Lysander Spooner (19 January 1808 – 14 May 1887) was one of those rare individuals whose lives are dominated by a world-vision that takes priority over all other concerns. In Spooner's case, it was a vision of a human society adhering to a universal sense – and practice – of justice governed by natural law – as opposed to being governed by the transient expediencies of near-term human advantages for some, at the expense of collateral disadvantages for others. Such individuals are rare, because most humans, in all times and places, seem to be so thoroughly involved with the minutia of their own individual lives that they have little or no time for contemplation of the issues that absorbed Spooner's attention throughout his life.
In the course of his lifetime, Spooner was a school teacher, a tutor, a lawyer, a keen legal writer, a bank clerk, a land speculator, an economist, an inventor, a businessman, a Deist, an abolitionist, and an anarchist. He was born on his father's farm near Athol, Massachusetts, the second of six boys and three girls.
Spooner's early life was typical in the rural New England of his time, characterized by discipline, hardship, and toil. In that culture, from the 1600s, children were typically sent to live with a different family, so as to avoid the dilution by parental affection of rigorous discipline. Lysander, however, remained at home, thus incurring obligations to compensate his father for having fed and reared him. Between the ages of 16 and 25, Lysander was bound by a form of apprenticeship to his father, in exchange for room and board, and "good educational advantages." Whatever these may have been, they qualified the young Spooner for a position as a school teacher, and later as the tutor of a wealthy farmer's children in Winchendon, Massachusetts.
Spooner's legal career had its beginnings in 1833, in the Worcester offices of prominent Whig John Davis (1787 – 1854), two-term Governor of Massachusetts, and United States Senator. Because Davis's political career often called him away from Worcester, Spooner probably received most of his legal training from Charles Allen (1797 – 1869), then State Senator from Worcester, and later Chief Justice of the Supreme Court.
As jurists, Davis and Allen were independent thinkers, conservative, and rigorously logical in their views; and Spooner followed in their footsteps, modeling his later life upon that of Davis. They were outspoken opponents of slavery long before abolition became a popular cause in Massachusetts, and Spooner sustained a passion for individual liberty and responsibility throughout his life.
Admission to the bar in Massachusetts required three years' study in the offices of a practicing attorney for college graduates; five years' study for non-graduates. A college education at the time was entirely classical, and contributed nothing toward a legal career, beyond the gloss of academic polish. Spooner considered this requirement discriminatory against the "well-educated poor," and his mentors encouraged him to challenge the rule.
Spooner established his own legal practice 8 April 1835 (perhaps jumping the gun a bit, even on college graduates), and published in the Worcester Republican, 26 August, a petition "To the Members of the Legislature of Massachusetts," which he also distributed to each member of the Massachusetts General Court. In it he argued that all individuals deserve an opportunity to prove themselves by their own merits. "[N]o one has yet ever dared advocate," he wrote, "...so monstrous a principle as that the rich ought to be protected by law from the competition of the poor."
Having the former and future Governor of Massachusetts, and a State Senator in his corner, didn't damage Spooner's position at all: the restriction was voted down in the 1836 legislative session.
Nevertheless, Spooner's legal career was not crowned with success. In addition to his legal studies, he also studied theology and philosophy, and roundly criticized the rational basis for conventional Christian mythology in such essays as The Deist's Immortality, and Essay on Man's Accountability for his Belief (1834), and in The Deist's Reply to the Alleged Supernatural Evidences of Christianity (1836). He dismissed Jesus Christ as a charlatan, and the Bible as at best a collection of old wives' tales.
While there may have been some who sympathized with Spooner's views, few or none were willing to admit as much in public; and Spooner's reputation as an atheist (notwithstanding his profession as a Deist), and his harsh and uncompromising criticism of common beliefs, attracted few clients to his law practice. During his first year in business he was unable to meet his living expenses.
This led Spooner, in March, 1836, to seek and secure employment as a bank clerk for the National Bank of New York City, which enabled him to pay his bills; a position he held for less than a year.
Instead, Spooner was lured by the fortunes being made in the American West. The 1830s were boom-times for America, and much of this had to do with the opening of the West. The Erie Canal, completed in 1825, connected Lake Erie at Buffalo with the Hudson River near Troy, opening access to the Atlantic Ocean of the continental interior, and facilitating trade along its entire route. Every juncture of rivers, of a river with a lake, or a rapids where locks had to be maintained, was a place where fortunes could be made by land speculators holding title to the sites of future towns and major cities. Rochester, where the Genesee River intersects the Erie Canal, Cleveland at the head of the Cuyahoga River, Sandusky on Sandusky Bay at the head of the Sandusky River, and Toledo where the Maumee River flows into Lake Erie, are examples of important centers of commerce that emerged in the path of westward expansion.
The name of the game was to purchase at the government price of $1.25 per acre wilderness at carefully selected locations in the path of expansion, and sell them to the builders of townships and future metropolises at $100 to $20,000, depending upon what the market might bear. The wild card in the game was then, and is still, that predicting the path of expansion is often an iffy proposition. For those who "guess right," it can be a bonanza; for those who don't, a wipe-out.
In 1836, when Spooner got in (a year before the Panic of 1837), the game was being played most intensively in the Maumee River Basin in Ohio, where speculative purchases were typically financed by mortgages with very small down payments. Government land at the time could be bought with bank notes backed by such mortgages. However, the first chartered bank in the Maumee Valley didn't open until 1834, and it was the only one; so bank notes were chronically scarce. Most speculators did without bank notes altogether, and simply gambled with one another's promissory notes. When the whole system collapsed, speculators typically lost their investments, or got out with basically what they had gotten in with, which may have been very little, or nothing at all.
In 1837, Spooner bought 80 acres on the Maumee at a location upstream from present-day Toledo, where a stretch of rapids seemed to provide a favorable site for a great metropolis. At the time, however, this part of the vast wilderness was populated by only 12 separate villages along 15 miles of river frontage, which have since disappeared, or been absorbed into metropolitan Toledo. Like all his speculative peers, Spooner had hopes that a canal would pass his site, or preferably end there; but this was the iffy side of the game.
In the event, other interests, with other agendas, had developed a proposal which included a dam about three miles upstream from Spooner's site; which would have the effect of excluding it not only from the proposed canal, but from navigation on the Maumee altogether. This was not a "done deal," but it was a definite threat to Spooner's investment, and to his hopes for fabulous wealth.
At this point, Spooner put his legal training to use, and sought an injunction in the Columbus Federal District Court against the building of any dam across the Maumee. He had not been admitted to the Federal Court, so was represented by Swayne & Brown, a prominent Ohio law firm. Payment for their services was fixed mainly in lots on Spooner's land.
Whether presentation of the case of Spooner vs. M'Connell, et al. was mainly the work of Swayne & Brown, or of Spooner, is not certain; but its argument bears Spooner's legal reasoning. His injunction was granted, pending hearing by the whole Court; and in the January, 1839 term, the Supreme Court removed the injunction and dismissed Spooner's appeal.
