Promissory Notes -- US Currency
"Money" in the United States was, many years ago, a piece of paper that promised to pay, on demand, "money" to the person. When you took that "money" to the government, or a bank, and demanded payment on the promissory note, they give you back another piece of paper, lawful currency of the United States. It was just another promissory note. The "money" is not payable in gold or anything else than another promissory note, just as good as you have faith in the government and have faith that this "money" will buy goods and services at the same "cost" as you have been used to. During inflation, you have the same piece of "money" but it buys less real goods.
The promise to "pay on demand" disappeared from our currency in 1934, so there is no promise on the piece of paper to give you anything except another (same) piece of paper.
(Karl Loren)
The fifth issue, authorized by the Legal Tender Act of 1862 and 1863, consisted only of the series 1901 $10 note.
The obligation on these notes was worded as follows:
"The United States of America will pay to the bearer ten dollars. This note is a Legal Tender for ten dollars subject to the provisions of Section 3588 R.S. This note is a Legal Tender at its face value for all debts public and private except duties on imports and interest on the public debt."
Small size United States Notes were issued in series 1928, 1953, 1963, and 1966 in denominations of $1, $2, $5 and $100, but not all denominations were issued for all series. The obligation carried on series starting in 1928 read as follows:
"This note is legal tender at its face value for all debts public and private except duties on imports and interest on the public debt."
The wording was changed again by an act of Congress on May 12, 1933 to read:
"This note is legal tender at its face value for all debts public and private"
The wording was changed still again with the series of 1963 to read:
"This note is legal tender for all debts, public and private"
The "Will pay to bearer on demand" which was present in US dollars earlier vanished from it in 1934 and was replaced by "This note is a legal tender for all debts..." !!! (source)
The next image, an example in place before this new language in 1934, said that the currency was a piece of paper, that promised to pay the bearer on damand:
A 1918 US dollar note.
In other words, the dollar note is just a legal tender, meaning all US banks will accept it, but other than that, nothing is promised by the US Federal Reserves about its value. In fact Federal Reserve is NOT Federal i.e it is NOT owned by the US federal government, nor does it have any independent reserves. It is just a group of private banks working with the US treasury department. (source)
The money bag is small and doesn't have anything of value in it.
Before the American Civil War, citizens generally conducted trade in the time-honored method of barter or exchange for metal coins. Only when the war left the U.S. bereft of metals did it print and distribute large amounts of paper currency as a way to pay soldiers, purchase supplies and create a standard medium of exchange for citizens.
The U.S. first issued paper money during the Revolutionary War. These square, printed notes were rarely worth their face value and became so distrusted by the citizenry that the practice of printing money was all but abandoned. States were prohibited by the constitution from issuing currency, but virtually anyone else could.
Banks, utilities, and businesses printed and distributed their own currency. The value of these notes was backed up solely by the reputation of the issuing entity. Since most notes could only be exchanged at the issuing establishment, a fistful of local dollars was useless if you traveled 10 miles from home. The value of these notes varied widely-from printed face value to zero. The public largely distrusted paper money, and traded their "faith paper" for metal coin whenever they could.
Within a few days of the outbreak of the Civil War, rampant inflation meant gold, silver and copper coins were worth more than face value. Metal coinage all but disappeared as they were hoarded. Paper money was reluctantly accepted by a distrusting public, as there was no other alternative. This led to a proliferation of paper money-both official and questionable.
Four basic types of currency notes were widely circulated in the Union during the Civil War era: Private Issue, Shinplasters, Federal Issue and Stamps & Fractional Notes.
Railroads, roads, utilities, manufacturers, associations, and banks issued currency notes. It was often a very confusing undertaking for a consumer to establish their value. Unfortunate employees could be paid in company scrip, which was redeemable only at the company store-a handy way for unscrupulous businesses to build on profits.
The most universally accepted paper money were bank notes. Bank notes were promissory notes--more like a check of today. These notes could be exchanged for Federal issue notes, and as such had some value. Banking was not well regulated, and new banks would start up then become "broken" with frequency. Broken Bank currency was valueless--the consumer had to be wary.
Generally, the better the artwork on the note the more it was trusted. Fine examples of the engravers art can be found on private and bank notes. Favorite themes were allegorical or mythological scenes, scenes of industry, and scenes of the discovery and exploration of America. "Cheesecake" was often featured as bare breasted Liberty or unclad goddesses stalked across the note.
Enterprising businesses adopted the practice of issuing a promissory note called a shinplaster in lieu of unavailable coins. These notes came in a variety of sizes and were redeemable for merchandise only at the merchant of issue. Customer pressure led businesses to promise an exchange of shinplasters for bank notes if the customer could save up one dollars worth. This promise was printed prominently on the face of shinplasters to inspire trust and acceptance.
