The first thing they did was to abuse poor old Robinson Crusoe, because he had advised his people, in his life-time, to make their money of gold (which can be only produced by labor, and not by hocus-pocus); and their currency of something that represented gold, and this, too, when he must have known that gold “was the machinery and relic of old despotisms;”[1] and they made no account whatever of the fact that he was the father of his country and lived in a cave. Next they declared that all the opinions heretofore accepted on this subject by the rest of mankind were fallacious; that nature had done its best to make the island an isolated community; that legislation had pretty effectually supplemented whatever in this respect nature had left deficient; and, therefore, that the wants of the island, in respect to money, currency, and every thing else, were so exceptional and peculiar that the accumulated experience of all the rest of the world could not be to them either applicable or instructive. All agreed that the pernicious theory taught by Robinson Crusoe, Friday, and other men of by-gone days and other countries—that money, to be good, ought to be a universally desirable commodity, and the equivalent of that for which it is exchanged—was the real source of all financial trouble; for was it not clear, that, if such were the case, those only could ever have money who, like the bloated wheat-holders, pig-holders, cattle-holders, house-holders, or bond-holders, had through labor previously come into possession of some desirable things, which they could give in exchange as an equivalent for money? while the true end of all financial reform, and the key to the terrible problem of poverty, was obviously to devise and bring into use that kind of money which those who had no wheat, pigs, cattle, houses, bonds, or other commodities, and were not able or disposed to acquire any through an exchange of their services, could have without difficulty, and in abundance. “We mean, therefore,” said the orator-philosopher, speaking for himself and his colleague Friends of Humanity, “to have more democracy and less aristocracy in the money market; more money in every body’s reach, and less for the petted few.”[2] In short, the patient having become very sick and attenuated by reason of the low (fiscal) diet upon which he had been fed, the doctors now proposed to resuscitate him by administering a still thinner gruel.
All also agreed that the word “money” was a bad name, and that the public would obtain a much clearer idea of the great problems at issue if more intelligible and scientific terms embodying definitions were used. One philosopher accordingly proposed that, as they intended to sprout it everywhere, they should go back to the Biblical designation, and call it the “root,” at the same time remarking that “the Lord showed what he thought of money by the kind of people he gave it to.” Another proposed to call it “the instrument of association” (Carey); a third, the “sign of transmission, of which the material shall be of native growth” (John Law, 1705); a fourth, “a sense of value as compared with commodities” (“British Tracts on Money,” 1795–1810); a fifth, “a standard neither gold nor silver, but something set up in the imagination to be regulated by public opinion” (ibid.).
As to what money, under the reform system, was, or should be, was also a question in respect to which there was not at first an entire agreement. One idea which found some favor, was, that money ought to be only a token, representative of services rendered at some indefinite time or place (possibly forgotten or disputed by its recipient), and “for which the holder has not received the equivalent to which he is inherently entitled under the system of division of labor.”[3] The best money, therefore, according to the philosophers of this idea, was an evidence that some one person owed some other person; and, consequently, the more debt, the more money; and the more money, the more wealth, unless it is to be supposed (as is not reasonable) that this sort of money was not to have the first attribute of all other money—namely, purchasing power.
Moreover, although the philosophers did not exactly say so, the inference was also legitimate, that in a community using merely “token” or “remembrance” money, the surest way to get rich would be to get in debt, and the best way of carrying on an enlightened system of trade and commerce, to exchange commodities, the results of time and labor, for evidences of debt without interest. It is needless to say that these teachings and inferences tended to greatly strengthen the people on the island in the opinion they before entertained, that the currency they already had—namely, evidences of destruction—was the “best currency the world ever saw.”
The three leaders among the philosophers were not, however, men who were going to be contented with any half-way measures. Had they not put their hands to the plow of reform? and were they, after so doing, to allow the plow to stick fast in the furrow? They accordingly appealed first to authority, and then to untutored reason.
The following are some of the authorities to which great weight was given:
“Commerce and population, which are the riches and power of the state, depend on the quantity and management of money.”—John Law, Memoir to the Duke of Orleans, 1705.
“Does, or does not, our duty to ourselves and the world at large demand that we maintain permanently a non-exportable circulation? Such is the question which now agitates the nation, and must at no distant day absorb all others. The affirmative of this question is also in perfect harmony with the practice and experience of leading nations, and in harmony with the teachings of sound economic science.”—Letter of Henry C. Carey to Congressman Moses W. Field, of Detroit, September, 1875. Consult also Governor William Kieft, “On the Use of Wampum Money in New Amsterdam” (large folio, scarce and rare), 1659.
“Long familiarity with the practice of giving security for loans, and of paying them back at a fixed date, has blinded us to the national advantages of loans without security and payable at any date.”—Karl Marx, Secrétaire, Organisation de l’Internationale.
But the thing which the philosophers relied on more than any thing else to sustain their views before the people was a judicial decision recently made in a neighboring country, by its highest court, before whom the question as to what constituted money was officially brought for determination. This decision, expressed in the very peculiar language of the country, was as follows: “What we do assert is, that Congress has power to enact that the Government promises to pay money shall be, for the time being, equivalent in value to the representative of value determined by the coinage acts, or to multiples thereof.” All of which, translated into the language of the island, meant that Government has the power to make a promise to pay, containing an acknowledgment in itself that the promise has not been paid, a full satisfaction that the promise has been paid. That this decision, furthermore, covered no new points of law, was indirectly conceded by the learned judges, inasmuch as, in giving their opinions, they cited, as precedents worthy of being ever remembered, the decisions of that eminent old-time jurist, Cade (Jack), who ordained that “seven half-penny loaves should be sold for a penny;” and that “the three-hooped pot shall have ten hoops.” The same court also strengthened its position by saying that “it is hardly correct to speak of a standard of value. The Constitution does not speak of it. Value is an ideal thing. The coinage acts fix its unit as a dollar; but the gold and silver thing we call a dollar is in no sense the standard of a dollar. It is a representative of it. There might never have been a piece of money of the denomination of a dollar.”[4]