Income Taxes and Government Fraud

An Interview with John E. Trumane
by Susan B. Anthony

April 12, 1992

A - Susan B. Anthony
M - John E. Trumane


A - So, thus far, you haven't mentioned any benefits that I can relate to.

M - Well, the government gets a little bit outrageous in defining an array, or set of benefits which they are providing for you. They'll argue that they're responsible for the fact that aircraft don't fall out of the sky on you, because they're involved in air traffic control. Okay?

They'll argue that you are receiving a benefit every time you use a Federal Reserve Note, because they've given you the special privilege of discharging your debt with limited liability. That's a fancy way of saying you're not really paying your debt; you're simply giving a debt instrument to discharge your debt, which is a Federal Reserve Note, and it's technically illegal to use Federal Reserve Notes to pay debt. So, Congress is saying they're giving you this enormous privilege to discharge your debts without the liability that's associated with really not paying it with gold or silver.

That's pretty fraudulent, in and of itself, for lots of reasons. For one, Congress really doesn't have the power to create a private credit monopoly which turns around and counterfeits fraudulent Federal Reserve Notes and then injects them back into the economy. That whole scheme is totally unconstitutional.

A - Now, what are these Federal Reserve ... are you talking about dollar bills?

M - Be careful about your terminology. A dollar is a special definition in law. 371.25 grains of silver is a "dollar".

A - Okay. Well, we no longer backed up with silver.

M - We are all trading Federal Reserve Notes; we're not trading "dollars". A - Okay. So we're talking about Federal Reserve Notes. Are you talking about the Federal Reserve Notes that we carry around in our wallet, that we get paid with?

M - Yeah. "Bucks." So it seems pretty circular. It's an "adhesion" contract. It's like an octopus, and the octopus has 250 million tentacles, and each tentacle reaches into everyone's pocket, everyone's bank account, everyone's living. That's how Congress would like it to be. And, of course, they turn around and say, "Oh, we're providing you these enormous benefits." Well, that might be easier to argue if there was still silver and gold circulating, but in 1933, we know now that the federal government was bankrupted, and whatever gold was in the U.S. Treasury was handed over to the Federal Reserve Corporation, which is not a federal government agency. So, they called the loans and foreclosed on the U.S. Treasury in 1933. Roosevelt declared a national emergency and closed the banks for three days, whereupon most of the safe deposit boxes were raided by federal agents. And that's when the scandal really began. We've actually been operating in bankruptcy since 1933.

A - So, what's your thought about how much longer this bankrupt country can continue to operate in bankruptcy?

M - Well, it's self-limiting. They can only extract so much money out of the economy. The idea is to bankrupt private owners so that the banks who are behind this syndicate become the owners of all the assets in this country. That's the real scheme; that's the real motive. By encouraging Congress to spend money it doesn't have, Congress has to turn around and "lien" on American labor and American private property for collateral.

They do that by fraudulent conversion of birth certificates, for example. Doctors, who are franchisees of the State, are obliged to sign birth certificates and forward them on to the Secretary of State in Sacramento. They make certified copies and forward those birth certificates to the Department of Commerce in Washington, D.C. The Department of Commerce does the same thing: they make certified copies and forward them on to the International Monetary Fund in Brussels, Belgium.

Now this is the center of the hub of the banking syndicate and they are, of course, loaning these huge sums to various governments around the world, including the Congress of the United States. The Congress needs something for collateral, and what they use for collateral are these birth certificates. They get treated as certificates in equity which mature on the 18th birthday of the person whose name appears on the birth certificate. The bank then keeps track of these and uses the number that any particular nation has available, as collateral on the international debt, as "performance units" on the international debt. These certificates in equity end up being regarded as "performance units" on the international debt. The more of those you have, the more money you can borrow.

It's like this: the more collateral I have, the more money I can borrow from banks and the more I can secure. So, governments are securing their international debt by "liening" on the persons and property of their citizens. They're doing this on a massive scale, and it's technically a fraudulent conversion of the birth certificate because, if they did that with your birth certificate, they never told you they were doing it. They never told you they were obtaining a lien on your person and starting a third-party debt that you're responsible for. You had no meaningful choice in the matter, which makes it an "unconscionable contract" by definition. This is described in a chapter in my book.

