by William. B. Greene
(edited and abridged)
The potentialities of a money system based on an alliance between large bankers and politicians manifested by the existing order should impress the independent minded with the need and possibilities of solutions at the local level. One should completely by-pass reforms requiring large-scale adoption.
A banking system based on private credit centered in villages, towns, cities and counties and run by the citizens of those locals would be the ideal. A system based on competition between those who wished to operate a bank would ensure credit with virtually no usury attached to it. This system would be an attack on mercantile credit and chartered banks in general.
Had the president, directors and stockholders of an incorporated bank remained individual capitalists competing with each other the effect would have been to depress rates of interest. However, by uniting their interests and establishing this bank, these capitalists have escaped competition. These capitalists benefit at the expense of the borrower. Borrowers compete with each other which raises the rate of interest; meanwhile lenders competing among themselves depress the rate of interest. With the establishment of a government chartered and incorporated bank, the lender has prevented competition amongst themselves and thus prevent a fall in the interest rate. Obviously the borrower could obtain money on better terms if the bank did not exist.
A laborer without the money to buy tools cannot follow his calling. A capitalist’s money is useless to him if he cannot lend it out at interest. The laborer and capitalist are mutually necessary to each other. Banks, in theory, bring together the borrower and lender, the laborer and the capitalist. Unfortunately, banks are instruments whereby the lenders escape their fair share of competition and confer to a certain class exclusive privileges.
Banks are instruments whereby lenders escape fair competition. This is good for the CEO’s and stockholders, but a horrible inequality in its relations to the mass of people. Banks confer exclusive privileges upon a certain class. The average person must compete with others of the laboring class and lay awake at night considering their failing economic position in life. If the laborer should organize and strike for higher wages they may find themselves liable to severe legal punishment. But, if the capitalists combine to prevent competition among themselves the legislature applauds their actions and grants them a charter to enable them to accomplish their purpose more easily and effectually. It is said that we live in a country of equal laws. If so, then if it is for the good of the community that laborers should compete among themselves, it is equally for the good of the community that the capitalists should compete in like manner; at least, so it would appear.
Banks Enable Certain Persons to Live Without Producing
Banks add nothing to the capital of a country; though they do augment the private fortunes of those interested in them. Banks enable lenders to live without working. If there were no banks the capitalist would have to become acquainted with the laborer to whom he lends money: he would be obliged to understand the nature of business. However, banks do exist and the capitalist isolates himself from the whole of humankind. We are justified in drawing the conclusion that banks operate to enable the few to bring the many under tribute. Banks do, in practice, conspire and combine to defraud the public.
To sum up, 1) capitalists, by combining with each other to form a bank, destroy competition among themselves. 2) Through the power of their organization they bear their weight upon everyone they have dealings with. On the side of the bank there is a small army, well equipped, well officered and well disciplined; on the side of the community there is a large undisciplined crowd without arms, without leaders. Society is a contest between a large number of sheep who are entirely disconnected with each other, and a small number of wolves who meet every Saturday to confer upon how to sheer the sheep. 3) Because capitalists are afraid that someone will come in from without to compete with them and lower the rate of interest they, therefore, petition the legislature and obtain permission to exert power which ought never to be exercised by the government itself. They ask permission to create paper money and credit and have it recognized as lawful legal tender. Thus, being able to debase the currency by the art of printing money beyond the true wealth of a nation, they have no longer anything to fear from competition.
Equal Laws and Equality Before the Laws
It is right that all persons should be equal before the law: but when we have established equality before the law, our work is but half done. We ought to have EQUAL LAWS also. Of what avail is it that we are all equal before the law, if the law is itself unequal.
When two men compete with each other, and one receives a personal privilege from the legislature, thus obtaining an advantage over his competitor, these men are unequal before the laws. If the legislature grants an act of incorporation to a company, and in that act gives the company special privileges, the legislature establishes an unequal law, though it does not make men unequal before this law. Men are not unequal before this law, because they are all equally free to purchase stock in this incorporated company, and because they may all compete for a share in the privilege granted by the legislature. The laboring man, who earns a dollar a day, has a right to buy this stock, though the shares cost $1000 apiece: his right to buy is equal to that of the capitalist who has the ability to purchase a share. But the legislature determines, by this act of incorporation, that a privileged class shall exist, that inequality shall be established, though it leaves admission into the favored class open to free competition.
Thus all are equal before the law; but the law itself is unequal, since it establishes inequality. What right has the legislature to turn God’s footstool into a lottery, even though it give a ticket, and an equal chance to every member of the community? What right has the legislature to turn this world into a lottery where some may indeed draw prizes, but where, for every prize drawn by a fortunate person, a multitude must necessarily draw blanks? Would it not be better to permit each individual to receive neither more nor less than the just reward of his labor? This world, as it was first created, was not a lottery; neither did its Maker ever intend that it should become such. The law that makes the world a lottery, is an unequal law; for it establishes inequality: and the fact that all men have tickets, does not remedy the difficulty; for it only gives all men an equal chance in the lottery which establishes equality—it only makes all men equal before a law which is itself unequal. But we speak altogether too favorably of the existing system. It is not true that every individual has a ticket and an equal chance; besides, there seems to be, at the present time, a certain sleight of hand exercised in turning the wheel.
