litigating parties, or forgetfulness, it might have been anticipated that this general interrogatory would fail in its object; and so far as it has been used, such is said to be the case. This mode of ascertaining facts in suits in equity is evidently very defective, and has been the subject of considerable complaint and of lengthened inquiry; but hitherto nothing has been done to amend the system. (See Minutes of Evidence taken before the Chancery Commissioners, annexed to their Report of 1826; and a pamphlet (1837), by W. A. Garratt, entitled Suggestions for Reform in Proceedings in Chancery.) Those who may be inclined to follow this subject further will find it discussed at great length in Bentham's Rationale of Judicial Evidence, a work which has certainly contributed to the formation of more correct opinions on evidence; but it has neither exhausted the subject, nor is it free from great defects. The rules of the English law of evidence are contained in the treatises of Mr. Phillipps and Mr. Starkie. › EXCHANGE. [DIVISION OF EMPLOYMENT; DEMAND AND SUPPLY; BALANCE OF TRADE.] that the Greeks and Romans were acquainted with some modes of remitting money and paying debts, similar to those effected by a bill of exchange. Instruments of this kind were current among the commercial states of Italy in the early part of the fourteenth century, and it is probable they were not unknown at the close of the same century in England. It is certain that bills of exchange were originally employed solely as media of remittance, and the circumstances which brought them into use may be explained as follows:-A., at Hamburg, consigned goods to B., in London, either in execution of an order, or as his factor for sale. B., thereupon, being debtor to A. for the invoice amount, or the proceeds of the sale, as the case might be, was desirous of remitting to A. accordingly. The remittance could only be made in money or in goods; but A. might not want a return cargo of English commodities, and the sending out of specie would be inconvenient and hazardous. Now suppose that some third person, C., were about to go from Hamburg to London, mutual accommodation would suggest the following ar rangement:-A. would deliver to C. an open letter addressed to B., requesting him to pay to C. the amount intended to be remitted: and C. on receiving the letter would pay to A. the value of it in money current at Hamburg, and having carried it over to London would there receive from B. the sum specified. Thus much of the expense, and all the risk and trouble of remittance would be saved to B. or A.; and C., besides having a more convenient sign of wealth, would probably receive some advantage for the accommodation. It is obvious, however, that to bring this exchange into operation several things would be wanting: first, the knowledge by the two par ties of the mutual want; secondly, confidence on the part of C. that the money would be paid by B. on presentment of the letter of request, or that in default of payment by him he would be repaid by A.; and, thirdly, the determining how much C. ought to give A. in ready money of Hamburg for the sum specified in the The origin of bills of exchange is un-letter, to be paid at a future day in money known. It is probable or almost certain of England. Now the adjustment of the EXCHANGE, BILL OF, may be described as a written order or request addressed by one person to another, directing him to pay on account of the writer to some third person or his order, or to the order of the person addressing the request, a certain sum of money at a time therein specified. The person who gives the direction is called the drawer of the bill, he to whom it is addressed the drawee, and he in whose favour it is given the payee, or, occasionally, the remitter. Bills of exchange are ordinarily divided into two classes, foreign and inland; foreign bills comprehend such as are drawn or are payable abroad; inland, those which are drawn and payable in England. Thus, a bill drawn in France, or even in Scotland or Ireland, upon a party in England, or conversely, is a foreign bill; and this is a distinction that has important legal consequences. comparative value of different currencies, fell directly within the province of the money-dealers or bankers, and as all persons about to remit or to proceed to foreign countries resorted to them for the requisite coin, they would furnish the merchants with information as to the other particulars also, and would thus become the negotiators of this sort of exchanges. But there were other cases in which the like operation might take place, for although A. might not want goods from England in return for those shipped by him from Hamburg, other Hamburg merchants might, and so it might happen that at the time of the intended remittance B. had money owing to him at Hamburg in respect of goods so shipped. Let it be supposed then that C., instead of going to London, were about to remit money to B., in that case the whole or a portion, as well of B.'s debt to A. as of C.'s debt to B., might be settled by a simple arrangement of the same kind as that before described. B. would write a letter addressed to C., requesting him to pay a specified sum to A., or, in mercantile phrase, would draw upon C. in favour of A.; this letter or draft he would remit, as payment, to A., who, upon presentment to C. would receive