Organise a full, regular circulation, which no accident can disturb.
Instead of taxes, always increasing and always insufficient, abolish all taxes; Let all merchandise become current money, and abolish the royalty of gold.
But I must point out in advance some of the prejudices which, as the result of long habit, prevent us, at this time from seeing the true cause of the evil, and from discerning the remedy. To be on the look-out for error is to be half the way along the road which leads to truth.
The first of these prejudices consists in the desire to reform everything in detail, instead of attacking the whole; in taking up difficulties one after another, and resolving them in turn in the way common sense seems to indicate: whereas economic questions, essentially contradictory in themselves and among themselves, must be solved all at once, through some dominant principle which respects all rights, ameliorates all conditions, and conciliates all interests.
Another prejudice is the one which, attributing the cause of poverty to the imperfect organisation of labour, concludes that labour should be regimented; that it is in that part of the social organism—labour—that the remedy should be applied. People will not understand that human labour and individual liberty are synonymous; that, except for fairness in exchange, the liberty of labour must be absolute; that governments exist only to protect free labour, not to regulate and to restrain it. When you speak in this way of organising labour, it is as if you propose to put a straitjacket on liberty.
A third prejudice, resulting from the preceding one, is that which, suppressing individual initiative, would seek to obtain everything through authority. One can say that this prejudice is the leprosy of the French spirit. We ask the State for everything, we want everything from the State; we understand only one thing, that the State is the master and we are the servants. The analogy to this prejudice, in the field of economics, is that which makes gold the universal motivating force. Gold is for us the principle of production, the sinew of commerce, the substance itself of credit, the king of labour. That is why we all worship gold even as we worship authority.
It is the business of the State, I repeat, only to pronounce on the justice of economic relationships, not to determine the manifestations of liberty. Also in the matter of justice, the state has only the right to enforce the general will. A fourth prejudice, finally, and the most deplorable of all, is that which, under the pretext of harmony and fraternity, tends to destroy in society the divergence of opinion, the opposition of interests, the battle of passions, the antagonism of ideas, the competition of workers. It is nothing less than the motion and life that would be thus cut off from the social body. Therein lies the fatal error of communism.
A great effort of reflection is, however, not necessary to understand that justice, union, accord, harmony, fraternity itself, necessarily presupposes two opposites; and that, unless one falls into the absurd notion of absolute identity, that is to say, absolute nothingness, contradiction is the fundamental law, not only of society, but of the universe.
That is also the first law which I proclaim, in agreement with religion and philosophy: that is Contradiction—the universal Antagonism.
But, just as life implies contradiction, contradiction in its turn calls for justice; which leads to the second law of creation and humanity: the mutual interaction of antagonistic elements, or Reciprocity.
Reciprocity, in creation, is the principle of existence. In the social order, reciprocity is the principle of social reality, the formula of justice. It has for its basis the eternal antagonism of ideas, of opinions, passions, capacities, temperaments, interests. It is the condition of love itself.
Reciprocity can be expressed in the precept: Do unto others as you would have them do unto you: a precept which political economy has translated into this celebrated formula: Products exchange for products.
It is therefore not the organisation of labour which we need at this moment. The organisation of labour is the proper object of individual liberty. He who works hard, gains much. The State has nothing further to say, in this respect, to the workers. What we need, that which I call for in the name of all workers, is reciprocity, equity in exchange, the organisation of credit.
[…]
THE BANK OF EXCHANGE
PUBLIC CREDIT ORGANISED, labour restored and value decreed, nothing is left but to organise circulation, in the absence of which production is impossible.
This point is the summit of the revolution.
We have driven out the last of our kings, we have cried: Down with monarchy! Long live the Republic! But you can believe me, if the doubt has come to you, there are in France, there are in all Europe only a few lesser princes. Royalty is always in existence. Royalty will subsist as long as we will not have abolished it in its most material and most abstract form—the royalty of gold.
Gold is the talisman which congeals life in society, which binds circulation, kills labour and credit, and makes slavery mutual.
We must destroy the royalty of gold; we must republicanise specie, by making every product of labour ready money.
Let no one be frightened beforehand. I by no means propose to reproduce, under a rejuvenated form, the old ideas of paper money, money of paper, assignats, bank-bills, etc., etc.; for all these palliatives have been known, tried and rejected long ago. These representatives on paper, by which men have believed themselves able to replace the absent god, are, all of them, nothing but a homage paid to metal—an adoration of metal, which has been always present to men’s minds, and which has always been taken by them as the measure or evaluator of products.
[…]
Everybody knows what a bill of exchange is. The creditor requests the debtor to pay to him, or to his order, at such a place, at such a date, such a sum of money.
The promissory note is the bill of exchange inverted; the debtor promises the creditor that he will pay, etc.
