Bill of exchange

“ The authority to issue bills of exchange not being one expressly given by statute, can only arise as an incident to the exercise of some other power. When it becomes the duty of an officer to pay money at a distant point, he may do so by a bill of exchange, because that is the usual and appropriate mode of doing it. So, when an officer or agent of the government at a distance, is entitled to money here, the person holding the fund may pay his drafts. ”

“ The delivery of a bill of exchange signed and indorsed in blank only authorizes the receiver, as between himself and the drawer and indorser, to fill it up in conformity with the authority given him. If there has been no agreement, the authority is general ”

“ The first section of the act provides, 'that upon all bills of exchange hereafter drawn in this state, on any person, corporation, company, or society, in any foreign country, and regularly protested, the owner or holder of such bill, or the person or persons, company, society, or corporation, entitled to the same, shall have a right to receive and recover so much current money as will purchase a good bill of exchange of the same time of payment, and upon the same place, at the current exchange of such bills, and also fifteen per cent. ”

“ A bill of exchange, when merely discounted, and kept in the portfolio of the discounter until it falls due, does not perform the functions or supply the place of money, but is itself bought and sold for money. It is no more currency than the public funds, or any other securities. But when a bill drawn upon one person is paid to another (or even to the same person) in discharge of a debt or a pecuniary claim, it does something for which, if the bill did not exist, money would be required: it performs the functions of currency. ”

“ The United States must rest on the same obligations as a private drawer when a bill is drawn by an authorized agent. Congress call this a bill. When they settle with the bank it is called a bill of exchange. 4 Story's Laws, 2556, act of 3d March, 1837. ”

“ In that event the check and the promissory note and the bill of exchange, operating as orders to the book-keepers of banks and clearinghouses, would effect transfers of debits and credits the world over so that all Trade would be barter systematized—plain barter freed from the obstructions incident to barter in primitive Economic circumstances. Except for the use of “pocket cash,” Money pieces of every kind, whether metal or paper, would be like children’s toys to grown-ups. ”

“ Commercial rules everywhere require that to fix the liability of the drawer of a bill of exchange or the indorser of a bill or note there must be a legal presentment of the instrument to the acceptor or maker, or payment must be demanded of such a party on the day the instrument becomes payable. ”

“ And whenever, in conducting any of the fiscal affairs of the government, the drawing a bill of exchange is the appropriate means of doing that which the department, or officer having the matter in charge, has a right to do, then he can draw and bind the government in doing so. ”

“ We infer, from all the cases in our books, notwithstanding many of them are contradictory to subsequent decisions, that the practice now, both in England and the United States, does not require more to be done, in the presentment of a bill of exchange to an acceptor for payment, than that the demand should be made of a merchant acceptor at his counting-room or place of business ”

“ Formerly cheques were not allowed to be drawn for a less sum than £10, but now there is no restriction as to the amount. The profits of the bank are chiefly made by dis- counting bills of exchange, which is done to an enormous extent. A bill of exchange is an in- strument by which a party who is owed money by another party, and accords to him the benefit of delay in payment, for a fixed period, draws on him in a form of order to that effect. ”

“ As a matter of policy, English law does not concern itself with foreign revenue laws. For English purposes, therefore, it is immaterial whether a bill drawn abroad is stamped in accordance with the law of its place of origin or not. On arrival in England it has to conform to the English stamp laws.
Maturity.—A bill of exchange is payable on demand when it is expressed to be payable on demand, or at sight, or on presentation or when notice for payment is expressed. ”

“ We have not been able to find a case, either in our own or in the English reports, in which it has been expressly ruled that a merchant, acceptor of a foreign bill of exchange, having a notorious place of business, has been permitted to close it up during the business hours of the day, thus avoiding the obligation of his acceptance on the day of its maturity, and then that he was allowed to claim that the bill ought to have been presented to him for payment elsewhere than at his place of business. ”

“ Findley and Van Leer, 2 Peters 589, 591; decided on great consideration; it has been the established doctrine of this court, that a bill of exchange drawn in one of the states of this union, on a person in another, is aforeign bill, and to be treated as such; and that in this respect they are to be considered as states foreign to each other, though they are otherwise as to all the purposes of their federal constitution. ”

“ In point of fact, the merchant who has the amount to pay will even then pay for it by a bill. When a person has a remittance to make to a foreign country, he does [pg 412] not himself search for some one who has money to receive from that country, and ask him for a bill of exchange. In this, as in other branches of business, there is a class of middle-men or brokers, who bring buyers and sellers together, or stand between them, buying bills from those who have money to receive, and selling bills to those who have money to pay. ”

“ The purchase, discount, or sale of a bill of exchange, payable at another place, at not more than the current rate of exchange on sight drafts, in addition to the interest, shall not be considered as taking or reserving a greater rate of interest than that permitted. ”

“ How rapid its development will be can not be foretold but the development itself is certain."
The Federal Reserve Board in its circular of July 15, 1915, defines the term "trade acceptance": "A bill of exchange—drawn to order, having a definite maturity and payable in dollars in the United States, the obligation to pay which has been accepted by an acknowledgment, written or stamped, and signed, across the face of the instrument, by the company or firm, corporation or person upon whom it is drawn ”

“ When a bill of exchange drawn to at least five pounds is not paid on demand at the time it is made payable, the person who accepted it may make a protest in writing before a notary public, which shall be served on the maker of such bill, who must pay it and all interest and charges from the date of the protest. ”

