Montgomery vs. Daly


It’s been called the most astounding sleight of hand ever devised. The creation of money privatized, and usurped from Congress by a private banking cartel. Most people think money is issued by fiat through the government, but that is not the case. Except for coins, which compose only about one one-thousandth of the total U.S. money supply, all of our money is created by private banks. Federal Reserve Notes (dollar bills) are issued by the Federal Reserve, a private banking corporation, and lent to the government at interest, creating a huge debt to the nation. A debt the nation can never get out of unless the Federal Reserve Act of 1913 is abolished. Moreover, Federal Reserve Notes and coins together compose less than 3 percent of the money supply. The other 97 percent is created by commercial banks as loans, and backed by nothing.

You don’t believe banks create the money they lend? Neither did the jury in a landmark Minnesota case, until they heard the evidence. First National Bank of Montgomery vs. Daly (1969) was a courtroom drama worthy of a movie script. Every American that is facing a housing crisis should take note.

Defendant Jerome Daly opposed the bank’s foreclosure on his $14,000 home mortgage loan on the ground that there was no consideration for the loan. “Consideration” (“the thing exchanged”) is an essential element of a contract. All contracts need an offer, acceptance and consideration to be valid.

Daly, an attorney representing himself, argued that the bank had put up no real money for his loan. The courtroom proceedings were recorded by Associate Justice Bill Drexler, whose chief role, he said, was to keep order in a highly charged courtroom where the attorneys were threatening a fist fight. Drexler hadn’t given much credence to the theory of the defense, until Mr. Morgan, the bank’s president, took the stand. To everyone’s surprise, Morgan admitted that the bank routinely created money “out of thin air” for its loans, and that this was standard banking practice. “It sounds like fraud to me,” intoned Presiding Justice Martin Mahoney amid nods from the jurors. In his court memorandum, Justice Mahoney stated:

Plaintiff admitted that it, in combination with the Federal Reserve Bank of Minneapolis,  did create the entire $14,000.00 in money and credit upon its own books by bookkeeping entry. That this was the consideration used to support the Note dated May 8, 1964 and the Mortgage of the same date. The money and credit first came into existence when they created it. Mr. Morgan admitted that no United States Law or Statute existed which gave him the right to do this. A lawful consideration must exist and be tendered to support the Note.

The court rejected the bank’s claim for foreclosure, and the defendant kept his house. To Daly, the implications were enormous. If bankers were indeed extending credit without consideration – without backing their loans with money they actually had in their vaults and were entitled to lend – a decision declaring their loans void could topple the power base of the world. He wrote in a local news article:

This decision, which is legally sound, has the effect of declaring all private mortgages on real and personal property, and all U.S. and State bonds held by the Federal Reserve, National and State banks to be null and void. This amounts to an emancipation of this Nation from personal, national and state debt purportedly owed to this banking system. Every American owes it to himself . . . to study this decision very carefully . . . for upon it hangs the question of freedom or slavery.

Needless to say, however, the decision failed to change prevailing practice, although it was never overruled. It was heard in a Justice of the Peace Court, an autonomous court system dating back to those frontier days when defendants had trouble traveling to big cities to respond to summonses. In that system (which has now been phased out), judges and courts were pretty much on their own. Justice Mahoney, who was not dependent on campaign financing or hamstrung by precedent, went so far as to threaten to prosecute and expose the bank. He died less than six months after the trial, in a mysterious accident that appeared to involve poisoning. Since that time, a number of defendants have attempted to avoid loan defaults using the defense Daly raised; but they have met with only limited success. As one judge said off the record:

If I let you do that – you and everyone else – it would bring the whole system down. I cannot let you go behind the bar of the bank. We are not going behind that curtain!

From time to time, however, the curtain has been lifted long enough for us to see behind it. A number of reputable authorities have attested to what is going on, including Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920s. He declared in an address at the University of Texas in 1927: “The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin . . . . Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again. . . . Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. . . . But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit.”

Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta in the Great Depression, wrote in 1934: “We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon.”

Graham Towers, Governor of the Bank of Canada from 1935 to 1955, acknowledged: “Banks create money. That is what they are for. . . . The manufacturing process to make money consists of making an entry in a book. That is all. . . . Each and every time a Bank makes a loan . . . new Bank credit is created — brand new money.”