Meanwhile, the catastrophic Panic of 1837, which had its beginnings on the East Coast, and swallowed bank after bank, created shock waves which reached the Maumee Valley in the Spring of 1839, and swallowed almost everybody. Spooner, like most of his fellow land speculators, lost everything (not much), and returned to his father's farm in Athol, with perhaps a more sober understanding than he had before, of both law and finance.
In the wake of the Panic of 1837, Spooner bent his attention to devising a just monetary system with immunity from such convulsions in future. Some twenty years later, as described below, Spooner claimed to have achieved such a system. He puzzled over the bizarre circumstance that a vigorous and prosperous nation, booming in 1836, could be virtually bankrupt by 1840; and to begin with, he articulated a proposed social / economic system he thought able to "secure to each individual, without discrimination, the full enjoyment of his right to labor, to hire capital on which to labor, and to hold all the legitimate fruits of his labor;" which would provide innumerable collateral benefits to a nation plagued by many fundamental injustices, inequalities, and consequent disequilibrium.
There is a larger back story to the Panic of 1837, and others of the same kind that preceded and followed it, having to do with the political / economic rivalry between the Jacksonian Democrats, inheritors of the inclinations of the Jeffersonian Republicans of an earlier era; and the Whigs, champions of the Federalist impulses of Alexander Hamilton. More specifically, it had to do with the opponents and proponents, respectively, of the concept of a central bank with the exclusive privilege of creating and managing the supply of money, or circulating currency.
Spooner gracefully skirted these controversies – which are controversial still, and widely misunderstood today – and sought to penetrate to the foundation of natural law, in which the chains of causes and effects are not subject to narrow political or economic agendas; yet it decisively determines the course of development, and eventual consequences, of all human acts, including those prompted by political and economic agendas.
No reasonable objection [Spooner wrote in 1846] can be made to this doctrine on the ground that natural law, in its application to all possible cases, is not already fully and absolutely known. If it be not, in any particular case, known, that is only a reason why it should be sought after, and ascertained, (by the proper tribunal, the judiciary;) and not why it should be arbitrarily set at defiance where it is plain and palpable. The truths of mathematics are not fully known in their application to all possible cases; yet is that any reason why they should not be adhered to so far as they are known, or can be ascertained? Is it any reason why the ruling power of a state should innovate upon mathematical principles by legislation, and enact that three and four shall be counted as fifteen, and eight and six as forty; and that the amount of men's dues to each other shall be determined by such processes as these? As much reason would there be in such a procedure, as there is in legislatures attempting to prescribe men's rights of property, or their rights to the acquisition of property, in defiance of the principles of natural law. Natural law is the science of men's rights, as mathematics is the science of numbers and quantities. It is impossible, in the nature of things, that men can have any rights, (either of person or property,) in violation of natural law – for natural law is justice itself. And justice is a science, to be learned; not an arbitrary rule, to be made. The nature of justice can no more be altered by legislation, than the nature of numbers can be altered by the same means. [in Poverty: Its Illegal Causes and Legal Cure]
During this period, Spooner was a strict Constitutionalist; although, as we shall see in due course, he did not remain so throughout his life. Nevertheless, he relied always upon natural law as prior to, not derived from the principles set forth in the Constitution of the United States; and insisted that the right to make obligatory contracts is fundamental to human nature, and human right.
This constitutional right of men to enter into all obligatory contracts, [Spooner wrote in 1843] is a natural, inherent, inalienable right. It exists antecedently to, and independently of, any positive or municipal law. It may be recognized, acknowledged, guarantied, and secured, by the municipal law, but it is not derived from it – nor can the municipal law rightfully take it away. It is an original right of human nature, like the right of speech – the right to enjoy life, liberty and religion – the right to keep and bear arms – and the right of self-protection. And it is as an original right, existing prior to the constitution, that the clause quoted from the constitution, recognizes and guaranties it.
This is so, Spooner argued, because the right to enter into obligatory contracts is the right to make agreements; without which, in the nature of things, there could be no cooperation among men, and human society itself would be impossible. Therefore, any human act "impairing the obligation of contracts" is unconstitutional and unlawful, not only because it violates the letter of the constitution as written, but more fundamentally because it violates the principles of social justice the constitution attempts to articulate.
Spooner gave meticulous attention to the legal nature of contracts between lenders and borrowers; or between creditors and debtors; or between capital and labor. All these pairs of complementary terms, in Spooner's analysis, have approximately equivalent meanings, and he used them interchangeably; and they all involve exchanges of value between parties to a contract.
Due to imprecise conventions of speech and writing, the exact nature of such exchanges were, in Spooner's time, and remain so in ours, widely misunderstood. Spooner took excruciating care to clarify such misunderstandings, and sort out exactly what is and is not naturally involved in instances of human commerce.
He pointed out, for example, that when a man "buys" a horse, in exchange for $100, another man reciprocally "buys" $100, in exchange for a horse. Two "sales" in fact take place, not one, in the course of a contractual agreement between two "buyers" and two "sellers" – which sum up to two partners in a mutually beneficial agreement that is satisfactory to them both.
Further, because the "right of men to enter into all obligatory contracts, is a natural, inherent, inalienable right," the terms of contract between or among agreeing partners may be anything they are mutually able to agree upon; and any human act "impairing the obligation" of such contracts is fundamentally unlawful, because in the nature of things it subverts the flow of free and open human commerce upon which human society depends for its very existence and continuance.
In Poverty, Spooner made and elaborated seven "economical propositions, that are obviously conducive, if not indispensably necessary, to the greatest aggregate increase, and most equal distribution of wealth, that can be accomplished consistently with the natural right of each man to the control of his own property." In abbreviated form, Spooner's propositions were:
Every man – so far as, consistently with the principles of natural law, he can accomplish it – should be allowed to have the fruits, and all the fruits of his own labor.
In order that each man may have the fruits of his own labor, it is important, as a general rule, that each man should be his own employer, or work directly for himself, and not for another for wages; because, in the latter case, a part of the fruits of his labor go to his employer, instead of coming to himself.
That each man may be his own employer, it is necessary that he have materials, or capital, upon which to bestow his labor.
If a man have not capital of his own, upon which to bestow his labor, it is necessary that he be allowed to obtain it on credit. And in order that he may be able to obtain it on credit, it is necessary that he be allowed to contract for such a rate of interest as will induce a man, having surplus capital, to loan it to him; for the capitalist cannot, consistently with natural law, be compelled to loan his capital against his will.
The laborer not only wants capital, on which to bestow his labor, but he wants to obtain this capital at the lowest rate of interest, at which, in the nature of things, he can obtain it. That he may obtain it at the lowest possible rate of interest, it is necessary that free banking be allowed.
All credit should be based upon what a man has, and not upon what he has not. A debt should be a lien only upon the property that a man has before and when the debt becomes due; and not upon his earnings after the debt is due. If, therefore, a man be able to pay a debt when it becomes due, he should pay it in full; if unable to pay it in full, he should pay to the extent of his ability; and that payment should be the end of that transaction. The debt should be no lien upon his future acquisitions.
