PETITION FOR A MUTUAL BANKIXG LAW. 43 



precious metals, the Mutual Bank may issue bills to any extent, and 

 those bills will not be liable to any depreciation from excess of supply. 

 And, for like reasons, mutual money will not be liable to rise in 

 value if it happens at any time to be scarce in the market. The 

 issues of mutual money are therefore susceptible of any contrac- 

 tion or expansion which may be necessary to meet the wants of the 

 community, and such contraction or expansion cannot by any pos- 

 sibility be attended with any evil consequence whatever: for the 

 silver dollar, which is the standard of value, will remain through- 

 out at the natural valuation determined for it by the general de- 

 mand and supply of gold and silver throughout the whole world. 



The bills of Mutual Banks act merely as a medium of ex- 

 change: they do not and cannot pretend to be measures or stand- 

 ards of value. The medium of exchange is one thing; the 

 measure of value is another; and the standard of value still an- 

 other. Tlie dollar is the measure of value. Silver and gold, at a 

 certain degree of fineness, are the standard of value. The bill of a 

 Mutual Bank is a bill of exchange, drawn by all the members of the 

 mutual banking company upon themselves, indorsed and accepted 

 by themselves, payable at sight, but only in services and products. 

 The members of the company bind themselves to receive their own 

 money at par; that is, in lieu of as many silver dollars as are de- 

 noted by the denomination on the face of the bill. Services and 

 products are to be estimated in dollars, and exchanged for each 

 other without the intervention of specie.* 



Mutual money, which neither is nor can be merchandise, es- 

 capes the law of supply and demand, which is applicable to mer- 

 chandise only. 



THE REGULATOR OF VALUE. 



The utility of an article is one thing; its exchangeable value 

 is another; and the cost of its production is still another. But the 

 amount of labor expended in production, though not the measure, 

 is, in the long run, the regulator of value; for every new invention 

 wBich abridges labor, and enables an individual or company to 

 offer an increased supply of valuable articles in the market brings 

 with it an increase of competition. For, supposing that one dollar 

 constitutes a fair day's wages, and that one man by a certain pro- 

 cess can produce an article valued in the market at one 



*"I now undertake to afiirm ijositively, and without the least fear 

 that I can be answered, what heretofore I have but suggested— that a 

 paper Issued by the government, with the simple promise to receive it in 

 all Its dues, leaving its creditors to take it or gold and silver at their 

 option, would, to the extent that it would circulate, form a perfect 

 paper-circulation, which could not bo abused by the government; that 

 it would be as steady and uniform in value as the metals themselves; 

 and that, if by possibility, it should depreciate, the loss would fall, not 

 on the people, but on the government Itself," etc.— .1. C. Calhodn: 

 Speech in reply to Mr. Webster on the Sub-Treasury Bill, March 22, 1838. 



