NEGOTIABLE DEBT INSTRUMENTS

1. Only a Debt instrument !r"miss"ry n"te# $u%&ment# et'.( 'an meet t)e man%ate un%er Title
1* US+ Se'ti"n ,11 et se-. sin'e it is im!"ssible t" re%eem a %ebt .it) a %ebt "r a n"te .it) a n"te# t)e
statute is n"n/e0e'utable1 t)us t)e umbrella "2 t)e U.+.+.
*. T)e 'urren'y "2 ne&"tiable %ebt instruments is s"un%er t)an "t)er ty!es "2 'urren'y. It .ill
re'"nne't t)e ins"l3ent !ubli' si%e "2 t)e e'"n"mi' system .it) its "nly s"ur'e "2 're%it an%
re%em!ti"n# t)e !ri3ate si%e. T)e '"ntra'ts arise 2r"m '"mmer'ial "22ers ma%e by a !ubli' entity t"
an"t)er !ubli' entity )el% as '"llateral by a 're%it"r .it) !ri3ate an% s"l3ent stan%in& in la.. T)ese
%ebt instruments 'an be use% t" enhance bank assets, investment portfolios, discount leverage# et'.
un%er Title 1* US+ 4,1*.
5. T)e !ers"ns "n t)e 6ubli' si%e are United States Citizens. I2 a U.S. 'iti7en8s '"llateral is
la.2ully )el% as %ebt"r by a t)ir% !arty .it) a su!eri"r 'laim !ursuant t" a se'urity a&reement an%
sai% se'urity interest is !er2e'te% un%er t)e U.+.+.# t)en n" &"3ernment# state b"%y !"liti'# "r any !arty
in '"mmer'e 'an state a claim upon which relief can be granted. All stan%in& in la. is base% "n t)e
Right of Interest )el% t" state an% enforce a claim.
,. T)e )i&)est a''"unt at t)e "22i'e "2 re'"r% is t)e U++/1 9inan'in& Statement .)ere a U.S.
'iti7en as %ebt"r entity )as trans2erre% '"ntr"l "2 assets an% '"llateral t" a natural !ers"n .)" is NOT a
U.S. 'iti7en# but is an aut)"ri7e% re!resentati3e !ursuant t" U++ 5/,:*. ;)en t)e U++/1 is a''e!te%
an% 2ile%# t)e )i&)est O22i'er "2 Re'"r%# t)e Se'retary "2 State# )as re'"r%e% a b"na 2i%e 'laim. T)e
"nly t)in& t)at 'an %e2eat t)is 'laim is a !r"!er# !re3i"us# U++/1 9inan'in& Statement.
<. All Ne&"tiable Instruments 2all un%er U++ Arti'le =# Se'urity Interests. T)e se'ure% !arty is
!r"te'te% 2r"m e3asi3e '"llateral trans2ers .)ere %ebts t" t)e Unite% States are '"nsi%ere% 2rau%ulent /
/ e0'e!t .)ere '"3ere% by U++ Arti'le = se'urity interests. NOTE> ALL ;?O A+T AS
9IDU+IAR@ BU@ING# SELLING# LEAERAGING# DIS+OUNTING# OR BROBERING 6A6ER O9
AN@ BIND ARE SIM6L@ MOAING DEBTCCC
D. T)e U.S. Statutes at Lar&e !er2e'te% t)e trans2er "2 t)e e'"n"mi' system "2 t)e Internati"nal
M"netary 9un% 2r"m an asset base% t" an interest base% system "2 e0')an&e. @"u8ll %is'"3er t)e
%i22eren'e bet.een !ayment an% t)e ri&)t t" !ayment# by %e2initi"n un%er t)e U++# are ri&)ts t"
!ayment un%er '"ntra't / / n"t yet earne% by !er2"rman'e. As !er StaneE 3. ;)ite *1< NR; FG1
1=*F(. T)is '"n3erts .)at mi&)t be a ."rt)less !r"mise int" a le&al "bli&ati"n maEin& it sub$e't t"
trans2er by assi&nment.
