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Section the Fourth: FUNDING - John Taylor, An Inquiry into the Principles and Policy of the Government of the United States 
An Inquiry into the Principles and Policy of the Government of the United States (Fredericksburg, VA.: Green and Cady, 1814).
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Section the Fourth
In a former part of this essay, a promise was made to consider the effects of funding and banking, in relation to the principles and policy of the United States; that promise shall now be complied with.
No form of civil government can be more fraudulent, expensive and complicated, than one which distributes wealth and consequently power, by the act of the government itself. A few men wish to gratify their own avarice and ambition. They cannot effect this without accomplices, and they gain them by corrupting the legislature. Still the faction is too feeble to oppress a nation. Vice looks for defence, because it expects punishment. The legislature must corrupt a party in the nation, and this is effected by the modern invention called a paper system, with a degree of plausibility and dispatch, infinitely exceeding any ancient contrivance. Executive patronage corrupts individuals; legislative, factions; the first by office and salary; the second by law charter and separate interest. Fear and avarice combine to secure implicit obedience from these purchased engines of power, and an inexorable fulfilment of the corruptor’s purpose. Accordingly, a paper system will cling to a government, as closely as an army to a general, or a hierarchy to a pope.
An executive power to bestow offices and contracts upon members of a legislature, resembles the idea of procuring talents, and rewarding merit; but a legislative power to buy a faction by loans and charters, cannot crouch behind this subterfuge; it literally displays, and openly practises the same species of corruption, which executive patronage endeavours to hide.
A paper system belongs to the species of patronage which we have called legislative. It is introduced upon various pretexts; but its true ends are simple. These are to enrich individuals, and at the national expense, to corrupt a faction, which will adhere to a government against a nation. Such a system may subsist in union with election, but the principles of our policy cannot subsist in union with such a system.
Its practicability in union with election is ascertained in England, and by widening the distance between individuals in wealth, it has detached the mass of talents from the service of the publick, to the service of a faction; and changed election from a shield for liberty, into a keen and polished instrument for her destruction. This abuse is a refinement upon a late quotation emphatically proving, that the system of balancing or checking monarchy in England, is capable of producing more tyranny and oppression, than simple or pure monarchy would dare to attempt. A monarch, shielded by a corrupt parliament, may adventure upon measures, which he would otherwise shrink from. And a legislature, shielded by a paper faction, may adventure upon measures which they would otherwise shrink from. Election is made the instrument of legislative patronage, and a nation seems to be the author of its own ruin, whilst that ruin proceeds from the operation of a paper system, corrupting talents, enriching a faction, and impoverishing the mass of the nation; yet the people will be kept patient by election itself, from an erroneous opinion, that the government is administered according to their will. Against this species of tyranny there is no remedy, except that of preventing its cause, as the people have no mode of discovering the individuals corrupted by legislative patronage; other forms of tyranny are seen in the persons of kings, nobles and priests; executive sinecure and patronage, are visible; and a visible enemy may be subdued; but an invisible enemy cannot even be assailed.
The possibility of that species of tyranny, arising from an union between an elective legislature, and an interest different from the national interest, was contemplated by all our constitutions; and the whole fund of foresight then existing brought to bear against it. For this precise end, innumerable precautions were used, to subject law-makers to the national will; to prevent them from getting wealth from the nation by their own laws; and to expose them equally with other citizens, to oppressive laws. But all these precautions are destroyed by the legal inventions of funding, banking and charter, more effectually than the liberty of the press was destroyed by a sedition law. The reader will not require a catalogue of cases, to prove how deeply laws can wound constitutions, after this reference has awakened his recollection.
Admitting that the power of creating debt, must necessarily reside in a government, yet, next to the power of raising armies, it is the most dangerous with which it can be invested. Mankind may be governed by money or arms. Both these powers admit of checks, and required them, as being more dangerous than any others. An armed nation would have been a check upon the one; and an effectual exclusion from the legislature, of any participation in the profits of debt, created by funding or banking, would have been a check upon the other.
But a borrowing power itself is rendered questionable, by considering its origin and effects. We possess a correct history of two paper systems only; those of England and America. The first was produced by the personal hatred of William of Orange for Lewis the 14th, the rapacity of Marlborough and Eugene, and the need of a disputed title to a crown, for partisans. The second also followed a revolution, without having contributed towards it; compensated publick services by the tax of appreciation, after they had paid that of depreciation; and transferred much of the reward for which an army bled in defence of their country, to those who had shed that blood. To gratify a king’s hatred, enrich rapacious generals, and transfer a crown from one family to another, were ends of the English funding system, not much more just or useful, than those experienced here. This system or policy, therefore, has very little to boast of for its exploits in these two eminent cases.
But there is a theory in favour of funding systems, artfully suggested to cover their practical evils. Nations are persuaded that they can anticipate the riches of posterity and bequeath it their misfortunes; seduced by this glittering temptation, they have forborne to look through its gilding, in order to discover what it conceals.
Could one generation thus have plundered wealth and leisure from another, each would have preferred certain victories costing neither blood nor money, to murderous, precarious, and expensive wars; and though the wisdom and justice of the Deity might have been rendered questionable, by the subjection of unborn innocence to the tyranny of existing vice, yet the crime would have been perpetrated in security, and the magnitude of the acquisition would have varnished over its flagitiousness, in the eyes of the perpetrators.
The propensity of nations to molest their contemporaries for the sake of wealth, is recorded in innumerable examples; and as the same passion would with additional strength have incited them to invade the rights of the unborn, an existing generation would have wanted motives for self-molestation, if these motives could have been appeased by calling forward into their own pockets the inexhaustible wealth of time to come. It is therefore probable that such an operation is physically impossible, because the treasures of anticipation have not suspended for a moment the disposition of existing nations to plunder and oppress the people.
But an opinion that it is possible, for the present generation to seize and use the property of future generations, has produced to both the parties concerned, effects of the same complexion with the usual fruits of national errour. The present age is cajoled to tax and enslave itself, by the errour of believing that it taxes and enslaves future ages to enrich itself; and future ages submit to taxation and slavery, by being seduced into an erroneous opinion, that the present age have a right to inflict upon them these calamities.
It is to such national errours, that mankind have been indebted for most of their miseries, and for having fallen a prey to avarice and ambition in all ages of the world. Idolatry was concealed behind an erroneous veneration for those who fed upon its victims. Monarchy and aristocracy are skilfully fenced round by the insidious and erroneous arguments of the mass of talents, interested in their cause. Crusades, in the opinion of several generations, led the way to Heaven, whilst the monks used them to acquire wealth. And the errour of an opinion, that one age can seize upon the wealth of another by anticipation, is no less ruinous to nations, and enriching to individuals and orders or separate interests, than the errours which have supported idolatry, monarchy, aristocracy and crusades.
It is however the most recent, the most plausible, the most seducing, and the most dangerous invention, to which self interest and cunning has ever resorted, for moulding man into coin; and will probably keep its ground, until such calamities as have exploded other errours, shall disclose to an existing generation that it was born free. A truth, which they will then clearly discern to have been revealed to man, in withholding from the dead a power to govern the living, and from the living, a power to govern the dead. It will then be seen, that moral rectitude does not impose upon a living nation the duty of submitting to tyranny and oppression, because a nation, which is dead, chose to gratify the hatred of one king against another, or the rapacity of generals; or to corrupt a party to support or produce a revolution in the government. Evils, controlled by such an opinion, and encouraged by one, that posterity ought to suffer their effects, rather than the generation which caused them.
It would be superfluous to prove that unborn generations are injured by anticipation; it is taxation, by persons, not elected by the payers, nor participating in the tax, but enriched by it. If the laws of nature are so partial and unjust, as to allow one generation to rob another with impunity, the crime will be perpetrated. It will only be prevented by a conviction that punishment follows vice, in this as in other cases; and that the malice of the attempt regularly receives its due vengeance, without a possibility of obtaining a benefit; or by the same disregard of the living to the mandates of the dead, as to the happiness and liberty of the unborn.
Let us consider how anticipation bestows wealth. It does not conjure into real existence, the commercial, agricultural and manufactural products of futurity. It does not add to the corn or to the coin. It only conjures the wealth of existing people out of some hands into others; and the credit with which to buy property of the living given by the certificate, constitutes all the solid wealth gained by anticipation. It is a pretext for taxation, and a mode of changing property among individuals, but produces nothing for nations.
War is among the most plausible means used to delude a nation into the errour of anticipation. Yet it cannot bring up from futurity a gun, a soldier, a ration, or a cartridge. The present generation suffers every hardship and cost of war, although anticipation pretends that it is suffered by future generations. And this delusion is used to involve nations in wars, which they would never commence, if they knew that all the expense would fall upon themselves. It is twice suffered; by the living, who supply all the expenses of war; and by the unborn, who supply an equivalent sum, to take up certificates of the expenses paid by the living.
