All great republics throughout history cherished sound money. This meant that the monetary unit was a commodity of honest weight & purity. When money was sound, civilizations were found to be more prosperous & freedom thrived. The less free a society becomes, the greater the likelihood its money is being debased & the economic well-being of its citizens diminished.
Alan Greenspan, yrs. before he became Federal Reserve Board Chairman in charge of flagrantly debasing the U.S. dollar, wrote about this connection between sound money, prosperity, & freedom. In his article "Gold & Economic Freedom" (The Objectivist, July 1966), Greenspan starts by saying: "An almost hysterical antagonism toward the gold standard is an issue that unites statists of all persuasions. They seem to sense that gold & economic freedom are inseparable." Further he states that: "Under the gold standard, a free banking system stands as the protector of an economy's stability & balanced growth." Astoundingly, Mr. Greenspan's analysis of the 1929 market crash, & how the Fed precipitated the crisis, directly parallels current conditions we are experiencing under his mgt. of the Fed. Greenspan explains: "The excess credit which the Fed pumped into the economy spilled over into the stock market- triggering a fantastic speculative boom." And, "By 1929 the speculative imbalances had become overwhelming & unmanageable by the Fed." Greenspan concluded his article by stating: "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation." He explains that the "shabby secret" of the proponents of big govt. & paper money is that deficit spending is simply nothing > a "scheme for the hidden confiscation of wealth." Yet here we are today with a purely flat monetary system, managed almost exclusively by Alan Greenspan, who once so correctly denounced the Fed's role in the Depression while recognizing the need for sound money.
The Founders of this country, & a large majority of the American people up until the 1930s, disdained paper money, respected commodity money, & disapproved of a central bank's monopoly control of money creation & interest rates. Ironically, it was the abuse of the gold standard, the Fed's credit-creating habits of the 1920s, & its subsequent mischief in the 1930s, that not only gave us the Great Depression, but also prolonged it. Yet sound money was blamed for all the suffering. That's why people hardly objected when Roosevelt & his statist friends confiscated gold & radically debased the currency, ushering in the age of worldwide fiat currencies with which the international economy struggles today.
If honest money & freedom are inseparable, as Mr. Greenspan argued, & paper money leads to tyranny, 1 must wonder why it's so popular with economists, the business community, bankers, & our govt. officials. The simplest explanation is that it's a human trait to always seek the comforts of wealth with the least amount of effort. This desire is quite positive when it inspires hard work & innovation in a capitalist society. Productivity is improved & the standard of living goes up for everyone. This process has permitted the poorest in today's capitalist countries to enjoy luxuries never available to the royalty of old.
But this human trait of seeking wealth & comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be made more available to everyone. Those who believe in fiat money often believe wealth can be increased w/o a commensurate amount of hard work & innovation. They also come to believe that savings & market control of interest rates are not only unnecessary, but actually hinder a productive growing economy. Concern for liberty is replaced by the illusion that material benefits can be more easily obtained with fiat money than through hard work & ingenuity. The perceived benefits soon become of greater concern for society than the preservation of liberty. This does not mean proponents of fiat money embark on a crusade to promote tyranny, though that is what it leads to, but rather they hope they have found the philosophers stone & a modern alternative to the challenge of turning lead into gold.
Our Founders thoroughly understood this issue, & warned us against the temptation to seek wealth & fortune w/o the work & savings that real prosperity requires. James Madison warned of "The pestilent effects of paper money," as the Founders had vivid memories of the destructiveness of the Continental dollar. George Mason of Virginia said that he had a "Mortal hatred to paper money." Constitutional Convention delegate Oliver Ellsworth from Connecticut thought the convention "A favorable moment to shut & bar the door against paper money." This view of the evils of paper money was shared by almost all the delegates to the convention, & was the reason the Constitution limited congressional authority to deal with the issue & mandated that only gold & silver could be legal tender. Paper money was prohibited & no central bank was authorized. Over & above the economic reasons for honest money, however, Madison argued the moral case for such. Paper money, he explained, destroyed "The necessary confidence between man & man, on necessary confidence in public councils, on the industry & morals of people & on the character of republican govt."
The Founders were well aware of the biblical admonitions against dishonest weights & measures, debased silver, & watered-down wine. The issue of sound money throughout history has been as much a moral issue as an economic or political issue.
Even with this history & great concern expressed by the Founders, the barriers to paper money have been torn asunder. The Constitution has not been changed, but is no longer applied to the issue of money. It was once explained to me, during the debate over going to war in Iraq, that a declaration of war was not needed b/c to ask for such a declaration was "frivolous" & that the portion of the Constitution dealing with congressional war power was "anachronistic." So too, it seems that the power over money given to Congress alone & limited to coinage & honest weights, is now also "anachronistic."
If indeed our generation can make the case for paper money, issued by an unauthorized central bank, it behooves us to at least have enough respect for the Constitution to amend it in a proper fashion. Ignoring the Constitution in order to perform a pernicious act is detrimental in 2 ways. 1st, debasing the currency as a deliberate policy is economically destructive beyond measure. 2 nd , doing it w/o consideration for the rule of law undermines the entire fabric of our Constitutional republic.
Though the need for sound money is currently not a pressing issue for Congress, it's something that cannot be ignored b/c serious economic problems resulting from our paper money system are being forced upon us. As a matter of fact, we deal with the consequences on a daily basis, yet fail to see the connection between our economic problems & the mischief orchestrated by the Federal Reserve.
All the great religions teach honesty in money, & the economic shortcomings of paper money were well known when the Constitution was written, so we must try to understand why an entire generation of Americans have come to accept paper money w/o hesitation, w/o question. Most Americans are oblivious to the entire issue of the nature & importance of money. Many in authority, however, have either been misled by false notions or see that the power to create money is indeed a power they enjoy, as they promote their agenda of welfarism at home & empire abroad.
Money is a moral, economic, & political issue. Since the monetary unit measures every economic transaction, from wages to prices, taxes, & interest rates, it is vitally important that its value is honestly established in the marketplace w/o bankers, govt., politicians, or the Federal Reserve manipulating its value to serve special interests.
Money As a Moral Issue
The moral issue regarding money should be the easiest to understand, but almost no one in Washington thinks of money in these terms. Although there is a growing & deserved distrust in govt. per se, trust in money & the Federal Reserve's ability to manage it remains strong. No one would welcome a counterfeiter to town, yet this same authority is blindly given to our central bank w/o any serious oversight by the Congress.
