THE DISPATCH OF MERCHANTS

by William L. Avery, A.M A shor !rese" a io" o" he s#b$e% o& so#r%es o& he liabili y &or he so %alle' I"%ome Ta( as )ro#"'e' i" he La* Mer%ha" hro#)h he Fe'eral Reserve a"' o her s a # es. INTRODUCTION +alla" a(,&i)h ers a"' o her live Pa rio s have ha#le' %o"si'erable la* i" o he %o#r s o" a( a"' mo"ey iss#es. -e , *ha ever evi'e"%e o& la* hey bri") a"' ho*ever e( e"sively hey resear%h heir %ases, hey are r#le' a)ai"s a"' eve" im!riso"e' i" %rimi"al %o#r s. We have ye o )ai" a si")le 'e%isio" o" s#bs a" ive la* o &ree #s &rom he %or!ora e &e#'alism s#&&o%a i") he *orl' i" he "ame o& a" i,Comm#"ism. So, here has )o o be a reaso" *hy *e mee &ail#re a& er &ail#re beyo"' he %har)e ha he $#')es are all %orr#! a"' )o'less. The r# h seems o be ha *e have sim!ly "o ye hi #!o" he vi al "erve *hi%h *ill %o"v#lse he *hole s*i"'li") la* .&ormally %o"s i # io"al la*/ #!o" *hi%h he $#')es are %om!elle' o )ive heir 'e%isio"s. I is he o"ly a"s*er ha ma0es se"se. Is his a"s*er 'is%overable so ha *e %a" bea hose ha &#"% io" by hese la*s a heir o*" )ame1 The *ri er believes ha he has 'is%overe' he a"s*er hro#)h vario#s hea e' %o"&ro" a io"s a"' !lea'i")s i" several %o#r s. I"'ee', i" Se! ember o& 2345, he *ri er s#%%ee'e' i" %or"eri") he %o#" y $#')e o" he mo"ey a"' e"'er iss#e, a"' by ba')eri") a"' blis eri") him #" il he %ho0e' *i h ra)e, %om!elle' him o bl#r o# he se%re allo*i") him o si)" a *ri o& assis a"%e .remember hose1/ a)ai"s he *ri er &or 'o))e'ly re&#si") o bar)ai" *i h ba"0er s*i"'lers over he ri)h o his o*" !ro!er y. The re%e" Com!lai" , i" a %ivil a% io" i" Fe'eral Co#r , res#l i") &rom his a% is a''e' as !ar o& he a!!e"'i( o his boo0. Well, he a"s*er is i" he mo"ey, all ri)h , b# &ar beyo"' *ha has bee" !lea'e' so &ar. I ies i" o o her s#bs a" ive iss#es raise' by 6ill Ha"0s o" "o",liabili y o& "a #ral !erso"s &or i"%ome a(es o" &ra"%hises )ra" e' by he s a es. This is he o"ly )e"#i"e basis &or over #r"i") he ille)al !erso"al .i"'ivi'#al/ i"%ome a(, *hi%h is a "#lli y o be)i" *i h a"' absol# ely 7vol#" ary7 &or reaso"s ha *ill be %overe' la er. The e" ire a( s%heme is )ro#"'e' i" he so %alle' 7%ommer%e %la#se7 o& Ar i%le I, se% io" 2, %la#se 8, o& he Fe'eral Co"s i # io", allo*i") Co")ress o 7re)#la e %ommer%e *i h &orei)" "a io"s, a"' amo") he several s a es, a"' *i h he I"'ia" ribes.7 The S#!reme Co#r hel' i" +ibbo"s v. O)'e" i" 29:; ha %ommer%e 7%om!rehe"'s ra&&i%, ra'e, "avi)a io", %omm#"i%a io", he ra"si o& !erso"s a"' he ra"smissio" o& messa)es by ele)ra!h< i"'ee' every s!e%ies o& %ommer%ial i" er%o#rse.7 This %la#se *as *ri e" o !reve" he S a es &rom *re%0i") he ="io" #!o" erro"eo#s heories o& 7i" er!osi io"7 o 7"#lli&i%a io"7 a"' o )#ara" ee he 7&ree &lo* o& i" ers a e %ommer%e,7 %er ai"ly a le)i ima e aim. Ho*ever, o re)#la e a"' )#ara" ee are "o he same as s!o"sor a"' !romo e.

Never heless, %omme"%i") *i h he I" ers a e Commer%e A% o& 2994, mo"oli hi% !riva e e" er!rise s#%%ee'e' i" e(!ro!ria i") he Fe'eral )over"me" o i s o*" #ses by several %lever la*s. O"e s#%h *as he Sherma" A" i,Tr#s A% o& 293>, *hose *or'i") !ro e% s &ar 'i&&ere" 7!erso"s7 ha" o"e mi)h s#s!e% . 6y i , eve" he i""o%e" #"em!loye' are 7i" res rai" o& ra'e7 by he mere &a% o& bei") #"em!loye'. The &#"'ame" al !remise has bee" o %om!el as ma"y !riva e i"'ivi'#als as !ossible o be%ome 7mer%ha" s7 s#b$e% o hese la*s, *here hey %o#l' be s#b$e% o "o o hers, a"' ha' a% #ally bee" !romo i") he 7&ree &lo* o& i" ers a e %ommer%e,7 b# ri)h s rai)h i" o o"e mo"o!oli?e' o%ea" o& !riva e %o" rol o# si'e he )over"me" . This res#l is a%hieve' hro#)h he ="i e' Na io"s rea y, #!o" *hi%h, by he %ommer%e %la#se a"' he 7la* o& "a io"s,7 every h#ma" bei") has be%ome, i" o"e *ay or a"o her, a 7mer%ha" 7 s#b$e% o a" i" er"a io"al s#!er,some hi") %alle' he 7La* Mer%ha" .7 This is s ri% ly a vol#" ary la* "o*here *ri e" 'o*" a"' i is s ri% ly a !riva e la* o& "e)o iable i"s r#me" s, sales, i"s#ra"%e, a"' o her ma ers bi"'i") o"ly #!o" he ho"or o& 7mer%ha" s,7 as he !erso"al i"%ome a(. Th#s, he sim!les *ay o %om!el everyo"e o be%ome a 7mer%ha" 7 #"'er his #"*ri e" la* is o %om!el him o a%%e! bills o& e(%ha")e as mo"ey. These %om!#lsory bills o& e(%ha")e are "o"e o her ha" he Fe'eral Reserve No es, series 23@8, 23@3, a"' 234;, le)ali?e' as 7mo"ey7 o" Mar%h 29,23@9, bei") also irre'eemable !er!e #al a""#i y bo"'s, or small %ha")e &or )over"me" se%#ri ies. The basis &or his a% io" *as lai' i" he Fe'eral Reserve A% *hi%h ma0es %ommer%ial !a!er he &#"'ame" al 7la*&#l mo"ey7 *hi%h &orm he reserves o& member ba"0s. This mea"s !riva e "o es, a%%e! a"%es, a"' bills o& e(%ha")e, be%ome la*&#l mo"ey b# "o le)al s!e%ie, &or s!e%ie 'e&ea s he s*i"'le by 'es royi") %re'i a"' 'eb . I li0e*ise mea"s %he%0s. Th#s, by he 'aily !assi") o& Fe'eral Reserve No es a"' e"'orsi") o& %he%0s a"' he #se o& Cre'i Car's, every i"'ivi'#al, *ha ever his %alli"), be%omes a %re'i mer%ha" s#b$e% o s#mmary $#')me" #"'er he !riva e %#s om o& mer%ha" s, *hose !rimary r#le is he liabili y o i"&orm o" o"esel& #!o" o"eAs o*" a% s, )oo's, a"' 'eali")s. No*, his La* Mer%ha" has "ever bee" he !#bli% !osi ive la* o& a"y !ar i%#lar %o#" ry, b# he mere !riva e, %o"se"s#al, vol#" ary !ra% i%e o& i" er"a io"al mer%ha" s a"' ra'ers. Al ho#)h !ar ially i"%or!ora e' i" o vario#s #"i&orm s a e %o'es o" "e)o iable i"s r#me" s, m#%h o& i is "o "e%essarily i" !ri" . I"'ee', some o& i %ha")es *i h *ome"As &ashio"s. Th#s, i is his #"*ri e" !riva e la* o& *hi%h he $#')es are bo#"' o a0e 7$#'i%ial "o i%e7 i" heir r#li")s. The !ri"%i!le bei") ha , *ha ever else %a" be !lea'e', a"y s#!!ose'ly "a io"al la* o& %ivil %o"s i # io"al ri)h %laime' viola e' %a" be r#le' imma erial o" he basis o& his #"see", #"s!o0e", im!ri" e', 7"a #ral7 la*. I "ever "ee's o be )ive" i" evi'e"%e, a"' al*ays &avors he !ra% i%i") 7mer%ha" 7 %omm#"i?er as a)ai"s he B#asi 7mer%ha" 7 %i i?e" *ho has"A he &ai" es i'ea ha he $#')e sees him as a mer%ha" , #"able o #"'ers a"'.

This is he 7la*7 #"'er *hi%h a" i,Comm#"is %omm#"i?ers !romo e 7*i h +o'As hel!, a be er *orl'7 o& Mer%a" ile S#!er Re!#bli%, i" *hi%h he 7!erso"al res!o"sibili y7 o& sel&,i"%rimi"a io" *ill be he &#"'ame" al r#le, !ro e% e' #"'er he 2; h Ame"'me" . I"%or!ora io" o& his La* Mer%ha" i" o he E")lish %ommo" la* by Lor' Ma"s&iel' s#bseB#e" o 245@ se o&& he Ameri%a" Revol# io". This !roves ha i has "ever bee" a !ar o& o#r o*" la*, eve" by 'e%ei . These are he iss#es o& la* #!o" *hi%h *e %a" re%over o#r !riva%y, o#r &ree'om, o#r "a io", a"' o#r mo"ey a !ar. The &ollo*i") !a)es !rese" 'e aile' 'is%#ssio"s o& hese iss#es, a"' li0e*ise !rese" ma"y obvio#s bases o" *hi%h 'e&e"ses a"' a a%0s i" he %o#r s %a" very e&&e% ively be ma'e. The %o" e" o& hese !a)es, a he leas , *ill &or he &irs ime !rovi'e #s *i h a &oo i") eB#al o ha o& o#r orme" ors a"' !erha!s eve" more a'va" a)eo#s. The a# hor *as &or several years a" e'i or a"' ra"sla or o& he %ommer%ial %o'es o& ma"y Wes E#ro!ea" "a io"s, a"' mos So# h a"' Ce" ral Ameri%a" "a io"s, a"' o& he %or!ora e i"%ome a(es o& he same, i"%l#'i") %o#r %ase 'e%isio"s. The s#bs a"%e o& he o# li"e o& his ori%al ba%0)ro#"' o" he !a)es imme'ia ely &ollo*i") sho#l' &irs be *ell 'i)es e' be&ore !ro%ee'i"). The mos 'isas ro#s %o#rse *e %a" !#rs#e is o blame o#r !li)h o" 7 he +over"me" 7 *he", as *ill be see", i is !riva e i" eres s alo"e *hi%h are e"slavi") #s i" he "ame o& &ree'om. 6ill Avery Fra"0li", Ne* -or0 C#ly ;, 234@

OUTLINE AND HISTORICAL BACKGROUND OF THE ARGUMENT 2:25 . . . . . . Ma)"a Char a )#ara" ees &orei)" mer%ha" s he ri)h o ra'e &reely i" E")la"'. 2:;4 . . . . . . Hamb#r), L#be%0, a"' 6r#"s*i%0 be)i" he Ha"sab#"' or Ha"sea i% Lea)#e o& mer%a" ile %i ies i" +erma"y. 2:98.. . . . . . 22 E'*. I. S a # e o& A% o" 6#mel. Firs la* o e"able .&orei)"/ mer%ha" s o %olle% 'eb s by s#mmary !ro%ess a"' arbi rary sei?#re o& !ro!er y a"' im!riso"me" . Ce*s are s!e%i&i%ally e(%l#'e' &rom he be"e&i s o& his la*. 2889 . . . . . . E'*ar' III )ra" s e( e"sive !rivile)es o he Ha"sa i" re #r" &or &#"'s o re'eem his D#ee"As $e*els !a*"e' o mo"ey mer%ha" s i" Colo)"e. 2585 . . . . . . Coh" Calvi"As I"s i # es o& he Chris ia" Reli)io" )ives he blessi")s o& he re&orme' reli)io" o he a0i") o& i" eres a"' #s#ry. 2585 . . . . . . He"ry EIII sei?es he mo"as eries. 2585 . . . . . . Ma%hiavelliAs The Pri"%e.

2599 . . . . . . S!a"ish Arma'a la#"%he' by D# %h a"' S!a"ish mer%a" ile i" eres s a)ai"s E")la"' is *re%0e' by s orms. 2539 . . . . . . Eli?abe h I e(!els he Ha"sea i% mer%ha" s &rom E")la"' &or re&#si") o )ra" re%i!ro%al !rivile)es o E")lish ra'ers. Closes he S eelyar'. They re ire o Hamb#r). 2@>;.. . . . . . Cames I o& E")la"'. The La* Mer%ha" e&&e% ively i"%or!ora e' i" o he %ommo" la* o& E")la"'. This is esse" ially he la* o" "e)o iable i"s r#me" s a"' i"s#ra"%e ere% e' o# o& he Civil La*. 2@29,;9 . . . .Reli)io#s *ars 'es roy millio"s i" +erma"y. Nor her" mer%a" ile %i ies es%a!e har'ly o#%he'. 2@;3.. . . . . . Charles I m#r'ere' &or o!!osi") he mer%a" ile i" eres s o& he Ci y o& Lo"'o". Crom*ell a"' %liB#e. 2@99 . . . . . . D# %h a"' +erma" mer%a" ile i" eres s !la%e William II o& ora")e o" he 6ri ish hro"e. 242; . . . . . . Ho#se o& Ha"over a"' 6r#"s*i%0 a%B#ires he 6ri ish hro"e i" he !erso" o& +eor)e I, &a her o& +eor)e II, a"' )rea )ra"'&a her o& +eor)e III. 245@.. . . . . . Lor' Ma"s&iel' be%omes Chie& C#s i%e o& he Fi")As 6e"%h, ma0e vas a''i io"s o Civil La* i" o he Commo" La*. Es!e%ially #r"e' he a% io" o& ass#m!si .&or 'eb / i" o a" eB#i able a% io", h#s 'e"yi") rial by $#ry o" *ri s o& assis a"%e. 2445 . . . . . . Revol o& Ameri%a" %olo"ies a)ai"s 6ri ish mer%a" ile la* 'erive' &rom Lor' Ma"s&iel'As 'e%isio"s. 292> . . . . . . Lea)#e o& Hamb#r), L#be%0, a"' 6reme" em!orarily bro0e" by Na!oleo". 29;: . . . . . . Case o& S*i& v. Tyso" 'e%lares he mer%a" ile la* .mer%ha" / o be %ommo" la* o& he ="i e' S a es, h#s )#ara" eei") rial by $#ry #"'er he Seve" h Ame"'me" i" he =.S. Co#r s i" %ommer%ial 'is!# es. I" e&&e% )ra" e' a !re&ere" ial &or#m i" Fe'eral Co#r *here relie& mi)h "o be ha' i" a S a e Co#r . 29@2,@5 . . . .Ameri%a" Civil War. 29@3 . . . . . . Cay +o#l' a em! s o %omer )ol'. Mor)a" o he res%#e. 294> . . . . . . Pri"%i!le o& limi e' liabili y &or %or!ora e %ommer%ial i" eres s e" ers !ra% i%e. Pri"%i!les o& Calvi" a!!lie' o ra'e. 294> . . . . . . Hamb#r), L#be%0, a"' 6reme" a)ai" be%ome i"'e!e"'e" . 294> . . . . . . Pr#ssia 'e&ea s Fra"%e, e(a% s a" i"'em"i y o& o"e billio" 'ollars )ol'. 293> . . . . . . Sherma" A" i,Tr#s A% ma0es ille)al all %ombi"a io"s i" res rai" o& ra'e i" i" ers a e or &orei)" %ommer%e. Does "o a!!ly o ma"#&a% #ri") mo"o!olies. E&&e% ively ma0es every %i i?e" a 7mer%ha" 7 eve" #!o" his o*" !erso" #"'er he %ommer%e %la#se. 293> . . . . . . ="i e' S a es a'o! s he )ol' s a"'ar'. 23>> . . . . . . ="i e' S a es %eases %oi"a)e o& he )ol' 'ollar. 23>4 . . . . . .Ro%0e&eller,Harrima" la#"%h *ar o" Mor)a" i" eres s. Pa"i%. 23>9 . . . . . . Ro%0e&eller a"' Al'ri%h see0 o# Warb#r)s o& Hamb#r) o se #! he Fe'eral Reserve. 2328 . . . . . . Crea io" o& Fe'eral Reserve a"' o& so,%alle' I"%ome Ta(, o)e her he bases I &or he #"iversal 'eb ,a"',%re'i &ra"%hise #!o" *hi%h !riva e i"'ivi'#als %a" be %om!elle' o i"&orm o" hemselves as 7mer%ha" s.7 232; . . . . . . Clay o" A% rei"&or%es he Sherma" A% . E(em! s 7"o",!ro&i 7 or)a"i?a io"s &rom all a" i, r#s la*s, i.e. &o#"'a io"s. 232;,29 . . . .Worl' War I. Ro%0e&eller,+erma" %liB#e 'e&ea s Mor)a",Ro hs%hil' %liB#e, la#"%h %am!ai)" o %hemi%ali?e a"' !las i%i?e he *orl' i" o sy" he i% li&e.

2325 . . . . . . Case o& 6r#shaber v. ="io" Pa%i&i%, rei era es he "o",liabili y o& !riva e i"'ivi'#als &or he so,%alle' I"%ome Ta(. De%lares )e"#i"e 7I"%ome Ta(7 o be a 'ire% a( "o a# hori?e' by he 2@ h Ame"'me" , a"' ha 2@ h Ame"'me" is s#!er&l#o#s be%a#se Co")ress alrea'y ha' !o*er o a# hori?e he a( i" B#es io", "amely a" e(%ise a( o" %or!ora e or $#ris i% !rivile)es meas#re' by he amo#" o& i"%ome !ro'#%e' by he e(er%ise o& he !rivile)e. 2324 . . . . . . 6olshevi0 Revol# io". La#"%he' o &as e" he +erma" yo0e o" R#ssia a"' %rea e a !erma"e" eleme" 7hos ile7 o he =.S. a"' he &ree *orl'. Pa",+erma"ism a *or0 #"'er %over o& !a",Savism o %o"B#er bo h =SSR a"' =SA #"'er he 6ri ish &la). 23:3 . . . . . . Crash i"'#%e'. +erma"y a"' Ro%0e&ellers i)h e" )ri! o" =.S. Coal a"' !e role#m %ar els ma0e &irs ,ha"' a)reeme" s o" *orl' mar0e s. Ro%0e&ellers,I.+. Farbe" allia"%e. 2389 . . . . . . Case o& Erie R.R. v. Tom!0i"s reverses S*i& v. Tyso", 'e%lari") here is "o )e"eral &e'eral %ommo" la*, h#s 'es royi") ri)h s o "ormal $#ry rial as )#ara" ee' by S*i& . Also allo*s $#')e o )ive $#'i%ial "o i%e o he i"'is%rimi"a e a"' #"*ri e" 7%#s om o& Mer%ha" s7 as 'omes i% r#le o& la*, e.). !#ber y ri es i" Samoa. Hi"'erli'er %ase 'e%i'e' he same 'ay. 2383 . . . . . . W.W.II. Re"e*al o& Ro%0e&eller allia"%e *i h Na?i L+. Farbe". 23;2 . . . . . . 7The Presi'e" a"' he Prime Mi"is er7 by he A la" i% Char er, ma'e o" he hi)h seas, arro)a e o hemselves he %a!a%i y o )ra" 7h#ma" ri)h s7 i" he 7Fo#r Free'oms7 o he !eo!les o& he =.S., 6ri ai" a"' he *orl'. Ma0es all 7Civil Ri)h s7 e&&e% ive o"ly i" e"&or%eme" o& 7"a #ral la*7 o& s#mmary $#')me" #"'er he La* o& Mer%ha" s, a"' ha !ro e% e' by he =N rea ies o be ma'e i" 23;5. 23;:.. . . . . . Case o& DAOe"%h, D#hme G Co. v. FDIC e"lar)es s%o!e o& Erie R.R. a"' Hi"'erli'er. 23;8.. . . . . . Case o& Feasley G Ma eso" v. Ro he"sies &#r her ra i&ies 6r#shaber. 23;8 . . . . . . I"%ome Ta( *i hhol'i") be)i"s o" C#ly 2. 23;5 . . . . . . =N Trea y #r"s all =.S. %o#r s i" o ra'i") !i s a"' %o#r s o& he s a!le #!o" he #"*ri e" !ra% i%e o& mer%ha" s. 23;5 . . . . . . Ro%0e&eller,Na?i a(is la#"%hes !ho"y 7Col' War7 a F#l o", Misso#ri, i" s!ee%h by Wi"s o" Ch#r%hill o" he 7Iro" C#r ai".7 23;4 . . . . . . Israel %rea e' as 'iversio"ary 7Hio"is 7 !a*" o& +erma"y o %o"%eal r#e Calvi"is Hio"ism o& Pa",+erma"ism #"'er he Fo#r h Rei%h b#il'i") o" Ameri%a" soil. Re', lily, Whi e, a"' 6l#e,sa"s,6la%0,a"',Ce*. 2354 . . . . . . =.S. so#r%es la#"%h Sovie 7s!# "i07 o %om!el =SA i" o !ho"y %om!#lsive 7s!a%e ra%e.7 Sovie s lose by 'esi)". 23@4 . . . . . . :5 h Ame"'me" %ha")es Ei%e,!resi'e"%y i" o a 6oar' o& Dire% ors o& %or!ora e Ameri%a *hi%h may 'ismiss he Presi'e" a *ill. Presi'e"%y "o* e&&e% ively a Cha"%ellorshi! i" e(e%# ive eB#i y. 23@9 . . . . . . Wi h'ra*al o& 2s )ol' re'eemabili y &or =.S. %#rre"%y by P#bli% La* 3>,:@3 lo%0s all =.S. %i i?e"s i" o s a #s o& !erma"e" &e#'alis i% 'eb orI%re'i or o" he 7"a #ral la*7 o& s#mmary $#')me" hro#)h #se o& "e)o iable i"s r#me" s i" he &orm o& irre'eemable !er!e #al a""#i y bo"'s .FRNAs/, %he%0s, a"' %re'i %ar's. This is he #"iversal %re'i , a"',i"s#ra"%e &ra"%hise #!o" *hi%h he e"&or%eme" o& he %o'e o& he IRS is base', i"%l#'i") he So%ial Se%#ri y )ro#"'s. 2348 . . . . . . -om Fi!!#r War. Ro%0e&eller !e role#m a"' e"er)y )a") la#"%hes Worl' War III a)ai"s !eo!les o& =.S. a"' 6ri ai", i"s i # i") mass ria)e amo")s all !eo!les

.se!ara io" o& he 7re!roba e7 #"able o 'e&e"' hemselves &rom 7+o'As Peo!le7 o& he E((o"/, !romo i") &ra#'#le" e"er)y %risis. Ro%0e&eller,+erma" eleme" be)i"s &i"al im!erialis i% assa#l o" all remai"i") &ree a"' i"'e!e"'e" e" er!rise i" he *orl', o s#b$e% i o a !yrami' o& mi"im#m i"ves me" !riva e i" erlo%0i") %or!ora e &e#'alis i% %re'i ,&ra"%hises or !rivile)es. 2348 . . . . . . =.S. S#!reme Co#r o" abor io", #"'er %olor o& La* Mer%ha" , allo*i") *ome" he 7h#ma" ri)h 7 o& rea i") heir bo'ies as *ares a"' %ommo'i ies. So he #"bor", *ho are "o %o"si'ere' o be 7h#ma"7 or have 7h#ma" ri)h s7 be&ore &o#r mo" hs. E&&e% ively le)isla es he ma erialis i% ra io"ale es ablishme" . Le)ali?es basis &or mass,m#r'ers #"'er %olor o& 7"a #ral la*,7 &#r her se!ara i") he millio"s o& he 7Re!roba e7 &rom he ha"'&#l o& sel&,a!!oi" e' 7Sai" s7 *ho be%ome he 7&i es 7 by "i%ely s#rvivi") heir o*" *ars a"' !oli i%al assa#l s. 234@.. . . . . . Ral!h Na'er !ro!oses ha he &e'eral )over"me" a0e over he &ra"%hises o& he !e role#m %om!a"ies o# o& he ha"'s o& he s a es. PREFATORY MEMO ON THE LAW MERCHANT The 2@ h Ame"'me" a"' Fe'eral Reserve bo h !asse' i" 2328, he same year o& revisio" o& he Fe'eral EB#i y R#les. P#r!ose o& he Fe'eral Reserve .No es/J To s#b$e% all i" ers a e %ommer%e o he r#le o& EB#i y .overr#li") S*i& v. Tyso" o& 29;:/ #!o" %laim ha here is "o &e'eral %ommo" la* .e(%e! La* Mer%ha" #"'er FRNAs a"' Na io"al 6a"0s/, 7%ommo" la*7 K la* o& !riva e !ro!er y )ro#"'e' i" la"' as e(!o#"'e' i" he %ase 'e%isio"s. S a # e la* is 7%ivil la*.7 Th#s, he Robber 6aro"s a%B#ire' he mea"s o& eva'i") he Co"s i # io"al i"$#"% io" o& Ar i%le I, se% io" 2>, %la#se 2, o" he s#b$e% o& e"'er by he S a es. I" 2389 hey e( e"'e' i by mea"s o& he Erie R.R. 'e%isio". 6y i , he #"*ri e" La* Mer%ha" *as a0e" o# o& he %ommo" la* . h#s 'e&ea i") he Seve" h Ame"'me" / a"' !# i" o EB#i y, *here i %o#l' be 7$#'i%ially "o i%e'7 i" a"y $#ris'i% io". La* Mer%ha" K S#mmary C#')me" K 7La* o& Na #re7 . oo h a"' %la*/. FRNAs 'e%lare' la*&#l by Milam, *hi%h rei era e' he le)al e"'er %ases o& 299; .C#illiar', &or e(am!le/. The mea"i") is ha he Fe'eral +over"me" %a" o# la* %ommo" la* o" he Fe'eral level a"' re!la%e i *i h a" EB#i y e"&or%eable #!o" s a # es a"' a "e* ma""er o& !lea'i") .7%o"&essio" a"' avoi'a"%e7 i"s ea' o& he 'em#rrer/, h#s #r"i") he %o#r s i" o ra'i") a"' bar)ai"i") !i s, &ormerly %alle' mer%ha" %o#r s o& he s a!le. .!riva e/. 6# he Fe'eral +over"me" %a""o .by Ar i%le I, se% io" 2>, %la#se 2/ o# la* he s#bs a"%e o& he %ommo" la* o& he several s a es a"' h#s re)#la e %ommer%e *i hi" he S a es by %om!elli") eB#i able mo"ey .%ommer%ial !a!er, "e)o iable i"s r#me" s/ i" e(%ha")es be *ee" S a es a"' %i i?e"s o& S a es. Nor %a" he S a es. The bes he Fe'eral +over"me" %a" 'o is o %om!el he a%%e! a"%e o& !a!er be *ee" i"'ivi'#als. Loo0 %are&#lly a yo#r S a e Civil Pra% i%e La* a"' R#les. The 7La*7 is he La* o& he S a e< he R#les are he EB#i y o& he La* Mer%ha" . Tha As *here *eAve )o hem.

Th#s, he sim!les !lea i" S a e a( %ases, as i" Fe'eral, is I"abili y o Per&orm. 6# yo# ha' be er 0"o* *hy. This boo0 ells *hy. No Fe'eral la* %a" o# la* he %ash basis o& he la* im!ose' o" he S a es by Ar i%le I, Se% io" 2>. I" he same %o""e% io", he &e'eral +over"me" %a""o o#%h allo'ial la"' i les i" he S a es, "or #r" eB#i able mor )a)es i" o le)al o"e by ma)i%. ="'er he 7Commer%e %la#se,7 Co")ress %a" re)#la e .i" EB#i y by FRNAs/ i" ers a e %ommer%e .i.e. i" er"a io"al oo/ i" he "ame o& %o"ve"ie"%e, b# i %a""o o#%h he 2882 a"' o hers. THE SMASHING OF THE STATE Pa rio s a"' Ta(,Pro es ers %o"s a" ly lame" he a% s o& 7Oa h,6rea0ers7 a"' 7La*,6rea0ers7 i" every 0i"' o& !osi io" *ho, o heir mi"', s#bver he Co"s i # io". They %laim ha a vi%io#s +over"me" is la*lessly 'es royi") all o#r &ree'oms i" or'er o !romo e eve" more yra""i%al 7+over"me" ,7 smo heri") !riva e e" er!rise. -e , he e(a% o!!osi e is r#e, &or he La* !romo e' a"' !ro e% e' by all hese 7Oa h,6rea0ers7 a"' ALa*,6rea0ers7 is he !#res la* o& !riva e e" er!rise here is. This 7La*7 is he !riva e la* o& mer%a" ile !ra% i%e !# i" o o!era io" hro#)h he Fe'eral Reserve a"' he I"%ome Ta(. These la*s *ere ra i&ie' i" he 'e%isio" o& he S#!reme Co#r i" 2389 i" he %ase o& Erie R.R. v. Tom!0i"s, *hi%h e&&e% ively 'e%lare' ha here is "o )e"eral &e'eral la* o& !riva e !ro!er y e(%e! he !riva e eB#i y o& mer%a" ile arra")eme" s )ro#"'e' i" bills a"' "o es, i"s#ra"%e, a"' ra"s!or a"' %alle' he La* Mer%ha" . These a% s e&&e% ively re!eale' he Ameri%a" Revol# io" #"'er %olor o& %la#ses 8> a"' ;9 o& he Ma)"a Char a. I is he Ma)"a Char a *hi%h has bee" i sel& em!loye' o 7smash he S a e7 re roa% ively #"'er !re e"se ha i *as ori)i"ally smashe' #"'er Fi") Coh" i" he &irs i"s a"%e. No*, he &a% o& he o!era io" o& his !riva e la* is 0e! a se%re by !eo!le *ho eB#a e 7%or!ora io"s7 *i h 7b#si"esses7 &or he sim!le reaso" ha he !ro!rie ors o& he Fe'eral Reserve .i"%l#'i") he IMF a"' he 6IS/ are "o B#i e ye rea'y o !rovo0e he !eo!le i" o he s ree s o have hem 7smash he s a e7 o&&i%ially i" a s a)e' 7Se%o"' Ameri%a" Revol# io",7 h#s %o"&i"i") 7'e $#re7 *ha has bee" he si #a io" 7'e &a% o7 &or a %o"si'erable ime. The mo'em %orollary o he %la#ses o& he Ma)"a Char a, *hi%h !re!are' he *ay &or he ="i e' Na io"s .!#rely %ommer%ial/ Trea ies a"' heir Ar i%les 55 a"' 5@, *as he 7A la" i% Char er7 o& he so,%alle' Fo#r Free'oms !rom#l)a e' o" A#)#s 25, 23;2, by 7 he Presi'e" a"' he Prime Mi"is er7 .F.D. Roosevel a"' Wi"s o" Ch#r%hill/ #!o" he hi)h seas. The $#')es have h#s be%ome a'mi"is ra ors o& !riva e %ommer%ial la* i" he role or %a!a%i y as $#')es o& he ol' %o#r s o& he s a!le< his o"e bei") %re'i a"' 'eb . This is he EB#i y #!o" *hi%h all o#r &e'eral s a # es are b#il , "amely he 7!rivile)es a"' imm#"i ies7 o& &ra"%hises i" %re'i %alle' 7Liber ies.7 These are he )ro#"'s #!o" *hi%h 7i"'ivi'#als7 are 7imm#"e7 &rom

!rose%# io" alo") *i h s*arms o& b#rea#%ra s, &or hey are "o really !#bli% serva" s .!erso"s/ b# !riva e i"'ivi'#als !ro e% e' #"'er he 2; h Ame"'me" . Ca" a"yo"e be so "aive as "o o believe ha he !om!o#s %eremo"y over he Ma)"a Char a .i" )ol' ye / a"' he "e* 7Liber y 6ell7 o" C#ly ;, 244@, *as "o s ill a"o her hoa( o" he Ameri%a" !eo!le #"'er he %o"%eale' boas ha )over"me" %o" rol over %ommer%ial i" eres s is really "o"e(is e" , a"' ha i" &a% i is vas !riva e i" eres *hi%h o*" he +over"me" . This is he !lai" &a% o& he ma er. We have ha' "o 7+over"me" 7 si"%e he i"s i # io" o& he !riva e Fe'eral Reserve a"' i s !riva e %olle% io" a)e"%y, he IRS. S#%h is he hoa( %are&#lly %o"%eale' a"' !romo e' by %er ai" so,%alle' 7!a rio i%7 or)a"i?a io"s *hi%h %o"s a" ly ra" a)ai"s 7 he +over"me" 7 or 76i) +over"me" ,7 *he" *e have"A ha' a real )over"me" &or years< "o hi") b# !riva e !l#"'er #"'er he a#s!i%es o& he i" er"a io"al .m#l i"a io"al/ %ommer%ial i" eres s *hi%h have 'evo#re' he *eal h o& he *orl' a"' i s hel!less !eo!le hro#)h he o% o!#s o& he ="i e' Na io"s. Nor *ill he +over"me" , as i is %alle', 7+e =.S. o# o& he =N #" il i s#i s he %ommer%ial i" eres s o& hose *ho !romo e he slo)a" a"' *ho *ish o ma0e every las ribe o" ear h rib# aries o hem a"' %om!#lsory %o"s#mers o& heir sy" he i% !ro'#% s.7 O"e *o"'ers, 'oes +over"me" e(is o !ro e% #s &rom %ommer%ial i" eres s, or 'o %ommer%ial i" eres s e(is o !ro e% #s &rom +over"me" 1 Is !riva e e" er!rise he same as &ree e" er!rise1 O"e o& he a"%illary hoa(es !romo e' by hese mo"o!olis i% %ommer%ial a"' !er%e" ile i" eres s is he re!eal o& he so,%alle' I"%ome Ta(, *hi%h is e%h"i%ally a #"i&orm a( levie' o" he 7!rivile)e7 o& 'oi") b#si"ess i" a %or!ora e %a!a%i y .*i h !er!e #al e(is e"%e , a"' limi e' liabili y/ %alle' a 7&ra"%hise.7 Priva e i"'ivi'#als have &or some ime bee" s#b$e% e' o he !e"al ies o& his a( os e"sibly o" he )ro#"'s o& bei") be"e&i%iaries o& he limi e' liabili y o& hese &ra"%hise a(es %alle' i"%ome a(es. Priva e i"'ivi'#als i" all o her %alli")s .*i h "o 7!rivile)es7/ s#b$e% e' o his a( are bei") !erse%# e' i" i"%reasi") "#mbers *i h he hi''e" !#r!ose o& )e i") hem o *or0 &or re!eal o& a a( *hi%h *as "ever la*&#lly lai' o" he i"'ivi'#als i" he &irs !la%e, b# o" he be"e&i s o& %or!ora e i" eres s. Th#s, he mer%a" ile i" eres s *hi%h have s#b$e% e' #s o he arbi rary r#le o& he La* Mer%ha" , "o* *ish o #se !eo!le "ever liable &or he a( o be a !ar o& he )ra" i") o& o al a( imm#"i y &or %ommer%ial %or!ora io"s %rea e' by he several S a es, a"' imm#"i y &rom he "e%essi y o& re!or i") o" heir a% ivi ies a"' o!era io"s. F#r her !ro e% io"s are a&&or'e' hem by he I" er"a io"al Or)a"i?a io" Imm#"i ies A% . =!o" re!eal o& he 2@ h Ame"'me" , mer%a" ile %or!ora io"s *ill be%ome absol# ely #" o#%hable by a"y vi% im. Th#s, he 7La*7 o& he La*less, he La* Mer%ha" , is "ei her more or less ha" he ra* %o"ve"ie"%e o& he mer%a" ile i" eres s i" %om!elli") he ma(im#m *orl',*i'e %o"s#m! io" o& heir !ro'#% s. This s%heme is &#r her !romo e' #"'er s#%h 'omes i% la* as he 7%ommer%e %la#se7 o& he Co"s i # io" .Ar i%le I, Se% io" 9/, as he Sherma" A% o& 293> .:@ S a . :>3/. See also =.S. v. A''ys o" Pi!e Co ., ;45 F=.:.2:42.

7Th#s i is lai' 'o*" by boo0s o& a# hori y ha as a ma" 'ra*s a bill o& e(%ha")e, he is, &or he !#r!oses o& ha bill, a mer%ha" .7 Comy"s, Di)es < Mer%ha" , A.l. I THE MAGIC OF THE FRN As s #!e"'o#s as Cerome DalyAs vi% ory *as i" his &ore%los#re &i)h *i h he Mo" )omery 6a"0, a"' as s #!e"'o#s as he %o#ra)e o& he $#ry i" re"'eri") he ver'i% hey 'i', a"' o& he $#')e i" his $#')me" , s ill eve" more s #!e"'o#s is he &a% ha he 6a"0 'e%li"e' o )o o a!!eal a& er C#')e Maho"ey ha' re$e% e' he e"'er o& he *o Fe'eral Reserve No es. S#rely hey %o#l' "o have bee" a&rai' o& losi"). A"' i *o#l' have bee" a" easy ma er &or he 6a"0 o !ay he &ee i" silver %er i&i%a es or i" ="i e' S a es No es or eve" i" %oi". The B#es io" is, *hy sho#l' hey 'e%li"e o 'o so1 A& er all, heir s a"' a"' heir %ase *ere %lear, a"' i& C#')e Maho"ey ha' erre' or he $#ry ha' erre', *ell, he %o#r s a he hi)her levels *o#l' s#rely )e he 6a"0 o&& he hoo0 a"' !rove i ri)h , *ha ever e"'er hey ma'e o he C#')e. So, he", here m#s be some hi") i" ri"si% abo# he Fe'eral Reserve No es e"'ere'< some hi") abo# he "o es hemselves, !ar i%#larly si"%e Mar%h 29, 23@9, *hi%h )ive hem a !o*er "o !ossesse' by silver %er i&i%a es, say, or ="i e' S a es No es. 6y he Co")ressio"al Coi" Resol# io" o& C#"e 5, 2388, he silver %er i&i%a es be%ame le)al e"'er, *hi%h hey ha' "o bee" be&ore, ho#)h alrea'y la*&#l mo"ey o be)i" *i h, bei") i" er%ha")eable *i h silver, a"' bei") 7!a!er silver7 a"' imme'ia ely i" er%ha")eable o" 'ema"'. The ="i e' S a es No es *ere also la*&#l mo"ey a"' re'eemable i" s!e%ie o" !rese" a io". Nei her he silver %er i&i%a es "or ="i e' S a es No es bore i" eres , obvio#sly, bei") 7la*&#l mo"ey7 i" ri"si%ally o& hemselves. A"' so, i is ass#me', ha he Fe'eral Reserve No es, series 23@8 .as *ell as he la er series 23@3 a"' 234>, o" #" il Mar%h 29, 23@9, *ere h#s !ayable, or a leas so mar0e'. -e i&, by he Fe'eral Reserve A% , every Fe'eral Reserve No e, *ha ever he series, is a 7le)al e"'er,7 is i also 7la*&#l mo"ey 17 Treas#ry o&&i%ials "o* ell #s ha bo h e(!ressio"s mea" he same hi"). Ta0e i or leave i , *ha ever bears he 7le)al e"'er7 B#ali y is 7la*&#l mo"ey.7 -e as easily as hey %o#l' have 'o"e *i h "o a!!are" $eo!ar'y o he s#bs a"%e o& heir 'e&e"se o DalyAs asser io"s a"' he $#ryAs &i"'i")s, he 6a"0 'e%li"e' o e"'er a"y hi") b# he Fe'eral Reserve No es. We ri)h ly as0 o#rselves 7Why17 Well, *hy i"'ee'1 Wha ma0es hem so s!e%ial1 Le As see i& *e %a" &i"' o# *hy. A"' *he" *e 'o, *e *ill have he a"s*er o he so,%alle' I"%ome Ta( a"' ="i e' Na io"s Trea ies, a"' every o"e o& he a# hori ies *ill be &o#"'e' i" o#r o*" Co"s i # io"al la*< !erver e' !erha!s, b# , as o#r orme" ors say, 7as Ameri%a" as a!!le !ie.7 Well he", *ha is 7la*&#l mo"ey 17 Tha As a )oo' B#es io" o s ar . I has "ever bee" 'e&i"e' i" he s a # es, b# *e %a" s ill 'is%over *ha i is &rom i"'ire% so#r%es. A Fe'eral Reserve No e as *e 0"o* i , ho#)h al*ays le)al e"'er, 'i' "o be%ome absol# e 7la*&#l mo"ey7 #" il Mar%h 29, 23@9. We remember ha 7la*&#l mo"ey7 !rior o he Civil War, ="i e' S a es No es .re',seal "o es/ be%ame 7la*&#l mo"ey.7 Tha is, he eB#ivale" o& %oi", "o a s#bs i # e, b# he

eB#ivale" . They *ere !ai' i" o %ir%#la io" by he )over"me" a"' *i ho# i" eres . They *ere "o le" i" o %ir%#la io", b# o# ri)h !ai'. Th#s, *hile hey *ere 7la*&#l mo"ey,7 ba"0"o es "ever *ere. They *ere "o &or he reaso" ha , al ho#)h la*&#l mo"ey may be !riva ely le" a i" eres , i is he "o",i" eres beari") B#ali y ha ma0es he la*&#l mo"ey as %#rre"%y *i ho# a !remi#m or 'is%o#" . La*&#l mo"ey may be le" a i" eres , b# is "o iss#e' a i" eres . Th#s, le)al e"'er may ei her bear i" eres , or i may "o , be&ore bei") le" %ommer%ially a !riva e i" eres . Fe'eral Reserve No es o'ay 'o "o bear i" eres , a%%or'i") o %orres!o"'e"%e *i h he Fe'eral Reserve 6a"0 o& Ne* -or0. Th#s, ba"0"o es are o"ly le)al e"'er re'eemable i" la*&#l mo"ey. La*&#l mo"ey may be 'e&i"e' !ar ially as a %ir%#la i") me'i#m o& e(%ha")e iss#e' *i ho# i" eres , a"' re!rese" i") s a"'ar' s!e%ie, a"' !ayable o" 'ema"'. S#&&i%e i o say ha , #! #" il 2328, 7la*&#l mo"ey7 *as re%o)"i?e' as *ha ever mi)h %om!rise he reserves o& a Na io"al 6a"0. Tha *as )ol' %oi", silver %oi", )ol' a"' silver %er i&i%a es, Treas#ry No es, a"' ="i e' S a es No es. A"' *ha ha!!e"e' i" 23281 Wha else, a& er 2328, besi'es he above, %o#l' %om!rise he reserves o& a Na io"al 6a"01 Some hi") "e* *as a''e' %alle' Fe'eral Reserve No es. Wha *as s#!!ose' o be he hear o& he Fe'eral Reserve Sys em, ha is, %ommer%ial !a!er or *ha ei her are or amo#" o !riva e obli)a io"s o& 'eb , all 0i"'s o& lo"), erm or shor , erm !riva e obli)a io"s, obli)a io"s #!o" *hi%h %re'i i" le)al e"'er *as )ra" e' or *hi%h %o" ra% e' !ayme" i" 7la*&#l mo"ey7 a he e"' o& he li"e o& "e)o iabili y "o* oo0 o" a %a!a%i y o& %leari") ho#se %er i&i%a es $#s as Fe'eral Reserve No es. No*, his %ommer%ial !a!er, as i *as %alle', has al*ays bee" %o"si'ere' 7as )oo' as )ol'7 #!o" he mer%ha" As *or' i" )e"eral %ommer%ial %ir%les *he her 'omes i% or i" er"a io"al. So, oo, has he *or' o& a"y mer%ha" , 'omes i% or i" er"a io"al, amo") hemselves, a"' base' #!o" i , bee" %o"si'ere' 7as )oo' as )ol'.7 Tha is, #l ima ely !ayable i" har' mo"ey a he e"' o& he li"e, o" he same !ri"%i!le as a bill o& e(%ha")e. Here, !are" he i%ally, *e see he mea"i") o& he s#mmary $#')me" . This "o orio#s eB#i able 'evi%e, !assi") as le)al, is he mea"s by *hi%h %re'i ,mo"ey %a" be %o"ver e' i" o 7la*&#l mo"ey7 a"' be %om!elle' o& a%%e! a"%e as s#%h. Si"%e he s#mmary $#')me" a%%om!lishes he 'ema"' !ayme" o& s!e%ie or i s eB#ivale" i" a")ible !ro!er y, i %a#ses he 7'is!a %h o& mer%ha" s.7 O" his basis a"' &or his !#r!ose 'i' %ommer%ial !a!er be%ome 7la*&#l mo"ey7 #"'er he Fe'eral Reserve, ha is, mere %hoses,i",a% io" %o#l' be %o"si'ere' he eB#ivale" o& a")ible s!e%ie. No*, he s ra")e hi") is ha he !ra% i%es o& mer%ha" s a"' ra'ers have "ever bee" base' o" he la* o& a"y !ar i%#lar "a io" or lo%ali y, or bee" 'erive' &rom s#%h. O" he %o" rary, hey *ere solely a"' s ri% ly he !ra% i%e o& !riva e mer%ha" s. A"' al ho#)h i *as "ever a"y si")le "a io"As 7la*,7 he !riva e %ommer%ial !ra% i%e o& mer%ha" s *as 'i)"i&ie' *i h he i le o& 7la*7 mer%ha" . As i *as s ri% ly !riva e %#s om a"' !ra% i%e, i %o#l' "o be e"&or%e' i" he 'omes i% %o#r s o& a"y hos %o#" ry i"%l#'i") !ar i%#larly +rea 6ri ai", a"' he reaso" *as ha i *as "o imme'ia ely &o#"'e' i" har' mo"ey, b# o"ly #!o" *ha are )e"erally %alle' 7"e)o iable i"s r#me" s7. I"'ee', as lo") as i"'ivi'#al %o#" ries !reserve' heir "a io"al mo"eys i" har' %oi", %ommer%ial !ra% i%e i" %ommer%ial !a!er %o#l' "o 'ema"' heari") i" he %o#r s i" a"

a% io" &or 'eb .%alle' a" ass#m!si /. Nor %o#l' i be e"&or%e' i" he %o#r s o& E")la"' #" il a %er ai" )e" lema" "ame' Lor' Ma"s&iel' be%ame Chie& C#s i%e o& he Fi")As 6e"%h o +eor)e II i" 245@, %omme"%i") a heavy o#r o& '# y i" 'eali") i" %ommer%ial eB#i y. II LAW AND EQUITY The &#"'ame" al 'i&&ere"%e be *ee" La* a"' EB#i y is ha La* is )ro#"'e' i" or 'erive' &rom )#ara" ee' allo'ial la"' i les, *hile eB#i y is base' o" e"&or%eme" o& 7"a #ral7 ri)h s *hi%h he %ommo" la* 'oes "o "e%essarily !rovi'e &or. Tha is a" overall sim!li&i%a io", b# 'is%loses *ha is esse" ially a iss#e. La* 'eals i" s#bs a"%e, EB#i y i" !o e" iali y #!o" he s#bs a"%e. I %o#l' be sai' ha La* 'eals *i h he reali y o& he s#bs a"%e, *hile EB#i y 'eals i" o"ly he heory o& he s#bs a"%e. Wha has his o 'o *i h Fe'eral Reserve No es a"' *i h ="i e' S a es No es1 C#s his, "amely ha a Fe'eral Reserve No e, bei") a !riva e *ri e" obli)a io", is *ha *e %all %ommer%ial !a!er. Tho#)h i bears "o i" eres , i is base' o" obli)a io"s *hi%h 'o bear i" eres , a"' is "e)o iable, alle)e'ly iss#e' 7&or val#e re%eive',7 ha is &or ="i e' S a es se%#ri ies or o her 7la*&#l mo"ey7 o& he ="i e' S a es. They are 7as )oo' as )ol',7 b# o"ly be *ee" mer%ha" s. Th#s, o %om!el yo# o a%%e! hem, yo# yo#rsel& m#s someho* be ma'e a mer%ha" 'es!i e yo#rsel& or yo#r i"%li"a io"s. ="li0e ="i e' S a es No es, Fe'eral Reserve No es are "o he eB#ivale" o& s!e%ie, si"%e i is a %ommer%ial obli)a io", a"' "o i" a"y *ay !ayable i" s!e%ie o i" erme'iaries. They %a" be re'eeme' o"ly i" ="i e' S a es 6o"'s. III CONFISCATION OF REAL PROPERTY I so ha!!e"s ha he $#')es are bo#"' by Co"s i # io"al %la#ses a"' =N rea ies o a0e 7$#'i%ial "o i%e7 o& his 7"a #ral7 La* Mer%ha" , *hi%h has bee" o"ly !ar ially *ri e" i" o %ommer%ial a"' mer%a" ile %o'es, or %o'es o& la*, o& he s a es, or o& #"i&orm %o'es o& la* o" "e)o iable i"s r#me" s. There are several reaso"s &or his, *hi%h m#s be #"'ers oo' &or #s o !#rs#e o#r ar)#me" . The r#le o& all r#les o& his La* Mer%ha" , his la* s#!reme o& 7!riva e e" er!rise7 is, *ho ra'es *i h a mer%ha" be%omes a mer%ha" &or he !#r!ose o& he ra"sa% io" a ha"'. Tha is, liable o s#!!or he !a!er a *ha ever s a)e i is i" or a . F#r her, i ma0es a"yo"e liable i" eB#i y o" a s#mmary $#')me" o a"y mer%ha" *ho may bri") a %har)e o& 'e&a#l . A"' ha mea"s "o $#ry rial, 'es!i e *ha o"e mi)h be le' o believe #"'er he Seve" h Ame"'me" be%a#se $#ry rials are base' i" Mo"ey ra"sa% io"s a"' "o Deb ra"sa% io"s. EB#i y, yo# see, is "o s ri% ly 7%ommo" La*.7 The r#le %a" also %om!el *ha is %alle' a" 7a% io" o& a%%o#" 7 .i" eB#i y/ o" he 'eb orI%re'i or basis. I is his %o" i"#i") rela io"shi! *hi%h %rea es he liabili y o &ile ."o "e%essarily o )ive i"&orma io", or o !ay a(/ #"'er he Co'e o& he 2.R.S.. Th#s, he %o" i"#i") 'eb or,%re'i or rela io"shi! %rea es he r#""i") a%%o#" , *hi%h %ash ra"sa% io"s 'o "o . Tha is he hear o& he ma er, b# o"ly he be)i""i") o& he ma?e o& 'e%ei a"' rea%hery reveale' i" %halle")i") he sys em. The o"ly *or' &or *ha &ollo*s is 7sly.7

Si"%e $#ry rials i" o#r sys em o& la* ori)i"a e' i" la"' a"' real !ro!er y i les a"' i" heir !ro e% io", i &ollo*s ha s#mmary $#')me" s i" eB#i y o" he la* mer%ha" are he esse"%e o& %omm#"is i% so%ialism a"' he mea"s o& *holesale %o"&is%a io" a"' 'es r#% io" o& !riva e la"' i les. The Fe'eral Reserve No e is h#s a m#l i!le,!ar y %omm#"is )ro#!ie,'ollar %o"&is%a ory o& real !ro!er y, *here all *eal h ori)i"a es. I"'ee', i& he Fe'eral Reserve No es have o"e overri'i") !#r!ose .a"' he same hi") )oes &or a"y s#%h "o es iss#e' by he so,%alle' I" er"a io"al Mo"e ary F#"'/, i is o %o"&is%a e i" eB#i y .s#mmary $#')me" / all !riva e la"'e' !ro!er y &or he be"e&i o& %er ai" i" er"a io"al %ommer%ial 7!riva e e" er!rise7 i" eres s *hi%h iss#e hem. I is o" his )ro#"'s ha Fe'eral Reserve No es %a" ra io"ally be a a%0e' as ille)al by %al%#la e' 'is%rimi"a io" #"'er he eB#al !ro e% io" %la#se o& he 2; h Ame"'me" . They 'is%rimi"a e a)ai"s real !ro!er y, as real !ro!er y is "o !erso"ali y or *ha is %alle' a %hose,i",a% io". Si"%e Mar%h 29,23@9, here are e%h"i%ally "o more ri)h s o a $#ry rial i" %ommo" la* 'e&a#l %ases. Thro#)h 7"e)o iable i"s r#me" s,7 Fe'eral Reserve No es a"' %he%0s *hi%h re!rese" he %ommer%ial !a!er %alle' 7la*&#l mo"ey7 i" he ba"0s, every i"'ivi'#al *ho a%%e! s o"e o& hese, or i"'ee' a 'ra& or %he%0 #!o" hem, *he her he li0es i or "o be%omes a %re'i mer%ha" *i h "o/ri)h o& 'e&e"se a)ai"s o hers #!o" a $#ry rial o& !eers .!er !ais/. The IRS also o!era es o" he same #"!ri"%i!le' !ri"%i!le, b# i" 'i&&ere" areas. Co"si'er he &ollo*i") &or a mome" . Almos he o"ly $#ry rials remai"i") )e"erally a %ommo" la* %ases are "o #!o" s#bs a" ive la* b# #!o" "o hi") more ha" he amo#" o& 'ama)es .i" 'eb mo"ey/ o be a*ar'e' i" %ivil %ases. I is he $#')e *ho 'e%i'es *he her here are o be a"y 'ama)es a*ar'e' by &as 'e%i'i") *he her here is a"y 7%o" roversy7 or 7 riable iss#e o& &a% .7 The $#')e 'e%i'es he )#il by allo*i") he rial, a"' he $#ry he amo#" o& 'ama)es #!o" he rial. This is esse" ially r#e i" %rimi"al %ases oo *here he amo#" o& 7'ama)es7 or 7!e"al y7 is e%h"i%ally )over"e' by he severi y o& he !#"ishme" . The $#ries &i"' o" 7'e)rees o& )#il 7 *hi%h has alrea'y bee" 'e ermi"e' i" a !rior eB#i able !ro%ee'i"), as o"e is !re'e ermi"e' &or 7&ail#re o &ile7 )ro#"'e' i" a" a% io" o& a%%o#" o" he 'eb orI%re'i or rela io"shi!. So, *e #"'ers a"' some hi") &#r her abo# Fe'eral Reserve No es. We #"'ers a"' *hy hey have e&&e% ively o# la*e' rials by $#ry o" a"y hi") b# he amo#" o& 'ama)es or e( e" o& !#"ishme" . This is he basis o& he e(e%# ive s#mmary C#')me" s o& he I" er"al Reve"#e a"' hey are all %alle' 7%ivil.7 All he 7%rimi"al7 %har)es arise i" *a" o& !er&ormi") 7%ivil7 a% s #"'er he $#s 7"a #ral la*7 o& he La* Mer%ha" . Le #s see &#r her *ha he Fe'eral Reserve No es have o 'o *i h liabili y &or he I"%ome Ta( i sel&, a"' ho* hey %rea e liabili y *here "o"e e(is s by all he o her la* *e ever 0"e* e(%e! he !riva e La* Mer%ha" o& i" er"a io"al e" er!rise, *hi%h %a" overri'e all lo%al Co"s i # io"s2. l. See Le er From A or"ey, A!!e"'i( E IV CORPORATE PRIVILEGE

The S#!reme Co#r has i sel& r#le' ha he Si( ee" h Ame"'me" %rea e' "o "e* Ameri%a" la*, )ave Co")ress "o !o*ers i 'i' "o alrea'y have, a"' i" e&&e% mi)h $#s as *ell "o have bee" *ri e". I has &#r her 'e%lare' re!ea e'ly ha he alle)e' 7I"%ome Ta(7 i %rea e' is "o a" I"%ome Ta( a all, be%a#se a )e"eri% I"%ome Ta( is a 'ire% a( o" !ro!er y, *hile he a( le)isla e' #"'er he Si( ee" h Ame"'me" is "o more ha" a a( o" a &ra"%hise, or more !re%isely o" he !rivile)e o& 'oi") b#si"ess i" a %or!ora e %a!a%i y, ha is he !rivile)e o& !er!e #al e(is e"%e, !er!e #al s#%%essio", a"' limi e' liabili y &or 'eb . A"' i is so, be%a#se i is "o a!!or io"e' amo") he several s a es as a 'ire% a( *o#l' have o be. This so,%alle' I"%ome Ta(, is a a( o" a &ra"%hise .!rivile)e/ o& $#ris i% !erso"s a"' is o"ly meas#re' by he amo#" o& i"%ome !ro!er y o& a $#ris i% !erso" or %or!ora io" s#b$e% e' o i #!o" some %lear %o" ra% #al &ra"%hise or !rivile)e. A"' he $#ris i% !erso", bei") %rea e' by so%ie y, %a" be %om!elle' by la* o reveal ho* i o!era es o" he !rivile)e )ra" e' o i , a"' also o re!or i s ear"i") a"' !ay a re #r" &or he !rivile)e. Wha i 'oes is o re"'er #" o i s %rea or a meas#re o& )ra i #'e a"' liabili y o& 'is%i!li"e &or i s %rea io". I" !lai" 'o*" o ear h erms, he a( is #!o" he B#asi,immor ali y )ra" e' o so%ie y. LTo see his i" o!era io" '#ri") he ime o& Ces#s, see Ma . ::.24,:2.M Na #ral !erso"s, %a""o be s#b$e% e' o bei") %om!elle' o i"&ormi") o" hemselves i" ei her %rimi"al or %ivil %ases. The IRS i" imi'a io" ar is s *ill ell yo# ha he liabili y o i"&orm o" o"esel& is o"ly a %ivil liabili y #"'er he Co'e, a"' o"e %a" i"'ee' be %om!elle' o )ive i"&orma io". 6# *ha yo# are "o ol' is ha ha i"&orma io" %a" a# oma i%ally %ha")e he %ase &rom alle)e'ly %ivil o o# ri)h %rimi"al be%a#se o& i"&orma io" ri)h o# o& o"es mo# h. So he IRS *ill ry a"y hi") o 0ee! i s )oo"s i" b#si"ess as !riva e %o" ra% ors i" harassme" a"' sha0e'o*". So, i& o"ly $#ris i% !erso"s are liable #"'er he Si( ee" h Ame"'me" , ho* %a" "a #ral !erso"s be liable &or he a(1 Eery sim!leJ by e"$oyi") he &avors o& he hol'er o& he &ra"%hise hey be%ome 'eb orI%re'i or mer%ha" s hemselves by bar)ai"i") *i h mer%ha" s o" he %or!ora e &ra"%hise, a"' h#s e"$oyi") he ri)h o s#mmary $#')me" hemselves o" a 'e&a#l o& *ha ever 'es%ri! io" a)ai"s he %hi%0e" "e( 'o*" he !e%0i"),or'er i" his 7"a #ral la*7 o& s#mmary $#')me" . This is a 'o#ble,barrele' ra! &or he "a #ral or "o",$#ris i% !erso". He be%omes liable o" a %or!ora e &ra"%hise a"' o" he %ommer%ial !a!er .%he%0s/ *hi%h i iss#es, s#!!ose'ly 7as )oo' as )ol'.7 Th#s, he %or!ora e &ra"%hise !re e"'s "o o 'es roy his %ivil imm#"i y a"' "o reveal i"&orma io" #"'er he 5 h Ame"'me" a"' he ; h Ame"'me" , *hile he Fe'eral Reserve No es as *ell as b#si"ess a"' !erso"al %he%0s )#ara" ee a s#mmary $#')me" o" a"y %har)e bro#)h a)ai"s he !erso" 7e"$oyi")7 he be"e&i s o& he %ommer%ial !a!er. Th#s, he em!loyer, he be"e&i%iary o& he &ra"%hise, reveals o" his i"&orma io" re #r"s he amo#" o& *a)es alle)e'ly !ai', %alle' i"%ome, #!o" *hi%h %har)es %a" be bro#)h a)ai"s he em!loyee &or 7*ill&#l &ail#re7 o &ile #!o" he !a!er, be%a#se 7i"%ome7 is "o* %o"si'ere' o be a"y 0i"' o& 7%o"si'era io",7 $#s as i #se' o be o" His Lor'shi!As ma"or i" &e#'al imes.

6# "o*, all ha %a" be s#%%ess&#lly a a%0e', be%a#se yo# have here lear"e' he &#"'ame" al se%re rela io"shi! be *ee" he I"%ome Ta( a"' he Fe'eral Reserve No es. So he res is #! o yo#. A"' *ha 0i"' o& 'e&e"ses %a" be ma'e1 Well, le As see. V DEFENSES TO THE FRN A% #ally, here are ma"y 'e&e"ses. The &as is he 'e&e"se ha a "a #ral !erso" or i"'ivi'#al %a""o be liable o" a &ra"%hise, as he has )ra" e' "o &ra"%hise o himsel&. Ca" a" i"'ivi'#al re"'er himsel& immor al or libera e himsel& &rom "a #ral !ro%ess1 Nor %a" a" i"'ivi'#al be liable o" a %or!ora e &ra"%hise be%a#se "o o"e %a" be %om!elle' o s#bmi o a" #"soli%i e' or #"*a" e' !riva e boo". I"'ivi'#als %a""o be e"&ra"%hise' by heir o*" %rea io". Di' +o' %rea e me" so ha me" %o#l' al er heir %rea or1 These &ra"%hises are 'erive' o"ly &rom he Peo!le hemselves *ho are !oli%e' o"ly by he Provi'e"%e o& heir o*" Crea or. De&e"se o" he Fe'eral Reserve No es is esse" ially ha hey %learly 'is%rimi"a e a)ai"s hol'ers o& allo'ial la"' i les i" &avor o& la* mer%ha" s. This is be%a#se he Fe'eral Reserve No es a"' 'ema"' 'e!osi s !asse' by %he%0 .i" eB#i y/ lay a 'is!ro!or io"a e b#r'e" o& &rom 2> o 2 o abo# 2@ o 2 #!o" real !ro!er y or s#bs a"%e .i" la*/. Tha is, he real !ro!er y m#s yiel' or !ro'#%e &rom e" o si( ee" a( or i"%ome 7Dollars7 &or every o"e a( or i"%ome 7Dollar7 !ai' by he $#ris i% !erso". I" o her *or's, 7eB#i able7 %ommer%ial !a!er is *or h &rom e" o si( ee" imes as m#%h i" !#re mo"ey,o&,a%%o#" as le)al s!e%ie o& )ol' a"' silver, or he real !ro!er y .s#bs a"%e/ *hi%h i re!rese" s. I is h#s emi"e" ly %lear, *hy he Mo" )omery 6a"0 %hose "o o a!!eal o" a"y hi") b# a &ee !ai' i" Fe'eral Reserve No es. I" or'er o *i" heir %ase a"y o her *ay, hey *o#l' have ha' o %om!el he %o#r o !lay mer%ha" o he 6a"0As ra'e o& mer%ha" #!o" he %ommer%ial !a!er %alle' he Fe'eral Reserve No e, a"' #!o" "o o her. So a Fe'eral Reserve No e is a "e)o iable i"s r#me" , "e)o iable by mere 'elivery a"' &or%e' a%%e! a"%e #!o" everyo"e e(%e! he !ro!rie ors o& he Fe'eral Reserve by he same !riva e %or!ora io" i" or'er o %om!el s#b$e% io" o s#mmary $#')me" s #"'er he La* Mer%ha" . I is as sim!le as ha . For he !ro!rie ors o& he Fe'eral Reserve hol' he real )ol' *hi%h %a""o ma0e hem liable i", eB#i y. The Fe'eral Reserve No e, &or allie' a"' s#bsi'iary !#r!oses, also !asses as several o her hi")s #"'er %olor o& la*. I !asses as a bill o& e(%ha")e, as a %#rre"%y bo"', a"' mos im!or a" o& all !erha!s as a" irre'eemable !er!e #al a""#i y bo"' %har)e' #!o" he la"'. I is e%h"i%ally i sel& a bo"', bei") 7small %ha")e7 &or he ="i e' S a es se%#ri ies *hi%h alle)e'ly ba%0 i alo") *i h o her %ommer%ial !a!er. The sole le)i ima e !#r!ose &or he Fe'eral Reserve No e, by he Fe'eral Reserve A% , is o %ash,bala"%e i" er,ba"0 a%%o#" s i" 'ema"' 'e!osi s a he e"' o& he 'ay. VI WHAT THE JUDGES KNOW Sho#l' *e ass#me ha C#')e Maho"ey 0"e* some hi") *hi%h o her $#')es 'o"A 0"o*1 No "e%essarily. The !robabili y is ha i *as his mere 'ire% "ess ra her ha" a"y so!his i%a e' 0"o*le')e *hi%h h*ar e' he ba"0As s*i"'le #!o" he Fe'eral Reserve No es. I" a"y %ase, *e

shall 'is%over ye more o& he mer%a" ile basis #!o" *hi%h, !ar i%#larly si"%e Mar%h l9, 23@9, he hi''e" o*"er o& he Fe'eral Reserve have !romo e' he %omm#"i?a io" o& he *orl'. This mer%a" ile basis o& %omm#"i?a io" is lai' i" absol# ely "o hi") b# he La* Mer%ha" , he la* o& !riva e ra'ers *hi%h s#!!ose'ly i" he ma"y %ases 'e%i'e' by he Lor' Ma"s&iel' above me" io"e', be%ame a !ar o& he 7%ommo" la* o& E")la"'7 $#s !rior o he Ameri%a" Revol# io". I"'ee', i *as his "e* la* o& s#mmary $#')me" s *hi%h s!ar0e' he Ameri%a" Revol# io", *hi%h i sel& re$e% e' he "e* la*. S#rely, he $#')es *ho e"&or%e i are "o all ei her i)"ora" or %rimi"al, b# hey 'o 0"o* some hi") ha he vas "#mbers o& he res o& #s o"ly 'imly s#s!e% i" o#r a!!are" ly &r#i less e&&or s o a%hieve $#s i%e i" %ases i"volvi") "o o"ly mo"ey a"' a(es, b# ma"y o her areas as *ell, !ar i%#larly hose beari") o" marria)e a"' &amily li&e. We "ee' o e(ami"e he o"e !ar i%#lar !la%e *here he ="i e' S a es Co"s i # io" me" io"s he 7%ommo" la*,7 a"' ha is i" he Seve" h Ame"'me" . O"%e *e loo0 %are&#lly a i , a"' h#s 'e ermi"e all ha i im!lies, *e shall see ha 7%omm#"ism7 a"' he br# ali?i") o& Ameri%a 'erive &rom he o"e hi") *hi%h ma"y a(,resis ers #"*i i")ly !romo eI hemselves< he La* Mer%ha" . VII THE SEVENTH AMENDMENT The *ors o& he erro"eo#s ass#m! io"s ha %er ai" Ta( a"' Mo"ey Fi)h ers ma0e, a"' he mos sel&,'e&ea i"), is ha he $#')es ei her 'o"A 0"o* he Co"s i # io" a"' he La*s, or ha hey are all %orr#! a"' bo#)h . 6# i $#s %a"A be so. Why sho#l' *e !re$#'i%e o#r o*" %a#se by ass#mi") ha *e 0"o* all he la*s by he mere &a% ha *e %a" rea' a"' B#o e he Co"s i # io" *i h 'e( eri y, )ivi") a" imme'ia e $#')me" o" i s %o" e" 1 Le As loo0 a he Seve" h Ame"'me" , &or e(am!leJ "In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved." Wha his says i" e&&e% is ha he Co")ress shall !ass "o la* 'e"yi") he ri)h o& rial by $#ry i" s#i s o& %ommo" la* *here he val#e i" %o" roversy e(%ee's *e" y 'ollars. I says "o a *or' abo# *ha S a e le)isla #res may 'o. This Ame"'me" merely !ro e% s i" he %o#r s o& he ="io" %ommo" la* ri)h s arisi") i" he S a es a"' %om!arable o hose o& he Ame"'me" . No* le As )o eve" &#r her. Wha is 7%ommo" la*,7 a"y*ay1 Do all he s a es have he same %ommo" la*1 No. Is here a &e'eral %ommo" la*1 No. I& here is "o )e"eral &e'eral %ommo" la*, %a" o"e i"s i # e a 7%ommo" la*7 a% io" i" a Fe'eral Co#r 1 A"s*er, No. Ho*ever, a %ivil a% io" %a" be i"s i # e'. As re)ar's he s a es, *ha 'oes 7%ommo" la*7 mea"1 Are s#i s a %ommo" la* mere s#i s over amo#" s o& 'ama)es1 No, ye some !re e"' yes. Wha is 7%ommo" la*,7 a"y*ay1 I& is he #"*ri e" la* o& sa"% io"e' s!o" a"eo#s !ra% i%e #!o" i"&orme' %o"se" as e(!o#"'e' by he $#')es i" he %ase 'e%isio"s, *hi%h 'o "o %rea e he la*, b# 'is%lose i . Ca" he Fe'eral

Co#r s im!ose he %ommo" la* o& o"e s a e #!o" a"o her1 No. The %ommo" la* me" io"e' i" his Ame"'me" is he %ommo" la* !revaili") i" ea%h s a e a he ime o& he a'o! io" o& heir Co"s i # io"s. I" some, i bars a"y %ommo" la* o& E")la"' !rior o 2@>4, i" mos o& he o hers !rior o 244@. I e" ers Fe'eral Co#r s o"ly o" a!!eals &rom S a e %o#r s or i" 'iversi y s#i s be *ee" %i i?e"s o& 'i&&ere" s a es. M#%h more o" his s#b$e% &ollo*s belo*. Do i"%ome a(es e(is #"'er he %ommo" la*1 Absol# ely "o N They are e"&or%e' !rimarily #!o" s a # es, !rimarily i" eB#i y by s#mmary $#')me" s o& he e(e%# ive .*ri s o& assis a"%e/. 7"a #ral !erso"s7 The alle)e' liabili y o& he liabili y. lies %om!le ely i" eB#i y, &or he Co'e "o*here 'e&i"es I" he Seve" h Ame"'me" above, *ha e(a% ly is 7val#e17 Who 'e%i'es he 7val#e17 The Plai" i&&1 De&e"'a" 1 C#ry1 C#')e1 Wha is 7%o" roversy 17 Do %o" roversies e(is over 7La*7 as *ell as over 7&a% 17 O& %o#rse. Are all %o" roversies riable by $#ry1 No. Ca" he Co")ress s#!!ress 'eba able iss#es o& &a% by i"%or!ora i") hem i" a s a # e .IRS a( ables, &or e(am!le/ a"' h#s %all hem ma ers o& La*1 -o#A' be er believe i . Do he $#')es 'eal i" La* i" ha %ase1 No, b# i" eB#i y. Tha is, esse" ially i"B#isi ory $#s i%e o" s#mmary $#')me" , i" *hi%h %ase he $#')e is a'vo%a e &or he !lai" i&&, h#s ma0i") i a semi,%rimi"al %ase $#s as mos o& eB#i y amo#" s o. Some imes he %o#r s 'e%i'e ha 7&a% s7 oo are o"ly &or he %o#r . Wha is a 7$#ry 17 T*elve me" or si(1 Ca" a $#')e be a 7$#ry17 C#ry mea"s, s*or" o i"'i&&ere" r# h #!o" he la*. A $#')e %a" be a $#ry i" a %ase o& 7&a% s &or he %o#r .7 C#')es a"' $#ries are %alle' 7!erso"s i"'i&&ere" ,7 a"' i& hey are "o hey %a" be s#e' or !rose%# e'. There are "o )e"#i"e $#ries i" eB#i y. C#ries %har)e' by a $#')e &rom &ollo*i") a"y hi") b# *ha he 'ire% s are "o more ha a'visory $#ries i" eB#i y. Is his 7eB#i y7 a !ar o& he Co"s i # io"1 Le As see Ar i%le III, Se% io" :, o& he Co"s i # io"J AThe $#'i%ial !o*er shall e( e"' o all %ases, i" la* a"' eB#i y, arisi") #"'er his Co"s i # io", he la*s o& he ="i e' S a es< a"' rea ies ma'e, or *hi%h shall be ma'e #"'er heir a# hori y.7 Fe'eral eB#i y r#les *ere revise' i" 2328, he same year as he Fe'eral Reserve a"' he I"%ome Ta( *ere i"s i # e'. Ima)i"e ha N EB#i y *as ori)i"ally a" e( raor'i"ary $#ris'i% io" o& he Ri")As !rero)a ive i" 'e&i%ie" %ommo" la* !ri"%i!les. I has "o* %ome o be almos a"y 0i"' o& so%iolo)i%al $#s i&i%a io" *ha ever !assi") as "a #ral or h#ma" ri)h s, by he very la*s o& he Co")ress. This is *here he $#')es )e he $#ris'i% io" hey e(er%ise< &rom he Co")ress a"' he le)isla #res, *here else1 So, i is "o "e%essarily he $#')es *ho are ra'#%i") #s, &or hey are, *he her *e li0e i or "o , or *he her *e #"'ers a"' i or "o , r#li") i" 7all %ases i" la* a"' eB#i y, arisi") #"'er his Co"s i # io", he la*s o& he ="i e' S a es, a"' rea ies ma'e, or *hi%h shall be ma'e, #"'er heir a# hori y.7 A"' ha %overs a )rea 'eal o& erri ory, *he her *e li0e i "o , or *he her *e #"'ers a"' i or "o . Wha i has lo") si"%e bee" o#r obli)a io" o 'o is o 'is%over he so#r%e o& he 'i&&i%#l y, o see ho* he Co"s i # io" %a" seemi")ly be ma'e o %o" ra'i% i sel&.

