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Written by Subject: Currencies
Prior to the Declaration of War against the states and the people by the federal government in 1933 when they amended the Trading with the Enemy Act of 1917 to include all Americans as "enemies", thereby authorizing the federal government to nationalize the monetary system in the US (Section 5b of the 'Act' of 1917 'as amended' March, 1933, ), the United States had a semi-private currency system.
In fact there were 5 totally separate and distinct currencies in circulation up until that time.
#1 Federal Reserve Notes
 This is the one you are most familar with and the one we have now.
Back then, this was introduced as a competing private currency guaranteed by the US government and issued under charter - as it is today.  Except that today, the currency system has been nationalized and socialized.  There is only one charter that can issue currency... the Fed.  All other private currencies along with "lawful money" as defined in the constitution has been outlawed under the "continuing states of emergency" (see the 1973 WPA and Senate Report 93-549, 1973) declared in 1933.
#2 National Currency
National currency was currency issued by private national charter banks.  All the big banks issued their own currency against their deposits. Naturally 'deposits' at that time were "lawful" currency.  In other words, gold and silver or notes that could be redeemed in gold and silver.  That said, other than the fact that the bank did have to be chartered as a national bank and that the currency itself had to conform to certain standards, this currency was private.
Interestingly, the Federal Reserve Note was also considered National Currency issued from a private chartered bank.  Why?  Because it was (at that time).  Please see what the note was "secured" by as stated on the face of the bill.  Government bonds, as opposed to "lawful money" that all other private banks had to use to secure its private money.
#3 United States Notes
United States Notes were issued by the United States Government itself out of the Treasury of the United States (which is NOT the US Department of the Treasury!)  The Treasury of the United States is a lawful entity authorized by the Constitution.
It's important to note that while this was definitely not a "private currency", it was a competing currency and redeemable for "lawful money" as it states on the face of the bill and which is specified in the Constitution as being the required definition of a "dollar". 
#4 Silver Certificate
This is a 1923 silver certificate.
While this isn't entirely a "private" solution.  It's also not entirely a nationalized or socialized solution such as the Federal Reserve Notes we have today.  It's more of a 'service' that the federal government is providing so you don't have to carry around metal.  I mean that in all seriousness.  The federal government wanted to hold metal no less than you, I or any other bank, for various purposes (such as spending and lending, foreign policy or whatever).  They held your silver, but gave it back to you upon demand.  Or a bank would because they would take this note in trade.
#5 Gold Certificates
Like the silver certificates above, these are essentially "bearer bonds".  I.e. whoever bears the note can redeem it for lawful currency.
In Summary
If you believe yourself to be a "free marketeer", stop thinking in terms of what "we should do".  Stop attempting to impose your ideas of an ideal currency system on others.  Merely point out the disadvantages of the nationalized socialized currency system we operate under today.  Point out that in the no so distant past the US had a private currency system that worked quite well.  And advocate for privatization.
Private currencies DO work.  Nationalized socialized currency systems ALWAYS collapse at some point.
(Publisher added: This radio show explains this very well and is one of my favorite shows)

Declare Your Independence with Ernest Hancock Afternoon November 16th 2009  

Jeff Greenspan and Ernest discuss how the Federal Government got the power it has to enslave us. Trading with the Enemy Act of 1917
Senate Report 93-549

16 Comments in Response to

Comment by Ed Price
Entered on:

Right now, there is freedom to use any transaction method necessary or desired. I mean by the average person. The Fed's monopoly has weakened. It's part of the reason that Bilderberg is trying to determine what to do next.

The #1 reason that people are working with FRNs is, they don't realize how readily available and advantageous-to-use other money mediums are. Word is getting out via the Internet. And this is what scares the Fed and the big bankers.

The #1 restraint on medium and semi-large business that keeps them from using other money methods is, the income tax threat. The income tax is the key tool that drives the fear of using other money. Many companies would drop the U.S. Dollar in favor of gold and silver, in an instant, if there was a viable way to keep the change from showing up on the income tax thing. That's why many businesses have moved and are moving out of the U.S..

Even with the Internet ecurrencies, and things like Bitcoin, there still needs to be a way for businesses to move their tangible products without the hassle of currency conversions, conversions necessary so that they can pay the income tax (and other taxes). Keeping financial records just to pay the IRS is hard enough, to say nothing about the nightmare that it would be if things were calculated in more than one currency.

So, it's all about ignorance for the little guy, and its about tax expenses for business.

If the income tax up and disappeared today, with nothing put in place of it, most of the money laundering threat would disappear, and things would start to change. But the income tax won't go away until the Fed goes away. Why? The income tax is the main collection method that the Fed uses to get value for nothing out of the people.

Comment by James Eldridge
Entered on:

No matter what is attempted to be done to turn this around to benefit all people everywhere, it will never come to that desired outcome. Already it is too late as we see those people that have become elected officials doing what they are told by those that control the money system. Any attempt will be turned into a war against the people. The little people. You, me and everyone reading this from wherever they live. Those that are in power will not go out into that night lightly. Whatever does come this way soon will not be what anyone wants except those that control the money system.

