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; FORM OF A BILL OF EXCHANGE.
New York, Nov. 4, 1834. Exchange for £3000 sterling.
At thirty days sight of this, my first of Exchange, (second and third of the same tenor and date not paid), pay to Robert N. Foster, or order, Three Thousand Pounds Sterling, with or without further advice from me.
Edwin D. HARPER. Messrs. Knox and FARNHAM,
INLAND EXCHANGE relates only to remitting Bills from one commercial place to another in the same country; by which means debts are discharged more conveniently than by cash remittances.
Suppose, for example, A of New Orleans is creditor to B of Boston 1000 dollars, and C of New Orleans is debtor to D of Boston 1000 dollars; both these debts may be discharged by means of one Bill. Thus, A draws for this sum on B, and sells his Bill to C, who remits it to D, and the latter receives the amount, when due, from B. Thus, by a transfer of claims, the New Orleans debtor pays the New Orleans creditor, and the Boston debtor the Boston creditor, and no money is sent from one place to the other. This business is usually conducted through the medium of Banks, which are in the habit of buying both foreign and inland Bills of exchange, and transmitting them to the places on which they are drawn for acceptance.
Inland Bills of Exchange are sometimes called Drafts; and the following short form of the instrument is adopted.
Boston, Dec. 8, 1834. Three months after date, pay to the order of Charles S. Hooper, Five hundred dollars 50 cents, value received, and charge the same to account of
HANNUM & LORING. TO Stephen FROTHINGHAM,
Some explanation of mercantile language used in relation to Bills of Exchange seems necessary, that the learner may have a clear idea of the questions, which will be given for practice.
When a merchant in the United States draws on his banker in London, his draft is styled “ Bill on London” or - United States on London;” and if he sells his Bill at more than a dollar for 54 d. sterling, the exchange is said to be above par; and if he sells at less than a dollar for 54 d. sterling, below par: if a merchant in London draws on his banker in the United States, his draft is styled “ London on United States;" and if he sells his Bill at more than 54 d. sterling for the dollar, the exchange is said to be above par; and if he sells at less than 54 d. sterling for the dollar, below par.
If the merchant in London draws on his banker in Paris, it is “ London on Paris,” or “ London on France.” If the merchant in Charleston, S. C. draws on his banker in New York, it is “Charleston on New York.” &c.
GREAT BRITAIN. In Great Britain, accounts are kept in pounds, shillings, . pence, and farthings, Sterling.
The par value of the United States dollar is 4 s. 6d. sterling; therefore, the dollar is equal to do of a pound sterling. Hence, any sum of sterling money, (the shillings and pence, if any, being expressed in a decimal,) may be reduced to Federal money, by multiplying by 40 and dividing by 9: and, any sum in Federal money may be reduced to sterling money, by multiplying by 9 and dividing by 40. Or, if sterling money be increased by } of itself, the sum expresses the same value in the old currency of New England: and, conversely, if the old currency of New England, be decreased by 1 of itself, the result is the expression in sterling money.
1. United States on London. Reduce £784 14 s. · 101 d. sterling to Federal money, at par.
2. London on United States. Reduce 3487 dollars 75 cents to sterling, at par.
3. United States on London. Reduce £2006 11 s. sterling to Federal money; exchange at 4 per cent. below par.
4. London on United States. Reduce 4287 dollars 50 cents to sterling; exchange at 4 per cent. above par.
5. London on United States. Reduce 3646 dollars 50 cents to sterling; exchange at 2 per cent. below par.
6. United States on London: Reduce £4109 11s. 10d. sterling to United States currency; exchange at 7 per cent. above par.
7. United States on London. Reduce £ 5129 15 s. 6 d. sterling to Federal money; exchange at 5 per cent. above par.
The law assimilating the currency of Ireland to that of England, took effect in January 1826. All invoices, contracts, &c. are considered there, in law, British currency, unless otherwise expressed.
