Credit Currency

United States Magazine
Democratic Review.

May, 1838.


Autobiography of Ferret Snapp Newcraft, Esq.
being a full exposition and exemplification of ‘the credit system.’

I designedly omit the place of my birth, that being a matter of some doubt to myself, inasmuch as from my earliest recollection I led a sort of miscellaneous life, seldom remaining long in the same place, and moving about as occasion made necessary or convenient.  My family, though poor, was of great antiquity, and withal respectable, since I have often heard my father say, not one of his ancestors had ever, to his knowledge, degraded himself by following any regular occupation.  The only tainted limb of the family tree was our grandfather, who was ignominiously bound apprentice to a cobbler;  but thank Heaven, he ran away before he took a degree, and became distinguished as all our race have been, by “living by their wits” –an expressive phrase which distinguishes the happy few from the miserable many, who are justly condemned to live by the sweat of the brow, seeing, they cannot live by the sweat of the brain.  The consequence is, that the latter have a foolish prejudice against the former, arising, no doubt, from an innate sense of inferiority.

My early education was like my mode of life, rather miscellaneous.  In fact, setting aside a little smattering of reading, writing, and cyphering, that I obtained, at various times, it consisted principally in the example and precepts of my father.  As we rambled about from town to, town — for my father seldom remained long in one place, on account, he said, of the envy and ill will he excited by the superiority of his wits– he would stop and call my attention to a fall of water, a little murmuring river, a particular point of land, or some other matter, and tell me what a capital speculation he could make out of it if he only had the money.  In one place, he would erect a great manufactory;  in another, make the river navigable;  in a third, found a city;  and in a fourth, cut a canal that would enrich the whole country.  So far as I could judge, at that time, his sole dependence was on these castles in the air, which he never realized, except in the way of now and then persuading some poor dolt of a workingman, who had saved a little money, to embark it in some one of his speculations, which I confess almost always failed, for want, as my father said, of a proper credit system founded on paper-money.  But though they failed, my father always managed to take care of himself, which he affirmed was the first duty of man, and to save enough from the wreck to serve him till he could hatch some other speculation.

When I grew old enough to think a little for myself, and observed the ingenious devices by which my father wrought on the credulity of these egregious blockheads, that sense of justice which I used to believe innate in the nature of man, would rise against such mischievous deceptions;  and I remember I once ventured to express myself rather ingenuously on the subject.  His reply at once opened my mind to that new and sublime theory which has ever since been the governing principle of my life.  “My son,” said he, “what do you suppose constitutes the superiority of man over all other animals ?”

I mustered up my scholarship, and replied.  “His reason, sir.”

“Good you are right.  It follows, then, that reason being his great characteristic, it was the design of Providence, that he should live by his reason –in other words, by his wits– and, that, therefore, it is his bounden duty to make the most of them.  Do you understand ?”

“I think I do, sir.  But he should not make use of his wits to deceive others.  Justice–“

“Justice ?  Where did you get these queer notions, boy ?”

“From nature, I believe, sir.”

“Nature is a son of a –tinker!– and the sooner we turn it out of doors the better.  This is the object of all education.  The impulses of nature are the mere errors of ignorance and inexperience, and what philosophers call a knowledge of the world –which, by the way, is worth all other knowledge– consists solely in sharpening our wits, and preparing us to take advantage of the dullness of others.  Scrupulous blockheads call this deception, but you may depend upon it, it is nothing but a justifiable use of our wits.  Nay, it is not only justifiable, but obligatory;  for not to make use of the faculties bestowed on us by nature, or acquired by experience, would be flying in the face of our Maker.  It would be a most criminal negligence.  Do you remember the parable of the talents ?”

“I think I have some sort of recollection of it.”

“Well, what is the moral of it ?  Is it not that the great duty of man is to turn a penny, and make money as fast as he can ?”

“But, sir, I think he ought to make it honestly.”

“Pooh — You’re a blockhead.  There is not one word about honesty in the whole parable.”

This, and various similar conversations, together with the daily example of my father, and his perpetual turmoil about speculations, gave a radical turn to my mind, and fixed my destiny for life.  I saw very clearly that mankind were condemned to labour, not for their own benefit, but that of others;  and that inasmuch as the wits of a man were the noblest part of him, it was but just they should live at the expense of those democratic physical powers, which were undoubtedly intended for that special purpose.

One of the great resources of my father, who was a decided enemy to hard work, was the invention of labour-saving machines.  I remember to have heard him boast that he had, during his life, taken out patents for a hundred and thirty-seven contrivances of this sort, many of which he sold out to the country farmers and village mechanics, for he had a most slippery tongue, and a keen wit, which he often assured me were specially given to enable him to earn an honest livelihood.  I have long ago forgot the greater portion of these labour-saving machines;  but I remember there was one for scalding pigs without heating the water, and another for churning butter by an ingenious application of the well-pole, while the good women were lowering and hoisting the bucket.  We lived comfortably three months on these inventions, at the end of which time the ignorant country people began to be so jealous of the superiority of my father’s wits, that they threatened to tar and feather him, and subject me to the new patent scalding machine.

In short, the country was becoming rather warm for us, and my father determined to seek not only a wider sphere of action, but of impunity, in the principal city of that section of country which had hitherto been the scene of the triumphs of his wits.

