5. Political Economy


Brownson’s Views


1893, Benziger Brothers


V. Political Economy


The Modern Industrial System


The distinguishing feature of modern civilization, if we take what is positive in it, is the application of the discoveries of science to the mechanic and productive arts. …

Since railroads, steamboats, and the various applications of science to the invention and construction of labor-saving machinery have been introduced and the modern world is adjusted to them, we could not well do without them and it would be a calamity to be deprived of them; but there are grave thinkers who greatly doubt if real civilization has been advanced by them or if the world gets on any better with than it did without them. They have completely changed the face of the industrial world, to some extent the mutual relations of capital and labor, and vastly increased the power of production; but that they have made it easier for a poor man to earn his living or added anything to the real happiness or well-being of the people is not so certain. Under the new system the rich as a class grow richer and the poor as a class grow poorer. The small home industries of the olden time give way to large industries, in which capital, as necessary to introduce machinery, counts for more and labor for less. Wages may be nominally higher, but are less in proportion to the wants of the laborer. (Vol. 13, pp. 16, 17.)


The Essence of Political Economy


The political economists consider man only as a producing, distributing, and consuming machine, and seek only to get the greatest possible supply with the greatest possible demand. …I look upon man as having a sentient, intellectual, and moral nature, and I seek for him the greatest possible sum of virtue and happiness. It is not likely, then, that the political economist and I should think alike. It adds not to the well-being of the poor that the aggregate wealth of a nations increases if they are all the time growing poorer and find it every day more difficult to supply their wants or to obtain by honest industry their bread. Under the new system it may be that wealth increases, but the tendency in the great industrial nations is to concentrate it in fewer hands or in huge overgrown corporations, which in your country are stronger than the government and control, not always the elections, but the legislative assemblies, both state and national.…

To make a man happy we should study not to increase his stores, but to diminish his desires. The political economists study to increase a man’s desires and to develop new wants in him in order to increase as much as possible consumption, which, in turn, will increase the demand, and the increased demand will stimulate increased production. The demand creates the supply and the supply stimulates consumption, which, in turn, creates an increased demand. This, if I understand it, is the essence of your modern science of political economy. But what is the gain to the laborer?…

The more wants that one has that one is unable to satisfy, the more one suffers. A man’s happiness does not consist in the number of wants satisfied, but in having no wants unsatisfied. It may well be conceded that if the laboring classes were thrown back into the condition in which they were in the middle ages, or even in the sixteenth century, they would far more wretched than they are now; but that is not the question. Were their means of satisfaction less in proportion to their actual wants then than they are now in proportion to their present actual wants? No doubt more wants may now be satisfied, but that is nothing if there is a proportionate increase of wants that are not and cannot be satisfied. (Vol. 13, pp. 17, 18.)


Supply Outruns Demand


This is an age of forgetfulness. You seem to forget that no longer ago than 1848 nearly all European society was convulsed by the loud demand for what was then called the "right to labor," the right to gain one’s bread by the sweat of one’s face. Thousands, millions even, of men in the great industrial and commercial nations, able and willing to work, were standing idle, gaunt and grim, because there was no work to be had. The labor market was overstocked; supply had outrun the demand. The demand for labor depends on the state of the markets throughout the world, and a surplus of labor is the normal state in all your great industrial and commercial centers. Were the whole productive force at the command of industry employed to its full extent, more could be produced in any one year than could be disposed of to the actual consumer in any four years, as I am told by those who profess to know, and consequently the operatives are either thrown out of employment or compelled to work on short time for what is equivalent to three out of every four years. Hence the frequency of distress in manufacturing districts, which finds relief only in public or private charity. Various expedients are suggested by political economists and tried by governments, but as yet with indifferent success. A favorite measure with one class is what is called protection, or a tax imposed on the importation of foreign products for the protection and encouragement of our own. But this does not help the operative class, for its only effect is to increase the profits of the capital employed in the industries protected, and these enhanced profits must be paid by labor or, at best, by labor and land. (Vol. 13, p. 18.)


Free Trade and Protection


I do not know whether the free traders or the protectionists are the wiser; I only know that neither can remedy the evil. Free trade simply gives the advantage to those nations that have already got the start of the others in the production of exchangeable commodities. Its maxim is to buy where you can buy cheapest and to sell where you can sell dearest, and its interest is therefore to enhance as much as possible the profits of capital by diminishing the cost of labor, and therefore the value to the laborer of his labor, the only commodity he has to dispose of. The only difference I can see between the two systems is that the protective system taxes the land and labor of the nation that adopts it, and the free trade system taxes the land and labor of all trading nations for the benefit of capital, especially of the capital of the nation that has already the start of the others. Free trade is, undoubtedly, the interest of British capital, for Great Britain is the greatest manufacturing and commercial nation in the world; and perhaps for the United States, so largely engaged in the production of agricultural staples and raw materials. Free trade between Great Britain and France, Spain, Germany, Italy, would operate to the advantage of British capital. Besides, trade itself creates a competition for the markets of the world which originates nearly all the wars of modern times and necessitates those large standing armies of European states which are such a heavy burden on land and labor. (Vol. 13, p. 19.)


Commerce does not Civilize


That the great commercial nations have been and are civilized nations, and that they have extended the area of civilization by establishing colonies of emigrants from their own bosom, is undoubtedly true; but the point is, has commerce ever civilized a nation it found on opening trade with it uncivilized? I recollect no instance of the kind. As far as my historical reading goes, the only force that has ever civilized a savage, barbarous, or semi-barbarous tribe or people is religion. Commerce brings civilized and uncivilized nations in contact, no doubt, but as a rule the uncivilized are broken, as the earthen pot that comes in contact with the iron pot. What has the commerce of Great Britain done for India, where civilization was once far superior to what it is now? Great Britain and perhaps other Christian nations have gained by it, but India herself has lost her autonomy and been impoverished by it. The people of India are poorer today, find it harder to live, than when the English East-India Company was formed. England, to obtain a market for her own wares, broke up the native manufacturers and reduced the poor people to abject dependence. The same process has begun with China and Japan, though it may not be so successful there as it has been in India, where the natives have thus far deteriorated and in no sense advanced in civilization. Commerce has only one principle – "to buy cheap and sell dear;" it does not concern itself with civilization. (Vol. 13, pp. 19, 20.)


We Cannot Go Back


I propose no going back to former industrial arrangements. True, I do not believe all is gold that glitters, nor that the people are really any better off under the new system than they were before it was adopted; but since it is adopted and habits and modes of action are conformed and adjusted to it, we could not dispense with it without causing a far greater evil than was caused by its introduction and adoption. The church can use your railroads and steamboats for her missionaries, and your lightning telegraphs for rapid communication between her head and members. If it was no advantage to make the change, it still would be a great disadvantage to be forced to return to the past. (Vol. 13, pp. 20, 21.)

The world, with its present passions and interests, knows not how to dispense with the modern industrial and mercantile system, ruinous to the real virtue and happiness of the people as it may be. It is the reigning order, and even they who dislike it cannot live without it and are obliged to conform to it. The world, which does not and cannot appreciate the superiority of the spiritual to the temporal, nor take any very broad and comprehensive views even of the temporal, cannot spare Great Britain or suffer her to be eclipsed. Her downfall would carry with it the downfall of the whole credit and funding system, that ingenious device for taxing prosperity for the benefit of the present generation. Stock-gambling would fall, the whole system of fictitious wealth would disappear, and the greater part of modern shams and illusions. The downfall of Great Britain would produce a universal convulsion and produce effects of hardly less magnitude than the downfall of ancient Rome. The emancipated nations would not know how to use their newly-recovered liberties. The keystone would be struck from the arch of the modern world. The crash some day must come, but no nation is ready for it, and the nations most hostile to Great Britain will rather labor to sustain her in order to prevent the catastrophe than to hasten her downfall. Trade as yet is sovereign, and as commerce is likely for some time to come to be substituted for religion and the trader for the Christian missionary, it would be exceedingly imprudent to hazard a prediction that the power of England has culminated. The devil will not steadily let go the grip he has through the system we condemn on the modern world. Greta Britain represents the city of the world as Rome represents the city of God, and as the complete triumph of the city of God will not take place before the last day, we can hardly believe that Great Britain will experience any serious reverses, and we shall not be surprised to find even her enemies uniting to guarantee her a new lease of power. (Vol. 16, 545, 546.)


The Wealth of Great Britain


Nowhere did I find the extremes of wealth and poverty so striking as in Great Britain. The wealth of her nobility was often great, but that was in most cases due to the enhanced value of their landed estates and led to no painful reflections. But the huge wealth of her merchant princes, her cotton or industrial lords, her bankers and money-changers, contrasted sadly with the mighty mass of pauperism, every day increasing and supported by rates levied on householders, themselves often but a shade above the pauper. I could not but think by what a terrible tax on the laboring classes their enormous wealth must have been accumulated. Their wealth has been gained at the expense not only of the laboring class of their own country, but at the expense of the laboring classes of British India and of all nations against which Great Britain holds the balance of trade. It has been gained by coining the toil, the sweat, the tears, and the blood of millions; and what can I say in defense of the system that permits, encourages, nay, demands for its success, such gross outrages upon our fellow-men? (Vol. 13, p. 21.)


Our Own Danger


I see the same system adopted in my own country, whose prosperity, up to the breaking out of the late civil war, was due to three principle causes- the large tracts of fertile land, easily accessible and cheap; to southern slavery, which stimulated the production of cotton; and the mighty influx into the non-slaveholding states of foreign laborers. To these and not to our democratic institutions, nor to any wise legislation, state or national, which has from the first been about as unwise, as short-sighted, and as blundering as it well could be, do we owe our prosperity. Slavery is abolished, the public lands are remote from the great centers of population and the best and richest of them have been given away to great corporations, and the British system, before the war confined mostly to the northern states, and against which the confederate states waged their disastrous war, can now spread over the whole Union and produce, in time, more fatal results than in England, for it meets here no counterpoise in a landed aristocracy, and the government operates simply as its agent or instrument.

We declaim against feudalism under which the great vassals of the crown were more powerful than the crown itself and often reduced the central authority to a legal fiction. How much better is it with us, where the effective power is vested in huge railroads and other corporations? The government, both state and national, is only the factor of these corporations, which, though its own creations, it cannot control but must obey. (Vol. 13, p. 22.)

The great danger of modern times is this growing industrial feudalism which is springing up in all the more advanced nations of Christendom and taking the place of the old feudalism founded on conquest and territory. It is, in many respects, worse than the feudalism of the middle ages, and so far as we can see, better in none. The old feudalism was territorial, and the serf lived on and drew his support from the land he tilled, and his means of living were in proportion to the productiveness of his labor. He might, indeed, sometimes want, but only in seasons of general scarcity. This new feudalism is founded on trade, much more fluctuating than agriculture, and the operative’s means, instead of being in proportion to the productiveness of his labor, are in proportion to the demand in the market. As his products, owing to the vast increase of the productive power of all industrial nations, run always ahead of the demand, he suffers most, experiences his greatest want, when warehouses and granaries are the fullest. (Vol. 15, pp. 425, 426.)