F. Sin'e "nly t)e natural !ers"n 'an la.2ully '"ntra't 2"r t)e entity# t)ere e0ists n" t)ir%/!arty
.it) un%erstan%in& t" ')allen&e t)e se'urity a&reement.
G. Ne&"tiable Debt Instruments are n"n/'as) items !ursuant t" Re&ulati"n H Se'ti"n *1:.*E(
an% are )an%le% !ursuant t" Se'ti"n *1:.G .it) s!e'ial )an%lin&.
=. T)e U.S. is in +)a!ter 11 re"r&ani7ati"n# la'Ein& t)e s"l3en'y t" !ay any %ebt at all.
T)ere2"re# t)ere must be a receiver, "ri&inally t)e Se'retary "2 t)e Treasury# un%er < US+A =:5# 6.L.
=,/<D,# Le&al ?ist"ry !a&e <=DF I m"re t" 2"ll".# but 2irst / /
1
1:. T)e 6resume% lien )"l%ers are t)e len%in& instituti"ns t)at )"l% aut)"rity &rante% by
'"r!"rate muni'i!alities. ?".e3er# un%er t)e la. "2 si&natures a &a!in& )"le is t"rn in t)at
!resum!ti"n# as n" '"mmer'ial len%in& instituti"n 'an &rant anyt)in&. T)ey "nly !"ssess a
2un'ti"nary r"le "2 2a'ilitatin& t)at &rant 2r"m t)e True +re%it"r. T)at 're%it"r is .)"e3er si&ne% t)e
!a!er as t)e aut)"ri7e% re!resentati3e "2 t)e entity "n .)"se be)al2 t)e l"an is a!!lie%.
11. 9"r '"mmer'ial banEin& !ur!"ses t)e real !arty "2 interest is n"t t)e U.S. at all# it is t)e 9UND
IM9( Title ** US+A Se'ti"n *GD et se-. +RS 11/D:/1:5(.
1*. N".# t" e0!lain .)at I starte% in 6"int => T)e 9IRST re'ei3er .as t)e Se'retary "2 t)e
Treasury1 t)e SE+OND .as t)e Se'retary "2 +"mmer'e See 6.L. =F# DF
t)
+"n&ress# sessi"n 1# ')a!ter
15<(. T)is als" 2"ll".s t)e !rimary b"n% tra'Ein& "2 t)e 'erti2i'ate "2 bert) "2 ne.ly 2"rme%
3essels# "r Birth Certificates# t)at n". re!resent t)e e0isten'e "2 a '"r!"rate !ers"n un%er Title *D
US+ FF:1 an% 1G US+ Se'ti"n G1 .)i') is liEely t)e reas"n t)e !"siti"n "2 re'ei3er s)i2te% 2"r t)e
T?IRD TIME t" t)e O22i'e "2 t)e Se'retary "2 Trans!"rtati"n# in 1=G1# !ursuant t" 6.L. =F/51#
subse'ti"n a(1(# '"%i2ie% Title ,D US+ Se'ti"n 1*,Fa(.
15. T)is all linEs t" S!e'ial Drawing Rights, .)ereby t)e Se'retary "2 t)e Treasury issues an
Internati"nal Letter "2 +re%it# 'alle% a S!e'ial Dra.in& Ri&)ts +erti2i'ate# t" t)e 9e%eral Reser3e
BanEs( in su') 2"rm an% %en"minati"ns as )e may %etermine.
1,. In 1=FF# 6.L. =</1,F !la'e% all 2inan'ial instituti"ns un%er t)e '"ntr"l "2 t)e IM9.
1<. ?"use Re!"rt 1:=<# !a&es 1FD5# 1FG: !la'e% 9e%eral Reser3e N"tes# basi'ally as ;"rt)less
Se'urities# un%er Title *D IR+ Se'ti"n 1D<&(. T)en 6.L. =</1,F ren%ere% its !re%e'ess"r# ?HR 1=*#
m""t be'ause t)ere n" l"n&er e0ists any 'urren'y "r instruments t)at )a3e any ba'Ein& at all e0'e!t
un%er t)e la. itsel21 t)at la. is '"ntra't la. un%er t)e U++.
