Thursday, October 17, 2013

High Cost Credit The money pouring into a boom for consumer loans

English: Cash Money - 24 hour payday loan outl...
(Photo credit: Wikipedia)
 by Jason Lewis

The rapid growth of the high-cost consumer credit industry has attracted considerable investment despite criticism of the huge interest rates charged by many companies.
The Bureau’s investigation into the sector, which includes many payday loan companies, reveals that Britain’s high street banks have put millions of pounds into the industry. US companies, some banned by law from issuing payday loans in the American states where they are based, are also investing in the UK’s less regulated market. Many have bought up UK companies, paying the UK founders millions of pounds for their shareholdings.
Criticism of the industry has focused on the level of interest charged, with some loans costing up to 4,474% in interest. The government has rejected calls to cap the interest rates the firms can charge, claiming it would force people to turn to illegal loan sharks.
Instead the Office of Fair Trading (OFT) is attempting to crack down on the industry, threatening to remove firms’ licences if they fail to check whether customers can afford the loans or use aggressive debt collection tactics. The OFT has already removed three licences.
Buying in
Despite this new attempt at regulation, international businessmen including some from eastern Europe, a South African mining company president and US venture capitalist Don Valentine – who made his name funding Apple, Google and YouTube – have bought into the industry.
Many of the companies in the Bureau’s research offer payday loans, a term referring to a short-term, high-cost loan, regardless of whether the payment is linked to a borrower’s payday. These companies charge over 4,000% interest rates. Other companies provide loans, some more long-term, with interest rates above 50% – considerably higher than conventional mortgages, overdraft facilities and even credit cards.
Among those who have invested is the Arbuthnot Bank Group run by chief executive Henry Angest, a Swiss-born millionaire, and a major Conservative Party donor.
Angest now controls Everyday Loans Limited, which offers the ‘financial freedom’ of unsecured loans of between £500 and £10,000 at 74.8%. This is not a short term payday loan company, but has rates of interest higher than other more traditional consumer loans such as credit cards.
US companies, some banned by law from issuing payday loans in the American States where they are based, are also investing in the UK’s less regulated market. 
A former Conservative party treasurer, Angest has contributed £7m to the party in loans and donations.
Last year Everyday Loans was purchased by an Arbuthnot group subsidiary, Secure Trust Bank, which is investing millions of pounds to fund new lending.
Arbuthnot Latham, a private bank, in which Angest owns a majority stake, and which is also part of the Arbuthnot group, has offered a £5m loan to the Conservative Party at 3.5% interest. The loan is listed on the official Electoral Commission register but a Conservative Party spokesman described it as a ‘credit facility’ which the Party had not drawn upon.
A spokesman for Everyday Loans claimed the company was a responsible lender. He said the firm does not provide ‘payday loans’ nor is it a ‘short-term lender’.
He said customers had to borrow over a minimum of 13 months and added: ‘Everyday Loans provides loans to customers who are underserved by the high street banks. If Everyday Loans did not provide this service those looking for loans would have to approach payday loan companies, pawnbrokers or home collected credit companies where interest rates would be very much higher.’
He said: ‘We are not engaged or plan to engage in payday lending. The interest rate charged on [our] loans reflects the risks involved in lending to the individual borrowers. The rates we charge are typically 3 times less than the representative rates of lenders like the home collected credit companies and 20 times less than payday lenders.’
Asked whether the firm or its chairman and chief executive Henry Angest had discussed the company’s business with the prime minster or the government, the spokesman added: ‘We can confirm that we have not discussed the business of Everyday Loans Limited with either the Conservative Party, the current Government or Civil Servants.’
Angest is the second leading Conservative donor with a connection to a high-risk lending company. Adrian Beecroft runs Dawn Capital Investments, a private investors fund, which has a major stake in Wonga, one of Britain’s best-known and fastest growing payday lenders.
Beecroft, who is also a government adviser, has given almost £800,000 to the Conservatives since 2006, most recently contributing more than £100,000 last December. Wonga’s turnover has trebled to almost £185m the last year.
Research by the Bureau also shows that these high-cost lending companies are often heavily reliant on the leading high street banks for funding and set up costs.
Despite widespread criticism that the major banks are reluctant to lend to small businesses and entrepreneurs planning start-ups, payday lenders have found them willing partners.
One major payday firm, US-based Lending Stream, describes Barclays Bank, which currently lends to businesses at 5.1% APR, as a major ‘strategic partner’.
3,378% interest rate
The firm, owned by Delaware-registered Global Analytics Holdings Inc, had a £32.7m turnover in 2011 with 142,000 British customers borrowing £31.2m. Its customers pay 3,378% APR to borrow from it.
The firm’s Californian-based boss Krishna Gopinathan claims he founded the firm to ‘give back’ and to ‘empower’ people with low access to credit.
How much Barclays lends the firm is not disclosed, but it has a fixed charge over the company’s deposits providing, according to Lending Stream, ‘integrated banking solutions … lending, risk management, trade, cash and liquidity management, and specialist asset and sales financing’.
