Honest Money Part Three - Coinage Acts from 1834-1900
by Douglas V. Gnazzo. October 25, 2004
COINAGE ACTS FROM 1792 - 1834
The various monetary acts from 1792 until the act of 1834 were not of any important consequence and did not stray far from the original constitutional plan. Most of the acts had to do with "regulating" the value of foreign coinage with our own coin. The first act of major importance was the Act of 1834.
COINAGE ACT OF 1834
As stated within the Constitution, Congress has been granted the power to "coin money" and to "regulate the value thereof". The Original Coinage Act of 1792 established the ratio of silver to gold at 15 to 1.
The Coinage Act of 1834, in keeping with the Congressional authority to regulate the "value" of coinage, set new "values" for domestic coins - redefining the eagle as 232 grains of pure gold.
Due to the workings of Gresham's Law, one metal had become dearer and the other farther, as gold coin had almost ceased circulating for several years. The reason being that although the exchange value of the metals had been fixed in regards to coinage, the market value of the metals as commodities continued to change.
The commodity price of gold appreciated relative to its exchange value as currency, this caused gold to stop circulating as coin and to be melted down and or exported for profit. Congress thus raised or regulated the exchange ratio to attempt to stop this problem.
The Act of 1792 had set the weight at 247-1/2 grains of pure gold, or at 15 to l ratio with silver. The Act of 1834 set the weight at 232 grains, or at a 16 to 1 ratio.
Congress did this to "regulate" the value of silver to gold according to the then current and prevailing free-market exchange ratios of the two metals.
As we have previously seen, this is one of the inherent complications or problems with a bimetallic system of coinage that "fixes" a statutory exchange ratio between silver and gold, as opposed to letting the free market forces of supply and demand determine the correct ratio.
The House Select Committee even debated this exact issue on the floor of the house. It was noted that the real purpose of the mint is only to assure that the coin stamped was of a certain weight and fineness. If that weight were stamped in figures or numbers - as opposed to "dollars" - it would be all that is needed - the free market could then be left to decide the appropriate exchange ratios.
As representative Gorham stated, "go into the market; there the average of demand and supply would be accurately fixed, and there only". If Congress had followed his advice, there is the strong possibility that we would not have the present monetary mess of irredeemable paper fiat currency that we currently have.
Which begs the questions we have previously mentioned: why didn't Congress listen to such wise advice? And why did Congress ever construct and allow a bimetallic coinage system that included such an inherent flaw? Was it just an oversight - or sight deceptively focused? And once again - who was doing the focusing? And on what "mark" or goal?
COINAGE ACT OF 1837
The Act of 1837 changed the purity ratio of both silver and gold coin to 900:1000 or 9/10ths purity. The new ratio changed the total metal grains of a silver dollar coin to 412.5, but did not alter the original silver content of 371.25.
The Eagle at 9/10ths purity of 258 total grains was 232.2 grains of pure gold, keeping it within .086% of its value of the Act of 1834.
Note that up to this time, although the above two acts did cause gold coin to once again circulate as currency, especially when coupled together with the California gold rush - technically or statutorily the Nation was still on the constitutional silver standard - although a "populist" gold standard was beginning to be "favored" and used.
COINAGE ACT OF 1849
The Coinage Act of 1849 created the first true "gold dollar" which contained 25.8 grains of total metal and maintained the purity ratio of 900:1000. The Act also created the famous Double Eagle or $20 gold piece.
However, although a gold dollar now existed, as well as a $20 dollar gold piece - the United States was still on the Constitutional Silver Standard - which cannot be changed without a constitutional amendment.
Congress had been very careful in their wording of this act not to change the constitutional definition of a dollar as being a specific weight of silver, as the act reads: the new "gold dollar", not as a "dollar", or the "dollar", but as being "of the value of one dollar". It must be admitted - they were clever.
Once again, the above is not mere semantics; it is about the explicit definitions of very important and subtle issues - issues of constitutionality - issues as to just what "money" and "dollar" refer to, according to the Constitution. It is by such subtle changes, that certain "interests" have gained control of our monetary system - ever so slowly, ever so methodically, ever so deceitfully, and ever so destructively.
Thus the Constitutional definition of a dollar was still in effect, but now there was a gold dollar that had the value of the original constitutional dollar, which was still defined as the silver dollar of 371.25 grains of silver. The battle between silver and gold was heating up.