Robert B. Anderson, Secretary of the Treasury under Eisenhower, said in an interview reported in the August 31, 1959 issue of U.S. News and World Report: “[W]hen a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposit; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.”

II. The Following is the Actual Court Record of:







First National Bank of Montgomery,



Jerome Daly,



The above entitled action came on before the Court and a Jury of 12 on December 7, 1968 at 10:00 am.   Plaintiff appeared by its President Lawrence V. Morgan and was represented by its Counsel, R. Mellby. Defendant appeared on his own behalf.

A Jury of Talesmen were called, impaneled and sworn to try the issues in the Case. Lawrence V. Morgan was the only witness called for Plaintiff and Defendant testified as the only witness in his own behalf.

Plaintiff brought this as a Common Law action for the recovery of the possession of Lot 19 Fairview Beach, Scott County, Minn. Plaintiff claimed title to the Real Property in question by foreclosure of a Note and Mortgage Deed dated May 8, 1964 which Plaintiff claimed was in default at the time foreclosure proceedings were started.

Defendant appeared and answered that the Plaintiff created the money and credit upon its own books by bookkeeping entry as the consideration for the Note and Mortgage of May 8, 1964 and alleged failure of the consideration for the Mortgage Deed and alleged that the Sheriff’s sale passed no title to plaintiff.

The issues tried to the Jury were whether there was a lawful consideration and whether Defendant had waived his rights to complain about the consideration having paid on the Note for almost 3 years.

Mr. Morgan admitted that all of the money or credit which was used as a consideration was created upon their books, that this was standard banking practice exercised by their bank in combination with the Federal Reserve Bank of Minneapolis, another private Bank, further that he knew of no United States Statute or Law that gave the Plaintiff the authority to do this. Plaintiff further claimed that Defendant by using the ledger book created credit and by paying on the Note and Mortgage waived any right to complain about the Consideration and that the Defendant was estopped from doing so.

At 12:15 on December 7, 1968 the Jury returned a unanimous verdict for the Defendant.

Now therefore, by virtue of the authority vested in me pursuant to the Declaration of Independence, the Northwest Ordinance of 1787, the Constitution of United States and the Constitution and the laws of the State of Minnesota not inconsistent therewith ;


1.That the Plaintiff is not entitled to recover the possession of Lot 19, Fairview Beach, Scott County, Minnesota according to the Plat thereof on file in the Register of Deeds office.

2.That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void.

3.That the Sheriff’s sale of the above described premises held on June 26, 1967 is null and void, of no effect.

4.That the Plaintiff has no right title or interest in said premises or lien thereon as is above described.

5.That any provision in the Minnesota Constitution and any Minnesota Statute binding the jurisdiction of this Court is repugnant to the Constitution of the United States and to the Bill of Rights of the Minnesota Constitution and is null and void and that this Court has jurisdiction to render complete Justice in this Cause.

The following memorandum and any supplementary memorandum made and filed by this Court in support of this Judgment is hereby made a part hereof by reference.


Dated December 9, 1968


Credit River Township

Scott County, Minnesota


The issues in this case were simple. There was no material dispute of the facts for the Jury to resolve.

Plaintiff admitted that it, in combination with the federal Reserve Bank of Minneapolis, which are for all practical purposes, because of their interlocking activity and practices, and both being Banking Institutions Incorporated under the Laws of the United States, are in the Law to be treated as one and the same Bank, did create the entire $14,000.00 in money or credit upon its own books by bookkeeping entry. That this was the Consideration used to support the Note dated May 8, 1964 and the Mortgage of the same date. The money and credit first came into existence when they created it. Mr. Morgan admitted that no United States Law Statute existed which gave him the right to do this. A lawful consideration must exist and be tendered to support the Note. See Ansheuser-Busch Brewing Company v. Emma Mason, 44 Minn. 318, 46 N.W. 558.   The Jury found that there was no consideration and I agree.   Only God can create something of value out of nothing.

Even if Defendant could be charged with waiver or estoppel as a matter of Law this is no defense to the Plaintiff. The Law leaves wrongdoers where it finds them. See sections 50, 51 and 52 of Am Jur 2nd “Actions” on page 584 – “no action will lie to recover on a claim based upon, or in any manner depending upon, a fraudulent, illegal, or immoral transaction or contract to which Plaintiff was a party.”