Creditors should have liens upon the property of their debtors, in the order in which their debts are contracted; ...and the creditor having the first lien, should be paid in full, before the second receives any portion of his debt. And this principle should apply to all the creditors respectively – each prior creditor having a right to full payment, before a succeeding creditor can receive anything.
"These principles," Spooner wrote, "are just in themselves – they are the principles of natural law – and the effect of them would be much better, for both debtors and creditors, than those that now prevail."
However, Spooner's propositions were probably no less novel in his own time than they are in ours, for they imply a human society arranged along lines strikingly different from those characteristic either of Spooner's time, or before, or since, including our own.
Spooner's underlying premise was that the contractual relationship between lenders and borrowers, creditors and debtors, or between capital and labor, was what a contract of any kind should normally be supposed to be: that is, a mutually beneficial agreement between contracting partners; and not an adversarial contest between opposing interests. Under this construction, a mutually advantageous agreement may be made, for example between a capitalist with surplus capital available for lending, and a laborer seeking to borrow capital upon which to bestow his labor – such as a cobbler seeking to purchase leather that he may craft into shoes.
In such an instance, it is natural that the risks of the venture be equally shared by both partners: because surplus capital is no advantage to a capitalist, unless it is combined with labor in some profitable enterprise; and labor alone lacks the capital upon which to labor in such an enterprise. Therefore, it is no less incumbent upon the capitalist than upon the laborer to assess as critically as possible the probable outcome of the venture, for both stand to gain, if the venture succeeds; and both stand to lose, if it fails. Specifically, the partners risk the loss of all or part of the capitalist's ventured capital, and of the laborer's labor, should the venture not succeed.
Of material interest alike to the prudent capitalist and the prudent laborer in making this assessment, are the overall conditions indicative of the laborer's capacity to make a success of the venture, and repay not only the amount of the loan, but an additional amount which makes it profitable for the capitalist to venture the loan in the first place. The prudent laborer has no less interest in the viability of the venture than has the prudent capitalist, for the former has no wish to labor at an enterprise that cannot reward his effort by sustaining himself and his family, and measurably advancing his interests besides.
In sum, following Spooner's first four propositions, the laborer has not the required capital himself, otherwise he would not seek a loan; and he must secure his own sustenance, as well as make his enterprise succeed, out of the proceeds of the loan combined with his labor. To this end, assuming the success, not the failure of the venture, he is willing to contract with a capitalist for a loan to be repaid at a given date, plus an additional amount, which goes under the name of interest, necessary to make the loan worthwhile to the capitalist – including the amount required to compensate the capitalist for the risk to which he exposes his ventured capital.
In order that the transaction may proceed to the mutual advantage of lender and borrower, proposition 5, "it is necessary that free banking be allowed."
In elaborating proposition 4, Spooner wrote:
All legislative restraints upon the rate of interest, are ... nothing less than arbitrary and tyrannical restraints upon a man's natural capacity and natural right to hire capital, upon which to bestow his labor. And, of consequence, they are nothing less than arbitrary and tyrannical restrictions upon the exercise of his right to obtain all the fruits, that he honestly can obtain, from his labor.
The "legislative restraints upon the rate of interest" Spooner was talking about were the usury laws then in effect, allegedly to protect borrowers from the rapacious rates of interest that would otherwise (presumedly) be charged by lenders. However, the usury laws had the actual effect of monopolizing capital in the hands of the few who could afford to provide the very best security for their loans, thereby enabling low rates of interest for themselves. The law also had the collateral effect of prohibiting the many who could provide only less favorable security for their loans (which deficiency might otherwise have been compensated by higher rates of interest), from obtaining any loans at all.
Spooner pointed out that there is significantly less exposure to risk among many small ventures, than among a few large ones: because the failure of a single large venture involves great losses; whereas if the same capital were prudently distributed among many small ventures, the likelihood of them all failing, with comparable combined losses, is vanishingly small.
The necessity of free banking "will be seen," Spooner wrote, "when it is considered what banking really is. Banking is loaning one's credit, (for circulation as currency,) instead of loaning money."
Spooner's distinction between credit and money was appropriate, because the Constitution, Art. 1, Sec. 10, explicitly forbids any State from making "any thing but gold and silver coin a tender in payment of debts." Money was then nothing more, less, or other than gold and silver coin; whereas credit has its basis in the monetary value of one's real property and tangible assets; which can, if necessary, be converted into the shape of money.
If a man can afford to loan money for six per cent. interest [Spooner continued], he can certainly afford to loan his credit for three. And why? Because whatever profit a man makes by loaning his credit, is clear gain. It costs him nothing; for he still enjoys the use of the houses, lands, or other property, on which his credit is based, in the same manner as if he had not loaned the credit based upon them. But the income, which a man derives from the loan of money itself, is obtained only by the sacrifice, or at the expense of the crops, rents, or other incomes, which he might derive from the lands, houses, or other property, which his money would purchase. ...
It can hardly be said that there is any profit in loaning money itself; for the interest obtained is generally no more than a fair price or equivalent for the crops, rents, or other incomes, which the property that might be purchased with the money, would yield. But in the loan of credit, there is an actual profit of the whole amount that is received as interest, after paying the trouble and risk of banking.
Thus free banking, if it were allowed, could be conducted by any owner of capital willing to loan his capital-based credit, upon whatever terms as might be agreed to between himself and others seeking the loan of credit. That free banking was not in Spooner's time, and is not now in ours, allowed, is a major instance of unlawful and unconstitutional legislation: because it violates the natural, inherent, inalienable right of men to make contracts; and it unlawfully, and unconstitutionally, "impairs the obligation of contracts."
One of the greatest – probably the greatest – of all the evils resulting from the existing system of privileged corporations for banking purposes [Spooner elaborated in a footnote], is that these incorporations amass or bring together, and place under the control of a single directory, the loanable capital that was previously scattered over the country, in small amounts, in the hands of a large number of separate owners. If this capital had been suffered to remain thus scattered, it would have been loaned by the separate owners, in small sums, to a large number of persons; each of whom would thus have been supplied with capital sufficient to employ his own hands upon, with the means of controlling his own labor, and thereby of securing to himself all the fruits of his labor, except what he should pay as interest. But when all this scattered capital is collected into one heap, and placed under the control of a single directory, it is usually loaned in large sums, to a few individuals – generally to the directors themselves and a few other favorites. It probably is not loaned to one tenth, one twentieth, or one fiftieth as many different persons, as it would have been if it had been suffered to remain in its original state, and had been loaned by its separate owners. Individuals, instead of borrowing one, two, three, or five hundred dollars to employ their own hands upon, as would be the case but for these incorporations of capital, now borrow fives, tens, and hundreds of thousands of dollars, upon which to employ the labor of others. This process of concentration, monopoly, and incorporation, by means of which one man, a director, or a favorite of a bank, is enabled to borrow capital enough to employ the labor of ten, twenty, or an hundred men, of course deprives ten, twenty, or an hundred other men of the ability to borrow even capital enough to employ their own hands upon. Of consequence it compels them to sell their labor to him who has monopolized the capital. And they must sell their labor to him at a price that will give him a profit – generally a large profit. That is, they must sell it for much less than the amount of wealth it produces. In this way ten, twenty, or an hundred men are literally robbed of an important portion of the fruits of their labor, solely that a single monopolist may be gorged with wealth. It is thus that the legislation, which creates these large incorporations of privileged bankers, operates to plunder the many of the fruits of their labor, and pamper the few with the spoils.
