Part 02, Chapter 41

[Liberty, January 10, 1891.]

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The great central principle of Anarchistic economics—namely, the dethronement of gold and silver from their position of command over all wealth by the destruction of their monopoly currency privilege—is rapidly forging to the front. The Farmers’ Alliance sub-treasury scheme, unscientific and clumsy as it is, is a glance in this direction. The importance of Senator Stanford’s land bill, more scientific and workable, but incomplete, and vicious because governmental, has already been emphasized in these columns. But most notable of all is the recent revolution in the financial attitude of Edward Atkinson, the most orthodox and cock-sure of American economists, who now swells with his voice the growing demand for a direct representation of all wealth in the currency.(92 ¶ 1)

In a series of articles in Bradstreet’s and in an address before the Boston Boot and Shoe Club, this old-time foe of all paper money not based on specie; this man who, fifteen or twenty years ago, stood up in the town hall of Brookline in a set debate with Col. Wm. B. Greene to combat the central principle of Mutual Banking; this boor, who has never lost an opportunity of insulting Anarchism and Anarchists,—now comes forward to save the country with an elaborate financial scheme which he offers as original with himself, but which has really been Anarchistic thunder these many years, was first put forward in essence by Proudhon, the father of Anarchism, and was championed by Atkinson’s old antagonist, Col. Wm. B. Greene, to the end of his life. Of course, all the papers are talking about it, and, on the principle that everything goes that comes from the great Atkinson, most of them give it a warm welcome, though precious few understand what it means. Those which probably do understand, like the New York Evening Post, content themselves for the present with a mild protest, reserving their heavier fire to be used in case the plan should seem likely to gain acceptance.(92 ¶ 2)

The proposal is briefly this: that the national banks of the country shall be divided into several districts, each district having a certain city as its banking center; that any bank may deposit with the clearing-house securities satisfactory to the clearing-house committee, and receive from the clearing-house certificates in the form of bank-notes of small denominations, to the extent of seventy five per cent. of the value of the securities; that these notes shall bear the bank’s promise to pay in legal-tender money, and, in case of failure on the bank’s part to so redeem them, they shall be redeemable at the clearing-house; and that this new circulating medium shall be exempt from the ten per cent. tax imposed upon State bank circulation.(92 ¶ 3)

Of course a scheme like this would not work the economic revolution which Anarchism expects from free banking. It does not destroy the monopoly of the right to bank; it retains the control of the currency in the hands of a cabal; it undertakes the redemption of the currency in legal-tender money, regardless of the fact that, if any large proportion of the country’s wealth should become directly represented in the currency, there would not be sufficient legal-tender money to redeem it. It is dangerous in its feature of centralizing responsibility instead of localizing it, and it is defective in less important respects. I call attention to it and welcome it, because here for the first time Proudhon’s doctrine of the republicanization of specie is soberly championed by a recognized economist. This fact alone makes it an important sign of the times.(92 ¶ 4)

I am surprised that its importance has not been fully appreciated by the Galveston News, which journal alone among the great dailies of the country is an exponent of rational finance. Its editor, in noticing Atkinson’s scheme, instead of pointing out its introduction of a revolutionary principle, remarks that the one infallible way to reach the ideal of a sound system of organized credit is to reach the ideal of a population correspondingly sound in character and intellect. This philistine utterance I hardly expected from such a quarter. It is undoubtedly true that a considerable degree of character and intellect is necessary to the successful organization of credit. But this truth is now a truism. There is another truth, not a truism, for the inculcation of which there is pressing need,—that credit, once organized, will do as much to develop character and intellect as the development of character and intellect ever did to organize credit. It was this truth, and the important bearing that the monetization of all wealth would have upon it, that I expected to see emphasized by the Galveston News in its comments upon Atkinson’s proposal. I hoped and still hope, to hear it rejoice with Liberty that the man whose solutions of the labor problem have consisted mainly of nine-dollar suits and ten-cent meals and patent ovens has at last broached a measure that, instead of being beneath contempt, is worthy of profound consideration.(92 ¶ 5)