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 business, 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, sends 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 sends 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 as 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 dissemble 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 despatch 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, Exchange 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 transacted openly between the parties themselves. No man feigns and dissembles, except when he thinks he has an interest in so doing.
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. 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 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 stiver | 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 rix dollar | 4 6.66 |
Or, by practice.
\[ \begin{align*} 50) & 2210 \\ & 44.2 = 2 \text{ per cent.} \\ & 22.1 = 1 \text{ per cent.} \\ & 2.7625 = \frac{1}{4} \text{ per cent.} \end{align*} \]
2279.0625
If the agio only be required, make the agio the middle term, thus:
\[ \text{Guild. st. pen.} \]
As 100 : 3\(\frac{1}{2}\) :: 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 in bank money amount to in Holland currency, the agio being \(3\frac{1}{2}\) per cent?
\[ \begin{array}{c} \text{Guild. Guild. Guild. st. pen.} \\ \text{As } 103\frac{1}{2} : 100 :: 2279 : 1 4 \\ 8 8 20 \\ 825 800 45581 \\ 20 16 \\ 16500 273490 \\ 16 45581 \\ 990 729300 \\ 165 800 \\ 8)264000 8)583440000 \\ 3)33 3)72930 Guild. \\ 11)24310(2210 bank. \end{array} \] Exchange. At Amsterdam, Rotterdam, Middleburgh, &c. books and accounts are kept by some in guilders, stivers, 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, stivers, 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?
| L. s. d. | L. s. d. | |---------|---------| | If 1 : 34 8 :: 782 | If 1 : 34.8 :: 782 | | 12 | 782 | | 416 | 693 | | 782 | 27733 | | 822 | 242966 | | 3328 | 27109.3 | | 2912 | 13559.4 Flem. |
By practice.
| L. s. d. | Or thus: | |---------|---------| | 782 | 782 | | 391 | 547 8 | | 156 8 | 26 1 4 | | 8d. | 1355 9 4 Fl. |
Multiply the Flemish pounds and shillings by 6, and the product will be guilders and stivers; and if there be any pence, multiply them by 8 for pennings: or, divide the Flemish pence by 45, and the quot will be guilders, and the half of the remainder, if there be any, will be stivers, and one penny odd will be half a stiver, or 8 pennings, as follows:
| L. s. d. | Flem. pence. | |---------|-------------| | 1355 9 4 | 40323312(32 rem. | | Guild. 8131 16 stiv. | Guild. 8132 16 stiv. |
3. Change 591l. 5s. Flemish into sterling money, exchange at 37s. 6d. Flemish per l. 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 crusade, = 50 | | Venice, on the ducat, = 93 | | Genoa, on the pezzo, = 100 | | Leghorn, on the piastre, = 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 45 |
Books Books and accounts are kept at the bank, and by most people in the city, in marks, schilling-lubs, and phennings; 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 $\frac{4}{5}$ of a penny sterling; and is something better than in Holland, where it is only $\frac{1}{5}$d. sterling.
| Flemish. | |----------| | 6 Phennings | 1 groot or penny | | 6 Schilling-lubs | 1 schilling | | 1 Schilling-lub | 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 £1. sterling.
**Examples.**
1. How many marks must be received at Hamburgh for 300l. sterling, exchange at 35s. 3d. Flemish per l. sterling?
\[ \text{If } 1 : 35 \frac{3}{4} :: 300 \]
\[ \begin{array}{c} \text{L. s. d. L.} \\ \text{If } 1 : 35 \frac{3}{4} :: 300 \\ \hline \text{12} \\ \text{423} \\ \text{300} \\ \end{array} \]
\[ \text{M. sch.} \]
\[ \begin{array}{c} \text{32} \times 126900 = 3965 \text{ 10} \\ \text{96} \\ \text{309} \\ \text{288} \\ \text{210} \\ \text{192} \\ \text{180} \\ \text{160} \\ \text{(20)} \\ \text{16} \\ \text{32} \\ \text{(9)} \\ \end{array} \]
Decimally.
\[ \text{Flem. s. Marks Flem. s.} \]
\[ \text{If } 20 : 7 \cdot 5 :: 35 \cdot 25 \]
\[ \begin{array}{c} \text{4 : 1.5 :: 35.25} \\ \text{1.5} \\ \text{17625} \\ \text{3525} \\ \text{4)52.875} \\ \end{array} \]
Marks in 1l. sterling
\[ \begin{array}{c} \text{13.21875} \\ \text{300} \\ \end{array} \]
Marks in 300l. sterling
\[ \begin{array}{c} \text{3965.62500} \\ \text{16} \\ \text{3750} \\ \text{625} \\ \end{array} \]
Schilling-lubs
\[ \begin{array}{c} \text{10.000} \\ \end{array} \]
2. How much sterling money will a bill of 3965 Flemish marks 10 schilling-lubs amount to, exchange at 35s. 3d. Flemish per pound sterling?
