CHAPTER XXI. NATIONAL SYSTEM OF CURRENCY AND EXCHANGE REQUIRED.
Inadequacy and Absurdity of present Medium of Exchange—Necessity for new National Currency for Home Trade—Example from Iron Currency of Sparta—Labour Notes of Guernsey—Gold and Silver mere Commodities—All four Reforms must be combined.
In this chapter we shall elucidate the remaining two propositions of the League, on the important complementary reforms necessary to be introduced for the expulsion of human slavery from the face of the land, and the full emancipation of industry from the trammels of a false and pernicious system of Currency and Exchange. The sixth and seventh resolutions read as follows:—
“That the National Currency should be based on real, consumable wealth, or on the bona fide credit of the State, and not upon the variable and uncertain amount of scarce metals; because a currency depending on such a basis, however suitable in past times, or as a measure of value in present international commerce, has now become, by the increase of population and wealth, wholly inadequate to perform the functions of equitably representing and distributing that wealth; thereby rendering all commodities liable to perpetual fluctuation in price, as those metals happen to be more or less plentiful in any country; increasing to an enormous extent the evils inherent in usury, and in the banking and funding systems (in support of which a legitimate function of the law—the PROTECTION of property—is distorted into an instrument for the CREATION of property to a large amount for the benefit of a small portion of society belonging to what are called vested interests); because, from its liability to become locally or nationally scarce or in excess, that equilibrium which should be maintained between the production and consumption of wealth is destroyed; because, being of intrinsic value in itself, it fosters a vicious trade in money, and a ruinous practice of commercial gambling and speculation; and, finally, because, under the present system of society, it has become confessedly the ‘root of all evil’ and the main support of that unholy worship of Mammon which now so extensively prevails, to the supplanting of all true religion, natural and revealed.
“That in order to facilitate the transfer of property or service, and the mutual interchange of wealth among the people, to equalise the demand and supply of commodities, to encourage consumption as well as production, and to render it as easy to sell as to buy, it is an important duty of the State to institute in every town and city public marts or stores for the reception of all kinds of exchangeable goods, to be valued by disinterested officers appointed for the purpose, either upon a corn or a labour standard; the depositors to receive symbolic notes representing the value of their deposits, such notes to be made legal currency throughout the country, enabling their owners to draw from the public stores to an equivalent amount, thereby gradually displacing the present reckless system of competitive trading and shopkeeping,—a system which, however necessary, or unavoidable in the past, now produces a monstrous amount of evil, by maintaining a large class living on the profits made by the mere sale of goods, on the demoralising principle of buying cheap and selling dear, totally regardless of the ulterior effects of that policy upon society at large and the true interests of humanity.”
Add to the gigantic fraud of the land-usurpers the hardly less monstrous fraud of the money-changers in daring to make two particular metals (falsely called precious) the sole basis of that currency which is the life’s blood of society, without which exchanges cannot be safely effected, and you see capped before you the climax of iniquity. These precious metals being articles of commerce—mere merchandise, like iron or cotton, at the same time that they are made the sole basis of our instruments of exchange, it follows, as a necessary consequence, that whoever can, by commerce, monopolise these precious metals can, by so doing, monopolise at the same time the basis of our currency, and so leave us without any instruments of exchange at all, but what may be convertible, upon their own fraudulent terms, into those two favoured metals, which their commercial wealth has enabled them to monopolise.