COINAGE ACT OF 1853
The act provided for a new "half dollar" of 192 grains, 9/10ths pure silver. This meant that two coins contained 345 - 3/5 grains of pure silver - 93.1% of the "value" of the original constitutional silver dollar. However, Congress limited the full legal tender of these coins to payment of debts not exceeding 5 dollars.
Thus Congress had placed these "subsidiary" coins "not on the same footing" as the other coins. The given reason for minting these new half dollars was that since the coinage act of 1834 had changed the legal exchange ratio between silver and gold to 16 to 1 (from 15 to 1), gold coin had re-entered into circulation as planned.
However, it was originally believed that gold would also continue to appreciate against silver. With the advent of the large discoveries of gold in California and Australia more supply came onto the market and gold depreciated compared to silver.
Moneychangers could make easy profits by melting down silver coins, and exporting the resulting bullion abroad. Silver coins were now ceasing to circulate. In an attempt to alleviate this situation, Congress minted the new "subsidiary" silver half dollars.
This type of legislation provides more hints that behind the scenes or halls of Congress, was lurking the idea of moving to a "gold standard". Discussions in the Congressional Records from this time support such a view. First gold had been forced out, now silver was under attack.
CONCLUSIONS OF COINAGE ACTS TO DATE
From 1792 up until the advent of the Civil War, Congress had fairly consistently followed the monetary policy of the Constitution. Although several changes had been made to the original system as stated in the Coinage Act of 1792, some of the changes being obviously questionable in regards to both their common sense and intent, still none had parted too far astray from the original policy of 1792.
Congress had followed the directive to coin money: of silver, gold and copper metal. The standard and definition of the dollar remained the Silver Dollar, as expressed by its intrinsic value in weight and fineness - 371.25 grains of silver.
But very subtle changes can be seen taking place, changes that would bear the bitter fruit of even greater and graver consequences: of irredeemable paper fiat and never-ending debt.
THE 1869 ACT TO STRENGTHEN THE PUBLIC CREDIT
This seldom discussed Act, when coupled or taken together with subsequent Coinage Acts of 1873, 1878, 1890 and 1900 (as will be shown), is so revealing of the prevailing collusion between government legislation and the elite moneyed interests; and of their behind the scene efforts to create a credit based system of commerce and industry, by funding the currency with interest bearing bonds; thereby creating a permanent public debt, with a perpetual interest rate debt service stream to enrich themselves, at "We The People's" peril and loss; that a quote of the entire Act is called for:
"In order to remove any doubt as to the purpose of the government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin, or its equivalent, of all the obligations of the United States not bearing interest, known as United States notes, and of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold or silver. But none of said interest-bearing obligations not already due shall be redeemed or paid before maturity, unless at such time United States notes shall be convertible into coin at the option of the holder, or unless at such time bonds of the United States bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin. And the United States also solemnly pledges its faith to make provision at the earliest practicable period for the redemption of the United States notes in coin."
What this Act does, is to enhance the value of the Treasury Bonds that Congress had issued in 1862-1864 to fund the Civil War (soon to be examined), that were sold at a deep discount of upwards to 50%, because of their sale and redeemability in Greenbacks.
Furthermore, the Act raises the value of the Greenbacks, by pledging to redeem them in coin - as opposed to the original Greenback issuance, that although they stated, "payable to bearer", were not actually redeemable in coin, as the government had suspended specie redemption until 1875-79.
When taken together with the above referenced monetary Acts, it is evident that the elite moneyed interests were having their cake and eating it as well - while the common man paid the tab. As will shortly be shown, the elite international banking cartel was the buyer of most of the bonded debt, using one August Belmont - the Rothschild's American agent, as the middleman.
Of particular interest, is that at this time, Mr. Belmont was the Chairman of the National Democratic Committee; and became involved in the very messy issue of what amounted to the very purposeful and intended "defrocking" of their Presidential candidate, just weeks prior to the election.
The resulting (and intended, at least by the money powers) elected candidate was none other than President Grant. It is one of the most amazing coincidences in history, that the new President's first official act, signed into law, upon being sworn into office, was: The 1869 Act To Strengthen The Public Credit! It should have been named, The 1869 Act To Enrich The International Banking Cartel.