No item of the expense of war is more transferable from the living to the unborn, than the blood it sheds. Money buys this blood and every other expense of war; but it is neither blood nor bread, and only a collector of them. These realities, not the signs or tokens, supply the war; and after they are expended, their shadows are made by anticipation, to consume the same amount of realities which the war devoured, even that of human life, if death by oppression is equivalent to death by the sword. Thus one war is converted into two, and every period of natural, begets an equal period of artificial war. The same ingenious contrivance, by the help of compound anticipation, converts about fourteen years of war, into a perpetual war. If a million annually comprises or represents the utmost efforts in realities, which a nation can make in war; and the realities represented are expended annually, leaving behind them annually the million of stock or certificates at compound interest, produced by the anticipating mode of calling these realities into use; then a war of about fourteen years continuance, places the nation in a state equivalent to perpetual war; because the stock or certificates will devour in peace, precisely the same amount of the realities represented by money, which the war did. Nor can this nation be ever relieved from a state equivalent to perpetual war, whilst the stock preserves its value, and the national resources are the same. If there are fourteen intervals between the fourteen years of war, the same result will ultimately occur; whence it has happened, that peace has been seldom able to repair the errour in a mode of making war, so calamitous as to double the duration of short ones, and to produce a perpetuity of its evils in the space of fourteen years. A maniac, whose income in kind is just sufficient to support him, takes it into his head to give his bonds to sundry people annually for its value, whilst he is consuming it. At the end of fourteen years his whole income is gone, though he has only expended its annual amount. Such is anticipation to nations. But those who use it to deceive, plunder and enslave them, artfully liken it to the cases of a man who buys an estate on credit, or who gives bonds to himself. One would think that the impossibility of finding any such estate thus obtained by nations; and the possibility of finding the taxes, the poverty, the splendour, and the political innovations it produces, would detect the falsehood of these pretended resemblances; and sufficiently convince nations that they are not one homogeneous mass of matter, but capable of a thorough divisibility into individuals, and into a multitude of separate interests (such as payers and receivers, masters and slaves, impostors and dupes) to disclose to them the folly of transforming themselves into the resemblance of the maniac.
But the fact is, that nations are seldom allowed to look at their interest except as it is reflected by living political mirrors, such as kings, ministers, demagogues or stockjobbers, so contrived as to make deformity exhibit beauty, and poverty wealth, to the infatuated people, for the sake of advancing their own views and projects. Had the representations of these false mirrors been true, all nations would have enjoyed the highest prosperity. The United States are tempted to plunge into anticipation by the funds of back lands and growing population; the first pronounced by twenty years experience, to be insufficient for the sustenance of a single Baring;∗ and the second unable to protect the existing generation for a single year, against the drafts from their liberty and property which the system inevitably produces. If we are thus seduced into the snare, in which the ambitious and mercenary of the present age involve their prey, our population and lands, are destined to feed the two most insatiable and worst passions which afflict mankind, and our vacant territory will only be a fund for enslaving our children.
Anticipation is at best a mode of putting the energies of present time in motion, without any powers of calling up a single energy of future time. Other modes have operated more powerfully, without being considered as blessings to the age which felt them. Those by which Xerxes, Alexander, Cæsar, Peter and hermit, Tamerlane, Cromwell and Bonaparte were enabled to lead millions to victory or defeat, were more successful in arousing the military energies of the present time, than the anticipating mode.
Nothing exposed the American and French revolutions to greater danger, than the attempts to use this delusion. Anticipation was tried, it taxed the existing generations by depreciation, it superseded the cultivation of other modes of putting existing energies in motion, it failed, the failure almost obliterated the memory and suspended the use, of the real means of war, and a dangerous crisis in both cases was produced. The errour in these instances was surmounted by the good sense which necessity so often teaches.
Political and religious opinion, and a love of country, are stronger excitements of existing warlike energies, than anticipation. They cannot be stolen or hoarded; but war carried on by paper, it starved by peculation, and produces the utmost degree of publick expense, with the least degree of publick spirit. An excitement of the militia of the United States by arms, training, equipments and eulogy, would probably have created a stronger military force, at an inferior expense, than all the efforts of anticipation have been able to produce. Can the most expensive, the least successful, and the most corrupt mode of exciting the energies of war, be the best?
If anticipation cannot create, but only excite, it follows, that there is a deception in the idea, that it can postpone the expense of war to a future time. The expense of war really consists of men, food, raiment, arms and ammunition, and not in a juggle of signs; anticipation therefore is a phantom, incapable of alleviating the miseries of war, whilst it is a harpy, able to devour the blessings of peace.
The Romans carried on long and expensive wars without the aid of anticipation, and it failed before the end of our short and cheap revolutionary war. Yet the whole of the paper money was paid, or sunk by depreciation whilst the war was going on; a mode of taxation so excessively unequal, as to ascertain, both the ability and necessity of every existing nation to bear the expense of its own war; for if war could be maintained by a tax excessively unequal, it follows, that the energies of war, are within the reach of an equal tax.
After this unequal tax was paid by the United States, and the war had been finished successfully by patriotism and bravery, anticipation, which had fled disgracefully from the contest, returned to reap the best fruits of the victory; and though a traitor, found means to supplant and plunder the heroes who had won it. This success was more wonderful, from the reason which caused it, than in itself. That a few people should be willing to enrich themselves at the expense of a multitude, is far less wonderful, than that they should succeed by persuading this multitude, that anticipation, which had recently deserted them, was a better defender of nations, than patriotism and bravery, which had recently saved them.
National defence, was never the true cause of any funding system; and no funding system ever defended a nation. It was invented in England to prop a revolution by corruption; extensively used to sacrifice the nation to German interests; and it has been continued to feed avarice, and silently to revolutionize the revolution. It was introduced into America, after the nation had been defended, to enrich a few individuals, and also to revolutionize the revolution.
In England, the advancement of the Hanoverian family to the throne, was disagreeable to the landed interest, of which the tory party at that time chiefly consisted. This compelled George the first to use the whig party. And Sir Robert Walpole, who belonged to it, pushed a paper system to enrich his partisans, and to balance the superior wealth of their political opponents. The artifice completely succeeded; the rich tories were impoverished; a vast change of wealth took place;∗ an irresistible whig party was formed, and gradually transformed by the same paper system into tories. As a whig party it placed a family on the throne, and then converted itself to toryism with zeal and rapidity, by fraudulent laws to enrich itself.
In America also, a paper system followed the revolution produced by the present form of our general government, and operated upon the landed whigs here, exactly as it had done on the landed tories in England. It taxes them, enriches a credit or paper faction; changes property; forms a party; and transforms its principles as in England. But the American whigs are blind to the ruin which the English tories saw.
Henry the 7th broke the power of the barons to strengthen the monarchy; Sir Robert Walpole destroyed the power of the landed interest, and compelled it to contribute to the formation of a monied interest, to establish a disputed title to the throne. The capacity of the latter invention has probably exceeded what was foreseen. It is found able to seize and to hold the reins of government. It is found able to erect a stupendous fabrick of factitious wealth, and to compel land and labour or real wealth, to become its humble and obedient subject.
The importance of these truths is not diminished, because the monied interest in England happened to start as whigs, and the landed as tories. They shew that a paper system was not introduced for national defence, and that it can transfer property, transform parties, and change the nature of governments. Avarice, and a conviction of its power as a political engine, suggested its introduction; and events have proved that this conviction was correct. It is an engine which is able to usurp and hold a government; therefore it will contend for dominion. As it will contend, it must experience defeat or victory. It is also an engine having no resemblance in interest to land, labour or talents; therefore it cannot be a friend to either.
It was necessary to premise a short history of these two paper systems, to introduce the following argument, as to the reality or delusion of an idea usually annexed to anticipation. If it did not powerfully and instantaneously enrich and impoverish existing people, how could Walpole so suddenly and effectually have debased a landed, and exalted a monied faction, by its means? The capacity of anticipation to act suddenly upon an existing age, manifests both the delusion of considering it as an engine for drawing up wealth from futurity, and also, that as an engine for producing an oppressive government, it is no delusion. All paper systems, are in fact, indirect laws of confiscation, used for the purposes which induced the French revolutionists to transfer more directly, a great mass of landed property from their antagonists to themselves. These purposes simply were to enrich themselves and establish their power. It was to enrich, and establish the power of the whigs, at the expense of the tories, that Walpole used a paper system. In America, a paper confiscation system, conferred wealth and power on a monarchical party at the expense of the whigs. In both countries, those who furnished the riches, lost much of their power and property; and those who received them, gained it. The French confiscations went boldly to their object, like a direct tax. The English and American confiscations, secretly and circuitously effected their design, by the complication of a paper system; like an indirect tax. One seized and transferred the land itself. The others, mortgaged it; artfully leaving to the owner an appearance of property, whilst he is only a receiver of the profits for the benefit of the mortgagee. Is one mode of confiscation reprobated, because it is an open robber, which quickly ends the pain of its victim; and the other suffered, because it lies hidden under deceit and complexity, and inflicts slow and lasting tortures? Or is one reprobated like a small criminal who robs an individual; and the other flattered, like a great one who plunders a nation? Can violations of private property be rendered just or unjust by their modes? Between the modes we have been comparing, there is one difference. Direct confiscation is always pretended to be a punishment of guilt; indirect, by paper systems, is only used to punish innocence. And yet these indirect confiscations talk finely about forfeitures, and private property; they pretend to protect that which their only effect is to transfer; they pretend to reprobate that which is their own quality; just as a tyrant, in the midst of spoil and carnage, will boast of his justice and clemency.
