The reflector. (Milledgeville, Ga.) 1817-1819, June 25, 1818, Image 1
r THE REFLECTOR. MILLEDGEVILLE, G. TCESbAY, JUNE 25, isia. .NO. 33» BANK IXO. NlLEs’ WEEKLY ULOISTER. lie instrumentality of commerce, of one nation arc supplied from the iof another, a country where la- atrrials are cheap, will always be in the manufactures of one in which hy underselling them in their et. Before 1 apply this great aiid c truth to the subject of my present will distinctly premise that I do not liter upon the question which has much discussion, as to the possibi- U. States becoming in their present a great manufacturing nation. My this paper, is to enquire into the the great paper system on a particu- f the community, and 1 wish sed- n/.aid the discussion of any other at may weaken the effect of my by exciting opposite opinions, particular relation to my present AVith this explanation, I shall pla in y undertaking. it necessay 1 trust to offer argu- [provc that (lie value of money, lias ted in the United States, in eonse- f the countless millions of paper ow in circulation, since the experi- cvery man will demonstrate this Neither is it worth while to detain i proofs that the prices of labor, an materials have greatly increased, nl- not iu an equal ratio, particularly je,r.— flic sane experience is .here al- y sufiii ient; Now, the manufacturers nited States cannot meet this rise in nd raw materials, hy a correspond* for their manufactures, because le market is open to foreign nations, sed with such a redundancy of paper ere of course every thing is cheap cy, will immediately come into our and undersell them. Poor nations ays undersell rich ones ; and this is the great—1 speak seriously,sir,— To disprove the first it is only necessary sanction, or duties that the peoplo will not pay, can possibly* save them from ruin.— to repeat, that the domestic manufacturers of goods, cannot keep pace with the high pvico of labor and raw materials, because TAPER SYSTEM—NO. lA r . the poorer nations will undersell them, Con- l the present stale of the world, scquently, as they cannot sell their goods without loss, the more goods they manufac ture, the greater will be their loss ; and thus the means ol'extending their business afford ed by the great plenty of rags, and the facili ty of procuring them from the hanks, only precipitates their ruin. But there is yet another point in which, this subject is io be viewed. Nobody that I have ever heard of, has ventured to broach the absurdity, that the depreciation of.money actually increases either the value of labor, or of real property. The only advantage then resulting from the great plenty of de preciated money, must be the facility in pro curing, hy means of this plenty, au additi onal capital, which is done by borrowing of the batiks, or brokers, now the only lenders. I will therefore proceed to shew, how the decrease in the value of money operates en tirely to the disadvantage of the borrower. It would seem indeed, and it is thus argued by the defenders,—for it has no advocates— of the paper eystem—that if the borrower pays the interest ami principal of his loan, in the same depreciated medium, lie sus tains no loss hy its depreciation, 'Eli reasoning is utterly unfounded, as 1 will pro ceed to demonstrate. The use of money is always more profitable to the borrower, than the lender—that is to say, the former can so apply it, as to make it produce a greater interest than he pays —else there would be no advantage in borrowing, and the argu ment I am combatting would fall to tlicgro im'. of itself. The borrower is enabled to d- tliis, either by the profits of liis own labor, or the labor of those he employs. This i- what is called productive labor—the only re al source of national w r;lth. It is here the paper system piiirh s. It is in the sensible diminution of tin value of this urochu vi- labor, that the |, various ©p.*t;• • *•-.»» mi, deprec iation in ti.ie value of m. n e, io ai./" he many great blessings of nationalVi!.’ u ' ,r! . u :l . ' in\ os«. . There are hut two wavs to protect 1,1W * ls l* Such sir, are the inevitable effects of the high prices of labor and materials, produced by the enormous emission of paper money, an the manufacturers of the United States. If it be asked why the same causes do not produce the same effects in Great Britain, 1 answer, the cases are not parallel, because labor in hat country heurs no proportion to the increased price of every thing else, and hence it is that the great manufacturers still maintain a precarious existence, while the laboring classes are in a state of abject dis tress. Did the price of labor in England correspond with the high price of every thing else in that country by the operation of the paper system, there is not a nation in Europe that would not undersell the British manufactures in every