A PROMISSORY NOTE is defined by § 83 of the Act to be "an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time a sum certain in money to, or to the order of, a specified person or to bearer." There are various statutory restrictions on the issue of promissory notes payable to bearer on demand for less than £5, and there are further restrictions on the issue by bankers of either bills or notes for any amount payable to bearer on demand. When a promis

sory note is made by two or three makers, they are liable, either jointly or jointly and severally, according to the tenor of the instrument (§ 85). In this a note differs from a bill, because if a bill be accepted by two or more drawees, they are only liable jointly and not jointly and severally. But for the most part the provisions of the act with reference to bills of exchange apply, with the necessary modifications, to promissory notes. In applying those provisions, the maker of a note is deemed to correspond with the acceptor of a bill, and the first indorser of a note is deemed to correspond with the drawer of an accepted bill payable to drawer's order (§ 89). The provisions of the act relating to presentment for acceptance, acceptance, acceptance supra protest, and bills in a set have no application to notes. Moreover, protest of a foreign note is unnecessary for English purposes (ibid.)

As to the economic operation of bills and notes as instruments of credit, see articles on BILL OF EXCHANGE, CREDIT, CROSS DRAWING, Goschen's Foreign Exchanges and Mill's Political Economy, bk. ii. c. xi. and xii. As to the English law on the subject, see Byles on Bills of Exchange, Chalmers on Bills of Exchange, and Chitty on Bills of Exchange. As

to American law, see Story on Bills of Exchange, Parson's Law of Notes and Bills, and Daniell on Negotiable Instruments. The French law on the subject is fully treated of in M. Nouguier's Lettres de Change et Effets de Commerce, ed. 4 (1875), which also summarises the provisions of the various continental codes. The Indian law on the subject is contained in the Indian Negotiable Instruments Act 1881, as amended by Act II. of 1885, and it may be noted that Canada and some of the Australian colonies have recently adopted the English Bills of Exchange Act.

M. D. C.

BILL OF LADING. A document by which the master or some other agent of the shipowner on his behalf acknowledges the receipt of certain goods, and undertakes to deliver them to the consignee at the port of destination, against the payment of freight and subject to certain contingencies releasing him from liability. The consignee is either named in the bill of lading, or it is simply stated that the goods are to be delivered to the order of the shipper, in which case the goods are delivered to the person to

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whom the document is indorsed, or to a subsequent indorsee. If the bill of lading is made out to the consignee or his order, the goods are delivered either to the consignee or an indorsee, but if the consignee is named without any additional words he is the only person who has a legal right to the delivery of the goods. As a general rule an indorsee acquires the property in the goods as soon as a properly indorsed bill of lading is handed over to him with that intention, but this rule is subject to several exceptions, the most important one being the so-called right of stoppage in transitu, which enables an unpaid seller to stop the delivery of the goods if the buyer has become insolvent before they came into his power. If, however, the buyer has in the meantime transferred the bill of lading to a bona fide holder for valuable consideration, the right is no longer available. It must also be mentioned that a bill of lading is not negotiable in the same sense as a cheque or a properly indorsed bill of exchange. A person who in good faith gives value for a stolen current bill of exchange indorsed in blank, or for a cheque to bearer, acquires a good title, though the thief from whom he bought it had none. This is not the case with regard to a bill of lading, as a subsequent holder of a document of this nature cannot (except in so far as he is not affected by the right of stoppage in transitu) acquire a better title than a previous holder had. In former times the contractual rights and liabilities arising from a bill of lading (e.g. the right to sue in case of loss) remained with the original parties, notwithstanding the transfer of the property in the goods, but the statute 18 & 19 Vict. c. 111 enacts that " 'every consignee of goods named in a bill of lading and every indorsee of a bill of lading to whom the property in the goods therein mentioned shall pass upon or by reason of such consignment or indorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself." Bills of lading are generally made out in sets of several identical copies, which are forwarded by different mails, so that one may serve in case of the loss of another. The system is not free from danger, as a fraudulent holder may negotiate each copy separately. Occurrences of this sort have happened on more than one occasion, and have caused a considerable amount of litigation.

