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What Does Accepted for Value Mean?

Millions of people use the phrase accepted for value everyday without knowing what it means and why it is so powerful. ou have the right to make personal choices ou can !e in that affect your commercial affairs. one means of !eing in control.

control" or you can !e controlled. Acceptance for value is

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Copyrighted 2007 by The American Connection. All rights are reserved, except the contents of this book may be reprod ced, stored in a retrieval system, and transcribed in any form or by any means !itho t express permission, b t may not be sold. The a thor of this book does not give legal advice. "emedies are available if yo kno! !here to look for them. The p rpose of this book is to reveal and compile the so rces of some of these remedies that can be fo nd in millions of pages of case la!, stat tes, codes, la!s, r les, and reg lations. This book is intended to decrease the time it takes to discover the components of yo r remedies and their application. #t is the responsibility of the readers to nderstand their remedies, to seek assistance if necessary, and to apply proper and complete concepts to reach a s ccessf l concl sion to a disp te. This book does not exha st the information that might be needed to s ccessf lly settle a disp te.

#a!le of $ontents

$ % $& $% $' $( 22 2& 2) &* && && #ntrod ction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . +al e , -CC $.20$ . . . . . . . . . . . . . . . . . . . . . . . . . Constit tional /aths . . . . . . . . . . . . . . . . . . . . . . . . . Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . /ffer and Acceptance and Co nteroffer . . . . . . . . . . . . . . . Acceptance for +al e 0 Taken for +al e . . . . . . . . . . . . . .

1egotiability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2itho t "eco rse . . . . . . . . . . . . . . . . . . . . . . . . . . #ss ed or Transferred for +al e , -CC *.*0* . . . . . . . . . . . . #nterest in 3roperty . . . . . . . . . . . . . . . . . . . . . . . . . . 4ettlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A&+ "ecap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

/ther !ritings from The American Connection on related topics that can be fo nd at !!!.l l .com. 5o a search by title or by a thority . 6666666666.

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America National or Federal? 7(7 pages8 9ach state, in ratifying the Constit tion, is considered a sovereign body, independent of all others, and only to be bo nd by its o!n vol ntary act. #n this relation, the ne! Constit tion !ill, if established, be a federal and not a national Constit tion. The :ederalist, 1o. *(, ;ames <adison In Search of Liberty 7$$2 pages8 =iberty, sir, is the primary ob>ect, ?the battles of the "evol tion !ere fo ght, not to make @a great and mighty empireA, b t @for libertyA. 3atrick Benry

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Superior Law !i"her Law #y Law :"99 Co have rights antecedent to all earthly governmentsA rights that cannot be repealed or restrained by h man la!sD rights derived from the Ereat =egislator of the -niverse. ;ohn Adams Introduction to Corporate $olitical Societies :"99 :inally, be strong in the =ord and in the strength of his might. 3 t on the !hole armor of Eod, that yo may be able to stand against the !iles of the devil. :or !e are not contending against flesh and blood, b t against principalities, against the po!ers, against the !orld r lers of this present darkness, against the spirit al hosts of !ickedness in heavenly places. 9phesians %F$0.$2 Introduction to Law #erchant :"99 4tand fast, therefore, in the liberty !ith !hich Christ hath made s free, and be not entangled again !ith the yoke of bondage. Ealatians )F$

Society of Sla%es and Freedmen :"99 #f men, thro gh fear, fra d, or mistake sho ld in terms reno nce or give p any nat ral right, the eternal la! of reason and the grand end of society !o ld absol tely vacate s ch ren nciation. The right to freedom being a gift of A=<#EBTC E/5, it is not in the po!er of man to alienate this gift and vol ntarily become a slave. 4am el Adams $772 So%erei"nty :"99 9ven in almost every nation, !hich has been denominated free, the state has ass med a s percilio s pre.eminence above the people !ho have formed it. Bence, the ha ghty notions of state independence, state sovereignty, and state s premacy. ; stice 2ilson, Chisholm v. Eeorgia, 2 5al. 7-.4.8 &$(, &)' 7$7(28 The Le"al System for So%erei"n &ulers :"99 The =ord shall > dge the people !ith eG ity. 3salms ('F( The Ne"ati%e Side of $ositi%e Law :"99 Therefore, one m st be !ise and attentive, since there are those among s !ho make kings and set p princes o tside Bis la!. Bosea 'F&. Liberty :"99 1o! the =ord is that 4piritF and !here the 4pirit of the =ord is, there is =iberty. ## Corinthians *F$7

'hen There is No #oney :"99 :or th s saith the =ord, Ce have sold yo rselves for nothing, and ye shall be redeemed !itho t money. #saiah )2F* The Natural (rder of Thin"s :"99 /!e no one anything, except to love one anotherD for he !ho loves his neighbor has f lfilled the la!. "omans $*F' &esident)#inister :"99 Co may also b y some of the temporary residents living among yo and members of their clans born in yo r co ntry, and they !ill become yo r property. =evitic s 2)F&)

Agree !ith thine adversary G ickly, !hile tho art in the !ay !ith himD lest at any time the adversary deliver thee to the > dge, and the > dge deliver thee to the officer, and tho be cast into prison. +erily # say nto thee, Tho shalt by no means come o t thence, till tho farthing. <atthe! )F2).2% hast paid the ttermost

What Does Accepted for Value Mean?


Accepted for +al e 7A&+8 is at the fo ndation of remedies available for commercial demands made by the -nited 4tates, so many people have attempted to se it to close acco nts in the -nited 4tates. 9ven so, no one has had a good explanation of !hat A&+ means. Bere is an attempt to clarify.

&ntroduction
The -niform Commercial Code in Article * that deals !ith negotiable instr ments is one so rce of explanation. Article ' deals !ith investment sec rities, and Article ( deals !ith sec red transactions. #n addition to opinions !ritten by > dges to shed light on o r remedies, all three of these articles hold a key to nderstanding commercial setoff. The -CC had an overha l in 2000, b t the ma>or principles remain the same. The changes appear to be to the sections that deal !ith sec red transactions 7Article (8 and some !ith investment sec rities 7Article '8, b t negotiable instr ments are !hat lead to those sec rities. The phrase Haccepted for val eI has little coverage in the code books or in co rt opinions. A better nderstanding of the commercial terms HacceptanceI and Hval eI and ho! they relate to instr ments in general !o ld be a good place to start. Acceptance 1. An agreement, either by express act or by implication from conduct, to the terms of an offer so that a binding contract is formed. * If an acceptance modifies the terms or adds new ones, it generally operates as a counteroffer. JlackAs 7th Accept* To receive with approval or satisfaction; to receive with intent to retain. JlackAs &th Acceptance* The ta ing and receiving of anything in good part, and as it were a tacit agreement to a preceding act, which might have been defeated or avoided if such acceptance had not been made. JlackAs &th A naked acceptance !aives remedies that are available by !aiving defects in the instr ment 7agreement8 that is being offered and accepted. "eceiving an instr ment is an acceptance and a taking. "etention is the basis for a binding contract if there is a preceding act like a pledge to the -nited 4tates. Altering the terms of the instr ment and ret rning it operates as a co nteroffer. !"" 1#$%1. &eneral definitions ''. (+alue). *xcept as otherwise provided with respect to negotiable instruments and ban collections +sections ,#,%,, '#$1% and '#$11- a person gives (value) for rights if he ac.uires them/ +a- In return for a binding commitment to extend credit or for the extension of immediately available credit whether or not drawn upon and whether or not a charge#bac is provided for in the event of difficulties in collection; or +b- As security for or in total or partial satisfaction of a preexisting claim; or +c- 0y accepting delivery pursuant to a preexisting contract for purchase; or

+d- &enerally, in return for any consideration sufficient to support a simple contract. -CC $.20$7&&8 generally says that a person gives val e. Be gives val e to get rights. #f one person is giving val e, another person is asked to give rights in exchange. Joth giving val e and giving rights meet the element of consideration. The G estion has to be . 2hat constit tes val eK #n todayAs commercial system !here o!nership is not the prime foc s, interest 7rights8 in things takes the place of o!nership as the goal. A sec rity interest constit tes a right to seiLe control of a pledged thing if the one giving the sec rity interest fails to perform as agreed. The one giving a sec rity interest retains possession of the thing that sec res the right of another party to seiLe possession of the thing that backs the sec rity interest that !as given. The one receiving a sec rity interest becomes a sec red party, especially if the instr ment establishing the sec rity interest is registered. Be has rights, !hich are remedies and defenses that he can se to enforce an agreement if the other party fails to perform as agreed. !"" 1#$%1. &eneral definitions ,1. 23ights2 includes remedies. A remedy is a commercial right for those !ho acG ire that right thro gh an instr ment. #n corporate -nited 4tates, there m st be a !ritten record of everything. 1othing is s pposed to be ass med or pres med, b t that does not mean ass mptions and pres mptions are not sed everyday to acG ire rights and enforce them. #f the right that is being enforced is a sec rity interest in a tangible or intangible thing, it s ally comes from an instr ment that is act ally s pported by the thing. This is s ally, b t not al!ays, a pledge or a promise to relinG ish possession of a thing if there is a breach of an agreement. Jeca se enforcement of a contract based on an implied promise is !eak, an instr ment demanding performance on it is an offer to initiate a ne! contract based on an old 7antecedent8 and maybe implied or nenforceable contact. #f an instr ment is based on an intentional !ritten promise to perform and an intentional pledge to relinG ish property, it does not have to be iss ed for val e. #t is > st iss ed, and the original contract !ith the offerorAs right to the pledged property is the consideration that s pports the demand. A copy of the !ritten promise and pledge can be attached to the instr ment, or the instr ment can > st refer to the contract by its title, n mber, or date, etc. The iss er of the instr ment demanding performance s pported by a !ritten promise has defenses if the debtor files a complaint against the iss er for making the demand. The iss er can prod ce the antecedent contract that contains the intentional promise to perform and the intentional pledge to se tangible or intangible property to sec re that performance. #f the debtor is a!are that he had previo sly signed a promise and pledged his right to a thing to g arantee his performance, he !o ld not have to see the contract. The demand instr ment is iss ed to get performance already promised, or in the alternative to get the thing already pledged.

#n some cases, there is no pledge to s pport an instr ment, so it m st be iss ed and transferred for val e 7!ith implied consideration8. There is no debtor. The iss er does not have a !ritten instr ment to back his demand instr ment. #f he decides to iss e the demand instr ment in spite of his lack of a thority, he is risking liability on the instr ment. #f the transferee 7the one !ho the iss er directs the demand to8 calls the iss erAs bl ff, the iss er co ld be made to pay the transferee. The iss er 7transferor8 has no defenses. Be has no antecedent contract to attach as consideration for the demand he is sending to the transferee. #f the iss er has no !ritten pledge b t still decides to iss e a demand, the demand instr ment m st be iss ed for val e, beca se there is no evidence of pledge to attach to it. There is no !ritten antecedent contract obligation that reG ires the transferee to perform, b t he still has to do something !ith the demand. The transferee is the one !ho receives the instr ment by mail, by process server, or by !arrant. The transferee is a target. The iss er is shooting the instr ment at the target, hoping the target !ill > st take the shot and agree to become liable on the ne! offer. The iss er is bl ffing. #f the transferee recogniLes the demand instr ment as a bl ff, he can call the iss er on the bl ff and reG ire the iss er to pay. The transferee act ally gains a sec rity interest in the instr ment if he recogniLes it. #f the instr ment is iss ed and transferred for val e 7!ith implied consideration8, the transferee acG ires a sec rity interest or other lien on the instr ment if it !as not obtained by > dicial proceeding. 4ee -CC *.*0* belo!. #f yo properly endorse an instr ment iss ed and transferred for val e, yo acG ire a right to enforce the instr ment against the iss er. Co become the creditor by ret rning it to the iss er, !ho becomes the debtor. Jy accepting the instr ment 7an offer8 for val e, yo are altering the terms of the offer, and it becomes a co nteroffer. Acceptance If an acceptance modifies the terms or adds new ones, it generally operates as a counteroffer. JlackAs 7th The right to be the creditor is !hat yo get !hen yo A&+ an instr ment that is iss ed and transferred for val e, like a tax bill, penal action HindictmentI, or speeding ticket. These iss es are all based on violations of stat tes. 5ishonor has val e in the p blic. +iolation of stat tes has val e in the p blic. The violation of the stat te is the pres med basis 7consideration8 for iss ing the instr ment, b t if yo have not promised to perform nder those stat tes, yo are not obligated, and the iss er has no !ay of s pporting his demand instr ment. #t is iss ed !itho t consideration. #t is iss ed based on a pres mption that every -.4. citiLen has pledged allegiance to the -nited 4tates and to its private la!s , stat tes. #t is a bl ff. The river card has already been t rned. Co have the !inning hand. Co can call the iss erAs bl ff. Co can check. Co can raise. Co can fold. #t is yo r choice. Co have the b tton. The commercial system of the -nited 4tates is based on the =a! <erchant. That la! is not ne tralD it is not set p to be fair. #t is set p to facilitate collection for creditors, especially foreign creditors. #t deals !ith debtors and creditors, even !hen there is no debtorMcreditor relationship. The only thing that has to be determined in

most sit ations is . !ho is the debtor and !ho is the creditor. /nce that is determined, additional facts are s ally irrelevant and immaterial. #n the -nited 4tates, every man is deemed to be a -.4. citiLen, and every -.4. citiLen is deemed to a debtor. A&+ is one !ay of establishing that yo are a creditor and not a debtor. #f yo are going to se the =a! <erchant to settle disp tes !ith the -nited 4tates, a firm nderstanding of the =a! <erchant is necessary. #f yo have commercial rights, the trier of facts in a commercial disp te !ill proceed ca tio sly to avoid denying yo commercial d e process. Commercial d e process is not m ch more than time and opport nity to complete an administrative remedy and prod ce a co nterclaim. #f yo donAt kno! !hat yo r administrative remedies are, yo probably donAt have any commercial rights to exercise. As one !ho represents a person in the -nited 4tates, ie. a -.4. citiLen, yo have d e process rights thro gh the sovereignAs stat tes. As a man in the several states, yo have d e process rights thro gh yo r CreatorAs nat ral order of things. 3roperly applied, commercial remedies incorporate the nat ral order of things. Co can choose to se a sovereignAs stat tes or commercial remedies, b t they sho ld not be sed sim ltaneo sly. They are like oil and !ater. They do not mix. #f yo are going to se commercial remedies, in>ection of stat tory rights !ill kill yo r commercial d e process remedies. The terms of the offer and acceptance make the la! that !ill be enforced. 9ven tho gh yo might choose to se commercial remedies, yo still need to se the person yo represent in the p blic to access the commercial remedies. They have been stat tiLed in 4tate la!. Co can se them, b t yo cannot cite the so rce. The stat tes se the nat ral order of things as the basis for their code sections, and then incorporate the private policy code sections into the same set of p blished stat tes. #f yo se the cite 7-CC 6 . 6 6 6 or 66 -4C N 6 6 6 68, yo have reverted back to being a -.4. citiLen taking a benefit from the stat tes. #f yo demonstrate the principle in the code section !itho t citing it, yo maintain yo r separation. The person yo represent in the p blic acG ires the commercial rights, b t yo inter>ect yo r rights thro gh the nat ral order of things, and maintain yo r nalienable rights. Co get to se the person, instead of it sing yo . A person can acG ire commercial rights thro gh several means. According to the definition of Hval eI above, he can acG ire them , a8 in ret rn for credit, b8 as sec rity, c8 thro gh a delivery p rs ant to a contract, or d8 in ret rn for any consideration. 9ach of s bsections 7a8 thro gh 7d8 deals !ith a different scenario. The last one 7d8 is a general catchall that covers anything that might not have been addressed by the first three. This definition is one of the most conf sing in the commercial code, and is one of the most important to nderstand. A right is defined as a remedy. 5ebtorsA remedies often incl de defenses against foreclos re on the express or implied terms of an express or implied agreement for

!hich sec rity !as given. 5efenses are often given to debtors as consideration by creditors, and defenses are often given to creditors as consideration by debtors. <oney and things are not needed nder this commercial system !here interest in things like real estate, bank acco nts, and bodies serve as consideration. :or example, a creditor may sign an agreement giving possession of a prod ct to a debtor before the debtor has paid for the prod ct. #n that case, the debtor has defenses if his creditor later acc ses him of taking the prod ct !itho t paying for it. #n the same transaction, the debtor may give defenses thro gh the agreement to his creditor, if the debtor later claims the prod ct he received !as not !hat he ordered. The !ritten agreement identifies !hat the debtor act ally ordered. The agreement !ill specify the terms of the agreement and the defenses each party gives to the other. Those defenses are rights that !ill res lt in a remedy if one of the parties is later !rongly acc sed of a breach. The people have commercial remedies if they are acc sed of a breach of some nkno!n contract. The acc ser might claim a sec rity interest in an antecedent claim against property s pposedly pledged as sec rity in exchange for val e that !as s pposedly given by the acc ser. That kind of claim !o ld have to be iss ed for val e, beca se the acc ser !o ld have no !ritten agreement as the basis for his claim. Bis claim !o ld be a ne! offer. Be !o ld be trying to get yo to >oin in a ne! contract by implying that an antecedent contract existed. 4ince it does not exist, the iss er of the ne! offer has to be bl ffing. A&+ is based on contract la!. #f yo think there is a pres mption of a preexisting contract thro gh !hich yo are pres med to be a debtor that has s pposedly pledged property and yo r liberty as sec rity for some pres med val e given by the -nited 4tates, it might be very important for yo to negotiate some better terms in a co nteroffer. #f the iss er of the instr ment for val e does not co nter yo r co nteroffer, yo are in a m ch better position. #f yo have a record of a valid contract that contains terms in yo r favor and can be enforced in commerce, yo have remedies. #f yo donAt, the -nited 4tates may be entitled to enforce a different agreement. 9ven if yo have an agreement advantageo s to yo , yo r actions may imply a !aiver and yo r consent to abide by a less advantageo s agreement. 3reexisting or antecedent claims can be created by agreement bet!een the act al parties, b t !hen the -nited 4tates is a party, all agreements incorporate an attachment to the national debt , an antecedent claim other creditors have against the -nited 4tates. #t is like a program r nning in the backgro nd on yo r comp ter. The pres mption that all -.4. citiLens have pledged allegiance to the -nited 4tates and its stat tes, is eno gh to establish an antecedent claim in favor of the -nited 4tates. -.4. citiLens cannot G estion the national debt. They are called pon to be s reties for that debt, and they s ally lose !hen a co rt proceeding is initiated against them for violation of stat tes. This is done on the principle that the -nited 4tates is more likely to pay its debt if it can collect from its debtors. -nited 4tates co rts take > risdiction of cases !here a debtor to the -nited 4tates is being charged !ith violation of -nited 4tates stat tes. 9ven tho gh a -.4. citiLen does not have a direct obligation to the creditors of the -nited 4tates, thro gh the

principle of novation, -.4. citiLens generally agree to be liable !itho t kno!ing they have done so. A person can transfer his rights and obligations to another party thro gh agreement. A o!es J. A or J can ask C to take on AAs obligation. #f C agrees, and A and J are given notice that C has agreed to o!e J !hat A o!es J, the novation is complete, and A is relieved of the obligation of paying J. The -.4. citiLen is C in this example. A is the -nited 4tates, and J is the creditors of the -nited 4tates. The commercial code is first and foremost concerned abo t repayment of the national debt as a preexisting contract !ith an antecedent claim. The secondary f nction of the commercial code is to provide an orderly method of dealings bet!een other debtors and creditors. -nited 4tates Code 7stat tes8 violations are claims sed by creditors of the -nited 4tates to collect internal reven e from -.4. citiLens to pay the national debt. There can be claims stacked on claims. #t is not ncommon for a totally discharged debt to be rene!ed by a creditor !itho t the kno!ledge of the debtor. -nited 4tates stat tes are designed to transfer private rights from the private to the p blic for p blic se , to pay the national debt. 9very evidence of debt in the -nited 4tates has val e. 3ersons in the -nited 4tates carry on commercial transactions by giving and receiving val e. +al e has nothing to do !ith things, ntil there is a breach of an agreement, !hen an interest in a thing is transferred from the debtor to the creditor. /n the private side, a thing is an ob>ect that casts a shado!. /n the p blic side, only the shado! can be seen. /n the p blic side, the shado! is given val e. #nterest in the thing is the val e. #t is not the thing.

