Readings in Money and Banking: Selected and AdaptedPhillips, Chester Arthur
General
Readings in Money and Banking: Selected and Adapted
Phillips, Chester Arthur
Banks and banking; Banks and banking -- United States; Money
The essential idea of "legal tender" is that quality given to money by
law which obliges the creditor to receive it in full satisfaction of a
past debt when expressed in general terms of the money of a country. A
debt is a sum of money due by contract, express or implied. When our
laws, for instance, declare that United States notes are legal
tender--and this is the only complete designation of a legal-tender
money--for "all debts public and private," it must be understood that
this provision does not cover any operations not arising from contract.
Current buying and selling do not make a situation calling for legal
tender; a purchaser cannot compel the delivery of goods over a counter
by offering legal-tender money for them, because, as yet, no debt has
been created.[6]
Contracts made in general terms of the money units of the country must
necessarily often be interpreted by the courts. The existence of
contracts calling for a given sum of dollars and the necessity of
adjudicating and enforcing such contracts, require that there should be
an accurate legal interpretation of what a dollar is. As every one
knows, the name, or unit of account, is affixed to a given number of
grains of a specified fineness of a certain metal. This being the
standard, and this having been chosen by the concurring habits of the
business world, it is fit that the law should designate that, when only
dollars are mentioned in a contract, it should be satisfied only by the
payment of that which is the standard money of the community.
Public-domain text, read in full here on John Shaqi.
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