Page:Forgotten Man and Other Essays.djvu/198

 not arbitrary, has followed custom, recognized it, ratified it, and given it sanctions. (1) A legal tender law, therefore, where customary money is used, simply declares that the parties to a contract shall not vex each other by arbitrarily departing from the custom. The creditor shall not demand, and the debtor shall not offer, out of spite or malice, anything but the customary money of the nation. Such a legal tender law has no significance whatever. No one thinks of it or speaks of it or takes it into account, unless he be one of those whose idle malice it prevents.

(2) A legal tender law is used where a subsidiary token currency is employed as a part of the system, to prevent debtors from using it in payment, and to prevent the system from bringing about a depreciation of the money. In this case it is part of the device for using a token currency, and is open to no objection. It would check the debtor when he meant to perpetrate a wrong. It would not enable him to do one.

(3) A legal tender law has been used very often, however, to give forced circulation to a depreciated currency of little or no value as a commodity. In that case the legal tender act enables the debtor to discharge his obligations with less commodities than he and the creditor understood and expected when the contract was made. If the creditor appeals to the courts, they are obliged to rule that the debtor has discharged his obligation, when he has not, and they give the creditor no relief. Hence it appears that a legal tender act giving forced circulation to depreciated currency amounts simply to this: it withdraws the protection of the courts from one party to a contract, and leaves him at the mercy of the other party to the extent of the depreciation of the currency. Obviously no other act of legislation more completely reverses the whole proper object of legislation, or more thoroughly subverts civil order. The English passed two or three acts of this