Department of Justice Press Release, March 18, 2011: Bernard von NotHaus, 67, was convicted today by a federal jury of making, possessing, and selling his own coins, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Following an eight-day trial and less than two hours of deliberation, von NotHaus, the founder and monetary architect of a currency known as the Liberty Dollar, was found guilty by a jury in Statesville, North Carolina, of making coins resembling and similar to United States coins; of issuing, passing, selling, and possessing Liberty Dollar coins; of issuing and passing Liberty Dollar coins intended for use as current money; and of conspiracy against the United States. The guilty verdict concluded an investigation which began in 2005 and involved the minting of Liberty Dollar coins with a current value of approximately $7 million.
The press release eventually cites Article 1, Section 8, Clause 5 of the U.S. Constitution: “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures” Notice this sentence does not say Congress has the exclusive power to create money. Article 1, Section 10 does prohibit states from creating money, but not individuals. Of course, the government does not believe this. The U.S. Mint said, “under the Constitution (Article I, section 8, clause 5), Congress has the exclusive power to coin money of the United States and to regulate its value.” Thus the government is violating the U.S. constitution which exists more for decorative purposes than to actually constrain government action.
The hatred of currency competition was expressed in the press release by U.S. Attorney Tompkins: “Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country. We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.” Were you terrorized about having a choice between a U.S. dollar and a Liberty dollar? Likely not, but the government was terrified someone had the audacity to challenge its money monopoly. This is not new behavior. Lysander Spooner, who was one of today’s Mises Daily authors, was “known for competing with the U.S. Post Office with his American Letter Mail Company, which was forced out of business by the United States government.”
The New York Sun editorialized: Here is a thought experiment concerning two men who have issued money. One issued gold and silver coins that will today bring more in dollars than he charged for them. The other issued paper notes that are today worth but a fraction the gold or silver they were worth at the time they were issued. One man is facing the possibility of years in prison after a federal jury found his issuing of money to have been a crime. The other man is walking around free and being treated by the authorities with great deference. Which is which? It turns out that the man walking free is Ben Bernanke, the chairman of the Federal Reserve. A one-dollar note that his bank issued used to be worth — as recently as, say, the start of President Bush’s first term — a 265th of an ounce of gold; today it’s value has plunged to less than a 1,400th of an ounce of gold. The man who issued the coins that will fetch more dollars today than when he issued them is Bernard von NotHaus, 67. He called his coins “Liberty Dollars,” minted them with some similarities to government money, and even though they more than held their value it turns out they’re against the law.
There is currently little hope that the Free Competition in Currency Act of 2011 introduced by Congressman Ron Paul will gain traction, but who knows what can happen. To conclude here is a large excerpt of Ron Paul’s 2009 defense of currency competition: On the desk in my office I have a sign that says: “Don't steal – the government hates competition.” Indeed, any power a government arrogates to itself, it is loathe to give back to the people. Just as we have gone from a constitutionally-instituted national defense consisting of a limited army and navy bolstered by militias and letters of marque and reprisal, we have moved from a system of competing currencies to a government-instituted banking cartel that monopolizes the issuance of currency. In order to reintroduce a system of competing currencies, there are three steps that must be taken to produce a legal climate favorable to competition.
The first step consists of eliminating legal tender laws. Article I Section 10 of the Constitution forbids the States from making anything but gold and silver a legal tender in payment of debts. States are not required to enact legal tender laws, but should they choose to, the only acceptable legal tender is gold and silver, the two precious metals that individuals throughout history and across cultures have used as currency. However, there is nothing in the Constitution that grants the Congress the power to enact legal tender laws. We, the Congress, have the power to coin money, regulate the value thereof, and of foreign coin, but not to declare a legal tender. Yet, there is a section of US Code, 31 USC 5103, that purports to establish US coins and currency, including Federal Reserve notes, as legal tender.
Historically, legal tender laws have been used by governments to force their citizens to accept debased and devalued currency. Gresham's Law describes this phenomenon, which can be summed up in one phrase: bad money drives out good money. An emperor, a king, or a dictator might mint coins with half an ounce of gold and force merchants, under pain of death, to accept them as though they contained one ounce of gold. Each ounce of the king's gold could now be minted into two coins instead of one, so the king now had twice as much “money” to spend on building castles and raising armies. As these legally overvalued coins circulated, the coins containing the full ounce of gold would be pulled out of circulation and hoarded. We saw this same phenomenon happen in the mid-1960s when the US government began to mint subsidiary coinage out of copper and nickel rather than silver. The copper and nickel coins were legally overvalued, the silver coins undervalued in relation, and silver coins vanished from circulation.
