Democratick Editorials: Essays in Jacksonian Political Economy

By William Leggett

Ten years after Thomas Jefferson’s death in 1826, an outspoken young editor in New York City was reformulating and extending the Jeffersonian philosophy of equal rights. William Leggett, articulating his views in the columns of the New York
Evening Post,Examiner, and
Plaindealer, gained widespread recognition as the intellectual leader of the
laissez-faire wing of Jacksonian democracy…. [From the Foreword by Lawrence H. White.]

Book Cover

Translator/Editor

Lawrence H. White, ed.

First Pub. Date

1834

Publisher

Indianapolis: Liberty Fund, Inc. Liberty Press

Pub. Date

1984

Comments

Essays first published 1834-1837.

Copyright

Portions of this edited edition are under copyright. Picture of William Leggett courtesy of United States Library of Congress. Original contains the inscription: "Engraved by Sealey, from a Painting by T. S. Cummings, N A." and includes Leggett's signature below.

SEPARATION OF BANK AND STATE

Plaindealer, August 5, 1837. Text abridged and extract deleted.

We have heretofore more than once invited the attention of our readers to the remarkable sentiment of General Jackson, expressed in the document giving his reasons for the removal of the publick deposites from the Bank of the United States, that it was his desire “that the control of the banks and the currency should, as far as possible, be entirely separated from the political power of the country,” and that “the action of the federal government on the subject, ought not to extend beyond the grant in the Constitution which only authorizes Congress to coin money and regulate the value thereof. All else,” said General Jackson “belongs to the states and to the people, and should be regulated by publick opinion and the interests of trade.”

Here, in the compass of a few words, is given the outline of the only true system for this country to pursue in regard to banking. What alone is needed—what is demanded by both the letter and spirit of our institutions, and by the fundamental principle of liberty, is freedom of trade, and a complete separation of bank and state. We ask that the federal government should not connect itself with any banking association in any way or degree, and that the state governments should likewise wholly separate themselves, in every respect, from the banking and credit system. When this is once carried into full effect, and banking is left to be conducted on the same basis with other branches of private traffick, without either peculiar encouragement or peculiar hindrance from the laws, we shall rise to a higher degree of general prosperity than we yet have ever attained.

Under such a free and equitable system, it is true, certain classes of the community, who contribute nothing to the national wealth, the mere buyers and sellers, the mere commercial go-betweens, the mere factors of the farmers, mechanicks, and labourers, (for the merchants are no more) may not be afforded the means of outstripping all others in the fruits of affluence, and enabled to riot in every sort of luxury and extravagance, by incurring enormous debts through the instrumentality of bank-credit, which the hard-working men and women of the country have at last to pay with the earnings of incessant toil. This consequence may not and would not result from a free trade system. And if it can be shown that this consequence is more to be desired than diffused happiness and prosperity; if it can be shown that the encouragement of a mad spirit of commercial enterprize, totally regardless of the good old distinction between
mine and
thine, is better than steady industry and gradual accumulation, obtained without violating the principles of morals; if it can be shown, to the conviction of sober reason, that a magnificent city is better than a fruitful and well cultivated country, and a luxurious mercantile class better than a thriving population engaged in all the various branches of productive industry and useful occupation: if these things can be demonstrated, we say, then shall we at once and forever abandon the position we now maintain, and raise our voice, with those of the monopolists, in demanding from the federal government a national bank, and from the states a continuation and extension of their systems of exclusive chartered privileges. But till these points can be clearly proved, we shall continue to do battle on the side of freedom.

It is a very common thing to point to the rapid growth of our commercial marts, our vast enterprises of internal improvement, our canals, railroads, steamboats, spacious hotels, new cities springing up in the midst of deserted cornfields, and untenanted towns all over the country, as evidences of the wonderful effects of the monopoly bank credit system. We admit these are, in a great measure, the effect of that system. But we are of those who consider them, in the quaint phraseology of old Polonius, “effects defective.”