Spooner's propositions 6 and 7 follow from the principle that the contractual relationship between lenders and borrowers, creditors and debtors, or between capital and labor, is intended to be a mutually beneficial agreement between or among contracting partners, and naturally that the risks inherent to their partnership should be equally shared. The absence of this principle in human affairs produced the twin blights of debtors' prisons during medieval times, and the oceans of debt in which people everywhere are drowning in ours.
By lending his credit for a specified term, a lender acquires a vested interest in a borrower's enterprise, and after analysis of the material facts available at the time the contract between them is made, harbors hopes, shared by the borrower, that the enterprise will prosper, and that at the end of the term of contract the loan, including the agreed interest, will be repaid. If all goes well, this is what happens, and the lender and the borrower are mutually enriched.
All such ventures, however, include an element of risk, which cannot be precisely estimated, either by borrower or lender, at the time the contract between them is made; as for example, Spooner himself experienced during his land speculation on the Maumee River. Unforeseen contingencies emerge, which may, and sometimes do, plunge a promising enterprise into failure, or disappointing performance.
In such cases, proposition 6 stipulates that the losses should be shared by borrower and lender alike: the borrower should repay as much of his debt as he can – which he would have been quite able to do in its entirety, had his enterprise prospered – and the lender should hold him responsible for no more than that. Too bad. The lender invested his credit with disappointing results; and the borrower invested his labor with disappointing results, upon a venture which failed to fulfill their hopes. So it goes. This is just, alike to both parties to the contract whose term has expired and carries no further obligation.
Proposition 7 addresses the circumstance in which a debtor may have more than one outstanding loan, possibly with more than one creditor. Such a debtor cannot honorably conceal such prior debts when seeking an additional loan; and a potential creditor is certain to take such prior obligations into account when assessing his request for the loan: for it represents an additional element of risk attached to the entire venture. The prudent creditor is not likely to agree to such a loan, particularly if proposition 7 is understood to be part of the contract, without persuasive assurances of the venture's probable success, and exceptional profitability.
If, in spite of such assurances, the venture returns a disappointing performance, it is fair and just that all creditors be repaid in the order of their dates of contract (because each creditor may be presumed to have been aware of the risks before making the loan; and the risks mounted with each succeeding loan), and to the extent, but no further, that the debtor has the wherewithal to pay on the date they become due.
Developing his overall line of analysis into a practical application, Spooner emerged some years later in his multi-faceted career, as an economist, and an inventor: for he had invented A New System of Paper Currency, published and patented in 1861.
Spooner's monetary system was, as might be expected, an intricate and meticulous design; which may constitute its only resemblance to monetary systems then in actual use, or in use today, that it might have, or may even yet, in some form replace. Comprehension of Spooner's system, being intricately and meticulously designed, requires close attention. Existing monetary systems too require close attention – which even so may not yield clarity in understanding them; because unlike Spooner's system, they are universally obfuscated, misleading, and deceptive.
Following in somewhat abbreviated form are most of the claims Spooner made for the advantages of his New System of Paper Currency, which adheres to his honest understanding of natural law:
- The system would furnish, at all times, an abundant currency. It would furnish currency equal to one third, or one half, the value of all the real estate in the country – if so much could be used.
- The currency would be stable in value. The system is capable of furnishing so much currency, that a large demand could be supplied as easily as a small one, and without causing any variation in the market value of the currency, or raising the rate of interest.
- The currency would be solvent. It would be absolutely incapable of insolvency; for there could never be a dollar of the currency in circulation, without an invested dollar (Productive Stock) in bank, which must be transferred in redemption of it, unless redemption be made in specie. All losses, therefore, fall upon the bankers, and not upon the bill holders.
- The currency would be cheap (afforded at a low rate of interest) and for two reasons. 1. Because the capital costs nothing. That is, its use as banking capital costs nothing; because its use as banking capital, does not interfere with its use for other purposes. 2. The system admits of competition limited only by the real property of the country. These two facts would bring the rate of interest, at all times, down to the lowest point, at which the simple business of banking could be profitably done.
- The basis of the currency could not, like specie, be carried out of the country, so as to leave our own people destitute of a currency.
- The system stands wholly on common law principles; requiring no aid from the government, in the way of charters of incorporation; and (in the United States) constitutionally admits of no prohibition from the government.
- It gives the Stockholders all the benefits of an act of incorporation, so far as to shield them from individual liability. At the same time, it avoids all necessity for privileged legislation. It also avoids all injustice to, and all liability of throwing any losses upon, the bill holders, because they are certain to get the precise thing they bargained for; that being set apart, and made legally incapable of being applied to any other purpose.
- The system would be a free one. That is, the right of furnishing currency, instead of being made a legalized monopoly, would be open equally to every man, who had the necessary property.
- The system would be adapted to distribute credit equally as possible through the community.
- Currency and bank credits would be so abundant, cheap, and generally diffused, as nearly or quite to supersede all other forms of temporary credit between man and man, and introduce a general system of cash payments. This would be the result, for this reason. The banks could generally, if not always, afford credit cheaper than individuals engaged in trade. The banks would be so numerous, that a man deserving of credit at all, could generally obtain it at bank. And the result would soon come about, that nearly all temporary credit would be obtained at bank, and cash payments would be made in nearly all transactions between individuals. The hazards of trade would thus be greatly diminished; every man's business would stand on its own basis; his solvency or insolvency would be an independent matter, instead of being complicated, as now, with the solvency or insolvency of so many others.
- It would tend to diversify industry to the greatest possible extent, by affording the best possible facilities, which a mere currency system can furnish, for engaging in the production of all new commodities as fast as they should be invented.
- The system would liberate specie for the uses of international commerce.
- The system would greatly enhance the value of real estate, not so much by reason of the banking profits derived from it, as of the activity it would give to agricultural, manufacturing, and commercial industry.
- It would benefit the condition of poor men in various ways, to wit: First, those who should labor for wages, would receive their wages promptly, and in money (currency). They would thereby be enabled to make their purchases with cash, and thus make them more advantageously than now. Secondly, there would be no stagnations in business, by which they would be thrown out of employment, and compelled to consume their accumulations, and perhaps fall in debt. Thirdly, there would be a much greater diversity of industry than now, and as a consequence, all labor would be better paid than now. Fourthly, those who should wish to hire capital, and establish themselves in business of their own, would be much better able to do so than now, because when all traffic should be done for cash, it would be much more safe to loan capital to a poor man, than it is now, when he is obliged to give, as well as to get, credit. Fifthly, men of wealth would retire, earlier than now, from active business, and make way for, and loan their capital to, younger men; because they could certainly loan their capital more safely than now, and probably more advantageously. By loaning their capital first on mortgage, and thus getting one income from it; and then converting the mortgages into bank capital, and thus getting another income from it, they would probably do better with their capital, than to remain in business. At any rate, the management of their capital would thus be attended with less anxiety and risk, than if they were to remain in business themselves.
