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 class did this gripping process extend, but it was severely felt by that large part of the landowning and trading class which was excluded from holding the same privileges. The banker became the master of the master. In that fierce, pervading competitive strife, the banks were the final exploiters. Sparsely 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 class as were not themselves sharers in the ownership of banks were at the mercy of the banking institutions.

At any time upon some pretext or other, the banks could arbitrarily refuse the latter class credit or accommodation, or harass 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 embarrassed 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 crushingly used against competitors. 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.


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 pawnbrokers, 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 transmute airy nothing into bank-note money, and then, by law, force its acceptance. The lone trader or landholder unsupported by a partnership with law could not fabricate money. But let trader and landholder band in a company, incorporate, then persuade, wheedle or bribe a certain entity called a legislature to grant them a certain bit of paper styled a charter, and lo! they were instantly transformed into money manufacturers.


The simple mandate of law was sufficient authorization for them to prey upon the whole world outside of their charmed circle. With this scrap 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 classes really did was to throw the whole of these extra impositions upon the working class 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 Constitution prohibit States from giving the right to banks to issue money? Were not private money factories specifically barred by that clause of the Constitution 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 class domination of Government came into compelling effect. The onward sweep of the trading class was not to be balked by such a trifling obstacle as a Constitutional provision. At all times when the Constitution 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 class 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 class, 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 Constitutional insertion.


The trading class 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 Constitution 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 class, whether traders, slaveholders, or the present trusts.

This decision of the august courts opened the way for the greatest orgy of corruption and the most stupendous frauds. In New York, Massachusetts, New Jersey, Pennsylvania, Maryland, and other States a continuous rush to get bank charters ensued. Most of the legislatures were composed of men who, while perhaps, not innately corrupt, were easily seduced by the corrupt temptations held out by the traders. There was a deep-seated hostility, in many parts of the country, on the part of the middling tradesmen – the shopkeepers and the petty merchants – to any laws calculated to increase the power and the privileges of the superior traders and the landowners. Among the masses of workers, most of whom were, however, disfranchised, any attempt to vest the rich with new privileges, was received with the bitterest resentment. But the legislatures were approachable; some members who were put there by the rich families needed only the word as to how they should vote, while others, representing both urban and rural communities, were swayed by bribes. By one means or another the traders and landholders forced the various legislatures into doing what was wanted.

Omitting the records of other States, a few salient facts as to what took place in New York State will suffice to give a clear idea of some of the methods of the trading class in pressing forward their conquests, in hurling aside every impediment, whether public opinion or law, and in creating new laws which satisfied their extending plans for a ramification of profit-producing interests. If forethought, an unswerving aim and singleness of execution mean anything, then there was something sternly impressive in the way in which this rising capitalist class went forward to snatch what it sought, and what it believed to be indispensable to its plans. There was no hesitation, nor were there any scruples as to niceties of methods; the end in view was all that counted; so long as that was attained, the means used were considered paltry side-issues. And, indeed, herein lies the great distinction of action between the world-old propertied classes and the contending proletariat; for whereas the one have always campaigned irrespective of law and particularly by bribery, intimidation, repression and force, the working class has had to confine its movement strictly to the narrow range of laws which were expressly prepared against it and the slightest violation of which has called forth the summary vengeance of a society ruled actually, if not theoretically, by the very propertied classes which set at defiance all law.


The chartered monopoly held by the traders who controlled the United States Bank was not accepted passively by others of the commercial class, who themselves wanted financial engines of the same character. The doctrine of State’s rights served the purpose of these excluded capitalists as well as it did that of the slaveholders.

The States began a course of reeling out bank charters. By 1799 New York City had one bank, the Bank of New York; this admixed the terrorism of trade and politics so overtly that presently an opposition application for a charter was made. This solitary bank was run by some of the old landowning families who fully understood the danger involved in the triumph of the democratic ideas represented by Jefferson; a danger far overestimated, however, since win as democratic principles did, the propertied class continued its victorious march, for the simple reason that property was able to divert manhood suffrage to its own account, and to aggrandize itself still further on the ruins of every subsequent similar reform expedient. What the agitated masses, for the most part, of that period could not comprehend was that they who hold the possession of the economic resources will indubitably sway the politics of a country, until such time as the proletariat, no longer divided but thoroughly conscious, organized, and aggressive, will avail itself of its majority vote to transfer the powers of government to itself. The Bank of New York injected itself virulently into politics and fought the spread of democratic ideas with sordid but effective weapons. If a merchant dared support what it denounced as heretical doctrines, the bank at once black-listed him by rejecting his notes when he needed cash most.

