Organization of Debt into Currency and Other Papers
by Charles Holt Carroll
Table of Contents
Little is known of Charles Holt Carroll (1799-1890), the author of the thirty-six
essays reprinted in this book. In the list of contributors in Hunt's Merchants'
Magazine, where many of these essays appeared, Carroll is described as "A Merchant
of Massachusetts." There are, of course, such scattered bits of information in business
directories and newspapers as may be found for many nineteenth-century businessmen,
but even when these are combined with the remarks he drops about himself in his
essays, only a shadowy figure of a man emerges. One would like to know more about
this merchant who wrote so vigorously on the currency question.
Carroll seems to have had no close associates. Possibly he was regarded as eccentric.
In any event no one troubled to write his biography, and the members of his family
did not bother to preserve his personal papers. Despite his claim to having discovered
no less than three new truths as to the effects of paper money in an essay written
in 1859, those around him evidently did not think he would achieve renown. It now
appears that Carroll might have made broader claims, for in the aggregate his writings
contain an abundance of interesting ideas.
Although Carroll insists upon a fresh approach to the currency problem, he is emphatic
that his findings are based on accepted economic doctrine. He pauses frequently
to praise the developing science of political economy, whose laws he insists are
universally valid. He appears to have been a moderately careful student of Smith
and Mill, and he was strongly, if not violently, anti-interventionist and antiprotectionist.
On currency matters he was not a slavish follower of classical thought. Rather,
he pursued his own path, rejecting, for example, Smith's dictum that an economy
is realized by substituting paper money for the precious metals. He also quarrels
with Mill's view that all forms of credit have the same effect. Yet in fundamental
matters, such as the nature and source of value, Carroll adheres to orthodox teaching.
Carroll's outright rejection of the ideas of Henry C. Carey is indicative of his
There were, to be sure, other antibank and hard-money men in the middle of the nineteenth
century, but, unlike some, Carroll was not content simply to repeat the slogans
of the antibank faction of the Jacksonian era. He undertook to provide a reasoned
argument for opposing banks, using the doctrines of the political economists; and
while others had attempted to supply such a rationale, Carroll was possibly the
most able. His analysis of a fractional-reserve banking system contains penetrating
insights; and although the economic scene has changed, much of what he has to say
is still pertinent. Our money continues to be that same debt currency that Carroll
abhorred. Even if one is not prepared to agree with all of his analysis or to accept
any of his policy conclusions, one must admire the work of this nineteenth-century
businessman who was unafraid of new ideas. The freshness of his views and the vigor
of his style make these essays a pleasure to read.
An obituary in the Boston Evening Transcript of February 25, 1890, states that Charles
Holt Carroll was born in Maryland in 1800 and belonged to the same family as Charles
Carroll of Carrollton, signer of the Declaration of Independence. The Newton Journal
of February 28, 1890, repeats this claim. In fact, however, Carroll was born October
25, 1799, in Charlestown, Massachusetts, of sturdy New England stock which can be
traced back to the early 1600's. It is uncertain who fastened to Carroll this American
substitute for aristocratic lineage. There is no doubt that he did live in Maryland
as a young man.
Possibly he went to Baltimore as a youth, but there is no direct evidence of his
presence there until 1829. A number of young men named Charles Carroll attended
St. Mary's College in Baltimore during the years when Carroll would have been of
student age. It could hardly have been he who signed "Charles H. Carroll" in the
Degree Book of St. Mary's College, July 2, 1813. That would mean that he earned
the degree of A.B. when but thirteen years old. But when Carroll remarks in one
of his many diatribes against the Bank of England that it was founded by the Protestants
as part of the effort to displace the Stuarts, he may be revealing that he learned
his history from a Roman Catholic teacher, as he certainly would have if he had
been of the Maryland Carrolls. This, however, belies the Protestant background of
his parents. Nor does it harmonize with the fact that Carroll's funeral was conducted
by a Unitarian clergyman. In any event, Carroll's style of writing suggests that
he had been trained under firm-handed schoolmasters. His thought is clear, his ideas
are well organized, and his language is forceful. There are frequent classical allusions
in his essays, but there is little of the excessively flowery style of the period.
Although his eldest son attended Harvard, there is no record that he himself did.
Carroll, of course, may have been self-educated. If so, this might account for his
frequently expressed scorn for closeted scholars. He says that only men who have
had practical experience are qualified to speak on the question of the currency.
One cannot be sure what meaning attaches to the aspersions he casts on scholarly
deduction. While he does insist on first-hand knowledge of currency matters, he
does not deny himself acquaintance with the writings of the political economists.
At every opportunity he bolsters his views by appealing to their authority, although
he does not hesitate to challenge them on doctrinal points.