COINAGE ACT OF 1873
In the Coinage Act of 1873, Congress for the very first time stated that gold coins of the "one-dollar piece", which contained 23-22/100 grains of fine metal - "shall be the unit of value."
As previously shown, however, the Constitutional "dollar" was a specific silver coin of a standard weight and fineness. Without a Constitutional amendment to change the original standard, the Coinage Act of 1873 that purports to effect such change, is undeniably unconstitutional.
The Act also stopped the minting of Silver Dollars, which is beyond question an unconstitutional act - once again, requiring a constitutional amendment authorizing such change. Now, on the face of it, it would appear that this act demonetized silver coinage, although unconstitutionally; and placed the new gold dollar at the head of the class as the standard - but did it?
Well, not exactly - as it seems that "someone" thought of covering their butt - for the following verbiage is part and parcel of the Act: "...this act shall not be construed to affect any act done, right accrued, or penalty incurred, under former acts, but every such right is hereby saved", even if such "acts done" and "rights accrued" were "inconsistent" with the 1873 Act.
All of which basically means that we were still technically (statutorily) on the Constitutional Silver Standard, but practically (as in usage) on the new gold standard - so although the powers that be were trying to make it appear, through illusion and delusion, that silver had been demonetized - in truth it had not.
However, such false beliefs or lies, when told often enough, for long enough - end up becoming the accepted state of how the general public perceives things to be, which was the intended goal of those that were manipulating the "appearances", by the various "changes" we have seen implemented throughout our monetary history - showing that our monetary policy has devolved, not evolved, and that unseen hands were guiding such change.
Of particular interest in regards to the Coinage Act of 1873, which arguably has the infamous distinction of being the first unconstitutional coinage act passed by Congress, is the question as to who was the "author" or guiding hand behind the act? None other that Senator John Sherman. But was he under the influence of "others?"
THE BATTLE FOR SILVER
Under the Constitutional system of free coinage of silver and gold coin, the elite international banking cartel could not control the money - and thus could not control the country.
The life blood of the international bankers is credit, debt, and interest - as issued by paper money and debt obligations - especially government debt obligations that can be monetized and circulated as the currency in use.
The moneyed interests of London and New York viewed silver as a powerful enemy. New discoveries of large Western silver mines worried the elite bankers: that a proliferation of silver coin would deny them, what they believed, was their inherent birthright: to control the People's money. Such beliefs run rampant in the blueblood of "royal" aristocracy, providing toxic effects that poison the unwary host, with delusions of superiority over his fellow man.
Subsequently, the position taken by this monopoly was a conspiracy to demonetize silver. This would enable the moneyed interests to maintain their grasp on the property of the people. And this war was not being fought just in our country, but in Europe as well - home to the cartel's place of birth and origin.
Part of this plan entailed a fight to be waged against the standard silver dollar, which was correctly seen to be the symbol and standard of Honest Money; in order to sustain the supremacy of the London and New York bankers as the great moneychangers and powerbrokers of the world.
"We The People" retain an inalienable right to create and control our own medium of exchange, through our elected representatives in the Congress of the United States, as established by the Constitution of The United States. When the British challenged such rights, the Colonists went to war.
But the war for supremacy and control of the money did not end with the Paris Peace Treaty at the climax of the Revolutionary War. The battle has raged on and continues to this very day.
It is no longer a battle fought with cannons and guns, but with stealth weapons of mass destruction: paper fiat, structured finance, collateral debt obligations, mortgaged backed securities, GSE's, futures and options, SDR's; and the ultimate tool of devastation: derivatives, which carry the seed of self-destruction within its womb.
From 1862 until 1873, senator John Sherman was the chairman of the finance committee. Through his hands passed the legislation that controlled the finances of our country. He was unquestionably the predominating financial powerbroker within the government at the time.
Napoleon III, the Emperor of France, on the 4th of January 1867, extended an invitation to all the powers, including the United States, to hold a conference in Paris, for the purpose of extending the principles of the Latin Union throughout the commercial world.
Senator Sherman, upon receipt of the invitation of the Emperor Napoleon, visited London in the spring of 1867, just prior to the convening of this monetary conference. After consulting with the London bankers and financiers, he went to Paris where the conference was to be held.