These actions also give rise to the most pernicious effects of inflation. Most of the merchants and peasants who received this devalued currency felt the full effects of inflation, the rise in prices and the lowered standard of living, before they received any of the new currency. By the time they received the new currency, prices had long since doubled, and the new currency they received would give them no benefit.
In the absence of legal tender laws, Gresham's Law no longer holds. If people are free to reject debased currency, and instead demand sound money, sound money will gradually return to use in society. Merchants would have been free to reject the king's coin and accept only coins containing full metal weight.
The second step to reestablishing competing currencies is to eliminate laws that prohibit the operation of private mints. One private enterprise which attempted to popularize the use of precious metal coins was Liberty Services, the creators of the Liberty Dollar. Evidently the government felt threatened, as Liberty Dollars had all their precious metal coins seized by the FBI and Secret Service in November of 2007. Of course, not all of these coins were owned by Liberty Services, as many were held in trust as backing for silver and gold certificates which Liberty Services issued. None of this matters, of course, to the government, which hates competition. The responsibility to protect contracts is of no interest to the government.
The sections of US Code which Liberty Services is accused of violating are erroneously considered to be anti-counterfeiting statutes, when in fact their purpose was to shut down private mints that had been operating in California. California was awash in gold in the aftermath of the 1849 gold rush, yet had no US Mint to mint coinage. There was not enough foreign coinage circulating in California either, so private mints stepped into the breech to provide their own coins. As was to become the case in other industries during the Progressive era, the private mints were eventually accused of circulating debased (substandard) coinage, and with the supposed aim of providing government-sanctioned regulation and a government guarantee of purity, the 1864 Coinage Act was passed, which banned private mints from producing their own coins for circulation as currency. The final step to ensuring competing currencies is to eliminate capital gains and sales taxes on gold and silver coins. Under current federal law, coins are considered collectibles, and are liable for capital gains taxes. Short-term capital gains rates are at income tax levels, up to 35 percent, while long-term capital gains taxes are assessed at the collectibles rate of 28 percent. Furthermore, these taxes actually tax monetary debasement. As the dollar weakens, the nominal dollar value of gold increases. The purchasing power of gold may remain relatively constant, but as the nominal dollar value increases, the federal government considers this an increase in wealth, and taxes accordingly. Thus, the more the dollar is debased, the more capital gains taxes must be paid on holdings of gold and other precious metals.
Just as pernicious are the sales and use taxes which are assessed on gold and silver at the state level in many states. Imagine having to pay sales tax at the bank every time you change a $10 bill for a roll of quarters to do laundry. Inflation is a pernicious tax on the value of money, but even the official numbers, which are massaged downwards, are only on the order of 4% per year. Sales taxes in many states can take away 8% or more on every single transaction in which consumers wish to convert their Federal Reserve Notes into gold or silver.
In conclusion . . . allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the US government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government's ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system.
One thing that always bothered me about this guy was that he really seemed like he was trying to 'immitate' US coins by the words and symbols he used on them - of course in order to get people to more readily accept them.
It would seem in reviewing the law - Tile 18 Part I Chapter 25 Sec. 486 - that he is guilty. It even says 'original design' is subject to violation of the law. This would seem that even if you just stamp the weight and purity of the coin and used it as money you would be in violation of the law. I always thought he would have a better leagal case if this was done but of course it would be harder to pass it of to others - which of course is what 'uttering' is about. It seems he was stupid to skate so close to the legal lines in order to get people to use the money.
This said I do not agree with this part of the law (original design) - I think competition is good - just not competition that uses coins that are 'similar' with symbols and words common to the US government and thier coins and notes. If I am not mistaken he used phrase like Trust God, the $ sign, Statue of Liberty, US, ect. Just stupid in my view.
He's courageous. He took a stand against the state to do something voluntary and peaceful. Violating a law which creates a monopoly is no crime against man, but a blow struck for the desire of human beings to have their own markets.
It is just sick. He was convicted of a crime where there is no victim. No person or organization was hurt by him. The only organization that claimed to be injured was not injured by him but by their own behavior that really injures others. He just created a mechanism to make that government injuring of others noticable.
Like his currency or not, it is the market place that should determine the validity and quality of a currency not a jury.
Not to mention that he's been defined as a TERRORIST!
Such crimes of attempting to institute a constitutionally mandated currency is worthy of being ACCIDENTED!
Take him out back and SUICIDE him!
Here is an interview with Bernard on the Peter Schiff show.
"Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country. We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government."
If this is true, are those of us who actively work to undermine the legitimacy of the Fed considered "domestic terrorists" as well?
And how long before the state tries to shut down sites like this one?