Regimental sutlers generally gave change as shinplasters. Sutlers also printed special notes "for the accommodation of the officers", often featuring the image of the officer, thus appealing to their vanity as well as their graft. These sutler notes were purchased in bulk at discount by the regiment and distributed to the officers, who could exchange them for company and personal supplies. They might also hand them out to opportunistic lickspittles in the ranks as reward for special merit.
The lack of coin for making change was partially alleviated by using postage stamps. Stamps had a constant value and were official issue of a sort. They could be more widely exchanged than local shinplasters. Stamps, however, often became no more than a sticky mess in the pocket, and the Post Office was hard pressed to meet the demand for stamps due to this practice.
Fractional Postage Currency in a larger, more convenient size without glue was first issued in 1862. Originally these notes were issued on perforated sheets so that the required amount needed was torn off. These were popularly accepted, and as demand exceeded the perforation machinery, the notes were issued on plain sheets and the consumer cut off as many as were needed for a transaction.
At the beginning of the war Demand notes and Interest Bearing Notes were available. Most pre-war issues were large denominations used for exchange of funds between banks. The US Notes of Series 1862 and 1863 represent the first generally accepted and circulated currency. Federal notes were printed by private companies (who also printed notes for the Confederate Government).
US notes were known as "greenbacks" due to the intricate design, in green, printed on the back of notes to discourage counterfeiting. It was not until 1863 that the US government halted the practice of private issue, and US currency began to be accepted as the standard of exchange.
By the end of the Civil War the US economy remained relatively strong and Federal issue was THE standard of exchange for U.S. citizens. The stability of paper currency and its convenience of use increased popular acceptance and "greenbacks are still the medium of exchange used today.
For more information, the Federal Reserve Bank's On-Line Exhibit of American Currency offers high quality images of Civil War currency and interesting miscellany on the economy.
_____________________________
Example of Promissory Note Payable to the Federal Reserve Bank
The payor of this note is: Payor:
Asworth Corporation
200 West Madison
Chicago, Illinois 60606
Attention J. Kevin Poorman
Data Updated as of October 18, 2005
Note: These FAQ’s were prepared to provide helpful information to members of the settlement
class. However, please note that in the event of any inadvertent discrepancy between these FAQ’s and the terms of
the settlement agreement, the settlement agreement will govern.
What was the lawsuit of Gasche v. Asworth Corp.?
Gasche v. Asworth Corp. was a class-action lawsuit that was filed by five
former Braniff pilots (Charles Jackson Gasche, Jr., Dennis J. Harris, Gene L.
Peterson, William A. Schoknecht and John J. Skiba) against Asworth Corporation.
Asworth Corporation is the successor corporation to Braniff Airways.
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What was the lawsuit about?
After Braniff entered bankruptcy in 1982, it terminated its two pilot pension
plans, the A Plan and the B Plan. It used the remaining assets of the two
terminated plans to buy two group annuity contracts from Prudential Insurance
Company. The two group annuity contracts provide retirement annuities to the
former plan participants. Asworth, Braniff’s successor, is the holder of the two
group annuity contracts.
When the two group annuity contracts were purchased, Prudential was a
mutual company, meaning it was owned by its policyholders and contractholders.
In 2001, Prudential converted to a publicly-traded, shareholder-owned company,
and issued Prudential shares to its policyholders and contractholders. Asworth
received several million dollars worth of Prudential shares.
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The plaintiffs in the lawsuit claimed that Asworth should be required to turn
over the shares to the former Braniff pilots and their survivors who are annuitants
under the two group annuity contracts, because the two group annuity contracts
were purchased with the assets of the terminated pilot pension plans.
Asworth denied that it had any legal obligation to turn over the shares.
Has the lawsuit been resolved?
Yes, the lawsuit is now over. The plaintiffs and Asworth entered into a
settlement agreement which the court approved.
What are the terms of the settlement agreement?
The settlement agreement required Asworth to transferred 60% of the shares
it received from Prudential (plus 60% of the cash dividends that it had earned on
those shares, plus 60% of the interest earned on those dividends) to a settlement
fund for the members of the class. In exchange, members of the class gave up the
right to sue Asworth.
After attorneys fees and costs of administration are deducted, the settlement
fund will have approximately $8.3 million available for distribution to the
members of the class. Source
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basis in accordance with GAAP consistently applied.