Value ' ($$ )*+,) !"" 1#$%1. &eneral definitions ''. (+alue). *xcept as otherwise provided with respect to negotiable instruments and ban collections +sections ,#,%,, '#$1% and '#$11- a person gives (value) for rights if he ac.uires them/ +a- In return for a binding commitment to extend credit or for the extension of immediately available credit whether or not drawn upon and whether or not a charge#bac is provided for in the event of difficulties in collection; or +b- As security for or in total or partial satisfaction of a preexisting claim; or +c- 0y accepting delivery pursuant to a preexisting contract for purchase; or +d- &enerally, in return for any consideration sufficient to support a simple contract. 4 bsection 7a8 of $.20$7&&8 can be read from the perspective of either a lender or a borro!er as the one extending credit. Joth parties receive rights from the agreement. /nly the people have the energy needed to create money in the -nited 4tates, and in todayAs system, credit and sec rity interests circ late as money. Creation of money remains in the same place it al!ays !as , !ith the people. Jefore $(**, the people d g the gold and silver o t of the earth, took it to an assayer to have it coined by a thoriLed agents of the -nited 4tates, and spent or loaned their coins into circ lation. 4ince $(**, the people sign notes on their o!n credit, have that

credit converted into c rrency by a thoriLed agents of the -nited 4tates, and spend it into circ lation. After signing notes on their o!n credit, the people s ally get into another nintended contract and agree to give a sec rity interest in something as val e on a contract they donAt need and donAt even !ant to enter. Article $ 4ection ' Cla se 2 a thoriLes the Congress to borro! money on the credit of the -nited 4tates. The H-nited 4tatesI in that cla se necessarily m st reference the several states, as the government has no means of sec ring credit on its o!n. The people compose the several states. That cla se a thoriLes the Congress to borro! money on the credit of the people. Joth parties receive val e in a transaction, and both parties receive rights. Joth parties give val e, and both parties give rights. +al e s ally means some kind of consideration. Article * of the commercial code f rther clarifies Hval eI !hen negotiable instr ments are involved, b t the more general definition is in Article $. 20$. The next section contains many examples of exchanges of val e for rightsD and conversely exchanges of rights for val e. H+al eI is a complicated concept, so several examples are given to help to clarify. H+al eI is s btle, so notice the s btleties of the examples. The specific val e for each example is bolded. The follo!ing interpretations for s bsections 7a8 thro gh 7d8 deal !ith persons and credit nder p blic policy thro gh the =a! <erchant. !"" 1#$%1. &eneral definitions ''. (+alue). *xcept as otherwise provided with respect to negotiable instruments and ban collections +sections ,#,%,, '#$1% and '#$11- a person gives (value) for rights if he ac.uires them/ ,a- In return for a bindin" commitment to e.tend credit or for the e.tension of immediately a%ailable credit whether or not drawn upon and whether or not a char"e/back is pro%ided for in the e%ent of difficulties in collection0 A person gives val e to another party in exchange for interest in the other partyAs property. Be acG ires rights 7interest8 in ret rn for giving a binding commitment to extend credit, or giving a binding commitment for the availability of credit to the party giving the person the rights. Those rights might be in the title to real property, or for capacity to s e to get the title to real property thro gh co rt order. Those rights might be in benefits provided by the -nited 4tates. They might be in a distrib tion from the tr st created by the Constit tion. #t does not matter if the party giving the rights dra!s on that commitment to extend credit. #t does not matter if a charge.back is provided if the party receiving the credit and giving the rights has diffic lty in collecting the credit. The !hole money system of the -nited 4tates is based on extensions of credit. Almost every thing transaction in the p blic is based on credit. There is constantly an exchange of val e for rights, and rights for val e happening in the -nited 4tates. This res lts in transfers of digits from one acco nt to another.
Op blic to p blicP

7a8 A person 7Hborro!erI8 gives val e 7right to foreclose8 7asset on the banks books8 for rights 7from creditor) (use of public credit8 if he 7borro!er8 gets those

rights 7use of public credit8 in ret rn for his 7borro!er8 commitment to extend credit 7promissory note8. 7a8 A person 7HlenderI 0 creditor8 gives val e 7use of public credit) 7to debtor8 for rights 7from debtor) 7to foreclose8 if he 7lender 0 creditor8 gets those rights 7 to foreclose8 in ret rn for his 7lender 0 creditor8 commitment to extend 7 public8 credit 7to a borro!er 0 debtor8.

-erson gives Value in .eturn for Jorro!er =ender right to foreclose se of p blic credit se of p blic credit promissory note right to forecloseextension of p blic credit

Oprivate to p blicP

7a8 A person 7Hborro!erI8 gives val e 7private mans credit via signature on a note8 for rights 7from creditor) (use of currency8 if he 7borro!er8 gets those rights 7use of currency8 in ret rn for his 7borro!er8 commitment to extend 7 private8 credit 7to the lender from the man !ho represents the borro!er8. 7a8 A person 7HlenderI 0 debtor8 gives val e 7 liability on its books8 for rights 7use of private credit8 if he 7lender8 gets those rights 7use of private credit8 in ret rn for his 7lender8 commitment to extend 7public8 credit 7to the debtor8.
Oprivate to p blicP

-erson gives Value in .eturn for Jorro!er manAs signat re =ender liability on its books se of c rrencyextension of private credit se of private creditextension of p blic credit

There are t!o different actions happening in these scenarios. /ne is p blic to p blic, and the other is private to p blic. 1othing can happen on the p blic side ntil someone on the private side signs something. The signat re can be advantageo s to the man or not. #t is p to him. The man is an accommodating party !ho receives nothing for lending his name or credit to the p blic event, nless he negotiates terms that are favorable to him. #f the -nited 4tates presents the terms and they are accepted !itho t renegotiation, the man is > st an accommodating party and can expect to receive no rights in ret rn for the val e he gives by lending his name and credit to the -nited 4tates. A bank cannot lend its o!n credit. 2hen a bank HextendsI credit, it has to se someone elseAs credit and HextendI it to a third party. #t is not a loan 7J to C8D it is a lengthening of the process 7A to J to C8. The credit comes from A 7a man . lender8 in

the private, thro gh C 7-.4. citiLen , agent for A8, to J 7bank . lender8 in the p blic, to C 7-.4. citiLen . borro!er8 in the p blic. The borro!er is both a debtor and a creditor on the same transaction. The man cannot go into the p blic, so the -.4. citiLen has to represent the man in the p blic. The -.4. citiLen needs hands to sign instr ments, so the man has to represent the -.4. citiLen and s pply the energy. The man !ill be pres med to be an accommodating party nless he negotiates a contract that has terms more favorable to him. #f the man permits his signat re to be sed !ith no terms for payment to him, he > st !aives his rights. The -.4. citiLen is both the transferor and the transferee on instr ments in the p blic. #nstr ments that are iss ed and transferred for val e are reG ests for a manAs private credit. They are credit applications. Be can endorse them properly and be a creditor, or stand silent and be a debtor. #t is p to him. The p blic to p blic val e on the previo s interpretations is the right to foreclose 7an asset on the bankAs books8 and the se of p blic credit, in ret rn for a promissory note and the extension of p blic credit. The private to p blic val e on the previo s interpretations is the manAs signat re on the note and the liability on the bankAs books, in ret rn for an extension of private credit to facilitate the extension of p blic credit. There can be no p blic credit !itho t getting credit from the private side first. The people in the several states are the only ones !ho have credit, beca se they are the only ones !ith energy that does not belong to someone else. :ictions have no energy of their o!n. 4ince money of e/change is not sed in the modern commercial system, credit is the medi m of exchange thro gh money of account. <oney of acco nt is digits on acco nting ledgers. All loans in the p blic necessarily m st be made on the private credit of the people. The people have to s pply private credit that p blic lenders extend to borro!ers in the p blic. 1o !onder the lenders al!ays say they are HextendingI credit. They are extending the peopleAs credit from the private side into the p blic and ret rning it to a fiction represented by one of the people. +al e is given on both sides. +al e is accepted on both sides. This $.20$ definition is in Article $ of the commercial code, so it does not apply to Article * negotiable instr ments, b t it is necessary to nderstand the d plicity of val e to nderstand A&+. The follo!ing interpretations of $.20$7a8 deal !ith a p blic person created by the -nited 4tates as the debtor and the -nited 4tates as the creditor, as !ell as the -nited 4tates as the debtor and a private man as the ltimate creditor thro gh the p blic person he represents. These are still dealing !ith persons and credit nder p blic policy.
Op blic to p blicP

7a8 A person 7-nited 4tates8 gives val e 7 certificated security = birth certificate = U.S. citizenship8 for rights 7to use U.S. citizen as surety8 if he 7-nited 4tates) gets those rights 7to use U.S. citizen as surety8 in ret rn for his 7-nited 4tates) commitment to extend 7public) credit 7and benefits) (to the -.4. citiLen8. 7a8 A person 7-.4. citiLen8 gives val e 7 pledge to United States8 for rights 7to operate in commerce in United States 8 if he 7-.4. citiLen8 gets those rights 7 to

operate in commerce in United States 8 in ret rn for his 7-.4. citiLen ) commitment to extend 7public) credit 7to be a s rety8 7to -nited 4tates8.
Op blic to p blicP

-erson gives Value in .eturn for -nited 4tates birth certificate -.4. citiLen pledge to the -.4.
Oprivate to p blicP

se of private creditp blic credit and benefits commerce in the -.4.being a s rety for the -.4.

7a8 A person 7-nited 4tates8 gives val e 7 certificated security = birth certificate = U.S. citizenship8 for rights 7get private credit8 if he 7-nited 4tates) gets those rights 7to use private credit8 in ret rn for his 7-nited 4tates) commitment to extend 7public) credit 7distrib tion from tr st to the man thro gh the -.4. citiLen8. 7a8 A person 7-.4. citiLen8 gives val e 7 mans private credit8 7to -nited 4tates8 for rights 7to operate in commerce in United States 8 if he 7-.4. citiLen8 gets those rights 7to operate in commerce in United States 8 in ret rn for his 7U.S. citizen) commitment to extend 7private) credit 7of the man !ho represents the -.4. citiLen8 7to -nited 4tates8.

Oprivate to p blicP

-erson gives Value in .eturn for -nited 4tates birth certificate -.4. citiLenmanAs private credit get private credit commerce in the -.4.extension of private credit

/n the p blic side, the birth certificate represents val e as sec rity for a preexisting claim the -nited 4tates has against a -.4. citiLen. /n the private side it is sec rity for a preexisting claim the man has against the political 4tate for sing his description !itho t paying for it. #t is an antecedent claim the man can present as a co nterclaim !hen the -nited 4tates brings a claim against the person the man represents. The birth certificate sec res the obligation the 4tate, as an agent for the -nited 4tates, has to the man, since no payment has ever been made to the man, and technically cannot be made. The inches and po nds description of the baby on the application for the birth certificate constit ted a symbolic delivery of the baby into the -nited 4tates. 2hat happens in the -nited 4tates ? stays in the -nited 4tates. The baby and the man cannot go into the -nited 4tates, b t the person named on the birth certificate can. The -nited 4tates cannot go into the private states, b t the man representing the person named on the birth certificate can. The baby gre! into a man, and the rights the baby had to payment for se of his description carry on to the man. #f the man does not do something !ith that certificated sec rity 7birth certificate8, it is considered abandoned. Abandonment is !aste, so the -nited 4tates !ill se the birth certificate to prevent !aste, ntil the man decides to se it.

4 bsection 7b8 can also be read from several different perspectives. Joth parties in each scenario give val e and rights, and receive val e and rights thro gh the agreement. The follo!ing interpretations deal !ith individ als and corporations. !"" 1#$%1. &eneral definitions ''. (+alue). *xcept as otherwise provided with respect to negotiable instruments and ban collections +sections ,#,%,, '#$1% and '#$11- a person gives (value) for rights if he ac.uires them/ ,b- As security for or in total or partial satisfaction of a pree.istin" claim0 -s ally a person gives val e !hen he is exchanging them for rights he is acG iring as sec rity for that one transaction. Those rights might be in the title to real property, or capacity to s e, or for performance. According to s bsection 7b8, a person 7-nited 4tates8 can give val e 7benefits8 for rights 7pledge8 he 7-nited 4tates8 is acG iring from a -.4. citiLen, as sec rity for satisfaction of a claim that already exists 7national debt8. The rights the -nited 4tates gets from the -.4. citiLen sec re payment or performance on that preexisting claim the international bankers have against the -nited 4tates and its s reties. The person giving the val e 7-nited 4tates8 has s pposedly already received a promise of some sort from the -.4. citiLen. 1o!, the person 7-nited 4tates8 is giving val e again to get more rights that he !ill acG ire as more sec rity for total or partial satisfaction of that preexisting claim 7national debt8. A tax bill is considered val e, as is a libel of information for a G asi.criminal case against a -.4. citiLen for violation of -nited 4tates stat tes. The -nited 4tates is giving val e by iss ing an instr ment for val e. That instr ment carries a sec rity interest in the instr ment that is iss ed. That can be considered to be val e. #n exchange for giving the -.4. citiLen a sec rity interest in the instr ment, the -nited 4tates is looking for rights in the property o!ned by the -.4. citiLen. #t is also looking for a right to seiLe the body. All of this is done to collect reven e from the -.4. citiLen as a s rety. #f the man !ho represents the -.4. citiLen does not recogniLe the val e that is being given, that !aiver does not negate the rights the -nited 4tates is acG iring in the transaction. #n a normal sit ation, the party giving the rights receives val e thro gh the transaction. A right is a remedy. #f the party !ho gave the rights is later acc sed of not performing, the right he gave as sec rity !hen he received the val e can be sed to seiLe the property to satisfy the terms of the agreement. #n s bsection 7b8 a Hpreexisting claimI makes an appearance. The -nited 4tates already promised to repay the international lenders, b t if it doesnAt pay, the international lenders can se -nited 4tates stat tes to collect from -.4. citiLens. Joth parties give val e and both receive rights in each transaction. The val e given can be absol tely anything that is s fficient to s pport a simple contract in the > risdiction !here the agreement is made. The rights given can be anything to sec re the obligation incorporated in the agreement, incl ding defenses against claims made by the parties against each other.
Op blic to p blicP

7b8 A person 7creditor 0 corporation8 gives val e 7 use of credit mortgageI8 for rights 7to foreclose and defenses8 if he 7creditor8 acG ires the rights 7 to foreclose and defenses8 as sec rity for satisfaction 7payment8 of a preexisting claim 7national debt8. The debtorAs promise to ret rn credit is a second promise. The first promise is a pledge to not G estion the national debt. 7b8 A person 7debtor 0 -.4. citiLen8 gives val e 7 promise8 for rights 7use of credit and defenses8 if he 7-.4. citiLen8 acG ires the rights 7 use of credit and defenses8 as sec rity for satisfaction 7extension of credit8 of a preexisting claim 7beneficial interest in the tr st created by the Constit tion8. The approval of credit application is a second promise. The first promise is the constit tional oath the 3resident took.
Op blic to p blicP

-erson gives Value as 0ecurity for Corporation se of credit national debt -.4. citiLen promise beneficial interest
Oprivate to p blicP

7b8 A person 7creditor 0 -.4. citiLen8 gives val e 7 mans signature on an application8 for rights 7to use public credit8 if he 7-.4. citiLen8 acG ires the rights 7to use public credit8 as sec rity for satisfaction 7distrib tion from the tr st8 of a preexisting claim 7manAs beneficial interest in the tr st8. 7b8 A person 7debtor 0 corporation8 gives val e 7use of public credit8 for rights 7defenses8 if he 7corporation8 acG ires the rights 7 defenses8 as sec rity for satisfaction 7tr st distrib tion8 of a preexisting claim 7manAs beneficial interest in the tr st8.

