32 MUTUAL BANKING. 



himself to purchase such things as he may require in his .usiness, 

 without .vaiting for the six months to expire. But bills of exchange 

 do more than this. They not only obviate, upon occasions, the 

 necessity for ready money; they not only enable a man to com- 

 mand ready money before the debts due to him arrive at maturity; 

 they often actually take place and perform the functions of mcjney 

 itself. J. Stuart Mill, quoting from Mr, Thornton, says: "Let us 

 imagine a farmer in the country to discharge a debt of £10 to his 

 neighboring grocer, by giving him a bill for that sum, drawn on his 

 corn-factor in London, for grain sold in the metropolis; and the 

 grocer to transmit the bill— ho having previously indorsed it— to a 

 neighboring sugar-baker in discharge of a like debt; and the sugar- 

 baker to send it when again indorsed, to a West India merchant in 

 an outport; and the West India merchant to deliver it to his coun- 

 try banker, who also indorses it and sends it into further circula- 

 lalion. The bill will in this case have effected live payments, ex- 

 actly as if it were a £10 note payable to bearer on demand. A mul- 

 titude of bills pass between trader and trader in the country in the 

 manner which has been described, and they evidently form in the 

 strictest sense, a part of the circulating medium of the kingdom." 

 Mr. Mill adds: "Many bills, both domestic and foreign, are at 

 last |)resented for payment quite covered with indorsements, each 

 of which represents either a fresh discounting, or a pecuniary 

 transaction in which the bill has performed the functions of money. 

 Up to twenty years ago, the circulating medium of Lancashire for 

 sums above £5 was ahnost entirely composed of such bills." 



In our exiilanation of the system of banking which results from 

 a generalization of the bill of exchange, we will let the master 

 speak for himself: 



proudhon's i?.\nk. 



"We must destroy the royalty of trold: we must republicanize 

 specie, by making every product of labor ready money. 



"Let no one be frightened beforehand. I by no means propose 

 to reproduce under a rrjuvenatcd form, the old ideas of paper 

 money, money of paper, assignats, bank-bills, etc., etc.; for all these 

 palliatives have been known, tried and rejected long ago. These 

 representations on pafx-r, by which men liave believed themselves 

 able to replac(! the absent god, are, all of them, nothing other than 

 a homage paid to metal — an adoration of metal, which has been 

 always present to men's minds, and which has always been taken 

 by them as the measure or evaluator of products. 



"Everybody knows what a bill of exchange is. The cieditor 

 r«:-.'iuests the debtor to pay to him, or t(» his order, at such a place, 

 at such a date, such a sum of money. 



"The promissory note is the bill of exchange inverted; the 

 debtor |)romises the creditor that he will pay, etc. 



" 'The bill of exciiange,' says the statute, 'is drawn from on<; 

 place on another. It is dated. It announces the sum to be paid; 



