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The modern world of human affairs would grind to an immediate halt if the fundamental truths and underlying facts in any matter or transaction could not be established or asserted—a bill, an oath, a ledgering or bookkeeping, a statement of facts, are the life blood of the legal and commercial world. These and more are all examples of the Affidavit. The affidavit, when properly used, especially when leveraged by your standing as a secured party, is the most powerful instrument available in protecting, defending, and asserting your sovereignty. For this reason, it is incumbent upon you to become practiced in its use and in your ability to recognize its many forms.
AFFIDAVITS BACK ALL ADHESION CONTRACTS
f you are unable to recognize when affidavits are being solicited, you may be the unwitting dupe of another parties! attempt to create a binding contract. "y the signature of your own hand, or before you became of legal age, the signature of your parent or other authority such as a physician, have been signing you into bondage since you were born. #ertificate of $ive "irth, application for a driver!s license, and %& form '()(, a voter*s registration, and every single document that the system desires others to be bound or obligated by, is, or re+uires, an affidavit. ,hen signed, they represent an oath, or #ommercial Affidavit, executed under penalty of per-ury, .true, #orrect, and complete.. Affidavits may also occur in a court setting where testimony /oral0 is stated in -udicial terms by being sworn to be .the truth, the whole truth, and nothing but the truth, so help me 1od.. n chapter 2 we will explore some strategies that you can use to avoid this solicitation to contract.
MAXIMS OF THE AFFIDAVIT
"efore we get into the structure, form, and re+uirements of the formal affidavit, with examples, let!s develop a deeper comprehension and understanding of the purpose, and important maxims that govern their use. '. First and foremost, in commerce, truth is sovereign—and the &overeign tells only the truth. Your word is your bond. f truth were not sovereign in commerce, i.e., all human action and inter3relations, there would be no basis for anything. 4o basis for law and order, no accountability, there would be no standards, no capacity to resolve anything. t would mean .anything goes., .each man for himself, and .nothing matters.. That!s worse than the law of the -ungle. .To lie is to go against the mind.. 5riental proverb6 .5f all that is good, sublimity is supreme..
4o one is a mind reader. 1overnments allegedly exist to be substitutes for the dueling field and the battlefield for disputes. 8ou have to put your position out there—you have to state what the issue is in order to have something to talk about and resolve. or payment. There is nothing left to resolve. An un-rebutted affidavit stands as truth in commerce. 2. it must first be expressed. #laims made in your affidavit if not rebutted. He who leaves the battlefield first. is the one who is adversely affected by it. reasonably. is that #ommercial $aw is non3-udicial. pre3-udicial /not pre-udice0. #onflicts of affidavits of truth are resolved peaceably. because it establishes the basis for keeping your matter in the private. or willing to swear an oath on his commercial liability for the truth of his statements and legitimacy of his actions. instead of going out and marching ten paces and turning to kill or in-ure. $egal 9axim6 . 1overnments allegedly exist to resolve disputes. Any proceeding in a court. $egal 9axim6 .truth in commerce. COMMERCIAL LAW IS PRE-JUDICIAL Another important concept to understand as a sovereign. occasions it. t is the only . &o people can take their disputes into court and have them all opened up and resolved. 4o court or -udge can overturn or disregard or abrogate somebody!s affidavit. $egal 9axim6 . looses by default. The only one who has any capacity or right or responsibility or knowledge to rebut your affidavit.:e who does not repel a wrong when he can. tribunal. ). as regards the matter at hand. emerge as the truth of the matter. or duel. in fact.. of commercial affidavits wherein the points remaining un3rebutted in the end stand as truth and matters to which the -udgment of the law is applied. take a stand. admits. conflicts and truth. if you should go before the court. or arbitration forum consists of a contest..:e who fails to assert his rights has none. A lien or claim can be satisfied only though a point by point rebuttal of an affidavit. <. put at risk.. . has no basis to assert claims or charges and forfeits all credibility and right. resolution by -ury.7.:e who does not deny. it!s the affected parties responsibility and obligation to issue their own affidavit and to speak on their own behalf. An un-rebutted affidavit becomes the judgment in commerce.. =ust as no one can know what your truth is. 5ne who is not damaged. A person must put himself on the line and assume a position. This means that an affidavit which is un3rebutted point for point stands as . n commerce for any matter to be resolved. because it hasn!t been rebutted and has left the battlefield. instead of by violence.
4ow to get an idea of all the fun that you!ve been missing out on by hot knowing about affidavits. and collection. and for what reason. this is where things get very interesting. which is in units of three@ three days. :owever. The Assessment aspect. All that courts are ultimately ad-udicating and making rules about. %emember the assessment phaseC T:?%? & 45 FA$ B A&&?&&9?4T. Bid you understand what you -ust readC The %& is 45T %?1 &T?%?B T5 B5 "D& 4?&& 5% E?%F5%9 #599?%# A$ 9ATT?%& 4 A48 &TAT?.foundation by which government or any court system can possibly exist or function.?%6 because you give it to them without re+uesting a proof of claim from them or even if they were . t!s not possible. &o how do they get all the money they getC A4&. nobody in the %& is going to take commercial liability for exposing themselves to a lie. The collection aspect is based in nternational commerce that has existed for more than <((( years. and have a chance for people to come back at them with a True "ill in #ommerce. This is why you get A( day letters from the %&.the truth. is about determining who owes who. and never will. The %& has. correct and complete and not meant to deceive. essentially . what. when. a true accounting. a Trite ill in #ommerce. and never can. the %& creates the most activity of #ommercial #ollection in the entire world. to give you offers based on . the foundational instrument with your signature on it. and never could. 4ow. THE POWER OF THE AFFIDAVIT 4ow. ?F?% issue a valid assessment lien or levy.arbitrary. This means they would have to set forth the contract. concise3without a -ury0. how much. in commerce is. t is based on =ewish $aw and the =ewish grace period. There would have to be sworn Affidavits by someone that this is a true. the whole truth and nothing but the truth. and a list of all the wonderful . in which you are in default. three weeks and three months. although the %& is not registered to do business in any state. commercial processes are non3-udicial. which. are the fundamental precepts of #ommercial $aw. n commerce there are two phases@ assessment. The collection process is relatively valid. %emember. here is an example of how to leverage your knowledge of #ommercial $aw and the power of the affidavit. estimations.licensed. in order for them to do that there would have to be paperwork. First of all. not even knowing that you could A&> F5% 54?. They are summary processes /short. why.
