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By Franklin
Sanders
Almost 30 years ago, just a few weeks
before I got married, on a drugstore bookstand I found a strange
book: Capitalism, the Unknown Ideal. It was a collection
of essays about a philosophy of freedom. Two dealt with the
American monetary system. The author explained that nothing --
no gold or silver -- backed our currency. He argued that
sooner or later, this fiat money system would lead to disaster, and
that only a money backed by real value -- gold -- could
last.
That author was Alan Greenspan.
Since then our careers -- Alan's and
mine -- have taken very different paths.
In 1967, Alan Greenspan was already a
fairly well known economic consultant. In the 1970s, President
Ford appointed him to his Council of Economic Advisors. In
1987, Alan Greenspan was appointed Chairman of the Federal Reserve
Board of Governors.
Funny, he doesn't talk much about gold
anymore.
In 1967, I was a college senior.
Susan and I were married on December 16th, and when I graduated in
1968 the draft board gave me 30 days' to frolic before
conscription. I arrived at Fort Polk, Louisiana one hot
October night, caught the Army bus out to the post and sat down
behind the driver, facing across the bus. I opened my copy of
Aristotle's Works and began reading.
I noticed I was the only man on board
with hair. The fellow sitting across from me asked, "Whatcha
reading?" Wordlessly, I flipped up the book so he could read
the title on the spine. "Boy, he said without any reflection.
"Have you come to the wrong place."
In 1969 I retired from the Army to
attend graduate school in German at Tulane University. The
next year I received a full scholarship to the Free University in
West Berlin, where I saw first hand what unchallenged state power
could do. The West was pulsing with life and light, the East
dead and empty. In the Museum of the Wall at Checkpoint
Charlie I read the last radio message from the Free Hungarians in
1956: "Tell Europe we are dying for them."
After Susan and I came home late in
1973 I worked in several businesses, learning first hand what it
means to "make your way in the world." I kept studying economics and
monetary systems, on my own and in graduate classes.
In 1980 I opened my own business in
West Memphis, Arkansas, across the Mississippi from Memphis, selling
physical gold and silver. 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. What was
his official position?
He never bothered to answer my
certified letter. Or the second. Or the
third.
When he finally responded, it was only
to say he wouldn't answer. I wrote to the Commissioner of
Revenue, and told him what I was doing. Nobody ever bothered
to answer that certified letter either, so I reported all my sales
as "exempt". Every month.
A year later, in 1981, a Revenue
officer showed up to audit my books. I told her what I did
wasn't taxable, and that every trade contract contained a
confidentiality guarantee to my customer. She could see them
if she would indemnify me in case some customer sued for breach of
contract. Alas, she didn't want to co-operate, so she just
multiplied all my "exempt" sales by the sales tax percentage, added
penalties and interest, and sent me a bill for about
$30,000.
Thus began my merry pilgrimage through
the courts. I had landed smack in the middle of Legal
Never-Neverland: monetary law. Of course Article I,
Section 10 of the U.S. Constitution says, "No State shall make any
Thing but Gold and Silver Coin a tender in payment of debt."
Of course the definition of "money" at the head of the Arkansas tax
title says, "The term `money' or `monies' shall be had to mean and
include gold and silver coin." Of course the U.S. Code at
Title 12, Section 152 says that "lawful money" means gold and silver
coin of the United States.
Of course, of course, of course . . .
it goes on and on. State and federal constitutions, state and
federal statutes, state and federal court decisions, US supreme
court decisions, all speak with one voice: gold and silver
coin are money, bank notes are not money. But whether I raised
the issue in a Revenue Department administrative court, chancery
court, or federal district court, I ran into the same terrified
reaction. "The monetary emperor is naked! Federal
Reserve notes aren't really money! Quick, rule against this
clown and drag him out of here!"
I appealed the agent's assessment, and
lost at the administrative level. Then at the administrative
court, too. I appealed to chancery court. Had a trial.
