LETTER ON SABBATH RAILWAYS.

TO ALEXANDER M’NEILL, ESQ., ADVOCATE.

Sir,—I have read the report of your speech at the meeting of Directors of the Edinburgh and Glasgow Railway, on Tuesday, 16th November last, and also the motion which you propose to lay before the shareholders on the 24th February. As a Christian minister, and a free British subject, I take leave to express in this manner the deep feelings of righteous indignation which these have awakened, not in my breast only, but in the breast of every believing man whom I know.

You candidly acknowledge that in the ranks of your opponents are to be found ” men of lofty intellect, of great learning and piety, and unbounded benevolence,” and yet, in the same breath, you say, ” You must judge for yourself, according to the reason and plain sense of the matter.” That is to say, that the host of intellectual and pious men who are arrayed against you do not judge according to reason or plain sense in this matter, but by some airy superhuman notions, which a man of sense may brush aside as so many cobwebs. Ah I sir, speak out your mind. Tell what it is that lies at the bottom of your enmity to the entire preservation of the Lord’s day. It is the concealment of your sentiments that is the darkest part of your whole address. You are an utter stranger to me, and I dare not judge as to your true motives. But every thinking man cannot but form this opinion in his own mind, that the reason why yon despise the lessons of all God’s holiest and wisest servants in this land, is not that you think little of the resolutions of popular assemblies (that is a miserable subterfuge, unworthy of any but a mere debater), but that you despise and trample under foot the divine message which they bring. You say you are threatened to be overwhelmed with a flood of obloquy. Do not be afraid. You are on the world’s side—” the world cannot hate you.” There are not many to lift up their voices in behalf of the holy Sabbath. Those who do, are the followers of one who bade us bless and curse not. You say ” you do not court approbation, ‘and you care nothing for condemnation.” This may be a brave speech; few will regard it as a wise one. If you mean that you do not care for the condemnation of worldly men, there would be something right in that, for in doing our duty we must expect that the world which crucified our Lord will not spare his servants; but if you mean that yon do not care for the condemnation of God’s people, and of the word of God, and of the Lord Jesus, who is to be your Judge, then will you soon repent your words with bitter tears. Why, sir, what are you, that you should say, ” I care nothing for condemnation ?” ” Can thine heart endure, or can thine hands be strong in the day that I shall deal with thee?” “Hast thou an arm like God, or canst thou thunder with a voice like Him?” If the condemnation of your words, which God’s people are now testifying in every part of the land, be righteous condemnation—if it be in accordance with the word of God and the mind of Christ—is it the part of a wise man to say, ” I care not for it?” You may say so now in the blindness of your heart, but the day is at hand when you will feel the reverse.

And now one word as to your proposed motion. It runs as follows:—” Whereas it is the duty of the directors of the company to give implicit obedience to the law of God, etc.,—This meeting resolves that it is not inconsistent with the duty of the directors as aforesaid, and they are hereby enjoined to provide trains to be run from the cities of Edinburgh and Glasgow respectively, in the morning and in the evening of Sunday,” etc.

I do not know whether this motion has come entirely from your own mind, or whether several have agreed with you in it; but I here freely state my conviction, formed upon the calm and deliberate study of the motion, and without the slightest desire to use a harsh or improper term, that THE MOTION IS BLASPHEMOUS. You say, first, that it is your duty to give implicit obedience to the law of God. What is the law of God ? ” Remember the Sabbath-day, to keep it holy. Six days shalt thou labour, and do all thy work : but the seventh day is the Sabbath of the Lord thy God: in it thou shalt not do any work, thou, nor thy son, nor thy daughter, thy man-servant, nor thy maid-servant, nor thy cattle, nor thy stranger that is within thy gates : For in six days the Lord made heaven and earth, the sea, and all that in them is, and rested the seventh day: wherefore the Lord blessed the Sabbath-day, and hallowed it.” Exod. xx. 8-11. Now, sir, if, as I presume, you spent your early years in Scotland, trained up, perhaps, under the watchful eye of one who prayed for her child that he might walk in wisdom’s ways, yon cannot be ignorant of the explanation given of this commandment in the Shorter Catechism. (Qu. 60.) ” The Sabbath is to be sanctified by a holy resting all that day, even from such worldly employments and recreations as are lawful on other days, spending the whole time in the public and private exercises of God’s worship, except so much as is to be taken up in the works of necessity and mercy.” This is the law of God, and this is the received interpretation of it, both of which were, no doubt, in your eye when you penned that memorable sentence, ” It is the duty of the directors to give implicit obedience to the law of God.” And yet, before the ink was dry, you write down, ” The directors are enjoined to provide trains to be run in the morning and evening of Sunday.” In other words, you hold in your hand the two Tables of Stone, written with God’s finger, and you say we should obey this; and then you dash them on the ground, and say it is our duty, notwithstanding, to trample on and defy them. Ah ! sir, you may call this reason and plain sense, but simpler men can see that it is open mockery of God’s holy law, and of Him on whose heart it was graven from eternity. Such lip-acknowledgment of God and his law God hates and despises. I solemnly declare, and it is the feeling of many besides me, that I would have been less shocked if you had written down, ” It is the duty of the directors to break God’s law.” That would have been honest and downright, and thousands would have applauded you. But when you set out with the hypocritical declaration that it is your duty to give implicit obedience to the law of God, and then conclude by declaring your resolution to break it, I believe in my heart, that not only will God’s children abhor the blasphemy, but honest, worldly men will despise your cowardice. And now, sir, I have done. You little know the feelings of deep compassion with which you, and the unhappy men who voted with you, are regarded by many an humble and holy believer, who loves, because he knows, the preciousness of an unbroken Sabbath-day. Never in all my experience did I meet with a child of God who did not prize, above all other earthly things, the privilege of devoting to his God the seventh part of his time. It is still a sign between God and his Israel. It is this simple fact, sir, that affords me ground to fear that, with all your talents, with all your reason and plain sense, you are yet an utter stranger to the peculiar tastes and joys and hopes of those who love the Lord. You proclaim your own shame. You prove, even to the blind world, that you are not journeying toward the Sabbath above, where the Sabbath-breaker cannot come. If you shall really carry your motion, against the prayers and longings of God’s people in this land, then, sir, you will triumph for a little while; but Scotland’s sin, committed against light, and against solemn warning, will not pass unavenged. I am, sir, etc.

P.S.—As an advocate learned in the law, you must be well aware that the law of God, as expounded by the Confession of Faith of the Established Church of Scotland (and which is subscribed by every denomination of orthodox Dissenters in Scotland), is also the law of the land, as ratified and enacted by the Act 1690 of the Parliament of Scotland, in the two following clauses:— .

“As it is the law of nature, that, in general, a due proportion of time be set apart for the worship of God, so, in his word, by a positive, moral, and perpetual commandment, binding all men in all ages, He hath particularly appointed one day in seven for a Sabbath, to be kept holy unto Him ; which, from the beginning of the world to the resurrection of Christ, was the last day of the week ; and from the resurrection of Christ, was changed into the first day of the week, which in Scripture is called the Lord’s day, and is to be continued to the end of the world, as the Christian Sabbath.”

” This Sabbath is then kept holy unto the Lord, when men, after a due preparing of their hearts, and ordering of their common affairs beforehand, do not only observe an holy rest all the day from their own works, words, and thoughts, about their worldly employments and recreations, but also are taken up the whole time in the public and private exercises of his worship, and in the duties of necessity and mercy.”

If this be true, which you know it is, then you stand convicted before the British public as one who proclaimed it to be the duty of the directors to break both the law of God aud the law of the land.

St. Peter’s, Dundee, 1st December 1841.

Sunday Trains upon the Railway.—A majority of the Directors of the Edinburgh and Glasgow Railway have shown their determination, in a manner that has shocked all good men, to open the railway on the Lord’s day. The sluices of infidelity have been opened at the same time, and floods of blasphemous tracts are pouring over the land, decrying the holy day of the blessed God, as if there was no eye in heaven, no King on Zion Hill, no day of reckoning.

Christian countrymen, awake! and, filled by the same spirit that delivered our country from the dark superstitions of Rome, let us beat back the incoming tide of infidelity and enmity to the Sabbath.