Trade Does Not Enrich a People


But there are things of greater value to a nation than trade. No nation is really enriched by trade. Trade accumulates luxuries, but luxuries impoverish, not enrich a people. All real wealth is in land and labor, and that nation is richest in which labor can the easiest obtain from the land the means of subsistence and comfort. The land is with us vastly more burdened than it was fifty years ago, and hence it is far harder for the laborer to maintain his independence. Land and labor have to sustain with us a lavish expenditure, a luxury and extravagance that tax their energies far beyond their present capacity, since our indebtedness, our drafts on the future, must be counted by hundreds, if not by thousands of millions. All credit is a draft on the future, and the amount of a nation’s indebtedness is the excess of its expenditures over its income. The actual addition to our productive capital in any one year does not equal the indebtedness we contract during that year, and hence with all our trade and industry we rather grow poorer than richer, and the difficulty of living becomes greater. The fact of this difficulty every poor man feels, and feels notwithstanding the new lands opened to cultivation and the immense additions made every year to our wealth by the immigration of hardy, healthy, able-bodied adult laborers, men and women. The reason of this is the fact that by the modern system of trade and commerce we increase the burdens of land and labor. Let China engage in trade with the energy and enterprise displayed by Great Britain, and she would soon find herself unable to support her four hundred millions of inhabitants, and the want and wretchedness of her population would be increased a hundred-fold; for the additional burden it would impose on land and labor would be expended in luxuries, and worse than a dead loss to the nation. …The evil that weighs us down is in the immense numbers of non-producers land and labor have to support, and to a great extent in luxury and extravagance. (Vol. 16, pp. 541, 542.)


Political Economists Take too Narrow a View


We know that we do not follow Adam Smith or any of the political economists, though it is possible that we have studied him and them as much as most men have. They are right enough from their point of view and in their narrow sphere, but the system they defend, when carried into practice and made the view of national policy, is about as absurd and mischievous a system as the devil ever assisted the human mind to invent. If all the modern political economies had been strangled in their birth, it would have been a blessed thing for the human race. We know there are a few at present to agree with us, and the leading minds of the age and country, it they notice us at all, will set down what we are saying to our ignorance, our eccentricity, or our love of paradox. Be it so. That will not make what we say less true or prove the wisdom of those who regard commerce as the pioneer of Christianity, and the merchant who does his best to master or circumvent unchristianized nations for the purposes of gain as the most successful Christian missionary. But believing, as we do, the modern industrial and mercantile system the greatest curse of the times, we of course cannot regret as untoward any of those events which tend to break it up. (Vol. 16, p. 542.)

We are far from believing that the modern and industrial system inaugurated by the Treaty of Utrecht, 1713, and at the head of which is Great Britain, is a system really advantageous to the world or destined, in fact, to be a permanent system. We believe it impoverishes more than it enriches nations, while it favors their moral degradation. It multiplies luxuries to an enormous extent, as we can see by simply looking about us in our own city, but it does not render a people really wealthier or render it more easy for them to obtain a living. Expenses are increased at a greater ratio than gains. The general style of living requires an income larger than can possibly be obtained in the slow and regular way of business or industry. Hence the rage for speculation, the reliance on a lucky hit, in which few can be successful, to make a fortune. Hence the innumerable failures, bankruptcies, insolvencies, frauds, dishonest contrivances which are the disgrace of modern states and are fast destroying all confidence of man in man. We sometimes think that Great Britain, by carrying with her everywhere this demoralizing system, more than overbalances the good she does by her advocacy of the great principles of civil freedom and constitutional government. A war with her that should break up this system and force us to become less a commercial and more an agricultural people would, we have no doubt, in the long run, prove an advantage to us, both under an economical and a moral point of view. But as long as the system remains each nation must in self-defense adopt it, defend it, and draw from it all the advantage it can. Therefore, though disliking the system, we still urge our government to guard it with vigilance. (Vol. 16, pp. 485, 486.)


Commerce and Manufactures are Overdone


Commerce and manufactures have their bounds, and cannot be pushed beyond certain limits without a ruinous revulsion. The great evil of our modern society lies precisely in the fact that commerce and manufactures are pushed too far. They are overdone. They call around them a larger population than they can feed. To secure to capital its returns or to save the merchant and manufacturer from ruin, the laborers dependent on them must be thrown out or employment about a third or a fourth part of their time and left to steal, beg, or starve, and not infrequently to all three. Hence the terrible misery of the laboring classes all through Europe in modern times; and hence your red-republicans and your socialistic insurrections and revolutions which within the last year have astonished and shaken the world. Any further extension of the modern industrial system, save as it comes in the natural course of things, is madness. Commerce lives only by agriculture and manufacturers. …The application of steam to navigation and production, the invention and adoption of labor-saving machinery, during the last half-century, have caused the power of production to exceed, in the existing economical systems of society, the power of consumption; and you cannot, unless you can double the latter, extend the former without a loss which must fall somewhere, and which, wherever it falls in the first instance, must inevitably in the last fall on the laborer. In other words, the interests of labor and agriculture cannot, in the present state of the world, sustain a more extended system of commerce and manufactures than is now in operation. These have reached the highest proportion they will bear, and, if we do not misunderstand the late European revolutions, a far higher proportion than they will bear. Their continuance on their present scale must necessarily result, not in stimulating labor and developing the agricultural resources of nations, but in depressing agriculture and in reducing wages below the minimum of human subsistence, and therefore, ultimately, in their own ruin and that of the people. (Vol. 16, pp. 163, 164.)


Results of the Modern System


Going along through the streets of Boston the other day, we remarked that it has become the fashion to convert the basement floors of our churches into retail shops of various kinds of merchandise. How significant! The church is made to rest on TRADE; Christ on Mammon. Was anything ever more typical? The rents of these shops in some cases, we are told, pay the whole expense of the minister’s salary. Poor minister! If thou shouldst but take it into thy head to rebuke Mammon, as thy duty bids thee, and to point out the selfishness and iniquity of the dominant spirit of trade, thy underpinning would slide from under thee, and thou wouldst – But land is valuable; and why should it lie idle all days in the week but one because a meeting-house stands on it? Ay, sure enough. Oh, blessed thrift, great art thou, and hast learned to coin thy God and to put him out at usury! (Vol. 4, pp. 449, 450.)

We might go further in proof of the sad state to which we are coming or have already come. We are told, on tolerable authority, that in this city of Boston, which we take it is the model city of this country, there are some four thousand wretched prostitutes out of a population of about one hundred thousand. This fact is not only a lucid commentary on our morals, but also on the difficulty there is in getting a living by honest industry; since prostitution is resorted to in this and all other countries rarely through licentiousness, but chiefly, almost wholly, through poverty. We are told by the agents of the police, who have the best means of knowing, that the principal supply of these victims to poverty and men’s infamy comes from the factories in the neighboring towns!- no uninteresting comment on the workings of the factory system built up by our banks and high tariffs, and which the chiefs of our industry have taken and are taking so much pains to fasten on the country!

But whence comes these sad results? There must be somewhere a fatal vice in our social and industrial arrangements, or there would not, could not, be these evils to complain of. Never till within these last few centuries were men, able and willing to work, brought to the staving-point in times of peace and in the midst of plenty. (Vol. 4, p. 435.)

There can be no question that within the last three hundred years there has been a most wonderful increase of industrial activity, of man’s productive power, and of the aggregate wealth of the world. Great industries, so to speak, have within these three hundred years sprung up, never before conceived of; man has literally made the wind his messengers and flames of fire his ministers; all nature works for him; the mountains sink and the valleys rise before him; the land and the ocean fling out their treasures to him; and time and space are annihilated by his science and skill. All this is unquestionable. On the other hand, equally unquestionable is it to him who has looked on the matter with clear vision that in no three hundred years known to us since men began to be born and to die on this planet, upon the whole, it has fared worse, for soul or for body, with the great mass of the laboring population. Our advance, it would seem, has been that ordered by the militia captain, an "advance backwards!" This statement may or may not make sad work with our theories of progress of the race, progress of light, of political and social well-being, and all that; but it is a fact, an undeniable, a most mournful fact, which get over we cannot, try we never so hard.

For these last three hundred years we have lost or been losing our faith in God, in heaven, in love, in justice, in eternity, and been acquiring faith only in human philosophies, in mere theories concerning supply and demand, wealth of nations, self-supporting, labor-saving governments; needing no virtue, wisdom, love, sacrifice, or heroism on the part of their managers; working out for us a new Eden, converting all the earth into an Eldorado land, and enabling us all to live in Eden Regained. We have left behind us the living faith of the earlier ages; we have abandoned our old notions of heaven and hell; and have come, as Carlyle well has it, to place our heaven in success in money matters, and to find the infinite terror which men call hell only in not succeeding in making money. We have thus come – where we are. Here is a fact worth meditating. (Vol. 4, pp. 437, 438.)

Even your modern slaveholder is obliged to recognize a relation between him and his slave of a more generous and touching nature than any recognized by the master-worker between himself and his workman. The slave when old or sick must be protected, provided for, whether the owner receives any profit from him or not; the master-worker has discharged all obligation to his operative he acknowledges when he has paid him the stipulated wages. These wages may be insufficient for mere human subsistence, and the poor worker must die; but what is that to the master-worker? Has he not paid all he agreed to pay, even to the last farthing, promptly? We have not heard on our southern plantations of Stock-port cellars, of bread-and-soup societies by the charitable, and men stealing in order to be sent to the House of Correction so as not to starve. This much we can say of the slave, that if he will tend pigs in the wood he shall have some parings of the pork, and so long as his master has full barns he is not likely to starve. Would we could say as much of the hired laborer always. (Vol. 4, p. 441.)


What is the Remedy?


But, after all, what is the remedy? Let us not deceive ourselves. The whole head is sick, the whole heart is faint. Our industrial arrangements, the relations of master-workers and workers, of capital and labor, which have grown up during these last three hundred years are essentially vicious, and, as we have seen, are beginning throughout Christendom to prove themselves so. The great evil is not now in the tyranny or oppressions of governments as such; it is not in the arbitrary power of monarchies, aristocracies, or democracies; but it is in the heart of the people and the industrial order. It is simply, under the industrial head, so far as concerns our material well-being, in this fact, this mournful fact, that there is no longer any certainty of the born worker obtaining always work whereby he can provide for the ordinary wants of a human being. Nor is this altogether the fault of the master-workers. To a very great extent the immediate employer is himself in turn employed; and as all who produce produce to sell, their means of employing constantly and at reasonable wages evidently depend on the state of the market; workmen must, therefore, with every depression of trade, be thrown out of employment, whatever the benevolence of the master-workers.

