‘‘Such term does not include any amount on which 
any interest is paid or which is received or held by a bank 
or savings association pursuant to a loan agreement for 
a fixed term of time (as determined without regard to any 
designation on the agreement as a loan, certificate, or 
other particular instrument).’’. 
SEC. 4. COORDINATION WITH OTHER LAW. 
(a) IN GENERAL.—This Act shall supersede any pro-
vision of Federal law in effect on the day before the date 
of the enactment of this Act that is inconsistent with any 
provision of this Act but only to the extent of such incon-
sistency. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.— 
Before the end of the 6-month period beginning on the 
date of the enactment of this Act, the Secretary of the 
Treasury shall submit to the Congress a proposed draft 
of legislation of the Monetary Authority that, if enacted, 
would implement such technical and conforming amend-
ments as the Monetary Authority may recommend— 
(1) to repeal the provisions of law referred to 
in subsection (a) that are inconsistent with this Act; 
and 
(2) to further clarify and implement the provi-
sions of this Act. 
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TITLE I—ORIGINATION OF 
UNITED STATES MONEY 
SEC. 101. EXERCISE OF CONSTITUTIONAL AUTHORITY TO 
CREATE MONEY. 
(a) IN GENERAL.—Pursuant to the exercise by the 
Congress of the authority contained in the 5th clause of 
section 8 of Article I of the Constitution of the United 
States of America— 
(1) the authority to create money within the 
United States shall hereafter reside exclusively with 
the Federal Government; and 
(2) the money so created shall be known as 
United States Money and denominated and ex-
pressed as provided in section 5101 of title 31, 
United States Code. 
(b) EXERCISE OF SOVEREIGN POWER.—The creation 
of United States Money under this Act is the legal expres-
sion of the sovereign power of the Nation and confers upon 
its bearer an unconditional means of payment. 
(c) LIMITATION ON EXPRESSION.—Beginning on the 
effective date— 
(1) only the coin, notes, or other forms of legal 
tender, including electronic currency, originated by 
the United States Treasury under the authority of 
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this Act shall be deemed as United States money; 
and 
(2) it shall be unlawful for any person to des-
ignate any credit, note, bond, script or other finan-
cial instrument as United States Money. 
SEC. 102. UNLAWFUL FOR PERSONS TO CREATE MONEY. 
Any person who creates or originates United States 
money by lending against deposits, through so-called frac-
tional reserve banking, or by any other means, after the 
effective date shall be fined under title 18, United States 
Code, imprisoned for not more than 5 years, or both. 
SEC. 103. PRODUCTION OF UNITED STATES MONEY. 
(a) COMMENCING FULL PRODUCTION OF UNITED 
STATES CURRENCY.—Section 5115 of title 31, United 
States Code, is amended by striking subsections (a) and 
(b) and inserting the following new subsections: 
‘‘(a) IN GENERAL.—In order to furnish suitable 
notes for circulation as United States money, the Sec-
retary of the Treasury shall cause plates and dies to be 
engraved in the best manner to guard against counterfeits 
and fraudulent alterations, and shall have printed there-
from and numbered such quantities of such notes of the 
same denominations as are currently issued. 
‘‘(b) FORM AND TENOR.—United States currency 
notes for circulation as United States money shall be in 
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form and tenor as directed by the Secretary of the Treas-
ury.’’. 
(b) CEASING PRODUCTION OF FEDERAL RESERVE 
NOTES.—The Secretary of the Treasury shall wind-down 
and cease production of Federal reserve notes under the 
8th undesignated paragraph of section 16 of the Federal 
Reserve Act (12 U.S.C. 418) as quickly as practicable 
after the date of the enactment of this Act, but no later 
than the effective date, in coordination with the start-up 
and maintenance of production of United States currency 
under section 5115 of title 31, United States Code. The 
Secretary shall ensure that at all times the amount of Fed-
eral Reserve notes in circulation is sufficient to meet de-
mand until the production of United States currency is 
sufficient to meet such demand. 
(c) CONTINUING
CIRCULATION
UNTIL
RETIRE-
MENT.—Any Federal Reserve notes in circulation shall 
continue to be legal tender until retired in accordance with 
applicable provisions of law. 