Lost there, too. By then it was December, 1983, and I received
a letter from the Arkansas Revenue Department demanding I fork over
$120,000!
A few days later two deputies came to
collect their "judgment." Through several well-nigh miraculous
providences, they got nothing. That night, I decamped from
Arkansas. I was so amazed at God's protection through
this event that I wrote a friend a long letter about it.
Remember that letter.
I moved my business to Tennessee,
doing exactly 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. It attracted depositors like wildfire, but
somebody didn't like my idea. On June 18, 1985, two IRS
Criminal Investigation Division (CID) agents popped in to announce
that I was under criminal investigation. ["Surprise! We just
dropped by to pull out your fingernails with pliers!"].
In the next three years IRS treated me
to the full court press. They got my bank records, and on US
attorney's stationery wrote all my customers, demanding that they
send records from their dealings with me to the IRS CID agent and
threatening the recalcitrant with subpoenas. These letters
remarkably chilled my customers' enthusiasm. It got harder and
harder to make a living.
On September 18, 1986, five agents
from the Tennessee Revenue Department appeared at my office with a
search warrant, pawed my files and records for two hours, and hauled
off boxes of personal papers. That was the first -- and last
-- I heard of them for a long time. They immediately
turned over my papers to the IRS.
In the spring of 1988 the IRS and the
US Attorney's office leap-frogged their investigation from me to my
church. There was nothing unusual about the church. It
wasn't a "tax protest" church, just a member congregation of the
conservative Presbyterian Church in America. The assistant US
attorney subpoenaed church members before the grand jury and grilled
them about what the church taught. Did the pastor teach people
how to not file income tax returns? Did the church have
militia practice in the woods? Survival training? Did
the church hand back contributions under the table? About the
only thing they didn't accuse us of was trafficking in nuclear
warheads.
We landed in the Catch 22 maelstrom of
official suspicion. The more the pastor and the elders proved
to the US attorney's office that these accusations were lies, the
more convinced they became that we were such clever conspirators
that their suspicions must be true. The assistant US attorney
issued a subpoena to the church for all her records:
counselling, sessional, financial, everything. The session of
the church offered to consider any request for specific documents,
but refused to open the Bride of Christ up to a fishing
expedition.
On January 9, 1990, just at dawn, the
IRS struck. Although the agent investigating me knew very well
that I was not violent, IRS agents and Tennessee Revenue Department
agents roared in my driveway while the SWAT team in their black
ninja suits poured out of the woods on either side of my
house.
They attacked with reckless, malicious
disregard for the safety of my wife and seven (7) children.
All they needed to do was pick up the phone and tell me I had been
indicted, and I would have gone downtown. No, these IRS thugs
wanted headlines from a sensational "pre-dawn raid" to scare the
sheep for tax season, and to make me and my wife, the mother of my
seven children, look violent and dangerous.
After they arrested me and Susan, the
IRS refused to leave my home. Contrary to the law and over the
protest of my spunky 15 year old daughter, Liberty, three IRS agents
stayed and held my children hostage until the end of the day.
They were waiting for a search warrant so they could come back and
steal my records and my computer.
On the ride downtown I had no idea
what was going on. Why would they arrest Susan? She had
never done anything other than minor secretarial work in my
business, and spent all her waking hours home-schooling and raising
children.
When I stepped into the jail cell, I
began to understand. They had indicted her to blackmail
me. My friends, customers of the gold and silver bank, and
numerous church members were already there, including my pastor and
assistant pastor. The indictment was an inch thick. In
72 pages it charged 26 defendants with 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. Not
even two years in the US Army had prepared me for stupidity of this
magnitude. How could we hide income when almost everything we
took in was in checks, and we deposited the checks into our bank
account? Oh, yes, we did pass some of the checks along to
other dealers to pay for gold or silver we bought for them, a common
practice in the industry and perfectly legal. This, the
government taught us, was "laundering checks," a sinister activity
proving we were up to no good. But every bank deposit I had made was
a count on the indictment! And Susan -- poor home-making,
home-schooling, never-stop-running Susan -- was the Number Two
conspirator, right after me!