7The le)isla #re has e(%l#sively he !o*er o say *ha he la*s shall be.7 *e rea' i" O)'e" v. 6la%0le')e, : Cra"%h :4:. Tha obvio#sly mea"s *i hi" he !o*ers )ra" e' i #"'er he Co"s i # io". No* le As see *ha 7%ommo" la*7 *e have o 'eal *i h o" he &e'eral level. VIII FEDERAL COMMON LAW Si"%e he %o#r have 'e%lare' here is "o )e"eral &e'eral %ommo" la*, o# si'e he !ri"%i!les o& he Co"s i # io", he &e'eral %o#r s 'eal esse" ially, #"less a s a e ri)h is i"volve', *i h ei her eB#i y or s a # e la* or %ivil la*. A"' eB#i y a"' Civil La* %a" %o"vey almos a"y hi"), as *e shall see, i"%l#'i") he La* Mer%ha" . There are hree &#"'ame" al %ase 'e%isio"s o& he S#!reme Co#r o" 7&e'eral %ommo" la*7 si"%e 23>>, a"' *o be&ore. They are heseJ

Whea o" v. Pe ers, 9 Pe ers .=.S./ 532 S*i& v. Tyso", 2@ Pe ers .=.S./ 23 Erie R.R. v. Tom0i"s, 8>; =.S. @; Hi"'erli'er v. LaPla a, 8>; =.S. 3: DAOe"%h, D#hme G Co. v. FDIC, 825 =.S. ;;4

Firs le #s %o"si'er hisJ here are hree s%hools o& ho#)h o" *ha %om!rises he A")lo, Ameri%a" 7%ommo" la*.7 The &irs says i i"%l#'es he e" ire sys em o& A")lo,Ameri%a" la* as %o" ras e' *i h he Roma" or Civil La*. This mea"s all he #"*ri e" la* a"' all he E")lish s a # es *ove" #!o" i . I mea"s also he la* )ive" !rimarily i" he %ase 'e%isio"s. Se%o"', i" "arro*er se"se, i 'is i")#ishes be *ee" %ommo" la* a"' eB#i y, a'miral y, a"' e%%lesias i%al, ho#)h i"%l#'i") he ol'er E")lish s a # es, es!e%ially o" !ro!er y. Thir', i" he "arro*es se"se, i e(%l#'es eve" he a"%ie" s a # es, a"' mea"s o"ly he la* o& he %ase 'e%isio"s. I" he li)h o& ha , *e m#s %o"si'er he %ase o& =.S. v. Rea', 2: Ho* .=.S./ 8@2, 28 L.E'. 2>:8, *hi%h 'e%lares ha he E")lish s a # es 'o i"'ee' &orm a !ar o& he %ommo" la*. I& so, ha *o#l' i"%l#'e o"e o& he earlies %alle' A% o" 6#mel, o& *hi%h more la er. The &irs o& he %ases me" io"e' above, Whea o" v. Pe ers, 9 Pe ers @53, 'e%lares hisJ 7I is %lear here %a" be "o %ommo" la* o& he ="i e' S a es. No o"e *ill %o" e"' ha he %ommo" la*, as i e(is e' i" E")la"', ha' ever bee" i" &or%e i" all i s !rovisio"s i" a"y s a e i" his ="io". I *as a'o! e' so &ar as i s !ri"%i!les *ere s#i e' o he %o"'i io" o& he %olo"ies< a"' &rom his %ir%#ms a"%e *e see *ha is %ommo" la* i" o"e s a e is "o so %o"si'ere' i" a"o her. The $#'i%ial 'e%isio"s, he #sa)eAs a"' %#s oms o& he res!e% ive s a es, m#s 'e ermi"e ho* &ar he %ommo" la* has bee" a'o! e' a"' sa"% io"e' i" ea%h.7 Th#s, he Fe'eral %o#r s m#s rely o" s a e %ase la* as !re%e'e" . Whea o" v. Pe ers s oo' #" il 29;:, *he" i *as overr#le' by S*i& v. Tyso", h#sJ 7I" his %ase, "o *i hs a"'i") se% io" 8; o& he C#'i%iary A% , *hi%h !rovi'es ha he la*s o& he several s a es, e(%e! *here he Co"s i # io", rea ies, or s a # es shall o her*ise !rovi'e, shall be re)ar'e' as r#les o& 'e%isio" bi"'i") #!o" he &e'eral %o#r s a"' he hi)hes %o#r o& he S a e o& Ne* -or0 ha' es ablishe' a r#le #!o" he B#es io", he Fe'eral Co#r 'e%i'e' %o" rary o ha

r#le, #!o" he broa' !ri"%i!le o& %ommer%ial or mari ime la* i"'i%a e'.7 Also he same %o#r hel' ha he Fe'eral Co#r is bo#"' by he )e"eral %ommer%ial la*, i"'e!e"'e" o& he la* o& a"y !ar i%#lar s a e. This 'e%isio" *as re!or e' a)ai" i" Came" er v. Provi'e"%e,Washi") o" I"s#ra"%e Com!a"y, 2@ Pe ers ;3;,522, a"' also i" Rail*ay Com!a"y v. Na io"al 6a"0, 2>: =.S. 2;. S*i& v. Tyso" also 'e%lare', by C#s i%e S oryJ 7The la* res!e% i") "e)o iable i"s r#me" s may be r#ly 'e%lare' i" he la")#a)e o& Ci%ero, a'o! e' by Lor' Ma"s&iel' i" L#0e v. Hy'e .: 6#rr. R. 998,994/ o be i" a )rea meas#re "o he la* o& a si")le %o#" ry o"ly, b# o& he %ommer%ial *orl'. The &ame o& Ma"s&iel', *hose 'e%isio"s *ere 'e!lore' by Thomas Ce&&erso", lay i" movi") i" o eB#i y o# o& he la* he a% io" %alle' ass#m!si , )ivi") s#mmary $#')me" s o mer%ha" s o" *ri s o& assis a"%e. The very hi") ha , i" &a% , s!ar0e' he Ameri%a" Revol# io". F#r her, 7I is observable ha he la* mer%ha" a"' he mari ime la* are "o )e"erally 'is i")#ishe' &rom ea%h o her, b# are &reB#e" ly #se' i"'is%rimi"a ely. The o"ly real 'i&&ere"%e is i" he sa"% io". Whe" vie*e' as a !ar o& he m#"i%i!al la* he r#les are %alle' he la* mer%ha" , *he" re)ar'e' &rom he s a"'!oi" o& i" er"a io"al la* he same r#les are he la* mari ime.7 Does ha las "o le"' some si"is er a mos!here o he A la" i% Char er 7)ra" e'7 by Roosevel a"' Ch#r%hill o" he hi)h seas1 S*i& E. Tyso" e&&e% ively ma'e he la* mer%ha" a !ar o& o#r %ommo" la*, h#s bri")i") #! he B#es io" o& $#ry rials a %ommo" la* #"'er he Seve" h Ame"'me" . This 'e%isio" s oo' &rom 29;: #" il 2389, *he" i s a!!li%a io" *as overr#le' by he *ell,0"o*" %ase o& Erie R.R. v. Tom0i"s, *hi%h sai'J 7E(%e! i" ma ers )over"e' by he Fe'eral Co"s i # io", or by a% s o& Co")ress, he la* o be a!!lie' i" a"y %ase is he la* o& he S a e. Whe her he la* o& a S a e shall be 'e%lare' by he le)isla #re i" a s a # e or i" i s hi)hes %o#r i" a 'e%isio", is "o a ma er o& &e'eral %o"%er".7 The %ase a ha"' *as a 'iversi y o& %i i?e"shi! %ase, b# he i" e" o& he 'e%isio" *as o& #"iversal a!!li%a io" i" &e'eral %o#r s. The 'e%isio" 'e%lare' &#r her, 7There is "o )e"eral &e'eral %ommo" la*. Co")ress has "o !o*er o 'e%lare s#bs a" ive r#les o& %ommo" la* a!!li%able i" a s a e . . . a"' "o %la#se i" he Co"s i # io" !#r!or s o %o"&er s#%h a !o*er o" he Fe'eral Co#r s.7 O" he same 'ay *as 'e%i'e' he Hi"'erli'er %ase, *hi%h 'e%lare' esse" ially he same hi"), a''i") ha here is a &e'eral %ommo" la* s!e%i&i%ally %rea e' by he &e'eral %o#r s hemselves a"' a!!li%able o hose areas *here he s a e la*s %a""o be relie' #!o". I" 23;: a"o her %ase o& im!or a"%e *as 'e%i'e', "amely DAOe"%h, D#hme G Co. v. FDIC, *hi%h e(!a"'e' o" he 'o% ri"e o& Hi"'erli'er ha here is a &e'eral %ommo" la* s!e%i&i%ally %rea e' by he &e'eral %o#r s hemselves a"' li0e*ise a!!li%able o hose areas *here he s a e la*s %a""o be relie' #!o". I"'ee', i" he DAOe"%h %ase, C#s i%e Ca%0so" *e" so &ar as o re&er o &e'eral $#')e,ma'e %ase la* as a &e'eral %ommo" la*. The la* %rea i") he FDIC sai' i" !ar ha 7all s#i s o& a %ivil "a #re a %ommo" la* or i" eB#i y o *hi%h he %or!ora io" shall be a

!ar y shall be 'eeme' o arise #"'er he la*s o& he ="i e' S a es . . .7 6ase' #!o" ha , here is *ha C#s i%e Ca%0so" sai'J 7Al ho#)h by Co")ressio"al %omma"' his %ase is o be 'eeme' o"e arisi") #"'er he la*s o& he ="i e' S a es, "o &e'eral s a # e !#r!or s o 'e&i"e he %or!ora io"As ri)h s as a hol'er o& he "o e i" s#i or he liabili y o& he ma0e hereo&. There arises here&ore, he B#es io" o& *he her i" 'e%i'i") his %ase *e are bo#"' o a!!ly he la* o& some !ar i%#lar s a e or o her or *he her, o !# i bl#" ly, *e may ma0e o#r o*" la* &rom ma erials &o#"' i" %ommo" la* so#r%es.7 The C#s i%e %er ai"ly 'i' "o say 7Ameri%a" %ommo",la* so#r%es,7 be%a#se o& he &a% ha he Ameri%a" Revol# io" i sel& o# la*e' he i"'is%rimi"a e a!!li%a io" o& he mer%a" ile la* i"$e% e' i" o i by Lor' Ma"s&iel' o# o& he Civil La* !romo e' o" he Co" i"e" . There is m#%h more, b# have *e "o esse" ially reveale' he se%re o& he br# ali?a io" o& Ameri%a *hi%h is bro#)h by resor o he !riva e %#s om o& mer%ha" i" er"a io"al 0"o*" as he La* Mer%ha" 1 This la* %a""o be ma'e a !ar o& o#r s#bs a" ive or m#"i%i!al la* as i is %alle'. I %a" o"ly be e"&or%e' #!o" a%B#ies%e"%e or, *here ha is li0e o &ail, #!o" i" imi'a io" by !riva e %o" ra% ors o" &ra"%hise, as o!era e i" a"' o# o& he I" er"al Reve"#e Servi%e. Th#s, *hile he a!!li%a io" o& he Erie Railroa' %ase !re e"'e' o over hro* S*i& v. Tyso", *ha i 'i' bl#" ly *as o o!e" #! he *ay &or "e* resor s o es ablishme" o& a 'e&i"i ive 7&e'eral %ommo" la*,7 *hile ea%h o& he hree %ases ha' sai' ha here *as "o )e"eral &e'eral %ommo" la*. The sole B#es io" *as o"e o& *here o resor o &i"' o"e beyo"' he )e"eral %ommo" la* o& he s a es *hi%h %o#l' be %alle' a 7"a io"al %ommo" la*7 )e"erally share' by he s a es o" he !ri"%i!le o& he Fe'eral Co"s i # io", a"' !ar i%#larly he 6ill o& Ri)h s, *hose !reamble e%hoes he ri")i") !hrases o& he De%lara io" o& I"'e!e"'e"%e. So *e %a" "o* #"'ers a"' he reme"'o#s la%0 o& '#e !ro%ess *hi%h has )ro*" i" he %o#r s si"%e 2389. Civil ri)h s .ri)h s o& %i i?e"s o& he ="io"/ have be%ome esse" ially hose *hi%h !romo e ra'e a"' %ommer%e #"'er he %#s om o& mer%ha" s, a"' s#!!or e' o he las syllable by he ro!e, mer%ha" s o& he so,%alle' servi%e or)a"i?a io"s s#%h as he Ro ary I" er"a io"al. Too &e* Pa rio s reali?e ha 7%omm#"ism7 is a hoa( a"' is "o more ha" he e(%#se &or s*allo*i") #! millio"s o& small %ommer%ial e" er!rises i" o he ma* o& mo"s ro#s %ar els i" he ra'i io" o& he De# s%he Ha"sab#"', &rom *hi%h %ame he Warb#r) ar%hi e% s o& he i"&amo#s Fe'eral Reserve. I *ill be )oo' a"' s#&&i%ie" ime &or %over !romo ers o& mer%a" ilism o 7)e =.S. o# 7 o& he =N o"ly *he", a& er re!ea e' em! y e(hor a io"s, he e" ire *orl' %ommer%e has bee" mo"o!oli?e' by he !ro!rie ors o& his %re'i . IX BUSINESS IN GOVERNMENT O"e o& he &irs hi")s &or #s o reali?e, is ha i is "o 7 he +over"me" 7 *hi%h is ra'#%i") a"' be rayi") #s, b# !riva e i" eres s *hi%h have #s#r!e' he !o*ers a"' o&&i%es o& )over"me" #"'er %olor o& he La* Mer%ha" . The !#r!ose has bee" o %rea e *o hi")s. O"e, a vas b#rea#%ra%y, a"' se%o"'ly a yra""y. So ha i" he e"', %are&#lly #!o" %#e, *e %a" be save' &rom 'es r#% io" a"' &rom 7 yra""y7 by s!li i") #! he b#rea#%ra%y i" o *ai i") !riva e ha"'s a"' by %rea i") a 'e%e" rali?e' &e#'alis i% s a e i" *hi%h he yra""y is &arme' o# hro#)h

!riva e %or!ora io"s a"' "o by !#bli% b#rea#s. This is !re%isely *ha s#%h 'a")ero#s !ro!osals as he so,%alle' 7Liber y Ame"'me" 7 *ill hel! o bri") abo# < he mere re!la%i") o& a !#bli% yra""y *i h a !riva e o"e. The 7Liber y Ame"'me" 7 *as *ri e" i" )oo' &ai h over hir y years a)o a& er Fra"0li" Roosevel As assa#l #!o" he Mo" )omery War' Cor!ora io", b# is "o* a lame" able hoa( a"' &ra#' #!o" every *or0i") !erso" i" he "a io", *he her re)#larly &or *a)es or as !riva e %o" ra% or. This Ame"'me" is "o 'esi)"e' o !ro e% !riva e #"'er a0i")s, b# o !ro e% %or!ora e limi e' liabili y #!o" !#bli% &ra"%hises )ra" e' by he Peo!les o& he S a es. To re!eal he 7I"%ome Ta(7 .*hi%h la*&#lly a!!lies o %or!ora io"s o" &ra"%hises a"' "o o !riva e %i i?e"s/ a"' s ill leave he %or!ora io"s *i h he !er!e #al s#%%essio" a"' he limi e' liabili y &or 'eb s is o #r" he "a io" i" o a si")le )i)a" i% !riva e %or!ora io", #" o#%hable by a"y i"'ivi'#al, !re%isely as Ce&&erso" *ar"e' #s. The a# hor o& he 7Ame"'me" 7 'e%li"es o# ri)h o 'is%#ss i s r#e mea"i") #"'er he o!i"io"s o& he S#!reme Co#r i" he several so,%alle' I"%ome Ta( %ases *e shall also %o"si'er, es!e%ially he 6r#shaber %ase. The 'e%e! ive s%heme is also serve' by !romo ers o& a &e'eral %or!ora e mo"oli h !osi") as sel&,s yle' 7e'#%a io"al7 or)a"i?a io"s *hi%h %orral 'e%e" , %o"%er"e' %i i?e"s, a"' 7e'#%a e7 hem i" every hi") b# he real r# h o& ho* o 'e&e"' hemselves, a"' 'o "o more year a& er year ha" soo he a"' 7b#il' morale7 amo") he br# ali?e' *i h "ame,%alli") a"' &i")er,!oi" i"), *hile he *hole vile, ro e" s*i"'le is %rea ively %#l #re' o ri!e" .a he a!!ro!ria e mome" / i" o viole" Revol# io" by *hi%h he over,ri!e ."ay, ro e"/ &r#i *ill &all i" o heir o*" ha"'s &or 7re)e"era io"7 a"' 7!ro e% io"7 a"' 7%lea"i"),#!7 #"'er he a#s!i%es a"' $a%0boo s o& !yrami's a"' !riva e e" er!rise hireli")s o" imm#"i y &ra"%hises *ho *ill ei her obey %om!a"y or'ers or lose heir meals. For a" i" eres i") !arallel see Revela io" 28J242 We 'o"A "ee' o 7+e +over"me" o# o& 6#si"ess7 *e "ee' o +e 6#si"ess O# O& +over"me" . The Fe'eral Reserve, is o"e o& he &i"es i"s a"%es o& "a0e' 7!riva e e" er!rise,7 *i h a" absol# e hro le,hol' o" he &is%al e%o"omy o& he "a io". The be"evole" &o#"'ers o& he Fe'eral Reserve 'i' )e he +over"me" o# o& he Mo"ey 6#si"ess &or s#re. Is here a"y o her ha really %o#" s1 To a0e a &#r her s e! o*ar' seei") he !roblems &or *ha hey are, le As !ermi o#rselves a %loser loo0 a he so#r%es o& $#ris'i% io" #se' by o#r re)ime" a ors. X JURISDICTION The &ollo*i") are he bases o" *hi%h he %o#r s !ri"%i!ally o!era e, *he her *e #"'ers a"' i or "o , o" he $#ris'i% io" )ive" by he Co"s i # io", Co")ress, a"' he Le)isla #res. There is "o se"se i" bei") i" he ball )ame i& *e 'o"A 0"o* he r#les #"'er he Co"s i # io". +ro#"' R#les o& La* Mer%ha" Ar i%le I, Se% io" 9. The Co")ress shall have !o*erJ

To..... lay a"' %olle% e(%ises. To..... re)#la e %ommer%e *i h &orei)" "a io"s, a"' amo") he several s a es. To..... 'e&i"e a"' !#"ish . . . o&&e"ses a)ai"s he la* o& "a io"s. To..... ma0e all La*s *hi%h shall be "e%essary a"' !ro!er &or %arryi") i" o E(e%# io" he &ore)oi") Po*ers, a"' all o her !o*ers i"ves e' by his Co"s i # io" i" he +over"me" o& he ="i e' S a es, or i" a"y De!ar me" or o&&i%er hereo&. Ar i%le III, Se% io" : The C#'i%ial !o*er shall e( e"' o all %ases i" La* a"' EB#i y, arisi") #"'er his Co"s i # io", he La*s o& he ="i e' S a es, a"' Trea ies ma'e, or *hi%h shall be ma'e, #"'er heir a# hori y. I" all o her %ases be&ore me" io"e' he S#!reme Co#r shall have a!!ella e $#ris'i% io", bo h as o La* a"' Fa% , *i h s#%h e(%e! io"s, a"' #"'er s#%h Re)#la io"s as he Co")ress shall ma0e. Ar i%le IE This Co"s i # io", a"' he La*s o& he ="i e' S a es *hi%h shall be ma'e i" !#rs#a"%e hereo&, a"' all rea ies ma'e, #"'er he a# hori y o& he ="i e' S a es, shall be he S#!reme La* o& he La"'. A"' he $#')es i" every s a e shall be bo#"' hereby, a"y hi") i" he Co"s i # io" or La*s o& a"y S a e o he Co" rary "o *i hs a"'i"). Ar i%le E No !erso" shall be %om!elle' i" a"y %rimi"al %ase o be a *i "ess a)ai"s himsel&. Ar i%le EII I" s#i s a %ommo" la*, *here he val#e i" %o" roversy shall e(%ee' *e" y 'ollars, he ri)h o& rial by $#ry shall be !reserve'. S#i s i" %ommo" la*, i m#s be !oi" e' o# , 'o "o i"%l#'e s#i s i" Cha"%ery, be er 0"o*" as eB#i y, s#%h as s#i s &or i"$#"% io", 'ivor%e, e"&or%i") a r#s , %a"%eli") "a #rali?a io", a%%o#" i"), a"' s!e%i&i% !er&orma"%e. A" im!or a" "o e abo# rea ies m#s be ma'e here. A"yo"e *ho believes ha he ="i e' Na io"s rea ies %a" la*&#lly overri'e he %lear i" e" o& he Co"s i # io" *ill 'o *ill o "o i%e he &ollo*i"), a0e" &rom A Eie* o& he Co"s i # io" o& he ="i e' S a es o& Ameri%a, by William Ralle, LL.D., *hi%h %learly e(!lai"s he ma er o& rea ies #"'er he ="i e' S a es Co"s i # io". "There is a variance in the words descriptive of laws and those of treaties - in the former it is said those laws which shall be made in pursuance of the Constitution,

but treaties are described as having been made, or which shall be made under the authority of the nited !tates. "The explanation is that at the time of adopting the Constitution, certain treaties existed, which had been made by Congress under the Confederation #with $rance, the nited %etherlands, and particularly the treaty of peace with &reat 'ritain(, the continuing obligations of which it was proper to declare. The words "under the authority of the nited !tates" were considered as extending e)ually to those previously made, and to those which should subse)uently be effected. 'ut although the former could not be considered as pursuant to a Constitution, which was not then in existence, the latter would not be made under the authority of the " nited !tates," unless they were conformable to its Constitution." Wha 0i"' o& la* is i ha he ="i e' Na io"s rea ies !ro e% , !riva e or !#bli%1 Or is i "a #ral or !osi ive1 Or is i a))ressive or 'e&e"sive1 XI NATURAL LAW For hose ma"y Pa rio s %o"%er"e' over *ha hey o& e" re&er o as heir Na #ral Ri)h s, he &ollo*i") shor !assa)e 'eali") *i h he La* Mer%ha" may !erha!s !rovi'e a %l#e o *hy hey may "o %ome by all he imme'ia e $#s i%e i" he %o#r s, o *hi%h hey may believe hemselves e" i le', i" he &iel' o& Na #ral Ri)h s. The e(%er! is &o#"' a !a)e :>4 i" he Ameri%a" e'i io" o& Coli" 6la%0b#r"As essay o" Co" ra% o& Sale, !#blishe' a Phila'el!hia, 29;4, by T. a"' C.W. Coh"so". These "o es &ollo* a 'is%#ssio" o& some o& he !er i"e" la* a" e%e'e" o he &amo#s 'e%isio" o" s o!!a)e i" ra"si i" he %ase o& Li%0barro* v. Maso", : T.R. @8, i" he year 249@. 6la%0b#r" *ri es h#sJ "There is no part of the history of *nglish law more obscure than that connected with the common maxim that the +aw ,erchant is part of the law of the land. In the earlier times it was not a part of the common law as it is now, but administered in its own courts in the staple, or else in the !tar Chamber. The Chancellor, in the -. *dw. /, 0, declares his view of the law thus1 "This suit is brought by a alien merchant who is come by safe conduct here, and he is not bound to sue by the law of the land, to abide the trial of twelve men, and other forms of the law of the land2 but he ought to sue here #in the !tar Chamber( and it shall be determined by the law of nature in Chancery, and he may sue from hour to hour for the dispatch of merchants2 and he said further that a merchant is not bound by statues, where the statutes are introductiva novae legis2 but if they are declarative anti)ui juris #that is to say of nature, etc.(. 3nd since they have come into the 4ingdom, the 4ing has jurisdiction over them to administer justice, but that shall be secundum legem naturae which is called by some the +aw ,erchant, which is the law universal of the world." 3nd the justices being called on, certified that the good of this plaintiff were not forfeited to the crown as a waif #though those of a subject would have been( because he was an alien merchant. It is obvious that at that time the law merchant was a thing distinct from the common law. This accounts for the very remar4able fact that there is no

mention whatever of bills of exchange, or other mercantile customs in our early boo4s2 not that they did not exist, but they were tried in the staple, and therefore were not mentioned in the boo4s of the common law2 just as the matters over which the Courts of 3dmiralty, or *cclesiastical Courts, have exclusive jurisdiction, are at this day never treated as part of the common law. 'ut as the courts of the staple decayed away, and the foreign merchants ceased to live subject to a peculiar law, those parts of the law merchant which differed from the common law either fell into disuse, or were adopted into the common law as the custom of merchants, and after a time began to appear in the boo4s of common law. 5ow this great change which was brought about does not appear, but though bills of exchange were in common use among merchants in the -.th century2 the first mention of one in an *nglish report is in Cro. 6acl., in the beginning of the -7th century2 and though, the right of rei vindicatio must have prevailed in the continent from the time of the revival of the Civil +aw, the first mention of it in our boo4s is as late as -809. It seems )uite impossible that such matters should not have been the subject of litigation in some shape or other in *ngland for centuries before those times." The remai"'er o& his se% io" is 'evo e' o e(%er! s &rom 23 h Ce" #ry !ri" e' ma er o" he s#b$e% o& La* Mer%ha" , *i h o"ly mi"or al era io"s by he a# hor o& his boo0s. "'lac4stone, whom internationalists prefer to )uote over +ord Co4e, classified the +aw ,erchant as one of the "customs" of *ngland, and so a part of the common law2 but it is not properly a custom, as it is not restricted to a single community, and is not the municipal law of a single country, but regulated commercial contracts in all civili:ed countries. The body of mercantile usage"s which compose this branch of law, having no dependence upon locality, does not need to be established by witnesses, but judges are bound to ta4e official notice of it. The principle branches of the law merchant are the law of shipping, the law of marine insurance, the law of sales, and the law of bills and notes. The feudal law, which grew up in a time when property consisted chiefly on land upon whose alienation great restraints were laid, was found inade)uate for the needs of the mercantile classes who were coming into prominence. The courts when commercial contracts were brought before them, adonted from the rules which regulated their business dealing and made them rules of law. ,any of these rules were in direct contradiction to the common law. ,agna Charta contained a special provision guaranteeing to merchants, among other things, the right "to buy and sell according to their ancient customs," and many later statutes were enacted for their special protection. 3s the custom of merchants began to encroach upon the common law, there was a determined effort on the part of lawyers to resist it. It was attempted to ma4e the custom of merchants a particular custom, peculiar to a single community, and not a part of the law of the land. It was finally decided in the reign of 6ames I #-89.--8;<( to be a part of the law of the realm. 3n attempt was then made to restrict the application of the law merchant to persons who were actually merchants, but the courts, after

considerable variance, held that it applied to the same con-tracts between parties and merchants." The !ara)ra!hs &ollo*i") o he e"' o& his se% io", as he o"e imme'ia ely !re%e'i"), are a0e" &rom he ar i%les o& Mer%a" ile La* i" he Ameri%a" ="iversal Cy%lo!e'ia, Eol#me lO, Ne* -or0, 299;, S. W. +ree"As. They serve o 'emo"s ra e o he rea'er ho* alie" his la* is o o#r Co"s i # io" a"' o o#r a"%ie" %ommo" la* o" real !ro!er y, a"' o sho* ha he r#e !#r!ose o& i is i"'ee' o %o"&is%a e all real !ro!er y o he #ses o& a !riva e mer%a" ile %ar el. ",ercantile law is the only branch of municipal law which, from the necessity of the case, is similar, and in many respects identical, in all the civili:ed and trading countries of the world. In determining the relations of the family, the church, and the state, each nation is guided by its own peculiarities of race, of historical tradition, of climate, and numberless other circumstances which are almost wholly unaffected by the conditions of society in the neighboring stores. 'ut when the arrangements for buying, selling, and transmitting commodities from state to state alone are in )uestion, all men are very much in the same position. The single object of all is that the transaction may be effected in such a manner as to avoid what in every case must be sources of loss to somebody, and by which no one is ultimately a gainer, vi:., disputes and delay. 3t a very early period in the trading history of modern *urope, it was found that the only method by which these objects could be attained was to establishing a common understanding on all the leading points of mercantile, and more particularly of maritime law. This was effected by the establishment of those maritime codes, of which the most famous, though not the earliest, was the Consolato del ,are. It is sometimes spo4en of as a collection of maritime laws of 'arcelona, but it would seem rather to have been a compilation of the laws and trading customs of various Italian cities such as =enice, >isa, &enoa, and 3malfi, together with those of the cities with which they chiefly traded - 'arcelona, ,arseilles, and the li4e. That it was published at 'arcelona towards the end of the -.th century, or the beginning of the -/th century, in the Catalonian dialect, indicates that it is of Italian origin. 3s commerce extended itself to the northwestern coasts of *urope, similar codes appeared. There was the &uidon de la ,er, the ?oles d" @leron, the sages de Aamme, and most important of all the ordinances of the great 5enseatic +eague #Aeutsche 5ansabund(. 3s the central people of *urope, the $rench early became distinguished as cultivators of maritime law, and one of the most important contributions that ever was made to it was the famous ordinance of -8B-, which formed part of the ambitious and in many respects successful legislation and codification of +ouis CI=. 3ll these earlier attempts at general mercantile legislation were founded, as a matter of course, on the ?oman Civil +aw, or rather on what that system had borrowed from the laws which regulated the intercourse of the trading communities of &reece, perhaps >hoenicia and Carthage, and which had been reduced to a system by the ?hodians. "$rom the intimate relations which subsisted between !cotland and the continent of *urope, the lawyers of !cotland became early ac)uainted with the commercial

arrangements of the continental states2 and to this cause is said to be ascribed the fact that down to the period when the affairs of !cotland were thrown into confusion by the rebellions of -7-< and -7/<, mercantile law was cultivated in !cotland with much care and success. The Dor4 of +ord !tair, the greatest of all the legal writers of !cotland, is particularly valuable in this department. "In *ngland the case was very different. 3fter the loss of her $rench provinces in -</., the legal system of *ngland became wholly insular, and there was no branch of it which suffered more in conse)uence of being cut off from the general stream of *uropean progress than the law merchant. It was +ord ,ansfield who, whether guided by the wider traditions of his original country, !cotland, or deriving his views from the scourge from which these traditions sprung, vi:., the ?oman +aw, as modified and developed by continental jurisprudence, introduced those doctrines of modem commercial law which *nglish lawyers have since developed with so much acuteness and logical consistency. ,any attempts have recently been made to assimilate the commercial law of *ngland and !cotland, and a commission of lawyers of both countries was recently appointed for the purpose. @ne of the most important results of their deliberations was the mercantile law amendment act, -0 and ;9 =ict. c. 89." XII LAW MERCHANT The 'ire% rela io"shi! be *ee" Fe'eral Reserve No es a"' he I"%ome Ta( as )ro#"'e' i" he La* Mer%ha" is "o*here more s ri0i")ly reveale' ha" i" he &ollo*i") e(%er! &rom he Ri%har' Woo''esso"As e(ha#s ive Le% #res o" The La*s o& E")la"', o be &o#"' i" Li ellAs La* Library, Phila'el!hia, 29;:. "The +aw of %ations is another constituent part of the 'ritish jurisprudence, and has always been most liberally adopted and attended to by our municipal tribunals, in matters where that rule of decision was proper to be resorted to, as )uestions respecting the privileges of ambassadors, and the property in maritime captures and pri:es. "'ut the branch of the +aw of %ations, which there have been the most fre)uent occasions of regarding, especially since the great extension of commerce, and intercourse with foreign traders, is called the +aw of ,erchants. This system of generally received law has been admitted to decide controversies touching bills of exchange, policies of insurance, and other mercantile transactions, both where the subjects of any foreign power, and #for the sa4e of uniformity( where natives of this realm only, have been interested in the event. Its doctrines have of late years been wonderfully elucidated, and reduced to rational and firm principles in a series of litigations before a judge, long celebrated for his great talents, and extensive learning in general jurisprudence, and still more venerable for his animated love of justice #+ord ,ansfield2 to whose name we may now add that of +ord *llenborough(. nder his able conduct and direction, very many of

these causes have been tried by a jury of merchants in +ondon2 and such )uestions of this 4ind as have come before the Court of the ?ing"s 'ench in term time, are laid before the public by a copious and elaborate compiler #!ir 6ames 'urrows(. "The +aw of ,erchants, as far as it depends on custom, constitutes a part of the voluntary, not of the necessary, +aw of %ations. It may, therefore, so far as it is merely positive, be altered by any municipal legislature, where its own subjects only are concerned. Innovations may also be made in the voluntary +aw of %ations, so as to effect the inhabitants of different states, either by the sovereign thereof #*den"s >rim. +aw, sect. .( or any confederated union of human authority." There, he", i" he ="i e' Na io"s, *e &i"' o#r 7%o"&e'era e' #"io" o& h#ma" a# hori y7 im!osi") he La* Mer%ha" #!o" every h#ma" %rea #re alive. Ho* !a he i% a"' &ri)h e"i") i is o see a"' hear alle)e' Ameri%a" Pa rio s !#bli%ly 'e%laimi") ha hey are bei") 'e!rive' o& heir ri)h s by Comm#"is hireli")s o# o& he Mos%o* Fremli", *he" he !erversio" o& he Ameri%a" Co"s i # io" %a" %learly be 'is%er"e' o have i s sole a# he" i% so#r%e i" he la* 'eli"ea e' i" he hree !ara)ra!hs above. To rea' he *hole o& Smi hAs le% #res is a sho%0i") e(!erie"%e, &or i reveals he me%ha"i%s o& he e" ire s*i"'le !er!e ra e' a)ai"s he Ameri%a" !eo!le by heir o*" bes 7Co"serva ive7 !oli i%ia"s a"' or)a"i?a io"al 7e'#%a ors.7 To rea' Smi h is o 'is%over "o o"ly he mea"i") o& Fe'eral Reserve No es, or he 2>;> &orm, b# also he $oi" re #r" a"' he #r"i") o& &amilies i" o hives o& *arri") %a""ibals. The mo o is he", 7Every ma" a"' *oma" a"' %hil' a ra'er #!o" he La* Mer%ha" ,7 *he her he *ill or "o . The e%h"i%al erm &or a" i"'ivi'#al ra'er or mer%ha" is Sole Tra'er. Le #s see *ha *e may 'is%over abo# Sole Tra'ers i" Coh" William Smi hAs Mer%a" ile La*, a)ai" i" Li ellAs series. "The word trader is used in the ban4rupt laws in a definite and peculiar sense, which will be treated of in the $ourth 'oo4 under the title of 'an4ruptcy. $or the general purposes of law it seems to have a wider signification than is either there, or in the common parlance of man4ind, attributed to it2 and perhaps it is not going too far to say that every man who does an act upon which any of the rules of mercantile law operate becomes, )uoad that act, a trader though his ordinary pursuits may not be of a mercantile character. Thus, it is laid down by boo4s of authority that if a man draws a bill of exchange, he is, for the purposes of that bill, a merchant #Comyns digest, ,erchant, 3.-(. The $rench law defines the word "trader" as follows1 "!ont commercan ceux )ui exercent les actes de commerce et en font leur profession habituelle." #Co.B. B<. 8.- s. 8.B( "The law of *ngland, following in this respect the maxims of sound and liberal policy, licenses every individual, who is desirous of so doing, to assume the character and functions of a trader, unless he fall within the letter of some

special prohibition, which ta4es his case out of the ordinary rule, and subjects him to a peculiar dis)ualification2 nay, such is the anxiety with which the law watches over the interests of trade and commerce, that it will not allow a man to deprive himself of his right of embar4ing in commercial enterprise. 3 bond or other contract by which a person binds himself generally not to exercise his trade or business in this country is merely void #,itchell v, ?eynolds, - >. Dins. -B-. +aw +ib. %ew !eries, vol. vii(2 for "the law," to use the expressions of 'est, C.6., "will not permit anyone to restrain a person from doing what his own interest and the public welfare re)uire that he should do." #5omer v. 3shford, . 'ing. .;B(. 3 partial restraint of this 4ind will indeed be upheld, provided it be reasonable in its nature and extent, and founded on an ade)uate consideration #,itchell v. ?eynolds, ubi supra2 Chesman v. %ainby, ; !tr. 7.0(. 'ut if it want these ; )ualities it will be void #see 5orner v. &ravs, 7 'ing. 7/.2 Eoung v. Timmons, - Tyrwh. ;;8(. 3nd all contracts in restraint of trade are, if not special circumstances appear to show them to be reasonable, invalid in the eye of the law #5orner v. &raves, ubi supra(. >articular personal dis)ualifications, however, as has been said, exist, which incapacitate the individuals laboring under them from engaging in commercial pursuits. It may be proper to adduce one or two examples of this sort of disability2 the instances of most usual occurrence are to be found in the law relating to the capacity of aliens, infants, married women, and clergymen." No*, i& i is everyo"eAs lo or %hoi%e o& '# y o be%ome a mer%ha" or ra'er merely by !#r%hasi") a meal, &or he sa0e o& e(am!le, a"' i& %o" ra% s i" res rai" o& ra'e are all absol# ely ille)al, a"' i& a marria)e %o" ra% %a" !reve" s!o#ses &rom bei") or be%omi") Sole Tra'ers, he" 'oes he aboli io" o& marria)e serve he e"'s o& !riva e mer%a" ilism or o& some hi") %alle' 7Comm#"ism1A Le As %o"si'er a"o her shor e(%er! &rom Smi h, his o"e 'eali") *i h 7$oi" e"a"%y7 or i s varia" 7 e"a"%y by he e" ire yJ7 "$or the most distinguished incident of joint tenancy is the 6us acrescendi, by which, when one joint tenant dies, his interest is not transmitted to his heirs, in the case of descendible property, nor to his personal representatives, in the case of personal effects or chattels, but vests in the survivor or survivors2 this right of survivorship being admitted e)ually in regard to personal chattels, as in estates of every denomination. %ow if stoc4 in trade were subject to the same claim, one of two evils might ensue1 either the family of a deceased partner might be left destitute2 or man"s fear of employing a considerable part of their property in these underta4ings might hec4 the spirit of commerce. It is therefore, the established law of merchants, that among them joint tenancy and survivorship do not prevail. #Co.+i. -B;a2 3non. ; 'rowne. 002 3non. %oy. <<2 5all v. 5uffam, ; +ev. -BB2 3nnand v. 5oniwood , ; Ch.C. -;0(. "This right of survivorship !ir Dilliam 'lac4stone apprehends to be the reason why neither the 4ing nor any corporation can be a joint tenant with a private person. #; Comm. -B/(. 'ut the rule is more extensive1 for two corporations cannot be joint tenants together #+itt. s. ;082 C.+i. -B0b, -09a(."

3n understanding of the full implications of such law is the only basis on which we can hope to retrieve our rights and our ?epublic in the courts or, indeed, anywhere else. XIII NEGOTIABLE INSTRUMENTS Re)ar'i") Fe'eral Reserve No es a"' *ha hey are or *ha hey re!rese" , le #s %o"si'er a"o her shor !assa)e &rom Smi hAs Mer%a" ile La*, !ar i%#larly o" he s#b$e% o& "e)o iable i"s r#me" s, 0ee!i") i" mi"' ha a Fe'eral Reserve No e is a "e)o iable i"s r#me" , "e)o iable merely by 'elivery as 7!a!er )ol'7 " nder the head of mercantile property, it seems right to advert to a peculiarity in the mode in which title may be ac)uired to a description of chattels, most usually found in the hands of mercantile men, vi:., negotiable instruments. The common and well-4nown rule of law is that property in a chattel personal cannot, except by sale in mar4et overt, be transferred to a vendee, however innocent, by a party who does not himself possess it. #!ee >eer v. 5umphrey, ; 3 F *. /0<(. The contrary, however, is the case with negotiable instruments, a transfer of which, when in that state in which by law and the usage of trade they accustomably pass from one man to an-other by delivery, causes the property in them, li4e that in coin, to pass along with the possession #see &rant v. =aughn, . 'urr. -<-82 +ang v. !myth, 7 'ingh. ;B/2 &orgier v. ,ieville, . ' F C /<( provided that the transferee has been guilty of no fraud #&ross negligence was ruled to be the correct expression in Croo4 v. 6adis, 8 C F > -0/2 < ' F 3d 090(. The negligence must however be so gross as to render it impossible that the instrument should have been ta4en bona fide, and the case of 5ill v. Cubitt seems not to be supportable. 'ac4house v. 5arrison, < ' F 3dol. --9<. !ee the observation of >ar4e, '., in $oster v. >earson, < Tyrwh. ;<<2 Cunliffe v. 'ooth, . 'ing. %.C. B;-. In the case however of &oodman v. 5arvey, / 3 F * B79, the G.'. ruled that gross negligence would not be a sufficient answer where a party has given consideration for the bill, and that gross negligence could only be important so far as it supplied evidence of mala fides #bad faith( in ta4ing them, in which case he would be forced to bear the loss.. "3n instrument is, properly spea4ing, negotiable when the legal right to the property which they secure may be conveyed. $or there are other instruments #!ee &lynn v. 'a4er, -. *ast <902 Talyer v. Hymer, . ' F 3d ..B2 s, - , B: , /<.2 - +loyd F Dalsh. -B/. !ee $ord v. 5op4ins, - !al. ;B/, and see - 'urr, /<;, 3mbl. -B7, and Turner =. Crui4shan4, there cited( which, though salable in the mar4et by the usage of merchants, can yet only be put in suit in the name of the original contractee, and are not, properly spea4ing, negotiable. ,oreover, instruments which in one state would be negotiable, may by being put into another, cease to be so. Thus, though a bill or note will be negotiable if indorsed in blan4, yet the holder may, by a special endorsement, determine its negotiability. #!egourney v. +loyd, B ' F C 8;;2 < 'ingh. <;<2 3ncher v. 'an4 of

*ngland, Aouglas 8.0. !nee v. >rescott - 3r4. ;/0, per +ord 5ardwic4e, Treutell v. 'arandon, B Taunt. -99. Cunliffe v. Dhitefield, . 'ing. %.C. B;B" XIV NOW YOU SEE IT, NOW YOU DON'T We 'o "o "ee' o rea%h so &ar ba%0 as he 'e aile' early %ases %i e' above o sho* he re%0less 'isre)ar' ha a(,a"',mo"ey li i)a" s have ha' &or he vas amo#" o& la* available o" *hi%h o mo#" o&&e"sives a)ai"s he )ra"' lar%e"y i" o#r a( a"' mo"ey la*s. O"ly *o %ases, or e( ra% s &rom hem, *ill s#&&i%e o 'emo"s ra e )ro#"'s a"' ar)#me" s available o a"yo"e *ho a0e he ro#ble o 'is%over hem. O"e o& hese %ases is 6ri ish, a"' he o her Ameri%a", as la e as 23:@, *i h 'omes i% re&ere"%es o he 7#"hear' o&A la* mer%ha" . The &irs is he %ase o& +oo'*i" v. Robar s, E(%heB#er, 2945 .L.R. 2> E(. 884, 8;@/, as &ollo*sJ "&odburn, C.6., 5aving given the fullest consideration to this argument, we are of opinion that it cannot prevail. It is founded on the view that the law merchant thus referred to is fixed and stereotyped, and incapable of being expanded and enlarged so as to meet the wants and re)uirements of trade in the varying circumstances of commerce. It is true that the law merchant is sometimes spo4en of as a fixed body of law, forming part of the common law, and as it were coeval with it. 'ut as a matter of legal history, this view is altogether incorrect. The law merchant thus spo4en of with reference to bills of exchange and other negotiable securities, though forming part of the general body of the lex mercatoria, is of comparatively recent origin. It is neither more nor less then the usages of merchants and traders in the different departments of trade, ratified by the decisions of Courts of law, which. upon such usages being moved before them, have adopted them as settled law with a view to the interests of trade and the public convenience, the Court proceeding hearing on the well-4nown principle of law that, with reference to the transactions in the different departments of trade, Courts of law, in giving effect to the contracts and dealings of the parties, will assume that the latter have dealt with one another on the footing of any custom or usage prevailing generally in the particular department. 'y this process, what before was usage only, unsanctioned by legal decision, has become engrafted upon, or incorporated into, the common law, and may thus be said to form part of it. "Dhen a general usage has been judicially ascertained and established," says +ord Campbell, in 'randao v. 'arnett #-; Cl F $ at p. B9<(, "it becomes a part of the law merchant, which Courts of justice are bound to 4now and recogni:e." "'ills of exchange are 4nown to be of comparatively modern origin, having been first brought into use, so far as it is at present 4nown, by the $lorentines in the twelfth, and by the =enetians about the thirteenth century. The use of them gradually found its way into $rance, and, still later and but slowly, into *ngland. De find it stated in a law tract, by ,r. ,c+eod, entitled !pecimen of a Aigest of the +aw of 'ills of *xchange, printed, we believe, as a report to the government,

but which, from its research and ability, deserves to be produced in a form calculated to insure a wider circulation, that ?ichard ,alynes, a +ondon merchant, who published a wor4 called the +ex ,ercatoria, in -8;;2 and who gives a full account of these bills as used by the merchants of 3msterdam, 5amburg, and other places, expressly states that such bills were not used in *ngland. There is reason to believe, however, that this is a mista4e. ,r. ,c+eod shows that promissory notes, payable to bearer, or to a man and his assigns, were 4nown in the time of *dward I=. Indeed, as early as the statute of . ?ich.;, c.., bills of exchange are referred to as a means of conveying money out of the realm, though not as a process in use among *nglish merchants. 'ut the fact that a +ondon merchant writing expressly on the law merchant was unaware of the use of bills of exchange in this country, shows that that use at the time he wrote must have been limited. 3ccording to >rofessor !tory, who herein is, no doubt, perfectly right, "the introduction and use of bills of exchange in *ngland," as indeed it was everywhere else, "seems to have been founded on the mere practice of merchants, and gradually to have ac)uired the force of a custom." Dith the development of *nglish commerce the use of these most convenient instruments of commercial traffic would of course increase, yet, according to ,r. Chitty, the earliest case on the subject to be found in the *nglish boo4s is that of ,artin v. 'oure #Cro. 6ac. 8(, in the first 6ames I. p to this time the practice of ma4ing these bills negotiable by endorsement had been un4nown, and the earlier bills are found to be made payable to a man and his assigns, though in some instances to bearer. 'ut about this period, that is to say at the close of the sixteenth or the commencement of the seventeenth century, the practice of ma4ing bills payable to order, and transferring them by endorsement, too4 its rise. 5artmen, in a very learned wor4 on 'ills of *xchange, recently published in &ermany states that the first 4nown mention of the endorsement of these instruments occurs in the %eapolitan >ragmatica of -897. !avary, cited by ,ons. %ouguier, in his wor4 Aes +ettres de change, had assigned it to a later date, namely -8;9. $rom its obvious convenience, this practice speedily came into general use, and as part of the general custom of merchants, received the sanction of our courts. 3t first the use of bills of exchange seems to have been confined to foreign bills between *nglish and foreign merchants. It was afterwards extended to domestic bills between traders, and finally to bills of all persons, whether traders or not1 see Chitty on 'ills, Bth *d., p. -.. "In the meantime, promissory notes had also come into use, differing herein from bills of exchange in that they were not drawn upon a third party, but contained a simple promise to pay by the ma4er, resting, therefore, upon the security of the ma4er alone. They were at first made payable to bearer, but then the practice of ma4ing bills of exchange payable to order, and ma4ing them transferable by endorsement, as had been done with, bills of exchange, speedily prevailed. 3nd for some time the courts of law acted upon the usage with reference to promissory notes, as well as with reference to bills of exchange.

