The Mystery Of Debt, Part 1

by Keith Sharp

Acts of the 73rd United States Congress by United States

Congress Session 1, Chapter 48: Pub. Res., No. 10

To assure uniform value to the coins and currencies of the United States Chapter 49: Public, No. 30→ 48 Stat. 112, H.J.Res. 192, enacted June 5, 1933. (Also frequently cited as the Gold Repeal Joint Resolution)


73RD UNITED STATES CONGRESS 1ST SESSION Joint Resolution To assure uniform value to the coins and currencies of the United States.

Whereas the holding of or dealing in gold affect the public interest, and are therefore subject to proper regulation and restriction; and

Whereas the existing emergency has disclosed that provisions of obligations which purport to give the obligee a right to require payment in gold or a particular kind of coin or currency of the United States, or in an amount of money of the United States measured thereby, obstruct the power of congress to regulate the value of the money of the United States, and are inconsistent with the declared policy of the Congress to maintain at all times the equal power of every dollar, coined or issued by the y the United States, in the markets and in the payment of debts.  (Emphasis added)

What happened to cause the ‘existing emergency’? The monetary collapse that had caused the Great Depression disclosed that Congress was obstructed in its power to regulate the value of money.

Further, that obstruction, in the estimation of Congress, was inconsistent with its declared policy of maintaining the equal power (of money) in the payment of debts. This is a not so subtle admission that Congress could no longer pay its debts with gold.

Now therefore be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled,

That (a) every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, is declared to be against public policy; and no such provision shall be contained in or made with respect to any obligation hereafter incurred.

Did you catch that? Repaying debt with gold was declared against public policy. It was made illegal to repay debt with gold coin or gold backed currency.

Every obligation, heretofore or hereafter incurred, whether or not any such provision is contained therein or made with respect thereto shall be discharged upon payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts.

Here, obligations (debt) are to be discharged (not paid) with legal tender, not gold coin.

Any such provision contained in any law authorizing obligations to be issued by or under authority of the United States, is hereby repealed, but the repeal of any such provision shall not invalidate any other provision or authority contained in such law.

All other provisions in law, authorizing obligations to be repaid in gold, are repealed, but still retains the obligatiion that debts (obligations) must be satisfied. But now, obligations are discharged, not paid.

(b) As used in this resolution, the term ‘‘obligation’’ means an obligation (including every obligation of and to the United States, excepting currency) payable in money of the United States; and the term ‘‘coin or currency’’ means coin or currency of the United States, including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations.

Here, Congress defines what they mean by obligation; that it’s payable in money, and that “coin or currency” also includes Federal Reserve Notes.

EC. Here it was amended.

2. The last sentence of paragraph (1) of subsection (b) of section 43 of the Act entitled ‘‘An Act to relieve the existing national economic emergency by increasing agricultural purchasing to raise revenue for extraordinary expenses incurred by reason of such emergency, to provide emergency relief with respect to agricultural indebtedness, to provide for the orderly joint-stock land banks, and for other purposes’’, approved May 12, 1933, is amended follows: “All coins and currencies of the United States (including Federal Reserve notes a notes of Federal Reserve banks and national banking associations) heretofore or hereafter coined or issued, shall be legal tender for all debts, public and private, public char duties, and dues, except that gold coins, when below the standard weight and limit provided by law for the single piece, shall be legal tender only at valuation in proper actual weight.´´ Approved June 5, 1933, 4:40 PM.

Here, the Wiki source appears to have made some typographical ommissions. At any rate, this law is promulgating that Federal Reserve Notes shall be legal tender, except that gold coins shall be legal tender when they are below the standard weight and limit as provided by law…

This is a stunning admission of their intention to revalue gold coin at a different value than by their weight would indicate. This means their purpose was to disavow their obligation to provide an honest weight and measure for gold coin!

What does all this mean for us today? First, it explains why the US no longer pays debts. Now it discharges liabilities. In fact, it is illegal to pay debt with anything other than legal tender, ie Federal Reserve Notes.

According to Black’s Law Dictionary, ‘tender’ means:

Definition of TENDER -An offer of money; the act by which one produces and offers to a person holding a claim or demand against him the amount of money which he considers and admits to be due, in satisfaction of such claim or demand, without any stipulation or condition.

Tender is an offer of money.

Definition of LEGAL -1. Conforming to the law; according to law; required or permitted by law; not forbidden or discountenanced by law; good and effectual in law. 2. Proper or sufficient to be recognized by the law ; cognizable in the courts; competent or adequate to fulfill the requirements of the law. 3. Cognizable in courts of law, as distinguished from courts of equity; construed or governed by the rules and principles of law, in contradistinction to rules of equity. 4. Posited by the courts as the inference or imputation of the law, as a matter of construction, rather than established by actual proof; e. g., legal malice.

LEGAL TENDER is an offer of money made legal by operation of law. It is not money; it is legal tender. Remember, paying debt with money is now illegal, but discharging liabilities is made legal by Congress Session 1, Chapter 48: Pub. Res., No. 10, et seq.

Why is this important? Because LEGAL TENDER is debt! It’s not money, but it is an offer to pay money.  Simply put, we trade in debt.

Now the way debt is created, which is ‘money’ being created, a promise to pay is made, and it is entered onto a ledger as a credit. When someone borrows money in a Federal Reserve Bank, the bank extends credit based on a borrower executing a promisssory note.

That credit is entered into the bank’s ledger, and monetized in the form of a check or deposit slip, ie receipt. The bank doesn’t have a vault with money in it. It simply creates credit in a ledger, based on the borrower’s signed note promissing to pay. The bank puts no money into the transaction. It merely provides the vehicle for a borrower to create ‘money’.

The same process holds true when government borrows ‘money’. Congress simply writes a Bill, signed by the President, and the funds are created in the Federal Reserve’s ledger. The government can then write checks to draw down the account, until such time it needs more funds.

There is an unanswered question: How can the debt obligations ever be satisfied, if LEGAL TENDER offered in payment is only an offer of money? No money is actually ever tendered!

Look for the answer is Part 2.