Think of it, very simply, as walking into a department store and saying to the salesman, "I really like that refrigerator over there. I want to buy it. Ship it to my home tomorrow, and send the bill to, say, Willy Brown." So the next day, the refrigerator ends up in your garage, and the bill ends up in Willy Brown's mail. Willy Brown opens his mail and says, "What's this, Sears? One refrigerator, $800? What is this? I didn't buy this. I'm not a party to this transaction. I didn't even know about it. Why are they billing me? There must be a mistake here."

Well, this is kind of like what is happening. In this example, the department store is the Federal Reserve. They're supplying Federal Reserve Notes, right? Willy Brown is the American people, and I -- the one who went in there and bought the refrigerator in the first place -- I represent Congress. And I'm saying, "Don't send the bill to me, send it to the American people. And you can lien on their property, by the way. You can use our police. We'll enforce it for you; we'll extract the money." So that's the fraud.

The fraud is that Congress bankrupted the U.S. Treasury and turned all their gold over to the Federal Reserve banks, which are not federal government agencies. The Federal Reserve is a "municipal corporation" created by an act of Congress, but it's still a corporation. And all that gold is now in their hands. But there wasn't enough to discharge the debt that had accumulated up to 1933. They had to go into bankruptcy to discharge the rest of the debt. They're using standard federal bankruptcy rules for this, but the creditors, of course, are in charge. And they're back there telling Congress, "Go ahead, continue spending more money that you don't have, because we know we'll take it out of the land and the labor of the American people, ultimately." And that's what's going on.

And, of course, the whole scheme has been exacerbated by the fact that the Fed manipulates the economy to cause inflation by controlling the money supply and interest rates. Inflation, of course, puts tremendous pressure on the middle class to turn over their assets, in order to finance their essentials like food, shelter and clothing. So, it's no wonder that land has gotten to be so expensive and labor has gotten to be so expensive, transferring a great deal of wealth out of the hands of middle class and the millions of people who work so hard, day after day, and into the hands of the ruling elite. It's systematically designed to do that; it's no coincidence. It just the Hamilton/Rothschild banking and monetary system, and it's being used by almost every country in the world, and we're the last ones to take the fall.

A - So, what is the way out for the ordinary Citizen who doesn't like seeing their tax dollars going to pay for murder and nuclear weapons and pollution and, really, all of those activities? And also, the other question is: How do you respond to people who say, well, you enjoy the roads and the benefits of living in American society, you should pay for it?

M - That's a very good question, and I get asked that question all the time, but it evidences a great deal of ignorance about the monetary situation in our country. If you read the report of the Peter Grace Commission, you will find, documented in writing, with proof, that the individual income tax revenues that are collected and extracted by the IRS are not going to pay for any government services. They're going to pay for interest on the national debt, and they're going to pay for transfer payments to the people who are on the receiving end of Social Security, for example. So, the money is being taken out of the economy and transferred elsewhere, either into the hands of Social Security beneficiaries or, which is even more grotesque, into the hands of the private stockholders of the Federal Reserve system. The federal government is a gigantic money laundry.

And how much interest are they paying on four trillion dollars, which the national debt is published to be approaching? Okay, they say, they admit that it's approaching four trillion dollars. It's probably more like 18 trillion. What is Congress paying as a debtor? Well, let's assume they're paying seven and one-half percent, which is very realistic. Let's do the numbers: 7.5 percent of 4 trillion is 300 billion dollars annually. They're paying 300 billion dollars annually to discharge interest alone on the national debt they've accrued. That's interest alone; that's just debt service; that doesn't do anything to reduce the principal. And they continue to enlarge that principal by leaps and bounds every year. So it's a no-win game.

But, you see, you have to understand that they set up this private syndicate, this private credit monopoly, at their discretion. Congress was responsible for passing the Federal Reserve Act in the first place, and they're allowing that Act to remain on the books so as to bankrupt all the private assets throughout the country, to the benefit of a ruling elite who was responsible for setting up that Act in the first place.

