40 MUTUAL BANKING. 



ADVANTAGES OF MUTUAL BANKING. 



It may be asked "What advantage does mutual banking hold 

 out to individuals who have no real estate to offer in pledge?" We 

 answer this question by another: What advantage do the existing 

 banks hold out to individuals who desire to borrow, but are unable 

 to offer adequate security? If we knew of a plan whereby, through 

 an act of the legislature, every member of the community might be 

 made rich, we would destroy this petition, and draw up another 

 embodying that plan. Meanwhile, we affirm that no system was 

 ever devised so beneficial to the poor as the system of mutual bank- 

 ing; for if a man having nothing to offer in pledge, has a friend who 

 is a farmer, or other holder of real estate, and that friend is willing 

 to furnish security for him, he can borrow money at the mutual 

 bank at a rate of 1 per cent interest a year; whereas, if he should 

 borrow at the existing banks, he would be obliged to pay 6 per cent. 

 Again, as mutual banking will make money exceedingly plenty, it 

 will cause a rise in the rate of wages, thus benefiting the man who 

 has no property but his bodily strength; and it will not cause a 

 proportionate increase in the price of the necessaries of life: for the 

 price of provisions, etc., depends on supply and demand; and 

 mutual banking operates, not directly on supply and demand, but 

 to the diminution of the rate of interest on the medium of exchange. 

 Mutual banking will indeed cause a certain rise in the price of com- 

 modities by creating a new demand; for, with mutual money, the 

 poorer classes will be able to purchase articles which, under the 

 present currency, they never dream of buying. 



But certain mechanics and farmers say, "We borrow no money, 

 and therefore pay no interest. How, then, does this thing concern 

 us?" Hearken, my friends I let us reason together. I have an im- 

 pression on my mind that it is precisely the class who have no deal- 

 ings with the banks, and derive no advantages from them, that 

 ultimately pay all the interest money that is paid. When a manu- 

 facturer borrows money to carry on his business, he counts the in- 

 terest he pays as a partof his expenses, and therefore adds the amount 

 of interest to the price of his goods. The consumer who buys the 

 goods pays the interest when he pays for the goods; and who is the 

 consumer, if not the mechanic and the farmer? If a manufacturer 

 could borrow money at 1 percent, he could afford to undersell all his 

 competitors, to the manifest advantageof the farmer and mechanic. 

 The manufacturer would neither gain nor lose; the farmer and 

 mechanic, who have no dealings with the bank, would gain the 

 whole difference; and the bank— which, were it not for the compe- 

 tition of the Mutual Itank, would have loaned the money at (j per 

 cent interest— would lose the whole difference. It is the indirect 

 relation of the bank to the farmer and mechanic, and not its direct 

 relation to the manufactunir and merchant, that enables it to nuike 

 money. When foreign competition prevents tlie manufacturer from 

 keeping up the price of his goods, the farmer and mechanic, who 