"In -8B9, in the case of !haldon v. 5entley #; !how. -89( an action was brought on a note under seal by which the defendant promised to pay to bearer -99I, and it was objected that the note was void because not made payable to a specific person. 'ut it was said by the Court, "Traditio facit chatam lo)ui, and by the delivery he #the ma4er( expounds the person before meant2 as when a merchant promises to pay to the bearer of the note, anyone that brings the note shall be paid." 6ones, 6., said that "it was the custom of merchants that made that good." In 'romwich v. +loyd the >laintiff declared upon the custom of merchants in +ondon, on a note for money payable on demand, and recovered2 and Treby, C.6., said that "bills of exchange were originally between foreigners and merchants trading in *ngland, and then afterwards between any traders whatsoever, and now between any persons, whether trading or not2 and therefore, the plaintiff need not allege any custom, for now these bills were of that general use that upon an indebitatus assumpsit they may be given in evidence upon the trial." To which >owell, 6., added, "@n indebitatus for money received to the use of the plaintiff the bill may be left to the jury to determine whether it was given for value received." #; +utw. -<B;( "In Dilliams v. Dilliams #- Carth. ;80(, where the plaintiff brought his action as endorsee against the payee and endorser of a promissory note, declaring on the custom of merchants, it was objected on error, that the note having been made in +ondon, the custom if any should have been laid as the custom of +ondon. It was answered "that this custom of merchants was part of the common law, and the Court would ta4e notice of it ex officio2 and, therefore, it was needless to set forth the custom specially in the declaration, but it was sufficient to say that such a person secundum usum et consuetudinem mercatorum, drew the bill." 3nd the plaintiff had judgment. "Thus far, the practice of merchants, traders, and others of treating promissory notes, whether payable to order or bearer, on the same footing as bills of exchange had received the sanction of the courts, but 5old having become Chief 6ustice, a somewhat unseemly conflict arose between him and the merchants as to the negotiability of promissory notes, whether payable to order or to bearer, the Chief 6ustice ma4ing what must now be admitted to have been a narrowminded view of the matter, setting his face strongly against the negotiability of these instruments, contrary, as we are told by authority, to the opinion of Destminster 5all, and in a series of successive cases, persisting in holding them not to be negotiable by endorsement or deliver. The inconvenience to trade arising therefrom led to the passing of the statute of . F / 3nne, c.0, whereby promissory notes were made capable of being assigned by endorsement, or made payable to bearer, and such assignment was thus rendered valid beyond dispute or difficulty. "It is obvious from the preamble of the statute, which recites that "F had been held that such notes were not within the custom of merchants," that these decisions were not acceptable to the profession of the country. %or can there be

much doubt that by the usage prevalent amongst merchants, these notes had been treated as securities negotiable by the customary method of assignment as much as bills of exchange properly so-called. The !tatute of 3nne may indeed, practically spea4ing, be loo4ed upon as a declaratory statute, confirming the decisions prior to the time of +ord 5olt. "De now arrive at an epoch when a new form of security for money, namely, goldsmiths" or ban4ers" notes, came into general use. 5olding them to be part of the currency of the country, as cash, +ord ,ansfield and the Court of Hing"s 'ench had no difficulty in holding, in ,iller v. ?ace #- 'urr. /<;(, that the property in such a note passes, li4e that in cash, by delivery, and that a party ta4ing it bona fide, and for value, is conse)uently entitled to hold it against a former owner from whom it has been stolen. "In li4e manner it was held, in Collins v. ,artin #- '. F >. 8/B(, that where bills indorsed in blan4 had been deposited with a ban4er, to be received when due, and the latter had pledged them with another ban4er as security for a loan, the owner could not bring trover to recover them from the holder. "'ut these decisions of course preceded on the ground that the property in the ban4-note payable to bearer passed by delivery, that in the bill of exchange by endorsement in blan4, provided the ac)uisition had been made bona fide. "3 similar )uestion arose in Doo4ey v. >ole #/ '. F 3ld. l(, in respect of an exche)uer bill, notoriously a security of modern growth. These securities being made in favor of blan4 or order, contained this clause, "If the blan4 is not filled up, the bill will be paid to bearer." !uch an exche)uer bill, having been placed without the blan4 being filled up, in the hands of the plaintiff"s agent, had been deposited by him with the defendants, on a bona fide advance of money. It was held by three judges of the Gueen"s 'ench, 'ayley, 6., dissentient, that an exche)uer bill was a negotiable security, and judgment was therefore given for the defendants. The judgment of 5olroyd, 6., goes fully into the subject, pointing out the distinction between money and instruments which are the representatives of money, and other forms of property. "The courts," he says, "have considered these instruments, either promises or orders for the payment of money, or instruments entitling the holder to sum of money, as being appendages to money, and following the nature of their principal." 3fter referring to the authorities, he proceeds1 "These authorities show, that not only money itself may pass, and right to it may arise, by currency alone, but further, that these mercantile instruments, which entitle the bearer of them to money, may also pass, and the right to them may arise, in li4e manner, by currency of delivery. These decisions proceed upon the nature of the property #i.e., money(, to which such instruments give the right, and which is in itself current, and the effect of the instruments, which either give to their holders, merely as such, a right to receive the money, or specify them as the persons entitled to receive it.

"3nother very remar4able instance of the efficacy of usage is to be found in much more recent times. It is notorious that, with the exception of the 'an4 of *ngland, the system of ban4ing has recently undergone an entire change. Instead of the ban4er issuing his own notes in return for the money of the customer deposited with him, he gives credit in account to the depositor, and leaves it to the latter to draw upon him, to bearer or order, by what is now called a chec4. pon this state of things the general course of dealing between ban4ers and their customers has attached incidents previously un4nown, and by these decisions of the courts have become fixed law. Thus, while an ordinary drawee, although in possession of funds of the drawer, is not bound to accept, unless by his own agreement or consent, the ban4er, if he has funds, is bound to pay on presentation of a che)ue on demand. *ven admission of funds is not sufficient to bind money deposited with a ban4er is not only money lent, but the ban4er is bound to repay it when called for by the draft of the customer #!ee >ott v. Clegg, -8, FD .;-(. 'esides this, a custom has grown up among ban4ers themselves of ma4ing che)ues as good for the purposes of clearance, by which they become bound to one another. "Though not immediately to the present purpose, bill of lading may also be referred to as an instance of how general mercantile usage may give effect to a writing which without it would not have had that effect at common law. It is from mercantile usage, as provided in evidence, and ratified by judicial decision in the great case of +ic4barrow v. ,ason, that the efficacy of bills of lading to pass the property in goods is derived. "It thus appears that all these instruments which are said to have derived their negotiability from the +aw ,erchant had their origin, and that at no very remote period, in mercantile usage, and were adopted into the law by our courts as being in conformity with the usages of trade2 of which, if it were needed, a further confirmation might be found in the fact that, according to the old form of declaring on bills of exchange, the declaration always was founded on the custom of merchants. " sage, adopted by the Courts, having been thus the origin of the whole of the so-called +aw ,erchant as to negotiable securities, what is there to prevent our acting upon the principle acted upon by our predecessors, and followed in the precedents they have left to usJ Dhy is it to be said that a new usage which has sprung up under altered circumstances, is to be less admissible than the usages of past timeJ Dhy is the door to be now shut to the admission and adoption of usage in a manner altogether of cognate character, as though the law had been finally stereotyped and settled by some positive and peremptory enactmentJ It is true that this script purports, on the face of it, to be a security not for money, but for the delivery of a bond2 nevertheless we thin4 that, substantially and in effect, it is a security for money, which, till the bond shall be delivered, stands in the place of that document, which when delivered, will be beyond doubt the representative of the sum it is intended to secure. !uppose the possible case that

the borrowing government, after receiving one or two installments, were to determine to proceed no further with its loan, and to pay bac4 to the lenders the amount they had already advanced2 the script with its receipts would be the security to the holders of the amount. The usage of the money mar4et has solved the )uestion whether script should be considered security for, and the representative of, money, by treating it as such. "The universality of a usage voluntarily adopted between buyers and sellers is conclusive proof of its being in accordance with public convenience2 and there can be no doubt that by holding this species of security to be incapable of being transferred by delivery, and as re)uiring some more cumbrous method of assignment, we should materially hamper the transactions of the money mar4et with respect to it, and cause great public inconvenience. %o doubt there is an evil arising from the facility of transfer by delivery, namely, that it occasionally gives rise to the theft or misappropriation of the security, to the loss of the true owner. 'ut this is an evil common to the whole body of negotiable securities. It is one which may be in a great degree prevented by prudence and care. It is one which is counterbalanced by the general convenience arising from facility of transfer, or the usage would never have become general to ma4e script available to bearer, and to treat it as transferable by delivery. It is obvious that no injustice is done to one who has been fraudulently dispossessed of script through his own misplaced confidence, in holding that the property in it has passed to a bona fide holder for value, seeing that he himself must have 4nown that it purported on the face of it to be available to bearer, and must be presumed to have been aware of the usage prevalent with respect to it in the mar4et in which he purchased it. "+astly, it is to be observed that the tendency of the Courts, except only in the time of +ord 5olt, has been to give effect to mercantile usage in respect to securities for money and that where legal difficulties have arisen the legislature has been prompt to give the necessary remedy, as in the case of promissory notes and of the *ast India bonds." The se%o"' %ase is a" Ameri%a" %ase i"volvi") a *ell,0"o*" %or!ora io" *hi%h has bee" aro#"' si"%e 2433, &o#"'e' i" ha year by Aaro" 6#rr a"' o hers o !rovi'e he Ci y o& Ne* -or0 *i h !#re 'ri"0i") *a er. I is he %ase o& Presi'e" a"' Dire% ors o& Ma"ha a" Com!a"y v. Mor)a", Co#r o& A!!eals o& Ne* -or0, 23:@ .:;: N- 89, ;9,5>/. Car'o?o, C.J "The %egotiable Instruments +aw of %ew Eor4 is much broader than its *nglish model. The *nglish act is expressly limited to bills of exchange, chec4s, and promissory notes. It does not cover bonds or other classes of securities #Chalmers, 'ills of *xchange, p. .8;(. The argument has been made that bonds are excluded from our statute also. The provisions of section ..;, directed as they are to bonds, municipal and corporate, leave no support for that position. The statute of %ew Eor4 does not confine itself, if found, to an enumeration of certain )ualities which, if found, will ma4e instruments negotiable. It enumerates

others which will ma4e them non-negotiable. 'y section ;9, "an instrument to be negotiable must conform to the following re)uirements." @f the five re)uirements that follow, we )uote the second and the third. It "must contain an unconditional promise or order to pay a sum certain in money." It "must be payable on demand, or at a fixed or determinable future time." 'y section ;., "an instrument payable on a contingency is not negotiable, and the happening of the event does not cure the defect," and by section ;/ there is a li4e declaration as to the non-negotiable character of any "instrument which contains an order of promise to do any act in addition to the payment of money," with enumerated exceptions not important for the case at hand. "These are the tests to which the instrument in suit must be subjected. It is promissory in all its features, yet its promises are of a two-fold order. There is a promise for the payment of money, subject to the specified conditions, and welded into this there is another promise, again subject to conditions, for the delivery of bonds. !o far as the instrument is one for the payment of money, it is open to the objection that it is payable not absolutely nor at a fixed or determinable time, but subject to a contingency. The " holder is to receive interest on presentation of the annexed warrant, subject, however, to the condition that moneys of such payment have been supplied by the government of 'elgium. !o far as the instrument is one for the delivery of bonds, it is open to the same objection, and to the additional one that it is a promise to ma4e payment not "in money" but in something else #!ects ;9, ;/2 5ostatter v. Dilson, .8 'arb. .972 'rown v. ?ichardson, ;9 %E /7;2 5odges v. !huler, ;; %E --/2 Ainsmore v. Auncan, <7 %E <7., <B9(. The statute says that instruments are "not negotiable" when they embody such provisions. "The +aw ,erchant cannot prevail against prohibitions so specific. In holding otherwise, we should do more than supplement the statute. De should disregard and contradict it. The plaintiffs case is not helped by section 7 to the effect that "in any case not provided for in this chapter the rules of the +aw ,erchant shall govern." The difficulty is that the case is provided for. nforeseen situations may reveal gaps in the statutory rules. In such circumstances the +aw ,erchant is competent to fill them. It is without power to annul what the statute ordained." XV THE BOON OF DEBT The se%o"' %ase above sho*s %learly he "ee' &or he 'e%isio" )ive" i" he Erie R.R. %ase< he "ee' o es ablish he La* Mer%ha" as a r#le o& la* &or all %ases. Th#s, a his !oi" *e %a" har'ly 'is!# e he %o" e" io" o& William ha 7 he %#s om o& mer%ha" s, or le( mer%a oria, ho*ever 'i&&ere" &rom he )e"eral r#les o& he %ommo" la*, is ye i")ra& e' i" o i a"' ma'e a !ar o& i , bei") allo*e' &or he be"e&i o& ra'e o be o& he # mos vali'i y i" all %ommer%ial ra"sa% io"s.7 .2 6.Com. 45/. We m#s %o"%l#'e ha he La* Mer%ha" , as o!e"ly a%0"o*le')e' i" %o#" less so#r%es, is "o hi") b# he la* o& ra* a"' "a0e' # ili y. This la* is, i" !oi" o& &a% , a" e'i&i%e ere% e' by he mer%ha" , as *e have rea' be&ore,

*i h %om!ara ively li le assis a"%e ei her &rom he %o#r s or he le)isla #res. We are i" he )ri!s o& a !riva e mer%a" ile )over"me" *hi%h has #s#r!e' o#r Co"s i # io". =!o" he Fe'eral Reserve No es, he", *e see ha !riva e i" eres s have %rea e' a !riva e !erma"e" 'eb orI%re'i or rela io"shi! #!o" *hi%h hey have %o" rive' a sys em o& alle)e' %om!#lsio" .7vol#" ary %om!lia"%e7/ o &ile a""#al re!or s o& i"&orma io" o" i"%ome, all i" he "ame o& 7The +over"me" ,7 b# i" &irm %o" rol o& !riva e i" eres s, %y"i%al, so!his i%a e', %#""i"), a"' br# al, %o"s%ie"%eless a"' %rimi"al, i" eres s *hi%h !ro&i mos s#bs a" ially &rom he im!#'e" hoa( o& he !erso"al 7I"%ome Ta(.7 The basis &or he %om!#lsio" o &ile, as i is %alle', is i" he !erma"e" 'eb orI%re'i or rela io"shi!, )ro#"'e' i" he Fe'eral Reserve No es .!er!e #al a""#i y bo"'s/, #!o" so,%alle' So%ial Se%#ri y a"' o her !e%#"iary ma ers )e"erally rela e' o i"s#ra"%e. M#%h o& his la* o& 'eb orI%re'i or is o be &o#"' i" he very a# hori a ive La* a"' =sa)e o& Mer%a" ile A%%o#" s by Ale(a"'er P#lli") o& he I""er Tem!le, sho*i") he so#r%es i" he La* Mer%ha" &rom *hi%h ma"y o& o#r *oes 'erive. Por io"s are B#o e' belo* 'ire% ly, i"'i%a i") he e(%e! io"al le") hs o *hi%h *e have be%ome *el'e' o a 7la*7 ha has "ever bee" a"y hi") more ha" vol#" ary be *ee" *illi") !ar i%i!a" s. 6# his La* Mer%ha" , &or e(am!le, ma0es he a%%o#" s o& ra'ers al*ays liable o" a" im!# a io" o& &ra#' or #"&air"ess o be i"ves i)a e' i" a %o#r o& eB#i y. .See Lor' Co#r "ey v. +o's%hall, 3 Ees. ;48< Ro hs%hil' v. 6roo0ma", : Do* G Clar0e, 299< 5 6li)h, N.S. 2@5< 2 Simo"s 258/. I is !lai"ly eB#i y i" *hi%h lies he %ivil $#ris'i% io" o& he I.R.S. A"' hose *ho e(!e% $#ry rials i" eB#i y have ro%0s i" heir hea's a"' *i'e )a!s i" heir 0"o*le')e. The !ara)ra!hs i"'e" e' belo* are a0e" verba im &rom he e'i io" o& P#lli") i" Li ellAs La* Library, a!!eari") i" 29;4 i" he Ameri%a" e'i io", Phila'el!hia.. They leave "o 'o#b o& he so#r%e o& he )e"eral la* ha is s ra")li") #s. 7The mos )e"eral a"' %om!rehe"sive rela io" i" *hi%h !ar ies %a" s a"' *i h re)ar' o ea%h o her, so as o %rea e a" a%%o#" be *ee" hem, is ha o& 'eb or a"' %re'i or, *hi%h, i" &a% , embra%es all he o her rela io"s )ivi") rise o ma ers o& a%%o#" . This *ill here&ore &orm he s#b$e% o& he &irs se% io" o& he !rese" %ha! er, a"' he remai"i") se% io"s *ill rea o& a)e"%y, !ar "ershi! a"' ba"0ersA a%%o#" s, a"' hose arisi") i" %ase o& ba"0r#! %y a"' i"solve"%y. 7The !ar ies o his a%%o#" are !ro!erly 'e"omi"a e' 'eb or a"' %re'i or, &or every 'eb le)ally im!lies a %re'i )ive" by he !ar y e" i le' o he mo"ey, "o ma er &or ho* shor or ho* lo") a !erio' i may be .see Com&or h E. Rive , : M. G S. 52>/, a"' "o s#%h a%%o#" %a" here&ore be sai' o arise i" %ase o& mere rea'y mo"ey ra"sa% io"s< &or here he %o"si'era io" a"' he !ayme" are !rima &a%ie 'eeme' o be %o" em!ora"eo#s .See 6assey v. 6ar"e , 3 M. G W. 82:. I" %ases o& )oo's sol' &or rea'y mo"ey, a"' a0e" !ossessio" o& by he !#r%haser *i ho# !ayme" , he seller may, i& he !leases, i"sis #!o" a re #r" o& he )oo's< Ho*se v. Cro*e, R G M ; 2;< 6a ema" v. Elma", Cro. Eli?. 9@4< b# he may o& %o#rse ele% o rea he ra"sa% io" as a sale o" %re'i , a"' s#e he !#r%haser imme'ia ely &or he !ri%e./ 76e&ore %o"si'eri") he %ase o& 'eb or a"' %re'i or a%%o#" s i" he !ro!er se"se o& he erm, vi?. *here here are m# #al %re'i s or m# #al !ayme" s, le #s here see *ha are he )e"eral ri)h s a"'

'# ies arisi") &rom he bare rela io" o& 'eb or a"' %re'i or. These %o"sis i" he &irs !la%e i" he !ayme" or o&&er or e"'er o& !ayme" , by he &ormer, a"' he re%ei! i" he amo#" '#e i" 'is%har)e or a%B#i a"%e by he la er< b# #" il his a0es !la%e, he %re'i or is e" i le' a a"y mome" o e"&or%e !ayme" by le)al !ro%ess, *hi%h ri)h %a" o"ly be 'e&ea e' by a% #al !ayme" , or by a%%or' a"' sa is&a% io" by he 'eb or, or by he vol#" ary 'is%har)e or release o& he 'eb by he %re'i or, or a %om!#lsory 'is%har)e by o!era io" o& la*.7 I is rea'ily see" ha *i ho# he Fe'eral Reserve No es o& !er!e #al 'eb , he !erso"al I"%ome Ta( *o#l' %olla!se o& i sel&. Also, *i ho# he re!eal o& he Fe'eral Reserve, he I"%ome Ta( %a""o &all as a'mi"is ere', shor o& o# ri)h re!eal. This is so *he her or "o he so,%alle' Si( ee" h Ame"'me" is re!eale', as i is sai', &or Co")ress %o#l' s ill levy he same a(es *i ho# he Ame"'me" as i %a" *i h he Ame"'me" , $#s as he 6r#shaber %ase says. 6# , *i h rea'y mo"ey a o#r 'is!osal, "o !erma"e" 'eb orI%re'i or rela io"shi! %a" be %om!elle'. Al ho#)h he Fe'eral Reserve No es, re)ar'e' as irre'eemable !er!e #al a""#i y bo"'s, are 7as )oo' as )ol',7 he same as he *or' o& a mer%ha" is 7as )oo' as )ol',7 hey are "o a"' %a" "ever be ei her )ol' or silver, or rea'y mo"ey i" a"y *ay, sha!e or ma""er. Le #s 0ee! i" mi"' ha i is a" esse" ial a rib# e o& a "e)o iable i"s r#me" ha i be !ayable i" mo"ey o"ly, a"' his is he r#le bo h #"'er he La* Mer%ha" , a"' #"'er he !rovisio"s o& he Ne)o iable I"s r#me" s A% o ha e&&e% . A%%or'i")ly a bill or "o e, i& i is o be "e)o iable, %a""o be ma'e !ayable i" )oo's, *are, or mer%ha"'ise, or i" !ro!er y, or i" labor or servi%es. So also a" i"s r#me" is "o "e)o iable i& i is ma'e !ayable i" bo"'s, %or!ora e s i%0, s a e !a!er, s%ri! , %he%0s, &orei)" bills, or )oo' solve" %ash "o es. Le #s 0ee! i" mi"' also ha 7"e)o iabili y7 is "o he same as a% #al re'em! io". A" i"s r#me" "ee' "o ever be re'eeme' i" or'er o be "e)o iable. Th#s, i ma ers li le o he %ommer%ial )a")s ers i" %o" rol o& his 7!riva e e" er!rise7 s*i"'le *ha hey %all heir 7I"%ome Ta(.7 I seems hey are "o* !re!are' o re!la%e i *i h a so,%alle' Sovie ,s yle 7 #r"over, a(7 or 7a''e',val#e a(,7 i& !#bli%a io"s s#%h as hose o& he Hamil o"ia" So%ie y are a"y i"'i%a io". This is esse" ially he same 0i"' o& e(%ise a( o" !yrami'e' &ra"%hises, s#!!or e' by he i" eres o&& !er!e #al 'eb . As he Fre"%hma" says, 7Pl#s %a %ha")e, !l#s %Aes la meme %hose.7 I" a"y %ase, as i s a"'s #"'er he Co'e a"' he la*, here are hree 'is i"% liabili ies #"'er he 7I"%ome Ta(.7 O"e is he liabili y o &ile. T*o is he liabili y o )ive i"&orma io". Three is he liabili y o !ay a(, ea%h a!!are" ly &o#"'e' or )ro#"'e' i" se!ara e la*. This e(!lai"s *hy, as s#%h )alla" )e" leme" as Ar h#r Por h have !oi" e' o# , he Co'e o& he I.R.S. "o*here s!e%i&i%ally 'e&i"es hose 7reB#ire'7 o 'o a"y o& he "e%essary a% s. Their i'e" i y is really 0"o*" o"ly o hose *ho #"'ers a"' he La* Mer%ha" , &or he real $o0er is ha he liabili y a la* ."o merely #!o" he s a # e is 'e&i"able o"ly i" a la* *hi%h is "o*here *ri e" i" i s e" ire y< he La* Mer%ha" o" a%%o#" s, bills o& e(%ha")e, a"' i"s#ra"%e. Ho*ever, i is %lear ha he liabili y o &ile, )ive i"&orma io", a"' o !ay i" he %ase o& $#ris i% !erso"s are all )ro#"'e' i" he &ra"%hises )ra" e' by he S a es o 'o b#si"ess i" a !ar i%#lar &ashio"< o"e o& hose bei") he !rivile)e o& &ormi") %re'i , &or %or!ora io"s a"' b#si"ess e" er!rise 0ee! boo0s o"ly be%a#se hey )ra" %re'i . They li0e*ise %arry %re'i *i h s a e

em!loyme" i"s#ra"%e boar's, a"' *i h So%ial Se%#ri y a"' !e"sio" boar's. These are he bases o" *hi%h, i" he %ase o& !riva e i"'ivi'#als, he a% io" o& a%%o#" i") .liabili y o &ile/ is bro#)h hro#)h he 2>;>. The a(, he", is o%%asio"e' by he !rivile)e or 7&ra"%hise7 o& 'oi") b#si"ess o" %re'i , "o *i hs a"'i") ha he %re'i is "o vol#" ary b# %om!#lsory a"' %oer%ive, %omme"%i") *i h he Fe'eral Reserve No es. O"e %a""o be a(e' a la* #"'er o#r Co"s i # io" &or !#rs#i") a" a% ivi y o& "a #ral ri)h . he ri)h o ra'e/, b# i" eB#i y #!o" he 7!rivile)e7 o& 'eali") i" %re'i #!o" "e)o iable i"s r#me" s. -e his is he very 0i"' o& 7la*7 *e )e *he" *e allo* o#rselves o re'#%e he mea"i") o& he *or' 7Re!#bli%7 o a mere )over"me" o& a"y 'ime"sio", i" *hi%h he sole %ri erio" is ha he Peo!le have "o 'ire% voi%e i" le)isla io". S#%h is a &alse mea"i") o )ive o 7Re!#bli%,7 be%a#se he o!!osi e o& 7re!#bli%a" &orm o& )over"me" 7 is 7!arliame" ary &orm o& )over"me" 7 a"' "o 7Demo%ra%y.7 I" a"y %ase, %a" a %rimi"al %har)e a la* arise i" a" a% ha is eB#i able1 O"ly i" o"e i"s a"%e o& imme'ia e %o"%er"< 7&ail#re o &ile,7 *hi%h is ma'e a" amo#" o a %o" em! , &or %o" em! %a""o arise a la*, o"ly i" eB#i y, a"' "o* #!o" a s a # e. -e %o" em! is see" as *o 0i"'s. O"e is 'elibera e 'isobe'ie"%e o& a" or'er o& he Co#r , a"' he o her is he hol'i") o& he Co#r #! o !#bli% ri'i%#le< he &ormer %alle' %rimi"al, he la er %ivil. So, 7&ail#re o &ile7 res#l s esse" ially i" a %rimi"al %har)e o& %o" em! o# o& a" eB#i able obli)a io". Wha else %a" i !ossible be1 Pre y "ea . Si"%e he Fe'eral Co"s i # io" !rohibi s he S a e &rom ma0i") a"y hi") .a"y Thi")/ b# )ol' a"' silver %oi" a e"'er i" !ayme" o& obli)a io"s, a"' si"%e s a"'ar' la*&#l mo"ey o& he ="i e' S a es is )ol' or silver %oi" or heir absol# e eB#ivale" , i &ollo*s ha , si"%e he S a e %a""o %om!el ra'i") i" eB#i able "e)o iable i"s r#me" s by %i i?e"s, i %a""o lay a !e"al y o" s#%h ra'e or #!o" a"y a% rela i") here o *hi%h is a )ra #i o#s ri)h e(is i") o# o& "a #re. I"'ee', ho* %a" a S a e, *hi%h is &orbi''e" &rom iss#i") or ma0i") a"y e"'er b# )ol' a"' silver %oi", i"i ia e !ro)rams !ayable a"' &#"% io"i") o"ly by a"' #!o" 'eb 1 Ca" he Fe'eral a"' S a e Co"s i # io"s be h#s i"vo0e' o overri'e he ri)h s o& mer%ha" s,by, %om!#lsio" o he be"e&i o& mer%ha" s,by,'esi)" a"' i" e" < o& i"vol#" ary o vol#" ary1 Ca" vol#" ary mer%ha" s, ra'ers .i" %o" rol o& he mo"ey s#!!ly/ em!loy he Co"s i # io" o e"slave hose *ho are mer%ha" s o"ly by &i% io" a"' %om!#lsio"1 Ca" he Co"s i # io" be o# la*e' by o"e )ro#! o& 7mer%ha" s7 o he 'is%rimi"a io" o& a"o her, or o& a% #al "o",mer%ha" s1 Obvio#sly, he La* Mer%ha" , is %o" i"#o#sly bei") re&i"e' by "e* %ommer%ial !ra% i%e, a"' %o" i"#o#sly %rea i") a"' eve" %o" rivi") a"' arra")i") "e* e(i)e"%ies .or 'ema"'s a"' reB#ireme" s i" ri"si% o a %ir%#ms a"%e or %o"'i io"/, a"' is "o*here &#lly *ri e" or sa"% io"e' i" *ri i"), so %a" &orever 0ee! ahea' .eB#i ably, o& %o#rse/ o& a" 7o# mo'e'7 *ri e" Co"s i # io". Wha ever his #"*ri e" la* is or may be%ome, he $#')es are obli)e' o a0e "o i%e o& i , eve" as i is serve' #! "e* o hem a ea%h i"s a" . A"' hey are "ever reB#ire' o reveal a *or' o& i . Does his, ho#)h, "e%essarily ma0e he $#')es %orr#! a"' illi era e i" he Co"s i # io"1 O& %o#rse "o . I o"ly ma0es hose &ools *ho ass#me ha hey are. Le)al iss#es are "o 'e%i'e' o" he !ie y or ri)h eo#s"ess o& he li i)a" s, b# #!o" he la*.

Th#s, *e see ha he Ha"0s brie& base' o" 6r#shaber, Hale v. He"0el, a"' he o her !er i"e" %ases, ells o"ly abo# hir y,&ive !er%e" o& he *hole s ory o& 7&ra"%hises7 a"' o& "o",liabili y o& !riva e i"'ivi'#als &or so,%alle' I"%ome Ta(es *hi%h are &ra"%hise a(es. Cer ai"ly here is "o &ra"%hise o& %or!ora e limi e' liabili y a(able o hem. -e Ha"0As brie& &aile' o a%hieve him relie&. Th#s, here m#s be a &ra"%hise *ri"0le ha "ee's o be 'is%overe', a"' i *o#l' seem ha *e have 'is%overe' i i" he !a)es !re%e'i")< "amely he %re'i ,&ra"%hise a"' i"s#ra"%e, &ra"%hise. Wi h he &ore)oi") i" mi"', i is he mer%a" ile !ra% i%e o& he eB#i able 'eb orI%re'i or rela io"shi! i" bills a"' i"s#ra"%e #!o" *hi%h he I" er"al Reve"#e o!era es o a em! o %om!el a% io"s o& a%%o#" i") i" he 2>;>, le #s revie* he I"%ome Ta(. I& he liabili y o& i"'ivi'#als *ere a s ri% ly le)al liabili y .#"'er he Co"s i # io"/, he" i *o#l' a!!ear s!e%i&i%ally 'e&i"e' i" he Co'e. 6# si"%e i 'oes "o a!!ear i" he Co'e, "or i" a"y o her s a # e, he obli)a io" m#s e(is o"ly i" eB#i y o be i"vo0e' i"'ivi'#ally #!o" he %ase o& every so,%alle' a(!ayer, o" he !ri"%i!les o& 'o#ble,e" ry boo00ee!i"). XVI ENGLISH LAW AND NORMAN LAW As a li le remi"'er o o#rselves ha *e are "o i"'ee' o# o& o#r se"ses, i"%l#'e' here as a brea her is a shor a"' !er i"e" e(%er! &rom William +rimsha*As His ory o& E")la"', Phila'el!hia, 2983, !a)e @2J 7The liber ies o& E")lishme" are "o .as some arbi rary *ri ers *o#l' re!rese" hem/ mere i"&ri")eme" s o" he Fi")As !rero)a ive, e( ra% e' &rom heir !ri"%es by a0i") a'va" a)e o& heir *ea0"esses< b# a res ora io" o& heir a"%ie" Co"s i # io", o& *hi%h heir a"%es ors ha' bee" 'e&ra#'e' by he ar a"' &i"esse o& he Norma" la*yers, ra her ha" by he &or%e o& he Norma" arms.7 F#r her, See Sel'e", C#r. A")l., 2, :, s.;8, i" For es%#e, %. 88, *here *e &i"' he "obili y 'e%lari") 7 ha he realm "ever ha' bee", "or "ever shall be )over"e' by he Civil La*.7 Sir Coh" For es%#e, he )e" leme" me" io"e', *ro e De C#re Na #rali e +e" i#m .O" he Na #ral La* a"' La* o& Na io"s/, 2@;>, amo") o her im!or a" *or0s. Obvio#sly, he Cro*" .Fi")/ is, *as, a"' ha' al*ays bee" a %or!ora io" .&ra"%hise/ %rea e' by he Peo!le #!o" all he a"%ie" %ommo" la* o& E")la"'. XVII FRANCHISE AND INCOME Le #s %o"si'er he basi% Ha"0s !osi io" o" he I"%ome Ta( *i ho# !ar i%#lar re&ere"%e o a"y 'eb orI%re'i or rela io"shi!, rememberi") o"e hi") es!e%ially. 6y he la*s o& he ="i e' S a es, i %a""o a!!ly o !riva e i"'ivi'#als *ho 'o "o hol' %or!ora e &ra"%hises or limi e' liabili y &ra"%hises &rom he S a es &or 'oi") b#si"ess i" a"y !ar i%#lar ma""er. I is "o s#%h 'oi") b#si"ess ha is a(able, i" a"y %ase, b# he e(er%ise o& he !rivile)e o& limi e' liabili y or 'eb . .S#%h is he !rivile)e *hi%h he Liber y Ame"'me" *o#l' !reserve, *hile a0i") a*ay he liabili y &or a %or!ora e a( o" &ra"%hise, meas#re' by i"%ome &rom *ha ever so#r%e./ Th#s, his a( has "ever la*&#lly a!!lie' o !riva e i"'ivi'#als *ho %o" ra% o# heir servi%es &or

%om!e"sa io" or !#rs#e o her a% ivi ies o& "a #ral ri)h , i"%l#'i") b#yi") a"' selli"). No e, hese are "o %ivil ri)h s, b# "a #ral ri)h s. The %ivil ri)h i"volve' is he ri)h o !ro e% he "a #ral ri)h s as !ro!er y. Here is a" i" eres i") B#es io". I& liabili y &or he Fe'eral I"%ome Ta( is base' o" &ra"%hises )ra" e' by he S a es, a"' i& he S a es are &orbi''e" &rom ma0i") a"y hi") b# )ol' a"' silver %oi" a e"'er, he" ho* %a" he S a es #"'er a"y %ir%#ms a"%e, or he Co")ress allo* or 'ire% hem o, ere% a 'eb orI%re'i or sys em base' o" 'eb ,mo"ey1 No*, he %rea ors o& he so,%alle' I"%ome Ta( have al*ays bee" a*are o& *ha hey %rea e'. The a( has al*ays bee" imme'ia ely ie' #! *i h he Fe'eral Reserve Sys em, *hi%h *as 'esi)"e' o s#b$e% !riva e i"'ivi'#als o a" alle)e' liabili y o i"&orm o" hemselves as mer%ha" #!o" some 0i"' o& &ra"%hise os e"sibly %o" ra% e' o# by he S a es i" he &as i"s a"%e. For a &ra"%hise is "o a )ra" , o# ri)h , b# a %o" ra% , *hi%h %a" be bro0e" i& he &ra"%hise is ab#se' or 'is#se' or o her*ise mis#se'. -e he liabili y #r"s o# o be o"ly vol#" ary or moral or 7eB#i able,7 *hi%h is *hy he I.R.S. e"&or%es i "e%essarily by i" imi'a io" a"' i"B#isi io". This liabili y *as o arise, "o i" he !riva e ri)h o %o" ra% , *hi%h %a""o be viola e' or i"va'e', b# i" he s#b$e% io" o he #se o& ba"0"o es o" he Fe'eral level. Every !riva e i"'ivi'#al has he absol# e !riva e ri)h o %o" ra% #!o" his servi%es, ale" s, labor, a"' o !ro&i &rom he same. He %a" be %om!elle' o !ay 'ire% a(es o a S a e #!o" his !ro!er y, i& he a( is assesse' by a '#e !ro%ess, b# he %a""o be %om!elle' o i"&orm o" himsel& #"'er a"y %ir%#ms a"%es. This is *hy i" a"y %ase 'eali") *i h he I.R.S. or *i h S a e a( o&&i%ials, or a"y o her s#%h b#rea#%ra , o"e sho#l' al*ays absol# ely i"vo0e he ; h a"' 5 h Ame"'me" s. Th#s, here is o"ly o"e level o" *hi%h a !erso" %a" be %om!elle' o !ro'#%e boo0s a"' !a!ers or &or a a(!ayer o i"&orm a)ai"s himsel&, a"' ha is #!o" a !#bli% &ra"%hise, !rivile)e, or s#&&i%ie" li%e"se reB#ire' &rom a S a e. Or'i"arily his mea"s, as *e 0"o*, %or!ora io"s. I has bee" e( e"'e' o a or"eys a"' o her hol'ers o& !#bli% &ra"%hises, s#%h as $#')es, *ho are e%h"i%ally %or!ora io"s %alle' i"'i&&ere" !erso"s. Those i" eres e' i" e"slavi") he "a io" have, by #se o& he *or'i") o& he Co"s i # io", a em! e' o e( e"' %or!ora e liabili y o o hers by !ayi") *a)es i" %he%0s, &or e(am!le. I" o her *or's, o ma0e everyo"e 7)o !#bli%7 as some 0i"' o& os e"sible e"&ra"%hise' mer%ha" or ra'er. The" he %o#r s, by he Co"s i # io"al !rovisio"s %i e' above, %a" a0e $#'i%ial "o i%e o& he #"*ri e" !ra% i%e o& mer%ha" s. This is he same La* Mer%ha" , bo'y o& r#les a"' re)#la io"s i"ve" e' by b#si"essme" o& all "a io"s 'o*" hro#)h he years, b# i"%or!ora e' e" irely i" o he la* o& "o o"e "a io", al ho#)h hose "a io"s *hi%h have a'o! e' he so,%alle' Civil La* or Roma" La* have )e"erally e"a% e' e( e"sive Commer%ial Co'es. I is his la* or !ra% i%e *hi%h, as *e sa*, i"ve" e' ba"0 "o es, ba"0 'ra& s, bills o& e(%ha")e, a"' o her varie ies o& %ommer%ial !a!er as a s#bs i # e &or s!e%ie, so o avoi' havi") o ra"s!or i &rom !la%e o !la%e. =!o" i , hey ho!e #l ima ely o %o"&is%a e all !riva e la"' hro#)h mor )a)e o %ommer%ial a"' mer%a" ile i" eres s.