- As a standard of value, the currency would be much more uniform than it is now, because a dollar, invested for twenty or thirty years, where it is sure to yield, say, six per cent. income each year – never more, and never less – would obviously maintain a more uniform value than the dollar now does, which brings, say, four per cent. income this year, and ten, fifteen, or twenty next year.
How could Spooner have sustained such seemingly extravagant claims for the advantages of his New System of Paper Currency? He could do so in part, because of what any currency naturally is, and for the reason that it is everywhere essential to human commerce.
A functional currency of any kind is a medium of exchange for facilitating mutually satisfactory contracts among humans. In the absence of a currency, of one kind or another, such contracts may be fulfilled only by direct barter, such as the exchange of A's horse for so many of B's goats – which is unacceptably cumbersome in the frequent circumstance that although B would like to acquire A's horse, and has goats to exchange for it, A wants none of B's goats, but something else instead.
In order that any medium of exchange may actually be used as a circulating currency in commercial exchanges among humans, Spooner wrote that it must fulfill five, and only five, essential conditions:
- that the thing should have much value, and yet be of small bulk and weight;
- that it should be divisible into small parcels;
- that the quantity and quality of each of these parcels should be accurately measured, and then reliably marked upon the parcels themselves;
- that these parcels should be convenient for being manipulated, counted, transported, &c.;
- that the currency should have a publicly known market value.
Officially minted gold and silver coins fulfill all five conditions for a viable currency; but they are not exclusive in fulfilling them. Spooner's proposed Paper Currency fulfills all five conditions as well.
Spooner's proposed New System of Paper Currency was to be backed by capital, mostly or entirely in the form of mortgages on real estate: because these are "property of a fixed and permanent nature, liable to few casualties and hazards, and yielding a constant, regular, and certain income, sufficient to make the Productive Stock, hereafter mentioned, worth ordinarily par of specie in the market."
As Spooner described the system,
The best capital of all will probably be mortgages; and they may perhaps be the only capital, which it will ever be expedient to use.
This capital is to be put into joint stock, held by Trustees, and divided into shares, of one hundred dollars each, or any other sum that may be thought best.
This Stock may be called the Productive Stock, and will be entitled to the dividends.
The dividends will consist of the interest on the mortgages, and the profits of the banking.
Another kind of Stock, which may be called Circulating Stock, will be created, precisely equal in amount to the Productive Stock, and divided into shares of one dollar each.
This Circulating Stock will be represented by certificates, scrip, or bills, of various denominations, like our present bank bills – that is to say, representing one, two, three, five, ten, or more shares, of one dollar each.
These certificates, scrip, or bills of the Circulating Stock will be issued for circulation as a currency, by discounting notes, &c., as our bank bills are now.
This Circulating Stock will be entitled to no dividends; and its value will consist wholly in its title to be received, at its nominal value, in payment of debts due to the bank, and to be redeemed by Productive Stock, unless the bankers choose to redeem it with specie. In law, the Circulating Stock will be in the nature of a lien upon the Productive Stock.
Spooner's currency system, in other words, was architecturally designed such that the circulating currency, or shares of Circulating Stock, actually possessed their denominated value: because they represented an exactly equal value in Productive Stock, which were similarly denominated shares in mortgages upon actual existing real estate. A certificate of Circulating Stock could be redeemed upon demand for its denominated equivalent, either in Productive Stock, or at the discretion of the bank holding the corresponding Productive Stock, in gold or silver coin. There was to be no hanky-panky with gold or silver certificates, with fractional reserves of actual gold or silver on hand to redeem them; as was at the time Standard Operating Procedure for all commercial banks.
Today, in America, Federal Reserve Notes do not even pretend to be redeemable by anything at all; or to possess as much intrinsic value as the paper upon which they are printed. They are simply declared by fiat of arbitrary legislation to be "legal tender for all debts, public and private" (a direct and obvious "impairment of the obligation of contracts" among contracting partners who are legislatively obliged to employ Federal Reserve Notes in their exchanges). Similar conditions, as regards their respective national currencies, exist in virtually every contemporary nation; with the natural consequence of incalculable and mounting economic chaos throughout the world.
Spooner also discussed the legality of his system, in relation to existing legislation, which latter may or may not be lawful, or constitutional, or in accord with natural law:
Admitting, for the sake of the argument – what is not true in fact – that the State governments have constitutional power to forbid private banking, their statutes for that purpose, being contrary to natural right, must be construed to the letter; and the letter of few, if any, of them is such as to prohibit the system here proposed.
Spooner went on to cite the wording of relevant statutes of numerous States prohibiting, for examples: "any drafts, bills, or promissory notes, or other evidences of debt" (Maine); "bills, notes, checks, drafts, or obligations" (New Hampshire); "any note, bill, order, or check" (Massachusetts); etc.; and replied:
The currency proposed – the Circulating Stock – comes within the letter of none of these prohibitions. It consists neither of "notes," "promissory notes," "orders," "checks," "drafts," "bonds," "certificates of deposit," "bills of credit," "bills of exchange," "due bills," nor "tickets or engagements of credit in the nature of bank notes."
Although, if it should come into circulation, it may, very likely, in common parlance, and from motives of convenience, be denominated "bills," yet it is not "bills," in any legal sense, in which that word was used at the times these statutes were enacted.
It cannot be called "evidences of debt" – that is, of personal indebtedness – in the sense, in which this description is evidently used in these statutes.
It is not an "obligation," in the sense, in which that word is legally used. That is to say, it is not a personal "obligation," in the nature of a debt, as the term debt is now understood.
It is, in law, simply bona fide certificates of bona fide stocks; as really so as are any certificates of railroad stocks, or of any other stocks whatever. It is bona fide certificates of, or evidences of title to, veritable property in land, as really so, as are deeds, mortgages, leases, or any other written instruments for the conveyance of title to, or rights in, real estate. As such, it obviously comes within the letter of none of the preceding prohibitions. The holders of the certificates are the bona fide owners of the stocks, or property represented; and in selling the stocks themselves, they pass the certificates, or evidences of title. And this is the whole matter, in a legal point of view.
Spooner then considered the wording of similar legislation in other States, such as Vermont, which prohibited "any bill of credit, bond, promissory writing or note, bill of exchange, order, or other paper."
Whether this prohibition of "any other paper," as a currency, can, in law, be held to prohibit the sale of bona fide stocks, or property in land, and passing the certificates thereof, or the titles thereto, is, to say the least, very doubtful.
Spooner conceded that "The letter of the statutes of Missouri, Kentucky, Tennessee, Alabama, North Carolina, and of the constitution of Texas, is, perhaps, comprehensive enough to prohibit the proposed currency."