SEC. 104. LEGAL TENDER. 
(a) IN GENERAL.—United States Money shall enter 
into general domestic circulation as full legal tender in 
payment of all debts public and private. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
Section 5103 of title 31, United States Code, is amended 
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by striking ‘‘(including Federal reserve notes and circu-
lating notes of Federal reserve banks and national banks)’’ 
and inserting ‘‘in the form of United States Money’’. 
SEC. 105. DISBURSEMENTS TO BE DENOMINATED IN 
UNITED STATES MONEY. 
On the effective date, all United States Government 
disbursements shall be denominated in United States 
Money, the unit being the dollar, symbolized as $. 
SEC. 106. ORIGINATION IN LIEU OF BORROWING. 
(a) IN GENERAL.—After the effective date, and sub-
ject to limitations established by the United States Mone-
tary Authority under provisions of section 302, the Sec-
retary shall originate United States Money to address any 
negative fund balances resulting from a shortfall in avail-
able Government receipts to fund Government appropria-
tions authorized by Congress under law. 
(b) PROHIBITION ON GOVERNMENT BORROWING.— 
After the effective date, unless otherwise provided by an 
Act of the Congress enacted after such date— 
(1) no amount may be borrowed by the Sec-
retary from any source; and 
(2) no amount may be borrowed by any Federal 
agency or department, any independent establish-
ment of the executive branch, or any other instru-
mentality of the United States (other than a na-
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tional bank, Federal savings association, or Federal 
credit union) from any source other than the Sec-
retary. 
(c) RULE OF CONSTRUCTION.—No provision of this 
Act shall be construed as preventing the Congress from 
exercising its constitutional authority to borrow money on 
the full faith and credit of the United States. 
(d) TECHNICAL AND CONFORMING AMENDMENT.— 
On the effective date, chapter 31 of title 31, United States 
Code, is hereby repealed, subject to the retirement of out-
standing instruments of indebtedness of the United States 
in accordance with section 401. 
SEC. 107. RETIREMENT OF INSTRUMENTS OF INDEBTED-
NESS. 
Before the effective date, the Secretary shall com-
mence to retire all outstanding instruments of indebted-
ness of the United States by payment in full of the amount 
legally due the bearer in United States Money, as such 
amounts become due. 
SEC. 108. ACCOUNTING. 
(a) IN GENERAL.—The Secretary shall account for 
the disbursement of United States Money and of current 
fund balances through accounting reports maintained and 
published by the Secretary and by departments and agen-
cies of the United States Government. 
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(b) GAO AUDIT.—The Comptroller General of the 
United States shall conduct an independent biennial audit. 
TITLE 
II—ENTRY 
OF 
UNITED 
STATES 
MONEY 
INTO 
CIR-
CULATION 
SEC. 201. ENTRY OF UNITED STATES MONEY INTO CIR-
CULATION. 
The Secretary shall cause United States Money to 
enter into circulation by and through any of the following 
means: 
(1) Any origination or disbursement of funds to 
accomplish Federal expenditures authorized and ap-
propriated by an Act of the Congress. 
(2) Any disbursement to retire outstanding in-
struments of indebtedness of the Federal Govern-
ment or the Secretary of the Treasury as such in-
struments become due. 
(3) Any contribution authorized by an Act of 
the Congress subject to any limitation established by 
the Monetary Authority to the Revolving Fund es-
tablished in section 302 of this Act. 
(4) Any action provided for in the transitional 
arrangements specified in title IV of this Act, includ-
ing the conversion of all deposits in transaction ac-
counts into United States Money. 
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(5) Any exercise of ‘‘lender of last resort’’ emer-
gency authorities under the emergency procedures 
specified in section 305. 
(6) Any purchase of stock in a Federal reserve 
bank from a member bank and of any other assets 
as prescribed under the Federal Reserve Act as re-
quired to accomplish the purposes of section 301. 
(7) Any other means, and for any other purpose 
explicitly authorized by an Act of the Congress that 
becomes law after the effective date of this Act. 
TITLE III—RECONSTRUCTION OF 
THE FEDERAL RESERVE SYSTEM 
SEC. 301. RECONSTITUTION OF THE FEDERAL RESERVE. 
