RUTHFULLY YOURS

1) Mr. Chairman, I have here what my college poker buddies used to call a “Portrait of Grant”—that is, a $50 Federal Reserve Note. It is my understanding that the United States code says that this is redeemable at the Federal Reserve in “lawful money.” Does that mean that it is not in and of itself lawful money?

And might I impose on you here and now to redeem this bill for me in lawful money? The reason I ask is that my Portrait of Grant used to buy enough gas for me to fill the tank on my jalopy, but now I’m paying darned near $5 a gallon. I am hoping that “lawful money” might get me more gas.

2) Mr. Chairman, when you appeared before the House Committee on Financial Services on March 2, Congressman Ron Paul, the new chairman of the subcommittee on monetary policy, which has direct oversight of the Fed, asked you what your definition of the dollar is. It took him a phenomenal gust of 670 words to ask the question, during which he talked about, among other things, the soaring price of gold.

You listened patiently and complimented him for raising some important points. Then you replied, “My definition of the dollar is what it can buy. Consumers don’t want to buy gold. They want to buy food and gasoline and clothes and all the other things that are in the consumer basket.”

Your definition made no reference to either the Constitution or to the laws passed by Congress. So where in the law do you get your definition of a dollar? You may not like the definition the Founders used, which was 371 and ¼ grains of silver, but isn’t it important to have some definition in the law of what a dollar is?

3) Mr. Chairman, last month a federal jury in North Carolina convicted a man named Bernard von NotHaus of counterfeiting U.S. coins. His medallions, which he called “Liberty Dollars,” were made of silver. When he sold them he was getting about $20 for a medallion containing an ounce of silver, and now the coin is worth nearly twice that amount in U.S. dollars.

Yet the dollars you issued back when Mr. von NotHaus was in business have plunged in value to but a fraction of the silver or gold they were worth when you issued them. Mr. von NotHaus may be going to jail for years, and yet here you are. I don’t mean to suggest in any way that you broke any law, but how do you feel about this situation?

4) Mr. Chairman, one of the reasons our country broke from England is that the tyrant over there, George III, had “made judges dependent on his will alone for the tenure of their offices and the amount and payment of their salaries.” That’s the language in the Declaration of Independence. So the Founders wrote it right into the Constitution that a judge’s salary may not be diminished while he continues in office.

Now some of our federal judges have been in office since the dollar had a value of a 35th of an ounce of gold. Since then, the value of the dollars in which they’ve been paid has collapsed by far more than any cost-of-living adjustment they’ve received. To add insult to injury, the automatic cost-of-living adjustment the Congress passed has been suspended. Some of our most distinguished federal judges are so upset they’re appealing to the Supreme Court to get involved.

I’m wondering how you would testify in that case. Do you think that a judge who was paid a decade ago in a dollar that was worth a 265th of an ounce of gold and today is being paid with a dollar that is worth but a 1,500th of an ounce of gold has had his salary diminished? And what would the Founders say about that?

Mr. Lipsky is editor of the New York Sun.