The appearance of anticipating the resources of future ages, is artfully extracted from the simple idea of borrowing upon interest, to raise up for paper systems a sufficient degree of popularity to support the craft. If the interest, which is the price paid for a loan, is adequate to the value of its use, that use is sold and bought, and not loaned. And such must be the case, as the interest or price is taken or refused at the option of the lender. A nominal borrower is therefore a real purchaser of this use at value, which value he must pay as long as he holds and purchase; nor does he by the purchase of money for interest, differ from a tenant who purchases land for rent, in point of being able to anticipate the wealth of futurity. A new tenant or a new generation may succeed the old, and each may continue to pay the same rent for the land or money, but their predecessors paid it also, without getting any thing out of time to come. This observation applies with still more particular accuracy to funding systems, in that branch of their policy, never to redeem the principal, but to receive a perpetual rent for it.
An individual who borrows money, like one who rents land, does not bring forward for his own use, the least portion of the wealth of time to come. Could he do this, borrowing would make an existing individual wealthier; but as it generally makes him poorer, it seems evident, that he pays himself the value of the use of the money he borrows. If A, having land worth ten thousand pounds, borrows that sum of B, A does not become worth twenty thousand pounds at the expense of his posterity. He has only sold his land to B, and turned his fortune into money; but B indulges A with cultivating the land, and paying its rent under the name of interest. So if a nation, whose lands are worth one hundred millions, borrows and funds that sum, it has only sold or mortgaged its lands to stockholders up to their value, who receive the rent in the name also of interest or dividends. It has not added to its wealth, or drawn any thing from futurity, but only turned its land into money. And between the nation and a private debtor is this difference; that an individual who sells his estate, receives and uses the purchase money; but a nation which turns its estate or any portion of it into money by borrowing, loses both the money and estate.
But the evil is not terminated with this loss. If an age is supposed to consist of twenty years, and it borrows at five per centum, it loses the principal, first by its perversion from publick use to the gratification of private avarice or ambition: secondly, by its entire repayment during the borrowing age; and moreover all individuals who exist above twenty years, pay their proportion of the principal borrowed for each cycle of additional existence. Many will pay three hundred per centum for anticipation in this way only, but few will receive any thing from it, and all subject their descendants for ever to a repayment of the whole principal for every revolution of the stockjobbing orb, without a possibility of their deriving any benefit from it. To these requitals of an existing generation, for attempting the impossibility of enriching itself at the expense of its posterity, a long catalogue of the same complexion might be added. Such as the number and expense of new offices, produced by borrowing, not only to expend the principal, but to collect and pay the interest; and the oppression inevitably resulting from dividing a nation into inimical interests. These arguments are bottomed upon the concession of a similitude between renting land and borrowing money, whereas the true similitude from which we ought to draw our conclusions in regard to funding systems, would be one between paying rent for the picture of land, and interest for the picture of money.
If the borrowing age, far from enriching itself, is a sufferer; a system, by which each succeeding age, undergoes the same or greater evils, must be vitally malignant to human happiness.
We have been unable to deduce any paper system, from the origin of honest intention or national defence; but as such an origin, would not alter its effects upon human happiness or liberty, or upon the civil policy of the United States, it is fair to conclude, that as the effects of funding or anticipation will be evil, though the motives which gave rise to it should be honest, so the system is incurably erroneous, even under its most upright application.
Of our civil policy, division and responsibility, are the chief pillars. An accumulation of wealth by law, is the counter principle to that of division. And out of this accumulation will grow an influence over the legislature, which will secretly deprive the people of their influence over it.
This principle of division has been applied to the laws of inheritance in every state in the union; to divide land and accumulate stock, exhibits a political phenomenon, worthy of an attentive consideration; because its consequences must be new and curious. If an accumulation of landed wealth, by the narrow and limited efforts of talents and industry, is an object of jealousy to our policy; an accumulation of paper wealth by the extensive power of law, cannot be an object of its approbation. Land is in some degree a representative of every man’s interest, as being the source of human subsistence, and a landed interest cannot tax without taxing itself. Out of paper stock nothing grows. It only represents the interest of its holder, and it can tax, without taxing itself. It must do this, because it can only subsist upon the subsistence it can draw from land and labour; and as an imposer of taxes it is strictly analogous to a legislature of officers receiving legal salaries. If a landed interest, though naturally friendly to man, may be corrupted by moulding it into a separate order; and rendered malignant and oppressive in a considerable degree; it is extremely improbable, that a paper, stock, or taxation interest, can be changed from a foe into a friend, by the means which convert a friend into a foe. The English have paid some regard to their principles of checks and balances, by leaving primogeniture, or an hereditary landed political order or faction, standing, as an offset against their monied faction; the American legislatures have paid no regard to their principles of division, and responsibility, and more entirely partial to a monied faction, of their own architecture, have destroyed this offset, alone capable of holding a monied faction in some state of responsibility; and secured agricultural subjection to their offspring, by charters for accumulating one, and laws for dividing the other.
It is plausible consideration against this conclusion, that the laws of distribution reach and scatter paper wealth, as laws of inheritance do landed. The following fact, settled by experience, is a conclusive answer to the objection. The English laws of distribution, by which paper wealth is divided upon principles similar to our laws of distribution, have been unable to prevent the existence of a separate, stock, paper, or taxation interest, or the ruinous effects of that existence.
Such is the fact; let us search for its cause. It presents itself in the consideration, that corporations, or factitious separate interests, neither live nor die naturally; they only live or die by law. An established church for instance, is a factitious separate interest, not of natural, but of legal origin, and by law only can its existence be terminated. By increasing the number of priests, and dividing the income of this separate interest among more members, the interest itself is not divided; and instead of being weakened, it is strengthened. So in a separate, stock, paper or taxation interest of any kind established by law. It is an interest one and indivisible; and though the laws of distribution may occasionally add to the numbers benefited by it, these additions are recruits similar to new levies added to an army, or new priests added to an established church. In all three of these cases, an interest, created by law, and subsisting upon a nation, becomes stronger, by multiplying the individuals united to it with a participation in its income; and weaker, by diminishing the number of these individuals. Such interests are incapable, as will presently be proved, of including the majority of a nation, or of a general division among its members; the cement of fear, excited by a perpetual danger of the stroke of death, from their creator, law; and a consciousness of physical imbecility, distinguish them from the object of their apprehensions.
None of these causes will prevent a landed interest from being weakened by a division of lands. Land is not created by law; therefore it is under no apprehension of its death stroke from law. It does not subsist upon other interests; therefore it is not beset by an host of enemies, whose vengeance it is conscious of deserving. By the operation of laws adverse to its monopoly, it quickly adjusts itself to the interest of a majority of a nation; thenceforward it is incapable of the avarice and injustice of a factitious legal interest, because no temptation to seduce it into either, exists. To this point of improvement, a landed interest will invariably be brought, by laws for dividing lands; nor can it be corrupted, except by laws which confine lands to a minority. Then it becomes in a degree a factitious legal monopoly, capable of being favoured by law, and infected with a portion of that malignity, which constitutes the entire essence of a minor separate interest purely factitious.
A paper, a military, or an established church interest, cannot, it has been asserted, include a majority of a nation, as may a landed; because a majority cannot live upon a minority, but a majority may live upon land. Let us take a paper interest of any kind to illustrate this assertion. It is simply debt, in all its forms. If I give a bond to myself, it does not add to my wealth, or create a new interest. If a nation should create any portion of debt, and sustain it in a state of equal distribution among all its members, no separate interest would thence arise. Creditor and debtor are characters essential to the existence of a paper property or interest; if these characters are united, the quality of value flees from paper. Imagine a nation consisting of one million, having paper stock of one million, each person holding one share, and equally taxed to redeem this stock. The principle of division obviously annihilates in this stock, the quality of value or property. But give ten shares each, to one hundred thousand of the same nation, and these qualities are instantly annexed to the stock. But land neither loses its value by division, nor is that value enhanced by accumulation. It is therefore capable of escaping the infection of monopoly, whilst a paper interest cannot exist without it; of this interest, monopoly being the vital principle, the laws of distribution cannot destroy it, without putting an end to the system itself.
