1000000030

E X

bill of (xcl..

n~e,

or a note of han:!: th& m looked

~p"n

' s

pay""

lit.

llIe phn[tu,lilY of,

arql1ittin~

thofe

obli~a

ions is

e(f",li.,1 10 comml rce; .nd no fooner is •

merc~ant's

m epteu bill feole/led, Ihao he is enofidered as a

baokrul't. for lhis reafon, Ihe 1.lVs of n

¡r.tl

nalio"s

llave given rery extraordinary privilegcs 1(1 bi!l! of ex·

chauge. The (':;:Jril

of trede i! tfftmidl to every fv'

eietr ; aod "'ere tbe cJ;¡ims of merehants tO lir.ser UI1

der

t~e

formalnies of eoum of

I.IV

wheo Iiquid-ted

by bilis of

exeh~

r.ge,

faith, confidenee, aod pur,.lua–

lit

",ould

quie~ly

Mappm , .nd the srw

en~ine

01" .:ommeree 1V0uld be tOlally ddlroytd.

r=sulor bill of cxcoJn;¡e is a mercaolile eootraa, in

whieh four perfons areconctrncd,

"it.

l. T he dr.wer,

\Vho I(el:,.,s I"e ..Iue:

[lis debtor io

dillant

plm, upoo

w~om

the bi!l is dml n, and who mul! actepl

.anJ pay 1::

The pafon who gives v. llle fOI the bill,

JOwhore or¿er il io tO

paiJ: anJ,

The pel!"n 10

\\'homit is oldered to be pald; crediror tOt:.e third.

lhis operall n, reciproc.1 deblS. due in t"'o di–

Jlam

p;:m,

are plid bya fon of transler. or perOlutatioD

of Jebto s and eredilors.

(A)

in Lonu" 11 is credilor 10

(R)

in Pari' , value 100/.

.(C)

ag.in

in Londoo is eebtor to

(O)

in Pan for a

Ilke fumo

Ihe upm tiOD of the bill of exehange, the

LondODered:JOr i. paid by lhe Londoo debtor. and Ihe

París ereditor is paid by the P"is deblor; confequelltly,

Ihe two dcbts are raid, and no money

f:nt from Lon–

dun tn París, nor from Paris 10 Lon¿on.

teis examplf,

(A)

is the drawer,

(IJ)

is the .e–

eeplor,

(C)

is the

purch,¡(~r

of ,he bill, and

(D)

receives

the rJ'lnCy. Two perfuns here receive lhe money,

(A)

and

(O).

and two FJy the money,

(H)

and

(e) ;

which

is jull what mu!!

duue IVhen twodebtors and t\VO cre–

cliturs cicar accounts.

!Jlis is the pbinprincipieof a bill of

e)(ch~n~e.

Fro:n

wl.leh it appears, th. t reciprocJI aod eq"al deblS only

can be acquiaed by them.

Whenit Iherefore hap?cns tlm t:,e r:eirroc:;1 dtbls of

LonJon and P.,is (to ul"e Ihe

f.me

eump!e) . re nnt e–

qua!. Ihere .,if.s a balance 00 one liJ:. S"ppofe Lon–

uontoowe Paris a

b.llane~,

I'alu:

1001.

H.·jI

e<n Ihis

be paid? Anf"....

m~y

<irlltr oe dalle with or

without

Ih~

intcrv(otíon uf .

L.II

. \Vith a bill, if an

c',cha"~'r,

fioclins a clemand fur •

blllupon P..is for the n lu( of 100 /. wlen Pdr:S

OW<9

no more to London, fe3ds Ice /. 10 his corre,!'J. d,nt

al P"i. iu coin, al the ex?ence

(fuPFof~)

1/.

~".I

tllen, haring become credilOr 011 Pari•• he can r,il'e •

L:II

fo, Ihe.value of ICO /. ul"'n Ili, beinz rrp.liJ his

c~penc<,

acd pald for his rin( and

Irollbl~

Or it may be

p~id

withom abill, ir II! !Londoo c1'rhtor

frn.Js

the eoin hlmfdf to his Potris credilor, wahllUI

cOI'

~Ioyin.g

ancxchanr.er

Thls Iall exa"'ple n,e'\; of whal liulc "

bia~

.re in

.the payOlent of bdlanccs. As f,1r

th·! deb's are reual.

oOlhing eao be m' rt "fer,,1 than hills uf

C~~:,~r.~t

~lIt

Ihe more th.y are ufeful in tltis eIfy

W.IY 0

1 b"/incf,. tI,e

profil thtre is 10 anj' rer(on 10

",:,I,c

a traJ,: of 1::'

E X

ehange, wh,o

!lC

is nOI himfdf conccrncJ tilhee

deb:or or creuitor.

When

r1'll ch~nts

:'óI"e occafion tO

dr.IV

and rcmit hills

for the

li(l"id~tion

of Iheir 011111 dcbts,

aél"'e

~lId p~l1il'e,

in dlflan: pJrts, they OI':et upoo challge ; where, 10 pur–

lile the forOler examl le. rhe ereditors upon Pa ,is, wheh

Ihey W¡ot money

f~r

0:111,

loo

OUI fur

Ihof~

who are

neblors

il. 'fhe debtors tOParis atain, whcn they

\\'2nt bilis {or

mon~y,

leek for tho(t who

a~e

credito"

upnn il.

