| Today, there are thousands of people who are needlessly losing their homes, farms and businesses because of banker created depression now in its fifth year. This article will explain the differences between money and credit and will show how banks create credit and how they pretend that it is money. The mystery of how banks deceptively carry on this practice will be unveiled as well as the legal basis for you to fight back by suing banks on fraud and usury charges. Undoubtedly, the devil himself would call this "forbidden knowledge". For a long time, the money issue debate has centered around two distinct issues. 1) That Constitutional money is gold and silver coin, 2) that the dollar is defined by the Mint Act of 1792 and that a Federal Reserve Note is not a dollar. The third area has not been discussed much as it is not yet well understood. It is the last and most important issue of all, the Bank Credit issue. It is the most important issue of all because 97% of our money supply today consists of bank credit whereas Federal Reserve notes and coins consist of less than 3%. Today, every bank loan in the United States can be legally voided because it is based on credit instead of money. WHAT IS CREDIT? Credit is the opposite of money. Money, which is legal tender for the payment of debts, is defined by Congress in 31 USCA Sec. 392. This section basically describes all coins and currency issued by the United States Government as legal tender for all debts, public and private. For purposes of this article, we will call money either coins or currency. Also, no effort will be made to argue that Federal Reserve notes are unconstitutional; that is beyond the scope of this article. Now, if you went to a motorcycle dealer and bought a new Harley Davidson with no money down, you would say "your credit is good". What exactly does that mean? It means that your promise to pay money is good. In other words, they trust you. You sign a loan agreement to pay the motorcycle dealer a certain sum of money with interest and you also sign a security agreement in which you pledge the motorcycle as collateral for the security agreement. In other words, the motorcycle dealer has accepted your credit or promise to pay a sum of money in exchange for the motorcycle. Consider how different a bank loan is. When you apply for a bank loan, you sign a loan agreement pledging to pay the bank so many dollars with interest. When the bank accepts your promise to pay, in exchange for a loan, it means your credit is good. However, the next question is the most interesting. What does the bank loan you? Well, the bank will invariably give you a check, which is a promise to pay you so many dollars. In effect, what you and the bank have done is exchange a promise to pay. In other words, you have accepted each other's credit, yet no money has exchanged hands. Now, what do you do with the check? Probably one of two things: either you deposit it in your checking account or you bring it to, let's say, a car dealer. In either instance the check, when deposited, goes directly to the bookkeeping department, where the numbers are transferred from the check and are added to your account in the bookkeeping department. Once this bookkeeping entry is made, a bank will say that its deposits have increased. Actually, this fictional increase is all on the books as there is no increase in the amount of money in the bank's vault. All of these bookkeeping entry deposits are called demand deposits, which means that the customer can literally walk into the bank and demand the deposit. These figures are placed into the bank's liabilities column, as this is the money, which the bank owes the people. Now, what do you think the banks asset are? It is a small amount of vault cash, plus a large amount of IOU's, which are all those loan agreements that you signed when you took out the loan. All those promises to pay the bank are its assets. Thus, both the bank assets and liabilities are virtually all on paper. Hence, the expression from the book Modern Money Mechanics, published by the Federal Reserve Bank of Chicago, that "deposits are merely book entries" is now easier to understand. Now, it's also easier to understand what the electronic transfer money is all about. All this amounts to is transfer of numbers or book entries from one bank account number to another. The same thing happens when you write a check. Numbers called dollars are transferred as a bookkeeping entry form your checking account to someone else's. When a credit card is used, bank credit or book entries are created and transferred to another person simultaneously. The next question is, if it is so easy for a bank to create credit, which is used like money, how then is this credit destroyed? The credit is destroyed when the principle of the loan is repaid. However, the interest collected by the bank on the credit it loaned is transferred to another account for distribution to its stockholder. Since 97% of the nations money supply consists of credit which is all created by private corporations (banks) and because interest is charged on every dollar of credit used, debts are constantly created for which no money or credit exists to repay those debts. Hence, our money system can be described as a "debt-usury" money system, because for every dollar of credit that comes into existence, a debt is created to banks and interest (usury) is charged. Under our present money system, the Federal Government will never be able to balance its budget and national debt will continue to grow by leaps and bounds. However, don't despair. Every bank loan made in the United States today is illegal, since all bank loans are based on credit instead of money. LOANS ARE ULTRA VIRES The words "ultra vires" are important words as they mean, "a contract made by a corporation beyond the scope of its corporate powers is unlawful". (See Black's Law Dictionary). The courts have consistently ruled that banks cannot lend their credit, but can only lend their money and that all loans of credit are ultra vires. (See 1st National Bank of Tollopoose v. Monroe, 69 SE 1123; Norton Grocery Co. v. Peoples National Bank, 144 SE 501; Federal Intermediate Credit Bank v. L'Herisson, 33 F 2nd 84; American Express Co. v. Citizens Sate Bank, 194 NW 427). Since no bank charter gives them permission to lend their credit, and Congress never gave banks permission to create money, all such loans of credit are ultra vires or unlawful. The bank, by loaning credit, has unjustly enriched itself. It pays no interest for the use of the credit but charges its customers the same amount of interest as if it had loaned out its money. It is a racket and con game, to say the least. It is deception and fraud. The collection of interest on credit is in violation of all usury laws. After all, the bank is collecting interest on money, which doesn't exist. It is little wonder that as more Americans are getting to understand this issue, they are suing banks on fraud and usury charges. There are over two trillion dollars worth of illegal bank loans out there waiting to be challenged. This is a much better alternative than bankruptcy as you get a chance to void the bank loans and keep your property at the same time. Anyone can walk off his property and let the bank have it, but to do so is to reward them to their fraudulent acts. It would be much better to sue the bank on fraud charges and ask that all contracts which you signed on the day you took the loan be declared ultra vires - null and void. That includes deeds of trust, mortgages, notes and security agreements. For a long time, patriots have been writing their Congressman, asking him to give us an honest money system without extortionate interest rates and the Congressman ignored us. I don't think they will ignore us for long when hundreds of thousands of banks start getting sued on fraud charges and some of the big money men on Wall Street get indicted. We, the people, can do it ourselves. No one else can do it for us. With faith in our Creator, let us go forward. By Conrad LeBeau |
| FRAUD, USURY AND BANK CREDITS |
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