(a) GOVERNMENT ACQUISITION OF ALL NET ASSETS 
OF FEDERAL RESERVE SYSTEM.—On the effective date, 
the Secretary shall purchase on behalf of the United 
States all net assets in the Federal Reserve System, in-
cluding the Federal reserve banks, according to the rules 
specified in the Federal Reserve Act (12 U.S.C. 288) for 
this purpose. 
(b) REPAYMENT OF RESERVES.—Any reserves of any 
member bank that is held by any Federal reserve bank 
shall be returned to the member bank in the form of 
United States Money, subject to the provisions contained 
in sections 401 and 402(b). 
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SEC. 302. ESTABLISHMENT OF THE UNITED STATES MONE-
TARY AUTHORITY. 
(a) MONETARY AUTHORITY.— 
(1) ESTABLISHMENT.— 
(A) IN GENERAL.—There is hereby estab-
lished the Monetary Authority as an authority 
within the Department of the Treasury under 
the general oversight of the Secretary of the 
Treasury. 
(B) AUTONOMY
OF
MONETARY
AUTHOR-
ITY.—The Secretary of the Treasury may not 
intervene in any matter or proceeding before 
the Monetary Authority, unless otherwise spe-
cifically provided by law. 
(C) INDEPENDENCE
OF
MONETARY
AU-
THORITY.—The Secretary of the Treasury may 
not delay, prevent, or intervene in the issuance 
of any regulation or other determination of the 
Monetary Authority, including the determina-
tion of the amounts of money to be originated 
and most efficient method of disbursement con-
sistent with the appropriations of Congress and 
the statutory objectives of monetary policy as 
specified in this Act. 
(2) MEMBERSHIP.— 
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(A) IN GENERAL.—The Monetary Author-
ity shall consist of 9 public members appointed 
by the president, by and with the advice and 
consent of the Senate. 
(B) TERMS.— 
(i) IN GENERAL.—Except as provided 
in subparagraph (E), each member of the 
Monetary Authority shall be appointed to a 
term of 6 years. 
(ii) CONTINUATION
OF
SERVICE.— 
Each member of the Monetary Authority 
may continue to serve after the expiration 
of the term of office to which such member 
was appointed until a successor has been 
appointed and qualified. 
(C) POLITICAL
AFFILIATION.—Not more 
than 4 of the members of the Monetary Author-
ity may be members of the same political party. 
(D) VACANCY.— 
(i) IN GENERAL.—Any vacancy on the 
Monetary Authority shall be filled in the 
manner in which the original appointment 
was made. 
(ii) INTERIM
APPOINTMENTS.—Any 
member appointed to fill a vacancy occur-
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ring before the expiration of the term for 
which such member’s predecessor was ap-
pointed shall be appointed only for the re-
mainder of such term. 
(E) STAGGERED TERMS.—Of the members 
first appointed to the Monetary Authority after 
the enactment of this Act— 
(i) 1 shall be appointed for a term of 
2 years; 
(ii) 2 shall be appointed for a term of 
3 years; 
(iii) 2 shall be appointed for a term of 
4 years; 
(iv) 2 shall be appointed for a term of 
5 years; and 
(v) 2 shall be appointed for the full 
term of 6 years. 
(3) CHAIRPERSON.—One of the members of the 
Monetary Authority shall be designated by the Presi-
dent as the Chairperson of the Monetary Authority. 
(4) DUTIES.—The Monetary Authority shall— 
(A) establish monetary supply policy and 
monitor the Nation’s monetary status; and 
(B) carry out such other responsibilities as 
the President may delegate to the Monetary 
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Authority or that may be provided by an Act of 
Congress. 
(5) GOVERNING PRINCIPLE OF MONETARY POL-
ICY.—The Monetary Authority shall pursue a mone-
tary policy based on the governing principle that the 
supply of money in circulation should not become in-
flationary nor deflationary in and of itself, but will 
be sufficient to allow goods and services to move 
freely in trade in a balanced manner. The Monetary 
Authority shall maintain long run growth of the 
monetary and credit aggregates commensurate with 
the economy’s long run potential to increase produc-
tion, so as to promote effectively the goals of max-
imum employment, stable prices, and moderate long- 
term interest rates. 
