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Title: Equality
Author: William Batchelder Greene
Date: 1849
Language: en
Topics: equality, mutualism
Source: https://www.libertarian-labyrinth.org/featured-articles/william-b-greene-equality-worcester-palladium-1949/
Notes: This series of articles from The Worcester Palladium would be incorporated into Equality (1849) and Mutual Banking (1850), which would, in turn, become the basis for the subsequent editions of William Batchelder Greene’s Mutual Banking.

William Batchelder Greene

Equality

For the Palladium.

1. Equality.

What particularly characterized Sparta? Sparta was the city of the

equals: the social name of the citizens of Sparta was this—the equals.

Sparta was composed of ten thousand citizens, organized upon the

principle of equality; and these citizens ruled over thirty thousand

Laconians who were not possessed of this title of equals; over a

multitude of Helots; and over a multitude of Slaves. Sparta was thus an

embodiment of the most horrible inequality, if we consider it according

to the totality of men who composed the empire of Lacedæmon, and lived

on its territory. But Sparta was a model fraternity, a model equality, a

model community, if we consider the true Lacedemonians only, that is to

say, the equals. Sparta was regarded by all the grave and serious

philosophers of antiquity as the inspiring city; in their eyes it was

holy and venerable, even as Rome was holy to the Romans, and Jerusalem

to the Jews. Why was Sparta thus regarded as holy? It was because, in

the midst of this atrocious barbarity, in the midst of this cruel

inequality, a holy idea was embodied, the idea of equality—the equality

of a certain number, though not of all.

This principle of equality was consecrated in the great Spartan

Sacrament, the repast in common. No man could be present at the repasts

who was not one of the equals; and no one could be considered one of the

equals who did not attend the repasts regularly. Participation in the

common repasts was the sacramental sign of citizenship, and conferred

the right of voting in public affairs. A citizen of Sparta, therefore,

was a man who took his place at the public banquets: this is the summing

up of the legislation of Lycurgus, whose whole system is involved in the

institution of the Social Banquets.

This institution of the repast in common, was not an isolated

institution of Crete and Sparta; for Aristotle tells us that it was

widely extended; that it was established especially in Italy and at

Carthage. Be this as it may, it cannot be denied that the repast in

common obtained in Egypt. The people of Egypt were divided into three

classes; that of priests, that of warriors, and that of laborers and

mechanics. The two higher classes, the priests and the warriors, lived

in community; the priests by themselves, and the warriors by themselves.

The priests of Egypt, like the monks of the middle ages, had no private

property, but lived in common, in edifices belonging to their order. As

for the warriors, a certain portion of land was assigned to each of

them; but no warrior was permitted to cultivate the same field two years

in succession, for fear that he should attach himself to it, and

consider it as his own private property. The people of Egypt were

divided into two camps; in one were the priests and the warriors, who

constituted the aristocracy; in the other was the mass of the people.

The priests among themselves, and the warriors among themselves, lived

in community, according to the principle of equality; and the people

were taxed to support them. The people, the inferior caste, owned in

their own right the property which was in their hands; they were

proprietors, and paid taxes. The members of the higher castes had no

interest separate from that of the corporations to which they belonged;

they were exempt therefore from envy and jealousy, and sat down as

brethren and equals, with their brethren and equals at the common

banquets: the members of the lower castes were given over to competition

among themselves, they had nothing in common with each other; they

looked upon each other as rivals and enemies; they ground each other as

mill stones grind each other when they have no corn to grind; and thus,

divided among themselves, hostile to each other, moved by cupidity, and

recognizing neither equality nor fraternity, they became the victims of

a cruel oppression—they became the caryatides which sustained the social

system of the valley of the Nile. Is the supposition devoid of

plausibility that Moses borrowed the sacerdotal principle of the

Egyptians, when he took no account of the tribe of Levi (the Hebrew

Priests) in the division of the conquered land? “The Priests, the

Levites, and all the tribes of Levi, shall have no part nor inheritance

with Israel. "The Lord is their inheritance as he hath said unto

them.”—Deut. 13: 1, 2.

“Moses was learned in all the wisdom of the Egyptians, and was mighty in

words and in deeds.”—Acts 7: 22. Through his relationship to Pharaoh’s

daughter, he was connected with the Egyptian aristocracy; and he was

unquestionably initiated into all their secrets. Did Moses borrow

anything from Egypt except this principle relating to the priesthood? He

certainly borrowed a multitude of institutions and, among others, that

of the repast in common. The Jews had three great feasts, the first of

which, and the most solemn, was the Passover. The obligation of every

Jew to celebrate this festival was so great that whoever neglected it,

was legally liable to excommunication—to be cut off from the Jewish

nation. “The Lord spake unto Moses, saying, Speak unto the children of

Israel, saying, "The man that is clean, and is not in a journey, and

forbeareth to keep the Passover, even the same shall be cut of from

among his people.”—Num. 9: 10-13. As in Sparta, he that refrained from

the public repasts, lost his right of citizenship.

Moses had evidently two objects in view in his legislation: on one hand,

the passover distinguished the Jews from all other nations; and, on the

other, it united them among themselves, and made them brethren. On one

hand, it was the festival of emancipation, of the exodus from slavery;

it was the sign of separation from all other nations; it was the sign of

insurrection against all foreign tyrants, whether Egyptians, Assyrians,

Persians, or Romans. But, on the other hand, it was the sign of the

fraternity of the Jews among themselves, the sign of their union; it was

for them (what Christianity has developed) a veritable communion. In

Sparta, there were ten thousand equals, and a multitude of slaves; in

Egypt, there were a few priests and warriors, who were equals, and a

multitude of slaves. But behold the progress of liberal institutions!

Among the Hebrews, there was neither a higher caste, nor a lower caste:

for all formed one great nation of equals, and all came by a common

right, and seated themselves at the great national banquet! For, though

the tribe of Levi existed under a peculiar organization, yet the Levites

never formed an aristocracy in Israel. The legislators of Egypt and

Sparta, established inequality in the bosoms of the nations to which

they gave laws: Moses established equality in Israel, but it must be

confessed that he sanctioned inequality among the nations. He taught

that the Hebrews were a holy and peculiar race, people and nation, by

right of birth; and excluded by his doctrine, the other nations from the

favor of God. It was necessary that a new religion should arise,

establishing equality among the nations, and teaching that “God is no

respecter of persons; but that in every nation, he that feareth him and

worketh righteousness is accepted of him.”—Acts 10: 35.

But how did the Jews partake of the passover? “Thus shall ye eat it;

with your loins girded, your shoes on your feet, and your staff in your

hand: and ye shall eat it in haste; it is the Lord’s passover. Ye shall

eat the flesh in that night, roast with fire, and unleavened bread; and

with bitter herbs shall ye eat it. And ye shall let nothing of it remain

until the morning: and that which remaineth until the morning, ye shall

burn with fire.”—Exod., ch. 12.

If you object that the Cretans and the Spartans ate every day in common,

while the Jews assembled at the social banquet only once a year, and

then only by families; if you say the Spartans communed daily, while the

Jews went a whole year without communion, and ask what possible relation

two such different practices can have with each other, we answer: Your

objection does not appear to be at all profound; for the Hebrews were an

agricultural and pastoral nation, not living in one great city; nor in

the neighborhood of any one great city, but spread over a great extent

of country; and they could not, therefore, by the nature of the case, be

often assembled in one place. For these reasons, Moses could not

establish the life in community, according to the higher Egyptian

pattern, among his people; neither were his successors able to do it

after him. The people, therefore, were given over to a great extent, to

the kind of life that reigned in Egypt in the lowest caste—the life in

non-communion. The individual and family were thus abandoned to

themselves without social intervention, and, by necessity, inequality

with all its evils results from this abandonment. Moses understood this

very well. The passover, the only communion possible among men thus

separated, remedied none of these evils: it was a sign of nationality

and general unity—and that was all.

But Moses was not to be arrested in his legislation by a superficial

difficulty of this nature. By another and a still more remarkable

institution, he applied an effectual remedy against the inequality and

individualism which threatened to establish itself among the families of

Israel. We refer to the institution of the Sabbath. First, we notice the

Sabbath of days: “The seventh day is the Sabbath of the Lord thy God: in

it thou shalt not do any work, &c.”—Exod. 20: 10. Afterward, we notice

the Sabbath of years: “Six years thou shalt sow thy field, and six years

thou shalt prune thy vineyard, and gather in the fruit thereof; but in

the seventh year shall be a Sabbath of rest unto the land; a Sabbath for

the Lord: thou shalt neither sow thy field, nor prune thy

vineyard.”—Levit. 25: 3, 4. Then we notice the Sabbath which follows

seven consecutive Sabbaths of years:—let the reader turn to his Bible,

and read the whole twenty-fifth chapter of Leviticus, for it is well

worth his while to do it. Every fiftieth year, the trumpet of the

Jubilee sounded throughout all the land of Israel, proclaiming liberty

to all the inhabitants thereof. Whoever had sold his property during the

forty-nine years, found it return to him on the day of Jubilee. No man

could sell his house or his lands beyond the day of Jubilee; on that day

all contracts of sale were broken, all debts were expunged. What a

household-exemption law was that! History furnishes us with but one

example of the actual application of an agrarian law; and then the law

in question was promulgated and applied by the direct command of the

Almighty himself. The great characteristic social law of the Jews was a

levelling law. Let the reader turn to the twenty-fifth chapter of

Leviticus, and confess that the Mosaic law is an organization of the

principle of Equality. [1]

There are three forms or manifestations of inequality.

