in a general sense, a contract or agreement, whereby one thing is given or exchanged for another.
commerce, is the receiving or paying of money in one country for the like sum in another, by means of bills of exchange.
The security which merchants commonly take from one another when they circulate their bills, is a bill of exchange, or a note of hand: these are looked upon as payment. See Bill, and Mercantile Laws.
The punctuality of acquitting these obligations is essential to commerce; and no sooner is a merchant's accepted bill protested, than he is considered as a bankrupt. For this reason, the laws of most nations have given very extraordinary privileges to bills of exchange. The security of trade is essential to every society; and were the claims of merchants to linger under the formalities of courts of law when liquidated by bills of exchange, faith, confidence, and punctuality, would quickly disappear, and the great engine of commerce would be totally destroyed.
A regular bill of exchange is a mercantile contract, in which four persons are concerned, viz. 1. The drawer, who receives the value; 2. His debtor, in a distant place, upon whom the bill is drawn, and who must accept and pay it; 3. The person who gives value for the bill, to whose order it is to be paid; and, 4. The person to whom it is ordered to be paid, creditor to the third.
By this operation, reciprocal debts, due in two distant parts, are paid by a sort of transfer, or permutation of debtors and creditors.
(A) in London is creditor to (B) in Paris, value 100l. (C) again in London is debtor to (D) in Paris for a like sum. By the operation of the bill of exchange, the London creditor is paid by the London debtor; and the Paris creditor is paid by the Paris debtor; consequently the two debts are paid, and no money is sent from London to Paris nor from Paris to London.
In this example, (A) is the drawer, (B) is the accepter, (C) is the purchaser of the bill, and (D) receives the money. Two persons here receive the money, (A) and (D); and two pay the money, (B) and (C); which is just what must be done when two debtors and two creditors clear accounts.
This is the plain principle of a bill of exchange. From which it appears, that reciprocal and equal debts only can be acquitted by them.
When it therefore happens, that the reciprocal debts of London and Paris (to use the same example) are not equal, there arises a balance on one side. Suppose London to owe Paris a balance, value 100l. How can this be paid? Answer, it may either be done with or without the intervention of a bill.
With a bill, if an exchanger, finding a demand for a bill upon Paris for the value of 100l. when Paris owes Exchange owes no more to London fends 100l. to his correspondent at Paris in coin, at the expense (suppose) of 1l. and then, having become creditor on Paris, he can give a bill for the value of 100l. upon his being repaid his expense, and paid for his risk and trouble.
Or it may be paid without a bill, if the London debtor lends the coin himself to his Paris creditor, without employing an exchanger.
This last example shows of what little use bills are in the payment of balances. As far as the debts are equal, nothing can be more useful than bills of exchange; but the more they are useful in this easy way of business, the less profit there is to any person to make a trade of exchange, when he is not himself concerned either as debtor or creditor.
When merchants have occasion to draw and remit bills for the liquidation of their own debts, active and passive, in distant parts, they meet upon 'Change; where, to pursue the former examples, the creditors upon Paris, when they want money for bills, look out for those who are debtors to it. The debtors to Paris again, when they want bills for money, seek for those who are creditors upon it.
This market is constantly attended by brokers, who relieve the merchant of the trouble of searching for those he wants. To the broker every one communicates his wants, so far as he finds it prudent; and by going about among all the merchants, the broker discovers the side upon which the greater demand lies, for money or for bills.
He who is the demander in any bargain, has constantly the disadvantage in dealing with him of whom he demands. This is nowhere so much the case in exchange, and renders secrecy very essential to individuals among the merchants. If the London merchants want to pay their debts to Paris, when there is a balance against London, it is their interest to conceal their debts, and especially the necessity they may be under to pay them; from the fear that those who are creditors upon Paris would demand too high a price for the exchange over and above par.
On the other hand, those who are creditors upon Paris, when Paris owes a balance to London, are as careful in concealing what is owing to them by Paris, from the fear that those who are debtors to Paris would avail themselves of the competition among the Paris creditors, in order to obtain bills for their money, below the value of them, when at par. A creditor upon Paris, who is greatly pressed for money at London, will willingly abate something of his debt, in order to get one who will give him money for it.
From the operation carried on among merchants upon 'Change, we may discover the consequence of their separate and jarring interests. They are constantly interested in the state of the balance. Those who are creditors on Paris, fear the balance due to London; those who are debtors to Paris, dread a balance due to Paris. The interest of the first is to dilute what they fear; that of the last, to exaggerate what they wish. The brokers are those who determine the course of the day; and the most intelligent merchants are those who dispatch their business before the fact is known.
Now, how is trade in general interested in the question, Who shall outwit, and who shall be outwitted, in this complicated operation of exchange among merchants?
The interest of trade and of the nation is principally concerned in the proper method of paying and receiving the balances. It is also concerned in preserving a just equality of profit and loss among all the merchants, relative to the real state of the balance. Unequal competition among men engaged in the same pursuit, constantly draws along with it bad consequences to the general undertaking; and secrecy in trade will be found, upon examination, to be much more useful to merchants in their private capacity, than to the trade they are carrying on.
Merchants endeavour to simplify their business as much as possible; and commit to brokers many operations which require no peculiar talents to execute. This of exchange is of such a nature, that it is hardly possible for a merchant to carry on the business of his bills, without their assistance, upon many occasions. When merchants come upon 'Change, they are so full of fear and jealousies, that they will not open themselves to one another, lest they should discover what they want to conceal. The broker is a confidential man, in some degree, between parties, and brings them together.
Besides the merchants who circulate among themselves their reciprocal debts and credits arising from their importation and exportation of goods, there is another set of merchants who deal in exchange; which is the importation and exportation of money and bills.
Were there never any balance on the trade of nations, exchangers and brokers would find little employment: reciprocal and equal debts would easily be transferred openly between the parties themselves. No man feigns and dilutes, except when he thinks he has an interest in doing so.
But when balances come to be paid, exchange becomes intricate; and merchants are so much employed in particular branches of business, that they are obliged to leave the liquidation of their debts to a particular set of men, who make it turn out to the best advantage to themselves.
Whenever a balance is to be paid, that payment costs, as we have seen, an additional expense to those of the place who owe it, over and above the value of the debt.
If, therefore, this expense be a loss to the trading man, he must either be repaid this loss by those whom he serves, that is, by the nation; or the trade he carries on will become less profitable.