But, admitting that the language of all the foregoing prohibitions are sufficiently comprehensive to embrace the currency proposed, the statutes themselves, so far as they should be applied to that currency, would nearly all of them be unconstitutional and void, as being in conflict with the "natural right to acquire and dispose of property;" a right, that is either expressly or impliedly recognized and guaranteed by most, or all, of the State constitutions, and bills of rights. This "natural right to acquire and dispose of property," includes a right to buy and sell, as well as to produce and give away, property. The issuing of the currency proposed, and the passing of it, from hand to hand, as a currency, would, in law, be merely a buying and selling of the property it should represent – that is to say, the buying and selling of bona fide property in land – like any other property. The only difference between it and other property, would be, that it would be bought and sold more frequently than other property.
But not only all these State laws against private banking, but all State laws against usury, and all other laws whatsoever, that assume either to prohibit, invalidate, or impair any contract whatsoever, that is naturally just and obligatory, are unconstitutional and void, as being in conflict with that provision of the constitution of the United States, which declares that "no State shall pass any law impairing the obligation of contracts."
Spooner then ventured into the obscure ground (as it turned out) of what, exactly, in law, "the obligation of contracts" actually means. What is "the obligation of contracts" the constitution declares shall not be impaired? This is a matter upon which the constitution itself is silent; but some inferences may be drawn from the wording of the constitutional provision.
Spooner wrote that "'the obligation [singular] of contracts' [plural], implies that there is one and the same 'obligation' to all 'contracts' whatsoever, that have any legal obligation at all. And there obviously must be some one principle, that gives validity to all contracts alike, that have any validity."
The law, then, of this whole country, as established by the constitution of the United States, is, that all contracts, in which this one principle of validity or "obligation" is found, shall be held valid; and that the States shall impose no restraints upon the people's entering into all such contracts.
All, therefore, which courts have to do, in order to determine whether any particular contract, or class of contracts, are valid, and whether the people have a right to enter into them, is simply to determine whether the contracts themselves have, or have not, this one principle of validity, or obligation, which the constitution of the United States declares shall not be impaired.
State legislation can obviously have nothing whatever to do with the solution of this question. It can neither create, nor destroy, that "obligation of contracts," which the constitution forbids it to impair. It can neither give, nor take away, the right to enter into any contract whatever, that has that "obligation."
But here a formidable difficulty arises. It is no less a one than this, viz.: that neither legislatures, lawyers, nor courts, know, nor even pretend to know, what "the obligation of contracts" is. That is to say, there is no one principle, known or recognized among them, by reference to which the validity or invalidity of all contracts is determined. Consequently it is not known, in the case of any single contract whatever, that is either enforced or annulled, in a court of justice, whether the adjudication has really been in accordance with "the obligation" of the contract, or not. Startling, and almost terrifying, as this statement is, in view of the number and importance of the contracts, in which men's rights are involved, and which courts are continually annulling or enforcing, the statement is nevertheless true.
The question, Spooner wrote, has been considered by the U.S. Supreme Court on several occasions, but never with a decisive conclusion. He cited the 1827 case of Ogden vs. Saunders (12 Wheaton, 213), the "last time (so far as I know) that it was brought before that court," in which several of the most prominent lawyers in the country had a part – but without clear illumination of the meaning of "the obligation of contracts."
The court consisted, at that time, of seven judges. Among these seven judges, four different opinions prevailed as to what "the obligation of contracts" was. Three of the judges said it was one thing; two of them said it was another; one said it was another; and one said it was another. No one opinion commanded the assent even of a majority of the court. And thus the court virtually confessed that, as a court, they did not know what "the obligation of contracts" was.
The reasonable presumption is, that no one of these opinions was correct; for if either had been correct, it would have been likely to secure the assent of the whole court, or at least of a majority.
Spooner himself had more to say on the subject of "the obligation of contracts," and finally concluded as follows:
Inasmuch as the artificial obligations of contracts are innumerable; and inasmuch as this constitutional provision does not particularly describe the obligation it designs to protect, that obligation must be presumed to be the natural one, or else the provision itself, on account of its indefiniteness, must utterly fail of protecting any obligation at all.
The natural obligation of a contract, then, being the only one, which courts are at liberty to regard, their first duty, on this subject, obviously is to ascertain what the natural obligation of contracts is. When they shall have done this, they will have discovered an universal law for all contracts; a law, that must nullify all those State laws – absurd, vexatious, tyrannical, and unjust – with which the statute books of the States are filled, having for their objects to destroy or impair men's natural right of making obligatory contracts, and to prescribe what obligations, different from the natural and true one, men's contracts shall have.
Strictly speaking, courts have no rightful authority either to enforce or annul a single contract, of any name or nature whatever, until they shall have ascertained what this constitutional, or natural, obligation of contracts is. But, if they will continue to do so, it is manifestly sheer mendacity, or sheer stupidity, for them to declare that the contracts of private bankers, and contracts now termed usurious – contracts naturally obligatory as any that men ever enter into, or as any that courts ever enforce – have no obligation; or that anybody can be lawfully punished for entering into such contracts.
Furthermore, if the natural obligation of contracts is the only obligation, which courts are at liberty to regard, they are bound to disregard all those State laws, or acts of incorporation, of any and every kind, whether for banking purposes or any other, which attempt to limit the liability of stockholders to any thing less than the natural obligation of their contracts.
In short, the only constitutional power, now existing in this country, to prohibit any contract whatever, that is naturally obligatory, or to impair the natural obligation of any contract whatever, is the single power given to Congress "to establish uniform laws on the subject of bankruptcies, throughout the United States."
There is, therefore, no legal obstacle in the way of the immediate adoption of the banking system now proposed; nor any occasion to consult the State legislatures, or ask their permission, in the matter. Nor, in loaning the currency, will there be any occasion to pay any regard to usury laws.
Preceding has been an abbreviated account of PART FIRST of Spooner's A New System of Paper Currency, 1861: a general description and discussion of his invention. PART SECOND was the greater part, and consisted entirely of a prototype, and fully detailed Articles of Association of a Mortgage Stock Banking Company: Spooner's invention itself.
In sum, Spooner's presentation, now in the public domain, was a turn-key mechanism for implementing his proposed free banking system; which, with probably few changes or adaptations, could be effected 150 years later, in our time, at least as functionally as it could have been in his. It may turn out that Spooner was 150 years or more ahead of his time; yet it is fortunate that he took the time and trouble when he did, to develop the details of a naturally just and balanced monetary system that might yet be put into effect in time to pull our bacon out of the fire of global economic chaos and collapse.
However that may be, Spooner was only 53 years old in 1861, and had another 26 years still ahead of him. During the succeeding period, he did not allow very much grass to grow under his feet.
Concurrent with Spooner's endeavors to establish a viable system for free banking, he also grappled with another government monopoly then in force, which he addressed in The Unconstitutionality of the Laws of Congress, Prohibiting Private Mails, 1844.
Arbitrary legislation had long secured the United States Postal Service from competition; with the natural result that it had failed to keep pace with national developments. Canals and railroads, for instance, had emerged, which should have, but did not, diminish the costs of carrying letters and parcels throughout the nation. The USPS had become bloated and inefficient: defects, then and now, to which government monopolies are chronically prone.
On the basis of legislation (which Spooner showed to be unlawful), it was "illegal" for individuals to "take up, receive, order, dispatch, carry, convey or deliver any letter or letters, packet or packets, other than newspapers for hire or reward...." Some attempted to circumvent the law by such stratagems as posting a newspaper containing a message coded as underlined letters or words.
Postal inspectors were vigilant in enforcing the statutes forbidding competition with the USPS, and in 1842 made a prominent case in New York of United States vs. Adams & Company, with the expectation of discouraging other violators of the postal laws. However, the presiding judge acknowledged in November, 1843, that although establishing a company or stagecoach to transport mail was a violation of existing law, there was no law forbidding passengers from carrying mail. Accordingly, the jury found the company not guilty, because "there is not law to convict them."
The decision encouraged, rather than discouraged postal competition, and numerous individuals undertook to deliver mail profitably at half the government rate, simply by paying passage on a steamboat or a stagecoach, with no additional overhead. Because cities were smaller then than they are today, these agents could deliver mail directly to their recipients' addresses into the bargain; whereas the USPS delivered only to the destination Post Office, where it must be retrieved by the addressee.
Not surprisingly, such enterprises prospered, and Spooner launched his own venture. As a foundation, he wrote his pamphlet, The Unconstitutionality of the Laws of Congress, Prohibiting Private Mails, challenging on numerous grounds the constitutionality of all legislation giving the USPS an exclusive privilege. He noted first that
The Constitution of the United States (Art. 1. Sec. 8.) declares that "the Congress shall have power to establish post-offices and post roads."
These words contain the whole grant, and therefore express the extent of the authority granted to Congress. They define the power, and the power is limited by the definition. The power of Congress, then, is simply "to establish post-offices and post roads," of their own – not to interfere with those established by others.
To this objection he added 30 (count them) others, of which, he wrote, "almost any one of them is sufficient, I apprehend, to prove the unconstitutionality of all laws prohibiting private mails."
Additionally, he set up his own competitive enterprise, the American Letter Mail Company, serving Boston, New York, Philadelphia, and Baltimore. However, unlike most of his fellow-entrepreneurs, Spooner was in no way clandestine about his operation. Before opening, he informed the Postmaster General by letter, 11 January 1844, of his intent; and that "I shall be ready at any time to answer to any suit." Enclosed was his pamphlet, The Unconstitutionality of the Laws of Congress, Prohibiting Private Mails. Spooner began his operation 23 January, and advertised aggressively in the major newspapers.
The American Letter Mail Company printed its own stamps, hired carriers, and quickly established a brisk business. Within a few months, private mail companies, Spooner's prominent among them, had absorbed most of the postal services between Boston, New York, Philadelphia, and Baltimore – which was of critical importance to the USPS, because their service to those cities in particular was highly lucrative, and subsidized their less lucrative services in the West and South.
Congress and the Postmaster General were alarmed, not amused, by this formidable challenge, and responded promptly – not by replying to any of Spooner's constitutional arguments, but by threatening transport companies with the loss of their government contracts if they continued carrying mail for the American Letter Mail Company. Additionally, they aggressively arrested Spooner's mail carriers, although prior cases of the same kind were still pending, and had not yet been adjudicated in court. These harassing actions had the intended effect of driving Spooner out of business by July, 1844. So much for arguments with bureaucracy over the nuances of constitutional law.
Although Spooner himself profited little by his venture – a pattern in his life that drove him often to despair – his effort was not without favorable effect for other Americans. Spooner's initiative had harmonized perfectly with the widespread dissatisfaction with the cost / performance ratio of the de facto exclusively "legal" services of the US Postal Service. Postal revenues continued to decline, even as commerce throughout the nation continued to expand.
The British across the pond had implemented postal reform in 1840, reducing postage to a penny an ounce anywhere in the British Isles; while Americans were pinched for 25¢ to post a single sheet of paper a greater distance than 400 miles. Americans were not happy with the United States Postal Service.
Although the initial result of British postal reform had been a decline in postal revenues, these quickly recovered, because the drop in price was soon more than compensated by a rise in volume. Congress followed the British example, and nearly halved postal rates in 1845; which had the complementary effects of increasing USPS business, and eliminating most of their competitors. Congress reduced postal rates again in 1851.
Spooner attempted to reap some publicly recognized credit for this happy turn of events, without success; and returned to the family farm in Athol, to lick his wounds – and take up the cudgel for his next cause.
The "cause" that was emerging with mounting strength during this period, particularly but not exclusively in Massachusetts, involved the employment of imported slaves from Africa in growing sectors of the American economy. The institution of slavery had been abolished in Massachusetts at the end of the Revolutionary War, when the Supreme Court had ruled in 1783 that the preamble of the state constitution had outlawed slavery by declaring all men equal. The lingering controversy turned upon the contention of slaveholders that Africans were not human, and were therefore, like livestock, not exempt from their owners' rights of property – an argument that found little sympathy in Massachusetts; or, needless to say, with Spooner.
Spooner became an ardent abolitionist, and at times came to the (mostly uncompensated) legal aid of people who had in various ways become entangled in the Fugitive Slave Act of 1850. Characteristically, however, he did not align himself with any particular abolitionist group; for his concerns were much broader than the issue of African slavery alone. Spooner was perpetually concerned with the slavery of all humans oppressed by tyrannical laws of any kind, and grew increasingly disillusioned by the hypocrisy he found in the legal system of his own country.
Accordingly, Spooner sought the foundations for a legal application of natural law, no longer in the U.S. Constitution, but in the common law native to England and Europe, as expressed particularly in Magna Carta of 1215. He recorded his explorations along these lines in 1852, in his An Essay on the Trial by Jury, 224 pp.
For more than six hundred years [Spooner began] – that is, since Magna
Carta, in 1215 – there has been no clearer principle of English or American constitutional law, than that, in criminal cases, it is not only the right and duty of juries to judge what are the facts, what is the law, and what was the moral intent of the accused; but that it is also their right, and their primary and paramount duty, to judge of the justice of the law, and to hold all laws invalid, that are, in their opinion, unjust or oppressive, and all persons guiltless in violating, or resisting the execution of, such law.
Spooner was addressing the vexing and persistent paradox of governance, which has been manifest everywhere, on countless occasions throughout the course of human history: mainly, what recourse have a people oppressed by fundamentally unjust "justice," or governance?
By its very nature government of any kind has, one way or another, amassed the power to impose its will upon all the people within its sphere – be that will just, or unjust; benign, or tyrannical. By its nature, the power of a person or a group to impose their will by force upon another includes no assurance that such power is benign, or will be wielded with justice or wisdom. Absent a balancing power on behalf of the people who live within the sphere of such governing power, and regardless of how sublime or well-intentioned such governance claims to be, history teaches that it is virtually certain to become despotic and tyrannical sooner or later; and probably sooner than later.