from him the amount, and would give credit to B. accordingly. Now, as the trade between two countries never, unless under very unusual circumstances, consists solely of shipments of goods on the one part, and solely of remittances of money on the other-it might happen that if B. had not a debtor at Hamburg other London merchants would have sums of money owing from Hamburg. B. would endeavour to find out some such merchant, from whom he might procure an order upon his debtor; in other words, he would buy a bill on Hamburg for remittance to A. For the reasons before mentioned, recourse would be had for this purpose to the moneydealers; and it is not difficult to conceive by what steps the procuring and supplying of bills soon became in their hands a distinct business. Indeed, without the intervention of such dealers, the system could never have become extensively useful; because in the commercial intercourse of two coun> tries the commodities exchanged will never be exactly balanced. There is at times a scarcity of bills upon one country and an excess of those upon some other: but this inequality is equalized by the care of those persons whose business it is to deal in bills; for they send or procure the superfluous bills in one market to meet the demand in another. The instrument of transfer, or bill of exchange, now assumed a concise and permanent form. At first the order would probably be, to pay on presentment to the drawee, or as it was expressed in the instrument, "on sight." But, as the intervals between drawing and presentment would be variable, it became the practice to fix them by a definite scale; and hence probably arose what was called the usance between two ports or countries, or the period fixed by usage, at which, with reference to the date, a bill was presentable for payment. Afterwards these usances came to signify the periods at which the merchants of any particular country or port were in the practice of paying the bills so drawn upon them, and these customary periods being universally known, the word usance soon came to signify a specific term of days, and it was formerly not uncommon, when by agreement the time of payment was determined, to draw foreign bills payable at one, two, or more usanees. In modern times, the more frequent practice has been to make them payable at so many days after sight, or at so many months or days after date. In course of time the practice was also established of granting what was termed days of grace, or a short time to the drawee for providing the requisite cash: these days of grace, though varying as to limits in different communities, are generally recognised as part of the custom of merchants. Originally, as we have supposed, the bill was a letter addressed by B. to C., directing him to pay A. But as it might not be convenient to A. to present the letter in person, it became usual to give him authority to appoint another, by whom the presentment might be made and the money received. It assumed therefore the form of a direction to pay A., or such other person as A. should appoint, expressed with the conciseness of mercantile language, thus: "Pay A., or order." But if the letter or bill in the hands of A. were assignable, that is transferable by him to another person, there was no reason why it should not be so in the hands of his assignee, and thus by the operation of the words "or order," it obtained the character of a negotiable instrument or sign of value, transferable from one person to another. The assignment might be in such form as this:" Pay the within to D., or his order-signed A.," and by a similar superscription D. might in like manner assign the bill to E., and E. to F., and so on, But as the bill was of course delivered to each successive assignee, possession was of itself a sufficient voucher for payment, and the special superscription therefore was soon frequently dispensed with as unnecessary, the assignment of the prior holder being indicated by his signature alone. In England, and in some other countries, it has long been the practice to write the assignment on the back of the instrument, and it has thence received the name of an indorsement: the form first described, in which the assignee is named, is termed a special indorsement, or an indorsement in full; and the mere signature of the assigner is called an indorsement in blank. When bills were drawn payable at some future day, one might suppose that the first holder who had the opportunity of doing so should, during the currency of the specified period, shew the bill to the drawee, and procure from him an undertaking to pay it at maturity. If he refused, the bill was protested for nonacceptance, and notice of the dishonour was immediately communicated to the drawer. If he gave the undertaking either verbally or in writing upon the bill or otherwise, he was said to have accepted it, and became thenceforth liable, as the acceptor, for the amount specified. For the effect of the acceptance was this: the drawee thereby affirmed the right of the drawer to call upon him for payment of the money, and he assented to the transfer of the right. If, therefore, after acceptance, he refused to pay the bill when due, he was responsible to the drawer as having acknowledged himself to be his debtor, and to the payee or other party in possession of the bill, in respect of his express engagement. But