No 7+over"me" 7 he" ever i"ve" e' ba"0 "o es, Fe'eral Reserve No es, or bills o& e(%ha")e. I& +over"me" em!loys hem, i is &or he a'va" a)e o& somebo'yAs !riva e e" er!rise. +over"me" 'oes "o e(is i" a va%##m, "or is i a mere &i% io". The o"ly 0i"' o& mo"ey *hi%h )over"me" s iss#e is mo"ey o& i" ri"si% val#e o& me al, )ol' or silver. They also iss#e %o"ve"ie"%e mo"ey s#%h as =.S. No es, *hi%h are, by la*, bei") !#bli% a"' "o !riva e, he absol# e eB#ivale" o& )ol' or silver s a"'ar' mo"ey a"' %o"ver ible or e(%ha")eable o" 'ema"'. They are mo"ey, "o 'eb , or !romises o 'eliver mo"ey or o 'eliver a %ommo'i y. ="i e' S a es No es 'o "o bear i" eres be%a#se hey are "o %er i&i%a es o& 'eb b# o& *eal h. Tha is *ha ma0es hem a" absol# e s#bs i # e &or s!e%ie, *hi%h 'ra*s i" eres o"ly *he" le" . Fe'eral Reserve No es !re e"' o be he same as ="i e' S a es No es, b# &ail o be be%a#se hey are iss#e' #!o" i" eres ,beari") obli)a io"s. 6a"0 No es are a horse o& a"o her %olor, be%a#se hey al*ays 'ra* i" eres . .Fe'eral Reserve No es are "o ba"0 "o es./ Ho*ever, his is o"ly he s#!er&i%ial 'i&&ere"%e &rom ="i e' S a es No es. Fe'eral Reserve No es, series 23@8, 23@3, 234; are "o re'eemable i" o s!e%ie, as he !rior series *ere, "or i" o a"y hi") b# more o& he same. S#rely ha has a mea"i") beyo"' he obvio#s o"e. The o"ly o her hi") ha hese No es are %o"ver ible i" o is ="i e' S a es )over"me" bo"'s. So, i" e&&e% , he No es are merely 7small %ha")e7 &or he bo"'s. They are he 7 ill mo"ey7 #se' by he ba"0s o bala"%e #! he 'ema"' 'e!osi a%%o#" s a he e"' o& he 'ay. I& yo# have a lar)e e"o#)h b#"'le o& Fe'eral Reserve No es yo# %a" %o"ver hem i" o a bo"' by sim!ly !#r%hasi") he bo"', b# "ever i" o s!e%ie, as ha *o#l' 'e&ea he s%heme o& liabili y o" %re'i &or &ili") a" i"%ome a( re #r" levie' "o a la* b# i" eB#i y, a"' e(e%# ive eB#i y a ha . A"' he liabili y is ha a"yo"e *ho 'eals i" %re'i a"' "o i" har' %oi", by he La* Mer%ha" , is a# oma i%ally !res#me' o 0ee! a re%or' o& a%%o#" s, as %re'i oo is a %ommo'i y i" %ommer%e. ="li0e %oi", i s o"ly evi'e"%e is i" boo0s o& a%%o#" , a"' so *i h i" eres . Whe" o"e 'eals i" har' %oi", here is "o "ee' &or a re%or' o& i"'ivi'#al ra"sa% io"s, a"' he ra"sa% io" be%omes o"ly o"e ma"As *or' a)ai"s a"o herAs #!o" a bar er &or eB#al a")ibles, "o re%or' bei") "ee'e', as he )oo's are &as i" ha"'. Th#s, hose *ho ra'e i" or #!o" %re'i .a be"evole" !rivile)e )ra" e' by a be"evole" )over"me" i" he ha"'s o& be"evole" !romo ers o& %re'i a"' 'eb /, be%ome liable o 0ee! a b#')e a%%o#" o& heir 'eali")s o i"s#re ha hey %a" !rove a"' veri&y heir s%r#!#lo#s ho"es y, al ho#)h he )ame a% #ally *or0s B#i e o her*ise. This, he", is he o"ly so#r%e o& alle)e'ly la*&#l liabili y &or he !erso"al i"%ome a( .or &ili") or !erso"al i"%ome a(/< all %i i?e"s, #!o" a0i") a"' !assi") Fe'eral Reserve No es ."o es o& a !riva e %or!ora io", iss#e' a"' # ere' by e" 'i&&ere" s#%h %or!ora io"s/, be%ome %re'i mer%ha" s i" "e)o iable i"s r#me" s a"' h#s liable, "o a la*, b# i" eB#i y, o ma0e a re!or o" heir r#s . The !riva e ba"0ers o& he Fe'eral Reserve have so#)h o era'i%a e he ="i e' S a es No es, "o merely be%a#se hey 'o"A !ay i" eres o hem, as he bo"'s 'o, b# be%a#se, bei") by he la* he absol# e eB#ivale" o& )ol' a"' silver, hey %a""o %rea e a liabili y &or &ili") a a( re #r" o" i"%omes o& i"'ivi'#als. All ra"sa% io"s i" ="i e' S a es No es are ma'e as &#lly i" %ash i" s!e%ie as i" )ol' a"' silver. I is s#%h se%re s as hese ha i"&l#e" ial Ho Sho S#!er Pa rio s *ill

"ever reveal, "or ever o&&er o reveal, abo# he Fe'eral Reserve a"' he I"%ome Ta(, al ho#)h hey %a" ell yo# o he "i%0el ho* ma"y &#""y,%re'i ,'ollars !ass hro#)h he ha"'s o& *el&are re%i!ie" s *ho are "o li%e"se' o %rea e heir o*" mo"ey. I" a"y %ase, he &e#'alis i% s*i"'le be%ame he 7La* o& he La"'7 o" Mar%h 29, 23@9, *he" he las re'eemabili y o& o#r mo"ey i" o )ol' be%ame e&&e% ive. I *as &i"al o" C#ly 82, 2342, *he" eve" silver %er i&i%a es be%ame irre'eemable, a"' *ere 'rive" &rom e(is e"%e #!o" iss#a"%e &or he &irs ime o& he O"e Dollar Fe'eral Reserve No e i" series 23@8. F#r her, he silver %er i&i%a es las ly re ire' *ere "o re'eemable i" silver Dollars, b# o"ly i" %ommo'i y silver. The %er i&i%a es o& 23:9 *ere he las o be !ayable i" 7O"e Silver Dollar,7 hose %omme"%i") i" 238; !ayi") o"ly 7O"e Dollar i" Silver,7 so e%h"i%ally hose be)i""i") i" 238; 'i' "o !ay Dollars b# s a"'ar' silver. A"yo"e i" eres e' i" he &#ll *or'i")s a"' 'e ails o& hese "o es a"' %er i&i%a es &rom 29@: sho#l' ob ai" a %o!y o& Theo'ore FemmAs The O&&i%ial +#i'e o& ="i e' S a es Pa!er Mo"ey i" he la es e'i io". No*, he" Fe'eral Reserve No es, as *ell as he bo"'s %olla erali?i") hem, are %alle' 7la*&#l mo"ey.7 This %ir%#ms a"%e o%%#rs as a seB#el o& he i'e" i&yi") o& 7La*&#l Mo"ey7 as hose 0i"'s o& mo"ey *hi%h, !rior o& 2328, mi)h %om!rise he reserves o& a Na io"al 6a"0, "amely )ol', silver, =.S. No es, a"' =.S. 6o"'s, Treas#ry No es o& 293> e %. S#bseB#e" o 2328, 7La*&#l Mo"ey7 %o#l' be almos a"y hi") or 0i"' o& %ommer%ial !a!er asse s o& ba"0s, besi'es he har' s #&&. This 'eb ,mo"ey has a 'ire% beari") o" la"' i" eres . The :>> year Pr#ssia" *ar o" Ameri%a . hro#)h he 6ri ish hro"e/ has so#)h o re'#%e all i" eres s i" la"' o s#bservie"%e o %ommer%ial a"' mer%a" ile i" eres s, *hi%h, ra"sla e', mea"s o o# la* %oi" i" &avor o& "e)o iable i"s r#me" s, o !# he !ro'#%ers a"' %#l iva ors a he mer%y o& 7mer%ha" s,7 be%a#se La*&#l Har' Mo"ey is o"e hi") alo"e , !or able la"'. Th#s, i& o"e %a" lo%0 #! all he la"' .)ol' a"' silver/ i" s#b$e% io" o #rba" 'eb ,mo"ey, he %a" re%rea e a"' rees ablish &e#'alis i% !yrami's o& !riva e B#asi,!#bli% 7servi%e &ra"%hises.7 This is ho* he Pr#ssia" me" ali y see0s o 'es roy all he millio"s o& allo'ial Ameri%a" la"' i les. Clearly, 'is%rimi"a io" a)ai"s real !ro!er y i" &avor o& %ommer%ial i" eres s is i" viola io" o& he 2; h Ame"'me" , or eB#al !ro e% io" o& he la*s, &or la"'o*"ers are "o mer%ha" s. Probably he bes 'is i"% io" be *ee" a la"'o*"er a"' a mer%ha" is he la"'o*"er 'oes "o hesi a e o soil his ha"'s i" he ear h, *hile he mer%ha" see0s o es%a!e. Tha is s#rely a !er&e% ma er o& !erso"al %hoi%e, b# *hy sho#l' he o"e have o !ay &or he o her1 Why sho#l' he o"e have o s#!!or he o her1 This remi"'s #s a)ai" ha La* "o base' #!o" %hoi%e a"' i"&orme' %o"se" is "o a"' %a""o be La*. XVIII THE COURT IS NOT A MERCHANT

All ri)h , le As )o ba%0 o Cerome Daly. Why *as i ha he ba"0 'e%li"e' o o&&er some hi") besi'es he Fe'eral Reserve No es s#%h as %oi", or a ="i e' S a es No e, &or he a!!eal &ee1 6esi'es he obvio#s reaso" ha i *o#l' be a%B#ies%i") o he $#')eAs 'e%isio", eve" more obvio#sly o !ay i" some hi") besi'es a Fe'eral Reserve No e *o#l' be o a0e he %ase o# o& he eB#i able $#ris'i% io" %rea e' by he No e a"' 7 ma0e he iss#es riable by $#ry a la*, #!o" he very 'elivery o& he eB#ivale" o& s!e%ie a"' "o o& a bill o& e(%ha")e. Wha C#')e Maho"ey really ol' he ba"0 *as ha he Co#r *as "o ra'i") !i or mar0e !la%e o be i"'eb e' o eB#i able "o es. I" shor , he Co#r *as "o a Mer%ha" , a"' %o#l' "o be %om!elle' o be ma'e a mer%ha" . Th#s, i is emi"e" ly %lear ha a Fe'eral Reserve No e %a" "ever be he same as a ="i e' S a es No e, be%a#se a Fe'eral Reserve No e is iss#e' by a !riva e mer%ha" i" EB#i y, *hile a ="i e' S a es No e is iss#e' by he Peo!le a La*. We sho#l' %all a e" io" here o he rela io"shi! *hi%h he 2@ h Ame"'me" has o he :5 h hro#)h he EB#i y o& he Fe'eral Reserve. Fe'eral Reserve No es, a)ai", 'o "o rea', as &or e(am!le he Treas#ry No es o& 293> rea', 7This "o e is a le)al le"'er a i s &a%e val#e i" !ayme" o& 'eb s !#bli% a"' !riva e e(%e! *he" o her*ise s i!#la e' i" he %o" ra% .7 No, ha As Mo"ey. I"s ea' hey rea', 7This No e is le)al e"'er &or all 'eb s !#bli% a"' !riva e.7 A"' ha As Deb . Perio'. I is %lear ha his No e "ever !ays or %o"veys or is i" e"'e' o !ay or %o"vey a"y hi"), b# is a"' re!rese" s a !er!e #al 'eb , #!o" *hi%h he la* o& mer%ha" s %a" bri") a" a% io" i" eB#i y ."o $#ry rial/, a"' #!o" *hi%h i"'ivi'#als %a" be i" imi'a e' i" o &ili") re #r"s, eve" i& "o %om!elle' or obli)e' o !ay. Deb s are !ai' *i h mo"ey, "o *i h more 'eb . O her*ise some me" are !er!e #ally %re'i ors, a"' all he res are 'eb ors. The Fe'eral Reserve No e is h#s, as small %ha")e &or ="i e' S a es bo"'s, ei her a &ra% io"al %#rre"%y bo"', or more o he !oi" , as *e have sai', a" irre'eemable !er!e #al a""#i y bo"' 'esi)"e' o ear" !er!e #al i"%ome &or he !ro!rie ors o& he Fe'eral Reserve, *ho, i"%i'e" ally, live "o*here "ear he Mos%o* Fremli". Fi"ally, i is "o %oi"%i'e"%e ha , by he :5 h Ame"'me" , he Presi'e"%y has bee" al ere' e&&e% ively i" o a Cha"%ellorshi! .Presi'e" o& he Cor!ora io"/, a" o&&i%e *hi%h 'oes "o 'is!e"se La*, b# E(e%# ive EB#i y .Im!erial ye / s#%h as 7+erry 6oy7 )ave o 7Tri%0y Di%7 B#i%0er ha" yo# %o#l' say 7Nelso" De&ar)e.7 This e(e%# ive eB#i y is he s#mmi o& he ro# e o& b#rea#%ra i% %ha""els o" a!!eal #!*ar's i" 'e!ar me" al eB#i y. Every b#rea#%ra #! he li"e has be%ome a mas er i" Cha"%ery i" his o*" ri)h , 'is!e"si") i"s a" em!orary a!!ealable 7$#s i%e.7 The Ei%e Presi'e"%y has be%ome a 6oar' o& Dire% ors. XIX RANDOM NOTES ON INCOME TAX "The Congress shall have power to lay and collect taxes on incomes, from whatever sources derived, without apportionment among the several states, and without regard to any census or enumeration."

A a( lai' 7*i ho# a!!or io"me" amo") he several s a es7 a"' o"e lai' 7*i ho# re)ar' o a"y %e"s#s or e"#mera io"7 is "o a 'ire% a(, b# a" i"'ire% a(, ha is, "o a a( b# a" e(%ise. Si"%e he a( i" B#es io" is "o a 'ire% a(, i %a""o be a )e"eri% i"%ome a(, ha is a 'ire% a( o" !ro!er y, b# o"ly a" e(%ise o" a !rivile)e. Tha is, he !rivile)e o& 'oi") b#si"ess i" a !ar i%#lar ma""er or %a!a%i y. The a( i" B#es io", he", is merely meas#re' by he o al amo#" o& i"%ome *hi%h he Co")ress %a" %om!el he %or!ora io" o reveal be%a#se he S a e %a" 'o so si"%e i *as he Peo!le o& he S a e *ho %rea e' he &ra"%hise. The Ame"'me" mea"s "o more a"' "o less ha" ha i" layi") a(es o" !rivile)es, a"y !erso" %om!elle' o re!or i"%ome a"' !ay a( o" he !rivile)e m#s !ay he a( i" &#ll !ro!or io" o o al i"%ome "o ma er *ha so#r%e, ha is, *he her 'ire% ly &rom !ro!er y or !ossessio" o& !ro!er y or "o . Si"%e Co")ress %a" a( o"ly he same s a e,%rea e' ri)h s or !rivile)es *hi%h he s a e i sel& may a(, he" i &ollo*s ha *here he s a e is !rohibi e' &rom a(i") %o"s i # io"ally !ro e% e' ri)h s, so oo is Co")ress. The I"%ome Ta( is "o #"%o"s i # io"al &or hose o *hom i a!!lies, "amely he be"e&i%iaries a"' hol'ers o& %er ai" &ra"%hises. I s e"&or%eme" a)ai"s hose o *hom i 'oes "o a!!ly is #"%o"s i # io"al, as here are obvio#s 'is i"% io"s o be ma'e be *ee" %or!ora io"s a"' !erso"s o" he o"e ha"' a"' !riva e i"'ivi'#als o" he o hers. The sole liabili y o he a( is i" he &ra"%hise o" he !ar o& hose !erso"s &or *hom he &ra"%hise *as %rea e'. I"'ivi'#als e(is i" Na #re. Perso"s are %rea e' by !osi ive la* o& So%ie y. The liabili y o re!or via 2>;> is %om!elle' by a" eB#i able a% io" o& a%%o#" o" a 'eb orI%re'i or rela io"shi!. The I.R.S. Co'e 'oes "o a"y*here 'o *ha he 2@ h Ame"'me" 'i' "o 'o, ha is assess a liabili y o be a(e' *here "o"e e(is s a la*. See he 6r#shaber %ase, :>; =.S. 2, a"' also Hale v. He"0el, :>2 =.S. ;8. Si"%e 7&ail#re o &ile7 is a %rimi"al a% , i &ollo*s ha o"e %a""o be liable o vol#" eer i"&orma io" ha he is "o liable o &ile. Wha he Co'e o& he I.R.S. 'oes is o 'es%ribe he amo#" o& he a(, a"' he ma""er i" *hi%h i is 'e ermi"able o& !ayme" by hose *ho are or re%o)"i?e hemselves o be liable a la*, ha is, o" some &ra"%hise a(able by he +over"me" . Why sho#l' o"e be %om!elle' o he abs#r'i y o& bri")i") o he a e" io" o& o hers he &a% ha he has bee" )ra" e' "o &ra"%hise, !rivile)e, or liber y *hi%h 'oes "o ori)i"a e *i h himsel&1 The o"ly s#%h &ra"%hises or !rivile)es a(able are ra'i") &ra"%hises, #"'er *hi%h he liabili y o re!or lies &or he !rivile)e )ra" e' by he Peo!le o& he !ar i%#lar s a e o o!era e as a !erso" or

'o b#si"ess i" a %or!ora e %a!a%i y .limi e' liabili y a"' !er!e #al s#%%essio"/. The Peo!le o& he !ar i%#lar s a e are he %rea ors o& every %ommer%ial %or!ora io" ha is. They have a" absol# e ri)h a a"y ime, eve" by %rimi"al %om!lai" i" he "a #re o& a B#o *arre" o o sei?e ba%0 he &ra"%hise o& a"y %or!ora io" or Perso" *ho has ab#se' a &ra"%hise. Ho* %a" he Peo!le, he", ma0e hemselves liable o hemselves o" a %or!ora e &ra"%hise, a"' vol#" arily alie"a e hemselves i" o servi #'e a"' s#b$e% io" #!o" a &ra"%hise o& limi e' liabili y a"' !er!e #al s#%%essio" .i.e. Perso"hoo'/1 As he &e'eral )over"me" is "o he %rea #re o& he s a es, "ei her are he s a es he %rea #res o& he Fe'eral +over"me" . O"e %i i?e"shi! is "o s#bservie" o he o her, ha is s a e or &e'eral. O"ly he Peo!le have he !o*er o %rea e he %or!ora io". I 'oes "o e(is i" Na #re. 7WE THE PEOPLE OF THE =NITED STATES7 #!o" o#r "a #ral ri)h s o sel&,!reserva io" a"' !er!e #a io" i" "a #re, re%o)"i?i") "o o"e o be %rea e' as a" e"&ra"%hise' !erso" *i h s a #s 7'o or'ai" a"' es ablish his . . . 7 STATE CITIHENSHIP FEDERAL CITIHENSHIP PEOPLEAS PEOPLEAS STATE RI+HTS NATIONAL RI+HTS .6ill o& Ri)h s/ 2; h Ame"'me" A)ai"s Na io"al +over"me" A)ai"s S a e +over"me" Fra"%hises Perso"s " The nion is older than any of the !tates, and in fact it created them as !tates." 3. +incoln Civil Ri)h s are "o )ra" s or %o" ra% s or &ra"%hises &rom he Peo!le o hemselves. They are a# oma i% ri)h s arisi") &rom he Com!a% , a"' *hi%h he Com!a% *as 'esi)"e' o !ro e% . The val#e o& a &ra"%hise is he ear"i") %a!a%i y o& he %a!i al. 3rticle I, !ection -7, %ew Eor4 !tate Constitution1 "+abor of human beings is not a commodity nor an article of commerce and shall never be so considered or construed. "The !upreme Court has unmista4ably determined that taxes imposed on subjects other than income, e.g. franchises, privileges, etc. . . . are not income taxes, although measured on the basis of income." Heasley F ,atteson Co. v. ?athensies, C.C.3., >enna., -.. $ ;d B0/, B07 #-0/.(.

Income tax is a tax on property, not earnings. ,aine v. &rand Trun4 ?v. Co., -/; .!. ;-7. "De are concerned wholly with an excise tax, whether it is a scientifically accurate concept of it or not. The concept of it as a charge for the privilege of following an occupation or trade or carrying on of business, gives us a fairly good wor4ing idea of what it is. It is in conse)uence, an indirect tax, and has no references to earnings on income, except that the sum of such earnings or income may #as anything else may( be made the measure of the tax. 3n income tax, on the contrary, is a direct tax imposed upon the thing called income, and is as directly imposed as is a tax on land." .!. v. >hiladelphia ' F D ? Co., ;8; $ -BB, -09. The Peo!le *ere %rea e' by +o', a"' he %or!ora io"s by he Peo!le. Th#s i is he %or!ora io"s *hi%h o*e alle)ia"%e o heir %rea ors, as he Peo!le o*e o Their O*". The Peo!le %a""o bes o* 'ivi"i y or immor ali y #!o" a"y Perso" a"y more ha" hey %a" #!o" hemselves. S a eAs a(a io" o& %or!ora io"sJ see Farri") o" v. Te""essee, 35 =.S. @43. Fra"%hisees .e.). a(,%olle% ors/ are "o A)e" s, b# Priva e Co" ra% ors &or Servi%es. Cor!ora e Fra"%hisesJ !rivile)es i" he "a #re o& a !ro!er y ri)h , o# o& he &e#'al la*. A"y !rivile)e )ra" e' by he !eo!le %a" be sei?e' ba%0 #!o" a B#o *arra" o. E(%ise Ta( K !rivile)e a( K i"'ire% a( *hi%h is lai' o" a% s alo"e s#%h as, 7i"%ome7, %#s omers, sales. Dire% Ta(J lai' o" !erso"s a"' !ro!er y s#%h as la"', i"%ome, i"heri a"%e, !oll, e %. XX RANDOM NOTES OF THE LAW MERCHANT AS SOURCE OF JURISDICTION OF I.R.S. La* Mer%ha" as so#r%e o& s#mmary $#')me" . I arose as a !rivile)e o& mer%ha" s i" he %o#r s o& he s a!le ."o %o#r s o& la*/ #!o" %ivil la* 'erive' &rom he !ra% i%e o& Rho'es . he Real Rho'es S%holars/ i" he a"%ie" *orl'. I"%or!ora e' i" o 6ri ish la* !rimarily by Lor' Ma"s&iel' *he" he 'e"ie' *a)er o& la* i" ass#m!si by ma0i") he a% io" a" eB#i able a% io". See L#0e v. Ly'e, : 6#rr. 998,994 I is #!o" his !ro%ess ha EB#i y has a0e" he La* !o*er o& he C#ry a"' i"%or!ora e' i i" o he E(e%# ive #!o" he le er o& %ivil s a # es. MollyJ 7Mer%ha"'ise is so #"iversal a"' e( e"sive ha i is i" a ma""er im!ossible ha he m#"i%i!al la* o& a"y o"e realm sho#l' be s#&&i%ie" &or he or'eri") o& a&&airs a"' ra&&i% rela i")

o mer%ha" s. The la* %o"%er"i") mer%ha" s is %alle' he La* Mer%ha" &rom i s #"iversal %o"%er", *hereo& all "a io"s 'o a0e s!e%ial 0"o*le')e.7 Theo!hil#s Parso"sJ 7La* Mer%ha" has "ever bee", a"' "ever %a" be, s ri% ly s!ea0i"), he m#"i%i!al la* o& a"y o"e %o#" ry, b# m#s ever i" a se"se remai" $#s )e" i#m.7 C#s )e" i#m is he 7La* o& Na io"s.7 .See Ar i%le I, Se% io" 9./ La* Mer%ha" is &o#"'e' *holly o" %o"si'era io"s o& # ili y. Ma)"a Char a, ar i%le ;9, a%%or'e' mer%ha" s he ri)h 7 o b#y a"' sell a%%or'i") o heir a"%ie" %#s oms.7 Tha is, amo") hemselves. To ma0e all a% s i" o mer%a" ile i" eres s #!o" he La* Mer%ha" is o a%%om!lish o al *orl' r#le. Commer%eJ 7Com!rehe"'s ra&&i%, ra'e, "avi)a io", %omm#"i%a io", he ra"si o& !erso"s a"' he ra"smissio" o& messa)es by ele)ra!h . . . a"' . . . i"'ee', every s!e%ies o& %ommer%ial i" er%o#rse.7 Comy"sA Di)es o& he La*s o& E")la"'. 7The mer%a" ile la* o& E")la"' is, i" !oi" o& &a% < a" e'i&i%e ere% e' by he mer%ha" *i h %om!ara ively li le assis a"%e ei her &rom he %o#r s or he le)isla #res.7 I li0e*ise %om!rises he La* o& shi!!i") a"' i"s#ra"%e. Early %ommer%ial la* *as a %olle% io" o& rea ies by mer%ha" s. 7Th#s hey, i" early imes, ere% e' a sor o& mer%a" ile re!#bli%, he observa"%e o& *hose %o'e *as e"s#re', less by he la* o& he la"', ha" by he &or%e o& o!i"io" a"' he 'rea' o& %e"s#re.7 The 0ee!i") o& a%%o#" s is a !ro e% io" o he 'eb orI%re'i or !rivile)e )ra" e' by he &ra"%hise. Co"%er" *i h &or%i") he se leme" o& a%%o#" s. 6ills o& e(%ha")e !romissory "o es, a"' %he%0s ha are !ayable o bearer or or'er are "e)o iable i"s r#me" s by he La* Mer%ha" , b# o her i"s r#me" s #se' as evi'e"%es o& 'eb have i" some $#ris'i% io"s be%ome "e)o iable, as bo"'s, some &orms o& s o%0, e %. For La* Mer%ha" , see 2 Cra"%h, es!. "o e a, 8@9. 293>. Sherma" A% . Deal *i h 7%o"s!ira%y or %ombi"i") o !reve" %om!e i io" amo") mer%ha" s a"' o hers movi") %ommo'i ies i" i" ers a e %ommer%e.7 The #"em!loye' are h#s 7i" res rai" .7 La* Mer%ha" &abri%a es %re'i ,'eb mo"ey i" or'er o over%ome la"'e',mo"ey s!e%ie or s#bs a"%e,mo"ey.

O# si'e all m#"i%i!al la* or %ommo" la* *as he La* Mer%ha" , !ro e% e' i" he s a!le %o#r s by s#mmary $#')me" s. Calle' $#s )e" i#r". La* Mer%ha" %o"s i # es o"ly a !ar o& he vol#" ary, "o o& he "e%essary, La* o& Na io"s. I may, here&ore, so &ar as i is merely !osi ive, be al ere' by a"y m#"i%i!al le)isla io" *here i s o*" ob$e% s o"ly are %o"%er"e'. Commer%ial boo0s o& mer%ha" are !rima &a%ie evi'e"%e a)ai"s a"yo"e #"'er he %#s om o& mer%ha" s. 7All me" are %rea e' eB#al7 K 7No ma" is bor" o !erso"al s a #s7 #"'er o#r la* o& he Na #ral La*. 2>;>J I" e&&e% , a" a% io" o& a%%o#" %om!elle' i" eB#i y o 'is%lose ra"sa% io"s as ra'er o" %ommer%ial !a!er #"'er r#les o& he La* Mer%ha" . C#ries, *hi%h 'o "o more ha" assess he e( e" o& %ommo" la* 'ama)es, are merely a'visory $#ries i" eB#i able !ro%ee'i")s 'is)#ise' by he !rese"%e o& he $#ry. S#mmary Pro%essJ Par i%#larly i" %ases o& 7re%eivers o& he reve"#es7 .i.e., a(,&armers o" &ra"%hises o& he I.R.S./, h#s !riva e %o" ra% ors, "o a)e" s o& +over"me" . 29 Ho*. ::4. Will&#lJ See =.S. v. Pohlma"", 52> F :' ;2; .2345/. From Cor!#s C#ris, se% io" :J 7The La* Mer%ha" is a va)#ely 'e&i"e' !or io" o& he %ommo" la*, or, i" i s *i'es i" er!re a io", o& he la* o& E#ro!ea" %o#" ries havi") he Roma" a"' he Fra"0ish,la* &or i s !are" s .Mass., Ashla"ia" v. Dos #mia", 5; N.E. 9;5< 24; Mass. 8:9< Am. S.R. 8;9< ;4 LRA ;35/, *hi%h i" e&&e% is "o more ha" a $#'i%ial re%o)"i io" o& %ommer%ial r#les a"' #sa)es. .MO., Lo") v. Armsby Co., ;8 Mo. A!!. :58< 9 C.C. ! 8: "o e ;,4< 8@ C.C. !. 3@>, "o e :4/. I is &reB#e" ly arbi rary a"' "o 'e'#%ible &rom lo)i%al %o"si'era io"s .=.S. Farmers Na io"al 6a"0 v. S# o" M&). Co., Mi%h., 5: F 232< 8 C.C.A. 2, 24 LRA 535/. For la* Mer%ha" as !ar o& %ommo" la* see Commo" La*, se% io" 9, : C.C., !. 298, "o es 4:, 45. La* Mer%ha" !revails #"less mo'i&ie' by s a # e .H#" v. E#re, 2:5 S.E. ;9;< 299 N.C. 42@/, b# s a # ory !rovisio"s, *here i" %o"&li% *i h he La* Mer%ha" , m#s !revail. See Pa e" Ti le Co. v. S ra o", CC Colo, 93 F 24;. The La* Mer%ha" , as s a e', *as ori)i"ally !rose%# e' s#mmarily i" a !la%e %alle' he s a!le, *hi%h *as sim!ly he )a heri") !la%e o& mer%ha" s 'eali") i" a %er ai" %ommo'i y, )e"erally &or e(!or , #"'er he !ro e% io" o& he Cro*", b# 'eali") i" i s o*" la* amo") i s o*" members. This rib#"al *as o& )rea a" iB#i y a"' ha' %o)"i?a"%e o& all B#es io"s *hi%h sho#l' arise be *ee" mer%ha" s, "a ive or &orei)". I *as %om!ose' o& a" o&&i%er %alle' he mayor o& he s a!le, sele% e' yearly by he "a ive a"' &orei)" mer%ha" s *ho a e"'e' he !ar i%#lar s a!le< *o %o"s ables a!!oi" e' &or li&e, also %hose by he mer%ha" s< a +erma" a"' a" I alia" mer%ha" , a"' si( me'ia ors be *ee" b#yers a"' sellers, o& *ho *o *ere E")lish, *o +erma",

a"' o"e Lombar'. The La* a'mi"is ere' *as he le( mer%a oria a"' here *as a !rovisio" ha %a#ses i" *hi%h o"e !ar y *as a &orei)"er sho#l' be rie' by a $#ry o"e,hal& o& *ho *ere &orei)"ers. The mos im!or a" le)isla ive %o" e" o& he s a!les *ere he S a # e o& A% o" 6#r"el .l2 E'*ar' I/ by *hi%h mer%ha" s *ere e"able' o sell he %ha els o& heir 'eb or, a"' a a%h his !erso" &or 'eb , 8 E'*. 2, %. 8, a"' :4 E'*. III, %. :, %alle' he S a # e o& S a!le, o"e ob$e% o& *hi%h *as o remove he s a!le &ormerly hel' a Calais o %er ai" o*"s i" E")la"', Wales, a"' Irela"'. Wi h he )ro* h o& %ommer%e he s a!le be%ame more a"' more "e)le% e', a"' a las &ell o)e her i" o 'is#se #"'er i s "ame. O her as!e% s o& he s a!le all oo imme'ia ely &ore,sha'o*e' he I.R.S. o& o'ay. Some o& he ol' la* is %i e' belo*. So, by he S . :4 E'*. III. :, i& a"y by %olor o& his o&&i%e, or o her*ise, a0e a"y hi") o& mer%ha" s a)ai"s heir mer%ha" s, he shall be arres e' by he mayor a"' baili&&s o& he !la%e, i& o# o& he s a!le, or by he mayor a"' mi"is er o& he s a!le i& *i hi" he s a!le< a"' s!ee'y !ro%ess shall be a)ai"s him &rom 'ay o 'ay a%%or'i") he la* o& he s a!le, a"' "o o& he %ommo" la*. A)ai"J A"' here&ore, he shall have a'va" a)e o& he la* mer%ha" , ho i be "o %o"&ormable o he %ommo" la*. 28 E'*. IE, 3.@< : Rol. 22;. A"' a)ai"J A"' here&ore, *here a mer%ha" s ra")er 'elivers his )oo's o a %arrier o be %arrie' o a !or , *hi%h are by him &elo"io#sly embe??le', he may s#e i" Cha"%ery &or relie&, *he" here shall be s!ee'y 'is!a %h, a"' "ee' "o !ro%ee' a he %ommo" la*. 28 E'*. IE 3.@ Several e(%er! s &rom Comy"sAs Di)es o& he La*s o& E")la"' .29>>/ have a remar0able %o" e" . "'y the !t. -- *dw. I de 3cton 'urnel, a merchant may cause his debtor to come before the mayor of the staple, Fc., and ma4e recogni:ance of his debt, which shall be entered on the roll, with the seal of the debtor and the 4ing, in custody of the mayor, Fc." "'y the !t. de ,ercatoribus, -. *dw. I, he shall come before the mayor, Fc. or other sufficient men sworn thereto, if the mayor Fc. cannot attend, and ac4nowledge his debt and day of payment2 and the recogni:ance shall be enrolled, and the roll double2 one part to remain with the mayor, Fc. the other with the cler4 thereto named, and the cler4 shall ma4e an obligation, to which the seal of the debtor shall be put with the 4ing"s seal, Fc., of which the one part shall remain with the mayor, Fc. the other with the cler4." "'y which status the mayor, with the constables of the staple, may ta4e recogni:ance of merchants of the staple for merchandise only of the same staple, and not others. =ide the !t. ;. 5en. =III, 8.," M#%h more remi"'s #s s ri0i")ly o& he IRS. For o"e e(am!leJ

"'y the !t. de 3ct. 'urn, -- *dw. I and de ,erc. -. *dw I, if the debtor does not pay, Fc., the creditor shall bring his obligation to the mayor, Fc., who shall incontinent cause the moveables of the debtor, to the amount of the debt, to be sold and delivered to the creditor by the praisement of honest men, and the 4ing"s seal shall be put to the sale, Fc." "3nd if the mayor find no buyers, he shall deliver the said moveables to the creditor at a reasonable price, Fc." "3nd the mayor may cause the body of the debtor #if lay( to be committed to the prison of the town till he agree the debt." "3nd therefore the mayor may ma4e execution, where the conusee lives, and has lands and goods within his jurisdiction." Fi"ally, believe i or "o , ri)h o# o& he Mi''le A)es he 7$eo!ar'y assessme" 7 a"' he 73>,'ay le er,7 o# o& he !riva e la* o& he ime o& E'*ar' I, h#sJ "'y the !tat. 3ct. 'urn, -- *dw I, F ,erc -. *dw I, if the debtor have no moveables, of which the debt may be levied, or cannot be found within the jurisdiction of the mayor, he shall send the recogni:ance under the 4ing"s seal into the Chancery, and the Chancellor shall direct a writ to the !heriff to sei:e the moveables, or the body of the debtor #if lay(, and ma4e him agree to the debt in the same manner as the mayor, if he had been in his power." "!o, by the !t. de ,erc., -. *dw. I, if the debtor agrees not the debt in a )uarter of a year, by sale of his goods and lands, all his lands shall be delivered to the merchants by reasonable extent, to hold till the debt be levied." So here is "o hi") "e* #"'er he s#". A"' he o&&i%ers a"' a)e" s o& he I.R.S., *e m#s %o"%l#'e, are hemselves mer%ha" s, %o" ra% i") as &armers o& he a(es, a"' !erso"ally liable as s#%h &or heir %olle% io". XXI RANDOM NOTES ON MONEY A Fe'eral Reserve No e is "o a Dollar, b# a" or'er o" &# #re servi%es, alle)e'ly %o" ra% e' #!o" he =.S. bo"' o !ay he i" eres '#e o" he bo"'s. Dema"' De!osi s &orm abo# 45P o& he asse s o& ba"0s. These are he %he%0boo0 mo"ey %rea e' by he ba"0s hemselves o" loa"s o# o& he a mos!here a ra ios o& &rom 2>, o,l o 2@, o, 2 o" heir 7reserves.7 These 'ema"' 'e!osi s 'o "o e(is #" il he ba"0 %rea es hem, a"' hey are "o !ayable o" 'ema"' b# *i hi" 8> 'ays "o i%e, &or he obvio#s reaso" ha he reserves o ba%0 hem #! 'o "o e(is . Th#s, eve" ho#)h he !o*ers, ha ,be %a" le)isla e FRNAs as 7la*&#l mo"ey,7 bei") %#rre"%y bo"'s, 'ema"' 'e!osi s %a""o be )lori&ie' as 7La*&#l mo"ey.7 Nor is a %he%0 ei her 7le)al e"'er7 or 7la*&#l mo"ey,7 eve" %er i&ie', b# a mere !erso"al or'er o !ay. Mo"eyJ C#rre"%y *hi%h &lo*s a !ar *i ho# B#es io".

