Common Law

Published on February 2017 | Categories: Documents | Downloads: 54 | Comments: 0 | Views: 651
of 48
Download PDF   Embed   Report

Comments

Content

http://depositfiles.com/files/sxrklug3d http://depositfiles.com/files/axr8lzf64 HOW TH !"#T#$H % &'% $($T ) H'$ ! * +$ , TO *$%'- +$

The follo.i/g 0rief .as prese/ted to a &ra/d 1ur2 i/ the $tate of 3alifor/ia circa 4586 i/ a/ attempt to correct 7udicial a0use of people i/8ol8ed i/ patriot a/d i/come tax protest mo8eme/ts. )a/2 people .ere 0ei/g i/carcerated as political priso/ers of .hat is appare/tl2 a 9shado. go8er/me/t9 /o. i/ co/trol of the +$'. These patriots .ere attempti/g to educate as ma/2 of the ge/eral pu0lic as .ould hear their message. +/fortu/atel2: short;sighted self;i/terest a/d apath2 seem to ha8e pre8ailed. The /ame of the author is u/k/o./. 'lthough this is 0ased upo/ the 'merica/ s2stem: their s2stem of go8er/me/t a/d the 3a/adia/ s2stem: are 0ut 9slips9: or more appropriatel2 9suckers9 off the same pla/t: the !ritish limited mo/arch2. )ost of the follo.i/g: therefore: is directl2 applica0le to the 3a/adia/ dilemma. '. #*T"O,+3T#O* We ha8e a pro0lem a/d .e are here to a/al2ze that pro0lem. Wh2 do the courts refuse to admit certai/ argume/ts a/d cites of the +/ited $tates 3o/stitutio/< '/d further: fi/d some i/ co/tempt of court if the2 persist i/ doi/g so< Wh2 is there so little 7ustice i/ our courts toda2< Our pro0lem is: .e ha8e 0ee/ fighti/g the .ro/g thi/g;;pla2i/g the .ro/g 0all game. We ha8e fou/d that .e are /ot i/ 3ommo/ %a. u/der the 3o/stitutio/ ;; i/ fact: .e=re /ot i/ >uit2 u/der the 3o/stitutio/ ;; .e are i/ )aritime %a.: the %a. of 3ommerce: the %a. of 'dmiralt2. 1ust .hat is this %a. of 'dmiralt2< 'dmiralt2 %a. e/compasses all co/tro8ersies arisi/g out of acts do/e upo/ or relati/g to the sea: a/d >uestio/s of prize. ?rize is that la. deali/g .ith .ar: a/d the spoils of .ar ;; such as capture of ships: goods: materials: propert2 ;; 0oth real a/d perso/al: etc. )aritime %a. is that s2stem of la. that particularl2 relates to commerce a/d /a8igatio/. !ecause of this fact: as 2ou .ill see: 2ou do/=t ha8e to 0e o/ a ship i/ the middle of the sea to 0e u/der 'dmiralt2 1urisdictio/. This 7urisdictio/ ca/ attach merel2 0ecause the su07ect matter falls .ithi/ the scope of )aritime %a. ;; a/d: 0ills: /otes: che>ues a/d credits are .ithi/ the scope of )aritime %a.. 'dmiralt2 %a. gre. a/d de8eloped from the harsh realities a/d expedie/t measures re>uired to sur8i8e at sea. #t has 8er2 exte/si8e 7urisdictio/ of maritime cases: 0oth ci8il a/d crimi/al. !ecause of its ge/esis: it co/tai/s a harsh set of rules a/d procedures .here there is /o right to trial 02 7ur2: /o right to pri8ac2: etc. #/ other .ords: there are /o rights u/der this 7urisdictio/ ;; o/l2 pri8ileges gra/ted 02 the 3aptai/ of the maritime

8o2age. @or i/sta/ce: i/ this 7urisdictio/ there is /o such thi/g as a right /ot to 0e compelled to testif2 agai/st o/eself i/ a crimi/al case ;; the 3aptai/ ca/A ho.e8er: if he .ishes: gra/t 2ou the pri8ilege agai/st self;i/crimi/atio/. there=s /o such thi/g as a right to use 2our propert2 o/ the pu0lic high.a2s ;; 0ut the 3aptai/ ma2 gra/t 2ou the pri8ilege to do so: if he choosesA there is /o such thi/g as a right to operate 2our o./ 0usi/ess ;; o/l2 a pri8ilege allo.ed as lo/g as 2ou perform accordi/g to the captai/=s regulatio/s. Ha8i/g ide/tified the s2mptoms of the pro0lem: .e must diag/ose the cause to fi/d a solutio/. We ha8e 0ee/ fighti/g the effects too lo/g .hile the disease rages u/a0ated. $i/ce .e ha8e ide/tified the cause: a/d u/dersta/d its /ature a/d characteristics: .e Bhopefull2C ca/ 0uild a .i//i/g case. #/ marshalli/g our i/formatio/ a/d facts it is /ecessar2 to go 0ack i/ time. %et us exami/e the e8ide/ce a/d facts: !ack at the time: 7ust 0efore the re8olutio/ ;; .he/ our 3olo/ies .ere festeri/g a/d threate/i/g re8olt from the Di/g ;; .he/ .e had the 3ommo/ %a. of the 3olo/ies. The Di/g=s me/ came o8er to collect their taxes. The2 did/=t use the 3ommo/ %a. o/ us: the2 applied 'dmiralt2 %a. o/ us ;; arrested people: held $tar 3ham0er proceedi/gs a/d de/ied us our commo/ rights as /glishme/. This: more tha/ a/2 o/e thi/g: Esure: taxatio/ .ithout represe/tatio/ .as part of itF ;; 0ut it .as de/ial of our 3ommo/ %a. rights 02 putti/g us u/der 'dmiralt2 %a. .herei/ the Di/g .as the 3ha/cellor. His age/ts depri8ed us of 7ur2 trials: put us o/ ships: se/t us do./ to ports i/ the !ritish West #/dies ;; .here ma/2 died of fe8er i/ the holds of ships ;;a/d 8er2 fe. retur/ed. This .as o/e of the mai/ reaso/s for the re8olutio/ i/ 4GG6. What is the Common Law? Historicall2: the 3ommo/ %a. came from the '/glo; $axo/ 3ommo/ %a. i/ /gla/d. #t existed: a/d co/trolled a/d ruled the la/d of /gla/d pre8ious to the reig/ of William the 3o/>ueror B4H66C: .he/ the *orma/s co/>uered '/glo;$axo/ /gla/d. #/ it .as the &olde/ "ule E"ule of 3i8il 1usticeF that i/ the /egati8e form reads: 9,o /ot u/to others as 2ou .ould /ot ha8e others do u/to 2ou.9 ?.$. The positi8e form deals .ith $ocial 1ustice. Where did this la. come from ;; this '/glo;$axo/ 3ommo/ %a.< ,id it come from 3hristia/it2=s i/troductio/ to /gla/d< 'ppare/tl2 /ot. #t is o/ record i/ the -atica/ ;;; The earl2 3hristia/ missio/aries reported that the people of *orther/ &erma/2 9alread2 ha8e the la.9. #t is suspect that earl2 He0re. ti/ traders taught these people the la. ma/2 2ears 0efore 3hrist. $o .hat has happe/ed< The /glish people had this simple a/d pure 3ommo/ %a. of rights a/d propert2 rights. !ut there also existed alo/g side of it: e8e/ i/ those da2s: the la. of commerce: .hich is the )aritime %a.. The earliest recorded k/o.ledge .e ha8e of )aritime %a. is i/ the #sle of "hodes: 5HH !. 3. ;; the/ there=s the %a.s of Olero/: %a.s of the Ha/seatic %eague: )aritime %a.: .hich .as part a/d parcel of their ci8il

la.. This is the la. of commerce: .hereas the 3ommo/ %a. .as the la. that had to do .ith the la/d: a/d .ith the people of the la/d. William the 3o/>ueror su07ugated all the $axo/s to his rule except %o/do/ To./. The mercha/ts co/trolled the cit2 a/d their .alls held off the i/8aders. The mercha/ts .ere a0le to pro8isio/ the cit2 02 ships a/d William=s soldiers .ere /ot a0le to pre8ail. @i/all2: ack/o.ledgi/g that he could /ot take the 3it2 02 force: he resorted to compromise. The mercha/ts dema/ded 9the 9%ex )erca/toria9 Bthe )aritime %a.C. This .as gra/ted a/d remai/s to this da2. The i//er cit2 of %o/do/ has its special la. .here the )ercha/tIs %a. is the la. of the 3it2 of %o/do/. ?rotectio/ of their shippi/g i/dustr2 .as o/e of the mai/ reaso/s for the resista/ce 02 the mercha/ts of %o/do/. The $axo/ 3ommo/ %a. had /o pro8isio/ for fictitious perso/s Ecompa/iesF or limited lia0ilit2A 0ut: recog/ized o/l2 /atural perso/s a/d full lia0ilit2. The "oma/ 3i8il %a. .as a deri8ati8e of the )aritime %a. a/d is the 0asis of 3i8il %a. i/ most uropea/ cou/tries. #de/tif2i/g features of "oma/ 3ommo/ %a. are the usage of precede/t a/d 7udgeme/t 02 magistrateEsF i/ courts of $ummar2 1urisdictio/. 't "u//2mede: i/ 464J: the !aro/s of /gla/d forced Di/g 1oh/ to sig/ the )ag/a 3arta: o/e of se8eral docume/ts esta0lishi/g the fu/dame/tal rights of the /glish people to this da2: KThe others 0ei/g the re8isio/ of the )ag/a 3arta i/ 466J: the ?etitio/ of "ightsB4668C a/d the !ill of "ights B4685CL. The primar2 o07ecti8e a/d co/te/t of the )ag/a 3arta .as the prohi0itio/ of the use of $ummar2 7urisdictio/ Bthe "oma/ or 'dmiralt2 %a.C as a mea/s of u/authorized taxatio/ a/d seizure of propert2 .ithout due process of %a. or 7ust compe/satio/. The colo/ists .ere: o/ the .hole: 8er2 .ell schooled i/ the 3ommo/ %a. a/d .ere >uite a.are of the .ro/gs that Di/g a/d ?arliame/t .ere committi/g agai/st them. This e8e/tuall2 forced them to re0el. The 3ommo/ %a. that .e had i/ our la/d is parallel to a/other a/cie/t la.. (ou .ill fi/d that .he/ our @ou/di/g @athers set up the declarator2 trust: k/o./ to us as the ,eclaratio/ of 9#/depe/de/ce9: 1efferso/ listed 48 grie8a/ces a/d i/ each o/e of these grie8a/ces he sho.ed ho. .e .ere 0ei/g de/ied our rights as free;0or/ /glishme/. $o: he made a/ appeal to the /atio/s of the .orld that the acts 0ei/g committed agai/st the colo/ists .ere acts committed agai/st the %a.s of *atio/s: a/d it Ethe ,eclaratio/ of #/depe/de/ceF 0ecame a/ ordi/a/ce: a pu0lic trust: .ithi/ the %a. of *atio/s ;; a/d those @ou/di/g @athers k/e. that the2 .ould ha8e to fight to .i/ the i/depe/de/ce that the2 had so declared. 'fter the /glish surre/dered at (orkto./: the 'rticles of 3o/federatio/ period follo.ed. The/ our @ou/di/g @athers impleme/ted the 3o/stitutio/ i/to this ?u0lic Trust: .hich .as the mecha/ism to pro8ide for us our hopes a/d aspiratio/s. #/ the 3o/stitutio/ 2ou .ill fi/d pri/ciplesA 0ut: /ot /ecessaril2 those fou/d i/ the ,eclaratio/ of #/depe/de/ce. $ome of the .riters of the 3o/stitutio/ .as a little too restricti8e. #t .as ge/erall2

co/ceded: for i/sta/ce: that the people had the right to 0ear arms: 0ut the2 also k/e. that if .e e8er .ere placed or allo.ed oursel8es to 0e 0rought u/der )aritime 'dmiralt2 %a. co/cer/i/g our perso/s a/d propert2: .e .ould ha8e dire /eed of a guara/tee for our rights ;; thus: the te/ ame/dme/ts .ere added to the 3o/stitutio/: a/d that 0ecame the su0sta/ti8e part of the 3o/stitutio/. 'rticle ###: $ectio/ 6: of the +. $. 3o/stitutio/ defi/es the )aritime 'dmiralt2 7urisdictio/. Ho. .e ha8e 0ee/ tricked out of our 3ommo/ %a. rightsA a/d: i/to the 'dmiralt2 courts< Ho. has e>uit2 as .ell as 'dmiralt2 0ee/ corrupted< Ho. has the @ederal &o8er/me/t made it almost impossi0le for us to recei8e our co/stitutio/al rights ;; our su0sta/ti8e rights i/ the 3o/stitutio/< *o.: to u/dersta/d the 3o/stitutio/ ;; .e must exami/e the ,eclaratio/ of #/depe/de/ce a/d those J6 me/ .ho sig/ed it: a/d pledged their li8es: li0ert2: famil2: propert2: a/d their ho/or to this sacred trust. 'll of these me/ .ere 8er2 k/o.ledgea0le a/d lear/ed i/ the 3ommo/ %a. ;; the2 k/e. the la. 0ecause the2 studied the la.: the2 ma2 /ot ha8e had a high school educatio/ Ema/2 of themF. !ut the2 could read: a/d the2 read a/d studied la.. The2 .ere me/ of the age or reaso/ a/d the2 k/e. a/d the2 u/derstood. The2 k/e. exactl2 .hat the ki/g .as doi/g. The2 k/e. the la.. D/o.ledge is a 8er2 importa/t thi/g. '/d: as 1ames )adiso/ .rote 2ears ago : 9D/o.ledge .ill fore8er go8er/ ig/ora/ce: a/d a people .ho mea/ to 0e their o./ go8er/ors must arm themsel8es .ith the po.er .hich k/o.ledge gi8es.9 ducatio/ should /e8er 0e termi/alM The @irst 'me/dme/t to the + $ 3o/stitutio/ cites 9@reedom of "eligio/9 that i/ actual fact is 9@reedom of ducatio/9 si/ce the church co/trolled educatio/: at the time of .riti/g. *o.: there is a chro/ological se>ue/ce of e8e/ts that placed us .here .e are toda2. We ca/ almost assure 2ou that 2ou .ill re7ect: or .a/t to re7ect: parts of .hat 2ou are a0out to see a/d hear. There is a theor2 k/o./ as the Theor2 of 3og/iti8e ,isso/a/ce ET3,F that holds that the mi/d i/8olu/taril2 re7ects i/formatio/ /ot i/ li/e .ith pre8ious thoughts a/d/or actio/s. !race 2ourself: the follo.i/g message ma2 0e e/tirel2 differe/t from a/2thi/g 2ou heretofore 0elie8ed to 0e true. #f 2ou are u/a.are: 2ou are u/a.are of 0ei/g u/a.areM BUILDING THE CASE The first step i/ 0uildi/g a/2 case .hich has a cha/ce of .i//i/g is to a/al2ze the pro0lem. ' commo/ patter/ for doi/g this is to recog/ize a pro0lem that /eeds a/s.eri/gA a/al2ze the pro0lem 02 first stati/g itA reach a satisfactor2 7udgme/tA a/d the/ defe/d our 7udgme/t. #/ prepari/g our case: our legal research .ill 0e determi/ed e/tirel2 02 the facts of the case for: .ithout facts: the la. is mea/i/gless. #/ marshalli/g our facts .e /eed to keep a fe. guidi/g pri/ciples i/ mi/d so .e are/=t led astra2: .e must discou/t preco/ceptio/sA postpo/e 7udgeme/tsA a/d .e must o0ser8e for a purpose:

k/o. .h2 .e are o0ser8i/g a/d stick to rele8a/t facts a0out the case. The a/s.ers must 0e 0ased o/ e8ide/ce: premises a/d i/fere/ces. TH 3O))O* %'W %et=s explore the 3ommo/ %a. i/ depthA a/d: its em0odime/t i/ our 3o/stitutio/. ?ro0a0l2 o/e of the 0est .a2s of explai/i/g .hat this 3ommo/ %a. is: is to explai/ .hat it is /ot ;; to compare it to its a/tithesis. There are: fu/dame/tall2: t.o competi/g s2stems of ma/;made la. i/ the .orld that are i/ co/sta/t ideological co/flict agai/st each other. O/e is the 3ommo/ %a. a/d the other is the 3i8il %a.: or "oma/ 3i8il %a.. ' 0rief stud2 of the philosophic 0ackgrou/d is prese/ted i/ order to grasp the sig/ifica/ce of the differe/ces i/ the t.o s2stems. ' tri;u/it2 of &od Eor: $upreme !ei/gF co/cepts: composed of: 4. &od #s Bthe &od out thereC: 6. &od Withi/ B&od i/d.elli/g each i/di8idualC: a/d: 3. Withi/ &od Bthe perso/ 0ei/g a part of &od: a cell i/ the 0od2 of &od: etcC: are the 0asic 0uildi/g 0locks of religious u/dersta/di/g: the 0asic eleme/ts of ma/=s religio/s a/d religious i/stitutio/s. ' 0ala/ced tri;u/it2: regardless of co/cept >ualit2: .ould make for a harmo/ious religious a/d social structure. B$ome of the *orth 'merica/ #/dia/ tri0es achie8ed such a reaso/a0l2 0ala/ced plateau i/ their cultureC. Ho.e8er: some sociall2 domi/ati/g cultures: such as 1udaism: are domi/ated 02 N 4: a/d a 0it of N 3. !uddhism calls mostl2 o/ N 3 .ith some N6. 3o/sider .here o/e .ould place 3ommu/ism: Oligarchic domi/a/ce: 'merica/ repu0lica/ism: the "e/aissa/ce< O/e ca/ fi/d these co/cepts ruli/g a/cie/t ci8ilizatio/s: a/d exte/di/g i/to the 8er2 roots of our curre/t co/cepts of statehood. The a/cie/t &reek cit2 states de8eloped i/ t.o: a/d opposi/g directio/s 0ecause their philosophic thought ga8e some the 9&od is9 co/cept i/ isolatio/ to the other t.o co/cepts: .hile the other took the 9&od .ithi/9 as their sole co/cept. O/e .as Oligarchic: the other .as "epu0lica/. 'ristotle .as a spokesma/ of the first: ?lato: of the seco/d. The first leads to the fi/al co/clusio/ that ma/ is a/ e8ol8ed a/imalA a/d: as this thread of 0elief structures comes do./ to our curre/t era. O/e of the stro/gest of such 0elief structures resides .ithi/ the curre/t huma/ist mi/d;set ;; the +/i8erse is Bsupposedl2C deteriorati/g a/d retur/i/g to 0asic eleme/ts: ;; so too .ould ma/ re8ert to lo.er forms of a/imalism: if left o/ his o./: .ithout di8i/el2 appoi/ted leaders: the oligarchs: the captai/ of the ship. The cult of )other arth B /8iro/me/talismC falls i/to this school of thought. The "epu0lica/ 9&od .ithi/9 societ2 0elie8es i/ the .orth a/d respo/si0le /ature of the i/di8idual. #/ a true "epu0lic: represe/tati8es are appoi/ted a/d gi8e/ respo/si0ilit2 for the pu0lic good as 9ser8a/ts9. ,emocrac2 is a/ oligarchic mecha/ism to appease those people .ho 02 /ature reall2 are "epu0lica/. ' ,emocrac2 allo.s the people to choose their 9leaders9: their sla8e;masters. The Oligarchs ma/ipulate the eco/omic a/d social structures so as to create a turmoil to keep their su07ects co/sta/tl2 stri8i/g for the 0asic huma/ i/stitutio/s: self;mai/te/a/ce: self;perpetuatio/ a/d self;gratificatio/A a/d: /e8er allo. these to reach a poi/t .here "epu0lica/ thought: creati8it2 a/d altruism: ma2 0ecome esta0lished.

$o: .ith this 0ackgrou/d: 2ou might 0etter u/dersta/d the differe/ce 0et.ee/ the oligarchic )aritime %a. a/d the "epu0lica/ e/ha/ci/g $axo/ 3ommo/ %a.. The oligarchic e/trepre/eur=s o8erthro. of a/cie/t #srael repu0lica/ form of go8er/me/t is recorded i/ 4 $amuel: 3hapter 8 Bsome .orth.hile readi/gC. To co/sider the 8alue of the 9&od .ithi/9 co/cept to societ2: stud2 the effect of the results of the 3ou/cil of @lore/ce B4435C called 02 the ?ope of the "oma/ 3hurch of that time: at .hich the ,octri/e of 9The @ilio>ue9 B3hrist i/d.elli/gC .as esta0lished. E'ctuall2: it .as a re8i8al of the teachi/gs of $t. 'ugusti/e a/d ?hilo of 'lexa/dria. The a/ti;?hilo i/trigues surrou/di/g the *ice/e 3ou/cil a/d its resulti/g *ice/e 3reed is a stud2 i/ itself regardi/g the impositio/ of oligarch2 a/d its accompa/2i/g "oma/ dictators t2pe of rule o8er the 3hurchF. 8e/ though it .as /ot accepted 02 the aster/ B!2za/ti/eC "ite a/d the 1esuits: it resulted i/ the "e/aissa/ce: the 'ge of "easo/: great artistic expressio/: a/d the repu0lica/ mo8eme/ts i/ urope a/d 'merica. 1. "eu0e/ 3lark: a former +$ +/der;$ecretar2 of $tate a/d 'm0assador to )exico: succi/ctl2 stated the pri/ciples a/d applicatio/s of these t.o s2stems of la. .he/ he .rote: 9!riefl2: a/d stated i/ ge/eral terms: the 0asic co/cept of these t.o s2stems .as as opposite as the poles. #/ the 3i8il %a.: the source of all la. is the perso/al ruler: .hether: ki/g: or emperorA he is so8ereig/. #/ the 3ommo/ %a.: certai/l2 as de8eloped i/ 'merica: the source of all la. is the people. The2: as a .hole: are so8ereig/. ,uri/g the ce/turies: these t.o s2stems ha8e had a/ almost deadl2 ri8alr2 for the co/trol of societ2: the 3i8il %a. a/d its fu/dame/tal co/cepts 0ei/g the i/strume/t through .hich am0itious me/ of ge/ius a/d selfish/ess ha8e set up a/d mai/tai/ed despotisms: the 3ommo/ %a.: .ith its 0asic pri/ciples: 0ei/g the i/strume/t through .hich me/ of e>ual ge/ius: 0ut .ith lo8e of ma/ki/d 0ur/i/g i/ their souls: ha8e esta0lished a/d preser8ed li0ert2 a/d free i/stitutio/s. The 3o/stitutio/ of the +/ited $tates em0odies the loftiest co/cepts 2et framed of this exalted co/cept.9 Thus: our heritage of freedom is a direct a/d proximate result of the 3ommo/ %a.: deri8i/g its authorit2 solel2 from usages a/d customs of immemorial a/ti>uit2. The 3ommo/ %a. is the legal em0odime/t of practical commo/ se/se: a/d: its guidi/g star has al.a2s 0ee/ the rule of right a/d .ro/g ;the &olde/ "ule. The 3ommo/ %a.: as em0odied i/ the +$ 3o/stitutio/: for the protectio/ a/d securit2 of perso/s a/d propert2: is $u0sta/ti8e 3ommo/ %a. ; Bsu0sta/ti8e right: a right Kas of life: li0ert2: propert2: or reputatio/L held to exist for its o./ sake a/d to co/stitute part of the /ormal legal order of societ2C ; the i/te/tio/ of the @ou/di/g @athers 0ei/g the assura/ce of access to this la. 02 the people. 8ide/ce .ill 0e further prese/ted to sho. ho. other parts of the +$ 3o/stitutio/ deali/g .ith the totall2 differe/t 7urisdictio/s of 'dmiralt2 a/d )aritime %a.: ha8e 0ee/ used to su08ert the people i/to: or u/der this 7urisdictio/: a/d 0ar access to the su0sta/ti8e 3ommo/ %a..

