Works of Lysander Spooner vol. 4

ARTICLE I.

This Association shall be called the Spooner Copyright Company for Massachusetts.

ARTICLE II.

The Trustees of the Capital of this Association shall be Robert E. Apthorp, and Charles Hale Browne, both of Boston, and Jacob B. Harris, of Abington, all in the State of Massachusetts, the survivors and survivor of them, and their successors appointed as hereinafter prescribed.

ARTICLE III.

The Capital of said Company shall consist of all the rights conveyed to said Trustees, by Lysander Spooner, by a trust deed, of this date, of which the following is a copy, to wit:

ARTICLE IV.

1. The aforesaid capital shall be held in joint stock by the Trustees of said Spooner Copyright Company for Massachusetts, at the nominal value of one million dollars, and divided into two thousand shares, of the nominal value of five hundred dollars each.

2. Said shares shall be numbered consecutively from one to two thousand inclusive.

3. They are all hereby declared to be the property of said Lysander Spooner, and shall be entered as such upon the books of the Trustees.

ARTICLE V.

Whenever any of the before-named shares of Stock shall be conveyed, the particular numbers borne by the shares conveyed shall be specified, both in the instrument of conveyance, (where that shall be reasonably practicable,) and on the books of the Trustees.

ARTICLE VI.

1. Any person, who shall, at any time, be a holder of fifty shares of the Stock of said Copyright Company, may, for the time being, either be a Director, or appoint one in his stead, at his election. And for every additional fifty shares, so owned by him, he may appoint an additional Director. Or he may, by himself or by proxy, give one vote, as Director, for each and every fifty shares of Stock of which he may, at the time, be the owner. Provided that no person, by purchasing Stock, shall have the right to be, or appoint, a Director for the same, so long as there shall be in office a Director previously appointed for the same Stock.

2. Any two or more persons, holders respectively of less than fifty shares, but holding collectively fifty or more shares, may, at any time, unite to appoint one Director for every fifty shares of their Stock. Provided, however, that no persons, purchasing Stock, shall have the right to appoint a Director on account of such Stock, so long as there shall be in office a Director previously appointed for the same Stock.

3. All appointments of Directors shall be made by certificates addressed to, and deposited with, the Trustees, and stating specifically the shares for which the Directors are appointed respectively. And such appointments shall continue until the first day of January Edition: current; Page: [8] next after they are made, unless they shall be, before that time, rescinded (as they may be), by those making them.

4. The Board of Directors may, by ballot, choose their President, who shall hold his office during the pleasure of the Board. Whenever there shall be no President in office, by election, the largest Stockholder who shall be, in person, a member of the Board, shall be the President.

5. The Directors, by a majority vote of their whole number, may fix their regular times of meeting, and the number that shall constitute a quorum for business.

6. The Directors shall exercise a general supervision, and so far as they may see fit, a general control, over the expenditures and all other business affairs of the Company. They may appoint a Treasurer, Attorney, and other clerks and servants of the Company; and take bonds, running to the Trustees, for the faithful performance of their duties.

7. The Directors shall keep a record of all their proceedings; and shall furnish to the Trustees written copies of all orders, rules, and regulations which may be adopted by the Directors, for the guidance of the Trustees.

8. The Directors shall receive no compensation for the performance of their ordinary duties. But they may vote a reasonable compensation to the President. And for any extraordinary services, performed by individual Directors, reasonable compensation may be paid.

ARTICLE VII.

1. With the consent of the Directors, the Trustees may grant to Banking Companies, whose capitals shall consist wholly of mortgages upon lands situated within the State of Massachusetts, and to none others, the right to use the aforesaid “Articles of Association of a Mortgage Stock Banking Company,” and all the other before-mentioned copyrighted papers, (that are included in said Articles of Association,) so far as it may be convenient Edition: current; Page: [9] and proper for such Banking Companies to use said Articles and other copyrighted papers in carrying on the business of said Companies as bankers, and not otherwise.

2. The license granted to said Banking Companies to use said “Articles of Association of a Mortgage Stock Banking Company,” and other copyrighted papers, shall be granted by an instrument in the following form, (names, dates, and numbers being changed to conform to the facts in each case,) to wit:

ARTICLE VIII.

1. Whenever the Trustees of said Spooner Copyright Company for Massachusetts, shall grant to any Banking Company the right to use said “Articles of Association of a Mortgage Stock Banking Company,” and the other copyrighted papers included therein, they (the said Trustees), shall superintend the printing of said “Articles” and other copyrighted papers, (as well those that shall be printed together, as those that shall be printed separately,) and shall see that they are all correct in form, following strictly the copies of the same which are hereto annexed, (changing only dates, numbers, names of persons and places, &c., to make them correspond with the facts in each case,) and shall see that they all have printed in them the name of the particular Banking Company for whose use they are designed, and of no other; and shall also see that they each and all have the proper certificate of copyright printed on said “Articles” and other copyrighted papers, immediately under, and next to, the titles thereof respectively, in the following words and figures, to wit: “Entered according to Act of Congress, in the year 1860, by Lysander Spooner, in the Clerk’s office of the District Court of the United States, for the District of Massachusetts.”

2. And said Trustees of said Spooner Copyright Company for Massachusetts shall retain at least five copies (one for each of themselves, one for the Directors of said Copyright Company, and Edition: current; Page: [13] one for said Lysander Spooner, his heirs, executors, administrators, or assigns, if demanded by him or them), of every set of said “Articles” and other copyrighted papers, the use of which may be granted to any Banking Company, or Banking Companies; said copies to be verified by the certificate and signatures both of said Trustees themselves, and of the Trustees of the Banking Companies to whom the right of using said “Articles,” and other copyrighted papers, shall be granted.

3. And the copies so retained by the Trustees and Directors of the Spooner Copyright Company for Massachusetts, (except those retained for said Spooner, his heirs, executors, administrators, and assigns, which shall be delivered to him or them on demand,) shall be forever preserved for the benefit, and as the property, of said Copyright Company; each Trustee retaining the custody of one copy; and all copies in the possession of any one Trustee being transferred to his immediate successor forever, and receipts taken therefor.

ARTICLE IX.

1. Previous to granting to any Banking Company the right to use said “Articles of Association of a Mortgage Stock Banking Company,” and other copyrighted papers before mentioned, the Trustees of said Spooner Copyright Company for Massachusetts, and also the Directors of said last named Company, or a committee or agent thereof, (if the Directors shall see fit either to investigate the matter for themselves, or to appoint a committee or agent to act for them,) shall carefully and faithfully examine all the mortgages which shall be proposed as the capital of such Banking Company, and all certificates and other evidences that may be offered to prove the sufficiency of the mortgaged property, the validity of the mortgages themselves, and the freedom of the mortgaged premises from all incumbrances of every name and nature whatsoever, unless it be the liens of Mutual Insurance Companies for assessments on account of insurance of the premises.

2. And the right to use said “Articles of Association of a Mortgage Stock Banking Company,” and other copyrighted papers shall not be granted to any Banking Company, unless two at least of the Trustees of the Spooner Copyright Company for Massachusetts (and also the Directors, or a committee or agent thereof, if the Directors, or a committee or agent thereof, shall act on the subject), shall be reasonably satisfied that each and every piece of mortgaged property is worth, at a fair and just valuation, double the amount for which it is mortgaged to the Trustees of the Banking Company, and that it is free of all prior incumbrance of every name and nature whatsoever, (except for insurance as aforesaid,) and that the title of the mortgagor is absolute and perfect.

3. The Trustees of said Spooner Copyright Company for Massachusetts (and also the Directors, or a committee or agent thereof, if they shall see fit to act on the subject), shall require each and every mortgagor to give to the Trustees of the Banking Company a good and ample policy of insurance against fire upon the buildings upon any and all property mortgaged as aforesaid, unless they shall be satisfied that the mortgaged property is worth, independently of the buildings, double the amount of the mortgage.

ARTICLE X.

1. The price or premium demanded or received, by said Spooner Copyright Company for Massachusetts, for the use of said “Articles of Association of a Mortgage Stock Banking Company,” and the other copyrighted papers before mentioned, by any one Banking Company, shall not (except as hereinafter provided), exceed one per centum upon the capital of the Banking Company licensed to use said “Articles” and other copyrighted papers. By this is meant, not one per centum per annum, but one per centum outright; the Banking Company being then free to continue the use of said “Articles” and other copyrighted papers during pleasure.

2. In addition to the one per centum before mentioned, and as a preliminary to either granting or refusing to any proposed Banking Company the right to use said “Articles” and other copyrighted papers, said Copyright Company may, by vote of the Directors, demand and receive a sum not exceeding one tenth of one per centum on the capital of such proposed Banking Company, as compensation for the labor of the Trustees, and Directors, and their committee or agent, in examining the mortgages and other papers of such Banking Company.

3. The Copyright Company aforesaid may also, by vote of the Directors, charge an additional sum, not exceeding one tenth of one per centum on the capital of any Banking Company, as a compensation for the labor of the Trustees of the former Company, (and of the Directors, or any committee, or agent thereof, if they shall act on the matter,) in superintending the printing, stereotyping, or engraving of said “Articles” and other copyrighted papers to be used by such Banking Company.

4. If said Copyright Company shall ever themselves (as they are hereby authorized to do), undertake the business of printing, stereotyping, or engraving the “Articles of Association of a Mortgage Stock Banking Company,” and other before mentioned copyrighted papers, for the use of the Banking Companies that may be licensed to use said “Articles” and other copyrighted papers, said Copyright Company may demand and receive for such printing, stereotyping, and engraving, and for the paper consumed in so doing, and for any stereotype or engraved plates made by them, and sold to said Banking Companies, any sum not exceeding double the necessary and proper amount actually paid, by said Copyright Company, for the labor employed, and materials consumed, in printing, stereotyping, and engraving said “Articles” and other copyrighted papers, and in making such stereotype and engraved plates; but in ascertaining that amount, no account shall be taken of the rent of buildings owned or leased by said Copyright Company, and occupied in said printing, stereotyping, or engraving; nor of the wear or destruction of Edition: current; Page: [16] any of said Copyright Company’s type, printing presses, or other material or machinery employed in the process of such printing, stereotyping, or engraving; nor of the labor of superintending such processes either by the Trustees, Directors, or agents of said Copyright Company (except as is provided for in the third clause of this Article).

5. Except as is provided for and authorized by the preceding clauses of this Article, said Copyright Company shall not, in any case whatever, neither directly nor indirectly, nor by any evasion, nor on any pretence, whatever, make any charge or demand upon any Banking Company, nor any addition to the before mentioned charges or prices, for the right to use said “Articles of Association of a Mortgage Stock Banking Company,” and other copyrighted papers, nor for any printed, stereotyped, or engraved copies of said “Articles,” or other copyrighted papers; nor for any stereotyped or engraved plates of said “Articles,” or other copyrighted papers; nor shall said Copyright Company ever hereafter attempt, in any mode, or by any means, either directly or indirectly, to increase the receipts or profits of said Copyright Company, (beyond the amounts hereinbefore specified,) neither from the licenses granted to Banking Companies to use said “Articles of Association of a Mortgage Stock Banking Company,” and other copyrighted papers; nor by furnishing to Banking Companies printed or engraved copies of said “Articles,” or other copyrighted papers, or stereotyped or engraved plates of said “Articles,” or other copyrighted papers, unless under the following circumstances and conditions, to wit: During the life-time of said Lysander Spooner, and with his formal and written consent, or after his death, without his consent having ever been given, the prices of all kinds before mentioned may be increased at discretion by written and recorded resolutions or orders that shall have been personally signed both by Directors representing in the aggregate not less than three-fourths of the capital stock of said Copyright Company and also by Stockholders owning in the aggregate not less than three-fourths of all Edition: current; Page: [17] the capital stock of said Copyright Company. Provided, however, that, after the death of said Spooner, no such increase of prices or income shall be attempted or adopted, in the manner mentioned, by the votes of Directors and Stockholders, unless a similar increase shall have been first agreed upon to be adopted by similar votes of the Directors and Stockholders of a majority of all similar Copyright Companies that may then be in existence in all the States of the United States.

6. All the before mentioned prices may be reduced at discretion, from the highest amounts named, by votes of the Directors, or of the holders of a majority of the stock.

ARTICLE XI.

With the consent of the Directors, said Spooner Copyright Company for Massachusetts may hold so much real and personal estate as may be needful or convenient for the proper uses and business of said Company, and especially for carrying on the business of printing, stereotyping, and engraving the before mentioned “Articles of Association of a Mortgage Stock Banking Company,” and other copyrighted papers, for the use of Banking Companies, that may be licensed, by said Copyright Company, to use said “Articles” and other copyrighted papers.

ARTICLE XII.

Neither said Spooner Copyright Company for Massachusetts, nor the Trustees, nor Directors, nor any agent or officer of said Company, shall have power to contract any debt that shall be binding upon the private property of any Stockholder, or compel the sale of his stock. But said Company, through the Trustees, and with the consent of the Directors, may, for legitimate and proper objects, pertaining directly to the proper business of said Company, contract debts that shall pledge, and be binding upon, and operate as a lien upon, all the receipts and revenues of Edition: current; Page: [18] the Company, and all the real and personal estate of the Company, other than the copyright property which constitutes the capital stock of the Company.

ARTICLE XIII.

Each one of the Trustees of said Spooner Copyright Company for Massachusetts shall receive, in each year, as compensation for his services as Trustee, five per centum of all the net income of the Company for the year, payable semi-annually, or oftener, at the discretion of the Directors.

ARTICLE XIV.

No dividend shall ever be paid to any Stockholder in said Spooner Copyright Company for Massachusetts, except from net income actually accumulated.

ARTICLE XV.

In granting to Banking Companies the right to use the aforementioned “Articles of Association of a Mortgage Stock Banking Company,” and the other copyrighted papers before mentioned, no change shall ever be made from the copies of said “Articles” and other papers hereto annexed, (except the changes of names, dates, numbers, &c., to correspond to the facts in each case,) during the life time of said Lysander Spooner, unless with his formal consent given in writing, and particularly specifying the changes to which he consents. Nor shall any such changes be made, either before or after the death of said Spooner, unless in accordance with a written and recorded vote resolution, or order, signed by a Stockholder or Stockholders personally, (and not by any agent or attorney,) owning, in the aggregate, at least three-fourths of all the capital stock of said Spooner Copyright Company for Massachusetts. Nor shall any such changes be made, after the death of said Spooner, unless the same changes Edition: current; Page: [19] shall have been first agreed upon, (in the same manner,) to be adopted by a majority of all the similar Copyright Companies that may then be in existence in all the States of the United States.

ARTICLE XVI.

Any Trustee of said Spooner Copyright Company for Massachusetts, may be removed from his office of Trustee, by the vote or votes of any Stockholder or Stockholders owning, at the time, not less than three-fourths of all the stock of the Company. Said vote or votes shall be expressed by two records, one to be kept by the Trustees, the other by the Directors, and both subscribed by the Stockholder or Stockholders personally, (and not by any agent or attorney,) declaring his or their wish or determination that the Trustee be removed. And such records shall, from the moment of their being so subscribed, and the other Trustees or Trustee notified thereof, operate to cancel all his rights and powers as a Trustee, and vacate his place as Trustee, and make it liable to be filled by another. In subscribing such vote, each Stockholder shall affix to his signature the number of shares of which he shall be, at the time, the holder, and also the particular numbers borne by such shares.

ARTICLE XVII.

Whenever a vacancy shall occur in the office of a Trustee, it may be filled by the vote or votes of any Stockholder or Stockholders owning, at the time, not less than three-fourths of all the stock of the Company. Such vote shall be expressed by two records, one to be kept by the Directors, the other by the Trustees, and both subscribed by the Stockholder or Stockholders personally, and not by any agent or attorney, declaring his or their wish and choice that the individual named shall be the Trustee. And such records, on being deposited with the Directors and Trustees respectively, shall entitle the individual so Edition: current; Page: [20] elected to demand that his appropriate interest, as Trustee, in the capital stock of the Company, be at once conveyed to him by the other Trustees, or Trustee. And upon such interest being conveyed to him, he shall be, to all intents and purposes, a Trustee, equally with the other Trustees, or Trustee. And the instrument conveying to him his interest, as Trustee, in the capital stock of the Company, shall be acknowledged and recorded in accordance with the laws of the United States for the conveyances of copyrights, or any interest therein.

ARTICLE XVIII.

The signatures of any two of the Trustees (or of one, if at the time there shall be but one Trustee) to certificates of the Stock of the Company, shall be sufficient in law.

ARTICLE XIX.

If required by the Directors, the Trustees shall give reasonable bonds for the faithful performance of their duties. Said bonds shall run to the Directors, for and on behalf of the Stockholders collectively and individually.

ARTICLE XX.

The Trustees shall have a seal with which to seal certificates of stock, licenses, and any other papers, to which it may be proper to affix their seal.

ARTICLE XXI.

Transfers of the stock of the Company, not made originally in the books of the Company, shall not be valid, against innocent purchasers for value, until recorded on the books of the Company.

ARTICLE XXII.

The Trustees shall keep books fully showing, at all times, their proceedings, and the affairs of the Company. And these books shall, at all reasonable times, be open to the inspection both of the Directors, and of Stockholders.

ARTICLE XXIII.

Every Stockholder shall be entitled, of right, to one copy of the Articles of Association of the Company.

ARTICLE XXIV.

These Articles of Association of the Spooner Copyright Company for Massachusetts, may be altered by the vote or votes of any Stockholder or Stockholders owning, at the time, not less than four fifths of the stock of the Company. Such vote or votes shall be expressed by two records, one to be kept by the Trustees, the other by the Directors, and both subscribed by the Stockholder or Stockholders personally, (and not by any agent or attorney,) declaring in precise terms the alterations to be made. But no alteration shall ever be made, injuriously affecting the previous rights of any Stockholder relatively to any or all other Stockholders. Nor shall any change ever be made affecting the provisions of Articles X and XV. Nor shall any change ever be made in Article XII, without the vote of every Stockholder expressed in the manner aforesaid.

In Witness Whereof, I, the said Lysander Spooner, and we, the sai d Robert E. Apthorp, Charles Hale Browne, and Jacob B. Harris, Trustees as aforesaid, in token of our acceptance of said trust, and of our promise to fulfil the same faithfully and honestly, have set our hands and seals to six copies of these Articles of Association, consisting of twenty-two printed Edition: current; Page: [22] pages, and have also set our names upon each leaf of said Articles, this twentieth day of March, in the year eighteen hundred and sixty-three. We have also, on the same day, set our names upon each leaf of six copies of the “Articles of Association of a Mortgage Stock Banking Company,” hereinbefore mentioned, one copy of which is hereto annexed, consisting of fifty-nine printed pages.

CONSIDERATIONS

FOR

BANKERS,

and

HOLDERS OF UNITED STATES BONDS.

BY LYSANDER SPOONER.

BOSTON:

A. WILLIAMS & CO., 100 WASHINGTON STREET.

NEW-YORK: American News Company, 121 Nassau Street.

1864.

Entered according to Act of Congress, in the year 1864,

By LYSANDER SPOONER

in the Clerk’s office of the District Court of the United States, for the District of Massachusetts.

CONTENTS.

• Chapter I.—Explanation of the Author’s New System of Paper Currency, . . . . . 5
• Chap. II.—The Author’s System Cannot be Prohibited by the States, . . . . . 15
• Chap. III.—The Author’s System Cannot be Taxed, either by the United States, or the States, . 27
• Chap. IV.—The State Governments Cannot Control, nor in any Manner Interfere with, the Author’s System, . . . . . 33
• Chap. V.—Unconstitutionality of the Legal Tender Acts of Congress, . . . . . 37
• Chap. VI.—Unconstitutionality of the United States Banking Act, . . . . . 71
• Chap. VII.—Exchanges under the Author’s System, . 85
• APPENDIX
• The Author’s Copyright, . . . . . . 89

CHAPTER I.: EXPLANATION OF THE AUTHOR’S NEW SYSTEM OF PAPER CURRENCY.

The principle of the system is, that the currency shall represent an invested dollar, instead of a specie dollar.

The currency will, therefore, be redeemable, in the first instance, by an invested dollar, unless the bankers choose to redeem it with specie.

The capital is made up of a given amount of property deposited with trustees.

This capital is never diminished; but is liable to pass into the hands of new holders, in redemption of the currency, if the trustees fail to redeem the currency with specie.

The amount of currency is precisely equal to the nominal amount of capital.

When the currency is returned for redemption, (otherwise than in payment of debts due the bank,) and the trustees are not able, or do not choose, to redeem it with specie, they redeem it by a conditional transfer of a corresponding portion of the capital. And the conditional holder of the capital thus transferred, holds Edition: current; Page: [6] it, and draws interest upon it, until the trustees redeem it, by paying him its nominal value in specie.

Under certain exceptional and extraordinary circumstances, this conditional transfer of a portion of the capital, becomes an absolute transfer; and the conditional holder of the capital transferred, becomes an absolute holder of it—that is, an absolute stockholder in the bank.

In such cases, therefore, the final redemption of the currency consists in making the holders of the currency bona fide stockholders in the bank itself.

To repeat, in part, what has now been said:

The currency, besides being receivable for debts due the bank, is redeemable, first, with specie, if the bankers so choose; or, secondly, by a conditional transfer of a part of the capital.

The capital, thus conditionally transferred, may be itself redeemed, by the bank, on paying its nominal value in specie, with interest from the time of the transfer.

Or, this conditional transfer, of a portion of the capital, may, under certain circumstances, become an absolute transfer.

A holder of currency, therefore, is sure to get for it, either specie on demand; or specie, with interest, from the time of demand; or an amount of the capital stock of the bank, corresponding to the nominal value of his currency.

In judging of the value of the currency, therefore, he judges of the value of the capital; because, in certain contingencies, he is liable to get nothing but the capital for his currency. But if the capital be worth par of specie, or more than par of specie, he infers that his currency will be redeemed, either in specie on demand, or by a temporary transfer of capital; which capital will afterwards be itself redeemed with specie.

All that is necessary to make a bank, under this system, a sound one, is, that its capital shall consist of productive property—its actual value fully equal to, or a little exceeding, its nominal value—and of a kind not perishable, or likely to depreciate in value.

Mortgages, rail-roads, and public stocks will probably be the best capital; and most likely they are the only capital which it will ever be expedient to use.

If further explanation of the nature of the system be needed, at this point, it can be given—more easily, perhaps, than in any other way—by supposing the capital to consist of land—as follows:

Suppose that A is the owner of one hundred, B of two hundred, C of three hundred, and D of four hundred, acres of land; that all these lands are of uniform value, to wit, one hundred dollars per acre; that they will always retain this value; and that they are all under perpetual leases at an annual rent of six dollars per acre.

A, B, C, and D, put all these lands into the hands of trustees, to be held as banking capital; making an aggregate capital of one hundred thousand dollars. Their rights, as lessors, going with the lands into the hands of the trustees—that is, the trustees being authorized to receive the rents, and apply them to the uses of the bank, if they should be needed.

A, B, C, and D, then, are the bankers, doing business through the trustees.

Their dividends, as bankers, it is important to be noticed, will consist both of the rents of the lands, and the profits of the banking; making dividends of twelve per cent. per annum, if the banking profits should be six per cent.

The banking will be done in this way—

The trustees will make certificates for one, two, three, five, ten dollars, and so on, to the aggregate amount of one hundred thousand dollars; corresponding to the whole value of the lands.

These certificates will be issued for circulation as currency, by discounting notes, &c.

Each certificate will be, in law, a lien upon the lands for one dollar, or for the number of dollars expressed in the certificate.

The conditions of this lien will be these—

1. That these certificates shall be a legal tender in payment of all debts due the bank.

2. That when one hundred dollars of these certificates shall be presented for redemption, the trustees, unless they shall redeem them with specie, shall give the holder a conditional title to one acre of land. This conditional title will empower the holder to demand of the trustees rent for that acre, at the rate of six dollars per annum, until they redeem the acre itself, by paying him an hundred dollars in specie for it. And no dividends shall be made by the trustees, to the bankers, (A, B, C, and D,) either from the rents of any of the other lands, or from the profits of banking, until this conditional title to the one acre, given to the holder of currency, shall have been cancelled, by the payment of the hundred dollars in specie, with interest, or rent, for the time the conditional title shall have been in his hands.

3. That when certificates are presented for redemption, in sums less than one hundred dollars, the trustees, unless they redeem them with specie on demand, shall redeem them with specie, (adding interest, except on small sums,) before making any dividends, either of rents, or banking profits, to the bankers (A, B, C, and D).

4. Whenever an acre of land shall have been conditionally transferred in redemption of currency, a corresponding amount of currency (one hundred dollars) must be reserved from circulation, until that acre shall have been redeemed by the bank; to the end that there may never be in circulation a larger amount of currency, than there is of land, in the hands of the bankers, with which to redeem it.

5. So long as any of the lands shall remain the property of the original bankers, (A, B, C, and D,)—free of any conditional title, as before mentioned—the trustees will have the right, as their agents, to cancel all conditional titles, by paying an hundred dollars in specie for each acre, with interest, (or rent,) at the rate of six per cent. per annum, during the time the conditional title shall have been outstanding. And the trustees must do this, before they make any dividends, either of rents, or banking profits, to the bankers themselves.

But if, at any time, the banking shall be so badly managed, as that it shall become necessary for the trustees to give conditional titles to the whole thousand acres, (constituting the entire capital of the bank), the rights of the original bankers (A, B, C, and D) in the lands, shall then be absolutely forfeited into the hands of those holding the conditional titles; who will then become absolute owners of them (as banking capital, in the hands of the same trustees)—in the same manner as A, B, C, and D had been before; and will go on banking with them in the same way as A, B, C, and D had done, and through the agency of the same trustees.