The gradual progress of the laws of distribution, must aggravate the evil of a paper monopoly, until the very moment at which they might be made to produce its destruction. As a paper interest draws its subsistence from the residue of a nation, an increase of the number to be subsisted, will add to the burden of furnishing this subsistence; just as an increase of soldiers or priests, will add to the burdens of the nation which maintains them. So long as the increase of an army or priesthood is attended with national ability to maintain them, the effect of bringing more soldiers or more priests to share in a religious or military monopoly, is an aggravation of national oppression; but the very instant a distribution of a religious or military monopoly is extended to a majority of the nation, by making them soldiers or priests (as in the case of a national militia) the ability in the residue to maintain it would cease, and with it, the oppression would cease also. In like manner, the laws of distribution are only capable of affecting a paper interest in two modes. By aggravating its mischief, or producing its destruction. And they must of necessity operate in the first way, until they terminate in the second. Their first effect is certain, and must continue for a long space, to produce a chance for the second; and it is after all highly improbable, that the second will ever happen.
The laws of distribution therefore aggravate the evils of a paper monopoly, whereas those for dividing lands diminish the evils of a landed monopoly. The fact in England and the United States, exactly corresponds with these arguments. The distribution of a paper interest to greater numbers, has strengthened the paper monopoly in both countries. A landed monopoly in England, though supported by the law of primogeniture and a legislative order, is hardly felt as a political principle. There, the mere right of alienation has produced a division of lands, sufficient to destroy a landed aristocracy, and enfeeble a landed interest; and laws for dividing or distributing paper stock, have created and strengthened a paper aristocracy. The latter have the same effect as laws for multiplying offices, in order to cure the ill effects of patronage; or for increasing a nobility or clergy for the purpose of abolishing an order.
Having proved that laws of division or distribution, will counteract landed and aid paper combinations for usurping a government; we will proceed to subjoin a few of the effects which will result from the destruction of a landed, and the creation of a paper monopoly.
As landed possessions are divided, the leisure and income of the proprietors will be diminished; and as paper property is accumulated, the leisure and income of the holders will be increased. The weight of talents will follow leisure and wealth; and these will gradually acquire a locality, corresponding to the abodes of the receivers of stock taxation. This superiority of talents and wealth will invest individuals, and the cities in which they will chiefly reside, with an influence, well calculated to acquire an ascendant over the landed interest, gradually impoverished by division. And though this landed interest may not suddenly sink into an ignorant, scattered, disunited peasantry, taxed by paper operations, to enrich, instruct and elevate a new species of feudal capitalists, yet the tendency of the system is exactly to that point, and the arrival of an unobstructed tendency, is inevitable.
If the division of landed property has a tendency to increase the ignorance of the numerous and valuable portion of society which cultivate it, a defect of the American policy in not providing some remedy to meet this evil, is disclosed. From preventing an accumulation of landed wealth, and providing for a monied or stock monopoly of knowledge, a reason arises for placing the best educations within the reach of that great mass of people, called the landed interest; instead of which its inability to purchase knowledge is studiously increased, by a division of inheritances, and by the annual draughts upon it for the interest and dividends of debt and bank stock. The ignorance of land holders will thus in time be brought to a standard exactly sufficient to render them tame, and subservient to the interest of a stock aristocracy; an event which may even be accelerated, by taxing them for the purpose of diffusing a knowledge of the vulgar tongue, and vulgar arithmetick. These laws for dividing landed property, and levelling landed knowledge, form a striking contrast with those for accumulating stock wealth, and of course stock knowledge. Are both consistent with the principles of our governments? If I wished to level a field, merely preserving that degree of inequality, necessary to prevent the effects of stagnation, ought I to rear a mountain in the midst of it? Is an accumulation of wealth and knowledge by law in a few hands, to be found in any recipe for making a free republick?
The errour of landed wealth, in favouring a paper aristocracy, because it is friendly to a landed one, rises into view at this moment. It does not perceive that even in England, a landed aristocracy has been vanquished and is governed by a paper or stock aristocracy. It does not perceive that a landed aristocracy cannot exist, under our laws, the extent of our country, and the multitude of proprietors; majority is not a quality of aristocracy. And it will not perceive that the landed interest is under our circumstances, irretrievably republican. Being so, the preservation of principles adopted to its nature, or a sale or mortgage of itself for the maintenance of a stock aristocracy, is evidently its solitary alternative. Our landed interest is incapable of forming the aristocracy required by Mr. Adams’s system of limited monarchy. In England, the aristocratical power which now props the throne, is compounded of arms, paper and patronage; not of the landed interest. Will a paper system, which has destroyed the power of a landed interest in England, revive it here? Has a landed aristocracy existed, or can it exist, in community with alienations, commerce, the division of inheritances, and the absence of perpetuities?
Perhaps an imaginary apprehension may have suggested the idea, that the mode by which Walpole fixed a tottering throne, was necessary for the establishment of our union. But such an idea is a traitor to that union. Principles can never be established by their contraries. Monarchy may corrupt a faction to support itself, consistently with its principles; but national will cannot corrupt a faction to guide national will, without perishing at the instant of success. Had the proposal been made, it would have been reprobated by every individual friendly to the union. Is the attempt less to be reprobated, than the proposal?
The English have been made to pay hundreds of millions for the Hanover family; but why should the Americans buy the union at the same price, of any party, whether whig or tory? No one has a claim to it, as Stuart had to the throne of England, therefore we can keep it as our own undisputed right. It may be retained by virtue, moderate government, and easy taxes; but it dies under the influence of paper stock. And out of this dissolution the resurrection of Mr. Adams’s theory of three orders cannot arise. There can be but two under the system of paper, namely, creditor and debtor, patricians and plebeians, or masters and slaves. We agree with Mr. Adams that two orders will render a nation miserable, though we have denied that three, or even a number equal to the castes of India, will restore it to happiness.
The orders of creditor and debtor, make the system of Spartans and Helots. One will live in idleness upon the labour of the other. But the luxury of the present age, and the effeminacy of modern Spartans, doubly aggravate the malignity of the theory in our imitation. Infinitely more income is required for the paper Spartans, and labour from the free Helots, without the retribution of national defence. But if our modern Spartans are not heroes, they have disclosed an inimitable portion of dexterity, in prevailing upon the order of Helots to buy heroes to knock their fetters on and not off; and to defend, not the nation, but the income of the Spartan order.
It is believed by the intelligent writer of the life of General Washington, that the United States were divided into two parties and brought to the brink of ruin, soon after the peace with England, by the struggles of creditors and debtors. If he is right, he cannot be just or wise to create by legal artifice the two characters to an extent, beyond that which then threatened them with ruin. Paper stock forces every individual into one of these parties, without leaving in the nation a single disinterested umpire, to assuage the passions inspired by a belief, that we have a right to receive what the law gives, and a right to withhold what it unjustly transfers. These will not be the parties of private contract, restrained by the voice of conscience, and moderated by the decrees of impartiality; but of fluctuating interested faction, legislating to get or to keep wealth, and looking only into its own law for justice and judgement.
Paper stock, patronage, and sinecure, profess an affection for commerce, because she is a convenient cord or tackle, to draw out of land and labour, the money which bestows on them wealth and power. For this purpose has English commerce been used, by paper stock, patronage and sinecure, and the maritime force necessary to sustain, is an evidence of their latent hostility towards it.
Dazzled by the splendour of English commerce; shall we forget that we cannot conquer and keep both the Indies, nor compel the world to obey a navigation act for laying it under contribution, by the prowess of stock? Force, conquest, and colonization, furnish the food to English commerce, which it disgorges to be again swallowed by paper stock. Should our commerce mistake this devourer for nourishment, unpossessed of the power of forcing its liver to grow as it is eaten, it will soon cease to excite the jealousy of English commerce. The prosperity which has awakened that jealousy, was produced by its freedom; and the vigorous health hence derived, will speedily be exchanged for the hypochondriacal, and convulsive fluctuations of law, war, and stockjobbing, if it is placed under the patronage of paper stock.
Charter, monopoly and aristocracy in their several forms (those of funding and banking excepted) have been considered by commerce as her foes. She will not even own for her friends, monopolies bestowed on merchants; and although, under the delusion of containing within herself qualities for constituting separate orders or interests, she has sometimes obtained them, yet she has universally upon trial found them unnatural to her constitution.
