390 Tradesman and Merchant — Commercial Population 



or branch bank.^ If a bank had credit for its notes over a wide area, 

 money could be transmitted by these notes within that area. For 

 safety the notes were often cut into two parts, one of which was held 

 until the receipt of the other was acknowledged. Bank-post bills 

 drawn at seven days sight performed the same function. 



After 1697 inland bills of exchange enjoyed all the power and 

 validity of the most formal commercial instrument. At the same 

 time they were the most easily negotiated and transmitted. No cum- 

 brous deeds, lawyers, witnesses, or special securities were attached 

 or required. Their security increased with every indorsement. 

 They were used to transfer debts; to provide extra credit; to fix the 

 time and conditions of the payment of a debt in a form least apt to 

 litigation; and to afford an easy way of giving a guarantee. They 

 were drawn by the wholesalers upon retailers, by producers or manu- 

 facturers upon wholesalers, by retailers upon consumers, and against 

 consignee factors." 



Inland exchange promoted commerce in two ways: (a) it reduced 

 the price of goods indirectly by reducing the cost of conveying back 

 the money received in return. This reduction exceeded the simple 

 cost of carriage by the amount of the premium to cover the risks of 

 transporting specie. The cost of bringing back this money must be 

 regarded as a part of the cost of production, and in that way influ- 

 enced price, (b) It increased the rapidity of the circulation of capital. 

 Payment could be realized at once by discounting bills received 

 drawn on the consignee and further business be done while the con- 

 signment was in transit; otherwise, in the interim of transit of the 

 consignment and of the return money business would suffer a lapse. 



Inland bills were not properly supported by law till the enactments 

 of William and Anne.^ These acts were forced by the exigencies of 

 commerce, for inland bills had lost their force and were not punctually 

 and regularly paid.'' English tradesmen had long suffered from the 

 weakness of their law for the transference of bills of debt,^ and put 

 forward strong arguments for making all bills of debt assignable,^ as 



^ Inland exchange was done with difficulty before country banks arose; see Gary, 

 Discourse, 28-9 and Essay on Nat. Cr., 173. See examples of drafts drawn by 

 provincial manufacturers on London bankers about 1690, in V. C. H., Durham, 

 II, 315-6. 



- See Defoe, Com. Eng. Tr., I, 278-82. 



••* 9-10 Wm. Ill, Cap. 17; 3-4 Anne, Cap. 9; 7 Anne, Cap. 2.S. 



^ Eorbes, Bills, 170; Justice, Gen. Tr., 67-73. 



^ Child, Brief Observations, 2. 



* For example, sec "Grand Concern,'" 56-8; PoUexfen, Discourse, 66. 



