If, now, you wish to form some rational opinion of the extent of the
robbery practised in this country, by the holders of this monopoly of
money, you have only to look at the following facts.
There are, in this country, I think, at least twenty-five millions of
persons, male and female, sixteen years old, and upwards, mentally and
physically capable of running machinery, producing wealth, and supplying
their own needs for an independent and comfortable subsistence.
To make their industry most effective, and to enable them,
_individually_, to put into their own pockets as large a portion as
possible of their own earnings, they need, _on an average_, one thousand
dollars each of _money capital_. Some need one, two, three, or five
hundred dollars, others one, two, three, or five thousand. These
persons, then, need, _in the aggregate_, twenty-five thousand millions
of dollars ($25,000,000,000), of money capital.
They need all this _money capital_ to enable them to buy the raw
materials upon which to bestow their labor, the implements and machinery
with which to labor, and their means of subsistence while producing
their goods for the market.
Unless they can get this capital, they must all either work at a
disadvantage, or not work at all. A very large portion of them, to save
themselves from starvation, have no alternative but to sell their labor
to others, at just such prices these others choose to pay. And these
others choose to pay only such prices as are far below what the laborers
could produce, if they themselves had the necessary capital to work
with.
But this needed capital your lawmakers arbitrarily forbid them to have;
and for no other reason than to reduce them to the condition of
servants; and subject them to all such extortions as their
employers--the holders of the privileged money--may choose to practise
upon them.
If, now, you ask me where these twenty-five thousand millions of dollars
of money capital, which these laborers need, are to come from, I answer:
_Theoretically_, there are, in this country, fifty thousand millions of
dollars of money capital ($50,000,000,000)--or twice as much as I have
supposed these laborers to need--NOW LYING IDLE! _And it is lying idle,
solely because the circulation of it, as money, is prohibited by the
lawmakers._
If you ask how this can be, I will tell you.
_Theoretically,_ every dollar's worth of material property, that is
capable of being taken by law, and applied to the payment of the owner's
debts, is capable of being represented by a promissory note, that shall
circulate as money.
But taking all this material property at _only half_ its actual value,
it is still capable of supplying the twenty-five thousand millions of
dollars--or one thousand dollars each--which these laborers need.
Now, we know--because experience has taught us--that _solvent_
promissory notes, made payable in coin on demand, are the best money
that mankind have ever had; (although probably not the best they ever
will have).
To make a note solvent, and suitable for circulation as money, it is
only necessary that it should be made payable in coin on demand, and be
issued by a person, or persons, who are known to have in their hands
abundant material property, that can be taken by law, and applied to the
payment of the note, with all costs and damages for non-payment on
demand.
_Theoretically,_ I repeat, all the material property in the country,
that can be taken by law, and applied to the payment of debt can be used
as banking capital; and be represented by promissory notes, made payable
in coin on demand. And, _practically_, so much of it can be used as
banking capital as may be required for supplying all the notes that can
be kept in circulation as money.
Although these notes are made legally payable in coin on demand, it is
seldom that such payment is demanded, _if only it be publicly known that
the notes are solvent_: that is, if it be publicly known that they are
issued by persons who have so much material property, that can be taken
by law, and sold, as may be necessary to bring the coin that is needed
to pay the notes. In such cases, the notes are preferred to the coin,
because they are so much more safe and convenient for handling,
counting, and transportation, than is the coin; and also because we can
have so many times more of them.
These notes are also a legal tender, to the banks that issue them, in
payment of the notes discounted; that is, in payment of the notes given
by the borrowers to the banks. And, in the ordinary course of things,
_all_ the notes, issued by the banks for circulation, are wanted, and
come back to the banks, in payment of the notes discounted; thus saving
all necessity for redeeming them with coin, except in rare cases. For
meeting these rare cases, the banks find it necessary to keep on hand
small amounts of coin; probably not more than one per cent. of the
amount of notes in circulation.
As the notes discounted have usually but a short time to run,--say three
months on an average,--the bank notes issued for circulation will _all_
come back, _on an average_, once in three months, and be redeemed by the
bankers, by being accepted in payment of the notes discounted.
Then the bank notes will be re-issued, by discounting new notes, and
will go into circulation again; to be again brought back, at the end of
another three months, and redeemed, by being accepted in payment of the
new notes discounted.
In this way the bank notes will be continually re-issued, and redeemed,
in the greatest amounts that can be kept in circulation long enough to
earn such an amount of interest as will make it an object for the
bankers to issue them.