The 0asic eleme/t of the su0sta/ti8e 3ommo/ %a. is 2ou Bthe i/di8idual /atural perso/C. #/ this 7urisdictio/: 2ou are the so8ereig/ a/d the captai/ of 2our o./ ship. The restoratio/ of that exalted co/cept: a/d access to the la. 02 .hich me/ ha8e esta0lished li0ert2 a/d free i/stitutio/s ; is the o07ect of this 0rief.

3H"O*O%O&#3'% $ O+ *3 O@ - *T$ '*, " % -'*T @'3T$: The facts that appear rele8a/t to this case co8er a se>ue/ce of e8e/ts 0egi//i/g .ith the ,eclaratio/ of #/depe/de/ce o/ 1ul2 4th 4GG6. We .ill i/troduce a/d discuss these facts i/ se>ue/ce of occurre/ce. We .ill sho. 2ou: 02 the facts surrou/di/g these e8e/ts: a/d 02 the la.: ho. our courts ha8e 0ee/ co/8erted to courts of 'dmiralt2 that ha8e /o 7urisdictio/ to hear 3ommo/ %a. B!ill of "ightsC issues 0rought 0efore them. These e8e/ts are: a. ,eclaratio/ Of #/depe/de/ce B4GG6C 0. +$ 3o/stitutio/ B4G8GC c. 1udiciar2 'ct B4G85C d. &eorge "app Harmo/2 $ociet2 B48HJC e. ,e%o8io 8. !oit B484JC f. ,r. %ist=s %etters B486JC g. $.ift 8. T2so/ B4846C h. %imited %ia0ilit2 'ct B48J4C i. To/ti/e #/sura/ce B4868C 7. @ederal "eser8e 'ct B4543C k. House 1oi/t "esolutio/ 456 B4533C l. rie "ailroad 8. Tompki/s B4538C m. -ictor2 Tax 'ct B4546C /. +$ 8. $outh; aster/ +/der.riters 'ssociatio/ B4544C o. )c3arre/ 'ct B454JC The facts prese/ted i/ this se>ue/ce .ill sho.: 4. That the ,eclaratio/ of #/depe/de/ce a/d the +$ 3o/stitutio/ are ordi/a/ces .ithi/ the %a. of *atio/s.

6. That the primar2: a/d compelli/g reaso/ for the ,eclaratio/ of #/depe/de/ce .as to elimi/ate 'dmiralt2 %a.: a/d 7urisdictio/ from the ,omestic la. of the colo/ies. 3. That the 1udiciar2 'ct of 4G85 clearl2 recog/ized the disti/ct: a/d separate 7urisdictio/ of 'dmiralt2 a/d ,omestic la..K3ommo/ %a.L 4. That the formula a/d 0luepri/t of the @ederal "eser8e $2stem is ide/tical: i/ its esse/tial features: to that of the &eorge "app Harmo/2 $ociet2A a/d: to the To/ti/e #/sura/ce schemes B.hich .ere pure .ageri/g policies a/d are specificall2 for0idde/ i/ the co/stitutio/s of se8eral $tatesC. J. That the @ederal "eser8e is a maritime le/der a/d i/sura/ce u/der.riter to the +/ited $tatesA a/d: as such: has /o risk i/ the maritime 8e/ture as a le/der: or as i/surer: has /o 8ested i/terest i/ the su07ect matter i/sured. 6. That the su07ect matter i/sured 02 the @ederal "eser8e is the ?u0lic *atio/al 3redit $2stem: .hich is a maritime 8e/ture for profit u/der limited lia0ilit2 for pa2me/t of de0t. G. That: for the pri8ilege of limited lia0ilit2 for pa2me/t of de0t: a/2o/e .ho 0e/efits from the Public National C e!it Bpro8ided 02 the @ederal "eser8eC has a/ i/sura0le i/terest i/ a maritime 8o2age ;a/d is: therefore su07ect to: a/d ca/ 0e re>uired to: make premium pa2me/ts u/der the %a. of 'dmiralt2 a/d )aritime Bthe i/come taxC " as lon# as the cont act is in $o ce% 8. That all the esou ces o$ the USA ha&e been h'(othecate!) o (le!#e!) to the *e!e al +ese &e as a secu it' $o the Public National C e!it S'stem% 5. That the House 1oi/t "esolutio/ 456: passed 02 3o/gress o/ 1u/e J: 4533: made it impossi0le for a/2o/e to pa2 a de0t at la.A a/d: this $act ma,es an'one who bene$its $ om the Public National C e!it S'stem a sole me chant) su07ect to 'dmiralt2 1urisdictio/ i/ all co/tro8ersies i/8ol8i/g said credit. 4H. That: 0ecause of House 1oi/t "esolutio/ 456: .e ha8e lost access to su0sta/ti8e 3ommo/ %a.: .e ha8e lost our allodial la/d titles ; a/d a foreig/ 7urisdictio/ of 'dmiralt2 %a. has 0ee/ imposed upo/ our domestic la. ; 7ust as occurred a 0it o8er 6HH 2ears ago. *aturall2: .e ca/ expect these facts to ge/erate more >uestio/s that must 0e a/s.ered. We .ill 0e raisi/g some >uestio/s oursel8es as .e proceed. 's .e proceed: .e .ill appl2 the la. to these facts a/d sho.: 4. That the maritime 8e/ture for profit: 02 .a2 of the ?u0lic *atio/al 3redit $2stem is 0ased o/ a false a/d fraudule/t premise that this 8o2age is a la.ful o/e. 6. That this 8o2age is: i/ fact: is i/ direct 8iolatio/ of the ?ositi8e %a. of the %a. of *atio/sA a/d: therefore: is: a/d al.a2s .as 8oid from its i/ceptio/. 3. That: 0ecause of this fact: /o age/c2 of go8er/me/t: a/d /o court i/ this la/d has la.ful 7urisdictio/ to e/force a/2 claim arisi/g out of: or i/8ol8i/g the ?u0lic *atio/al 3redit $2stem. 4. That the de facto 7urisdictio/ curre/tl2 0ei/g exercised 02 our go8er/me/t age/cies Ba/d psuedo;age/cies such as the #"$: 3#': a/d @!#C a/d especiall2 @ederal ,istrict 3ourts .ill co/ti/ue 0ei/g exercised u/til successfull2 challe/ged .ith rele8a/t facts

a/d issues: i/ a court of proper 7urisdictio/. J. @i/all2: .e .ill sho.: 02 .a2 of these facts a/d la.: 7ust .hat .e ha8e to do to regai/ access to our su0sta/ti8e 3ommo/ %a. ; a/d regai/ our allodial la/d titles. *o.: .e are read2 to go i/to more detail of the rele8a/t facts surrou/di/g this se>ue/ce of e8e/ts: , 3%'"'T#O* O@ #*, ? *, *3 ; 1ul2 4: 4GG6: 's pre8iousl2 stated: ma/2 reaso/s impelled the 'merica/ colo/ists to separate themsel8es from &reat !ritai/: 0ut the more o08ious reaso/s .ere gi8e/ i/ the ,eclaratio/ itself. Writte/ i/ the st2le of a formal complai/t: or actio/ at la.: it co/tai/s a ,eclaratio/: a 3ommo/;%a. !ill of ?articulars or 3ou/ts: a/d a pra2er to the $upreme 1udge of the .orld. The stated purpose of the declaratio/ .as to assume amo/g the po.ers of the earth: the separate a/d e>ual statio/ to .hich the %a.s of *ature a/d the %a.s of &od e/title them: a/d that: out of respect for the opi/io/s of ma/ki/d: the2 should declare the causes .hich impel them to the separatio/. @or our purposes: .e .ill zero i/ o/ the 43th 3ou/t .here it is stated that: He EDi/g &eorgeF has com0i/ed .ith others to su07ect us to a 7urisdictio/ foreig/ to our co/stitutio/: a/d u/ack/o.ledged 02 our la.sA gi8i/g asse/t to their acts of prete/ded legislatio/:9 The ,eclaratio/ the/ goes o/ to defi/e the foreig/ 7urisdictio/ referred to as follo.s : P @or >uarteri/g large 0odies of armed troops amo/g us P for protecti/g: 02 mock trial: from pu/ishme/t for a/2 murders .hich the2 should commit o/ the i/ha0ita/ts of these states: P @or cutti/g off our trade .ith all parts of the .orld: P @or imposi/g taxes upo/ us .ithout our co/se/t: P @or depri8i/g us: i/ ma/2 cases: of the 0e/efit of trial 02 7ur2: P @or a0olishi/g the free s2stem of /glish la.s i/ our /eigh0ori/g pro8i/ce: esta0lishi/g therei/ a/ ar0itrar2 go8er/me/t: a/d e/largi/g its 0ou/daries so as to re/der it at o/ce a/ example a/d fit i/strume/t for i/troduci/g the same a0solute rule i/to these colo/ies: P @or taki/g a.a2 our charters: a0olishi/g our most 8alua0le la.s a/d alteri/g fu/dame/tall2 the forms of our go8er/me/ts: P @or suspe/di/g our o./ %egislatures: a/d declari/g themsel8es i/8ested .ith po.er to legislate for us i/ all cases .hatsoe8er: What the/: .as this 7urisdictio/ foreig/ to their co/stitutio/< 8er2 itemized complai/t listed i/ the 43th cou/t falls u/der the 7urisdictio/ of 'dmiralt2 %a. a/d the %a. of *atio/s. 'lthough the colo/ists .ere !ritish su07ects: the2 .ere 0ei/g treated as if the2 .ere a co/>uered /atio/ ;;such treatme/t: if such .ere the actual case: 0ei/g sa/ctio/ed i/ o/e 7urisdictio/ o/l2 ;; a/d that is the %a. of 'dmiralt2.

The ,eclaratio/ goes o/ to state that Ethose +/ited 3olo/iesF 9as @ree a/d #/depe/de/t $tates: the2 ha8e the full po.er to le82 War: co/clude peace: co/tract allia/ces: esta0lish commerce: a/d to do all other acts a/d thi/gs .hich i/depe/de/t states ma2 of right do.9 Thus: upo/ the sig/i/g of the ,eclaratio/: the2 ope/l2 declared to all the /atio/s of the .orld that the2 .ere of e>ual status ;; a/d that: there02: the2 .ere 0ou/d 02 the %a. of *atio/s .he/ deali/g .ith other /atio/s. The ,eclaratio/ also clearl2 expressed the i/te/t to 0a/ the 'dmiralt2 7urisdictio/ from .ithi/ $tate 0orders: or from the domestic la. of the states ;; the mai/ purpose a/d reaso/ for separatio/. '/ e>uall2 sig/ifica/t e8e/t is that it 0roke the hold of /glish feudalism o8er colo/ial la/d a/d i/sta/tl2 co/8erted all la/d title to allodiums. This fact .as clearl2 a/al2zed 02 the $upreme 3ourt of the $tate of ?e//s2l8a/ia i/ the case of Wallace -. Harmstad i/ 4863: .he/ the court said: 9# see /o .a2 of sol8i/g this >uestio/: except 02 determi/i/g .hether our ?e//s2l8a/ia titles are allodial or feudal. ;;9 9# 8e/ture to suggest that much of the co/fusio/ of ideas that pre8ails o/ this su07ect has come from our retai/i/g: si/ce the 'merica/ "e8olutio/: the feudal /ome/clature of estates a/d te/ures: as fee: freehold: heirs: feoffme/t: a/d the like.9 9Our >uestio/: the/: /arro.s itself do./ to this: is fealt2 a/2 part of our la/d te/ures< What ?e//s2l8a/ia/ e8er o0tai/ed his la/ds 02 ope/l2 a/d hum0l2 k/eeli/g 0efore his lord: 0ei/g u/girt: u/co8ered: a/d holdi/g up his ha/ds 0oth together 0et.ee/ those of the lord: .ho sat 0efore him: a/d there professi/g that he did 0ecome his ma/ from that da2 forth: for life a/d lim0: a/d certai/l2 ho/our: a/d the/ recei8i/g a kiss from his lord< This .as the oath of fealt2 .hich .as: accordi/g to $ir )arti/ Wright: the esse/tial feudal 0o/d so /ecessar2 to the 8er2 /otio/ of a feud. 9We are the/ to regard the "e8olutio/ a/d these 'cts of 'ssem0l2 as ema/cipati/g e8er2 acre of soil of ?e//s2l8a/ia from the gra/d characteristics of the feudal s2stem. 8e/ as to the la/ds held 02 the proprietaries Ecit2 of ?hiladelphiaF themsel8es: the2 held them as other citize/s held: u/der the 3ommo/.ealth: a/d that 02 a title purel2 allodial.9 +. $. 3o/stitutio/ ; 4G8G 'dmiralt2 7urisdictio/ of 3o/gress is defi/ed i/ 'rticle #: $ectio/ 8: 9The 3o/gress shall ha8e the po.er to collect taxes: duties: imposts a/d excises: to pa2 the de0ts ...of the +/ited $tates...9 To 0orro. mo/e2 o/ the credit of the +/ited $tates. To regulate 3ommerce .ith foreig/ /atio/s: a/d amo/g the se8eral $tates: a/d .ith the #/dia/ Tri0es. To esta0lish a/ u/iform "ule of *aturalizatio/: a/d u/iform la.s o/ the su07ect of !a/kruptcies. To defi/e a/d pu/ish piracies a/d felo/ies committed o/ the high seas: a/d offe/ses agai/st the %a. of *atio/s. To declare War: gra/t letters of )ar>ue a/d "eprisal: a/d make "ules co/cer/i/g 3aptures o/ %a/d a/d Water. To raise a/d support armies... To pro8ide a/d mai/tai/ a *a82. To make rules for...%a/d a/d *a8al forces. To pro8ide for calli/g forth the militia... To pro8ide for orga/izi/g: armi/g: a/d discipli/i/g the )ilitia...;; The po.ers listed here are all .ithi/ the 7urisdictio/ of 'dmiralt2 a/d )aritime %a. a/d e/compass most of the po.ers gra/ted to 3o/gress. 'dmiralt2 a/d )aritime 7urisdictio/ of the $upreme 3ourt is defi/ed i/ 'rticle ###: $ectio/ 6 : 9The 7udicial po.er shall exte/d to all cases i/ %a. a/d >uit2: arisi/g u/der

this 3o/stitutio/: the la.s of the +/ited $tates: the Treaties made: or .hich shall 0e made: u/der their authorit2A to all cases affecti/g 'm0assadors: other pu0lic )i/ister a/d 3o/sulsA to all cases of 'dmiralt2 a/d )aritime 7urisdictio/...9. The full scope a/d mea/i/g of 'rticle ###: $ectio/ 6: .as addressed 02 1ustice $tor2 i/ the case of ,e %o8io 8. !oit i/ 484J: 9What is the true i/terpretatio/ of the clause;; all cases of 'dmiralt2 a/d )aritime 7urisdictio/<9 #f .e exami/e the et2molog2: or recei8ed use of the .ords 9'dmiralt29 a/d 9)aritime 7urisdictio/:9 .e shall fi/d: that the2 i/clude 7urisdictio/ of all thi/gs do/e upo/ a/d relati/g to the sea: or: i/ other .ords: all tra/sactio/s a/d proceedi/gs relati8e to commerce a/d /a8igatio/: a/d to damages or i/7uries upo/ the sea. #/ all the great maritime /atio/s of urope: the same 9'dmiralt2 7urisdictio/9 is u/iforml2 applied to the courts exercisi/g 7urisdictio/ o8er maritime co/tract a/d co/cer/s. We shall fi/d the terms 7ust as familiarl2 k/o./ amo/g the 7urists of $cotla/d: @ra/ce: Holla/d a/d $pai/ as of /gla/d: a/d applied to their o./ courts: possessi/g su0sta/tiall2 the same 7urisdictio/: as the /glish 'dmiralt2 i/ the reig/ of d.ard the Third. 9The clause ho.e8er of the co/stitutio/ /ot o/l2 co/fers 'dmiralt2 7urisdictio/: 0ut the .ord 9)aritime9 is superadded: seemi/gl2 exQi/dustria to remo8e e8er2 late/t dou0t. 93ases of )aritime 7urisdictio/9 must i/clude all maritime co/tracts: torts a/d i/7uries: .hich are i/ the u/dersta/di/g of the 3ommo/ %a.: as .ell as of the 'dmiralt2:...9 #/ 'rticle -#: it is stated: 9'll de0ts co/tracted a/d e/gageme/ts e/tered i/to: 0efore the adoptio/ of this 3o/stitutio/: shall 0e 8alid agai/st the +/ited $tates u/der this 3o/stitutio/: as u/der the 3o/federatio/. This 3o/stitutio/: a/d the %a.s of the +/ited $tates .hich shall 0e made i/ pursua/ce thereofA a/d all Treaties made: or .hich shall 0e made: u/der the 'uthorit2 of the +/ited $tates: shall 0e the supreme la. of the la/dA a/d the 1udges i/ e8er2 $tate shall 0e 0ou/d there02: a/2 Thi/g i/ the 3o/stitutio/ or %a.s of a/2 $tate to the 3o/trar2 /ot.ithsta/di/g.9 3learl2: the 'dmiralt2 a/d )aritime 7urisdictio/ gra/ted to the 3o/gress a/d the 1udiciar2 is 8er2 0road a/d exte/si8e. $o: .hat pro8isio/s .ere made i/ the 3o/stitutio/ to pre8e/t the e/croachme/t of this 'dmiralt2 7urisdictio/ i/to our ,omestic la. ;; the su0sta/ti8e 3ommo/ %a. ;;pursua/t to the ,eclaratio/ of #/depe/de/ce< The a/s.er is i/ 'rticle #: $ectio/ 8: a/d 'rticle #: $ectio/ 4H: 3lause 4 ;; 0ut: first: a little 0ackgrou/d ma2 0e helpful: !egi//i/g as lo/g ago as 465H: the colo/ies had periodicall2 experime/ted .ith credit a/d u/0acked paper as a form of pu0lic mo/e2. The results .ere al.a2s the same ;;gold a/d sil8er coi/ disappeared from circulatio/: commerce stag/ated: u/emplo2me/t gre. 02 leaps a/d 0ou/ds: etc. The .ar for i/depe/de/ce exhi0ited a /e. de8elopme/t i/ the s2stem of credit: 02 the reckless disregard of its 0ou/ds. #/ the .ords of 1oh/ 'dams: 9promises of mo/e2 .ere scattered o8er the la/d alike 02 the $tates a/d 02 the +/ited $tates: u/til 0ills 0ecame as ple/t2 as oak lea8es.9 The results .ere recorded 02 ?eletiah We0ster as follo.s : 9?aper mo/e2 polluted the e>uit2 of our la.s: tur/ed them i/to e/gi/es of oppressio/: corrupted the

7ustice of our pu0lic admi/istratio/: destro2ed the fortu/es of thousa/ds .ho had co/fide/ce i/ it: e/er8ated the trade: hus0a/dr2: a/d ma/ufactures of our cou/tr2: a/d .e/t far to destro2 the moralit2 of our people.9 Ouestio/: What had happe/ed to the domestic: su0sta/ti8e: 3ommo/ %a. fought for i/ the War @or #/depe/de/ce ;; the %a. that esta0lishes a/d preser8es free i/stitutio/s< Te/ 2ears after the ,eclaratio/ of #/depe/de/ce: shortl2 0efore the 3o/stitutio/al co/8e/tio/: Washi/gto/ .rote to )adiso/: 9The .heels of go8er/me/t are clogged: a/d .e are desce/di/g i/to the 8ale of co/fusio/ a/d dark/ess. *o da2 .as e8er more clouded tha/ the prese/t.9 '/d o/ @e0ruar2 3: 4G8G: Washi/gto/ .rote to He/r2 D/ox: 9#f a/2 perso/ had told me that there .ould ha8e 0ee/ such a formida0le re0ellio/ as exists: # .ould ha8e thought him fit for a madhouse.9 The 3o/stitutio/al 3o/8e/tio/ .as co/8e/ed i/ ?hiladelphia: )a2 44: 4G8G a/d &eorge Washi/gto/ .as elected ?reside/t. "a/dolph: &o8er/or of -irgi/ia: dre. atte/tio/ to paper mo/e2 i/ his ope/i/g speech 02 remi/di/g his hearers that the patriotic authors of the co/federatio/ did their .ork 9#/ the i/fa/c2 of the scie/ce of co/stitutio/s a/d of co/federacies: .he/ the ha8oc of paper mo/e2 had /ot 0ee/ foresee/.9 The eighth clause of the se8e/th article: i/ the first draft of the 3o/stitutio/: .as as follo.s : 9The legislature of the +/ited $tates shall ha8e the po.er to 0orro. mo/e2 a/d emit 0ills o/ the credit of the +/ited $tates.9 !2 refusi/g the po.er of issui/g 0ills of credit: the door .as shut: 0ut /ot 0arred: o/ paper mo/e2 02 co/stitutio/al la.. 'lthough 3o/gress .as /ot authorized to issue /otes of the +/ited $tates: the 0orro.i/g clause Ethought a0solutel2 /ecessar2 for emerge/ciesF left a mea/s of 0orro.i/g /otes of a/other e/tit2 i/to circulatio/. Ee.g.: a pri8ate 0a/kF. O/e the 68th of 'ugust: the co/8e/tio/ took steps to remed2 that situatio/ a/d: there02: guara/tee a su0sta/ce for our domestic 3ommo/ %a. to fu/ctio/ o/ matters i/8ol8i/g mo/e2. The first draft of the co/stitutio/ had for0idde/ the states to emit 0ills of credit .ithout the co/se/t of 3o/gress. #/ co/8e/tio/ o/ the 68th: )r. Wilso/ a/d )r. $herma/ mo8ed to i/sert after the .ords 9coi/ mo/e29 the .ords 9/or emit 0ills of credit:9 /or make a/2thi/g 0ut gold a/d sil8er coi/ a te/der i/ pa2me/t of de0ts: a/d i/ their .ords: 9maki/g these prohi0itio/s a0solute.9 )r. $herma/ .e/t o/ to sa2 that he 9thought this a fa8ora0le crises for crushi/g paper mo/e2. #f the co/se/t of the legislature could authorize emissio/s of it: the frie/ds of paper mo/e2: .ould make e8er2 exertio/ to get i/to the legislature i/ order to lice/se it.9 'fter discussio/: )r. Wilso/=s a/d )r. $herma/=s motio/ .as u/a/imousl2 agreed to 02 the co/8e/tio/. The result of this actio/ appears i/ 'rticle #: $ectio/ 4H: 3lause 4. #ts most salie/t feature is 9*o $tate shall make a/2 thi/g 0ut gold a/d sil8er coi/ a te/der i/ pa2me/t of de0ts.9 'fter the co/stitutio/al co/8e/tio/: it took /earl2 a 2ear for the states to ratif2 the

