Let's Get Honest! Blog

Absolutely Uncommon Analysis of Family (and/or "Conciliation") Courts' Operations, Practices, and History

A Brief Reminder of the History of Money, Banking and Other Significant Events When the USA’s (Other) Major Tax-Exempt Foundations Were Being Established [Page added 11-13-2016]


This is a highly impromptu and hardly complete reminder of some economic facts of a time when major tax-exempt foundations were being set up.  I was reviewing the history of one of the clients of a subcontractor I was reporting on as a subcontractor of another major foundation I was reporting on.  If you follow these posts, you may notice I am often reporting on major foundations, coordinated around certain public institution projects, as well as the smaller, but still large (and nicely backed by the coordinated tax-exempt foundations) nonprofits they sponsor.

These are effectively the real government we have nowadays, that is economically impossible to track (because the partnerships are so consistently disbursed among the private realm, not to mention public agencies and departments (HHS, USDOJ) aren’t that wonderful at reporting on their own administration of Congressionally-appropriated grants, that is to say, use of public funding.

This page is about 4,200 words and intended to supplement another post.  It’s not formal enough to post on my already crowded sidebar, but is still published and accessible for those who know to look for it, again, link provided in the original post.  If this “not on the sidebar” status changes, I’ll adjust this paragraph to reflect the same.

I removed content from a post published shortly after another US Presidential Election, reminding us about the “Foundation Factor” influencing significant changes in all public institutions, and internationally coordinated, as well as when it comes to the material I was writing on, involving domestic violence and child treatment issues in the “civil and criminal justice systems” in the US (with family courts, though not specifically mentioned, coming as a specialized brand of civil, apparently). The foundation in question was Henry Luce Foundation, which corporate wealth came from the founder of Time, Life and Fortune.

In that context, this foundation also takes investment advice from “INVESTURE, LLC” in Charlottesville, VA.  One of the partners of Investure, LLC (formed in 2003 its web pages say), by the name of Alice Handy, was from 1998-2000 also the Treasurer of the State (or Commonwealth) of Virginia.  She also was in major leadership position over the UVA investment management company, UVIMCO.  Point in case, with nonprofits and philanthropies, it’s not just what they’re granting to, but also where the assets are being invested, and who controls, or manages that.

Investure, LLC made as I remember it $3.2M in 2014 as an independent subcontractor from this Henry Luce Foundation, another $3M+ from The Commonwealth Fund, and more like $3.7M from the Edna McConnell Clark Foundation, which has involved itself heavily (as these foundations tend to do) with reforming the American courts, juvenile and family included, and (in ECMF’s case) also public school systems (with involvement in the network “ExpandED” formerly “TASC” (The AfterSchool Corporation) and previously with the Harlem Children’s Zone.  What’s ironic about the Harlem Children’s Zone involvement by EMCF (again, as I recall having posted and looked at their tax returns over the last few days, again) is that one of the Schedule B contributors TO the ECMF is an individual among the primary leadership of the HCZ, hedge-master whiz, Stanley Druckenmiller.

I am also reminding myself to review and probably post on the interesting situation with Scottish free banking and the possible influence of the failure of the Ayr Bank in Scotland, thanks to a (scoundrel — who fled leaving the partners to pick up the pieces) Alexander Fordyce on how “Founding Fathers” in the then-U.S. Colonies decided to set up their currency.

It also brings home that debt-causing wars (which also are profit-causing for certain industries) create a demand for currency, which the then-freed population has to pay off, leaving certain questions in place whether being politically free and economically enslaved actually = freedom.

