essays

Aug 31, 1836

Corporate Abominations and Their “Scrip Nobility”

Two Editorials from William Leggett

In this duo, Leggett gives his most powerful and elegant expressions of the Classical Liberal theory of class conflict in the “exceptional” United States.

Editor’s Note

In the following extracts from the New York Evening Post, William Leggett departed from optimistic Jacksonian visions of American “Manifest Destiny” and “Exceptionalism.”  While Jacksonian “Young American” nationalists believed that American military, economic, and cultural influence would inevitably tilt history’s wheel in a positive direction, more sober voices like Leggett’s remained cautious.  He argued that while democracy, republicanism, and the American Constitution were indeed all special products of history—to be guarded with all due force—Jacksonian America harbored a new form of corporate aristocracy perhaps even more dangerous than the creatures dominating the Old World.  The New World’s aristocracy sprang up not in the easily-identifiable personages of kings and emperors, but, like so many mushrooms, sprouted from sources unknown and possessed powers not easily understood.  The American power-elite constituted itself through corporate personhood and feasted on an unending flow of bank credit, partial legislation, and tax revenues.  The corporate aristocracy claimed legitimacy from the public’s own constitutional arrangements, however, and no matter how medieval the origins of the corporation may have been, these particular corporations were chartered by the American people through their duly elected representatives.  As Leggett sharply noted, however, the mere presence of democratic republicanism did not eliminate the power of the state.  In fact, it seemed that democracy greatly strengthened the health and wellbeing of state power, providing an even richer harvest for the now legally-shielded, moneyed class.

The New York state “Restraining Law,” was one such example of a legal shield.  The law forbade any non-authorized institutions or individuals from issuing money and credit, essentially monopolizing the banking industry for chartered banks.  In the Post’s words, the law constituted “the creation of an Order of American Barons,” who, as Leggett notes in the second article, could be easily identified after all: One must simply take a stroll down Wall Street. 

Anthony Comegna, PhD
Assistant Editor for Intellectual History

The Restraining Law and Its Abominations

New York Evening Post, 31 August 1836.

—This vile blot upon our Statute Book, this tyrannous ordinance of the Chartered Money Power, this incredible outrage on the rights of the vast unprivileged majority of the inhabitants of this free state, is one of those monstrous violations of natural justice that would not exist but that their existence is denied, and which are denied existence, because they outshock belief. It is impossible that the people of New York have yet distinctly understood the provisions of this insulting statute.  What! Can two millions of men called free, know that they are stigmatized by an insolent Oligarchy as too stupid to drive “the trade in money;” that they are ignominiously excluded from this simple traffick, and basely cheated of all participation in its profits?  Will they submit to hang forever in menial dependence upon the haughty smiles of a Patrician Order?  Will they consent that ten thousand stockholders shall rule this State, and through this State, the Union?  Do they know that these ten thousand men have climbed so high that they fear not to look down and say to us, who are two hundred times their number, “Ye scurvy knaves, with one another you shall not lend, you shall not borrow, you shall not promise, you shall not trust, you shall in no wise deal in the thrice holy and mysterious trade of money.  With one another, ye servile rout, the counter-changing craft is sacrilege, the traffick in paper promises is TABOO.  If you have money, bring the vile dross to us.  We will ease you of your fullness.  But we warn you, let not your needy brother partake your abundance.  Make us your almoners.  Give us possession of the beggar’s blessing, the supplicant’s tribute, and the suitor’s fee.  If you would promise, promise us.  We will make you keep your promises.  You are not fit to trust each other in that kind.  If you are in want, or in straits, or in dangers, come to us.  Pay us salvage, and we will save you.  But see that you help not one another.  You are weak, and would let down the rate of usance.  You are unskillful, and would ruin ‘the trade in money.’  If you have treasure that you would lay up, deposite it with us.  With us it will be safe.  You yourselves shall hardly tear it from our custody.  But confide not your hard earnings with each other.  You are base.  You are stupid.  You are faithless.  We alone are to be trusted.  This is our advice.  Such is our command.  Obey and you shall be fleeced so gently that you will not know it.  Resist, and our strong men shall go into your houses and take forfeiture of your effects, and if you abide in your obstinacy, they shall strip you of all you have, and shall cast you out, you and your children, to want and beggary, if so it seems good to one of us, the Noble Order of Moneychangers by Special Patent from the State.”  If this is the language of exaggeration, some one can show us where.  If this is not the literal translation of the Law, we should be glad to know what is.  We appeal to the learned in legislative jargon if we have not rendered faithfully the meaning of the Statute of Restraint.  Our version is less coolly insolent, because it is not in Christian English to utter such abominations without an honest shudder.  We give the original at full length…If it is not…the creation of an Order of American Barons, the New York Times will tell us what is wanting to make the Patent of Nobility complete.