When the govt. can replicate the monetary unit at will w/o regard to cost, whether it's paper currency or a computer entry, it's morally identical to the counterfeiter who illegally prints currency. Both ways, it's fraud.
A fiat monetary system allows power & influence to fall into the hands of those who control the creation of new money, & to those who get to use the money or credit early in its circulation. The insidious & eventual cost falls on unidentified victims who are usually oblivious to the cause of their plight. This system of legalized plunder (though not constitutional) allows one group to benefit at the expense of another. An actual transfer of wealth goes from the poor & the middle class to those in privileged financial positions.
In many societies the middle class has actually been wiped out by monetary inflation, which always accompanies fiat money. The high cost of living & loss of jobs hits one segment of society, while in the early stages of inflation, the business class actually benefits from the easy credit. An astute stock investor or home builder can make millions in the boom phase of the business cycle, while the poor & those dependent on fixed incomes can't keep up with the rising cost of living.
Fiat money is also immoral b/c it allows govt. to finance special interest legislation that otherwise would have to be paid for by direct taxation or by productive enterprise. This transfer of wealth occurs w/o directly taking the money out of someone's pocket. Every dollar created dilutes the value of existing dollars in circulation. Those individuals who worked hard, paid their taxes, & saved some money for a rainy day are hit the hardest, with their dollars being depreciated in value while earning interest that is kept artificially low by the Federal Reserve easy-credit policy. The easy credit helps investors & consumers who have no qualms about going into debt & even declaring bankruptcy.
If one sees the welfare state & foreign militarism as improper & immoral, one understands how the license to print money permits these policies to go forward far more easily than if they had to be paid for immediately by direct taxation.
Printing money, which is literally inflation, is nothing more than a sinister & evil form of hidden taxation. Its unfair & deceptive, & accordingly strongly opposed by the authors of the Constitution. That is why there is no authority for Congress, the Federal Reserve, or the executive branch to operate the current system of money we have today.
Money As a Political Issue
Although the money issue today is of little political interest to the parties & politicians, it should not be ignored. Policy makers must contend with the consequences of the business cycle, which result from the flat monetary system under which we operate. They may not understand the connection now, but eventually they must.
In the past, money & gold have been dominant issues in several major political campaigns. We find that when the people have had a voice in the matter, they inevitably chose gold over paper. To the common man, it just makes sense. As a matter of fact, a large # of Americans, perhaps a majority, still believe our dollar is backed by huge hoards of gold in Ft. Knox.
The monetary issue, along with the desire to have free trade among the states, prompted those at the Constitutional Convention to seek solutions to problems that plagued the post-revolutionary war economy. This post-war recession was greatly aggravated by the collapse of the unsound flat Continental dollar. The people, through their representatives, spoke loudly & clearly for gold & silver over paper.
Andrew Jackson, a strong proponent of gold & opponent of central banking (the 2nd Bank of the United States,) was a hero to the working class & was twice elected Pres. This issue was fully debated in his presidential campaigns. The people voted for gold over paper.
In the 1870s, the people once again spoke out clearly against the greenback inflation of Lincoln. Notoriously, govts. go to paper money while rejecting gold to promote unpopular & unaffordable wars. The return to gold in 1879 went smoothly & was welcomed by the people, putting behind them the disastrous Civil War inflationary period.
Grover Cleveland, elected twice to the presidency, was also a strong advocate of the gold standard.
Again, in the presidential race of 1896, William McKinley argued the case for gold. In spite of the great orations by William Jennings Bryant, who supported monetary inflation & made a mocking "Cross of Gold" speech, the people rallied behind McKinley's bland but correct arguments for sound money.
The 20th Century was much less sympathetic to gold. Since 1913 central banking has been accepted in the U.S. w/o much debate, despite the many economic & political horrors caused or worsened by the Federal Reserve since its establishment. The ups & downs of the economy have all come as a consequence of Fed policies, from the Great Depression to the horrendous stagflation of the 70s, as well as the current ongoing economic crisis.
A central bank & fiat money enable govt. to maintain an easy war policy that under strict monetary rules would not be achievable. In other words, countries with sound monetary policies would rarely go to war b/c they could not afford to, especially if they were not attacked. The people could not be taxed enough to support wars w/o destroying the economy. But by printing money, the cost can be delayed & hidden, sometimes for yrs. if not decades. To be truly opposed to preemptive & unnecessary wars one must advocate sound money to prevent the promoters of war from financing their imperialism.
Look at how the military budget is exploding, deficits are exploding, & tax revenues are going down. No problem; the Fed is there & will print whatever is needed to meet our military commitments, whether it's wise to do so or not.
The money issue should indeed be a gigantic political issue. Fiat money hurts the economy, finances wars, & allows for excessive welfarism. When these connections are realized & understood, it will once again become a major political issue, since paper money never lasts. Ultimately politicians will not have a choice of whether to address or take a position on the money issue. The people & circumstances will demand it.
We do hear some talk about monetary policy & criticism directed toward the Federal Reserve, but it falls far short of what I'm talking about. Big-spending welfarists constantly complain about Fed policy, usually demanding lower interest rates even when rates are at historic lows. Big-govt. conservatives promoting grand worldwide military operations, while arguing that "deficits don't matter" as long as marginal tax rates are lowered, also constantly criticize the Fed for high interest rates & lack of liquidity. Coming from both the left & the right, these demands would not occur if money could not be created out of thin air at will. Both sides are asking for the same thing from the Fed for different reasons. They want the printing presses to run faster & create more credit, so that the economy will be healed like magic- or so they believe.
This is not the kind of interest in the Fed that we need. I'm anticipating that we should & one day will be forced to deal with the definition of the dollar & what money should consist of. The current superficial discussion about money merely shows a desire to tinker with the current system in hopes of improving the deteriorating economy. There will be a point, though, when the tinkering will no longer be of any benefit & even the best advice will be of no value. We have just gone through 2% yrs. of tinkering with 13 rate cuts, & recovery has not yet been achieved. It's just possible that we're much closer than anyone realizes to that day when it will become absolutely necessary to deal with the monetary issue - both philosophically & strategically - & forget about the band-aid approach to the current system.
Money as an Economic Issue
For a time, the economic consequences of paper money may seem benign & even helpful, but are always disruptive to economic growth & prosperity.