“The bill of exchange,” says the statute, “is drawn from one place on another. It is dated. It announces the sum to be paid; the time and place where the payment is to be made; the value to be furnished in specie, in merchandise, in account, or in other form. It is to the order of a third person, or to the order of the drawer himself. If it is by 1st, 2nd, 3d, 4th, etc., it must be so stated.”
The bill of exchange supposes, therefore, exchange, provision and acceptance ; that is to say, a value created and delivered by the drawer; the existence, in the hands of the drawee, of the funds destined to acquit the bill, and the promise on the part of the drawee, to acquit it. When the bill of exchange is clothed with all these formalities; when it represents a real service actually rendered, or merchandise delivered; when the drawer and drawee are known and solvent; when, in a word, it is clothed with all the conditions necessary to guarantee the accomplishment of the obligation, the bill of exchange is considered good; it circulates in the mercantile world like bank-paper, like specie. No one objects to receiving it under pretext that a bill of exchange is nothing but a piece of paper. Only—since at the end of its circulation, the bill of exchange, before being destroyed, must be changed for specie—it pays to specie a sort of seigniorial duty, called discount.
That which, in general, renders the bill of exchange insecure is precisely this promise of final conversion into specie; and thus the idea of metal, like a corrupting royalty, infects even the bill of exchange and takes from it its certainty.
Now, the whole problem of the circulation consists in generalising the bill of exchange; that is to say, in making of it an anonymous title, exchangeable forever, and redeemable at sight, but only in merchandise and services.
Or, to speak a language more comprehensible to financial adepts, the problem of the circulation consists in basing bank paper, not upon specie, nor bullion, nor immovable property, which can never produce anything but a miserable oscillation between usury and bankruptcy, between the five-franc piece and the assignat; but by basing it upon products.
I conceive this generalisation
of the bill of exchange as follows:
A hundred thousand manufacturers, miners, merchants, commissioners, public carriers, agriculturists, etc., throughout France, unite with each other in obedience to the summons of the government and by simple authentic declaration, inserted in Le Moniteur, bind themselves respectively and reciprocally to adhere to the statutes of the Bank of Exchange; which shall be no other than the Bank of France itself, with its constitution and attributes modified on the following basis:
1st The Bank of France, become the Bank of Exchange, is an institution of public interest. It is placed under the guardianship of the state and is directed by delegates from all the branches of industry.
2nd Every subscriber shall have an account open at the Bank of Exchange for the discount of his business paper; and he shall be served to the same extent as he would have been under the conditions of discount in specie; that is, in the known measure of his faculties, the business he does, the positive guarantees he offers, the real credit he might reasonably have enjoyed under the old system.
3rd The discount of ordinary commercial paper, whether of drafts, orders, bills of exchange, notes on demand, will be made in bills of the Bank of Exchange, of denominations of 25, 50, 100 and 1,000 francs. Specie will be used in making change only.
4th The rate of discount will be fixed at—percent, commission included, no matter how long the paper has to run. With the Bank of Exchange all business will be finished on the spot.
5th Every subscriber binds himself to receive in all payments, from whomsoever it may be and at par, the paper of the Bank of Exchange.
6th Provisionally and by way of transition, gold and silver coin will be received in exchange for the paper of the bank, and at their nominal value.
Is this a paper currency?
I answer unhesitatingly, No! It is neither paper money, nor money of paper; it is neither government checks, nor even bank-bills; it is not of the nature of anything that has been hitherto invented to make up for the scarcity of specie. It is the bill of exchange generalised.
The essence of the bill of exchange is constituted—first, by its being drawn from one place on another; second, by its representing a real value equal to the sum it expresses; third, by the promise or obligation on the part of the drawee to pay it when it falls due.
In three words, that which constitutes the bill of exchange is exchange, provision, acceptance.
[…]
In the combination I propose, the paper (at once sign of credit and instrument of circulation) grows out of the best business-paper, which itself represents products delivered, and by no means merchandise unsold. This paper, I affirm, can never be refused in payment, since it is subscribed beforehand by the mass of producers.
This paper offers so much the more security and convenience, inasmuch as it may be tried on a small scale, and with as few persons as you see fit, and that without the least violence, without the least peril.
[…]
We have said before that all economic negations overlap one another and generalise themselves, especially in the negation of money considered as an emblem of value and instrument of exchange. There are few economists today who, upon reflection, do not admit the possibility of such a reform; but it is no less true that in the theory of the old political economy—the highly praised English political economy, which they strive to implant among us as they already have implanted constitutional monarchy—the idea of abolishing specie is supremely absurd, as absurd as the thought of abolishing property.
[…]
PRODUCTS EXCHANGE FOR PRODUCTS
Products exchange for products: This aphorism of political economy is no longer contradicted. Socialists and economists are in accord with the fact and the law, it is common ground where theories are reconciled, and opinions unite on the same doctrine.