The above quote is just effing ridiculous - let her explain how sound money is a clear and present danger to the economic stability of an already 'in the toilet' economy by freaking mobsters who hide under the facade of justice and stability in order to rob the citizens of this country of thier wealth and purchasing power. And would not a democratic system allow the people to choose thier own medium of exchange? Bunch of BS. The greater problem, as the interview said, was the freaking idiots that were on the jury. How the heel is an apHo
The part were the government got one single old lady, after 7 years of receiving a 'coin' for some pizza, thought she was defrauded when in fact that 'coin' now has a five fold increase from when she bartered it. They sure did BS her into believing that she was defrauded. Of course she was the only one that they could 'find' and get to testify - where are the victims?
Peter Schiff had him on his radio show for the entire second hour today. It'll only be on the site at SchiffRadio.com till the end of the week I believe. (Paid members have access to the archives after that).
Service coupons with no expiration attached to specific services or goods would have been the sneakier route, though more difficult to implement, but I applaud nonetheless. At any rate, there's more than one market that the government hates to see private competition in, and there are already many intelligent people putting forth their best efforts to wean people off of the public sector. The timing is hilarious, and the clash will be chock full of the usual buffoonery.
Attempts to undermine the legitmate currency of this country are simply a unique form of domestic terrorism.
There you have it, ladies and gentlemen. The feds have finally admitted what they really are.
How exactly do these trials work? How can he be convicted beyond a shadow fo a doubt that there was fraud/counterfitting? Without any witness's? What evidence did the state provide?
It seems so far fetched that they were able to peg this man with legal action. It seems far more likely that it was all staged in an attempt to get him out of the way. Much like Peter's Dad was.
filc:How exactly do these trials work? How can he be convicted beyond a shadow fo a doubt that there was fraud/counterfitting? Without any witness's? What evidence did the state provide?
My dear brother, the state does not provide justice. It's all a dog and pony show and it always has been.
filc:It seems so far fetched that they were able to peg this man with legal action. It seems far more likely that it was all staged in an attempt to get him out of the way. Much like Peter's Dad was.
All of these court proceedings are staged. Where does the court derive its authority?
Of course von Nothaus got railroaded. Most people believe in, and endorse the system which did him in.
All of this squelching of freedoms all done in the name of "freedom". Ironic I think.
Are Disney Dollars illegal? I will comment from a perspective of advocating the rule of law under the Constitution.
If the government is going to make a render unto Ceasar what is Ceasar's intellectual property argument with regards to the dollar...
so be it.
But why in the HELL did government give him a stamp of approval back when he first got started and consulted for permission?
That is the part I find most offensive. In my opinion f'n government should be on trial for fraud. Under the rule of law government has a duty and obligation to define actions in absolute terms as lawful or unlawful. It's this circumstances BS that coining is ok until you get popular I find offensive. Government gets away with perpetuating fraud lying with declarations that include ommissions.
I think after reviewing the law even the 'original design' part was not violated by Bernard.
Title 18 Section 486: Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.
What the Law is really saying is that it is illegal to make, utter,or pass, or attempt to pass, any coins, which resembles any coins of the United States or foreign countries, including any original designs, as lawful money.
'Original design' is only relevant if you are trying to pass your original design off as the lawful money coined by the United States of America or any foreign country. It does not mean you cannot mint metal and use it to buy something.
A coin by definition is metal that is struck by the authority of a government for use as money. It is the current money and it is legal tender for the discharge of debts.
Article I Section 8 - Congress has the power, alone, ‘to coin money’ and ‘regulate the value thereof... To provide for the Punishment of counterfeiting the Securities and current Coin of the United States ’ (Question - does Congress even have the power to punish counterfeiting FRN's? Are FRN's Secruities?)
This from the Bureua of Engraving and Printing:What is legal tender?
31 USC 5103. Legal Tender United States coins and currency (including Federal Reserve Notes and circulating notes of Federal Reserve Banks and National banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.
However, there is no Federal statute which mandates that private businesses must accept cash as a form of payment. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a state law which says otherwise.
Bernard went to great lengths in order not to call his medallions, money, dollars, tokens, or whatever - 'coins.' They are the legal perogitive of Congress.
How do any of the products by Liberty Dollar come close to being an attempt to counterfeit the US (penny, nickle, dime, quarter, and dollar) coins. They do not even have the same size and denomination, let alone the content (silver, gold, ect.) of the metal used. Reading some of the testimony they were arguing over words and phrases which under testimony were not the sole property of the US. Things like the $ sign, 'Liberty', ect. God I hope the is goes to the S.C.
What I still do not get, is WHY prosecute him. Yeah, the Fed are affraid of competition, sure - but how were Liberty Dollars a stronger threat than, say, Swiss Franks or investor's gold?
Were they somehow more attractive to the masses?
Apparently it doesn't occur to the ignorant masses that they can use whatever they like as money. Apparently it's an act of terrorism against the state to try to advertise this fact to them.