Spooner argued that a vital element of the necessary balancing power on behalf of the people, established and maintained in common law from ancient times, was and is the right and responsibility of the people vigilantly to judge the laws by which they are governed. An essential mechanism for this vigilance was the trial by a jury of their peers, free and unencumbered by the will or prejudice of the governing power, of those accused of transgressing such laws.
Unless such be the right and duty of jurors, [Spooner continued] it is plain that, instead of juries being a "palladium of liberty" – a barrier against the tyranny and oppression of the government – they are really mere tools in its hands, for carrying into execution any injustice and oppression it may desire to have executed.
Spooner argued further that, in addition to trial by a jury of the peers of the accused, the tradition of the common law, as evidenced by the remarkably few laws typically enacted by kings from generation to generation, sprang from a heritage that sustained the balance between the governors and the governed by more fundamental and organic means than by what eventually became written legislation, and its administration in courts of law.
Mainly, between the time of the collapse of Roman rule in Britain ca. 400 CE, and the Norman Conquest in 1066, the Saxon invaders from Germany established "the law of the land," such as it was in England, by the sword, blood, and fire; and these fierce invaders, accustomed to liberty in their homeland, were unwilling to grant their chiefs arbitrary authority over them in the lands they conquered. Spooner cited numerous sources to show that the medieval kings in England were universally regarded as first among equals, by virtue of their prowess in battle, and their administrative skill; but that they were in no way privileged with arbitrary authority by those who respected and followed them.
Conclusive proof that the legislation of the king was of little or no authority [Spooner wrote], is found in the fact that the kings enacted so few laws. If their laws had been received as authoritative, in the manner that legislative enactments are at this day, they would have been making laws continually. Yet the codes of the most celebrated kings are very small, and were little more than compilations of immemorial customs. The code of Alfred would not fill twelve pages of the statute book of Massachusetts, and was little or nothing else than a compilation of the laws of Moses, and the Saxon customs, evidently collected from considerations of convenience, rather than enacted on the principle of authority. The code of Edward the Confessor would not fill twenty pages of the statute book of Massachusetts, and, says Blackstone, "seems to have been no more than a new edition, or fresh promulgation of Alfred's code, or dome-book, with such additions and improvements as the experience of a century and a half suggested." — 1 Blackstone, 66.
The common law heritage of medieval England, then, sustained a balance between government and the governed which, by the reign of John of England (1167 – 1216), crowned at Westminster, 27 May 1199, had come seriously unglued. John's subject barons rose against him, marched on London, and 15 June 1215 met the king at Runnymede, where they forced upon him the Great Charter, Magna Carta, in an effort to reign in John's arbitrary rule, and restore the practice of England's traditional common law.
Magna Carta was annulled the following August by the Pope, and war erupted anew; yet although almost all of its provisions have been formally repealed in England during subsequent centuries, Magna Carta remains a document of fundamental importance to the ideal, if not the reality, of constitutional law in England and the United States to this day; and that is why Lysander Spooner sought the foundation of the common law in the roots, and the expression, of Magna Carta, 1215.
Whether Spooner actually found what he sought, to his own satisfaction, is subject to interpretation. He was an active writer and pamphleteer to the end of his days, which arrived 14 May 1887 in his little room in a Boston boarding house, surrounded by his accumulated books, pamphlets, papers, and research materials. These included, in addition to those already mentioned, and many others not mentioned, his scathing A Letter To Grover Cleveland, On His False Inaugural Address, The Usurpations and Crimes of Lawmakers and Judges, and The Consequent Poverty, Ignorance, and Servitude of the People, 1886, 110 pp.; and No Treason: The Constitution of No Authority, 47 pp., 1870 – in which he repudiated the U.S. Constitution utterly.
The foregoing is an incomplete biographical sketch of a life-long and seldom thanked champion of liberty who, like many of his kind, deserves a more prominent place among the pantheon of human heroes who have selflessly dedicated their lives to the liberty and enlightenment of their fellows.
Copyright © 2011, J. Harmon Grahn.
This document may be reproduced, in whole or in part, in any medium, with attribution, provided this notice is included.
1. This exposition is informed by the Biography from The Collected Works of Lysander Spooner, by Charles Shively, © 1971 by M&S Press; and by selections from The Works of Lysander Spooner, available in The Online Library of Liberty.
2. 1/9/1834 – 3/1/1835; 1/7/1841 – 1/17/1843 [www.nndb.com/gov/911/000051758/].
3. Spooner, Poverty: Its Illegal Causes and Legal Cure, 1846.
4. See G. Edward Griffin, The Creature from Jekyll Island: A Second Look at the Federal Reserve, Fourth Edition, American Media, Westlake Village, California, 2002, 1998, 1995, 1994, for an extended discussion of these controversies and their antecedents, and their eventual play-out in contemporary times.
5. Spooner, Constitutional Law Relative to Credit, Currency and Banking, 1843; the opening sentence of which reads:
The Constitution of the United States, (Art. 1, Sec. 10,) declares that "No State shall pass any law impairing the obligation of contracts."
6. Poverty, Chapter II.
9. Spooner, A New System of Paper Currency, 1861.
10. Again, see Griffin, 2002, for elaboration.
11. The author does not concede the constitutional power of the State governments to prohibit any kind of banking, that is naturally just and lawful. And he fully believes all existing restraints upon private banking to be unconstitutional. But, be they so, or not, it seems plain enough that government has constitutionally no more power to forbid men's selling an invested dollar, than it has to forbid the selling of a specie dollar. It has constitutionally no more power to forbid the sale of a single dollar, invested in a farm, than it has to forbid the sale of the whole farm.
The currency here proposed is not in the nature of a credit currency, (as the word credit is now legally understood,) and could not be prohibited on that ground, even if any credit currency can constitutionally be prohibited.
The currency proposed consists simply of bona fide certificates of Stock, which the owners have the same right to sell, that they have to sell any other Stocks. [Spooner's footnote.]
12. A New System of Paper Currency, Chapter II.
13. Ibid., Chapter IV. Spooner noted of condition 5 that "Diamonds would not answer well as a currency, because, although they have a market value, that value is known only to a few." He might have added that, although diamonds have much value, are of small bulk and weight, and are themselves small parcels, they do not satisfy condition 2, because they are not easily divisible into smaller parcels still; and they do not satisfy condition 3, because their quantity and quality cannot be reliably marked upon them.
14. Ibid., Chapter I.
15. Loc. cit.
16. Ibid., Chapter V.
17. Loc. cit.
18. Loc. cit.
19. Loc. cit.
20. Loc. cit.
21. Loc. cit.
22. Spooner, The Unconstitutionality of the Laws of Congress, Prohibiting Private Mails, 1844.
24. Spooner, An Essay on the Trial by Jury, 1852, Chapter I.
25. Loc. cit.
26. Ibid., Chapter III.
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