on the last day of February, to which the days of grace must, of course, be added; and, therefore, the bill becomes due on the third of March.

Form of a Bill of Exchange.

Exchange for 5.000£ Sterling.

Boston, September 25, 1835.

At ninety days sight of this, my first Bill of Exchange, (second and third of the same tenor and date unpaid,) pay to James Ayer, or order, five thousand pounds sterling, with or without further advice from me.

Messrs. Dana & Hyde,

Merchants, Liverpool.

ACCEPTING BILLS.

John L. French.

When a bill is presented for acceptance, it is generally left till the next day; and the common way of accepting, is, for the drawee to write his name at the bottom, or across the body of the bill with the word accepted.

When two or more persons are in partnership, the acceptance of one binds all the others, if the bill concerns their joint trade; but if it should be made known to the person, who receives the bill, that it concerns the acceptor only, in a distinct interest, he alone, as acceptor, can be sued.

A clerk or servant may accept a bill for his master, when he has authority for that purpose; or, if he usually transacts business of this nature for him; and his acceptance binds the master. But if the bill be drawn nominally on the servant, directing him to place it to the account of his master, and if the servant should accept it generally, without specifying that he does it for his master's account, the acceptance binds the servant only, and not his employer.

When a bill is drawn for the account of a third person, and is accepted as such, and he fails without making provision for its payment, the acceptor must discharge the bill, and can have no recourse against the drawer.

A bill may be accepted to be paid at a longer period than is mentioned in the bill, or to pay a part of the sum only; such an acceptance is binding on him who made it; but the holder is at liberty to take it as it is offered, or to act as if acceptance had been entirely refused.

INDORSING BILLS.

Bills, payable to bearer, are transferred by simple delivery, and without any indorsement; but, in order to transfer a bill,

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payable to order, the holder must express his order of paying to another person, which is always done by an indorsement.

An indorsement may be blank or special. A blank indorsement consists only of the indorser's name, and the bill becomes then transferable by simple delivery; a special indorsement orders the money to be paid to some particular person, or to his order; a blank indorsement may always be filled up with any person's name, so as to make it special.

An indorsement may take place at any time after the bill is issued, even after the day of payment is elapsed.

A person, who receives a bill with a blank indorsement, may take it as indorsee, negotiate it again, or demand payment on his own account, or he may receive the money as agent, or for the account of the indorser; and the latter, notwithstanding his indorsement, may still appear as holder, in an action against the drawer or acceptor.

A special indorsement need not contain the words, to order, and the bill is negotiable; it may, also, be restrictive, giving authority to the indorsee to receive the money for the indorser, but not to transfer the bill again to another.

An indorsement for part of the money only, is not valid, except with regard to him, who makes it; the drawer and acceptor are not bound by it.

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When the holder of a bill dies, his executors may indorse it but by so doing, they become answerable to their indorsee, personally, and not as executors.

PROTESTING BILLS

When acceptance or payment has been refused, the holder of the bill should give regular and immediate notice to all the parties, to whom he intends to resort for payment; and if, on account of unnecessary delay, a loss should be incurred by the failure of any of the parties, the holder must bear the loss.

With respect to the manner in which notices of non-acceptance, or non-payment are to be given, a difference exists between inland and foreign bills.

For foreign bills a protest is indispensably necessary; thus, a public notary is to appear with the bill, and to demand either acceptance or payment; and, on being refused, he is to draw up an instrument, called a protest, expressing that acceptance or payment has been demanded, and refused, and that the holder of the bill intends to recover any damages, which he may sustain in consequence. This instrument is admitted in foreign countries, as legal proof of the fact.

It it customary, as a precaution against accidents or miscarriage, to draw three copies of a foreign bill, and to send them by different posts. They are denominated the first, second, and

third of exchange; and, when any one of them is paid, the rest become void and of no value. When the acceptor of a bill becomes insolvent, or absconds before the term of payment is expired, the holder may cause a notary to demand better security, and, on that being refused, to protest the bill for want of it. În such cases, however, the most general practice is to wait the regular time, till the bill becomes due.

The damages incurred by non-acceptance and non-payment, besides interest, consist, usually, of the exchange, or reëxchange, commission, and postage together, with the expenses of protest, and interest. The exchange is reckoned according to the course at sight, from the place where the protest is made, to the place where the bill is to be paid by the drawer; and, if it be not paid there, the exchange is then reckoned from the same place, to that, where the bill is paid, and also, double commission. The interest commences from the day, when the demand was made.

RECOVERING BILLS.