The meager information about Carroll's life provides slight clue to the source of
his ideas. By means of business directories it is possible to trace his career as
a merchant. He first appears in 1829 under the listing "Commission Merchants" in
Baltimore. Subsequently the listing is "Dealer in Shoes, Hats, and Straw Goods."
Beginning in 1840 his name appears jointly with George W. Tinges, who evidently
continued the firm's business under his own name when Carroll moved to Boston in
1849. Possibly Carroll's marriage in 1832 to Rebecca White of Cambridge, Massachusetts,
has a bearing on the family's moving to Boston, but either family ties or business
opportunity could account for the transfer. In any event, Carroll's residence for
the next fifteen years was Cambridge, Massachusetts. One may amuse himself by speculating
that Carroll may have been inspired to take up the writing of essays by observing
the careers of some of his illustrious Cambridge fellow townsmen. While no evidence
has been found to suggest that Carroll moved in the same circles as the Cambridge
literary figures of the 1850's, Carroll's writing did begin about five years after
he had established himself as a merchant in Boston with a residence in Cambridge.
Charles H. Carroll is listed among "Boot, Shoes, and Leather Dealers, Wholesale"
in several Boston business directories beginning in 1850. The last entry in the
series is for 1860, when the firm becomes Thayer and Carroll, suggesting that a
partnership had been formed in anticipation of Carroll's retirement. It is clear
that he had retired before he moved to West Newton, Massachusetts, in 1865, and
he may have retired as early as 1860. The latter possibility is suggested by the
change in the firm's name and by his no longer being described as a merchant in
the list of contributors to Hunt's Merchants' Magazine after 1860. At that time
he would have been sixty years old, not an uncommon age for retirement from business.
Carroll was undoubtedly engaged in business for at least thirty years. Frequent
references in his writings to overseas transactions in hides suggest that his Boston
business was the supplying of raw materials to the shoe industry. How successful
Carroll was as a businessman can be only a matter of conjecture. We know that he
retired from business, but this could be accounted for by business success or by
marriage or by inheritance. We know that he built a home when he moved to West Newton.
That he was able to live without employment presupposes at least a modest amount
There were apparently eight children in the Carroll family. The oldest, a son named
for his father, was born in Baltimore in 1832 and graduated from Harvard in 1853.
This was the Charles Carroll who was professor at the University of the City of
New York from 1871 to his death in 1889 and who contributed a number of articles
and some verse to popular magazines in the seventies and eighties. Another son,
Arthur, went into business. We find him listed as a merchant on India Wharf and
later as a dealer in mortgages and real estate. One son was killed in the Civil
War, and one was an invalid. One of the daughters, Kate, founded the Carroll School,
which is still operating in West Newton under that name. Another daughter, Blanche,
married into the Howland family, who were paint manufacturers and dealers. Bertha
became principal of a girl's school in Boston, and little seems to be known of the
fourth daughter, Anna, who went to New York after her marriage to Richard Baring
Gould, except that she had already died when her father made a will in 1884. Carroll's
wife, Rebecca, outlived him by more than ten years. Carroll's only reference to
his family is his frequently repeated complaint of the costliness of the then fashionable
crinolines, which he condemned as an absurdity.
No evidence has been found that Carroll was active in community affairs. Following
his removal to West Newton, when he might have been expected to devote some of the
leisure of retirement to local activities, he seems to have kept to himself. West
Newton had an active literary society, The West Newton Athenaeum, which met weekly
to discuss and debate the popular issues of the day. Its meetings were reported
regularly in the local weekly for the period 1866-1876. Yet, for this ten-year period,
only one reference has been found to Carroll's expression of an opinion. This occurred
during a debate on the question, "Resolved that the interests of the country require
a liberal encouragement of immigration." The reporter says: "Mr. Chas. Carroll. . . .
advocated the let-alone policy as the best and contended the government interfered
too much in like matters." This sounds characteristic, for Carroll was consistently
anti-interventionist in his thinking.
Charles H. Carroll's name is not listed among the subscribers to the Newton Free
Library, which was organized about 1870, but his son, Arthur, is later listed among
the directors. However, only a few persons in West Newton were among the organizers,
and the several miles that separate the two towns were then a greater barrier than
would be the case today. No mention of the Carrolls is made in any of the several
local histories of West Newton. Carroll's name does not appear in the list of
those West Newton residents who in 1869 paid $500 or more in local taxes. His near-by
neighbors, according to the local directory, were a male stenographer, a teacher,
an editor, and a bookkeeper. The best-known resident of that section of West Newton
was probably Horatio King, Postmaster General in the Buchanan administration, but
there is no evidence that Carroll and he were associated in any way.