This currency, it will be seen, must necessarily be forever solvent—supposing, as we have done, that the lands retain their original value. It will be absolutely incapable of insolvency; for there can never be a dollar of currency in circulation, without there being a dollar of land, in the hands of the bankers, (or their trustees,) which must be transferred (one acre of land for a hundred dollars of currency) in redemption of it, unless redemption be made in specie. All losses, therefore, fall upon the bankers, (in the loss of their lands,) and not upon the bill holders. If the bankers should fail—that is to say, if they should be compelled to transfer all their lands in redemption of their circulation—the result would simply be, that the lands would pass, unincumbered, into the hands of a new set of holders—to wit, the conditional holders—who would have received them in redemption of the currency—and who would proceed to bank upon them, (reissue the certificates, and redeem them, if necessary, by the transfer of the lands,) in the same way that their predecessors had done. And if they too, should lose all the lands, by the transfer of them in redemption of the currency, the lands would pass, unincumbered, into the hands of still another set of holders, (the second body of conditional holders, who will now become absolute holders,) who would bank upon them, as the others had done before them. And this process would go on indefinitely, as often as one set of bankers should Edition: current; Page: [10] fail (lose all their lands). Whenever one set of bankers should have made such losses as to compel the conditional transfer of all their lands, the conditional transfers would become absolute transfers, and the lands would pass absolutely into the hands of a new set of holders (the conditional holders); and the bank, as a corporation, would be just as solvent as at first. So that, however badly the banking business should be conducted, and however frequently the bankers might fail, (if transferring all their capital (lands), in redemption of their circulation, may be called failing,) the bank itself, as a corporation, could not fail. That is to say, its circulation could never fail of redemption. The lands (the capital) would forever remain intact; forever equivolent to the circulation; and forever subject to a compulsory demand in redemption of the circulation. In this way all losses necessarily fall upon the bankers, (in the loss of their capital, the lands,) and not upon the bill holders, who are sure to get the capital (lands), dollar for dollar, for their currency, if they do not get specie.

From the preceding explanation it will be seen that, if all lands were of an uniform value, and were to retain that value in perpetuity, it would be perfectly easy to use them as banking capital, under the author’s system, and thus create the most abundant and solvent currency that could be desired.

But all lands are not of a uniform value; and, therefore, they cannot be used, acre by acre, as banking capital, under this system. Nevertheless, by means of mortgages, lands may be used as banking capital; since mortgages upon lands can be made to any desirable extent, and all of a uniform value; or at least nearly enough so for all practical purposes. And this value they will retain in perpetuity.

The real estate of this country amounts to some ten thousand millions of dollars. Mortgaged for only half its real value, it would furnish banking capital to the amount of five thousand millions of dollars.

The rail-roads that we now have, and those that we shall have, Edition: current; Page: [11] taken at only half their value, would furnish several hundred millions more of good banking capital.

There will probably also be two thousand millions, or more, of United States Stocks, which, if they should stand permanently at par, or thereabouts, will make good banking capital.

There is, therefore, no more occasion for a scarcity of currency, than for a scarcity of air.

And this currency would all be solvent, stable, and furnished at the lowest rate of interest at which the business of banking could be done.

Under such a system there could never be another crisis; the prices of property would be stable; the rate of interest would always be moderate; industry would be uninterrupted, and much more diversified than it ever hitherto has been; and prosperity would necessarily be universal.

No evils could result from the great amount of currency furnished by this system; for no more would remain in circulation than would be wanted for use. By returning it to the bank for redemption, the holder would either get specie for it, or have it redeemed by the conditional transfer to him of a part of the capital, on which he would draw interest, until the capital so transferred to him, should either be itself redeemed with specie, or made an absolute property in his hands. Currency, therefore, returned for redemption, and not redeemed with specie, is really put on interest, by being redeemed by the conditional transfer of interest-bearing capital. Whenever, therefore, if ever, the prices of property should become so high as not to yield as good an income as money at interest (the interest being paid in specie), the holders of currency would return it to the banks for redemption, beyond the ability of the banks to pay specie. The banks would be compelled to redeem it by the conditional transfer of interest-bearing capital; and thus take it out of circulation.

In short, the currency represents a dollar at interest, instead of a dollar in specie; and whenever it will not buy, in the market, property that is worth as much as money at interest, Edition: current; Page: [12] (the interest payable in specie,) it will be returned to the bank, and put on interest, (by being redeemed in interest-bearing capital,) and thus taken out of circulation. No more currency, therefore, would remain in circulation, than would be wanted for use, the prices of property being measured by the value of an interest-bearing dollar, instead of a specie dollar, if there should be a difference between the two.

Such is, perhaps, as good a view of the general principles of the system, as can be given in the space that can be spared for that purpose. For a more full description, reference must be had to the pamphlet containing the system itself, with the Articles of Association, that will be needed by the banking companies. In the Articles of Association, the system is more fully developed, and the practical details more fully given, than they can be in any general description of the system.*

The recent experience of this country, under a currency redeemable only by being received for taxes, and made convertible at pleasure into interest-bearing bonds (U. S.), is sufficient to demonstrate practically—what is so nearly self-evident in theory as scarcely to need any practical demonstration—that under a system like the author’s, where the currency (when not redeemed in specie on demand) is convertible at pleasure into solvent interest-bearing stocks, there could never be a redundant currency in actual circulation, nor any undue inflation in the prices of property. That experience proves that currency issued, and not needed for actual commerce, at legitimate prices, will be converted into the interest-bearing stocks which it represents, and thus taken out of circulation, rather than used to inflate prices beyond their legitimate standard.†

This experience of the United States, with a currency convertible into interest-bearing bonds, ought, therefore, to extinguish forever all the hard money theories as to the indefinite inflation of prices by any possible amount of solvent paper currency. It ought also to extinguish forever all pretence that a paper currency should always be redeemable in specie on demand; a pretence that is merely a branch of the hard money theory. This experience ought to be taken as proving that other values than those existing in gold and silver coins—values, for example, existing in lands, rail-roads, and public stocks—can be represented by a paper currency, that shall be adequate to all the ordinary necessities of domestic commerce; and consequently that we can have, at all times, as much paper currency as our domestic industry and commerce can possibly call for; and that the frequent revulsions we have hitherto had—owing to our dependence upon a currency legally payable in specie on demand, and therefore liable to contraction whenever specie leaves the country—are wholly unnecessary. This experience ought, therefore, to serve as a practical condemnation of all restraints upon the most unlimited paper currency, provided only that such currency be solvent, and actually redeemable, at the pleasure of the holder, in the property which it purports to represent.

Substantially the same things are proved by the experience of England. The immense amount of surplus money in that country is not used to inflate prices at home; but seeks investment abroad. It is sent all over the world, either in loans to Edition: current; Page: [14] governments, or as investments in private enterprises, rather than used to inflate prices at home beyond their true standard.

The experiences of the two countries, therefore, demonstrate that there is no such thing possible as an undue inflation of prices, by a solvent paper currency — that is, a currency always redeemable in the specific property it purports to represent. And such a currency is that which would be furnished by the author’s system; for the property represented by it is always deliverable, dollar for dollar, in redemption of the currency itself.

CHAPTER II.: THE AUTHOR’S SYSTEM CANNOT BE PROHIBITED BY THE STATES.

The author holds his system by a copyright on the Articles of Association, that will be needed by the banking companies. His system, therefore, stands on the same principle with patents and copyrights. And the use of it can no more be prohibited by the State governments, than can the use of a patented machine, or the publication of a copyrighted book.

The Constitution of the United States expressly gives to Congress “power to promote the progress of science and useful arts, by securing, for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries.” And the laws passed by Congress, in pursuance of this power, are “the supreme law of the land, * * * any thing in the laws of any State to the contrary notwithstanding.”

If the State governments could prohibit the use of an invention, or the publication of a book, which the United States patent or copyright laws have secured to an inventor or author, the whole “power of Congress to promote the progress of science and useful arts,” by patent and copyright laws, could be defeated by the States.

Some persons may imagine that, whatever may be the right secured to inventors, by patents, the right secured to authors, by copyrights, is only a right to publish their ideas; leaving the State governments still free to prohibit the practical use of the ideas themselves. But this is a mistake. Of what avail would be the publication of ideas, if they could not be used? How utterly ridiculous and futile would be the idea of securing to the people a mere knowledge of “science and useful arts,” with no Edition: current; Page: [16] right, on their part, to apply them to the purposes of life. How could Congress “promote the progress of science and useful arts,” if the people were forbidden to practise them? The right secured, therefore, is not a mere right of publication, but also a right of use.

The objects of patents and copyrights are identical, viz.: to secure to inventors and authors, and through them to the people — against all adverse legislation by the States — the practical enjoyment and use of the ideas patented and copyrighted.

Copyrights, it must be observed, are not granted, as some may suppose, for mere words — for the words of all books were the common property of mankind before the books were copyrighted; and they remain common property afterwards. The copyright, therefore, is for the ideas, and only for the ideas, which the words are used to convey, or describe.

In copyrights, therefore, equally as in patents, the right secured is the right to ideas; that is, to those ideas that are original with the authors of the books copyrighted. And the right thus secured to ideas, is the right, on the part of the author, not only to reduce those ideas to practical use himself, but also to sell them to others for practical use.

If the right, secured to authors by copyrights, were simply a right to publish their ideas, but not to use them, nor sell them to others to be used, the most important knowledge, conveyed by books, might remain practically forbidden treasures, if the State governments should choose to forbid their use.

These conclusions are natural and obvious enough; but as the point is one of great importance, it may be excusable to enforce it still further.

The ground here taken, then, is, that a State government has no more constitutional power to prohibit the practical use of any knowledge conveyed by a copyrighted book, than it has to prohibit the publication or sale of the book itself.

The sole object of the copyright laws are to encourage the production of ideas for the enjoyment and use of the people; to Edition: current; Page: [17] secure to the people the right to enjoy and use those ideas; and to secure to authors compensation for their ideas. All these objects would be defeated, if the States could interfere to prevent the use of the ideas thus produced; because if the ideas could not be used, there would be no sale for the books; and consequently authors would get no pay for writing them; and would have no sufficient motive to write or print them.

It is an axiom in law, that where the means are secured, the end is secured; that the means are secured solely for the sake of the end. It would be as great an absurdity in law, as in business, to secure the means, and not the end; to plant the seed, and abandon the crop; to incur the expense, and neglect the profits. What an absurdity, for example, would it be for the law to secure a man in the possession of his farm, but not in his right to cultivate it, and enjoy the fruits. What an absurdity would it be for the law to secure men in the possession of steam engines, but not in the right to use them. But these would be no greater absurdities than it would be for the law to secure to the people a knowledge of “science and useful arts,” but not the right to use them.

The sole object of the law in securing to all men the possession of their property of all kinds, is simply that they may use it, and have the benefit of it. And the sole object of the laws, that secure to the people knowledge — which is but a species of property, and a most valuable kind of property — is that they may use it, and promote their happiness and welfare by using it.

An illustration of the principle, that where the means are secured, the end is secured, is seen in the constitutional provision that “the right of the people to keep and bear arms shall not be infringed.” This provision does not secure to the people a mere naked “right to keep and bear arms” — for that right would be of no practical value to them. But it secures the right also to use them in any and every way that is naturally and intrinsically just and lawful; for that is the only end the people can have in view in “keeping and bearing arms.”

On the same principle, too, if the Constitution had declared that “the right of the people to buy and keep food should not be infringed,” it would thus have guaranteed to them, not merely “the right to buy and keep food,” but also the right to eat the food thus bought and kept; because the eating would be the only end that could be had in view in buying and keeping food.

Another illustration of the same principle is found in the constitutional provision that “Congress shall have power to coin money, and fix the standard of weights and measures.” Have the States any power to forbid the people to buy and sell the money coined by the United States? Or to forbid the people to use the standard weights and measures fixed by the United States? Certainly not. Although the Constitution does not say it in express words, it does say, by necessary implication, that the money, coined by the United States, may be freely bought and sold by the people (because that is one of the ends for which the money is coined); and that the standard weights and measures, fixed by the United States, may be freely used by the people (for that is one of the ends for which the standard of weights and measures was fixed); and that the States can neither forbid the use of the weights and measures, nor the buying or selling of the coin.

The sole object of books is to convey knowledge. If the knowledge cannot be used, of what use are the books themselves?

If a State government can prohibit the use of the knowledge conveyed in a copyrighted book, it might just as well prohibit the buying or reading of the book. The object of the book would be no more defeated in one case than in the other.

This power of “promoting the progress of science and useful arts,” by means of patent and copyright laws, was given to Congress principally, if not solely, because it was feared that the State governments might, in some cases, be unfavorable to that end. But if the States can now prohibit the use of the knowledge conveyed by books, they have that very power of obstructing Edition: current; Page: [19] “the progress of science and useful arts,” which the Constitution intended to take from them.

Furthermore, it is the theory of the courts that the nation purchases the ideas of authors and inventors; that it purchases them solely for the use of the people; and that it pays authors and inventors for their ideas, by giving them certain exclusive rights over them for a term of years.* By this theory, the ideas themselves are supposed to become the property of the nation, from the times when the patents or copyrights are granted; or from the times when the ideas are put upon the government records, in the patent office, or elsewhere. Now, suppose the United States government had been authorized, by the Constitution, to purchase the same ideas, and pay the money for them, instead of paying for them by giving the authors and inventors certain monoplies in the use of them. Could a State, in that case, have prohibited the practical use of the ideas, which the government had thus bought, and paid the nation’s money for, solely for the use of the people? Clearly not. Suppose the United States government had been authorized (by the Constitution) to buy, and pay the money for, Morse’s invention of the telegraph, for the use of the people. Could a State have prohibited Edition: current; Page: [20] the use of the invention, which the nation had thus bought for the use of the people, and paid the people’s money for? Certainly not.

Suppose the United States government (being authorized by the Constitution), had bought books on agriculture, for the use of the people, and paid the nation’s money for them—(instead of paying for them by copyrights, as it does now)—books on the chemical nature and treatment of soils, books on the various plants which the people wish to cultivate, and the various animals which the people wish to rear. Could a State have forbidden the people to read those books? Or to practically apply the knowledge conveyed by them? Clearly not. The idea would be preposterous. The principle that the United States Constitution, in securing to the people those means of agricultural progress, had, by necessary implication, secured to them the right to use those means against all interference by the States, would have been a complete answer to any such pretence on the part of the States.

We might as well say that a State has a right to forbid the people to use the post office, which the United States government has provided for their benefit, as to say that a State has a right to forbid the people to use any “science or useful art,” which the United States government has bought for their benefit.

Any other principle than this would authorize the States to prohibit the practical use of all ideas patented and copyrighted by the United States; and thus utterly defeat the power given to Congress “to promote the progress of science and useful arts,” by means of patents and copyright laws.

It is to be borne in mind that the people of a single State are not the only ones interested in the practical use of patented and copyrighted ideas within that State.

If, for example, the cotton growing States were to prohibit the use of Whitney’s patented cotton gin within those States, the people of all the other States, that manufacture or wear cotton goods, would be made the poorer by the act. If Louisiana were Edition: current; Page: [21] to prohibit the use of Fulton’s patented steamboat within her limits, a great blow would be struck at the commerce and industry of the whole Mississippi valley. If Ohio, Indiana, Illinois, Iowa, and Wisconsin, were to prohibit the use of McCormick’s patented reaper within those States, the price of grain would be affected throughout the whole country. If Massachusetts were to prohibit the use of patented sewing machines, the prices of boots, shoes, and all other clothing, manufactured within the State, for the people of other States, would be enhanced. If New York were to prohibit the use of Hoe’s patented printing press within that State, all the commercial intelligence that radiates from the city of New York, would be delayed, and made more expensive; and the commerce of the whole country would be injured. For these reasons no State can be permitted to prohibit, within her limits, the use of any of the “sciences and useful arts,” which may be patented or copyrighted by the United States.

The same reasons apply to currency. If New York, for example, were to prohibit all but a metallic currency within her limits, the commerce of the whole country, so far as it is carried on within the city or State of New York, would be disturbed, obstructed, and injured. The industry of the whole country would be discouraged to a corresponding degree; and the whole country would be made the poorer. On the other hand, if the best systems of credit and currency, that can be invented, are allowed free course in the city and State of New York, that city and State can do very much, by the use of such credit and currency, to facilitate the commerce, and consequently to develop the industry, of every State in the Union. Even, therefore, if it were admitted that the State of New York might deprive her own citizens of useful inventions in currency and credit, it cannot be permitted to her to dictate in regard to the currency and credit used in the commerce of the whole country within her limits. She is not an independent nation in regard to commerce; and consequently not in regard to credit or currency.

The principle of the United States Constitution, in regard to ideas patented and copyrighted, or in regard to “the progress of science and useful arts,” is, that authors, inventors, and people, shall have the free right to experiment with, and practically test, all ideas for themselves, without asking permission of the several State legislatures. It presumes that they (authors, inventors, and people) are competent to determine, after experiment, what inventions are practically valuable to them, and what worthless.

How preposterous would be the principle—as a political or economical one—that all the ideas, which authors and inventors may originate, in “science and useful arts,” must be submitted to, and approved by, the several State legislatures, (who are utterly incompetent to judge of either their truth or utility,) before the authors and inventors can be permitted to demonstrate their truth or utility to the people, or the people be permitted to adopt them. Such a principle would be manifestly absurd, ridiculous, destructive of men’s natural rights, and destructive of all “progress in science and useful arts.” It would be a tyranny that no people on earth could endure. On such a principle, not even an almanac could be published, or a new rat trap used, within any State, until the legislature of the State should have solemnly sat upon it, and given it the sanction of their profound wisdom, or profound ignorance. If any thing of this nature were to be tolerated in this country, it would plainly be most proper and expedient that Congress, as the legislature for the whole country, should take the matter in hand, and decide, for the whole country, upon the truth and utility of all new ideas offered for public adoption; instead of referring them to the several State legislatures. But Congress knows that they are utterly incompetent to any such task; and, therefore, they leave the whole matter—as the Constitution intended they should—to be determined by the authors, inventors, and people interested. And if this is the principle of the Constitution in regard to all other ideas in “science and useful arts,” it is equally the principle of the Constitution in regard to currency (other than legal Edition: current; Page: [23] tender) and credit; for the Constitution makes no discrimination between inventions and ideas on these latter subjects, and those in relation to other matters (as we shall more fully see in subsequent chapters). The Constitution knows but one law for all new ideas in “science and useful arts.” And that law is that authors and inventors may come freely face to face with the people, and test all ideas to their mutual satisfaction; leaving the people free to adopt or reject at their own discretion.

If there be any one of the “useful arts,” to which the foregoing principles ought to be applied, banking is preëminently that one. (By banking is here meant the art of representing by paper—for loans and currency—other values than those existing in coin.) Banking is the art of arts. It is the art upon which nearly all other arts depend mainly for their efficiency; as experience has demonstrated continually for the last hundred years. Directly or indirectly it furnishes both the tools and materials for nearly every trade. Directly or indirectly it creates the demand for, and furnishes the supply of, every marketable commodity. For the want of such adequate credit and currency as banking is capable of supplying, all other arts, especially the mechanic arts, are at all times greatly crippled, and at frequent intervals paralyzed; the natural and normal demand for manufactured commodities suspended, and their prices struck down; the rich made poor, and the poor driven into idleness and destitution. The industry of almost any people—even of those among whom the mechanic arts have already made the greatest progress—would probably be doubled in value by such a diversity of production, such an increase of machinery, such uninterrupted activity, and such stability in prices, as an adequate system of banking would introduce. And the wealth thus produced would be far more equally and equitably distributed than wealth is now.

The imperfection or inadequacy of all former systems of banking is a thing on all hands confessed. There is no art, in which there is greater need of invention. Consequently there is none, in which invention is better entitled to all the protection which Edition: current; Page: [24] the constitutional power of Congress “to promote the progress of science and useful arts” can give.

For the reasons that have now been given, the right to use practically the author’s system of banking, is absolutely secured to him and his assigns, by the United States copyright; and, as has already been said, can no more be prohibited by the State governments, than can the use of a patented machine, or the publication of a copyrighted book.

By what has been said, it is not meant that the patent or copyright laws of Congress are designed, or can be used, to shield a person in the commission of any acts that are fraudulent, or intrinsically criminal; but only that they are a protection for the free use of all ideas, that are patented and copyrighted by the United States, and that are, naturally and intrinsically, innocent and lawful.

That the author’s system of banking is, naturally and intrinsically, innocent and lawful—as clearly so as any other system of banking that was ever invented—no one will dispute. The honest use of the system, therefore, cannot be prohibited by the States. But any frauds or crimes, committed under color of using the system, may be punished like any other frauds or crimes.

The same principles, of course, apply to any and every other system of banking, which is, naturally and intrinsically, innocent and lawful, and which men may invent, and choose to experiment with, and put in practice. Men have the same natural and constitutional rights to invent, experiment with, and get patented or copyrighted, and put in practice, new systems of banking, as they have to invent, experiment with, get patented, and put in operation, new churns and washing machines. And the only restraints, that can constitutionally be imposed upon them, by the State governments, are, that the natural “obligation of their contracts” must be enforced, and they must commit no frauds nor crimes.*

CHAPTER III.: THE AUTHOR’S SYSTEM CANNOT BE TAXED, EITHER BY THE UNITED STATES, OR THE STATES.

Neither the United States, nor the States, can tax the author’s system of banking, consistently with the theory which the courts hold in regard to patents and copyrights.

That theory is, that a patent or copyright, guaranteeing to an inventor or author, and his heirs and assigns, the free and exclusive right to use his invention, or publish his book, for a term of years, is the price which the United States government, as agent for the whole people, pays an inventor or author for his invention or book, for the benefit of the public.*

The courts hold that the reasons for granting patents and copyrights are these, namely, that an inventor has in his mind an invention, or an author has in his mind a book, which, it is supposed, may be of value to the public; but that neither the inventor nor the author has any sufficient inducement to make his Edition: current; Page: [28] invention or book known, unless he can derive some pecuniary advantage from it. The United States, therefore, says to the inventor: If you will secure your invention to the use of the public, by putting upon the government records such a description of it, and of the manner of using it, as that the public will be able, from your description, to make and use your machine, in defiance of you, (after your patent shall have expired,) the government will, as a compensation for your so doing, secure to you, and your heirs and assigns, the free and exclusive use of the invention for a given number of years. When, therefore, the inventor has put upon the government records such a description of his invention, and of the manner of using it, as the government stipulates for, the bargain is complete, and the faith of the government is pledged, that he shall have the free and exclusive use of his invention for the term of years agreed on.

The United States says also to the author: If you will secure to the public the right to your book, by depositing a copy with the government, so that it may be republished in defiance of you, (after your copyright term shall have expired,) the government will secure to you, and your heirs and assigns, the free and exclusive right to publish and sell it for a term of years. When, therefore, the author has deposited with the government a copy of his book, in pursuance of this stipulation on the part of the United States, the contract is complete, and the faith of the government is pledged, that he shall have the free and exclusive right to publish his book for the term of years agreed on.

The amount of these transactions—according to the theory of the courts—is, that the government buys an author’s or inventor’s ideas, and contracts to give him, as compensation for them, a certain exclusive use of them for a term of years.

The courts hold that the general government, on behalf of the whole country, makes this contract with authors and inventors; being specially authorized to do so by the Constitution of the United States.

On this theory, the government cannot consistently tax, either Edition: current; Page: [29] the ideas themselves, or the use of them. It cannot consistently tax the ideas themselves, as property, for they are supposed to be the property of the United States; and for the government to tax them, as property, would be taxing its own property; and would be as absurd as it would be to tax the National Capitol, or any other property of the government. It cannot consistently tax the author or inventor for his exclusive use of the ideas; for that exclusive use is the price which the government agrees to pay him for his ideas; and is, therefore, a debt, which it owes him. It, therefore, can no more consistently tax him for receiving this pay for his ideas, than it can tax any body else for receiving his pay for services rendered, or property sold, or money lent, to the government.

This price, be it observed, which the United States government agrees to pay, is not paid in full, until the patent or copyright term has expired; because the price itself consists in the exclusive use, or in the government protection to the exclusive use, of the invention or book, for that term. If, now, the government can tax this price, before it is fully paid, it really taxes a debt which it owes. And for the government to tax a debt, which it owes, is really keeping back a part of the debt.

In other words, if, before the inventor or author shall have had the free and exclusive use of his invention or book secured to him for the full term stipulated for, the general government can tax this free and exclusive use, which, for a valuable consideration paid to the United States, by the author or inventor, has been guaranteed to him, it can wholly or partially invalidate the contract made with him. Such a tax is virtually withholding, or keeping back, or taking back, a part of the price, which the United States, on behalf of the whole country, had agreed to pay him. If the use of the invention or book can be taxed to the amount of one per cent., ten per cent., fifty per cent., or one hundred per cent., of its value, by the very government that promised to secure the use to him, then one per cent., ten per cent., fifty per cent., or one hundred per cent., of the price, Edition: current; Page: [30] agreed to be paid to him, is taken back, or virtually withheld from him, by the very party that promised to pay it to him.

Such a tax, according to the theory of the courts, would be a tax upon a debt, which the United States owes the author or inventor. And a right, on the part of the United States, to impose such a tax, would be as absurd, and as inconsistent with the obligation of a debt, as would be the right of any other debtor, to tax his creditor for the debt due by the former to the latter. If all debtors could tax their creditors at pleasure for the debts due by the former to the latter, the payment of debts would be a very easy matter. And if the United States can tax, at pleasure, all the debts they owe, the public debt may legally, and consistently with the public faith, be very easily paid.

