Dr. Peter David Beter - Audio Letter No. 61.
"AUDIO LETTER(R)" is a registered trademark of Audio Books,
Inc., a Texas corporation, which originally produced this tape
recording. Reproduced under open license granted by Audio
Books, Inc.


This is the Dr. Beter AUDIO LETTER(R), 1629 K St., NW,
Washington, DC 20006

Hello, my friends, this is Dr. Beter. Today is January 20,
1981, and this is my AUDIO LETTER(R) No. 61.

It's been about a month and a half now since I recorded AUDIO
LETTER No. 60 at the end of November. Beginning with this issue
No. 61, I plan to record my AUDIO LETTER on a slightly more
flexible schedule. I still plan to record a message roughly once
a month, but from now on I want to tie my schedule more to events
and less to the calendar. After all, the AUDIO LETTER is
recording history in the making. Sometimes the end of the month
arrives just as a major story is breaking, either in public or
behind closed doors. From now on when that happens, I may well
delay for a few days to give you a more complete story. On other
occasions it may work the other way, speeding up my AUDIO LETTER
schedule. All of this will have no effect on your subscription.
You will receive all the issues you paid for no matter when they
are released; so I hope that with a more flexible schedule I will
be able to serve you better than ever before because, my friends,
events are building toward a climax.

Since I spoke with you last, the world was shocked, saddened,
and angered by a seemingly senseless murder in New York City.
The victim was the former Beatle and rock star John Lennon.
Lennon was fond of saying that a rock star can say things without
being killed for it; and after five years out of the public eye,
Lennon was going back to work--not because he needed the money
but because he had things to say. But the things he had to say
this time, my friends, would have caused trouble for those who
are maneuvering us into nuclear war; and so a former fan of his
was turned into a psychologically-programmed assassin. This was
done using the techniques I made public over five years ago in
AUDIO LETTER No. 5. And on the eve of his return to public life,
John Lennon was silenced.

My friends, lawless forces are destroying our way of life.
They have spawned a soaring crime rate about which many of you
have written to me asking questions. If you want to understand
how these lawless forces affect you personally, there's a new
book I would like to recommend to you. The author is a highly
respected business consultant, Mr. Fred Muller. His book is
titled: "America's Coming Nightmare Inflation, Economic Collapse,
and Crime Revolution." The price is $10.00 postpaid, and you can
order it directly from:

Fred Muller
P.O. Box 11909, Columbia, SC 29211.

If we sit idly by and let it happen, these forces of
lawlessness will sweep away everything that is dear to us. They
are destroying our money and our economy, robbing us of our
hard-won assets. They are making many fear for their own lives
when they walk the streets; they are perverting our laws, and
corrupting our lawmakers; and they are working night and day to
betray us into the insanity of nuclear war.

But there is something we can do. Last July 1980 I began
answering your questions about what you can do; and because so
many of you have responded with action, I will continue to tell
you more. We are making progress; and if we do not lose heart, I
am convinced that we are going to win.

My three special topics for this AUDIO LETTER are:


Topic #1--Two months ago America was buzzing over the great
surprise landslide in the name of Ronald Reagan. There were all
kinds of upbeat promises to "hit the ground running." But the
transition to a new Administration has actually done just the
opposite. First, the early choices for several Cabinet positions
fell apart. People who had appeared interested suddenly just
backed out. Meanwhile the job of filling lower echelon positions
became even worse. Instead of "hitting the ground running", the
Transition Team was wading through a swamp. Weeks ago the
Transition Team exhausted its Government money and had to start
asking their corporate friends for donations to stay in business.
Puzzled reporters and columnists have been scratching their heads
over it all. Veteran Washington watchers can tell something is
wrong. They can sniff it in the air. And for public
consumption, the so-called "Reagan Team" has tried to blame it
all on the "Ethics in Government Act" of 1978. But, my friends,
that is not the real problem. Something much more far-reaching
is involved. The fact is that the new Administration has been
virtually locked out by the Bolsheviks in bureaucratic power

The symptoms of this unprecedented situation are growing on
all sides. For example, a few days ago on January 12, the New
York Times carried an article with the headline: "CAMPAIGN AIDES
FOR REAGAN FEAR THEY ARE LEFT OUT." The article said, quote:
"The Reagan transition aides now expect to have only about 50
upper-level officials chosen by the time Mr. Reagan is sworn in
on January 20" and this is in connection with, quote "filling of
the 400 jobs considered essential for the control of the
bureaucracy." In other words, my friends, Reagan aides were
saying that the bureaucracy would still be beyond their control
as of today. And one more very significant quote: "To the Reagan
transition staff the current process of filling the hundreds of
jobs below the level of Cabinet officer is perhaps more important
than the filling of the Cabinet positions. The lower level
aides, they said, will be the ones actually carrying out Mr.
Reagan's policies."