Every one will agree, that the expense of high exchange upon paying a balance is a loss to a people, no way to be compensated by the advantages they reap from enriching the few individuals among them who gain by contriving methods to pay it off; and if an argument is necessary to prove this proposition, it may be drawn from this principle, viz. whatever renders the profit upon trade precarious or uncertain, is a loss to trade in general; this loss is the consequence of high exchange; and although a profit does result from it upon one branch of trade, the exchange business, yet that cannot compensate the loss upon every other. Exchange. We may, therefore, here repeat what we have said above, that the more difficulty is found in paying a balance, the greater is the loss to a nation.
The Course of Exchange.
The course of exchange is the current price betwixt two places, which is always fluctuating and unsettled, being sometimes above and sometimes below par, according to the circumstances of trade.
When the course of exchange rises above par, the country where it rises may conclude for certain, that the balance of trade runs against them. The truth of this will appear, if we suppose Britain to import from any foreign place goods to the value of 100,000l. at Exchange par, and export only to the value of 80,000l. In this case, bills on the said foreign place will be scarce in Britain, and consequently will rise in value; and after the 80,000l. is paid, bills must be procured from other places at a high rate to pay the remainder, so that perhaps 120,000l. may be paid for bills to discharge a debt of 100,000l.
Though the course of exchange be in a perpetual flux, and rises or falls according to the circumstances of trade; yet the exchanges of London, Holland, Hamburg, and Venice, in a great measure regulate those of all other places in Europe.
I. Exchange with Holland.
MONEY TABLE.
| Par in Sterling | s. d. | |----------------|------| | 1 groat or penny | 0 0.54 | | 1 florin | 0 1.09 | | 1 schilling | 0 6.56 | | 1 pound Flemish | 10 11.18 | | 1 guilder or florin | 1 9.86 | | 1 pound Flemish | 10 11.18 | | 1 rixdollar | 4 6.66 |
In Holland there are two sorts of money, bank and current. The bank is reckoned good security; demands on the bank are readily answered; and hence bank money is generally rated from 3 to 6 per cent. better than the current. The difference between the bank and current money is called the agio.
Bills on Holland are always drawn in bank money; and if accounts be sent over from Holland to Britain in current money, the British merchant pays these accounts by bills, and in this case has the benefit of the agio.
PROB. I. To reduce bank money to current money.
RULE. As 100 to 100 + agio, so the given guilders to the answer.
Example. What will 2210 guilders in bank money amount to in Holland currency, the agio being 3½ per cent.?
Guild.
As 100 : 103½ :: 2210
8 8 8 25
800 825 11050
4420
17680
Guild. fl. pen.
8|00|18232|50(2279 1 4 cur.
16...20
2210|30(16
63 2
5616
72 32
72 32
Or, by practice.
50)2210
44.2 = 2 per cent.
22.1 = 1 per cent.
2.7625 = ¼ per cent.
2279.625
If the agio only be required, make the agio the middle term, thus:
Guil. fl. pen.
As 100 : 3½ :: 2210 : 69 1 4 agio. Or work by practice as above.
PROB. II. To reduce current money to bank money.
RULE. As 100 + agio to 100, so the given guilders to the answer.
Example. What will 2279 guilders 1 florin 4 pennings, Holland currency, amount to in bank money, the agio being 3½ per cent.?
Guild. Guild. Guild. fl. pen.
As 103½ : 100 :: 2279. 1 4
8 8 20
b—
825 800 45581
20 16
16500 273490
16 45581
990 729300
165 800
8|264|000 8|58344|000
3|33 3|72930 Guild.
11|24310(2210 bank. Exchange. An Amsterdam, Rotterdam, Middleburgh, &c. books and accounts are kept by some in guilders, shillings, and pennings, and by others in pounds, shillings, and pence Flemish.
Britain gives 1l. sterling for an uncertain number of shillings and pence Flemish. The par 1l. sterling for 36.59s. Flemish; that is, 1l. 16s. 7.08d. Flemish.
When the Flemish rate rises above par, Britain gains and Holland loses by the exchange, and vice versa.
Sterling money is changed into Flemish, by saying,
As 1l. sterling to the given rate, So is the given sterling to the Flemish sought.
Or, the Flemish money may be cast up by practice.
Dutch money, whether pounds, shillings, pence Flemish, or guilders, shillings, pennings, may be changed into sterling, by saying,
As the given rate to 1l. sterling. So the given Dutch to the sterling sought.
Example I. A merchant in Britain draws on Amsterdam for 782l. sterling: How many pounds Flemish, and how many guilders, will that amount to, exchange at 34s. 8d. per pound sterling?
Decimally.
| L. s. d. | L. s. d. | |----------|----------| | If 1 : 34 8 :: 782 | If 1 : 34.8 :: 782 | | 12 | 782 | | 416 | 693 | | 782 | 277.33 | | 832 | 242.666 | | 3328 | 271.093 | | 2912 | |
L. 1355 9 4 Flem.
By practice.
| L. s. d. | L. s. d. | |----------|----------| | 782 | 782 | | 10s. = 1 | 14s. = 1 | | 4s. = 3 | 8d. = 3 | | 8d. = 26 | 1 4 |
Multiply the Flemish pounds and shillings by 6, and the product will be guilders and shillings; and if there be any pence, multiply them by 8 for pennings: or, divide the Flemish pence by 40, and the quotient will be guilders, and the half of the remainder, if there be any, will be shillings, and one penny odd will be half a shilling, or 8 pennings, as follows:
| L. s. d. | Flem. pence. | |----------|-------------| | 1355 9 4 | 4(0)325312(32 rem.) | | Guild. 8131 16/16. | Guild. 8132 16/16. |
2. Change 591l. 5s. Flemish into sterling money, exchange at 37s. 6d. Flemish per 1l. Sterling.
Holland exchanges with other nations as follows, viz. with.
| Flem. d. | |----------| | Hamburgh, on the dollar, = 66½ | | France, on the crown, = 54 | | Spain, on the ducat, = 109½ | | Portugal, on the cruzado, = 50 | | Venice, on the ducat, = 93 | | Genoa, on the pezzo, = 100 | | Leghorn, on the piastra, = 100 | | Florence, on the crown, = 120 | | Naples, on the ducat, = 74½ | | Rome, on the crown, = 136 | | Milan, on the ducat, = 102 | | Bologna, on the dollar, = 94½ |
Exchange between Britain and Antwerp, as also the Austrian Netherlands, is negotiated the same way as with Holland; only the par is somewhat different, as will be described in article 2d, following.
II. Exchange with Hamburgh.
Money Table.
| Par in Sterling. | s. d. | |------------------|-------| | 1 schilling-lub = 0 1½ | | 1 mark = 1 6 | | 1 dollar = 3 0 | | 1 rixdollar = 4 6 | | 1 ducat = 9 4½ |
Books Exchange. Books and accounts are kept at the bank, and by most people in the city, in marks, schilling-lubs, and pheenings; but some keep them in pounds, schillings, and groots Flemish.