La*&#l Mo"ey .eve" by o'ayAs la*/J A"y me'i#m %ir%#la i") a !ar, bei") or re!rese" i") s a"'ar' )ol' or silver %oi" a"' !ayable or re'eemable o" 'ema"' This 'oes "o i"%l#'e 'ema"' 'e!osi s or 'ra& s or %he%0s hereo", *hi%h are merely %re'i s a"' !ayable o"ly *i hi" hir y 'ays. Fe'eral Reserve No es are 7la*&#l mo"ey,7 as hey os e"sibly re!rese" s!e%ie, !ass a !ar .N/, a"' are re'eemable o" 'ema"' i" ei her more o& he same or i" =.S. bo"'s. Leg ! Te"#e$% A"y %ir%#la i") me'i#m *hi%h %a" be %om!elle' o& a%%e! a"%e as mo"ey i" !la%e o& he above. Har' Coi" a !ar is Mo"ey. Fe'eral Reserve No es are %hoses,i",a% io" or mere %laims o mo"ey. They 'o "o more ha" !ass i le. A Dollar is a %oi", "o a %hose,i",a% io", "or a &i% io", "or a mere eB#i able mo"ey,o&,a%%o#" . C&'(e)*")A+,*'"% 7A"y ri)h o a"y hi") !erso"al "o i" o"eAs !ossessio" or a% #al e"$oyme" , b# re%overable by s#i a la*. A"y ri)h o a" a% or &orbeara"%e, as i" %ase o& 'eb , s o%0s, shares, a"' "e)o iable i"s r#me" s or %laims o& re!ara io" &or a or . Also, he hi"), as a bo"' or "o e, *hi%h is he s#b$e% o& his ri)h .7 B'"#% A re)is ere' "o e #"'er seal. .FRN/ B'"#% 7The o"ly *ay ha a bo"' is 'is i")#ishe' &rom he or'i"ary !romissory "o e is by he &a% ha i is iss#e' as a !ar o& a series o& li0e e"or a"' amo#" , a"', i" mos %ases, #"'er a %ommo" se%#ri y.7 .FRN/ Iss#e o& a "o e is i s &irs 'elivery. I",e$e(,% Mo"ey "ever bears i" eres < o"ly loa"s bear i" eres . Mo"ey *hi%h bears i" eres is "o mo"ey. Mo"ey 'oes "o *or0, o"ly !eo!le *or0. Mo"ey %a""o !ro!a)a e i sel&. G'!#% From Treas#ry De!ar me" o a# horJ 7Si"%e A#)#s 25, 2342, *e have "o e")a)e' i" )ol' ra"sa% io"s *i h &orei)" mo"e ary a# hori ies<7 o"ly *i h !riva e ba"0ers. +ol' re)#la io"s ame"'e', A!ril :;, 23@;, !ermi =.S. )ol' %er i&i%a es o be hel' by A%olle% ors.A Le #s )#ess *hi%h Fe'eral Reserve 6a"0s are he bi))es %olle% ors. The a# hor has a %om!le e lis o& he 6a"0s a"' amo#" s. 7A%%o#" s re%eivable are "o i"%ome.7 I.R.S. I is he Fe'eral Reserve *hi%h has bee" )ra" e' by Co")ress he !o*er o %rea e Mo"ey, "o he Na io"al 6a"0s. A !o*er 'ele)a e' %a""o be re'ele)a e'. Dema"' 'e!osi s are "o mo"ey, b# ma"#&a% #re' %laims o" mo"ey. "In dealing with the Internal ?evenue Code under Title ;8, we believe that %otes not redeemable are valueless." !ection -.-99--l #./8<7( C.C.5.

Mo"ey o'ayJ Pa!er, Q@5 billio"s< %oi", Q9 billio"s< 'ema"' 'e!osi s, Q::2 billio"s< o al Q:3; billio"s, o& *hi%h 45P are 'ema"' 'e!osi s, or mere %laims. Co"si'era io" o" %o" ra% m#s be a 'e rime" o he !romisee as *ell as a be"e&i o he !romisor, or i m#s &ail. Formerly, alie"s, i"&a" s, marrie' *ome", %ler)yme" *ere e(%l#'e' &rom ra'e. Te"a"%y,i",%ommo" be *ee" s!o#ses %rea e' o 'es roy marria)es by ma0i") h#sba"'s res!o"sible &or 'eb s o& *ives as &emes sole ra'ers. C#lliar'J No !o*er o ma0e %#rre"%y "o es la*&#l mo"ey &or a"y !#r!ose as re)ar's S a es, Co#" ries, Ci ies, a"' m#"i%i!al %or!ora io"s %har ere' by s a es. XXII RANDOM NOTES ON PROPERTY Pro!er y is he ri)h o 'omi"io" over he #se a"' 'is!osi io" o& a" i" eres . Pro e% e' by he EB#al Pro e% io" %la#se, *hi%h is )ro#"'e' i" s are 'e%isis. See Cohe"s v. Eir)i"ia, @ Whea o" :@;, 833. I" e" r#les i" %o" ra% as i" %ommo" la*. Ri)h o& Domi"io"J 7The *or's Ali&e, liber y, a"' !ro!er yA are %o"s i # io"al erms, a"' are o be a0e" i" heir broa'es se"se. They i"'i%a e he hree )rea s#b'ivisio"s o& all %ivil ri)h s. The erm A!ro!er yA i" his %la#se embra%es all val#able i" eres s *hi%h a ma" may !ossess o# si'e o& himsel&. Tha is o say, o# si'e o& his li&e a"' !ro!er y. I is "o %o"&i"e' o mere e%h"i%al !ro!er y, b# e( e"'s o every s!e%ies o& ves e' ri)h .7 Cam! v. Hol , 225 =.S. @:>. See M#"" v. Illi"ois, 3; =.S. 228. "The power to destroy which may be the conse)uence of taxation is a reason why the right to tax should be confined to subjects which may be lawfully embraced therein, even though it happens that some particular instance no great harm may be caused by the exercise of the taxing authority as to a subject which is beyond its scope." Hnowlton v. ,oore, -7B .!. /-. The !reserva io" o& o"eAs !ro!er y is a %ommo" la* ri)h , a"' "o $#')me" %a" be ha' hereo" !rior o rial by $#ry. Na #ral ri)h s are "o %ivil ri)h s. No s#i %a" be bro#)h a)ai"s a" i"'ivi'#al i" Fe'eral Co#r &or 'e"ial o& "a #ral ri)h s #"'er he ="i e' S a es Co"s i # io", o"ly 'e"ial o& %ivil ri)h s by Perso"s o" s a e or "a io"al level #"'er %olor o& la*. C'-.e"( ,*'"% 7The eB#al !ro e% io" o& he la*s *hi%h, by he Fo#r ee" h Ame"'me" , "o s a e %a" 'e"y o he i"'ivi'#al, &orbi's le)isla io", i" *ha ever &orm i may be e"a% e', by *hi%h he !ro!er y o& o"e i"'ivi'#al is, *i ho# %om!e"sa io", *res e' &rom him &or he be"e&i o& a"o her, or o& he !#bli% . . .7

D/e P$'+e((% A !erso" is "o !re%l#'e' &rom %om!lai"i") ha he a0i") o& his !ro!er y %o"&ormably o s a e le)isla io", o sa is&y a" alle)e' 'eb or obli)a io", *as *i hi" he heari") esse" ial #"'er he '#e !ro%ess )#ara" y, be%a#se i" his !ar i%#lar %ase '#e !ro%ess o& la* *o#l' lea' o he same res#l , si"%e he ha' "o a'eB#a e 'e&e"se o" he meri s. Coe v. Armo#r Fer ili?er Wor0s, :84 =.S. ;28, 53 L.E' 2>:4< 85 S.C . @:5. C'"(,$/+,*'"% A hi") *i hi" he i" e" io" is *i hi" he s a # e, ho#)h "o *i hi" he le er, a"' a hi") *i hi" he le er is "o *i hi" he s a # e #"less *i hi" he i" e" io". +ibbo" v. O)'e", 3 Whea . 299. P'!*+e P'0e$% The %o#r s are "o he Poli%e Po*er< hey a0e "o i"i ia ive i" he !reserva io" o& ri)h s *hi%h i"'ivi'#als *ill "o !ro e% hemselves. Cor!ora e Fra"%hiseJ A %o" ra% . J'&" M $(& !!% 7I is "o "e%essary o i"B#ire ho* he $#'i%ial a# hori y sho#l' a% i& he le)isla #re *ere evi'e" ly o viola e a"y o& he la*s o& +o'J b# !ro!er y is he %rea #re o& %ivil so%ie y, a"' s#b$e% i" all res!e% s o he 'is!osi io" a"' %o" rol o& %ivil i"s i # io"s . . . i m#s be re!ea e' ha he la* o& !ro!er y i" i s ori)i" a"' o!era io" is he o&&,s!ri") o& he so%ial s a e, "o i"%i'e" o& a s a e o& "a #re.7 T 1e(% I"'ivi'#al %a" be %om!elle' o s#!!or a )e"eral )over"me" , b# "o o her !riva e i"'ivi'#als. B''"% No o"e may have a !riva e boo" &or%e' #!o" him *i ho# his %o"se" . C 2e , E-.,'$% 7Le he b#yer be*are7 mea"s his a"' o"ly hisJ 7Le he !#r%haser e(er%ise !ro!er %a# io", &or he o#)h "o o be i)"ora" o& he amo#" a"' "a #re o& ha !erso"As i" eres *hi%h he is abo# o !#r%hase.7 I %o"%er"s o"ly i le o )oo's, a"' "o heir B#ali y, *hi%h is he absol# e b#r'e" o& he seller. B "3(% Na io"al 6a"0s are "o %i i?e"s o& he ="i e' S a es, b# o& he vario#s s a es. They 'o "o e"$oy he 2; h Ame"'me" ri)h s o& %i i?e"s o& he "a io"al )over"me" . Ma''e" v. Fe" #%0y .23;>/. Se!4)*"+$*-*" ,*'"J O"e %a""o be %om!elle' o i"&orm o" himsel& a la*, b# he %a" be %om!elle' i" eB#i y, *hi%h is he very basis o& eB#i y. This is he hear o& he Fi& h Ame"'me" %o" roversy i" he S#!reme Co#r As re%e" %ases. 6e%0*i h v. =.S., .234@, No. 4;,2:;8/, a"' =.S. v. Miller, .234@, No. 4;,2243/. O her rela e' %ases are Cali&. 6a"0ers Ass". v. S%h#l ?, ;2@ =.S. :2 .234;/< 6#rro*s v. S#!erior Co#r , 28 Cal 8' :89< Al'erma" v. =.S., 83; =.S. 2@5 .23@3/< =.S. v. Co#%h, ;>3 =.S. 8::< 6oy' v. =.S., 22@ =.S. @2@ .299@/, @8;,@85. Sel&,i"%rimi"a io"J O"e %a" be %om!elle' i" eB#i y by a" a% io" o& a%%o#" i") o" 'eb ,mo"ey a"' ra"sa% io"s hereo". O"e %a""o be %om!elle' a la* over har' mo"ey e(%e! i" a %ommo", la* a% io", *hi%h 'ema"'s a rial by $#ry. XXIII LAW TAKEN FOR GRANTED

Pro se li i)a" s have a &iel' 'ay *he" )oi") hro#)h %ase boo0s o &i"' ar)#me" s s#!!or i") heir %a#se. We o#rselves i" 'oi") so, %a" lear" %a# io", a"' a he same ime s eal a mar%h o" he o!!osi io" by %are&#l %he%0i") o& %ases a"' a# hori ies %i e', a"' ma"y imes &i"' ha a %ase %arelessly B#o e' by he o!!osi io" %a" i" reali y, by %lose s%r# i"y, be #r"e' o o#r o*" a'va" a)e. A" i" eres i") sele% io" o" he s#b$e% is )ive" belo* as a0e" &rom C#ris!r#'e"%e a"' I"s i # io"s, by Cames De*i A"'re*s, i" Eol#me OIII, Ameri%a" La* a"' Pro%e'#re, 23::, LaSalle E( e"sio" ="iversi y, e" i le' Case i" Poi" . 7I is he %ase i" !oi" *hi%h %o"s i # es a !re%e'e" , i" !oi" o& !ri"%i!le, a"' i" !oi" o& !rese"%e o& all he eleme" al &a% s o& he o"e a bar. Too li le a e" io" is "o* bei") !ai' o *ha %o"s i # es a %ase i" !oi" . =!o" his !oi" a s a eme" o& Lor' De"ma" is o& )rea val#eJ AA %ase *as bro#)h be&ore ha %o#r .E(%heB#er/, #!o" *hi%h i *as !ro!ose' o over,r#le "o he 'i% a, he im!ressio", he &a"%ies o& he lear"e' &reB#e" ers o& Wes mi"s er Hall, b# 'e%i'e' %ases, r#""i") hro#)h a !erio' o& "early &i& y years, a!!eari") i" "#mero#s re!or s, a"' lai' 'o*" by all he e( , i ers. I believe Mr. C#s i%e 6ayley, o" a !ar i%#lar e(ami"a io" o& hose %ases, ho#)h hem %learly &o#"'e' i" error< hey *ere ra%e' o a 'i% #m # ere' by Lor' Ma"s&iel' i" his &irs $#'i%ial year, *hi%h 'i% #m *as hel' by Mr. C#s i%e 6ailey o be #" e"able< a"' my "oble a"' lear"e' &rie"' !ro"o#"%e' he #"a"imo#s $#')me" o& his %o#r , 'e"yi") he a# hori y o& hese %ases, a"' overr#li") hem all. I s!ea0 o& he %ase o& H# o" v. 6alme .: -o#. G C. 2>2< Cr. GC. 23< : Tyrr. 24< a"' Error, 2 Cr. GM. :@:< : Tyrr. @:>< 8 Moo. G SC. 2< 3 6i"). ;42/ . . . A"' I am em! e' o a0e his o!!or #"i y o& observi") ha a lar)e !or io" o& ha le)al o!i"io" *hi%h has !asse' %#rre" &or la*, &alls *i hi" he 'es%ri! io" o& Ala* a0e" &or )ra" e'.A I& a s a i%al able o& le)al !ro!osi io"s sho#l' be 'ra*" o# , a"' he &irs %ol#m" hea'e' ALa* by S a # e,A a"' a se%o"' ALa* o& De%isio",A a"' hir' %ol#m" #"'er he hea'i") ALa* a0e" &or )ra" e'A *o#l' %om!rise as m#%h ma er as bo h o hers %ombi"e'. 6# *he", i" !#rs#i o& r# h, *e are obli)e' o i"ves i)a e he )ro#"'s o& la*, i is !lai", a"' has o& e" bee" !rove' by re%e" e(!erie"%e, ha he mere s a eme" a"' res a eme" o& a 'o% ri"e, he mere re!e i io" o& he so"a i"a o& la*yers, %a""o ma0e i a la*, #"less i %a" be ra%e' o some %om!e e" a# hori y, a"' i& i be irre%o"%ilable o some %lear le)al !ri"%i!le.7 .Lor' De"ma" i" OACo""ell v. The D#ee", 22 Cl. G Fi". 8@9,848/ 7The above %ase, *i h he o!i"io" o& he %o#r i" a re%e" Ne* -or0 %ase, i"'i%a es %learly he es o& a %ase i" !oi" . 7Cer ai" e(!ressio"s o& lear"e' $#')es, #se' ar)#e"'o . . . are relie' #!o" by %o#"sel as es ablishi") a !ri"%i!le ha %o" rols he %ase. Pri"%i!les are "o es ablishe' by *ha is sai', b# by *ha *as 'e%i'e', a"' *ha *as sai' is "o evi'e"%e o& *ha *as 'e%i'e', #"less i rela es 'ire% ly o he B#es io" !rese" e' &or 'e%isio". A+e"eral e(!ressio"s,A as he )rea &e'eral $#ris o"%e sai', Aare o be a0e" i" %o""e% io" *i h he %ases i" *hi%h hese e(!ressio"s are #se'.A7 .Cohe"s v. Eir)i"ia, @ Whea , :@;, 833< Peo!le e( rel. Me r. S . Ry Co. v. Ta( Commissio"ers, 24; N.-. ;24,;;4. XXIV PROMOTIONAL SOURCE OF THE LAW MERCHANT IN ANGLO) AMERICAN JURISPRUDENCE

We %lose *i h a &i"al releva" e(%er! belo*, a0e" verba im &rom Eol#me III, !a)es 8>>,8>2, o& he Ameri%a" ="iversal Cy%lo!e'ia .ChambersAs/, Ne* -or0, S.W. +ree"As So", 299;, *hi%h &airly *ell s!ea0s &or i sel&. 7The Ha"sea i% Lea)#e, or he Ha"sa, *as a ra'e,#"io" es ablishe' i" he 28 h Ce" #ry by %er ai" %i ies o& Nor her" +erma"y &or heir m# #al sa&e y, a"' &or he !ro e% io" o& heir ra'e, *hi%h a ha !erio' *as e(,!ose' o he ra!a%i y o& r#lers a"' he la*less a a%0s o& mara#'ers o" la"' a"' !ira es a sea< ye , "o *i hs a"'i") obs a%les s#%h as hese, a"' he heavy im!os levie' by heir !ri"%es o" he +erma" ra'ers, several o*"s o& Nor her" +erma"y, as, &or i"s a"%e, Hamb#r), 6reme", a"' L#be%0, ha' a%B#ire' some %ommer%ial im!or a"%e as early as he 2l h %e" #ry. The &ame o& he ri%h %ar)oes ha &o#"' heir *ay i" o heir &a% ories ha' )ive" rise o s*arms o& !ira es, *ho i"&es e' he mo# hs o& he Elbe a"' he o# ,le s o& he 6al i%< a"' he "e%essi y *hi%h he "ei)hbori") !or s &el o& !ro e% i") hemselves e&&e% #ally &rom s#%h ro#blesome e"emies le', i" 2:23, o he se leme" o& a %o" ra% be *ee" Hamb#r), Di mar(h, a"' Ha'el", o !ro e% he %o#rse o& he river a"' he a'$a%e" sea. This a)reeme" *as &ollo*e' *o years la er by a rea y o& m# #al ai' a"' 'e&e"se be *ee" Hamb#r) a"' L#be%0, *hi%h *as $oi"e' i" 2:;4 by he o*" o& 6r#"s*e%0< a"' h#s *as &orme' he +erma" lea)#e, or Ha"sa, he "ame o& *hi%h i"'i%a e', i" he Pla 'e# s%h o& he ra'ers, a bo"' or %om!a% &or m# #al ai'. The !ro)ress o& he lea)#e *as so ra!i' ha , be&ore he year 2:@>, *he" he &irs 'ie me a L#be%0, *hi%h *as he %e" ral !oi" o& he *hole asso%ia io", i ha' i s re)#larly or)a"i?e' )over"me" , *i h a &i(e' sys em o& &i"a"%e a"' a'mi"is ra io". 7The e" ire lea)#e, *hi%h a o"e !erio' "#mbere' 95 o*"s, a"' i"%l#'e' every %i y o& im!or a"%e be *ee" Holla"' a"' Livo"ia, *as 'ivi'e' i" o &o#r %lasses or %ir%lesJ 2. The Ea"'al or We"'i% %i ies o& he 6al i%. :. The o*"s o& Wes !halia, he Rhi"ela"', a"' he Ne herla"'s. 8. Those o& Pr#ssia a"' Livo"ia. ;. Those o& Sa(o"y a"' 6ra"'e"b#r). The %a!i als o& he res!e% ive %ir%les *ere L#be%0, Colo)"e, Da"?i), a"' 6r#"s*i%0. 7The %i ies %om!risi") he lea)#e *ere re!rese" e' by 'e!# ies a he )e"eral 'ie , *hi%h me every hree years, )e"erally a L#be%0, *hi%h *as %o"si'ere' as he %a!i al o& he lea)#e, o 'is%#ss a"' se le he %#rre" b#si"ess o& he lea)#e, a"' hel' a" e( raor'i"ary mee i") every e" years, o re,"e* he vario#s #"io"s *hi%h %o"s i # e' he )rea Ha"sa. The e'i% s o& he 'ie *ere %omm#"i%a e' o he mas ers o& he )rea %ir%les, *ho remi e' hem o he several )#il's *i hi" heir res!e% ive $#ris'i% io"s. 7Fo#r lar)e &orei)" &a% ories *ere es ablishe' a Lo"'o" .2:5>/, 6r#)es .2:5:/, Nov)oro' .2:4:/, a"' 6er)e" .2:49/< a"' besi'es hese a"' he or'i"ary members, vario#s %ir%les *ere %o""e% e' by rea ies o& limi allia"%e *i h he lea)#e< as, &or i"s a"%e, Ams er'am, A" *er!, 6or'ea#(, 6ar%elo"a, Ca'i?, Dor're%h , Le)hor", Lisbo", Marseilles, Messi"a, Na!les, Os e"', Ro er'am, Ro#e", Seville, Sai" , Malo. AThe Ha"sea i% Lea)#e *as he &irs sys emi% ra'e #"io" 0"o*" i" he his ory o& E#ro!ea" "a io"s, a"' he hi)h !oli i%al i"&l#e"%e *hi%h i ra!i'ly a ai"e' *as '#e o i s 'evelo!me" o& so#"'er !ri"%i!les o& ra'e ha" a"y ha ha' hi her o bee" !# i" o !ra% i%e< *hile i" he earlier !erio's o& i s e(is e"%e i e(er e' a be"e&i%ial a% io" o" he a'va"%e o& %ivili?a io", *hi%h %a" s%ar%ely be overra e'. I s !ro&esse' ob$e% *as o !ro e% he %ommer%e o& i s members by la"' a"' by sea, o 'e&e"' a"' e( e"' i s %ommer%ial rela io"s *i h a"' amo") &orei)"ers, a"' as &ar as !ossible o e(%l#'e all o her %om!e i ors i" ra'e, a"' &irmly o mai" ai", a"' i& !ossible,

e( e"' all he ri)h s a"' imm#"i ies ha ha' bee" )ra" e' by vario#s r#lers o he %or!ora io". For he !romo io" o& hese e"'s, he lea)#e 0e! shi!s a"' arme' me" i" i s !ay, he %har)e o& *hose mai" e"a"%e *as 'e,&raye' by a re)#lar sys em o& a(a io", a"' by he &#"'s ob ai"e' by mo"ey,&i"es *hi%h he 'ie levie' &or i"&ri")eme" o& i s la*s. I" i s &a% ories, o"ly #"marrie' %ler0s a"' servi")me" *ere em!loye', a"' a" almos mo"as i% 'is%i!li"e *as e"&or%e'< b# he by,la*s o& he lea)#e !res%ribe' a Sys em o& 'aily s!or s a"' li)h o%%#!a io"s &or he re%rea io" o& he me", *hile se"sible re)#la io"s &or heir %om&or a"' %lea"li"ess, a"' &or he %elebra io" o& &es ivals a %er ai" &i(e' imes o& he year, bear evi'e"%e o& he so#"' se"se ha i"&l#e"%e' he mo'e o& )over"me" o& he Ha"sa, a"' *hi%h *as &#r her sho*" by he mas ers o& &a% ories o avoi' every hi") ha %o#l' h#r he !re$#'i%es o& he &orei)"ers amo") *hom hey *ere !la%e', a"' o %o"&orm i" all hi")s la*&#l o he habi s o& he %o#" ry. 7For ma"y years he Ha"sea i% Lea)#e *as he #"'is!# e' mis ress o& he 6al i% a"' +erma" o%ea". I %rea e' "e* %e" ers o& Tra'e a"' %ivili?a io" i" "#mero#s !ar s o& "or her" E#ro!e, a"' %o" rib# e' o he e(!a"sio" o& a)ri%#l #re a"' o her i"'#s rial ar s, by o!e"i") "e* %ha""els o& %omm#"i%a io" by mea"s o& he %a"als a"' roa's *i h *hi%h i %o""e% e' o)e her he members o& i s asso%ia io". The )rea es !o*ers 'rea'e' i s hos ili y a"' so#)h i s alle)ia"%e, a"' ma"y o& he !o*er&#l soverei)"s o& he mi''le a)es *ere i"'eb e' o i &or he mos s#bs a" ial be"e&i s. 7I" E")la"', si"%e he ime o& Fi") E helre', +erma" ra'ers ha' e"$oye' he same !rivile)es as "a ive,bor" E")lishme". He"ry II oo0 he Colo)"e mer%ha" s, o)e her *i h he ho#se *hi%h hey o%%#!ie' o" he Thames, es!e%ially #"'er his !ro e% io", sho*i") o hem a"' heir s#%%essors he !rivile)e o& e(!or i") )oo's &ree o& '# y, a"' selli") heir Rhe"ish *i"es &or he same !ri%e a *hi%h Fre"%h *i"es *ere he" sol' i" Lo"'o"< a"' i" 2:@2 hese !rivile)es *ere e( e"'e' by He"ry III o all he +erma"s i" Lo"'o" *ho ha' a share i" he Ha"sea i% &a% ory, or A#la Te# o"i%or#m, *hi%h *as lo") 0"o*" o Lo"'o"ers as he 7S eelyar'.7 I" 2889 he Ha"sar's )ai"e' he )oo'*ill o& E'*ar' II by s#!!lyi") him *i h he mo"ey "e%essary o re'eem he re)alia a"' %oro"a io" $e*els o& his D#ee", *hi%h he ha' !le')e' o Colo)"e mo"ey le"'ers, a"' by allo*i") him o 'ra* #!o" heir ho#ses &or lar)e s#ms *i h *hi%h o 'e&ray he %os o& his Fre"%h *ars. Their rela io"s o o her soverei)"s a ha !erio' *ere eB#ally si)"i&i%a" o& heir !o*er, &or hey 'e&ea e' Fi")s Eri0 a"' Ha0o" o& Nor*ay, a"' Fi") Wal'emar III o& De"mar0< i" 28;9, 'e!ose' Ma)"#s o& S*e'e", a"' bes o*e' his %ro*" #!o" D#0e Alber o& Me%0le"b#r)< a"' i" 2;:9 eB#i!!e' a &lee o& :;9 shi!s, %arryi") 2:,>>> sol'iers, a)ai"s Eri0 o& De"mar0. 7Wi h he 25 h %e" #ry he lea)#e rea%he' a o"%e i s %#lmi"a i") !oi" a"' 'e%li"e, &or i" !ro!or io" as he seas a"' roa's *ere be er !ro e% e' by he s a es o *hi%h hey belo")e', a"' r#lers lear"e' o %om!rehe"' he %ommer%ial a'va" a)es o& heir 'omi"io"s, i s s#!rema%y 'e%li"e'< *hile he 'is%overy o& Ameri%a, a"' o& a "e* sea,ro# e o I"'ia, )ave a" e" irely "e* 'ire% io" o he ra'e o& E#ro!e. The Ha"sa ha', moreover, arro)a e' o i sel&, i" he %o#rse o& ime, !res#me' ri)h s o& im!osi") he )rea er a"' lesser ba", a"' e(er%isi") a% s o& soverei)" y a"' $#'i%ial !o*er, *hi%h *ere i"%om!a ible *i h he s#!rema%y a"' $#'i%ial !o*er, *hi%h *ere i"%om!a ible *i h he s#!rema%y o& he r#lers i" *hose s a es hey *ere e"&or%e', a"' he"%e he lea)#e *as "e%essarily bro#)h i" o &reB#e" hos ile %ollisio" *i h he lo%al a# hori ies. Th#s, i" a%%or'a"%e *i h heir sys em o& e(%l#sive !oli%y, he Ha"sar's re&#se' o )ra" o mer%ha" s . .

ra'i") i" &orei)" !ar s he same !rivile)es i" he Ha"sea i% %i ies *hi%h hey hemselves ha' e"$oye' &or %e" #ries i" E")la"', R#ssia, a"' S%a"'i"avia, a"' he"%e arose 'isse"sio"s, *hi%h "o i"&reB#e" ly e"'e' i" a &ier%e mari ime *ar&are. 6y *ay o& re alia io" &or he !er i"a%i y *i h *hi%h he lea)#e re&#se' o )ra" o he E")lish he ,*hi%h has bee" a%%or'e' o ra'ers o& o her "a io"s, !arliame" reB#ire' ha +erma"s sho#l' !ay he a( o" *ool a"' *i"e, *hi%h *as e(a% e' &rom all o her &orei)"ers i" he E")lish mar0e s< a"' al ho#)h he Ha"sar's s ro")ly resis e', hey *ere a le") h %o"'em"e' by he Co#r s, i" 2;@3, o !ay a &i"e o&& 28,5>>< a"' hey *o#l' !robably have los all hey ha' i" E")la"' i& heir %a#se ha' "o bee" a'vo%a e' by E'*ar' IE, *ho ha' bee" more ha" o"%e i"'eb e' o hem &or mo"ey a"' ai', a"' *ho i" 2;4; se%#re' &or hem, by a %la#se i" he Trea y o& = re%h , a res i # io" o& "early all heir &ormer ri)h s i" E")la"'. I" 2539 heir ol' !rero)a ives, "o *i hs a"'i") he al ere' %o"'i io"s o& he imes, 're* #!o" hem he a")er o& D#ee" Eli?abe h, *ho 'is!a %he' a &lee #"'er Dra0e a"' Norris o sei?e #!o" he shi!s o& he Ha"sa, o& *hi%h @2 *ere %a! #re', *hile she ba"ishe' he Ha"sar's &rom heir &a% ory i" Lo"'o". These meas#res ha' he 'esire' e&&e% o& %om!elli") he Lea)#e o re%eive E")lish ra'ers o" eB#al %o"'i io"s, a"' he"%e&or*ar' he Ha"sar's *ere !ermi e' o o%%#!y he S eelyar', as i" ol'e" imes. The Ha"sa ha', ho*ever, o# live' i s 'a e, a"' a he 'ie hel' i" L#be%0 i" 2@8>, he ma$ori y o& he %i ies &ormally re"o#"%e' heir allia"%e. Hamb#r), L#be%0, 6reme", a"' &or a shor ime Da"?i), remai"e' &ai h&#l o heir a"%ie" %om!a% , a"' %o" i"#e' o &orm a" asso%ia io" o& &ree re!#bli%s ha e(is e' #"%ha")e' ill 292>, *he" he &as hree *ere i"%or!ora e' i" he Fre"%h em!ire. These, i" 2928, %ombi"e' *i h Fra"0&or ,am,Mai" o &orm a #"io". Fra"0&or be%ame Pr#ssia" i" 29@@< *hereas a a %o"ve" io" i" C#ly 294>, he !o*ers a"' !rivile)es o& he hree &ree o*"s *ere rees ablishe' a"' reor)a"i?e', a"' #"'er he em!ire hey s ill re ai"e' heir sel& )over"me" 7. XXV POSTSCRIPT I" he li)h o& he &a% ha 6reme" a"' Hamb#r) are o'ay e&&e% ively &ree %i ies o& he De# s%he 6#"'esre!#bli0 .Wes +erma"y/, may *e "o i"'#l)e o#r *o"'er i" he &a% ha o" he *all o& he mer%ha" ,ba"0er Si)m#"' +. Warb#r), i" Hamb#r), o& a lo") li"e o& Hamb#r) Warb#r)s, a"' o"e o& he hi''e" ma"i!#la ors o& he Fe'eral Reserve, is a mer%ha" ba"0ersA ma! o& he *orl' sho*i") +erma"y, 6ri ai", he ="i e' S a es, a"' Israel as AWarb#r) Co#" ries.7 Is his *ho really o*"s he 6il'erber)ers oo1 Is his *hy hey love he Ma)"a Char a so1 A..e"#*1)I COMMON LAW AND STANDARD SPECIE The %ommo" la* o& ea%h o& he 5> s a es b# o"e .Lo#isia"a/ 'erives &rom *ha is %alle' 7The Commo" La* o& E")la"'.7 I" E")la"', his la* *as 'erive' &rom &e#'al e"#res i" real !ro!er y as hel' by a s#%%essio" o& *ha *ere %alle' e"a" s,i",%hie& a"' mes"e .i" erme'ia e/ lor's or a !yrami' o& !ro!rie ors hol'i") &rom he Ri") o" 'o*". These e"#res, ho*ever, "ever !revaile' i" he Ameri%a" %olo"ies, as he Revol# io" !rove'. I"s ea', he la"' i les ."o e"#res/ i" he Ameri%a" s a es *ere %alle' 7allo'ial7 .see Cha! er 8@ o& he la*s o& 2494 o& Ne* -or0 S a e as a )oo' e(am!le/, *hi%h mea" ha hey *ere "o , as i" E")la"', hel' &rom a !ri"%i!al ori)i"al overlor' .Ri") or Cro*"/, b# ea%h *as o*"e' o# ri)h by he !ro!rie or. These are he same i les ha

!revaile' i" E")la"' !rior o he %omi") o& William o& Norma"'y. The hol'ers o& hem *ere %alle' 7ro #riers.7 Th#s, i is %lear ha la"' i les hro#)ho# he ="i e' S a es are "o hel' o& he Fe'eral +over"me" , a"' si"%e, by re!ea e' S#!reme Co#r 'e%isio"s, here is "o 7)e"eral Fe'eral %ommo" la*,7 &e'eral i" eres s i" la"' %a" be o"ly eB#i able a"' "o le)al. They may be hel' by s a # e, b# he s a # e *ill 'erive "o &rom a le)al !ri"%i!al or !ri"%i!le, b# &rom a" eB#i able o"e, ha is, o"e o# si'e he 7%ommo" la*.7 This si #a io" *as %rys alli?e' by he 'e%isio" i" he Erie R.R. %ase .8>; =.S. @;/ a"' o her s#bseB#e" here o. The !ri"%i!al !oi" i" his is ha he Fe'eral )over"me" %a" "ever a%B#ire %ommo" la* ri)h s i" real !ro!er y i" he ="i e' S a es i"'ivi'#ally or s#!rema%y over i e(%e! hro#)h he la* o& he S a es or by eB#i able mea"s &rom o her so#r%es. The a%e i" he hole is ha "o S a e i les are eB#i able i les. Ar i%le I, Se% io" 2>, %la#se 2, o& he Fe'eral Co"s i # io" *as 'esi)"e' !re%isely o !ro e% la"'e' !ro!er y &rom assa#l s hro#)h he s#b er&#)e o& eB#i able bases, !ar i%#larly irre'eemable !a!er mo"ey as 7le)al e"'er &or all 'eb s7 a"' "o 7le)al e"'er i" !ayme" o& 'eb s.7 Tha is, all le)al ra"s&ers o& real !ro!er y *ere a%%om!lishe' by 'elivery o& he s#bs a"%e i sel&, 7 #r& a"' *i),7 ha is *ha a 7'ee'7 al*ays *i "esse'< he a% #al 'elivery o& he s#bs a"%e o& he la"', a"' "o a mere ri)h o e"$oy a someo"e elseAs !leas#re. This &a% %learly sho*s he 'i&&ere"%e be *ee" a 7 i le7 a"' a 7 e"#re.7 Ti les are allo'ial, e"#res are &e#'al, i" ori)i". Ti les have "o !aramo#" overlor', e"#res 'o. I As ha sim!le. Th#s, a"yo"e *ishi") o a%B#ire %o" rol over all he la"' i" he ="i e' S a es m#s base his a!!roa%h o" some hi") besi'es a 7)e"eral &e'eral %ommo" la*,7 *hi%h is he la* o& s#bs a"%e or la"' a"' har' mo"ey. The o"ly *ay o a%%om!lish his hro#)h he &e'eral )over"me" is by eB#i able mea"s. Tha is, *i h he #se o& 'eb ,mo"ey a he &e'eral level. S#%h is he #se o& he Fe'eral Reserve< o smo her he "a io" i" mo"ey *hi%h is eB#i able .irre'eemable/ a"' "o le)al. Le)al mo"ey is s a"'ar' s#bs a"%e, eB#i able mo"ey is a !romise o& he s#bs a"%e. EB#i able mo"ey is mo"ey *hi%h %a" %o"&is%a e real !ro!er y by e( ra,le)al mea"s o her*ise 7la*&#l.7 Al ho#)h 7eB#i able7 a"' 7le)al7 are bo h 7la*&#l7 a"' "o he o her *ay aro#"'. Nor are he erms 7le)al7 a"' 7la*&#l7 sy"o"ymo#s or i" er%ha")eable. This is *hy he Fe'eral Reserve No es are %alle' 7la*&#l mo"ey7 .eB#i able/ "o 7le)al mo"ey.7 So *e see ha he !#r!ose o& he Fe'eral Reserve is o a%%om!lish o" he Fe'eral level *ha he Co"s i # io" &orbi's o" he S a e level. Or more e(!li%i ly, o eva'e he Co"s i # io" o" he iss#e o& %oi" i" or'er o a%B#ire i le o he la"'s o& he S a es a"' %o"ver hem i" o e"#res. This is !ar ly a%%om!lishe' hro#)h he so,%alle' 7!#r%hase,mo"ey,mor )a)es7 )ive" o# by he ba"0s, amo") o her hi")s. 6# more ha" ha , i s#b$e% s he %i i?e"s o& s a es o b#r'e"s *hi%h he S a es are !o*erless o im!ose .i.e. !a!er mo"ey/, by %om!elli") %i i?e"s o& S a es o 'eal *i h he S a es o"ly hro#)h he ba"0s a"' heir 7eB#i able7 mo"ey a"' o her "e)o iable

i"s r#me" s #"'er he La* Mer%ha" .!riva e/, *hile he ba"0s 'eal *i h he S a es i" he eal s #&& o& mo"ey or'ers. The ob$e% i" he e"' is o %rea e a 7)e"eral &e'eral eB#i y7 i" !la%e o& a 7)e"eral &e'eral %ommo" la*,7 o# la*i") all lo%al %ommo" la* o& he S a es i" la"'e' !ro!er y, re!la%i") Presi'e" *i h Cha"%ellor a he Fe'eral level. A"' he $o0er is ha *here 7%ommo" la*7 belo")s o he Peo!le i" heir $#ries, 7eB#i y7 belo")s o"ly o he E(e%# ive. This is he 'e%ei &#l e(e%# ive s#mmary 7La* a"' Or'er7 o" s a # es !romo e' by he 6ir%h So%ie y, A Ro%0e&eller &ro" , i" he "ame o& a 7be er *orl',7 a"' 7#"'er +o'7 o& %o#rse, *hi%h &ro" s #'io#sly i)"ores he ra"s&orma io" o& o#r Re!#bli% o& Se!ara io" o& Po*ers i" o a Parliame" ary 7Re!#bli%7 so, %alle', #"'er *hi%h he Le)isla ive a"' E(e%# ive .as i" a %or!ora io"/ are #"i e'. This is he 6ir%h So%ie yAs mea"i") o& 7Re!#bli%,7 i" *hi%h 7We he Peo!le7 have bee" o ally 'e&ra#'e' o& o#r %ommo" la* $#ries i"%or!ora e' i" o he E(e%# ive< o#r %ommo" la* #r"e' i" o he Roma" Civil La* o& he Cha"%ellors. I is his !#!!e ,Cha"%ellor *hi%h he :5 h Ame"'me" *as 'esi)"e' o bri") o Ameri%a by i"%or!ora i") he E(e%# ive i" o he Le)isla ive. I" !lai" &a% , a 7!arliame" ary7 Re!#bli% is a" a"omaly be%a#se here is "o s#%h a hi"). A Presi'e" is "o a Co")ress or a Parliame" , "or, e(%e! i" E#ro!ea" %o#" ries, is a Co")ress a" E(e%# ive, as he 6ri ish Parliame" *as ha &or%e' #s o Revol# io". I *as !re%isely a)ai"s his la* o& he Cha"%ellors ha he 5 h a"' 4 h Ame"'me" s a"' o hers *ere 'esi)"e' o !ro e% #s. THE SIN+LE SOLITAR- ISS=EJ MONEThe 2@ h Ame"'me" a"' he Fe'eral Reserve bo h %ame i" o bei") i" he 2328, he same year i" *hi%h "e* Fe'eral EB#i y R#les *ere ma'e. The !#r!ose o& he Fe'eral Reserve a"' heir No esJ To s#b$e% all i" ers a e %ommer%e o he r#le o& EB#i y .overr#li") S*i& v. Tyso"/ #!o" he %laim ha here is "o )e"eral Fe'eral Commo" La* .e(%e! FRNAs/. .Na io"al 6a"0 7%ommo" la*7 is la* o& !riva e !ro!er y as e(!o#"'e' i" he %ase 'e%isio"s, a"' #"'er*ri e"/. .La* #!o" a s a # e is ei her %ivil or %rimi"al/. Th#s, hey a%B#ire' he mea"s o& eva'i") he i"$#"% io" o& Ar i%le I, Se% io" 2>, %la#se 2 o" he iss#e o& e"'er o& he s a es by #si") !riva e %o" ra% . So, i" 2389, hey ma'e i o&&i%ial by Erie R.R. 6y i , he La* Mer%ha" *as a0e" o# o& he %ommo" la* a"' !# i" o EB#i y, *here i %o#l' be 7$#'i%ially "o i%e'7 i" a"y $#ris'i% io". La* Mer%ha" K S#mmary C#')me" K 7Na #ral La*.7 FRNAs &o#"' la*&#l by Milam, *hi%h rei era e' he le)al e"'er %ases o& 299; .C#lliar', &or e(am!le/. The mea"i") is ha he Fe'eral +over"me" %a" o# la* %ommo" la* o" he &e'eral level a"' re!la%e i *i h eB#i y e"&or%eable by s a # es a"' a "e* ma""er o& !lea'i"). This is he sys em o& 7%o"&essio" a"' avoi'a"%e,7 *hi%h #r"s he %o#r s i" o ra'i") a"' bar)ai"i") !i s. 6# he Fe'eral +over"me" %a""o .by Ar i%le I, Se% io" 2>, %la#se 2/ o# la* he s#bs a"%e o& he %ommo" la* o& he several s a es a"' h#s re)#la e %ommer%e *i hi" he s a es by %om!elli") eB#i able mo"ey .%ommer%ial !a!er, "e)o iable i"s r#me" s/ i" e(%ha")e be *ee" S a es a"' %i i?e"s o& s a es. Nor %a" he S a es.