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. I stayed in
jail from Tuesday until Friday, when my parents put up their house
to get me out of jail. When the Federal marshals released me
at 5:00 p.m., sheriff's deputies were waiting to arrest me, and me
alone, on state charges.
I believe but cannot yet prove that an
ex-IRS agent had been sent to work for the Tennessee revenue
department to get the search warrant IRS couldn't get, and to figure
out some way to charge me under state law. (You're not
paranoid if somebody is really persecuting you.) I was charged
with violating a statute that had been on the books nineteen
years: TCA 67-1-1440(d), "delaying and depriving the state of
revenue to which it was lawfully entitled at the time it was
lawfully entitled thereto." In all those 19 years, not a
single Tennesseean had discovered how to violate it, but I had.
Truth to tell, I hadn't even figured it out, since I was accused of
"delaying & depriving" the state of revenue the amount of which
was unknown and to which the state had never become lawfully
entitled. They accused me of a crime I could not possibly have
committed because I didn't know it existed. Never mind, due
process just slows things down
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 sales tax?
Of course not, because it's an exchange of money for money.
But neither the state of Tennessee nor
any other state can admit that gold and silver coin 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.
But in January, 1990, I didn't have
time to worry about state charges. Susan and I were both facing 19
years in jail if convicted in federal court. We knew the
statistics, too. Humanly speaking, we had no chance.
Ninety-eight percent of federal tax prosecutions end in guilty
verdicts.
The next year and a half was a
wretched struggle to persevere without despair. Only a
survivor of a criminal prosecution could understand how it hammers
your soul. Most defendants never make it to trial.
Through the investigation alone, federal agents and prosecutors can
destroy their businesses and their families, and break their spirit.
Stripped of business, money, family, and hope, most plead guilty
just to end the nightmare. In our case one poor defendant pled
guilty with no idea what it meant. When a defense attorney
asked him who he had conspired with, he screwed up his face in
confusion and paused several minutes. "I dunno. Myself,
I guess!"
Our trial began on February 26, 1991,
over a year after our arrest. Right after the noon break that
first day, I received word that our sons Wright (10) and Christian
(8) had been severely burned playing with gasoline.
Susan spent the first two weeks of trial with them in the
hospital.
Just when it seemed that things
couldn't get worse, they did. Day after day I had to listen as
the prosecutor hatefully twisted everything I had ever done into
something evil -- including the good things. This went on for
four and a half long months. The government entered immaterial
documents by the hundredweight.
The vast but tediously shallow
silliness of the whole farce made me the maddest. Do you
remember in C.S. Lewis' Perelandra, when the Unman is struggling to
convince the Green Lady to disobey Maleldil's command not to spend
the night on the land? Ransom notes with dismay the childish
silliness of evil. Throughout the night while the Green Lady
sleeps, the Unman repeats, "Ransom? Ransom?" When Ransom
answers, "What?", the Unman responds, "Nothing." At its
depths, evil is not noble or grand. It's merely a silly,
spoiled child, flicking boogers at his betters.
To the charges of "willful failure to
file income tax returns" we argued that no statute makes anyone
liable for an income tax (except "foreign withholding
agents"). No one -- not the federal district court judge, not
the assistant US attorney, not the IRS, no one -- was able to point
out that statute, because it doesn't exist.
Here was a "man bites dog" story if
ever there was one, but was the local media interested?
Hardly. The first day of trial was covered by an old reporter
for the Commercial Appeal who with great insight described issues
and characters. Next day he was yanked off the case and
replaced with a Stalinist "comrade" who loyally published whatever
official line the US attorney's office gave him.
But our jury was more
open-minded. On July 9, 1991, the jury returned its
verdict: seventeen defendants not guilty on all counts!