Economic planners of the Keynesian-socialist type have always relished control over money creation in their efforts to regulate & plan the economy. They have no qualms with using this power to pursue their egalitarian dreams of wealth redistribution. That force & fraud are used to make the economic system supposedly fairer is of little concern to them.
There are also many conservatives who do not endorse central economic planning as those on the left do, but nevertheless concede this authority to the Federal Reserve to manipulate the economy through monetary policy. Only a small group of constitutionalists, libertarians, & Austrian free-market economists reject the notion that central planning, through interest-rate & money-supply manipulation, is a productive endeavor.
Many sincere politicians, bureaucrats, & bankers endorse the current system, not out of malice or greed, but b/c it's the only system they have know. The principles of sound money & free market banking are not taught in our universities. The overwhelming consensus in Wash., as well as around the world, is that commodity money w/o a central bank is no longer practical or necessary. Be assured, though, that certain individuals who greatly benefit from a paper money system know exactly why the restraints that a commodities standard would have are unacceptable.
Though the economic consequences of paper money in the early stage affect lower-income & middle-class citizens, history shows that when the destruction of monetary value becomes rampant, nearly everyone suffers & the economic & political structure becomes unstable. There's good reason for all of us to be concerned about our monetary system & the future of the dollar.
Nations that live beyond their means must always pay for their extravagance. It's easy to understand why future generations inherit a burden when the national debt piles up. This requires others to pay the interest & debts when they come due. The victims are never the recipients of the borrowed funds. But this is not exactly what happens when a country pays off its debt. The debt, in nominal terms, always goes up, & since it is still accepted by mainstream economists that just borrowing endlessly is not the road to permanent prosperity, real debt must be reduced. Depreciating the value of the dollar does that. If the dollar loses 10% of its value, the national debt of $6.5T is reduced in real terms by $650B. That's a pretty neat trick & quite helpful- to the govt.
That's why the Fed screams about a coming deflation, so it can continue the devaluation of the dollar unabated. The politicians don't mind, the bankers welcome the business activity, & the recipients of the funds passed out by Congress never complain. The greater the debt, the greater the need to inflate the currency, since debt cannot be the source of long-term wealth. Individuals & corporations who borrow too much eventually must cut back & pay off debt & start anew, but governments rarely do.
But where's the hitch- This process, which seems to be a creative way of paying off debt, eventually undermines the capitalist structure of the economy, thus making it difficult to produce wealth, & that's when the whole process comes to an end. This system causes many economic problems, but most of them stem from the Fed's interference with the market rate of interest that it achieves through credit creation & printing money.
Nearly 100 yrs. ago, Austrian economist Ludwig von Mises explained & predicted the failure of socialism. W/o a pricing mechanism, the delicate balance between consumers & producers would be destroyed. Freely fluctuating prices provide vital information to the entrepreneur who is making key decisions on production. W/o this information, major mistakes are made. A central planning bureaucrat cannot be a substitute for the law of supply & demand.
Though generally accepted by most modern economists & politicians, there is little hesitancy in accepting the omnipotent wisdom of the Federal Reserve to know the "price" of money- the interest rate- & its proper supply. For decades, & especially during the 1990s - when Chairman Greenspan was held in such high esteem, & no one dared question his judgment or the wisdom of the system- this process was allowed to run unimpeded by political or market restraints. Just as we must eventually pay for our perpetual deficits, continuous manipulation of interest & credit will also extract a payment.
Artificially low interest rates deceive investors into believing that rates are low b/c savings are high & represent funds not spent on consumption. When the Fed creates bank deposits out of thin air making loans available at below-market rates, mal-investment & overcapacity results, setting the stage for the next recession or depression. The easy credit policy is welcomed by many: stock-market investors, home builders, home buyers, congressional spendthrifts, bankers, & many other consumers who enjoy borrowing at low rates & not worrying about repayment. However, perpetual good times cannot come from a printing press or easy credit created by a Federal Reserve computer. The piper will demand payment, & the downturn in the business cycle will see to it. The downturn is locked into place by the artificial boom that everyone enjoys, despite the dreams that we have ushered in a "new economic era." Let there be no doubt: the business cycle, the stagfiation, the recessions, the depressions, & the inflations are not a result of capitalism & sound money, but rather are a direct result of paper money & a central bank that is incapable of managing it.
Our current monetary system makes it tempting for all parties, individuals, corporations, & govt. to go into debt. It encourages consumption over investment & production. Incentives to save are diminished by the Fed's making new credit available to everyone & keeping interest rates on saving so low that few find it advisable to save for a rainy day. This is made worse by taxing interest earned on savings. It plays havoc with those who do save & want to live off their interest. The artificial rates may be 4, 5, or even 6% below the market rate, & the savers- many who are elderly & on fixed incomes- suffer unfairly at the hands of Alan Greenspan, who believes that resorting to money creation will solve our problems & give us perpetual prosperity.
Lowering interest rates at times, especially early in the stages of monetary debasement, will produce the desired effects & stimulate another boom-bust cycle. But eventually the distortions & imbalances between consumption & production, & the excessive debt, prevent the monetary stimulus from doing very much to boost the economy. Just look at what's been happening in Japan for the last 12 yrs. When conditions get bad enough the only recourse will be to have major monetary reform to restore confidence in the system.
The 2 conditions that result from flat money that are more likely to concern the people are inflation of prices & unemployment. Unfortunately, few realize these problems are directly related to our monetary system. Instead of demanding reforms, the chorus from both the right & left is for the Fed to do more of the same - only faster. If our problem stems from easy credit & interest-rate manipulation by the Fed, demanding more will not do much to help. Sadly, it will only make our problems worse.
Ironically, the more successful the money managers are at restoring growth or prolonging the boom with their monetary machinations, the greater are the distortions & imbalances in the economy. This means that when corrections are eventually forced upon us, they are much more painful & more people suffer with the correction lasting longer.
Today's economic conditions reflect a flat monetary system held together by many tricks & luck over the past 30 yrs. The world has been awash in paper money since removal of the last vestige of the gold standard by Richard Nixon when he buried the Bretton Woods agreement - the gold exchange standard - on Aug. 15, 1971. Since then we've been on a worldwide paper dollar standard. Quite possibly we are seeing the beginning of the end of that system. If so, tough times are ahead for the U.S. & the world economy.
