America: The Curious Case of Jerome Daly

The one reoccurring theme for the American public in the current recession, besides how much the taxpayer is going to be on the hoop in regards to the automotive industry, has been foreclosure after foreclosure by banks to create a new sub-sect of the American public that are homeless. A sect that not because of addiction, mental illness or lack of self determination, but because of economic factors outside their control, now resides on the side roads wondering what will become of them when the promise of recovery occurs. It is far more prominent in the United States but there are some similar occurrences in its northern neighbour of Canada. Government officials will do their fifteen second sound bite on ‘how terrible it is’ and how ‘it is regrettable that this occurred; if only there was something that could have been done to prevent this tragedy from happening’, then move on to how important the clean air admissions bill will be for the good of the future. But what if those officials aren’t wholly being truthful?

The place was Minnesota, the year 1968, and homeowner Jerome Daly was facing foreclosure from the First National Bank of Minnesota. Instead of gathering up all the possessions that he could carry and leave the house that he had called his home, he took the bank to court. The basis of Mr. Daly’s argument was that the mortgage contract was null and void because while he had been earnest in the acquisition of his property, the bank had not been.

In contracts, there is a term that people should be aware of; “Consideration”. In the legal arena, consideration is something of value that each party puts up as recognition of their part of the agreement between the two parties. In mortgages, the people applying for the houses, apartments, land, what have you, put up what they are trying to attempt to acquire as their part of the agreement. For the part, the bank or other fiscal institution the person is dealing with puts up the money needed to cover that acquisition with the expectation of getting that principle, plus the interest rate that is attached to it. What this means is that the fiscal institution creates an account with that amount of dollars in it. The key word is creates; the institution does not sell off any of its assets to cover the expenses that it is giving out to the person looking to acquire the property in question. How did this help Jerome Daly? In simple terms, the bank admitted that they created the credit that was used in exchange for Daly’s home – they did not give up any pre-existing line of credit or asset in order to meet the contract with Daly. The judge, in rendering his verdict, wrote, “The money and credit first came into existence when they created it. Mr. Morgan (the bank’s president) admitted that no United States Law or Statute existed which gave him the right to do this.”, and added “Only God can create something from nothing”. Jerome Daly was able to keep his home.

In an ideal world, this would be a case of precedent for those who would follow and attempt the same thing in order to keep their homes, but it is not an ideal world. Since this case, there have been several attempts at procuring the same result which have ended in failure. Why? As one judge explained in his verdict against a homeowner, “I’m not prepared to open the door to the destruction of the banking institutions”. Foreclosures do not only create profit for fiscal institutions, they also are a boon to the legal system. How many fees and charges are paid to lawyers, solicitors and the like as the foreclosure process rumbles over those who are its victims? Provincial, State and especially Federal governments in Canada and the United States also profit from having the legal system protecting the outright attack on fiscal institutions. Individuals do not have the resources to outlast the assaults of legal, governmental and fiscal volleys thrown at them for any extended amount of time; if they did they wouldn’t have been in a foreclosure situation to begin with. With that, the status quo continues unabated.

Perhaps its time for those who have the fiscal boot pushing them on the back to reach over and grab the boot that holds his societal brother or sister down in the submissive position and snap the ankle bone. Where an individual fails maybe a unified group could force change. To simply file suit after suit against fiscal institutions would be a waste of effort. What needs to occur is for the people to force federal, provincial and state governments to ‘come on board’ with the wishes of the people whose best interests they are supposed to be serving. How can families living in a tent or a car or under a box be considered a worthwhile end?

What is the worse thing that can happen if the general public began to scrutinize and understand the legalese induced confusion of fiscal institutions? One possible result could be governments, the law system and fiscal institutions could rally together and solidify their phantom solidarity, which would result in the unmasking of the propaganda of these systems as not being for the people but for themselves. A second result could be the implosion of the banking system which perhaps may cause bloody conflicts or a new negotiated fairer system. Whatever the case may be it has to be better than what the current situation is – slavery of the masses to a system built on the premise that from the day one is born to the day they die they will always be in debt.

It is also interesting to note, that the same protocols the banks use as “considerations” are also embedded into credit card contracts. Perhaps it is time for not only Americans and Canadians to start reading the fine print of contracts with fiscal institutions. Since originality is not the calling card of the banking community world wide, other peoples in other nations should peer into that dark world as well.