Barclays, which at one stage sought a taxpayer-funded government bail out before instead reaching a deal with Middle East investors, is also involved with several other high-cost lenders.
Barclays Capital, its investment arm, lent £75m to Everyday Loans Limited according to its filings to Companies House to provide ‘funding for the provision of consumer finance lending to customers’, until this was paid off when the firm was bought out last year.
According to documents filed at Companies House the bank also has a charge over credit balances facility for TxTLoan Limited, a firm offering 4,474% interest loans through mobile text messaging.
Barclays confirmed it had previously been involved with firms in the industry. But a spokeswoman for Barclays Bank said this was no longer the case. ’We do not lend to any of these companies,’ she said.
Other major banks are also involved in funding the industry. HSBC provided seed capital for Money in Advance Limited, a firm registered in the British Virgin Islands, the offshore tax haven, which explains, for example, that it will loan customers £250 for 22 days and collect £305 – an interest rate of 3,697% APR.
Taxpayer-owned Royal Bank of Scotland (RBS), which was bailed out after the financial collapse in 2008 with £45bn from the government, is another that has invested in the high-cost credit sector.
RBS funds Amigo Loans Limited, owned by entrepreneur James Benamor, who is paid £890,000 a year. His firm, which says it has now stopped doing payday loans, was, until recently lending at 199% APR. The Bureau has included the company in its data as the financial records cover the period when it was still operating as a payday lender.
Before the bail out the bank, though subsidiary NatWest, helped Nottingham city jeweller Henry Hallam build up his Money Shop business before he sold out to US-giant Dollar Finance in a deal in 1999.
Its website advertised: ‘Borrow £400 for 31 days, pay £400 interest’.
Taxpayer-owned Royal Bank of Scotland, which was bailed out after the financial collapse in 2008 with £45bn from the government, is another that has invested heavily in the payday business.
At the end of last year it replaced these with new longer term ‘guarantor loans… Based on how much your friends trust you, NOT your credit score’, it says. These loans charge 49.9% APR in interest.
Lloyds TSB, which took £5.5bn from the taxpayer to save it from collapse, is another high-street name involved in funding the payday market.
The bank helped fund Instant Cash Loans Limited, owners of the Money Shop.
Investment in the industry is flowing in from the US too. The Bureau’s research highlights the growing involvement of US firms in the British payday industry at a time when such companies are facing tighter regulation of their activities at home.
Rapid growth
Dollar Finance has overseen the massive growth of the Money Shop taking it from a company with 34 staff and a turnover of £2.9m in 1998 to one with 2,300 staff and an income of £172.3m today.
The success of its Money Shop stores has made Dollar Finance, which is owned by Philadelphia-based DFC Global Corporation, keen to expand.
In 2009 it acquired Express Finance (Bromley) from Michael Thorpe, who, before the buy out, had employed his 25-year-old son and his wife to help run the business, for almost £5m. In the three years after the takeover the company’s revenues increased tenfold to £51.7m and it is making profits of almost £17m a year.
In April 2011 Dollar Finance expanded further, buying internet loans business MEM Consumer Finance, which trades as PaydayUK and issued £30m worth of loans last year.
Expansion of the payday loans industry in the US has been curtailed by a growing clampdown on high interest rates by state governments. Some states have even banned payday loans.
In 13 states the loans are either illegal or, while not explicitly banned, prohibited by strict usury limits – hard interest rate caps on the annual percentage rate.
Since 2007 a federal law has also capped lending to military personnel at a maximum of 36%.
Dollar Finance is based in Pennsylvania, where state laws cap interest rates on short term loans at 30% compared to the 2,949% APR offered on its PayDayUK website this week.
In 13 states the loans are either illegal or, while not explicitly banned, prohibited by strict usury limits – hard interest rate caps on the annual percentage rate.
Cash Choice UK Limited is another firm owned in a US state where its interest rates, advertised on its website as 3,491% APR, would be outlawed.
The firm is owned by US citizen David Vickers, president of Cash Choice Inc, based in Atlanta, Georgia, where payday loans have been banned for more than 100 years.
A statement on the Georgia governor’s website says: ‘Payday loans have become a multibillion dollar industry in recent years. Nevertheless, it is illegal in Georgia to make a payday loan.
‘(The) law authorizes felony and racketeering charges against violators, as well as fines of up to $25,000 per violation and a possible jail sentence of 25 years.’
The risks of similar legislation in Britain is reflected in the annual report of Texas-based Cash America International Inc, owners of one of the biggest UK payday lending firms. CashEuroNetUK, which trades as QuickQuid and Pounds To Pocket, and advertises interest rates of 1,734% APR.
In Texas the state senate has been pushing for new laws that would put limits on payday and short-term loan firms charging interest rates of 1,000%.
The latest proposal would limit customers to one payday loan at a time. The size of the loans would also be limited by their monthly income and the loan could only be renewed four times.
With the UK operation generating revenues of £198m, Cash America warned its shareholders: ‘If prescriptive regulations are adopted  (in the UK) the Company’s compliance costs will be significantly increased’.
RBS and Lloyds did not respond to the Bureau’s questions.

