counterfeit, this splendid proletarian uprising, glowing with energy, enthusiasm and hope, allowed itself to be snuffed out of existence. What a tragedy was there!

THE PANIC OF 1837

Passing over the Equal Rights movement in 1834 which was a diluted revival of the Workingmen's Party, and which, also, was turned into sterility by the treachery of its leaders, we arrive at the panic of 1837, the time when Astor, profiting from misfortune on every side, vastly increased his wealth.

The panic of 1837 was one of those periodic financial and industrial convulsions resulting from the chaos of capitalist administration. No sooner had it commenced, than the banks refused to pay out any money, other than their worthless notes. For thirty-three years they had not only enjoyed immense privileges, but they had used the powers of Government to insure themselves a monopoly of the business of manufacturing money. In 1804 the Legislature of New York State had passed an extraordinary law, called the restraining act. This prohibited, under severe penalties, all associations and individuals not only from issuing notes, but "from receiving deposits, making discounts or transacting any other business which incorporated banks may or do transact." Thus the law not only legitimatized the manufacture of worthless money, but guaranteed a few banks a monopoly of that manufacture. Another restraining act was passed in 1818. The banks were invested with the sovereign privilege of depreciating the currency at their discretion, and were authorized to levy an annual tax upon the country, nearly equivalent to the interest on $200,000,000 of deposits and circulation. On top of these acts, the Legislature passed various acts compelling the public authorities in New York City to deposit public money with the Manhattan Company. This company, although, as we have seen, expressly chartered to supply pure water to the city of New York, utterly failed to do so; at one stage the city tried to have its charter revoked on the ground of failure to carry out its chartered function, but the courts decided in the company's favor.13

At the outbreak of the panic of 1837, the New York banks held more than $5,500,000 of public money. When called upon to pay only about a million of that sum, or the premium on it, they refused. But far worse was the experience of the general public. When they frantically besieged the banks for their money, the bank officials filled the banks with heavily armed guards and plug-uglies with orders to fire on the crowd in case a rush was attempted.1

14

In every State conditions were the same. In May, 1837, no fewer than eight hundred banks in the United States suspended payment, refusing

"People of the State of New York vs. Manhattan Co.-Doc. 62, Documents of the Board of Assistant Aldermen, 1832-33, Vol. ii.

"Doc. No. 68 [New York] Senate Docs., 1838, Vol. ii.

a single dollar to the Government whose deposits of $30,000,000 they held, and to the people in general who held $120,000,000 of their notes No specie whatever was in circulation. The country was deluged with small notes, colloquially termed shinplasters. Of every form and every denomination from the alleged value of five cents to that of five dollars they were issued by every business individual or corporation for the purpose of paying them off as wages to their employees. The worker was forced to take them for his labor or starve. Moreover, the shinplasters were so badly printed that it was not hard to counterfeit them. The counterfeiting of them quickly became a regular business; immense quantities of the stuff were issued. The worker never knew whether the bills paid him for his work were genuine or counterfeit, although essentially there was not any great difference in basic value between the two.15

THE RESULTING WIDESPREAD DESTITUTION

Now the storm broke. Everywhere was impoverishment, ruination and beggary. Every bank official in New York City was subject to arrest for the most serious frauds and other crimes, but the authorities took no action. On the contrary, so complete was the dominance of the banks over Government,16 that they hurriedly got the Legislature to pass an act practically authorizing a suspension of specie payments. The consequences were appalling. "Thousands of manufacturing, mercantile, and other useful establishments in the United States," reported a New York Senate Committee, "have been broken down or paralyzed by the existing crisis. . . . In all our great cities numerous individuals, who, by a long course of regular business, had acquired a competency, have suddenly been reduced, with their families to beggary." 17 New York City was filled with the homeless and unemployed. In the early part of 1838, one-third of all the persons in New York City who subsisted by manual labor, were wholly or substantially without employment. No fewer than 10,000 persons were in utter poverty, and had no other means of surviving the winter than those afforded by the charity of neighbors. The almshouses and other public and charitable institutions overflowed with inmates, and 10,000 sufferers were still uncared for.

The prevailing system, as was pointed out even by the conventional and futile reports of legislative committees, was one inevitably calculated to fill the country with beggars, vagrants and criminals. This important fact was recognized, although in a remote way, by De Beaumont and De Tocqueville who, however, had no fundamental understanding of the deep causes, nor even of the meaning of the facts which they so

15

16

Abridgement of the Debates of Congress, from 1789 to 1856, xiii:426-427. In the course of this work, the word Government is frequently used to signify not merely the functions of the National Government, but those of the totality of Government, State and municipal, not less than National.

