"The Debtor Class"

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Title:     "The Debtor Class"
Author: Edwin Lawrence Godkin [More Titles by Godkin]

A Washington correspondent, describing, the other day, the motives which animated the majority in Congress in its performances on the currency question, said, and we believe truly, that most of the inflationists in that body knew very well what the evils of paper-money were, so that argument on that point was wasted on them. But they knew also that large issues of irredeemable paper would make it easier for debtors to pay off their creditors, and came to the conclusion that as the number of debtors in the country was greater than the number of creditors, it was wise policy for a politician to curry favor with the former by helping them to cheat the persons who had lent them money or sold them goods. This explanation of the conduct of the majority may be a startling and sad one, but that it is highly probable nobody can deny. All the debates help to confirm it. In every speech, made either in opposition to resumption or in favor of inflation, a portion of the community known as "the debtor class" has appeared as the object of the orator's tenderest solicitude. The great reason for not returning to specie payments hitherto has been the fear that contraction would press hard on "the debtor class;" it is for "the debtor class" we need more paper "per capita;" and indeed, no matter what proposal we make in the direction of financial reform, we are met by pictures of the frightful effects which will be produced by it on the "debtor class." Moreover, in listening to its champions, a foreigner might conclude that in America debtors either all live together in a particular part of the country, or worse, a particular costume, like mediaeval Jews, and are divided from the rest of the community by tastes and habits, so that it would be proper for an American to put "debtor" or "creditor" on his card as a description of his social status. He might, too, not unnaturally begin to mourn over the negligence of the framers of the Constitution in not recognizing this marked distribution of American society. Truly, he would say, the debtors ought to have representatives in the Senate and House to look after their special interests; these unfortunate and helpless men ought not to be left to the charitable care of volunteers like Messrs. Morton, and Logan, and Kelly. The great sham and pretence with which America has so long tried to impose on Europe, that there were no classes in the United States, ought at last to be formally swept away, and proper legal provision made for the protection of a body of men which has been in all ages the object of atrocious oppression, and seems in America, strange to say, to constitute the larger portion of the community. In travelling through the country, too, he would be constantly on the lookout for the debtors. He would ask in the cities for the "debtors' quarter," and when introduced to a gentleman in the cars or in the hotels, would inquire privately whether he was a debtor or a creditor, so as to avoid hurting his feelings by indiscreet allusion to specie or contraction. His amazement would be very great on learning that there was no way of telling whether an American citizen was either debtor or creditor; that the "debtor class" was not to be found, as such, in any part of the country, or, indeed, anywhere but in the brains of the Logans and Mortons, and was introduced into the debates simply as a John Doe or Richard Roe, to give a little vividness to the speaker's railings against property.

Now, as in every civilized society, the vast majority of the population of this country are in debt, to some slight degree. It is only paupers, criminals, and lunatics who owe absolutely nothing. The day-laborer is pretty sure to have a small bill at the grocer's, and all his neighbors, in the ascending grades of commercial respectability, no matter how prompt and accurate they may be in the discharge of their obligations, are sure to owe the butcher and baker and milkman a greater or less amount. In fact the conduct of life on a cash basis would be impossible or intolerable. Of course, too, there are scattered all over the country men who owe a great deal of money and to whom little is due, and whose interest it would be to have the coinage adulterated. But then the number of these persons is very small, and they are mostly great speculators, who pass for rich men, and whose interests Congress is in reality not in the least desirous of protecting. Poor men, as a rule, are hardly ever greatly in debt, because nobody will trust them. We suspect that the number of those in this city who could borrow fifty dollars without security would not be found to be over one-twentieth of the population. The persons to whom loans are made by banks, insurance companies, and other institutions are almost all men of wealth or men who have the conduct of great enterprises, and do not need legislation to help them to take care of themselves. They are great merchants, or manufacturers, or brokers, or contractors, or railroad-builders. In fact, in so far as the debtors can be called a class, they form a very small class, and a class of remarkable shrewdness and of enormous power, over whom it is ludicrous for the Government to exercise a fatherly care.