It was now that Aaron Burr, that adroit leader of the opposition party, stepped in. Seconded or instigated by certain traders, he set out to get one of those useful and invaluable bank charters for his backers. The explanation of how he accomplished the act is thus given: Taking advantage of the epidemic of yellow fever then desolating New York City, he, with much preliminary of philanthropic motives, introduced a bill for the apparent beneficent purpose of diminishing the future possibility of the disease by incorporating a company, called the Manhattan Company, to supply pure, wholesome water. Supposing that the charter granted nothing more than this, the explanation goes on, the Legislature passed the bill, and was most painfully surprised and shocked when the fact came out that the measure had been so deftly drawn, that it, in fact, granted an unlimited charter, conferring banking powers on the company.[112]

This explanation is probably shallow and deficient. It is much more likely that bribery was resorted to, considering the fact that the granting of every successive bank charter was invariably accompanied by bribery. Six years later the Mercantile Bank received a charter for a thirteen years’ period – a charter which, it was openly charged by certain members of the Assembly, was secured by bribery. These charges were substantially proved by the testimony before a legislative investigating committee.[113] In 1811 the Mechanics’ Bank was chartered with a time limit under circumstances indicating bribery.

Indeed, so often was bribing done and so pronounced were charges of corruption at frequent sessions of the Legislature, that in 1812, the Assembly, in an heroic spasm of impressive virtue, passed a resolution compelling each member to pledge himself that he had neither taken, nor would take, „any reward or profit, direct or indirect, for any vote on any measure.”[114] This resolution was palpably intended to blind the public; for, in that identical year, the Bank of America received a charter amid charges of flagrant corruption. One Assemblyman declared under oath that he had been offered the sum of $500, „besides, a handsome present for his vote.”[115] All of the banks, except the Manhattan, had limited charters; measures for the renewal of these were practically all put through by bribery.[116] Thus, in 1818, the charter of the Merchants’ Bank was renewed until 1832, and renewed after that. The chartering of the Chemical Bank (that staid and most eminently respectable and solid New York institution of to-day) was accomplished by bribery. The Chemical Bank was an outgrowth of the Chemical Manufacturing Company, the plant and business of which were bought expressly as an excuse to get a banking auxiliary. The Goelet brothers were among the founders of this bank. In fact, many of the great landed fortunes were inseparably associated with the frauds of the banking system; money from land was used to bribe legislatures, and money made from the banks was employed in buying more land. The promoters of the Chemical Bank set aside a considerable sum of money and $50,000 in stock for the bribery fund.[117] No sooner had it received its charter than it began to turn out reams of paper money, based upon no value, which paper was paid as wages to its employees as well as circulated generally. So year after year the bribery went on industriously, without cessation.


Were the bribers ever punished, their illicitly gotten charters declared forfeited, and themselves placed under the ban of virtuous society? Far, very far, from it! The men who did the bribing were of the very pinnacle of social power, elegance and position, or quickly leaped to that height by reason of their wealth. They were among the foremost landholders and traders of the day. By these and a wide radius of similar means, they amassed wealth or greatly increased wealth already accumulated. The ancestors of some of the most conspicuous multimillionaire families of the present were deeply involved in the perpetration of all of those continuous frauds and crimes – Peter Goelet and his sons, Peter P. and Robert, for instance, and Jacob Lorillard, who, for many years, was president of the Mechanics’ Bank. No stigma attached to these wealth-graspers. Their success as possessors of riches at once, by the automatic processes of a society which enthroned wealth, elevated them to be commanding personages in trade, politics, orthodoxy and the highest social spheres. The cropped convict, released from prison, was followed everywhere by the jeers and branding of a society which gloated over his downfall and which forever reminded him of his infamy. But the men who waded on to wealth through the muck of base practices and by means of crimes a millionfold more insidious and dangerous than the offense of the convict, were not only honored as leading citizens, but they became the extolled and unquestioned dictators of that supreme trading society which made modes, customs and laws.

