60 MUTUAL BANKI^^G 



the bank's vaults; and every cancelling of a dollar-bill would cor- 

 respond to the issue by the banks of a specie dollar. It is by the ex- 

 ercise of banking privileges — that is, by the issue of bills purporting 

 to be, but which are not, convertible — that the banks effect a de- 

 preciation in the price of the silver dollar. It is this fiction (by 

 which legal value is assimilated to, and becomes, to all business in- 

 tents and purposes, actual value) that enables bank-notes to depre- 

 ciate the silver dollar. Substitute verity in the place of fiction, 

 either by permitting the banks to issue no more paper than they 

 have specie in their vaults, or by effecting an entire divorce between 

 bank-paper and its pretended specie basis, and the power of paper 

 to depreciate specie is at an end. So long as the fiction is kept up, 

 the silver dollar is depreciated, and tends to emigrate for the pur- 

 pose of traveling in foreign parts; but the moment the fiction is de- 

 stroyed, the power of paper over metal ceases. By its intrinsic 

 nature specie is merchandise, having its value determined, as such, 

 by supply and demand; but on the contrary, paper-money is, by its 

 intrinsic nature, not merchandise, but the means whereby merchan- 

 dise is exchanged, and as such ought always to be commensurate in 

 quantity with the amount of merchandise to be exchanged, be that 

 amount great or small. Mutual money is measured by specie, but 

 is in no way assimilated to it; and therefore its issue can have no 

 effect whatever to cause a rise or fall in the price of the precious 

 metals. 



