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'Domestic terrorism'?

| Sunday, March 18, 2012

Today marks the first anniversary of the conviction of a man who, in the words of Anne M. Tompkins, U.S. attorney for the Western District of North Carolina, practiced "a unique form of domestic terrorism." Do you remember who that menace to society was• I'll save you the suspense. His name is Bernard von NotHaus.

Von NotHaus is not your typical "terrorist." He didn't plot to hijack a jet, blow up innocent people or knock out the electric grid.

What heinous deeds had he perpetrated or planned• Brace yourself. He minted and sold coins. No, not toxic coins designed to poison people, but handsome coins fashioned from silver, gold, platinum and copper.

Are you feeling endangered yet• Well, perhaps you should be -- but only when you find out what the federal government has been up to.


First, von NotHaus was not a counterfeiter trying to pass off worthless fakes as the country's official money. He openly marketed his coins -- called "Liberty Dollars" -- as alternatives to Federal Reserve notes.

His coins were created to function as a reliable medium of exchange and effective store of value in contrast to Federal Reserve notes that continue to decline in purchasing power due to the central bank's inflationary policies.

Prosecutor Tompkins accused von NotHaus of trying "to undermine the legitimate currency of this country." But if anyone is undermining the U.S. monetary system, it is the Fed.

Second, there were no victims. Nobody was defrauded. In fact, every single gold and silver Liberty Dollar in existence is worth far more Federal Reserve notes today than when customers bought them. Who gets hurt from buying assets that appreciate in value?

The only potentially unhappy buyers of Liberty Dollars would be those who bought paper certificates redeemable in coin, only to see the government impound those coins when it arrested von NotHaus.

Third, the government's position that Federal Reserve notes are "legitimate currency" is constitutionally dubious. The Federal Reserve notes in our pockets are not backed by constitutional money, i.e., gold or silver (U.S. Constitution, Article I, Section 8, paragraph 5 and Section 10, paragraph 1).

As explained our 20th president, the brilliant, erudite James A. Garfield:

"Grave doubts have been entertained whether Congress is authorized by the Constitution to make any form of paper money legal tender. The present issue of United States notes" (the "greenbacks" printed to help finance the Civil War) "should depend for its value and currency upon its convenience in use and its prompt redemption in coin. ... These notes are not money, but promises to pay money ." (Emphasis added.)

Since Federal Reserve notes exist only by government fiat and are not redeemable for real money, they hardly are "legitimate."

Fourth, it is absurd and perverse for Department of Homeland Security Secretary Janet Napolitano to refrain from calling the acts of murderous fanatics "terrorism" (preferring the insipid nomenclature "man-caused disasters") while a U.S. attorney uses the "t"-word in connection with a peaceful man of 68.

What's next, tea partyers dubbed "enemies of the state"?

Fifth, there are plenty of other private domestic companies issuing their own currencies (e.g., BerkShares, Ithaca hours), but Uncle Sam is not prosecuting them.

Why are the feds singling out Bernard von NotHaus?

Apparently, the feds don't object to private fiat currencies but feel threatened by coins that have made Federal Reserve notes look bad by comparison. Liberty Dollars have appreciated while Federal Reserve notes have depreciated.

A more ominous possibility is that von NotHaus was targeted because he openly broadcast his beliefs that the IRS and Federal Reserve pose a threat to Americans' economic future. Are the feds sending a message that free speech containing dissenting political opinions will not be tolerated?

Sixth, while von NotHaus did violate the letter of existing federal law (of debatable constitutionality), there is something warped and dangerously out of balance when his conviction comes with a possible sentence of 15 years (which essentially amounts to life imprisonment for a 68-year-old) for doing nothing more dastardly than providing people with some insurance against the destruction of the official currency. Thank goodness, there does appear to be a voice of reason in the strange case of Bernard von NotHaus.

Since his conviction a year ago, U.S. District Judge Richard Voorhees has refrained from pronouncing sentence. Von NotHaus, remains free on bail.

I know Barack Obama is preoccupied with getting re-elected but it sure would be decent of the president to commute the old man's sentence and direct the Justice Department to go after those who mean to harm us.

Mark W. Hendrickson is an adjunct professor of economics at Grove City College.

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