It was a society essentially built upon money; consequently he who was dexterous enough to get possession of the spoils, experienced no difficulty in establishing his place among the elect and anointed. His frauds were forgotten or ignored; only the fact that he was a rich man was remembered. And yet, what is more natural than to seek, and accept, the obeisance lavished upon property, in a scheme of society where property is crowned as the ruling power? In the rude centuries previously mankind exalted physical prowess; he who had the greatest strength and wielded the deftest strokes became victor of the judicial combat and gathered in laurels and property. But now we have arrived at the time when the cunning of mind supplants the cunning of muscle; bribery takes the place of brawn; the contestants fight with statutes instead of swords. And this newer plan, which some have decried as degenerate, is a great advance over the old, for thereby has brute force been legally abandoned in personal quarrels at least, and that cunning of mind which has held sway, is the first evidence of the reign of mind, which from a low order, will universally develop noble and supereminent qualities charged with the good, and that alone, of the human race.


With this preliminary sketch, we can now proceed to a consideration of how Astor profited from the banking system. We see that constantly the bold spirits of the trading class, with a part of the money made or plundered in some direction or other, were bribing representative bodies to give them exceptional rights and privileges which, in turn, were made the fertile basis for further spoliation. Astor was a stockholder in at least four banks, the charters of which had been obtained or renewed by trickery and fraud, or both. He owned 1,000 shares of the capital stock of the Manhattan Company; 1,000 of the Merchant’s Bank; 500 of the Bank of America; 1,604 of the Mechanic’s Bank. He also owned at one time considerable stock in the National Bank, the charter of which, it was strongly suspected had been obtained by bribery.

There is no evidence that he, himself, did the actual bribing or was in any way concerned in it. In all of the legislative investigations following charges of bribery, the invariable practice was to throw the blame upon the wicked lobbyists, while professing the most naïve astonishment that any imputations should be cast upon any of the members of the honorable Legislature. As for the bribers behind the scenes, their names seldom or never were brought out or divulged. In brief, these investigations were all of that rose-water order, generally termed „whitewashing.” But whether Astor personally bribed or not, he at any rate consciously profited from the results of bribery; and, moreover, it is not probable that his methods in the East were different, except in form, from the debauching and exploitation that he made a system of in the fur regions. It is not outside the realm of reasonable conjecture to suppose that he either helped to debauch, or connived at the corruption of legislatures, just as in another way he debauched Indian tribes.

Furthermore his relations with Burr in one notorious transaction, are sufficient to justify the conclusion that he held the closest business relations with that political adventurer who lived next door to him at No. 221 Broadway. This transaction was one which was partially the outcome of the organization of the Manhattan Bank and was a source of millions of dollars of profit to Astor and to his descendants.

A century or more ago Trinity Church owned three times the extent of even the vast real estate that it now holds. A considerable part of this was the gift of that royal governor Fletcher, who, as has been set forth, was such a master-hand at taking bribes. There long existed a contention upon the part of New York State, a contention embodied in numerous official records, that the land held for centuries by Trinity Church was usurped; that Trinity’s title was invalid and that the real title vested in the people of the city of New York. In 1854-55 the Land Commissioners of New York State, deeply impressed by the facts as marshalled by Rutger B. Miller,[118] recommended that the State bring suit. But with the filing of Trinity’s reply, mysterious influences intervened and the matter was dropped. These influences are frequently referred to in aldermanic documents.

To go back, however: In 1767 Trinity Church leased to Abraham Mortier, for ninety-nine years, at a total annual rental of $269 a year, a stretch of land comprising 465 lots in what is now the vicinity bounded by Greenwich, Spring and Hudson streets. Mortier used it as a country place until 1797 when the New York Legislature, upon the initiative of Burr, developed a consuming curiosity as to how Trinity Church was expending its income. This was a very ticklish question with the pious vestrymen of Trinity, as it was generally suspected that they were commingling business and piety in a way that might, if known, cause them some trouble. The law, at that time, restricted the annual income of Trinity Church from its property to $12,000 a year. A committee of investigation was appointed; of this committee Burr was made chairman.