The false principle at the root of our present system is, that money or the medium of exchange should be itself a thing of intrinsic value. By this false principle there must be an expenditure of labour equal to what is required to produce the equivalents it exchanges for; and besides the absurdity of such misplaced, because wholly useless, labour, it is manifestly ridiculous to suppose that any one commodity (more especially an exceedingly scarce one, like gold) can ever be obtained in sufficient abundance to represent adequately all other commodities which may be produced ad libitum, to any extent demanded by consumption, and which, without the intervention of gold at all, might be interchanged from hand to hand, in one single week, to an amount equal to fifty times the value of all the gold in the country. It is like supposing a part of a thing to be equal to the whole. Gold may be a good measure of value, and, as such, is perfectly unobjectionable; but as an exclusive representative of value, or as the sole basis of representation (which our present laws have virtually made it, by constituting it the sole basis of our circulating medium), it is to our productive and trading population what a single blanket or a single suit of clothes would be, applied to the use of a whole family consisting of divers persons of all ages and sizes. The strongest and most important members of the political family get the best share of the blanket; the others get the least, and some get none at all. As well might the garments of a dwarf be expected to fit a giant, as well might our legislators attempt to restore a full-grown bird to the egg whence it was hatched, as attempt to tie down the population and commerce of this great country to the Procrustean bed of Peel’s monetary system as established by his laws of 1819 and 1844. That system alone, were there no other causes in operation, must sooner or later produce a convulsion in this country, if it be not speedily unmade by wiser and better men than its authors. To pretend that the rights of property exist in a country where such a monetary system coexists with private ownership of the soil, is a monstrous perversion of language. It is not the rights of property, but the wrongs of robbery, that these land and money laws tend to conservate.
The prime necessity of man is to live: he cannot live without corn, unless in the lowest condition of the savage; but he may not only live, but live in comfort, without gold or silver. They are not the “staffs of life,” however in our ignorance we may bow the knee to them as to graven images. We invest them with supreme power, as superstition invests its idols. The ancient fabulist who sketched the character of Midas seems to have written, by anticipation, a satire on modern credulity. Midas enjoyed the fatal gift of turning all he touched into gold; his food was transmuted into the precious metal, and starvation taught him that corn was the true standard of all that was physically valuable. Midas was the prototype of modern bullionists and moneymongers. The Bank of England can now pave its floors with gold; but what does it avail to the people? And yet was it not the industry of the people that raised the ore from the mines, and brought it hither by the sale or exchange of their labour, sustained by corn, the produce of labour in another form? What was the intrinsic value of gold to Midas?
We must not confound the qualities of a mineral with its properties. Undoubtedly, the precious metals possess durability, sameness, great value in small bulk, portability, resistance to wear and tear, in a greater degree than any other substances; but these qualities per se do not constitute them money,—they do no more than recommend them to mercantile nations as the best instruments of their kind out of which money can be manufactured; it is the act of the legislature, and that alone, which gives them the character and force of a legal tender, without which they would not form part of the currency of a nation. The legislature could confer the same power on any other material, even the most worthless, as Lycurgus did on iron, deprived of its malleability; and yet Sparta flourished with that circulating medium; nay, more, Sparta fell into ruin when the precious metals superseded the worthless iron, which its rulers were compelled to revive before the Republic was restored to prosperity. Some Eastern nations have used cowries (small shells) as money; and the Russians, in the fourteenth and fifteenth centuries, employed the skins of squirrels and martens. We ourselves use paper, and have used it without the condition of convertibility. In fact, if gold and silver had never been deposited in the bowels of the earth, or had been suffered to remain there, the wealth of nations would not have been deteriorated one farthing. They are the signs of the thing signified, made such by Act of Parliament; they will neither feed us, nor clothe us, nor house us through their own inherent qualities. It is we ourselves who give them all their gigantic power; we make them a legal tender. Thus credulity set up graven images in the temples of old; and Labour, having deposited all its earnings on the shrine, bent its knee before the shining metal, and implored food and raiment from the idol carved with its own hands. Common sense would have appealed to the plough and the loom.
We have said that the precious metals, when made a legal tender by the legislature, are still no more than signs of the thing signified; what, then, is the thing signified, whose value they measure, and in measurement represent? We answer, all those things of value which, in return for a sufficient inducement, are capable of being transferred from one person to another. These are expressed by the terms Property, Capital, Stock. All these possess intrinsic value, for they represent accumulated labour; and accumulated labour is the result of a continuous consumption of corn—the standard of all values—the staff of life, without which neither property, capital, nor stock could be accumulated, without which, indeed, the race of civilised man could not be perpetuated. A granary full of corn, or a warehouse full of cottons and woollens, are examples of real money: they may exist while the proprietors of them have not an ounce of gold or silver in their coffers; and, in a mercantile sense, they may be poor, nay, necessitous, with all this wealth in their possession; because corn, cottons, and woollens are not legal tenders according to Act of Parliament,—no man is bound to take them in acquittance of a debt,—they are not a satisfaction to the sheriff. It is idle to say that such persons may obtain relief through a banker: the very application shows a state of dependence into which the holder of real money ought never to be reduced: for he who produces the thing signified ought not to be under the control or caprice of him who merely deals in its sign. Moreover, the banker himself may be unable to give any accommodation: gold and silver may have left the country; even the Bank of England may be so crippled as to have borrowed some millions of the precious metals from France: we may be within twenty-four hours of barter. Is this a picture of the imagination? No; it is a faithful sketch of what has happened; and why should it not happen again, the same causes remaining in readiness to act?