Plaintiff’s act of creating credit is not authorized by the Constitution and Laws of the United States, is unconstitutional and void, and is not a lawful consideration in the eyes of the Law to support any thing or upon which any lawful right can be built.

Nothing in the Constitution of the United States limits the jurisdiction of this Court, which is one of original Jurisdiction with right of trial by Jury guaranteed. This is a Common Law action. Minnesota cannot limit or impair the power of this Court to render Complete Justice between the parties.  Any provisions in the Constitution and laws of Minnesota which attempt to do so is repugnant to the Constitution of the United States and void.  No question as to the Jurisdiction of this Court was raised by either party at the trial. Both parties were given complete liberty to submit any and all facts to the Jury, at least in so far as they saw fit.

No complaint was made by Plaintiff that Plaintiff did not receive a fair trial. From the admissions made by Mr. Morgan the path of duty was direct and clear for the Jury.  Their Verdict could not reasonably have been otherwise. Justice was rendered completely and without denial, promptly and without delay, freely and without purchase, conformable to the laws in this Court of December 7, 1968.


December 9, 1968

Justice Martin V. Mahoney

Credit River Township

Scott County, Minnesota.

Note: It has never been doubted that a Note given on a Consideration which is prohibited by law is void.  It has been determined, independent of Acts of Congress, that sailing under the license of an enemy is illegal.  The emission of Bills of Credit upon the books of these private Corporations for the purpose of private gain is not warranted by the Constitution of the United States and is unlawful.  See Craig v. Mo. 4 Peters Reports 912.   This Court can tread only that path which is marked out by duty.    M.V.M.

JEROME DALY had his own information to reveal about this case, which establishes that between his own revealed information and the fact that Justice Martin V. Mahoney was murdered 6 months after he entered the Credit River Decision on the books of the Court, why the case was never legally overturned, nor can it be



FORWARD: The above Judgment was entered by the Court on December 9, 1968. The issue there was simple – Nothing in the law gave the Banks the right to create money on their books. The Bank filed a Notice of Appeal within 10 days. The Appeals statutes must be strictly followed, otherwise the District Court does not acquire Jurisdiction upon Appeal. To effect the Appeal the Bank had to deposit $2.00 with the Clerk within 10 days for payment to the Justice when he made his return to the District Court.  The Bank deposited two $1.00 Federal Reserve Notes. The Justice refused the Notes and refused to allow the Appeal upon the grounds that the Notes were unlawful and void for any purpose. The Decision is addressed to the legality of these Notes and the Federal Reserve System. The Cases of Edwards v. Kearnzey and Craig vs Missouri set out in the decision should be studied very carefully as they bear on the inviolability of Contracts. This is the Crux of the whole issue.   Jerome Daly.

SPECIAL NOTATION.  Justice Mahoney denied the use of Federal Reserve Notes, since they represent debt instruments, not true money, from being used to pay for the appeal process itself.  In order to get this overturned, since the bank’s appeal without the payment being recognized was out of time, it would have required that the Bank of Montgomery, Minnesota bring a Title 42, Section 1983 action against the judicial act of Justice Mahoney for a violation of the Constitution of the United States under color of law or authority, and if successful, have the case remanded back to him to either retry the case or allow the appeal to go through.  But the corrupt individuals behind the bank(s) were unable to ever elicit such a decision from any federal court due to the fact that because of their vile hatred for him and what he had done to them and their little Queen’s Scheme, had him murdered (same as them murdering him) just about 6 months later.  And so, the case stands, just as it was.  Amazingly, if they hadn’t been so arrogant about the value of their federal reserve notes and paid the Justice just 2 measly silver dollars, or else 4 measly half dollars, or else 8 measly quarters, or else 20 measly dimes, or else 40 measly nickels, or else 200 measly pennies, they could have had their appeal and would not have had to get blood on their hands.

As it is, they are now known for their bloody ways, and the day will come when the American people will reap vengeance upon them for such a heinous and villainous act.  Amen.

  1. #1 by Harrington on 12/27/2016 - 3:53 am

    This is true and our signature creates money.

    We are funding our own loans and paying double plus interest!

    I have researched and am looking for an attorney who will face these giants!

    What is the solution?