'eh:s muket is

eO~n1.otly

artended by brokm, \Vho

reliele the mérel . nt

0(,

the trocole of fmching for Ihofe

he wanls.

1'0

Ihe broker el'cry one eor.tmutieates !Ji,

I . ms, fo far as be fiocs it prud,nt; anc bygúing about

¡maní:

¡II

Ibe mcrehams, Ihe broktrdi(eol'ers

th~

fide up–

on Il'hichthe sremr nemand lies, for money. or forbilis.

W!,O

is tht

dem~nder

in any

b"r~ain,

h.s cooll. nl–

Iy Ihe

dlf~.dl·.mase

in dtalms IVitll h:mof whom he de–

m.nds. Thi¡ is

where fo mueh :he ofe as in

e.~ch.nse,

a~d

renders f"creey very dftOllal

mJividuals

among Ihemerchants.

:he London OIerehanlS wanl 10

pay thm dcb,s tO P"is, wh.n there is •

bal~n,;e

a¡;.infl

London , it

their inltretl 10 e.JOccal thm debts, and

efptm lly the nec,/fity they lOay be unIrr to p.'y them;

(10m

tj¡.~

fea r th.r thoie wl:o Jre creditOrs

"P~u

PJris

ould

deOlar.rI

tOO high a piice for tJe txeh,nse ov

aod abol'e par.

On the otller haod thofe who arecreditors

u~on

Paris,

IVhen Paris owes

b.l.oee

Loncon. are"

,.,del

concealio

whal i, owinS to Ihe," hy París, f,.oOl the

fear that Ih"fc \Vho

~re debtur~

"is I\'oul.l al'..1

themfd v:s o( Ihe co:npe:ilion among

th~

I':ri; erd,wrs,

in urd!r 10 obtain

bdl~

for th<ir monev. be!·', lite ralue

of Ihtm, when. at par

credilor ¡Iron I'.ris, whn is

grw ly prdi. d for mooey at Lonuoo. will lI'illiogly

.\~ate

(omethin~

cf hi. debt, in olJer tO¡;et one 1'.10

wil!

&ive

him rnonq for it.

From Ihe "peralion carried

among

OIere!'~n:s

"pon

Chln¡;e.

W'.

nuy difeover the confequ:"ce of Ih:ir r.:pa–

"He and jarring interells The)" 're conrtJntly illtere!!–

eu in the

1!.~lc

of Ihe bJboee

Thofe wh, al e c'ecitors

P.II

;¡, feae the balance oue to LOOllon; thore \Vho

:!re cl,blors tO Paris. drcad a babnce due tOP",is

'fhe

ir tmll uf the fir!1is to dilfcOI!,le

thev

fe~r;

Ihat

oí lhe LlrI , tO

c\:a~gerale

theywi!h

'fhe bl'okel s

are Ihure \Vho dlwmine the

cOJrf~

uf the day:

anu

Ihe

mor!

i~telli~cnt mach.I~13

are 1:1·)11: "'ho ¿ifpmh t!,eir

"r.nc

!s bcfure Ihe fJ[t is kO(lwn.

NGIV,

h~\v

ii traJe in r,en".1 inlerened in th:

q\\~Oi..n, \\'ho

null

QUllvil , anJ \Vho Ih.!:1 e uUll"lltteJ. ;"

tI,;"

rnn1p!

iC.tt

~,i

('rl!rl1jon

()r.C~':hJfl~C

mol'lg

Ilnreh

Ints

T he inlcrdl of

lrJ\i~

dnJ or

I~e

n.1lio" is I'ri!l;io.lIr

c~nc:rn~d

in tlt., 1

rJ~"

IIICI:IO,¡

p.lyin,! aoJ rc(e;l'iI1J

t!J('

:a!,I1¡;i!S.

al(,)

C,IIH:':Pll"!

~n.icrvinc ;¡

jllH

e·

~,,:d;ly

uf plplil

an~

1,Ii

~1I1"n~

all the

m"~dl·lnrl.

rcl t·

tll'O: 1,. lile ".·l lIlle

01'

Ih: ",Ihno;e.

Vec,p.l

cO:lIl'l:ri.

[:(,,)

:Ir':hll\~ m!:11 'tnl~:tl~(',1

lb.!

fltme

l'udult,

cOl1fl.tnd t

tl(oI W~

,¡101l1 WII I,

h.tdcnnrl'll'h·¡F;~

tu dv:

g··r.~r.d

l!n·

d.n.

I.I";!:

and

t":~I (C~

lr.td

..:

~vi:J I,~

(Olllhl,

\;P~11

ex–

ll11.I1I::'J,I,

t~ II~ I:I .I';~I ;-~r

fI:

!.','i

t~ ~!·;~C'!.:1O:3

Ib:il'

f'il".¡;~