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Organized Crime Ring The Pharmaceutical Drug Cartel

English: Example of promotional "freebies...
English: Example of promotional "freebies" given to physicians by pharmaceutical companies (Photo credit: Wikipedia)




By Dr. Mercola
Even though the video above is a few years old now and bigger fines of $3 billion have been assessed to GlaxoSmithKline two years ago, it is a good summary of how the drug cartels operate.
Did you know that nearly 20 percent of corporate crime is being committed by companies that make products for your health?
Sad but true, no less than 19 pharmaceutical companies made AllBusiness.com's Top 100 Corporate Criminals List for the 1990s, and the trend has continued if not increased into the 21st Century. Crimes committed by some of the most well-known drug companies include:
  • Fabricated studies
  • Covering up serious problems with their drugs
  • False claims
  • Bribery, illegal kick-backs, and defrauding Medicare, Medicaid, and even the FDA
  • Immoral threat and intimidation tactics (recall the international drug company Merck actually had a hit list of doctors to be "neutralized" or discredited for criticizing the lethally dangerous painkiller Vioxx. "We may need to seek them out and destroy them where they live," a Merck employee wrote, according to an email excerpt read in court.)

Pulling Back the Curtain on Organized Crime

Fortunately, organizations like the Bureau of Investigative Journalism,1 the False Claims Act Legal Center,2 and Politicol News3 have all started investigating and publicizing the criminal actions these companies have been getting away with for decades.
Most recently, the British Medical Journal’s blog featured an article4 by former BMJ editor and director of the United Health Group’s chronic disease initiative, Richard Smith, aptly titled: "Is the Pharmaceutical Industry Like the Mafia?"
The piece is also the foreword to the book, Deadly Medicines and Organized Crime: How Big Pharma Has Corrupted Healthcare, written by Peter Gøtzsche, head of the Nordic Cochrane Centre, which is considered the gold standard in terms of independent research reviews.
In related news, a recently published study concluded that most drug commercials are misleading or outright false.5 There’s a literal mountain of evidence proving that pharmaceutical companies are untrustworthy at best, and criminal at worst. And yet they’re the backbone of our modern “healthcare” system...
Even Forbes Magazine6 recently published an article with the provocative headline: "Is Big Pharma Addicted To Fraud?" and asked out loud “whether any aspect of the pharmaceutical business can be trusted.”

Is It Fair to Compare the Pharmaceutical Industry with the Mafia?

If you depend on conventional medical care to address your health problems, then you’re basically entrusting your health to organizations that clearly have far more interest in their bottom line than your health. In his article, Is the Pharmaceutical Industry Like the Mafia? Smith writes:7
“The characteristics of organized crime, racketeering, is defined in US law as the act of engaging repeatedly in certain types of offence, including extortion, fraud, federal drug offenses, bribery, embezzlement, obstruction of justice, obstruction of law enforcement, tampering with witnesses, and political corruption.

