"The Bill of Exchange was already in frequent use in the middle of the thirteenth century, but at this time its form was that of a document certified before a notary. At the end of the fourteenth century, it had approached the form now in use. It should be added that the Bill of Exchange was drawn only by the money changers and the bankers that had branches or agents. "The business of bill broking grew up in England towards the end of the fourteenth century. The issuance of Bills of Exchange, based upon genuine business sales of goods, was recognized as a legitimate source of gain by the Canonists; or the ecclesiastic lawyers." MR. BANKER: You _see_, Mr. Manufacturer, from what Mr. Lawyer has just read, Bills of Exchange, in practically the same form that we now have them, have been in use about 500 years. However, we are not now so much interested in a post mortem of the Bill of Exchange as we are in its place in our commerce. What we are most interested in is, just what part the Bill of Exchange is playing in the trade and commerce of today. What we want to get clearly fixed in our minds is what it is, and what it does, as distinguished from other instruments of trade. _First_: For the purpose of a definite idea of just what exchange is, let us remember that exchange includes every written promise or order to pay money that is used to substitute one credit for another credit, or to make one debt pay another debt. _Second_: That Bills of Exchange (sometimes called drafts, or acceptances, indiscriminately) are promises or orders to pay money which are used to substitute one credit for another credit, or to make one debt pay another debt, at some distant city. If the cities are in the same country, the Bills of Exchange are called Domestic Exchange. If the cities are in different countries, the Bills of Exchange are called Foreign Exchange. _Third_: Let us agree, gentlemen, that so far as we are concerned we should not, and shall not, consider the acceptance of any draft by a bank as legitimate, unless the draft has grown out of an actual sale and shipment of goods. In other words, what I want to impress upon you is that if the draft is the economic title to goods, which are moving from the producer to the consumer, the liability of a bank upon an acceptance is reduced to a minimum. Acceptances of drafts growing out of sales and shipments of goods will never be a source of dangerous expansion, because they will liquidate, or pay themselves out, as the goods will be wanted to eat, to wear, to use, or to go into other manufactures, almost immediately.