Nor is it possible, with the present organization, or rather disorganization of industry, to prevent these ruinous fluctuations of trade. They may undoubtedly be exaggerated by bad legislation, as they may be mitigated by wise and just administration of government, but prevented altogether they cannot be. For this plain reason, that more can be produced in any given year with the present productive power than can be sold in any given five years – we mean sold to the actual consumer. In other words, by our vicious method of distributing the products of labor we destroy the possibility of keeping up an equilibrium between production and consumption. We create a surplus – that is, a surplus, not when we consider the wants of the people, but when we consider the state of the markets – and then must slacken our hands till the surplus is worked off. During this time, while we are working off the surplus, while the mills run short time or stop altogether, the workmen must want employment. The evil is inherent in the system. We say it is inherent in the system of wages, of cash payments, which, as at present understood, the world has for the first time made any general experiment of only now, since the Protestant reformation.

Let us not be misinterpreted. We repeat not here the folly of some men about equality and every man being in all things his own guide and master. This world is not so made. There must be in all branches of human activity, mental, social, industrial, chiefs and leaders. Rarely, if ever, does a man remain a workman at wages who could succeed in managing an industrial establishment for himself. Here is our friend Mr. Smith, an excellent hatter, kind-hearted, charitable, and succeeds well; but of the fifty hands he employs not one could take his place. Many of these journeymen of his have been in business for themselves, but failed. They are admirable workmen, but have not the capacity to direct, to manage, to carry on business. It is so the world over. There must be chiefs on religion, in politics, in industry; the few must lead, the many must follow. This is the order of nature; it is the ordinance of God; and it is worse than idle to contend against it. The great question concerns the mode of designating these chiefs and the form of the relation which shall subsist between them and the rest of the community. Our present mode of designating them in the industrial world – in the political we manage it in this country somewhat better – is obviously defective, and the relation expressed by wages in our modern sense of the term is an undeniable failure. Under it there is no security, no permanency, no true prosperity, for either worker or master-worker; both hurry on to one common ruin.

This, we are well aware, will not be believed. We do not believe ourselves ill. We mistake the hectic flush on the cheek for the hue of health. "We have heard," say our readers, "this cry of ruin ever since we could remember, and yet we have gone on prospering, increasing in wealth, refinement, art, literature, science, and doubling our population every thirty years." Yes, and we shall continue to prosper in the same way. The present stagnation of trade will not last much longer; business will soon revive, nay, is reviving; and we shall feel that the evil day is too far off to be guarded against. We shall grow richer; we shall build up yet larger industries; the hammer will ring from morning till night – till far into the night; the clack of the cotton-mill will accompany the music of every waterfall; the whole land be covered by a vast network of railroads and canals; our ships will display their canvas upon every sea and fill every port; our empire shall extend from the Atlantic to the Pacific and from the Northern Ocean to the Isthmus of Darien; we shall surpass England as much as ancient Carthage surpassed the mother Phoenicia; be the richest, the most renowned nation the world ever saw. All this it needs no prophetic eye to foresee; prosperity of this sort we may have, shall have. It is not of outward, material ruin we speak. But what will avail all this outward prosperity – our industries, our wealth, our arts, our luxuries, our boundless empire, our millions of people- if we contain in our midst a greater mass of corruption, of selfishness, of vice, of crime, of abject misery and wretchedness than the world ever saw before? And yet such will be our fate if we continue on in the path, nay, the broad road, in which we are now traveling.

But once more, we are asked, what is the remedy? Shall we go back to the middle ages? ... No, dear countrymen, no. this is no longer possible even if it were desirable. We have got firearms, heathen literature, printing, and the new world; with these it is not possible to reconstruct the middle ages. How often must we remind you that there is no going back? Who ever knew yesterday to return? From the bottom of our heart we believe these much-decried middle ages were far preferable – regarded as definitive- to our own. What we have as yet obtained by departing from them – unless we make it the stepping-stone to something more- is far beneath them. The Israelites in the wilderness, we must needs believe, were- saving the hope of reaching the promised land – worse off than in Egypt making bricks for their task-masters; but this promised land, flowing with milk and honey, lay before them, not behind them, and could be reached not by returning to Egypt, but by pressing onwards through the wilderness. …

We would have men governed, and well governed, let who will be the governors or what from adopted there may be for selecting them. God’s curse and humanity’s curse also do and will rest on the no-government schemers. Satan himself was chief anarch, and all anarchs are his children. Men need government, nay, have a right to demand government, without which there is no life for them. We would also see revived in all its medieval force and activity the Christian faith, and as the interpreter of that faith the Christian church, one and indivisible; the ground and pillar of truth; clothed with the authority which of right belongs to it; and enjoining and exercising a discipline on high and low, rich and poor, as effective as that of the middle ages, but modified to meet the new wants and relations of Christendom. There is no true living on this God’s earth for men who do not believe in God, in Christ, in the ever-present spirit of truth, justice, love; in the reality of the spiritual world; nor without the church of Christ, active and efficient, authoritative over faith and conscience, competent to instruct us in the mysteries of our destiny, to direct us wisely and surely through the creation of a heaven here on earth, to a holier and higher heaven hereafter. We must revoke the divorce unwisely and wickedly decreed between politics and religion and morality. It must not be accounted a superfluity in the politician to have a conscience; nor an impertinence to speak and act as if he believed in the eternal God and feared the retributions of the unseen world; nor inconsistent with the acknowledged duties of the minister of religion to withhold absolution from the base politician, the foul wretch, whatever his private morals, who will in public life betray his country or support an unjust policy through plea of utility or mere expediency. It must not always be in vain that a public measure is shown to be unjust in order to secure its defeat or just in order to secure its adoption. Nations must be made to feel that there is a Higher than they, and that they may lawfully do only what the Sovereign of sovereigns commands. Right must be carried into the cabinet councils of ministers, into legislative halls, into the bureaus of business, and preside at the tribunals of justice; men must be made to feel deep in their inmost being, whether in public life or in private life, that they are watched by the all-seeing Eye, and that it is better to be poor, better to beg, better to starve, than to depart in the least iota from the law of rigid justice and thrice-blessed charity. This is what we need; what we demand of our country, for all countries; and demand too in the reverend name of Him who was, and is, and is to be, and in the sacred name of humanity, whose maternal heart is wounded by the least wound received by the least significant of her children. (Vol. 4, pp. 452-456.)


True Political Economy


No good thing will God withhold from them that love him. And he gives us all good in giving us, as he does, himself. Nor does he give us only the goods of the soul. He that will lose his life in God shall find it. "Seek first the kingdom of God and his justice, and all these things"- the things which the gentiles seek after- "shall be added to you." They who lay up the most abundant treasures in heaven have the most abundant treasures on earth. The true principle of political economy, which the old French economists and Adam Smith never knew, is self-denial, is in living for God and not for the world, as a Louvain professor has amply proved with a depth of thought, a profound philosophy, and a knowledge of the laws of production, distribution, and consumption seldom equaled. "I have been young, and now am old, but never have I seen the righteous forsaken, or his seed begging bread." No people are more industrious or more bent on accumulating wealth than our own, but so little is their self-denial and so great is their extravagance that the mass of them are, notwithstanding appearances, really poor. The realized capital of the country is not sufficient to pay its debts. We have expended the surplus earnings of the country for half a century or more, and the wealth of the nation is rapidly passing into the hands of a few money-lenders and soulless mammoth corporations, already too strong to be controlled by the government, whether state or general. If it had not been for the vast quantities of cheap unoccupied land so easy of access, we should have seen a poverty and distress in this country to be found in no other. The mercantile and industrial system inaugurated by the Peace of Utrecht in 1713, and which is regarded as the crowning glory of the modern world, has added nothing to the real wealth of nations. (Vol. 3, pp. 345, 346.)


Duty of Capitalists


Of industrial reforms properly so called we speak not. Owenisms, Saint-Simonisms, Fourierisms, Communisms, and isms enough in all conscience are rife, indicating at least that men are beginning to feel that the present industrial relations are becoming quite unbearable. Three years ago we brought forward our "Morrison Pill," but the public made up wry faces and absolutely refused to take it; so much the worse for them. We cannot afford to throw away our medicines, even if they are quack medicines. We cease attempting to prescribe. We leave this matter to the natural chiefs of industry, that is, to bank presidents, cashiers, and directors; to the presidents and directors of insurance offices, of railroads and other corporations; heavy manufactures and leading merchants; the master-workers, in Carlyle’s terminology, the Plugsons of Undershot. Messrs. Plugsons of Undershot, you are a numerous and a powerful body. You are the chiefs of industry, and in some sort hold our lives in your pockets. You are a respectable body. We see you occupying the chief seats in the synagogues, consulted by secretaries of the treasury, constituting boards of trade, conventions of manufacturers, forming home leagues, presiding over lyceums, making speeches at meetings for the relief of the poor and other charitable purposes. You are great; you are respectable; and you have a benevolent regard for all poor laborers. Suffer us, alas! A poor laborer enough, to do you homage and render you the tribute of our gratitude. Think not that we mean to reproach you with the present state of industry and the workingmen. We have no reproaches to bring. But ye are able to place our industry on its right basis, and we call upon you to do it; nay, we tell you that not only we, but a Higher than any of us, will hold you responsible for the future condition of the industrial classes. If you govern industry only with a view to your own profit, to the profit of master-workers, we tell you that the little that you contribute to build workhouses and to furnish bread and soup will not be held as a final discharge. If God has given you capacities to lead, it has been that you might be a blessing to those who want that capacity. As he will hold the clergy responsible for the religious faith of the people, as he will hold the political chiefs responsible for the wise ordinance and administration of government, so, respected Masters, will he hold you responsible for the wise organization of industry and the just distribution of its fruits. Here we dare speak, for here we are the interpreter of the law of God. Every pang the poor mother feels over her staving boy is recorded in heaven against you and goes to swell the account you are running up there, and which you, with all your financiering, may be unable to discharge. Do not believe that no books are kept but your own, nor that your method of book-keeping by double entry is the highest method, the most perfect. Look to it, then. What does it profit, though a man gain the whole world and lose his own soul? Ay, respected Masters, as little as ye think of the matter, ye have souls, and souls that can be lost, too, if not lost already. In God’s name, in humanity’s name, nay, in the name of your own souls, which will not relish the fire that is never quenched nor feel at ease under the gnawings of the worm that never dies, let us entreat you to lose no time in rearranging industry and preventing the recurrence of these evils, which with no malice we have roughly sketched for you to look upon. The matter, friends, is pressing, and delay may prove fatal. Remember, there is a God in heaven who may say to you, "Go to now, ye rich men, weep and howl for your miseries that shall come upon you; your riches are corrupted, and your garments are moth-eaten, your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as if it were fire. You have stored up to yourselves wrath against the last days. Behold the hire of the laborers who have reaped your fields of which you have defrauded them, crieth out; and the cry of them hath entered onto the ears of the Lord of Sabaoth." This is not our denunciation; it is not the denunciation of the agrarian seeking to arm the poor against the rich; but it is God himself speaking to you now in warning, what he will hereafter, unless you are wise, speak to you in retribution. (Vol. 4, pp. 458-460.)


