Federal Reserve Bank of Atlanta Makes Specious Assertion

[Scott Beach]

The Federal Reserve Bank of Atlanta has moved that the United States District Court for the Southern District of Florida dismiss my complaint against the Bank.  In support of its motion, the Bank asserts that Federal reserve notes "are 'lawful money' as that term is used in Section 16 of the Federal Reserve Act" [emphasis in original].  However, Section 16 makes it very clear that Federal reserve notes are not "lawful money."  The first sentence of the third paragraph of Section 16 reads, "Every Federal reserve bank shall maintain reserves in gold or lawful money of not less than thirty-five per centum against its deposits and reserves in gold of not less than forty per centum against its Federal reserve notes in actual circulation, and not offset by gold or lawful money deposited with the Federal reserve agent." (See page 17 of the Act, which is posted at http://www.llsdc.org/attachments/files/105/FRA-LH-PL63-43.pdf).

 

The Bank's assertion that Federal reserve notes are "lawful money" is specious.  And I wonder if that assertion is designed to mislead the court because it does not look to me like an honest mistake.

 

 

[Scott Beach]

The first paragraph of Section 16 of the "Federal Reserve Act" (December 23, 1913; H.R. 7837) provides that Federal reserve notes shall be "obligations of the United States".  The Federal Reserve Act does not provide that Federal reserve notes shall be "lawful money of the United States", but the Act does make reference to "lawful money of the United States".  The fifth paragraph of Section 16 reads, "Any Federal reserve bank may at any time reduce its liability for outstanding Federal reserve notes by depositing, with the Federal reserve agent, its Federal reserve notes, gold, gold certificates, or lawful money of the United States."

 

Section 3588 of the Revised Statutes of the United States provided that, "United States notes shall be lawful money, and a legal tender in payment of all debts, public and private, within the United States, except for duties on imports and interest on the public debt" (Link).

 

In the case of Federal reserve notes, Congress could have provided that Federal reserve notes shall be "lawful money of the United States", but it did not do so.  Instead, it provided that Federal reserve notes shall be "obligations of the United States" that are redeemable in "lawful money".

 

The Federal Reserve Bank of Atlanta has asserted that Federal reserve notes are lawful money.  That assertion is not supported by the text of the law.

[Chris Watson]

Yes, and the reason is because of Title 12, Chapter 3, Subchapter 12, Section 411. The "redemption" clause.
Lawful Money is tangible value of Gold or Silver as recognized by the Law, the Constitution. The federal reserve act is legislation and not Law. Legal tender is a legal document representing Lawful Money.

[John M]

Hey there,

Just as A FYI please see the portion below in bold. Thanks!

http://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-t...

The United States Coinage Act of 1965 states (in part):

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts.

—31 U.S.C. § 5103

This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor in the U.S. There is, however, no Federal statute that requires private businesses, persons, or organizations to accept it as payment for goods and/or services.

[Chris Watson]

And even though the legislation claims legal tender status for the notes, it does not remove the requirement of redemption in lawful money by the Fed or the Treasury. A note of legal tender has value only if it is honored by the issuer of the note! If both institutions refuse redemption, then, they must accept refusal of payment as well.....Not tax, interest or any other form of payment is lawfully required if the institutions themselves refuse to make good on the notes they want back.

Fraud is the issuing of evidence of value where no value exists, but appears to be there at the time of exchange.

[Scott Beach]

A little more FYI...

John:

Section 9 of Article I of the Constitution provides that, "The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person."  

A foreign silver coin, the Spanish milled dollar, was at one time a legal tender for the payment of the aforementioned Importation Tax.  The first United States dollars were not minted until 1794, five years after the Constitution became effective. 

The Spanish milled dollar was a foreign coin, not lawful money of the United States, but it was a legal tender in the United States for many decades.

United States notes were defined in statute as "lawful money" and a "legal tender" for some purposes. 

In summary, a coin that is legal tender is not necessarily lawful money and lawful money is not necessarily a legal tender.  "Lawful money" and "legal tender" are not synonymous terms.

[Chris Watson]

Lawful Money is money that is existent by nature, not man. Legal Tender is a token payment in lieu of Lawful Money. To "Tender" a payment is to create a note, or IOU. Legal tender is a note with legal backing and recognition. Lawful Money is money that is recognized whether there is legal support for it or not, such as a weight of gold or a weight of silver.

Legal Tender requires legislated authority to create and distribute. Law Money does not, and retains it's value inherently in it's substance, the natural law, not in its legality, the written legislation.

Lawful Money is independent of the written law, whereas Legal Tender is dependent upon the written law to have any value in reality.

[Scott K]

Doesn't the Emergency Banking Act of 1933 remove the gold requirement for backing of the Federal Reserve Act? Isn't that why you could no longer redeem your paper money for gold afterwards? Isn't that what the "special powers" granted to the Fed during the "banking crisis" of the day was all about, in addition to bailing out the banks, that is?

[Chris Watson]

But One Dollar lawful money is not gold. It is silver. And the Emergency Banking Act was also unconstitutional, as well as the Federal Reserve Act that cause the crisis.

[Scott K]

hmm, I was under the impression that the worthless coins that have only a coating of precious metal on them were the "lawful money" these days. I hope your right though.

[Chris Watson]

Now you are talking about legal tender, not the lawful money Dollar, which is silver-nickle. The lawful penny dissapeared after 1980, and was cupro-nickel.

Only Silver and Gold are recognized in the Constitution as "Money" and as such those metals are tangible and adhere to both Natural Laws, as well as the Supreme Law, the Constitution. The Treasury's mandate in the Mint act was to coin the lawful money from the gold and silver of the people on demand and for free as a service. You hand them some silver, they assay and determine it's lawful silver content and give you back the same value in minted silver coin. Then they refine the metal you gave them into new coin.

That is what they were supposed to be doing. Now, they don't do any of that. They issue debts obligations on the backs of the people and sell the minted coins for fake Fed promissory notes. Nice of them. to obligate us to the Fed AND keep us from using money that is not tied to the Fed.

[Scott Beach]

Scott K: Section 5118(b) of Title 31 of the United States Code provides that, "The United States Government may not pay out any gold coin."  However, as far as I know, the Federal Reserve Banks are not prohibited from using any type of U.S. coin to redeem federal reserve notes.  But they would certainly go bankrupt very quickly if they started redeeming federal reserve notes in gold U.S. legal-tender coins.  

Link: http://www.law.cornell.edu/uscode/31/5118.html

[Scott K]

Hmm maybe I should ask my local bank for gold dollars in exchange for my notes, however they will most likely give me some zinc garbage instead and escort me out. Obviously if they have an option they will give you the worthless stuff.