Lack of information that Carroll was a leader or even an active participant in the
intellectual life of West Newton makes plausible the assumption that he busied himself
with his books and his writing. He must have possessed a modest library, for he
cites no less than three dozen authors. In 1871, the local library listed among
its 3,100 volumes only four works on political economy: those of Adam Smith, Thomas
De Quincey, John Stuart Mill, and Jean Baptiste Say. In one of his papers, Carroll
remarks that he has before him twenty years of the Statistical Abstract of the United
Kingdom. Elsewhere he professes to have examined with care Hansard's Parliamentary
Debates for materials on the 1844 Bank Act, and he writes as if he were a regular
reader of the London Economist. There may be some doubt that Carroll read all the
writings of all the writers he mentions, but it does seem that he was a diligent
student of the political economists of his day, that he was something of a student
of history, and that he was well informed on current affairs.
This is about all that can be said about Carroll's life. It helps only slightly
in understanding Carroll's ideas. Yet there is some value in knowing that Carroll
was neither a political figure nor a banker nor even a college professor.
A search of the periodicals of Carroll's day yielded the thirty-six essays reprinted
in this book. It did not yield the paper Carroll refers to in "The Currency and
the Tariff," published in August, 1855. Both L. W. Mints and H. E. Miller describe
Carroll as having contributed numerous papers to Hunt's Merchants' Magazine and
to Bankers' Magazine in the period 1856-1860, although in fact Carroll's writing
began at least in 1855 and continued until 1879. It is quite possible that other
writings of Carroll remain to be discovered.
The accessibility of the appraisals of Carroll's early writings by Mints and Miller
makes unnecessary a detailed review of the essays written before the Civil War.
The resume of his writings that follows is intended only to direct attention to
some of the more interesting of Carroll's ideas.
In the first paper that has been found, "Currency and the Tariff," Carroll sets
forth the theme on which he dwelt for almost twenty-five years, namely, that a currency
created out of bank debt contains, as he put it, "a fatal principle." His minor
theme, that protectionism is an intolerable burden on productive activity, also
appears in the first essay. This, too, recurs in later essays. His tendency to repeat
himself leads one critic to treat him harshly, but Carroll himself warned his readers
that he was given to saying over and over again what he regarded as important.
While reading these essays one after another emphasizes their sameness, it must
be remembered that they appeared over a period of twenty-five years. Moreover, Carroll's
approach was that of a would-be reformer of social institutions and not that of
the writer of a treatise.
What he had to say is still of interest despite changes in the economic environment.
In emphasizing the significance of bank deposits, he was well in advance of his
contemporaries. Although he was not the first to perceive that bank demand deposits
are money, he made clearer than almost anyone else the fact that these deposits
arise from the making of bank loans. In observing that bank notes usually come into
use through the withdrawal of previously created deposits, Carroll seems to have
anticipated the modern view that monetary control should be directed at deposits
rather than at bank notes. Indeed, Carroll makes this point explicitly. Carroll
is most eloquent in describing the process of deflation and in pointing out its
potentialities for destroying the fabric of business. He shows with vigor and clarity
how universal ruin may threaten an economic system where the circulating medium
consists of bank debts resting on short-term business indebtedness to banks. It
is here that Carroll shows that he fully understood the working of the financial
mechanism upon which we still depend.
Although almost all writers of the day laid the blame for panics on the banking
system, few saw with Carroll that monetary expansion and contraction were the basic
cause. John Stuart Mill's influence was very great, and Mill espoused the Banking
School view that the banks were essentially passive. Only a person of Carroll's
independence of mind would dare to question Mill's doctrine that it was the use
of credit for so-called "speculative purposes" that brought on collapse and panic.
Carroll emphatically denied that limiting bank lending to "legitimate" uses would
prevent crises. His position was that market forces would serve to allocate capital
appropriately among alternative uses provided that the linkage between money-lending
and money-creating were severed. He opposed the regulation of bank lending or, for
that matter, any sort of lending. Carroll was thus one of the few nineteenth-century
economic spokesmen who wrote meaningfully on competition in banking.
Down to the time of the Civil War, Carroll was hopeful that improvement in monetary
affairs could be achieved by persuading the State legislatures to abandon the chartering
of banks. He makes abundantly clear his doubts that the States actually possess
this power despite the Supreme Court's having ruled that State bank notes are not
bills of credit and thus do not fall under the Constitutional ban on state issue
In this early phase of Carroll's thinking he placed great emphasis on the voluntary
establishment of what he called "bullion banking," meaning banking with adherence
to the 100% principle. He argues that a trial of this system would prove so successful
that note-issuing, fractional-reserve banks would disappear. He attempted to show
by arithmetical examples that a bank that maintained 100% reserves would not be
unprofitable. Savings banks, he thought, demonstrate that the power to issue debt
claims that circulate is not indispensable to a moneylending institution. He had
great hopes for the Bullion Bank of New York, the organization of which was publicly
announced in 1859, but which apparently never began operations. During the Civil
War, Carroll abandoned his faith in voluntary action. He urged the suppression of
fractional-reserve banking by punitive Federal taxation. In matters of money he
did not fear coercive action by political authority, although in other areas he
was vigorously anti-interventionist in his economic philosophy.