What is the lesson that such considerations ought to teach? It is this, that a nation, rich in real money, may be thrown into bankruptcy, and perhaps revolution, by adopting a false representative of value, through the privation of that gold which its legislature recognises as the sole legal tender. Let the gold go, what remains? Our land, retaining its fertility; our machinery, capable of continuing its work; our vessels, as seaworthy as before; our skilled industry, with its intelligence unimpaired; our unskilled labour, not a whit enfeebled in its natural productive powers. These are the elements of real money.
In the island of Guernsey it was proposed to build a meat-market, and the estimates amounted to about £4,000. As all taxes in that island are raised by a direct assessment on property, the rich protested against the expenditure, though they desired the proposed accommodation. Here, then, was a dilemma, since they who willed the end would not will the means, and without the means the structure could not be erected. Had such an emergency arisen with us, our Chancellor of the Exchequer would unhesitatingly have thrown all the burden on the working-classes, by taxing the commodities they daily consumed; but the rulers of Guernsey have notions of honour and justice which do not permit them to relieve the rich at the expense of the poor, and they are too well instructed in the principles of commerce to crush trade by customs and excise; these contrivances, as iniquitous as they are bungling, would be disdained by the legislatures of the Channel Islands. How, then, did they proceed in building the meat-market? They issued paper notes, guaranteed by the States of Guernsey, this national paper not bearing interest; and the better to show the nature of this currency, the words “Meat-market Notes” were inscribed upon them, and they were numbered so that no more could be put into circulation than represented the sum agreed to be expended on the undertaking. On the first instalment being due to the contractor, he was paid in these notes, which he again paid away to his workmen and others, who passed them to the shopkeepers; the landlords took them for rent, and the treasurer of the States and the constables received them in discharge of dues and taxes. At length the building was completed, when butchers took the stalls at an annual rent, and as that rent was received the meat-market notes were destroyed. In due course of time this rent wholly extinguished the notes; and the market remains, to this day, a permanent source of national revenue, applicable to other national improvements; and, strange as it may sound, no individual has been taxed one farthing for its construction! Here, then, is a practical illustration of the uses of a symbolic currency, and of the mode in which it may be made to work. Not an ounce of gold was employed; not a shilling of interest was paid. The States of Guernsey were their own guarantees for their own paper; they created the substance with the symbol, realising the allegory of Aladdin’s lamp.
As bullion, the precious metals are mere commodities, and therefore possess no more intrinsic value than any other commodity, under the laws of supply and demand; as coin, they are still bits of bullion, and it is the act of ourselves, or of the legislature who represents us, that gives them the character and the power of a legal tender. And yet we have the folly to kneel down to this graven image, and measure individual happiness and national greatness by its presence or its departure. Foreign trade, however valuable, must ever be subsidiary to the home trade. This doctrine none will contest; being admitted, then it follows that the chief care of the government should be to provide a currency suited to the home trade, and leave to merchants the care of adjusting the foreign exchanges, which never, for any long period, can be adverse or favourable; for what the ebb tide takes away the flood returns. It is an axiom in political economy that a favourable state of the exchanges acts as a bounty on imports and as a duty on exports, while the reverse takes place when the exchanges are unfavourable. The true par forms the centre of these oscillations, and though peculiar circumstances will rarely allow that par to be exactly hit, yet the tendency to approach it is constant, and the divergence from it is always evanescent. But the home trade is governed by very different influences; for, while we pay taxes on all we consume, the foreigner pays none on what he purchases from us, since he deals with us according to the measure of value, while we deal with each other according to price. Gold represents the natural price of commodities, not the taxed price. Therefore, we ought to have two sorts of currency; let bullion serve for foreign trade, but let us have government paper, convertible into gold at the market price—not the Mint price—as the medium of internal exchanges. When gold is scarce, let it rise in value measured in the Bank or National note, and we need not fear a drain of bullion.