“Ferret, my son,” said he, one day, just after a great ignorant country booby, who had paid his last five dollars for the use of the patent scalding contrivance, had called him various unseemly names, and threatened to prosecute him for swindling– “Ferret, my son, there is no longer any living among these hard-working Cyclops, who have no respect for the triumphs of superior intellect, and prefer brute force to mother wit.  Besides, these ‘big-pawed fellows’ –my father was the inventor of this phrase– have such a stupid respect for industry, that they are apt to despise their betters, who live by their wits, according to the instinct of reason, and the decrees of Providence.  I am, going to the great city of Ragamuffinville, where there is elbow-room for the exercise of one’s wits, and I can turn dollars where I now only turn pennies.”

Accordingly we departed for the great city to seek our fortunes in a more enlarged sphere of action.  As we proceeded along, my father whiled away the time by pointing out a variety of excellent speculations.  I had but a confused notion of the precise meaning of this word;  and to this day I confess the distinction between making a great speculation and ‘taking in’ a fellow creature, is not precisely clear to my mind.  How far a man may use his superior wit or experience in getting the better of ignorance and simplicity, is a question, as my father used to say, which every one must decide for himself.

“There, now,” said he, as we passed the house of an honest farmer– “There is a fellow who might double the value of his farm, and live like a fighting cock, if he would only drain that great swamp, blow up that ledge of rocks, sprinkle a few hundred bushels of plaster over it, lay it down in grass, and stock it with the short horn breed.”

I replied in the simplicity of my heart–

“I suppose sir, he has not the means of doing this.”

“Ah! Ferret, there’s the thing.  The whole world is, as it were, standing still for want of means.  There is not half enough money in the world to supply the new developement of speculation;  and the possibility of supplying this want so as to keep pace with the spirit of the age –do you understand me, boy?– is what employs my mind day and night.  The difficulty of getting money has always appeared to me a great defect in the scheme of Providence, and were that only got over, man would be all but omnipotent.  I believe this to be possible, and have a sort of dim conception working its way in my brain, which, if I can only bring it to maturity, will produce the greatest revolution that has happened in the world since the deluge, and relieve mankind from that cruel denunciation that he should earn his bread by the sweat of his brow, which always gives me an ague whenever I hear it from the pulpit.”

I requested my father to explain his project, but he only replied, patting his forehead– “It is here, boy, here, but I can’t explain it yet, at least to your mind.  One of these days I may let you into the secret –at present we have other fish to fry.”  This conversation set my thoughts in motion.  I pondered almost without intermission on the subject, which gradually opened upon me as I advanced, step by step, until I conceived the sublime idea, which, as will appear in the sequel, I afterwards carried into effect, and with such consequences as have astonished and confounded the world.

Just as my father concluded his last remark, we came in sight of a little tailor’s shop, in a village by the road side, through the open window of which, we could see the owner stitching away with great animation, and jerking his elbow in a most spasmodic style.  Observing that he had some business with the tailor, who, as it soon appeared, was a simple good-natured soul, of great faith and little experience, my father told me to follow him, say nothing, and be sure not to laugh.  Several suits of clothes were hanging out of doors as a lure for customers.

My father saluted the master of the shop, who stopped his elbow for an instant, raised his eyes, gave him a nod, and then went on at a great rate, as if he wished to make up for lost time.  My father then inquired if he had any ready made clothes, to suit himself and son, at which the little man pricked his ears, stuck his needle into his work, and jumped from his shop-board with the elasticity of a bull-frog.

“Suits ? Fit ? my dear sir, I have clothes to fit any body, from a giant to a dwarf.”

He began to pull down his paraphernalia with his usual celerity;  and to make short of a long story, we were soon fitted.  I wondered how they were to be paid for, as I happened to know my father had at all times considerably more wit than money.  But I was soon enlightened on the subject.

“Friend Dibdill,” said he, “your clothes fit better than if they had been made for us;  what would they have done had you actually taken measure ?”

The little man showed his teeth at this compliment, but made no answer, except repeating the word “friend,” three or four times with great rapidity, in a tone of interrogation, to which my father responded–

“Aye, friend Dibdill, but I believe you don’t recollect me, though we have met several times at the Rev. Mr. Snortgrace’s meeting.  Don’t you remember what a refreshing time we had about seven years ago at the great sermon about earthquakes ?”

“Bless me!” cried the tailor– “To be sure I do, but I don’t remember to have seen you there.”

” Sure– you don’t say so?  Why I was one of those who lifted you up, brother Dibdill, when you were struck down, and carried you into the air, where you waked up, singing Hallelujah.  Don’t you remember ?”

The tailor reflected awhile.

“Why, yes, now I think of it, I think I do.  I’m much obliged to you, brother.  What a shaking there was among the dry bones that day,” rubbing his hands.  “But may I crave your name ?”

“Pumpelly,” answered my father, looking significantly at me.

“Oh ! yes– may be a relation of Squire Pumpelly, the rich old codger that lives over across the river.  I’ve heard he’s as rich as King Solomon.  Any relation ?”

“His brother,” replied my father, with an air of conscious dignity.

“Well, if ever ! who’d have thought it ?” cried the other, looking rather significantly at my father’s costume, which was somewhat weather-beaten.

“Yes, his youngest brother.  I’m on my way there now, after an absence of several years, in which I have been rather roughly handled, as you see.  But my brother has written to me to come and live with him.”  Here my father began rummaging his pockets.  “Plague take it! what can have gone with the letter ?  O, now I remember I left it in my trunk at the Ferry House down yonder.  But to business, friend Dibdill.  I did’nt like to appear before my brother, the Squire, in such a poor pickle as this, and so I thought I’d rig myself and my boy out a little, that we might not disgrace him.  I went first to the shop down yonder by the ferry, but the fellow’s clothes, I believe, were made with a marlinspike, after measuring with a broomstick.”