\[ \begin{array}{c} \text{Fl. s. d. L.St. Mks. sch.} \\ \text{If } 35 \frac{3}{4} :: 3965 \text{ 10} \\ \hline \text{12} \\ \text{32} \\ \text{2} \\ \text{423} \\ \text{7930} \\ \text{20d.} \\ \text{11897} \\ \text{423(126900)(300l. ster.)} \\ \text{1269} \\ \end{array} \]
Decimally.
\[ \begin{array}{c} \text{4 : 1.5 :: 35.25} \\ \text{1.5} \\ \text{17625} \\ \text{2225} \\ \text{4)52.875(13.21875} \\ \text{13.21875)3965.62500(300l. ster.)} \\ \text{3965.625} \\ \end{array} \]
**III. Exchange with France.**
**Money Table.**
| Par in Ster. | s. d. | |--------------|------| | 12 Deniers | 1 sol' | | 20 Sols | 1 livre | | 3 Livres | 1 crown |
At Paris, Rouen, Lyons, &c., books and accounts are kept in livres, sols, and deniers; and the exchange with Britain is on the crown, or ecu, of 3 livres, or 60 sols Tournois. Britain gives for the crown an uncertain number of pence, commonly between 30 and 34; the par, as mentioned above, being 29½d.
**Example I.** What sterling money must be paid in London to receive in Paris 1978 crowns 25 sols, exchange at 31½d. per crown?
\[ \text{Sols. d. Cr. sols.} \]
\[ \text{If } 60 : 31 \frac{1}{2} :: 1978 \text{ 25} \]
\[ \begin{array}{c} \text{60} \\ \text{253} \\ \text{118705} \\ \text{253} \\ \text{356115} \\ \text{593525} \\ \text{237410} \\ \end{array} \]
\[ \text{6(0)3003236|5 Rem.} \]
\[ \begin{array}{c} \text{8)500539} \\ \text{12)62567} \\ \text{2(0)521|3} \\ \end{array} \]
\[ \text{L.260 13 11\(\frac{1}{4}\) Ann.} \] 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 \(121 : 18 : 6\) sterling amount to, exchange at \(32\frac{1}{2}\)d. per crown?
| d. Liv. L. s. d. | |------------------| | If \(32\frac{1}{2} : 3 :: 121 : 18 : 6\) | | 8 20 | | 865 | | 24 2438 | | 12 | | 29262 | | 24 | | 117048 | | 58524 |
Liv. sols. den.
\(263702288(2670 5 11)\) Ans.
Rem. (78 = 5 sols 11 deniers.
IV. Exchange with Portugal.
MONEY TABLE.
| Par in Ster. s. d. f. | |-----------------------| | 1 ree = 0 0 0.27 | | 400 rees make 1 crusade = 2 3 | | 1000 rees make 1 millree = 5 7\(\frac{1}{2}\) |
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 set between them thus, \(485 \times 372\); 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 \(67\frac{1}{2}\)d. 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 \(63\frac{1}{2}\)d. sterling per millree?
| Rees. d. Rees. | |----------------| | If 1000 : 63\(\frac{1}{2}\) :: 827.160 | | 8 507 | | 8000 507 579012 | | 413580 |
Rem.
\(8000)419370.120\)
\(12)52421\) — 5d.
\(20)4368\) — 8s.
L. 218 8 5\(\frac{1}{2}\) 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 \(58.4\frac{1}{2}\)d. per millree?
| d. Rees. L. | |-------------| | If \(64\frac{1}{2} : 1000 :: 500\) | | 8 20 | | 517 8000 10000 | | 12 | | 120000 | | 8000 |
Rees.
\(517,960,000,000)\) \(1856.866\) Ans.
V. Exchange with Spain.
MONEY TABLE.
| Par in Ster. s. d. | |-------------------| | 35 mervadies make 1 rial = 0 5\(\frac{1}{2}\) | | 8 rials make 1 piastre = 3 7 | | 375 mervadies make 1 ducat = 4 11\(\frac{1}{2}\) |
In Madrid, Bilboa, Cadiz, Malaga, Seville, and most of the principal places, books and accounts are kept in piastres, called also dollars, rials, and mervadies; and they exchange with Britain generally on the piastre, and sometimes on the ducat. The course runs from 33d. to 45d. sterling for a piastre or dollar of 8 rials.
