subjected by the few governing classes during nearly the whole period of man's history. It is an extreme reaction against an extreme evil, but it has at any rate no reason to exist in this republic, if the true principles of Liberty and Law can be established. I have treated this whole subject in a special chapter of this part of the book, under the heading, "Capital and Labor, or the Poor and the Rich," and have there shown how the despotism of the Communist and Nihilist must be abolished, as well as that of the corporations and other monopolies. And this can be done only by the impartial rule of Law and Liberty, on a plan of government similar to that laid down in this book. MONEY. CHAPTER I. ORIGIN OF MONEY. In the most primitive condition of man each individual furnished himself his own necessities. But as men begin to associate together and live in society, this condition changes, and each one seeks to become a specific worker in some direction, while the chosen rulers, teachers, etc., are engaged in no work at all directly productive of the necessities of life. Thus there arose a system of barter or exchange for the working men, and for the officials a system of payment in kind, which gradually necessitated a system of tokens whereby to effect the interchange. There being yet no State organization sufficiently developed to make any token no matter how intrinsically valueless -- generally current by guaranteeing its permanent reception as such token for the value stated, the people naturally looked around for some substance which had great intrinsic value within small bulk. It was thus that gold and silver—sometimes also jewels and precious stones— became current; so that money, being virtually under no control of the State, except so far as its coining was concerned when gold and silver began to be coined for convenience, became a power over the State within the State, and a continually growing source of monopolies, that, in point of fact, took away from the poorer class all their rights and privileges by a system of most cunningly exercised brokering and commercial despotism. CHAPTER II. INVENTION OF BANKING. Thus money-brokerage and exchange grew into a despotism more absolute than any other on earth, and has ever since retained this despotic power, which, wielded by men unscrupulous from the very nature of the case, has proved the greatest scourge of the human race. For gold and silver assumed a far greater significance than their own intrinsic value warranted, the moment these metals became the generally acknowledged medium of interchange among nations; since that acknowledgment made them virtually representatives of all the interchangeable commodities on earth, thereby increasing their value in proportion as this interchange increased. Thus, with the growth of trade, commerce, and manufactures, the money-power assumed enormous proportions, and under the agency of shrewd men could be handled with terrific effect. The histories of Carthage and Tyre, of all the great "free" commercial cities of the Old World, of Phonicia, Babylon, Egypt, Greece, and Rome, are nothing but histories of the despotism of men and money-corporations that knew how to use skilfully this potent agency; and in later times the same phenomena reappeared in the "free" cities of Northern Italy, Venice, Genoa, and Milan, where a few capitalists ruled with quite as severe a rod of tyranny as any emperor or king of history; nay, often even braving the whole power of emperors and kings, as the Rothschilds are able to do in the present age. But, as Europe began to advance in civilization, all the gold and silver attainable were not sufficient, even at the fabulous value to which they had been raised, to carry on the necessary business of this new-grown commercial world, and it was the necessity to provide for this state of things which led men's minds gradually to a proper notion of the true nature of money, by inventing banking and exchanges. Through this invention the commercial world was supplied with a vast accession to the amount of money current in gold and silver, an accession which stimulated and made possible the extraordinary commercial activity of that period, and the adventurous undertakings to which it gave rise. The discovery of America, and the vast amounts of additional gold and silver or money thereby obtained, assisted still further to extend this prosperity in commerce, trade, and exchanges. СНАРТER III. CREATION OF MONEY OF ACCOUNT AND OF STATE DEBTS. But still the State refrained from interfering with this enormous power of the moneyed monopolies. Within the political States of Europe there were thus always two other despotisms besides that of the government itself: the hierarchical and the despotism of money; and under the three the people were left little of their natural liberties and rights indeed. It seems strange that no State ever conceived the plan of taking that tremendous power of money out of the hands of the financiers by establishing a money of its own; but even to-day the old state of things continues, in a measure, as it has been shaped by circumstances and innumerable contradictory individual theories and efforts. John Law, it is true, induced France to adopt a policy of national bank paper money; but the attempt to give it a coin basis, joined with other schemes for private speculation, caused its failure in a sudden panic. Thus, for a long time, the private financiers of Europe alone had the power to increase the supply of currency by the banking system, using drafts and letters of credit as representatives of money at different points in the world; the whole system depending, however, upon constant renewal and extension, and hence constituting those drafts and letters of credit, real money in all respects, or, as it is called, money of account. The modus operandi in which banks manage to effect this interchange of money, without using the "real" money supposed to be at the base of it, I cannot describe better than by quoting from an article in a recent number of Blackwood's Magazine on "The Rate of Discount." After referring to the fact that Sir John Lubbock, in analyzing the nineteen millions of the receipts of the bankinghouse of Roberts & Co., of London, found that only three per cent of these receipts were in cash, the ninety-seven per cent being checks, drafts, and other means of exchange, the writer of that article says: "The mystery of banking, if there is a mystery, will be unravelled by discovering what these ninety-seven things are. What, then, are they? Cheques, bills, dividend-warrants, pieces of paper, which have debts inscribed on them, and empower a bank, if it chooses, to demand and receive the several sums of money mentioned on those papers. Palpably, then, on its receiving side, a bank is a collector of debts. These debts which it has to collect are its resources. These are what it has to pass on and lend to traders. These debts are paid to the bank, beyond doubt; but in what form? In money, the cash which the bank indisputably can demand? By no means. The bank does not ask for money, nor, as to these ninety-seven things, touch it. The mode of settling these debts is quite a different process. The banker, whose aim is profit, finding that he has so many debts to collect, at once authorizes some borrowers on discount to sign fresh pieces of paper with sums of money inscribed on them, fresh cheques, and to buy goods with them, and he, the banker, undertakes to pay these cheques when presented. These two sets of paper - the cheques which the banker received to collect, and the cheques which he empowered his borrowers to draw upon him— meet at the clearing-house, and there cancel each other. The settlement of one set of debts is thus effected by the creation of a second. The final result at the bank-nay, the sole action of the bank is a registry in its ledger of a debt which it owes to its depositor, and of a second, or counter-debt which its borrower owes it in turn. The resources have passed through the bank, have travelled from one set of men to another, and all that they have actually done at the bank in their passage through it is to cause entries to be made under various names. These entries, this action of the bank, required no I cash whatever. They were merely items of accounts, lines in the bank's books, recording, indeed, relations of debtor and creditor,— still in themselves only figures. The cheques were not cash, and were not paid in cash. All these paper orders to pay or receive money are nothing but title-deeds to money,— legal evidence of debt, valid and possessing worth only because, as evidence, they are able to persuade a court of law to send the sheriff to collect the specified money from the debtor; but a title-deed and legal evidence able to obtain possession are not the property itself. Beyond doubt they |