Pretended Remedies


Discoveries like the one Fourier professes to have made are not in the order of human experience. There is nothing to be found in the experience of the race analogous to them. Discoveries which reverse what the race had hitherto regarded as the settled order have never yet, so far as history goes, been made in any department of life – in religion, in morals, in politics, or in social and industrial arrangements. Every man who has come forward with any such pretended discovery has failed to gain a verdict in his favor, and in the judgment of mankind has been finally condemned either as deceiving or as deceived, or both at once. M. Charles Fourier, a man, if you will, of an extraordinary intellect and of philanthropic aims- although, we confess, we find in his writings only wild extravagance and a pride, an egotism, which amount very nearly, if not quite, to insanity- professes, not, indeed, to have invented, but to have discovered the law of a new social and industrial world. This law he professes to have drawn out and scientifically established in all its ramifications, and he and his followers propose to reorganize society and industry according to its provisions. Similar pretensions have often been made, now in one department of life, now in another; but has one of them ever succeeded? Is there one of them that has not been finally adjudged, at best, to be only visionary? Is there on record a single instance of a fundamental reorganization of society, industry, or even of government, that has ever been effected? Have not all who have labored for such reorganization been opposed by their age and nation? And can the associationists name an instance in which posterity has reversed the judgment of contemporaries? They cannot do it. We are aware of the instances they will cite, but not one of them is to the purpose. Why, then, suppose the whole order of human experience is reversed or departed from in the case of M. Charles Fourier? The fact is, fundamental changes in the religious, moral, social, political, or industrial order of mankind- changes which throw off the old order and establish a new order in their place- never have been, and, it requires no great depth of philosophy to be able to say, never can be, effected, unless by the intervention of a supernatural cause. When attempted they may go so far as to break up the old order, never so far as to introduce and establish a new order. Man can be a destroyer; he can never be a CREATOR. (Vol. 10, pp. 40, 41.)


Is Poverty an Evil?


Moreover, is it certain that poverty, in itself considered, is evil or opposed to our destiny? Where is the proof? Wealth and poverty are both relative terms, unless the term poverty be restricted to those who have not even so much as their will which is their own, and then we should be obliged to predicate wealth of all who possess something, however little. But the associationists do not restrict the sense of the word, for they include in the number of the poor people who have something of their own, at least their will and bodily activity. What, then, is the real distinction between wealth and poverty? Where draw the line so that the rich shall all be on the one side and all the poor on the other? John Jacob Astor is said, when told of a man who had just retired from business with half a million, to have remarked that he had no doubt but the poor man might be just as happy if he were rich! To John Jacob Astor the man worth half a million was a poor man; to most men he would be a rich man. One man counts himself poor in the possession of thousands; another feels himself rich if he have a coarse serge robe, a crust of bread, and water from the spring. Which of the two is the rich, which the poor man? If the Italian lazzaroni, the scandal of thrifty Englishmen and Yankees, have what contents them, or are contented with what suffices for the present moment, unsolicitous for the next, wherein are they poorer than our "merchant princes," who have a multitude of wants they cannot satisfy? And wherein would you enrich them, by increasing their possessions, if you increased their wants in the same ratio?

But pass over this difficulty. Suppose you have some invariable standard by which to determine who are poor and who are the rich: whence does it follow that poverty is in itself an evil? Many emperors, kings, princes, nobles, and innumerable saints have voluntarily abandoned wealth and chosen poverty, even made a solemn vow never to have anything to call their own. Is it certain that these have acted a foolish part, abandoned good and inflicted evil on themselves? If not, how can you say poverty is in itself an evil? Do you say poverty breeds discontent and leads to vice and crime? Is that true? Does it do so in all men who are poor? Did it do so in St. Anthony, St. Francis of Assisi, St. John of God, St. Thomas of Villanova, St. Philip Neri, and thousands of others we could mention who observed evangelical poverty to the letter? Are all the poor discontented, vicious, and criminal? No man dares say it. Then what you allege is not a necessary result of poverty and must have its efficient cause elsewhere, in the person or in some circumstance not dependent on wealth or poverty. In the world’s history poverty, vice, and misery are far from being inseparable companions; and so are wealth, virtue, and happiness. Was wealth a good to the rich man mentioned in the Gospel? Was poverty an evil to the poor man that lay at his gate full of sores, begging to be fed with the crumbs that fell from his table?

We might go through the whole list of physical evils drawn up by the associationists, and ask in relation to each, so far as it is physical, the same or similar questions. Whence, then, the certainty that what they propose to remove as evil is evil? Whence, then, the proof that the end they propose is a good end? Suppose- and the case is supposable- that what are called physical evils are dispensed by a merciful Providence, designed to be invaluable blessings, and are such to all who receive and bear them with the proper dispositions: could we then pronounce them evils? Would it not follow that in themselves they may be indifferent, and that the good or the evil results from the disposition with which they are received and borne? Now, this may be the fact. If it is, then the good or the evil depends on ourselves, and we may make them either blessings or curses, as we choose. Then to remove evil would not necessarily be to remove them, but to cure that moral state which makes a bad instead of a good use of them.

It is easy to declaim, but it is important that we declaim wisely; and to be able to declaim wisely we must know what to declaim against. It is easy to harrow up the feelings by eloquent descriptions of physical sufferings, and no doubt physical sufferings are often an evil of no small magnitude; but that is nothing to the purpose. Is the evil in the physical suffering itself or in the moral state of him who causes or suffers it? Suppose we transport ourselves to the early ages of our era and take our stand in proud, haughty, imperial, and pagan Rome; suppose we assist at the trial, tortures, and martyrdom of the persecuted Christians, behold them casts to the wild beasts in the amphitheatre, see them broiling slowly on gridirons, their flesh torn off with pinchers, or their living bodies stuck full of splinters besmeared with pitch, lighted, and ranged along the streets of the city by night as so many lamps. Here is physical pain. Ingenuity, aided by diabolical malice, has done its best to refine upon torture, to produce the greatest amount possible of physical suffering. Yet what is it that excites our horror? This pain beyond conception of the Christian martyrs? Not at all. We glory in it; we bless God for it; and so do the sufferers themselves. They choose it, voluntarily submit to it, and joy in the midst of it, and would not have it less for all the world. There is no joy on earth so sweet, so great, so ecstatic as that of the martyr. The horror we feel is not at the physical suffering, but at the malice which inflicts it- not at the fact that the martyrs are enabled heroically to win their crowns, but at the refined cruelty which delights to torture them. It is very possible, then, to conceive the most exquisite physical sufferings, the most excruciating tortures, and the most cruel death as even a great and invaluable good to those who suffer them. Their presence, then, is not necessarily an evil to the sufferer, and consequently exemption from them not necessarily a good. For the same reason it does not necessarily follow that the wealth, and luxury, and other thing you propose are necessarily in themselves at all desirable. You must go further, and before attempting to decide what is good or what is evil, tell us WHAT IS THE DESTINY OF MAN; for it is only in relation to his destiny that we can pronounce this or that good or evil. "Am I not a happy man?" said Croesus to Solon after showing him his treasures. "Whether a man is happy or not," replied the Athenian sage, "is not to be known before his death." (Vol. 10, pp. 43, 44.)


Philanthropy and Charity


Nay, philanthropy itself is a sort of selfishness. It is a sentiment, not a principle. Its real motive is not another’s good, but its own satisfaction according to its nature. It seeks the good of others, because the good of others is the means of its satisfaction, and is really selfish in its principle as any other of our sentiments; for there is a broad distinction between the sentiment of philanthropy and the duty of doing good to others- between seeking the good of others form sentiment and seeking it in obedience to a law which binds the conscience. The measure of the capacity of philanthropy as a sentiment is the amount of satisfaction it can bring to the possessor. So long as, upon the whole, he finds it more delightful to play the philanthropist than the miser for instance, he will do it, but no longer. Hence philanthropy must always decrease just in proportion to the increase of the repugnances it must encounter, and fail us just at the moment when it is most needed, and always in proportion as it is needed. It follows the law so observable in all human society, and helps most when and where its help is least needed. Here is the condemnation of every scheme, however plausible it may look, that in any degree depends on philanthropy for its success.

The principle the associationists want for their success is not philanthropy- the love of man for man’s sake- but divine charity, not to be had and preserved out of the Catholic Church. Charity is, in relation to its subject, a supernaturally infused virtue; in relation to its object, the supreme and exclusive love of God for his own sake and man for the sake of God. He who has it is proof against all trials; for his love does not depend on man, who so often proves himself totally unamiable and unworthy, but on God, who is always and everywhere infinitely amiable and deserving of all love. He visits the sick, the prisoner, the poor, for it is God whom he visits; he clasps with tenderness the leprous to his bosom and kisses his sores, for it is God he embraces and whose dear wounds he kisses. The most painful and disgusting offices are sweet and easy, because he performs them for God, who is love and whose love enflames his heart. Whenever this is a service to be rendered to one of God’s little ones he runs with eagerness to do it, for it is a service to be rendered to God himself. "Charity never faileth." It is proof against all natural repugnances; it overcomes earth and hell and brings God down to tabernacle with men. Dear to it is this poor beggar, for it sees in him only our lord who had "nowhere to lay his head;" dear are the sorrowing and the afflicted, for it sees in them Him who was a "man of sorrows and acquainted with infirmity;" dear are these poor outcasts, for in them it beholds Him who was "scorned and rejected of men;" dear are the wronged, the oppressed, the down-trodden, for in them it beholds the Innocent One nailed to the cross and dying to atone for human wickedness. And it joys to succor them all, for in so doing it makes reparation to God for the poverty, sufferings, wrongs, contempt, and ignominious death which he endured for our sakes; or it is his poverty it relieves in relieving the poor, his hunger it feeds in feeding the hungry, his nakedness is clothes in throwing its robe over the naked, his afflictions it consoles in consoling the sorrowful, his wounds into which it pours oil and wine and which it binds up. "Inasmuch as you did it unto the least of these my brethren, you did it unto me." All is done to and for God, whom it loves more than men, more than life, and more than heaven itself, if to love him and heaven were not one and the same thing. This is the principle you need; with this principle you have God with you and for you and failure is impossible. But with this principle Association is, at best, a matter of indifference; for this is sufficient of itself at all times, under any and every form of political, social, or industrial organization. He who has God can have nothing more. (Vol. 10, pp. 61, 62.)


The Church’s Method of Removing Evils


But is her method adequate? Let us see. The men who have manifested, under their highest forms, the virtues which are required to remove all real evils and to procure every true good of which men in this world are capable, are undeniably to be found in the Catholic Church, and nowhere else. If all men were like, for instance, St. Raymond of Pennafort, St. John of God, St. Vincent De Paul, or even Fenelon, a great and good man, yet far below the standard of a Catholic saint, there could and would be no lack of the good desirable and no real evil could exist. There is not a form of evil in society, a single ill that flesh is heir to, which some one or more of our saints have not made provision for removing or solacing, and which they would not have removed or solaced if they had been duly seconded, as you must know if you have made yourselves but passably acquainted with the charitable institutions of the church. Yet these saints did not go out of the church, and did but come up to that standard of perfection which she proposes to all and exhorts all her children to aspire to, and to which all may attain by the grace of God, and that, too, without any change of the existing political, social, or industrial order. All may have in the bosom of the church, whatever the external order, all the means needed for attaining to the highest perfection of which they are capable; and by attaining to that perfection all is secured that is or can be desired for society.