Carroll's views on monetary reform underwent modification in consequence of the
financial changes wrought by the Civil War. His basic tenets, opposition to bank-debt
currency and to protectionism, remained unaltered, but in presenting in 1863 an
outline of an ideal monetary system, he developed some novel ideas. He said that
only full-bodied coins and fully backed coin certificates should be permitted to
circulate. Bank-debt currency should be eliminated entirely. For the accommodation
of persons having small payments to make at a distance, Carroll suggested that the
postmasters be authorized to sell drafts on the subtreasuries. Postal money orders
were in fact introduced about a year after this article appeared, but Carroll had
been talking about such drafts since 1858. The most interesting feature of his drastic
reform plan was the proposal to eliminate the dollar as the monetary unit. He wanted
to replace it with the troy ounce. Carroll reasoned that this change was required
to destroy the illusion that it is possible to create dollars out of paper and give
them value by some legerdemain. To him the only money that genuinely possessed value
was specie. That alone had productive effort embodied in it to the same extent as
the things for which money is exchanged. Carroll was firmly convinced that the basic
monetary fallacies, such as the idea that paper money is wealth and that interest
can be lowered by printing money, have their origin in the fact that the monetary
unit has become separated from the monetary substance.
The proposed reform was to return to the monetary practice of an earlier time when
the monetary unit was actually a unit of weight of precious metal. The troy ounce
seemed to Carroll to be the logical unit to replace the dollar, which he held was
fundamentally defective in that it did not even represent in the mind of the public
any specific amount of specie. In subsequent papers Carroll did not urge this particular
reform, but he continued to insist that the only form of nonmetallic currency that
should be tolerated was the fully backed coin certificate issued by the government
itself. As might be expected, he approved of the gold certificate that first appeared
during the Civil War, although this new form of currency actually was not in widespread
use because it commanded a premium over the greenback.
Carroll never tired of inveighing against "paper money," which to him meant any
kind of circulating media not backed 100% by specie. One of his arguments against
paper money is that the holder of a note in effect gives up command over capital
to the issuer and thus really makes an interest-free loan. He applies this idea
to the Civil War greenbacks, showing how their issue enabled the government to obtain
resources to carry on the war. He also applies the same reasoning to bank deposits,
insisting that it is the bank's depositors that furnish capital to the bank rather
than the bank that supplies capital to its customers. While Carroll did not press
on to develop the idea of forced saving, the distinction that he attempted to make
between capital in money form and in the form of wealth is central to that concept.
In one of the essays published during the Civil War Carroll does concede that if
paper money is to be used at all, it should be issued by the government and not
by banks. Despite this grudging concession, at the war's end he urged the prompt
resumption of specie payments. Fearful of the effects of a drastic fall in prices,
which he noted Ricardo had failed to foresee after the Napoleonic Wars, and which
many in this country felt must come if resumption was to become a reality, Carroll
toyed with the idea of adopting a dual currency system. Under his proposal all existing
contracts and obligations would be satisfied in greenbacks, but all new undertakings
would be entered into on a specie basis. Although his arguments against deflation
are persuasive, he fails to make clear how the two currencies could circulate side
by side. In subsequent discussion of resumption he abandons the idea and takes the
position that the stock of money is in excess of the nation's needs and therefore
might safely be contracted without inducing the drastic fall in prices that he had
feared. It is here that he returns to the idea of a fixed per capita stock of money
that he had advanced in his early writings.
Basically Carroll was a metallist rather than a nominalist in his approach to the
nature of money. He regarded anything but metallic money as a fiction, leading inevitably
to disaster. Contrary to Knapp's dictum that money is a creature of the state, Carroll's
view is that money arises from exchange between producers and gets its purchasing
power and its capacity to circulate from the commodity out of which it is made.
Like the classicists, he held that value is derived ultimately from labor. Therefore,
only a commodity money could embody value in the sense of containing within itself
the crystallized effort of past production. Carroll does not deny that debt money
can circulate, but he insists that inflation and inevitable collapse will follow
any attempt to substitute inherently valueless tokens for metallic money. Carroll,
however, does not fall into the error that has commonly been made by metallists
of holding that the precious metals are constant in value. In discussing the outpouring
of gold from California, he makes clear that any increase in the ratio of gold to
other commodities must lower the value of gold. At heart he was a quantity theorist,
if of a low order. In this he differs from many who have insisted on a gold currency.
Contrary to what might be expected, he does not make the value of money turn about
the cost of producing gold.
