The party who remits a bill is by the supposition debtor to him to whom the remittance is made ; and after the ex planation just given, it will be obvious that it would be required of him to ac knowledge his liability by making him self a party to the instrument. The bill therefore purchased by him would not be, as has been above supposed, a direc tion to pay the remittee, but to pay the remitter or his order; and hence it hap pens, as was said in the commencement, that the party to whom the bill is made payable, is sometimes called the remitter.
To obviate the inconvenience that may result from bills being lost, it became usual to draw them in sets; that is to say, two or more parts of each bill were drawn, and described as the 1st, 2nd, 3rd, and so on, each containing a condition that it should be payable only while the others remained unpaid. But this practice of drawing in sets is made available for an other purpose. The payee having indorsed and paid away one part, frequently remits another part to some agent or correspond ent at the place of the drawee's residence, to be by him presented for acceptance, with a direction added, by way of memo randum, to the bill, that, when accepted, it is to be held for the use of the person who shall duly present the other part or parts for payment at maturity. The ad -vantage of this arrangement is obvious : if the bill be accepted, it is held, accord ing to the direction, till maturity : if re fused, it is protested, and notice is given to the drawer. Upon this protest the drawer may be called upon. to give se curity for the due payment of the bill at the expiration of its currency ; or, as oc casionally happens, some correspondent of the drawer at the place upon which the bill is drawn accepts it for his honour, and thereby places himself in the situation of the original drawee, being liable as ac ceptor to all parties subsequent to the drawer. Such an acceptance is called an acceptance supra protest, or for honour, and may be made at any time during the currency of the bill, and on behalf of any party who is liable upon it after default made by the drawee. The following il lustration will show the use of a Bill of Exchange.
A person in London has a payment of 10001. to make in Paris. Instead of re mitting the money, he goes to an ex change-broker, and purchases from him a bill on Paris equivalent to that sum. The bill will be payable in francs ; and it will be necessary to ascertain how many francs are equal to 1000/. By the mint
regulations between England and France, 11. sterling of English money is equal to 25 francs, 20 cents, which is therefore the nominal or standard par of exchange be tween the two countries. According to this scale, then, 10001. in London would be worth 25,200 francs in Paris. But the par is fixed on the supposition that the currencies of the two countries respec tively are uniformly of the weight and purity established by the Mint, whereas the coin is often debased by alloy or at trition, and the relative value undergoes a corresponding alteration. This deviation however is well known, and may be re garded as comparatively constant. But other circumstances, which are not con stant, affect the ratio of value. When, for instance, any considerable portion of the circulating medium of either of the two countries between which the exchange is to be effected consists of a paper cur rency, the standard is materially affected by the quantity of paper in circulation. A redundancy of paper money has inva riably the effect of depreciating the stan dard, or, in other words, of raising the value of the standard coin as compared with the same nominal sum in paper money. This effect is temporary only when the paper is convertible into specie on demand ; if inconvertible, it is both permanent and considerable. Thus at one period of the late war, the English guinea was worth 26s. in money, esti mated according to the value of the 11. sterling in bank notes. At that time therefore the English pound would fall far below the Mint standard of 31. 17s. mid. per ounce, and a proportionate effect would be produced on the rate of ex change with any other anintry in which the standard was maintained. Taking, as before, the instance of France, the par would vary, other things remaining con stant, from 25 francs to somewhere about 19 francs, or 10001., in a Bank of England note, would buy a bill on Paris, not for 25,200 francs, but for about 19,000 francs only. But the same cause might be ope rating in France also, in which case the calculation would be still further compli cated by a comparison of the depreciation in the one country with that in the other. The variation here taken for an example is an extreme case, but fluctuations the same in kind, though less in degree, are still of continual occurrence, an i must be carefully taken into account in all calcu lations as to the price of bills.