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ROAD MAP TO SOUND MONEY: A 

LEGISLATIVE HEARING ON H.R. 1098 

AND RESTORING THE DOLLAR 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

DOMESTIC MONETARY POLICY 

AND TECHNOLOGY 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

SEPTEMBER 13, 2011 

Printed for the use of the Committee on Financial Services 

Serial No. 112–59 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

SPENCER BACHUS, Alabama, Chairman 

JEB HENSARLING, Texas, Vice Chairman 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, North Carolina 

JUDY BIGGERT, Illinois 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

NAN A. S. HAYWORTH, New York 

JAMES B. RENACCI, Ohio 

ROBERT HURT, Virginia 

ROBERT J. DOLD, Illinois 

DAVID SCHWEIKERT, Arizona 

MICHAEL G. GRIMM, New York 

FRANCISCO R. CANSECO, Texas 

STEVE STIVERS, Ohio 

STEPHEN LEE FINCHER, Tennessee 

BARNEY FRANK, Massachusetts, Ranking 

Member 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

ANDRE ́ CARSON, Indiana 

JAMES A. HIMES, Connecticut 

GARY C. PETERS, Michigan 

JOHN C. CARNEY, JR., Delaware 

LARRY C. LAVENDER, Chief of Staff 

(III) 

SUBCOMMITTEE ON DOMESTIC MONETARY POLICY AND TECHNOLOGY

RON PAUL, Texas, Chairman 

WALTER B. JONES, North Carolina, Vice 

Chairman 

FRANK D. LUCAS, Oklahoma 

PATRICK T. MCHENRY, North Carolina 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

NAN A. S. HAYWORTH, New York 

DAVID SCHWEIKERT, Arizona 

WM. LACY CLAY, Missouri, Ranking 

Member 

CAROLYN B. MALONEY, New York 

GREGORY W. MEEKS, New York 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GARY C. PETERS, Michigan 

(IV) 

C O N T E N T S 

Page 

Hearing held on: 

September 13, 2011 .......................................................................................... 1 

Appendix: 

September 13, 2011 .......................................................................................... 19 

WITNESSES 

TUESDAY, SEPTEMBER 13, 2011 

Parks, Lawrence M., Ph.D., Executive Director, Foundation for the Advancement of Monetary Education ............................................................................... 3 

White, Lawrence H., Ph.D., Professor of Economics, Department of Economics, George Mason University ............................................................................. 6 

APPENDIX 

Prepared statements: 

Paul, Hon. Ron .................................................................................................. 20 

Parks, Lawrence M. .......................................................................................... 24 

White, Lawrence H. .......................................................................................... 87 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Paul, Hon. Ron: 

Written responses to questions submitted to Dr. Lawrence M. Parks ........ 91 

Letter from then-Chairman Alan Greenspan of the Federal Reserve dated 

November 20, 2003 ....................................................................................... 101 

(1) 

ROAD MAP TO SOUND MONEY: A 

LEGISLATIVE HEARING ON H.R. 1098 

AND RESTORING THE DOLLAR 

Tuesday, September 13, 2011 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON DOMESTIC MONETARY

POLICY AND TECHNOLOGY, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 2:35 p.m., in room 

2128, Rayburn House Office Building, Hon. Ron Paul [chairman of 

the subcommittee] presiding. 

Members present: Representatives Paul, Jones, Luetkemeyer, 

and Huizenga. 

Chairman PAUL. This hearing will come to order. Without objection, all members’ opening statements will be made a part of the 

record. 

Are there any other opening statements? Okay. I will make a 

brief opening statement and then we will go to our witnesses. 

The monetary issue has been an issue that I have been fascinated with and interested in for a long time. I became much more 

aware of the significance of this issue back in August of 1971, with 

the breakdown of the Bretton Woods agreement. At that time, I 

was quite convinced and remain convinced that we have ushered 

in a special age that probably did not exist in the same fashion 

ever before. And we now have been living for 4 decades with a total 

fiat world currency, and it has created a lot of problems for us. 

I am convinced also that we are on the verge of a change from 

the current status. Just as significant as it was in 1971, something 

had to give, and there was a change. And I think this is what the 

conflict in the markets and the chaos in the markets is telling us. 

But too often, the people in the Congress are looking elsewhere 

to solve the problems. We, as a Congress, have lived way beyond 

our means because the people in this country wanted us to live beyond our means, and the monetary issue of course is very significant because it actually facilitates the spending. 

So without the type of system of money that we have today, 

there would have been a limitation on the massive expansion of the 

size of government, spending, taxes, debt, and the crisis that we 

are facing right now. But very few are even thinking about monetary policy as a significant contributor to the economic problems we 

have today. More attention has been given to the Federal Reserve 

in recent years than it has in the past but we have a long way to 

2 

go. But there are more and more people on both sides of this issue 

who are recognizing that monetary reform eventually will come. 

The big question is, is will they try to patch this up or transfer this 

into another system that is not much better than the one we have? 

In many ways, that is what we did in 1971. We had a dollar reserve gold standard that broke down, and then we ushered in 

something actually worse and it probably lasted a lot longer than 

a lot of people expected. But today, because of the crisis, I think 

many are just wondering what is going to happen. 

I have had a position for a long time about what I think we 

should do with the Federal Reserve; I don’t believe it contributes 

all that much. But I have also taken the position that if I had the 

authority to do it, I probably wouldn’t take the key, lock the door, 

and just allow the system to work its way out. I think that would 

be very chaotic, and that is not my position. So as early on as the 

Gold Commission in the early 1980s, even up until now, I still believe that the best way to go from one system to another is to try 

to allow the market to help us. 

The British made a serious mistake when they tried to go back 

on the gold standard in the 1920s at an old ratio of the dollar to 

the pound and it obviously failed. Of course, it was blamed on the 

gold, not on the policy of transition. 

So the market has to help us on this, the market has to help us 

if we ever want to relate our currency to gold again. I have been 

fascinated with some of the work of Hayek and others that talks 

about allowing currencies to compete with one another, let the 

markets sort it out. And it is a lot less threatening. Other countries 

are talking about that. The Mexican Government has talked about 

it. The Swiss Government has talked about just allowing other currencies to circulate within their own country. And when you think 

about it, that is what happens internationally all the time. Currencies fluctuate all the time, and that is one of the ways that they 

were able to keep the system together, is allow the competing currencies to fluctuate on a minute-to-minute basis. 