market. It is the dis tresses of the laboring classes in England, tnat enables her with her paper system, still to undersell the world. pi manufactures in such a rase : the to put down the paper system and cstorc the old value of money ;— ier, high duties and pi'olitfbrtions ig9 goods to prevent their iutroduc- prohibiting, or duties greatly en- g the price of foreign inanutiu tores, deed force the people to buy-domestic and they will also enable the iiiaiiu- •s at home to hold them at a price Hiding with time of labor, and raw Is. But these prohibitions are marii- njust. to every other class of the com for there exists no social tie hindini "y of men hy their necessities, to sc of another at a great price, what, s were left to their natural course,! uld procure on much more reasonable Men arc not called upon to make orifices to each other, by any ubliga- the social compact, which never de- of all the other classes of the eotninu- become tributary to one. It is at tahlishing a privileged order, incom- witli the spirit of all our institutions, “ii if this were hot the case, it is not pected that the representatives of •rent, classes of people in the United will ever be induced to levy so great lit their constituents, until a majority ir constituents shall be manufacturers, esc general premises are true, it ro- at the only practicable remedy for the ,:esso loudly complained of hy the clurers, is to put down by the aper system, by the free and sove- ill of the people—by w hose sufferance ’ exists, and on whose senseless crcdu- lotic is sustained. This will at once the capital of the country from a no- o a real standard—consigning it to it was wont to do, through regular s from which it is now diverted—and areal value to real money,that will at ■ down the nominal price of labor every thing esscnlial in manufar- And here it becomes necessary to ex- two great fallacies of the paper tlie pillars on which it rests. The that the, depreciation of money ope- a circle—that is to say, that the cor ing plenty, makes amends to all fertile diminution in its value ; mid ,that the facility of procuring a false by bank discounts, makes ample a- or the diminution of value of the real shall proceed to demonstrate that se propositions arc eminently false pect to the manufacturers ; and in a ittcr, I trust, I shall equally prove tacious in their application to every ass of the community, except that ways prospers, in the decay of a na- e honorable band of brokers and ora. of the subject, and as general. reasonings, on intricate subjects are apt to be rat hi r in distinct, I will endeavor to make my meuir- ing plain, by a plain example.* lam ntfitf- i-ms to shew the. people of .this abused, swin died nation, what this boasted advantage is which is thus supposed to overbalance the evils of a ragged depreciated currency— worthless in proportion to. its plenty—and hearing no specific equal value at any two places, for the present enjoyment of having tlr ir honest gains diminished by the plenty which surrounds them, arid for the consoling prospect of a relief from these evils hy bankruptcy ten times more extensive in its consequences, than the downfall of continen tal money ;—for the oppressions of an up start unprincipled aristocracy that grinds then to dust ; and far the facilities afforded a useless, nay pernicious hand of broker and speculators, the despicable progeny of a despicable system, in picking their pockets. Suppose I borrow a hundred dollars, for which I pay seven per cent, per annum—yon perceive 1 don't mean to borrow of a broker ! I ain enabled by my productive labor to em ploy this money, so as to make it produce me fourteen per cent. The surplus seven per cent, is my clear gain ;—it is from the sweat of my brow, the labor of my hands—and on such gains I live. But if this value of my productive labor, is depreciated one half, insteadof seven per cent, I virtually gain bid three end a half, and the difference is, that instead ol‘being enabled to live, comfort ably, I starve. But this is not all—there is something yet to come. Not only the worth of my labor,-but the worth of my borrowed hundred dollars is diminished one half, by this depreciation in the value of money. I cannot buy half the raw materials with it, that 1 could twenty years ago, and conse quently my business suffers, first by the de predation of my profit, and secondly—by tiie depreciation of the means by which I ex tended my business. But here again comes in the circular system of reasoning to which I have before alluded. I must so proportion my profits as to make up this deficiency.