Descent into Fascism
The U.S. Monetary System and Descent into Fascism an Interview With Dr. Edwin Vieira
by David Galland
Edwin Vieira, Jr., holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School).
For more than thirty years, he has practiced law, with emphasis on constitutional issues. In the Supreme Court of the United States, he successfully argued or briefed the cases leading to the landmark decisions Abood v. Detroit Board of Education, Chicago Teachers Union v. Hudson, and Communications Workers of America v. Beck, which established constitutional and statutory limitations on the uses to which labor unions, in both the private and the public sectors, may apply fees extracted from nonunion workers as a condition of their employment.
He has written numerous monographs and articles in scholarly journals, and lectured throughout the county. His most recent work on money and banking is the two-volume Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (2002), the most comprehensive study in existence of American monetary law and history viewed from a constitutional perspective.
He is also the co-author (under a nom de plume) of the political novel CRA$HMAKER: A Federal Affaire (2000), a not-so-fictional story of an engineered crash of the Federal Reserve System, and the political upheaval it causes.
His latest book is: How to Dethrone the Imperial Judiciary… and Constitutional “Homeland Security,” Volume One, The Nation in Arms.
We first met Dr. Vieira at our Casey Research Boca Raton Summit and were sufficiently impressed to want to hear more, and to share more, of his work with readers of The Casey Report.
DAVID: Before kicking things off, I’d refer readers to Dr. Vieira’s in-depth and excellent paper, “A Cross of Gold,” as that provides a more detailed analysis on how the corrupt U.S. monetary system might transition into something more honest and effective.
Getting started, from a big-picture perspective, technically speaking, is the current U.S. monetary system actually constitutional?
EDWIN: Well, technically speaking, factually speaking, legally speaking, no. In a word, no.
DAVID: Why not?
EDWIN: There are two levels to consider. First, there’s the straight currency level – what is supposed to be the official monetary unit. Then there is “other,” which I distinguish as different from the official monetary unit because the Constitution doesn’t prohibit private parties from creating media of exchange for their own uses, as long as those media of exchange are non-fraudulent and they’re operated in an otherwise honest commercial fashion.
But the official unit of currency is supposed to be the dollar, and I’ll tell you exactly what a dollar is – it’s 371.25 grains of silver in the form of a coin. That was determined as a historical fact in 1792. Actually the dollar was adopted before the Constitution was even written. It was adopted by the Continental Congress under the Articles of Confederation, the so-called Spanish milled dollar, which was the actual unit that was circulating then, because there had been essentially no coinage under the various colonial regimes in colonial America. So that’s the dollar unit.
Well, do we have that now? The answer is, “Well, essentially, no.” First, obviously they are not coining a true dollar, they coin a Liberty Silver Dollar, but that’s 480 grains, not 371.25 grains. And you have various gold coinage with dollar denominations on it, but those dollar denominations have no real relationship in terms of market exchange ratio to a silver unit of 371.25 grains.
So the short answer is that within the coinage system we don’t have what we’re supposed to have. We have silver coins, we have gold coins, but they’re not properly weighted or regulated. And then, of course, we have these base metallic coins, which have no constitutional status at all – at least with respect to being legal tender for their face values. So on the coinage side, we have a mélange and a mess. At least there is some silver and gold coinage, but it doesn’t meet the constitutional requirements.
On the other side, the so-called official paper money side, the Constitution does not provide for official paper money. What it does address are two provisions; the first, dealing with the states, specifically says, “No state shall emit bills of credit.” As a word of explanation, bills of credit were the founding fathers’ terminology for paper currency.
This is interesting because the paper currency they actually used and emitted were bills of credit that promised to pay something, typically gold and silver coins, specified on the face of the bill. So even those types of paper currency, fully redeemable paper currency, were outlawed for the states because the states had emitted them in vast excess. That was the historical basis for the outlawry.
