Last Updated on September 17, 2021 by Constitutional Militia
Not long ago, a friend of mine asked me to draft a few pertinent, if not provocative, questions to be posed to all of the candidates who run for the Presidency in the 2016 elections. After what should be the initial question posed to every aspirant to “the Office of President”—namely, “Are you actually ‘eligible to th[at] Office’ by virtue of being ‘a natural born Citizen’ under Article II, Section 1, Clause 4 of the Constitution?”—the following queries came to my mind:
1. Are there any principles of government in George Washington’s Farewell Address which you, as President, would not attempt to put into practice? If so, what are they; and why and how would you deviate from them?
2. This country’s monetary and banking systems have slipped into a state of chronic crisis, which threatens to devolve into a nationwide financial collapse. As President, how would you utilize the authority granted to you under Title 12, United States Code, Section 95(a), to deal with this situation?
3. As President, how would you support those States that adopted an alternative currency pursuant to the authority the Constitution reserves to them in Article I, Section 10, Clause 1?
4. As President, under Article II, Section 2, Clause 1 of the Constitution you would be the “Commander in Chief * * * of the Militia of the several States, when called into the actual Service of the United States”. Today, no State fields a constitutional Militia. Would you therefore demand revitalization of the Militia in the several States as soon as possible—and how would you go about it?
5. Many Americans fear that, in a severe national crisis, such as a collapse of the monetary and banking systems, “martial law” will be imposed. As President, under what circumstances would you support the use of “martial law”, and on what constitutional basis?
6. The Supreme Court takes the position that a decision which it renders on an issue of constitutional law is itself “the supreme law of the land”, which can be reversed only by a subsequent decision of the Court or an amendment of the Constitution. As President, would you accede to this theory of “judicial supremacy”? If not, why and how would you oppose it?
7. Many Americans believe that the current resident of the White House, Barack Obama, has never been eligible for “the Office of President” because he is not a “natural born Citizen”, and that the facts concerning his ineligibility have been systematically ignored, covered up, and even falsified by rogue public officials at every level of the federal system. As President, would you immediately open an investigation into this question so as to settle the matter once and for all? If not, why not?
8. Many Americans believe that the official inquiries into the 9/11 event, especially with respect to the destruction of World Trade Center Building 7, are seriously deficient. As President, would you immediately open an investigation into this question, inviting full and fair participation by all interested parties, with timely and complete disclosure of all relevant information held by every governmental department, bureau, and other agency, so as to settle the matter once and for all? If not, why not?
I must concede that these are questions which the candidates put forward by the “two” major political parties will never be asked by any political journalist from the big “mainstream” print and electronic media. Not, however, because these questions are unimportant, or because they have no specific answers. Quite the contrary. To demonstrate that these are not merely theoretical and quixotic inquiries, for purposes of illustration I shall expand on the practical significance of the second question: “This country’s monetary and banking systems have slipped into a state of chronic crisis, which threatens to eventuate in a nationwide financial collapse. As President, how would you utilize the authority granted to you under Title 12, United States Code, Section 95(a), to deal with this situation?” In doing so, I shall also touch on the fourth question: “As President, under Article II, Section 2, Clause 1 of the Constitution you would be the “Commander in Chief * * * of the Militia of the several States, when called into the actual Service of the United States”. Today, no State fields a constitutional Militia. Would you therefore demand revitalization of the Militia in the several States as soon as possible—and how would you go about it?”
Now, how should a patriotic President, intent upon restoring an economically sound, honest, and especially constitutional monetary system in this country as quickly and effectively as possible, answer these questions? The proper response is quite straightforward. Section 95(a) mandates that,
[i]n order to provide for the safer and more effective operation of the National Banking System and the Federal Reserve System, to preserve for the people the full benefits of the currency provided for by the Congress through the National Banking System and the Federal Reserve System, and to relieve interstate commerce of the burdens and obstructions resulting from the receipt on an unsound or unsafe basis of deposits subject to withdrawal by check, during such emergency period as the President of the United States by proclamation may prescribe, no member bank of the Federal Reserve System shall transact any banking business except to such extent and subject to such regulations, limitations and restrictions as may be prescribed by the Secretary of the Treasury, with the approval of the President. Any individual, partnership, corporation, or association, or any director, officer or employee thereof, violating any of the provisions of this section shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $10,000 or, if a natural person, may, in addition to such fine, be imprisoned for a term not exceeding ten years. Each day that any such violation continues shall be deemed a separate offense.
Importantly, this statute imposes no constraints whatsoever on the “regulations, limitations and restrictions” which the Secretary of the Treasury may “prescribe * * * with the approval of the President”. (I do not intend here to enter into an investigation as to whether this provision is constitutional or not, in whole or in part. Suffice it to say that it is at least as constitutional as any part of the Federal Reserve Act, and certainly sufficiently constitutional to be used to correct the worst deficiencies in that Act “during [the present] emergency period”. After all, at this perilous stage in the tortuous course of human events, monetary reformers must act in reliance upon the old adage that “it takes a crooked stick to beat a mad dog”. And what sort of stick would be more suitable in this situation than one which Franklin Delano Roosevelt’s New Deal has provided?)
So, in general, to master the present monetary and banking crisis a patriotic President could and should “by proclamation” “prescribe” a suitable “emergency period” during which 12 U.S.C. § 95(a) were to take effect (presumably, until the crisis had abated)—simultaneously (or, preferably, well beforehand) he should draft the necessary “regulations, limitations and restrictions”—then he should order that those “regulations, limitations and restrictions” be “prescribed by [his hand-picked] Secretary of the Treasury”, precisely as written so as to obtain the President’s “approval”—and finally he should enforce those “regulations, limitations and restrictions” swiftly, surely, and severely, pursuant to his duty to “take Care that the Laws be faithfully executed” under Article II, Section 3 of the Constitution.
