FROM The National Center for Constitutional Studies:
The whole purpose of establishing the Federal Reserve System was to prevent depressions, stabilize the currency, and protect the savings and checking deposits of the people in the custody of the banks.
However, there are three things that the Founding Fathers identified as outright enemies to any sound money system, and the Federal Reserve contains all three of them.
The first thing they said the nation should avoid is turning over to a group of private bankers the right to print the official currency of the nation. They said this right is inherent in the people and belongs to the people’s government. Whenever this right has been delegated to private bankers, they have always used it to abuse the people and gradually devour the wealth of the nation. It will be recalled that Jefferson wrote:
If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered.
Abraham Lincoln also warned about possible abuses by private bankers. After the National Bank Act was passed in 1863, he wrote:
I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations [of banking] have been enthroned, an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people, until the wealth is aggregated in a few hands and the Republic destroyed.
The second deception in the whole Federal Reserve System is the fact that the private banks which own the stock in the Federal Reserve System charge the United States interest for borrowing the country’s own currency!
The Federal Reserve scheme provides not only that all U.S. currency shall be printed as Federal Reserve notes, but that if the government wants to use these notes it must give the Federal Reserve IOUs in the form of government bonds on which interest will be paid until the bonds have been redeemed.
The question immediately arises, “Well, what did the banks loan to the government in exchange for these bonds?” The answer is, “Nothing, absolutely nothing.” The banks paid for the printing of their Federal Reserve notes and gave them to us, but they are not redeemable in gold, silver, or anything else of value. They are just paper, backed by virtually nothing. The question next arises, “Then why are they able to charge us interest when all they are doing is printing our own currency?”
The answer is that in 1913 the Congress gave the Federal Reserve the legal “right” to print our money, and that right is “as good as gold.” Therefore, if we want to use the Fed’s money, we have to borrow it and give them federal IOUs for the amount obtained. And, of course, each IOU (government bond) is something on which interest must be paid. Read More »