We are in times where economic slavery, it seems to me, is increasing in the US, and I don’t believe this is accidental, or have any questions whether or not this will be soon followed with more blatant forms of slavery, for those who are not already in them

(For example, those working courtesy the US BOP (Bureau of Prisons) for character reform, rehabilitation, and captive workforce (see “FPI” – Federal Prison Industries, Inc., tradename UNICOR, which is literally a part of the US Department of Justice.  But, that’s a somewhat separate topic, which will come up as I also report, again, on how hard it is for a common person with (in this case) even a college degree and some experience in accounting, to make it through the artificial MAZE of self-descriptions set up by the US DOJ to defeat tracking of grants already dispensed with grantees, with years, dates, and total dollar amounts.  The one place you’d think this MIGHT be posted would be on the USDOJ website, or links to a separate databse where it is posted, to also be shown on that USDOJ website.

That it (apparently and for many years — I’ve looked for many years) isn’t, also seems to be a public statement of intent NOT to provide this for common viewing.

With that to set context, this is otherwise a simple copy, cut and paste operation to shorten the 11/11/2016 post found “What I Just Said in that Last 3-Section Post — and Why this is BASIC Info.” (title approximate; the post referred to is titled “Who Produced the Greenbook Initiative….”


Just for a reminder of those times — Great Depression, Wall Street Crash, gold-grab by US President, alternation of form of national currency in the US (1933), creation of the Social Security Act (1934), and with the income tax itself not being that old, actually.  With the advent of taxing everyone, including their wages, came of course among those who were looking forward, of course the need and potential to set up specifically tax-exempt foundations to continue to control their family wealth while, quite literally when it comes to the Great Depression, millions in the USA were starving and on soup lines, and subsequently had to be rescued by the New Deal, for which their future offspring would continue to pay over time.

(Wikipedia quote and my commentary below it added during the move):


Executive Order 6102 is a United States presidential executive order signed on April 5, 1933, by President Franklin D. Roosevelt“forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States”. The effect of the order, in conjunction with the statute under which it was issued, was to criminalize the possession of monetary gold by any individual, partnership, association or corporation.

The stated reason for the order was that hard times had caused “hoarding” of gold, stalling economic growth and making the depression worse.[1][full citation needed] The New York Times, on April 6, 1933, p. 16, wrote under the headline “Hoarding of Gold”, “The Executive Order issued by the President yesterday amplifies and particularizes his earlier warnings against hoarding. On March 6, taking advantage of a wartime statute that had not been repealed, he issued Presidential Proclamation 2039 that forbade the hoarding ‘of gold or silver coin or bullion or currency,’ under penalty of $10,000 and/or up to five to ten years imprisonment.”[2]

The main rationale behind the order was actually to remove the constraint on the Federal Reserve which prevented it from increasing the money supply during the depression; the Federal Reserve Act (1913) required 40% gold backing of Federal Reserve Notes issued. By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit (in the form of Federal Reserve demand notes) that could be backed by the gold in its possession (see Great Depression). If gold could not be legally owned, then it could not be legally redeemed. If it could not be legally redeemed, then it could not constrain the central bank.[3]

Effect of the order[edit]

Executive Order 6102 = = = >

Executive Order 6102 required all persons to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 (consumer price index, adjusted value of $378 today[4]) per troy ounce. Under the Trading With the Enemy Act of 1917, as amended by the recently passed Emergency Banking Act of March 9, 1933, violation of the order was punishable by fine up to $10,000 (equivalent to $183,111 today[4]) or up to ten years in prison, or both.

Order 6102 specifically exempted “customary use in industry, profession or art”—a provision that covered artists, jewellers, dentists, and sign makers among others. The order further permitted any person to own up to $100 in gold coins (a face value equivalent to 5 troy ounces (160 g) of gold valued at about $6,339 in 2016). The same paragraph also exempted “gold coins having recognized special value to collectors of rare and unusual coins.” This protected recognized gold coin collections from legal seizure and likely melting.

The price of gold from the Treasury for international transactions was thereafter raised to $35 an ounce ($641 today[4]). The resulting profit that the government realized funded the Exchange Stabilization Fund established by the Gold Reserve Act in 1934.