you owe us money because you damaged me. it is a complete fraud. nor use them. don!t youC They must come back with an affidavit which rebuts your affidavit point for point. These powers3that3be have riot divulged the rules of the game. and bankrupt it and make chattel property out of most of us is because they know and use the rules of #ommercial $aw and we don!t. This is the beginning.hat #A4 you do about itC 85D #A4 &&D? A #599?%# A$ AFF BAF T. for which you owe them. we don!t know what the game is. no one has ever received goods or service from the %& for which they owe money. but that!s what it is.. t is my best and considered -udgment that no such paperwork or affidavit exists. The assessment phase in the %& is non3existent. personally don!t know of anyone that has damaged anybody in the %& that gives them the right to come after us and say that . in your affidavit. . . ... 5ne reason why the super rich bankers and the super rich people in the world have been able to literally steal the world and sub-ugate it. remedies and recourses. and plunder it.e don!t know how to invoke our rights. .&hould you consider my position in error . At the end of this document. 4o one is going to explain to you what and how all this is happening to you. They must be implicit and then you state. "ecause we don!t know the rules. This closes the circle on the process.. and this is the end. which means they have to provide the paper . 8ou know what they have to do now. and the result of all our exploring will be to arrive at the place at which we began and know it for the first time. . ?liot wrote a wonderful little phrase in one of his poems6 .. This is why these rules of #ommercial $aw come to our rescue.e shall not cease from exploration.. They can and do get away with complete fraud and steal everything because no one knows what to do about it. 8ou can assert.. have never been presented with any sworn affidavits that would provide validity to your assessment. &.goods and services for which you owe them money@ or a statement of all the damages that you have caused them. SOLUTION . T. 8ou don!t have to title it that. you put demands on them. To my knowledge.e get lost in doing everything under the sun except the one and only thing that is the solution.e don!t know what to do. That is never going to happen.
and may also contain statements based on the observations of others if you indicate this by adding that the information is based on your !information and belief. . taken before a person having authority to administer such oath or affirmation. This is more powerful because you have completely drawn them into your power. made voluntarily. 4ow they have two choices. . Aff !"# t of !efe%&e. affidavit filed with motion for summary -udgment. the true bill in commerce. Aff !"# t. The affidavit usually contains statements that you can attest to. or . D4B?% E?4A$T8 5F E?%=D%8. The person making the statement is technically known as the affiant or deponent.g. $. This approach puts you out of the business of having to !prove that your not a taxpayer! by offering them the opportunity to admit this themselves.. an affidavit is a statement of facts that chronicle the events of a particular commercial or legal matter.Affidavits of Facts. 4o agent or attorney of a fictitious entity can sign an affidavit for the corporation. Note: An even more streamlined and sophisticated approach in dealing with the %& is to send them a package with a letter and an %& power of attorney re+uesting a determination of your tax status.work with the real assessment. An affidavit stating that the defendant has a good defense to the plaintiff*s action on the merits@ e. or give you a determination.Affidavits of Truth. :ere are some formal definitions and types of affidavits and the definition for declaration since this is used in the definition for affidavit from "lacks $aw <th ?dition6 1.hich do you think they will chooseC DEFINITIONS n its formal expression. sign the papers you have given them permission to prepare on your behalf. and sworn to or affirmed before a person legally authorized to administer an oath or affirmation such as a notary. 8ou may sometimes see affidavits titled and referred to as . 5r they can fill out their own death warrant. and confirmed by the oath or affirmation of the party making it. They cannot and never will provide you with this. reduced to writing. This means your affidavit stands as truth in commerce. based on your experience. This is informal and redundant—all affidavits are about truth and facts. A written or printed declaration or statement of facts. the real sworn affidavits that would make their assessment or claims against you valid. :ow can they swear as fact that the corporation has done or not done A48T: 41C They do not have the standing.
or other document or process.count. and must show a distinct cause of action. .bill. if service is made by a person other than a Dnited &tates 9arshall or his deputy. the first of the pleadings on the part of the plaintiff in an action at law. substituted service of process may be had on absent defendants if it appears by affidavit of plaintiff s attorney. in civil law. f you write an affidavit in a private matter which then ends up in the courts. cause of action.. court brief format and letter. A sworn statement that affiant has given proper notice of hearing to other parties to action. 1. called . conclusion. and its formal parts follow each other in this general order6 Title. or other person having knowledge of the facts. statements of fact. in ecclesiastical and admiralty law. notice. 0. Aff !"# t of -e* t&. Aff !"# t of &e*# /e.counts. summons. use the letter format. clearly and certainly expressed. 5. of an indebtedness from the defendant to the plaintiff. you could rewrite it in legal format@ however.. &ee affidavit of defense. 5n the facing page is an example of the court brief form of a generic affidavit. be served within the state. venue. An affidavit intended to certify the service of a writ. ELEMENTS 6 FORMATS There are two forms of the affidavit. the . An affidavit re+uired in many cases before the defendant in a civil action may be arrested. answers to the . introduction. date and signature block. n federal courts.petition. "y court rule in certain states!. . . Aff !"# t of %() *+. counts.complaint! is used in the federal courts and in all states that have adopted %ules of #ivil Erocedure. he shall make affidavit thereof. in code and rule pleading.complaint. The declaration at common law. A common3law pleading. The re+uired elements in order are the Title. The court brief format re+uires a case number and must be in the standard legal form. The term . in real actions. 8ou can use it as a template for creating your own. 5ne setting forth that the defendant has a meritorious defense /substantial and not technical0 and stating the facts constituting the same. . Aff !"# t of %ot /e. &uch an affidavit must contain a statement. the .libel. De/3"*"t o%. t commonly comprises several sections or divisions. commencement. that defendant cannot after diligent in+uiry. by someone ac+uainted with the fact. Aff !"# t to 2o3! to 4" 3.. Fenue. and the notary block for notary information and seal. it is not necessary since you can submit the affidavit in letter form as an exhibit.'. notice. and the . the . in e+uity. being a formal and methodical specification of the facts and circumstances constituting his cause or action. f your matter is private.
