worth, or as much money as the physician or laborer reasonably deserves to have. A contract is void, if not made for a legal consideration; that is, if one claims of another performance of a contract, he must show that the engagement was entered into in consideration of his engaging to do, or not to do, something. If one man promises to give another a sum of money, this is no contract; because the party to whom the promise is made, parts with nothing, and does not bind himself in any way. In honor and conscience, such promises are binding, but not according to law.

296. Whether a contract was made, or not, is differently regarded in a moral view from what it is in a legal view. Morally, every man ought to perform a contract, although he who claims the benefit of it has no proof that the contract exists. A man must prove by other evidence than his own declaration, that a contract was made; or must prove, otherwise than by what he says himself, the facts, from which the law infers that a contract was made: he must prove all that is required otherwise than by his own word, because no man is allowed to be a witness or a judge in his own case.

297. The law does not settle what contracts may be made. It only pronounces, that some contracts shall not be made. It says that no contract shall be made for any dishonest, immoral, or fraudulent purpose; and all such are void. As to contracts which the law permits, it carefully settles what evidence shall be competent to prove them.

298. When two or more persons enter into a contract, there is necessarily a communication by words, either spoken or written, whatever the subject of the contract may be. If the bargaining relates to real estate, personal estate, or labor, the parties speak or write themselves, or by the agency of those whom they employ.

299. But there is an important distinction between a contract, and what shall be legal evidence that a contract has been made. If a man promises to pay money for goods, one credible witness, who can prove the promise, is sufficient. If a man promises to pay the debt of another, or if the promise is to do some act after a year has elapsed (and in some other cases), the evidence must be in writing, and signed by the party making the promise. If two persons should contract for the lease of a farm for more than seven years, by words, the contract would be morally binding; but to be a legal contract, for all purposes, it should be in writing, signed,

sealed, acknowledged and recorded. This distinction, as to the mode in which contracts must be proved, is founded in good sense. If, for example, contracts concerning real estate were left entirely to the memory of witnesses, they may be absent or dead when needed to prove them; or, if present, they may have forgotten, or may state erroneously, though honestly, what they believe the facts to have been. But the principal object, which the law has in view, in such case, is, to shut out all temptation to fraud and perjury; and this can best be done by making all such contracts void, when not proved by proper writings.

300. As to all contracts other than those whereof the proof must be by deed, or writings, for the reason above stated, they may be proved by writings, if the contract was reduced to writing, or by competent witnesses, who can prove that the contract was made, or that the party charged therewith, has admitted that it was made.

301. The partial or total failure of justice often arises from the defect of evidence. When a bargain is made, the parties think they perfectly understand each other, or they trust that each one of them will do what is right; or one party may have evidence, which, if uncontradicted, or uncontrolled, may show a case sufficient for his purpose, though it does not show the real case.

302. Many important contracts are made, trusting to memory. The parties exchange no writings, they call no witnesses. When the question arises, what the contract was, or whether there was any, or whether it has been rightly performed, or whether it ought to be performed, the parties may honestly have very different views; each one may find it dif ficult to prove what he thinks to be the true state of the case. From such causes expensive lawsuits arise, more frequently than from any other. But controversies also arise from the difficulty of foreseeing the consequences of one's acts; or from the change of circumstances after the contract is made; or from the absence or loss of evidence; or from the substantial embarrassment of not knowing what justice requires, in doubful and peculiar cases.

303. When interested parties disagree, there are different modes of settling their difficulties. If they cannot agree between themselves, they may resort to the judgment of friends, or of disinterested arbitrators. The last resort is to the courts of justice. The cases are very few, in which a man

is permitted to administer justice to himself against another; nor are there any, where in doing it he necessarily disturbs the public peace.

CHAPTER XXV.

Banking, Promissory Notes, Bills of Exchange, Notaries.

304. BANKS are, and are likely to be, an interesting subject to the citizens of this and of neighboring states. Banks are supposed to derive their name from the kind of seat, or bench, on which the Jews sat as money-dealers in the market-places of cities in the East. When a Jew failed, or was discredited, his bench was broken or destroyed; from whence is supposed to be derived the word bankrupt, now so commonly understood in commercial countries. There are different sorts of banks;-(1.) banks of deposit (from depono, to leave, or intrust a thing to be kept); (2.) banks of deposit and discount; (3.) banks of deposit, discount and circulation.