When the United States government voluntarily becomes a debtor, by purchasing something valuable, and agreeing to pay for it at a future time, it voluntarily puts itself in the position of any and all other debtors. That is, it agrees to pay the amount in full; and not merely to pay all except what it may choose to withhold, or take back, under the name of taxation. A promise of this latter kind would amount to no promise at all.

Suppose the United States government (as agent for the whole country) were to purchase, of an individual, supplies for the United States army; and were to give him a contract to pay him in six months. And suppose that, before paying this debt, the government should tax it, to the amount of one hundred per cent., in the hands of this creditor of the United States. How much would this creditor have coming to him when the contract should be due? Or how much would he realize for the supplies he had furnished, and taken the government’s contract for? Nothing. Yet a tax of one per cent. would be just as absurd in principle, and just as inconsistent with the obligation of a debt, as would be a tax of one hundred per cent. Such taxation would clearly be withholding a part of the debt, which the government owed him, and had agreed to pay him, for value received. The government might just as well have seized the supplies, without pretending to Edition: current; Page: [31] make any compensation at all, as to pretend to buy them, promise to pay for them, and then tax that debt or promise before it is fulfilled. It is for this reason, that the general government cannot, without a breach of faith, tax any portion of the debt it is now contracting. Such a tax would really be a mode of withholding payment of money it had agreed to pay. And for the same reason the general government cannot, consistently with the theory of the courts in regard to patents and copyrights, tax them, or the use of them. Such taxation, according to the theory of the courts, would be withholding a part of the price, which the general government, on behalf of the whole country, had agreed to pay for books and inventions.

And what the general government cannot, consistently with the public faith, do, in the way of taxing patents and copyrights, the States, counties, cities, and towns cannot consistently do; because any contract, made by the general government, is made for and on behalf of the whole country; and States, counties, cities, and towns are as much bound by it, as is the general government itself.

If States, counties, cities, and towns could tax patents and copyrights, they could wholly or partially, (according to the extent of the tax,) defeat the value of the contracts, which the United States, on behalf of the whole country, makes with authors and inventors.

The subscriber is not aware that inventions and copyrights, or the use of inventions or copyrights, have ever been taxed, either in this country, or in any other, until the recent tax upon telegraphic messages. And this tax, according to the theory of the courts, ought clearly to be held illegal, or at least inconsistent with the public faith.

The country has too great an interest in “the progress of science and useful arts,” to tolerate Congress, or the State governments, in breaking faith with authors and inventors, by robbing them, either directly or indirectly, of the free and exclusive right to “their writings and discoveries” for the term of years Edition: current; Page: [32] that was stipulated for, when, relying upon the public faith, they sold their ideas to the government, (as they virtually did when they put their books and inventions beyond their own control, by putting them upon the government records.)*

For the reasons now given, the subscriber assumes that the use of his system of banking will never be taxed, either by the United States, or the States.

This freedom from taxation is perfectly just, for still another reason, namely, that the land, which constitutes the banking capital under the author’s system, is liable to be taxed, as land, at its true value, equally with all other land. The fact that it is used as banking capital, is no reason for taxing it beyond its true value, when all other land is equally free to be used as banking capital, if the owners shall so choose.

This exemption from taxation is likely to be an important matter for many years, if not forever; and is sufficient, of itself, to challenge the consideration of bankers.

CHAPTER IV.: THE STATE GOVERNMENTS CANNOT CONTROL, OR IN ANY MANNER INTERFERE WITH, THE AUTHOR’S SYSTEM.

The same reasons that have been already given against the right of the State governments to prohibit, or tax, the use of the author’s system of banking, are equally weighty against all power, on the part of the States, to assume to control, or in any manner interfere with, the operation of the banks, either by restricting the rates of interest or exchange, or subjecting the banks to the oversight of Commissioners, or requiring them to keep on hand given amounts of specie, or to publish statements, or make returns, of their condition or proceedings.

A State, for example, would have no more power to fix the rates of interest or exchange, taken by these banks, than to fix the price paid for the use of a patented machine, or for the publication of a copyrighted book. Nor would it have any more power to subject the banks to the oversight of Commissioners appointed by the State, than it would to subject the use of all patented machines, and the publication of all copyrighted books, to the supervision of Commissioners appointed by the State. It would have no more right to require the banks to make returns, or publish statements, of their condition and proceedings, than it would to require the same things of all persons using patented machines, or publishing copyrighted books.

If the State governments can, in any way, obstruct or embarrass authors and inventors in the use of their copyrights and inventions, they can impair or destroy the value of the copyrights or patents granted by the United States; and so far defeat the Constitution of the United States, and the powers of Congress on this subject.

The Supreme Court of the United States has explicitly indorsed these principles, by declaring that the use of “patent rights” can neither be taxed, retarded, impeded, burdened, nor in any manner controlled, by the State governments. And the same principle obviously applies to copyrights, because these are intrinsically of the same nature with patent rights, and because also the rights of authors and inventors are placed upon the same grounds by the Constitution.

This declaration of the Supreme Court was made in the case of McCulloch vs. Maryland, 4 Wheaton’s Reports. It was made incidently, but nevertheless explicitly, and as illustrating a principle which the court declared to be vital to the existence and operation of the general government.

The immediate question, before the court, was, whether the State of Maryland had a right to tax the Maryland branch of the United States Bank?

The court first determined that the United States had a constitutional right to create a bank to be employed as an agent of the United States in keeping and disbursing the public monies.

The court next declared “that the power to tax involves the power to destroy;” and that to allow the States to tax, or exercise any authority whatever over, any of the agencies employed by the United States in executing its constitutional powers, was incompatible with the supremacy of the United States, and was equivalent to subjecting the United States government to absolute destruction, whenever the State governments should please to destroy it.

And in this connexion, the court spoke of the United States mails, of the mint, of patent rights, of the papers of the Custom House, and of judicial process of the United States, as illustrations of the various means used by the United States, and which could not be taxed, nor in any manner interfered with, by the States.

Thus the court say,

Also the court say,

This was an unanimous opinion of the court—expressly declared by them to be such. And, as we have already seen, they expressly applied the principle to “patent rights.” And if the principle is applicable to patent rights, it is equally applicable to copyrights; because they are both of the same nature, and stand on the same grounds in the Constitution.*

We have, then, in effect, an explicit declaration of the Supreme Edition: current; Page: [36] Court of the United States, “that the States have no power, by taxation, or otherwise, to retard, impede, burden, or in any manner control,” the use of patents and copyrights, granted by the United States.

If the bankers should commit any frauds, or any acts that were intrinsically criminal, they could be punished, as for any other frauds or crimes; because patents and copyrights do not authorize the commission of crimes. Or if they should not fulfil their contracts, they could be compelled to fulfil them. But so long as they should fulfil their contracts, and be charged with no acts intrinsically criminal, a State government could no more interfere with them as banks, than it could interfere with anybody else for using a patented machine, or publishing a copyrighted book. And thus the business of banking (including the rates of interest and exchange) would be entirely relieved from all that arbitrary and tyrannical State legislation, which has hitherto been so annoying, vexatious, and injurious both to bankers and to the public.

If there is any business whatever, that ought to be free from all arbitrary restraints and interference, it is banking; for the reason that, in this country, the credit and currency furnished by the banks, are the direct mainsprings of nearly all our industry and commerce. All arbitrary restrictions upon banking, are, therefore, nothing else than arbitrary restrictions upon industry and commerce; and are as absurd, injurious, and tyrannical as would be arbitrary restrictions upon the use of steam engines, water wheels, locomotives, or any other machinery or instrumentalities by which our industry and commerce are carried on.

If banking is an intrinsically criminal business, it should be prohibited altogether. If it is an innocent and useful one, it should be free from all arbitrary restrictions and interference, like any other honest business. Free competition, and freedom from all arbitrary interference, in banking, will furnish the best currency and credit, and at the cheapest rates, just as free competition, and freedom from all arbitrary interference, in all other business, furnish the best commodities, and at the lowest prices.

CHAPTER V.: UNCONSTITUTIONALITY OF THE LEGAL TENDER ACTS OF CONGRESS.

The general government is attempting, by its legal tender acts, and its bank act, to force into circulation its own currency, and the currency of banks authorized by itself; and to force out of circulation all other currency; or to bring it down to a level with its own. This makes it necessary to consider the constitutionality of the legal tender acts of Congress.

Those, who imagine that the legal tender acts of Congress are constitutional, seem to imagine that Congress have power to fix, and do fix, the legal tender in payment of debts in all cases whatsoever; that they have power not only to prescribe what shall be the legal tender in payment of all debts, but also to say how much of any thing whatever (which they may choose to call a legal tender) shall be sufficient to satisfy any debt whatsoever; that, in short, Congress have power to declare arbitrarily what, and how much, all contracts, between man and man, shall amount to; and at their pleasure or discretion, to make them more, less, or other than the parties have made them.

Thus they hold, in effect, that men have no power, of themselves, to make obligatory contracts; and that men’s contracts with each other have, of themselves, no validity at all, which the laws are bound to recognize and maintain; but that it rests with Congress, in their discretion, or at their will, to alter men’s contracts, and make them valid for more, less, or other than the parties have agreed on.

All these enormous conclusions legitimately and necessarily Edition: current; Page: [38] follow from the idea that the late legal tender acts of Congress are constitutional.

But, in truth, Congress have no powers whatever of this kind. Parties make their own contracts; and Congress have no power whatever to make them more, less, or other than the parties have made them. Congress have no power to say how much of any thing—gold and silver coin, or any thing else—shall be sufficient to satisfy any contract whatever between man and man.*

Parties make their own contracts. Of course they, and they alone, fix the tender. That is, they agree what, and how much, is to be paid. Otherwise there would, in law, be no contract. A contract to pay no particular thing, and no particular quantity of any thing, would, in law, be no contract at all. To make a contract, then, is necessarily to fix the tender. Parties cannot make valid binding contracts otherwise than by themselves fixing the legal tender, both in kind and amount.†

What the debtor agrees to pay, and the creditor to receive, is the legal tender, and the only legal tender, both in kind and amount, in payment of that debt. And Congress have no authority Edition: current; Page: [39] in the matter, to alter the legal tender, or make the contract more, less, or other than the parties themselves have made it. If it were not so, men would be deprived of all power of making their own contracts.

Thus, where a contract is to pay one hundred bushels of wheat, one hundred bushels of wheat constitute the legal tender, and the only legal tender, in fulfilment of that contract, or in payment of that debt; and Congress have no power to alter it. Congress have nothing to do with the matter.

So, too, if one man contracts to convey his farm to another, that farm is the legal tender, and the only legal tender, in fulfilment of that contract.

So, if one man contracts to give his horse to another, for value received, that horse is the legal tender, and the only legal tender, in fulfilment of that contract; and Congress have nothing to do with the matter.

On the same principle, when one man has contracted to pay another a hundred dollars, a hundred dollars constitute the legal tender, and the only legal tender, there can be in the case. Not because Congress have made the dollars a legal tender: but because the parties themselves made the dollars the tender in that particular case; just as, in the cases before supposed, the parties made the wheat, the farm, and the horse, the legal tender in those cases respectively.

If Congress can fix the tender, in payment of a debt, independently of the agreement of the parties, they can make at least a part of a contract between the parties, without their consent. But Congress have no more power to make any part of a contract between two parties, without their consent, than they have to make a whole one.

Congress have no power whatever in regard to legal tender, beyond what can be found in these words of the Constitution, to wit: “The Congress shall have power to coin money, and regulate the value thereof, and of foreign coin.”

This is the only power given to Congress on the subject. And Edition: current; Page: [40] here is no power given, in express terms, to make the coin mentioned, either domestic or foreign, “a legal tender in payment of debts.” It is only by carefully analyzing all the terms of the provision, that, even by inference or implication, such an authority can be extracted from it. Let us see.

What is it “to coin money?” It is simply to weigh and assay pieces of gold, silver, or other metals, and stamp them in a manner to certify their quantity and quality—that is, their weight and fineness. This is the whole of it. And, so far as this simple act of coining goes, there is nothing that makes the coins a legal tender; or that gives Congress any authority to make them a legal tender.

After the pieces have been coined, they are sold by Congress in the market, and are afterwards sold by individuals in the market, for just what they may chance to bring, like any other merchandise; Congress having no control over their market value.

If a debtor agrees to pay, and a creditor to receive, these pieces of coin, the coins are thereby made the legal tender in payment of that particular debt. They thereby become necessarily the legal tender; not because Congress have so prescribed, but because the parties have so agreed. The parties, and not Congress, make them the legal tender.

Parties are under no legal obligation to make their contracts payable in coin—that is, in dollars. They are at perfect liberty to make them payable in wheat, corn, hay, iron, wool, cotton, pork, beef, or any thing else they choose. And when they do so make them, these other commodities become the tender; just as dollars become the tender when dollars are promised.

The whole object of coining money, therefore—so far as a legal tender is concerned—is, not to enforce any particular tender upon the parties to contracts, but that there may be in the community certain commodities, suitable for a legal tender—that is, whose quantities and qualities may be precisely known—in order to facilitate the making and fulfilling of contracts by the parties, and the enforcing of them by the courts, with Edition: current; Page: [41] perfect certainty and precision. It is to furnish something, known to the law, and fixed by the law, and about which there may be no controversy between parties, and no doubt on the part of the courts, as to whether or not it is the identical thing—in kind, quantity, and quality—that was promised to be delivered.

When contracts are made to be fulfilled by the payment of wheat, wool, cotton, iron, &c., disputes are liable to arise between the parties as to whether the commodities tendered are of the precise quality with the ones promised. Hence litigation arises; and litigation too, which it is extremely difficult for courts to settle justly; because it is very difficult, and often impossible, for a court to know the precise quality of the commodities promised, as understood by the parties themselves at the times of their contracts.

It is desirable, therefore, that there should be something, known to the law, and which may be promised to be delivered, and about the quality of which there can be no dispute. Such a commodity serves both to prevent controversy and litigation, and to enable courts to settle them justly and truly when they do arise.

So far, then, as a legal tender is concerned, the whole object of the Constitution, in giving Congress “power to coin money,” is, not at all to take away from parties their natural power and right to make such contracts as they please, or to impair their contracts when made, but to aid them in making precisely such contracts as they wish; and to insure the enforcement of the contracts, by the courts, precisely as the parties made them.

The object of the Constitution is to give the people additional facilities (beyond what nature has provided) for making their own contracts, and having them accurately enforced; and not at all to take from them any natural power or right to make such contracts as they please; or to give Congress any power to interfere with, control, invalidate, or impair the contracts made.

But, secondly, Congress have power not only “to coin money,” but also “to regulate the value thereof, and of foreign coin.”

What is it “to regulate the value thereof, and of foreign Edition: current; Page: [42] coin?” Certainly it is not to fix the current value of the coins, relatively to other commodities. It is not, for example, to say how much wheat, wool, cotton, iron, hay, or any thing else, one dollar, or five dollars, in coin, shall buy.

For Congress to fix the value of the coins, relatively to other commodities, would be equivalent to their fixing the value of other commodities relatively to coin. But that, clearly, is a matter for parties to agree upon; and one with which Congress have nothing to do.

What, then, is this power of Congress “to regulate the value thereof, and of foreign coin?”

If the Constitution had said simply that Congress should have “power to coin money, and regulate the value thereof”—omitting the words “and of foreign coin”—the legal conclusion probably would have been, that Congress should only have power to coin money, and regulate the intrinsic value thereof—that is, fix, at their discretion, the quantity and quality of the metals of which the coins should be composed. But since Congress have “power to regulate the value of foreign coin”—the intrinsic value of which has already been fixed by the governments that coined them—we are, perhaps, under a necessity to infer that the power given to Congress “to coin money, and regulate the value thereof, and of foreign coin,” is a power to fix the legal value of all these different coins relatively with each other; that is, a power to say how many coins of one kind or denomination, shall be equal in value to a given number of another kind, or denomination.

But, if we accept this inference, we are also under a necessity to infer that it is only in the single case of a “tender in payment of debts,” that this legal value of the coins, as fixed by Congress, can be set up; for, in all other cases, it is clear that the parties to contracts are at perfect liberty to give and receive more or less for any one of the coins, than they would for any others of the same legal value.

It is, therefore, only by this inference, and this process of Edition: current; Page: [43] reasoning, that we can come to the conclusion that Congress have any power at all to fix the value of their own coins, and of foreign coins, for the purposes of a “tender in payment of debts.”

And when we thus find that Congress may, perhaps, have a certain power relatively to “a legal tender in payment of debts,” we find that, at most, it is only a power to fix the value of the different coins, relatively to each other; and not relatively to other things. In other words, we find that it is a power simply to say, for example, that five dollars, in silver, shall be equal to one half eagle in gold; that an English pound sterling, shall be equal to four dollars eighty-five cents of United States coin; and that a French Napoleon shall be equal to three dollars eighty-five cents of United States coin. And that it is only in the single case of “a tender in payment of debts,” that even this legal value of the coins, relatively to each other, can be fixed by Congress. In all other cases, all the different coins may be legally bought and sold at just such values as the parties to contracts may choose to put upon them.

The most, therefore, that can be said, in favor of the power of Congress, is, that they have power to coin money, and regulate the value of the different pieces thereof, and of foreign coin, relatively to each other, for the single purpose of a tender in payment of debts; and that they have no other power over the subject.

This power of Congress, it is to be noticed, is not a power to make the coins a legal tender, (when the parties to contracts have not done so;) but only a power to fix the value of the different coins, relatively to each other, when the parties to contracts shall have made them a tender. In other words, it is only a power to say that, when the parties to contracts shall have agreed upon the amount of coin, or the number of dollars, to be paid, they shall be understood to have contracted for so much coin, or so many dollars, of any, or all, these different kinds, (at the option of the debtor,) and not for any one kind of coin, Edition: current; Page: [44] or one kind of dollars, rather than another of the same legal value.*

This power of Congress leaves parties at full liberty to make their own contracts; and consequently to fix their own tender, (without fixing which there can be no contract.) It only enables Congress virtually to prescribe beforehand what particular words or terms—such as dollar, eagle, dime, cent, and so forth—when used by the parties to contracts, shall be understood to mean. Just as Congress, in fixing the standard of weights and measures, virtually prescribe beforehand what the terms bushel, yard, rod, foot, acre, pound, gallon, &c., when used by the parties to contracts, shall be understood to mean.

This power of Congress to prescribe what certain terms, such as dollar, bushel, and the like, when used in contracts shall be understood to mean, is a power that can be exercised only within Edition: current; Page: [45] very narrow limits, to wit, the limits of prescribing that those terms shall be understood to mean either such coins and measures as Congress shall have previously established and designated by the same terms, or such coins and measures as Congress shall have previously designated as the equivalents of the coins and measures designated by those terms.

The object of giving to Congress these powers “to coin money, and regulate the value thereof, and of foreign coin, and fix the standard of weights and measures,” is not at all to give Congress any power to control parties in making their contracts; nor any power to alter or impair their contracts when made; but only to provide certain coins, weights, and measures, that shall be known alike to courts and people, in all the States, according to which contracts may be made, if the parties shall so choose; and according to which contracts may be fulfilled, when the parties shall have so agreed.

Congress have plainly no more right to alter the tender, when the parties have agreed on one, than they have to alter a measure, when the parties have agreed on one. Congress have no more power, for example, to say, when a man has promised to pay a hundred dollars, that he shall be required to pay but fifty, or that he may tender something else than dollars, (or other coin of equal legal value,) than they have to say that, when he has promised to deliver a hundred bushels of wheat, he shall be required to pay but fifty; or that he may tender oats, apples, or onions, instead of wheat.

In short, Congress have no power whatever over men’s contracts, except simply to say that when men shall have agreed to pay a certain number of coins, of a denomination or denominations which Congress shall have previously designated as being of the same legal value with certain other coins, this legal value of all the coins, relatively to each other, shall be recognized by the parties and the courts, and the contracts shall be fulfilled and enforced accordingly; and that when parties shall have agreed to pay a certain number of bushels, yards, or pounds, of any thing, Edition: current; Page: [46] it shall be understood that the bushels, yards, and pounds agreed upon, are such bushels, yards, and pounds as Congress shall have previously designated.

This power of Congress to designate beforehand certain coins, weights, and measures, with reference to which contracts may be made, (if the parties so choose,) with the certainty of having them accurately and truly fulfilled, is totally different from a power to control, alter, or impair men’s contracts, by prescribing that more, less, or other than the parties have agreed on, shall be a legal tender in fulfillment of their contracts. The former power is a power in aid of men’s natural power and right to make their own contracts, and have them truly and accurately enforced. The latter power would be a power wholly destructive of all men’s natural rights to make their own contracts, or to have them enforced.

This attempt, on the part of Congress, to alter the tender, from what the parties to contracts have agreed on, and to require parties and courts to recognise any thing but “coin” as “a legal tender” in fulfilment of contracts for the payment of coin, is one of the most naked, impudent, and wicked usurpations that can be conceived. There is not a syllable in the Constitution that gives the slightest color of authority for any such enactment.

When a man has contracted, for value received, to deliver a plough, have Congress any constitutional power to enact that he may tender a gun, in fulfilment of that contract? Or if he has contracted to deliver a horse, have Congress power to enact that he may tender a bull? If a man has contracted to convey his farm, for value received, have Congress any power to enact that he may tender cats, dogs, snakes, and toads, in fulfilment of that contract? If a milliner has contracted to deliver a bonnet, have Congress power to enact that she may tender a wheelbarrow, or a handcart? If a jeweller has contracted to deliver a necklace, have Congress any power to enact that he may tender a coal hod? If a man has contracted, for value received, to deliver, to a lady, chairs, sofas, carpets, mirrors, and pictures, for her parlor, have Edition: current; Page: [47] Congress power to enact that he may tender tar, turpentine, oil, and lampblack, instead of the things agreed on? If a handsome and spirited young man has promised marriage with a young and beautiful woman, have Congress power to enact that he may tender a decrepid old man in his stead? Just as much constitutional power have Congress to do any and all these absurd and ridiculous things, as they have to alter men’s contracts, or make any thing but “coin” a tender, where coin has been promised.

If Congress, under “the power to coin money, and regulate the value thereof, and of foreign coin,” have power to say that United States notes shall be a legal tender in payment of debts, they have evidently the same power to say that foreign notes—or the notes of foreign nations—shall also be a legal tender. If the word “coin,” as used in the Constitution, includes government notes, then certainly the words “foreign coin” include foreign government notes. So that, on the theory that Congress have power to make the United States notes a legal tender, it necessarily follows that they have equal power to make the notes of all other governments a legal tender.

Furthermore, the explicit provision of the Constitution, that “No State shall make any thing but gold and silver coin a tender in payment of debts,” is additional and conclusive evidence, if any more could be needed, that Congress have no power to make any thing but coin itself a tender.

But it is said that Congress have power to debase the coin, and thus impair the value of existing contracts; and that, if Congress can impair existing contracts by debasing the coin, they have equal power to impair them by making something else than coin a tender.

It is true that Congress have power to debase the coin; but it is utterly untrue that they have any power to affect the value of existing contracts by so doing. It might as well be said that they have power to reduce the bushel, gallon, and yard measures; and by so doing reduce the value of existing contracts for the delivery of grain, spirits, and cloths.

It is an established principle in law, that the words of a contract are to be taken in the sense in which they are used at the time the contract is entered into; and that nothing subsequent can alter that meaning. Contracts for so many pieces of coin, are contracts for the things signified by those words at the time; and not for other and different things, that may be created afterwards, and made to bear the same names. In other words, contracts are for things, and not for mere names.

But the technical lawyer will, perhaps, inquire how can the original contract be enforced, or judgment be given for the coin contracted for, after the current coin of the country has been debased? The answer is, that in case of non-performance of contract, the principal has his option of two remedies, viz.: first, to bring suit for specific performance—that is, to compel the delivery of the identical thing promised, where its delivery is reasonably possible; and, second, where he does not desire the delivery of the identical thing promised, or where such delivery has become impossible, he can sue for the damage; the damage to be estimated and paid in the coin current at the time of the judgment.

Suppose, therefore, that from this day, the standard coin were to be debased to one half the value of the present standard; a creditor under a preexisting contract would have a right to demand payment of the original coin contracted for; and if payment were refused, he would have a right to sue for specific performance—that is, for the delivery of the particular coin contracted for. And it would be the duty of the court to enforce such delivery, if coin of the original standard were still in circulation so that its delivery was reasonably possible. But if the original coin had so far disappeared as to make its delivery practically impossible, then the creditor could sue for the damage; and it would be the duty of the jury, in estimating the damage, to take into account the relative value of the coin contracted for, and the debased coin, in which the damage was to be paid; and Edition: current; Page: [49] to give judgment for such an amount of the latter as would be equal in intrinsic value to the former.

There would be as much reason in saying that Congress have power, by increasing the value of the standard coin, to increase the value of existing contracts for coin, as there is in saying that they have power, by debasing the coin, to diminish the value of existing contracts for coin.

In short, contracts for the delivery of coin, at a future time, are not simply contracts for such coins as may, at that future time, happen to bear the names mentioned in the contracts. But they are contracts for such amounts of real gold and silver as the terms employed signify at the times when the contracts are entered into.

We will now consider the argument closed, so far as it relates to the power of Congress to make government notes a legal tender, under their “power to coin money, and regulate the value thereof, and of foreign coin.”

But, inasmuch as some of the courts, that have acted upon the question, have pretended that the power to make the notes a legal tender is included in some of the other powers of Congress, such as the powers “to borrow money,” “to lay and collect taxes,” “to regulate commerce with foreign nations, and among the several States,” and to carry on war, it may be proper to devote a few words to these points.