The regulations prescribed within Executive Order 6102 were modified by Executive Order 6111 of April 20, 1933, both of which were ultimately revoked and superseded by Executive Orders 6260 and 6261 of August 28 and 29, 1933, respectively.[5]

Executive Order 6102 also led to the ultra-rarity of the 1933 Double Eagle gold coin. The order caused all gold coin production to cease and all 1933 minted coins to be destroyed. About 20 illegal coins were stolen, leading to a standing United States Secret Service warrant for arrest and confiscation of the coin.[citation needed] A legalized surviving coin sold for over $7.5 million in 2002, making it one of the most valuable coins in the world.[6]

From the same article, a paragraph on conditions which existed regarding Gold and Gold Certificates from 1934 – 1977 involving Presidents Nixon and Ford (on the latter end):


The Gold Reserve Act of 1934 made gold clauses unenforceable, and changed the value of gold from $20.67 to $35 per ounce, thereby devaluing the US dollar, since the dollar was gold-based. This price remained in effect until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus abandoning the gold standard for foreign exchange (see Nixon Shock).

The private ownership of gold certificates was legalized in 1964. They can be openly owned by collectors but are not redeemable in gold. The limitation on gold ownership in the U.S. was repealed after President Gerald Ford signed a bill to “permit United States citizens to purchase, hold, sell, or otherwise deal with gold in the United States or abroad” with an act of Congress codified in Pub.L. 93–373,[19][20][21] which went into effect December 31, 1974. P.L. 93-373 did not repeal the Gold Repeal Joint Resolution,[22][23] which made unlawful any contracts that specified payment in a fixed amount of money as gold or a fixed amount of gold. That is, contracts remained unenforceable if they used gold monetarily rather than as a commodity of trade. However, Act of Oct. 28, 1977, Pub. L. No. 95-147, § 4(c), 91 Stat. 1227, 1229 (originally codified at 31 U.S.C. § 463 note, recodified as amended at 31 U.S.C. § 5118(d)(2)) amended the 1933 Joint Resolution and made it clear that parties could again include so-called gold clauses in contracts formed after 1977.[24]

I was born during that time period (exactly when, NOYB!) and remember the change in coinage of the 1970s.  But looking backwards, it sure does seem that first, and by presidential executive order, citizens were ordered under threat to turn in their gold, then priced at $20.++/ounce, after which it was artificially raised to $35.++/ounce, adding a 75% immediate profit to that which the federal government owned because it had simply demanded it.  Anything resembling a rescue in the form of jobs by a government which had just stolen from its own citizens, is something less than a rescue in the larger scheme of things.  After this, we went to war again, putting the nation and its factories to industrious employment, letting more women into the factories, setting up child-care situations close to them (Kaiser shipyards et. al.) then when the men came back home, the women were all but ordered to go back home and start reproducing again, which apparently (see “Baby Boom”) happened.  Dr. Spock advised against breastfeeding –buy formula instead.  Later. and now, mothers are virtually being stigmatized for functioning as mothers again, and the ideal patriotic scenario is universal preschool (with mothers at work) and if there’s not an economic reason, it’s socially required for the children; always alternately pointing fingers at the “low-income” or patronizing them as unable to raise their own children, or simply support themselves, when history is showing a bit of a different reality.

In my recent blogging and with it, closer looks at nation AND internationally-based foundations, I see the universal agreement that universal day care is essential for ALL; Cradle-to-Career pipelines, etc.  In fact, this perpetuates the separate and unequal and allows those currently IN power to stay that way by ensuring future generations have enough education and literacy to become skilled workers — but not enough to figure out who wants them to operate by a completely different set of work, life, social and educational rules than the ruling classes, including the “house-servants” white-collar professionals all too happy to cater to the ruling elites and persuade themselves they aren’t being used by the upper echelon, they are simply helping the lower echelon.