Carroll was not a sophisticated quantity theorist. He recognized the V and the T
terms of the equation of exchange, but he made no effort to go beyond Mill's simple
statement of their nature. He did, however, set forth some interesting views about
the rate of flow of currency in the economic system. He makes much of the idea of
an invariable normal relationship of 1 to 25 between total currency and total wealth
or property, terms which are used by him without distinction. The basic idea he
attributes to John C. Calhoun. Although Carroll makes use of this idea repeatedly,
he never explains why this ratio exists. To him it is a simple empirically determined
relationship. He also held that a similar normal relationship of 1 to 10 holds between
total currency and total circulating capital. This seems to have been of his own
invention. Again he fails to make clear why this ratio is constant. Carroll does
not deny that there are departures from these normal values, but he insists that
they are useful empirically to determine if the currency is in excess. Since he
explicitly recognizes the phenomenon of hoarding, it is clear, at least by inference,
that he recognized that velocity is a variable. But Carroll can hardly be said to
have contributed to the understanding of the phenomenon of velocity.
The three words, "price without value," which Carroll never tires of repeating are
the key to his thought. His central idea was that currency generated by bank lending
pours forth only to drive up prices without creating additional value. This he found
philosophically repugnant because it involved a fiction; more important, he held
that the rise in prices was only temporary and inevitably culminated in collapse
and wholesale bankruptcy. When the banks attempt to collect the loans that generated
the currency that drove up prices, debts contracted when prices were high would
be defaulted, and ruin would descend. The burden would be heaviest upon the merchant
group, because they are accustomed to financing themselves by borrowing at banks.
Carroll describes in great detail the effects of alternately expanding and contracting
the currency, pointing out the effects of price changes on the distribution of wealth
and income and also condemning the transfers of property that accompany bankruptcy.
He observes that creditors are frequently defrauded by bankrupts, and this type
of loss must be added to the losses assignable to changes in the value of money.
A further consequence of debt-currency expansion is to check exports by raising
the prices of domestically produced goods to a level where foreigners find them
unattractive. Imports flow in despite the tariff wall erected to protect domestic
industry, and specie flows out. The effort to strengthen the nation's currency through
adopting a policy of protectionism consequently produces precisely the opposite
of the intended effect. Moreover, the monetary expansion that accompanies the early
phase of the sequence of events serves only to weaken the credit structure. Collapse
with an inevitable wave of bankruptcies follows, even if with a lag, each expansion
in the currency. This is the theme of the first essay, and it recurs again and again.
Toward the end of the series of essays Carroll takes up some of the special problems
of international finance when he considers the effect of resumption on the nation's
gold holdings. In discussing the mechanism of specie flows, he finds it necessary
to develop a theory of foreign exchange rate determination. His explanation sounds
much like the purchasing power parity theory advanced by Gustav Cassel. That is,
changes in relative prices in the two countries account for changes in the exchange
ratio of their currencies. Carroll, however, rejected the idea that the balance
of trade determines the exchange rate. He saw clearly the importance of elements
other than commodity transactions in the balance of payments, and his discussion
of exchange rate behavior in connection with the problem of retaining metallic money
shows an awareness of the central issues. To contemporary students it may seem puzzling
to find Carroll saying that the exchanges are at par when the premium on London
is 9½ per cent, but this is no barrier to understanding the fundamentals.
Carroll's interest in exchange rate theory grows in part out of his antiprotectionism.
In several of the papers written after the Civil War he attempts to show that the
nation need not rely on a high tariff to build up its gold holdings preparatory
to resumption of specie payments. This leads him to comment on the revenue aspects
of the tariff. After denouncing the tariff because it interferes with economic specialization,
he undertakes to develop the argument that raising revenue through import duties
results in allocating the burden of taxation inequitably. As in his discussion of
specie flows, his analysis runs in terms of the shifts in relative prices required
to achieve a new equilibrium once something has occurred to change an existing pattern
of resource utilization. Carroll unquestionably saw clearly the distinction between
general price changes and relative price changes, and he certainly understood the
importance of relative price movements in shifting from one equilibrium to another.
Carroll's explanation of why high interest rates and high prices occur together
reminds one of Keynes' discussion of what he called the Gibson paradox. It was
Carroll's opinion that the explanation was to be found in the use of bank debt as
currency. In order to get banks to acquire the paper tendered by businessmen, that
is, to make more loans, higher interest rates are required. The additional money
created in the lending process forces up commodity prices. Carroll thought in terms
of a model in which interest is the price paid for debt claims. It will be noted
that this approach to interest theory is employed by some contemporary theorists,
and Carroll deserves credit for making an ingenious suggestion.