But, you say, all are not saints. True; but whose is the fault? Is it not the fault of the political, social, or industrial order, otherwise these of whom we speak could not have become saints; not the fault of the church, for she proffers to all the same means and assistance she extended to these; nor precisely the fault of human nature, for these were no better by nature than others, and many of the saints have even been wild and dissolute in their youth. All may not be called by Almighty God to the same degree of heroic sanctity, nor is it necessary; but all are called to Christian perfection, and the means which have proved effectual in the case of those who have attained to it are extended to all and must needs be, if adopted, equally effectual in the case of all. The fault, whenever anyone falls below the standard of perfection, is his own, is in the fact that he refuses to comply with all the church commands and counsels. The church cannot take away free will; and as long as men retain it they will, to a greater or less extent, abuse it. …God himself respects our free will and governs us only according to our choice. He gives us, naturally or supernaturally, the ability to will and do as he wills, and motives sweet and attractive as heaven and terrible as hell to induce us to will as he wills; but he does not will for us; the will must be our own act. If the church proposes perfection to all, exhorts all to aspire to it, furnishes them all the assistance they need to gain it, and urges them by all the motives which can weigh with them to accept and use them, the fault, if they do not, is theirs, not hers, and she is not to be accused either of inefficiency or insufficiency; for she does all that, in the nature of the case, it is possible to do.

But even a far lower standard of Christian worth than we have been speaking of, and which is possible in the bosom of the church to all, will suffice for the purpose of the associationists. Suppose every one should do, not all the church counsels, but simply what she commands, enjoins, as of precept and which every on must do or fall under her censure: what real evil could remain or what desirable social good would be wanting? There would be no wars, no internal disorders, no wrongs, no outrages, no frauds or deceptions, and no taking the advantage one of another. There would be no unrelieved poverty, no permanent want of the necessities or even comforts of life; for the church makes almsgiving a precept and commands all her children to remember the poor. There would remain no ruinous competition, for no one would set a high value upon the goods of this world. The real cause of all social and industrial evils the associationists deplore, so far as evils they are, is covetousness, which is said to be the root of all evil, and covetousness the church condemns as a mortal sin. Eradicate covetousness from the heart, and your reform, so far as desirable, is effected; and it is eradicated or held in subjection by every obedient Catholic. Hence all that is needed is in the church; let every one submit to her and follow her directions; nothing more will be wanting. All can submit to her, for God, in one way or another, gives to every one sufficient grace for that if it be not voluntarily resisted; and she herself is the medium through which is communicated all the strength any one needs to do all she commands. The way to destroy the tree of evil is to lay the axe at the root, and this the church does. She seeks always to purify the heart, out of which are the issues of life, and she never fails to do it in the case of any one who submits himself to her discipline. (Vol. 10, pp. 65-67.)

The church, then, offers an easy and effectual method of removing all evils and of securing all that is really good in relation even to our present existence. She offers a feasible and an effectual way of serving our fellow men- of acquiring and of giving practical effect to the most unbounded charity. Submit to the church, follow her directions, and you will need nothing more. You can secure all you desire, so far as wise in your desires, whatever be the form of the government or the social or industrial order under which you live. The internal can be rectified in every state and condition of life; and when the internal is right you need have no fears for the external. This is a speedy way and within the power of each individual, without his being obliged to wait for the cooperation of his brethren; for each can individually submit himself at any moment he chooses. It is an effectual way; for the reliance is not on human weakness and instability, but on the infinite and unchangeable God. (Vol. 10, pp. 67, 68.)


Connection of the Federal Government with Banks


In consequence of adopting the rule that the government may do incidentally what it may not do directly and what is not necessary to the discharge of its constitutional functions, three systems of policy have grown up, which not only create obstacles to a return of the government to its legitimate province, but also perpetuate inducements for it to depart farther and still farther from it. These are the system of internal improvements; the American system, as it is called; and the connection of the government with banking. There is no constitutional grant of power to the federal government in favor of any one of these. Congress has the right to establish post-offices and post-roads and to provide for the general welfare; therefore it has been contended that it may intercept the whole country with great roads and undertake any work of internal improvement that promises to be generally useful. It has no right to lay a protective tariff, but inasmuch as it has the right to lay imposts for the purposes of revenue, it may lay them to double the amount needed for revenue, and so lay them as to tax one portion of the community to enhance the profits of another, and in point of fact so as to affect all the business relations of the whole country. Under the grant of power to regulate commerce, to coin money and fix the value thereof, it is contended that it has the right to be connected with the banks and the whole business of banking. By means of its connection and banking business it is brought into the closest connection with every man, woman, and child in these twenty-six confederated states. We say nothing against banks and the banking system. We are not now inquiring whether the system be a good or a bad one. What we are contending for stands above and independent of any views anybody may entertain on banks or banking. The banks are intimately connected with all the business concerns of the community; they affect the private fortune of every individual; they determine, to a great extent at least, the price of every article bought or sold, produced or consumed. The government, by being connected with them, becomes connected with the business concerns of every individual citizen, and controls those concerns just in proportion as it is connected with the banks or exerts a controlling influence over their operations. …

We mean not by this that the government is to wage a war against the banks, but that it shall let them alone. If the states have not yielded up to the general government their right to institute banks, the banks are matters wholly within the jurisdiction of the states, and we should be the first to repel any attacks the federal government might be disposed to make on them; and this, too, whether we approved the banking system or not. The states are competent to manage their own affairs. We ask nothing of the federal government in relation to banks, but to provide for the management of its fiscal concerns without making any use, directly or indirectly, of their agency. (Vol. 15, pp. 90-93.)

The real governments of the Old World are at this moment on change or the Bourse, and the regulation of funds is the principal business of government. Government, instituted for the social weal of the people, becomes thus the mere instrument of private interest, of stock-jobbers, speculators in the funds. We do not want this state of things here. We want a government simple, open, and direct in its action, performing in the simplest and plainest manner possible the functions assigned to it.

We have also commenced in this country a new system of government, not in form only, but in spirit. We reject the maxim that it is necessary to deceive the people for the people’s good, and adopt the maxim that honesty is the best policy. To carry out this maxim, it is necessary that the government should always tell the truth, both in its words and deeds. It has a right to impose taxes, but only for defraying the expenses incurred in the legitimate exercise of its constitutional powers. It may lay imposts and collect revenues for this purpose, and for this purpose only. It has, then, no right to use its revenues or to suffer them to be used for any other purpose. Now, when it deposits its revenues in the banks, whether in a national bank or in a state bank, in general deposit, as it is contended it should, it uses its revenues or suffers them to be used for other purposes than those of defraying its expenses. They are not deposited there for safe-keeping, as the people are taught to believe, but to be made the basis of loans to the business part of the community. They serve the purpose of sustaining the credit of the banks and, through the banks, of the merchants and manufacturers. This is to collect the revenues for one purpose and to appropriate them to another. This is to deceive the people and to depart from the fundamental maxim of our state policy. If it be necessary to tax the community some thirty millions of dollars annually to sustain the credit of the business men and to enable them to carry on their extensive operations, let them be so taxed; but let it be openly and avowedly. The people will know then what they are taxed for. But so long as the revenues are avowedly collected for the purpose of defraying the expenses of the government, they should be sacred to that end. If in this way a portion of the funds of the nation be useless, it may operate as an inducement to make the taxes as light as possible, which in its turn will relieve the people and keep the government poor; and by keeping it poor keep it honest, free from corruption.

The greatest objection, or one of the greatest objections to the deposit system, in either a national bank or in state banks, is that it gives to the banks the use of the government funds. Being given to the banks, the use of these funds is virtually given to the business community. The business community, so long as it has the use of them, will not be anxious to reduce the revenues. It will prefer high taxes and favor the accumulation of a surplus, because by having the use of the funds to sustain its credit it gets back more than it is obliged to pay in taxes. …

It has never, we believe, been the intention of the people to place the real government of the country in the bank corporations. They have, we believe, always intended that the government should maintain its supremacy and follow its own interest and that of the country, regardless of the special interests of the presidents and directors of banks. In case the government maintains its supremacy, the amount of its funds, the time, place, and extent of its appropriations must always be matters beyond the control of the banks, and also matters which they may not always foresee or be prepared to meet. Government will have it in its power to disturb, whenever it chooses, their nicest business calculations and thwart them in their most cherished plans. It may call upon them for its funds when they are all loaned out and when they cannot be called in without great detriment to the business operations of the community, often not without producing a panic, financial embarrassment, commercial distress. If there be but one bank, or if there be one mammoth bank, it may perhaps profit by panics, financial embarrassments, commercial distress, but the banks generally cannot. Their interest is one and the same with the business community; it is best promoted by sustaining credit, by keeping the waters smooth and even, the times good and easy. They ought, then, to be free from all connection with a partner over whose operations they have no control, and who may choose to withdraw his investments at the very moment when they are most in need of them. It is altogether better for them to trust to their own means and to keep to their proper vocation than it is to mix up their interests with those of the government. (Vol. 15, pp. 90-96.)

We do not believe that the business men will maintain, in general thesis, that government ought to favor them, facilitate their operations, in order to enable them to advance the interests of the farmer and the artisan. There is, we devoutly hope, nobody among us to contend that the government should hire one class to take care of another. For here, everybody knows, government can give to one class only what it takes from another. We go against all special protection, against all special favors. We wish well to commerce, well to manufacturers, well to agriculture, well to mechanic arts. These are all sister interests; and when government does not choose to single out one as the special object of its caresses, they all live harmoniously together and add to each other’s comfort.

If, however, any interest in this country needs to be protected more than another, it is the interest of what may be termed productive labor. Commerce and manufactures do not need with us any especial care of the government. Of all interests among us, they are those which can best take care of themselves. Money always secures the influence needed for its own protection. It is those who come not into the moneyed class, honest but humble laborers, who are usually deficient in the power to protect themselves. But for these we ask no special protection, no special governmental action. Leave industry free, unshackled, and they will work out their own salvation. (Vol. 15, pp. 105, 106.)

We are also disposed to concur with Mr. Calhoun in the position he has assumed, that the federal government cannot place its funds in the banks in general deposit without violating an express clause of the constitution. He contends that when the revenues are collected and deposited in the banks they are, if ever, in the treasury. The constitution says expressly that "No money shall be drawn from the treasury but in consequence of appropriations made by law." The public funds deposited in the banks are drawn from them for other purposes than those of meeting appropriations made by law; they are made by banks the basis of discounts and are frequently all loaned out to their customers. Can this be done without violating the constitution? (Vol. 15, pp. 97, 98.)


