Chapter 4
The 1930's - The Turning Point
Note: The cartoon below was in the August 8, 1936 issue of The Saturday Evening Post. Workers paid taxes as consumers. The income tax had been around for 23 years and the income tax did not tax wages. People were paid in cash in a pay envelope, not by paychecks.
"I may say at once that the changes proposed from all these Democratic principles and allies are of the most profound and penetrating character. If they are brought about this will not be the America which we have known in the past." Herbert Hoover, October 31, 1932
"It will be written for the instruction of those who come after us, that in the years 1933-40, the outstanding experiment of the North Americans in seeking to preserve a free political system by means of limitation and division, or decentralization of governmental authority, came to an end, and that a new cycle began in which they again found themselves the mere pawns and playthings of centralized power. And in the analysis of the failure, the impartial historian will not hesitate to ascribe to the loss of those qualities of character in the mass and in government, without which the constitutional paper forms are lifeless and vain." Sterling Edmunds, 1940
While living in Golden, Colorado, just outside of Denver, I spent a lot of time at the Denver Public Library going through old volumes of weekly press. I also spent much time in the law library at the Jefferson County Courthouse researching the Supreme Court Reporters. I knew from studying the constitutional challenges made against the income tax in its early years that the taxation was imposed upon the gains and profits of business activity. I was able to find a Saturday Evening Post article in the May 17, 1913 issue that thoroughly explained the congressional intent behind the 16th amendment. The article was written by Benton McMillin, a ten term congressman from Tennessee who fought hard for an income tax. The income tax was initially intended to tax "vast accumulations of wealth in the hands of individuals or corporations,"(1) not the wages of workers. As McMillin further stated:
"It equalizes the burden of the people - relieving the weak, yet doing no injustice to the strong and the opulent."(2)
opulent - 1. Wealthy, rich, or affluent, as persons or places. 2. Richly supplied; abundant or plentiful. - The American College Dictionary, Random House, N.Y., 1948 ed.
Today, the income tax takes its toll all the way down to minimum wage. Since when did the poor become part of the "strong and the opulent?" It is also interesting to note that the average American worker's wages amounted to around $500-600 per year in 1913.(3)
"The proposed income tax bill, carefully prepared by Judge Hull and his associates of the Ways and Means Committee, imposes a normal tax of one per cent a year upon the net income of all persons over and above $4000, and upon all corporations, joint stock companies and insurance companies without exemption."(4)
Image one bread winner being able to support a family on $500-600 per year. My 80 year old mother told me recently that back in the 1920's you could get a whole bag full of groceries for 50 cents. Now 50 cents won't even buy a candy bar at a convenience store. What good does it do to raise a worker's wages, say, from $1 per hour to $10 per hour if everything the worker buys costs ten times as much as when the worker made $1 per hour? Currency expansion (commonly called inflation) does not elevate workers by giving them a greater share of the wealth because everything the worker buys increases in price as the worker's wages increase. If the cost of living goes up faster than the wages paid to workers, then money gradually loses its buying power and money eventually becomes worthless.
"They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the Lord."(5)
Herbert Hoover knew that people can be enslaved to support government.
"The extension of Government expenditures beyond the minimum limit necessary to conduct the proper functions of the Government enslaves men to work for the Government. If we combine the whole governmental expenditures - national, State, and municipal - we will find that before the World War [I] each citizen worked, theoretically, twenty-five days out of each year for the Government. In 1924 he worked forty-six days a year for the Government. Today he works for the support of all form of Government sixty-one days out of the year."(6)
Today, all forms of Government cost the worker around 180 days of labor per year to support, and this will continue to increase with time.
"If I were a minority of one in this convention, I would want to cast my vote so that men of labor shall not willingly enslave themselves to government in their industrial efforts."(7) Samuel Gompers
The politicians in power today are not of this mentality. They are the opposite. They look at all who labor in the Realm we call America as serfs. The property in your own labor has been reduced to an article of commerce. This means your labor can be taxed and regulated at the pleasure of the politicians. The disciples of slavery have also conveniently assigned all who labor in the American Realm numbers that identify the property in the labor of their slaves. Most employers have also been conditioned not to hire or to fire anyone who refuses to give them this number and fill out all the enslaving tax forms. This is why I call the number a Slave Identification Number, or SIN.
"And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he had the mark, or the name of the beast, or the number of his name."(8)
Think about this. Labor is the foundation of all other property. Without the ability to sell your labor to an employer for wages, you could not buy any other forms of property. The number strikes at the very core of our existence.
The American system that had developed prior to the implementation of the New Deal of the 1930's was a system where people had rights that were held as inalienable and protected by the Constitution. The judicial decisions of the Supreme Court reflect a spirit of liberty prior to the New Deal of the 1930's.
