Foreign Exchanges

Abstract

Part of the subject consists in considering the way in which the exchanges are adjusted or effected by means of paper documents. I have briefly pointed out in the Chapter on Foreign Bills of Exchange how in early times trade necessarily took the form of Barter.¹ The caravan carried goods on way and exchanged them for other goods, or it was the custom for the ship to take out a cargo and sell it and bring back another. And money need not be carried. But that is barter: but in going to trade by money you come to this that every cargo sent would have to be paid for by money. Therefore the device of bills of exchange has been hit upon, which is simply a mode of making the exports pay for the imports and reducing the trade back again to the form of barter. In the case of a bill of exchange we have to distinguish the drawer, i.e. the person who draws the order, from the drawee. The latter has the bill presented sooner or later. Then by accepting or disowning it he allows that he has the debt to pay or not. Then the ways in which these bills are usually [drawn:]