A paper monetary standard means there are no restraints on the printing press or on federal deficits. In 1971, M3 was $776B; today it stands at $8.9T, an 1100% increase. Our national debt in 1971 was $408B; today it stands at $6.8T, a 1600% increase. Since that time, our dollar has lost almost 80% of its purchasing power. Common sense tells us that this process is not sustainable & something has to give. So far, no one in Wash. seems interested.
Although dollar creation is ultimately the key to its value, many other factors play a part in its perceived value, such as: the strength of our economy, our political stability, our military power, the benefit of the dollar being the key reserve currency of the world, & the relative weakness of other nation's economies & their currencies. For these reasons, the dollar has enjoyed a special place in the world economy. Increases in productivity have also helped to bestow undeserved trust in our economy with consumer prices, to some degree, being held in check & fooling the people, at the urging of the Fed, that "inflation" is not a problem. Trust is an important factor in how the dollar is perceived. Sound money encourages trust, but trust can come from these other sources as well. But when this trust is lost, which always occurs with paper money, the delayed adjustments can hit with a vengeance.
Following the breakdown of the Bretton Woods agreement, the world essentially accepted the dollar as a replacement for gold, to be held in reserve upon which even more monetary expansion could occur. It was a great arrangement that up until now seemed to make everyone happy.
We own the printing press & create as many dollars as we please. These dollars are used to buy federal debt. This allows our debt to be monetized & the spendthrift Congress, of course, finds this a delightful convenience & never complains. As the dollars circulate through our fractional reserve banking system, they expand many times over. With our excess dollars at home, our trading partners are only too happy to accept these dollars in order to sell us their products. B/c our dollar is relatively strong compared to other currencies, we can buy foreign products at a discounted price. In other words, we get to create the world's reserve currency at no cost, spend it overseas, & receive manufactured goods in return. Our excess dollars go abroad & other countries- especially Japan & China - are only too happy to loan them right back to us by buying our govt. & GSE debt. Up until now both sides have been happy with this arrangement.
But all good things must come to an end & this arrangement is ending. The process put us into a position of being a huge debtor nation, with our current account deficit of more than $600B per yr. now exceeding 5% of our GDP. We now owe foreigners more than any other nation ever owed in all of history, over $3T.
A debt of this sort always ends by the currency of the debtor nation decreasing in value. And that's what has started to happen with the dollar, although it still has a long way to go. Our free lunch cannot last. Printing money, buying foreign products, & selling foreign holders of dollars our debt ends when the foreign holders of this debt become concerned with the dollar's future value.
Once this process starts, interest rates will rise. And in recent weeks, despite the frenetic effort of the Fed to keep interest rates low, they are actually rising instead. The official explanation is that this is due to an economic rebound with an increase in demand for loans. Yet a decrease in demand for our debt & reluctance to hold our dollars is a more likely cause. Only time will tell whether the economy rebounds to any significant degree, but 1 must be aware that rising interest rates & serious price inflation can also reflect a weak dollar & a weak economy. The stagflation of the 1970s baffled many conventional economists, but not the Austrian economists. Many other countries have in the past suffered from the extremes of inflation in an inflationary depression, & we are not immune from that happening here. Our monetary & fiscal policies are actually conducive to such a scenario.
In the short run, the current system gives us a free ride, our paper buys cheap goods from overseas, & foreigners risk all by financing our extravagance. But in the long run, we will surely pay for living beyond our means. Debt will be paid for one way or another. An inflated currency always comes back to haunt those who enjoyed the "benefits" of inflation. Although this process is extremely dangerous, many economists & politicians do not see it as a currency problem & are only too willing to find a villain to attack. Surprisingly the villain is often the foreigner who foolishly takes our paper for useful goods & accommodates us by loaning the proceeds back to us. It's true that the system encourages exportation of jobs as we buy more & more foreign goods. But nobody understands the Fed role in this, so the cries go out to punish the competition with tariffs. Protectionism is a predictable consequence of paper- money inflation, just as is the impoverishment of an entire middle class. It should surprise no one that even in the boom phase of the 1990s, there were still many people who became poorer. Yet all we hear are calls for more govt. mischief to correct the problems with tariffs, increased welfare for the poor, increased unemployment benefits, deficit spending, & special interest tax reduction, none of which can solve the problems ingrained in a system that operates with paper money & a central bank.
If inflation were equitable & treated all classes the same, it would be less socially divisive. But while some see their incomes going up above the rate of inflation (movie stars, CEOs, stock brokers, speculators, professional athletes,) others see their incomes stagnate like lower-middle-income workers, retired people, & farmers. Likewise, the rise in the cost of living hurts the poor & middle class more than the wealthy. B/c inflation treats certain groups unfairly, anger & envy are directed toward those who have benefited.
The long-term philosophic problem with this is that the central bank & the flat monetary system are not blamed; instead free market capitalism is. This is what happened in the 1930s. The Keynesians, who grew to dominate economic thinking at the time, erroneously blamed the gold standard, balanced budgets, & capitalism instead of tax increases, tariffs, & Fed policy. This country cannot afford another attack on economic liberty similar to what followed the 1929 crash that ushered in the economic interventionism & inflationism which we have been saddled with ever since. These policies have brought us to the brink of another colossal economic downturn & we need to be prepared.
Big business & banking deserve our harsh criticism, but not b/c they are big or b/c they make a lot of money. Our criticism should come b/c of the special benefits they receive from a monetary system designed to assist the business class at the expense of the working class. Labor leader Samuel Gompers understood this & feared paper money & a central bank while arguing the case for gold. Since the monetary system is used to finance deficits that come from war expenditures, the military industrial complex is a strong supporter of the current monetary system.
Liberals foolishly believe that they can control the process & curtail the benefits going to corps. & banks by increasing the spending for welfare for the poor. But this never happens. Powerful financial special interests control the govt. spending process & throw only crumbs to the poor. The fallacy with this approach is that the advocates fail to see the harm done to the poor, with cost of living increases & job losses that are a natural consequence of monetary debasement. Therefore, even more liberal control over the spending process can never compensate for the great harm done to the economy & the poor by the Federal Reserve's effort to manage an unmanageable fiat monetary system.