Comment by John Green
Entered on:

PureTrust, so that's the point.

 If you remove the Fed's exclusive franchise (i.e. you allow private currencies), in theory (Gresham's Law), no one will demand FRNs and people will generally demand the highest quality currencies.

 Again, the issue is NOT the standard.  Let the free market determine that.  The issue is the exclusive franchise that the Fed holds, which turns our current currency into a nationalized socialized currency market.  Remove the franchise and the Fed either has to compete or  it will die.


Comment by Ed Price
Entered on:

Of course, the gold standard is not required. There is barter. And there are FRNs. The part that goes right over people's heads about a non-gold backed currency is, money is a middleman, especially money that is not gold and silver backed.

Now, a middleman is okay in some things. We need a middleman for many things that are too technical for us to each handle individually. But remember one big thing about the middleman. He gets a cut.

So, how big of a cut does the Federal Reserve Bank get? It gets the value of our income taxes - even if it doesn't get the income taxes directly. It gets inflation. And the value of the amounts of taxes and inflation money it gets amounts to multiple times the amounts of money that are actually used in transactions. It's called fractional reserve banking.

Who needs money that has inherent value like gold and silver? Certainly not the Federal Reserve Bank. What they are gradually getting is ownership of the whole country and the world through the widespread use of non-gold and silver backed Federal Reserve Notes.

Comment by John Green
Entered on:

 Someone said below in comments that they "prefer" the old fashioned gold standard.  But that's the POINT.  From the DEMAND side if that's what you prefer, in a non-national socialized currency market, then that's what you can HAVE.  However, if you are really a free-marketeer, then you will not attempt to extend YOUR preferences over the SUPPLY side.  The free market will provide the supply, whether pure old fashioned gold standard or any other possible standard people could come up with that others will demand.

Libertarians take note.  Your desire of exerting over others what "we should do" makes you NOT a free marketeer and, hence, not a libertarian.


Comment by Robert Emery
Entered on:

 Get your local communities up and running with Delvalley Silver bartering system.Find out how to become a hubmater for your area,

Comment by Powell Gammill
Entered on:

ah yes, I forgot about those Disney dollars:

Comment by Ned The Head
Entered on:

And let's not forget the Disney Dollar, available in all the popular denominations. As recently demonstrated by the Liberty Dollar bust, nothing is allowed to carry the name "dollar" but United States Currency meaning Disney Dollars are backed by the full faith and credit of the government. 

Invest with confidence!

Comment by Ned The Head
Entered on:

I was kind of enjoying the smackdown between Mish and Denninger on such issues. Alas, all that holiday cheer, peace and goodwill towards men ruined a perfectly good celebrity deathmatch.

I think it worthwhile to note that for a while there we had a certain competition in our coin currency in that it was variously gold, silver, nickel and copper. Not a bad little spread.

Comment by Don Cline
Entered on:

 Obviously these people have never read why the Articles of Confederation were thrown out and why the Constitution of the United States replaced it:  It was because of the "fluctuating medium of exchange" -- i.e., money not backed by anything of intrinsic value.  Read "A Caveat Against Injustice" by Roger Sherman, the only man to have signed all four documents formative of our nation.  People who don't learn from history are bound to repeat it.

Comment by William Henry Harris
Entered on:

I prefer the "Classic Gold Coin Standard." 

The presentation of past failures by political tricks will always go down the wrong way in the so-called free market. Only the above "standard" I mention will give back sovereignty to its People here in the North American Continent now called U.S.A....

Comment by Don Wills
Entered on:

blank person: Irony? I don't understand. Yes, I'm helping a political party shake things up - why is that ironical with respect to anything?

Comment by Anonymous
Entered on:

 Don, it's ironic that you're refounding the LP in WY.  The fact is that private currency WAS legal in the US until 1933 when the government declared all US citizens to be enemy aliens whose lawful money could be confiscated.  Then they confiscated it.  "Lawful money" is a constitutionally legal term and is defined in the constitution.  Today, as you aptly point out, the use of "lawful money" is illegal because under the continuing states of emergency which began in 1933, all charters enabing private institutions to issue money have been revoked and the one and only remaining charter remains with the Fed.

Comment by Tom Westbrook
Entered on:

yea tallysticks!

google 'open money'

Comment by Don Wills
Entered on:

Yes, a gold "standard" is not required. But the implication that we can just ignore the feds and do whatever we want is simply false. Private money, whether backed by metal or not, is illegal in the USA. Contracts may not be enforced by court systems, various taxes apply to all money conversions, and most importantly anyone who creates money that uses the term "dollar" goes to jail.

The solution: abolish all legal tender laws. Interestingly, if we can accomplish that goal, we don't even have to End the Fed, we can just ignore them. But if you think it's been hard trying to pass HR 1207, wait until you try to abolish legal tender laws!

Comment by Powell Gammill
Entered on:

This is a good point.  The market can choose if it wants a gold standard. 

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