Ill fares the land, to hastening ills a prey,

Where wealth accumulates, and men decay.

If the great end of the government is to promote the especial good of mercantile speculators, land speculators, and stock speculators, then indeed we shall receive these things as cogent proofs of the excellence of the monopoly bank credit system. But we are of that
agrarian school of politicks which teaches that the sole duty of government is to extend equal protection to all classes of people, to secure them from mutual aggression, and beyond this to leave them to the influence of their natural desires and affections, to those influences of enterprise and competition which are called the laws of trade. The monopoly bank paper system does a great deal, it is true, for the speculative trader on anticipated means. It enables him to build a princely mansion, fill it with costly furniture, stock his cellar with the choicest wines, and load his board with the most luxurious viands. It enables him, without a dollar of actual property, earned by useful toil, to ride in a splendid equipage, repose on a couch of down, and realize all the advantages of prodigious wealth. But what does it do for the farmer who laboriously cultivates his few acres, and obtains, in return for continual toil, but enough to sustain him in the execution of his task? What does it do for the poor mechanick, whose lap-stone or anvil rings all day long with the click of his incessant hammer? What does it do for the poor labourer, who rises with the sun, and sweats, like a beast of burden, in its burning glare, till evening comes to dismiss him to a few hours of heavy slumber on his straw-filled pallet? Let us hear what praises there are to be bestowed on the monopoly bank credit system as it affects the condition of these people who, if government has privileges to give, are entitled, not less than the mere buyer and seller of silks and laces, or the blowers of stock bubbles, to an equal share.

We are no enemy to credit, as we have said a thousand times. We are no enemy to a free and natural system of credit between man and man, the result of mutual confidence, the exercise of one of the kindliest attributes of our nature, without which the frame of society would fall into dividual fragments, and be utterly destroyed. But we are an enemy to a monopoly credit system, which bestows all its advantages on a few, at the expense of the many; which raises to undue importance the undignified vocations of traffick, and depresses to unnatural lowness, as if they were intrinsically mean, the pursuits of agriculture and the mechanick arts. Your monopoly credit system fosters the city, but it ruins the country; it builds up lordly mansions for the keen-eyed sons of trade, but it leaves to irremediable dilapidation the cabins of the farmer and mechanick; it encourages luxury and profusion among the few, and spreads penury and vice among the many. It is a demoralizing system. It makes the acquisition of sudden wealth the prime object of general effort, and blunts the publick moral sense as to the means of gain. It deranges the whole economy of life, unsettles the natural balance of industry, and leads, with inevitable certainty, at periodical intervals, to such explosions as that which has now scattered ruin over our land.

Give us freedom, and leave credit to adjust itself to the wants of society, without political stimulus or restraint. Give us freedom, that the madness of speculation may not involve the government in all the fluctuations of trade. Give us freedom, that, while we boast of our equal rights, we may not in truth be subjected to a worse tyranny than was ever imposed on man by the feudal oligarchists of the middle ages. We have separated Church from State. It yet remains for us to separate Bank from State, and teach the world, by a new and sublime illustration, the invariable efficacy of THE VOLUNTARY PRINCIPLE.

· · · · · ·

37.

Jean Baptiste Say, French classical economist, was author of
A Treatise on Political Economy, the fifth American edition of which was published in 1832, from which this quote is likely taken.—Ed.

“SPECIE BASIS”

38.

In the free banking system of Scotland, which Leggett praises elsewhere, almost all banks operated with unlimited shareholder liability for bank obligations. They experienced no runs for specie, though their specie reserves were a small percentage of their note and deposit liabilities.—Ed.

THE CREDIT SYSTEM AND THE ARISTOCRACY

39.

Roughly, “it stands to reason that painted falsehood, in much it is more likely, occasionally conquers the naked truth.”—Ed.

40.

A reference to Daniel Raymond,
The Elements of Political Economy, the second edition of which was published in 1823.—Ed.

RIOT AT THE CHATHAM-STREET CHAPEL

Categories: William Leggett