Let us advert to the nature of currency, in order to discern, how it is subservient to the mutual benefits diffused by a division of labour, and how it is made to destroy these benefits. It possesses two generick capacities; those of exchanging, and transferring, property. Under the first is comprised the intercourse between individuals; under the second, all payments made without receiving an equivalent in property, invariably computed in exchanges. If an individual sells his land to another, though he receives currency, he receives in fact an equivalent for his land in other property which the currency represents. But, when an individual pays money or currency to a government or to exclusive privileges, that portion of his property which the currency represents, is transferred without his receiving any equivalent in other property, and is to him an actual loss. In such payments for the support of a free government, he obtains an equivalent in social security, but not in property and even these expenditures, though highly beneficial to him, constitute a loss of property, sustained for the preservation of the residue. But when such payments are extorted to feed either an oppressive government or exclusive privileges, they degenerate into actual tyranny, and individuals receive no equivalent either in property or in liberty. Government has been called an evil, because it requires a transfer of property; but it only becomes a tyranny by aggravating this evil without necessity.
As its degeneracy advances, more currency is required for the purpose of transferring more property from one individual to another, because in this operation it acts only periodically; annually, only for the most part in the case of governments, between the gainer and the loser of property; but more frequently, in the cases of the property, it transfers to exclusive privileges, so as to aggravate the deprivation. One portion of currency is employed in exercising its capacity of transferring property, and another in exercising its capacity of exchanging it. But as the latter portion passes with infinitely more rapidity from hand to hand in performing its occupation than the former, there is no need of an exuberant quantity of currency to fulfil this salutary end; nor can this pernicious exuberance long exist, because it must be limited by the extent of exchanges; by which the value of currency in circulation will either be raised by appreciation, or brought down by depreciation, to a level with the demand for carrying on exchanges, so as to correct the evils both of a deficiency or redundancy. Far different is the character of money or currency employed for the purpose of transferring property. Its quantity must be increased, as this occupation is increased; nor is it liable to the salutary restriction interwoven with its capacity of exchanging property, because these artificial transfers of it are subject to no limitation, so long as the people have any thing to lose. It is true that these occupations, though perfectly distinct, appear to run into each other, because currency, like Araspes the Persian, has two souls. Its capacity to exchange property is its good soul, and its capacity to transfer property, its bad one. When its good soul prevails, it dispenses justice; under the influence of its bad one, it becomes a violator of each man's spouse, private property. Will Congress be less magnanimous than a Cyrus? Will it encourage the adulterous or the chaste soul of currency?
Even the money paid to the officers of government is a transfer of property, either transitory or permanent. So much as is used by the receiver for his current subsistence, is transitory as to himself; but the payer receives no equivalent in other property; and so much as augments the wealth of the receiver, is as permanently transferred as property can be. If a robber seizes the money of an individual, the loser receives but a poor equivalent for his loss, because the robber throws it into circulation, either in procuring subsistence, or by purchasing an estate. In like manner money paid to officers of government and to exclusive privileges is a transfer of property, having the same effects. In the case of exclusive privileges the similitude is exact, but not in the case of the officers of government, so far as exactions for their compensation are necessary for social order, of which the security of property constitutes an essential article. In this case also the similitude becomes exact, whenever these exactions exceed the legitimate object of sustaining a free government, and are gradually introducing an oppressive one. In fact, out of this distinction between the good and evil capacities of money, flow most or all of the phrases used to convey an idea, either of a good or a tyrannical government.
It is the identical distinction which constitutes the contrast between our own and the European governments, and if it is lost, I should be glad to learn what will be the real value of a mere theoretical remnant. The distress of England at this juncture is at least equal to ours. It provokes a much greater degree of national disquietude. The distress of Ireland far exceeds ours. This foreign distress has not found a remedy in manufactures and exclusive privileges. To obtain it by the same policy, we must therefore push it further than the English have done. As the cause of the evils under which England and Ireland are groaning, cannot lie in a want of the advocated policy, it is only to be found in its existence. It undoubtedly lies in the encouragement given by the government to the bad soul of money. Its wicked capacity of transferring property is patronized by a multitude of laws, for enriching the officers of government, privileged combinations, projectors, pensioners, and sinecures, beyond the limits prescribed by social considerations. Thus the effects of the good soul of money are nearly suffocated, and the predominance of its bad soul dispenses the mischiefs to be expected from an evil spirit.
If we cannot ascertain the extent in which we have cultivated the capacity of currency to transfer property, because it is impossible to discover how much has been transferred by its depreciation, we can yet compute it with considerable accuracy, so far as this capacity is exercised by taxation, State and Federal, by dividends paid to bankers, and by bounties paid to capitalists. These united cannot amount to less than sixty millions of dollars annually, and as this enormous sum of money transfers every year the property it represents, we need not wander any further in search of a cause for the public distress. As it represents and transfers twice, or perhaps thrice, as much property as it did a few years past, the distress which has awakened the compassion of the Committee, was unavoidable; but they propose to alleviate it by pushing still further the policy of transferring property. They say we have but forty-five millions of currency. If such be the fact, what must be the consequences of laws compelling these forty-five millions to transfer, annually, sixty millions worth of property, and also to perform the whole business of facilitating exchanges. The first duty being imperative, in its present magnitude, must chiefly employ the supposed quantity of currency, and leave but little of it to be employed in the second; so that the great increase in the efficacy of money or currency to transfer property, unites with the insufficiency of the amount applicable to facilitating exchanges, brought about by the enormous sum absorbed in its pernicious employment, to produce the present state of things.
A permanent increase of currency can only be effected by employment for it in exchanging or transferring property, but its increase for one or the other object, produces very different consequences to a nation. When currency is increased by a demand for it to facilitate exchanges, it indicates national prosperity, but when it is increased for the purpose of transferring property, it is an infallible proof of fraud and oppression. The operations of currency in exchanging and transferring property are so interwoven, that it is easy to delude the people into an opinion, that the former and not the latter design is at the bottom of its legal augmentation; and debtors are bribed by a hope of depreciation, to mortgage the remnant of their property, with themselves and their posterity, to the property-transferring policy. When currency is increased, as in the case of banking, for the primary object of transferring property, a temporary depreciation ensues, which robs once by this means, and again by appreciation. Upon either alternation, however frequently they occur, injustice is perpetrated. But the effect of either between individuals is moderate and short lived, because the demand of currency to be employed in exchanges will regulate its value; and in making such exchanges it will be computed by its representative relation to property. An increase of currency, for the purpose of transferring property, contains no such internal remedy against the evils of excess. Governments and exclusive privileges increase their exactions at least comparatively, and usually take care that their compensations shall exceed a temporary depreciation. When it ceases, or appreciation happens, the transfer of property from the people to themselves, commenced by increasing currency under the pretext of facilitating exchanges, is aggravated without any new law; and the numerical acquisitions are doubled or trebled in value, merely by saying nothing. When wheat was worth two dollars a bushel, sixty millions of dollars would transfer property equal to thirty millions of bushels of wheat; but when wheat is reduced to one third of that price, the same sixty millions transfers property equal to one hundred and eighty millions of bushels. Is this chasm so wide and deep, that the national distress cannot be discerned in its bottom?
The disciples of the capacity of currency for transferring property, are more ardent and skilled than those who are contented with its utility in exchanging it, because the cultivation of that capacity is their trade, in which they become perfect by practice; and because mankind have ever thought it very pleasant to get rich without industry. Hence a school appears in every country for teaching nations that taxation, stocks, and exclusive privileges, are the best guardians of their prosperity. This school is perpetually lecturing us in the newspapers and in pamphlets, with a success demonstrated in the present state of things, obtained by confounding the very different capacities of money to transfer and to exchange property; and by considering its abundance, whether created for either purpose, as equally an evidence of national prosperity. Thus it has deluded us into the error of coveting the abundance, without considering in which of its capacities it will operate. Yet in every instance, when a plentiful paper currency has been created for the purpose of transferring property, or has produced that effect, though created from considerations both honest and patriotic, evils in no degree dubious have been identified with it. The abundance of paper currency in England, far from being a dispenser of individual happiness, is a severe oppressor, because it is chiefly employed in transferring property. The abundance of our revolutionary currency, though created by patriotism, produced great distress, in its effect of transferring property. The late abundance of our bank currency caused great distress by transferring property. In all these cases we see clearly, that national distress uniformly occurs in proportion as property has been transferred. Yet the Committee propose to remove the existing national distress, proceeding from the enormous amount of property now annually transferred, by transferring still more property to capitalists, by producing an artificial demand for more currency to work in its transferring character, by increasing taxation, and by diminishing the business of its exchanging character, in excluding the importation of foreign commodities to a great extent. Suppose the importation of foreign commodities should be quite prohibited, that our revenue should be doubled, that our bounties, exclusive privileges, and public expenses should be also doubled, and that our currency should be increased up to a complete sufficiency for transferring an hundred and twenty millions worth of property annually; would this policy be an index of national prosperity, or recover the happiness of individuals?