the right of the holder was not confined to the acceptor; for although, after acceptance, the drawee became the principal debtor, to whom recourse must be had in the first instance, yet if upon regular presentment the drawee did not pay, the holder was not bound to take measures against him alone, but might resort to all prior parties whose names appeared upon the instrument. For as the indorsement gave the right to receive the money, it was to be presumed that it had not been made without an equivalent, and it was but justice, therefore, that on the dishonour of the bill by the drawee, the holder should receive back the value which he had given: and as every person, whose signature, whether as drawer or indorser, appeared upon the bill, acknowledged himself by the act of signing to have received value for the delivery of the order, it was not unreasonable that the reimbursement should be claimed, not merely from the party from whose hands the bill had been received, but also from the drawer and every other party whose name preceded that of the holder. The result therefore was this: if the drawee paid the bill, the matter was settled; but if he dishonoured it, by a refusal either to pay or to accept on due presentment, a notification of the dishonour was conveyed by the holder to all parties preceding him, or to such as he thought fit to call upon for indemnity; if then the drawer paid the money, or as it was termed took up the bill, all the other parties were exonerated, and the drawer had his remedy against the drawee, upon the bill if accepted, or upon the original consideration in respect of which it was drawn, if the acceptance had been refused. In like manner, whoever satisfied the bill by payment, thereby discharged all parties posterior to himself, and obtained a right against all who preceded him. Thus each successive indorsee had the accumulated security of all the parties whose signatures were upon the instrument as acceptor, drawer, or indorser, when it came into his hands. planation just given, it will be obvious that it would be required of him to acknowledge his liability by making himself a party to the instrument. The bill therefore purchased by him would not be, as has been above supposed, a direction to pay the remittee, but to pay the remitter or his order; and hence it happens, as was said in the commencement, that the party to whom the bill is made payable, is sometimes called the remitter. A person in London has a payment of 1000l. to make in Paris. Instead of re The party who remits a bill is by the supposition debtor to him to whom the remittance is made; and after the ex-mitting the money, he goes to an exchange-broker, and purchases from him a bill on Paris equivalent to that sum. The bill will be payable in francs; and it will be necessary to ascertain how many francs are equal to 1000l. By the mint regulations between England and France, 17. sterling of English money is equal to 25 francs, 20 cents, which is therefore the nominal or standard par of exchange between the two countries. According to this scale, then, 1000l. in London would be worth 25,200 francs in Paris. But the par is fixed on the supposition that the currencies of the two countries respectively are uniformly of the weight and purity established by the Mint, whereas the coin is often debased by alloy or attrition, and the relative value undergoes a corresponding alteration. This deviation however is well known, and may be regarded as comparatively constant. But other circumstances, which are not constant, affect the ratio of value. When, for instance, any considerable portion of the circulating medium of either of the two countries between which the exchange is to be effected consists of a paper currency, the standard is materially affected by the quantity of paper in circulation. A redundancy of paper money has invariably the effect of depreciating the standard, or, in other words, of raising the value of the standard coin as compared with the same nominal sum in paper money. This effect is temporary only To obviate the inconvenience that may result from bills being lost, it became usual to draw them in sets; that is to say, two or more parts of each bill were drawn, and described as the 1st, 2nd, 3rd, and so on, each containing a condition that it should be payable only while the others remained unpaid. But this practice of drawing in sets is made available for another purpose. The payee having indorsed and paid away one part, frequently remits another part to some agent or correspondent at the place of the drawee's residence, to be by him presented for acceptance, with a direction added, by way of memorandum, to the bill, that, when accepted, it is to be held for the use of the person who shall duly present the other part or parts for payment at maturity. The advantage of this arrangement is obvious: if the bill be accepted, it is held, according to the direction, till maturity: if refused, it is protested, and notice is given to the drawer. Upon this protest the drawer may be called upon to give security for the due payment of the bill at the expiration of its currency; or, as occasionally happens, some correspondent of the drawer at the place upon which the bill is drawn accepts it for his honour, and thereby places himself in the situation of the original drawee, being liable as acceptor to all parties subsequent to the drawer. Such an acceptance is called an acceptance supra protest, or for honour, and may be made at any time during the currency of the bill, and on behalf of any party who is liable upon it after default made by the drawee. The following illustration will show the use of a Bill of Exchange. when the paper is convertible into specie on demand; if inconvertible, it is both permanent and considerable. Thus at one period of the late war, the English guinea was worth 268. in money, estimated according to the value of the 11. sterling in bank notes. At that time therefore the English pound would fall far below the Mint standard of 37. 