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THE BUGBEAR OF THE BANK DEMOCRATS - William Leggett, Democratick Editorials: Essays in Jacksonian Political Economy 
Democratic Editorials: Essays in Jacksonian Political Economy, Foreword by Lawrence H. White (Indianapolis: Liberty Fund, 1984).
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THE BUGBEAR OF THE BANK DEMOCRATS
July 22, 1837.
The man in the fable who fought his own shadow got nothing but bruised knuckles as a reward for his valour. It will be well if the monopoly democrats, who are fighting the shadow of an exclusive metallick currency, should come off with as little injury. They lay their blows about them lustily, but the impassive nature of their enemy mocks their sturdiest efforts.
as seek to put down the democracy by attacking the bugbear of an exclusive metallick currency. “There is no such thing.” It is an empty phantom conjured up by themselves. The monopoly democrats are the only persons who ever said a word about such a currency. But some of the arguments they use against it are as absurd, as the assertion is false that any party in this country is in favour of an exclusive compulsory circulation of gold and silver money.
In expatiating on the manifold evils of gold and silver, they are fond of drawing highly coloured pictures of the “prodigious ruin and combustion” which a sudden annihilation of the paper credit system would occasion. A farmer or mechanick, they say, has purchased a farm or a workshop under the present system for a given sum of money, half of which perhaps, the earnings of many years of industry and frugality, he has paid, and given a mortgage for the other half. While things are in this posture, they go on to state, you introduce your agrarian notions into legislation, annihilate paper credit, require that gold and silver shall alone circulate as money, and in consequence reduce the prices of all things at least fifty per cent; so that the poor farmer or mechanick has to yield up his farm or shop to satisfy the mortgage upon it, and will be lucky indeed if he be not brought into debt for a large remainder.
Statements of this sort, in which “poor farmers” and “poor mechanicks” are made to figure very conspicuously, are every day put forth by the advocates of the bank monopoly. The champions of exclusive privileges display a wonderful degree of sympathy and commisseration for the labouring poor, whenever the principles of the paper money fraud are attacked. The “publick good” is always put prominently forward as the chief, if not the sole motive of the bank philanthropists, in their applications for charters; and no sentiment but solicitude for the “publick good,” and more particularly for the good of the agricultural and mechanick classes, animates them in the vehement opposition with which they always resist assaults upon the paper system.
There can be no sort of doubt that a sudden fall of prices, however occasioned, is productive of vast injury to multitudes of men. All fluctuations in the currency, sudden or gradual, are productive of extensive and serious evils, moral and political, as well as financial. Nay, all changes of state policy, of every kind and name, no matter how obviously demanded by the principles of publick justice or expediency, are necessarily injurious, to some extent, greater or less, according to the circumstances. A nation cannot enter into war, however strong the provocation, or however important the interests to be defended, without occasioning vast loss and suffering to a portion of its citizens, whose prosperity depended on the preservation of peace. It cannot make peace, after having entered into war, without causing, by that change of policy, however beneficent in its general and aggregate result, great evils to another portion of inhabitants. It cannot vary its mode of taxation, lay a new impost on commerce, or remove an old one, without disadvantageously affecting the interests of some of those whose equal rights it is bound to respect. Nay, further than this, an improved process in art or agriculture is never discovered, nor a labour-saving machine invented, no matter how much the good of the majority may be promoted by it, that it does not occasion more or less evil and hardship to a portion of society. This is the inevitable consequence of all changes which vary the relations of men.
If we spoke the words which we now address to our readers, they would fall upon the ears of but a few hearers, and would be forgotten almost as soon as uttered. But we address them to thousands of attentive minds, through the aid of that potent and beneficent instrument, the press. There is no one of those thousands who does not entertain a deep conviction of the vast benefits which have resulted to mankind from the assistance of that wonder-working engine. By it, all the accumulated truths of science and art, the lore of sages, the discoveries of genius, the precepts of philosophy, the sallies of wit, and the harmonious numbers of poetry, are diffused over the whole earth, and placed within the reach of the humble, as well as the affluent and lordly. Yet the introduction of the press was a grievous evil to a large class of persons; to the cloistered monks and scholars, who devoted their lives to the painful task of transcription, and some of whose illuminated missals yet remain to attest the wonderful patience and skill they exercised in their art. The invention of the German mechanick deprived this large number of sequestered labourers of their accustomed means of obtaining bread, and many of them, doubtless, underwent severe privations, before they learned to apply themselves with success to other modes of occupation. But survey the vast aggregate of benefits to mankind, and see how gloriously a few cases, comparatively, of individual suffering was atoned for by the inestimable augmentation of general good.
