The owners of this real estate have the greatest inducements to use it as banking capital, because all the banking profit, over and above expenses, is a clear profit; inasmuch as the use of the real estate as banking capital does not interfere at all with its use for other purposes.
Farmers have a double, and much more than a double, inducement to use their lands as banking capital; because they not only get a direct profit from the loan of their notes, but, by loaning them, they furnish the necessary capital for the greatest variety of manufacturing purposes. They thus induce a much larger portion of the people, than otherwise would, to leave agriculture, and engage in mechanical employments; and thus become purchasers, instead of producers, of agricultural commodities. They thus get much higher prices for their agricultural products, and also a much greater variety and amount of manufactured commodities in exchange.
The amount of money, capable of being furnished by this system, is so great that every man, woman, and child, who is worthy of credit, could get it, and do business for himself, or herself—either singly, or in partnerships—and be under no necessity to act as a servant, or sell his or her labor to others. All the great establishments, of every kind, now in the hands of a few proprietors, but employing a great number of wage laborers, would be broken up; for few, or no persons, who could hire capital, and do business for themselves, would consent to labor for wages for another.
The credit furnished by this system would always be stable; for the system is probably capable of furnishing, at all times, all the credit, and all the money, that can be needed. It would also introduce a substantially universal system of cash payments. Everybody, who could get credit at all, would be able to get it at a bank, in money. With the money, he would buy everything he needed for cash. He would also sell everything for cash; for when everybody buys for cash, everybody sells for cash; since buying for cash, and selling for cash, are necessarily one and the same thing.
We should, therefore, never have another crisis, panic, revulsion of credit, stagnation of industry, or fall of prices; for these are all caused by the lack of money, and the consequent necessity of buying and selling on credit; whereby the amount of indebtedness becomes so great, so enormous, in fact, in proportion to the amount of money extant, with which to meet it, that the whole system of credit breaks down; to the ruin of everybody, except the few holders of the monopoly of money, who reap a harvest in the fall of prices, and the consequent bankruptcy of everybody who is dependent on credit for his means of doing business.
It would be inadmissible for me, in this letter, to occupy the space that would be necessary, to expose all the false, absurd, and ridiculous pretences, by which the advocates of the monopoly of money have attempted to justify it. The only real argument they ever employed has been that, by means of the monopoly, the few holders of it were enabled to rob everybody else in the prices of their labor and property.
And our governments, State and national, have hitherto acted together in maintaining this monopoly, in flagrant violation of men's natural right to make their own contracts, and in flagrant violation of the self-evident truth, that, to make all traffic just and equal, it is indispensable that the money paid should be, in all cases, a bona fide equivalent of the labor or property that is bought with it.
The holders of this monopoly now rule and rob this nation; and the government, in all its branches, is simply their tool. And being their tool for this gigantic robbery, it is equally their tool for all the lesser robberies, to which it is supposed that the people at large can be made to submit.
Section XV.
But although the monopoly of money is one of the most glaring violations of men's natural right to make their own contracts, and one of the most effective—perhaps the most effective—for enabling a few men to rob everybody else, and for keeping the great body of the people in poverty and servitude, it is not the only one that our government practises, nor the only one that has the same robbery in view.