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tents and purposes, the most perfect and desirable form of capital, for the reason that it is the only form of capital which will at any time almost instantly procure all other forms of capital. Practically speaking, that man has capital who holds an instantly convertible title to capital.[1]

If this be true, then Mr. Foster's claim that mutual banking involves the "making use of capital that belongs to some one else" falls immediately. Does he mean to say that, when the borrower of a mutual bank's notes goes into the market and buys capital with them, he is thereby keeping the seller out of his capital? If so, then Mr. Foster, when he pays his butcher cash for a beefsteak for his to-morrow's breakfast, is keeping his butcher out of his capital. But does either he or his butcher ever look at his conduct in that light? If that is being kept out of capital, then is the butcher only too glad to be thus deprived. He keeps a shop for the express purpose of being kept out of his capital, and he feels that it's very hard lines and a very dull season when he isn't kept out of it. He knows that, when he sells a beefsteak to Mr. Foster for cash, he parts with capital for which he has no use himself and gets in exchange a title convertible whenever he may choose into such capital as he has use for, and he knows further that he greatly benefits by the transaction. The position of Mr. Foster's butcher is precisely parallel to that of the manufacturer of machinery who sells a plough or a press or an engine to a borrower from a mutual bank. Clearly, then, Mr. Foster's sympathy for this manufacturer is misplaced. Of course the position which I have just taken does not hold with notes that will not command capital,—that is, that are not readily received as money. But that is not the point under dispute. When Mr. Foster shall question the solvency of mutual money, I will meet him on that point also. For the present my sole contention against him is that the man who exchanges a material value for good money is not thereby kept out of his capital.

  1. This paragraph on the surface seems contradictory of the position taken on a previous page in answer to "Basis." And in form and terms it does contradict it. But a careful reading of both passages, in connection with the accompanying explanatory sentences, will show that there is no inconsistency between them.