Each of these notes, issued for circulation, if known to be solvent,
will always have the same value in the market, as the same nominal
amount of coin. And this value is a just one, because the notes are in
the nature of a lien, or mortgage, upon so much property of the bankers
as is necessary to pay the notes, and as can be taken by law, and sold,
and the proceeds applied to their payment.
There is no danger that any more of these notes will be issued than will
be wanted for buying and selling property at its true and natural market
value, relatively to coin; for as the notes are all made legally payable
in coin on demand, if they should ever fall below the value of coin in
the market, the holders of them will at once return them to the banks,
and demand coin for them; _and thus take them out of circulation_.
The bankers, therefore, have no motive for issuing more of them than
will remain long enough in circulation, to earn so much interest as will
make it an object to issue them; the only motive for issuing them being
to draw interest on them while they are in circulation.
The bankers readily find how many are wanted for circulation, by the
time those issued remain in circulation, before coming back for
redemption. If they come back immediately, or very quickly, after being
issued, the bankers know that they have over-issued, and that they must
therefore pay in coin--to their inconvenience and perhaps loss--notes
that would otherwise have remained in circulation long enough to earn so
much interest as would have paid for issuing them; and would then have
come back to them in payment of notes discounted, instead of coming back
on a demand for redemption in coin.
Now, the best of all possible banking capital is real estate. It is the
best, because it is visible, immovable, and indestructible. It cannot,
like coin, be removed, concealed, or carried out of the country. And its
aggregate value, in all civilized countries, is probably a hundred times
greater than the amount of coin in circulation. It is therefore capable
of furnishing a hundred times as much money as we can have in coin.
The owners of this real estate have the greatest inducements to use it
as banking capital, because all the banking profit, over and above
expenses, is a clear profit; inasmuch as the use of the real estate as
banking capital does not interfere at all with its use for other
purposes.
Farmers have a double, and much more than a double, inducement to use
their lands as banking capital; because they not only get a direct
profit from the loan of their notes, but, by loaning them, they furnish
the necessary capital for the greatest variety of manufacturing
purposes. They thus induce a much larger portion of the people, than
otherwise would, to leave agriculture, and engage in mechanical
employments; and thus become purchasers, instead of producers, of
agricultural commodities. They thus get much higher prices for their
agricultural products, and also a much greater variety and amount of
manufactured commodities in exchange.
The amount of money, capable of being furnished by this system, is so
great that every man, woman, and child, who is worthy of credit, could
get it, and do business for himself, or herself--either singly, or in
partnerships--and be under no necessity to act as a servant, or sell his
or her labor to others. All the great establishments, of every kind, now
in the hands of a few proprietors, but employing a great number of wage
laborers, would be broken up; for few, or no persons, who could hire
capital, and do business for themselves, would consent to labor for
wages for another.
The credit furnished by this system would always be stable; for the
system is probably capable of furnishing, _at all times_, all the
credit, and all the money, that can be needed. It would also introduce a
substantially universal system of cash payments. Everybody, who could
get credit at all, would be able to get it at a bank, _in money_. With
the money, he would buy everything he needed for cash. He would also
sell everything for cash; for when everybody buys for cash, everybody
sells for cash; since buying for cash, and selling for cash, are
necessarily one and the same thing.
We should, therefore, never have another crisis, panic, revulsion of
credit, stagnation of industry, or fall of prices; for these are all
caused by the lack of money, and the consequent necessity of buying and
selling on credit; whereby the amount of indebtedness becomes so great,
so enormous, in fact, in proportion to the amount of money extant, with
which to meet it, that the whole system of credit breaks down; to the
ruin of everybody, except the few holders of the monopoly of money, who
reap a harvest in the fall of prices, and the consequent bankruptcy of
everybody who is dependent on credit for his means of doing business.
It would be inadmissible for me, in this letter, to occupy the space
that would be necessary, to expose all the false, absurd, and ridiculous
pretences, by which the advocates of the monopoly of money have
attempted to justify it. The only real argument they ever employed has
been that, by means of the monopoly, the few holders of it were enabled
to rob everybody else in the prices of their labor and property.
And our governments, State and national, have hitherto acted together in
maintaining this monopoly, in flagrant violation of men's natural right
to make their own contracts, and in flagrant violation of the
self-evident truth, that, to make all traffic just and equal, it is
indispensable that the money paid should be, in all cases, a _bona fide_
equivalent of the labor or property that is bought with it.
The holders of this monopoly now rule and rob this nation; and the
government, in all its branches, is simply their tool. And being their
tool for this gigantic robbery, it is equally their tool for all the
lesser robberies, to which it is supposed that the people at large can
be made to submit.