E. S.

BILL OF SALE. A document purporting to assign the property in personal chattels remaining in the possession of the assignor. Assignments of this nature as a general rule are not made for the purpose of a regular sale, but merely by way of security for a loan. Α bill of sale is void as against execution creditors. if it is not drawn up in the statutory form and

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registered in the central office of the High Court within seven days of the date of issue; it must also be renewed every five years. A charge of personal chattels in a debenture need not be registered as a bill of sale. The acts of parliament now regulating the law of bills of sale are those of 1878 and 1882 (41 & 42 Vict. c. 31; 45 & 46 Vict. c. 43). A bill of sale given by way of security for the payment of a sum under £30 is void.

E. S.

BILLON. This conventional term, French rather than English, is derived from a corruption of the low-Latin word billio, or bullio, from which springs the English word bullion. In French mint language it has certainly, from the 13th century, if not before, signified the degeneracy of the pure contents of a coin through an alloy, generally silver in the gold pieces, or copper or lead in the silver pieces, giving them a particular degree of impurity, and thus debasing their intrinsic value. In the old French coinage, down to the monetary reform in the first revolution, the silver marc of a given weight was imagined as divided into twelve parts called deniers d'alloi, eleven of them pure silver and one alloy. This mixture was silver of or, in decimals, of 9166 fine, and was the old standard. This was altered to, or, in decimals, to 900 fine, from 1804 to the present time. All degrees of fineness below it, or below the standard at the time being, were considered as changing the coin to billon.

That designation is also largely applied by numismatists to ancient silver coins, and notably to those of the Roman and Greek series, when these are materially below what ought to be the average standard fineness of the metal, according to the scales laid down at the best periods for purity of the silver coinage, and it is even extended by them to what are really false coins (although struck by state or other ruling authority) of copper, or of brass, plated or washed over with silver, and passed with forced currency as silver coins. Thus the term is made to cover a wide range of meaning, varying from a comparatively small degree of degradation in fineness down to the merest pretence of having any actual intrinsic value of precious metal in the composition of such coins.

It

It is noticeable that the term billon has not been applied in France without some exceptions in the case of gold below the standard. was so applied in the Middle Ages, but, in the time of Louis XIV., when under twelve carats out of the twenty-four carats were of pure gold, the alloy was called "silver holding gold," or, if the proportion of copper to gold was of like amount, the alloy was called "copper holding gold." The term billon has also been generally used in France for all copper or bronze money, even when it is of full weight according to mint indentures. In some points of view this appears contradictory, but the use of the word

is probably intended to convey the meaning of a token coinage, the intrinsic value being so largely below the nominal one. Whilst the full-weighted five-franc silver pieces of France, Italy, Belgium, Switzerland, and other states which are allies in the now subsisting Latin monetary union, continue to be coined

or 900 fine, their 2 franc, 1 franc, and franc pieces are still coined 835 fine, or just on the borderland which divided silver of the old standard from billon. But in England our coinage of crowns, four shillings, half-crowns, florins, shillings, sixpences, and threepences, is struck of a higher degree of fineness, namely, 925. In the general result it would seem that, as standards vary in different countries, what is locally billon in any one of them need not necessarily be so in others, and that such a variation prevents any precise general international agreement as to what the word exactly signifies at different places or times (see BULLION).

BI-METALLISM.