The bulk of the population in this, as in every moderately prosperous community in the western world is composed of creditors. The creditor class, in other words, contains the great body of the American people, and any legislation intended to enable debtors to cheat is aimed at nineteen-twentieths, at the very least, of American citizens. Any mail who remains very long in the position of a debtor simply, and acquires no footing as a creditor, disappears from the surface of society. Bankruptcy or the house of correction is pretty sure to overtake him. It would be well-nigh impossible in this large city or in any other to find a man who had no pecuniary claims on someone else. The humblest hod-carrier becomes a creditor every day after making his first ascent of the ladder, and remains so until Saturday night, and continually replaces himself in "the creditor class," as long as life and health remain to him; and the same phenomenon presents itself in all fields of industry. Every sewing-girl and maid-servant is looking forward to a payment of earned money, and has the strongest interest in knowing for certain what its purchasing power will be.

All depositors in savings-banks, and their number in New York City is greater than that of the voters, belong to the creditor class; all holders of policies of insurances, all owners of government bonds and State and bank stocks, belong to it also. The Western farmers and house-owners who have borrowed money at the East on bond and mortgage, who probably make as near an approach to a debtor class as any other body or persons in the community, and whom Congressional demagogues probably hoped to serve by enabling them to outwit their creditors, even these are not simply or mainly debtors. Any man who is carrying on his business with borrowed money, on which he pays eight or ten per cent., must be every week putting other people in debt to him or he would speedily be ruined. The means of paying those who have trusted him is acquired by his trusting others. Either he is selling goods on credit, or entering into contracts, or rendering services which give him the position of a creditor, and make it of the last importance to him that the value of money and the state of the public mind about money should not be materially different six months hence from what they are now.

Of course there is more than one way of defining the term "self-interest." There is one sense in which it is used by children, savages, and thieves, and which makes it mean immediate gratification, and this appears to be the sense in which it is used by the inflationists in Congress, in considering what is for the good of those Western men who owe money at the East. In that sense, it is a good thing for a man to lie, cheat, steal, and embezzle whenever it shall appear that by so doing he will satisfy his appetites or put money in his pockets. But civilized and commercial, to say nothing of Christian, society is founded on the theory that men look forward and expect to carry on business for several years, and to lay up money for their old age, and establish their children in life, and that they recognize the necessity of self-restraint and loyalty to engagements. The doctrines, on the other hand, which are preached in Congress about the best mode of dealing with debts--that is, with other people's money--have never before been heard in a civilized legislature, or anywhere outside of a council of buccaneers, and, if acted on by the community, would produce anarchy. The fact that Morton and Butler, who preach them and get them embodied in forms of words called "acts," are legislators, disguises, but ought not to disguise, the other fact, that these two men are simply playing the part of receivers or "fences." There probably never was a more striking illustration of the immorality in which, as it was long ago remarked, any principle of government is sure to land people if pushed to its last extreme, than the theory which is now urged on our attention--that superiority of numbers will justify fraud; or, in other words, that if the number of those who borrow should happen to be greater than the number of those who lend, "a vote" is all that is needed to wipe out the debts, either openly or by payment in bits of paper or pebbles. Of course, the converse of this would also be true--that if the lenders were in a majority, they would be justified in reducing the debtors to slavery. If the question of humanity or brotherhood were raised as an objection, that, too, could be settled by a ballot. We laugh at the poor African who consults his wooden fetish before he takes any step in the business of his wretched and darkened life; but when a Caucasian demagogue tries to show us that the springs of justice and truth are to be found in a comparison of ten thousand bits of paper with nine thousand similar bits, we listen with gravity, and are half inclined to believe that there is something in it.

[The end]
Edwin Lawrence Godkin's essay: "The Debtor Class"

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