The President and Vice President should be elected separately. There have been occasions in the past when a president was elected, but the vice presidential candidate elected at the same time was clearly not the choice of the people. The people should have a clear choice in each race.

The same logic applies here to that of Senators and Representatives. Often, a voter has been left with a choice between two undesirable candidates. By voting yes or no to a nominee rather than for one candidate or the other, the voter is not bound to accept a bad candidate.

A certain amount of maturity is clearly necessary for the person who will be the Commander-in-chief of the armed forces. The concern over a person reaching the office of President with a foreign allegiance or nefarious intent is obsolete and makes a clause such as "natural born citizen" unnecessary.

The power to make war is the most dangerous power of government, but since the sole purpose of government is to secure the rights of individuals, including the right not to be attacked by an invasion, it is a necessary power. Because this power is so dangerous, both to the inhabitants of the nation and to those of foreign nations, it must be strictly controlled to insure that the government remains a defender of human rights, and not an aggressor itself.

Entangling alliances with foreign nations have caused tremendous harm over the centuries, World War I being the most glaring example. Alliances are geopolitical hegemony and are never in the interest of the people. The only treaty that can be made in the interest of the people is a peace treaty to end an existing war. Since the Confederation of Free States will by default be in a free market relationship with all nations, there is no reason for any economic alliances either. The Constitution provides for automatic reciprocal tariffs toward any nation that imposes tariffs.

Meddling in the internal affairs of other nations makes them hostile toward us, which endangers the lives of the citizens the Federal government is charged to protect. When foreign nationals are hostile to us, there is always an attempt by our own government to reduce the liberty and privacy of citizens in the name of "national security". A prudent foreign policy that does not interfere with the internal affairs of other nations is the most secure way to protect the people.

There is a distinct difference between businesses operated by an individual and that of a corporation. An individual has a conscience, a corporation does not. An individual can be held liable, with all assets exposed, for any harm done to the members of society. Individual assets of corporate stockholders, however, are protected and while the corporate assets may be threatened, it may also be true that the risks of loss may be offset by the potential for tremendous profits. There is no better example of this than the pharmaceutical industry and the harm done by "legal" drugs. A corporation simulates the phenomenon of "group think", or "mob rule", in which, because of lack of clear responsibility, a group of individuals may perform some act that they would never do as individuals. Without complete responsibility, complete freedom cannot exist.

In order to understand the rationale for Sections 11 and 12, one must know the history of banking.

The economic crisis in the United States which began in 2008 brought the function of currency into the spotlight. Normally the subject of money, what it is and how it is created, is not something with which the general population is concerned. The public only pays attention when money is in short supply. In the history of the United States this has happened numerous times. When this has occurred it has always resulted in hardships for the people, especially those who find themselves on the lower end of the economic spectrum. These hard times have been known by different labels historically, but usually are described as depressions, recessions, or panics. Some have lasted only a few months, and some a number of years. The gloomy 30s, known as the Great Depression, actually lasted from 1929 until the end of World War II in 1945.

These difficult times can be minor and sometimes result in merely the reduction of a few pleasures that were being enjoyed during the previous boom years. Often, however, they are much more damaging, devastating families, creating poverty, and resulting in the loss of life savings for large segments of the population. The United States monetary system was structured so that the expansion and contraction of the money supply is inevitable. When the money supply contracts, someone has to lose. In a game of economic musical chairs, it is always the lower and middle income groups that lose the most, proportionally.

The founders of America, especially Thomas Jefferson and James Madison, were well aware of the importance of sound money. They attempted to insure that a system of sound money was written into the Constitution of the United States.

The issuance of money has always been one of great temptation for government. The power to create money can easily be viewed as the most essential power. Mayer Rothchild is reported to have said, "Give me control of a nation's money, and I care not who makes the laws". The Founding Fathers were very much aware of this and the practice of governments issuing "fiat currency". Fiat currency is paper money that has no intrinsic value. It is a practice that, unchecked, inevitably leads to economic collapse. For that reason, the Founders included the following prohibition in the constitution:

"No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts;" Article I, Section 10, Clause 1.

What was the purpose of this clause? The founders knew the history of the goldsmiths. Goldsmiths were the precursors to bankers in Europe. The University of North Carolina economics department web site explains their activities like this:

"Several centuries ago, money consisted primarily of gold coins. Wealthy people found the amounts of gold they accumulated quite heavy. (Gold is only semi-portable.) An even bigger drawback is that thieves love gold. Gold pieces (or modern coins for that matter) are rarely identifiable as stolen. Looking around for safe places to store their wealth, people in medieval Europe thought of goldsmiths. Goldsmiths made jewelry, gold statues, and other precious goods. Most also had some excess space in their heavily guarded vaults.