Carroll was tireless in blaming the Bank of England for introducing fractional-reserve
banking, although he is careful to point out that at first the practice was restricted
to note issue. In no less than twenty of his essays Carroll has occasion to speak
harshly of the Bank of England for the part it played in demonstrating to the world
that banks may operate with fractional reserves. In one place, as was noted earlier,
he uses as the basis of his criticism the Protestant origins of the Bank, but ordinarily
he attempts to rest his case on analytical reasoning. Carroll urges that there is
no necessary reason for America to copy slavishly European financial practices,
which on occasion he holds as unacceptable as European political practices. Here
his American patriotism comes to the surface. Carroll was one of that group of midnineteenth-century
Americans who saw a vision of a genuinely new social order. But Carroll was not
above using European examples to bolster his case when that was convenient. The
final essay, for example, lauds France for sticking to the use of gold coins as
a medium of exchange. He was not always consistent, but few reform-minded persons
On two matters of banking theory which were widely discussed in the nineteenth century
and which are still of interest, Carroll expressed himself with characteristic originality
as opposed to the dominant view of his day. He ridiculed the idea that real bills
are preferable to other kinds of bank assets, and he rejected the notion that elasticity
in the currency is necessary. On both these matters the discussion is brief, but
the clarity with which the subject is treated leaves no doubt that Carroll has a
just claim to recognition. Here, as in his observation that a war debt's burden
falls on the present generation, the treatment is such as to indicate that Carroll
could see beneath the veil of money.
The editor may possibly be forgiven for refusing to say just where Carroll should
rank among nineteenth-century monetary theorists. Clearly, if one may judge from
the paucity of references to his writings, Carroll never became a major prophet.
Along with a surprising number of other nineteenth-century Americans whose ideas
are not markedly inferior to current thought, Carroll is known only to those familiar
with the history of monetary and banking theory. But even such excellent studies
as those of Mints and Miller leave one unaware of much that Carroll wrote.
In his own time, his writings did not go wholly unnoticed, as is shown by the comments
evoked from other contributors to Hunt's Merchants' Magazine. Despite Carroll's
vigorously expressed ideas on national financial questions, we have no evidence
that he influenced public policy. Those who criticized his views are no better known
than he is. One obstacle to the wider diffusion of his ideas springs from the
fact that he left behind no books. Any writer who limits himelf to essays in periodicals
risks being soon forgotten. A further possible factor is that Carroll's ideas were
both too orthodox and too radical. When explanations were sought for the financial
distress after the Civil War, mass support could easily be mustered for programs
that required no understanding of the subtleties of monetary theory.
Despite the apparent neglect of Carroll's ideas by his contemporaries, they are
important enough to justify their being disinterred from the yellowed pages of the
journals where the essays first appeared. Carroll's proposals for monetary and banking
reform may have no greater chance of adoption now than when he wrote, but no one
can deny that the financial problems with which he concerned himself are still unresolved.
One essay, "The Monetary Unit and Financial Economy," has been included in this
book even though it lacks Carroll's signature. The paper that preceded it foretold
its coming, and its content leaves slight doubt that it is from the pen of Charles
Holt Carroll. Occasional changes of spelling and punctuation have been made to facilitate
reading. Otherwise the text is unchanged.
To a number of people thanks are due for assistance in preparing this collection
of the writings of Charles Holt Carroll. Deserving particular mention are: Mrs.
Catherine J. Pierce, Duke University Library; Miss Rosalie A. Lang, Boston Public
Library; and Miss Elizabeth C. Litsinger, Enoch Pratt Free Library, Baltimore. Valuable
assistance was also rendered by members of the staff of the Library of Congress
and of the New York Public Library. My wife, Glenna Sherman Simmons, assisted me
in my efforts to trace Carroll's family background. Mr. Richard H. Nolan of Boston
deserves special mention for his assistance in searching official records. My heaviest
obligation, however, is to my colleague, Professor Robert S. Smith of Duke University,
who provided wise counsel.
EDWARD C. SIMMONS
Durham, North Carolina October 20, 1961
Cf. L. W. Mints, A History of Banking Theory (Chicago: University of
Chicago Press, 1945), p. 161. An account of the ideas of the period is given by this author.
His parents were Jared Carroll and Elizabeth Holt. See Charlestown
Births  1800-1843, Vol. II, pp. 22-23 (record deposited in Bureau of
Vital Statistics, City of Boston). Until about 1800 the spelling of the
family name varied among New England families. There were six
younger children in the family.
The following directories list Carroll's name:
Matchett's Baltimore Directory, 1829-1849/50; The Boston Directory (Geo. Adams), 1855-1860;
The Boston Almanac (Coolidge and Wiley, Mussey), 1850-1860; The New
England Business Directory and Gazetteer, 1856-1860; The Cambridge
Directory, 1849-1863/64. The Newton Directory, 1871-1891, allows one to
establish Carroll's whereabouts following his retirement.