IIIIIIIIIIIIIIIIIIIIIIII &eal@ 4otary Eublic in and for said &tate 9y #ommission expires@ IIIIII 45T?@ f you are going to use an affidavit in support of a critical point that others have experience on.< /Hth #ir. delivered with all the legal force possible. depose and say and declare by my signature that the following facts are true to the best of my knowledge and belief. The weight of '( or 7( affidavits as compared with -ust a few.B. 7((<. no more than /affidavits0 are necessary to make the prima facie case. is hard to overlook or dismiss.5%4 before me this IIIday of IIIIIIIIIIII.The following Affidavit is "are &le format6 AFF BAF T 5%?154 &TAT? 0 &cilicet.7nd. #t. 9arch 77. we suggest that you ask those individuals come forward and provide their own affidavit in support of your case. 7'<A@ &.. <2G F. 8our name J Affiant ACKNOWLED7EMENT &D"#% "?B T5 A4B &.&. T:AT. 'AG7 That .. thatIIIIIIIIIIIIIII. $. 2( D. IIIIIIIIIIIII. Bone this IIIday of February 7(() A. a 4otary. personally appeared and known to me to be the man whose name subscribed to the within instrument and acknowledged to be the same.B. T:AT Further Affiant &ayeth 4ot.. on T:AT. a living breathing man /or woman0. 2. Dnited &tates v. AFF BAF T 5F T%DT: PENNS8LVAINA &TAT? 0 0 &cilicet #ounty of P2 3"!e392 " : . 27<. A. >is. ndeed. #ounty of =ackson 0 0 . 'AG'0@ #ert Benied. being first duly sworn.
the &tate of 5regon cannot show nor provide a superior interest in the said property as identified upon the &ecurity Agreement held by the Affiant. T:AT. Be%. .. the Affiant!s rights . Affiant filed a D## Financing &tatement /D##3'0 in Pe%%&+3#"% " &tate. 7(' D. ). T:AT. the one real and the other artificial agrees to such in-uries and to the associated damages as established by the Affiant and the &tate. #t. the Affiant!s rights exist even in light of the D. ndeed.ynhammer v. $. no more than /affidavits0 is necessary to make the prima facie case. being first duly sworn.< /Hth #ir. T:AT. a &uperior &ecurity nterest and $ien upon the property of the Bebtor and in the Bebtor!s name filed first in line and first in time.existed by the law of the land long antecedent to the organization of the &tate. T:AT. Affiant caused to be filed.". T:AT.5 A%? 45T T:? &A9?.F*"%<3 %= a living breathing man. T:AT.HG0. correct and complete to the best of my knowledge and belief. F5% 54? & %?A$. under Article . depose and say and declare by my signature that the following facts are true.. /:ale v. /see for reference@ . <2G F. and is sovereign in a collective capacity with other sovereigns. 48 . Affiant is !of the people! and is above the corporate government called !&tate of 5regon! K &TAT? 5F 5%?154. T:AT. and the Affiant as one of the people that can exercise any power.. by and through it!s agents by said agreement.% F*ee!o. . >is.= to perfect a security interest to initiate redemption as a matter of right. any discrimination or in-ury caused by the &tate of 5regon to recognize the two distinct entities.3"ankruptcy aka The 4ational ?mergency and that includes the right of redemption. 7'<A@ &. T:? 5T:?% & F #T 54. T:AT.&. 9arch 77. 27<. operating in a de3facto bankrupt capacityKstatus. the Affiant is a flesh and blood man. 'AG'0@ #ert Benied.the people have all power. 2. Dnited &tates v.&. :enkel.7nd.. 'AG7 That . D## Filing 4umber H''73G<73)'7A32 on O/to4e* 1>= $>>. T:AT. is estopped from defense or rebuttal in the matter and agrees that the Affiant may proceed by Tort for damages.. T:AT. the AffiantK&ecured Earty is flesh and blood and the corporate fictionKBebtorK?ns legis as appearing upon any D## filing is !artificial! and was created in the contemplation of law /commerce0 A4B T:? T.&..0 T:AT. &ection of the 5regon #onstitution. 2( D. the Affiant is the &ecured Earty creditor and authorized representative of the corporate fiction3 entity K Bebtor /?ns legis0 identified as BENJAMIN FREEDOM FRANKLIN under necessity. over and above the &tate of 5regon and that all property is exempt from levy. Eeople..