Economic intervention, financed by inflation, is high-stakes govt. It provides the incentive for the big money to "invest' in gaining govt. control. The big money comes from those who have it- corps. & banking interests. That's why literally billions of dollars are spent on elections & lobbying. The only way to restore equity is to change the primary function of govt. from economic planning & militarism to protecting liberty. W/o money, the poor & middle class are disenfranchised since access for the most part requires money. Obviously, this is not a partisan issue since both major parties are controlled by wealthy special interests. Only the rhetoric is different.
Our current economic problems are directly related to the monetary excesses of three decades & the more recent efforts by the Federal Reserve to thwart the correction that the market is forcing upon us. Since 1998, there has been a sustained attack on corporate profits. Before that, profits & earnings were inflated & fictitious, with WorldCom & Enron being prime examples. In spite of the 13 rate cuts since 2001, economic growth has not been restored.
Paper money encourages speculation, excessive debt, & misdirected investments. The market, however, always moves in the direction of eliminating bad investments, liquidating debt, & reducing speculative excesses. What we have seen, especially since the stock market peak of early 2000, is a knock-down, drag-out battle between the Fed's effort to avoid a recession, limit the recession, & stimulate growth with its only tool, money creation, while the market demands the elimination of bad investments & excess debt. The Fed was also motivated to save the stock market from collapsing, which in some ways they have been able to do. The market, in contrast, will insist on liquidation of unsustainable debt, removal of investment mistakes made over several decades, & a dramatic revaluation of the stock market. In this go around, the Fed has pulled out all the stops & is more determined than ever, yet the market is saying that new & healthy growth cannot occur until a major cleansing of the system occurs. Does anyone think that tariffs & interest rates of 1 % will encourage the rebuilding of our steel & textile industries anytime soon? Obviously, something more is needed.
The world central bankers are concerned with the lack of response to low interest rates & they have joined in a concerted effort to rescue the world economy through a policy of protecting the dollar's role in the world economy, denying that inflation exists, & justifying unlimited expansion of the dollar money supply. To maintain confidence in the dollar, gold prices must be held in check. In the 1960s our govt. didn't want a vote of no confidence in the dollar, & for a couple of decades, the price of gold was artificially held at $35 per oz. That, of course, did not last.
In recent yrs., there has been a coordinated effort by the world central bankers to keep the gold price in check by dumping part of their large horde of gold into the market. This has worked to a degree, but just as it could not be sustained in the 1960s, until Nixon declared the Bretton Woods agreement dead in 1971, this effort will fail as well.
The market price of gold is important b/c it reflects the ultimate confidence in the dollar. An artificially low price for gold contributes to false confidence & when this is lost, more chaos ensues as the market adjusts for the delay.
Monetary policy today is designed to demonetize gold & guarantee for the 1 st time that paper can serve as an adequate substitute in the hands of wise central bankers. Trust, then, has to be transferred from gold to the politicians & bureaucrats who are in charge of our monetary system. This fails to recognize the obvious reason that market participants throughout history have always preferred to deal with real assets, real money, rather than govt. paper. This contest between paper & honest money is of much greater significance than many realize. We should know the outcome of this struggle within the next decade.
Alan Greenspan, although once a strong advocate for the gold standard, now believes he knows what the outcome of this
battle will be. Is it just wishful thinking on his part? In an answer to a question I asked before the Financial Services
Committee in Feb. 2003, Chairman Greenspan made an effort to convince me that paper money now works as well as
gold: "I have been quite surprised, & I must say pleased, by the fact that central banks have been able to effectively
simulate many of the characteristics of the gold standard by constraining the degree of finance in a manner which
effectively brought down the general price levels." Earlier, in Dec. 2002, Mr. Greenspan spoke before the Economic Club
of NY & addressed the same subject: "The record of the past 20 yrs. appears to underscore the observation that, although pressures for excess issuance of fiat money are chronic, a prudent monetary policy maintained over a protracted period of time can contain the forces of inflation." There are several problems with this optimistic assessment. 1st efficient central bankers will never replace the invisible hand of a commodity monetary standard. 2, using govt. price indexes to measure the success of a managed fiat currency should not be reassuring. These indexes can be arbitrarily altered to imply a successful monetary policy. Also, price increases of consumer goods are not a litmus test for measuring the harm done by the money managers at the Fed. The development of overcapacity, excessive debt, & speculation still occur, even when prices happen to remain reasonably stable due to increases in productivity & technology. Chairman Greenspan makes his argument b/c he hopes he's right that sound money is no longer necessary, & also b/c its an excuse to keep the inflation of the money supply going for as long as possible, hoping a miracle will restore sound growth to the economy. But that's only a dream.
We are now faced with an economy that is far from robust & may get a lot worse before rebounding. If not now, the time will soon come when the conventional wisdom of the last 90 yrs., since the Fed was created, will have to be challenged. If the conditions have changed & the routine of fiscal & monetary stimulation don't work, we better prepare ourselves for the aftermath of a failed dollar system, which will not be limited to the United States.
An interesting headline appeared in the NY Times on July 31, 2003, "Commodity Costs Soar, But Factories Don't Bustle." What is observed here is a sea change in attitude by investors shifting their investment funds & speculation into things of real value & out of financial areas, such as stocks & bonds. This shift shows that in spite of the most aggressive Fed policy in history in the past three yrs., the economy remains sluggish & interest rates are actually rising. What can the Fed do? If this trend continues, there's little they can do. Not only do I believe this trend will continue, I believe it's likely to accelerate. This policy plays havoc with our economy; reduces revenues, prompts increases in federal spending, increases in deficits & debt occur, & interest costs rise, compounding our budgetary woes.
The set of circumstances we face today are unique & quite different from all the other recessions the Federal Reserve has had to deal with. Generally, interest rates are raised to slow the economy & dampen price inflation. At the bottom of the cycle interest rates are lowered to stimulate the economy. But this time around, the recession came in spite of huge & significant interest rate reductions by the Fed. This aggressive policy did not prevent the recession as was hoped; so far it has not produced the desired recovery. Now we're at the bottom of the cycle & interest rates not only can't be lowered, they are rising. This is a unique & dangerous combination of events. This set of circumstances can only occur with fiat money & indicates that further manipulation of the money supply & interest rates by the Fed will have little if any effect.
