CHAPTER V. COMMERCE MONEY BILLS OF EXCHANGE - LEGAL ADVICE AND USEFUL SUGGESTIONS REGARDING BILLS OF EXCHANGE AND PROMISSORY NOTESGUARANTEE AND SURETYSHIP-LETTERS OF CREDIT-STAMPS-INTERESTTABLES OF INTEREST, AT FIVE PER CENT. LICENSES- THE LAW OF LANDLORD AND TENANT-LEASES-REMEDIES TO RECOVER RENT-HOW TO BECOME MILLIONAIRES OPINIONS OF MILLIONAIRES REFLECTIONS ON THE EARLY CLOSING MOVEMENT. In a commercial community, the object of all stock is, to be turned into money; and the legitimate object of all money is to increase our enjoyments, and extend our happiness. Here then we will consider Commerce,-to the successful pursuit of which the wealth of Great Britain is chiefly to be attributed. COMMERCE. COMMERCE may be defined as the exchange of commodities for other articles, or for some representative of value, for which other commodities can be procured. At first commerce consisted merely in exchanging the surplus of some particular article of produce which an individual possessed beyond what he found necessary for his own use, for the similar surplus of some other article possessed by another individual, which kind of traffic is now generally called barter. By the introduction of metallic and paper money, the operations of commerce were much facilitated, while the increase of population rendered them of greater magnitude, improvements in the art of navigation extended their boundaries, the advancement of science and the increase of luxury multiplied the objects of trade, and the various duties and regulations established by different governments rendered the subject more complicated to individuals, but at the same time of increased importance to the state. The advantages of commerce began to engage the attention of mankind at a very early period. About 1300 years after the flood, the commerce of the Phoenicians had attained to a considerable extent; they possessed manufactures, entered into commercial partnerships, made fong voyages, had resident agents in foreign countries, and had adopted the practice of lending money on bottomry.* The Greeks and Romans, particularly the latter, carried on an extensive trade, considering the imperfect state of navigation. The reign of Augustus was particularly favourable to commerce, as the general peace which then prevailed, enabled the merchants to pursue their concerns unmolested. At this period, Malta was famous for its number of workmen, and its various manufactures, particularly of fine cloths. The inhabitants were the descendants of the ancient Phoenicians, and, like them, pursued commerce with eagerness. Under Tiberius, we find * Bottomy is a contract by which money is borrowed on the joint security of a ship and its owners, repayable on the ship terminating her voyage successfully. the Romans extending their protection to the north; and the town of Havern, the most ancient in Friesland, founded. The cultivation of vines in France, Spain, and Portugal seems to have increased about this time, and from the inhabitants neglecting to cultivate corn, and turning much of their arable land into vineyards, we may presume the latter afforded considerable profit. About the year 50, the capital of England was first described as a place famous for merchandise. In the 9th century, the Venetians carried on a very beneficial commerce with the Levant, whence they brought spices, silks, drugs, and fruits from the East in great abundance, and supplied the greater part of Europe with these commodities. The crusades contributed materially to the revival of commerce during the 12th and 13th centuries, by introducing an acquaintance with the luxuries of the East, which multiplied the objects of trade. About this time, the commercial towns bordering on the coast of the Baltic, finding their trade much interrupted by pirates, entered into an agreement for mutual support and assistance. This union, which became very celebrated under the title of the Hanseatic League, at first consisted only of twelve towns, but finally of upwards of seventy, including all the principal commercial towns of Europe, and embracing nearly all the foreign trade then carried on. The invention of the mariner's compass, which enabled trading vessels to make much longer voyages, and led to the discovery of a passage to the East Indies by the Cape of Good Hope, with the settlements made on the coast of Africa, in Arabia, and in India, affected very materially the commerce of the Mediterranean and of the Hanse Towns, and threw the principal part of the foreign trade into the hands of the Portuguese. The discovery of America opened a new and extensive field for commercial adventure, whilst the establishment of manufactories produced new articles of trade. The persecutions of the Spaniards drove great numbers of industrious workmen from the Netherlands into England and other countries, who introduced several manufactures into England, and greatly improved others which were already established. While the different branches of Britain's manufactures were thus improving, its colonial possessions in the East and West Indies were greatly increased, and England was enabled to rival the Dutch not only in manufactured goods, but also in the principal articles of colonial produce. During