Guilty men ! who, under Satan, are leading on the deep, dark phalanx of Sabbath-breakers, yours is a solemn position. You are robbers. You rob God of his holy day. You are murderers. You murder the souls of your servants. God said, ” Thou shall not do any work, thou, nor thy servant;” but you compel your servants to break God’s law, and to sell their souls for gain. You are sinners against light. Your Bible and your catechism, the words of godly parents, perhaps now in the Sabbath above, and the loud remonstrances of God-fearing men, are ringing in your ears, while you perpetrate this deed of shame, and glory in it. You are traitors to your country. The law of your country declares that you should ” observe a holy rest all that day from your own words, works, and thoughts ;” and yet you scout it as an antiquated superstition. Was it not Sabbath-breaking that made God cast away Israel ? And yet you would bring the same curse on Scotland now. You are moral suicides, stabbing your own souls, proclaiming to the world that you are not the Lord’s people, and hurrying on your souls to meet the Sabbath-breaker’s doom.

Author: R. L. Dabney

There is a discriminating conservatism, which values and seeks to preserve the principle of old institutions, and which understands the conditions of their value. It seeks to save the kernel even at the expense of the shell. There is also an unthinking conservatism, which, by a blind association of ideas, cleaves to the forms of institutions once valuable, overlooking the conditions of their utility, and the principles which remain stable under changing forms, or even demands mutations of form in order to remain stable. This conservatism seeks to keep the shell at the expense of the kernel. Such is often the temper which moves the American people to regard industrial combinations with excessive legislative favor. There was once a historical reason, which made the right of incorporating precious to the free people of Europe. We still feel the former fondness for it, after the state of affairs in which that reason was grounded has been totally reversed.

After the fall of the Roman Empire before the Teutonic invasions, Western Europe was for a time of chaos, “without form and void,” presenting no distinctive social order or settled rights. At length, out of the disastrous confusion, the feudal system was seen to emerge. Its main feature was the holding of lands for stipulated military services to the landlord or suzerain, by tenants for life, without a fee-simple title. The tie which thus connected the lord and the vassal was almost the only remaining bond of rights or social obligations. The other essential feature of feudalism was, that the ownership of the lands also carried to the suzerain the right of government over its inhabitants, and made him not only a landlord, but a ruler. Each barony was a military commonwealth, exercising the rights of administering justice within itself, and of waging war on its neighbors, and irresponsible, even to the king, except for its stipulated military obligations and aids. For the vassal, there might be rights and franchises, guaranteed to him by the charter of his fief, and protected by the mailed hand of his lord. But for persons not belonging to the military caste, for artisans and traders, there was no right, and no protection. The tillers of the soil were either slaves or serfs adscripti glebae. The inhabitants of the towns were liable to be plundered at will by the neighboring feudal chieftains.

In the 11th and 12th centuries, the industrial classes in towns began to find this expedient: Sometimes by payment of money, sometimes by some timely service, sometimes by their sturdy right arms, they extracted from their lords charters of incorporation, virtually giving them an organic existence and guaranteeing some of their rights. Kings perceiving in these corporations probable counterpoises to the power of the great feudatories, found their interest in proposing themselves as their patrons and umpires. Chief magistrates of nations thus found in these industrial communities agents by whose help they were able to create out of the endless strifes of feudalism a national order. The burghs, enfranchised by these charters, became the strongholds of the commonalty, and the fountains of popular opinions. Industry, protected in them by a republican municipal government, created wealth, comfort, and civilization. Thinking men recognized in them the saviours of popular rights, as well as the fountains of manufacturing and commercial wealth. They became essential factors in the creation of modern constitutional freedom. It is, then, not strange that these corporations were cherished as precious and admirable, and that their protection was sought for every species of interest against feudal violence. Each trade in the towns was organized into a guild, governed within by strict by-laws, and guarding its common privileges by the stipulations of a charter. Just as in the military caste, every tenure of land had before assumed the form of a fief; so, among the industrial classes, every franchise endeavored to gain the sanction of corporate rights. It is not surprising that generations of the commonalty grew up accustomed to think the usage of incorporation the very bulwark of freedom and source of prosperity.

But this favor for incorporating business enterprises has survived among us, in full force, after every condition of society which justified the practice has passed away. The feudal institutions were aristocratic; they divided society by rigid and arbitrary castes. The power of the feudal lord was a one-man power, and it recognized no restrictions save those of existing charters. The commoner, if he met the baron single-handed, and outside of chartered protection, was absolutely at his mercy. The only hope of the commonalty was in combination, in the union of many weak hands into one corporation. But now, all this is totally changed. Feudalism has been dead in America for more than a century. All men are now legal equals, and each is a sovereign. The chief magistrate, in enforcing the law, acts directly upon individuals, and no longer upon fiefs. The law is in theory supreme, and every man is equal before it. The commonwealth itself is the all-comprehending guild, whose charter, the constitution of the state, should abundantly protect every citizen, whatever his interest or pursuit. Incorporation, once the only expedient of the weak as against the strong, is now to often the partial and usurping artifice of equals against their fellows-of the strong against the weak. Yet, after the whole ground for the prejudice and the usage has been reversed, they still continue in full force. Thus, out of this medieval expedient of the commonalty is now rapidly growing a new aristocracy, armed by law with class-privileges and powers more odious than the feudal. Such is the blind conservatism which saves the shell while it loses the kernel.

A corporation is an artificial person, created by the law, usually of many individuals, and clothed by its charter with certain rights of personality, and with a continuity of existence outlasting the natural life of each of its members. Judge Marshall defined it as “an artificial being, invisible, intangible, and existing only in contemplation of law.” “A public corporation” is one which, like the municipal government of a town, is created for political functions. A “private corporation” is organized by the law, perhaps of many individuals, and yet mainly to pursue some end of personal gain belonging immediately to the members alone. Public corporations are essential to the execution in detail of the functions of justice and government; and although they may operate each one directly on but a part of the citizens, yet they exist for the common purposes of all the people. Against them I have no word of caution or objection to utter. The thoughts which I propose to unfold are aimed only at private corporations, and only at the unnecessary creation of these.

There are only two cases under a republican constitution which offer any fair pretext for erecting private corporations with special privileges not common to all the citizens. One is that in which the work proposed requires more wealth than any one citizen or copartnership possesses. One man may not be found rich enough to build a long railroad. Yet such a road may be found productive of wealth. The other case is that in which the enterprise, in order to be useful, must be continued under the same management longer than the lifetime of any citizen. Hence, it is argued, the law must create an artificial person, which collects into one treasury the wealth of many members, and which does not die when its projectors die, to carry through and perpetuate this costly and enduring work. The only other alternative, it is said, would be for the state to conduct all such enterprises herself, by the agency of multitudes of her officials, and thus to make herself at once the civil government and the universal business corporation. But the commonwealth that should undertake this, in a high material civilization, would become so all-engrossing as to be a gigantic tyranny to the citizens. It would, indeed, be clear of the error of conferring on associations of a part of the citizens class privileges; but this would be at the cost of engrossing to itself dangerous powers from all the citizens. The aggregate of functions thus thrown upon the government would be to heavy and multifarious for anything short of omniscience; and the aggregate of power and money would be to formidable to be entrusted to any hand but that of immutable rectitude. The huge machine would present opportunities for boundless mismanagement and peculation. The plan would convert a free government into a Chinese “paternal” despotism.

But if we concede these arguments, there is no reason why private corporations should thus be causelessly multiplied. At least, their privileges should be jealously limited to suitable cases; they should be made to resemble, as nearly as may be, business copartnerships; and they should have no privileges different from those belonging to every citizen, save such as conduce to the public and general advantage.

We have now touched the prime motive for seeking corporate powers. Business men contemplating any industrial enterprise do not desire to bear the responsibilities of business copartnerships. According to the good old law of copartnerships, the partners were not only jointly, but severally, bound for all the debts of the firm. The creditors of the firm could not only exhaust the definite sums contributed to the firm by the partners, but he could pursue the separate private estate of each partner until their debts were satisfied. Each partner, in signing the firm name to an obligation, bound the firm and its other members. It is precisely these responsibilities which the petitioners for private corporations wish to evade. And the sophistical plea they advance for asking this immunity is, that the foresight of such a sweeping risk deters business men from useful adventures; That the commonwealth, as a whole, is interested in encouraging an active spirit of adventure, because the successful opening out of new industries will add to the common riches; that hence the law should encourage adventure by giving private incorporation, which will enable business men to make the experiment by risking only their specified capital stock.

