William Leggett 1837 Who runs the govt?
Hey you old fart, did you have biscuits with this guy?
econlib.org
We say here is an end of the safety fund bubble; but this position is conditional on the people's asserting their equal rights, and demanding the absolute divorcement of legislation from the business of banking, and from all supervisory connection with trade and credit, further than the mere enforcement of the obligations of contracts, and the punishment of frauds. If the present condition of things does not impel them to do this, they are sunk in a depth of fatuity beyond all hope of redemption. It is as palpable to the mind, as the universal light of day to the senses, that the present anarchical and chaotic condition of financial affairs is the result, the direct and inevitable result, of the unholy alliance between politics and banking. The union of bank and state in this country is crushing the people under the weight of a despotism as grievous as was ever imposed upon mankind by the union of church and state. Better, far better, to be under the dominion of a hierarchy, than under the galling and ignoble rule of legislation money-changers.
The banks are broken, and, without legislative intervention, will soon forfeit their charters. We have been sorrowfully taught the miserable impotence of legislation; it is the fountain from which the waters of bitterness have flowed; let us not then again unseal it, that it may effuse another desolating flood. What can legislation do? Insult the community, by confirming the special privileges of money changers, after their own acts have declared their utter worthlessness? Enable a band of paper-money depredators to prey more voraciously than before on the vitals of the people? Authorize them to pour out a fresh torrent of their promises, now really of no more value than the paper on which they are writ? Will the community tolerate such an enormous fraud?
II.15.9
Let the Banks perish! Let the monopolists be swept from the board! Let the whole brood of privileged money-changers give place to the hardy offsprings of commercial freedom, who ask for no protection but equal laws, and no exemption from the shocks of boundless competition. We commisserate the innocent who suffer by the downfall of the banks; but we cannot consent that a mitigation of their troubles shall be purchased by the perpetuation of a system fraught with so much evil to the entire community. Now is the time for the complete emancipation of trade from legislative thraldom. If this propitious moment is suffered to pass by unimproved, the fetter, now riven almost asunder, will be rivetted anew, and hold us in slavery forever. The choice is presented to us of freedom or perpetual bondage. Let us demand, then, as with one voice, the reintegration of our natural rights; let us protest against the renovation of that cumbrous fabric of legislative fraud and folly, which has fallen of its own weight, and, if raised again, will again topple before the first commercial revulsion, to bury other myriads in its ruins.
A general chen wannabe - the more things change - the more they stay the same.
The newspapers, with scarcely an exception, eulogize the banks for suspending payment, and now that they have thus declared themselves bankrupt by their own unanimous act, pronounce them as good and solvent as before, and call upon them to extend their loans. Loans of what? Irredeemable promises! On what possible pretence of justice or common sense, can the banks continue their ordinary business of discount, and charge a difference of six and seven per cent between their dishonoured paper, and the valuable paper of those merchants and traders who have withstood the shock of commercial revulsion, and met all their engagements punctually and to the letter? Will any one be so preposterous as to say that the promises of the banks, which are a lie on their face, are as good as the promises of such individuals? But the banks, it is contended, are perfectly solvent, and have assets sufficient to meet all their engagements. This may be so, or it may not; but, for our own part, we have no confidence in these soulless corporations, managed in secret by a mysterious junto, and shrouded altogether from the wholesome scrutiny of the publick eye. What proof have we that the banks are solvent? Is the testimony of the bank commissioners appealed to? How many days, we would then ask, was it, before the Mechanicks Bank declared itself bankrupt, that the community were solemnly assured by a bank commissioner that that institution had abundance of specie to redeem all its obligations to its bill holders and depositors? We know little of the secrets of the prison house; but we know enough to excite deep distrust of this ready exclamation of a venal press that the banks are all perfectly solvent. We know that at least two of the broken institutions have been lending large sums of money without the knowledge of the directors, and one without the knowledge of either president or directors. How many more are in the same category? And to what extent have these unauthorized loans been made? And what is the degree of solvency of those to whom the "accommodations" were extended? Who can answer these questions?
II.16.2
Again, if possibly they are solvent, which is much to be doubted, are they more so, we would ask, than those individuals who are the owners of known and substantial property, and who have not yet suspended payment, but whose promises are scrupulously fulfilled? Who believes that the notes of any of the broken banks are as good as the notes of Mr. Astor? Who would not take, if it were not for the mere facility of passing again, the promise of Mr. Astor, or Mr. Lenox, or Mr. Bronson—nay, who would not take the promise of the humblest mechanick to the extent of his visible means, in preference to the invalidated and faithless promises of those great exclusively privileged bankrupt institutions in Wall street, which now stand as memorials of the egregious folly and dishonesty of special legislation?