Oprivate to p blicP

-erson gives Value as 0ecurity for -.4. citiLen manAs signat re corporation se of p blic credit se of p blic creditdistrib tion from the tr st defenses

The follo!ing interpretations deal !ith creditors of the -nited 4tates and the -nited 4tates 7backed by -.4. citiLens as s reties for the -nited 4tates for the national debt8.

7b8 A person 7debtor 0 corporate -nited 4tates8 gives val e 7 new reorganization plan to pay8 for rights 7defenses against foreclosure8 as sec rity 7promise not to foreclose no!8 for satisfaction 7partial performance8 of a preexisting claim 7international bankersA right to foreclose on the -nited 4tates8. 7b8 A person 7creditor 0 international bankers8 gives val e 7 approval of a new reorganization plan for extension of time to pay8 for rights 7to foreclosure later8 as sec rity 7promise not to foreclose no!8 for satisfaction 7ne! payment plan8 of a preexisting claim 7terms of loan agreement 0 national debt8.

-ersongives Valuefor .ights -nited 4tatesreorganiLation plan Creditors of -.4.approval of plan

as 0ecurity for defenses foreclose later

H4atisfactionI in this s bsection can refer to the stat tes the -nited 4tates created for its creditors to se to more expeditio sly collect thro gh forfeit re actions. #t can also refer to -nited 4tates co rts created for its creditors to se to s mmarily condemn property for confiscation to satisfy the terms of the reorganiLation plan the -nited 4tates gave to its creditors promising performance on a preexisting claim 7national debt8. The follo!ing interpretations deal !ith the -nited 4tates as the agent and the people as the principalsD and !ith the -nited 4tates as the tr stee and the people as the beneficiaries. 7b8 A person 7corporate -nited 4tates8 gives val e 7 certificated security = birth certificate8 for rights 7to create money on the signature of the man = borrow from the people8 as sec rity 7promise not to deny or disparage rights of the people8 for satisfaction 7ackno!ledgement of obligation to people8 of a preexisting claim 7beneficial interest in the tr st created by the Constit tion8.

-erson for .ights

as 0ecurity for borro! from people(th Article of Jill of "ights

-nited 4tates birth certificate

7b8 A person 7officer in the federal government8 gives val e 7 rticle !" oath8 for rights 7to hold an office8 as sec rity 7promise to s pport HthisI constit tion8 for satisfaction 7performance8 of a preexisting claim 7peopleAs beneficial interest in the tr st created by the Constit tion8.

-erson gives Value as 0ecurity for

officer to hold officebeneficial interest 7b8 A person 73resident8 gives val e 7 rticle "" oath8 for rights 7to be Commander in Chief8 as sec rity 7promise to preserve, protect and defend the Constit tion8 for satisfaction 7performance8 of a preexisting claim 7peopleAs beneficial interest in the tr st created by the Constit tion8.

-erson gives Value as 0ecurity for 3resident Article ## oath beneficial interest 7b8 A person 7a state, ie. /hio, etc .8 gives val e 7office in the federal government8 for rights 7to be part of the union of American states = federal United States8 as sec rity 7promise to abide by terms of Constit tion8 for satisfaction 7performance on terms of Constit tion8 of a preexisting claim 7promise to pay creditors of the Confederacy8.

-erson gives Value as 0ecurity for A state federal office payment of national debt 7b8 A person 7a state, ie. /hio, etc .8 gives val e 7#onstitution8 for rights 7to be recognized internationally8 as sec rity 7promise to pay creditors of the Confederacy8 for satisfaction 7ackno!ledgment of international la!8 of a preexisting claim 7need for a plan to pay international creditors8.

-erson gives Value as 0ecurity for A state Constit tion payment of debts 7b8 A person 7state citiLen Oby <omP8 gives val e 7 signature on application for birth certificate8 for rights 7to be beneficiary on the trust 8 as sec rity 7promise8 for satisfaction 7distrib tion from the tr st8 of a preexisting claim 7beneficial interest in the tr st created by the Constit tion8.

-erson gives Value as 0ecurity for state citiLen signat re distrib tions from tr st 4 bsection 7c8 deals !ith b yers and sellers. 1otice that both s bsection 7b8 and 7c8 refer to a preexisting arrangement. 7b8 brings in a preexisting claim that necessarily res lts from a preexisting contract. 7c8 addresses delivery on a preexisting contract. /n the p blic side, creditors on the national debt have a seemingly priority position in the commercial code. The only right higher than that of the international creditors is that en>oyed by the people in the several states. The people have the first and foremost position in eG ity in the -nited 4tates. As beneficiaries of the tr st created by the Constit tion, and as beneficiaries of the tr st created by 3resident "oosevelt in $(**, the people 7thro gh the persons they represent in the -nited 4tates8, have priority stock in corporate -nited 4tates.

!"" 1#$%1. &eneral definitions ''. (+alue). *xcept as otherwise provided with respect to negotiable instruments and ban collections +sections ,#,%,, '#$1% and '#$11- a person gives (value) for rights if he ac.uires them/ ,c- 1y acceptin" deli%ery pursuant to a pree.istin" contract for purchase0 xxxxxxxxxxx 7c8 A b yer 7debtor8 gives val e 7promise or actual payment8 for rights 7receipt = defenses8 if he 7debtor8 acG ires the rights 7receipt = defenses8 by accepting delivery 7of prod ct) on a preexisting contract for p rchase. 7c8 A seller 7creditor8 gives val e 7 promise or actual delivery8 for rights 7receipt = defenses8 if he 7creditor8 acG ires the rights 7receipt = defenses8 by accepting delivery 7of promise or act al delivery) on a preexisting contract for p rchase.

-erson b yer receipt

gives Valuefor .ights!y Accepting Delivery of prod ct

-erson gives Valuefor .ights!y Accepting Delivery seller receipt of promise or payment The terms Hb yerI and HsellerI have a broad scope of application in the commercial code. 7c8 A b yer 7-.4. citiLen8 gives val e 7pledge8 for rights 7citizenship8 if he 7-.4. citiLen8 acG ires the rights 7citizenship8 by accepting delivery 7of benefits) on a preexisting contract for p rchase (application for birth certificate).

7c8 A seller 7-nited 4tates8 gives val e 7citizenship8 for rights 7to use U.S. citizen as surety8 if he 7-nited 4tates8 acG ires the rights 7 to use U.S. citizen as surety) by accepting delivery 7of pledge ) on a preexisting contract for p rchase (application for birth certificate).

-erson gives Value !y Accepting Delivery -.4. citiLen pledgecitiLenship of benefits

-erson gives Value !y Accepting Delivery -nited 4tates citiLenship of pledge #n a forfeit re case, the defendant can be deemed to be the b yer, and the prosec tor can be deemed to be the seller. 7c8 A b yer 7defendant8 gives val e 7 plea $ signature8 for rights 7civil liberty8 if he 7defendant8 acG ires the rights 7 civil liberty8 by accepting delivery 7of charges on Hindictment ) on a preexisting contract for p rchase (application for citiLenship and residency). 7c8 A seller 7-nited 4tates8 gives val e 7 civil liberty8 for rights 7to condemn defendant!s property8 if he 7-nited 4tates8 acG ires the rights 7 to condemn defendant!s property) by accepting delivery 7of plea Q signat re ) on a preexisting contract for p rchase 7application for citiLenship and residency).

-erson gives Value !y Accepting Delivery defendant plea Q signat re civil liberty

-erson gives Value !y Accepting Delivery -nited 4tates civil liberty

to condemn propertyof plea Q signat re

#n all penal actions for violations of stat tes, the national debt is the preexisting contract for p rchase that infl ences the conscience of the > dge in making his decisions. #n those cases, the defendant is a -.4. citiLen !ho cannot G estion the national debt. Be is deemed to be the s rety for the b yer 7-nited 4tates8, and the prosec tor represents the seller 7international lenders8. A -.4. citiLen !ho ref ses to be a s rety can be vie!ed as giving aid and comfort to enemies of the -nited 4tates. That is the definition of treason. /nce the -.4. citiLen is fo nd to be in treason, he can be vie!ed as a resident. 3enal actions are against residents. #t is the property of residents that can be seiLed and condemned and forfeited 7confiscated8. The book ,4

I35 Arguments that 6on7t 8or and 8hy explains this process in m ch more detail. #t can be fo nd on !!!.l l .com. 7c8 A b yer 7-.4. citiLen 0 s rety 0 defendant8 gives val e 7 plea $ signature8 for rights 7reimbursement8 if he 7-.4. citiLen8 acG ires the rights 7 reimbursement8 by accepting delivery 7of charges on HindictmentI 0 bill for payment ) on a preexisting contract 7national debt8 for p rchase (loan of credit to the -nited 4tates8. 7c8 A seller 7international lenders8 gives val e 7 extension of credit to United States8 for rights 7to seize property of United States8 if he 7international lenders8 acG ires the rights 7to seize property of United States) by accepting delivery 7of plea Q signat re of s rety) on a preexisting contract 7national debt8 for p rchase 7loan of credit to the -nited 4tates).

-ersongives Valuefor .ights

!y Accepting Delivery reimb rsement of HindictmentI

-.4. citiLenMs retyplea Q signat re

-ersongives Valuefor .ights #nt. lenders extension of credit

!y Accepting Delivery to seiLe propertyof plea Q signat re of s rety

4 bsection 7d8 deals !ith anything that is not addressed in 7a8, 7b8, or 7c8. !"" 1#$%1. &eneral definitions ''. (+alue). *xcept as otherwise provided with respect to negotiable instruments and ban collections +sections ,#,%,, '#$1% and '#$11- a person gives (value) for rights if he ac.uires them/ ,d- 2enerally in return for any consideration sufficient to support a simple contract* 7d8 A debtorMb yer or creditorMseller gives val e (any consideration) for rights 7interest in property and defenses8 if he acG ires rights 7interest in property and defenses8 in ret rn for anything of val e that constit tes consideration s fficient to s pport a simple contract reG iring performance by one or both parties.

-erson gives Value in .eturn for Any person any consideration interest in property any consideration

The definition of Hval eI in $.20$7&&8 does not act ally define Hval eI. #t merely gives examples of !hat circ mstances might incorporate val e. To recap from the above interpretations, val e appears to be or to imply some kind of a promise to provide something or to do somethingF extension of credit, private manAs credit via

signat re on a note, asset on books, liability on books, pledge to -nited 4tates, se of credit, payment, ne! reorganiLation plan to pay, approval of a ne! reorganiLation plan for extension of time to pay, Article +# oath, Article ## oath, office in the federal government, Constit tion, promise or act al payment, promise or act al delivery, pledge, citiLenship, sec rity interest in property, civil liberty, plea and signat re, extension of credit, any consideration s fficient to s pport a simple contract. They are all beneficial to someone or something, and are therefore val able. This list is by no means exha stive.

$onstitutional 1aths
The fo ndational agreement behind every commercial and political event in the -nited 4tates is the Constit tion. #t is primarily an offer made by the states to those !ho !ant to be part of the federal or national governments, and secondarily an offer made by the states to those !ho !ant to do b siness !ith the federal or national governments. This !as a very dangero s doc ment. #t created a potentially h ge commercial machine that had the po!er to do ntold harm to the people. #t had to provide a means to pay creditors so the states co ld be recogniLed internationally for commercial p rposes. At the same time, it had to sec re the peopleAs rights, so the commercial machine !o ld not eat the life o t of the people. The only offers made back to the people to sec re their rights are the t!o oaths reG ired by the Constit tion. These t!o oaths are the condition p t in the agreement ratified by the states, to ass re the people !ho get to benefit from the Constit tion by holding offices, keep their commercial machine a!ay from the people in the several states. /ne is the oath reG ired in Article +# of members of the legislat res, and all exec tive and > dicial officers of the -nited 4tates and of the several states. Article 1 5ection 1 "lause , The 5enators and 3epresentatives before mentioned, and the 9embers of the several 5tate :egislatures, and all executive and ;udicial <fficers, both of the !nited 5tates and of the several 5tates, shall be bound by <ath or Affirmation, to support this "onstitution; but no religious Test shall ever be re.uired as a .ualification to any <ffice or public Trust under the !nited 5tates. The other is the oath reG ired in Article ## of the 3resident. Article $ 5ection 1 "lause = 0efore he enter on the *xecution of his <ffice, he shall ta e the following <ath or Affirmation/ ## 2I do solemnly swear +or affirm- that I will faithfully execute the <ffice of >resident of the !nited 5tates, and will to the best of my Ability, preserve, protect and defend the "onstitution of the !nited 5tates.2 There are no Article +# oaths that can be fo nd for any members of the legislat res 7state or federal8, or exec tive and > dicial officers of the -nited 4tates or of the several states. They all have -nited 4tates Code Title ) oaths. The 3resident cannot take the Title ) oath of office. Be already has another oath to the people. Be and others are deemed to be G alified Hto hold and en>oy any /ffice of honor, Tr st or

3rofit nder the -nited 4tatesI. 1otice that only individ als !ho are Helected or appointed to an office of honor or profit in the civil service or niformed servicesI, are reG ired to have the Title ) oath. They do not hold offices of tr st. The 3resident does. /nly members of the legislat res of the states and the -nited 4tates, and exec tive and > dicial officers, !ho are bo nd by the Article +# oath, can hold offices of tr st. Those !ho take the Title ) oath of office can hold offices of honor or profit nder the -nited 4tates. An oath is different than an oath of office. 3 4SC 5 6667* (ath of office An individual, e.cept the $resident, elected or appointed to an office of honor or profit in the civil service or uniformed services, shall ta e the following oath/ (I, A0, do solemnly swear +or affirm- that I will support and defend the "onstitution of the !nited 5tates against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I ta e this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. 5o help me &od.) ; dges have the Title ) oath of office, as !ell as another one fo nd in Title 2'. Title 89 Sec* :36 says *ach ;ustice or ;udge of the !nited 5tates shall ta e the following oath or affirmation before performing the duties of his office/ (I, ?@A9*A, do solemnly swear +or affirm- that I will administer ;ustice without respect to persons, and do e.ual right to the poor and to the rich, and that I will faithfully and impartially discharge and perform all the duties incumbent upon me as ?<BBI"*3A under the "onstitution and laws of the !nited 5tates. 5o help me &od.) The only constit tional oath able to be fo nd is the oath the 3resident takes, !hich is !ord for !ord the same as the reG ired text in the Constit tion. Be does not take the oath of office in Title ). As long as there is one officer !ith an oath reG ired by the Constit tion 7not an oath of office reG ired by the Congress8, the people still have a tr stee for the tr st on !hich the people are the beneficiaries. That beneficial interest is !hat gives people the right to A&+ instr ments that are iss ed for val e. They have an antecedent claim from a preexisting contract. Their claim is a right to en>oy freedom !ith liberty. #t is based on Constit tional g arantees. 4ince $(**, the people also have a right to a distrib tion from another tr st created by 3resident :ranklin 5. "oosevelt. 4ince $(**, all property is held by the state. That means the state has the legal title to all s bstance in the states, b t the people have eG itable title thro gh their beneficial interest in that tr st. Taking control of the gold in $(** !o ld have been nconstit tional if the ne! tr st had not been created. The 3residentAs oath is an offer to the people in the several states. #t might be pr dent for people to accept his oath. #t is not an oath that is iss ed for val eD it is an oath made in good faith by the man. The principles of offer and acceptance apply to this very critical premise. #f the people have not accepted that oath, ho! can they expect the

man !ho made it to be !orking for their benefitK As far as he is concerned, it may appear that none of the people !ants him to be their tr stee. 4ince $(** the only money in circ lation in the -nited 4tates is credit borro!ed from the people. The commercial code adopted by every political 4tate of the -nited 4tates provides for Hval eI to be !hatever consideration is needed to s pport a mere simple contract. The 3residentAs oath is consideration s fficient to s pport the simple contract the 3resident 7exec tive tr stee8 has !ith the people 7beneficiaries8. Be does not have an oath of office. That is different than an oath. All legislative, exec tive, and > dicial officers performing nder him in his capacity as Commander in Chief, have oaths of office. Be has a constit tional oath. H+al eI is anything recogniLed as a pledge or the res lt of a pledge. The birth certificate is the res lt of the 3residentAs oath. 2itho t that one oath, the birth certificate !o ld > st be evidence of the obligation every -.4. citiLen o!es to the -nited 4tates. 2itho t that one oath, the birth certificate !o ld not be evidence of the obligation the -nited 4tates o!es to the people. /n the p blic side, the birth certificate represents val e, and is evidence of a pledge by a -.4. citiLen to be a s rety for the -nited 4tates. /n the p blic side, it is sec rity for the pledge of allegiance to the -nited 4tates and its stat tes, made by -.4. citiLens. /n the private side, it is a receipt, and is evidence of a promise made by the 3resident to the people. /n the private side, it is sec rity for the promise of distrib tions from the tr st to the people as beneficiaries. #t is a receipt for the se of the babyAs physical description that !as symbolically delivered by an informant 7<om8 to the -nited 4tates. The setoff res lting from accepting an instr ment for val e is a distrib tion from the tr st. 4etoff 0 distrib tion.

