Good bills, as already observed, may be always discounted. Accordingly, any man whose credit is good may at any time raise money upon a bill drawn, ao• cepted, or indorsed by himself. If his credit be doubtful he may still procure cash by the same expedient, but he will have to pay a premium or rate of dis count proportioned to the increased risk. Among needy men instances are not un frequent of discounts procured by these means at the exorbitant rate of 20 or 30 per cent. But a still more common practice is the negotiation of what are called by the significant name of accom modation bills. A trader unable to meet his liabilities applies to a friend whose credit is better than his own, to accept, or in some other way to become a party to, a bill drawn for the purpose : the trader undertakes to provide the funds necessary for paying it when due, and generally gives in return his own acceptance of another like bill, known in the mercan tile world as a cross acceptance. When one or more names have thus been ob tained sufficient to give currency to the bill, it is discounted, and the money ap plied to the necessities of the trader. As this bill falls due, the same operation is repeated in order to raise money, until the system of expedients failing at last, as sooner or later it inevitably must, the rain of the insolvent trader himself is accomplished, and not 'infrequently draws along with it others who, unfortunately or imprudently, may have become parties to these unsubstantial representatives of value. Of the more serious mischiefs of this dangerous practice, such as the temp tation to forgery by the use of fictitious names as drawers or payees, it is perhaps useless to speak, because few men at first seriously contemplate the commission of a crime, but are rather drawn into it by circumstances not foreseen or not appre ciated; but the reflect-on that it is a foolish and improvident practice—that, in addition to the loss of credit, which, once perceived (and how can it fail to be perceived ?), it is sure to occasion, there is the certain expense of stamps and higher rates of discount, and moreover a double liability in respect of every shilling for which cross acceptances are given—may perhaps have some effect in deterring honest men, however necessi tous, from having recourse to this fatal expedient.
Viewed as a legal instrument, a bill of exchange, as well in its original forma tion as in its successive transfers, is an assignment of a debt, by which the right of the original creditor to sue for and ob tain payment is transferred to the holder for the time being. The Roman law
presented no obstacles to such a substi tution ; and in those countries therefore which had adopted the civil law, the negotiation of bills found no impediment. But it was a principle of the common law of England, that the assignment of things not in possession, such as a debt of right, being in truth the assignment of suits at law, might be converted into a means of oppression, and the validity of such trans fers was not recognised by it. But in the case of bills of exchange the principle of law yielded to general convenience; and the negotiability of foreign bills was re cognised by the English law. It was not, however, until three centuries later, that the negotiability of inland bills was re cognised by the courts, unless on proof of some special custom of trade ; but ex pediency finally prevailed, and at the present day, as well by the common law as by the statutes of 9 & 10 Win. HI. c. 17, and 3 & 4 Anne, c. 9, they stand on the same general footing as foreign bills.
It is this assignability, vesting in the holder a right of action against the ori ginal parties, which chiefly distinguishes a bill of exchange from every other form of legal contract. Another and scarcely less important privilege is, that though a simple contract debt, and as such requir ing a consideration to give it legal effi cacy, the consideration is presumed until the want of it be shown. It is available therefore in the hands of a bond fide holder, upon merely formal proof of title by the signature of the party to be charged : that is to say, it is unnecessary to prove value given, unless it be first shown on the other side that the bill is in some stage or other tainted with an ille gality, and the bond fides is assumed un til it shall be made to appear that the holder was, at the time of taking it, privy to that illegality. From this rule an ex ception is made as to bills given for a gambling debt, which by statute are void even in the hands of an innocent holder. The rules of law applicable to bills of exchange have been settled by numerous decisions, and it is of great importance to mercantile men to be acquainted with them ; but the consideration of them pro perly belongs to a legal treatise.