[Liberty, March 26, 1887.]

Pinney of the Winsted Press grows worse and worse. It will be remembered that, in attacking the free-money theory, he said we had a taste of it in the day of State wildcat banking, when every little community had its State bank issues; to which I made this answer: How could State bank issues be free money? Monopoly is monopoly, whether granted by the United States or by a single State, and the old State banking system was a thoroughly monopolistic system. This language clearly showed that the free money objection to the old State banks as well as to the present national banks is not founded on any mistaken idea that in either case the government actually issues the money, but that in both cases alike the money is issued by a monopoly granted by the government. But Pinney, not daring to meet this, affects to ignore the real meaning of my words by assuming to interpret them as follows (thus giving new proof of my assertion that he wastes his strength in attacking windmills).(77 ¶ 1)

It is apparently Mr. Tucker’s notion that State banks were an institution of the State. They were no more a government institution than is a railroad company that receives its charter from the State and conducts its business as a private corporation under State laws …. For purposes of illustration, they answer well, and Mr. Tucker’s effort to lessen the force of the illustration by answering that they were institutions of the State, because they are called for convenience State banks, is very near a resort to willful falsehood.(77 ¶ 2)

What refreshing audacity! Pinney knows perfectly well that the advocates of free money are opposed to the national banks as a monopoly enjoying a privilege granted by the government; yet these, like the old State banks, are no more a government institution than such a railroad company as he describes. Both national and State banks are law-created and law-protected monopolies, and therefore not free. Anybody, it is true, could establish a State bank, and can establish a national bank, who can observe the prescribed conditions. But the monopoly inheres in these compulsory conditions. The fact that national bank-notes can be issued only by those who have government bonds and that State bank-notes could be issued only by those who had specie makes both vitally and equally objectionable from the standpoint of free and mutual banking, the chief aim of which is to secure the right of all wealth to monetization without prior conversion into some particular form of wealth limited in amount and without being subjected to ruinous discounts. If Mr. Pinney does not know this, he is not competent to discuss finance; if he does know it, it was a quibble and very near a resort to willful falsehood for him to identify the old State banking system with free banking.(77 ¶ 3)

But he has another objection to free money,—that it would enable the man who has capital to monetize it, and so double his advantages over the laborer who has none. Therefore he would have the general government, which he calls the whole people, monetize their combined wealth and use it in the form of currency, while at the same time the wealth remains in the owner’s hands for business purposes. This is Mr. Pinney’s polite and covert way of saying that he would have those without property confiscate the goods of those who have property. For no governmental mask, no fiction of the whole people, can disguise the plain fact that to compel one man to put his property under pawn to secure money issued by or to another man who has no property is robbery and nothing else. Though you leave the property in the owner’s hands, there is a grab mortgage upon it in the hands of the government, which can foreclose when it sees fit. Mr. Pinney is on the rankest Communistic ground, and ought to declare himself a State Socialist at once.(77 ¶ 4)

Certainly no one wishes more heartily than I that every industrious man was the owner of capital, and it is precisely to secure this result that I desire free money. I thought Mr. Pinney was a good enough Greenbacker to know (for the Greenbackers know some valuable truths, despite their fiat-money delusion) that the economic benefits of an abundance of good money in circulation are shared by all, and not reaped exclusively by the issuers. He has often clearly shown that the effect of such abundance is to raise the laborer’s wages to an equivalence to his product, after which every laborer who wishes to possess capital will be able to accumulate it by his work. All that is wanted is a means of issuing such an abundance of money free of usury. Now, if they only had the liberty to do so, there are already enough large and small property-holders willing and anxious to issue money, to provide a far greater amount than is needed, and there would be sufficient competition among them to bring the price of issue down to cost,—that is, to abolish interest. Liberty avoids both forms of robbery,—monopoly on the one side and Communism on the other,—and secures all the beneficent results that are (falsely) claimed for either.(77 ¶ 5)