Two Treatises on Competitive Currency and Banking Lysander Spooner Edited and with introductory essay by Phillip W. Magness American Institute for Economic Research educates Americans on the value of personal freedom, free enterprise, property rights, limited government and sound money. AIER’s ongoing scientific research demonstrates the importance of these principles in advancing peace, prosperity and human progress. Two Treatises on Competitive Currency and Banking By Lysander Spooner 2018 introductory essay by Phillip W. Magness ISBN 978-0-913610-45-9 (Paperback) ISBN 978-0-913610-44-2 (Kindle) This 2018 edition is published by the American Institute for Economic Research under the Creative Commons Attribution 4.0 International License. Two Treatises on Competitive Currency and Banking Lysander Spooner • Dedicated to the entrepreneurs of free and open monetary competition, past and present. iv Contents Acknowledgments . .vii Introduction by Phillip W. Magness . ix What is a Dollar? Or, how many dollars have we? And how much money can we have? . 1 Financial Imposters Imposters No. I Or the Great Fraud In Regard to the Value of Money . .85 Imposters No. II A Gallery of Financial Impostors. 135 Imposters No. III The Practical Operation of the Fraud . 169 Imposters No. IV Pretexts for the Fraud . 229 About the Author . 239 Index. 241 v vi Acknowledgments extend my thanks to Nathan Goodman, Zak Slayback, and James Har- rigan, who assisted with edits in the preparation of this manuscript; to Michael Vogt, who helped to digitize large segments of the text; to IFreedom Trust, which encouraged the development of this project; and to the American Institute for Economic Research, which facilitated its re- publication after being “lost” to history for over 140 years. vii viii Introduction ix Introduction ysander Spooner (1808-1887) is primarily remembered today as a sharp- witted legal theorist who penned a number of influential attacks L on the institution of slavery in the decades preceding the American Civil War. An uncompromising logician, his preferred means of argument entailed taking an agreeable premise—usually from the common law or observed convention—and methodically developing it to an unwavering extreme, intended to tease out uncomfortable truths it revealed about soci- etal hypocrisies and injustices. He was a self-professed enemy of political authority, although he operated within its own turf of the legal system. His most famous works in his lifetime deployed the U.S. Constitution against its own most notorious clauses, effectively arguing that the continued tolerance of slavery under constitutional auspices would render the docu- ment—and the government based upon it—void. After the Civil War he extended this reasoning to the concept of government more generally, using strict legal literalism to cast doubt upon the social contractarianism and any constitution that ostensibly rested upon its assumptions. Spooner’s economic views have received a distant tertiary level of historical attention relative to his abolitionism and his contributions to political philosophy. This circumstance should come as little surprise for a man who, at various points in his life, plotted with John Brown, offered legal services to assist fugitive slaves, schemed to build a private com- petitor to the U.S. post office, indulged in verbalparring s with the lead- ing figures of American politics for almost five decades in public life, and eventually called for the legal invalidation of the federal government itself ix x Competitive Currency and Banking on account of an abrogated contract with its citizenry. Of his surviving writings though, we know him to have been a radical adherent of the right of private contract, a believer in paper currency, a staunch defender of pri- vate property, and yet also a man who cared deeply about the conditions of labor and the inequities of wealth he observed in the world around him. With slavery extinguished and the Civil War an object of memory, the intellectual firebrands of Massachusetts’ abolitionist community increasingly turned their energies to economic issues—even to the point that economic matters became the dominant theme of a succession of politically liberal, radical, and free-thinker journals published in and around Boston in the final three decades of the 19th century. No single event initiated this shift in focus, although it found ample subject matter in the now-overlooked debates over monetary and tax policies in the immediate postbellum period. With the end of the war came the political entrench- ment of protective tariffs, the monetary populism of Greenbacks and, later, Silverites, and an age of public graft fueled by state-subsidized railroad speculation and insider contracts dispersed through the spoils of machine politics. Anti-slavery veterans like Spooner, Thomas Wentworth Higginson, William Lloyd Garrison, academics like Amasa Walker and William Graham Sumner, and an emerging community of radical journalists and pamphleteers—Benjamin Tucker, Stephen Pearl Andrews, and Wil- liam Batchelder Greene, among the more notable names—turned their attention to a multitude of questions surrounding not only the economic mechanisms of wage labor, international trade, currency, and credit, but the relation of each to political interferences and intrusions upon voluntary financial relationships. Though diffuse in its nature, the resulting public economic discussion ran continuously across roughly three decades of time and involved most of the leading public intellectual figures of Mas- sachusetts in some capacity. They formed public debating societies structured as “Liberal Clubs,” which held monthly meetings to present contesting viewpoints on topics of political economy and society. Spooner was the featured speaker at over a dozen such gatherings between roughly 1870 and his death in 1887. The Introduction xi viewpoints contested at these events ran the gamut from laissez-faire mar- ket anarchism to Cobdenite free trade and anti-imperialism to fantastically Utopian strains of socialism, albeit of the kind that usually asserted its own dissociation from the state. Their conversants debated theories of value, alternative systems of currency and banking, the function of land as capital, and the philosophical validity of private property. To his credit, Spooner never wavered from his contract law-inspired commitment to individual property rights and thereby avoided the more far-fetched political naiveties found among some of his peers. Indeed, as the contents of this volume amply illustrate, Spooner’s assessment of the political world itself was marked by disdain. In politics he saw only the instruments of appropriating the private individual’s property, of burdening them with restrictions that intruded upon their livelihoods, of swindling them of justly acquired possessions, and of general knavery. As with most matters, Spooner identified the sources of recession, unemployment, tight credit, and other economic ills in the authority of the state. The granting of privileges to the politically connected, the erection of statutory barriers against new businesses, and above all the violation of an individual’s right to freely contract as he or she saw fit fostered a social inequity that pitted not the rich against the poor, but the politically empowered against the rest of society. Economically speaking, Spooner’s most direct imprint was likely upon his protégé and literary heir, the individualist-anarchist publisher Benjamin Tucker (1854–1939). In fact, competing claimants to Spooner’s own ideological placement often filter through a similarly contested lens around Tucker. The latter’s reputation ranges from an early libertarian to an anarchistic socialist, defined in his terms as repudiating the collective instruments of the better-known theories of state socialism while still cling- ing to an individually-tailored labor theory of value. Working from a handful of passages in Spooner’s Letter to Grover Cleveland (1886) and several short pamphlets on banking, currency, and industry, it is possible to plausibly situate Spooner in Tucker’s sphere, excepting their notable divergence over the validity of intellectual prop- erty. Spooner is thus similarly claimed as a libertarian, a property theorist, xii Competitive Currency and Banking a laissez-faire thinker, an anti-capitalist, and even a “market socialist” of sorts—although the contents of the present volume should disabuse us of that final designation. As we shall see, Spooner was far too firmly anchored to an individualist concept of private property to indulge such hallucina- tions. On one known occasion where the subject presented itself—a Boston Liberal Club debate in 1884—Spooner categorically rejected the posited “dissension or variance between capitalists and laborers” at the heart of contemporary socialist and communal theorizing. “Both of them are necessary in the present state of society,” he maintained. Furthermore the proper object of economic policy was to simply “give every man a suf- ficiency with which to carry on business for himself,” after which distribu- tional equity would follow. Spooner’s remarks turned next to his proposed means of clearing impediments to economic self-sufficiency. As indicated in incompletely-summarized remarks, he proposed “that what is done by the Government should be allowed to individuals,” namely the liberty to issue their own private currencies and other forms of credit.1 No matter where we might designate