Loo0 %are&#lly a he S a e Civil Pra% i%e La* a"' R#les. The 7La*7 is he La* o& he S a e< he R#les are he EB#i y o& he La* Mer%ha" . The sim!les !lea i" S a e Ta( %ases is i"abili y o !er&orm. A"' "o la*yer has ever ol' a"yo"e ha N No Fe'eral la* %a" o# la* he Cash basis o& he la* im!ose' o" he S a es by Ar i%le I, Se% io" 2>. I" he same %o""e% io", he Fe'eral +over"me" %a""o o#%h allo'ial la"' i les i" he S a es, "or #r" eB#i able mor )a)es i" o le)al o"es by ma)i%. The si")le soli ary iss#e , mo"ey a"' %re'i . We %a"A *i" o" a"y o her. ="'er he Commer%e %la#se, Co")ress %a" re)#la e .by FRNAs/ i" ers a e %ommer%e .i" er"a io"al as *ell/, b# i %a""o o#%h he rela io"shi! be *ee" a %i i?e" a"' his S a e. A..e"#*1)II JURY TRIALS AND CHANCELLORS Si"%e he &orma io" o& he Fe'eral Reserve, a"' es!e%ially si"%e 2388, he o&&i%e o& he Presi'e"%y has bee" )ra'#ally ra"s&orme' i" o a Cha"%ellorshi! o" he mo'el o& he E#ro!ea" .!ar i%#larly +erma"/ )over"me" s. The ob$e% has bee" o #"i e he e(e%# ive a"' le)isla ive i" s#%h a *ay ha he !o*ers o& le)isla io" a"' o& e"&or%eme" are !la%e' i" he same ha"'s. Th#s, o#r %ommo" la* sys em o& a%%#sa ory la* a"' rial by $#ry .Seve" h Ame"'me" / are "early 'es roye' a"' re!la%e' *i h he i"B#isi ory sys em o& 'e!ar me" al rial .e(e%# ive s#%h as Ta( Co#r /. This is a%%om!lishe' by re!la%i") iss#e,!lea'i") *i h %o'e,!lea'i") or 7&a% 7 !lea'i"), #"'er *hi%h all la* is e"&or%e' by e(e%# ives .%or!ora e b#rea#%ra s/ #!o" he le er o& a s a # e .li0e B#o i") he 6ible , 7 he 6ible se?7 . . ./ The" "o "ee' &or $#ries. The Cha"%ellor #"'er his sys em .&ormer Presi'e" / h#s a%B#ires he !o*ers o& he $#ry o i" er!re he la*s. ="'er o#r %ommo" la* he i" er!re a io" *as he !rovi"%e o& he $#ry, a"' he %o"s r#% io" he !rovi"%e o& he $#')es. I" er!re a io" is ma'e #!o" he mea"i") o& he *or's o& a s a # e. Co"s r#% io" is ma'e #!o" he i" e" o& he le)isla #re. The .Fe'eral/ Cha"%ellor .a"' all his e(e%# ive &l#"0ies/ h#s a%B#ires he !o*ers o& he $#ry o i" er!re he la*, he !o*er o %o"s r#e bei") le& o he hi)hes C#'i%iary, he Dis ri% Co#r s im!osi") he mea"i") as erra"',boys &or he Co")ress. Tha leaves !re%io#s li le room &or 'isse" , &or #"'er his sys em he o"ly La* is he s a # e. The ori)i"al !#r!ose o& he $#')eAs %har)e *as o e(!lai" he le)isla ive i" e" o he $#ry *ho alo"e ma'e he i" er!re a io" o" he &a% s i" ha li)h . Th#s, he s*i"'le !romo e' by he a'vo%a es o& %o'e,!lea'i") a"' o& Cha"%ellor,)over"me" is very e&&e% ively abe e' by hose *ho love o B#o e he 6ible a"' he Co"s i # io" as sole 7La*.7 They !ra% i%e he very hi") *hi%h hey lame" a"' 'e!lore i" o hers. They B#o e he *or's, b# reserve he i" er!re a io" o hemselves, as *ell as he %o"s r#% io". They are 'oome' o 'e&ea , as has bee" sho*" over a"' over a)ai", &or hey &ail o 'is i")#ish be *ee" la* a"' eB#i y. 6# *orse ha" heir o*" 'e&ea s, hey *ish o ha#l he res o& #s alo") *i h hem o" he basis o& heir o*" ill#sio"s. MoralJ Marry #! he 6ible, h#m!ers *i h %or!ora e imm#"i y ma"ia%s a"' yo# have he !er&e% %lima e &or he Fas%is s a e !romo e' by Ro%0e&eller a"' Com!a"y hemselves. C#s *hoAs 0i''i") *hom, a"y*ay1

A"yo"e *ho has ever bee" remo ely %o"%er"e' *i h he s#b$e% s o& Mo"ey, I"%ome Ta(, IRS, La* Co#r s, So%ialism, Co"s i # io"al La*, or a"y o her rela e' s#b$e% m#s be)i" his s #'y i" o"e !la%e alo"e. A"' ha is i" Ar i%le III, Se% io" :, o& he Fe'eral Co"s i # io", *hi%h rea'sJ 7The $#'i%ial !o*er shall e( e"' o all Cases, i" La* a"' EB#i y, arisi") #"'er he Co"s i # io", he La*s o& he ="i e' S a es, he Trea ies ma'e, or *hi%h shall be ma'e, #"'er he A# hori y.7 Omi i") he res o& he e( o& his se% io", le #s see *ha *e have i" o"ly he &e* *or's above B#o e'. Firs , *ha is he 7C#'i%ial Po*er17 Well, *ha is a Po*er1 I is a" a# hori y or %a!a%i y 'ele)a e' &rom a !ri"%i!al o a" a)e" o 'o or o a%%om!lish s!e%i&i% a% s. The Po*er *hi%h is C#'i%ial is he Po*er o hear a"' 'e ermi"e or resolve %o" roversies. I is his 7Po*er7 *hi%h )ives $#ris'i% io". Se%o"', hese %o" roversies arise i" *o areas, as he e( says, o"e i" 7La*7 a"' he o her i" 7EB#i y.7 Wha 'is i")#ishes La* a"' EB#i y be%omes o#r !ri"%i!al %o"%er", *hi%h *e shall !os !o"e #" il *e have 'eal *i h he remai"i") erms i" he se% io". A 7Case7 is a %laim base' #!o" a ri)h *hi%h is ei her absol# e or rela ive a La* or i" EB#i y a"' has "o o# live' some s a # ory or o her*ise la*&#l limi a io" !la%e' #!o" i &or e"&or%eme" i" he Co#r s. .See 3 Whea 489/. All ri)h , he", s#%h 7%ases7 arise #"'er o"e o& hree eleme" ary 'ivisio"s o& he A$#'i%ial !o*erA or $#ris'i% io". 2. 7This Co"s i # io",7 i"%l#'i") all he Ar i%les o& he 6ill o& 6i)h s a"' s#bseB#e" Ame"'me" s. :. 7The La*s o& he ="i e' S a es.7 Tha mea"s he s a # es !asse' by he Co")ress, ho#)h i #se' o have a" a''i io"al %ri i%al a!!li%a io" o *ha is 0"o*" as 7%ommo" la*.7 .see 4 h Ame"'me" / 8. 7Trea ies ma'e, or *hi%h shall be ma'e, #"'er heir A# hori y.7 Tha mea"s *o hi")sJ Firs , rea ies ma'e by he ="i e' S a es #"'er he Ar i%les o& Co"&e'era io" be&ore he a'o! io" o& he !rese" Co"s i # io" i" 2493 a"' i i"%l#'es he Trea y o& Paris i" 2498 a"' a"y rea y ma'e si"%e, i"%l#'i") he so,%alle' ="i e' Na io"s Trea ies. Tha As B#i e a ra As "es . Le #s "o e %are&#lly, be&ore *e !ro%ee' &#r her, he 7C#'i%ial Po*er7 o& he ="i e' S a es mea"s he $#'i%ial !o*er o& he Fe'eral +over"me" , a"' "o o& he S a es %olle% ively or i"'ivi'#ally. I mea"s he $#'i%ial !o*er o& he ="io". The Fe'eral Dis ri% Co#r s *ere %rea e' !re%isely o i"s#re he e(is e"%e o& a leas o"e rib#"al i" ea%h S a e i" *hi%h a li i)a" %o#l' !res#me o be &ree o& a"y lo%al i"&l#e"%e, ha is %olor o& lo%al la* !re$#'i%ial o he mea"i") a"' i" e" o& he Fe'eral Co"s i # io", he La*s o& he Co")ress a"' Trea ies.

The "a io"al la* h#s, *e see, is %om!rise' o& Co"s i # io", s a # es o& Co")ress . he 7la*s7/, a"' rea ies o& he ="io" i"so&ar as hey are o ally %o"sis e" *i h ea%h o her, "o o"ly i" La* b# i" EB#i y. F#r her, he Co"s i # io" i sel& e( e"'s his !o*er as a" i"$#"% io" o he s a e level, *here 7The $#')es i" every S a e shall be bo#"' hereby, a"y hi") i" he Co"s i # io" or la* o& a"y S a e o he %o" rary "o *i hs a"'i"),7 %om!elle' h#s o e"&or%e he Co"s i # io", La*s or !rovisio"s o& Trea ies m# #ally %o"sis e" . Eery *ell, he", *e arrive a he B#es io" o& *ha is La* a"' *ha is EB#i y1 Ca" yo# remember he las ime yo# hear' a Ta(,S ri0er me" io" he *or' 7EB#i y,7 &or all he imes he )oes o %o#r or %halle")es a %o#r As $#ris'i% io"1 Come o hi"0 o& i , ho* ma"y imes have yo# hear' a Ta(,S ri0er eve" %halle")e he $#ris'i% io" o& he %o#r o r#le i" EB#i y1 This is a very serio#s B#es io", be%a#se res!o"sible !eo!le have hro*" o# some very serio#s a"' mislea'i") %har)es. This is "o o say "e%essarily ha yo# or I *o#l'"A have h#rle' he same %har)e #"'er he same %ir%#ms a"%es, #"less, !erha!s, *e ha' a0e" %are&#l "o e o& all he *or's i"volve', s#%h as, &or e(am!le, he 'i&&ere"%e be *ee" 7La*7 a"' AEB#i y7 a"' he ori)i" a"' a!!li%a io" o& ea%h. Wha 'o hese *o *or's mea", a"y*ay1 Obvio#sly, hey are "o he same hi"). Nor 'o hey mea" he same hi") a Fe'eral a"' S a e level. La* &irs o& all 'erives &rom he a"%ie" %o#r s o& %ommo" la*, *hile EB#i y 'erives &rom o&&i%ers 0"o*" as Cha"%ellors. I" heir his ori%al 'evelo!me" , La* is $#'i%ial, a"' EB#i y is e(e%# ive. This sho#l' !rovi'e #s *i h o#r &irs %l#e o he mome" o#s 'i&&ere"%e a"' a!!li%a io" o& he *o. F#r her, EB#i y is he la* ori)i"ally s#!!lie' by he Fi") i" he !erso" o& his Cha"%ellor or %hie& o&&i%er o ma0e #! &or 'e&i%ie"%ies i" he )e"eral #"*ri e" la* o& !riva e !ro!er y a"' !erso"al rela io"s %alle' he %ommo" la*. Commo" La* *as he la* #!o" *hi%h $#ry rials *ere hel', a"' *as he #"*ri e" la* as i has bee" 'e%lare' or reveale' o e(is hro#)h he %ase 'e%isio"s o& he %o#r s. S#%h *as !rimarily he *hole ra'i io" o& he so,%alle' #"*ri e" Co"s i # io" o& E")la"'. A"o her imme'ia e 'i&&ere"%e be *ee" La* a"' EB#i y is ha i" EB#i y here are "o $#ry rials. The Po*ers o& he $#ry are e(er%ise' by he Cha"%ellor. I" EB#i y, %o" roversies *hi%h *o#l' ori)i"ally be 'e%i'e' by a $#ry are 'e%i'e' by he $#')e. I is h#s %lear ha a C#')e is "o a Cha"%ellor, "or is a Cha"%ellor a $#')e. I is li0e*ise %lear ha he $#ry is as m#%h a $#'i%ial o&&i%er as a"y $#')e. La* he" belo")s o he !eo!leAs %o#r , a"' EB#i y o he Cha"%ellorAs. All ri)h , he", *ha ha!!e"e' o his EB#i y *he" he Ameri%a" %olo"ies )o ri' o& he Fi")1 Wha ha!!e"e' o he Po*ers o& he Cha"%ellor1 Was i assi)"e' o he $#')es1 No, "o "e%essarily. I resi'e' someho* i" he S a e i" he "ame o& he Peo!le, a%%or'i") o he Co"s i # io" o& ea%h o& he ori)i"al S a es. Wha more lo)i%al !la%e &or i o )o ha" i" o he Peo!leAs $#ries. This remar0able %ir%#ms a"%e is evi'e"%e' a he Fe'eral level i" he *ell,0"o*" %ase o& +eor)ia v. 6rails&or', .8 Dall, 243;/. This, he", is he mos %ri i%al iss#e i" Ameri%a" La*, a"' o"e *hi%h o!!o"e" s o& 6i) +over"me" .*he her !#bli% or !riva e/ "ever me" io". A"' be&ore *e %a" 0"o* ho* o a a%0

his !roblem i" he Co#r s, *e m#s reali?e e(a% ly *ha has ha!!e"e' o Ameri%a a"' o Ameri%a" La* hro#)h he s#bversio" o& he !o*ers o& he $#ry. A he Fe'eral level, *e %a" !hrase he B#es io" very sim!lyJ 7Do *e have a Presi'e" or a Cha"%ellor17 To #"'ers a"' he a"s*er o his B#es io" *e m#s i" '#e %o#rse e(ami"e he r#e mea"i") o& he :5 h Ame"'me" . We m#s &irs ma0e a "e* his ori%al !ers!e% ive. I" 29;@, he S a e o& Ne* -or0 se a "e* e(am!le by assi)"i") he !o*ers o& he Cha"%ellors o he $#')es by he a% o& 7mer)i")7 La* a"' EB#i y i" o he same %o#r s. The %o#r s o& la* h#s %ame o have a 7la* si'e7 a"' a" 7eB#i y si'e.7 This mer)er *as soo" %o!ie' i" all he %o#r s a%ross he la"', or "early all. Ho* his !o*er o& he Cha"%ellor has bee" #se' a he Fe'eral level is he his ory o& he ="i e' S a es si"%e 2389, *he" a %er ai" %ase %alle' Erie R.R. v. Tom0i"s *as 'e%i'e' by he S#!reme Co#r . This is a *hole s ory i" i sel& *hose %o"seB#e"%es are &as %omi") o a %rises i" he %o#r s o& he "a io" a"' s a es. A"' he B#es io" !ose' is hisJ 7Ca" he Po*ers o& he Cha"%ellor *or0 a)ai"s he $#ries o& he Peo!le17 The resol# io" o& his B#es io" raises ma"y "i%e B#es io"s. For e(am!le, as he mer)er o& la* a"' eB#i y !ro)resse' i" he S a es a"' Na io", 'i' he $#')es be%ome e(e%# ives a"' he $#ries mere a'visors1 I" o her *or's, %a" he !o*er o& he Cha"%ellor re!la%e he $#ry i" he %o#r s o& la*1 Well, !erha!s, b# he $#'i%iary s ill remai"s. 6# s#!!ose *e %o"si'er he E(e%# ive. Ca" he E(e%# ive a%B#ire he !o*ers o& he $#'i%iary1 Ca" he Co")ress .or by a"alo)y he Le)isla #res o& he S a es/ bri") his abo# #"'er %olor o& Ar i%le III, Se% io" :1 Ca" he Co")ress la*&#lly assi)" he EB#i y !o*ers o& he $#'i%iary o he e(e%# ive, or more !re%isely %a" i a0e he eB#i y !o*ers o& he "a io"al %o#r s a"' assi)" hem o he E(e%# ive, a"' h#s a!!or io" i amo") all he b#rea#%ra s %rea e' by he la*s o& he Co")ress1 Ca" he Presi'e" , he", be%ome "o merely a" e(e%# ive a la*, b# a" e(e%# ive i" EB#i y or a" o# ri)h Cha"%ellor1 Ca" he Presi'e" , by a# hori y o& he Co")ress, a%B#ire !o*ers *hi%h ma0e him absol# ely a Cha"%ellor1 Ca" he Co")ress e&&e% ively 'es roy he o&&i%e o& Presi'e" by i s le)isla io"1 Does he Co"s i # io" assi)" he Co")ress his !o*er. Have he Peo!le 'o"e so1 A!!are" ly "o , o her*ise *e *o#l' have ha' "o #se &or he :5 h Ame"'me" , "or *o#l' *e have ha' o resor o i . Wha he :5 h Ame"'me" 'oes, i& yo# *ill, is o 7%o"s i # io"ali?e7 he me amor!hosis o& he Presi'e"%y i" o a Cha"%ellorshi! a la*, *hi%h e&&e% ively a0es he $#ry !o*ers o& he !eo!le o# o& he %o#r s a"' ra"s&ers hem o he E(e%# ive. This is e(a% ly *ha has ha!!e"e'. 6y his s#b le r#se, he", hro#)h he :5 h Ame"'me" , he Presi'e"%y a"' he Ei%e Presi'e"%y have bee" ra"s&orme' res!e% ively i" o a Presi'e" o& a %ommer%ial %or!ora io" a"' a 6oar' o& Dire% ors .Ei%e Presi'e"%y/ or a C#" a *hi%h %a" re!la%e he !resi'e" .or Cha"%ellor/ a *ill. C#s rea' he :5 h Ame"'me" . For all else hey al0 abo# , Ta(,Pro es ers very %are&#lly avoi' hese imme'ia e iss#es. For some reaso" hey are s #!e&ie' i" o sile"%e by he he')e o& %or!ora e !rivile)e a"' imm#"i y .i s e%h"i%al "ame is 7liber y7/ *hi%h )o ha"' i" ha"' *i h he s#&&o%a io" o& rial,by,$#ry. Promi"e" a(,!ro es ers are s ra")ely sile" o" he s #!e"'o#s %o"%l#sio"s o be 'ra*" &rom he %ase o& 6r#shaber v. ="io" Pa%i&i%, i" he !ro e% io" o& he ri)h s o& i"'ivi'#als e"$oyi") "o limi e' liabili y *ha ever, a"' i" "o *ay s#b$e% o a )e"eri% i"%ome a( or o a" e(%ise amo#" i") o he same hi"). Their s #!e&a% io" seems o arise i" he s ra")e ass#m! io" ha a

!riva e %or!ora io" is a"alo)o#s o a" i"'ivi'#al b#si"essma". I" a"y %ase, *ha has ha!!e"e' all he *ay aro#"', sim!ly s a e', is ha he Co")ress .a"' Le)isla #res/ have %o"sis e" ly ero'e' he !o*ers o& he $#ry i" la* a"' eB#i y bo h a"' ra"s!la" e' hem i" o he e(e%# ive *here hey are &#""ele' 'o*" hro#)h he !yrami' o& b#rea#%ra s, *ho be%ome o"e,ma" $#ries i" eB#i y .*hi%h is "o more ha" heir o*" 'is%re io"/ #!o" he s a # es o& he Co")ress or le)isla #re. A..e"#*1)III ELEMENTARY LAW ON 5PERSONS,5 FROM SUPREME COURT CASES We s a e' ha ri)h s o i" a")ibles 7are b# rela io"shi!s be *ee" !erso"s, "a #ral or %or!ora e, *hi%h he la* re%o)"i?es by a a%hi") o hem %er ai" sa"% io"s e"&or%eable i" he %o#r s. The !o*er o& )over"me" over hem a"' he !ro e% io" i )ives hem %a""o be e(e%# e' hro#)h %o" rol o& a !hysi%al hi"). They %a" be ma'e e&&e% ive o"ly hro#)h %o" rol over a"' !ro e% io" a&&or'e' o hose !erso"s *hose rela io"shi!s are he ori)i"s o& he ri)h s . . . Obvio#sly, as he so#r%es o& a% #al or !o e" ial *eal h, *hi%h is a" a!!ro!ria e meas#re o& a"y a( im!ose' o" o*"ershi! or i s e(is e"%e, hey %a""o be 'isso%ia e' &rom he !erso"s &rom *hose rela io"shi!s hey are 'erive'. These are "o i" a"y se"se &i% io"s, hey are i"'is!# able reali ies.7 C#rry v. M%Ca"'less, 8>4 =.S. 854 a 8@@, %i e' i" S a e Ta( Commissio" v. Al'ri%h. 7The %or!ora io" o*es i s e(is e"%e o = ah.7 .This *as a %ase o" %or!ora e i"%ome a(./ 7. . . as 'e%lare' by C.C. Marshall o& M%C#llo%h v. Maryla"', hro#)h 'omi"io" over a")ibles or over !erso"s *hose rela io"shi!s are he so#r%e o& i" a")ible ri)h s< or o" he be"e&i a"' !ro e% io" %o"&erre' by he a(i") a# hori y or bo h.7 Ibi', !!. 8@4,8@9. 7Perso"s,7 he", a"' 7!erso"al rela io"s7 are %o" ra% #al i" a")ibles %rea e' by so%ie y. 7Na #ral Perso"s7 are hose *ho have %ome i" o So%ie y o# o& Na #re .i"'ivi'#als/, as *i h 7Na #ral Ri)h s. 7 ri)h s.7 A 7C#ris i% !erso"s7 are hose %rea e' by So%ie y, e"$oyi") 7%ivil. There are "o 7%ivil ri)h sA i" Na #re. I" =SA, So%ie y is or)a"i?e' as a Re!#bli%. Wha is 7Re!#bli%17 2. 7Re!#bli%7 as 'is i")#ishe' &rom 7Demo%ra%y.7 :. 7Re!#bli%a"7 as 'is i")#ishe' &rom 7Parliame" ary.7 Th#s 2. sees So%ie y as a %or!ora io" i" *hi%h a" ele% e' mi"ori y %a" bi"' he !ri"%i!als #!o" heir a% s as a)e" s. A"' :. a%0"o*le')es Se!ara io" o& Po*ers i" Re!#bli%. I" Parliame" ary )over"me" , he Le)isla ive a"' E(e%# ive are o"e. .This is *ha )o +eor)e III i" o ro#ble *he" he reasser e' he i"'e!e"'e"%e o& he Cro*" &rom he Parliame" ary 'i% a orshi!. No*, by Ameri%a" la*, "o o"e %a" be e(%l#'e' &rom he ele% ive &ra"%hise .vo e/ a"' all %i i?e"s are %o"si'ere' as !ar "ers o he %o" ra% . Whereas i" he %or!ora e vie*, o"ly a" eli e is

B#ali&ie' o 7r#le.7 Th#s, 7 his is a Re!#bli%, "o a Demo%ra%y7 is a &alse a"' 'e%e! ive iss#e, si"%e by o#r Co"s i # io", "a #re %rea es "o !erso"s, o"ly ,i"'ivi'#als, a"' he o"ly o"es *ho %a" be e(%l#'e' &rom he &ra"%hise are hose *ho have !re%isely los heir 7%ivil ri)h s7 by '#e !ro%ess. O#r Co"s i # io" says 7No i"'ivi'#als are bor" !erso"s,7 ha is, bor" o !rivile)e or o %ivil s a #s. The &a% ha a )over"me" is 7re!rese" a ive7 'oes "o "e%essarily ma0e i a 7Re!#bli%.7 The *o are "o m# #ally i"%l#sive. Nor are 7Re!#bli%s7 a"' 7Demo%ra%ies7 m# #ally e(%l#sive. As a ma er o& &a% , Parliame" ary )over"me" may be re!rese" a ive, b# i is "o re!#bli%a". A"' here yo# have i . A Demo%ra%y is a re!#bli%a" )over"me" < a !arliame" ary )over"me" "everN Th#s, 6ir%hism 'ivi'es So%ie y i" o *o )ro#!sJ The S#%%ess&#l a"' he ="s#%%ess&#lJ he R#lers a"' he R#le'J Mas ers a"' Serva" sJ Co"s#mers a"' Pro'#%ers. The ="s#%%ess&#l are he Re!roba e< o"ly he S#%%ess&#l are he Eir #o#s .+o'As Peo!le/. This is he ra* r#le o& Na #re, i" *hi%h Civil Ri)h s .ri)h s o& !erso"s or %i i?e"s/ "o lo")er e(is . I is he la* o& he $#")le, o& he s#mmary $#')me" .La* Mer%ha" /, o& he s#rvival o& he &i es .. A"' o"ly he &i es are &i o be he Mas er .Ra%e/, %rea i") heir o*" mo"ey a"' %re'i . So, o 7smash he s a e7 is o 'es roy all %ivil ri)h s a"' ri)h s o& !erso"s i" !ro!er y, %rea e' by )over"me" , a"' o re!la%e i *i h he s#mmary $#')me" r#le o& he &is i" a !yrami' o& !riva e &ra"%hise. So, he 6ir%h me" ali y s a"'s by a"' !rea%hes *hile So%ie y is i"#"'a e' *i h &il h. Those #"s#%%ess&#l a)ai"s he &il h are he 7Re!roba e,7 &or, i& hey ha' he +ra%e o& +o', he 6ir%her says, hey *o#l' be 7s#%%ess&#l,7 $#s li0e me. Ho* 'o yo# 'es roy 7+over"me" 17 Ho* 'o yo# 7smash he S a e17 6y havi") 7!riva e e" er!rise7 a0e i over. 6y le i") he !erso"al %or!ora e %rea #re a0e he li&e o& i s Crea orJ So%ie y. Tha is A heism a"' Dei%i'e< he m#r'er o& +o'. We 'o"A "ee' o 7+e +over"me" o# o& 6#si"ess7 so m#%h as o 7+e 6#si"ess o# o& +over"me" .7 The !eo!le o& PA have "o assi)"e' heir $#ry !o*ers o a Cha"%ellor, "or have he !eo!le o& he S a e o& PA ma'e he )over"or a %ha"%ellor. They #se he s a # e as %olor a"' %over o e"&or%e heir o*" !riva e eB#i y a"' have "o $#ris'i% io" over a" i"'ivi'#al. There are *o 0i"'s o& La"' Ti lesJ 2. Co!yhol' or Fe#'al :. Freehol' or Allo'ial. No overseerAs Ca" he s a e hro#)h i s $#')es, %om!el !e i io"ers o be a mer%ha" i" eB#i y #!o" "e)o iable i"s r#me" s #"'er %olor o& La* Mer%ha" i" or'er o 'e!rive me o& a &e'eral ri)h a la* #"'er Ar i%le I, Se% io" 2>, %la#se 2 o& he Fe'eral Co"s i # io"1 I"%ome K A ra e o& re #r" o& %a!i al.

P#bli% C#ris'i% io" is le)al. Priva e C#ris'i% io" is eB#i able a"' "o le)al. Sales Ta( , I As a" im!ossibili y &or a mer%ha" o %olle% a Sales Ta(. The o"ly Ta( a mer%ha" %a" %olle% is a( o" a !#r%hase a"' Sales Ta( is "o a !#r%hase. A Ta( o" a sale is "o a a( o" a !#r%hase. A MATTER OF FACT Ar i%le I, Se% io" 2>, %la#se 2 says he s a es have %ommo" la* i& his is he %ase, *here 'oes he E(e%# ive a%B#ire eB#i y1 I& Ar i%le III, Se% io" : o& he Fe'eral Co"s i # io" says eB#i y is i" C#'i%iary o"ly he" i &ollo*s ha he s a es are more bo#"' o %ommo" la* hro#)h Ar i%le I, Se% io" 2>, %la#se 2. Fis%al K !er ai"i") o Treas#ry Mo"e ary K Mo"ey i sel& Fi"a"%ial K Floa i") o& E%o"omy Pe%#"iary K Eal#e o& mo"ey E%o"omi%s K P#bli% or !riva e ma"a)eme" o& mo"ey S a es have "o $#ris'i% io" i" Fis%al EB#i y. P#bli% Mo"ey K +ol' a"' Silver %oi" or =.S. No es. Fe'eral Reserve No es a"' sl#)s K Deb , a"' are "o mo"ey. Ta(es are 7D#es,7 "o 'eb s. D#es %a" o"ly be !ai' i" mo"ey "o 'eb . FRNAs a"' "e)o iable !a!er %a""o be he eB#ivale" or s#bs i # e &or %oi" or s!e%ie be%a#se %oi" a"' s!e%ie %a""o %om!el me o be mer%ha" i" eB#i y as he "e)o iable !a!er %a". Ar i%le III, Se% io" :J 7The C#'i%ial Po*er shall e( e"' o all %ases i" La* a"' EB#i y arisi") #"'er he his Co"s i # io", la*s li0e rea ies e %. La* is he s a # e !asse' by he Co")ress. EB#i y is he la* mer%ha" *hi%h e"&or%es he la* o& Co")ress ha he #"*ri e" 7La*7 o& he IRS e %. 6e&ore Erie R.R., he la* mer%ha" *as !ar o& he Commo" La* *hi%h )ave $#ry rials #"'er he 4 h Ame"'me" . Thro*i") he la* mer%ha" o# *i h he %ommo" la* )ave he basis &or he

s#mmary $#')me" i" EB#i y. The IRS e"&or%es he S a # e a"' yo# have relie& o"ly i" eB#i y *hi%h is, he la* mer%ha" 'esi)"e' o m#r'er yo#. A 'ollar is "o a Chose,i",A% io". La* is "o EB#i y D#e Pro%ess o& La* is "o %om!#lsory %o"&essio" a"' avoi'a"%e be&ore he Cha"%ellor. A mo"ey %o"si'era io" m#s be a 'e rime" o he !romise. The o"ly %o#r s i" he =.S. *hi%h have $#ris'i% io" i" he Civil La* are i" Lo#isia"a. No s a # e is i" 'ero)a io" o& %ommo" la* #"less i s!e%i&i%ally so s a es. All %o#r s o& he s a!le o!era e #"'er %olor o& lo%al la*. No s a e i" he #"io", i"%l#'i") Lo#isia"a %a" %om!el i s %i i?e"s o be mer%ha" s i" eB#i y by 'e!rivi") hem o& la*&#l e"'er a"' %om!elli") he #se o& "e)o iable i"s r#me" s. A Fe'eral Reserve No e is a "e)o iable i"s r#me" , "e)o iable by 'elivery. A..e"#*1 IV SUPREME COURT DECISIONS 7The 2@ h Ame"'me" ,7 say ma"y !ro es ers, 7is *ro") be%a#se %om!lia"%e *i h i viola es my ; h a"' 5 h Ame"'me" ri)h s, a"' i viola es he Ar i%le I, Se% io" 3 !rovisio" *hi%h %omma"'s Co")ress ha 7No %a!i a io", or o her 'ire% a( shall be lai', #"less i" !ro!or io" o he %e"s#s or e"#mera io" herei"be&ore 'ire% e' o be a0e".7 Why he" has"A he iss#e bee" bro#)h be&ore he S#!reme Co#r o resolve i 1 I has. The S#!reme Co#r &ollo*s a !oli%y o& #!hol'i") *ha %a" be i" er!re e' i" more ha" o"e *ay, a"' i& o"e o& hose *ays %a" be 7%orre% ly i" er!re e'7 as bei") Co"s i # io"al, he" he %o#r s *ill "ormally say ha he la* *ill s a"' as 7%orre% ly i" er!re e'.7 No*, ho* %a" he 2@ h Ame"'me" be 7%orre% ly i" er!re e',7 a"' "o viola e he above %i e' se% io"s o& he =.S. Co"s i # io"1 Eery sim!ly. Whe" i is a a( o" a 7!rivile)e7 ra her ha" o" a !erso". Wha 0i"' o& !rivile)e1 The !rivile)e o& 'oi") b#si"ess as a %or!ora io", or as a li%e"se' !erso" 7!rivile)e'7 o ear" a" i"%ome i" a *ay "o o!e" o a"yo"e else *ho 'oes "o have ha )over"me" %rea e' 7!rivile)e.7 I" re #r" &or he 7!rivile)e,7 he !rivile)e' !erso" !ays a &ee. Ho* m#%h is he &ee1 Tha 'e!e"'s o" ho* !ro&i able he !rivile)e is. For e(am!le, ho* m#%h i"%ome *as )ai"e' &rom he 7!rivile)e.7 I is really a" e(%ise a(, b# be%a#se he amo#" o& he a( is base' o" he amo#" o& he i"%ome, i is %alle' a" 7i"%ome a(.7 ="'er his vie*!oi" , #"li%e"se' !erso"s s#%h as &armers, )ar'e"ers, laborers, %ler0s, %ar!e" ers, se%re aries, *ai resses, e %., *o#l' "o be reB#ire' o &ile or !ay be%a#se heir i"%ome *as "o ear"e' i" a A!rivile)e'A %a!a%i y.

Obvio#sly hose !erso"s *ho have ri)h s )#ara" ee' #"'er he ; h a"' 5 h Ame"'me" s are "o reB#ire' o &ile a" i"%ome a( re #r". The ; h Ame"'me" )#ara" ees every %i i?e" he ri)h o he !riva%y o& his !a!ers a"' e&&e% s, *hile he 5 h Ame"'me" )#ara" ees every %i i?e" he ri)h "o o !rese" evi'e"%e a)ai"s himsel&. Fili") a a( re #r" &or&ei s bo h o& hese ri)h s. 6# are "o all 7!erso"s7 !ro e% e' by he ; h a"' 5 h Ame"'me" ri)h s1 NoN Cor!ora io"s, *hi%h are le)ally 7!erso"s7 are "o so !ro e% e' as e(!lai"e' by he S#!reme Co#r o& he ="i e' S a es i" he %ase o& Hale v. He"0el, :>2 =.S. ;8. The Co#r s sai'J "There is a clear distinction in this particular between an individual and a corporation, and that the latter has not the to refuse to submit its boo4s and papers for an examination at the suit of the !tate. The individual may stand upon his constitutional rights as a citi:en. 5e"s entitled to carry on his private business in his own way. 5is power to contract is unlimited. 5e owes no duty to the !tate or to his neighbors to divulge his business, or to open his doors to an investigation, so far as it may tend to incriminate him. 5e owes no such duty to the !tate, since he receives nothing therefrom, beyond the protection of his life and property. 5is rights are such as existed by the law of the land long antecedent to the organi:ation of the !tate, and can only be ta4en from him by due process of law, and in accordance with the Constitution. 3mong his rights are a refusal to incriminate himself, and the immunity of himself and his property from arrest or sei:ure except under a warrant of the law. 5e owes nothing to the public so long as he does not trespass upon their rights. " pon the other hand, the corporation is a creature of the !tate. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the !tate and the limitations of its charter. "Its powers are limited by law. It can ma4e no contract not authori:ed by its Charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation. There is a reserved right in the legislature to investigate its contracts and find out whether it has exceeded its powers. It would be a strange anomaly to hold that a !tate, having chartered a corporation to ma4e use of certain franchises could not, in the exercise of its sovereignty, in)uire how these franchises had been employed, and whether they had been abused and demand the production of the corporate boo4s and papers for that purpose. "Dhile an individual may lawfully refuse to answer incriminating )uestions unless protected by an immunity statute, it does not follow that a corporation, vested with special privileges and franchises, may refuse to show its hand when charged with an abuse of such privileges." #!ee also Dilson v. .!., ;;-- .!. .8-(

A"o her %ase i" !oi" is Fli" v. S o"e Tra%y Co., ::> =.S. 2>4. I" ha %ase he ="i e' S a es S#!reme Co#r r#le' ha he Cor!ora io" Ta( A% !asse' by Co")ress i" 23>3 *as "o #"%o"s i # io"al si"%e he a( o" he i"%ome o& %or!ora io"s *as a" e(%ise. The Co#r sai'J "*xcises are taxes laid . . . upon licenses to pursue certain occupations, and upon corporate privileges. #Cooley, Const. +im., 7th *d., 8B9( "The Tax under consideration, as we have construed the statute, may be described as an excise upon the particular privilege of doing business in a corporate capacity . . . the re)uirement to pay such taxes involves the exercise of privileges. "Dhen the Constitution was framed the right to lay excise taxes was broadly conferred upon the Congress. 3t that time very few corporations existed. If the mere fact of state incorporation, extending now to nearly all branches of trade and industry, could withdraw the legitimate objects of federal taxation from the exercise of the power conferred, the result would be to exclude the national government from any objects upon which indirect taxes could be constitutionally imposed. "The thing taxed is not the mere dealing in merchandise, in which the actual transactions may be the same, whether conducted by individuals or corporations, but the tax is laid upon the privileges which exist in conducting business with the advantages which inhere the corporate capacity of those taxed.. . . It is this distinctive privilege which is the subject of taxation, not the mere buying or selling or handling of goods which may be the same, whether done by corporations or individuals. "Congress may have deemed the public inspection of such returns a means of more properly securing the fullness and accuracy thereof. In many of the states, laws are to be found ma4ing tax returns public documents, and open to inspection. "De cannot say that this feature of the law does violence to the constitutional protection of the $ourth 3mendment and this is e)ually true of the $ifth 3mendment, protecting persons against compulsory self-incriminating testimony . . ." No* i be%omes %lear ha he !rivile)e %rea e' by he S a e &or %er ai" i"'ivi'#als o 'o b#si"ess i" a %or!ora e &orm is a !rivile)e &or *hi%h hey m#s "o o"ly s#rre"'er %er ai" ; h a"' 5 h Ame"'me" ri)h s, b# m#s also !ay &or o# o& he be"e&i s or i"%ome re%eive' *hi%h o her*ise *o#l' "o have bee" re%eive' e(%e! &or he S a e %rea e' !rivile)e. I li0e*ise be%omes %lear as o *ha is mea" by 7ma0e a re #r".7 The %or!ora io" 7ma0es a re #r"7 o !ay a a( &or he !rivile)e e( e"'e' o i o 'o b#si"ess i" a %or!ora e %a!a%i y. This %o#l' also be %alle' a 0i%0,ba%0. I *o#l' obvio#sly i"%l#'e a re!or , #"'er oa h, o& ho* m#%h