Bank-Notes as Currency


It was unquestionable the intention of the framers of the constitution that the federal government should provide for a currency which should be uniform and of equal value throughout all the states. The union of the states was desired and effected principally to facilitate their commercial intercourse with one another and with foreign nations. Commerce craved and effected the Union, made us one people. Without the Union the states would have been to each other foreign nations, and the commercial transactions between the citizens of one state and those of another would have been subjected to the laws which govern the trade of our citizens with the subjects of England, France, or any other foreign nation. This was a thing to be avoided. It was desirable to bind the states together in a closer intimacy than that of foreign states, and to make the business intercourse between the citizens of one state and the citizens of another state as facile and as safe as the business intercourse between citizens of the same state.

But this was to be effected only by giving to the federal government the power to provide for a uniform currency, to "coin money and regulate the value thereof." Had this power over the currency been retained by the states individually, there might have been as many currencies as states. What was coin in one state would have been bullion in relation to another. Coins of the same denomination might have varied in value as you passed from state to state, and there would have been no currency in the Union with which debts could be discharged alike in all the states. To avoid this last result, the states were prohibited from issuing bills of credit and from making any thing but gold and silver a legal tender. This prohibition was not laid on the states for the purpose of protecting the citizens of the same state against one another, but the citizens of one state against those of another state. The object in view was still a uniform currency. It was to secure to every creditor payment in currency which would be of equal value whatever part of the Union he might wish to use it.

But we do not find that this implies an obligation on the part of the federal government to provide a currency of bank paper which shall be safe and of uniform value throughout the states. We cannot find that the constitution and laws know any other currency than that of gold and silver; and when we consider the object which led to the prohibition of the states from issuing bills of credit and from making anything but gold and silver a legal tender, we may safely conclude that it was the intention of the framers of the constitution that gold and silver alone should constitute legal currency. Bank-notes may circulate because they are convenient and because it may be believed that they will be redeemed in specie on demand, as may bills of exchange and the promissory notes of individuals; but however much they may circulate, they do not constitute a legal currency. (Vol. 15, pp. 90-100.)


Lincoln’s Financial administration


There may be men in the country who are respectable bankers and private financiers, but there was not a man connected with the administration, in either house of congress, that understood the science of public finance or how to turn the credit of the government to the best possible account. Mr. Bowen, in his "American Political Economy," asserts, and appears to us to prove, that during the war the people paid in the shape of taxes, if they had been equally distributed throughout the four years for which the war lasted, enough to have met all the necessary expenses of the war, so as to have left at its conclusion not a cent of public debt. Yet the public debt incurred by the war was, at its conclusion, at least three thousand millions of dollars, and the larger part of it, in spite of treasury reports, remains as yet unliquidated, and a most crippling burden on the industry of the country, especially when coupled with the extravagance and constantly increasing expenditures of the government itself. Mr. Lincoln and his secretary of state never understood anything of public economy, and appeared to act on the principle that men were to be induced to support the war policy of the government by finding it making them millionaires. The secretary of the treasury, Mr. Chase, was an honest, well-meaning man, but the energies of his mind had been employed chiefly in the agitation of the slave question, in organizing a political combination for the overthrow of slavery, and in dreams of an impracticable equality. He knew comparatively little of finance, and sought instruction of Jay Cooke and others, who knew still less and had far less honesty and integrity than he, as their support of the fallacy that "a national debt is a national blessing" and their subsequent disastrous failures in their own private business operations amply proved. These bankers were in the habit of treating debt as capital and trading on it as such, and consequently, in their estimation, the larger the national debt the larger the national capital and the larger the business and profits of – the brokers.

The secretary’s first financial operation was a blunder; we might say, a financial suicide. His first loan was taken by the banks, and he drew from them all, or nearly all, their specie, and thus forced them throughout the country to suspend payment. He might have avoided this disaster by leaving the money in the banks and paying its principal creditors in bank certificates, which would, to a great extent, have circulated as currency, and the smaller creditors in drafts on the banks in which the loan was deposited. As the banks were solvent and paid specie when demanded, both the notes and certificates would have circulated at par, and very few would have been presented for redemption in coin, not more in proportion than in ordinary times, for the holders would have been in general satisfied to receive either a transfer of credit or the bills of the bank. There need have been no extraordinary demand for gold or silver coin – not greater than the banks could meet without crippling themselves. In this way the necessity of the suspension of the banks might have been avoided and the currency kept at par. If it was thought that the sub-treasury act which requires the receipts and disbursements of the government to be made in gold and silver coin stood in the way of this arrangement, which we think it did not, nothing would have been easier than to have obtained an act of congress suspending its operations in this respect during the war. The policy of the government should have been to strengthen the currency and keep it at par with gold, in order to keep down the prices of what it had to purchase: and this, with a little foresight, it might easily have done, and thus have maintained an equilibrium between its war expenditures and the war taxes it levied on the people. But instead of this it began by taking from the banks their reserve of gold and compelling them to suspend, and forcing the business operations of the country and its own to be carried on in an irredeemable and constantly depreciating paper currency.

The exhaustion of the banks of their specie reserve and the bank suspensions left the country without any currency or money in which it could receive loans when negotiated. This, we suppose ,led to the issuing of treasury motes and making them a legal tender for all dues except the customs, which were still to be paid in gold. We will not say that the act of congress authorizing the issue of these treasury notes as a national paper currency was not a necessity at the time it was passed, for we are not sufficiently well informed on the subject to decide so important a question; but this much we may say, if it was a necessity it was the previous blundering of the treasury department in having exhausted, unnecessarily, the banks of their gold that made it so. It has been said that the secretary himself disapproved of the desperate measure; but our memory is strangely at fault if he did not urge it upon congress and talk a large amount of nonsense about demonetizing gold and silver, as if that were possible while they constituted the currency of all civilized nations, unless we ceased to have any commercial relations with them, and while we made the duties on imports and the interest on government bonds payable in coin. They could be demonetized and made simple merchandise only on condition that the government dispensed entirely with their use as money and made the treasury notes a legal tender for all debts due to it from one citizen or denizen to another, which the act did not do. It simply created a double currency: the one of gold and silver for certain purposes, and the other of treasury notes, resting on the credit of the government, for other purposes.

The bill creating the so-called legal tenders was in the nature of a forced loan, without interest and irredeemable. It was an act of downright public robbery, especially since the notes were not receivable for all dues to the government, but only for a certain portion of them. The original bill, we believe, contained a provision that after a certain time the notes might be converted into interest-bearing bonds payable in gold; but that provision was soon struck out, and the government need never redeem them unless it chooses. The measure seemed to supply the government with ample funds. Loans to any amount desired could easily enough be obtained at six percent, or from the people at seven three-tenths. The financial operations of the government were considered a grand success, and its expenditures were equally great. But what need of loans at interest at all? Why not have paid out directly the greenbacks and saved the interest on its bonds and the obligation to pay the bonds in gold, since the loans were received not in gold, but in greenbacks or legal tenders, that is, in currency supplied by the treasury itself? The interest and bonds payable in gold, declared to be demonetized, were quite unnecessary, for the notes were worth as much in the treasury when received from the printer as when borrowed from the people, the banks, or the brokers.

But as gold was not demonetized it remained the standard, and the greenbacks were worth only the amount of gold dollars they could purchase. They were not and could not be retained at par. We spoke of the premium on gold, but it was not that gold was at a premium, but that greenbacks were at a discount. Gold did not appreciate, but the currency depreciated, and at one time to thirty-five percent, if we do not mistake. The government received on some of its loans only forty cents on the dollar, and, if we are rightly informed, only sixty cents on an average of all its loans, for which it bound itself to pay one hundred cents in gold, that is, nearly twice the amount received, besides interest. Is it possible to imagine a more miserable financial policy, one more destructive to the interests of a country? The depreciation of the currency had the appearance of raising the price of all goods, agricultural and industrial products, and wages of labor; but it was all an illusion, for the country was only contracting a debt, if you count the several state debts, municipal debts, and corporation debts, to say nothing of individual indebtedness, to more than one half of the whole assessed value of the United States before the war, excluding the property invested in slaves. In 1866 the taxes collected by the general government alone were, if we can trust statistics, within one hundred and forty millions of the whole income for that year of the entire Union. Several millions of taxes of one sort or another have been remitted, but still the business of the country is depressed, and men and institutions supposed to abound in wealth are every day failing, and proving that our business prosperity was built on debt, called, by way of euphony, credit, not capital. (Vol. 18, pp. 586-589.)


The Credit System


The fact is, the mercantile system, introduced by England, or the credit system, that is, the system of making debt pass for capital, is itself failing, in consequence of its own expansion. The principle of the system, as we understand it, is to do business on credit and to rely on the profits of the business done to pay the interest on the borrowed capital and to discharge in time the loan itself. This would, perhaps, be well enough if the capital borrowed were real capital, for the volume of business would then not exceed the ability of the country to sustain and no general depression of business could occur. But it is credit, not capital, that is borrowed. The banks do not lend money, they simply lend their credit, and consequently depend on their debtors for the means to sustain their own credit or to redeem their bills; and these depend on the amount and profit of the business they do on their borrowed credit. If they fail the bank fails, or suspends, as it is politely called. The greater the facility of borrowing credit, the greater the extension of business. The multiplication of banks of discount facilitates the borrowing of credit, tempts an undue proportion of the young men of the country into business, and those already engaged to extend their business operations, till business is expanded far beyond the wants of the community or the ability of the industry and productions of the soil to support; and a collapse and business depression, as well as wide-spread financial ruin, inevitably follow. No wisdom, foresight, or prudence, no business tact or capacity, can save a house that has borrowed or given credit from failing, for it will be carried down by the collapse of credit or the demand for payment of the debt hitherto used as capital; and the means to pay it will not be forthcoming when business has been overdone.

Business men feel the pressure and, with us, demand of the government more currency or more banks to facilitate credit. Fatal delusion! The difficulty is not the lack of currency nor of institutions of credit, but that people have nothing to part with to sustain credit. We presume the business of the country, trade, manufactures, and internal improvements, is even now in excess of its natural ability, and consequently things must be worse before they can be better. All nations that turn their energies in the various channels of business, or make business their leading interest and push it beyond the ability of labor and the soil to sustain, must be constantly experiencing what we have been experiencing since September, 1873. In reality, the depression complained of is only an effort of nature, so to speak, to expel a disease that, if not expelled, must prove fatal. It is the result of the operation of the vis medicatrix of nature, and however painful it may be, it will bring with it a cure unless we immediately rush, as we are not unlikely to do, on the first symptoms of returning health, into another business debauch.