Burr never really made any investigation. Why? The reason soon came out, when Burr turned up with a transfer of the Mortier lease to himself. He at once obtained from the Manhattan Bank a $38,000 loan, pledging the lease as security. When his duel with Hamilton forced Burr to flee the country, Astor promptly came along and took the lease off his hands. Astor, it was said, paid him $32,000 for it, subject to the Manhattan Bank’s mortgage. At any rate, Astor now held this extraordinarily valuable lease.[119] He immediately released it in lots; and as the city fast grew, covering the whole stretch with population and buildings, the lease was a source of great revenue to him and to his heirs.[120] As a Lutheran, Astor could not be a vestryman of Trinity Church. Anthony Lispenard, however, it may be passingly noted, was a vestryman, and, as such, mixed piety and business so well, that his heirs became possessed of millions of dollars by the mere fact that in 1779, when a vestryman, he got a lease, for eighty-three years of eighty-one Trinity lots adjacent to the Astor leased land, at a total annual rental of $177.50.[121]

It was by the aid of the banking system that the trading class was greatly enabled to manipulate the existing and potential resources of the country and to extend invaluable favors to themselves. In this system Astor was a chief participant. For many years the banks, especially in New York State, were empowered by law to issue paper money to the extent of three times the amount of their capital. The actual specie was seized hold of by the shippers, and either hoarded, or exported in quantities to Asia or Europe which, of course, would not handle paper money. By 1819 the banks in New York had issued $12,500,000, and the total amount of specie to redeem this fiat stuff amounted to only $2,000,000. These banknotes were nothing more or less than irresponsible promises to pay. What became of them?


What, indeed, became of them? They were imposed upon the working class as payment for labor. Although these banknotes were subject to constant depreciation, the worker had to accept them as though they were full value. But when the worker went to buy provisions or pay rent, he was compelled to pay one-third, and often one-half, as much as the value represented by those banknotes. Sometimes, in crises, he could not get them cashed at all; they became pitiful souvenirs in his hands. This fact was faintly recognized by a New York Senate Committee when it reported in 1819 that every artifice in the wit of man had been devised to find ways of putting these notes into circulation; that when the merchant got this depreciated paper, he „saddled it upon the departments of productive labor.” „The farmer and the mechanic alike,” went on the report, „have been invited to make loans and have fallen victims to the avarice of the banker. The result has been the banishment of metallic currency, the loss of commercial confidence, fictitious capital, increase of civil prosecutions and multiplication of crimes.”[122] What the committee did not see was that by this process those in control of the banks had, with no expenditure, possessed themselves of a considerable part of the resources of the country and had made the worker yield up twice and three times as much of the produce of his labor as he had to give before the system was started.

The large amount of paper money, without any basis of value whatever, was put out at a heavy rate of interest. When the merchant paid his interest, he charged it up as extra cost on his wares; and when the worker came to buy these same wares which he or some fellow-worker had made, he was charged a high price which included three things all thrown upon him: rent, interest and profit. The banks indirectly sucked in a large portion of these three factors. And so thoroughly did the banks control legislation that they were not content with the power of issuing spurious paper money; they demanded, and got through, an act exempting bank stock from taxation.

Thus year after year this system went on, beggaring great numbers of people, enriching the owners of the banks and virtually giving them a life and death power over the worker, the farmer and the floundering, struggling small business man alike. The laws were but slightly altered. „The great profits of the banks,” reported a New York Senate Committee on banks and insurance in 1834, „arise from their issues. It is this privilege which enables them, in fact, to coin money, to substitute their evidences of debt for a metallic currency and to loan more than their actual capitals. A bank of $100,000 capital is permitted to loan $250,000; and thus receive an interest on twice and a half the amount actually invested.”[123]


