The following is an excellent excerpt from the book “WALL STREET: America’s Dream Palace” by Steve Fraser from Chapter Four titled “The Immoralist” on page 142 and I quote: “Wall Street’s reputation as a sinkhole of immorality goes back to the earliest days of the republic. Jefferson once described New York as “a cloacina of all the depravities of human nature.” He was thinking first of all about Wall Street.
Jeffersonians were preoccupied with the dangers of aristocracy. What they feared was both political reaction and moral decline; or, rather, they were convinced that the political well-being of the new republic depended on its moral good health; if one were endangered so must be the other. Aristocracy fused political subversion to moral corruption. Aristocrats were counter-revolutionaries who wanted to overthrow the new republic and might succeed in their aim because their way of life promised to eat away at the moral fiber of the new nation. Aristocrats, in the Jeffersonian view, were immoralists by their very nature. Their attachment to a life of luxury, their exemption from hard labor, and their gratuitous sense of entitlement were profoundly corrupting. They bred habits of sloth and contempt for all those Spartan virtues—simplicity, modesty, frugality, independence, honest labor, and meritocracy—without which the whole democratic experiment was a lost cause. Jefferson’s profile of the aristocrat expunged all the more admirable features of the aristocratic personality—a sense of honor, courage, disinterested public service, social generosity, and noblesse oblige—which champions of more elitist social and political arrangements like Hamilton naturally emphasized.
In the New World the roots of aristocracy were shallow; that was America’s great good fortune and promise for the future. Compared to the Old World, the new country was largely free of titled wealth and hereditary privilege. But a vigilant republic still had to stand guard. Especially in those new sectors of the economy subject to the power of money, great fortunes, accumulated without apparent effort, invited all the moral pitfalls traditionally associated with aristocratic decadence.
“Moneycrats” were singled out as agents of moral disarmament. Their sins were numerous, but three especially seemed most dangerous: those who spent their days trading and speculating in the mystifying value of paper wealth were gamblers, parasites, and hedonists. Gambling, a habit long associated with the aristocracy (as well as the demoralized lower orders), was considered a religious offense of the first order. In colonial days the Puritan divine Cotton Mather scathingly observed that “gains of money or estate by games, be the games what they will, are a sinful violation of the laws of honesty and industry which God has given us.”
Gambling was considered a form of divination, a devilish practice that presumed on God’s prerogative to see into the future. Speculative trading in the prospective value of land, goods, or money (or, as in William Duer’s case, government bonds) was merely a modern form of gambling and incited the same hubris as its older counterparts. Moreover, the gambler shared some fatal moral disabilities with the parasite and the hedonist.
By the time of the American Revolution there was already a robust plebian resentment of the aristocrat as parasite, a privileged nonproducer living off the hard labor of those he lorded over. While once labor carried with it the curse of Cain, in the new age of the democratic revolution this common fate, to live by the sweat of one’s brow, had found its redemption—indeed, was sanctified. And suddenly, those, like the aristocrat, the gambler, and the speculator, who lived off the honest earnings of others were offensive in the eyes of God. So, too, it was plain to see that a life free of toil was an incitement to hedonistic reveling. “Stock-jobbing” and “speculations” were part of a whole Olympics of economic games playing that encouraged libidinal excess, a dangerous release of animal passions pandering to men’s baser desires. The same plebian tradition that condemned the aristocrat as a parasite depicted him as congenitally debauched. How could he be otherwise, lacking the self-restraint that a regimen of hard work imposed? No less than the landed aristocrat of old, whose limitless appetites for carnal pleasures of the most depraved sort were legendary, the moneycrat of the new order was seen as a champion of self-indulgence, chasing after the same evanescent excitements, making a mockery of the moral order.
During the 1790s, when the passions dividing the followers of Hamilton and Jefferson were most inflamed, political broadsides, editorial admonitions, church homiletics, and didactic novels and poems tirelessly condemned these moral failings of the new moneyed aristocracy. One patriotic but gloomy poet worried:
“We thought when once our liberty was gain’d,
And Peace had spread its influence thro’ the land,
That Learning soon would raise its cheerful head,
And arts on arts would joyfully succeed;
Till all Columbia’s genius ‘gain to blaze,
and in true science more than rival’s Greece;
But Speculation, like a baleful pest,
Has pour’d his dire contagion in the breast;
That monster that would ev’rything devour.”