*as ear"e'. Si"%e he S a e ha' %rea e' he %or!ora io" i obvio#sly has he ri)h o 'ema"' a !er%e" a)e o& i s i"%ome. So oo may Co")ress. In the case of ,organ v. Commissioner, .90 .!. 7B, The !upreme Court said1 "!tate +aw creates legal interests and rights. The $ederal ?evenue 3cts designate what interests or rights so created, shall be taxed." "*xcise taxes must be collected from the same activities, as. are also reached by the !tates in order to support their local governments." $lint v. !tone Tracy Co., supra. Si"%e Co")ress %a" a( o"ly he same S a e %rea e' ri)h s or !rivile)es *hi%h he S a e i sel& may a(, ha" i &ollo*s ha *here he S a e is !rohibi e' &rom a(i") %o"s i # io"ally !ro e% e' ri)h s, so oo is Co")ress. The S#!reme Co#r sai' i" he %ase o& M#r'o%0 v. Pe""svlva"ia, 83 =.S. 2>5J "3 state may not impose a charge for the enjoyment of a right granted by the $ederal Constitution." #!ee also .!. v. !tate of Texas, ;<; $.!upp. ;./, affirmed2 .B/ .!. -<<.( O& i" eres also is he r#li") o& he S#!reme Co#r o& he S a e o& Ar0a"sas i" he %ase o& Sims v. Ahre"s, :42 S.W. 4:>J "3n income tax is neither a property tax, or a tax on occupations of common right, but is an excise tax. . . . +egislature may declare as privilege and tax as such for state revenue those pursuits and occupations that are not matters of common right,- but has no power to declare as a privilege and tax for revenue purposes occupations that are of common right." I m#s be #"'ers oo' ha he erms e(%ise a(, !rivile)e a(, a"' i"'ire% a( are sy"o"ymo#s a"' are #se' i" er%ha")eably i" some o& he %o#r As r#li")s. These erms, as *e shall see, are %o" rary o he erm 'ire% a(. No*, le #s e(ami"e he o her S#!reme Co#r As r#li")s a&&e% i") he %o"s i # io"ali y o& o her so, %alle' 7i"%ome a(7 la*s !asse' by Co")ress bo h be&ore he 2@ h Ame"'me" , a"' as o he %o"s i # io"ali y o& ha ame"'me" i sel&. l A erm a!!lie' o ri)h s, !rivile)es, a"' imm#"i ies a!!er ai"i") o a"' e"$oye' by all %i i?e"s eB#ally a"' i" %o"("o", a"' *hi%h have heir &o#"'a io" i" he %ommo" la*. Co. I"s . 2;:a< S!ri") Ealley Wa er*or0s v. S%ho ler. @: Cal. 2>@. 6la%0As Le)al Di% io"ary, Revise' Fo#r h E'i io". I" Or'er o !rovi'e some &o#"'a io" &or o#r #"'ers a"'i"), *e %a" e(ami"e he Li%e"se Ta( Cases, 5 Wall. ;@:, *here he ="i e' S a es S#!reme Co#r sai'J

"The power and right of the !tates to tax, control, or regulate any business carried on within its limits, is entirely consistent with an intention on the part of Congress to tax such business for %ational purposes." I is eleme" ary, o& %o#rse, ha he !o*er o li%e"se, he !ermi i") o& 'oi") ha *hi%h he li%e"see has "o &#"'ame" al ri)h !ro e% e' by he Co"s i # io" o 'o, is he !o*er o a(, a"', as Chie& C#s i%e Coh" Marshall sai' i" M%C#llo%h v. Maryla"', ; Whea 82@, 7The !o*er o a( i"volves he !o*er o 'es roy.7 Tha is, he ri)h o )ive a"' he ri)h o a0e a*ay. Obvio#sly, a ri)h or !rivile)e %rea e' by he S a e %a" be 'es roye' by he S a e. There is,.o& %o#rse, a" im!or a" 'i&&ere"%e be *ee" S a e %rea e' ri)h s or !rivile)es a"' i"alie"able, %ommo", or &#"'ame" al ri)h s *hi%h are )#ara" ee' !ro e% io" #"'er he Co"s i # io", o"e o& *hi%h is he ri)h o %o" ra% . The S#!reme Co#r sai' i" F"o*l o" v. Moore, 249 =.S. ;2J 7The !o*er o 'es roy *hi%h may be he %o"seB#e"%e o& a(a io" is a reaso" *hy he ri)h o a( sho#l' be %o"&i"e' o s#b$e% s *hi%h may be la*&#lly embra%e' herei", eve" al ho#)h i ha!!e"s ha i" some !ar i%#lar i"s a"%e "o )rea harm may be %a#se' by he e(er%ise o& he a(i") a# hori y as o a s#b$e% *hi%h is beyo"' i s s%o!e.7 I" he %ases o& Loa" Asso%ia io" v. To!e0a, :> Wall. @55, Par0ersb#r) v. 6ro*", 2>@ =.S. ;94, he S#!reme Co#r sai'J "There is no such thing in the theory of our national government as unlimited power of taxation in Congress. There are limitations of its powers arising out of the essential nature of all free governments2 there are reservations of individual rights, without which society could not exist, and which are respected by every government. The right of taxation is subject to these limitations." #!ee also >olloc4 v. $armers +oan F Trust Co., -<7 .!. /;0.( No* he", he &irs so,%alle' 7i"%ome a(7 %ase be&ore he ="i e' S a es S#!reme Co#r a!!ears o be S!ri")er v. ="i e' S a es, 2>: =.S. 59@. The hi") ha 'is i")#ishe' S!ri")er *as ha he *as a" a or"ey,a ,la*, &or *hi%h he has o be li%e"se' by he s a e o !ra% i%e la*. The %o#r hel' ha he a( *as a" e(%ise a"', here&ore, "o #"%o"s i # io"al as o his i"%ome. This i"volve' he i"%ome a( im!ose' by Co")ress '#ri") he Civil War, *hi%h *as s#bseB#e" ly re!eale'. La er o", a"o her 7i"%ome a(7 %ase %ame be&ore he ="i e' S a es S#!reme Co#r *hi%h *as Pollo%0 v. Farmers Loa" a"' Tr#s Co., 254 =.S. ;:3, reheari") 259 =.S. @>2. This i"volve' he a( im!ose' by Co")ress i" 293; *hi%h he Co#r 'e%lare' #"%o"s i # io"al be%a#se i 'i' "o 'is i")#ish be *ee" he i"%ome ha !erso"s ear"e' !#rs#a" o heir %o"s i # io"ally !ro e% e' ri)h s a"' he i"%ome o& hose *ho ear"e' i #"'er a s!e%ial ri)h or !rivile)e %rea e' by he S a e. I" hol'i") i #"%o"s i # io"al he Co#r sai'J

"The name of the tax is unimportant. "It is the substance and not the form which controls, as has indeed been established by repeated decisions of this court." Sim#l a"eo#s *i h he Cor!ora io" Ta( A% o& 23>3 *hi%h *as 'is%#sse' i" Fli" v. S o"e Tra%y Co., s#!ra, Co")ress also a!!rove' a !ro!osal o ame"' he Co"s i # io" o& he ="i e' S a es *i h he 2@ h Ame"'me" . I *as sai', as re!or e' i" he Co")ressio"al Re%or' &or 23>3, ha here *as some %o"%er" ha he S#!reme Co#r mi)h 'e%lare he Cor!ora io" Ta( #"%o"s i # io"al a"' here&ore i *as ho#)h ha he Co"s i # io" sho#l' be ame"'e' o !reve" his. Obvio#sly, s#%h &ear *ase ei her base' o" i)"ora"%e or *ere a em! s o %o"&#se he !#bli%, mos o& *hom have "ever rea' a"y o& he !er i"e" S#!reme Co#r r#li")s. The la")#a)e he" !ro!ose' is he same as i rea's o'ayJ "The Congress shall have the power to lay and collect taxes on income, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration," -8th 3mendment. As *ill be sho*" la er, his Ame"'me" 'oes "o )ive Co")ress a"y "e* a(i") !o*er, i 'oes "o s#b$e% a"y i"%ome o a(a io" *hi%h *as "o also s#b$e% o a(a io" !rior o he Ame"'me" , a"' i %er ai"ly 'oes "o re"'er as "o* #seless or obsole e a"y !rior r#li")s o& he ="i e' S a es S#!reme Co#r . O& %o#rse, i oo0 lo")er &or he S a es o ra i&y his Ame"'me" ha" i oo0 &or Co")ress o !ass a"' !# i" o o!era io" he Cor!ora io" Ta( A% a"' &or more ha" 5> 'i&&ere" %or!ora io"s o %om!lai" a"' a0e he ma er o he S#!reme Co#r , *hi%h *ere all %o"soli'a e' i" Fli" v. S o"e Tra%y Co., s#!ra. A he ime o& he Co#r As r#li") i" Fli" , *hi%h *as o he e&&e% ha he 2@ h Ame"'me" *as #""e%essary, :5 s a es ha' ra i&ie' i . A& er he 2@ h Ame"'me" *as ra i&ie', Co")ress !asse' he I"%ome Ta( A% o& 2328, a"' s#bseB#e" ly i" he %ases o& 6r#shaber v. ="io" Pa%i&i% Railroa' Co., :;> =.S. 2, a"' S a" o" v. 6al i% Mi"i") Co., :;> =.S. 2>8, he ="i e' S a es S#!reme Co#r *as as0e' i& he 2@ h Ame"'me" *as %o"s i # io"al. I *as %om!lai"e' ha 7 he Si( ee" h Ame"'me" !rovi'es &or a hi her o #"0"o*" !o*er o& a(a io", ha is a !o*er o levy a" i"%ome a( *hi%h al ho#)h 'ire% sho#l' "o be s#b$e% o he re)#la io" o& a!!or io"me" a!!li%able o all o her 'ire% a(es.7 I *as also %o" e"'e' ha 7 he !o*er %o"&erre' by he Ame"'me" is "e*.7 The S#!reme Co#r sai' ha his *as a" 7erro"eo#s ass#m! io".7 I" 6r#shaber v. ="io" Pa%i&i% Railroa' Co., s#!ra., he Co#r sai'J "De come then to ascertain the merits of the many contentions made in the light of the Constitution as it now stands, that is to say, including within its terms the provisions of the !ixteenth 3mendment as correctly interpreted." The Courts went on to say1

"+et us by a demonstration of the error of the fundamental proposition as to the significance of the 3mendment dispel the confusion necessarily arising from the arguments deduced from it. "It clearly results that the proposition and contentions under it, if acceded to, would cause one provision of the Constitution to destroy another. . . . This result instead of simplifying the situation and ma4ing clear the limitations on the taxing power, which obviously the 3mendment must have been intended to accomplish, would create radical and destructive changes in our constitution and multiply confusion. "The contention that the 3mendment treats a tax on income as a direct tax . . . is also wholly without foundation. . . . The 3mendment contains nothing repudiating or challenging the ruling in the >ollac4 Case." I" o her *or's, he 2@ h Ame"'me" 'oes "o )ive Co")ress a"y "e* or a''i io"al a(i") !o*er, a"' i 'oes "o overr#le or %ha")e a"y o& he S#!reme Co#r As !revio#s r#li")s o" 7i"%ome a(es.7 Wha he 2@ h Ame"'me" is s#!!ose' o 'o is o res ri% a"y %o"si'era io" o& a so,%alle' 7i"%ome a(7 as bei") "o hi") more ha" a" e(%ise a(, or !rivile)e a(, base' o" or meas#re' by i"%ome. I *o#l', o& %o#rse, have bee" %learer i& he *or's e(%ise *ere i"ser e' i" he Ame"'me" $#s be&ore he *or' 7 a(es.7 For e(am!leJ 7The Co")ress shall have !o*er o lay a"' %olle% .e(%ise/ a(es o" i"%omes . . .7 I& Co")ress %rea e' he 7!rivile)e,7 i has he ri)h o a( he be"e&i s .i"%ome/ ob ai"e' &rom ha !rivile)eJ "The terms duties, imposts and excises are generally treated as embracing the indirect forms of taxation contemplated by the Constitution. "Dithin the category of indirect taxation . . . is embraced a tax upon business done in a corporate capacity. . . . The tax is not payable unless there is a carrying on or doing business in the designated capacity, and this is made occasion for the tax, measured by the standard prescribed. "The tax . . . may be described as an excise upon the particular privilege of doing business in a corporate capacity, i.e., with the advantages which arise from corporate or )uasi-corporate organi:ation2 or when applied to insurance companies, for doing the business of such companies . . . the re)uirement to pay such taxes involves the exercise of privilege. "The tax is laid upon the privileges which exist in conducting business with the advantages which inhere in the corporate capacity of those taxes2 and which are not enjoyed by private firms or individuals. These advantages are obvious, and

have led to the formation of such companies in nearly all branches of trade. The continuity of the business2 without interruption by death or dissolution2 the transfer of property interest by the disposition of shares of stoc42 the advantages of business controlled and managed by corporate directors2 the general absence of individual liability2 these and other things inhere in the advantages of business thus conducted, which do not exist when the same business is conducted by private individuals and partnerships. It is this distinctive privilege which is the subject of taxation.. . "Dhere a tax is lawfully imposed upon the exercise of privilege within the taxing powers of the !tate or %ation, the measure of such a tax may be the income from the property of the corporation. "Dhen the sovereign authority has exercised the right to tax a legitimate subject of taxation as an exercise of a franchise or privilege, it is no objection that the measure of the taxation is found in the income. . . . The measure of taxation being the income of the corporation from all sources . . . it is but the measure of a privilege tax within the lawful authority of Congress to impose." The .!. !upreme Court in $lint v. !tone Tracy Co., supra.

Plai" i&& !ro se File' C#ly 2@ 234@ =.S. Dis ri% Co#r N.D. o& N.-. C. R S%#lly. Cler0 William L. Avery P.O. 6o( 93@ Fra"0li", N- 28445 =NITED STATES DISTRICT CO=RT NORTHERN DISTRICT OF NEW -ORF WILLIAM L. AEERPlai" i&&, E. THE CO=NT- OF DELAWARE, RICHARD H. FARLE-, HAROLD D. OWENS CR, a"' THE NATIONAL 6ANF OF DELAWARE CO=NTWALTON, De&e"'a" s COMPLAINT FOR MONE- DAMA+ES FOR DEPRIEATION OF CIEIL RI+HTS C=R-TRIAL DEMANDED

The #"'ersi)"e', WILLIAM L. AEER-, Plai" i&& i" he a% io", a!!ears !ro se a"' %om!lai"s a)ai"s he De&e"'a" s above "ame' &or 'e!riva io" o& liber y a"' !ro!er y *i ho# '#e !ro%ess o& la* a"' &or 'e"ial o& eB#al !ro e% io" o& he la*s a"' o her o&&e"ses a)ai"s Plai" i&& as &ollo*sJ JURISDICTION This a% io" arises, a"' his Dis ri% Co#r has $#ris'i% io" #"'er Se% io" 2398 o& Ti le ;: =.S. Co'e, a"' o& Se% io"s, 2882, a"' 28;8 o& Ti le :9 =.S. Co'e, #"'er Ar i%le OIE o& Ame"'me" s o he Co"s i # io" o& he ="i e' S a es, a"' o her la* o& he ="i e' S a es, i"%l#'i") Ar i%le 2, Se% io" 9, %la#se 8, a"' Ar i%le 2, Se% io" 9, %la#se 2>, a"' Ar i%le 2, Se% io" 2>, %la#se 2 o& he Co"s i # io" o& he ="i e' S a es. The ma er i" %o" roversy, e(%l#sive o& %os s, e(%ee's 2>,>>> .Te" Tho#sa"'/ Dollars La*&#l S a"'ar' Mo"ey o& he ="i e' S a es o& Ameri%a a !ar by, #"'er, a"' #!o" he Coi"a)e A% s o& A!ril :, 243:, a"' Febr#ary :9, 2949, a"' he I" er"a io"al Mo"e ary A% s o& C#ly 82, 23;;. PARTIES TO THE ACTION Plai" i&& is a %i i?e" o& he ="i e' S a es o& Ameri%a a"' o& he S a e o& Ne* -or0, a resi'e" o& his Nor her" Dis ri% , a &ormer s%hool, ea%her a"' ra"sla or, a"' a( e'i or a"' *ri er. De&e"'a" THE CO=NT- OF DELAWARE is a !#bli% a'mi"is ra ive !erso" %rea e' by a% o& he Peo!le o& he S a e o& Ne* -or0 i" Le)isla #re, Mar%h 2>, 2434, a"' s a"'i") i" a rela io"shi! o& !#bli% %re'i or a"' 'eb or o Plai" i&&, a"' is a" o&&i%ial symboli% &i"a"%ial, !e%#"iary, a"' &is%al %oa'$# or o De&e"'a" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON, a Na io"al 6a"0i") Asso%ia io", bo h o!era i") *i h a"' hro#)h De&e"'a" RICHARD H. FARLE- a"' De&e"'a" HAROLD D. OWENS, CR., #!o" heir !#bli% &ra"%hises hol'e" o& he Peo!le o& he S a e o& Ne* -or0. De&e"'a" RICHARD H. FARLE- is Co#" y C#')e o& he De&e"'a" THE CO=NT- OF DELAWARE< a"' is a !#bli% &ra"%hise' !erso", a"' a resi'e" o& a"' 'omi%ile' i" his Nor her" Dis ri% . De&e"'a" HAROLD D. OWENS, CR., is Co#" y Cler0 o& he De&e"'a" THE CO=NT- OF DELAWARE, a"' is a !#bli% &ra"%hise' !erso", a"' a resi'e" o& a"' 'omi%ile' i" his Nor her" Dis ri% . De&e"'a" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON is a Na io"al 6a"0i") Asso%ia io", Char er N#mber ;;35, hol'e" o& he Peo!le o& he ="i e' S a es o& Ameri%a, is a !#bli% &ra"%hise' %or!ora io", by le)al &i% io" a %i i?e" o& he S a e o& Ne* -or0, 'omi%ile' i" his Nor her" Dis ri% a"' i" Na io"al 6a"0 Re)io" "#mber :, a"' as s#%h !erso" a" o&&i%ial a)e" a"' symbio i% &i"a"%ial, !e%#"iary, a"' &is%al %oa'$# or o& he De&e"'a" THE CO=NT- OF DELAWARE, a"' o& he S a e o& Ne* -or0, a"' 'eb or a"' %re'i or here o a"' o Plai" i&&.

All !ar ies o he a% io" *ere a all imes releva" o he eve" s a"' i"%i'e" s herei" 'es%ribe' resi'e" s o& a"' 'omi%ile' i" his Nor her"A Dis ri% . CAUSE OF ACTION This a% io" arises i" %er ai" a% s o& he De&e"'a" RICHARD H. FARLE- a e"'a" #!o" a" a% io" &or &ore%los#re o" a" eB#i able hir',!ar !#r%hase mo"ey,mor )a)e bro#)h i" he Co#" y Co#r o& he De&e"'a" THE CO=NT- OF DELAWARE a)ai"s Plai" i&& a"' o hers by he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NTWALTON, *hi%h !ro%ee'i")s *ere a'mi"is ere' by he same De&e"'a" RICHARD H. FARLE- as Co#" y C#')e #!o" a s#mmary $#')me" #"'er %olor o& %#s om o& mer%ha" s ha he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON, a $#ris i% !erso", is imm#"e &rom he %ommo" la* o *hi%h Plai" i&& is s#b$e% , a"' e"$oys he !ro e% io" o& a !riva e i"'ivi'#al #"'er he la* mer%ha" o he 'is%rimi"a io" a)ai"s Plai" i&&. Plai" i&& alle)es ha he several De&e"'a" s, a% i") i" %oll#sio" *i h De&e"'a" RICHARD H. FARLE-, 'i' #"$#s ly a"' #"la*&#lly 'e!rive Plai" i&& o& his la*&#l !ro!er y a"' liber y *i ho# '#e !ro%ess o& la*, a"' 'i' 'e"y Plai" i&& he eB#al !ro e% io" o& he la*s )ra" e' o he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NTWALTON, i" he seB#e"%e o& !ar i%#lars e"#mera e' belo*, all s#%h a% s %om!risi") a si")le %a#se o& a% io" *herei" he De&e"'a" RICHARD H. FARLE- #s#r!e' he $#ris'i% io" o& he S#!reme Co#r i" eB#i y i" or'er o 'is%rimi"a e a)ai"s Plai" i&& i" &avor o& De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON #"'er %olor o& he %#s om o& mer%ha" s, ha is o sayJ 2. Tha he De&e"'a" RICHARD H. FARLE-, a% i") o# si'e he $#ris'i% io" )ra" e' him i" he Co#" y Co#r by Se% io" 23>, C#'i%iary La* o& he S a e o& Ne* -or0, a"' o her la*, 'i' *ill&#lly, #"'er %olor o& mer%a" ile !ra% ise, habi , a"' %o"ve"ie"%e i" a"' o& he De&e"'a" THE CO=NT- OF DELAWARE, 'e"y Plai" i&& a"y a"' all a%%ess o he '#e !ro%ess o& he Co#r a"' a"y a"' all o!!or #"i y o 'e&e"' he a% io" o& &ore%los#re, #!o" he %laim ha , #"'er he sai' !ra% ise a"' %#s om o& mer%ha" s i" a"' o& he sai' De&e"'a" THE CO=NT- OF DELAWARE, here e(is e' "o le)al or eB#i able 'e&e"se o he sai' &ore%los#re available o he be"e&i s o& Plai" i&& #"'er he Co"s i # io", La*s, a"' Trea ies o& he ="i e' S a es o& Ameri%a, a"' 'i' so or'er $#')me" e" ere'. :. Tha he De&e"'a" RICHARD H. FARLE- 'i', i" o!e" Co#r , re&#se o a%%e! &rom he ha"' o& Plai" i&& i" o he %#s o'y o& he Co#r , a 'e!osi a%%o#" !assboo0 o& he Plai" i&& *i h he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NTWALTON re%or'i") he &#ll !ayme" i" o he ha"'s o& he sai' De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON by Plai" i&& o& all mor )a)e i"s alme" s alle)e'ly i" 'e&a#l *he" he sai' De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON re&#se' o a%%e! he sai' !ayme" s as !ayme" s o" he mor )a)e i" B#es io", i" or'er o %om!el e( ra% io" o& Plai" i&& o& !ayme" o& #"rela e' mo"ey, #!o" i s o*" a'missio" o he %o#r .

8. Tha he !#r!ose o& he a% s o& he De&e"'a" RICHARD H. FARLE- as C#')e o& Co#r i" he &ore%los#re a% io" *as o %om!el Plai" i&& as a" e(am!le o o hers, *i ho# a"y !#bli% rial o& he iss#es a'va"%e' by Plai" i&&, o reimb#rse De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON &or a(es %laime' !ai' vol#" arily by %he%0 by he sai' De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON o" hree o%%asio"s alle)e'ly o" behal& o& Plai" i&& o De&e"'a" THE CO=NT- OF DELAWARE hro#)h i s Treas#rer, a"' *hi%h *ere re%eive' by he sai' De&e"'a" THE CO=NT- OF DELAWARE &or hree s#%%essive years i" 'ero)a io" o& he i"$#"% io" a"' reB#ireme" o& Ar i%le I, Se% io" 2>, %la#se 2, o& he Co"s i # io" o& he ="i e' S a es o& Ameri%a a"' o her la* re)ar'i") la*&#l e"'er, so &#r her o i"'eb Plai" i&& arbi rarily o" 'ema"' 'e!osi s o he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE WALTON &or "o r#e a"' la*&#l %o"si'era io". ;. Tha Plai" i&& !#bli%ly a"' o o&&i%ers o& he De&e"'a" THE CO=NT- OF DELAWARE !ro es e' he #"la*&#l"ess a"' le)al i"s#&&i%ie"%y o& he sai' !ayme" s, "or ha hey %o#l' la*&#lly or $#s ly bi"' Plai" i&&. 5. Tha he sai' De&e"'a" RICHARD H. FARLE- 'i' 'elibera ely, mali%io#sly, *a" o"ly, re%0lessly, a"' arbi rarily, a"' *i h every !re$#'i%ial i" e" o& 'e&ra#'i") Plai" i&& o& his s#bs a"%e a"' ri)h s #"'er he Co"s i # io" o& he ="i e' S a es o& Ameri%a a"' o& i s la*s a"' rea ies o '#e !ro%ess, 'e&ra#'i") him o& his ri)h o eB#al !ro e% io" o& he la*s, a"' o& his ri)h o 'e&e"' his liber y a"' !ro!er y by !lea'i") as he sa* &i be&ore a $#ry #!o" he iss#es a)ai"s he alle)a io"s ma'e, 'i' em!loy he arbi rary 'evi%e o& s#mmary $#')me" o# si'e his la*&#l $#ris'i% io" o he e&&e% ha 'ema"' 'e!osi s %rea e' by Na io"al 6a"0i") Asso%ia io"s are or %a" be La*&#l S a"'ar' Mo"ey o& he ="i e' S a es, a"' so h#s o 'elibera ely 'e!rive Plai" i&& o& his 'e&e"se o& &ra#' o" he !ar o& De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE WALTON, all #"'er %olor o& he %#s om o& mer%ha" s hro#)h he o&&i%es o& he De&e"'a" THE CO=NT- OF DELAWARE. @. Tha #!o" ea%h a"' every o%%asio" o& s!e%ial a!!eara"%e be&ore he Co#r o 'e&e"' he a% io", Plai" i&& 'e"ie' he $#ris'i% io" o& he Co#r o ma0e or )ive s#%h a 'e%isio" or $#')me" or o &#r her he same. 4. The De&e"'a" RICHARD H. FARLE-, #!o" his De%isio" a"' C#')me" i" he a% io", 'i' s ri0e &rom he re%or' he A"s*er serve' a"' &ile' by Plai" i&& 'e"yi") he Co#r As $#ris'i% io" o a&&or' a"y relie& *ha ever o he sai' De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON or o &i"' a"y ri)h o& he same De&e"'a" Na io"al Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NTWALTON o re%over i" a"y *ay &rom Plai" i&&. 9. The De&e"'a" RICHARD H. FARLE- 'i' re!ea e'ly re&#se a"' 'e"y Plai" i&& a"y a"' all a%%ess o he '#e !ro%ess o& he Co#r #"less Plai" i&& a%B#ies%e' as a" i"'i)e" !erso" o be re!rese" e' by %o#"sel member o& he Dela*are Co#" y 6ar Asso%ia io" o& some o her s#%h asso%ia io", a"' o bar)ai" h#s i" eB#i ies #!o" his o*" la*&#l !ro!er y. 3. Tha De&e"'a" RICHARD H. FARLE- i" his De%isio", #"'er %olor o& !ra% ise o& his o*" Co#r , 'i' rea%h o# si'e his !ro!er $#ris'i% io" i" he ma er a ha"' o a0e irreleva" a"'

!re$#'i%ial "o i%e o& &ormer mi"# es o& Family Co#r !resi'e' over by himsel& i" he e(er%ise o& he &ra"%hise hereo& as a &#r her !re e( &or mali%io#sly a"' arbi rarily 'e"yi") Plai" i&& a"y 'e&e"se a)ai"s he &ore%los#re o& he mor )a)e a)ai"s Plai" i&&, all #"'er %olor o& %#s om ha here is "o 'e&e"se o he a% io" allo*able, a"' #"'er %olor o& he %#s om ha he re%or's o& De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NTWALTON are s#&&i%ie" !rima &a%ie evi'e"%e o& hemselves o 'e"y Plai" i&& a"y relie& o& ri)h o 'e&e"' himsel& a"' his !ro!er y a la* b# by bar)ai"i") i" !leas i" a'mi"is ra ive eB#i y #"'er %olor o& %#s om. 2>. Tha he De&e"'a" HAROLD D. OWENS, CR., 'i', #"'er %olor o& he *or'i") o& CPLR :8>:, a"' o"ly a& er %o"s#l a io" *i h he De&e"'a" RICHARD H. FARLE-, re&#se o iss#e o Plai" i&& a $#'i%ial s#b!oe"a a"' also o s#b!oe"a '#%es e%#m i" or'er o %om!el a Co#r he a e"'a"%e a"' also he es imo"y o& Presi'e" o& sai' De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON o" he s#b$e% o& he %rea io" o& eB#i able hir',!ar y !#r%hase,mo"ey mor )a)es, a"' o !ro'#%e a"' )ive es imo"y i" his o*" !erso" a"' "o o her #!o" a %er ai" i"s r#me" , a 'ee' !oll o& )ra" , e" i le' +ra" , %om!elle' #!o" Plai" i&& by De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON #"'er '#ress by he sai' De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON a he ime o& ma0i") sai' eB#i able mor )a)e. 22. Tha , i" im!leme" a io" o& all he &ore)oi"), he De&e"'a" RICHARD H. FARLE-, i" a'$o#r"e' heari") o" iss#a"%e o& a Wri o& Assis a"%e a)ai"s Plai" i&&, 'i' )ive a 'e%lara ory $#')me" , e&&e% ively le)isla i") #"'er %olor o& he la* mer%ha" a 'e%isio" ha a %he%0 is a le)al e"'er a"' ha 'ema"' 'e!osi s %rea e' o" he s!o by a Na io"al 6a"0i") Asso%ia io" are La*&#l S a"'ar' Mo"ey o& he ="i e' S a es o& Ameri%a or %a" %om!rise la*&#l reserves o& a Na io"al 6a"0i") Asso%ia io" #"'er he Fe'eral 6a"0i") La*s. 2:. Tha he De&e"'a" RICHARD H. FARLE- &#r her e(%ee'e' his $#ris'i% io" i" he Co#" y Co#r by r#li") ha Plai" i&&s re&#sal vol#" arily o B#i a"' s#rre"'er la*&#l !ossessio" o& his allo'ial &reehol' a& er a Co#r ,or'ere' $#'i%ial sale #!o" he )ro#"'s o& some e hi%al %om!#lsio" o& he %#s om o& mer%ha" s is reaso" o 'e!rive Plai" i&& o& his %ivil ri)h o '#e !ro%ess o& la* i" 'e&e"se o& his !ro!er y be&ore a $#ry o& his !eers !er !ais #!o" he $#s iss#es o& la*&#l %oi", %#rre"%y, a"' e"'er, a"' #!o" iss#es o& !rima &a%ie &ra#' #!o" s!e%ial ies "ee'i") "o !arol evi'e"%e o re&# e a"' #!o" iss#es o& he %oer%io" em!loye' by De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON #!o" Plai" i&& i" or'er o a%hieve asse" o he sai' s!e%ial ie a"' e(e%# io" hereo& #"'er he )#ise o& a le)al mor )a)e. 28. Tha he %o#rse o& eve" s be)i""i") *i h he i"i ial !re$#'i%ial remar0s &rom he 6e"%h a)ai"s Plai" i&& by De&e"'a" RICHARD H. FARLE-, imme'ia ely #!o" he &irs heari") o& alle)a io"s o& he Com!lai" by %o#"sel &or he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON re)ar'i") a(es alle)e'ly !ai' o" behal& o& Plai" i&&, #" il he o%%asio" o& iss#a"%e o& he Wri o& Assis a"%e a)ai"s Plai" i&& a"' he alle)e' 'is rib# io" o& he alle)e' !ro%ee's o he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON a"' o hers o& Re&eree, he De&e"'a" RICHARD H. FARLE- 'i' *ill&#lly a"' 'elibera ely #s#r! a $#ris'i% io" o le)isla e

i" his Co#r !oli i%al iss#es "ever le)isla e' by he Co")ress a"' 'i' re&#se o reli"B#ish or aba"'o" he same 'es!i e every %laim by Plai" i&& a"' he mass o& evi'e"%e bro#)h by Plai" i&& i" he '#e !ro%ess o& he Co#r a"' barri") he iss#es &rom he Co#r . 2;. Tha he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- OF WALTON, by i s %o#"sel, 'i' s a"' sile" ly by o" ea%h o%%asio" a"' a%B#ies%e i" every a% a%%om!lishe' a"' !romo e' a)ai"s Plai" i&& by De&e"'a" RICHARD H. FARLE- o# si'e his la*&#l $#ris'i% io" i" he Co#" y %o#r . 25. Tha he De&e"'a" HAROLD D. OWENS, CR., as Cler0 o& he De&e"'a" THE CO=NTOF DELAWARE, 'i' 'e"y he Plai" i&& he !ro%ess o& he Co#r by 'e"yi") o Plai" i&& he iss#a"%e o& a s#b!oe"a a"' a s#b!oe"a '#%es e%#m, a"' 'i' e" er i" o he re%or' De%isio"s a"' C#')me" s a)ai"s Plai" i&& )ive" o# si'e he $#ris'i% io" o& he Co#r , a"' a%B#ies%e i" all he a% io"s 'ire% e' o him &rom he Co#r by he De&e"'a" RICHARD H. FARLE-, by he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NTWALTON, a"' by he Re&eree a!!oi" e' o" *o o%%asio"s by he Co#r , a"' all #"'er %olor o& %#s om a"' !ra% ise o& mer%ha" s i", o&, &or, a"' by he De&e"'a" THE CO=NT- OF DELAWARE. 2@. Tha he De&e"'a" THE CO=NT- OF DELAWARE 'i', by i s Sheri&& a"' his several De!# ies, e"&or%e he above Wri o& Assis a"%e )ive" a)ai"s Plai" i&& by he De&e"'a" RICHARD H. FARLE- o he )rea harm o& Plai" i&&, by &or%ibly brea0i") a"' e" eri") Plai" i&&s %lose a"' '*elli"),ho#se, a"' Sheri&& a he same ime be&ore hree *i "esses, hoveri") over Plai" i&& a"' hrea e"i") bo'ily assa#l a"' ba ery, a em! i") o !rovo0e Plai" i&&, a"' 'i' &or%ibly e$e% Plai" i&& here&rom, all #"'er %olor o& he eB#i able $#ris'i% io" #s#r!e' ab i"i io by De&e"'a" RICHARD H. FARLE- i" or'er o !romo e he sei?i") o& Plai" i&&s !ro!er y alle)e'ly sol' a !#bli% a#% io", &or a"' o" behal& o& he De&e"'a" THE CO=NT- OF DELAWARE a"' i s symbio i% %oa'$# or, De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON. 24. Tha he sai' Sheri&& be&ore &o#r *i "ess 'i' 'e%lare o Plai" i&& ha i& he 'i' "o h#s &or%ibly e$e% Plai" i&& a ha ime, ha he sai' Sheri&& himsel& *o#l' be arres e' by he Co#r . 29. Tha all he sai' several a% s by he De&e"'a" s herei" "ame' *ere !romo e', 'o"e, a"' a%%om!lishe' solely o avoi' a !#bli% rial by $#ry !er !ais #!o" he iss#es #"'er he Co"s i # io", la*s, a"' rea ies o& ="i e' S a es o& Ameri%aAa"' o %o"%eal &rom he !#bli% he r#e !remise a"' o!era io"al basis o& he s#mmary !ro%ess !romo e' by he Co#r a"' De&e"'a" RICHARD H. FARLE- #"'er %olor o& he %#s om o& mer%ha" s i", o&, a"' &or he De&e"'a" THE CO=NT- OF DELAWARE. 23, Tha he De&e"'a" THE CO=NT- OF DELAWARE, i" &#l&illme" o& 'e"ial o& '#e !ro%ess o Plai" i&&, 'i', by i s Treas#rer, !ay i" o he ha"'s o& he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON, %er ai" s#bs a" ive mo"ies %o"&is%a e' #!o" he real !ro!er y o& Plai" i&& hro#)h a" #"la*&#l $#'i%ial sale. SUMMARY AND ARGUMENT

Plai" i&& asser s a"' 'e%lares ha all he a% s above e"#mera e' a"' %om!lai"e' o& o" he !ar o& he several De&e"'a" s %om!rise a si")le %a#se o& a% io", "amely #"$#s a"' #"la*&#l 'e"ial o& '#e !ro%ess o& la* a"' 'e"ial o& he eB#al !ro e% io" o& he la*s o Plai" i&& by he several De&e"'a" s o he )rea !erso"al harm, 'e rime" a"' loss o& Plai" i&&, all #"'er %olor o& he e(!e'ie"%y o& 'aily %ommer%ial !ra% ise i" a"' &or he De&e"'a" THE CO=NT- OF DELAWARE o he a'va" a)e o& he De&e"'a" Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE CO=NT- WALTON a"' a he e(!e"se o& Plai" i&&s !erso"al s#bs a" ive !ro!er y a"' ri)h s i" he same. Plai" i&& alle)es ha as a 'ire% res#l a"' %o"seB#e"%e o& he a% s o& he several De&e"'a" s %om!lai"e' o&, Plai" i&& has s#&&ere' )rea !erso"al i"$#ry, harm, a"' a")#ish, a"' *as s#mmarily 'e!rive' o& his homes ea' a"' &reehol', s#&&eri") )rea !erso"al loss herei", bei") h#s bere& o& his li&eAs savi")s, a"' 'e!rive' o& a" imme'ia e mea"s o& sel&,s#!!or . Plai" i&& *as %om!elle' o s!e"' ma"y ho#rs o& labor i" vai" 'e&e"se a"' !#rs#i o& his ri)h o '#e !ro%ess #"'er Ar i%le OIE o& Ame"'me" s o& he Co"s i # io" a"' o her la* o& he ="i e' S a es o& Ameri%a. Plai" i&& has s#&&ere' !erso"al loss o& a val#able !ie%e o& #"iB#e real !ro!er y a a )rea ly re'#%e' !ri%e a"' has bee" 'e!rive' o& he o!!or #"i y o %#l iva e he livelihoo' *hi%h he !ar i%#lar &reehol' a&&or'e' o he a'va" a)e o& he Plai" i&& a"' o& Plai" i&&s $#s a"' la*&#l !erso"al obli)a io"s o his %hil're". Plai" i&& has &or a lo") !erio' o& mo" hs bee" 'e!rive' o& he #se o& his !ro!er y a"' o& he !e%#"iary eB#i y %om!risi") he !remises a"' i s #ses #"iB#e o he !remises a"' he !re&ere"%e o& Plai" i&&. Plai" i&& i" !#rs#i") a &r#i less 'e&e"se o& his ri)h s be&ore he De&e"'a" s herei" has bee" 'e!rive' o& his !erso"al liber y over a !erio' o& ma"y mo" hs, s#&&eri") )rea loss a"' 'e!riva io", *he" he *o#l' o her*ise have bee" able o 'evo e ime o re rievi") a"' res ori") o her !erso"al losses i" heal h, o%%#!a io", a"' livelihoo' s#&&ere' !rior o he bri")i") o& his a% io". Plai" i&& has s#&&ere' )rea !erso"al a"(ie y a"' 'is ress over he e&&e% s o& his #"la*&#l a"' 'is%rimi"a ory 'e!riva io" o& ri)h s hro#)h $#'i%ial yra""y #!o" he "ee's o& Plai" i&&s %hil're", li0e*ise !revio#sly br# ali?e' by he same De&e"'a" THE CO=NT- OF DELAWARE a"' i s C#')e o& he Family Co#r , Ri%har' H, Farley, *he" Plai" i&& *as !hysi%ally hel!less, 'es i # e, a"' #"em!loyable. DEMAND FOR JUDGMENT WHEREFORE, Plai" i&& %laims 'ama)es o& he De&e"'a" s THE CO=NT- OF DELAWARE, RICHARD H. FARLE-, HAROLD D. OWENS CR., a"' Na io"al 6a"0i") Asso%ia io" THE NATIONAL 6ANF OF DELAWARE WALTON, i" he amo#" s s!e%i&ie' belo*, all i" La*&#l S a"'ar' Mo"ey o& he ="i e' S a es o& Ameri%a, a !ar, by, #"'er, a"' #!o" he Coi"a)e A% s

o& A!ril :, 243:, a"' o& Febr#ary :9, 2949, a"' he I" er"a io"al Mo"e ary A% s o& C#ly 82, 23;;J THE CO=NT- OF DELAWAREJ Com!e"sa ory Dama)es Q:5>,>>> P#"i ive Dama)es :5>,>>> RICHARD H. FARLE-J Com!e"sa ory Dama)es 5>,>>> P#"i ive Dama)es :>>,>>> HAROLD D. OWENS CRJ Com!e"sa ory Dama)es 5>,>>> P#"i ive Dama)es 5>,>>> NATIONAL 6ANF OF DELAWARE CO=NT- WALTONJ Com!e"sa ory Dama)es :5>,>>> P#"i ive Dama)es :5>,>>> Si)"e' his 2: h 'ay o& C#"e 234@ WILLIAM L. AEERPlai" i&& !ro se P.O. 6o( 93@ Fra"0li", N- 28445