My position is, that this specious plea is wholly unsound, at least for existing American society. The spirit of industrial adventure does not need stimulus among us, but it needs prudent repression. The temper of our people is already over-adventurous. We are perfectly sure that every possible new adventure, promising increase of private or common wealth, will find men to pursue it vigorously; the private motives of ambition, love of excitement, and desire of gain, ensure this. Does not experience testify that too many adventures are made, in experiments too uncertain and of too little reasonable promise, either of private or public reward? I repeat, no stimulus is called for in our day.

But all these industrial adventurers pursue these experiments, reasonably hopeful or foolishly rash, for their own private behoof. This is all they think of. The other vital fact in the question is, that the experiment inevitably costs money, somebody’s money, and usually a great deal of it. The money it has cost is actually consumed, and somebody is inexorably compelled to “pay the piper.” Is there a mine to be developed, supposed to promise much wealth? Is a private corporation created to do it, consisting of ten members, each of whom only puts in as capital stock one thousand dollars? But by the adroit use of their credit they get the control of labor and other values to the amount of one hundred and fifty thousand dollars, which are all sunk in useless shafts and tunnels, and then the honorable corporators, after paying all the corporation, has ten thousand dollars of debt, wipe their mouths and announce the mine a total failure, and dissolve their corporate body into thin air. But now, values to the amount of one hundred and forty thousand have been irrevocably consumed. Whose? The labor of honest working men; the timber, forage, and provisions of the neighboring farmers; The little patrimonies of orphans and widows, lent to the corporation as a safe investment on rash representations. These are the people that are made to pay the cost of the rash experiment, while the responsible experimenters go nearly free and retain all their private wealth, and while the honest losers would not have been allowed a mite of the direct profits of the minerals had the barren veins proved rich in them. This is a flagrant natural injustice. The men who devised the experiment for their own private advantage, who were guilty of the mismanagement, and who made the mistakes, these are the men who are justly bound to bear the whole risks and losses of these mistakes. The only showing of a pretext which saves the transaction from the just charge of robbery, is that such experiments on the whole redound to the common advantage and wealth, and that therefore the adventurers should be relieved of a part of their risk. But I have shown this assumption erroneous. The community is not interested to have such spirit of enterprise stimulated in this form. The measure does not result in the increase, but in the destruction of private and public wealth. It is these costly and wasteful experiments, unwisely and rashly made, because consciously made at other peoples expense, which are devouring a large part of the honest and solid increase of wealth made by regular industries, and thus are retarding the progress of society.

Again, this sophistical pretext has only a showing of a fair application to business enterprises which are novel and untried. As to all the known and approved lines of industry, men ought to be able to know the reasonable expectations of risk and gain; and, if they attempt them, to do so with as good a knowledge of the prospect of gain, as their other fellow-citizens have in their industries. If a man is personally ignorant of such established and known industry, what right has he to migrate into it? What right to demand that he should indulge his impertinence in assuming a business he does not understand, and has not fitted himself for, at his neighbors expense? Here is a man who knows how to make shoes, and understands the risks, and the ways honest, moderate profits are made from leather. But his ambition, avarice, or laziness moves him to attempt woolen manufacture, of which he knows nothing, and has not taken the pains to learn. As a corporator, he can “play gentleman” instead of sticking to an honest last. So this law equips him with a private corporation, to enable him to make this experiment of playing gentlemen at others expense! I repeat: it is only when the industrial experiment which promises general advantage is untried and novel, that any color of pretext appears for relieving the adventurers themselves of any part of the risk. And then, the wise and equitable way would be for the state to pay the first adventurers a small bounty, taken out of the common treasury, to aid in the costs of the first trials. But now we see the insidious of the private corporation granted for pursuing every familiar and ordinary line of business as old as society itself.

If this ill-advised species of legislation were reformed, and all men who wished to adventure their riches in the hope of acquiring other riches, were made to do so under the responsibilities of the old copartnership, we should see this change: men would much more regularly stick to the callings in which they had been reared, and in which they were qualified and entitled to succeed. There would be few adventures of the absurd and dishonest character now so common, made by men ignorant of the business into which they intrude, at the expense of men more honest, industrious, and modest than themselves. There would be far less over-trading. There would be far less waste of the earnings of remunerative industry in unwise experiments. The steady and wholesome increase of solid wealth would be much greater.

Corporate privileges can never be common franchises, belonging of right, and equally, to all citizens. They must ever remain of the nature of special grants; and hence, they can be equitably bestowed on favored persons only on special grounds, which constitute the petitioners for them in some sense exceptions from their fellow citizens. The fair interference from these truths would seem to be, that the granting of such privileges should be the sovereign and the very careful act of the legislature alone. It should be regarded as a power too delicate and important to be delegated. The American States, in delegating this prerogative by some delicate law of incorporation, to an inferior agency—as nearly all the states have done—may plead that, in such action, they have merely devolved upon the lower department the ministerial function of arranging the forms of the corporation; while the principles of the general corporation law sovereignly determine the nature and conditions of the privileges allowed. So much may, however, be safely affirmed: that these sweeping expedients for facilitating incorporation are symptoms of an abuse of the usage by its undue and rash extension. Legislatures have seemed to think, that because their general laws of incorporation contained no express limitations; because they offered equal privileges, in seeming and in word, to any and every citizen desiring to incorporate, therefore they were not making class-legislation; therefore they were not chargeable with conferring special privileges on some citizens at the expense of their fellow-citizens. This view is entirely deceptive. No matter what right the law may seem to offer to all, all men cannot actually pursue all avocations. There must always be some branches of industry naturally unfitted to come under corporate management; while some are naturally adapted to gain advantage to this form of control. A private corporation may be extremely well suited to the management of a mammoth distillery, or woolen-factory, and utterly unfitted to the successful rearing of poultry and pigs. It is, therefore, a mockery to the farmer for the legislature to say to him: “The general law of incorporation is, in its letter, as open to you as to the distiller. If you wish to enjoy its privileges, incorporate yourself to rear pigs.” Imperious circumstances have made it impossible for them to incorporate themselves successfully. Hence the incorporated distillers are, by this law, empowered to pursue their industry with special privileged advantages against their fellow-citizens, the farmers. This is essential injustice, under the guise of a nominal equality. Again, if the shrewd men who avail themselves of these corporate powers do not regard them as specially advantageous, why do they seek them, in preference to the old, fair copartnership? Evidently, then, they know that the condition of their making advantage of their corporate powers is this: that many of their fellow-citizens shall still pursue their industries unprotected by similar corporate powers. If the system of incorporated and privileged industries could be equitably universal, it would cease to be unfairly advantageous to anybody. If everybody could practically enjoy the system, then these shrewd men would cease to desire it for themselves. They would say: “Now it would do us no good, because all are again on one level.” Thus, the obstinate truth still appears, that the customary legislation for private corporations is invidious class-legislation, anti-republican in tendency, however republican in seeming, and favorable to oligarchy in business, and ultimately in the state.

But these wholesome views have not prevented the states from vying with each other in general corporation laws, which throw wide open the gates, and make the acquisition of these privileges as easy as possible to the classes favored by circumstances. In Texas, any persons combining to pursue any legitimate industry may obtain corporate powers by certifying their pretensions, their capital stock, their names and by-laws, to the secretary of the commonwealth, and complying with certain rules of mere form. Thereupon it is the latter’s duty, as a matter of course, to confer on these the full powers. In Virginia, the same law is in force, except that the official who incorporates is the judge of the circuit (district) court. In New York, two laws authorize the secretary of state to grant incorporations to any and every imaginable enterprise, except banking, whenever the petitioners certify him of the objects, duration, capital, and trustees of the proposed combination.

Thus, instead of maintaining any wise restrictions on private incorporations, we have them for everything, not only to build railroads, navigate ships, operate factories, educate the young, bury the dead; but corporations to carry parcels on the vehicles of these other corporations; corporations to spin, to make our clocks and watches, to peg shoes and make a nail; corporations to fatten cattle on the “free grass” of other corporations; corporations to play Shylock; corporations to print bank notes for those other corporations; corporations to lock up the papers safely, which represent the fictitious wealth of sister-corporations.