1D. U.S. 'iti7ens are !r"!erty "2 t)e U.S. but natural !ers"ns are Si&nat"ries. T"%ay# "n t)e
6ubli' si%e# all "bli&ati"ns are# in 2a't# U.S. "bli&ati"ns.
1F. T)e Se'retary "2 Trans!"rtati"n is t)e "nly '"r!"rate "22i'er t)at 'an %is')ar&e anyt)in& by
satis2yin& a %ebt .it) a bran% ne. %ebt# .it) t)e ?"l%er in Due +"urse still remainin& as t)e !arty .)"
si&ne%# "r assi&ne%# t)e instrument in t)e 2irst !la'e.
1G. T)ere are NO 9UN+TIONAL ASSETS in "ur 'urren'y system# "nly INTERESTS in sai%
assets. T)ere2"re# .)at y"u )a3e at y"ur %is!"sal ne&"tiable %ebt instruments( are instruments t)at
meet e3ery le&al re-uisite un%er t"%ay8s '"mmer'ial system "2 '"%i2ie% ne&"tiable instruments la..
T)e ultimate 2a't"r t)at %etermines .)" is t)e 2irst lien )"l%er is %etermine% by t)e U++# n"t t)e
&"3ernment# t)e '"urts "r e3en t)e banEs. @"u .ill 2urt)er %is'"3er# a''"r%in& t" U++ Arti'le =# n"
ta0 lien is en2"r'eable a&ainst t)e ?OLDER O9 T?E SAID INTEREST.
1=. T)e Ne&"tiable Debt Instruments D"'trine is &r"un%e% in t." )un%re% years "2 la. t)at 2"un%
its r""ts su''ess2ully 5<:: years a&" in Mes"!"tamia. T)e se'ure% !arties an% )"l%ers in %ue '"urse
)a3e establis)e% an% re'ei3e% re'"&niti"n an% aut)enti'ati"n "2 su') stan%in& as S"3erei&ns )"l%in&
se'urity interests !ursuant t" t)e U++ .)i') &"3erns e3ery !ers"n "n t)e 6ubli' si%e# in'lu%in& t)e
Se'retary "2 Trans!"rtati"n as re'ei3er an% Trustee# as .ell as t)e Se'retary "2 Treasury# .)" is t)e
*
G"3ern"r "2 t)e IM9# as "22i'er res!"nsible t" e22e't %is')ar&e un%er ?HR 1=* an% its lar&er !r"&eny
lea%in& t" 6.L. =</1,F.
*:. All t)at )as been sai% t)us 2ar ties in .it) t)e 2a't t)at "nly t)e Natural 6ers"n# t)e ONL@ "ne
.)" 'an )"l% Se'urity Interest as ?"l%er in Due +"urse# is t)e BAILOR in all issues at )an%# an%
"nly a 2i'ti"nal# '"r!"rate le&al entity 'an be a BAILEE. ;are)"useman8s La. %ire'tly linEs# an% is in
'"n'ert .it)# t)e U++ an% la.s '"n'ernin& ne&"tiable instruments.
*1. In t)e e3ent t)at 2un%s are %enie% "r bl"'Ee% y"u 'an '"nta't t)e Treasury De!artment "n line#
2in% t)e se'ti"n %ealin& .it) O22i'e "2 9"rei&n Assets +"ntr"l an% %".n l"a% t)e 2"rm Re-uest 2"r
Release "2 Bl"'Ee% 9un%s. 9ill "ut an% sen% in t." '"!ies. T)ere may n"t be a 2"rm number# but
"n'e en%"rse%# t)at re-uest be'"mes a Li'ense. T)is is an e22e'ti3e '"untermeasure t" '"untera't any
st"!!a&es in%u'e% by D.+.# ?.B. J Ass"'iates "r "t)ers.