Acceptance
2hen yo accept for Hval eI, yo are accepting !hatever consideration the -nited 4tates has offered to yo as evidence of an obligation it has to yo as a beneficiaryD as !ell as !hatever consideration is offered on the instr ment that is being transferred to yo thro gh the -.4. citiLen yo represent. The -nited 4tates is h mbling itself by asking yo to give it assistance. #t is applying for credit on every instr ment that is iss ed or transferred for val e. #f yo > st receive one of these instr ments !itho t accepting it for val e and ret rning it for val e, the pres mption is that yo intend to pay it. Co can pay it !ith a check, or yo can pay it !ith yo r prepaid acco nt. #t is p to yo , b t yo have to pay it immediately, or yo !ill be deemed to be in dishonor. #f yo A&+, yo can se a distrib tion from the tr st to HpayI the instr ment. #f yo > st retain it or arg e abo t the existence or amo nt of the reG est, yo !ill pay it !ith a check, tangible property, or yo r body. 5id the -nited 4tates offer a birth certificate to yo K 5id yo receive itK 5id yo accept it for val e and ret rn it as a sec rityK #f yo do not accept it for val e and deposit it as an asset, yo have vol ntarily !aived rights to a distrib tion that is available to yo . #n a p rely commercial system, rights are remedies. 3arties to a modern commercial transaction need remedies in the event one of them breaches the terms of the agreement. The birth certificate is a remedy, and represents an

antecedent claim yo have against the -nited 4tates. #t is also evidence of a preexisting contract. #t represents the prepaid acco nt yo have available to yo for setoffs. Acceptance is an agreement and leads to a binding contract. #f yo donAt set the terms of that binding contract, the -nited 4tates !ill. Acceptance* Acceptance by silence. Acceptance of an offer not by explicit words but through the lac of an offeree7s response in circumstances in which the relationship between the offeror and the offeree ;ustifies both the offeror7s expectation of a reply and the offeror7s reasonable conclusion that the lac of one signals acceptance. * <rdinarily, silence does not give rise to an acceptance of an offer, but this exception arises when the offeree has a duty to spea . JlackAs 7th #f an offeree has a d ty to speak thro gh an existing relationship, his silence is acceptance. Jeca se of a pres mption of the existence of a relationship, the offeror has a right to expect a reply from the offeree. 2hen yo send comm nications to officers of the -nited 4tates, yo are basing them on yo r pres mption that they have a d ty to respond. They do not respond based pon their pres mption that they are not reG ired to respond, beca se yo are pres med to also be an employee of the -nited 4tates. 2hen they send comm nications to yo , they are basing them on their pres mption they yo have a d ty to respond, beca se yo are the one representing that employee of the -nited 4tates. Co generally do not respond properly based pon yo r pres mption that yo are not reG ired to respond. This is all a matter of perspective. #f yo are acting like a -.4. citiLen !hen yo send yo r comm nications, they do not have to respond, and their silence is not acceptance. #f yo are acting like one of the people !ho are beneficiaries on the tr sts established by the Constit tion and by 3resident "oosevelt, they do have a d ty to respond, and their silence is acceptance of the terms of the offer yo make in yo r comm nication. A man can ref se to approve the application for credit inherent in instr ments iss ed for val e by the -nited 4tates, b t that might imply the man is an enemy of the -nited 4tates. That is not good. #t might be better for the man to approve these credit applications thro gh acceptance for val e and ret rn for val e. Jy signing and processing them properly, the man can avoid a trading !ith the enemy charge, and at the same time f lfill a pres med moral obligation to aid and assist the -nited 4tates in its time of emergency. 4ince $(**, the people have had a means by !hich they can have everything they !ant as beneficiaries of the tr st created by 3resident "oosevelt. A&+ is a means by !hich the people can earn that beneficial position, if they !ant to. They are not reG ired to earn it, b t they can if they !ant to. That is a personal choice.

1ffer and Acceptance and $ounteroffer


To form a binding contract !ith the -nited 4tates thro gh offer and acceptance, someone m st initiate the negotiations. 9ither they !ill initiate, or yo !ill. The one !ho makes the offer is h mbling himself and honoring the other party thro gh the offer of something as consideration for the p rpose of getting consideration from the other party. Consideration can be money, interest in property, or performance

7energy8, or anything that !ill s pport a simple contract. #n modern commercial transactions, gold, silver, and things are not Hval eI, b t promises can be val e. #nterest in things is val e. The consideration on both sides m st be eG al for the transaction to be balanced. +al e on one side 0 val e on the other side. Co r comm nication can establish by yo r actions 7not yo r !ords8 that yo are one of the people. #t sho ld contain the instr ment that !as iss ed and transferred to yo for val e, after yo have accepted it for val e. #t sho ld say !hat consideration yo are offering 7A&+ instr ment8 and !hat yo are reG esting as consideration in ret rn 7setoff 0 distrib tion from the tr st8. 3 blic and private do not mix, so a reG est for a distrib tion from the tr st !o ld be like asking for skd eodhs. The p blic does not kno! anything abo t a distrib tion from the tr st, b t it does kno! abo t setoff, and sec rities, and entitlement holders, etc. Co r comm nication sho ld contain the terms of an agreement that !ill be a !in.!in sit ation. #t sho ld ask them to do something responsive to yo as one of the people, not as a -.4. citiLenD b t it cannot contain too m ch tr th. #t sho ld not contain anything that connects yo to benefits granted by the -nited 4tates. Those benefits might be se of -nited 4tates stat tes, se of -nited 4tates co rts, se of -nited 4tates > dgesA opinions, se of -nited 4tates c rrency, se of -nited 4tates licenses, se of -nited 4tates officers, se of -nited 4tates civil rights, se of -nited 4tates r les and reg lations, se of -nited 4tates forms, se of -nited 4tates bonds, or se of -nited 4tates ins rance, to name a fe!. 4ince $(** American common la! is not available to the people thro gh the co rts, b t commercial remedies are available thro gh the 3ost /ffice. Co r comm nication sho ld not contain anything that dra!s from common la! remedies. The commercial remedies contain the principles of the common la! that is needed to settle the acco nt. The only system of commercial remedy available no! is the la! of nations, !hich is based on agreement sing the =a! <erchant. -nited 4tates co rts enforce agreements sing the =a! <erchant. Co have the po!er to negotiate agreements that are advantages to yo , or yo can let the -nited 4tates set the terms of the agreements. That is a personal choice. Co r comm nication sho ld state the terms of the agreement yo are offering to the other party, !ho m st have a delegation of a thority to represent the -nited 4tates. Co r comm nication sho ld be directed to someone !ho is a thoriLed to bind the -nited 4tates. =o! level employees of a corporation generally are not a thoriLed to bind the corporation they representD > st as lo! level employees of the -nited 4tates are not a thoriLed to bind the -nited 4tates. The 3resident can bind the -nited 4tates, and he has first level agents !ho have delegations of a thority to do that on his behalf. They are the heads of at least three of the exec tive departments , 5epartment of Bomeland 4ec rity 7legislative8, 5epartment of the Treas ry 7exec tive8, and 5epartment of ; stice 7> dicial8. This is a mini.government !ithin a government corporation. #t governs nder military r les sing admiralty co rts that implement the =a! <erchant to satisfy the claims creditors have against debtors. =ook for the 5epartment of Bomeland 4ec rity flag of > risdiction at border

crossings. #t has a dark bl e backgro nd !ith the circ lar seal of that department in the center. 4ince none of the members of the legislat res or exec tive and > dicial officers of the -nited 4tates has the oath reG ired by Article +# of the Constit tion, the only !ay they !o ld have a d ty to yo is thro gh the oath of the 3resident, the exec tive tr stee on the tr st created by the Constit tion and the tr st created by 3resident "oosevelt. Bis position as 3resident 7Article 2 4ection $8 comes in the Constit tion before his position as Commander in Chief 7Article 2 4ection 28. Bis oath is reG ired in 4ection $, not 4ection 2. #f yo act like a s rety for the -nited 4tates instead of a beneficiary of the tr st, his officers have no d ty to speak, and their silence is not acceptance. #f yo act like a s rety for the -nited 4tates, yo have a d ty to speak, and yo r silence is considered to be acceptance. 2hen the -nited 4tates targets yo to give it a loan, yo can $8 not respond immediately and pay later, 28 ref se the instr ment beca se it is defective, or *8 se yo r setoff as a distrib tion from the tr st. Co cannot se the setoff if yo are holding the birth certificate in a filing cabinet. #f all yo have done is take the birth certificate, and have not paid 7performed8 !hen asked to pay, yo have !aived yo r beneficial interest in the tr st and have agreed to be liable as a s rety. That is a personal choice.

Acceptance for Value 2 #aken for Value


#ss ing an instr ment is not the same as iss ing an instr ment for val e. Accepting an instr ment is not the same as accepting an instr ment for val e. Eenerally, the iss er of an instr ment is the one !ho has the d ty to pay. #f an instr ment is iss ed for val e, it appears its iss er is not act ally a person entitled to enforce it, and may not even be a holder in d e co rse of another enforceable instr ment. Be has no standing to demand payment or performance, b t by iss ing an instr ment for val e, he might be able to open a ne! acco nt thro gh the transfereeAs nG alified taking of the instr ment. #f the iss er can get the transferee to take the instr ment !ith no conditions on the taking, the transferee is !aiving the defects in the instr ment he is taking. The main defect is that there is no consideration attached to the offer to contract. There is no val e in it at the point it is iss ed. The iss er is looking for the transferee to provide the val e. The iss er is looking for the transferee to provide the consideration for both sides of the transaction. Jy merely taking 7accepting8 the instr ment, the transferee becomes an accommodation party. Be receives no rights, no defenses, and no val e for his agreement to lend his name and his credit to the transaction. Be does not realiLe that there is a hidden val e in the instr ment that he can se to his advantage if he accepts it for val e and ret rns it. #f the iss er s cceeds in creating a ne! acco nt 7agreement8 !ith the transferee, he might later be able to close that acco nt thro gh a forced payment or collection thro gh a penal action in an administrative proceeding. The iss er has defenses if he iss es the instr ment for val e, that he !o ld not have if he had > st iss ed the instr ment. Be has no a thority to iss e the instr ment, so he has to iss e it for val e. Be is giving a s btle notice by iss ing it for val e that the transferee has no legal d ty to pay or to contract. #f the iss er !ere entitled to enforce the instr ment, his instr ment !o ld refer to a preexisting contract in detail. 4ince the preexisting

contract pres med to s pport this ne! simple contract is the application for the birth certificate, or a pledge of allegiance to the -nited 4tates, or an application for a social sec rity n mber, or an application for any n mber of other benefits granted by the -nited 4tates, the ne! instr ment m st be iss ed for val e. #f he iss es it referring to a nonexistent contract as its basis, he !o ld not have defenses. Be !o ld be acting o tside his delegation of a thority. #t appears Hfor val eI may be translated into Hto get val eI or Hto get considerationI. 9xampleF The child acted o t for attention, ie. to get attention. The man !orked for money, ie. to get money. The iss er iss es the instr ment for val e, ie. to get val e. The JlackAs &th definitions indicate another !ord for acceptance is HtakingI. Acceptance* The ta ing and receiving of anything in good part, and as it were a tacit agreement to a preceding act, which might have been defeated or avoided if such acceptance had not been made. JlackAs &th Acceptance is tricky. 1o one is reG ired to contract if he does not !ant to. 4ince there is a pres mption that every man has previo sly agreed expressly or tacitly to be a s rety for the -nited 4tates, a naked acceptance appears to recogniLe that preceding act, !hether it act ally exists or not. The pres mption can be defeated or avoided by not accepting 7or taking8 the offer. 1ot accepting is also tricky. #f the pres mption of s retyship is allo!ed to stand nreb tted, non.acceptance becomes acceptance. Acceptance p ts the liability on the s rety. A reb ttal m st be thro gh actions, not !ords. Acceptance for val e and ret rn for val e is a reb ttal that overcomes the pres mption. "ef sed for ca se !itho t dishonor does not overcome the pres mption, b t it does address defects in the instr ment. #f an instr ment is ref sed for ca se, it m st address the right points, or the comm nication !ill be seen as a dishonor. #t is an option, b t it reG ires more nderstanding of stat tes and r les of co rt than most people !ant to learn. #n $(%% the /klahoma 4 preme Co rt explained the importance of applying necessary elements to confirm that an instr ment has been Htaken for val eI. The first re.uirement is that the instrument be ta en (for value.) It is clear that the defendant7s chec s were ta en by the plaintiff for value. C 5ection ,#,%, provides that a holder ta es (for value) when it ac.uires a security interest in the instrument otherwise than by legal process. C In this analysis of the evidence we have concluded that under the "ommercial "ode, supra, in < lahoma the plaintiff too the chec s (for value) as a matter of law. C The ;ury should have been instructed as to each of these elements, and should have been advised that plaintiff had satisfied the first element of ta ing (for value.) 5ome of the instructions given by the court indicated that ta ing for value was an issue, and the instructions went further and stated that the ban would be ta er (for value) to the extent it had a security interest in the chec s. C The element of (ta ing for value) was very material to the plaintiff7s case. 3eoples Jank of A rora v. Baar, '$1 >.$d =1D +1411-

This case !as abo t negotiable instr ments, so Article * of the commercial code controls the meaning of Hval eI. The general definition of Hval eI in Article $ does not apply generally to Article * 1egotiable #nstr ments. A negotiable instr ment can be a promise 7a note8 signed by a <aker, or it can be an order 7a draft8 signed by a 5ra!er. The person !ho is entitled to enforce the instr ment is the one !ho decides if it is a promise or an order, nless its terms reG ire it to be one or the other. This is a personal choice. !"" ,#1%'. @egotiable instrument *. An instrument is a 2note2 if it is a promise and is a 2draft2 if it is an order. If an instrument falls within the definition of both 2note2 and 2draft2, a person entitled to enforce the instrument may treat it as either. !"" ,#1%,. 6efinitions A. In this chapter/ ,. 26rawer2 means a person who signs or is identified in a draft as a person ordering payment. E. 29a er2 means a person who signs or is identified in a note as a person underta ing to pay. The /klahoma co rt referred to the /klahoma commercial code as its so rce for determining if the checks had been Htaken for val eI. As !ith the general definition of Hval eI given at $.20$7&&8 of the commercial code, it !ill reG ire close scr tiny to nderstand the vario s applications of *.*0*. A basic principle of the nat ral order of things is that contracts are not valid if consideration is lacking. Jefore $(** gold and silver, things, and promises of performance 7energy8 !ere consideration. Consideration !as and still is anything s fficient to s pport a simple contract. A simple contract does not have to be !ritten, b t can be. #f a contract is !ritten and is not nder seal, it is generally a simple contract. A contract nder seal, it is not a simple contract. A signat re is not reG ired on a simple contract. #f yo take gold, silver, and things a!ay from the list of !hat is consideration, the only thing left to be consideration for a modern.day contract is a promise. !"" ,#,%, <fficial "omment The distinction between value and consideration in Article , is a very fine one. 8hether an instrument is ta en for value is relevant to the issue of whether a holder is a holder in due course. If an instrument is not issued for consideration the issuer has a defense to the obligation to pay the instrument. "onsideration is defined in subsection +b- as (any consideration sufficient to support a simple contract.) The definition of value in 5ection 1#$%1+''-, which doesn7t apply to Article ,, includes (any consideration sufficient to support a simple contract.) Thus, outside Article ,, anything that is consideration is also value. A different rule applies in Article ,. 5ubsection +bof 5ection ,#,%, states that if an instrument is issued for value it is also issued for consideration.

The /fficial Comment says , H#f an instr ment is not iss ed for consideration the iss er has a defense to the obligation to pay the instr ment.I The reverse of that statement is , #f an instr ment #4 iss ed for consideration the iss er has 1/ defense to the obligation to pay the instr ment. Articles $, 2, &, ), %, 7, ', ( val e 0 consideration Article *iss ed for val e 0 iss ed for consideration The iss er on a demand from the -nited 4tates is acting as an agent of the -nited 4tates. The iss er on s ch an instr ment is the -nited 4tates. &f the (nited 0tates issues an instrument for value" the (nited 0tates has no defense to the o!ligation to pay the instrument. That only applies, ho!ever, if the transferee properly endorses the instr ment and ret rns it to the iss er. The banker for the -nited 4tates is the 4ecretary of the Treas ry. Be or his agent sho ld receive the endorsed and ret rned instr ment. At that point, it is treated like a check and can be deposited to settle an acco nt in the accr al bookkeeping system. Acceptance and Acceptance for Value are not the same thing. Accepting an instr ment !itho t a G alified endorsement !aives all defects there may be in the instr ment, incl ding the val e, or lack of val e, that comes !ith it. "emember . the /fficial Comments for *.*0* says , H#f an instr ment is not iss ed for consideration the iss er has a defense to the obligation to pay the instr ment.I The reverse of that statement is , #f an instr ment #4 iss ed for consideration the iss er has 1/ defense to the obligation to pay the instr ment. #f there is no val e to s pport a demand instr ment, it has to be iss ed to get val e. A general acceptance of s ch an instr ment s ccessf lly transfers the liability the instr ment carries to the acceptor. 9ven if there is no val e in the instr ment for the acceptor to rely on, the acceptor is still liable. Be has no defenses. Be m st pay it himself. #s he going to pay it !ith a check, or pay it !ith his prepaid acco ntK #f the acceptor can see that the val e is the commitment of the iss er to pay the instr ment, then there is val e in the instr ment ...... as long as the instr ment is accepted for that val eRR Accepting an instr ment for value and ret rning it is notice to the iss er that the endorser is not providing ne! val e, b t is converting the iss erAs obligation to pay the instr ment into the val e, thereby making the instr ment negotiable. The instr ment becomes the payment. At the point the instr ment is iss ed for val e, it is not a negotiable instr ment. At that point the definition of Hval eI in Article $ applies. After it is received by the target, it becomes negotiable. At that point the definition of val e changes to fit Article *. The instr ment, being negotiable, can be enforced by either party depending on !hat the transferee does !ith it. #f he > st holds it or arg es abo t it, the iss er 7-nited 4tates8 is entitled to enforce the instr ment. #f he A&+, he is entitled to enforce the instr ment. That is a personal choice.