3o/stitutio/ ;; primaril2 0ecause the2 i/sisted o/ certai/ su0sta/ti8e 3ommo/ %a. rights a/d pri/ciples 0ei/g specified i/ the 3o/stitutio/. These rights a/d pri/ciples appear as the first 4H 'me/dme/ts: called the !ill of "ights. 3ommo/ %a.: operati/g o/ mo/e2 of su0sta/ce: 0rought >uick relief as docume/ted 02 &eorge Washi/gto/: #/ a letter: dated 1u/e 43: 4G5H: he .rote to )ar>uis de %a@a2ette: 9(ou ha8e dou0tless 0ee/ i/formed: from time to time: of the happ2 progress of our affairs. The pri/ciple difficulties seem i/ a great measure to ha8e 0ee/ surmou/ted.9 #/ a letter: dated )arch 45: 4G54: he agai/ .rote to %a@a2ette: 9Our cou/tr2: m2 dear sir: is fast progressi/g i/ its political importa/ce a/d social happi/ess.9 O/ 1ul2 45: 4G54: he .rote to 3atheri/e )c3aule2: 9The +/ited $tates e/7o2s a se/se of prosperit2 a/d tra/>uilit2 u/der the /e. go8er/me/t that could hardl2 ha8e 0ee/ hoped for.9 '/d o/ 1ul2 6H: 4G54: he .rote to ,a8id Humphre2: 9Tra/>uilit2 reig/s amo/g the people .ith the dispositio/ to.ards the ge/eral go8er/me/t: .hich is likel2 to preser8e it. Our pu0lic credit sta/ds o/ that high grou/d .hich three 2ears ago it .ould ha8e 0ee/ co/sidered as a species of mad/ess to ha8e foretold. 1+,#3#'"( '3T E4G85F : O/ $eptem0er 64: 4G85: 3o/gress passed the 1udiciar2 'ct. $ectio/ 5 of this 'ct dealt .ith e>uit2: admiralt2 a/d maritime 7urisdictio/s of our courts. 3o/gress said that 9the forms a/d modes of proceedi/g i/ causes of e>uit2 a/d of admiralt2 a/d maritime 7urisdictio/ shall 0e Raccordi/g to the course of 3i8il %a..9 $ectio/ 34 dealt exclusi8el2 .ith the 3ommo/ %a. 7urisdictio/ of the @ederal courts .herei/ 3o/gress said: 9That the la.s of the se8eral $tates: except .here the 3o/stitutio/: treaties or statutes of the +/ited $tates shall other.ise re>uire or pro8ide: shall 0e regarded as rules of decisio/ i/ trials at 3ommo/ %a. i/ the courts of the +/ited $tates i/ cases .here the2 appl2.9 !2 co/gressio/al actio/ i/ 4G56: the form a/d modes of proceedi/g i/ such cases .ere directed to 0e 9accordi/g to the pri/ciples: rules a/d usages: .hich 0elo/g to courts of e>uit2 a/d to courts of 'dmiralt2 respecti8el2: as co/tradisti/guished from courts of 3ommo/ %a..9 Thus: i/ 4G56: 3o/gress recog/ized three separate a/d disti/ct 7urisdictio/s of the federal courtsA >uit2: 'dmiralt2 a/d 3ommo/ %a.. !2 97urisdictio/9 .e mea/ la.ful authorit2 to act o/ the su07ect matter i/8ol8ed i/ a co/tro8ers2: a particular thi/g .ithi/ that su07ect matter: a/d authorit2 to act agai/st a particular perso/ associated .ith the su07ect matter. TH " '" O*%( TH" 1+"#$,#3T#O*$ ;; '*, *O )O" M

'll three of these 7urisdictio/s ha8e cog/iza/ce o8er ci8il matters: as co/tradisti/guished from crimi/al matters: depe/di/g o/ the su07ect matter i/ co/tro8ers2 a/d /ature of the

cause. #f it is a/ actio/ at 3ommo/ %a. properl2 0rought i/to a commo/ la. court: the court is 0ou/d 02 the pri/ciples: rules a/d procedures of 3ommo/ %a.. #f the actio/ is properl2 0rought 0efore a/ >uit2 or 'dmiralt2 court: the court is 0ou/d 02 the pri/ciples: rules a/d procedures of the ci8il la. deali/g .ith the su07ect matter. >uit2 has /o cog/iza/ce o8er crimi/al matters a/d: therefore: i/ crimi/al cases there are o/l2 t.o 7urisdictio/s ;; e8er2 crimi/al case must 0e prosecuted either i/ the 7urisdictio/ of 3ommo/ %a.: or that of the %a. of 'dmiralt2. #/ crimi/al cases: 3ommo/ %a. courts are 0ou/d 02 the pri/ciples: rules a/d procedures of the 3ommo/ %a.. #/ 'dmiralt2 cases: the court is 0ou/d 02 the pri/ciples: rules a/d procedures of 'dmiralt2 a/d )aritime %a.. (ou .ill see: su0se>ue/tl2: that state courts ha8e co/curre/t 7urisdictio/ i/ 0oth 3ommo/ %a. a/d )aritime la. co/cer/i/g certai/ t2pes of cases a/d su07ect matter. (ou also .ill see that i/ these cases: if the su07ect matter or /ature of this cause is )aritime that: e8e/ if it is heard i/ a 3ommo/ %a. court: that court is 0ou/d to appl2 the )aritime %a. to the case. We also .ill sho. that /o 'dmiralt2 court i/ the la/d has a/2 7urisdictio/ to hear 3ommo/ %a. issues. QQQQQQQ3O))O*Q%'WQQQQQQQQ P "ight To Trial !2 1ur2 P 46 1udges E1ur2F P 46 1udges BThe 1ur2C P 3o/trol the trial N 1udge 1ustice of %a. N ,etermi/e 'dmissi0ilit2 of 8ide/ce N 'pplies %a. to @acts N "e/ders -erdict 'ccordi/g To 3o/scie/ce to %a. QQQQQQQ3#-#%Q%'WQQQQQQQQQQQQ P *o "ight to Trial !2 1ur2 P 4 91udge9 E3ha/cellorF P 4 3ha/cellor 3o/trols Trial N 1ur2 is 'd8isor2 to 3ha/cellorTrial N 3ha/cellor ,etermi/es 'dmissi0ilit2 of 8ide/ce N 1ur2 $.or/ to Take the %a. as the 3ha/cellor gi8es it N 1ur2 "e/der -erdict 'ccordi/g to 8ide/ce ?rese/ted

The $upreme 3ourt a/al2zed these t.o sectio/s of the 7udiciar2 act i/ the Hu/tress case i/ 484H: The Hu/tress case .as a li0el i/ perso/am agai/st the o./ers of the steamship Hu/tress. The 3ourt said: 9#/ these: a/d i/ a/alogous cases: the o/l2 >uestio/ that ca/ 0e co/sidered as a/ ope/ o/e is: .hether the2 come .ithi/ that clause of the 3o/stitutio/ that sa2s: the 7udicial po.er of the +/ited $tates shall exte/d to 9all causes of 'dmiralt2 a/d )aritime 7urisdictio/.9 #f the2 do: the/ the origi/al cog/iza/ce of them is 02 the /i/th sectio/ of the 1udiciar2 'ct: gi8e/ to the district court9 .... 9The argume/t: that this clause is co/trolled 02 the $e8e/th 'me/dme/t: .hich secures the right of trial 02 7ur2 i/ all suits at 3ommo/ %a.: .here the 8alue i/ co/tro8ers2 exceeds t.e/t2 dollars: has /o

applicatio/ to the co/stitutio/al gra/tA 0ecause these are /ot suits at 3ommo/ %a.9A '/d: i/ the ,e%o8io 8s. !oit case: 1ustice $tor2 said: 9'/d: the grou/d is made stro/ger 02 the co/sideratio/: that the right of trial 02 7ur2 is preser8ed 02 the co/stitutio/ i/ all suits at commo/ la.: .here the 8alue i/ co/tro8ers2 exceeds t.e/t2 dollarsA a/d 02 the statute: this right is excluded i/ all cases of 'dmiralt2 a/d )aritime 7urisdictio/.9 Here .e ha8e a clear stateme/t: 02 the $upreme 3ourt that there is /o access to 3ommo/ %a. i/ courts of 'dmiralt2. #/ 4836: the $upreme 3ourt of the $tate of ?e//s2l8a/ia 8er2 a0l2 addressed the mea/i/g a/d i/te/t of the Gth ame/dme/t i/ the case of !ai/s 8. The $choo/er 1ames a/d 3atheri/e: as follo.s: 9...02 attempti/g to i/troduce the admiralt2 7urisdictio/ of the ci8il la.: ... a fou/datio/ is laid for i/termi/a0le co/flicts of 7urisdictio/ 0et.ee/ the courts of the $tate a/d the +/io/.9 9#t is 8ai/ to co/te/d that the $e8e/th 'me/dme/t .ill 0e a/2 efficie/t guara/tee for the right: i/ suits at 3ommo/ la.: if a/ 'dmiralt2 7urisdictio/ exists i/ the +/ited $tates: comme/surate .ith .hat is claimed 02 the claima/t i/ this case. #ts assertio/ is: i/ m2 opi/io/: a re/e.al of the co/test 0et.ee/ legislati8e po.er a/d ro2al prerogati8e: the 3ommo/ a/d the 3i8il %a.: stri8i/g for master2A the o/e to secure: the other to take a.a2 the trial 02 7ur2: ... 7udicial po.er must first a//ul the $e8e/th 'me/dme/t: or 7udicial subtl' t ans$o m a suit at 3ommo/ %a.: i/to a case of 'dmiralt2 a/d )aritime 7urisdictio/: 0efore # take cog/iza/ce as such a case as this .ithout a 7ur2.9 Thus: 'dmiralt2 is 3i8il %a.: a/d: o/ce agai/: 3ommo/ %a. is /ot accessi0le i/ courts of 'dmiralt2 ;; a/d: as 1. "eu0e/ 3lark said: there is a co/sta/t ideological co/flict 0et.ee/ 3i8il a/d 3ommo/ %a. for the co/trol of societ2. #/ the preface to his 0ook 9Ho/est )o/e29: ,r. *or0ur/ .rote: 9What a mar8ellous cou/tr2 .as this /e. .orld ;; ') "#3'. #ts coastli/e: dotted .ith deep har0ors: seemed e/dless. #t had great mou/tai/s a/d great ri8ers. There .ere mag/ifice/t forests a/d 8ast fertile plai/s. #ts earth .as rich .ith mi/erals. Those .ho came to li8e i/ this 8erita0le paradise .ere of sturd2 stock. The2 .ere i/dustrious: sa8i/g a/d i/ge/ious. The2 had the 0est go8er/me/t e8er de8ised. Ho. does it happe/ that /o.: after more tha/ three hu/dred 2ears of i/te/se toil: the i/ha0ita/ts of this /atio/ fi/d themsel8es more tha/ te/ trillio/ dollars i/ de0t< The2 ha8e recei8ed /o 0e/efits to 7ustif2 this de0t. To .hom do the2 o.e it< Ho. .ere the claims ac>uired< 's 2ou .ill see: the factual a/s.ers to ,r. *ar0ur/=s >uestio/s: a/d proper applicatio/ of the appropriate la. to these facts: pro8ide us the /ecessar2 fact a/d la. to 0uild a .i//i/g case that ca/ restore our access to 3ommo/ %a.A a/d ca/ restore our allodial la/d titles. #*T"O,+3T#O* O@ TH & O"& "'?? $O3# T(: P @irst $uccessful commu/istic: religious: orga/izatio/ i/ the +/ited $tates. P The societ2 .as desig/ed for profit maki/g Efor someF a/d its formula i/cluded a

co/trolled eco/om2 u/der limited lia0ilit2: .hich: as 2ou .ill see 0efore this prese/tatio/ is o8er: is the same i/gredie/ts of the @ederal "eser8e formula that is ru//i/g this cou/tr2 toda2M This is the formula that 0rought admiralt2 i/la/d a/d has 0arred our access to su0sta/ti8e 3ommo/ %a.. &eorge "app Harmo/2 $ociet2 ; 48HJ E"e: $chri0er 8. "app: ?a. $upreme 3ourt: 3J4F P &eorge "app fou/ded the 9Harmo/2 $ociet29 i/ 48HJ: at Harmo/2: i/ !ea8er 3ou/t2: ?a.: su0se>ue/tl2 mo8ed to Harmo/2 o/ the Wa0ash: i/ the state of #/dia/a: a/d the/ mo8ed to 9 co/om29 i/ !ea8er 3ou/t2: ?a. The /ature of this societ2 .as 0rought to light i/ the case of $chri0er 8. "app i/ 4836. This case .as a/ actio/ of accou/t 0rought 02 1aco0 $chri0er: admi/istrator of ?eter $chri0er: deceased: agai/st &eorge "app a/d others: doi/g 0usi/ess i/ compa/2 u/der the /ame of Harmo/2 $ociet2. To sustai/ the actio/: the plai/tiff pro8ed 02 testimo/2 that the Harmo/2 $ociet2 possessed a great deal of .ealth i/ the form of perso/al propert2: real propert2: factories: etc. #t .as a pool of propert2. Wit/ess: ,r. $mith: o/ce a mem0er of the associatio/ stated: 9The2 i/te/ded to make mo/e2 .he/ the2 e/tered i/to itA it .as a part of their o07ect. # 0elie8e there .ere 'rticles at Harmo/2: 0ut e8er2o/e .as /ot o0liged to sig/ it. >ual rights: e>ual e/7o2me/ts a/d e>ual profits. ; "app said it should /ot 0e i/corporated: for that .ould take too much po.er from him. "app .as /ot elected. He assumed the po.er that )oses a/d 'aro/ had. #f a/2o/e .ould /ot do .hat he said: he .ould sa2: RWhat ha8e 2ou to do a0out it< # ha8e the po.er ;; # could crush 2ou. 'll 2ou ha8e to do is o0e2.= He got .orse as he got .ealth2.9 &eorge "app .as a preacher ;; a/d a 8er2 persuasi8e o/e. 'dam $hell2 testified o/ 0ehalf of the plai/tiff respecti/g the first articles of associatio/ o/ the Wa0ash. 9The people .ere directed to come i/ compa/ies: o/e of them read it a/d the rest sig/ed it. 's to the article sig/ed at co/om2: "app made a lo/g speech. $aid a/2 o/e .ho .ould sig/ it .ould ha8e his /ame .ritte/ i/ the %am0=s !ook of %ife. #f the2 did /ot: their /ames .ould 0e 0lotted out: a/d god .ould ask him a0out it.9 ,efe/da/ts: to sustai/ the issue o/ their part: produced i/ e8ide/ce the articles of associatio/. $ome perti/e/t excerpts are as follo.s: 'rticle 4: We the u/dersig/ed: for oursel8es a/d our heirs: executors a/d admi/istrators: do here02 gi8e: gra/t a/d fore8er co/8e2: to the said &eorge "app a/d his associates: a/d their heirs: a/d assig/s: all our propert2...for the 0e/efit of said associatio/ or commu/it2. 'rticle 6: We do further co8e/a/t a/d agree to a/d .ith the said &eorge "app a/d his associates: that .e .ill se8erall2 su0mit faithfull2 to the la.s a/d regulatio/s of said commu/it2: ...therefore holdi/g oursel8es 0ou/d to promote the i/terest a/d .elfare of the said commu/it2: /ot o/l2 02 the la0or of our o./ ha/ds: 0ut also 02 that of our childre/: our families a/d all others .ho /o. are or hereafter ma2 0e u/der our co/trol. 'rticle 3: ...that .e .ill /e8er claim or dema/d either for oursel8es: our childre/: or for a/2o/e 0elo/gi/g to us: directl2 or i/directl2: a/2 compe/satio/: .ages or re.ard .hate8er: for our: or their la0or or ser8ices: re/dered to the said commu/it2: ... 'rticle J: The said &eorge "app a/d his associates further agree to suppl2 the u/dersig/ed se8erall2 .ith all the /ecessaries of life

...a/d to such exte/t as their circumsta/ces ma2 re>uire. 'rticle 6: #f a/2 of the u/dersig/ed...shoul! with! aw $ om the association) then the sai! Geo #e +a(( an! his associates a# ee to e$un! to him o them the &alue o$ all such ( o(e t' without inte est) as he o the' ma' ha&e b ou#ht into the communit'... $aid 8alue to 0e refu/ded...as the said &eorge "app a/d his associates shall determi/e. The court ruled for defe/da/t &eorge "app o/ the 0asis that 9a/ associatio/ for the purpose expressed is prohi0ited /either 02 statute /or the commo/ la..9 '/d the court also stated: 9#t is supposed: ho.e8er: that as the i/testate had po.er: 02 the articles: to secede from the societ2 a/d take out .hate8er he 0rought i/to it: the successor to his perso/al rights ma2 exercise it as his represe/tati8e. $uch: ho.e8er: are /ot the terms of the articles... The right of accessio/: therefore: is i/tra/smissa0le.9 The court also stated that 9the la. k/o.s /o duress 02 ad8ise a/d persuasio/9: a/d: therefore there .as /o fraud i/ the i/duceme/t to sig/ the article. #/ a/al2zi/g this case: .e see that: 4. The complai/t .as 0rought u/der the 7urisdictio/ of commo/ la.. 6. The plai/tiff lost 0ecause of the commo/ la. a/d co/stitutio/all2 protected right to co/tract. 3. +/der the commo/ la.: the o/l2 .a2 to 0reak the co/tract .as to pro8e fraud. 4. 'ccordi/g to testimo/2: the mem0ers of the associatio/ 9i/te/ded to make mo/e2 .he/ the2 e/tered i/to it.9 The .it/esses did /ot explai/ ho. the2 expected to 9make mo/e29 u/der the terms of the co/tract. The o/l2 reaso/a0le expla/atio/ is that the2 .ere gam0li/g that the2 .ould 0e last sur8i8ors i/ the 'ssociatio/ ;; a/d share i/ the distri0utio/ of assetsA a/d/or the2 expected to 0e/efit from limited lia0ilit2 02 shari/g a/2 loses of the associatio/ .ith the other mem0ers. %ast sur8i8ors take all is a .ageri/g polic2: a/d mutual shari/g of losses is i/sura/ce. #/ a/al2zi/g the &eorge "app 'ssociatio/ formula: .e see: 4. The co/tract co/tai/ed a forfeiture clause. E)em0ers .ould 9/e8er claim compe/satio/A9 upo/ .ithdra.al: 8alue of propert2 .ould 0e refu/ded 9.ithout i/terest9 ;; The right of accessio/ of propert2 do/ated to the 'ssociatio/ is i/tra/smissa0le to heirs of the decede/t. 6. "app a/d his associates had /o risk as the i/surer. The2 /ot o/l2 had /othi/g to lose i/ the e8e/t of death of a co/tri0utor a/d mem0er ;; 0ut gai/ed all propert2 do/ated .ith /o possi0le claim from heirs of the decede/t. 3. #t .as a co/trolled eco/om2 ;; u/der the exclusi8e co/trol of &eorge "app a/d his associates. 4. There .as /o accou/ta0ilit2 to mem0ers of the 'ssociatio/... (ou .ill see: later o/: that if $chri0er had take/ these facts i/to a/ 'dmiralt2 court a/d applied the proper 'dmiralt2 %a. to these facts ;; he should ha8e .o/ his case.

O/e additio/al /ote o/ &eorge "app: &eorge "app co/ti/ued to gai/ afflue/ce a/d prestige ;; a/d dig/itaries came from all o8er the .orld to his ma/sio/ at 9eco/om29 to mar8el at the fa/tastic success of his societ2. Wh2 should/=t he 0e successful< !2 co/tract: he had sla8e la0or: do/atio/s of u/told .ealth from mem0ers .ho: if the2 chose to .ithdra. 0efore the2 died: could o/l2 get 0ack the e>ui8ale/t of .hat the2 had do/ated .ithout i/terestA a/d: if the2 died as a mem0er: the propert2 a/d assets do/ated remai/ed i/ the societ2 as lo/g as it existed. &eorge "app died i/ 484GA ho.e8er: the societ2 .e/t o/. 8ide/ce .ill sho. that the treme/dous .ealth accumulated 02 this societ2 .as su0se>ue/tl2 used to fashio/ a &eorge "app $ociet2 o/ a much larger scale ; .ith pla/s to ultimatel2 e/compass the .orld i/ a 9superstate9 co/trolled a/d go8er/ed 02 merca/tile i/terests: u/der the la. of admiralt2 ;; a superstate .herei/ all the propert2 i/ the .orld: a/d all the people o/ space;ship 9earth9: are pledged to the 0e/efit of this .orld;.ide merca/tile associatio/. The 9*e. World Order< ,e%O-#O -$. !O#T B484JC: #/ 484J: i/ the case of ,e%o8io 8. !oit: the $upreme 3ourt ruled the follo.i/g: BOpi/io/ .ritte/ 02 1ustice $tor2C 9The 'dmiralt2: from the highest a/ti>uit2: has exercised a 8er2 exte/si8e crimi/al 7urisdictio/: a/d pu/ished offe/ses 02 fi/e a/d impriso/me/t. The cele0rated i/>uisitio/ at Ouee/s0orough: i/ the reig/ of d.ard lll: .ould alo/e 0e decisi8e. '/d: e8e/ at 3ommo/ %a. it had 0ee/ ad7udged: that the admiralt2 might fi/e for co/tempt... 'ppeal: a/d /ot a Writ of rror: lies for its decrees.. (et: it is co/ceded o/ all sides: that of maritime h2pothecatio/s: the 'dmiralt2 has 7urisdictio/.... The 7urisdictio/ of the 'dmiralt2 depe/ds: or ought to depe/d: as to co/tracts upo/ the su07ect matter: i.e. .hether maritime or /otA a/d as to torts: upo/ localit2... *either the 1udicial 'ct /or the 3o/stitutio/: .hich it follo.s: limit the 'dmiralt2 1urisdictio/ of the ,istrict 3ourt i/ a/2 respect to place. #t is 0ou/ded o/l2 02 the /ature of the cause o8er .hich it is to decide. O/ the .hole: # am: .ithout the slightest hesitatio/: read2 to pro/ou/ce: that the delegatio/ of cog/iza/ce of Rall ci8il cases of 'dmiralt2 a/d )aritime 7urisdictio/= to the 3ourts of the +/ited $tates comprehe/ds all maritime co/tracts: torts: a/d i/7uries. The latter 0ra/ch is /ecessaril2 0ou/ded 02 localit2A the former exte/ds o8er all co/tracts: E.heresoe8er the2 ma2 0e made or executed: or .hatsoe8er ma2 0e the form of the stipulatio/F .hich relate to the /a8igatio/: 0usi/ess or commerce of the sea. The /ext i/>uir2 is: .hat are properl2 to 0e deemed 9maritime co/tracts.9 Happil2: i/ this particular there is little room for co/tro8ers2. 'll ci8ilia/s a/d 7urists agree: that i/ this appellatio/ are i/cluded: amo/g other thi/gs: mari/e h2pothecatio/s ...a/d: .hat is more material to our prese/t purpose: policies of i/sura/ce... )2 7udgeme/t accordi/gl2 is: that policies of i/sura/ce are .ithi/ Ethough /ot exclusi8el2 .ithi/F the 'dmiralt2 a/d )aritime 7urisdictio/ of the +/ited $tates.9 #*T"O,+3#*& ?"O@ $$O" @" , "#3H %#$T:

We .ill /o. address the su07ect of ,r. %ist=s letters. The letters of ,r. %ist: a/d the eco/omic theories he espoused i/ those letters: .ill 0ecome 8er2 sig/ifica/t to 2ou .he/ 2ou see that his eco/omic theories are 0ei/g applied agai/st 2ou toda2 02 the @ederal "eser8e ;; a/d are: there02: co/trolli/g e8er2 aspect of 2our life. ?rofessor %ist represe/ted the societ2 of &erma/ mercha/ts a/d ma/ufacturers for the purpose of o0tai/i/g a &erma/ s2stem of /atio/al eco/om2. His pla/s of reform pro8i/g o0/oxious to the go8er/me/t: he .as accused of high treaso/ a/d thro./ i/ priso/: a/d .as su0se>ue/tl2 exiled from &erma/. He settled i/ ?e//s2l8a/ia a/d studied a/d lectured o/ the doctri/es of political eco/om2. ,uri/g his atte/tio/ to that su07ect: he 8olu/taril2 addressed a series of letters .hich .ere pu0lished i/ the *atio/al &azette. ?rofessor %ist .as also a mem0er of the &eorge "app Harmo/2 $ociet2. #/ his first letter he tells us .hat he mea/s 02 the term 9*atio/al co/om2.9 ?.$. The author=s /egati8e opi/io/ of %ist=s eco/omics is /ot shared 02 %. %a"ouche: eco/omist a/d a/ ad8ocate of the origi/al 'merica/ $2stem. 9*atio/al co/om29 teaches 02 .hat mea/s a certai/ /atio/: i/ her particular situatio/: ma2 direct a/d regulate the eco/om2 of i/di8iduals: a/d restrict the eco/om2 of ma/ki/d: either to pre8e/t foreig/ restrictio/s a/d foreig/ po.ers .ithi/ herself:....ithout restricti/g the eco/om2 of i/di8iduals a/d the eco/om2 of ma/ki/d more tha/ the .elfare of the people permits.9 #t is commo/ k/o.ledge that .e ha8e a 9*atio/al co/om29 toda2 that directs a/d regulates the eco/om2 of i/di8iduals: a/d that of ma/ki/d ;; a/d that this eco/om2 is co/trolled a/d regulated 02 the @ederal "eser8e $2stem. $.ift 8. T2so/: 46 ?eters 4 E4846F #/ 4846: i/ the case of $.ift 8. T2so/: the $upreme 3ourt held that there .as a ge/eral federal commo/ la. Ei.e.: at that time: access to su0sta/ti8e commo/ la. existed at the federal le8elF. %imited %ia0ilit2 'ct ; 48J4 O/ )arch 3: 48J4: the 3o/gress of the +/ited $tates e/acted the %imited %ia0ilit2 'ct: Ecodified at 46 +$3 484;485F: as ame/ded i/ 48GJ: 48GG: 453J: 4536: a/d the 'ct of 4884 co8er the e/tire su07ect of limitatio/s. The ?urpose of this act .as to limit the lia0ilit2 for the pa2me/t of de0ts of perso/s .ho .ere ship o./ers i/8ol8ed i/ maritime commerce. This act .as the result of a +. $. $upreme 3ourt decisio/ titled: 9The *e. 1erse2 $team *a8igatio/ 3o. 8s. the )ercha/ts !a/k: 6 Ho.ard 346: E4848F.9 #/ the *e. 1erse2 $team *a8. 3ase: the high court ruled that u/der the 3ommo/ %a.: ship o./ers .ere lia0le for the acts of their ship masters. #/ other .ords: if a part2 .ere to ship goods o/ 0oard a ship a/d somethi/g happe/ed to the goods such as 0ei/g destro2ed or damaged 02 the perils of the sea: the ship o./er .as respo/si0le to the o./er of the goods. The ship o./er must pa2 to the o./er of the goods the amou/t the goods .ere .orth. #f the ship o./er did/=t pa2 the de0t: the o./er of the goods could sue the ship o./er a/d

collect. #f the ship o./er failed to pa2: the creditor could the/ file a lie/ o/ the ship .hich .as called a maritime lie/ .hich does /ot re>uire possessio/ of the o07ect. This 'ct specificall2 gi8es limited lia0ilit2 o/ shipme/ts of 90ills of a/2 0a/k or pu0lic 0od2.9 'merica .as fou/ded upo/ )aritime or 'dmiralt2 %a. 0ecause shippi/g .as the o/l2 mea/s of commerce at the fou/di/g of the cou/tr2. The co/gress decided i/ 48J4 that: as a result of the *e. 1erse2 $team *a8. 3ase: perso/s .ould /o lo/ger 0e dra./ i/to o./ership of ships 0ecause of the lia0ilit2 i/8ol8ed. $hippi/g o/ the high seas is 8er2 risk2 especiall2 at that period of time. 'fter the %imited %ia0ilit2 'ct .as e/acted B4885C: the +.$. $upreme 3ourt i/ !utler 8s. !osto/ S $a8a//ah $teamship 3o.: 43H +.$. J6G: ruled as follo.sA 9!ut it is e/ough to sa2 that the rule of limited respo/si0ilit2 is /o. our maritime rule. #t is the rule 02 .hich through the 'ct of 3o/gress .e ha8e a//ou/ced that .e propose to admi/ister 7ustice i/ maritime cases.9 9The rule of limited lia0ilit2 prescri0ed 02 the 'ct of 48J4 is /othi/g more tha/ the old maritime rule admi/istered i/ courts of admiralt2 i/ all cou/tries except /gla/d from time immemorial a/d if this .ere /ot so: the su07ect matter itself is o/e that 0elo/gs to the departme/t of )aritime %a..9 To/ti/e #/sura/ce ; 4868 #/ order to e8ade the usur2 la.s .hich had pre8e/ted the gro.th of a fu/ded s2stem of /atio/al i/sura/ce: go8er/me/ts had fre>ue/tl2 resorted to the issue of a//uities a/d child e/do.me/ts as a mea/s of raisi/g fu/ds. The to/ti/e .as a some.hat later de8elopme/t: ha8i/g 0ee/ put i/to operatio/ i/ @ra/ce duri/g the 2ear 4685. #t took its /ame from that of its origi/ator: %ore/zo To/ti: a *eopolita/ 02 0irth: .ho .as attracted to ?aris 02 the regime of )azari/. #/ its origi/al form the to/ti/e .as a loa/: 9#/ .hich the premium .as /e8er to 0e repaid: 0ut the e/tire i/terest o/ the loa/ .as to 0e di8ided each 2ear amo/g the sur8i8ors or the origi/al su0scri0ers.9 The chief characteristic: a/d trademark: of to/ti/e is that the pool of assets is di8ided amo/g the sur8i8ors: at the optio/s of those su0scri0ers .ho dropped out: or did /ot sur8i8e u/til the time for distri0utio/ had arri8ed. That is a .ageri/g polic2: 7ust like the &eorge "app $ociet2. The >uita0le %ife #/sura/ce 3ompa/2: i/ 4868: i/troduced the deferred di8ide/d s2stem: .hich .as reall2 a/ applicatio/ of the to/ti/e pri/ciple. The most serious fla. i/ the deferred di8ide/d s2stem .as the i/a0ilit2 of the i/sured to compel a/ accou/ti/g. The ge/eral rule is that the polic2 holder is /ot e/titled to compel the compa/2 to accou/t for di8ide/ds. *or ca/ the polic2holder 9compel the distri0utio/ of the surplus fu/d i/ other ma//er or at a/2 time: or i/ a/2 other amou/ts tha/ that pro8ided for i/ the co/tract.9 's stated i/ the report of the 'rmstro/g 3ommittee: 9the pla/ of deferri/g di8ide/ds for

lo/g periods...has u/dou0tedl2 facilitated large accumulatio/s: pro8idi/g appare/tl2 a0u/da/t mea/s for dou0tful uses o/ the o/e ha/d: .hile co/ceali/g o/ the other the 0urde/ imposed upo/ the polic2 holders...9 'ccordi/g to &eorge %. 'rmhei/: #/structor i/ #/sura/ce at the +/i8ersit2 of ?e//s2l8a/ia: 9 ...deferred di8ide/ds .ere prohi0ited 02 la. i/ the legislatio/ E?a.F of 45H6 a/d su0se>ue/t 2ears. Thus came to a/ e/d a s2stem .hich i/ 4858 had superseded to a 8er2 large exte/t that of a//ual di8ide/ds: a/d .hich i/ 454J seemed a/ti>uated.9 Ouestio/ : What made it 9a/ti>uated9 i/ 454J< 'ccordi/g to )r. 'rmhei/: it .as outla.ed i/ 45H6: 0ut did/=t seem a/ti>uated u/til 454JM 1oh/ D. Tar0ox: The commissio/er of #/sura/ce for the $tate of )assachusetts had this to sa2 a0out to/ti/e i/ his a//ual report: 9The false idea of life i/sura/ce as i/8estme/t 0egat the e>uall2 false co/ceptio/ of life i/sura/ce as a 0et: a/d the latter ga8e 0irth to the moder/ to/ti/e: .hich is a .ager.9 9...#/ the to/ti/e the forfeitures go to e/rich the i/di8idual sur8i8ors of the special class of polic2 holders .ho e/ter the compact: co/stituti/g a compa/2 lia0ilit2 i/stead of a compa/2 asset: for the protectio/ of its polic2 o0ligatio/s... The stake pla2ed for: rather tha/ the game itself: co/stitutes the chief offe/se. Our la. co/dem/s: for0ids: a/d makes 8oid the co/tract of forfeiture.9 9's .as trul2 testified 0efore the committee of the *e. (ork 'ssem0l2: i/ 48GG: ... the to/ti/e polic2 is take/ for purposes of i/8estme/t 02 a set of me/ .ho .ould /ot i/sure their li8es at all. The i/duceme/t to the i/8estme/t is...the expected profits from forfeitures...9 9'side from the moral >ualit2 of the matter: ;;co/cer/i/g .hich # .ai8e co/tro8ers2: ;; the co/sideratio/s .hich the pu0lic aspect seems to me pri/cipall2 to i/8ite are theseA @irst: .hether it is prude/t to make of our i/sura/ce compa/ies great 0a/ki/g esta0lishme/ts:...a/d: seco/d: .hether a/ i/stitutio/ orga/ized as the life i/sura/ce s2stem .as: for a 0e/e8ole/t a/d u/selfish use: shall 0e com0i/ed .ith e/terprises of selfish speculatio/ as the to/ti/e u/de/ia0l2 is.9 # am stro/gl2 persuaded of the implicitl2 a/d positi8e da/ger of mag/if2i/g the 0a/ki/g feature of life i/sura/ce i/stitutio/s: to accommodate moder/ pla/s of to/ti/e speculatio/ a/d e/do.me/t i/8estme/t. 1oh/ Tar0ox .as clearl2 sa2i/g that: at that time: there .ere moder/ pla/s to make i/sura/ce compa/ies Especificall2: to/ti/e i/sura/ce compa/iesF great 0a/ki/g i/stitutio/s. The to/ti/e had 0ee/ declared u/la.ful i/ se8eral states a/d these people k/e. that the2 had to do somethi/g to protect their mo/e2. The2 0rought o8er the so/ of o/e of the 0ig 0a/ki/g families from urope k/o./ as ?aul War0urg: from the House of War0urg: that dates 0ack to the Ha/seatic %eague of mercha/ts. '/d: it .as he .ho sold the 'merica/ pu0lic o/ creati/g a @ederal "eser8e !a/k: so that there .ould/=t 0e a/2 more pa/ics a/d depressio/s: that the2 .ould 0e a0le to e8e/ out

the eco/om2 02 co/trol of the mo/e2 suppl2. !2 this o/e 'ct: the 'merica/ people lost their i/depe/de/ce. #t: i/ fact: .as the opposite of the !ritish surre/der at (orkto./. &i8i/g co/trol of our credit a/d mo/e2 suppl2 to a pri8ate 0a/ki/g orga/izatio/: 02 the /ame of the @ederal "eser8e: .as the surre/der of our i/depe/de/ce. 3o/gress passed the @ederal "eser8e 'ct o/ ,ecem0er 63: 4543 .herei/ it made @ederal "eser8e *otes de0t o0ligatio/s to the +/ited $tates: a/d authorized the @ederal "eser8e to 0e the issuers of these de0t o0ligatio/s. The @ederal "eser8e 'ct also stipulated that the i/terest o/ the de0t Eto the @ederal "eser8e as a maritime le/der to the +/ited $tatesF .as to 0e paid i/ gold. *o pro8isio/ .as made i/ the 'ct for pa2i/g off the pri/ciple. There .as also a pro8iso that the people had 6H 2ears to challe/ge the 'ct ... *OT : 4. +/der the la. of *atio/s: a/ actio/ o/ Ouo Warra/to ca/ 0e 0rought .ithi/ 6H 2ears. Ouo Warra/to: i/ this case: .ould 0e a/ actio/ i/ the 3ourt of 'dmiralt2 dema/di/g 9!2 .hose 'uthorit29: a/d proof of that authorit2: the 'ct .as impleme/ted. 6. 9?u0lic polic29 is part a/d parcel of the %a. of *atio/s. The 'ct .as /e8er challe/ged i/ a court of proper 7urisdictio/ Eadmiralt2F: pro0a0l2 0ecause a/2o/e .ho .a/ted: or tried: to challe/ge it did/=t k/o. ho.. O/ 1u/e 6H: 4536: i/ the midst of the &reat ,epressio/: 3o/gressma/ %ouis T. )c@adde/ addressed the House of "eprese/tati8es o/ this su07ect. "eprese/tati8e )c@adde/ had pre8iousl2 ser8ed as preside/t of the @irst *atio/al !a/k: 3a/to/: ?a.A a/d later he ser8ed as chairma/ of the 3ommittee o/ !a/ki/g a/d 3urre/c2. @ollo.i/g are selected excerpts from his address: 9$ome people thi/k the @ederal "eser8e !a/ks are +/ited $tates &o8er/me/t #/stitutio/s. The2 are /ot go8er/me/t i/stitutio/s. The2 are pri8ate credit mo/opolies .hich pre2 upo/ the people of the +/ited $tates for the 0e/efit of themsel8es a/d their foreig/ customersA9 9The2 should /ot ha8e foisted that ki/d of curre/c2: /amel2 a/ asset curre/c2: o/ the +/ited $tates &o8er/me/t. The2 should /ot ha8e made the go8er/me/t lia0le o/ the pri8ate de0ts of i/di8iduals a/d corporatio/s a/d: least of all o/ the pri8ate de0ts of foreig/ers.9 9The @ederal "eser8e *otes: therefore: i/ form ha8e some of the >ualities of go8er/me/t paper mo/e2: 0ut: i/ su0sta/ce: are almost purel2 asset curre/c2 possessi/g a go8er/me/t guara/t2 agai/st .hich co/ti/ge/c2 the go8er/me/t has made /o pro8isio/ .hate8er.9 9)r. 3hairma/: there is /othi/g like the @ederal "eser8e pool of co/fiscated 0a/k deposits i/ the .orld. #t is a pu0lic trough of 'merica/ .ealth...9 9# see /o reaso/ .h2 the 'merica/ taxpa2ers should 0e he.ers of .ood a/d dra.ers of .ater for the uropea/ a/d 'siatic customers of the @ederal "eser8e !a/ks.9 9#s /ot it high time that .e had a/ audit of the @ederal "eser8e !oard a/d the @ederal "eser8e !a/ks a/d a/ exami/atio/ of all our go8er/me/ts 0o/ds a/d securities a/d pu0lic mo/ies i/stead of allo.i/g the corrupt a/d disho/est @ederal "eser8e !oard a/d the @ederal "eser8e !a/ks to speculate .ith those securities a/d this cash i/ the /otorious ope/ discou/t market of *e. (ork 3it2< 9 9 8er2 effort has 0ee/ made 02 the @ederal "eser8e !oard to co/ceal its po.er 0ut the truth is the @ederal "eser8e !oard has usurped the &o8er/me/t of the +/ited $tates.9 9)r. 3hairma/: .he/ the @ederal "eser8e 'ct .as passed the people of the +/ited $tates did /ot percei8e that a .orld s2stem .as 0ei/g set up here that the +/ited $tates .as to 0e lo.ered to the positio/ of a coolie cou/tr2...a/d .as to suppl2 fi/a/cial po.er to a/

i/ter/atio/al superstate ;; a superstate co/trolled 02 i/ter/atio/al 0a/kers a/d i/ter/atio/al i/dustrialists acti/g together to e/sla8e the .orld for their o./ pleasure.9 3o/gressma/ Wright ?atma/: of the House !a/ki/g a/d 3urre/c2 3ommittee said i/ 45J6: 9#/ fact there has /e8er 0ee/ a/ i/depe/de/t audit of either of the 46 0a/ks of the @ederal "eser8e !oard that has 0ee/ filed .ith the 3o/gress .here a )em0er .ould ha8e a/ opportu/it2 to i/spect it. The &e/eral 'ccou/ti/g Office does /ot ha8e 7urisdictio/ o8er the @ederal "eser8e.9 Ouestio/: Wh2 does /ot the &e/eral 'ccou/ti/g of the +/ited $tates ha8e 7urisdictio/ o8er the @ederal "eser8e to dema/d a/ accou/ti/g< The a/s.er is that accou/ta0ilit2 of the @ederal "eser8e is /ot i/ the co/tract: the @ederal "eser8e 'ct: 7ust as it .as /ot i/ the co/tract of the &eorge "app $ociet2 or to/ti/e i/sura/ce policies. The @ederal "eser8e 'ct pro8ides for accou/ta0ilit2 of 9mem0er 0a/ks:9 !ut: 02 defi/itio/: i/ the 'ct itself: the @ederal "eser8e 0a/ks are /ot 9mem0er 0a/ks9 a/d: therefore are exempt from accou/ta0ilit2 ;; 02 co/tract. 3o/gressma/ )c@adde/ a/d 3o/gressma/ ?atma/: 0oth experts i/ 0a/ki/g a/d fi/a/ce: did /ot u/dersta/d this. Ho. ma/2 se/ators a/d represe/tati8es that sig/ed the @ederal "eser8e 'ct i/ 4543: do 2ou suppose: u/derstood .hat the2 .ere sig/i/g< *ot o/l2 .ith respect to this issue: 0ut others that ha8e 0ee/ raised from time to time< What a0out the /umerous attempts to audit @ort D/ox<< The @ederal "eser8e 'ct stipulates that gold o./ed 02 the @ederal "eser8e ma2 0e stored i/ storage facilities of the +/ited $tates. *o.: if 3o/gress ca//ot compel a/ accou/ti/g for @ort D/ox: .ho: do 2ou suppose o./s the gold< *o.: .e ma2 ask oursel8es a/other >uestio/ at this poi/t ;; #s the @ederal "eser8e a maritime le/der: or is it a/ i/sura/ce u/der.riter: to +/ited $tates< $ome additio/al i/formatio/ from a/ ssa2 o/ )aritime %oa/s: ma2 help us decide this >uestio/: 9The co/tract of maritime loa/ approaches more /earl2 to that of #/sura/ce. There is a stro/g a/alog2 0et.ee/ them. #/ their effects the2 are co/strued o/ the same pri/ciples.9 9#/ o/e co/tract: the le/der 0ears the sea risks: i/ the other: the u/der.riter.9 9#/ the o/e: the maritime i/terest is the price of the perilA a/d this term correspo/ds .ith the premium .hich is paid o/ the other.9 $o .e see that it reall2 is immaterial: u/der )aritime %a.: .hether the @ederal "eser8e is thought of as a maritime le/der: or as a/ i/sura/ce u/der.riter: to the +/ited $tates. #/ either case the le/der: or u/der.riter: 0ears the risks ;;a/d the maritime la.s compelli/g performa/ce i/ pa2i/g the i/terest: or premium: are o/e a/d the same. 'lso: i/ either case: assets ca/ 0e h2pothecated as securit2 for the price of the peril. ...speaki/g of risk: let=s .ee .hat risk the @ederal "eser8e is i/curri/g as le/der: or u/der.riter: to the +/ited $tates i/ excha/ge for +/ited $tates $ecurities: )ari/er ccles: former chairma/ of the @ederal "eser8e !oard: held the follo.i/g excha/ge .ith 3o/gressma/ ?atma/ 0efore the House !a/ki/g a/d 3urre/c2 3ommittee o/ $eptem0er 3H: 4544:

" Con# essman Patman./ % Eccles) how !i! 'ou #et the mone' to bu' those two billions o$ #o&e nment secu ities?. " / % Eccles.We c eate! it%. Patman" .0ut o$ what?. " / % Eccles.0ut o$ the i#ht to issue c e!it mone'%. '/d: from further testimo/2 from the @ederal "eser8e itself: #/ a pu0licatio/ from the @ederal "eser8e !a/k of 3hicago: e/titled 9T.o @aces of ,e0t:9 ;; 93urre/c2 is so .idel2 accepted as a medium of excha/ge that most people do /ot thi/k of it as de0t.9 #/ the 3hicago 0a/k pu0licatio/ e/titled 9)oder/ )o/e2 )echa/ics:9 .e fi/d: 9*either paper curre/c2 /or deposits ha8e 8alue as commodities. #/tri/sicall2: a dollar 0ill is 7ust a piece of paper. ,eposits are merel2 0ook e/tries. 3oi/s do ha8e some i/tri/sic 8alue as metal: 0ut for less tha/ their face amou/t.9 9What: the/ makes these i/strume/ts;;checks: paper mo/e2: a/d coi/s ;; accepta0le at face 8alue i/ pa2me/t of all de0ts a/d for other mo/etar2 uses< )ai/l2: it is the co/fide/ce people ha8e that the2 .ill 0e a0le to excha/ge such mo/e2 for real goods a/d ser8ices .he/e8er the2 choose to do so.9 93o/fide/ce i/ these forms of mo/e2 also seems to 0e tied i/ some .a2 to the fact that assets exist o/ the 0ooks of the go8er/me/t a/d the 0a/ks e>ual to the amou/t of the mo/e2 outsta/di/g: e8e/ though most of these assets are /o more tha/ pieces of paper Esuch as customer=s promissor2 /otesF: a/d it is .ell u/derstood that mo/e2 is /ot redeema0le i/ them.9 )oder/ )o/e2 )echa/ics pu0licatio/ from 3hicago: o/ce agai/: 9,eposits are merel2 0ook e/tries...dema/d deposits are lia0ilities of commercial 0a/ks. The 0a/ks sta/d read2 to co/8ert such deposits i/to curre/c2 or tra/sfer their o./ership at the re>uest of depositors.9 @rom the @ederal "eser8e 0a/k of $t. %ouis "e8ie.: 9!ut .hat i/duces the /o/;0a/ki/g pu0lic to accept lia0ilities of pri8ate: profit;maki/g i/stitutio/s such as 0a/ks<9 9The decrease i/ purchasi/g po.er i/curred 02 holders of mo/e2 due to i/flatio/ imparts gai/s to the i/surers of mo/e2....9 9The gai/s .hich accrue to issuers of mo/e2 are deri8ed from the differe/ce 0et.ee/ the costs of issui/g mo/e2 a/d the i/itial purchasi/g po.er of /e. mo/e2 i/ circulatio/. $uch gai/s are called =seig/iorage=. #f the goods a/d ser8ices for .hich the issuer excha/ges mo/e2 ha8e a market 8alue greater tha/ that of resources used to produce the mo/e2: the/ the issurer recei8es a /et gai/.9 @rom a 0ook e/titles 9The @ederal "eser8e $2stem ; #ts ?urposes a/d @u/ctio/s:9 pu0lished 02 the @ederal "eser8e !oard i/ 4535: 9@ederal "eser8e !a/k 3redit resem0les 0a/k credit i/ ge/eral: 0ut u/der the la. it has a limited a/d special use ;; as a source of mem0er 0a/k reser8e fu/ds. #t is itself a form of mo/e2 authorized for special purposes: co/8erti0le i/to other forms of mo/e2: co/8erti0le therefrom: a/d readil2 co/trolla0le as to amou/t. @ederal "eser8e !a/k credit: therefore: as alread2 stated: does /ot co/sist of fu/ds that the "eser8e authorities 9get9 some.here i/ order to le/d:

0ut co/stitutes fu/ds that the2 are empo.ered to 3" 'T .9Eemphasis addedF #/ his /otes e/titled 9' ?rimer o/ )o/e2:9 3o/gressma/ ?atma/ tells that upo/ heari/g that @ederal "eser8e !a/ks hold a large amou/t of cash: he .e/t to t.o of its regio/al 0a/ks. He asked to see their 0o/ds. He .as led i/to 8aults a/d sho./ great piles of go8er/me/t 0o/ds upo/ .hich the people are taxed for i/terest )r. ?atma/ the/ asked to see their cash. The 0a/k officials seemed co/fused. Whe/ )r. ?atma/ repeated the re>uest: the2 sho.ed him some ledgers a/d 0a/k checks. )r. ?atma/ .ar/s us to remem0er that: 9The cash: i/ truth: does /ot exist a/d /e8er has existed. What .e call Rcash reser8es= are simpl2 0ookkeepi/g credits e/tered upo/ the ledgers of the @ederal "eser8e !a/ks. These credits are created 02 the @ederal "eser8e !a/ks a/d the/ passed alo/g through the 0a/ki/g s2stem.9 $o: 02 the testimo/2 of the @ederal "eser8e itself: .e see: 4. #t creates mo/e2 out of thi/ air ;; at /o cost or risk to the @ederal "eser8e $2stem ;; from its right to issue credit: gra/ted i/ the @ederal "eser8e 'ct. 6. #t gai/s from the i/flatio/ it creates. 3. )o/e2 is /ot redeema0le i/ its lia0ilities. 4. ,ema/d deposits are lia0ilities of 0a/ks. J. @ederal "eser8e *otes are lia0ilities of @ederal "eser8e. 6. #ts gai/s: as issuers of credit mo/e2: are the differe/ce 0et.ee/ the cost of creati/g that credit Eesse/tiall2 /othi/gF a/d the i/itial purchasi/g po.er .he/ the /e. mo/e2 is put i/to circulatio/. #/ a repri/t of the 0ook 9TH @ , "'% " $ "- $($T ) ;#ts ?urpose a/d @u/ctio/s:9 $. W. 'dams: uses the @ederal "eser8es o./ pu0lished figures to gi8e us a/ example of ho. lucrati8e this /o risk scheme is to the @ederal "eser8e: The pauper EThe @ederal "eser8e $2stemF .ith assets of o/l2 TJ6 0illio/ .ith /o producti8e k/o.;ho.: .ith /o productio/s of goods: a/d fe.er tha/ 4HH:HHH stockholders: loa/ed E<F the rich ma/ EThe +/ited $tates of 'mericaF .ith a trillio/ i/ producti8e capacit2 a/d k/o.;ho. .ith .ell o8er T6HH 0illio/ i/ assets a/d 4GH millio/ stockholders: i/cludi/g the aforesaid 4HH:HHH 0a/k stockholders: T6JH 0illio/ to fight World War ##. 3a/ 2ou imagi/e the greatest corporatio/ o/ earth: the &o8er/me/t of the +. $. .ith 4GH millio/ alert full;of;k/o.;ho. stockholders: a/d assets ru//i/g o8er T6HH 0illio/: tur/i/g to a small segme/t of its populatio/: .ith fe.er tha/ 4HH:HHH stockholders a/d assets of o/l2 TJ6 0illio/ to 0orro. mo/e2< 3a/ 2ou co/cei8e of "ockefeller sa2i/g to his chauffeur: 9Tom: # am tra/sferri/g m2 perso/al 0a/k accou/t .hich is .ell o8er T4 0illio/: to 2our accou/t. (ou ma2 spe/d it as 2ou pleaseA pro8ided as ofte/ as # ask for mo/e2: 2ou .ill let me ha8e it. Of course: # .ill gi8e 2ou m2 /ote for cash # recei8e: a/d tr2 to rustle from m2 childre/ e/ough mo/e2 to pa2 2ou i/terest o/ the 0orro.ed mo/e2.9 Well: that is exactl2 .hat 3o/gress did i/

4543 .he/ it passed the @ederal "eser8e 'ct. To fight World War ##: .e ga8e the 0a/kers of the +/ited $tates T6JH 0illio/ i/ +. $. !o/ds that .e might use our o./: the *atio/=s credit. !2 usi/g the reser8e multiplier: this ga8e them T4 trillio/ 6JH 0illio/ 0a/k credit. What a/ u/ear/ed 0o/a/za for the 0a/kersM 3redits are to the 0a/kers .hat 2our deposits are to 2ou. The2 ca/ le/d them: or use them to 0u2 i/8estme/ts ; it is cash to there 0a/kersM $o: 02 addi/g the T6JH 0illio/ i/ +.$. !o/ds .e a0solutel2 ga8e to them their T4 trillio/ 6JH 0illio/ 0a/k credit: a/d .e fi/d that the 0a/kers Ethe the/ paupersF came out of World War ## T4:JHH 0illio/ richer: a/d the Ethe/ rich ma/F the +/ited $tates &o8er/me/t came out T6JH 0illio/ i/ de0t to the 0a/kers Ethe paupersF tha/ks to the stupidit2 a/d/or 8e/alit2 of our 3o/gressme/: /e.spapers: 7our/als: a/d educated people of the /atio/. 3learl2: 02 their o./ testimo/2: the @ederal "eser8e: as a maritime le/der or i/surer: /ot o/l2 has /othi/g at risk Ei.e.: /othi/g to lose i/ the maritime 8e/ture for profitF ;;0ut ca/ o/l2 gai/ o/ a scale that is almost i/co/cei8a0le: 7ust like the to/ti/e i/sura/ce schemes: a/d 7ust like the &eorge "app Harmo/2 $ociet2. The sig/ifica/ce of this .ill 0ecome 8er2 appare/t .he/ .e appl2 the la. to the fact. These same people .ho .ere gi8e/ co/trol of our pu0lic mo/e2 s2stem: for the oste/si0le purpose of e8e/i/g out the eco/om2: usi/g ?rofessor %ist=s formula for a 9*atio/al co/om29: caused a recessio/ i/ 4564 ;; a/d precipitated the crash of R65 02 i/creasi/g the mem0er 0a/k reser8e re>uireme/ts from 4JU to 6HU ;; there02 forci/g a huge li>uidit2 s>ueeze. This set the stage for .hat .as to follo. i/ 4533 02 .a2 of 0a/krupti/g the treasuries of the states a/d federal go8er/me/ts ;; the2 could /o lo/ger pa2 their de0ts at la. to the @ederal "eser8e ;; drastic measures .ere o08iousl2 /ecessar2 ;; .e had a 9*atio/al merge/c29 o/ our ha/dsM O/ 'pril J: 4533: ?reside/t "oose8elt issued a/ executi8e order calli/g for the retur/ of all gold i/ pri8ate hidi/g to the @ederal "eser8e 02 )a2 4 u/der the pai/ of te/ 2ears impriso/me/t a/d T4H:HHH fi/e. Hoarders .ere hu/ted a/d prosecuted: 'ttor/e2 &e/eral 3ummi/gs declared: 9# ha8e /o patie/ce .ith people .ho follo. a course that i/ .ar time .ould class them as slackers. #f # ha8e to make a/ example of some people: #=ll do it cheerfull2.9 O/ )a2 46: 4533: the 3alifor/ia 'ssem0l2 a/d $e/ate adopted 'ssem0l2 1oi/t "esolutio/ *o. 66. This resolutio/ stated i/ part: 9Whereas: it .ould appear that: .ith proper use a/d co/trol of moder/ mea/s of productio/ a/d distri0utio/: it .ould 0e possi0le for practicall2 all perso/s to ha8e a/d e/7o2 a fair share of material goods i/ retur/ for ser8icesA a/d .hereas: such use: co/trol a/d appropriate eco/omic pla//i/g are /ot feasi0le except through the directio/ a/d super8isio/ of a si/gle: ce/tralized age/c2 a/d the remo8al of certai/ co/stitutio/al limitatio/sA /o.: therefore 0e it resol8ed 02 the 'ssem0l2 a/d $e/ate: 7oi/tl2: that the legislature of the $tate of 3alifor/ia here02 memorializes the

3o/gress to propose a/ ame/dme/t to the co/stitutio/ of the +/ited $tates readi/g su0sta/tiall2 as follo.s: RThe 3o/gress a/d the se8eral states: 02 its authorit2 a/d u/der its co/trol: ma2 regulate or pro8ide for the regulatio/ of hours of .ork: compe/satio/ for .ork: the productio/ of commodities a/d the re/ditio/ of ser8ices: i/ such ma//er as shall 0e /ecessar2 a/d proper to foster orderl2 productio/ a/d e>uita0le distri0utio/: to pro8ide rumi/ati8e .ork for the maximum /um0er of perso/s: to promote ade>uate compe/satio/ for .ork performed: a/d to safeguard the eco/omic sta0ilit2 a/d .elfare of the /atio/A= 9resol8ed: that the legislature of 3alifor/ia respectfull2 urges that: pe/di/g the su0missio/ a/d adoptio/ of such ame/dme/t: the 3o/gress pro8ide for such eco/omic pla//i/g a/d regulatio/ as ma2 0e /ecessar2 a/d proper u/der prese/t eco/omic co/ditio/s a/d legall2 possi0le u/der the existi/g pro8isio/s of the 3o/stitutio/A a/d 0e if further "esol8ed: that the chief clerk of the 'ssem0l2 is here02 i/structed forth.ith to tra/smit copies of this resolutio/ to the ?reside/t of the +/ited $tates: a/d to the ?reside/t of the $e/ate: the $peaker of the House of "eprese/tati8es a/d each of the se/ators a/d represe/tati8es from 3alifor/ia i/ the 3o/gress of the +/ited $tates.9 )a2 46: 4533: ?e//s2l8a/ia &e/eral 'ssem0l2 'ct ### This act declared that .he/ the state treasur2 departme/t could /o lo/ger 9pa29 its de0ts a/d .as 7eopardizi/g its depositors a/d creditors: the secretar2 of 0a/ki/g .ould 0e desig/ated as recei8er for the treasur2 a/d he .as to file a certificate of possessio/ i/ ,auphi/ 3ou/t2=s ?rotho/otar2=s Office i/ Harris0urg: the state 3apitol. 's recei8er for the $tate treasur2 a/d all its offices Emea/i/g all the cou/t2 treasurersF: William ,. &ordo/: $ecretar2 of !a/ki/g: .as gra/ted the authorit2 02 'ct ### to appoi/t a fiduciar2 to ma/age all the fi/a/cial matters of the $tate. He also had the po.er to assig/ as securit2 for loa/ co/tracts from the @ederal &o8er/me/t: all propert2 i/ the state: real a/d perso/al: resources a/d ma/2 other assets as i/sura/ce to the @ederal "eser8e. House 1oi/t "esolutio/ 456 ; 4533 E6H 2ears after e/actme/t of the @ederal "eser8e 'ctF O/ 1u/e J: 4533: 3o/gress e/acted H1";456 to suspe/d the gold sta/dard a/d to a0rogate the gold clause. This resolutio/ declared that 9Whereas the holdi/g or deali/g i/ gold affect the pu0lic i/terest: a/d are therefore su07ect to proper regulatio/ a/d restrictio/A a/d .hereas the existi/g emerge/c2 has disclosed that pro8isio/s of o0ligatio/s .hich purport to gi8e the o0ligee a right to re>uire pa2me/t i/ gold or a particular ki/d of coi/ or curre/c2...are i/co/siste/t .ith the declared polic2 of co/gress...i/ the pa2me/t of de0ts. This resolutio/ declared that a/2 o0ligatio/ re>uiri/g 9pa2me/t i/ gold or a particular ki/d of coi/ or curre/c2: or i/ a/ amou/t i/ mo/e2 polic2A a/d ... 8er2 o0ligatio/ heretofore or hereafter i/curred: shall 0e discharged upo/ pa2me/t: dollar for dollar: i/

a/2 coi/ or curre/c2 .hich at the time of pa2me/t is legal te/der for pu0lic a/d pri8ate de0ts.9 P *OT that the .ords do /ot talk a0out 9pa2me/t9 of de0t: 0ut clearl2 states that 9 8er2 O0ligatio/ ... $hall 0e discharged.9 #/ the case of $ta/ek 8. White: 4G6 )i//. 35H: 64J H.W. G84: the court explai/ed the legal disti/ctio/ 0et.ee/ the .ords 9pa2me/t9 a/d 9discharge9: 9There is a disti/ctio/ 0et.ee/ a Rde0t discharged= a/d a Rde0t paid.= Whe/ discharged the de0t still exists though di8ested of its character as a legal o0ligatio/ duri/g the operatio/ of the discharge. $omethi/g of the Origi/al 8italit2 of the de0t co/ti/ues to exist: .hich ma2 0e tra/sferred: e8e/ though the tra/sferee takes it su07ect to its disa0ilit2 i/cide/t to the discharge. The fact that it carries somethi/g .hich ma2 0e a co/sideratio/ for a /e. promise to pa2: so as to make a/ other.ise .orthless promise a legal o0ligatio/: makes it the su07ect of tra/sfer 02 assig/me/t.9 Thus: it is clear that: as a result of H1" 456 a/d from that da2 for.ard E1u/e J: 4533F: /o o/e has 0ee/ a0le to pa2 a de0t. The o/l2 thi/g the2 ca/ do is te/der i/ tra/sfer of de0ts: a/d the de0t is perpetual. The suspe/sio/ of the gold sta/dard: a/d prohi0itio/ agai/st pa2i/g de0ts: remo8ed the su0sta/ce for our 3ommo/ %a. to operate o/: a/d created a 8oid: as far as the la. is co/cer/ed. This su0sta/ce .as replaced .ith a 9?u0lic *atio/al 3redit9 s2stem .here de0t is mo/e2 EThe @ederal "eser8e calls it 9mo/etized de0t9F o8er .hich the o/l2 7urisdictio/ at is 'dmiralt2 a/d )aritime. H1";456 .as impleme/ted immediatel2. The da2 after ?reside/t "oose8elt sig/ed the resolutio/ the treasur2 offered the pu0lic /e. go8er/me/t securities: mi/us the traditio/al 9pa2a0le i/ gold9 clause. 'rticle #: $ectio/ 4H: 3lause 4: proscri0es the states maki/g a/2 thi/g 0ut gold a/d sil8er coi/ a te/der i/ pa2me/t of de0t ;;0ut: this 'rticle does /ot co/tai/ a/ a0solute prohi0itio/ agai/st the $tates maki/g somethi/g else a te/der i/ tra/sfer of de0t. H1";456 prohi0its pa2me/t of de0t a/d su0stitutes: i/ its place: a discharge of a/ o0ligatio/ ;; there02 /ot o/l2 su08erti/g: 0ut totall2 02passi/g the 9a0solute prohi0itio/9 so carefull2 e/gi/eered i/to the 3o/stitutio/. There is: /o.: /othi/g for this 'rticle to operate o/: 7ust as there is /othi/g for 3ommo/ %a. to operate o/. ?erpetual de0t: 0ills: /otes: che>ues a/d credits fall .ithi/ a totall2 differe/t 7urisdictio/ tha/ co/templated 02 'rticle #: $ectio/ 4H: 3lause 4 ;; a/d that 7urisdictio/ 0elo/gs exclusi8el2 to the %a. of 'dmiralt2 a/d )aritime. *o.: it is eas2 to see ho. 90ills9 as ple/t2 as oak lea8es: 9polluted the la.s after the War @or #/depe/de/ce: as descri0ed 02 ?eletiah We0ster9. This is ho. .e lost access to su0sta/ti8e 3ommo/ %a. ;; the 8er2 la. the )i/ute )e/ fought to regai/. H1+"234 (laces e&e ' (e son who !eals in the (ublic national c e!it in the le#al (osition o$ a me chant) an! the onl' 5u is!iction o&e an' cont o&e s' in&ol&in# this sub5ect matte is A!mi alt' an! /a itime. O08iousl2: if .e ca//ot pa2 our de0ts at la.: .e are also 0e/efiti/g from limited lia0ilit2 u/der the %imited %ia0ilit2 'ct .he/ .e use this credit ;; a/d: that is mari/e i/sura/ceM

The defi/itio/s of 9lia0ilit29 a/d 9i/sure9 .ill help co/8i/ce us of this fact ;; i/ a/al2zi/g these defi/itio/s: keep i/ mi/d the disti/ctio/ 0et.ee/ 9pa2me/t9 a/d 9discharge9. %ia0ilit2: The .ord is a 0road term. #t has 0ee/ defi/ed to mea/: all character of de0ts a/d o0ligatio/s ... a/2 ki/d of de0t or lia0ilit2: either a0solute or co/ti/ge/t: express or implied ... co/ditio/ .hich creates a dut2 to perform a/ act immediatel2 or i/ the future ... dut2 to pa2 mo/e2 or to perform some other ser8ice ... the state of 0ei/g 0ou/d or o0ligated i/ la. or 7ustice to do: pa2: or make good somethi/g.9 #/sure: 9To e/gage to i/dem/if2 a perso/ agai/st pecu/iar2 loss from specified perils or possi0le lia0ilit29. O+ $T#O* N4: Who do 2ou suppose took possessio/ of the treasur2 of the $tate of ?a. o/ 1u/e J: 4533: ;; the mome/t H1";456 made it impossi0le for the $tate of ?e//s2l8a/ia to pa2 its de0ts< O+ $T#O* N6: %a/d titles 0ei/g allodial i/ ?e//s2l8a/ia: .hat .as the $tate 'ssem0l2=s authorit2 a/d 7urisdictio/ to pledge these allodiums to the @ederal "eser8e as securit2 for loa/ co/tracts from the @ederal &o8er/me/t< O+ $T#O* N3: #f the i/di8idual citize/s of ?e//s2l8a/ia .ere i/deed 9so8ereig/9 u/der the 3ommo/ %a. ;;What .as the authorit2 a/d 7urisdictio/ of the $tate 'ssem0l2 to pledge their la0or to the @ederal "eser8e pool< 3learl2: the alleged authorit2 a/d 7urisdictio/ is the so;called pu0lic polic2 declared 02 3o/gress. We .ill retur/ to this su07ect later o/. #f all the assets of the +/ited $tates ha8e 0ee/ h2pothecated to the @ederal "eser8e 9pool9 as securit2 for the maritime loa/ a/d i/sura/ce u/der.riti/g polic2: the/ that raises a couple of >uestio/s: O+ $T#O* N4: #f the +/ited $tates 9dies9 Eor is mergedF u/der a o/e .orld go8er/me/t: .ho gets the pool< O+ $T#O* N6: #f the @ederal "eser8e 9dies9 02 .a2 of getti/g its charter resci/ded: .ho gets the pool< The a/s.ers ca/ 0e fou/d i/ the @ederal "eser8e 'ct itself: 9$hould a @ederal "eser8e 0a/k 0e dissol8ed or go i/to li>uidatio/: a/2 surplus remai/i/g: after the pa2me/t of all de0ts: di8ide/d re>uireme/ts as herei/0efore pro8ided: a/d the par 8alue of the stock: shall 0e paid to a/d 0ecome the propert2 of the +/ited $tates a/d shall 0e similarl2 applied9. 34 +$3 34J! pro8ided that : 9*o gold shall after 1a/uar2 3H: 4534: 0e coi/ed: a/d /o gold coi/ shall after 1a/uar2 3H: 4534: 0e paid out or deli8ered 02 the +/ited $tatesA pro8ided ho.e8er: that coi/age ma2 co/ti/ue to 0e executed 02 the mi/ts of the +/ited $tates for foreig/ cou/tries9.