Note the following among the actually existing corporations of the great State of New York:
“The American Bag-Loaning Company;” “The American Hotel-Directory Company” (to print directories for hotels); “The Ball Players’ Publishing Company;” “The John Bauer Company,
for dealing in junk! “The Empire Brewing Company;” “Electric Manufacturing and Miscellaneous Stock-Exchange Company;” “The Farmers’ Milk Company;” “The Metropolitan Milking-Machine Company;” “Metropolitan Cafe Company” (for carrying on an eating-house); “The Ready-Cooked-Food Company” (to provide hot dishes); “The Salamanca Embroidery Company,” to embroider cloth; “The Horse Stealing Prevention Society;” “The Chatauqua Lake Camp-Meeting Company;” “The Gramercy Boat Club;” “The Citizens’ Plate Glass Insurance Company;” “The Company to Prevent Extortion by Gas Companies.”

Does not this list more than justify the exaggerated sarcasm of Dickens’ description of the “Hot Muffin and Crumpet Baking and Ready Delivery Association,” which Mr. Ralph Nickleby inaugurated so successfully with the help of the eloquent member of parliament, and which he manipulated so much to his own profit? This picture of our American extremes would be ludicrous, were it not alarming.

In arguing against the abuse, further, I note first a point which is least important – the costly and wasteful methods of production caused by private corporations, as compared with individual, responsible effort. I know that the boast of their advocates is just the opposite: That the association of the means of many men enables a corporation to produce a given value more largely and methodically, and thus more economically; the “union is strength.” Why do these shrewd corporaters, claiming to have capital and skill for a given production, so jealously shun the strength of that union which the old right of forming copartnerships would give them, and so eagerly prefer the private corporation? Obviously, because they know that they shall thus get more gain for their capital and skill, and throw on other people more of the risks and responsibilities of unlucky ventures. But somebody must “pay the piper.” Of course, the people who deal with the private corporation must, on the whole, pay more for the service than it had paid before. Let us exemplify in some detail. Why does the money-lender so often prefer to lend as a member in an incorporated bank, rather than as a private citizen? Because he wishes to enjoy the experience and prudence of the bank to get him safe loans? But suppose the money-lender has gotten himself made director or cashier in this lending corporation, so that the prudence of the bank is no other than his own individual prudence? Now, why? Because the banking corporation can get more interest than private money-lenders. Why does the capitalist who actually puts in more than enough money to build and operate one of the largest factories, prefer to be a shareholder in a company which builds a whole town of factories? Because he aims not only to manufacture that class of fabrics, but to operate a monopoly in their sale. Here is a ship-owner, who has himself plenty of money to build and man the finest steamer, but he prefers to be one member of a “navigation company” which has a fleet of steamers plying between New York and Richmond. He designs to monopolize the coasting trade between the two ports, so as to charge exactly double freight for the same barrel of potatoes the day after a competing ship, belonging to an individual owner, ceased to run. (I speak that I do know.) But perhaps the most glaring plunder is that of the “express forwarding companies,” private corporations chartered to do the duties of “common carriers” on the vehicles of other corporations, which have no other title to existence than to be themselves “common carriers;” so that to say they are not competent to these duties is to confess themselves dishonest delinquents. A snug plan this, truly, to make the public pay twice over for one service. No wonder the express company divides fabulous dividends, rears palaces in our trading towns, parades its cohorts of fat horses and officials! What is the exalted function which is so magnificently rewarded? Only that which was performed by our forefathers, by simple wagoners and sturdy shipmasters.

That the means employed by private corporations are promotive of wasteful, and not of economical production, is proved by their employing in a thousand ways more lavish methods than individual producers ever do. The administration is on a scale of gigantic waste. Does the rich private capitalist, carrying his own risks and responsibilities, ever pay his steward or head clerk $25,000 salary? the rate of a modern railroad president! Why is it that all the salaries paid by the corporations are higher than those paid for similar services by wise individuals, from the highest to the lowest? The steward of the company gets his $25,000, while the steward of the the most gigantic private business gets perhaps his $3,500. The mere laborer gets his $1.50 per diem for the same species of manual labor for which the most thrifty farmer can only give fifty cents. The answer is clear: the monopolist power which the incorporation confers enables them to rake together masses of money, at the expense of other industries, which beget prodigality and waste in administration.

I shall be reminded that this age, so marked by the multitude of private corporations, is also the age of cheapened productions. The reconciliation of this with my conclusion is in this truth. The marvellous applications of beneficent science to the work of production have indeed cheapened many values to a great degree. But the contrary influence of the corporations has, in most cases, intercepted the benefit of this cheapened production, in whole or on part, and prevented the people from enjoying the advantage to the degree to which they are entitled. It is applied science which has provided economical production for us; it is the private corporations which have prevented a part of the results. Besides, the cheapening of production turns out to be after all partial and deceptive. The corporations do give us some things astonishingly cheap, partly by making them in what Carlyle called the “cheap and nasty way.” And yet, they do not give us, on the whole, cheaper living. They give us a yard of flimsy calico for five cents, but it costs more to dress a girl a year, than when French chintz sold for seventy-five cents. The mortising machine gives us a cheaper panel door, or slat blind, yet it costs much more to build a given house than before there were mortising machines.

Second: I advance to a more weighty argument, “Money is power.” It used to be a mxim of political science, that “where power is, thither power tends.” As long as the love of power is native to man’s heart, this centripetal tendency must exist. Jefferson taught that, in order that republican equality of political rights may continue, no excessive differences in wealth must arise. Hence, he felt it necessary to abolish in Virginia all rights of primogeniture; so that when special energy and skill should have gathered a large mass of wealth into one hand, parental love should usually ensure its division at the holder’s death, and thus its redistribution. But we undo his work by creating corporations which never die, but which to continue from generation to generation to grasp wealth with all the greed of the “robber-baron,” and to hold it perpetually in mortua manu, with all the tenacity of that baron’s descendants with their law of entails. We create an aristocracy of active capital, furnished with trains of drilled retainers, far more dangerous to the common liberties than a landed aristocracy. Must not the natural arrogance of wealth suggest the lust for more power? It is for the gratification of this desire for more gainful organization and more monopolies, that they first enter the arena of political manoeuvre. Success in this will in due time suggest the desire for more direct political power. The experience of the American States with these creatures of their legislation has just passed through the first stage and is approaching the next. The seniors among us can remember how a moneyed corporation in Philadelphia, the creature of the United States, once challenged the whole force of the United States government, and almost came off conqueror. It is now the stale jest of some capitals, that their legislatures meet mainly to register the edicts of railroad presidents. In Maryland, there is a corporation whose revenues far exceed those of the sovereign commonwealth, and which commands an army of trained officials so much more numerous, that the state’s servants are but a squad before them. And, for a reason to be explained anon, corporations will always incline to employ means much more corrupt than private men would venture, to seduce legislators to bestow further favors. The eager craving of the age is for equality before the law. The people are taking the surest plan for disappointing their own desires, through the growth, out of these corporations, of oligarchies more oppressive than the feudal aristocracies they have overthrown. We have made our forms of government extremely democratic; and this epoch of democracy witnesses the creation of the new oligarchies. So “extremes meet.” The peril is illustrated by this fact, that monopolists and victims are alike so devoted to material good, that they join in flouting the counsel which would have us forego any of these supposed means of enrichment, for the sake of sound morality and political safety, as a silly crotchet. The sufficient answer is, Who expects the American people to forego the readier means of making money, for your “political abstraction”?