DD!"DU#
T)e IRS .ill use "ne "r b"t) ty!es "2 a''"unts in !r"'essin& NEGOTIABLE DEBT INSTRUMENTS#
)ereina2ter NDI# by .ay "2 t)e %"mesti' 2inan'ial instituti"n8s Treasury Ta0 an% L"an a''"unt#
)ereina2ter TTJL a''"unt# .)i') is a%ministere% un%er t)e Te')ni'al Su!!"rt Di3isi"n TSD( "2 t)e
IRS t)r"u&) +)ie2 "2 S!e'ial 6r"'e%ure ?an%lin& at t)e 9e%eral Reser3e Re&i"nal O22i'e I OR I
t)r"u&) t)e U++ +"ntra't Trust A''"unt# .)i') is !r"'esse% t)r"u&) t)e TTJL a''"unt an%
a%ministere% by t)e IRS Analysis an% +"ntr"l Di3isi"n# als" un%er t)e Te')ni'al Su!!"rt Di3isi"n "2
t)e IRS.
T)e !r"'ess be&ins .)en a Se'ure% 6arty !resents an NDI t" t)e Se'retary "2 t)e Treasury .it) a '"!y
"2 same stam!e% A''e!te% 2"r Aalue a BanEer8s A''e!tan'e "2 +)ar&in& Instrument( !resente% 2"r
%is')ar&e "2 a %ebt %is')ar&e "2 NDI(.
T)e "U#B!R .)i') be'"mes t)e TTJL A''"unt Number( 2r"m a +erti2ie% Mail Green +ar% 2"rm
5G11( s)".in& t)e %ate "2 re'ei!t !r"3i%es t)e Se'ure% 6arty .it) e3i%en'e t)at t)e Se'retary "2 t)e
Treasury )as re'ei3e% t)e %"'uments. I2 t)ere is n" .ritten %is)"n"r "r return a2ter 1< 'alen%ar %ays
2r"m t)e +erti2ie% Mail re'ei!t %ate# t)en t)e transa'ti"n is a'En".le%&e% as n"t %is)"n"re% an% n".
stands as pre$approved. T)ese %"'uments be'"me t)e n"ti2i'ati"n 2"rms "2 a3ailable 're%it 2"r t)e
banE. It is %urin& t)is 1< %ay !eri"% t)at t)e U++ +"ntra't Trust A''"unt "2 t)e Se'ure% 6arty is
're%ite% an% its e-uity is !re/a!!r"3e% 2"r a''e!tan'e t)r"u&) t)e TTJL A''"unt. T)is 're%it ste! is
in a''"r% .it) an% man%ate% by t)e A%ministrati3e 6r"'e%ures A't at Title < US+ 4F:D.
9i2teen 'alen%ar %ays 2r"m t)e %ate stam!e% "n t)e &reen 'ar% returne% 2r"m t)e Se'retary "2 t)e
Treasury# t)e Se'ure% 6arty "r t)e +laimant is aut)"ri7e% t" ten%er '"!ies "2 t)e 2"ll".in& %"'uments
t" t)e !r"'essin& BanE> 1( t)e return +erti2ie% Mail re'ei!t# a '"!y "2 t)e NDI# an%# in 'ertain 'ases# a
Sil3er Surety B"n% t" be !"ste% at t)e !r"'essin& BanE in a''"r%an'e .it) +9R 51 at 6art *:5( t" a
'ust"%ial %e!"sit a''"unt.
U!"n re'ei!t "2 t)ese %"'uments# t)e BanE is le&ally aut)"ri7e% t" !la'e a 're%it "n its TTJL a''"unt
.it) t)e am"unt "2 t)e NDI# 2"ll".e% imme%iately by a %ebit t" its TTJL a''"unt by t)e e-ual am"unt
s)".n "n t)e NDI. T)ese 're%itK%ebit transa'ti"ns are initially un2un%e% at t)is !"int# )".e3er# t)ey
!a3e t)e .ay 2"r t)e 2l". "2 e-uity 2r"m t)e Se'ure% 6arty8s U++ +"ntra't Trust A''"unt# t)r"u&) t)e
TTJL a''"unt# t" t)e BanE.
