1913. It was the year everything changed. In his book ‘Freedom Shift‘, Oliver DeMille explained how nations go through what he calls world shifts. He explained that these shifts either put a nation on a path towards more freedom through a freedom shift, or towards more oppression through a force shift.
In that book he mentioned that the last shift, a force shift, started in 1913 and he gave a brief explanation on why. In his latest book ‘1913’ he spells out in more detail just what it was that happened, and why these events have had such on huge impact on our lives today.
What I love about this book is that it is not a doomsday book forecasting our downfall, but a lesson in history intended to educate us about the principles of freedom and why they are so important. Not only is it a lesson on history, but it maps out a plan for our future. By showing where everything went wrong and why he sets us up for his plan to restore freedom, which he goes through in the second half. He gives a road map to making sure the next shift we experience is a freedom shift and not another force shift.
There are four events that he goes through in the book that led us to where we are today. These four events have influenced every decision and every law that has been passed in the last 100 years. Most people, when they hear the year 1913 mentioned, usually think only of the Federal Reserve as the big event of the year; it was only one in a series. It’s true that it has had a huge impact, and it is included as one of the events he mentions, but did you know there were others? Did you know that it was the other events, compounded with the Federal Reserve, that helped lead to much of the corruption and problems we see today?
The year was 1913 and 3 events took place that year, followed by a 4th in 1936 that undid the checks and balances that were put in place on the US government to limit its power and protect its people.
EVENT #1
The first event, unknown as a problem to most people, was the ratification of the Sixteenth Amendment to the Constitution of the United States on February 3rd, 1913. Oliver DeMille explains how this amendment removed a vital check on the growth of the government and its powers.
Before this amendment, the federal government got a large portion of its tax money directly from the state governments as outlined in the Constitution. This created a natural check on the federal government by the states because Washington depended on the states for its funding. Washington would have no recourse if the states were to refuse to fund the budget. It could argue, vote, issue executive orders, and deliver Supreme Court decisions, but if the states stood firm together, the federal government would eventually have to give in to the states or lose its funding.
DeMille explains many reason why this is a problem, but one of the main reasons is due to the differences of direct and indirect taxation. An example of direct taxation would be income taxes, where the money goes directly from those being taxed to the government that would spend those taxes. Sales taxes on the other hand are indirect, because it doesn’t go to the government directly from the people, but goes through a business first. Direct taxes creates a conflict of interest of sorts. This is because when the entity spending the taxes is also responsible for its direct collection, it gets to do whatever it wants with it; whatever is in its own interest with nothing to stop it. By having the states collect the taxes from the people before it went to the federal government, it acted as a check on what the federal government can do with it, and stopped it from being able to tax more to fund its pet projects that were not in the people’s best interest.
EVENT #2
The second event that occurred in 1913 was the ratification of the Seventeenth Amendment on May 31st. This amendment removed further checks on the government by removing the state’s representatives from the legislature. Prior to this amendment you had congress elected by the people to represent what the average citizen wanted, and the senate was selected by the states to give them a say in what happened.
The difference in how members were selected in the two governing bodies was a check and balance because of who and what each represented. Essentially, the senators were high class individuals who represented the wealthy. They might want things passed to help themselves and would not have cared so much if it hurt the average american. Congress on the other hand was elected by the people that would want handouts and other things that helped them in order to get their votes; not caring if it hurt the wealthy or businesses only. By having the two separate bodies, the only things that could get passed was those items that helped everyone at the same time.
DeMille gives some great explanations on what makes this amendment such a big problem, going into detail while including historical examples as evidence. I’ll cover what I feel is the main point.
Congress tended to vote for increased spending, while the senate tended to vote against this since they were appointed by the states which had to foot the bill. With the passage of the Seventeenth Amendment, both governing bodies were now elected by the people, and sound financial decisions no longer had a voice. Both houses now voted for increased spending.
Where before you a had Congress in place as a check on the Senate, and the senate in place as a check in Congress, you now essentially had two identical government bodies doing exactly the same thing. At this point you might as well remove one of the houses and save the taxpayers some money. On the other hand, it would be best to repeal the amendment and restore the checks and balances.
This also opened the door to lobbyists and special interest groups like never before. DeMille explains in the book how these people had influence over congress from behind the scenes through the purchase of media institutions, academic organisations, and direct lobbying. They didn’t have influence over the senate due to the type of people who got appointed by the states. Another thing to consider is that with the senators being appointed and not voted in, there was no need to have to pander to lobbyists to get campaign funding. Without the power over the senate, it also reduced their influence over Congress since it wasn’t always worth it to buy votes if it wasn’t going to get them anywhere. Now they just buy the Senate as well as Congress.
EVENT #3
The 3rd of the 4 events is the most recognizable one. It is the one that the average person is now starting to see as a problem, even if they don’t truly understand why. The last event of 1913 was the passage of the Federal Reserve Act on December 23rd.