I cannot discern upon what principle the Committee have founded their computation as to the amount of our currency, nor even what they mean by the term; and yet accuracy in both respects is indispensable, before we can draw any correct conclusion from this amount. If they mean by the term "currency," bank paper only, it is hardly possible that they could have obtained credible returns of its amount from all these institutions, unsubjected to compulsion, and influenced to secrecy by the strongest motives; and it would be equally incredible, that only forty-five millions of currency could perform the business of transferring annually sixty millions of property, and also of discharging so much of the business of facilitating exchanges, as our commercial restrictions have left for it. If they understand by the term "currency," bank paper, metallick money, funded stock, and incorporated stock, all of which possess the capacities both of transferring and exchanging property, their computation is widely erroneous. If these capacities constitute currency, that of the United States is enormously redundant at this time, for the employment of exchanging property. It consists of funded stock for old debts and new loans, of the stock of the whole family of banks, of the stock of many other corporations, of all the specie in the country, and of all the bank notes in circulation. If at some antecedent juncture a larger amount of bank notes was in circulation, it was not associated with any thing like so large an amount of stock and specie as at present. We ought to estimate every species of circulating currency capable of transferring or exchanging property, to procure a sound foundation for an argument extracted from that source; and as these stocks possess such qualities, and are transferable for such purposes, our computation would be erroneous, should they be excluded. In the case of banks, their stock or shares constitute a portion of the circulating medium, as well as their notes; and perhaps we should not deviate far from the truth, by doubling their stock, to come at the total of banking currency, made up of the items of stock and notes.
These items would, undoubtedly, far exceed one hundred millions of currency; funded stock, State and Federal, considerably exceeds another hundred millions; and the metallick currency in the country may be, probably, estimated at thirty millions. Our astonishment excited by the idea that we have only forty-five millions of currency, to transfer annually sixty millions of property, and also to perform the whole business of exchanges, now ceases; and we also discover, that an abundance of currency, far from being an evidence of national prosperity, may be the identical cause of national distress. Two hundred of our existing two hundred and thirty millions of currency, have been created or are calculated for the very purpose of transferring property; and, though this capital also performs some share of the business of exchanging it, yet this association of the good capacity of currency with its bad one, alleged as a proof of merit, is only a cloak of fraud. Under the pretext of facilitating exchanges, the bad capacity of currency has obtained the profits of labour to a ruinous amount. The metallick currency is incarcerated, to create a necessity for a transferring currency; and extravagance and borrowing is used to increase its quantity, to carry our lands and goods to capitalists. The more of these which are intended to be transferred, the more of the transferring currency becomes necessary to facilitate the conveyance; and it has at length grown up into a monster which eats faster than five successive years of uncommon fruitfulness could furnish food; and so impoverishing, that we must either direct against him the thunderbolt of common sense, or submit to his ravages in despair. If it was true, that this monster had diminished down to the weight of forty-five millions, there might be some hope of his becoming extinct; but, as the fact is that he has already exceeded that size four- or five-fold, it behooves those whose fruits he eats to look about them, when it is proposed to make him grow still larger.
As an argument for replenishing his larder by another cut-and-come-again carcass, the Committee assert, "that we flourished in war and are depressed in peace, because manufactures then flourished and are now depressed; that there is an animating currency where they still flourish, and scarce any where they do not, except in the cotton-growing States." Manufactures then, it seems, do actually flourish somewhere in the United States, their depression notwithstanding, so wonderfully as to reflect around their orbits an animating pecuniary halo, no where discernible around any agricultural sphere, that of cotton excepted. It seems strange that wealth should attend factories in spite of oppression, and that poverty should lay hold of agriculture, though fortified by commercial restrictions. An impartial judge, from these two facts asserted by the Committee, must conclude that agriculture had already given too much of her estate to her children in some fit of morbid fondness, and that one of them must think her in her dotage, who can tell her gravely "I am rich, you are poor, therefore make me richer." Is not this the language of an ungrateful favourite, who thinks his beneficent parent an old fool, and fit only to work or starve. But it seems that one species of agriculture still presumes to vie with the factories in getting money. As this is the great merit by which the Committee sustain the claim of the factories to further bounties, one would think that the same merit ought to have attracted the same philanthropy to the cotton planters, because they also gain and circulate an animating currency where they flourish. But no; this solitary agricultural interloper in the trade of growing rich, is treated as a culprit, for doing that which acquires for a factory the character of patriotism. It yields no profit to sixteen States, and therefore it deserves no bounty like the factories, for making money. But this is not all. It is to be treated as all monopolists treat those who have the presumption to interfere with their privileges. The profits of raising cotton, far from recommending them as objects of bounty, are considered as a trespass upon the capitalists' privilege of exclusive accumulation; and even the prosperity of this last item of successful agriculture, is to be assailed for the benefit of our enormous pecuniary monopoly, because it is so local as to yield no profit to sixteen States. It is impossible to find a more lasting argument for transferring the profits of agriculture to capitalists, than that they are local. Even factories may be transplanted from place to place. Capitalists can follow their speculations. Travelling pedlars are ambulatory. And poor agriculture, being immoveably local, ought to be made subservient to the avarice of these pedestrians, under the notion that cotton planters can do no good to sixteen States. But cannot the cotton travel as well as the cloth made out of it? Cannot the money earned by cotton and tobacco planters make its escape from them? Whence came the enormous capitals accumulated in a few large northern towns, if it is true, that local agricultural profits do not promote the general prosperity?
These assertions of the Committee, however, require a graver consideration, and are calculated to bring matters to light, of which they were either not aware, or did not perceive the force. It is freely admitted that currency is infinitely more plentiful in several States where factories flourish, than in those without them. It is even admitted that there is a local redundancy of it in a few hands, so very considerable at this juncture of its general scarcity, that it is seeking for borrowers; and that governments and individuals can obtain loans at a lower interest and premium than at any former period. If the factories produced this redundancy, they are already, almost suffocated with wealth, drawn to them by the property-transferring policy; and it cannot contribute to the general interest that a body of capitalists, already so rich that they know not how to employ their capitals, should, by an addition to this redundant capital, be bribed to use their influence for encouraging the extravagance of government, to obtain employment for their capitals by repeated loans. It is very important to consider how the enormous and local accumulation of redundant capital has been produced; because, if the diffusion of currency will dispense more national prosperity than its monopoly, the instrumentality of the factories towards effecting the latter cannot be a merit with the nation, however grateful it may be to their owners. Let us, therefore, take a glance at the process by which this has been gradually effected, that we may at least know by what road we have travelled to get where we are, and be able to determine, with our eyes open, whether we will proceed in the same track.
