The seizure of monetary control involves a series of several steps, in the approximate order shown below:

A banking monopoly—that is, a central bank or central banking system—is established. The monetary function of banks, as we saw earlier, is to store the underlying commodity (e. g., gold or silver) and to issue paper IOUs. Under the new monopolistic system, only government banks or officially recognized banks are permitted to serve this function, and market competitors are threatened with fines or imprisonment.
Contracts based on moneys other than the paper IOUs issued by the new central bank are prohibited through legal tender laws.
The new bank ceases to redeem paper IOUs into gold or silver. Each unit of paper currency, as we have seen, represented a contract for such redemption by the bearer; all such contracts are now suspended unilaterally. In the United States, such redemptions were suspended during World War I, and the suspensions remained in effect thereafter. Because banking and monetary competition has already been coercively prohibited, customers are obliged to continue to patronize the central bank even in the wake of its fraudulent (p. 4.5:10) action.