Adverse to this idea is the paradoxical opinion, that commerce may be made to flourish, by a paper capital, local, fictitious, and oppressive to land and labour. An opinion, contradicted by the commerce of Carthage, under a defective navigation; and by the inability of English commerce to meet its rivals with the advantages of the greatest stock capital in the world, a superiority of manufactures, geographical advantages, and an irresistible navy. She doffs the habiliments of a peaceable trader, cases herself in armour, and kills or maims her relations, to support that life and rivalry with foreign nations, to which her stock regimen renders her unequal.
If these reasons are insufficient to prove, that paper stock is inimical to commerce, the next question is, whether it is able to bestow upon her benefits, which will counterpoise the advantages she derives from a free government? Upon this question she will still find her interest united to her old friends, land and labour. If paper stock will destroy the sound principles of governments, by corrupting their administrators, will it compensate land, labour and commerce, for enslaving all three? Agriculture, manufactures and commerce, are indigenous, as it were, to human comfort and happiness; paper stock is a foreign invader, whose object is to subdue these close friends and natural allies, by instilling an opinion, that one of them will be benefited by deserting to the common enemy.
An association of casualties, frequently begets very whimsical associations of ideas. The rare casualty of despotism and national prosperity, existing together, has begotten an opinion, that despotism would make a nation prosper. And the commerce of England, made up of a complication of circumstances, has begotten an opinion, that the system of paper stock was favourable to commerce. That the opinion flows from this source, is undeniable, and that it is a source producing only a medley of errour, is equally so. It would be as correct, to pick out of this complication, any other circumstance, and to ascribe to it the state of the British commerce, as to paper stock; and many might pretend to such a distinction with far greater plausibility.
Commerce, monarchy, paper stock, legislative corruption, privileged orders, charters of exclusive commerce, and hierarchy, exist together in England. Is there an affinity also between paper stock and monarchy, legislative corruption, privileged orders, exclusive charters for commerce, and hierarchy, because all exist with it; the reason supposed to prove the affinity between this stock and commerce; or is the simultaneous reason sound in one case and unsound in all the others? Or if the combination of paper stock with commerce, monarchy, legislative corruption, exclusive charters and hierarchy, proves its affinity to all, would it be best to take all for the sake of commerce, or to eject all for the sake of liberty?
The dilemma is avoided, by exploding the errour of considering paper stock as favourable to commerce, because they exist together in England. That one is the bane of the other, we have already inferred from the necessity of England to resort to war and conquest to cultivate her commerce. That one could acquire opulence without the other, is proved in the experience of Carthage. And the early dismay with which England beheld a commercial competition with America before her introduction of paper stock, is a modern concurrence with ancient experience.
The commerce of the United States commenced its operations unconnected with paper money, and advanced for many years without acknowledging its aid; it was obliged to travel from one hemisphere to another, before it could enter into competition with its rivals; it was unprotected by fleets; it traded on the funds of four millions only of people, cultivating a soil, poor in comparison with many countries to be rivalled; and it possessed no foreign dominions to fleece. Yet it suddenly aroused the jealousy of the most extensive commerce in the world, by outstripping all others. These effects appeared either before it was possible for it to owe any obligations to paper money, or whilst such obligations must have been inconsiderable. But our commerce was free. Will it not act precipitately in deserting a career so happily commenced under the auspices of freedom, to enlist under those of paper stock, from an opinion that its rival derived opulence from that source? It may by the experiment enslave itself without enslaving India; it may oppress its land and labour associates by a fleet, without acquiring the empire of the sea; it may guide crowds of people by monopoly, into a willingness to exchange a moderate climate and fertile soil, for torrid and frigid zones; and to snap all the ties of the human heart, in an eagerness to flee from the direct and indirect taxation of paper stock; without possessing a Botany Bay to hide the crimes, which oppression will beget; and having at length lost its original vital principle, it may in its last agonies deplore the infatuation, which dazzled it with the unattainable and transitory expedients of English force and monopoly.
Paper money is precisely as unable to draw up out of futurity, the commodities of commerce, as the energies of war. The stock in trade of an individual may consist of signs or representatives, but the stock of commerce consists of the things themselves; namely the products of the earth, and manufactures. Specie cannot draw forward any of these things from the next century into the present; it can only draw them from one country into another; even this cannot be effected by local paper money; its office is to transfer real wealth from man to man, not by commerce, but by a juggle in legal and local signs of property. This is effected by monopolies for uttering, and regulating the quantity of paper money. It has been a general opinion that monopoly was a principle, unfavourable to commercial prosperity. Commerce struggled to destroy perpetuities, and monopoly to prevent alienations. In the distribution of wealth, commerce is active, unwearied and useful; devoted to its monopoly, she becomes speculative, voluptuous and pernicious; under the latter employment she sickens; unnatural as its is to her, it is the essential quality of paper systems. Whilst the office of one is to distribute and of the other to monopolize, a natural enmity is strongly to be apprehended.
That paper stock will have the effect of accumulating wealth in the hands of individuals, is admitted by its friends and foes, and confirmed by experience. This effect is the exact reason felt in its defence. It can only be produced by thievishly taking from some to enrich others; or by miraculously drawing up out of futurity the commodities of commerce, as it pretends to do the energies of war; or by propelling and exciting human industry: it remains to consider, whether, in this last character, it acts as a goad or a reward; and whether any more effectual, permanent, and upright mode of excitement is practicable.
Several ideas occurring here, will be postponed until the subject of banking is considered. At present, however, it is necessary to remark, that stock, created for war or commerce, will equally excite either as a goad or a reward, and that if it acts as a goad, it behoves us to consider whether industry, like bravery, may not be excited in some better mode.
Any species of paper stock, which is a debt upon national industry, is taxation. Taxation is not a reward. It belongs to the tyrannical class of excitements. If such excitements have a stronger influence over the human mind, than those arising from the principles of social liberty, the governments of the United States are founded in an erroneous policy. They have all conceived that industry would be better excited by justice, than by taxation; that commerce to flourish, needed only to be free; and that by freedom, the supplies of land and labour would be increased. By free and moderate government, our constitutions have expected to excite a military spirit to enrich our country. Neither the monopolies of standing armies, hereditary perpetuities, or chartered currencies, were considered as the best excitements for defending, cultivating, or enriching it.
A feudal or landed monopoly starved commerce, because it tended to discourage industry, by which commerce is supplied. This effect flowed from the injustice of enriching by legal monopoly without industry. A monopoly for the regulation of a paper currency, far more exceptionable, enriches by law without industry; and in producing the same effect, discloses that it is the same principle. If this monopoly was guided by a noble order, unconnected with commerce, she would exclaim against it; and guided by her, she is able to use it to oppress agriculture and labour, just as the feudal monopoly was used to oppress labour and commerce. That she would diminish her own prosperity, is an insufficient security against the abuse of such a monopoly. The landed interest diminished its own prosperity, by the oppression of commerce and labour. By justice, as to all three, a nation will prosper; by enabling either to draw wealth from the other two, by law, without industry, the common good or general interest is invariably wounded.
Equally remediless is the evil of corporate bodies for regulating commercial currency, by the expedient of forming them with land holders, merchants, and manufacturers. That a land holder will not oppress a landed interest, is a stale and exploded idea. If he receives the tax or the office in which the oppression consists, although he contributes towards it from his land, the security vanishes. The whole catalogue of tyrants have been land holders. If a bank currency is a tax upon land labour, and commerce, as will hereafter be demonstrated, stock holders, even composed of land holders, merchants and manufacturers, will for ever remain willing to receive the whole tax, though they may contribute a proportion of it. Nor will it follow, that bank or funded stock is beneficial to the landed, commercial or manufacturing interest, because we see several land holders, merchants and manufacturers enriched by it; any more than that sinecure offices would be beneficial to these interests, were we to see several land holders, merchants and manufacturers enriched by them. It is the income drawn from land and labour, and not any benefit rendered to commerce by stock, which causes its wealth. And this fact is the true reason, why stock transplants men from the natural interests of society, into the artificial interest of paper and patronage.
To buy cheap, and to sell dear, is admitted to be the object of commerce. The English mode of effecting these objects, is to compel labour to sell, and foreign nations to buy, at the prices which paper monopoly shall settle. If the code of pillage contains a law, allowing one nation to pilfer another, that of social justice contains none, by which the idea, of enabling an artificial interest, directly or indirectly, to force down or regulate the prices of the natural interests in the same community, can be defended.
No benefit arises to a nation from such an operation. It merely creates a rich order, by creating a poor order. The wealth obtained from the foreign nation by the reductions imposed upon the price of labour at home, is only taken by force or fraud from that labour, and given to stock capitalists. This is precisely the species of excitement produced by the English, and all other paper systems. National, social and moral law unite in pronouncing it to be unjust.
And however it may enrich a few, it impoverishes and oppresses a multitude, and changes commerce into a national curse. It becomes a blessing, whenever one nation can undersell another; not when an order or several merchants, are enabled to undersell foreign merchants, at the expense of fellow-citizen manufacturers. It is no benefit to the plundered, that the robber can undersell a fair purchaser.