So there is no reason in the world that we couldn’t adapt to allowing competing currency within our own country. And then if 

people just love Federal Reserve Notes and want to spend Federal 

Reserve Notes and save in Federal Reserve Notes, let them do it. 

But others who might think that another system is better, I think 

we ought to talk about legalizing it. 

To me, I would like to summarize and say, why don’t we legalize 

the Constitution? The Constitution has been rather clear. It might 

not have given us the perfect monetary system and we didn’t follow 

it very well. But at least it did indicate that the Founders didn’t 

like paper money. They did not like emitting bills with credit. They 

did not like fiat money. And if we were to look just to the Constitution, it would mean that we should reconsider commodity money, 

something that governments can’t control, can’t monopolize, and let 

the market work. 

So, those are basically my thoughts on this issue. I am anxious 

to hear the remarks from Dr. Parks and Dr. White on these issues, 

because I have studied this for many, many years and there are 

still a lot of questions to answer. 

3 

We do have a bill, H.R. 1098, which is far from a perfect bill. But 

it is a place to get started in talking about what we might do and 

how we can do it because things could change rapidly. Although 

many of us have been thinking about this for many, many years, 

things could move rapidly. Currency destructions, the end of currencies sometimes move much quicker than anybody dreams that 

it could. So a major crisis could come. It could come next month 

or next year or in a few years. But to me, there is no guarantee 

that we have 5 or 10 years to keep studying this. I think that we 

need to get people engaged in this and talking about it and understanding the monetary issue. 

So I am very grateful to our two guests for coming today and for 

being willing to submit their remarks and answer some questions 

for us. 

I will now go to our first witness. Dr. Lawrence Parks is the executive director and founder of the Foundation for the Advancement of Monetary Education. Dr. Parks has studied money for 30 

years and was a student of the free market economist Murray 

Rothbard. His writings have appeared in The Economist, Pensions 

and Investment, and The Washington Times, among others. He has 

authored and produced over 200 educational videos on the U.S. 

monetary system. Dr. Parks is a member of the United Association 

of Labor Education and UAW 1981, AFL–CIO. He received his 

Ph.D. in operations research from the Polytechnic Institute of New 

York University. 

Dr. Parks, please go ahead and give your summary and then we 

will go to our next witness. 

STATEMENT OF LAWRENCE M. PARKS, PH.D., EXECUTIVE DIRECTOR, FOUNDATION FOR THE ADVANCEMENT OF MONETARY EDUCATION 

Mr. PARKS. Thank you very much, Dr. Paul. It is a great honor 

to be here, and I appreciate the opportunity to testify in support 

of H.R. 1098, the Free Competition in Currency Act of 2011. I am 

honored to have been invited. 

I know it must sound like hyperbole, but I believe that H.R. 1098 

is perhaps the most important piece of legislation ever to come before the Congress, because H.R. 1098 is necessary to make a transition from a certain catastrophic collapse of our unauthorized by the 

Constitution, dishonest, and unstable legal tender, irredeemable 

paper-ticket-electronic monetary system. 

While I suspect that this committee will be most interested in 

how this bill will affect jobs, debt, economic growth in capital markets, pensions, and a host of other important and timely topics, I 

am going to focus my opening statement with an example of the 

dishonesty, which is the Achilles’ heel of the present system, by 

highlighting one of the many misrepresentations about our money. 

There are three take-away points from my testimony. The first 

is that the system is not in conformity with the Constitution. The 

second, and very importantly, it is dishonest. And third, it is unstable and in the process of blowing up perhaps while I am testifying 

here today. 

One can be certain of a complete collapse of this monetary system because there is no longer any market-based self-correcting 

4 

mechanism for increasing debt, increasing the money supply, and 

increasing leverage. And any system, any physical system, any social system, any system without a self-correcting mechanism blows 

up. With no exceptions, the history of legal tender irredeemable 

paper-ticket money is that its purchasing power always approaches 

its cost of production, which is zero. 

I want to explain why the system is dishonest. There are a myriad of misrepresentations and nondisclosure of material information about what we call a dollar. No amount of regulation or oversight committees will cure dishonesty. The only remedy is honesty. 

To illustrate what in my view is the most egregious example of 

this dishonesty, I give an example of silver, although the same 

principle applies with gold. Now it was and remains inconvenient 

for people to carry around silver dollars because they are heavy 

and bulky. So what people did—let’s have the first exhibit up 

there—is that they deposited their silver dollars typically in a bank 

and received in exchange a promissory note, a.k.a. a banknote or 

a note that bore the inscription that so many dollars had been deposited and the note was payable to the bearer on demand. 

Here is an example of a United States note. And notice that this 

is not a dollar. At the top of the bill are the words, ‘‘United States 

Note.’’ I don’t know if you can see it from where you are sitting but 

under the image it says, ‘‘will pay to the bearer on demand one dollar.’’ Well, what is a dollar? 

Next slide [image of a silver dollar]. That is a dollar, as put into 

law by Alexander Hamilton in the Coinage Act of 1792. But then 

the promise to pay a dollar—let’s have the next slide—was defaulted. Here is the punchline. The broken promissory note, the 

dishonored promissory note is now represented as being a dollar. 

This is a gross misrepresentation and is dishonest. This piece of 

paper is not even a valid note. The signatures of the Treasurer of 

the United States and the Secretary of the Treasury are gratuitous 

and deceptive. 

In other words, what we use for money are just dishonered promissory notes that are misrepresented to be dollars. It means that 

all of the securities in our capital markets at home and abroad are 

denominated in dishonored promissory notes. This has immense 

implications for trade, jobs, pensions, military preparedness, and 

almost everything else that is important. 

