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What Does The US Dollar Have in Common with a Mermaid?
The History of Money: Installment 4 – Merrill Jenkins Sr., M.R.
Last week we covered how inflation plays a critical part in managing wars and was possibly the deciding factor in the war between the states (Civil War) in the US. We also covered how an unbacked war time US currency was ultimately declared unconstitutional. This week we discuss how our current unbacked currency has made a binding legal definition of the dollar challenging at times. Court battles have been won against the dollar that suggest it does not fulfill its legal requirements, but the very nature of this topic is dangerous to the US so it can easily be understood that a most tactical approach must be used in these discussions. Enter Mr. Merrill Jenkins.
Every now and then a person comes along that just seems to make a difference in your life. Mr. Jenkins is one such man. I never had the privilege of meeting him but have studied his books and lectures for some time now. He was born in 1919 and spent his teenage years growing up during the great depression. Like many young men of his day he started work at an early age in order to help make ends meet at home. Mr. Jenkins died relatively young at age 60 in 1979. In between those years Mr. Jenkins led an interesting life. This is his story.
Somewhere in the early 1960's Mr. Jenkins invented the automatic stamp dispensing machines that were installed in Post Office lobbies for after-hours operation. He also went on to invent other vending machines of one sort or another including those that changed federal reserve notes, “dollars,” for tokens, “coins.” During the course of his work for the Post Office the Treasury Department investigated his machines. They were quite impressed with the way they worked.
Mr. Jenkins told them that the only way a fake coin could beat his machine is if someone plated a slug with a silver surfacing. For the rest of his life he claimed that he was regrettably the guilty person who gave them the idea. When the Treasury started issuing token coinage in 1965 Mr. Jenkins started wondering exactly what this thing called money really was all about. He read and reasoned about the money issue and eventually wrote several works. "Money the Greatest Hoax on Earth" was his first book. It was published in 1971. It was followed by "Everything I Have Was Theirs", "Treadmill to Oblivion" and finally "Aeonic Monetary Delusion" published after his death.
Mr. Jenkins writes his books with a hard-hitting logic that is reasoned out in great detail. Sometimes the details seem over worked, but as he says in his books, exact definitions of terms are required for a proper understanding of larger concepts.
He had quite a correspondence with the IRS and the Federal Reserve that he shares in his book "Everything I Have is Theirs," which can be found here as a PDF. His most pressing letters result from a couple of questions: "Exactly what is a dollar?" and "What is the money of account in the United States?" The replies from these simple questions from all branches and levels of government as well as private banks and the Federal Reserve are truly astounding. Not one straight answer from all of them. Some even go so far as to chide him while almost telling him how beautiful The Emperor’s New Clothes are.
His most memorable lecture involved the question, "What is a dollar of money?" In the coinage act of 1792 it states that the money of account shall be expressed in dollars. The term "dollar" is a unit of measurement just like quart or inch. In and of itself a unit of measure represents nothing. In the coinage act of 1792 a dollar measure of gold was a certain number of grains of 999 gold while a dollar measure of silver was a certain number of grains of .999 silver. A silver dollar should have been expressed as "a dollar quantity of silver". The lecture goes on to suggest that since a dollar is a unit of measure of silver or gold and there is no more silver or gold in circulation, the term "dollar" in use today is meaningless. He states that a judge stated to him once that the term dollar is in common use and everyone knows what it is, to which he replied, "So is the term mermaid but they don't really exist either!"
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Paper currency used to be "redeemable" in gold and as such was a note, payable in gold to the bearer upon demand. Now, since it is redeemable in nothing but another like piece of paper it is technically no longer a note. Yet we are still supposed to honor it in transactions as if it were the money (gold or other units of value) itself. He made his point by illustrating a hat check represented your hat that you checked at the door. It was not the hat itself, only a claim for the hat at a later time. Certainly, you would not wear the hatcheck home on your head as if it were the actual hat! He claims that we are now using the hat checks as hats themselves with our present system.
The argument that there are neither real "dollars,” or “lawful money of account" in circulation, lead to his next group of letters to the IRS. He stated that since there was no useable definition of a dollar in IRS tax codes and their correspondence with him, how could he send in a 1040 that required him to swear on the dollar amounts he had earned? He then stated that since federal reserve notes were not "dollars" and that he no longer could determine what a dollar was, he had been robbed of his labors over the past years and a crime had been committed. He followed this declaration with a request that the IRS help him in this criminal matter and to please return all his so called “tax dollars" that he had previously sent to them as evidence of the crime.
Since the dollar is a unit of measure and the modern dollar has nothing to measure, it can only follow that the modern dollar is now actually nothing. Money used to be redeemable in hard assets but the modern dollar has no assets and is technically monetized debt. This is where it gets a bit tricky, as our modern “dollar” is both simultaneously an asset and a debt.
Mr. Jenkins' books are filled with references to court cases and his correspondence with various officials. They read like a Greek tragedy. I have only attempted to illustrate a small part of his total works. However during the course of his studies he developed a list of 52 economic truths that can be looked up here, that are brilliant guide posts for understanding money. Economic Truth #33 - Inflation must end with deflation, seems most applicable for our current times, though. Especially when it comes to the US mints stamping of their precious metals tender in their Gold, Silver, Platinum and Palladium American Eagles series, which all have a stamped US dollar values on them. This series of US coinage all came about after Mr. Jenkins had passed.
I am sure he would have had fun with the new American Eagles had he been alive to see them issued. All the following issues are legal tender: Silver Eagles at $1.00/oz, Gold Eagles at 50.00/oz, federal reserve notes, old silver coins before 1965 coins with 10% silver, and gold certificates from years past! Each of these items has a market value that is different from their stamped legal tender value. I am waiting for someone at the treasury to explain that this. Perhaps we should write them a letter.
I leave you with a quote from section 19 of the coinage act of 1792 after the US founding fathers just had their little experiment with fiat currency in the form of the continental dollar, which came to a nasty end.
"If any of the gold or silver coins shall be debased ...every such officer or person who shall commit any or either of said offenses, shall be deemed guilty of felony, and shall suffer death.”
If we were to enforce this, the gallows would have a back log!
Written By: Larry LaBorde
This article was originally crafted by my father for his readers in 2005, and its content was at the root of many of our debates. The simple answer was to always answer him with “everyone knows what a dollar is,” but he was quick to remind my younger self that this definition was manipulated as part of a robbery. It is only in today’s times that this conversation is becoming more mainstream and the US is coming to understand what inflation fully means.
Edited By: Christopher LaBorde
The Keyboard Chimp
Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.
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