It cannot be said that all of the workingmen were apathetic, or that some did not see through the fraud of the system. They had good reason for the deepest indignation and exasperation. The terrible injustices piled upon them from every quarter – the low wages that they were forced to accept, often in depreciated or worthless banknotes, the continually increasing exactions of the landlords, the high prices squeezed out of them by monopolies, the arbitrary discriminations of law – these were not without their effect. The Workingmen’s Party, formed in 1829 in New York City, was the first and most ominous of these proletarian uprisings. Its resolutions read like a proletarian Declaration of Independence, and would unquestionably have resulted in the most momentous agitation, had it not been that it was smothered by its leaders, and also because the slavery issue long obscured purely economic questions. „Resolved,” ran its resolutions adopted at Military Hall, Oct. 19, 1829,

in the opinion of this meeting, that the first appropriation of the soil of the State to private and exclusive possession was eminently and barbarously unjust. That it was substantially feudal in its character, inasmuch as those who received enormous and unequal possessions were lords and those who received little or nothing were vassals. That hereditary transmission of wealth on the one hand and poverty on the other, has brought down to the present generation all the evils of the feudal system, and that, in our opinion, is the prime source of all our calamities.

After declaring that the Workingmen’s Party would oppose all exclusive privileges, monopolies and exemptions, the resolutions proceeded:

We consider it an exclusive privilege for one portion of the community to have the means of education in colleges, while another is restricted to common schools, or, perhaps, by extreme poverty, even deprived of the limited education to be acquired in those establishments. Our voice, therefore, shall be raised in favor of a system of education which shall be equally open to all, as in a real republic, it should be.

Finally the resolutions told what the Workingmen’s Party thought of the bankers and the banking system. The bankers were denounced as „the greatest knaves, impostors and paupers of the age.” The resolutions went on:

As banking is now conducted, the owners of the banks receive annually of the people of the State not less than two millions of dollars in their paper money (and it might as well be pewter money) for which there is and can be nothing provided for its redemption on demand….

The mockery that went up from all that was held influential, respectable and stable when these resolutions were printed, was echoed far and wide. They were looked upon first as a joke, and then, when the Workingmen’s Party began to reveal its earnestness and strength, as an insolent challenge to constituted authority, to wealth and superiority, and as a menace to society.


The „Courier and Enquirer,” owned by Webb and Noah, in the pay of the United States Bank, burst out into savage invective. It held the Workingmen’s Party up to opprobrium as an infidel crowd, hostile to the morals and the institutions of society, and to the rights of property. Nevertheless the Workingmen’s Party proceeded with an enthusiastic, almost ecstatic, campaign and polled 6,000 votes, a very considerable number compared to the whole number of voters at the time.

By 1831, however, it had gone out of existence. The reason was that it allowed itself to be betrayed by the supineness, incompetence, and as some said, the treachery, of its leaders, who were content to accept from a Legislature controlled by the propertied interests various mollifying sops which slightly altered certain laws, but which in no great degree redounded to the benefit of the working class. For a few bits of counterfeit, this splendid proletarian uprising, glowing with energy, enthusiasm and hope, allowed itself to be snuffed out of existence.

What a tragedy was there! And how futile and tragic must inevitably be the fate of any similar movement which depends not upon itself, not upon its own intrinsic, collective strength and wisdom, but upon the say-so of leaders who come forward to assume leadership. Representing only their own timidity of thought and cowardice of action, they often end by betraying the cause placed confidingly in their charge. That class which for these immemorial generations has done the world’s work, and as long has been plundered and oppressed and betrayed, thus had occasion to learn anew the bitter lesson taught by the wreckage of the past, that it is from itself that the emancipation must come; that it is itself which must essentially think, act and strike; that its forces, long torn asunder and dispersed, must be marshalled in invulnerable compactness and iron discipline; and so that its hosts may not again be routed by strategy, no man or set of men should be entrusted with the irrevocable power of executing its decrees, for too often has the courage, boldness and strength of the many been shackled or destroyed by the compromising weakness of the leaders.


Passing over the Equal Rights movement in 1834, which was a diluted revival of the Workingmen’s Party, and which, also, was turned into sterility by the treachery of its leaders, we arrive at the panic of 1837, the time when Astor, profiting from misfortune on every side, vastly increased his wealth.

