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No.287
10/27/12

Using non-federal Federal Reserve Notes

On the 4th of July, 1861, Abraham Lincoln re-convened congress under an extraordinary occasion that remains technically in-place today per Lincolns proclamation of April 15, 1861. Congress had adjourned sine die on March 28 1861. In other words, on March 28, the congressmen of the southern states seceded from the Union, and walked out of the 37th Congressional session. This, combined with the nations uncertainty as to Lincolns military intentions, caused the remaining members to adjourn without setting a day to reconvene [sine die means without day]. Congress remains a Lincoln convened, executive, de-facto congress today which still, to our knowledge, adjourns sine die, and informs members of a re-convention date during their recess. Twenty eight days prior to congress adjourning sine die, the territory of Colorado was established and would have taken 30 days to properly form. President Buchanan had been lining up Colorado, with gold claims found in Central City and Aurora, to be the war chest for the Unions war between the states; erroneously called the Civil War which it was not for Colorado was basically a union state. President Lincoln won the election, and continued with President Buchanans plans. The first territorial governor, Governor Gilpen, issued money as Union Notes predecessors to United States Notes called green-backs. On the treasury website, we find this page: http://www.ustreas.gov/education/ faq/currency/legaltender.shtml . . . captioned Legal tender status. in wet ink, on the presumption it is money, and deposits it into the privately owned non-federal Federal Reserve Bank. Upon receiving the bond, the Fed adds $1 billion dollars of the Peoples credit to their checking account at the US Treasury, and holds the bond as collateral for so-called loan. Private credit is thereby extended [sold] to the US Treasury by the Fed, in exchange for the United State promissory note Bond. Note this at the bottom of the page: United States Notes [USNs] serve no function that is not already adequately served by Federal Reserve notes [FRNs]. As a result, the Treasury Department stopped issuing United States Notes [USNs], and none have been placed into circulation since January 21, 1971. When Congress borrows money on the credit [of the people] of the United States, credit is created via bonds which are deposited in Federal Reserve banks. U.S. bonds, bills, and notes [USNs], constitute money (Supreme Court Legal Tender Cases, 110 US 421), and this money is deposited with the Fed as collateral for the National Debt [federal debt] which the Treasury expands [increases] by writing checks against the credit [of the people] of the United States created in their collective credit account (12 USC 391). For example, suppose Congress appropriates an expenditure of $1 billion dollars [i.e. spends $1 billion dollars]. To finance the appropriation [i.e. the purchase] Congress creates a $1 billion dollar bond by signing the piece of paper, as a promissory note, with a signature Under its constitutional power to borrow money, Congress is authorized to contract [create] debt, and whatever is borrowed must someday be returned. When Congress spends the private credit it buys from the Fed, each use of the private credit is a debt which must be returned to the lender, meaning the Fed. By using this private credit, the United States becomes obligated to someday return it to the Fed, thus creating the National Debt [ the federal debt] until the private credit is returned. However, if someone else accepts this private credit and voluntarily uses it to purchase services and goods, he too voluntarily incurs an obligation to return it after its use to the Federal Reserve Bank via the IRS. Actually the federal income tax involves two obligations: the obligation to file a return, and the obligation to abide by the Internal Revenue Code. The obligation to make a return of income for using the private credit of the non-federal Federal Reserve Bank is recognized in law as an irrecusable obligation:

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...a contractual obligation which is imposed upon a person without his consent, and without regard to any act of his own. Bouviers Law Dictionary (1914). A recusable obligation (according to Bouvier) is an obligation arising from a voluntary act. The voluntary use of private credit imposes the irrecusable obligation to file a tax return. If private credit is not used or rejected, then the operation of law imposing the irrecusable obligation does not apply. In Brushaber v. Union Pacific RR Co., 240 US 1 (1916), the Supreme Court affirmed that the federal income tax is an indirect taxes, which includes duties and excises. The personal income tax arises from a duty (i.e. a charge or a fee) which is voluntarily incurred, subject to the rule of uniformity. A charge is a duty, or an obligation, binding upon he who enters into it, which may be removed, or taken away, by discharge (performance). Bouvier, p 459. Our federal personal income tax is not really a tax in the ordinary sense of the word, but rather a burden, or obligation, which the taxpayer voluntarily assumes, and the burden of the tax falls upon those who voluntarily use the private credit of the non-federal Federal Reserve Bank. Simply stated, the tax imposed is a charge, or rental fee, upon the use of private credit, where the amount of private credit used, measures the degree of financial obligation. The personal income tax provision, of the Internal Revenue Code, is private law rather than public law. A private law is one which is confined to particular individuals, associations, or corporations (50 Am.Jur. 12 p 28). In the instant case the revenue code pertains to taxpayers. A private law can be enforced by a court of competent jurisdiction when statutes for its enforcement are enacted (20 Am.Jur. 33.