8. United States on Dublin (Ireland). Reduce £1834 2s. 10 (!. sterling to Federal money; exchange at 4 per cent. above par.
FRANCE. Accounts were kept in France previous to 1795, according to the old system, in livres, sous, and deniers.
12 deniers=1 sol or sou;
6 livres =1 ecu or crown, silver. By the new system, accounts are kept in francs, decimes, and centimes.
10 centimes=1 decime.
10 decimes =1 franc. The value of the franc is 18 cents in Federal money.
80 francs =81 livres. 9. United States on France. Reduce 7232 francs 38 centimes to Federal money; exchange at 1 dollar for 5 francs 30 centimes.
- 10. France on United States. Reduce 4093 dollars 80 cents to money of France; exchange at 5 francs 30 centimes for the dollar.
11. France on United States. Reduce 1834 dollars 65 cents to French currency; exchange at 5 francs 40 centimes for a dollar.
12. United States on France. Reduce 20328 francs 67 centimes to Federal money; exchange at 1 dollar for 5 francs 38 centimes. .
13. United States on France. Reduce 12893 francs 27 centimes to Federal money; exchange at 1 dollar for 5 francs 33 centimes.
HAMBURGH. Accounts are kept here in marks, schillings or sols, and pfenirgs, Lubs.
12 pfenirgs =1 sol or schilling, Lubs;
3 marks =1 reichsthaler or rix dollar specie. Accounts are also kept, particularly in exchanges, in pounds, shillings, and pence, Flemish.
12 pence or grotes=1 shilling.
20 shillings =1 pound, Flemish. The word Lubs originally meant money of Lubeck, which is the same with that of Hamburgh, and the term is intended to distinguish this money from the Flemish denominations, and also from the money of Denmark and other neighboring places.
The mark Lubs is worth 2; shillings Flemish, or 32 grotes; consequently the sol Lubs is 2 grotes Flemish, and the shilling Flemish 6 schillings Lubs.
Banco or bank money, in which exchanges are reckoned, and currency, are the two principal kinds of money.
Banco consists of the sums of money deposited by merchants and others in the bank, and inscribed in its books; which sums are not commonly drawn out, but are transferred from one person to another in payment of a debt or contract.
Current money, or currency, consists of the common coins of the city, in which expenses are mostly paid.
The bank money is more valuable than currency, and bears a premium varying from 18 to 25 per cent. This
premium is called the agio. For instance, when the agio is 20 per cent. 100 marks banco aré valued at 120 marks currency.
The mark banco is valued in the United States at 33} cents.
14. United States on Hamburgh. Reduce 1148 marks, 5 schillings, 4 pfenirgs banco to Federal money; exchange at 33 cents per mark banco.
15. Hamburgh on United States. Reduce 1245 dollars 75 cents to money of Hamburgh; exchange at 3 marks banco per dollar.
16. United States on Hamburgh. Reduce 6194 marks 12 schillings banco to Federal money; exchange at 34 cents per mark banco,
17. United States on Hamburgh. Reduce 8246 marks 8 schillings banco to Federal money; exchange at 35 cents per mark banco.
18. Hamburgh on United States. Reduce 757 dollars 90 cents to money of Hamburgh; exchange at 1 mark banco for 33 cents.
AMSTERDAM AND ANTWERP. In these places accounts were formerly kept in florins, stivers, and pennings; or in pounds, shillings, and pence, Flemish.
16 pennings=1 stiver,
20 stivers =1 florin or guilder. In Flemish, 12 grotes or pence, or 6 stivers=1 shilling,
20 shillings, or 6 florins
2. florins, or 50 stivers = 1 rix dollar. By the new system, adopted in 1815, accounts are kept throughout the kingdom of the Netherlands in forins or guilders, and cents.
100 cents=1 florin or guilder. The par value of the florin, in Federal currency, is 40 cents.
19. United States on Amsterdam. Reduce 13790 florins 15 stivers to Federal money; exchange at 36 cents per florin.