The tailor rubbed his hands and chuckled at this, but had the magnanimity not to run down his rival.

“Now to come to the point, my good friend,” continued my father.  “I have not quite enough cash, at present, to pay for these things, and so I will give you the choice, either to wait till I can see my brother, the Squire, or take an order on him for the money.  What say you ? decide quick — for if you wont do either, I must e’en take up with the bungling work of your neighbour yonder, who almost forced his trumpery upon my back.”

The tailor considered a moment, moving his elbows backwards and forwards, from the mere force of habit, as if he was stitching, and then, modestly, and rather hesitatingly, as if fearful of giving offence, decided in favor of the order on Squire Pumpelly.  This was accordingly given, and we departed in triumph, in a quick step.  The tailor slipped upon his shop board, and the last I saw of him he was stitching it away with infinite glee.

I am not ashamed to confess –for I am grown wiser now– that I felt a sort of vague perception, that this operation of my father was not altogether justifiable.  Indeed, I ventured to hint as much;  but his answer silenced my scruples forever.

“Ferret,” said he, “I ought to have bound you apprentice to that simpleton of a tailor, for I fear I shall never make a gentleman of you.  The world will say I have, cheated the fellow, for it is always taking things by the wrong handle, and you seem to think so too.  I maintain on the contrary, that I have paid him double and treble the value of these clothes in the lesson I have given.  The experience he will acquire before many days are over, will answer him two most valuable purposes;  it will guard him from future losses of the kind, and if he makes a proper use of it, enable him to practice the same game on others.  The fact is, boy, in the scale of strict justice, he owes me for half a dozen suits, instead of my being indebted to the stupid hard-working blockhead.  How I hate to see a rascal’s elbow moving at such a rate.”

“Had’nt we better go back, father, and dun him for the balance he owes you ?” asked I.

“Hum– not just now, my son, I’m in too great a hurry to get to Ragamuffinville.”

Accordingly we mended our pace, and in due time arrived safe, at the great city of Ragamuffinville, where my father took lodgings in one of the most expensive and fashionable establishments of the place, observing to me, “that persons who lived by the superiority of their wits, should always go to such places in preference to obscure taverns.  The very fact of stopping at a splendid hotel, was a sort of letter of credit among those two-legged animals, who were created as objects for men of wit to practice upon.

The day after our arrival, my father gave me three dollars, telling me, at the same time, that for the present I must expect nothing more from him but good advice and good example.

“Do you see that little red flag flying over the door yonder ?  That is a place where great bargains can sometimes be made.  Go and try your wits against the auctioneer, and if you come off triumphantly, I predict your fortune is made.  You will be a match for the greatest shaver in the land.”

I obeyed his commands, and came back a “lame duck,” as my father called me.  The man of the hammer had made a speculation out of me, that, is, he had taken me in.  The mode in which he circumvented me was worth ten times the money, and was, in fact, the foundation of the vast property I afterwards possessed, and which, if I could only have paid for, would have made a little German Prince of me.  But I lost all, as will appear in the sequel, by some unlucky democratic experiments, which I revenged myself upon, by calling them “Specie Humbug,” “Infamous Scheme,” &c.  The manœuvres of the auctioneer are too precious to be detailed to the public.  I keep them for the special use of myself and confidential friends.

My father scolded, and laughed, at me at the same time.  “Ferret,” said he, “I did not intend to give you another cent as long as I lived.  But the first error of inexperience is excusable.  Here is two dollars more –go and try your fortune again;  but recollect, if you suffer yourself to be bamboozled this time, you are no longer a son of mine.  Take care how you disgrace yourself by another bad bargain.”

I took the money, and proceeded somewhat disconsolate and mortified along the street, running over the process, by which I had been taken in by the little auctioneer.  All at once, the lecture of my father on the advantage the tailor had derived from the experiment on his credulity, occurred to me, and I determined to turn the sharp edge of my newly acquired experience against others, the first opportunity.  This soon presented itself, and by a process which I shall keep to myself, for the reasons just specified, I succeeded, not only in retrieving my former loss, but making a snug penny besides.  My father received me in triumph, and such was his awakened confidence in the superiority of my wits, that from that hour he predicted my future eminence.  This incident was, indeed, the first step in the ladder.

By good luck an eminent broker happened to hear the particulars of my last exploit.  He was struck with the masterly genius it displayed;  and being a most liberal patron of merit, at once offered to take me into his employment.  Accordingly, I descended into his cellar, where, for a time, I was told to look sharp, listen to every thing, and say nothing.  Here was a noble school to awaken the powers of my mind, and the exercise of my wits.  The head of the house, or rather the cellar, was one of the most profound men of his time, as a proof of which it is only necessary to state, that he began business with no capital but his wits, lived like a prince for several years, without ever being worth a dollar, and finally failed for some millions.  Here was a sublime genius for you.  “Here” –to use the words of my father– “Here is the great Archimedes who can move a world by putting his lever upon nothing.”

This great man watched me narrowly for some months after my first entering into his employ, preparatory to trusting me in his affairs.  There was an old woman who had a table where she sold apples, cakes, and other small wares, which frequently excited my longing, and as she carried on the business just at the window of our cellar, I was tempted to trade with her whenever I had money.  On these occasions, my master watched me closely, and the result of his investigations was exhibited in an increasing confidence.  By degrees, he opened to me the mysteries of the shaving business, and displayed to my mind all the wonders of an invisible world, appealing to the imagination instead of the senses.