What remedy the government can apply we are neither statesman nor financier enough to say, but we do not believe there is any effectual remedy possible short of breaking up entirely the system that treats debt as capital; for in the long run the interest that must be paid on the borrowed credit used as capital will more than absorb the average net profits of the business that can be done with it. Individuals may succeed and enormous estates be accumulated, but the business classes as a body will fail and end poorer than they began. The nation will be only impoverished and weakened. Government may aggravate the evil, but we see little it can do to mitigate it. Neither resumption of specie payments nor inflation of the currency will cure it or permanently lessen it. We are an old man, but we cannot remember a time when we did not hear a loud demand for more currency; and even when the banks professed to redeem their bills in coin, the same periodical panics occurred, or seasons of business depression and hard times that have occurred under our present irredeemable paper money, only more frequently. We remember 1819, 1829, 1836-7, 1849, 1857, which were as disastrous as 1873 or as is 1875. we know no way of preventing these periodical panics, if you choose to call them so, with a mixed currency of gold and paper, or with banks of discount authorized to pay out their own notes as money, that is, to lend their credit instead of their capital.

Our studies of finance and political economy were made many years ago, say from 1829 to 1843, and we are too old to revise the views we then formed. We then became a "hard money" man and opposed to all banks except banks of exchange, deposit, and transfer of credit. Such a policy may be objected to as likely, if it is adopted, to diminish largely the volume of business and to keep idle the little savings of the people; but that is precisely the result we would bring about. We grant our views are old-fashioned and directly opposed to those of the modern business world, to the spirit of enterprise now so loudly boasted; but we are not so silly as to suppose that any community will adopt them, and so we forbear to urge them. Yet we would restrict the volume of business, the trade and enterprise of the community to its real capital, and instead of facilitating the entrance of young men without capital into business, we would send them to cultivate the soil, employ them in agriculture or the mechanic arts; and that not for the purposes of exchange or the acquisition of wealth, but to gain an honest living by the sweat of their face. This is the normal condition of man on the earth, and every departure from it is attended with more or less evil to body or soul, or to both. Yet by our age of material progress and "advanced ideas" this can be regarded only as very absurd and as betraying complete ignorance of the world we live in. (Vol. 18, pp. 589-592.)


National Bank Notes


The measure which we dislike the most of any that we heard suggested is to suppress the national banks and to make the currency consist entirely of treasury notes, or legal tenders, resting entirely on the credit of the government. This would give the government the power to expand or contract the currency at will and to change at any moment the measure of values, besides making the currency consist of that worst of all financial evils- an irredeemable paper currency, which no possible contrivance can keep at par with coin. Parties would be formed for expanding or contracting the currency, money as a measure of values would vary as the one party or the other succeeded in the elections, and business would be brought to a stand-still, for business men would never know on what to depend, since the policy of the government today may be reversed tomorrow. Besides, if we are to have banks issuing their notes to circulate as money- and have them in some shape we shall, at least for a long time to come – we are disposed to believe that no better or safer system can be devised than the existing national-bank system. Compel the national banks to redeem their notes on demand in specie, and they would furnish as uniform, safe, stable, and steady a paper currency as is possible. As banks of issue and circulation they would be absolutely safe. Their defect is in not affording due protection to depositors, which it is impossible for any system of banks managed by imperfect men to afford amid the constant fluctuations of business if the bank is allowed to make its deposits a basis of its discounts. The objection that the national banks, banking on government bonds, receive a double profit on the bonds they hold, or which are deposited in the treasury as security to their bill-holders, first, in the interest on them, and, second, in the profits arising from using them as bank capital, would be in a measure obviated by resumption and the necessity of having coin reserves. The objection is equally valid against the whole modern system, which treats paper evidences of debt as capital. As long as we retain the system it is not worth while to insist on so trite an objection. It is part and parcel of the system by which "the rich are made richer and the poor poorer," especially favored by all popular governments, or so-called free governments. (Vol. 18, pp. 592, 593.)


Financial Remedies


The various remedies suggested, whether by the president or by prominent merchants, traders, and bankers, are puerile, and not even palliatives. There is no remedy for a gangrenous limb or safety for the patient but in amputation, and not always even in that. The essence of the present system is in using debt as capital. Under it no debts are ever really paid; there is only a transfer of the debt, and all debts are mortgages on the future. A debt discharged in bank-notes becomes a debt against the bank; in greenbacks, it becomes a debt against the government, but in neither case is there any liquidation of the indebtedness. If the government credit fail – and a revolution or gross mismanagement may cause it to fail- somebody must lose; if the bank fail- and fail it must if it overdoes its business, if its debtors fail, if it lock up its means in unavailable or worthless assets, if there is a considerable shrinkage in their market value, or if its officers are speculators, stock-gamblers, swindlers, or defaulters- its creditors necessarily lose. The bank depends on its debtors for its ability to pay its own debts, and the government would bankrupt the whole people were it to attempt to liquidate at once its entire indebtedness. It is more than it now is able to do to meet its ordinary expenses and pay the interest on the public debt. For remedy, say some, create more banks, repeal all restrictions on their circulation, and relieve them of obligations to keep a reserve on hand. Authorize free banking, or banking by anybody that pleases, say others. Let the government issue more greenbacks or treasury notes, say others still; that is, remedy the evil by increasing it, or inflating still more our over-inflated credit!

The fact is, we have been attempting to be a great business community as distinguished from an agricultural community, and have subjected agriculture itself to the laws of commerce and manufactures. We have attempted to do more business than the country required or its capital and labor could sustain. We have been in too great a hurry and wished to plant and reap the same day. We have been carrying out vast schemes of internal improvements which exceed our means, and we are crippled with debt. We have operated on borrowed capital, which we have received in the shape of perishable merchandise and which we have consumed, leaving the original loan uncancelled. These loans, being paid chiefly in goods imported, have greatly stimulated the extravagance of the people and introduced a love of show and the habit of living beyond their income, while they are left to pay for the internal improvements, as far as paid for at all, out of their own pockets, and still taxed in one form or another to pay the interest constantly accruing to the foreign creditor, or to the domestic creditor to whom the claim has been transferred. This tax for interest on debt and to support the extravagance generated by our foreign loans received for the most part in the shape of perishable merchandise, is too heavy for our land and labor, productive as is the one and intense and long-continued as is the other, and the consequence is that the people are in debt, and, speaking generally, live on credit or draw on their capital, hitherto chiefly in land, the better portion of which has already been parted with, eaten up, or worn out.

The remedy is not easy, for the ruling classes have not either the wisdom or the virtue to apply any effectual remedy. The most that they will tolerate is such measures as will enable them to tide over the present crisis or palliate its severity, but leave in full force all the causes that have produced it. Many of these causes are moral and social and beyond the reach of legislative or governmental action. So far as the remedy depends on the government, it consists: 1, in the total repeal of the legal-tender act and making nothing a legal tender but gold and silver; and 2, in the restriction of the banks in the issue of their notes or bills to their actual ability at any time to redeem them in the lawful money of the United States. The twenty-five percent reserve the banks are not required to keep in their vaults affords no adequate security either to bill-holders or to depositors, as the present crash proves. The banks must not be allowed to draw interest on their debts which exceed their means of redeeming them on demand, nor use deposits as capital. We do not disguise the fact that these two measures would cause a considerable shrinkage in values and greatly diminish the volume of the business of the country; but they would tend also to check wild and reckless speculation and to place the business of the country on a safe and wholesome basis. Matters must become worse before they can become better. The volume of business we are doing is becoming too large for the capital of the country, and it cannot be lessened without more or less suffering for a time to the mass of individuals. We have nothing with which to extinguish our indebtedness, whether foreign or domestic, but the produce of land and labor, and till we are compelled to bring our expenses within the income from land and labor, and so far within as to leave a surplus for a sinking-fund, we shall be afflicted with periodical panics like the present. Trade and large manufacturing establishments, as distinguished from domestic industries, are ruining us, as they ruin, in the long run, every nation that depends on them. The political economists are the most consummate fools going, for they regard man only as a producing and consuming animal and are ignorant of the sources of real wealth.

We do not expect either of the two measures we recommend – measures designed to put a stop to the use of debt as capital or stock in trade – will be adopted, nor do we expect to see any efficient remedy applied to the evils of which everybody complains. The present crisis will, after ruining thousands, perhaps hundreds of thousands, who will be unheeded as the slain in battle, exhaust itself, and the survivors, unwarned by experience, will resume the old course and count the battle won; till a new crisis, a new crash, or prostration of credit comes, from which the widow and orphan, people of moderate means, and the laboring classes, as usual, will be the principal sufferers. Men will not believe that the worship of Mammon is suicidal and that political economy, to be successful, must, like virtue, be based on the principle of self-denial. The modern system of business and finance, which is that of using debt for capital, has too strong a hold on most modern nations, especially Great Britain and the United States, for any power in them to cast it off. It is rapidly becoming universal; it has triumphed over statesmanship, morality, and religion, and we suppose it must run its course till the modern nations find their boasted civilization evaporating in smoke. "The wicked shall be turned into hell, and all the nations that forget God." (Vol. 18, pp. 549-554.)


The Protective Policy


We trust that our views are too well known for us to be suspected of favoring the wild notions of free trade by the late William Leggett and others. We are no friends to what has been aptly termed the Let-us-alone policy. We believe in government, in the permanent necessity of government, in a strong government, able to speak with authority, to command, and to enforce all its commands. Of all evils that can befall a country, a weak government is one of the greatest. Nor do we believe that it is never proper or necessary for government to interfere in the business affairs of individuals, or to attempt to give a new direction or a new stimulus to industry or to a particular branch of industry. We do not base our opposition to a protective tariff on the ground that individuals are the best judges of their own interest, and that free competition among individuals is the best and surest means of national and individual prosperity. We are no believers in the sovereign virtue of free competition. In our judgment the common reasoning on this subject is fallacious, and competition is productive of immense evils, if, indeed, of some good. There are times and cases when government is needed to control it, to set bounds to it; when the government itself should take the initiative and assume the direction. There may be a branch of industry of great national importance which would be wholly neglected if the government should not adopt measures to induce the citizens to cultivate it, but which, when once fairly engaged in, will yield ample returns and open new sources of wealth and independence to large masses of the people. But if it is a branch of industry that needs more than a temporary protection from the government, it is not one of those which should be protected; because if it cannot flourish without a permanent protection, it is evidently unsuited to the country and can be prosecuted only at a national outlay for which no adequate return can be made.

Yet in our own country the initiative and direction of the government in industrial operations can rarely, if ever, be necessary; because here, such is the activity and enterprise of our citizens that they stand in no need of a stimulus from government, but will of themselves seek out and carry on every industrial enterprise by which either national or individual prosperity may be promoted. And if not, the only stimulus or protection to be demanded from the government must be demanded of the state governments, not of the federal government. The state governments have the constitutional right to protect and foster industry, and this is one of their chief duties. Bu the federal government has no right to meddle with the subject. …We cannot first determine what citizens have the right to demand of government as such, and then go on and demand it of the federal government, for it is a special government, having only certain special powers, and by no means the general powers of government. We have the right to demand of it only what it has the right to do; and it has the right to do only what it was expressly created for the purpose of doing. (Vol. 15, pp. 496-498.)