I urge, third, that the forms of industry promoted by the powerful corporations tend to to undermine the domestic and personal independence of the yeomanry. The associated means of production supplant the individual, the products of the older and more independent forms of industry retreat before those of the corporations. The time was when manufactures were literally “domestic,” the occupations of people in their homes. The producing yeoman was a “free-holder,” a person whose vital significance to British liberty our times have almost forgotten. He dwelt and labored under his own roof-tree. He was his own man, the free-holder of the homestead where his productions were created by the skill and labor of himself and his family and servants. Now all this is changed. The wheel and the loom are no longer heard in the home. Vast factories, owned by corporations, for whose governors the cant of the age has already found their appropriate name as “kings of industry,” now undersell the home products everywhere. The axe and hoe which the husbandman wields, once made at the country forge, the shoe upon his mule’s feet, the plough with which he turns the soil, the very helve of his implement, all come from the factory. The housewife’s industry in brewing her own yeast can hardly survive, but is supplanted by some “incorporated” “baking powder,” in which chemical adulteration may have full play. Thus the centralization of capital leads at once to the centralization and degradation of the population. The free-holding yeoman citizen is sunk into the multitudinous mass of the proletariat, dependent upon the corporation for his work, his wages, his cottage, his kitchen garden, and privilege of buying the provisions for his family. In place of the freeman’s domestic independence, he now has the corrupting and doubtful resource of the “labor union” and the “strike.” His wife and children are dragged from the retirement of a true home into the foul and degrading publicity of the festering manufacturing village, the “negro-quarter” of white wage-slaves, stripped of the overseer’s wholesome police, and the master’s and mistress’ benevolent oversight. Thus conditions of social organization are again produced more incompatible than feudalism with republican institutions.

The fourth, and chief argument against our system is found in its influence on the virtue of the people. Every one remarks on the alarming relaxation of business and political morals. But unless we can refute the testimony of not only Washington, but of Moses, David, and Solomon, correct morals are the very foundation of public safety, and this unfashionable, homely, and simple old truth must stubbornly hold its place, notwithstanding nineteenth century smartness. I shall show that the species of legislation which I criticise furnishes the occasion for much of the corruption which all sensible men dread.

1. One evil begins at the very inception of the legislation. It puts into the power of legislators to pass, and of suitors to urge, enactments directly affecting individual, pecuniary interests. By this system the legislator, whose only rightful business is the equitable protection of the moral rights of all citizens, is invited and enabled to use the sacred power of the commonwealth to vote money indirectly out of the pockets of one citizen into those of another. Disastrous invention! Every prudent statesman has recognized the peril and the evil of such political action as suggests, even to the citizens, the habit of looking to the action of the government for any pecuniary personal advantage, instead of looking to it for the just and equal defence and regulation of the independent, manly exertions of each citizens for himself. Whatever may be the direct object of the legislation, which contains, like the tariff laws, this ill-starred suggestion, it forms a weighty objection to it. It is an unwholesome day for the virtue of the people, then they learn to look to that government for partial pecuniary advantage, whose only legitimate action is the equitable guardianship of it all. And this is especially the tendency of our unrestricted legislation for private corporation. The petitioner goes to the legislature of his country with an unfair motive. Hence immediately the temptation to apply to the legislator some improper motive. Let me repeat the short demonstration: Here is a group of men who desire to combine their means for the pursuit of some known and customary business. There is the old, fair, and honest way of copartnership, with the effective strength arising out of close union, and its just responsibilities. Why do these men put the legislature to the trouble of making them a corporation? Of course it is because they expect thereby to acquire some additional and partial advantage over their fellow-citizens with whom they propose to deal. These advantages have a money value, of course it becomes natural to think of paying money for them. Here the poisoned fountain is opened for the corruption of the lawmakers themselves.

2. It is an urgent point of moral interest to the commonwealth, that as few business functions as possible be entrusted to corporations, especially of those functions which enter into the ordinary traffic and production of the people, because “corporations have no soul.” Sir Edward Coke uttered this in one sense; sensible men have now universally learned to take it in another. Corporations are too often deficient in that prime attribute of rational souls, conscience. and the formidable feature of this fact is, that it is the result of regular and efficient moral causes. The legal personality of the corporation is artificial; what more natural than that its attributes should be artificial? Moral responsibility can only exist as an individual thing, binding the separate, single soul, by its own immediate obligation, to its Divine Ruler. When the agent is an association, the sense of responsibility is so diminished by being divided out among numbers, that it comes to be lightly felt by each member. In point of fact, we see all men yield, in some degree, to this illusion, except the few who have kept a thoroughly enlightened and unbending conscience. Average men will not usually feel as immediate responsibility for their associated acts, as for their individual acts. The world is full of instances; no further illustration is needed.

Again, few appreciate the plausibility of the influence against just action, arising out of this feature of business associations, that they usually deposit the ruling responsibility in one place, and the executive agency in another place. The orders emanate from the directory, in the great city. The execution is by the hands of hired officials, away in the country. These officials are inclined, by their very honesty, to execute the orders of the heads of the corporation with unquestioning punctuality. The ordinary logic of the faithful official is: “I have nothing to do with directing the action of the corporation; I am not the least responsible for the moral character of it. I have covenanted, in consideration of my salary, to execute orders. I have no business with criticising their moral propriety as long as I hold my office.” Thus, this official has become as mere a tool as the common soldier in a standing army. But the directory also persuade themselves that their fidelity should be in studying exclusively the interests of their association. The individual injustices they order are executed far away, and by other and inferior hands; they do not pique the consciences of the directors, not being seen.

Let us view a plain instance. Here is an honest and faithful station agent. A valuable package has been lost by his railroad, or a neighboring widow’s only cow has been injured by a train. The claim for damages is presented to him as the only accessible representative of the corporation on the spot. The good man reaches down from a pigeon-hole a list of the corporation’s rules, and reads to the aggrieved claimant this: “The company, considering that it has been imposed on in the levying of claims for damages, instructs all agents to resist such claims in the future, until enforced by process of law. ” And then, his comment is this: “No doubt, respected madam, your case is just, but you see, I have my orders.” Now if this were an individual transaction, would this decent man resist a claim after he had conceded its justice, and wantonly put the injured claimant to the additional costs of a suit? He would be ashamed to do it. But now, he is the tool of a corporation. “He has his orders.” And if the lordly directory are asked why they enforce a rule which works this individual injustice, they answer: “It is our duty to study the general interest of the stockholders.” Thus conscience is bandied backwards and forwards between employers and employed, until it is tossed clean out of the business, and the traffic of the great corporation becomes as heartless as that of a dead machine.

Hence, I repeat, it is important for the maintenance of the public conscience, that as little as possible of the ordinary traffic of society be conducted by corporate agencies, and as much as possible by individuals or copartnerships, under their wholesome, personal responsibilities. But private corporations have been so heedlessly multiplied, that now, many things have ceased to be done my men in their individual capacities. Do you wish a parcel carried by land or sea? It is not done for you by any individual ship-master or carrier, acting under the restraints of personal conscience, but by an “Express Company” or “Navigation Company.” Do you need shoes? You do not get them from the shop of a cordwainer, but from some “Shoe Company.” Or a handful of nails? An “Iron Company” is invoked to produce them. Do you wish your person transported? You commit it to a “Railroad Company.” Are you fearful that they may break your neck? You secure an insurance from an “Accident Insurance Company.” Lo we go to the end, when our heirs secure a grave for us from an incorporated “Cemetery Company.”

3. The creating of private corporations for transacting the current business of society is exceedingly unfavorable to morality, because these associations so multiply the chances for secret fraud. In illustrating this point, I have but to refer the intelligent reader to the unfathomable tricks of the stock-boards and of Wall street. “The mystery of iniquity doth already work.” Is not this, in plain English, the recognized prudence of the speculator in these markets: that he shall believe nothing which is told him by other dealers; that he shall take it for granted they always have a concealed design in making whatever representations they profess to give to the public; that he shall construct his argument as to what is the prudent thing for him to do by inferring what is his adversary’s secret trick? Does not every lawyer know that it is vain to endeavor to ascertain the actual solvency of a corporation even by inspecting its records? They let him see just so much as tends to mislead him. Who has not heard of the illustrious invention of “watering stocks”; or of the ways that are dark of sending out the human jackals to “bear” the stocks the capitalist wishes to buy, or to “bull” the sinking bonds he is anxious to sell; of managing the works of the corporation so as to announce lean dividends when the “operators in the ring” wish to buy the stock, and of flaunting before the public fat dividends when they wish to sell; of buying largely on credit from honest merchants, and selling largely for cash, dividing out the proceeds of the sales as dividends; so that when pay-day comes, the creditors find only a dead corporation with no assets, while the members of yesterday walk abroad to-day rich private citizens, secure from the righteous claims of the men they have plundered? By all these arts the large stockholders in the directory victimize the small holders and the creditors of corporations almost at their will. “The big fish continually eat up the little ones.” The whole system tends “to make the rich richer, and the poor poorer,” thus producing a condition among the people most incompatible with permanent republicanism.