Peter [Gøtzsche] produces evidence, most of it detailed, to support his case that pharmaceutical companies are guilty of most of these offenses.
And he is not the first to compare the industry with the Mafia or mob. He quotes a former vice-president of Pfizer, who has said:
‘It is scary how many similarities there are between this industry and the mob. The mob makes obscene amounts of money, as does this industry. The side effects of organized crime are killings and deaths, and the side effects are the same in this industry. The mob bribes politicians and others, and so does the drug industry…’
Smith also notes that many more people are killed by the pharmaceutical industry than the mob. Prescription drugs also kill far more people than illegal drugs, and while most major causes of preventable deaths are declining, those from prescription drug use are on the incline.8, 9
For example, prescription drug fatalities more than doubled among teens and young adults between 2000 and 2008, and more than tripled among people aged 50 to 69.
Legal prescription drug abuse is a silent epidemic, and is part of the reason why the modern American medical system has become one of the leading causes of death and injury in the United States.

An estimated 450,000 preventable medication-related adverse events occur in the US every year. Merck’s painkiller Vioxx alone killed more than 60,000 people within a few years’ time before being withdrawn from the market.
“... [T]he benefits of drugs are exaggerated, often because of serious distortions of the evidence behind the drugs, a ‘crime’ that can be attributed confidently to the industry,” Smith writes.“The great doctor William Osler famously said that it would be good for humankind and bad for the fishes if all the drugs were thrown into the sea.
He was speaking before the therapeutic revolution in the middle of the 20th century that led to penicillin, other antibiotics, and many other effective drugs, but Peter comes close to agreeing with him and does speculate that we would be better off without most psychoactive drugs, where the benefits are small, the harms considerable, and the level of prescribing massive.”

'Science-Based' Medicine Has Fallen on Its Own Sword

There are many areas within which corruption can take root, and the drug industry has nurtured corruption in most if not all of them. It would require an entire book to begin to address them all, which is exactly what Peter Gøtzsche has done in his book, Deadly Medicines and Organized Crime: How Big Pharma Has Corrupted Healthcare.
One of the most dangerous forms of corruption is that which occurs within medical science. For example, according to data from Thomson Reuters,10 the number of retractions of scientific studies have increased more than 15-fold since 2001, and a review11 published just last year showed that nearly 75 percent of all retracted drug studies were attributed to “scientific misconduct,” which includes:
  • Data falsification or fabrication
  • Questionable veracity
  • Unethical author conduct
  • Plagiarism
Corruption of science is incredibly serious, as health care professionals rely on published studies to make treatment recommendations, and large numbers of patients can be harmed when false findings are published. The average lag time between publication of the study and the issuing of a retraction is 39 months. And that's if the misconduct is ever caught at all. What’s worse, about 32 percent of retractions are never published,12 leaving the readers completely in the dark about the inaccuracies in those studies!