In the popular novel Dorvall; or, The Speculator the villainous speculator is a moral as well as an economic seducer, a man with a liquid identity, so depraved he even turns his romantic adventures into clever financial fuses. Anti-Federalist ministers sermonized that “barefaced” speculation would undermine “common honesty.” Jefferson warned George Washington that moneyed aristocrats were corroding the moral behavior of the new nation, luring people away from industrious labor “to occupy themselves and their capitals in a species of gambling destructive of morality. . . which introduced its poison into government itself.”
This Jeffersonian persuasion remained alive and well throughout the nineteenth century. In antebellum America exposing Wall Street’s’ aristocratic depravity excited the popular imagination, especially during the “age of the common man,” when Andrew Jackson became a folk hero. Young women were warned away from romantic attachments to Wall Street brokers, whose trade made them experts at dissimulation and betrayal. John Pintard, a Knickerbocker grandee, cautioned his daughter about such bon vivants, who were bound to end their days in ruin or even suicide. It was telling that some of the city’s earliest gambling parlors sprang up in and around the Street and depended on the patronage of speculators whose day jobs were scarcely different from what went on in and around the Street and depended on the patronage of speculators whose day jobs were scarcely different from what went on behind closed doors at night. Indeed, an infamous murder case suggested far worse. In 1836 a prostitute, Helen Jewett, was brutally murdered by Richard P. Robinson, a young clerk from the mercantile district. The world he and his pals worked in supported a male subculture whose attitudes about sex, work, and leisure defied the middle-class sense of propriety, including sexual propriety. Cheered on by his fellow clerks, Robinson was acquitted, an instance of upper-class immunity to the law which infuriated less-privileged members of the population, already convinced that lower Manhattan was a sinkhole of iniquity.
Potboiler novels and journalistic exposes circulated lurid depictions of the Street as a site of lost innocence. Like the ancient sirens of mythology; the financial district enticed callow young men from the countryside to abandon their devotion to work and family and addicted them to a life of compulsive gambling and pleasure-seeking at the cost of everything they once held dear. Frank Leslie’s Illustrated Newspaper, one of the first to cater to the tastes of the new urban middle class, ran a cartoon depicting the whole fraternity of Wall Street brokers and bankers as a band of inebriates reeling down the Street, empty liquor bottles labeled “bull” and “bear” left in their wake. “Story papers “ like the New York Ledger that circulated widely among the working classes editorialized in favor of combined moral and economic regulation, calling for enforcement of laws against gambling, defamation of character, and conspiracy to defraud. Over and over again magazine and newspaper illustrations sketched the consequences of addictive speculation: a man, still young but dissipated, lies on a bed, either dying or dead, an empty liquor bottle on the floor beside him, his distraught wife weeping forlornly in the foreground (perhaps a sad small child in the background), with a caption drawing the all-too-obvious moral of the story. The Adventures of Harry Franco; A Tale of the Great Panic, was America’s first depression melodrama, published soon after the panic of 1837. Harry, its ingenuous hero from the countryside, is mulcted not once but multiple times by unscrupulous commercial hucksters, just in case anyone might miss the point the moral perils awaiting those foolish enough to venture into this secretive world of treacherous double-dealings.
George Foster, the widely read antebellum pamphleteer and journalist who combined moralizing with a knack for vivid observation of everyday life in the new and mysterious big city, best captured this sense of Wall Street as a moral snake pit. In his New York by Gaslight, a series of newspaper sketches of his wanderings, he described Wall Street as a dehumanizing place: “Wall Street! Who shall fathom the depth and rottenness of the mysteries? Has gorgon passed them through thy winding labyrinths, turning with his smile everything to stone—hearts as well as houses?”
This shadowy world, Foster and others suggested, was also prone to wanton sexuality and sexual perversion. The hedonism encouraged by a life of fast money and idle hours was bound to break down inhibitions in all realms, including the sexual. Foster frightened—and titillated—his readers with images of “milk-white virgin bosoms given to the polluting touch of lust.” Aristocratic presumptions that had grown up in conjunction with mountains of unearned paper wealth encouraged their owners to believe they could possess whatever they fancied. The Quaker City; or, The Monks of Monk Hall (1844), the best-selling novel of the nineteenth century until the publication of Uncle Tom’s Cabin, was set in Philadelphia’s financial center—Chestnut Street was then more imposing than Wall Street—and vividly expressed this melodramatic dread of illicit intercourse between aristocratic financial power and sexual transgression. Its author, George Lippard, was a widely read journalist, freethinker, and social reformer. His story was erotic throughout and designed to reveal the moral underside of capitalism and the social derangement it fostered. Lippard undressed every “pillar of society,” bankers and merchants especially, who spent their days and nights carrying on at Monk Hall, committing repulsive sins—rape and incest among others—in a labyrinthine hideaway well stocked with opium, choice liqueurs, and ruined young women.
