by Melinda Pillsbury-Foster
Locals thought the law suit filed by Jerome Daly against the local bank, to be heard on December 7, 1968, in the township of Credit River, Minnesota would be frivolous. The twelve jurors were practical men, citizens who trusted those in authority.
Jerome Daly, an attorney, faced eviction from his home. Daly, in arrears on his mortgage, had sued the bank as he faced foreclosure because while reviewing the papers and practices he had noticed the mortgage was issued with no legal 'consideration' between himself and his mortgage holder, the First National Bank of Montgomery.
Legally, mutual consideration is essential to any valid contract. This is defined as being, “Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.”
The atmosphere in the courtroom changed abruptly during the testimony of bank President Lawrence V. Morgan. Daly cross examined the banker about the creation of money. Had any bank money been at risk? It had not, the banker admitted.
President Morgan testified this was standard banking practice, exercised by their bank in combination with the Federal Reserve Bank of Minneapolis, another private bank. Morgan admitted he knew of no United States Statute or law giving his bank this authority.
When Justice Mahoney heard this he stated, "It sounds like fraud to me." The stunned faces of the jurors indicated they agreed with him.
The surprises continued. Further testimony revealed the Federal Reserve was a private bank, issuing money not backed by gold or silver, as mandated by the U. S. Constitution.
The Credit River Decision was never successfully appealed by the bank but is not considered to be a cit-able precedent because Mahoney was a Justice of the Peace. Justice Mahoney died August 22, 1969.
Mahoney's verdict also stated, “any provision in the Minnesota Constitution and any Minnesota Statute binding the jurisdiction of this Court is repugnant to the Constitution of the United States and to the Bill of Rights of the Minnesota Constitution and is null and void and that this Court has jurisdiction to render complete Justice in this Cause.”
Daly, a tax protester, kept his home. Later he was stripped of the right to practice law.
The facts presented remain true today, as America's economy, and the money produced by the Federal Reserve, continue to push us closer to the brink of economic disaster.