I have been speaking of the tendencies of this legislation. I make no sweeping attack upon the personal character of the members, directors, and officers of these corporations. Many of these have been men of the noblest public spirit, of blameless integrity. Their action has been a help and support to their constituents. Their faithful exercise of the trusts with which the law has charged them has been the chief influence commending a vicious system, for whose errors they themselves were not responsible to the confidence of their fellow-citizens. In criticizing the dangerous tendencies of the system, and the sins of its unworthy members, I would not detract anything from the fair credit of such men.

yet the crowning objection to the prevalent system is that its tendencies are unfavorable to the virtue of society. This is not only the occasion of that tide of dishonesty which threatens to undermine our civilization; but it is one occasion which the people can ill afford to tolerate when the other conspiring causes are so influential.

The history of Federal institutions presents us with one more commentary on the tendencies of private corporations, which should be peculiarly instructive to Southern statesmen. We have been taught by the fathers of the constitution that the centralization of political power is adverse to the liberty of the people, of which the due independence of the several states in the exercise of their reserved rights is the only earthly bulwark. But manifestly these incorporations have been promotive of political centralization. The first wrench which perverted the constitution and the action of the Federal Government from that equitable model designed by the fathers, was the assumption by Congress of power to create a banking corporation within the domain of a sovereign State, as the debate on this measure was the beginning of that undying contest between the party of reserved rights and liberty, and the party of centralization and despotism, which was never appeased until it ended in the wreck of the constitution itself. The next great constitutional struggle was against the protective system, but this is grounded in the same principles of class legislation and partial advantage, and it has always been closely wedded to corporations. They are twin sisters. But for the influence of private corporations on the affairs of the United States the revolution of 1861-’5 would never have been attempted, and without the congenial aid of these associations the aggressive party would have found South unconquerable in its defence of the constitution and the freedom of the people.

“No one likes to admit publicly that he was wrong in the past, but honesty requires it. For two decades, I followed R.J. Rushdoony’s lead on the question of the sabbatical year of debt release. I taught that no debt should be contracted by the debtor that is longer than seven years (Rushdoony says six years). I adhered to this in my own finances. It has cost me a great deal of money. I sold a rapidly appreciating investment property I wanted to keep because my seven years had run out, and I did not want to pay $45,000 cash to pay off the loan. I have paid off other real estate investment loans in the seventh year. I stayed out of other real estate investments I really should have made. I did my best to honor in practice what I had taught in theory. God holds us responsible for obeying our own interpretations of His law, even when we have misinterpreted the law. This is how we learn to obey. This is also how we show Him that we are serious about being covenantally faithful. But now I realize that I was wrong in my interpretation. I no longer wish to mislead people.

I was forced to rethink my position by S.C. Mooney… Mr. Mooney’s book offered a challenge to me. He observed, correctly, that I had previously argued that the interest-free loans of the Bible were (and are) charitable loans. I have always argued that business loans were (and are) loans of a completely different ethical and judicial character, and therefore lenders can legitimately ask for an interest payment. But I had also said that no loan beyond seven years is valid. He quite properly called me to account. If Rushdoony and I appeal to Deuteronomy 15 in order to defend the seven-year (or six-year) maximum on all loans, yet Deuteronomy 15 is also the basis of our arguing that morally compulsory loans – zero interest loans — are unique, then we are mixing our judicial categories.

He asked: ‘Why do they not hold that only the debts of ‘poor’ brethren are to be cancelled, and [thus] infer from this that it is lawful for one to continue to exact the debts of the ‘rich’? The present writer agrees with their views concerning the remission of debts, particularly as cited above.’ When I read that, I instantly changed my views. In the twinkling of an eye, I abandoned my old argument that there must be a seventh-year debt cancellation by civil law. Mooney is correct: either Christians must accept the fact that there is no biblically valid judicial distinction between charity loans and profit-seeking loans, and therefore no biblically legitimate economic distinction, or else we must interpret Deuteronomy 15 exclusively in terms of charity loans. Either all loans are to be zero-interest loans, or else charity loans alone are under the temporal restrictions of the sabbatical year principle. Thus, from this point on, I will argue, to cite Mr. Mooney, that ‘it is lawful for one to continue to exact the debts of the rich.’”

North continues in Appendix G of Tools of Dominion:

LOTS OF FREE TIME: THE EXISTENTIALIST UTOPIA OF S.C. MOONEY

Consider the economic logic offered by any promoter of a zero-interest economy. As I have argued in Chapter 23, he is the economic world’s equivalent of the self-proclaimed scientist who insists that a perpetual motion machine is legal. But the promoter of a zero-interest economy is really far worse: he is like a crackpot physicist who insists that only perpetual motion machines should be legal. He is the classic defender of something (the use of an asset over time) for nothing (no rental fee). He says that you can construct an honest, fair, and productive economy by making interest payments illegal. Again, let me apologize in advance for filling up space in this commentary with arguments against nonsense. If this nonsense, or nonsense quite similar to it, had not been offered in the name of the Bible for about a millennium and a half, I would not bother to comment on it. Life is too short, and this book is too long. But the lure of crackpot theories of interest has been with us for a long, long time; first, under the authoritarian rule of clerics in an era before economics was an intellectual discipline, and second, under the hoped-for rule of amateurs who resent the very thought of economics as an intellectual discipline, and who have therefore never taken an economics course in their lives.

Before I begin my analysis, let me also say that in one sense, it is legitimate to call for a restructuring of economics by revising interest theory. In fact, it is imperative. Bohm-Bawerk’s path-breaking History and Critique of Interest Theories (1884) certainly set forth economic principles that were instrumental in making possible a major revision of economics. But let me also say that it is insufficient to offer a new theory of interest – or even a revived version of Aristotle’s theory, dressed in swaddling clothes – without restructuring all of economics. Like value theory and price theory, interest theory is at the heart of economics. In fact, price theory apart from a theory of interest is dead before it begins. It does no good for a self-proclaimed economic revolutionary to offer a wholly new theory of interest and then not explain exactly how his interest theory is “to be integrated into the whole of economics. The economist must show that economic reasoning as such is still possible in terms of his proposed interest theory. This is what Bohm-Bawerk did a century ago. This is what not even one of the zero-interest theorists has ever attempted.

I do not believe that a person has to earn a Ph.D in a particular field in order for him to have an academic impact in that field. I do believe that a person needs to demonstrate the same degree of intellectual self-discipline and accomplishment that a Ph.D degree requires before he thinks himself competent to restructure the whole world from behind his computer. It is not the formal degree that counts; it is the years of thankless work in the shadows that are required to produce a successful paradigm shift. It is this price that the monetary cranks are not willing to pay. They offer us half-finished blueprints for 80-story skyscrapers, before they have built a tree house, and then demand that the world’s architects give them a polite hearing. And Christians wonder why we are not taken seriously.

Mooney on Money
I have in my possession a first edition paperback book by a self-identified Christian Reconstructionist, Mr. S. C. Mooney. Mr. Mooney calls for an economically just world which is devoid of both rents and interest payments, just as John Maynard Keynes did. Since I have responded to the main thrust of his arguments in Chapter 23, there is no need of going over the same material. We need to go right to the “soft underbelly” of his critique of interest.

Mooney insists that from a biblical perspective, “it is not lawful for one to sell the use of his property (rent).” If a person has money at his disposal, he faces a decision: What is the most productive use of this capital? Say that he does not want to manage his investments actively. He wants to spend his life doing other things. He therefore decides to buy an economic asset which he expects will produce a stream of future income. He could buy a piece of real estate that he expects will give him a return of x per annum (“net, net, net”) after he delegates management responsibilities to a professional. He could also deposit the money in a bank. How much will the bank have to offer him in order to persuade him to make the deposit? Assuming that he expects no entrepreneurial profits from the appreciation of the real estate, the bank will have to offer him something in the range of xxx. Why? Because in each case, the bidders – the property seller and the banker – are in the market for his money. They must offer competitive bids, as with any auction. They bid in terms of a promise: so much future income per annum. This competitive bidding process is why the economists have long concluded that the rate of interest on a money loan produces a percentage rate of return that will be competitive with a comparably risky investment in income-producing real estate. In short, interest income equals rental income on a competitive free market. So, Mr. Mooney’s argument against the biblical legitimacy of interest income lives or dies with his conclusion that income from rental property is also prohibited by the Bible. If rental income is allowed, then there seems to be no economic reason why interest income from a collateral-secured loan is not also allowed.

Mr. Mooney’s conclusion is in direct opposition to the economic terms of the jubilee year, which specified that anyone could lawfully rent his life and his property to another person for a period of time. In other words, a buyer could lawfully contract with a seller for the latter to supply him with a stream of income – labor income or agricultural income. In either case, when a kinsman bought the land or the person out of bondage (the contract), he had to ‘pay the leaseholder a pro-rated price based on the number of years remaining until the jubilee year. This, it should be obvious, was a rental contract. Not-only was it legal, it was legal even for unbelieving resident aliens to buy up to 49 years of future labor services from poverty-stricken Hebrews or 49 years worth of agricultural income.

If thy brother be waxen poor, and hath sold away some of his possession, and if any of his kin come to redeem it, then shall he redeem that which his brother sold. And if the man have none to redeem it, and himself be able to redeem it, then let him count the years of the sale thereof, and restore the overplus unto the man to whom he sold it; that he may return unto his possession. But if he be not able to restore it to him, then that which is sold shall remain in the hand of him that hath bought it until the year of jubilee: and in the jubilee it shall go out, and he shall return unto his possession (Lev. 25:25-28).

And if a sojourner or stranger wax rich by thee, and thy brother that dwelleth by him wax poor, and sell himself unto the stranger or sojourner by thee, or to the stock of the stranger’s family: After that he is sold he may be redeemed again; one of his brethren may redeem him: Either his uncle, or his uncle’s son, may redeem him, or any that is nigh of kin unto him of his family may redeem him; or if he be able, he may redeem himself. And he shall reckon with him that bought him from the year that he was sold to him unto the year of jubilee: and the price of his sale shall be according unto the number of years, according to the time of an hired servant shall it be with him. If there be yet many years behind, according unto them he shall give again the price of his redemption out of the money that he was bought for (Lev. 25:47-51).

Mooney’s Strategy of Avoidance
It is worth pointing out that Mr. Mooney’s book includes comments on Leviticus 25, but only on verses 2-7, 15-16, 35-37, and 39-45. He scrupulously avoids mentioning verses 25-28 and 47-51 – verses that absolutely refute his conclusion regarding the supposedly biblically illegitimate nature of rental income. He freely admits that the economists are correct, that rental income is the same as interest income — a payment for the use of an asset over time, said Bohm-Bawerk, whom he quotes favorably on the question of the equivalence of rental income and interest income– and then he tries to justify his universal condemnation of interest income by laying down an equally universal condemnation of rental income. The problem is, the Bible clearly honors the legitimacy of rental income: a stream of income, either labor income or land income, which one receives when he purchases an income-producing asset for cash (i.e., capitalization). Mr. Mooney’s answer to this dilemma is simple and direct: he refuses to cite that portion of the Bible that categorically destroys
his argument. So, he says, it is immoral to collect income from any form of property. While Mr. Mooney is sufficiently astute tactically not to spell out the implications of this statement – in this regard, he follows the lead of his predecessor, Mr. Keynes – what he really means is that it is illegal biblically to seek a positive rate of return by loaning someone money to buy a house, and it is also illegal biblically to rent him a house. You are morally obligated to give him the use of the loan, interest-free, or the use of the house, rent-free. This is the economics of love. It is also a classic crank prescription for creating a society of homeless people. Sadly, this book is being read by otherwise intelligent Christians who are not used to following a complex chain of economic reasoning, so this broken chain of economic error impresses them.

He wrote the book specifically to refute me, as his footnotes and text reveal. He has read (but has not understood) my view of time preference as the true origin of interest. He recognizes that I am following Bohm-Bawerk and Mises on this point: that there is always a discount for cash when you purchase an expected stream of future services. People discount the present value of expected future goods in comparison to the same goods in the present. Because of this, no rational person will pay a thousand ounces of gold, cash, for that hypothetical gold mine.

The “Present” Is Mostly in the Future
Mr. Mooney argues that there are no future goods but only present goods. In one sense, he is correct. I would put it this way: “The present is all that any man can be certain he has, moment by present moment.” He puts it this way: “Future goods do not exist. There are only present goods in external reality.” The author believes that he has somehow refuted the concept of the inescapable discount applied to future goods. He has not. Future goods are not real in the present, he says, so therefore they do not command a cash price. He does not recognize, for one thing (among many, many others), that this non-existence of future goods is a very good reason why there is always a risk premium in free market interest rates: the promised future goods may not actually be returned to the lender. Instead of acknowledging this obvious fact, the author concludes: “Since the contemplation of ‘future goods’ is characterized by idealism, one may not actually compare ‘present goods’ and ‘future goods’ for purposes of economic calculation. The preference that is dictated by the discount of the ‘future goods’ cannot be avoided because one cannot possibly call upon an idea in his mind to serve a purpose that only a concrete object can serve. This is the economics of love. It is also the economics of incoherence. To the extent that I can make any sense of this argument, I think he is saying that future goods, not being physically present, are therefore irrelevant for present decisions. So much for the biblical doctrine of eternal judgment in the afterlife! Mr. Mooney regards the concept of future goods in much the same way as the covenant-breaker regards the concept of eternal punishment. “If it ain’t here now, it ain’t relevant now.” This is a fanatical form of present-orientation, the outlook of the lower-class individual. He makes himself as clear as he can on this point: “The point is that ‘future goods’ vs. ‘present goods’ presents no real choice. The two cannot be compared in value as though they were different quantities of the same class of goods. In truth, the choice of goods for meeting one’s needs is a choice of presently available goods. One present good compares only to other present goods.” The clearer he becomes, the more preposterous he sounds.

What’s the Point?
Fact: the present moment – a “point in time” – is as philosophically and operationally undefinable a phenomenon as a Euclidian point (an infinitesimal, no-dimensional section of a sequential phenomenon, a line). The fact is, we really cannot fully describe the pure instant in time that we call “the present.” Anyway, I cannot, and surely Mr. Mooney does not attempt to do so in his book. What we call “the present” is in fact the relatively more immediate future. I cannot do everything I would like to do right now, including offering you a precise working definition of “right now.” I have to pick and choose my decisions through time. I must order my choices: first, second, and third in the future, and even this ordering process takes time. Therefore, when I make a decision regarding the present cash value of any good, I make this evaluation moment by moment as I move through time. I make it in terms of whatever value I place on a future stream of services or pleasures that I expect to receive from the physical or the contractual item. The “front end” of this stream of future services is close at hand; how long it will continue to flow is guesswork. The initial flow of services may in fact be somewhat removed, as indicated by the warning in the fine print on the side of the box, “some assembly required.” The beginning of that expected flow of services may be a day away or a week away or a year away. The point is, there is just barely a “how” in any economic decision. There are only present expectations of varying degrees of the future. So, contrary to Mr. Mooney, who insists that there are no future goods in the present, I insist that from a rational decision-maker’s point of view, there are mostly future goods in the present — and this “mostly” is very, very close to one.

Infinite Interest Rates
If everyone were to conclude that the expected future stream of services provided by physical goods is irrelevant for present economic calculation, as Mr. Mooney insists that it is, then free market interest rates would approach infinity, for no one would voluntarily give up present goods for the sake of receiving economically “irrelevant” future goods. Also, the price of durable capital goods and durable consumer goods would fall almost to zero, for no one would value them for the sake of their expected future productivity, meaning any expected value three seconds away. Or two seconds away. Or a split second away. In short, we would say goodbye to civilization. This is the “economics of love.” It is also the economics of existentialism: the philosophy of the autonomous moment.

Decapitalization
I single out Mr. Mooney’s analysis because he is the only person I have ever seen who so forthrightly confronts the issue of time preference in his denial of the moral legitimacy of interest. He offers economic nonsense — incredibly naive nonsense — in his attempted denial of time preference in human action; to oppose the Fetter-Mises view of interest is necessarily to argue nonsense. It is the stark reality of Mr. Mooney’s nonsense that is so impressive. He makes it clear that if you refuse to go with Mises on the question of time preference, you logically must wind up with Mooney’s view regarding the economic irrelevance of the future. If society were to adopt Mr. Mooney’s view, and then attempt to enforce it by civil law, it would recapitalize itself. Rushdoony’s eloquent explanation of capitalization and his warnings regarding decapitalization should be taken seriously: we must choose between Christianity and existentialism.