This exceptio/ .as /ecessar2 0ecause foreig/ cou/tries: 0ei/g recog/ized or so8ereig/: could /ot 0e held to the i/ter/al pu0lic polic2 of the +/ited $tates. H1";456 .as 0i/di/g o/l2 upo/ those i/di8iduals .ho .ere 0e/eficiaries of pu0lic polic2A that 0ei/g the pri8ilege of limited lia0ilit2 for pa2me/t of de0t arisi/g out of participatio/ i/ the @ederal "eser8e ?u0lic 3redit $2stem. H1";456 automaticall2 exte/ded the pri8ilege to re/ege o/ de0ts to e8er2 perso/ usi/g the @ederal "eser8e 0a/ki/g s2stemA ho.e8er: /e8er forget that .he/ 2ou operate o/ a pri8ilege: 2ou ha8e to respect the ruler of the gi8er of that pri8ilege. @urthermore: i/ the case of &reat @alls )fg. 3o. 8. 'ttor/e2 &e/eral: 464 +.$. J84: the court said : 9The court .ill /ot pass upo/ the co/stitutio/alit2 of a statute at the i/sta/ce of o/e .ho has a8ailed himself of its 0e/efits.9 Thus) i$ 'ou a&ail 'ou sel$ o$ an' bene$its o$ the (ublic c e!it s'stem 'ou wai&e the i#ht to challen#e the &ali!it' o$ an' statute (e tainin# to) an! con$e in# .bene$its. o$ this s'stem on the basis o$ constitutionalit'% rie "ailroad 8. Tompki/s: 3H4 +.$. 64 E4538F #/ its decisio/ of the case of rie ". ". 8. Tompki/s: i/ 4538: the $upreme court o8ertur/ed the $.ift 8. T2so/ decisio/ of 4846 02 stati/g: #/ the rie case: 1ustice !ra/deis .rote: 9 xcept i/ matters go8er/ed 02 the @ederal 3o/stitutio/ or 02 acts of 3o/gress: the la. to 0e applied i/ a/2 case is the la. of the $tate ... There is /o @ederal &e/eral 3ommo/ %a..9 *ote the exceptio/. The court has excepted matters go8er/ed 02 the co/stitutio/ a/d acts of 3o/gress from 0ei/g go8er/ed 02 $tate la.. He/r2 1. @rie/dl2: 1udge: +/ited $tates 3ourt of 'ppeals for the $eco/d 3ircuit su0se>ue/tl2 ga8e us the follo.i/g i/sights i/to the sig/ifica/ce of this decisio/: 9The clario/ 2et careful pro/ou/ceme/t of rie: RThere is /o @ederal &e/eral 3ommo/ %a.= ope/ed the .a2 to .hat: for .a/t of a 0etter term: .e ma2 call $pecialized @ederal 3ommo/ %a.. # dou0t that .e sufficie/tl2 realize ho. far this de8elopme/t has go/e ;; let alo/e .here is likel2 to go.9 9$i/ce most cases relati/g to @ederal matters .ere i/ the @ederal courts a/d i/8ol8ed Rge/eral= la.: the familiar rule of $.ift 8. T2so/ usuall2 ga8e @ederal 7udges all the freedom the2 re>uired i/ pre; rie da2s a/d made it u//ecessar2 for them to co/sider a more soteric source of po.er ... !2 focusi/g atte/tio/ o/ the /ature of the right 0ei/g e/forced: rie caused the pri/ciple of a specialized @ederal 3ommo/ %a.: 0i/di/g i/ all courts 0ecause of its source: to de8elop .ithi/ a >uarter ce/tur2 i/to a po.erful u/if2i/g force. 1ust as @ederal courts do /ot co/form to $tate decisio/s o/ issues propert2 for the $tates: $tate courts must co/form to federal decisio/s i/ areas .here 3o/gress: acti/g .ithi/ po.ers gra/ted to it: has ma/ifested: 0e it e8er so lightl2: a/ i/te/tio/ to that e/d. 9The %i/col/ )ills doctri/e E3J3 +.$. 448 E45JGF is preg/a/t .ith possi0ilities. #f the gra/t of @ederal 7urisdictio/ i/ suits o/ la0or co/tracts affecti/g commerce .as a ma/date to fashio/ a @ederal 3ommo/ %a. co/siste/t .ith federal la0or legislatio/ ... this like the

@ederal 3ommo/ %a. of la0or .ould ha8e supremac2 o8er $tate la..9 9The @ederal gia/t9 ...AR?rofessor &ilmore= has .ritte/: 9is 7ust 0egi//i/g to stir .ith his lo/g;dela2ed e/tra/ce .e are: it ma2 0e: at last catchi/g sight of the pri/ciple character.9 O+ $T#O* : E4F. What: do 2ou suppose: is the /ature of the right: a/d .hat is the source 1udge @rie/dl2 is referri/g to: that caused the rie 3ourt to o8ertur/ the $.ift 8. T2so/ decisio/ a/d rule that there .as /o lo/ger a &e/eral @ederal 3ommo/ %a.< E6F. Who: or .hat: is the 9pri/ciple character9 that 1udge @rie/dl2: Bor ?rofessor &ilmore: .hom he >uotesC refers< "emem0er: 1ustice $tor2 said i/ the ,e%o8io case that the 7urisdictio/ of 'dmiralt2: as to co/tracts: depe/ds upo/ the su07ect matter a/d the /ature of the causeM #/ a 0ook e/titled 9The %a. of !ills: *otes: a/d 3he>ues9: )el8ille ). !igalo.: ?h. ,. Har8ard: said i/ the 2ear 45HH: 9We are co/cer/ed i/ this 0ook .ith a 0ra/ch .hich deals .ith the la. of 0ills: /otes a/d che>ues. This 0ra/ch of the la. mercha/t has retai/ed throughout its life: to the prese/t da2: its esse/tial characteristics: clearl2 marki/g it off from the 3ommo/ %a. ... The term %a. )ercha/t at the prese/t time usuall2 suggests the la. of 0ills: /otes a/d che>ues. The time came .he/ it must take its place: e8e/ if piecemeal 02 the side of the 3ommo/ %a.: a/d of 'dmiralt2 a/d >uit2: i/ the 7urisprude/ce of /gla/d. 'dmiralt2 had alread2 0ee/ exercisi/g 7urisdictio/ o8er i/strume/ts i/ the /ature of 0ills of excha/ge a/d promissor2 /otes pertai/i/g to co/tracts i/ the commerce of the high seas. The %a. )ercha/t is /ot e8e/ a modificatio/ of the 3ommo/ %a.A it occupies a field o8er .hich the 3ommo/ %a. does /ot a/d /e8er did exte/d.9 '/d: from the 9Ha/d0ook of the %a. of @ederal 3ourts9: ... a u/a/imous 3ourt E3learfield Trust co. 8. +/ited $tates: 4543: 63 $. 3t. JG3F held: 9The rights a/d duties of the +/ited $tates o/ commercial paper that is of issue are go8er/ed 02 @ederal rather tha/ local la.. This does /ot mea/ that i/ choosi/g the applica0le @ederal rule the courts ma2 /ot occasio/all2 select $tate la.. !ut is .as thought that such a course .ould 0e si/gularl2 i/appropriate i/ the 3learfield case. The issua/ce of commercial paper 02 the +/ited $tates is o/ a 8ast scale a/d tra/sactio/s i/ that paper from issua/ce to pa2me/t .ill commo/l2 occur i/ se8eral $tates ... The desira0ilit2 of a u/iform rule is plai/. To fi/d such a u/iform rule the 3ourt looked to the @ederal %a. )ercha/t ...9 9@ederal courts ha8e made similar decisio/s for themsel8es as to .hat the co/trolli/g rule is to 0e i/ other cases .here the +/ited $tates is a part2 issued 02 the +/ited $tates:9 go8er/me/t co/tracts: or the effect of a @ederal lie/ ...9 9#f a/ issue is co/trolled 02 @ederal 3ommo/ %a.: this is 0i/di/g o/ 0oth $tate a/d @ederal courts. ' case Rarisi/g u/der= @ederal 3ommo/ %a. is a @ederal >uestio/ case: a/d is .ithi/ the origi/al 7urisdictio/ of the @ederal courts as such ...9 The 0urgeo/i/g of a @ederal 3ommo/ %a. 0i/di/g o/ @ederal a/d $tate courts alike has occurred at the same time as the de8elopme/t of the rie doctri/e ...

#t is fre>ue/tl2 said that the rie doctri/e applies o/l2 i/ cases i/ .hich 7urisdictio/ is 0ased o/ di8ersit2 of citize/ship. #/deed i/ a/ actio/ for .ro/gful death caused 02 a maritime tort committed o/ /a8iga0le .aters: the 3ourt curtl2 dismissed rie as 9irrele8a/t:9 si/ce the district court .as exercisi/g its admiralt2 7urisdictio/: e8e/ though it .as e/forci/g a state; created right9... .. ,espite repeated stateme/ts impl2i/g the co/trar2: it is the source of the right sued upo/: a/d /ot the grou/d o/ .hich federal 7urisdictio/ is fou/ded: .hich determi/es the go8er/i/g la..9 O08iousl2: the pri/ciple character 1udge @rie/dl2 .as referri/g to is the 'dmiral himself ;; e/largi/g his po.ers a/d 7urisdictio/ as a result of the 9pu0lic polic29 of H1";456 ;; that 0ei/g perpetual de0t a/d limited lia0ilit2 for pa2me/t of de0t u/der the @ederal %a. )ercha/t a/d the %a. of 'dmiralt2 0ecause of su07ect matter a/d /ature of the cause. -ictor2 Tax 'ct E4546F ?rior to the rie decisio/: it .as .ell esta0lished 02 ma/2 court decisio/s that .ages .ere /ot i/come .ithi/ the mea/i/g of the 46th 'me/dme/t. The -ictor2 Tax 'ct .as passed 02 co/gress i/ 4546: as a/ emerge/c2 .ar measure: authorizi/g i/come tax o/ .ages. This act .as to self; destruct: a/d did: t.o 2ears from its e/actme/t. O+ $T#O* : #t is commo/ k/o.ledge that 9i/come taxes9 o/ la0or ha8e co/ti/ued to 0e collected si/ce the expiratio/ of the -ictor2 Tax 'ct i/ 4544. What is the legal 0asis for a so;called 9i/come tax9 o/ .ages si/ce 4544< The facts clearl2 sho. that it is /ot a/ i/come tax o/ .ages: 0ut: i/stead is a/ i/terest or premium pa2me/t to the maritime le/der: the @ederal "eser8e. The 46th 'me/dme/t does /ot appl2 to the @eds i/ this case ;; 1ust as 'rticle #: $ectio/ 4H: 3lause 4: does /ot appl2 to the statesM +/ited $tates 8. $outh; aster/ +/der.riters 'ssociatio/: 366 +.$. J33: E4544F VTHIS IS WH6 IN CANADA " THE +ECEI7E+ GENE+AL IS C0LLECTING *0+ THE BAN8 0* CANADA) N0T A *EDE+AL INSITITUTI0N% INC0/E TA9 IS A P+E/IU/:INSU+ANCE PA6/ENT;%%m' em(hasis;7ic% #/ 4544 the +.$. $upreme 3ourt decided the case of +.$. 8. $. . +/der.riters 'ssociatio/ holdi/g i/sura/ce to 0e i/ter;state commerce. @#"$T *'T. *. $O3. -. &'""#$O* #*$+"'*3 E454JF:

9The ,istrict 3ourt takes 7udicial /otice that: u/der a rece/t decisio/ of the $upreme 3ourt: i/sura/ce is /o. i/terstate commerce .ithi/ the commerce clause.9 )c3arre/ 'ct E454JF #/ 454J: 3o/gress e/acted the )c3arre/ 'ct declari/g 9that the co/ti/ued regulatio/ a/d taxatio/ 02 the se8eral $tates of the 0usi/ess of i/sura/ce is i/ the pu0lic i/terest a/d that

sile/ce o/ the part of co/gress shall /ot 0e co/strued to impose a/2 0arrier to the regulatio/ or taxatio/ of such 0usi/ess 02 the se8eral $tates.9 !egi//i/g i/ 4563: the .ords 9redeema0le i/ la.ful mo/e29 a/d 9.ill pa2 to the 0earer o/ dema/d9 .ere remo8ed from future issues of @ederal "eser8e *otes: further reflecti/g the pu0lic polic2 stated i/ H1";456. '/d: stra/gel2 e/ough: o/ Octo0er 68: 45GG: H1";456 .as >uietl2 repealed 02 pu0lic la. 5J;44G. The 7oi/t resolutio/ e/titled 91oi/t resolutio/ to assure u/iform 8alue to the coi/s a/d curre/cies of the +/ited $tates9 appro8ed 1u/e J: 4533 E34 +.$.3. 463F: shall /ot appl2 to o0ligatio/s issued o/ or after the date of e/actme/t of this sectio/. The reaso/ for the repeal of H1";456 is some.hat o0scure. 'fter 44 2ears of u/challe/ged impleme/tatio/: this pu0lic polic2 is clearl2 esta0lished 02 custom: usage a/d participatio/ i/ the credit s2stem 02 the 'merica/ pu0lic. Those of us operati/g o/ the pri8ilege of limited lia0ilit2: 8ia the pu0lic credit: are still 0ou/d 02 the rules of the gi8er of the pri8ilege. THE+E WAS A CHANGE IN THE P+0G+A/ BUT WE HAD N0 8N0WLEDGE% 7ic !ut: ho. a0out the @ederal "eser8e itself< ,oes /ot his repeal allo. them to: o/ce agai/: dema/d pa2me/t i/ gold for the i/terest o/ pu0lic de0t ;; pursua/t to the terms of the @ederal "eser8e 'ct< "emem0er: this act co/tai/s a pro8isio/ made .ith respect to a/ o0ligatio/ purporti/g to gi8e the o0ligee a right to re>uire pa2me/t i/ gold ;; a/d that pro8isio/ appears to 0e 0ack i/ effect. #f this 0e so: .hat ca/ .e expect to happe/ .he/ the 0a/kers prese/t their dema/ds ;; k/o.i/g that there .o/=t 0e e/ough gold to meet them a/d /o hope of ac>uiri/g e/ough gold< '/2 good 0a/ker k/o.s that: i/ this situatio/: it is foreclosure time ;; it is time for distri0utio/ of the pool to the last sur8i8ors. These facts pai/t a picture so complex that it is almost 0e2o/d comprehe/sio/: so a summar2 of the most salie/t facts is appropriate at this time. The same people that said gi8e us the @ederal "eser8e 3harter a/d .e .ill see that there is sta0ilit2 to our eco/om2 forced us i/to a recessio/ i/ 4564: 02 a co/tractio/ of the @ederal "eser8e re>uireme/ts of the fractio/al reser8e to the 8arious 0a/ks. This co/tracted the mo/e2 suppl2 02 i/creasi/g the reser8e re>uireme/t from 4JU to 6HU. The2 forced a huge li>uidit2 s>ueeze i/ 4565: .hich 0rought o/ the depressio/. This precipitated our i/a0ilit2 to pa2 off i/terest o/ the de0t to the @ederal "eser8e ;; so i/ 4533 3o/gress e/tered the +/ited $tates i/to 0a/kruptc2: 02 the suspe/sio/ of the pa2me/t of de0t i/ gold ma/dated 02 H1";456 i/ 4533. This o/e act termi/ated /atio/al @ederal 3ommo/ %a.. This o/e act 0reached the flood gates .hich held the maritime la. at the tidela/ds E.ith the e00 a/d flo. of the tideF a/d permitted )aritime 'dmiralt2 %a. a/d its 7urisdictio/ to s.eep o8er the 'merica/ people ;; 0ecause .e su0stituted the pa2me/t of de0t i/ la.ful gold .ith discharge of de0t u/der limited lia0ilit2 i/ maritime. What .e ha8e i/ lieu of la.ful mo/e2 is federal reser8e /otes of a/ i/sura/ce u/der.riti/g scheme that is a to/ti/e ;; 7ust like the &eorge "app $ociet2 .as a to/ti/e a/d 7ust like the earl2

to/ti/e i/sura/ce programs. *o.: 2ou ma2 sa2 to us at this poi/t: ho. is it that a commu/istic: religious societ2 that=s operated for eco/omic profit: a/d i/sura/ce compa/ies: a/d the @ederal "eser8e ;; ho. do these totall2 i/terlock< #/ all three cases there .as a pool of assets i/8ol8ed. #/ all three cases: limited lia0ilit2 .as i/8ol8ed: .hich is i/sura/ce. #/ all three cases: there .as a polic2 of sur8i8ors take all ;; that is a .ageri/g polic2. #/ the &eorge "app $ociet2: people a/d propert2 .ere pledged to the pool. #/ to/ti/e: premium pa2me/ts .ere pledged to the pool. #/ the @ederal "eser8e: premium pa2me/ts: people a/d propert2 are pledged to the pool. #/ all three cases: there .as /o accou/ta0ilit2 to the mem0ers or su0scri0ers. #/ all three cases: there .as forfeiture for .ithdra.al. #/ the &eorge "app $ociet2 it .as la0or i/terest a/d i/tra/smissa0ilit2 of propert2 to heirs. #/ to/ti/e it .as the premiums a/d the i/terest thereo/. #/ the @ederal "eser8e: it is $ocial $ecurit2: +/emplo2me/t ?remiums: propert2 Tax: etc. @or example: what ha((ens i$ 'ou with! aw $ om social secu it') o $ om unem(lo'ment insu ance) o sto( (a'in# ( o(e t' ta<es "" is not a $o $eitu e !eman!e!? #/ the &eorge "app $ociet2: %ist=s 9*atio/al co/om29 .as practiced o/ a small scale ;; i/ the @ederal "eser8e: %ist=s 9*atio/al co/om29 is regulati/g a/d co/trolli/g our eco/om2. #/ the &eorge "app $ociet2: there .as /o risk to the i/surer: &eorge "app a/d his associates. #/ the @ederal "eser8e: there is /o risk to the )aritime le/der: or i/sura/ce u/der.riter. #/ the &eorge "app $ociet2: la0or .as pledged: a/d la0or .as the premium for the pri8ilege of remai/i/g i/ the societ2 for the cha/ce of 9maki/g a profit9. ;; #/ the @ederal "eser8e: la0or is pledged to o0tai/ the u/its of credit E@ederal "eser8e $cripF to pa2 the i/terest to the maritime le/der: or the maritime i/sura/ce u/der.riter Eo/e a/d the same u/der maritime la.F. #/ the &eorge "app $ociet2: &eorge "app had /o 8ested i/terest i/ the li8es of the societ2 mem0ers. #/ the @ederal "eser8e: the @ederal "eser8e has /o 8ested i/terest i/ the li8es of the +/ited $tates: or its citize/s: /or does it ha8e a/2 risk at stake i/ the maritime 8e/ture of the ?u0lic *atio/al 3redit $2stem. #/ the to/ti/e: the premium .as /e8er to 0e repaid i/ the origi/al to/ti/e schemeA i/ the @ederal "eser8e: /o pro8isio/ is made to e8er pa2 the pri/ciple of the loa/ from the @ederal "eser8e: i/ the @ederal "eser8e 'ct ;; .hich is the co/tract 0et.ee/ the +/ited $tates a/d the @ederal "eser8e $2stem. # am sure that some of 2ou i/ this audie/ce has performed ser8ice i/ the *a82. #magi/e 2ourself as a seama/ a0oard a ship: i/ this case the ship is the credit commu/e i/ a 7oi/t

maritime 8e/ture for profit ;; 0eholdi/g to the class ' $tockholders: the o./ers of the ship: the @ederal "eser8e. The 3aptai/ of the ship: for argume/ts sake: let=s sa2 is the $ecretar2 of the Treasur2. *o. let=s look at 3ommo/ %a. 8ersus )aritime: @irst of all: u/der the 3ommo/ %a.: the rights of pri8ac2 are respected. '0oard the ship: o/ the credit 8o2age: i/ the credit commu/e: there is /o pri8ac2. The 3aptai/ has the right at a/2 time to i/8ade 2our pri8ac2. +/der 3ommo/ %a.: .e al.a2s deal i/ su0sta/ce ;; 02 su0sta/ce .e mea/ .ith gold a/d sil8er: a/d .e are deali/g .ith real goods a/d ser8ices. +/der )aritime %a.: i/ the credit commu/e: .e are deali/g .ith 0ills: /otes: che>ues: a/d credit ;; a/d of course /o. credit cards a/d fictitious docume/ts k/o./ as stocks a/d 0o/ds a/d so o/ do./ the li/e. +/der 3ommo/ %a.: .e protect the right of the famil2 ;;u/dersta/d that this 3ommo/ %a. comes from the earl2 la. of the tri0es of #srael a/d from the la.s a/d teachi/gs of 1esus a/d the !i0le. #/ fact the 3ommo/ %a. a/d the !i0le are totall2 compati0le. !ut: i/ a/d a0oard the ship of the credit commu/e there is /o marriage: there is /o famil2 u/it ;; oh 2es: .e k/o. the 3aptai/ performs marriages a0oard ship for people tra8elli/g a0oard ship ;; 0ut for all practical purposes there is /o famil2 u/it. (ou are a mem0er of the commu/e: a/d 2ou ha8e to o0e2 the orders of that commu/e. #/ fact: 2ou: u/der 3ommo/ %a.: ha8e perso/al rights a/d propert2 rights. !ut: there are /o perso/al or propert2 rights i/ the commu/e ;; Oh 2ou=re allo.ed to keep toilet articles a/d e8er2thi/g else. !ut if 2ou ha8e a/2thi/g that the2 thi/k is a da/ger to the 8o2age: like if 2ou ha8e a .oode/ foot;locker a/d the2 feel that the .ood might 0ur/ a/d might 0e a da/ger to the ship: the2 could make 2ou thro. the foot locker o8er0oard. Or: if 2ou had some propert2 i/ o/e of the holds of the ship a/d that prese/ted some da/ger to the rest of the ship 0ecause of damage i/ that hold: or fire i/ that hold ;; the2 could shut that hold off ;; a/d all 2our goods .ould 0e destro2ed. +/der 3ommo/ %a.: 2our rights a/d propert2 are co/sidered a/d protected. *o.: i/ 3ommo/ %a.: .e are totall2 respo/si0le for our actio/s ;; 0ut u/der )aritime %a. there is limited lia0ilit2 for pa2me/t of de0ts. '/d: if .e 7ust look at that a little 0it further: .e fi/d ho.: /o.: .e ha8e a situatio/ .here e8e/ our crimi/al la. has 0ee/ corrupted 02 )aritime %a. a/d .e fi/d people .ho ha8e murdered a/d raped i//oce/t peopleA eight: te/: t.el8e 2ears later the2 are released from priso/ to 0ecome a pro0a0le da/ger to societ2 agai/. ' perso/ .ho has murdered a super8isor a/d ma2or of $a/ @ra/cisco is also out of 7ail i/ G 2ears: 0ecause of limited lia0ilit2 for pa2me/t of de0t. ?eople ca/ pull the trigger a/d .ou/d the ?reside/t a/d sa2 # .as i/sa/e at the mome/t that # did that ;;a/d other tha/ ha8i/g to go to a me/tal i/stitutio/: ser8ed /o time at all i/ 7ail. +/der 3ommo/ %a.: these people .ould pro0a0l2 ha8e 0ee/ executed. 1oh/ !ooth did/=t e8e/ get a trial .he/ he shot ?reside/t %i/col/. +/der the 3ommo/ %a.: .e ha8e the right to refuse a/ order: as a free so8ereig/. '0oard the ship: the 3aptai/ ca/ make e8er2 seama/ perform: a/d do his dut2 ;; as the 3aptai/ sees fit.