In a letter to a Mr. Ruggles, the U.S. representative appointed by the Secretary of State to attend the Paris conference, Senator Sherman had this to say:
"Our gold dollar is certainly as good a unit of value as the franc, and so the English think of their pound sterling. These coins are now exchangeable only at a considerable loss, and this exchange is a profit only to brokers and bankers. Surely each commercial nation should be willing to yield a little to secure a gold coin of equal value, weight, and diameter, from whatever mint it may have been issued.
As the gold 5-franc piece is now in use by over 60,000,000 of people of several different nationalities, and is of convenient form and size, it may well be adopted by other nations as the common standard of value; leaving to each nation to regulate the divisions of this unit in silver coins or tokens.
If this is done France will surely abandon the impossible effort of making two standards of value. Gold coins will answer all the purposes of European commerce. A common gold standard will regulate silver coinage, of which the United States will furnish the greater part, especially for the Chinese trade."
It would seem that the good Senator was strongly in favor of a gold standard, as opposed to the constitutionally mandated silver standard, which without a constitutional amendment would be unconstitutional - all as a ways and means towards an international standard of money.
At the Paris financial conference, the international bankers, using the influence of England and the United States, through the personage of John Sherman, succeeded in defeating the adoption of a bimetallic standard, and a single standard of gold was agreed upon by the conference.
Upon returning to the United States, Senator Sherman introduced bill # 217, titled "A Bill in Relation to Gold and Silver" to the fortieth Congress. Within the first draft of the bill, Sherman recommended that silver be demonetized and a new gold standard be put in place. The bill was shot down and never passed. The year was 1867.
On April 28, 1870, Senator Sherman introduced a new bill to Congress. It was never stated that the bill proposed any major changes in the coinage system - let alone changing the constitutional standard from silver to gold, which it did propose. Instead, it was euphemistically called: "A bill revising the laws relative to the mint, assay office, and coinage of the United States."
I will not bore the reader with all the details of the passage of this bill, which included amendments, changes, the renumbering of sections of the bill to confuse the contents; to the contrived agreement not to read the final bill before the House, but to waver having the bill read; and to simply vote on its passage, as the bill was purposefully not brought up for discussion and vote until the end of the session.
The following words of William S. Holman sums it up most concisely: "I have before me the record of the proceedings of this House on the passage of that measure, a record which no man can read without being convinced that the measure and the method of its passage through this House was a `colossal swindle.' I assert that the measure never had the sanction of this House, and it does not possess the moral force of law."
There is much more that could be said on this one subject - enough to fill a book, suffice it to say that what has been offered is sufficient evidence that a battle between the moneychangers and powerbrokers of the world for control of the People's money and possessions has been and still is - raging on; and that their influence had infiltrated the halls of Congress.
The demonetization of silver will be seen to be just one part of the plan to place the United States and the world on a gold backed standard, to be followed by a totally fiat paper system; all carefully planned and orchestrated steps to bring about a global system of paper currencies; with the final goal of a one world fiat currency - founded and based on a system of perpetual credit and debt of "We The People" - a system no less oppressive, then the bondage of feudal slavery and tyranny.
The idea was borne in infamy, by the elite international bankers, and then pedaled to the United States, Germany, France, and the rest of Europe. The war reparations that France had to pay were involved, as well as foreign trade with India and China, and other eastern nations that were on a silver standard, and the effects all this had on foreign "exchange" and trade, especially to the international elite of England and Lombard Street. As Baron Rothschild once said, "I care not who is King or Queen, as long as I control the money."
COINAGE ACT OF 1878
The Coinage Act of 1878 authorized Congress to restore the coinage of the standard silver dollar of the weight of 371.25 grains of silver, and to make it legal tender, as stated in the Act of 1837. However, there were some distinct and most curious additions written into the statute.
The Act mandated that Congress was to purchase the silver to be minted, in stated amounts on a monthly basis. This is not free coinage as established in the Constitution. And such actions beg the question: buy the silver with what?
From the Coinage Act of 1878 we read:
"Be it enacted, etc, That there shall be coined, at the several mints of the United States, silver dollars of the weight of 412 - 1/2 grains troy of standard silver, as provided in the act of January 18, 1837, on which shall be the devices and superscriptions provided by said act; which coins, together with all silver dollars heretofore coined by the United States, of like weight and fineness, shall be a legal tender, at their nominal value, for all debts and dues, public and private, except where otherwise expressly stipulated in the contract.