"It has been well said that ‘the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing his strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property. It a manifest encroachment upon the just liberty of both the workman and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing who they think proper.'"(9) Justice Feild, 1884
Let us now contrast the judicial spirit of Justice Field in 1884 with the judicial spirit of Justice Blackmun in 1990. Both judicial opinions are about labor rights. The 1884 case involved a monopoly which gave one particular slaughter-house an exclusive monopoly in a particular district. Consider another quote from Justice Field taken from the case that described what the legislature had done back then to grant the monopoly.
"It created a corporation, and gave to it an exclusive right for 25 years to keep, within an area of 1,145 square miles, a place where alone animals intended for slaughter could be landed and sheltered, and where alone they could be slaughtered and their meat prepared for market. It is difficult to understand how a district embracing a population of a quarter of a million, any conditions of health can require that the preparation of animal food should be entrusted to a single corporation for 25 years, or how in a district of such extent there can be only one place in which animals can, with safety to the public health, be sheltered and slaughtered. In the grant of these exclusive privileges a monopoly of an ordinary employment and business was created..... In this country it has seldom been held, and in never so odious a form as is here claimed, that an entire trade and business could be taken from citizens and vested in a single corporation."(10)
The 1990 case was the first case where a wage earner had brought constitutional challenges before the courts against the income tax. He was convicted of criminal tax charges in the Federal District Court, and his constitutional challenges were rejected by the Circuit Court. The Supreme Court reversed his conviction on the statutory ground of willfulness, but two justices dissented, and these two dissenting justices reflect the spirit of today's courts at both the federal and state levels.
"That being so, it is incomprehensible to me how, in this day, more than 70 years after the institution of our present federal tax system with the passage of the Income Tax Act of 1913, 38 Stat. 166, any taxpayer of competent mentality can assert his defense to charges of statutory willfulness the proposition that the wages he receives for his labor is not income, irrespective of a cult that says otherwise and advises the gullible to resist income tax collections."(11)
The question is not whether wages are income, but whether or not wages are a type of income can that can be taxed pursuant to the 16th amendment. Since taxing the workers' wages gives the politicians the power to direct and receive the fruits of the workers' labor, then wages cannot be lawfully taxed, since such taxation imposes the status of slavery upon the workers and this violates the 13th amendment. However, since the people's labor yields a harvest of well over one trillion dollars per year, you probably won't find a judge in any court that will recognize or acknowledge this argument. They have embraced Mammon as their god.
What happened back in the 1930's is significant, for the way the law operated upon the people changed without altering the Constitution by amendment to make the expansion of federal power legal. The press was full of articles and editorials back then that exposed the constitutional violations, the attack upon the Supreme Court because it would not cloak the constitutional violations with its decisions, and the subsequent packing of the Supreme Court as justices died and retired. What happened back then with the courts was best summed up by Sterling Edmunds of the St. Louis Bar, who witnessed the implementation of the New Deal.
"Practically every one of President Roosevelt's laws that was declared unconstitutional by the Supreme Court that he found on taking office in 1932, has been resubmitted and passed by a continuing docile Congress, with a mere change of form or name. And all that have been challenged by citizens and reached the newly-reconstituted Court have been pronounced constitutional."(12)
The most significant thing that happened during this massive expansion of federal power was the surrender of Congress of its powers to the Executive branch. This was all openly reported back then in the press and the Supreme Court unanimously stated that the Congress cannot surrender its legislative powers to the Executive without amending the Constitution.
"The Congress is not permitted to abdicate or transfer to others the essential legislative functions with which it is thus vested."(13)
I have four binders of editorials and articles from this period. Today, the members of Congress only write around 10% of the legislation they pass. Most of the laws they pass are written outside of Congress. The congressional representative then merely "sponsors" the legislation and introduces it. This is also a common practice in state legislatures. Even though the Constitution has never been amended to give the Executive branch of government legislative powers, most of the laws we have on the books today are Executive legislation passed by the federal and state legislatures.
In 1939, the disciples of slavery further enhanced their power with the Public Salary Tax Act of 1939 and the Supreme Court decision of O'Malley v. Woodrough. The Public Salary Tax Act expanded the income taxing powers to include all government officers and employees. This is absurd, since people who work for the government are paid with tax money. How does taxing tax money produce any additional revenue? It's like a cow burping up a cud and chewing on it. The disciples' intent is obvious on this one. All must be made to think that they have a legal duty to file and pay income tax on their labor, even if such taxation produces no revenue. O'Malley v. Woodrough held that the income tax can tax the salaries of judges, even though every judicial decision for a century-and-a-half up to this point held otherwise. This decision destroyed the force of Article III, Section 1 of the Constitution which guaranteed that judges would receive their compensation in an undiminished fashion. After all, we are looking at taxing tax money again. There is no production of revenue in taxing the salaries of judges, so the disciples' intent is to destroy the independence of the judges by hanging the same enslaving club over their heads that operates upon the people.