Poster Children for Corrupted Science

One clear example of how deadly corrupted science can be is the painkiller Vioxx. There were many indications that this would be a dangerous drug, despite Merck’s claims, and I warned my readers to avoid it before its FDA approval in 1999. In 2008, four years after the drug was withdrawn from the market, an editorial13 published in the Journal of the American Medical Association(JAMA) suggested Merck might have deliberately manipulated dozens of academic documents published in the medical literature, in order to promote Vioxx under false pretenses.
The diabetes drug Avandia is another potent example. Between 1999 and 2007, Avandia is estimated to have caused over 80,000 unnecessary heart attacks,14 although the actual numbers of people harmed or killed by the drug is still largely unknown. Avandia is a poster child for the lethal paradigm of corrupted science as GlaxoSmithKline (GSK), the manufacturer of Avandia,hid damaging information about the drug for over 10 years, as they knew it would adversely affect sales!
Two years ago, GSK agreed to a $3 billion settlement over the sales and marketing practices of several of its drugs, including Avandia. This was the largest federal drug-company settlement in US history, surpassing the $2.3 billion paid by Pfizer in 2009(see video above) for illegally promoting off-label uses of four of its drugs. Most recently, GSK’s crooked ways made international headlines yet again when Chinese authorities arrested four of the company’s senior executives on charges of cash and sexual bribery. Another 18 GSK employees and medical personnel were also reportedly detained.15 As reported by The Guardian:16
“The Chinese authorities have accused GSK of acting like a criminal "godfather", using a network of 700 middlemen and travel agencies to bribe doctors with £320m [$489 million] cash and sexual favors in return for prescribing GSK drugs. Gao said the police have evidence that bribery has been a 'core part' of GSK China's business model since 2007.” [Emphasis mine]
As Smith writes in the featured article:
“The drug industry has systematically corrupted science to play up the benefits and play down the harms of their drugs... the industry has bought doctors, academics, journals, professional and patient organizations, university departments, journalists, regulators, and politicians. These are the methods of the mob.
The book doesn’t let doctors and academics avoid blame... doctors and academics are supposed to have a higher calling. Laws that are requiring companies to declare payments to doctors are showing that very high proportions of doctors are beholden to the drug industry and that many are being paid six figures sums for advising companies or giving talks on their behalf. It’s hard to escape the conclusion that these ‘key opinion leaders’ are being bought. They are the ‘hired guns’ of the industry.
And, as with the mob, woe be to anybody who whistleblows or gives evidence against the industry. Peter tells several stories of whistleblowers being hounded, and John Le Carré’s novel describing drug company ruthlessness became a bestseller and a successful Hollywood film.”

New Study Finds Most Drug Commercials Misleading

In related news, a recent study17 concluded that a majority of American drug commercials—60 percent of prescription drug ads, and 80 percent of ads for over-the-counter (OTC) drugs—are either misleading or outright false. Lead author Adrienne E. Faerber told Scientific American:18
“There were cases of blatant lying, but these half-truths form more than half of our analysis.”
In all, the researchers analyzed 84 prescription and 84 OTC drug ads aired on major networks between 2008 and 2010. Ads deemed to be “potentially misleading” omitted important information, exaggerated information, made lifestyle associations, or expressed opinions. Ads making false claims were either factually false or unsubstantiated. Ads promoting erectile dysfunction drugs were among the worst offenders. OTC drugs, which are overseen by the Federal Trade Commission and not the FDA, were also more likely to be misleading or false. Overall, a mere 33 percent of drug ads were found to be “objectively true.”
Interestingly enough, other research published in the journal Psychological Science19, 20 found that warnings of adverse side effects in drug ads can actually backfire over time. While initially making viewers cautious, over the course of time people tend to ignore the warnings. People even began to see the warning as "an indication of the firm's honesty and trustworthiness!" According to the authors:
“In four studies, we demonstrated this phenomenon. For example, participants could buy cigarettes or artificial sweeteners after viewing an ad promoting the product. Immediately afterward, the quantity that participants bought predictably decreased if the ad they saw included a warning about adverse side effects. With temporal distance (product to be delivered 3 months later, or 2 weeks after the ad was viewed), however, participants who had seen an ad noting the benefits of the product but warning of risky side effects bought more than those who had seen an ad noting only benefits.”

But Who Is Behind the Drug Companies?

While it is true that there were fines of $2 billion and $3 billion against the drug companies, that really pales in comparison to the fines being leveraged against the financial industry. JP Morgan will likely receive an $11 billion dollar fine.21 This level of fine doesn’t even begin to come close to what these criminal institutions really deserve for how they have ruined the US economy.
But keeping the article focused on health, you have to wonder if there is some common thread here and I believe there is.  The drug companies are typically owned by other corporations. Just as the featured video shows, the shell game that Pfizer played shielded them by developing tiered lower-level corporations. What is rarely ever explained is that the corporate shield also runs in the other direction. The primary owners of most of these drug companies are the international banksters that are responsible for most of the problems we see not only in the health arena, but in all areas of the world.

