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Judging Silver or Something Else?
By Patrick A. Heller
March 06, 2012

I wrote a letter March 2 to the Honorable Richard L. Voorhees, U.S. District Judge for the Western District of North Carolina.

It expresses my views as Bernard von Nothaus awaits sentencing for his counterfeiting conviction last year.

When I finished it, I decided that it would be of interest to readers.

 

Dear Judge Voorhees:

I write on behalf of Bernard von Nothaus, who is awaiting sentencing on his conviction in your court for “counterfeiting.”

I own Liberty Coin Service, the largest rare coin and precious metals dealership in Michigan. I have known von Nothaus personally for about ten years. He visited my store a few times in years past asking if I might be interested in becoming a distributor of his Liberty Dollar products (which I declined for economic reasons rather than any legal concerns). I have talked with him at various financial conferences, and have listened to his public presentations. While I do not know him as well as others do, I have some knowledge of the operation of his company and of the history of US monetary law. On that basis, I ask you to consider the following points.

When von Nothaus solicited me to become a distributor of the Liberty Dollar, he emphasized that the potential usage for barter purposes would be voluntary to the other party. For instance, if making change to a customer making a purchase, we could offer some of his products in lieu of change. If the customer had accepted it, we would have rung up an additional sale. This is a normal practice in a retail store where employees may suggest other products to customers making a purchase. My company has handled a number of Liberty Dollar products over the years. In every instance, we recorded the transactions on the company’s financial records as the purchase or sale of merchandise, not as the receipt or disbursement of “money.”

At all times, von Nothaus contended that he understood it to be legal to make the products he did, so long as he did not initiate force or fraud upon anyone. He never in my presence made statements that Liberty Dollars were monetary issues of the U.S. government or that they were covered by the U.S. government’s legal tender definitions.

It is my understanding that von Nothaus was not charged with delivering products that did not meet the standards he represented. I believe, in fact, that as part of the investigation several pieces were destroyed to confirm that his representations of weight and purity were honest.

The use of the term “dollar” is not owned by the U.S. government. There are many other governments and central banks that issue money using the term “dollar,” including Canada, Australia, New Zealand, Singapore, Hong Kong, Zimbabwe, and others. It happens from time to time that deposits of coinage to banks in Michigan contain Canadian coinage denominated in dollars, yet the U.S. government does not prosecute either the Royal Canadian Mint or the bank’s depositor for “counterfeiting.”

The U.S. government has a history of peaceably allowing the circulation of privately struck coinage in the United States that contained metallic content roughly equal to U.S. monetary standards. In Milledgeville, Georgia in 1830, jeweler Templeton Reid issued $2.50, $5, and $10 gold coins without prosecution. The $5 coin was identified on the piece as “$5” and the $10 coin was identified on the piece as “Ten Dollars.” The weight of these pieces was accurate, but the purity was slightly below U.S. standards.

From 1830 through 1852, Christopher and August Bechtler issued $1, $2.50, and $5 gold coins in Rutherford County, North Carolina and Georgia. Some pieces actually contained as much as 1% more gold content than U.S. coins of the same denomination. The $1 coins state “One Dollar” and the $5 coins state “5 Dollars.” These coins were readily accepted by North Carolina banks at par up into the early 1900s.

There were several issuers of private gold coins in California, Oregon, Utah, and Colorado in the 1800s. Some issuers were prosecuted for issuing pieces that were substandard for gold content, but none were prosecuted for being “counterfeiters.” In fact, three California men were arrested for defrauding people by counterfeiting issues of Wass, Molitor & Co. privately struck gold coinage.

For instance, Clark, Gruber & Co. in Denver began issuing gold coins in 1860 and paper money in 1861. In 1862 the Clark, Gruber & Co. paper money traded at a premium to U.S. coins and currency. Technically, Colorado Territorial law prohibited the private issuance of paper money, but Clark, Gruber & Co. was never prosecuted.