The agio at Hamburgh runs between 20 and 40 per cent. All bills are paid in bank money.
Hamburgh exchanges with Britain by giving an uncertain number of schillings and groots Flemish for the pound sterling. The groot or penny Flemish here, as also at Antwerp, is worth $\frac{5}{6}$ of a penny sterling; and so something better than in Holland, where it is only $\frac{7}{10}$ d. sterling.
Flemish.
| 6 Pheenings | 1 groot or penny | |-------------|-----------------| | 6 Schilling-lubs | 1 Schilling | | 1 Schilling-lub makes | 2 pence or groots | | 1 Mark | 32 pence or groots | | 7½ Marks | 1 pound |
The par with Hamburgh, and also with Antwerp, is 35s. 6½d. Flemish for 1l. sterling.
Examples. 1. How many marks must be received at Hamburgh for 300l. sterling, exchange at 35s. 3d. Flemish per l. sterling?
\[ \text{If } \frac{1}{35} : \frac{3}{300} = \frac{1}{12} \]
\[ \begin{align*} \text{M. sch.} & \\ 32)126900(3965 & 10 \\ 309 & \\ 288 & \\ 210 & \\ 192 & \\ 180 & \\ 160 & \\ (20) & \\ 16 & \\ 320 & \\ 32 & \\ (o) & \\ \end{align*} \]
Decimally,
\[ \text{Flem. s. Marks. Flem. s.} \]
\[ \begin{align*} \text{If } 20 : 7.5 & :: 35.25 \\ 4 : 1.5 & :: 35.25 \\ & 1.5 \\ & 17625 \\ & 3525 \\ & 4)52.875 \\ \end{align*} \]
Marks in 1l. sterling
\[ 13.21875 \]
Marks in 300l. sterling
\[ 3965.62500 \]
Schilling-lubs 10,000
2. How much sterling money will a bill of 3965 Exchange marks 10 schilling-lubs amount to, exchange at 35s. 3d. Flemish per pound sterling?
\[ \text{Fl.s. d. L.St. Mkr. sch.} \]
\[ \begin{align*} \text{If } 35 & : 1 :: 3965 & 10 \\ 12 & :: 32 & 2 \\ 423 & :: 7930 & 20d. \\ & 11897 & \\ & 423)126900(300l. ster. \\ & 1269 & \\ \end{align*} \]
Decimally,
\[ \begin{align*} 4 : 1.5 & :: 35.25 \\ & 1.5 \\ & 17625 \\ & 2225 \\ & 4)52.875(13.21875 \\ & 13.21875)3965.62500(300l. ster. \\ & 3965625 \\ \end{align*} \]
III. Exchange with France.
Money Table.
| Par in Ster. | s. d. | |--------------|------| | 12 Deniers | 1 fol = 0 ½ | | 20 Sols | 1 livre = 0 9½ | | 3 Livres | 1 crown = 2 5½ |
At Paris, Rouen, Lyons, &c. books and accounts are kept in livres, fols, and deniers; and the exchange with Britain is on the crown, or ecu, of 3 livres, or 6 fols Tournois. Britain gives for the crown an uncertain number of pence, commonly between 30 and 34; the par, as mentioned above, being 29½d.
Example 1. What sterling money must be paid in London to receive in Paris 1978 crowns 25 fols, exchange at 31½d. per crown?
\[ \text{Sols. d. Cr. fols.} \]
\[ \begin{align*} \text{If } 60 : 31\frac{1}{2} & :: 1978 & 25 \\ & 60 \\ & 253 \\ & 118705 \\ & 253 \\ & 356115 \\ & 593125 \\ & 237410 \\ & 6|0)3003236|5 Rem. \\ & 8)500539 & 3 \\ & 12)62567 & 11 \\ & 2|0)521|3 & 13 \\ \end{align*} \]
L. 260 13 11½ Ans.
By Exchange.
By Practice.
Cr. Solts.
1978 25, at 31½d.
| d. | Cr. | Solts. | |----|-----|--------| | 30 | 247 | 5 0 | | 12 | 7 | 3 | | 1 | 0 | 7½ |
Sols. 20 = 1
| d. | Cr. | Solts. | |----|-----|--------| | 5 | 0 | 0 2½ |
260 13 11½
If you work decimally, say,
Cr. d. Ster. Cr. d. Ster. As 1 : 31.625 :: 1978.416 : 62567.427083
2. How many French livres will L.121 : 18 : 6 sterling amount to, exchange at 32½d. per crown?
| d. Liv. | L. s. d. | |---------|----------| | If 32½ : 3 :: 121 18 6 | | 8 | 25 | | 865 | | | 24 | 2438 | | 12 | | | 29262 | | | 24 | | | 117048 | | | 58524 | |
Liv. sols. den.
263702288(2670 5 11 Ans. Rem. (78=5 fols 11 deniers.
IV. Exchange with Portugal.
Money Table.
Par in Ster. s. d. f.
1 rec = 0 0 0.27 400 rees make 1 crusade = 2 3 1000 rees make 1 millree = 5 7½
In Lisbon, Oporto, &c. books and accounts are generally kept in rees and millrees; and the millrees are distinguished from the rees by a mark fet between them thus, 485 ¥ 372; that is, 485 millrees and 372 rees.
Britain, as well as other nations, exchanges with Portugal on the millree; the par, as in the table, being 67½d. sterling. The course with Britain runs from 63d. to 68d. sterling per millree.
Example 1. How much sterling money will pay a bill of 827 ¥ 160 rees, exchange at 63½d. sterling per millree?
Rees. d. Rees.
If 1000 : 63½ :: 827.160 8 507 3000 507 579012 413580
Rem.
8000419370.120 2 12)52421 = 5d. 20)4368 = 8s. £ 218 8 5½ Ans.
The rees being thousandth-parts of the millrees, are annexed to the integer, and the operation proceeds exactly as in decimals.
2. How many rees of Portugal will 500l. sterling amount to, exchange at 5s. 4½d. per millree?
| d. Rees. | L. | |----------|----| | If 64½ : 1000 :: 500 | | 8 | 20 | | 517 | 10000 | | 8000 | 12 | | 120000 | 8000 |
Rees.
517)96000000(1856.866 Ans.
V. Exchange with Spain.
Money Table.
Par in Ster. s. d.
35 mervadies make 1 rial = 0 5½ 8 rials make 1 piaftra = 3 7 375 mervadies make 1 ducat = 4 11½
In Madrid, Bilboa, Cadiz, Malaga, Seville, and most of the principal places, books and accounts are kept in piaftras, called also dollars, rials, and mervadies; and they exchange with Britain generally on the piaftra, and sometimes on the ducat. The course runs from 35d. to 45d. sterling for a piaftra or dollar of 8 rials.
