PETITION FOR A MUTUAL BANKING LAW. 41 



are consumers, do not pay the interest-money: but still the interest 

 is paid by the class that derive no benefit from the banks; for, in 

 this case, the manufacturer will save himself from loss by cutting 

 down the wages of his workmen who are producers. Wages fluc- 

 tuate, rising and falling (other things being equal) as the rate of 

 interest fails or rises. If the farmer, mechanic and operative are 

 not interested in the matter of banking, we know not who is. 



MUTUAL MONEY IS GENERALLY COMPETENT TO FORCE ITS OWN 

 WAY INTO GENERAL CIRCULATION. 



Let us suppose the Mutual Bank to be at first established in a 

 single town, and its circulation to be confined within the limits of 

 that town. The trader who sells the produce of that town in the 

 city and buys there such commodities— tea, coffee, sugar, calico, 

 etc.— as are required for the consumption of his neighbors, sells and 

 buys on credit. He does not pay the farmer cash for his produce; 

 he does not sell that produce for cash in the city; neither does he 

 buy his groceries, etc., for cash from the city merchant: but he 

 buys of the farmer at, say, eight months' credit; and he sells to 

 the city merchant at, say, six months' credit. He finds, more- 

 over, as a general thing, that the exports of the town which pass 

 through his hands very nearly balance the imports that he brings 

 into the town for sale; so that, in reality, the exports — butter, 

 cheese, pork, beef, eggs, etc.— pay for the imports— coffee, sugar, 

 etc. And how. indeed, could it be otherwise? It is not to be sup- 

 posed that the town has silver mines and a mint; and, if the people 

 pay for their imports in money, it will be because they have be- 

 come enabled so to do by selling their produce for money. It fol- 

 lows, therefore, that the people in a country town do not make ihe 

 money, whereby they pay for store-goods, off each other, but that 

 they make it by selling their produce out of the town. There are, 

 therefore, two kinds of trading going on at the same time in the 

 town— one trade of the inhabitants with each other; and another 

 of the inhabitants, through the store, with individuals living out of 

 town. And these two kinds of trade are perfectly distinct from 

 each other. The mutual money would serve all the purposes of the 

 internal trade; leaving the hard money, and paper based on hard 

 money, to serve exclusively for the purposes of trade that reaches 

 out of the town. The mutual money will not prevent a single dol- 

 lar of hard money, or paper based on hard money, from coming 

 into the town; for such hard money comes into the town, not in 

 consequence of exchanges made between the inhabitants them- 

 selves, but in consequence of produce sold abroad.* So long as 

 produce is sold out of the town, so long will the inhabitants be able 

 to buy commodities that are produced out of the town; and they 



*Tbese remarks may be generalized, and applied to the commerce 

 which is carried on between nations. 