#t is better to be a holder in d e co rse of an instr ment than the liable party on an instr ment. A holder in d e co rse is entitled to enforce the instr ment. /ne can be a holder of an instr ment 7a hot potato8 !itho t being a holder in d e co rse. An instr ment iss ed for val e is a hot potato to a holder. A holder has liability. A holder in d e co rse has rights, b t cannot acG ire that position on an instr ment iss ed and transferred for val e, nless he Htakes the instr ment for val eI as said in *.*027A8728 7a8 belo!, and ret rns it for val e. #t is still a hot potato. To be a holder in d e co rse, the holder m st meet all the elements listed in *.*02.

,#,%$. Folder in due course A. 5ub;ect to subsection " of this section and section ,#1%1, subsection 6, 2holder in due course2 means the holder of an instrument if/ 1. The instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alteration or is not otherwise so irregular or incomplete as to call into .uestion its authenticity; and $. The holder took the instrument/ +a- For %alue; +b- In good faith; +c- 8ithout notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment of another instrument issued as part of the same series; +d- 8ithout notice that the instrument contains an unauthoriGed signature or has been altered; +e- 8ithout notice of any claim to the instrument described in section ,#,%1; and +f- 8ithout notice that any party has a defense or claim in recoupment described in section ,#,%E, subsection A.

3egotia!ility
An instr ment is not necessarily negotiable !hen it is iss ed, and the one !ho is holding it is not necessarily a holder in d e co rse. All of the six reG irements listed in *.*027A8728 m st be met for one to be a holder in d e co rse. The first is that the instr ment be Htaken for val eI. According to the /klahoma case, -CC *.*0* says a holder takes Hfor val eI !hen it acG ires a sec rity interest in the instr ment other!ise than thro gh a > dicial proceeding. <ake a note of this , #t is the holder !ho acG ires a sec rity interest in the instr ment, #: he takes the instr ment for val e. #t is not the iss er !ho has the sec rity interestD it is the holder. The iss er has the liability. The holder can !aive the sec rity interest !ith a blank endorsement, or accept it !ith a G alified endorsement. 2ith a G alified endorsement, the holder is accepting the sec rity interest, not the liability. ; dicial co rt orders can transfer rights in property, creating a sec rity interest in the title to the s b>ect property, b t that is not ho! it !orks !ith an instr ment that is

iss ed for val e. An order for a > dicial co rt.created sec rity interest is not the type of instr ment that a transferee !o ld take for val eD b t, an order for an exec tive co rt.created sec rity interest is a type of instr ment that a transferee !o ld take for val e. -nited 4tates co rts are not > dicial co rtsD they are territorial co rts and !ere created thro gh Article $ 4ection ' Cla se ( by the po!er granted to the Congress to Hconstit te Trib nals inferior to the s preme Co rtI. Their orders do not res lt in sec rity interests thro gh > dicial proceedings. A check is negotiable !hen it is transferred to a payee. #t is a note beca se it is the <akerAs promise to pay the 3ayee. #t is also an order to a third party, so it is a draft signed by a 5ra!er. A named third party, the 3ayer, on a negotiable instr ment has a d ty to pay it if he is a party to a preexisting arrangement !ith the 5ra!er to do so. /n a normal check, a bank is the 3ayer. The 5ra!er is the party ordering the payment on a draft. The 3ayee negotiates the check by endorsing it and presenting it to a bank for deposit. #f the 3ayee and the 5ra!er bank at the same bank, the bank !here the check is deposited can also be the 3ayer. The 3ayee is s ally a holder in d e co rse. #f the check is lost, a person !ho finds it is not a holder in d e co rse and is not entitled to enforce the instr ment. The one !ho endorses it takes on the liability if the bank !here it is deposited cannot collect on it. Be has reco rse against the 5ra!er. A check is not an instr ment that the 3ayee !o ld take for val e, b t the bank !here it is deposited might take it for val e, in the event it believes there may be diffic lty in collecting on it. #f yo endorse a check H!itho t reco rseI, yo are giving notice that yo do not agree to take on the liability, b t yo may not be able to convince a bank to accept it !ith that G alified endorsement. #f yo endorse a check !ith > st yo r signat re and present it to a bank for deposit, yo are giving yo r rights as holder in d e co rse over to the bank. Co are also agreeing to take on the liability for the tax on that instr ment. An #/- is not negotiable, beca se there is no third party. An #/- is a promise to pay, and is signed by a <aker. The holder of an #/- can only present it for collection to the <aker. /ther instr ments that are notes 7promises8 are not necessarily negotiable either. -nited 4tates 1otes 7promises8 !ere originally negotiable beca se the holder co ld take them to any federal reserve bank 7third party8 and redeem them for gold or silver. :ederal "eserve 1otes are obligations of the -nited 4tates that are not negotiable. They are promises to pay. They are obligations that are not redeemable. 4ee $2 -4C &$$ as amended. :ederal "eserve 1otes are considered to be a benefit -.4. citiLens get to se !ithin the -nited 4tates. A promise can be val e. 4 ffering can be val e. A benefit can be consideration s fficient to s pport a simple contract. -sing :ederal "eserve 1otes is considered taking advantage of a benefit 7consideration8 in exchange for rights the -nited 4tates has to enforce the terms of a preexisting citiLenship contract 7a pledge8. That is the implied basis for its agents to iss e bills 7instr ments8 to -.4. citiLens, b t they have to be iss ed for val e. The terms of that pledge are the hidden basis for iss ing instr ments for val e. There is a defa lt pres mption that every -.4. citiLen has made a pledge to the -nited 4tates and its stat tes. /ther than the iss erAs obligation to pay an instr ment that is iss ed for val e, there is no val e in the

instr ment, !hen it is iss ed. #t is not negotiable !hen it is iss ed. #t is seeking a negotiable instr ment. An iss er has a defense for iss ing instr ments !itho t consideration, if they are iss ed for val e, and a promise previo sly made by the transferee 7-.4. citiLen8 is d e and has not been performed. The payment on the national debt is al!ays d e and has not been performed. #f an employee of the -nited 4tates transfers a bill 7instr ment8 for val e to a -.4. citiLen, the man !ho represents him might recogniLe that the bill has been iss ed for val e so he can accept it for val e and ret rn it for val e to close the acco nt on behalf of the -.4. citiLen. The -.4. citiLen has a legal d ty to pay the bill, and the man has a moral d ty to close the acco nt. Be can close the acco nt if he first accepts for val e the bill that !as iss ed for val e. 2hen he does that, he has provided s fficient consideration that is needed to balance the implied consideration that !as provided by the iss er. #t is like for like. Be is act ally providing the consideration for both sides of the transaction, ie. the accr al bookkeeping system. The instr ment that is iss ed for val e is the debit side of an accr al acco nt looking for the credit side. 9verything is back!ards. -s ally yo make a deposit 7credit8 to yo r checking acco nt before yo !rite a check 7debit8 against the acco nt. Co start !ith the credit and then yo can a thoriLe a debit by !riting a check. #n the commercial system sed in the -nited 4tates, the debit appears to come first and yo have to s pply the credit to make the debit possible. The instr ment is the credit, and yo r endorsement makes it the debit. #f yo accept that credit for val e and ret rn it !ith a proper endorsement, the instr ment balances the acco nt. #f yo give it a blank endorsement by > st holding it, yo have to send the iss er another instr ment as the credit. To be safe, one !ho receives an instr ment that has been iss ed for val e has to get rid of it as soon as possi!le . 2hoever is holding it, is liable for it. #t is a hot potato. #f the holder fails to recogniLe that it !as iss ed for val e and gives it a blank endorsement, he has become the responsible party replacing the iss er. Be becomes the iss er and transferor !ith the obligation, and the original iss er becomes the transferee. Be has to s pply the consideration to f nd the instr ment and close the acco nt. Be can do this by !riting a check on an open bank acco nt !ith s fficient f nds and sending his check !ith the bill to the iss er. Be can minimiLe or eliminate that liability by giving the instr ment a G alified endorsement 7A&+8 and giving notice that the one taking the instr ment from him has no reco rse against him if the instr ment ends p being ncollectible. #t is ncollectible ntil he gives it some val e. #t !as iss ed for val e, ie. to get val e, and it does get val e !hen it is properly endorsed. The G estion is , !ho is entitled to enforce the instr mentK , the original transferor or the original transfereeK This is a personal choice.

Without .ecourse
<ortgage companies endorse promissory notes iss ed by borro!ers !ith the !ords , 8ithout recourse pay to the order of A0" 9ortgage "ompany , above the endorsement signat re. That is a G alified endorsement. #f AJC can get a third party to accept that paper nder the conditions of the endorsement, the third party cannot go

to AJC to enforce the instr ment. <ortgage companies are almost al!ays affiliated !ith a bank that !ill accept this kind of paper. H2itho t reco rseI gives notice of non.acceptance of liability on the instr ment. #f the third party ever !ants to seiLe the sec rity s pporting the instr ment, it m st skip AJC and go to the borro!er !ho iss ed the instr ment to AJC, !ho took the instr ment in good faith and transferred it to the third party, !ho also took it in good faith. The sec rity that backs the instr ment stays attached to the instr ment. A&+ is a G alified endorsement. Adding the !ords , without recourse H takes yo o t of the pict re as a responsible party. Co are not an accommodating party if yo se without recourse in yo r endorsement. 2hen an instr ment is iss ed for val e and accepted for val e !itho t reco rse and ret rned for settlement and clos re of the acco nt, the third party 7the 4ecretary of the Treas ry 0 banker8 has no reco rse against the endorser. /ne might think that is good, b t there is one more thing to consider. The people in the several states formed a society b ilt on service. #f yo do not !ant to be part of that service plan, yo can take yo rself o t of the transaction thro gh the !itho t reco rse endorsement. #f yo !ant to be of service to the -nited 4tates, and be seen as an ally, it might be good to agree to be responsible to aid and assist the -nited 4tates in acG iring f nds to pay its debt. #t is p to yo , b t be f lly informed and kno! exactly !ho yo !ant to be before yo endorse an instr ment that is iss ed or transferred for val e. This is a personal choice. !"" ,#'1E. <bligation of indorser A. 5ub;ect to subsections 0, ", 6 and * of this section and to section ,#'14, subsection 6, if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument according to the terms of the instrument at the time it was indorsed, or if the indorser indorsed an incomplete instrument, according to its terms when completed, to the extent stated in sections ,#11E and ,#'%D. The obligation of the indorser is owed to a person entitled to enforce the instrument or to a subse.uent indorser who paid the instrument under this section. 0. If an indorsement states that it is made 2without recourse2 or otherwise disclaims liability of the indorser, the indorser is not liable under subsection A of this section to pay the instrument. !"",#'14. Instrument 5igned for Accommodation. +d- If the signature of a party to an instrument is accompanied by words indicating unambiguously that the party is guaranteeing collection rather than payment of the obligation of another party to the instrument, the signer is obliged to pay the amount due on the instrument to a person entitled to enforce the instrument only if +i- execution of ;udgment against the other party has been returned unsatisfied, +ii- the other party is insolvent or in an insolvency proceeding, +iii- the other party cannot be served with process, or +iv- it is otherwise apparent that payment cannot be obtained from the other party.

An accommodation party 7-.4. citiLen !ho accepts an instr ment that is iss ed and transferred for val e8 is pres med to g arantee collection, as !ell as payment of the obligation of another party to the instr ment. The accommodation party is only obligated to pay the instr ment if one of the fo r criteria is met. /ne of them is that the other party 7the one obligated on the instr ment 0 -nited 4tates8 is insolvent or in an insolvency proceeding. The iss er s ally has the obligation to pay the instr ment. 4ince he !o ld be paying himself if the instr ment is iss ed and transferred for val e, and then accepted for val e and ret rned for val e, the circ itry of the transaction res lts in a debit and a credit. That makes for a balanced acco nt. 2itho t the transfereeAs blank endorsement, the pro>ect does not !ork. =iability is not transferred. The iss er of an instr ment that is iss ed for val e has defensesD b t if it is A&+ and ret rned for val e, the iss er has no defenses. The iss er does not need defenses, if he closes the acco nt, b t if he does not !ant to give p, he co ld iss e a second instr ment for val e to see if the endorser on the first one might change his mind and agree to take liability on the second one. An instr ment iss ed for val e co ld be a tax bill, or a complaint, or a penal action HindictmentI on !hich the -nited 4tates is the iss er and the liable party.

&ssued or #ransferred for Value ' ($$ 4*4,4


-nder the definition of Hval eI in $.20$7&&8, a person gives val e for rights if he acG ires rights thro gh several means listed in the s bsections. A person gives val e in ret rn for any consideration s fficient to s pport a simple contract. -nder Article * dealing !ith negotiable instr ments, an iss er does not have to give val e if he iss es an instr ment for val e. !"" ,#,%, <fficial "omment Thus, outside Article ,, anything that is consideration is also value. A different rule applies in Article ,. 5ubsection +b- of 5ection ,#,%, states that if an instrument is issued for value it is also issued for consideration. !"" ,#,%,. Ialue and consideration A. An instrument is issued or transferred for value if/ 1. The instrument is issued or transferred for a promise of performance, to the extent the promise has been performed; $. The transferee ac.uires a security interest or other lien in the instrument other than a lien obtained by ;udicial proceeding; ,. The instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due; '. The instrument is issued or transferred in exchange for a negotiable instrument; or E. The instrument is issued or transferred in exchange for the incurring of an irrevocable obligation to a third party by the person ta ing the instrument. 0. ("onsideration) means any consideration sufficient to support a simple contract. The drawer or ma er of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of

performance, the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subsection A, the instrument is also issued for consideration. This section explains ho! an instr ment is iss ed for val e and transferred for val e. There is no comma before the HorI, so HorI can mean HandI or HorI. The iss er is the party !ho is liable on an instr ment ntil he can transfer his liability to another party. !"" ,#1%E. Issue of instrument A. 2Issue2 means the first delivery of an instrument by the ma er Oon a note , promiseP or drawer Oon a draft.orderP, whether to a holder or nonholder, for the purpose of giving rights on the instrument to any person. The iss er of an instr ment intends to give rights on the instr ment to another person. That other person might be yo if yo endorse it properly. -CC *.*0* explains ho! the person yo represent in commerce in the -nited 4tates can start o t being a target and end p being the one entitled to enforce the instr ment. !"" ,#1%,. 6efinitions A. In this chapter/ ,. 26rawer2 means a person who signs or is identified in a draft as a person ordering payment. E. 29a er2 means a person who signs or is identified in a note as a person underta ing to pay. An instr ment can be iss ed and transferred for val e to a holder by a dra!er 7if it is an order8, or by a maker 7if it is a promise8. The transferee has to decide if the instr ment is an order or a promise. #f he nderstands his options, it !o ld be better for him to make the instr ment a promise. Then the iss er has an obligation to pay. The c rrency of the -nited 4tates is based on promises, !hich are agreements. -nited 4tates co rts enforce agreements. Joth parties can proceed on the basis of a simple contract. A simple contract does not have to be !ritten, and does not reG ire a signat re. The transfereeAs signat re !ill be pres med if it is not act ally given. #f yo !ant to contract !ith someone, yo can send him an offer to contract to see if he !ants to contract !ith yo and if he accepts yo r terms. #f he does not !ant to contract, he can ret rn yo r offer and decline to contract. That is called non. ass mpsit, or H# do not ndertakeI. Ass mpsit is an implied agreement to contractD th s, a simple contract. #f he does !ant to contract !ith yo b t not on the terms yo proposed, he can ret rn the contract !ith different terms for yo r signat re. Co can terminate the negotiation by non.ass mpsit at that point or propose different terms and ret rn the contract for his signat re. #f one party decides to terminate the negotiations, he > st ret rns the contract !ith no signat re. That is the scenario if the parties do not already have an obligation to contract. #f the transferee has an obligation based on a preexisting contract 7signed or not8, he has a d ty to respond

and may have a d ty to respond in a certain !ay. The lo!est position is the one !ho has a d ty to pay beca se of a preexisting agreement. Thro gh citiLenship, yo are pres med to be in that position as a s rety for the -nited 4tates on the national debt, thro gh a pres med promise of performance on a simple contract. A tax bill can be an instr ment iss ed for val e and delivered !ith the intent of transferring the liability of the national debt to the transferee. A civil complaint and a penal action HindictmentI are also instr ments that can be handled the same !ay. They are all looking for someone to accept liability. The follo!ing explains the first s bsection of -CC *.*0*. !"" ,#,%,. Ialue and consideration A. An instrument is issued or transferred for value if/ 7* The instrument is issued or transferred for a promise of performance to the e.tent the promise has been performed0 0. C If an instrument is issued for a promise of performance Oto a -.4. citiLenP, the issuer O-nited 4tatesP has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subsection A, the instrument is also issued for consideration. 4 bsection J says the iss er has a defense if he iss es an instr ment for val e and the promise is d e and has not been performed, b t if he iss es it for val e and the promise has not been performed beca se it is not d e, he has no defense. #f he iss es an instr ment and there is no promise, he has no defense. #f a stranger is sent an instr ment that is iss ed for val e, and he does not pay it, he is not in defa lt beca se he has no d ty to pay it. #f a s rety is sent an instr ment that is iss ed for val e, and he does not pay it, he is in defa lt and is in breach of his agreement to be s rety. #f performance is d e and has not been performed, the agent iss ing and transferring the instr ment for val e has a right to p rs e collection. #f yo are pres med to be a s rety for the -nited 4tates thro gh -.4. citiLenship, and if an agent for the -nited 4tates sends yo a bill, !hat are yo r optionsK #f yo act like a s rety, yo have to pay. #f yo do not think yo are a s rety, yo can ref se it for ca se, b t if yo have done things in the past that make it look like yo are a s rety, ref sal for ca se is not the best option. #f yo are a stranger and yo pretend to be a s rety and HpayI the instr ment sing a sec rity yo have registered !ith a fid ciary in the -nited 4tates, yo are not in defa lt. *.*0* says HAn instr ment is iss ed or transferred for val e if the instr ment is iss ed or transferred for a promise of performance, to the extent the promise has been performed.I #t so nds like the instr ment is a receipt for performance of a promise that has already been done. 2hy !o ld one arg e abo t receiving a receiptK This is a bif rcated statement. The first part says the instr ment is iss ed for val e, ie. to get val e. The val e being so ght is a ne! promise of performance. The second part of the statement admits a promise has already been performed. -nder the fiction that yo have previo sly set p the person yo represent as a s rety, the -nited 4tates is p tting the best constr ction on the instr ment. The iss er is ass ming the promise of