People have the notion that the Congress can make the dollar 

anything the Congress wants it to be and back it with specie or not 

or whatever. This is demonstrably false. The highest law in our 

country is the Constitution and all of our laws have to be in conformity with it. The word ‘‘dollar’’ is mentioned twice in the Constitution but it is not defined in the Constitution. It is mentioned 

in connection with the Slave Tax, which is no more, but it is also 

mentioned very importantly in the Seventh Amendment, which 

guarantees everyone a right to a trial by jury for any dispute $20 

or more. 

If it were true that the Congress could redefine the dollar, that 

would mean that the Congress could redefine the Seventh Amendment, which is ridiculous. And so the question comes up, what is 

the objective meaning of the dollar? And in fact, for the Seventh 

Amendment to have objective meaning, the dollar has to have an 

5 

objective meaning. And what they are talking about in the Constitution itself—next slide—is the Spanish Milled Dollar, sometimes called the piece of eight. The Spaniards had built mints all 

over the colonies and the Spanish Milled Dollar was ubiquitous. 

When independence was declared, the colonies adopted the Articles 

of Confederation, which gave the Congress the power to issue 

money called ‘‘continentals.’’ Here is an example of a continental 

$30 bill. 

Next slide. I don’t know if you can read it from where you are 

sitting, but notice it ‘‘entitles the bearer to receive 30 Spanish 

Milled Dollars, or the Value thereof in Gold or Silver.’’ The value 

of a coin is its specie content. 

After independence was achieved and the Constitution was 

adopted, the United States did not want to rely on Spanish mints 

for its coins. The United States wanted its own mints to mint its 

own coins, including dollars. To that end, Alexander Hamilton, 

then Secretary of the Treasury, wrote the Coinage Act of 1792, 

wherein he tells us exactly what a dollar is. And what a dollar is, 

is 371.25 grains of silver. Where did Hamilton get that crazy number? That was the silver content of the Spanish Milled Dollar. They 

couldn’t just introduce some arbitrary coin because everybody had 

contracts in terms of dollars. So the Constitution requires that the 

dollar be a weight of silver. Now some might claim that if Hamilton 

defined the dollar this way, perhaps it can be defined another way. 

And that is not true either. Hamilton’s definition of a dollar was 

not arbitrary. All he did was write into law what was already a 

fact. 

Here is another way of looking at this issue. Go to the next slide, 

please. Suppose we have a sign that says ‘‘cat’’ and we hang it on 

a dog. Does the dog become a cat? And suppose the Congress 

passes a law that says all the dogs with cat signs are now cats— 

go to the next slide—now are all of these dogs cats? And the answer is no. Conceptually, this is no different than taking a piece 

of paper, printing the word ‘‘dollar’’ on it, adding seals and signatures, and calling it a dollar. And this is precisely what has happened to our money. 

Clearly, there is no easy remedy. How could such an immense 

fraud be perpetrated? There are several reasons but one of the 

most important ones, which H.R. 1098 will go a long way to correcting, is that we are coerced into using fraudulent money by the 

legal tender statutes. By getting rid of legal tender, H.R. 1098 is 

necessary and may be sufficient to help pave the way to an honest 

monetary system. 

I am going to stop now and give you a chance to address any 

questions or issues that may come to mind. Thank you so much. 

[The prepared statement of Dr. Parks can be found on page 24 

of the appendix.] 

Chairman PAUL. I thank you. I would like to go next to Dr. 

White. 

Dr. Lawrence White is professor of economics at George Mason 

University, where he specializes in the theory and history of banking and money. Dr. White has written extensively on monetary systems with over 40 articles published in academic journals, including the American Economic Review and the Journal of Monetary 

6 

Economics. He has also authored three books on monetary matters, 

including ‘‘Competition and Currency: Essays on Free Banking and 

Money.’’ He received his Ph.D. in economics from UCLA and his 

undergraduate degree in economics from Harvard. 

Dr. White, you may proceed. 

STATEMENT OF LAWRENCE H. WHITE, PH.D., PROFESSOR OF 

ECONOMICS, DEPARTMENT OF ECONOMICS, GEORGE 

MASON UNIVERSITY 

Mr. WHITE. Thank you, Mr. Chairman. Thanks for the opportunity to discuss my views on H.R. 1098, the Free Competition and 

Currency Act of 2011. I am going to have to be very sweeping given 

the limited time, but I will be happy to answer any questions you 

might have about historical or other details. 

The idea of competition in currency, or you might call it competition among currencies, is fairly straightforward. We know as a rule 

that open competition gives us better products, higher quality at 

lower cost. For example, we have faster and more reliable package 

delivery thanks to the competition of FedEx and United Parcel 

Service with the U.S. Postal Service. The main point I want to emphasize today is that competition in currency isn’t any exception to 

this general rule. More competition promotes better currency. 

Let me give you some examples. Throughout history, currency 

has been better provided by freely competing private enterprises 

than by government monopoly or by legally protected private monopoly. The United States had competing gold and silver mints at 

one time during our gold and silver rushes and they produced very 

trustworthy coins. These private mints ended only when they were 

suppressed by Civil War legislation, part of which H.R. 1098 aims 

to repeal. Redeemable private tokens and redeemable bank-issued 

paper currency notes have also been popular forms of money in the 

60-plus parts of the world where they have been allowed. 

H.R. 1098 would lift legal barriers to currency competition. It 

wouldn’t immediately remove the U.S. Treasury or the Federal Reserve System from issuing currency. But—and then this is the second point I want to emphasize—competition would give the Fed 

better incentives to provide the kind of money that people want. 

Sound money, stable, valued money, trustworthy money. It would 

give the Fed better incentives to avoid creating inflation, in other 

words, because its customers could begin to go elsewhere. The U.S. 

dollar already faces competition, and I would say useful competition, in the international arena. People have a choice in international trade. Between the dollar and the euro, the Swiss franc 

and they can invest in gold and silver. So there are many monetary 

standards in the world. 

H.R. 1098 would open a door to similar kinds of competition 

within the domestic arena between Federal Reserve Notes and 

other currencies. It won’t make the Federal Reserve Note go away, 

as Dr. Paul said, if people want to use Federal Reserve Notes. New 

forms of currency won’t gain a foothold in the market any faster 

than the public has reason to prefer them to Federal Reserve 

Notes. So the Fed can retain its business as long as it provides a 

high-quality product. But if the Fed slips up in quality control, 

meaning if double digit inflation should unfortunately return to the 

7 

United States, then the American public would find it very useful 

to have trustworthy alternatives to Federal Reserve Notes that are 

depreciating in their pockets. 