EXAMP. 1. London imports from Cadiz goods to the value of 2163 piastres and 4 rials: How much sterling will this amount to, exchange at \(38\frac{1}{2}\) sterling per piastre?
| Piast. Rials. | |---------------| | 2163 4 at \(38\frac{1}{2}\)d. | | 24 = 108 6 | | 12 = 18 0 6 | | 2 = 2 5 0\(\frac{1}{2}\) | | 1 = 1 2 6\(\frac{1}{2}\) |
| Rials. d. | |-----------| | 38\(\frac{1}{2}\) each. | | 4 = 19\(\frac{1}{2}\) |
L. 345 18 8\(\frac{1}{2}\) Ans.
2. London remits to Cadiz 345l. 18s. 8\(\frac{1}{2}\)d. How much Spanish money will this amount to, exchange at \(38\frac{1}{2}\)d. sterling per piastre? VI. Exchange with Venice.
Money Table.
\[ \begin{align*} 5 \text{ Soldi} & \quad \text{make} \quad 1 \text{ gros} \\ 24 \text{ Gros} & \quad \text{make} \quad 1 \text{ ducat}=50\frac{1}{2}\text{d. sterling}. \end{align*} \]
The money of Venice is of three sorts, viz. two of bank money and the picoli 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 picoli money. Exchanges are always negotiated by the ducat banco, the par being 4s. 2½d. 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:
\[ \begin{align*} 12 \text{ Deniers d'or} & \quad \text{make} \quad 1 \text{ sol d'or} \\ 20 \text{ Solis d'or} & \quad \text{make} \quad 1 \text{ ducat}=50\frac{1}{2}\text{d. sterling}. \end{align*} \]
The course of exchange is from 45d. to 55d. sterling per ducat.
**Examp.** How much sterling money is equal to 1459 ducats 18 sols 1 denier, bank money of Venice, exchange at 52½ sterling per ducat?
\[ \begin{align*} \text{Duc. d.} & \quad \text{Duc. sol. den.} & \quad \text{d.} \\ \text{If } 1 : 52\frac{1}{2} & \quad \text{:: } 1459 : 18 : 1 & \quad 52\frac{1}{2} \text{ rate.} \\ & \quad \text{Sols.} & \quad \text{d.} \\ & \quad 10 & \quad \frac{1}{2} & \quad 26\frac{1}{2} \\ & \quad 2918 & \quad 5 & \quad \frac{1}{2} & \quad 13\frac{1}{2} \\ & \quad 7295 & \quad 2 & \quad \frac{1}{2} & \quad 5\frac{1}{2} \\ & \quad 1 & \quad \frac{1}{2} & \quad 2\frac{1}{2} \\ & \quad 73868 & \quad \text{den.} & \quad 1 & \quad \frac{1}{2} & \quad 0\frac{1}{2} \\ & \quad \frac{1}{2} = 729\frac{1}{2} & \quad \frac{1}{2} = 364\frac{1}{2} & \quad \frac{1}{2} = 47\frac{1}{2} \\ & \quad 76962\frac{1}{2} & \quad \frac{1}{2} = 47\frac{1}{2} \\ & \quad \text{Rem.} & \quad \frac{1}{2} = 77016(6d.) \\ & \quad 2(0)6417(17s.) & \quad \text{L. 320 17 6 sterling. Ans.} \end{align*} \]
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 reversing the operation. And in like manner may picoli money be reduced to current or to bank money, and the contrary.
In Leghorn = 73 pezzos | In Lucca = 77 crowns In Rome = 68 crowns | In Frankfort = 139½ florins
VII. Exchange with Genoa.
Money Table.
\[ \begin{align*} 12 \text{ Denari} & \quad \text{make} \quad 1 \text{ soldi} \quad s. d. \\ 20 \text{ Soldi} & \quad \text{make} \quad 1 \text{ pezzo}=4 6 \text{ sterling}. \end{align*} \]
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 5½ lires; and, consequently exchange money is 5½ 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 51½d. sterling per pezzo?
\[ \begin{align*} \text{Sold. d. Pezi. soldi.} \\ \text{If } 20 : 51\frac{1}{2} & \quad \text{:: } 3390 : 16 \\ & \quad \text{Z z. 2} \\ & \quad \text{L. s. d.} \\ & \quad 160)28143640(175897\frac{1}{2}=732 18 1\frac{1}{2} \end{align*} \] Exchange. If sterling money be given, it may be reduced or changed into pezzos of Genoa, by reversing the former operation.