+/der 3ommo/ %a.: the 7ur2 /ot o/l2 determi/es the admissi0ilit2 of e8ide/ce a/d 7udges the facts: 0ut its first a/d foremost dut2 is to 7udge the 7ustice of the la. as it applies to the particular case. #t is this feature of a 3ommo/ %a. 7ur2 that caused our fou/di/g fathers to refer to the 3ommo/ %a. 7ur2 as the 9palladium Ei.e. the 8er2 fou/datio/ or cor/ersto/eF9 of li0ert2. '0oard the ship: the cha/cellor does /ot e8e/ ha8e to ha8e a 7ur2 ;; 0ut if he chooses to ha8e o/e: it is merel2 ad8isor2 ;; a/d those 7urors must co/sider o/l2 the e8ide/ce permitted 02 the cha/cellorA a/d the2 must take the la. as the cha/cellor dictates it to them. The histor2 of due process is esse/tiall2 the histor2 of the 3ommo/ %a. 7ur2. The right of a 3ommo/ %a. 7ur2 to sa2 /o: or 7ur2 /ullificatio/: .as clearl2 esta0lished i/ /gla/d i/ 46GH .he/ the 7ur2 refused to co/8ict William ?e// o/ charges of preachi/g 0efore a/ u/la.ful assem0l2. @or refusi/g to co/8ict: as i/structed from the 0e/ch: the 7urors .ere fi/ed 4H marks each a/d se/te/ced to impriso/me/t till paid. +po/ a Ha0eas 3orpus petitio/ release from priso/: the 7urors .ere 8i/dicated 02 a decisio/ co/curred i/ 02 all the 7udges i/ /gla/d: except o/e: a0olishi/g the practice of pu/ishi/g 7uries for their 8erdicts. #/ the period immediatel2 0efore the "e8olutio/: 7ur2 /ullificatio/ had 0ecome a/ i/tegral part of the 'merica/ 7udicial s2stem a/d there is agreeme/t amo/g ma/2 comme/tators that the right of the 7ur2 to decide >uestio/s of la. a/d fact pre8ailed i/ this cou/tr2 u/til the middle 48HH=s. !2 the e/d of the ce/tur2: ho.e8er: the po.er of the 7ur2 had 0ee/ thoroughl2 decimated 02 a 7ealous 7udiciar2. The specific demise ca/ 0e traced to four highl2 i/flue/tial cases: three of .hich .ere exclusi8el2 .ithi/ the 'dmiralt2 7urisdictio/ of the @ederal courts. !ei/g 'dmiralt2 cases: limitatio/ of the po.ers of those particular 7uries .as perfectl2 proper. The pro0lem is: /ot u/dersta/di/g a/d disti/guishi/g 7urisdictio/al 0ou/ds: .e ha8e allo.ed admiralt2 case la. to 0e imposed i/ the totall2 differe/t: a/d i/applica0le: 7urisdictio/ of 3ommo/ %a.. +/der the 3ommo/ %a.: there is /o such thi/g as a 8ictimless crime: a/d a 8ictim recei8es redress a/d compe/satio/ for damages ;; '0oard the ship: the 3aptai/ ca/ make a/2 act a crime: a/d he ca/ impose his sa/ctio/s accordi/gl2. His co/cer/ is for the safet2 of the 8o2age: a/d he has little time or i/cli/atio/ to see that the 8ictim of a real crime: u/der the 3ommo/ %a.: recei8es compe/satio/ from the perpetrator of that crime. +/der the 3ommo/ %a.: there is 8er2 little /eed for 7ailsA .hereas. a0oard the ship: particularl2 .he/ there is disco/te/t amo/g the cre. regardi/g certai/ policies of the 3aptai/: there is a co/ti/ual /eed to co/tract more 0rigs ;; e/large the pe/al e/forceme/t staff. "emem0er .hat 1ustice $tor2 said i/ the ,e%o8io case a0out appeals a/d Writs of rror<

Writs of rror are 3ommo/ %a. .rits. 'ppeal is >uit2 a/d 'dmiralt2: i/ ci8il matters: a/d 'dmiralt2 alo/e i/ crimi/al matters 0ecause e>uit2 courts do /ot ha8e crimi/al 7urisdictio/. These are some simple tests 2ou ca/ use to determi/e i/ .hich 7urisdictio/ a particular court is operati/g: i/ a/2 particular case. $o 2ou see: 0ecause of the earl2 customs a/d traditio/s of the perils of the sea: a 8er2 harsh group of la.s gre. up. !ecause of the da/ger of shippi/g su0sta/ti8e mo/e2: gold a/d sil8er: from pirates a/d storms the2 started tra/sporti/g 0ills: /otes a/d credits ;; a/d this gre. up i/to the e8il practice of issui/g 0ills: /otes a/d credits .he/ the2 did/=t ha8e the su0sta/ce to 0ack them up. '/d this is the 0asis for our i/flatio/ that is defraudi/g the 'merica/ pu0lic toda2. +/der the 3ommo/ %a.: all these thi/gs .ould /ot 0e possi0le ;; u/der )aritime %a. the2 are. Whe/ .e e/tered the credit commu/e a/d 0ega/ forfeiti/g pa2me/t of de0t a/d su0stituted a mere discharge of a/ o0ligatio/ i/ its place: .e lost access to our 3ommo/ %a. rights a/d .ere ha/ded a pottage of pri8ilegesA a/d i/ fact: .e tra/sferred oursel8es from free allodial title to that of su0;te/e/ts: 8illai/s: .orki/g the la/d su07ect to the 3aptai/ of the ship. (et: people still thi/k that the2 o./ la/d ;; (et: .e still thi/k that .e ha8e rights ;; a/d .e go i/to traffic court /ot k/o.i/g .e are u/der )aritime %a.. This is .h2 .e do/=t get a 7ur2 trial for i/fractio/s a/2more. This is .h2 the 7ur2 is merel2 ad8isor2 i/ e8er2 court i/ this la/d ;; a/d must take the la. as the 7udge gi8es it to them: a/d see a/d hear o/l2 the e8ide/ce allo.ed 02 the cha/cellor. *ot k/o.i/g this: .e ha8e take/: time a/d time agai/: 3ommo/ %a. issues i/to courts of admiralt2 a/d .o/dered .h2 our su0sta/ti8e co/stitutio/al rights .ere /ot upheld a/d respected 02 the courts. !ei/g a/ 'dmiralt2 court: it had /o 7urisdictio/ to rule o/ such issues: or gra/t relief: regardless of ho. sou/d 2our la. a/d facts .ere at 3ommo/ %a.M ' complete a/d thorough u/dersta/di/g of 7urisdictio/al 0ou/ds is so a0solutel2 esse/tial that it is .orth.hile to spe/d 7ust a little more time o/ the su07ect at this time. The *e!e al +ules o$ Ci&il P oce!u e ETitle 68: +/ited $tates 3odeF gi8es us some more specifics: "ule 5. ?% ',#*& $? 3#'% )'TT "$ EHF 'dmiralt2 a/d )aritime 3laims. ' pleadi/g or cou/t setti/g forth a claim for relief .ithi/ the 'dmiralt2 a/d )aritime 7urisdictio/ that is also .ithi/ the 7urisdictio/ of the district court o/ some other grou/d ma2 co/tai/ a stateme/t ide/tif2i/g the claim as a/ 'dmiralt2 or )aritime claim for the purposes of "ules 44EcF: 38 EeF: 86 a/d the $uppleme/tal "ules for 3ertai/ 'dmiralt2 a/d )aritime 3laims. #f the claim is cog/iza0le o/l2 i/ 'dmiralt2: it is a/ 'dmiralt2 or )aritime claim for those purposes .hether so ide/tified or /ot. -#. T"#'%$ "ule 38. 1+"( T"#'% O@ "#&HT

EaF "ight ?reser8ed. The right of trial 02 7ur2 as declared 02 the $e8e/th 'me/dme/t to the 3o/stitutio/ or as gi8e/ 02 a statute of the +/ited $tates shall 0e preser8ed to the parties i/8iolate. EeF 'dmiralt2 a/d )aritime 3laims. These rules shall /ot 0e co/strued to create a right to trial 02 7ur2 of the issues i/ a/ 'dmiralt2 or )aritime claim .ithi/ the mea/i/g of "ule 5 EhF. 's ame/ded @e0. 68: 4566: eff. 1ul2 4: 4566 4566 'me/dme/t "+% 35: EcF 'd8isor2 1ur2 a/d Trial 02 3o/se/t. #/ all actio/s /ot tria0le of right 02 a 7ur2 the court upo/ motio/ or of its o./ i/itiati8e ma2 tr2 a/2 issue .ith a/ ad8isor2 7ur2 or: except i/ actio/s agai/st the +/ited $tates .he/ a statute of the +/ited $tates pro8ides for trial .ithout a 7ur2: the court: .ith the co/se/t of 0oth parties: ma2 order a trial .ith a 7ur2 .hose 8erdict has the same effect as if trial 02 7ur2 had 0ee/ a matter of right. "+% 86. 1+"#$,#3T#O* '*, - *+ +*'@@ 3T , These rules shall /ot 0e co/strued to exte/d or limit the 7urisdictio/ of the +/ited $tates district courts or the 8e/ue of actio/s therei/. '/ 'dmiralt2 or )aritime claim .ithi/ the mea/i/g of "ule 5 EhF shall /ot 0e treated as a ci8il actio/ for the purposes of title 68 +.$.3. 4354;53. P 'fter the War for #/depe/de/ce: 02 .a2 of the ,eclaratio/ of #/depe/de/ce a/d +$ 3o/stitutio/: domestic la. .as to 0e the su0sta/ti8e 3ommo/ %a. i/ the +/ited $tates: fore8er: ;; a/d this .as to operate o/ allodiums a/d gold: a porta0le su0sta/ce represe/ti/g those allodiums. P The e/croachme/t of 'dmiralt2 la. o/to the domestic la. of the colo/ies .as the primar2 i/duceme/t for the ,eclaratio/ of #/depe/de/ce. H1";456 remo8ed access to su0sta/ti8e 3ommo/ %a. a/d 0rought 'dmiralt2 la. i/la/d 02 .a2 of the ?u0lic *atio/al 3redit $2stem ;; maki/g e8er2o/e .ho touches it a mercha/t u/der )aritime %a.. P )aritime loa/s a/d maritime i/sura/ce are treated exactl2 the same u/der the )aritime %a. of the %a. of *atio/s. #/ o/e case the part2 is called the le/der: i/ the other the u/der.riter. #f: as .as .ell;settled la. 02 the courts prior to 4533: .ages .ere /ot i/come .ithi/ the mea/i/g of the 46th 'me/dme/t ;; the/: o08iousl2: .ages are still /ot i/come .ithi/ the mea/i/g of this ame/dme/t. The e8ide/ce co/clusi8el2 esta0lishes that the legal 0asis for the collectio/ of these so; called i/come taxes: si/ce 4544: is that the2 are: i/ fact: i/terest or i/sura/ce premiums to the @ederal "eser8e for the pri8ilege of limited lia0ilit2 for the pa2me/t of de0t. The legal 0asis for this so;called tax .as esta0lished i/ 4533 02 H1";456. The fact that impleme/tatio/ of this premium .as postpo/ed u/til 4546 a/d put i/to effect u/der the guise of a/ emerge/c2 .ar measure: there02 co/ditio/i/g .age ear/ers to 0elie8e it .as actuall2 a tax: smacks of .illful a/d i/te/tio/al co/cealme/t of material facts for the

purpose of decei8i/g .age ear/ers a/d co/ceali/g the truth. @urther: @orest ,. )o/tgomer2: 3ou/sellor to the &e/eral 3ou/sel for the ,epartme/t of Treasur2: .rote a letter to )r. $migeilski o/ this su07ect: .herei/ he stated: 934 +.$. 3ode: $ectio/ G46: ge/erall2 exempts Treasur2 o0ligatio/ from taxatio/ 02 state or local go8er/me/ts. This pro8isio/: as .ell as the 3o/stitutio/: prohi0its state taxatio/ of @ederal "eser8e *otes.9 #f this is true: a/d #@ the states are actuall2 collecti/g 9i/come taxes9 0ased o/ @ederal "eser8e *otes: the2 are i/ clear 8iolatio/ of @ederal la.s. ,o 2ou reall2 0elie8e the $tates are ope/l2 flau/ti/g @ederal la.: or is it possi0le that 0oth the @eds a/d the $tates k/o. somethi/g that has 0ee/ kept from us all these 2ears< This letter .as sig/ed o8er the title of 93ou/sellor to the &e/eral 3ou/sel9 of the ,epartme/t of the Treasur2. $urel2: this ma/ .ould k/o. if the states are flau/ti/g @ederal la.. *ote also: that he sa2s that the 3o/stitutio/ prohi0its state taxatio/ of @ederal "eser8e *otes ;; clearl2 referri/g to the a0solute prohi0itio/ stated i/ 'rticle #: $ectio/ 4H: 3lause 4. 1ust .hat is goi/g o/ here: a/d 7ust .hat is )r. )o/tgomer2 telli/g us< The 3alifor/ia i/sura/ce 3ode itself ca/ help us make the co//ectio/ 0et.ee/ i/sura/ce a/d so;called 9taxes9: $ec.4H3. )ari/e i/sura/ce i/cludes i/sura/ce agai/st a/2 a/d all ki/ds of loss of or damage to: ... all goods: freights: cargos: mercha/dise: effects: dis0urseme/ts: profits: mo/e2: 0ullio/: securities: choses i/ actio/: e8ide/ces of de0t: 8alua0le papers: 0ottomr2: a/d respo/de/tia i/terests a/d all other ki/ds of propert2: a/d i/terests therei/: i/ respect to: appertai/i/g to or i/ co//ectio/ .ith a/2 a/d all risks of perils of /a8igatio/9. '/d: the 3alifor/ia #/sura/ce 3ode ca/ also help us decide ho. a perso/ gets i/8ol8ed: a/d i/curs lia0ilit2: u/der a polic2 of mari/e i/sura/ce: 'rticle 488J. #/terest i/ source of profits #/ mari/e i/sura/ce: a perso/ .ho has a/ i/terest i/ the thi/g from .hich profits are expected to proceed: has a/ i/sura0le i/terest i/ the profits. $o: .e see that pursua/t to 3alifor/ia 3ode: a/2 a/d all ki/ds of such thi/gs as e8ide/ces of de0t a/d 0ottomr2 Ethat is maritime loa/sF are the su07ect matter ; a/d u/der mari/e i/sura/ce la. i/ the $tate of 3alifor/ia. O08iousl2: the %a. of *atio/s applies to the facts prese/ted i/ this case: so: let=s first fi/d out 7ust .hat this la. is.

LAW 0* NATI0NS

&e/eral The /ecessar2 a/d /atural %a.. #t is al.a2s o0ligator2 upo/ a /atio/ .ith respect to its co/scie/ce a/d o/ all /atio/s i/ the regulatio/ of their i/ter/al co/duct.

3o/8e/tio/al )a2 0e co/fi/ed to particular states a/d depe/ds o/ their ar0itrar2 8olitio/. ' rule .hich their .elfare a/d commo/ safet2 o0liges them to o0liges them to follo. i/ mutual i/tercourse Epu0lic polic2F 'rises from express co/se/t Edeclaratio/s of i/depe/de/ce: treaties: co/stitutio/s: etc.F

3ustomar2 )a2 0e co/fi/ed to particular states a/d depe/ds o/ their ar0itrar2 8olitio/. ' rule .hich their .elfare a/d commo/ safet2 o0liges them to o0liges them to follo. i/ mutual i/tercourse Epu0lic polic2F 'rises from tacit co/se/t Ee.g.: co/8e/tio/ a/d customF

xter/al la. .hich dictates .hat e8er2 /atio/ ma2 re>uire of e8er2 other: a/d 2et 0ei/g fou/ded i/ the .ill of the go8er/ed Epu0lic polic2F 02 reaso/ The /atural or i/ter/al la. of co/scie/ce. #t is u/i8ersal a/d fou/ded i/ /ature #t proceeds from the ge/eral co/se/t of ma/ki/d a/d 0i/ds all /atio/s.

!i/ds those .ho ha8e asse/ted to it

O0ligator2 o/ those /atio/s .ho ha8e adopted it

QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ 9The la. of /atio/s ma2 0e co/sidered of three ki/ds: to .it: ge/eral: co/8e/tio/al or customar2. The first is u/i8ersal: or esta0lished 02 the ge/eral co/se/t of ma/ki/d: a/d 0i/ds all /atio/s. The seco/d is fou/ded o/ express co/se/t: a/d is /ot u/i8ersal: a/d o/l2 0i/ds those /atio/s .ho ha8e asse/ted to it. The third is fou/ded o/ tacit co/se/tA a/d is o/l2 o0ligator2 o/ those /atio/s .ho ha8e adopted it9. Ware: 'dmi/istrator of 1o/es 8. H2lto/: et al E4G56F Thus: it is clear that: 4. The +/ited $tates 3o/stitutio/ is a/ ordi/a/ce Eor statuteF .ithi/ the %a. of *atio/s. 6. The 8arious $tate co/stitutio/s are ordi/a/ces Eor statutesF .ithi/ the +/ited $tates 3o/stitutio/: a/d are a part a/d parcel of the la. of *atio/s. 3. 9?u0lic polic29 is .ithi/ the 7urisdictio/ of the la. of *atio/s. #/ the $e/eca 3ase: decided 02 a court of appeals i/ ?e//s2l8a/ia i/ 4865A the court said:

9The 7urisdictio/ of the district court: u/der the 5th sectio/ of the 1udiciar2 'ct of 4G85 E4 $tat. G6F: em0races all cases of maritime /ature: .hether the2 0e particularl2 of admiralt2 cog/iza/ce or /otA a/d such 7urisdictio/: a/d the la. regulati/g its exercise: are to 0e sought for i/ the Gene al /a itime Laws o$ Nations: a/d are /ot co/fi/ed to that of /gla/d: or a/2 other particular maritime /atio/. $o .e see that our 'dmiralt2 a/d )aritime courts are /ot o/l2 0ou/d 02 the )aritime %a.s of this cou/tr2: or /gla/d: 0ut are 0ou/d 02 the &e/eral )aritime %a.s of all /atio/s. *o.: let=s look i/to some of those &e/eral )aritime %a.s deali/g .ith the su07ect matter 0rought i/to e8ide/ce i/ this case. @rom the $tatutes at %arge from the 4Jth to the 6Hth 2ear of Di/g &eorge ##: .e fi/d the follo.i/g: 9The from a/d after the first da2 of 'ugust: o/e thousa/d se8e/ hu/dred a/d fort2 six: /o assura/ce or assura/ces shall 0e made ;; i/terest or /o i/terest: or .ithout further proof of i/terest tha/ the polic2: or 02 .a2 of gami/g or .ageri/g: ... a/d that e8er2 assura/ce shall 0e /ull a/d 8oid to all i/te/ts a/d purposes.9 The reaso/ for this e/actme/t .as stated to 0e: 9Whereas: it has 0ee/ fou/d 02 experie/ce that the maki/g of assura/ces: i/terest or /o i/terest: or .ithout further proof of i/terest tha/ the polic2: hath 0ee/ producti8e of ma/2 per/icious practices: ... a/d 02 i/troduci/g a mischie8ous ki/d of gami/g or .ageri/g: u/der the prete/ce of ... the i/stitutio/ a/d lauda0le desig/ of maki/g assura/ces: hath 0ee/ per8ertedA a/d that .hich .as i/te/ded for the e/courageme/t of trade a/d /a8igatio/: has i/ ma/2 i/sta/ces: 0ecome hurtful: a/d destructi8e to the same:9 Here .e ha8e a clear a/d disti/ct stateme/t that i/terest or /o i/terest: i/sura/ce policies: a/d gami/g a/d .ageri/g: are a0solutel2 agai/st the 9pu0lic polic29 of /atio/s ;; a/d are: therefore: 8oid. @rom the Hals0ur2=s 9$tatutes of /gla/d9 .e fi/d: 9The %ife #/sura/ce 'ct9: 4GG4 E44 &eo. 3c. 48F 4. *o i/sura/ce to 0e made o/ li8es: etc.: 02 perso/s ha8i/g /o i/terest: etc. ;; @rom a/d after the passi/g of this 'ct /o i/sura/ce shall 0e made 02 a/2 perso/ or perso/s: politick or corporate: o/ the life or li8es of a/2 perso/ or perso/s: or o/ a/2 other e8e/t or e8e/ts .hatsoe8er: .herei/ the perso/ or perso/s for .hose use: 0e/efit: or o/ .hose accou/t such polic2 or policies shall 0e made: shall ha8e /o i/terest: or 02 .a2 of gami/g or .ageri/gA a/d that e8er2 assura/ce made co/trar2 to the true i/te/t a/d mea/i/g hereof shall 0e /ull a/d 8oid to all i/te/ts a/d purposes .hatsoe8er. *OT $: 't 3ommo/ %a.: .ager policies .ere legal co/tracts. 9The )ari/e #/sura/ce 'ct: 45H6 E6 d.. Gc. 44F ... 4. )ari/e #/sura/ce ,efi/ed. ; ' co/tract of mari/e i/sura/ce is a co/tract .here02 the i/surer u/dertakes to i/dem/if2 the assured: i/ a ma//er a/d to the exte/t there02 agreed: agai/st maritime losses: that is to sa2: the losses i/cide/t to maritime ad8e/ture.9 4. '8oida/ce of .ageri/g or gami/g co/tracts. E4F 8er2 co/tract of mari/e i/sura/ce 02 .a2 of gami/g or .ageri/g is 8oid.