There can be no freedom nor safety, much less prosperity, for any people till they obtain just laws to regulate landed tenures, credit, and commercial interchange. With such laws there could not exist a bad government, nor would oppression in any form be possible. Without such laws there cannot be a good government, be its form, its administration, its institutes, or its franchises what they may. Land, and whatever else the Deity has made for man’s use, must be expropriated, by commutation, on equitable terms for the general good, and never again be made private property. Credit must be accessible for every member of the community, on terms beneficial for the individual, and just and safe for the public. And all commerce must be gradually, reduced to equitable exchange on the principle of equal values for equal values, measured by a labour or corn standard.
Under the systems of Landed Tenures, Currency, and Commerce which at present prevail in England and in France, it is no exaggeration to say, that those who live upon rents, profits, usury, discounts, dividends, commissions, fees, etc., absorb from 300 to 350 million pounds sterling worth of the people’s produce in each country every year, over and above what they give the people any value whatever for, in money or service of any appreciable kind. In fact, for this enormous annual drain the useful classes of both countries receive no consideration whatever. It is sheer robbery, disguised under plausible names and forms. The Seven Propositions of the National Reform League present what would seem the only feasible means of ridding the country of this crushing incubus, consistent with acknowledging legal rights and vested interests. Unless some such compromise be agreed on between rich and poor, both in England and in France, a convulsion, sooner or later, that will engulf both, must be the inevitable consequence. No country could long sustain two such existing drains by the idle and baneful classes upon the laborious producers—drains equal to from 300 to 350 millions every year in each country—without at last collapsing after protracted agonies to preserve national life. The system of equitable Exchange substituted for the present nefarious one of profitmongering would save the souls as well as the bodies of both nations; but that is absolutely impossible without such antecedent laws on Land and Currency as we have pointed out.
It is the same with Currency. You may, for instance, by repealing Peel’s Currency Acts of 1819 and 1844, by making an annual issue of Exchequer paper, equal to the taxation, our legal tender, and by superadding to this the advantage of a free but sound commercial currency, in the form of private and joint-stock paper issues adequately secured,—you may by such a reform as this, and by making gold a mere merchandise to rise and fall in the market like all other merchantable commodities according to the law of supply and demand,—you may by this means make money more plentiful and come-at-able for trade purposes, and thus relieve society of a large proportion of its distress,—you may do all this and so far effect much good for society without any other accompanying reforms; but the benefits of such a reform per se would, we contend, be only temporary; they could not be permanent, for want of the other reforms. For a time money would be plentiful, employment abundant, prices and wages high, and trade what is called prosperous; but this very prosperity would soon work its own destruction; it would lead to increased speculation, increased production, increased competition, increased rents for lands and houses, increase of expenditure and taxation, and to a terrific increase of what are called vested interests; it would soon overstock the markets, and glut the warehouses with unsaleable goods. Then would come a crash—a fearful, ruinous crash; mills would run short time or stop; the factories and the workshops would dismiss their hands; multitudes accustomed for some time to full employment and good living would be cast suddenly adrift to beg, borrow, or steal; the workhouses would overflow as the mills and workshops became empty; the shopkeepers would be ruined by forced sales and the lack of legitimate custom. This would react on the manufacturers and merchants, and, through them, on the artisans and labourers. Meanwhile the increased pressure of inflamed rents, taxes, and vested interests would be found intolerable by a people without trade and without employment. Down would go prices and wages again, in despite of the superabundance of money, which would have found its way to and accumulated in the hands of usurers, fixed-income men, and non-productive, overgrown capitalists. In short, we should see a repetition on a larger scale than ever of one of those periodic crises in the commercial world which, under the present system, we invariably find to follow close upon the heels of every great development of our manufacturing and trading prosperity.
