NATIONAL SYSTEM OF CURRENCY AND EXCHANGE REQUIRED.
Inadequacy and Absurdity of present Medium of Exchange--Necessity
for new National Currency for Home Trade--Example from Iron
Currency of Sparta--Labour Notes of Guernsey--Gold and Silver mere
Commodities--All four Reforms must be combined.
In this chapter we shall elucidate the remaining two propositions of
the League, on the important complementary reforms necessary to be
introduced for the expulsion of human slavery from the face of the
land, and the full emancipation of industry from the trammels of a
false and pernicious system of Currency and Exchange. The sixth and
seventh resolutions read as follows:--
“That the National Currency should be based on real, consumable wealth,
or on the _bona fide_ credit of the State, and not upon the variable
and uncertain amount of scarce metals; because a currency depending on
such a basis, however suitable in past times, or as a measure of value
in present international commerce, has now become, by the increase of
population and wealth, wholly inadequate to perform the functions of
equitably representing and distributing that wealth; thereby rendering
all commodities liable to perpetual fluctuation in price, as those
metals happen to be more or less plentiful in any country; increasing
to an enormous extent the evils inherent in usury, and in the banking
and funding systems (in support of which a legitimate function of the
law--the PROTECTION of property--is distorted into an instrument for
the CREATION of property to a large amount for the benefit of a small
portion of society belonging to what are called vested interests);
because, from its liability to become locally or nationally scarce or
in excess, that equilibrium which should be maintained between the
production and consumption of wealth is destroyed; because, being of
intrinsic value in itself, it fosters a vicious trade in money, and a
ruinous practice of commercial gambling and speculation; and, finally,
because, under the present system of society, it has become confessedly
the ‘root of all evil’ and the main support of that unholy worship of
Mammon which now so extensively prevails, to the supplanting of all
true religion, natural and revealed.
“That in order to facilitate the transfer of property or service, and
the mutual interchange of wealth among the people, to equalise the
demand and supply of commodities, to encourage consumption as well
as production, and to render it as easy to sell as to buy, it is an
important duty of the State to institute in every town and city public
marts or stores for the reception of all kinds of exchangeable goods,
to be valued by disinterested officers appointed for the purpose,
either upon a corn or a labour standard; the depositors to receive
symbolic notes representing the value of their deposits, such notes to
be made legal currency throughout the country, enabling their owners to
draw from the public stores to an equivalent amount, thereby gradually
displacing the present reckless system of competitive trading and
shopkeeping,--a system which, however necessary, or unavoidable in
the past, now produces a monstrous amount of evil, by maintaining a
large class living on the profits made by the mere sale of goods, on
the demoralising principle of buying cheap and selling dear, totally
regardless of the ulterior effects of that policy upon society at large
and the true interests of humanity.”
Add to the gigantic fraud of the land-usurpers the hardly less
monstrous fraud of the money-changers in daring to make two particular
metals (falsely called precious) the sole basis of that currency which
is the life’s blood of society, without which exchanges cannot be
safely effected, and you see capped before you the climax of iniquity.
These precious metals being articles of commerce--mere merchandise,
like iron or cotton, at the same time that they are made the sole basis
of our instruments of exchange, it follows, as a necessary consequence,
that whoever can, by commerce, monopolise these precious metals can, by
so doing, monopolise at the same time the basis of our currency, and so
leave us without any instruments of exchange at all, but what may be
convertible, upon their own fraudulent terms, into those two favoured
metals, which their commercial wealth has enabled them to monopolise.