The panic of 1837 was one of those periodic financial and industrial convulsions resulting from the chaos of capitalist administration. No sooner had it commenced, than the banks refused to pay out any money, other than their worthless notes. For thirty-three years they had not only enjoyed immense privileges, but they had used the powers of Government to insure themselves a monopoly of the business of manufacturing money. In 1804 the Legislature of New York State had passed an extraordinary law, called the restraining act. This prohibited, under severe penalties, all associations and individuals not only from issuing notes, but „from receiving deposits, making discounts or transacting any other business which incorporated banks may or do transact.” Thus the law not only legitimatized the manufacture of worthless money, but guaranteed a few banks a monopoly of that manufacture. Another restraining act was passed in 1818. The banks were invested with the sovereign privilege of depreciating the currency at their discretion, and were authorized to levy an annual tax upon the country, nearly equivalent to the interest on $200,000,000 of deposits and circulation. On top of these acts, the Legislature passed various acts compelling the public authorities in New York City to deposit public money with the Manhattan Company. This company, although, as we have seen, expressly chartered to supply pure water to the city of New York, utterly failed to do so; at one stage the city tried to have its charter revoked on the ground of failure to carry out its chartered function, but the courts decided in the company’s favor.[124]

At the outbreak of the panic of 1837, the New York banks held more than $5,500,000 of public money. When called upon to pay only about a million of that sum, or the premium on it, they refused. But far worse was the experience of the general public. When they frantically besieged the banks for their money, the bank officials filled the banks with heavily armed guards and plug-uglies with orders to fire on the crowd in case a rush was attempted.[125]

In every State conditions were the same. In May, 1837, not less than eight hundred banks in the United States suspended payment, refusing a single dollar to the Government whose deposits of $30,000,000 they held, and to the people in general who held $120,000,000 of their notes. No specie whatever was in circulation. The country was deluged with small notes, colloquially termed shinplasters. Of every form and every denomination from the alleged value of five cents to that of five dollars, they were issued by every business individual or corporation for the purpose of paying them off as wages to their employees. The worker was forced to take them for his labor or starve. Moreover, the shinplasters were so badly printed that it was not hard to counterfeit them. The counterfeiting of them quickly became a regular business; immense quantities of the stuff were issued. The worker never knew whether the bills paid him for his work were genuine or counterfeit, although essentially there was not any great difference in basic value between the two.[126]


Now the storm broke. Everywhere was impoverishment, ruination and beggary. Every bank official in New York City was subject to arrest for the most serious frauds and other crimes, but the authorities took no action. On the contrary, so complete was the dominance of the banks over Government,[127] that they hurriedly got the Legislature to pass an act practically authorizing a suspension of specie payments. The consequences were appalling. „Thousands of manufacturing, mercantile, and other useful establishments in the United States,” reported a New York Senate Committee, „have been broken down or paralyzed by the existing crisis…. In all our great cities numerous individuals, who, by a long course of regular business, had acquired a competency, have suddenly been reduced, with their families to beggary.”[128] New York City was filled with the homeless and unemployed. In the early part of 1838 one-third of all the persons in New York City who subsisted by manual labor, were wholly or substantially without employment. Not less than 10,000 persons were in utter poverty, and had no other means of surviving the winter than those afforded by the charity of neighbors. The almshouses and other public and charitable institutions overflowed with inmates, and 10,000 sufferers were still uncared for.

The prevailing system, as was pointed out even by the conventional and futile reports of legislative committees, was one inevitably calculated to fill the country with beggars, vagrants and criminals. This important fact was recognized, although in a remote way, by De Beaumont and De Tocqueville who, however, had no fundamental understanding of the deep causes, nor even of the meaning of the facts which they so accurately gathered. In their elaborate work on the penitentiary system in the United States, published in 1833, they set forth that it was their conclusion that in the four States, New York, Massachusetts, Connecticut and Pennsylvania, the prison system of which they had fully investigated, almost all of those convicted for crimes from 1800 to 1830 were convicted for offenses against property. In these four States, collectively, with a population amounting to one-third of that of the Union, not less than 91.29 out of every 100 convictions were for crimes against property, while only 8.66 of every 100 were for crimes against persons, and 4.05 of every 100 were for crimes against morals. In New York State singly, 93.56 of every 100 convictions were for crimes against property and 6.26 for crimes against persons.[129]


Thus we see from these figures filled with such tragic eloquence, the economic impulse working at bottom, and the property system corrupting every form of society. But here a vast difference is to be noted. Just as in England the aristocracy for centuries had made the laws and had enforced the doctrine that it was they who should wield the police power of the State, so in the United States, to which the English system of jurisprudence had been transplanted, the propertied interests, constituting the aristocracy, made and executed the laws. De Beaumont and De Tocqueville passingly observed that while the magistrates in the United States were plebeian, yet they followed out the old English system; in other words, they enforced laws which were made for, and by, the American aristocracy, the trading classes.

