PETITION FOR A MUTUAL BANKING LAW. 39 



9. No Mutual Bank shall receive other than Mutual-Bank 

 paper-money in payment of debts due to it, except at a discount of 

 one-half of one per cent. 



10. The Mutual Banks of the several counties in the Common- 

 wealth shall be authorized to enter into such arrangements with 

 each other as shall enable them to receive each other's bills in pay- 

 ments of debts; so that, for example, a Fitchburg man may pay his 

 debts to the Barre Bank in Oxford money, or in such other Worces- 

 ter-county money as may suit his convenience. 



REMARKS. 



Let A, B, C, D and E take a mortgage upon real estate owned 

 by F, to cover a value of, say,?600; in consideration of which 

 mortgage, let A, B, C, D and E, who are timber-dealers, hardware 

 merchants, carpenters, masons, painters, etc., furnish planks, 

 boards, shingles, nails, hinges, locks, carpenters' and masons' labor, 

 etc., to the value of $(500, to F, who is building a house. Let the 

 mortgage have six months to run. A, B, C, D and E are perfectly safe; 

 for either F pays at the end of the six months, and then the whole 

 transaction is closed; or F does not pay, and then they sell the real 

 estate mortgaged by him, which is worth much more than ?600, and 

 pay themselves, thus closing the transaction. This transaction, 

 generalized, gives the Mutual Bank, and furnishes a currency 

 based upon products and services, entirely independent of hard 

 money, or paper based on hard money. B^or A, B, C, D and E may 

 give to F, instead of boards, nails, shingles, etc., 600 certificates of 

 his mortgage, said certificates being receivable by them for services 

 and products, each one in lieu of a silver dollar; each certificate 

 being, therefore, in all purchases from them, equivalent to a one- 

 dollar bill. If A, B, C, D and E agree to receive these certificates, 

 each one in lieu of a silver dollar, for the redemption of the mort- 

 gage; if, moreover, they agree to receive them, ca.ch one in lieu of a 

 silver dollar, from whomsoever it may be, in all payments— then A, 

 B, C, D and E are a banking company that issues mutual money; 

 and as they never issue money except upon a mortgage of property of 

 double the value of the money issued, their transactions are always 

 absolutely safe, and their money is always absolutely good. 



Any community that embraces members of all trades and pro- 

 fessions may totally abolish the use of hard money, and of paper 

 based on hard money, substituting mutual money in its stead; and 

 they may always substitute mutual money in the stead of hard 

 money and bank bills, to the precise extent of their ability to live 

 within themselves on their own resources. 



THE RATE OF INTEREST. 



As interest-money charged by Mutual Banks covers nothing 

 but the expenses of the institutions, such banks may lend money, at 



A R.VTE OF I.KSS THAN ONE PER CENT PER ANNU.M, to persons offer- 



ng good security. 