And the secretary of the treasury is authorized and directed to purchase, from time to time, silver bullion at the market price thereof, not less than $2,000,000 worth per month nor more than $4,000,000 worth per month, and cause the same to be coined monthly, as fast as so purchased, into such dollars; and a sum sufficient to carry out the foregoing provision of this act is hereby appropriated out of any money in the treasury not otherwise appropriated. And any gain or seigniorage arising from this coinage shall be accounted for and paid into the treasury, as provided under existing laws relative to the subsidiary coinage: Provided, That the amount of money at any one time invested in such silver billion, exclusive of such resulting coin, shall not exceed $5,000,000; And provided further, That nothing in this act shall be construed to authorize the payment in silver of certificates of deposit issued under the provisions of section 254 of the Revised Statutes."
Such was a far cry from the constitutional free coinage system that simply provided a government mint, whereby silver and gold bullion were converted into coin - silver and gold that was already owned and the property of the private individuals that brought the metals to the mint - not silver and gold purchased and owned by the government.
This meant that the government held title to the silver, and had paid for it with the issuance of government debt or notes - which basically means that "We The People" were indebted or obliged to pay the tab. Things were starting to get very interesting, to say the least - ever so subtly, ever more boldly, ever more effectively.
Not only were the rules being changed as to the ownership of the silver (government held title), but now there were also minimal and maximum limits as to the amount of silver to be purchased by the Treasury. At the lower limit of $2,000,000 worth of silver being purchased per month, such would give a yearly total of $24,000,000. Adding the $5,000,000 the Act allowed to ever be held in bullion at any one time, prior to minting into coin; a limited total of $29 million worth of silver was possible.
This effectively meant, that the Treasury, when and if it wanted to, could limit the minting of silver to $29 million. Also, the yearly production of silver at this time was almost twice this amount. This placed the fox in charge of guarding the chickens; by granting control to the Treasury, of the limits of the supply and demand factors of silver; and hence the price of silver.
Without doubt, this was not in keeping with free coinage of the Constitution. But why would the Treasury want to do this? - The plot thickens; the waters are becoming even more clouded and murky.
The Treasury also issued silver certificates for not less than ten standard silver dollars. This was the first issuance of silver certificates, and arguably an unconstitutional act of emitting bills of credit, as nowhere does the Constitution grant Congress the power of acting as a deposit bank.
The Act also authorized the President to confer with foreign governments to adopt a common ratio between gold and silver, for the purpose of establishing an international system of money. The idea of an international monetary system is most thought provoking, especially as The Constitution does not mention it anywhere.
As always, Senator Sherman seemed to raise more questions or issues then he ever answered. One such question is why did Sherman, while Secretary of the U.S. Treasury in 1878, authorize the sub-treasury department (a dept. of the U.S. government that held federal deposits) to become a member of the Clearing House Association, which was the organization of the major national banks of the elite moneyed powers; knowing as he did, that the Clearing House Association did not accept silver dollars or silver certificates in settlement of balances due from member banks?
Another provocative question is why did Secretary Sherman, in late 1878, issue an executive order to various ports of the United States, directing them to accept as payment for duties on imports, both Treasury Notes and U.S. Notes - knowing that the Act of 1862 that issued them - prohibited such? It would appear, that unseen hands were providing "guidance" - but towards what end?
All in all, although silver had rightfully been returned to its place as the standard, it also seems that yet another turn had been taken down the road to perdition - of monetary devolution towards our present state of irredeemable paper fiat - all acts being but precursors for a new world order of money and power. The art of illusion and delusion is seen to be the weapon of choice, as the ever subtle, ever destructive changes keep adding up, slowly draining the life blood of Honest Money, as originally stated in the Constitution.
SILVER PURCHASE ACT OF 1890
The Silver Purchase Act of 1890 continues further down the slippery path of the debasement of our monetary system. Although it appeared to be less radical then the previous Act of 1878, by repealing portions of the Act of 1878, the Act of 1890 actually contained even more questionable legislative provisions, especially in regards to their efficacy to succeed upon implementation; which provides yet more evidence that they were not intended to be put into successful practice at all, but were intended to "fail", so as to dishonor the use of silver coinage.
The Act stated that the Secretary of the Treasury was authorized to purchase silver bullion to the aggregate amount of 4,500,000 ounces, or as much thereof as would be offered in each month at the market price, not exceeding $1 for each 371.25 grains of pure silver.
