The possibly startling fact is that the major social battle raging before, during, and after
the American Revolution was over the proper uses of money and credit in American life.
For ordinary people of the period, these were hardly abstractions.
The only real money in 18th-century America was metal — silver and gold coin from England, Spain, and Mexico — and for long, terrible periods, money was rarely seen by ordinary people. Small farmers and artisans, wanting to survive and improve their lot, had to borrow. Merchants, gaining access to metal through imperial trading networks, used their money to make money, becoming lenders. Well before the Revolution, Americans defined themselves in practical terms either as “debtors” — poor and working people in small-scale enterprise — or “creditors” — well-heeled merchants growing their money by lending it.
Workings of the debtor-creditor relationship will sound unpleasantly familiar. Merchants had the money supply conveniently sewn up.
Small farmers and artisans had to post the land and shops they hoped to develop as collateral for the credit they needed.
Merchants might set interest rates as high as twelve percent — per month. Default, often predictable at the loan’s outset, subjected borrowers to foreclosures, which in bad times were epidemic.
Families became indigent while their land, tools, and homes were snapped up at bargain prices, often by the merchants themselves, who speculated in land as well, and were building immense parcels.
The rich got richer.
Is it any wonder that ordinary people viewed this disastrous economic predicament not as some incidental fallout from vigorous free-market competition, but as an egregious, systemic injustice with political, moral, even spiritual implications? They were being held back, exploited, and even ruined by a monopoly on money and credit. And unlike today’s populist right, founding-era Americans did not imagine that government’s simply leaving markets alone would create new and exciting opportunities for them.
They believed their governments should make laws to restrain the overwhelming power of the creditors’ metal and protect those who labored and produced goods from those
who planned dynasties of descendants living in luxurious idleness.