The first is Slavery, which weighed upon the lower classes in Sparta and

Egypt, upon the lower classes in all the nations of remote

antiquity;—yea, which prevails now in many of the nations of

Christendom.

The second is inequality among the nations; the Jews regarded themselves

as a holy and elect nation, contradistinguishing themselves from all the

rest of the world, and characterizing the citizens of all gentile states

as reprobate and impure; the Greeks contradistinguished themselves from

the barbarians, and held that all who were not Greeks were worthy only

to be slaves; the Roman citizen, by his mere right of citizenship,

looked upon himself as lord and master over all other men.

There is a third form of inequality, which prevails at the present day,

founded on the false organization of credit.

The legislation of Moses anathematized all personal slavery, and

pronounced an eternal curse against the first form of inequality [2] but

Moses sanctioned the second form of inequality—the inequality between

nations.—When our Lord came into the world, no man possessed any right

which he did not draw from the race to which he belonged; no natural and

inalienable rights of man were recognized. Was not Paul himself, the

great destroyer of national inequality, obliged to have recourse, not to

the principles of natural justice, but to his rights as a Roman citizen,

to save himself from torture?—Acts 22: 22–39. What was the great

foundation of the doctrine of Paul? Was it not that God looked with

equal favor upon all nations? Was it not that God, in Christ Jesus, had

broken down the middle wall of partition which separated between Jew and

Gentile? Was not Paul’s doctrine a reaction against the Mosaic law? How

does the Apostle characterize the new order of social existence which

was to grow out of the preaching of the Gospel? He says, “”There is

neither Jew nor Greek, there is neither bond nor free, there is neither

male nor female: for ye are all one in Christ Jesus. There is neither

circumcision nor uncircumcision, Barbarian, Scythian, bond nor free; but

Christ is all and in all.”

What, in fact, is the Christian communion? It is a transformation and

development of the Jewish Passover. Our Lord seated himself with his

twelve Apostles, to partake of the Passover, and said, “With desire I

have desired to eat this Passover with you before I suffer.” Then he

instituted the ordinance of the communion, transforming the Jewish

festival, and a re-enacting the law enforcing its perpetual obligation.

The primitive Christian Communion was a social banquet; the table was

spread, and bread and wine were abundantly supplied. The Christians did

not assemble together in families as did the ancient Jews, but whole

churches assembled socially after the manner of the superior castes of

Egypt and Sparta. “When ye come together therefore into one place (says

the Apostle Paul,) this is not to eat the Lord’s Supper. For in eating

every one taketh before another his own supper: and one is hungry and

another is drunken. What! have ye not houses to eat and drink in? or

despise ye the church of God, and shame them that have not?” The

perversion of the ordinance here indicated, gives us a clear conception

of the manner in which it was celebrated in primitive times. The

Christian communion is the organization of a new social state, it is the

extending of the right of citizenship to every member of the human

family. In Egypt and Sparta, the nobles only communed; with Moses the

communion was restricted to the Hebrew race; but Christ calls upon all

men to enter the Kingdom of Heaven, and thus throws the communion open

to every one of the children of Adam. “For in Christ there is neither

Jew nor Greek, bond nor free, male nor female.” Is it not evident that

the Christian communion is the organization of the principle of

equality?

But let us follow the order of the establishment of this divine

institution. In our Lord’s discourse (commencing at the thirteenth

chapter of John’s Gospel) which he spake to his disciples, as they were

assembled together around the table to partake of the feast of the

Passover, we find abundant indications of the profound meaning which he

intended to embody in the ordinance. First of all, our Lord rose from

the table and, girding himself with a towel, he began to wash and to

wipe his disciples’ feet! Behold Satan falling like lightning out of

heaven! If our Lord had intended to teach the dogma of equality, (which

he evidently did) could be have taken a more effectual course than this?

What action could be more worthy of him who said; “He that is greatest

among you, let him be your servant;”—of him who taught us to call those

to whom we delegate power, not lords, not kings, not rulers by divine

right, but public servants! Listen to the Master’s words—“Ye call me

Master and Lord: and ye say well; for so I am. If I then, your Lord and

Master, have washed your feet, ye ought also to wash one another’s feet:

for I have given you an example, that ye should do as I have done unto

you.” Where now is the aristocracy of Egypt and Sparta? The walls of

partition are thrown down, and every vile slave, every member of the

degraded castes, is called upon to receive the Christian illumination,

to enter into communion, to receive the right of citizenship.

Verily, Moses promulgated the eternal anathema against slavery; but

Christ has done more than this, he has proclaimed the abiding curse

against all social inequality whatever;—he has opened the way for the

establishment of God’s justice among the children of men.

The Apostles misunderstood the tenor, in some points, of their Master’s

doctrine. They supposed he came merely to extend the Mosaic

institutions: they endeavored, therefore, to establish fully the Mosaic

agrarianism; they endeavored to establish a community of goods, and to

put the levelling system in complete operation. “The multitude of them

that believed were of one heart, and of one soul: neither said any of

them that aught of the things he possessed was his own; but they had all

things common.”—Acts 4: 32. The Mosaic system was powerful for levelling

down, for repressing all aristocracy: but our Lord did not come for

this. He came to level up. He came to confer nobility on the whole human

race. He came to make all men priests and kings.—Rev. 1: 6. The system

of Moses caused the Jewish nation to stagnate; it was destructive to all

progress; whenever any change occurred, his laws levelled everything

back to their original position: but the system of Christ is the very

incarnation of the spirit of progress. Christ throws all gates open to

men; he constitutes his disciple a son of God—can any one lay claim to a

more aristocratic descent than that? He confers upon his disciple the

right of citizenship in the whole universe; nay, the right of

citizenship in the highest heaven itself;—where now are the privileges

of Rome and Sparta? “Let no man glory in men; for all things are yours;

whether Paul or Apollos, or Cephas, or the world, or life, or death, or

things present, or things to come; all are yours; and ye are Christ’s;

and Christ is God’s.”—1 Cor. 3: 21, 22, 23.

Are we not justified in affirming that the dogma of Equality is hidden

in the very centre of the Christian ordinance of Communion? But what

necessity is there for prolonged discussion? Is there a man in the

Christian Church who dares to go to the Communion table denying that he

goes as an equal to meet with equals?

2. The Banking System.

When a certain number of persons desire to be incorporated as a banking

company, they petition the legislature of the state in which they

reside, praying for such privilege. If the prayer be granted, they are

incorporated; and the amount of their capital is fixed in the act of

incorporation. This sum is divided into shares; public notice is given;

books are opened for subscription; and individuals subscribe for as many

shares as they desire, and are able to take. The subscribers are called

Stockholders, and the shares are called Stock. When the necessary amount

has been subscribed, the stockholders meet, and choose, from their

number, certain persons to conduct the operations of the bank, who are

called Directors. The Directors then choose from their own number, a

President, and some person, not of their number, to be Cashier. Upon the

President and Cashier (under the control of the board of Directors) the

active duties of conducting the affairs of the bank depend.

So far all is clear: but certain consequences follow necessarily

whenever a bank is established;—what are these consequences? Answer for

yourself, reader! Would not the stockholders, if no bank had been

established, have remained individual capitalists, competing with each

other in the market? Would not this competition have had the effect of

depressing the rate of interest? But now, by the establishment of this

bank, these capitalists have become stockholders; and thus, by uniting

their interests they have escaped competition, and all its attendant

effects. The capitalist is unquestionably benefitted; but he appears to

be benefitted at the expense of the borrower. At first sight, therefore,

it would appear that banks are established for the exclusive benefit of

the lenders. Let us examine this matter, however, a little more

carefully. Competition is natural to man. Every blow aimed at

competition, is a blow aimed at liberty and equality; for competition is

but another name for that liberty and equality which ought to exist in

every manufacturing and commercial community. In the natural order, the

borrowers compete with each other, and thus raise the rate of interest;

meanwhile the lenders, by competition among themselves, depress that

rate. By the establishment of a bank, the lenders prevent competition

among themselves, and thus prevent a fall in the rate of interest; it is

evident, therefore, that the borrower could obtain money on better terms

if the bank did not exist.

A laborer who has no tools, no raw materials to work upon, can bring

little, or rather nothing, to pass, no matter how industriously he may

follow his calling; he seeks therefore, first of all, to obtain tools

and the raw material; that is, he endeavors to find some capitalist who

will lend him the money requisite for the purchase of these things. The

capitalist, on the other hand, finds his money to be of little use to

him so long as he cannot lend it out at interest;—his machinery and raw

material will spoil on his hands if he can find no laborer who will make

them available for useful purposes. The capitalist and the laborer are

mutually necessary to each other; and, for this reason, they are always

seeking each other. Banks (according to the true theory of such

institutions) ought to be established for the purpose of bringing

together the borrower and lender, the laborer and the capitalist.

Whoever has anything to lend, ought to be able to go to the bank, and

there lend it, provided there is some person in the community who

desires to borrow; and borrowers ought to have like facilities. So much

for theory; what is the fact?

