Moreover, even under such restrictions, men must still depend mainly upon each other's good faith and enlightened self-interest; seeing that only hy requiring the banker to keep sufficient specie in his coffers to cash all the notes he has issued, can complete security be given to the holders of them; and to require as much is to destroy the motive for issuing notes. It should be remembered, too, that even now the greater part of our paper currency is wholly unguaranteed. Over the bills of exchange in circulation", which represent liabiUties three times as great as are represented by notes, no control is exercised. Por the honouring of these there exists no special security, and the multiplication of them is without any limit, save that natural one above mentioned — the credit men find it safe to give each other.
Lastly, we have experience completely to the point. Whilst in England banking has been perpetually controlled, now by privileging the Bank of England, now by limiting banking partnerships, now by prohibiting banks of issue within a specified circle, and now by restricting the amounts issued — whilst " we have never rested for many years together without some new laws, some new regulations, dictated by the fancy and theory fashionable at particular periods"''- — and whilst " by constant interference we have prevented public opinion, and the experience of bankers themselves, adapting and moulding their business to the best and safest course""^ — there has existed in Scotland for nearly two centuries a wholly uncontrolled system, — a complete free-trade in currency. And what have been the comparative results? Scotland has had the advantage, both ° Tfaougli not literally currency, bills of exchange, serving in many cases to effect mercantile transactions whicli would otherwise be effected in money, to that extent perform its function.
^ Capital, Currency, and Banking. By James Wilson, Esq., M.P. ' Ibid.
CnRRENCY, POSTAL ARRANGEMENTS, ETC. 399 in security and economy. The gain in security is proved by the fact that the proportion of bank failures in Scotland has been far less than iu England. Though " by law there has never been any restriction against any one issuing notes in Scotland; yet, in practice, it has ever been impossible for any unsound or nnsafe paper to obtain currency."* And thus the natural guarantee in the one case has been more ejfficient than the legislative one in the other. The gain in economy is proved by the fact that Scotland has carried on its business vdth a circulation of £3,500,000, -whilst ia England the circulation is from ^650,000,000 to £60,000,000; or, allowing for difference of popiilation, England has required a currency three times greater than Scotland.
When, therefore, we find a priori reason for concluding that in any given community the due balance between paper and coin will be spontaneously maintained — when we also find that three-fourths of our own paper circulation is selfregulated — that the restrictions on the other fourth entail a useless sinking of capital — and further, that facts prove a selfregulated system to be both safer and cheaper, we may fairly say, as above, that legislative interference is not only needless, but injurious.
If evil arises when the state takes upon itself to regulate currency, so also does evil arise when it turns banker. True, no direct breach of duty is committed in issuing notes; for the mere transfer of promises to pay to those who wiU take t"hem, necessitates neither infringement of men's rights nor the raising of taxes for illegitimate purposes. And did the state confine itself to this, no harm would result; but when, as in practice, it makes its notes, or, rather, those of its proxy, legal tender, it both violates the law of equal freedom and opens the door to abuses that were else impossible. Having enacted that its agent's promises to pay shall be taken in discharge of all claims between man and man, there readily " Capital, Currency, and BanJdng. By James "Wilson, Esq., M.P.
follows, -when occasion calls, the further step of enacting that these promises to pay shall be taken in discharge of all clauns on its agent. This done, further liabilities are iucurred without difficulty, for they can be liquidated in paper. Paper continues to be issued without hmit, and then comes depreciation; which depreciation is virtually an additional taxation, imposed without the popular consent— a taxation which, if directly imposed, would make men reahze the extravagance of their national expenditure, and condemn the war necessitating it. Seeing, then, that there could never occur depreciation, and its concomitant evils, were there no notes made inconvertible by act of parliament — and seeing that there could never exist any motive to make notes legally inconvertible, save for purposes of state-banking— there is good reason to consider state-banking injurious. Should it be urged that, for the occasional evils it entails, state-banking more than compensates by the habitual supply of many millions' worth of notes, whose place could not be supplied by other notes of equal credit, it is rephed that had the Bank of England no alliance with the state^, its notes would stiU circulate as extensively as now, provided its proprietors continued their sohcitude (so constantly shown at the halfyearly meetings) to keep their assets more than three millions above their habilities.
There is a third capacity in which a government usually stands related to the currency, viz., as a manufacturer of coins. That in theory a government may carry on the trade of stamping bullion without necessarily reversing its proper function is admitted. Practically, however, it never does so without collaterally transgressing. For the same causes which prevent it from profitably competing with private individuals in other trades, must prevent it from profitably competing * The alliance consists in this, that on the credit of a standing debt of £14,000,000, due from the Government to the Bank, the Bank is allowed to issue notes to that amount (besides further notes on other security), and hence to the extent of this debt the notes have practically a Government guarantee.
with them in this — a truth which inquiry into the management of the mint will sufficiently enforce. And if so, a government can manufacture coins without loss, only hy forbidding every one else to manufacture them. By doing this, however, it diminishes men's hberty of action in the same way as by any other trade restriction — iu short, does wrong. And, ultimately, the breach of the law of equal freedom thus committed results in society having to pay more for its metalUc currency than would otherwise be necessary.
Perhaps to many it wiU seem that by a national mint alone can the extensive diffusion of spurious coinage be prevented. But those who suppose this, forget that under a natural system there would exist the same safeguards against such an evil as at present. The ease with which bad money is distinguished from good, is the ultimate guarantee for genuineness; and this guarantee would be as efficient then as now. Moreover, whatever additional security arises from the punishment of " smashers " would still be afforded; seeing that to bring to justice those who by paying in base coin obtain goods "under false pretences," comes within the state's duty. Should it be urged that in the absence of legislative regulations there would be nothing to prevent makers from issuing new mintages of various denominations and degrees of fineness, the reply is that only when some obvious public advantage was to be obtained by it, could a coin differing from current ones get into circulation. Were private mints now permitted, the proprietors of them would be obUged to make their sovereigns like existing ones, because no others would be taken. For the size and weight — they would be tested by gauge and balance, as now (and for a while with great caution). For the fineness — it would be guaranteed by the scrutiny of other makers.
Competing firms would assay each other's issues whenever there appeared the least reason to think them below the estabUshed standard, and should their suspicions prove correct, would quickly find some mode of diffusing the infomiation. Probably a single case of exposure and the consequent 40Ji CURRENCY, POSTAL ARRANGEMENTS, ETC.
ruin would ever after prevent attempts to circulate coins of inferior fineness."
It is not unlikely that many readers, though unprepared with definite replies to these reasonings, will stiU doubt their correctness. That the existing monetary system— an actual working system, seemingly kept going hy the state— would be benefited by the withdrawal of state- control, is a belief which the strongest arguments will in most cases fail to instil. Custom wiU bias men in this case, much as in another case it does the vine-growers of France, who, having long been instructed by state- commissioned authorities when to commence the vintage, believe that such dictation is beneficial. So much more does a reahzed fact influence us than an imagined one, that had the baking and sale of bread been hitherto carried on by government-agents, probably the supply of bread by private entei-prise would scarcely be conceived possible, much less advantageous. The philosophical free-trader, however, remembering this efiect of habit over the convictions — remembering how innumerable have been the instances in which legislative control was erroneously thought necessary — remembering that in this very matter of currency men once considered it requisite " to use the most ferocious measures to bring as much foreign bullion as possible into the country, and to prevent any going out" — remembering how that interference, hke others, proved not only needless but injurious — remembering thus much, the philosophical free-trader will infer that in the present instance also, legislative control is m -desirable.
Reasons for considering trade in money an exception to the general rule, wiU weigh but little with him; for he will recollect that similar reasons have been assigned for restricting various •" Whilst these sheets are passing through the press, &cts, which he is not now at liberty to quote, have been communicate<i to the writer, conclusively proving the superior economy of a coin-nianu&cture conducted by private individnals; together with other facts suggesting the obvious truth that the debasement of coinage, from which our forefathers suifered so much, was made possible only by legal compulsion — would never have been possible had the currency been left to itsell CDRRENCY, POSTAL ARRANGEMENTS, ETC. 403 trades, and disproved by the results. Eatlier wiU he conclude that as, in spite of all prophecies and appearances to the contrary, entire freedom of exchaBge has been beneficial in other cases, so, despite similar prophecies and adverse appearances, will it be beneficial in this case.
What was lately said respecting the stamping of bullion may here be repeated respecting the carrying of letters, viz., that it is not intrinsically at variance with state-duty; for it does not in the abstract necessitate any infringement of men's rights, either directly, or by taxes raised for non-protective purposes. Nevertheless, just as we found reason to think that government could not continue to manufacture coin unless by preventing private individuals from doing the same, we shall also find reason to think that it would cease to carry letters did it not forbid competition. And if so, a government cannot undertake postal functions without reversing its essential function.
Evidence that private enterprise would supersede stateagency in this matter, were it allowed the opportunity, is deducible not only from our general experience of the inferiority of government in the capacity of manufacturer, trader, or manager of business, but fi-om facts immediately bearing upon the question. Thus we must remember that the efiSciency to which; our postal system has actually attained is not due to its being under public administration, but is due to pressure from without. Changes have been forced upon the authorities, not introduced by them. The mail-coach system was estabUshed, and for a length of time managed, by a private individual, and Hved down official opposition. The reform originated by Mr. Eowland HiU was strenuously resisted; and it is generally reported that even now, official perversity prevents his plans from being frilly carried out. Whereas, seeing that the speculative spirit of trade is not only ready, but eager to satisfy social 404 CDRRENCY, POSTAL ARRANGEMENTS, ETC.