The glorious mysteries of kiting, race-horsing, and other occult matters connected with the sublime science of raising the wind;  the manner in which the credit system is built up and sustained, without any thing but itself to stand upon;  the masterly process by which any amount of ideal money may be conjured out of nothing, like the spirit from the cloud, and made to represent ten times the amount of the same sum if it were real;  these and some other of the “great principles,” which constitute the sublime of the new credit system, he could not present to me, for as yet they had no existence, except in the heated chaos of my mind, which, from the period in which I received this first practical insight into the great money, or rather credit, kingdom, continued to boil and bubble with the fever heat of grand conceptions, fighting their way from a faint embryo to a glorious maturity.

But the lessons of my master were of the highest use to me, notwithstanding.  Like streaks of sky, at early dawn, they prepared the way for the god of light and lustre, and, at the same time, taught me to take advantage of the mid-day splendor, which soon after opened upon me.

The city of Ragamuffinville, just about this time, suddenly awakened to a perception of its future greatness, and it come to pass that every body began to live on anticipation.  They looked forward about a hundred years, and saw at the end of the long vista, a vision of grandeur and prosperity, that set them all mad.  They forgot that a hundred years was a long while, and that he who incurred a debt, in the expectation of receiving a great profit at the end of that time, was very likely to die before he could realize his anticipations.

Suddenly, there was a great and increasing demand for money, for all the world had become borrowers, to invest in lots, in order to take advantage of the great rise in value a hundred years hence.  The precious metals not being of a ductile nature, and incapable of expanding fast enough to suit these great exigencies, it became indispensable that some substitute should be found, more suitable to the spirit of the age, and the newly discovered wants of the community.

My master every day lamented to me the contracted sphere of operations to which his genius was confined, by what he called the “infamous Specie Humbug,” meaning the stupid attachment man kind had inherited from the dark ages, to what they called a standard of value.  “If I could only make money out of nothing,” would he exclaim in a paroxysm of enthusiasm, “I would, in a short time, possess the world !”

I brooded on this idea from morning till night, and sometimes lay awake for hours, thinking on the glorious hope of its successful accomplishment.  I often asked myself what was the basis of the value of every thing in the world, and at length came to the conclusion that it was the general estimation of mankind.  I then proceeded to investigate the possibility of substituting an imaginary, for a real, value, and appealing to human credulity as its basis.  Mankind, thought I, worship false gods, adopt false opinions, and arrive at false conclusions.  Many believe the moon is made of green cheese;  is it not possible to make them believe that what is worth nothing intrinsically, is just as good as a thing of inestimable value, provided it will exchange for just as much ?  What, proceeded I, was the intrinsic value of a fathom of Wampum, and yet, in old times, you could purchase a farm with it from the Indians.  I forgot at that time that this Wampum was the product of labor, and therefore represented the value of all the labor bestowed upon it.

While my mind was struggling to emerge from the twilight of these conceptions, into the meridian day, my master began, by degrees, to employ me in transactions which became, every day, more important and consequential.  In the course of them, I daily acquired new ideas and new experience.  I learned the art of evading the laws against usury, without subjecting myself to the penalty of their violation;  I mastered all the mysteries of the business in which I was engaged;  and in good time became such an adept that I could practically define to a hair the precise line which separated a lucky speculation from an act of downright swindling.  I could tell to the utmost nicety, how far it was lawful to play on credulity and ignorance, and the extent to which deception might be carried without constituting a fraud.  In short, I could see my way clear in the darkest transaction, and split a hair with my eyes shut.

I was gradually, though not actually a partner, admitted sometimes to a share in the profits when I had made a good hit, and soon found myself in possession of a snug little sum.  With this, having the approbation of my master, I commenced business on my own account, and considered my fortune as good as made, when, by his influence, I was admitted a member of the Board of Brokers, which, under the present severe laws against every other species of play, enjoys a monopoly of gambling.

In truth, it was carried on upon a great scale.  Not a day passed that some one of us, who, perhaps, was not worth one-fiftieth part of the money, did not play stakes for thousands, and buy or sell what neither possessed, or what, in fact, had no existence.  But every thing was done in the most gentlemanly manner, and all the members were strictly governed by the point of honor, which consisted in taking every possible advantage of each other.

The entire process was a war between buyer and seller.  One member would, for example, offer a thousand shares of some fancy stock;  that is, a stock which had no definite value, and another accept the offer, although the former had not a single share, and the latter not a single dollar to pay for one.  The stock was to be delivered at a certain specified time, and here commenced a great struggle on the part of the buyer and seller, one to depress, the other to raise the price of the stock, by rumors calculated to affect it one way or the other.  It was on one occasion of this kind that I made my first great speculation.

Happening to overhear a bargain of this kind, for a vast number of shares in a certain contemplated rail road, a lucky thought came into my mind.  Without losing a moment, I went and purchased, on time, every share of this stock in the market, and of consequence, the person who had contracted to deliver the amount of shares, which was very large, was under the absolute necessity of applying to me when the period of delivery arrived.  You may depend, I made him pay handsomely, knowing that he would ever after lose the chance of diddling others, if he forfeited his honor on this occasion, by being expelled the Board.  By this operation he lost, and I gained, a little fortune, and what was of no less consequence, a great accession of reputation, on account of my superior sagacity and foresight.

The affair recommended me to a certain bank, which soon after installed me in the office of its chief broker, that is, furnished me with money to shave all the good notes which the directors refused to discount at legal interest.  In this situation it was that I invented the famous mode of dodging the law against usury, by charging all premiums above the legal interest as a commission for my services.

