Moral Economies of Money: Politics and the Monetary Constitution of Society 9781503633452

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MORAL ECONOMIES OF MONEY

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CUR R E NCIE S New Thinking for Financial Times STEFAN EICH AND MARTIJN KONINGS, EDITORS

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Moral Economies of Money Politics and the Monetary Constitution of Society JA KOB F EINIG

STAN FO RD U N IVERSITY PRESS Stanford, California

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Stanford Univ er s ity Pr es s Stanford, California ©2022 by Jakob Feinig. All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, or in any information storage or retrieval system without the prior written permission of Stanford University Press. Printed in the United States of America on acid-free, archival-quality paper ISBN 9781503629172 (cloth) ISBN 9781503633445 (paper) ISBN 9781503633452 (electronic) Library of Congress Control Number: 2022003999 Library of Congress Cataloging-in-Publication Data available upon request. Cover art: Six dollar bank note of the United Colonies, Philadelphia, 1776. Wood engraving (facsimile), published in 1886. iStock Typeset by Newgen North America in 10/15 Janson Text

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To Ana and Irene, with love.

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Table of Contents

Acknowledgments

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I N T R O D U C T I O N: M O R A L E C O N OMI E S O F

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MONE Y A ND MONE TA R Y S IL E NC ING

1 S E T T L E R D E MO C R A C Y A S A MO NE TA R Y S C H O O L : T O WA R D MOR A L E C ONOMIE S OF MONE Y 14 2 MOR A L E C ONOMIE S OF MONE Y

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3 MO NE TA R Y S IL E N C IN G A ND T HE R O M A N C E O F UNME D I AT E D E X C H A N G E S 60 4 GR E E NB A C K MOR A L E C ONOMIE S

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5 W H AT K IND S O F P E O P L E S H O UL D MO NE Y U S E R S BE ? 6 MONE TA R Y S IL E NC ING A S A NE W DE A L L E G A C Y

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C O N C L U S I O N: F R O M N E W D E A L S I L E N C I N G TO A MOR AL ECONOMY OF MONE Y

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Notes 149 References 161 Index 183

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Acknowledgments

This book is my answer to questions about money creation that I began to articulate at the University of Vienna, where I learned about global and European money politics, regulation theory, and political economy more generally from Johannes Jäger, Karin Fischer, Joachim Becker, and Andreas Novy. Philip Taucher was an important part of this process; he helped me think about political economy through a Freirian lens. When I started graduate school at Binghamton, I wanted to know why there were no broad and inclusive public controversies about money creation in the Eurozone. A Social Science Research Council grant enabled me to do preliminary interviews with key informants and learn from Sheila Jasanoff and Frédéric Lebaron. I soon realized I had to find a historical case study to understand popular monetary knowledge and ignorance as an outcome, not a given. In one of his lectures, Andreas Novy had mentioned Greenbackers and bimetallists, and I began devouring the literature on nineteenth-century US Populism. In a frenzied process that took several years, I began making sense of eighteenth-century and nineteenth-century controversies but also expanded my research into the New Deal era. I then came across Modern Monetary Theory (MMT) and realized L. Randall Wray agreed with

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the eighteenth-century cleric Cotton Mather about what money is. I had found chartalism, a theoretical framework that highlights the relation between money issuer and money users. I had also found a historical case study I could use as a starting point: eighteenth-century Massachusetts. I want to thank my graduate school friends, especially Albert Fu, Beniam Awash, and Sanem Güvenç, for listening to me at a time when I struggled to develop a framework. When he read one of my earliest attempts to write about this topic, Andrew Block helped me understand that popular disengagement has to be the effect of silencing (years later, he also helped me rethink the introduction to this book). I also want to thank my committee members for being a critical part of this process. Shelley Feldman introduced me to Institutional Ethnography and helped me develop my conceptual framework. Fred Deyo urged me to look at the New Deal, and Joshua Price read and commented on my text. When I received comments on what would become my first published article, an anonymous reviewer for the Journal of Historical Sociology suggested I use E. P. Thompson’s moral economy approach to structure my writing. Soon after, I attended the first Money on the Left Conference in Tampa. I had encountered a community of people who mine the possibilities of fiat money. I hope its public spirit is present on every page of the book. Later, MMT conferences provided a critical space to develop my thinking. The hosts of the Money on the Left podcast, Scott Ferguson, Bill Saas, and Maxximilian Seijo, deserve special mention. They are among the earliest readers of the manuscript and helped me deepen its argument and public purpose when they invited me on their podcast. Scott Ferguson’s book Declarations of Dependence, and his generous reading of my work, were especially critical. Nathan Tankus read and commented on several chapters; whatever nuance and originality the chapter on the antebellum United States has is thanks to his nudging. Rohan Grey read early versions of several chapters; his public-mindedness animates the book manuscript beyond the citations. David Freund read, and commented on, several chapters and helped me understand monetary governance in the postwar United States. Benjamin Wilson and Dirk Ehnts closely read the manuscript. I want to thank them for encouraging me, for helping me avoid critical mistakes, and for sharpening my argument.

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Acknowledgments

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Diren Valayden, my friend and colleague in the Human Development Department at Binghamton University (SUNY), read the entire manuscript several times and speeded up the process with his ability to direct my efforts in the right direction. It is customary to point out in an endnote when an author owes an argument to someone else. I can’t do that in his case because I would have to double the number of endnotes. The book benefited from exchanges with specialized historians, especially Andrew David Edwards and Stephen Ortiz. They saved me from making some grave errors. I am sure many remain, but I am the only one to blame. I hope historians will focus on my broader sociological claims, not errors in detail. I also learned from Bruno Théret, Marjoleine Kars, Omar H. Ali, Richard Sutch, Leonard Richards, Julie Mell, Brent Tarter, and Loren Gatch. Simone Polillo invited me to present my manuscript as part of the University of Virginia’s Talks on Economic Sociology, Markets, Politics, and Organizations. I am indebted to Simone and the workshop participants whose comments helped me clarify my arguments. I want to thank Erica Wetter, Caroline McKusick, and Emily Smith from Stanford University Press, as well as copyeditor Elisabeth Magnus. Their professionalism made this process smoother than I expected. Two anonymous reviewers helped me sharpen my thinking about money as a constitutional project and improve the final manuscript. Thanks to series editors Martijn Konings and Stefan Eich for their trust in this project. In Binghamton, many people supported me throughout this process. I can’t mention them all, but the following people supported me in critical times. The Hadžiabdic´ family provided an exceptional space for my writing in the much-missed Crêpe Heaven café. Stephen McGruder, who passed shortly before I finished this manuscript, helped me deepen my thinking about this country—the historical case study that had become my home. I benefited from exchanges with and encouragement from Lubna Chaudhry, who passed in the year before the book’s completion, and Suzy Lee. After I began teaching a course on debt and money, my students helped me clarify my thinking. Finally, this project would have been unthinkable without Binghamton’s librarians, especially the Interlibrary Loan staff. To my family and friends in Austria, thank you for putting up with someone twice removed from your lives: across the Atlantic, and lost in a

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book process. Sending this text to the press means we will be closer than before. My daughter Irene has accompanied this book since her birth eight and a half years ago. She helped me advance the book in many ways. If you’re stressed, she would tell me, focus on what you want to say—the big picture, not the details. Once, she asked: What would Christine Nöstlinger say if she heard it will take you another year to finish? We had just learned that the Viennese author had published 150 children’s books. And some debts are too big to acknowledge them in writing. Thank you Ana.

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MORAL ECONOMIES OF MONEY

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I NTR O D U CTI O N

Moral Economies of Money and Monetary Silencing

I T W O UL D S UR P R I S E MO S T P E O P L E IN T O D AY ’S United States to hear that in

the past, political groups demanded that lawmakers create money and told them how they thought this new currency should reach the population. During the depression of the 1890s, for instance, hundreds of people who were looking for work, mostly white but some Black, marched on Washington, D.C. They demanded that Congress create currency and advance it to state and local governments. State and local authorities could then use this currency to pay workers who would improve neglected roads. Through their demands, these marchers highlighted the power of Congress to create money, employ people in situations of forced idleness, and improve public infrastructure. They also advanced an understanding of money as a public good. After they had entered the capital, police prevented their leaders from making a speech, arresting and beating several of them (Alexander 2015; Prout 2016). The first march on Washington—by what became known as Coxey’s Army—was not an isolated event but part of a larger pattern of popular involvement in money creation. In this book, I show how users of the monetary systems from seventeenth-century British colonial North America to the New Deal took part in shaping monetary institutions. I call knowledges and practices that

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Introduction

enabled people to shape money creation “moral economies of money,” and processes that disabled such patterns “monetary silencing.” Because most of the moral economies of money I discuss in this book were part of settler colonial projects, it would be a mistake to idealize them. Moral economies of money helped constitute colonizer-colonized relations by monetary means (chapters 1 and 2), excluded Black people, and replaced an institutional understanding of money with anti-Semitism (chapter 6). Most moral economies of money sought to secure a white men’s ideal of living as “independent” small producers, which they attempted to realize at other people’s expense and at other people’s peril.1 In this book, I address aspects of the racial history of moral economies, but this dimension requires further investigation,2 as does their gendered character.3 Despite its limits, this book provides elements for a historically grounded understanding of one condition of present-day political life: the disconnect between money creation and public knowledge about it. This book allows readers to understand this disconnect as a historical outcome. In the eighteenth century, large groups of people understood money creation as a political process in a context in which monetary institutions were intelligible. In the antebellum era, people lost sight of money’s character as a malleable governance institution when they focused their critique exclusively on corporate banks and demanded money made of gold and silver but forgot about the possibility of democratizing money creation. The Civil War’s public currency (greenbacks) made money’s political character visible again, inaugurating a period of moral economies that lasted until the 1930s. Finally, New Dealers developed monetary institutions and rhetoric that obscured the stakes of public money creation and began a period of monetary silence that lasts to this day. Because money users’ disconnect from knowledge about money creation limits people’s potential to stabilize their lives and avoid mass impoverishment, bankruptcy, and unemployment, the stakes are high. Money users’ response to Covid-19 illustrates its cost. In the pandemic’s first weeks, Neel Kashkari, the president of the Minneapolis Federal Reserve Bank, appeared on national television (Pelley 2020). The interviewer asked the central banker: “Can you characterize everything that the Fed has done this past week as essentially flooding the system with money?”

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Kashkari: Yes, exactly. Interviewer: And there’s no end to your ability to do that? Kashkari: There is no end to our ability to do that. Kashkari emphasized his institution’s capacity to create money, and in the weeks after the interview the federal government illustrated its power over money creation through unprecedented levels of spending. At the same time, the government left many victims of the pandemic out in the cold. For instance, a Covid-19 patient on an inhalator wondered who was going to pay for his medical care before he called his family for the last time (Elassar 2020). On a larger scale, state and local governments faced budget shortfalls. But when the Federal Reserve offered advances to state and local governments, it found few takers. The central bank’s Municipal Liquidity Facility (MLF) could have helped public institutions such as municipalities or school districts, prevented more unemployment and business closures, and stabilized many people’s lives.4 But no major social movement urged state and local governments to access these funds. Before it ran out at the end of 2020, only the State of Illinois and New York City’s Metropolitan Transport Association had accessed the MLF. During a crisis that was existential for many money users, no shared knowledge enabled people to pressure municipal and state-level politicians to access these funds. Today, most people do not think of themselves as money users who stand in a relation with the institutions authorized to create money.

Money Users and Money Issuers Neochartalist monetary theorists distinguish between governance bodies that can issue money and money users who cannot.5 Money issuers, such as the US government, are not revenue constrained. Only the resources that actors offer for sale in the issuer’s currency limit what it can purchase and hence the character and scope of projects it can undertake. Money users, in contrast, cannot issue a generally accepted pecuniary medium. Money users, including households, firms, and municipal and state governments, are revenue constrained and face severe sanctions if they cannot balance

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Introduction

income and outgo. Therefore, their capacity to mobilize resources is more limited than the money issuers’. The distinction between money issuers and money users expands possibilities for democratic governance because it enables debates about which resources a money issuer should mobilize for public purposes, and to what end, while undermining the idea that money-issuing governments are revenue constrained.6 But why should money users accept the issuer’s cash? Neochartalists argue that the issuer makes its money current when it imposes taxes and fines. To discharge the debts the issuer has established, people need to get the currency that the issuer has created—the only one it promises to accept. Because of the pressure to acquire this currency, a population begins to use it in everyday payments. In sum, the issuer forces its pay tokens on money users through taxation and the threat of penalty for failure to comply.7 In such a situation, people need to sell their labor power, their products, or assets they own. Unable to issue money, they have to act as economic individuals: they work for a wage, attempt to buy low and sell dear, and so on. While such activities are common across time and space, in this book I show that money users can develop other forms of agency.8 In the British North American colonies and the United States, money users reshaped money creation mechanisms, revising the neochartalist script and enriching the role of economic individuals in which it casts them.9 They participated in what the historian Christine Desan (2014) calls “monetary design”:10 making decisions about the principles that govern money creation. Monetary design varies over time and across space, shaping possibilities for different groups and constituting society. For instance, if a government establishes loan offices that issue currency against real estate, it empowers landowners relative to their creditors. Landowners might support such a monetary design, while their creditors might be skeptical (see chapters 1 and 2). If a government issues cash against agricultural staples, it empowers farmers who control their production relative to those who market them. The former might be in favor, and the latter might be opposed (see chapter  4). If a government issues money against gold or silver, it empowers those who have access to specie relative to everyone else (see chapters 2

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and 5). And if a government issues money against labor power when it hires people, it stabilizes workers’ lives and strengthens their position vis-à-vis private employers (Tcherneva 2020). In sum, when societies design money creation mechanisms, they constitute themselves. Banking is a form of monetary design in which legislatures place profitoriented institutions at the center of the money creation process (see chapter 3). When today’s commercial banks extend loans, they create deposits: that is, the bank marks up a debtor’s account to the amount it advances.11 Banks decide who should, and who should not, get credit to mobilize resources. For instance, a bank can decide to extend credit for luxury housing, enabling a developer to purchase labor power and building materials. In this example, banks shape the built environment and help choose the kinds of people who inhabit a space. Those who receive credit spend money into circulation and pass it on to other money users. But those who receive money first (Desan 2014) can decide where it flows, shaping social spaces as they do so. The practice of delegating money creation to banks is a little over three centuries old and represents a world-changing break with medieval patterns. The currencies of British colonial North America, the starting point for this book, emerged in the period in which medieval money was replaced by bank money, a distinct form of money creation with democratic potential.

Settler Democratic Currencies Seventeenth-century English policy makers considered that the inflexible medieval currency supply (coined alloys of silver and gold) was insufficient for financing wars, and they sought to create a currency that could expand when needed. In response, Parliament established the Bank of England, which could create tax-receivable paper currency and operate for the profit of its owners. Thereby, Parliament made the profit motive a legitimate driver of money creation (Desan 2014). The controversies that led to the Bank of England Act involved Parliament, pamphleteers, and financiers (Desan 2014; Carruthers 1996), but at a time when only a fraction of the

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Introduction

population could vote, most money users did not take part in them. England thus developed a routinized way of producing elastic money insulated from nonelite pressure long before the franchise became generalized. Like English policy makers, colonists in British North America sought to create a currency that could expand, but political conditions were distinct because generalized voting for European men began earlier. In the very decades in which corporate banking spread in England, the colonies printed public currency, and electorates learned about monetary matters through political practice. They asked and answered central questions of monetary design: How should public money enter circulation? Which groups should have access to currency, and under what conditions? How much of it should they create? Whom could they force to accept a currency in payment of a debt? (chapters 1 and 2). Monetary controversies occurred across the early modern world, but the British North American colonies and, later, the United States stand apart as the clearest examples of large groups’ recurring involvement in creating those currencies that are generally accepted within a jurisdiction.12 In Europe, monetary policy, in addition to economic policy writ large, was insulated from popular pressure until much later. Bordo and Eichengreen (2004:58) note that “in many countries the right to vote was limited until after World War I,” restricting “the ability of those subject to unemployment to object when monetary policy was targeted at other variables.” In France and Germany, for instance, there was no popular involvement comparable to that in the United States during either the crises of the nineteenth century or the interwar period.13 In the colonized part of the world, overwhelming European violence made democratic money politics impossible. European money issuers forced colonized societies to become users of their currencies while destroying Native ones, a process that also occurred in the lands the United States claims today (see chapter 1; Forstater 2005; Braudel 1981; Pigeaud and Samba Sylla 2018). In sum, the United States and its predecessor polities are the clearest example of a recurring pattern of broad but exclusivist involvement in governmental money creation. Therefore, they constitute a privileged terrain for studying the changing character of money users’ agency over time and

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are a productive starting point for comparative inquiry into what I call moral economies of money.

Moral Economies of Money When money users understood the stakes of monetary design, moral economies of money flourished.14 Money users’ capacity and willingness to take part in the politics of monetary design characterize such moral economies. From a moral economic perspective, money is not a neutral quantity of things but an integral part of democratic processes. For instance, after the Civil War, farmers who were forced to do business with local credit monopolists wanted to redesign monetary institutions so that affordable public credit could reach them. They demanded that the federal government establish warehouses and issue currency against staples they would store there. Redesigning money creation, these money users claimed, was the only way of bypassing usurious creditors and holding on to their land (chapter 4). To realize their vision, moral economic actors petitioned legislatures, published periodicals, organized massive educational and electoral campaigns, and resorted to direct action. Moral economic groups argued that current money creation mechanisms were unjust and did not reward their efforts adequately. For instance, in the first years of the Great Depression, national farmers’ organizations claimed that the value of their contributions was indisputable, while monetary institutions were malleable and needed to be rearranged to reflect desert. “We’ll eat our meat and ham and eggs,” one of them wrote, “and let them eat their gold.” A gold standard and bank money creation were institutional choices, but food production was necessary (chapter 6). In moral economic situations, communities of useful people challenged the idea that money could be neutral and considered “money” to be a process that, to become just, required public vigilance and institutional change. Moral economies were more than collectively articulated policy preferences with distributive consequences. When money users took part in them, they understood they were rearranging social relations on a large scale, what Desan (2014, 2017) calls the monetary constitution of society.

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Introduction

As they did so, they also constituted themselves as agents capable of ordering their relation to others. Whenever moral economies flourished, there were clashes about money users’ legitimate role in money creation. For instance, while postbellum defenders of a gold standard argued that impoverished and indebted people had no right to participate in monetary design, Populists claimed it was their duty to take part in critical reflection and political action (chapter 5). If the category “money user” seems static and individualistic, recurring controversies about people’s capacity to improve money creation processes show it is not. Moral economies of money are distinct from claims about the right to financial support for those deemed in need, such as impoverished persons or those looking for work. They are distinct, also, from claims about the right to a living wage. While today, demands on the government or employers bracket money creation, moral economies placed it front and center: for those who took part in moral economies, the institutional conditions under which money issuing happened shaped possibilities in almost all areas of social life. Such moral economies were not romantic attempts to create a society based on barter. Instead, they imagined the promise of money as both a political and an individual one and sought to create accountable and just institutions. But moral economies are also distinct from controversies about bank nationalization and central banks’ insulation from other governance institutions. During the twentieth century, central banks’ institutional character changed, from midcentury nationalizations to the later trend of independence. Even if public controversies accompanied these shifts, and even if they changed the lay of the land from policy makers’ perspective, these processes were not moral economic in the sense in which I define it here because they did not involve large groups of money users who attempted to promote a monetary design they considered just.15 Even if the relations between today’s central banks and their publics are politicized (see, e.g., Braun 2016; Riles 2018), they unfold within the current framework of money creation and governance. When it emerges, public criticism focuses on policy choices, not broader questions about monetary design. If it assumes current money creation arrangements, such criticism can even become part of what I call monetary silencing.

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Moral Economies and Monetary Silencing I call the processes that reduce money users to individuals who have no role in shaping money creation “monetary silencing.” If they are disconnected from knowledge about the choices involved in institutional design, money users cease to relate to monetary institutions as political beings.16 Silencing processes discourage questions like “Who ought to make currency, and according to what rules?” When silencing is successful, monetary design and its stakes disappear from view, and monetary sleepwalking replaces moral economies (even if the question “Where does money come from?” lingers on). I call the pattern of agency that is the outcome of silencing “monetary silence.”17 In situations of monetary silence, and only in such situations, the category “money users” is stable and can appear static: except for individual acquisitive practices, money users seem passive. Silencing processes are multifaceted. Because money users take cues about what “money” is from the way it is currently institutionalized, the restructuring of large-scale governmental money creation can become an important silencing process. For instance, treasury-issued currencies—such as Civil War greenbacks (chapters 4 and 5)—created an intelligible link between legislative decisions and the currency in people’s pockets. These pay tokens made it plausible to think of money as a mundane creature of the law, comparable to postage stamps.18 Treasury currencies encouraged money users to ask questions about the rules that governed money’s making and became typical starting points for moral economies. Today, creating central bank accounts for all money users would establish a direct relation between federal money-creating authorities and the US population, which could lead to far-reaching debates about monetary design and the relative advantages of bank and public currency creation (Grey 2019). In contrast to treasury currency, today’s bank money is more difficult to understand from the perspective of everyday life, and this difficulty has silencing effects. When banks make loans, they create “new” money as deposits. But to the public at large, these deposits are not visible as such, and their relation with central bank and treasury operations is difficult to grasp. Money users relate to myriad entry points—from ATMs to payday lenders—without grasping them as part of larger institutions and larger

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Introduction

relations (Scott 2013). In such contexts, money users perceive a rupture between money in everyday life and the monetary system.19 Their knowledge is limited to practices such as paying with a banknote or reading the ATM message “withdrawal not authorized,” while the monetary system seems unintelligible. In contrast to treasury currency, bank money creation tends to have silencing effects. Besides institutions, authoritative knowledges can also contribute to monetary silencing. Today’s professional interpreters of money—economists—theorize money in a way that has silencing effects when it discourages its users from engaging with monetary design. For most economists, “Money is what money does”: it is a means of payment, a measure of value, and a store of value.20 This logic emphasizes functions over relations, suspending inquiry into the process of money creation and the relations through which it reaches a household, or fails to do so—the chain of credits that connects public governance and bank money creation to someone’s account and wallet. If money users limit their understanding of money to a list of functions, their capacity to relate to money as a malleable institution remains truncated.21 Today’s economists typically also claim that money is neutral, comparing it to a veil that lies over “real” economic activities and prevents people from seeing a world of barter in which individuals swap goods and services. From this perspective, money facilitates exchanges, but its presence leaves the barter dynamics of the “real” economy unchanged. In the absence of money, we could see what money quantifies—that enriched individuals have contributed more than impoverished ones. The metaphor helps justify questionable activities if they are rewarded with high incomes (Graeber 2011:44; Jennings 1994:557–58). And those with money can feel validated by the veil metaphor, since having money shows that one has done useful work. “Money is a veil” is a message to money users: what you have is what you deserve. As the critical economist Ann Jennings (1994:557) put it, we uphold money’s centrality in creating hierarchies “by denying that it matters.”22 The idea that money is neutral contributes to monetary silence because it eclipses always-political monetary design processes. Claims consistent with the veil metaphor are common in popular literature, and they have similar silencing effects. In the words of the

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twentieth-century motivational speaker Earl Nightingale (1986): “Money is the harvest of our production. Money is what we receive for our production and service. . . . Try to remember this formula: the amount of money we receive will always be in direct relation to the demand for what we do, our ability to do it, and the difficulty of replacing us.” Money reflects individuals’ contribution to society and rewards them in exact proportion. If money is neutral, wealth cannot be unearned, and money users cannot question money’s verdict. Knowledges that accompany bitcoin and the family of related projects also have silencing effects. This statement may appear paradoxical because these “currencies” seem to enlarge monetary possibilities as they bring money creation into public view. Yet if they promote a libertarian logic that dismisses the possibility of democratic governance and seek to substitute a seemingly nonarbitrary money creation mechanism claimed to be distinct from nation-states’ authoritarian and exploitative fiat currencies, bitcoin advocates advance monetary silence.23 Instead of encouraging money users to rethink their agency vis-à-vis the money issuer, and the democratic redesign of monetary institutions, they reject such institutions wholesale when they try to purge all “third parties”—not only banks but also governments—from monetary life (Amato 2018), much as Jacksonian monetary critics did (chapter 3). Instead of redefining social life as they reshape money in an open-ended process, bitcoin promoters fix their identity as individuated bitcoin “miners” and exchangers. In sum, they promote a way of thinking about money that is distinct from moral economies of money that emphasize money’s character as an always-political “governance project” (Desan 2014). Silencing can also take the form of short-term political projects. Opponents considered that moral economies of money threatened the existence of society as they knew it, and they worked to reshape money users’ agency in ways that were compatible with their vision of social order. To do so, they attempted to redistribute monetary knowledge and agency in such a way that the range of people who related to money as political beings shrank. For instance, during the postbellum era, writers and politicians encouraged money users to relate to money as acquisitive individuals only (chapter 5). And counterintuitively, the New Deal stabilized access to money, primarily

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Introduction

for white men, while silencing moral economies (chapter 6). At the other end of the spectrum of silencing lies military mobilization, most prominently against Revolutionary War veterans (on Shays’ Rebellion, see chapter 3) and World War I veterans (on the 1932 Bonus March, see chapter 6). When institutions, knowledges, and political projects disconnect money users from the politics of money creation, monetary silence can enable an upside-down world in which actual resources and skills come to appear as an appendix to what really counts: money. The creature of laws, keystrokes, and mints becomes precious and scarce, while that which is priceless indeed—the skills and labor of real, living individuals who as part of ecosystems reproduce societies—seems to be useful only if there is money to put it to use. Politicians, policy makers, and pundits then invoke a “lack of funds” to justify cuts to social spending or education. Yet the idea that the quantity of money in the public coffers limits what societies can do is a myth. Since money is a malleable institution, it can mobilize existing resources and build new productive capacities.24 In contexts marked by silencing, money can appear to dominate all actors—even governments that claim sovereign status—instead of appearing as a flexible instrument that constellations of users and issuers can deploy to serve democratically defined purposes. In the following chapters, I map the repeated back-and-forth between moral economies and monetary silence from the seventeenth to the early twenty-first century in the British North American colonies and the United States. The goal is not to offer a comprehensive political history of money but to inquire into the structuring of money users’ agency.25 I provide case studies that are based on an analysis of selected colonies/states for which ample published primary and secondary sources are available. In the chapters, I show to what extent these cases can illuminate other spaces and offer parallels and comparisons with other colonies/states. The method varies from chapter to chapter, depending on the sources money users have left. For the eighteenth century I infer money users’ knowledge from documented behavior, but in later periods a wealth of sources allows me to reconstruct moral economic and silencing processes more directly. The money users that appear in this book include participants in colonial-era town meetings, members of social movements and political

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parties, lawmakers, academics, journalists, politicians, and policy makers. These actors documented then-existing patterns of agency in periodicals and pamphlets, petitions and best-selling books, town and legislative records, blueprints for money creation mechanisms, memoirs, letters, and radio broadcasts. These documents, which I analyze as part of a changing institutional and political context, allow me to show how people thought about their rightful place in the monetary system and their capacity to shape it. The resulting narrative is a sequence of moral economies of money and silencing processes that traverse money creation in the British North American colonies, the antebellum era, and the Greenback and Populist eras, as well as the New Deal and its aftermath, which extends to today.

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C HAPTE R 1

Settler Democracy as a Monetary School Toward Moral Economies of Money

T HE PA P E R C UR R E N C IE S O F BR I T I S H N O R T H A ME R I C A taught colonists that cash

is a public good and a creature of the law. Currencies mentioned the legislation that authorized them, and some had an expiration date or stated the purpose for which lawmakers had created them. For instance, Pennsylvania pay tokens indicated that they funded poor relief, the construction of a lighthouse, and a jail. Georgia currency stated that the assembly had issued it for “erecting a Fort and Battery at Cockspur and a Look-out on Midway River” for rebuilding “the Court-House in Savannah,” and for constructing a “light-house on Tybe Island.” These currencies pictured the buildings they financed. Similarly, South Carolina issued monetary instruments “for Raising Forces” to wage war on Natives. These currencies also indicated that treasuries would receive them in payment of taxes, giving people a reason for accepting them.1 These currencies were instructive, but the settler democratic practices they were part of had even deeper pedagogical effects. In this chapter, I introduce the institutions and knowledges that prompted settlers in the British North American colonies to relate to money as political beings and develop moral economic patterns of monetary agency, which I discuss in the next chapter. Focusing on Massachusetts and offering comparisons with other colonies, I show how a range of currencies connected 14

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legislatures, treasuries, town meetings, Native groups, and settlers in rural and urban areas in a context in which widely distributed monetary knowledges flourished. Multiple currencies were common in the early modern era, and the sociologist Viviana Zelizer (1994) has shown that they also exist in today’s societies, from store credits and airline miles to local monetary systems. What sets colonial British North America apart are not its multiple monies but the fact that enfranchised money users came to understand currencies as malleable institutions through which they could shape society and their position within it. This process of knowledge formation enabled moral economies of money, the widespread participation in the politics of money creation that I discuss in chapter 2. These monetary knowledges flourished in response to what settlers called “money scarcity.”

The Scarcity of Silver Coins and the Abundance of Low-Level Monetary Practices Monetary knowledges and controversies unfolded in a context in which there were few silver or gold coins, and money users related to each other through lower-level monetary practices such as book money, ledgers on which merchants entered debts their customers owed them. A global perspective is necessary to understand the scarcity of silver coins. The British North American colonies were a marginal entity in the world economy, small and impoverished relative to the Spanish colonies in the South (e.g., E. Gould 2007). Europeans’ hope to find gold and silver in North America had been in vain (Peterson 2019). In contrast, the silver mines in the Spanish colonies provided the world’s first global currency. Produced in Peru (today’s Bolivia) and Mexico, most silver coins ended up in China. Either they crossed the Atlantic to be used in Europe before being sent east, or Europeans shipped them directly via the Pacific route. European merchants needed silver to buy Chinese goods such as tea, porcelain, and silk. Taxes drove Chinese and global demand for silver: when the Chinese government required peasants, merchants, and tributaries to pay levies in silver coins in the sixteenth century, it created massive demand among one-fourth of the world’s population,

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boosting planetary demand for silver and enabling the Spanish Crown and merchants to spend the money for which Chinese tax laws had created demand: “Without the Chinese demand for silver,” the historians Dennis Flynn and Arturo Giráldez (1995:218) note, “there would have been no finance mechanism for the Spanish empire.” But the first global currency’s institutional foundation, Chinese taxes, was difficult to grasp for most Atlantic money users. For them, silver was the highest-level money because they knew no one who would refuse it in payment of debts, but they were unaware of the Chinese tax laws that underpinned it. It could appear as though the specie content of these coins, by itself, anchored their acceptability. Even the colonial pamphleteers who were most vocal about the need for paper currency, and had become convinced that the so-called intrinsic value of silver and gold coins was not a necessary aspect of a money, did not discuss the role of Chinese taxes.2 Few advocates of paper currency asked: What would the value of silver coins be in the absence of laws that proclaimed their tax receivability? In sum, Spanish American silver coins and Chinese demand for them animated a global monetary order that hid its functioning from money users, and silver coins were a planetary institution that could appear as a natural arrangement (A. Edwards, Steininger, and Tosato 2018). In everyday life, British settlers rarely encountered silver coins, and complaints about an absence of currency abounded. Almost all colonialera economic pamphlets mention a “want of a medium of exchange,” “want of a sufficient medium of circulating cash,” or “money scarcity.”3 The shortage of silver coins was the effect of imperial policies that encouraged specie flows to Europe but not back to the colonies. The British dependencies were supposed to send silver and gold coins to the metropolis, but authorities prohibited its export. In addition, the Navigation Acts ensured a privileged role for English ships, ports, merchants, and factories. Because colonies incurred debts for finished goods and for services like shipping, the Navigation Acts contributed to specie flows toward Europe, and the colonies had a chronically negative trade balance with England. In this context, they needed to get silver. New England and the middle colonies acquired it through exports to the West Indies and southern Europe, while the Chesapeake region exported staples like tobacco to Britain to

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redress the trade balance (Braudel 1984:410–12; Price 1980; McCusker and Menard 1985). Colonial governments attempted to attract silver coins by overvaluing them, which meant that the same specie coin settled a larger nominal debt within a colony compared to England. For instance, in June 1642, Massachusetts valued Spanish pieces of eight—the most common silver coin—at four shillings eight pence. Less than four months later, it valued them even higher, at five shillings (Shurtleff 1853:20, 29). By weight, a Spanish piece of eight should have been only four shillings six pence in terms of pounds sterling (Chalmers 1893:6).4 While someone could use a piece of eight to discharge a debt of five shillings in the Bay Colony, they could pay off only four shillings six pence in England with the same coin. The Massachusetts government hoped that overvaluation would encourage people to spend silver currency within the colony rather than to use it to settle external debts. Overvaluation meant that settlers practiced a local unit of account, distinct from the imperial British one, decades before they started creating pay tokens that directly corresponded to it.5 Through this shared unit of account, colonists stated prices and quantitatively expressed what they owed each other. Buyers and sellers, debtors and creditors, taxpayers and treasuries related to each other through the unit of account. Today’s units of account (the dollar, the yen) usually coincide with national currencies. But like their contemporaries in Europe, settlers practiced what medieval and early modern writers called “imaginary money.”6 In a context of imaginary money, no means of payment directly corresponded to a unit. Sellers stated prices in the jurisdiction’s unit of account, but many types of pay tokens circulated. For instance, to discharge a debt denominated in Massachusetts pounds with Spanish silver coins, a money user needed to learn the value of these coins in terms of the Massachusetts pound, a mere unit of account. Because imaginary money practices taught money users that societies could connect various pay tokens to the unit of account, and in changing ways, such practices encouraged them to see the monetary system as an open-ended process. But because overvaluation did not procure sufficient currency, settlers resorted to practices far below silver coins in the monetary hierarchy. In

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the process, money users learned about the hierarchy of money.7 Generally, the wider a currency’s reach, and the greater its acceptability within a population, the higher its position in the hierarchy. If a wealthy colonist paid with a promissory note that they pledged to redeem in a different type of money (say, in specie), it circulated within the space defined by the issuer’s reputation. If a municipality or a government promised to accept a class of pay tokens in payment of taxes, these tokens became current at the scale of a town or a country. And if governments with global reach—such as the Chinese in the seventeenth century—promised to accept a money in payment of taxes, it became a planetary currency and was situated at the top of the hierarchy. In the colonial era, oral promises to pay were at the lowest level of the monetary hierarchy. Although they did not involve written documentation, and creditors could not enforce them in court, these pledges connected large groups within families, neighborhoods, and ethnic groups (Bouton 2007:91–92; B. Mann 2002:6–33; McCusker and Menard 1985:334–35). In contrast, courts accepted merchants’ ledgers (book money) as evidence when they were accompanied by an oath. Merchants reported that up to 90 percent of their business took place on a book money basis. Debtors often settled in kind, for instance by delivering cash crops, and courts decided on a case-by-case basis what a creditor had to accept. Legislatures also enacted complex legal tender laws and could compel creditors to accept agricultural staples in payment of a debt. While people denominated debts they incurred in a public unit of account, the means through which they could pay it off it was not fixed (Bouton 2007:17; Holton 1999:65; Kulikoff 2000:218; Baxter 2004:134; Baxter 1965; Priest 2001; Green 1887:121). Book money was burdensome not only because it required constant record keeping. Potential debtors also needed to go to great lengths to protect their reputation, and creditors had to learn about individuals’ creditworthiness. In addition, buyers often paid markups, hidden interest charges that circumvented usury laws (e.g., Holton 1999:63; Schweitzer 1987:123). Book money particularly limited married women’s possibilities: because potential creditors knew that they did not have the option of suing a married woman, she depended on a seller’s willingness to extend credit without the possibility of enforcement if she did not pay (Main 1994:45). In addition, book credit locked farmers into doing business with a single

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storekeeper. If a merchant extended credit to a farmer, then the former could “set prices as he wished” because the latter could no longer sell his produce elsewhere (Bushman 1970:119). Similarly, waged workers received their pay in merchant credit, a practice that made them dependent on a single storekeeper, forced undesired goods onto them, limited geographical mobility, and prevented saving (A. Davis 1910b:53, 57, 66; Newell 1998:119, 169; Dunn 1998:64). Promissory notes were another form of lower-level money, but— distinct from oral promises and book money—they circulated among money users and become a currency of sorts. When a debtor issued a note to a first acceptor as a pledge to pay in higher-level money, the latter used it to pay whoever was willing to accept it. Promissory notes then circulated until someone presented them to the initial debtor for redemption in higher-level money. Typically, people did not accept them at face value but at a discount, depending on the issuer’s reputation. The notes of wealthy individuals circulated close to par. This informal credit rating fluctuated, and with it changed the value of one’s outstanding notes (B. Mann 2002; Nettels 1934:25). Printed promissory notes served as small change: for instance, a ferry operator’s notes said: “I promise to pay the Bearer hereof Fivepence, or the Value thereof, on Demand” (reproduced in Newman 1967:259).8 Even if money users doubted that the business could always redeem outstanding notes in higher-level currency, they might accept them because they knew that they could use them to pay for a widely needed service. A ferry operator or a wealthy individual was a stable enough entity to issue lower-level currency. Between the highest-level silver pay tokens (scarce but accepted on a planetary scale) and lower-level monetary practices such as book credit and promissory notes (ubiquitous but problematic) unfolded the politics of midlevel cash. Settlers designed these currencies to circulate within colonial North America but not beyond.