So this Act offers three concrete reforms. And let me talk about 

them briefly. Section 2 of the Act removes legal tender status from 

Treasury coins and Federal Reserve Notes. Legal tender has a 

more narrow scope than is often realized. It relates to the discharge of debts. So the phrase on Federal Reserve Notes, ‘‘legal 

tender for all debts’’ means that under current law a creditor is 

barred from refusing payment in Federal Reserve Notes. But it is 

perfectly feasible to have debt contracts without legal tender, and, 

in fact, there is already an important class of contracts that are 

today exempt from legal tender provisions. 

Under Title 31, Section 5118(d)(2), the obligations created by 

gold clause bonds are not discharged by delivery of legal tender 

today. That section says that the bond issuer has a contractual obligation to pay in gold. That is what the contract says, and that 

will be enforced. So removing legal tender status from U.S. Treasury coins and Federal Reserve Notes more generally would simply 

broaden the freedom to denominate debt contracts in whatever people want, not just dollars, not just gold. But they might want silver. They might want to say the debt is only discharged by checks 

or wire transfers of dollars, or it could be silver coins or it could 

be units of foreign currency, claims denominated in consumer index 

bundles or wholesale commodity bundles or it could be Bitcoins. 

Section 3 of the Act rules out Federal or State taxes on precious 

metal coins, whether minted by a foreign government or by a private firm. That would allow a more level playing field for competition of private coins with the U.S. Treasury coins without the special tax disadvantages which now handicap private coins. Sales 

taxes on acquisition, capital gains taxes on holding them, right. 

Federal Reserve Notes are not subject to those taxes. 

Section 4 of the Act repeals Title 18, Section 486. That section 

bans privately produced coins of gold, silver or other metals and it 

repeals Section 489 which bans disks that are merely similar to official coins. Section 486 is the relic of the Civil War that I mentioned. It was part of an effort to boost the acceptance of the wartime paper greenbacks by banning competition from the private 

gold coins that were being produced. Repealing that would again 

allow producers to make and consumers the option to use privately 

minted silver and gold coins if they like. 

I think the question we should ask, in the words of Seth Lipsky 

in a recent Wall Street Journal article, is whether it makes any 

sense to ‘‘suppress private money that is sound in order to protect 

government-issued money that is unsound.’’ 

I have mentioned that Section 489 would also be repealed. That 

I think is a section that is redundant at best and far too sweeping 

at worst. It outlaws making or possessing ‘‘any token, disk or device in the likeness or similitude as to design, color, or the inscription thereon of any of the coins of the United States.’’ It is redundant at best because there is already another section that outlaws 

counterfeiting and we are not talking about repealing the laws 

against counterfeiting. But this section is simply about similitude. 

And if you took it literally, it would outlaw all silver medallions beVerDate Nov 24 2008 13:41 Feb 28, 2012 Jkt 072600 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 K:\DOCS\72600.TXT TERRIE
8 

cause after all they are the same color as silver dollars and quarters and dimes. So it is too sweeping because it can be used to suppress private coinage, what we might say victimless private coinage 

that doesn’t involve counterfeiting and doesn’t involve any other 

fraudulent intent. 

So to conclude, competition in currency is a very practical idea. 

It is an idea that offers sizable benefits to the public when the 

quality of the dominant currency becomes doubtful. Now we all 

hope that Federal Reserve Notes retain their value. But for those 

who are skeptical, they should have another alternative. U.S. citizens would benefit from H.R. 1098’s removal of current legal restrictions and obstacles against currencies that could provide useful 

competition with Federal Reserve Notes and Treasury coins. 

Thank you. 

[The prepared statement of Dr. White can be found on page 87 

of the appendix.] 

Chairman PAUL. Thank you. I will start off with the questions. 

The first question will be for both of you. 

What do you think the arguments will be by the establishment? 

How will they come back and describe what we are trying to do? 

And why is it—I think it is well known that governments have always wanted to cling to a monopoly power over the currency, and 

it must be related to that. But could you give me an idea of what 

you think they will be saying or trying to describe what is going 

to happen? And if they claim that this would be terribly chaotic, 

what are some of the answers that we might give to those questions that they raise? 

Mr. WHITE. I suspect that the argument might be made that you 

are encouraging people to abandon the U.S. dollar and, thereby, 

you are undermining the U.S. economy. Right? But the answer is 

that the fate of the dollar or the purchasing power of the dollar is 

in the Federal Reserve’s hands. And all we are doing is giving people the option to make the transition to a more stable system if the 

Federal Reserve Note should begin to deteriorate in value, in reliability. 

If we look at the experience around the world with paper money, 

we know that high inflation is not impossible, and we have had 

double digit inflation in the United States. And where people are 

free, they start—in a country with very high inflation—in Latin 

America we see this many times—they prefer to start moving their 

savings into a more stable currency. And then they start posting 

prices in the more stable currency so that they don’t have to repost 

them every day. And then they start accepting payment in the 

more stable currency. Having that freedom makes the public a lot 

better off. So giving people an additional option doesn’t undermine 

the stability of the current monetary system. That is under the 

control of the people who issue the current money. 

Chairman PAUL. Dr. Parks? 

Mr. PARKS. What I suspect they are going to do is to ignore this 

altogether, not raise any objections at all, just leave it alone. However, should any objections come forth, I think the best response 

is that the irredeemable paper-ticket money is going away, and, in 

fact, the history of the world is that these paper moneys always go 

away. Why should this one be any different? 

9 

Second, the irredeemable paper-ticket dollar has lost something 

like 98 percent of its purchasing power since the Federal Reserve 

was formed. Why does anybody think that the last 2 percent is sacrosanct? 