The false principle at the root of our present system is, that _money_
or the _medium of exchange_ should be itself a thing of intrinsic
value. By this false principle there must be an expenditure of labour
equal to what is required to produce the equivalents it exchanges
for; and besides the absurdity of such misplaced, because wholly
useless, labour, it is manifestly ridiculous to suppose that any one
commodity (more especially an exceedingly scarce one, like gold) can
ever be obtained in sufficient abundance to represent adequately all
other commodities which may be produced _ad libitum_, to any extent
demanded by consumption, and which, without the intervention of gold
at all, might be interchanged from hand to hand, in one single week,
to an amount equal to fifty times the value of all the gold in the
country. It is like supposing a part of a thing to be equal to the
whole. Gold may be a good measure of value, and, as such, is perfectly
unobjectionable; but as an exclusive representative of value, or as the
sole basis of representation (which our present laws have virtually
made it, by constituting it the sole basis of our circulating medium),
it is to our productive and trading population what a single blanket or
a single suit of clothes would be, applied to the use of a whole family
consisting of divers persons of all ages and sizes. The strongest and
most important members of the political family get the best share of
the blanket; the others get the least, and some get none at all. As
well might the garments of a dwarf be expected to fit a giant, as
well might our legislators attempt to restore a full-grown bird to
the egg whence it was hatched, as attempt to tie down the population
and commerce of this great country to the Procrustean bed of Peel’s
monetary system as established by his laws of 1819 and 1844. That
system alone, were there no other causes in operation, _must sooner
or later produce a convulsion in this country, if it be not speedily
unmade by wiser and better men than its authors_. To pretend that the
rights of property exist in a country where such a monetary system
coexists with private ownership of the soil, is a monstrous perversion
of language. It is not the rights of property, but the wrongs of
robbery, that these land and money laws tend to conservate.
The prime necessity of man is to live: he cannot live without corn,
unless in the lowest condition of the savage; but he may not only live,
but live in comfort, without gold or silver. They are not the “staffs
of life,” however in our ignorance we may bow the knee to them as to
graven images. We invest them with supreme power, as superstition
invests its idols. The ancient fabulist who sketched the character of
_Midas_ seems to have written, by anticipation, a satire on modern
credulity. _Midas_ enjoyed the fatal gift of turning all he touched
into gold; his food was transmuted into the precious metal, and
starvation taught him that corn was the true standard of all that was
physically valuable. _Midas_ was the prototype of modern bullionists
and moneymongers. The Bank of England can now pave its floors with
gold; but what does it avail to the people? And yet was it not the
industry of the people that raised the ore from the mines, and brought
it hither by the sale or exchange of their labour, sustained by corn,
the produce of labour in another form? What was the _intrinsic_ value
of gold to _Midas_?
We must not confound the _qualities_ of a mineral with its
_properties_. Undoubtedly, the precious metals possess durability,
sameness, great value in small bulk, portability, resistance to wear
and tear, in a greater degree than any other substances; but these
qualities _per se_ do not constitute them _money_,--they do no more
than recommend them to mercantile nations as the best instruments of
their kind out of which money can be manufactured; it is the act of
the legislature, and that alone, which gives them the character and
force of a _legal tender_, without which they would not form part of
the currency of a nation. The legislature could confer the same power
on any other material, even the most worthless, as Lycurgus did on
iron, deprived of its malleability; and yet Sparta flourished with that
circulating medium; nay, more, Sparta fell into ruin when the precious
metals superseded the worthless iron, which its rulers were compelled
to revive before the Republic was restored to prosperity. Some Eastern
nations have used _cowries_ (small shells) as money; and the Russians,
in the fourteenth and fifteenth centuries, employed the skins of
squirrels and martens. We ourselves use paper, and have used it without
the condition of convertibility. In fact, if gold and silver had never
been deposited in the bowels of the earth, or had been suffered to
remain there, the wealth of nations would not have been deteriorated
one farthing. They are the _signs_ of the thing signified, made such
by Act of Parliament; they will neither feed us, nor clothe us, nor
house us through their _own inherent qualities_. It is we ourselves
who give them all their gigantic power; we make them a legal tender.
Thus credulity set up graven images in the temples of old; and Labour,
having deposited all its earnings on the shrine, bent its knee before
the shining metal, and implored food and raiment from the idol carved
with its own hands. Common sense would have appealed to the _plough_
and the _loom_.
We have said that the precious metals, when made a legal tender by
the legislature, are still no more than signs of the thing signified;
what, then, is the thing signified, whose value they measure, and
in measurement represent? We answer, all those things of value
which, in return for a sufficient inducement, are capable of being
transferred from one person to another. These are expressed by the
terms Property, Capital, Stock. All these possess _intrinsic_ value,
for they represent accumulated labour; and accumulated labour is
the result of a continuous consumption of corn--the standard of all
values--the staff of life, without which neither property, capital,
nor stock could be accumulated, without which, indeed, the race of
civilised man could not be perpetuated. A granary full of corn, or a
warehouse full of cottons and woollens, are examples of _real money_:
they may exist while the proprietors of them have not an ounce of
gold or silver in their coffers; and, in a mercantile sense, they may
be poor, nay, necessitous, with all this wealth in their possession;
because corn, cottons, and woollens are not legal tenders according
to Act of Parliament,--no man is _bound_ to take them in acquittance
of a debt,--they are not a satisfaction to the sheriff. It is idle to
say that such persons may obtain relief through a banker: the very
application shows a state of dependence into which the holder of
real money ought never to be reduced: for he who produces the thing
signified ought not to be under the control or caprice of him who
merely deals in its sign. Moreover, the banker himself may be unable
to give any accommodation: gold and silver may have left the country;
even the Bank of England may be so crippled as to have borrowed
some millions of the precious metals from France: we may be within
twenty-four hours of barter. Is this a picture of the imagination? No;
it is a faithful sketch of what _has_ happened; and why should it not
happen again, the same causes remaining in readiness to act?
