58 MUTUAL BANKING. 



It increases the volume of the currency, and therefore decreases 

 the value of the individual silver dollar; thus causing an enhance- 

 ment in the price of all domestic commodities; giving an unnatural 

 advantage in our own markets to foreign manufacturers, who live 

 in the enjoyment of a more valuable currency and presenting irre- 

 sistible inducements to our own merchants to purchase abroad 

 rather than at home. 



It operates to give control over the currency to certain organ- 

 ized bodies of men, enabling them to exercise partiality, and loan 

 capital to their relatives and favorites; thus encouraging incapac- 

 ity, and depressing merit; and therefore demoralizing the people 

 who are led to believe that legitimate business, which should be 

 founded altogether upon capital, industry and talent, partakes of 

 the nature of court-favor and gambling. 



It operates to eucourage unwise speculation; and, by furnishing 

 artificial facilities to rash, scheming and incompetent persons, in- 

 duces the burying of immense masses of capital in unremunerative 

 enterprises. 



It reduces the value of our own currency below the level of the 

 value of money throughout the world, rendering over-importation 

 inevitable, causing our markets to be overstocked with foreign 

 goods, and thus making the ordinary production of the country to 

 present all the calamitous effects of over-production. 



It operates inevitably to involve the country and individuals 

 doing business in the country, in foreign debts. It operates also, by 

 blinding the people to the true nature of money, and encouraging 

 them to raise funds for the commencement and completion of haz- 

 ardous enterprises by the sale of scrip and bonds abroad, to mort- 

 gage the country, and the produce of its industry, to foreign hold- 

 ers of obligations against us, etc. 



ADVANTAGES OF A MUTUAL CURRENCY. 



Mutual Banks would furnish an adequate currency; for whether 

 money were hard or easy, all legitimate paper would be discounted 

 by them. At present, banks draw in their issues when money is 

 scarce (the very time when a large issue is desirable), because they 

 are afraid there will be a run upon them for specie; but Mutual 

 Banks, having no fear of a run upon them— as they have no metal- 

 lic capital, and never pretend to pay specie for their bills— can al- 

 ways discount good paper. 



It may appear to some readers, notwithstanding the explana- 



tles— tliat Is, In the low price or plcntlfulness of money— not reflecting 

 that, when money is too plenty, the sap and vitality of the country How 

 forth In a constant stream to enrich forclKn lands. An excessive supply 

 of money causes a deceitful appearance of prosperity, and favors tempo- 

 rarily a few manufacturers, traders and mechanics; but It Is always a 

 source of unnumbered calamities to the whole country. 