Exchange money is reduced to lire money, by being multiplied by $5\frac{1}{2}$, as follows:
| Pez. soldi | Decimally | |------------|-----------| | 3390 16 | 3390.8 | | 5\(\frac{1}{2}\) | 5.75 |
| Lires 19497 | Lires 19497.100 | |-------------|-----------------| | 16054 | 169540 | | \(\frac{1}{2}\) = 1695 8 | 237356 | | \(\frac{1}{2}\) = 847 14 | 169540 |
And lire money is reduced to exchange money by dividing it by $5\frac{1}{2}$:
In Milan, 1 crown = 80 In Naples, 1 ducat = 86 In Leghorn, 1 piastre = 20 In Sicily, 1 crown = 127\(\frac{1}{2}\)
VIII. Exchange with Leghorn.
Money Table.
12 Denari make 1 soldi 20 Soldi make 1 piastre = 4 6
Books and accounts are kept in piastres, soldi, and denari. The piastre here consists of 6 liras, 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 48d. to 58d. sterling per piastre.
Example. What is the sterling value of 73\(\frac{1}{2}\) piastres at 55\(\frac{1}{2}\)d each?
\[ \begin{array}{c|c} \text{s. d.} & \text{piastres, at 55\(\frac{1}{2}\)d} \\ \hline 4 \text{ or } 48 & 146 4 \\ 6 & 18 5 6 \\ 1\(\frac{1}{2}\) & 4 11 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 piastres of Leghorn are
In Naples = 134 ducats | In Geneva = 185\(\frac{1}{2}\) crowns.
Soldi of Leghorn.
In Sicily, 1 crown = 133\(\frac{1}{2}\) In Sardinia, 1 dollar = 95\(\frac{1}{2}\)
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.
Rome, 1 crown = 6 1\(\frac{1}{2}\) Naples, 1 ducat = 3 4\(\frac{1}{2}\) Florence, 1 crown = 5 4\(\frac{1}{2}\) Milan, 1 ducat = 4 7 Bologna, 1 dollar = 4 3 Sicily, 1 rixdollar = 5 0 Vienna, 1 florin = 3 1\(\frac{1}{2}\) Augsburgh, 1 florin = 3 0 Frankfort, 1 florin = 3 0 Bremen, 1 rixdollar = 3 3 Breslau, 1 rixdollar = 3 3 Berlin, 1 rixdollar = 4 0 Stetin, 1 mark = 1 6 Emden, 1 rixdollar = 3 6 Bolsena, 1 rixdollar = 3 8 Dantzig, 13\(\frac{1}{2}\) florins = 1 0 Stockholm, 34\(\frac{1}{2}\) dollars = 1 0 Russia, 1 ruble = 4 5 Turkey, 1 asper = 4 6
The following places, viz. Switzerland, Nuremberg, Leipsic, Dresden, Osnaburgh, Brunswic, Cologne, Liege, Strasburgh, 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
\[ \begin{array}{c|c} 18 : 10 & L. s. d. \\ 9 : 5 & 845 17 6 \\ \end{array} \]
9)4229 7 6
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}{c|c} 5 : 9 & 469 18 7\(\frac{1}{2}\) \\ \end{array} \]
9)4229 7 6
845 17 6 currency. Ans.
3. How much sterling money will 1780l. Jamaica currency amount to, exchange at 40 per cent.? 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 9½ per cent.
If 100 : 109½ :: 586.5
8 877
800 : 877 41055
41055 46920
800)514360.5
642.956625
Ans. 642l. 19s. Irish.
By practice.
p. cent.
10 = 109½
2 = 11.75 sub.
8 = 46.92
1 = 5.865
¼ = 2.9325
⅛ = 0.733125
9½ = 56.450625 add.
642.950625
2. How much sterling will 625l. Irish amount to, exchange at 10½ per cent?
If 110½ : 100 :: 625
8 800
883 800 883)500000(566 5 0½ 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, 1½, &c. per cent. The premium is more or less, according to the demand for bills.
Examp. Edinburgh draws on London for 860l. exchange at 1½ per cent.: How much money must be paid at Edinburgh for the bill?
L.
860
per cent.
1 = 109½
2 = 11.75 sub.
8 = 46.92
1 = 5.865
¼ = 2.9325
⅛ = 0.733125
9½ = 56.450625 add.
642.950625
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
230 495
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? Exchange.
Ster. Flem. Ster. d. d. d. If 32 : 54 :: 240
216 108
12 s. d.