  2. #2 by George M. on 10/17/2016 - 12:45 am

    George McDermott is someone who has been a victim of judicial fraud and corruption for 23 years where the Godfather of the Maryland Mafia Gilbert Saperstein and his mafia consultants working along with judges in Prince Georges County Maryland have kept myself and my family in debt slavery for 23 years, even though they admitted before a jury and 1998 that they had paid no consideration for my business which myself and my partners had $2 million invested in and the Democratic machine in Prince Georges County Maryland in the state of Maryland Atty. Gen.’s court insiders and judges in the courts of appeal,

    Have issued hundreds of unsigned forged documents to cover up for the criminal conspiracy to undermine the integrity of the United States judicial system. What’s now is recorded in the national archives in Philadelphia Pennsylvania, Greenbelt Maryland, the main archives in Washington DC, and the Maryland Hall of records. In the judges in the District of Columbia United States District Court continue their criminal misconduct in the matter of George McDermott et al. v. Branch bank and trust company civil docket case # ; 1;-cv-00532-APM of $35 million claim of loss against the banks and its co-conspirators judges, in the state and federal courts in Maryland working to undermine the integrity of our nation’s financial system by creating false treasury notes with nothing to support them except for their. Also see were 1100 videos will show the world the other victims of war corrupt judicial system and legislative system charged with checks and balances on our judicial branches of government.

  3. #3 by Keith G. on 10/16/2016 - 11:20 pm

    The net result is that the finding is not in effect, and is not usable as precedence in new lawsuits. Many of us wish that it were! But wishing it doesn’t make it so.

  4. #4 by David Preston on 07/14/2016 - 7:18 am

    Thank you for providing me with my financial Eureka moment.

    In the UK we have financial institutions called Building Societies which accept funds from the general public, pay investment interest on the deposits and then make mortgage loans from their funds. No government money is involved. Then, in the 1980’s, the BS’s began offering current accounts hitherto the preserve of banks. In retaliation, the banks started to offer mortgages to the general public. The nearest thing you have to a BS in the US would be the likes of Freddie Mac but this operates on fed money. It would seem that the BS model is one of the few lending systems that does not involve fractional reserve banking principles.

    • #5 by Richard Sanders on 10/10/2016 - 10:06 pm

      Reinstating Glass-Steagall will fix it

  5. #6 by Dennis Hoppe on 02/17/2016 - 6:35 am

    The worldwide fractional reserve banking system is the closest it has ever been to a worldwide collapse.

    I knew Jerome Daly, in fact I bought some tax protest information from him when I lived in Wisconsin.

    We have to build a Federal Government non-fractional reserve banking system with no interest payments (usury) to the lenders. The lenders can only receive a service charge, charged to the borrower when he/she gets the loan. This would eliminate compound interest which will make it impossible for less than 1 % of super rich families to own half of the worlds wealth or more.

    We have to have a reset day when all the worlds debts are wiped out and we start all over with the new banking system. I suspect it won’t happen though, until the whole current banking system collapses. While I don’t believe in a One World Government, we do need a world currency for international trading and a world bank which is not owned by private bankers but is owned as a cooperative of all nations for International trade. This would eliminate the speculative currency trading Forex market also. I realize that this is a simplified solution and will be met with great resistance. So any currency created would not be based on debt. We should also develop a value added tax to pay for government like some other nations have and also eliminate all personal income tax. We have too many people pushing paper to make a living and not wanting to do any real work.

    Another big problem are the large corporations who lobby the government and give payoffs to crooked politicians. That has to stop by having penalties so strong that the crooked politicians would be very foolish to accept bribes from the big corporations.

  6. #7 by David Charnow on 10/16/2014 - 5:52 pm

    When you file for bankruptcy you pay a lawyer to represent you, and any party can file an adversary complaint. This is not covered by the original law related expenses, and puts you further into debt. How does a broke man prove hes broke without making himself even more broke? The only people making money are the bankers and lawyers.

    I am going to attempt this defense on my behalf because I cannot find a lawyer to act on my behalf. They are attempting to take the only asset I have which is my car and my only means of transportation to and from my job. If I lose that, I lose my ability to pay my rent and then I am homeless.

    This is the eventual result that the system is designed to yield.

  7. #8 by 德州撲克 on 10/15/2014 - 2:17 am

    Amazing article.

    Thanks for sharing!

  8. #9 by Alvin Roy on 06/29/2014 - 11:32 am

    The truth will set you free!

  9. #10 by Celia on 02/25/2014 - 6:34 pm

    The Govt. needs to print, and control currency not private banks.

