"On Money:"
           "A Candid Proposal to Change Public Policy"


                Paul Andrew Mitchell, B.A., M.S.
               Counselor at Law, Federal Witness,
             Private Attorney General, and Candidate
              for the U.S. House of Representatives

                          July 15, 1998

     Assume for  the moment that the Congress can be persuaded to
face the  cruel facts,  and to  abolish the  federal  income  tax
completely (because  those tax  revenues are  not paying  for ANY
government services  whatsoever) and  replace it  with nothing at
all (not  even a  national sales  tax).   Where does  this action
leave us, as a nation and as an economy?

     The answer is important  and also difficult,  because of the
economic complexities that were introduced by the Federal Reserve

     In the  book entitled  "The Federal Zone,"  the  IRS and the
Federal Reserve  Banks are  likened  to  two  pumps,  working  in
tandem: the banks pump money and credit INTO the economy, and the
IRS pumps (sucks?) money and credit OUT of the economy.  The real
economic reason  for having an IRS, in its present configuration,
is to maintain the purchasing power of Federal Reserve Notes.  If
FRN's were  allowed to flood the marketplace,  without a counter-
balancing force  to remove  them from  the marketplace,  we would
experience  the very same  hyper-inflation which  plagued Germany
after World War I.

     Thus, it  is clear  that, to stop this essential connection,
the two pumps must be stopped at approximately the same time.

     Only a  very few,  quite brave  Americans  have  had  enough
courage and  insight to  face a  solution which  may not  be  too
obvious to  those who  are less  educated about monetary systems,
and  monetary fraud.  This solution is,  very  simply,  that  the
foreign banks who have extracted immense wealth from America, via
the federal  income tax,  must now "eat" the Treasury Bonds which
they purchased  with money  they created  out of  thin air, quite

     Remember, the  FRB pays  Printing and  Engraving less than 3
FRB obtains a legal lien on collateral equal to the face value of
the FRN,  PLUS INTEREST.   Thus,  for a  total cost  of  3  cents
($0.03), FRB  gets to  collect about  $107.50  from  our  economy
(assuming 7.5%  interest on  a $100  FRN).  This much leverage is
obviously unjust enrichment,  because  the $0.03  "cost" is  also
created out of thin air.

     The crucial  connection which  must be  recognized  is  that
FRN's do not get created now,  until and unless  the debt ceiling
is raised.  Put in simpler words, FRN's do not get created, until
and  unless   more  Treasury   Bonds  are   sold,  and  FRB  gets
preferential treatment on the purchase of such bonds.

     Thus, to  break the  cycle of  monetary fraud,  cash must be
created without  also increasing  the federal  debt, without also
authorizing  the issuance and  sale of additional Treasury Bonds,
and without also increasing inflation.

     Remember, higher  prices are  not the  "cause" of inflation;
higher prices  are the "effect" of inflation, which is defined to
be a  disproportionate increase  in the money supply, relative to
the amount of goods and services being exchanged.

     The  solution  which  JFK  devised,  was  to  authorize  the
printing of "U.S. Notes" (the ones with the distinctive "red dot"
Treasury emblem).   Some  believe that  it was this action, among
others, which cost JFK his life.

     U.S. Notes  were a  straightforward solution  to eliminating
the connection  between cash creation and debt ceiling increases.
JFK's U.S.  Notes were  NOT created  at the expense of additional
debts payable  to foreign  banks, via  the Treasury  Bonds  which
would normally  have been  sold to  those  banks.    Despite  the
obvious risks inherent in this solution, it remains a viable one,
whether or  not those U.S. Notes are actually redeemable.  Please
defer, for the moment, the question of redemption.

     The main  advantage  which  U.S.  Notes  have  over  Federal
Reserve Notes,  is that  the  former  have  no  interest  expense
attached to them,  whereas the latter do have an interest expense
attached to  them (in  addition to  the problem of the FRB's huge
leverage, discussed above).

     Another, quite  similar solution  is to issue "Silver Bonds"
which are  Treasury Bonds  that are  only  redeemable  in  silver
substance, at their maturity date.  A proposal was made last year
to issue  Silver Bonds  with 1-,  2-, and  3-year maturities, and
interest rates  slightly above  market rates.  This program would
be coupled  with an aggressive federal government program to mint
large  numbers  of  silver  dollars  (not  the  "clad"  coins  we
currently use).   Those  individuals and  companies who  had  raw
silver to  sell to the Bureau of Engraving and Printing, would be
paid in  bank credit,  Silver Bonds,  or U.S.  Notes, but  NOT in

     The other  aspect of this program would be to recall Federal
Reserve Notes  on a  one-to-one basis with new U.S. Notes, "over-
the-counter" (i.e. no bank accounts, cash transaction reports, or
SSN's required).   FRN's  would be treated as "bearer bonds" (for
those of you who know the meaning of that term).

     Once the  silver coin  production is ramped up, Congress can
deliver on  its promise  to redeem Silver Bonds when they mature.
Later, as  the supply  of FRN's  dwindles and  the  corresponding
supply of  U.S. Notes increases, Congress would be asked to phase
in  a  redeemable  U.S.  Note,  in  a  fashion  which  eases  the
transition to  a redeemable currency.  Silver bonds would be very
attractive  investments   for   public   agencies,   like   state
governments and  their political  subdivisions.   At maturity, of
course, Silver Bonds could be used to purchase more Silver Bonds.

