"The Treasury answered, “The actual creation of money always involves an extension of credit by private commercial banks.” John B. Hendrickson Specialist in Price Economics Congressional Research Service and Library of Congress stated: “Money is created when loans are issued and debts incurred; money is extinguished when loans are repaid.” Anyone who has ever borrowed from a bank knows that when interest is added to your loan your debt has grown but your money supply has not.When he wrote back to ask “If all money is created as interest-bearing loans how is the money created to pay the interest on the loans?”, the Treasury answered: “The money that one borrower uses to pay interest on a loan has been created somewhere else in the economy by another loan.”
Together with Gregory K. Soderberg, Byron Dale sued the Federal Reserve Bank in Minneapolis in a small claims court.
"When they filed their claim they were told that they could not file the claim because the Federal Reserve Bank of Minneapolis was part of the government and one can’t sue the government. They told the clerk, “We understand that one can’t sue the government but we believe the Federal Reserve Bank of Minneapolis is a private bank. However, we don’t want to argue with you. If you will be kind enough to file the case, if we’re wrong and they send it back saying it can’t be filed, we will come back and pick up our papers. If we’re right, they will file the case and set a hearing date.” They were right. A date was set. A Federal Reserve attorney showed up and testified that the Federal Reserve banks are privately owned banks."Byron Dale proposes something that is somewhat different to the standard view that we simple need to replace the current debt-based money system by debt free money. He argues that an optimal way to get debt free money into the system is to use newly created money to directly pay for building the transport infrastructure that is essential for the economy. He does this because this is something that is a constitutional responsability of the US government.
It's pretty close to my own suggestion that debt free money should be spent into the economy by the government for projects that receive the approval of 90% of the population since building and maintaining the road system is just one of the many activities that everyone would support.
Great stuff! If you want to see Byron Dale in action, I can thoroughly recommend his lecture at last year's Public Banking Institut Conference that you can watch on Youtube. He's down to earth, very funny, touching, and has spent 30 years fighting the system. He's been in jail four times for his beliefs.
We need more people like him.