Treasury notes of the United States were to be issued in payment for such purchases. The Treasury notes so issued were redeemable on demand, in coin, at the Treasury of the United States, or at the office of any assistant treasurer of the United States, and, when so redeemed, could be reissued.
But the Act also stated: "but no greater or less amount of such notes shall be outstanding at any time than the cost of the silver bullion and the standard silver dollars coined therefrom, then held in the Treasury purchased by such notes."
Further on the Acts says, "That the Secretary of the Treasury shall each month coin 2,000,000 ounces of the silver bullion purchased under the provisions of this act into standard silver dollars until the first day of July, 1891, and after that time he shall coin of the silver bullion purchased under the provisions of this act as much as may be necessary to provide for the redemption of the Treasury notes herein provided for."
So, when we put these two provisions together we find that the government is to purchase silver bullion, from which silver coins were to be minted, said bullion to be purchased with Treasury Notes, and said silver coins were to be held in the Treasury for the redemption of such notes.
Once again, the is not the free coinage of the original Constitutional system � the government is buying the silver with the People's money by issuing Treasury bonded debt, and furthermore, the silver was being held on account for redemption of the notes, which meant that most of the silver would not be put into circulation as currency.
Also, note in the first section where it says, "purchase silver bullion" not exceeding one dollar for each 371-1/4 fine grains. So an upper price limit has been set, but not a lower price limit. Maybe that's why the next section mentions, "any seigniorage arising from such coinage is to be paid into the Treasury."
And finally there is the section that reads, "Redeem such notes in gold or silver coin, at his (Treasury Secretary's) discretion". Note the use of the word "or", as opposed to "and."
I will leave it up to the reader to decide if this sounds like its was silver friendly free coinage for "We The People", or something else of a more sinister nature, as what affect would and did such policy have? Was silver being purposefully, albeit clandestinely, tarnished in gold's favor?
COINAGE ACT OF 1890
The coinage act of 1890 called for the prohibition of the minting of the one dollar gold piece, stating, "the piece shall not be struck or issued by the Mint of the United States." The provisions of the act also stipulated that the current circulation of the coins was to be called in and withdrawn and that "all laws and parts of laws in conflict with this act are hereby repealed."
Essentially, not only did this act demonetize the gold dollar, but it also repealed and ended the gold dollar as being "the unit of value", or statutory standard of the monetary system of coinage - hence ending the short lived "gold standard", as declared in the coinage act of 1873.
Yet another 180 degree turn in the long and winding road of our monetary history, intended to confuse and hide the final destination. What could possibly lie ahead?
COINAGE ACT OF 1900
Once again, Congress turned 180 degrees and now defined by statute that the standard of our monetary system was to be the gold dollar, stating:
"Be it enactedt that the dollar consisting of twenty-five and eight-tenths grains of gold nine-tenths fine, as established by section thirty-five hundred and eleven of the Revised Statutes of the United States, shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard, and it shall be the duty of the Secretary of the Treasury to maintain such parity."
This is the "gold standard" usually mentioned in most (but not all) writings and articles on the subject. Congress declared that "the dollar consisting of 23-22/100 grains of fine gold, as established by the Coinage Act of 1873", was to be the "standard unit of value".
So once again Congress declares the gold dollar to be the standard. Buried within the many provisions of the Act of 1900, however, are several issues that raise perhaps more questions then they answered.
In section III we read: "That nothing contained in this Act shall be construed to affect the legal tender quality as now provided by law of the silver dollar, or of any other money coined or issued by the United States".
Elsewhere it was stated, "all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard."
In light of the above two sanctions the following provisions are most curious. We find it stated that the United States Notes (Greenbacks) and Treasury Notes are no longer to be redeemed in either silver or gold coin, but only in gold of the new standard, thus excluding silver.
Next � what basically amounts to a general refunding of the national debt is stated - as existing outstanding bonds that were previously payable "in coin" (both silver & gold) - were now to be exchangeable for new bonds that were payable in gold only.
And finally, the act also authorized the issuance of silver and gold certificates, however, once again we find a most curious and puzzling provision - the prohibition of the gold certificates from being used for private debts.
If the purpose was to confuse the understanding - by illusion, delusion and pure deceit - the guiding hand was most adept. And who provided the guiding hand of this Act - none other than Senator Nelson Aldrich - whom we will see also guided the Federal Reserve Act into fruition.