Banks are instruments whereby the lenders escape their fair share of the

general competition: they are instruments whereby a certain number of

lenders are enabled to bring an immense, combined, and crushing force to

bear upon every person who does not belong to their number. A bank is a

model equality, a model community, a model fraternity, if we consider

the stockholders only; but it is a horrible inequality, if we consider

it in its relations to the mass of the people.

Banks confer exclusive privileges upon a certain class. Every

unprivileged member of the community operates in his own strength; but

the stockholder in a bank operates with the whole strength of the

corporation. These stockholders mutually insure each other; for, when

the bank makes a bad speculation, the loss is equitably divided among

all. There is equity among themselves; but woe to him that is on the

outside! The unprivileged individual lies awake nights, thinking of his

liabilities; he labors hard to bring his affairs to a prosperous issue.

The stockholder of the bank folds his hands, and sleeps soundly; he is

insured from loss, and has hired the officers of the bank to think and

be anxious for him. If operatives combine with each other, because they

find competition bears too strongly upon them, and strike for higher

wages, they are legally liable to severe punishment: but, if capitalists

combine to prevent competition among themselves, and thus prevent a fall

in the price of the commodity they have to offer in the market, the

legislature applauds their action, and grants them a charter to enable

them to accomplish their purpose more easily and effectually. It is

affirmed, nevertheless, that we live in a country of equal laws. If it

is for the good of the community that laborers should compete among

themselves, it is equally for the good of the community that the

capitalists should compete in like manner: at least, so it would appear.

Banks of Discount obtain profits (1) from interest on notes discounted.

This is the great source of their revenue. You go to the bank and offer

your note, payable after a certain lapse of time; if the bank considers

you, or your indorsers, good, and believes the note will be paid, the

officers will give you the money borne on the face of your note,

deducting from it interest for the time the note has to run. This

deduction is called the discount. All this appears very fair. We have

seen, however, that in the natural order, the borrower and lender meet

on equal terms, since they are equally necessary to each other:—You are

obliged, nevertheless, to ask the bank to grant you a discount as a

favor; you are liable to insult from the bank officials if you happen to

be a poor man; you will oftentimes get no discount if you do not belong

to some particular political party, or, perhaps, to some particular

social clique. You will oftentimes be required to leave on deposit in

the bank, ten per cent. of what you draw; thus you will be forced

indirectly to pay illegal interest. The bank has the advantage of you in

every way; for you are dealing with a hundred stockholders, who, by

combination, have escaped all the effects of competition among

themselves, while you stand in your unassisted individual strength;—and

your strength is evidently weakness. The bank decides on your claims

arbitrarily, and you have no remedy. On your part, you are subject to

human feeling; the conduct of the bank toward you may give rise in your

heart to hope, fear, joy, or mortification; but, on the part of the

bank, there is the insensibility of a body without a soul.

We have said that banks ought to bring the lender and borrower together;

but they never perform this office; and here lies the greatest evil of

the whole system. It is the stockholder who is the lender; the bank

officer is but an agent. The borrower comes to the bank, his mind filled

with anxiety; he is thinking of his wife and children, and is depressed

in consequence of reflection on the state of his business; he knows he

can give good security for all he wishes to borrow, but fears his offer

will be rejected. The lender, instead of meeting this trembling, anxious

human being on equal terms as a human being, sends the remorseless

engine which is called a bank, to transact the business for him, and in

his stead; and the borrower finds himself suddenly, perhaps, in the

presence of the infernal powers.

Banks of Discount obtain profits (2d) from deposits. You deposit your

money in a bank, and the bank lends your money, and receives interest

upon it. All interest received in this way is divided among the

stockholders; no part of it is given to you, although you ought to have

the whole, (except so much as would pay the officers of the bank for

their trouble,) since you bear all the risk. Thus banks obtain profits

by receiving interest on your money; they make it at your expense and at

your risk.

Banks of Discount obtain profits (3d) from exchange. But it is difficult

to see how any money can be made in this way if no recourse is had to

fraud. The rate of exchange can never rise above the cost of the

transportation of specie, including the insurance: if the bank charges

more than this, with perhaps a slight addition to pay for the trouble,

it charges too much. But banks sometimes make money by the following

method:—You go to the bank and ask a discount on your note: you are

answered that the bank cannot spare any money, but that you can have a

draft on some specified city: you know that exchange is against that

city, and that you will be obliged to sell the draft at a loss if you

take it: nevertheless, you take it, because you are pushed for money.

Thus the bank charges you interest to the full amount, although it knows

the draft to be not worth what it purports on its face to be worth.

Perhaps the bank refuses to discount for you if you do not consent to

pay some artificial rate of exchange. Perhaps an agent of the bank

follows you into the street, and buys back the draft at a discount, so

that no transaction in exchange really takes place at all.

Banks can add nothing to the capital of a country; though they may

augment the private fortunes of those interested in them. Banks enable

lenders to live without working. If there were no banks, the capitalist

would become acquainted with the laborer to whom he lends money: he

would be obliged to understand the order of business: he would naturally

seek out and encourage industrious and honest laborers, giving them

facilities, for thus he would in create and secure his own income; by

being interested in a great many operations he would become capable of

giving advice and instruction to artisans and mechanics, and thus he

would be perhaps the most useful member of the community; thus all would

be enabled to labor to a more effectual purpose. If there were no banks,

the capitalist would unfold his hands, would become human, would have a

feeling for common accidents and infirmities: he would no longer isolate

himself from mankind; he would no longer feel that no evil could come

near him; he would no longer make it his pride to cultivate a patrician

haughtiness calculated to give him an immediate ascendancy over all who

approach him. But the capitalist is now so secure, he is so well

protected by the banking system, that nothing can come near him without

his permission. He has no favor to ask of any one, and every body has

favors to ask of him. His merit is considered so great by the human

race, because he accumulated a fortune in some past time, that he

receives (what Socrates demanded for himself) a support at the public

expense. He is never called upon to spend a dollar of the fortune he

accumulated; he is never called upon to raise his hand for any useful

purpose; he is never called upon to exert his mind to look narrowly

after his affairs; on the contrary, an arrangement is made by which the

public indirectly pay the officers of a bank for furnishing him

semiannually, without trouble or anxiety to himself, with a certain

amount of money in a fixed proportion to the fortune he is not called

upon to spend; and he lives upon the money which he thus receives so

long as he condescends to exist among men upon the surface of the earth.

We think we are justified in drawing the conclusion that banks operate,

practically, to enable the few to bring the many under tribute. So far

as the community is concerned, banks do, in practice, cover nothing but

conspiracies and combinations to defraud the public. No: the word

defraud is too severe; for the stockholders in the banks are as honest

as the common run of men; nevertheless, we know of no other English word

which properly characterises the practical operation of the banking

system.

But to proceed with our remarks a bank may issue bills to the amount of

its whole capital, and the bill-holders be perfectly safe. Indeed, they

are doubly secured. First, there is specie enough in the vaults of the

bank to redeem all the bills, and, secondly, the bills were issued in

exchange for notes by which responsible individuals bound themselves to

pay sums of money to the bank, equivalent to the value they received in

bank bills. No bank bill can honestly get into circulation, except in

exchange for a note binding the person who receives it from the bank for

its amount. Now it is found that a bank can issue bills to a far greater

extent than the value of the specie in its vaults, and still redeem

every bill, at sight, in specie. For, while one person presents a bill

and demands specie, some other person will probably be depositing specie

in the bank: besides, it is almost impossible that the bills would all

require to be paid at the same instant. From these reasons combined, it

is evident that the bank may, without violating its obligation to redeem

in bills in specie at sight, issue a larger amount of them than it

contains specie in its vaults. Every bank which thus issues its bills to

an amount greater than that of the specie in its vaults, is called a

Bank of Circulation. If it keeps within the amount of the specie it has

on hand, it is not a bank of circulation, for its bills are mere specie

checks. We are under the impression that banks in this State, have the

power of issuing bills to the extent of two and a half times their

capital.

All this, again, presents a very fair appearance, as indeed everything

does connected with the system of banking; but what are the facts? First

of all, the banks seldom have more than one fifth part of their capital

on hand in specie; and therefore they would find it impossible to

fulfill the solemn promises borne on their bills, if there should be a

run upon them for specie, for a single day. But this is a very

commonplace criticism; let us examine the matter more carefully.

Money is a commodity whose value is regulated, like that of every other

commodity, by the ratio of the supply to the demand. Gold and silver

possess a value which is fixed by the relation of the supply of the

precious metals to the demand for them in the market of the world. When

gold and silver become scarce in any country, the demand for them

increases; their price rises; a given quantity of the precious metals

will buy more of other commodities than it would have done before the

rise; that is, the prices of other commodities fall. Merchants, finding

the prices of commodities to be less at home than abroad, will export

their goods, exchanging them for the precious metals: thus gold and

silver will be imported, and this importation will continue until the

currency of the country is restored to the level of the currency of the

world. The cheapest commodity is always exported; if the precious metals

are cheapest, merchants exchange their goods for them, and send the

specie to some market where it will command a better price; and there

they exchange it for commodities which command a good price at home.

