Finance and Legislation

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Joshua King Ingalls

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Twentieth Century, December 14, 1893, 8-9.

Money, as a measure of value and medium of exchange, has no necessary relation to funded debt, or to the redemption of credits, outside of the adjustment of mere trade balances, more than have yardsticks or peck measures. A community, nation, or international union may properly make, by common agreement, these measures a standard by which quantitative estimates may be made, but it would be absurd to insist that the yardstick should be required to be of a peculiar material. By general consent an ounce of silver or pennyweight of gold may be adopted as a unit of value, and so all accounts be kept in it. But it is by no means necessary that payment of debts should be made in the gold or silver units, since they can be made in any marketable Commodity, the value of which is measured by such standard.

The legal tender power of money was originally intended to modify barbaric conditions between debtor and creditor so that the debtor could compel his creditor to release him from the pains and penalties of the law. Imprisonment, servitude, even death, the creditor had the power to inflict upon the defaulting debtor. The law was, however, soon inverted so as to work oppression to the debtor it was intended to relieve. It also afforded an opportunity to the ruler to levy tribute through seniorage, debasing the coin and numerous other devices. It enabled him also to indirectly effect forced loans, and to confer on creditors the power to enforce sales to collect debts. Ought there to be, then, no laws to collect debts? I see no necessity for them. The balances of all healthy trade are voluntarily adjusted. No other credits should be encouraged in business. The “kiteflyer” and “plunger” credits are vices, in which lender and borrower are both culpable, and to which no legal or moral countenance should be shown. There is no better reason for a law to collect such debts than for one to collect gambling debts. Credit is not the satisfaction but it s the payment of a purchase, and the same is true of all money, except only when the metal is desired for consumption. If the creditor makes a mistake, and satisfaction is not realized on account of failure, the public have no more cause to interfere to rectify it than if he had swapped horses with a jockey or traded jacknives with an irresponsible party. Only in case of fraud would interference be justified. To all upright dealers laws for the collection of debts are “a delusion and a Snare.” The reckless credits, under temptation to increase sales and boom business, are the immediate cause of business panics, enabling scheming financiers to precipitate them at any time they feel safe in so doing. They can rely also upon the legislature or the nation’s exchequer to relieve them when they get caught in their own net by justifying suspension, and by interposing stay laws, etc., or by some Sweeping law of bankruptcy when the thing becomes too intolerable. Were there no laws for the collection of debts fewer debts would be repudiated or canceled by bankruptcy, and failures, if any, would be evenly distributed over the decennial panic period. But legal tender money is in no wise necessary to the enforced collection of debts even. A debtor can only pay in things he has to pay with. These should be taken on appraisal not on “a forced sale.” Not the money or measure by which value is determined, but the money’s worth satisfies any just debt. No legal tender or any money whatever is in justice required, but only that the thing surrendered be measured by the acknowledged unit of value.

Legal tender is mainly serviceable first, to the government or its favorites in forcing a loan; second, to the financial speculator in making unequal terms with the public or private debtor and in cornering the money market; third, to the debtor, under certain contingencies, in paying debts contrasted in dear currency with cheaper currency The creditor wants expanded money when he lends and Contracted money when he is repaid. The debtor wants dear money when he borrows and cheap money when he pays. Legal tender can be made and is made to suit either party as their respective interests are considered by the legislature. Fiat money does nothing but temporarily take from or add to the real or stable value of the commodity money or coined credit used in circulation It cannot effect permanently their Purchasing power.

The Conspiracy of 1873 was intended to demoralize the silver market. It greatly disturbed other industries as well; but then, “servants, obey your masters;” and they did. Did they do it without pay? A large number of our public men for same reason seem anxious to work for the money monopolist without compensation, if we are to credit their ready attempt at self justification. “Didn’t know it was loaded.” The story of Ernest Seyd and the corruption fund appears to be generally discredited It is admitted, nevertheless, that the bill was submitted to him before presentation to congress, and that suggestions and corrections were made by him. Did he recommend the clause discrediting silver? Certainly not, if he was a friend of bimetalism. Was his name used merely as a mask to the surreptitious deed smuggled in by a single hand? It was charged in the senate in extra session that only one person knew of the clause in either house at the time the bill was passed. And yet no action has been taken to discover the perpetrator, or what is more important to correct a mistake boodlers are ready to profit by, though clamorously denying any hand in making it.

The principal importance to be attached to the mere silver question is the possibility that it may result in taking the legal tender power from gold also. The silver states have it in their power, constitutionally, to make the silver dollar a legal tender for all debts collected under their laws or in their jurisdiction. It is gratifying to notice that advanced thinkers are exposing the absurd fallacy that the legal tender laws have any power to effect the purchasing value of money, whether paper or coin, except for a limited time.