The views, aims and interests of these classes were so thoroughly intrenched in law that the fact did not escape the keen notice of these foreign investigators. „The Americans, descendants of the English,” they wrote, „have provided in every respect for the rich and hardly at all for the poor…. In the same country where the complainant is put in prison, the thief remains at liberty, if he can find bail. Murder is the only crime whose authors are not protected[130]…. The mass of lawyers see in this nothing contrary to their ideas of justice and injustice, nor even to their democratic institutions.”[131]


The system, then, frequently forced the destitute into theft and mendicancy. What resulted? Laws, inconceivably harsh and brutal, enacted by, and in behalf of, property rights were enforced with a rigor which seems unbelievable were it not that the fact is verified by the records of thousands of cases. Those convicted for robbery usually received a life sentence; they were considered lucky if they got off with five years. The ordinary sentence for burglary was the same, with variations. Forgery and grand larceny were punishable with long terms, ranging from five to seven years. These were the laws in practically all of the States with slight differences. But they applied to whites only. The negro slave criminal had a superior standing in law, for the simple reason that while the whites were „free” labor, negroes were property, and, of course, it did not pay to send slaves to prison. In Maryland and in most Southern States, where the slaveholders were both makers and executors of law, the slaves need have no fear of prison. „The slaves, as we have seen before, are not subject to the Penal Code of the whites; they are hardly ever sent to prison. Slaves who commit grave crimes are hung; those who commit heinous crimes not punishable with death are sold out of the State. In selling him care is taken that his character and former life are not known, because it would lessen his price.” Thus wrote De Beaumont and De Tocqueville; and in so writing they handed down a fine insight into the methods of that Southern propertied class which assumed so exalted an opinion of its honor and chivalry.

But the sentencing of the criminal was merely the beginning of a weird life of horror. It was customary at that period to immure prisoners in solitary confinement. There, in their small and reeking cells, filled with damps and pestilential odors, they were confined day after day, year after year, condemned to perpetual inactivity and silence. If they presumed to speak, they were brutally lashed with the whip. They were not allowed to write letters, nor to communicate with any member of their family. But the law condescended to allow a minister to visit them periodically in order to awaken their religious thoughts and preach to them how bad a thing it was to steal! Many were driven stark mad or died of disease; others dashed their brains out; while others, when finally released, went out into the world filled with an overpowering hatred of Society, and all its institutions, and a long-cherished thirst for vengeance against it for having thus so cruelly misused them.

Such were the laws made by the propertied classes. But they were not all. When a convict was released, the law allowed only three dollars to be given him to start anew with. „To starve or to steal is too often the only alternative,” wrote John W. Edmonds, president of the New York board of prison inspectors in 1844.[132] If the released convict did steal he was nearly always sent back to prison for life.

Equally severe in their way were the laws applying to mendicants and vagrants. Six months or a year in the penitentiary or workhouse was the usual sentence. After the panic of 1837, crime, mendicancy, vagrancy and prostitution tremendously increased, as they always do increase after two events: war, which, when over, turns into civil life a large number of men who cannot get work; and panics which chaotically uproot industrial conditions and bring about widespread destitution. Although undeniably great frauds had been committed by the banking class, not a single one of that class went to jail. But large numbers of persons convicted of crimes against property, and great batches of vagrants were dispatched there, and also many girls and women who had been hurled by the iron force of circumstances into the horrible business of prostitution.

These were some of the conditions in those years. Let it not, however, be supposed that the traders, bankers and landowners were impervious to their own brand of sensibilities. They dressed fastidiously, went to church, uttered hallelujahs, gave dainty receptions, formed associations to dole out alms and – kept up prices and rents. Notwithstanding the general distress, rents in New York City were greater than were paid in any other city or village upon the globe.[133]


[112] Hammond’s „Political History of the State of New York,” 1:129-130.