Where there is no tampering with the currency, the balance of trade

takes care of itself. But if some of our banks once issue bills to an

amount beyond the amount of specie in their vaults, and immediately the

dollar falls in value, because there is more than the proper amount of

money in the country. Money becomes the cheapest commodity, and is of

course, immediately exported. But what sort of money is it that is

exported? bank bills?—Not at all. Bank bills are worth little or nothing

in the market of the world. It is the gold and silver, therefore, which

is exported. As soon as a quantity of specie is exported sufficient to

cause a reinstatement of the value of money, the banks issue more bills,

and a further exportation of specie takes place. At last, the currency

of the country is composed entirely of paper, with the exception of the

small quantity of gold and silver which is requisite for the purposes of

making change. The banks are careful always to have bills enough in

circulation to keep money plenty; that is, to keep gold and silver

cheap. Thus the banks protect themselves against all foreign

competition; for the foreigner cannot afford to bring his silver dollar

into a market where it will at once depreciate in value. Do you say that

we go too far, that we affirm a power in the banks which they do not

possess in relation to this exclusion of foreign competition? Do you say

that the value of money is determined by the rate of interest it loans,

and that the debasement of the currency, by the issue of bank bills,

does not therefore exclude foreign competition? We ask, then, what

explanation you give of the remarkable fact that capitalists obtain only

two and three per cent. interest for their money in Europe, while they

might receive six per cent. for it here, and yet that they never enter

our market in competition with the banks? The foreigner, it is true,

sometimes invests money in our banks; but does he ever compete with

them? We confess that the discount the foreigner is obliged to pay, when

he brings his dollar into the market, is not directly charged, and that

the process of the extortion is not evident at first sight. The

foreigner brings his money, if he brings it all, in gold and silver, and

loans it out at six per cent. interest; say on six month’s notes. As

soon as the money goes out of his hands, it leaves the country, because

specie is at a premium for exportation. When the six months expire, his

debtors pay him all they owe him, with the interest; but in what do they

pay him? in gold and silver? Not at all: they pay him in the local

currency of the country; they pay him in the bills of the banks of

issue; and these banks, from that moment forward, roll their millstones

upon him, even as they do upon the rest of the community. He has a large

claim against the banks; he presents it, and demands specie: if banks

are alarmed by the amount of the claim they apply to the legislature and

obtain permission to suspend specie payments. The sympathy of the public

is altogether on the side of the banks; for was not the suspension

brought on by the necessity of contending against foreign capital? How

can we contend against anything foreign? It is with difficulty that we

contend against foreign pauper labor; how then can we contend against

foreign capital? The people are innocent, and believe whatever the banks

tell them. They seldom reflect that paupers do not labor; neither do

they always remember that every dollar brought into the country

increases the competition among capitalists, thus raising the rate of

wages, and benefiting the working man. Specie payments are however,

never suspended to protect the banks against foreign capital; for the

foreigner knows his own interest, and is too wise to exchange his specie

for paper promises.

Let us sum up the results of our investigation. (1) Capitalists, by

combining with each other to form a bank, destroy competition among

themselves. (2) Through the power of their organization, they bear with

their united weight upon every individual with whom they have dealings.

On the side of the bank, there is a small army, well equipped, well

officered, and well disciplined; on the side of the community, there is

a large, undisciplined crowd, without arms, and without leaders. Society

is a contest between a large number of sheep who are entirely

disconnected with each other, and a small number of wolves who meet

every Saturday afternoon to confer upon the internal affairs of the

common lupine interest. (3) Not content with these advantages, the

stockholders petition the legislature, and obtain the privilege of being

liable for the debts of a bank, only to the extent of the stock they own

in it. Thus the capitalist secures himself still further, by dividing

his capital among several banks. The legislature, as is evident, has no

favor left to confer on the community, or the holders of the bills; if

the banks fail, the holders of the bills must suffer. (4) But the

capitalists are not satisfied yet; they have protected themselves in

every possible way against the community, in every possible way against

competition among themselves; but they are still afraid that some one

will come in from without to compete with them and lower the rate of

interest. They therefore petition the legislature, and obtain permission

to exert a power which ought never to be exercised by the government

itself. Do they ask permission to coin money? No; they are not so modest

as that: they ask permission to create money; they ask the privilege of

having it recognised that a piece of paper coming from their hands,

shall be worth as much as a silver dollar coming from the hands of any

other person. After thus debasing the currency, they have no longer

anything to fear from competition.

Now the banks have everything in their hands. They make great issues,

and money becomes plenty; that is, all other commodities become dear.

Then the capitalist sells what he has to sell, while prices are high.

The banks draw in their issues, and money becomes scarce, that is, all

other commodities become cheap. The community is distressed for money,

individuals are forced to sell property to raise money—and to sell at a

loss on account of the state of the market: then the capitalist buys

what he desires to buy, while everything is cheap. The banks have

control over every dollar in every private man’s pocket; for, by a large

issue, it can make money plenty, and thus diminish the value of money

throughout the community. The capitalist trades for the dollar which is

in the pocket of the private man, and receives it from him at its

depreciated value. Immediately the bank draws in its issues, and the

value of money is increased; but the dollar is now in the hands of the

capitalist, who sells it to his former owner at its increased value. The

operation of the banking system is evident: it is said, nevertheless,

that banks are established for the convenience of the community.—And the

half is not told yet!

3. The Repeal of the Usury Laws.

All usury laws appear to be arbitrary and unjust. The rent paid for the

use of land and houses is freely determined in the contract between the

landlord and tenant; freight is settled by the contract between the ship

owner and the person hiring of him; profit is determined in the contract

of purchase and sale: but when we come to interest on money, all

principles seem suddenly to change; here the government intervenes, and

says to the capitalist, “You shall, in no, case take more than six per

cent. interest on the amount of principal loaned: if competition among

capitalists brings down the rate of interest to three, two, or one per

cent., you have no remedy; but if, on the other hand, competition

between borrowers forces that rate up to seven, eight, or nine per

cent., you are prohibited, under severe penalties, from taking any

advantage of the rise.” Where is the morality of this restriction? So

long as the competition of the market is permitted to operate without

legislative interference, the charge for the use of capital in any of

its forms, will be properly determined by the contract between the

capitalist and the person with whom he deals. If the capitalist charges

too much, the borrower obtains money at the proper rate from some other

person. If the borrower is unreasonable, the capitalist refuses to part

with his money; and money can always be invested somewhere, for there is

always a demand for capital. If lands, houses, bridges, canals, boats,

wagons, are abundant in proportion to the demand for them, the charge

for the use of them will be proportionally low; if they are scarce, it

will be proportionally high. Upon what ground can you justify the

legislature in making laws to restrict a particular class of

capitalists, depriving them invidiously of the benefit which they would

naturally derive from a system of unrestricted competition? If a man

owns a sum of money, he must not lend it for more than six per cent.

interest; but he may buy houses, lands, ships, wagons, with it, and

these he may freely let out at fifty per cent. if he can find any person

willing to pay that rate! Is not the distinction drawn by the

legislature arbitrary—and therefore unjust? A man wishes to obtain

certain lands, wagons, &c., and applies to you for money to buy them

with; you can lend the money for six per cent. interest, and no more;

but you can purchase the articles the man desires, and let them out to

him at any rate of remuneration upon which you mutually agree. Every

sound argument in favor of the intervention of the legislature to fix by

law the charge for the use of money, bears with equal force in favor of

legislative intervention to fix by law the rent of lands and houses, the

freight of ships, the hire of horses and carriages, or the profit on

merchandise sold. We conclude, therefore, that legislative interference

fixing the rate of interest by law, is both impolitic and unjust.

But let logic have her perfect work. If one arbitrary act of the

legislature is impolitic and unjust, every other similar legislative act

is equally impolitic, equally unjust. Suppose the usury laws were

repealed to-day, would justice prevail to-morrow? By no means. The

government says to me, “I leave you and your neighbor to compete with

each other: fight out your battles among yourselves; I will have nothing

more to do with your quarrels.” I act upon this hint of the legislature,

I enter into competition with my neighbor:—but I find the government has

lied to me; I find the legislature has no intention of letting us settle

our quarrels between ourselves; far from it; when the struggle attains

its height, behold! the government quietly steps up to my antagonist,

and furnishes him with a bowie knife and a revolver. How can I, an

unarmed man, contend with one to whom the legislature gratuitously

furnishes bowie knives and revolvers? In fact, I enter the market with

my silver dollar, while you enter the market with your silver dollar: my

dollar is a plain silver dollar, nothing more and nothing less; but your

dollar is something very different, for, by permission of the

legislature, you can issue bank bills to the amount of two and a half

times your capital. I tell my customer that I can afford to lend my

dollar, if he will return it after a certain time, with four cents for

the use of it, but that I cannot lend it for anything less; you come

between me and my customer, and say to him, I can do better by you than

that; don’t take his dollar on any such terms, for I will lend you a

dollar and twenty five cents for the same time, and charge you only four

cents, what he charges for his simple dollar. Thus you get my customer

away from me; thus you lend him a dollar and twenty five cents in paper

money; and the worst of it is that you still retain a dollar and twenty

five cents in paper, to seduce away the next customer to whom I apply.

Nay, more, when you have loaned out your two dollars and fifty cents,

you have your silver dollar left in your pocket, to fall back upon and

carry to Texas, in case of accident; while I, if I succeed in lending my

dollar, must go without money until my debtor pays it back. Yet you and

I entered the market, each with a silver dollar;—how is it that you have

thus obtained the advantage over me in every transaction? The banking

privilege which the government has given you is a murderous weapon

against which I cannot contend.

A just balance and just weights! Very well; but if we have an unjust

balance is it not necessary that the weights should be unjust also. A

just balance and unjust weights give false measure; and just weights

with an unjust balance give false measure in like manner; but an unjust

balance and unjust weights may be so ad-just-ed as to give true measure.