Most goldsmiths were willing to store valuables for a small fee and issued receipts for the gold deposited with them. Buyers found it convenient to exchange these receipts instead of physically getting the gold, and sellers were happy to take the receipts because they knew they could redeem them for gold whenever they wished. This was the beginning of checking accounts – the receipts issued by the goldsmiths were primitive demand deposits.

Goldsmiths observed that they stored nearly all of a community's coins and that the gold in their vaults fluctuated little. When a buyer paid for a purchase with a gold receipt, sellers typically were content to leave the gold in the vault. After all, receipts could be used for purchases as readily as gold. One depositor’s withdrawal was just another customer's deposit. The goldsmiths began lending some of the gold on deposit to borrowers who would pay interest. In fact, they seldom physically relinquished much gold – just like depositors, most borrowers preferred receipts to the actual gold. This was the origin of modern fractional reserve banking."

It did not take long for the goldsmiths to figure out that they could lend out more receipts than they actually had in gold, and that they could make interest off of it. So they were making profits off of assets that did not exist! It was nothing more than theft. This was exactly what the above mentioned clause in the Constitution was designed to prevent.

Early American History

What exactly is a dollar? Today, most people would find it difficult to give an actual definition, but originally congress provided a specific definition of a dollar. A dollar was actually merely a unit of measure. Law dictionaries of the late 1800s evidenced this. Bouvier's described the dollar as "four hundred and seventeen and fifteen seventeenths grains troy" [of silver].

Black's Law Dictionary in the same timeframe defined the dollar as 100 cents. It defined a cent as 72 grains consisting of 88% copper and 12% nickel. As we can see, originally money in the United States had specific intrinsic value. This all began to change in 1913 with the creation of the Federal Reserve.

Economically speaking, the measure of a sound currency is indicated by inflation. The rate of inflation is the rate at which the currency loses buying power. This occurs if the money supply increases faster than the amount of goods and services available. Increased prices are the most reliable indicator of this phenomenon.

Technological advancement under a stable currency will allow prices to actually fall. MeasuringWorth.com provides a web page with a program that calculates the buying power of a given amount of dollars for any particular year. Here you can see that the same amount of goods that you could have purchased in the year 1810 with $100 could have been purchased in the year 1910 with only $77.03. The purchasing power of the dollar actually increased, even though the definition of a dollar had not changed. A stable currency combined with widespread liberty transformed America from a new world colony into one of the most prosperous countries in the world in just over 100 years.

The 19th century did have disturbances however. Although the definition of a dollar was fixed and government minted silver and gold as prescribed by the Constitution, private banks did issue notes, paper currency that the people used for money just as the earlier goldsmith receipts had been used. Normally these receipts were convertible to specie (metal), either gold or silver held in the bank's vaults, whenever the holder of the receipt demanded. Banks, however, were unable to resist issuing notes in excess of their reserves. This created, for a time, a robust economy, but it was inevitably followed by a crisis of varying degrees brought about when the value of the notes depreciated, as they always did. As people demanded specie instead of notes from the banks, the crisis ensued.

The first widespread panic occurred in 1819. The creation of the Bank of the United States had transformed banking from a mostly local phenomenon to a national one. In order to be able to make good on payments coming due for the Louisiana Purchase, the bank suspended specie payment for its notes. Since most local banks had dealings with the national bank also, the money contraction resulted in falling prices, loan defaults, and foreclosures throughout the country. Although there were small attempts at legislation to relieve the problem on both the state and national level, very little was actually done. By 1822, the crisis was over, specie payments had resumed in most of the country, and commerce had essentially returned to normal. The only lasting effect was on the debtors, many of whom had lost much of their holdings.

This pattern continued for much of the 19th century, but since there was no national bank after the Second Bank of the United States was dissolved in 1936, the effects of expansion and contraction of the money supply were often local and not widespread. One exception to this was during the Civil War, when Lincoln printed paper currency known as "Greenbacks" to fund the war.

From 1870 until 1893 the era known as the Gilded Age saw tremendous industrial development, resulting in huge fortunes for some such as J.P. Morgan, but also the greatest increase in real wages in American history for the working class. Even so, disturbances occurred, with the panic of 1873, a severe depression from 1893 to 1897, and another panic in 1907. All of these were caused by a combination of over expansion of the money supply and of speculative investments. Congress, under pressure from the bi-metalism movement, had a hand in disrupting the market with the passage of the Sherman Purchase Silver Act of 1890

The Twentieth Century

All of this began to change in 1913. With the creation of the Federal Reserve the stage was set for transforming American banking and currency into a scheme that would have made the early goldsmiths green with envy. The government sanctioned privilege given to banks of the Federal Reserve System to create fiat currency combined with the forced acceptance of it via legal tender laws has provided the bankers with great power and wealth (at your expense!). Today, Bouvier's lengthy explanation of the dollar concludes with the following:

"When the word dollars is used in a bequest or in any instrument for the payment of money, the amount is payable in whatever the United States declares to be legal tender."