— But 1 have already dearly shewed that the manufacturer cannot do this without being undersold hy foreign dealers, and the same will apply to every class of mechanics and laborers, who are dependant on the rich for employment. I have endeavored to make tins matter plain—and I hope I have sue cccdeil, for it is here, that the round-abokt reasoning which goes to prove that the great plenty of money operates alike on the lender and the borrower, is arrested in its circle, by an obstacle that no reasoning has ever yet been able to surmount. In vain therefore will the manufacturing interest expect to flourish while this paper system flourishes. Nothing b.ut its downfall, or a prohibition of foreign importations which congress cannot But the evils inherent in thc^reat paper system, are heightened, ns is generally tin case with every bad system, by those abu ses, that will ever be the. consequence of placing a.power in tuc hands of men, to the abuse of which they are tempted by the ir resistible Io\c i f gr n —anil for the abuse ol won i they are not responsible to any human tribunal. This brings me to a consideration oi the general unprincipled system of con duct pursued by a great portion of the banks towards every other class of the community. 1 call it unprincipled—for 1 know not what other name to apply to a system, which acts under the uniform influence of a total disre gard to the interests and the happiness of •< (tiers, and which could not he tolerated in any country, where legislative purity, or le gislative wisdom, was not exactly-in an in verse ratio with the quantity of paper rags f assert, sir, and I will establish it by refer ui& io ttie records of our courts, for thou sands of proofs of the fact, in the number *t suits brought at every term by banks a- -ins! real capitalists—1 assert that the gram bject of tlie banks, since they stopt pay- -n ut, and persisted in evading their promises, even when they pretended to assume the pay ment of specie—has been the substitution of real property in the place of their rags.— Their whole policy has been to give a basis of reality to that which hud none before.— This suspension -let us give it a plainEnglish name—Inis total and final suspension of sp ciu pay incuts, was the signal for the creation of litters of banks in every part of the mid dle and western states, under the auspices of various combinations of needy speculators, without capital or principle, who being at once by this great blow at the national pros perity, freed from the necessity of paying their debts, and gifted with the privilege of coining their own money, had no limits to their cupidity. Their resources were the credulity of the people, and their joint funds the great stock of national folly. But they felt even in the midst of their prosperous career, that credulity is not everlasting, and that nations sometimes suddenly recover their wits. It became necessary therefore in order to perpetuate the blessings of this happy- age of paper, to take advantage of this folly and credulity while they lasted, so effectually as to render a return of the peo ple to their senses unavailing. It was a simple method they pursued, for they had simpletons to deal with. They got rid of as many of their rags as possible, ei tlier by lending them out, and taking the se curity of real property ; or hy employing fellows to go hawking and periling them the country- round, for which they received commission at so much per cent. It may he objected, that this ingenious method of pay ing a premium on passing away one’s own money, would inevitably produce the ruin of the lender in the end. And so it would but for one thing. It ought, to he understood that one of the first acts of these contcrnpti hie little paper banks, is to enter into a kind of partnership with one or- two, or three ci ther little contemptible institutions, in dif ferent places, for the neighborly exchange of each others’ notes, and for the purpose of negotiating the support of each others' credit! AVe shall see now what advantages this produces. In process of time the notes thus palmed upon the people by the banks,their tra velling agents—come horiie^fEfn for pay ment—and if paid at all-p^PR-is in any real value—the poor bank.w'oiffj he in danger of bankruptcy ! But they are not paid—ckcept by other rags equally depreciated, which the other banks of tins righteous partnership kindly furnish each other to pay their debts. The honest dupe hereupon goes to the bank whose notes had been given him to pay the notes of the other bank—and here lie is offer ed the notes of the very bank lie had just come from. Thus the creditor is bandied about from one to the other until he submits in des pair to the imposition, and goes and does as well as lie can with rags. If lie should pro secute the bank for the amount of the debt, a clamor is raised against him, sufficient to deter the stoutest heart;—he is persecuted by the whole clan of paper manufacturers ; he suffers all the keen effects of awakening the enmity of a body of men as powerful as unprincipled in their