The Online Library of Liberty

A project of Liberty Fund, Inc.

• Foreword
• Part One: the Doctrine of Equal Rights
• True Functions of Government
• The Reserved Rights of the People
• Objects of the Evening Post
• Reply to the Charge of Lunacy
• The Legislation of Congress
• Religious Intolerance
• Direct Taxation
• The Course of the Evening Post
• Chief Justice Marshall
• Prefatory Remarks
• The Sister Doctrines
• The True Theory of Taxation
• Strict Construction
• Legislative Indemnity For Losses From Mobs
• The Despotism of the Majority
• Morals of Legislation
• The Morals of Politics
• Part Two: Separation of Bank and State
• Bank of United States
• Small Note Circulation
• The Monopoly Banking System
• Uncurrent Bank Notes
• Fancy Cities
• Causes of Financial Distress
• Why Is Flour So Dear?
• Thoughts On the Causes of the Present Discontents
• Strictures On the Late Message
• The Value of Money
• The Way to Cheapen Flour
• The Money Market and Nicholas Biddle
• The Pressure—the Cause of It—and the Remedy
• Connexion of State With Banking
• The Crisis
• The Bankrupt Banks
• What We Must Do, and What We Must Not
• “the Foresight of Individual Enterprise”
• The Safety Fund Bubble
• Separation of Bank and State
• The Remedy For Broken Banks
• “blest Paper Credit”
• Questions and Answers
• The True and Natural System
• The Bugbear of the Bank Democrats
• Bank and State
• Theory and Practice
• Separation of Bank and State
• “specie Basis”
• The Natural System
• The Credit System and the Aristocracy
• The Divorce of Politicks and Banking
• Part Three: Abolition Insolence
• Riot At the Chatham-street Chapel
• Governor Mcduffie’s Message
• The Abolitionists
• Reward For Arthur Tappan
• The Anti-slavery Society
• Abolitionists
• Slavery No Evil
• Progress of Fanaticism
• An Argument Against Abolition Refuted
• Commencement of the Administration of Martin Van Buren
• The Question of Slavery Narrowed to a Point
• “abolition Insolence”
• Part Four: the Division of Political Classes
• Despotism of Andrew Jackson
• The Division of Parties
• Rich and Poor
• The Street of the Palaces
• American Nobility
• The Inequality of Human Condition
• A Bad Beginning
• The Whig Embassy to Washington, and Its Result
• Right Views Among the Right Sort of People
• Newspaper Nominations
• Foreign “paupers”
• Part Five: the Principles of Free Trade
• Monopolies: I
• “a Little Free-trade Crazy”
• Asylum For Insane Paupers
• Monopolies: Ii
• Revolutionary Pensioners
• Joint-stock Partnership Law
• The Ferry Monopoly
• Free Trade Post Office
• Stock Gambling
• Weighmaster General
• State Prison Monopoly
• Corporation Property
• Regulation of Coal
• Free Ferries and an Agrarian Law
• Thanksgiving Day
• Municipal Docks
• Associated Effort
• The Coal Question
• The Corporation Question
• Free Trade Weights and Measures
• Associated Effort
• Sale of Publick Lands
• Manacles Instead of Gyves
• The Meaning of Free Trade
• Gambling Laws
• Free Trade Post Office
• Free Trade, Taxes, and Subsidies
• Meek and Gentle With These Butchers
• The Cause of High Prices, and the Rights of Combination
• Omnipotence of the Legislature
• Part Six: Literary Property
• Rights of Authors
• The Rights of Authors
• Right of Property In the Fruits of Intellectual Labour

UNCURRENT BANK NOTES

Evening Post,

March 10, 1835.

Title added by Sedgwick.

We wish some public spirited man who has access to data that would afford a reasonable basis for a conjectural calculation, would furnish us with an estimate of the immense amount of money which is annually lost in this city, by the labouring classes, in the discount upon uncurrent bank notes in circulation. Do the mechanics and the labourers know, that every dollar which is paid in the discounting of uncurrent notes in Wall-street, is filched out of their pockets? That such is the fact is susceptible of the clearest demonstration.