Now, turning our attention to Congress, you need to recall that Congress only has the powers that are granted to it. You don’t look in the Constitution for prohibitions on Congress’s authority and assume that it can do everything that isn’t prohibited. You look for delegations of authority, and you assume that anything that hasn’t been delegated is prohibited.
If you look at the original draft of the Constitution in the Constitutional Convention, the Federal Convention of 1787, it said, “Congress shall have the power to borrow money and emit bills on the credit of the United States.”
That language was taken from the Articles of Confederation. The Congress operating under those articles had the power to borrow money and emit bills – emit paper currency – and they did it. They emitted the so-called continental currency from which came the phrase “not worth a continental” because they emitted so much of it that it depreciated very close to worthlessness.
At the Constitutional Convention, you had people in attendance who had been members of the Continental Congress. They had been members of various state legislatures. These were the leading political figures in the country. They had to a large extent been the ones who had emitted continental currency or had emitted various state bills of credit. So this was a question that wasn’t in some way alien to them as they had been involved in it only a few years earlier.
So the first draft of the Constitution was put forward with the same power that the Continental Congress had, and there was a debate. You look at Madison’s notes, and it was a rather vociferous debate, and they threw out the words “emit bills,” so that now that provision of the Constitution says, “Congress shall have the power to borrow money on the credit of the United States.” It says nothing about emitting bills.
Well, by hypothesis, if the power is proposed and then stricken from the final version, it doesn’t exist, right? You don’t need to be a Harvard law school graduate to understand that.
So we look at those two provisions of the Constitution: One explicitly prohibiting the states from emitting bills of credit, because otherwise the states would retain that power. And the other with respect to Congress, where they didn’t grant the power, even though the power was proposed to be granted and that proposal was overruled, and so it wasn’t granted. Based on that it is clear, I would say, that there is no power in Congress or in the states to issue bills of credit.
What we have now is something I think goes almost beyond the bill of credit, though it’s not really fiat currency because the Federal Reserve note, according to the statute, is supposed to be redeemed in “lawful money.” So in principle one could go back to the Federal Reserve Bank or one could take it to the Treasury – both have the obligation of redemption – and you could exchange a Federal Reserve note for one of these base metallic coins now in circulation. So, I guess it still could be called a bill of credit in the sense that you can actually receive some coinage, but what is the coinage that you receive?
Interestingly, we had an example of this type of problem in the period around the Civil War. During the Civil War and just after, the Union Government issued “greenbacks” – legal tender U.S. Treasury notes – and that was the first time that the government had purported to issue any kind of paper currency under the Constitution.
They did it once again under a wartime emergency – and for a short time, those things were not redeemed because the government was not paying out gold except as interest on bonds. They had to suspend specie payments during the war, but the Supreme Court upheld the constitutionality of that issuance of those greenbacks, I think erroneously, but they upheld it specifically on the basis that the greenbacks were to be redeemed in the constitutional currency of gold and silver.
All right, so even the furthest extent of error that has been made by the judicial system, with respect to paper currency, was premised on that paper currency being a true bill of credit in that it would be redeemed in the constitutional coinage of the country.
Well, if you look at the Federal Reserve note, you have a number of problems with it: Number one, it’s not issued by the Treasury. It’s issued by this banking cartel. No Federal Reserve note can come into existence unless one of the 12 regional banks, each of which is a private corporation, goes to the Board of Governors with certain assets defined in the statute and asks the Board of Governors to generate Federal Reserve notes.
The Board of Governors can’t generate Federal Reserve notes on its own, neither can the Treasury. So these things are being generated by a private corporation, and they’re not redeemable as a matter of law in the official constitutional silver or gold currency of the country. So they probably have four or five constitutional strikes against them. Especially if you look at the difference between U.S. Treasury notes and Federal Reserve notes. Treasury notes were always the product of some specific statute enacted by Congress, where Congress would say that so many millions of dollars’ worth of these notes are to be emitted.