F. H.

This compound word is used to describe the employment of two metals, to form at the same time, in combination with each other, the standard of value. The final report of the Royal Commission on Gold and Silver describes bi-metallism as follows: "A bi-metallic system of currency to be completely effective must, in the view of those who advocate it, include two essential features: (a) An open mint ready to coin any quantity of either gold or silver which may be brought to it. (b) The right on the part of a debtor to discharge his liabilities, at his option, in either of the two metals, at a ratio fixed by law." It is usually understood now to mean that the two metals are used thus at a fixed proportion to each other, as in the countries forming the LATIN UNION (q.v.), in which the ratio of 1 gold to 15 silver by weight forms the legal basis, or in the United States in which the ratio is 1 to 16. Few economic subjects have of recent years been discussed with more heat, owing partly to the fact that some on the one hand have considered that the adoption, or the retention, of bi-metallism would confer certain advantages on particular classes, and that some on the other hand think that MONO-METALLISM profits other classes.

The main requisite in a standard is, that it should be, as nearly as possible, constant in its purchasing power. The selection, or the construction, of a stable standard of value is, however, even more difficult than that of an undeviating standard of time. In this connection it is advisable, while considering here the possible employment of two metals for this purpose, to quote the words of John LOCKE on the advantage of employing one metal only, as this quotation sets forth the drawbacks to bi-metallism without any reference to recent controversy,bearing in mind the circumstance that at the date when Locke wrote international bi-metal

lism had never been thought of. "Two metals, | as gold and silver, cannot be the measure of commerce both together in any country; because the measure of commerce must be perpetually the same, invariable, and keeping the same proportion of value in all its parts (Further Considerations concerning raising the Value of Money, John Locke). On the principle thus expressed the STANDARD OF VALUE, understood in the sense of the measure provided by the government, through their engagement to coin at a fixed rate the metal brought to them for the purpose, has been based in this country by legal enactment since 1798, in practice nearly since the commencement of the 18th century, though a double standard remained legal till the date mentioned. Gold became the general medium of circulation in this country either through choice or, what seems the more probable, through the differing ratio of value in foreign countries which made silver the best export. In 1798, shortly after the suspension of cash payments (1797), the government suspended the coinage of silver. Up to 1783 every man might make his payments in silver or gold at his option; though after 1774 he could only pay in silver up to £25 "by tale," but "by weight" up to any amount. There was no restriction as to payments in gold. The general practice of the country before the restriction was confirmed by the distinct adoption of a gold mono-metallic basis on the resumption of specie payments in 1816. Silver was, however, allowed to be held as part of the reserve of the precious metals against which the notes of the Bank of England are allowed to be issued by the 3d clause of the act of 1844 (see BANK NOTE, BANK OF ENGLAND), which permits the bank to retain in the issue department silver bullion to an amount not "exceeding one-fourth part of the gold coin and bullion at such time held by the Bank of England in the issue department." Silver bullion was accordingly held by the issue department up to large amounts (the average for the year 1846 was £2,169,000; see Bank Rate in England, France, and Germany, 1844-78, Palgrave), but the practice was discontinued in 1853, and has never since been resumed. While this country became monometallic, in France a standard fixed at the rate of 1 mark of gold to 15 of silver was definitely established in 1785, and continued by the law of 1803, gold and silver, in 5-franc pieces, being equally legal tender for any amount. The Latin Union, as the coinage treaty of 1865 was called, which included France, Belgium, Switzerland, Italy, Greece, and Roumania, carried on its mintage operations on the same basis as in France till 1874, after which date the coinage of silver was restricted and practically suspended. A considerable drop in the market price of silver followed. From having been 4s. 11 d. an oz. in 1844 it sank to 3s. 6d. both in