the last century, the trade of Holland rapidly declined; while the decided naval superiority maintained by Great Britain, extended and secured its commerce, and raised it to a magnitude unparalleled in the history of the world. The natural advantages arising from the situation of this country, its formidable navy, and extensive colonial possessions, particularly in the East Indies, have favoured and protected its commercial intercourse; while the accumulated capital of individuals has gradually enabled them to give very considerable credit to their customers, which has been of much importance in increasing the commerce of Great Britain to its present extent. In the reign of Edward III. the countries with which England had commercial intercourse were chiefly France, Spain, Portugal, Flanders, Brabant, and Germany. The total value of commodities exported in one year was reckoned at £294,184, and of all the imports at only £38,970, sums that are immeasurably less than the value of the goods now entered in one day. The exports consisted of wool of the value of £277,606, leather £96, and cloths £16,260. The imports were, cloths of the value of £11,083, wax £815, wine £3,841, linen cloth, mercery, and grocery £22,943. The policy of the times was by no means calculated to encourage trade: our merchants were very jealous of foreigners participating in their commercial profits, though it was to such persons they were indebted for the little knowledge of trade they possessed; and the government being at times still more jealous in this respect than individuals, many injudicious restrictive laws were made: amongst others, an Act was passed in 1429, prohibiting persons from selling goods to aliens, except for ready money. It was, however, soon found necessary to repeal this prohibition, and permission was then given to sell to aliens upon giving not more than six months' credit. Charles II. imposed a duty of 5 per cent. on goods exported as well as imported, on domestic manufactures as well as foreign merchandize, and double taxes on all goods when exported by aliens. In 1672, however, the duties payable by aliens on the exportation of all goods of British manufacture were repealed. This salutary principle was still more extended in 1700, by removing the imposts previously laid on every kind of woollen goods exported, and on corn, meal, and bread. It was, however by the law "For the further encouragement of manufactures," passed in 1722, that every one was allowed to export, duty free, all kinds of merchandise, the produce of Great Britain, except a few particular articles: while drugs and other commodities used for dyeing were also to be permitted to be imported duty-free. This period forms a memorable epoch in commercial policy; and the subsequent increase of trade is the best proof of the wisdom of the regulations then adopted; as since they have been still further practically confirmed in the adoption of Free Trade. The various articles of foreign commerce being subject to great fluctuations in their value, a book of rates was adopted at the Custom-house in 1696, for the purpose of valuing uniformly the several articles imported and exported; and consonantly to these estimates, we are able to tell the total amount of the imports and exports of Great Britain when such knowledge is desired. MONEY. In the earliest ages the ordinary way of traffic, no doubt, was by exchanging one commodity for another; but in process of time it was found necessary to have some common standard, according to which all other things should be estimated. The first account we have of money is in the time of Abraham, who paid four hundred shekels for a burying-place. Money being a common measure for reducing merchandise to a balance, the Greeks adopted its use and established it by law; it was called pecunia by the Latins, either because the wealth of those days consisted in cattle (pecus), or, according to Pliny, that their coin was first stamped with the figure of a cow; they also called it moneta, because when the Romans wanted money, Juno admonished them to use justice, and there should be no want of money; hence she received the title of Juno Moneta, and money was coined in her temple. In process of time, money was made a goddess, called Dea Pecunia, under the figure of a woman holding a balance in one hand and a cornucopia in the other. Numa Pompilius made money of wood and of leather. The first silver money coined by the Romans was in the year of Rome 484, and their first golden coinage in 546. Among the ancient Britons iron rings or iron plates were used for money; among the Lacedæmonians, iron bars quenched in vinegar. Seneca observes that anciently stamped leather was current as money; a circumstance which occurred in England in the time of the barons' wars: and the Hollanders coined great quantities of pasteboard in 1574. The impression on coins has been various in different ages and countries. As to the figure of the coin, it is either round, as in England; multangular, or irregular, as in Spain; square, as in some parts of the East Indies; or nearly globular, as in others. Money, at present, is either real or imaginary. Real money includes all coins, whether of gold, silver, copper, or