In 1861, E.H. Gruber of Clark, Gruber & Co. accompanied Hiram P. Bennett, who had been elected as Colorado’s Territorial Representative to Congress, to Washington, D.C. They urged Congress to establish a Mint in Colorado. While they were there, Treasury Secretary Salmon P. Chase consulted with U.S. Attorney General Edward Bates, and then reported to President Abraham Lincoln that no law had been violated by Clark, Gruber & Co. in producing coins. The U.S. government purchased the property and operations of Clark, Gruber & Co. in 1863, then operated the facility as an Assay Office until opening it as a branch U.S. Mint!

Many companies today, especially casinos, issue tokens which use the terms dollar or cents on their surfaces. The Walt Disney Company has issued scrip which it will accept as payment for its stated value. The term “Disney Dollars” is printed in the middle, while the monetary denominations appear in the corners. To the best of my knowledge, the Walt Disney Company has never been charged with “counterfeiting.”

What Bernard von Nothaus produced has been of much less economic impact to the entire U.S. economy than was produced by Clark, Gruber & Co. in the early 1860s. If Clark, Gruber & Co.’s operations was approved by the Attorney General and Treasury Secretary as not violating U.S. law, I don’t see that there is any basis for any violated by von Nothaus.

In issuing Liberty Dollars, von Nothaus stated that he was trying to offer a voluntary alternative to U.S. coins and currency that would sustain their value better than money issued by the U.S. government. Subsequent history has proved von Nothaus’s thesis to be correct. In fact, the U.S. dollars of years past are now worth less than they were at the time they were put into circulation while the Liberty Dollars have a much higher value.

As I look at the circumstances, I do not see that von Nothaus or his Liberty Dollar products victimized anyone. In contrast, those who chose to keep Federal Reserve Notes and coinage of the U.S. Mint have been victimized by loss of purchasing power. If anything, and I say this with all due respect, it seems to me that it would be more sensible and appropriate to prosecute those who have victimized American citizens through the depreciation of the “money” issued by the U.S. government.

As you consider the above points, I am ready to answer any questions you may have. You are welcome to write or call me at 800-933-4720. Thank you for your attention.

Sincerely,

Patrick A. Heller

President, Liberty Coin Service

 

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Comments
On March 6, 2012 david eagle said
Sadly, although everything Mr. Heller points out is correct, the current legal climate is still bad for Mr. Nothaus.  The current powers that be do NOT want to admit to having stolen 99% of the goods and services in the country over the past 100 years (depreciating the currency to 1% of its purchasing power).  In fact, they cannot stand anyone pointing it out in public.  That is why Mr. Nothaus will be prosecuted as strongly as they can.  This case is very similar to the prosecution of Galileo.
On March 7, 2012 Lewis Burchett said
A most excellent letter, Mr. Heller.  Rather than considering the fate of Mr. von Nothaus the upholding of current law (which it is not), I feel that it is the setting of precedent for future control of currency and coinage.  A pure confiscation of gold and/or silver by the authorities, such as the 1933 Executive Order 6102 to prevent "hoarding", would put the spotlight on the precious metals.  A more subtle approach would be the outright confiscation using this von Nothaus case as a basis for action.  A subtle fear has been put in the market and caused some consternation as to whether one's business activities are indeed legal, notwithstanding the fact that no changes in business have occurred.  
Thank you for your position on the matter and for making your letter public.
On March 7, 2012 Edward Ulysses Cate said
Very well said, Mr. Heller, and thanks for posting your letter.  My anger at the whole situation interfered with writing such a letter myself. I was afraid I'd do more harm than good. As I see it, a guilty verdict will render it almost impossible for the judge's family, friends and countrymen to own a lifeboat when the USS Titanic sinks. Yet the judge's tenure and salary depends upon the very party that's attacking us. I would not want to be in the judge's position.
On March 8, 2012 Bill Zielinski said
Excellent article Patrick!
You are a man of principles and convictions willing to take a stand against the tyranny of a power mad government.
On March 10, 2012 Bruce Johnson said
Thank you for having the courage to speak up.

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