    Executive Order 11110 was issued by U.S. President John F. Kennedy on June 4th, 1963.

    This executive order delegated to the Secretary of the Treasury, by the president’s authority to issue silver certificates under the Thomas Amendment of the Agricultural Adjustment Act, as amended by the Gold Reserve Act. The order allowed the Secretary to issue silver certificates, if any were needed, during the transition period under President Kennedy’s plan to eliminate silver certificates. Too bad Pres. Kennedy was assassinated, looks like the bankers were running scared.

  10. #11 by Glenn on 02/24/2014 - 5:27 pm

    I can certainly see your expertise in this work. The arena hopes for even more passionate writers like you who aren’t afraid to say how they feel. All the time go after your heart.|

  11. #12 by Whodunit on 02/18/2014 - 3:14 pm

    Ruben going on strike for a higher debt based wage is not the answer. The fundamental problem with our currency is the Fed acts as the bank in the game of monopoly. When it needs more it just prints more, every dollar being printed in debt. So if we’re playing monopoly, and you need some money I’ll act as the Fed (bank) in the game, and loan it to you at interest. I can do this all day until you have to sell everything you own, back to me for pennies on the dollar. That is what the real banks are doing, and have done after the bubble they created busted. Debt based currency is the name of the gam, and always has been. History is repeating itself.

  12. #13 by Ruben R. on 05/23/2013 - 4:19 am

    It would be nice to kill the corrupt banking system that is in place, but it can never be done unless: A. We wipe out all debt in all computers around the world. B: We decide to raise the price of our labor, goods and services, part of the reason we can’t keep up with inflation is because the wage slave is paid crap while the company raises it’s prices. If we as a working class said “NO I will NOT work for minimum wage, I want X so I can survive, and NOT give in. Companies would have no choice but to pay what the majority asks or go out of business. Not all jobs can be outsourced.

  13. #14 by Aggravated Assault Lawyer in Houston on 04/27/2013 - 5:51 am

    Amazing. I agree.

  14. #15 by Ohio On It on 03/20/2013 - 11:03 pm

    Thank you for the good writeup.

  15. #16 by Conroe Criminal Law on 03/18/2013 - 4:35 pm

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  16. #17 by Jim Vimtin on 03/05/2013 - 10:17 pm

    What’s not mentioned is that the banks make most money out of the off the actual mortgagee payments through the fractional reserve process, as they are able to lend 10 times the amount that has been deposited.

    For example £110,000 mortgage repayable at £750 a month for 25 years will work a little like this: Month 1 borrower pays back £750 bank can now lend out £7500, Month 2 £15,000, Month 3 £21,500(plus the interest they gain from the loans made on the initial loan) and so on.

    Not only do they make over twice the amount they lend out of the borrower, the also make millions if not billions out of the amount the loan repayments enables them to loan to other unsuspecting parties. What we have is an unsustainable con trick of truly exponential proportions. PH

  17. #18 by Verna on 01/25/2013 - 1:07 am

    Really good work!

  18. #19 by Transfer UK on 12/11/2012 - 9:33 pm

    First-class share on Montgomery vs. Daly: The Banking Swindle.

  19. #20 by Pension UK on 12/05/2012 - 8:59 pm

    Montgomery vs. Daly: The Banking Swindle. Great case history.

  20. #21 by Marissa on 12/02/2012 - 7:52 pm

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  21. #22 by Reagan Ozminkowski on 11/15/2012 - 7:08 pm

    Wow! This is one of the most useful blogs on the banking scam that I have ever read.

  22. #23 by Solde Moncler on 11/12/2012 - 3:08 am

    Good blog you have here. It’shard to find high-quality writing like yours these days. I seriously appreciate individuals like you that take the time to write about pressing matters like the fraud that exists in the banking industry.

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  23. #24 by International Investment on 09/21/2012 - 11:31 pm

    Fantastic! Thank you for the data on Montgomery vs. Daly.

    I appreciated reading your article.

  24. #25 by Lucie Hudgens on 09/15/2012 - 1:25 pm

    Thanks for sharing. Great information.

  25. #26 by Elias Ledezma on 02/07/2012 - 6:43 am

    I think you have noted some very interesting details on the banking corruption. Thank you for the post.

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  30. #31 by Ela Sartain on 12/22/2011 - 8:37 am

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