Part 12 (1/2)

[103] Journal of the [New York] Senate, 1815:216--Journal of the [New York] a.s.sembly, 1818:261; Journal of the a.s.sembly, 1819. Also ”A Statement and Exposition of The t.i.tle of John Jacob Astor to the Lands Purchased by him from the surviving children of Roger Morris and Mary, his Wife”; New York, 1827.

[104] MSS. Minutes of the (New York City) Common Council, xvi:239-40 and 405.

[105] Ibid., xx: 355-356.

[106] MSS. Minutes of the Common Council, xiii: 118 and 185.

[107] MSS. Minutes of the Common Council, xvii: 141-144. See also Annual Report of Controller for 1849, Appendix A.

[108] MSS. Minutes of the Common Council, xviii: 411-414.

[109] Doc. No. 33, Doc.u.ments of the Board of Aldermen, xxii:26.

[110] Proceedings of the Board of Aldermen, 1832-33, iv: 416-418.

[111] Controller's Reports for 1831:7. Also Ibid. for 1841:28.

CHAPTER IV

THE RAMIFICATIONS OF THE ASTOR FORTUNE

Astor flourished at that precise time when the traders and landowners, flushed with revenues, reached out for the creation and control of the highly important business of professionally dealing in money, and of dictating, personally and directly, what the supply of the people's money should be.

This signalized the next step in the aggrandizement of individual fortunes. The few who could center in themselves, by grace of Government, the banking and manipulation of the people's money and the restricting or inflating of money issues, were immediately vested with an extraordinary power. It was a sovereign power at once coercive and proscriptive, and a mighty instrument for transferring the produce of the many to a small and exclusive coterie. Not merely over the labor of the whole working cla.s.s did this gripping process extend, but it was severely felt by that large part of the landowning and trading cla.s.s which was excluded from holding the same privileges. The banker became the master of the master. In that fierce, pervading compet.i.tive strife, the banks were the final exploiters. Spa.r.s.ely organized and wholly unprotected, the worker was in the complete power of the trader, manufacturer and landowner; in turn, such of these divisions of the propertied cla.s.s as were not themselves sharers in the owners.h.i.+p of banks were at the mercy of the banking inst.i.tutions.

At any time upon some pretext or other, the banks could arbitrarily refuse the latter cla.s.s credit or accommodation, or hara.s.s its victims in other ways equally as destructive. As business was largely done in expectations of payment, in other words, credit, as it is now, this was a serious, often a desperate, blow to the lagging or embarra.s.sed brothers in trade. Banks were virtually empowered by law to ruin or enrich any individual or set of individuals. As the banks were then founded and owned by men who were themselves traders or landholders, this power was crus.h.i.+ngly used against compet.i.tors. Armed with the strong power of law, the banks overawed the mercantile world, thrived on the industry, misfortune or ruin of others, and swayed politics and elections. The bank men loaned money to themselves at an absurdly low rate of interest. But for loans of money to all others they demanded a high rate of interest which, in periods of commercial distress, overwhelmed the borrowers. Nominally banks were restricted to a certain standard rate of interest; but by various subterfuges they easily evaded these provisions and exacted usurious rates.

BANKS AND THEIR POWER.

These, however, were far from being the worst features. The most innocent of their great privileges was that of playing fast and loose with the money confidingly entrusted to their care by a swarm of depositors who either worked for it, or for the matter of that, often stole it; bankers, like p.a.w.nbrokers, ask no questions. The most remarkable of their vested powers was that of manufacturing money. The industrial manufacturer could not make goods unless he had the plant, the raw material and the labor. But the banker, somewhat like the fabled alchemists, could trans.m.u.te airy nothing into bank-note money, and then, by law, force its acceptance. The lone trader or landholder unsupported by a partners.h.i.+p with law could not fabricate money. But let trader and landholder band in a company, incorporate, then persuade, wheedle or bribe a certain ent.i.ty called a legislature to grant them a certain bit of paper styled a charter, and lo! they were instantly transformed into money manufacturers.

A MANDATE TO PREY.

The simple mandate of law was sufficient authorization for them to prey upon the whole world outside of their charmed circle. With this sc.r.a.p of paper they could go forth on the highways of commerce and over the farms and drag in, by the devious, absorbent processes of the banking system, a great part of the wealth created by the actual producers. As it was with taxation, so was it with the burdens of this system; they fell largely upon the worker, whether in the shop or on the farm. When the business man and the landowner were compelled to pay exorbitant rates of interest they but apparently had to meet the demands. What these cla.s.ses really did was to throw the whole of these extra impositions upon the working cla.s.s in the form of increased prices for necessaries and merchandise and in augmented rents.

But how were these State or Government authorizations, called charters, to be obtained? Did not the Federal Const.i.tution prohibit States from giving the right to banks to issue money? Were not private money factories specifically barred by that clause of the Const.i.tution which declared that no State ”shall coin money, emit bills of credit, or make anything but gold or silver a tender in payment of debts?”

Here, again, the power of cla.s.s domination of Government came into compelling effect. The onward sweep of the trading cla.s.s was not to be balked by such a trifling obstacle as a Const.i.tutional provision. At all times when the Const.i.tution has stood in the way of commercial aims it has been abrogated, not by repeal nor violent overthrow, but by the effective expedient of judicial interpretation. The trading cla.s.s demanded State created banks with power of issuing money; and, as the courts have invariably in the long run responded to the interests and decrees of the dominant cla.s.s, a decision was quickly forthcoming in this case to the effect that ”bills of credit” were not meant to cover banknotes. This was a new and surprising construction; but judicial decision and precedent made it virtually law, and law a thousandfold more binding than any Const.i.tutional insertion.

COURTS AND CONSt.i.tUTION.

The trading cla.s.s had already learned the importance of the principle that while it was essential to control law-making bodies, it was imperative to have as their auxiliary the bodies that interpreted law.

To a large extent the United States since then has lived not under legislative-made law, but under a purely separate and extraneous form of law which has superseded the legislature product, namely, court law.

Although nowhere in the United States Const.i.tution is there even the suggestion that courts shall make law, yet this past century and more they have been gradually building up a formidable code of interpretations which substantially ranks as the most commanding kind of law. And these interpretations have, on the whole, consistently followed, and kept pace with, the changing interests of the dominant cla.s.s, whether traders, slaveholders, or the present trusts.