Anyhow, I removed the following from my other post (Back to “HISTORY OF CURRENCY” quotes):

***Illustrated History of American Money Design (Gizmodo.com, Adam Clarke Estes, posted 4/20/2016).  Included for visual interest more than actual history, although it does reference some key dates.

A Short History of Money, From Fur to Fiat, Feb. __, 2012 in the Atlantic, by David Folman

(<==first attempts by Puritans from Boston.  The Crown, who was funding a war with France at the time, said “no deal!”):

In the United States that dispute, between the fear of paper and the advantages of national currency, would rage for more than a century, and it is even front and center in the Constitution.   During the Continental Congress, the founding fathers deliberately forbid the nascent federal government from issuing “bills of credit.” Paper money, one delegate noted, was “as alarming as the Mark of the Beast.” The federal government was, however, granted authority “to coin money, regulate the value thereof … and fit the standard of weights and measure.”

THE RISE AND FALL OF PAPER  But paper issued by the federal government would get its chance, thanks to the Civil War and its economic fallout. To foot the bill of the Union Army’s campaign, the government had to issue $450 million in greenbacks (about $8.1 billion in 2011 dollars). They may have been un-constitutional, but they worked, making it possible to buy equipment and pay soldiers. War has a habit of quieting concerns about currency’s backing.

The end of the war, however, brought with it inflation and renewed attention to the constitutionality of paper money. It was Salmon P. Chase who, first as the secretary of the Treasury Department, made the greenbacks possible. Then, as a Supreme Court justice less than a decade later, he made one of history’s most famous flip-flops, ruling that currency notes were illegal. He made this determination despite the fact that the face printed on them was none other than his own.  A reshuffled Supreme Court–two new justices were appointed by President Ulysses Grant the same day of that initial verdict against paper money–would quickly reverse the ruling.

Two subsequent decisions in what became known as the Legal Tender Cases sealed the deal: the Constitution may not explicitly grant the federal government power to issue bills of credit, but it had the implicit right to do so be- cause governing over a country, or at least this one, would be flat-out impossible without it.

After the chaotic, wildcat period, decisions were made on how to “straighten it out.”  Same article, cont’d.:

Even during that chaotic time, however, the paper’s value always depended, at least in theory, on the idea that you could exchange it for a weight of gold or silver. The conviction that precious metals are value incarnate was still as strong as it had been 2,000 years prior. It was inconceivable that currency could have value without this link to metals– that currency value might be fluid. That too would soon change, during what was the final stage in this metamorphosis from ancient money to the cash in your wallet.BYE, GOLDThe first step was in 1933, when President Franklin Roosevelt called in the public’s gold supply as part of a radical effort to rebuild the economy during the Great Depression. Then in 1944, representatives of the major economies of the free world anointed the U.S. dollar to become the de facto currency of the globe–to replace gold, sort of.

Interesting a “few minor details” were missed here in the recount, such as World War II…or the startup of the Social Security Act, or the virtually overnight “gold-grab” under “Trading with the Enemy” justifications (orders to turn in anything held individually in gold over $10,000 in worth, after which the price of gold — now in government control — was artificially raised…)

The dollar would still be locked at an exchange value to gold of $35 an ounce. Bizarre as it may sound, a small group of men sitting around a table determined that a 1-ounce nugget of gold would be worth, not $34 or $36.75, but $35. Other world currencies, instead of having their own correspondence to gold, would fix their value to the dollar, and wouldn’t be allowed to change their exchange rates without special permission from the newly minted International Monetary Fund.

