From root@prairienet.org Sat Jun 10 02:12:12 1995
	id CAA17180; Sat, 10 Jun 1995 02:12:07 +0200
	id AA09200; Fri, 9 Jun 95 19:05:36 CDT
Subject: Conspiracy Nation -- Vol. 5 Num. 14
X-Comment:  Conspiracy Nation



              Conspiracy Nation -- Vol. 5  Num. 14
             ======================================
                    ("Quid coniuratio est?")


-----------------------------------------------------------------

HISTORY OF THE GREAT AMERICAN FORTUNES
By Gustavus Myers
(Condensed, from chapter 4)

[...continued...]

The large amount of paper money, without any basis of value 
whatever, was put out at a heavy rate of interest. When the 
merchant paid his interest, he charged it up as extra cost on his 
wares; and when the worker came to buy these same wares which he 
or some fellow-worker had made, he was charged a high price which 
included three things all thrown upon him: rent, interest and 
profit. The banks indirectly sucked in a large portion of these 
three factors. And so thoroughly did the banks control 
legislation that they were not content with the power of issuing 
spurious paper money; they demanded, and got through, an act 
exempting bank stock from taxation.

Thus year after year this system went on, beggaring great numbers 
of people, enriching the owners of the banks and virtually giving 
them a life and death power over the worker, the farmer and the 
floundering, struggling small business man alike. The laws were 
but slightly altered. "The great profits of the banks," reported 
a New York Senate Committee on banks and insurance in 1834, 
"arise from their issues. It is this privilege which enables 
them, in fact, to coin money, to substitute their evidences of 
debt for a metallic currency and to loan more than their actual 
capitals. A bank of $100,000 capital is permitted to loan 
$250,000; and thus receive an interest on twice and a half the 
amount actually invested."

           -+- The Workingmen's Party Protest -+-

It cannot be said that all of the workingmen were apathetic, or 
that some did not see through the fraud of the system. They had 
good reason for the deepest indignation and exasperation. The 
terrible injustices piled upon them from every quarter -- the low 
wages that they were forced to accept, often in depreciated or 
worthless banknotes, the continually increasing exactions of the 
landlords, the high prices squeezed out of them by monopolies, 
the arbitrary discriminations of law -- these were not without 
their effect. The Workingmen's Party, formed in 1829 in New York 
City, was the first and most ominous of these proletarian 
uprisings. Its resolutions read like a proletarian Declaration of 
Independence, and would unquestionably have resulted in the most 
momentous agitation, had it not been that it was smothered by its 
leaders, and also because the slavery issue long obscured purely 
economic questions. "Resolved," ran its resolutions adopted at 
Military Hall, Oct. 19, 1829,

  in the opinion of this meeting, that the first appropriation 
  of the soil of the State to private and exclusive possession 
  was eminently and barbarously unjust. That it was 
  substantially feudal in its character, inasmuch as those who 
  received enormous and unequal possessions were *lords* and 
  those who received little or nothing were *vassals*. That 
  hereditary transmission of wealth on the one hand and poverty 
  on the other, has brought down to the present generation all 
  the evils of the feudal system, and that, in our opinion, is 
  the prime source of all our calamities.

           -+- Radicalism Versus Respectability -+-

The "Courier and Enquirer," owned by Webb and Noah, in the pay of 
the United States Bank, burst out into savage invective. It held 
the Workingmen's Party up to opprobrium as an infidel crowd, 
hostile to the morals and the institutions of society, and to the 
rights of property. Nevertheless the Workingmen's Party proceeded 
with an enthusiastic, almost ecstatic, campaign and polled 6,000 
votes, a very considerable number compared to the whole number of 
voters at the time.

By 1831, however, it had gone out of existence. The reason was 
that it allowed itself to be betrayed by the supineness, 
incompetence, and as some said, the treachery, of its leaders, 
who were content to accept from a Legislature controlled by the 
propertied interests various mollifying sops which slightly 
altered certain laws, but which in no great degree redounded to 
the benefit of the working class. For a few bits of counterfeit, 
this splendid proletarian uprising, glowing with energy, 
enthusiasm and hope, allowed itself to be snuffed out of 
existence.