Example 1. London imports from Cadiz goods to the value of 2163 piaftras and 4 rials: How much sterling will this amount to, exchange at 38½d. sterling per piaftra?
Piaf. Rials.
| d. | Piaf. | Rials. | |----|-------|--------| | 24 | 216 | 6 | | 12 | 108 | 3 | | 2 | 18 | 0 6 | | 2½ | 2 | 5 0½ | | 1 | 1 | 2 6½ |
345 17 1½ 1 7½
L. 345 18 8½ Ans.
2. London remits to Cadiz 345l. 18s. 8½. How much Spanish money will this amount to, exchange at 38½d. sterling per piaftra? Exchange.
If \( \frac{38}{5} : 1 :: 345 : 18 \)
\[ \begin{array}{c|c} \text{If } & \text{Piaf. L. s. d.} \\ \hline 307 & 614 \\ 2 & 6918 \\ & 12 \\ 614 & 1003 \\ & 83024 \\ & 16 \\ & 3808 \\ 498149 & 3684 \\ & 83024 \\ & 2149 \\ & 1842 \\ \end{array} \]
Carried up 1328389
\[ \begin{array}{c|c} \text{Piaf. Rials.} & 614 \\ \text{Ans.} & 2163 \\ \end{array} \]
VI. Exchange with Venice.
Money Table.
\[ \begin{array}{c|c} \text{5 Soldi} & \text{make 1 gros} \\ \text{24 Gros} & \text{make 1 ducat = 50½ d. sterling.} \end{array} \]
The money of Venice is of three sorts, viz. two of bank money, and the piccoli money. One of the banks deals in banco money, and the other in banco current. The bank money is 20 per cent. better than the banco current, and the banco current 20 per cent. better than the piccoli money. Exchanges are always negotiated by the ducat banco, the par being 4s. 2½ d. sterling, as in the table.
Though the ducat be commonly divided into 24 gros, yet bankers and negotiators, for facility of computation, usually divide it as follows, and keep their books and accounts accordingly.
\[ \begin{array}{c|c} \text{12 Deniers d'or} & \text{make 1 fol d'or} \\ \text{20 Sols d'or} & \text{make 1 ducat = 50½ d. sterling.} \end{array} \]
The course of exchange is from 45d. to 55d. sterling per ducat.
Examp. 1. How much sterling money is equal to 1459 ducats 18 foli 1 denier, bank money of Venice, exchange at 52½ sterling per ducat?
\[ \begin{array}{c|c|c} \text{Duc. d.} & \text{Duc. fol. den.} & \text{d. rate.} \\ \text{If } 1 : 52\frac{1}{2} :: 1459 : 18 & 52\frac{1}{2} & \text{Soli.} \\ & & 10 = \frac{1}{5} \\ & & 2918 = \frac{5}{2} \\ & & 7295 = \frac{2}{5} \\ & & 1 = \frac{1}{5} \\ & & \frac{1}{2} = 729\frac{1}{2} \\ & & \frac{1}{4} = 364\frac{1}{2} \\ & & 76962\frac{1}{2} \\ & & 47\frac{1}{2} \\ \end{array} \]
Rem.
12)77010(6d.
2(0)6417(17s.
L. 320 17—6 sterling. Ans.
Bank money is reduced to current money, by allowing for the agio, as was done in exchange with Holland; viz. say, As 100 to 120, or as 10 to 12, or as 5 to 6, so the given bank money to the current sought. And current money is reduced to bank money by reverting the operation. And in like manner may piccoli money be reduced to current or to bank money, and the contrary.
100 ducats banco of Venice.
In Leghorn = 73 pezzos | In Lucca = 77 crowns In Rome = 68\(\frac{1}{2}\) crowns | In Francfort = 139\(\frac{1}{2}\) florins
VII. Exchange with Genoa.
Money Table.
\[ \begin{array}{c|c} \text{12 Denari} & \text{make 1 soldi} \\ \text{20 Soldi} & \text{make 1 pezzo = 4 6 sterling.} \end{array} \]
Books and accounts are generally kept in pezzos, soldi, and denari; but some keep them in livres, soldi, and denari; and 12 such denari make 1 soldi, and 20 soldi make 1 lire.
The pezzo of exchange is equal to 3\(\frac{1}{2}\) liras; and consequently exchange money is 5\(\frac{1}{2}\) times better than the lire money. The course of exchange runs from 47d. to 58d. sterling per pezzo.
Examp. How much sterling money is equivalent to 3390 pezzos 16 soldi of Genoa, exchange at 51\(\frac{1}{2}\) d. sterling per pezzo?
\[ \begin{array}{c|c|c} \text{Soldi. d.} & \text{Pezz. soldi.} \\ \text{If } 20 : 51\frac{1}{2} :: 3390 : 16 & 8 & 20 \\ & 160 & 415 \\ & & 67816 \\ & & 415 \\ & & 339080 \\ & & 67816 \\ & & 271264 \\ \end{array} \] Exchange. If sterling money be given, it may be reduced or changed into pezzos of Genoa, by reverting the former operation.
Exchange money is reduced to lire money, by being multiplied by \( \frac{5}{4} \), as follows:
\[ \begin{array}{ccc} \text{Pez. soldi.} & \text{Decimally.} \\ 339^0 & 16 & 3390.8 \\ 5\frac{1}{2} & & 5.75 \\ \end{array} \]
\[ \begin{array}{ccc} 16954 & 0 & 169540 \\ \frac{1}{4} = 1095 & 8 & 237356 \\ \frac{1}{4} = 847 & 14 & 169540 \\ \end{array} \]
Lires 19497 2 Lires 19497.100
And lire money is reduced to exchange money by dividing it by \( \frac{5}{4} \).
In Milan, 1 crown = 80 In Naples, 1 ducat = 86 In Leghorn, 1 piaftra = 20 In Sicily, 1 crown = 127\(\frac{1}{2}\)
VIII. Exchange with Leghorn.
Money Table.
\[ \begin{array}{ccc} 12 \text{ Denari} & \text{make} & 1 \text{ soldi} \\ 20 \text{ Soldi} & \text{make} & 1 \text{ piaftra} = 4 \text{ 6} \\ \end{array} \]
Books and accounts are kept in piaftras, soldi, and denari. The piaftra here consists of 6 lires, and the lire contains 20 soldi, and the soldi 12 denari; and consequently exchange money is 6 times better than lire money. The course of exchange is from 47d. to 58d. sterling per piaftra.