The rival modes for enabling one nation to undersell another, are, the English, composed of force, fraud and paper, and calculated to render labour subservient to avarice, by bestowing on the latter the power of regulating wages; and that, which acquires the same advantage from the moderation, freedom and cheapness of the government. By this system the United States have successfully rivalled Europe, and obtained a degree of prosperity not embittered by the reflection of having killed and plundered foreign nations, and oppressed fellow-citizens, for the sake of commerce.
If paper systems are in their nature suitable to legislative corruption, aristocracy and monarchy; and if the momentum they bestow upon commerce, will enrich a few and impoverish a multitude of the same nation; yet, it is still said, that paper stock or national debt is an augmentation of national property, in addition to its retributing a nation for the taxes it inflicts, by the industry it excites.
The 5th chapter of Sterne’s posthumous works, gives an account of a pamphlet written by himself in defence of Sir Robert Walpole, and contains the origin of this doctrine. He proved, says he, ‘that the accumulation of taxes, like the rising of rents, was the surest token of a nation’s thriving; that the dearness of markets, with these new imposts of government, necessarily doubled industry; and that an increase of this natural kind of manufacture, was adding to the capital stock of the commonwealth.’ He subjoins, ‘that his book had been the codex, or ars politica of all the ministerial sycophants ever since that æra; and that he had scarcely met with a paragraph in any of the state hireling writers, for many years past, that he could not trace fairly back to his own code.’
If American commerce, dazzled with the glare of the English, produced by consuming great masses of domestick and foreign happiness, is insensible to the prophetick satire of Sterne, and the catastrophe hovering over her rival, we must intreat her to have recourse to her own skill in calculation, and to estimate political consequences, with only half the attention she would devote to a trading voyage.
Mr. Adams has told her, that three orders, two of them hereditary, are necessary to create a limited monarchy, a monarchical republick, or the English form of government. We remind her, that orders appear in every monarchy, limited or despotick. The nobility of Germany, France and Spain, the Mandarins of China, the Nabobs of India, the Bashaws of Turkey, and the military order in every form, are proofs, that monarchy, mixed or pure, can only be supported by orders.
If we have proved, that paper systems lead to the establishment of orders; and if those which are guilty of oppression, or those which suffer it, are naturally driven to monarchy for defence or protection, orders or separate and inimical interests, are universally to be considered as the prelude to monarchy. And whether they will terminate in a limited or absolute monarchy are the events to be calculated. The probability of either is only to be inferred from experience. And the evidence of experience is found, by counting the cases wherein orders or separate legal interests, have resulted in absolute despotism or limited monarchy. The catalogue of the first class, is almost coequal with the number of governments, which have ever existed; and one case exists, or in its purity has existed, according to Mr. Adams, of the other.
This is the adventure, upon which American commerce is embarking her freedom and prosperity. By favouring the English paper system, she endeavours to introduce separate and inimical interests; these will beget monarchy; there is a thousand to one, that this monarchy will be absolute, even supposing that one case does exist, wherein orders have protected liberty by checking monarchy. If no such case exists, she exchanges her freedom and prosperity for slavery; if it does, she takes the chance of one against a thousand, of exchanging it for limited monarchy, in preference to a free republick.
But commerce will exclaim that she is an enemy to orders or separate interests, that she is a republican, and in favour of equal rights and privileges. We shall believe her if she unites in the expulsion of a separate interest; but if she craftily turns her eyes from the quarter, on which it is advancing, however vociferously she may call our attention to a feint, she will be suspected; of a confederacy with the enemy.
Nobility and hierarchy are not the only modes of constituting orders, proper for fomenting national discontent, and introducing monarchy, if it is true, as Mr. Adams asserts, and as all mankind allow, ‘that wealth, is the great machine for governing the world.’ Hence wealth, like suffrage, must be considerably distributed, to sustain a democratick republick; and hence, whatever draws a considerable proportion of either into a few hands, will destroy it. As power follows wealth, the majority must have wealth or lose power. If wealth is accumulated in the hands of a few, either by a feudal or a stock monopoly, it carries the power also; and a government becomes as certainly aristocratical, by a monopoly of wealth, as by a monopoly of arms. A minority, obtaining a majority of wealth or arms in any mode, becomes the government.
Nobility and hierarchy cannot acquire in the United States the article of wealth, necessary to constitute a separate order or interest, and therefore they can only be used as feints to cover the real attack. It cannot be forgotten, that aristocracy is a Proteus, capable of assuming various forms, and that to make these forms appear in that natural hideousness common to the features of the family, it is necessary to touch it with some test. An accumulation of wealth by law without industry, is this test. In our situation and temper it can only be effected by patronage and paper, which now bestow monarchy and groans upon England. Title without wealth is the shadow; an accumulation of wealth by law, is the substance. We have only to determine which is the feint, and which is the foe.
We hear indeed of the aristocracy of the first and second ages, from the repinings not the efforts of hierarchy and title; whilst paper systems and patronage, the aristocracy of the third, are using force, faith and credit, as the two others did religion and feudality; and these new artifices cloak themselves under the smoke produced by the explosion of the old.
Against one shadow of aristocracy, the general constitution provides in these words, ‘no title of nobility shall be granted by the United States.’ Suppose, as a provision against the other, some member of the convention had proposed, ‘that the reinstatement of Jupiter, and the convocation of Olympus should be prohibited:’ Ought he not to have been seconded by the inventor of the security against aristocracy, contained in the prohibition of titles? The people of England were taught to believe, that they had nothing to fear except from the pope and the pretender, by the ministers who mortgaged them irredeemably to oppression.
Imaginary Gods and empty titles, are in the United States equally to be dreaded, and are equally able to erect the aristocracies of superstition or feudality. A pecuniary interest, quartered on nations by law, is here the engine of power and oppression. Unnecessary office, sinecure income, stockjobbing by the law-maker, a legislative patronage of separate interests or factions, and a concentrated power to tax, to incorporate, to borrow and to receive, make up the convolutions of a serpent, which is silently and insidiously entwining liberty; and to divert our attention from the operation, we are terrified by the dead skeletons of the two ancient aristocratical mammoths.
Superstition has received its death blow from knowledge; a landed aristocracy, from commerce, alienation and the division of inheritances. Against the dead, liberty is safe; from the living aristocracy of paper and patronage alone, she can receive a deadly wound.
A man, being informed that three assassins had determined upon his death, but that two of them had suffered the punishment due to other crimes, solemnly anathematizes the dead bodies, and takes into his bosom the living murderer. Liberty is the man; superstition and title her dead enemies; and the system of paper and patronage her living foe.
But we are blinded by names. Hierarchy concealed its malignity, by usurping the name of religion. The new system of oppression conceals itself, by calling patronage, necessary office; a funding system, faith and credit; and a banking system, an encouragement of commerce. Mankind have discovered the difference between religion and hierarchy; they must also discover that between useful and pernicious offices, between genuine and spurious faith and credit, and between commerce and monopoly, before they can maintain moderate and free governments.
The system of paper monopoly deceives no less by rejecting, than by assuming names. It renounces titles, that it may be thought to have renounced aristocracy. And it renounces disorderly government, that it may be thought to have a regard for private property. But titles are inconsistent with its species of aristocracy, and property is more securely and permanently invaded and transferred, by a regular and orderly system, than by occasional and disorderly violations.
This love of property is artfully seized by the system of paper and patronage, as a handle with which to guide human nature. Whilst superstition was its strongest passion, that was the handle used for the same purpose. But this system, discovering that a love of superstition has given place to a love of property, and concluding that mankind are fated for ever to be traitors to their reason and dupes to their passions, moulds them to its purposes by the same means which superstition used successfully for ages.
Had the system of paper and patronage, proposed to give property in Heaven for property on earth, the countless profit of the exchange might have reasonably attracted the passion of avarice, and in some measure varnished over the imposture; but when it imposes on a love of property, by pretending to revere and protect, that which its only employment is to violate and transfer, we cannot forbear to exclaim, that avarice is a greater fool than superstition; we are dismayed at discovering that a stronger engine for manufacturing tyranny exists, than superstition itself; the mind startles at its own imbecility, and shudders at its visible love of imposture.
A love of property, under which the system of paper and patronage crouches, is the very passion by which it ought to be assailed. All frauds pretend to be founded upon the principles, which apply most forcibly against them; just as superstition pretended to be religion. So this system uses the passions of avarice in others, to gratify its own. By pretending to protect property, it acquires property. It ingeniously persuades us, that it can effect the first object, without possessing a single quality adequate to it; and that it does not effect the other, with qualities competent to no other end. And it gravely and loudly proclaims its love of good order, but conceals that its motive for such apparent integrity, is the perpetuation and security of its own unjust acquisitions.