The local redundancy of money, confined to a few persons, and factories, was originally produced, and has been subsequently increased, by using currency more to transfer, than to exchange property. This policy commenced with our first finding system. The sudden appreciation of revolutionary certificates above twenty-fold beyond the value at which they were bought, was a transfer of property by law, of about one hundred millions from the public to a few fortunate speculators. The local residence of Congress, the local expenditures of the war, and the local ingenuity of those who formed the finding project, had amassed these certificates in the north, and their conversion into national debt, not by the scale of value like the paper money, but numerically, suddenly created a great property-transferring capital or currency. In this acquisition, the majority in no State participated; it was bestowed on the initiated few, skilled in the secrets of legislation, and able to manage its stratagems for their own emolument. The effects of a transferring currency being thus tasted by a capitalist junto,*30 and its wealth having invested it with legislative power, it of course adverted to banking as another item of the property-transferring policy. This second mode of transferring property settled in those districts where the first had provided a capital to give it efficacy. Thus the certificate capital was made to transfer property both by interest and dividends. The new project was imitated throughout the Union, most calamitously in States unprovided with the transferring capital created by the funding system; and whilst the people in those States wherein this capital resided, lost only the regular transfers of property caused by the banking and finding systems, those States wherein capital only existed partially or not at all, sustained a vast additional loss, by an unavoidable succession of frauds and bankruptcies. Every individual of all the States not enriched by this second deluge of property-transferring currency, contributed to the wealth of the few, who were so; but the western States which held a very small share of the artificial certificate capital, suffered most, and so sorely, that some of them have been searching for a remedy with great assiduity. Ohio struck at the root of the evil by endeavoring to repel the machine for transferring property from the people to capitalists, but she is told that this is both a wise and a constitutional operation, and that she must for ever submit to it. She has only an election it is said, between transferring the property of the people to the stockholders of the bank of the United States, or to stockholders of her own creation; but for want of the resident capital created by the funding system, and as she has no means of raising up an internal capitalist sect, she cannot avail herself of this poor right of election, and must remain tributary to the existing transferring capital, residing without the State. The late war was a third source for increasing the amount of property-transferring capital or currency. The loans, premiums, and expenditures, or the permanent profit made by the war, chiefly settled, where the existing property-transferring capital or currency chiefly resided; and became a great auxiliary to this monopolizing policy. The little war with France had previously given it some impulse. But the capitalists sect, not content with these several modes for transferring property from the great body of the people of every State to itself, and whetted by previous success, has ingeniously introduced two others for effecting this object. They still roll along this policy, although its accumulation, like that of a snow-ball, has already uncovered the humble herbage to many a pinching frost. By encouraging the extravagance of governments as a basis for loans, and by protecting-duty bounties, they have at length established the European system, by which employment for their redundant capital may be provided without limitation, and property may be transferred without end. The surplus beyond the prices which would be fixed by a freedom in exchanging property, gained by the owners of factories, transfers property without any equivalent, and goes in company with the other enumerated means, to the accumulation of a property-transferring capital, and not to the increase of a property-exchanging currency. It is an accumulation of the same character with that which creates capitalists in London, and pauperism in Britain; and transfers self-government from a nation to a combination between the governing and capitalist sects. The principle of this policy in all its modifications, consists in using currency or capital by legal contrivances, to effect the end of transferring property without an equivalent. If the assertion of the Committee, "that the local factories have created an animating currency around themselves,'' is true, it is an unanswerable argument against transferring to them more currency to be extracted from a suffering public by protecting duties. But the fact is, that our local and personal redundancies of money are not caused by the wares manufactured at these factories, but by the several enumerated modes for accumulating property-transferring capitals, among which the bounties given to factory owners is one of great effect. It is not accidental, but unavoidable, that these factories should fall into the hands of the capitalist sect, because old contrivances for transferring property both suggest and absorb new contrivances for the same end; and it is as evidently a mistake to imagine, that the factories have created a local redundancy of currency, which in truth created them, as that new loans caused old loans. This redundancy is notoriously caused by a current of wealth constantly flowing from all states, districts, and individuals, towards the places at which the attracting transferring capital resides; and by such currents individuals are fraudulently enriched, and the people fraudulently enslaved. Whether the animating currency said to reside near to factories arises from the lucrative nature of their employments, or whether it arises from the property-transferring policy, there seems to be no reason, either for giving bounties to factories which have been able to create an animating currency for themselves, or adding to the accumulation of capitals already partially created by laws, at the expense of the great body of the nation, languishing for want of an attracting capital, or an animating currency.
The Committee say, "that we flourished in war, and are depressed in peace, because manufactures then flourished, and are now depressed"—depressed by drawing around them an animating currency. They had before asserted that the policy of the government was adapted for war and not for peace. However doubtful it may be what species of war they mean by the last assertion, it is obvious that the quotation refers to our own war with England. "We flourished in that war." Who are We? Not the people of the States generally. They were loaded with taxes, deprived of commerce, and involved in debt. Those who really flourished by the war, can only be embraced by the assertion, and with these the Committee identify themselves. The families which flourished during the war, were the contracting and capitalist families; the latter by loans and premiums, and by selling the wares of their factories at a profit of fifty or an hundred per centum. Had the great family of the people flourished, they would not have hailed peace with transport. But we flourished in war, and are depressed in peace, say the Committee. And what is the remedy which we propose as a remedy for this depression? To revive in peace the property-transferring policy which operated so delightfully in war, that we may still flourish as we did then. Thus the Committee have made out their assertion "that the government was adapted for war and not for peace." It is a consequence of war to transfer property, and this has been hitherto considered as one of its evils. No, say the Committee, it is a blessing: we flourished by it during the war, and therefore this effect of war ought to be still enforced in peace, that we may still flourish. The congruity of the policy of our government in war with the interest of these We, was an unavoidable national calamity, and when peace enables it to avoid this evil of war, the Committee in supposing that our government is not adapted for peace, only mean that they do not push the transferring policy quite as far as it was carried in war. The capitalist family very modestly come forward and say, "We got more property transferred to us in war than in peace, and demand that the difference should be made up to us by protecting duties." Upon the same principle they ought to require the government to waste and to borrow.
The Committee having previously eulogized an overflowing treasury (the chief feeder of the grand European policy of using currency to transfer property) observe, "that revenue cannot be permanent whilst consumption is in a consumption, and that the means of consumption must be in the hands of our own people, and under the control of our own government." Consumption is in a consumption! A pun may be true as well as pretty, but we ought not to lose sight of its moral, in contemplating its smartness. Is this hectick natural or artificial? Have the people lost their appetites, or the power of gratifying them? How can they be gratified, except by exchanging the fruits of their own labours for the fruits of the labours of others? Has not currency superseded barter, and become the medium of such exchanges? If instead of being used for this purpose, by which consumption is both encouraged and supplied, it is used to accumulate wealth for capitalists, or any other separate interest ennobled or hierarchical, must not the consumption of the people be diminished? Suppose a law should pass for compelling the rest of a community to barter with a few capitalists hogs for hogs, or cattle for cattle, but forcing them to give two hogs, or two cows, for one. In this barter, the injustice would be seen by every one in his senses, because the case would be stripped of the obscurity produced by hiding the very same thing with the vizor of a transferring capital or currency. Compulsory exchanges of two measures of labour for one, between our capitalists or factory owners and the rest of the community, is the same case. The nation is not made richer by such exchanges of cattle and hogs, but their consumption is diminished, because those who give two hogs or cows for one, must eat less; and those who receive the two are not thereby enabled to eat double, and must of course accumulate stock instead of increasing consumption. Such fraudulent accumulations, in fact, make nations poorer by converting the profits of labour, the only fund for sustaining consumption, into a dead capital. They are like the iron chest of misers, which locks up, and robs money of its utility in promoting exchanges and consumptions. The annual sum, whatever may be its amount, transferred from industry to officers of government, to privileged corporations, and to receivers of bounties, beyond the expense of their individual subsistence, is transferred from the business of promoting consumption, to that of promoting accumulation. A robber might plead that he consumes some portion of what he seizes. A furious democracy, which invades private property, and scatters it among a multitude, might, with far more force, urge the plea of encouraging consumption, than our property-transferring policy. Is there any moral difference between effecting a transfer of property by violence, or by fictitious currencies or legal privileges, except that one must be transitory and the other may be permanent. It is curious to observe that mobs and aristocracies aim at the same object by the different instruments of force and fraud, and that though brothers in principle, they are converted into deadly foes by their contest for pillage.