II.16.3
Turn a deaf ear then, reader, we entreat you, to all these fraudulent attempts to cajole you into the belief that the banks, though broken, are as good as ever. They may be as good as ever, but they never were good. They were conceived in corruption. They were the spurious offspring of fraud and folly, and their whole career has been illustrative of their parentage. Attempt not, then, to heal the wound inflicted upon their credit by their own suicidal act. Set your face firmly against any legislative resuscitation of the exanimate brood of exclusively privileged money-changers. Now is the accepted time to overthrow forever the ignoble order of rag barons. Now is the auspicious moment when, by an energetick exercise of the popular strength, we may sunder forever the fetters of the paper money feudal system. The utter fatuity of legislative guardianship of the currency is signally illustrated by the present disruption of the links of the most strongly concatenated chain ever fastened by arbitrary power on the limbs of trade; and it is the part of wisdom to see that the broken fragments are not rivetted anew.
II.16.4
Let the banks rise from their ruins, if they can, by the recuperative force of what little vitality is left in them. We would neither render them assistance, nor oppose the slightest hindrance. But let us, in the meanwhile, embrace the lesson taught by their prostration, to insist that our legislative servants should immediately emancipate trade from arbitrary restrictions. If men of capital were at liberty to act, a system of free banking would arise on the ruins of monopoly which would dispense all the good that has ever been performed by the privileged institutions, and would be liable to none of their manifold abuses. The financial facilities which the community requires, in the prosecution of trade, are themselves a branch of trade, and perfectly within the influence of its natural laws. Let us then insist upon the divorcement of legislation from banking. Let us demand commercial freedom. Let us require that politicks shall confine itself to the affairs of government, and leave trade to manage its own concerns.
On the very day when the banks of this city and Brooklyn declared themselves bankrupt, stocks rose in price some fifteen or twenty per cent. This was in the confidence of a new inflation of paper money trash. But will the community consent to this?, Will they tamely be imposed upon by a spurious, irresponsible, unredeemable paper currency, not worth so much as the ink wasted in recording the lying promises on its face? Will they witness a fresh series of fluctuating prices; new enterprises of mad speculation; and the prostrate fabrick of monopoly credit, now confessedly without a basis, again reared up to the clouds, to fall again, sooner or later, with more disastrous ruin?
The game never changes, just the players.
What to do?
There are from three to four millions of dollars in specie in circulation in this city at the present moment. That it does not circulate very freely is probable enough; for people may very naturally be supposed not particularly anxious to exchange real value for broken promises. It is nevertheless in circulation, and would circulate actively, if confidence were restored, forming an ample understratum of currency, without the help of small notes. The great object then is to restore confidence, and the question arises, How is this to be done?
II.17.2
The Journal of Commerce cannot suppose that legislative authority to bankrupt institutions to continue their business, after they have declared themselves destitute of the means of business, to continue to issue their promises, after they acknowledge they have no means of redeeming them, will restore confidence to the community. Bank notes may, it is true, and perhaps must, be taken as the medium of barter, from those who have no actual money; but it is as certain as any result which depends on figures, that prices will be appreciated, and will be constantly fluctuating, while the community has to depend on such a medium, and that there will be a wide difference between the price for money, and the price for the spurious and dishonoured representative of money.
II.17.3
We agree with the Journal of Commerce that we require legislative action; but with a difference as to the kind of action we should ask for. That paper would have the legislature tinker and patch up the leaky and battered system of banking; while we would have it remove those impediments which hinder enterprise from supplying the place of the old system, demonstrated to be so utterly inefficient, with a bran[d] new one. Remove all legal restraints from capital, and how long does the Journal of Commerce suppose it would be before we should have a voluntary banking association in this city, with fifty millions of actual capital, certified and secured in such a manner as would command the publick confidence, and going into harmonious operation with such celerity as to restore, almost as by magick, financial order out of chaos?
II.17.4
If this is so—and our convictions have not been lightly adopted—it is manifestly the duty of the press to exercise its influence to bring about such a state of things. Let the broken banks take care of their own affairs as well as they can under the conditions of their charters. We are sorry for the losses in which they involve thousands who had no share in their misdoings; but we can see no good reason why these exclusively privileged insolvents should receive aid from the legislature, more than the unprivileged insolvents who have been breaking for months past. The best thing to do, in our judgment, and that which would have the speediest, as well as the most certain efficacy, is to emancipate the trade in money wholly from legal restraint. We have tried the forcing and monopoly system; let us now try the voluntary and free trade system.
Your counterparts didn't fix it then, you are not going to fix it now, what a waste of all your lives, disgraceful. |