Under our present system, the lender who is not connected with the

banks, is oppressed; but the usury laws (unjust as they are when

considered without relation to the false system under which we live)

afford some protection, at least to the borrower. They are the false

balance which, to a certain extent, justifies the false weights. In our

opinion, it would be well to have a just balance, and just weights also:

that is, it would be well to repeal the usury laws, and to abolish the

power possessed by the banks of issuing paper money. But it will not do

to put new wine into old bottles; nor to mend old garments with new

cloth. When you lend me two and a half dollars, while you own only one,

you get two and a half times the interest you are actually entitled to,

on the capital you own. Insist, if you will, upon retaining your

peculiar privileges, but consent, in the name of moderation and justice,

to let me protect myself by the usury laws; for they are not very severe

against you after all. The usury laws confine you to six per cent.

interest on whatever you loan; but as the banking laws enable you to

loan two and a half times as much as you own, you obtain fifteen per

cent. interest on all the capital you really possess. You cannot

complain that in your case the usury laws violate the right of property;

for you own only one dollar, and yet receive interest, and transact

business, as though you owned two dollars and fifty cents. The usury

laws are necessary, not to interfere in your right to your own property,

but to limit you in the abuse of the unjust and exclusive privileges

granted you by the legislature. We look upon the antagonism between the

usury and the banking laws, as a division of Satan against Satan, and

trust that through their internal conflict and opposition, the infernal

kingdom may one day be brought to destruction.

But let us now examine the great argument in favor of the immediate

repeal of the usury laws—an argument which, according to those who

adduce it, is in every way unanswerable. It is said that all the above

considerations, though important, and certainly to the point, ought to

have very little weight in our minds, and that for the following

reason:—Men do, notwithstanding the present laws, take exorbitant

interest; and, whatever usury laws may be passed, they will continue so

to do. If it be acknowledged that it is wrong to take too high interest,

that acknowledgment will not help the matter; for, though we acknowledge

the wrong, we are impotent to prevent it. The usury laws merely add a

new evil to one that was bad enough when it was alone. Without a usury

law, men will take too high interest; for they have the power to do it

as credit is now organized; and no legislation can prevent them: with a

usury law, they will continue to take unjust interest, and will have

recourse to lies and fraudulent proceedings to evade the law. If the

taking of too high interest be an evil, is it not a still greater evil

for the community to demoralize itself by evading the laws? to

demoralize itself by allowing individuals to have recourse to

subterranean methods to accomplish the end they are determined to

accomplish at all events,—an end which they cannot accomplish in the

light of day, because of the terror of the law? Thus argue the advocates

of immediate repeal—and with much show of reason. There are a hundred

ways in which the usury laws may be evaded, of which the following may

serve as an example:—A borrower is willing to give twelve per cent. per

annum for the use of money: so he agree to give $112 at twelve months

credit for stock worth in the market only $100. A broker finds a lender

who has money but no stock, and manages the negotiation. The borrower

buys the stock from the lender, and gives for it his note for $112. Now

the lender holds the note, and the borrower hold the certificate of the

stock. Then the lender buys the stock on the spot for $100 case, and the

lender holds the borrower’s note for $112, payable in twelve months.

Thus these two persons thought the agency of the broker, buy and sell

what has no real existence. Such transactions are evidently illegal, but

cases rarely occur in which an appeal is made to the law. The opponents

of the law say that all this bears hard on the borrower, who has not

only to pay the broker for his services, but also to pay the capitalist

for the risk he runs in entering into an illegal transaction; they say

that the borrower has to pay also for the wear and tear of the lender’s

conscience; and, according to them, all these conditions go to raise the

rate of interest. As for the immorality of such transactions, as for the

immorality of the state of society in which such transactions are

inevitable, as for the wear and tear of conscience, we freely admit it

all; nevertheless we are not prepared to acknowledge either the

necessity, or the propriety, of the immediate repeal of the usury law.

We think few persons are aware of the power of capital in this

Commonwealth. According to a pamphlet, published a year or two ago,

containing a list of the wealthy men of Boston, and an estimate of the

value of their property, there are 224 individuals in this city, who are

worth in the aggregate, $71,855,000: the average wealth of these

individuals would be $321,781. It is generally supposed that this

estimate is below, rather than above, the truth. In this pamphlet, no

estimate is made of the wealth of any individual whose property is

supposed to amount to less than $100,000. There are probably two or

three menin the state not counted in the pamphlet, who are worth

$1,000,000 each. Let us, however, be moderate in our estimates, and

suppose that there are, in all the towns and counties in the State, 3000

other individuals who are worth $30,000 each; their aggregate wealth

would amount to $90,000,000. Add this to the $71,855,000 owned by the

224 men, and we have $161,855,000. These estimates are more or less

incorrect, but they give the nearest approximation to the truth that we

can obtain at the present time. The assessors’ valuation of the property

in the State of Massachusetts in 1840, was $299,880,338:—we find,

therefore, by the above estimates, that 3,224 individuals own more than

half of all the property in the State. If we suppose each of these 3,224

persons to be the head of a family of five persons, we shall have, in

all 16,120 individuals. In 1840, the State contained a population of

737,700. Thus 16,120 persons own more property than the remaining

721,580: that is, three persons out of every hundred, own more than the

remaining ninety-seven—to be certain that we are within the truth, let

us say that six out of every hundred, own more property than the

remaining ninety-four. These wealthy persons are connected with each

other; indeed they are organized by the power of the banks; and we think

(human nature being what it is) that their organization would be brought

to bear still more powerfully upon the community if the usury laws were

repealed. These persons might easily obtain complete control over the

banks. They might easily so arrange matters as to allow very little

money to be loaned by the banks to any but themselves; and thus they

would obtain the power over the money market which a monopoly always

gives to those who wield it,—that is, they would be able to ask and

obtain, pretty much what interest they pleased for their money. There

would then be no remedy: the indignation of the community would be of no

avail. What good would it do you to be indignant? You would go

indignantly, and pay exorbitant interest, because you would be hard

pushed for money. You would get no money at the bank, because it would

be all taken up by the heavy capitalists who control those institutions,

or by their friends: these all get money at six per cent. interest, or

less, and they would get from you precisely that interest which your

necessities might enable them to demand. The usury laws furnish us with

some remedy for these evils; for, under those laws, the power of

demanding and obtaining illegal interest will be possible only so long

as public opinion sees fit to sanction the evasions of the law—as long

as the weight of the system is not intolerable to the community, every

thing will move quietly; but as soon as the burthen of illegal interest

becomes intolerable, the laws will be put in force in obedience to the

demand of the public, and the evil will be abated to a certain extent.

We confess that it is hard for the borrower to be obliged to pay the

broker, to pay also for the wear and tear of the lender’s conscience;

but we conclude, from the foregoing considerations, that it would be

worse for him if a few lenders should obtain a monopoly of the market.

And, when the usury laws are repealed, what earthly power will exist

capable of preventing them from obtaining this monopoly? But here an

interesting question presents itself: What is the limit of the power of

the lender over the borrower?

Let us first explain the difference between legal value and actual

value. It is evident that if every bank bill in the country should

suddenly be destroyed, no actual value would be destroyed—except perhaps

to the extent of the value of so much waste paper. The holder of the

bill would lose his money; but the bank would gain the same amount,

because it would no longer be liable to be called upon to redeem its

bills in specie. Legal value is the legal claim which one man has upon

property in the hands of another. No matter how much legal value you

destroy, you cannot by that process banish a single dollar’s worth of

actual value; though you may do a great injustice to individuals. But if

you destroy the silver dollars in the banks, you inflict a great loss on

the community, for an importation of specie would have to be made to

meet the exigencies of the currency, and this importation would have to

be paid for in goods and commodities which are of actual value.—When a

ship goes down at sea with her cargo on board, so much actual value is

lost. But, on the other hand, when an owner loses his ship in some

unfortunate speculation, so that the ownership passes from his hands

into the hands of some other person, there is no loss of actual value,

as in the case of shipwreck; for the loss may be a mere change of

ownership.

The national debt of England exceeds $4,000,000,000. If there were

enough gold sovereigns in the world to pay this debt, and these

sovereigns should be laid beside each other, touching each other, and in

a straight line, the line thus formed would be much more than long

enough to furnish a belt of gold extending round the earth where its

circumference is the greatest. Yet all this debt is mere legal value. If

all the obligations by which this debt is held were destroyed, the

holders of the debt would become poorer by the amount of legal value

destroyed, but those who are bound by the obligations (the tax-paying

people of England) would gain to the same amount. Destroy all this legal

value, and England would be as rich after the destruction as it was

before, because no actual value would have been affected: the

destruction of the legal value would merely cause a vast change in the

ownership of property, making some classes richer, and, of course,

others poorer to precisely the same extent. But if you should destroy

actual value to the amount of this debt, you would destroy about

thirteen times as much actual value (lands, houses, products of labor,

&c.,) as exists at present in the State of Massachusetts. The sudden

destruction of $4,000,000,000 worth of actual value would turn the

British Islands into a desert. Many persons fail to perceive the secret

of the persistency of the government of England. That secret is as

follows:—The whole property of England is taxed yearly three per cent.

to pay the interest of the public debt; the amount raised for this

purpose is paid over to those who own the obligations which constitute

this legal value. The people of England are thus divided into classes:

one class is taxed, and pays the interest on the debt; the other class

receives the interest, and lives upon it. The class which receives the

interest knows very well that a revolution would be followed by a

repudiation of the national debt; this class knows that the nation would

be no poorer if the debt were repudiated; it knows that a large portion

of the people look upon the debt as being the result of aristocratic

perversity in carrying on aristocratic wars, for the accomplishment of

aristocratic purposes: when, therefore, the government wants votes, it

looks to this privileged class; when it wants orators and writers, it

looks to this same class; when it wants special constables to put down

insurrection, it applies to this same class. The people of England pay

yearly $120,000,000, the interest of the debt, to maintain a

conservative class, whose function it is to prevent all change, and

therefore all improvement, in the condition of the empire. The owners of

the public debt, the pensioners, the holders of sinecure offices, the

nobility and the established church, are the bands of Spartans who rule

over the English Laconians, Helots and Slaves. When such powerful

support is enlisted in favor of an iniquitous social order, there is

very little prospect left of any amelioration in the condition of the

people.