E6F ' co/tract of mari/e i/sura/ce is deemed to 0e a gami/g or .ageri/g co/tract ; EaF .here the assured has /ot a/ i/sura0le i/terest as defi/ed 02 the 'ct: a/d the co/tract is e/tered i/to .ith /o expectatio/ of ac>uiri/g such a/ i/terestA or E0F Where the polic2 is made Ri/terest or /o i/terest:= or R.ithout further proof of i/terest tha/ the polic2 itself:= ... or su07ect to a/2 other like term.9 J. #/sura0le #/terest ,efi/ed. E4F $u07ect to the pro8isio/s of this 'ct: e8er2 perso/ has a/ i/sura0le i/terest .ho is i/terested i/ a maritime ad8e/ture. E6F #/ particular a perso/ is i/terested i/ a maritime ad8e/ture .here he sta/ds i/ a/2 legal or e>uita0le relatio/ to the ad8e/ture or to a/2 i/sura0le propert2 at risk therei/: i/ co/se>ue/ce of .hich he ma2 0e/efit 02 the safet2 or due arri8al of i/sura0le propert2: or ma2 0e pre7udiced 02 its loss: or damage thereto: or 02 the dete/tio/ thereof: or ma2 i/cur lia0ilit2 i/ respect thereof.9 9,isclosure a/d "eprese/tatio/s9 N4G ... ' co/tract of mari/e i/sura/ce is a co/tract 0ased upo/ the utmost good faith: a/d: if the utmost good faith 0e /ot o0ser8ed 02 either part2: ...*OT ... if this good faith 0e /ot o0ser8ed 02 either part2: there 0ei/g a/2 co/cealme/t or /o/;disclosure of a material particular: the co/tract ma2 0e a8oided 02 the i/7ured part2A9 N44 ... Warra/t2 of %egalit2. ;; There is a/ implied .arra/t2 that the ad8e/ture i/sured is a la.ful o/e: a/d that: so far as the assured ca/ co/trol the matter: the ad8e/ture shall 0e carried out i/ a la.ful ma//er ... *OT $: ... it seems that the assured ca//ot hold the i/surer to a .ai8er of illegalit2 for ... o/l2 legal ad8e/tures ca/ 0e i/sured.9 9The )ari/e #/sura/ce E&am0li/g ?oliciesF 'ct: 45H5: E5 d.. G c. 46F 4. ?rohi0itio/ of gam0li/g or loss 02 maritime perils. E4F #f ; EaF '/2 perso/ effects a co/tract of maritime i/sura/ce .ithout ha8i/g a/2 0o/afide i/terest: direct or i/direct: ... or a 0o/afide expectatio/ of ac>uiri/g such a/ i/terestA ... the co/tract shall 0e deemed to 0e a co/tract 02 .a2 of gam0li/g o/ loss 02 maritime perils ... '/d: from 9'/ ssa2 o/ )aritime %oa/s from the @re/ch9 of ). !althazard )arie merigo/: .e fi/d: 9The %e/der Eof a )aritime %oa/F .as /ot prohi0ited from dema/di/g pledges a/d h2pothecatio/s as a/ additio/al securit2A pro8idi/g it .as /ot a pretext for exacti/g maritime i/terest after the sea risk should 0e at a/ e/d.9 9#t is esse/tial to this co/tract that there 0e a risk: a/d that the risk 0e i/curred 02 the le/der ... The stipulatio/: i/terest or /o i/terest is a real .ager ... This is /ot permitted amo/g us ...9 9#f the co/tract .as 8oid i/ its comme/ceme/t: the maritime i/terest is /ot chargea0le: 0ecause /o maritime da/gers .ere 0or/e 02 the le/der.9 9,iffere/ce 0et.ee/ co/tracts of 0ottomr2 a/d those of %oa/: ?art/ership a/d i/sura/ce. !ottomr2 is differe/t from the co/tract of loa/ 0ecause: 4. The peril of mo/e2: simpl2 le/t: co/cer/s the 0orro.er: .hereas mo/e2 le/t at 0ottomr2 is at the risk of the le/der. 6. #/ a simple loa/: i/terest is due 02 positi8e stipulatio/ o/l2A .hereas: maritime

i/terest is implied i/ the co/tract itself. 3. #/ a simple loa/: the i/terest: amo/g mercha/ts: could /ot exceed the rate fixed 02 the ?ri/ce: or: at most the custom of the cou/tr2A .hereas: 0ottomr2 ma2 carr2 a/2 i/terest.9 9 ... )aritime i/terest is /ot su07ect to the limits of ordi/ar2 legal i/terest: 0ut that it ma2 0e regulated 02 the degree of da/ger to .hich the le/der exposes or 0elie8es he exposes his mo/e2.9 9The co/tract of maritime loa/ approaches more /earl2 to that of #/sura/ce. There is a stro/g a/alog2 0et.ee/ them. #/ their effects the2 are co/strued o/ the same pri/ciples. #/ the o/e co/tract: the le/der 0ears the sea risks: i/ the other: the u/der.riter. #/ the o/e: the maritime i/terest is the price of the perilA a/d this term correspo/ds .ith the premium .hich is paid i/ the other.9 @rom the )ari/e #/sura/ce 'ct of 45H6. ?re8iousl2 referred to: N86. ... /forceme/t of retur/. ; Where the premium or a proportio/ate part thereof is: 02 this 'ct: declared to 0e retur/a0le: ; EaF #f alread2 paid: it ma2 0e reco8ered 02 the assured from the i/surerA a/d E0F #f u/paid: it ma2 0e retai/ed 02 the assured or his age/t.9 N84. ... "etur/ for failure of co/sideratio/. E4F Where the co/sideratio/ for the pa2me/t of the premium totall2 fails: a/d there has 0ee/ /o fraud or illegalit2 o/ the part of the assured or his age/ts: the premium is thereupo/ retur/a0le to the assured ... E3F #/ particular ; EaF Where the polic2 is 8oid: or is 8oided 02 the i/surer as from the comme/ceme/t of the risk: the premium is retur/a0le pro8ided that there has 0ee/ /o fraud or illegalit2 o/ the part of the assuredA9 $o 2ou see: that pursua/t to the ?ositi8e %a. of the %a. of *atio/s: if there has 0ee/ /o fraud or illegalit2 o/ 2our part ;; a/d 2ou ha8e marshalled 2our facts to pro8e that the @ederal "eser8e co/tract is a .ageri/g polic2: 2ou ca/ 8oid the co/tract a/d are e/titled to a refu/d of all premiums paid. '/d: i/ the 3alifor/ia #/sura/ce 3ode: .e fi/d: $ 3.45HH. ,ut2 to ,isclose #/ mari/e i/sura/ce each part2 is 0ou/d to commu/icate: i/ additio/ to .hat is re>uired i/ the case of other i/sura/ce: EaF 'll the i/formatio/ .hich he possesses a/d .hich is material to the risk: except such as is exempt from such commu/icatio/ i/ the case of other i/sura/ce. E0F The exact a/d .hole truth i/ relatio/ to all matters that he represe/ts or: upo/ i/>uir2 assumes to disclose. *o.: let=s co/sider the pu0lic polic2 as stated i/ the ?ream0le to the +/ited $tates 3o/stitutio/ a/d compare this stateme/t of pu0lic polic2 to the pu0lic polic2 of the ?ositi8e %a. of the %a. of *atio/s deali/g .ith .ageri/g policies: a/d to the so;called pu0lic polic2 of the @ederal "eser8e 'ct a/d H1";456M The ?ream0le to the +/ited $tates 3o/stitutio/ states: 9We the ?eople of the +/ited $tates: i/ order to form a more perfect +/io/: esta0lish 1ustice: i/sure domestic Tra/>uilit2: pro8ide for the commo/ defe/se: promote the ge/eral Welfare: a/d secure the !lessi/gs of %i0ert2 to oursel8es a/d our ?osterit2: do ordai/ a/d esta0lish this 3o/stitutio/ for the +/ited $tates of 'merica.9

This ?ream0le is a stateme/t of 9?u0lic polic29 u/der the 9co/8e/tio/al9 0ra/ch of the %a. of *atio/s. $i/ce .ageri/g policies: i/terest or /o i/terest i/sura/ce policies: a/d maritime loa/s at /o risk to the le/der are for0idde/ u/der the pu0lic polic2 of the ?ositi8e %a. of *atio/s ;; reaso/ a/d logic dictates that the: so;called: pu0lic polic2 of the @ederal "eser8e 'ct a/d H1";456 are /ot pu0lic polic2: as alleged 02 3o/gress: a/d the $upreme 3ourt i/ the rie ".". decisio/ ;; 0ut: i/stead: are precisel2 the co/trar2. 3o/gress: therefore: had /o authorit2 a/d 7urisdictio/ to e/act the @ederal "eser8e 'ct: or H1";456: a/d it logicall2 a/d reaso/a0l2 follo.s that these acts are a /ullit2: a0 i/itio. 3o/gress is gra/ted the po.er to defi/e a/d pu/ish offe/ses agai/st the la. of /atio/s i/ 'rticle 4: $ectio/ 8: of the +/ited $tates 3o/stitutio/A a/d: therefore: has the dut2 to do so. We su0mit that the la. a/d the facts prese/ted here toda2 esta0lish 0e2o/d a/2 reaso/a0le dou0t that 3o/gress has authorized a/d impleme/ted a .ageri/g polic2 a/d sa/ctio/ed crimes a/d offe/ses perpetrated a/d committed agai/st the people of the +/ited $tates 02 the @ederal "eser8e !oard a/d its class ' stockholders. 3o/se>ue/tl2: it also follo.s that /o $tate assem0l2 or legislature had the authorit2 a/d 7urisdictio/ to h2pothecate the $tate=s treasuries: la/d a/d people as securit2 to the @ederal "eser8e. Our $tate courts are operati/g i/ 'dmiralt2 7urisdictio/: for the most part. E"emem0er the )c3arre/ 'ct .hich declared that the co/ti/ued regulatio/ a/d taxatio/ of i/sura/ce 02 the states .as i/ the pu0lic i/terest< ;; a/d that 1udge @rie/dl2 said that: as a result of the rie ".". decisio/: the $tate courts must co/form to @ederal decisio/s i/ areas .here 3o/gress has ma/ifested a/ i/te/t to that e/d< ;; a/d that the rie ".". decisio/ .as a result: a/d impleme/tatio/ of: the 9?u0lic polic29 stated i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

3O*T"'3T O" 3O))#TT , ' )'"#T#) TO"T: $#*3 3O))O*;%'W 3O+"T$ H'- T"',#T#O*'%%( *T "T'#* , $+3H ?"O3 ,#*&$. ' $T'T 3O+"T H'$ 1+"#$,#3T#O* WH " TH $+#T #$ #* ? "$O*') '&'#*$T '* #*,#-#,+'%: '+X#%#'"( 'TT'3H) *T '&'#*$T ' ?'"T#3+%'" TH#*& O" '&'#*$T TH ?"O? "T( O@ TH , @ *,'*T #* & * "'%.9 $ 3T#O* 8:484. #* & * "'% 9& * "'%%(: TH $T'T 3O+"T$ H'- 3O*3+"" *T 1+"#$,#3T#O* W#TH TH @ , "'% 3O+"T$ #* @ , "'% 3#-#% )'TT "$: +*% $$ TH +*#T , $T'T $ 3O*$T#T+T#O* O" '* '3T O@ 3O*&" $$ ?"O-#, OTH "W#$ . @ , "'% '*, $T'T 3O+"T$ '" X?" $$%( &#- * 3O*3+"" *T 1+"#$,#3T#O* #* $O) )'TT "$ !( @ , "'% $T'T+ : #*3%+,#*& ... %#'!#%#T( '3T '3T#O*$: ...9 There is a/other su07ect matter that falls exclusi8el2 .ithi/ the 7urisdictio/ of 'dmiralt2 that .e should all 0e a.are ofA a/d that is 9"e8e/ue 3auses:9 #/ ,elo8io 8. !oit: the court said: 9' third expositio/ re>uires a/ exami/atio/ of the authorit2 a/d po.ers of the -ice 'dmiralt2 3ourts i/ the +/ited $tates u/der the colo/ial go8er/me/t ... The commissio/s of the cro./ ga8e the courts: .hich .ere esta0lished: a most ample 7urisdictio/ o8er all maritime co/tracts: a/d o8er torts a/d i/7uries: as .ell i/ ports as upo/ the high seas. '/d acts of parliame/t 02 gi8i/g or co/firmi/g cog/iza/ce of all seizures for co/tra8e/tio/s of the re8e/ue la.s.9 Eemphasis addedF '/d i/ the Hu/tress 3ase: 9@or more tha/ a ce/tur2 0efore the formatio/ of the 3o/stitutio/: that is: from the earl2 part of the reig/ of 3harles ##: re8e/ue causes had 0ee/ heard a/d tried i/ the colo/ies 02 courts of -ice 'dmiralt2.9 Eemphasis addedF *either the ,eclaratio/ of #/depe/de/ce: the 3o/stitutio/: /or a/2 su0se>ue/tl2 e/acted statutes ha8e modified the origi/all2 esta0lished 7urisdictio/al 0ou/daries o8er re8e/ue causes i/ this cou/tr2. #/ summar2: some su07ect matters a/d causes that are exclusi8el2 .ith 'dmiralt2/)aritime 7urisdictio/ are: P %imited %ia0ilit2 P !ills: /otes: a/d che>ues issued 02 the +.$. &o8er/me/t P 3redit 0orro.ed i/to circulatio/ 02 the +.$. &o8er/me/t P H2pothecatio/s P -iolatio/ of a maritime co/tract P 3ommissio/ of a )aritime tort Efor example: failure to perform a/ o0ligatio/ fou/ded i/ a maritime co/tract.F These are exclusi8el2 .ithi/ the 7urisdictio/ of 'dmiralt2/)aritime ;; .hether the claim is so ide/tified or /otM 1udge @rie/dl2 also said that the %i/col/ Hills ,octri/e Edeali/g .ith la0or co/tracts a/d commerceF .as 9preg/a/t .ith possi0ilities.9 #/ this co/text the frie/dl2 7udge .as

talki/g a0out the possi0ilities of @ederal courts i/creasi/g their po.ers 0ecause of the /ature of the source: a/d the /ature of the right 0ei/g e/forced. That source 0ei/g the credit 8o2age ;; a/d that right 0ei/g deri8ed from a maritime co/tract u/der 'dmiralt2/)aritime 7urisdictio/. We are co/sta/tl2 told that: toda2: the la. is .hat the $upreme 3ourt sa2s it is. Well: that is perfectl2 true: if this 8o2age is .ere la.ful o/e ;; it is a0solutel2 /ot true: if this 8o2age Ethe source of its i/creased po.ersF .as u/la.ful from its i/ceptio/. The task 0efore us is clear. )a20e .e ca/ take a page or t.o from their o./ 0ook. The facts a/d la. prese/ted here toda2 are trul2 preg/a/t .ith possi0ilities for those of us .ho .a/t to appl2 them effecti8el2MM *o. that .e u/dersta/d the particulars of ho. .e ha8e 0ee/ tricked i/to 7oi/i/g this maritime 8o2age for profit: a/d .hat: a/d .here our remedies are: .e .ill the/ ha8e to k/o. much more fact a/d la.: i/ order to do this: .e .ill ha8e to k/o. ho. to a/al2ze a/d determi/e .hich 7urisdictio/ a particular issue is i/ ;; or should 0e i/A .e .ill ha8e to k/o. courtroom procedures for that particular 7urisdictio/: .e .ill ha8e to u/dersta/d the esse/tial issues a/d k/o. them i/side;out a/d fro/t.ard a/d 0ack.ardsA .e .ill ha8e to de8elop a .i//i/g strateg2 to appl2 a/d use this k/o.ledge most effecti8el2. (ears ago: particularl2 i/ the late 45GH=s ma/2 of us .ere 0ri/gi/g 3i8il: 3ommo/ %a.: actio/s i/ $tate a/d @ederal courts ;;0ased o/ alleged 8iolatio/s of 3o/stitutio/al a/d 3ommo/ %a. rights u/der color of la.. 'll of these complai/ts .ere summaril2 dismissed o/ the grou/ds that 9There is /o cause of actio/ stated for .hich the court ca/ gra/t relief.9 Others ha8e relied o/ 3ommo/ %a. defe/se i/ crimi/al actio/s. There ha8e 0ee/ a fe. mi/or 98ictories9 ;; some stalemates ;; ma/2 outright losses ;; a/d: /e8er: a su0sta/ti8e .i/. 8e/ i/ crimi/al cases: some of us ha8e 0ee/ told that: 9(our la. is 8alid a/d sou/d: 0ut 2our co/clusio/s are .ro/g.9 What .ere the courts telli/g us< %et=s co/sider a h2pothetical situatio/. (ou are i/ $a/ @ra/cisco: short of fu/ds: a/d hear a0out a fa/tastic 8o2age o/ a ship a0out to set sail from port ;; securit2 a/d profits guara/teedMM (ou go do./ to the ship a/d sig/ up to the 8o2age. %et=s also assume that material facts a0out the 8o2age are .ithheld from 2ou: i/ order to i/duce 2ou to sig/ up ;; a/d: that the co/templated 8o2age .as i/ 8iolatio/ of the positi8e la.s of the %a. of *atio/s: a/d .as co/trar2 to the mea/i/g a/d i/te/t of the +/ited $tates 3o/stitutio/. *e8ertheless: the ship sets sail i/ the middle of the /ight ;; .he/ /o o/e .as .atchi/g from the shore. 'fter a .eek at sea: 2ou ha8e disco8ered that co/cealme/t of material facts ;; a/d that 2ou are o/ a/ u/la.ful 8o2age. (ou go to the 3aptai/: i/form him of 2our /e.l2 disco8ered e8ide/ce ;;a/d dema/d 2our 3o/stitutio/al a/d 3ommo/ %a. rights: as a +/ited $tates citize/. What do 2ou suppose the 3aptai/ is goi/g to do<< He has /o 7urisdictio/ to hear 3ommo/ %a. complai/ts ;; his sole respo/si0ilit2 is to i/sure the safet2 of the 8o2age: u/der )aritime %a.. His o/l2 7urisdictio/ is u/der maritime la.. He sees 2ou as possi0l2 i/flue/ci/g other mem0ers of the cre. ;; there02 fome/ti/g

a muti/2. To him: his dut2 is clear: He must mete out a form of pu/ishme/t: to some degree: there02 i/stilli/g i/ other mem0ers of the cre. a fear of 7oi/i/g i/ that li/e of co/duct. Therefore: he ma2 gi8e 2ou o/e of t.o alter/ati8es: E4F &o 0ack to .ork a/d co/ti/ue to perform: a/d # .ill forgi8e this out0urst: a/d allo. 2ou to remai/ o/ this 8o2age: if 2ou agree to pa2 a pe/alt2 .hich # shall determi/e a/d impose. E6F #f 2ou refuse to perform: # .ill order 2ou to 0e co/fi/ed to the !rig. What: i/ this situatio/: is 2our recourse< O08iousl2 /o/e: u/til 2ou get 0ack to a port. %et=s sa2 that: e8e/tuall2: that port is *e. (ork ;; /o.: .hat ca/ 2ou do that makes se/se< E4F #f 2ou ca/ fi/d a court of 3ommo/ %a. 7urisdictio/: 2ou ca/ file a 3ommo/ %a. actio/. The o/l2 proper issue i/ this court 0ei/g fraud: a/d fraud is /ot eas2 to pro8e. *o.: .e k/o. that there are /o 3ommo/ %a. courts i/ *e. (ork ;; a/d .e k/o. .h2. $o: .here does that lea8e 2ou<< E6F The o/l2 place left for 2ou to go is i/to a/ 'dmiralt2 court: a/d 2ou ca/ fi/d a proper court of 'dmiralt2 7urisdictio/: i/ *e. (ork: to hear these issues. (ou ca/ file a/ actio/ i/ admiralt2 .here the proper issues are: u/der 'dmiralt2 a/d )aritime %a.: the u/la.ful/ess of the 8o2age itself: from its i/ceptio/: pursua/t to the ?ositi8e la. of the %a. of *atio/s ;; all goi/g directl2 to the issue of 7urisdictio/: 0ased o/ the fact that the co/tract .as a /ullit2: a0 i/itio. *o.: 2ou ha8e a proper cause of actio/ filed i/ a court of compete/t 7urisdictio/MM The possi0ilities are trul2 preg/a/t 0ecause .e ca/ pro8e se8eral 8iolatio/s of the ge/eral )aritime %a. of all /atio/s ;; la.s that .ere de8eloped to protect the mercha/ts a/d e/ha/ce commerce ;; la.s that a/2 )aritime court i/ the .orld is 0ou/d 02MM To de/2 these la.s: a/d properl2 prese/ted facts a/d issues: .ould: there02: destro2 the 8er2 fou/datio/s that this merca/tile superstructure is 0ased upo/. 'fter ma/2 futile attempts .ith 3ommo/ %a. issues a/d actio/s: that: 7ust possi0l2: there ma2 0e somethi/g more to the la. 0ei/g applied i/ the courts tha/ .e k/e. a0out. #t da./ed o/ us that a far more comprehe/si8e approach to the pro0lem: tha/ had e8er 0ee/ attempted 0efore: .ould ha8e to 0e u/dertake/ if there .as a/2 possi0le solutio/ 'T %'W. We are all i/8ol8ed i/ a situatio/ that /ot o/l2 is e/sla8i/g us: 0ut .ill make the li8es of our childre/ a/d gra/d;childre/ u/0eara0le. #f .e are to experie/ce true freedom: .e must educate oursel8es /o.. We: as so8ereig/ i/di8iduals: ha8e all the po.er .e /eed to tur/ this i/sa/e s2stem arou/d. This docume/t has 0ee/ edited 02 ldo/ Warma/: 34H:84J;JH '8e $W: 3algar2. 6J5; HHH6. This 0rief ide/tifies the chai/s .ith .hich the2: the )ercha/ts of -e/ice a/d their direct desce/da/ts: ha8e used to make: .e the people of *orth 'merica i/to de0t sla8es. The )ercha/ts of -e/ice 0astardized the ma/2 courts of urope duri/g the )iddle 'ges so as to effect their co/ti/ued co/trol: .hich the2 had esta0lished duri/g the period after the collapse of the "oma/ mpire up to the ,ark 'ges. The direct effect o/ us .as their i/flue/ce i/ the 8arious mixi/gs of the %a. of the $ea .ith the %a. of the %a/d i/ the !ritish %imited )o/arch2 s2stem. The situatio/ is as a frog immersed i/ cold .ater

0rought slo.l2 to a 0oilA the poor creature does/=t recog/ize the temperature cha/ge a/d cooks u/a.are. #t is >uite o08ious that the &o8er/me/t of 3a/ada has 0ee/ usi/g similar tactics to e/sla8e the people of 3a/adaA a/d: to tur/ o8er this cou/tr2=s ra. materials to the O8erlords .ho hold the eco/omic stri/gs .hich co/trol it. $i/ce editi/g this docume/t for 3a/adia/ readers E4556F: # ha8e lear/ed that the !*' 'ct of 486G did /ot co/federate 3a/adaA 0ut: o/l2 com0i/ed four !ritish colo/ies i/to o/e colo/2: the ,omi/io/ E3olo/2F of 3a/ada. The go8er/me/t .as a dictatorship: a &o8er/or &e/eral a/d 3ou/cil E3a/ada=s ?arliame/tF. The status of 3a/ada .as similar to that of a ship of the !ritish 'dmiralt2. The status of the people of 3a/ada .as similar to sailors o/ a ship of the !ritish 'dmiralt2A /ot that of a/ /glish freema/. #/ 4534: the $tatute of Westmi/ster effecti8el2 decommissio/ed the colo/ies of the !ritish mpire 7ust as the2 .ould decommissio/ outdated ships of the 'dmiralt2. 3a/ada .as take/ o8er 02 a usurper cli>ue of fi/a/cial 0aro/s at that time: supposedl2 u/der the 9right of sal8age9: a/d: /o cha/ge has take/ place si/ce the/......... 't the time of .riti/g of this docume/t: the author .as o08iousl2 u/a.are of the status of 9+$ citize/9. 's origi/all2 co/cei8ed: the $tates .ere i/depe/de/t cou/tries tied together 02 a pact or treat2 i/ .hich certai/ so8ereig/ states rights .ere gi8e/ o8er to a federal go8er/me/tA first i/ the 'rticles of 3o/federatio/: a/d the/ more succi/ctl2 i/ the 3o/stitutio/ of the +$'. ach perso/ 0or/ .ithi/ a $tate or /aturalized i/ a $tate .as a citize/ of that $tateA a/d the/ 02 the 9commo/alit2 clause9 of the 3o/stitutio/: a citize/ of the other $tates ; a citize/ of the +$'. @or emi/e/t domai/ purposes: so that the @ederal &o8er/me/t could purchase la/d E%ouisia/a ?urchase a/d 'laska ?urchaseF a/d e/ter i/to i/ter/atio/al treaties: a piece of la/d Ea @ederal $tateF .as pro8ided for i/ the 3o/stitutio/ Ea /ecessit2 arisi/g out of the rules go8er/i/g emi/e/t domai/F. $i/ce the @ederal &o8er/me/t .as /ot gi8e/ a/2 $axo/ 3ommo/ %a. 7urisdictio/ i/ the 3o/stitutio/ E.hether this .as 02 o8ersight or 02 desig/i/g scheme: co/sideri/g later circumsta/ce: remai/s for co/7ectureF ; o/l2 )aritime 7urisdictio/: the people .ithi/ such a federal state EWashi/gto/: ,3F come u/der )aritime la.. #/ legal terms: +/ited $tates o/l2 mea/s the ,istrict of 3olum0ia: some territories: a/d /a82 0ases. The +/ited $tates of 'merica is the com0i/ed JH $tates. Through i/terpretatio/s of the @ourtee/th 'me/dme/t a/d the $ocial $ecurit2 'ct Ethe act of appl2i/g for a/d recei8i/g a $ocial $ecurit2 *um0er 0ei/g the 0i/der of the co/tractF: a +$' citize/ also 0ecomes a +$ citize/. The former has 3ommo/ %a. "#&HT$: the latter has )aritime ?"#-#% & . The author ade>uatel2 co8ers the differe/ces i/ 3ommo/ %a. a/d )aritime %a.. The former citize/ship 2ou .ere 0or/ or 9/aturalized9 i/toA the latter: 2ou .ere hood.i/ked i/to. ..................... *,Q

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close