Equality, Justice, and Charity.
We propose no violent remedy for this evil: we recommend no destructive process. We call for nothing but the establishment of justice—the establishment of equal laws. What is justice in human relations if not the organization of equality? We know that men are not equal in physical strength, beauty and stature: we know they are not equal in intellectual power; we know that as the stars differ from each other in glory, so men differ among themselves. We would not equalize all fortunes: we would not take the honest earnings of the industrious and prudent portion of the community, and divide them among. the imbeciles and scoundrels. What then do we mean by this word equality? We should say that the terms equality and justice are convertible, were it not that justice seems to exclude the element of charity. Nevertheless we would be satisfied with the organization of justice on the earth, and would be willing to call that the organization of equality. We demand, therefore, equal laws, as well as equality before the law.
We are in favor of equality against privilege; for a privilege is an unjust advantage which one man or class, has over the rest of the community. We invite the reader, therefore,—if he thinks we have talked reasonably—to look about him, and oppose firmly, to the extent of his ability, every special privilege, every inequality, that attract his notice.
The Privilege of Usury.
We do not know how to give expression to the thought which now rests upon our mind. No person can respect the rights of property more than we do. If we hare said anything against those rights, our statements were unphilosophical, and we will ourselves refute them as soon as they are pointed out to us. But there is such a thing as false property. We have yet to learn that the rights of property legitimate USURY: we have yet-to learn that because a man owns money, houses, and lands, he has a right—without working himself, and without spending any portion of his possessions— to live upon the labor of his neighbors.
A man is rich who is able to supply himself with such of the necessaries and comforts of life as he may require. This definition seems to us to be correct. Let us now give another definition, which shall be as false as this one is true.
A man is rich who is in possession of property for the use of which he can obtain, without working, the necessaries and comforts of life. This is a definition, not of a rich man, but of a usurer. A usurer obtains the necessaries and comforts of life (without manual, or other useful, labor on his part) by receiving them from some producer who pays them over to him for the use of his property. And, meanwhile, the usurer spends no part of his capital.
A rich man, according, to the views of many, is one who can live without working, and yet, at the same time, spend no part of his fortune: but he who neither labors, nor spends his own money, must live on the labor of others. What else is it possible that such a man should live upon? Does he live upon the product of his past labor? No; for the wealth he now possesses, and which he has a right to spend, but which he does not spend, pays him for all his past labor. Let him spend that, if he wishes to live without labor. But perhaps his capital labors for him? That is false. Nothing labors but God, living men, and living animals, tamed by men; the producer who labors for the usurer, supports him; and the usurer lives upon the labor of this producer.
Let the reader now give a conscientious answer in his own mind to this question:—what difference is there, as far as mere morality is concerned, between the false profits of property, and the earnings of the highway robber? When a man acquires a valuable article without giving an equivalent for it, there is a plain English word that characterizes his action… Usury is now in high honor. The profession is respectable and legal. We confess, that if e owned money (and we wish we might own some) we should put it out at usury. We freely acknowledge that we cheat every day, and that we should be obliged to move out of the world if we refused to take undue advantage of our neighbors. Yet we are no worse than those with whom we deal. Let us endeavor, in view of these things, to prevail upon our legislators to so organize society that we be able not only to live, but also to preserve our self-respect. Our remarks condemn society, and not individuals.
Let us conclude this article by an illustration.
Suppose the commonwealth of Massachusetts should lose suddenly, by death, its fifty best surgeons, its fifty best physicians, its fifty best mathematicians, its fifty best machinists, its fifty best engineers, and so on through the whole list of poets, painters, musicians, farmers, merchants, manufacturers of cotton and woolen goods, etc. etc.—what a wail of desolation would go up toward heaven! What consternation would seize upon the community!
Now let us make another supposition. Suppose the State preserves all the men of genius in science, commerce, mechanical skill, the fine arts, etc., which it now possesses, but that it should be called upon to part with the 1000 of its proprietors, who have the most money out at interest (Banksters, etc.). Without doubt, the people would be very much affected by the loss of so many distinguished citizens: but the sudden disappearance of all these persons, reputed the most important in the State, would cause a sentimental evil only, without occasioning any serious inconvenience to society. For it would be very easy to fill the places that would thus become vacated. It would be easy to find 1000 other citizens, willing to take upon themselves the labor of receiving the interest of the money which our supposition leaves without present owners.
It must be stated, however, in qualification, that many of the 1000 proprietors who have the most money out at interest, are also, at the same time, merchants, physicians, house-builders, officers of manufacturing companies, etc., so that the evil resulting to society from their sudden death, would be partly real and partly sentimental, so far as these persons are merchants, physicians, manufacturers, etc., the loss to the community would be a real, but so far as they are mere loaners of money, the loss would occasion but a very slight inconvenience; for they cannot carry their money (which is in this case the important matter) to the next world with them. Capital is very useful; but society can afford to spare the mere capitalist—that is, the capitalist who, by means of his capital, levies a tax on the community, the capitalist who assists in the general consumption, without assisting in the general production.
“The essence of all slavery consists in taking the product of another’s labor by force. It is immaterial whether this force be founded upon ownership of the slave or ownership of the money that he must get to live” -Leo Tolstoy
TO BE CONTINUED