"Redeeming Lawful Money"

[Pottapaug1938]

It would also help if Van Pelt's posts were truly limited to "proof or silence". Since his account went on moderated status, I can't think of one which comes close to offering the proof demanded of him.

[The Observer]

It would also help if Van Pelt's posts were truly limited to "proof or silence". Since his account went on moderated status, I can't think of one which comes close to offering the proof demanded of him.

That would be fine, except people have been asking David for explanation of his theories instead of just proof in many of the latest exchanges or have been taking personal shots at David. As Wes pointed out, we are never going to get proof from David, so my recommendation would be to put him on ignore if you are having problems with what he posts. Otherwise, responding to his posts and then expecting him to not respond back is unrealistic, given that you understand David's motivations.

[The Observer]

How about splitting off and locking the collection of Merrill's losses and preserving his epic failures for posterity, and then locking this turkey and be done with it.

That would be my vote as well. We have more than enough evidence, examples and anecdotal quotes to fully document why "redeeming lawful money" doesn't work as its proponents claim it does. We can consider Wes' blog entry as another Quatloosian lighthouse erected to warn those away from the rocky shoals of "redemption."

[wserra]

I intend to include the info about the losses in the blog entry, along with various citations. I probably won't have the time to put it up until the weekend.

Anyone know if Blogspot uses bbCode? HTML? Something else?

[webhick]

If it's anything like Wordpress, it's WYSIWYG.

[LightinDarkness]

Did I correctly read somewhere that DMVP actually lives off government assistance? My apologies if I am confusing him with someone else. If he does, how does he explain redeeming lawful money when he himself is receiving checks from the evil, maniacal government which convert to FRNs?

Also, David, since your argument seems to be (from what I can make of it - honestly it reads like gibberish most of the time) that no one on this board understands how redeeming lawful money works because we do not understand IRS tax attorneys, Congress, or the law. I have a great idea then - why don't you write an article and submit it to a premiere peer reviewed journal where you would only be judged by peers on your level who would understand all these things?

May I suggest the American Economic Review as a good starting point? I would be more than willing to accept I am just too dumb to understand the complex process of redeeming lawful money if your peers reviewed such an article and deemed it worthy of publication in such a journal. And of course, they would obviously deem it worthy of publication, since you are suggesting a ground-breaking paradigm shift in how we understand money.

[LightinDarkness]

Blog? What Blog is that Wserra?

Interesting - you didn't answer the question about living off government assistance. If that is true, then its hilarious. Because then (according to you) you would be adding to the debt by receiving those evil FRN notes every month.

And why have you declined to submit your vast work to a journal where you could be reviewed by people on your level (since according to you everyone on this board just doesn't "get" it)? You wouldn't even have to write much new stuff, you could just send in your volumes of material already written. I mean surely, what better way could there be to show everyone that you are right by having your stuff published in a peer reviewed journal? I would even be willing to pay for the paper and postage if thats an issue. Upon publication I'll even use your little stamp and send you "redeemed" money! So when can we expect the American Economic Review to receive your submission? There should be no reason why you would decline to do this...unless your just peddling BS, of course.

[wserra]

The blog entry is up. Should anyone feel that it is an accurate account and wish to link to it, feel free.

I don't think I'm going to lock this thread. I am, however, going to aggressively move posts which do not address the issue of redeeming lawful money. If your post does not so address, and you don't wish it moved, please find the appropriate thread or start a new one.

[Famspear]

The blog entry is up. Should anyone feel that it is an accurate account and wish to link to it, feel free....

Thanks, Wes!

[Burnaby49]

Thanks, finally an explanation of the "redeem for Lawful Money" argument I can follow. Not that I can comprehend (as if anyone can) the gibberish that your cited cases were spouting in their court filings but at least I understand what futile point they are arguing. Van Pelt's convoluted rambling explanations made no sense whatever to me.

[LPC]

Inspired by the blog post, I ran a search for "lawful money" among tax cases, and found the following:

PETITIONER'S FILING HISTORY

Petitioner's repeated failures to file returns did not begin with the first year in issue. Petitioner's history of nonfiling began more than 20 years ago, with his filing of a "tax protester" return for 1975.

Petitioner filed proper income tax returns for 1973 and 1974. Petitioner's 1975 return was a "tax protester" return, accompanied by voluminous materials advancing arguments now generally dismissed by courts as having no merit, e.g., that Federal Reserve Notes are neither "lawful money" nor "dollars", that the Fifth Amendment relieves taxpayers of the obligation to file tax returns, etc. Because a tax liability could not be computed from petitioner's 1975 return, the Commissioner reconstructed petitioner's income for that year, and determined a deficiency. Petitioner contested that deficiency in this Court; we sustained the Commissioner's determination in 1978.