As the policy of transferring property has increased, the diminution of consumption has followed. I remember when fifty times as many families drank wholesome liquors as now do, and when it was quite common to give good wine to the poor as a medicine. Many, then able to practice a charity, often extending to the preservation of life, now need the same charity themselves; but it is almost abolished by the restrictive system. In the time of one of the Edwards, a law was made in England prohibiting the common people from eating the best meats, and confining them to the most ordinary. As they were brought down to the food next to dry bread, we are nearly reduced to the drink next to common water. Do such privations increase consumption? Pardon me ye whiskey drinkers! I do not mean to deprive you of an enjoyment as delicious when compared with water, as neck beef is when compared with cold bread, but only to assert that there is something tyrannical in "using a control of consumption" to deprive you of the liberty of comparing whiskey with wine. But, say the Committee, "the means of consumption must be in the hands of our own people, and under the control of our own government." Never have I seen two more hostile positions coupled together. Of what value to the people are the means of consumption, if the government can control their use? One is almost a perfect idea of liberty, and the other of despotism. Can any power be more tyrannical than one which prescribes to its slaves what they shall eat, drink, or wear? Yes. A power to transfer from industry that portion of its profits by which the most agreeable gratifications can only be purchased, to the augmentation of another's capital. Before the last union, the means of consumption, and the liberty of applying those means, resided in the people of the States. Without the liberty of application, the possession of the means of consumption is entirely nugatory. Did the reservation to the States, or to the people, exclude a right essential to liberty? Certain rights were intended to be retained or surrendered to the Federal government; but it is now said to be so difficult to draw a line between these two classes of rights, that it is best to obliterate it entirely, by an unlimited power in Congress to control all our consumptions; and in virtue of this power to enable Congress to transfer our property to exclusive privileges. Is not this a cat, not of nine tails only, but of nine thousand, by which individuals and whole States, may be as well lashed as the maddest despotism can desire? And for what reason are we to bear this severe discipline? Truly, because it is inflicted by a government of our choice. But are high-minded Americans yet to learn, or can they be made to forget that every species of government, uncontrolled by constitutional checks, will become a despotism, and reduce their boasted liberties down to the standard of the rights of man (pardon me reader for using an obsolete phrase) as they exist in Europe.
Governments have universally exercised a despotic control of consumptions, sometimes from humane, but chiefly from fraudulent motives. Laws for limiting the prices of consumable articles, unattended by the desire of transferring property are of the former description; and laws for controlling consumption, with the covert intention of transferring property, of the latter. But whether the motive by which such laws have been dictated has been good or bad, their effects have been uniformly tyrannical or pernicious. They have even sometimes created the famines they intended to prevent. The whole code of these laws is a commentary upon the policy of subjecting consumptions to the absolute control of governments, however constituted. When these laws design to provide the multitude with bread, they starve them; when they pretend to supply the multitude with money, they impoverish them.
Let us look at a few of our own transferring laws. The bounties bestowed by the General and State governments upon supposed revolutionary officers and soldiers, may probably embrace ten thousand persons, and transfer property to the amount of three millions of dollars annually. This sum alone suffices to inflict upon us the additional transferring necessity of making loans. The bounties bestowed by the exclusive privilege of banking may embrace fewer persons, and transfer annually four times as much property. The manufacturers are said to amount, with their families, to half a million of persons. If the bounty supposed to be bestowed upon this number by controlling consumptions, should be equal to the pittance necessary to relieve an old soldier, it would be enormous; if it is only five millions, annually, it would yield only ten dollars to each person, a sum insufficient to influence their industry to any sensible extent. But the fact being that the bounty goes into the pockets of the officers of the supposed five hundred thousand manufacturers, it infuses only into them a corresponding portion of excitement. A capitalist would laugh at his share of the bounty, if he only received an equal share with his workmen. He would despise the pension of even a war-worn general. He pants for the rewards of a Wellington. Contemplate then an army of five hundred thousand manufacturers, commanded by fifty or an hundred capitalist generals, dividing the bounty arising from controlling consumptions among themselves, and you will see the controlling system as it operates. The military pension list dwindles into a feather compared with it. That dies daily; this daily grows. Russia has given to us a model of this policy. A hundred square miles of land, with all the people upon it, is sometimes given to a nobleman by the government, to enable him to work some mine for the public good. His privilege only operates over this limited space, and only enables him to control the consumptions of a few thousand people to enrich himself. The Federal government, far more bountiful than an imperial despot, extends the principle of controlling consumptions over millions of square miles and millions of people, for the public good also; but the noble capitalist is, undesignedly to be sure, enriched by it. The wages of the Russian boor, being barely necessary for his subsistence, instead of increasing, diminish his consumptions; he must regulate them by his scanty stock, and not by free industry. The profits of his master are applied to accumulation. Thus also our control over consumptions will neither increase consumptions nor the revenue. Should the army of five hundred thousand manufacturers each, unexpectedly, acquire some pittance of the bounty, it would only be the means of their consuming that which those who pay it would have otherwise consumed; but whatever portion of the bounty goes to enrich the generals of this army, correspondently diminishes both consumptions and revenue.
Suppose that comfort and pleasure should both be excluded as ends of consumption, and revenue should be allowed to constitute all their value. A wise politician, though governed by this sole motive, would not have his head as well as his heart indurated, so as to diminish the enjoyments of his fellow creatures, merely to defeat his own object. As wants are the basis of consumption, he would discern at once, that obstacles to their gratification would diminish its capacity to produce revenue; and that fruition united with industry, was one of the best resources for taxation. Industry, unattended by fruition, soon flags. The comparison between the civilized and the savage man would demonstrate to him, that the multiplication of wants and enjoyments, and not their dimunition, was the ally of national wealth and an ability to pay taxes; and therefore if he only extends his views to common defence and national welfare, he will not exceed that nice limit to which revenue may be carried, without diminishing those gratifications which beget or invigorate the ability to pay. How, then, has it happened that a truth so obvious should have been so frequently violated by proscriptions to human wants, and controlling consumptions? It has entirely arisen from using the power of controlling consumptions to transfer property to exclusive privileges. When fair and honest revenue for genuine public purposes is the object of a government, it will compute how much tax the consumption will bear, without killing the want or gratification which is to pay it; but when the object is to transfer property from the public to exclusive privileges, by controlling consumptions, the computation is, not how much the revenue for public purposes may lose, but how much the exclusive privileges may gain. This latter design is obliged to admit that it will cripple revenue to-day, but then it promises to set its dislocated joints in future. It also exclaims, "that revenue cannot be permanent whilst consumption is in a consumption," whilst it is innoculating revenue with a fatal hectick, by investing the government with the power of controlling consumptions, for the purpose of enriching an exclusive privilege.
The tyranny of a power to control human gratifications; its peculiar capacity, if exercised by the Federal government, for begetting the most oppressive partialities, and destroying the rights reserved to the people or to the States; and its evident hostility to the object of revenue; suggested to the Committee a necessity for rebutting such formidable objections, by a verbal vindication of the freedom they are stabbing with a political poniard, deadly to a creature compounded of wants and sustained by consumptions. They say, "that there should be no system of restriction, but one of reciprocity. That this is a free trade. That this reciprocal system of restriction has aided our commerce. That year succeeds year, and our troubles increase." In Russia, formerly, many articles of commerce were monopolized by the emperor; at present he contents himself with a monopoly of salt, brandy, saltpetre, and gunpowder; articles internally produced. As his monopolies were diminished, commerce flourished, and the prosperity of the country increased. He yet, however, extracts a very great revenue from the four articles of monopoly retained. Our protecting-duty monopoly, less moderate than the imperial, extends to an infinite number of articles, capable of producing a much larger income, than the four with which an absolute monarch is contented. But this income is given to capitalists, instead of being applied to public use like the Russian, and exhibits the pure policy unmingled with an extenuation, which has not been able to defend the Russian from the charge of despotism. In Russia, the government gets the whole profit of the monopoly; here the government cannot even divide the spoil with the capitalists.
Supposing it to be true, "that restriction united with reciprocity begets a free trade," as the Committee assert, must not the principle be as applicable to domestick as to foreign commerce? The former affects private property, individual happiness, and national prosperity, more deeply than the latter. If a violation of reciprocity between the United States and foreign nations may impoverish or enrich one of the parties, may not a violation of the same principle, as applicable to States or to particular interests, impoverish or enrich one of the parties also? Will not a restriction upon domestick commerce enrich factory owners, and correspondently impoverish those from whom this wealth is obtained? Between nations, it is said, that one restriction may balance or compensate for another; and upon this ground only, such restrictions are justified. Between States and domestick interests, the same policy must be justified upon the same ground, or be destitute of defence. Now, where is this compensating reciprocity to be found, in the regulation of domestick commerce by the protecting-duty restrictions, without which, in the opinion of the Committee, a free trade cannot exist? Is there any equivalent, reciprocal, domestik monopoly, bestowed upon the agricultural, commercial, or any other interest, except the banking? Yes, it is replied; we give you an invisible inoperative monopoly to compensate you for our visible and active one. Only learn to weigh smoke, and you will discover a fine paper system of reciprocity, in laws for prohibiting the importation of bread stuff, cotton, tobacco, or fish. To make this system completely reciprocal, upon paper, it only remains to prohibit the importation of land.