s retyship that has already been made !ill be performed on this ne! reG est. 1o! it is time to p t p or sh t p. The principle of s retyship is not diffic lt to nderstand. Jeing a s rety is not a one !ay street like being an accommodating party. An accommodating party lends his name and his credit to another person, b t gets nothing in ret rn. /ne !ho agrees to be a s rety for another party !o ld receive an asset from the one asking the s rety for this service. :or example, an officer may need t!o s reties before he can commence his official d ties. Be !o ld find t!o people !ho agreed to be his s reties. They !o ld sign a doc ment 7perhaps a bond8 as s reties for the officer. The officer !o ld give the s reties an asset, like a deed of tr st, as a sec rity for them in the event they !o ld be reG ired at some time to pay a debt for the officer. #f the officer !ere a tax collector, and he died, all of his acco nts !o ld have to be settled. #f there !ere no money in his acco nts to payover the taxes he had collected, his personal property !o ld be sed to settle that debt. The -nited 4tates and its creditors do not !ant to spend the time or money to liG idate the dead officerAs personal property, so they > st go to the s reties to collect. The s reties are reG ired to pay immediately. Then the s reties, as holders in d e co rse of the deed of tr st, have the right to enforce the deed. They can sell the real property connected to that deed of tr st, so they can be reimb rsed. The dead officerAs heirs cannot claim a right to that property, beca se the deed of tr st the s reties hold is an enforceable instr ment. 4 reties for the -nited 4tates have the same options. 4ince the s reties are fictions, the people !ho represent those s reties can opt to se their pre.paid acco nt to HpayI !hen they receive instr ments that are iss ed and transferred to them for val e. They do not have to pay !ith their p blic deeds, acco nts, and cash of the persons they represent. #f they do pay !ith p blic c rrency, they have the right to be reimb rsed. #f they opt to se their pre.paid acco nt, they se the 4ecretary of the Treas ry to setoff the debt. 9ither !ay, the s rety stays in honor and performs according to his promise. Co have to make a choice. 1o action is a choice to be a s rety, and to pay !ith p blic deeds, acco nts, or cash. 5o yo !ant to try to prove yo are not a -.4. citiLen and a s rety for the debt the -nited 4tates o!es its creditorsK H# am not that person,I is a defense many people have tried to se in the past !ith little s ccess. 5o yo !ant to try to prove 7as a pres med -.4. citiLen and s rety for the national debt8 that yo donAt have to pay the instr mentK 2o ld it be easier to help them close that acco ntK 4 retyship is a fiction. #t is based on an implied promise. #f yo !ere born on the land in <ontana, yo are one of the beneficiaries on the tr sts created by the Constit tion and 3resident "oosevelt. 5o yo !ant to try to prove that in one of their penal action co rtsK That might be too m ch tr th for a fiction co rt to deal !ith. That is also a defense that has been tried !ith little s ccess. The obligation the -nited 4tates o!es to yo is based on a promise that is better than an implied promise. Co have a certified copy of the sec rity that ackno!ledges the obligation the -nited 4tates o!es to yo . #t evidences a promise even tho gh the

terms are implied and not act ally expressed on the face of the birth certificate. 2o ld it be easier to se one implied promise to set off another implied promiseK #f yo accept their offer for val e and ret rn it for val e, at least yo have not given them an implied general acceptance of liability. #f yo are going to accept their offer, !o ld it be better to do it on yo r termsK :ighting !ith them has not res lted in m ch s ccess in the past. #s it possible it !ill be easier to close the acco nt by going along !ith their implied contract 7promise8, bringing in another implied contract 7promise8, and letting them se yo to close their booksK This is a personal choice. The second s bsection of *.*0* deals !ith a sec rity interest that is inherent in every instr ment that is iss ed and transferred for val e. !"" ,#,%,. Ialue and consideration A. An instrument is issued or transferred for value if/ 8* The transferee ac;uires a security interest or other lien in the instrument other than a lien obtained by <udicial proceedin"0 The transferee is the person to !hom the instr ment is delivered. #t is the transferee !ho has the option of acG iring a sec rity interest in the instr ment that !as delivered to him. A h ndred years ago if a man borro!ed 200 dollars from a bank, he !o ld receive 200 dollars of silver or its eG ivalent in bank notes. That !o ld be the bankAs consideration. The man !o ld sign a note and give it to the bank. That !o ld be the manAs consideration. The bank acG ired a sec rity interest in a thing , maybe the manAs farm, not thro gh > dicial proceeding, b t thro gh the intentional action of the man. #f the man did not repay the 200 dollars, his note !o ld be evidence of the promise that he had breached. The bank co ld send the man a demand for payment. That demand for payment !o ld 1/T be an instr ment iss ed for val e, beca se the bank act ally had the manAs !ritten and intentional promise. The man did 1/T acG ire a sec rity interest in the demand instr ment from the bank. The man co ld 1/T accept that demand for val e and ret rn it for val e to settle the acco nt. #n todayAs commercial system, !hen <r. Tax <an 7an agent for the -nited 4tates8 sends a -.4. citiLen a demand for payment, he does not have a manAs intentional !ritten promise to pay. Be has to iss e the instr ment for val eD and the transferee a tomatically acG ires a sec rity interest in the instr ment. This sec rity instr ment is not obtained by > dicial proceeding. Ass ming the transferee accepts the instr ment and does not pay it, the -nited 4tates becomes the transferee and acG ires a sec rity interest in the instr ment. The positions s!itch. #t is ass med the transferee has given it a blank endorsement via his nG alified acceptance 7his silence8 and then iss ed the instr ment back to the -nited 4tates. The ne! iss er is obligated to pay the instr ment. #f he had recogniLed the instr ment as one that !as iss ed for val e, he !o ld have kno!n he had to A&+ and ret rn it for val e to give notice he intended to enforce his sec rity interest in that instr ment. 9ven !hen the -nited 4tates gets a > dgment in its favor from a -nited 4tates co rt, it does not acG ire a sec rity interest thro gh > dicial proceeding. -nited

4tates co rts are exec tive co rts and have no a thority to iss e > dicial orders. #f an appeal on an administrative order based on an instr ment that had been iss ed for val e and A&+ !ere properly bro ght in an act al > dicial co rt, the > dicial co rt !o ld have to r le in favor of the petitioner, b t that !ill not happen. There are administrative proced res to settle these cases before they get to a > dicial co rt. 4ome C#5 offices are appeals offices, and the officers !ho !ork there have the a thority to investigate the facts of a commercial settlement, and act ally do the accr al bookkeeping and close the acco nts. #f the appeals office does not close the acco nt, or if it closes the acco nt b t does not give notice to the parties and the p blic, there is a higher office that can handle an appeal from an appeals office action or inaction. 9very agency of the -nited 4tates has an #nspector Eeneral !ho has a d ty to detect and prevent fra d, !aste, and ab se. #f the facts of yo r settlement get to his office, his position as a direct appointee of the 3resident reG ires him to ass re there is no fra d, no !aste, and no ab se. The book ,4 I35 Arguments that 6on7t 8or and 8hy explains #nspector Eeneral f nctions in more detail. #t can be fo nd on !!!.l l .com. A corporation iss ing a stock certificate, bond, or other sec rity is obligated to pay the instr ment. The corporation 7iss er8 is liable to pay according to the terms of the certificate, bond, or other sec rity, !hich are instr ments that might be negotiable, or they might be non.negotiable, at the time they are iss ed. #f an instr ment is intended to be negotiable, a third party m st enter the process. A promissory note for a mortgage is iss ed by a borro!er, !ho is the maker. #t appears to be a t!o.party instr ment, like an #/-. The maker s ally does not expect his note to be negotiated, b t it is. Be is making a promise and giving the legal description of the land he is b ying as sec rity for his promise. Be necessarily m st already have an interest in the legal description thro gh the p rchase agreement, for him to be able to pledge that legal description on a deed of tr st, as sec rity for his promissory note. The deed of tr st is an nnecessary component of the loan process, beca se the promissory note is s fficient to f nd the loan. The promissory note is given by the borro!er to the HlenderI, !hich becomes the transferee and acG ires a sec rity interest in the note and in the legal description pledged as sec rity. The lender is not obtaining a sec rity interest thro gh > dicial process. #t acG ires the sec rity interest in the instr ment thro gh vol ntary transfer by the borro!er. The sec rity interest is the val e. The promise is val e. The s bseG ent payments are val e. The s bseG ent seiL re of the property in foreclos re is val e. The borro!er is s pplying all the val e. The maker on the promissory note is expecting to receive val e from the lender, and the lender is expecting to receive rights in the property being pledged as sec rity for the loan. The lender negotiates the note and transfers its rights and obligations in the note to a bank 7a third party8 that takes the note for val e along !ith rights in the sec rity. The definition of val e in Article $ of the -CC sed that process as one of the examples of Hval eI. !"" 1#$%1+''- C a person gives (value) for rights if he ac.uires them/ 7b8 As security for or in total or partial satisfaction of a preexisting claim;

Joth parties to an instr ment give val e and get rights. A lender gives val e to the borro!er in the form of banking services, in exchange for rights the lender receives in the promissory note. The borro!er gives val e to the lender in the form of a manAs signat re, in exchange for rights to se c rrency in the p blic. The birth certificate is an instr ment that gives val e in exchange for rights. #t is also an instr ment that is iss ed based on val e received, and represents rights that are given back in exchange. "ights in the birth certificate as a sec rity are only available to the man on the p blic side, b t he needs a fid ciary on the p blic side to hold the sec rity for him. The man cannot se the birth certificate on the p blic side. Be is s bstance, and the p blic side is fiction. Be cannot go there. The birth certificate is an instr ment that is seen from t!o different perspectives. :rom the p blic side, the birth certificate is a sec rity interest in the labor of the -.4. citiLen the certificate represents, based on the -.4. citiLenAs pledge to the -nited 4tates. :rom the private side, the birth certificate is a sec rity interest in distrib tions from the tr sts established by the Constit tion and by 3resident "oosevelt in $(**. /n the p blic side, the -nited 4tates has an antecedent claim against the -.4. citiLenAs labor thro gh the preexisting contract 7pledge8. /n the private side, the man has an antecedent claim against the -nited 4tates thro gh the preexisting contract 7Constit tion and the Article +# and Article ## oaths8. <ortgage notes disclose the existence of an antecedent claim !ith the !ords H:or a loan # have received ?I in the first line of the borro!erAs !ritten promise. The borro!er has not received a loan at that point, b t nonetheless he is promising to pay on some preexisting loan 7national debt8 on every mortgage note he signs. A man gives val e thro gh his signat re on a note, in exchange for rights to f t re setoff. Be acG ires his right to f t re setoff as sec rity for or in partial satisfaction of a preexisting claim he has thro gh his position as beneficiary on the tr sts created by the Constit tion and 3resident "oosevelt. #t is this beneficiary position that yo are sing !hen yo A&+. There is no val e in an instr ment that is iss ed for val e !hen it is iss ed. #t is iss ed to get val e. An instr ment that is iss ed for val e is very different than the kind of instr ment yo sign as a borro!er. Co are providing val e in yo r instr ment at least t!ice. Co are giving the other party a !ritten promise to pay and p tting p sec rity 7legal description8, and yo are admitting yo have already received a loan. #n an instr ment that is iss ed for val e by the -nited 4tates, there is no express promise to pay yo , and there is no sec rity given to yo !hen yo receive it. The only !ay yo can make that instr ment payable to yo is to A&+ so yo can enforce yo r sec rity interest in that instr ment. 2hen an instr ment is iss ed by an agent of the -nited 4tates based only on an implied promise, it has to be iss ed for val e, or the iss er !o ld have no defenses against a claim of fra d or ab se. The transferee has a sec rity interest in the instr ment if the iss er cannot prod ce an antecedent claim based on a preexisting contract, !hich the iss er cannot do. #f he co ld, it !o ld not be iss ed for val e. #f the instr ment is not accepted for val e, and then ret rned for val e, the transferee !aives his sec rity interest in the instr ment and !aives his position as holder in d e co rse !ith the right to enforce the instr ment. The iss er has the liability ntil

someone else takes on the liability. That is s pposed to be the transferee, if the agentAs plan !orks. Transfer means moving something by a transferor to a transfereeD from one place to another place. #n commerce, a transferor is s ally attempting to transfer his liability to the transferee, !hich is fine if he is also transferring the sec rity interest along !ith the liability. #n the -nited 4tates, it is pres med the transferee 7-.4. citiLen8 has an obligation on a preexisting contract 7pledge8 to pay an instr ment as the res lt of another party 7international bankers8 having a direct or indirect antecedent claim against the transferee. #t co ld even be a preexisting claim against the transfereeAs 7-.4. citiLenAs8 creditor 7-nited 4tates8. This is !here Hp blicI and HprivateI become haLy. 2hen the -nited 4tates is dealing !ith its s reties 7-.4. citiLens8, yo are looking at a p blic relationship controlled by p blic policy. The people are not nder p blic policy. :rance is not nder p blic policy of the -nited 4tates either. 2hen the federal -nited 4tates is dealing !ith the co ntry of :rance, the relationship is governed by the la!s of nat re. #t is by private agreement. 2hen corporate -nited 4tates is dealing !ith corporate :rance, the relationship is governed by the =a! <erchant. That is also by private agreement, b t nder a different set of la!s. 2hen the -nited 4tates is dealing !ith its creditors, yo are looking at a private relationship bet!een corporate -nited 4tates and other corporate persons that s pposedly made loans to corporate -nited 4tates. The =a! <erchant governs commercial actions among corporate nations. #t is p blic la!, b t the la! of the individ al contracts corporate -nited 4tates has !ith those other corporate persons, is private la!. 2hen the national -nited 4tates is dealing !ith its corporate s bdivisions 74tate of California8, that relationship is governed by p blic la!. The la! of the contracts corporate -nited 4tates has !ith its corporate s bdivisions is administered by p blic policy. The la! of the relationship the national -nited 4tates has !ith its officers, agents, and employees is controlled by p blic la! thro gh stat tes. The la! of the relationship bet!een the federal government and the people in the several states is the Constit tion. This is a private arrangement. The people cannot have p blic contracts !ith corporate -nited 4tates. They already have a private arrangement that p ts the people as beneficiaries, and the 3resident as the exec tive tr stee. These are all relationships that are governed by some kind of la!D often a la! that is not even considered by one of the parties. 3eople , people 0 private la! 7agreements8 4everal 4tates , people 0 private la! 7state constit tions8 :ederal -nited 4tates , people 0 private la! 7Article +# oaths8 -.4. citiLens , people 0 private la! 7agreements8 Corporate -nited 4tates , people 0 private la! 7agreements8 #nternational lenders , people 0 no relationship :ederal -nited 4tates , several states 7/hio8 0 private la! 7Constit tion8 :ederal -nited 4tates , other co ntries 0 private la! 7treaties8 Corporate -nited 4tates , international lenders 0 private la! 7agreements8 :ederal -nited 4tates , foreigners 0 private la! 7la! of nat re and nat reAs Eod8

1ational -nited 4tates , -.4. citiLens 0 p blic la! 7stat tes8 1ational -nited 4tates , members 4tates 74tate of /hio8 0 p blic la! 7stat tes8 Corporate -nited 4tates , other nations 0 p blic la! 7international =a! <erchant8 1ational -nited 4tates , foreigners 0 p blic la! 7international =a! <erchant8 Technically, a -.4. citiLen has no direct obligation to the international bankers, so their pres med claim against the -.4. citiLen is initially a fail re. #f the -nited 4tates can get its s rety 7-.4. citiLen8 to ackno!ledge the claim being made by the international creditors, thro gh the process of novation, the ob>ective can be accomplishedD the ob>ective being that the -.4. citiLen has vol ntarily taken on the liability of the national debt. That is going to be in the capacity of $8 an accommodation party, or 28 a s rety. 4 reties have rightsD accommodating parties donAt. That !o ld be a political election, and only the person can make that choice. 4ince yo are representing a -.4. citiLen, it is yo r choice. 2hen the transferee receives an instr ment iss ed and transferred for val e, he has options. Be can $8 accept it and pay it, 28 ref se it for ca se and ret rn it, or *8 accept it for val e and ret rn it as payment. The transferee gets an implied sec rity interest 7consideration8 that he can enforce against the sec rity the iss er is s pposed to be passing on to the transferee. Jy operation of la!, the instr ment m st carry the iss erAs obligation to pay it. !"" ,#,%, <fficial "omment If an instrument is not issued for consideration the issuer has a defense to the obligation to pay the instrument.