at any time within H days upon receipt..est Ealm "each. as true.". these facts stand as true in the both the private and public record.".% F. n #ommerce 3 Truth is sovereign. Eoint of $aw 3 &ilence e+uates to agreement. F*"%<3 % fo* BENJAMIN FREEDOM FRANKLIN ?/o9+* @2t:= ?4& $?1 & A#>45.)(' %espondent %?6 Account LI #ontract LII AFFIDAVIT OF NOTICE OF DEFAULT .F*"%<3 %= personally appeared and known to me to be the man whose name subscribed to the within instrument and acknowledged to be the same. Arizona G2H)< &ecured Earty Ban the 9an dba $oan %esolution &pecialist &:8&T?% "A4> '<<2 Ealm "each $akes "lvd. representing the &tate of 5regon at any level. @ Bone this )th day of =uly 7((< A. Authorized %epresentative. .ithout Ere-udice. F$ .. that Be%.. this Affidavit if not rebutted point for point by any man.$?B1?9?4T &D"#% "?B T5 A4B &. 7((<. 76 For a matter to be resolved. Further Affiant &ayeth 4ot. it must be expressed. 45T?6 9axim of $aw6 '.T:AT. .. "roadway Tucson. a 4otary.% F*ee!o. 4otary Eublic in and for said &tate 9y #ommission expires@ III &eal T2e fo33oA %@ Aff !"# t & )&e! "fte* Co%! t o%"3 A//e9t"%/e fo* V"3)e fo* P*oof of C3" -: #ertified 9ail 4umber =ohn :enry Boe cKo <GG( &.B. A. Attorney3ln3Fact IIIIIIIIIIIIIIIIIIII Be%.5%4 before me this )th day of =uly.B. in any matter.
. the Dnited &tates.. knowingly. and principal creditor having a registered priority lien hold interest to all property held in the name of the Bebtor@ =5:4 :?4%8 B5?. or any subdivision thereof@ H. the statements made in hisKher affidavit are true. or inaction!s@ <. evidenced by D##3 Financing &tatement LIIIIIIIIIII filed with the &ecretary of &tate of the &tate of IIIIIIIIIII. intentionally. correct. including but not limited to St"te= Co*9o*"t o%= SH8STER BANK= et/. or voluntarily agreed to subordinate their position as creditor.. T:AT Affiant is competent to state the matters included in hisKher declaration. superior claimant. herein !Affiant. A.&tate of0 0 &cilicet #ounty 0 45T #? T5 A1?4T & 45T #? T5 E% 4# EA$ 45T #? T5 E% 4# EA$ & 45T #? T5 A1?4T . through signature.. including but not limited to the payment of money to %espondent@ G. actions. declares that by affidavit that of the non3response of the %espondentsKparties to the contract entitled. .@ ). T:AT Affiant is not a party to a valid contract with %espondent that re+uires Affiant to perform in any manner. having been duly sworn. o* . T:AT Affiant is the secured party.= hereinafter collectively referred to as . IIIIIIIIIIIIIII. however elected to remain silent or otherwise refused to provide said proof of claim/s0 and therefore has failed to state a claim upon which relief can be granted and has agreed and stipulated to the facts and agreed that the undersigned &ecured Earty can only discharge said debt via the remedy provided by #ongress via :=%3'A7 with "ill of ?xchange or other appropriate commercial paper.. T:AT on Se9te-4e* $$= $>>$= Affiant sent a #54B T 54A$ A##?ETA4#? F5% FA$D? F5% E%55F 5F #$A 9 /document for discovery0 to the %espondent re+uesting proof of claim as to the 3o"% /o%t*"/t DCCCCCCC= ?o* A2"te#e* t2e 9)*9o&e A"& of t2e CAFV: in regards to proof of A2"t A"& 3o"%e!= 4"%< -o%e+ o* 4"%< /*e! t ?o* A2"te#e*:= and other various proofs of claim to support a valid lawful contract. is herein addressed in his private capacity. and declared that to the best of hisKher knowledge. Ban the 9an. and not meant to mislead@ 7.. point for point. hereinafter. . #54B T 54A$ A##?ETA4#? F5% FA$D? F5% E%55F 5F #$A 9 /#AFF0. but in his public capacity as ! *e/to*= "@e%t= 7o#e*%o*=. are in full agreement regarding the following6 3 '. T:AT %espondent had 1> ?o* 1 o* ' !e9e%! %@ )9o% / */)-&t"%/e& "%! t -eE: days to respond with proof of claim. or words. has knowledge of the facts. T:AT %espondent. T:AT Affiant at no time has re+uested or accepted extraordinary benefits or privileges from the %espondent. holder in due course." / t Be% "%! *e& !e%t of t2e St"te of CCCCCCCCCC "%! & 9"*t / 9"t %@ % " /o--e*/ "3 enterprise with his co3business partners /or employees0. T:AT Affiant at no time has willingly.%espondent. T:AT the governing law of this private contract is the agreement of the parties supported by the $aw 9erchant and applicable maxims of law@ 2.
This dishonor in now deemed a charge against the %espondent.0 Bickinson .e. A2e*e +o) & @%= . That am familiar with the Eromissory 4ote and Bisbursement %e+uest and Authorization.: W t2o)t P*e.A5%4 T5 before me@ a 4otary Eublic for said #ounty and &tate. together sometimes referred to in other documents filed by Befendants in this case as the . (.right E$$# Attorneys for "ank 5ne.8o)* %"-e 2e*e. 9ichigan )G77< /.alleged agreement. a citizen of the Dnited &tates and the &tate of 5hio over the age of 7' years. v. &uite )((( Betroit.)&t-e%t& "& to +o)* G& @%"t)*eG 43o/<?&: o% "33 +o)* !o/)-e%t&.2((IIIIIIIIIII 4ow comes the Affiant. Bated this IIII day of IIIIIIIIIIIIII.A. ?. T:AT %espondent has dishonored Affiant!s #AFF by not providing Eroof of #laim/s0 in respect to t2e * Lo"% Co%t*"/t= et/. severally.. .. Todd.Atto*%e+-3%-F"/t .. in propria persona 9ichael #.A. $awlor /E<)<A. dated 4ovember 7.. 'AAA. ?NE?%T .)! /e A)t2o* Be! Re9*e&e%t"t #e. 7((<. f called as a witness. . would testify as stated herein. Befendants..077. 2(( . NOTEF A& +o) 2"#e 3e"*%e!= -"<e "!.= Se/)*e! P"*t+= % 4e2"3f of DEBTOR NAME HEREH= E%& 3e@ & T2e fo33oA %@ "ff !"# t & "% EXCEPTIONAL "ff !"# t "& to t& /o%te%t= "%! t & %/3)!e! 2e*e fo* +o)* e! f /"t o%: STATE OF MICHI7AN IN THE CIRCUIT COURT FOR THE COUNT8 OF OAKLAND "A4> 54?.. Bave #Ko 2'7G ?cho %oad "loomfield :ills. :ammer /E)'H(20 %yan 5. Further Affiant sayeth not.3. make this Affidavit based on my own personal . T4?&& F5% B?F?4BA4T& :A%&:AFA%B:A4 BAF? and E%AT 9A BAF?. in this Affidavit. :arshavardhan Bave and Eratima :. 4..(7 Befendants.itness my hand and seal6 IIIIIIIIIIIIIIIIIIIIII &eal@ 4otary Eublic 9y #ommission expires. 8our 4ame :ere.'(. -ointly and. and declares as follows. 4. Affiant ACKNOWLED7EMENT &D"&#% "?B A4B &.A$>?% F.3()H))G3#M :on. do hereby certify that on this III day of IIIIIIIIIIII 7((< the above mentioned appeared before me and executed the foregoing. Elaintiff. between Befendants and Elaintiff but called the ..alker F. 9l )G..'.oodward Avenue. &osnick AFF BAF T 5F . under penalty of per-ury6 '. #ase 4o.4ote. T5BB.