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1886 and in 1889, and a further drop has taken place since. The results of this alteration have been widespread, the effect being particularly seen on the rate of exchange between countries with a gold and those maintaining a silver standard; and less distinctly on prices of commodities in general within the countries concerned. Much discussion has hence ensued. It may, however, be observed that a real monometallism had not existed in Europe till 1873, as the existence of the Latin Union countervailed its effects both in gold and silver using countries. The question has been treated with great scientific power by Professor JEVONS, who explains in his book on Money "that a compensatory, or as I should prefer to call it, equilibratory action, goes on under the French currency law, and tends to maintain both gold and silver more steady in value than they would otherwise be." He points out that when one metal becomes more sought for than the other there is an inevitable tendency to import the cheaper and export the dearer, and continues: "At any moment the standard of value is doubtless one metal or the other, and not both; yet the fact that there is an alternation tends to make each vary much less than it would otherwise do. It cannot prevent both metals from falling or rising in value compared with other commodities, but it can throw variations of supply and demand over a larger area, instead of leaving each metal to be affected merely by its own accidents. Imagine two reservoirs of water, each subject to independent variations of supply and demand. In the absence of any connecting pipe, the level of the water in each reservoir will be subject to its own fluctuations only. But if we open a connection, the water in both will assume a certain level, and the effects of any excessive supply or demand will be distributed over the whole area of both reservoirs. The mass of the metals, gold and silver, circulating in Western Europe in late years, is exactly represented by the water in these reservoirs, and the connecting pipe is the law of the 7th Germinal, An. xi. (1803) which enables one metal to take the place of the other as an unlimited legal tender.' The theory on which bi-metallism rests is completely explained in these observations of Jevons. With respect, however, to the advisability of a nation adopting a single or a double standard, Jevons expresses himself in cautious terms, adding (Money, p. 141), "The question seems to be entirely one of degree, and in the absence of precise information is quite indeterminate.”

The final report of the Royal Commission on Gold and Silver, 1888, expresses a decided opinion that the bi-metallic system of the Latin Union exerted a material influence upon the relative value of the two metals (par. 193): "So long as that system was in force we think that, notwithstanding the changes in the pro

duction and use of the precious metals, it kept | the market-price of silver approximately steady at the ratio fixed by law between them, namely, 15 to 1." With respect to the position of the metals in two countries, in one of which silver, while in the other gold, is employed, we may quote from an article in the Economist of 2d February 1878, which observes that the "relative value, the proportions in which the two metals will exchange for each other, are continually fluctuating, and they must inevitably do so unless it were possible to fetter the supply in such a manner that only the right proportions of each metal should be brought to market at the same time. Two articles, of course, cannot remain always at the same relative value to each | other unless the production of both is maintained at the same proportion, and no excess or diminution of the supply exists. Nor can they do so unless they are of identical utility, and are capable of performing identical services to man. When two commodities perform exactly the same functions, and are equally capable of doing so, being equally desirable in every respect, they will continually tend to exchange for other things in the same proportions. But this cannot be said to describe the exact relations of gold and silver to each other." The results of the export of the one and the import of the other metal are then referred to: "The loss arising from these causes may not come home to the inhabitants of the country where it occurs in a clear and obvious way. The inhabitants may, if silver is cheap and gold is wanted for export, retain silver for their own domestic use and employ it in their circulation till a fluctuation in the exchanges renders it possible for the gold to return. The banks which make the remittances will, in this case, obtain a profit from the transaction, while the people who employ the money will hold over the currency they receive in the ordinary way of trade till the tide sets in the contrary direction. Thus the loss which the country really experiences from employing a currency which is depreciated, as compared with the currency of other countries employing a more valuable standard, will be veiled from view, though it really exists." One metal out of the two is taken in this case for export because it is profitable to the exporter to send it rather than the other, but it would not be sent unless its export were advantageous. As the risks to any single country which employs bi-metallism are obvious, the advocates of the system recommend that all countries should employ it, as this would, they consider, prevent a preferential movement of either metal from one country to another. Thus the work recently published by Sir D. Barbour, The Theory of Bimetallism, recommends "the adoption of universal bi-metallism at a fixed ratio to be determined by mutual consent." "Failing universal bi-metallism," Sir D. Barbour continues, it would

|

be desirable that bi-metallism should be adopted by a group of countries sufficiently strong to maintain the fixed ratio," Sir D. Barbour's contention being "that the existence of this fixed ratio for the purposes of the currency will control and regulate the market price of the two metals so as to prevent it from varying in any material degree from the fixed legal ratio of the currency."

Rochussen is of the same opinion. Quoting the words of a Belgian writer in the Revue Générale, October 1887, p. 653, "Si le kilogramme d'or vaut actuellement sur le marché vingt kilogrammes d'argent, c'est apparemment que le kilogramme d'or, pour être extrait de la terre, coûte autant qu'il en coûte d'extraire vingt kilogrammes d'argent," he comments on them thus-Apparemment'! No explanation of the market price can be more in conflict than this is with all the facts of mining industry, and all the principles of money. In the first twenty years of this century the production of gold stood in comparison to that of silver (valued at 1 to 15) as 23 to 8. In the following period of twenty years, nearly as 4 to 8; thereafter from 1841 to 1850 as 8 to 8; from 1851 to 1860, very nearly 28 to 8; in the following five years, as 23 to 8; and from that time onwards to 1870 the proportion fell to 18 to 8, showing even at that rate an increase of some 675 per cent in the proportion. Yet in all this time there was no greater change in the market price, now of one metal, now of the other, than about 2 per cent.

"Or if we choose to look rather at the facts which concern the demand, than at those which concern the supply (aanbod), we shall see that the steadiness of price was not affected, though the demand for gold was greatest when the supply was least, and the demand for silver was greatest when the supply of that metal was least." (Rochussen, Geld- en Muntwezen, p. 287.)1

The statement given above shows the main features of the working of a bi-metallic system. Jevons remarks (see Letter from Jevons to M. WOLOWSKI, printed in Jevons's Investigations in Currency and Finance, p. 304) that the French currency law has "no doubt assisted to keep gold and silver at a nearly invariable price as compared one with the other." As mentioned previously, the Gold and Silver Commission unanimously concurred in supporting the same opinion. Jevons also observes that "it is indispensable to remember the fact, too much overlooked by disputants, that the values of gold and silver are ultimately governed, like

1 M. Rochussen held the position of minister for foreign affairs in Holland 1879 and 1880, and is at the present time (1890) a member of the council of state. His father, it may be mentioned, was minister for the colonies, also for seven years governor-general of Dutch India, and twice minister of finance. The circumstances of Holland give those engaged in its administrations very considerable opportunities for watching the fluctuations of the standard of value.

those of all other commodities, by the cost of production. Unless clear reasons, then, can be shown why silver should be more constant in its circumstances of production than gold, there is no ground for thinking that a bi-metallic gold and silver money will afford a more steady standard of value than gold alone" (Jevons, Investigations in Currency and Finance, p. 318). "Ultimately" is the governing word in this quotation, and is frequently overlooked; it may mean an almost indefinite period. The reader must be referred to the works of Jevons here cited for the whole of his arguments; it is hardly possible to express them fully by any selection.

As a matter of history it appears that the value of silver relatively to gold has tended to diminish as ages have passed by. Meanwhile France and the Latin Union, after trying the experiment of an international bi-metallism on a very considerable scale, have abandoned, or at least suspended the free coinage of both metals at a fixed ratio. The United States, after employing a bi-metallic ratio of 1:15.25 in 1786, changed to 1:15 in 1792, to 1.16002 in 1834, to 1:15.988 in 1837, and adopted the gold dollar only as the UNIT OF VALUE in 1873. A limited coinage of silver dollars was directed in 1878 (by the Allison or Bland Act), which possess "full paying power, except in cases where it is strictly stipulated otherwise in the contract." A somewhat limited system of bimetallism was thus in force in the United States from 1878 to 1890. In 1890 an act authorising a great extension of the coinage of silver was passed by the legislature (see BLAND ACT; SILVER LEGISLATION IN THE UNITED STATES). The question of the advisability of adopting a bi-metallic standard has been discussed by many writers recently, but by none in so dispassionate a manner as by Jevons, who observes, "It may be safely said that the question of bi-metallism is one which does not admit of any precise and simple answer. It is essentially an indeterminate problem. It involves several variable quantities and many constant quantities, the latter being either inaccurately known or, in many cases, altogether unknown. The present annual supplies of gold and silver are ascertained with fair approach to certainty, but the future supplies are matter of doubt. This demand for the metals again involves wholly unknown quantities, depending partly upon the course of trade, but partly also upon the action of foreign peoples and governments, about which we can only form surmises" (Jevons, Investigations in Currency and Finance, p. 317). The use of both gold and silver as standards of value is obviously most important, and it equally

