justice. Were they to oblige a shoemaker to pay ten thousand dollars for the privilege of exercising his profession, and then, because there were but one or two shoemakers in a city, undertake to regulate his business, interfere with his concerns, and fleece him over again, on the ground that he possessed a monopoly; we should speak very mildly of such legislation, when we called it oppression and tyranny. He would very naturally say: "I do not ask you for your monopoly. It is all of your own imposing. It is a creature of the legislature. Let every one who chooses, make shoes, subject only to the common laws of the land, and both the monopoly, and your reasons for interfering with me in consequence of it, will cease together." And the case is * The fact, no less notorious than disgraceful, is, that, in many of our States, bank charters are granted or denied for purely political reasons. They are reserved as the reward for services done to the dominant party. Hence, one half of the community at once is, by this policy, excluded from the privilege of employing their capital in this manner. The charters thus granted, are frequently granted not to those who are possessed of the necessary capital, but to those who have promoted an election. It is manifest, that neither activity nor skill, in political intrigue, will add any thing to the value of a bill, or afford any guaranty for the honest management of a bank. If, however, as is frequently the case, the applicants do not wish to hold the shares themselves, they sell them at an advance, before any of the capital has been paid, to persons of the other party. These last, therefore, are obliged to pay this advance, as a bonus to those who have obtained the charter; and thus, their property is taxed at the outset, to reward the industrious partisan. This advance, by its whole amount, reduces the value of banking capital, and prevents men from so investing their property. In this manner, the monopoly is created; and thus, very commonly, are spurious banks brought into existence. It will be found, I believe, in the greater number of instances in which fraud has been detected in the management of banks, that they have been banks which have been decidedly partisan in their character. The evils resulting from this system are, however, all charged upon banks and bank directors. No one thinks of arraigning the legislature, from which all these evils truly eminate. In some of the States, banking capital is taxed so heavily, that it will not yield a fair profit if honestly conducted. Men of character and capital, therefore abandon banking, and the stock falls into the hands of the less scrupulous. the same with banks. Let all banking be governed by principles which shall insure the security of the community, and then let banks be multiplied at will. If they yield more than an average profit, they will thus be increased until their profit is reduced to that of other business. If they yield less, they will be diminished, until they merely supply the wants of the community. Thus, the monopoly, and the reason for oppression founded on it, will terminate together. I have pursued this subject to a greater extent than I should otherwise have done, were it not that a very general disposition exists, and has always existed, to interfere with the rights of capital; and because no country can long be prosperous, where these rights are not respected. Men too frequently assume, that capital, devoted to the purposes of loaning, is owned by the rich; that, by overtaxing and oppressing it, the rich only suffer; and, as the rich are always the minority, they must bear it, without any redress. Now, setting aside the equity of such a notion, it is still proper to remark, that there is nothing which so readily eludes the grasp of oppression, as capital of this kind. It is, of all capital, the most easily transferred. If oppressed, it will be transferred to more congenial climates; the industry of the country from which it has been removed will languish; its population will diminish; and the majority will find, too late, that the blow which was aimed at the minority has recoiled upon themselves. There is no better policy, either for nations or for individuals, than strict and evenhanded justice. The course of legislation with respect to banks has too frequently been at direct variance with the principles of political economy. By charging excessive bonuses for charters, and imposing excessive taxes upon stocks, they have taught banks the lesson of injustice. While they have been doing this, however, they have generally been willing to defend banks from the consequences of suspension, and continue their charters while they violate their chartered obligations. The language of this conduct, when truly expounded, is simply this, Let us fleece you and you may fleece the public. BOOK THIRD. DISTRIBUTION. We have seen that, in order to the creation of value, it is necessary that labor be united to capital. In some cases, both of these are the property of the same individual; that is, the same person both owns the capital and performs the labor. In by far the greater number of instances, however, they are the property of different individuals; that is, one person owns the capital, and another person performs the labor. As, when the same person owns both labor and capital, the whole increase of value becomes his exclusive property; so, when these belong to different individuals, the value belongs to them in common; that is, a share of it is the portion of each. If, then, profit arise from any operation in industry, which has been the joint result of the labor of one man, and the capital of another man, it is a matter of some consequence to ascertain the principles, on which the division of this profit, or the distribution, shall be effected. And, besides, in every important operation, a great variety of laborers, is, of necessity, employed; and of these laborers, the skill and talents are very dissimilar. To these different persons, very different proportions of the profit, equitably belong. And, also, the value of the capi tal thus employed, may be different at different times, and in different occupations. Hence, there will arise a difference in the proportion of profit which shall, at different times, be assigned to a given amount of capital. And, if it be said, that the remuneration in these cases is always arranged among men by mutual consent; it may be still important to ascertain the principles, on which this mutual consent is founded. This book would, therefore, naturally be divided into two parts: First, Wages, or the price of labor ; and, Secondly, Interest, or the price of capital. But, inasmuch as Land is a form of capital, in some measure peculiar, it may be more convenient to consider it separately. We shall, therefore, divide the present book into three chapters. I. WA AGES, or the price of Labor. II. INTEREST, or the price of Money. |
