Individual Liberty - Evernote

very small. Thus gold would be needed only to settle this trivial balance, and so slight
a demand would furnish very little incentive for a corner.
I have now examined all the evidence adduced by Mr. Wright to show that demand
notes can surely stand against a run (the only question that I am now discussing with
him), and I claim, on the strength of this examination, that the evidence leads to
precisely the opposite conclusion.
Mr. A. W. Wright has an interesting article in Electrical Engineering on
"Governmentalism versus Individualism in Relation to Banking." It is thoroughly and
avowedly Anarchistic, and is written in answer to criticism directed against Mr.
Wright's financial views by the so-called Professor Gunton.
Mr. Wright's paper is admirably brave and earnest, and presents the case for liberty in
banking with great force. Nevertheless, there are grave heresies in it, among them the
assertions that it is impossible to get bank-bills into circulation without agreeing to
redeem them on demand, and that an I0U cannot be made secure without totally
destroying the economic reason for its existence." The reasons for the existence of an
I0U are two in number: first, the desire of the giver of the I0U for an advance of
capital; second, the generally-felt necessity of a circulating medium. Practically these
two reasons are but one, since the desire of the giver of the I0U for an advance of
capital is almost always a demand for that form of capital which will most readily buy
all other forms, - that is, currency.
Now, to say that a man who needs more capital than he has, but who already has an
amount of capital sufficient to enable him to secure his I0U by giving a mortgage, has
therefore no reason to issue an I0U, or to say that such an I0U, when issued, will not
be received by others in exchange for goods because it is secured, is to go to the
extreme length of possible economic absurdity. Yet it is precisely what Mr. Wright has
said. He should have said, on the contrary, that, unless liberty in banking will result in
the issue of I0U's as secure as the best financial mechanism can make them, this
liberty itself will lose much the weightier part of its reason for existence, becoming
merely one of many petty liberties, - good enough in themselves, but not screaming
necessities, or pregnant with great results. If financial liberty will not result in a secure
currency, it will do nothing to lessen the exploitation of labor. But in Anarchistic eyes
the destructive effect of liberty upon human exploitation constitutes ninety-nine per
cent. of its value, and, if it will not have such effect, Mr. Wright is wasting his time in
writing sixteen-page articles in its favor.
In all polemical writing there frequently occurs the necessity of interpreting the
language or statements of an author. Such an occasion arose concerning a sentence in
Col. William B. Greene's work on "Mutual Banking," which made necessary the
following analysis by the editor of Liberty:
Some months ago Comrade Henry Cohen wrote a letter to the Conservator in which
he declared that the ultimate of the mutual bank note is not redemption, but
cancellation. He may not have used exactly these words, but they do not misrepresent
the position that he took. The object of his letter was to show that the mutual bank
note is not redeemable in specie by its issuer. In a later issue of the Conservator I