Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

The Crime of Committing Sound Money

Politics / Fiat Currency Jun 21, 2009 - 03:17 AM GMT

By: LewRockwell


Best Financial Markets Analysis ArticleBetsy Hansen writes: Until we abolish legal tender laws, all attempts on the part of entrepreneurs to set up gold and silver banking institutions will be labeled as "a tax evasion scheme to hide income."

If you don’t believe me, ask Franklin Sanders. He is a man who knows first-hand, that when you try to question the government’s role in our monetary affairs, you don’t have a chance. How can one man win in a battle for economic freedom against the government, when the government has vast monetary resources through its control of the printing press and armed attack squads that can use brute force against anyone who challenges government decrees?

Mr. Sanders fought gallantly given the impossible circumstances in which he found himself. He ran a gold and silver bank for more than a decade, serving customers in Mississippi, Arkansas and Tennessee. His hope was to run his business as a truly free bank, such that he would exchange Federal Reserve notes for gold and silver – and here is the kicker – he tried to do that without charging sales tax on the exchanges. It is true, what Mr. Sanders was doing was entrepreneurial suicide, but you have to give him credit for showing courage and tenacity.

In 1980, he opened his doors for the first time, selling physical gold and silver. According to his fascinating autobiographical essay, available on his website:, he did his best to cover his bases with the local authorities:

First thing I did was, write to the Arkansas Attorney General to explain that I thought exchanges of gold and silver money for paper money weren’t subject to the sales tax, since they were exchanges of money for money.

Even though no one chose to respond to him, he continued to contact local political officials to confirm that his business was not violating state law. He even wrote to the Commissioner of Revenue to inform him of what he was doing – to no avail. He never got a response from anyone, at least not until Revenue officers and IRS criminal Investigation Division (CID) agents came to harass him.

During the time he was left alone, his bank did very well. He attracted depositors from all over. The government brought a swift end to his business, however. First, they forced him to move to another state, and then, they scared all of his customers away by requiring that they send records of their exchanges with him to IRS CID agents, threatening to issue subpoenas to whoever refused to comply. After his first dramatic escape from IRS hounds, Sanders opened his doors in another state:

I moved my business to Tennessee, doing the same thing, exchanging gold and silver money for Federal Reserve notes. By this time I had realized that although every American had a constitutional and legal right to gold and silver money, the problem was, you couldn’t use them in everyday business. We had the right to sound money, but no means. We needed an interface between the paper system and gold and silver. So in May, 1984 I opened a gold and silver bank. I attracted depositors like wildfire, but somebody didn’t like my idea.

After years of harassment, Sanders was eventually arrested. As Murray Rothbard repeatedly reminds us, the government reviles anyone that challenges its monetary monopoly. The harsh treatment of Sanders illustrates this point. "My bond was set at $150,000, fully secured. For comparison, that same day they arrested a child molester and set his bond at $10,000, not secured." A powerful quote that accounts for Sanders’ treatment came directly from the agents of the government: "The assistant US attorney here told one lawyer that I was ‘the most dangerous man in the mid-South.’ In a four and a half year investigation the government spent $5–$10 million, maybe more."

According to Sanders, the government was desperate to claim that he was the mastermind behind a cluster of illicit activities. Foremost among them was "delaying and depriving the state of revenue to which it was lawfully entitled at the time it was lawfully entitled thereto." The government’s inch thick indictment claimed that a total of 26 people, with Franklin Sanders at the helm, were part of a "conspiracy to defraud the government, willful failure to file, and divers other malefactions. The government claimed that the gold and silver bank was a tax evasion scheme to hide income."

Sanders tried to use the law in his defense, but his points went unanswered. "On the money issue, the real heart of the case, the court dodged and denied all my arguments." They obviously had no historical or theoretical background that would open their eyes to the truth of his arguments. If Austrian-Libertarian leaning individuals heard his arguments they would cheer in approval. Take this statement, for example, in which he brilliantly states what Austrian economists have been trying to convey to the public for decades:

They were charging me with not collecting sales tax on exchanges of gold and silver money for paper money. You know – like when you go to the bank, and give the teller a twenty and she gives you back a ten and two fives, less sales tax. What? She doesn’t charge you with sales tax? Of course not, because it’s an exchange of money for money.

He attempted to battle in court for his right to exchange what he considered to be "money for money." Yet, he was trying to fight a legal battle in "Legal Never-Neverland: monetary law." In his fiercely direct style, he explains the dilemma that anyone faces when they try to argue with the government over monetary freedom.

neither the state of Tennessee nor any other state can admit that gold and silver coins are money. If they do, they will admit they are operating outside the law. The monetary emperor is naked, and state officials from the Chief Justice of the Supreme Court to the governor to the second assistant tire checker are afraid to tell him. They should be afraid, because the monopoly on money creation is the jugular vein of the American fascist state.

He understands how dangerous and perverse the government’s control over our monetary system is. He tried to battle the government with the best legal arguments he could muster, but since the government’s legal bureaucrats would never address the money issue, he lost his case, after fighting a legal battle that lasted for 15 years. That takes fortitude! To those who would question his sanity for pursuing an obviously unwinnable legal battle, he says:

Why keep on fighting? After 15 years, why not just put down the load and forget it? Because the fiat money system is both the strength and weakness of America’s tyrants. It bleeds the people’s wealth and labor, but it also threatens to collapse under its own weight – or whenever the scales fall off the people’s eyes. With its green engravings of famous Americans, electrons whirling around in bank computers, and loans created out of thin air, it is one vast confidence game.

Franklin Sanders’ story reminds us that the future of private enterprise in money has no chance until we abolish legal tender laws, and remove all forms of taxes on commodity money. This type of change will require a political revolution. Unless we witness a mass political movement demanding monetary freedom, I do not see any way forward for a market-driven substitute to the government’s monopoly over money. We have to gather and inspire enough political will to abolish legal tender laws and all taxes on commodity money.

Betsy Hansen [send her mail] is a summer fellow at the Mises Institute. See her site.

    © 2009 Copyright - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules