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[written for a forthcoming number of De Bow's Review.]
borrowing at home and borrowing abroad — the cotton loan.
by George Fitzhugh.

If to carry on the war we were to borrow in England two hundred and fifty millions of dollars, at the proposed rate of interest, principal redeemable in sixty years, we should in that time pay to our English creditors, in way of interest, more than one thousand millions of dollars; besides paying back the principal. One thousand millions of dollars would thus be transferred from our Confederacy to England. We should be that much the poorer, and England that much the wealthier, by the operation.

If we borrow that amount from our own citizens, we should save in sixty years one thousand millions, and the nation in the aggregate be not one cent the loser or the poorer for the loan.

All interest is but taxation. In the first case the tax collected would go to foreigners and reduce to that amount our national wealth; in the latter case, it would be paid to our home creditors, and would not diminish our national wealth.

When we borrow money abroad we but acquire the privilege of using our own credit, for money does not breed nor labor, and therefore has no value in the use, human labor alone producing all values, and money being the mere counters which keep the game of trade. If we would credit one another, we should not need money. England tried this experiment with signal success during the long period of the suspension of her National Bank.

The credit of Government is always better at home than abroad, and the prudent and sensible statesman will never borrow one cent abroad, because he thereby makes his country tributary to foreigners, and diminishes national wealth.

But we are in the full tide of successful experiment on this subject. We have substituted bank notes and Treasury notes and Treasury bonds for money, and trade gets along very well in the absence of a metallic currency.

The people trust the Bank and the Government, not because they expect their liabilities will ever be literally redeemed in money, but in money's worth. They believe that the Banks and the Government can command the results or products of human labor, to an amount equivalent to their indebtedness. Human labor alone possesses value, and impresses value on its results. Money is the result of human labor, and represents and is exchanged for the amount of labor required to procure it from the mine and form it into coin. This is its only real value; its interest is the taxing power which it possesses, in common with other kinds of capital. Capital, whether in lands, houses, money, or aught else, commands labor, (as the master commands the labor of the slave,) when it is hired, rented, or loaned out, except when the capital or a part of it is consumed in the use — for capital does not breed or produce values.

To illustrate and exemplify: If I build a house with the proceeds of my own labor, and rent it out for ten per cent. on the cost, whilst the annual wear and tear and decay are only four per cent. on my capital, is the amount of labor or its results, which I command, on exploitate, without paying for it, or returning an equivalent in labor or labor's worth.

Again, if I amass ten thousand dollars by my labor, and exchange the principal so acquired for the labor, or products of the labor of other people, I give value for value; but, if I retain the ten thousand dollars and live on its interest, I give no values in exchange for the values on which I live. I command annually six hundred dollars' worth of human labor. I am a slaveholder to the amount of my capital. I own property in man, or in man's labor, to the amount of ten thousand dollars, which yields me an income of six hundred dollars a year. I live without paying for anything. All capital is amassed human labor, with the power to command more of human labor, by being loaned out, hired, or leased, or to pay for or be exchanged for human labor by purchasing with part of its principal. All capitalists are virtually slave owners, for capital has no other value but as a means of commanding or being exchanged for human labor.

Human labor alone give or is value; and as property is what possesses value, property in human labor, or its product is the only property; but property in human labor is property in man, therefore property in man is the only property. If we borrow money in Europe, we sell American labor to the value of the amount borrowed. Our creditors become our masters, and purchase our labor without giving one cent in exchange; for we

are bound to return the amount borrowed, and money by its use does not breed or produce values.

The Irish are the slaves of the English, because the capital of Ireland — its lands, money loaned out, or engaged in trade. &c.--is chiefly owned in England. If we incur large debts, whether individual or national, in Europe, and Europeans become owners of stock in our banks, railroads, &c., we shall thereby become their tributaries or slaves.

But it may be replied, ‘"There is no way of preventing the non-property holders from becoming the slaves or tributaries (if you prefer) of the property-holders. Despite of the Declaration of Independence, and similarity of skin and color, the poor are born slaves, the rich born masters; and if we borrow money at home, we shall only have masters at home instead of abroad."’ This is all very true; but it makes all the difference in the world where our masters reside and expend their incomes. They can eat, and drink, and wear very little of their incomes themselves, and when spent at home it encourages and pays well all kinds of industry.

Besides, the men who lend to Government are already masters (in the sense which we employ the term) of the poor. They can lend their money to private individuals, invest it in stocks, houses, or other capital, and collect taxes from the labor of the country just as well as by lending it to Government. We do not diminish our liberty by the Government's borrowing of our own citizens, but we partially sell ourselves and our posterity when we borrow from foreigners.

This subject of exploitation is the most difficult in the world to comprehend, yet it is now eminently practical, present, and pressing. For a fuller explanation of it, we refer the reader to the first four chapters of one own work, ‘"Cannibals All. "’ We do so because, at present, no other treatise on the subject is accessible to the Southern public.

A parcel of croakers declare that the cotton loan is a failure. So far from this being true, it has already done much good by inspiring the people with universal confidence in one another and in our Confederate Government, and, besides, given currency to the Confederate notes. It is the true basis on which the credit of those notes rests, and is as good a basis of credit as gold or silver, (for which cotton can readily be exchanged;) for it is daily appreciating in value, whilst gold and silver are depreciating. We say, it may readily be exchanged for gold and silver, because Europe needs it, and cannot much longer do without it.

So far from being a failure, this cotton and provision loan, if persevered in, will prove to be a master-stroke of statesmanship and of financial policy. Men of substance throughout the Confederacy becoming thereby the creditors of our Government, will more warmly sustain it and aid it, in all measures to attain independence and preserve union. This loan builds up at once a great conservative interest, which will do more to perpetuate our institutions than all the paper compacts and written constitutions in the world.

Besides, as we have already shown, if we borrow two hundred and fifty millions, in this way, at home, instead of borrowing it abroad, we shall thus save to the Confederacy a thousand millions of dollars in sixty years, and preserve our people from becoming slaves or tributaries to foreign nations or foreign creditors.

The negro slave enjoys but part of the proceeds of his own labor. He is fed, clothed, furnished wood, housed, and provided with all necessaries for himself and family, yet he is not in these respects provided as well as he usually might be if all the proceeds of his labor were appropriated to his support and maintenance. His master exploitate a portion of them. Bad and cruel masters exploitate their slaves a great deal, good masters but little, and over-indulgent masters not at all; hence they have often to sell a part of their idle negroes to support the balance; yet, nine negroes out of ten are better provided and maintained out of the balance left, after the master's exploitation, than they would be had they no masters, and enjoyed all the results of their voluntary labor. 'Tis necessary to exploitate negroes by giving them a certain defined master.

But it is not necessary that Europeans should exploitate the people of this Confederacy to the amount of twenty millions of dollars a year, (the interest, at eight per cent., on two hundred and fifty millions,) for they will work without foreign masters.

Our independence will avail us little, if by it we only exchange masters. The true cause of war between the sections is not abolition, but the fact that the South refused any longer to be exploited, or exploitered, or exploitated, (we find it written all three ways,) by the legislation, skill, and capital of the North. She exploited us by the tariff, which taxed our labor to pay a premium to hers. She exploited us enormously in the profits arising from foreign trade, which her great capital, aided by a protective tariff, enabled her exclusively to appropriate. She exploited us by her schools, her colleges, her universities, her watering places, her teachers — male and female — her parsons, her drummers, her peddlers, her showmen, her editors, her publishing houses, her newspapers, her circulars, her reviews and magazines; in fine, by the combined agencies of legislation — capital, skill, cunning, and fraud. By these various means, she exploited us of the results of our labor, by exchanging a little of the products of her labor for a great deal of that of ours. We resembled negro slaves in this, that we did not enjoy all the proceeds of our labor. But here the resemblance ended, for the negro gets careful protection in return for being exploited — we only get abuse, threats, and flagrant injustice.

The cotton loan, if successfully carried out, will go far to prevent our becoming the slaves of foreign capitalists.

England, with her mighty capital, wonderful manufacturing production, and extended commerce, is rapidly enslaving an unconscious world. Probably, she receives in interest on debts due from foreign nations and individuals, and in dividends on foreign stock, not less than a thousand millions of dollars a year. They who pay her this annual amount are her slaves, because a part of the proceeds of their labor is taken away without consideration, or payment therefore.

These English masters have none of the cares, troubles, and vexations of our cotton planters. They live in palaces, eat roast beef and plumb-pudding, drink port wine, smoke Havanas, and take their evening siesta with none to disturb them. When all the world becomes tributary to English skill and capital, all the world will be. more or less, enslaved by England.

We have already said that slavery to foreign capital was worse than slavery to domestic capital, because in the latter case the tax levied or exploitated by it from the laboring class was in great measure returned by its being spent at home, thereby giving profitable employment to labor and diversifying industrial pursuits. We should have added that wealthy capitalists residing at home do much to relieve the distresses of the poor by private charity, and still more by payment of poor rates

It is true, that both private and public charity are but a return to the poor of part of their earnings, for the laboring class in realit, creates all values, supports the poor, supports the Government, and creates the fund from which both public and private charity are dispensed.

If we become indebted to England, her capitalists will dispense in public and private charity in England the hard earnings of American labor. The cotton loan, in keeping capital at home, will tend far to keep the earnings of labor at home, and thus provide a fund to give employment and good wages to the laboring poor, and from which to distribute charitable relief to those who need and deserve it.

The credit of a new Government just starting into life is as delicate and as sensitive as the reputation of woman, and should not be questioned except from imperious necessity. To attack the Secretary of the Treasury, or his measures, is apt to injure the credit of Government, and no patriot will do so, unless he be fully assured that the man is incompetent and his measures injurious to public weal. No country needs money to carry on war so long as it can get money's worth. This it can obtain so long as the products of the country suffice to support the people at home, and to furnish a sufficient surplus to support Government and defray the expenses of war; provided the people have confidence in the integrity and permanence of Government, and in its ultimate ability to pay its debts.

The cotton loan is striking evidence of this confidence, and pregnant cause of begetting more and more confidence. To assail it is to attempt to undermine the credit of the Government at its very outsmart in life and in the midst of war.

The paper of the Confederacy answers now all the purposes of money at home, and we have an abundance of cotton and tobacco to answer as a currency abroad so soon as we can deal abroad. Destroy public confidence in the cotton and provision loan, and you will impair, if not destroy, the currency of Confederate paper, stop the wheels of Government, and disband the army.

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