including the 4ote. Among other things.(s. especially since the 'A.(( years in both ?urope and the Dnited &tates. The liabilities represent the amounts that the bank owes the customers. %?$?FA4#? 5F &D"T$? B &T 4#T 54& A"5DT T8E?& 5F 954?8 ). gold. and other financial instruments in connection with my work for the %eserve "ank*s discount windows and parts of the open market trading desk function in 4ew 8ork. drafts.ith the exception of customary stores of value like gold and silver.instruments. 1AAE follows an accounting convention that lies at the heart of the double3entry bookkeeping system called the 9atching Erinciple. bonds. economist. silver. readings. bankers! acceptances. became one of the Federal %eserve &ystem!s recognized experts on the legal history of central banking and the pledging of notes. research writer.&. was assigned responsibility for +uestions involving both novel and routine notes. and education will be tendered to Befendants and may be made available to the #ourt and to Elaintiffs counsel upon re+uest. a comparatively small amount of money of exchange /e. monetary and banking systems. n classical economic theory. confusion about the distinctiveness of these two concepts has led to persistent attempts to treat money of account as the e+uivalent of money of exchange. funds accepted from customers. especially in a fractional reserve banking system. publications. E%5F?&& 54A$ "A#>1%5D4B ODA$ F #AT 54& 7. and other financial instruments at the discount window to enable the Federal %eserve to make advances of credit that became or could become money. securities. and historical principles stated herein. regarding certain facts at issue in this case of which previously had no direct and personal knowledge. and official currency notes0 may support a vastly larger +uantity of business transactions denominated in money of account. 1?4?%A$$8 A##?ET?B A##5D4T 41 E% 4# E$?& . economic.0 from customers and deposits or records the instruments as assets. A@" %&t t2 & 4"/<@*o)%!= I /o%/3)!e t2"t t2e Note= !e&9 te &o-e 3"%@)"@e "4o)t I3"Af)3 -o%e+I eJ93" %e! 4e3oA= /3e"*3+ /o%te-93"te& 4ot2 ! &4)*&e-e%t of f)%!& "%! e#e%t)"3 *e9"+-e%t o* &ett3e-e%t % -o%e+ of . From my study of historical and economic writings on the sub-ect.g. worked as an attorney and legal officer for the legal departments of the Federal %eserve "anks of 4ew 8ork and #leveland.. it must record offsetting liabilities that match the assets that it accepted from customers. This principle works as follows6 . 9y +ualifications as an expert witness in monetary and banking instruments are as follows. For 7( years. bonds. "anks are re+uired to adhere to 1enerally Accepted Accounting Erinciples /1AAE0.knowledge of the legal. except that have relied entirely on documents provided to me. conclude that a common misconception about the nature of money unfortunately has been perpetuated in the D. most of the funds advanced to borrowers /assets of the banks0 "*e /*e"te! 4+ t2e 4"%<& t2e-&e3#e& and are not merely transferred from one set of depositors to another set of borrowers. coin.. once economic exchange has moved beyond the barter stage. currency. promissory notes. for nine years. checks. there are two types of money6 money of exchange and money of account! For nearly . A summary biographical sketch and resume including further details of my work experience. have served as an expert witness in several trials involving banking practices and monetary instruments. am making this affidavit based on my experience and expertise as an attorney. The sum of these transactions is the sum of credit extensions in the economy. n reality. n addition. also have read extensively treatises on the legal and financial history of money and banking and have published several articles covering all of the sub-ects -ust mentioned. am competent to make the following statements. or any other similar instruments /hereinafter . . and teacher. n a fractional reserve banking system like the Dnited &tates banking system.hen a bank accepts bullion. the monetary base of the economy largely consists of credit instruments. worked as an economic research officer at the Federal %eserve "ank of #leveland.
The relevant 5fficial #omment states that . &ee.oney is defined in &ection '37(' /7)0 as . Traditionally and legally. . The narrow view that money is limited to legal tender is re-ected.#.*. That was an exchange of the credit of "ank 5ne /Elaintiff0 for credit apparently and previously extended to Befendants by 9ichigan 4ational "ank. ). there is no reason to believe that Elaintiff would refuse a substitution of the credit of another bank or banker as complete payment of the Befendants! repayment obligation under the 4ote. &ee. "asically.A(2.lawful money of the Dnited &tates of America.. n what form of money o* /*e! t is the repayment obligation dueC.The test adopted is that of sanction of government. tends to validate the classical theoretical view of money. for silver. 2''G /b0.Eromise to Eay. and currency notes redeemable for gold or silver on demand. in its otherwise modern3seeming 4ote.. (egal tender under the *niform +ommercial +ode .. ronically. n a banking law context. <. The referenced 5fficial #omment notes that the definition of money is not limited to legal tender under the D.. conclude that the D.. believe this to be error in the text of the author!s affidavit. it is puzzling why Elaintiff would retain the archaic language. is a concept that sometimes surfaces in cases of this nature. "ebster#s $ew %nternational &ictionary /7d ed. . t was =ohnson who declared on '2 9arcy 'A<H that after '2 =une 'A<H that Fed %es 4otes would not be exchanged for silver and the practice did stop on '2 =une 'A<H 3 not 'A<).+. -o%e+ of eJ/2"%@e Ao)3! 4e Ae3/o-e 4)t & %ot *e() *e! to *e9"+ o* &ett3e t2e Note:. 4ote6 +uestion the statement that fed reserve notes cannot be redeemed for silver since 'A<). and 2''A /a0. since 'A<).-. (egal tender. 2. as defined by #ongress. whether by authorization before issue or adoption afterward. 9odern credit agreements might include repayment language such as. era.+.' D. plus D. which by law cannot be redeemed for gold since 'A. Traditionally. when domestic private gold transactions were suspended /until 'AH)0. not about exchanges of money of exchange /lawful money or even legal tender0. $awful 9oney. The factual basis of this conclusion is the reference in the Bisbursement %e+uest and Authorization to repayment of PA2. clause0. /see .lawful money.#.#. .&.) or.' which avoids the entire +uestion of . the 4ote explicitly refers to repayment in . for the Dnited &tates. #ongress defines the phrase . &ections 2'(.The repayment obligation under this agreement shall continue until payment is received in fully and finally collected funds. Thus.'< to 9ichigan 4ational "ank from the proceeds of the 4ote. t is possible that this language is merely a legacy from the pre3'A.lawful money of the Dnited &tates of America. which recognizes the circulating medium as a part of the official currency of that government. bonds and notes redeemable for gold0 that constituted the reserves of a national bank prior to 'A'. $awful money was the form of money of exchange that the federal government /or any state0 could be re+uired by statute to receive in payment of taxes or other debts. . lawful money was only those forms of money of exchange /the forms -ust mentioned. &ection '37(' /7)0 /5fficial #omment0.&.. /date of creation of the Federal %eserve "anks0. a related concept but one that is economically inferior to lawful money because it allows payment in instruments that cannot be redeemed for gold or silver on demand.a medium of exchange authorized or adopted by a domestic or foreign government and includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more nations. 9oreover..#. This is a case about exchanges of money of account /credit0. I% 3 @2t of t2e&e f"/t&= I /o%/3)!e t2"t P3" %t ff "%! Defe%!"%t& eJ/2"%@e! *e/ 9*o/"3 /*e! t& I%#o3# %@ -o%e+ of "//o)%t "%! %ot -o%e+ of eJ/2"%@e: %o 3"Af)3 -o%e+ A"& o* 9*o4"43+ e#e* Ao)3! 4e ! &4)*&e! 4+ e t2e* & !e % t2e /o#e*e! t*"%&"/t o%&.#. has been the form of money of exchange commonly used in the Dnited &tates since 'A.. Also. silver. legal tender is whatever the government says that it is. This conclusion also is consistent with the bookkeeping entries that underlie the loan account in dispute in the present case. The most common form of legal tender today is Federal %eserve notes. ."//o)%t ?t2"t &. lawful money only included gold. 'A2(0.
securities or other capital e+uivalent to money. ADVANCES OF BANK CREDIT AS THE EKUIVALENT OF MONE8 A.t2"t /o%te-93"te! % t2e /*e! t "993 /"t o% fo*-= "@*ee-e%t= %ote?&:= o* ot2e* & . loosely defined0.?&T?%4 ?D%5E? 2(32. %s to set banks! reserve re+uirements /currently. #%?B T Q #599?%#? 7)A372' /'A7A0 and #harles E. or other forms of money. to repay what the Elaintiff claims was the money lent to the Befendants.3"* %&t*)-e%t?&: t2"t t2e Defe%!"%t& eJe/)te!= t2e*e4+ /2"%@ %@ t2e /o&t& "%! * &<& to t2e Defe%!"%t&. but the Befendants were re+uired to repay in money /money of exchange. credit. which in turn could be withdrawn in lawful money. It & %ot "% )%*e"&o%"43e "*@)-e%t to &t"te t2"t P3" %t ff "99"*e%t3+ /2"%@e! t2e e/o%o. in the form of either Federal %eserve notes or banks! deposits at Federal %eserve "anks. n the modern economy. collectively referred to herein as . the Elaintiff extended its own credit /money of account0. to third parties. in turn. had value and. >indleberger. n transactions with third parties. usually ten percent of demand liabilities0 at levels that would encourage banks to extend new credit to borrowers on their own books that third parties would have to present to the same banks for redemption.credit money.. thus leading to an expansion of bank3created credit money. "A4>& "?1A4 T5 $?4B T:? % 5. n my opinion. as applied to the facts of the present case. especially after the suspension of domestic transactions in gold in 'A. the bookkeeping entries re+uired by application of 1AAE and the Federal %eserve!s own writings should trigger close scrutiny of Elaintiffs apparent assertions that it lent its funds.0. The discussion of money taken from Federal %eserve and other modern sources in paragraphs '' et se+. how much. the . many non3bank providers of credit also extend book credit to their customers without previously setting aside an e+uivalent amount of monetary reserves /credit card line of credit access checks issued by non3banks are a good example of this type of credit0. and lawful money ./ &)4&t"%/e of t2e t*"%&"/t o% f*o.(((. At most. loosely defined.4 #%?B T 4&T?AB 5F %?A$ 954?8 G. a means by which the Federal %eserve expands the money supply.. credit. if so. these drafts and bills came to serve most of the ordinary functions of money. Elaintiff apparently asserts that the Befendants signed a promise to pay. credit. n fact.4ote. thereby causing them to owe the Elaintiff P)((.. According to the bookkeeping entries shown or otherwise described to me and application of 1AAE.:5. A F 4A4# A$ : &T5%8 5F . A synthesis of these sources. is as follows6 As commercial banks and discount houses /private bankers0 became established in parts of ?urope /especially 1reat "ritain0 and 4orth America. in exchange for the Elaintiffs advance of funds. or some type of money to or on behalf of Befendant. #redit at the Federal %eserve eventually became the principal form of monetary reserves of the commercial banking system. is consistent with the account of the origins of the use of bank credit as money in this paragraph. which also causes an expansion of the aggregate +uantity of credit money.lawful money of the Dnited &tates of America. /'AG)0. funds. such as a note/s0 or credit application /collectively. :owever. The third parties had to determine for themselves whether such .money. by the mid3 nineteenth century they commonly made loans to borrowers by extending their own credit to the borrowers or. The typical form of such extensions of credit was drafts or bills of exchange drawn upon themselves /claims on the credit of the drawees0 instead of disbursements of bullion. 954?8. Thus. functions as money in the current monetary system. The Federal %eserve Act of 'A'. the Befendants allegedly were to tender some form of money /. is the type of money explicitly called for in the 4ote0. was drafted with this model of the commercial economy in mind and provided at least two mechanisms /the discount window and the open3market trading desk0 by which certain types of bankers! credits could be exchanged for Federal %eserve credits. the best sources of information on the origins and use of credit as money are in Alfred 9arshall. or money to or on behalf of Befendants. credit money is not alien to the current official monetary system@ it is -ust rarely used as a device for the creation of Federal %eserve credit that. at the borrowers! direction. coin. or something else of value in exchange /money of exchange.
"ut Elaintiffs loan agreement apparently avoids claiming that the bank actually lent the Befendants money. . and the newly issued credit or money is similar or e+uivalent to a promissory note. Federal %eserve "ank of 4ew 8ork /)th ed. The . they create new money. promissory notes.Faluable consideration /money0 the bank gave the customer /borrower0. They apparently state in the agreement that the Befendants are obligated to repay Elaintiff principal and interest for the . '7. Bavid :. contains standard bookkeeping entries demonstrating that money ordinarily is recorded as a bank asset. ed. 95B?%4 954?8 9?#:A4 #& H3. . under Federal Beposit nsurance Act0.0 Therefore. . page ''.. A2 /2 /*e"te& "t 3e"&t t2e %fe*e%/e of %e()"3 t+ of o43 @"t o%& on the two sides of the transaction . The loan agreement and 4ote apparently still delete any reference to the bank!s receipt of actual cash value from the Befendants and exchange of that receipt for actual cash value that the Elaintiff banker returned. #ash /money of exchange0 is money. while a bank liability is evidence of money that a bank owes.. Anne 9arie $. The Elaintiff acts in the capacity of a lending or banking institution.The commercial bank lending process is similar to that of a thrift in that the receipt of cash from depositors increases both its assets and its deposit liabilities. including lawful money.of " !e-"%! !e9o& t o* ot2e* !e-"%! 3 "4 3 t+ of t2e 4"%<. nstead of the bank lending its money or other assets to the customer..&. A//o*! %@ to t2e Fe!e*"3 Re&e*#e B"%< of NeA 8o*<= -o%e+ & "%+t2 %@ t2"t 2"& #"3)e t2"t 4"%<& "%! 9eo93e "//e9t "& -o%e+F -o%e+ !oe& %ot 2"#e to 4e &&)e! 4+ t2e @o#e*%-e%t. &ection 'G'. '7 D. checks. offset by bank liabilities called checking account balances. which enables it to make additional loans and investments. /#onsumer loans are funded similarly. f Elaintiff!s response to this line of argument is to the effect that it acknowledges that it lent credit or issued credit instead of money. &ee.. . meanwhile alleging that the bank lent the customer money. 'AG)0/apparently already introduced into this case0. 11. The bank then usually would hold this demand deposit in a transaction account on behalf of the customer."ookkeeping entry representing a deposit of funds into an account.money. the bank created funds for the customer!s transaction account without the customer!s permission. which shows that.hen a commercial bank makes a business loan. authorization.. one might refer to Thomas E.. is to be exchanged for ban/ credit-. or be in any special form. &ee. T2 & Ao)3! &2oA t2"t t2e 4"%< *e/e #e! t2e /)&to-e*G& & @%e! 9*o. it accepts as an asset the borrower!s debt obligation /the promise to repay0 and creates a liability on its books in the form of a demand deposit in the amount of the loan. more accurately.. banks owe money to persons who deposit money. .The publication..&e to *e9"+ "& "% asset. =une 'AA70/apparently already introduced into this case0.. To understand what occurred between Elaintiff and Befendants concerning the alleged loan of money or.9oney doesn!t have to be intrinsically valuable. . and credit or promissory notes /money of account0 become money when banks deposit promissory notes with the intent of treating them like deposits of cash.#. /l0/'0 /definition of .. credit. and promissory notesKcredit agreements /assets0 as money deposited to create credit or checkbook money that are bank liabilities. Federal %eserve "ank of Ballas publication 954?8 A4B "A4> 41. as the customer reasonably might believe from the face of the 4ote. The bookkeeping entries tend to prove that banks accept cash.. "A%%54!& "D& 4?&& 1D B? B #T 54A%8 5F "A4> 41 T?%9&. 1onczy. 954?8 A4B "A4> 41 /)th ed.. Eage 2 says. 95B?%4 ADT:5% T ?& 54 954?8 '(..#redit banking. Bavid :. explains that when banks grant loans. 'AG)0/apparently already introduced into this case06 . A. which may be treated as a deposit of money when received by the lending bank. Fitch. For example. be issued by government. the bank!s original bookkeeping entry should show an increase in the amount of the asset credited on the asset side of its books and a corresponding increase e+ual to the value of the asset on the liability side of its books. Friedman.deposit.at that0. Federal %eserve "ank of #hicago /rev. . absent any right of setoff. "?T 85D T:5D1:T. t2)& monetizing t2e /)&to-e*G& & @%"t)*e "%! /*e"t %@ o% t& 4oo<& " 3 "4 3 t+ % t2e fo*. . drafts. or knowledge and delivered the credit on its own books representing those funds to the customer.. Friedman. explains that banks create new money by depositing 5Ds. it is helpful to review a modern Federal %eserve description of a bank!s lending process. .