!"" ,#,%, <fficial "omment Thus, outside Article ,, anything that is consideration is also value. A different rule applies in Article ,. 5ubsection +b- of 5ection ,#,%, states that if an instrument is issued for value it is also issued for consideration. To avoid fra d, the instr ment has to be iss ed for val e. #t gives the transferee 7a -.4. citiLen8 a sec rity interest in the instr ment. The only piece of paper a man has that is proof of the sec rity interest he has is the birth certificate. #t has no val e on the private side, b t it does on the p blic side if he deposits !ith an appropriate banker, !ho can then be the manAs sec rities intermediary, and the man can be the entitlement holder. This is explained in -CC Article ' in the )00 series. The follo!ing insert is taken from 2ikipedia, an online dictionary. (peration of law / The phrase 2by operation of law2 is a legal term that indicates that a right or liability has been created for a party, irrespective of the intent of that party, because it is dictated by existing legal principles. C *vents that occur by operation of law do so because courts have determined over time that the rights thus created or transferred represent what the intent of the party would have been, had they thought about the situation in advance; or

because the results fulfilled the settled expectations of parties with respect to their property; or because legal instruments of title provide for these transfers to occur automatically on certain named contingencies. 3ights that arise by operation of law often arise by design of certain contingencies set forth in a legal instrument. 3ights or liabilities created by operation of law can also be created involuntarily, because a contingency occurs for which a party has failed to plan +e.g. failure to write a will-; or because a specific condition exists for a set period of time +e.g. adverse possession of property or creation of an easement; failure of a court to rule on a motion within a certain period automatically defeating the motion; failure of a party to act on a filed complaint within a certain time causing dismissal of the case-; or because an existing legal relationship is invalidated, but the parties to that relationship still re.uire a mechanism to distribute their rights +e.g. under the !niform "ommercial "ode, where a contract for which both parties have performed partially is voided, the court will create a new contract based on the performance that has actually been rendered and containing reasonable terms to accommodate the expectations of the parties-. 0ecause title to property that arises by operation of law is usually contingent upon proof of certain contingencies, and title records may not contain evidence of those contingencies, legal proceedings are sometimes re.uired to turn title that arises by operation of law into mar etable title. Co r /rder that the birth certificate be deposited by a sec rities intermediary makes it a sec rity. #t appears that the birth certificate is not an act al sec rity ntil it passes to a second holder, ie. from the iss er 74tate of California8 to the 5epartment of Commerce of the -nited 4tates. The -nited 4tates ses the certificate ntil yo decide yo !ant to se it. Co have the priority right to it as a sec rity for the obligation the -nited 4tates has to yo . #t !as iss ed to yo . !"" =#1%$+a-+1E- (Security,) except as otherwise provided in 5ection =#1%,, means an obligation of an issuer or a share, participation, or other interest in an issuer or in property or an enterprise of an issuer/ 7i8 which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon boo s maintained for that purpose by or on behalf of the issuer; 7ii8 which is one of a class or series or by its terms is divisible into a class or series of shares, participation, interests, or obligations; and 7iii8 which/ 7A8 is, or is of a type, dealt in or traded on securities exchanges or securities mar ets; or 7J8 is a medium for investment and by its terms expressly provides that it is a security governed by this Article. 5epositing the birth certificate 7sec rity8 makes the secretary of the treas ry a sec rities intermediary.

!"" =#1%$+a-+1'- (Securities intermediary) means 7i8 a clearing corporation/ or 7ii8 a person, including a ban or bro er, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity. Be is holding something of val e 7a financial asset 0 birth certificate 0 sec rity8 in a sec rities acco nt for yo . !"" =#E%1 7a8 (Securities account) means an account to which a financial asset is or may be credited in accordance with an agreement under which the person maintaining the account underta es to treat the person for whom the account is maintained as entitled to exercise the rights that comprise the financial asset. 7b8 *xcept as otherwise provided in subsection +d- and +e-, a person ac.uires a security entitlement if a securities intermediary/ 7$8 indicates by boo entry that a financial asset has been credited to the person7s securities account; 728 receives a financial asset from the person or ac.uires a financial asset for the person and, in either case, accepts it for credit to the person7s securities account; or 7*8 becomes obligated under other law, regulation, or rule to credit a financial asset to the person7s securities account. Bis acceptance of yo r financial asset makes yo an entitlement holder !ith a sec rities entitlement. !"" =#1%$+a-+4- (Financial asset,) except as otherwise provided in 5ection =#1%,, means/ 7i8 a security; 7ii8 an obligation of a person or a share, participation, or other interest in a person or in property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial mar ets, or which is recogniGed in any area in which it is issued or dealt in as a medium for investment; or 7iii8any property that is held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this Article. !"" =#1%$+a-+1D- (Security entitlement) means the rights and property interest of an entitlement holder with respect to a financial asset specified in >art E.

!"" =#1%$+a-+D- (=ntitlement holder) means a person identified in the records of a securities intermediary as the person having a security entitlement against the securities intermediary. /fficial Comment 0ecause many of the rules of >art E impose duties on securities intermediaries in favor of entitlement holders, the definition of entitlement holder is, in most cases, limited to the person specifically designated as such on the records of the intermediary. The last sentence of the definition covers the relatively unusual cases where a person may ac.uire a security entitlement under 5ection =#E%1 even though the person may not be specifically designated as an entitlement holder on the records of the securities intermediary. Co can give him another bond !ritten against the sec rity 7bond 0 birth certificate8 he is holding. A promissory note can be !ritten against the bond that is !ritten against the sec rity. 4 ch a promissory note !o ld be an order from the entitlement holder to the sec rities intermediary to se the sec rity he is maintaining for a specific p rpose. !"" =#1%$+a-+=- (=ntitlement order ) means a notification communicated to a securities intermediary directing transfer or redemption of a financial asset to which the entitlement holder has a security entitlement. !"" =#E%E. >uty of Securities Intermediary with &espect to $ayments and >istributions* 7a8 a securities intermediary shall ta e action to obtain a payment or distribution made by the issuer of a financial asset. A securities intermediary satisfies the duty if/ 7$8 the securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or 728 in the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to attempt to obtain the payment or distribution. 7b8 A securities intermediary is obligated to its entitlement holder for a payment or distribution made by the issuer of a financial asset if the payment or distribution is received by the securities intermediary. 4ince sec rities intermediaries have obligations to entitlement holders, the sec rities intermediaries m st have capacity to act. That is done nder the premise that a sec rities intermediary is declared in the commercial code to be a p rchaser for val e. The indirect holding system of the -nited 4tates !o ld not f nction as expected if the sec rities intermediary did not have capacity to act. 2itho t the rights of an o!ner or a p rchaser, the sec rities intermediary !o ld be po!erless to act in the intended manner. !"" =#111 Securities Intermediary as $urchaser For +alue

A securities intermediary that receives a financial asset and establishes a security entitlement to the financial asset in favor of an entitlement holder is a purchaser for value of the financial asset. /fficial Comment This section is intended to ma e explicit two points that, which implicit in other provisions, are of sufficient importance to the operation of the indirect holding system that they warrant explicit statement. Birst, it ma es clear that a securities intermediary that receives a financial asset and establishes a security entitlement in respect thereof in favor of an entitlement holder is a (purchaser) of the financial asset that the securities intermediary received. 5econd, it ma es clear that by establishing a security entitlement in favor of an entitlement holder a securities intermediary gives value for any corresponding financial asset that the securities intermediary receives or ac.uires from another party, whether the intermediary holds directly or indirectly. C In many cases a securities intermediary that receives a financial asset will also be transferring value to the person from whom the financial asset was received. That, however, is not always the case. >ayment may occur through a different system than settlement of the securities side of the transaction, or the securities might be transferred without a corresponding payment, as when a person moves an account from one securities intermediary to another. *ven though the securities intermediary does not give value to the transferor, it does give value by incurring obligations to its own entitlement holder. Although the general definition of value in 5ection 1#$%1+''-+d- should be interpreted to cover the point, this section is included to ma e this point explicit. #f the transferee act ally is a party to a preexisting contract, he m st pay it or ref se it for ca se, d e to some defect in the collection process. 9ven if he is pres med to be a party to a preexisting contract, he has the option of renegotiating the terms of that contract, or introd cing a ne! contract. #f he > st accepts the instr ment and does not timely $8 pay it or 28 ref se it for ca se and ret rn it, he is in defa lt. The reason he can ref se it for ca se and ret rn might be that there is some do bt as to !hether the transferee is act ally liable for an antecedent claim on a preexisting contract. There is also some do bt that the proper proced res !ere sed to transfer the debt to the transferee. /ption $ reG ires the transferee to part !ith possessions, s ch as cash, digits in a bank acco nt, or titles to things. /ption 2 reG ires the transferee to nderstand a great deal abo t co rt proced res and the ability to think on his feet if he participates in a co rt proceeding. /ption 2 is very sef l to those !ho have learned the mechanics of the administrative co rts. #t is also sef l if the transferee starts an immediate dialog e !ith the iss er as soon as the instr ment is delivered. The foc s for this option m st be on d e process. #t cannot present arg ments abo t the existence of the obligation or the amo nt of the obligation, b t can present G estions

abo t proper collection proced res. /ption * reG ires kno!ledge of !ho yo are and ho! to enforce yo r rights. #f the instr ment is iss ed for val e, it can be accepted for val e beca se it comes !ith a sec rity interest b ilt into the instr ment. #f the transferee accepts the instr ment for val e and ret rns it for val e, he is ackno!ledging the instr ment !as iss ed for val e. Be is informing the iss er that he intends to renegotiate the terms of the implied simple contract 7that he is a s rety8 or introd ce terms for a ne! contract. /n a ne! contract, the iss er can be made to ackno!ledge that he is liable for the instr ment he iss ed. #f the iss er has defenses, he !ill be /S. An iss erAs defenses normally !o ld be the record of the antecedent claim on the preexisting contract, b t he might have to prod ce it. 4ince it is a simple contract, it !ill be diffic lt to prod ce. The evidence of that simple contract is signed applications for the birth certificate, for the social sec rity n mber, for licenses, for passports, for permits, for bank acco nts, etc. #f the preexisting claim res lted from an implied contract that the transferee is a s rety, the iss er !ill not !ant to prod ce it. #f the -nited 4tates iss es and transfers an instr ment for val e, it r ns the risk of having it ret rned for val e, p tting the liability back on the -nited 4tates, !hich has no choice b t to close the acco nt. #t has no act al antecedent claim based on a preexisting contract. The iss ance of an instr ment !ith nothing to base it on, normally !o ld be a violation of commercial principles and !o ld be fra d, b t nder Article *, an instr ment can be iss ed for val e to avoid the normal penalty for fra d. #t is the transfereeAs choice as to ho! it !ill all t rn o t. Be determines if the instr ment is a promise or an order, if it is negotiable or non.negotiable, and if it is a payment or a sec rity for an antecedent claim he has against the iss er, or if it is a sec rity for an antecedent claim the iss er has against him. Bis endorsement !ill inform the iss er of !hat he intends to do. Be has the option of accepting it for val e and settling the acco nt to close the books. Be can even send an additional promissory note !ith the ret rn of the instr ment he has accepted for val e. #t !o ld not h rt for him to do this, so the -nited 4tates does not s ffer beca se of the actions of one of its agents. #f he ref ses the instr ment for ca se and ret rns it, it is possible one of those agents !ill ca se the -nited 4tates to s ffer a financial loss. #t might be better to be seen as one !ho aids and assists the -nited 4tates in its time of emergency, rather than one !ho does not. 4 bsection * of *.*0* deals !ith options the transferee has !hen an instr ment is iss ed for val e and transferred for val e to him. !"" ,#,%,. Ialue and consideration A. An instrument is issued or transferred for value if/ 6* The instrument is issued or transferred as payment of or as security for an antecedent claim a"ainst any person whether or not the claim is due0 -CC *.*0* says an instr ment is iss ed or transferred for val e if it is iss ed or transferred $8 as if it !ere a payment of, or 28 as if it !ere a sec rity for, an antecedent claim against any personD and it does not matter if the claim is d e. The

Hantecedent claim against any personI can be and s ally is, the claim international lenders have against the -nited 4tates. -.4. citiLens are s reties for that debt, and the -nited 4tates is the principal. 2hen a s rety is called pon to pay his principalAs debt, a demand for payment has already been made of the principal. :or !hatever reason the principal did not pay !hen the demand !as made, so the attention then t rns to the s reties. The s reties are reG ired to pay immediately. 4ince -.4. citiLens have not expressly signed on as s reties for the -nited 4tates, demand can only be made for val e. The -nited 4tates acting for its creditors, can make demands for val e, ie. for loans. 2hen the s rety 7transferee8 receives a demand for val e, the demand needs an endorsement to make it negotiable. The iss er is looking for the transferee to s pply the endorsement. That can be a blank endorsement or a G alified endorsement. The choice is yo rs. The instr ment can be iss ed or transferred for val e as a payment or as a sec rity. The endorser decides !hich it is. The antecedent claim can be against any person, not necessarily against the transferee. That Hany personI can be the -nited 4tates for the national debt if the transferee is a s rety for the -nited 4tates. #f the transferee agrees to be s rety, he has an obligation to pay the instr ment immediately. #f the transferee gives the instr ment to the man !ho represents him, he can se the commercial r les to A&+ the instr ment and ret rn it for val e and for clos re of the acco nt. 9ither !ay, the transferee has an obligation to do something !ith the instr ment. HEiving val eI from $.20$ is not the same as Htransferring for val eI from *.*0*. The transferor 7iss er8 in *0* s ally !ants to get a val able consideration back for an instr ment he iss es for val e, and he !ants a ne! contract on !hich he or the person he represents is the creditor. An iss er for val e has no preexisting contract and no antecedent claim that a thoriLes him to iss e an instr ment, so he iss es it for val e and delivers it to someone 7the target8 !ith the hope that the receiver !ill accept it !itho t conditions. The one !ho receives an instr ment iss ed for val e does not have to accept the liability attached to it, nless he has an obligation to accept the liability. #f there is no obligation, the transferee can vie! the instr ment as a payment, and ret rn it !ith a proper endorsement to pay the instr ment and to close the acco nt. The instr ment pays the instr mentR The iss er pays the iss erR Conf sing, isnAt itK The instr ment can also be an offer to contract, and no one is reG ired to contract if he does not choose to do so. The pres mption that everyone is obligated to enter these contracts is based on an implied simple contract. That is not a very strong position. 2hen an instr ment iss ed for val e is received and retained, it is accepted as tho gh the receiver has given it a blank endorsement, and the transfer of liability has been s ccessf l. A blank endorsement !aives all the defects, and the main defect in an instr ment iss ed for val e is that there is no sec rity attached to it. #f it !ere not for the inherent sec rity interest in the instr ment itself, the !hole pro>ect !o ld be fra d. The iss er is not giving val eD he is seeking val e. The iss er is not giving

considerationD he is seeking consideration. These abnormalities can be c red if the transferee gives it a G alified endorsement as a payment and ret rns the payment for clos re of the acco nt. After acceptance thro gh a blank endorsement, the iss erAs consideration is pres med, and the endorser is liable on the instr ment. A commitment 7implied or express8 by the transferee 7to take on the liability8 thro gh a general acceptance !o ld be a val able consideration on his part, and !o ld res lt in a binding contract. Be is then obligated on the instr ment to make immediate payment. 4 bsection & of *.*0* deals !ith negotiable instr ments. The iss er is seeking a negotiable instr ment in ret rn for the instr ment he is transferring to the transferee. #n most cases, the transferee does not kno! that the instr ment itself is going to be made negotiable. The transferee is the only one !ho can decide !hat endorsement is going to be on the instr ment. !"" ,#,%,. Ialue and consideration A. An instrument is issued or transferred for value if/ :* The instrument is issued or transferred in e.chan"e for a ne"otiable instrument0 or -CC *.*0*7A87&8 says an instr ment is iss ed or transferred for val e if it is iss ed or transferred in exchange for a negotiable instr ment. The iss er !ants to exchange his instr ment for a negotiable instr ment. Co can send him a check, !hich is negotiable. Co can retain his instr ment, !hich is an acceptance !aiving the defects and giving it a blank endorsement, !hich makes the instr ment negotiable. Co can ret rn his instr ment as a payment !ith a proper endorsement, !hich makes it negotiable. The iss er gets !hat he !ants, sort of. At the time an instr ment is iss ed for val e, it has no val e ntil the transferee endorses it. 2hen yo endorse it !ith a blank endorsement by mere acceptance, yo have t rned it into a negotiable instr ment, and yo are the ne! iss er. The initial iss er no! has a sec rity interest in yo r negotiable instr ment, and he can negotiate it for payment. Be is entitled to enforce the instr ment, instead of yo . 2hen an instr ment is > st iss ed 7check or promissory note8, it has val e beca se it contains an order or a promise and is backed by a sec rity, some sort of promise. Checks are backed by digits in an acco nt that represent :ederal "eserve 1otes, !hich are obligations of the -nited 4tates. 3romissory notes are backed by the promise of f t re labor. #n the case of a check, the val e is the promise on the part of the iss er and the order to a third party to pay it. #f yo cannot tell on the face of the instr ment if it is a promise or an order, it can be treated as either. 2hen the payee receives a check, it is a promise. 2hen he negotiates it by endorsing it and delivering to a bank, it is an order. #f the check is negotiated at the bank on !hich it is !ritten, and there are s fficient digits in the acco nt to cover the check, that bank can take the instr ment, and does not have to take it for val e. #f the check is negotiated at a different bank, the bank can take the instr ment for val e, beca se it does not kno! if the check is good. #t does not kno! if it can collect on the check. #f the bank gives its depositor cash immediately pon deposit, the bank may not be able to collect from

the makerAs bank. #t !o ld then have to retrieve the val e of the check from its depositor. To avoid s ch problems, the bank !ill s ally give notice that the f nds !ill not be available to its depositor ntil the bank has collected on the check from the makerAs bank. #n that case, the bank !o ld be taking the instr ment for val e. #t !o ld be seeking val e, and !o ld not be making a commitment to honor the check nconditionally. #f someone > st accepts an instr ment iss ed by an agent of the -nited 4tates for val e and does not immediately pay it, he is in defa lt. #f he !ere to accept it for val e and ret rn it to the iss erAs banker 74ecretary of the Treas ry8 !ith a G alified endorsement 7not a blank endorsement8, the iss er !o ld have no reco rse against the one !ho endorsed and ret rned the instr ment. The G alified endorsement is , Accepted for +al e 9xempt from =evy signature 5ate 6666 9xemption #dentification 1 mber $2*&)%7'( 5eposit to the -.4. Treas ry and charge the same to 666666666 . The val e of the instr ment can be charged to ;/B1 B 5/9 $2*.&).%7'( if it is the birth certificate. The val e can be charged to a clerk of co rt for case T 6666. #t can be charged to the Commissioner of #nternal "even e 4ervice for acco nt T $2*. &).%7'( if it is a tax bill. 9lectric bills have the bank ro ting n mbers and amo nt of the vo cher printed in magnetic ink right on the bottom of the bills. The tility companies are act ally sending yo the vo cher to pay the bill !ith the statement every month. 9ven so, they might decide to t rn off yo r service if yo do not send them a Hthank yo I check in addition to ret rning the vo cher !ith yo r proper endorsement. #"4 also sends the vo cher on the final demand before lien or levy. A vo cher can be Ha !ritten record of expendit re, disb rsement, or completed transaction, or it can be a !ritten a thoriLation or certificate, especially one exchangeable for cash or representing a credit against f t re expendit resI. #t !o ld need to be endorsed before s bmitting it as a credit. A blank endorsement p ts the liability on the endorser. A G alified endorsement p ts the liability on the iss er. -ntil someone gives an endorsement, an instr ment iss ed for val e is not negotiable. #f the transferee makes the instr ment negotiable as a sec rity !ith a blank endorsement, the transferee m st pay it. Be can give it a G alified endorsement by accepting it for val e, to make it a payment. 2hen it is s bseG ently presented to a third party 7banker8, it is an order from the maker to the third party to pay it. The instr ment iss ed for val e becomes the very payment that pays it. #f the transferee gives it a blank endorsement 7by his silence8 and does not ret rn it !ith his check, he makes the instr ment his promise and also makes the instr ment negotiable as a sec rity. 2hoever has a right to enforce it can negotiate it. #f the transferee has no idea !hat to do !ith it, he might inadvertently make it a sec rity and commit himself to pay it. #t is his choice. There is a price for ignorance. #gnorance is not st pidityD it is lack of kno!ledge. #f an instr ment is iss ed and transferred for val e, the person !ho is the transferee can make it the iss erAs note 7promise8 and the transfereeAs draft 7order8. The transferee can be the one entitled to enforce the instr ment if he gives it a proper endorsement. #f he does not, the transferor is the person entitled to enforce the instr ment, and he !ill enforce it.

