Obviously, capital cannot assume the position of
an irresponsible sovereign, living in a sphere beyond the domain of law,
without inviting the fate which has awaited all sovereigns who have
denied or abused their trust.
The operation of the New York Clearing-House is another example of the
acquisition of sovereign power by irresponsible private persons.
Primarily, of course, a clearing-house is an innocent institution
occupied with adjusting balances between banks, and has no relation to
the volume of the currency. Furthermore, among all highly centralized
nations, the regulation of the currency is one of the most jealously
guarded of the prerogatives of sovereignty, because all values hinge
upon the relation which the volume of the currency bears to the volume
of trade. Yet, as everybody knows, in moments of financial panic, the
handful of financiers who, directly or indirectly, govern the
Clearing-House, have it in their power either to expand or to contract
the currency, by issuing or by withdrawing Clearing-House certificates,
more effectually perhaps than if they controlled the Treasury of the
United States.
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