Upon settlements, do not come under the phrase money. Mr. Fullarton's own shewing money consists of those instruments only by which debts are discharged, balances adjusted, and transactions finally closed: and, therefore, Mr. Fullarton, unless he should choose to continue to contradict himself, must admit that bank notes are, and that bills of exchange, cash credits, and cheques are not money." 17. We have now given sufficient extracts to shew the chaos of conflicting and contradictory opinions which prevailed. Not a single witness had the remotest idea of the true legal meaning of the word Currency. And we must now point out the necessary logical consequences to which the doctrines of these persons lead. Currency, should possess But how can money, or value is changing from Mr. NORMAN said that money, or fixed value, and be a perfect numerator. any thing, possess fixed value, when its hour to hour?-An instrument of credit may preserve an equality of value with respect to money, but not with respect to anything else, unless it is expressed to be payable in it. He said that he meant by a numerator that which measured the value of other commodities with the greatest facility. Why does a promise to pay £50 measure the value of things with less facility than £50 itself? It is not a little amusing to find the celebrated phrase of the Roman Catholic Church-Quod semper, quod ubique, quod ab omnibus, starting up and meeting us in a discussion on Currency. In Lord Overstone's opinion money and Currency are identical, and include the coined metallic money, and the paper notes promising to pay the bearer coin on demand; and, he says, that the characteristic of their being money is, that they are received equally at "all times, between all persons, and in all places." For the sake of shortness, let us designate this phrase by 3A, from the three alls in it. He excludes Bills of Exchange from the designation of Currency, because "they do not possess that power of universal exchangeability which belongs to the money of the country." This definition is fatal to Lord Overstone's own view. In fact, if it be true, there is no such thing as money or Currency at all. In the first place, it at once excludes the whole of bank notes. The notes of a bank in the remote district of Cumberland, would not be current in Cornwall; therefore they are not 3A; therefore they are not Currency. Again, the notes of a bank in Cornwall would not be current in Cumberland; therefore they are not Currency. Similarly there are no country bank notes which have a general Currency throughout England; therefore no country bank notes are 3A; therefore no country bank notes are Currency. Till within the last fifty years or so, Bank of England notes had scarcely any Currency beyond London and Lancashire; in country districts a preference was universally given to local notes; therefore Bank of England notes were not 3A; they had not a power of "universal exchangeability;" therefore they were not Currency. Bank of England notes would, even now, not pass throughout the greater part of Scotland. If, therefore, the test of 3A and "universal exchangeability" be applied, the claims of all bank notes to be considered as Currency are annihilated at once. The acceptance of a Baring, or a Rothschild, would be received in payment of a debt by a far larger circle of persons than the notes of an obscure and remote country bank. But the universality of Lord Overstone's assertion is fatal to his argument in other ways. On the Continent, silver is the legal standard of value; in England, silver, like copper, is merely coined into small tokens, called shillings, &c., which are made to pass current above their natural value, and are only legal tender for a very trifling amount, hence it cannot be used in the adjustment of all transactions; therefore it is not 3A; therefore it is not Currency. There are other countries where gold is not a legal tender, therefore it fails to satisfy Lord Overstone's test, therefore it is not Currency. If, then, the test proposed by Lord Overstone be considered as correct, it is easy to see that there is no substance or material whatever that will not fail under it; and, therefore, there is no such thing as Currency. The fact is, that the only difference between a Bill of Exchange and a Bank Note is, that the former is a promise of a deferred payment, and the latter that of an immediate one, and there is less risk in taking the latter than the former. From these circumstances, a Bank Note possesses a greater degree of circulating power than a Bill of Exchange. But, in the Midland Counties of England, it used to be quite common for the banks to issue the Bills of Exchange they had discounted with their own indorsement upon them. In which respect they were in every way equivalent to Bank Notes; moreover, there is not the same inducement to put a bill into circulation as a Bank Note, because the former increases in value as the day of payment approaches, and it is unprofitable to keep a note idle. But it is to the last degree unphilosophical to maintain that these two obligations are of different natures, because they are adapted to circulate in different degrees. 