Carroll's marriage is listed in
Cambridge, Massachusetts, Vital Records to 1850. The birth of the eldest son is also given.
The names of the other children (except the son, Howard, killed in the Civil War) are given
in the will of Charles Holt Carroll, which is filed at the Middlesex County Mass.)
Courthouse, Cambridge, Mass. The eldest son, Charles Carroll, was graduated from Harvard
College in 1853. In connection with the family's moving to Cambridge, it is interesting to
speculate on the identity of the "Charles Carroll of Maryland" mentioned in an 1849
letter of Amos Lawrence. See William R. Lawrence, Extracts from the Diary and Correspondence
of the Late Amos Lawrence (Boston: Gould and Lincoln, 1856), p. 276.
During the 1870's the Newton Directory lists the
occupation of Charles H. Carroll as "merchant," but this does not ring true. No business
address is given. Nor do Carroll's writings suggest that he was actively engaged in business
after the early 1860's.
Leather dealers were numerous in the 1850's.
Ninety-five names are given in the 1860 edition of the New England Directory and Gazetteer
in its Boston section under this heading. Interestingly, Amasa Walker, whose ideas and
Carroll's are strikingly similar in many respects, was of a family engaged in the leather
trade. See Seth Bryant, The Shoe and Leather Trade of the Last Hundred Years
(Boston: Author, 1891), p. 43. Whether or not Carroll and Walker were personally acquainted
is not apparent from Carroll's treatment of Walker's ideas in "The Currency Theories of the
At his death Carroll's estate amounted to only a
few thousand dollars, but this is not necessarily indicative of his financial position thirty years
earlier. It is conceivable that Carroll may have experienced financial difficulties before
he retired but managed to preserve enough of his wealth to live in comparative ease. He
makes so frequent mention of bankruptcy as to make one wonder if he himself did not
experience it. The leather trade was very hard hit by the panic of 1857. Carroll himself
mentions failures of leather dealers in "Financial Heresies." See "The New York Hide Market
in 1860," Hunt's Merchants' Magazine, XLIV (July, 1861), 42-44. There is, however, no
direct evidence that Carroll failed in business. A search of petitions in bankruptcy filed
before the Massachusetts Court of Insolvency at the Sussex (Mass.) Courthouse did not
support the hypothesis, but these records are not indexed and may not be complete.
This is somewhat confusing, for both the father
and the son were writing about the same time. The father, however, always signed himself
"Charles H. Carroll"; "C. H. Carroll"; or "C.H.C."; the son, simply as "Charles Carroll."
The following items seem to be from the son's pen: "A Tramp with Tyndall," Scribner's
Monthly Magazine, V (Dec, 1872), 182-190; "Paying Debts," ibid., VI (Sept., 1873), 665-670;
"Renunciation" (poem), ibid., XII (June, 1876), 187; "Concerning Cheapness," ibid., XIII
(Jan., 1877), 314-317; "New York in Summer," Harper's New Monthly Magazine, LVII (Oct.,1878),
689-704; and "Narraganset Pier," ibid., LIX (July, 1879), 161-177. See also Charles
Carroll (ed.), The Salon: A Collection of the Choicest Paintings Recently Executed by
Distinguished European Artists. Edited by Professor Charles Carroll, Assisted by Rene
Doloreme, Armand Silvestre, Gaston Boelschy, and Other Foreign Experts. 2 vols. (New York:
S. L. Hall, 1881). An obituary for Professor Charles Carroll appeared in the New York Daily
Tribune, Feb. 16, 1889 (p. 2). This states that Charles Carroll wrote musical articles for
the New York Mirror for the previous two years, that he was professor of German and French,
and that he was versed in Latin, Greek, and Italian. That he had a scientific bent is
suggested by a long letter to the New York Daily Tribune, Oct. 9, 1881 (p. 5) concerning
electrical machinery at an international exposition.
Newton Journal, Jan. 18, 1868, p. 2.
See Samuel F. Smith, History of Newton,
Massachusetts (Boston: American Logotype Co., 1880); Lucy Ellis Allen, West Newton Half a
Century Ago (Newton: Graphic Press, 1917); The Mirror of Newton Past and Present (West Newton:
The Newton Federation of Women's Clubs, 1907). The leading family appears to have been the
Aliens, who operated the Newton English and Classical School, which is described in
Catalogue of the West Newton English and Classical School, 1883 (Boston: Warren Richardson,
1883). One of the Carroll daughters, Bertha, is listed as a former student.