But let us bring the matter nearer home: the assessors’ valuation of the

property in the State of Massachusetts in 1790, was $44,024,349. In

1840, it was $299,880,338. The increase, therefore, during fifty years,

was $255,855,989. This is the increase of actual value. If now the

$44,024,349, which the State possessed in 1790, had been owned by a

class, and had been loaned to the community on six months’ notes, at six

per cent. interest per annum, and this interest as it fell due, had

itself been continually put out at interest on the same terms, that

accumulated interest would have amounted in fifty years to $885,524,246

This is the increase of the legal value. A simple comparison will show

us that the legal value would have increased three times as fast as the

actual value has increased. It is impossible, therefore, for the actual

producer to compete with the holder of legal value. How many farmers are

there who can give six per cent. interest, and ultimately pay for a farm

they have bought on credit?

Suppose, when Virginia was settled in 1607, England has sold the whole

territory of the United States to the first settlers for $1,000, and had

taken a mortgage for this sum on the whole property:—$1,000, at 7 per

cent per. Annum, on half yearly notes, the interest collected and

reloaned as it fell due, would amount, in the interval between 1607 and

1850, to $16,777,216,000. All the property in the United States, several

times told, would not pay this debt.

If the reader is interested in this matter of the comparative rate of

increase of actual and legal value, let him consult the treatise of

Edward Kellogg on “Labor and other Capital,” where he will find abundant

information on all these points.

What answer, then, shall we return to our question relating to the power

of the lender over the borrower? We are forced to answer that the

borrower is virtually, according to appearances, under the complete

control of the lender. A considerable time may elapse before this

control is actually as well as virtually established; but as the ship in

the eddy of the maelstrom is certain of being ultimately engulphed, so

the producer of actual value (if no change is introduced in our social

relations) is bound to be brought into ultimate complete subjection to

the holder of legal value. What remedy can be applied to meet this

growing evil? In answer to this question, we remark:—It is probably that

God made the world right; it is probable that God made the world right;

it is probable, if there is any thing wrong in our social condition,

that the evil proceeds from the impertinent interference of men who have

disarranged the Divine plan. Indeed, if God committed any oversight in

creating the world, it is impossible for us to remedy his mistake now:

if we would do anything to the purpose, therefore, we must go on the

hypothesis that God did actually, as the Bible states, create this world

according to the dictates of his unerring Wisdom, according to this

Logos or Eternal Word. Now what is Justice but the application of this

Infinite Wisdom? And what is Justice among men but the application of

the principle of Equality? All social inequalities founded on partial

legislation which exist among men, all exclusive privileges, are unjust.

It is our belief that a remodeling of our laws according to the

principles of equal justice, is all the remedy that is called for. All

considerations of mere policy and temporary expediency, are found in the

end to be impolitic and inexpedient: honesty is the only true policy,

after all.

Capitalists have the same right to enter into partnership which other

men possess. We cannot, therefore, justly pass a law prohibiting

banking. But banks, like all other partnerships, ought to pay their

debts:—the individual stockholder ought, therefore, to be liable for all

the debts of the corporation in which he owns stock. Thus no privilege

would be granted him, and none would be denied; he would merely be

permitted to exercise his just rights. It is for his advantage to

combine with his fellows, and he ought to assume the risk which is

naturally attached to that advantage. This is plain and simple justice:

it is policy also: for the community, in the natural order of things,

will place confidence in no bank that is not founded on sufficient

capital: and it is the responsibility of stockholders which must secure

the public from loss. We would have banking companies stand upon

precisely the same footing with other partnerships. It is true that with

such a risk to capital, very few banks would be established: but so we

would have it: we would have the individual capitalist administer his

own money, operate at his own risk, and obtain that remuneration for his

own labours which his individual intelligence would enable him to

secure.

Do you say that such a law would be unjust? Do you say that men of

moderate means would be excluded from all the privileges of banking, and

that capitalists would monopolize the whole business? We answer that we

ought to exclude all men from all privileges: even justice is the law of

the future. The men of moderate means would be able to bank moderately,

and they ought not to bank moderately, and they ought not to bank

otherwise. Your objection is the eternal, and ever-recurring fallacy of

the false organization of credit. Who but the great capitalist can give

that security to the public which ought to found confidence in a great

banking institution? If men of moderate means go into a large business,

they go into it at the risk and expense of the public. Once establish

justice in our laws, and you will find that the capitalist and the

laborer are natural friends. It is the unprincipled speculator, with

moderate means, and not the rich man, it is the individual who is

managing to obtain a fortune from society without giving an equivalent

in labor or otherwise, who is the true enemy of the people. In the

present false organization of credit, the poor often hate the rich; and

the rich, almost universally, fear the poor: once establish just laws,

once abolish all exclusive privileges, and the rich and poor will live

together in ever-increasing fraternal love. The rich man has a right to

his natural advantages, as much as the poor man has to the advantages of

his natural strength of body, or those of his acquired skill. All legal

fictions by which men of moderate means are enabled to act as though

they were great capitalists, are injurious both to the poor and the

rich, but especially to the poor. Let all men enjoy any artificial

advantage granted by the legislature; for if God has made no mistake in

framing the world, and we conform our conduct to his Plan, every thing

will come out right in the end. If we look forward prophetically,

believing the present false organization of credit is to to remain

unchanged forever, we see nothing in the future but gold, sorrow, and

tears: but, if we believe truth is to reign hereafter, we see for our

descendants, the prospect of unbounded actual wealth, and the

realization of the kingdom of heaven on earth.

But we must go on to the end, and abolish all usury laws; for these are

but the unjust balances which are necessary, in the present evil times,

for the justification of the unjust weights of the present social

order.—Our ways must be equal: we must be just to capital, and just to

labor. We must organize liberty and equality; and, as we have once said,

so we repeat now, Free Competition is but another name for that LIBERTY

and EQUALITY which ought to prevail in every commercial and

manufacturing community.

4. The Red Republic.

The French national flag is composes, as every one knows, of three

colors, read, white, and blue. These three colors represent the three

estates of the former French realm: the white denotes the nobility, with

the king at its head; the blue denotes the clergy; and the red denotes

the people. According to some, the blue denotes, not the clergy, but the

bourgeoisie, that is, the merchants, the master mechanics, &c., in

general the class employing labor. The Red Republican party have, since

1780, opposed the tri-color flag, demanding that the red flag should be

substituted in its stead: and it is from this fact that the Red

Republicans derive their name. They affirm that there ought to be but

one estate, the sovereign people, politically recognised in France. They

say that if the people are truly sovereign, it is absurd to have any

color in the national flag except the one that denotes the people. The

red flag is related therefore, not to ideas of blood and of the

guillotine, but to the idea of the sovereignty of the people. It is

probably that a majority of the peace party in France, are red

republicans.

Guizot, the prime minister of Louis Philippe, was opposed, not only to

the red flag, but to the idea which it represents: he was opposed to the

sovereignty of the people, and it was for this reason that the nation

drove him, in February, 1848, from the soil of France. Some time since,

a book was published, dedicated to M. Guizot, from which we make an

extract, to show the tendency of Guizot’s political views. The following

passage occurs in the dedication: “I dedicate this book to you as to the

prince of the historians of our age. You will recognize in it the trace

of your principles, and the fruit of your advice, if I have been able to

understand the first, and profit by the last.” The author here affirms,

by implication, that his book was written under the personal influence

of M. Guizot. But let us come to the book itself.

