Page:A History of Banking in the United States.djvu/163



It seems best to introduce here a notice of the litigation which arose in connection with the Bank of the Commonwealth and bills of credit, although we shall be compelled, in so doing, to anticipate several years. The decision in Briscoe's case fell in the midst of important events which have not yet been narrated, and it is an especially important fact in regard to it that it was not rendered until several States had been committed to the great Bank of the State policy beyond what would appear from our history so far as it has yet advanced.

In the Bank of the Commonwealth of Kentucky vs. Wistar et al. (1829) the Supreme Court of the United States held that the bank must pay specie on demand in return for a deposit which had been made with it of its own notes, although these notes were, when deposited, worth only 50 cents on $1. It had been provided in the act establishing the bank that it should pay specie. The bank tried to plead the non-suability of a State, but it was held that if the State was the sole owner of the bank, and issued as a sovereign, it would be non-suable; then, however, the notes would be bills of credit. If the State issued as a banker, not a sovereign, then it was suable under the decision in the case of the Bank of the United States vs. the Planters' Bank of Georgia.

In Craig vs. Missouri (1830) the law of Missouri of I82I establishing loan offices was declared unconstitutional with respect to the notes issued, which were bills of credit. It was held that "to emit bills of credit conveys to the