Jerome Daly, a Minnesota attorney, was Defendant in a foreclosure case brought against him by The First National Bank of Montgomery heard in a trial by jury in Credit River Township, Scott County, Minnesota December 7, 1968 with Justice Martin V. Mahoney presiding. Prosecution’s main witness was Bank President Lawrence V. Morgan; Jerome Daly defended himself.
The main issues were whether or not the loan transaction constituted a legal consideration and whether or not Mr. Daly waived his rights to complain by having paid his loan for three years. For any loan transaction to be legal and binding a lawful “consideration” must be brought to the table by both parties. Mr. Daly said as consideration he put up his property and asserted that the bank provided no consideration but merely created money out of thin air! Mr. Morgan admitted that by making a book-keeping entry the bank created the money out of nothing but that this was standard practice exercised by his bank in conjunction with the Federal Reserve Bank of Minneapolis, another private bank. When questioned by Daly he also conceded that he knew of no United States Law or Statute that gave the bank authority to create money out of nothing. Judge Mahoney was heard to say, “That sounds like fraud to me.” The bank went on to claim that Defendant Daly accepted the ledger book credit and by paying for years, waived his right to complain about the consideration and was legally estopped from doing so. The jury unanimously found for the Defendant, Jerome Daly. Justice Mahoney’s Judgment and Decree contain these major points:
• The Plaintiff (the bank) was not entitled to recover the possession of [property].
• Because there was no lawful consideration the mortgage was Null and Void.
• The Bank parted with absolutely nothing except a little ink.
• The Plaintiff had no right, title, interest or lien on the property.
• Defendant is awarded costs…
In his Memorandum Justice Mahoney went on to say, “The jury found there was no lawful consideration and I agree. …. Even if the Defendant could be charged with waiver or estoppel as a matter of Law this is no defense [sic] to the Plaintiff. The Law leaves wrongdoers where it finds them…. Plaintiff’s act of creating credit is not authorized by the Constitution and Laws of United States, is unconstitutional and void, and is not lawful consideration in the eyes of the Law to support any thing [sic] or upon which any lawful rights can be built…. It has never been doubted that a Note given on a Consideration which is prohibited by law is void… ”
The hearing held Jan. 22, 1969 for purposes of making Findings of Fact and Conclusions of Law saw no Bank representative in attendance. The following 12 points are quoted in part directly from Justice Mahoney’s report (http://www.lawlibrary.state.mn.us/C...)...
• “The Federal Reserve Banks and National Banks create money and credit upon their books and exercise the ultimate prerogative of expanding and reducing the supply of money or credit in the United States. The creation of this money or credit constitutes the creation of fiat money upon the books of these banks.
• When the Federal Reserve Banks and National banks acquire United States Bonds and Securities, State Bonds and Securities, State Subdivision Bonds and Securities, mortgages on private real property and mortgages on private personal property, the said banks create the money and credit upon their books by bookkeeping entry. The first time that the money comes into existence [sic] is when they create it on their bank books by bookkeeping entry. The banks create it out of nothing. No substantial fund of gold or silver is back of it, or any fund at all.
• The Federal Reserve Bank obtains Federal Reserve Notes [no matter what denomination] for the cost of printing of each note which is less than one cent. The net effect of the entire transaction is that the Federal Reserve Bank obtains Federal Reserve Notes … for the cost of printing only.
• From 1913 down to date, the Federal Reserve Banks and the National Banks are privately owned. As of March 18, all gold backing is removed from the said Federal Reserve Notes. No gold or silver backs up these notes.
• The Federal Reserve Notes in question in this case are unlawful and void… being contrary to Article 1, Section 10, of the Constitution of the United States… are not lawful money of the United States; are in violation of the Constitution of the United States and are not valid for any purpose.
• Said notes are fiat money, not redeemable in gold or silver coin upon their face, not backed by gold or silver, and the notes are in want of some real or substantial fund being provided for their payment on redemption.
• The sole consideration paid for the One Dollar Federal Reserve Notes is in the neighborhood of nine-tenths of one cent, and therefore, there is no lawful consideration behind said Notes… As a matter of fact, the “Notes” are not Notes at all, as they contain no promise to pay.
• The activity of the Federal Reserve Banks… and the First National Bank of Montgomery is contrary to public policy and the Constitution of the United States and constitutes an unlawful creation of money and credit and the obtaining of money and credit for no valuable consideration. The activity of said banks in creating money and credit is not warranted by the Constitution of the United States.
• The Federal Reserve and National Banks exercise an exclusive monopoly and privilege of creating credit and issuing their Notes at the expense of the public, which does not receive a fair equivalent. This scheme is for the benefit of an idle monopoly and is used to rob, blackmail, and oppress the producers of wealth.
• The Federal Reserve Act and the National Bank Act is in its operation and effect contrary to the whole letter and spirit of the Constitution of the United States; confers an unlawful and unnecessary power on private parties; holds all of our fellow citizens in dependence; is subversive to the rights and liberties of the people. It has defied the lawfully constituted Government of the United States. The two banking Acts and Sec. 462 of Title 31, U.S.C. pages 41 and 42, are therefore unconstitutional and void.
• This fraudulent Federal Reserve System and National Banking System has impaired the obligation of Contract, promoted disrespect for the Constitution and Law and has shaken society to its foundations.
• No rights can be acquired by fraud. The Federal Reserve Notes are acquired thru [sic] the use of unconstitutional statutes and fraud.”
Justice Mahoney’s decree still stands and has not been challenged or overturned to this very day, and we herein declare it both pertinent and applicable law in this case .
within 6 months of this decision Justice Martin Mahoney had died by drowning while fishing … seems rather “fishy” to me.