     The  quantity  of  Silver  Bonds  to  be  issued,  would  be
controlled  by  the  amount  of  silver  dollars  to  be  minted;
clearly, this  is the  kind of  determination which  Congress has
constitutional authority to make.

     The major  problem which  must be  solved,  under  this  new
national policy,  is the  massive "skew"  which is present in the
substantive equivalent  of the  FRN.   One silver  "dollar" today
buys about seven (7) Federal Reserve Notes.

     As long  as the  FRN circulates,  and as long as such a skew
exists,  people will be  better off  to trade  their  silver  for
FRN's,  because   they  get  7  FRN's  for  each  silver  dollar.
Obviously, if  you are buying milk and bread, you are much better
off to  be holding FRN's,  because  you have  SEVEN TIMES as much
purchasing power as you would have by holding silver, in the same
"nominal" amounts.  ("Nominal" here means "face value".)  Forcing
people to  exchange FRN's for silver, in nominal amounts, results
in stealing  huge amounts  of money  from the  people who possess
those FRN's.  That is the major reason why U.S. Notes are printed
--  to moderate the FRN's inevitable devaluation to zero.

     Thus, the  withdrawal  of  FRN's  from  the  entire  economy
represents a  massive, one-time  economic adjustment  which  must
occur, if we are to return to constitutional money in America.

     The proper  place for  an open  and candid discussion of the
consequences, would  be the  committee which conducts hearings on
the legislation that must be enacted, for this program to go into

     Without more  study, it  is impossible to be exact about the
magnitude and  distribution of  "damages."   But, take  this  one
example:  John Doe is  persuaded to  spend $100 FRN's on a silver
bond, which  matures at, say, 5% in one year.  One year later, he
gets $105  in silver dollars.  He then turns around and exchanges
them for  $735 in  FRN's (because the FRN's are still circulating
at 7-to-1).

     Then, he goes to the counter of his friendly local bank, and
exchanges the  FRN's for  U.S. Notes, one-for-one.  Clearly, this
is not  the kind  of  "appreciation"  which  Congress  would,  or
should, intend.    Conversely,  if  the  exchanges  flow  in  the
opposite direction,  Congress should never "force" such a massive
devaluation in  the common  man's purchasing  power.  The federal
income tax  has already  done enough  of that,  for the  past  85
years!!  The new national  "policy" is  to keep  the money in our

     Putting a  future "kill" date on the FRN only aggravates the
problem I  have described  above, because people will not be able
to "defer"  their  decisions  after  that  deadline.    As  of  a
particular date,  the FRN  is officially  worthless.  This "kill"
date must  also be  coordinated with  legislation which dishonors
the Treasury Bonds which foreign banks now own (i.e. we must shut
off both pumps at approximately the same time).

     Clearly,  if  the  Silver  Bond  solution  is  adopted,  the
maturity  dates   on  these  bonds  also  need  to  be  carefully
coordinated with the deadline for total withdrawal of the Federal
Reserve Note.  FRN's can  be used  to purchase  Silver Bonds;  or
FRN's can  be traded for U.S. Notes, "over the counter" and "one-
for-one" at all participating banks (read "all banks" by law).

     To illustrate, the ramp-up in minting of silver coins should
begin BEFORE  the first  Silver Bond  matures, and  enough silver
dollars must  be warehoused  to cover  all Silver Bonds which may
get redeemed.   By  law, I would require 100% of all Silver Bonds
to be  redeemable, on  demand, as  proof of  the good  faith  and
credit of  the United  States (federal government) under this new

     Now, assuming  that the U.S. Treasury Dept. can develop bank
and consumer  regulations which smooth this important transition,
what are the real political ramifications?

     The  answer   to  that   question  falls   squarely  on  the
willingness of  wealthy foreign banks to tolerate the huge amount
of debt they must eat, as a result of implementing this solution.

     Dr. Edwin  Vieira has  confronted this problem, in his essay
"Return  to  Constitutional  Money,"  and  concluded  that  these
foreign banks  should be  given no  choice in the matter:  either
eat the debt, or face criminal racketeering charges.

     There are  many  educated  Americans  who  fear  that  these
foreign banks  would choose  instead to wage an overt war against
America, rather than forego all this future revenue.  The federal
government must  face this  possibility realistically,  and treat
any such threats as nothing less than an expression of treasonous
intent to  invade our  shores.   A policy  of peaceful transition
must be clarified by the Congress, and our loyal military must be
alerted to the probability of foreign invasion during this period
of transition.

     Indeed, the  foreign invasion appears already to have begun,
under auspices of U.N. command.  The United Nations is controlled
by the  very same  foreign banks  who now hold massive numbers of
U.S. Treasury Bonds slated for dishonor.

     I don't  want to  get too  "far out"  with a  discussion  of
probable future scenarios. However, it is essential to understand
that the  foreign banks who presently  hold Treasury Bonds,  must
face a  future in  which those Bonds are destroyed, because it is
the new  policy of  the United  States  (federal  government)  to
dishonor  bonds  which  were  acquired  by  means  of  fraud  and
racketeering by  foreign banks, particularly if the real leverage
of their "scheme" is in a ratio of $107.50-to-$0.03!

     I assume you all have calculators to do your own computation
of this ratio.

Sincerely yours,

/s/ Paul Andrew Mitchell, B.A., M.S.

Counselor at Law, Federal Witness,
Private Attorney General, and Candidate
for the U.S. House of Representatives

email:    Contact Us

website:  http://supremelaw.org

                             #  #  #

Return to Table of Contents for

Paul Andrew Mitchell