Current editions of Black's Law Dictionary do not even have the word "dollar" as an entry. The year 1913 began a gradual degradation of the dollar from a measurement of a specific amount of metal to a fiat currency, a piece of paper backed by nothing. By the 1920s, a national paper currency was widely used and accepted in the form of "silver certificates", bills that could be actually converted into silver upon demand. Milestones along the way included 1933 during the height of the Great Depression, when President Roosevelt made it illegal for Americans to own gold (since retracted), and 1971, when President Nixon was forced by the oil crisis to take America off the gold standard of $35 per ounce and allowed the dollar to float with respect to gold.

How has this affected you? As noted above the purchasing power of the dollar actually increased from 1810 until 1910. With the fantastic technological advances of the twentieth century, a stable currency should have become even more powerful. But MeasuringWorth.com reveals that the same amount of goods that could be purchased in 1910 for $100 would cost $2,330 as of 2010!

While incomes have partly kept pace with this increase in prices, personal debt has grown astronomically as well, which should be expected since we have a debt based currency. Moreover, this increase in wages and prices is the predominant reason for the loss of manufacturing and jobs in America to foreign markets. By making the Federal Reserve a private entity, Congress circumvented the constitutional requirement of using only gold or silver as money.

Where the Money Comes From

Anything can be used as money. Essentially, money is simply anything that can serve as a representative of some payment that is due. Past commodities used as money include precious metals, grains, salt (hence the word salary or the saying "he's worth his salt"), and other items that tend not to lose value over time. Even an I.O.U. is essentially money. Gold and silver became the most desirous form of money because they did not decay and were proven to hold their value. It has been said that an ounce of gold will buy the same amount of bread today that it would have bought in Moses' time. The price of gold today, which is daily quoted in financial pages, is not so much a reflection of the value of gold but rather the relative strength of the dollar.

Traditionally, gold and silver coins came into being as miners brought their metals to a mint. The U.S. government would fashion the metal into a coin that would provide credibility to the coin, and the government would retain a small portion of the metal for the service of making it into a certifiable coin. This portion could be stored as bullion and certificates printed to represent it. The certificates were used to pay for government services, and entered the general economy and circulated, just like the old gold receipts of the goldsmiths. A coin made of silver has a specific unique weight. This was reliable as everyone knew not to "take any wooden nickels".

Bills or Notes?

The silver certificates of old were known as dollar "bills". If someone owes you money, you send them a bill. On the other hand, if you owe someone else money, you give them a note. The currency you have in your pocket today are "Federal Reserve Notes". In other words, U.S. currency today does not represent an asset such as gold or silver or anything else. It represents debt. Money in the U.S. today is a "debt based currency." As we have seen, this situation has occurred gradually, progressively over decades. But aside from the practical applications, what really has happened? If your money in 1910 represented a valuable asset, and your money today represents a debt, you have suffered a loss. In addition, if you have suffered a loss, someone has realized a gain. Who?

You Have Been Robbed

Today, money is created constantly, not in the U.S. Mint, but in every bank in America, and with most approved applications for a credit card. The bankers of America are the beneficiaries of this scenario. Most people have the following incorrect image of how a loan occurs:

1. Joe goes down to his local bank and deposits $1,000 into a bank account. The bank may agree to pay Joe some interest, maybe 4%.

2. John goes down to the bank and asks to borrow $1,000. The bank loans John the $1,000 that Joe deposited, charges John a higher interest rate than they are paying Joe, and makes a profit from the difference.

The above is absolutely not what happens. In fact, the banks are precluded from loaning out Joe's money. But they don't loan out their own money either.

What actually occurs is that when the person applying for a loan signs a promissory note, the note itself is converted into money that did not exist before! The new money represents some asset that the borrower brought to the table. It could be a house, a car, or some other asset in the case of mortgages or secured loans. In the case of unsecured loans, such as credit cards, the new money represents the borrower's future labor. But in every case, the bank provided NO asset of their own for the loan.

The borrower then pays the bank the principle of the alleged loan, plus interest., sometimes exceedingly high interest. All of this happens without the bank providing you any asset with the alleged loan. It is quite literally a license to steal.