To determine whether the power to make the notes a tender is included in any, or all, the powers just mentioned, we must keep in mind that, when it is said that one power of Congress is included in another, it is meant that the former is a part of the latter; that the former is included in the latter, just as a part of any thing is included in the whole; for example, just as a peck of grain is included in the bushel of grain, of which it is a part; and just as an ounce of silver is included in the pound of silver, Edition: current; Page: [50] of which it is a part; and just as a rod of land is included in the acre of land, of which it is a part.

We must also keep constantly in mind—what has been already shown, in the former part of this chapter—that the whole idea of a tender arises out of the contract of the parties themselves; that what the debtor agrees to pay, and what the creditor agrees to receive, is the tender; and that, from the very nature of contracts themselves, (which are only the consent or agreements of the parties,) nothing else is the tender, or can be made so.

Congress have no more power to fix the tender, in any case, without the consent of the parties, than they have to make any or all other parts of a contract, without the consent of the parties. Unless, therefore, Congress have power to make contracts ad libitum, on behalf of individuals, and without their consent, they clearly have no power to make that part of their contracts, which fixes the tender, or the commodity in which their debts are to be paid.

The question, then, to be determined is equivalent to this, namely, whether the powers of Congress “to borrow money,” “to lay and collect taxes,” “to regulate commerce with foreign nations, and among the several States,” and to carry on war, include, as a part of themselves, a general and unlimited power of attorney, or a general and unlimited authority, to make any and all contracts, binding upon individuals, and binding their property, when the individuals themselves have made no contracts at all, and given no consent to those made in their name by Congress?

Unless Congress have such a general and unlimited power of attorney, or such a general and unlimited authority, to make entire contracts, in the names and behalf of, and binding upon, individuals, without their consent, then they (Congress) have no manner of authority to make any contract whatever, or any part of any contract whatever, that shall be binding upon an individual, or that shall bind his property, when his own consent has not been given. And if they have no power to make any part of Edition: current; Page: [51] a contract for him, they have no power to contract that he will accept this, that, or the other thing, in payment of debts due him, when he himself has made no such agreement; but has agreed only to receive such coin, grain, or other thing, as was specially mentioned in the contract.

Plainly the powers of Congress “to borrow money,” “to lay and collect taxes,” “to regulate commerce with foreign nations, and among the several States,” and to carry on war, include no power at all to make or alter any contracts whatever for private individuals. They no more include a power to make or alter any part of a contract, for a private person, without his consent, than to make a whole contract for him, without his consent. They no more include a power to make any thing a tender in payment of debts due him, which he has not agreed to receive, than they include a power to make contracts, between individuals, to buy and sell, borrow and lend, give and receive, all kinds of property, when the individuals themselves have never agreed to any thing of the kind.

There would be just as much reason in saying that, in granting to Congress the powers “to borrow money,” “to lay and collect taxes,” “to regulate commerce with foreign nations, and among the several States,” and to carry on war, the Constitution had given Congress an unlimited power of attorney to make any and all possible contracts whatsoever, on the part of private persons, for buying and selling, for borrowing and lending, for giving and receiving, their property of all kinds, as there is for saying that the Constitution has appointed Congress the attorney of private persons, for agreeing what they will receive in payment of their debts.

But let us consider these several powers separately—

1. The power of Congress “to borrow money on the credit of the United States.”

The government notes, which Congress have declared to be a legal tender in payment of private debts, are issued under this power “to borrow money.” And, therefore, this is the power Edition: current; Page: [52] that ought—if any of the powers of Congress ought—to include the power to make the notes a legal tender. But does it?

Certainly not; and for this reason, viz.: That there is no natural or logical connexion whatever between the power of Congress to borrow money of one man, and give him their note for it, and a power to make that note a legal tender in payment of a debt due to another man, who was not a party to the loan. As there is no natural or logical connexion between two such powers as these, it follows that one cannot be included in the other.

This power of Congress “to borrow money,” is plainly a simple power to borrow it by private and voluntary contracts with those who choose to lend money to the United States. It has no reference to other persons, not parties to the loans, nor to the debts of individuals to each other. The act of borrowing is complete when Congress have obtained the money, and given their notes for it. There is an end of the whole transaction, so far as the “borrowing” of the money is concerned. And there is consequently the end of the power of Congress on that subject. It is preposterous to say that this power includes, as a part of itself, a power to make contracts, on behalf of other persons, not parties to the loan, as to what they will, or will not, receive, from their debtors, in payment of their debts.

When A lends money to B, and B gives his note for it, that contract includes no contract—and implies no power on the part of B to contract—that C, D, E, and every body else will receive his (B’s) note in payment of any debts that may be due them. A and B, in this case, have no power whatever to make any contracts whatever affecting other men’s rights.

So when Congress borrow money of A, and give him their notes for it, the contract is, in all respects, like that between two individuals. It includes no contract—and implies no power on the part of Congress to contract—that B, C, D, or any body else will accept the notes which Congress give to A for the money, as a legal tender in payment of debts due them.

The act of “borrowing money on the credit of the United Edition: current; Page: [53] States,” is, in its nature, a wholly private and voluntary contract between Congress and the lender of the money. It is as much a private and voluntary transaction, as is the borrowing and lending of money between two individuals. No other persons, than Congress and the lender of the money, are parties to the loan. No other parties are consulted, nor allowed any voice, in regard to the matter. How, then, can it be said that the power of Congress to borrow money of A, by private and voluntary contract with him, includes a power to agree, on behalf of B, C, D, and every body else, who had nothing to do with the loan, that they will accept from their debtors, in satisfaction of the debts due them, something different from what they had agreed to receive, and their debtors had agreed to pay?

Plainly there is no manner of relation or connexion between two powers so utterly dissimilar and foreign to each other. Consequently one is not included in, and does not constitute a part of, the other.

The only other powers that could possibly be said to be naturally, logically, or impliedly included in this power of Congress “to borrow money,” would be the powers to raise money by taxes or otherwise, and repay what they had borrowed. But these powers, instead of being left to implication, as being included in the power “to borrow money,” are expressly conferred by the Constitution, in these other words, viz.: “The Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defence and general welfare, of the United States.”

Thus the Constitution has given to Congress, in express terms, all the powers that naturally belong together, or depend upon, or make parts of, each other, to wit: the powers to borrow money, and to raise money by taxes, &c., and pay what they have borrowed.

How absurd, then, is it, when the Constitution has been so explicit in granting all the powers on this subject, that are naturally related to each other, or in any way depend upon each other, to Edition: current; Page: [54] say that the power to borrow money includes still another power, and one, too, entirely foreign to the subject, viz.: a power to make the notes, given for borrowed money, a legal tender in payment of debts to persons who had nothing to do with the loan.

2. The power of Congress “to lay and collect taxes, duties, imposts, and excises.”

It is said that this power includes a power to say in what coin, currency, or other things, the taxes, duties, &c., shall be paid. Very well; suppose it does. How does this power to designate the commodity in which taxes shall be paid to the government, include any power to make contracts, on behalf of private persons, as to what commodities they will, or will not, accept in payment of debts due them?

For the sake of the argument, it may be granted that Congress have power to enact that all taxes, &c., to the United States shall be paid in pigs. But does that power include a general power of attorney, from every body in the United States, to agree that they will accept pigs in payment of all debts due them?

If a man owes the United States one, two, three, five, or ten pigs, as taxes, it may be practically necessary that he should either raise the pigs, or buy them. If he should not, Congress may have power to order the sale of so much of his property as will purchase pigs to the amount of his taxes. But all this implies no power whatever, on the part of Congress, to usurp his rights of making his own contracts, and to agree, on his behalf, and without his consent, that he will accept pigs in payment of any, or all, debts due him.

3. The power “to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.”

What is commerce? It is the purely voluntary act of two or more persons. It is the buying and selling, the borrowing and lending, the giving and receiving, of commodities by voluntary agreement between the buyer and seller, the borrower and lender, the giver and receiver.

What is it “to regulate commerce?” It is to secure and protect Edition: current; Page: [55] all voluntary commerce between individuals, that is naturally and intrinsically just and lawful; and to prohibit all commerce that is naturally and intrinsically unjust and unlawful.

This power of Congress, therefore, “to regulate commerce,” is simply a power to secure and protect all commerce “with foreign nations, and among the several States, and with the Indian tribes,” that is naturally and intrinsically just and lawful; and to prohibit all commerce that is naturally and intrinsically unjust and unlawful. And this is the whole of the power; unless possibly the power may include a power to render such incidental aid to the commerce of private persons, as it may be reasonable for Congress to render, and such as may be beneficial to the parties carrying on the commerce.

But the power of Congress “to regulate commerce,” includes no power, on their part, to usurp the commerce of private persons. It includes no power to usurp the power of making contracts on behalf of private persons, without their consent. It includes, for example, no power to alter the contracts of private persons, and convert contracts for the delivery of grain, wool, or cotton, into contracts for the delivery of ice, iron, or coal. Of course, it includes no power to alter contracts for the delivery of coin, into contracts for the delivery of government notes.

It has been said by the Supreme Court of the United States, that the power of Congress “to regulate commerce,” is a power “to prescribe the rule by which commerce is to be governed.”*

Using the terms “prescribe,” “rule,” and “governed,” in the senses in which the court evidently intended to use them—that is, to signify the exercise of arbitrary authority over commerce—this definition is an utterly false and atrocious one. It would give Congress power arbitrarily to control, obstruct, impede, derange, prohibit, and destroy commerce.

It would also give Congress power to force men to carry on commerce against their will.

To force men to carry on commerce against their will, would be no more unjust or tyrannical than it is to prohibit, impede, or obstruct commerce, when men wish to carry it on.

It is a natural right of all men (who are mentally competent to make reasonable contracts) to make such contracts as they please, for buying and selling, borrowing and lending, giving and receiving, property, provided only that there be no fraud or force used, and that the contracts have in them nothing intrinsically criminal or unjust.

The free right of buying and selling, borrowing and lending, giving and receiving (by contracts naturally and intrinsically just and lawful) all property that is naturally a subject of bargain and sale, is among the most vital and valuable of all a man’s natural rights. And this right Congress have no power to interfere with, under pretence of “regulating commerce.”

Even the power of restraining commerce, otherwise just and lawful, in order to guard against contagious diseases and public enemies, is no exception to the principle laid down; for that commerce is not intrinsically just and lawful, which carries with it contagious diseases, or introduces, or opens the door to, public enemies.

The verb “to regulate,” does not, as the court assert, imply the exercise of any arbitrary control over the thing regulated, nor any power “to prescribe [arbitrarily] the rule by which” the thing regulated “is to be governed.” On the contrary, it comes from regula, a rule; and implies the pre-existence of a rule, to which the thing regulated is made to conform.

To regulate one’s diet, for example, is not, on the one hand, to starve one’s self to emaciation, nor, on the other, to cram one’s self with all manner of indigestible and hurtful substances, in disregard of the natural laws of health. But it supposes the pre-existence of natural laws of health, to which the diet is made to conform.

A clock is not “regulated,” when it is made to go, to stop, to go forwards, to go backwards, to go fast, and to go slow, at the mere will or caprice of the person who may have it in hand. It is “regulated” only when it is made to conform to, or mark truly, the diurnal revolutions of the earth. These revolutions of the earth constitute the pre-existing rule, by which alone a clock can be regulated.

A mariner’s compass is not “regulated,” when the needle is made to move this way and that, at the will of an operator, without reference to the north pole. But it is regulated when it is freed from all disturbing influences, and suffered to point constantly to the north, as it is its nature to do.

A locomotive is not “regulated,” when it is made to go, to stop, to go forwards, to go backwards, to go fast, and to go slow, at the mere will and caprice of the engineer, and without regard to economy, utility, or safety. But it is regulated, when its motions are made to conform to a pre-existing rule, that is made up of economy, utility, and safety combined. What this rule is, in the case of a locomotive, may not be known with such scientific precision, as is the rule in the case of a clock, or a mariner’s compass; but it may be approximated with sufficient accuracy for practical purposes.

The pre-existing rule, by which alone commerce can be “regulated,” is a matter of science; and is already known, so far as the natural principles of justice, in relation to contracts, is known. The natural right of all men to make all contracts whatsoever, that are naturally and intrinsically just and lawful, furnishes the pre-existing rule, by which alone commerce can be regulated. And it is the only rule, to which Congress have any constitutional power to make commerce conform.

When all commerce, that is intrinsically just and lawful, is secured and protected, and all commerce that is intrinsically unjust and unlawful, is prohibited, then commerce is regulated; and not before.

Of course this power of Congress “to regulate commerce,” Edition: current; Page: [58] includes no power to pervert, alter, impair, or destroy the natural or intrinsic obligation of men’s contracts. Consequently it includes no power to convert a contract for the payment of gold and silver, into a contract for the delivery of government notes, or any thing else, to which the parties have never agreed.

If the power of Congress to regulate commerce were such an absolute power, as the Supreme Court represents it to be, viz.: a power “to prescribe the rule by which commerce is to be governed,” this absurd result would follow, viz.: that all the legislation of Congress on the subject would be necessarily constitutional; and the Supreme Court itself would have no right even to consider the question of its constitutionality. It would have no function to perform in regard to such legislation, except simply to interpret and execute it. In ascribing such absolute power to Congress, therefore, the Supreme Court is really denying and abjuring its own constitutional power to judge of the constitutionality of the laws of Congress. Who, before, ever imagined that the constitutionality of the laws of Congress, in regard to commerce, was not a proper subject for judicial consideration, and adjudication?

But even if the power of Congress “to regulate commerce” were of that arbitrary and tyrannical character, which the court declares it to be, it would still be insufficient to accomplish the object of making the government notes a legal tender in payment of debts generally; inasmuch as the power is only a power “to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.” It is not a power to regulate the purely internal commerce of a State—that is, commerce between two persons living within the same State. It could, therefore, do nothing towards making the government notes a tender between two such persons. Its practical effect, therefore, would be, in a great measure, defeated by this limitation upon the power itself.

4. The power to carry on war.

The Constitution grants this general power to Congress in the Edition: current; Page: [59] form of the several separate powers given below, (with the limitations upon them,) to wit:

In the name of common sense, how can it be said that any or all these powers include a power to meddle with, make, alter, or abolish the contracts of private individuals with each other? Or—what is equivalent thereto—to make any thing a legal tender in payment of private debts, which the parties themselves have never agreed to? The former powers are all naturally so entirely foreign to the latter, that, at first view, it would scarcely seem more ridiculous to say that the power of Congress “to define and punish piracies and felonies on the high seas, and offences against the law of nations,” included a power to make government notes a legal tender in payment of private debts, than it does to say that the power of Congress to carry on war includes the power to make those notes a tender.

There would obviously be just as much reason, just as much congruity of ideas, and just as much natural and logical consistency, in saying that, because Congress have power to carry on war, and, in doing so, have occasion to sell old army stores, old horses, old muskets, old ships, and old war material in general, therefore the power of Congress to carry on war, includes a power to enact that whenever any old war material shall be sold, it shall become a legal tender, in the hands of the purchasers and Edition: current; Page: [60] their assigns, in payment of all private debts, as there is in saying that, because Congress have power to carry on war, therefore, that power must include a power to make the notes given by them for money to carry on the war, a legal tender in payment of private debts.

There is just as much natural connexion between the power of Congress to carry on war, and a power, on their part, to make old war material, thus sold by them, a legal tender in payment of private debts, as there is between their power to carry on war, and a power to make the notes, given by them for money borrowed for the war, a legal tender in payment of private debts.

But it is said that Congress can borrow money cheaper, if they make their notes a legal tender, in the hands of the holders, than if they do not. So, also, it may just as well be said, that they can sell their old horses, old knapsacks, old muskets, old cannon, and old ships at higher prices, if they make them legal tender, in the hands of the purchasers and their assigns, than if they do not. If, then, the argument of profit is a sound one, in favor of the power, in one case, it is equally sound in the other.

But there is still another absurdity in this matter. The Constitution does not give absolute and unqualified power to Congress for carrying on war. It does not even give all the powers, which—but for the special limitations mentioned—would have been naturally and logically included in the general power to carry on war. For example, it says “No appropriation of money to that use shall be for a longer term than two years.” It also “reserves to the States respectively the appointment of the officers [of the militia] and the authority of training the militia, according to the discipline prescribed by Congress.”

When the Constitution is so jealous of the public rights that it expressly withholds from Congress certain powers, which otherwise would have been naturally and logically included in the general power to carry on war, how absurd is it to say that their power to carry on war includes—without its being so mentioned—a power so utterly foreign and irrelevant to it, and so Edition: current; Page: [61] destructive of the principles of justice, as is the power to alter and impair men’s contracts by making government notes a tender in payment of private debts.

There would be just as much reason in saying that the power of Congress to carry on war, includes a power to make the speeches delivered in Congress in favor of the war, a tender in payment of men’s debts, as there is in saying that it includes a power to make the government notes such a tender.

It will now be taken for granted that it has been shown that neither the power “to borrow money,” “to lay and collect taxes,” “to regulate commerce with foreign nations, and among the several States,” nor to carry on war, gives Congress any power to make government notes a legal tender in payment of private debts.

But it is said, by some of those who attempt to uphold the legal tender acts, that Congress not only have certain specific powers granted to them by the Constitution—such as the powers to borrow money, carry on war, &c.—but that they have another, and a very comprehensive, power, viz.:

Some, or all, those persons, who have quoted this provision, as authorizing the legal tender acts, say that Congress are the sole judges of what laws are thus “necessary and proper,” and have, therefore, unlimited powers to pass any laws they see fit, provided only that the laws will tend to carry into execution the other constitutional powers of Congress, and are not actually forbidden by the Constitution. Consequently they say that, as the Constitution has not forbidden Congress to make their notes a legal tender, and as the making them such will aid in borrowing money for the war, they necessarily have the power to make them such.

In other words, they say, in effect, (and without saying so, their argument would amount to nothing,) that all laws whatsoever—no matter how unjust in themselves—that will, in any way, serve to accomplish a constitutional end—such as borrowing money, carrying on war, &c.—are constitutional means to that end, if Congress shall decide to use them, and if the Constitution has not forbidden those particular laws.

In short, their argument is, that the simple injustice of the laws is, of itself, no argument against their being “necessary and proper,” and, therefore, constitutional.

And they say, further, that, in the case of McCulloch vs. Maryland, the Supreme Court of the United States has declared this same doctrine.

One answer to these persons is, that the Supreme Court did not say, either expressly or impliedly, in the case of McCulloch vs. Maryland, that the injustice of a law could not be taken into consideration in determining whether it were “necessary and proper,” and, therefore, constitutional—if it would but tend to accomplish a constitutional purpose, and if the Constitution had not forbidden it.

Another answer is, that if the Supreme Court had declared such a principle, they would have as much deserved to be hanged, as any criminal that ever mounted the gallows.

If all laws of Congress, however unjust, are nevertheless constitutional, if not forbidden, and if they will tend to accomplish any constitutional end, there is scarcely any conceivable injustice which Congress might not constitutionally authorize, as being “necessary and proper” means of accomplishing constitutional ends.

For example: The Constitution does not, in so many words, forbid Congress to prohibit all loaning of money to private persons, until Congress shall have borrowed all they wish, and at such rates as they please. The Constitution does not, in so many words, forbid Congress to prohibit matrimony on the part of each and every individual, until he or she shall have loaned one, five, Edition: current; Page: [63] ten, or fifty thousand dollars to the government. It does not, in so many words, forbid Congress to cause scalding water to be thrown upon the children of all persons who refuse to lend their money to the United States. It does not, in so many words, forbid Congress to make it a criminal offence—punishable with confiscation, imprisonment, or death—to refuse to lend money to the government, in such amounts, for such times, and at such rates of interest, as Congress may prescribe, or without any interest at all. Such laws might, perhaps, aid Congress in borrowing money at lower rates than they otherwise could. But would such laws be, therefore, constitutional? And would courts have no power to declare them unconstitutional? Certainly such laws would be, not simply unjust, but also unconstitutional. And certainly it would be the duty of the courts to declare them so. But they would be no more clearly unconstitutional, than are the laws making the government notes a legal tender in payment of private debts.

The Supreme Court, in the case mentioned, did not say one word in favor of Congress having power to pass unjust laws—as being “necessary and proper” to accomplish constitutional ends—if they were not forbidden.

The language of the court is not, perhaps, so explicit as it ought to be. And, without ascribing to that court any immaculate purity, it may be said that their opinion is, very likely, not so explicit as it would have been, if they had supposed there would ever come after them judges so ignorant, or so corrupt, as to cite their opinion in support of a proposition so infamous.

The precise words of the court are these:

And the court said nothing inconsistent with these limitations, Edition: current; Page: [64] viz.: that all laws, in order to be “necessary and proper” for carrying into execution the constitutional powers of Congress, must be “appropriate” to the end in view, and must also “consist with the letter and the spirit of the Constitution.”

What, then, are “the letter and spirit of the Constitution” on these particular subjects of legal tender, and the inviolability of private contracts? They are to be found in these four provisions, viz.:

These provisions—and there are no others conflicting with them either in letter or spirit—give us fully and distinctly both “the letter and the spirit of the Constitution,” relative to legal tender, and the inviolability of contracts. What countenance do they give to any power in Congress to impair or destroy men’s contracts, by authorizing them to be paid in something which the debtor never agreed to pay, nor the creditor to receive?

But there is still another mode of ascertaining whether the Constitution authorizes Congress to pass any unjust laws, as being “necessary and proper” for carrying into execution the powers specifically granted. And that mode is furnished by the primary rule of interpretation, which is acknowledged to be authoritative for interpreting all legal instruments whatever which courts enforce. That rule is, that an innocent meaning—a meaning favorable to justice—and no other, must be given to all legal instruments—whether contracts, statutes, constitutions, or treaties—whose language will possibly bear that meaning.

The Supreme Court of the United States have laid down the rule in these words:

The same rule, in substance, but in different words, is continually laid down by courts, in their interpretations of constitutions, statutes, and contracts. Every judge, not an ignoramus, is perfectly familiar with the rule. And every judge, who ever violates the rule, is either ignorant or corrupt. The test is an infallible one.

This rule is as applicable to the interpretation of the Constitution as of any other instrument whatever; and is sufficient, of itself, to prove that the Constitution authorizes no unjust laws whatever (unless explicitly mentioned) as being “necessary and proper” for carrying into execution the general powers granted to the government.

Of course, the rule is sufficient to prove that the Constitution gives Congress no power to impair or destroy the obligation of men’s private contracts, as a means of borrowing money a little cheaper than they otherwise could.

It is sickening to think that there can be found judges so ignorant or unprincipled, as to argue that the Constitution authorizes all manner of unjust laws, except those that it forbids. And yet this is what these judges have been necessitated to do, who have attempted to sustain the legal tender acts of Congress.

If those who framed the Constitution, had undertaken to enumerate—in order to forbid—all the unjust laws that Congress might otherwise devise and enact, under pretence of carrying out their constitutional powers, the instrument would never have been completed. They, therefore, contented themselves with framing an instrument that should grant certain important powers to the government, with “power to make all laws which shall be necessary and proper for carrying into execution the foregoing powers,” Edition: current; Page: [66] &c.; trusting that the instrument, being avowedly instituted “to establish justice, insure domestic tranquility, promote the general welfare, and insure the blessings of liberty,” would find interpreters honest enough to give it the benefit of a rule that would at least forbid all injustice, that was not specially licensed by it. And this was all that was really necessary, in a legal point of view.

Nevertheless, after the Constitution had been adopted, the country—having some knowledge of the propensity of legislative bodies to disregard all constitutional and moral restraints, and to resort to all manner of injustice, under the pretext of its being “necessary and proper” for accomplishing some desirable purpose or other—did append various amendments to the Constitution, specially enumerating, and forbidding, some of those unjust laws, which it was supposed Congress would otherwise be most likely to enact.

Among the laws thus explicitly forbidden, were laws “prohibiting the free exercise of religion;” “abridging the freedom of speech or of the press;” “infringing the right of the people to keep and bear arms;” “depriving persons of life, liberty, or property, without due process of law;” “taking private property for public use, without just compensation;” and several others. Having done this, the country then—as if aware of the impossibility of enumerating all laws that ought to be forbidden, and by way of imposing a general prohibition against all unjust laws not specially enumerated—added these two comprehensive amendments, viz.:

These amendments are supplementary to all other provisions, and rules of interpretation, and are, of themselves, sufficient, if Edition: current; Page: [67] any thing more were needed, to prohibit any and every species of injustice, that is not (in the language of the Supreme Court) licensed in terms of “irresistible clearness.”

The only argument, on which the legal tender acts are really attempted to be sustained, is equivalent to this: That Congress have constitutional power to license universal fraud, the violation of all faith, and the disregard of all justice, between man and man, in their private dealings, if the government can thereby borrow money cheaper than it otherwise could.

At the value at which the legal tender notes now stand in the market,* the government says to all debtors throughout the country: If you will lend to the government the money you honestly owe to your creditors, the government will license you to defraud them of some thirty or forty per cent. of what you owe them. The government holds this out as a standing offer to all debtors; and, perhaps, by so doing, it saves one, two, or three per cent. on the amount it borrows; and perhaps not.