The rub was that this postwar agreement gave other countries the right to exchange their stashes of dollars for gold. By the early 1970s this policy, even if rarely acted upon, was becoming an increasingly obvious absurdity, as foreign banks held an amount of dollars equal to three times the amount of gold the U.S. owned. The situation aggravated foreign governments because a war- and deficit-weakened U.S. economy also hurt the dollar, and that in turn dragged down other countries’ currencies and economies. Most prominent among the ticked off was France, which converted billions of dollars into gold, hoping other countries would follow suit and force the U.S. to get its financial house in order.But others didn’t follow suit. Instead, on August 15, 1971, President Richard Nixon severed the last remaining connective tissue between a material substance and national currencies. Nobody could exchange greenbacks for gold anymore. The number of dollars required to buy an ounce of gold would from here on out be determined by the markets, just like it is for oil, sod, dental equipment, and tulips. Currencies would be measured against each other, like untethered balloons carried on a breeze.IN DOLLARS WE TRUSTThe dollar, meanwhile, remained the anchor currency of the world: the one ring that kinda rules them all. Other governments hold on to dollars and use them for paying debts, and in the aisles of the global supermarket of goods, most items are priced in U.S. dollars.As for paper money itself, the end of the gold standard meant that cash had become a total abstraction. Its value now comes from fiat, government mandate. It’s a Latin word meaning let there be. In God we better trust. From The End of Money: Counterfeiters, Preachers, Techies, Dreamers–and the Coming Cashless Society by David Wolman. Reprinted courtesy of Da Capo Press.Images, from top: Wampum contract between William Penn and Native Americans; $55 dollar note, backed in gold or silver, dated 1779; modern $20 bill.  [Read whole article at: http://www.theatlantic.com/business/archive/2012/02/a-short-history-of-american-money-from-fur-to-fiat/252620/]
8 Things You May Not Know About Money (from History.com). Helpful because it’s so short and gives dates to National Currency Act, points out that the federal government chartering banks had to do with its need to finance the Civil War.   
A Timeline of U.S. Currency from “DailyReckoning.com”:
1863: Passing of the National Banking ActDuring the Civil War, the National Banking Act of 1863 was passed. Abraham Lincoln signed what was originally known as the National Currency Act, which for the first time in American history established the federal dollar as the sole currency of the United States. Having everyone on the same currency provided for nationally chartered banks, whose circulating notes had to be backed by U.S. government securities.There was an amendment to the act, which required taxation on state bank notes but not national bank notes, which effectively created a uniform currency for the nation. Even though they were being taxed on their notes, state banks continued to flourish in light of the increasing popularity of demand deposits, which, as we told you, took hold during the Free Banking Era.
This “Free Banking Era reminds me to earlier reading on Scottish Free Banking (maybe a half year ago) when I was looking for the origins of the concept of Corporation, period.  I came back to around the year 1610 and in regards to international trade.  Moving forward in that timeline, however, it appears that our country’s history was affected in part by the bank run on the Ayr Bank of Scotland, which had to do also with speculation by one man — Alexander Fordyce — involving the East India Corporation.  Several blogs, including this one quoting the author “White” (1995) under a post “On the Success of Free Banking in Scotland 1714-1844” have been weighing in on it, along with the Mises Institute and others.   Blogger writes in June 2012:

Here’s some excerpts from Free Banking in Britain: Theory, Experience and Debate 1800-1845, Second Edition, by Lawrence H. White (1995).

Underneath a “Related Article” reference from 2004? Rutgers “Working Papers,” on same blog post of Juen 8, 2012 by Meng Hu, is a reference to the run on the Ayr Bank:

The failure of the Ayr Bank was the spark that ignited the Crisis of 1772. Alexander Fordyce, a London speculator, was the key figure. Fordyce had financed a large short position in English East India stock with loans from his bank, Neale, James, Fordyce, and Downe, which in turn was heavily indebted to the Ayr Bank. Early in 1772 the Bank of England tried to limit over-trading by selective limiting credit. … However, when the price of East India shares failed to fall as he had expected, Fordyce went bankrupt and fled to France on June 9, 1772. This event set off a financial panic in London; a number of firms would close by the end of the month. On June 12 a horseman reached Edinburgh with news of Fordyce’s bankruptcy and the alarm in London. A run on the Ayr Bank began, and on June 22 it was forced to stop payment on its notes. A genuine banking panic in Edinburgh ensued. Fifteen private bankers in Edinburgh went bankrupt during the Crisis (Saville 1996, 162).