But let us no further imagine that complete retributive justice may be accomplished. That monopolies can be so nicely balanced, as that the loss inflicted by one, will be reimbursed by the profit acquired from another; and that the system will eventuate in leaving private property exactly where it found it, without transferring a cent from States to capitalists, or from one individual to another. In short, that a perfect system of domestick reciprocity and compensation may be established by commercial domestick restrictions, and its equal and fair execution effected, so as to produce a domestick free trade by these reciprocal restrictions. What will the nation gain by it? All the States, all interests and all individuals, would only stand in the same relative situation, which they previously occupied, with a single exception, namely, the general loss incurred by a successful execution of the system itself, according to its fairest profession. There is no political system so expensive, and requiring so many public officers, as that of regulating domestik commerce by restrictions, monopolies and reciprocities, because it abounds with temptations to violate a multitude of laws; and because such violations are considered as self-defence by the sufferers, though they are called frauds by the monopolists. The total of this expense is an enormous sinecure, if the system honestly leaves property where it found it, as is promised by the doctrine of reciprocity and compensation; and is therefore a dead loss and a living oppression to the people. If this doctrine lies when it promises not to transfer private property, it is a swindler; if it speaks the truth when it promises to prevent this fraud by reciprocity and compensation, its whole effect is to expose nations to the torments and expense of being watched and controlled in all their dealings and gratifications, by an army of public officers.
But suppose that this new idea of applying the doctrine of balances to private property, should turn out to be as fallacious as the old one of applying it to political power; and that some one monopoly should be able to absorb property, by its exclusive privileges, as the king of England absorbs power by his prerogatives, like the capitalists of the same country. Do the acquisitions of property now making by pensions, banking, borrowing, extravagance, and protecting duties, forbid such an apprehension? Where are the reciprocities and compensations for these transfers of property to be found? They are in fact always promised, but never found under any system of restriction and monopoly, applied to commerce, foreign or domestick; and such systems universally inflict upon nations the two misfortunes of having the property of individuals transferred to other individuals without an equivalent, and of being saddled with a heavy and lasting expense necessary to enforce the injustice.
A system of adjusting by law the numerous balances of property, is a machine infinitely more complicated, than the system of political balances. Ours is already so much disordered, as to have called forth the utmost talents of project-menders. Various schemes for patching it up have been tried and failed. The inference is, that all legal machines for transferring property are incurably vicious, and that industry and talents are better regulators of it. Their introduction by funding and banking caused some dissatisfaction, but the pretexts were specious, and the oppression was at first light. As they have been multiplied, the oppression becomes heavier, and the dissatisfaction increases. But the Committee say, "that a reciprocal system of restriction has aided our commerce." How? Why, they add "that year succeeds year and our troubles increase." Palpable contradictions are not arguments. Year succeeds year, and commercial restrictions are multiplied. What kind of aid is that by which our troubles are increased? But let us search for a reconciliation of assertions apparently so hostile. It cannot be our foreign commerce which has been aided by a system of reciprocal restriction, for the Committee have told us "that our exports have not increased in proportion to our population." And this is admitted to be growing worse as restrictions are multiplied. Our domestick must, therefore, be the commerce, aided by our restrictive system; and it is certainly true that protecting duties have operated more feelingly upon this, than upon our foreign commerce. The chief existing species of domestick commerce has been undoubtedly vastly extended, and the capitalists think aided by the system of transferring property, or as the Committee are pleased to call it, of reciprocal restriction; and our troubles have also increased in concomitancy with it. The system pretended to be levelled against foreigners, has only hit ourselves. How can this have happened except by its internal operation in transferring property, and accumulating capitals at the public expense? This, say the project-menders, has been caused by the oversight of not giving to industry some countervails, to balance the avails extorted from her to enrich privileges and capitalists; and therefore to establish a restrictive, reciprocal, free trade between agriculture and factories, it is necessary to get together colonies of mechanicks by bribes to capitalists, numerous enough to consume the fruits of the earth. When this is effected, the two classes will be employed in a delightful game of shuttlecock, that is, in passing a bag of money to and fro between themselves, without its producing the fraudulent transfers of property, which have only increased our troubles for want of this just reciprocation.
Thus the apparent contradiction is removed, and we are driven to consider, whether reciprocal restrictions can constitute, or were ever intended to constitute, a free trade, foreign or domestick. If these restrictions amount to prohibitions, yet if they are reciprocal, according to the position of the Committee, the trade is free. It would be exactly the case of a pacifick war, in which two nations should make laws that neither should attack the other, but that each should shed at home a reciprocal portion of its own blood. Let the agricultural and capitalist interests stand for these two nations. As protecting duties draw much of the blood or money of one, an equal portion of blood or money ought to be drawn from the other, to make a free trade or a peaceable war, by means of reciprocity. Neither can be effected, if the blood or money drawn from the veins or pockets of the one, should be infused into the veins or pockets of the other. That would only be the experiment of exchanging youth for decrepitude, by surrendering a vital principle. Rare as it has been to persuade or compel individuals to submit to this species of free trade, the operation has been frequently performed upon separate interests in all civilized countries, under some pretext of reciprocity. The pretext for it in the case under consideration, is less specious than any I have met with. Invigorate us now with your blood, say the capitalists to the agriculturists, and you shall bleed us in your turn, after both you and ourselves are dead. This is the proposed restricted-reciprocal free trade.
Chaptal, a French financier, has said "that it is impossible to reconcile hostile interests, and that the legislator must balance the censure he receives from one party, by the approbation of another." This honest confession denies the practicability of effecting just pecuniary balances by legislative favours or exclusive privileges, as contended for by the avaricious and ambitious schools, and avows the true principle of the policy to consist in suppressing the dissatisfaction of the injured, by the aid of the favoured class. The universal policy of these schools is to bribe each other with money or power extorted from nations, and to unite this power and money in self-defence. Such is the restricted, reciprocal, free domestick trade established in England; and exactly the same coalition which sustains fraudulent transfers of property there, is rapidly growing up here. The only reciprocity produced by the policy, is between the corrupters and corrupted, each party in the trade alternately acting in each character. We will gratify your avarice if you will gratify our ambition; or we will gratify your ambition if you will gratify our avarice—comprises all the negotiations and all the reciprocity between statesmen and exclusive privileges. This coalition has already become so formidable in the United States, that it openly and earnestly pleads its own cause, without faltering from beholding the mischiefs it has already caused. It remains to be seen whether it can delude the Americans by the same arts with which it has deluded the English.
All monopolies and exclusive privileges have succeeded by using the same argument urged by the Committee. It is invariably condensed in the single word "reciprocity." These stratagems say, "give us your money or your rights, and we will give you something more valuable. We will give you heaven for dirty acres or filthy lucre. We will give you protection for manors and feudal powers. And now, we will give you a restricted, reciprocal, domestick, free trade, for a profit of fifty or an hundred per centime upon most of your consumptions." To these arguments, they never fail to add their own verdict, that such reciprocities will advance the national welfare. But are they impartial judges? We have a notion that the only proper judge in giving away his own property, is the man himself; and that each person ought to make his own will. If it is a just notion, the capitalists ought to have no vote in transferring to themselves a vast tax upon the consumptions of every body else. If a man should combine with a government to take away another's property, the tyranny of the act would not be obliterated by the power of an accomplice. Had the man who foolishly killed the goose that laid the golden eggs, spared her life, and only persuaded her that she did not lay such eggs at all whilst he was daily taking them away, it would have been a case fitting both the capitalist and agricultural interest. The facts are stated to be "that agriculture has ceased to lay golden eggs; that factories will lay them in abundance; and that, when laid, the capitalists will give them to the agriculturists." I shall not presume to say which of the parties would represent the goose.