Moral anxieties agitated the political realm. President Jackson’s enormous popularity had something to do with the way he channeled his constituents’ queasiness about the ethics of their commercial zeal. He enhanced his reputation as a hero of the common man by making war against “the Monster Bank,” the Second Bank of the United States. The bank was headquartered in Philadelphia and presided over by Nicholas Biddle, a blue-blooded Philadelphia gentleman of surpassing arrogance and thus a perfect foil for Old Hickory’s denunciation of the bank as an incubator of aristocratic privilege. Presidential jeremiads directed at Biddle and the bank emphasized the institution’s economic immorality. Thundering that he wished “stock-jobbers, brokers, and gamblers. . . were all swept from the land,” Jackson warned that “the people of this country shall yet be punished for their idolatry.” This indictment was particularly wounding during a time when Americans were taking special pride in their industrious settling and building up of a country that not long previously had been a forested wilderness. It was maddening to watch merchant bankers and speculators heap up unimagined wealth without producing anything tangibly useful. On the contrary, their splendid carriages, Italianate mansions, and liveried help seemed too much like the products of legalized thievery. Moreover, their parasitism and immodest love of luxury were demoralizing, subverting the new nation’s commitment to frugal self-reliance. The opulence of financiers served as a moral stigma. But in a country in which pursuit of the main chance was practically universal, it was an ironic one.
Great wealth posed a dilemma. Americans were, after all, in love with moneymaking. Yet they also were deeply troubled by how it was made and what it might bring in its wake. During the antebellum years the issue simmered in the background while the country was preoccupied with the overriding question of slavery. After the Civil War, however, the conundrum of wealth and poverty in the rapidly industrializing economy commanded everyone’s attention. And in a debate that ranged from the pulpit to the Broadway theater, Wall Street came to occupy a distinctive niche within the American psyche.”
(NOT ONLY WAS OUR SYSTEM FAILING FINANCIALLY, IT WAS ALSO FAILING MORALLY, WHICH STARTED WAY BACK WHEN THE CONSTITUTION WAS BEING FORMED WHEN PRESIDENT THOMAS JEFFERSON AND LATER PRESIDENT ANDREW JACKSON QUESTIONED HAVING A CENTRAL BANK AND WHO WOULD IT BE WORKING FOR. IT’S AN AGE-OLD BATTLE BETWEEN PUBLIC ENTERPRISE AND PRIVATE ENTERPRISE. PRIVATE ENTERPRISE, A GROUP OF PRIVATE INDIVIDUALS RUNNING EVEN CORPORATIONS AND THE BOARD OF DIRECTORS OF BANKS, AS WELL AS CORPORATIONS FOR THEIR OWN BENEFIT. THESE UNSUCCESSFUL VENTURES ENDED UP WITH THE ENRON SCANDAL, ARTHUR ANDERSEN, MICHAEL MILKEN AND THE JUNK BOND S&L DISASTER, LEHMAN BROTHERS BANKRUPTCY, AIG WHICH LED TO THE 2008 $700 BILLION TARP BANK BAILOUT AS DEPICTED IN THE MOVIE “TOO BIG TO FAIL.” AND LATER THAT YEAR THE BERNARD MADOFF SCANDAL. THESE SAME BIG BANKERS, NOW CONSISTING OF EIGHT U.S. BANKS AND ONE FOREIGN BANK HAVE DERIVATIVE EXPOSURE OF $228.72 TRILLION, ACCORDING TO AN ARTICLE ON DEMONOCRACY.INFO WEBSITE TITLED “DERIVATIVES: THE UNREGULATED GLOBAL CASINO FOR BANKS.” AS WELL AS 460 HEDGE FUNDS CLOSED IN THE FIRST HALF OF 2014, ACCORDING TO BLOOMBERG NEWS. PUBLIC BANKING WOULD BE A MUCH BETTER WAY TO RUN A BANKING SYSTEM, WHICH PRESIDENT FRANKLIN ROOSEVELT ADOPTED, ALONG WITH THE GLASS STEAGALL ACT, AND WORKED SUCCESSFULLY FOR OVER 60 YEARS.
LaVern Isely, Overtaxed Independent Middle Class Taxpayer and Public Citizen and AAPR Members