Third, there is a whole bunch of—how shall I say—trial balloons 

being put forth by the media talking about currency depreciation 

and why it is acceptable. So there was a time roughly about a year 

ago when Jeffrey Garten—Jeffrey Garten had a minor role in the 

Nixon Administration, was an Under Secretary of, I think Commerce, in the Clinton Administration, went on to be Dean of the 

Management School at Yale University, wrote five books, sometimes a publisher of articles in Business Week, member of the 

Council on Foreign Relations—published an article in the Financial 

Times, something to the effect of, we have to get ready for a weaker dollar. And he says in the Financial Times, the United States 

is going to have to camouflage a slow motion default. ‘‘Camouflage.’’ 

In other words, not really explain to the people what they are 

doing. But there is no question at all that the obligations of this 

government, of all the local and State governments and all the 

other debts, these obligations are not going to be met. People’s pensions are going to be lost. 

Then this was followed up just recently by a professor from Harvard, Professor Rogoff, who published a piece saying that once 

every 75 years or so we have to have extra inflation, maybe 6, 7 

percent, in order to get rid of this debt. And this was legitimatized 

further by Floyd Norris, senior writer from The New York Times, 

a very senior guy. He wrote an article, ‘‘Sometimes inflation is not 

evil.’’ 

So what they are really doing is setting us up for the depreciation of the dollar. And we know from history that once this gets 

started, once this gets out of the can, there is no way to put it back 

in the can. 

Other things about this competition and money. It is true that 

you can make contracts in gold. However, in regular life, if you 

should have a contractual dispute with somebody and it gets settled in the courts, that judgment is going to come down in the irredeemable paper-ticket money. And it is also noteworthy that the 

people in the financial sector have gotten the International Monetary Fund—in 1978—to add a provision to the IMF Articles of 

Agreement—it is like their bylaws—to prohibit member countries 

from linking currencies to gold and only to gold. These folks have 

really knocked themselves out to get gold out of the monetary 

structure and I think part of the response should be that the reason they did that is so that they could garner unearned profits. 

I have good evidence to show that. I think I am past my time. 

I don’t know if you want to see some of that evidence. 

I am asking you a question. Should I put it up? 

Chairman PAUL. Yes. 

Mr. PARKS. Thank you. Put up slide number 67, please. I am 

sorry, 56. Do you have that? 63. It is important. So if you go back 

to 1980, the money supply in this country, defined by the Federal 

Reserve at that time, was M3, was something on the order of $2 

trillion. And the market capitalization of the stock market was 

roughly $1 trillion. The financial sector portion of that was roughly 

10 

5 percent, roughly $50 billion. You shift ahead to 2007. Now all created flat out of nothing, with no work, now the money supply is 

something on the order of $13 trillion. The stock market capitalization is approaching $20 trillion and now the value of the financial 

sector firms is something like $4 trillion. It went from $50 billion 

to $4 trillion. Forget about the bonuses. Think stock options. These 

folks have garnered just an incredible amount of money. They don’t 

even know what to do with it. That would not have been possible 

if we had an honest monetary structure. And the way they got 

away from an honest monetary structure is they got gold out of the 

system. And the legal tender laws helped do that. So really you 

have to get rid of legal tender. 

Chairman PAUL. Thank you. I want to move on. I want to yield 

time to the vice chairman of the committee, the gentleman from 

North Carolina, Walter Jones. 

Mr. JONES. Mr. Chairman, thank you very much. Dr. Parks and 

Dr. White, thank you very much for your testimony today. I am 

going to take a little different approach. I am not an expert in financial matters of this magnitude, but I have learned a lot from 

my good friend Ron Paul, and being part of the Liberty Caucus has 

at least exposed me to some individuals like yourself who could 

help me become more interested in the issue of monetary policy. 

I am one who is very much concerned, as most Americans are, 

that we are headed down the road of no return. And when I listened to both of your testimonies—and I listened very carefully— 

it brings me to a question that the average working American, 

which I am a part of that group, by the way, when do we know 

that we get to a monetary point of no return? When that collapse 

comes, is that something in your opinion that you see happening 

sooner rather than later? And what should the average person— 

what will make the average person realize that we are in a collapse 

as it relates to strength of the dollar? 

Mr. WHITE. I think we are getting mixed messages right now. If 

we look at the exchange value of the U.S. dollar, it has declined 

precipitously the last couple of years. If we look at the price of gold, 

of course, that is shooting through the roof. And those are telling 

us that people don’t want to hold their wealth in dollars. They 

want to move it into something they think is safer. On the other 

hand, if you look at the inflation indexed bonds or if you look at 

long-term bonds, those are not signaling the expectation of high inflation. But I am not sure how much we can trust those signals 

anymore because the Federal Reserve now has a policy of buying 

30-year bonds to drive their prices up and drive their yields down. 

So that signal may be jammed a little bit. 

But when we see all those signals indicating that high inflation 

is coming, then we know we have a big problem on our hands. And 

of course we don’t just have a monetary problem. We also have a 

fiscal problem. We have a problem of an unsustainable debt going 

forward. And the two issues are of course related. As Dr. Parks 

mentioned, there has been talk about how we need inflation in 

order to relieve our national debt in real terms. But that is nothing 

more than a default, sort of behind a very thin veil in the form of 

the value of the dollars being paid back is reduced by half instead 

of the debt is explicitly cut in half. But it is the same thing. So 

11 

when that becomes sort of respectable talk, then we have to be 

very worried. 

I am not sure if I can identify exactly a tipping point. But when 

we see inflation get into double digits, then we will know we are 

in big trouble. 

Mr. PARKS. I would say that collapse can come at any moment. 

And the amount of leverage in the system is beyond belief. Put up 

slide number 71, please. This is a slide showing the amount of derivative bets the banks have made all over the planet. It is something north of $600 trillion. This data comes from the Bank for 

International Settlements, which is sort of like an umbrella organization for all the central banks—it has sovereignty by the way. But 

one of the things it does, they calculate all these derivative bets. 

Slide 71. There you go. 