If, now, the government may rightfully resort to such means as these to save a small per centage on its loans, it may, on the same principle, license those men, who lend money to the government, to commit all manner of crimes against their neighbors with impunity.†

But, were it not that Congress might attempt to pass new tender laws, all the preceding argument might have been spared; because their existing laws, declaring United States notes a legal tender, are utterly void for still another reason than the want of any constitutional power on the part of Congress to make any thing but “coin” such a tender. That other reason is, that the acts do not declare the value of the notes; or how much they shall be a tender for. Congress seem to have taken it for Edition: current; Page: [69] granted that by simply declaring that they “shall be lawful money, and a legal tender in payment of all debts public and private,” they had virtually declared that these mere promises to pay dollars should be held equivalent to an equal number of real dollars. But such would not be the legal effect of the statute, even if we were to admit the constitutional power of Congress to make the notes a tender. It would still be necessary for Congress to specify precisely the value the notes should have, relatively to coin. Suppose that Congress (having power to do so) had enacted that apples, onions, and potatoes, “shall be lawful money, and a legal tender in payment of all debts public and private,” it would not follow, from this form of words, that each apple, onion, or potato, was to be considered either a dollar, or the equivalent of a dollar. Neither, because Congress have declared that certain government promises to pay dollars, “shall be lawful money, and a legal tender in payment of all debts public and private,” does it follow (without its being so specified) that these promises are to be considered, for the purposes of such tender, equal in value to the number of dollars promised.

But the men, who enacted these tender laws, and the judges, who have attempted to sustain them, have assumed that a promise to pay a dollar was to be considered the equivalent of a dollar, for the purposes of legal tender; when the acts themselves said nothing of the kind; and nothing from which any inference could legally be drawn, as to what value they were to have, as a tender.

The necessary consequence is that—for this reason alone, if there were no other—all the existing acts of Congress making United States notes a tender in payment of “private debts,” are void.*

The fact that such a blunder as this should pass the ordeal of Congress, and of four or five courts, shows what brilliant and careful lawyers Congress and the courts are made up of.

CHAPTER VI.: UNCONSTITUTIONALITY OF THE NATIONAL BANK ACT.

The National Bank Act is unconstitutional in various particulars, as follows:

1. It proceeds throughout on the assumption that the notes of the government will be a legal tender in payment of all debts due to and by the banks. If, then, the Legal Tender Acts of Congress are unconstitutional, as shown in the preceding chapter, the Bank Act must fall with them; for the banks, authorized by the act, cannot sustain themselves for an hour, as practical business institutions, if liable to be sued on their notes for specie; nor can the customers of banks, if solvent men, afford to borrow depreciated currency, and give their notes for it, if they are liable to be sued on those notes for specie. The unconstitutionality of the Legal Tender Acts, therefore, settles at once all questions as to the practicability of the national banks.

2. The guaranty of the notes of the banks by the government is unconstitutional.

Where did Congress get their power to guarantee the notes of banks all over the country? In the same clause of the Constitution that gives them power to guarantee the notes of all the farmers, mechanics, merchants, and every body else, throughout the country; and in no other. And that clause will be found, if at all, in the Constitution manufactured by Congress themselves. It certainly exists in no Constitution that the country has ever known any thing of previous to the last Congress.

But it will be said that Congress secure the United States against loss, by requiring a deposit of their own bonds with the Edition: current; Page: [72] United States Treasurer. Well, suppose they do. Have Congress the power to guarantee the notes of all other persons, who will deposit bonds or other property, satisfactory to Congress, to indemnify the United States against loss? If not, then they have no power to guarantee the notes of bankers on those conditions. And if any officer of the government should ever pay a dollar of the public money on any such guaranty, or if the President should suffer any officer of the government to pay a dollar on any such guaranty, he ought to be impeached. And if any judge, having jurisdiction, should refuse to enjoin the United States Treasurer against thus paying the public money, he would deserve impeachment.

The idea that Congress have any constitutional power to guarantee the notes of bankers, or of any body else, is perfect idiocy.

3. As Congress have no constitutional power to guarantee the notes of bankers, or any body else, and as such guaranty, if given, is void, they have no constitutional power to require or accept deposits of their own bonds, or of any other property, to indemnify the United States for such unconstitutional and void guaranty. Consequently all such deposits are, in law, void; and Congress have no authority to avail themselves of them. Any bonds actually deposited with the United States Treasurer, for such a purpose, are, in law, deposited with him as an individual, and not as an agent or officer of the United States; and Congress have no power to make the United States responsible for his safe keeping of the bonds. And he is in no manner responsible to the United States for the use he makes of the bonds. The owners of them may demand them at pleasure, on the ground that they were deposited for no lawful purpose, and that the United States have no lien upon them. Or the Treasurer may appropriate them to his own use, and Congress could call him to no account for so doing. The owners alone could have any action against him.

Suppose Congress were to appoint agents throughout the country, to receive deposits of property, from all persons who might Edition: current; Page: [73] choose to make them, and thereupon to furnish, to the depositors, notes guaranteed by the United States. We all know that all such transactions would be void in law, on the grounds that Congress had no power to make any such guaranty, or consequently to receive any deposits of property to protect the United States against it. Congress would have no power to make the United States responsible for the safe keeping of such deposits; or to hold their illegal agents to any legal responsibility for the property deposited with them. These pretended agents of the United States would be, in law, the agents of the depositors alone; and the depositors could recover their deposits at pleasure, without any interference from the United States. And the case is the same with these bankers, as it would be with any other persons, farmers, merchants, or others, who might deposit property with any pretended agent of the United States, and receive in exchange notes guaranteed by the United States.

Congress have just as much constitutional power to go into a general guarantee business, guaranteeing the notes of any body, and every body, as they have to guarantee the notes of bankers.

4. The undertaking of Congress to furnish the banks with the notes they are to use, is unconstitutional. Where did Congress find their power to go into the business of bank note engraving? In the same clause of the Constitution that gives them power to go into the daguerreotype business; and in no other. Congress have just as much power to furnish the banks with banking houses, with vaults, safes, desks, and stationery; and to appoint and pay their presidents, cashiers, and clerks, as they have to furnish the bills of the banks. And the fact that Congress are to be paid for the bills they furnish, and that the business may be a profitable one, does not at all alter the case. There are, perhaps, many kinds of business that might be made profitable, if Congress were to take it into their own hands, and suppress all competition. But it does not, therefore, follow that Congress can go into such business.

Congress have just as much power to go into the business of Edition: current; Page: [74] making farming utensils, and selling them to the farmers; of making machinery, and selling it to manufacturers; of making locomotives, and selling them to rail-road companies, as they have to go into the bank note business.

5. Congress have no power to incorporate these banking companies, or give them any corporate privileges, or hold them to any corporate responsibility whatever.

As long ago as 1819, in the case of McCulloch vs. Maryland, (4 Wheaton’s Reports,) the Supreme Court of the United States gave an opinion, which fully covers the Bank Act of Congress, and declares it unconstitutional. In that case the court held that the law incorporating the old bank of the United States was constitutional. But they declared it so, distinctly and solely, on the ground that the bank was a necessary, or at least a proper and useful, agency to be employed in keeping and disbursing the public monies. And those services the bank was required, by its charter, to perform, free of expense to the government; transmitting money from one part of the country to another, without any charge for exchange.*

Thus the court say:

By the “fiscal operations” of the government, the court must be supposed to mean simply the keeping and disbursing of the public money; for those were the only “fiscal operations” the bank was required, by its charter, to perform for the government; and they were also the only “fiscal operations,” that were specially pointed out by the court, as being such as the bank could perform as the agent of the government. The bank was, therefore, held constitutional solely upon the ground of its being Edition: current; Page: [76] a proper and useful agent of the government for keeping and disbursing the public money.

The point of the opinion was, that, if the government needed an agency of that kind, for executing any of its constitutional powers, it had a right to create one by an act of incorporation.

On this principle, if the government were to make a contract, with a body of men, to carry the mail, or furnish supplies for the army, it would have a right to incorporate them.

That was the only ground on which the court held that that bank charter was constitutional. The whole argument of the court proceeded upon the ground that Congress had no power to grant charters of incorporation, except to companies whose services were needed by the government itself, in performing some one or other of its constitutional duties.

If that opinion of the court was correct, it follows that the present Bank Act of Congress is clearly unconstitutional; inasmuch as the banks, authorized by it, are, in no sense, agencies of the government; and are not required, by the act, to perform any services whatever for the government. And Congress, therefore, have no more power to incorporate them, than they have to incorporate hospitals, schools, churches, rail-road, insurance, manufacturing, and mining companies.

It is worthy of notice, too, that notwithstanding the Supreme Court held that the charter of the old bank was constitutional, probably more than half the people of the United States have always believed it unconstitutional.

And it was unconstitutional, in so far as it licensed the stockholders to contract debts among the people, in their corporate capacity, and under a limited liability. Congress have no authority to pass any law impairing or limiting the obligation of men’s contracts, or screening their property from liability for debt, unless it be a “uniform law on the subject of bankruptcies.” A bank charter does not come within that definition; and therefore a bank charter is unconstitutional, in so far as it attempts to exempt the corporators from their liability as partners, Edition: current; Page: [77] no matter what services the bank may perform for the government.

The argument of the court does not at all sustain the conclusion that Congress have any such power. That argument was that Congress had authority to “pass all laws that were necessary and proper for carrying into execution” the substantive powers of the government; and that, therefore, if a corporation were a convenient and proper agent to be employed in keeping and disbursing the revenues, Congress had a right to create such an agent. That is to say, if Congress wished to contract with a company of men to perform a certain service for the government, they had power to recognize them as a corporation, so far as the performance of that particular service was concerned. This all looks reasonable enough; and it is probably correct law that Congress may incorporate a company, and authorize them to do, in their corporate capacity, any thing which they are to do for the government. And Congress may undoubtedly limit, at discretion, the liability which the stockholders shall incur to the government. And the company may probably, in their corporate capacity, buy and sell bills of exchange, so far as it may be convenient to do so, in transmitting the public funds from one point of the country to another; because bills of exchange are the most usual, safe, cheap, and expeditious mode of transmitting money.

But all this is a wholly different thing from a charter authorizing the company, not only to perform these services for the government, but also to carry on the trade of bankers, in all its branches, and contract debts at pleasure among the people, without being liable to have payment of their debts enforced, either according to the natural obligation of contracts, or the laws of the States in which they live.

The argument of the court does not justify the grant of any such authority to the company. It goes only to the extent of authorizing the company to use their corporate rights in doing the business of the government alone; for the court say, that if Edition: current; Page: [78] an agent be needed to perform certain services for the government, the government may create an agent for that purpose. The court admit also, that the need or utility of such an agent for carrying into execution the powers of the government, is the only foundation of the authority to create the agent. This principle clearly excludes the idea of creating the corporation for any other purpose; and of course it excludes the idea of giving it any other corporate powers than that of performing the services required of it by the government. Now, in order that the company may keep and disburse the revenues (which were the only services the government required, or which the opinion of the court contemplated that the bank would perform) it plainly was not at all necessary that they should have the privilege of contracting debts among the people, as bankers, in their corporate capacity, or under a limited liability, or with an exemption from the operation of those State laws, to which all other citizens are liable.

If Congress may, by a charter, protect the private property of a company of bankers, from liability for their banking debts, according to the laws of the States, merely because, in addition to their banking business, they perform for the government the service of keeping and disbursing its revenues, then, by the same rule, Congress may by law forbid the State governments to touch the private property of any Collector of the Customs, or of any clerk in the Custom House, for the purpose of satisfying his debts. And the result of this doctrine would be, that every person, who should perform the slightest service of any kind for the government, might be authorized by Congress to contract private debts at pleasure among the people, and then claim the protection of Congress, not merely for his person, but also for his property, against the State laws which would enforce the obligation of his contracts. Every postmaster, for instance, and every mail contractor might have this privilege granted to them as part consideration for their services; for Congress have as much power to grant this privilege to postmasters and mail carriers, in consideration Edition: current; Page: [79] of the particular services they perform for the government, as they have to grant it to a company of bankers, as a consideration for their keeping and disbursing the revenues.

But suppose that Congress should enact that the private property of all officers and agents of the government, and all persons having contracts to furnish supplies to the government, should be exempt from liability for debt. Would there not be one universal outcry that such a law was unconstitutional? Certainly there would. But it would be no more unconstitutional than a law exempting the private property of a company of bankers, on account of their being the agents of the government for keeping and disbursing its revenues.

In this particular, then, the charter of the old bank was unconstitutional. And if that charter was unconstitutional, still more, if possible, are the charters of the present banks unconstitutional, inasmuch as these banks perform no services at all for the government. They entirely lack the only element that was supposed, by the court, to make the charter of the old bank constitutional.

If the Constitution itself gives Congress no power to incorporate banks, their law, for that purpose, cannot be made constitutional by the consent of the State legislatures. The constitutional powers of Congress, within a State, cannot be increased by the consent of the State legislature. If they could, the general government might have much greater powers in one State than in another. It might increase its powers in each State just according as it could make bargains with the legislature of the State. In fact, a State legislature might, by a simple vote, surrender all the constitutional powers of the State to the general government.

If the Bank Act be unconstitutional, the banks can have no corporate existence under it; and can neither sue, nor be sued, by their corporate names. The bankers can sue and be sued, if at all, only as partners; and they will be liable as partners for all debts of the banks.

If the act be unconstitutional, then all its provisions for preventing Edition: current; Page: [80] frauds on the part of the bankers, are void, and the directors can commit all manner of frauds against both bill holders and stockholders, and no redress can be had, unless under the laws of the States relative to swindling; and even that redress would most likely prove of no practical value.

The directors, having obtained their bills of the United States Treasurer, by a deposit of bonds, would loan the bills to themselves, or to men confederated with them. They would then demand the bonds of the Treasurer, on the grounds that the Act was unconstitutional; that the United States were not holden for the bills, and had no lien upon the bonds, and were not even responsible for the safe keeping of the bonds. The Treasurer, unless he wished to embezzle the bonds himself, would give them up. If he should not give them up willingly, suit would be brought to compel him.

Having got the bonds, the directors would dispose of them, and put the proceeds in their pockets.

Having thus embezzled the capital and assets of a bank, if they should be indicted under the bank act itself, they would plead that the act was unconstitutional, and that there was, in law, no corporation. After one, two, or three years delay, that plea would be sustained, unless the court should overrule the opinion in McCulloch vs. Maryland, which is not to be expected.

On the other hand, if they should be indicted under the State laws, they would plead that the bank act was constitutional; and that they were liable only under that act. In this way they would tie up the case with law questions for as long a period as possible.

And whether indicted in the United States or in the State courts, they would make all possible delay, under pretence of procuring testimony as to their having made loans in good faith, but on securities which unexpectedly proved worthless. And before a decision should be reached, the funds would have all gone to the four winds.

The result would be that neither the stockholders nor the bill Edition: current; Page: [81] holders would ever obtain any redress of any practical value. If the bill holders should ever obtain any redress, they would obtain it only by suing those innocent stockholders, who would have already been swindled out of their capital.

Nobody but dupes and swindlers would ever think either of investing in such banks, or of taking their bills.

6. Even if the Act in general were constitutional, the sixty-first section, declaring that any bank, incorporated under State laws, may “become an association under the provisions of this act,” provided “the owners of two thirds of the capital stock of such banking corporation or association” shall consent to the change, would be unconstitutional.

When a body of men form themselves into a banking company, under a State charter, they legally enter into a contract with each other, that the capital, thus invested, shall be held and managed under that charter; and of course under that charter alone. For “the owners of two thirds the capital stock” of such a bank to divert that capital from the uses agreed upon, and invest it in banking under a charter granted by Congress, to which all the stockholders have not agreed, is a breach of contract, and a breach of trust, as against all non-concurring stockholders. And Congress have no more authority to authorize such a breach of contract, or trust, and such a diversion of the capital from the objects agreed upon, than they have to authorize “the owners of two thirds the capital stock” of a manufacturing company, an insurance company, or a church, to divert the whole capital from the objects for which it was contributed, and appropriate it to the establishment of a race course, a theatre, or a distillery.

And if the directors of a State bank should thus divert its funds, they would be liable, possibly to indictment, and certainly in civil actions for damages, on the part of the non-concurring stockholders.

There are some other provisions in the act, richly worthy of notice, as exhibiting the legal acumen, and the business sagacity, Edition: current; Page: [82] of the Congress that passed it. But space cannot here be spared to present them.

The bill now before Congress,* (and which is likely to pass, as being necessary to force the National Bank Act upon the country,) prohibiting, after one year, all banking, (issuing bills for circulation,) except by bankers, “authorized thereto by act of Congress,” is not merely unconstitutional; it is villainous. The Constitution does not require the people of this country to get permits from Congress for carrying on any innocent and lawful business. Nor does it give Congress any power to suspend all industry and commerce, except by persons “authorized thereto by act of Congress.” If the Constitution did this, then, instead of spending so much blood and treasure to sustain it, we ought, (if it could not be otherwise abolished,) to spend the same blood and treasure to overthrow it. Congress have just as much constitutional power to say that no person shall breathe in this country, “unless authorized thereto by act of Congress,” as they have to say that no man shall carry on the business of a banker, or any other innocent and lawful business, without being first licensed by act of Congress.

Congress have no more constitutional power to prohibit banking, than they have to prohibit farming, manufacturing, or commerce. They have no more power to prohibit banking, than they have to prohibit all the industry and commerce that are carried on by means of bank credits and currency. They have no more constitutional power to say that the people shall have no currency, except such as Congress shall have specially licensed, than they have to say that they shall have no farming utensils, no cattle, horses, sheep, pigs, or poultry, that they shall raise no crops, build no houses, eat no food, wear no clothing, except such as Congress shall have specially licensed. This proposition is so obviously and self-evidently true, that it would be wasting words and paper to expend any argument upon it.

But even if this bill should be considered constitutional, it would have no effect to prohibit the author’s system of banking; because that has been already licensed by act of Congress—that is, by the copyright act. And that act is unquestionably constitutional; for it is expressly authorized by the Constitution. That license, therefore, must stand good, unless Congress commit a deliberate breach of faith. And even if Congress were to commit a deliberate breach of faith, by prohibiting the author’s system, it would still be a question whether rights once vested and guaranteed, by a law that was unquestionably constitutional, could be destroyed by an act of wanton perfidy and spoliation? Whether that would not be “depriving a person of property without due process of law?” And whether it were not therefore expressly forbidden by the Constitution?

The other section of the same bill, imposing a discriminating tax of one-fourth of one per cent. a month upon all bills in circulation, issued by banks or bankers not “thereto authorized by act of Congress,” is equally unconstitutional and villainous with the section that is to prohibit all banking after one year. Inasmuch as Congress have no power to require the people to get permits from Congress for carrying on any innocent and lawful business, they have no power to impose a discriminating tax upon those who do not get such permits.

If Congress can impose a discriminating tax upon all who do not get permits from Congress to carry on their business, all the industry and commerce of the country may be brought under the arbitrary control of Congress; and permits to carry them on may be given out as privileges only to Congressional favorites.

There is no reason why bankers should be singled out for all this unconstitutional, absurd, tyrannical, and villainous legislation. By furnishing credit and currency to keep industry and commerce in motion, they do more for the wealth of the country than any other equal number of men, unless it be inventors. Their business is intrinsically as innocent and lawful as that of any other class of persons. The only complaints that can be made against Edition: current; Page: [84] them, are, that there are not half enough of them, and that their systems of banking are not good ones. But these faults are not the faults of the bankers themselves, but of the laws that limit the number of bankers, and prohibit the adoption of other and better systems.

All the laws that are necessary in regard to banking, are such as are applicable to all other business, viz.: laws giving inventors the benefit of their inventions, and laws compelling the bankers to fulfil their contracts, and punishing their frauds and crimes. Such laws as these will give us the benefit of the best systems of banking that men can invent; and those are the best that, in the nature of things, we can have.

CHAPTER VII.: EXCHANGES UNDER THE AUTHOR’S SYSTEM.

It will be very easy, under the author’s system, to give the currency a uniform value in all parts of the country; as follows:

In the first place, where the capital shall consist of mortgages, it will be very easy for all the banks, in any State, to make their solvency known to each other. There would be so many banks, that some system would naturally be adopted for this purpose.

Perhaps this system would be, that a standing committee, appointed by the banks, would be established, in each State, to whom each bank in the State would be required to produce satisfactory evidence of its solvency, before its bills should be received by the other banks of the State.

When the banks, or any considerable number of the banks, of any particular State—Missouri for example—shall have made themselves so far acquainted with each other’s solvency, as to be ready to receive each other’s bills, they will be ready to make a still further arrangement for their mutual benefit, viz.: to unite in establishing one general agency in St. Louis, another in New Orleans, another in Chicago, another in Cincinnati, another in New York, another in Philadelphia, another in Baltimore, and another in Boston, where the bills of all these Missouri banks shall be redeemed. And thus the bills of all Missouri banks, that belonged to the Association, would be placed at par at all the great commercial points.

Each bank, belonging to the Association, might print, on the back of its bills, “Redeemable at the Missouri Agencies, in St. Louis, Chicago, Cincinnati,” &c.

In this way all the banks of each State might unite to establish agencies in all the large cities for the redemption of their bills.

The banks might safely make permanent arrangements of this kind with each other; because the permanent solvency of all the banks might be relied on.

The permanent solvency of all the banks might be relied on, because, under this system, a bank, (whose capital consists of mortgages,) once solvent, is necessarily forever solvent, unless in contingencies so utterly improbable as not to need to be taken into account. In fact, in the ordinary course of things, every bank would be growing more and more solvent, because in the ordinary course of things, the mortgaged property would be constantly rising in value, as the wealth and population of the country should increase. The exceptions to this rule would be so rare as to be unworthy of notice.

There is, therefore, no difficulty in putting the currency, furnished by each State, at par throughout the United States.

At the general agencies in the great cities, the redemption would doubtless generally be made in specie on demand, because, at such points, especially in cities on the seaboard, there would always be an abundance of specie in the market as merchandize; and it would, therefore, be both for the convenience and interest of the banks to redeem in specie on demand, rather than by a conditional transfer of a portion of their capital, and then paying interest on that capital until it should be redeemed with specie.

Where rail-roads were used as capital, all the banks in the United States could form one Association, of the kind just mentioned, to establish agencies at all the great commercial points, for the redemption of their bills.

Where United States Stocks should be used as capital, the same system could be safely adopted, for redeeming their currency in all the great cities, as where mortgages were the capital; because, although United States stocks are below par of specie, yet every bank, using them as capital, could know that the currency Edition: current; Page: [87] of every other bank of the same kind was worth at least as much as the stocks it should represent. Since there would be always a dollar of the stocks in bank, for every dollar of currency that could be put in circulation, the banks could always know the lowest possible value of each other’s currency, by knowing the market value of the stocks it should represent.

The currency might sometimes be worth more than the capital, dollar for dollar; because, although the capital (U. S. stocks) should be below par of specie in the market, yet the bank might have assets (in the shape of notes discounted, and profits accumulated) equal, or more than equal, to its capital. And these assets must all be exhausted, in the redemption of its bills with specie, before its bills could be worth less than par of specie. But suppose all these assets exhausted, the currency would still be worth as much as the capital, dollar for dollar; because the capital itself can be demanded for the currency, if specie be refused. Although, therefore, the currency of banks, based upon United States stocks, might be sometimes worth more than the stocks, (when these were below par of specie,) it can never be worth less than the stocks. And as the market value of the stocks would be always known, the lowest possible value of the currency (for the time being) could always be known. The bills of a bank, based upon United States stocks, would, therefore, be worth, all over the country, at least as much as the stocks.

It is doubtful, however, whether currency of that kind, always liable to be below par of specie, and variable at that, could be made a desirable one. It would, therefore, probably not be expedient to use United States stocks as banking capital, on the plan of issuing a dollar of currency for a dollar of stocks. The better way of using the stocks as banking capital, while they are so much below par of specie, would probably be to put in two dollars of bonds to make one of banking capital. This would make the bank capital worth a little more than par of specie; and would, of course, make the currency worth par of specie.

Using United States stocks in this way—that is, using two Edition: current; Page: [88] dollars of bonds to make one of banking capital—the United States bonds now extant, and those hereafter to be issued, would probably afford a basis for as much currency as the banks could keep in circulation; especially if mortgages or rail-roads should be used as a basis in competition with the bonds.

If, however, the stocks should ever rise to par, and stand there permanently, and it should be found desirable to issue more currency upon them, the banks using two dollars of bonds for one of capital could be dissolved, and new ones formed, that should use the stocks at their par value, and issue currency upon them accordingly.

APPENDIX.

THOMAS DREW vs. JOHN M. CLARK.

INTRODUCTORY.

The question of treason is distinct from that of slavery; and is the same that it would have been, if free States, instead of slave States, had seceded.

On the part of the North, the war was carried on, not to liberate the slaves, but by a government that had always perverted and violated the Constitution, to keep the slaves in bondage; and was still willing to do so, if the slaveholders could be thereby induced to stay in the Union.

The principle, on which the war was waged by the North, was simply this: That men may rightfully be compelled to submit to, and support, a government that they do not want; and that resistance, on their part, makes them traitors and criminals.

No principle, that is possible to be named, can be more self-evidently false than this; or more self-evidently fatal to all political freedom. Yet it triumphed in the field, and is now assumed to be established. If it be really established, the number of slaves, instead of having been diminished by the war, has been greatly increased; for a man, thus subjected to a government that he does not want, is a slave. And there is no difference, in principle—but only in degree—between political and chattel slavery. The former, no less than the latter, denies a man’s ownership of himself and the products of his labor; and Edition: current; Page: [iv] asserts that other men may own him, and dispose of him and his property, for their uses, and at their pleasure.

Previous to the war, there were some grounds for saying that—in theory, at least, if not in practice—our government was a free one; that it rested on consent. But nothing of that kind can be said now, if the principle on which the war was carried on by the North, is irrevocably established.

If that principle be not the principle of the Constitution, the fact should be known. If it be the principle of the Constitution, the Constitution itself should be at once overthrown.