How To Avoid Becoming a Disease Statistic

Ultimately, the take-home message here is that even if a drug or treatment is "backed by science," this in no way guarantees it is safe or effective. Likewise, if an alternative treatment has not been published in a medical journal, it does not mean it is unsafe or ineffective. Also, when a drug or treatment does come with warnings, do yourself a favor and don’t tuck that information into some recessed corner in the back of your mind!
You've got to use all the resources available to you, including your own sense of common sense and reason, true experts' advice and other's experiences, to determine what medical treatment or advice will be best for you in any given situation. I advise you to remain skeptical but open -- even if it is something I'm saying, you need to realize that YOU are responsible for your and your family's health, not me, and certainly not drug companies trying to sell their wares and convince you to take dangerous "symptom-cover-ups" disguised as science-based solutions.
When it comes to health, an ounce of prevention is certainly better than a pound of cure, especially when the cure comes in a pill. Please keep in mind that leading a common-sense, healthy lifestyle is your best bet to achieve and maintain a healthy body and mind. And while conventional medical science may flip-flop back and forth in its recommendations, there are certain basic tenets of optimal health (and healthy weight) that do not change, including the following:
  1. Proper Food Choices: For a comprehensive guide on which foods to eat and which to avoid, see my nutrition plan. Generally speaking, you should be looking to focus your diet on whole, ideally organic, unprocessed foods. For the best nutrition and health benefits, you will want to eat a good portion of your food raw.
    2. Avoid sugar, and fructose in particular. All forms of sugar have toxic effects when consumed in excess, and drive multiple disease processes in your body, not the least of which is insulin resistance, a major cause of chronic disease and accelerated aging. I believe the two primary keys for successful weight management are severely restricting carbohydrates (sugars, fructose, and grains) in your diet, and increasing healthy fat consumption. This will optimize insulin and leptin levels, which is key for maintaining a healthy weight and optimal health.
  2. Regular exercise: Even if you're eating the healthiest diet in the world, you still need to exercise to reach the highest levels of health, and you need to be exercising effectively, which means including high-intensity activities into your rotation. High-intensity interval-type training boosts human growth hormone (HGH) production, which is essential for optimal health, strength and vigor. HGH also helps boost weight loss. So along with core-strengthening exercises, strength training, and stretching, I highly recommend that twice a week you do Peak Fitness exercises, which raise your heart rate up to your anaerobic threshold for 20 to 30 seconds, followed by a 90-second recovery period.
  3. Stress Reduction: You cannot be optimally healthy if you avoid addressing the emotional component of your health and longevity, as your emotional state plays a role in nearly every physical disease -- from heart disease and depression, to arthritis and cancer. Meditation, prayer, social support and exercise are all viable options that can help you maintain emotional and mental equilibrium. I also strongly believe in using simple tools such as the Emotional Freedom Technique (EFT) to address deeper, oftentimes hidden, emotional problems.
  4. Drink plenty of clean water.
  5. Maintain a healthy gut: About 80 percent of your immune system resides in your gut, and research is stacking up showing that probiotics—beneficial bacteria—affect your health in a myriad of ways; it can even influence your ability to lose weight. A healthy diet is the ideal way to maintain a healthy gut, and regularly consuming traditionally fermented foods is the easiest, most cost effective way to ensure optimal gut flora.
  6. Optimize your vitamin D levels: Research has shown that increasing your vitamin D levels can reduce your risk of death from ALL causes. For practical guidelines on how to use natural sun exposure to optimize your vitamin D benefits, please see my previous article on how to determine if enough UVB is able to penetrate the atmosphere to allow for vitamin D production in your skin.
  7. Avoid as many chemicals, toxins, and pollutants as possible: This includes tossing out your toxic household cleaners, soaps, personal hygiene products, air fresheners, bug sprays, lawn pesticides, and insecticides, just to name a few, and replacing them with non-toxic alternatives.
  8. Get plenty of high quality sleep: Regularly catching only a few hours of sleep can hinder metabolism and hormone production in a way that is similar to the effects of aging and the early stages of diabetes. Chronic sleep loss may speed the onset or increase the severity of age-related conditions such as type 2 diabetes, high blood pressure, obesity, and memory loss.

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Wednesday, October 16, 2013

Battle of the Hook Pre Show, Liberty's Kids 35, James Armistead




Battle of the Hook Pre Show.  Liberty's Kids episode number 35, James Armistead.  We are now only a few short days away from the event of the Battle of the Hook here in Gloucester, Virginia.  If you have not heard about this event until now, what rock have you been hiding under?  This is the event of the year.  An American Revolutionary War Reenactment and one of the largest and most complete ever seen in one location.  If you are just hearing about this now and you have the time to spare and do not mind traveling, we highly recommend it.  The are here is sold out of rooms but Williamsburg still has rooms left and is only about a 30 minute drive away along one of the most incredible roads in the nation.