17 Doc. No. 49 [New York] Senate Docs., 1838, Vol. ii.

accurately gathered. In their elaborate work on the penitentiary system in the United States, published in 1833, they set forth that it was their conclusion that in the four States, New York, Massachusetts, Connecticut and Pennsylvania, the prison system of which they had fully investigated, almost all of those convicted for crimes from 1800 to 1830 were convicted for offenses against property. In these four States, collectively, with a population amounting to one-third of that of the Union, no fewer than 91.29 out of every 100 convictions were for crimes against property, while only 8.66 of every 100 were for crimes against persons, and 4.05 of every 100 were for crimes against morals. In New York State singly, 93.56 of every 100 convictions were for crimes against property and 6.26 for crimes against persons.18

PROPERTY AND CRIME

Thus we see, from these figures filled with such tragic eloquence, the economic impulse working at bottom, and the property system corrupting every form of society. But here a vast difference is to be noted. Just as in England the aristocracy for centuries had made the laws and had enforced the doctrine that it was they who should wield the police power of the State, so in the United States, to which the English system of jurisprudence had been transplanted, the propertied interests, constituting the aristocracy, made and executed the laws. De Beaumont and De Tocqueville passingly observed that while the magistrates in the United States were plebeian, yet they followed out the old English system; in other words, they enforced laws which were made for, and by, the American aristocracy, the trading classes.

The views, aims and interests of these classes were so thoroughly intrenched in law that the fact did not escape the keen notice of these foreign investigators. "The Americans, descendants of the English," they wrote, "have provided in every respect for the rich and hardly at all for the poor. In the same country where the complainant is put in prison, the thief remains at liberty, if he can find bail. Murder is the only crime whose authors are not protected.19 The mass of lawyers see in this nothing contrary to their ideas of justice and injustice, nor even to their democratic institutions." 20

THE SYSTEM-HOW IT WORKED

The system, then, frequently forced the destitute into theft and mendicancy. What resulted? Laws, inconceivably harsh and brutal, enacted

18 "On the Penitentiary System in the United States," etc., by G. De Beaumont and A. De Tocqueville, Appendix 17, Statistical Notes: 244-245.

A complete error. Walling, for more than thirty years Superintendent of Police of New York City, wrote in his "Memoirs" that he never knew an instance of a rich murderer who was hanged or otherwise executed. And have we all not noted likewise?

20 "On the Penitentiary System," etc., 184-185.

by, and in behalf of, property rights were enforced with a rigor whic seems unbelievable were it not that the fact is verified by the records o thousands of cases. Those convicted for robbery usually received a lif sentence; they were considered lucky if they got off with five years. The ordinary sentence for burglary was the same, with variations. Forgery and grand larceny were punishable with long terms, ranging from five to seven years. These were the laws in practically all of the States with slight differences. But they applied to whites only. The Negro slave criminal had a superior standing in law, for the simple reason that while the whites were "free" labor, Negrces were property, and, of course, it did not pay to send slaves to prison. In Maryland and in most Southern States, where the slaveholders were both makers and executors of law the slaves need have no fear of prison. "The slaves, as we have seen before, are not subject to the Penal Code of the whites; they are hardly ever sent to prison. Slaves who commit grave crimes are hung; those who commit heinous crimes not punishable with death are sold out of the State. In selling him care is taken that his character and former life are not known, because it would lessen his price." Thus wrote De Beaumont and De Tocqueville; and in so writing they handed down a fine insight into the methods of that Southern propertied class which assumed so exalted an opinion of its honor and chivalry.

But the sentencing of the criminal was merely the beginning of a weird life of horror. It was customary at that period to immure prisoners in solitary confinement. There, in their small and reeking cells, filled with damps and pestilential odors, they were confined day after day, year after year, condemned to perpetual inactivity and silence. If they presumed to speak, they were brutally lashed with the whip. They were not allowed to write letters, nor to communicate with any member of their family. But the law condescended to allow a minister to visit them periodically in order to awaken their religious thoughts and preach to them how bad a thing it was to steal! Many were driven stark mad or died of disease; others dashed their brains out; while others, when finally released, went out into the world filled with an overpowering hatred of Society, and all its institutions, and a long-cherished thirst for vengeance against it for having thus so cruelly misused them.

Such were the laws made by the propertied classes. But they were not all. When a convict was released, the law allowed only three dollars to be given him to start anew with. "To starve or to steal is too often the only alternative," wrote John W. Edmonds, president of the New York board of prison inspectors in 1844.21 If the released convict did steal he was nearly always sent back to prison for life.

"Prison Association of New York, Annual Reports, 1844-46. It is characteristic of the origin of all of these charity associations, that many of the founders of this prison association were some of the very men who had profited by bribery and theft. Horace Greeley was actuated by pure humanitarian motives, but such incorporators as Prosper Wetmore, Ulshoeffer, and others were, or had been, notorious in lobbying by bribing bank charters through the New York Legislature.

Equally severe in their way were the laws applying to mendicants and vagrants. Six months or a year in the penitentiary or workhouse was the usual sentence. After the panic of 1837, crime, mendicancy, vagrancy and prostitution tremendously increased, as they always do increase after two events: war, which, when over, turns into civil life a large number of men who cannot get work; and panics which chaotically uproot industrial conditions and bring about widespread destitution. Although undeniably great frauds had been committed by the banking class, not a single one of that class went to jail. But large numbers of persons convicted of crimes against property, and great batches of vagrants were dispatched there, and also many girls and women who had been hurled by the iron force of circumstances into the horrible business of prostitution.

These were some of the conditions in those years. Let it not, however, be supposed that the traders, bankers and landowners were impervious to their own brand of sensibilities. They dressed fastidiously, went to church, uttered hallalujahs, gave dainty receptions, formed associations to dole out alms and kept up prices and rents. Notwithstanding the general distress, rents in New York City were greater than were paid in any other city or village upon the globe.22

22 "The New Yorker," Feb. 17, 1838.