Example. What is the sterling value of 731 piaftras, at 55\(\frac{1}{2}\) each?
\[ \begin{array}{ccc} 731 \text{ piaftras, at } 55\frac{1}{2} \text{ d.} \\ 4 \text{ or } 48 = 146 \quad 4 \\ 6 = 18 \quad 5 \quad 6 \\ 1\frac{1}{2} = 4 \quad 11 \quad 4\frac{1}{2} \\ \end{array} \]
L. 169 0 10\(\frac{1}{2}\) Ans.
Sterling money is reduced to money of Leghorn, by reversing the former operation; and exchange money is reduced to lire money by multiplying by 6, and lire money to exchange money by dividing by 6.
100 piaftras of Leghorn are
In Naples = 134 ducats | In Geneva = 185\(\frac{3}{4}\) crowns.
Soldi of Leghorn.
In Sicily, 1 crown = 133\(\frac{1}{2}\) In Sardinia, 1 dollar = 95\(\frac{5}{8}\)
The above are the chief places in Europe with which Britain exchanges directly; the exchanges with other places are generally made by bills on Hamburg, Holland, or Venice. We shall here, however, subjoin the par of exchange betwixt Britain and most of the other places in Europe with which she has any commercial intercourse.
Par in Sterling. L. s. d. Exchange.
Rome, 1 crown = 0 6 1\(\frac{1}{2}\) Naples, 1 ducat = 0 3 4\(\frac{1}{2}\) Florence, 1 crown = 0 5 4\(\frac{1}{2}\) Milan, 1 ducat = 0 4 7 Bologna, 1 dollar = 0 4 3 Sicily, 1 crown = 0 5 0 Vienna, 1 rixdollar = 0 4 8 Augburgh, 1 florin = 0 3 1\(\frac{1}{2}\) Frankfort, 1 florin = 0 3 0 Bremen, 1 rixdollar = 0 3 6 Breilau, 1 rixdollar = 0 3 3 Berlin, 1 rixdollar = 0 4 0 Stettin, 1 mark = 0 1 6 Emden, 1 rixdollar = 0 3 6 Bolzena, 1 rixdollar = 0 3 8 Dantzig, 13\(\frac{1}{2}\) florins = 1 0 0 Stockholm, 34\(\frac{1}{2}\) dollars = 1 0 0 Ruffia, 1 ruble = 0 4 5 Turkey, 1 asper = 0 4 6
The following places, viz. Switzerland, Nuremberg, Leipzig, Dresden, Olmbergh, Brunswick, Cologne, Liege, Strasbourg, Cracow, Denmark, Norway, Riga, Revel, Narva, exchange with Britain, when direct exchange is made, upon the rixdollar, the par being 45. 6d. sterling.
IX. Exchange with America and the West Indies.
In North America and the West Indies, accounts, as in Britain, are kept in pounds, shillings, and pence. In North America they have few coins circulating among them, and on that account have been obliged to substitute a paper currency for a medium of their commerce; which having no intrinsic value, is subjected to many disadvantages, and generally suffers a great discount. In the West Indies coins are more frequent, owing to their commercial intercourse with the Spanish settlements.
Exchange betwixt Britain and America, or the West Indies, may be computed as in the following examples:
1. The neat proceeds of a cargo from Britain to Boston amount to 845l. 17s. 6d. currency: How much is that in sterling money, exchange at 80 per cent?
If 180 : 100
\[ \begin{array}{ccc} 18 : 10 & L. s. d. \\ 9 : 5 & : 845 17 6 \\ \end{array} \]
\[ \begin{array}{ccc} 9)4229 & 7 & 6 \\ \end{array} \]
L. 469 18 7\(\frac{1}{2}\) Ster. Ans.
2. Boston remits to Britain a bill of 469l. 18s. 7\(\frac{1}{2}\)d. sterling: How much currency was paid for the bill at Boston, exchange at 80 per cent?
If 100 : 180
\[ \begin{array}{ccc} 5 : 9 & : 469 18 7\frac{1}{2} \\ \end{array} \]
\[ \begin{array}{ccc} 5)4229 & 7 & 6 \\ 845 17 & 6 currency. Ans. \end{array} \]
3. How much sterling money will 1780l. Jamaica currency amount to, exchange to 40 per cent? Exchange
If $140 : 100$
$14 : 10$
$L.$
$7 : 5 : 1780$
$\frac{5}{7} = \frac{8900}{1271}$
$8\frac{6}{13}$ Ster. Ans.
Bills of exchange from America, the rate being high, is an expensive way of remitting money to Britain; and therefore merchants in Britain generally choose to have the debts due to them remitted home in sugar, rum, or other produce.
X. Exchange with Ireland.
At Dublin, and all over Ireland, books and accounts are kept in pounds, shillings, and pence, as in Britain; and they exchange on the 100l. sterling.
The par of one shilling sterling is one shilling and one penny Irish; and so the par of 100l. sterling is 108l. 6s. 8d. Irish. The course of exchange runs from 6 to 15 per cent.
Examp. I. London remits to Dublin 586l. 10s. sterling: How much Irish money will that amount to, exchange at 9\(\frac{1}{2}\) per cent.
$L.$
If $100 : 109\frac{1}{2} : 586.5$
$8 : 877$
$800 : 877$
$41055$
$41055$
$46920$
$800)514360.5$
$642.950625$
Ans. 642l. 19s. Irish.
By practice.
$p.$ cent.
$10 = \frac{586.5}{10} = 58.65$
$2 = \frac{11.75}{2} = 5.865$
$8 = \frac{46.92}{8} = 5.865$
$4 = \frac{2.9325}{4} = 0.733125$
$9\frac{1}{2} = \frac{56.450625}{9\frac{1}{2}} = 6.00000$
$642.950625$
2. How much sterling will 625l. Irish amount to, exchange at 10\(\frac{1}{2}\) per cent?
If $110\frac{1}{2} : 100 : 625$
$8 : 800$
$L.$ s. d.
$883 : 800$
$883)500000(566 5 0\frac{1}{2}$ Ster. Ans.
XI. Exchange betwixt London and other places in Britain.
The several towns in Britain exchange with London for a small premium in favour of London; such as, Exchange, 1, 1\(\frac{1}{2}\), &c. per cent. The premium is more or less, according to the demand for bills.
Examp. Edinburgh draws on London for 860l. exchange at 1\(\frac{1}{2}\) per cent.: How much money must be paid at Edinburgh for the bill?
$L.$
$860$
per cent.
$1 = \frac{812}{100}$
$\frac{1}{2} = \frac{23}{50}$
$\frac{1}{8} = \frac{116}{400}$
$1116$ premium.