A case designed to seiLe property of a -.4. citiLen is called a penal action. #t is not civil, and it is not criminal. #t is based on violation of stat tes that !ere implemented to facilitate collections from -.4. citiLens to pay the national debt. =ibels of information are sed to obtain arrest !arrants from the clerks of exec tive co rts so the proceeding can be commenced. These are not casesD they are proceedings. The book ,4 I35 Arguments that 6on7t 8or and 8hy explains this process in m ch more detail. #t can be fo nd on !!!.l l .com. 2hen an indictment 7tr e bill8, !hich is act ally a libel of information, or other bill is presented to a -.4. citiLen by the -nited 4tates, an obligation on a preexisting claim against the -nited 4tates 7national debt8 is being transferred to the transferee 7s rety . defendant or debtor8. The bill is iss ed for val e. The endorser is expected to create the HmoneyI, both for the payment or for the sec rity. The -nited 4tates !ants the -.4. citiLen to s pply the val e. There is no act al sec rity, antecedent claim, or preexisting contract behind it. 1o money is needed if the transferee treats it as a payment and sends it to the iss erAs banker !ith a G alified endorsement. This p ts the endorser in the driverAs seat and makes him the party entitled to enforce the instr ment. /n the other hand, no money is needed if the transferee treats it as a sec rity by giving it a blank endorsement and keeping 7holding8 it. This p ts the iss er or his principal in the driverAs seat and entitles the principal to enforce the instr ment. 4ince $(**, the only money in circ lation is money of acco nt that is created on demand at the time it is needed to satisfy an immediate need. #f a bill is iss ed !ith nothing to sec re it, it has to be iss ed for val e, beca se the money to pay it 7promise to back it8 has not been created. #f the transferee receives a bill and does not pay it immediately, he is in defa lt. 4ome say the reason it cannot be paid is beca se no check to pay it !as incl ded !ith the bill. The instr ment is the check if it is taken as a payment, made negotiable !ith a proper endorsement, and t rned into a draft 7iss erAs order8. #f the transferee accepts it for val e and ret rns it to the iss erAs banker 74ecretary of the Treas ry8 as payment to balance the books and close the acco nt, he is not in defa lt. 4ince it !as iss ed for val e, and transferred for val e, it can be accepted for val e. To be a holder in d e co rse, the endorser m st take 7accept8 the instr ment for val e. 4ee *.*02. Bolder in d e co rse above. -nder Article *, if an instr ment is iss ed for val e, it is also iss ed for consideration. The iss er either gives the consideration thro gh the instr ment, or iss es the instr ment for val e to receive the consideration from the transferee. 2hen an instr ment is accepted 7taken8 for val e, it can be ret rned to pay the bill, and the transaction is finished. All the reG ired bookkeeping entries for an accr al bookkeeping system can be made based on the offer for val e and the acceptance for val e. This bookkeeping cannot be done if the bill is not ret rned !ith an appropriate endorsement tho gh. #f the bill is not ret rned, the bookkeeper has an nbalanced acco nt. All acco nts m st be closed at the end of the b siness day in an accr al system. An nbalanced acco nt necessitates entries into the acco nts payable and acco nts receivable ledgers. #f yo are the ca se of a payable, yo are also

responsible for the receivable, so yo r retention of the instr ment is deemed to be a blank endorsement. #f yo do not balance that acco nt, an exec tive co rt !ill do it for yo . That s ally res lts in a stat tory penalty being applied against yo thro gh the -.4. citiLen yo represent. 4 bsection ) of *.*0* deals !ith irrevocable obligations. The transferee is expected to enter that obligation vol ntarily and take on the liability of both the instr ment and the payment needed on the national debt. !"" ,#,%,. Ialue and consideration A. An instrument is issued or transferred for value if/ 3* The instrument is issued or transferred in e.chan"e for the incurrin" of an irre%ocable obli"ation to a third party by the person takin" the instrument* An instr ment can be iss ed or transferred in exchange for the inc rring of an irrevocable obligation to a third party by the person taking the instr ment. This is a very easy to nderstand section. #f the iss er 7-nited 4tates8 iss es or transfers an instr ment for val e on behalf of a third party 7international creditors8, and if he 7-nited 4tates8 is f lfilling a promise 7reorganiLation plan8 on an antecedent claim 7national debt8 the third party 7international creditors8 has against the iss er 7-nited 4tates8, his 7-nited 4tates8 p rpose is to exchange the instr ment for an irrevocable obligation 7the -.4. citiLenAs8 to that third party 7international creditors8 by the person taking the instr ment 7-.4. citiLen8. #f the transferee 7-.4. citiLen8 has an obligation to the iss er 7-nited 4tates8, and the iss er 7-nited 4tates8 can provide the third party 7international creditors8 !ith an irrevocable obligation by the transferee 7-.4. citiLen8, the iss er 7-nited 4tates8 has a defense beca se of the giving of val e 7-.4. citiLenAs irrevocable obligation8 to the third party 7international creditors8. The transfereeAs 7-.4. citiLen8 obligation 7val e8 to the iss er 7-nited 4tates8 is transferred to the third party 7international creditors8 as val e 7payment on the national debt8. The iss er 7-nited 4tates8 is entitled to enforce an instr ment 7pledge8 it s pposedly previo sly received from the -.4. citiLen. The transferee on an instr ment iss ed and transferred for val e is the one !ho decides if the instr ment is a payment or a sec rity. The definition of Hnegotiable instr mentI says, Ha person entitled to enforce the instr ment may treat it as eitherI. !"" ,#1%'. @egotiable instrument *. An instrument is a 2note2 if it is a promise and is a 2draft2 if it is an order. If an instrument falls within the definition of both 2note2 and 2draft2, a person entitled to enforce the instrument may treat it as either. 2hen an iss er of a negotiable instr ment delivers it to a -.4. citiLen represented by a kno!ledgeable man, it is the transferee 7-.4. citiLen8 !ho is entitled to enforce the instr ment. 4ince he has been asked to take on the liability, he is the one !ho decides if the instr ment is a promise 7note8 or an order 7draft8. Be is the one !ho has the right to endorse the instr ment. An iss er of an instr ment for val e is

gambling !hen he delivers an instr ment to a transferee. #f it gets in the hands of a kno!ledgeable man, the iss er might end p being the liable party instead of the transferee. 4ince agents of the -nited 4tates !ho have a thority to iss e and transfer instr ments for val e are bonded, their iss ance of these bills !ill not affect their personal holdingsD b t if a kno!ledgeable man accepts it for val e and ret rns it for clos re and settlement of the acco nt, and the agent is negligent or ab sive, his bond may not cover his !illf l defa lt. Bis only reco rse is to try to get yo to change yo r mind and !aive yo r settlement. #f yo do not really kno! !hat yo have done, it !ill be easy for him to help yo !aive yo r settlement and revert back to being liable on the instr ment that yo t rned into a negotiable instr ment. That instr ment 7as a sec rity8 can then be transferred to a third party as a form of satisfaction by the -nited 4tates, sing yo as the responsible party. An instr ment that is a promise or an order can be iss ed for val e by an agency or instr mentality of the -nited 4tates, an individ al, or a corporation and delivered to another person, !ho is pres med to have previo sly made a pledge to be liable for s ch instr ments. #t is not the instr ment that determines if it is a promise or an order, and a payment or a sec rity. 2hether the instr ment is a promise or an order is p to the one !ho endorses it. 2hether it is going to be sed as a payment on a preexisting claim, or as a sec rity for a preexisting claim is also p to the one !ho endorses it. #t is going to be negotiable, b t !hen it is iss ed, it is not kno!n !ho is going to be the liable party on it !hen it is negotiated. 9ndorsing a check iss ed as a promise and as an order is not done for val e. /nly instr ments that are iss ed and transferred for val e can be accepted for val e. A check does not fall into that category, b t the !ay it is endorsed does determine if the negotiation of the check !ill be a taxable event to the endorser, or not. #f it is endorsed in blank and deposited any!here in the -nited 4tates, a tax is o!ed. The person receiving it creates a record of the creation of a ne! sec rity at the bank !here it !as deposited. That record confirms the person making the deposit has realiLed an ndeniable ascension to !ealth over !hich he has control, and that transaction is a taxable event. A blank endorsement is one that only exhibits the signat re of the endorser and does not contain special terms. An instr ment !ith a blank endorsement becomes a bearer instr ment and can be enforced by anyone !ho has it. #f it is given to a bank thro gh a deposit, the bank becomes the person entitled to enforce the instr ment. -sing a check as an example, if it is endorsed in blank and deposited, its val e sho ld be incl ded as income on a tax ret rn. That same check co ld be endorsed !ith a G alified endorsement indicating the check is exchanged for credit on acco nt or is exchanged for :ederal "eserve 1otes that have no redeemable val e according to $2 -4C &$$. The endorsement !ords are chosen by the endorser. They might be , 6eposited as credit on account or exchanged for Bederal 3eserve @otes with no redeemable value. #f the bank has a problem !ith that !ording, it might be changed to , 6eposited as credit on account or exchanged for Bederal 3eserve @otes pursuant to 1$ !5" '11 as amended. The amendment that is important is the one that removed the redeemability from the stat te.

&nterest in -roperty

4ince the -nited 4tates money system is based on interest in property rather than s bstance, the commercial goal is to get a sec rity interest in something that has val eD not to take possession of a thing. /!nership carries liabilities. #nterest in property does not. #t is more efficient commercially to have a sec rity interest in property than to o!n it. A sec rity interest is not given nless there is an obligation that necessitates s ch an action. That means there is a debt involved !hen there is a sec rity interest. 2hen one applies for credit, he sim ltaneo sly gives a sec rity interest in a thing that has val e. The thing can be a title to land or a car, title to a deposit acco nt at a bank, a promise of f t re performance, or a commitment on f t re labor. The sec rity for the credit can be implied, and constit tes consideration. This implies the existence of a contract, even tho gh it may be a simple contract and yo may not have intended to enter a contract. 5efa lt on implied contracts can res lt in conseG ences any!here from seiL re of pledged property 7titles or even a body8, to negative information on a credit report. The blank endorsement of a transferee, !ho does not do anything !ith an instr ment that !as iss ed or transferred to him for val e, is ass med. At some point he is a holder and is liable, b t the liability is not enforceable ntil there is an endorsement, !hich can be on another piece of paper that is attached by a connective note, or can > st be pres med according to commercial la!. 4omeone other than the transferee can even sign it on behalf of the transferee. This is not done nless the transferee is arg ing or contin ally ob>ecting to being billed. Technically, the transferee is in defa lt, so his negligence or disobedience can be c red by someone else, b t there is s ally an additional price to pay at that point. An act al endorsement that fits the commercial reG irements might even be on a paper sed in a penal action proceeding, called Terms and Conditions of "elease. #t is a special bond sed in penal action co rts !hen the defendant still ref ses to take responsibility to close the acco nt. !"" ,#$%, Transfer of instrument0 ri"hts ac;uired by transfer ". !nless otherwise agreed, if an instrument is transferred for value and the transferee does not become a holder because of lac of indorsement by the transferor, the transferee has a specifically enforceable right to the un.ualified indorsement of the transferor, but negotiation of the instrument does not occur until the indorsement is made. This is a conf sing section of the commercial code. The positions of the transferor and the transferee s!itch !hen the original transferee fails to respond. The mere act of retaining an instr ment implies its general acceptance and its reiss ance !ith a blank endorsement. This t rns the tables. #t t rns the original transferee into the ne! iss erMtransferor and the <aker or 5ra!er on the instr ment. The original iss er becomes the transferee. :or example according to *.20*, the -.4. citiLen !ho received the instr ment and !as originally the transferee !ith an a tomatic sec rity interest in the instr ment that !as iss ed and transferred for val e, becomes the ne! iss er and the transferor if he > st receives it and retains it. The -nited 4tates agent that originally iss ed it for val e and had the liability to pay it, becomes the ne! transferee !ith a sec rity interest in the instr ment. The ne! transferee has a

specifically enforceable right to the nG alified indorsement of the transferor. All the -nited 4tates has to do is get the -.4. citiLen to sign something, anything, that is related to that instr ment. #t co ld be the green card on a certified mail envelope, or a payment agreement !ith the #"4, or a Terms and Conditions of "elease bond in an exec tive co rt proceeding.

0ettlement
Bandling negotiable instr ments is > st the first step of settling commercial acco nts in the -nited 4tates. Article * of the commercial code is the g idebook for dealing !ith negotiable instr ments of all kinds. "egistration and bonding thro gh the 4ecretary of the Treas ry as yo r fid ciary and sec rities intermediary and setting off commercial charges is needed to act ally settle the acco nts. 5irection for registering a sec rity interest is fo nd in Article ( and the d ties and rights of parties to sec rities are covered in Article '. Sno!ing !hat A&+ means is > st the beginning. UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

A5V .ecap
Acceptance for val e is p rely a commercial remedy. #t is not the only remedy. Acceptance for val e is based on contract la! and international la!. 9ven simple contracts m st have consideration from both sides to be valid. Jankr ptcy la! and insolvency la! overshado! all commercial debts in the -nited 4tates. The 3resident is the only officer of the -nited 4tates !ho has a constit tionally reG ired oath. 3eople are beneficiaries of the tr st created by the Constit tion. The 3resident is the exec tive tr stee of that tr st. Acceptance for val e is different than acceptance. +al e can be . $8 A commitment to extend credit 28 As sec rity for satisfaction of a preexisting claim *8 Acceptance of deliver on a preexisting contract &8 Any consideration s fficient to s pport a simple contract <ere acceptance !aives defects. Accepting an instr ment for val e gives the acceptor options. The iss er of an instr ment has the liability on the instr ment. An instr ment iss ed or transferred for val e is . $8 for a promise of performance, to the extent the promise has been performedD 28 to acG ire a sec rity interest or other lien in the instr ment other than a lien obtained by > dicial proceedingD *8 as payment of, or as sec rity for, an antecedent claim against any person, !hether or not the claim is d eD &8 in exchange for a negotiable instr mentD or

)8 in exchange for the inc rring of an irrevocable obligation to a third party by


the person taking the instr ment. /ne of an acceptorAs options is to accept for val e and ret rn for val e to the iss erAs banker. Article ' of the commercial code directs the handling of sec rities in the -nited 4tates. A sec rities intermediary has obligations to entitlement holders. Consideration means any consideration s fficient to s pport a simple contract. An iss er of an instr ment for val e has no defense to the obligation to pay the instr ment. The iss er has a defense if performance of the promise is d e and the promise has not been performed. An instr ment iss ed or transferred for val e is also iss ed for consideration. A person gives val e to receive rights. Be can acG ire rights , 7a8 #n ret rn for a binding commitment to extend credit or for the extension of immediately credit 7b8 As sec rity for or in total or partial satisfaction of a preexisting claimD or 7c8 Jy accepting delivery p rs ant to a preexisting contract for p rchaseD or 7d8 Eenerally, in ret rn for any consideration s fficient to s pport a simple contract. Acceptance for val e is the same as taken for val e. #nstr ments iss ed for val e have no val e in them ntil they are endorsed. A blank endorsement makes the endorser liable on the instr ment. A proper G alified endorsement can make an endorser a holder in d e co rse. An endorser is not reG ired to take on the liability of the instr ment. An endorser has the option of limiting or precl ding reco rse against himself. An endorser decides if an instr ment is a promise or an order. An endorser decides if an instr ment is negotiable or non.negotiable. An endorser decides if an instr ment is a payment or a sec rity. #nterest in property establishes a claim that may be enforceable by a holder in d e co rse. #nterest in property does not carry liabilities of o!nership of property.