Capitalization is the product of work and thrift, the accumulation of wealth and the wise use of accumulated wealth. This accumulated wealth is invested in effect in progress, because it is made available for the development of natural resources and the marketing of goods and produce. The thrift which leads to the savings or accumulation of wealth, to capitalization, is a product of character. Capitalization is a product in every era of the Puritan disposition, of the willingness to forego present pleasures to accumulate some wealth for future purposes. Without character, there is no capitalization but rather decapitalization, the steady depletion of wealth. As a result, capitalism is supremely a product of Christianity, and, in particular, of Puritanism, which, more than any other faith, has furthered capitalization. Today, however, the mood of modern Western man can best be described as existentialist. It subscribes to a philosophy in which the “moment” is decisive. It is not future oriented in that it does not plan, save, and act with the future in mind. The existentialist demands the future now. Some of the causes which concern student rebels may be valid, but their existentialist demand that the future arrive today make them incapable of capitalizing a culture. Existentialism requires that a man act undetermined by standards from the past or plans for the future; the biology of the
moment must determine man’s acts.

Very briefly stated, existentialism is basically lower class living converted into a philosophy. It is, moreover, the philosophy which governs church, state, school, and society today. The “silent majority” has perhaps never heard of existentialism, but it has been thoroughly bred into it by the American pragmatic tradition of the “public” or state schools. Our basic problem today, all over the Western world, is that Western civilization no longer has a true upper class at the helm. Future-oriented men no longer dominate society, politically, economically, religiously, educationally, or in any other way. Instead, dreamers who are basically lower class, who believe that political power can convert today into tomorrow, are in charge. The result is the domination of our politics by an economic policy which is the essence of the lower class mind and which leads to radical inflation. Spending today with no thought of tomorrow is a lower class standard, and this is the essence of our modern scene.

The vocal minority and silent majority are both deeply in debt, and they create national economies which are deeply in debt. The growing anarchism of our social life is a product of this same lower class mentality. This popular anarchism is a refusal to submit to law and discipline, and unwillingness to accept any postponement of hopes and dreams. It is closely related to tantrums of a child who demands his will be done now. Every major social agency today, church, state, school, and home is dedicated to creating this anarchistic, lower class mentality.

Mr. Mooney’s view of time-preference is existentialist and lower class to the core. He no doubt fails to understand this. His recommended policies would destroy civilization. He no doubt fails to understand this, too. Such is the fate of the compulsory economics of love. The road to economic hell is paved with good intentions.

He says that my views are incorrect because I rely on the Austrian School economists for insights into time preference. Were he more familiar with the history of economic thought, he would recognize the origin of his own ideas: the worst of Aristotle and the worst — economically, I mean — of John Maynard Keynes.

Conclusion
Every new movement that calls for a transformation of thought or culture will attract its share of fringe figures. The more publishing-oriented it is, the more it will attract people looking for the bogus immortality that the printing press appears to provide. I call this phenomenon the graffiti syndrome. It is the same temptation that persuades people of more limited literary aspirations to carve “John loves Mary” on public school desks, or limericks on the inside of lavatory doors. The Fabian movement in England is a good example of the sometimes fatal attractiveness of publishing: occultists, vegetarians, free love advocates, feminists, and screwballs of all varieties were drawn to the Webbs like midnight moths to a candle. All of them were looking to become part of the “wave of the future.” Only a few of them survived the test of time, to become remembered as the founders of yet another failed social religion.

Anyone can hang out a sign which announces that he is a Christian Reconstructionist. There is no licensing required. Not very many people choose to do this, since to join the tiny band of theonomists today is to become a modern-day John the Baptist, typing in the wilderness. But what should make a reader more than a little suspicious of anyone who claims to be a theonomist is the promoter’s narrow range of concern. Specialization is legitimate, but anyone who claims that he is offering a revolutionary blueprint for this or that aspect of society had better also offer at least a first draft of the overall integrated plan. The old rule of ecology is true: you cannot change just one thing. You cannot reconstruct just one aspect of society, or just one aspect of an economy. For example, if you suggest a zoning code that makes sewers illegal, you had better strongly recommend the installation of septic tanks; otherwise, you can expect considerable overflow problems. I perceive that Mr. Mooney is drowning in overflow.

Again, I do not expect any society to adopt Mr. Mooney’s baptized Aristotelianism. If it does, it will not remain productive very long. What does concern me is that a lot of well-meaning Christians will take such nonsense seriously, assume that it is “truly biblical” economics, and then try to “spread the gospel” of crackpottery in the name of Jesus. This would be an embarrassment to the kingdom of God generally and Christian Reconstruction specifically. We Christians are already regarded as otherworldly dreamers. Let us not provide additional ammunition to our enemies. But if you’re not convinced by the logic of my presentation, I’d like to borrow a few ounces of gold from you, interest-free, for ten years. Drop me a letter.

Additionally, in Chapter 26 of Boundaries of Dominion, North makes these comments:

If I want to gain legal control a piece of land that will provide me a passive income stream over a period of time, I can do it in either of two ways: 1) borrow the money and pay cash in advance for the use of the land, paying interest to the creditor; 2) lease the land weekly or monthly, paying rent to the owner. Legally, the terms of the two contracts are different. Economically, they are the same.

This leads us to an important conclusion: if paying interest for the use of money over time is illegal biblically, then paying money for the use of land over time is also illegal biblically. We call such payments for land rent. I will put it another way. If I were to borrow money at a rate of interest and then go out and use this money to pay cash for the use of a piece of property over the same period as the loan period, it is no different economically from going to the owner of the property and guaranteeing him monthly rent for that period. I can either guarantee to pay the creditor who loaned me cash a monthly rate of interest until I repay the principal or guarantee to pay the property owner a monthly rental payment until the lease expires. Legally, I am equally obligated to pay. Economically, it will cost me the same amount of money in a competitive market.

Very few of those people — never are they trained economists — who claim that all interest payments are immoral understand that their negative judgment against interest must apply equally to rent.(43) A denial of the legitimacy or legality of interest payments over time is also a denial of the legitimacy or legality of rental payments over time, i.e., a lease.

The critic of all interest payments who says that he opposes interest payments “because the Old Testament does” has a major problem with Leviticus 25:14-17, i.e., the law governing long-term land leases. If a lease is legitimate, then rent is also legitimate, for a lease is a long-term rental contract. If rent is legitimate, then interest is also legitimate, for interest in a modern capitalist market is a rental contract for the use of money — an agreement entered into only because borrowers have uses for things money can buy. There is a lender and a borrower in each case. There is an agreement to pay money in installments over time for the use of goods over the same period of time. The lender (a person who gives up money or goods for a period of time) forfeits the use of the things that the cash would buy. The borrower (a person who gains control over money or goods for a period of time) gains access to the things money can buy by means of his promise to repay money or goods in the future. In each case, the lender will not lend unless he receives more money or more goods in the future than he gives up today; otherwise, it would be irrational to give them up, except as an act of charity.

…The existence of a law governing land leases in Israel testifies to the error of interpreting the Bible’s prohibition against usury in charitable loans as a prohibition against all forms of interest. The decision to make a cash payment in order to acquire legal ownership of a stream of resource-generated income over a fixed period of time is identical economically to making a cash payment to buy an interest-paying bond with the same expiration date as the lease. This means that a prohibition against all interest payments must also be a prohibition against all rent payments. Yet this law establishes the legality of rent. I therefore conclude that the Bible does not prohibit interest in non-charity loans.(44)

43. One critic who has understood this is S. C. Mooney. He writes: “The economic similarity between usury and the rent of property readily is admitted. However, this close connection does not serve to legitimize usury, as Locke et all suppose; but to condemn rents.” Mooney, Usury: Destroyer of Nations (Warsaw, Ohio: Theopolis, 1988), p. 172. For my detailed critique of Mr. Mooney’s utterly bizarre theory of interest and his equally bizarre applications, see Tools of Dominion, Appendix G: “Lots of Free Time: The Existentialist Utopia of S. C. Mooney.”

44. The aforementioned Mr. Mooney has yet to reply to this argument, which I also offered in Tools of Dominion in 1990.

Mooney’s reply is here.