[113] Journal of the [New York] Senate and Assembly, 1803:351 and 399.

[114] Ibid., 1812:134.

[115] Ibid., 1812:259-260. Frequently, in those days, the giving of presents was a part of corrupt methods.

[116] „The members [of the Legislature] themselves sometimes participated in the benefits growing out of charters created by their own votes; … if ten banks were chartered at one session, twenty must be chartered the next, and thirty the next. The cormorants could never be gorged. If at one session you bought off a pack of greedy lobby agents … they returned with increased numbers and more voracious appetite.” – Hammond, ii:447-448.

[117] Journal of the [New York] Senate, 1824:1317-1350. See also Chap. VIII, Part II of this work.

[118] „Letter and Authentic Documentary Evidence in Relation to the Trinity Church Property,” etc., Albany, 1855. Hoffman, the best authority on the subject, says in his work published forty-five years ago: „Very extensive searches have proved unavailing to enable me to trace the sources of the title to much of this upper portion of Trinity Church property.” – „State and Rights of the Corporation of New York,” ii:189.

[119] In all of the official communications of Trinity Church up to 1867 this lease is referred to as the „Burr or Astor Lease.” – „The Communication of the Rector, Church Wardens and Vestrymen of Trinity Church in the city of New York in reply to a resolution of the House, passed March 4, 1854”; Document No. 130, Assembly Docs. 1854. Also Document No. 45, Senate Docs. 1856. Upon returning from exile Burr tried to break his lease to Astor, but the lease was so astutely drawn that the courts decided in Astor’s favor.

[120] In his descriptive work on New York City of a half century ago, Matthew Hale Smith, in „Sunshine and Shadow in New York” (pp. 121-122), tells this story: „The Morley [Mortier] lease was to run until 1867. Persons who took the leases supposed that they took them for the full term of the Trinity lease. [John Jacob] Astor was too far-sighted and too shrewd for that. Every lease expired in 1864, leaving him [William B. Astor, the founder’s heir] the reversion for three years, putting him in possession of all the buildings, and all of the improvements made on the lots, and giving him the right of renewal.” Smith’s account is faulty. Most of the leases expired in 1866. The value of the reversions was very large.

[121] Docs. No. 130 [New York] Assembly Docs., 1854:22-23.

[122] Journal of the [New York] Senate, Forty-second Session, 1819:67-70.

[123] Doc. No. 108, [New York] Senate Documents, 1834, Vol. ii. The committee stated that banks in the State outside of New York City, after paying all expenses, divided 11 per cent. among the stockholders in 1833 and had on hand as surplus capital 16 per cent. on their capital. New York City banks paid larger dividends.

[124] People of the State of New York vs. Manhattan Co. – Doc. No. 62, Documents of the Board of Assistant Aldermen, 1832-33, Vol. ii.

[125] Doc. No. 68 [New York] Senate Docs., 1838, Vol. ii.

[126] Abridgement of the Debates of Congress, from 1789 to 1856, xiii:426-427.

[127] In the course of this work, the word Government is frequently used to signify not merely the functions of the National Government, but those of the totality of Government, State and municipal, not less than National.

[128] Doc. No. 49 [New York] Senate Docs., 1838, Vol. ii.

[129] „On the Penitentiary System in the United States,” etc., by G. De Beaumont and A. De Tocqueville, Appendix 17, Statistical Notes: 244-245.

[130] A complete error. Walling, for more than thirty years Superintendent of Police of New York City, says in his „Memoirs” that he never knew an instance of a rich murderer who was hanged or otherwise executed. And have we all not noted likewise?

[131] „On the Penitentiary System,” etc., 184-185.

[132] Prison Association of New York, Annual Reports, 1844-46. It is characteristic of the origin of all of these charity associations, that many of the founders of this prison association were some of the very men who had profited by bribery and theft. Horace Greeley was actuated by pure humanitarian motives, but such incorporators as Prosper Wetmore, Ulshoeffer, and others were, or had been, notorious in lobbying by bribing bank charters through the New York Legislature.

[133] „The New Yorker,” Feb. 17, 1838.

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