I.

Notwithstanding all the proclamations we have made to mankind, within the last ninety years, that our government rested on consent, and that that was the only rightful basis on which any government could rest, the late war has practically demonstrated that our government rests upon force—as much so as any government that ever existed.

The North has thus virtually said to the world: It was all very well to prate of consent, so long as the objects to be accomplished were to liberate ourselves from our connexion with England, and also to coax a scattered and jealous people into a great national union; but now that those purposes have been accomplished, and the power of the North has become consolidated, it is sufficient for us—as for all governments—simply to say: Our power is our right.

In proportion to her wealth and population, the North has probably expended more money and blood to maintain her power over an unwilling people, than any other government ever did. And in her estimation, it is apparently the chief glory of her success, and an adequate compensation for all her own losses, and an ample justification for all her devastation and carnage of the South, that all pretence of any necessity for consent to the perpetuity or power of the government, is (as she thinks) forever expunged from the minds of the people. In short, the North Edition: current; Page: [6] exults beyond measure in the proof she has given, that a government, professedly resting on consent, will expend more life and treasure in crushing dissent, than any government, openly founded on force, has ever done.

And she claims that she has done all this in behalf of liberty! In behalf of free government! In behalf of the principle that government should rest on consent!

If the successors of Roger Williams, within a hundred years after their State had been founded upon the principle of free religious toleration, and when the Baptists had become strong on the credit of that principle, had taken to burning heretics with a fury never before seen among men; and had they finally gloried in having thus suppressed all question of the truth of the State religion; and had they further claimed to have done all this in behalf of freedom of conscience, the inconsistency between profession and conduct would scarcely have been greater than that of the North, in carrying on such a war as she has done, to compel men to live under and support a government that they did not want; and in then claiming that she did it in behalf of the principle that government should rest on consent.

This astonishing absurdity and self-contradiction are to be accounted for only by supposing, either that the lusts of fame, and power, and money, have made her utterly blind to, or utterly reckless of, the inconsistency and enormity of her conduct; or that she has never even understood what was implied in a government’s resting on consent. Perhaps this last explanation is the true one. In charity to human nature, it is to be hoped that it is.

II.

What, then, is implied in a government’s resting on consent?

If it be said that the consent of the strongest party, in a nation, is all that is necessary to justify the establishment of a government that shall have authority over the weaker party, it Edition: current; Page: [7] may be answered that the most despotic governments in the world rest upon that very principle, viz: the consent of the strongest party. These governments are formed simply by the consent or agreement of the strongest party, that they will act in concert in subjecting the weaker party to their dominion. And the despotism, and tyranny, and injustice of these governments consist in that very fact. Or at least that is the first step in their tyranny; a necessary preliminary to all the oppressions that are to follow.

If it be said that the consent of the most numerous party, in a nation, is sufficient to justify the establishment of their power over the less numerous party, it may be answered:

First. That two men have no more natural right to exercise any kind of authority over one, than one has to exercise the same authority over two. A man’s natural rights are his own, against the whole world; and any infringement of them is equally a crime, whether committed by one man, or by millions; whether committed by one man, calling himself a robber, (or by any other name indicating his true character,) or by millions, calling themselves a government.

Second. It would be absurd for the most numerous party to talk of establishing a government over the less numerous party, unless the former were also the strongest, as well as the most numerous; for it is not to be supposed that the strongest party would ever submit to the rule of the weaker party, merely because the latter were the most numerous. And as matter of fact, it is perhaps never that governments are established by the most numerous party. They are usually, if not always, established by the less numerous party; their superior strength consisting in their superior wealth, intelligence, and ability to act in concert.

Third. Our Constitution does not profess to have been established simply by the majority; but by “the people;” the minority, as much as the majority.

Fourth. If our fathers, in 1776, had acknowledged the principle that a majority had the right to rule the minority, we should never have become a nation; for they were in a small minority, as compared with those who claimed the right to rule over them.

Fifth. Majorities, as such, afford no guarantees for justice. They are men of the same nature as minorities. They have the same passions for fame, power, and money, as minorities; and are liable and likely to be equally—perhaps more than equally, because more boldly—rapacious, tyrannical and unprincipled, if intrusted with power. There is no more reason, then, why a man should either sustain, or submit to, the rule of a majority, than of a minority. Majorities and minorities cannot rightfully be taken at all into account in deciding questions of justice. And all talk about them, in matters of government, is mere absurdity. Men are dunces for uniting to sustain any government, or any laws, except those in which they are all agreed. And nothing but force and fraud compel men to sustain any other. To say that majorities, as such, have a right to rule minorities, is equivalent to saying that minorities have, and ought to have, no rights, except such as majorities please to allow them.

Sixth. It is not improbable that many or most of the worst of governments—although established by force, and by a few, in the first place—come, in time, to be supported by a majority. But if they do, this majority is composed, in large part, of the most ignorant, superstitious, timid, dependent, servile, and corrupt portions of the people; of those who have been over-awed by the power, intelligence, wealth, and arrogance; of those who have been deceived by the frauds; and of those who have been corrupted by the inducements, of the few who really constitute the government. Such majorities, very likely, could be found in half, perhaps in nine-tenths, of all the countries on the globe. What do they prove? Nothing but the tyranny and corruption of the very governments that have reduced so large portions of Edition: current; Page: [9] the people to their present ignorance, servility, degradation, and corruption; an ignorance, servility, degradation, and corruption that are best illustrated in the simple fact that they do sustain the governments that have so oppressed, degraded, and corrupted them. They do nothing towards proving that the governments themselves are legitimate; or that they ought to be sustained, or even endured, by those who understand their true character. The mere fact, therefore, that a government chances to be sustained by a majority, of itself proves nothing that is necessary to be proved, in order to know whether such government should be sustained, or not.

Seventh. The principle that the majority have a right to rule the minority, practically resolves all government into a mere contest between two bodies of men, as to which of them shall be masters, and which of them slaves; a contest, that—however bloody—can, in the nature of things, never be finally closed, so long as man refuses to be a slave.

III.

But to say that the consent of either the strongest party, or the most numerous party, in a nation, is a sufficient justification for the establishment or maintenance of a government that shall control the whole nation, does not obviate the difficulty. The question still remains, how comes such a thing as “a nation” to exist? How do many millions of men, scattered over an extensive territory—each gifted by nature with individual freedom; required by the law of nature to call no man, or body of men, his masters; authorized by that law to seek his own happiness in his own way, to do what he will with himself and his property, so long as he does not trespass upon the equal liberty of others; authorized also, by that law, to defend his own rights, and redress his own wrongs; and to go to the assistance and defence of any Edition: current; Page: [10] of his fellow men who may be suffering any kind of injustice—how do many millions of such men come to be a nation, in the first place? How is it that each of them comes to be stripped of all his natural, God-given rights, and to be incorporated, compressed, compacted, and consolidated into a mass with other men, whom he never saw; with whom he has no contract; and towards many of whom he has no sentiments but fear, hatred, or contempt? How does he become subjected to the control of men like himself, who, by nature, had no authority over him; but who command him to do this, and forbid him to do that, as if they were his sovereigns, and he their subject; and as if their wills and their interests were the only standards of his duties and his rights; and who compel him to submission under peril of confiscation, imprisonment, and death?

Clearly all this is the work of force, or fraud, or both.

By what right, then, did we become “a nation?” By what right do we continue to be “a nation?” And by what right do either the strongest, or the most numerous, party, now existing within the territorial limits, called “The United States,” claim that there really is such “a nation” as the United States? Certainly they are bound to show the rightful existence of “a nation,” before they can claim, on that ground, that they themselves have a right to control it; to seize, for their purposes, so much of every man’s property within it, as they may choose; and, at their discretion, to compel any man to risk his own life, or take the lives of other men, for the maintenance of their power.

To speak of either their numbers, or their strength, is not to the purpose. The question is by what right does the nation exist? And by what right are so many atrocities committed by its authority? or for its preservation?

The answer to this question must certainly be, that at least such a nation exists by no right whatever.

We are, therefore, driven to the acknowledgment that nations and governments, if they can rightfully exist at all, can exist only by consent.

IV.

The question, then, returns, What is implied in a government’s resting on consent?

Manifestly this one thing (to say nothing of others) is necessarily implied in the idea of a government’s resting on consent, viz: the separate, individual consent of every man who is required to contribute, either by taxation or personal service, to the support of the government. All this, or nothing, is necessarily implied, because one man’s consent is just as necessary as any other man’s. If, for example, A claims that his consent is necessary to the establishment or maintenance of government, he thereby necessarily admits that B’s and every other man’s are equally necessary; because B’s and every other man’s rights are just as good as his own. On the other hand, if he denies that B’s or any other particular man’s consent is necessary, he thereby necessarily admits that neither his own, nor any other man’s is necessary; and that government need not be founded on consent at all.

There is, therefore, no alternative but to say, either that the separate, individual consent of every man, who is required to aid, in any way, in supporting the government, is necessary, or that the consent of no one is necessary.

Clearly this individual consent is indispensable to the idea of treason; for if a man has never consented or agreed to support a government, he breaks no faith in refusing to support it. And if he makes war upon it, he does so as an open enemy, and not as a traitor—that is, as a betrayer, or treacherous friend.

All this, or nothing, was necessarily implied in the Declaration made in 1776. If the necessity for consent, then announced, was a sound principle in favor of three millions of men, it was an equally sound one in favor of three men, or of one man. If the principle was a sound one in behalf of men living on a separate continent, it was an equally sound one in behalf of a man living on a separate farm, or in a separate house.

Moreover, it was only as separate individuals, each acting for himself, and not as members of organized governments, that the three millions declared their consent to be necessary to their support of a government; and, at the same time, declared their dissent to the support of the British Crown. The governments, then existing in the Colonies, had no constitutional power, as governments, to declare the separation between England and America. On the contrary, those governments, as governments, were organized under charters from, and acknowledged allegiance to, the British Crown. Of course the British king never made it one of the chartered or constitutional powers of those governments, as governments, to absolve the people from their allegiance to himself. So far, therefore, as the Colonial Legislatures acted as revolutionists, they acted only as so many individual revolutionists, and not as constitutional legislatures. And their representatives at Philadelphia, who first declared Independence, were, in the eye of the constitutional law of that day, simply a committee of Revolutionists, and in no sense constitutional authorities, or the representatives of constitutional authorities.

It was also, in the eye of the law, only as separate individuals, each acting for himself, and exercising simply his natural rights as an individual, that the people at large assented to, and ratified the Declaration.

It was also only as so many individuals, each acting for himself, and exercising simply his natural rights, that they revolutionized the constitutional character of their local governments, (so as to exclude the idea of allegiance to Great Britain); changing their forms only as and when their convenience dictated.

The whole Revolution, therefore, as a Revolution, was declared and accomplished by the people, acting separately as individuals, and exercising each his natural rights, and not by their governments in the exercise of their constitutional powers.

It was, therefore, as individuals, and only as individuals, each acting for himself alone, that they declared that their consent—that is, their individual consent, for each one could consent only Edition: current; Page: [13] for himself—was necessary to the creation or perpetuity of any government that they could rightfully be called on to support.

In the same way each declared, for himself, that his own will, pleasure, and discretion were the only authorities he had any occasion to consult, in determining whether he would any longer support the government under which he had always lived. And if this action of each individual were valid and rightful when he had so many other individuals to keep him company, it would have been, in the view of natural justice and right, equally valid and rightful, if he had taken the same step alone. He had the same natural right to take up arms alone to defend his own property against a single tax-gatherer, that he had to take up arms in company with three millions of others, to defend the property of all against an army of tax-gatherers.

Thus the whole Revolution turned upon, asserted, and, in theory, established, the right of each and every man, at his discretion, to release himself from the support of the government under which he had lived. And this principle was asserted, not as a right peculiar to themselves, or to that time, or as applicable only to the government then existing; but as a universal right of all men, at all times, and under all circumstances.

George the Third called our ancestors traitors for what they did at that time. But they were not traitors in fact, whatever he or his laws may have called them. They were not traitors in fact, because they betrayed nobody, and broke faith with nobody. They were his equals, owing him no allegiance, obedience, nor any other duty, except such as they owed to mankind at large. Their political relations with him had been purely voluntary. They had never pledged their faith to him that they would continue these relations any longer than it should please them to do so; and therefore they broke no faith in parting with him. They simply exercised their natural right of saying to him, and to the English people, that they were under no obligation to continue their political connexion with them, and that, for reasons of their own, they chose to dissolve it.

What was true of our ancestors, is true of revolutionists in general. The monarchs and governments, from whom they choose to separate, attempt to stigmatize them as traitors. But they are not traitors in fact; inasmuch as they betray, and break faith with, no one. Having pledged no faith, they break none. They are simply men, who, for reasons of their own—whether good or bad, wise or unwise, is immaterial—choose to exercise their natural right of dissolving their connexion with the governments under which they have lived. In doing this, they no more commit the crime of treason—which necessarily implies treachery, deceit, breach of faith—than a man commits treason when he chooses to leave a church, or any other voluntary association, with which he has been connected.

This principle was a true one in 1776. It is a true one now. It is the only one on which any rightful government can rest. It is the one on which the Constitution itself professes to rest. If it does not really rest on that basis, it has no right to exist; and it is the duty of every man to raise his hand against it.

If the men of the Revolution designed to incorporate in the Constitution the absurd ideas of allegiance and treason, which they had once repudiated, against which they had fought, and by which the world had been enslaved, they thereby established for themselves an indisputable claim to the disgust and detestation of all mankind.

In subsequent numbers, the author hopes to show that, under the principle of individual consent, the little government that mankind need, is not only practicable, but natural and easy; and that the Constitution of the United States authorizes no government, except one depending wholly on voluntary support.

I.

The Constitution says:

The meaning of this is simply: We, the people of the United States, acting freely and voluntarily as individuals, consent and agree that we will coöperate with each other in sustaining such a government as is provided for in this Constitution.

The necessity for the consent of “the people” is implied in this declaration. The whole authority of the Constitution rests upon it. If they did not consent, it was of no validity. Of course it had no validity, except as between those who actually consented. No one’s consent could be presumed against him, without his actual consent being given, any more than in the case of any other contract to pay money, or render service. And to make it binding upon any one, his signature, or other positive evidence of consent, was as necessary as in the case of any other contract. If the instrument meant to say that any of “the people of the United States” would be bound by it, who Edition: current; Page: [4] did not consent, it was a usurpation and a lie. The most that can be inferred from the form, “We, the people,” is, that the instrument offered membership to all “the people of the United States;” leaving it for them to accept or refuse it, at their pleasure.

The agreement is a simple one, like any other agreement. It is the same as one that should say: We, the people of the town of A—, agree to sustain a church, a school, a hospital, or a theatre, for ourselves and our children.

Such an agreement clearly could have no validity, except as between those who actually consented to it. If a portion only of “the people of the town of A—,” should assent to this contract, and should then proceed to compel contributions of money or service from those who had not consented, they would be mere robbers; and would deserve to be treated as such.

Neither the conduct nor the rights of these signers would be improved at all by their saying to the dissenters: We offer you equal rights with ourselves, in the benefits of the church, school, hospital, or theatre, which we propose to establish, and equal voice in the control of it. It would be a sufficient answer for the others to say: We want no share in the benefits, and no voice in the control, of your institution; and will do nothing to support it.

The number who actually consented to the Constitution of the United States, at the first, was very small. Considered as the act of the whole people, the adoption of the Constitution was the merest farce and imposture, binding upon nobody.

The women, children, and blacks, of course, were not asked to give their consent. In addition to this, there were, in nearly or quite all the States, property qualifications that excluded probably one half, two thirds, or perhaps even three fourths, of the white male adults from the right of suffrage. And of those who were allowed that right, we know not how many exercised it.

Furthermore, those who originally agreed to the Constitution, could thereby bind nobody that should come after them. They could contract for nobody but themselves. They had no more Edition: current; Page: [5] natural right or power to make political contracts, binding upon succeeding generations, than they had to make marriage or business contracts binding upon them.

Still further. Even those who actually voted for the adoption of the Constitution, did not pledge their faith for any specific time; since no specific time was named, in the Constitution, during which the association should continue. It was, therefore, merely an association during pleasure; even as between the original parties to it. Still less, if possible, has it been any thing more than a merely voluntary association, during pleasure, between the succeeding generations, who have never gone through, as their fathers did, with so much even as any outward formality of adopting it, or of pledging their faith to support it. Such portions of them as pleased, and as the States permitted to vote, have only done enough, by voting and paying taxes, (and unlawfully and tyrannically extorting taxes from others,) to keep the government in operation for the time being. And this, in the view of the Constitution, they have done voluntarily, and because it was for their interest, or pleasure, and not because they were under any pledge or obligation to do it. Any one man, or any number of men, have had a perfect right, at any time, to refuse his or their further support; and nobody could rightfully object to his or their withdrawal.

There is no escape from these conclusions, if we say that the adoption of the Constitution was the act of the people, as individuals, and not of the States, as States. On the other hand, if we say that the adoption was the act of the States, as States, it necessarily follows that they had the right to secede at pleasure, inasmuch as they engaged for no specific time.

The consent, therefore, that has been given, whether by individuals, or by the States, has been, at most, only a consent for the time being; not an engagement for the future. In truth, in the case of individuals, their actual voting is not to be taken as proof of consent, even for the time being. On the contrary, it is to be considered that, without his consent having ever been asked, a Edition: current; Page: [6] man finds himself environed by a government that he cannot resist; a government that forces him to pay money, render service, and forego the exercise of many of his natural rights, under peril of weighty punishments. He sees, too, that other men practise this tyranny over him by the use of the ballot. He sees further that, if he will but use the ballot himself, he has some chance of relieving himself from this tyranny of others, by subjecting them to his own. In short, he finds himself, without his consent, so situated that, if he use the ballot, he may become a master; if he does not use it, he must become a slave. And he has no other alternative than these two. In self-defence, he attempts the former. His case is analogous to that of a man who has been forced into battle, where he must either kill others, or be killed himself. Because, to save his own life in battle, a man attempts to take the lives of his opponents, it is not to be inferred that the battle is one of his own choosing. Neither in contests with the ballot—which is a mere substitute for a bullet—because, as his only chance of self-preservation, a man uses a ballot, is it to be inferred that the contest is one into which he voluntarily entered; that he voluntarily set up all his own natural rights, as a stake against those of others, to be lost or won by the mere power of numbers. On the contrary, it is to be considered that, in an exigency, into which he had been forced by others, and in which no other means of self-defence offered, he, as a matter of necessity, used the only one that was left to him.

Doubtless the most miserable of men, under the most oppressive government in the world, if allowed the ballot, would use it, if they could see any chance of thereby ameliorating their condition. But it would not therefore be a legitimate inference that the government itself, that crushes them, was one which they had voluntarily set up, or ever consented to.

Therefore a man’s voting under the Constitution of the United States, is not to be taken as evidence that he ever freely assented to the Constitution, even for the time being. Consequently we have no proof that any very large portion, even of the actual Edition: current; Page: [7] voters of the United States, ever really and voluntarily consented to the Constitution, even for the time being. Nor can we ever have such proof, until every man is left perfectly free to consent, or not, without thereby subjecting himself or his property to injury or trespass from others.

II.

The Constitution says:

This is the only definition of treason given by the Constitution, and it is to be interpreted, like all other criminal laws, in the sense most favorable to liberty and justice. Consequently the treason here spoken of, must be held to be treason in fact, and not merely something that may have been falsely called by that name.

To determine, then, what is treason in fact, we are not to look to the codes of Kings, and Czars, and Kaisers, who maintain their power by force and fraud; who contemptuously call mankind their “subjects;” who claim to have a special license from Heaven to rule on earth; who teach that it is a religious duty of mankind to obey them; who bribe a servile and corrupt priesthood to impress these ideas upon the ignorant and superstitious; who spurn the idea that their authority is derived from, or dependent at all upon, the consent of their people; and who attempt to defame, by the false epithet of traitors, all who assert their own rights, and the rights of their fellow men, against such usurpations.

Instead of regarding this false and calumnious meaning of the word treason, we are to look at its true and legitimate meaning in our mother tongue; at its use in common life; and at what would necessarily be its true meaning in any other contracts, or articles Edition: current; Page: [8] of association, which men might voluntarily enter into with each other.

The true and legitimate meaning of the word treason, then, necessarily implies treachery, deceit, breach of faith. Without these, there can be no treason. A traitor is a betrayer—one who practices injury, while professing friendship. Benedict Arnold was a traitor, solely because, while professing friendship for the American cause, he attempted to injure it. An open enemy, however criminal in other respects, is no traitor.

Neither does a man, who has once been my friend, become a traitor by becoming an enemy, if before doing me an injury, he gives me fair warning that he has become an enemy; and if he makes no unfair use of any advantage which my confidence, in the time of our friendship, had placed in his power.

For example, our fathers—even if we were to admit them to have been wrong in other respects—certainly were not traitors in fact, after the fourth of July, 1776; since on that day they gave notice to the King of Great Britain that they repudiated his authority, and should wage war against him. And they made no unfair use of any advantages which his confidence had previously placed in their power.

It cannot be denied that, in the late war, the Southern people proved themselves to be open and avowed enemies, and not treacherous friends. It cannot be denied that they gave us fair warning that they would no longer be our political associates, but would, if need were, fight for a separation. It cannot be alleged that they made any unfair use of advantages which our confidence, in the time of our friendship, had placed in their power. Therefore they were not traitors in fact: and consequently not traitors within the meaning of the Constitution.

Furthermore, men are not traitors in fact, who take up arms against the government, without having disavowed allegiance to it, provided they do it, either to resist the usurpations of the government, or to resist what they sincerely believe to be such usurpations.

It is a maxim of law that there can be no crime without a criminal intent. And this maxim is as applicable to treason as to any other crime. For example, our fathers were not traitors in fact, for resisting the British Crown, before the fourth of July, 1776—that is, before they had thrown off allegiance to him—provided they honestly believed that they were simply defending their rights against his usurpations. Even if they were mistaken in their law, that mistake, if an innocent one, could not make them traitors in fact.

For the same reason, the Southern people, if they sincerely believed—as it has been extensively, if not generally, conceded, at the North, that they did—in the so-called constitutional theory of “State Rights,” did not become traitors in fact, by acting upon it; and consequently not traitors within the meaning of the Constitution.

III.

The Constitution does not say who will become traitors, by “levying war against the United States, or adhering to their enemies, giving them aid and comfort.”

It is, therefore, only by inference, or reasoning, that we can know who will become traitors by these acts.

Certainly if Englishmen, Frenchmen, Austrians, or Italians, making no professions of support or friendship to the United States, levy war against them, or adhere to their enemies, giving them aid and comfort, they do not thereby make themselves traitors, within the meaning of the Constitution; and why? Solely because they would not be traitors in fact. Making no professions of support or friendship, they would practice no treachery, deceit, or breach of faith. But if they should voluntarily enter either the civil or military service of the United States, and pledge fidelity to them, (without being naturalized,) and should then betray the trusts reposed in them, either by turning their guns against the United States, or by giving aid Edition: current; Page: [10] and comfort to their enemies, they would be traitors in fact; and therefore traitors within the meaning of the Constitution; and could be lawfully punished as such.

There is not, in the Constitution, a syllable that implies that persons, born within the territorial limits of the United States, have allegiance imposed upon them on account of their birth in the country, or that they will be judged by any different rule, on the subject of treason, than persons of foreign birth. And there is no power, in Congress, to add to, or alter, the language of the Constitution, on this point, so as to make it more comprehensive than it now is. Therefore treason in fact—that is, actual treachery, deceit, or breach of faith—must be shown in the case of a native of the United States, equally as in the case of a foreigner, before he can be said to be a traitor.

Congress have seen that the language of the Constitution was insufficient, of itself, to make a man a traitor—on the ground of birth in this country—who levies war against the United States, but practices no treachery, deceit, or breach of faith. They have, therefore—although they had no constitutional power to do so—apparently attempted to enlarge the language of the Constitution on this point. And they have enacted:

It would be a sufficient answer to this enactment to say that it is utterly unconstitutional, if its effect would be to make any man a traitor, who would not have been one under the language of the Constitution alone.

The whole pith of the act lies in the words, “persons owing allegiance to the United States.” But this language really leaves the question where it was before, for it does not attempt to Edition: current; Page: [11] show or declare who does “owe allegiance to the United States;” although those who passed the act, no doubt thought, or wished others to think, that allegiance was to be presumed (as is done under other governments) against all born in this country, (unless possibly slaves).

The Constitution itself, uses no such word as “allegiance,” “sovereignty,” “loyalty,” “subject,” or any other term, such as is used by other governments, to signify the services, fidelity, obedience, or other duty, which the people are assumed to owe to their government, regardless of their own will in the matter. As the Constitution professes to rest wholly on consent, no one can owe allegiance, service, obedience, or any other duty to it, or to the government created by it, except with his own consent.

The word allegiance comes from the Latin words ad and ligo, signifying to bind to. Thus a man under allegiance to a government, is a man bound to it; or bound to yield it support and fidelity. And governments, founded otherwise than on consent, hold that all persons born under them, are under allegiance to them; that is, are bound to render them support, fidelity, and obedience; and are traitors if they resist them.

But it is obvious that, in truth and in fact, no one but himself can bind any one to support any government. And our Constitution admits this fact when it concedes that it derives its authority wholly from the consent of the people. And the word treason is to be understood in accordance with that idea.

It is conceded that a person of foreign birth comes under allegiance to our government only by special voluntary contract. If a native has allegiance imposed upon him, against his will, he is in a worse condition than the foreigner; for the latter can do as he pleases about assuming that obligation. The accepted interpretation of the Constitution, therefore, makes the foreigner a free person, on this point, while it makes the native a slave.

