But taking all this material property at _only half_ its actual value, it is still capable of supplying the twenty-five thousand millions of dollars--or one thousand dollars each--which these laborers need.
Now, we know--because experience has taught us--that _solvent_ promissory notes, made payable in coin on demand, are the best money that mankind have ever had; (although probably not the best they ever will have).
To make a note solvent, and suitable for circulation as money, it is only necessary that it should be made payable in coin on demand, and be issued by a person, or persons, who are known to have in their hands abundant material property, that can be taken by law, and applied to the payment of the note, with all costs and damages for non-payment on demand.
_Theoretically,_ I repeat, all the material property in the country, that can be taken by law, and applied to the payment of debt can be used as banking capital; and be represented by promissory notes, made payable in coin on demand. And, _practically_, so much of it can be used as banking capital as may be required for supplying all the notes that can be kept in circulation as money.
Although these notes are made legally payable in coin on demand, it is seldom that such payment is demanded, _if only it be publicly known that the notes are solvent_: that is, if it be publicly known that they are issued by persons who have so much material property, that can be taken by law, and sold, as may be necessary to bring the coin that is needed to pay the notes. In such cases, the notes are preferred to the coin, because they are so much more safe and convenient for handling, counting, and transportation, than is the coin; and also because we can have so many times more of them.
These notes are also a legal tender, to the banks that issue them, in payment of the notes discounted; that is, in payment of the notes given by the borrowers to the banks. And, in the ordinary course of things, _all_ the notes, issued by the banks for circulation, are wanted, and come back to the banks, in payment of the notes discounted; thus saving all necessity for redeeming them with coin, except in rare cases. For meeting these rare cases, the banks find it necessary to keep on hand small amounts of coin; probably not more than one per cent. of the amount of notes in circulation.