Copyright 2002 by Thomas D. Schauf
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America's Hope to Cancel Bank Loans Without Going to Court


(A true story. Names are changed to protect the identity of those involved.)

This is a true story every American must hear. I met with a Midwest rancher who showed me documentation of how promissory notes/security agreements are used like money to issue bank loan checks.


The rancher owned a commercial dry lot feeding facility for cattle. As customers buy, they need financing. The rancher made an arrangement with the bank to give the customer a bank loan check without it costing the bank one cent to issue.

The rancher had the customer sign a promissory note. Unknown to the customer, the rancher stamped the back of the original promissory note "pay to the order of Bank # 1 Colorado With Recourse Rancher Trust." The copy of the promissory note given back to the customer never showed the stamp altering the note into money. The rancher hands the promissory note to the bank and the bank stamps the back of the original promissory note "pay to the order of Bank # 1 Colorado Without Recourse." This means that the bank receives the value of the promissory note just like a check, which also says 'pay to the order of.'

The first stamp marked "with recourse" made the rancher and customer liable for the note. When the bank stamped the note "without recourse" the bank was no longer liable for repaying the note. The bank then used the note (money) to fund the bank loan check to the customer. Over $1.6 million were created in 10 months. The bank never used one cent of their own money to fund the check and received $1.6 million plus interest in return. It was pure profit. The money loaned to the customer came from the same customer, because the note was altered and changed. Many ranchers and banks were involved in this practice.