               -+- The Panic of 1837 -+-

Passing over the Equal Rights movement in 1834 which was a 
diluted revival of the Workingmen's Party, and which, also, was 
turned into sterility by the treachery of its leaders, we arrive 
at the panic of 1837.

The panic of 1837 was one of those periodic financial and 
industrial convulsions resulting from the chaos of capitalist 
administration. No sooner had it commenced, than the banks 
refused to pay out any money, other than their worthless notes. 
For thirty-three years they had not only enjoyed immense 
privileges, but they had used the powers of Government to insure 
themselves a monopoly of the business of manufacturing money. In 
1804 the Legislature of New York State had passed an 
extraordinary law, called the restraining act. This prohibited, 
under severe penalties, all associations and individuals not only 
from issuing notes, but "from receiving deposits, making 
discounts or transacting any other business which incorporated 
banks may or do transact." Thus the law not only legitimatized 
the manufacture of worthless money, but guaranteed a few banks a 
monopoly of that manufacture. Another restraining act was passed 
in 1818. The banks were invested with the sovereign privilege of 
depreciating the currency at their discretion, and were 
authorized to levy an annual tax upon the country, nearly 
equivalent to the interest on $200,000,000 of deposits and 
circulation. On top of these acts, the Legislature passed various 
acts compelling the public authorities in New York City to 
deposit public money with the Manhattan Company. This company, 
although, as we have seen, expressly chartered to supply pure 
water to the city of New York, utterly failed to do so; at one 
stage the city tried to have its charter revoked on the ground of 
failure to carry out its chartered function, but the courts 
decided in the company's favor.

At the outbreak of the panic of 1837, the New York banks held 
more than $5,500,000 of public money. When called upon to pay 
only about a million of that sum, or the premium on it, they 
refused. But far worse was the experience of the general public. 
When they frantically besieged the banks for their money, the 
bank officials filled the banks with heavily armed guards and 
plug-uglies {5} with orders to fire on the crowd in case a rush 
was attempted.

In every State conditions were the same. In May, 1837, not less 
than eight hundred banks in the United States suspended payment, 
refusing a single dollar to the Government whose deposits of 
$30,000,000 they held, and to the people in general who held 
$120,000,000 of their notes. No specie whatever was in 
circulation.

         -+- The Resulting Widespread Destitution -+-

Now the storm broke. Everywhere was impoverishment, ruination and 
beggary. Every bank official in New York City was subject to 
arrest for the most serious frauds and other crimes, but the 
authorities took no action. On the contrary, so complete was the 
dominance of the banks over Government that they hurriedly got 
the Legislature to pass an act practically authorizing a 
suspension of specie payments. The consequences were appalling. 
New York City was filled with the homeless and unemployed. In the 
early part of 1838 one-third of all the persons in New York City 
who subsisted by manual labor, were wholly or substantially 
without employment. Not less than 10,000 persons were in utter 
poverty.

---------------------------<< Notes >>---------------------------
{5} "...plug-uglies..." plug-ugly: thug, tough; esp: one hired to 
intimidate.

-----------------------------------------------------------------
     I encourage distribution of "Conspiracy Nation."
-----------------------------------------------------------------
  For information on how to receive the new Conspiracy Nation 
  Newsletter, send an e-mail message to bigxc@prairienet.org
-----------------------------------------------------------------
If you would like "Conspiracy Nation" sent to your e-mail 
address, send a message in the form "subscribe conspire My Name" 
to listproc@prairienet.org -- To cancel, send a message in the 
form "unsubscribe conspire" to listproc@prairienet.org
-----------------------------------------------------------------
Aperi os tuum muto, et causis omnium filiorum qui pertranseunt.
Aperi os tuum, decerne quod justum est, et judica inopem et 
  pauperem.                    -- Liber Proverbiorum  XXXI: 8-9 

 Brian Francis Redman    bigxc@prairienet.org    "The Big C"
--------------------------------------------------------------
    Coming to you from Illinois -- "The Land of Skolnick"        
--------------------------------------------------------------