The odds aren't very good that the Fed will adopt a policy of not inflating the money supply b/c of some very painful consequences that would result. Also there would be a need to remove the pressure on the Fed to accommodate the big spenders in Congress. Since there are essentially only 2 groups that have any influence on spending levels, big-govt. liberals & big-govt. conservatives, thats not about to happen. Poverty is going to worsen due to our monetary & fiscal policies, so spending on the war on poverty will accelerate. Our obsession with policing the world, nation building, & preemptive war are not likely to soon go away, since both Republican & Democratic leaders endorse them. Instead, the cost of defending the American empire is going to accelerate. A country that is getting poorer cannot pay these bills with higher taxation nor can they find enough excess funds for the people to loan to the govt. The only recourse is for the Federal Reserve to accommodate & monetize the federal debt, & that, of course, is inflation.
It's now admitted that the deficit is out of control, with next yr.'s deficit reaching over 5T dollars, not counting the billions borrowed from "trust funds" like Social Security. I'm sticking to my prediction that within a few yrs. the national debt will increase over $1 T in 1 fiscal yr. So far, so good, no big market reactions, the dollar is holding its own & the administration & congressional leaders are not alarmed. But they ought to be.
I agree, it would be politically tough to bite the bullet & deal with our extravagance, both fiscal & monetary, but the repercussions here at home from a loss of confidence in the dollar throughout the world will not be a pretty sight to behold. I don't see any way we are going to avoid the crisis.
We do have some options to minimize the suffering. If we decided to, we could permit some alternatives to the current system of money & banking we have today.
Already, we took a big step in this direction. Gold was illegal to own between 1933 & 1976. Today millions of Americans do own some gold.
Gold contracts are legal, but a settlement of any dispute is always in Federal Reserve notes. This makes gold contracts of limited value.
For gold to be an alternative to Federal Reserve notes, taxes on any transactions in gold must be removed, both sales & capital gains.
Holding gold should be permitted in any pension fund, just as dollars are permitted in a checking account of these funds.
Repeal of all legal tender laws is a must. Sound money never requires the force of legal tender laws. Only paper money requires such laws.
These proposals, even if put in place tom', would not solve all the problems we face. It would though, legalize freedom of choice in money, & many who worry about having their savings wiped out by a depreciating dollar would at least have another option. This option would ease some of the difficulties that are surely to come from runaway deficits in a weakening economy with skyrocketing inflation.
Curbing the scope of govt. & limiting its size to that prescribed in the Constitution is the goal that we should seek. But political reality makes this option available to us only after a national bankruptcy has occurred. We need not face that catastrophe. What we need to do is to strictly limit the power of govt. to meddle in our economy & our personal affairs, & stay out of the internal affairs of other nations.
It's no coincidence that during the period following the establishment of the Federal Reserve & the elimination of the gold standard, a huge growth in the size of the federal govt. & its debt occurred. Believers in big govt., whether on the left or right, vociferously reject the constraints on govt. growth that gold demands. Liberty is virtually impossible to protect when the people allow their govt. to print money at will. Inevitably, the left will demand more economic interventionism, the right more militarism & empire building. Both sides, either inadvertently or deliberately, will foster corporatism. Those whose greatest interest is in liberty & self-reliance are lost in the shuffle. Though left & right have different goals & serve different special-interest groups, they are only too willing to compromise & support each others programs.
If unchecked, the economic & political chaos that comes from currency destruction inevitably leads to tyranny- a consequence of which the Founders were well aware. For 90 yrs. we have lived with a central bank, with the last 32 yrs. absent of any restraint on money creation. The longer the process lasts, the faster the printing presses have to run in an effort to maintain stability. They are currently running at record rate. It was predictable & is understandable that our national debt is now expanding at a record rate.
The panicky effort of the Fed to stimulate economic growth does produce what it considers favorable economic reports, recently citing second quarter growth this yr. at 3.1 %. But in the footnotes, we find that military spending - almost all of which is overseas - was up an astounding 46%. This, of course, represents deficit spending financed by the Federal Reserve's printing press. In the same quarter, after-tax corporate profits fell 3.4%. This is hardly a reassuring report on the health of our economy & merely reflects the bankruptcy of current economic policy.
Real economic growth won't return until confidence in the entire system is restored. And that is impossible as long as it depends on the politicians not spending too much money & the Federal Reserve limiting its propensity to inflate our way to prosperity. Only sound money & limited govt. can do that.
Art. 43.01 CODE OF CRIMINAL PROCEDURE Part I
who is present in court, sheriff is. not authorized to release defendant until such judgment is satisfied by payment of it in money, or by confinement or labor. Op. Atty.Gen.1947, No. V‑201.
4. Imprisonment on nonpayment
A defendant who was convicted of a felony and sentenced to penitentiary while in jail for failure to pay fine and costs assessed upon conviction for a misdemeanor, and was arrested on a capias pro fine after release from penitentiary and confined in jail until payment of balance of fine and costs remaining unpaid, was not entitled to be released from custody, where defendant admitted that he had not fully discharged fine and costs, and there was no proof that they had been remitted by the proper authorities. Ex parte Williams (1937) 133
Cr.R. 116, 109 S.W.2d 171.
5. Separate offenses
Where defendant entered pleas of guilty in each of seven separate cases to unlawful sale of whiskey in dry area, 'and in each case a fine of $100 and costs was imposed, the fines and costs were independent of each other, and satisfaction of fine and costs in one case by serving time in jail at rate of $3 per day was not a satisfaction of the fine and costs in either or all of the other judgments. Ex parte Hall (1953) 158 Cr.R. 646, 258 S.W.2d 806, certiorari denied 75 S.Ct. 346, 348 U.S. 930, 99 L.Ed. 729, certiorari denied 75 S.Ct. 900, 349 U.S. 967, 99 L.Ed. 1288, certiorari denied 76 S.Ct. 852, 351 U.S. 955, 100 L.Ed. 1478.
Art. 43.02.    Payable in money
All recognizances, bail bonds, and undertakings of any kind, whereby a party becomes bound to pay money to the State, and all fines and forfeitures of a pecuniary character, shall be collected in the lawful money of the United States only.Return
Acts 1965, 59th Leg., vol. 2, p. 317, ch. 722.
Vernon's Ann.C.C.P.1925, art. 786.
C. J. S. Fines § § 6, 16, 17.
Notes of Decisions
In general 1
1. In general
Confederate money was not receivable in payment of a fine.
Boone v. State (1869) 31 T. 557.