My friends, the power struggle for control of the United
States Government is continuing. I outlined that struggle in
AUDIO LETTER No. 59 last October, and in AUDIO LETTER No. 60 I
explained how the Election surprise came about. But as I
mentioned then, that was only a mild setback for the Bolsheviks
entrenched in powerful positions here in Washington.

The real problem which is confronting the alleged Reagan
forces is not in the news. It is a Supreme Court decision which
was quietly engineered by the Bolsheviks here on March 31, 1980.
For the lawyers among my audience, the case is that of Branti vs.
Finkel. The citation is: 445 U.S. 507 (1980).

The case itself was unspectacular at first glance. A newly
appointed Public Defender in the New York County tried to dismiss
two assistants who were leftovers or holdovers from the other
political party; but the assistants filed suit to keep their
jobs. The Supreme Court upheld them in the Branti decision last
March; and in the process, the Court made new law by declaring
that the same principle applies at all government levels,
including federal. That general principle is that governmental
employees cannot be dismissed simply because of their political

The ramifications of this decision are stunning, my friends.
They were spelled out very well in the dissenting opinions under
the names of Justices Powell, Rehnquist, and Stewart. The
dissenting opinions are of many pages long and naturally are
filled with numerous detailed citations and arguments. But let
me read a few quotations to you which speak for themselves,

"The Court today continues the evisceration of patronage

And, quote:

"With scarcely a glance at almost 200 years of American
political tradition, the Court further limits the relevance of
political affiliation to the selection and retention of public
employees. Many public positions previously filled on the basis
of membership in national parties now must be staffed in
accordance with a Constitutionalized Civil Service Standard that
will affect the employment practices of federal, state, and local

And, quote:

"Today's decision is an exercise of judicial law-making."

My friends, almost since the founding of our Republic,
America's political system has depended upon patronage. Without
patronage, your vote means nothing at all. This fact is brought
out in the dissenting opinion of the Supreme Court itself in the
words, quote:

"Elected officials depend upon appointees who hold similar views
to carry out their policies and administer their programs.
Patronage, the right to select key personnel and to reward a
party faithful, serves the public interest by facilitating the
implementation of policies endorsed by the electorate."

Thanks to the Supreme Court Branti decision, the new
Administration is having to take office with a bureaucracy that
is beyond its control. The Bolsheviks entrenched in key
positions nation-wide at all levels of government are immune to
wholesale firing. Instead, they have to be pried loose one by
one based on non-political arguments. Likewise, new appointees
cannot be brought in just because they are Republicans. The
result is a quagmire, a government out of control. The Corporate
Socialists have for the moment succeeded in seizing the White
House under the banner of Ronald Reagan, but it is still the
Bolsheviks who control the Government.

One result will be the opposite of the plans we are hearing
for a "hiring freeze." There will actually be duplicate hiring
under various disguises in order to get around the entrenched
Bolsheviks. That will lead to a mushrooming, inefficient
government, and more government spending, more bureaucracy--not
less. And so, thanks to the little-known Branti decision of the
Supreme Court, the Bolsheviks here still have a stranglehold on
the United States government. The new Administration will try
everything to whittle away at their power; but the Bolsheviks
have no intention of letting themselves be whittled very far.
Before that can happen, they plan to cut short the new
Administration under the name of Ronald Reagan.


Topic #2--For nearly six months now many of you have been joining
me in a preventive war of Truth. Ours is a war to turn aside the
plans for economic collapse, dictatorship, and thermonuclear war.
To do that, we are seizing the chief weapon of our enemies and
turning it against them. That weapon is the GOLD weapon. Those
who have cornered our gold and our money are using it to destroy
our way of life; but their giant GOLD weapon is also their
Achilles' heel, because they have broken laws and they have made
mistakes. They have left a trail. You and I are following that
trail to track them down; and if we will keep at it and not lose
heart, I firmly believe that we are going to win.

As you know, we began our action campaign last summer with
Senator William Proxmire. At that time he was Chairman of the
powerful Senate Banking Committee. He will no longer be Chairman
in the new Congress because of the change from Democrat to
Republican control of the Senate; but Proxmire will remain on the
Committee and he will continue to exercise a great deal of power,
so I want to bring you up to date on our efforts with him.