178. 104d. per ounce, and a proportionate effect would be produced on the rate of exchange with any other country in which the standard was maintained. Taking, as before, the instance of France, the par would vary, other things remaining con stant, from 25 francs to somewhere about19 francs, or 10007., in a Bank of England note, would buy a bill on Paris, not for | selves, would be, that of the remittances 25,200 francs, but for about 19,000 francs to France three-fourths must be made in only. But the same cause might be ope- specie, and that the bills in which the rerating in France also, in which case the maining one-fourth was made would be calculation would be still further compli- at the maximum price, that is to say, tak cated by a comparison of the depreciation ing the scale before adopted, would bear in the one country with that in the other. a premium of all but one per cent. But The variation here taken for an example it is an established fact, that in every is an extreme case, but fluctuations the trading community the value of the whole same in kind, though less in degree, are of the exports taken together is, upon an still of continual occurrence, and must be average, very nearly balanced by the carefully taken into account in all calcu- value of the whole of the imports, or, in lations as to the price of bills. other words, that ultimately all commodities imported are paid for directly or indirectly in commodities exported. Therefore, the bills drawn in England upon foreign countries nearly balance the bills drawn in foreign countries upon England in the same period. Thus, although there may be a deficiency in London, to the extent of three-fourths, of bills upon France, there may be an excess, in But there are other causes in operation which materially affect the rate of exchange and the price of bills. The accommodation of â remittance in the form of a bill of exchange is worth a calculable sum, the maximum being the compound of the labour, expense, and risk of the transmission of money in specie. Suppose this maximum to be one per cent., it is evident it is worth the while of the re-nearly the same ratio, of bills upon Belmitter to pay any sum short of 101. for the purchase of a bill equivalent to 1000l. Now the market price of bills is mainly dependent on the relation of the supply to the demand. and this again is primarily regulated by the state of trade between two given countries. When the value of the exports to any country in a given period is equal to the value of the imports from the same country in the same period, the trade is said to be balanced: the bills drawn in each country upon the other will be equal in amount, and this equilibrium constitutes what is called the real par of exchange. But this state of things can never actually exist. Even where, upon the average of years or months, the trade is nearly even, there will be disturb ing circumstances which will have a temporary effect upon the exchanges. There will consequently be occasional scarcity and occasional abundance of foreign bills in the market. When scarce, their price of course is higher, or, as it is ordinarily expressed, they bear a premium. At such times the imports exceed the exports, and the exchanges are said to be against us. Suppose that, in the trade between England and France, the value of our imports from France exceeds that of our exports to France by about three-fourths. The effect of this, if matters were left to them gium, and in like manner there may be an excess in Belgium, to the same extent, of bills upon France. The London billmerchant by means of his agent will buy bills upon Paris at Antwerp, where they are cheapest, and bring them for sale to London, where they are dearest. The cost of procuring, and the profit of the bill-merchant, therefore, upon this transaction, constitute the third element in the calculation. Supposing then the bill to be a good one, that is to say, guaranteed by names of known and established credit, the only remaining operation is to estimate the discount according to mercantile practice, or, in other words, the interest of 1000l. in money for the time which will elapse before payment of the bill; and the combined result will give the sum in francs for which the bill is to be drawn, or the amount of bills already drawn to be given in exchange for 1000l. Bills of exchange are also in frequent use for the purpose of remittance from one part of the United Kingdom to another. Thus the trader in Manchester, Leeds, or Birmingham, who has a payment to make in London, remits bills of his customers in the country. These are discounted by the moneyed capitalists through the intervention of bill-brokers A few of the London bankers also dis |