Part I. Banking and Monetary Reform

SECTION 2. FINDINGS
 

The Congress finds that —

(1) an excessive debt, both public and private, is the cause of much of this nation’s economic distress.

(2) outdated banking, monetary and fiscal practices, supported by national statutes, codes and regulations, led to the creation of a large portion of this debt.

(3) the nation’s privately owned central banks of the Federal Reserve System exercise significant control over the national economy through manipulation of monetary policy.

(4) the private character of the Federal Reserve System was recognized in the Act creating the system when Congress reserved to itself “[t]he rights to amend, alter, or repeal” the authorizing legislation. (38 Stat. 251, 275)

(5) the reservation of “[t]he right to amend, alter, or repeal” the Act establishing the Federal Reserve System displays Congressional concern to obviate any possibility that the private parties comprising the Federal Reserve System might acquire, directly in or through application of the statute, any rights, powers, privileges or immunities that the courts could later hold were constitutionally immutable.

(6) the federal courts have also recognized that, although the Federal Reserve System may perform various functions purportedly on behalf of the national government, it is not an agency of the United States. Lewis v. United States, 680 F.2d 1239, 1240 (9th Cir. 1982)

(7) the Supreme Court of the United States noted in 1896 that “National banks are instrumentalities of the Federal government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States.” Davis v. Elmira Savings, 161 U.S. 275

(8) the Board of Governors of the Federal Reserve System and the Federal Open Market Committee were given a mandate to “maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

(9) the performance of the Federal Reserve System, particularly in pursuit of its mandate to “promote …stable prices and moderate long-term interest rates,” has been considerably less than satisfactory. A 1950 dollar is worth only 18 cents in 1990, losing 82 percent of its value in 40 years.

(10) changes in the economic behavior of the American people, particularly since World War II, have greatly reduced the ability of the Federal Reserve System to regulate monetary policy.

(11) Federal Reserve System regulators struggle to maintain stability, hampered by conflicting goals and grossly inadequate monetary tools.

(12) the authority of Congress to issue irredeemable, legal tender paper currency, or to delegate such a power, finds no basis in Article I, § 8, cl. 5 of the United States Constitution, which grants Congress the power “To coin Money, [and] regulate the Value thereof.”

(13) the constitutional power “To borrow Money” found in Article I, § 8, cl. 2 does not authorize Congress to issue “Bills of Credit” or to delegate such a power.

(14) reconstruction of the national banking and monetary system can begin based on the unquestionably constitutional premises that:

(a) Congress has the power and duty to provide the nation with a sound monetary system; and,

(b) Congress has the power to borrow money; and,

(c) Congress has no power or privilege to emit bills of credit, nor to delegate such a power; and,

(d) Congress has the power and duty to protect commerce from irresponsible banking practices. 

Read Explanation and Details for Section 2.