(6) MEETINGS.—The Monetary Authority shall 
meet on a regular basis subject to the call of the 
Chairperson, the Secretary, or a majority of the 
members. 
(7) PAY.—The members of the Monetary Au-
thority shall receive a salary at annual rates equal 
to the annual rate determined under section 5 of 
title 28, United States Code, for an associate justice. 
(8) STAFF.—The Monetary Authority may ap-
point and establish the pay of such employees as the 
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Monetary Authority determines is appropriate to as-
sist the Monetary Authority to carry out the duties 
imposed under this section. 
(b) RESPONSIBILITY OF SECRETARY.—The Secretary 
shall regulate the monetary supply in reasonable accord-
ance with targets established by the Monetary Authority. 
(c) REPORTS ON DISCREPANCIES.—The Secretary 
shall report to the Congress any discrepancy between any 
monetary target and the monetary supply in excess of 0.5 
percent at the end of each quarter. 
SEC. 303. ESTABLISHMENT OF THE BUREAU OF THE FED-
ERAL RESERVE. 
(a) IN GENERAL.—Subchapter I of chapter 3 of title 
31, United States Code, is amended by adding at the end 
the following new section: 
‘‘SEC. 314. BUREAU OF THE FEDERAL RESERVE. 
‘‘(a) ESTABLISHMENT.—There is hereby established 
the Bureau of the Federal Reserve as a bureau within the 
Department of the Treasury (hereafter in this section re-
ferred to as the ‘Bureau’). 
‘‘(b) MANAGEMENT.— 
‘‘(1) COMMISSIONER.—The management of the 
Bureau shall be vested in a Commissioner who, with 
the assistance of the Deputy Commissioner and such 
staff as the Commissioner may appoint, shall carry 
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out the duties vested in the Bureau and the Com-
missioner. 
‘‘(2) DEPUTY COMMISSIONER.—There is hereby 
established within the Bureau the position of Deputy 
Commissioner. 
‘‘(3) APPOINTMENT.—The Commissioner and 
the Deputy Commissioner shall be appointed by the 
president, by and with the advice and consent of the 
Senate. 
‘‘(4) TERMS.— 
‘‘(A) IN
GENERAL.—The Commissioner 
and the Deputy Commissioner shall each be ap-
pointed to a term of 7 years. 
‘‘(B) 
STAGGERED
TERMS.—Notwith-
standing subparagraph (A), the person first ap-
pointed Deputy Commissioner shall be ap-
pointed to a term of 4 years. 
‘‘(5) VACANCY.— 
‘‘(A) IN GENERAL.—Any vacancy on the 
Bureau shall be filled in the manner in which 
the original appointment was made. 
‘‘(B) 
INTERIM
APPOINTMENTS.—Any 
member appointed to fill a vacancy occurring 
before the expiration of the term for which such 
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member’s predecessor was appointed shall be 
appointed only for the remainder of such term. 
‘‘(c) DUTIES.— 
‘‘(1) MONETARY POLICY.—The Bureau shall— 
‘‘(A) administer, under the direction of the 
Secretary, the origination and entry into cir-
culation of United States Money, subject to the 
limitations established by the Monetary Author-
ity; and 
‘‘(B) administer lending of United States 
Money to authorized depository institutions, as 
described in section 403 (‘Revolving Fund’) to 
ensure that— 
‘‘(i) money creation is solely a func-
tion of the United States Government; and 
‘‘(ii) fractional reserve lending is 
ended. 
‘‘(2) TRANSFERRED FUNCTIONS.—After the ef-
fective date, the Bureau shall exercise all functions 
consistent with this Act which, before such date, 
were carried out under the direction of the Board of 
Governors of the Federal Reserve System. 