Being now in a prosperous and honorable situation, I began to sigh for the enjoyment of domestic felicity, as I could now afford myself that expensive luxury.  I accordingly sought a partner, and being guided by prudence, as well as inclination, married a lady of a certain age, who had great family interest.  Her father was president of a bank, and three of her uncles bank directors.  This at once initiated me into the mysteries of the “Credit System,” as it existed at that time.

I at once saw its defects, and my mind again reverted, with increasing force and vigour, to the question of a currency founded exclusively on public credulity.  It is true, the banks, as they then existed, possessed great advantages in furnishing a currency, two-thirds, or three-fourths of which was not represented by real value.  Still, this was not the beau ideal of my imagination.  I reflected, and believed in the possibility of perfecting the Credit System, so that it should consist solely of credit, without being adulterated by a single particle of real value.

The period was now come for realizing this long cherished vision of my imagination.  I was rich, in credit and paper-money;  the great city of Ragamuffinville was turning wild with visions of what was going to happen a hundred years hence;  and there was such a demand for money, as all the gold and silver mines of the universe could not supply.  I had also bank influence;  and now set about acquiring political distinction as indispensable to my purposes.  I turned a furious democrat, that party being then uppermost;  attended every ward meeting, and made speeches in favour of Equal Rights;  until, by degrees, I rose to be a member of the general committee for nominating members of Assembly.  When this measure came up, there were so many candidates, and so great a diversity of opinions, that we settled the matter by nominating ourselves, and were triumphantly elected.

It was now that I grasped the reality of what I had so long anticipated.  Before proceeding to the seat of government, I had projected a scheme for a bank, founded on the great principle of making money out of nothing;  a self-constituted, self-existent, perpetual-motion bank-machine, entirely independent of any representative of real value, and which, like a spider, would spin its web for catching flies out of its own bowels.  On opening my scheme to several of my confidential friends, who had submitted to the disgrace of being called democrats for a time, in order that they might make use of their support in the attainment of their object, they were delighted with it, most especially when they found, that my bank required not a dollar for its specie basis.  They eagerly joined me in a memorial to the Legislature, stating that there was a great necessity for an increase of capital in the great city of Ragamuffinville, and a great surplus capital having no profitable means of investment;  and that the applicants being great friends to the Equal Rights of the sovereign people, had come forward, actuated solely by the public good, to request a charter, conferring on them certain privileges, which, though the people were prohibited from exercising, were exclusively for their benefit.  This charter, I employed a friend of mine, a lawyer, unequalled in drafting laws for the purpose of being evaded, to draw up in such a manner as that it would require no capital to pay up the stock, and authorize the corporation to do directly the contrary of what the Legislature intended.  With this, I proceeded, in anticipated triumph, to the fountain of legislation.

On my arrival, I found that almost every member of that honorable body had some scheme or other on the anvil for the public good, and in the benefits of which he expected to participate, only, as one of the people.  I made it my first object to become acquainted with the individual interests of every member, and set about reconciling them all, if possible.  This, however, was a task beyond my power to accomplish, and it then occurred to me that though I could not reconcile, I might unite them all, and thus produce perfect harmony.  This plan was accordingly adopted, and produced the most beneficial consequences.  Each member proceeded on the great and only just principle of reciprocity, that is, each one promised to support every one of these schemes, provided, all the others would support his, and thus, the whole batch was carried triumphantly through our honorable body with only three dissenting voices, consisting of three members who had been guilty of the unpardonable negligence of coming thither without a single project for the public good.  This was the origin of that great modern improvement in legislation, called log-rolling, of which I flatter my self I am the sole inventor.

My bank went through with the rest, and with it commenced the new and most glorious era of that great Credit System, of which it has been truly said, that its destruction would be immediately followed by universal ignorance and barbarism.  My lawyer had incorporated into our charter a phrase of my own invention, and which, in my opinion, and I hope I am not misled by vanity, embodies the greatest improvement ever made in the system of banking, I allude to the provision that the capital of our bank should be either paid in, “OR SECURED TO BE PAID.”

Under this convenient and salutary provision, on the breaking up of the session we returned to Ragamuffinville, and immediately commenced operations.  We began with engraving and filling up notes to the amount of twice our nominal capital, with which we paid the first instalment on our subscriptions for stock, the whole of which, with the exception of a few hundred shares –assigned to some members of the Legislature as a compliment for voting according to their consciences– was distributed among ourselves.  For the remaining instalments, as they became due, we first issued the stock, then gave our notes of hand for the amount, and then pledged the stock as collateral security.

Here then was the credit system brought to that perfection which I had long imagined possible, and now saw realized.  It was the ideal representation of a pyramid reversed;  nothing at the bottom, and a vast expansion of surface at the top.  It was credit founded on credit, paper on paper, and promise on promise.  It might, consequently, be extended to an infinite series, or at least so long as human credulity, that great beast of burden, could be brought to stagger under the blessing.

We had some difficulty in finding a cashier to make oath that our capital was thus “paid in, or secured to be paid;”  but, at length, were lucky enough to catch a man exactly suited to our purposes;  one just emerged from the errors of the dark ages, and who recognised the distinction between the letter and spirit of an oath.  He saw clearly that “secured to be paid,” was an indefinite phrase, and, consequently, meant just what a man pleased to make it.  He, therefore, swore most manfully, and, our bank proceeded to business, by, in the first place, lending twenty-five per cent. more than the whole of its capital to the directors, the cashier, and the president, to wit, myself, who claimed, and received, one-third of the whole as my lawful share.

