A Short History of Paper Money and Banking

The inferences the intelligent reader must have drawn from what has already been stated, preclude the necessity of much detail in this part of our inquiry.

Wealth is, if independently considered, but one among fifty of the causes of happiness: and poverty, viewed in the same light, is but one among fifty of the causes of misery. The poorest young man, having health of body and peace of mind, and enjoying the play of the social sympathies, in the affections of wife, children and friends, is happier than the richest old man, bowed down with sickness, oppressed with anxiety for the future, or by remorse for the past, having nobody to love, and beloved by nobody.

But though we may, by mental abstraction, consider wealth independently, or poverty independently, neither the one or the other is absolutely independent in its operation. There is no cause in either the physical or the moral world, but which works in conjunction with other causes. Health of body and peace of mind, with the just play of the social affections, may give happiness, independently of wealth: but in extreme poverty, it is difficult to preserve either health of body or peace of mind, and the play of the social affections becomes then a source of misery.

Some little wealth, at least enough for daily subsistence, is necessary for the enjoyment of life and the pursuit of happiness: and hence it is, that the right to property is as important as the right to life and the right to liberty. “You take my life when you do take the means by which I live.”

The majority of men are óf such temperament, that something more than the means of subsistence for the bare twenty-four hours, is necessary for their happiness. They must also have a prospect of enjoying the like means of subsistence in future days. But this is a prospect which, with the reflecting part of the poor, is frequently overcast with clouds and gloom. Few journeymen mechanics are able to make adequate provision for sickness and old age. The wages of a laborer will support him and his family while he enjoys health and while employment is steady: but in case of long continued sickness he must look for relief from the hand of public or of private charity. If he casts his eyes on his wife and children, his dying hours are imbittered with thoughts of the misery which may be their portion. Corroding care is the inmate of the poor man’s breast. It is so heart-withering, that it may be made a question, if the condition of some slaves in the Southern States is much worse than that of many citizens of the other States. The want of liberty is a great drawback on happiness: but the slave is free from care. He knows that when he grows old, or becomes infirm, his master is bound to provide for his wants.

There would be less objection to that artificial inequality of wealth which is the result of unjust positive institutions, if it increased the happiness of one class of society in the same proportion that it diminishes the happiness of another class. But, increase of wealth beyond what is necessary to gratify the rational desires of a man, does not increase his happiness. If it gives birth to irrational desires, the gratification of them must produce misery. Even when inordinate wealth does not give birth to irrational desires, it is attended with an increase of care, and this is a foe to happiness.

With some men, the love of wealth seems to be a blind passion. The magpie, in hiding silver spoons in its nest, appears to act with as much reflection as they do, in piling money-bag on money-bag. They have no object in view beyond accumulation. But, with most men, the desire of great wealth appears subordinate to the love of great power and distinction. This is the end, that the means. They love fine houses, splendid equipages, and large possessions, less for any physical gratification they impart, than for the distinction they confer, and the power they bestow. It is with some, as much an object of ambition to be ranked with the richest men, as it is with others to be ranked with the greatest warriors, poets, or philosophers.

The love of that kind of distinction which mere wealth confers, is not a feeling to be highly commended: but it is hardly to be reprobated, when it is constitutional, and when it is under the government of proper moral principle. In this case, it is a simple stimulus to vigorous industry and watchful economy. With some men, the love of ease is the ruling passion, with others the love of pleasure, and with others the love of science. If the love of riches was not, with many men, stronger than any of the other loves we have mentioned, there might not be enough wealth accumulated to serve the general purposes of society. They may claim the liberty of gratifying their particular passion in a reasonable way: but it is a passion which derives less gratification from the actual possession of a large store, than from the constant increase of a small one. The man whose wealth increases gradually from 100 dollars to 1000, thence to 5000, thence to 10,000, and thence to 50,000, has more satisfaction in the process than he who suddenly becomes possessed of 100,000 dollars. As to the distinction which mere wealth confers, it would be obtained in a state of society in which the distribution of wealth was left to natural laws, as certainly as in a state in which positive institutions operate to the advantage of the few, and to the disadvantage of the many. If the riches of men were made to depend entirely on their industry, economy, enterprize, and prudence, the possession of 100,000 dollars would confer as much distinction as the possession of 500,000 dollars confers at present. Those worth “a plum,” would then rank among the “first men”on ’change: those who are worth “five plums” can rank no higher now.

But the system has not a merely negative effect on the happiness of the rich. Such is the uncertainty of fortune in the United States, that even the most wealthy are not exempt from painful solicitude for the future. Who can be sure that he will be able to navigate his own bark in safety to the end of the voyage, when he sees the shore strewed with wrecks? If a man leaves an estate to his children, he knows not how long they will keep possession of it. If he extends his views to his grand children, the probability will appear strong that some of them will be reduced to abject poverty.

Such is the present custom of trade, that a man who has a considerable capital of his own, not unfrequently gives credit to four or five times the amount of that capital. He is a rich man, but even if the debts due to him are perfectly secure, the perplexity which is created by a long train of credit operations, the failure of but one of which may prove his ruin, must leave him little ground for solid satisfaction: and the necessity he is under in times of embarrassment, of courting the good-will of Bank Directors, goes far towards destroying his personal independence. “The servile dependence on Banks, in which many of our citizens pass their lives,” was observed by Mr. Carey as long ago as the year 1811.

There is one other evil resulting from the super-extended system of credit which has its origin in Banking, and with a few observations on this, we shall close our remarks on this head of the subject. We allude to the misery suffered by an honest man, who is involved in debts. We have known cases in which none of the common rules of prudence had been transgressed in incurring the debts, in which the creditors were perfectly convinced of the honesty of the debtor, and neither pressed for payment, nor reflected on his disability to comply with his engagements: in which the debtor was sensible that his failure would not subject his creditors to any serious inconvenience; and yet a gloom would overspread the mind of the debtor, and remain there for years.