prevent oppression by the rigorous exaction of money, declared its bills of credit legal tender for debts

Causing OppressionCausing Oppression

• Do we know any legislative body in the United States of America that continually allows, and engages in, increasing the National Debt obligation of the people in this country?

Law of PennsylvaniaLaw of Pennsylvania• The eagerness of borrowers undermined

the scruples of Pennsylvania; in March, 1723, when there was universal peace, that colony issued bills of credit for loans to individuals, and not only compelled creditors to receive the bills at par or “lose their debts,” but ordered sellers to receive them at their nominal value in the sale of goods or lands or tenements, or "forfeit a sum from thirty shillings to fifty pounds."

Law of Pennsylvania Cont.Law of Pennsylvania Cont.• This law, so wrote Adam Smith, “bears the evident

mark of a scheme of fraudulent debtors to cheat their creditors. A positive law may render a shilling a legal tender for a guinea, because it may direct the courts of justice to discharge the debtor who has made that tender; but no positive law can oblige a person who sells goods and who is at liberty to sell or not to sell as he pleases, to accept of a shilling as equivalent to a guinea in the price of them. In this early period Virginia alone escaped the contagion of a paper currency.”

RepudiationRepudiation• The next development of the colonial

system of paper money was a partial repudiation. In February, 1737, less than forty-seven years after the first emission of bills of credit by Massachusetts, that colony issued nine thousand pounds of a new tenor, of which one dollar was to be equal to three of the old, and which, after five years, was to be redeemed at par in silver and gold.

Redemption TimeRedemption Time

• When the time of redemption came round they were not paid off, but by a further repudiation four pounds for one was made the rate in exchanging the old tenor for the new.

South Carolina Regains it South Carolina Regains it (common) Senses(common) Senses

• The people of South Carolina, having the best opportunity to grow rich by the great returns made to them for the products of their soil, have recorded their sense of their mistake in the statute of the eleventh of December, 1717, in which they said: (Continued > >)

South Carolina Admits MistakeSouth Carolina Admits Mistake

• “It is found by experience that the multiplicity of the bills of credit hath been the cause of the ruin of our trade and commerce and hath been the great evil of this province, and that it ought with all expedition to be remedied.”

• How is the trade and commerce of the United States doing today?

Court AdmissionCourt Admission

• On the ninth of January, 1739, the general court of Massachusetts made this confession: "The emission of great quantities of bills of public credit without certain provision for their redemption by lawful money in convenient time, hath already stript [striped] us of all our money and brought them into contempt to the great scandal of the government…”

Massachusetts Proceeds AloneMassachusetts Proceeds Alone

• In February, 1748, Massachusetts invited the governments of Connecticut, New Hampshire, and Rhode Island to join in abolishing the use of bills of credit. But as no one of the three gave effectual heed to the summons, the people of Massachusetts proceeded alone.

MassachusettsMassachusetts

• It was estimated that about 2,200,000 pounds of their bits of credit would be outstanding in the year 1749. In January of that year an act was passed, redeeming the bills of the old tenor at the rate of forty-five shillings, those of the new tenor at the rate of eleven shillings and three pence, for one Spanish silver dollar; a rate which somewhat exceeded their market value at the time.

Massachusetts Cont.Massachusetts Cont.

• The bills of credit of New Hampshire, Rhode Island, and Connecticut were excluded by most stringent laws, and Massachusetts, with its quickened industry and established credit, "sat as a queen among the provinces.

• Just think how prosperous the United States might be if such practices were adopted.

January 1751January 1751

• To aid in bringing the other New England colonies into the same condition, the parliament of Great Britain enacted that "no paper currency, or bills of credit of any kind issued in any of the said colonies or plantations, shall be a legal tender in payment of any private dues whatsoever within any of them.

Roger Sherman

• "The legislature of Connecticut have at length taken effectual care to prevent a further depreciation of the bills of this colony; the other governments," (meaning New Hampshire and Rhode Island) "not having taken the like prudent care, their bills of credit are still sinking in their value.” >>> continued

• And what is your Federal Reserve Note doing? Everyday you work for less.

Roger Sherman Cont.

• “If what is used as a medium of exchange is fluctuating in its value, it is no better than unjust weights and measures, both which are condemned by the laws of God and man; and, therefore, the longest and most universal custom could never make the use of such a medium either lawful or reasonable.” >>> continued

Roger Sherman Cont.

• "We, in this colony, are seated on a very fruitful soil; the product whereof, with our labor and industry and the divine blessing thereon, would sufficiently furnish us with and procure us all the necessaries of life and as good a medium of exchange as any people in the world have or can desire.” >>> continued

Roger Sherman Cont.

• “But so long as we part with our most valuable commodities for such bills of credit as are no profit, we shall spend great part of our labor and substance for that which will not profit us; whereas if these things were reformed we might be as independent, flourishing and happy a colony as any in the British dominions.”

John Ledyard• “The medium of trade whereby our

dealings are valued and weighed ought to be esteemed as sacred as any weights and measures whatever, and, to maintain justice, must be kept as stable, for as a false weight and false balance is an abomination to the Lord, a false and unstable medium [of exchange] is equally so, as it occasions as much iniquity and is at least as injurious.”