Below are directions on how to get to Gloucester from the main points around Virginia.



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Anti Federalist Papers No. 24, Objections to A Standing Army (Part 1)

BRUTUS

The first essay is taken from the ninth letter of "BRUTUS" which appeared in The New-York Journal, January 17, 1788.

. . . . Standing armies are dangerous to the liberties of a people. . . . [If] necessary, the truth of the position might be confirmed by the history of almost every nation in the world. A cloud of the most illustrious patriots of every age and country, where freedom has been enjoyed, might be adduced as witnesses in support of the sentiment. But I presume it would be useless, to enter into a labored argument, to prove to the people of America, a position which has so long and so generally been received by them as a kind of axiom.

Some of the advocates for this new system controvert this sentiment, as they do almost every other that has been maintained by the best writers on free government. Others, though they will not expressly deny, that standing armies in times of peace are dangerous, yet join with these in maintaining, that it is proper the general government should be vested with the power to do it. I shall now proceed to examine the arguments they adduce in support of their opinions.

A writer, in favor of this system, treats this objection as a ridiculous one. He supposes it would be as proper to provide against the introduction of Turkish Janizaries, or against making the Alcoran a rule of faith.'
{1 A citizen of America [Noah Webster], An Examination Into the Leading Principles of the Federal Constitution proposed by the late Convention held at Philadelphia. With Answers to the Principal Objections Raised Against the System (Philadelphia, 1787), reprinted in Ford (ed.), Pamphlets pp. 29-65.}

From the positive, and dogmatic manner, in which this author delivers his opinions, and answers objections made to his sentiments-one would conclude, that he was some pedantic pedagogue who had been accustomed to deliver his dogmas to pupils, who always placed implicit faith in what he delivered.

But, why is this provision so ridiculous? Because, says this author, it is unnecessary. But, why is it unnecessary? Because, "the principles and habits, as well as the power of the Americans are directly opposed to standing armies; and there is as little necessity to guard against them by positive constitutions, as to prohibit the establishment of the Mahometan religion." It is admitted then, that a standing army in time of peace is an evil. I ask then, why should this government be authorised to do evil? If the principles and habits of the people of this country are opposed to standing armies in time of peace, if they do not contribute to the public good, but would endanger the public liberty and happiness, why should the government be vested with the power?

 No reason can be given, why rulers should be authorised to do, what, if done, would oppose the principles and habits of the people, and endanger the public safety; but there is every reason in the world, that they should be prohibited from the exercise of such a power. But this author supposes, that no danger is to be apprehended from the exercise of this power, because if armies are kept up, it will be by the people themselves, and therefore, to provide against it would be as absurd as for a man to "pass a law in his family, that no troops should be quartered in his family by his consent." This reasoning supposes, that the general government is to be exercised by the people of America themselves. But such an idea is groundless and absurd. There is surely a distinction between the people and their rulers, even when the latter are representatives of the former. They certainly are not identically the same, and it cannot be disputed, but it may and often does happen, that they do not possess the same sentiments or pursue the same interests. I think I have shown [in a previous paper] that as this government is constructed, there is little reason to expect, that the interest of the people and their rulers will be the same.

Besides, if the habits and sentiments of the people of America are to be relied upon, as the sole security against the encroachment of their rulers, all restrictions in constitutions are unnecessary; nothing more is requisite, than to declare who shall be authorized to exercise the powers of government, and about this we need not be very careful-for the habits and principles of the people will oppose every abuse of power. This I suppose to be the sentiments of this author, as it seems to be of many of the advocates of this new system. An opinion like this, is as directly opposed to the principles and habits of the people of America, as it is to the sentiments of every writer of reputation on the science of government, and repugnant to the principles of reason and common sense.

The idea that there is no danger of the establishment of a standing army, under the new constitution, is without foundation.