Having thus achieved the grand desideratum of making money out of nothing, my next step was to turn the discovery to the greatest advantage by changing what was worth nothing for something of real value.  The truth is, I could never entirely discard from my mind certain unpleasant intruding doubts of the stability of my system, and therefore resolved to make hay while the sun shone.  Accordingly, I conceived another grand scheme for the employment of the surplus funds of our institution.  I proposed to a certain number of the members of the Legislature, to which I now no longer appertained, a plan for a great public improvement, that is, a rail road of a few hundred miles in length.

The thing was kept perfectly snug, while, by means of the funds furnished by our Bank, which was capable of expanding like an empty bladder, we proceeded quietly to purchase all the land in the immediate vicinity of the line of the contemplated improvement, which was intended however solely for the public good.  We then once more commenced the system of log-rolling, to which I added another lever of my own invention, to wit, the agency of lobby members, and the law passed by a great majority;  although sturdily opposed by an ignorant, old Dutch member, who insisted that the public good had come to signify nothing but private interest.

Our project went on swimmingly, and such was the rise of property along the contemplated improvement, that it was sold, and resold, on credit, so many times that it was afterwards ascertained it had become the representative of more paper promises of one kind or other, than the whole district of country through which it passed, would sell for, after the great improvement was made.  Such was one of the first triumphs of my new Credit System, the great advantage of which is, that it enables people to run in debt indefinitely, and property to represent fifty times as much paper as it is worth.

As a sort of interlude to this, I became a purchaser of vast tracts of public land in the West, which I paid for in the notes of our bank, on which I expected to realize immense profits, and which, even though it fell in price, would still be worth more than our paper promises, the chief recommendation of which was, that the moment they passed from my hands, as a private person, in payment of a debt, the debt was paid, though they might become ever so worthless afterwards.  This is another great advantage of my newly invented Credit System, if not to those who receive, at least to those that pay.  In this case, as I purchased of Uncle Sam, my conscience was quite easy, for in case the worst came to the worst, the old fellow could afford to lose the money.

I was now rolling in wealth;  the idol of the brokers;  the oracle of financiers;  the controller of the stock market;  the envy of all that miserable race, which lives on real property and labour;  and the founder of cities, for I had laid out six of these on my new lands, or rather on the maps of my lands, some of which threatened to outgrow even the great emporium of Ragamuffinville.  Nay, I don’t know but I may in time become the founder of a great empire on the North Pacific, where I once established an Agency for buying muskrat and mink skins.

But alas! there is nothing perfect in this world, and my, new Credit System, though as near perfection as possible, was unluckily a little out at one of its elbows.  It contained a vile principle, by which it is said, by pretended philosophers, every thing in the natural and moral world is regulated.  I mean the mischievous and abominable principle of REACTION, the greatest enemy to the Credit System which has ever presented itself.  Under the operation of this, it is pretended that the affairs of this world resemble the action of a pendulum, which the farther it is driven one way the farther it will recede on the other, thus ever returning to opposite extremes.

Whether there be such a law of nature, or necessity, or not, certain it is that I now began to experience the existence of some cause or other by which the equilibrium of my new Credit System was sadly disturbed.

At first I ascribed it to the great number of banks which had grown out of the system, with capitals “paid in, or secured to be paid” in a similar manner to ours;  and the operation of the old saying that “too much pudding will choke a dog.”  This however was so contrary to my first principle, namely, that it was utterly impossible to have too much of a good thing, and of course an excess of credit and paper-money, that I discarded it with contemptuous indignation.

At length I hit the nail on the head.  I discovered the origin of all the dangers which now began to threaten my system in two great sources, namely, the “Specie Circular and the Specie Humbug.”  These two humbugs plagued me exceedingly.  The former interfered with the founding of my cities in the West, by striking at the root of my Credit System, which contemplated the entire extension of every thing but promises to pay instead of payments;  and the latter was a serious obstacle to my plan of causing the people to give up their absurd prejudices in favour of silver and gold, by keeping the latter out of sight, until they should actually forget such things ever existed.  I always considered specie as the great ally of ignorance and barbarism, and was convinced in my own mind that an extensive paper circulation representing nothing, and which nobody was obliged to redeem, was the sole agent of refinement and civilization.  And here I must do myself the justice to state that the idea which a “Great Financier,” of the present day has since carried into practice, of issuing the notes of defunct institutions, upon the above principle, was suggested by me in a confidential conversation.

Be this as it may, these two mischievous humbugs caused a sudden revulsion in the flood-tide of my affairs.  The dunderheaded people, I mean the big-pawed Farmers, and the hard-handed Mechanics and Labourers, began once more to recall to mind those demoralizing substitutes for paper-money, silver and gold, which are well denominated in the Scriptures the root of all evil.  Certain mischievous fellows, out of revenge for being disappointed in getting discounts at my bank, began to write essays in some of the newspapers whose editors were in a similar predicament, full of the most disorganizing principles.  They maintained the enormous heresy of Equal Rights;  denounced Monopolies;  denied that a promise was the actual substance of the thing promised, and cancelled the obligation;  and dared to insinuate that a superstructure that had no foundation would be very likely to fall to the ground, the first storm it encountered.  Nay, they had the hardihood to assert that of nothing, nothing could come, and thus struck at the very heart of my system.

