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A History of Trade Unionism in the United States by Selig Perlman
page 52 of 291 (17%)
cooperative associations of workingmen in the confident expectation that
with such backing they would drive private capitalism out of existence
by the competitive route. But greenbackism differed from the scheme of
Lassalle in that it would utilize the government's enormous Civil War
debt, instead of its taxing power, as a means of furnishing capital to
labor. This was to be done by reducing the rate of interest on the
government bonds to three percent and by making them convertible into
legal tender currency and convertible back into bonds, at the will of
the holder of either. In other words, the greenback currency, instead of
being, as it was at the time, an irredeemable promise to pay in specie,
would be redeemable in government bonds. On the other hand, if a
government bondholder could secure slightly more than three percent by
lending to a private borrower, he would return his bonds to the
government, take out the corresponding amount in greenbacks and lend it
to the producer on his private note or mortgage. This would involve, of
course, the possible inflation of legal tender currency to the amount of
outstanding bonds. But inflation was immaterial, since all prices would
be affected alike and meanwhile the farmers, the workingmen, and their
cooperative establishments would be able to secure capital at slightly
more than three percent instead of the nine or twelve percent which they
were compelled to pay at the bank. Thereby they would be placed on a
competitive level with the middleman, and the wage earner would be
assisted to escape the wage system into self-employment.

Such was the curious doctrine which captured the leaders of the
organized wage earners in 1867. The way had indeed been prepared for it
in 1866, when the wage earners espoused producers' cooperation as the
only solution. But, in the following year, 1867, they concluded that no
system of combination or cooperation could secure to labor its natural
rights as long as the credit system enabled non-producers to accumulate
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