Express or Incidental Powers


We mean not, by saying that the federal government is restricted to express powers, to say that it has no incidental powers. It has incidental powers; but the incidental powers can be exercised only for the purpose expressed in the substantive power. For any power claimed to be incidental not necessary to carry into effect the substantive power cannot be said to be an incidental power. For the moment it is a power to effect any other end it ceases to be an incidental and becomes substantive; and then, if not expressed in the constitution, it is unconstitutional and not lawful to be exercised.

Now, the power to lay a tariff for the protection of any branch of industry is not a substantive power in the constitution, as is agreed on all hands. Consequently a tariff laid for the express purpose of protection would be unconstitutional. The substantive power touching a tariff is the right to impose a tariff for revenue, and for revenue alone. The incidental power is the right to discriminate, but to discriminate only for the general purpose of the substantive power- namely, revenue. To discriminate in favor of protection would be to contemplate an end not contemplated in the substantive power, and therefore to convert the incidental power into a substantive power. The right to discriminate in favor of protection as incidental to the right to impose a tariff for revenue can be claimed only on condition that to discriminate for protection and to discriminate for revenue are one and the same thing. But to discriminate for protection is to discriminate against revenue. Therefore the right to discriminate for protection cannot be an incident of the right to impose a tariff for revenue. (Vol. 15, pp. 498, 499.)


A Protective Tariff Defeats Revenue


Our democratic politicians do retain some reverence for the constitution. They see clearly that a tariff expressly for protection would be unconstitutional, but they do not seem to see with equal clearness that a tariff incidentally for protection is equally unconstitutional; for they do not seem to be aware that a tariff defeats its substantive purpose of revenue just so far as it incidentally discriminates effectually for protection. A protective tariff, we all know, is repugnant to a revenue tariff, and defeats revenue just so far as it is really protective. Then a tariff discriminating for protection is repugnant to a tariff for revenue just so far as its discrimination is really protective. Discrimination for revenue proceeds on principles directly opposed to the principles on which proceeds discrimination for protection. This is a fact which should never be lost sight of.

A protective tariff, if true to the purpose for which it is imposed, must needs be restricted to such foreign articles as come into competition with similar articles the growth or manufacture of our own country; but a revenue tariff, if true to its purpose, must not be so restricted, but must be lighter on these articles and heavier on those articles which enter largely into the consumption of the people and which are obtained only from abroad. The protective tariff must, as far as possible, shut out foreign importations and secure the home market to the home producer; the revenue tariff must by no means shut out foreign productions nor check importations beyond the point where the increased rate of duty will not compensate for the diminished imports. In discriminating, that is, in laying a heavier duty on some articles and a lighter duty on others, the same principle must be observed. A protective tariff lets in tea, coffee, and such articles as are not the growth or manufacture of this country, free of duty or at a merely nominal duty, while it imposes a heavy tax on cottons, woolens, iron, etc. A revenue tariff reverses this and taxes the first class of articles more heavily than the last, because, by so doing, it obtains the greater amount of revenue at the same average rate of duty. It is obvious then, that a revenue tariff discriminating in favor of our own industry is unconstitutional and suicidal. Unconstitutional, because there is no substantive power in the constitution to impose a tariff for protection, and suicidal, because so far as protective it defeats revenue. This is conclusive. (Vol. 15, pp. 499, 500.)


Protection of all Interests Absurd


The proposition to afford a positive protection to all the great industrial interests of the country is, as we have said, an absurdity; for protection is, directly or indirectly, a bounty to the protected interest, and government has nothing to give in the shape of a bounty to one interest except what it takes from some other interest or interests. The government would encourage the manufacture of woolens, and therefore lays a duty on them when imported. But it must protect all interests alike; so it lays another duty on foreign wool, which, by increasing the cost of the foreign material, neutralizes, as far as it goes, the benefit the manufacturer derives from the duty on woolens. The government imposes a duty on foreign silks to encourage the domestic manufacture, and then destroys it, wholly or in part, by imposing another duty on the raw material for the encouragement of the silk-grower. And this miserable quackery is wise legislation and supported by the most eminent statesmen both of the Whig and Democratic party, your Clays, Websters, Polks, Wrights, and Buchanans! (Vol. 15, p. 501.)

Protection Injures Agriculture


The manufacturing population do not and cannot, in a country of such vast agricultural resources as our own, afford an adequate home market for all our surplus produce. A manufacturing population large enough to consume all the surplus agricultural products we could easily produce would, with the present improvements in labor-saving machinery, be large enough to manufacture the principal articles of consumption for the whole world, and then the manufactures would labor under the difficulty of having no adequate market for their goods. But this is certain: our manufacturing towns do not and cannot furnish an adequate market for our surplus agricultural produce. This surplus must either lie on the producers’ hands or else find a foreign market. But how is it to find a foreign market? Foreigners can buy of us only on condition of selling to us in return. We can refuse to buy of them only on condition of rendering ourselves unable to sell to them; for all trade is necessarily, directly or indirectly, an exchange of products. Purchases depend on sales and sales on purchases. If we shut the foreigner out of our markets we shut ourselves out of his; if foreigners shut us out of their markets they equally shut themselves out of ours. But our protective duties, if they are really protective, restrict importations, that is, the sales of foreigners to us, and therefore, to precisely the same extent, our sales to them. Consequently we restrict the foreign market to our agricultural produce to exactly the same extent that we restrict the home market to foreign manufactures. Here is a positive disadvantage to the agriculturalist, for which you can give him no compensation.

Nor is this the only advantage. The price of manufactures is determined by the demand for home consumption and is not affected by the foreign demand, as is proved by the fact that a duty on foreign importations can be protective. When any article, no matter what, depends on the foreign demand for its price, it is beyond the reach of protection, for protection secures only the home market, but this article has already secured that and demands a foreign market. But the price of our agricultural produce is determined, not by the demand for home consumption, but by the foreign demand, and is determined by the price we can command for the surplus which seeks a foreign market. But the protective tariff lessens this foreign demand and, consequently, the price the agriculturalist can command for his produce, whether at home or abroad, for a lessened demand always lowers the price. Thus under the protective tariff the farmer sells less and at a lower price. But the tariff raises the price of manufactures, for if it do not it is not protective. Consequently, under the operation of a protective tariff the farmer sells less and at a diminished profit, while at the same time he is compelled to pay a higher price for what he buys. You diminish his means and increase his expenses. Here is the necessary operation of a tariff for the protection of manufactures. Will the advocates of protection tell us how they propose to compensate the agricultural interest? The simple truth is, if you will impose a duty for the benefit of the manufacturing community, you must do it at the expense of the agricultural community, for this is the only way in which it can be done. As honest men you should, then, boldly avow that you mean to tax the farmer and planter for the benefit of the manufacturer, or else repeal your protective tariff and refuse to grant a special protection to any industrial interest. (Vol. 15, pp. 502, 503.)



Direct Taxation


The only possible way of protecting all interests alike is for the government to afford special protection to none. The only wise course for an American statesman to recommend to his countrymen is that of free commercial intercourse with all nations. We wish we were, as a people, wise enough and honest enough to refuse to raise our revenue by duties on imports, and to raise it only by a direct tax on property. Politicians may say what they please, may express all the horror they can contrive to affect at the proposition; but a direct tax on property is the only honorable, the only just, the only wise tax. When the revenue is raised directly the government is sure to be kept pure by being kept poor. Each man knows how much he pays and is sure to look closely after its expenditure. But it is, at present, idle to contend for the system of direct taxation. That would be equal and just and therefore must needs be offensive. The present system, which raises the revenue without any man’s knowing precisely how much he pays, enables the government to plunder the people much more effectually and to a much greater extent than it could under a system of direct taxation, and, what is equally to the purpose, compels the poor man to pay relatively altogether a larger proportion of the tax than the rich. Your Abbot Lawrences pay no portion of the tax to the government, but receive a bounty from it; while the poor girl in their mills pays a tax of at least some thirty per cent average on every manufactured article she consumes. So, of course, direct taxation is out of the question. It would be horrible to make the rich bear their due proportion of the expenses of the government. Are not the poor the lowest stratum of society? On whom else, then, should rest its weight? But in case we cannot go to direct taxation, but will continue to raise the revenue by imposts, we insist the duties should be laid on revenue principles, and for revenue alone. This is what, and all that, the opponents of the tariff contend for; we are all of us willing to support a revenue tariff with discrimination – but discrimination for revenue, not for protection. (Vol. 15, pp. 503, 504.)


Active Partisanship of Office-Holders


The man and the citizen are not sunk in the officer. An office-holder may do whatever he has a right to do as a man and a citizen not incompatible with the faithful discharge of his official duties. In what manner he exercises these rights is no concern of the federal executive, for he is accountable for their exercise to another tribunal. To inquire how much he votes, how many speeches he makes, or how much money he spends for electioneering purposes is as extra-judicial, if we may say so, as it would be to inquire whether he lives in a frame house or a log cabin, drinks hard cider or champagne, eats white bread or brown, and sleeps on a feather-bed or a pallet of straw. The relation between the executive and the office-holder is purely official, and no question transcending that relation can be rightfully entertained. If the officer neglect his official duty he should be removed, not for taking part as a citizen in politics, but for neglecting the duties of his office; if he transgress the laws of the state in which he resides he should be turned out, not for his electioneering, but because every government is bound to see that its agents respect the laws of the sovereign within whose limits they reside.

The rule, furthermore, is indefinite. What is interfering in election- "active partisanship," as it is called? He who goes quietly to the polls and deposits his vote is an active politician compared with one who votes not at all, and a partisan, for he most likely votes for one party or another. Shall the citizen be deprived of his right to vote because he is an office-holder under the federal government? We have not heard this pretended. Where, then, will you stop? May not the officer, without forfeiting his office, tell his honest convictions to his neighbor on political matters? If not, you abridge the freedom of speech, a thing which no branch of the federal government can attempt without violence to the constitution. If he may tell his honest convictions to one man, why not to as many as choose to listen to him? If in one place, in one position, why not in another? Where, then, will you draw the line between simple non-interference at all and the most active interference compatible with official fidelity, the laws of the state, and general morality?...

The evil does not lie here, but elsewhere. It lies not in any interference of the officer as a citizen, but in his official interference. No office-holders, except such as have patronage to bestow, can cause any portion of the evil; and those who have patronage to bestow cause it not by voting, writing, or lecturing, but by bestowing their patronage, not with reference to fitness to office, but with reference to services rendered or to be rendered to the party. A collector of the customs, for instance, brings his office to bear on elections when he appoints to office or removes from office with reference to these services. His duty is to select his officers with sole reference to the public service, and he transcends the line of his duty when he has reference to anything else. Other things being equal, he may, no doubt, select his personal or political friends in preference to those who are neither the one nor the other; but he interferes officially whenever in his appointments he leaves it to be understood that the persons appointed, in addition to faithful officers, are to be also active partisans, or when he removes a faithful and efficient officer who is not an active partisan and appoints to his place one who is. The supreme executive, however, causes the chief part of the evil and is guilty of direct official interference when, on his accession to power, he removes from office those who had opposed his election and fills their places with the most active and least scrupulous of his partisans. (Vol. 16, pp. 177-179.)