GENERAL AVERAGE.

345. AVERAGE is a term of commerce signifying a contribution by individuals, where the goods of a particular merchant are thrown overboard in a storm, to save the ship from sinking; or where the masts, cables, anchors, or other furniture of the ship are cut away or destroyed, for the preservation of the vessel. In these and like cases, where any sacrifices are deliberately made, or any expenses voluntarily incurred, to prevent a total loss, such sacrifice or expense is the proper subject of a general contribution, and ought to be ratably borne by the owners of the ship, the freight, and the cargo, so that the loss may fall proportionably on all. The amount sacrificed is called the jettison.

346. Average is either general or particular; that is, it is either chargeable to all the interests, viz., the ship, the freight, and the cargo, or only to some of them. As when losses occur from ordinary wear and tear, or from the perils incident to the voyage, without being voluntarily incurred; or when any particular sacrifice is made for the sake of the ship only, or the cargo only, these losses must be borne by the parties immediately interested, and are consequently defrayed by a particular average. There are also some small charges, called petty or accustomed averages, one-third of which is usually charged to the ship, and two-thirds to the cargo.

No general average ever takes place, except it can be shown that the danger was imminent, and that the sacrifice was made indispensable, or was supposed to be so, by the captain and officers, for the safety of the ship.

347. In different countries different modes are adopted of valuing the articles which are to constitute a general average. In general, however, the value of the freightage is held to be the clear sum which the ship has earned after seamen's wages, pilotage, and all such other charges as come under the name

of petty charges, are deducted; one-third, and in some cases one-half, being deducted for the wages of the crew.

The goods lost, as well as those saved, are valued at the price they would have brought, in ready money, at the place of delivery, on the ship's arriving there, freight, duties, and all other charges being deducted indeed, they bear their proportions, the same as the goods saved. The ship is valued at the price she would bring, on her arrival at the port of de livery. But when the loss of masts, cables, and other furniture of the ship is compensated by general average, it is usual, as the new articles will be of greater value than the old, to deduct one-third, leaving two-thirds only to be charged to the amount to be contributed.

Examples.

1. The vessel Good Intent, bound from New York to New Orleans, was lost on the Jersey beach the day after sailing. She cut away her cables and masts, and cast overboard a part of her cargo, by which another part was injured. The ship was finally got off, and brought back to New York.

Damage of the goods of B by the jettison,
Freight of the goods cast overboard,
Cable, anchors, mast, &c., worth - $300
Deduct one-third,

100

Expenses of getting the ship off the sands,

Pilotage and port duties going in and out

of the harbor, commissions, &c.,

Expenses in port,

Adjusting the average,

Postage,

Total loss,

ont}

100

25

4

1

$1186

ARTICLES TO CONTRIBUTE.

Goods of A cast overboard,

$500

Value of B's goods at N. O., deducting freight, &c.,

1000

hence, each loses 10 per cent. on the value of his interest in the cargo, ship, or freight. Therefore, A loses $50; B, $100; C, 50; D, $200; E, $500; the owners of the ship, $280-in all, $1180. Upon this calculation, the owners are to lose $280; but they are to receive their disbursements from the contribution viz., freight on goods thrown overboard, $100; damages to ship, $200; various disbursements in expenses, $180; total, $480; and deducting the amount of contribution, they will actually receive $200. Hence, the account will stand:

The owners are to receive

$200

A loses $500, and is to contribute $50; hence, he receives

450

B loses $200, and is to contribute $100; herce, he receives

Total to be received,

$750

C,

50

C, D, and E, have lost nothing, and are to pay

Total actually paid,

$750

COINS AND CURRENCIES.

348. COINS are pieces of metal, of gold, silver, or copper, of fixed values, and impressed with a public stamp prescribed by the country where they are made. These are called specie, and are generally declared to be a legal tender in payment of debts. The Constitution of the United States provides, that the value of gold and silver coins shall be fixed by act of Congress.

The coins of a country, and those of foreign countries having a fixed value established by law, together with bank-notes redeemable in specie, make up what is called the Currency.

349. A Foreign coin may be said to have four values: 1st. The intrinsic value, which is determined by the amount of pure metal which it contains :

2d. The Custom-house, or legal value, which is fixed by law : 3d. The mercantile value, which is the amount it will sell for in open market:

4th. The exchange value, which is the value assigned to it in buying and selling bills of exchange between one country and another.

Let us take, as an example, the English pound sterling, which is represented by the gold sovereign. Its intrinsic value, as determined at the Mint in Philadelphia, compared with our gold eagle, is $4.861. Its legal or custom-house value is $4.84. Its commercial value, that is, what it will bring in Wall-street, New York, varies from $4.83 to $4.86, seldom reaching either the lowest or highest limit. The exchange value of the English pound, is $4.444, and was the legal value before the change in our standard. This change raised the legal value of the pound to $4.84; but merchants, and dealers in exchange, preferred to retain the old value, which became nominal, and to add the difference in the form of a premium on exchange, which is explained in Art. 365. For the values of the various coins, see Table, page 406

EXCHANGE.

350. EXCHANGE is a term which denotes the payment of money by a person residing in one place to a person residing in another. The payment is generally made by means of

bill of exchange.

351. A BILL OF EXCHANGE is an open letter of request from one person to another, desiring the payment to a third party named therein, of a certain sum of money to be paid at a specified time and place. Of a bill of exchange three copies are made, and are called a set of exchange. They are sent by different ways to the drawee, so that in case one is lost, another may reach him. There are always three parties to a bill of exchange, and generally four:

1. He who writes the open letter of request, is called the drawer or maker of the bill;

2. The person to whom it is directed, is called the drawee; 3. The person to whom the money is ordered to be paid is called the payee; and

4. Any person who purchases a bill of exchange is called the buyer or remitter.

352. Bills of exchange are the proper money of commerce. Suppose Mr. Isaac Wilson, of the city of New York, ships 1000 bags of cotton, worth £6000, to Samuel Johns & Co., of Liverpool; and at about the same time William James, of New York, orders goods from Liverpool, of Ambrose Spooner to the amount of six thousand pounds sterling. Now, Mr Wilson draws a bill of exchange on Messrs. Johns & Co., in the following form, viz. :

Exchange for £6000.

New York, July 30th, 1846.

Sixty days after sight of this my first Bill of Exchange (second and third of the same date and tenor unpaid), pay to