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Leslie A.

Lummis,

Guma Trankilidad,J5,

Tamuning, Guam 96911

Logical Conclusions by The Socratic Method

WHY THE FED

WHY

In years past I subscribed to various newsletters. In


one of these I noticed an unusual reference to the Federal
Reserve System. The writer had mentioned that the "Fed"
received its basic currency from the U.S. Bureau of Printing &
Engraving for simply the cost of printing, $20.60 per 1,000
bills regardless of denomination.

Well, I was amazed! I wondered about this and


inquired where he got this information. In reply he sent me a
file of correspondence with Congressman Henry Reuss, Chairman
of the House Banking Committee, and Mr Donald Winn, Federal
Reserve Board.

The letter from Mr Winn did indeed verify that the


Fed purchased (?) U.S. Currency from the BP&E for simply
$20.60 per 1,000 bills, the cost of printing!

This seemed strange to me since banks, as well as


their clients must always post collateral and sign promissory
notes agreeing to return borrowed money by making monthly
payments of principal. Banks don't get money from the Fed for
simply the cost of printing and they certainly don't give
money to their clients, for less than full value. They expect
monthly payments!

Well then I realized that our U.S. Currency is only


involved in about 1% of transactions nationwide. The other
99% of the GNP is handled with checks so that on that
astronomical amount Uncle Sam doesn't even get two cents

for printing!

That might be understandable if the Fed were truly


Federal. So, I studied the status of the so-called Fed and
found that it was "semi-autonomous". Yes, the Board of
Directors is appointed by the President of the United States
but what about the 12 District Banks? Are they federal? No
they aren't. The courts have confirmed that they are owned
and operated by the local banks in each district.

Well we already suspected this because the local


banks have 3% of their capital invested with the District
Banks; their employees don't get paid with treasury checks;
and they are listed with other "agencies" in the World Almanac
as "semi-autonomous"agencies.

On a more personal level if you were contemplating a


business venture with someone but you were going to put up
100% of the cash then you would of course expect at least 50%
of the return or "take", would you not? Would you buy $100
preferred stock for 2 cents a share. I don't think so!

Well when I researched the circumstances under which


the so-called "Fed" was created by the efforts of Mr J.P.
Morgan, Mr Aldrich, Chairman of the Senate Banking Committee,
and two Germans by the name of Paul & Felix Warburg, who
couldn't even speak English, I became even more suspicious.
Were they were hired to set up a Central Banking System, which
would be really private but would be called "Federal"?

They were hired by J.P.Morgan, and Mr Aldrich,


related to the Rockefeller family by marriage and Chairman of
the Senate Banking Committee; and paid by Kuene Loeb of Europe
to set up what we now know as the "Fed", a central banking
system which is private, and not federal!

These two Germans were bankers from Warburg & Co, of


Europe, and they were paid $500,000 per year to work with Mr
Aldrich in Washington in order to accomplish their mission.
With the assistance of Mr Aldrich they succeeded, and so today
we have the so-called "Fed", a fictitious and fraudulent semi-
autonomous agency of the U.S. government.

Then I studied the procedure by which banks commingle


our deposits and put them at risk by lending our savings to
others without our permission. Economists refer to this
commingling practice as "fractional reserve" banking, a
questionable practice in accounting circles.

I referred to the U.S. Constitution and could not


find any legal basis whereby Congress can authorize a private
banking system, call it federal, and give them U.S. currency,
for simply the cost of printing.

But then I wondered why, WHY? Why didn't Congress


instruct the Treasury to "lend" our currency to the Fed ? Why
give it away ? Unable to find a logical conclusion to this
question I then asked myself:...'WHAT IF'.

What if Congress had "loaned" currency and the use of


its credit to the Fed years ago and had required periodic
payments ? In that event Uncle Sam would now have trillions
of dollars in the bank, instead of being trillions in the red!
Well, that seems logical, and had that been done Uncle Sam
wouldn't need taxes, or have to borrow from anyone to pay his
bills! Can this situation be corrected now? Yes, It can be
corrected. It's not too late!

Without recrimination we must recognize that the Fed


is simply a "middleman" in this operation. Although the Fed is
both fictitious and fraudulent, we must simply ask ourselves
do we need a middleman? Assuming we can clean up the Fed and
make it honest, the question still remains WHY? Why do we need
a fictitious middleman. The answer is: WE DON'T!

So let's devise a plan where Uncle Sam becomes an


end-user, as well as the official source of currency and
banking credit nationwide. This would involve "recycling" of
our currency, not that which is worn, dirty, or torn, but that
which is required to support a $6 trillion Gross National
Product.

Since the U.S. Constitution authorizes Congress to


create our currency it could also direct the Treasury Dept to
create Letters of Credit, sufficient to support a $6 trillion
GNP. If it were allocated among the 50 states according to
Congressional representation then the State Treasurers would
be the logical ones to wholesale our currency among the banks
in each state. An organization of State Treasurers would then
replace the fictitious Fed.

Then as we make our payments on loans, bonds etc the


payments would revert to the State Treasurer, and by him to
the U.S. Treasury Dept. The total nationwide from this
"recycling" procedure would more than cover our national
budgets and liquidate the federal debt.

In fact our tabulations indicate the annual return


from all banking operations would be of such volume that only
50% of the return would be required! The remaining 50% might
then revert to the states as their return for services
rendered.

As a basis for study we have suggested that Congress


might authorize an infusion of $6 trillion nationwide to
support a $6 trillion GNP. This figures out as about $500
billion per month. Although this may seem excessive to some we
must realize that the country has many nagging problems; that
an underwriting of our entire economic system must not be
underfunded, especially in the first year of its operation.

Subsequently this annual infusion of $6 trillion into


the national economy will be regulated by a Select Committee
of Congress. The federal interest rate would be pegged at 4%
and 6% for home mortgage loans. The amount of this annual
infusion will be regulated to control "inflation", not the
interest rate. It may be subject to quarterly change, up or
down, as determined by this "select Committee".

The operation as proposed will involve the


refinancing of mortgage operations (Pegged @ 6%); the floating
of Municipal & Gov't bonds; and factoring of production. It
may replace private financing and create individual funds to
support health, education, welfare and retirement accounts.

If all goes well the 50% received by each state for


services rendered will permit sharing with the counties, the
cities, towns, and school districts in every state.

All this can come to pass, if we simply eliminate the


Fed, the IRS and Taxes! We believe it can be done and done
quickly and have tabulations covering each state to prove it.

Young people who receive a regular paycheck with FICA


Deductions and Withholding Taxes are currently discouraged for
they know that these deductions for FICA will not be available
to them when they retire at 65 years of age.

The political situation in Washington has reached a


climax of desperation since the recent election. Every
pronouncement by those now in position of authority confirms
their desperation. Everyone agrees we need a change but no-one
can agree on what this change should be.

Our proposal would protect the younger generation as


well as the senior citizens. It would also provide the
required funds for education, health reform, crime control,
and the replacement of our aging infra-structure while
protecting us from a desperate Congress.

It would do all these things "In the Normal Course of


Business", with no taxes required of U.S. citizens. What more
do you want? Can you imagine, NO TAXES!

If you would like our six page mailer for a diagram,


Bio, and tabulations showing how this might help the people in
your state send us a SASE and a reasonable contribution to the
above address.