32)12960(493 (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 40s. 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.
d. St. Cr. L. St. Cr. If 32 : 1 :: 100 : 750 debit at Paris. Cr. d.Fl. C. d.Fl. If 1 : 52 :: 750 : 39000 credit at Amsterdam. d.Fl. L.St. d.Fl. L. s. d. Ster. If 405 : 1 :: 39000 : 96 5 11½ to be remitted.
But if the course of exchange between Paris and Amsterdam, instead of falling below, rise above 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:
L.St. d.Fl. L.St. d.Fl. If 1 : 405 :: 100 : 40500 debit at Amsterdam. d.Fl. Cr. d.Fl. Cr. If 56 : 1 :: 40500 : 723½ credit at Paris. Cr.d.St. Cr. L. s. d. Ster. If 1 : 32 : 723½ :: 96 8 6½ to be remitted.
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 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 antecedent continually for a divisor, and the consequents continually for a dividend, and the quot will be the answer or antecedent required.
Examp. 1. If London remit 1000l. 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 piastres, of 272 mervadies, will the 1000l. sterling amount to in Spain?
Antecedents. Consequents. Abridged. 1l. Sterling = 35s. or 420d. Fl. 1=210 58d. Flemish = 1 crown France 29=31 100 crowns France = 60 ducats Venice 1=0 1 ducat Venice = 360 mervadies Spain 1=45 272 mervadies = 1 piastre 17=1 How many piastres = 1000 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 X 17=493 divisor; and 210 X 30 X 45 +10=2835000 dividend; and, 493)2835000(57504 piastres. Ans.
Or, the consequents may be connected with the sign of multiplication, and placed over a line by way of numerator; and the antecedent, connected in the same manner, may be placed under the line, by way of denominator; and then abridged as follows:
\[ \frac{420 \times 60 \times 360 \times 100}{58 \times 100 \times 272} = \frac{210 \times 60 \times 360 \times 10}{29 \times 1 \times 272} \]
\[ \frac{210 \times 60 \times 45 \times 10}{29 \times 34} = \frac{210 \times 30 \times 45 \times 10}{29 \times 17} \]
\[ \frac{2835000}{493} \]
And, 493)2835000(57504 piastres. Ans.
The placing the terms by way of antecedent and consequent, sequent working as the rules direct, saves so many statings of the rule of three, and greatly shortens the operation. The proportions at large for the above question would be stated as under.
| L. St. | d. Fl. | L. St. | d. Fl. | |--------|--------|--------|--------| | If 1 | : 420 | :: | 1000 | : 420000 | | d. Fl. | Cr. | d. Fl. | Cr. | | If 58 | : 1 | :: | 420000 | : 72411\(\frac{3}{7}\) | | Cr. | Duc. | Cr. | Duc. | | If 100 | : 60 | :: | 72411\(\frac{3}{7}\) | : 43444\(\frac{4}{9}\) | | Duc. | Mer. | Duc. | Mer. | | If 1 | : 360 | :: | 43444\(\frac{4}{9}\) | : 1564137\(\frac{2}{9}\) | | Mer. | Piast. | Mer. | Piast. |
If we suppose the course of direct exchange in Spain to be 42\(\frac{3}{7}\)d. sterling per piastre, the 1000l. remitted would only amount to 5647\(\frac{2}{3}\) piastres; and, consequent- ly 103 piastres are gained by the negotiation; that is, about 2 per cent.
1. A banker in Amsterdam remits to London 400l. Flemish; first to France at 56d. Flemish per crown; from France to Venice, at 100 crowns per 60 ducats; from Venice to Hamburg, at 100d. Flemish per du- cat; from Hamburg to Lisbon, at 50d. Flemish per crusade of 400 rees; and, lastly, from Lisbon to Lon- don at 64d. 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?
Antecedents. Consequents.
| 36d. Flem. = 1 crown | | 100 crowns = 60 ducats | | 1 ducat = 100d. Flem. | | 50d. Flem. = 400 rees | | 1000 rees = 64d. sterling |
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}{526628d. ster.} = 219l. 8s. 6\(\frac{1}{2}\)d. ster. Ans. \]
To find how much the exchange from Amsterdam directly to London, at 36s. 10d. Flemish per l. sterling, will amount to, say,
| s. d. | d. Fl. | L. St. | d. Fl. | L. s. d. St. | |-------|--------|--------|--------|-------------| | 36 10 | If 442 : 1 :: 96000 : 217 3 10\(\frac{1}{2}\) | | 12 | | | | 219 8 6\(\frac{1}{2}\) |
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. ster- ling, may be found thus:
Make 64d. sterling, the price of the millree, the first antecedent; then all the former consequents will become antecedents, and all the antecedents will be- come consequents. Place 240, the pence in 1l. ster- ling, as the last consequent, and then proceed as taught above, viz.
