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EndingtheFederalReserveFromtheBottomUp:

Re-introducingCompetitiveCurrencybyStateAdherenceto ArticleI,Section10

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WilliamGreene,Ph.D.VerityInstitute/MiamiChristianUniversityPresentedattheAustrianScholarsConferenceMisesInstitute,AuburnALMarch13,2010

1Sinceitsinception,theU.S.FederalReserve’smonetarypolicieshaveledtoadeclineofover95%inthepurchasingpoweroftheU.S.dollar.

Asaresult,therehavebeenseveralattemptstocurtailoreliminatetheFederalReserve’spowers(e.g.,theeffortsofRep.LouisT.McFaddeninthe1930s;

theeffortsofRep.WrightPatmaninthe1970s;

theeffortsofRep.HenryGonzalezinthe1990s;

andtheeffortsofRep.RonPaulsincethe1990s

).However,nonehaveprovensuccessfultodate,duemainlytotheconstraintsofstrongpoliticaloppositionatthenationallevel.Incontrasttothese“top‐down”attemptsatthenationallevel,thispaperproposesanalternativeapproachtoendingtheFederalReserve’smonopolyonmoney:the“ConstitutionalTenderAct,”abilltemplatethatcanbeintroducedineverystatelegislatureinthenation,returningeachofthemtoadherencetotheU.S.Constitution's“legaltender”provisionsofArticleI,Section10.



Calculatedatusinflationcalculator.comonMarch1,2010,basedontheConsumerPriceIndexprovidedbytheU.S.BureauofLaborStatistics.CPIdatawaslastupdatedbyBLSonFebruary19,2010,andcoversuptoJanuary2010.

McFaddenintroducedamotionforimpeachmentoftheFederalReserve’sBoardofGovernorsonMay23,1933(HouseResolutionNo.158).

PatmanintroducedseveralbillscallingforaGeneralAccountingOfficeauditoftheFederalReserveBoard,theFederalAdvisoryCouncil,theFederalOpenMarketCommitteeandFederalReservebanksandtheirbranchesinthe1970s,includingHR7590(1975),whichgarnered21additionalco‐sponsors.However,thecompanionbillintheSenate(S.2509),introducedbySen.WilliamProxmireofWisconsin,hadnoco‐sponsorsatall.

InJuly1991,GonzalezaskedtheFederalReserveBoardtosubmittoacongressionalauditofitsdiscount‐windowlendingoperations,butwasrefused;in1993,heagainvoicedhissupportforlegislationthatwouldaudittheFederalReserveSystem(aswellasmakeitsmeetingstelevisedandopentothepublic,aswellasrequiringthePresidenttoappointitstwelvemembers).

Forexample,hislatestbills,H.R.833(toendtheFederalReserve)andH.R.1207(toaudittheFederalReserve).

TherearevariousversionsofConstitutionalTenderActsbeingintroducedintheseveralStates.ThispaperfocusesonHB430inGeorgia.Seehttp://www.ConstitutionalTender.com/.

2Thisapproachwouldhaveagreaterlikelihoodofsuccessforanumberofreasons.First,itisdecentralized:ratherthanfacingconcertedpoliticaloppositionatasingleFederallevel,itattackstheissueattheStatelevel,wherestrategiesandtacticscanbeadaptedtothetypesandamountofpoliticaloppositiontheyencounter.Second,itisdiffused:itcanbeattemptedinanynumberofStates,whichcancausetheoppositiontospreaditsresourcesmuchmorethinlythanwouldbenecessaryattheFederallevel.Finally,itislegallysound:itreliesontheU.S.Constitution’snegativemandateinArticleI,Section10,that“NoStateshall...makeanyThingbutgoldandsilverCoinaTenderinPaymentofDebts.”

Therefore,incontrastto“top‐down”attemptsto“endtheFed,”a“bottom‐up”approachusing“constitutionaltender”lawswillfindgreatersuccess.Overthecourseoftime,whenevertherehavebeenattemptstoend,oreventomaintaingreateroversight,oftheFederalReserve,thoseeffortshavebeenstronglyrebuffed.OnJune10,1932,forexample,theformerChairmanoftheU.S.HouseCommitteeonBankingandCurrency,Rep.LouisT.McFaddenofPennsylvania,gaveanextendedspeechontheFederalReserveSystem,callingit“oneofthemostcorruptinstitutionstheworldhaseverknown,”that“hasimpoverishedandruinedthepeopleoftheUnitedStates;hasbankrupteditself,andhaspracticallybankruptedourGovernment.”

Hecalledagainfor“anauditoftheFederalReserveBoardandtheFederalreservebanks,”

butwasridiculedand



CongressionalRecord,

June10,1932,



pp.12595



Ibid.,

p.12602.ThepreviousDecember,McFaddenhadintroducedaresolution“askingforanexaminationandanauditoftheFederalReserveBoardandalltheFederalreservebanksandallrelatedmatters.”ThefollowingMay,McFadden