Edward Kellogg

• Edward Kellogg
• Born: October 18, 1790
• Died: April 29, 1858

Financial reformer, was born in Norwalk, Connecticut, the son of James Kellogg and Lydia (Nash) Kellogg. His father, whose family had settled in Connecticut in 1656, was a prosperous farmer. Edward Kellogg received a modest education in Dutchess County, New York, where his family settled in 1793. In 1802 the Kelloggs moved again, this time to Northfield, Connecticut. Kellogg worked as a young man in Norwalk, married Esther Fenn Warner in 1817, and went to New York City in 1820; there he became a wholesale drygoods merchant and set up his own firm, Edward Kellogg & Co.

Kellogg’s ideas of financial reform began to develop in the panic of 1837, when, despite substantial assets, he could not collect his debts and had to suspend business. In this period of Jack-sonianism marked by the struggle over the existence of the Bank of the United States, the system of monetary circulation was a major public political issue. Kellogg placed the blame for the panic on the monetary system, convinced that money should be controlled and issued by the government as a public medium of exchange rather than by private corporations, whose influence was seen as malign by many reformers. Under the prevailing system, Kellogg believed, usurers extorted funds from borrowers.

Kellogg rehabilitated himself financially through the sale of real estate in Brooklyn, where he moved in 1838. In five years he acquired enough property to be able to retire, and after 1843, working out of a New York City office, he devoted himself to the development of his views on the financial system and the circulation of those views to others. In that same year he financed the newspaper publication of Currency: the Evil and the Remedy, which interested Horace Greeley of The New-York Tribune, who helped to circulate it.

Kellogg refined this in a revised version entitled Labor and Other Capital: The Rights of Each Secured and the Wrongs of Both Eradicated (1849). His proposals, he said, could deal effectively and peaceably with the depression of the laboring classes, whose discontents were being manifested partly by the growth of workingmen’s organizations. His plan for a National Safety Fund established by the federal government (with state branches) was simple. The fund would lend money based on real estate. All money in circulation would be legal tender, made perfectly secure with a fixed rate of interest at a point most conducive to the public well-being. The absence of variation would make usury laws needless. By an offer of the required security, anyone could obtain money, which would be on a par in all parts of the country. Private lenders would be forced to lower their rates. No state or section would have an advantage over any other. The volume of currency would always adjust itself to the needs of trade; scarcity and surpluses would be eliminated. Trade unions would have a source of inexpensive capital. The interest on money, Kellogg believed, would govern distribution to labor and management; fixing and maintaining the appropriate rate of interest would therefore guarantee to the producing classes the just reward of their labor.

Defending the laboring classes, Kellogg attacked the notion that economic poverty was due to lack of education or cultivation. “If all our people were learned in Greek and Latin, as well as in other languages and in the sciences,” he said, “the ground must continue to be tilled, and railroads, houses and so forth, be built by labor.” Workers deserved, he felt, a larger share of the comforts of life. All civilized nations, were afflicted every few years with “great revulsions in trade,” leaving the poor to beg “from door to door for old clothes . . . and for the crumbs that fall from the tables of the rich.” Only a national currency could solve these troubles.

Kellogg sent copies of his book to French political leaders, including members of the assembly and to the anarchist Pierre Joseph Proudhon, but his work failed to attract the attention he desired. He continued to refine his views, however, suggesting a just rate of interest derived from the expense of circulating money. After his death Kellogg’s theories received the recognition denied during his life. He had favored government notes secured by land or other “real values,” issued at one percent interest, and exchangable for government bonds bearing one percent interest. During the Civil War the United States did issue such bonds at low interest and usable as money. His daughter, Mary Kellogg Putnam, in 1861 issued A New Monetary System, a pamphlet edition of Labor and Other Capital that was widely read and that caused Kellogg to be called the father of the Greenback movement, which sought to reform the monetary system with the support of farmers, workers, and small businessmen. In some ways this movement paved the way for populism later in the century.

Kellogg’s work also influenced members of the National Labor Union and apparently contributed to attempts to form a political party of labor. Kellogg had begun by examining the causes of his own plight during the 1837 panic. After giving a radical interpretation of the popular view that the monetary system was critically important economically, he established a connection between the human needs of laborers and the mechanical operation of the financial system—an approach that foreshadowed the monetary solutions to social problems offered by such later reformers as William Jennings Bryan. By making this connection, Kellogg also suggested some aspects of the thought of European theorists who advanced the labor theory of value as a central factor in the industrial economy. Kellogg died in Brooklyn at sixty-seven. At the time of his death he was at work on a new edition of his book, still seeking to develop his theories.

Biographical sources include The Dictionary of American Biography (1933); a sketch by M. K. Putnam, in Labor and Capital (1883 edition); J. R. Commons, and J. B. Andrews, Documentary History of American Industrial Society, vol. 9 (1911); see also P. S. Foner, History of the Labor Movement in the United States, vol. 1 (1947). An obituary appeared in the New York Daily Tribune, April 30, 1858.