Antecedents. Consequents.
| 64d. ster. = 100 rees | | 400 rees = 50d. Flem. | | 100d. Flem. = 1 ducat | | 60 ducats = 100 crowns | | 1 crown = 56d. Flem. |
How many d. Flem. = 240 ster.?
\[ \frac{1000 \times 30 \times 100 \times 56 \times 240}{64 \times 400 \times 100 \times 60} = 875 \]
and
\[ 2)875(437\(\frac{1}{2}\)d. = 36s. 5\(\frac{1}{2}\)d. Flem. per l. ster. Ans. \]
Or the arbitrated price may be found from the answer to the question by saying
| d. Ster. | d. Flem. | d. St. | |----------|----------|--------| | If 156540 | 96000 | :: 240 |
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 consider- able 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, freightments, and other merchan- tile 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 indis- pensably required to attend at them, that a person's ab- sence alone makes him to be suspected of a failure or bankruptcy. The most considerable exchanges in Eu- rope, 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 consi- derable 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 col- legium mercatorum; whereof it is pretended there are still some 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. Exchange founded on the authority of Livy, whose words are as follows: *Certamen consulibus incidet uter dedicaret Mercurii eodem. Senatus à se rem ad populum rejicit: utri corum dedicatio jussu populi data esset, cum praesae annona, mercatorum collegium instituere 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 mercatorum instituere* 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 Beckmann'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 1404, 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 so 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."
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 still used; which certainly seems to imply great antiquity. It speaks of usance; 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. 293: 'Cum de mensibus Aprilis et Maii ultimo elapsis Antonius Quarti, merca- tor Lucanus residentis in villa Brugensi, a Joanne Colom, mercatore civitatis Barchinonae, etiam residente in pre- dieta villa Brugensi, duo millia scutorum Philippi, quo- libet scuto pro xxii grossis computato, solvendi per Fran- cicum de Prato mercatorem Florentiae, more solito, in Barchinona, mediatiim Petro Gilberto et Petro Olivo, et mediatiim Petro Scorp, et supradicto Petro Gilberto, mercatoribus Cardone: prout de dictis cambiis appa- ret quatuor litteras papireis, quarum tenores sub- sequuntur.'
'Superscriptio autem primae litterae fuit talis: Franc- do Prato et comp. à Barcelona. Tenor vero ejusdem ad intra fuit talis: Al nome di Dio, Amen, à di xxviii. Aprile 1404. Pagate per questa prima di camb. à usanza à Pietro Gilberto, è Pietro Olivo scuti mille à sold. x. Bar- celonesi 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 ci guardi. Subtus vero erat scriptum: Antonio Quarti Sal de Bruggias.'
'Superscriptio vero secundae litterae fuit talis: Fran- cisco de Prato et comp. à Barcelona. Et ab intra sic habebatur: Al nome de Dio, Amen, à di xviii. di Magio 1404. Pagate per questa prima di comp. à usanza à Pietro Gilberto et à P. de Scorpo scuti mille de Feipigo à sold. x. Barcelonesi per scuto: i quali scuti mille sono per camb. che con Gio. Colomba à grossi xxii. di g. scuto: et pag. à nostro conto: et Christo vi guardi. Subtus vero erat sic scriptum: Ant. Quadri Sul de Bruggias.'"
Bills of exchange are justly considered as of the greatest importance to the interest of commerce; but several queries have been proposed 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 confided 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 Busch of Hamburgh 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 1799, 2 vol. 4to. As a proof of what I have said above, I shall mention the following important article, 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 in 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 insurances, which required that underwriting should be done in the presence of a notary, and declared policies & scriptures privadas 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 old Spanish trade with wool, silk, salt, and saffron; and of the oldest guilds or incorporated societies of tradesmen at Barcelona," &c. Officers of the receipt may take one penny in the Exchequer pound, as their fee, for sums issued out; and they are obliged, without delay, to receive the money brought thither; and the money received is to be put into chests under three different locks and keys, kept by three several officers. All sheriffs, bailiffs, &c., are to account in the exchequer; and in the lower part, termed the receipt, the debtors of the king, and persons in debt to them, the king's tenants, and the officers and ministers of the court, are privileged to sue one another, or any stranger, and to be sued in the like actions as are brought in the court of king's bench and common pleas.