$871 16$ paid for the bill.
To avoid paying the premium, it is an usual practice to take the bill payable at London a certain number of days after date: and in this way of doing, 73 days is equivalent to 1 per cent.
XII. Arbitration of Exchanges.
The course of exchange betwixt nation and nation naturally rises or falls according as the circumstances and balance of trade happen to vary. Now, to draw upon and remit to foreign places, in this fluctuating state of exchange, in the way that will turn out most profitable, is the design of arbitration. Which is either simple or compound.
I. Simple Arbitration.
In simple arbitration the rates or prices of exchange from one place to other two are given; whereby is found the correspondent price between the said two places, called the arbitrated price, or par of arbitration; and hence is derived a method of drawing and remitting to the best advantage.
Examp. I. If exchange from London to Amsterdam be 33s. 9d. per pound sterling; and if exchange from London to Paris be 32d. per crown; what must be the rate of exchange from Amsterdam to Paris, in order to be put on a par with the other two?
Ster. Flem. Ster.
$s.$ s. d. d.
If $20 : 33 9 : : 32$
$12 : 12$
$230 : 405$
$32$
$810$
$1215$
$240)12960(54d.$ Flem. per crown. Ans.
2. If exchange from Paris to London be 32d. sterling per crown; and if exchange from Paris to Amsterdam be 54d. Flemish per crown: what must be the rate of exchange between London and Amsterdam, in order to be on a par with the other two? Exchanges:
Ster. Flem. Ster.
If \(32 : 54 :: 240\)
\(240\)
\(216\)
\(108\)
\(12 s.\ d.\)
\(32)12960(405 (33 9 Flem. per l. Ster. Ans.\)
From these operations it appears, that if any sum of money be remitted, at the rates of exchange mentioned, from any one of the three places to the second, and from the second to the third, and again from the third to the first, the sum so remitted will come home entire, without increase or diminution.
From the par of arbitration thus found, and the course of exchange given, is deduced a method of drawing and remitting to advantage, as in the following example.
3. If exchange from London to Paris be 32d. sterling per crown, and to Amsterdam 405d. Flemish per pound sterling; and if, by advice from Holland to France, the course of exchange between Paris and Amsterdam is fallen to 52d. Flemish per crown; what may be gained per cent. by drawing on Paris, and remitting to Amsterdam?
The par of arbitration between Paris and Amsterdam in this case by Ex. 1, is 54d. Flemish per crown. Work as under.
\[ \begin{array}{ccc} d.\ St. & Cr. & L.\ St.\ Cr. \\ \end{array} \]
If \(32 : 1 :: 100 : 750\) debit at Paris.
\[ \begin{array}{ccc} Cr.\ d.\ Fl. & C. & d.\ Fl. \\ \end{array} \]
If \(52 : 750 :: 39000\) credit at Amsterdam.
\[ \begin{array}{ccc} d.\ Fl. & L.\ St. & d.\ Fl. \\ L.\ s.\ d.\ Ster. & & \\ \end{array} \]
If \(405 : 1 :: 39000 : 96 \frac{5}{11}\) to be remitted.
\[ \begin{array}{ccc} 100 & & \\ \end{array} \]
But if the course of exchange between Paris and Amsterdam, instead of falling below, rise about the par of arbitration, suppose to 56d. Flemish per crown; in this case if you propose to gain by the negotiation, you must draw on Amsterdam, and remit to Paris. The computation follows:
\[ \begin{array}{ccc} L.\ St.\ d.\ Fl. & L.\ St. & d.\ Fl. \\ \end{array} \]
If \(1 : 405 :: 100 : 49500\) debit at Amsterdam.
\[ \begin{array}{ccc} d.\ Fl. & Cr. & d.\ Fl. \\ Cr. & & \\ \end{array} \]
If \(56 : 1 :: 40500 : 723 \frac{1}{14}\) credit at Paris.
\[ \begin{array}{ccc} Cr.\ d.\ St. & Cr. & L.\ s.\ d.\ Ster. \\ \end{array} \]
If \(1 : 32 :: 723 \frac{1}{14} : 96 \frac{8}{6}\) to be remitted.
\[ \begin{array}{ccc} 100 & & \\ \end{array} \]
\(3 11 \frac{5}{7}\) gained per cent.
In negotiations of this sort, a sum for remittance is afforded out of the sum you receive for the draught; and your credit at the one foreign place pays your debt at the other.
II. Compound Arbitration.
In compound arbitration the rate or price of exchange between three, four, or more places, is given, in order to find how much a remittance passing through Exchange, them all will amount to at the last place; or to find the arbitrated price, or par of arbitration, between the first place and the last. And this may be done by the following
Rules. I. Distinguish the given rates or prices into antecedents and consequents; place the antecedents in one column, and the consequents in another on the right, fronting one another by way of equation.
II. The first antecedent, and the last consequent to which an antecedent is required, must always be of the same kind.
III. The second antecedent must be of the same kind with the first consequent, and the third antecedent of the same kind with the second consequent, &c.
IV. If to any of the numbers a fraction be annexed, both the antecedent and its consequent must be multiplied into the denominator.
V. To facilitate the operation, terms that happen to be equal or the same in both columns, may be dropped or rejected, and other terms may be abridged.
VI. Multiply the antecedents continually for a divisor, and the consequents continually for a dividend, and the quot will be the answer or antecedent required.
Example. 1. If London remit 100l. sterling to Spain, by way of Holland, at 35s. Flemish per pound sterling; thence to France, at 58d. Flemish per crown; thence to Venice, at 100 crowns per 60 ducats; and thence to Spain, at 360 mervadies per ducat; how many piaftries, of 272 mervadies, will the 100l. sterling amount to in Spain?
Antecedents. Consequents. Abridged.
| Sterling | 35s. or 420d. Fl. | 1 = 210 | | --- | --- | --- | | 58d. Flemish | 1 crown France | 29 = 1 | | 100 crowns France | 60 ducats Venice | 1 = 30 | | 1 ducat Venice | 360 mervadies Spain | 1 = 45 | | 272 mervadies | 1 piaftrie | 17 = 1 |
How many piaftries = 100l. sterling = 10
In order to abridge the terms, divide 58 and 420 by 2, and you have the new antecedent 29, and the new consequent 210; reject two ciphers in 100 and 1000; divide 272 and 360 by 8, and you have 34 and 45; divide 34 and 60 by 2, and you have 17 and 30; and the whole will stand abridged as above.
Then, \(29 \times 17 = 493\) divisor; and \(210 \times 30 \times 45 \times 10 = 2835000\) dividend; and, \(493)2835000(5750\)
piaftries. Ans.