Carroll cites the following: President John Adams,
Francis Bowen, John Gr Calhoun, Henry Ct Carey, Michael Chevalier, George S. Coe, Charles
D'Avenant, Thomas De Quincey, Thomas Doubleday, Ralph Waldo Emerson, Edward Everett,
John Francis, John Fullerton, Albert Gallatin, J. W. Gilbart, Michael Godfrey,
William Gouge, James Guthrie, Joseph Harris, Samuel Hooper, Joseph Hume, H. J. Klaproth,
William Lawson, James A. Lowell, Charles Mackay, J. R. McCulloch, John Stuart Mill, Lord
Overstone, Francois Quesnay, David Ricardo, J. B. Say, Adam Smith, Goldwin Smith, Richard
Sulley, Henry Thornton, Robert Torrens, Amasa Walker, Daniel Webster, and David A. Wells.
Catalogue of the Newton Athenaeum Library, 1871
(Boston: Kingman, 1871). It is possibly significant that only the first ten volumes of
Hunt's Merchants' Magazine are listed in the catalog. Bankers' Magazine is missing entirely.
Carroll's writings would thus have been entirely inaccessible to anyone dependent on the
resources of the Newton Library.
See L. W. Mints, A History of Banking Theory
(Chicago: University of Chicago Press, 1945), pp. 128-129, 135-138, 155-157, 161, and 298.
Also see H. E. Miller, Banking Theories in the United States before 1860 (Cambridge: Harvard
University Press, 1932), pp. 37, 53, 65, 71, 118-119, 140, 176, 195, and 229. Charles H.
Carroll is not mentioned in Joseph Dorfman, The American Mind in American Civilization
(New York: Viking Press) in the sections on monetary writers of the nineteenth century in
volume II (1946) or in volume III (1949). Nor is there any reference to Carroll in Fritz
Redlich, History of American Business Leaders, Vol. II, Pt. ii, The Moulding of American
Banking, Men and Ideas, 1840-1910 (Ann Arbor: Edwards Brothers, 1951). Carroll's name is
also missing from the standard biographical dictionaries.
Carroll's obituary in the Boston Morning Journal
(Feb. 26, 1890) states that he wrote on bimetallism, but this has not been possible to
substantiate. Carroll showed no interest in this topic up to the last of the essays in this
book, and when it appeared, he was eighty years old. I surmise that his health began to fail
about this time. After 1879 the Newton Directory entries indicate that he was no longer
head of the household.
H. E. Miller, op. cit., p. 37 n. On the
whole, however, Miller's appraisal of Carroll is not adverse.
Bankers' Magazine during 1859 printed
several items about the Bullion Bank, one an article from the New York Evening Post which
spoke in an approving tone. The prospectus for the bank, together with the names of the
incorporators and the seventeen directors may be found in Bankers' Magazine, XIII (Dec,
1858-April, 1859), 409, 440-449, 757-760, 821. See also Hunt's Merchants' Magazine, XL
(Feb., 1859), 203-204. Among the organizers of the Bullion Bank the name of George Opdyke
stands out. On Opdyke, see L. W. Mints, op. cit., pp. 127-131, 142-143, 146-147,
153-154. The observation that the bank never operated is supported by the absence of any
record of its activity in the New York State Banking Report, 1860-1863, q.v. (Four separate
annual reports are contained in this volume.)
On the relation of Cassel's doctrine to
nineteenth-century exchange rate theories, see Jacob Viner, Studies in the Theory of
International Trade (New York: Harper, 1937), pp. 379-381. It is not apparent from
Carroll's writings to what extent he was familiar with the exchange rate controversies of
early nineteenth-century England, but in many respects he follows the Bullionist and the
Currency School views.
When Carroll was writing, it was customary
to quote London exchange in terms of the Spanish dollar. This yields a par of $4.44.
Illustrations of the computations involved are given in Thomas P. Kettel, "Mints," United
States Magazine and Democratic Review, XXVII (July, 1950), 54-55.
Treatise on Money (New York: Harcourt Brace,
1930), II, 198-208.
A possible explanation may be the lack of a
comprehensive index of periodical literature for the middle of the nineteenth century. Of
the thirty-six papers reprinted in this book, only fifteen are listed in Poole's Index to
Periodical Literature. Mints, op. cit. lists only ten papers, none of which appeared after
1860. H. E. Miller, op. cit., also lists ten, but three titles differ from Mints' list.
Neither Mints nor Miller cites "Currency and the Tariff," although Poole's Index carries
this title. Miller limited himself to literature up to 1860. It is not clear whether or not
Mints and Miller examined Carroll's later writings.
See Henry C. Baird, "Considerations on Value
and the Precious Metals," Hunt's Merchants' Magazine, XXXIX (May, 1859),570-573; Richard
Sulley, "Money or Currency in Relation to the Principles of Political Economy," ibid.
(Oct., 1869), pp. 374-385.
Richard Sulley wrote numerous papers. He is
mentioned briefly by H. E. Miller, op. cit., p. 89 n.
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