A love of good order, is a publick virtue. It is more useful the wider it is diffused. Is it good policy to bribe a minority into a profession of this virtue, by suffering it to pillage a majority? Is good order secured by rendering the mass of a nation discontented, to content a few? Let us inquire whether such a policy is wise. No one will assert that it is just.
The love of property is now the second basis of civil government. The question is, how a wise statesman should avail himself of this passion. If he forcibly or fraudulently takes wealth from a multitude, and gives it to a few, these few, it is confessed, will support all his projects, bad or good; and call his government orderly, and a protector of private property. But if he forbears to take directly or indirectly from the multitude, in order to corrupt a faction, he acquires the affection and support of this multitude. The difference between the acquisitions is this. The corrupted faction will adhere to the vicious as well as just measures of our statesman; the majority, treated justly, will condemn his vices, and only applaud his virtues. That government or party therefore which designs to do wrong, will resort to one policy; and that which designs to do right, to the other.
It is a falsehood, that the policy of enriching a minority at the publick expense, is ever resorted to, for the purpose of protecting property; or that it is capable of any such effect. The idea of hiring a minority in civil government, to protect the property of a majority, is visibly absurd. Both from its physical inability, and also because all minor interests invested with political power, have universally violated property. That they shall necessarily do so, is therefore a settled moral law.
Our policy and constitutions rigidly distinguish between good and evil moral principles, upon this subject. The love and protection of property was one of those good moral principles which caused the war with England. In a government, it is only a virtue, so long as this love and protection shall be impartially extended to every member of the society. Of this virtue, avarice is the correspondent vice. It loves and pilfers the property of others, and protects what it gets. Does the system of paper and patronage correspond with the virtue or the vice?
The force of this reasoning is sometimes eluded, by charging it with assailing the propriety of taxing, for the support of civil government. This is an artifice to hide the iniquity of taxing for the benefit of the aristocracy of paper and patronage, under the justice of taxing for the common good. To infer that we are inimical to needful taxes, from our endeavouring to display the principles and effects of the aristocracy of the third age, is only a repetition of the artifice, which induced the aristocracy of the first age, to accuse a man of irreligion, whenever he reasoned against superstition.
Despotick power strives to blend itself with legitimate government, as paper stock does with private property; both endeavouring to sanction the evils they dispense, by the blessings which flow from the resemblances they falsely assume; and private property, the earning of labour, the reward of merit, the almoner of age, and the soul of civilization, is transformed by stock into a political monster, as hideous as government transformed by tyranny. It becomes the right of fraud, the scourge of industry, and the instrument of despotism. Stock private property, can condemn the seventh part of the most industrious and ingenious nation in the world, to poverty and vice, or to hospitals and prisons. When freedom and tyranny are both called government, and rightful acquisitions and paper stock both called private property, it can only be, to say the most for such denominations, as Gabriel and the Devil are both called angels.
Mankind have suffered nearly as much from confounding natural with fictitious property, as from confounding legitimate with spurious power. If the acquisitions of useful qualities are genuine private property, can the crafty pilferings from useful qualities under fraudulent laws, to gratify bad qualities, be genuine private property also? If the fruit of labour is private property, can stealing this fruit from labour, also make private property?
By calling the artillery property, which is playing on property, the battery is masked. Tythes and stock, invented to take away private property, are as correctly called private property, as a guillotine could be called a head. The system of Mr. Adams and Lord Shaftesbury, is founded upon the principle of applying the guillotine of law, to property instead of heads, to keep wealth, to which they both correctly annex power, balanced among three orders; the stock system is founded in the same principle, with this difference, that it takes away the entire property or its profit from majorities, whereas the system of orders is content with two thirds of it.
There are two modes of invading private property; the first, by which the poor plunder the rich, is sudden and violent; the second, by which the rich plunder the poor, slow and legal. One begets ferocity and barbarism, the other vice and penury, and both impair the national prosperity and happiness, inevitably flowing from the correct and honest principle of private property.
When it is proposed to tax stock or tythes for the support of civil government, they claim the stipendiary character to procure an exemption from taxation; but when it is proposed to abolish them, because the services under which this stipendiary character is claimed, have become useless or pernicious, they as loudly claim the character and the rights of private property. Feudality, hierarchy, and paper stock, have each successfully resorted to these subterfuges to keep justice at bay; and had the English House of Commons been open to the clergy, as all the departments of the American government are to stockjobbers, the former would probably have still maintained the same invaluable exclusive privilege, which the latter now enjoy.
The American constitutions are equally opposed to invasions of property by fraudulent and swindling laws; or by impracticable, dishonest and ruinous equalising reveries of political enthusiasts. They pursue the idea of securing to talents and industry their earnings, and not of transferring these earnings to others. Therefore they have rejected an equality of property, standing armies, hierarchies and privileged orders; and had they foreseen, that their principle in relation to property, was capable of being undermined by paper magick, that also would have been specifically guarded against.
Accumulations and divisions of property by law, simple or complicated, are equally adverse to our policy, and to moral rectitude. Both will excite hatred, discourage industry, and infuse knavery into the national character, by dividing it into factions, perpetually striving to pillage each other. Whether the law shall gradually transfer the property of the many to the few, or insurrection shall rapidly divide the property of the few among the many, it is equally an invasion of private property, and equally contrary to our constitutions.
If equalising and accumulating laws are the same in principle, it is inconceivable how the same mind should be able to detest the one, and approve the other. Integrity is compelled to reject both, and spurning at doctrines, calculated to incite the few to plunder the many, or the many to plunder the few, leaves every man under the strongest excitement to labour for his own and the national prosperity, from a conviction, that the laws are a mantle of justice, and not an intricate net to fish for his earnings.
Our policy is founded upon the idea, that it is both wise and just, to leave the distribution of property to industry and talents; that what they acquire is all their own, except what they owe to society; that they owe nothing to society except a contribution equivalent to the necessities of government; that they owe nothing to monopoly or exclusive privilege in any form; and that whether they are despoiled by the rage of a mob, or the laws of a separate interest, the genuine sanction of private property is equally violated. Are these the principles of our policy? Do paper systems correspond with these principles?
If legislative patronage enriches a portion of society, that portion is necessarily converted into an order, possessing the qualities of an aristocracy. It is placed between the government and the nation. It receives wealth from the one, and takes it from the other. This ties it to the government by the passion of avarice, and separates it from the nation by the passion of fear. And these two passions, annexed to any separate interest, have unexceptionably converted it into a political order, and forced it into the ranks of despotism.
War, in former times, enriched and aggrandized by conquest; in modern, by loaning. Titled orders, in the first case, usurped and monopolized what the nations they belonged to, conquered from their enemies; and by means of this usurped wealth, enslaved the conquerors. Paper orders acquire wealth in modern wars by loaning, although nothing is obtained by conquest. Now, a nation, by war without conquest, is made to furnish the means for its own subjection. The enemies of the Roman people, supplied the means for enslaving the Roman people. The English pay for their slavery themselves. An interest enriched by war, successful or unfortunate, must be separate and aristocratical.
Nations have effected an improvement in universal law, or the law of nations, without deriving from it the greatest advantage it is calculated to produce. Conquest respects private property; hence a nation can no longer conquer for itself. Formerly, every individual of a conquering army, got some share of the plunder; if his officer obtained a palace, the soldier got a cottage; if his officer obtained an house, the soldier got a cow. Then, one nation might be said to conquer another, although the spoil was unequally divided. But now the expression has become inaccurate, because there is precisely that degree of protection allowed by conquest to private property, necessary to the interest of the modern aristocracy of paper and patronage. As therefore, under the modern law of nations, no nation can gain any share of the booty, or conquer another nation, it is strange that nations should still go to war, when they can only conquer themselves; and that this propensity apparently increases.
In the solution of this enigma lies a proof, that paper stock is a separate aristocratical interest. Titled orders fomented war, as in the case of the Roman patricians, because they obtained the best share of the spoil. The nobility in England no longer foment war, because they are not aggrandized by it. And war has been still more ardently fomented in that country than ever, because their system of paper and patronage gain spoil by it in any event. Conquest furnishes it with funds on which to bottom more stock, and the war which made the conquest, with a pretext for quartering more patronage and paper on its own nation. Is not that a separate aristocratical interest which gains more by war and conquest, than orders of titled nobility formerly did? Those got most, this gets all.
The Roman aristocracy engaged the nation in war to aggrandize itself; but it entertained the people with shows, feasts and triumphs, and allowed them some small share of the booty. The English aristocracy of paper and patronage, engages the nation in war for the same purpose; and entertains the people with heavy taxes, hard labour, penal laws and Botany Bay.