If you will recall, there were basically two things which we
were asking of Senator Proxmire. Our main request was that he
launch a public, honest investigation into the true status of
America's alleged gold supplies. We specifically asked him not
to just accept the self-serving words of the Treasury Department.
The time is long over due for proof, not words, so we wanted
Senator Proxmire to press for an impartial, independent, complete
physical inventory. Either America's gold is there, or it is not
there; so I urged you to challenge Senator Proxmire to prove Dr.
Beter wrong. But we did not expect Senator Proxmire to do all
that out of a clear blue sky. Any investigation as large as that
must have a starting point; and so as a preliminary step, we gave
him that starting point. We asked him to look into one very
specific matter first. That was the matter of the missing gold
shipment from Fort Knox of January 20, 1965, the very day Lyndon
Johnson was inaugurated! Any truthful, independent inquiry about
that one shipment alone would raise questions that are far
broader in scope, and those questions would have led into the
complete investigation we are asking for.

But what has the champion of the "Golden Fleece Award" done up
to now? First, consider the matter of the missing gold shipment
which I discussed in AUDIO LETTER No. 56. Proxmire has yet to
launch an independent investigation of any kind. Instead he
started off by doing what we asked him not to do. He asked for a
report by the Treasury's own Inspector General. Then he wasted
months of precious time in sending computerized brush-off letters
in reply to your letters. Following standard procedure in
Washington today, he gave you nothing but lip service. He kept
promising you that as soon as he received the Treasury report, he
would decide what to do next.

My friends, even when Proxmire did receive the worthless
Treasury report, he just sat on it. He was hoping that he could
stall you until you lost interest and went away. Proxmire never
made the promised report available until you insisted that he do
so around early December. The report of the Treasury's Inspector
General carries a hand-stamped date of September 30, 1980. It
adds nothing new about the missing shipment; instead it just
expands on a 5-year-old letter of Mrs. Mary Brooks, then Director
of the United States Mint. I first made that letter public in
AUDIO LETTER No. 2 for July 1975.

The Brooks letter of 1975 served only to multiply the
questions about the missing Fort Knox gold shipment. And the
1980 report by the Treasury's Inspector General only muddied the
waters still further. No wonder Senator Proxmire tried to sit on
the report for two months, because it is an unsatisfactory
report. As such it calls for Proxmire to do his duty to dig
deeper--and digging deeper is the one thing Proxmire seems
determined not to do.

The missing gold shipment of January 20, 1965 is only one
thread in the giant web of scandal surrounding our missing gold,
and Proxmire has stubbornly refused even to take a glance at the
giant scandal as a whole. To show you what I mean, let me remind
you of a letter to Proxmire which I quoted in AUDIO LETTER No. 59
last October. It was written by an acquaintance of Proxmire in
Proxmire's home state of Wisconsin. As an astute business man,
he asked Proxmire some very penetrating questions. This man has
kept my good friend, Mr. Edward Durell, informed about his
correspondence with Proxmire. As a result, I can give you the
sequel to what I reported to you in October. It is very

To begin with, Proxmire never answered the letter from his
friend which I read to you. After a few weeks, Proxmire's friend
wrote again. He made it abundantly clear that he expected an
answer. And answer Proxmire did.

Proxmire's letter dated December 3, 1980 begins with the
words, quote:

"I have no record of having received your earlier letter
concerning a physical inventory of the nation's gold reserves. I
have received a great deal of mail regarding this issue, so I do
apologize for the oversight."

By the way, some of you have asked me how many people are joining
in our campaign, so now you have Proxmire's own words, not just
mine, that you have a lot of company. You are making yourself

But Proxmire spends the rest of the letter giving nothing but
excuses for refusing to do his duty. It is little more than a
rehash of things you have already heard, including factual
errors. The letter was so bad that his friend wrote again and
picked it apart almost line by line. But for you and me, there's
no point in wasting any more time on Proxmire right now.

My friends, we gave Senator Proxmire the benefit of the doubt.
He has responded by forfeiting the opportunity to take the lead
which could have been his. Under British common law he would be
considered a traitor, so for now we will just go away and leave
him alone. But Proxmire will remain a powerful member of the
Senate Banking Committee. We may have occasion to deal with him
again; but if we do, my friends, it will be on very different

Topic #3--Just after Christmas last month a big article about
Fort Knox began appearing in newspapers nation-wide. Alert
listeners all over the United States have sent me copies. The
publicity counterattack against our "preventive war of TRUTH" has
now begun.

The article had three basic points to get across. Two of
these were familiar from countless gold propaganda in the past.
One of these old familiar points was a rehash of the old myth
about the impregnability of Fort Knox. The officer in charge of
the Bullion Depository, George B. Wright, was photographed at
attention outside the locked gates, and there were quotes from
him like: "This is the most secure facility you will find
anywhere. We are continually improving our security system" and
"We have tanks and personnel carriers standing by."