pg. 58, 59). The distinction between public acts and private acts is not always sharply defined when published statutes are printed in their final form (Case v. Kelly, 133 US 21 (1890)). Statutes creating corporations are private acts (20 Am.Jur. 35, p 60). In this connection, the Federal Reserve Act is private law. Federal Reserve banks derive their existence and corporate power from the Federal Reserve Act (Armano v. Federal Reserve Bank, 468 F.Supp. 674 (1979)). A private act may be published as a public law when the general public is afforded the opportunity of participating in the operation of the private law. The Internal Revenue Code is an example of private law which does not exclude the voluntary participation of the general public. Had the Internal Revenue Code been written as substantive public law, the code would be repugnant to the Constitution, since no one could be compelled to file a return and thereby become a witness against himself. Under the fifty titles listed on the preface page of the United States Code, the Internal Revenue Code (26 USC) is listed as having not been enacted as substantive public law, conceding that the Internal Revenue Code is private law. Bouvier declares that private law relates to private matters which do not concern the public at large. The voluntary use of private credit imposes upon the user the quasi contractual or implied obligation to make a return of income. In Pollock v. Farmers Loan & Trust Co., 158 US 601 (1895), the Supreme Court declared the income tax of 1894 repugnant to the Constitution, holding that taxation of rents, wages and salaries must conform to the rule of apportionment. However, when this decision was rendered, there was no privately owned central bank, issuing private credit and currency, but rather public money in the

form of legal tender notes and coins of the United States circulated. Public money is the lawful money of the people of the United States which the Constitution authorizes Congress to issue, conferring property rights, whereas the private credit issued by the Fed is neither money, nor property, permitting an equitable interest but denying allodial title to the goods, i.e. you cannot buy anything with Federal Reserve Notes. We have two competing monetary systems today: The Federal Reserve System with its private credit and currency, and the public money system consisting of legal tender United States Notes [USNs] and coins. You can use the public money system, paying all bills with United States Notes [USNs] and coins, if the notes can be obtained, or you can voluntarily use the private credit system belonging to the non-federal Federal Reserve Bank and incur the obligation to make a return of income. Under 26 USC 7609, the IRS has carte blanche authority to summon, and investigate, bank records for the purpose of determining tax liabilities, or discovering unknown taxpayers (United States v. Berg, 636 F.2d 203 (1980)). If an investigation of bank records discloses an excess of $1000 dollars in deposits in a single year, the IRS may accept this as prima facie evidence that the account holder uses private credit and is therefore a person obligated to make a return of income. Anyone who uses private credit bank accounts, credit cards, mortgages, etc voluntarily plugs into the system and obligates himself to file. A Taxpayer is allowed to claim a $1000 dollar personal deduction when filing his return. The average taxpayer, in the course of a year, uses United States coins in vending machines, parking meters, small change, etc, and this public money can be deducted when computing the charge for using private credit.

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On June 5, 1933, the day of infamy arrived. On that date Congress enacted House Joint Resolution 192, which provided that the people [actually, HJR192 applies only to corporate persons, not to living people] turn in their gold coins in exchange for paper Federal Reserve notes. Through the operation of congressional law, HJR-192 took us off the gold standard and placed us on the paper dollar standard where the dollar could be manipulated by private interests for their self-serving benefit. By this single act the people and their wealth were treasonously delivered to the international bankers of the world. When gold coinage was thus taken out of circulation, large denomination Federal Reserve notes were issued to fill the void. As a result, the public money supply in circulation was greatly diminished, and the debt-laden private credit of the Fed increased. This action made private individuals who had been previously exempt from federal income taxes now liable for them, since the general public began to use and consume large amounts of

Note that all case law prior to 1933, affirmed that income was a profit or gain arising from a government granted privilege. Since 1933, however, case law no longer declares income to be exclusively corporate profit or gains, or that it arises from a privilege. So, what changed? Two years after HJR-192, Congress passed the Social Security Act, which the Supreme Court upheld as legitimate, imposing a valid income tax (Charles C. Steward Mach. Co v. Davis, 301 US 548 (1937)). It is no accident that the United States is without a dollar unit weight coin. In recent years the Eisenhower dollar coin received widespread acceptance, but the Treasury minted them in limited number, which encouraged hoarding. This same fate befell the Kennedy half-dollar, which circulated as silver sandwiched clads, between 1965 and 1969; these too were hoarded for their intrinsic value, and not spent. Next came the Susan B. Anthony dollar, an awkward coin which was instantly rejected, as planned.

The unit that remains is the privately issued Federal Reserve Note with no viable competitors. Back in 1935, the Fed persuaded the US Treasury to discontinue minting silver dollars, because the public preferred them, over dollar bills. It is no accident that the public money system has become awkward, discouraging its use, as planned. A major purpose behind the 16th Amendment was to give Congress the authority to enforce private law collections of revenue. Congress had the plenary power to collect income taxes arising from government granted privileges, long before the 16th Amendment was ratified, and the amendment was unnecessary, except to give Congress the added power to enforce collections under private law, of income from whatever source. So, the Fed got its amendment and its private income tax, which is a bankers dream but a nightmare for everyone else.

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ad Christi potentium et gloriam (for the power and glory of Christ)

Maine Republic Free State News, 3 Linnell Circle, Brunswick, Maine 04011 http://maine-patriot.com / drobin88@comcast.net