Or, the consequents may be connected with the sign of multiplication, and placed over a line by way of numerator; and the antecedents, connected in the same manner, may be placed under the line, by way of denominator; and then abridged as follows:
\[ \frac{420 \times 60 \times 360 \times 100}{58 \times 100 \times 272} = \frac{210 \times 60 \times 360 \times 10}{29 \times 1 \times 272} = \frac{210 \times 30 \times 45 \times 10}{29 \times 34} = \frac{2835000}{493} \]
And, \(493)2835000(5750\)
piaftries. Ans.
The placing the terms by way of antecedent and consequent. Exchange, frequent, and working as the rules direct, saves so many stating of the rule of three, and greatly shortens the operation. The proportions at large for the above question would be stated as under.
\[ \begin{align*} L. St. & d. Fl. \\ If \quad 1 : 420 :: 1000 : 420000 \\ d. Fl. & Cr. \\ Cr. & d. Fl. \\ Cr. Duc. & Cr. \\ If \quad 8 : 1 :: 420000 : 7241\frac{1}{3} \\ Duc. Mer. & Duc. Mer. \\ If \quad 100 : 60 :: 7241\frac{1}{3} : 4344\frac{4}{9} \\ Mer. Piafl. & Mer. Piafl. \\ If \quad 1 : 360 :: 4344\frac{4}{9} : 1564137\frac{2}{3} \\ If \quad 272 : 1 :: 1564137\frac{2}{3} : 5750\frac{2}{9} \end{align*} \]
If we suppose the course of direct exchange to Spain to be 42½ sterling per piafle, the 1000l. remitted would only amount to 5647½ piafles; and, consequently, 103 piafles are gained by the negotiation; that is, about 2 per cent.
2. A banker in Amsterdam remits to London 400l. Flemish; first to France at 56½ Flemish per crown; from France to Venice, at 100 crowns per 60 ducats; from Venice to Hamburg, at 100d. Flemish per ducat; from Hamburg to Lisbon, at 50d. Flemish per crufade of 400 rees; and, lastly, from Lisbon to London at 6½d. sterling per millree: How much sterling money will the remittance amount to? and how much will be gained or saved, supposing the direct exchange from Holland to London at 36s. 10d. Flemish per pound sterling?
\[ \begin{align*} \text{Antecedents.} & \quad \text{Consequents.} \\ 36d. Flem. & = 1 \text{ crown.} \\ 100 \text{ crowns} & = 60 \text{ ducats.} \\ 1 \text{ ducat} & = 100d. Flem. \\ 50d. Flem. & = 400 \text{ rees.} \\ 1000 \text{ rees} & = 64d. sterling. \\ \end{align*} \]
How many d. ster. \(= 400l.\) or 96000d. Flemish?
This, in the fractional form, will stand as follows.
\[ \frac{60 \times 100 \times 400 \times 64 \times 96000}{65 \times 100 \times 50 \times 1000} = 368640, \]
and
\[ \frac{368640}{52662\frac{1}{2}d. ster.} = 219l. 8s. 6\frac{1}{2}d. ster. \]
Anf:
To find how much the exchange from Amsterdam directly to London, at 36s. 10d. Flemish per l. sterling, will amount to, say,
\[ \begin{array}{cccc} s. & d. & d. Fl. & L. St. \\ 36 & 10 & If & 442 : 1 :: 96000 : 217\frac{3}{4} 10\frac{1}{2} \\ & & & 219\frac{8}{9} 6\frac{1}{2} \\ \end{array} \]
Gained or saved; 2 4 8\(\frac{1}{2}\)
In the above example, the par of arbitration, or the arbitrated price, between London and Amsterdam, viz. the number of Flemish pence given for 1l. sterling, may be found thus:
Make 64½ sterling, the price of the millree, the first antecedent; then all the former consequents will become antecedents, and all the antecedents will become consequents. Place 240, the pence in 1l. sterling, as the last consequent, and then proceed as taught above, viz.
\[ \begin{align*} 64d. ster. & = 1000 \text{ rees.} \\ 400 \text{ rees} & = 50d. Flem. \\ 100d. Flem. & = 1 \text{ ducat.} \\ 60 \text{ ducats} & = 100 \text{ crowns.} \\ 1 \text{ crown} & = 56d. Flem. \\ \end{align*} \]
How many d. Flem. \(= 240\) iter.?
\[ \frac{1000 \times 50 \times 100 \times 56 \times 240}{64 \times 400 \times 100 \times 60} = 875, \]
and
\[ 2(875)(437\frac{1}{2}d.) = 36s. 5\frac{1}{2}d. Flem. per l. ster. Anf: \]
Or the arbitrated price may be found from the answer to the question, by laying
\[ \begin{array}{ccc} d. Ster. & d. Flem. & d. St. \\ If & 36s. 6\frac{1}{2}d. & 96000 :: 240 \\ & & 7 \\ & & 672000 \\ & & 240 \\ & & 2688 \\ & & 1344 \\ & & d. s. d. Flem. \\ 368640 & 161280000 & (437\frac{1}{2}d.) = 36 5\frac{1}{2} \text{ as before.} \end{array} \]
The work may be proved by the arbitrated price thus: As 1l. sterling to 36s. 5\(\frac{1}{2}\)d. Flemish, so 219l. 8s. 6\(\frac{1}{2}\)d. sterling to 400l. Flemish.
The arbitrated price compared with the direct course shows whether the direct or circular remittance will be most advantageous, and how much. Thus the banker at Amsterdam will think it better exchange to receive 1l. sterling for 36s. 5\(\frac{1}{2}\)d. Flemish, than for 36s. 10d. Flemish.
Exchange, signifies also a place in most considerable trading cities, wherein the merchants, negotiants, agents, bankers, brokers, interpreters, and other persons concerned in commerce, meet on certain days, and at certain times thereof, to confer and treat together of matters relating to exchanges, remittances, payments, adventures, assurances, freights, and other mercantile negotiations, both by sea and land.
In Flanders, Holland, and several cities of France, these places are called bourses; at Paris and Lyons, places de change; and in the Hanse towns, colleges of merchants. These assemblies are held with so much exactness, and merchants and negotiants are so indispensably required to attend at them, that a person's absence alone makes him be suspected of a failure or bankruptcy. The most considerable exchanges in Europe, are that of Amsterdam; and that of London, called the Royal Exchange.
