It is probable, I think, that nothing more clever in the way of cheating or robbery will ever be invented than the issuing of paper money by private banks; for the business is so adroitly managed that it is highly respectable,—which cannot exactly be said of some other modes of cheating. A bank president and the cashier command much respect in the city or the country village, and conduct their business openly, too. Indeed, they are usually magnates in the community in which they reside, and are intrusted, to large extent, with other people's money, while the unfortunate fellow who cannot procure a proper bank charter, and so has to content himself with running illicitly a humble faro bank, is apt to be frowned upon by the community. Perhaps a more pertinent example of the inability of the masses to discriminate in moral affairs, could not well be suggested.
The country is flooded with counterfeit money, especially of the "fractional currency" kind. Everybody takes it, and nearly everybody who has a ten cent, or twenty-five cent, or fifty cent "representative of value," of the spurious kind, lets it pass on, if it will. The public conscience is not disturbed by these little things; and there are a great many persons who let the one dollar and five dollar counterfeit bills which they chance to receive, "go on doing their accustomed good," into the hands of others. This course is illegal, and therefore "immoral," and not right; and in another sense it is immoral, because it is unjust and thievish in its character. But then, as some simple people may be surprised to learn, nearly all the issues of private banks are also thievish and unjust. Bank bills are not generally issued according to the requirements of the law, and are, therefore, not even legal money, and are of no more real worth than a counterfeit bill, so long as the latter passes. It is in their negotiability, or the passing thereof, that bank bills are valuable or useful as a means of exchange. The counterfeit bill is just as convenient so long as it does the work of "passing."
I do not know what is the fact regarding the private banks of Connecticut, for example, nowadays; but a few years ago an eminent lawyer of that State told me that he presumed there was not a single bill legally issued by any of the Connecticut banks, the circulation of which amounted in the aggregate at that time to millions of dollars. The law of the State of Connecticut limited the issue of bills by any bank to not over ten times as much in representative amount as the "specie or bullion" which the given bank had constantly in its vaults. If the bank's capital was, for example, $200,000, but invested in real estate, then the bank could not properly issue a single dollar, unless by some means it possessed itself of specie to hold in its vaults; even then evading the spirit of the law. But my friend, the lawyer referred to, informed me that none of the banks complied with the rule of keeping the requisite specie in its vaults. Suppose a bank's issues amounted to $300,000; to respect the law it would have to keep $30,000 specie on hand. Is it reasonable even to suppose it would do so when it could readily loan the $30,000 to parties in New York at seven per cent. interest, and thus make them "earn" $2,100 a year? Not at all; and the banks did not heed the law.
But there were Bank Commissioners, whose duty it was (and there are the same still, I suppose) to see to this matter, together with others relating to banks. They visited the banks once or twice a year. When about to make a visit, they sent word to the bank officers when to expect them, and the officers of a given bank in Hartford or New Haven, for example, went to other banks and borrowed from several, for the time being, specie enough in the aggregate to make a "show" with. As the commissioners, after visiting one bank, and making an examination, were about to leave it and go to another, the specie found in the bank examined, was sent off to the other bank, and there did service again; and so on through the series of the city banks. The isolated country banks, like that at Litchfield, had notice of the advent of the Bank Commissioners, and sent to the city banks for a temporary loan of the required specie.
Thus it was that the banks conducted their business illicitly, and it is probable that at no time was a single dollar of their issues properly predicated, and every dollar was therefore illegally issued. But the bills passed,—passed as well as undiscovered counterfeit bills,—and were, in reality, just as fictitious and illegal. But the banks being more sharp, and having more facilities for covering up their iniquity than have the counterfeiters, succeed in swindling the people, year after year, without detection, while the poor counterfeiters are frequently caught and punished, and their "capital" (dies for "making" the money, paper, etc.) is destroyed; and thus their business is interrupted, very much to the detriment of its profits, and their laboriously-earned skill, as "business men," made as nought, and all their valuable time in perfecting themselves in their business also lost. It is sad to reflect upon this; but the picture would be sadder, perhaps, if added to these irregular swindlers, were the regular bank swindlers of the land.
So when one comes to analyze matters, no great moral distinction is found between two persons, one of whom swindles under "color of law," while the other swindles in defiance of law. The latter is perhaps the braver (though less sagacious) man of the two. It is, after all, only a question of taste or expediency; and so is it that the great counterfeiters think. Officers arresting these men, frequently find them ready to defend their cause "on principle." They always avow themselves "as good men as the bankers," and they frequently declare themselves public benefactors, in that they make money plenty, and relieve the stringency of the money market!
"The only good of paper money," once said a great counterfeiter to me, "is to pass; a counterfeit bill is just as good for passing as a genuine bill; and if you folks would let us "private bankers" alone long enough to give us time to perfect our business, we should be able to produce "goods" so perfect that nobody would find any fault with them, and all would feel grateful to us. But it costs us a great deal to get well started in business; and just as we are beginning to thrive, you step in and break us up!"
The man to whom I allude was serious in what he said. Of course he was lacking in moral perceptions, and was, in one sense, demented, or a "great fool;" for he could not see the moral difference between one kind of robbery and another one just like it in principle. I pitied the man's moral obliquity, while I handed him over to the jail-keeper to await trial. (I am sorry to say that the fellow, for some reason, was never brought to trial. The District Attorney "nolled" the case, although the evidence was clear enough against the "private banker." I half suspect that the attorney admired the fellow's reasoning, and sympathized with him.)
Under the circumstances, it is not then strange that a large number of persons of excellent talent, are engaged in counterfeiting, or in the distribution (or "shoving," to use the technical phrase), of counterfeit money in this country, and the distributors are to be found in all classes. I have in my mind's eye, as I write, an "honest farmer," in a certain town in the State of Vermont, who manifested, in the goodly "year of our Lord," 1870, an excellent disposition to help the counterfeiters distribute their goods, but who was sadly "disappointed" in his enterprising spirit.
Almost every business has its counterfeiters. As surely as a man conceives of some practical, easy, business way of making money, so sure is he to find a host of competitors springing up about him, and injuring his business. This has been the fate, to considerable extent, of the regular counterfeiters,—the men, who, by their great talent as engravers, have added so much to the mechanical skill of the country. There is a plenty of scamps in such a place as New York, for instance, who always stand ready to profit by other people's labors. (I should not like to be called upon for a classification of these scamps, for fear that the various species of the genus "who profit by other people's labors" might include some reader's most respectable friends.)