The only difference—if there be any—between natives and foreigners, in respect of allegiance, is, that a native has a right—offered to him by the Constitution—to come under allegiance to Edition: current; Page: [12] the government, if he so please; and thus entitle himself to membership in the body politic. His allegiance cannot be refused. Whereas a foreigner’s allegiance can be refused, if the government so please.

IV.

The Constitution certainly supposes that the crime of treason can be committed only by man, as an individual. It would be very curious to see a man indicted, convicted, or hanged, otherwise than as an individual; or accused of having committed his treason otherwise than as an individual. And yet it is clearly impossible that any one can be personally guilty of treason, can be a traitor in fact, unless he, as an individual, has in some way voluntarily pledged his faith and fidelity to the government. Certainly no man, or body of men, could pledge it for him, without his consent; and no man, or body of men, have any right to presume it against him, when he has not pledged it himself.

V.

It is plain, therefore, that if, when the Constitution says treason, it means treason—treason in fact, and nothing else—there is no ground at all for pretending that the Southern people have committed that crime. But if, on the other hand, when the Constitution says treason, it means what the Czar and the Kaiser mean by treason, then our government is, in principle, no better than theirs; and has no claim whatever to be considered a free government.

VI.

One essential of a free government is that it rest wholly on voluntary support. And one certain proof that a government is not free, is that it coerces more or less persons to support it, against their will. All governments, the worst on earth, and the Edition: current; Page: [13] most tyrannical on earth, are free governments to that portion of the people who voluntarily support them. And all governments—though the best on earth in other respects—are nevertheless tyrannies to that portion of the people—whether few or many—who are compelled to support them against their will. A government is like a church, or any other institution, in these respects. There is no other criterion whatever, by which to determine whether a government is a free one, or not, than the single one of its depending, or not depending, solely on voluntary support.

VII.

No middle ground is possible on this subject. Either “taxation without consent is robbery,” or it is not. If it is not, then any number of men, who choose, may at any time associate; call themselves a government; assume absolute authority over all weaker than themselves; plunder them at will; and kill them if they resist. If, on the other hand, “taxation without consent is robbery,” it necessarily follows that every man who has not consented to be taxed, has the same natural right to defend his property against a taxgatherer, that he has to defend it against a highwayman.

VIII.

It is perhaps unnecessary to say that the principles of this argument are as applicable to the State governments, as to the national one.

The opinions of the South, on the subjects of allegiance and treason, have been equally erroneous with those of the North. The only difference between them, has been, that the South has held that a man was (primarily) under involuntary allegiance to the State government; while the North held that he was (primarily) under a similar allegiance to the United States government; whereas, in truth, he was under no involuntary allegiance to either.

IX.

Obviously there can be no law of treason more stringent than has now been stated, consistently with political liberty. In the very nature of things there can never be any liberty for the weaker party, on any other principle; and political liberty always means liberty for the weaker party. It is only the weaker party that is ever oppressed. The strong are always free by virtue of their superior strength. So long as government is a mere contest as to which of two parties shall rule the other, the weaker must always succumb. And whether the contest be carried on with ballots or bullets, the principle is the same; for under the theory of government now prevailing, the ballot either signifies a bullet, or it signifies nothing. And no one can consistently use a ballot, unless he intends to use a bullet, if the latter should be needed to insure submission to the former.

X.

The practical difficulty with our government has been, that most of those who have administered it, have taken it for granted that the Constitution, as it is written, was a thing of no importance; that it neither said what it meant, nor meant what it said; that it was gotten up by swindlers, (as many of its authors doubtless were,) who said a great many good things, which they did not mean, and meant a great many bad things, which they dared not say; that these men, under the false pretence of a government resting on the consent of the whole people, designed to entrap them into a government of a part, who should be powerful and fraudulent enough to cheat the weaker portion out of all the good things that were said, but not meant, and subject them to all the bad things that were meant, but not said. And most of those who have administered the government, have assumed that all these swindling intentions were to be carried into effect, in the place of the written Constitution. Of all these swindles, the Edition: current; Page: [15] treason swindle is the most flagitious. It is the most flagitious, because it is equally flagitious, in principle, with any; and it includes all the others. It is the instrumentality by which all the others are made effective. A government that can at pleasure accuse, shoot, and hang men, as traitors, for the one general offence of refusing to surrender themselves and their property unreservedly to its arbitrary will, can practice any and all special and particular oppressions it pleases.

The result—and a natural one—has been that we have had governments, State and national, devoted to nearly every grade and species of crime that governments have ever practised upon their victims; and these crimes have culminated in a war that has cost a million of lives; a war carried on, upon one side, for chattel slavery, and on the other for political slavery; upon neither for liberty, justice, or truth. And these crimes have been committed, and this war waged, by men, and the descendants of men, who, less than a hundred years ago, said that all men were equal, and could owe neither service to individuals, nor allegiance to governments, except with their own consent.

XI.

No attempt or pretence, that was ever carried into practical operation amongst civilized men—unless possibly the pretence of a “Divine Right,” on the part of some, to govern and enslave others—embodied so much of shameless absurdity, falsehood, impudence, robbery, usurpation, tyranny, and villany of every kind, as the attempt or pretence of establishing a government by consent, and getting the actual consent of only so many as may be necessary to keep the rest in subjection by force. Such a government is a mere conspiracy of the strong against the weak. It no more rests on consent than does the worst government on earth.

What substitute for their consent is offered to the weaker party, whose rights are thus annihilated, struck out of existence, Edition: current; Page: [16] by the stronger? Only this: Their consent is presumed! That is, these usurpers condescendingly and graciously presume that those whom they enslave, consent to surrender their all of life, liberty, and property into the hands of those who thus usurp dominion over them! And it is pretended that this presumption of their consent—when no actual consent has been given—is sufficient to save the rights of the victims, and to justify the usurpers! As well might the highwayman pretend to justify himself by presuming that the traveller consents to part with his money. As well might the assassin justify himself by simply presuming that his victim consents to part with his life. As well might the holder of chattel slaves attempt to justify himself by presuming that they consent to his authority, and to the whips and the robbery which he practises upon them. The presumption is simply a presumption that the weaker party consent to be slaves.

Such is the presumption on which alone our government relies to justify the power it maintains over its unwilling subjects. And it was to establish that presumption as the inexorable and perpetual law of this country, that so much money and blood have been expended.

1. That the law can, in no case whatever, require a man to be sworn until he is legally informed of the subject-matter in regard to which he is to be sworn.

2. That a man cannot lawfully be required to take any oath that he cannot lawfully be required to fulfil.

3. That a man cannot lawfully be compelled to be sworn before any tribunal that has no lawful authority to investigate, by compulsory testimony, the particular subject-matter in regard to which he is to be sworn.

COMMONWEALTH OF MASSACHUSETTS.

The petitioner claims that this Order, on the face of it, discloses no case which the legislature has a right to investigate by compulsory testimony.

It clearly shows no case that is within the judicial power of the legislature or of either branch of it,—that is to say, it is not a summons to testify in any case where the election or qualifications of a member of the House or Senate is to be settled; it is not a summons to testify in any case of impeachment; it is not a summons to testify in any case of the expulsion or punishment of a member of the House or Senate; it is not a summons to testify in any case of alleged contempt that had previously arisen, and which it was within the judicial power of the House or Senate to try and punish by virtue of the constitution, part second, chapter 1, section 3, articles 10 and 11, which are given in the note.*

Furthermore, this Order is not a summons to testify in regard to any matters or acts done in any State office or institution, as for example, the offices of the Secretary, Treasurer or Auditor, or the State Prison, the public jails, the lunatic asylum, the State alms-houses, the Reform School, or any other public institution which is under the immediate control of the legislature.

The only remaining question, then, that can arise as to the legality of this Order, is, whether the legislature has power, by means of compulsory testimony, “to inquire into charges of corruption against corporations, parties and persons.”

The petitioner says that these words utterly fail to present any case, in regard to which the legislature can compel any one to testify, either before the legislature itself, or any of its committees.

The words certainly cannot be said to present any criminal case on the part of either “corporations, parties or persons;” for, if by the word “corruption” was meant legal criminality, it is clear that the case—not being within the special judicial power given to the legislature, or either branch of it—could not lawfully be “inquired into” by the legislature, by means of compulsory testimony, but must go before the regular judicial tribunals: and it has the right to go there unembarrassed and unprejudiced by any investigations or disclosures on the part of the legislature.

If, then, it must be admitted that the word “corruption,” as used in this Order, does not mean any legal criminality, it must be conceded to mean only some one or more other kinds of “corruption,” as for example, moral, religious, political, or even physical “corruption.” And inasmuch as it designates no one kind of “corruption,” and designates no particular “corporations, parties or persons” that are suspected of it, the Order is, on the face of it, a mere wild, roving commission to search for anything and everything, physical, moral, religious and political, which the committee may see fit to designate by the term “corruption,” on the part of any and all “corporations,” such as colleges, academies and churches, as well as railroad, banking, insurance, manufacturing and mining “corporations,” and also on the part of any and all “parties and persons,” men, women and children, within the limits of the Commonwealth.

Under this commission, full inquisition, open or secret, could be made into the physical cleanliness or filthiness, the moral purity or impurity, the religious sincerity or hypocrisy, and the religious and political orthodoxy and heterodoxy, of every individual, and every association of individuals, in the Commonwealth.

No narrower limits than these can be assigned to the investigations of the Committee, if they can act under the Order at all. Don Quixote himself, in the height of his folly, never conceived of an enterprise so absurd and ridiculous as this inugurated by the legislature of Massachusetts, if we are to take this Order as the exponent of their intentions.

Whether the legislature can carry on this illimitable inquiry, by means of merely voluntary testimony, the petitioner is not now concerned to inquire. But that they can carry it on by means of compulsory testimony, he denies. The Senate, on the other hand, insists that the legislature can not only make such inquiry, but also that they can even compel testimony for that purpose. And that is the issue that has been made up between the petitioner and the Senate, and is now before this court.

The constitution (Part II. Chap. 1, Sect. 1, Art. 4,) contains these words:—

This legislative power would seem to be as ample as any reasonable body of legislators could desire. At any rate, it is the utmost that the people of Massachusetts have seen fit to give to their legislature; and if the legislature desire more power, they must ask the people to give them more, by an amendment to the constitution, instead of usurping it themselves.

The constitution, having given this liberal power to the legislature in the making of laws, has been explicit in declaring that the enforcement of these laws upon the people, and all questions as to whether these laws have been violated by the people, shall be determined by the judicial tribunals alone, (except in the few cases where special judicial power is given to the legislature, governor and council.)

And the petitioner insists that all that the constitution requires of the people is, that they shall obey these laws, as interpreted, sanctioned and enforced by the judiciary.

But if, in addition to all this power of making laws, and requiring obedience to them on the part of the people, the legislature can Edition: current; Page: [18] institute inquisitions, either open, or (as in this case) secret, into the moral and religious character, either of the people generally, or of particular individuals, and can compel persons to come before these inquisitorial bodies, and tell everything they may know of their neighbors and fellow-citizens, which can be classed under so indefinite and comprehensive a term as “corruption,” the same to be reported and spread abroad, under the sanction of the legislature, to damage the interests, blacken the reputations and destroy the happiness of persons charged with no violation of law, our government is a thoroughly infamous and detestable one,—such an one as no people could ever reasonably be presumed to have consented to, and such as no people ought to tolerate for a moment.

Such a power on the part of the legislature would be ample to open the floodgates of detraction and slander upon any and all whom the suspicion, prejudice, envy or malice of members of the legislature, or of those of whom they were the tools, might seek to destroy. And all this could be done under the protection of their legislative privileges. Both witnesses and legislators would be under this protection, and consequently free of all liability to answer before the judicial tribunals for their crimes.

If such really be the powers of our legislature, it is certain, though not remarkable, that we have never, until now, had a legislature that saw fit to exercise, or even to assert, these infamous powers with which they were intrusted. That these powers should now be asserted and insisted on, to the extent of sending a man to prison for refusing to become a tool of the legislature in this behalf, is, thank God, a phenomenon as rare as it is disgusting.

The petitioner, then, holds it clear that the legislature have no power, at least by means of compulsory testimony, to institute any general inquisition, either open or secret, into the physical, moral, religious and political purity or “corruption” of the people at large in this Commonwealth.

The only remaining question is, whether they have this right in regard to “corporations.”

On this point the petitioner has only this to say, viz.:—

The petitioner has thus presented his case as he claims it must stand on the Order before quoted, for refusing to obey which he was tried, condemned and imprisoned; and as he therefore claims that it must stand before this court, whatever other testimony, of a subsequent nature, may be attempted to be brought into it.

That Order to appear before the Committee, and give evidence of what he knew relating simply to “charges of corruption against corporations, parties and persons,” was the only legal information he had as to the subject-matter in regard to which he was required to be sworn.

On his first arraignment before the Senate, he asked for a certified copy of the other and original Order under which the Committee was appointed, which he informed the Senate he had never seen, and which he supposed might give him further light as to the subject-matter of the investigation, and consequently as to his duty, or not, to be sworn. He also asked for time in which to consult counsel, and ascertain his rights, all of which appears in the copy of his defence, among the papers now submitted to the court.

But less than twenty-four hours’ time was granted him, and during that time no certified copy of the original Order was furnished him; and he never saw a certified copy of it until after he had been tried, condemned and imprisoned.

He therefore claims that that original Order cannot now be brought into the case under any circumstances whatever.

Even if the court should be of opinion that this original Order, under which the Committee was appointed, would have modified or did modify, the powers of the Committee, so as to give them a legal subject-matter of investigation; or, supposing it to have been seen by the petitioner, that it would have given him ample information of a legal subject-matter of investigation, and thus Edition: current; Page: [21] have imposed upon him the duty of being sworn,—still he says that, inasmuch as he had never seen any certified copy of it, he cannot be said to have been legally informed of its contents, or consequently to have been under any obligation at all in regard to it, unless it were simply to request a certified copy of it, which he did, but was refused until it was too late to be used in his defence.

He therefore had no legal information as to the subject-matter of the investigation, except what was contained simply in the supplementary Order, already given, authorizing the Committee to send for persons and papers.

Since he has been in prison, he has been furnished with a certified copy of the original Order for raising the Committee. It is as follows:

COMMONWEALTH OF MASSACHUSETTS.

“Ordered, That a joint special committee, to consist of five members on the part of the House, with such as the Senate may join, be appointed to inquire if any railroad company, chartered by and receiving aid from this Commonwealth, has paid large sums of money, either to aid legislation in their behalf, or suppress legislation adverse to their corporate interests; and that such committee have power to send for persons and papers.”

“And said committee is also further authorized to inquire if any other railroad company, or other corporation chartered here, or if any other party or person, has, at any time, used any improper means or influence to aid or suppress legislation.”

“The House of Representatives is not the final judge of its own powers and privileges in cases in which the rights and liberties of the subject are concerned; but the legality of its action may be examined and determined by this court. That House is not the legislature, but only a part of it, and is therefore subject in its action to the laws, in common with all other bodies, officers and tribunals within the Commonwealth. Especially is it competent and proper for this court to consider whether its proceedings are in conformity with the Constitution and laws, because, living under a written constitution, no branch or department of the government is supreme; and it is the province and duty of the judicial department to determine, in cases regularly brought before them, whether the powers of any branch of the government, and even those of the legislature in the enactment of laws, have been exercised in conformity with the Constitution, and, if they have not been, to treat their acts as null and void.

“The House of Representatives has the power, under the Constitution, to imprison for contempt; but this power is limited to cases expressly provided for by the Constitution, or to cases where the power is necessarily implied from those constitutional functions and duties, to the performance of which it is essential. The power is directly conferred by the Constitution, chap. 1, sect. 3, arts. 10, 11; and the cases there enumerated are the only ones in which a sentence of imprisonment for a term extending beyond the session of the House can be imposed as a punishment.”

“The House of Representatives has many duties to perform which necessarily require it to receive evidence, and examine witnesses. . . . It may inquire into the doings of corporations which are subject to the control of the legislature, with a view to modify or repeal their charters. . . . It has often occasion to acquire a certain knowledge of facts, in order to the proper performance of legislative duties.”

The first and second numbers of this series were published in 1867. For reasons not necessary to be explained, the sixth is now published in advance of the third, fourth and fifth.

THE CONSTITUTION OF NO AUTHORITY.

See “No Treason, No. 2,” pages 5 and 6.

Suppose it be “the best government on earth,” does that prove its own goodness, or only the badness of all other governments?

The very men who drafted it, never signed it in any way to bind themselves by it, as a contract. And not one of them probably ever would have signed it in any way to bind himself by it, as a contract.

I have personally examined the statute books of the following States, viz.: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Tennessee, Kentucky, Ohio, Michigan, Indians, Illinois, Wisconsin, Texas, Arkansas, Missouri, Iowa, Minnesota, Nebraska, Kansas, Nevada, California, and Oregon, and find that in all these States the English statute has been re-enacted, sometimes with modifications, but generally enlarging its operations, and is now in force.

The following are some of the provisions of the Massachusetts statute:

“No action shall be brought in any of the following cases, that is to say: . . . .

“To charge a person upon a special promise to answer for the debt, default, or misdoings of another: . . . .

“Upon a contract for the sale of lands, tenements, hereditaments, or of any interest in, or concerning them; or

“Upon an agreement that is not to be performed within one year from the writing thereof:

“Unless the promise, contract, or agreement, upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged therewith, or by some person thereunto by him awfully authorized: . . . .

“No contract for the sale of goods, wares, or merchandise, for the price of fifty dollars or more, shall be good or valid, unless the purchaser accepts and receives part of the goods so sold, or gives something in earnest to bind the bargain, or in part payment; or unless some note or memorandum in writing of the bargain is made and signed by the party to be charged thereby, or by some person thereunto by him lawfully authorized.”

And this two-thirds vote may be but two-thirds of a quorum—that is two-thirds of a majority—instead of two-thirds of the whole.

Of what appreciable value is it to any man, as an individual, that he is allowed a voice in choosing these public masters? His voice is only one of several millions.

A

NEW BANKING SYSTEM

the

NEEDFUL CAPITAL FOR REBUILDING THE BURNT DISTRICT.

By LYSANDER SPOONER.

BOSTON:

SOLD BY A. WILLIAMS & CO.

135 Washington Street.

1873

Entered according to Act of Congress, in the year 1873, By LYSANDER SPOONER, in the office of the Librarian of Congress, at Washington.

Printed by Warren Richardson, 112 Washington St.

CONTENTS.

• Chapter I.—A New Banking System, - page 5
• Chapter II.—Specie Payments, - - 12
• Chapter III.—No Inflation of Prices, - 21
• Chapter IV.—Security of the System, 35
• Chapter V.—The System as a Credit System, 41
• Chapter VI.—Amount of Currency Needed, 48
• Chapter VII.—Importance of the System to Massachusetts, - - - 59
• Chapter VIII.—The True Character of the “National” System, - - 70
• Chapter IX.—Amasa Walker’s Opinion of the Author’s System, - 75

The reader will understand that the ideas presented in the following pages admit of a much more thorough demonstration than can be given in so small a space. Such demonstration, if it should be necessary, the author hopes to give at a future time.

CHAPTER I.: A NEW BANKING SYSTEM.

Under the banking system—an outline of which is hereafter given— the real estate of Boston alone—taken at only three-fourths its value, as estimated by the State valuation*—is capable of furnishing three hundred millions of dollars of loanable capital.

Under the same system, the real estate of Massachusetts—taken at only three-fourths its estimated value†—is capable of furnishing seven hundred and fifty millions of loanable capital.

The real estate of the Commonwealth, therefore, is capable of furnishing an amount of loanable capital more than twelve times as great as that of all the “National” Banks in the State‡; more than twice as great as that of all the “National” banks of the whole United States ($353,917,470); and equal to the entire amount ($750,000,000, or thereabouts) both of greenback and “National” bank currency of the United States.

It is capable of furnishing loanable capital equal to one thousand dollars for every male and female person, of sixteen years of age and upwards, within the Commonwealth; or two thousand five hundred dollars for every male adult.

It would scarcely be extravagant to say that it is capable of furnishing ample capital for every deserving enterprise, and every deserving man and woman, within the State; and also for all such other enterprises in other parts of the United States, and in foreign commerce, as Massachusetts men might desire to engage in.

Unless the same system, or some equivalent one, should be adopted in other States, the capital thus furnished in this State, could be loaned at high interest at the West and the South.

If adopted here earlier than in other States, it would enable the citizens of this State to act as pioneers in the most lucrative enterprises that are to be found in other parts of the country.

All this capital is now lying dead, so far as being loaned is concerned.

All this capital can be loaned in the form of currency, if so much can be used.

All the profits of banking, under this system, would be clear profits, inasmuch as the use of the real estate as banking capital, would not interfere at all with its use for other purposes.

The use of this real estate as banking capital would break up all monopolies in banking, and in all other business depending upon bank loans. It would diffuse credit much more widely than it has ever been diffused. It would reduce interest to the lowest rates to which Edition: current; Page: [7] free competition could reduce it. It would give immense activity and power to industrial and commercial enterprise. It would multiply machinery, and do far more to increase production than any other system of credit and currency that has ever been invented. And being furnished at low rates of interest, would secure to producers a much larger share of the proceeds of their labor, than they now receive.

All this capital can be brought into use as fast as the titles to real estate can be ascertained, and the necessary papers be printed.

Legally, the system (as the author claims, and is prepared to establish) stands upon the same principle as a patented machine; and is, therefore, already legalized by Congress; and cannot, unless by a breach of the public faith, any more be prohibited, or taxed, either by Congress or this State, than can the use of a patented machine.

Every dollar of the currency furnished by this system would have the same value in the market as a dollar of gold; or so nearly the same value that the difference would be a matter of no appreciable importance.

The system would, therefore, restore specie payments at once, by furnishing a great amount of currency, that would be equal in value to specie.

The system would not inflate prices above their true and natural value, relatively to specie; for no possible amount of paper currency, every dollar of which is equal in value to specie, can inflate prices above their true and natural value, relatively to specie.

Whenever, if ever, the paper should not buy as much in the market as specie, it would be returned to the banks for redemption, and thus taken out of circulation. So that no more could be kept in circulation than should be necessary for the purchase and sale of property at specie prices.

The system would not tend to drive specie out of the country; although very little of it would be needed by the banks. It would rather tend to bring specie into the country, because it would immensely increase our production. We should, therefore, have much more to sell, and much less to buy. This would always give a balance in our favor, which would have to be paid in specie.

It is, however, a matter of no practical importance whether the system would bring specie into the country, or drive it out; for the volume and value of the currency would be substantially unaffected either by the influx or efflux of specie. Consequently industry, trade, and prices would be undisturbed either by the presence or absence of specie. The currency would represent property that could not be exported; that would always be here; that would always have a value as fixed and well known as that of specie; that would always be many times more abundant than specie can ever be; and that could always be delivered (in the absence of specie) in redemption of the currency. These attributes of the currency would render all financial contractions, revulsions, and disorders forever impossible.

The following is

CHAPTER II.: SPECIE PAYMENTS.

Although the banks, under this system, make no absolute promise to pay specie on demand, the system nevertheless affords a much better practical guaranty for specie payments, than the old specie paying system (so called); and for these reasons, viz:

1. The banks would be so universally solvent, and so universally known to be solvent, that no runs would ever be made upon them for specie, through fear of their insolvency. They could, therefore, maintain specie payments with much less amounts of specie, than the old specie paying banks (so called) could do.

2. As there would be no fears of the insolvency of the banks, and as the paper would be more convenient than specie for purposes of trade, bills would rarely be presented for redemption—otherwise than in payment of debts due the banks—except in those cases where the holders desired to invest their money; and would therefore prefer a transfer of Productive Stock, to a payment in specie. If they wanted specie for exportation, they would buy it in the market (with the bills), as they would any other commodities for export.* It would, therefore, usually be only when they wanted an investment, and could find none so good as Edition: current; Page: [13] the Productive Stock, that they would return their bills for redemption. And then they would return them, not really for the purpose of having them redeemed with specie, but in the hope of getting a transfer of Productive Stock, and holding it awhile, and drawing interest on it.

3. The banks would probably find it for their interest, as promoting the circulation of their bills, to pay, at all times, such small amounts of specie, as the public convenience might require.

4. If there should be any suspensions of specie payments, they would be only temporary ones, by here and there a bank separately, and not by all the banks simultaneously, as under the so called specie paying system. No general public inconvenience would therefore ever be felt from that cause.

5. If the banks should rarely, or never, pay specie on demand, that fact would bring no discredit upon their bills, and be no obstacle to their circulation at par with specie. It would be known that—unless bad notes had been discounted—all the bills issued by the banks, would be wanted to pay the debts due the banks. This would ordinarily be sufficient, of itself, to keep the bills at par with specie. It would also be known that, if specie were not paid on demand, it would either be paid afterwards, with interest from the time of demand; or Productive Stock, equal in value to specie in the market, would be transferred in redemption of the bills. The bills, therefore, would never depreciate in consequence of specie not being Edition: current; Page: [14] paid on demand; nor would any contraction of the currency ever be occasioned on that account.

For the reasons now given, the system is practically the best specie paying system that was ever invented. That is to say, it would require less specie to work it; and also less to keep its bills always at par with specie. In proportion to the amount of currency it would furnish, it would not require so much as one dollar in specie, where the so called specie paying system would require a hundred. It would also, by immensely increasing our production and exports, do far more than any other system, towards bringing specie into the country, and preventing its exportation.