Congress is a party to a massive fiscal fraud here. We're not talking about nickel and dime; we're talking about a treasonous, fraudulent attempt to convert the ownership of all private property and all private businesses into the hands of a ruling elite who, for the most part, are foreign stockholders: Rothschilds, Warburgs, Lazard Brothers -- these people don't even live in this country. They're not American Citizens. As a group, they're like a giant vacuum cleaner, positioned in geosynchronous orbit over the United States of America. They're sucking like crazy, and they're using force and duress to get as much money out of the economy as they can. And it's been highly effective until now.

A - So, what can be the course for the ordinary Citizen who's fed up and also very upset to see how this money is being squandered?

M - Well, the first thing you have to do is to take steps to eliminate your ignorance, because the Law is in place. The Law is there to defend our rights. The Law was not put in place to concentrate wealth in the hands of foreign stockholders. The Law that's on the books is there to defend the unalienable rights of people like you and me. The Supreme Court has said this over and over and over. The purpose of the Constitution is, above all, to protect individual rights, above all. That's the intent of the Constitution. Let's talk about the intent of that Law. The thing almost didn't get passed. For want of a Bill of Rights, it wouldn't have passed. The States said, "We will go along with this new Constitution, provided that you guys in Congress issue a Bill of Rights within five years." So, James Madison went to work and said, "Okay, here's your Bill of Rights." Then it got approved. But, the Constitution for the United States would not have come into existence unless the people who were framing it committed to a Bill of Rights with teeth. All right?

So, when you go back to the history of that contract -- you're talking about contract law now -- that contract obliges the government to guarantee these rights, and property is probably paramount. I would say it's easily paramount; life, liberty and property were discussed as the "magic trio". We can't pursue happiness without property, without private property. So, if the American people want to fight this thing, they can do so, nonviolently, by first understanding the Law and then pointing out to people in government that they are violating the Law, time and time again, by forcefully, under duress, extracting what is a voluntary system of taxation, under the Constitution, inside the 50 States. Congress is chained by the Constitution, to use Thomas Jefferson's terminology. They can't go out and forcibly extract your voluntary participation in their third-party debt scheme and do so lawfully. No way!

A - Well, I think, then, it behooves us to become informed. And your book certainly goes a long way.

M - If you don't inform yourself, you won't know that it's voluntary. You won't know what your rights are. You will sign forms that can be construed by courts of law as waivers of those rights. You'll get yourself entrapped, and they're entitled to presume that you knew exactly what you were doing.

A - So are you getting ready to publish an addendum to your book?

M - Yes, the second edition will be available on the Fourth of July.

A - Excellent timing.

M - It's scheduled for the Freedom Conference in Sacramento.

A - Is there anything else you want to add at this point? Oh yes, there is that recent newspaper article. Today is April 11 or 12. Here we are; April 15 is just a few days away, and we hear that 75 percent of the people have not returned, not put their returns in. Was this just the State, or was this the federal returns?

M - This is federal. It looks like, as of Friday, which was April 10, five days from the deadline, upwards of 75 percent, according to the newspaper, upwards of 75 percent who are required to file had not yet filed their 1040's and associated forms and schedules.

A - I would think that that would put the government in some economic distress.

M - Well, yes and no. Understand that the Congress can always turn to the Federal Reserve System to bail out their deficit. If their deficit happens to skyrocket this year because the revenues have fallen precipitously, because people haven't sent their taxes in, Congress can always turn to the Federal Reserve, as they have been doing all along, to borrow more money into circulation and then turn around and try to extract out that much more in interest payments from the American people. Okay? It doesn't put government in economic distress; it puts us in economic distress.

Understand that this system has a built-in safety valve. Congress can turn around and borrow more Federal Reserve Notes by creating bonds. It's very important to understand the mechanics of this; it's not that difficult. They're just doing it on a massive scale; they're doing on a massive scale what you and I do on individual scale when we borrow money.

Congress takes in X amount in revenues from individual income taxes and excise taxes and corporate taxes and this and that. But, there's always a shortfall. There's always a deficit, because they want to spend 300 billion or 400 billion more every year now than they've collected in revenue. So, what do they do?

It's very simple, on one level. You get down to basic mechanics. They take these printing presses. They put ink on paper and they call them bonds, and they float them on the market. They put them out there and they try to sell them and, hopefully, people with money, like you and me, will buy them up. Well, some Americans have enough money to buy bonds issued by the Treasury. So, you buy a treasury bill. You're sitting on a bond paying 8.5 -- what did we say? -- 7.5 percent, my last amount. So, here you are, you've got a piece of paper, and you've "paid" them probably in Federal Reserve Notes. They'll take gold, too; there's very little of that out there now, as currency. And you're sitting on a piece of paper that says you will make 7.5 percent, compounded annually, and it matures in five years or ten years or one year, whatever the face, the maturity date on the bond. All right?

But the hitch is that there isn't enough slack money in the economy for all private, wage-earning, hard-working Americans to buy up all these bonds every year. So Congress always ends up with this huge unsold number of bonds. What do they do? Well, they march across the street to the Federal Reserve, and they say, "Federal Reserve, Sweetheart, will you buy these bonds from us?" And the Fed says, "Sure, we'll buy those bonds. Your interest rate is 9.25, or whatever. Take it or leave it." Now Congress has to take the deal, because there's nobody else on the planet with that kind of money. I mean, they're sitting on the hugest concentration of wealth that's ever been accumulated in the world, so bailing out Congress for yet another year is no big deal. They're doing this to every country on the planet, okay?

So, Congress has to take the deal, because they've got to balance their budget, so the bonds that they printed up go into the vaults of the Federal Reserve. And the Federal Reserve, actually the Bureau of Printing and Engraving, prints out the equivalent number of Federal Reserve Notes. Think of it as the bonds going into the Federal Reserve, and the Federal Reserve Notes going into the Treasury. The Federal Reserve notes are the property of the Federal Reserve system; they're not property of the U.S. Treasury. They're property of the Federal Reserve system.

Now the Congress turns around and injects those into the economy. How? Well, by paying Congressmen and Senators and judges and military officers and GI's and janitors and whatever else -- government suppliers and government contractors. That money gets put into the economy that way, by government spending.

Now, if this scheme were not restrained by any sort of governor -- you know, like a machine governor that keeps the speed of the machine at a certain level -- if the system I just described were allowed to proceed unrestrained, what you would find is that the government is injecting phoney money into the economy without any regard for the quantity of goods and services being exchanged. If you inject money into the economy like that, if the money supply grows faster than the aggregate sum of the goods and services exchanged in the economy, then you have inflation, by definition.

Higher prices are not the cause of inflation; that's propaganda. Higher prices are the effect of inflation, because inflation is not higher prices. Inflation is defined to be a disproportionate increase in the money supply relative to the quantity of goods and services being exchanged. So, inflation will result. That means that there's more money out there. People will pay higher prices so they can outbid buyers with whom they compete, and prices naturally rise up. It's an ironclad law of economics.

So, how do you prevent spiraling inflation as the government continues to inject money into the economy? You've got to do something to pull that money out of the economy. If you don't, you'll have what happened in Germany just before World War II. The deutsche mark went right through the ceiling, and people were coming to market with wheelbarrows full of deutche marks just to pay for a loaf of bread. That's how bad it got. And that will happen in the United States if Congress allows itself to hyperinflate Federal Reserve Notes.

Enter the IRS. They're a collection agency, kind of like a vacuum. Think of them as a pump that counterbalances the other pump. The Federal Reserve is pumping cash and credit into the economy, injecting it in, and the IRS is sucking it out of the economy. There are two pumps, working in tandem. And controllers are very, very skillfully shifting the rates of these pumps to set waves of recession and inflation pouring through the economy. Think of it is a pool of water -- the cash and credit pool. You've got a pump injecting water in, and you've got a pump sucking it back out. You've also got scientific controls on the rates of those pumps, so the aggregate level rises up and down, but the pumps also set up these smaller perturbations in the waves, and so on. And the pump controllers sit back with all this money to spend and play this big game, because they're the puppeteers.

A - What about the theory about the Japanese and Iraqis have got their hands in the pot also?

M - Well, it's an international economy, and a lot of those bonds are spread around the country and around the world, so the bond holders -- the owners of T-bills -- are not just the American middle class, not just the Federal Reserve, but a lot of foreign countries as well. It's a very complex problem, and very few people have any notion about monetary fraud or fiscal fraud, for that matter, because this is an elite science.

A - Well, I'll bring this part of the interview to a close. You certainly have answered some of our questions and raised a lot more questions. Thank you very much.

M - You're welcome