■wants, it is probable that under a natural state of things modem postal improvements would have been willingly adopted, if not forestalled. Should it be alleged that private entei-prize would not be competent to so gigantic an undertaking, it is replied that already there are extensive organizations of analogous character which work well. The establishments of our large carriers ramify throughout the whole kingdom; whilst we have a Parcels' Deliveiy Company, co-extensive in its sphere with the London District Post, and quite as efficient. Private agencies for communicating information beat public ones even now, wherever they are permitted to compete with them. The foreign expresses of our daily papers are uniformly before the government expresses. Copies of a royal speech, or statements of an important vote, are diffused throughout the country by the press, with a rapidity exceeding that even achieved by the Post Office; and if expedition is shown in the stamping and sorting of letters, it is far surpassed by the expedition of parliamentary reporting. Moreover, much of the postal service itself is already performed by private agency. Not only are our internal mails carried by contract, but nearly all our external ones also; and where they are carried by government they are carried at a great loss. In proof of which assertion it needs but to quote the fact that the Peninsular and Oriental Steam Navigation Company offers to secure for us a direct monthly communication with Australia; two communications, monthly, from Southampton to Alexandria; two communications, monthly, fi-om Suez to Ceylon, Singapore, and China; and two communications, monthly, from Calcutta to Singapore and China; besides performing the sei-vice twice a month between Suez and Bombay, and all for the same sum of money which the latter sei-vice alone (Suez to Bombay) now costs the governments of India and Great Britain.
If, then, public letter-carrying has been brought to its existing efficiency by the thought, enterprize, and urgency of private persons, in spite of official resistance — if organizations similar to our postal ones already exist and work well — if, as conveyers of intelligence by other modes than the mail, trading bodies uniformly excel the s^te — if much of the mail service itself is performed by such trading bodies, and that, too, on the largest scale, with incomparably greater economy than the state can perform it with — there is nothing unreasonable in the conclusion that, were it permitted, commercial enterprize would generate a lettor-carrying system as efficient as, if not more efficient than, our present one. It is trae that many obstacles stand in the way of such a result. But because it is now scarcely possible to see our way over these, it does not at all follow that they may not be surmounted. There are moral inventions, as well as physical ones'. And it frequently happens that the instramentalities which ultimately accomplish certain social desiderata, are as Httle foreseen as are the mechanical appliances of one generation by the previous one. Take the Railway Clearing House for an example. Hence it is not too much to expect that under the pressui-e of social necessity, and the stimulus of self-interest, satisfactory modes of meeting all such difficulties would be discovered.
However, any doubts which may still be entertained on the point do not militate against our general principle. It is clear that the restriction put upon the liberty of trade, by forbidding private letter-carrying estabhshments, is a breach of state-duty. It is also clear that were that restriction abolished, a natural postal system would eventually grow up, could it surpass in efficiency our existing one. And it is further clear that if it could not surpass it, the existing system might rightly continue; for, as at first said, the fulfilment of postal functions by the state is not intrinsically at variance with the fulfilment of its essential function.
The execution by government of what are commonly called public works, as hghthouses, harbours of refuge, &c., implying, as it does, the imposition of taxes for other purposes than maiataining men's rights, is as much forbidden by our definition of state-duty as is a system of national education, or a rehgious establishment. Nor is this unavoidable inference really an inconvenient one; however much it may at first seem so. The agency by which these minor wants of society are now satisfied, is not the only agency competent to satisfy them. Wherever there exists a want, there will also exist an impulse to get it fulfilled, and this impulse is sure, eventually, to produce action. In the present case, as in others, that which is beneficial to the community as a whole, it will become the private interest of some part of the community to accomphsh.
And as this private interest has been so ef&cient a provider of roads, canals, and railways, there is no reason why it should not be an equally efficient provider of harbours of refuge, hghthouses, and all analogous appHances. Even were there no classes whose private interests would be obviously subserved by executing such works, this inference might still be defended. But there are such classes. Ship-owners and merchants have a direct and ever-waking motive to diminish the dangers of navigation; and were they not taught by custom to look for state-aid, would themselves quickly unite to establish safeguards. Or, possibly, they would be anticipated by a combination of Marine Insurance Of&ces (themselves protective institutions, originated by self-interest). But inevitably, in some way or other, the numerousness of the parties concerned, and the largeness of the capital at stake, would guarantee the taking of all requisite precautions. That enterprise which built the docks of London, Liverpool, and Birkenhead — which is enclosing the Wash — which so lately bridged the Atlantic by steam — and which is now laying down the electric telegraph across the Channel — might safely be trusted to provide against the contingencies of coast navigation.