The Committee have ingeniously endeavored to divert our attention from a bad principle at home, to the same bad principle abroad. They say "the people are groaning under a restrictive system of bounties, premiums, privileges, and monopolies, imposed by foreign nations." If these devourers of property, even at a great distance, are so dreadful, as to make us groan, they will certainly make us roar like the European nations, when well fixed among us. Why do they make us groan though so far off? Because, as the Committee contend, they are stratagems for transferring wealth from one nation to another. Is their ability to prowl for property across an ocean, a proof that they will graze like lambs at home? How comes it, that fostered by our own laws, unobstructed by distance, unchecked by competition, and unresisted by retaliation, they will suddenly lose their very nature, and cease to transfer property fraudulently; whilst they make one nation tributary to another, in spite of the resistance opposed to their voracity by the sufferers? If it is the innate principle and design of foreign bounties, premiums, privileges, and monopolies, to transfer wealth from one nation to another, must it not also be the innate principle and design of domestick bounties, premiums, privileges, and monopolies, to transfer wealth from one domestick interest to another? In fact, this latter is the vital principle of the whole family of mercenary stratagems, and the political only imitates the military tactician in calling off the attention of his adversary from the true point of attack, by feigning a false one.
It is improbable that one nation can do any material or permanent injury to another, by its bounties, premiums, privileges, and monopolies; but quite certain that governments can injure, oppress, and enslave nations by these instruments. Should one nation even succeed in getting a little money from another by these tricks, it certainly loses a great mass of liberty at home; and a nation which should lose this money but retain its liberty, would be happier than one which should get the money but lose its liberty. But the free nation will speedily prove too hard even in the contest for wealth, with a nation which may be groaning as we are, or roaring like the English and Irish, under a system of bounties, premiums, privileges, and monopolies. Bounties and premiums given by the supposed cunning nation, upon their exportations, would frequently be received by the importing free nation. Privileges and monopolies would transfer property from productive labour to capitalists, and diminish industry; and would moreover produce a system of smuggling and expense, which would also foster the commerce of the free nation. It is as impossible to prevent it, as it was for Canute to stop the waves of the ocean; and if all the nations in the world should plunge yet deeper into the system of bounties, premiums, privileges, and monopolies, I believe that it would nurture the commerce of the United States, provided the imitation of this oppressive system was expunged from our statute book, and it was made really free. The invigoration of industry by its freedom, would inevitably work down the industry cheated by stratagems for transferring property, and heavily laden with taxation, just as a well fed and well paid army, will beat an army half starved.
The idea of what is called "a balance of trade" has furnished the authors of all the stratagems for transferring property internally by restrictions, privileges, and monopolies, with ammunition for this formidable political artillery, which has been so successfully used against the liberty and happiness of mankind. Accordingly the Committee observe "that commerce is exporting, not importing, and by reversing her employment she is expatriated," meaning thereby, that unless a country exports more than it imports, so as to have a pecuniary balance in its favour, it has a bad commerce or none. It is impossible to suppose, as the words imply, that exportation alone constitutes commerce, or that such a commerce could even exist. No selection of a basis upon which to erect a system of premiums, bounties, privileges, and monopolies, could have rivalled in dexterity this of a balance of trade. Its intricacy leaves it at liberty to assert whatever it pleases; and the total ignorance of the mass of every nation as to such assertions, invests the initiated few, if there are any such, with the advantage of making the most of the impenetrable secret, to advance their own designs. When an agriculturist murmurs at our system of bounties, premiums, privileges, and monopolies, he is told that the balance of trade is against us, and that it is necessary to pilfer him by this system to get it in our favour, because otherwise the nation cannot be wealthy. The argument is beyond his reach; he has no reply; he submits; but the Committee say he groans. If the happiness of nations really depends upon a pecuniary balance of trade, with other nations, several surprising consequences follow. A great blunder in the structure and scheme of this world must have been committed, as few, or at most not above half mankind, can acquire this enviable balance; so that one half the world must be in poverty and trouble. The situation of all inland people must be peculiarly miserable. They can never lose or gain much money by this balance; yet they must be made subject to domestick stratagems for transferring property by bounties, premiums, privileges, monopolies, and an expensive government, in order to obtain an enigma. Domestick commerce must be converted from an instrument for fair exchanges, into an engine for foul transfers of property, under pretense of realizing a dream. All mankind have hitherto mistaken the chief cause of their troubles. They have not been caused by forms of government, sustained by bounties, privileges, monopolies, and oppressive taxation, no, they have been caused by not having a balance of trade in their favour. If the idea is not nearly or quite a delusion, invented for fraudulent purposes, even supposing it to contain some truth, yet a nation which sells its liberty to exclusive privileges for the sake of a balance of trade, ought to ascertain how much money it will get, for the commodity it is disposing of and how long they will keep it, lest the bargain should turn out to be a bad speculation.
The speculation is merely a barter of liberty for privileges, monopolies, and heavy taxation. It does not propose to bring us more land, or more articles of consumption, in exchange for it. The minimum of necessaries, conveniences, and luxuries, is considered as the maximum of the supposed blessing. To be a good thing, the balance must be paid in money. The advocates of this balance of trade and exclusive-privilege doctrine, use our avarice to make us forget what money is. It is the representative or emblem of consumable property only, between nations. It is kept in fusion by circumstances beyond the control of any one nation. It is as hard to hold as quicksilver. If it is held, it is good for nothing. It is a bird of passage, and when it cannot find food in one country, it flees to another. If we purchase this fugitive at the expense of establishing privileges, monopolies, and heavy taxation, the necromancer, Commerce, waves its wand, and presto, it is gone; but the Tyranny incurred to obtain it, hangs upon our necks forever. Let us not give a valuable estate, of which we have been so proud, for a slave who will infallibly run way. Suppose a balance of trade should bring us ten millions annually in hard money, and even that we could retain it for ever. Should we be a cent the richer for it? Would it not depreciate like local paper money, the moment it exceeded the demand for employment? If we could find the undiscovered secret of prohibiting its exportation, and deprive it of its emigrating character, the accumulation of specie by a constant pecuniary balance of trade, would only produce the same effects as an accumulation of local paper money by the operation of the press, and only invest us with the blessings of depreciation. We should grow numerically richer, as a miser would by converting dollars into cents. If we cannot discover this worthless secret, restrictions, exclusive privileges, and monopolies cannot keep the money they promise to bring. If they should really extract money from foreign nations, instead of transferring property at home, the money cannot be retained, but the property transferred can. The residence of money is regulated by a power beyond the reach of legislation itself. It will go from the place where it abounds, to the place where it is scarce. As the emblem of commodities, it will search for the cheapest. If restrictions, exclusive privileges, and monopolies could bring in so much money, as to destroy the equilibrium of its value between ourselves and other commercial nations, they would have done their utmost; but the acquisition would be transitory, because the equilibrium would be restored, like the level of water after it has been disturbed by a storm. The influence of exclusive privileges, commercial restrictions, and monopolies upon other countries soon ceases; but it remains as to separate interests at home. If these stratagems could have both gotten and retained wealth from other countries, it would have somewhere been seen both enormous and permanent; for though they pretend to be too conscientious to transfer the wealth of their fellow citizens to themselves, they have no scruples about transferring that of other countries to their own. The bargain therefore made by a nation, which establishes commercial restrictions, exclusive privileges, and monopolies, to obtain a balance of trade, is only a permanent subjection to an oppressive policy, for the sake of a pecuniary acquisition, which will probably be never obtained, and if obtained, cannot be permanent. The oppression may grow into unlimited tyranny but the acquisition can never grow into unlimited wealth. The exclusive privileges and monopolies can never prevent the departure of money, but they may prevent the recovery of the principles surrendered to obtain its temporary appearance.
If the nature of money is correctly stated, the idea of governing its value by commercial restrictions, exclusive privileges, and monopolies, is more chimerical, than that of governing the local value of paper money by tender laws; and as its value is not regulated by these jugglers, but by the universal laws of commerce, it is evident that all their tricks for making money travel and settle where they please, are fallacious. To conceal their inability to effect any such thing, the whole protecting-duty, restricting, monopolizing or balance-of-trade family, have used paper money as a mask for their legerdemain. If it was true that protecting duties would bring to us a balance of trade in specie, what necessity could there be for the banking exclusive privilege, or paper money? This consideration is a test and detection of the real design of the protecting duty, and all other exclusive privileges. If the protecting-duty monopoly would secure for us a pecuniary balance of trade, a surplus banking monopoly of currency would be worse than useless, as serving to banish the money which the sister monopoly boasts of bringing in. It is curious to see the United States equally zealous for two monopolies, one to bring in money, the other for sending it away. Both have loudly boasted of their capacity to enrich the nation, and both have been very patiently tried. The results are, first, that the nation is distressed; secondly, that our governments have been made extravagant by confiding in these promises and are reduced to borrowing; thirdly, that exuberant personal capitalists have been created; and fourthly, that the two monopolies have generated a third, that of supplying the government with these loans. If the capitalists would give up two of these monopolies provided they might retain one, it might bear some distant analogy to their doctrine of reciprocity and compensation, as it would be a considerable retribution in a thief who had stolen three horses to return two of them; but to demand another horse because he had already gotten three, would almost stagger an adept in that species of property-transferring occupation. But reciprocity, compensation or restoration, constitute no part of the exclusive-privilege policy; one privilege or monopoly begets another; the two a third, as we have already experienced; and the more there are, the more they breed.