In the first place, the circulation of uncurrent bank notes is chiefly kept up by a direct and infamous fraud upon the working classes. It is a common practise with employers when they pay off their hands on Saturday, to go into Wall-street and purchase of some broker for the purpose, a lot of notes of depreciated value, varying from half to one and a half per cent. below par. These notes they palm off upon their workmen as money. If a master mechanic has a thousand dollars a week to pay to his hands, it is clear that he pockets every week by this operation some ten or fifteen dollars; and it can be shown with equal clearness that those in his employment are defrauded out of this sum. If a man hesitates to take this depreciated paper, he is told that it passes as currently as silver in payment of any thing he may wish to purchase; and so, in truth, it does. Yet he could not exchange it for silver, without paying the broker a discount, and let him not imagine, though he may seem to pass it away to his grocer or his baker at par, that he does not lose this discount all the same. Nay, the mechanic and labouring man whose employers are conscientious enough to pay them their wages in real money, bear their full proportion of the loss on the uncurrent notes in circulation, equally with those to whom the depreciated paper is paid. The entire sum paid for the discount of depreciated bank paper falls on the mechanics and labourers, and is wrung out of their sweat and toil. Nay more: they not only lose the amount which is actually paid for discount to the money changers, but they also pay a per centage on that amount equal to the average rate of profit which merchants charge on their goods. We can make this plain to the dullest apprehension.

The labouring man, when he returns home of a Saturday evening, with his week’s wages in his pocket, in this depreciated paper, stops at his grocer’s, and pays him the amount of his weekly bill. The grocer in the course of a few days pays this money away into the hands of the wholesale merchant from whom he purchases his commodities. The merchant, when a certain amount of this kind of paper has accumulated on his hands, sends it into Wall-street, and sells it to the brokers, and when his clerk returns, an entry is made in his books of the amount paid for discount. The sum total paid in the course of a year for the discount of depreciated paper forms an item of expense which is calculated as one of the elements in the cost of his goods. To pay for his goods he is obliged to buy bills of exchange, or in other words, to remit specie to Europe. Whatever this specie costs him, his goods cost him; and he therefore looks upon the amount he had to pay to turn the uncurrent paper received from his customers into specie as a constituent part of the first cost of his merchandize. Upon the whole sum of the cost, thus ascertained, he puts a certain per centage profit, and fixes his prices accordingly. The retail trader then buying a lot of goods of him, pays him not only a proportional part of the discount which the wholesale merchant actually paid on his uncurrent paper, but a profit thereon. This, however, makes no difference to him, for he has only to put his own profit on above all, and let the loss fall on the labourer, when he comes for his tea and sugar and other little necessaries and comforts for his family. That this is a true, though homely exposition of the case, any body must see who will only give himself the trouble to think about it.

The whole amount of uncurrent notes which pass through the broker’s hands annually may be stated at a given sum, and the discount thereupon amounts, on an average to a given per-centage. This sum, whatever it is, (and it must be immense) is a tax on the business of the community, which each individual shuffles off his own shoulders on those of the persons next beneath him, and so it descends by gradation till it reaches the broad backs and hard hands of the mechanics and labourers, who produce all the wealth and bear all the burdens of society.

But the mechanics and labourers have it in their power to rid themselves of this imposition. The task is very easy: it is only to learn the efficacy of the word COMBINATION. There is a magic in that word, when rightly understood and employed, which will force the scrip nobility to do them justice, and yield them, without drawback and without cheatery, the full fruits of their toil. Let them inquire by what means it is that this immense amount of depreciated paper is kept in circulation. They will find it is chiefly through the instrumentality of master-workmen and others having mechanics and labourers in their employment. They will find that this wretched substitute for money is bought, for the express purpose of palming it off upon them as real value, while their task-masters and the brokers share the spoils between them. A mechanic dare not refuse to take the wretched trash; because, if he does, he will be turned away to starve. But what a single mechanic may not be able to compass alone, could be easily effected by combination. Will the mechanics and labourers wait for eighteen months, in the hope that the juggling law now before the legislature will by that time go into operation, and rid them of the paper money curse? Let them not rest in any such belief. Let them know their own strength and resolve to be imposed on no longer. Why are the producers of all the wealth of society the poorest, most despised and most down-trodden class of men? Because they submit to be the dupes of the scrip nobility—because they are ignorant of their own strength. Let them combine together to demand whatever the plain principles of justice warrant, and we shall see what power there is which can deny them.