“1.  No person unauthorized by law, shall subscribe to, or become a member of, or be in any way interested in, any association, institution or company, formed, or to be formed, for the purpose of receiving deposites, making discounts or issuing notes or other evidences of debt, to be loaned or put in circulation as money; nor shall any person, unauthorized by law, subscribe to or become in any way interested in, any bank or fund created, or to be created for the like purposes, or either of them…

3.  No incorporated company, without being authorized by law, shall [similarly engage in banking.]…

5.  All notes and other securities for the payment of any money or the delivery of any property, made or given to any such association, institution or company, that shall be formed for the purpose expressed in the first section of this Title, or made or given to secure the payment of any money loaned or discounted by any incorporated company or its officers, contrary to the provisions of the third section of this Title, shall be void.

6.  No person, association of persons or body corporate, except such bodies corporate as are expressly authorized by law, shall keep any office for the purpose of receiving deposites, or discounting notes or bills, or issuing any evidences of debt, to be loaned, or put in circulation as money:  nor shall they issue any bills or promissory notes or other evidence of debt as private bankers, for the purpose of loaning them, or putting them in circulation as money, unless thereto specially authorized by law.

7.  Every person and every corporation, and every member of a corporation, who shall contravene either of the provisions in [this Title,] or directly or indirectly, assent to such violation, shall forfeit one thousand dollars.”

The Street of the Palaces

New York Plaindealer, 10 December 1836.

There is, in the city of Genoa, a very elegant street, commonly called, The Street of the Palaces.  It is broad and regular, and is flanked, on each side, with rows of spacious and superb palaces, whose marble fronts, of the most costly and imposing architecture, give an air of exceeding grandeur to the place.  Here reside the principal aristocracy of Genoa; the families of Balbi, Doria, and many others of those who possess patents of nobility and exclusive privileges.  The lower orders of the people, when they pass before these proud edifices, and cast their eyes over the striking evidences which the lordly exteriors exhibit of the vast wealth and power of the titled possessors, may naturally be supposed to think of their own humble dwellings and slender possessions, and to curse in their hearts those institutions of their country which divide society into such extremes of condition, forcing the many to toil and sweat for the pampered and privileged few.  Wretched indeed are the serfs and vassals of those misgoverned lands, where a handful of men compose the privileged orders, monopolizing political power, diverting to their peculiar advantage the sources of pecuniary emolument, and feasting, in luxurious idleness, on the fruits of the hard earnings of the poor.

But is this condition of things confined to Genoa, or to European countries?  Is there no parallel for it in our own?  Have we not, in this very city, our “Street of the Palaces,” adorned with structures as superb as those of Genoa in exterior magnificence, and containing within them vaster treasures of wealth?  Have we not, too, our privileged orders?  Our scrip nobility? Aristocrats, clothed with special immunities, who control, indirectly, but certainly, the political power of the state, monopolise the most copious sources of pecuniary profit, and wring the very crust from the hard hand of toil?  Have we not, in short, like the wretched serfs of Europe, our lordly masters, “Who make us slaves, and tell us ‘tis their charter?”

If any man doubts how these questions should be answered, let him walk through Wall-street.  He will there see a street of palaces, whose stately marble walls rival those of Balbi and Doria.  If he inquires to whom those costly fabrics belong, he will be told to the exclusively privileged of this land of equal laws!  If he asks concerning the political power of the owners, he will ascertain that three-fourths of the legislators of the state are of their own order, and deeply interested in preserving and extending the privileges they enjoy.  If he investigates the sources of their prodigious wealth, he will discover that it is extorted, under various delusive names, and by a deceptive process, from the pockets of the unprivileged and unprotected poor.  These are the masters in this land of freedom.  These are our aristocracy, our scrip nobility, our privileged order of charter-mongers and money-changers!  Serfs of free America!  Bow your necks submissively to the yoke, for these exchequer barons have you fully in their power, and resistance now would but make the burden more galling.  Do they not boast that they will be represented in the halls of legislation, and that the people cannot help themselves?  Do not their servile newspaper mouth-pieces prate of the impolicy of giving an inch to the people, lest they should demand an ell?  Do they not threaten, that unless the people restrict their requests within the narrowest compass, they will absolutely grant them nothing?—that they will not relax their fetters at all, lest they should next strive to snap them entirely asunder?

These are not figures of speech.  Alas!  We feel in no mood to be rhetorical.  Tropes and figures are the language of the free, and we are slaves!—slaves to most ignoble masters, to a low-minded, ignorant, and rapacious order of money-changers.  We speak, therefore, not in figures, but in the simplest and soberest phrase.  We speak plain truths in plain words, and only give utterance to sentiments that involuntarily rose in our mind, as we glided this morning through the Streets of the Palaces, beneath the frowning walls of its marble structures, fearing that our very thoughts might be construed into a breach of privilege. But thank heaven!  The day has not yet come—though perhaps it is at hand—when our paper money patricians deny their serfs and vassals the right to think and speak.  We may still give utterance to our opinions, and still walk with a confident step through the Street of the Palaces of the Charter-mongers.

Further Reading: 

Sedgwick, Theodore III. A Collection of the Political Writings of William Leggett (2 Volumes). New York: Taylor & Dodd. 1840.

White, Lawrence, ed. Democratick Editorials: Essays in Jacksonian Political Economy. Indianapolis: Liberty Press. 1984.

Worton, Stanley. “William Leggett, Political Journalist (1801-1839): A Study in Democratic Thought.” (PhD Dissertation): Columbia University. Columbia University Press. 1954.