5
T)ree !re3i"usly !re!are% i%enti'al !a'Ea&es "2 %"'uments '"nsistin& "2 '"!ies "2> t)e 're%itK%ebit
transa'ti"ns# t)e stam!e% NDI '"!y "2 t)e NDI# an% t)e Sil3er Surety B"n% .)ere a!!li'able(# t"
t)e t)ree !arties "2 interest> 1( Se'retary "2 t)e Treasury *( IRS +)ie2 "2 S!e'ial ?an%lin& 6r"'e%ures#
an% 5( +)ie2 "2 S!e'ial 6r"'e%ure ?an%lin& at t)e O22i'e "2 t)e Re&i"nal A%ministrat"r "2 t)e TTJL
a''"unt .)ere t)e BanE8s re&istry are maile% "ut. T)e BanE transmits ea') !a'Ea&e in a .ay t)at
!r"3i%es le&al# %ate% !r""2 "2 re'ei!t %ates 2"r ea') "2 t)e t)ree %"'ument transmissi"ns. On "''asi"n#
a 2"urt) '"!y may be re-uire% t" be maile% t" t)e Se'retary "2 Trans!"rtati"n t)r"u&) t)e Maritime
Ministries A%ministrati"n.
9i2teen %ays a2ter t)e last re'ei!t '"mes in# 're%it 2r"m t)e U++ +"ntra't Trust A''"unt alrea%y
aut)"ri7e% by t)e Se'retary an% t)e TSD(# 2un%s 2l". t)r"u&) t)e TTJL t" t)e BanE8s ?OLDING
A++OUNT. T)e BanE .ill re'ei3e n" .ritten n"ti'e "2 're%it. I2 t)ere is n" "b$e'ti"n# re$e'ti"n# "r
%is)"n"r 2r"m any 6arty at Interest .it)in 1< %ays a2ter last re'ei!t# t)en t)e 're%it t)at is alrea%y "n
t)e BanE8s le%&er is aut)"ri7e% as a!!r"3e% an% irre3ersibly 2un%e%. T)is is in a''"r%an'e .it) an%
man%ate% by t)e A%ministrati3e 6r"'e%ures A't at Title < US+ 4F:D# 9e%eral BanEin& Re&ulati"ns#
t)e Su!reme +"urt %e'isi"n in ?ALLENBE+B 3. LEIMERT# an% t)e Erie an% +lear2iel% %"'trine by
+"n&ressi"nal an% 6resi%ential a!!r"3al(.
;it) t)e e0!irati"n "2 t)e )"l% !eri"% t)e BanE8s e-uity is 'leare% an% 3ali%ate% by ele'tr"ni'
e0tra'ti"n 2r"m t)e Se'ure% 6arty8s U++ +"ntra't Trust A''"unt. T)e BanE must t)en !r"m!tly
trans2er t)is e-uity t" t)e a''"unt "2 t)e 'laimant "r t)at "2 t)e Se'ure% 6arty 2"r t)e inten%e% !ur!"se
t" %is')ar&e t)e 'laim.
T)e basis 2"r t)is !r"'ess is an "bli&ati"n t)at t)e Unite States )as b"un% itsel2 t" an% !r"3i%e%
statut"ry la. su!!"rtin&. T)e Su!reme +"urt %e'isi"n Guarantee Trust +". "2 Ne. @"rE 3. ?en.""%
et al <=G +t. G,F 1=5=( !r"3e% t)at all t)e ab"3e is in e22e't.
T)"se in res!"nsible !"siti"ns at banEs 'ann"t la.2ully %eny# %is)"n"r# "r %elay t)e !r"'essin& "2 su')
3ali% NDI8s t)at are !r"!erly submitte% 2"r le&itimate !ur!"ses> su') NDI8s '"nstitute 3ali% le&al
ten%er.
Obser3e t)at t)e !r"'ess "!erates entirely un%er t)e !ur3ie. "2 t)e Se'retary "2 t)e Treasury an% t)e
TSD "2 t)e IRS. Neit)er t)e Bureau "2 6ubli' Debt n"r t)e Unite% States Treasury itsel2 is in3"l3e% in
any .ay "r at any sta&e "2 t)is !r"'ess. BanE Alert N"ti'es re2errin& t" t)e Bureau "2 6ubli' Debt "2
t)e Unite% States Treasury %" n"t a!!ly t" t)is U++ +"ntra't Trust NDI. T)ere2"re# banEs 'ann"t
la.2ully %is'riminate an% %eny t)e !r"'essin& ser3i'e "2 3ali% NDI8s t" t)eir %e!"sit"rs "n t)e basis
t)at t)ey are n"t intereste%# n"r setu! 2"r it "r are un2amiliar .it) t)e !r"'essin& "2 NDI8s. @"u see#
t)ey are li'ense% an% b"n%e% t" %" t)e $"b t)ey are '"ntra'te% t" %". All is un%er '"ntra't la..