What is the lesson that such considerations ought to teach? It is this,
that a nation, rich in real money, may be thrown into bankruptcy,
and perhaps revolution, by adopting a false representative of value,
through the privation of that gold which its legislature recognises
as the sole legal tender. Let the gold go, what remains? Our land,
retaining its fertility; our machinery, capable of continuing its work;
our vessels, as seaworthy as before; our skilled industry, with its
intelligence unimpaired; our unskilled labour, not a whit enfeebled in
its natural productive powers. These are the elements of real money.
In the island of Guernsey it was proposed to build a meat-market, and
the estimates amounted to about £4,000. As all taxes in that island are
raised by a direct assessment on property, the rich protested against
the expenditure, though they desired the proposed accommodation. Here,
then, was a dilemma, since they who willed the end would not will the
means, and without the means the structure could not be erected. Had
such an emergency arisen with us, our Chancellor of the Exchequer would
unhesitatingly have thrown all the burden on the working-classes,
by taxing the commodities they daily consumed; but the rulers of
Guernsey have notions of honour and justice which do not permit them
to relieve the rich at the expense of the poor, and they are too well
instructed in the principles of commerce to crush trade by customs
and excise; these contrivances, as iniquitous as they are bungling,
would be disdained by the legislatures of the Channel Islands. How,
then, did they proceed in building the meat-market? They issued paper
notes, _guaranteed by the States of Guernsey_, this national paper
_not bearing interest_; and the better to show the nature of this
currency, the words “Meat-market Notes” were inscribed upon them, and
they were numbered so that no more could be put into circulation than
represented the sum agreed to be expended on the undertaking. On the
first instalment being due to the contractor, he was paid in these
notes, which he again paid away to his workmen and others, who passed
them to the shopkeepers; the landlords took them for rent, and the
treasurer of the States and the constables received them in discharge
of dues and taxes. At length the building was completed, when butchers
took the stalls at an annual rent, and as that rent was received the
meat-market notes were destroyed. In due course of time this rent
wholly extinguished the notes; and the market remains, to this day,
a permanent source of national revenue, applicable to other national
improvements; and, strange as it may sound, no individual has been
taxed one farthing for its construction! Here, then, is a practical
illustration of the uses of a symbolic currency, and of the mode in
which it may be made to work. Not an ounce of gold was employed; not a
shilling of interest was paid. The States of Guernsey were their own
guarantees for their own paper; they created the substance with the
symbol, realising the allegory of Aladdin’s lamp.
As bullion, the precious metals are mere commodities, and therefore
possess no more intrinsic value than any other commodity, under the
laws of supply and demand; as coin, they are still bits of bullion,
and it is the act of ourselves, or of the legislature who represents
us, that gives them the character and the power of a legal tender. And
yet we have the folly to kneel down to this graven image, and measure
individual happiness and national greatness by its presence or its
departure. Foreign trade, however valuable, must ever be subsidiary to
the home trade. This doctrine none will contest; being admitted, then
it follows that the chief care of the government should be to provide a
currency suited to the home trade, and leave to merchants the care of
adjusting the foreign exchanges, which never, for any long period, can
be adverse or favourable; for what the ebb tide takes away the flood
returns. It is an axiom in political economy that a favourable state of
the exchanges acts as a _bounty on imports_ and as a _duty on exports_,
while the reverse takes place when the exchanges are unfavourable.