A second familiar point of the long article was the standard
personal attack on me. My 1974 charges about our missing gold
are mentioned, but those are dismissed with a yawn, as quote:
"Beter's farfetched claim."

But the third propaganda trick in the article was new. In
AUDIO LETTER No. 60 four weeks earlier I had reported, quote:

"Watch for the non-existent gold reserves to be revalued at
current market prices. In terms of dollars, our fictitious gold
reserves will suddenly look 15 or 20 times bigger."

The Fort Knox newspaper article started the ball rolling. It
never mentioned the old official gold price of $42.22 per ounce
which is reflected in Treasury balance sheets. Instead, it
hammers away at the great increase in market prices of gold, and
so our psychological conditioning has now begun. We are being
mentally set up for the gold revaluation publicity stunt to come.

In AUDIO LETTER No. 59 I discussed the way in which America's
gold reserves are listed on Treasury and Federal Reserve balance
sheets. I did that in order to call your attention to a little
known but crucial fact. Our gold is often referred to loosely in
the press as the "Treasury's gold" or the "government's gold",
but that is not correct. The gold actually belongs to the
Federal Reserve System. The Treasury only serves as a physical
custodian for the Federal Reserve gold, and the Treasury and the
Federal Reserve balance sheets confirm that this is the
situation. If this sounds like a strange arrangement, you're
right. It is. But it was set up that way for a reason.

Treasury custody of Federal Reserve gold created a situation
of mixed responsibility, and it enabled those lines of
responsibility to be blurred wherever convenient. This made it
easier for those who stole our gold to hide what they had done.
Even so they have broken laws and they have left a trail. The
legal evidence is mounting that points to the Treasury Department
and the Federal Reserve Board of Governors here in Washington as
co-conspirators. The legal principle involved is that of a
pledge, misapplied in a wrongful and fraudulent manner. And, my
friends, you and I are not the only victims! By and large the
Presidents and Directors of the Regional Federal Reserve Banks
have also been victimized. They have been placed in positions of
enormous liability by the actions of the Board here in
Washington, and the evidence so far indicates that they do not
realize what has been done to them.

What I want to do now is to outline the legal case that is
taking shape. Laws have been broken, and some very powerful men
are destined for prison! I know that I have many lawyers among
my listeners, and it is as a lawyer that I speak to you now; but
I will also try to make my comments as clear as possible for
everyone. We are being forced to try our case first in the
"court of public opinion", and I will conclude this topic with a
new suggestion for action for you and for the Regional Federal
Reserve Banks.

On December 3, 1974, then Secretary of the Treasury William
Simon testified before a Subcommittee of the House Banking
Committee. The Congressmen were asking about various details of
the Treasury's announced plans to start holding "gold auctions."
The auctions were to begin a few weeks later in January 1975. In
the course of the questioning, then Congressman John Conlan in
Arizona asked:

"Is the government gold owned by the Federal Reserve or is it
owned by the Treasury but the Federal Reserve has a mortgage-like
interest on that gold?"

Simon's answer included the words, and I quote:

"It is sort of a pledge."

When Simon said those two words "sort of" he almost let the
cat out of the bag. Fortunately for him, Simon's slip of the
tongue went unnoticed at the time; and Government witnesses
before Congress always have a special privilege. It goes under
the euphemism "correcting for the record"--that is, a Government
witness can revise his oral testimony before it is printed by the
Government Printing Office. So the officially-published version
of Simon's testimony was sanitized in several places. Among
other things, it omits those two incriminating words "sort of"
which Simon said. According to the officially published version,
Simon said to Congressman Conlan, quote:

"Legally, I want to check with my attorney. Yes, it is the
same. I thought it was. It is a pledge."

Later in the same testimony Conlan asked Simon how the decision
is taken to sell gold. In his replies Simon said he took the
decision to the President; but he also claimed, quote:

"I have the authority to do that."

Now, my friends, please notice something very important. The
then Secretary of the Treasury, William Simon, was questioned
about sales of Federal Reserve gold, and yet he never once made
any mention of obtaining Federal Reserve permission to do so!
Instead he asserted that the Treasury itself can sell the gold
without asking anyone else, not even the President. The only
legal basis held out for this is the claim that the gold is "a

My friends, please bear with me now. There is an essential
legal point here which has to be made. Those who need to know
about it most urgently are the Officers and Directors of the
Regional Federal Reserve Banks, but I will need your help to
bring this about. As I am about to explain, the wool has been
pulled over their eyes as well as ours.

When I use the word "conspiracy", I'm doing so in the strict
legal sense.

A CONSPIRACY is the term which refers to any situation in
which two or more individuals join together to plan and execute a
crime; and that is exactly what the Federal Reserve Board, not
the Banks, and the Treasury have done.

The key to it all is the legal concept of a pledge. For
nearly 20 years now, the United States Treasury has been using a
pretended authority to sell Federal Reserve gold at will. That
pretended authority is based upon a claim which has been made to
sound plausible but is totally false. That claim is the
Treasury's assertion that the Federal Reserve gold is a pledge;
or, as Simon really said, "sort of a pledge." That is why
Simon's testimony of 1974, which I just quoted, was sanitized so

To show you what has been done, first I should define what a
pledge is in law. First I will describe it in legal terminology
because this is a legal battleground. The Officers and Directors
of the Regional Federal Reserve Banks will have to take legal
steps if they are to save themselves. But I also want to make
sure everyone understands what is involved, so I will try my best
to give you examples of what I am talking about.

Legally, a PLEDGE is defined as a bailment or transfer of
personal property as a security for some debt or obligation. It
is redeemable on certain terms; but if the Debtor defaults on the
contract, the Creditor can sell the property which the Debtor has
turned over to him. In this situation, the debtor is called a
pledgor because he is pledging to pay or repay something. The
creditor is called the pledgee. He holds on to physical
possession of the pledgor's property until the pledge is

For a contract of pledge of property to exist, three elements
must be present:

(1) The pledgor must turn over possession of the property to the
(2) Title to the property--that is, actual ownership--is retained
by the pledgor;
(3) and this is essential: There must be a lien of some sort
against the property involved for payment of a debt or
performance of an obligation, and that debt or obligation must be
due the pledgee by the pledgor or some other person.

For my fellow attorneys, just a reminder that a contract of
pledge is one form of hypothecation. Hypothecation, of course,
is the contractual power of a creditor over the property of a
debtor to cause the property to be sold to satisfy the debt.
"Pledge" applies specifically when the property of the debtor is
physically handed over to the creditor.

Now let me come down to earth and give you an everyday
example. Suppose you needed some money and decided to pawn your
gold watch. You go to the pawnshop and physically turn over your
gold watch to the pawnbroker. In return, the pawnbroker gives
you two things: He hands you some money as a loan, and he also
hands you a receipt for your watch. Your pawn receipt gives you
the legal right for some period of time to go back in and redeem
your watch. That is, if you want your watch back, you give the
pawnbroker the receipt plus the money you borrowed plus some

My friends, a pawn transaction like this is a contract of
pledge. You are the debtor because he has loaned you money. He
keeps your watch in his possession as security for your loan.
During the redemption period you have the right to get your watch
back if you pay the loan; but if you do not repay the loan by a
certain deadline, you default on your loan. The pawnbroker may
then sell your watch.

Now then, my friends, the United States Treasury claims that a
similar arrangement applies to the Federal Reserve gold. The
property at issue is America's entire monetary gold hoard instead
of a gold watch; but they claim that the same principle applies,
that the gold is "a pledge." In effect, the Treasury thereby
claims to be in the position of a giant pawnbroker. By referring
to the gold as "a pledge", the Treasury has claimed in effect
that the Federal Reserve System pawned the gold. Can you
imagine? Beyond that, the Treasury is behaving as if the Federal
Reserve System had defaulted in some way. The Treasury has
disposed of most all of the Federal Reserve gold, just like a
pawnbroker; and this has been done without even notifying 11 of
the 12 Regional Federal Reserve Banks! The Federal Reserve Board
of Governors right here in Washington knew about it, so did
certain people at the New York bank, but they have left the other
11 Regional Banks in the dark.

My friends, the United States Treasury pretends to have the
authority to sell off the Federal Reserve gold at will. That is
what William Simon, who parades today as the darling of the
Conservatives, said as Treasury Secretary in 1974. This
pretended authority to get rid of our gold is based on the
Treasury's contention that it is "a pledge." But is it? Or was
it ever really a pledge? The Treasury's claim does not make it
so all by itself. That famous quotation of Abraham Lincoln
applies just as well now as it did in AUDIO LETTER No. 59: "A
flower does not become a rose just because I call it a rose."

I will now point out some facts which prove that the
Treasury's possession of the Federal Reserve gold was never on
the basis of a pledge.

The Treasury's pretended authority to sell the gold is
completely fraudulent, and there has been collusion between the
Treasury and the Federal Reserve Board here in Washington. As a
result, 11 of the 12 Regional Federal Reserve Banks have been
swindled. They are claiming assets--gold assets--in the mistaken
belief that those assets still exist.