‘‘(3) ITEMIZATION
BY
SECRETARY.—Not less 
than 90 days before the effective date, the Secretary 
and the Monetary Authority shall itemize— 
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‘‘(A) the functions of the Board of Gov-
ernors of the Federal Reserve System that are 
transferred to the Bureau pursuant to para-
graph (2); and 
‘‘(B) the provisions of the Federal Reserve 
Act and other provisions of Federal law, relat-
ing to the functions so transferred, in the appli-
cation of which the term ‘Bureau’ (as estab-
lished under this section) shall be substituted 
for the term ‘Board of Governors of the Federal 
Reserve System’ or ‘Board’, as the case may 
be.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter I of chapter 3 of title 31, United States 
Code, is amended by adding at the end the following new 
item: 
‘‘314. Bureau of the Federal Reserve.’’. 
(c) ROLE OF BOARD AFTER ENACTMENT.—With ef-
fect on the effective date, the Board of Governors of the 
Federal Reserve System shall be dissolved. 
SEC. 304. FORECASTING OF DISBURSEMENT REQUIRE-
MENTS. 
The Secretary shall— 
(1) forecast disbursement requirements on a 
daily, monthly, and annual basis; 
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(2) provide such forecasts to the Congress and 
the public; 
(3) integrate forecasts with the Federal budget 
process; 
(4) maintain a sufficient research capability to 
continuously and effectively assess the impact of dis-
bursement of United States Money on all aspects of 
the domestic and international economies; and 
(5) report to the Congress and the public regu-
larly on the economic impact of disbursements of 
United States Money and the status of the monetary 
supply. 
SEC. 305. LENDER OF LAST RESORT; EMERGENCY PROCE-
DURES. 
(a) RECOMMENDATION OF THE PRESIDENT UPON 
RECOMMENDATION OF EMERGENCY BOARD.—The Mone-
tary Authority may not exercise any authority under the 
3rd undesignated paragraph of section 13 of the Federal 
Reserve Act unless— 
(1) the Emergency Board established under 
subsection (b) recommends, upon a vote of 2/3 of 
the members, to the House of Representatives and 
the Senate, that the House of Representatives and 
the Senate adopt a concurrent resolution calling on 
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(10) The chairpersons and ranking members of 
the Committee on Financial Services and the Com-
mittee on Oversight and Government Reform of the 
House of Representatives. 
(11) The chairpersons and ranking members of 
the Committee on Banking, Housing, and Urban Af-
fairs and the Committee on Homeland Security and 
Governmental Affairs of the Senate. 
(c) RULE OF CONSTRUCTION.—Except as provided in 
subsection (a), no provision of this Act shall be construed 
as affecting the authority of the Monetary Authority under 
the 3rd undesignated paragraph of section 13 of the Fed-
eral Reserve Act. 
SEC. 306. SAVINGS PROVISIONS AND TRANSFER PROVI-
SIONS. 
(a) SAVINGS PROVISIONS.— 
(1) EXISTING RIGHTS, DUTIES, AND OBLIGA-
TIONS NOT AFFECTED.—The establishment of the 
Bureau of the Federal Reserve shall not affect the 
validity of any right, duty, or obligation of the 
United States, the Bureau (as the successor to the 
Board of Governors of the Federal Reserve System 
or any Federal reserve bank), or any other person 
that— 
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(A) arises under any provision of law relat-
ing to any function of the Board of Governors 
of the Federal Reserve System transferred to 
the Bureau by this title and amendments made 
by this title; and 
(B) existed on the day before the effective 
date. 
(2) CONTINUATION OF SUITS.—This Act shall 
not abate any proceeding commenced by or against 
the Board of Governors (or any Federal reserve 
bank) before the effective date with respect to any 
function of the Board of Governors (or any Federal 
reserve bank) transferred to the Bureau by this title, 
except that the Bureau shall be substituted for the 
Board of Governors (or Federal reserve bank) as a 
party to any such proceeding as of the effective date. 
(b) TRANSFER OF CERTAIN PERSONNEL.— 
(1) IDENTIFYING
EMPLOYEES
FOR
TRANS-
FER.—The Secretary and the Chairman of the 
Board of Governors of the Federal Reserve System 
shall— 
(A) jointly determine the number of em-
ployees of the Board necessary to perform or 
support the functions of the Board of Gov-
ernors that are transferred to the Monetary Au-
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thority (if any) and the Bureau of the Federal 
Reserve pursuant to a provision of or amend-
ment made by this title; and 
(B) consistent with the number determined 
under subparagraph (A), jointly identify em-
ployees of the Board of Governors for transfer 
in a manner that the Secretary and the Board 
of Governors of the Federal Reserve System, in 
their sole discretion, determine to be equitable. 