The author says: “We will not waste our time upon the sense which the

word proletary derives from its Latin etymology. Proletarius denoted

something appropriate to the particular constitution of Rome. The word

proletary denotes, in our ideas, something which is common to all

societies. Thus there are, for example, among all the modern nations of

Europe, and there were among all the ancient nations of Europe, certain

families and individuals forming the basest portion, the lowest stratum,

of society. Ordinarily, these families and individuals live by the

painful and daily labor of their hands. The wages of the day is all they

can count upon for the morrow; and landed property, if they ever obtain

it, is for them much less the rule than the exception. These men, who

are not landed proprietors, who have never been landed proprietors, to

whom we dare not promise that the ever will be; these poor, obscure men,

without fortune transmitted from father to son, and for whom all

domestic traditions are reduced to the permanent necessity of earning

daily their daily bread, these men are the Proletaries, and the

condition to which they belong, is the Proletariat. This being stated,

let us see what the proletariat contains: 1st, laborers; 2d, beggars;

3d, thieves; 4th, prostitutes. For a working man is a proletary who

labors, and lives on his wages. A beggar is a proletary who either

cannot or will not work, and who begs for a living. A thief is a

proletary who will neither work nor beg, and who steals for a living. A

public woman is a proletary who will neither work, beg, nor steal, and

who prostitutes herself for a living. The absence of all acquired

property, of all fortune saved up, is therefore, as we have said, that

which constitutes the Proletariat; and the necessity which persons are

under when they possess nothing but natural bodies, either to work, to

beg, to steal, or to prostitute themselves for a living, naturally

divides the proletaries themselves into four great classes, which are

those we have stated; classes in which they are distributed according to

their education, their character, they physical and moral force;

according to the particular condition of the families to which they

belong; according to the general conditions of the society which

surrounds them; sometimes according to their faults, sometimes according

to the faults of others; often according to chance.”

A famous French democrat—we know not whether to call him a red republic,

or a socialist—comments on the forgoing passage as follows: “To say the

least, some depth and accuracy of insight are shown by this author, who

states the distinction between the Proletary and the true Proprietor as

it ought to be stated. It is, says he, the absence of acquired fortune,

of property laid up, which constitutes the Proletariat. Whoever lives

upon wages, or would be forced by his natural condition to live upon

wages, if he did not substitute begging, theft, or prostitution in the

place of labor, is a proletary. He is a proletary who is under the

necessity of earning his daily bread. All families and individual who

live by daily and painful labor, and for whom the wages of the day is

all they can count on or the morrow, are to be classed in the same

general division called proletariat, in distinction from the condition

of those who are not dependent on wages, and who live on acquired

fortune, or property laid up. The Proletariat is equivalent, therefore,

according to this writer, to labor, to wages, in like manner as the

contrary of the Proletariat, or Property, is equivalent to interest, to

dividends, revenue, the fruit of capital. A thief steals a sum of money,

but he remains, nevertheless, a proletary, because this sum does not

constitute a sufficient capital, and he will be obliged to return

tomorrow to his guilty trade. A prostitute, although lodged at the

Chaussie d’Antin, and furnished like a duchess, is still for you a

proletary. So be it. The proletariat acknowledges that it comprehends

the beggars, thieves, and prostitutes. But—noble writer, filled with

contempt for your poor brothers who are degraded by misery! you have

made herein no wonderful discovery. Open the Gospel, and you will find

that while Jesus anathematised the scribe and Pharisee, he cast out

neither the beggar, the thief, nor the prostitute. Jesus said to the

chief priests, and to the elders of the people, “Verily I say unto you

that the Publicans and the Harlots go into the kingdom of God before

you.” And it was the penitent thief who led the way to the Celestial

City, going side by side with the Master through the gates of Paradise.”

We hope we have succeeded in removing some prejudices attached to a name

which is very innocent in itself: and we think the reader is now

convinced that the appearance of the red republicans (a party

acknowledging the sovereignty of the people, and the dogma of human

equality) upon the scene of political action, was not altogether

uncalled for by the circumstances of the times.

5. Plutocracy.

The term Plutocracy occurs in the Democratic State Address: it is

derived from the words Plutus (the god of wealth, mammon) and krateo,

(to hold, or govern); and signifies a government of wealth. An

aristocracy is a government by a privileged class; a democracy is a

government by the people; a plutocracy is an organization of society in

which the government is administered by, and for the advantage of, the

wealthy classes of the community. A Plutocracy is a Mammonocracy.

On the bureau of the English house of Commons, there is a sacramental

book, a political Gospel, which expresses the thought upon which the

whole governmental policy of England is founded: that book is the

“Spirit of the Laws,” by Montesquieu. Why have the English adopted this

French book for their political Gospel? Let us open the book, and read!

“There are always”–says Montesquieu, Esprit des Lois, liv. XI, ch.6–“in

a State, certain persons distinguished by birth, wealth, or honors. But

if they are confounded among the people, and if they have only the same

vote which other men possess, the common liberty would be their slavery;

and they would have no interest to defend this liberty, because the

greater portion of the resolutions would be against them. The part

therefore which they have in the legislation, ought to be in proportion

to the other advantages they have in the State; which will happen if

they form a body having the right to arrest the enterprises of the

people, as the people has the right to arrest theirs. Thus the

legislative power will be confided to the body of the Nobles, and to the

body which will be chosen to represent the people, and these bodies will

assemble apart, and have separate views, and interests.” This is

Montesquieu’s formula of the government of England, a formula whose

accuracy is acknowledged by the English themselves.

The government of England is not built up on the idea of right, but on

the fact of the unjust distribution of rank, wealth, and honor, which

now obtains; and it has for aim and purpose, the perpetuation of the

present injustice though all coming generations:–the government of

England is therefore an aristocracy.

The English constitution does not recognise equality, but, on the

contrary, consecrates inequality; it does not recognise virtue, but

consecrates privilege:–the government of England is therefore, an

tyranny.

The principle of the English Constitution organises the national power

in favor of money, and not in favor of money, and not in favor of

man:–the government of England is, therefore, a Plutocracy.

The English government is founded on privilege and on inequality; and

its artifice consists in giving to the privileged classes a part in

legislation proportionate to the other privileges they possess in the

State.

The English government may be defined as being a

Tyranny–Aristocracy–Plutocracy; one and indivisible, and yet triple: it

is three in one, and one in three, and they mystery of iniquity.

If our Constitution ever degenerates, it will be by becoming gradually

conformed to that of England. It will become first Plutocratic, and then

Aristocratic; for Plutocracy paves the way for Aristocracy, even as

Aristocracy paves the way for Tyranny.

The Plutocrats are they who desire to see the right of voting guarded

(as they say) by a property qualification, in order that holders of

property may have a part in legislation proportionate to the other

advantages they possess in the State. The Plutocrats are they who are

opposed to the Secret Ballot, because the secret ballot would take from

them the power of intimidating dependent voters, and thus take from them

the part in legislation proportionate to the other advantages in the

State, which they now possess.

A rich man, even if he possesses millions of dollars, is not for that

reason a Plutocrat; but he becomes a Plutocrat so soon as he endeavors

to seize upon political power proportionate to the advantages he

possesses in other respects.

6. Cain and Abel.

The history of Cain and Abel would appear—if we may place confidence in

the system of interpretation adopted by Fabre d’Olivet an Pierre

Leroux—to be a sublime allegory, wherein is expressed the eternal

antagonism of the rich and the poor, the strong and the weak, the elect

and the outcast, the patrician and the plebeian, the baron and the serf,

the tyrant and the subject. Cain and Abel are mysterious symbols; and in

the story of their conflict, lies hidden the secret of the wonderful

sorrow that has, at all times, weighed on the heart of the children of

Adam. Abel is the man of high, honorable, disinterested sentiment, whom

Cain slew in the beginning, who Cain slays now, and whom Cain shall

continue to slay, till the new Jerusalem descends from God out of

heaven, and the reign of righteousness is established on the earth.

The meaning of the word Cain—which word symbolises the character of him

that was designated by it—is simply this: an acquisition, a possession.

Cain was a proprietor. Moses is careful to mark this meaning strongly,

in the verse where Cain receives his name: “And Adam knew Eve his wife;

and she conceived, and bare Kain, and said I have gotten (acquired,

possessed—Heb. kanithi) a man who is Jehovah.” The idea of royalty or

self-centering power, has always been attached to the word, Kan, Kin or

Cain. Kanh or Kahn, is still the title of the monarchs of Asia; and the

same word, with a slight variation, is the royal title in the west of

Europe. Thus in Tartary, they have the great Kahn; and in England, the

King.—The word Abel, signifies vacuitas, emptiness, a mere vapor. Abel

was, therefore, a non proprietor.

The murder of Abel by Cain, his brother, is the establishment on this

earth of unjust, jealous, exclusive proprietorship—proprietorship

established by Cain at the expense of Abel: that is, the establishment

of despotic ownership, of feudal tenures, of capital yielding usurious

rents, interests, and profits. And not without the mysterious seal of a

divine poetry, was this magnificent symbol impressed on the minds of

men. The oriental nations have recognized in Abel the genius of good,

and in Cain the genius of evil: Saint Augustin saw in Abel the figure of

Jesus Christ and of his persecuted disciples, while in Cain he saw the

figure of the persecutors. But the duality at the bottom of all these

contradictions and antagonisms, must be sought for in the word

pronounced by Eve—KANITHI, I possess. By the mere fact of Cain’s jealous

and exclusive possession, Abel—the proletariat—is slain.

The world suppose, from the common translation, that God condemned Cain,

because of the murder, to be a wanderer and a vagabond on the face of

the earth: but the common translation leads us astray. For we must

notice that Cain’s first act, after receiving the Divine sentence, was

to build cities. God does not condemn Cain to wander, but gives him a

sublime lesson in political economy. Because Cain followed the impulses

of his own blind egotism, he rendered himself miserable; and such is

always and everywhere the reflex penalty, and the natural consequence of

egotism. Cain was condemned to remain poor by his very desire to possess

all things: for he slew the brother who was predestined to make him

rich. Cain usurped the earth by killing his brother, and thus the earth,

being no longer cultivated by Abel, refused its fruits to him, Cain.