A promissory note can not be accepted in payment of a fine. Clark v. State, 3 Cr.R. 338 (1877)
A fine is not a debt, and a judgment therefor does not bear interest. Dixon v. State (1847) 2 T. 481; State v. Steen (1855) 14 T. 396.
Art. 43.03.  [8711  Payment of fine
(a) If a defendant is sentenced to pay a fine or costs or both and he defaults in payment, the court may order him imprisoned in jail until discharged as provided by law. A certified copy of the judgment, sentence, and order is sufficient to authorize such imprisonment.
(b) A term of imprisonment for default in payment of fine or costs or both may not exceed the maximum term of imprisonment authorized for the offense for which defendant was sentenced to pay the fine or costs or both.
(c) If a defendant is sentenced both to imprisonment and to pay a fine or costs or both, and he defaults in payment of either, a term of imprisonment for the default, when combined with the term of imprisonment already assessed, may not exceed the maximum term of imprisonment authorized for the offense for which defendant was sentenced.
Acts 1965, 59th Leg., vol. 2, p. 317, ch. 722. Amended by Acts 1971, 62nd Leg., p. 2990, ch. 987, § 2, eff. June 15, 1971; Acts 1973, 63rd Leg., p. 968, ch. 399, § 2 (A), eff . Jan. 1, 1974.
The 1971 amendment rewrote this article, which prior thereto read: Section I of the 1973 amendatory act enacted the new
"When a judgment and sentence have been rendered against a defendant Texas Penal Code.
for a pecuniary fine, If he is present, he shall be imprisoned in jail until
discharged as provided by law. A certified copy of such judgment and 1965 Revision:
sentence shall be sufficient to authorize such imprisonment." Extended the application of the article to include
The 1973 amendment, in subsec. (a), substituted "If a defendant is Prior Law:
sentenced to pay" for "When a judgment and sentence have been Vernon's Ann.C.C.P.1925, art. 787. O.C. 694, 695.
rendered against a defendant for", and added subsecs. (b) and (c).
Law Review Commentaries
Annual survey of Texas law: Sentencing.
Walter W. Steele, Jr., 25 Southwestern L.J. (Tex.) 217 (1971).
C.J.S. Fines § 11.
Capias for enforcement of judgment of imprisonment. Willson's Texas Crirninal Forms, 8th Ed., § 62.02.
Notes of Decisions
In general 2
Actual imprisonment required 3
Extradition warrant 5
Fees and costs 4
Liability of sheriff 6
Satisfaction of judgment 9
Separate offenses 10
The 1971 amendments to this article, arts. 42.15, 43.04, 43.05 and 45.50, Permitting the court to order payment of fine and costs at time pronouncement of sentence or to order payment on an installment or deferred basis, did not constitues “ex post facto” laws in regard to petitioner prior to effective data of the amendments. Ex parte Scott (Cr. App. 1971) 471 S.W.2d 54.
2. In general
Where judgments had been entered, sentences pronounced and no motions for new trials filed or notices of appeal given, sub
FEDERAL RESERVE NOTES
§ 411. Issuance to reserve banks; nature of obligation; redemption
Federal reserve notes, to be issued at the discretion of the Federal Reserve Board [Board of Governors of the Federal Reserve System] for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are hereby authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal reserve bank.Return to article
(Dec. 23, 1913, ch 6, § 16, 1 1, 38 Stat. 265; Jan. 30, 1934, ch 6, § 2(b)(1), 48 Stat. 337.)
HISTORY; ANCILLARY LAWS AND DIRECTIVES
References in text:
The phrase "hereinafter set forth" appearing in this section probably means as set forth in § 17 et seq. of the Federal Reserve Act (Act Dec. 23, 1913). For distribution of such sections, consult USCS Tables volumes.
The bracketed words "Board of Governors of the Federal Reserve System" have been inserted on authority of Act Aug. 23, 1935, ch 614, § 203(a), 49 Stat. 704, which appears as 12 USCS § 241 note.
This section is comprised of the first paragraph of section 16 of Act Dec. 23, 1913. Paras. 2‑4, 5 and 6, 7, 8‑11, 13 and 14 of section 16, and paras. 15‑18 of section 16, as added June 21, 1917, ch 32, § 8, 40 Stat. 238, are classified to 12 USCS §§ 412‑414, 415, 416, 418‑421, 360, 248(o) and 467, respectively. Para. 12 of section 16, formerly classified to 12 USCS § 422, was repealed by Act June 26, 1934, ch 756, § 1, 48 Stat. 1225.
1934. Act Jan. 30, 1934, substituted "lawful money" for "gold" in the last sentence of this section, and, deleted "in gold or lawful money" which followed "or" in such sentence.
CODE OF FEDERAL REGULATIONS
Federal Reserve System‑International banking operations (Regulation K), .12 CFR Part 211.
Gold coinage discontinued, 31 USCS § 5112. This section is referred to in 12 USCS §§ 348, 420, 421, 467.
4 Fed Proc L Ed, Banking and Financing §§ 8:2, 351.
4A Fed Proc L Ed, Banking and Financing §§ 8:639, 1472.
INTERPRETIVE NOTES AND DECISIONS
Federal reserve notes are legal tender in absence of objection thereto. MacLeod v Hoover (1925) 159 La 244, 105 So 305.
§ 412. Application for notes; collateral required
Any Federal Reserve bank may make application to the local Federal Reserve agent for such amount of the Federal Reserve notes hereinbefore provided for as it may require. Such application shall be accompanied with a tender to the local Federal Reserve agent of collateral in amount equal to the sum of the Federal Reserve notes thus applied for and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills of exchange, or acceptances acquired under section 10A, 10B, 13, or 13A of this Act [12 USCS §§ 82, 342‑348, 349‑352, 361, 372], or bills of exchange endorsed by a member bank of any Federal Reserve district and purchased under the provisions of section 14 of this Act [12 USCS §§ 348a, 353‑3591, or bankers' acceptances purchased under the provisions of said section 14 [12 USCS §§ 348a, 353‑359], or gold certificates, or Special Drawing Right certificates, or any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof, or assets that Federal Reserve banks may purchase or hold under section 14 of this Act [12 USCS §§ 353 et seq.]. In no event shall such collateral security be less than the amount of Federal Reserve notes applied for. The Federal Reserve agent shall each day notify the Federal Reserve Board [Board of Governors of the Federal Reserve System] of all issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to which he is accredited. The said Federal Reserve Board [Board of Governors of the Federal Reserve System] may at any time call upon a Federal Reserve bank for additional security to protect the Federal Reserve notes issued to it. Collateral shall not be required for Federal Reserve notes which are held in the vaults of Federal Reserve banks.