(2) IDENTIFIED EMPLOYEES TRANSFERRED.— 
All employees of the Board of Governors of the Fed-
eral Reserve System identified under paragraph 
(1)(B) shall be transferred to the Monetary Author-
ity or the Bureau of the Federal Reserve, as the 
case may be, for employment. 
(3) FEDERAL
RESERVE
BANK
EMPLOYEES.— 
Employees of any Federal reserve bank, as of the 
day before the transfer date for any employees of 
the Board of Governors of the Federal Reserve Sys-
tem, shall be treated as employees of the Board of 
Governors for purposes of paragraph (1) and (2). 
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TITLE IV—TRANSITIONAL 
ARRANGEMENTS 
SEC. 401. CONVERSION OF FEDERAL RESERVE NOTES. 
(a) IN GENERAL.—Before the end of the 120-day pe-
riod beginning on the date of the enactment of this Act, 
the Secretary shall establish the rules and procedures for 
converting outstanding Federal reserve notes to United 
States Money of equal face value. 
(b) PROVISION OF SUPPLY SUFFICIENT FOR CON-
VERSION AND ISSUANCE.—Before the end of the 150-day 
period beginning on the date of the enactment of this Act 
and as Federal reserve notes are converted to United 
States Money, the Secretary shall begin providing a suffi-
cient quantity of United States Money to the domestic 
banking system to allow for conversion of all outstanding 
Federal reserve notes and the issuance of additional cur-
rency as required. 
(c) DISBURSAL OF FUNDS.—After the end of the 
180-day period beginning on the date of the enactment 
of this Act, all financial institutions within the United 
States shall only disburse funds in United States Money, 
whether as currency, an addition to an available account 
balance, or other instrument. 
(d) DISPOSAL OF OBSOLETE CURRENCY.—The Sec-
retary shall promptly dispose of (in the manner provided 
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under section 5120(b) of title 31, United States Code, for 
the disposal of obsolete United States currency) all Fed-
eral reserve notes as they are returned in exchange for 
United States Money. 
(e) TECHNICAL AND CONFORMING AMENDMENT.— 
Effective at the end of the 150-day period beginning on 
the date of the enactment of this Act, section 16 of the 
Federal Reserve Act is amended by striking the 8th, 9th, 
10th, 11th, and 12th undesignated paragraphs (12 U.S.C. 
418, 419, 420, 421, and omitted, respectively). 
SEC. 402. REPLACING FRACTIONAL RESERVE BANKING 
WITH THE LENDING OF UNITED STATES 
MONEY. 
(a) CONVERSION PROCESS.— 
(1) DEPOSITS.— 
(A) IN GENERAL.—All deposits at any de-
pository institution shall be designated as and 
treated as United States Money (either cash or 
an electronic equivalent) and as transaction ac-
counts. 
(B) PROHIBITIONS.—In addition to sub-
section (d), the following provisions shall apply 
with respect to United States Money on deposit 
in a transaction account at any depository insti-
tution: 
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(i) INTEREST.—No interest may be 
paid or may accrue on any United States 
Money on deposit in a transaction account 
at any depository institution. 
(ii) DEPOSITS
AS
BAILMENT.—Any 
United States Money on deposit in a trans-
action account at any depository institu-
tion shall— 
(I) be treated as a bailment for 
the mutual benefit of the parties and 
terminable at will; and 
(II) as property held in trust as 
bailed property, not be treated as an 
asset of the depository institution or 
as a source of credit. 
(C) EXCEPTION FOR LONG-TERM SAVINGS 
NOT SUBJECT TO DEPOSIT INSURANCE.— 
(i) IN GENERAL.—Subparagraph (B) 
shall not apply to any liability of deposi-
tory institution to a customer for any 
amount in an account at the depository in-
stitution pursuant to a contract that re-
stricts the availability of any such amount 
for a fixed term and does not permit 
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