“ Next, the Government guaranteed the payment of all bills accepted by British houses, giving them a reasonable time to collect them. Great Britain had assets of some 4,000,000,000l. of good foreign securities, and some 13,000,000,000l. worth of collieries, mines, factories, etc., at home; to allow its credit to remain doubtful for some 350,000,000l., all or nearly all owing to British subjects, would have been criminal. By these three steps the unimpeachable character of the British bill of exchange had [Pg 242] been guaranteed, and a financial catastrophe, probably without parallel, avoided. ”

“ Where the relationships between the foreign and the American houses are close, there is almost no limit to the number of times an original bill may be renewed. As for the constantly increasing amount of the drafts which have to be drawn, that is taken care of by the interest on the investment carried. ”

“ And, while these cases are referred to by way of illustration merely, it seems to us clear that, whatever the legislative reason for the discrimination between the subjects of the first and of the second section, that reason manifestly requires checks to be placed in the same category as bills of exchange. Again, we are of opinion that checks might properly be held comprised in the word 'orders,' as associated with bills of exchange, rather than otherwise. Orders are frequently a kind of informal bill of exchange, and a check is, of course, an order for the payment of money ”

“ In the case of a "payment" bill, the credit of the man on whom it is drawn is not good enough to entitle him to such a privilege, and the only way he can get actual possession of the goods is to actually pay the draft under a rebate-of-interest arrangement. All bills drawn on banks are naturally "acceptance" bills; and being discountable and thus immediately convertible into cash abroad, command a better rate of exchange in the New York market than "payment" bills, which may be allowed to run all the way to maturity before a single pound sterling is paid on them. ”

“ In either case, the holder, other things being equal, acquires full title to the instrument, the correct commercial rule being that whoever lawfully and in good faith becomes the holder of a valid negotiable bill of exchange or promissory note before maturity, by direct indorsement or by delivery when indorsed in blank or made payable to bearer, assumes the responsibility, if not paid when it falls due, of entering protest or of making demand and giving notice of non-payment as the case may require ”

“ And the said duties shall be chargeable upon each and every bill of exchange and bill of lading, without respect to the number contained in a set.
Sec. 2. Foreign bills of exchange not to be stamped after they are drawn.And be it further enacted, That from and after the said thirty-first day of March, it shall not be lawful for any supervisor, or other person employed for the stamping of vellum, parchment or paper, after they are drawn. ”

“ A plan almost identical with this is called ‘kite-flying.’ A few needy men, acquaintances, in position above the lowest classes, put their heads together to ‘raise the wind’ by manufacturing fictitious bills of exchange. As its name signifies, a bill of exchange represents a trade transaction. It is not a genuine bill unless there is exchange of some kind between two persons; work done, services rendered, or goods sold, by one person to another. ”

“ But the kind of liability incurred, whether that of indorser, original promisor, or surety, by indorsing a note or guarantying payment, is not the same in all the states. There are sundry other points in the law relating to promissory notes, on which the statutes and judicial decisions are not uniform in all the states.
Chapter LXI. Bills of Exchange; Interest; Usury. §1. A bill of exchange is a written order or request to a person in a distant place, to pay a third person a certain sum of money. The following is a common form:
$1,000. ”

“ When France owed to England more than the equivalent of what England owed to France, a bill for 2500 francs would be worth less than 100l., or would be at a discount.
When bills on foreign countries are at a premium, it is customary to say that the exchanges are against the country, or unfavourable to it. In order to understand these phrases, we must take notice of what "the exchange," in the language of merchants, really means. It means the power which the money of the country has of purchasing the money of other countries. ”

“ Buying and remitting commercial long bills is, however, no pastime for an inexperienced man. Entirely aside from the question of rate, and profit on the exchange end of the transaction, there must be taken into consideration the matter of the credit of the drawer and the drawee, the salability of the merchandise specified in the bill of lading, and a number of other important points. ”

“ Later on, in the chapter on the actual money-making operations of the foreign department, the risk in buying various kinds of bills will be fully explained, but in passing it may be mentioned that "clean" bills are of such a nature that bankers will touch them only when drawn by the very best houses. With a documentary bill, the banker holds the bill of lading, and if there is any trouble about the acceptance or payment of a draft, can simply seize the goods and sell them. ”

“ It is not to be denied, that in the extensive and varied fiscal operations of the government, bills of exchange are found to be valuable instruments, of which it has the right to avail itself whenever they may be necessary. In the transfer of immense sums of money from one part of the country to another, and in the payment of dues at distant points, where they should properly be paid, it uses, as it ought to use, this time-honored mode of effecting these purposes. ”

“ All the provisions and operations of government must be presumed to contemplate things as they really are. The institution of a bank has also a natural relation to the regulation of trade between the states, in so far as it is conducive to the creation of a convenient medium of exchange between them, and to the keeping up a full circulation, by preventing the frequent displacement of the metals in reciprocal remittances. Money is the very hinge on which commerce turns. ”

“ In order to remedy the inconvenience to which this disadvantageous exchange must have subjected their merchants, such small states, when they began to attend to the interest of trade, have frequently enacted that foreign bills of exchange of a certain value should be paid, not in common currency, but by an order upon, or by a transfer in the books of a certain bank, established upon the credit, and under the protection of the state, this bank being always obliged to pay, in good and true money, exactly according to the standard of the state. ”

“ An alleged custom to remit either in exchange or in currency at somebody's option means nothing more than a practice sometimes to remit by exchange and sometimes not, and therefore lacks the essential qualities of certainty and uniformity to make it a custom of accepting payment by exchange draft binding upon the owners of the check. ”