The true _par_ forms the centre of these oscillations, and though
peculiar circumstances will rarely allow that _par_ to be _exactly_
hit, yet the tendency to approach it is constant, and the divergence
from it is always evanescent. But the home trade is governed by very
different influences; for, while we pay taxes on all we consume, the
foreigner pays none on what he purchases from us, since he deals with
us according to the measure of value, while we deal with each other
according to price. Gold represents the _natural_ price of commodities,
not the taxed price. Therefore, we ought to have two sorts of currency;
let bullion serve for foreign trade, but let us have government paper,
convertible into gold at the _market price_--not the _Mint price_--as
the medium of internal exchanges. When gold is scarce, let it rise in
value measured in the Bank or National note, and we need not fear a
drain of bullion.
There can be no freedom nor safety, much less prosperity, for any
people till they obtain just laws to regulate landed tenures, credit,
and commercial interchange. With such laws there could not exist
a bad government, nor would oppression in any form be possible.
Without such laws there cannot be a good government, be its form,
its administration, its institutes, or its franchises what they may.
Land, and whatever else the Deity has made for man’s use, must be
expropriated, by commutation, on equitable terms for the general good,
and never again be made private property. Credit must be accessible for
every member of the community, on terms beneficial for the individual,
and just and safe for the public. And all commerce must be gradually,
reduced to equitable exchange on the principle of equal values for
equal values, measured by a labour or corn standard.
Under the systems of Landed Tenures, Currency, and Commerce which at
present prevail in England and in France, it is no exaggeration to say,
that those who live upon _rents_, _profits_, _usury_, _discounts_,
_dividends_, _commissions_, _fees_, etc., absorb from 300 to 350
million pounds sterling worth of the people’s produce in each country
every year, over and above what they give the people any value whatever
for, in money or service of any appreciable kind. In fact, for this
enormous annual drain the useful classes of both countries receive no
consideration whatever. It is sheer robbery, disguised under plausible
names and forms. The Seven Propositions of the National Reform League
present what would seem the only feasible means of ridding the country
of this crushing incubus, consistent with acknowledging legal rights
and vested interests. Unless some such compromise be agreed on between
rich and poor, both in England and in France, a convulsion, sooner or
later, that will engulf both, must be the inevitable consequence. No
country could long sustain two such existing drains by the idle and
baneful classes upon the laborious producers--drains equal to from 300
to 350 millions every year in each country--without at last collapsing
after protracted agonies to preserve national life. The system of
equitable Exchange substituted for the present nefarious one of
profitmongering would save the _souls_ as well as the _bodies_ of both
nations; but _that_ is absolutely impossible without such antecedent
laws on Land and Currency as we have pointed out.
It is the same with Currency. You may, for instance, by repealing
Peel’s Currency Acts of 1819 and 1844, by making an annual issue of
Exchequer paper, equal to the taxation, our legal tender, and by
superadding to this the advantage of a free but sound commercial
currency, in the form of private and joint-stock paper issues
adequately secured,--you may by such a reform as this, and by
making gold a mere merchandise to rise and fall in the market like
all other merchantable commodities according to the law of supply
and demand,--you may by this means make money more plentiful and
come-at-able for trade purposes, and thus relieve society of a large
proportion of its distress,--you may do all this and so far effect
much good for society without any other accompanying reforms; but
the benefits of such a reform _per se_ would, we contend, be only
_temporary_; they could not be permanent, for want of the other
reforms. For a time money would be plentiful, employment abundant,
prices and wages high, and trade what is called prosperous; but this
very prosperity would soon work its own destruction; it would lead to
increased speculation, increased production, increased competition,
increased rents for lands and houses, increase of expenditure and
taxation, and to a terrific increase of what are called vested
interests; it would soon overstock the markets, and glut the warehouses
with unsaleable goods. Then would come a crash--a fearful, ruinous
crash; mills would run short time or stop; the factories and the
workshops would dismiss their hands; multitudes accustomed for some
time to full employment and good living would be cast suddenly adrift
to beg, borrow, or steal; the workhouses would overflow as the mills
and workshops became empty; the shopkeepers would be ruined by forced
sales and the lack of legitimate custom. This would react on the
manufacturers and merchants, and, through them, on the artisans and
labourers. Meanwhile the increased pressure of inflamed rents, taxes,
and vested interests would be found intolerable by a people without
trade and without employment. Down would go prices and wages again,
in despite of the superabundance of money, which would have found its
way to and accumulated in the hands of usurers, fixed-income men,
and non-productive, overgrown capitalists. In short, we should see a
repetition on a larger scale than ever of one of those periodic crises
in the commercial world which, under the present system, we invariably
find to follow close upon the heels of every great development of our
manufacturing and trading prosperity.
