This article appeared in The Standard newspaper, published in Cassville, Georgia, on November 26, 1857, during a period of financial panic and banking controversies in the United States.
Money is gold and silver coin. It became such to the American people especially by the Constitution of the United States—not primarily, for it was such before its adoption, by the usages of civilized nations. It became secondly and especially our money by the provision of our Constitution, making it such, and to the Congress of the United States was conferred the power and duty to “regulate its value.” This, then, is money with us—nothing else is.
What is the use of money? Money is not bread to eat, nor clothes to wear. Money is not wealth—it is only the representative of wealth—the standard by which wealth is measured. Bread is wealth; clothes is wealth; a bed to lie on, a house to ride, to plow—whatever meets man’s necessities is wealth—I mean the necessities of his nature. The world of men would be quite as well off without money, but for the fact that one man has more of one kind of wealth at a given time than the wants of his nature requires; at the same time he has less of another kind of wealth which his neighbor has what he needs; his neighbor has what he needs more than his neighbor does, and this neighbor wants what the first man has.
The True Function of Money
A man, for instance, has two horses; he needs at the time but one; he sells his horse for sixty coined dollars—for what does he sell the horse? Can the coined dollars ever enter into the necessities of his nature? The coined dollars can be of no service to him directly—that is, in themselves considered; he cannot eat the dollars, nor wear the dollars, nor think the dollars, nor shelter, nor warm himself with the dollars; they are as useless, in themselves considered, or in intrinsic value, as sixty ill shaped rocks. They have, though, a relative value—relative, because of conventional agreement, because of common consent and usage. The man who sells the horse has an ulterior view in the sale, a view outside of the sixty dollars—the sixty dollars only becomes the way, the path, to bring him to his object; he wants the money not for its own sake, not to keep, but to re-convert. He buys a cow for ten dollars, a bed for twenty, a shelter for thirty. For these three things, which the necessities of his nature requires, he pays the sixty dollars, which he received for his horse. So then his horse is gone, his money is gone. Money was then a mere representative, a standard of measurement for wealth, he has in the process parted with the horse, parted with the money, but his condition is bettered in that he is clear of the horse, clear of the money, but has a cow, a bed, a shelter, all of which he needed more than he needed the horse.
The Delusion of Paper Money
This far in regard to the use of money seems very plain. We come though to speak of money as to its quantity, where we shall have a little more difficulty in being understood, for the reason that we are apt to conclude, without investigation, that if money is rapidly multiplied, so is wealth increased, and thus indirectly, but in a very strong manner, giving the lie to Ben Hill and the Know Nothing papers that have harped with so much seeming pleasure upon these charges.
Money, though, is not wealth—it is its representative. There can be no more wealth in the world without as with it. Money is gold and silver coin. Banks are constituted the power and the privilege, by their charters, to issue three paper dollars for one in specie, with the promise to pay three on demand, when they had but one with which to pay. This is the world made richer by this operation? Is there more bread in the land by it, more clothes, more shelters—less certainly, by the amount of the loss of the labor of the “legion,” who are employed in banking.
This “legion,” are not producers, they are consumers—consumers of the bread which other men make. They are in one respect, yea, two, like the lily of the valley, they toil not—this is one respect, and the other, yet Solomon in all his glory was not arrayed like one of these. How lordly these bankers tread the earth—how precise and measured their step, how precise their every movement—they have their “bank hours,” their “offering days,” their “discount days,” their conversation is of exchange, of bills maturing and matured, of drafts, acceptances, checks, things wholly beyond the knowledge and understanding of the toiling millions, whose sweat and blood they convert into palaces, into luxuries.
The Banking System as Economic Parasitism
They swirl their brandy, stir their wine, talk of freedom, of independence, under such a state of things; its despotism, absolute soulless submission on the one hand, and despotism on the other.
These lords of the land have out, this day, millions of their promises to pay on demand, which they cannot do, if they would, and would not if they could; as it is not to their interest to do it, they hold the destinies of the people under their power, and are measuring strength with the Legislature while I write; the indications are, they will be victors—a few days will determine it.
SENEX.