I remember reading this earlier, regarding the Fordyce & Ayr Bank situation.  It’s from “Scholar.Harvard.edu” and a full 185 pages with references.  What I don’t see is a cover page stating what, exactly, the paper is, whether some doctoral thesis (apparently not), class assignment, or what.  But here’s the introduction (and link of course); the Abstract makes the main points:

Legislating Instability: Adam Smith, Free Banking, and the Financial Crisis of 1772

May 2015
Tyler Beck Goodspeed*


From 1716 to 1845, the Scottish financial system functioned with no official central bank or lender of last resort, no public (or private) monopoly on currency issuance, no legal reserve requirements, and no formal limits on bank size. In support of previous research on Scottish “free banking,” I find that this absence of legal restrictions on Scottish banking contributed to a proliferation of what Adam Smith derisively referred to as “beggarly bankers” which rendered the Scottish financial system both intensely competitive and remarkably resilient to a series of severe adverse shocks to the small developing economy. In particular, despite large speculative capital flows, a fixed exchange rate, and substantial external debt, Scotland’s highly decentralized banking sector effectively mitigated the effects of two severe balance of payments crises arising from exogenous political shocks during the Seven Years’ War. I further find that the introduction of regulations and legal restrictions into Scottish banking in 1765 was the result of aggressive political lobbying by the largest Scottish banks, and effectively raised barriers to entry and encouraged banking sector consolidation. I argue that while these results did not cause the severe financial crisis of 1772, they amplified the level of systemic risk in Scottish credit markets and increased the likelihood that portfolio losses in the event of an adverse economic shock would be transmitted to depositors and noteholders through disorderly bank runs, suspensions of payment, and institutional liquidation. Finally, I find that unlimited liability on the part of Scottish bank shareholders attenuated the effects of financial instability on the real economy.

Keywords: economic history, financial history, political economy, banking, regulation, history of economic thought

* University of Oxford, St. John’s College, St. Giles’, Oxford, OX1 3JP, United Kingdom. E: tyler.goodspeed@economics.ox.ac.uk, URL: http://scholar.harvard.edu/goodspeed

I also found reference to Tyler Beck Goodspeed’s doctoral dissertations (this one, and it sounds like another) along with two others as 2014 recipients of (or competitors for/) a certain prize, under a link containing url “summaries of doctoral dissertations“:

The Dissertations of Cihan Artunç, Tyler Beck Goodspeed, and Eric Schneider: 2014 Alexander Gerschenkron Prize Competition

You have the link, I’d like to show this just as three images rather than copy and format more text:

Image filename applied by LGH: re Scottish Free Banking, Harvard Scholar Tyler Beck Goodspeed Doctoral Dissertation Summary (p 547, Alexander Gershenkron 2014 prize) Image 1 of 3

Image filename applied by LGH: re Scottish Free Banking, Harvard Scholar Tyler Beck Goodspeed Doctoral Dissertation Summary (p 547, Alexander Gershenkron 2014 prize) Image 1 of 3

Written by Let's Get Honest

November 13, 2016 at 2:32 pm

Let's Get Honest! Blog

Absolutely Uncommon Analysis of Family (and/or "Conciliation") Courts' Operations, Practices, and History

iakovos alhadeff


Red Herring Alert

There's something fishy going on!

The American Spring Network

News. by the people, for the people. The #1 source for independent investigative journalism in the Show-Me State, serving Missouri since 2011.

Family Court Injustice

Mom & Kids Need "Just Us" to Fight Family Court Injustice

The Espresso Stalinist

Wake Up to the Smell of Class Struggle ☭

Spiritual Side of Domestic Violence

Finally! The Truth About Domestic Violence and The Church

%d bloggers like this: