IMAGE EVALUATION TEST TARGET (MT-3) ^- ^* A ^# ^^ 1.0 11.25 1^12.8 ■|50 *"■ 2.5 2.2 I.I f ^ IIIIM 1.8 \A ill 1.6 VQ v2 ^)}. oi p% .^^ .-^ />^ §i. 7W w ///. Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14S80 (716) 873-4503 m^ 6^ CIHM/ICMH Microfiche Series. CIHM/ICMH Collection de microfiches. Canadian Institute for Historical IVticroreproductions / Institut canadier: de micrcreproductions historiques n Technical and Bibliographic Notes/Notes techniques et bibliographiques The Institute has attempted to obtain the best original copy available for filming. Features of this copy which may be bibliographically unique, which may alter any of the images in the reproduction, or which may significantly change the usual method of filming, are checked below. L'Institut a microfilmd le meilleur exemplaire qu'il lui a 6X6 possible de se procurer. Les details de cet exemplaire qui oont peut-dtre uniques du point de vue bibliographique, qui peuvent modifier une image reproduite, ou qui peuvent exiger une modification dans la mdthode normale de filmage sont indiqu6s ci-dessous. — Jt Coloured covers/ ."tilJ Couverture de couleur □ Covers damaged/ Couverture endommag^e ~~7\ Covers restored and/or laminated/ D D D n Couverture restaur6e et/ou pellicul6e Cover title missing/ Le titre de couverture manque Coloured maps/ Cartes g^ographiques en couleur Coloured ink (i.e. other than blue or black)/ Encre de couleur (i.e. autre que bleue ou noire) Coloured plates and/or illustrations/ Planches et/ou illustrations en couleur Bound with other material/ Relie avec d'autres documents □ Coloured pages/ Pages de couleur D Pages damaged/ Pages endommagdes r~7 Pages restored and/or laminated/ D D D D Pages restaurdes et/ou pelliculdes Pages disco!oured, stained or foxed/ Pages d6color6es, tachetdes ou piqu^es Pages detached/ Pages ddtachdes Showthrough/ Transparence Quality of print varies/ Quality in^gale de I'impression Includes supplementary material/ Comprend du matdriel supplementaire D D Tight binding may cause shadows or distortion along interior margin/ La reliure serree peut causer de I'ombre ou de la distortion le long de la marge intdrieure Blank leaves added during restoration may appear within the text. Whenever possible, these have been omitted from filming/ II se peut que certaines pages blanches ajoutdes lors d'une restaurarion apparaissent dans le texte, mais, lorsque cela 6tait possible, ces pages n'ont pas 6x6 filmdes. □ Only edition available/ Seule Edition disponible D Pages wholly or partially obscured by errata slips, tissues, etc., have been refilrned to ensure the best possible image/ Les pages totalement ou partiellement obscurcies par un feuillet d'errata, une pelure, etc., ont 6t6 filmdes 6 nouveau de fapon 6 obtenir la meilleure image possible. D Additional comments:/ Commentaires suppldmentaires: This item is filmed at the reduction ratio checked below/ Ce document est film6 au taux de reduction 'ndiqu6 ci-dessous. 10X 14X 18X 22X 26X 30X 12X 16X 7 20X 24X 28X 32X The copy filmed here hns be' n reproduced thanks to the generosity of: Library if the Public Archives of Canada L'exemplaire filmd fut reproduit grAce d la g6n6rosit6 de: La bibliothdque des Archives publiques du Canada The images appearing here are the best quality possible considering the condition and legibility of the original copy and in keeping with the filming contract specifications. Les images suivantes ont 6x6 reproduites avec ie plus grand soin, compte tenu de la condition et de la nettet6 de l'exemplaire film6, et en conformity avec les conditions du contrat de fiimage. Original copies in printed paper covers are filmed beginning with the front cover and ending on the last page with a printed or illustrated impres- sion, or the back cover when appropriate. All other original copies are filmed beginning on the first page with a printed or illustrated impres- sion, and ending on the last page with a printed or illustrated impression. Les exempiaires originaux dont la couverture en papier est imprimde sont film6s C^^^^..'^-^ 2f '-■ '^'f'^-<-tj/' II I III 1 1 1 11 Commercial Law; ^; w^i-iN A^l! E4RLY INCH'KNTS liiauqi' . -^Cctture bj) W^ Intigr fubgc iiibi^, .\ r CO NOON I . ■. ;>>-'^;MNG l/T the JoiiNTY OF 'M'i;»i.l-.SKX ! \\V SCHOOJ. JANUARY, 1886. COMMERCIAL LAW; ITS UKIGLN AND EAKl.Y INCIOILNTS. The system of Commercial Jurisprudence is founded on the princij^les oflf natural justice and equity, or in other words, upon the reason and conscience, and cultivated judgment of man. In tracing its development from the crude material of early times, the student ^'i]\ note as he advances in this most interesting study, how certain, well-recognized, and far reaching principles were practically applied from time to time to the numerous, ever, changing and complicated transactions of everyday life ; how standards were recognized and adopted by which men in the exercise of ordinary judgment could readily test the soundness of those principles ; how in the course of time, common sense illumed by the principles of truth, and morality softened or dis- placed rules and regulations strictly technical, until at length the system of Commercial Jurisprudence became, as we see it in mod- ern limes, more free from artificial subtleties, and more directly inttaeuced by the princip'es of natural equity, than any other branch of juris[)rudence. It seeks to enforce the obligations of conscience ; it sanctions such regulations as in the cause of trade have been found beneficial. Its precepts are founded on com- mon sense, and it speaks in language that all men of business can readily understand. In my endeavor to give the student a general outline of a subject so wide and comprehensive as that selected for the present lecture, much must necessarily be omit- ted, and much, owing to the necessity for condensation, be imper- fectly explained, my object will be atiained, however, if 1 can give the student even a dim and distant outline of certain prominent and interesting features of that system, from its crude, early stage, to 'ts present state of high development. A sound legal education requires the student to commence by cultivating an intimate acquaintance with the governing and guiding principles underlying the judicial system, and this is si)ecially api)licable with respect to Commercial Law. Four-fifths ot the judici-il business of the country, directly or indirectly involve questions of mercantile interest, and this is not sur]jrising when w-e con- sider the vast and complicated ramifications of trade and com- merce, man's l>u.sy brain is constantly at work, and ever on the alert to find an opening for enterprise and cai)ital, we see everywhere around us hosts of Merchants, Manufacturers, Bank- ers, Brokers, Carriers, Loan and Insurance Societies, to say nothing of that large and constantly growing class of incorporated bene- volent, or. ijtiasi lienevolent, societies, with high-sounding titles and magnificent jjretensions, we can, therefore, understand the necessity for the student to grasp as soon as possible and endea- vor to master the j^rinciples that govern and control this vast and complicated machine. To be a successful commercial lawyer, quick and acute in grasping and solving mercantile problems, not only requires a clear head and sound judgment, but a broad and comprehensive conception of first principles, the mere case lawyer, no matter how great his, industry or careful his research, is always liable to error from trusting to imaginary and incorrect analogies, no profession requires so much strong common sense as that of law, a man may I)e an accomplished scholar, have great ability, great imagination, and great induitry, but without that same strong common sense he wil' never make a great lawyer. The number of our courts, each in its order revers- ing the carefully considered decisions of those beneath, the overwhelming array of decided cases in the English, Canadian and American reports, which those courts are required to refer to, the conflicting decisions, the mass of irrelevant material to be waded through, the dissenting judgments and opinions of Judges, the distinguishing of cases, &c., — all this occasionally lands the unfortunate votary of our judicial system in a laby- rinth of difficulties and doubts, out of which it requires a great deal of common sense, indeed, and sharp discrimination to guide him. In view of all this, it is becoming more than ever necessary at the i^resent day, in considering questions, to make sure that you are correct in your governing principles, and then consider 3 the matter in question with reference to those principles. You may then, for the purpose of further guidance or confirmation, go to woriv and spend all tlie time available at the reported cases. The governing principles of our commercial code, so multifarious, in its details and extensive in its application, are. notwithstanding, more simple and harmonious than an ordinary observer would imagine. The practical and enlightened views of a succession of able men in England, led by such as Mansfield, Kenyon, Ellen- borough and Tenterdon, and followed up in more recent times l)y a host of distinguished judges, have constructed out of the crude material of their day and generation, a beautiful system, admirably adapted to the usages of civilized society, the peculiar requirements of our country, and the growing wants of an en- lightened age. Students who take delight in the antiquarian study of old text books, will tind little there on the subject of commercial transactions. In those early times, when the sword was mightier than the pen, mercantile dealings were of small importance, and regarded with contempt by the better class of society. The judicial ntind of the country was engaged in the contemplation of real property, and the peculiar principles governing its transfer and descent, to the exclusion of everything relating to personal property ; but in modern times most com- mendable industry is apparent, and great ability-displayed in the ditTerent compilations relating to that part of the judicial system which I have under review. Still, each treatise appears to be written with reference to some particular class of cases, and want- ing that unity of design between the different classes and branches of the system, without which there cannot be a perfect under- standing of the whole. I shall not attempt, in one lecture, to give a connected outline even of the origin and growth of that great Commercial System which forms the centre of thousands of industries, and absorbs most of the capital of the world at the pre- sent day, as such an undertaking would require a series of lectures. I shall have to confine myself to a rapid sketch of those i)rin- ciples and circumstances which formed the-ori^inal foundation of the Commercial Sysfem. Division of labor was in the first place necessarily attended with an interchange of commodities, being a direct barter in kind of the superfluity of one individual foe that of another. The necessities of the system of barter sug- gested the introduction of some medium of exchange, and cer- tain metals from their durabihiy, and their Httle variations in value, were adoi)ted as tne medium, and such medium received the name of money. From this introduction of money may be dated the origin of trade. In those early days the limited trans- actions by way of barter hardly deserved the name of trade, but by means of the money medium they became sales instead of barter. l"he difficulties attending the conveyance of articles intended for exchange being thus removed, sellers would resort with their commodities to places where there was a i^robability of demand ; hence the establishment of markets and fairs. Transactions at these public markets were the earliest and sim- plest operations of traffic, being bargains for the ])urchase and sale of the different articles, carried out on the spot into immedi- ate effect by delivery on one side and payment on the other. Some commodities being too bulky to be conveniently trans- ported to market, and brought back if unsold, would be disjiosed of by samples, and in such cases an interval would necessarily take place between making the bargain and the delivery which was to complete it, and in this interval luany questions would arise, involving complications between the buyer and seller. As wealth increased, men's wants also increased, and liome com- modities accumulated on the hands of the owners, and thus dis- tant markets were looked for as an outlet for those surplus articles, as well as the centre of supply of those rare and remote articles that were required by the home producers. And thus the traffic of each place and region was pushed beyond the limits of its own neighborhood. Certain tracts of country were better suited to the growth and production of certain articles, while other tracts of country, where the raw material could readily be obtain- ed, became a manufacturing centre. The long intervals between fairs and markets were found to be inconvenient, and the de- mand for all sorts of goods and productions increasing with the wants of the people, itinerant traders, under the name of peddlers, started into existence, and began to sell the productions of' one. district among the inhabitants of another, adding to the first cost such a profit as remunerated them for their labor and risk. The 5 transactions of th( i-iir. and ihc packs of the pedtllets were fol- lowed, and, in a ijrtal measui-c. snperseded by the establishment ofpirin.uu'iit shops. These shoi)kci'n( rs stood between the pro- (hicri ;i ml consumer, ])uying from the former in wholesale, and then retailing at au advance among the inhabitants of their own neighborhood. As wealth and poprJraion advanced, and the demand increased, it became necessary to add to- the stock in each |)articulur article, until at last it became expedient to con- hne the trade to some si)ecific line of goods. So by degrees a body of shopkeepers was created, each dealing in some particnlar commodities, and as tl;e profit cm the articles mainly depended on a speedy return of the cost of production, those who could l)urchase tl.e largest quantities were able to procure them at the cheapest rates. Hence the formation of wholesale dealers, who being possessed of larger capital bought up the stocks of the producer and manufacturer, and disposed of tliem in smaller stocks to the retail dealers. And thus the stei)s between the ])roducers and consumers were continually multiplied. 'These transactions between the owners of the raw material and the manufacturer, and between the manufacturers and whole.mle deaU>rs. and between the wholesale and retail dealers, residmg probably, long distances apart, involved many questions of im- portance in regard to transmission between distant points, which in those early times would be attended with great difticulty, danger and expense. The.se circumstances led to the formation of another class of jiersons, who for a certain compensation undertook the safe conveyance of goods from place to place. This (being long before steam was dreamt of) would take place by means of wagons overland, and by barges on the navigable rivers. As trade and capital increased, lighter vehicles, for more expeditious transmission of lighter goods, were used ; and canals were constructed between districts where the raw material was supplied and the manufacturing centres where it was worked up. The proprietors of those different systems of inland conimunica- tioii were classed indiscriminately under the name of " cominon carriers ". Along the rivers and canals the owners of the soil, as the trade increased, required some compensation for permission to take on board and discharge the cargoes of the vessels that navigated these waters. To avoid the inconvenience and risk of leaving freight exposed on the banks, wharves were constructed and buildings were there erected along llie lines of communication, at which ])laces goods might be deposited for loading or deliv- ery. The proprietors of those ])lares were called wharfingers, who undertook to keep the articles deposited there safe and un- damaged for a reasonable reiriuneration, until they were carried away to their destined places. There away in those early times we may notice the birthplace and origin of that important branch of our judicial system relating lo common carriers and tcharf- ingers- In England the surrounding seas soon became used for the purpose of traffic, and the first efforts of her industry and enler])rise gave rise to her coasting trade, which was rapidly fol- lowed by the construction of " ports ", " quays ", " piers " and " docks ". Some of these not being easily accessible for the larger vessels gave use to tlie employment of another class of men, who were called ^^ lightermen^', who undertook the unload- ing of those vessels, and transporting the cargoes to the docks. Complications soon arose from these sources, and another chap- ter was added to the judicial history of those early times. The spirit of enterprise which induced the expansion of traffic within the boundaries of P'ngland, soon broke through those contracted limits, and gr.isped the commodities of foreign countries. The flax of Ireland, and conse(iuenlly its linens, were found to be better than those of England, while tiie woollen goods of Eng- land were better than those of Ireland, hence an interchange took place of the surplus woollen goods of one for the suri>lus linen fabrics of the other. In the same way an exchange of home products for the wines of France and Portugal, the silks of Italy, the hides and timber of the Baltic,, and so on. Stimulated by wealth and the thirst of gain, commerce extended ; remote lands were sought after, and "depots" established there by a busy and overstocked community. Colonies and plantations were formed, and the civilized world brought closer together, each country contributing its peculiar produces of the soil, or its works of skill, to the opening markets of England. Tea, brought from the remotest nation of the east, sweetened by sugar made in the far west, became the ordinary beverage of all classes in Eng- 7 Inncl, while cottoiiS uianiifactiucd- there were worn by t!ie in- hahiiants of tlit- Uoim'os, and hci wo(,llen gooii., by ih',; inhabit- ants of nations bordering on the Arctic regions. From Brazil, the llast Indies, and the iKJands of the Spanish Main, slie brought the raw material for her cotton goods, and she dyed them with the juice of an nerb she imported from Bengal, and with the blood of an insect reared in Mexico (cochineal). This wonde/- ful traffic and intercourse soon brought to the front another im- portant class of public carriers, viz., the '• shi|)owners "; and, con- nected with these, another class, specially named '• niercliants ". Oiiginally tin same person was shipowner as well as merchant, l)ut the separation took place at a very early period. The ship- owner who brought ])ome his cargo of foreign jjroducts was glad to release liimself from the risk, trouble and delay of dealing them oiu in small portiotis, by disposing of the. whole cargo at an inferior price to someone, who in view of the resulting profit would undertake the job of distributing the cargo, if this speculation answered, the i)urchaser would then employ the owner of the vessel to bring him another cargo of similar com- nioditie This penson's next step would be to establish a con- nection in the foreign market to j)urchase the goods, he supplying the money, and taking upon himself the whole risk of the adventure, and paying the shij^owner a stipulated i)rice for transporting the cargo. The same rules -ipp^lied to the exnort trade. . In this export trade the merchant by degrees stepped in between the producer or manutacturer and the shipowner, and took the risk as well as the profit of the sale in tlie foreign market, and employed the owner of the ship s^imply as his carrier, and the shipowners became what they are io&dy,J>u'f/ic carriers by ;.:afa; and are governed by the same legal principles as carriers by ianJ ; but the relations between the shipowners and merchants are governed by a peculiar code affecting them alone, their engagements are pjenerally the subject of special contracts, attested by formal documents called "Chartf.u Parties". .Sometitnes the whole vessel is taken into the service of the mer- chant for a definite period, sometimes for a particular voyage. In the latter case he either takes the entire temporary control and ownership tipon himself, or, leaving the possession of the vessel 8 to the owner, he has merely the right of stowage for his goods. In the former case he is called the " ihdrterer ",in the latter case the ^^ freighter " Sometimes he merely stipulates for the use of a part of the vessel, paying for the carriage or freight of his goods at so r.i'.ich per ton, in this case no charter party is executed, but when the goods are put o^ board an instrument called a '^ bill of lading'^ is tendenm by tlie shipper to the cai)taia of the vessel for his signature, by this document the captain acknowledges the receipt of the goods on board, and engaf;es to carry them safely and deliver them in good order to the person to whom they are consigned. A counterpart of this bill of lading is immediately transmitted to the consignee, another is left with the master of ihe vessel, and ihe original remains with the shipper. The pro- perty In the goods specified in the bill of lading may be trans- ferred by the proper e idorsement and delivery of this instrument, and the endorsee thereby becomes the owner. This system, simple in its origin, has expanded .nto a most important and complicated branch of oui judicial system, and, apart from the code governing these direct transactions, a host of subordinate and incidental questions, sometimes of a very complicated nature, arise. The owner of the vessel hands over the command of the ship and the conduct of the voyage to some professional seaman, and here new relations spring up between the owner and captain, the captain and subordinate officers and crew. These relations involve questions of law, arising out of the agreements, rules an(^ usages in raich matters, of a wide-reaching and complicated character, and when to all this we add the laws and regulations as to the registry and transfer of vessels, home customs and the usages of foreign countries, the files relating to partial" losse"?, and expenses of necessary repairs of the vessel, together with the assessment of contributionr. under the name of " average ", as well as the right to raise money for these and other purposes by hypothecating the vessel, called ""Bottomry '", or by hypothecating the freight, calltd " Hespondeutia", we can easily imagine how extended and complicated ti:e subject becomes. The shipowner contracts to convey the goods in safety, qualified, however, with a wide exception as to the perils of tlie sea, and the acts of the Queen's enemies, he not being responsible for loss from tempest ■Hmni wmmmm or capture. The freighler must incur risk, as well as the vessel owner ; he may lose his cargo by violence or accident, and have no redress. And the shipowner, in addition to the ordinary perils of the sea, is often exposed to loss, arising out of fraud, negli- gei>ce, or other misconduct of his captain and crew, and for such consequences he is responsible to the freighter. To meet all these risks and consequences, a practice has arisen most im- portant and bcneucial in its character. A number of persons stipulate, in consideration of a premium, varying with the risk, to insure at their joint hazard both the shipowner and the mer- chant against all risks and contingencies ; this is done by an instrument or contract called a " Policy of Insurance ". This usage itself is of very ancient origin, for we find as far back as the 43rd year of the reign of Queen Elizabeda, in the preamble to chapter twelve of the statutes of that year, the following recital : " By means of *• Policies of /nsur ancc' it ometh to pass, upon the ^^ loss or perishing of any ship, there followeth not the undoing < ^^ of any man, but the loss lighteth rather easily upon many, than ^^ heavily upo/ifejv, anil rather upon them that adventure not, '' than those who do adventure, whereby all merchants, especially '■''of the younger sort, arc allured to venture more willingly and •' more freely." I may remark in |>assing, thrt to entitle the in- sured to the advantages of his insvuance, he muse act towards the insurer with perfect good faith ; he must make no false re- presentations, nor conceal any defects. The vessel must be in every respect fit for sailing, or as it is technically termed " sea- 7vorthy ". Sue must enter on ihe voyage specified in the policy, and no other. There must be no intentional deviation from the line of that voynge ; in short, no risk must be incurred that might not fairly be contemplated by those who agreed to indem- nify. All this opens out to the student another extensive and interesting field of inquiry. Next in order come the regulations and rules with respect to customs duties imposed on those cargoes of imported goods. With reference to this, a most useful and convenient practice has arisen called warehousing, by th's system payment of the duty is not exacted at the time of importa- tion, but upon a " bond " being given by the . importer for the payment of the duties at some definite period, the otficer o." I ro customs gives him a '-"aiYant, permitting him to land the goods and deposit them in some specified warehouse, and when so de- posited they are said to be "/>/ bond", .The importer, though he has no actual possession of the goods, has access to them for the purpose of inspection or sale, and the warrant lie holds serves as the symbol of his property in the goods. By the indorsement and delivery of this warrant he may make as valid and complete a sale as he could by the actual corporc*al delivery of the goods. Besides these public warehouses, there are others belonging to private individuals, who make a profit as warehousemen, by per- mitting the deposit, and undertaking the safe custody of goods for the owner until 'he wants to dispose of them. The duties and responsibilities of these warehousemen form another import- ant chapter of Commercial Law, which I will not dwell on at present. Having dealt very briefly with some of the incidents belonging in a primitive state of society to the transfer and delivery of commodities, as well as with the mercantile occupa- tions springing from the wants and necessities of those early time?. I will now refer with equal brevity to those incidents which relate to payment as the basis of traftic. Reciprocity of advantages was always the foundation of barter and traffic, and it might, therefore, be expected that no one would- be willing to part vv!th the possession of his goods without securing an im- mediate equivalent. It was on this supi)osition that money was introduced. The ancient practice invariably was the same as the general rule to-day, viz., that payment should be contemporaneous with delivery. But competition and the insutficiency of actual currency for the increasing transactions of trade gradually intro- duccvi the credit system, which ha.3 now become an established usage. In giving credit, the seller parts with his goods, trusting to the will and ability of the purchaser to pay for them at' some future time ; but the will is sometimes tainted with dishonesty, and the ability affected by unforeseen contingencies, hence the necessity for some law to regulate these maiters. Accordingly, we find quite a comprehensive mercantile code springing into existence, for the protection of creditors so situated. The tradesman, not consideriiig the buyer trustworthy, refuses to give him credit, except upon the guarantee of some third person, who wwn^mmaamKvt^ 11 becomes responsible for the debt in case of the buyer's default ; and in order that no undue advantage may be taken of promises hastily and incautiously made by persons who had no interest in the transaction, but who merely desired to do a friendly act, the law steps ia and says, this pledge, in order tc bind the party, must be in writing. As traffic expanded and business ideas advanced, the person giving his goods on credit would think it desirable to get from his .debtor a distinct promis-e to pay the sum due,' with an ad^iiission that he had received value for it. Such a prorhise reduced lo writing and signed by the debtor would at once dispense with all proof of the items of the claim, and of the price and delivery of the articles, hence the introduction of promissory notes. He who gave the note being called the " maker'", and he who received it the '^ payee "; but though a good security for his debt, the promissory note was not originally available to the holder for the purpose of commerce, the maker being liable to none but the payee, the instrument was not trans- ferable, and therefore, not convertible into cash ; but by degrees, to meet the convenience and necessities of trade, the practice grew up of passing these promissory notes from hand to hand, and conferring upon the holder for the cime being all the right therein of the payee. This pracuce, whic'.i was for some time discountenanced by the law. at lengtli received legislative sanction, and the practice of negotiating luomissory notes was placed upon the same foot'ng, and allowed to iullow that which always prevailed in regard to another old and well-known instrument called a '■'Bill of Exchange'', which maybe described as a written order or request addressed by one person to another, directing the latter to pay to some tliird person, or his order, a certain sum of money, at some specified time ; the person giving the order being called the '■^drawer'' of the bill, he to whom it is directed the '\drawee ", and the person in whose favor it is made the ^' payee". It may be payable at sight, or so many days aaer sight, or so many days or months after date. When drawn by a person resident abroad, upon some one at home, it is called a " foreign bill ", and when bodi parties reside at home, it is called an '' inland bill ". In drawing " foreign bills " it is customary to give two or three of the same tenor or date. t2 SO as to giKirJ againsi unioM'seen casualties, in whicli case it is stated in the body of the bil! that it is the " first ", '• second " or •Hhird" of exchange, eitherofuhicli being paid, the rest becamevoid. These very convenient instruments were invented by merchants living in different countries, for the safer and more easy remittance of money from one to the other, and the practice was found so convenient that it was subsequently extended to commercial transactions entirely within Great Britain itself Some writers aj^i^iear to think that the system did not originate in England, but was borrowed from some countries which preceded her in the pur- suit of commerce. Others think that the practice of using ' bills of exchange " for foreign remittances was only an extension of the practice which already prevailed in regard to inland trans- actions. It certainly seems natural that, when the credit system was once established, the trader, whose availal)le funds might not be sufficient to pay ready money for articles he vvafj desirous of purchasing, should ask the seller to take an order on someone else who owed him a sufficient amount tc cover the price of the article. By tliis means the seller had also an addi- tional security, as it was probable the drawee would honor the " bill ", and at maturity pay the money ; and if he did not, the drawer would, ai all events, be liable, and it afforded the creditor an expeditious and summary remedy against the debtor, for as in the case of a promissory note, so in a Bill of Exchange, it is unnecessary to prove the consideration for which it was given. The payee would take an early opportunity of ascertaining from the drawee whether he would satisfy the "bill" at the ex])iration of the specified time. If he signi- fied his acceptance, either by writing on the "bill" or otherwise, he was then termed the '"'■acceptor", and became liablj as such for the amount of the " bill ", not only to the payee, but to the drawer also, whose right to give the order he admitted by the act of accep tance. In the same way that the payee had been induced to take this "bill" in payment originally, anotht r ].)erson would be willing to take it from the payee in purchase of other commodi- ties \ and as it purported to be payable to tb.e order of the payee, as well as to the payee personally, he gave the order by endors. ing his name thereon. In this way the,"biU" might be passed from mm 13 J hand to hand, and would increase the value of each traiiafcj, inasmuch as the debtor had a claim, not only upon the original parties to the " bill ", but also on every preceding endorser, who, in the eye of the law, guarantees the i^ayment of all who followed nim, in case of default by the person primarily liable. And though the payee in general presents the "bill'' for acceptance as soon as ])Ossible, yet, when anything interferes to prevent this, uri> subsequent holder may do so at any time during the cur- rency of the " bill ". Sometimes when the drawee refuses for any reason, to accept Die " bill ", some other person, not a party in any way to the ' bill ", steps in to prevent the credit of the drawer, or any of the endorsers from being injured, and under- takes to pay the " bill " at mfiturity. Such a friendly assistant is termed an acceptor ''stipra protest ", or an ''acceptor for honor " and he thereby becomes liable for the payment of the " bill" to all those persons whose claim upon the " bill ", extends 10 the party for whose honor he has accepted it. As these transac- tions were originally founded u]>on the supposition that the drawee had funds of the drawer in his possession, or owed him a debt, it was a i:atural application of the idea in bargains be- tween commercial men. for the seller to draw a " bill " on the buyer, payable to the seller's own order, for the price of the goods sold, which "bill" the buyer immediately accepted, by this ar- rangement the buyer was not called upon for actual payment in cash until the maturity of the " bill ", while at the same time the 'Seller has not only an available security for his debt, but he could at any time, by endorsing his name on it, dispose of the ■'bill", and convert it into cash, . This mos{ convenient principle was further extended to that class of cases where persons had consigned goods to others to be sold on account. The con- signor drew at once on the consignee, before the goods were disposed of, or perhaps before they were even received, for a simi of money short of their estimated value, upon the supposition that before the bill fell due, the drawee would have sold the goods, and have the funds on hand to meet the bill. Thus far this system was natural and convenient, but the facility for negotiating those instruments has of -late years given rise to a l)ractice very liable to abuse, and which, has often proved most M r injurious to legitimate trade. Tiie use of nioiu'v for a given period has always been of value in the market, and persons are always found willing to advance money for the snke of the interest, now to give cash for a bill not due is to ad- vance diat cash, and for which the person advancing it is en- tided to interest for the time which must eia])se before tlie bill becomes due. Subject, therefore, to the deduction of interest, which is termed the discount, the holder of a good bill, may at any timc> get the value of it in cash. Thus it has become an instrument not only for the ])tu-]5ose of barter, as originally con- templated, but for the express purjjose of raising money. A wants to borrow $r, GOO, but knowing that his own credit is not sufficient to obtain a loan of the money, he aj)plies to a friend to accept a bill drawn by himself, he undertaking at the same time to ])ay it at maturity. I'his bill, when accepted, is called an accommodation bill, and is taken by the drawer and cashed by someone who has the money to lend, the lender receiving the discount for the use of. the money wliich he advances on the ])ersonal security of the drawer and acceptor. Promissory notes are used in the same way as the media for procuring loans, and a large proportion of the trade of this country a short time ago (not so much at present) was supported by transactions of that character. Although bills and notes, made and used in the way described, were in a general way cashed by all who had the command of money, yet, there was one distinct class, now well known, named bankers, whose peculiar business it was to deal with money as an article of profii, in that special line of securities. The origin of bankers ai:)i)ears to have been twofold, Firsts In die insecurity of property prevailing in countries imperfectly civilized, it was a common and convenient practice for those who had accu- mulated a sum of money to place it for safe keeping in the hands of some wealthy and reliable tradesman (as they were then called) of indisputable credit. This person would not let the money re- main idle, but would employ it in ttade, keeping sufficient on hand to meet the expected calls of the owner. At the same time the extravagance and necessities of the landed propriet(;rs continually compelled them to borrow from the wealthy tradesmen, even at an exorbitant rate of interest, and by degrees the' moneyed men also found it to their advantage, without directly embarking in the trade themselves, to lend out their capital to others who were engaged in this business, upon such terms as to enable both parties to derive a profit from the employment of the capital. In a short time a sei)ar:uion took place between the tradesman and tiie man of capital, and the receiving of deposits and advancing money on personal securities, which the man of capital publicly j)rofessed to do, became a distinct and lucrative business under ihc mine of /m/drrs. Secondly, in the infancy of foreign com- merce it was usual for the merchants of different countries to go in person to the great fairs and markets, where the principal transactions were carried on ; but at that timq payments were made in specie, and each merchant having only the current money of his own country with him, or perhaps the uncoined metal, there war a difficulty in effecting the exchange, hence, it became a matter of great convenience, as well as of trade and protit, to give the current nioney of the place, or such other money as the merchant required, ii exchange for his foreign coin, or his bullion, as the case nu'ght be. And the persons, who car- ried on this traffic, having stalls or benches called " Banques " in those places of commercial resort, were thence called •' Bankers ". But whatever their origin may have been, the banking business of the present day forms a most important section of the com- mercial pursuits pf the country. The profits of the business are derived from the advantageous employment of capital in the way of loan and exchange, and also directly or indirectly from tran- sactions of a different cliaracter with respect to deposits, where accounts are opened with depositors, the depositor or cus- tomer each day sends into the bank whatever cash he has received in the course of his business, these amounts are placed to his credit, and when the customer requires to make any payments, he does so through the bank by means of cheques ; thus the bank has the advantage of all balances not required for immediate use by the cusiomer. Where there are many cus- tomers with large amounts deposited, this branch of the business is important and lucrative. In addition to the ordinary banks of the country, there is one gigantic banking institution in Eng- land, of a national character, called the Bank of. England, which i6 . was projected by a Scotch gentleman named Patcrson, and its charter olitained in July, 1694. 'J'hc history and operations of this wonderful nisiitution would fill a large voUnne, but its pecu- liar featiu'e is this : it is a cieditor of Cheat liritain for large sums of monev advanced at different times to meet the pressing wants of the nation. The greater part of this debt, due from the British Government to the Bank, amounting to an immense sum, is what is called funded; that is, certain annual funds, raised each year by taxation on the people, are set apart in perpetuity to pay the interest on this debt. It is through the Bank of England that this interest, or, as it is called, the dividends on these funds, are paid to the public creditors in proportion to their respective shares in the stock. These shares are transferable, and whoever desires to invest in Government securities, may purchase from the owners of the stock at such j-rice as the stock may be worth on the market. The value of these shares fluctuate very much, being affected by political incidents, and other causes ; hence, it has become a practice to traffic in buying and selling these shares under the name "Stock Jobbing". In referring to commercial transactions. I have assumed that they have taken place directly between the parties .tercsted, but in extensive transactions be- tween pel sons living a long distance apart, the business could not be managed conveniently without the intervention of some third party acting between the i)rincii)als, and who could always be on the spot to catch the favorable times* in the market. It is particularly necessary in a foreign trade to have agents living abroad, to secure consignments of goods exported, and dispose of them advantageously for the owner, and to purchase and ship home such foreign commodities as the merchant may want in re- turn. These