In particular, the President should so draft and his Secretary of the Treasury should so “prescribe[ ]” the “regulations, limitations and restrictions” as to achieve the statute’s two purposes: namely, (a) “to preserve for the people the full benefits of the currency provided for by the Congress through the national banking system and the Federal reserve system”; and (b) “to relieve interstate commerce of the burdens and obstructions resulting from the receipt on an unsound or unsafe basis of deposits subject to withdrawal by check”. Consider each of these in turn—
(a) Originally, “the full benefits of the currency provided for by the Congress through the national banking system and the Federal reserve system” were bipartite.
(i) On the one hand, those “benefits” included the statutory right of all Americans to require that Federal Reserve Notes “shall be redeemed in gold on demand at the Treasury of the United States, in the city of Washington, District of Columbia, or in gold or lawful money at any Federal reserve bank”. An Act To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes, Act of 23 December 1913, CHAP. 6, § 16, , 38 Stat. 251, 265. As this statute made clear, the banks themselves were not required as a matter of law in the first instance to redeem Federal Reserve Notes solely in gold (although as a matter of fact they generally did so prior to 1933 domestically and prior to 1971 internationally); but they were required to maintain a large reserve of gold in order to ensure that, at some point, they could be held fully liable for such redemption:
Every Federal reserve bank shall maintain * * * 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. * * * Notes presented for redemption at the Treasury of the United States shall be paid out of the redemption fund and returned to the Federal reserve banks through which they were originally issued, and thereupon such Federal reserve bank shall, upon demand of the Secretary of the Treasury, reimburse such redemption fund in lawful money or, if such Federal reserve notes have been redeemed by the Treasurer in gold or gold certificates, then such funds shall be reimbursed to the extent deemed necessary by the Secretary of the Treasury in gold or gold certificates, and such Federal reserve bank shall, so long as any of its Federal reserve notes remain outstanding, maintain with the Treasurer in gold an amount sufficient in the judgment of the Secretary to provide for all redemptions to be made by the Treasurer.
The Federal Reserve Board shall require each Federal reserve bank to maintain on deposit in the Treasury of the United States a sum in gold sufficient in the judgment of the Secretary of the Treasury for the redemption of the Federal reserve notes issued to such bank, but in no event less than five per centum; but such deposit of gold shall be counted and included as part of the forty per centum reserve hereinbefore required.
Act of 23 December 1913, § 16,  and , 38 Stat. at 266. At that time, the statutorily fixed rate of exchange was 20.67 “dollars” per ounce of gold, or 23.22 grains of gold per “dollar”. An Act To define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes, Act of 14 March 1900, CHAP. 41, § 1, 31 Stat. 45, 45.
Even with these apparent safeguards in place, however, Congress carefully provided in the Federal Reserve Act that “[t]he right to amend, alter, or repeal this Act is hereby expressly reserved”, so that the lessons later experience taught could easily be applied. Act of 23 December 1914, § 30, 38 Stat. at 275. Unfortunately, in a misguided response to the banking crisis of the early 1930s, Congress relied on this reserved right to remove the requirement for redemption of Federal Reserve Notes in gold. AN ACT To protect the currency system of the United States, to provide for the better use of the monetary gold stock of the United States, and for other purposes, Act of 30 January 1934, CHAPTER 6, § 2(b)(1), 48 Stat. 337, 337, now codified at 12 U.S.C. § 411. Yet, during the same crisis, Congress, in what ultimately became 12 U.S.C. § 95(a), authorized the President and the Secretary of the Treasury to prescribe by regulations whatever changes in the Federal Reserve Act the future might prove to be necessary in order to deal with such matters. See AN ACT To provide relief in the existing national emergency in banking, and for other purposes, Act of 9 March 1933, CHAPTER 1, § 4, 48 Stat. 1, 2.
Subsequent experience has now taught this country that the only way to obtain “the full benefits of the currency provided for by the Congress through the national banking system and the Federal reserve system” with respect to the original statutory goal of maintaining a permanent relationship between that “currency” and gold is to impose directly upon the banks themselves, both in the first place and in the final analysis, a requirement that they make Federal Reserve Notes freely exchangeable for gold at all times.
(ii) On the other hand, when the Federal Reserve Act was passed, Americans were already legally entitled to exchange gold coin of the United States for silver coin of the United States at a statutorily fixed ratio (supposedly the exchange-rate between the two metals set in the free market). So, in practice, “the full benefits of the currency provided for by the Congress through the national banking system and the Federal reserve system” originally included a paper currency which, in one way or another, could be exchanged for silver, as well as gold, coin of the United States. Americans’ ability to require the Treasury to exchange any forms of United States paper currency for silver ended, however, in 1968. AN ACT To authorize adjustments in the amount of outstanding silver certificates, and for other purposes, Act of 24 June 1967, Public Law 90-29, § 2, 81 Stat. 77, 77. Subsequent experience has taught this country the serious error of that policy. Therefore, in order to bring America’s monetary system as quickly as possible into complete compliance with constitutional principles, as well as sound economics, a requirement for exchangeability of Federal Reserve Notes for silver should be included in whatever regulations were to be issued under the auspices of 12 U.S.C. § 95(a). For part two click below.