(Dec. 23, 1913, ch 6, § 16, 1 2, 38 Stat. 265; Sept. 7, 1916, ch 461, 39 Stat. 754; June 21, 1917, ch 32, § 7, 40 Stat. 236; Feb. 27, 1932, ch 58, § 3, 47 Stat. 57; Feb. 3, 1933, ch 34, 47 Stat. 794; Jan. 30, 1934, ch 6, § 2(b)(2), 48 Stat. 337; March 6, 1934, ch 47, 48 Stat. 398; March 1, 1937, ch 20, 50 Stat. 23; June 30, 1939, ch 256, 53 Stat. 991; June 30, 1941, ch 264, 55 Stat. 395; May 25, 1943, ch 102, § 1, 57 Stat. 85; June 12, 1945, ch 186, § 2, 59 Stat. 237; June 19, 1968, P. L. 90‑349, § 5(a), 82 Stat. 189; Nov. 10, 1978, P. L. 95‑630, Title 1, § 113, 92 Stat. 3671; March 31, 1980, P. L. 96‑221, Title I, § 105(b)(1), 94 Stat. 140; Dec. 6, 1999, P. L. 106‑122, 113 Stat. 1638.)
HISTORY; ANCILLARY LAWS AND DIRECTIVES
The bracketed words "Board of Governors of the Federal Reserve System" have been inserted on authority of Act Aug. 23, 1935, ch 614, § 203(a), 49 Stat. 704, which appears as 12 USCS § 241 note.
lawful for the Comptroller of the Currency to issue to the association making the deposit circulating notes of different denominations, but none of them of less than $5, and not exceeding in amount 80 per centum of the par value of the bonds deposited, which shall express the promise of the association to pay them, upon presentation at the office at which they are issued, in gold coin of the United States, and shall be so redeemable. (R. S. § 5185; Jan. 19, 1875, ch 19, 18 Stat. 302.)
HISTORY; ANCILLARY LAWS AND DIRECTIVES
References in text:
"This Title", referred to in this section, is Title LXII of the Revised Statutes, which was comprised of R. S. §§ 5133‑5243, which are classified principally to 12 USCS §§ 21, 22‑24, 25a‑29, 35‑37, 39, 51, 52, 53, 55‑57, 59‑62, 66, 71, 72‑76, 81, 83‑91, 93, 94, 101a, 102, 104, 107‑110, 123, 124, 131‑138, 141‑144, 151, 152, 161, 164, 168‑175, 181‑186, 192‑196, 481‑485, 501, 541, 548, and 582. For full classification of this Title, consult USCS Tables volumes.
R. S. § 5185 was derived from Act July 12, 1870, ch 252, § 3, 16 Stat. 252.
1875. Act Jan. 19, 1875, repealed the last sentence which read: "But no such association shall have a circulation of more than one million of dollars.".
Transfer of functions:
Pursuant to § l(b) of Reorg. Plan No. 26 of 1950, which appears as 5 USCS § 903 note, the Comptroller of the Currency was not affected by the general transfer of functions, officers, and agencies of the Department of the Treasury to the Secretary of the Treasury provided for in the Plan. See also 31 USCS § 321(c)(2).
Coinage of gold discontinued, 31 USCS § 5112. Provision for payment of obligations containing a gold clause, 31 USCS § 5118. This section is referred in 12 USCS § 152.
Federal Procedure L Ed:
4 Fed Proc L Ed, Banking and Financing § 8:3 5 1.
4A Fed Proc L Ed, Banking and Financing §§ 8:495, 639.
§ 152. Lawful money reserve of associations issuing gold notes; receiving notes of other associations
Every association organized under the preceding section [12 USCS § 151] shall at all times keep on hand not less than 25 per centum of its outstanding circulation, in gold or silver coin of the United States; and shall receive at par in the payment of debts the gold‑notes of every other such association which at the time of such payment is redeeming its circulating notes in gold coin of the United States, and shall be subject to all the provisions of this Title: Provided, That, in applying the same to associations organized for issuing gold‑notes, the terms "lawful money" and "lawful money of the United States" shall be construed to mean gold or silver coin of the United States; and the circulation of such associations shall not be within the limitation of circulation mentioned in this Title.Return
(R. S. § 5186.)
HISTORY; ANCILLARY LAWS AND DIRECTIVES
References in text:
"This Title", referred to in this section, is Title LXII of the Revised Statutes, which was comprised of R. S. §§ 5133‑5243, which are classified principally to 12 USCS §§ 21, 22‑24, 25a‑29, 35‑37, 39, 51, 52, 53, 55‑57, 59‑62, 66, 71, 72‑76, 81, 83‑91, 93, 94, 101a, 102, 104, 107‑110, 123, 124,131‑138, 141‑144, 151, 152, 161, 164, 168‑175, 181‑186, 192‑196, 481‑485, 501, 541, 548, and 582. For full classification of this Title, consult USCS, Tables volumes.
R. S. § 5186 was derived from Act July 12, 1870, ch 252, §§ 3‑5, 16 Stat. 252,253.
Coinage of gold discontinued, 31 USCS § 5112. Provision for payment of obligations containing a gold clause, 31 USCS § 5118.
§ 153. Conversion of gold banks into currency banks
Any national gold bank organized under the provisions of the laws of the United States, may, in the manner and subject to the provisions prescribed by section fifty‑one hundred and fifty‑four of the Revised Statutes of the United States [12 USCS § 35], for the conversion of banks incorporated under the laws of any State, cease to be a gold bank, and become such an association as is authorized by section fifty‑one hundred and thirty‑three [12 USCS § 2 1], for carrying on the business of banking, and shall have the same powers and privileges, and shall be subject to the same duties, responsibilities, and rules, in all respects, as are by law prescribed for such associations: Provided, That all certificates of organization which shall be issued under this act [this section] shall bear the date of the original organization of each bank respectively as a gold bank.
(Feb. 14, 1880, ch 25, 21 Stat. 66.)
BANK EXAMINATIONS; REPORTS
§ 161. Reports to Comptroller of the Currency
(a) Reports of condition; form; contents; date of making; publication. Every association shall make reports of condition to the Comptroller of the