So after the last tie to gold was broken, which was in 1971, as 

you can see from this chart, basically the only derivative bets you 

had were things like commodities, corn, soybeans or whatever. But 

after the last tie to gold was broken you start to have volatility in 

interest rates, big volatility, and big volatility in foreign exchange 

rates, and people who are in business and people who trade between countries need to hedge that. Banks have made an incredible 

number of bets on this. According to the Bank for International 

Settlements, the amount at risk that can be lost is something like 

$30 to $40 trillion and this is worldwide. In this country, according 

to the Office of the Comptroller of the Currency, the amount of derivative bets is something on the order of $200 trillion, and of that, 

one bank, JPMorgan Chase has something like $80 trillion worth 

of derivative bets. 

These bets, by the way, you have counterparty risk and that is 

what happened with AIG. That is why they really had to bail out 

AIG. AIG owed money to a bunch of banks. If you let AIG go down, 

then those banks’ balance sheets become impaired. 

But also on this business of inflation, they have changed the 

methodology of how they compute the CPI multiple times since the 

Clinton years. 

Put up slide 27, please. There is a guy who is a scholar for us. 

His name is John Williams. He is in retirement now. He used to 

be an establishment economist with clients like Boeing and IBM. 

And what he does is he calculates the CPI using the consistent 

methodology from the 1980s—that is that top blue line—versus 

what the Bureau of Labor Statistics tells us today. And as you can 

see, on a consistent methodology basis, inflation is already and has 

been running 10, 11 percent for like 25 years. The understatement 

of the CPI, there are innovations such as the hedonic pricing, geometric weighting, substitution. Who knows what these people are 

talking about? They really lull people into thinking it is not as bad 

as it is. 

I have prepared an analysis. Go to chart number 29, please. 

These are my health care premiums for Oxford while I had Oxford, 

and I compare the year-on-year increases with the medical component of the CPI. Next slide, please. With the medical component of 

the CPI and my insurance premiums—this is everybody in the 

whole country—they are going up 15 percent a year. But the medical component of the CPI is going up 4 percent a year. So they 

12 

mislead people on that. And of course people who are seniors, who 

get Social Security and those benefits are keyed to the CPI. Disabled veterans, people who have cost-of-living escalations and 

union contracts and of course holders of Treasury inflation protection bonds, these people are all being cheated. But the tipping 

point comes, you don’t know how it is because of the leverage. It 

is the leverage that always brings you down. And the leverage is 

beyond belief. As I said, it could happen while I am talking. You 

don’t know when it is going to be. 

Mr. JONES. Thank you, Mr. Chairman. 

Chairman PAUL. I have a couple of follow-up questions that I 

would like to ask. I will start with Dr. White. 

We have had this system of money since 1971 where there is no 

connection to gold and the dollar has been used as a reserve currency, to a slightly less degree than it was even a year ago, but it 

is still the major reserve currency and most of the countries hold 

dollars. And they pyramid down and inflate their own currencies 

from this. Have there been many times in history that it has been 

this significant, this big, this worldwide with the fiat currencies? 

I know we have had fiat currencies for as long as we can date. People have debased their currency in different manners. But has it 

ever been this big? Is this a special phenomenon? Or is this something that you can go back in history and say, it was sort of like 

this 200 years ago or 300 years ago and we worked our way out 

of it? How do you put this in perspective in history? 

Mr. WHITE. As far as the international monetary system goes, 

the international monetary system was never a fiat system. It was 

the international silver standard and the international gold standard. And of course there is no potential for runaway inflation when 

you have a metallic currency. It is only mined to—1, 2 percent of 

the stock is produced each year. The stock of gold just doesn’t grow 

that fast. And in fact, that makes it possible to have an international monetary system. It is not controlled by any one country. 

And so countries can join, knowing that it is safe from political devaluation from the interest of any one country undermining the 

system. 

Countries that have adopted the dollar or who fix their own exchange rate to the dollar do so when they think the dollar is the 

most popular currency in world markets. But as you have mentioned, as the dollar becomes a little shakier, they start to shy 

away. China, most importantly, has moved from basing their currency entirely on the dollar to now a basket of currencies. So we 

are starting to see other countries starting to back away from the 

dollar. 

In that sense, I think the move to create the European monetary 

system provides some real competition to the dollar as an international reserve currency. And we can only hope that that will give 

the Fed a signal that there is somebody they don’t want to inflate 

faster than. Of course, it seems to be a race to the bottom right 

now. 

Chairman PAUL. If we were successful and had something like 

we are proposing and we had a competing currency, what would 

happen with the concept of fractional-reserve banking? Would more 

13 

laws have to be written? Or would they follow the same pattern 

that we have today? How do you think that would work? 

Mr. WHITE. That is a very good question. If private gold and silver coins begin to be popular, people are going to want to have 

bank services denominated in gold units or silver units, whatever 

it is that they find attractive. I am not sure we really have a sort 

of legal barrier against the Fed controlling that parallel banking 

system the way they control the current banking system. So it 

might be necessary to construct some barriers and say, here are 

the rules for this parallel banking system. It doesn’t have deposit 

insurance. It doesn’t have control by the Federal Reserve System 

as to reserve ratios or investment portfolios. So we would need to 

think about that if we got to the point where there was a big demand for those services. 

Chairman PAUL. I will follow up on that and ask both of you 

what your opinion is. Of fractional-reserve banking, you know in 

free market circles, there is a disagreement to a large degree on— 

I know Rothbard was very adamant, his position of no fractionalreserve banking. What is your opinion about what would be proper? And Larry, you can answer as well, as to whether we should 

have rules on what the banks declare. 

Mr. WHITE. I think the basic should be freedom of contract. And 

as long as people make informed fractional-reserve contracts with 

a banker, I have no problem with that. Historically, that seems to 

have been what was more popular. If you have a fractional reserve 

then you don’t need to pay storage fees to the vault keeper who is 

keeping your gold and you may even get interest on your account 

balance. So it is an attractive deal. It doesn’t have to be based on 

hoodwinking the customers. Customers brought their money to 

fractional-reserve banks because they got a better deal. 

The other thing worth noting is that you can’t really have circulating paper currency, which is more convenient than carrying 

around coins for many purposes, unless you have fractional reserve 

banking. Because if it is a warehouse receipt, the warehouse needs 

to know who to charge the storage fees to. But if it is an anonymous circulating note, like we are accustomed to, how do they 

know who to charge the storage fees to? So I don’t know of any historical examples of circulating warehouse receipts. But there are 

plenty of examples of pay to the bearer on demand in gold or silver 

circulating banknotes. 