“And now art thou cursed from the earth, which hath opened her mouth to

receive thy brother’s blood from thy hand. When thou tillest the ground,

it shall not henceforth yield unto thee her strength.”—Gen. iv, 11, 12.

But Cain nevertheless believes that his is condemned to be a vagabond on

the face of the earth. He does not himself understand the sublime lesson

which the Almighty has given him. He supposes that he will be

thenceforth under the necessity of wandering, and hiding from the face

of God and man.

“Cain said, my punishment is more than I can bear. Behold, thou has

driven me out this day from the face of the earth; and from they face

shall I be hid; and I shall be a fugitive and a vagabond in the earth;

and it shall come to pass that every one that findeth me, shall slay

me.”—Gen. iv, 13, 14.

But the Supreme reassures the murderer:

“And the Lord said unto him, Therefore whosoever slayeth Cain, vengeance

shall be taken on him seven-fold. And the Lord set a mark upon Cain,

lest any finding him should kill him.”—Gen. iv, 15.

Taking all this as literal fact, would it not appear somewhat absurd

that God should not only carefully preserve the life of the fratricide

Cain, but should also establish, by this solemn precedent, as a

principle of abiding justice, that the life of Cain is worth in his eyes

the lives of seven aggressors upon Cain? Such justice on the part of the

Supreme, would be inconceivable. But the Bible is not speaking in this

place of one man, Cain, and of another man, Abel; it is, on the

contrary, speaking of the establishment among men, of jealous exclusive

property; and this under the symbol of two races, or rather of two

humanities; one humanity of possessors and proprietors, called Cain, and

another humanity compose of those who possess nothing, called Abel. What

then is the signification of the words which Moses here puts into the

mouth of the Almighty? The words of the Supreme are a continuation of

the political lesson given to Cain: they characterize the law which God

in his anger permits Cain to establish—the law of the strongest, which

may be called the legislation of Cain, the Cainic law. God says that he

will permit false right, false law, to reign on the earth; and herein is

the manifestation of the Divine justice, of the Divine vengeance, if you

will, against Cain. The ferocious murder fears that some one may kill

him. The Supreme answers, in that terrible and magnificent sentence

which has been so absurdly taken for an act of merciful clemency,—Fear

nothing! for it is thou, Cain, who shalt kill: thou hast established on

the earth a law of violence which necessarily draws forth seven-fold

violence upon him that exalteth himself against thee: whoever shall fall

upon thee, thou, Cain, murderer that thou art, shalt render back to him

a seven-fold recompense of evil!

But what was the seal, or mark, which God set upon the forehead of Cain,

that whoever found him might not slay him? It is the prestige which

protects the right of the strongest. The right of the strongest, right

founded on mere material fact, has reigned from the beginning, and

reigns now, in the earth. We behold the sway of this iniquitous right;

and no one has power to overthrow it. It is, in fact, consecrated. It

exists, after all, by permission of God; and vindictive kings do well to

call it—divine right. In the absence of true right, false right reigns

of necessity. Material force reigns, but material force is not the

origin of right; for if force appeared as mere force, no one would

willingly consent to obey it. Law is, however, so necessary to us, that

we respect force as though it were law, because it stands in the place

of law. Our hands are raised to strike, but they are arrested by the

divine seal set upon the forehead of Cain. When Cain slays, and revenges

himself seven-fold, he believes that he slays justly; and he against

whom Cain rises up, experiences a sort of fascination, which makes him

admit, and recognize—up to a certain point—the right of Cain. For the

aggressor upon Cain, in his act of armed rebellion, appeals to no right

other than that which flows from the Cainic law. All the tyrannies which

have invaded the earth, have been founded on this prestige of fact, of

actual and forcible possession. The history of the present reaction in

France, throws great light on the principle of the seven-fold vengeance

of Cain. The violent party (so called of order) is the instrument in all

countries, of seven-fold iniquity. Abel, if he presumes to act on the

principle of the Cainic law, is always the victim of his temerity, is

always slain afresh, the earth opening her mouth to drink up his blood.

The posterity of Cain complete the work of their founder, and organize

proprietorship and inequality throughout the earth. [3]

The Bible, in treating of the establishment and development of the

Cainic law, speaks 1st, of Cain, whose name signifies acquisition,

property: 2d, of Enoch, whose name signified limitation; for the first

effect of the system of property, is the limitation of each individual

within bounds which he naturally strives to enlarge; 3d, of Irad, whose

name signifies invading passion; that inward cupidity which is a desire

to encroach on the possession of one’s neighbor’s: 4th. of Mehajael,

whose name signifies manifestation, activity: 5th. of Methussel or

death’s fathomless pit: 6th. of Lamech, whose name signifies bond in

dissolution. Lamech fully establishes the Cainic law, and thus checks

the movement of the Cainic society in its road downward toward

extinction: for, first, limitation brings in isolation and division

among the children of Cain: then invading passion sets those who already

limit each other, into mutual antagonism: then this invading passion

passes over into open manifestation, hostility, internal war: afterward,

this hostility and internal war push society into the gulf of

destruction, death’s fathomless pit, threatening the race of Cain with

utter extinction: at last comes Lamech, the legislator of iniquity, the

great organizer of the right of the strongest, he who establishes a

legal system of oppression, tyranny, and irresponsible power.—Lamech

organises polygamy, and, by consequence, a system of castes; and then,

standing in the door of his tent, he thus sums up, in an address to his

harem, the final developments of the law of Cain:

“Adam and Zillah, hear my voice!

Ye wives of Lamech, hearken unto my speech!

For the least wrong done unto me, I will kill;

For a wound, I will kill a man;

For a deadly wound, I will kill a child even;

For if Cain avengeth himself seven-fold,

Surely Lamech shall avenge himself seventy and seven-fold.”

Meanwhile, by a rapid movement of thought, and without any preparation

of words, the writer of the book of Genesis brings back the primitive

authors of the human family upon the scene.

“And Adam knew his wife again, and she bare a son, and called his name

Seth: for God, said she, hath APPOINTED me another seed instead of Abel,

whom Cain slew.”—Gen. iv, 25.

It was the man of system and conventions, that came into the world this

time; for the name Seth signifies, appointed. Cain was the man of mere

material fact; and his pretended legislation was nothing other than the

dictate of his own will and egotism: but Seth bears a very different

character; for he brings conventions with him; and we may indeed

discover in his legislation, the first germs of constitutionalism. The

race of Seth is evidently contrasted in the Bible, with the race of

Cain. Abel is no dead; Cain and Seth have the world to divide between

them; society developes itself under new conditions: let us follow

therefore, the order of the legislation of Seth. Seth begets Enos, whose

name signifies weakness, invocation: the Bible explains this symbol by

adding,

“The began me to call upon the name of the Lord.”—Gen. iv, 26.

Thus the line of Seth, feeling its weakness, threw itself in its

desperation, on the protection of God; but it did not escape sudden

ruin.

“Enos lived ninety years, and begat Cainan.”—Gen. v, 9.

Behold, therefore, the race of Seth, from the third generation,

participating fatally in the condition of Cain, and reproducing, to a

certain extent, the other race. For Cainan is no other than Cain (as

Fabre d’Olivet shows by an examination of the biliteral roots) with a

softening of his peculiar characteristics. Cainan begat Mahalaleel, who

is a softening down of Mahajael, the fourth in the line of Cain.

Mahalaleel begat Jared, who is the Irad of the other line. Jared begat

Enoch, apparently the identical individual who appeared in the other

list. (For it is allowable, in a mythus, to cause the same person to be

born of various mothers.) Enoch begat Methuselah, the Methusael of the

line of Cain: and Methuselah, as before, begets Lamech, the ultimate

Legislator of the right of the strongest!

What else could indeed have been expected under the circumstances? All

constitutional monarchies, all republics which are founded on mere

material interests, or mere conventions, and which take no account of

the proletariat, but sacrifice it to the supposed welfare of the

privileged classes, all such constitutional monarchies and republics,

are but an alliance of Cain and Seth, contracted over the dead body of

Abel. It is Seth, the man of conventions, and of science, who

consummates the murder of Abel. This legislation of Seth, which ends

with Lamech, the oppressor of the weaker sex, and the organizer of

inequality, begins with Enos, the man who ‘invokes God!’ Cain is a

murderer, a highway robber, a pirate; but Seth is a respectable man, a

church-member, as it were, who, though he does precisely what Cain does,

yet does it in another way; for he does it scientifically, legally, and

meanwhile invokes God! Cain, standing alone, is a lawless, bloody

tyrant; but Cain in alliance with Seth, is a tyrant who contrived to

work his arbitrary will in accordance with conventions regularly signed

and sealed; but who, nevertheless, grinds the proletariat to powder, and

always with the utmost deference to law and order.

Such is the sense, and the connection, of the mythus of Cain, Abel, and

Seth.

[1] If the reader desires more full, and clearer information in regard

to the matters treated of in the foregoing paragraphs, let him consult

the treatise on Equality, by Pierre Leroux; where the positions here

taken, are firmly established and fully illustrated.

[2] It is possible that we speak here too favorably of the actual

legislation of Moses.

[3] The reader may deny the authority of Fabre d’Olivet, and refuse to

accept the interpretation of the name of the patriarchs, which we

propose to lay before him; it is a matter of indifference to us; the

philosophical sequence of idea is complete in itself, and will stand by

its own weight.