In vain did I marshal my forces, consisting of editors of newspapers whom I had conciliated by my generosity, and who repaid me with gratitude;  politicians whom I had linked body and soul with the existence of my system, and who lived and breathed in that alone;  and legislators who had grown out of it like toad stools from rotten wood.  In vain did I set on foot the cry of Loco Foco, Fanny Wright, Robert Dale and Jack Cade;  equally vain that I called on the people who owed more than they could pay;  the people who sighed to make promises they could not fulfil, and all those who desired to live by their wits instead of their labour, to come forth and defend their possessions, their morals and their religion.  All would not do.  The stubborn ignorance of the mass of mankind, which prevents them from knowing when they are well off, or properly distinguishing betwixt happiness and misery, resisted the efforts of reason and virtue;  and it became evident that the crisis of my great Credit System was at hand.

It behooved us, therefore, to make ready for the shock;  and accordingly we proceeded to prepare ourselves for a run upon our Bank.  We had only specie enough in our vaults to pay the postage of our letters, and our capital consisted entirely of the following items:

Firstly.– The notes of hand which represented the stock of the bank.

Secondly.– The stock of the bank which represented the notes of hand.

Thirdly.– The debts due to the bank, to wit, the notes of the president, directors, and editors and politicians, we had thought it prudent to make friends of, in order to resist the stupid, ignorant hostility of the “big paws” and others.  I had almost forgot to mention that somewhat rising one-third more than the whole amount of the nominal capital of our bank, was loaned to myself and the Directors, of which I had by far the largest share, as was but just, seeing I had not only invented the great improvement in the Credit System, but likewise the means of carrying it into execution by log-rolling.

This brief exposition will serve better than any other mode, to exemplify the principles of my system.  The reader will readily perceive that our Bank had actually no other capital than public confidence, or as the infidel Loco Focos, and Fanny Wright men, who believe in nothing but Specie Humbugs, call it, public credulity.  This was the perfection of my system.  It is easy enough to found a Banking System on a specie basis, but to raise it upon credit alone, I consider the triumph of financiering.

Our first act, in order to meet the unreasonable demands of the senseless people who held our notes, a great amount of which we had issued in anticipation to strengthen us against the coming storm, was to discharge a great duty to ourselves.  Charity begins at home, is one of the fundamental maxims of my Credit System.  So we unanimously decided to liquidate our own obligations by cancelling all our respective notes, given as security for the capital stock.  Our next act was, to cancel the certificates of stock pledged by ourselves as collateral security for the stock;  and our third to throw both notes and certificates into the fire.  Thus at once were cancelled all our responsibilities in the most satisfactory manner.

The bank which, according to my great Credit System, originated in nothing, returned to its original element of nothing, and all parties were perfectly content, except those eternal and disorganizing grumblers, the Loco Focos and Jack Cade men whom nothing will satisfy, who came with their hands full of our notes to demand payment, and began to talk of tarring and feathering.  But the Mayor had providentially ordered out the military to overawe these unreasonable villains, and so my gentlemen went home with each a flea in his ear.  I dare say some of them suffered considerably by the loss of a pitiful sum, unworthy the notice of the great inventor of the Credit System, but I have since quieted my conscience by subscribing liberally to soup-houses, and thus fairly quit scores with these wretched, irreligious, demoralized beings.

This equitable adjustment of our affairs placed me on the very pinnacle of prosperity.  I had paid all my debts to the people, and might now have sat down in the enjoyment of a quiet conscience amid unbounded wealth, but the truth is, I longed for a single hundred thousand dollars more, to make up two millions, and unfortunately an opportunity seemed to present itself just in the nick of time.

I had a particular friend, –one with whom I had done business for years past, and regularly got to windward of two or three times a year;  but with all this the fellow crept along prosperously by some inconceivable means beyond my comprehension.  There are such men in the world, and of all beings in the creation they most puzzle me to account for their prosperity.  They themselves pretend to explain it by quoting that stale maxim about honesty being the best policy;  but for my part I never saw honesty achieve such wonders, and accordingly it does not constitute one of the elements of my Credit System.  It is at war with the spirit of the age and the progress of improvement.

Be this as it may, when in consequence of the “suspension” of our Bank, I had got rid of all my responsibilities in the most satisfactory manner, and felt myself perfectly independent of panic and pressure, my worthy friend came to me one day with a proposition to sell a tract of new land, comprising three millions of acres, and several large towns in perspective.  This tract I had originally sold him at a pretty considerable profit, and now thought it would be a capital operation to purchase back again under the depression of the panic which I was convinced would blow over again and be followed by a corresponding reaction of prices.

My worthy friend was excessively alarmed, and consequently very desirous to sell his land, and realize the proceeds, as soon as possible.  I took advantage of his apprehensions, and finally purchased back my land at somewhat less than half of what I received for it, paying him cash in hand.  The poor creature went away highly delighted, and what is not common on such occasions, both parties were perfectly satisfied.  He rejoiced in selling, and I in purchasing, what I was assured would enrich me a few hundred thousands in the end.

This would undoubtedly have been the case if it had not been for the obstinate ignorance and stupidity of our outlandish Government, which about this time began a series of diabolical experiments which played the very mischief with my Credit System, and gradually undermined its only support, namely, the public credulity.  It undertook to refuse my bank notes in payment of the public lands, which operated against my system like a two-edged sword, right and left.  It injured its credit and depressed the price of lands, by demanding payment in specie instead of what all people of good breeding call its “representative.”