Rhode IslandRhode Island

• Rhode Island, with Stephen Hopkins for its governor and a legislature of which the majority reflected his own uprightness, at once and in spite of the severest opposition, put on its statute book: “Lawful money of this colony is, and shall hereafter be, silver and gold coin; and nothing else;” and it never again resorted to the emission of paper money, till, in 1775, it took up arms for the defense of its liberties.

New Hampshire: ConnecticutNew Hampshire: Connecticut

• New Hampshire fixed 1771 as the limit for its paper, which in that year totally disappeared.

• Connecticut went through the great French war without issuing bills of credit; but in 1770, after an intermission of twenty-five years, relapsed into the old abuse.

The War of IndependenceThe War of Independence

• The war for independence exhibited a new development of the system of credit, by the reckless disregard of its bounds. Promises of money were scattered over the land alike by the states and by the United States, until "bills," to use the words of John Adams, "became as plenty as oak leaves."

North Carolina: VirginiaNorth Carolina: Virginia

• North Carolina, having in 1780 directed the emission of more than a million pounds, in the next year gave authority at one dash to issue twenty-six and a quarter million more paper dollars at six percent interest.

• Virginia in March, 1781, directed the emission of ten million pounds, and authorized five million more. The continental paper currency and its own were made a legal tender in discharge of all debts and contracts, except contracts which expressly promised the contrary.

Inflation -100:1Inflation -100:1

• In 1780 the United States began repudiation by issuing a new paper dollar equal to forty of their previous issues. After their new constitution was established, all that remained of the bills of the continental congress were called in at the rate of one dollar in silver for one hundred dollars "impressed" on paper.

Our Current InflationOur Current Inflation

• Gold, when I was in high school in 1962, was $32 an ounce. Today, May 8, 2009, the price of gold is $910.75 per ounce. If we divide 32 by 910.75 we will find that today’s one dollar Federal Reserve Note has $0.032 (3.2 cents) the purchasing power it held in 1962. Which is a testament to our own folly with private commercial paper (Federal Reserve Notes).

The ResultThe Result

• The result of our choice to use Federal Reserve Notes is that a home that cost $9,600 dollars in 1962, today costs $284,609. Our payment, instead of being $106.58 for 12 years is instead, $1706.38 for 30 years. Instead of paying back $12,789, we pay back $614,294. Over twice the amount we borrowed. As a result somebody is becoming very wealthy off our ignorance.

WagesWages• If we were making $2.25 an hour in 1962

and our wages had kept pace with the devaluation of the Federal Reserve Note, our hourly wage today would be $64.04 (Sixty-Four dollars and 4 cents an hour). If we make $15 an hour today, our ability to purchase products is 23% of what we were able to buy with $2.25 an hour in 1962, less than one-quarter what we able to buy back then.

Your Labor & LifeYour Labor & Life• Today (2009), you, and probably your

wife, must work for 30 or more years to pay for your home, instead of 10 years. In this most recent financial meltdown, you’ve seen your investments decrease in value by 50%. These are the prices we pay for allowing our government to continue dealing in private commercial paper (Federal Reserve Notes) and the decreasing value it will forever have.

President John F. KennedyPresident John F. Kennedy

• President Kennedy made a bold attempt to return power and independence to the American people when he issued an executive order to begin the printing of non-interest bearing treasury notes as a replacement for the Federal Reserve Note. Within 10 days he was assassinated, and the new President rescinded this executive order. If we’re awake, this should tell us something.

Government TodayGovernment Today• Today (2009) the United States government

borrows all the money (credit) it needs to operate annually. This is the public debt mentioned in the language authorizing the issuance of Federal Reserve Notes in a previous panel. The government never pays on the principal amount owed and even borrows the money to pay the interest on the existing debt.

The Federal Reserve NoteThe Federal Reserve Note

• The FRN is issued and owned by the privately owned Federal Reserve Bank. This currency, now in circulation, has a usury charge associated with it we call interest. Since this debt obligation has been placed upon the American people by government, it is then necessary to burden them with an income tax as well as many other taxes.

Don’t we owe it to our self?Don’t we owe it to our self?

• NO!, we don’t owe it to ourselves, we owe it to the international bankers. Federal Reserve Notes are private commercial paper, and not owned by the people of the United States. Consequently, you must pay for its use… tax; tax; tax; tax; tax; tax.

WarsWars

• Wars benefit those who finance and profit from war. This would again be the international bankers. They finance both sides of the war and profit regardless of who wins. If you do some research on Prescott Bush you will find that he profited from helping to finance the NAZI regime. See next panel > > >

Financing the Nazi MovementFinancing the Nazi Movement

• George Bush's grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany. The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.

GreedGreed

• Because there is so much money to be made in war, it is highly likely that the international bankers use their wealth, power and influence to create conflict and war. It is, of course, logical if one is greedy. Is there any question of the greed of the international banking elite? Therefore, why not finance the rise to power of a NAZI regime or any other similar regime in today’s world? There is big money to be made.

Ask the QuestionAsk the Question

• Always ask the question: “Who does it profit?” It is the job of the main stream media, controlled by the elite, to sell the American people the false idea that it is they who will profit & benefit. It never is! People of this world don’t like us very much, we know. But what country have we entered in which we have not left a puppet government subject to our will?

ConclusionConclusion

• This concludes a brief look at the history of paper currency and its effects. The choice is ours. Either to remain silent and apathetic, or to take control our lives and future, and to provide for the future of the children we purport to love.

END