services offered by Anthony L. Hargis & Co. represent an alternative to those
offered by the Federal Reserve System. Do we need such an alternative? Are we
engaged in a game here? Or, are we engaged in an attempt to avert the
extinction of the American People?
regard government as little more than a band of pirates and robbers. Some
people regard it in less gentle terms. They all seek to avoid its rapacity; and
some seek to improve or abolish it. One of the most common practices that
people employ to avoid the reach of pirates is to use cash for as many of their
transactions as possible. These people imagine that they do a noble thing, that
they deprive pirates of strength. They do no such thing. Instead, they give
their own strength to pirates and they embrace a most hideous – but
well-concealed – practice.
Let us briefly review the history of banking in
this country. For the first seventy years of this country, bank notes were
issued against gold by private banks. It has been estimated that, by the time
of the Civil War, there had been seven thousand private issues of bank notes, of
which five thousand had failed. While there were countless reasons for these
failures, probably the largest category of failures could be accounted for by
the bankruptcy laws and the inherent corruption of government. In other words,
many of the failures were intended. The process would follow this pattern: the
a.establish a “bank,” take in gold as
deposits and issue bank notes against the gold;
b.take two or three percent of the gold and
distribute it to judges, prosecutors and politicians;
c.remove another fifty to seventy per cent of
the gold from the reach of the “law” but still under the control of the looters
The judges, prosecutors and politicians, of
course, would know exactly how to “express their appreciation” for the presents
received from the looters. (This practice may be applied in other kinds of
business; the Enron debacle follows this pattern exactly.)
Altho many or most of these bank failures were facilitated by government
policies, the federal government, in 1863 pretended to offer a solution with the
National Banking Act, 12 Stat. 665. This Act among other things,
a.created a bank note issued by the U. S.
Treasury thru private banks known as “national banks” and
b.imposed a ten percent duty on all private
The national banks would obtain
the Treasury bank notes by depositing “U. S. bonds” with the U. S. Comptroller
of the Currency and, in exchange, would receive currency equal in value to
ninety percent of the market value of the U. S. bonds. The bonds were still
owned by the banks but possessed by the Comptroller. Hence, the U.
S. Treasury continued paying six per cent interest to the banks while the banks
were required to pay to the U. S. Treasury two per cent per year on the currency
obtained by the banks. And so, for every one hundred dollars of bonds deposited
with the Comptroller, the banks would earn six per cent on one hundred dollars
and pay two per cent on ninety dollars.
This opportunity to earn
interest on otherwise non-interest earning gold reserves and the ten per cent
duty on private bank notes practically eliminated all private bank notes within
a few years. What’s more, the Act had the effect of making U. S. government
debt, instead of gold, the security, or reserves, for all American currency and
bank deposits. In other words, American currency lost its gold backing in 1863
– not 1933, as most people believe.
A bank note is a
promissory note: it means that, the one issuing the note is receiving credit
from whoever is holding the note. Thus, when I give a gold coin to a bank and
receive a bank note in exchange, I am lending a gold coin to the bank – if the
bank note is issued by the bank. If the bank note is issued by the U. S.
Treasury, I am lending a gold coin – I am providing credit, to the U. S.
Treasury. When I buy a pair of shoes with the bank note, the shoemaker is now
providing credit to the bank, or the U. S. Treasury.
Thus, when we hold a
bank note, we give our credit – our strength – to the bank, or government, that
issued the note. We give the bank, or government, our strength to use for
good, or evil.
When Congress mandated
that U. S. bonds, instead of gold, be used as bank reserves, Congress
centralized credit into the hands of the U. S. Treasury. This was done fifteen
years after the publication of The Communist Manifesto, in which it was
explained that one of the conditions required to destroy private property in a
country was the “centralization of credit in the hands of the state by means of
a national bank with State capital and an exclusive monopoly” to issue bank
notes. The National Banking Act was pushed thru Congress by Thaddeus Stevens, a
former lawyer for the New Harmony Society, a communistic society in which the
communist manifesto was developed and from which Karl Marx learned, thru Robert
Owen and Frederich Engels, what he was hired to write.
The National Banking Act
was substantially amended and enlarged in 1913. We know this piece of
legislation as The Federal Reserve Act, 38 Stat. 251. Hence, the Federal
Reserve Act is nothing less than the enabling legislation for the fifth plank of
the Communist Manifesto. Can we condemn the Federal Reserve System on grounds
more substantial than the fact that we can label it with the pejorative
“communist?” We can if we wish to avoid annihilation.
As noted, the National
Banking Act and now the Federal Reserve Act mandate that no paper currency can
circulate in this country except that which has been issued against U. S.
government obligations (or negligible amounts of “private” obligations which are
ultimately guaranteed by the U. S. government). Congress has mandated that, if
there is to be a paper currency in this country, there must be government debt:
if the U. S. government were debt free, there could be no currency.
Hence, the demand for currency is the demand for more government debt.
What are the practical
consequences of this? Government debt is a two-sided coin, with the events of
each side separated by five, twenty or even one hundred years. The events
associated with the first side are the borrowing of money by the government and
disbursing it to special interest groups. The event associated with the second
side is the imposition of taxes upon future generations to retire the debt.
Government debt, in other
words, is the process by which one generation of people financially cannibalizes
its children, and generations of grand children to come. It is done without the
consideration, without the comprehension and without the consent of those upon
whom the burdens are imposed, and, with no benefits accruing to them. If this
financial cannibalization is to succeed – if government debt is to be retired,
it requires the utter annihilation of the rights, property and lives of
Americans yet to come on the scene.
In other words, thru the
enabling legislation for the fifth plank of the Communist Manifest, that is, the
Federal Reserve Act, Congress has mandated the total annihilation of the
American people. Congress has created a situation where, if we want a
circulating currency – if we want economic activity perceptibly greater than
Stone Age conditions, we must financially cannibalize our children – as prior
generations have done to us. The demand for Federal Reserve notes is
nothing less than the demand for financial cannibalism.
We must repeat this,
the demand for FR notes is the endorsement of cannibalism. We can invent
all the excuses we want in order to justify the use of cash – but none will
change its nature; none will avert its consequences.
If we believe the
government is evil, we contradict ourselves by using its currency. Justice
requires that we search for means to withdraw our support of such a government.
If we desire to deprive it of strength, we must minimize our use of cash and use
a gold-denominated currency whenever possible.
[We used to offer that
alternative. The government confiscated and destroyed the business; see letter
dated 229 January 20.]
Anthony L. Hargis & Co.
2427 N. Tustin Av. Suite B
Santa Ana, Cal 92705