It embarrassed me, terribly, and was the commencement of the downfall of one of the greatest estates ever acquired by a single man in the United States.  People when they found themselves obliged to give real value instead of its respectable representative for lands, began to calculate the cost, etc., which they never did before, when they paid in promises which neither themselves nor any body else ever expected to redeem.  Land began to descend rapidly, and like a wagon running down hill, the nearer it got to the bottom the faster it went.  Not content with aiming this blow at the national prosperity, this, outlandish Government not long afterwards proposed the “Infamous Scheme” of a divorce of Bank and State, which completed my downfall.

“Infamous Scheme,” indeed, for what could be more infamous than withdrawing the Government from a partnership in which it furnished a great portion of the capital, and all the credit, while the other parties received all the profits ?  It was in fact a base conspiracy against my system, and accordingly all the really honest patriots raised a hue and cry the moment it made its appearance.  I was one of the first that moved in the business by calling a meeting of every man who owed more than he could pay, in the city of Ragamuffinville –and they were not a few in number– which denounced the Specie Circular, the Infamous Scheme, and the outlandish Administration, which had, by its stupid folly, arrested the career of my Credit System, and ruined the country by prematurely experimenting on the capacity of mankind, to continue the practice of running in debt through an infinite series, as I am convinced can be done, if no mischievous attempts are made to appeal to their common sense and experience.

But I have neither temper nor patience to detail all the mischievous follies and stupid experiments of our outlandish Government, and, besides, the details of my decline are by no means so agreeable to my recollection as those of my rise.  Suffice it to say, that the great land speculation I made out of my simple friend, as I thought him at the time, was the primary cause of my catastrophe.  The blunders of this outlandish Government had arrested the glorious career of speculation, which like a top the moment it ceases to whirl round, falls to the ground.  I had risen with speculation, and I fell with speculation.  I had lived for years in the anticipation of a rise in the value of every thing on the face of the earth, except paper-money, and as soon as prices declined I became, to all intents and purposes, “a lame duck.”

It is unnecessary to, enter into details, as my object is not to record my descent, but my ascension.  Suffice, it to say, that the vile persecutions and egregious blunders of our outlandish Administration at length brought me to a “suspension,” that being the genteel phrase for what used to be called bankruptcy.  And here I will pause a moment to observe on the truth of the Conservative theory, that my Credit System is the parent of all that is pure and refined in human society.  In nothing is this more strikingly exemplified than the refinements it has brought about in our language.  In the “iron money and black broth” days of specie circulation, when a man could not or would not pay his debts he was called a bankrupt, now he has only suspended;  taking in another in a bargain, was called swindling, now it is speculation;  running in debt without paying, or having any prospect of doing it, is now enterprise;  crime is imprudence, and murder, a great misfortune.

But if any doubt remains of the beautiful perfection of my system, it will be found in the following fact which I record as the consummation of its triumphs.  I had for more than fifteen years lived in the greatest luxury and splendor;  I had spent in that time upwards of two hundred and fifty thousand dollars;  I had held property to the amount of between two and three millions, and yet when I came to investigate my affairs critically, I found that at no period of my prosperity had I ever been worth a dollar in the world !  In short, I had been over head and ears in debt every moment of that time.

Can any one after this doubt for a single moment the perfection of my Credit System ?  Can any man that loves his country or his species, refrain from joining with me in denouncing the Specie Circular, the Specie Humbug, the Infamous Scheme, and the tissue of blundering ignorance exhibited by our outlandish Administration ?  But for these I might have gone on accumulating “responsibilities” and spending money like dirt, to the end of my life, and what if my debts had increased all that time ?  It would only have been a few hundred thousand dollars more issues of paper money, by some body or other, and the vacuum would have been supplied.  This is the great beauty of my system.  It works by an infinite series, as it were, and there is only one trifling thing wanting, namely, that there should be all debtors, and no creditors, in the world.

I don’t despair of bringing this about, when, as will certainly be the case a couple or three years hence, our ignorant outlandish Administration is replaced by my disciples of the Credit System.  Then shall we see the age of Internal Improvements, unexampled exquisite refinement, and unlimited public prosperity, for then will every body owe and nobody pay;  then will the wealth of the nation, like that of England, be demonstrated by the amount of its debt;  then will the true Agrarian principle be in practical operation, for a man who borrows a hundred thousand dollars will be as rich as the one that lends it;  and then there will be no occasion for a bottom to the sea, for the whole world will be adrift on its surface.

Such are the anticipations with which I solace the lazy hours of my temporary retirement from the business of the world.  My other auxiliary comfort is in recalling the busy scenes of my former career, and either suggesting great speculations to others, or imagining the muse for myself.  In this way I endeavour to get rid of the desperate ennui of a life free from the perplexity and distraction of being out of debt.  I have compounded with my creditors at a pistareen in the pound, and the leaden depression consequent on being freed from the excitement of getting up every morning, without knowing whether I should not be “suspended” before night;  and going to bed every night with the anticipation of being a lame duck the next morning, is now the principal evil of which I complain.  It is inconceivable what interest such vicissitudes communicated to life, and were it not that I look forward to the speedy downfall of our ignorant outlandish Administration, and the resuscitation of my Credit System in more than its past glory, I really believe I should be obliged to turn philanthropist, to pass away the time.

P.S.  I forgot to mention that on my retirement from the presidency of my bank, the Directors unanimously voted me a service of plate, worth twenty thousand dollars;  and that my father, to whose lessons I am indebted for every blessing I have enjoyed or anticipated, has lately been appointed by the Federal Common Council of Ragamuffinville, Chairman of the Finance Committee, on account of his great talent at “raising the wind,” which is now the principal employment of our States and Corporations>

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