18. Every commercial lawyer would at once perceive the fundamental fallacy of the reasons why Colonel Torrens and others maintain that Bank Notes are Currency, and that Cheques and Bills of Exchange are not. They suppose that bank notes pass without indorsement, and that bills of exchange do not. Even if that were true, it would not be any valid ground for the distinction, because such a thing would in no way affects the nature of the instrument. It is wholly untrue to suppose that bank notes and money are the only things which close transactions. By the table given above it is seen that upwards of 95 per cent. of commercial payments and receipts were made by Messrs. Morrison and Co. in instruments of credit, other than bank notes. But it is a very great mistake to say that bank notes pass without indorsement and bills of exchange do not. At the time the Bank of England was founded, it was supposed to be illegal for any such thing as promissory notes to pass by assignment. The negotiability of bank notes had to be provided for by the Act. It was enacted, that all the Bank's bills obligatory and of credit, made or given to any person, might, by indorsement of such person, be freely assigned to any person who should voluntarily accept them, and so by such assignees toties quoties by indorsement thereon, and all such assignees might sue thereon in their own names. The assignment of the Goldsmiths' notes, or the private bankers' notes, was held to be illegal much later than this. In 1703 it was decided that no promissory notes were assignable or indorsable over within the custom of merchants. In 1704, the Act was passed which allowed promissory notes to be assigned by indorsement like Bills of Exchange. It is true that the 1 Ch. 7, Sec. 1, § 26. custom of indorsing Bank of England Notes, and, it is probable, country bank notes too, soon fell into disuse, but that makes no difference in the law of the subject. It is also an error to suppose that Bills of Exchange require an indorsement at each transfer. A Bill of Exchange may be made payable to bearer, and then it requires no indorsement at all. Bills, however, are generally drawn payable to order, and then they require that the payee should indorse them; but he may do that without making himself liable on them, as is done in many cases. After the first indorsement in blank, the Bill is payable to bearer, and may be passed by mere delivery, in all respects like a Bank Note. "I see no difference," said Lord Mansfield, "between a note indorsed in blank, and one payable to bearer." "And," says Mr. Justice Byles,1 "a transfer by mere delivery, without indorsement, of a Bill of Exchange, or Promissory Note, made or become payable to bearer, does not render the transferor liable on the instrument to the transferee. "And it is conceived to be the general rule of the English law, and the fair result of the English authorities, that the transferor is not even liable to refund the consideration, if the bill or note so transferred by delivery, without indorsement, turns out to be of no value by reason of the failure of the other parties to it. For the sending to market of a bill or note payable to bearer without indorsing it, is primâ facie a sale of the bill. And there is no implied guarantee for the solvency of the maker, or of any other party. "If a bill, or note, made or became payable to bearer, be delivered without indorsement, not in payment of a pre-existing debt, but by way of exchange for goods, for other bills or notes, or for money transferred to the party delivering the bill at the same time, such a transaction has been repeatedly held to be a sale of the bill by the party transferring it, and a purchase of the instrument, with all risks, by the transferee. 'It is extremely clear,' said Lord Kenyon, that if the holder of a bill sent it to market without indorsing his name upon it, neither morality, nor the law of this country, will compel him to refund the money for which he sold it, if he did not know at the time that it was not a good bill.' So, when A. gave a bankrupt, before his bankruptcy, cash for a bill, but refused to allow the bankrupt to 1 A Treatise on the Law of Bills of Exchange, &c., 8th, Edit., p. 146. 6 indorse it, thinking it better without his name, and afterwards, on dishonour of the bill, proved the amount under the commission, the Lord Chancellor ordered the debt to be expunged, observing, that this was a sale of the bill. So, if a party discounts bills with a banker, and receives, in part of the discount, other bills, but not indorsed by the banker, which bills turn out to be bad, the banker is not liable. Having taken them without indorsement,' says Lord Kenyon, he has taken the risk on himself. The bankers were the holders of the bills, and, by not indorsing them, have refused to pledge their credit to their validity; and the transferee must be taken to have received them on their own credit only.' So where, in the morning, A. sold B. a quantity of corn, and, at three o'clock in the afternoon of the same day, B. delivered to A., in payment, certain promissory notes of the Bank of C., which had then stopped payment, but which circumstance was not at the time known to either party, Bayley, J., said, 'If the notes had been given to A. at the time when the corn was sold, he could have no remedy upon them against B. A. might have insisted on payment in money, but, if he consented to receive the notes as money, they would have been taken by him at his peril.' Such seems the general rule governing the transfer by delivery, not only of ordinary Bills of Exchange and Promissory Notes, but also of Bank Notes. Nor is there any hardship in such a rule, for the remedy against the transferor may always be preserved by indorsement, or by special contract." While it has always been acknowledged that the delivery of a bill without indorsement, in exchange for a valuable consideration, is a sale of it, it has frequently been said that, if the bill be indorsed, it is only a loan. We have pointed out the ambiguity of the word loan already. It is often said that a banker lends his customer money on the security of bills. But this is an inaccurate mode of statement. What the banker does is to buy a debt due to his customer, and, when he indorses the bill, his customer gives him a limited warranty of its sound ness. If the banker lent his customer the money, it would be his duty to repay it. But that is not so. It is the acceptor's business to pay the bill, and, if he do not do so, the banker may, by giving his customer immediate notice, and making a demand, make his customer take back the bill, and repay the money. But |