PART IV.
CHAPTEE XXX.
Social philosophy may be aptly divided (as political economy has been) into statics and dynamics; the first treating of the equilibrium of a perfect society, the second of the forces by which society is advanced towards perfection. To determine what laws we must obey for the obtainment of complete happiness is the object of the one, whilst that of the other is to analyze the influences which are making us competent to obey these laws. Hitherto we have concerned ourselves chiefly with the statics, touching upon the dynamics only occasionally for purposes of elucidation. Now, however, the dynamics claim special attention. Some of the phenomena of progress already referred to need further explanation, and many others associated virith them remain to be noticed. There are also sundry general considerations not admissible into foregoing chapters, which may here be fitly included.
And first let us mark, that the course of civiHzation could not possibly have been other than it has been. Whether a perfect social state might have been at once estabUshed; and why, if it might have been, it was not — why for unnumbered ages the world was filled with inferior creatures only — and why mankind were left to make it fit for human life by clearing it of these — are questions that need not be discussed here. But given an unsubdued earth; given the being — man, appointed to overspread and occupy it; given the laws of life what they are; and no other series of changes than that which has taken place, could have taken place.
For be it remembered, that the ultimate purpose of creation — the production of the greatest amount of happiness — can be fulfilled only under certain fixed conditions (p. 68). Each member of the race fulfilling it, must not only be endowed with faculties enabling him to receive the liighest enjoyment in the act of living, but must be so constituted that he may obtain full satisfaction for every desire, without diminishing the power of others to obtain Kke satisfaction: nay, to fulfil the purpose perfectly, must derive pleasure from seeing pleasure in others.
Now, for beings thus constituted to multiply in a world already tenanted by inferior creatures — creatures that must be dispossessed to make room — is a manifest impossibility. By the definition such beings must lack all desire to exterminate the races they are to supplant. They must, indeed, have a repugnance to exterminating them, for the ability to derive pleasure from seeing pleasure, involves the liability to pain from seeing pain: the sjonpathy by which either of these results is efiected, simply having for its function to reproduce observed emotions, irrespective of their kind. Evidently, therefore, having no wish to destroy — to destroy giving them, on the contrary, disagi-eeable sensations — these hj'pothetical beings, instead of subjugating and overspreading the earth, must themselves become the prey of pre-existing creatures, in whom destructive desires predominate. How then are the circumstances of the case to be met? Evidently the aboriginal man must have a constitution adapted to the work he has to perform, joined with a dormant capabOity of developing into the ultimate man when the conditions of existence permit. To the end that be may prepare the earth for its future inhabitants— his descendants, he must possess a character fitting him to clear it of races endangering his life, and races occupying the space required by mankind. Hence he must have a desire to kill, for it is the universal law of life that to every needful act must attach a gratification, the desire for which may serve as a stimulus (p. 19). He must further he devoid of sympathy, or must have hut the germ of it, for he would otherwise he incapacitated for his destructive ofBce. In other words, he must he what we call a savage, and must he left to acquire fitness for social Hfe as fast as the conquest of the earth renders social hfe possible.
Whoever thinks that a thoroughly-civilized community could he formed out of men quaUfied to wage war with the pre-existing occupants of the earth — that is, whoever thinks that men might behave sympathetically to their fellows, whilst behaving unsympathetically to inferior creatures, wiU discover his error on looking at the facts. He will find that human beings are cruel to one another, in proportion as their habits are predatoiy.
The Indian, whose life is spent in the chase, dehghts in torturing his brother man as much as in kilUng game. His sons are schooled into fortitude by long days of torment, and his squaw made prematurely old by hard treatment. The treachery and vindictiveness which Bushmen or Austrahans show to one another and to Europeans, are accompaniments of that neverceasing enmity existing between them and the denizens of the wilderness. Amongst partially-civilized nations the two characteristics have ever borne the same relationship. Thus the spectators in the Eoman amphitheatres were as much deUghted by the slaying of gladiators as by the death-struggles of wild beasts. The ages during which Europe was thinly peopled, and hunting a chief occupation, were also the ages of feudal violence, universal brigandage, dungeons, tortures. Here in England a whole province depopulated to make game preserves, and a law sentencing to death the serf who killed a stag, show how great activity of the predatory instinct and utter indifference to human happiness coexisted. In later days, when brdl-baiting and cock-fighting were common pastimes, the penal code was far more severe than now; prisons were full of horrors; men put in the pillory were maltreated by the 413 GENERAL CONSIDEIUTIONS.