The drawer, accepter, and even indorser of a bill, are equally liable to the payment of it; and though the holder can have but one satisfaction, yet, until such satisfaction is actually had, he may sue any of them, or all of them, either at the same time, or in succession, and obtain judgment against them all, till satisfaction be made. Proceedings cannot be staid in any action, but on payment of the debt and costs, not only in that action, but in all the others in which judgment has not been obtained; and though the principal sum should be paid by one of the parties, still costs may be recovered in the several actions against

the others.

When acceptance is refused, and the bill is returned by pro test, an action may be commenced immediately against the drawer, though the regular time of payment be not arrived. His debt, in such a case, is considered as contracted the moment the bill is drawn. Thus, if before the bill is returned, the drawer should become a bankrupt, the debt was contracted before the commission of bankruptcy took place.

Nothing will discharge an indorser from his engagement, but the absolute payment of the money; not even a judgment recovered against the drawer, or any previous indorser, or any execution against any of them, unless the money be paid in con

sequence.

INLAND EXCHANGE, OR DRAFTS.

By Inland Exchange, is understood, the act of remitting bills to places in the same country; by which means, debts are discharged more conveniently than by cash remittances.

Suppose, for example, A, of Boston, is creditor to B, of Baltimore, $100, and C, of Boston, debtor to D, of Baltimore, $100, 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. Here, by a transfer of claims, the Boston debtor pays the Boston creditor; and the Baltimore debtor the Baltimore creditor; and no money is sent from one place to the other. The same would take place if D, of Baltimore, drew on C, of Boston, and sold his bill to B, of Baltimore, who should send it to A, of Boston; the effect, in either case, being merely a transfer of debtors and creditors.

NOTE. - In this operation, A is the drawer and seller, B the drawce and accepter, C the buyer and remitter, and D the payee, if his name be mentioned in the bill; and he is the holder when he receives the bill from A. When D, or any other holder, presents the bill for acceptance or payment, he is called the presenter.

By the foregoing example, it appears, that reciprocal and equal debts, due between two places, may be discharged without remitting specie; and it may be supposed, that such an operation is of equal convenience to all parties concerned; but when the debts are unequal, the advantage must be different, as the obligation of remittance is no longer mutual, because the debtor place must pay its balance, either by sending cash, or bills; and as the latter mode is generally preferred, an increased demand for bills must be the consequence, which enhances their price, as it would that of any other article of sale, or purchase.

PAR OF EXCHANGE.

The Par of Exchange, may be considered under two general heads; viz. the intrinsic par, and the commercial par, each of which admits of suborbinate divisions and distinctions.

The intrinsic par is the value of the money of one country, compared with that of another, with respect both to weight and fineness.

The commercial par is the comparative value of the moneys of different countries, according to the weight, fineness, and market prices of the metals.

Thus, two sums of different countries are intrinsically at par, when they contain an equal quantity of the same kind of pure metal; and two sums of different countries are commercially at par, when they can purchase an equal quantity of the same kind of pure metal.

COURSE OF EXCHANGE.

The Course of Exchange, is the variable price of the money of one country, which is given for a fixed sum of money of another country; the latter is called the certain, and the former, the uncertain price, as before stated.

When the market price of foreign bills is above par, the exchange is said to be favorable to the place, that gives the certain for the uncertain.

It should, however, be recollected, that when the exchange is favorable to a place, it is only so to the buyers and remitters of bills, but it is unfavorable to the drawers and sellers.

Thus, the interest of the remitter is identified with that of the place where he purchases the bill, and the interest of the drawer with that of the place where his funds are established, and on which he draws.

It is natural to inquire, why such prices are considered favorable, or unfavorable, if the drawers and remitters, whose interests are opposite, are natives of the same country. The usual answer is, that when the exchange is against a place, it becomes the interest of remitters to pay their foreign debts in specie instead of bills, and the exportation of the precious metals is often considered a national disadvantage.

The fluctuations of exchange are occasioned by various circumstances, both political and commercial. The principal cause is generally stated to be the balance of trade; that is, the difference between the commercial exports and imports of any one country with respect to another. Experience, however, shows, that the exchange may be unfavorable to a country, when the balance of trade is greatly in its favor; for the demand for bills must chiefly depend on the balance of such debts as come into immediate liquidation; that is to say, on the balance of pay

ments.

Besides, it does not follow, that large exports are always successful, or quick in their returns; and even should it be the case, the balance of payments may still be unfavorable from political causes.

When any alteration takes place in the coin or currency of a country, the exchange will, of course, vary so as to keep pace or correspond to such alteration. This, however, cannot be considered a change in the price of bills, but in the money in which they are bought or sold.

In times of peace, the course of exchange seldom remains long unfavorable to any country, at least, beyond the expense that might be incurred by the transportation of the precious metals; for bullion is considered the universal currency of merchants, and exchange gives it circulation, and thus tends to maintain the level of money throughout the commercial world.