It is with Land-reform as with Currency; it would be of comparatively little use to nationalise landed property with the view of throwing open the land to labourers and small farmers, unless you at the same time enabled them, by a sound system of Credit, to procure implements and stock for their holdings, and to subsist themselves till after they gathered in the first year’s crop. And even with competent allotments of Land and Credit to stock them, the occupants’ condition would be still but a very indifferent one without the aid of an efficient Currency wherewith to effect easy and equitable exchanges of their surplus agricultural produce for money or for other produce, as their wants might require. In short, each element is imperfect in itself as the means of social reform. But all, from operating conjointly and harmoniously, go to make social reform perfect. And seeing that it is just as easy to legislate upon all forms conjointly as upon each separately, it appears to us a sad waste of time and labour to agitate for any one without including the rest at the same time, the more especially as the peculiar virtues of each are only brought into full play and development by being made to operate in unison with the other three.
There is not one warrior that ever fought for king, people, or commonwealth: they have all fought for landlords and profitmongers, to whom alone they could look for pay and promotion; consequently, no good to the human race ever accrued from their conquests or victories. Nor will the millions ever gain by any war not waged by themselves on their own account, nor by any victories not won by themselves over their hereditary eternal foes, the landlords and profitmongers—over the latter especially, the more numerous, deadly, and irreclaimable of the two. Profitmongers are, indeed, perfectly irreclaimable enemies of the human race, because as such they can possess no one virtue, no one quality of head, heart, or conscience, by which they could be won over to God or humanity. In all the higher professional callings—in those associated with the arts and sciences—the pursuit of truth, and the culture of a taste for the Sublime, the Beautiful, the Chaste, the Sympathetic, form an essential part of their studies and the very foundation of success. Such is the case with engineers, architects, sculptors, painters, musicians, historians, mathematicians, physicians and surgeons, artists of every kind, orators, poets, professors of science, advocates, &c. The higher qualities of the human mind must be more or less cultivated by all those descriptions of persons, if they would excel; and it is in the very nature of their studies to generate in them some appreciation of truth, taste, sympathy, or refinement. But the profitmongering devils of society neither need nor care for such ennobling pursuits. Indeed, the less they are tinctured with them, the more fitted they are for their nefarious callings. Genius, taste, culture, are not required for buying in the cheapest markets and selling in the dearest, for lying, deceiving, adulterating goods, giving short weight, or cheating our fellow-creatures out of their substance, either by underpaying them for their work or giving them less than the value for their money. Still less are the superior moral qualities required in profitmongering pursuits; indeed, such qualities are only drawbacks and impediments in the way of success in business. Hence no clever profitmonger ever thinks of encumbering himself with them. True, mercantile men have a proverb which has become trite from use—“Honesty is the best policy;” but they use it, like other good things, only to improve their opportunities of cheating. A tacit understanding not to cheat one another is often necessary to their success in cheating the rest of mankind, which, after all, is the main business of their lives. As this iniquitous class can grow rich only by grinding and cheating their fellow-creatures, that is, by robbery and oppression, they are, by the very nature of their pursuits and practices, irreconcilable enemies of society. It is their interest that the working-classes should be always at variance amongst themselves—always a prey to ignorance—given to mutual jealousy and mistrust—and filled with prejudices and superstitions, by which they may at all times have their passions inflamed against those who would unite, enlighten, and emancipate them from bondage. It is the interest of this class, too, that the mass of the people should never own a house, nor even rent an acre of land, so that they may be forced to become wages-slaves to profitmongers, and pay to them every few years in rent more than the value of their wretched tenements. In short, profitmongers, as the main supports of all aristocracies and of all tyrannies in the world, are constrained by the very necessities of their position and by the very nature of their pursuits, to ignore the Ten Commandments in practice, and to trample under foot the Gospel of the Saviour. There cannot, then, be even a semblance of real reform in society without beginning with clipping the claws and drawing the teeth of the profitmongers. The human race is, indeed, without hope of salvation either in this world or the next, until their present unlimited and irresponsible power of murder and robbery over the mass of mankind shall be wrenched from profitmongers and landlords.