Ancient and modern wars between civilized nations, have chiefly originated in the avarice and ambition of individuals, orders, or factions. A propensity for war, is evidently a separate interest inimical to a nation; and if this interest is contrived to derive vast accessions of wealth and power from every war, fortunate or unfortunate, from victory or defeat, it must be driven into a propensity for war, by an influence, exceeding in power, that which was sufficient to drive feudal barons into war, for their own advantage, and the oppression of mankind.
These barons were in some measure checked by the fear of danger. Their lives were risked in battle, and their possessions lost by defeat. But bank or debt stock shed no blood in war. To them it is a sure game. Hazarding nothing, a chance for winning of their foes, and a certainty of winning of their friends, must inspire them with principles more inimical to friends and foes, than even those of the separate feudal interest.
This system exhibits a new mode of enslaving nations infinitely more powerful than any heretofore invented. It can conquer a nation, whilst that nation is in a career of victory. Marlborough’s victories created more debt, and of course destroyed more liberty in England, than any previous war. It places governments beyond the influence or scrutiny of the people. Two governments may engage in war for the purpose of obtaining power and wealth, each from its own nation. The cause of quarrel, the battles, the sieges and the peace, might be all amicably arranged before the declaration of war; and a complete victory infallibly secured to both the governments, without the transfer of an acre of territory. The system of paper and patronage would be the key to such a war, as it is to the history of England for the last century.
This evident propensity for war, arising from the strongest conceivable excitement, of itself suffices unquestionably to establish the enmity of paper systems to our policy, if our policy is friendly to liberty. To that, every species of war is dangerous; and one, fed by paper systems, fatal. The princes leagued against France, though beaten in the field, obtained a victory at home by paper and patronage, and by the effects of war, destroyed republican opinions in France. War, in this one operation, has, before our eyes, diminished the liberty of about twenty European nations.
Not the titles of orders, but a separate interest from the rest of a community, has induced them to harass the human race with war. Are the privileged titles of England, able to govern or control its system of paper and patronage? If not, these titles have long ceased to be the cause of her wars. They have neither motive nor power to produce them. But the system of paper and patronage has power to produce war or peace, and war is produced. This hungry calculator does not go to war out of chivalry, but from interest. Its propensity is proved in this evidence; its enmity to all majorities in society is a consequence of this propensity; and its aristocratical spirit, of that enmity.
A perpetual increase of taxes, is a constant effect of paper systems. Being essential to their existence, the consequences only are to be considered. Mankind have talked and written for ages about liberty, and yet the world is as far from agreeing in a definition of it, as Europe is from settling a balance of power. It is because liberty is made to consist in metaphysical dogma. As a thing of real substance and use, taxation, unmetaphysical taxation, is able to supply us with a correct idea of it. Heavy taxes in peace are unexceptionably political slavery. Liberty and slavery are contrary principles, and therefore liberty does not produce heavy taxes. Suppose, however, a conjuncture can be conceived, of liberty and heavy taxes in union; yet a free form of government cannot last, if heavy taxes continue until the poverty of the payers, and the wealth of the receivers, have separated the nation into two orders far apart. Heavy taxes are both an effect and a cause of tyranny, and cannot therefore be admitted in a substantial definition of liberty; being an inevitable consequence of paper systems, these also must be substantially inimical to liberty, however consistent they may be with her metaphysical definitions.
Taxation, direct or indirect, produced by a paper system in any form, will rob a nation of property, without giving it liberty; and by creating and enriching a separate interest, will rob it of its liberty, without giving it property. Taxation, for the maintenance of civil government or national defence, will also take away property; but then it may bestow liberty. The slave, who receives subsistence from a master, may advantageously compare situations with the vassal of the first species of taxation; he gets something for his liberty and property; he gets subsistence without care: his compeer loses his liberty and property, and only gains an augmentation of the anxieties of life. To the second species of taxation, mankind are indebted for social liberty. How have these opposite principles been blended and confounded with each other? Merely by the avarice and ambition of orders, separate interests or aristocracy. How cautious and circumspect ought nations to be, when they discover, that the most inimical moral principles are hidden in one term. One species of taxation destroys; the other, preserves their liberty.
Barbarism thirsts for blood; civilization for wealth. To defend men against these propensities is the legitimate end of civil government. A government, administered so as to expose property but protect life in a civilized nation, is equivalent to a government, contrived to protect property but to expose life in a savage one; and the barbarian, whose property was safe, whilst his life was defenceless against the passion of blood-thirstiness, might as justly boast of his freedom, as the civilized man, whose life was safe, whilst his freedom, as the civilized man, whose life was safe, whilst his property was exposed to appease the money-thirstiness of paper and patronage.
If that species of protection to property, afforded by paper systems, operated in an invasion of the principal instead of the profit, it would be universally assailed as a robber. How thin is the veil by which we are deceived! We are content to lose the profit for the sake of the occupation. We forget that the safety of property consists in the enjoyment of its profits; and that the utmost permanent violation of which it is capable, is consistent with occupation and subsistence.
The history of Villeinage illustrates this idea. Villeins were nominally emancipated for the interest of the masters, not of the slaves. With subsistence and the occupation of property as tenants, they were more profitable to the barons than in a state of direct slavery. Paper systems, taking the hint from this history, have artfully placed themselves in the predicament of the feudal lords; and nations, in that of emancipated villeins. The profits are taken, the occupation left, and this is called freedom or protection of property.
These systems, being simply compounded of debt and taxation, must divide a nation into annuitants and labourers, engender want and luxury, reduce each individual to the alternative of oppressing or being oppressed, and cultivate avarice and rapaciousness both by the gain they bestow, and the loss they inflict. Divines and philosophers may possibly have erred in omitting hitherto to recommend such principles, as promoters of virtue, religion and national happiness. Whether politicians have found out, that a power in legislators to enrich themselves by stock of their own creation, will perfect the system of election and representation, is hereafter to be considered.
A nation is never conquered by an army, or enslaved by a faction, so long as it is willing to defend itself. The concentration of wealth in a few hands, obliterates this disposition. The disciplined Romans were subdued by raw barbarians, when the lands of Italy were held by less than three thousand proprietors. The feudal nations were weak, whilst a few nobles held the property of the nation; and their petty wars were rendered less destructive by this national imbecility. The same consequence resulted from the possession of one third of the property of a nation by the priesthood. And stock in England, which covers and transfers property to its amount, is so well convinced that the motive exciting nations to self defence is thereby impaired, as to resort to the alternative of a standing army, and to stake the national existence upon a battle, to be fought by mercenaries. The people and armies of the Roman empire frequently preferred a coalition with Scythian invaders, to the danger of resistance, or the calamity of victory; and twelve millions of people are apprehending or invoking conquest, on account of an unanimous opinion, that paper stock has incapacitated a great nation for defending itself against a single army.
Oppressive taxation is the effect of standing armies, noble orders, hierarchies or paper stock. A similarity in moral effects, demonstrates a similarity in moral causes. All of these have pretended to defend nations at different periods. England possesses all these defenders. The first and the last are the modern champions of nations; if she had possessed neither, she never would have gained sundry victories, but she would have possessed a gallantry which burthensome taxes never inspired. And what conqueror can be more oppressive than two mercenary armies, one of soldiers, and another of stockjobbers? Besides, funding never fights for a nation in imminent danger; its wars are guided by other calculations, than those of publick safety; and the moment of peril is the moment of its flight.
If posterity could pass a law, for imposing heavy taxes on the present generation, the entire universe of existing progenitors would exclaim, ‘if you can rob us of property, we can rob you of life. It is better that you should never exist, than that we who do exist, should be the prey of your avarice; than that a series of generations should be sacrificed to one unborn and unsympathising.’ In the character of sufferers, the parties concur. Progenitors would destroy posterity, and posterity would destroy progenitors, rather than submit to unlimited, unfeeling and unconsented to taxation.
Funding, by growing too rapidly in the Mississippi and South Sea cases, inconsiderately disclosed its real character; it has since distended itself to a degree of magnitude and mischief in England infinitely exceeding those detestable frauds. An ugly cur, suddenly bursting upon a company of children, inspires them with horrour; and they get a young tiger, caress, feed and rear it, without a suspicion of its furious and bloody nature, until it devours them. But it is not the office of truth, in distinguishing between good and evil moral principles, however the deluded may believe that there is no generical affinity between a pug and a mastiff, to represent the same thing as a vice or a virtue according to its dimension; and therefore it seems impossible to transplant funding of any size or age from the place in the moral world assigned to it by its own nature, or to expect good moral effects, from a moral cause, fruitful of evil beyond most of its kindred.
Between the two items of paper stock, the similitude is such, that, though this section is here concluded, the reader will discern in the next, many observations applicable to its doctrine.
[∗]A rich English stockjobber.
[∗]There is only one title in England which goes with the lands; that of Arundel. Did Henry the 7th or Walpole’s paper system, operate most effectually towards this circumstance?