The judicial part of the exchequer, is a court both of law and equity. The court of law is held in the office of pleas, according to the course of common law, before the barons: in this court, the plaintiff ought to be a debtor or accountant to the king; and the leading process is either a writ of subpoena, or quo minus, which last goes into Wales, where no process out of courts of law ought to run, except a capias utiagatum.
The court of equity is held in the exchequer chamber, before the treasurer, chancellor, and barons; but generally, before the barons only: the lord chief baron being the chief judge to hear and determine all causes. The proceedings of this part of the exchequer are by English bill and answer, according to the practice of the court of chancery; with this difference, that the plaintiff here must set forth, that he is a debtor to the king, whether he be so or not. It is in this court of equity that the clergy exhibit bills for the recovery of their tithes, &c. Here too the attorney-general exhibits bills for any matters concerning the crown; and a bill may be exhibited against the king's attorney by any person aggrieved in any cause prosecuted against him on behalf of the king, to be relieved therein; in which case the plaintiff is to attend on the attorney-general, with a copy of the bill, and procure him to give an answer thereto; in the making of which he may call in any person interested in the cause, or any officer, or others, to instruct him, that the king be not prejudiced thereby; and his answer is to be put in without oath.
But, besides the business relating to debtors, farmers, receivers, accountants, &c., all penal punishments, intrusion, and forfeitures upon popular actions, are matters
---
(a) In Vol. III. p. 613, under the article BILL, the old duty on stamps is mentioned, and the new entirely omitted.
The following are the duties on such stamps for the year 1820. The duty on promissory notes for the payment of money to the bearer on demand, for a sum not exceeding £1. 1s. is 5d. For a sum exceeding £1. 1s. and not £2. 2s.; 10d. For a sum exceeding £2. 2s. and not £5. 5s.; 1s. 3d. For a sum exceeding £5. 5s. and not £10.; 1s. 9d. Which notes may be reissued after payment as often as shall be thought fit.
Bill of exchange, draft, or promissory or other note, payable to the bearer on demand or otherwise, not exceeding 2 months after date, or 60 days after sight, for 40s. and not exceeding £1. 5s.; 1s.
Bill of exchange, draft, order, or promissory note for the payment of money, where the sum shall exceed £5. 5s. and not £10.; 1s. 6d. Exceeding £10. and not £30.; 2s. Above £30. and not £50.; 2s. 6d. Above £50. and not £100.; 3s. 6d. Above £100. and not £200.; 4s. 6d. Above £200. and not £300.; 5s. Above £300. and not £500.; 6s. Above £500. and not £1000.; 8s. 6d.
Foreign bills of exchange drawn in sets, where the sum shall not exceed £100.; for each bill in each set, 1s. 6d. Exceeding £100. and not £200.; 3s. Exceeding £200. and not £500.; 4s. Exceeding £500. and not £1000.; 5s. Exchequer, ters likewise cognizable by this court; where there also sits a puisne-baron, who administers the oaths to high sheriffs, bailiffs, auditors, receivers, collectors, comptrollers, surveyors, and searchers of all the customs, &c.
The exchequer in Scotland has the same privileges and jurisdiction as that of England; and all matters competent to the one are likewise competent to the other.
Black Book of the Exchequer, is a book under the keeping of the two chamberlains of the exchequer; said to have been composed in 1175 by Gervais of Tilbury, nephew of King Henry II., and divided into several chapters. Herein is contained a description of the court of England, as it then stood, its officers, their ranks, privileges, wages, perquisites, power, and jurisdiction; and the revenues of the crown, both in money, grain, and cattle. Here we find, that for one shilling, as much bread might be bought as would serve 100 men a whole day; that the price of a fat bullock was only 12 shillings, and a sheep four, &c.
Chancellor of the Exchequer. See Chancellor.
Exchequer Bills. By statute 5 Ann. c. 13, the lord treasurers may cause exchequer bills to be made of any sums not exceeding £500,000 for the use of the war; and the duties upon houses were made chargeable with 4l. 10s. per cent. per annum to the bank for circulating them. The bank not paying the bills, actions to be brought against the Company, and the money and damages recovered; and if any exchequer bills be lost, upon affidavit of it before a baron of the exchequer, and certificate from such baron, and security to pay the same if found, duplicates are to be made out: also when bills are defaced, new ones shall be delivered. The king, or his officers in the exchequer, by former statutes, might borrow money upon the credit of bills, payable on demand, with interest after the rate of 3d per diem for every 100l. bill. And by 8 and 9 W. III. c. 20, an interest of 5d. a day was allowed for every 100l. But 12 W. III. c. 1, lowered the interest on these bills to 4d. a-day per cent. And by 12 Ann. c. 11, it is sunk to 2d. a-day. Forging exchequer bills, or the endorsements thereof, is felony.
