A History of American Currency

William Graham Sumner

The author, William Graham Sumner, was the great sociologist of late 19th century America, but also a wise observer of economic conditions.

In 1874, in the midst of another debate about the future of the American monetary system, he offered this sweeping history of the calamity of paper money in the United States from the Colonial Period to the Civil War. In many ways, it is a popular history in the sense that he hoped it could be read by anyone.

What’s strike here is his “Austrian” understanding of the relationship of paper money to credit cycles, inflation, and corruption. He was a firm advocate of sound money and 100% reserve banking.

His lesson was that paper currency leads to a trap: continued crisis, hyperinflation, or the restoration of sound money. This pattern has been repeated again and again. The burden of this book is to show that there is nothing good to come out of any paper money experiment, and that sound money is the only answer in a free society.

So there is profound historical interest in these pages--he was writing at a time when these issues were debated in all campaigns and classrooms--but also excellent theorizing too. Indeed, this work demonstrates that Sumner was not only a pioneering American sociologist but also one of the great American pre-Austrians of the late 19th century.

A History of American Currency by Sumner
Meet the Author
William Graham Sumner
William Graham Sumner

William Graham Sumner was one of the founding fathers of American sociology. Although he trained as an Episcopalian clergyman, Sumner went on to teach at Yale University, where he wrote his most influential works. His interests included money and tariff policy, and critiques of socialism, social classes, and imperialism.

Mises Daily William Graham Sumner
Who are the classes respectively endowed with the rights and duties of posing and solving social problems? William Graham Sumner says they are as follows: those who are bound to solve the problems are the rich, comfortable, prosperous, virtuous, respectable, educated, and healthy; those whose right it is to set the problems are those who have been less fortunate or less successful in the struggle for existence. The problem itself seems to be, How shall the latter be made as comfortable as the former? To solve this problem, and make us all equally well off, is assumed to be the duty of the former class; the penalty, if they fail of this, is to be bloodshed and destruction.
Mises Daily William Graham Sumner
Any one who wants to truly understand the sociology of production must go and search for what William Graham Sumner called the Forgotten Man. He will be found to be worthy, industrious, independent, and self-supporting. He is not, technically, “poor” or “weak”; he minds his own business, and makes no complaint. Consequently the philanthropists never think of him, and trample on him. The industrious and sober workman, who is mulcted of a percentage of his day’s wages to pay the policeman, is the one who bears the penalty. But he is the Forgotten Man. He passes by and is never noticed, because he has behaved himself, fulfilled his contracts, and asked for nothing.
Mises Daily William Graham Sumner
The great sociologist William Graham Sumner explains how the imperialist wars result in the very opposite of their stated intentions. In this 1899 speech, he demonstrated how the ideals of the US were in danger of being displaced by the ideology the US was supposedly fighting. “We have beaten Spain in a military conflict, but we are submitting to be conquered by her on the field of ideas and policies. Expansionism and imperialism are nothing but the old philosophies of national prosperity which have brought Spain to where she now is. Those philosophies appeal to national vanity and national cupidity.... They are delusions, and they will lead us to ruin unless we are hardheaded enough to resist them.”
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Henry Holt and Co., 1874