in Minnesota," The
Libertarian Forum, August 1, 1969.
prevails that to favor gold or silver money is to be a mossback
reactionary; nothing could be further from the truth. For gold
(as well as silver) is the Peoples Money; it is a valuable
commodity that has developed, on the free market, as the monetary
means of exchange. Gold has been replaced, at the dictate of the
State, by fiat paper by pieces of paper issued and imprinted
by the government. Gold cannot be produced very easily; it must
be dug laboriously out of the ground. But if paper tickets are
to be money, and the State is to have the sole power to issue
these virtually costless tickets, then we are all at the mercy
of this gang of legalized, sovereign counterfeiters. Yet this
is the accepted monetary system of today.
is this system of the States having absolute control of
our money been accepted by Establishment economists; it has been
just as warmly endorsed by the powerful Chicago branch
of free-market economists. Twenty years ago, almost all conservative,
or free-market oriented, economists, favored a return to the gold
standard and the elimination of fiat paper. But now the gold standard
economists have almost all died out and been replaced by the glib,
technically expert Chicagoites, to a man scoffers at gold and
simple-minded endorsers of fiat paper. The gold standard has died
from desertion of its cause by the right-wing and its economists.
Numerous right-wingers who should know better yet continue to
fawn upon Milton Friedman and his Chicagoites. Why? Presumably,
because they have power and influence, and one never finds conservatives
lacking these days when it comes to toadying the power.
In the midst
of this monetary miasma, there has now come a voice from out of
the past, from the Old Right, and it is one of the most heartwarming
events of the year.
ago, Jerome Daly, a citizen of Savage, Minnesota, a suburban town
just south of Minneapolis, refused to make any further payments
on the mortgage which he had owed to his bank. At his jury trial
(First National Bank of Montgomery vs. Jerome Daly) in December,
1968 before Justice of the Peace Martin V. Mahoney, a farmer and
carpenter by trade, at which the bank tried to repossess the property,
Mr. Daly argued that he owed the bank nothing. Why? Because, the
bank, in lending him money, had loaned him not real money but
bank credit which the bank had created out of thin air. Not being
genuine money, the credit was not a valid consideration, and therefore
the contract was null and void. Daly argued that he did not owe
the bank anything.
this seemingly preposterous argument, Jerome Daly was being a
far better economist and libertarian than anyone knew.
For fractional reserve banking now a system at the behest
and direction of the Federal Reserve Banks is, like fiat
paper, legalized counterfeiting, the creation of claims which
are invalid and impossible to redeem. Furthermore, Daly contended
that this kind of creation of money by banks is illegal and unconstitutional.
remarkable than Mr. Dalys thesis is that the jury unanimously
held for him, and declared the mortgage null and void; and Justice
Mahoneys supporting decision, delivered last Dec. 9, is
a gem of radical assertion of the rights of the people and a thoroughgoing
assault on the unwisdom and fraudulence and unconstitutionality
of fractional reserve banking.
the First National Bank of Montgomery, Minnesota proceeded in
routine fashion to file an appeal with Justice Mahoney for a higher
court. But the catch is that in order to file an appeal, the plaintiff
has to pay a fee of two dollars. Justice Mahoney, O happy day,
refused to accept the appeal on January 22 because Federal Reserve
Notes, which of course constituted the fee, are not lawful money.
Only gold and silver coin, affirmed the judge, can be made legal
tender, and therefore the fee for appeal had not been paid. Justice
Mahoney followed this up with supporting memoranda on January
30 and February 5, which are heartwarming blends of sound economics
and strict legal constructionism, and which also declared the
unconstitutionality of the Federal Reserve Act and the National
Banking Act, the capstones of our current interventionist and
statist monetary system.
matter rests at the moment; but where does it rest? We have it
on the authority of Justice Mahoney that debts to fractional reserve
banks (i.e. the current banking system) are null and void, that
their very nature is fraudulent and illegal (in short, that the
banks belong to the people!), that Federal Reserve Notes and fiat
paper are unlawful and unconstitutional.
there been a more radical attack upon the whole nature of our
fraudulent and statist banking system.
with these embattled Minnesotans, their radicalism is not only
rhetoric; they are prepared to back it up with still further concrete
acts. Jerome Daly has already announced that if any higher court
of the United States, perpetrates a fraud upon the People
by defying the Constitutional Law of the United States (Justice)
Mahoney has resolved that he will convene another Jury in Credit
River Township (where Savage is located) to try the issue of the
Fraud on the part of any State or Federal Judge. Daly adds,
moreover, that the Constable and the Citizens Militia of
Credit River Township are prepared to use their power to back
up the jurys decision and keep Mr. Daly in possession of
his land. The people of Savage, Minnesota, in short, are prepared
to fight, to resist the decrees of the state and federal governments,
to use their power on the local level to resist the State.
in the libertarian movement and they are, unfortunately,
legion have charged that in recent years, I have simply become
a leftist. From the literature of Mr. Daly and his
supporters, it is quite clear that this is a heroic band of Old
Rightists, of people who have not been nurtured on National Review
or the lesser organs of current Right-wing opinion. I am equally
and eagerly as willing to hail their libertarian action for the
people and against the State, as I am such leftist
actions as Peoples Park.
as Karl Hess indicates in this issue of The Libertarian Forum,
is action; action now vis à vis the State. Those
who side with the liberties of the people against the government
are our friends and allies; those who side with the State against
the people are our enemies. It is as simple as all that. The problem,
as far as the Right goes, is that in recent years there have been
zero actions by the Right against the State; on the contrary,
the Right has almost invariably been on the side of the State:
against the demonstrators at Chicago, against Peoples
Park, against the Student Revolution, against the
Black Panthers, etc. If the test is, as I hold it to be, action,
and which side are you on, the people or the State,
and not the closeness of agreement on the fifth Lemma of
the third Syllogism deduced from whether or not A is A, then the
Right-wing in recent years and this means the entire right,
from Buckleyites and Randians straight through to phony anarchists
(or anarcho-rightists) has been a dismal failure.
Indeed, it has ranged itself on the side of the Enemy. Thus, in
the matter of tax resistance, ten or fifteen years ago the banner
of tax refusal was carried by such rightists as Vivien
Kellems; now the self-same flag is carried by such leftists
as Joan Baez.
the libertarians of the Right-wing are at all interested
in my approbation, there is a simple way to attain it: to acquire
one-hundredth of the fortitude and the revolutionary spirit of
the New Left resisters against the State; to return to the tradition
of Sam Adams and Tom Paine, of Garrison and John Brown, and, in
recent years, of Frank Chodorov and Vivien Kellems. Let them return
to that great tradition or let them, as rapidly as possible, sink
into the well-deserved dustbin of history.
In the meanwhile,
all hail to the heroic rebels of Savage, Minnesota, to the perceptive
and courageous Jerome Daly and Justice Martin Mahoney.