Hans C. Sherrer v. Commissioner, T.C. Memo. 1999-122 (affirming deficiencies for 1989-1994, with additions to tax for fraud)

On appeal, Taxpayers continue to assert baseless arguments and allegations. For example, Taxpayers allege the Commissioner "has directly subjected the Appellant[s] into involuntary servitude." They also question whether "Federal Reserve notes . . . are in fact Lawful Money."

Marlene D. Noah, et vir v. Commissioner, 82 AFTR2d Par. 98-5069, Nos. 97-9018 and 97-9019 (10th Cir. 1998) ($2,000 in sanctions imposed for frivolous appeal), aff'ng Nos. 27000-96 and 27001-96 (U.S.T.C.) (dismissing petitions and imposing $5,000 in sanctions).

The documents that petitioner filed in the instant case, and petitioner's testimony, include the following:

[...]

All Federal Reserve Notes were NOT redeemable in any lawful money of the United States. [P's resp. to ST., p.2, par.19]

Federal Reserve Notes have never been considered by Congress or the Constitution to be Constitutional Money. [P's resp. to ST., p.2, par.20]

The issue that I want to bring forth is the Federal Reserve notes that circulate as dollars today are not dollars, and I didn't receive dollars. And I still stand and believe that I had no duty to report to the Federal Government my receipt or my expenditures of Federal Reserve notes. Federal Reserve notes are not legal tender, * * * Federal Reserve notes do not conform to the purported guidelines of their issuance, * * *. The founding fathers never intended for anything but dollars representing a parity of gold or silver content in fineness and weight as defined by the Coinage Act of 1792. [TR 30, lines 12-25; TR 31, lines 1-2]

[...]

Petitioner's proposed findings of fact, in their entirety, are as follows:

PETITIONER'S REQUEST FOR FINDING FACT [sic]

1. Throughout the year 1993, or any other year, petitioner was not involuntarily obligated to file a federal income tax return, returning a portion of the unredeemable Federal Reserve notes to respondent and its issuer the United States.

2. Because petitioner was not obligated to file this return to the obligator in the first instance, fraudulent penalties in denominational amounts of unredeemable Federal Reserve notes should not be levied against the petitioner in accordance with section 6673 or any other internal revenue law for that matter.

[...]

Petitioner's most clearly stated explanation is that he was paid in Federal Reserve Notes, which are not lawful money and which are worthless. Yet, petitioner used the supposedly worthless Federal Reserve Notes to pay his expenses. We do not believe petitioner really thought that the Federal Reserve Notes were worthless.

[...]

From the foregoing, we conclude, and we have found, that petitioner's failure to timely file his income tax return for 1993 was fraudulent.

Gaylon L. Harrell v. Commissioner, T.C. Memo. 1998-207 (affirming additions to tax for fraud and imposing $10,000 in sanctions for frivolous arguments)

B. LEGALITY OF FEDERAL RESERVE NOTES

[11] Plaintiffs contend that the government waived its sovereign immunity by issuing federal reserve notes in lieu of coinage, relying upon 12 U.S.C. section 411. /2/ Plaintiffs' reliance is misplaced, as Section 411 does not provide a cause of action against the United States but instead specifically permits the issuance of federal reserve notes as authorized currency of the United States.

[12] Plaintiffs further seek an injunction against the Internal Revenue Service ("IRS") to prevent tax collection activities on federal reserve notes, contending that federal reserve notes are not lawful money of the United States "as defined and intended by the spirit of the Constitution" and that Congress has violated the separation of powers doctrine by issuing federal reserve notes which are not redeemable in coin, thereby rendering federal reserve notes "counterfeit securities." Pls. Brf. At paragraph 17-30, 37-39. Plaintiffs are incorrect.

[13] The contention that paper money is illegal has been consistently rejected. See, e.g., Guaranty Trust Co. v. Henwood, 307 U.S. 247 (1939); Norman v. B. & O.R. Co., 294 U.S. 240, (1935); U.S. v. Whitesel, 543 F.2d 1176 (6th Cir. 1976), cert. denied, 431 U.S. 967 (1977); U.S. v. Wangrud, 533 F.2d 495 (9th Cir. 1976); U.S. v. Gardiner, 531 F.2d 953 (9th Cir. 1976), cert. denied, 429 U.S. 853 (1976); U.S. v. Rickman, 638 F.2d 182 (10th Cir. 1980); U.S. v. Ware, 608 F.2d 400 (10th Cir. 1979); Birkenstock v. Commissioner of Internal Revenue, 646 F.2d 1185 (7th Cir. 1981).