Bankers' Admission

In their publication, Two Faces of Debt, the Federal Reserve explains how modern banking transactions work. In Paragraph 4, they admit to converting loan applications into money. They also admit to an obligation to return this money to their customers upon demand, just as they would return checks or cash that has been deposited into their bank. From Two Faces of Debt:

"But a depositor's balance also rises when the depository institution extends credit, either by granting a loan to or buying securities from the depositor. In exchange for the note or security, the lending or investing institution credits the depositor's account or gives a check that can be deposited at yet another depository institution. In this case, no one else loses a deposit. The total of currency and checkable deposits, the money supply, is increased. New money has been brought into existence by expansion of depository institution credit. Such newly created funds are in addition to funds that all financial institutions provide in their operations as intermediaries between savers and users of savings."
...
"But individual depository institutions cannot expand credit and create deposits without limit. Furthermore, most of the deposits they create are soon transferred to other institutions. A deposit [of money] created through lending [from your loan application] is a debt that has to be paid on demand of the depositor [that's you], just the same as the debt arising from a customer's deposit of checks or currency in a bank."

What this means is that all bank loans that have been issued on fractional reserve banking are fraudulent. Banks can provide a service by facilitating transactions between buyers and sellers, and by acting as a fiduciary for depositors, and they can lend out their own money at interest. But they cannot lend out money that does not exist without committing fraud.

In order to reverse this trend a new monetary system is necessary. The following outline provides my proposal for how we can restore the prosperity that is the heritage of the American people, and at the same time recover some of the assets that have been legally stolen from them in the last century. It is accomplished by the language in Sections 11-12.

BASIC PRINCIPLES

1. A truly free market is the best decision maker. No person or group of persons can possibly assess all the information provided by the market, and no one can possibly have the judgment to be able to make decisions with far reaching effects.
2. Sound money is that commodity which the free market determines has widespread demand. Experience demonstrates that sound money must have intrinsic and common value.
3. Monopolies, especially government monopolies, are not indicative of a free market, and must not be dictated. Legal tender laws which prohibits competing private currencies therefore must be eliminated. Fraudulent currency, however, is prohibited.
4. Currency not backed by something of intrinsic value is fraudulent, and has inflationary tendencies.
5. Inflation fraudulently and stealthily transfers wealth from the creators of wealth (labor, industriousness, and invention) to the creators and administrators of unbacked, unsound, currency.
6. Capital gains as the result of increased price of assets due to inflation also transfers wealth from active creators to passive recipients.
7. One role of government is to enforce all valid contracts and disallow any type of fraud.
8. Competing currencies must be allowed. Currency monopoly is the worst of all monopolies.
9. When sound currency is used as money, deflation is a natural occurrence of increased industrial efficiency, and should not be discouraged.
10. Wealth is created by the accumulation of durable goods. Services, although needed and useful, do not create wealth.
11. Banks provide services, but do not create any wealth.

SOLUTION

1. Repeal all legal tender laws, allow competing currencies.
2. Recognize that all bank loans in the Federal Reserve System are fraudulent.
3. The Confederation of Free States Department of Treasury shall issue a new CFS Dollar, interest free, backed by real assets, including gold, silver, and land. CFS coins will be minted in gold, silver, nickel, and copper.
4. All Federal Reserve Notes, including those existing in banks as depositor accounts and all elements of the M3 money supply, may be traded in for an equal number of the new CFS. Dollar, up until a certain point in time.
5. Existing bank notes and mortgages of the Federal Reserve System may be traded in for 10% of their value for new CFS Dollars. Notes created by banks of the Federal Reserve System will not be deemed owed to the banks by the judiciary as they are fraudulent. The Confederation of Free States shall use the traded in mortgages to back the new currency.
6. 90% of the value of the notes traded in shall be used to create and back new CFS Dollar currency. The Treasury shall use this currency to pay previous Entitlement programs such as Social Security benefits, Medicare benefits, etc. since people made decisions during their entire lifetime on the assumption that those benefits would be there. Any excess funds can be used for infrastructure, and other government expenses. The 90% figure is used because the Federal Reserve System of fractional reserve banking requires the banks to always have a 10% reserve of deposits on hand relative to what they are allowed to lend. Therefore the new CFS currency is only eliminating the fraudulent part.
7. The mortgagors of the notes traded in to the U.S. shall only be required to pay monthly principle relative to the duration of the note. All interest payments are eliminated and absolved.
8. All income tax, social security tax, medicare tax, and payroll tax is eliminated. Future Social Security and Medicare beneficiaries will receive prorated benefits depending upon their age at the suspension of taxation.

The new monetary system, when fully implemented, will eliminate inflation. While competing private currencies will have the capability to increase the money supply as well as the new CFS currency from mortgages on new construction, this will only occur when more goods are available, since banks would be held liable for notes not backed by durable assets.

The end result will be a monetary system backed by hard assets rather than debt. The national debt will be eliminated, all forms of taxation will be eliminated, and prosperity will return to the American people, and anyone in the world who would join us.

The government can issue new money to match the increase in domestic production of new construction. No government subsidies of any industry are allowed. No government prohibitions of any industry are allowed.