cannot be doubted that the disuse of either must lead, as the disuse of silver has recently done, to considerable fluctuations in the prices of commodities. To recommend, however, a

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country which is now mono-metallic to become bi-metallic, or a corresponding change on the part of a bi-metallic country, requires a far more complete inquiry than has yet been made. The theory may be explained in comparatively few words, but for any adequate statement of the practical results the reader must be referred to the following works, which are far, however, from exhausting the subject.

[Bibliography.-The following list is derived in part from the one at the end of Prof. W. S. Jevons's Investigations in Currency and Finance, and that in Appendix to Proceedings, etc., of the International Monetary Conference of 1878, drawn up by Mr. Dana Horton. The reader is referred to these lists for fuller information. The literature on the subject is very extensive, to a great extent in articles and letters in newspapers and other periodicals. The arguments on the subject will be found stated in Jevons, Investigations in Currency and Finance, London, 1884.-Money and the Mechanism of Exchange, 1875, also by Jevons.-Reports of Committee of House of Commons on Depreciation of Silver, 1878.-Report of Commission on Trade and Industry, 1886, and Appendix B to 3d Report, by R. H. Inglis Palgrave.-Report of Commission on Gold and Silver, 1887.-Sir D. Barbour, Theory of Bi-metallism, London, 1885.-S. Dana Horton, Silver as an International Question (an address to Congress); also much information in Proceedings of the International Monetary Conference of 1878, and other writings.-Conférence Monétaire International, 1867.-Procès Verbaux, Paris, 1867. See also Prof. H. Sidgwick's observations that "a double standard with a fixed ratio will be stable against minor variations of supply," P'rinciples of Political Economy, bk. ii. ch. v. ed. 1883. -Prof. J. S. Nicholson, Money and Monetary Problems, 1888, in which the arguments in favour of bi-metallism are stated with great clearness and force.-The Silver Question (paper published by the Bi-metallic League, whose other publications are numerous).-H. R. Grenfell and H. H. Gibbs, The Bi-metallic Controversy, London, 1886, and other works by these two writers.-Prof. Leon Walras, Théorie de la Monnaie, Lausanne, 1886. -Théorie Mathématique du Bi-métallisme, Paris, 1881.-Prof. Adolph Soetbeer, Materialien zur Erläuterung und Beurtheilung der wirthschaftlichen Edelmetalverhältnisse und der Währungsfrage, Berlin, 1886. This is translated in the Appendix Final Report Gold and Silver Commission. Also see American Reports from Consuls of the United States, No. 87, Dec. 1887.Ernest Seyd, Bi-metallism in 1886, London, 1886. —R. Giffen, Essays in Finance, 1880, and other dates, Paper on "Some Bi-metallic Fallacies,' Journal Institute of Bankers, June 1886, and other works.-Prof. Emile de Laveleye, "The Economic Crisis and its Causes," Contemporary Review, May 1886, and other papers,-Samuel Smith, The BiGoschen, "On the Profitable Results of an Increase metallic Question, London 1887.-Rt. Hon. G. J. in the Purchasing Power of Gold," Journal of Institute of Bankers, May 1883.-E. de Parieu, "Situation de la Question Monétaire International" (Journal des Économistes, April 1868), etc.-Henri