It is with Land-reform as with Currency; it would be of comparatively
little use to nationalise landed property with the view of throwing
open the land to labourers and small farmers, unless you at the same
time enabled them, by a sound system of Credit, to procure implements
and stock for their holdings, and to subsist themselves till after they
gathered in the first year’s crop. And even with competent allotments
of Land and Credit to stock them, the occupants’ condition would be
still but a very indifferent one without the aid of an efficient
Currency wherewith to effect easy and equitable exchanges of their
surplus agricultural produce for money or for other produce, as their
wants might require. In short, each element is imperfect in itself as
the means of social reform. But all, from operating conjointly and
harmoniously, go to make social reform perfect. And seeing that it
is just as easy to legislate upon all forms conjointly as upon each
separately, it appears to us a sad waste of time and labour to agitate
for any one without including the rest at the same time, the more
especially as the peculiar virtues of each are only brought into full
play and development by being made to operate in unison with the other
three.
There is not one warrior that ever fought for king, people, or
commonwealth: they have all fought for landlords and profitmongers,
to whom alone they could look for pay and promotion; consequently, no
good to the human race ever accrued from their conquests or victories.
Nor will the millions ever gain by any war not waged by themselves on
their own account, nor by any victories not won by themselves over
their hereditary eternal foes, the landlords and profitmongers--over
the latter especially, the more numerous, deadly, and irreclaimable of
the two. Profitmongers are, indeed, perfectly irreclaimable enemies
of the human race, because as such they can possess no one virtue, no
one quality of head, heart, or conscience, by which they could be won
over to God or humanity. In all the higher professional callings--in
those associated with the arts and sciences--the pursuit of truth, and
the culture of a taste for the Sublime, the Beautiful, the Chaste,
the Sympathetic, form an essential part of their studies and the very
foundation of success. Such is the case with engineers, architects,
sculptors, painters, musicians, historians, mathematicians, physicians
and surgeons, artists of every kind, orators, poets, professors of
science, advocates, &c. The higher qualities of the human mind must be
more or less cultivated by all those descriptions of persons, if they
would excel; and it is in the very nature of their studies to generate
in them some appreciation of truth, taste, sympathy, or refinement.
But the profitmongering devils of society neither need nor care for
such ennobling pursuits. Indeed, the less they are tinctured with
them, the more fitted they are for their nefarious callings. Genius,
taste, culture, are not required for buying in the cheapest markets
and selling in the dearest, for lying, deceiving, adulterating goods,
giving short weight, or cheating our fellow-creatures out of their
substance, either by underpaying them for their work or giving them
less than the value for their money. Still less are the superior moral
qualities required in profitmongering pursuits; indeed, such qualities
are only drawbacks and impediments in the way of success in business.
Hence no clever profitmonger ever thinks of encumbering himself with
them. True, mercantile men have a proverb which has become trite
from use--“_Honesty is the best policy_;” but they use it, like
other good things, only to improve their opportunities of cheating.
A tacit understanding not to cheat one another is often necessary to
their success in cheating the rest of mankind, which, after all, is
the main business of their lives. As this iniquitous class can grow
rich only by grinding and cheating their fellow-creatures, that is,
by robbery and oppression, they are, by the very nature of their
pursuits and practices, irreconcilable enemies of society. It is their
interest that the working-classes should be always at variance amongst
themselves--always a prey to ignorance--given to mutual jealousy and
mistrust--and filled with prejudices and superstitions, by which they
may at all times have their passions inflamed against those who would
unite, enlighten, and emancipate them from bondage. It is the interest
of this class, too, that the mass of the people should never own a
house, nor even rent an acre of land, so that they may be forced to
become wages-slaves to profitmongers, and pay to them every few years
in rent more than the value of their wretched tenements. In short,
profitmongers, as the main supports of all aristocracies and of all
tyrannies in the world, are constrained by the very necessities of
their position and by the very nature of their pursuits, to ignore the
Ten Commandments in practice, and to trample under foot the Gospel of
the Saviour. There cannot, then, be even a semblance of real reform
in society without beginning with clipping the claws and drawing the
teeth of the profitmongers. The human race is, indeed, without hope
of salvation either in this world or the next, until their present
unlimited and irresponsible power of murder and robbery over the mass
of mankind shall be wrenched from profitmongers and landlords.
[Illustration: Decoration]