Chairman PAUL. Do you have an opinion on fractional-reserve 

banking? 

Mr. PARKS. First question, put up slide number 73. This has to 

do with the size, the amount of fiat money out there. This is an 

analysis that is put together by McKinsey Global. And in 1980, the 

amount of financial securities was roughly—I don’t know, it looks 

around $18 trillion. By the end of 2009, it was close to $200 trillion. Last year, it hit something like $212 trillion. I don’t know if 

you can see on that chart, but at the very top it is in red, and that 

is gold. So all the rest is—it is irredeemable paper-ticket money, 

U.S. and foreign money, or securities denominated in irredeemable 

paper-ticket money. 

The nice thing about this bill is that it leaves everything in 

place. It leaves the dollar in place, leaves the Federal Reserve in 

14 

place, and it really facilitates a transition. And for everyday purposes, it really doesn’t make any difference to people whether we 

use an irredeemable paper-ticket, token, or whatever. They go to 

work, they get paid, they buy stuff, who cares? Where it becomes 

important is for future payment for people’s pensions, for people’s 

annuities, for people’s savings. There they want to know in the future that they are going to have what they have. So in that way, 

this bill is very important. 

For future transactions, people will want gold and we have precedent in this country where this kind of thing was instituted. And 

that was after the Civil War. You recall the Civil War was financed 

with greenbacks at one point. The greenbacks were discounted 

roughly 50 percent against gold. And the way people looked to protect themselves afterwards is they put a gold clause in their contracts. And when they got paid later on they got the same amount 

of gold they were expecting. When the United States issued Liberty 

Bonds during the first World War, they had a gold clause in the 

bonds. 

As for fractional-reserve lending, I agree with Dr. White. But I 

want to add something to that. And that is, it is fractional-reserve 

lending that got us into trouble from the get-go. And the reason is, 

the banks have engaged in fraud in their basic banking relationships right from the beginning. And so, for example, banks told 

people that they were depositors. They are not depositors. They are 

unsecured creditors. And second, banks told people they could get 

their money back on demand. In fact and in law, when these people 

put money into a bank it is not their money anymore. It is the 

bank’s money to do with as the bank wishes. If banks want to do 

fractional-reserve lending, they need to do what I call full disclosure. They have to tell people right out, we are going to lend this 

money to somebody else or whatever, that you may not be able to 

get it back. Some people may want to take that gamble. But my 

guess is they won’t. Ordinary people put money in the bank for security, for safety. They don’t want to have it in the mattress. It 

might be stolen or lost or whatever. They are not interested in 

making interest on their savings. They just want it to be safe. 

Those people are not going to be involved in fractional-reserve lending. 

As to Murray Rothbard’s point of view, Murray was talking always about a gold backed dollar. That is a mistake. Again, you 

have to go back to what a dollar is. A dollar is the weight of silver. 

There is no such thing as a gold-backed piece of silver. The trouble 

with what Murray did is, he didn’t go back further than the Coinage Act of 1792 where Hamilton defined the dollar as 371.25 grains 

of silver. The notion was that if Hamilton could define the dollar 

one way, we could define it another way. That is not true. 

But again, the beauty of this H.R. 1098 bill is that we don’t really have to address those issues. I think what will happen is that 

for long-term transactions, people will start using the gold clause. 

And over time, there will be a transition. During that period, all 

the irredeemable paper-ticket money will go away. The Federal Reserve will go away. Again, there is no possibility, in my view, as 

a practical matter, of having some kind of discontinuity in our 

15 

monetary system, getting rid of the Fed. But this in fact is really 

important and we need to bring people up to curve as to why it is. 

Chairman PAUL. Congressman Jones? 

Mr. JONES. Mr. Chairman, thank you. I want to go a little bit 

off of your expertise, but I think you will have some very helpful 

comments. I have said two of the worst votes I ever made since I 

have been in Congress were the vote to go into Iraq and the repeal 

of Glass-Steagall. I realize this doesn’t deal exactly with monetary 

issues, but we do have banks. You have made reference to banks 

many times in your comments about monetary policy. 

Do you feel that when Glass-Steagall was repealed by the Congress, it helped the banking world or it created opportunities for 

greed and for mistakes? 

Mr. PARKS. Greed is part of the human condition. Glass-Steagall 

did not do anything to change that. There is a fellow, his last name 

was Warburg, he was the son of Paul Warburg, what was his 

name? One of Franklin Roosevelt’s advisors. He wrote a book in the 

1930s called, ‘‘The Money Muddle,’’ which really led to this business with Glass-Steagall, and what they were complaining about in 

those days was using bank money to speculate in the securities 

market. Bank money, it was understood, was money that the bank 

created out of nothing as opposed to regular money, gold and silver, 

and so the purpose of Glass-Steagall was really to keep the banks 

from overleveraging, and when Glass-Steagall was passed, now the 

banks could overleverage in a big way. 

I have charts that I can put up for you that show what happens 

to the banks. Let me just get those out. Start with chart number 

67, please. We will go right through them. 

If you go before the last tie to gold was broken, and look at bank 

revenues, they are tiny. What are banks doing? They are processing payments, they are handling the check clearing system. But 

after the last tie to gold was broken, look what happened to bank 

revenues, it went up to something like $800 plus billion. This is 

just for passing paper around. 

Go to the next slide. Look at bank net income after the last tie 

to gold was broken. It went up to something like, I don’t know, 

$130 billion at its peak. This is after paying compensation to employees. 

Go to slide 70, please. Look what happened to bank employee 

compensation. So the whole notion of all this business of allowing 

the banks to leverage up, this was enormously beneficial to employees, to the banks themselves. Over the period after the last tie to 

gold was broken, banks paid out over a trillion dollars in dividends, 

a trillion dollars in dividends, and just a couple of years ago, it 

turns out that while bank balance sheets said they had to get, I 

don’t know, $2 trillion from the Federal Reserve, all this money 

that they paid out in bonuses and what-not, it was not real profits, 

and the only reason they were able to do that is because they were 

able to leverage up, and the only reason they were able to leverage 

up is because we have irredeemable paper ticket electronic money 

as legal tender. If you had gold and silver money, you would be 

back on that curve before the last tie to gold was broken, and it 

is the banks that really have corrupted the system, but again it is 

probably counterproductive to point fingers. Really what we want 

16 

to do is have a transition, and again the whole system is going to 

collapse no matter what. It is urgent that we pass this bill in order 

to facilitate a transition to an honest monetary structure. 