The supreme power of commerce has defeated laws for compelling local paper money to fulfil its promises of reciprocity and compensation; and therefore no laws can compel exclusive privileges and monopolies, which carry on their operations by the instrumentality of currency, to use it according to the principles of reciprocity and compensation, and not to use it for transferring property to themselves. The supremacy of the universal law of commerce, is demonstrated in the fate of every species of paper money. Foster it by privileges or defend it by tender laws, it is exposed to fluctuation, depreciation and death. A balance of trade in specie is subject to the same laws. It must flow out after having run in, or it will generate a putrid miasm. The Committee propose to produce an influx of specie by restrictions upon commerce; but if the project should succeed, the money would be useless, and might be pernicious without a reflux. This pecuniary balance must go out again in search of something. Not of a cargo of money in return for a cargo of money, but of moveable consumable property. Which would be the most economical mode of managing commerce for the purpose of obtaining a profit or a balance in our favour; to send out a cargo of wares to bring back a cargo of money, and then to send out a cargo of money to bring back a cargo of wares; or to bring back a cargo of wares for a cargo of wares? The first is a kind of exporting commerce recommended by the Committee, to come at a balance of trade.
Money, far from being the regulator of the balance of trade, has its own value regulated by the price of commodities; and the price of commodities being regulated by plenty or scarcity, by superfluity and want, by fashion and folly, by climates and soils, by durability and decay, and by a thousand other circumstances, which are continually fluctuating, the wit of man is unable to find the Proteus, or pecuniary balance of trade; or if it could be found, to hold the perpetual metamorphosis. This never-ceasing fluctuation is the basis of commerce, the invigorator of industry, and the equalizer of comforts. It is also the appraiser of money, and bills of exchange are used to execute its valuations. As money itself has no fixed value, the exchange of this emblem of commodities rises or falls, as the value of the substances it represents locally fluctuates. The shadow will go in spite of laws, wherever it can acquire most substance. A balance of money may be against a nation, and yet a balance of trade in its favour. If a nation gains more of this substance than it loses by commerce, its prosperity and comforts will be increased, although it should lose more of the shadow than it gains. The balance of the shadow of commodities, has for near two centuries been in favour of Spain, by reason of the money she has drawn from her provinces; but the balance of trade has always been substantially against her. Even commodities themselves cannot furnish any certain rule for ascertaining the balance of trade, because the value of labour by which they are produced, is unsettled. The cultivation of a poor soil, must give more labour in exchange for other labour to supply his wants, than the cultivator of a rich soil. Seasons and healthiness will constantly affect the value of labour. A balance of trade in commodities is however greatly preferable to a balance in money. It possesses the most valuable quality of money; that of being able to go abroad in search of other commodities needed by a nation. The only commercial value of money is its capacity to obtain from other nations articles for consumption, and commodities are articles for consumption. They constitute a find for taxation. Money itself is in a very small degree an article of consumption, nor is it susceptible of taxation, on account of its invisibility, except through the medium of its purchases.
How then can a balance of trade be ascertained? Not by money, because its value fluctuates. Not by labour or commodities, because scarcity, rarity, taste, sterility, fertility, seasons, and endless circumstances, render both scales utterly unsteady. Not by corn, because the value of that also is governed by demand, and influenced by most of the circumstances which influence the value of other commodities. As neither of these scales are sufficient for ascertaining a balance of trade; as such a balance, if obtained in money, could not be lasting, on account of the acuteness of money in search of its equilibrium; as a balance in commodities must be consumed or re-exported to procure other articles of consumption; and as even corn is subject to these laws, it follows that a balance of trade, estimated by either of these scales, is either an idea wholly chimerical, or exposed to perpetual fluctuations. But if we change terms, and rejecting this equivocal and fluctuating idea of a balance of trade, consider whether commerce has contributed to the wealth and prosperity of the United States, or has been the cause of the distress they are now enduring, the evidence will at once strike us as more intelligible, and the conclusion as more certain. Agricultural improvements, building houses and raising up cities, manufacturing improvements and ship building, are among the strongest proofs of a permanent increase of national wealth and prosperity. In these and other acquisitions the United States have been unrivaled by any nation ancient or modern. If our commerce has produced these effects, what reason is there for subjecting it to the regimen of exclusive privileges contrived for transferring property internally? With what exultation have we seen a free commerce delineating our wide-spreading canvass with all the representations of national prosperity! With what anguish do we behold commercial restrictions wrenching the pencil from this successful artist, and obliterating the work! Our commerce, both before and since the revolution, increased the national prosperity, with undeviating progress, and we are exchanging its solid benefits for restrictions, bounties, exclusive privileges, and monopolies, recommended by recondite and intricate speculations about the balance of trade.
The proposition itself "that commerce is exporting and not importing" urged by the Committee to justify this change of policy, would in my view contain more truth, if it were reversed. I should think that the most gainful commerce which imported more than it exported. If two dollars are exported and only one imported, is it a gainful commerce? The case is the same if such a commerce is carried on in commodities, or in their representative, money. If two measures of labour are exported in any form, and only one imported, a loss ensues. If one is paid for in money, so as to equalize the exports and imports, that money is only the representative of the labour it leaves behind, and must be sent back for it; or remitted to some other place upon a similar errand. If a nation can pay for its imports, the greater they are the more it will flourish, as a superiority in gratification is the highest degree of human prosperity; as these gratifications re-create themselves by exciting industry and as this industry obtains its gratifications by things which would be of no use to it, unless they are so employed. If a nation cannot pay for its imports, the trusting nation will be the loser, and the importing nation the gainer. But no importing trade could continue with an inability to make payment. It would inevitably stop of itself. Does not this fact explode all the theories about the balance of trade? Does it not prove that commerce must contain some reciprocal compensating ingredients, or cease, according to its own laws, to exist.
The Committee have endeavored to overturn all these ideas by the following assertions. They say
that the flood of importations has deprived currency of its occupation. There is more specie in the United States than at any former period, but it is not currency because it is unemployed. The importation of foreign goods was never so great as when our embarrassments were produced. The importer's ledger ought to settle the question. In cases of bankruptcy foreign creditors appear. We have only the miserable and ruinous circulation of a currency for remittance to foreign nations. They hold the coin and we hear it jingle. The excess of exports over imports is the rate of profit.
Dictums of impartial judges are the lowest species of authority, and those of lawyers pleading for clients are of no authority at all. Both are often inconsistent with truth, contrary to sound principles, and liable to answers by which they are easily refuted. The report of the Committee abounds with this kind of authority, uttered with a confidence often inspired by a destitution of better arguments. Let us see if this family of dictums can bear an examination.
