Middlemen in English Business 389 



bidding for business competitive, but they were licensed by the gov- 

 ernment and put under bond.^ Their brokerage in the middle of the 

 period ranged from one-quarter to one per cent;'^ the settlement of 

 the Dutch Jews in London had the effect of reducing the rates. ^ 

 Foreign bills of exchange were from their very beginning the most 

 binding and most effectual paper-security in use amongst merchants.* 

 They derived their force, not from statutory law, but from the general 

 practice and consent of merchants. A sort of recognized universal 

 law of exchange rendered them the most obligatory commercial paper. 

 The obligation of inland bills of exchange depended more upon legis- 

 lative enactments." In England the common law did not fully accord 

 foreign bills that high regard which they enjoyed abroad and in 1755 

 it was said to be no extraordinary thing to see merchants at law for a 

 year or two about the payment of exchange.^ The most advantageous 

 form of bills of debt was the bill of dry-exchange (cambia sicca), and 

 it was used much in the seventeenth century by merchants. It con- 

 tained no mention of the sum loaned, only of the sum to be paid, and 

 therefore lent itself to usury. The sum was to be repaid at a certain 

 time and place, and, if not paid punctually, it, being a bill of exchange, 

 had preference before all other papers. It was negotiable.? There 

 was, therefore, a legal reason for the rapid rise of foreign exchange in 

 the century studied, i.e., foreign bills were drawn for use in the domes- 

 tic trade because of their good quahty as commercial paper. 



Beyond doubt, the dangers besetting the carrying of money on 

 English roads promoted the rise of inland exchange.^ The rise of 

 banks, especially country banks, aided the transmission of money: 

 they transmitted money by means of agencies, branches, and the 

 circulation of their notes. The country banker kept a reserve with 

 his London correspondent against which and into which bills were 

 drawn. London firms established branch banks in the country and 

 made use of their common fund to receive or pay out at either main 



1 Beawes, Lex Mer. Red., 455; Postlethwayt, Diet., s. v. Royal Exchange, 

 Broker; Scarlett, StOe, 10; Justice, Gen. Tr., 19; 8-9 Wm. Ill, Cap. 32. 



2 Justice, Gen. Tr., 28. 



^ "Further Considerations," 50-1. 



* Scarlett, Stile, 266 et seq.; Justice, Gen. Tr., 66; Hewitt, Treatise, 44. 



'' Forbes, Bills, 2-3. 



« Hewitt, Treatise, 44-5. 



' Scarlett, Stile, 266 et seq.; see Molloy, De Jure 287, for negotiability. 



8H.M.,Eng. Glory, 11-12. 