[14] Over one hundred years ago, in Juilliard v. Greenman, 110 U.S. 421 (1884), the Supreme Court stated:

The constitutional authority of congress to provide a currency for the whole country is now firmly established . . . By the constitution of the United States, the several states are prohibited from coining money, emitting bills of credit, or making anything but gold and silver coin a tender of payment of debts. But no intention can be inferred from these to deny to Congress either of these powers. . . . Under the power to borrow money on the credit of the United States, and to issue circulating notes for the money borrowed, its powers to define the quality and force of those notes as currency is as broad as the like power over a metallic currency under the power to coin money and to regulate the value thereof. Under the two powers, taken together, Congress is authorized to establish a national currency, either in coin or in paper and to make that currency lawful money for all purposes, as regards the national government or private individuals.

Juilliard, 110 U.S. at 446.

[15] Congress has exercised this power by delegation to the federal reserve system. 12 U.S.C. section 411. Federal reserve notes are legal tender for all debts, including taxes. 31 U.S.C. section 392; /3/ Milam v. U.S., 524 F.2d 629 (9th Cir.1974). The United States Constitution, art. 1, section 10, "prohibits the states from declaring legal tender anything other than gold or silver, but does not limit Congress' power to declare what shall be legal tender for all debts." U.S. v. Rifen, 577 F.2d 1111, 1112 (8th Cir. 1978). Since Congress has done so, there can be no valid challenge to the legality of federal reserve notes. United States v. Anderson, 584 F.2d 369, 374 (10th Cir. 1978).

Nicky Jean Wilson, et al. v. United States, 81 AFTR2d Par. 98-785, No. 97-WY-1620-AJ (U.S.D.C. Col. 1998) (report of magistrate judge recommending dismissal of complaint for injunction against the United States)

[Lambkin]

The blog entry is up.

Thanks! I find it much more readable than this thread. I look forward to David's blog post in response, in which he lays out the hard facts about his victories, including names and case numbers.

[Kestrel]

Wikipedia has two articles on Federal Reserve Notes and United States Notes which shed considerable light on the history and evolution of Lawful Money. The key paragraph is in the Federal Reserve Note article:

At the time of the Federal Reserve's creation [in 1913], the law provided for notes to be redeemed to the Treasury in gold or "lawful money." The latter category was not explicitly defined, but included United States Notes [issued from 1862 until 1971], National Bank Notes [issued from 1863 to 1935], and certain other notes held by banks to meet reserve requirements, such as clearing certificates [superceded by the Automated Clearing House (ACH) system in the early 1970s].

My understanding of the situation is this, which may not be correct in all details because I'm not citing the code changes and court decisions, but I think I've hit the high points:

In a nutshell, when the Federal Reserve was created in 1913, Lawful Money was any of several different kinds of financial instruments. Some of these were Legal Tender, others were not. In 1913, Legal Tender included gold, silver, and United States Notes. Because a Federal Reserve Note was NOT specifically designated Legal Tender AT THAT TIME it was redeemable into some other form of money that WAS Legal Tender. Since the 1970s there has only been ONE type of Lawful Money and Legal Tender, the FRN, and nothing else exists for a FRN to be redeemed into.

Period. End of story. Tough luck DMVP, Ron Paul, Tommy Cryer (yes, he was making similar "lawful money" claims: Federal Reserve Defaults), and everyone else out there in Lawful Money la-la land.

From 1914 through 1927, Federal Reserve Notes carried the statement, "This note is receivable by all national and member banks and Federal Reserve Banks and for all taxes, customs and other public dues. It is redeemable in gold on demand at the Treasury Department of the United States in the city of Washington, District of Columbia or in gold or lawful money at any Federal Reserve Bank."

From 1928 until 1933 FRNs carried a statement which said, "Redeemable in gold on demand at the United States Treasury, or in gold or lawful money at any Federal Reserve Bank."

In 1934, Federal Reserve Notes were finally officially designated Legal Tender when the words on the face of FRNs were changed to read, "This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank." Concurrently, National Bank Notes were withdrawn from circulation.

In 1963 the redemption clause was removed from both Federal Reserve Notes and United States Notes, and the words were changed to read merely, "This note is legal tender for all debts, public and private." Also in 1963 the FRN was issued for the first time in the $1 denomination. Prior to 1963 all $1 bills were United States Notes, and the smallest FRN was the $5 note.

On March 25, 1964, Secretary of the Treasury C. Douglas Dillon announced that Silver Certificates would no longer be redeemable for silver dollars. Subsequently, another act of Congress dated June 24, 1967, provided that Silver Certificates could be exchanged for silver bullion for a period of one year, until June 24, 1968. The last coins containing silver which were issued for general circulation (not for collectors items) were half dollar coins issued in 1969. If you followed the link I provided above for Cryer's position, you saw that in his oh-so-extensive, exhaustive, and comprehensive legal research, he missed seeing this particular memo.