"The flood of importations has deprived currency of its occupation." So then, the flood of paper money has been no cause of our troubles; on the contrary this flood of commodities has deprived the flood of bank paper of its occupation, and thereby caused the national distress. Had the exchange of property been the occupation of paper money, the greater the importation of exchangeable commodities, the more this occupation would have been increased. But if the chief occupation of bank paper is to transfer property, and this flood of importations has really diminished that occupation, the regret expressed by the Committee on the occasion, is only an indication of their preference for the transferring policy. It is hardly conceivable how the introduction of more exchangeable articles, could have deprived currency of its occupation in exchanging property, except, that as cheapness is a consequence of plenty, less currency suffices to exchange more commodities, than when the price of these commodities is enhanced by an artificial scarcity. In this view, the scarcity of manufactures produced by the protecting-duty system, undoubtedly increases the occupation of bank currency in transferring property. If this flood of importations had consisted, not of things represented by money, but of the representative itself, would not the universal law of commerce have operated upon an exuberance of money? The quantity of money being increased, and the stock of commodities diminished, from which money derives its occupation of facilitating exchanges, both the causes which generate a depreciation of money would have existed. Scarcity or plenty affect the value of money, precisely as they affect the value of commodities. There is however a great difference to us between the depreciation of each. The depreciation of foreign commodities produced by exuberant importations is a loss to foreign nations, and a gain to us; but the depreciation of money, which would also be produced by exuberant importations of that article, would be a gain to foreign nations, by enhancing the prices of their commodities, and a loss to ourselves, until an equilibrium was produced. A depreciation of money is not an accumulation of national wealth, and therefore a nation may both abound in currency, and also become poor and wretched. This is, invariably, effected by the system for increasing currency, combined with regulations by which its occupation of exchanging property is contracted, and that of transferring it, is extended. The supreme law of commerce governs currencies both local and universal. We have fully experienced its uncontrollable power. A redundancy of paper money enabled individuals to acquire more currency, nominally, but its cheapness or depreciation made most of them substantially poorer. Nations are individuals in respect to universal currency. A redundancy, if they keep it, does not enrich them; because its value is reduced by depreciation. A specie balance of trade in favour of Spain for two centuries, attended by a domestick system of exclusive privileges, exhibited a rich class, and a poor miserable people. Her exuberance of money and its consequent cheapness, served only to invigorate foreign industry. If we could, by the tricks of exclusive privileges, import annually the product of the mines of Mexico and Peru, we should be enriched like Spain. It would bribe industry (the only true and lasting source of national wealth) to become idle; and excite fraud to become industrious. If industry is the only true and lasting source of national wealth, the idea of burdening it with exclusive privileges; of taxing the great mass of it to obtain a balance of trade by giving these taxes to one or a few of its objects; must be chimerical. If the favoured products should become redundant by the tribute they receive from the others, this redundancy would produce depreciation, and terminate, not in a retribution for the expense they had cost, but in a positive loss. A redundancy contains the seeds of calamity unless it is dissipated. Whilst Spain clung to the idea of enriching herself by a redundancy of money, Holland, but a splinter of the enormous Spanish monarchy, pursued a policy precisely the reverse. A flood of importations in money and a flood of importations in commodities, side by side, engaged in war and in commerce; and tried both the prowess and profitableness of the adverse systems. Rich mines and every physical advantage were on the side of Spain. A free trade, but few people, and a small slip of half-drowned country, on the side of Holland. A free trade turned the scale, and bestowed a double victory on the dwarf. Is not this fair trial more weighty towards ascertaining truth, than a complexity of facts and speculations, so useful to monopolies and exclusive privileges, but so inimical to plain honesty and common justice? It proves that a balance of trade in imported commodities, excites industry by increasing enjoyments, and by furnishing a surplus for re-exportation; and that it augments wonderfully both national wealth and strength. The abundance of commodities invited by a freedom of commerce, enables the re-exporting merchant to make up cargoes fitted for their destination, more speedily and cheaply, than in ports stripped of variety by commercial restrictions; and to undersell competition by a vast economy of time and expense.
The Committee proceed to say "there is more specie in the United States than at any former period, but it is not currency, because it is unemployed." We have then already obtained a redundancy of specie, and the policy it has suggested to the Committee, is to increase it by exporting more than we import; and to diminish its business of facilitating exchanges, by prohibiting the importation of commodities. If the existing redundancy is a useless surplus, would not its augmentation, if it can be augmented by a domestick monopoly, produce another useless surplus? If with a surplus of currency beyond our wants, national distress has appeared, it is demonstrated that the remedy for national distress is not deposited in a surplus of currency; and the speculations in reference to a pecuniary balance of trade, having such a surplus for such an end in contemplation, are of course exploded. The proposed monopoly system also says, that we possess a great surplus of agricultural commodities, which, though not entirely unemployed, like the surplus of money, is yet by abundance considerably diminished in value; and in its patriotic enthusiasm, it has humanely prohibited the importation of more tobacco and other articles, lest this agricultural surplus should become quite useless. The same reason was still stronger for prohibiting the importation of more money, because we have already a useless surplus of it. Instead of candidly acknowledging that a surplus or redundancy either of money or agricultural products must be governed by the same commercial laws, the Committee press into view the latter disguised in the garb of a calamity, and seize upon the prevalent love of money to make us believe that a redundancy of money is a blessing, and to hide, with this delusion, the evils brought upon mankind by monopolies and exclusive privileges. Their doctrine is this. "Continue and increase commercial restrictions, and tax agricultural products because they are of very little value, to increase a surplus of specie, already of no value at all for want of employment." It would be a better policy to bring in more flour, cotton, and tobacco, as these commodities might have been of some use, instead of laying in the vaults of a bank, like a dead nabob in his funeral robes. But how did this useless surplus of specie get into the United States, if the balance of trade in that commodity is against us, and why is it not employed as currency? The answer to the first question cannot be very conclusive; we cannot unravel the labyrinths in which money travels; custom-house computations are uniformly erroneous; the prices at which commodities actually sell, can never be ascertained; whether this useless surplus of money has been brought here by our own commodities, or by the re-exportation of foreign goods, or by the sale of bank and debt stock to foreigners, we cannot tell; we know, however, that it has not come gratuitously. But the answer to the second question is more satisfactory. The imported specie is useless as currency, because we have more bank currency than we can find employment for, and because the expulsion of foreign commodities to a considerable amount, has correspondently diminished the use of money for facilitating exchanges. If the dead specie surplus, said by the Committee to exist, has been produced by the sales of stock, commerce will inevitably seize and scatter the accumulation, unless we should be saved by a beneficial bankruptcy of all our banks. The capitalists look with dismay at this possibility, because it will break to pieces the master wheel of the property-transferring machine; and therefore they strive by prohibitions and restrictions to deprive the nation of a free trade which would bring in comforts and wealth for individuals, lest it should seize the specie deposits of banks, and destroy a fiction for transferring property. Their object is to regulate commerce for the attainment of two ends; one, to prevent it from assailing bank deposits; the other for preventing it from supplying individuals with necessaries, and investing capitalists with a privilege of doing so at double price. Thus it happens that they advise us to destroy the best and most enriching species of commerce, that of exchanges, and to sell our products for specie, though they tell us that this specie cannot find employment. By destroying our commerce, they hope to save their banks; by prohibiting importations, they will certainly increase their capitals. And thus the banking and manufacturing capitalists are united by a common interest, the magnitude of which is sufficient to awaken the great talents they possess, and to excite all the industry and perseverance they have shown. If the expedient of protecting duties is able to keep the specie deposit in the banks, and prevent their currency for transferring property from blowing up, it would be able to supply the nation with a currency chastely devoted to the end of exchanging property, and render it unnecessary that a currency for making property tributary to capitalists, should any longer exist.
We are startled to hear from the advocates of the protecting-duty system such positions as these.
Money is so scarce, as to cause general distress, and to impede both agricultural and manufacturing improvements. It is so scarce, as to disable the people from paying taxes, and to force the government to borrow. It is so scarce that debtors are unable to pay their debts. Money is so plenty, that a great sum of specie is useless for want of employment. It is so plenty, that capitalists know not what to do with their abundance. It is so plenty, that loans are obtained by government at a lower rate than ever was known before, and individuals who can secure re-payment, can borrow below the legal interest.
But a little reflection will convince us that these apparent contradictions are all true. By adverting to the legal arrangement of the community into monopolists and contributors to monopolies, they may be reconciled. With the contributors money is scarce; its scarcity has caused general distress, because the contributors constitute by far the greatest portion of the community, its scarcity bears hard both upon agriculture and mechanics, because both belong to the class of contributors; its scarcity disables the people from paying taxes, because they also belong to the contributing class; and disables debtors from paying their debts, because by incurring these debts they have not been able to escape from the contributing to the receiving class. Now let us turn our eyes from that side of the canvass, on which about ten thousand of us, out of ten thousand and one, are depicted, to the little smiling fat group which complains of a redundancy of money. Alas! say these gentlemen, money is so plenty, that we have a large sum of specie which is not currency for want of employment. Capital is so abundant as to stifle enterprise and speculation. It is so abundant, that when loans are called for, capitalists jump over each other's heads in a contest of underbidding. It is so abundant that they rejoice in the public calamity of borrowing. It is so abundant that they buy stocks at enhanced prices.
Notes for this chapter
"Junto" was generally a derogatory term used to describe a corrupt elite in control of a local or state or the federal government.
End of Notes
Continue reading: Section 1, Part 3.
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