If it should be charged that the system supplies no specie for exportation; the answer is, that it is really no part of the legitimate business of a bank to furnish specie for exportation. Its legitimate business is simply to furnish credit and currency for home industry and trade. And it can never furnish these constantly, and in adequate amounts, unless it can be freed from the obligation to supply specie on demand for exportation. Specie should, therefore, always be merely an article of merchandise in the market, like any other; and should have no special—or, at least, no important—connection with the business of banking, except as furnishing the measure of value. If a paper currency is made payable in specie, on demand, very little of it can ever be issued, or kept in circulation; and that little will be so irregular and inconstant in amount as to cause continual and irremediable derangements. Edition: current; Page: [15] But if a paper currency, instead of promising to pay specie on demand, promises only an alternative redemption, viz: specie on demand, or specie with interest from the time of demand, or other merchantable property of equal market value with specie—it can then be issued to an amount equal to such property; and yet keep its promises to the letter. It can, therefore, furnish all the credit and currency that can be needed; or at least many times more than the so called specie paying system ever did, or ever can, furnish. And then the interest, industry and trade of a nation will never be disturbed by the exportation of specie. And yet the standard of value will always be maintained.

The difference between the system here proposed, and the so called specie paying system—in respect to their respective capacities for furnishing credit and currency, and at the same time fulfilling their contracts to the letter—is as fifty to one, at the least, in favor of the former; probably much more than that.

Thus under the system now proposed, the real estate and railroads of the United States, at their present values, are capable of furnishing twenty thousand millions ($20,000,000,000) of paper currency; and furnishing it constantly, and without fluctuation, and every dollar of it will have an equal market value with gold. The contracts or certificates comprising it, can always be fulfilled to the letter; that is, the capital itself, (the Productive Stock,) represented by these certificates, can always be delivered, on demand, in redemption of the certificates, if the banks should be unable to redeem in specie.

On the other hand, it would be impossible to have so much as four hundred millions, ($400,000,000)—one fiftieth of the amount before mentioned—of so called specie paying paper currency; that is, a paper promising to pay specie on demand; and constantly able to fulfil its obligations.

It is of no appreciable importance that a paper currency should be payable on demand with specie. It is sufficient, if it be payable according to its terms, if only those terms are convenient and acceptable. For then the value of the currency will be known, and its contracts will be fulfilled to the letter. And when these contracts are fulfilled to the letter, then, to all practical purposes, specie payments are maintained. When, for example, a man promises to pay wheat, either on demand, or at a time specified, and he fulfils that contract to the letter, that, to all practical purposes, is specie payments; as much so as if the promise and payment had been made in coin. It is, therefore, the specific and literal fulfilment of contracts, that constitutes specie payments; and not the particular kind of property that is promised and paid.

The great secret, then, of having an abundant paper currency, and yet maintaining all the while specie payments, consists in having the paper represent property—like real estate, for example—that exists in large amounts, and can always be delivered, on demand, in redemption of the paper; and also in having this paper issued by the persons who actually own the property represented by it, and who can be compelled Edition: current; Page: [17] by law to deliver it in redemption of the paper. And the great secret—if it be a secret—of having only a scanty currency, and of not having specie payments, consists in having the paper issued by a government that cannot fulfil its contracts, and has no intention of fulfilling them; and by banks that are not even required to fulfil them.

It is somewhat remarkable that after ten years experiment, we have not yet learned these apparently self-evident truths.

The palpable fact is that the advocates of the present “National” currency system,—that is, the stockholders in the present “National” banks,—do not wish for specie payments. They wish only to maintain, in their own hands, a monopoly of banking, and, as far as possible also, a monopoly of all business depending upon bank loans. They wish, therefore, to keep the volume of the currency down to its present amount. As an excuse for this, they profess a great desire for specie payments; and at the same time practice the imposture of declaring that specie payments will be impossible, if the amount of the currency be increased.

But all this is sheer falsehood and fraud. It is, of course, impossible to have specie payments, so long as the only currency issued is issued by a government that has nothing to redeem with, and has no intention of redeeming; and by banks that are not even required to redeem. But there is no obstacle to our having twenty times as much currency as we now have, and yet having specie payments—or the literal fulfilment Edition: current; Page: [18] of contracts—if we will but suffer the business of banking to go into the hands of those who have property with which to redeem, and can be compelled by law to redeem.

It is with government paper, and bank paper, as it is with the paper of private persons; that is, it is worth just what can be delivered in redemption of it, and no more. We all understand that the notes of the Astors, and Stewarts, and Vanderbilts, though issued by millions, and tens of millions, are really worth their nominal values. And why? Solely because the makers of them have the property with which to redeem them in full, and can be made to redeem them in full. We also all understand that the notes of Sam Jones, and Jim Smith, and Bill Nokes, though issued for only five dollars, are not worth two cents on the dollar. And why? Solely because they have nothing to pay with; and cannot be made to pay.

Suppose, now, that these notes of Sam Jones, and Jim Smith, and Bill Nokes, for five dollars, were the only currency allowed by law; and that they were worth in the market but two cents on the dollar. And suppose that the few holders of these notes, wishing to make the most of them, at the expense of the rights of everybody else, should keep up a constant howl for specie payments; and should protest against any issue of the notes of the Astors, the Stewarts, and the Vanderbilts, upon the ground that such issue would inflate the currency, and postpone specie payments! What would we think of men capable of uttering such absurdities? Edition: current; Page: [19] Would we in charity to their weakness, call them idiots? or would we in justice to their villainy, denounce them as impostors and cheats of the most transcendent and amazing impudence? And what would we think of the wits of forty millions of people, who could be duped by such preposterous falsehoods?

And yet this is scarcely an exaggerated picture of the fraud that has been practiced upon the people for the last ten years. A few men have secured to themselves the monopoly of a few irredeemable notes; and not wishing to have any competition, either in the business of banking, or in any business depending upon bank loans, they cry out for specie payments; and declare that no solvent or redeemable notes must be put into circulation, in competition with their insolvent and irredeemable ones, lest the currency be inflated, and specie payments be postponed!

And this imposture is likely to be palmed off upon the people in the future, as it has been in the past, if they are such dunces as to permit it to be done.

It is perfectly evident, then, that specie payments—or the literal fulfilment of contracts—does not depend at all upon the amount of paper in circulation as currency; but solely upon the fact whether, on the one hand, it be issued by those who have property with which to redeem it, and can be made to redeem it; or whether, on the other hand, it be issued by those who cannot redeem it, and cannot be made to redeem it.

When the people shall understand these simple, manifest truths, they will soon put an end to the monopoly, Edition: current; Page: [20] extortion, fraud, and tyranny of the existing “National” system.

The “National” system, so called, is, in reality, no national system at all; except in the mere facts that it is called the national system, and was established by the national government. It is, in truth, only a private system; a mere privilege conferred upon a few, to enable them to control prices, property, and labor; and thus to swindle, plunder, and oppress all the rest of the people.

CHAPTER III.: NO INFLATION OF PRICES.

CHAPTER IV.: SECURITY OF THE SYSTEM.

Supposing the property mortgaged to be ample, the system, as a system, is absolutely secure. The currency would be absolutely incapable of insolvency; for there could never be a dollar of the currency in circulation, without a dollar of capital (Productive Stock) in bank, which must be transferred in redemption of it, unless redemption be made in specie.

The capital alone, be it observed—independently of the notes discounted—must always be sufficient to redeem the entire circulation; for the circulation can never exceed the capital (Productive Stock). But the notes discounted are also holden by the trustees, and the proceeds of them must be applied to the redemption of the circulation. Supposing, therefore, the capital to be sufficient, and the notes discounted to be solvent, the redemption of the circulation is doubly secured.

What guarantee, then, have the public, for the sufficiency of the mortgages? They have these, viz.:

1. The mortgages, composing the capital of a bank, will be matters of public record, and everybody, in the neighborhood, will have the means of judging for himself of the sufficiency of the property holden. If the Edition: current; Page: [36] property should be insufficient, the bank would be discredited at once; for the abundance of solvent currency would be so great, that no one would have any inducement to take that which was insolvent or doubtful.

2. By the Articles of Association, all the mortgages that make up the capital of a bank, are made mutually responsible for each other; because, if any one mortgage proves insufficient, no dividend can afterwards be paid to any of the bankers (mortgagors), until that deficiency shall have been made good by the company. The effect of this provision will be, to make all the founders of a bank look carefully to the sufficiency of each other’s mortgages; because no man will be willing to put in a good mortgage of his own, on equal terms with a bad mortgage of another man’s, when he knows that his own mortgage will have to contribute to making good any deficiency of the other. The result will be, that the mortgages, that go to make up the capital of any one bank, will be either all good, or all bad. If they are all good, the solvency of the bank will be apparent to all in the vicinity; and the credit of the bank will at once be established at home. If the mortgages are all bad, that fact, also, will be apparent to everybody in the vicinity, and the bank is at once discredited at home.

From the foregoing considerations, it is evident that nothing is easier than for a good bank to establish its credit, at home; and that nothing is more certain than that a bad bank would be discredited, at home, from the outset, and could get no circulation at all.

It is also evident that a bank, that has no credit at home, could get none abroad. There is, therefore, no danger of the public being swindled by bad banks.

A bank that is well founded, and that has established its credit at home, has so many ways of establishing its credit abroad, that there is no need that they be all specified here. The mode that seems most likely to be adopted, is the following, viz.:

When the capital shall consist of mortgages, it will be very easy for all the banks, in any one State, to make their solvency known to each other. There would be so many banks, that some system would naturally be adopted for this purpose.

Perhaps this system would be, that a standing committee, appointed by the banks, would be established in each State, to whom each bank in the State would be required to produce satisfactory evidence of its solvency, before its bills should be received by the other banks of the State.

When the banks, or any considerable number of the banks, of any particular State—Massachusetts, for instance,—shall have made themselves so far acquainted with each other’s solvency, as to be ready to receive each other’s bills, they will be ready to make a still further arrangement for their mutual benefit, viz: To unite in establishing one general agency in Boston, another in New York, and others in Philadelphia, Baltimore, Cincinnati, Chicago, St. Louis, New Orleans, San Francisco, &c., &c., where the bills of all these Massachusetts banks would be redeemed, either Edition: current; Page: [38] from a common fund contributed for the purpose, or in such other way as might be found best. And thus the bills of all the Massachusetts banks would be placed at par at all the great commercial points.

Each bank, belonging to the association, might print on the back of its bills, “Redeemable at the Massachusetts Agencies in Boston, New York, Philadelphia, &c.”

In this way, all the banks of each State might unite to establish a joint agency in every large city, throughout the country, for the redemption of all their bills. In doing so, they would not only certify, but make themselves responsible for, the solvency of each other’s bills.

The banks might safely make permanent arrangements of this kind with each other; because the permanent solvency of all the banks might be relied on.

The permanent solvency of all the banks might be relied on, because, under this system, a bank (whose capital consists of mortgages), once solvent, is necessarily forever solvent, unless in contingencies so utterly improbable as not to need to be taken into account. In fact, in the ordinary course of things, every bank would be growing more and more solvent; because, in the ordinary course of things, the mortgaged property would be constantly rising in value, as the wealth and population of the country should increase. The exceptions to this rule would be so rare as to be unworthy of notice.

There is, therefore, no difficulty in putting the currency, furnished by each State, at par throughout the United States.

At the general agencies, in the great cities, the redemption would, doubtless, so far as necessary, be made in specie, on demand; because, at such points, especially in cities on the sea-board, there would always be an abundance of specie in the market as merchandise; and it would, therefore, be both for the convenience and interest of the banks to redeem in specie, on demand, rather than transfer a portion of their capital, and then pay interest on that capital until it should be redeemed, or bought back, with specie.

Often, however, and very likely even in the great majority of cases, a man from one State—as California, for example,—presenting Massachusetts bills for redemption at a Massachusetts agency—either in Boston, New York, or elsewhere—would prefer to have them redeemed with bills from his own State, California, rather than with specie.

If the system were adopted throughout the United States, the banks of each State would be likely to have agencies of this kind in all the great cities. Each of these agencies would exchange the bills of every other State for the bills of its own State; and thus the bills of each State would find their way home, without any demand for their redemption in specie having ever been made.

Where railroads were used as capital, all the banks in the United States could form one association, of the kind just mentioned, to establish agencies at all the great commercial points, for the redemption of their bills.

Of course each railroad would receive the bills of all other roads, for fare and freight.

Thus all railroad currency, under this system, would be put at par throughout the United States.

CHAPTER V.: THE SYSTEM AS A CREDIT SYSTEM.

CHAPTER VI.: AMOUNT OF CURRENCY NEEDED.

It is of no use to say that we do not need so much currency as the proposed system would supply; because, first, if we should not need it, we shall not use it. Every dollar of paper will represent specific property that can be delivered on demand in redemption of it, and that will have the same market value as gold. The paper dollar, therefore, will have the same market value as the gold dollar, or as a dollar’s worth of any other property; and no one will part with it, unless he gets in exchange for it something that will serve his particular wants better; and no one will accept it, unless it will serve his particular wants better than the thing he parts with. No more paper, therefore, can circulate, than is wanted for the purchase and sale of commodities at their true and natural values, as measured by gold.

Secondly, we do not know at all how much currency we do need. That is something that can be determined only by experiment. We know that, heretofore, whenever currency has been increased, industry and traffic have increased to a corresponding extent. And they would unquestionably increase to an extent far beyond any thing the world has ever seen, if only Edition: current; Page: [49] they were aided and permitted by an adequate currency.

We, as yet, know very little what wealth mankind are capable of creating. It is only within a hundred years, or a little more, that any considerable portion of them have really begun to invent machinery, and learned that it is only by machinery that they can create any considerable wealth. But they have not yet learned—at least, they profess not to have learned—that money is indispensable to the practical employment of machinery; that it is as impossible to operate machinery without money, as it is to operate it without wind, water, or steam. When they shall have learned, and practically accepted, this great fact, and shall have provided themselves with money, wealth will speedily become universal. And it is only those who would deplore such a result, or those who are too stupid to see the palpable and necessary connection between money and manufacturing industry, who resist the indefinite increase of money.

It is scarcely a more patent fact that land is the indispensable capital for agricultural industry, than it is that money is the indispensable capital for manufacturing industry. Practically, everybody recognizes this fact, and virtually acknowledges it; although, in words, so many deny it. Men as deliberately and accurately calculate the amount of machinery that a hundred dollars in money will operate, as they do the amount of machinery that a ton of coal, or a given amount of water, will operate. They calculate much Edition: current; Page: [50] more accurately the amount of manufactured goods a hundred dollars will produce, than they do the amount of grain, grass, or vegetables an acre of land will produce. They no more expect to see mechanics carrying on business for themselves without money, than they do to see agricultural laborers carrying on farming without land, or than they do to see sailors going to sea without ships. They know that all mechanical, as well as agricultural, laborers, who have not the appropriate capital for their special business, must necessarily stand idle, or become mere wage-laborers for others, at such particular employments as the latter may dictate, and at such prices as the latter may see fit to pay.

All these things attest the perfect knowledge that men have, that a money capital is indispensable to manufacturing industry; whatever assertions they may make to the contrary.

They know, therefore, that prohibitions upon money are prohibitions upon industry itself; that there can be no such thing as freedom of industry, where there is not freedom to lend and hire capital for such industry.

Every one knows, too—who knows any thing at all on such a subject—that it is, intrinsically, as flagrant a tyranny, as flagrant a violation of men’s natural rights, for a government to forbid the lending and hiring of money for manufacturing industry, as it is to forbid the lending and hiring of land, or agricultural implements, for agricultural industry, or the lending Edition: current; Page: [51] and hiring of ships for maritime industry. They know that it is as flagrant a tyranny, as flagrant a violation of men’s natural rights, to forbid one man to lend another money for mechanical industry, as it would be to forbid the former to lend the latter a house to live in, a shop to work in, or tools to work with.

It is, therefore, a flagrant, manifest tyranny, a flagrant, manifest violation of men’s natural rights, to lay any conditions or restrictions whatever upon the business of banking—that is, upon the lending and hiring of money—except such as are laid upon all other transactions between man and man, viz.: the fulfilment of contracts, and restraints upon force and fraud.

A man who is without capital, and who, by prohibitions upon banking, is practically forbidden to hire any, is in a condition elevated but one degree above that of a chattel slave. He may live; but he can live only as the servant of others; compelled to perform such labor, and to perform it at such prices, as they may see fit to dictate. And a government, which, at this day, subjects the great body of the people—or even any portion of them—to this condition, is as fit an object of popular retribution as any tyranny that ever existed.

To deprive mankind of their natural right and power of creating wealth for themselves, is as great a tyranny as it is to rob them of it after they have created it. And this is done by all laws against honest banking.

All these things are so self-evident, so universally known, that no man, of ordinary mental capacity, can Edition: current; Page: [52] claim to be ignorant of them. And any legislator, who disregards them, should be taught, by a discipline short, sharp, and decisive, that his power is wholly subordinate to the natural rights of mankind.

It is, then, one of man’s indisputable, natural rights to lend and hire capital in any and every form and manner that is intrinsically honest. And as money, or currency, is the great, the indispensable instrumentality in the production and distribution of wealth; as it is the capital, the motive power, that sets all other instrumentalities in motion; as it is the one thing, without which all the other great agencies of production—such as science, skill, and machinery—are practically paralyzed; to say that we need no more of it, and shall have no more of it, than we now have, is to say that we need no more wealth, and shall have no more wealth, and no more equal or equitable distribution of wealth, than we now have. It is to say that the mass of mankind—the laborers, the producers of wealth—need not to produce, and shall not be permitted to produce, wealth for themselves, but only for others.

For a government to limit the currency of a people, and to designate the individuals (or corporations) who shall have the control of that currency, is, manifestly, equivalent to saying there shall be but so much industry and wealth in the nation, and that these shall be under the special control, and for the special enjoyment, of the individuals designated; and, of course, that all other persons shall be simply their dependants and servants; receiving only such prices for their property, Edition: current; Page: [53] and such compensation for their labor, as these few holders of the currency shall see fit to give for them.

The effect of these prohibitions upon money, and consequently upon industry, are everywhere apparent in the poverty of the great body of the people.

At the present time, the people of this country certainly do not produce one third, very likely not one fifth, of the wealth they might produce. And the little they do produce is all in the hands of a few. All this is attributable to the want of currency and credit, and to the consequent want of science, skill, machinery, and working capital.

Of the twenty million persons, male and female, of sixteen years of age and upwards—capable of producing wealth—certainly not one in five has the science, skill, implements, machinery, and capital necessary to make his or her industry most effective; or to secure to himself or herself the greatest share in the products of his or her own industry. A very large proportion of these persons—nearly all the females, and a great majority of the males—persons capable of running machinery, and of producing each three, five, or ten dollars of wealth per day, are now without science, skill, machinery, or capital, and are either producing nothing, or working only with such inferior means, and at such inferior employments, as to make their industry of scarcely any value at all, either to themselves or others, beyond the provision of the coarsest necessaries of a hard and coarse existence. Edition: current; Page: [54] And this is all owing to the lack of money; or rather to the lack of money and credit.

There are, doubtless, in the country, ten million (10,000,000) persons, male and female—sixteen years of age and upwards—who are naturally capable of creating from three to five dollars of wealth per day, if they had the science, skill, machinery, and capital which they ought to have, and might have; but who, from the want of these, are now creating not more than one dollar each per day, on an average; thus occasioning a loss to themselves and the country of from twenty to forty millions of dollars per day, for three hundred days in a year; a sum equal to from six to twelve thousand millions per annum; or three to six times the amount of our entire national debt.

And there are another ten million of persons—better supplied, indeed, with capital, machinery, &c., than the ten million before mentioned—but who, nevertheless, from the same causes, are producing far less than they might.

The aggregate loss to the country, from these causes, is, doubtless, equal to from ten to fifteen thousand millions per year; or five, six, or seven times the amount of the entire national debt.

In this estimate no account is taken of the loss suffered from our inability—owing simply to a want of money—to bring to this country, and give employment to, the millions of laborers, in Europe and Asia, who desire to come here, and add the products of their labor to our national wealth.

It is, probably, no more than a reasonable estimate to suppose that the nation, as a nation, is losing twenty thousand millions of dollars ($20,000,000,000) per annum—about ten times the amount of our national debt—solely for the want of money to give such employment as they need, to the population we now have, and to those who desire to come here from other countries.

Among the losses we suffer, from the causes mentioned, the non-production of new inventions is by no means the least. As a general rule, new inventions are made only where money and machinery prevail. And they are generally produced in a ratio corresponding with the amount of money and machinery. In no part of the country are the new inventions equal in number to what they ought to be, and might be. In three fourths of the country very few are produced. In some, almost none at all. The losses from this cause cannot be estimated in money.

The government, in its ignorance, arrogance, and tyranny, either does not see all this, or, seeing it, does not regard it. While these thousands of millions are being lost annually, from the suppression of money, and consequently of industry, and while three fourths of the laborers of the country are either standing idle, or, for the want of capital, are producing only a mere fraction of what they might produce, a two-pence-ha’-penny Secretary of the Treasury can find no better employment for his faculties, than in trying, first, to reduce the rate of interest on the public debt one per Edition: current; Page: [56] cent.—thereby saving twenty millions a year, or fifty cents for each person, on an average! And, secondly, in paying one hundred millions per annum of the principal; that is, two and a half dollars for each person, on an average! And he insists that the only way to achieve these astounding results, is to deprive the people at large of money! To destroy, as far as possible, their industry! To deprive them, as far as possible, of all power to manufacture for themselves! And to compel them to pay, to the few manufacturers it has under its protection, fifty or one hundred per cent. more for their manufactures than they are worth!

He has been tugging at this tremendous task four years, or thereabouts. And he confidently believes that if he can be permitted to enforce this plan for a sufficient period of years, in the future, he will ultimately be able to save the people, annually, fifty cents each, on an average, in interest! and also continue to pay, annually, two dollars and a half for each person, on an average, of the principal, of the national debt!

He apparently does not know, or, if he knows, it is, in his eyes, a matter of comparatively small moment, that this saving of $20,000,000 per annum in interest, and this payment of $100,000,000 per annum of principal, which he proposes to make on behalf of the people, are not equal to what two days—or perhaps even one day—of their industry would amount to, if they were permitted to enjoy their natural rights of lending and hiring capital, and producing such wealth as they please for themselves.

He apparently does not know, or, if he knows, it is with him a small matter, that if the people were permitted to enjoy their natural freedom in currency and credit, and consequently their natural freedom in industry, they could pay the entire national debt three, four, or a half dozen times over every year, more easily than they can save the $20,000,000, and pay the $100,000,000, annually, by the process that he adopts for saving and paying them.

And yet this man, and his policy, represent the government and its policy. The president keeps him in office, and Congress sustain him in his measures.

In short, the government not only does not offer, but is apparently determined not to suffer, any such thing as freedom in currency and credit, or, consequently, in industry. It is, apparently, so bent upon compelling the people to give more for its few irredeemable notes than they are worth; and so bent upon keeping all wealth, and all means of wealth, in the hands of the few—upon whose money and frauds it relies for support—that it is determined, if possible, to perpetuate this state of things indefinitely. And it will probably succeed in perpetuating it indefinitely—under cover of such false pretences as those of specie payments, inflation of prices, reducing the interest, and paying the principal, of the national debt, &c.—unless the people at large shall open their eyes to the deceit and robbery that are practised upon them; and, by establishing Edition: current; Page: [58] freedom in currency and credit—and thereby freedom in industry and commerce—end at once and forever the tyranny that impoverishes and enslaves them.

CHAPTER VII.: IMPORTANCE OF THE SYSTEM TO MASSACHUSETTS.

CHAPTER VIII.: THE TRUE CHARACTER OF THE “NATIONAL” SYSTEM.

CHAPTER IX.: AMASA WALKER’S OPINION OF THE AUTHOR’S SYSTEM

As Mr. Amasa Walker is considered the highest authority in the country, in opposition to all paper currency that does not represent gold or silver actually on hand, it will not be impertinent to give his opinion of the system now proposed.

He reviewed it in a somewhat elaborate article, entitled “Modern Alchemy,” published in the Bankers Magazine (N. Y.) for December, 1861.

That he had no disposition to do any thing but condemn the system to the best of his ability, may be inferred from the following facts.

After describing the efforts of the old alchemists to transmute the baser metals into gold, he represents all attempts to make a useful paper currency as attempts “to transmute paper into gold.” He says that the idea that paper can be made to serve the purposes of money is “a perfectly cognate idea” with that of the old alchemists, that the baser metals can be transmuted into gold. (p. 407.)

He also informs us that—

These extracts are given to show the spirit and principle of his article, and the kind of arguments he employs against all paper that represents other property than coin; even though that property have equal value with coin in the market.

Yet he says:—

When he says that “it is the best transmutation project he has seen,” the context shows that he means to say that it comes nearer to transmuting paper into gold, than any other system he has seen.

This admission, coming from so violent an opponent of paper currency, may reasonably be set down as the highest commendation that he could be expected to pay to any paper system.

He also says:—

But by way of condemning the system as far as possible, he says:—

No, it was not essentially of the same character. One difference—to say nothing of twenty others—between the two systems was this: that Law’s bank issued notes that it had no means to redeem; whereas Mr. Walker himself admits that “Mr. Spooner’s system makes no promises that it cannot fulfil.” That is to say, it purports to represent nothing except what it actually represents, viz.: property that is actually on hand, and can always be delivered, on demand, in redemption of the paper. Is not this difference an “essential” one? If Mr. Walker thinks it is not, he differs “essentially” from the rest of mankind. What fault was ever found with John Law’s bank, except that it could not redeem its paper? Will Mr. Walker inform us?