mercantile agents have tncrcfore been long recognized as a separate and impohant class under the name of " Brokers "; but this general term comprehends several distinct kinds of agents. Those who are engaged in the sale or purchase of goods for their principals are either " Brokers " or " Factors ". The brokers have not the possession of the goods, but simply make the bar- gains in the name and on account of the principals." When the broker closes the bargain, he gives the seller a memorandum of the sale, and the i)urchaser a memorandum of the purchase ' I? (which are called bought and sold notes), and which hind the bargain just as much as if everything took place between the parties themselves. Factors are different from brokers, in this respect, that they have the actual possession of the goods, and deal with them as their own, and in iheii own names. Factors receiving and making consignments of goods on account of merchants being in another country are called Foreign Factors. When acting for merchants living in the same country they are called Home Factors. The profits of tlieir business consist generally of a certain percentage on the amount of their sales or purchases. Sometimes Brokers and Factors render .hem Ives resj)onsible to their principals. for the credit of the persons to whom the sales are made. In such cases an additional per- centage is stipulated for, and the Broker is said to act under a commission oi'' Del credere'", or guarantee. In addition to the class of Brokers referred to there are also "Ship' and " Insurance " Brok- ers, who are engaged in buying and selling, and chartering ships, procuring freight for vessels, and negoMating insurance on vessel or cargo. There are also " Bill " and "Stock Brokers ", engaged in occupations which the name itself implies. In nearly every kind of business it may almost be regarded as a fact, that the chance of profit increases in proportion to the amount of capital invested. It therefore follows that if two or more persons agree in investing each a particular sum in an enterprise or business, the profit of each is likely to be greater than if he went into the business by himself, all other things being equal. Again, the management of an extensive business establishment requires ■I combination of skill and attention ; and those who have a direct interest in the success of such an undertaking, will be more active and zealous than if they were not so interested, it is a natural and obvious expedient, therefore, to secure the union of such persons by a community of profit and loss, and from these con- , siderations arose the practice of partnerships in business, and so necessary and beneficial has this system been found, that there are very few large establishments carried on by single indi- viduals at the present day. A partnership is therefore a volun- tary arrangement or contract between two or more persons for joining together their money, goods, labor, or skill, under an i8 agreement as to the division of the profits and losses of the pro- posed undertaking. In general, all the partners appear openly to the world, and constitute what is called the "y?;7// ". It very often happens, however, that capitalists embark their money in business without taking any part in the management, or allowing their names to appear; such persons are ca.\\ed " i/orma/it^' or " sleeping l^artncrs ". and when discovered, are liable to the credi- tors of the firm with the other |)artners. There are also special partnerships formed for single ventures, where the liabilities are confined to those special transactions. In modern times, for greater convenience and the protection of society, special laws have been made for the registration of partnerships, and with a view to the more perfect arrangement of this branch of the commer- cial system. Other large combinations of money and -skill, partaking somewhat of the nature of partnerships, but the crea- tures of legislation, and the outgrowth of man's wonderful energy and enterprise, have sprung up from time to time for the prose- cution of great works, public and private, usetul to the country, and sometimes, but nof always, profitable to the adventurers. To com[)anies of this class we are indebted for the gigantic railway system on this continent, as well as the canal and in- ternational marine systems, and many other monuments of wealth, enterprise and greatness, that surround us on every side. The last, and mo'^t extraordinary of all, has been just completed on our own territory, overcoming in its course obstacles con- sidered insurmountable, and uniting with iron bonds the two great oceans that wa.-h our eastern and western shores. By com- panies, also, dominioiis have been acquired, in bygone times, colonies have been .settled, and commerce spread to the remotest corners of the earth. Some of these companies have been created by deeds, or articles of copartnership, others by Act of Parliament ; but all have a common foundation and a common tendency, viz., to minister to the wants and necessities, as well as the enjoyment of mankind, and make every man indeed a a citizen of the world. Without commerce, miserable and cramped would be the boundaries of man's domain ; but with it, and resulting from it, using the beautiful words of Addison : " Our tables are stored with spices, and oils and wines ; our 19 rooms are filled with |)yrainids from China, and adorned with the workmanship of Japan ; our morning's draught comes to us from the remotest corners 'of the earth ; we repair our bodies by the drugs of America, and repose ourselves under Indian cano- pies ; the vineyards of France are our gardens, the Spice Islands our hotbeds, the Persians our silk weavers, and the Chinese our potters. Commerce distributes the gifts of nature, balancing the deficiencies of one country with what is superfluous in another, creates a demand for labor, finds emi)loyment for wealth, < and multiplies and cheapens the productions of every country."