Exchange is direct or indirect: What must we do to make possible direct exchange, not only among three, four, six, ten or one hundred traders, but among one hundred thousand, between all producers and all consumers; simply this: centralise all the operations of commerce by means of a bank in which all the bills of exchange, drafts and sight-bills representing the bills and the invoices of merchants, will be received. Then generalise or convert these obligations into paper of equivalent value, which, in consequence, will itself be a pledge of the products or real values that these obligations represent.
Bank paper so issued would have all the qualities of first class paper.
It would not be subject to depreciation since it would be delivered only against actual values and acceptable bills of exchange, and would be based, not on manufactured products, but on products sold and delivered, for which payment would be required. There would be no danger of excessive emission, since they would be delivered only against first class commercial paper—that is to say, against promises of certain repayment.
No one would refuse it, since, by the fact of the centralisation of exchanges, all citizens would become members of the bank. The most remarkable fact to be noted in this constitution of the bank is not so much the idea in itself, an idea more simple perhaps than the one which gave birth to money, but the coincidence of the employment of specie with the regime of feudal property and with the monarchical organisation of society.
We have pointed out several times and we cannot repeat it too often: as long as the family had to live, by its own activity and like a little world in itself, on property, property has been the principle and the cornerstone of the social order.
During that period, the infrequency of exchanges, the scarcity of transactions, called exclusively for the employment of specie. The agent of circulation had to carry in itself its guarantee so as to be accepted. That was the age of gold, even as it was the age of royalty.
But when, by the multiplicity of labour, by the division of industries, by the frequency of exchanges, circulation became the principal factor in the economy of nations, individual property became, as we have said, an obstacle to collective life, and the employment of specie became nothing but the sign of privilege and of despotism, the same as the royal prerogative was the sign of corruption and of tyranny.
Therefore, society, in its development, destroys or transforms its former work. It is when we have acquired full knowledge of this law that revolutions can come peacefully.
Royalty, property, specie: this is the monarchical trinity which we have to demolish, the triple negation that sums up for us entirely the revolutionary movement begun in February.
For as we shall prove, all negation—that is to say, all reform in religion, philosophy, rights, literature, art—brings us to the negation of property, and, property abolished, we shall see what we want to put in place of property, in place of authority, in place of God.
All this having been posited, so that what follows will be better understood, we place before our readers the project, as we had planned it, of a Bank of Exchange.
[…]
The object of the Association is:
First, particularly and immediately, by the institution of the Bank of Exchange, to procure for every member of the Association, without the aid of specie, all products, whether commodities, merchandise, services or labour.
Second, ultimately, to reorganise agricultural and industrial labour by changing the condition of the producer.
The association is universal. All citizens, without exception, are invited to join. No funds are required; for membership it will suffice to sign the present by-laws, and to agree to accept, for all payments, the paper of the Bank of Exchange.
The association has no capital. Its existence is perpetual.
The Bank of Exchange is an essentially republican institution; it is a paradigmatic example of government of the People by the People. It is an active protest against any re-establishment of hierarchical and feudal principles: it is the concrete abrogation of all civil and political inequality. The privilege of gold having been abolished, all privileges disappear. Equality in exchange, necessarily re
sulting from the mutuality of exchange, becomes in its turn the basis of the equality of labour, of real solidarity, of personal responsibility, and of absolute liberty. The Bank of Exchange, finally, is the principle, the means and the measure of wealth, of universal and perpetual peace.
[…]
Through its influence, its knowledge, and its credit, the Bank of Exchange promotes, inspires, encourages, supports, and sponsors all agricultural, manufacturing, commercial and scientific enterprises, etc., that workers’ associations may attempt, when these present sufficient guarantees of competency, morality, and success.
[…]
The Bank of Exchange is an institution of public interest; as such, it is under the State’s supervision but is independent of it.
The State is a member of the same standing as all citizens. It takes no part in the management, and does not interfere directly or indirectly with its administration.
[…]
The administration of the Bank is in the hands of a Board of Directors under the supervision of a Council of Oversight.
[…]
The members of the Board are elected for five years by the General Assembly and are eligible for re-election.
[…]
Any member of the Board of Directors can be suspended from his office by the Council of Oversight and can only be reinstated by a two-third vote of the General Assembly.
THE COUNCIL OF OVERSIGHT
The Council of Oversight shall be elected annually by the General Assembly.
It is composed, like the General Assembly itself, of delegates chosen by all branches of production and of the public service. The number of these delegates shall not at any time exceed thirty.
The State shall be represented by the Minister of Justice, who shall be chairman of the Committee by virtue of his office in the Government.
The Council of Oversight shall have the absolute right of control.
[…]
It has the right to convoke the General Assembly in extraordinary session, and to request the resignation of any or all of the members of the Board.
Property Is Theft! Page 39