Oliver DeMille goes into the history of central banks in the US, and how each was overturned because of the problems they caused. In 1913, the US created a 3rd national bank, but called it the Federal Reserve instead of a bank to lower the fears of the Americans who remembered the failures of the previous banks. The Federal Reserve came into play with its official sounding name, even though it was a private institution that made money by printing it out of nothing and getting interest on what the government and banks borrowed.
There is much to be said on the subject, and DeMille covers a lot in the book. The main points I want to discuss is the problem of fiat money and inflation, along with the power it gave the government to basically steal from the poor and middle class without having to raise their taxes.
With the Federal Reserve, money gets printed when someone in charge feels there is a need for it; regardless of whether it’s his need or the need of the whole nation. This means there is now more money in circulation to purchase the same amount of goods. Due to the laws of supply and demand, more money means its value goes down, and the same quantity will purchase less due to higher prices.
It’s important to understand that rising prices is not inflation, as a higher demand for a good can cause prices to increase, or a shortage in supply. Inflation is when the money supply grows, causing the prices of everything to go up higher than the supply and demand of the products would have caused on its own. It is said that the US dollar in 1913 is only worth 4 cents today in regards to what it will buy.
This is a problem; a big problem. This is especially a problem for the poor and middle class in democratic nations. DeMille explains,
… the wealthy classes who know better tend to transfer their fiat currency into gold, silver, gems, land, real estate, stock and other things that are sound (meaning they can be traded for goods and services and that they also have value on their own.) But people in the lower and middle classes often keep their savings in fiat money
Is it any surprise that you see the rich get richer and the poor get poorer in our current system?
Much more can be said about the Federal Reserve, but with that information being readily available I won’t cover it here. The book covers a lot of the complex details and does it in a very simple way that anyone can understand.
Together, these three 1913 events caused an increased desire in Washington to spend, eliminate road blocks to massive spending, and created easier mechanisms for taxing, borrowing, and printing money.
EVENT #4
The last big event Oliver DeMille covers in his book didn’t take place in 1913, but when put together with those events, it has had a huge impact on what happens in the US today; and in turn the world.
This event was the Supreme Court case of ‘United States v. Butler‘ in 1936. DeMille explains how this isn’t the first Supreme Court case that caused the problem, and he goes through other cases that led to the decision in this one. This one just happens to be the key.
Previously in the Constitution, the powers of the government were limited. It could spend money on only the 20 things specifically listed, as well as something that was to the general welfare of the nation. What this case did was redefine the meaning of ‘general’ from its original intent in the constitution. DeMille explains,
Before the Butler case, all federal spending was required to benefit the whole nation equally. After the case, the government could spend money on anything it thought would be “good” for the nation. …the court’s official decision in Butler boldly declared that “…the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.” In other words, Congress can do anything it wants—even if it is not “constitutional”—as long as the court upholds it. Indeed, if the court calls it “constitutional” it is, regardless of what the actual document says.
The courts now hold all the power, which it gave itself in the other cases covered in the book. That is one of the reasons the appointment of the Supreme Court Justices gets so much attention these days. It has a huge impact on what is actually constitutional. They are no longer there to make sure laws are followed as written; they are there to give meaning to the written laws as they wish it to be. That’s why it makes such a big difference today whether the Judge leans towards the Democrats or Republicans, as they have given themselves the power to rule as they see fit and not by what the Constitution says. If there are more Democrat Justices, the rulings will favor the Democrat’s beliefs. If there are more Republican Justices, they will rule in line with Republican beliefs. That is why so many of the big cases are often split between the Justices appointed by the different parties. If they ruled according to the written law, they would agree with each other much more often, but they rule according to their beliefs and what they want.
Today you have many people saying that the government is doing something unconstitutional, when in reality today it is; just not according to the actual constitution.
This last event allows the government to do whatever it wants, regardless of the Constitution, while the first 3 events gave the government the tools to carry out whatever it is.
This briefly covers the first portion of the book; the history lesson. The book goes deeper and explains the reasoning behind it all, giving a lot of historic examples to make its case. The second half should be read by all who value freedom and want it restored, as DeMille draws a road map to what we as a people need to do. Let’s make sure the next world shift is a freedom shift, and not an even greater force shift. As he pointed out in his book ‘Freedom Shift’, we are on the verge of another shift, and it’s time to act.
One of the big lessons in the book wasn’t the history itself, but how it came to pass; and it was through the neglect of the people. People stopped paying attention to what the government did. They stopped reading and studying other than for their own amusement. If we are going to remain free, we have to actually work at it; We have to pick up a book read. We have to pay attention to what is written in the bills that the government is putting forth and speak out when we see a problem. How do you find the time for all that? It’s all in the book!
A great summary of this book is also available as an audio CD, from a talk given by Oliver DeMille called Freedom Matters. It is available through LIFE.
Make no mistake about it – Freedom Matters!
Leadership to Freedom 