It is a well known fact, that a number of those who had an agency in producing this system, and many of those who it is probable will have a principal share in the administration of the government under it, if it is adopted, are avowedly in favor of standing armies. It is a language common among them, "That no people can be kept in order, unless the government have an army to awe them into obedience; it is necessary to support the dignity of government, to have a military establishment. And there will not be wanting a variety of plausible reasons to justify the raising one, drawn from the danger we are in from the Indians on our frontiers, or from the European provinces in our neighborhood. If to this we add, that an army will afford a decent support, and agreeable employment to the young men of many families, who are too indolent to follow occupations that will require care and industry, and too poor to live without doing any business, we can have little reason to doubt but that we shall have a large standing army as soon as this government can find money to pay them, and perhaps sooner.

A writer, who is the boast of the advocates of this new constitution, has taken great pains to show, that this power was proper and necessary to be vested in the general government.
He sets out with calling in question the candor and integrity of those who advance the objection; and with insinuating, that it is their intention to mislead the people, by alarming their passions, rather than to convince them by arguments addressed to their understandings.

The man who reproves another for a fault, should be careful that he himself be not guilty of it. How far this writer has manifested a spirit of candor, and has pursued fair reasoning on this subject, the impartial public will judge, when his arguments pass before them in review.
He first attempts to show, that this objection is futile and disingenuous, because the power to keep up standing armies, in time of peace, is vested, under the present government, in the legislature of every state in the union, except two. Now this is so far from being true, that it is expressly declared by the present articles of confederation, that no body of forces "Shall be kept up by any state, in time of peace, except such number only, as in the judgment of the United States in Congress assembled, shall be deemed requisite to garrison the forts necessary for the defence of such state." Now, was it candid and ingenuous to endeavour to persuade the public, that the general government had no other power than your own legislature have on this head; when the truth is, your legislature have no authority to raise and keep up any forces?

He next tells us, that the power given by this constitution, on this head, is similar to that which Congress possess under the present confederation. As little ingenuity is manifested in this representation as in that of the former.

I shall not undertake to inquire whether or not Congress are vested with a power to keep up a standing army in time of peace; it has been a subject warmly debated in Congress, more than once, since the peace; and one of the most respectable states in the union, were so fully convinced that they had no such power, that they expressly instructed their delegates to enter a solemn protest against it on the journals of Congress, should they attempt to exercise it.

But should it be admitted that they have the power, there is such a striking dissimilarity between the restrictions under which the present Congress can exercise it, and that of the proposed government, that the comparison will serve rather to show the impropriety of vesting the proposed government with the power, than of justifying it.
It is acknowledged by this writer, that the powers of Congress, under the present confederation, amount to little more than that of recommending. If they determine to raise troops, they are obliged to effect it through the authority of the state legislatures. This will, in the first instance, be a most powerful restraint upon them, against ordering troops to be raised. But if they should vote an army, contrary to the opinion and wishes of the people, the legislatures of the respective states would not raise them. Besides, the present Congress hold their places at the wilt and pleasure of the legislatures of the states who send them, and no troops can be raised, but by the assent of nine states out of the thirteen. Compare the power proposed to be lodged in the legislature on this head, under this constitution, with that vested in the present Congress, and every person of the least discernment, whose understanding is not totally blinded by prejudice, will perceive, that they bear no analogy to each other. Under the present confederation, the representatives of nine states, out of thirteen, must assent to the raising of troops, or they cannot be levied. Under the proposed constitution, a less number than the representatives of two states, in the house of representatives, and the representatives of three states and an half in the senate, with the assent of the president, may raise any number of troops they please.

 The present Congress are restrained from an undue exercise of this power; from this consideration, they know the state legislatures, through whose authority it must be carried into effect, would not comply with the requisition for the purpose, [if] it was evidently opposed to the public good. The proposed constitution authorizes the legislature to carry their determinations into execution, without intervention of any other body between them and the people. The Congress under the present form are amenable to, and removable by, the legislatures of the respective states, and are chosen for one year only. The proposed constitution does not make the members of the legislature accountable to, or removable by the state legislatures at all; and they are chosen, the one house for six, and the other for two years; and cannot be removed until their time of service is expired, let them conduct ever so badly. The public will judge, from the above comparison, how just a claim this writer has to that candor he asserts to possess. In the mean time, to convince him, and the advocates for this system, that I possess some share of candor, I pledge myself to give up all opposition to it, on the head of standing armies, if the power to raise them be restricted as it is in the present confederation; and I believe I may safely answer, not only for myself, but for all who make the objection, that they will [not] be satisfied with less.

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