SUMMARY OF THE STANDARD OF 1900
- The one dollar gold coin was by statute the "standard", meaning a "gold standard."
- All forms of money (which would include the silver dollar) were to be kept at a parity of value with the new standard.
- This meant that 23-22/100 grains of fine gold (the new one dollar gold standard) was at parity (equal) to the original silver dollar of 371-1/4 grains of silver.
Essentially what this meant was that Congress by statute had "changed" the standard from silver to gold and kept their value equal or at parity; and that although a populist or practical usage of gold had been put in place, the original constitutional standard of silver was still in effect; as without a constitutional amendment, which has never been passed - "an unconstitutional act or law is as if it never occurred or had been passed - and is null and void."
So the �gold standard� of 1900 was not the monometallic gold standard that many claim or believe it to be. It was just another form of what had always been a very "back and forth" duometallic standard of silver and gold. But as we have seen, this was by subtle design - not by mistake or accident. The intended goal of a pure paper fiat currency that monetized all government debt was lurking in the shadows, waiting to be unveiled.
Of intriguing interest and particularity, are the discussions and provisions within the act dealing with Treasury Notes and Bonds and United States Notes. It seems like an awful lot of talk about paper and debt was involved for an act that was purported to establish a �gold standard�. What was all this �talk� really about?
Senator Bate seemed to know what all the talk of notes and bonds was about, as he had this to say during the Congressional debates on the Act of 1900:
"It was essentially provided in the National Bank law that they should take these bonds of the United States - not State bonds or corporation bonds, but bonds of the United States - upon which they are to base their operations. That is now essential. They had, exclusive of the (1894-95) bonds, $685,000.000. How many banks are there in the United States? More than 3,500, with a paid in capital of more than $605,000.000. So when the bonds due in 1907 are taken up, there will be but little left to bank on. Therefore the banks must have more bonds.
They seek in this bill to renew the life of the bonds. They make it a bond for thirty years longer. It is the renewal and extension of the life of the bonds they are after, so that the national banks may flourish under existing laws. That is one of the main secrets of this bill. The banks are at the back and bottom of it."
BY DESIGN OR MISTAKE
We have seen that our original constitutional standard was silver with a bimetallic coinage system of gold and silver. The original constitutional "dollar" was a silver dollar.
Over the course of our history, we have also seen that Congress went back and forth from favoring first one metal and then the other - with acts to demonetize one metal and then the other. Upon close scrutiny it "appears" to be quite a confused and misunderstood and applied system - adopting first one set of rules and then another, then returning back to the original and so on. But appearances can be deceiving.
All of which indicates that either none of our elected representatives for almost 200 years understood monetary theory and how to apply it to implement a workable monetary policy; or - what other choice are we left with? Perhaps there is an explanation that works, but the question is: for whom does it work?
We have seen that "We The People" established and ordained the Constitution, which in turn created Congress, granting them certain explicit delegations of power in order to form a more perfect "Union": of and for - "We The People."
But we have also seen that there is an elite moneyed interest that is always at odds with the Constitution and the People - and continually tries to, and does, circumvent the Supreme Law of The Land; in order to establish its order over and above the People, by slowly gaining control of monetary policy and then all trade and commerce. So just exactly "who are these guys?"
We have thus far only seen their minions at work, as "they" choose to remain in the shadows. Let's cast some light on the shadows and see who is lurking therein. First we will examine the most important Treasury note issuances, as this will provide additional background for an easier understanding of the unseen guiding hands. As has been said - follow the money.
© 2004 Douglas V. Gnazzo
All rights reserved. Any republication without written permission
of author and Financial Sense prohibited.
12/09/2004 Honest Money, Part VIII: Final Summary and Conclusions
11/30/2004 Honest Money, Part VII: The Moneychangers - Secrets of the Temple
11/22/2004 Honest Money, Part VI: The European Connection
11/15/2004 Honest Money, Part V: History of American Money and Banking
11/01/2004 Honest Money, Part IV: Treasury Notes
10/25/2004 Honest Money, Part III: Coinage Acts from 1834-1900
10/20/2004 Honest Money, Part II: Silver Standard with a Bimetallic Coinage System
10/20/2004 Honest Money, Part I: The Constitution and Honest Money