305. A Bank of Deposit is merely a place for the safe keeping of money. If any one man in a town or city should make such a place, and it should become a place of general deposit, the owner of the deposit might give his creditor an order on the banker to pay the bearer of the order. The order, being worth the money it expressed, might pass from hand to hand as money: thus the necessity of counting and carrying from place to place, and the danger of losing, would be avoided. This is supposed to have been the sort of public bank that first came into use. The oldest bank was at Venice, about the year 1170, and is said to have been established as a place of deposit for those who engaged in the wars for the recovery of the Holy Land.`

306. Bank of Deposit and Discount. This comprises the sort of bank already described; but, in addition thereto, the banker, having the custody of money, discounts, that is, advances money on written promises given to pay money at some time, then future. Thus a holder of a written promise to pay money, which will be due after some days or months to come, wants the money immediately. A banker takes the written promise as his own, and pays the sum mentioned in it, taking out of the whole sum the interest thereon from the time of advancing the money to the time when the money is

to be paid, according to the written promise. This is called discounting. When the money is due, the banker receives it, and gives up the written promise to the maker of it, and is thus repaid.

307. Bank of Deposit, Discount and Circulation. This is the sort of bank in use in this country. It comprises the two first, but adds thereto, that, when a written promise to pay money, or, as usually called, a note of hand, or promissory note, is discounted, the bank does not pay in gold or silver coin, but in its own bills; that is, in its own promises to pay money on demand. In Massachusetts, the way in which banks are enabled so to do, is this:

308. An act of the legislature, passed in 1799, prohibited all banks, not established by law, under severe penalties. No bank can now exist but by public law. When a number of persons want a bank, they petition to be incorporated. If the legislature see fit, they make a law, enabling the petitioners to have a bank, usually for a certain number of years. The capital, or sum of money to be paid in, to constitute the fund on which the bank is to do business, is mentioned in the act; also the number of shares into which this capital is divided. The petitioners and their associates, or owners of shares, are enabled by the act to be a corporation, by the name of the "President, Directors and Company of the Bank." The owners of shares, or stockholders, are empowered to meet, and choose directors. The directors choose a president from their own number. The president and directors choose a cashier and clerks, and get a banking-house. The act authorizes this corporation to issue its own promissory writings, or bank bills, signed by the president and cashier. Supposing every stockholder, or owner of shares, to have paid in his proportion of the capital, the bank would have in its vaults, in gold and silver, the whole amount of its capital, deducting the charges of establishing the bank, of which charges the cost of the banking-house would be part, if the bank owned the house in which the business is transacted. The bank being thus prepared to do business, notes are discounted; or, in other words, the bank loans money, and pays, not in gold and silver coin, but in its own bank bills, which are written promises to pay the bearer thereof, on demand, the sum therein expressed. This promise of the bank circulates as cash, because the bearer of it can turn it into cash whenever he pleases, by carrying it to the bank. A bank may derive from its operations of lending, or discounting, a profit

above or below six per cent. (the lawful rate of interest) on its capital. The law allows a bank to issue, in bills, double the amount of its capital, and to discount notes to double the amount of its capital. If there were but one bank, and it used its privileges to its full extent, it would get twelve per cent. on its capital, froin which are to be deducted the ex penses of carrying on the institution. But in practice, owing to the great number of banks, and consequent division of business, and the speedy return of their bills for cash, and the check which banks have on each other, a bank rarely has in circulation one half, and some of them not one fourth, of the amount of its capital in bills, and rarely has owing to it much more than the amount of its capital, and one third of the capital in addition thereto. That which is owed to banks is intended to be always, and usually is, owed by trustworthy persons.

309. When a bank issues more bills than it can redeem,— which sometimes arises from having taken notes which prove to be bad, and sometimes in consequence of mismanagement, it is said to fail, or be broken. The holders of notes are the losers of so much as the bank cannot pay, unless the stockholders are able to pay the difference. The law makes them personally liable, not exceeding the amount of their respective shares, when the loss arises from the official mismanagement of the directors. When the act of incorporation expires, the holders of shares are liable, personally, for the redemption of all bills issued by the bank, which then remain unpaid, in proportion to the stock which they respectively hold

310. Banks are subject to an annual tax of one per cent. on the amount of their capitals, one half of which tax is to be paid, within ten days after each semi-annual dividend, into the state treasury. It is said by some persons, that such a tax is not a reasonable one, and that, if any tax be laid on banks, it should be on the amount of dividends, and not on capital. Dividends are the half-yearly division of the interest money, among owners of shares, acquired by lending. Shares are bought and sold. The owner holds a certificate, issued by the corporation, signed by the president and cashier, stating that he is proprietor.

311. Banks take money to keep for any one who requests it, without charge for keeping. This is called icpositing. One who has money in a bank, draws it out as he pleases, by writing a short order to the cashier to “pay - - dollars to