Where all kinds of money are equally good, the payment of a loan from a bank is a simple matter if the debtor can control any kind of money. Whether the bank-notes of national banks, or treasury notes or silver notes or gold notes are used, no question can arise as to their value. The legal tender moneys are always, of course, a good tender, unless the loan is payable in gold or coin. But if those moneys vary in value, all sorts of difficulties are likely to arise. At the present time this parity is maintained by the fact that silver coin can be readily changed into legal tender notes. The government's faith is pledged to pay the notes in coin, just as the treasury notes for silver purchases are payable in coin. The government chooses, in order to maintain the parity, to pay in gold, or is ready to pay in gold, which keeps all the token money on a

Bank v. Thompson, 7 Smedes & M. 443. If the assignment was illegal it would confer no title. These cases are as anomalous as the banking system.

12 See Sec. Sec. 32 and 33, ante.

13 Hamtramck v. Selden, 12 Grat. 28.

14 See Sec. Sec. 33,191, ante, and note 4 to Sec. 197, ante.

15 See last nota parity with gold. So that it is really immaterial, under the present condition, whether a loan is payable in gold or not. But the least change in the policy of the government would at once precipitate upon us the evils of a currency where every kind of money except gold coin and gold notes would be at an enormous discount. Even the national-bank notes would join in the crash, because the bonds which secure them are payable in coin. The situation of the circulating medium in the halcyon days of "wild cat" and "red dog" currency, and in the palmy days of the state banks of issue, finds expression in the decisions of that period. We have already noticed some curious instances of the payment of deposits1 and discounts.2 Owing to the peculiar nature of some state banks it was possible for a debtor to the bank to pay his debt, in one instance at least, in state bonds or in the interest due thereon.3 The debtor, however, could not pay his debt by setting off the stock of the bank.4 The debtor could not pay in uncurrent bank-bills, nor would the bank-bills of any other bank but the one suing or owning the debt be a discharge of or set-off against the note.8 In case the debtor attempted to pay, or, what amounts to the same thing, attempted to set off the bills of the bank holding the loan or the debt, the curious result was as follows: If he tendered the bills of the bank the tender was not good and would not stop the running of interest.6 If he attempted to set off the bills of the bank suing him, his right depended upon the fact whether he owned the bills at the time the suit was commenced or acquired them afterwards. In the former case he could set them off;7 in the latter case he could not.8 But statutes compelled the bank to take its own bills in payment of its claims.9 In such case the bank could get rid of this liability by assigning the debt, in which event the bank's bills were not a good set-off if the assignment was bona fide,10 unless, in Pennsylvania, the debtor held them at the time of the assignment, if he was informed of it.11 Since a " stock note " might be either a note given for a subscription to stock or a note given for stock purchased from the bank, where nothing more appeared than that the judgment was for a stock note, the bank-bills were a good payment.12 It was held also before a statute compelling the bank to take its own bills was passed, that the bank was not compelled to do so where it had discounted the note in good money, not depreciated paper.13 When the bank became insolvent, further complications were introduced which will be considered under a later section.11 To the present generation, who have had little experience in depreciated currency, and none in currency composed of bills of numberless banks of doubtful or no value, it is almost impossible to conceive of business being transacted under such conditions.15

16 It is thought that the usury statutes of some states are the only instances of such a proceeding.

17 Bruce v. Hawley, 31 Vt. 643. One not a party to an illegal transaction has no right to set up the fact of illegality.

18 Snyder v. State Bank, 1 I11 161. But see for the true rule, Sec. 30, ante. The court overlooked the fact that a defacto corporation can exist only where adejure organization would be possible.

1 Note 2 to Sec. 17, ante, and Fort v. Bank of Cape Fear, 61 N. C. 417; Bank of Kentucky v. Wister, 2 Pet. 318; Gumbel v. Abrams, 20 La Ann. 568. For collections, see note 1 to Sec. 176, ante.

2 Notes 6-8 to Sec. 196, ante; the last two cases in note 6 to Sec. 196, ante.

3Fagan v. Stillwell, 19 Ark. 282.

4 Harper v. Calhoun, 7 How. (Miss.) 203

5 Moise v. Chapman, 24 Ga. 249. The cases in this section all recognize this principle. See also Jefferson Co. Bank v. Chapman, 19 Johns. 322.

6 Hallowell Bank v. Howard, 13 Mass. 235; Hevener v. Kerr, 4 N. J. Law, 58. Compare Northampton Bank v. Balliet, 8 Watts & S. 311. But the general rule is that banknotes are so far money that a tender of bank-notes must be expressly objected to on that ground. Phillips v. Blake, 1 Met 156; Thomas v. Todd, 6 Hill 340, seem to suggest the rule.

7 Kelly v. Garrett, 6 I1L 649. Unless a statute provided otherwise. Bank of Pennsylvania v. Spangler, 32 Pa. 474.

8 See cases in last nota

9 Abbott v. Agricultural Bank, 11 Sraedes & M. 405; Niagara Bank v. Rosevelt, 9 Cow. 409. The method in one state was obtaining a rule to show cause why bank should not take its own notes. Mann v. Blount, 65 N. C. 99

10McDougal v. Holmes, 1 Ohio, 176; Treble v. Bank of Grenada, 2 Smedes & M. 523; Farmers' Bank v. Willis, 7 W. Va. 31.

11 Philips v. Bank of Lewiston, 18

Pa. 394; Northampton Bank v. Bal-liet, 8 Watts & S. 311. See also Bank of Bennington v. Booth, 16 Vt. 360.

12 Dunlop v. Smith, 12 111. 399.

13 Commercial Bank v. Atherton, 1 Smedes & M. 641. See Riggs v. Dyche, 2 Smedes & M. 605.

14 See Sec. 224,post

15 Although the national-bank notes are not a legal tender, the government takes them for all demands due it except duties, and each national bank must take every other national bank's notes. Thus they are practically legal tender.