. the Befendants were repaid their loan to Elaintiff.new money is created because a new . The Elaintiff received P)((. T2e P3" %t ff % f"/t %e#e* 3e%t "%+ of t& oA% 9*e-eJ &t %@ -o%e+= /*e! t o* "&&et& "& /o%& !e*"t o% to 9)*/2"&e t2e Note o* /*e! t "@*ee-e%t f*o. T2e fo33oA %@ 9o %t & undisputed6 The Befendants! loan of their credit to Elaintiff. including checks and wire transfers. . /4ote6 add that when the bank does the forgoing.((( of new money /the nominal principal amount less up to ten percent or P)(. to sellers of goods and services for the account of Befendants. T2e P3" %t ff & t*+ %@ to )&e t2e /*e! t "993 /"t o% fo*. which arguably was a P)((. '<.((( to P)((. and then when the Elaintiff repaid the Befendants by paying its own credit /money of account0 in the amount of P)((..((( of money to the Befendants.. 5ne reasonably might argue that the Elaintiff recorded the 4ote or credit application as a loan /money of account0 from the Befendants to the Elaintiff and that the Elaintiff then became the borrower of an e+uivalent amount of money of account from the Befendants.hat they RbanksS do when they make loans is to accept promissory notes in exchange for credits to the borrowers! transaction accounts. showing that the Elaintiff owes P)((.<(.hen the Elaintiff deposited the Befendants! P)((.((( loan from the Befendants to the Elaintiff.((( deposit of money of account by the Befendants. The next sentence on the same page explains that the banks! assets and liabilities increase by the amount of the loans.. COMMENTARY AND SUMMARY OF ARGUMENT '.o* t2e Note to 9e*&)"!e "%! !e/e #e t2e Defe%!"%t& %to 4e3 e# %@ t2"t t2e o99o& te o//)**e! "%! t2"t t2e Defe%!"%t& Ae*e t2e 4o**oAe* "%! %ot t2e 3e%!e*. 1AAE ordinarily would re+uire that the Elaintiff record a liability account.((( of reserves that the Federal %eserve would re+uire against a demand deposit of this size0. Elaintiff apparently accepted the Befendants! 4ote and credit application /money of account0 in exchange for its own credit /also money of account0 and deposited that credit into an account with the Befendants! names on the account. -ust as if the Befendants were to deposit cash or a payroll check into their account.0 . when issued and paid from their deposit or credit account at Elaintiff. page <. Elaintiff is using the Befendant!s 4ote for its own purposes. CONCLUSION 'H. The following appears to be a disputed fact in this case about which have insufficient information on which to form a conclusion6 infer that it is alleged that Elaintiff refused to lend the Befendants Elaintiffs own money or assets and recorded a P)((..t2e Defe%!"%t&. 95B?%4 954?8 9?#:A4 #&. then in that event. '2.loan becomes a deposit.((( to third3party sellers of goods and services for the account of Befendants. -ust like a paycheck does. do not have sufficient knowledge of the facts in this case to form a conclusion on the following disputed points6 4one of the following material facts are disclosed in the credit application or 4ote or were advertised by Elaintiff to prove that the Befendants are the true lenders and the Elaintiff is the true borrower. crediting the Befendants! deposit account. "ased on the foregoing. and it remains to be proven whether Elaintiff has incurred any financial loss or actual damages / do not have sufficient information . and the transaction was complete. says. the Elaintiff created from P.loan contract.. became money in the Federal %eserve &ystem /sub-ect to a reduction of up to ten percent for reserve re+uirements0 as the newly issued credit was paid pursuant to written orders. there is an utter failure of consi eration for the .A(2.((( of credit or money of account from the Befendants as an asset. as well as apparently issuing its own credit for PA2.((( of newly issued credit into an account.'< to 9ichigan 4ational "ank for the account of the Befendants. 1.
alker F. who proved his identity to me to my satisfaction. hereby further affirm that the basis of these beliefs is either my own direct knowledge of the legal principles and historical facts involved and with respect to which hold myself out as an expert or statements made or documents provided to me by third parties whose veracity reasonably assumed.A$>?% F. the inclusion of the . hereby affirm that prepared and have read this Affidavit and that believe the foregoing statements in this Affidavit to be true. 4otary Eublic of the &tate of 5hio 0rom1 The 2edemption . IIIIIIIIIIIIIIIIIIIIIIIIII . n any case. . O2 o Becember 2.A0 ?xpert witness for the Befendants . At #hagrin Falls. T5BB /5hio bar no. AFFIRMATION 'G. and he acknowledged his signature on this Affidavit in my presence and stated that he did so with full understanding that he was sub-ect to the penalties of per-ury.lawful money. 7((. Attorney at $aw NOTAR8GS VERIFICATION At #hagrin Falls. Todd. 5hio Becember 2. ((<)2. 7((. 5n this day personally came before me the above3named Affiant. Further the Affiant sayeth naught.to form a conclusion on this point0.anual. 3th 4d. language in the repayment clause of the 4ote is confusing at best and in fact may be misleading in the context described above.