Auditing the Federal Reserve
by JBS President John F. McManus
On September 17, 2014, the House of Representatives voted 333 to 92 in favor a measure calling for an audit of the Federal Reserve. Introduced by Representative Paul Broun (R-Ga.), H.R. 24 won the support of 227 Republicans and 106 Democrats – which is well beyond the two-thirds needed for passage. Californian John Campbell was the lone Republican House member who sided with 91 Democrat opponents of the bill. The Senate must now give its two-thirds approval of the companion measure, S. 209, introduced in that body by Senator Rand Paul (R-Ky.).
H.R. 24 calls for “a full audit of the Board of Governors of the Federal Reserve System and the federal reserve banks by the Comptroller General of the United States.” There never has been any such audit in the Fed’s 101 years of existence. The companion Senate measure seeks identical openness. Both measures carry the title, “Federal Reserve Transparency Act,” the word “transparency” being what’s long been needed. And each of the bills requires that the audit be conducted within a year of final passage.
In his discussion about the need for this audit, Senator Paul noted that no “meaningful” audit of the Fed has ever been conducted. Less than honest and transparent scrutiny has been practiced under stifling restrictions, but Senator Paul and his colleagues want openness, not more cover-ups. To indicate how little is known about the Fed’s activities, he stated: “…when the primary auditor and overseer of the Fed was asked about $9 trillion dollars, the Inspector General had no clue what had been purchased.” After noting that the $9 trillion figure is more than half of the nation’s admitted indebtedness, he concluded, “The Federal Reserve is one of the most secretive institutions in our history.”
The Senate measure already has 30 co-sponsors, all Republicans but for Alaska’s Democrat Senator Mark Begich. Gaining 37 more Yes votes for the measure in the Senate (the number needed to reach the two-thirds plateau) will not be easy with Senate Majority Leader Harry Reid (D.-Nev.) strongly opposed to the idea.
A thorough audit of the Fed will likely lead to consideration of a subsequent measure calling for terminating the institution. Our nation needs sound money, not fiat currency generated by the secretive Fed that should never have been given the power it possesses. As more Americans realize that the once “almighty” dollar has shrunk in value from a worth of 100 cents in 1913 to a mere 2 cents today because of Fed action, pressure for abolishing it and returning to precious-metal-backed currency continues to grow. All who want openness at the Fed and sound money should be contacting both of the their senators to request support for S. 209.
Mr. McManus joined the staff of The John Birch Society in August 1966 and has served various roles for the organization including Field Coordinator, Director of Public Affairs, and now President. He remains the Society’s chief media representative throughout the nation and has appeared on hundreds of radio and television programs. Mr. McManus is also Publisher of The New American magazine and author of a number of educational DVDs and books.
Audit the Federal Reserve: Support H.R. 24
By JBS President John F. McManus
On January 3, 2013, Congressman Paul Broun (R-Ga.) introduced H.R. 24 entitled “Federal Reserve Transparency Act.” It calls for audits of the Board of Governors of the Federal Reserve and the Federal Reserve Banks. And it further calls for those audits to be provided to Congress.
As of May 9, 2014, H.R. 24 has 228 co-sponsors. This means that more than a majority of the members of the House of Representatives has formally indicated a desire to remove the cloud of secrecy under which the Federal Reserve has operated during its 100 years of existence. (An act of Congress created the Fed in 1913.)
Even though similar numerical support for an audit has been gained in two predecessor congresses, a meaningful audit that counts more than desks and pencils has never been conducted. Secrecy continues to prevail and the Fed’s officials continue to maintain that its “independence” requires that it operate behind closed doors.
When the Fed began in 1913, the dollar was worth 100 cents. Its value has steadily declined so that now, according to numerous monetary specialists, its worth is approximately two cents. In other words, the price paid in dollars for an item in 1913 has risen by a factor of 50 times. “Dollars aren’t worth what they used to be,” can be heard from coast to coast and beyond. Credit the Federal Reserve!
In Article I, Section 8, the U.S. Constitution grants Congress power to “coin money.” No power was given to create or issue money, and certainly none to pass on illegitimate power to a private entity such as the Fed. But this is where we are. Without a thorough audit of the Fed, we don’t know who owns it, where it delivers much of the funds it creates out of thin air, and a great deal more. Intolerable? You bet.
When the Fed got started, the U.S. Treasury was issuing paper money redeemable in the government’s gold. That process died in 1933 when President Roosevelt took the nation off the gold standard. The Treasury was then issuing silver certificates backed by silver in the government’s vault. That process ended during the Richard Nixon era. Now we have Federal Reserve Notes backed by nothing and, because they have nothing behind them, the amount that can be printed and inserted into the system is unlimited. Totally unbacked paper bills flooding the nation take on value by acquiring some value of all existing bills. In simple terms, the erosion of the dollar’s value is Fed-created thievery.
If the power possessed by the Fed remains unchallenged, the dollar will continue its slide toward nothingness. Karl Marx wanted a central bank that would destroy freedom. The looming national catastrophe desired by Marx would inevitably result in reliance on some new form of world currency, something being proposed by the United Nations. And our nation would no longer be independent and free. Having the Fed audited is a major step toward averting such a tragedy.
The current attempt to audit the Fed is likely to run into the same blocking wall as in the past unless more people demand that the secrecy cease. While it’s somewhat comforting to know that more than half of the House membership is formally on record wanting “transparency,” having a majority isn’t enough. H.R. 24 must be enacted by the House and then by the Senate. Has your congressman co-sponsored H.R. 24? What about your two senators? Are they willing to put their portion of Congress on record issuing a similar demand? Contact them today!