Karl Loren Predictions on US Supreme Court Decisions
As long as the Democrats control the process of nominating Justices to the US Supreme Court, we will have chaos in our courts and an even faster decline in public morality and economic prosperity.
That is a very short prediction, but well presented in the article below.
Soon I will also write about exactly WHY these liberals do what they do. It has not been covered in any analysis of their purposes that I have seen in popular media.
Source: Wall Street Journal, November 13, 2008
Yesterday morning the nine Justices of the Supreme Court of the United States heard oral arguments over whether a city in Utah is obligated, under the U.S. Constitution, to erect a monument in its park celebrating the Seven Aphorisms, the tenets of a local religion founded in 1975 by a former supply-company manager named Claude "Corky" Nowell, later known as Corky Ra, who said he was visited by "advanced living beings." He called the religion that resulted Summum.
For example, Aphorism II, the Principle of Correspondence, holds: "As above, so below; as below, so above." Bear in mind that Pleasant Grove City, Utah, for some 30 years has had a monument in the city park to the Ten Commandments, donated by the Fraternal Order of Eagles. Mr. Ra said Moses came down from the mountain with two sets of tablets, decided the people weren't ready for the Seven Aphorisms and gave them the "more readily understood" Ten Commandments.
Technically, this is not an establishment-of-religion case; the city's monument could as easily be to the Boy Scouts' motto. Pleasant Grove City told Summum it had no obligation to erect a monument for any group that desired one.
In 2007, the federal appeals court for the Tenth Circuit ruled in favor of Summum, giving the religion permission to put up its Seven Aphorisms monument in Pioneer Park. The Supreme Court will decide whether the Summums of America deserve their own patch of the public green.
Laughable though it looks, Pleasant Grove City v. Summum is a textbook example of tensions that have pulled our courts between noble readings of the Constitution -- in this case, the First Amendment's speech protections -- and what the average person might call the common-sense requirements of running a civil society.
The common-sense argument against Summum's claim, which the U.S. Solicitor General made to the Supreme Court, was that it would cause a clutter of public monuments. If a city let private donors contribute a memorial to local boys who died in the Iraq war, would it have to accept another group's monument to pacifism? As Chief Justice Roberts asked yesterday, "Do we have to put any president who wants to be on Mt. Rushmore?"(As of now, perhaps.)
New York City's friend-of-the-court brief noted that Central Park's 52 monuments celebrate Alice in Wonderland (my favorite), the Pilgrims and Hans Christian Andersen. So why not, under a "right of equal access," a monument to the Simpsons?
The path to sweet reason, though, is itself not uncluttered in this case.
Pleasant Grove City's refusal is rooted in what is called "government speech doctrine." While the First Amendment won't let government infringe a citizen's private speech, its own speech has no limits -- none. Government can say whatever it wishes. For example, the government had no obligation to offer equal-time rejoinders to Nancy Reagan's "Just Say No." As an earlier court noted: "Simply because the government opens its mouth to speak does not give every outside group . . . a First Amendment right to play ventriloquist."
Not so fast, say a host of religious- and free-speech rights groups supporting Summum. It would be dangerous to give cities carte blanche power to decide which group's permanent monument to a particular cause or idea gets government approval, and which does not.
In July, former Justice Sandra Day O'Connor, temporarily filling in on the Fourth Circuit, ruled that the Fredericksburg, Va., city council, under the government-speech doctrine, could forbid a council member from invoking Jesus in a session-opening prayer. The Rutherford Institute argues this lets the government silence anything it doesn't like.
This is the sort of case that cries out for the judicial wisdom of Solomon, long dead in the U.S. Indeed it was the departure from common-sense wisdom that pitched the country into endless legal thickets, most notably the ruined learning environments in public schools.
Going back 40 years, a series of Supreme Court decisions broadened constitutional protections for high-school students. Conservative legal groups today support such protections lest schools ban, say, prayer groups.
One understands those concerns. What happened, though, is that many school principals concluded that the Court had killed discretion in disciplinary matters. Administrators pulled back, and to this day in many urban schools, virtual chaos runs rampant through the halls. Terrified and appalled parents sought refuge in charter schools or private schools.
A win here for Summum and its Seven Aphorisms likely would cause many cities to wash their hands of the problem by clearing their parks of all monuments, a desolate result.
The Supreme Court should recognize the need to let civic institutions function -- whether schools or city hall. No public power deserves carte blanche. Give them latitude to write clear rules to operate parks, public spaces and public schools. If Summum doesn't like it, they can buy a piece of Utah and open the Park of the Seven Aphorisms. I might even make a visit.
![[Wonder Land]](../3/images/ED-AI538_wl1113_DV_20081112160028.jpg)
AP