hostility; and if he persevere in his demand of justice, his claims are tried by a jury, one half of whom per haps arc at the mercy of tlie banks, and de villed according to laws propounded by a ma gistrate who is himself, a bank director, or if not, whoso interests or the interests of some of his friends are dependant on the good will and pleasure of the members of the great paper aristocracy. Is not this a plain statement, which every body knows is true— of tlie combinations of banks to cheat the people—to frighten them from resorting to the law—and to render that resort ineffectu- tl, sufficient to excite alarm, in every re flecting mind ? Does it not strike directly t thu security of property ; the freedom of seekingjustice ; the possibility of obtaining in short at every thing dear, and csscn- lal to human happiness ? Individuals dare not prosecute the very banks that arc every day prosecuting without remorse these very udividuals. When we consider in addition to all this, that the banks, by beingthus virtu- Ily exempted from paying their debts, are tiius left at free liberty to create out of others the means of buying and selling, human con sciences—of tempting and punishing; ofex- ending their influence ever legislative and .tdicial bodies ; of drawing the people frhm pposing or chastising their faithlessness j of preventing their attaining justice ;—when consider all this, sir—is it not certain— ibsolutely certain, that if the paper system is not immediately circumscribed in its means if acquiring influence—the whole property if the country—and the sum total of the .gilts of the people will be at its mercy ? As the nation is now situated, the honest part of it, which alone is worthy of protec tion and sympathy, is unconditionally at the mercy of the. paper aristocracy. I say unconditionally, because when a privileged body of men are permitted to carry on their affairs in secret—to art on motives which they dare not own, and cannot justify—to claim the privilege of guilt in not telling any thing that may condemn—to put the law in force, a- gainst others, anil to evade it themselves— to issue rhgs, without the necessity of re deeming them, ex'ept by other rugs—while nil this continues, who shall dare to say that the honest part of the community is not laid unconditionally at the feet of an order if au thorised swindlers, who began with nothing hut are gradually swallowing up the proper ty of the farmer and manufacturer and tlie gains of honest labor ? There is some little consolation in the midst of slavery in knowing that our mas ters are good and worthy men, vo whom the power is not the warrant for its abuse, and w hose estimation in society is a guarantee for justice and moderation in the exercise of their preogativc. But, alas ! such consola tion is not our’s !—we are unhappily subject ed to a different—far different dynasty. Men who feel a consciousness that money is the only thing that can, hy any possibility, elevate them to an association with respecta ble human beings, and whom nature has de barred from the exercise of any other means of acquiring influence, but money, will n it, I fear,—away with such mincing terms—will not, and arc not—and cannot be scrupulous ae to the attainment of this only means of giv ing themselves importance. Nay, experi ence justifies the conclusion, that they will, in time, come to consider every method of obtaining money, that does not subject them to the penalty of the laws, as justifiable. From this state in which the mind acquiesces in a welcome delusion, there is but one stop to the most possible corruption of the heart, when it l'ecls a pride in dexterously employ ing bad means to the attainment of bad ends. It is in this deplorable state of moral perversion, that the highw-ayman will tri umph in the intrepidity of his murders—the thief in tlie superior dexterity of his nightly depredations—and that the brokers, specu lators and trash which constitutes the paper aristocracy, will, like the hardened prosti tute, boast of the number of their victims. From an aristocracy, thus mainly consti tuted, whose wealth is obtained by tlie sa crifice of the wholesome morals, the whole some prosperity, and the precious freedom of the nation, I wuuld wish to warn, and do most solemnly w arn, the people of these Uni ted States. To guard that gallant, and yet virtuous people, from the effects of a system that debases the human mind, and destroys that strong feeling of personal independence, which is the safeguard of their rights, the basis of their freedom, I have taken up my pen. I have employed the term aristocracy, which is often used in our country with -ut being understood, in its general signification. AVe are authorised to apply it exclusively to the lendal barons of old, and their succes sors the titled nobility, of the present day.