Banking on a Revolution is a very welcome and refreshing contribution, so graciously sent to us from Dr. Paul Hein, Jr. We reproduce it with his permission. It arrived in our mailbox with this post:
Dear Kidogo:
I just discovered your site and it's wonderful. I voted for Howard Phillips and it was the best vote I ever cast. The only way to "waste your vote" is to cast it for someone you don't really want elected, except as the lesser of two evils.
Maybe the attachment will be of interest. I have written and lectured on the subject of Constitutional money for twenty years now -- and what a difference I've made! Absolutely none. But better to light a single candle, etc. Besides, I'm driven, and can't give up.
Paul Hein Jr.
phein@inlink.com
Amazing documentation for the outrageous assertion in the third paragraph you will find at the end.
Before it's demise, Covenant Syndicate carried articles of Dr. Hein regularly, and he publishes on Gold-Eagle monthly.
Forgive me; I'm in a grumpy mood. I've just returned from the bank, which often transforms my usually sunny (well, overcast) disposition to one of a curmudgeon.
Have you ever heard of a bank which did not refer to itself as "full service?" Those words are affixed to "bank" like "new and improved" are affixed to the large economy size, and are just as meaningless. As usual when I endure an encounter with the bank, I stood waiting, while clerks did this or that, accomplishing nothing in terms of shortening the line. Where does the service come in?
What's maddening is that it needn't be so. Banks could hire more help, and give truly "full service," and it would cost them nothing. As the vice-president of a large St. Louis bank once testified in court, "Banks cannot spend money. When they try to spend money, they just create it." We know that all of our money is created from nothing by banks when making loans. Actually, not ALL of our money is created this way, but about 95% of it. The other five percent is created by banks when they "spend" money on salaries, new buildings, equipment, etc. They don't loan it to themselves; they just create and spend. So it would actually cost banks nothing to hire additional tellers, so sweet old men like me don't become feisty grumps waiting in line.
That's the least of my problems with banks, actually. By creating all of our money as principal, and demanding back that principal plus interest, modern banking makes repayment of debt for the country as a whole, impossible. We are reduced to a materialistic, money-grabbing society because we are trying to borrow ourselves out of debt, and only the quickest and the cleverest will be able to do that, at the expense of the rest of us.
It wouldn't be exaggerating to blame much of our society's moral decay upon the pressures placed upon us by a money system which is intrinsically unjust, though enormously profitable. (Interest on the national debt is approximately one billion dollars per working day).
Worst of all, the ability to buy anything for nothing means that bankers can buy governments, and thus, indirectly, become governments themselves. Franklin D. Roosevelt referred to this about sixty years ago when he remarked to Colonel House that "certain financial interests" have owned the United States government since the days of Andrew Jackson.
Revolution is long overdue. Go get started, I'll hold your coat. Taking on the government is too hazardous to contemplate. A revolution by force is against the law--the government says so! Traitors are hanged. The Founding Fathers escaped this fate because they won. As the poet says, when treason doth succeed, none dare call it treason. It's doubtful revolutionaries could succeed today. Even in Revolutionary War times, only about a third of the population supported the war, although it was winnable.
But the government doesn't need to be tackled directly. Maybe its Achilles heel is the banking system. Is there any reason why a group of patriots couldn't form their own bank? I know that it has been attempted before, with unfortunate results. Some of those failures, however, had to do with the banks attempts to maintain the privacy of its customers, or keeping deposits in silver and gold. There's nothing wrong with that in the least, but it certainly makes the bank a target.
The bank I envision would operate exactly as most other banks do. The difference would be that it would charge interest rates laughably lower than existing banks. It could afford this because any profit on an investment of no thing is infinitely large. Sure, that profit would be no thing also, but as long as people are willing to give goods and services for no thing, you could exchange it for actual wealth.
In addition, our bank would have free checking, free checks, and postage-paid bank-by-mail envelopes. No safe deposit boxes or other fripperies. Our customers would be told up front that they would have to pledge real wealth as collateral for the bank credit created de novo as their loan. If they objected, it would be pointed out that this is exactly what they do at ordinary banks, but at vastly higher rates of interest.
To expect people to abandon the use of bank credit for real money overnight is unrealistic. They might be weaned from it though, by cheap banking, with no secrets about the nature of the fiat being created/loaned.
If you find the third paragraph hard to believe, here is the documentation:
The Federal Reserve Bank of St. Louis
January 28, 1986
Dr. Paul A. Hein, Jr.
(address)
Dear Dr. Hein:
In your recent letter you asked about the share of money created by the Federal Reserve in paying its bills. In 1984, net expenditures of the Federal Reserve System were $1.1 billion. The increase in M1 from the fourth quarter of 1983 to the fourth quarter of 1984 was $27.4 billion. Thus, Federal Reserve expenditures accounted for about 4 percent of the growth in M1 in 1984. I hope these numbers help you put these concepts into perspective.
Sincerely,
(s/)
R. Alton Gilbert Assistant Vice President
Counterfeiting is a federal offense. The Federal Reserve is a private enterprise doing daily what would get anyone else a stiff prison sentence.
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