the like; such as sovereigns, pistoles, ducats, &c., &c. Imaginary money, or money of account, is that which never existed, or, at least, which does not exist in real specie, but is a denomination invented or retained to facilitate the stating of accounts, by keeping them still on a permanent basis, not to be changed like currency, which the authority of the sovereign sometimes raises or depresses according to the exigences of the state. Coin denotes all the several stamps and species of money in any nation. In earlier times,—when the necessity of traffic put men upon the expediency of having money, and metals, on account of their firmness, cleanness, and durability, were chosen for that end,-each person cut his metal into different sizes and forms, according to the quantity to be given for any merchandise, or according to the demand of the seller or the quantity stipulated between them. It was usual then to go to market laden with metal, in proportion to the purchase to be made, and furnished with instruments for proportioning it, and with scales for dealing it out according as occasion required. By degrees it was found more convenient to have pieces ready weighed; and as there were different weights required, all those of the same weight were distinguished with the same mark and figure. At length the growing commerce of money beginning to be disturbed with frauds both in the weights and the matter, the public authority interposed, and hence arose the first stamps or impressions of money, to which succeeded the name of the moneyers, and at length the effigies of the prince, the date, legend, and other precautions, to prevent the alteration of the specie; thus were coins completed, and gradually brought to their present perfection. Notwithstanding the great accommodation which a coinage gives us in facilitating the transactions of the shopkeeper, it would still be attended with considerable trouble and inconvenience if, in large transactions, it had to be transported from one part of the country to another. Its weight alone would be a great drawback in its favour, as a vehicle of exchange; hence the origin of a paper currency and other lighter means by which large speculations may be carried on. Amongst these are BILLS OF EXCHANGE. A bill of exchange is a written order or request, addressed by one person to another, desiring him to pay a certain sum of money at a time therein specified to a third person or to his order, or it may be made payable to bearer. In the former case the instrument is negotiable by endorsement; in the latter by delivery only. The holder of a negotiable instrument, originally payable to bearer, may nevertheless restrain its general negotiability by a special endorsement; and a special endorsee may by a general endorsement make the instrument payable to bearer. Although writers are considerably divided in opinion with respect to the origin of bills of exchange, an inference drawn from the 5th Ric. 2, St. 1, 2, appears to warrant the conclusion that foreign bills were introduced into this country prior to the year 1381. Upon the first introduction of these instruments, our Courts would only give effect to bills made between merchants, strangers, and English merchants; this, however, was soon extended to all traders, and finally to all persons indiscriminately. Bills of exchange are divided into foreign and inland: the former are those which pass from one country to another, and the latter are transacted by parties all of whom are resident in the same country. Foreign bills are generally drawn in sets, to obviate the danger of navigation; inland bills are sometimes, but very rarely, drawn in this mode. Besides bills of exchange there are what are called accommodation bills, with which the shopkeeper should try and have as little to do as possible. They are bills or notes, for which no value has been given, and are usually made use of by distressed persons to raise money on, for the purpose of supporting their credit. £50. Form of an ordinary Inland Bill. London, January 1st, 1853. Three months after date pay to me, or order, fifty pounds, for value received. THOMAS WATTS. JAMES JOHNSON. To Mr. James Johnson, Merchant, Liverpool. This form admits of the following variations according to circumstances. Instead of "Three months after date," it may be "at sight," or at such a time" after sight," or at such a specified time, or on demand;" and the instruction to pay may be "to A. B., or order.” £50. Form of a Promissory Note. London, January 1st, 1853. Three months after date I promise to pay to Mr. Thomas Watts, or order, fifty pounds, for value received. JAMES JOHNSON. The variations above noticed, in regard to a bill, are all applicable, so far as they are consistent with the value of the document. £600. Form of a Foreign Bill. New York, August 1st, 1853. Sixty days after sight of this first of exchange (second and third unpaid), pay to the order of Messrs. John Smith and Sons, six hundred pounds sterling, value received; and charge to account with or without advice of Walter Whyte. To John Robertson, Liverpool, payable in London. JOHN ROBERTSON, payable at the office of The name of the payer, that is, the person to whom the bill is made pay |