And, as I mentioned above, United States Notes were no longer issued after 1971. Since 1928 United States Notes had increasingly been superceded by Federal Reserve Notes, and by 1971 it no longer made any sense to have two official types of Legal Tender notes in circulation.

The law and technology have evolved considerably in the last 99 years. Now in 2012, the other types of Lawful Money no longer exist. The only type of Lawful Money remaining, like it or not, IS the Federal Reserve Note.

[Pottapaug1938]

I remember being in downtown Boston in June of 1968, and seeing people going into coin shops with their silver certificates (one had wrapped his in aluminum foil and labeled it "yeast" -- I guess he stored it in his refrigerator or freezer). For each silver certificate, they were given a small baggie full of silver granules, which looked like the ones I saw at my father's place of work (the old V.A. Outpatient Clinic, where Dad was an X-ray Technician) coming out of the silver recovery machine. I'd love to know if anything was ever done with the majority of this silver; but I'll bet that a lot of it was thrown out or sold to jewelers for chump change.

[wserra]

(1) Michael David [Cress - these guys don't believe in last names] v. Geithner, 12-cv-3442 (CAND). . . . Dismissed, sua sponte, about two months after Cress filed the action.

After the dismissal, Cress files this. Cress not only feels that "redeeming lawful money" means that he doesn't have to pay federal taxes. No, it also means that he doesn't have to pay parking tickets, state taxes, and credit card bills. Hey, when you got a panacea, you got a panacea.

Very principled position. As Agent Smith put it, "Me, me, me."

[Pottapaug1938]

And, as I mentioned above, United States Notes were no longer issued after 1971. Since 1928 United States Notes had increasingly been superceded by Federal Reserve Notes, and by 1971 it no longer made any sense to have two official types of Legal Tender notes in circulation.

The law and technology have evolved considerably in the last 99 years. Now in 2012, the other types of Lawful Money no longer exist. The only type of Lawful Money remaining, like it or not, IS the Federal Reserve Note.

The problem is that the guy in Colorado has this fantasy that, presto-changeo, you can magically transform a FRN into a USN by stamping it with certain legalistic verbiage about redeeming lawful money. Facts don't have a chance against a fervently held, desperately retained belief.

[David Merrill]

That is not the reason I stamp the bills. I do it to teach people to look up and become familiar with the law.

[Pottapaug1938]

And, as I mentioned above, United States Notes were no longer issued after 1971. Since 1928 United States Notes had increasingly been superceded by Federal Reserve Notes, and by 1971 it no longer made any sense to have two official types of Legal Tender notes in circulation.

The law and technology have evolved considerably in the last 99 years. Now in 2012, the other types of Lawful Money no longer exist. The only type of Lawful Money remaining, like it or not, IS the Federal Reserve Note.

The problem is that the guy in Colorado has this fantasy that, presto-changeo, you can magically transform a FRN into a USN by stamping it with certain legalistic verbiage about redeeming lawful money. Facts don't have a chance against a fervently held, desperately retained belief.

I could search for the quote; but I'd much rather spend my time doing something productive like trimming my fingernails. Until the guy provides the roof, for his allegations, which we have been demanding for years, he's not worth further effort.

[LPC]

After the dismissal, Cress files this. Cress not only feels that "redeeming lawful money" means that he doesn't have to pay federal taxes. No, it also means that he doesn't have to pay parking tickets, state taxes, and credit card bills.

The Michigan state income tax notice of decision says that he filed a Form 4852 reporting $0 in wages, but $3,618 of income tax withheld.

Which means we've probably got one of Hendrickson's heroes here.

A search of LH and Tax Court doesn't turn up anything.

[Kestrel]

Cress not only feels that "redeeming lawful money" means that he doesn't have to pay federal taxes. No, it also means that he doesn't have to pay parking tickets, state taxes, and credit card bills. Hey, when you got a panacea, you got a panacea.

Very principled position. As Agent Smith put it, "Me, me, me."

I see every page is marked "Refused for Cause." I don't see any mention of the appropriate UCC code section, nor what "cause" he invokes other than stating (without explanation or evidence) that everything attached are false claims.

Problems: Per the UCC, Refusal for Cause has to do with rejecting those negotiable instruments which are presented to you to satisfy a debt owed to you. None of the "presentments" he rejects are negotiable instruments, and none of them were presented to satisfy a debt owed to him.

Somehow, I have the feeling that if the bottom of the letter from Capital One Bank resembled a tear-off check he would change his mind about refusing it.