To trace the true status of the Federal Reserve gold, we need
to go back to the beginning--in 1933 and 1934. On March 4, 1933,
Franklin D. Roosevelt was inaugurated President for his first
term. The very next evening just before midnight he declared a
"National Emergency." He proclaimed a week-long Bank Holiday,
closing all banks and placing an embargo on gold payments. Then
the Treasury Secretary, William H. Woodin, made a public
statement to quiet the fears of the people. He said, quote:

"It is ridiculous and misleading to say that we have gone off
the Gold Standard any more than we have gone off the Currency
Standard. We are definitely on the Gold Standard. Gold merely
cannot be obtained for several days."

But they always lie, my friends. The Treasury Secretary said
it would be just a few days, but IT WAS 42 YEARS before Americans
would regain the right to own gold, because only four (4) days
after he spoke, on March 9, 1933, the "National Banking Emergency
Act" was rushed into law. Under that Act, American citizens were
forced to turn in all of their gold. It was collected by the
Federal Reserve System at the old bargain price of $20.67 per

Despite those soothing words of the Treasury Secretary only
days before, America was off the Gold Standard. The Act also
authorized the Treasury Secretary to instruct the Federal Reserve
to deliver its gold into possession of the Treasury. The
Treasury Secretary did issue those instructions on January 17,
1934, but the 1933 Law did not take title of the gold away from
the Federal Reserve. It only required that it be physically held
by the Treasury for safekeeping. Finally, the "Gold Reserve Act"
of 1934 was passed on January 30 of that year. Section 2-A of
the Act says, quote:

"Upon the approval of this Act, all right, title, and interest
in every claim of the Federal Reserve Board of every Federal
Reserve Bank and of every Federal Reserve Agent in and to any and
all gold coin and gold bullion shall pass to and are hereby
vested in the United States."

My friends, that sounds ironclad, doesn't it? It sounds as if
the Treasury took over ownership of the gold from the Federal
Reserve, but the fact is that it was only a pretended transfer.

On January 24, 1934, six (6) days before the Act was passed,
one brave Congressman tried to expose the entire ruse. He was a
bitter enemy of the Federal Reserve System, and on the floor of
Congress he gave a speech that revealed exactly what was afoot.
Describing the provisions of the Act for the gold transfer, then
Congressman Louis T. McFadden said, quote:

"It provides that the United States Government shall give the
Federal Reserve Board and the Federal Reserve Banks new Gold
Certificates to the full value of the loot. The Gold
Certificates will give the Federal Reserve Board and the Federal
Reserve Banks legal title to the gold, and the United States
Treasury will be nothing more than its physical custodian. The
Secretary of the Treasury will give the Federal Reserve Banks
gold for their new Gold Certificates whenever they ask for it.
It is a fraudulent transfer."

The situation McFadden described is exactly what happened.
The Federal Reserve System owns the gold through its Gold
Certificates, the Treasury only acts as physical custodian; and
this arrangement has, in legal terms, been confirmed, ratified,
and condoned by the Federal Reserve and Treasury balance sheets
for 46 years. It is the fact, no matter what the words of the
1934 Act may seem to say; and law, my friends, deals with the
questions of fact, not just assertions.

Now let me return to the present-day claim of the Treasury
that it holds the Federal Reserve gold as "a pledge." That claim
is in direct contradiction to the Treasury's own balance sheets.
As I detailed in AUDIO LETTER No. 59, the Treasury is a debtor
with regard to the gold, while the Federal Reserve is the
creditor; but if it were a pledge, as claimed by the Treasury,
the reverse would be true. The Treasury is trying to turn day
into night, and night into day, simply by calling it "a pledge."

That raises two questions, my friends.

(1) What pretended authority was the basis of Simon's 1974 claim
that the gold is "sort of a pledge"?
(2) How could the Treasury get away with this fraud?

The answer to the first question is a June 30, 1961 Act of
Congress, the "Old Series Currency Adjustment Act." The citation
is: 31 USC 912. The Treasury misled Congress in 1961 with the
excuse that it was to enable the retirement of a variety of old
obsolete currencies including certain Gold Certificates used as
currencies, but nowhere did the Act define the term "Gold
Certificates." The real but unstated purpose of the Act was to
provide a pretended authority to dispose of Federal Reserve gold.
In fact, gold began leaving the country under the "London Gold
Pool Agreement" only three (3) months later. By virtue of that
Act, the Treasury pretends that the gold became what Simon called
"sort of a pledge." The Treasury claims a right that it does not
legally have to convert the gold to its own use and give the
Federal Reserve System nothing but paper money or bookkeeping
credits in exchange. In this way, the Federal Reserve Banks have
been swindled out of their gold bullion.

That brings me to the second question. That is: How could the
Treasury get away with it? The answer involves collusion by the
Federal Reserve Board of Governors here in Washington.

In AUDIO LETTER No. 59 I suggested that you write to the
President and Directors of the Federal Reserve Bank in your
Region. I suggested that you urge them to press for an
independent, reliable, physical inventory of the Federal Reserve
gold in Treasury vaults. Based on the replies of which you have
sent me copies, a very significant pattern has emerged. I do not
include the New York bank in what I am about to say, but the
responding Chairmen and Presidents of the other 11 Regional Banks
have said basically two things:

No. 1--Not one single Chairman or President of a Regional Federal
Reserve Bank says he has ever seen the gold or had it
inventoried. Instead to a man, they are all relying totally on
the assurances of the Treasury and their own Federal Reserve
Board here in Washington.

No. 2--Not one single reply reflects a correct understanding of
his own enormous legal liability involving the gold. Every
indication is that they were never properly informed that they
were taking on this responsibility.

My friends, I know this sounds astonishing, but the
correspondence demonstrating these two points is just too
overwhelming to ignore. Let me just read you a few quotes to
show you what I mean.

From the Federal Reserve Bank of Atlanta, President William F.
Ford wrote, quote:

"As you may know, I have no jurisdiction over the stock of gold
at Fort Knox. However I have discussed the issues that you raise
with my colleagues at the Federal Reserve Board in Washington."

From the Federal Reserve Bank of Boston, President Frank E.
Morris wrote, quote:

"I have never had reason to doubt that the gold stock and
shipments have been properly accounted for."

From the Federal Reserve Bank of Kansas City, President Roger
Guffey wrote, quote:

"I did not perform a physical count of all assets of the Bank
at the time I became president, nor have I conducted a physical
inventory of the nation's gold stock held by the United States
Treasury Department.

As I am sure you are aware, the nation's gold reserves are no
longer held by the Federal Reserve System but rather the title
and custody is held by the United States Treasury as a result of
the 'Gold Reserve Act of 1934.'"

From the Federal Reserve Bank of Philadelphia, Chairman John W.
Eckman wrote, quote:

"While the 12 Reserve Banks and their Directors have a degree
of local autonomy, the questions you and Mr. Durell ask and the
actions you request are more logically in the province of the
Board of Governors."

From the Federal Reserve Bank of Dallas, President Ernest T.
Baughman wrote to my good friend, Mr. Edward Durell, quote:

"With respect to the gold which underlies the Gold Certificates
held by the Federal Reserve Banks, I have made no effort to
eyeball that gold. I am prepared with no reservations whatever
to accept the representations of those government officials
responsible for the gold that they do in fact have it."

And from the Federal Reserve Bank of Richmond, President Robert
P. Black wrote, quote:

"I would like to emphasize as strongly as I know how that
neither the Federal Reserve System nor the Federal Reserve Bank
of Richmond has custody or control of the gold stock of the
United States."

Then he quotes the gold legislation of 1933 and 1934 which I
discussed for you earlier, and he concludes on that basis that,

"It seems clear to me that this legislation removes from the
Federal Reserve System any responsibility for the custody and
control of the gold stock of the United States."

My friends, it is little wonder that the Chairmen and
Presidents of the Regional Federal Reserve Banks are so
dangerously misinformed. Their own legal responsibility for the
gold is based not on custody but on ownership. And as I have
already established in detail for you, that ownership is not open
to dispute. It is reflected in the Gold Certificates owned by
the Federal Reserve Banks, but here is the shocker: The 12
Regional Banks do not have those Certificates, even though they
are shown on their respective balance sheets as "Gold Certificate

Where did all those certificates go? Here is the answer. I
quote now from a letter dated January 9, 1981 to my good friend
Mr. Durell. It was written by Robert P. Black, President of the
Federal Reserve Bank of Richmond, quote:

"I am unable to send you a copy of the certificate you
requested. The 'Gold Certificate Account' shown on the balance
sheets of the Federal Reserve Banks is managed by the Board of
Governors of the Federal Reserve System in Washington, D.C.
Amounts in this account are allocated to the 12 Federal Reserve
Banks by the Board of Governors."

My friends, I speak again now as a lawyer. In any conspiracy
to commit a crime, the circle of conspirators is always kept as
small as possible. The fewer the people involved, the less the
risk of exposure, and that is exactly the pattern that is
emerging now.

By every evidence up to now, the officers and directors of 11
of the 12 Regional Federal Reserve Banks are not party to the
gold conspiracy. They are dangerously misinformed, but they
appear to be acting in good faith. It is they who will be faced
with enormous fines, prison terms, and ruined lives when the
Scandal breaks; and yet they appear to be blissfully unaware of
their great danger. And that, my friends, is the second telltale
sign in all great conspiracies--the conspirators always make sure
that there will be someone else handy to take the blame!

For example, when the CIA, on orders, assassinated President
John F. Kennedy, they made sure a "patsy" named Lee Harvey Oswald
was on hand; and they also made sure he was silenced before he
could raise too many doubts. Likewise, the conspirators within
the Treasury and the Federal Reserve Board of Governors have made
sure that they, too, will have their scapegoats. Those
scapegoats are to be the officers and directors of the Regional
Federal Reserve Banks. Ignorance of the law is no excuse; so
when the Gold Scandal breaks, as it will, they will be bundled
off to prison to satisfy the rage of the American public--that
is, my friends, unless they take action now to save themselves.

During the past six weeks or so they have been put on legal
notice for the first time ever about the missing Federal Reserve
gold--so they can break free of the web of intrigue if they will.
They can do this by taking the initiative to bring about an
independent, conclusive, physical inventory of the gold. By
doing that, they can free themselves of any taint of suspicion;
but if they choose not to act, my friends, they will only be
sealing their own fate because they are now on legal notice. And
if they choose inaction, they will make themselves accessories
after the fact in the biggest scandal in American history--the
GOLD SCANDAL. The choice is up to them!

My friends, it's up to us--you and me--to alert the Federal
Reserve Bank officials to these things, and so I will be sending
a copy of this tape to the President of each Federal Reserve Bank
by Registered Mail. I need for you to back me up with your

I am about to read you a sample letter to get you started.
Please, write a letter like this to the President of the Federal
Reserve Bank in your Region. I told you how to get the address

Send the original to the President of the Federal Reserve
Bank, and send a copy to each one of the other Directors. A
photo copy will do; and as always, be sure to keep a copy for
your own file.

Now here's the sample letter I suggest. Feel free to use your
own words, but please do not cut corners. WE MUST HAVE
ACTION--AND SOON, because time is fast running out:

"Dear Mr. (so and so):

I am writing to you again because of my continuing deep concern
over the loss of our gold reserves. Thank you for your earlier
reply; but I am concerned that you do not appear to be aware of
certain extremely large legal responsibilities on your part. In
a recent cassette tape, Dr. Beter has given a legal discussion of
these responsibilities on your part. Dr. Beter speaks as a
lawyer and a former Counsel to the United States Export-Import
Bank, the largest governmental bank in the Western world.
Therefore I do not believe that you can safely afford to ignore
his legal briefing of your responsibilities regarding the gold.

Dr. Beter has notified his listeners that he is sending a copy
of this cassette tape--AUDIO LETTER No. 61--to you by Registered
Mail. It will take you and the other Directors of your bank just
one hour to hear what he has to say. I cannot urge you strongly
enough to do just that.

After you hear Dr. Beter's tape, I believe you will agree with
me that you should take steps to protect your own personal
interests. To that end, I urge you to demand immediate action by
the Federal Reserve Board of Governors to arrange an independent,
conclusive, physical inventory of the gold in Treasury vaults.
As you will hear Dr. Beter explain, you do have the authority to
bring this about.

Please insist that the committee which oversees the inventory
include the President or another Director from each one of the
Regional Reserve Banks. You dare not delegate this duty to
anyone else, including even the Federal Reserve Board of
Governors. Your own personal vital interests are at stake!

If you will do this, it can only have one of two possible
outcomes, both good. One possibility is that the inventory will
prove that all the gold is there, and Dr. Beter is wrong. That
would lay to rest seven years of unanswered questions which have
undermined confidence in America's banking system.

The only other possibility would be to prove that much, if not
all, of the gold is missing. In that case, you will be taking
the first step toward correcting the real causes of our crumbling
economy, and you will have removed yourself from any taint of

Either the gold is there--OR--it is not there. Dr. Beter is not
afraid to learn the truth. Are you?"

--Followed by your signature.

My friends, once again I'm asking you to go to work. Please
get your letter and copies off to the Federal Reserve Bank in
your Region right away. As I said before, I hold out no hope for
the New York bank, but the other 11 Regional Banks appear to be a
real ray of hope; and if they will do their duty and use their
latent powers, they can save themselves while doing a great
service to America.


Now it is time for just a few final words as my "Last Minute

Today, January 20, 1981, is Inauguration Day. To all outward
appearances, a new Administration has begun; but thanks to the
obscure, recent Branti decision of the Supreme Court, the change
is only on the surface. The real battle to control the United
States Government continues unabated.

My friends, these things cannot be allowed to continue. It is
up to you and me to do our Constitutional duty to save our land.

Until next month, God willing, this is Dr. Beter. Thank you,
and may God bless each and every one of you.

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