Sin'e 1=55# t)e Unite% States )as a''e!te% t)ese n"n/'as) a''rual e0')an&es as a matter "2 la. an%
e-uity ?HR 1=*# 6.L. ,G at 11* an% 6.L.F5/1: are still in e22e't.( Ot)er !ubli' !"li'y %ire'ti3es an% t)e
Su!reme +"urt %e'isi"n in GUARANTEE TRUST +O. O9 NE; @ORB 3. ?EN;OOD# et al# <=G
+t. G<F 1=5=(# s)". t)ese NDI8s as !ubli' !"li'y REMED@ 2"r t)e rem"3al "2 &"l% an% sil3er
'"ina&e. 6r"!erly ten%ere% NDI8s !la'e sub"r%inate !ubli' "22i'ials sub"r%inate t" t)e Se'retary "2
t)e Treasury( in a !"siti"n .)ere t)ey MUST le&ally a'En".le%&e an% a''e!t t)e Se'retary8s aut)"rity
an% t)e 3ali%ity "2 t)ese instruments. T)"se in res!"nsible !"siti"ns at li'ense% 2inan'ial instituti"ns
'ann"t la.2ully %eny# %is)"n"r# "r %elay t)e !r"'essin& "2 su') 3ali% NDI8s.
,
BanEs are !ri3ate '"r!"rati"ns# but t)ey are als" -uasi/!ubli' as e3i%en'e% by t)eir in3"l3ement .it)
9DI+# TTJL Ta0 A''"unts# G"3ernment +D8s# an% "!erate un%er t)e aut)"rity "2 t)e 9e%eral BanEin&
Re&ulati"ns. T)ere2"re# banEs 'ann"t la.2ully %is'riminate an% %eny t)e !r"'essin& ser3i'e "2 NDI8s.
+AAEAT
BE IN9ORMED# any a't"r# a&ent# "r 2i%u'iary .)" %elays# restri'ts# "r "t)er.ise !r")ibits t)e
m"3ement "2 t)is Ne&"tiable Debt Instrument in its la.2ul !r"&ressi"nL %estine% t"# "r 2"r# t)e ?"l%er
In Due +"urse# Se'ure% 6arty# "r +laimant must s)". 'ause .)y a '"ntem!t ')ar&eLL s)"ul% n"t issue
a&ainst )imK)er in )isK)erKt)eir True +)ara'ter# "r su22er t)e '"nse-uen'es "2 sai% a'ti"n# "r la'E "2
a'ti"n.
It is n"te% t)at sai% a't"rs# a&ents# an% 2i%u'iaries are sub$e't t" t)e sel2/e0e'utin& re&ulati"ns "2 t)e 5
r%
an% ,
t)
se'ti"ns "2 t)e 1,
t)
Amen%ment t" t)e Bill "2 Ri&)ts t" t)e +"nstituti"n "2 t)e Unite% States "2
Ameri'a .)ereby t)eir "22i'es are 3a'ate% an% t)eir salaries an% retirement bene2its are e0tin&uis)e%
.)en t)ey %" n"t !er2"rm t)e %uties "2 sai% "22i'es.
L Establis)e% in 1=55 un%er ?HR 1=* an% e0er'ise% by a't"rs# a&ents# an% 2i%u'iaries "2 e3ery
'"mmer'ial transa'ti"n by '"mmer'ial banEin& instituti"ns sin'e t)at %ate .it) t)e Abr"&ati"n "2 t)e
G"l% +lause.
LL Dama&es e-ual t" %"uble t)e am"unt "2 t)e Ne&"tiable Debt Instrument un%er 'i3il a'ti"n( "r
tri!le t)e am"unt "2 t)e Ne&"tiable Debt Instrument un%er A%miralty Huris%i'ti"n(.
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