Excise, (from the Belgic accisiæ, tributum, "tribute,") an inland duty or imposition, paid sometimes upon the consumption of the commodity, or frequently upon the wholesale, which is the last stage before the consumption. This is doubtless, impartially speaking, the most economical way of taxing the subject; the charges of levying, collecting, and managing the excise duties, being considerably less in proportion than in other branches of the revenue. It also renders the commodity cheaper to the consumer, than charging it with customs to the same amount would do; for the reason just now given, because generally paid in a much later stage of it. But, at the same time, the rigour and arbitrary proceedings of excise laws seem hardly compatible with the temper of a free nation. For the frauds that might be committed in this branch of the revenue, unless a strict watch is kept, make it necessary, wherever it is established, to give the officers a power of entering and searching the houses of such as deal in exciseable commodities, at any hour of the day, and, in many cases, of the night, likewise. And the proceedings, in case of transgressions, are so summary and sudden, that a man may be convicted in two days' time in the penalty of many thousand pounds, by two commissioners or justices of the peace; to the total exclusion of the trial by jury, and disregard of the common law. For which reason, though Lord Clarendon tells us, that to his knowledge the earl of Bedford (who was made lord treasurer by King Charles I. to oblige his parliament) intended to have set up the excise in England, yet it never made a part of that unfortunate prince's revenue; being first introduced, on the model of the Dutch prototype, by the parliament itself after its rupture with the crown. Yet such was the opinion of its general unpopularity, that when in 1642 "aspersions were cast by malignant persons upon the house of commons, that they intended to introduce excises, the house for its vindication therein did declare, that these rumours were false and scandalous, and that their authors should be apprehended and brought to condign punishment." Its original establishment was in 1643, and its progress was gradual; being at first laid upon those persons and commodities where it was supposed the hardship would be least perceivable, viz. the makers and venders of beer, ale, cider, and perry; and the royalists at Oxford soon followed the example of their brethren at Westminster, by imposing a similar duty: both sides protesting that it should be continued no longer than to the end of the war, and then be utterly abolished. But the parliament at Westminster soon after imposed it on flesh, wine, tobacco, sugar, and such a multitude of other commodities, that it might be fairly denominated general: in pursuance of the plan laid down by Mr Pymme (who seems to have been the father of the excise), in his letter to Sir John Hotham, signifying, "that they had proceeded in the excise to many particulars, and intended to go on farther; but that it would be necessary to use the people to it by little and little."
And afterwards, when the nation had been accustomed to it for a series of years, the succeeding champions of liberty boldly and openly declared "the impost of excise to be the most easy and indifferent levy that could be laid upon the people;" and accordingly continued it during the whole usurpation. Upon King Charles's return, it having then been long established, and its produce well known, some part of it was given to the crown, in 12 Car. II. by way of purchase for the feudal tenures and other oppressive parts of the hereditary revenue. But, from its first original to the present time, its very name has been odious to the people. It has, nevertheless, been imposed on abundance of other commodities in the reigns of King William III. and every succeeding prince, to support the enormous expenses occasioned by our wars on the continent. Thus brandies and other spirits are now excised at the distillery; printed silks and linens, at the printer's; starch and hair powder, at the maker's; gold and silver wire, at the wiredrawer's; all plate whatsoever, first in the hands of the vender, who pays yearly for a license to sell it, and afterwards in the hands of the occupier, who also pays an annual duty for having it in his custody; and coaches and other wheel carriages, for which the occupier is excised; though not with the same circumstances of arbitrary strictness with regard to plate and coaches as in the other instances. To these we may add coffee and tea, chocolate and cocoa paste, for which the ty is paid by the retailer; all artificial wines, commonly called sweets; paper and pasteboard, first when made, and again, if stained or printed; malt, as before mentioned; vinegars; and the manufacture of glass; for all which the duty is paid by the manufacturer; hops, for which the person that gathers them is answerable; candles and soap, which are paid for at the makers; malt liquors brewed for sale, which are excised at the brewery; cider and perry at the vendor's; leather and skins, at the tanner's; and, lately, tobacco, at the manufacturer's: A list, which no friend to his country would wish to see farther increased.
The excise was formerly farmed out: but is now managed for the king by commissioners in both kingdoms, who receive the whole product of the excise, and pay it into the exchequer. These commissioners are nine in number in England, and five in Scotland. The former have a salary of £1000 a-year, the latter £600. They are obliged by oath to take no fee or reward but from the king himself; and from them there lies an appeal to five other commissioners called commissioners of appeals.