The principle of the system is that the currency shall represent an invested dollar, instead of a specie dollar.
The currency will, therefore, be redeemable by an invested dollar, except when redeemed by specie, or by being received in payment of debts due the banks.
The best capital will probably be mortgages and railroads; and these will very likely be the only capital which it will ever be expedient to use.
Inasmuch as railroads could not be used as capital, without a modification of their present charters, mortgages are probably the best capital that is immediately available.
Supposing mortgages to be the capital, they will be put into joint stock, held by trustees, and divided into shares of one hundred dollars each.
This stock may be called the Productive Stock, and will be entitled to the dividends.
The dividends will consist of the interest on the mortgages, and the profits of banking.
The interest on the mortgages should be so high—say six or seven per cent—as to make the Productive Stock worth ordinarily par of specie in the market, independently of the profits of banking.
Another kind of stock, which may be called Circulating Stock, will be created, precisely equal in amount to the Productive Stock, and divided into shares of one dollar each.
This Circulating Stock will be represented by certificates, scrip, or bills, of various denominations, like our present bank bills—that is, representing one, two, three, five, ten, or more shares, of one dollar each.