New England’s First Midlevel Currencies In the early seventeenth century, New England settlers acquired wampum, strings of shell beads, from coastal Natives, which they used to buy furs from inland Native groups. They then sold these furs to European merchants

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at a profit. Settlers were indebted to English merchants and depended on them for equipment and clothing; wampum was a means of acquiring credit with these traders in a context in which colonists had little else to offer. In November 1637, Massachusetts declared that “Wampampeag [wampum] shall pass currant in the payment of Debts, to the payment of forty shillings,” meaning that creditors had to accept this currency up to a limit of forty shillings (Green 1887:154). A few months before officially linking the Native-produced pay tokens to their unit of account, the settlers had declared war on the Pequots, the group that dominated other indigenous wampum producers and that colonists had dubbed “mintmasters” (Ceci 1980). In May 1637, at Mystic, together with Native allies, settlers had killed four hundred Pequots within a half hour. The colonial massacre and wampum’s new legal link with the colonial unit of account coincided for a reason. The archaeologist Lynn Ceci (1993) argues that before the attacks, the Pequots had made wampum scarce and expensive; they had also been competitors in the fur trade. After their defeat, Pequots became wampum producers. Settlers now levied a wampum head tax on each surviving Pequot—man, woman, and child. A nineteenth-century settler historian wrote that this tribute was “a bonus for the protection afforded them and an acknowledgment of their subjection” (Felt 1839:25). These payments increased the settlers’ money supply and allowed them to gain credit with British merchants. Colonists also criminalized practices such as carrying a European weapon and imposed fines, payable in wampum, for infractions. This pattern of violence, dispossession, and money creation shaped the lives of Native survivors and helped stabilize settlers’ economic situation. Tribute and fines ensured a flow of wampum—and, indirectly, furs and European credit—to colonizers. Between 1634 and 1664, £5,000 worth of beads entered colonial coffers (Ceci 1993:61). Colonizing wampum was a core element of settlers’ effort to colonize Natives’ lives. Native chiefs now oversaw the labor-intensive process of producing wampum for the settlers. At first temporary wartime leaders, they had become permanent intermediaries between the settlers who supported them and the people they claimed to represent. The English took control of the coastal lands on which Natives lived; they assigned small

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and unproductive plots to wampum producers and controlled their everyday movements. This process created new patterns of dependence on settlers for necessities including food, for which Natives incurred further debts they were forced to discharge in wampum. They also accrued debt to buy metal drills—the means of wampum production—from colonists. Disabling Native ways of sustaining life and imposing debts meant incorporating indigenous groups into the settler economy and monetary system even as Natives produced tokens that settler authorities had assigned legal tender status (Ceci 1980, 1990, 1993; Cronin 1983:96–97). Similar processes occurred in other spaces Europeans colonized. On a global scale, Europe was becoming a “monetary monster,” ready to “devour the world” (Braudel 1981:457). Wampum was the New England settlers’ first publicly organized legal tender currency, and their governments made wampum do the work of a generally accepted pay token within their borders: they excluded private parties from the wampum trade, regulated its quality, and established the link with the unit of account. Because of its limited legal tender status, wampum was situated below specie coins in money’s hierarchy. But it was above book money, promissory notes, or agricultural staples to which the legislature had assigned a monetary value (Felt 1839:54). Wampum also enabled towns to make and receive payments: inhabitants paid local taxes  in wampum, and towns discharged debts to schoolmasters in it (Ceci 1990). In sum, between imperial center and Native lives, settlers tried to stabilize their economic situation through wampum extraction. Wampum was a means of routinized dispossession through debt that animated the transatlantic monetary hierarchy, with Britain at the top, attempting to control high-level currency (specie), and colonists extracting midlevel pay tokens (wampum) to obtain furs to service debts payable in high-level money, and for use as domestic pay tokens. Furs were a high-value commodity, comparable to tobacco, that the colonists could sell to the metropolis. Had the wampum/fur mode of colonization succeeded, New England might have turned into another commodity-extracting Virginia or Barbados (Peterson 2019). But as pelts became scarcer because of overhunting, wampum’s value relative to fur sank. In this context, the English revoked its legal

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tender status, disconnecting wampum from the Massachusetts pound, their unit of account. As a result, its position in the monetary hierarchy declined. The English also dumped large amounts of low-quality wampum on their Dutch rivals, who suffered inflationary effects (Ceci 1980). At the same time, Boston merchants began trading in the West Indies, and specie—a confusing mix of counterfeit and clipped coins—flowed into Massachusetts. Adding to the uncertainty, corruption at the Potosí mint caused a scandal about the silver content of the Spanish piece of eight. In response, in 1652 Massachusetts established a mint that produced coins overvalued in terms of specie content, and the legislature declared them legal tender (Peterson 2019). Private creditors within the colony and the treasury had to accept them at face value. By weight, these coins were the equivalent of three-quarters of a pound sterling and were therefore worth more domestically than abroad, a design feature calculated to limit their outflow. The colonial mint was an attempt to turn the planetary currency’s raw material into a midlevel currency that did not have the reach of Spanish silver coins but traveled easily within the colony. In addition, the law restricted the export of Massachusetts coins (no one could carry more than twenty shillings when leaving Massachusetts), an act of monetary selfdefense that mirrored imperial capital controls at a smaller scale. So far, their attempts to attract and establish currencies had taught money users two lessons. First, they learned that their legislature could proclaim their own unit of account and change its definition. Second, they knew that lawmakers could connect new classes of pay tokens to the unit of account: wampum (1637) and Massachusetts coins (1652). These midlevel currencies depended on processes over which settler governments had limited control, but soon colonists developed a type of currency that did not depend on fur trade or silver influx and that further deepened their understanding of monetary practices.

Midlevel Paper Currency and European Medieval Monetary Knowledge When soldiers returned to Massachusetts from a failed incursion to Quebec in 1690, they did not imagine that their defeat would lead to the colony’s

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first paper money. Colonial leaders had hoped that booty would pay for warfare, but defeat caused fiscal crisis, and the threat of mutiny was in the air (Goldberg 2009). To pay the soldiers, the Boston treasury issued paper tokens. These new notes stated they were “due from the Massachusetts colony to the Possessor” and “shall be accordingly accepted by the Treasurer .  .  . in all Publick payments.”9 When the government promised to accept them in payment of taxes, it created a link with the unit of account, as it had done with wampum and Massachusetts coins. But money users at first refused to accept the bills at close to their face value: the pay tokens passed at a large discount, causing losses to the soldiers. Military failure and fiscal crisis coincided with imperial tensions. The Crown had revoked the Massachusetts charter because the colonists had become too independent, among other things by running their own mint. Much was at stake, including the degree of political autonomy and the colonists’ individual real estate ownership, as the Crown threatened to repossess land settlers claimed as theirs. In this context, declaring bills of credit legal tender for private debts would have further upset imperial officials (Goldberg 2009). Caught between military defeat and fiscal and imperial crisis, members of the colonial elite emphasized their commitment to the new currency. Governor William Phips publicly exchanged specie for bills (Newell 1998:130). In addition, two members of the governing class published a volume “to be sold at the London coffee-house” (Blackwell [1691] 1910:205), an upper-class café in Boston.10 Its patrons could encourage at-par acceptance among the population at large: if these well-off Bostonians promised to accept bills at their face value, their debtors would follow their lead, as would debtors’ debtors, creating a ripple effect. Cotton Mather, who authored the volume’s first text, was a member of the family of prominent clerics and leaders. An apologist for his father Increase, Cotton was used to addressing the reading public. The second author, John Blackwell, was a financial adviser to the Boston government. As Cromwell’s treasurer, he had paid soldiers in public faith bonds similar to the bills of credit. He was a former landowner in Ireland, so this was his second settler undertaking.11 Mather’s and Cromwell’s volume is an entry point into the settler elite’s monetary knowledge because the authors

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were part of the governing class, and promoting the new currency required the writers to build on upper-class Bostonians’ understanding of cash and credit, allowing inferences about upper-class monetary knowledge. To win over wealthy Bostonians to the cause of the new currency, Mather argued that accepting this money at par was an act of class selfpreservation. In England, he wrote, speculators had bought up a similar currency from soldiers, at a fraction of its face value, and used it to buy public lands at face value. But eventually, they paid a high price as “a great unexpected Revolution made them lose both their lands and money” (Mather [1691] 1910:194). Accepting the means of war finance at par ensured that recently demobilized soldiers would not turn into revolutionaries, and paying “just wages” with paper currency would stabilize the social order.12 The authors also argued that the monetary relation between government and inhabitants was a pillar of society, stable even if imperial authorities decided to reshape the Massachusetts government and even if current magistrates lost their positions. “Whatever change of government shall come” (Mather [1691] 1910:190), there would be public authorities that levied taxes and accepted the previous government’s promises. Governance structures might change, but there would be no Hobbesian state of nature, a “foolish conceit” (192). Upper-class Bostonians ought to accept the new currency because it promised to link an unruly present to a stable future. Bills of credit would stabilize the internal social order but also allow the colony to maintain its place relative to external rivals: only bills of credit enabled rapid war mobilization (Blackwell [1691] 1910:201–4; Mather [1691] 1910:194). The authors reminded their well-off readers that other means of mobilizing collective resources were onerous. The government could demand payment in silver coins, but this would mean that settlers would have to sell products abroad too cheaply to get it; in-kind taxation, meanwhile, was wasteful because of storage and transport costs (Mather [1691] 1910:192). If all else failed, Blackwell pointed out, heavy taxes payable in bills of credit would teach inhabitants the lessons of tax-driven money the hard way (Blackwell [1691] 1910:205). But these bills were more than an expedience to fend off social upheaval, organize warfare, and enact continuity in crisis: this midlevel currency could ensure long-term settler prosperity. The developmental potential of

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bills of credit was greater than that of wampum or a local mint because this form of cash did not depend on Natives’ fur hunting or on specie inflows. Bills of credit were even superior to silver coins: unlike specie, they were useful only within the colony, the only place where the treasury accepted them. Lack of overseas demand for paper currency was a feature, not a bug. Lawmakers did not need to enact capital controls, and the “Growths of the Country” would be promoted (Mather [1691] 1910:193).13 A midlevel currency the colonial government could control, bills of credit would enable prosperity. Emphasizing continuity and stability, Mather and Blackwell sought to convince wealthy Boston money users that bills of credit were not a radical departure from previous practices. They compared the currency to private money—a practice familiar to the readers because at least some of them issued widely accepted promissory notes, turning their credit into currency. These individual pledges to pay became a currency because people accepted the debt of someone they might not have met (Blackwell [1691] 1910:201; Mather [1691] 1910:191). Why should treasury bills not pass in a similar way? Since value rested on reputation, public authorities should have at least as much credit with their population as wealthy inhabitants. And since the government was the settlers’ agent, collective wealth backed its credit—what, Mather asked, “Is the Security of your Paper-mony less than the Credit of the whole Country?” (Mather [1691] 1910:190). Refusing to accept bills of credit at par amounted to doubting the value of what settlers claimed as theirs, a disproportionate share of which upper-class Bostonians owned. Because the public pay-office accepted them, bills of credit were higher-level money than promissory notes. The authors offer an institutional account of public currency that highlights the relation of credit and debt between colonists and government: “Are not Taxes paid and received by mutual Credit between the Government and the People, The Government requiring the Country to give them Credit where-with to pay the Countries Debts, and then again receive the same Credit of the Country . . . ?” (Mather [1691] 1910:191, italics in the original). While its origin was in the relation between governments and money users, money also served in exchanges between private buyers and sellers, and as a means of discharging private debts: “’Tis strange that in

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the meanwhile between the Governments paying the People, and the Peoples paying the Government: . . . Bills should not pass between Man and Man” (Mather [1691] 1910:191; italics in the original). At its core a mechanism to mobilize resources for a collective endeavor, currency enabled people to make payments and discharge debts until it returned to the treasury when someone used it to pay taxes. What more could one ask of a currency, a mere “Counter or Measure” and an “Instituted mean of permutation” (Mather [1691] 1910:190; italics in the original)? It is tempting to see the first North American paper currency as an intrusion of modernity into age-old coinage practices. In one respect, it is: like the Bank of England’s notes, the supply of Massachusetts bills of credit expanded more easily than medieval coins. At the same time, Mather’s and Blackwell’s arguments derive from a medieval understanding of currency. Medieval English jurists did not define money as an unchanging metal standard but as that which becomes money by sovereign fiat, and the Crown claimed the right to determine the specie content of coins and decide what it accepted in payment of taxes (Desan 2014). Mather and Blackwell did not invent a new monetary theory but built on medieval English knowledge about currency as a relation between governance institutions and a population.14 Emphasizing the novelty of paper currency in the colonial context means focusing on the currency’s material support rather than on the logic people used to understand and legitimize it and its legal underpinnings. In addition to the promotional efforts of the governing class, the bills of credit gained currency because of a 5 percent rebate for those who paid taxes using bills (Newell 1998:128–29). For the remainder of the decade, they circulated at par with sterling—that is, they suffered no devaluation (Newell 1998:128–29). They soon became a routine part of public finance and private exchanges and formed the bulk of the money supply. The legislature enacted taxes to redeem them. At first, it mandated levies for the years immediately following the emission of a currency, but it lengthened terms until, in 1722, the assembly scheduled withdrawal a full thirteen years after the initial issue (A. Davis 1910b:31–32). In 1712 bills became legal tender for private debts, and in 1720 the legislature removed the tax discount (Newell 1998:133).

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If Mather and Blackwell saw currency as a link between a government and a population—a means of coordinating people’s activities—rural money users’ practices suggest a similar understanding of money.

The Monetary Coordination of Rural Settler Communities Decisions about household contributions to the local community were central to New England town governance. Enfranchised settlers—propertied men, yeomen and gentry—met to decide about contributions for road maintenance, schoolhouses, and ministers’ and teachers’ salaries. The scale of the tasks they coordinated was smaller than the colonial government’s, but rural practices mirrored the relation between taxpayers and the Boston treasury. Settlers created a bookkeeping system that mediated between households and the collectivity and made different tokens, goods, and activities count. Rural town meetings allow a glimpse into how they coordinated household contributions to public endeavors. What a town accepted in payment of dues changed quickly. For instance, in the records of Braintree—a community southwest of Boston—bills of credit first appear in 1706, when the meeting voted to accept them. In 1703 and 1704, inhabitants had paid up to a quarter of their dues in country pay (i.e., in kind), at a rate the meeting proclaimed when it defined the quantity of an agricultural staple that corresponded to the monetary unit. One year before, in 1702, freeholders had settled half of their taxes in kind (Bates 1886:52–57). Within four years, the townspeople went from paying half of their tax debts in produce to discharging all of it in bills of credit. After 1706, the Braintree records no longer specify a means of payment, indicating that tax acceptance of bills of credit no longer required mention and that country pay was no longer in use because they did not record a rating. But country pay and bills of credit were only one way of coordinating local tasks, and colonists discharged some of their debts to the community by working them off. For instance, town meetings denominated debts related to road maintenance in days, but colonists who did not do their share had to discharge their debt through a payment in currency. The records frame this sometimes as a choice, sometimes as a fine (compare,

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for instance, Dudley Town Records 1893–94:38, 63; Green 1880:28; Dow 1917:198, 200; Hill and Slafter 1886; Lynn Historical Society 1949; Bates 1886). Declining a public office if one was elected also carried a price tag. Conversely, if a freeholder served as treasurer or surveyor of highways, he received compensation once his tenure was over and the town had voted to pay him (Dow 1917; Hill and Slafter 1886; Lynn Historical Society 1949; Bates 1886; Green 1880). Highway debts and office credits offset each other: Topsfield selectmen received “credit on their highway taxes for three days each” (Dow 1917:272). Here the town credited officials in days, not cash, to avoid paying out scarce currency, although money users could pay road dues in currency. Hence, communities practiced the relation between collectivity and household as a series of credits and debts to be discharged in currency, in agricultural products rated in the unit of account, or in labor power measured in time but also rated in the unit of account. The bookkeeping relation between town and individual household resonates with Mather’s and Blackwell’s claim that governing bodies can mobilize a population’s resources through monetary practices. Rural settlers’ answer to Mather’s rhetorical question ([1691] 1910:190) “Is not Discount in Accounts current good pay?” would have been a resounding “yes.” And they might have added, echoing Blackwell, that “these Bills enable people to Discount with the Treasurer at last” (Blackwell [1691] 1910:202). In the Boston pamphlets as well as in rural settlers’ public ledgers, money was a means of coordinating collective life. When they coordinated household contributions, rural colonists “plugged in” bills of credit into their accounting system years before these became legal tender for private debts (in 1712) and paralleled the Boston treasury’s pledge to receive the bills, further bolstering their acceptability. Settlers also mirrored the practice of accepting different means of paying local taxes at the scale of the province. Already in the seventeenth century, rural colonists had petitioned the Boston legislature for permission to pay taxes in kind (Newell 1998:118), and lawmakers would allow them to do so in the next century. After bills of credit had entered circulation, taxpayers attempted to use in-kind tax payment to maintain as much currency as possible in circulation: for instance, in the same legislative project

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in which they demanded additional bills of credit, representatives also asked to discharge taxes in kind (Massachusetts House of Representatives 1718–20:254; see also Nettels 1934:8; C. Gould 1915:28; Rabushka 2008; Felt 1839; Newell 1998:118). Since the seventeenth century, New England townspeople could also pay a part of their tax bill by killing wolves (Green 1887:159, 325)—they received a tax credit for a public service that protected livestock. Because they paid off dues to the colonial treasury in a range of ways, colonists were used to the idea that legislatures and courts could connect different means of payment to the unit of account. In sum, for settlers, money was a system of credits and debts whose centerpiece was the unit of account; governing bodies at the provincial and the municipal level connected different means of payment to this unit. Towns were in charge of local and provincial taxation (Brooke 1989:20), and since colonists deployed similar mechanisms at both levels, and town representatives took part in the Boston assembly’s decision-making processes, voters came to understand midlevel money as a transitory governmental arrangement grounded in taxation. From a money user’s perspective, it was easier than today to understand a pay token’s life span, from the legislation that mandated its existence to its distribution in town meetings, its withdrawal through taxation, and its eventual burning.

The Public Life of Pay Tokens from Legislature to Town Meeting In the first decades of the eighteenth century, bills of credit animated controversies during the yearly budgeting process in the General Court. After the lower chamber—the House of Representatives—had approved the creation of a certain amount of currency, it sent the bill to the upper chamber—the Council—and the governor. The Council then returned it, demanding that representatives propose a smaller amount. Because of his veto power, the governor had the last word, but he needed the House’s assent in matters of public spending and taxation. In addition, the assembly paid his salary although he was a Crown appointee. Lawmakers refused

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to grant a permanent salary because they thought that the chief executive would lose interest in the colony’s welfare if they did (E. Greene 1966:171– 72; Brooke 1989). These debates were simultaneously about currency creation and public spending. Because a single institution, the legislature, was in charge of both, it was difficult to argue that the budget must be “balanced.” Since the amount of colonial currency was the sum of the public debt, a balanced budget would have deprived the colony of pay tokens. It would have also deprived the colony of a functioning government: even when the Crown curbed legislative money creation in 1730, it still allowed a yearly emission of £30,000 for government expenses. The creation of some provincial currency for public spending was an undisputed necessity. The Upper House could argue that too much of it would cause depreciation, but not that the budget needed to be balanced or that the whims of the bond market constrained public spending. The institutional unity of currency creation and public spending defied today’s separation of “fiscal” and “monetary” policy. Negotiations between the governor and the Lower House were tense because of imperial concerns and also because some upper-class merchants opposed paper currency (see chapter 2). In March 1720, for instance, the Lower House several times proposed to emit £100,000; in response, the Upper House requested a “reasonable and sufficient” amount. When the Council (the Upper House) returned the proposed legislation after several days, the elected representatives sent the legislation “up” twice on a single day, only to be rebuffed with the “reasonable and sufficient” formula. Eventually, the popular chamber reduced the amount to £50,000 and received consent (Massachusetts House of Representatives 1718–120:362–85). After the two chambers had reached a compromise, the Lower House appointed a committee to commission a printer. Once the latter had produced the pay tokens, the committee delivered them to the treasury for a receipt. The legislation prescribed that “the bills shall pass out of the Treasury, at the Value therein expressed . . . and shall be so taken and accepted in all Publick Payments” (Massachusetts House of Representatives 1718–20:191). The treasury then handed the money to county commissioners, who disbursed it to towns; they were also in charge of collecting it when it fell due. It is significant that representatives did not delegate the

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material production of currency to the treasurer. Together with recurring tensions between the Lower and the Upper House, such an involvement in the material process of money creation enabled even low-profile rural representatives to grasp the creation of pay tokens, and they could share their knowledge with their rural constituents who would receive the money.

Boston Pay Tokens in Rural Massachusetts When rural freeholders learned that they were entitled to a share of the General Court’s money, they convened a meeting. In Braintree, enfranchised men chose Edmund Quincy—the town’s longtime representative to the Lower House—as a moderator for the day. He then asked if the town would accept “their Part of Fifty thousand Pounds in Bills of credit now Lodged in ye hands of ye Province Treasurer” (Bates 1886:105), which was voted in the affirmative. Next, townsmen elected trustees to receive the money and advanced the money to borrowers against land. The meeting at first voted to lend the money to individuals, with a minimum and a maximum amount to ensure settler inclusiveness. But then, an unnamed freeholder asked if the town would advance the entire sum to three individuals who would provide an immediate down payment of £100. The townspeople voted in the affirmative and the town’s share of the 1720 bills went to three individuals, two of whom, like the moderator, were Quincys (Bates 1886:105–6). Since one of the three beneficiaries was the town’s representative, he likely supported bills of credit in the Boston legislature in the following years. But eight years later—when Braintree was entitled to its next advance— townspeople challenged the Quincys’ monopolization of colonial currency. At first, everything went according to the Quincy script: the meeting elected John—one of the three borrowers of 1720—as moderator. He asked if the town would agree to a similar mechanism, a request the assembly denied (Bates 1886:125). Perhaps at the moderator’s initiative, they took a second vote. This is significant because the clerk rarely recorded disagreements, and a second vote was uncommon. In this context, the repeated vote indicates a struggle between the Quincys and a majority of enfranchised money users who wanted to broaden access to pay tokens:

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instead of accepting the £100 offer, Braintreeans voted to take the same sum from the bills that the town had received from Boston. Town officers had immediate access to currency for municipal spending and passed the balance on to a larger number of residents. This incident, and similar ones in other towns, illustrates that the public creation of money and its private use were no longer separate.15 Townsmen related to public currency both as administrators and as individual money users. Towns developed a range of ways of distributing money to households. Instead of advancing the money to individuals, some local assemblies voted to use it for public improvements, retire the sum through taxation, and then pay it back to Boston. Other towns decided to advance it to individuals at interest and use interest payments to meet expenses. Because the public character of currency was visible, money users understood interest on advances as a tax on the use of public money (Dunn 1998:57; Newell 1998). Public spending, money creation, taxation, and credit for private actors were a single, if multifaceted, area of public practice. Town clerks knew that this money was the General Court’s because they would have to pay it back to this institution. To identify the money, clerks typically referred to bills as part of a specific advance at the level of the province: for example, Braintree’s “part of the Fifty Thousand Pounds Loan” (Bates 1886:116). The Topsfield clerk recorded that “the Town allowed to the Trustees . . . all the Towns Part of the Last fift part of ye 60 000 Loan” (Dow 1917:4). The recurring reference to the original amount indicates that freeholders were aware that the advance to the town was part of a larger sum issued by the General Court, a body to which they yearly elected a representative whom they paid with local taxes and instructed on how to vote (Zuckerman 1970). Hence, when voters decided about the local use of public currency, they understood it as part of a larger process. The withdrawal and burning of the bills mirrored their printing and distribution. Once the trustees had collected principal and interest, they returned the currency to the treasurer. Then, the legislature appointed a committee to receive them from the officer, give him “receipt for them, and burn the said Bills to Ashes” (Massachusetts House of Representatives 1718–20:7, 59, 106). Similar committees also destroyed counterfeit and worn-out bills, and pamphleteers mentioned the burning of currency (e.g.,

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“Letter, From One in Boston” [1714] 1910:279; Wise [1721] 1911:200). Hence, the “political” aspects of currency (how much to create, how to spend it, and how much to tax) were within the purview of the popular assembly, but so was its production and destruction, reminding representatives that public money was an everyday process. What today’s economists call “monetary contraction,” colonists understood as a material act of currency destruction. What the government spent was the currency settlers had, and what the government had printed, it could destroy. If the government burnt cash, colonists would be stuck with book credit, country pay, promissory notes, the few circulating silver coins, and high interest rates. It meant a return to an accounting system without an adequate amount of generally accepted pay tokens. The circuit of currency creation and redemption—which included the General Court, the governor, the printer, the treasury, and town meetings—was part of electoral politics and was administered by annually elected officials at the level of the town and the province. “Money” was a public process embodied in paper instruments, an intelligible relation between a money issuer and money users. It was a governance practice, not a quantity of objects perceived as neutral.

Paper Currency Governance across British Colonial North America Each colony had its unit of account to keep track of debts and credits between individuals, towns, colonial treasury, and taxpayers, and all colonial governments connected changing means of payment to the unit of account.16 The Massachusetts precedent inspired colonists elsewhere. In Pennsylvania, electoral pressure in favor of paper money mounted after the credit crunch following the South Sea Bubble limited advances to the colonies and exacerbated money scarcity, causing depression, stagnant trade, and a declining price level (Schweitzer 1987:115; Lester 1938). The antiproprietary party, which appealed to rural populations, made gains in the elections to the General Assembly, and the legislature was “deluged” with petitions to issue bills of credit (Schweitzer 1987:125; Lester 1970:4, 33).

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Unlike in Massachusetts, where the Crown appointed the governor, in Pennsylvania proprietors selected the chief executive.17 As in Massachusetts, the governor was subject to pressure from the legislature that allocated his salary. When the proprietors—the Penns—faced the possibility of colonial currency, they worried that the quitrents owed them would become payable in this new money, of little use in London, rather than specie.18 The Board of Trade also opposed bills of credit, and the Penns risked losing the proprietorship if they displeased this body (Schweitzer 1987:125). After a series of conflicts between the Penns, the governor, and the legislature, the province established a system of land banks (Schweitzer 1987:9–10, 128; Brock 1975:356–67; Moore 2016). Pennsylvania land banks’ loan offices distributed currency against real property. Farmers and artisans took out notes up to half the value of their land, or one-third the value of their house. Annual interest rates (5 percent simple, not compound) were better than the going market rate, and the loans were available for longer terms than from private creditors (Schweitzer 1987:129, 147). Once spent by the original debtor, land bank notes circulated until retired in payment of debt or taxes. The loans fell due at the same time for all notes issued under the same law. For instance, if a “bank” would have to be redeemed in 1728, and farmers took out credit in 1720, they would have to repay one-eighth of the principal each year. Four years later, it would be one-fourth per year. As a result, pressure in favor of reissue swelled every time a due date approached because loans became more short term and the threat of money scarcity reemerged (Schweitzer 1987:129). As in Massachusetts, Pennsylvania currency stabilized propertied male settlers’ “independence.” In Pennsylvania, characterized by a relatively egalitarian distribution of landed property among male settlers, the law required land banks to accept as a debtor anyone who owned land (Schweitzer 1987:147, 165), embodying smallholders’ right to access affordable and generally accepted pay tokens and stabilizing small landownership. Loan offices provided a relatively moderate amount of currency to individuals: no one could borrow enough to dominate an entire sector (Bouton 2007:40; Schweitzer 1987:154). Prospective debtors no longer needed to

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find an individual who accepted one’s note, or a storekeeper who accepted one’s promise to repay. Land banks thus shifted the burden of credibility from individual debtors to public authorities whose trustworthiness was based on their power to tax or foreclose. As land bank currency, smallholders’ debt circulated easily, a privilege previously reserved to the promissory notes of the wealthy. But wealthy colonists and British creditors were suspicious of the currency’s inflationary potential—they argued that it could violate creditors’ rights (Lester 1938:33–34; Bouton 2007:36–41). And wealthy Pennsylvanians with access to Philadelphia credit markets did not need the loan office (Schweitzer 1987:160, 165). If money politics in the middle colony of Pennsylvania were similar to those in Massachusetts, they were distinct in the Chesapeake. Here colonists used cash crops such as tobacco, produced by enslaved persons, as a basis for a monetary system. The Maryland assembly, for instance, rated tobacco in pounds, making it receivable for “taxes, fees, quit-rents, tavern rates, and ferry charges” (L. Gray 1928:10). Although it lacked legal tender status for private debts, rating and tax receivability turned the cash crop into a currency used in private exchanges. Because tobacco was too fragile and cumbersome to circulate, it was used to back book credits. First, small planters sold claims on future tobacco harvests to shopkeepers. Second, larger planters exported to Britain and accrued book credit there. Because of the prohibition of specie export, they did not receive coins but drew bills of exchange on their London and Glasgow accounts. These bills circulated within the colonies until remitted to Britain to pay for imports (Grubb 2008). Provinces like Maryland also had a system of tobacco warehouses whose receipts circulated as money. Accepting tobacco by weight with no distinction of quality, the law overvalued low-grade tobacco, and planters attempted to pay taxes in the lowest-quality tobacco while selling the highergrade produce. To counteract payment in “trash,” the Virginia government established public warehouses that issued tobacco certificates differentiating between grades of tobacco (1717). This policy provoked popular anger, and the legislation failed in the face of protests, refusals to pay taxes, and a burning warehouse (Brock 1975:11). It was a struggle about what would

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count as legal tender for public debts. A similar measure in 1730 succeeded, and the new warehouse notes became generally accepted currency. Maryland and North Carolina later adopted this method as well. Tobacco money was problematic for several reasons. The Maryland Gazette, a periodical founded to stimulate monetary debate, published Ebenezer Cook’s monetary poem Sotweed Redivivus ([1730] 1900). Cook argued that the monetary status of tobacco locked the province into underdevelopment and dependence on transatlantic trade. Because growing tobacco meant growing currency, its monetary status encouraged monoculture, which reproduced dependence on foreign trade for finished goods. Conversely, import dependence created pressure to accrue overseas sterling credits through tobacco export to pay for imported finished goods. Tobacco-based monetary design and the lack of diversification were part of a vicious circle.19 But as in Pennsylvania, in Maryland public finance was connected to key actors’ interests, and opposition to paper money originated from a group that rejected provincial currency. Government officials and ministers— represented in the Upper House—refused to accept it in payment of their salaries and stalled legislation for years, in part because they knew that they could not use colonial currency in England. When it finally passed the Upper House, complex legal tender provisions accompanied the new currency. Ministers and officials continued to be paid in tobacco. Taxpayers could pay their dues in the new money, but only until a certain date, after which the government enforced tobacco or specie payment (Behrens 1923:12–18; Grubb 2008:30–31; Rabushka 2008:525–26). As in the other colonies, tax receivability was fluid (Becker 1980:7). In Maryland, the government distributed the new currency to each head of household for free, a onetime disbursement in proportion to the number of household members over fifteen years of age. In a context of acute money shortage, other mechanisms seemed too complicated to implement (Lester 1970:142–51). The money was redeemed by levying taxes on tobacco export, the proceeds of which were invested in England (Lester 1970:147). When the notes became due, the bearers were paid in specie with proceeds from this sinking fund. While means of production secured Pennsylvania land banks, a commodity secured tobacco notes. But both monetary arrangements

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empowered smallholders, a large portion of the electorate, to issue circulating debt secured against what they claimed to own or produce, and the government ensured the circulation of this money through tax or legal tender legislation that created demand for it. Colonial governments visibly connected money issue to production, joining the electoral process with the process of social ordering via the circulating medium. Across the colonies, assemblies claimed the right to manage money’s public life: they authorized its emission, decided about its legal tender status and tax receivability, chose a printer, enacted taxes for withdrawal, made provisions for its destruction, and recorded the currency created and destroyed (Dinkin 1977; J. Greene 1963; Newman 1967). Under one roof, lawmakers performed the functions of today’s central bank, the Treasury, fiscal policy makers, and the Bureau of Engraving and Printing—an institutional nondifferentiation that made the functioning of paper money visible to those involved in legislative work and the material process of creating currency, to those who had access to pamphlets and the assemblies’ publications, and to voters who elected and instructed representatives.

The Pedagogy of Bills of Credit British colonial North America offers a window into a process of monetary knowledge formation that occurred when electoral practices expanded to include money creation. From the perspective of settler money users, conditions of knowledge were similar across the colonies. First, they learned that currency was the always-political process of linking the public unit of account to pay tokens, of joining the publicly sanctioned way of stating prices to circulating money-things. Second, they learned about the central locus of monetary decision-making when their assemblies managed money’s public life, from its printing to its burning. Third, they began to understand that, as voters, they could shape monetary design and policy according to their needs. Their monetary knowledge enabled settlers to take part in moral economies of money.

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C HAPTE R 2

Moral Economies of Money

IN T HI S C H A P T E R , I D I S C U S S T HE MO R A L economies of money that flourished

in British colonial North America. When settlers took part in these moral economies, they attempted to realize a social order they considered just. Enfranchised smallholders and those who aspired to this status were at the core of moral economies because currency shortages caused forms of inequality they opposed. Money scarcity increased interest rates and created dependence on private creditors who could dominate an entire region. If a freeholder had a dispute with a creditor, it could become difficult to get advances, and the household would have to move elsewhere (Kulikoff 2000:217). Money shortage, settlers claimed, also enabled usury and redistribution from bottom to top: “By extortion and oppression,” one Massachusetts commentator noted, wealthy colonists could “make a Prey of the Necessitous” (Blackwell [1687] 1910:144). And dear money, another one added, made it difficult for “young beginners” to establish themselves as smallholders or artisans (Woodbridge [1681] 1910:113). Money scarcity threatened the forms of social order and mobility many settlers considered just. Imperial officials distrusted electoral involvement in money creation. Soon after lawmakers had first issued paper currency, Massachusetts officials worried that monetary settler democracy would become unmanageable. 38

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When a group of merchants wanted to get a bank charter from the assembly, Attorney General Dudley ([1714] 1910:253) voiced concerns in a letter to lawmakers: he accused the merchants of usurping the royal prerogative and “set[ting] up an absolute Independent Government, which like a Fire in the Bowels, will Burn up and Consume the whole Body.” If lawmakers allowed this Boston bank, they would set a precedent for settlers “in the several parts of the Province”—he feared rural communities might establish banks that created and accepted currencies, and town meetings might also accept these currencies in payment of taxes. As a result, money would become “vile and contemptible” (253), and a monetary state of nature would ensue. Outof-control money creation could also lead to a jubilee, the biblical practice of debt forgiveness (251–52).1 While smallholders worried about currency shortage, imperial officials feared the effects of settler democracy. A third group, the Boston business classes, was divided. From the perspective of established merchants who prioritized transatlantic trade, colonial currency was problematic because trading partners abroad rejected it. They were also skeptical because it undermined their position of power relative to those farmers and shopkeepers who depended on them for credit. Transatlantic merchants became the empire’s ally in monetary controversies. But a second group of merchants and entrepreneurs relied more on internal production and consumption. They argued that bills of credit enabled a thriving internal market and a more diversified productive system that would reduce the colony’s reliance on importing finished goods. New productive capacities would lessen the pressure to export to gain specie or British credit. Because this group favored provincial money as a remedy for money scarcity, it became freeholders’ ally (Newell 1998:145, 150; Riesman 1983:142–43, 153).

Business Strategies and Official Fears Boston merchants who wanted to stimulate local economic development made the first step toward monetary controversy. Because taxes were scheduled to remove currency from circulation in 1714–15, they wanted to establish a bank of issue that would advance currency against real estate at 5 percent interest. Mirroring the inscription on public bills of credit, the

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planned monetary instruments would proclaim that “this Indented Bill of Twenty Shillings, Obliges us . . . and all and every of our Partners of the Bank of Credit . . ., to Accept the same in all Payments. . . . It shall be accordingly received by the Treasurer for the Redemption of any Pawn or Mortgage in the said Bank” (quoted in Dudley [1714] 1910:243). These pay tokens described the arrangements that encouraged their acceptance: the bank received them in payment of debts to it, but participating merchants also accepted them as individuals. This was a circuit of currency issue and redemption that could function parallel to the official currency if the number of debtors and acceptors multiplied. But because the government pay-office did not promise to accept it, and because it was not legal tender for private debt, this was lower-level currency than bills of credit. The Upper House rejected the request for a charter and prohibited note issue until the Lower House had considered the matter (Newell 1998:136– 37). In this context, Attorney General Dudley published the above-quoted letter in which he urged the Lower House to stop the bankers. From the imperial magistrate’s perspective, they were a threat. Bills of credit had already increased the province’s scope of action vis-à-vis London. Bank notes, which bypassed even the provincial government, would further undermine established monetary authority and broaden monetary agency. Since the bankers did not promise to convert their notes into higher-level money such as provincial bills of credit or specie, they could issue as many as they wanted (Dudley [1714] 1910:248; see also 244). Despite his reservations regarding anything but currency convertible into specie, Dudley agreed that a temporary remedy for money scarcity was necessary. For him, public paper currency was preferable to a private bank’s currency because it was part of an orderly political process, and as long as the legislature was in charge, the governor’s veto remained a bulwark against settler democracy. Dudley knew he could count on the Lower House’s support of additional public currency (Dudley [1714] 1910:256). And as he had expected, the £50,000 in bills of credit that the legislature authorized in 1714/15 undermined support for the private bank, and controversies calmed down. But in 1720, when complaints about money scarcity reemerged, John Colman—a merchant who had developed the 1714 bank

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project—published a pamphlet addressed “to his Friend in the Countrey” (Colman [1720] 1910). The pamphlet hit a raw nerve in the circles around the governor, and the Upper House ordered his arrest, accusing Colman of disturbing the peace (A. Davis 1901:94; Billias 1959:5–6). In it, Colman described monetary institutions as a changeable power structure and proposed an alliance between domestically oriented merchants and freeholders. This pamphlet was part of a broader pedagogical effort: in a context in which both electoral involvement and class inequalities were deepening (A. Olson 1992; Nobles 2006), lecturers informed town meetings about the need for monetary expansion, urging settlers to use their right to instruct their representatives on how to vote in the colonial legislature (Newell 1998:140–41). Colman’s pamphlet allows a glimpse into what such a speaker might have told a town meeting.

Monetary Oppression and the Promise of “Independence” The urban merchant Colman began his letter by connecting urban difficulties to rural ones. In Boston, he argued, money had become indispensable— it was “the only thing which gives life to Business, Employs the Poor, Feeds the Hungry, and Cloaths the Naked,” whereas “you in the Countrey . . . have your Milk and Honey of your own” (Colman [1720] 1910:398). The contrast with the “happy” countryside drove home the idea that in an urban setting, money was a necessity; Colman also came close to arguing that access to money was a right in such a context. But if impoverished Bostonians were hard pressed, rural property owners were in difficulties too: Since there was so much demand for scarce pay tokens, the value of real estate and produce, measured in monetary units, declined. The proceeds of foreclosure auctions were low because few had currency to place bids, and an owner could lose everything for a small debt (399). Foreclosure meant more than the loss of a roof over one’s head. For male settler heads of household—“substantial House-keepers, who have good real Estates  .  .  . the middling sort” (Colman [1720] 1910:398)—it meant losing their “independent” status. “Independent” men lived in their own household and did not work for wages or rent land (Brooke 1989:42– 45). A colonist could marry only once he had attained this status, which was

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easier to do than in Britain. In Massachusetts, significant numbers of European men were part of this group and had a measure of control over their conditions of life (Kulikoff 2000:227–28). They imagined and practiced “independence” in relation to those who did work they considered degrading: settler women and servants, and the African but also Native (Newell 2015) people they enslaved. “Independence” existed “in counterpoint to the dependence of others” (Cott 1998:1452, see also Fraser and Gordon 1994; J. Greene 1976; Rana 2010). While male colonists could aspire to independent status, enslaved persons and settler women, despite the differences in their status, were “locked in their dependent condition by their lack of rights in law and property” (Brooke 1989:45). In a context of money scarcity, wealthier colonists threatened a settler’s “independent” status. If currency appreciated relative to real estate, goods, and services, rich people’s cash could buy more: they “advance their own Estates, and Families, by getting their Neighbours Lands at half value” (Colman [1720] 1910:404). Members of the Upper House and ministers who lived on fixed incomes also benefited from declining prices (399). In addition, to get advances for supplies between harvests, or to establish farmsteads, yeomen turned to the local gentry, a group that had access to merchant credit in Boston. The gentry also dominated the courts and used them as a collection agency, as most debt cases involved a wealthier plaintiff and a poorer defendant, and usually the latter lost (Brooke 1989:18, 49). A site of gentry power, courts became a “target of hostility and sporadic insurgency” grounded in a “politics of household security” (Brooke 1989:27). Court officials and lawyers also benefited from money scarcity because they collected fees (Colman [1720] 1910:399). In sum, a range of actors enriched themselves at the expense of “independent” smallholders. As a remedy, Colman ([1720] 1910:406] proposed a private bank of issue, or “some great & Expensive Work,” such as a bridge over the Charles River, “& . . . [the emission of] Bills to carry it on.” The legislature could finance the quintessential collective endeavor—a bridge—by creating money. Because new currency paid for it, this public work would have effects that went far beyond the bridge itself: the money spent would become someone’s income, enabling colonists to purchase supplies and land and to pay off creditors. Bills of credit could also empower freeholders because

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this type of liquidity allowed townspeople to bypass gentry creditors and gentry-dominated courts. In contrast to gentry credit, bills of credit could empower town assemblies—institutions in which, compared to the courts, common householders took part on a more equal footing with the gentry. For instance, town assemblies could elect nongentry representatives to the General Court if gentry representatives did not vote according to their wishes (Brooke 1989). Local assemblies also allocated the pay tokens the General Court had appropriated to the town (see chapter 1). But what if the wealthy had earned their privileges? What if their money legitimized their power? For Colman, monetary wealth did not prove the value of someone’s contributions—much less that one was among God’s elect. Many “moneyed men” enjoyed unearned prosperity, while true benefactors and visionaries often failed financially. As long as money scarcity prevailed, wealth was the outcome of a privileged position in a monetary system that enabled stable access to currency in a context of declining prices. Since access to currency was necessary for all households, it was immoral for wealthy men to entrench their position by excluding other male colonists from its benefits (Colman [1720] 1910:406). Wealth prevented rich settlers from understanding the needs of a majority of settlers: disconnected from “the Straits of the Times,” Colman wrote, the wealthy could not “sympathize so feelingly with their Neighbors” (405). Therefore, Colman ([1720] 1910:407–8) argued, voters should not elect those “who benefit” to the General Court, and yeomen should become lawmakers. Unjust subordination and want were the best monetary teachers, so those colonists who lacked reliable access to liquid pay tokens knew best how to design monetary institutions. To promote their interests, they needed to vote along class lines, and provincial currency was a challenge to an oppressive power structure (405). Subservience to the wealthy and the powerful had ended: “Great men alwayes have their Followers, who hang on their skirts; and some who have no thoughts of their own, make the rich and powerful their Oracle; and so hath it been among us” (404), but colonists could start thinking for themselves and take action. These passages explain why the Upper House ordered Colman’s arrest on charges of disturbing the public peace—but they might also be the reason the Lower House acquitted him soon after.

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Colman promoted a moral economic vision of monetary institutions aimed at stabilizing a social hierarchy centered on “independent” male settlers. But he also wrote about economic development in a sense closer to today’s. Challenging pamphleteers who claimed that colonists consumed too much and that frugality would help restore the balance of trade (Newell 1998), Colman ([1720] 1910: 402) argued that it was necessary to produce more finished goods to reduce imports, a long-term process that “cannot be gone upon to any degree without Money or Bills.” Challenging those who claimed that the only legitimate way of acquiring money was to increase exports to earn more specie, Colman argued that this was a dead end because money creation preceded the expansion of production. With an adequate money supply, “Iron would soon become cheaper, and Linnens and Woolens of our own make would grow more in use, as the Spiners and Weavers improved in making them, but there is no setting up such Works because there is no Money to Pay the Labourer” (402–3). In sum, in addition to an analysis of class and political power relations, Colman proposed a comprehensive vision of creating a more diversified and less export-dependent productive system through monetary design. While Colman addressed yeoman voters from a Boston perspective, the rural minister John Wise ([1721] 1911: 161) published a pamphlet “dedicated to the merchants in Boston.” The first son of an indentured servant to attend Harvard, Wise had served as army chaplain and regularly took part in public controversies (Sklansky 2017:21–55). Like Colman’s letter, Wise’s pamphlet circulated widely, and it allows another glimpse at eighteenth-century moral economies of money.

Paper Money against the Root of All Evil For John Wise, there were two ways of organizing monetary life: an unjust “money medium” (silver and gold coins) and a just “paper medium.” Unjust money empowered creditors and buyers of agricultural staples at smallholders’ expense, but a just medium enabled fair relations between creditors and debtors, buyers and sellers. If the “money medium” was the only one available, those who had access to it could “violate the Rights of other men, without Regard to Reason or Justice,” using “many unfair

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Artifices to sink and lower the price of what comes to the Market,” while freeholders who incurred debt risked losing everything to creditors (Wise [1721] 1911:165, 167–68). The “money medium” led creditors into “temptation,” and the love of this money was “the Root of all Evil.” “Men who have it [specie],” Wise clarified, “seem infatuated by it” (185). When contemporary writers claimed that the love of specie is a sin,2 they echoed a medieval theme that condemned all love of money (Le Goff 2010:12). For Wise, paper currency allowed people to prosper without becoming infatuated with money. In the hands of moneyed men, specie behaved as an illegitimate master who lorded over freeholders. In contrast, paper currency was comparable to wives and servants whose work was crucial for “independent” men. Wives were “necessary Evils. . . . If you disseize your selves of them you are undone” (Wise [1721] 1911:192–93), and ending the paper medium was like “kill[ing] the best servant you ever had” (201). Just as the work of wives and servants made yeomen’s social position possible, paper currency stabilized their position relative to “moneyed men”; it could coordinate social life in a way that stabilized male settlers’ lives. Distinct from specie, a paper medium discouraged buyers from undervaluing agricultural staples, and if one incurred debt, paper currency enabled reliable repayment. The “paper” way of designing a circulating medium enabled prosperity without giving undue power to a small group. An abundant currency supply also justified and enabled the colonization of Native lives and lands. Currency, Wise argued, was that which distinguished colonizers from the colonized, providing a racist justification for colonization. While barter was suitable for societies in which people “to indulge themselves in great Idleness & Sloath,” “digg Juniper roots for their meat, or can live upon Acorns,” currency was necessary for a “Wise and Busling People” interested in trade and profit (Wise [1721] 1911:165). For Wise, bills of credit defined settlers as a superior group entitled to colonize, and cash scarcity because of a fixation on specie was unsuitable for a civilization that ought to dominate and replace Natives. If paper currencies legitimized colonization, they also enabled it in a practical sense: “of a very impregnating Nature,” Wise pointed out, bills of credit “will beget and bring forth whatsoever you shall fancy” (172). Military expansion

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(“a Noble Fort in any of your frontiers”) and the appropriation of Native lands (“vast Woods to the North”) spurred the former army chaplain’s imagination.3 Wise admitted that paper money could lead to price increases that hurt those on a fixed income, but salaries could be adjusted, and price controls could restore purchasing power—the alternative was to allow “every cutthroat, to rise the price” (quoted in Sklansky 2017:54). Not only money creation but prices too were part of a moral economy. For Wise, creating currency and setting prices were means to a moral economic end—legal arrangements that needed to be coordinated to promote a just social order. Price ceilings were common in the eighteenth century (Friedmann 1973; Boyd 2018). And when people saw their livelihood challenged by unjust prices, they sometimes took direct action, for instance, by seizing merchandise, selling it at a “just” price, and handing the proceeds over to the merchant (Bogin 1988). These settlers’ attempts to control money and prices became a partial substitute for the alienability of land, a new legal arrangement specific to the colonies. Moral economies of money emerged soon after land had become alienable in the colonies (unlike in Britain) (Park 2016). Colonists were now at risk of losing their real estate for debt. Unlike Natives, whom settlers often dispossessed through debt (Park 2016; Banner 2005; O’Brien 2017), settlers attempt to intervene in money creation and price formation to maintain their link with land via moral economies of money. As lawmakers extended the domain of what people could buy and sell when they made land alienable, smallholders attempted to stabilize their claims to land through monetary design.4 In the twenty-first century, owners of bank accounts and other financial assets project themselves into the future through the hope that their money will enable them to purchase in a few years a quantity of goods and services similar to what it can buy today. If people think that price stability alone enables the monetary connection between the present and the future, price increases represent a threat. In contrast, colonial freeholders projected themselves into to the future through money’s malleability and claimed the right to adapt money creation to create a desirable future. Money (and prices) were means to bring about a society in which small landownership

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among white men was widespread, stable, and accessible to those who had not attained yeoman status. What connected the present with a desirable future was not a money imagined as stable but settlers’ broad involvement in money creation and price formation. In a moral economic situation, currency was a means to organize society in a way people deemed just. In the two decades after Colman and Wise addressed freeholders and those merchants who focused on inward-oriented economic development, the governor and the Lower House struggled to reach compromises about how much currency to issue, and how to distribute it (see chapter 1). But when Britain limited the colonists’ monetary options, large numbers of smallholders participated in moral economies to defend a monetary design they considered just.

The Land Bank Insurgency Urged by a group of Boston merchants, the Board of Trade instructed Governor Belcher to retire all outstanding bills by 1741 (Riesman 1983:207), which would have required massive taxation and removed almost all cash from the province. The Board of Trade wanted to limit lawmakers to issuing £30,000 per year for government expenses such as the military and officials’ salaries—not land banks or town-controlled monies—and this currency was to be retired in the following year. But for Belcher, opposing the popular chamber meant risking his salary, and he ignored imperial instructions. Because he feared the Crown would appoint a rival, he became more subservient in the late 1730s, and when the legislature authorized £60,000, he vetoed it (Zemsky 1971:114–17). When they learned about the veto, lawmakers and voters had been involved in decisions about money creation for several decades. In response to the threat to their money supply, they increased pressure, elected more pro-bills representatives, and instructed them to insist on monetary expansion. The legislature also issued a call for proposals “from any persons whomsoever” (quoted in A. Davis 1901:279) to design a money creation mechanism. In this context, the merchant John Colman tried his hand at currency politics for a third time. Once again, he changed his strategy, now asking “independent” men to take part in the “Land Bank and Manufactory.” This

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institution was distinct from today’s retail banks, which serve both customers who want to deposit money and those who seek advances. The Land Bank was only a money-creating institution that provided currency against real estate. It mirrored the logic of bills of credit because the issuing institution created demand for its own pay tokens: its debtors could discharge their obligations in the bank’s notes, and individual Land Bank participants promised to accept them in private transactions. The Land Bank enabled money users, locked out from the money creation process as voters, to take part in money creation based on a mainstay of their political-economic identity: the land they claimed as theirs. The promoters and the canvassers who toured Massachusetts described it as a popular project aimed at defeating usurers, and advertisements urged settlers to receive its notes (Dunn 1998:70). About one thousand individuals, among them leading members of the Lower House, subscribed to the Land Bank and promised to accept its notes (A. Davis 1901:131, 144). The Land Bank was designed to spur inward-oriented economic development. Debtors could repay a loan not only in Land Bank notes but also in select staples that the new institution would market to encourage domestic production and reduce dependence on British imports. Like bills of credit, Land Bank notes were midlevel money by design: Colman and his associates wanted a type of money that was higher level than individual promissory notes or book money, and they aimed for wide acceptability within Massachusetts. But they did not compete with higher-level global silver coins because they wanted a means of payment that would remain within the colony. When the initial debtors spent them, the notes entered circulation.5 In the next months, the acceptance of Land Bank notes was at the center of controversy. Land Bank currency lacked legal tender status, and the Boston treasury did not receive them. But towns decided to accept Land Bank notes for local dues, and only one municipality that debated the matter declined tax acceptance (Dunn 1998:62).6 They embraced it because they hoped that this currency would make it easier to coordinate households’ contribution to the town, but doing so also meant taking a political stance: helping to strengthen the link between a new currency and the existing

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unit of account.7 The clerks who recorded tax acceptance each framed it in a different way, showing their understanding of the process. For instance, the Lynn clerk wrote that “the Town Voted that they would pay the Towns Debts in Land Banck Bills” (Lynn Historical Society 1949:79). The Dedham clerk recorded a vote “if it be the mind of the Town to Allow ye Collectors to Recive Land Bank Bills” (Hill and Slafter 1886:56). Topsfield freeholders voted whether “Bills shall Defray Town Charges” (Dow 1917:13), and their Braintree counterparts decided that “the Town Rate be paid in Land Bank Notes” (Bates 1886:243). These clerks recorded a broad process of trying to make a new currency accepted. Individual traders stated they would accept Land Bank notes and bolstered this monetary governance project. The intertwined character of settler democracy and racist social order is especially visible in the following newspaper advertisement in which one seller promised to accept Land Bank money in payment for someone else: “The Negro-man advertised to be sold by me the Subscriber for Bills of the Land-Bank, will be sold to the highest bidder . . . on Tuesday next 4 o’clock” (A. Davis 1901:146). By stating that he took part in the Land Bank monetary sphere, the enslaver informed potential bidders that he would accept Land Bank notes in payment of the person he claimed to own. There were other efforts—real or imagined—to support Land Bank currency. Rumors circulated about a march from rural areas to force Boston merchants to accept Land Bank notes, and Governor Belcher had several alleged leaders arrested. Although it is unclear how developed such plans were, the fact that they were conceivable points to the depth of freeholder involvement in money politics. Some settlers reported threats to authorities: a Kingston resident learned his warehouse would remain unharmed if he stopped refusing Land Bank money (Billias 1959; A. Davis 1901). If the Land Bank’s supporters encouraged or even enforced generalized acceptance of their notes, its opponents attempted to undermine it. A group of Boston merchants established a Silver Bank, an institution that issued notes it pledged to redeem in specie. It promised to remedy money scarcity while locking anyone but those with access to specie out of control over currency creation (Newell 1998).

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Monetary Silencing and the Dull Compulsion of Money The writings of William Douglass, a physician who also earned income as a creditor (Sklansky 2017:56–90), allow a glimpse into the patterns of monetary agency silver bankers wanted to establish. Douglass had close ties to English and colonial officials (Newell 1998:223). The most influential conservative monetary writer of the colonial era, he addressed officials, wealthy merchants, and other members of the upper classes like himself, and his texts were part of a pamphlet literature that had criticized bills of credit since the 1710s. For Douglass, debtors’ undue power over money creation was the central problem. As a group, debtors were spendthrifts who sought to get something for nothing—they were “the Idle, those in desperate Circumstances, and the Extravagant, who can never have any claim to money but by Fraud” (Douglass 1740:330). Since debtors were more numerous than creditors, they were bound to win electoral contests. Debtors had all but risen up against the Crown and its representatives in the colonies. Making a fetish of “English Liberty and Property of the Subject” and turning it into “levelling and licentiousness,” debtors had forgotten that “Society requires subordination” (332, 295). Land Bank organizers had “Debauched the minds of the People, by instilling unto them some pernicious Principles, destructive of all Society . . . that common Consent, or the Humour of the Multitude, ought to be the Ratio Ultima in every Thing and particularly in Currencies.” They were the “unthinking Part of Mankind, who are not capable of consulting their own Interest . . . who do not reason for themselves” (357, italics in the original). Such accusations sound elitist, but they were more than that. Douglass proposed a coherent vision of how money needed to be designed to impel nonelite money users to work. Douglass argued that money needed to be undemocratic by design: If people could create money for themselves, why should they work? (Sklansky 2017:87). Money was necessarily an undemocratic medium, and access to it had to be made difficult to ensure that nonelite people worked enough. In his view, money was a pedagogical device that should teach members of nonelite groups their place, and monetary

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design was a way of creating what Marx called the dull compulsion of economic relations. In the pamphlet he published in the volatile context of the Land Bank struggles, Douglass did not articulate his desired social order. But in a different text, he outlined his vision of a just society, which consisted of “four Sort of People”: “1. Masters that is Planters and Merchants. 2. White Servants. 3. Indian Servants. 4. Slaves for Life, mostly Negroes” (Sklansky 2017:77). Absent from this hierarchy were freeholders, the majority of the enfranchised population whose right to vote was based on land ownership, and the group that animated moral economies. For Douglass, silencing moral economies of money went hand in hand with questioning the existence of a group that understood themselves as “independent” yeomen. Monetary design needed to be undemocratic to ensure that most settlers worked for someone above them in the settler hierarchy. Creating a more rigid social hierarchy required a more hierarchical monetary design. But combating moral economies of money did not mean tolerating economic misery among settlers. The chief theorist of monetary conservatism was also a pioneer of philanthropy, and he endowed several charitable institutions outside of the church. Charity is a form of providing money that legitimates and reinforces existing hierarchies because it demonstrates the benevolence of moneyed classes (Sklansky 2017:73). Relying on charity is distinct from political involvement in money creation: even if it shields some people from the worst effects of impoverishment, charity justifies and stabilizes existing positions of power and wealth, and deepens the idea that the wealthy are an obligatory passage point through which money reaches the nonmoneyed. It affirms the private character of money as it proclaims dependence on the wealthy. Douglass argued that, to create dull economic compulsion, nonelite households ought to be put in a situation that forced them to access money through private credit or waged work (not public money creation) and, if that failed, charity. If the “unthinking part of mankind” ought to be excluded from money politics, monetary agency ought to be concentrated in the group that had distinguished itself by becoming wealthy. For Douglass, the possession of money was an unfailing indicator of one’s contribution. For him, there was

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a realm of private production and exchange that was not subject to public scrutiny and that separated straw from wheat, a realm that could not be known and that—embodying its own principle of justice—was separate from the political. Government could only recognize the results, manifested in the possession of money, and ensure that the successful were not cheated by refusing to issue a fraudulent means of discharging obligations, bills of credit. Those who owned specie had earned their wealth and had proven their worth to the community. This special group was the “universal trading Part of the World” which, “as one tacit Confederacy,” had agreed to use silver (Douglass 1740:294). They knew “how to find their own tools” (329–30) and were in a unique position to determine what counted as money. Having selected the medium of exchange, validated by their success as measured in the very thing they were said to have selected, and with reliable access to specie, merchants were in an ideal position to remedy money scarcity. These people could also support the government: “It is absurd to imagine that a Government finds money for its People, it is the People who by their trade and Industry, provide not only for their subsistence, but also for the Support of the Government” (342–43). Instead of providing public money in a settler democratic process, the government required wealthy people’s monetary contributions. Therefore, wealthy merchants should be allowed to issue bank notes on a “silver bottom,” the only firm basis for money issue. The government was to grant a charter to this bank and make its notes “receivable in Taxes and all publick Payments” (Douglass 1740:346). For Douglass, granting a charter and accepting a bank’s notes in payment of taxes meant that a government “passively” recognized the special monetary status of one group. Douglass’s target was not the practice of issuing paper money and making it tax receivable: he wanted to organize money creation in a way that removed it from electoral processes. If the architects of the Land Bank had designed it to stabilize the position of small landowners, the promoters of the Silver Bank wanted to empower a smaller group with access to specie. Douglass did not think that specie and silver-backed notes could replace bills of credit for public spending and taxation. Instead, he proposed

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to limit their quantity to what was necessary for government expenses and to withdraw them through taxation within a year. He wanted to draw a line between money (specie) and debt instruments (bills of credit) by emphasizing that the latter were backed by specie and that the treasury would redeem bills in specie (which would enter the treasury via harbor taxes) within a year. But this was for appearances only: since, in his plan, bills would return to the treasury in payment of taxes within a year, there was no intention of converting them into specie. This arrangement would have tied the government’s hands because it would face specie claims if it did not tax enough, or quickly enough. The government needed to balance income and outgo, and appeared unable to create midlevel money (Douglass 1740:343–44)—it appeared to issue only debt, imagined as distinct from currency. Douglass’s arguments resonated with Silver Bankers and with Governor Belcher, who did everything in his power to stop the Land Bankers. But their notes entered circulation despite official protests. Belcher then issued a proclamation in which he accused Land Bankers of disturbing the peace, urged the population to refuse Land Bank money, and asked “Masters and Mistresses of Family’s [sic]” to “caution their Servants from taking in exchange or otherwise, any of said bills” (Belcher 1740). A text, signed by wealthy merchants, accompanied the proclamation: “We caution and advise all Persons whatsoever who are indebted to us, or deal with us, that they refuse the said Bills and do not take any of them in Expectation of our receiving them . . . we being determined not to take the said Bills for any debts due, nor for any Goods” (Belcher 1740). This pledge made Land Bank money less desirable for wealthy people’s debtors who hoped to pay off their obligations by using Land Bank money. Belcher also turned against another group over which he had a measure of control: public officials. He fired justices of the peace connected to the bank, instructed officials to refuse licenses to taverns that accepted Land Bank notes, and dismissed commissioned militia officers who had accepted Land Bank notes; in response, many militia members resigned. Belcher also limited the practice of lawyers who accepted and tendered these pay tokens. Land Bankers made large gains in the elections and continued to

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call for monetary expansion. In response, Belcher dissolved the assembly (Dunn 1998:64; Zemsky 1971:121–22, 125–25; Newell 1998; Batinski 1996; Conroy 1995:216–17; A. Davis 1901).

Closing the Land Bank In the end, imperial measures ended the Land Bank on terms that threatened the economic existence of its participants. Parliament declared that whoever owned Land Bank currency could sue the company or individual subscribers and could compel redemption in lawful money at face value, plus interest. This meant that individual subscribers became liable for debt owed by the Land Bank as an institution. Even scarier was the fact that subscribers risked having to pay three times the face value of the note plus interest, as well as forfeiture of estate and prison. Parliament retroactively outlawed actions that had been legal when they were undertaken and gave enormous power to those who owned Land Bank notes vis-à-vis any Land Bank member (A. Davis 1901:161–63, 67). Popular sentiment was on the Land Bankers’ side, which explains why, at first, owners of Land Bank notes did not sue participants. Meanwhile, the Land Bank directors attempted to collect amounts proportionate to the loans participants had taken out to redeem outstanding notes, but this process turned out to be slow. Even paying one’s proportionate share would not protect a subscriber from treble damage claims, as any owner of notes could still sue them. Meanwhile, the bank directors could not enforce collection because Parliament had voided all contracts connected to the Land Bank (A. Davis 1901:200). When individual owners of notes began to bring suits, the attorney general prosecuted prominent Land Bank subscribers to force them to pay their share. Commissioners tried to collect the sums due, but a fire destroyed the Land Bank records, further complicating collection (A. Davis 1901:216). During the two decades it took to withdraw the notes, the collection effort was a constant reminder of Britain’s retroactive and punitive prohibition of a popular monetary institution. The Land Bank controversy involved large numbers of colonists and was at the center of political life while it lasted. Historians argue that the

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Land Bank was a key event in the process that led to war with Britain (A. Edwards 2017). Imperial authorities considered that Governor Belcher had been ineffective in dealing with the monetary insurgents. Had Belcher remained in power, “the first collision with Great Britain would have probably occurred in 1741” (A. Davis 1901:191). The new governor managed to get a compromise through the Boston legislature: additional paper currency was accompanied by strict redemption dates, introducing more restraint (Zemsky 1971:138). But opponents of paper currency were not satisfied because bills of credit from neighboring colonies continued to flow into the Bay Colony. In response to merchants’ demands, Parliament passed a law prohibiting legal tender currency throughout New England (1751). After 1755, paper currency no longer caused opposition because it financed troops that fought in the French and Indian War (1754–63). For Britain, military conflict “always justified inflationary economic policies” (Zemsky 1971:143). After the war, the Massachusetts assembly used the specie appropriated by the British government to redeem the bills of credit still in circulation. After conflict’s end, debates resumed because Parliament soon passed a second Currency Act (1764) to end legal tender paper currency across the colonies when Virginia refused to force colonial debtors to pay their British creditors in sterling (J. Greene and Jellison 1961; Ernst 1973). The 1764 Currency Act was far-reaching: besides prohibiting legal tender currency across British North America, it forced legislatures to withdraw circulating currency by the date they had stipulated, and governors who did not uphold these measures faced severe penalties.8 But the Currency Act had not defined “legal tender.” Since it was a response to Virginia’s attempt to force its currency on British creditors, it would have been reasonable to think that the legislation prohibited legal tender laws for debts to private creditors. But imperial officials interpreted it in a more sweeping manner and prohibited colonial governments from accepting their own currencies at colonial treasuries and in public land banks like those in Pennsylvania or New Jersey. Colonial governments could emit currencies but not create demand for them through tax acceptance. Imperial authorities issued partial exceptions, which caused

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frustration among colonial lawmakers, and Parliament took almost a decade to clarify the meaning of “legal tender.” Nine years after the Currency Ban of 1764, it allowed the tax receivability of colonial bills of credit. At the same time, imperial authorities stepped up enforcement of the Navigation Acts, thereby hampering the acquisition of specie through international trade. Hence, the two major ways of provisioning the colonies with money—local money and foreign commerce—were drying up. And then, a today better-known crisis occurred. The standard narrative presents the Stamp Act crisis as a dispute about an increasing tax burden that caused revolution and war. In this telling, the United States was born in a settler revolt against an overreaching state that attempted to impose high taxes. Yet the Stamp Act crisis was part of a political situation in which money users did not see monetary design and taxation as separate spheres of practice but thought that they were of a piece. The Stamp Act not only imposed high taxes but did so in a context in which the Currency Ban had limited domestic money creation. Besides removing settler currency from circulation, the imperial government imposed taxes payable in a currency money users did not have: silver coins (A. Edwards 2017). Hence, for settlers, a specie tax was an outrage because, soon after banning legal tender currency, authorities demanded payment in a currency almost no one had while enforcing trade regulations that limited colonists’ ability to earn specie. Since the seventeenth century, colonists had taken part in deciding not just about the level of taxation but also about how they could discharge their debt to municipal and colonial treasuries. In response to popular demands, public pay-offices had accepted in-kind payment, labor power measured in time, currencies produced by Natives and those issued by colonial legislatures, and specie for some levies (see chapter 1). From this perspective, the Land Bank experience but also the Stamp Act crisis represented recent instances of a larger process in which moral economies of money were inseparable from decisions about what public bodies received in payment of taxes.9 The connection between taxation and money creation had been a visible aspect of public life for decades: colonists protested against high taxes—even those payable in bills of credit—not only because of the individual tax burden but because the taxes would deprive the community

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of a circulating medium. Money users saw tax controversies as part of a broader politics of money creation.10 Imperial mandates in the areas we today call fiscal, monetary, and trade policy exacerbated money scarcity. Consequences were far reaching: As merchants stopped ordering goods from Britain, port workers and sailors lost income. Pennsylvania farmers could no longer settle their debts with shopkeepers, who had difficulties settling with Philadelphia merchants. Creditors resorted to lawsuits and foreclosure to recover their money. Cash, however, was so scarce that properties could not be sold at auction, or could be sold only at a much reduced price. Widespread impoverishment ensued (Bouton 2007:16–18; Ernst 1973; Bridenbaugh 1964).

Moral Economies of War Finance The Continental Congress and state governments financed the war against Britain largely through bills of credit. Congress claimed the right to issue money, but taxation was a state prerogative. Despite insufficient public levies, these currencies at first held up well, in part because people were so used to this paper currency that they accepted it out of habit (E. Ferguson 1961:18–19). On the local level, patriot committees attempted to enforce acceptance of revolutionary currencies and prevent depreciation. They publicly denounced those who rejected bills of credit or took them at a discount. They also targeted offenders through boycotts. For them, sellers who overcharged buyers who wanted to pay in revolutionary currency undermined the means of revolution and war and were a threat to the community. Because overcharging undermined impoverished groups’ access to scarce food, these committees also considered it to be like speculative hoarding. In this context, states enacted price ceilings and antiwithholding laws. There was a near consensus that at-par acceptance of revolutionary pay tokens, collectively enforced “just” prices, and the patriot cause were inseparable, and the idea that a self-adjusting market could yield adequate prices was a minority view (Clark Smith 2011:141–45; Rosswurm 1987). Revolutionary currencies continued to depreciate, however, and by 1781 the Continentals had become almost worthless. In this context, Congress and the Pennsylvania legislature turned to Robert Morris, a wealthy

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financier, close friend of Washington and mentor to Alexander Hamilton. Morris agreed to use his wealth to assist the war effort in exchange for broad powers over public finance, including currency creation and tax collection, and the right to dismiss any official connected to war finance. He embarked on a course of action similar to the British in the 1760s. When he assumed his position as the head of the Office of Finance in 1781, he ordered the retirement of Pennsylvania bills of credit through taxation without emitting additional money. In addition, he ended the Pennsylvania land banks. Eventually, since no more paper money was in circulation, taxes were levied in specie. The damage caused by such policies, however, came too late to harm the war effort (Bouton 2007:70–83). These policies were part of an emerging resistance among elites to what they considered an excess of democratic control over political-economic life (Bouton 2007:61–87). Morris and his protégé Hamilton attempted to create forms of monetary agency that encouraged a centralization of wealth and power. Middling people should be excluded from money politics, they claimed, and access to credit should be hierarchical (Riesman 1989:8). The project was about “combining together the Interests of moneyed Men” into “one general Money Connection,” as Morris wrote to Thomas Jefferson (quoted in Bouton 2007:73) and creating a society in which a smaller number of individuals controlled property. Morris believed that the United States’ path to greatness—a place among the warring nations of Europe— lay in a greater concentration of wealth, either through state-administered redistribution from the bottom to the top or through privatization of profitable sectors, including money creation (Bouton 2007:61–87). To replace bills of credit and provide a new type of pay token, Morris promoted chartering the Bank of North America. Owned by stockholders with limited liability protections, it issued legal tender notes it promised to redeem in specie. Because it was undercapitalized, this bank could not meet the need for currency, and it issued large-denomination notes suitable only for the wealthiest. It loaned money to merchants for short periods and did not accept land as security. As a result, in scores of petitions, Pennsylvanians complained about lack of access to credit and voiced fears about the emergence of a banking aristocracy. While Pennsylvanians feared inequality, the bank’s advocates saw their institution as a means of stabilizing

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a hierarchical social order (Bouton 2007:110–11). The shift from bills of credit to bank-created money was of fundamental importance. Thomas Paine noted that “while the war was carried on by emissions [of bills of credit] . . . the poor were of equal use in government with the rich” (quoted in Clark Smith 2011:181). Bills of credit had not required private monetary wealth and had not empowered financiers like Robert Morris.

Moral Economies of Money In a context in which enfranchised money users took part in monetary decision-making, moral economies of money flourished. These moral economies centered on yeomen but converged with the outlook of those merchants whose prosperity depended on internal development more than on transatlantic trade. The settlers who enjoyed the status of “independent” producer and formed a majority of the electorate in colonies like Massachusetts demanded monetary institutions that promoted what they saw as their legitimate interests: reliable access to credit and a flexible money supply connected to the electoral process that would stabilize their social position. They understood money as a malleable public institution that they could shape to stabilize their position. If in the eighteenth century the plasticity of currency was at the center of settler democracy, the early nineteenth century saw a reversal: those who claimed to speak for settler equality promoted the idea that there was only one legitimate and timeless money, specie.

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C HAPTE R 3

Monetary Silencing and the Romance of Unmediated Exchanges

S E T T L E R S IN T HE C O L O NI A L A ND R E V O L U T I O N A R Y eras embraced public banks

of issue and treasury currencies as part of moral economies of money, but in the antebellum period suspicion of all paper currency became a centerpiece of national politics. Why did so many money users come to reject banking and Treasury-led money creation? How did those who claimed to speak for male settler equality come to endorse the idea that there was only one legitimate money, specie? How did money users shift from understanding money as a public good and a creature of the law to seeing it as a “private and finite thing that moved in and out of physical locales” (S. Ferguson 2018:18)? Historians analyze the Jacksonian preference for silver and gold coins in isolation, disconnected from the moral economies that flourished in the eighteenth century and again after the Civil War.1 In this chapter, I argue that Jacksonians’ fixation on specie is the outcome of silencing processes that preceded it and is itself an instance of monetary silencing. When the United States Constitution came into effect, it outlawed state-level bills of credit, the traditional terrain of moral economies of money. In response, state legislatures claimed the right to establish corporate banks, which soon provided the bulk of the country’s currency. Bank notes entered circulation when these for-profit institutions advanced it to a debtor. The economist 60

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Farley Grubb (2003:1778) analyzes this shift as a “usurpation of state sovereignty by rent-seeking bankers,” and the historian Terry Bouton (2007) as a “privatization” of money creation. In the eighteenth century, money creation had been a transparently political process; currency had entered economic life for purposes defined, in part, through public deliberation; and lawmakers had been at the center of money’s public life. Antebellum corporate banks transformed conditions for money users’ agency and knowledge. In this context, monetary critique focused on the unearned privileges lawmakers granted banking corporations: the right to create currency and charge interest, the tax acceptance of these notes, and limited liability protections. These privileges, critics charged, enabled bankers to thrive at everyone else’s expense. If monetary critique became a negative project centered on the critique of banks, it also had a positive vision: the romance of unmediated exchanges. The most ardent Jacksonian critics claimed that, once they had eliminated or reduced corporate currency, silver and gold coins would flood into the vacuum. For them, gold and silver were commodities like any other. They enabled producers to make exchanges without an intermediary that provided a monetary medium, be it a bank or a government institution. Once specie-enabled exchanges prevailed, economic life would become a series of just exchanges between equal settler-producers. Building on an ontology in which money existed without governance, Jacksonians hoped to realize the romance of unmediated exchanges. The antebellum monetary critique needs to be understood against the backdrop of late eighteenth-century controversies about monetary design.

Moral Economies and the War Debt Pennsylvania was a focal point of monetary struggles during the war against Britain. The first corporate bank, Morris’ Bank of North America, was in Philadelphia, and since its establishment, Pennsylvanians had voiced concerns that the bank made only short-term loans to merchants and that they could not get long-term loans against land. For them, the bank undermined the kind of equality they saw as necessary in a republic of smallholders. Therefore, they demanded a public land bank. They argued that

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state-issued paper money was sound in principle and that the depreciation of revolutionary currencies had been due to wartime conditions. In a peacetime economy, bills of credit and land banks would function as they had in the colonial era. In this context, the Philadelphia legislature revoked the Bank of North America’s corporate charter and established a currencycreating public loan office (Bouton 2007:113, 134–35; Rappaport 1996). At the same time, controversies about the war debt emerged across the country. Besides bills of credit meant to circulate as currency, wartime legislatures had issued a range of other IOUs to soldiers, officers, and army suppliers. During and immediately after the war, these bonds traded far below face value. It was unclear if they were ever to be honored, and many of their owners—usually of little means—urgently needed cash. Therefore, most of these obligations ended up in the hands of speculators who bought them for pennies on the dollar. Over 95 percent of initial Pennsylvanian bondholders sold their bonds, and ownership concentrated at the top, with twenty-eight individuals possessing 40 percent of the Pennsylvania debt. At the national level, only 2 percent of the population ended up owning such bonds. The new bondholders were more likely to have the wherewithal to wait for specie redemption, and the influence to promote it. Their spokespersons Robert Morris and Alexander Hamilton asked that taxpayers redeem these IOUs in full and in specie. This meant that veterans who had sold their bonds for a fraction of their face value now faced specie taxes to discharge interest and principal in full (Bouton 2007:84–85; Holton 2008:37 and passim).2 In this context, the per capita money supply was even lower than after the British currency ban, and economic activity shrank. For many households, the result was catastrophic: in several Pennsylvania counties, around half of taxpaying households faced foreclosure. Cash scarcity favored those who had access to credit, owned substantial financial assets, or had a fixed income. It harmed those who could not settle their debts, and those producers who became victims of decreasing prices. As a result, inequality increased in the 1780s. In this context, state assemblies passed debt relief laws and emitted bills of credit with legal tender status—money creditors had to accept in payment of debt owed to them, and the type of money Britain had prohibited (Holton 2008; Bouton 2006, 2007).

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Bondholders and creditors but also taxpaying smallholders were unsatisfied with state legislatures’ actions: while the former two groups complained that legislatures were too responsive to popular pressure and that the Revolution had resulted in an “excess of democracy,” the latter argued that the Revolution remained unfinished and that money scarcity and tax burdens were worse than in colonial times (Holton 2008). Popular resistance focused on protecting individuals from tax collectors and the judiciary. Bouton notes that five “rings of protection” were in place in Pennsylvania. One, county tax collectors sympathized with inhabitants and refused to collect until they were themselves threatened by a lawsuit. Two, county justices refused to prosecute. Three, sheriffs refused to sell the property. Four, communities organized to boycott foreclosure auctions. Five, juries acquitted tax debtors. And if all else failed, communities manhandled tax officials (Bouton 2007:145–67). Tensions peaked in September 1785, when Congress asked the states for $3 million to settle a portion of the war debts. The demand divided state legislatures and led to a series of protests, the most famous of which was Shays’ Rebellion in Massachusetts. This uprising articulated its demands in the familiar language of money scarcity. A representative explained that they were motivated by “the Present expencive mode of Collecting Debts, which by reason of the Great Scarcity of Cash will of Necessity fill our Gaols with unhappy Debtors” (D. Gray [1786] 2008). They asked state lawmakers to pass stay laws that would protect households from foreclosure and to issue currency to enable smallholders to pay off private creditors and tax collectors. Participants shut down courts, but a privately financed armed force crushed them.3 Because they feared similar outcomes, the Connecticut and New Jersey legislatures refused to levy specie taxes (Holton 2008:69–83). These struggles were not isolated events but part of a longer series of moral economies that included prerevolutionary movements such as the 1740 Land Bankers in Massachusetts and the North Carolina uprising of 1765–71 as well as wartime controversies about currency and price formation. These movements attempted to shape monetary design in a way that stabilized smallholders’ economic situation, and their critique of taxation was part of a broader moral economy of money.4

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Before, during, and after the war against Britain, money users demanded public money in the form of land bank and treasury currency and opposed corporate banks that locked them out of the money creation process. But the Constitution reshaped the institutional terrain on which  money users acted.

How the Constitution Restructured Monetary Agency After Shays’ Rebellion, members of the gentry and bondholder classes became convinced that the revolution had gone too far and considered that voters’ monetary agency needed to be restrained to stabilize a hierarchical social order. The United States Constitution was, in part, an attempt to sideline moral economies of money (E. Ferguson 1961; Bouton 2007; Fritz 2008:119–52; Holton 2008). Because they shifted power over money creation from the state legislatures to the federal level, the Constitution’s monetary provisions were central to this aim. States were now prohibited from creating bills of credit, from coining, from regulating the value of money, and from stipulating that anything but gold and silver was legal tender. In this new context, money users, even if they were steeped in a moral economic knowledge, could no longer pressure their state legislatures because the Constitution had limited the assemblies’ monetary agency. The framers designed the country’s highest lawmaking body to be more shielded from money users’ pressures than state legislatures. First, the Constitution did not grant voters the right to recall federal legislators or to instruct them on how to vote (rights that were common at the state level). Second, it created large electoral districts that favored the election of wealthier representatives. Third, only the lower house was to be elected directly, while state legislatures and the Electoral College—at one remove from voters—chose senators and the president. Fourth, the absence of term limits allowed the formation of a political class. When the Constitution became the supreme law of the land, it created its authorized interpreter, the Supreme Court, staffed by justices that were not elected but appointed for life by the indirectly chosen president and were confirmed by the indirectly elected Senate (Holton 2008).

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Finally, the very size of the new—national—space of monetary governance would impede moral economies of money because the differences between populations made it difficult to articulate collective interests, and the vastness of the territory made communication and popular organization difficult. In the Federalist Papers, James Madison ([1787] 1977) connected what he considered the need for a large polity to the money question: “A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union than a particular member of it.” It was more difficult to create popular pressure in favor of bills of credit at the federal level, and when the United States Constitution came into force, it shrank most voters’ monetary agency. Reshaping the electoral process also meant reshaping monetary design. The Constitution did not mention corporate banks, the moneycreating institutions that would provide the bulk of the country’s currency in the antebellum era and reshape money users’ agency and knowledge.

Antebellum Bank Money and Its Users After the Constitution, specie continued to function as the highest-level currency,5 the only full legal tender for public and private debt. But the system’s midlayer pay tokens changed: the Constitution’s silence about banks enabled federal and state lawmakers to claim the right to charter moneycreating corporations. Chartering a bank, then and now, means allowing bank operators to create money and advance it to individuals who become the banks’ debtors and pledge to repay it plus interest. Then and now, bank money enters circulation when these debtors spend it.6 Then and now, limited liability protection means that bank investors can choose how much of their personal wealth to invest and that they are not liable for anything beyond that amount if the bank fails (Hockett and Omarova 2017). But distinct from today, each antebellum bank issued its own currency. And distinct from today, antebellum banks promised to redeem their currency in specie on demand (Greenberg 2020).7 The logic of the antebellum monetary hierarchy encouraged money users’ focus on specie. Banks’ promise to convert their currency into specie

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made it appear as though only the top level was properly money. It is instructive to contrast corporate bank notes with bills of credit: The owner of a bill did not need to be concerned about specie redemption because the currency did not promise it. Its character as a creature of the law, driven by taxation and, sometimes, legal tender laws, was visible. Conversely, corporate bank notes seemed to be money only because they represented specie (even if tax receivability supported Bank of the United States and many state bank notes). Because of the logic of specie redemption, corporate currency, even though made of paper, reinforced rather than challenged the mystique of specie. The federally chartered First and Second Banks of the United States occupied a central place in the periods in which they existed (1791–1811 and 1816–36). They created the highest-level bank money: a currency the law situated just below specie. This was the only bank money people could always use to pay federal taxes, enhancing its acceptability. As a result, it circulated across the country and enabled the government to make payments in a uniform currency. (These banks also held the federal government’s deposits.) Because of their size, the First and Second Banks of the United States stimulated or slowed down economic life when they changed their lending/currency creation policies (Catterall 1903:404; Knodell 2017). The notes of state-chartered banks were below those of the Banks of the United States in the hierarchy of money. At first, state lawmakers saw bank charters as a special privilege and often denied them. Would-be bank organizers had to convince legislatures that their project was indeed in the public interest. The earliest state banks were like national banks for each state: legislatures specified the conditions under which they had to make advances to the state government or to groups such as farmers. If state banks refused, they had to pay a penalty and risked nonrenewal of their charter. These banks were an integral part of state public finance: assemblies taxed banks to finance public expenses while limiting levies on persons and property (Hammond 1962:188, 203; Bodenhorn 2003:142; Sylla, Legler, and Wallis 1987). State treasuries also bolstered the acceptability of state bank currencies when they received them in payment of taxes.8 Soon, legislatures began chartering a large number of banking corporations, a process that was connected to political and economic rivalry. When

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Federalists established a bank, their Republican rivals might attempt to do the same.9 And when the only bank in town refused credit to merchants, these rejected money users might establish a bank in response (Appleby 2000:84–87). There were only three corporate banks in 1790, but the number increased to 28 by 1800, reaching 102 by 1810, and 327 by 1820. These institutions created the bulk of antebellum currency.10 By 1850, thousands of bank notes, each with its distinct design, circulated (Mihm 2007:3). Some state banks paid specie reliably, but others avoided converting their notes into coins. Some of them were in remote places to ensure that few money users would present notes for redemption. Others threatened to pay large sums in small change when someone demanded specie redemption, or they made money users swear separately for each note that they were the rightful owner. Because of the multiplicity of notes, it was difficult to know a state bank note’s reliability. To do so, money users had to keep up with failed banks as well as fraudulent and depreciated notes. Counterfeit detectors appeared, periodicals that listed currencies and their status that helped merchants evaluate pay tokens (Dillistin 1949; Hammond 1962:179; Mihm 2007; Rothbard 1962:54–58). In this context, some money users accepted only specie or presented whatever bank notes they received for redemption immediately (Huston 1998:225; Babson Fuhrer 2014:211). But others could not afford to refuse bank currency, much less travel to redeem the notes of out-of-town banks. “A man may prefer silver,” a critic noted, “and yet not choose to walk even half a mile, to have his note changed” (Gouge [1833] 1968:58). But these everyday troubles were only one of many reasons money users distrusted corporate banks.

Money Users and Bank Money Issuers Bank money constituted a rupture with the past and changed money users’ relation with money creation. Some conservatives were alarmed that men they considered of little capital could now establish banks and emit currency (Lamoreaux and Glaisek 1991:503), and some historians (Appleby 2000:84–87; Lamoreaux and Glaisek 1991) argue that the multiplication of banks was a process of democratization. But establishing a bank was not within reach for all money users even if the law prohibited only Blacks

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from operating one (Greenberg 2020:24). Significant entry barriers existed, including the capacity to enter negotiations with lawmakers and make “unrecorded payments” (Ng 1988:878) to some of them. Bank organizers were often members of state legislatures (Ng 1988:878). While in the age of bills of credit, enfranchised money users could influence money creation through electoral and extraelectoral processes, corporate banking introduced a new division between those who could attempt to establish a bank and those who considered themselves unable to do so. There was now a separation between corporate bank money creators and most money users. Money users also became disconnected from the material process of money creation and destruction, and from knowledge about it. Elected representatives no longer decided about and oversaw the creation and extinction of midlevel currency: They merely authorized such a circuit, now run by banks. The printing, signing, distributing, and burning of currency was no longer in the hands of elected assemblies but was delegated to forprofit corporations. And no longer were there annual controversies with the governor about how much money to issue, a recurring educative process about money creation that had allowed moral economies to flourish in the colonial era. Money creation now happened when bank officials made loans, and corporate money creation restricted participation to those who could afford to buy shares.11 Compared to eighteenth-century bills of credit, corporate money creation also encouraged a different relation to public spending—one that emphasized an idea of money as a scarce quantity rather than an enabling institution. If a governance body needed to borrow from for-profit banks, public spending seemed to became a problem rather than a solution for money scarcity. For instance, during a debate about the renewal of the charter of the Bank of the United States, members of the Pennsylvania state assembly countered bankers’ claim that such a bank was useful as a lender to the federal government: “Too great a facility in borrowing often leads to unnecessary expence, to debts and bankruptcy” (Pennsylvania House of Representatives 1810–11:69). In a context of corporate money creation, lawmakers considered monetary expansion driven by public debt to be in the interest of “monied men.” The triangle of legislatures, banks, and money users also encouraged what the first director of the Bank of

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North America, Thomas Willing, considered a mystification of banks. In a letter to the directors of the Bank of Massachusetts, he wrote that the “world is apt to suppose a greater mystery in this sort of business than there really is.” “Perhaps it is right that they should do so,” he added, “and wonder on” (quoted in Bodenhorn 2003:131). In times of crisis, the new division between bank currency creators and their users led to resentment against banks. But while before the Constitution moral economies had prompted people to advocate for public currency and other forms of debtor relief, possibilities at the state level were now limited.

Hard Times and the Limits of State-Level Relief Despite its name, the Panic of 1819 was a great depression that lasted for a decade (1815–25).12 There were no official unemployment statistics, but estimates range from hundreds of thousands to several million when the country’s entire population was nine million. In some cities, half of all waged workers were let go. In western cities like St. Louis, half of all businesses closed, and one-third of the population left town. Eastern farmers typically owned their property, but those in the South and West were often in debt and risked losing their land. Rural workers ran off and attempted to cultivate the land by themselves to survive (Browning 2019:7–8, 21). While the reasons for this catastrophe were complex, many money users blamed banks. Eager to make a profit, these had been too liberal in extending credit. When the downturn came, they demanded repayment of loans. In turn, bank debtors who were creditors of other actors demanded repayment of a liability owed to them, setting off a chain of bankruptcies at a time when debtors’ prison was still common. The Second Bank of the United States, the largest and most visible bank, and the only one that operated across the national territory, had taken part in this pattern, and critics singled it out (Browning 2019). State legislatures attempted different types of debtor relief, including minimum appraisal and stay laws. Minimum appraisal legislation mandated that debtors’ neighbors would determine a “fair” price for a property below which no one could purchase it. Stay laws required creditors to

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either accept nonlegal tender state bank currency at face value or consent to being repaid later. But money users were puzzled about what to do with banks: Were banks and their paper currency the solution or the problem? Was the problem, at its root, that banks were no longer paying specie, and should legislatures suspend their charter if they failed to redeem? Or was it preferable to move in the other direction and allow them to suspend convertibility altogether? This question divided popular groups (Browning 2019:262). If banks were to blame for the crisis, and money users wanted to turn against these for-profit money creators, how to do so in the absence of a licit public option after the Constitution? Many Western states restrained banking activities and, despite the constitutional prohibition, established public or semipublic currency creation mechanisms through state-owned banks or public loan offices (Browning 2019:262). Because it became the subject of a landmark Supreme Court ruling, the Missouri loan office is the best-known instance of state-level public currency creation during this depression. Missouri’s loan office was almost identical to its colonial-era predecessors: it issued currency against real property, with an upper limit for each borrower. The state government supported its acceptance by making it tax receivable and requiring civilian and military officers to accept it in payment of salaries. Notes were receivable in payment of salt (a state-owned business), and ferry operators had to accept them as well (McCulloch 1914:7). But one debtor of the loan office refused to repay, arguing that the notes were unconstitutional. In Craig v. Missouri (1830), the Supreme Court sided with him. Years before, the courts had ruled the Missouri stay and minimum appraisal laws unconstitutional. Because of these rulings, “the relief movement . . . . collapsed” (Browning 2019:262). The Supreme Court prohibited state-level relief, and Congress did not use the powers the Constitution had granted it. Federal lawmakers did not pass bankruptcy legislation, although the Constitution empowered it to do so (Browning 2019:7). And in a deep crisis, it took the secretary of the Treasury an entire year to compile a report in which he rejected the use of Treasury notes (Browning 2019:128–29, 257). US Treasury currency would not have been a novelty: during and after the War of 1812, Congress

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had authorized the Treasury to issue notes that circulated, sometimes at a premium (Kagin 1984). In the absence of concerted public action, merchants, hotels, and other firms issued shinplasters, unauthorized pay tokens at the very bottom of the currency hierarchy. Shinplasters were common throughout the antebellum era in regions without banks or in states that had outlawed smalldenomination bank notes, and they flourished in situations of crisis such as the Panic of 1819. Most shinplasters were unreliable, and money users passed them on as quickly as they could. They also considered them a public good. Money users experienced shinplasters and lower-level bank money as increasingly indistinguishable: sometimes shinplaster issuers reliably redeemed them in specie, and in some communities people preferred local but unauthorized shinplasters over the notes of a legal but unknown faraway bank. There were also municipal shinplasters receivable for local taxes, and money users preferred municipal over private currency (Greenberg 2015:61, 62, 75; Greenberg 2020:18). In sum, during and after the Panic of 1819, there was no viable institutional channel for money users to demand public monetary relief given the constitutional limits to state action and federal unwillingness to reshape monetary design. In the institutional context the Constitution had created, there was no conduit that could translate popular demands into public currency creation—no moral economy of money could express itself in governance practices. Although state, municipal, and private actors attempted to issue currencies to bridge the crisis, the federal government—relatively shielded from settler democratic pressure—did not create currency, failed to pass a federal bankruptcy law, and ended monetary relief efforts such as the Missouri loan office on constitutional grounds. Neither did people have a shared language to make sense of hardship other than blaming the victims. Political and religious discourse blamed unemployment on individual moral failures, and the only form of assistance for those out of work was imprisonment in workhouses while legislatures rejected other forms of public support (Browning 2019:272–77; Lepler 2013). In this context, the Jacksonian monetary critique promised to make widespread hardship intelligible as part of a process that was already at

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the center of public attention: corporate money creation. Jacksonians articulated a perspective that appeared to be grounded in working-class life and in a rejection of the monetary status quo. Explaining impoverishment without blaming victims, Jacksonians argued it was the inevitable result of corporate money creation.

“Producers” against Banks Jacksonians divided society into two groups: producers and nonproducers. “Producers” were wage earners, smallholders, and artisans, while “nonproducers” were large capitalists, merchants, and bankers. Making a living out of an “unproductive” activity meant stealing from “productive” people (Meyers 1953:9; Freyer 1994:4–5; Greenberg 2008:52–54; Huston 1998:225). Bankers epitomized the “unproductive” sector because they could “grow rich without labor” (Gouge [1833] 1968:43; see also Wilentz 2005:357). William Gouge, the best-known Jacksonian monetary critic, wrote that banks made money by issuing their debt.13 Bank notes were the issuing institutions’ debt because they promised to redeem them in specie—they were a banks’ promise to pay higher-level money. But unlike the debtors of banks, who paid interest, banks received interest for their debt—a status banks owed to unearned privileges including charters and tax receivability (Gouge [1833] 1968:85). The productive population (“the body politic”) paid the banks for currency creation, and a systematic transfer of wealth from the nonbank to the banking sector occurred via interest payments (84). For Gouge, paper money corporations were the antithesis of a republic of settler smallholders. Just like the European feudalism colonists had fought to leave behind, banks institutionalized inequality and expropriation. In Britain lords received arbitrary privileges, while in the United States bankers did. The result was identical: “The many live and labor for the few” (Gouge [1833] 1968:44). Such fears of an emerging aristocracy were pressing given the tension between the settler ideal of yeomanry and the reality of waged work. An increasing number of settlers who aspired to “independent” status worked for a wage, becoming an employer’s “dependents.” If these wage earners considered themselves cheated, they did not

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see it as a loss of income only: it meant that they were now exploited, and their status changed. From their perspective, they were now in a situation of subordination similar to that of enslaved people (Glickman 1997:11). For Jacksonians, the “artificial inequality” that bank money creation introduced (Gouge [1833] 1968:90–91) shaped social life well beyond the relations between banks and their debtors. It deprived all nonbankers of the possibility to prosper and to connect a difficult present to a predictable future. Men could not save to prepare their children for adult life and themselves for old age, or pass wealth on to the next generation (90–91). Men couldn’t earn enough to support their families; they died early and without leaving savings. As a result, women had to complement men’s earnings. This situation was an insult to the “great body of the American people” because it denied money users their “natural right of acquiring property by industry and economy” (84, emphasis in the original). The banking aristocracy’s arbitrary privileges explained almost all social ills, including luxury consumption amid poverty and inequality among professionals. Because this aristocracy created undue demand for extravagancies, opera singers and makers of gadgets for the rich did well while people whose skills were not geared toward luxury production remained in forced idleness and poverty. In addition, the lawyers and physicians chosen by bankers became an aristocracy within their professions, and everyone desired their services because middling and poor people looked up to the wealthy and their tastes: “An aristocracy in one department of society, introduces an aristocracy into all” (Gouge [1833] 1968:93). Bank privileges also hurt waged workers more directly, critics argued. Jacksonians claimed that limited liability protections led to reckless note issue and risk-taking at the expense of the public, who were left with little assurance that they could redeem their notes in specie. Employers often paid waged workers in depreciated notes they had bought from insolvent banks or speculators. Workers had little choice but to accept them at face value, while shopkeepers or landlords took them at a discount. Workers lost purchasing power while original issuers, speculators, and employers profited (Greenberg 2008:56–57; Greenberg 2020:56; Henkin 1998:146; Dillistin 1949). In response, Jacksonian critics like the New York labor leader William Leggett (see, e.g., Leggett 1840) argued that a specie-only

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monetary system was the only way of protecting workers against extortion by bankers and bosses. In this context, Jacksonians began imagining a world of equal money users without money creation, a situation in which acquisitive individuals engaged in peer-to-peer exchanges without public or private monetary governance.

The Romance of Unmediated Exchanges For Jacksonians, bankers were illegitimate middlepersons who stood between producers, exacting tribute from them even if all workers wanted was to exchange the fruits of their labor and save for the future. Removing banks, they claimed, would lead to an influx of gold and silver that would enable exchanges without corporate bank currency (Dorfman 1947:608; Gouge [1833] 1968:103). Unjust monetary institutions did not need to be replaced by just ones—their elimination would lead to a just system. Jacksonians imagined the ideal society as one that was constituted through unmediated individual exchanges, untainted by government and bank intermediaries.14 They imagined a society from which monetary governance had disappeared. Gouge claimed that “in solid money countries, in all sales of goods for cash, the products of labor are exchanged for the products of labor. The product of the miner’s labor, is made the instrument for circulating the products of the farmer’s and of the manufacturer’s labor. . . . The exchanges on both sides are of articles possessing inherent value— articles in the production of which labor has been bestowed” (Gouge [1833] 1968:56, emphases in the original). There is no intermediary: value stems from labor, and everything valuable can be exchanged against something else. When Jacksonians said that specie was like food, they meant it literally: both were products of human labor, of use to humans, that people could swap. Such comparisons recur in other writers’ texts: for instance, the editor of the influential Niles’ Weekly Register stated that “a quantity of potatoes worth $100, is just as valuable as $100 in gold” (Niles’ Weekly Register 1834, emphasis in original).15 The difference between money and potatoes was that the former was a more “convenient instrument of valuation” and therefore was “the tool of all trades” (Gouge [1833] 1968:15, 115).

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Taking the critique of bank money creation as a starting point, hardmoney Jacksonians argued that all forms of monetary agency could (and should) vanish as money entered the ranks of commodities. If commodities—defined as whatever people can buy and sell—are things without politics, no one can tamper with them. This perspective has silencing effects: once people think of money as a quantity of things, they no longer need to understand, and attempt to shape, monetary institutions. Indeed, the very relation between monetary users and money-creating institutions disappears, as does someone’s status as a money user: everyone seems to becomes a commodity producer who swaps the product of their labor with other producers, and no one has any degree of monetary agency. From this perspective, the only legitimate political question is how to eliminate or at least limit currently existing monetary institutions so that the romance of unmediated exchanges can come true. Specie promised safety: Gouge claimed it had almost unchanging value, which meant that individuals could reliably save: “Time will not corrupt his treasure or lessen its value.” People could now connect the present and the future: they could save for old age and pass money on to their children (Gouge [1833] 1968:16, 98). Households would no longer need to stock provisions that could spoil: because the purchasing power of specie was stable, people could count on it to buy whatever they wanted, whenever they wanted (16). To illustrate an ideal situation, Gouge depicted an idyll of small producers in a faraway land. In Flanders, he claimed, every farmer household possessed a small gold reserve that was used to pay debts (115). Any household’s specie reserve exceeded its immediate consumption and was replenished whenever possible. These imagined gold hoards were like the householding practices of “all prudent families in rural districts who have on hand a greater quantity of flour and other necessaries, than is required for the use of the twenty-four hours” (115). Not all antebellum monetary critique was Jacksonian. But almost all antebellum actors who criticized corporate money creation voiced their frustration in idioms that resembled the romance of unmediated exchanges. While coined silver or gold was a typical way of articulating this romance, working-class writers offered other possibilities, including labor notes. “Time stores” emerged in cities. Money users could take commodities to

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these stores and exchange them for other commodities considered of equal value, as measured by the time or “pains” taken to produce them. They could also get an equivalent amount of labor notes (known as “time currency”) (Wilentz 2000:165; Dorfman 1947:671–73). The promoters of time stores and labor notes challenged both corporate banks and the idea that specie was the only money, and they attempted to establish alternative and more democratic monetary institutions. But they also participated in the romance of unmediated exchanges. Money was no longer a forward-looking governance device that could create just relations and stimulate production, as it had been in the eighteenth-century moral economies. Instead, money had become a means of exchanging alreadyexisting commodities. Promoters of labor notes and Jacksonian critics like Gouge shared the idea that exchange was the primary function of bank currency, a function that needed to be replaced by other arrangements.16 Advocates of labor notes and specie converged because both stipulated that money was a store or an expression of something workers had previously created. Both were “just” measures of a commodity, untainted by a third party and free from arbitrary “interference.” Both seemed to be unproblematic means of exchange and stores of value that did not rely on arbitrary proclamations and human-made institutions but were grounded in labor itself. To describe these imagined two-way exchanges as fantasized romances is only a slight exaggeration. A poem published by an advocate of labor notes “Time, peerless time,” “forms the medium of trade. . . . By a medium of Minutes, this traffic sublime / Displays an Elysium among us begun; / Where labor buys labor for that sum of time” (Dorfman 1947:672). The presence of third parties could only spoil the spontaneous and just exchanges that constituted a society of producers. Some writers pushed the logic of the two-way romance to its limits: for them, even debt enforcement laws were unnecessary because nonpayment would lead to harming one’s reputation, a mechanism that would ensure payment more effectively than laws (Dorfman 1947:676). In antibank Jacksonianism and other strands of antebellum monetary critique, the always- and necessarily political character of money disappeared from view, and this disappearance became the norm and the ideal. On the basis of the notion that an ideal society is not constituted politically

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and emerges through individual exchanges, writers declared that they wanted a money without politics, a neutral medium of exchange that enabled just and unmediated peer-to-peer relations between producers. Born of the rejection of corporate banks and the desire for a reliable money, specie became a potent symbol that enabled money users to imagine a world without bankers and without the exploitation of settlers by other settlers. Rejecting bank money creation, they dreamed of a world without money creation in which settlers could only be acquisitive individuals able to project themselves into the future via an unchanging money. Individual effort, deposited in stable money-things, would enable future purchases. (In contrast, the eighteenth-century moral economists I discuss in chapter  2 imagined this bridge between present and future as consisting of public vigilance and attention to an always-emerging governance system.) When they advocated a neutral, self-effacing money, these money users denied the always-partial, always-political process of monetary governance and took part in a process of monetary silencing. Monetary institutions there must be, institutions require decisions about their design, and decision-making is a political process.

Bank War Coalitions Political practice informed by the romance of unmediated exchanges did not help bring about anything close to the fantasy of a specie-only society, nor did it end banking. In several states, established bankers supported specie-only rhetoric to restrict entry and limit competition. They could count on the support of Jacksonians who wanted to curb the growth of banking as a first step toward ending all banking. In such unlikely alliances, Jacksonians opposed to the privileges of chartered banks helped bankers who attempted to protect this very privilege (Hammond 1962). And when state legislatures prohibited banking, as in Iowa (Erickson 1969), bank notes did not disappear, but quasi-banks emerged, and banks from across state lines provided the circulating medium while unauthorized shinplasters complemented these currencies (Greenberg 2015:59–60). The controversy about the rechartering of the Second Bank of the United States (SBUS) is the most famous example of Jacksonian banking politics. In the early 1830s, the federally chartered corporation, whose

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charter expired in 1836, became a focus of national politics. Many money users blamed the SBUS for the depression we know as the Panic of 1819. But state bankers across the country also opposed renewal because the SBUS used state bank notes in its possession to discipline those banks’ note issue practices, and an end to the SBUS meant more liberal and profitable credit extension. For entrepreneurs in need of credit, this was good news (Wilentz 2005:363–64). Although Jacksonians like Gouge used a specieonly rhetoric, key figures in President Jackson’s entourage were not enemies of all banks, only enemies of the SBUS, and supported state banking. Some of them were entrepreneurs who favored easier access to credit, and others had worked as bank directors (Hammond 1962:329). Taney, Jackson’s secretary of the Treasury, stated that the business of banking was so beneficial that it ought to be “open as far as practicable to the most free competition and its advantages shared by all classes of society” (quoted in Hammond 1962:338). From this perspective, the Jacksonians’ assault on the SBUS was an intervention in the politics of state banks. But in their crusade against the SBUS, pro-bank Jacksonians could count on specie money advocates who believed in the romance of unmediated exchanges. When Congress voted to renew the SBUS charter, Jackson vetoed it. In his veto message he did not openly favor any mode of money creation or condemn all banks but concentrated on attacking the SBUS, which helped him unite his hard-money and his state banker allies. Condemning all corporate bank money would have alienated state bankers, as well as those entrepreneurs interested in easy credit. He united those who were against all banks—the “hards”—with those who had a distinct, expansionist, prostate bank vision (Jackson 1832). The historian Sean Wilentz (1982:56–57) calls the veto message the first great example of “mass politicking,” the conscious creation of a heterogeneous alliance by a class of professional politicians at the national level (see also Mihm 2013; Rana 2010). Compromises and tensions had also marked the politics of bills of credit. But in contrast with politics informed by the romance of unmediated exchanges, the politics of bills of credit—Treasury money politics— enabled a more direct connection between money users’ everyday life and money creation that was informed by decades of settler democratic practice, not a seemingly timeless ideal removed from the realities of money

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creation. Those who participated in the politics of bills of credit could not be manipulated as easily as money users who believed in the romance of unmediated exchanges.

The Independent Treasury After Jackson vetoed the rechartering of the SBUS, he was eager to weaken the institution immediately. To do so, he instructed the Treasury to remove the federal deposits from the SBUS and distribute them to selected state banks that were close to the administration. Nicknamed “pet banks,” they promised to pay specie on demand. When in 1837, panic struck again, these banks “betrayed” the government by suspending specie payments. From a Jacksonian perspective, they had “abused” the government’s deposits to extend credit too liberally. In the same years, Locofoco activism became a visible part of New York politics. For this group of hardline Jacksonians, corporate bank money meant being cheated of their rightful earnings by an inflationary currency and by employers who forced them to accept depreciated money. They held public meetings but also destroyed foodstuffs in stores. Like other Jacksonians, they called for an end to all banking. State bankers were alarmed. President Van Buren could not repudiate the Locofocos because it would have meant losing his credentials as a true follower of Andrew Jackson, an important part of his political appeal (Degler 1956; Leggett 1840:43; Wilentz 2005:237; Hammond 1962:495– 96; Lepler 2013). The Independent Treasury was a way of pleasing hardliners without challenging state banks (Hammond 1962:496). It was an institution that enabled the federal government to receive and disburse only specie, which was to be deposited in government-owned and -operated subtreasuries (Kinley 1910). Since paper-issuing banks were illegitimate, the government should not support them by placing public funds at their disposal and by accepting their notes in payment of public dues. Therefore, Independent Treasury officials were prohibited from depositing federal funds with banks. Taxes, duties, and receipts from sales of federal land were payable in coin only, and the government would settle with its creditors and suppliers exclusively in specie. Jacksonians celebrated the Independent Treasury as a

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victory over the paper money aristocracy, even as a “second declaration of independence” (Wilentz 2005:498, 437). In his History, Gouge ([1833] 1968:8) had already declared that minting was merely a way of certifying “the weight and fineness of the piece,” not an act that created money. In a pamphlet in which he advocated for an Independent Treasury, Gouge claimed that under a pure specie standard, legal tender laws would be unnecessary because no one would refuse gold or silver: “It will be quite unnecessary to declare by law, that the new gold coins shall be a tender in payment of private debts” (109, emphasis added). With good reason, Gouge did not add that it would be unnecessary to proclaim that specie would be accepted as legal tender for public debt. As long as there is a central actor that levies taxes, something needs to be declared legal tender for tax debts. Any such choice for tax receivability can turn pay tokens into generally accepted currency (Wray 1998). And any such choice is a choice to the exclusion of others. It might not have been necessary to declare that specie was legal tender for private debt, but the declaration that it was receivable in payment of debts to the federal government was necessary because a government has to relate to money users through currency to make and receive payments. To do so, it has to declare which category of tokens it will accept. Gouge recognized the role of taxation in money creation processes, including for specie: “The United States government is the greatest capitalist, and the greatest dealer in the country. It has in one year sold twenty million dollars’ worth of real estate.  .  . . Its income from customs alone amounts in some years to twenty million dollars. Let such a capitalist and such a dealer decline receiving and paying bank paper, and no small part of the people will begin to make the proper distinctions between cash and credit” (Gouge 1837:15, emphasis added). For him, the Independent Treasury was a large-scale pedagogical device that created a distinction between “real” money and “mere” credit and instructed individuals about this distinction.17 The Independent Treasury simultaneously promoted the federal government’s erasure from the monetary governance regime it was part of and furthered the appearance that money was a mere commodity.18 On the one hand, government action disappeared from view because it seemed

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to accept only that which was already money. On the other hand, it could do so only because it presented money as a commodity. Because the state no longer “arbitrarily” decided what it received, money users could imagine that state and private actors related to each other on an equal footing. Given Jacksonians’ claim that the federal government was passive relative to money creation, it seemed only logical that it needed to balance its budget and pay its debt, just like a household. In 1835, the Jackson administration paid off the entire federal debt (Savage 1988:99–105).

Jacksonian Monetary Controversies Antebellum political conditions militated against moral economies of money. The Constitution had prohibited state-issued bills of credit, and federal authorities, relatively insulated from electoral pressure, hesitated to step in. It was far more difficult to organize moral economic pressure at the national level than at the state level. In addition, corporate bank notes and the promise of specie convertibility encouraged a fixation on specie while making paper money appear fraudulent. Finally, monetary critique defined workers as a group that engaged in manual labor and exchanges with other producers but, unlike banks, did not take part in “cheating” by creating money. In this context, monetary critics took part in silencing forms of monetary agency. Eighteenth-century moral economies had attempted to constitute society through monetary institutions in a way they deemed just. The logic of the Jacksonian critique, in contrast, centered on a romanticized form of economic life that, consisting of individual exchanges only, was unmediated and not constituted politically. Sidestepping fundamental questions about the constitution of social relations through law and governance, actors engaged in a boundary-drawing exercise that focused on the “correct” articulation of the public and the private, and on attempts to disconnect governance from money creation.19 A rejection of governance came to stand in for an engagement with how to organize institutions, and the fantasized disappearance of the state replaced a democratization of the economic. The substance of politics—the openness of human institutions,

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the structuring of the relations that constitute society—disappeared from view, and a controversy over how to instantiate the abstractions of “state” and “private sphere” took its place.20 But the fixation on the romance of unmediated exchanges did not last long. In the first years of the Civil War, a wave of greenback dollars voted into existence in Washington flooded the Union and—after war’s end—the country. The federal government once again clarified its role in money creation and created a symbol around which moral economies could flourish: greenback currency, a central governance mechanism of the Civil War. At the height of the currency controversies, a journalist lamented that “the money circulating among the people is a powerful educator. It teaches either truth or falsehood.” The Civil War’s Treasury currency prompted “large numbers of unreflecting persons to believe that the government can make money” (White [1895] 1908:150–51).

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IN T HE A N T E BE L L UM E R A , J A C K S O NI A N S P R O M O T E D the idea that the govern-

ment’s role relative to money could be passive as long as it received and disbursed only specie. In this context, money users did not develop an experience of public monetary agency. The currency of the Civil War, in contrast, enabled such an experience. The very existence of greenbacks, a new currency that had enabled victory over the Confederacy, pointed to the body with the most far-reaching monetary powers: Congress. It also showed to money users that the federal government could deploy its monetary agency to mobilize resources on the scale required to defeat the defenders of slavery. In addition, when Congress began chartering a new type of federally chartered financial institutions, national banks, their currency— known as blackbacks—taught money users that there were at least two distinct, and potentially rival, monetary design principles: Treasury currency (greenbacks) and corporate currency (blackbacks). Even though lawmakers thought that Treasury currency was an emergency measure limited to the conflict’s duration, they once again placed the governmental power to make money in plain public view. In this chapter, I reconstruct how Civil War finance enabled moral economies of money. The road from greenbacks to moral economies was not direct: at war’s end, no major constituency or party defended Treasury 83

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money in principle. After all, Jacksonians had rejected all forms of paper money. But by the last decades of the nineteenth century, debates about the war debt and the postwar monetary design had created widespread awareness that all money was a creature of law and politics that constitutes social life.

The Pedagogical Effects of Civil War Finance When it established a monetary design to mobilize resources for war, Congress did so in four ways: it issued Treasury notes (greenbacks), chartered national banks that issued notes (blackbacks), emitted bonds whose interest it promised to pay in specie, and issued IOUs to suppliers. These four ways of financing the war taught money users different lessons, shaped postwar controversies, and enabled moral economies of money. Therefore, it is useful to look at them one by one. 1. Greenback lessons. At the beginning of the Civil War, the Lincoln administration turned to state banks for funds. When banks’ specie reserves ran out, war mobilization required a different monetary design, but Congress was reluctant to authorize currency without promising to exchange it for specie. Critics insisted that inconvertible money would cause inflation, hurting waged workers, but they also raised doubts about its constitutionality.1 In response, supporters emphasized that only wartime conditions led them to recommend inconvertible Treasury currency (Mitchell 1903:45–68).2 Despite the urgency, lawmakers debated its constitutionality for several weeks before they instructed the Treasury to issue greenbacks, a currency they declared legal tender for private debts and taxes owed the United States. Throughout the war, the government issued approximately $450 million greenbacks. From money users’ perspective, this was a radical change: they now had a paper currency that they could use to pay taxes, that would circulate across the northern states, and that private creditors had to accept. They also learned that the government could spend money into existence. 2. Banking lessons. Congress also established a new category of federally chartered banks with note-issuing privileges. These national banks drew criticism that prefigured the moral economies of the postwar era.

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For instance, the chairperson of the House Ways and Means Committee, Thaddeus Stevens, would have preferred to issue more Treasury currency instead of chartering banks to avoid enriching the financial sector (Trefousse 1997:22). But other lawmakers argued that national banks were necessary to provide additional currency and to create demand for government bonds. In the end, Congress allowed national banks to issue currency against government bonds they deposited with the Treasury.3 National bank notes, known as blackbacks, were not legal tender for private debts, but federal tax acceptance supported their acceptance, in addition to a provision that any national bank had to accept its peers’ notes at face value (Hurst 1973:41). While greenbacks taught money users that the Treasury could issue high-level legal tender money, a new category of bank currency reminded them that banks were also creatures of the government. 3. Public debt lessons. The Union issued bonds to money users and promised to pay interest in specie to make them attractive to potential investors.4 The provision that one group of money users who had claims on the government—bondholders—would receive a higher-level money than soldiers also led to criticism that prefigured postwar moral economies. Thaddeus Stevens, for instance, argued that this provision created “two classes, the people and the bankers” (Trefousse 1997:122). In the massive bond drives through which promoters marketed these bonds to a broad public, they highlighted that bond owners would receive interest “IN GOLD” (quoted in Oberholtzer 1907:235), teaching millions of money users that the federal government could pledge to pay off its debts in different ways. 4. Lessons about circulating public debt. Besides bonds, the Union issued certificates of indebtedness to suppliers, IOUs that circulated as quasimoney (Friedman and Schwartz 1963:17).5 These monetary instruments lent themselves to an understanding of currency as circulating public debt. In addition, money users learned that the federal government could issue different debt instruments and allow the public to exchange one for the other. For instance, they could purchase bonds with greenbacks and receive interest in specie.6 They could also sell bonds for greenbacks. Together, these lessons showcased the federal government’s capacity to mobilize resources by issuing money, as well as the malleability of monetary design and its connection with public debt.

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By the end of the Civil War, the federal government had transformed the money supply. State bank notes had almost disappeared,7 and greenbacks and blackbacks made up 90 percent of the money supply (Friedman and Schwartz 1963:20, 26). The disappearance of state bank notes helped remove the odium of unreliability from paper currency: While the uncertain acceptability of antebellum state bank currency had encouraged Jacksonian claims about the inferiority of “rags,” federal tax acceptance and legal tender laws made the Civil War currencies reliable. Although greenbacks depreciated,8 they were convenient because the constant concern about the value of a bank note had disappeared. Greenbacks and blackbacks were also uniform and, after the Union’s victory, national. A businessman and politician noted that before the war, “the country was flooded with all kinds of bank-bills, good, bad, and indifferent. . . . Now we have the best paper currency this country ever had” (Dodge 1880:43, emphases in the original). But at war’s end, few politicians defended Treasury currency the government did not promise to convert into specie. All major political actors assumed that the federal government would “resume” specie payments for greenbacks. “Resumption” did not mean that the Treasury would recall all greenbacks—it only meant the Treasury would promise to convert them into specie on demand. To do so, the Treasury needed to keep sufficient specie at hand. If its specie reserve fell below one hundred million, customarily (but not by law) deemed necessary to ensure redemption, it needed to issue debt to finance gold purchases, ensuring transfers to bondholders. To prepare for resumption, the amount of outstanding greenbacks needed to be reduced to limit the need for specie reserves. Withdrawing greenbacks from circulation meant removing liquidity from economic life. With resumption, the federal government once again appeared to reduce itself to a mere money user who issued debt it promised to convert into “real” money that preexisted it: specie. At first, a large congressional majority supported Treasury Secretary McCulloch’s efforts to withdraw greenbacks (the House voted 144 to 6 in favor). But in the context of a recession and war debt controversies that became a “national obsession” (Savage 1988), it soon became clear that

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inconvertible greenbacks would not vanish from public life as easily as they had entered circulation during the war.

Moral Economies and the War Debt When the Confederate government collapsed, bondholders lost their claims on it (Morgan 1985), but southerners demanded that the federal government assume responsibility for the Confederate war debt, and some called for a repudiation of the Union’s war debt. An assumption of southern and a repudiation of northern war debt never came close to being enacted (Unger 1968:73), but debates raged about how to discharge the northern war debt. While northerners, and bondholders in particular, saw a repayment of the interest and principal in specie as almost sacred and enshrined it in a constitutional amendment, southerners argued that the government should discharge the war bonds in greenbacks, the currency with which their owners had purchased them. Money users who had not seen specie in years feared the prospect of having to pay for the Union’s debts in gold. Money scarcity in southern and western states would make paying specie taxes even more difficult. The nation’s financial infrastructure was concentrated in the Northeast, the country’s creditor region. The South and West, conversely, were debtor regions with a smaller per capita money supply (Barreyre 2014, 2015). These war debt controversies unfolded as part of struggles about Reconstruction, the Republican project of reshaping southern labor relations and politics in a way that included Blacks as full citizens. While large numbers of southern whites but also Wall Street actors (Foner 1988:220) attempted to integrate formerly enslaved people in subordinate and exploitative ways, proponents of Reconstruction tried to ensure their economic progress and political participation. Northern Democrats who opposed Reconstruction, such as Henry Clay Dean, supported paying off the war debt in greenbacks. Dean, who had been imprisoned because of his opposition to the war, demanded the payment of the Union debt in greenbacks. Democratic arguments for payment of the debt in greenbacks were intermingled with racism: Dean (1869:247) claimed that the requirement to pay

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the US war debt in specie was tantamount to an enslavement of whites by other whites, accusing an opponent of having morphed “from a defender of the negro slave into the oppressor of the white free man.” Other tracts, like the Democratic journalist “Brick” Pomeroy’s Soliloquies (1866), suggested that freed slaves, together with northern bondholders, were living in luxury at the expense of taxpaying widows and orphans. But opponents of Reconstruction like Dean did not offer a principled defense of Treasury currency. Dean despised greenbacks, which he thought unconstitutional and considered one of the “crimes” of the Civil War. It was a “stupendous fraud, which wrought great injustice upon its victims.” But common people had learned to deal with depreciation (Dean 1869:381), and so should bondholders. Either greenbacks were legal tender, or they were not: “If it was a legal-tender in the purchase of bonds, so it is a legaltender in the payment of bonds. . . . That the laborer who works in navy yards and forts, and the soldier who perils his life in battle, shall be paid in lampblack and rags, and the bankers, bondholders, usurers, extortioners and brokers, shall be paid in gold and silver bought up by the greenbacks . . . is an offence against justice” (Dean 1869:247). Payment in higher-level money should not reward those who had purchased bonds with greenbacks. Dean’s arguments were popular: he claimed to speak to audiences of thousands of money users—supporters of both parties—daily, and he had a heated public exchange with the prominent New York journalist Horace Greeley (Dean 1869). Such quasi-moral economies of money rejected greenbacks in principle but considered them just under certain conditions. Such ideas became even more prominent when the Ohio senator George Pendleton attempted to get the Democratic nomination for the 1868 presidential election. Like Dean, Pendleton was an antiwar Democrat who had opposed greenbacks. Now he proposed to retire the “5-20s,” a common type of war debt that national banks had purchased and deposited with the Treasury to back their notes. Interest on these bonds was payable in gold. Pendleton proposed that the Treasury buy the 5-20s with newly issued greenbacks. The banks would withdraw the notes they had issued against 5-20s, while the Treasury would add an equivalent amount of greenbacks to the money supply, offsetting the withdrawn corporate currency. Issued

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by the federal government, greenbacks were a “cheaper” option than national bank notes because they did not require interest payment in specie (Destler 1963; Unger 1968:81–83, 198). This proposal reminded money users that bank currency could be swapped for Treasury currency. Republicans realized that a further withdrawal of greenbacks would cause electoral losses, and Congress prohibited it (Barreyre 2015:130). Now negative moral economies—forcing paper currency on northern bondholders— were being replaced by positive ones: Pendleton promoted ideas about a just monetary design. Pendleton’s plan had considerable appeal, and he was the initial frontrunner in the Democratic primaries. During the campaign, the war debt was a central theme for the Democrats. One plank on their platform demanded “one currency for the Government and the people, the laborer and the officeholder, the pensioner and the soldier, the producer and the bondholder.” Of all the planks, this one provoked the loudest cheers at the convention (Lives of Horatio Seymour 1868:57). Democrats continued to frame the money question in relation to the war debt, not as a question about the principles of just monetary design. The Democratic plank did not mention greenbacks or the idea that money was a public good—it only emphasized that all creditors should have to accept the same currency.9 The war debt and the currency question split both parties along sectional lines. While hard-money Democrats opposed Pendleton’s plan and prevented him from running for president, the money issue also split Republicans along sectional lines, with the West in favor of greenbacks and the Northeast in favor of “hard money” (Barreyre 2015). Some Radical Republicans (such as Thaddeus Stevens) agreed with Pendleton’s plan in principle because they opposed specie payment on the interest of the public debt (Trefousse 1997:122). Even those groups that wanted to return to specie payments as soon as possible worried about shocks if greenbacks disappeared from circulation too quickly. They were united only in their categorical opposition to creating additional greenbacks (Bensel 1990:311, 328; Unger 1998). Soon after winning the election, President Grant declared that paying bondholders in greenbacks was out of the question (Unger 1968:43), and in 1869 Congress mandated that the Treasury repay all public debt in specie

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(Public Credit Act). But despite this defeat for greenbacks, the war debt controversies had established a connection between money users and legislatures, between electoral process and money-creating institutions, that had not existed before the war. Money users had learned that different options for discharging the war debt—specie or greenbacks—shaped the structuring of power and wealth. And because a sizable amount of the currency they used in everyday life was the war debt, they learned that public debt is public currency. The difference between greenbacks and other antebellum Treasury currencies like the one that financed the fight against British forces in 1812 was that the war debt, the legacy of a bloody internal conflict, caused tensions that encouraged money users to learn about money-creating institutions. These tensions, and the quasi-moral economies that accompanied them, not an advocacy of greenbacks, kept the wartime currency in plain view of the public. During the depression of the 1870s, money users went beyond debates about the war debt and resumption and deployed moral economic knowledge as part of political projects.

Moral Economies in the Depression of the 1870s The Panic of 1873 caused widespread unemployment, homelessness, and hunger. In New York, about a quarter of workers were unemployed (Gutman 1965:255), and wages decreased as railroads failed, railroad construction almost ceased, and coal and iron production declined. Indebted farmers faced falling prices and high interest rates (Barreyre 2011:409). In addition, after 1873, wages and prices declined for over two decades. Greenback moral economies flourished in a context of a militant labor movement, strikes, and brutal repression. During the depression, groups of urban money users who were looking for work, many of them led by Greenbackers, demanded public works in major cities. The recent experience of financing wartime mobilization convinced workers that “their recommendations were not utopian” (Gutman 1965:259). They advanced moral economic projects: financing public works through Treasury and municipal currency. The respectable urban press rejected such proposals, blamed the unemployed for their difficulties,

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and even considered some aspects of the crisis to be positive: it weakened unions, lowered wages, and taught workers their station (Gutman 1965:270; Foner 1988:518). A range of working-class and farmers’ groups emerged that would later converge in a national Greenback Party (e.g., Babb 1996; Painter 1987:27–30, 89). In Washington, the crisis displaced resumption as an immediate priority. Grant’s secretary of the Treasury reissued already-retired greenbacks, and Congress debated many monetary projects, from an expansion of greenback circulation to an immediate return to specie, then passed the so-called inflation bill, which authorized greenbacks and additional national bank currency. Although the sum ($64 million) was small, President Grant vetoed it. Passing this bill would have set a precedent, signaling that the federal government could take monetary responsibility in depressions (Foner 1988:522). Conservatives saw the veto as a triumph, but it almost tore the Republican Party apart and led to a series of Republican electoral defeats across the country. In the South, given that the Republicans had little to offer them economically, whites who had voted Republican returned to the Democratic Party (Barreyre 2015:418). The veto of the inflation bill during a depression was the point at which the Republican Party shifted its identity and “economic respectability replaced equality of rights for Black citizens as the essence of the party’s self-image” (Foner 1988:522). In 1875, Congress passed the Resumption Act, which mandated that the Treasury begin converting greenbacks into specie on demand in 1879. The Treasury was to issue bonds to finance the gold purchases necessary for this purpose. Legally, this act marks the end of the greenback era (Unger 1968; Ritter 1997). But by the time Congress passed the Resumption Act, the war debt controversies, which were also struggles about the postwar monetary design, had already established the conditions for moral economies to flourish. For critics of corporate banks, Jacksonian certainties were a thing of the past, and they shared the idea that currency was a public good that money users could design. The 1875 Ohio gubernatorial race allows a glimpse into money users’ knowledge and concerns. Democrats had nominated an antiresumption candidate, adopted a platform that condemned national banks,

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and come close to an open advocacy of greenbacks—a departure from the national party line. The Cincinnati Gazette warned that voting for Ohio Democrats meant following an irresponsible appeal “to the masses against property and capital” and supporting “communist revolution” (quoted in R. Smith 2008:224). In this context, the Democratic and Republican state executive committees arranged a series of debates between Thomas Ewing, a former Union general who had joined the Democratic Party after the war, and New York’s Republican governor Stewart Woodford. These events attracted national attention. The contestants debated before audiences such as the miners of the village of Shawnee, but also in the state capital Columbus, drawing a crowd of two thousand. Many people had to be turned away for lack of space (New York Times 1875a, 1875b). This debate between a former Union general (rather than a southerner or an antiwar Democrat) and a Republican resumptionist is instructive because both proclaimed their love for this currency and agreed that it had been necessary to save the Union (Woodford and Ewing 1876:13, 29). Because the speakers addressed each other, and because the stenographer noted applause, comments, and interjections, the debate allows a glimpse into money users’ knowledge during a depression, only a few months after Congress had mandated monetary contraction that would destroy a large amount of Treasury notes, an important part of the currency the audience used every day. Woodford, the proresumption New Yorker, mobilized a metallist understanding of money. He argued that the greenbacks, just like antebellum state bank notes, were merely a promise to pay specie, a certificate of indebtedness the government needed to discharge. To illustrate his point, he quoted from a greenback: “‘The United States will pay the bearer five dollars.’ It does not say ‘this is five dollars.’ What is five dollars? Another note? No” (Woodford and Ewing 1876:15). “Five dollars” was specie, and specie only. He then held up a five-dollar and a twenty-dollar note, commenting: “Let me read them and see how you would like to trade: ‘The United States will pay the bearer five dollars.’ ‘The Confederate States of America will pay the bearer twenty dollars.’ Who wishes to trade? Little Phil Sheridan broke the bank down at Five Forks, and its issue hasn’t been good since. [Applause]” (Woodford and Ewing 1876:15).

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Woodford compared a major Confederate defeat with the breaking of a bank, implying that a government was like a private note-issuing institution that could be robbed. “Real” money, specie, would survive bank robberies and military defeats. Antebellum Jacksonians had made similar arguments, and the audience’s applause shows that they continued to resonate with money users. But on a different day, one of Woodford’s examples did not work out as intended. To convince the audience that legal tender paper currency was unreliable, he told the story of a hotel guest who protested against being charged higher prices for paying in greenbacks and reminded the owner that it was legal tender. The latter replied: “When you pay in paper we charge paper prices.” A voice from the audience now interrupted the governor: “Prosecute him for being disloyal. . . . That is what was done during the war” (Woodford and Ewing 1876:92). The legal tender mechanism had become part of everyday knowledge, a legitimate means of mobilizing resources for the war, and refusing to accept public currency at par was treasonous. Woodford’s opponent, the pro-Greenback general Thomas Ewing, conceded that greenbacks were indeed a promise to pay specie and that the government should, at some point, resume specie payments. But unlike interest-bearing government bonds, greenbacks were not meant to be investment vehicles, and money users had accepted them because “the law declared [greenbacks] should perform every office for which money is used”: to pay one’s debts to private parties or the government, and to exchange goods (Woodford and Ewing 1876:30). Therefore, greenbacks did not bear a due date and could be paid off whenever it was in the public interest. Distinct from antebellum state banks, which could be accused of dishonesty if they did not pay specie on demand, the federal government could keep its currency in circulation as long as necessary. When he juxtaposed public and corporate currency, money users’ and corporate interests, Ewing developed a moral economic evaluation of resumption. As part of resumption, Congress had authorized the withdrawal of fractional paper currency and its replacement with subsidiary silver coin. To purchase the silver, the Treasury had issued bonds, and owners of fractional notes could exchange them for newly minted coins. Ewing

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asked: “Has the silver taken its place in your pocket?” (Woodford and Ewing 1876:24). The audience answered in the negative. Ewing explained that the coin’s silver content was worth more as bullion than the coin’s face value. “Treasury pet banks” had bought fractional notes, exchanged them for coin, and sold the silver for a profit abroad. Ewing then discussed a resumptionist writer who argued that grocers and merchants would substitute private currency for the lost fractional notes—advocating a return to shinplasters, the antebellum era’s unauthorized currencies. This was absurd, Ewing argued: Why increase the national debt to replace fractional paper with fractional silver, only to have the silver shipped abroad, and to return to shinplasters? Congress had exchanged a cheap and reliable currency for an expensive and unreliable one, and no one but “pet banks” benefited. Ewing also reminded money users that the destruction of greenbacks had already begun. The Resumption Act provided for gradually replacing greenbacks with national bank notes even before the start of specie redemption in 1879. Whenever a new national bank was established, the secretary of the Treasury could redeem greenbacks to the amount of 80 percent of the new national bank notes. But, Ewing asked, what had happened with the greenbacks? “The columns of the Cincinnati Commercial, of the day before yesterday, will show you. A bulletin from the Treasury Department says that the Secretary of the Treasury burned the greenbacks so ‘redeemed’” (Woodford and Ewing 1876:27, emphasis in the original). Republicans had destroyed “the only free money that the American people now have” to replace it with corporate money. When Ewing referred to the physical destruction of greenbacks, he placed the federal government’s power to make and destroy money in full view of the audience. The former Union general did not mince his words: “We are for open war on this usurpation by private corporations of the sovereign function of making the money of the people” (Woodford and Ewing 1876:34). Ewing’s rebuttal of Woodford shows how Civil War finance and postwar controversies war had transformed the conditions of monetary debate: he met seemingly timeless claims about specie as the only “true” money with detailed arguments about winners and losers, and showed how monetary design choices structured power and wealth.

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In the meantime, the silver issue had entered the political arena. Since the 1830s, silver had not circulated as money because the silver content of a silver dollar was worth more as bullion, and it was unprofitable for mine owners to bring this metal to the Treasury (Leavens 1939:36–37). In 1873, Congress demonetized silver, unnoticed by the public. Since then, however, the price of silver had fallen, and US silver production had increased. Now it would have been profitable to bring silver to the mint. In this context, the demonetization of silver became known as the “crime of ’73.” The silver bloc, composed of inflationists and silver-producing states, advocated remonetization in the form of free silver coinage. Silver was a vehicle of monetary expansion that offered room for compromise. Congress adopted two pieces of legislation that fulfilled some bimetallist demands without granting free coinage. One year before the resumption of specie payments for greenbacks, the Bland-Allison Act (1878) mandated government purchase of at least $2 million of silver per month, its coinage into legal tender money, and the issue of silver certificates without legal tender status. This compromise checked pressure to repeal the Resumption Act (Bensel 2000:376–77). Similarly, the Sherman Silver Purchase Act (1890) mandated the purchase of silver and paper currency backed by it. Both laws expanded the money supply but bypassed the greenback question. After 1879, a variety of pay tokens were in circulation: gold coins, gold certificates, silver coins, silver certificates, blackbacks, fractional currency, and greenbacks, which were now convertible into gold on demand. The changing composition of the money supply was noticeable in everyday life. For instance, after the Bland-Allison Act, silver coin with full legal tender status had entered circulation, and the silver-backed Treasury certificates became “the nation’s pocket money” (Leavens 1939:39). The multiplicity of antebellum corporate bank notes gave way to multiple federally sanctioned and nationally accepted currencies, all of which were connected to legislative decisions, and hence to the electoral process. As popular proposals such as the Ohio Idea had shown, they could replace each other, and they could be exchanged for other government obligations. Hence, the governmental practice of “plugging in” different pay tokens into the monetary system became intelligible once more.

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Even though there were pro-greenback groups in both major parties, they hesitated to address the depression through monetary means in a context in which Greenback moral economies were widespread. Thereby, they enabled movements, unions, and third parties to emerge around the Civil War currency (Barreyre 2011:419).

Greenback Movements, Greenback Parties The Greenback groups that emerged during the depression of the 1870s made public fiat currency a cornerstone of their identity and strategy. Even though much of their political rhetoric (such as the rejection of corporate banks) sounded Jacksonian, they advocated democratic control over public money.10 These money users did not imagine “just” currency as a peerto-peer relation, and they replaced the romance of unmediated exchanges with an institutional understanding of money as governance. For Greenbackers, resumption was an insult to democracy and an artificial limit to it. As the 1880 party platform put it, “The right to make and issue money is a sovereign power, to be maintained by the people for their own benefit. The delegation of this right to corporations is a surrender of the central attribute of sovereignty” (National Greenback Party [1880] 1911:79). Greenback platforms advocated nationalizing money creation and promoted what they called the interconvertible bond scheme. Under this framework, the government would issue Treasury notes that were freely convertible into interest-bearing bonds. If money users needed the money to make purchases or pay debts, they would forsake the interest payment. Conversely, if they did not, they would earn interest (Ritter 1997:98). This scheme once again drove home the idea that government currency and government debt were interchangeable and that the government could remove currency without issuing bonds to purchase specie. Greenbackers fielded presidential candidates and became a sizable force in Congress. In the year before the official start of resumption, they received almost 15 percent of the national vote despite entrenched loyalties to the major parties (Ritter 1997:48). The success of a third party focused on public money creation suggests that large segments of the population

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had become impatient with the two major parties’ reservations regarding democratic control over money, and the major parties’ electoral strategies reflected the popularity of Greenback moral economies. For instance, in 1878 the Kansas Republican Party proposed a compromise that enabled them to appeal to Greenback-inclined Kansans while staying loyal to the national party. While they supported convertibility of the greenbacks into specie (the national party’s position), Kansas Republicans also called for currency expansion (McNall 1988:271). Greenbackers were the bitterest enemies of resumption, but they were not alone, and the Resumption Act came close to repeal several times (Bensel 2000:376–77). Coalitions between Greenbackers and Black Republicans threatened the Democratic Party in the South. Southern Blacks helped establish the Greenback Party at its founding convention (1875), and they were active in state politics throughout the South (Ali 2010:21–22). During Reconstruction, the growth of sharecropping had undermined progress because Blacks depend on whites for their livelihood, tenants were often in debt to the landlord, and the ballot was not secret. After the withdrawal of federal troops that marked the end of Reconstruction, Democrats dedicated to undoing Reconstruction removed Blacks from office through terror and electoral fraud (Ali 2010:17). In Mississippi, the Black Republican J.  J. Spellman ran for secretary of state in 1881 on a platform that promised the protection of civil and political rights, an end to a range of racist abuses, and labor reforms (Ali 2010:13). White Greenbackers, who were not champions of Black rights but at least defended a “free ballot and a fair count,” supported Spellman (Ali 2010:14). This attempt at “fusion” of Black Republicans and Greenbackers threatened the Democratic Party. On election day, a sheriff’s posse attempted to intimidate fusion voters while Blacks attempted to protect them. At the end of this attack on voting rights, “five white men lay dead” while “the number of African American casualties went unreported” (Ali 2010:14). In most states, Democrats pulverized such coalitions, and a Supreme Court ruling that declared the Civil Rights Act of 1875 unconstitutional ended this pattern of alliances (Ali 2010:23).11 Farmers—Black and white—developed more resilient organizations that would enable them to claim more expansive forms of monetary agency.

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Farmers’ Alliances In the deflationary crises of the 1870s, the money question became pressing for farmers: while prices for their crops declined, their debt burden did not, and many of them lost their land. The crop lien system—common in the South—epitomized farmers’ hardship. Under a crop lien contract, the local merchant provided supplies to a farmer in exchange for a lien on the next harvest. Storekeepers kept a ledger on which they recorded the debt and the items purchased. Each fall, farmers delivered their cotton to the merchant and paid the debts incurred during the year. But often farmers could not settle their debt in full and carried a growing balance from year to year (Goodwyn 1976; Postel 2007; Clark 1964:24, 51; Danbom 1995:124–25; Ransom and Sutch 2011). Merchants typically had a local monopoly because the towns were too small to support more than one store, and potential competitors were at a prohibitive distance. Crop lien contracts also barred farmers from dealing with other merchants. Finally, a lien reinforced dependence on the merchant for foodstuffs and consumption goods, as the contract often stipulated that the farmer grow only cotton. The merchant preferred cotton, not only because it was easily marketable,12 but also because a lack of diversification guaranteed purchase of his goods, such as corn and grain from the Northwest. In such a situation, merchants could charge high markups to credit customers. According to one well-known contemporary account, markups for credit were 40 percent compared to cash prices (Otken 1894). Real interest rates were in the 100–200 percent range (Goodwyn 1976). Merchants did 90 percent of their business on a credit basis (Clark 1964:132–33). Merchants also served as quasi-bankers. Farmers avoided carrying cash for fear of losing it (Clark 1964:58). When they needed to make a payment—say, for a doctor’s bill—they sent a note to the merchant instructing him to pay. Likewise, to pay waged workers, they instructed the merchant to transfer credit to them. There were few banks in many regions of the South and West, and many farmers did not use them because they did not trust them (Clark 1964:74, 76) and because higher levels of literacy were required to deal with deposits (Ransom and Sutch 1972. The lack of

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banks, and the prohibition against national banks’ engagement in mortgage lending, further stabilized local merchants’ position of power. Contemporary observers discuss the exploitative character of farmermerchant relations: “It is a covenant to which the parties of the first part are thoroughly organized, thoroughly systematic in keeping accounts, thoroughly acquainted with the cost and selling price of merchandise, and thoroughly informed as to their expenses. The parties of the second part are thoroughly unorganized, thoroughly unsystematic, thoroughly uninformed, as to the prices and as to their ability to pay them, thoroughly in the dark as to what their product will be or its price, and thoroughly in the dark as to their expense account” (Otken 1894:47–48). In addition, most farmers did not keep books and did not even ask how much they owed. Goodwyn (1976:199) reports that a farmer who demanded to check a bookkeeper’s ledger could be considered an agitator, risking expulsion from the county or ending up in custody; that risk increased for those who were Black. Because of these exploitative arrangements, local merchants repossessed farmers’ lands when crops failed and became large landowners. Farmers often continued to work for them as tenants.13 In contexts of debt crisis, declining prices, and a lack of banking infrastructure in the South and West, public money creation held the promise of breaking free from suffocating book credit systems. But moral economic efforts did not begin with greenback-style ideas about money creation. Founded in Texas in 1777, the Farmers’ Alliance first tried to challenge the crop lien system through cooperative purchasing and marketing. The movement spread to other states, but Texas remained its center. In 1887, the Texas Alliance established an elaborate system of cooperative cotton marketing that circumvented the middleperson. To get credit before the harvest, they developed the following scheme. Farmers placed orders for supplies with the Alliance, which the latter bought in bulk. To finance these orders, the Alliance had farmers issue notes secured by their future crop. The Alliance then used these notes to get credit from banks to finance purchases. Bank credit was then discharged with the proceeds from the sale of the agricultural staples. This was an attempt to substitute the personalized credit relation between farmer and furnishing merchant for a collective credit relation with commercial banks. This scheme

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survived for two years but then failed because of banks’ unwillingness to extend sufficient credit (Goodwyn 1976). Cooperative purchasing had failed, but this was an educational moment that underscored the importance of control over money creation (Goodwyn 1976; Postel 2007, Rothstein 2014). In a context shaped by greenback controversies, they moved from cooperative purchasing to monetary design. The leader of the Texas Alliance, Charles Macune, developed what became the Populists’ signature project, the subtreasury. Whenever a group of at least one hundred persons in one county petitioned the US Treasury, the latter would establish a warehouse, known as a subtreasury. Farmers would deposit staples such as cotton, wheat, or corn with the local subtreasury, and the US Treasury would issue notes equivalent to 80 percent of the staples’ market value to the farmers. This institution was designed to disempower furnishing merchants and to allow access to credit. It was designed to stabilize prices for food and fiber because growers could delay sales until after the glut at harvest, which was accompanied by declining prices. The subtreasury system—combining grassroots initiative with the federal government’s powers to accept currency in payment of taxes and to proclaim legal tender laws—would have stabilized the farmers’ social position by redesigning money (for the text of the proposal, see Tracy 1891:336–38). For the farmers, the creation of public fiat money was a way of challenging the crop lien system and bypassing the furnishing merchant. It is significant that the Alliance did not seek to change the practices of town merchants through usury legislation or other types of regulation. Perhaps because they foresaw too many opportunities for abuse, or they saw private credit as questionable in principle, they attempted to undercut the merchants’ power through governmental money creation. Public control over currency held the promise of loosening relations of rural dependence and the process of dispossession it enabled. From the perspective of Black farmers, federal control could have operated as a mechanism to challenge exploitative and racist local credit relations. To legitimize the system, the farmers compared it to existing institutions of money creation, national banks: If the latter could issue money against Treasury bonds, “a simple evidence of debt” (Tracy 1891:343), why

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should farmers not do the same with the agricultural riches of the country, the material wealth they produced? A different writer pointed out that bankers also issued currency in situations of crisis: when their reserves depleted during a bank run, they emitted clearinghouse certificates that they used to settle debts among banks (Southern Mercury 1896b). If financial institutions could help themselves in times of distress, why should cashstarved farmers not do the same? The term subtreasury was not new but designated a branch of the Independent Treasury System that held the government’s specie. The name subtreasury thus evoked the Jacksonian logic of the separation of bank and state. But unlike the Jacksonian institution, the postbellum version of the subtreasury was initiated by a county’s inhabitants and was enabled by the riches they produced, not by specie. It is remarkable that such a monetary project would originate in Texas. Before the Civil War, this state had adopted a hardline Locofoco Constitution that prohibited all banking. Like other Jacksonian measures, this prohibition had had unintended consequences as inferior state bank currencies from across the border flooded the state (Hammond 1962). By the 1880s, several decades of experience with public fiat currency, the war debt, and resumption had made the fixation on specie a thing of the past. In the meantime, Black farmers had founded the Colored Farmers’ National Alliance, which would become the country’s largest Black agricultural organization and which included laborers, sharecroppers, and farmer-owners. Because of white terror, the Colored Alliance operated semiclandestinely, primarily through Black churches. It organized boycotts when price-gouging took place, and its demands included higher wages and an end to convict leasing (Ali 2010:40). In 1892, Black and white Alliances, together with former Greenbackers and parts of the labor movement, formed the People’s Party. At their first national convention, they adopted a platform that put the money question front and center. Over twenty years after the Public Credit Act, the People’s Party platform still denounced the payment of public debt in gold. The core of their demands is worth quoting in full: “We demand a national currency, safe, sound, and flexible issued by the general government only, a full legal tender for all debts, public and private, and that without the use of banking

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corporations; a just, equitable, and efficient means of distribution direct to the people, at a tax not to exceed 2 percent, per annum, to be provided as set forth in the sub-treasury plan of the Farmers’ Alliance, or a better system; also by payments in discharge of its obligations for public improvements” (Populist Party Platform 1892). A public good, money no longer carried interest. The government should distribute it to money users who paid a “tax” for its use.14 Public currency was to be spent for public improvements, echoing the calls for public works after the Panic of 1873 and announcing Coxey’s Army, the 1894 march on Washington that demanded public works financed by Treasury currency. There were many divisions between white and Black Populists, but also within Black Populism. Cooperation with “disaffected Democrats who continued to deride African Americans” (Ali 2010:94) was difficult. In addition, Black farmers who employed waged workers opposed strikes as a tactic. Greenback moral economies, however, were uncontroversial: all fractions supported the subtreasury system (Ali 2010:27, 65, 76). Building on the infrastructure created by the Farmers’ Alliances, the People’s Party embarked on a massive educational campaign that included a network of thousands of lecturers, newspapers, mass meetings, and local suballiances (Goodwyn 1976; McMath 1993). The presidential campaign of 1896 was a high point for monetary controversies, even though the choice may appear to be a narrow one between a bimetallist and a gold standard advocate. When Democrats nominated the bimetallist William Jennings Bryan, white Populists faced a choice: Should they support a Silver Democrat? Or should they remain committed to the subtreasury scheme and to greenbacks? (McMath 1993; Goodwyn 1976). To many of them, Bryan’s bimetallism did not go far enough. The Southern Mercury, one of the largest Populist weeklies, which opposed Bryan, asked: “Do we not know that money is only a function imparted by law, making it receivable for all debts, whether the creditor desires to receive it or not. Doesn’t the brilliant young nominee of the free silver democracy know this as well . . . ?” (Armstrong 1896). While for white Populists the question was a strategic one, for Black Populists supporting a Democratic candidate meant abandoning their central concern: challenging the party of white supremacy in the South. When the Populist Party decided to support Bryan,

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they marginalized Black Populists (Ali 2010:113–16). And when Bryan lost the election, the Populist Party receded into the background of political life, and moral economies of money lost their strongest institutional expression.

The Malleability of Monetary Critique Postbellum moral economies of money are an object lesson in the malleability of monetary critique. Informed by the experience of Civil War finance, when the federal government reshaped the country’s monetary design within a few months, money users learned once again that money is a governance tool. They departed from Jacksonian certainties even if they kept a Jacksonian skepticism of banks. Instead of fixating on specie and the romance of unmediated exchanges, they promoted the idea that money was a plastic public institution and that corporate banks could be replaced by Treasury currency issued against warehoused agricultural staples, or for public works that would create employment. When they engaged in monetary controversies, Populists and gold standard advocates disagreed not only about policy choices but about the character of money users’ relation to money-issuing institutions.

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C HAPTE R 5

What Kinds of People Should Money Users Be?

MO NE TA R Y C O N T R O V E R S Y R E A C HE D F E V E R P I T C H in the early 1890s. In a con-

text of high unemployment and declining prices, the Populist Party became an important force in national politics. In the middle of the decade, controversies between gold standard advocates and proponents of bimetallism shaped a presidential election when a young bimetallist, William Jennings Bryan, won the Democratic nomination after giving a speech in which he attacked the gold standard. Now gold advocates feared that a candidate with Populist sympathies might become president. Because of the heated, and by now decades-old, debates, the 1890s are an ideal entry point for understanding how the two camps—Greenbackers and bimetallists on the one hand, goldbugs on the other—thought about money users’ role. In this chapter, I contrast Populist and urban upper-class thinking about the kinds of people money users should be. Historians emphasize distributive aspects of monetary controversy in the age of Populism (e.g., Bensel 2000; Barreyre 2015), but money users’ agency was also at the center of public debate in the late nineteenth century. What was the range of legitimate actions a money user, or groups of money users, could undertake relative to monetary design? In what follows, I contrast two prominent groups, northeastern upper-class goldbugs and Populists, to allow a

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glimpse into the epistemological commitments that informed rival understandings of money users’ agency. Before turning to urban upper-class and Populist knowledges, I introduce two ways of thinking about money users in society from which they drew.

Acquisitive Individuals against Moral Economies In the years in which Greenback moral economies encouraged money users to think about money as political beings, success manuals—a genre that emphasizes an acquisitive, individuated relation to money—also proliferated (Hilkey 1997). For instance, in best-selling books such as Acres of Diamonds, the Reverend Russell Conwell (1890) attempted to convince people that it was their duty to enrich themselves.1 And a well-known success manual, P. T. Barnum’s The Art of Money-getting ([1880] 2013), addressed the tension between an acquisitive and a political relation to money. After dismissing a socialist utopia, Barnum told a cautionary tale: “I was recently reading in a London paper an account of a like philosophic pauper who was kicked out of a cheap boarding-house because he could not pay his bill, but he had a roll of papers sticking out of his coat pocket, which, upon examination, proved to be his plan for paying off the national debt of England without the aid of a penny. .  .  . Do your part of the work, or you cannot succeed” (Barnum 1880). To avoid antagonizing his readers, many of whom had learned to think about money politically, Barnum did not criticize Greenbackers or free silver advocates and instead used an example he claimed to have found in the English press.2 But the message was clear: Barnum equated a working-class person’s effort to think about monetary design with a lack of foresight. The pauper should have recognized his position as someone who lacked the resources and standing to investigate monetary design. Since he had not done his “part of the work,” the elaborate plan would not keep him out of the poorhouse. For Barnum, thinking about money politically, instead of behaving like a money user who attempted to get it, was a mark of deviance. That Barnum, a well-known public figure, found it necessary to warn money users against monetary inquiry shows the strength of the tension between

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an acquisitive and a political relation to money. In a context of widespread moral economies, many money users considered their interests inseparable from larger monetary arrangements and found a politicization of money creation a necessary complement to their individual effort. In his celebrated discussion of the rights of man, Karl Marx pointed out that in the nineteenth century “the sphere in which man behaves as a communal being,” committed to timeless ideals, “is degraded below the sphere in which man behaves as a partial being,” seeking to enrich himself. “It is not man as a citizen but man as a bourgeois who is called the real and true man” (Marx 2000:61, see also 53). In the late nineteenth-century United States, writers like P. T. Barnum and gold standard advocates promoted the hierarchical split between the individual and the citizen. The citizen made possible the economic individual. While for them, Homo economicus, the acquisitive person—Marx’s “partial being”—illustrated man’s “nature,” how he really was, the citizen was subordinate and needed only to watch over the conditions under which acquisitive individuals operated. Those who wanted to silence moral economies saw the acquisitive individual as receiving (or being denied) rewards from a timeless mechanism the citizen defended: gold. They urged people to grasp money in terms of timeless abstractions and ideals on the one hand and individual interests on the other. The monetary citizen and the monetary individual were separate. The only “we” present in this configuration was a community of respectable citizens that upheld abstractions such as “honest” or “sound money.” In contrast, Populists and bimetallists promoted a distinct vision of money users’ place in the monetary system. They did not separate the money-user-as-political being from the money-user-as-individuated-being who tried to make ends meet. Money users were members of groups who investigated and attempted to adapt monetary institutions to their needs in a way they considered just. Flexible moral economies of money through which they could affect money creation were a condition for working people’s economic survival. Because “all forms of human government have been and are but experimental” (National Economist 1889), money users shaped society as they took part in monetary design.

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Populist Money Users and Their Moral Economies Ten Men of Money Island (Norton 1891) is a fictionalized history of money since the Civil War that lays out a Populist understanding of money users and urges readers to take part in money politics. In this 130-page narrative—the most widely read early Populist text (Destler 1963:73)—ten men settle on an uninhabited South Sea island, a terra nullius. They invent money when they face a collective challenge: building a bridge. The inhabitants promise to share the work but cannot all do it at the same time. Therefore, they tell one of them, Donothing, to keep track of each man’s contribution in a ledger. Instead of keeping a ledger, however, Donothing issues paper slips to each man who has done a day’s work. They read (Norton 1891:39): Money Island is indebted to the bearer for the value of One Day’s Work. This Note will be received for all dues to the government of Money Island. DONOTHING, Agent.

Donothing explains that at year’s end he will demand one-tenth of the slips from each of the inhabitants to ensure that everyone has done their share. By “turning in the slips to Donothing,” money users can prove that they have done their part. Those who have done less can trade other products of their labor with those who have surplus slips. In this way, the bridge certificates enter circulation as hand-to-hand currency. The author, who developed his understanding of money during the war debt controversies (Norton 1876), compares the bridge to the Civil War. Donothing is the federal government, the bridge slips are greenbacks issued to soldiers and suppliers, and the war is like the bridge: a public endeavor accomplished for the common good (Norton 1891:46). Even those who seemed disconnected from the war effort contributed their share by accepting greenbacks from those who had contributed as soldiers or suppliers. And when money users paid taxes with these greenbacks, they proved they had done their part. Like greenbacks, the settlers’ slips are a public utility that enables public works and private exchanges. Lack of money is not a

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constraint: what people can do is limited only by how much work the group can, and decide to, accomplish in common. Since enough labor power and raw materials are present, it would be absurd to say that the community does not have the resources to erect the overpass—the settlers need only a bookkeeping system to track individuals’ credits and debts with the community. Once they have built the bridge and Donothing has collected all the slips, the men miss the convenience of what has become their hand-tohand currency, and they start privately issuing promises for a day’s work written on blocks of wood. Because they realize that this practice can lead to fraud, they agree to use the glittering metal they find in a nearby river as money. Norton emphasizes that this is an agreement between the men, not a spontaneous development. In the late nineteenth century, the author notes, such an “agreement” became “almost universal” in the form of legal arrangements. Money’s origin was in human-made institutions, not in nature: “If the law should be repealed or ignored, gold and silver would become comparatively valueless. Gold might have a slight value; as, for instance, for filling teeth. Its value for ornaments and jewels even would disappear—for its value for such purposes depends upon the value given to it through its use as money” (Norton 1891:57–58). If laws ceased to turn gold and silver into currency, money users would cease to desire specie.3 When they wrote about money and the law, Populist writers wanted to make sure that all money users understood that both were malleable human creations, and they experimented with different genres. For instance, in a dialogue entitled “Mother and Child,” the child asks questions about money: Child. But suppose calf skins were worth two dollars at best, And Congress could stamp them as ten Could anyone buy a calf-skin for less? What would their “intrinsic value” be then? Mother. Their “intrinsic value” would remain just the same, But their commodity value would rise

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Until equal in value to gold or silver they’d range. In spite of the goldbugs and their lies. (Tanner 1896) This writer explains that governmental proclamation can turn anything into money and that the government can make any substance “valuable.” If money is central, it is also mundane and plastic. But the people on Money Island have yet to grasp the futility of turning glittering metal into money. They work for one hundred days to produce the gold they require. Once they are done, they realize it is too cumbersome to carry coin, and they tell Donothing to issue coin-backed certificates. This sounds reasonable, Norton (1891:64–65) suggests, but why bother mining in the first place? The bridge slips have been far more economical: “The amount of money produced was the same in both cases, but in the one case the labor expended to produce it was put into a bridge and in the other it was wasted!” (Norton 1891:60, italics in the original). Think of what they can accomplish, Norton tells readers, if money users realize that money is an administrative aid—a governance tool—that helps them organize collective life. Think of what kinds of people they can be, what money users can do for each other, when they are unconstrained by understanding money as a quantity of things they have to dig out of a river. With gold, the collective endeavor is money production; with bridge slips, it is creating public infrastructure. For contemporary readers, Donothing’s coin-backed certificates corresponded to Treasury-issued gold and silver certificates, as well as to greenbacks after the resumption of specie payments. Compared to the greenbacks, the “free” money that had enabled war mobilization, specie-backed money was costly because workers had to produce it. It was costly to the federal government because the government needed to borrow a money whose production it did not control. Such an arrangement limited money users’ collective agency and impelled them to understand themselves as individual money users, not as part of groups that could take part in moral economies of money. Instead of thinking about how to organize collective life, they spent time and energy procuring money.

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The next part of Norton’s story is a cautionary tale about what happens when money users delegate monetary agency. When the inhabitants realize they need more money to conduct exchanges, they cannot agree on a solution. Wary of debate, they entrust money creation to Discount, who personifies the banking sector. Discount begins issuing notes and soon realizes that he can advance them at interest. The notes read (Norton 1891:69): I promise to pay the bearer on demand One Piece of Coin of the weight and fineness established by the government of Money Island. DISCOUNT.

When a farmer borrows such a note from Discount for the first time, he does not pause to think because he is “in a hurry to get his grain into the ground” (71). Delegating money creation to self-interested actors means shrinking the agency of most money users, and they become people who no longer reflect on monetary questions, forgetting that it is merely a way of organizing social relations. But the ten men soon learn that an exclusive commitment to individual production imperils a society of producers. Delegating money creation to Discount, the banker, has disastrous consequences. He no longer works, withholds credit from those who cross him, and becomes the island’s wealthiest person (Norton 1891:78). In the end, he creates situations that cause foreclosures. Tenancy replaces landownership while inequality and impoverishment surge. Farmers could connect to this process because the crop lien system subjected them to a similar local money monopoly, but the analogy also worked at the level of society. If readers thought that the ten men were “idiots” (76) for granting such privileges to Discount and enabling massive indebtedness to him, they needed to remember that contemporary corporate banks were a form of money production identical to Discount’s bank. Money users’ identity, Norton suggests, is incomplete without a political relation to money: Workers need to produce goods and enable the monetary conditions that ensure just reward. They need to take part in connecting their individual efforts with broader arrangements— they need to participate in moral economies of money. Populists considered that money users needed to adapt monetary institutions to people’s needs and could judge a monetary design by evaluating

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how it shaped people’s lives. Farmers who grounded their worth in the production of food and fiber saw the value of their contribution as indisputable. One Populist publication (Dunning 1891) chose the following quote as an epigraph: “In the great household of Nature, the farmer stands at the door of the bread-room, and weighs to each his loaf.” Food producers ought to be in a position of power relative to others and to receive an adequate reward. If they did not, the institution that tied them to society at large—money and prices—was off kilter. Money was a way of compensating people for their efforts, but it required constant vigilance to function adequately, and individual effort alone was not enough to ensure money users’ livelihoods. Such moral economies encouraged people to think about food provisioning as constrained by material possibilities but not by money: “That people should actually starve in this land capable of feeding the world . . . is one of the living and walking condemnations of the present financial system” (Southern Mercury 1896a). Like the postal service and highways, money was part of the infrastructure that related households to broader society. The former senator William Peffer claimed that the government provided highways to “the people” indiscriminately and at cost. While everyone had the right to use a highway, no one had the right to interfere with traffic. But banks were different. They were also part of the public infrastructure: “Every piece of money . . . which has been given to the people as money, was made and issued to them by authority and direction of Congress” (Peffer 1891:262). But banks “blocked” money by charging people more than it cost them to create it. Why should money users allow banks? “If money is intended for the people . . . why not give it to them at once through government hands, as postage stamps, for example, are given?” (262–63). “The people” needed to make “their own money in their own way, and issue it through agencies established by the general government” (262). Peffer calculated that “cost of delivery” (the cost of administering public loan offices) would amount to 1 percent interest. Since in his plan a broad range of people would have access to cheap credit, it would no longer be worthwhile for private parties to loan money out because they could realize higher returns in productive endeavors such as farming. Money Island’s inhabitants eventually correct their mistake. A revolution restores money users’ control over money creation: now public

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authorities issue money to inhabitants and prohibit lending at interest and specie money (Norton 1891:137). Bank money creation and specie were temporary aberrations, and bankers reintegrate the ranks of producers: when people abolish “usury” on Money Island, Discount turns to manual labor and, ashamed of his past, changes his name to “Useful.”4 Similarly, Donothing abandons his occupation as a professional politician and reenters the ranks of the citizenry (137). Money users take charge of the monetary system to ensure “a comparative equalization of property” (136). They realize the Populist dream of removing money from “the list of commodities which may be bought and sold for gain” and circumscribe currency to its “proper function of serving the people in the conduct of their every-day affairs” (Peffer 1891:264). “Donothing,” the personified federal government, indicates that Populists did not idealize public authorities. Writers like Norton did not merely advocate for a redrawing of the public/private division that changed institutions and policies but left intact the kinds of people money users were. Populists went beyond debates about what was, and what was not, the “proper” role of government. They refused to limit their thinking to drawing a line between the public and the private, rethought the relation between money issuer and money users, and considered what kinds of people and what kinds of knowledges such a redesigned relation would require. Ten Men emphasizes public infrastructure and projects (the bridge, the Civil War), money’s capacity to mobilize public resources, and the importance of access to money for individual households. If these were pressing issues for farmers, for waged workers employment was central. Three years after the publication of Money Island, hundreds of money users who were looking for work marched on Washington, demanding that the government issue currency to local and state governments to mobilize their labor for road improvements (Alexander 2015; Prout 2016). They argued that they could maintain their position in society, and contribute to it, only through the public infrastructure that was money. They connected the federal government’s monetary powers to the plight of those who were looking for work, and they saw unemployment as a failure of the monetary system to mobilize people’s labor power. This group, which became known

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as Coxey’s Army, attracted national attention and made the unemployment crisis and the federal government’s monetary powers visible. For money users who took part in Populist moral economies, a monetary system required constant vigilance. Without a moral economy, a monetary system was incomplete. If Populists refused to reduce their agency to individual pursuit of gain, the urban upper-class press had a different idea of what kind of people money users ought to be.

Money Users in the Urban Upper-Class Press While Populists built their monetary worldview on what they considered the indisputable value of their products, upper-class defenders of gold turned this logic upside down: they grounded the value of their contribution to society, the legitimacy of their position, in monetary reward. If farmers evaluated money from the perspective of work, the New York Times—a gold democratic urban upper-class periodical—turned this way of thinking on its head and assessed labor from the perspective of money: “A sentiment prevails during campaigns . . . that all wealth is the result of manual labor. This is a misconception. Any product of time and effort for which men will give money, which is simply a certificate of labor expended, is the fruit of labor as much as is a bushel of wheat or a cartload of coal. The man who receives money for a poem, or even so spontaneous an effort as a Bryan lecture, if he can get money for it, practically produces value” (New York Times 1896h, emphases added). One’s labor did not justify pecuniary reward, but the cash one had received always proved the value of one’s efforts. By extension, the possession of money proved individuals’ value to society. In contrast, the absence of monetary reward proved the futility of an effort. Without mentioning declining agricultural prices and foreclosures, one writer implies that farmers ought to accept them as responsible individuals who had made bad choices as investors. Farmers needed to learn to recognize declining income as a manifestation of “the operation of the law of supply and demand with respect to prices” (New York Times 1896a) but also to “work more and spend less” (New York Times 1896d). They

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were afflicted by “isms and fads which are now rampant” that needed to be “driven away by education” (New York Times 1896c). To sustain the idea that money always rewarded those who were productive and always punished those who were not, the design of monetary institutions had to be neutral and could not have distributive implications. Gold was invoked to make money appear timeless and therefore neutral. Historically, “the” gold standard was a series of experiments through which most countries, at some point in the nineteenth century, tied their currency to gold—either by the use of gold coins or by banks’ and treasuries’ promise to convert their notes into gold (De Cecco 1984). But goldbugs presented a gold standard as timeless, and before the election of 1896, the New York Times published articles that tied timeless money to national honor and upright citizenship. “The money standard of a great nation should be as fixed and permanent as the nation itself. To secure and retain the best should be the desire of every right-minded citizen. Resting on stable foundations, continuous and unvarying certainty of value should be its distinguishing characteristics” (New York Times 1896b). Money’s timelessness justified wealthy money users’ position and ensured that their wealth was not arbitrary but a transparent truth. Conversely, if money was a human-made institution open to the play of interests and politics, wealthy people’s position became more difficult to legitimize. When the wealthy heard Populist ways of thinking about money and money users, they faced the specter of a society that did not feature enriched people in positions of relative power and deserving of a disproportionate share of the goods and services money could buy. In this context, the upright citizen—the New York Times reader—defended the idea that money could be an unquestionable epistemology of worth. Upright citizens should dismiss bimetallists and Populists who had been unsuccessful. Having failed as Homo economicus, the debtor-farmer had also failed in his duty as a citizen who ought to watch over the “honesty” of money: he dared to question money, the supreme arbiter of an individual’s value, and banded with other uncivil money users to change monetary arrangements. Populists undermined their own arguments because they acknowledged “that the American newspapers, the ministers, all persons interested in

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banks and banking, and hosts of other citizens who exert influence and are respected because of their attainments and callings, are opposing the silver policy. This is an admission of the inherent weakness of their cause” (New York Times 1896g; emphasis added; for similar statements, see, e.g., Wage Earner 1896; New York Times 1896f). Money justified the social standing of individuals, and moneyed individuals were in favor of gold; therefore, impoverished farmers were wrong. This line of argument was prominent in Harper’s Weekly, another northeastern upper-class periodical. Populism appeared whenever many “persons have been unwise in their business ventures, unfortunate in their undertakings, or bitten by the gambling and speculative fever, and have carried their operations so far as to exhaust their credit and incur debt” (Ford 1896). Writers distrusted indebted money users’ capacity to take part in electoral processes. One of them drew a parallel between the ratification of the Constitution and the election of 1896: “When the Federal Constitution had been framed and was submitted to the people for their approbation, the paper-money party of the day recognized in it the one instrument which could put an end to all their dreams of power and wealth, and so large a party did they comprise that they would have rejected the Constitution had it been submitted to popular vote” (Ford 1896). The unworthy should not be able to cast a vote about money, just as they had not directly voted on the Constitution, which was part of a response to Shays’ Rebellion, the Massachusetts debtor revolt led by a Revolutionary War veteran (chapter 3). Monetary success proved one’s aptitude as a citizen, but failure as an acquisitive individual meant that one had been corrupted, that one could not be a disinterested citizen, and that one’s political participation was suspect. The defenders of a gold standard considered it a universal, automatic, and self-regulating mechanism. If a country exported more than it imported, gold flowed out and the money supply decreased, causing wage and price declines and higher interest rates. Lower wages would then stimulate exports, while decreased consumption would help redress the balance of payments. As a result, gold would return to the country and wages and prices would rise again. Conversely, if a country exported more than it

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imported, its prices would rise, making exports less competitive (Eichengreen and Temin 2000; Polanyi [1944] 2001; De Cecco 1984:6). Within this logic, higher wages or government spending in a slump caused price increases that hamper exports. Opposition to wage increases and budget deficits was therefore an integral part of the gold standard logic. In practice, monetary and fiscal authorities kept significant policy space, and their discretionary actions were necessary to make the system work (Polanyi [1944} 2001; De Cecco 1984:16). But defenders of the “gold standard mentality” (Eichengreen and Temin 2000) thought that adhering to a gold standard was a government’s sacred duty and that it was a self-regulating and just global mechanism. The monetary epistemology of success and respectability dominated the New York Times, and the role of disciplinary academic expertise in legitimizing the gold standard was minimal. The newspaper published two polls about academics’ positions on money. In Yale’s academic departments and in “representative” colleges across the country, professors favored gold (New York Times 1896i). From the perspective of public monetary knowledge formation, the clear preference is as important as the fact that the polls included all departments (“Academic,” “Scientific,” “Theological,” “Law,” and “Medical”). Writers made no special mention, for instance, of William Graham Sumner (Yale), or academic authorities on monetary questions. The New York Times marshalled the authority of respectable academic institutions, not the disciplinary expertise of economists, in the service of the monetary status quo. In public life, the depersonalized verification and authorizing mechanisms of economic scientificity had not replaced the older notion of timeless truth professed in direct communication between respected scholars and laypersons (Bender 1993:13; see also Furner 1975). Neither did New York Times writers encourage the electorate to listen to experts. Instead, they defended a political epistemology of respectability and success. One writer related an anecdote about a drunken person who in a village election chose sides on the basis of the groups’ appearance and picked the “more respectable” one even though he did not even understand the question at stake (Wage Earner 1896). This commentator suggested that the electorate was like a drunken person who ought to pick sides by the appearance of respectability and success.

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Epistemologies of Worth From goldbugs’ perspective, Populists failed to accept that their primary duty was to behave as acquisitive individuals who accepted gain and loss. A gold standard was a “natural” way of arranging money, one that would guarantee just reward for those who had contributed. And those who had been rewarded were the only people worthy of judging the monetary system’s fairness. Conversely, any criticism of the gold standard meant that disgruntled-because-unsuccessful people attempted to tip the scales of a timeless and universal system. When money users who took part in moral economies demanded public works financed by Treasury notes, when they demanded that the federal government issue currency against agricultural staples, or that it establish free coinage for silver, they frightened those who considered that this automatic and universal system justified their place in society. From the Populists’ perspective, goldbugs failed to understand that money was a way of mobilizing resources, connecting people, and stabilizing livelihoods. They agreed that money was a practical epistemology of worth, but they wanted to subject this epistemology to democratic scrutiny. In the age of Populism, money users disagreed about the range of options open to them. Were they to act as acquisitive individuals only and submit to the verdict of money—or could they make the laws that made money as part of democratic processes? These questions were more than details on the margins of a debate about policy preferences and distributive struggles. Epistemological struggles—over who could claim monetary knowledge—were at the core of postbellum monetary tensions. After William Jennings Bryan’s defeat in the 1896 presidential election, the New York Times published an article entitled “Safeguard the Future.” The journalist voiced relief that no revolution had come to pass but reminded readers that the real task still lay ahead: “at once and forever to cut the connection between politics and the currency” (New York Times 1896e). A recovering economic life and the Gold Standard Act (1900) seemed to mark steps toward that goal, and controversies about money’s design receded from the center of public life even if they resumed after the Panic of 1907 (Shaw 2019:28–33). But moral economies of money flourished again during the Great Depression.

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C HAPTE R 6

Monetary Silencing as a New Deal Legacy

W HE N T HE Y F A C E D JO B L O S S , D E VA S TAT IN G P R I C E increases, and farm foreclo-

sures in the early 1930s, large groups of money users took part in moral economies of money. Informed by the Populist legacy, they demanded a say in money creation mechanisms, and several times Congress came close to issuing Treasury currency. In response, New Deal policy choices and rhetoric advanced a pattern of monetary silencing that continues to shape public life to this day. New Dealers restructured the country’s money creation mechanisms, engaged in massive public spending, and ended the dollar’s convertibility into gold. But at the same time, President Roosevelt opposed demands for Treasury currency that would have made the federal government’s monetary agency visible, and in his radio addresses, he obscured the federal government’s monetary agency when he claimed the government was like a household—a money user, not a money creator. He also promoted the distinction between money creation (monetary policy) and public spending (fiscal policy). This distinction, which structures today’s debates about money and public finance, is a foundational dimension of monetary silencing because it encourages lawmakers, commentators, and money users to think about public spending without considering where money comes from or how the mechanism through which it comes into existence might be changed. 118

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Before discussing Depression-era moral economies of money and Roosevelt’s response to them, I turn to an institution that made silencing possible. From the perspective of silencing, World War I finance prefigured the New Deal.

The Federal Reserve and the Lessons of Invisible Wartime Money Creation Because it was the first major conflict during which money users did not encounter a new currency, World War I marks a break with centuries of war finance. Since the colonial era, wartime currencies had forced money users to grapple with tax receivability and legal tender laws and taught them that legislatures and treasuries make money. The lessons of war finance had shaped postwar controversies about public debt, deepening public knowledge about monetary design and its stakes. In contrast, the Federal Reserve System enabled wartime money creation that was invisible from money users’ perspective. When Congress established the central bank in 1913, there was little popular controversy about it. President Wilson presented the central bank as an institution that could prevent crises such as the Panic of 1907 and provide a more elastic money supply. William Jennings Bryan, a prominent member of the Democratic administration, supported the new institution. When Congress passed the Federal Reserve Act in 1913, the farm sector was prospering, and few money users had strong opinions about the new institution (Webb 1978:190; Dorfman 1949:339–40). Also, money users did not experience the new central bank as a rupture: Federal Reserve notes did not replace other forms of currency then in circulation. This was an additional source of liquidity, not a substitution like the changeover from national currencies to the Euro.1 Congress established the central bank to provide a more elastic currency that could end recurring crises that occurred due to the seasonally fluctuating demand for money.2 Reserve Banks could issue money against some types of commercial debt held by the system’s member banks. For instance, a commercial bank’s customer would take out a loan secured by goods in a warehouse. When the bank presented this loan to a Reserve

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Bank, it could get cash or book credit on its central bank account. The Federal Reserve System stood ready to accommodate banks and, indirectly, money users.3 While the central bank provided a more flexible high-level currency, banks mediated money users’ access to this public institution. Therefore, the central bank was distinct from moral economists’ demands for a direct and intelligible link between money issuer and money users such as Treasury currency.4 Its notes were tax receivable, and Federal Reserve Banks had to hold a 40 percent specie reserve to convert notes into specie on demand. When the federal government deployed the central bank to fund World War I mobilization, it taught money users several lessons. Lesson 1: This is not new money. The governor of each Federal Reserve district led a Liberty Loan Committee that organized the sale of war bonds. These committees encouraged money users to borrow from commercial banks to purchase bonds, and the latter got advances from Federal Reserve banks to enable their customers to do so. From the perspective of money users, it was not clear where the money that funded their purchases came from, and it was not even visible that this was “new” money. When commercial banks bought bonds for their own account, they did so using Federal Reserve credit at an interest rate below what they received for the bonds, guaranteeing a profit (D’Arista 1971:24–27). In a speech to bankers, Treasury Secretary McAdoo (1917a:7) explained that “all of this financing is largely a matter of shifting credits.” Government-led money creation, which had been “visible to the naked eye” (Rockoff 2012:5; Friedman and Schwartz 1963:21) during the Civil War because new pay tokens had entered circulation, was now hidden from money users’ view. Lesson 2: Money comes from the private sector. The federal government mounted an unprecedented marketing campaign to sell war bonds. At a time when there were twenty-four million households in the country, a total of twenty million people (and over two-thirds of urban wage earners) owned such securities (Sutch 2014:23–24). The bonds were a wartime novelty, but the money creation process had disappeared from view, and the bond-buying public had no reason to think they were taking part in a money creation process. Advancing money to a government that no longer seems to create it teaches a hidden lesson to money users: that the state

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is passive relative to money creation. The federal government seems to depend on revenues and seems to be downgraded to a money user. The secretary of the Treasury reinforced this lesson. During a visit to Iowa, he urged farmers to purchase war bonds, arguing that there were two ways of financing the war: “by taxation and by bond issues” (McAdoo 1917b:9). Money creation, it seemed, was no longer required, and McAdoo did not mention the Federal Reserve in his speech. In appearance, the private sector (bondholders and taxpayers) financed the war.5 Lesson 3: The war debt is radically distinct from currency. In his speech to Iowa farmers, McAdoo (1917b:10) noted that “a Government bond is like cash in your pocket. It can always be sold. It is just as good as currency, and better, because it bears interest and currency does not.” But if bonds were like cash, the Treasury made sure money users could not use them as cash, another contrast with earlier patterns of war finance. It issued bearer bonds6 only in denominations too large for everyday use and made them affordable by allowing installment purchases. A different type of government debt—low-denomination savings stamps—needed to be affixed onto certificates to become cashable. These certificates bore the owner’s name and could not circulate as currency (Sutch 2014). Through these arrangements, the Treasury policed the line between war bonds and circulating cash, creating the appearance that they were fundamentally distinct. During the War of Independence and the Civil War, various debt instruments had performed a monetary function similar to that of greenbacks (chapters 3 and 4), and money users had understood both as circulating public debt. Conversely, avoiding a monetary use of World War I government debt discouraged such an understanding of money. In sum, World War I finance had pedagogical effects that were radically distinct from those of eighteenth-century bills of credit or nineteenthcentury greenbacks. World War I money creation (1) was invisible to money users, (2) enabled the appearance that money came from the private sector, and (3) policed the boundary between currency and public debt. World War I produced no greenback-like symbol around which different constituencies could rally and through which they could articulate their demands. Equipped with such a recently created monetary symbol, and with the knowledge that such a mode of money creation worked because

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it had helped win a war, the moral economies in the interwar years and the Great Depression would likely have been even more widespread.

Depression-Era Moral Economies Exports to the Allies led to an agricultural boom during World War I. Farmers expanded operations and bought consumer goods on credit (Danbom 1979). But overseas demand decreased after the Armistice, and the Federal Reserve restricted credit. Squeezed between low prices and tightening credit, farmers entered crisis mode a decade before the rest of the country. Building on the Populist legacy, they criticized Federal Reserve policies (Webb 1978:9–47). With the onset of the Great Depression, the National Farmers’ Union, an organization of small farmers, became a prominent voice. The Iowa branch was a center of Farmers’ Union mobilization. In the early 1930s Iowa farmers received less than one-tenth of what it cost them to produce corn, and in 1933 the state had the country’s highest foreclosure rate (Shover 1965a:13–16, 39). A front-page article in the Iowa Union Farmer discusses foreclosure resistance, which included manhandling attorneys, kidnapping a foreclosure judge, penny auctions,7 and marches on Des Moines. Farmers were “awakening to the fact that HUMAN RIGHTS MUST BE PLACED ABOVE PROPERTY RIGHTS” (Iowa Union Farmer 1932). In early 1933, farmers stopped at least ninety-eight foreclosures (Shover 1965a:17). Milo Reno, the leader of the Iowa Farmers’ Union, also chaired the Farmers’ Holiday Association (FHA), its militant offshoot. The former Bryan follower saw money as a public infrastructure. He wrote that when bankers “refuse to sell the use of money for less .  .  . and withhold such services from society . . . they have struck” and that when the Federal Reserve increased interest rates, they “threw out pickets upon every financial highway” (Reno 1932a). Comparable to a speculative withholding of goods, their “strike” enriched financial institutions, making their dollars “more valuable” while the monetary value of farm products declined (Reno 1932a). But Congress could revoke banks’ money creation privilege or establish a direct link between the supreme lawmaking body and money users:

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Treasury currency. A national FHA meeting resolved that Congress should “re-possess” its right to create cash (Reno 1932b). “The people themselves,” Reno (1932c) noted, “ought to decide about the “quantity of our economic lifeblood.” Democratization meant challenging the gold standard, which enriched those who controlled gold at the expense of everyone else: “Money lords . . . have enthroned the god of gold and by economic force and legislative corruption propose to make of all the people slaves to this god of their own creation” (Reno 1932d). For Reno, money was a changeable relation between money-issuing institutions and money users, not a privately owned “thing” banks could withhold. Reno thought that all nonfarm sectors of society benefited from low agricultural prices at farmers’ expense. To emphasize this point, FHA members withheld farm products and picketed roads to cities to force a price hike. They claimed that the products of farm labor were more important to society than money. “We’ll eat our meat and ham and eggs,” one of them wrote, “and let them eat their gold” (quoted in Shover 1965a:36). Money, including gold, was a malleable social arrangement, but food was indispensable. Through the strike, farmers wanted to teach the country the worth of their contribution and put monetary institutions in their place. Like farmers, veterans framed their demands as part of a moral economy of money. In 1924, Congress granted World War I veterans compensation for income lost during their service. They received a government obligation known as the “bonus” that would be cashable in 1945 (Ortiz 2010:27). Hence, in the early 1930s, millions of veterans who were looking for work, many of them unhoused, owned a government debt they could not cash. In this context, Wright Patman, a Democratic congressional representative and a World War I veteran, started cultivating their monetary knowledge. He thought that if he could interest “3,500,000 veterans . . . in finances . . . they’d soon be an army for general economic reform” (quoted in N. Young 2000:52). In 1932, Patman introduced legislation to pay the veterans through Treasury notes without issuing bonds. His bill passed the House. Thousands of veterans, many of them with their families, converged on Washington, D.C., to put pressure on senators (Ortiz 2010). Once they had arrived in Washington, the veterans constructed shelters and published a weekly, which they printed in a tent.

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In the weekly, the veterans urged other groups, including farmers, to join them (B.E.F. News 1932c) because most money users stood to gain from veterans’ greenbacks. They quoted Patman: “A billion and a half dollars paid to the 4,000,000 wearers of the khaki and olive drab would be put immediately into circulation to the great stimulation of business—not hoarded” (B.E.F. News 1932b). Unlike veterans, bankers had been too successful in the business of asking for public money. The government had allocated “billions for the bankers who wrecked the nation, but nothing for the humble people who face privation and misery” (B.E.F. News 1932a). In article after article, the veterans blasted the Reconstruction Finance Corporation—the “Bankers’ Dole Corporation”—an institution that provided liquidity to banks in distress (e.g., B.E.F. News 1932a). Federal authorities had helped bankers but refused to aid veterans “to preserve human life when we know it to be imperiled” (B.E.F. News 1932d). The newspaper brushed away the argument that the gold standard prevented early payment (B.E.F. News 1932c). The needs of impoverished people were more important than the gold standard or a balanced budget. They refused to leave after the Senate had rejected the Patman bill. Hoover then ordered the armed forces to clear the camps. Infantry, cavalry, and police supported by tanks killed two veterans and wounded many others (Ortiz 2010:56–57). Moral economies of money had led to the use of state violence against former soldiers in the nation’s capital. But repression did not silence bonus controversies, which would unfold at the intersection of veterans’ demands and broader moral economies of money. Father Coughlin, a popular radio figure, was a prominent supporter. For him, World War I finance symbolized the conflict between popular classes and financial interests more than any other issue. The refusal of an early payment was due to “money changers” returning to “the temples of government” after the war (Coughlin 1931:146–47). In the mid-1930s, the Catholic priest addressed a radio audience of at least ten million in the East and Midwest. A 1933 collection of Coughlin’s addresses sold almost a million copies, and he received ten thousand letters daily. While a common class position united farmers, and the shared demand for an early payment of the bonus animated bonus advocates, Coughlin’s listeners lacked such a common background (Brinkley 1982:196,

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199–220. Neither did Coughlin have a strong grassroots organization; he was a media figure more than a political leader. But like the Iowa farmers and the bonus marchers, Coughlin understood the unemployment and foreclosure crisis through a moral economic lens. He argued that no reward was due to a person who lent money, and questioned the very distinction between usury and interest. Since lending money was illegitimate, the government should cancel unpayable debts. On the basis of biblical quotes, he claimed that “financial rights have a termination” but “human rights are eternal” (Coughlin 1933:15). He supported the agricultural insurgency in the Midwest and argued that absent a dollar devaluation that would lead to price increases, a jubilee would become unavoidable (Coughlin 1933:30). Penny auctions, foreclosure resistance, and mortgage moratoria supported this claim. Coughlin blamed bankers who had caused a “money famine” for the economic catastrophe. But Congress could remedy money scarcity (Coughlin 1933:6). In a sermon entitled “Money Is No Mystery!,” Coughlin delved into English monetary history and explained the functioning of wooden tally sticks—currency in use from 1100 to 1830—to millions of listeners. If the English had used wooden pay tokens for centuries, the United States could replace gold with something else today (Coughlin 1935:100). But national leaders, “obsessed with the cult of gold worshipping,” did not counteract “the famine of money” (Coughlin 1933:5). Depression-era moral economies of money were also racist. Writers like Reno (1932a) argued that farmers’ “economic slavery” was “more destructive of human happiness than chattel slavery.” But the Farmers’ Union excluded Black people until 1934 and remained primarily white after that date (Wortman 1995:102–3). In a context of exclusion, Reno did not use the metaphor of slavery to express solidarity with victims of racial oppression but to point out that he thought such oppression was inappropriate for whites (see, for instance, Roediger 2007:68). And Coughlin relied on anti-Semitism to explain the persistence of the gold standard. He claimed that the idea of “gold as a medium of control” had emerged from the Rothschild’s “London office” (Coughlin 1933:40) and devoted an entire sermon to inventing connections between Jews and the gold standard while emphasizing his opposition to pogroms (Coughlin 1933:59). Listeners

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could see him as a defender of Jews, but the message was clear: there was a racially defined group that was complicit in the gold standard, and violence against this group was thinkable. In the late 1930s, the Coughlin-inspired Christian Front advocated, and at times practiced, anti-Semitic violence.8 Depression-era moral economies flourished in a context in which a wide range of pay tokens and monetary knowledges circulated. At the apex of the monetary hierarchy, Federal Reserve notes, gold, gold certificates, silver, silver certificates, national bank notes, and Treasury currency circulated (Friedman and Schwartz 1963:492), reminding money users that Congress could authorize different types of currency. Below these federal currencies, local governments also created tax-driven currency, and corporations and cooperatives soon followed suit (Gatch 2008, 2012; Nussbaum 1957:202). In this context, the American Federation of Labor’s monthly discussed monetary questions (e.g., Hoag 1933), and when he ran for governor, Upton Sinclair proposed a California Authority for Money that would issue cash to finance cooperatives (Starr 1996). These practices and knowledges were so widespread that they made moral economies of money plausible beyond the core constituencies that animated them. The electoral contest between Franklin D. Roosevelt and Herbert Hoover unfolded in this context. During the campaign, FDR did not embrace the gold standard, unsettling conservatives and infuriating Hoover.9 But he also kept moral economies at arm’s length. For instance, a senator wanted to refer to the “golden calf” when introducing the presidential candidate, but the Democratic candidate’s adviser “battled” him to strike it out (Moley 1939:57; see also Barber 1996:21). Roosevelt’s ambiguity enabled agrarian radicals to campaign for him by claiming that the candidate was secretly an inflationist (Webb 1978:191–99). In the election of 1932, voters had to choose between the gold standard advocate Hoover and an evasive Democratic politician.

FDR’s Ambiguous Monetary Stance In his inaugural address, Roosevelt continued his evasiveness but echoed moral economies. He emphasized that financial actors had caused the catastrophe and implied that voters electing him had routed “the money

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changers,” who had “fled from their high seats in the temple of our civilization.” Now it was time for “social values more noble than mere monetary profit” (Roosevelt [1933c] 1938). The biblical reference to money changers spoke to popular resentment and resonated with Coughlin’s sermons. Farmers who faced foreclosure and those who had lost their jobs could feel vindicated since the president told them they were not at fault. But although he echoed moral economies, it is clear in hindsight that FDR did not promote a moral economic logic. The Iowa Union Farmer, for instance, demanded Treasury currency and demanded that money creation become part of democratic politics. But the president had something different in mind: “There must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. . . . There must be a strict supervision of all banking . . . an end to speculation” (Roosevelt [1933c] 1938, emphases added). The focus on correcting financial actors’ moral failures is distinct from the emphasis on money users’ agency and institutional change that characterized moral economies. Because he focused on bankers’ character while avoiding probing the character of the current monetary design and the types of monetary agency it enabled and disabled, the logic of his inaugural was not moral economic. Money as a political process disappeared, and FDR grafted moral rhetoric and banking regulation onto an institution that remained unspecified and seemed to be always and already there. Through this rhetoric, Roosevelt did what he could to avoid fanning passions along the fault lines of gold and greenbacks while still pleasing those who embraced a moral economy of money. The Iowa farm leader Reno was enthusiastic. He thought the inaugural “in such perfect harmony with the Holiday principles and program that one could easily believe that he [FDR] . . . attended Farm Holiday meetings” (Reno 1933). In the past, public criticism of bankers had been inseparable from a critique of moneycreating institutions. Therefore, Reno thought that the president’s chastising of “money changers” indicated a willingness to democratize money creation. In his first press conference as president a few days later, FDR continued to cultivate evasiveness. When a journalist asked him to define what he meant by “adequate but sound” money, his stated goal, the president gave

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only cautious off-the-record answers. Regarding adequacy, he noted that “you cannot define the thing too closely. . . . On Friday afternoon last we undoubtedly did not have adequate currency” (Roosevelt [1933b] 1938). Pressed to characterize “sound,” he again emphasized that his answer was off the record and explained that “unsound is when the government starts to pay its bills by starting printing presses.” And when a member of the press corps asked him to define “sound” a month later, FDR snapped: “I am not going to write a book about it” (Roosevelt [1933e] 1938). In a context of catastrophic price decreases and widespread moral economies of money, the president did not want to reveal his opposition to Treasury currency. Doing so would have invited comparisons with Hoover because money users could equate opposition to “the printing presses” with adherence to a gold standard. At the same time, journalists would not alienate conservatives by speculating about FDR’s greenback sympathies because they knew he disapproved of “the printing presses.” FDR’s evasiveness about money creation also meant that it became difficult for money users to articulate their position in relation to his. While money users had deployed decades-old moral economies to challenge Hoover’s defense of the gold standard, it was unclear how they could relate to the current chief executive’s elusive position. At first, it seemed as though to address the banking crisis New Dealers might have to do what the president wanted to avoid: highlight the federal government’s monetary powers by jump-starting “the printing presses.”

Fiat Money and Its Denial: The Banking Crisis and Emergency Currency When depositors attempted to make withdrawals in early 1933, they found banks did not have enough cash on hand. Fear of failures encouraged further bank runs. Many money users had to make do without banking facilities and currency and resorted to lower-level monetary practices such as scrip (K. Davis 1986:46–50; Kennedy 1973:167–68). After taking office, Roosevelt immediately declared a bank holiday to prevent further runs, prohibiting banks from paying out currency and making transactions.

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At first, issuing Treasury currency to banks to meet the public’s demand seemed unavoidable. But members of the Federal Reserve Board opposed it, and one director of the Reserve Bank of New York argued that “the scrip idea would give encouragement to those in Congress and elsewhere who think a lack of currency is our trouble” (quoted in Kennedy 1973:173). Presidential adviser Raymond Moley (1939:150) describes a panicky atmosphere. When he shared his ideas about ending the crisis, one banker accused him of triggering a Populist revolt: “You’re talking like William Jennings Bryan and his million men who’d leap to arms overnight!” Bankers knew moral economies of money could challenge their position in the monetary system (Shaw 2019). Rexford Tugwell, one of the New Deal’s key economic thinkers, later noted that the country would have followed the president into almost any monetary experiment (K. Davis 1986:46–50). After lengthy debate, Moley and Treasury Secretary William Woodin proposed to change the rules of currency creation but not the categories of actors involved in it. As in World War I and again during Hoover’s presidency (Nussbaum 1957:172), they proposed to extend the category of assets against which the Federal Reserve could issue cash: “We can issue currency against the sound assets of the banks. The Reserve Act lets us print all we’ll need. And it won’t frighten people. It won’t look like stage money. It’ll be money that looks like money” (Moley 1939:152). Roosevelt, who had been skeptical of previous proposals, immediately endorsed this course of action, and Congress passed the Emergency Banking Act in record time (Moley 1939:152). Federal Reserve currency was the product of an institution farmers had criticized for years, and it would not encourage Bryan’s “million men.” Unlike Treasury currency, central bank cash would not highlight that the federal government could create money without bankers. The Emergency Banking Act extended the type of collateral the Federal Reserve System could use to issue currency. Now, all government obligations, as well as broader categories of commercial and bank debt, could be used to back currency. It also became easier for Federal Reserve banks to make advances to member banks (Preston 1933). In the first fireside chat, which accompanied the act, FDR explained that the “new currency is

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being sent out by the Bureau of Engraving and Printing in large volume to every part of the country” (Roosevelt [1933a] 1938). Reassured that banks could pay out currency, money users started depositing cash again (Kennedy 1973; K. Davis 1986:50). When the president explained the emergency banking legislation in the fireside chat, he could have informed radio listeners that Congress had just used its constitutional powers to alter the currency creation mechanism. But he deemphasized the government’s role: “This currency is not fiat currency. It is issued only on adequate security.” He added that there was “nothing complex, or radical, in the process” (Roosevelt [1933a] 1938, emphasis added). In a scholarly text published a year later, one of FDR’s advisers called the legislation “an emergency use of the fiat” (Berle and Pederson 1934:122). But instead of validating the moral economic claim that money is a malleable governance mechanism, FDR denied that the country had just witnessed the exercise of congressional fiat. In the same fireside chat, Roosevelt requested money users’ cooperation as responsible individuals but not their participation as thinking and voting political beings. He pointed out that banks could never meet all demands for currency if a run occurred. Therefore, “More important than currency, more important than gold . . . is the confidence of the people,” their “intelligent support and use of a reliable system” (Roosevelt [1933a] 1938, emphasis added). He admitted it had temporarily failed but depicted “the system” as unquestionable, unconnected to the crisis, and outside of political debate, just as in the inaugural address. Money was no longer a matter of rival claims about monetary design that shaped possibilities for public action and had distributive implications, as in the traditional goldbug-Greenback divide. It seemed to become a static system founded on trust. In sum, New Dealers used existing institutions, altered the underlying mechanism of money creation, and downplayed federal lawmakers’ monetary agency. They weathered the banking crisis without encouraging a further politicization of money. In the following months, the farm crisis and the veterans’ bonus became the flashpoints of struggles between the New Deal and moral economies of money.

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The New Deal against a Greenback Congress After the banking emergency, the farm crisis became a priority. The administration favored production controls over monetary expansion to restore farm prices, implying that they blamed overproduction for low prices. But a large group of lawmakers wanted to change the money creation process to help farmers, and Congress debated refinancing agricultural credit through greenbacks and remonetizing silver (Moley 1939:168; Shover 1965b:20). Senator Elmer Thomas introduced a bonus bill and another one that mandated a Treasury currency he called “prosperity notes” (Webb 1977:101, 105). Letters from constituents implored the Oklahoma Democrat to push for public currency. One farmer wrote: “Stay right in there and fight as you have never fought before for inflation and government works without bonds” (Webb 1977:104, emphasis added). Congressional inflationists argued that popular sentiment was on their side. One senator mentioned “the threat of an unnamed farm organization in the Midwest to go on strike” (Shover 1965b:23). Farmers’ Union president Simpson testified before Congress that the Farmers’ Holiday Association had the “spirit of 1776.” One lawmaker asked him: “Are there any symptoms that they are moving toward Washington?” (quoted in Shover 1965a:96–97), a reference to the Bonus March. Although lawmakers responded with laughter, the question indicates apprehension. Moral economists saw money as a class issue, and members of the New Deal administration came to similar conclusions. Marriner Eccles, the Utah banker who became the New Deal’s Fed chair, remembers his astonishment when he started working in the capital. He gained “a sense of two sealed-off worlds: one in which . . . the main concern was with creditor relief” and the other world, inhabited by people who had “debtor relief as their main concern” (Eccles 1951:132). Four years into the Great Depression, “spokesmen for the creditor sections of the land were still our intellectual elite. Their collapse in the world of physical fact had left unaffected their authority in the world of sentiment and ideas” (Eccles 1951:93). In a note to the chief executive, Agriculture Secretary Henry Wallace contrasted a “smaller, but wealthier, group” that was “thoroughly scared for

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fear there will be uncontrolled inflation” with “millions of people who are worried sick for fear that there will be no inflation” (quoted in Webb 1978:238). In private, the president mentioned his fear of an agricultural revolution (Schlesinger 1958:236, Webb 1978:287). When advisers told him there was nothing the administration could do until businesses began investing again, Roosevelt was irritated. He told the Treasury secretary, “I wish our banking and economist friends would realize the seriousness of the situation from the point of view of the debtor classes—i.e., 90 percent of the human beings in this country—and think less from the point of view of the 10 percent who constitute the creditor classes” (quoted in Schlesinger 1958:238). The specter of Weimar hyperinflation seemed to make a conservative position plausible. But during a deflation that caused mass foreclosures and unemployment, only creditors could see hyperinflation as the primary threat. Roosevelt also thought that bankers refused to give credit to businesses because they wanted to force a return to the gold standard. He sounded like a Farmers’ Union spokesperson when he told his cabinet that bankers were on “strike” (K. Davis 1986:291). But if Roosevelt privately shared the class perspective of moral economies of money, he opposed greenbacks. When he learned that an inflationist majority would override a presidential veto of a bill that mandated Treasury currency (Moley 1939:158), Roosevelt started maneuvering. To demonstrate his commitment to stimulating prices, the administration ceased to grant export licenses for gold. This move depreciated the value of the dollar relative to other currencies, boosted domestic prices, and indicated a willingness to end the gold standard (Wicker 1971:869–870; Temin and Wigmore 1990:488–90). After positioning himself in this way, the chief executive offered his assent to an amendment (later known as the Thomas Amendment) that authorized a monetization of silver, a revaluation of gold, and the creation of up to three billion greenbacks. He demanded that lawmakers authorize but not mandate these measures, and that he be able to implement them if and when he wished. FDR’s earlier ambiguous stance about greenbacks was an essential asset: had he publicly opposed greenbacks before, an inflationist Congress could have mandated the creation of inconvertible public money.

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Historians agree that the president’s acceptance of the Thomas Amendment was a last-ditch move to thwart mandatory greenback legislation (K. Davis 1986:104–9; Shover 1965b; Wicker 1971). In his memoirs, FDR’s undersecretary of the Treasury argues that accepting the amendment was part of a strategy of not allowing anyone “to occupy a position left of him— not that he proposed to operate from the position but to prevent anyone from doing so” (Acheson 1965:167; see also Moley 1939:161). Consistent with this analysis, Roosevelt did not say if he was going to use these powers, and he emphasized their optional character in a broadcast (Roosevelt [1933d] 1938). After May 12, 1933, when the Agricultural Adjustment Act (which included the Thomas Amendment) became law, the White House had broad powers over monetary policy. The Thomas Amendment strengthened the White House vis-à-vis the Federal Reserve. Now FDR could pressure central bankers—“frozen by fear of congressional action” (Wicker 1971:869)— to buy more government bonds than they otherwise would have by threatening to issue greenbacks (Wicker 1971:870). And a Democratic president now wielded the power to deploy the very currency creation mechanisms that moral economies advocated. Several close advisers and members of the administration were so outraged that they “scold[ed] Mr. Roosevelt as though he were a perverse and particularly backward schoolboy” (Moley 1939:159). They would again oppose several of the president’s gold policies, which allowed him broad policy space without embracing moral economies of money.

How to End Gold Convertibility While Affirming a Gold Standard From its first day, the administration had moved away from a nineteenthcentury gold standard. At the beginning of the presidency, the banking holiday prohibited banks from paying out gold and gold certificates. When the Treasury began issuing licenses to allow select banks to reopen, FDR prohibited these institutions from paying out gold and gold certificates or from exporting them without a Treasury license. Soon the president formalized the suspension of gold payments, outlawed the “hoarding” of

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gold coin, gold bullion, and gold certificates, and required money users to surrender them to the government (e.g., Nussbaum 1957:180). In public, Roosevelt offered a conservative justification for the gold confiscation and the export licenses. He claimed that the confiscation was only an expedient to protect depositors: whoever was unlucky enough to demand gold after a bank had depleted its reserves would have to leave empty-handed. From this perspective, the end of gold payments protected those who came too late. In addition, he explained that he had prohibited gold exports because gold was a “sound” basis for the currency (Roosevelt [1933d] 1938). The president justified the move away from a gold standard by affirming his commitment to gold. On April 20, FDR announced that the administration would no longer grant any export licenses for gold. Thereby, he ended the fixed gold-dollar relation, and the dollar declined. Devaluation helped stimulate prices, especially those of cotton and grain, but by midsummer farm prices started declining once again. Prices of livestock, milk, and other commodities that depended less on foreign demand had never risen substantially (Temin and Wigmore 1990:495–96). In Iowa, foreclosure resistance continued. Reno threatened to call for another strike, Senator Thomas considered a march on Washington, and members of the Farmers’ Union became impatient: “Why in the hell,” asked one writer, “doesn’t the government issue a billion in currency instead of buying in the money and paying interest in it? In all fairness, is this the ‘New Deal’?” (Iowa Union Farmer 1933). On June 28, another contributor reminded readers that prices would remain low “until the country has an abundance of money . . . paid into not loaned into circulation” (Carnahan 1933). The administration now embarked on an untested course of action: It attempted to devalue the dollar through a gold purchase program. Cornell professor George Warren, the main advocate of this policy, expected that massive gold acquisitions would decrease the relative value of the dollar, cheapening US exports while making imports more expensive (Schlesinger 1958:238–46). This move placated inflationists, but its effects were limited (Wicker 1971:878–79; see also Webb 1978:338; Schlesinger 1958:247). The program caused a major controversy. Treasury Secretary Dean Acheson resigned, the Chamber of Commerce called for an end to monetary

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experiments, and the Democratic governor of New York became an outspoken critic of the president. Meanwhile, Coughlin and Thomas held a New York City rally, attended by an audience of twenty thousand, to support FDR’s policy (Brinkley 1982:125). FDR never announced the end of the gold standard. Instead, New Dealers proclaimed that Congress had authorized the White House to establish a new gold dollar. In January 1934, FDR fixed the value of the “new” dollar at 40 percent below its previous value in terms of gold. From now on, the Treasury maintained one dollar at twenty-five ounces through transactions with foreign governments and central banks. The New Deal defined the dollar in terms of gold, but money users could not convert it. Federal Reserve notes still proclaimed that “the United States will pay to the bearer on demand” the face value of the monetary instrument. Besides Federal Reserve notes, the country’s circulating money now consisted of silver certificates and United States notes (greenbacks), which were no longer convertible into gold. The promise of redemption had become meaningless— money users could exchange only one dollar for another, or a Federal Reserve note for greenbacks, but not for gold (Nussbaum 1957:197–98). The gold devaluation increased policy space without issuing greenbacks because the dollar value of the Treasury’s gold had just increased. “Stripped of its legal trappings,” Friedman and Schwartz (1963:470) note, the “effect was identical with a simple grant of authority to the Treasury to print and to put in circulation nearly $3 billion of fiat currency.” From the central bank’s perspective, the requirement of a 40 percent gold backing for its Reserve currency remained, but given that the Gold Reserve Act had transferred ownership of actual gold to the Treasury, the Fed could only hold Treasuryissued gold certificates that did not convey “a formal claim to gold” (Nussbaum 1957:197) and could not be passed on to the public. Gold certificate credits with the Treasury—ledger entries—also counted toward the requirement (Nussbaum 1957:197). Friedman and Schwartz (1963:471) note that the gold reserve “has not been a direct influence on [Federal Reserve] policy at any time since 1933.” For instance, when gold backing threatened to fall below 40 percent in 1945, Congress lowered it to 25 percent. From now on, the Treasury—the only domestic gold purchaser— bought gold at a fixed rate. When it increased its gold hoard, the Treasury

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issued gold certificates or ledger entries to the central bank, which credited the Treasury’s accounts with the same amount. The Treasury could then spend from this increased amount. Because it paid for itself, “increases in the gold stockpile produce no automatic budgetary pressure” (Friedman and Schwartz 1963:473). The additional gold certificates or gold certificate credits enabled the central bank to issue more currency and accommodate banks and money users. In sum, the administration ended domestic gold convertibility, confiscated gold, redefined the dollar, and changed the Federal Reserve’s gold reserve requirement. Yet there was never a moment of truth about fiat money, and FDR presented each step in a way that distanced his policy choices from moral economies of money. But so far he had avoided opposing greenbacks in public. Roosevelt clarified his stance on inconvertible Treasury money, and how he wanted money users to understand money creation and their role in it, in one of the most dramatic events of the New Deal era: his struggle with bonus advocates and the moral economists who supported them.

How to Justify Monetary Restraint in a Sovereign Democracy In 1935, Congress decided to pay off the United States’ debt to World War I veterans through inconvertible greenbacks, and FDR used his veto power to prevent lawmakers from doing so. In the year before an election, this veto was a hard sell. Farmers and other debtors continued to demand inflation. Together with veterans, they were a large electoral force. The veterans’ movement was at the heart of New Deal dissidence, connecting Coughlin—who had broken with FDR—with Huey Long’s Share the Wealth movement (Ortiz 2010). These groups formed a party that would run in the 1936 election. Roosevelt could not justify monetary restraint by the need to uphold the gold standard because he had just altered it beyond recognition. Neither could the authority of economic expertise justify the veto because economists were discredited; the chief executive had blasted economists who “changed their definition of economic laws every five or ten years” (Roosevelt [1933f] 1938).

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How could he reject bonus greenbacks in this context? Roosevelt signaled the importance of this question by delivering the veto message in person before a joint session of Congress, an unprecedented step. This was also the first-ever broadcast from the House chambers (Ortiz 2012:142). The veto message is a critical moment in the relation between the New Deal and moral economies of money because in it, FDR made his opposition to greenbacks public. Commentators agree that in the mid-1930s the New Deal’s focus shifted from monetary to fiscal policy (Friedman and Schwartz 1963:533; Galbraith 1975:215). But from the perspective of the moral economy of money, currency creation and public spending are a single area of political practice, not separate policy fields. Veterans and farmers demanded public spending through currency creation. They saw money creation and public spending as inseparable, and they did not use the term monetary policy.10 In his veto message, FDR embarked on the shift from monetary to fiscal policy and simultaneously advanced the separation of monetary from fiscal policy on which this shift was based while remaining silent about money creation mechanisms. The president pointed out that a balanced budget was no longer an acceptable limit to democracy. But deficits were a fiscal, not a monetary, matter. Legislative currency creation was out of the question, and the government needed to repay its debts: “A government, like an individual,” FDR insisted, “must ultimately meet legitimate obligations” (Roosevelt [1935] 1938). He compared the federal government, with its claim to sovereignty and its constitutional right to define money, to an individual money user. Roosevelt’s denial of the federal government’s unique monetary agency is paradoxical given that his administration had confiscated and revalued gold, and given that after the Thomas Amendment, the chief executive had broader powers over money creation than his predecessors.11 While fiscal policy and budget deficits were legitimate concerns for a legislature, money creation was not. FDR claimed that chaos would ensue if lawmakers intruded into the realm of money creation. Greenbacks for veterans would encourage similar demands from other groups, and lawmakers would cave in to electoral pressure. This dynamic would lead to an annihilation of the currency:

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Chapter 6 In the majority of cases printing-press money has not been retired through taxation. Because of increased costs, caused by inflated prices, new issue has followed new issue, ending in the ultimate wiping out of the currency of the afflicted country. . . . To meet a claim of one group . . . will raise similar demands for the payment of claims of other groups. . . . It invites an ultimate reckoning in uncontrollable prices. . . . Every candidate for election . . . will in the near future be called upon in the name of patriotism to support general pension legislation for all veterans. (Roosevelt [1935] 1938, emphases added)

Throughout the address, FDR evoked a monetary state of nature, a disruptive situation in which group after group would push for Treasury currency creation. Society would then disintegrate as prices shot up and cash became worthless. The president could have discussed a range of questions about how to control price increases in a democracy: Who should decide about the monetary constraint? How should actors agree on a limit to spending, and according to whose priorities? How much inflation was acceptable? But this was an authoritative warning, not an argument, and FDR’s stance was categorical: the country could not entrust currency creation to an elected body open to popular pressure. It required a neutral guardian above the fray. FDR presented himself as the embodiment of the “general interest,” an impartial chief executive committed to “all groups, to all citizens, to the present and to the future” (Roosevelt [1935] 1938). And Roosevelt implied that lawmakers and money users should not concern themselves with questions of money creation and monetary design. By describing the bonus bill’s Treasury notes as an implicitly artificial “printing press money” (Roosevelt [1935] 1938), he set up a contrast between the notes and a “real” money that was somehow not printing press money.12 He thus held up “printing press money” as an aberration but did not explain the norm against which he wanted it to be judged. Lawmakers and radio listeners, he suggested without using those words, should stay out of the realm of monetary policy and stick to fiscal policy as he understood it: decisions about what to spend money on, and how much, always bearing in mind that borrowed money had to be paid back.

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Would lawmakers sustain the veto, agree that currency creation ought to be removed from electoral pressures, and disempower themselves? After Roosevelt’s speech, Patman made an argument that was difficult to challenge in a context of widespread impoverishment. Early payment was a way of getting money into people’s pockets “without the payment of a dole,” and this cash would stimulate consumption, prices, and production. He then listed the counties this money would go to and the dollar amounts in question (Weintraub 1977:521). The House overrode the veto, but the Senate narrowly failed to do so. While the veto stuck, large numbers of lawmakers and moral economic groups rejected the idea that money creation was not their business. While FDR attempted to compartmentalize fiscal and monetary policy, for now, the bonus continued to embody a refusal to follow suit.

Pacifying Money Users FDR successfully opposed Treasury currency, defined the dollar in terms of gold, compared the federal government to a household, and attempted to compartmentalize moral economies into fiscal and monetary policy. These New Deal policies and rhetoric sidelined moral economies and advanced monetary silencing. But there is an additional pattern of policies that had silencing effects: the New Deal accommodated the demands of groups that deployed moral economies while denying their monetary agency. Roosevelt’s initial response to World War I veterans was distinct from Hoover’s. When three thousand of them arrived in Washington, D.C., in May 1933, the government accommodated them at an army camp and provided three meals a day. FDR then signed an executive order that allowed enrolling twenty-five thousand veterans in the Civilian Conservation Corps. In the following years, the government “peacefully removed” ten thousand veterans (Ortiz 2010:100–101). In contrast with Hoover’s repression, the New Deal provided jobs. After FDR vetoed the bonus two years later, the White House struck a deal with congressional bonus advocates. In exchange for their support of New Deal tax policy, the administration sanctioned a reconsideration of the bonus in Congress. The next iteration of the bonus bill did not mandate Treasury notes.

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When Congress passed it, the president used his veto power again. In stark contrast with the first veto’s pomp and circumstance, FDR now sent a short handwritten message in which he reaffirmed his opposition but noted that the conservative mode of financing was a step in the right direction (Ortiz 2012:169). FDR’s apparent lack of concern infuriated budgetbalancing cabinet members (169). But FDR’s stance becomes plausible if the president’s actual target was Treasury currency creation, not the early payment of the bonus.13 Congress overrode the second veto in 1936, but the president had isolated moral economies of money from controversies about veterans’ compensation. From this perspective, the White House’s defeat looks like a win. After World War II, the GI Bill made it unlikely that veterans would again become a driving force in money politics (Barber 1996:171).14 Three years before the end of the Bonus issue, when Secretary of Agriculture Wallace visited the Midwest, he proclaimed that the best way of dealing with farmer unrest was to “get more money into farmers’ hands.” In the next months, a loan program tailored to Iowa corn and hog farmers undermined the Farmers’ Holiday Association. A historian of the farmers’ movement notes: “Why press demands when the mail carrier was delivering government checks?” (Shover 1965a:165–67). In the closing months of 1933, the organization faded away. Government credit had weakened the militant core of the Iowa Farmers’ Union. New Deal agricultural programs redirected farmers’ attention away from the money question. If they had participated in moral economies of money until the Great Depression, they now became an interest group that demanded access to credit without engaging monetary design (Gatch 1999). Welfare state institutions in response to popular demands stabilized many money users’ access to money, but the monetary aspects of popular proposals did not materialize. Social Security is a prominent example. The Townsend movement advocated a monthly cash payment to all citizens over sixty, money they were required to spend within a month (Amenta 2008:165). This requirement was meant to increase the velocity of money—the speed with which it changed hands—and stimulate economic life. Hence, this movement of two million members articulated its demands as part of a broader monetary analysis. The Social Security Act

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of 1935—the New Deal’s response to the Townsend movement—fulfilled some of these demands (Amenta 2006) but did not modify money as an institution. New Dealers also established consumer credit facilities, welfare state programs, unionization, and social insurance around facilitating stable and nonstigmatized access to money, primarily for white men.15 As this core group saw their social position stabilized, moral economies of money became less pressing from their perspective. Post–New Deal money politics followed a broader pattern of expanding socioeconomic rights, primarily for white men, at the expense of the right to democratic control over economic life that this group had previously claimed (Rana 2010:236–325; I. Young 1990:66–95). In his second term, Roosevelt continued his anti–Wall Street rhetoric and claimed he had wrested control over money from the “money changers.” Congress continued to ponder inflationist measures and extended the Thomas Amendment. The administration made compromises to defeat an emerging inflationist coalition through silver purchases. But even after the 1937 price collapse, Congress no longer attempted to create greenbacks (Webb 1978:399). Federal lawmakers accepted that fiscal and monetary policy had become compartmentalized and respected the boundary between Treasury money creation and public spending that they had almost torn down in 1933–35.

The Silencing Legacy of the New Deal The New Deal ended the nineteenth-century gold standard, transformed the country’s monetary design, and extended socioeconomic rights, but FDR downplayed the federal government’s monetary agency. In the very period in which budget deficits became legitimate, the president argued that government spending depended on privately supplied cash. Separating monetary and fiscal policy, money creation and public spending, FDR advocated the idea that these were separate areas of practice. While the public and Congress might debate fiscal matters, socioeconomic rights, and the necessity of budget deficits in times of crisis, money creation itself was off limits. If they claimed control over money creation, it would become too

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easy for lawmakers to give in to constituents’ demands, and the country would descend into a hyperinflationary chaos. New Deal rhetoric extended the logic of gold standard thinking into the twentieth century and enabled political actors to deploy the rhetoric of balanced budgets long after the federal government had effectively decoupled its money from gold.

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From New Deal Silencing to a Moral Economy of Money

K A R L P O L A N Y I A R GUE D T H AT S O C IE T IE S would not survive if those who gov-

ern adhered rigidly to the notion that land, labor, and money are commodities that require nothing but a self-regulating market. If they did, societal disintegration and rapid ecological destruction would ensue. Therefore, policy makers systematically violate the market credo and manage humans’ relations with each other but also their participation in ecosystems. For instance, a “pure” gold standard was unworkable: when gold moved across the globe, excess or scarce money would destroy businesses like “floods and droughts” (Polanyi [1944] 2001:76) and cause bouts of unemployment. Therefore, monetary authorities mitigated the effects of such flows when they used reserves and foreign loans. The gold standard, a legal construct that constituted society, not a spontaneous development or a natural arrangement, required constant vigilance by state actors to function, and the idea that money can be a commodity is a sham (Polanyi [1944] 2001:79, 200–209; see also 137–38, 219).When they transgress the market credo but uphold it in public, state and other actors defend the appearance that there is an economic realm that obeys its own logic, preexists politics, and needs to be protected from democracy.1 Democratizing movements, Polanyi argued, reject the idea that there can be institutions that are “economic” by definition and therefore outside 143

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of the political. But their opponents are committed to creating an “economic” realm shielded from democracy. In a discussion of nineteenthcentury politics, Polanyi ([1944] 2001:234) noted that “inside and outside England . . . there was not a militant liberal who did not express his conviction that popular democracy was a danger to capitalism.” And after the Chartists’ defeat, it became the “unwritten law of the Constitution that the working class must be denied the vote. The Chartist leaders were jailed; their adherents, numbered in millions, were derided by a legislature representing a bare fraction of the population, and the mere demand for the ballot was often treated as a criminal act” (234). From this perspective, the fictitious separation of the economic from the political is a constitutive, but historically contingent, aspect of social life. At stake is not an impossible “noninterference” into “the economy” because economic life is always constituted politically. Since the idea of an “economic” realm outside of politics justifies and prompts the denial of expansive democratic governance, what is truly at stake is democratization. In the United States, money has been a central arena for enacting and transgressing the fictitious separation of the economic and the political. When, as in the Jacksonian era and again after World War II, few public actors understood money as a malleable political institution—when moral economies were absent after a process of monetary silencing—it was possible to imagine that there was an economic realm that followed its own rules and was rigidly separate from the political. In contrast, when the political character of the central coordinating process that is money came into view—as in the eighteenth century, and again after the Civil War—it became more difficult to defend the idea that the economic was distinct from the political. If money was a creature of politics, then the rest of economic life was too. Next to the Jacksonian era, the era since World War II is one of the two long periods in which monetary silence made it plausible to consider that the economic and the political are separate realms. This claim is counterintuitive because government “interference” into “the economy” became legitimate during the New Deal and in the first decades after World War II. Yet when it comes to money, New Deal actors enacted a fictitious separation that was not plausible when Depression-era moral economies shaped

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public life. New Deal actors created monetary institutions that allowed them broad policy space but also helped them maintain a fictitious boundary between the economic and the political. And when FDR compartmentalized governance into the fiscal sphere (the realm of political controversy about taxation and spending) and the monetary sphere (mechanisms of money creation, which needed to be protected from democracy), he also advanced this fictitious separation (chapter 6). Advancing the sham separation of the political and the economic meant encouraging people to understand themselves as individual money users who participated only on the “fiscal” side of monetary affairs by paying taxes and voting for public officials who made decisions about public spending (but not money creation). FDR encouraged such an approach to money not only in his speeches but also through the ways in which he integrated people into newly created institutions. The president was in favor of enacting Social Security taxes because he considered that these payments would protect the institution. Those who had paid Social Security taxes for years would allow no one to eliminate or reduce their claims: “No damn politician can ever scrap my Social Security program,” FDR said (quoted in Kelton 2020:263). In a context in which moral economies of money were common, he could have further instructed money users about the federal government’s monetary agency and pointed out that what counted were the real resources available to those who would use Social Security payments to purchase goods and services in the future. He could have connected the new institution with existing moral economies of money, turning people into participants in a monetary governance project, not individual contributors who seemed to depend on hoarding cash in a government account. In a context of exclusion and inequality, the notion that people take part in governance as individuals who contribute their share through monetary payments can have far-reaching consequences and limit democratic governance. In the twentieth century, racist whites’ identity as taxpayers who contributed their share enabled them to make claims against those who, they argued, had not done their part: Black populations, whose children should not have the same access to educational resources as their white counterparts (Walsh 2016). Disconnection from moral economies of money made it plausible to think of money as a finite quantity that

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individual households contributed, and people who enacted their taxpayer identity could attempt to deny good schools to Black populations based on an invented scarcity of public money. Taxpayer identity in the context of segregation and desegregation illustrates the cost of obscuring money’s character as a governance project. The same obscuring also enabled the racial structuring of space in the postwar United States. The Federal Housing Administration (FHA), a government corporation established in 1934, guaranteed the advances banks made to homeowners. Following FHA guidelines and red lines on maps that marked out the racial composition of neighborhoods, banks advanced credit to white neighborhoods but excluded Black people. Thereby, they created racially defined spaces of abundance and deprivation, opportunity and abandonment. But homeowners related to banks as individual debtors, not as beneficiaries of a racially structured monetary governance system. Government agencies, and the populations that benefited from them, presented the governance system that created suburbanization as an arrangement that merely unleashed preexisting “market” forces (Freund 2006). With suburbanization, the obscuring of monetary governance—part of the fictitious separation of the economic from the political—became part of the racial structuring of space. Movements that challenged the exclusivist boundaries of the New Deal order did not break with monetary silencing. In a context of systematic credit discrimination, the Community Reinvestment Movement demanded that banks redirect credit to urban neighborhoods. But they understood banks as intermediaries between savers and debtors, and claimed rights based on their status as deposit holders. If banks accepted their deposits, these activists claimed, they should “return” this money to their community. These money users did not engage monetary design but embraced the idea that money was a scarce quantity of privately owned things, which “kept them from reviving the idea of money as a public good” (Marchiel 2020:99). They attempted to politicize banking without engaging money creation. Similarly, when married women, who were denied consumer credit (Hyman 2012), demanded access to credit cards, they did so without deploying an understanding of money as a public good (Krippner 2017). After World War II, controversies about credit access became separated from an understanding of money as a malleable governance structure.

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There were other prominent attempts to make the New Deal inclusive. The Freedom Budget (1966) promoted full employment as part of the civil rights movement. Its authors demanded federal spending to guarantee massive public job creation and criticized the injustice of fighting inflation at the expense of disadvantaged communities (Stein 2014:186–203). The authors also argued that fiscal policy was not limited by funds: they discussed the federal budget’s “appropriate” size relative to the country’s productive capacity and presented it as an instrument to mobilize resources in the struggle for a just society. They also emphasized that increased government spending would not lead to inflation as long as it would not “do more than our productive resources can support” (A. Philip Randolph Institute 1966:8–11, 14). But the Freedom Budget did not mobilize a moral economic understanding that highlighted how money constitutes society, or spell out the relation between money issuer and money users.2 Monetary design is a form of disguised law, a malleable and alwayspolitical mechanism for authorizing actors to do certain things. We decide against what to issue money: we decide who and what is productive. We curtail credit for certain purposes: we decide that your productive proposition is not a priority. We issue money to you: we authorize you to claim resources and put them to use. Moral economists understood the stakes of monetary design, and so did twentieth-century wartime Treasuries (Willoughby 1934; Levey 2019). In contrast, New Deal monetary silencing created a context in which invisible monetary governance enabled a range of large-scale processes, including Black impoverishment and suburban abundance. Today, a range of policy proposals promise to undermine the separation of the economic and the political because they make the relation between money issuer and money users intelligible, like eighteenth-century bills of credit and Civil War greenbacks. Key among these proposals is the federal Job Guarantee. Such a guarantee would institutionalize the human right to remunerated work by providing a public-service job to everyone who wants it. It would create a job suitable for individuals wherever they live, thereby creating not only possibilities for unemployed people but also an exit option for those who are stuck in exploitative or abusive workplaces. Even if it appears as just one among other labor market policies, an inclusive monetary understanding of society undergirds the Job Guarantee: if

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money is a malleable governance mechanism that the money issuer can deploy to mobilize people and resources, then a lack of money is never an obstacle to hiring people (Tcherneva 2020). Like eighteenth-century moral economists, proponents of the federal Job Guarantee see money as a governance institution that allows lawmakers to arrange a society in a way they deem just. The Job Guarantee illustrates the potential of moral economies of money to denaturalize what are commonly understood as unchangeable features of capitalism. For instance, in the absence of such a moral economy, reliance on private employers for paid work can remain naturalized. If, however, moral economies of money challenge the separation of the economic from the political, situations that once appeared as natural, including reliance on private employers or the “need” to accept a certain level of unemployment, become visible as policy choices. If people understand money as a malleable institution that embodies the nonseparateness of the political and the economic, money can become a critical terrain for denaturalizing capitalism. If today’s money users reconnect with questions of monetary agency, they can not only denaturalize capitalism but also deepen their commitments to revaluing activities and reorienting productive processes. In his climate fiction novel The Ministry for the Future (2020), Kim Stanley Robinson imagines how humanity will confront the catastrophes that are part of global heating in the next three decades. He discusses diplomats’ efforts, clandestine violence, and geoengineering, but he reserves a central role for monetary design. In a critical chapter, he describes how the world’s central bankers decide to issue a supranational currency that rewards people for sequestering carbon. Whenever someone has removed a certain amount, they get credit for it. This monetary design might end our torching of the planet. It also reveals that monetary design not only constitutes social relations but defines the position of humanity within ecosystems. When it teaches readers about the possibilities of monetary governance, The Ministry for the Future encourages money users to take part in moral economies of money that should also become moral ecologies.3

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Notes

Introduction 1. Moral economies of money are an instance of what Aziz Rana (2010) calls the “two faces of American freedom.” 2. Given the exclusivist character of almost all the moral economies of money I discuss in this book, O’Malley’s (2012:5–6) claim that those who de-reified money tended to also undermine the racial ordering of society needs to be revisited. Debates about anti-Semitism and money politics so far have focused on the late nineteenth century and the question of whether Populists were more anti-Semitic than other groups. For arguments about monetary anti-Semitism and Populism, see Hofstadter (1955:77–81), Rogin (1967:173–74), Pollack (1962), Mayo (1988), and Postel (2007:6, 152–53). 3. Todorova (2009) and Jennings (1994) provide theoretical starting points for such a historical analysis. 4. On the MLF, see Federal Reserve (2022). For detailed analyses of the MLF and Federal Reserve operations during the Covid-19 pandemic, see Nathan Tankus’s analyses at www.crisesnotes.com. 5. See, for instance, Desan (2014, 2016), Forstater (2005), Ingham (2004), Kelton (2020), and Wray (1998). 6. This means that a money-issuing government can mobilize existing labor power and resources. If it attempts to mobilize resources that are scarce, inflation may result as other actors who compete for labor power or other resources will offer higher prices. On the limit to government spending from a Modern Monetary Theory (MMT) perspective, see, for instance, Kelton (2020) and Fullwiler, Grey, and Tankus (2019).

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7. For historical evidence about tax-driven money, see, for instance, Forstater (2005) and Graeber (2011). 8. Scott Ferguson (2019) introduces the concept of monetary agency. 9. Carruthers and Babb (1996) offer a different theorization of how an almostworthless object such as paper becomes money. They argue that money’s reification and depoliticization—a collective forgetting of its social construction—are necessary for money’s functioning and that they are a historical norm. From a neochartalist perspective, reification and depoliticization are not necessary dimensions of a monetary system because tax acceptance suffices to create generally accepted pay tokens. The evidence I present in this book supports the neochartalist claim: money users continued to accept currency in periods of politicization, and silencing is a contingent outcome, not a necessary aspect of money’s functioning. Geoff Mann (2013:211) has also proposed a theorization of money’s “non-politics.” He argues that the “monetary exception” to democracy underlies capitalist societies: “The premise behind the entire modern capitalist state is that for capitalism and its attendant liberties to thrive, money is the one social relation in which we must contract with the sovereign, subject ourselves to total authority, and welcome a permanent state of exception.” The evidence I marshal in this book suggests that the monetary exception to democracy, if and when it exists, is a contingent outcome of silencing processes. 10. French monetary institutionalists have developed the concept “monetization regime,” which is similar to Desan’s “monetary design” (see Alary et al. 2020). 11. There are two common ways of misunderstanding banking. (1) According to the intermediary myth, banks are mere money users that intermediate when they lend one customer’s money to another. This view hides bank money creation and mischaracterizes banks as money users when in fact they are today’s main money creators. (2) According to the money multiplier theory, banks “multiply” money deposited with them when they “lend” it to others. In fact, today’s banks extend credit first and then seek to obtain required Federal Reserve settlement balances, also known as “reserves.” See, for instance, Hockett and Omarova (2017), McLeay, Radia, and Thomas (2014), and Ryan-Collins, Greenham, and Jackson (2014). For a nontechnical explanation of bank money creation, see Galbraith (1975). 12. Local currencies were common across the early modern and contemporary world (e.g., Amato and Fantacci 2020). Today, money users often view local currencies as a way of rearranging social relations to correspond with their views of justice (see, for instance, Lee 1996; Dittmer 2013). 13. Unlike the Continental Congress, France’s National Constituent Assembly could not draw on popularly understood money creation forms when it created its revolutionary currency (e.g., Spang 2015:57). Neither were there comparable controversies in the field of money creation in nineteenth-century France, where popular money politics focused on a rejection of banks (Bonin 2011). The United States continued as an outlier in the interwar years and the Great Depression. Political denunciations of banks were common in Europe, for instance when Left governments in France accused financial actors of sabotaging their agenda, an accusation

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they would continue to make throughout the twentieth century (Feiertag 2010). But unlike in the United States, debates about monetary design were limited to narrower groups of policy makers (Perrot 1955). In interwar Germany, the Left had internal policy debates about public money creation (Gates 1974; Winkler 1990), but broader money user involvement was absent. As in earlier periods, only in the United States did money users systematically attempts to shape public money creation (chapter 6; Feinig 2017). There are partial exceptions such as Proudhon in France, the Owenites in Britain, and, later, the Social Credit Movement in Alberta (Canada), but, to the best of my knowledge, in no other polity was popular involvement as systematic and widespread as in the British North American colonies and the United States. 14. In this section I draw on E. P. Thompson’s work (1971, 1993), who developed his studies of moral economy as an antidote to historians’ tendency to analyze crowd actions as irrational outbursts of popular energy. He discussed successful crowd attempts to shape the relation between starving families and merchants who withheld grain to sell it elsewhere at a higher price. For him, moral economies include “substantive and knowledgeable arguments about the working of markets, but about actual markets rather than theorised market relations” (Thompson 1993:275). In a moral economic logic, institutions are servants of social justice, and the “the market” cannot constrain possibilities for rights. Thompson’s concept of moral economy enables historians to analyze crowd knowledge and actions while avoiding the assumption that they are reckless and uninformed intrusions into otherwise pristine markets. 15. Central bank or commercial bank nationalization tends to leave money users’ knowledges and agency unchanged: For instance, the French economist Lipietz (1988) tells the story of a conservative deposit holder who, outraged by a wave of bank nationalizations, wanted to close their account—this money user had not realized that the bank had already been nationalized for decades. 16. Bruno Théret (2008:818) distinguishes between situations in which the “modes of emission, distribution, and circulation [of money] appear to ensure the reproduction of society” according to established values and norms, and situations in which money’s design diverges from these values and norms. In contrast, thinking in terms of moral economies and their silencing highlights that there may be situations in which money users are not in a position to evaluate monetary institutions politically because they have become disconnected from collective knowledge that allows them to understand the institutional functioning of money issuers such as banks. 17. The social theorist Paulo Freire (1985:72) suggests that silence about central political issues is part of a relation between those who have a voice and those who do not. “Understanding the culture of silence,” he writes, requires “an analysis of dependence as a relational phenomenon that gives rise to different forms of being, of thinking, of expression, to those of the culture of silence and to those of the culture that ‘has a voice.’” Monetary silence is a form of dehumanization because naming, understanding, and transforming the world are the very activities that make us human (88), and the culture of monetary silence is a denial of the openness at the heart of

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democratic processes. For another important theorization of silence as a relational practice, see D. Smith (1987). 18. In this book, “treasury currency” denotes pay tokens that a treasury issues without promising to convert them into anything else (such as a fixed quantity of gold). The treasury promises only to accept these pay tokens in payment to itself. 19. D. Smith (1990:103) argues that such disjunctures—which she calls “ideological breaks”—are a general feature of capitalist modernity’s institutional world. 20. See, for instance, Mankiw’s (2004:321) popular textbook. 21. Not all silencing processes are intentional. For instance, the idea that individual financial literacy alone can help oppressed and exploited groups get ahead has silencing effects because it moves the emphasis from monetary design to the individual level, bracketing the all-important question of who can create money in the first place, for whom, and according to what rules. At the same time, I know of no evidence that promoters of financial literacy have the intention of contributing to monetary silence. 22. From this perspective, they veil metaphor is a form of symbolic violence that targets those who have less. On money and symbolic violence, see Théret (2008:836). 23. On the vernacular political theory of bitcoin, see Golumbia (2016). 24. See note 4. 25. Two contemporary pioneers in the sociology of money, Viviana Zelizer and Geoffrey Ingham, approach their topic from opposite directions. Zelizer (1994, 2000) privileges the micro level, viewed through a cultural lens, while Ingham (2001, 2004, 2006) interrogates large-scale institutions from a political economy perspective. In contrast, the focus on the constitution of money users and money issuer(s) over time compels me to straddle the culture-political economy divide and to investigate the connection between money’s institutional design and money users’ everyday knowledges. In other words, I see the monetary constitution of society as a matter of culture as well as institutions, everyday experience as well as political economy.

Chapter 1 1. Reproductions of these bills of credit are in Newman (1967:91–93, 249–55, 300, 322). 2. See, for instance, Colman ([1720] 1910) and Wise ([1721] 1911), two pamphlets I discuss in chapter 2. 3. In just the first of the four volumes of colonial currency pamphlets compiled by A. Davis (1910a), this expression appears twenty-nine times, a count that underestimates the ubiquity of the logic of money scarcity because it does not include occurrences of expressions with similar or identical meaning, such as “want of money.” Such expressions appear in almost all economic pamphlets of this period. See also Miller (1927:26–28 and passim). 4. Even though it is tempting to think that public authorities defined colonial units of account in terms of specie only, it is important to remember that they also decreed other equivalencies. While for transatlantic traders and their partners the

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unit’s specie definition might be the most important, for smallholders the equivalence with agricultural staples was of greater practical concern: for those who were allowed to use grain to pay taxes and discharge a debt with a storekeeper, this was the relevant definition of the unit of account. 5. To create convergence among colonial currencies, imperial authorities set a ceiling on overvaluation in 1704, limiting it to one-third above the sterling value (Chalmers 1893:11). 6. On the expression “imaginary money,” see Einaudi (2006). Marc Bloch (1939:15) noted that the noncoincidence of the unit and the means of payment since medieval times shaped “economic mentalities” over the long run. 7. On the hierarchy of money, see Bell (2001) and Mehrling (2015). 8. A merchant who issued similar notes claimed that he was forced to do so because of the legislature’s failure to provide adequate currency (Behrens 1923:46; for reproductions of additional examples, see Newman 1967:83, 119, 189, 194, 259). 9. This bill of credit is reproduced in Newman (1967:124). 10. On “the London coffee-house,” see Conroy (1995:161n8). 11. On Blackwell, see A.Davis (1910c:206–7), Ashley (1962:9, 103–4), and Nuttall and Nuttall (1964). 12. A few years earlier, when he had attempted to establish a bank, Blackwell ([1687] 1910) had argued that money scarcity hindered social mobility and allowed an exploitation of debtors by creditors. Class-tainted language is absent from his appeal to wealthy Bostonians four years later. 13. The law that authorized the first bills of credit justified it as a wartime necessity but also pointed to the “present poverty and calamities . . . the want of an adequate measure of commerce” (quoted in Felt 1839:49). It was not merely an expedient but a policy. 14. There was a precedent for Massachusetts bills of credit: in 1667, the treasury had issued treasury receipts that circulated among the population (Nettels 1934:251). 15. For a similar incident in Dedham, see Lockridge and Kreider (1966:560). For a discussion of town-level monetary decision-making, see Newell (1998:181–93). 16. For an economist’s overview and analysis of colonial currencies across British North America, see Grubb (2016). 17. Proprietors were quasi-vassals of the Crown motivated by economic gain. “Many of the proprietors,” one historian notes, “had undertaken these enterprises as distinctly commercial investments, considering that their right of government was only incidental to their general right of property, and, like that, was to be worked to its full value” (E. Greene 1966:11). 18. On the tensions between proprietors and legislature regarding quitrents, see Bond (1965). 19. See Baker (2005) for a discussion of the Sotweed.

Chapter 2 1. On Jubilee practices in the early modern Atlantic world, see Linebaugh (1991). 2. See, for instance, “New News” ([1720] 1910:131).

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3. For a similar quote, see Cotton Mather ([1721] 1968:120). On the concept of monetary racism and its connection with Locke, see Valayden and Feinig (forthcoming). 4. Desan (2016) notes that “the market” is the outcome of (1) deciding what can be bought and sold and (2) designing monetary institutions. This passage is worth quoting at length: “The very definition of what can be ‘sold’ is determined by working out the legal operation of money. The outcome created by keeping money out of some transactions [people, organs, land] and demanding it for others [enforceable debt] shapes what we recognize as ‘the market.’ When we consider that conclusion in light of money’s formative role engendering exchange in the first place, the market loses its aura of autonomy. Rather, the market has been dependent on its medium, money, from start to finish. And money, it turns out, has been dependent on law, that very human project of decision that defines our obligations, the government’s commitments, its structure, and what we call commodities” (31). 5. After imperial policies had constrained freeholder influence on money politics via the electoral process, pamphleteers became more radical. Instead of asking voters to challenge gentry interests through elections, like Colman in 1720, the pro–Land Bank merchant Hugh Vance ([1740] 1911:2) argued that money users’ consent was part of the nature of money. Legal tender status could confirm collective acceptance, but the law alone was powerless. For him, money was intrinsically a democratic medium. Such an argument was plausible to money users in mid-eighteenth-century Massachusetts. For instance, the prohibition of tendering and accepting Rhode Island notes had little effect. Not only did they lack legal tender status, their use was forbidden, yet they still circulated. In addition, merchants’ agreement to refuse these notes to prevent them from circulating soon faltered (A. Davis 1901:124; A.Davis 1910b:74–75). In this context, it was plausible to argue that neither the government nor members of a privileged class, acting in concert, could silence money users. To bolster his point, Vance turned the notion of “intrinsic value” upside down. Inherently valuable were the substances necessary for the reproduction of human life such as air and water. Silver or paper, conversely, received value by “common consent,” and their value was merely “accidental.” Because they depended on consent, not intrinsic value, specie and paper were in the same category. Bills of credit, he reminded readers, in addition, had an “explicit Promise on the face of them” (Vance [1740] 1911:3)—tax acceptance. Compared to the contractualist arguments Mather and Blackwell had advanced half a century earlier, Vance’s understanding of money reflected, justified, and prompted increased freeholder involvement in money creation: instead of taking a contract between population and government as money’s foundation, Vance emphasized money users’ revocable consent. When they attempted to establish the Land Bank, settlers demonstrated that they could engineer generalized acceptance in a process that occurred parallel to the formal structures of imperial governance. 6. When several towns established local land banks, Attorney General Dudley’s fear that banks would spring up everywhere also materialized (A. Davis 1901:132). 7. For a different take on town-level Land Bank politics, see Brooke (1989:61–62).

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8. For the impact of the Currency Ban on Massachusetts and political responses to it, see Newell (1998); for Pennsylvania, see Bouton (2007) for North Carolina, see Weir (1963) and Kars (2002). For overviews, see J. Greene and Jellison (1961) and Ernst (1973). 9. On the case of North Carolina, see Kars (2002:67, 165). 10. Historians of colonial taxation find it impossible to discuss taxation without writing about that in which people discharged their dues. For instance, Taxation in Colonial America (Rabushka 2008) pays almost as much attention to the politics of money as it does to taxation. Conversely, historians who write about colonial money creation cannot do so without also writing about the public levies that drove them (e.g., Brock 1975).

Chapter 3 1. See, for instance, Mihm (2007); Wilentz (2005); and Meyers (1953). 2. One formula, known as “the plan,” proposed to retire the war debt in the following way. Bonds were to be evaluated for their present market value and then exchanged for new bonds that corresponded to it. These new IOUs would be retired through payment of taxes and dues. This method saved the taxpayers money because bonds retained only about 25 percent of their face value. But current owners still profited because they had typically paid less than half of that. Moreover, the plan addressed cash scarcity because the new bonds could circulate as currency until retired. The plan would have turned the bonds into paper currency (Bouton 2007:114–18). 3. On Shays’ Rebellion, see, for instance, Richards (2002) and Gross (1993). On the financing of the military response to Shays and its connection to US state formation, see Feinig (2020). 4. See chapter 2 and a literature that includes Kars (2002), Rosswurm (1987), Holton (2008), Bogin (1988), Karsky (1976), Clark Smith (2011), Szatmary (1980), and Fritz (2008:9–116). 5. For much of the antebellum era, the bulk of the specie supply was foreign coin (D. Martin 1977). Specie flowed into the country from Mexico, Cuba, and the West Indies and, as in the colonial era, exited in the direction of East Asia (Knodell 2017:138–53). Nominally on a bimetallic system, undervaluation of gold in the United States caused its outflow, and the country was on a de facto silver standard (Eichengreen 2008:12). 6. In the antebellum era, bank money also entered circulation when a bank purchased assets for itself, or when it exchanged notes with a distant banking corporation (J. Greenberg 2020:23–24). 7. Instead of promising specie payment, today’s banks pledge to convert deposits into higher-level money (Federal Reserve notes) on demand. They also promise to convert deposits into Federal Reserve settlement balances (high-level state money also known as reserves) when deposit owners want to pay taxes. 8. At first, they tended to accept state bank notes regardless of the bank’s status; later, they accepted only the notes of specie-paying banks (Nathan Tankus, personal communication, April 2021). If the Second Bank of the United States considered

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that a state bank was “specie-paying,” money users could use the latter’s currency to pay federal taxes (Knodell 2017:57). 9. For banking controversies along Federalist-Republican lines in Massachusetts, see Goodman (1964:170–81); in New Hampshire, Appleby (2000:54); in Rhode Island, Bodenhorn (2003:13–14); and in New York, Wright (1998). When they write the political history of money in the early nineteenth century, historians highlight the differences between Jeffersonians and Federalists. While the former wanted a country characterized by relatively equal settler-producers (farmers and artisans), the latter saw a concentration of the ownership of the means of production as desirable. Generally, Jeffersonians were more suspicious of corporate banks (Wilentz 2005; Hammond 1962). From the perspective of monetary silence, the two parties agreed almost as much as they differed because neither challenged the prohibition of state-level bills of credit, and both participated in the politics of bank chartering. 10. For the number of chartered banks and the antebellum money supply, see Historical Statistics (2006), tables Cj142 and Cj54–69. For reproductions of state bank notes, see Haxby and Bellin (1988). 11. Even if state lawmakers elected bank directors in proportion to the publicly owned stock, assemblies were more disconnected from day-to-day decision-making than in the era of bills of credit. 12. In this section, I draw heavily on Browning (2019). 13. A printer, a journalist, and later a Treasury official, Gouge was a chief promoter of Jacksonian monetary views. In 1829, he coauthored an influential antibank tract in the context of a Philadelphia workers’ protest (Wilentz 2005:357). His History of Paper Money and Banking (Gouge [1833] 1968) became a best seller, several newspapers serialized it, and it was widely read among workers (J. Greenberg 2008:58; Rader 1963; Dorfman 1968). 14. For a historicization and critique of the idea that money enables unmediated two-way exchanges, see S. Ferguson (2018:33–66 and 2019:1–2). 15. For similar quotes, see Lord (1829:124). See also D. Martin (1973:825–26). 16. In the logic of eighteenth-century moral economies, credit preceded production: emitting bills of credit enabled settlers and artisans to establish themselves, buy equipment, and develop public infrastructure. It was the task of governance institutions to establish credit-creating institutions, which issued currency as they did so. Credit, in the form of currency, was a precondition for prosperity. Jacksonians turned this view upside down: now, specie, the only real money, first needed to be acquired by producers, who could then lend it to others (Gouge [1833] 1968:36). Gouge ([1833] 1968:121) argued that low-level currencies such as promissory notes did not depend on arbitrary state privileges and were adequate credit instruments for the country. 17. In the case of the Second Bank of the United States, whose notes were accepted in payment of federal taxes, Gouge ([1833] 1968:42, 85) considered the same mechanism illegitimate and presented it as an unjustifiable privilege, part of the creation of a false equivalence of specie and paper. 18. See Lepler (2013:218–21) for a detailed description of how Gouge imagined the Independent Treasury as a transparent and neutral arrangement.

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19. Karl Polanyi (2001) called this public boundary-drawing exercise the “double movement” and saw it as distinct from a genuine democratization of economic life, and an obstacle to it (Holmes 2013; Feinig 2018). 20. Marx (1977:32) noted that “the abstraction of the state as such belongs only to modern times, because the abstraction of private life belongs only to modern times. The abstraction of the political state is a modern product.”

Chapter 4 1. There were several precedents for such a measure because Congress had responded to antebellum emergencies such as the War of 1812 (but not to moral economies) by issuing Treasury currency. The 1812 currency had held up well, and some money users had preferred it to corporate bank notes (e.g., J. Greenberg 2020:58). At the same time, Treasury currency had not led to broader popular involvement. Given these precedents, and given that the Jacksonian fixation on specie had shaped monetary critique for decades, lawmakers had no reason to think that the currency they authorized would reshape political life for decades. 2. For an overview of Civil War finance in the North and the South, see McPherson (2003:437–42). 3. National banks had two sources of profit: the interest on the government bonds (paid in specie) and the interest on its notes from its debtors. 4. To generate specie revenue for interest payments, the Union required customs duties to be paid in gold or silver coins. 5. The government considered these IOUs part of the budget deficit and the national debt, along with greenbacks (Noll 2012:6n20). 6. It is customary to say that the Union was more successful than the Confederacy because it taxed more and successfully issued more bonds instead of merely “printing money” (e.g., McPherson 2003:437–42). Such arguments can be misleading because they can imply that the government borrowed and taxed more and that “money printing” was less important. In fact, the federal government needed to issue most of the currency it taxed or borrowed before it could tax or borrow. 7. Congress enacted a 10 percent tax on state banks to promote national banks. 8. McPherson (2003:447) notes that wartime inflation in the Union was 80 percent, comparable to World Wars I and II. 9. Viviana Zelizer (1994) argues that in the postbellum United States the federal government homogenized money, a process that encountered resistance from money users because they wanted to maintain locally specific monetary practices. However, postbellum moral economies emerged as a part of demands for a homogenous currency when groups of money users urged that bondholders accept the same currency as soldiers. 10. On the relation between Jacksonian, Greenback, and Populist thought, see Rothstein (2014). 11. In Virginia, an alliance between poor Blacks and whites stayed in power for several years (Ali 2010:22).

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12. The merchant was connected to big-city wholesalers and large cotton purchasers. Wholesalers knew the store owner’s credit via rating agencies, which asked merchants to evaluate each other. Representatives of wholesale houses also established an internal credit rating system (Clark 1964:14–15, 81, 87). 13. For a then-popular novel that depicts local credit monopolists’ abuses, see Q. Martin (1996). 14. In addition, the platform demanded a postal savings system to enable money users to bypass banks. It also considered that the amount of money in circulation ought to be a public decision rather than the decision of banking corporations, and they demanded a minimum of $50 per capita.

Chapter 5 1. Hilkey (1997:11) notes that “the same family who might entertain a book agent selling success manuals that hailed the virtues and victories of the man who could ‘go it alone’ might also attend a huge, open-air meeting to hear a speaker from the Farmers’ Alliance explain the advantages of joining others in a cooperative movement to defeat or bypass the bankers.” Similarly, both William Jennings Bryan and the motivational speaker Russell Conwell were popular speakers at Chautauqua, an educational institution of the middle classes (Rieser 2003). 2. Barnum chose this example for a reason. England’s national debt was owed to the Bank of England, a corporation and a model for the Bank of North America and the Banks of the United States. Paying back the national debt in full—the pauper’s plan—meant abolishing the Bank of England because it issued its notes against government bonds. But more importantly in the American postwar context, doing so “without the aid of a penny” could mean using the power of the law to retire bonds by issuing legal tender paper currency. Or it could mean buying back government bonds from national banks, doing away with their note issue privilege, and replacing blackbacks (national bank notes) with greenbacks (see chapter 4). 3. Turning the bullionists’ arguments on their head, Norton claimed that the ceremonial value of gold depended on its status as money. Anticipating Veblen’s (2007) arguments about conspicuous consumption, published a decade later (1902), he argued that ornaments and jewels should be considered a display of wealth and power, not a display of beauty. 4. While in Ten Men, the banker (Discount) is not racially defined and (re)turns to manual labor once banking is abolished, other Populist narratives implicitly or explicitly define the figure of “the banker” as a permanent and racially defined adversary, Jews. A number of Populist texts mention the supposed role of “Shylocks” in economic life, promoting a type of anti-Semitism that was common across classes and was shared by political actors from both parties (e.g., Postel 2007:6, 152–53).

Chapter 6 This chapter draws on material published as Feinig (2017). 1. On the Euro, see, for instance, Ehnts (2016).

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2. For a brief overview of the US banking system in this period, see De Cecco (1984:110–14). 3. A Federal Reserve Board, staffed by seven presidential appointees in addition to the Comptroller of the Currency and the secretary of the Treasury, was to decide about Reserve banks’ interest rates and reserve requirements. The twelve Reserve banks established throughout the country were headed by governors elected by the commercial banks that were members of the system in that district. 4. In contrast to Treasury currency, an intelligible relation between the Treasury and money users, the Federal Reserve System invited controversy about its most basic features—was the Fed public or private? (see e.g., Greider 1987). 5. In addition, the administration pioneered the use of a government corporation, the War Finance Corporation, to fund production related to the conflict. Policy makers also established the Capital Issues Committee, a federal body whose task it was to restrain the financing of nonessential production to free up productive resources for the war effort (Willoughby 1934). The War Finance Corporation was also the model for the Reconstruction Finance Corporation, which enabled massive credit creation to support banks during the Great Depression (J. Olson 1988). 6. Bearer bonds are securities that are not connected to a registered owner and can therefore circulate. 7. During penny auctions, allies of the individual who faced foreclosure bought the property for pennies and prevented others from bidding with the goal of returning the property to the original owner. 8. In his standard account, the historian Alan Brinkley (1982:269–83) argues that before 1936, anti-Semitism was not central in Coughlin’s sermons. But the priest’s claim that the gold standard, the central target of moral economies, was due to Jewish influence makes anti-Semitism central even if anti-Semitic claims do not constantly appear in his broadcasts. Later, when the Jewish Treasury secretary Henry Morgenthau accused him of silver speculation, Coughlin referred to silver as the “gentile” metal (Brinkley 1982:270), implying that gold was Jewish. 9. For an account of FDR’s position on gold that highlights the role of his advisers, see S. Edwards (2017). For a discussion of fiscally conservative FDR advisers, see J. Zelizer (2000b). 10. I have not found any occurrence of the term monetary policy in the Iowa Union Farmer, the B.E.F. News, or Coughlin’s 1933 collection of sermons. 11. In his memoirs, the New Deal’s Fed chair Marriner Eccles promoted a distinct understanding of money within the administration to promote more public spending (Brinkley 1995:78–83). “It is incorrect,” he wrote, “to think of the federal government as though it were an individual, a family, a city, or a state. All parties other than the federal government are obliged to play according to the established rules of the private financial game. Unless their outgo balances their income, they ultimately go broke. But the federal government is in a different category. . . . It alone has the power to issue money and credit” (Eccles 1951:79; see also 82, 104, 130, 211). Eccles’s conception of money contrasts with FDR’s public statement that the federal government is a money user comparable to an individual.

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12. This claim was paradoxical because no currency that was convertible into gold circulated. 13. Tactical concerns also motivated FDR: if Congress overrode the veto, the bonus would not be an issue around which New Deal dissenters could coalesce during the 1936 presidential campaign, and FDR would preserve his record of opposition to early payment, pleasing conservatives. Partly because the bonus was no longer an issue, Roosevelt triumphed in the election of 1936 (Ortiz 2010:169). 14. From money users’ perspective, World War II finance mirrored the invisible forms of World War I money creation (Sparrow 2011:119–59) that did not encourage moral economies of money, even if the Treasury saw its role as directing real resources (Levey 2019). 15. See, e.g., Amenta (2006), Barber (1996), Freund (2006, 2007), Hyman (2012), and Ortiz (2012).

Conclusion 1. This is how Polanyi (1935:393) imagined a democratization of economic life: “Encouragement of the initiative of all producers, discussion of plans from every angle, comprehensive oversight of the process of industry and of the rôle of the individuals in it, functional and territorial representation, training for political and economic self-government, intensive Democracy in small circles, education for leadership, are the characteristics of a type of organization which aims at making society an increasingly plastic medium of the conscious and immediate relationship of persons.” See Holmes (2013). This conclusion draws on Feinig (2018). 2. They had good reasons to distance themselves from Greenbackism: at the time, Wright Patman, the former bonus advocate, prominent congressional Greenbacker, and critic of financial actors, chaired the House Committee on Financial Services. A few years earlier, Patman had signed the Southern Manifesto against Brown v. Board of Education. 3. See the Money on the Left interview with Kim Stanley Robinson (S. Ferguson et al. 2021).

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Index

bitcoin, 11, 152n23 Black Republicans, 97 blackbacks. See national banks Blackwell, John, 23–28, 38, 153n11 Bland-Allison Act (1878), 95 Board of Trade, 34, 47 Bonus March, 12, 123, 124, 131, 136– 140, 160n13 book money: colonial, 15, 18, 19, 21, 27, 28, 33, 35, 48; postbellum 98, 99, 107, 135–136 Bryan, William Jennings, 102–104, 113, 117, 119, 122, 129

acceptance of money. See tax receivability; legal tender laws Agricultural Adjustment Act (1933), 131–133, 137, 141 antebellum state banks, 65–69, 72–73, 77, 78, 81 anti-Semitism, 2, 125, 126, 149n2, 158n4, 159n8 Babb, Sarah, 150n9 balanced budgets, 30, 81, 116, 137, 140–142, 147 bank deposits, 5, 9 Bank of England, 5, 26, 158n2 Bank of North America, 58, 61, 62 Bank War, 77–79 banks. See corporate banks Barnum, P.T., 105, 106, 158n2 Belcher, Jonathan, 47, 49, 53–55 bills of credit, 14–68 passim; compared with other monetary forms, 78, 79, 81, 121, 147 bimetallism, 95, 102, 104, 106, 114, 155n5

California Authority for Money, 126 Carruthers, Bruce, 150n9 Chinese demand for silver, 15, 16, 18 class relations, 4–5; eighteenth century, 19, 24, 35, 39, 41–46, 49–54, 58, 62, 63; antebellum, 72–74; postbellum 94, 97–102, 110, 113–117; Great Depression, 122, 131. See also debtor-creditor relations Colman, John, 40–44, 47–48

183

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Index

Colored Farmers’ National Alliance, 101 Community Reinvestment movement, 146 Congress and treasury currency, 1, 70, 89–91, 123, 131, 136. See also war debt controversies constitutional theory of money. See Desan, Christine; monetary constitution of society Continentals, 57 Conwell, Russell, 105, 158n1 corporate banks: legal definition, 65; common misconceptions, 150n11; antebellum state banks, 65–69, 72–73, 77, 78, 81. See also Bank of North America; Second Bank of the United States; national banks Coughlin, Charles, 124–127, 135, 136, 159n8 Coxey’s Army, 1, 102, 113 Craig v. Missouri (1830), 70 credit. See debtor-creditor relations; war debt controversies crop lien system, 98–100, 110 Currency Acts (1751 and 1764), 55, 56 debtor-creditor relations: eighteenth century, 18, 19, 38, 42, 50; antebellum, 69; postbellum, 98, 110, 114, 115; Great Depression, 122, 125, 131, 132 deflation. See prices Democratic Party, 87–92, 97, 102, 104, 131 Desan, Christine, 4, 5, 7, 11, 26, 154n4 Discourse Concerning the Currencies of the British Plantations in America, A (William Douglass), 50–53 Distressed State of the Town of Boston, &c., The (John Colman), 40–44

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Douglass, William, 50–53 Dudley, Paul, 39, 40 Eccles, Marriner, 131, 159n11 Emergency Banking Act (1933), 129, 130 Ewing, Thomas, 92–94 Farmers’ Alliance, 99, 100, 102 Farmers’ Holiday Association (FHA), 122, 123, 127, 131, 140 Farmers’ Union, 122, 125, 131, 132, 134, 140 Federal Housing Administration, 146 Federal Reserve System: Federal Reserve Act (1913), 119; World War I, 119–122; Great Depression, 126, 129, 133, 135, 136; Covid-19 pandemic, 2, 3; central bank settlement balances, 150n11, 155n7 Federalist-Republican controversies, 66, 67, 156n9 Ferguson, Scott, 60, 150n8 fiscal policy as inseparable from monetary policy: colonial institutions, 30, 37, 155n10; Stamp Act crisis, 56, greenback era, 85; Great Depression, 137 Freedom Budget, 147 Freire, Paulo, 151n17 gender relations, 18, 42, 146 General Assembly (Pennsylvania legislature), 33 General Court (Massachusetts legislature), 29–33, 43, 47, 48 Gold Reserve Act (1934), 135 Gold Standard Act (1900), 117 gold standard: postbellum, 104, 106, 108, 113–117; Great Depression and New Deal, 123–139 passim goldbugs, 104, 109, 114, 117, 130

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Index Gouge, William, 72–76, 80, 156n13, 156n16, 156n17 governor (colonial Massachusetts), relation with House of Representatives, 29, 30, 33, 40, 47; relation with Board of Trade, 47; Land Bank controversy, 49, 53–55 Grant, Ulysses S., 89, 91 Greenback Party, 91, 96, 97 greenbacks: Civil War and postbellum 82–96, 100–104, 107, 109, 121; Depression-era controversies, 124, 128–141 Hamilton, Alexander, 58, 62 hierarchy of money, 18; colonial era, 18, 19, 21, 22; antebellum, 65, 66, 71; postbellum 98–99; Great Depression, 126 Homo economicus, 106, 114 Hoover, Herbert, 124, 126, 128, 129, 139 imaginary money, 17, 153n6 “independence” (socio-political ideal), 2; colonial era; 34, 41, 42, 44, 45, 51, 59; antebellum, 72, 73 Independent Treasury, 79, 80, 101 inflation bill (1874), 91 inflation. See prices Ingham, Geoffrey, 152n25 Interest: colonial era, 18, 32–34, 38, 39; antebellum, 61, 65, 72; Civil War and postbellum, 84, 85, 87- 90, 98, 102, 110–112, 115; twentieth century, 120, 122, 125, 134 Iowa, 77, 122, 125, 127, 134, 140 Jackson, Andrew, 78, 79 Jacksonian monetary critique, 72–77 Job Guarantee, 147, 148 jubilee, 39, 125

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labor notes, 75, 76 Land Bank controversy (colonial Massachusetts), 47–56, 63, 154n5 land banks, 34–35, 58, 61, 62, 64, 154n6 legal tender laws: colonial era, 18, 21–23, 26, 28, 35–37, 40; British prohibition, 55, 56; Bank of North America, 58; crisis of the 1780s, 62; Constitution, 64, 65; Jacksonians, 80; Civil War, 84–86; postbellum controversies, 88, 93, 95, 101 legislatures (colonial era), 37. See also General Court (Massachusetts legislature), General Assembly (Pennsylvania legislature) Locofocos, 79, 101 Madison, James, 65 Marx, Karl, 51, 106, 157n20 Maryland (colonial currency), 35, 36 Massachusetts Land Bank, 47–56, 63, 154n5 Massachusetts mint, 22 Mather, Cotton, 23–28 McAdoo, William Gibbs, 120, 121 Ministry for the Future (Kim Stanley Robinson), 148 Missouri loan office (1821), 70–71 Moley, Raymond, 129 monetary agency, 6, 9, 11–13, 150n8; before the Constitution, 14, 40, 50, 51, 58, 61, 64, 65; restructured by the Constitution, 64, 65; antebellum banks, 61, 67–68; Jacksonian critique, 75, 81; postbellum era, 83, 97, 104–5, 109, 110, 113; New Deal obscuring, 118, 127, 130, 137, 139, 141, 145 monetary constitution of society, 2, 4, 5, 7, 8, 81, 82

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monetary design, 4–11; colonial era, 15–23, 27–29, 31–37, 47, 48, 50–52, Constitution, 63–65, 67; Jacksonians, 77–81; Civil War, 83–85, 89–96, 100, 101; Federal Reserve System and World War I, 119–121; Great Depression and New Deal, 126–130, 134–136, 140 monetary policy as inseparable from fiscal policy: colonial institutions, 30, 37, 155n10; Stamp Act crisis, 56, Civil War era, 85; Great Depression, 137 monetary silencing, 2, 9–12; colonial era, 50–54, 59; Constitution, 64–65, 79, 79, 81; postbellum, 105, 106, 113– 116; New Deal, 127–145 passim monetary theory: medieval English, 26; neochartalist, 3–5; orthodox, 10 money issuer(s), 2–6. See also Treasury (colonial Boston); Treasury (US); corporate banks; Congress and treasury currency; promissory notes; shinplasters money users, 3, 4 moral economies of money, 7–9; colonial era, 15, 38, 41–50, 56; War of Independence, 57–59, 61–63; Constitution, 64–65; antebellum, 71, 81; postbellum, 83, 84, 88–91, 93, 97, 99, 102, 103, 105–111, 113, 117; Great Depression, 118, 119, 122–126; FDR’s response, 127–145 passim; Job Guarantee, 147, 148; climate change, 148 Morris, Robert, 57–59 multiple currencies, 15 municipal finance (colonial), 27–29, 31, 33, 48, 49 national banks: Civil War finance, 83–85, 157n3, 157n7; postbellum

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controversies 88, 89, 91, 94, 99, 100, 158n2 Navigation Acts, 16, 56 neochartalism, 3, 4, 150n9 neutrality, myth of money’s, 10 New Deal, 126–142, 144–146 oral promises to pay, 18, 19 Paine, Thomas, 59 Panic of 1819, 69–72 Panic of 1873, 90–91 Parliament, 54–6 Patman, Wright, 123, 124, 139, 160n2 Peffer, William, 111, 112 Pendleton, George, 88, 89 Pennsylvania monetary controversies: colonial 14, 33–35; War of Independence, 55–58; after Independence, 61–63, 68 penny auctions, 122, 159n7 People’s Party, 101–103 Pequots, 20 pet banks, 79 philanthropy, 51 Polanyi, Karl, 143, 144, 157n19, 160n1 popular understanding of money: colonial era, 14, 17, 18, 22, 29, 33, 37; antebellum, 66–69; Civil War, 84, 85; postbellum, 87–103 passim; Federal Reserve and World War I, 119–121; Great Depression, 122–126 prices: and unit of account, 17, 37; eighteenth century, 19, 42–47, 57, 62, 69; gold standard, 115–116; Great Depression and New Deal, 122–139 passim; postbellum, 90, 93, 98–100, 101, 113 privatization of money creation, 58, 61 producerism, 72. See also “independence” (socio-political ideal)

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Index promissory notes, 18, 19, 21, 25, 33, 35, 48, 156n16 Public Credit Act (1869), 89, 90, 101 public works financed by treasury currency. See Congress and treasury currency Quincy, Edmund, 31 Race: anti-Semitism, 2, 125, 126, 149n2, 158n4, 159n8, 45–46; colonization 19–21, 45, 46; Great Depression, 126, 127; monetary racism 154n3; moral economies and racist social order, 4–6; O’Malley’s theorization of money and race, 149n2; redlining, 146. See also Reconstruction, Black Republicans, Colored Farmers’ National Alliance, Democratic Party, Republican Party, Greenback Party, People’s Party Reconstruction, 87, 88, 97 redlining, 146 Reno, Milo, 122, 123, 125, 127, 134 Republican Party, 87, 89, 91, 92, 94, 97 Resumption Act (1875), 91, 94, 95, 97 Resumption of specie payments after the Civil War, 86, 90–97 Roosevelt, Franklin D., 118, 126–141, 160n13 Second Bank of the United States (SBUS), 66, 69, 77–79, 155n8, 156n17 Shays’ Rebellion (1786–1787), 63 Sherman Silver Purchase Act (1890), 95 shinplasters, 71, 77, 94 Short History of Paper Money and Banking, A (William Gouge), 72–75 silver certificates, 95, 109, 126, 135

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187

Silver: Chinese tax laws and global demand, 15, 16, 18; in Spanish and British colonial America, 15–17, 22; Massachusetts controversies, 24, 44, 49–53; tensions with Britain, 56; Constitution, 64; Jacksonians, 74, 75, 80; postbellum, 88, 93–95, 102, 105, 108, 109, 115, 117. See also bimetallism; “crime of 1873;” silver certificates Sinclair, Upton, 126 Smith, Dorothy, 152n19 Social Security, 140, 145 Some Additional Considerations [. . .] (John Blackwell), 23–27, 28 Some Considerations on the Bills Credit now passing in New-England [. . .] (Cotton Mather), 23–27, 28 Sotweed Redivivus (Ebenezer Cook), 76 Spanish colonial North America, 15, 16, 22 Stamp Act (1765), 56 state banks, 65–69, 72–73, 77, 78, 81 Stevens, Thaddeus, 85, 89 subtreasury plan, 100–102 tax receivability: neochartalist monetary theory, 3, 4; silver in China 15, 16, 18; wampum, 20, 21; bills of credit, 23–27, 66; staples, 27–29, 35, 36; Land Bank currency, 48–49; Currency Act (1764), 55–56; Stamp Act (1765), 56; Constitution, 64; Second Bank of the United States, 66; antebellum state banks, 66, 155n8; Missouri loan office (1821), 70; 85; Jacksonian critique, 72, 80; Independent Treasury, 79; municipal currency, 71, 126; greenbacks, 84; blackbacks (national bank notes), 85; Federal Reserve currency, 120

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188 Ten Men of Money Island (Seymour Norton), 107–113 Théret, Bruno, 151n16 Thomas Amendment (1933), 131, 133, 137, 141 Thomas, Elmer, 131, 134, 135 Thompson, Edward P., 151n14 time stores, 75–6 tobacco warehouse notes, 35, 36 Townsend Movement, 140“crime of 1873,” 95 treasury (colonial Boston), 22–30, 33, 48, 53 Treasury (US): antebellum, 70, 71, 79, 80; Civil War era, 84–86, 93, 94, 100, Great Depression and New Deal, 120, 121, 133, 135, 136 unemployment, 6, 69, 71, 90, 104, 112–113, 147 unit of account, 17, 18, 20–23, 28, 29, 33, 37, 49

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Index unmediated monetary relations, 11, 74–79, 81, 82, 156n14 veto (chief executive): colonial era, 29, 40, 47; Andrew Jackson, 78; Ulysses S. Grant, 91; FDR, 132, 136, 137, 139, 140, 160n13 Virginia (colonial currency), 35 Wallace, Henry, 131, 140 wampum, 19–22, 25 war debt controversies: colonial era, 22–26; War of Independence, 61– 64; Civil War, 84, 85, 87–91 Weimar Germany, 132, 151n13 Wise, John, 44–46 Woodford, Stewart, 92–94 Woodin, William, 129 Word of Comfort to a Melancholy Country, A (John Wise), 44–46 Zelizer, Viviana, 15, 152n25, 157n9

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CUR R E NCIE S New Thinking for Financial Times STEFAN EICH AND MARTIJN KONINGS, SERIES EDITORS

Charly Coleman, The Spirit of French Capitalism: Economic Theology in the Age of Enlightenment Amin Samman, History in Financial Times Thomas Biebricher, The Political Theory of Neoliberalism Lisa Adkins, The Time of Money Martijn Konings, Capital and Time: For a New Critique of Neoliberal Reason

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