But the reader will perceive that the common argument against an exclusive metallick currency, the evils which must arise from a change of systems, would have applied as strongly against the art of printing. The fact that a sudden change from paper credit to an exclusive metallick currency would occasion great hardship in many particular instances, is not a valid argument against the reformation, if even such a scope were contemplated as is alleged. It ought to be shown that the change is not justified by sound principles of publick economy, and would be productive of a preponderance of evil. Any exposition which falls short of this is wholly destitute of weight to turn the scale in favour of the credit system.
And if a change from high prices to low is an evil to those who have money to pay, is not a change from low prices to high equally an evil to those who have money to receive? Yet this change the advocates of the paper money fraud defend. The introduction of paper originally occasioned a rapid inflation of price, and caused many a poor man who had contracted for wages according to the metallick standard, to be paid in a medium which would not procure him half the same quantity of the necessaries of life. This change has been perpetually progressive, ever since the paper money system was invented. Prices have been forever on the advance, except in as far as counteracted by labour-saving machinery and improved methods of agriculture and the arts; and the continual inflation of the currency has occasioned a continual injustice to one party in all money contracts. The exhaustion of this paper currency, and the return to silver and gold, would but have a retributive effect; yet now, for the first time, the injustice of any fluctuation that changes the relations of value is discovered and made the subject of much intemperate declamation.
It would be well, if those who are so eloquent in illustrating by parables and supposititious instances, the evil effects of a sudden fall of prices, would sometimes turn their attention to the effects which flow from the opposite cause. It must be evident that fluctuations are not more injurious from a decline, than from an appreciation, in the nominal values of things. The farmer, who has to pay for his farm at a time when agricultural products will bring but half as much as when he purchased it, suffers from depreciation. But he who has to receive payment at a time when money will purchase but half the commodities it would have purchased when the debt was contracted is equally injured by the general appreciation. If you look into the particular cases to which this latter statement of the proposition will apply, you will find many of extreme hardship and cruelty. The poor mechanick who, relying on the stability of the currency, contracted to perform a piece of work when materials were low, is involved in irremediable embarrassments by that unexpected rise which the managers of the exclusively privileged monopoly paper money system have it always in their power to occasion by a sudden effusion of their notes—by an exercise of what is commonly considered “bank liberality.”
But the defenders of the paper currency have planted their battery on a bed of sand. Their arguments are as destitute of foundation as the system they support, and they are wasting their ammunition in attacking an imaginary foe. No party, no faction, and not a single individual of note, has ever urged nor advised the adoption of an exclusive metallick currency. They war, not against credit, but only against the credit system. They war, not against a paper currency, but only against paper authorized by law, and stamped with an illusory character as money by special and unequal legislation. They war, not against banking, but only against exclusively privileged banks. They ask for no measure by which a sudden change would be made in the relations of value; but a measure which would prevent such sudden and ruinous changes as have marked our history and demoralized our people. They ask, in short, only for freedom; for the complete divorcement of politicks from banking; for the separation of bank and state.
The first inquiry which all intelligent minds should make in regard to the great subject of publick discussion is, what scheme is recommended by abstract truth and justice; for whatever is just and true in theory is not less so in practice. Their next inquiry should be as to the best means of reducing it to practical utility. A large portion of the community have come to the conclusion that the true scheme of government, in the respect in question, is to have no connexion with banking and commercial credit, and to impose no restraints on trade. They have come to the conclusion that the principles of economick and democratick freedom, in regard to currency as in regard to every subject to which they have been applied, will be found to exercise the most beneficent influence, and most effectually promote the general prosperity of mankind. This scheme does not contemplate an exclusive metallick currency. It does not contemplate any measure which need alarm any man not governed by the debasing and aristocratick desire to render the many tributary to the few.