The Minnesota Law Library has reported that of all the documents digitalized and made public through its website the most searched-for records are for the Credit River Case (First National Bank of Montgomery v. Jerome Daly (1968)). What?s more, an internet search returns a dozen or more citations that typically refer to it as ?the most important legal decision ever decided by a jury,? and ?legally sound.? Remarkable. More than fifty years after its occurrence Credit River is frequently sought out and a prominent topic in several contemporary websites? Yet it?s safe to say that most people have never heard of it. What was it about? Mass murder, the largest heist in the state?s history, corporate fraud, steamy illicit sex, a Ponzi swindle, political corruption? Not close. Credit River was about money, banking, and a small real estate mortgage. Why an enduring attraction? As importantly, is Credit River relevant today?
In Minnesota, no one was more committed to pursuing and promoting such ideas than Jerome Daly (1926-1996) whose work and cases merit revisiting because of their notoriety at the time, Daly's persistence in pursuing, in the face of setback after setback, his myriad causes, and because some of Daly's issues and cases have contemporary relevance. The most persistent of those causes, in the Credit River case, was his objection to the long-standing bank practice of lending based upon "fractional reserves" wherein banks lend by simply creating for the borrower a credit upon their books or money "out of thin air." In this practice they are abetted, according to Daly, by the Federal Reserve which itself created fiat "money" not based upon the constitutionally required "hard money" backing of gold or silver. Astonishingly, in the Credit River case (1968) a Minnesota jury of twelve agreed with Daly that bank mortgages and foreclosures are illegal, null, and void. The case continues to this day to be cited by like-minded believers as ". . .the most important legal decision ever decided by a jury" and is one of the most frequently hunted cases at the Minnesota Law Library.
Although Daly's pursuit of financial and tax "wrongs" involved what numerous courts called "fanciful notions" and was compromised by copious conspiracy theories, they nevertheless are worthy of reconsideration in light of our most recent Great Recession caused by irresponsible bank lending and the Federal Reserve's more recent creations of "money" out of "thin air" through quantitative easing and other measures.
The author of this article, Thomas L. Olson, died on September 29, 2020, at age 78. He earned a Ph.D. in American history from the University of Minnesota. He is the author of "Sheldon's Gift: Music, Movies and Melodrama in the Desirable City" (2009), which centers on Red Wing's Sheldon Theater. His article "Blockbusters: Minnesota's Movie Men Slug it out with Studio Moguls, 1938-1948" and several book reviews are posted on this website.