To God be the glory! We threw an enormous party and that
Sunday had one bodacious worship service.
I still had to face a state
trial. I no more than caught my breath when I had to dive back
down into the sewage of the "justice system."
The trial started in May, 1992, and
lasted three weeks. The judge and the prosecution did their
best to keep out my evidence -- evidence that showed how many
hundreds of hours I had haunted the law library to study out my
position and make sure I was right.
It did little good. Remember the
letter I wrote a friend when I escaped from Arkansas? The
Revenue Department had seized it in 1986, and the prosecutrix used
it to make me look like a hypocrite.
Even at that, three jurors held out
for three days. I later talked to one of the holdouts, and he
said that one of the women who gave up said, "Oh, well, he'll get
another trial on appeal." Can people really be that ignorant,
or will they just use any excuse to justify their own
cowardice? On May 18, 1992 I was convicted on two counts of
"delaying and depriving."
A month later the judge sentenced me
to two years in jail, but he suspended all but 30 days, provided I
would pay $1,000 a month for 73 months as "restitution" and do 1,000
hours (half a year's work) of community service. With seven
children to support, it was a deal I couldn't refuse.
I appealed. In August, 1994 the
Court of Criminal Appeals overturned one count of the conviction for
double jeopardy. I couldn't be guilty of one count of
"delaying" and one count of "depriving" for the very same
conduct. On the money issue, however, the real heart of the
case, the court dodged and denied all my arguments.
We appealed to the Tennessee Supreme
Court, and they heard the case on All Saints Day, 1995. Dr.
Edwin Vieira, Jr., constitutional attorney and America's foremost
expert on monetary law, prepared the briefs and argued the
case. For over 6 months we heard nothing. Then on May
28, 1996 the Supreme Court affirmed my conviction, once again
dodging the money issue.
I am still appealing, this time into
the federal system, but the appeal couldn't be filed quickly enough
to prevent my arrest on June 28, 1996. The petition for habeas
corpus in federal district court was assigned to the same judge who
had tried our federal case. She took jurisdiction of the
appeal, but refused to order my release. From June 28th until
July 23rd, I was a guest of the Shelby County Jail and the Shelby
County Penal Farm.
The next hurdle is securing a stay of
execution on the $72,000 fine. Failing that, I go back to jail
for another eleven months while the appeal goes on.
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. As long as the people
believe they can't see the emperor's naked pink flesh, his power and
dignity will be preserved. But let one little boy hollers,
"Hey, he's nekkid!" and the tyranny collapses.
I didn't sally forth looking for
dragons to slay. The dragon came to me. He came with a
lie, and either you oppose a lie, or you become a liar. You
can kid yourself and say I'm only going along because they have all
the guns, but day by day, year by year, your integrity erodes.
Finally, you become like the tyrants: just one more
liar.
Even if you have no chance to win, you
have to fight. Not many are willing, but even a few keep the
tyrants from sleeping at night. If we don't fight, how many
more Ruby Ridges and Wacos will there be? How many more SWAT
team attacks? How many more police check points? How
many more bureaucrats watching your bank account and your
finances? How many more children held hostage by IRS
agents? The bill of rights is already dead. Will it be
time to fight when your wife and children are dead, too?
The US government spent millions of
dollars trying to jail me and my wife and my pastor and assistant
pastor. 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. We heard they spent nearly two million on the trial
alone.
We can't both be right. Either
the government is right and gold and silver coin is not money, or I
am right. This is not a gentlemen's "difference of
opinion."
If I'm right, and if I win in the
courts, then no state will ever be able to charge sales tax on gold
and silver coin again. The greatest disability to free trade
in gold and silver will have been removed. We will have broken
own the last illegal roadblock to sound metallic money.
Postscript: Because the
conditions of probation were so burdensome on him and his family,
Mr. Sanders returned to jail and was relocated to a medium-security
prison on November 4, 1996. He was released on December 20,
1996.
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