Mr. JONES. I understand. Dr. White, could you comment on 

Glass-Steagall as well? 

Mr. WHITE. I would say the repeal of Glass-Steagall had very little to do with the financial crisis. There would be absolutely no objection to repealing Glass-Steagall; that is, letting commercial 

banks align or merge with investment banks and insurance companies, if it weren’t for deposit insurance and if it weren’t for the toobig-to-fail doctrine. 

If those had not been in place, then if somebody wants to form 

a financial supermarket, okay, we will see if that will fly. It is no 

skin off our nose. But when we begin to guarantee the liabilities 

of investment banks which are highly leveraged, which are not like 

commercial banks, which are not even part of the payment system, 

that is really an invitation to trouble, and when the Federal Reserve Bank of New York intervened in the Bear Stearns failure and 

took up the bad assets so that JPMorgan Chase would buy the rest, 

it is not the first sort of too-big-to-fail action, but it is the one that 

sort of sticks in my craw. That was really bad policy. 

Mr. JONES. Right. 

Mr. WHITE. And I don’t think it had that much to do with the 

repeal of Glass-Steagall. But if we treat investment banks like they 

are entitled to too-big-to-fail protection, then we are really asking 

for trouble, and that is really what needs to be undone. 

Mr. JONES. Thank you, sir. 

Mr. PARKS. Can I add to that, please? If you have gold and silver 

as money, gold as money, this too-big-to-fail stuff doesn’t even come 

up. The only reason you have this is because of the irredeemable 

paper ticket money. You could never have this kind of leverage 

with gold, and in fact the money-center banks, they have leveraged 

their balance sheets something like 30 to 1, impossible if you had 

an honest monetary system. So really one feeds into the other, and 

this whole business with too-big-to-fail, the lender of last resort, 

Federal Deposit Insurance—Federal Deposit Insurance is not insurance; it is just a subsidy to the banks, and the reason it came 

about is that after the banks failed in 1933—they were failing before 1933—people were not putting their money back into the 

banks, and so they passed that legislation to induce people to put 

their money back into the banks. 

As far as the lender of last resort comes about, again, that is the 

result of bank leverage, and the only reason you have so much leverage with the banks is because they misrepresented depositors. 

So if I were to borrow money from you, say I want you to lend me 

$10,000, what is the first thing that goes through your mind? I 

would think, what is the collateral? How am I going to get the 

money back? What are you going to do with the money? But if you 

loaned it to a bank and they say, well, this is a deposit, now you 

don’t do the counterparty surveillance, so it is really a function of 

what constitutes the money, and I think you have to go back and 

realize that what we call our money today, our dollar, this is just 

a dishonered promissory note. And in fact one of the quotes I have 

for you, and I will stop right here, is after Franklin Roosevelt 

17 

closed the banks on March 5th, 1933, a lot of people were caught 

short, and there was a question of whether they should print 

script, and here is a quote from William Woodin, Roosevelt’s Secretary of the Treasury, he says the Federal Reserve Act lets us 

print all we need, and it won’t frighten the people. Get this line 

now. It will look like—it won’t look like stage money, it will be 

money that looks like real money. This is the Secretary of the 

Treasury telling you that this stuff is really, in effect, stage money, 

but it looks like real money. This is not real money that we have, 

folks. This is just a piece of paper gussied up with seals and whatnot. It is dishonest, and we need to fix the dishonesty. 

Mr. JONES. Thank you, sir. 

Chairman PAUL. Thank you. I have one more question for Dr. 

White. If we moved in to a period of time where we had competing 

currency, we have one group of people thinking a dollar equals a 

Federal Reserve note and let’s say we or somebody decides that a 

dollar equals 371 grains of silver, and we use an old silver dollar, 

that could be competing, but the definitions are obviously completely different. How do you think it would be resolved when it 

comes to paying your taxes? Because they won’t allow—I think this 

is part of the reason that we allowed the resistance because some 

people have tried this, paying salaries with old silver dollars, and, 

oh, that is a dollar, I don’t have to pay any taxes on this. But it 

is a real problem because if they think that anybody—we want to 

get rid of some of the inhibitions to a competing currency, but if 

the people who use silver dollars had no taxes to pay, it would be 

a tremendous advantage. I think we could win that argument. But 

what do you think the IRS and the tax people are going to say 

about this? And do you have an idea how that could be resolved? 

Mr. WHITE. I am sure the IRS would like the taxes to be paid 

in the equivalent of what they would be if all the transactions had 

been done in Federal Reserve notes. It would be an interesting exercise to look at around the world and see if there are other countries that have faced this problem of having taxes denominated in 

multiple currencies. I really don’t know that much about it myself, 

but it seems like not a very important problem. On tax day, you 

need to have some exchange rate between the different currencies 

people might be allowed to pay in or you would require them to 

convert their own books into whatever the official currency for tax 

purposes is, but 364 days of the year that shouldn’t bother them. 

It is pretty easy with software these days to convert one column 

of figures into another column of figures. 

Chairman PAUL. It seems like in the computer age we could 

probably work that out rather well. If I made one dollar of profit 

and silver was $40, maybe it could be worked out, but of course the 

more ideal thing would be not to have the income tax, and we 

wouldn’t have to worry about problems like that. 

Okay, Walter is gone. 

18 

I think that we will conclude. The Chair notes that some members may have additional questions for this panel that they may 

wish to submit in writing. Without objection, the hearing record 

will remain open for 30 days for members to submit written questions to these witnesses and to place their responses in the record. 

This hearing is now adjourned. 

[Whereupon, at 3:35 p.m., the hearing was adjourned.] 

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A P P E N D I X 

September 13, 2011 

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