The Declaration of Independence is dead - you have no inalienable rights any more. The Constitution is dead, even though we are led to believe that is a "living and breathing" Constitution. What lives and breathes are the disciples of slavery, not the Constitution.
"The reason why I lost my lamp was that the thief was superior to me in vigilance. He paid, however, this price for the lamp, that in exchange for it he consented to become a thief: in exchange for it, to become faithless."(14)
After studying Benton McMillin's income tax article, I knew that there had to be a period in history where the income tax was perverted to start taxing the labor of workers. Before the 1930's, it wasn't the government's business where you worked or how much you were paid for your labor. Before the New Deal of the 1930's workers received their pay in cash in a pay envelope with no deductions. This is the most important thing to take note of. The Social Security Act of 1935 gave the disciples of slavery their first footing on the people's labor by taxing their labor at 1% starting in 1937. The power the disciples desired was direct access to the payrolls of all workers. We have gone from a government that respected free labor to one that wants to know about every dollar you earn and where it came from, and if you dare to be disobedient to the disciples' power and withhold this information from them, you are labeled as a "tax protestor." You are also subject to liens, property seizures and criminal penalties. The government could collect all the money it wanted by taxing people as consumers. This way workers would pay their taxes when they spent their money. But this type of tax system would not allow the disciples of slavery to determine the workers' allowances and force the workers to be "responsible" in accordance with the disciples' laws. The power to tax is a controlling power, and it can also destroy. So why do the disciples continually cry out that social security must be preserved at all costs? Simple - social security has become the foundation of their power over the labor of workers in the American Realm, and what better tools can be found to make this enslaving system appear righteous than the children and the elderly. With his thought in mind, let us go on to the next chapter.
"The man on horseback, ascending triumphantly to office on the steps of constitutional process, demands and threatens the parliament into the delegation of its sacred power. Then follows consolidation of authority through powerful propaganda in the pay of the state to transform the mentality of the people. Resentment of criticism, denunciation of all oppositions, moral terrorization, all follow in sequence. The last scene is the suppression of freedom. Liberty dies of the water from her own well - free speech - poisoned by untruth. In the Epilogue the dreams of those who saw Utopia are shattered and the people find they are marching backwards toward the Middle Ages - as regimented men." Herbert Hoover, 1934
1. The Saturday Evening Post, The Income Tax, by Benton McMillin; May
17, 1913, pg. 6
2. Ibid., pg. 53
3. The Saturday Evening Post Editorial, Guessing at Incomes, by
George Lorimer; June 21, 1913, pg. 22
4. The Saturday Evening Post, The Income Tax, by Benton McMillin, May
17, 1913, pg. 54
5. Ezekiel 7:19
6. Addresses Upon The American Road, pg. 9
7. Ibid., pg. 16
8. Revelation 13:16-17
9. Butcher's Union Live-Stock & Landing Co. v. Crescent City
Live-Stock & Landing Co., 111U.S. 746, S. Ct. Rptr., pg. 661
10. Ibid., pp. 659-61
11. Cheek v. U.S., 498 U.S. 112, 209-10
12. The Roosevelt Coup D'Etat, by Sterling E. Edmunds; Gospel
Ministries Publications, Boise, Id., pg. 25 (originally printed in 1940)
13. A.L.A. Schechter Poultry Corp. v. U.S., 295 U.S. 495, 529
14. The Golden Sayings of Epictetus; Harvard Classics, P.F. Collier
& Son Corp., 1937, pg. 120
"Of all powers, the last to be entrusted to the multitude of men is that of determining what questions shall be discussed. The greatest truths are often the most unpopular and exasperating; and were they to be denied discussion, till the many should be ready to accept them, they would never establish themselves in the general mind. The progress of society depends on nothing more than on the exposure of time-sanctioned abuses, which cannot be touched without offending the multitudes, than on the promulgation of principles, which are in advance of public sentiment and practice and which are consequently at war with the habits, prejudices, and immediate interests of large classes of the community. Of consequence, the multitude, if once allowed to dictate or proscribe subjects of discussion, would strike society with spiritual blindness and death. The world is to be carried forward by truth, which at first offends, which wins its way by degrees, which the many hate, and would rejoice to crush. The right of free discussion is, therefore, to be guarded by the friends of mankind with peculiar jealousy. It is at once the most sacred and most endangered of all our rights. He who would rob his neighbor of it should have a mark set on him as the worst enemy of freedom." William E. Channing, from his work entitled The Abolitionist, 1836.
"That it will have this tendency may be expected, and for that reason I feel an urgency to note what I deem an error in it, the more requiring notice as your opinion is strengthened by that of many others. You seem to consider the judges as the ultimate arbiters of all constitutional questions - a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy. Our judges are as honest as other men, and not more so. They have, with others, the same passions for party, for power, and the privilege of their corps." Thomas Jefferson, 1820