Even in the time of the ancient Romans, there were places for the merchants to meet, in most of the considerable cities of the empire. That said by some to have been built at Rome in the year of the city 259, 493 years before our Saviour, under the consulate of Appius Claudius and Publius Servilius, was called collegium mercatorium; whereof it is pretended there are still fome remains, called by the modern Romans loggia, the lodge; and now usually the place of St George. This notion of a Roman exchange is supposed to be founded. Exchanges founded on the authority of Livy, whose words are as follows: viz. Ceramum confusibus incidet, uter dedicat Mercurium adem. Senatus a se rem ad populum reject: utri corum dedicato jussu populi data est, eum praecise an- nuncie, mercatorum collegium instituire jussit. Liv. lib. ii.
But it must be here remarked, that collegium never signified a building for a society in the purer ages of the Latin tongue; so that collegium mercatorium instituire must not be rendered to build an exchange for the merchants, but to incorporate the merchants into a company.
As Mercury was the god of traffic, this aedes Mercurii seems to have been chiefly designed for the devotions of this company or corporation.
Exchange, Bills of. The following information concerning the origin of bills of exchange is extracted from Backmann's History of Inventions.
"I shall not here repeat (says he) what has been collected by many learned men respecting the important history of this noble invention, but only lay before my readers an ordinance of the year 1394, concerning the acceptance of bills of exchange, and also two bills of the year 1424, as they may serve to illustrate farther what has been before said on the subject by others. These documents are, indeed, more modern than those found by Raphael de Turre in the writings of the jurist Baldus, which are dated March the 9th 1328; but they are attended with such circumstances as sufficiently prove that the method of transacting business by bills of exchange was fully established to early as the fourteenth century; and that the present form and terms were even then used. For this important information I am indebted to Mr Von Martens, who found it in a book which, as far as I know, has never been noticed in any literary journal, though it is much more deserving of attention than many others better known. It is a history, written in Spanish, of the maritime trade and other branches of commerce at Barcelona, taken entirely from the archives of that city, and accompanied with documents from the same source, which abound with matter highly interesting (a).
Among these is an ordinance issued by the city of Barcelona in the year 1394, that bills of exchange should be accepted within twenty-four hours after they were presented; and that the acceptance should be written on the back of the bill.
In the year 1404, the magistrates of Bruges, in Flanders, requested the magistrates of Barcelona to inform them what was the common practice, in regard to bills of exchange, when the person who presented a bill raised money on it in an unusual manner, in the case of its not being paid, and by these means increased the expenses so much that the drawer would not consent to sustain the loss. The bill which gave occasion to this question is inserted in the memorial. It is written in the short form till used; which certainly seems to imply great antiquity. It speaks of silence; and it appears that first and second bills were at that time drawn, and that when bills were not accepted, it was customary to protest them.
"As this article is of great importance I shall here transcribe it, from vol. ii. p. 203: "Cum de mensibus Aprilis et Maii ultimo elapsis Antonius Quartii, mercator Lucanus residens in villa Burgensi, a Joanne Colom, mercatore civitatis Barchinonae, etiam residente in praedicta villa Burgensi, duo millia scutorum Philippii, quolibet scuto pro xxii grosis computato, solvendi per Franciscum de Prato mercatorem Florentini, more solito, in Barchinona, mediatis Petro Gilberto et Petro Olivo, et mediatis Petro Scorpi, et supradieto Petro Gilberto, mercatoribus Cardona: prout de dictis cambis apparet quatuor litteris papireis, quarum tenores subsecuntur.
"Supercriptio autem primae litterae fuit talis: Franciso de Prato et comp. à Barcelona. Tenor vero eiudem ad intra fuit talis: Al nome di Dio, Amen. à di xxviii. di Aprile 1404. Pagate per questa prima di camb. à ufanzia à Piero Gilberto, è Piero Olivo scuti mille à fold. x. Barcelonefi per scuto, i quali scuti mille sono per cambio che con Giovanni Colomba à grossi xxii. di g. scuto: et pag. à nostro conto: et Christo vi guardi. Subtus vero erat scrip- tum: Antonio Quartis Sal. de Bruggias."
"Supercriptio vero secundae litterae fuit talis: Francisco de Prato et comp. à Barcelona. Et ab intra fic habebatur: Al nome di Dio, Amen. à di xviii. di Maggio 1404. Pagate per questa prima di camb. à ufanzia à Piero Gilberto et à P. de Scorpo scuti mille de Felippo à fold. x. Barcelonefi per scuto: i quali scuti mille sono per camb. che con Giov. Colomba à grossi xxxii. di g. scuto: et pag. à nostro conto: et Christo vi guardi. Subtus vero erat sic scripsum: Ant. Quadri Sal. de Bruggias."**
Bills of exchange are justly considered as of the greatest importance to the interest of commerce; but several queries have been propounded respecting them, which do not as yet appear to have received a satisfactory solution. It still seems to be a disputed point, whether the law ought to consider them as nothing more than a deposit belonging to the drawer, and successively confirmed to the remitters; or as property capable of being transferred, and entirely vested in the holder at all times, who should be alone responsible for neglecting it, when its value is vitiated.
Professor Buch of Hamburg thought that bills of exchange should always be viewed as the exclusive property of the person holding them, which, in a work published
(a) "Memorias historicas sobre la marina comercio y artes de la antigua ciudad de Barcelona, por D. Antonio de Capmany y de Montpalau. Madrid 1779, 2 vol. 4to. As a proof of what I have said above, I shall mention the following important articles, which may be found in this work. A custom-house tariff, written in Latin, of the year 1221, in which occur a great number of remarkable names and articles of merchandise not explained. Another of the like kind of the year 1252. Letters of power to appoint consuls in distant countries, such as Syria, Egypt, &c. dated in the years 1266, 1268, and 1321. An ordinance of the year 1458, respecting insurance, which required that under-writing should be done in the presence of a notary, and declared policies or scriptures privades to be null and void. A privilegium of the emperor Andronicus II. to the merchants of Barcelona, written in Greek and Spanish, in 1290. Account of the oldest Spanish trade with wool, silk, salt, and saffron; and of the oldest guilds or incorporated societies of tradesmen at Barcelona, &c." Exchequer, published in 1792, is defended by a number of plausible arguments. This theory was applied to the difficult and fluctuating case of the holder of a bill which has several indentures, where the drawer, the drawee, and persons early indorsing it, have all become bankrupts. Should the person holding it under each bankruptcy prove the entire amount of said bill, it is manifest that he must receive much more than he can in justice claim as his due. It seems most equitable that he should be forced to prove his debt against none but his immediate predecessor, the affluence of such predecessor being allowed a similar proof up to the drawer. To such as are frequently in the habit of discounting bills, from their commercial situations in life, this becomes a matter of the utmost consequence; for farther information concerning which, we refer our readers to the ingenious work of Professor Butten already alluded to, and to Additions to the Theoretical and Practical Delineation of Commerce, published in 1798 (B).