should have been stated in the Opposite, or Inverse, way to what it was done; it should have been asked when the father's age would be twice that of his son, instead of when it had been. And, therefore. as the Positive sign in that equation meant past time, the Negative sign meant future time. But this root, though Negative, is as real a root as the Positive one.

The root of an equation is any quantity whatever which satisfies the terms of the equation; hence a Negative quantity which satisfies the terms of an equation is as much a Real root as a Positive quantity.

So in a similar way, many writers, seeing clearly the effects of Credit, call Money Real Capital, and Credit Fictitious Capital.

But the truth is that, like as the Negative root of the equation is equally a Real root as the Positive one, Credit which is certain of being paid is of exactly the same Value as Gold itself, as Mill has expressly acknowledged.

Money is the Property in gold already acquired, and Credit is the Property in gold which is to be acquired. Therefore, Credit is Inverse, or Opposite, to Money, but Credit is in every way as Real a Value as gold; by using Money the trader makes Capital of the realised profits of the past; by using his Credit he makes Capital of the expected profits of the future; but Money and Credit are equally saleable and valuable commodities.

The fact is that when we adopt Exchangeability as the sole essence and principle of wealth, the whole difficulty vanishes, for Money and Credit are equally Exchangeable Quantities.

NEGOTIABLE INSTRUMENTS.

There are two classes of paper documents which circulate in commerce, and are transferable by indorsement, which are yet of two distinct natures:

I. Those which arise out of a Bailment.

2. Those which arise out of a Debt.

When a person buys Goods or Money from another on Credit, the property in the goods or money passes absolutely to the buyer, and he gives as the price in exchange for them to the seller a Right of Action to demand the price of the goods at a future time, or an equal amount of money. All transactions on Credit are sales or exchanges. This Right of Action is also called a Credit or a Debt. This Right of Action, Credit, or Debt may be written down on

aper, and made transferable to bearer, or to order; and then it hay circulate in commerce, just like money. This paper document. not the title to any specific sum of money from the person of the lebtor at the fixed time. It is called a Credit because, if any hooses to purchase it, he only does so because he believes that the lebtor can pay it at the due time. The law of the transfer of this paper document follows the law of money. That is, if it is stolen rom the true owner, or a person finds it, the true owner can recover t from the possession of the thief or finder. But if the thief or inder passes it away in commerce for value, and a person purchases it innocently, not knowing that it is not the real property of the seller, and gives full value for it, he acquires the absolute property in it, and has the right to sue all the parties to it. That is, the property in it passes by Delivery. The rightful owner has lost the power of recovering it from an innocent holder for value. That is he has lost his jus vindicandi.

It is this quality of the property in the document passing by delivery and honest possession, which is termed negotiability. All documents made payable to bearer, or to order, entitling the holder to demand money from a person, possess this quality of Negotiability, with a few exceptions. This quality of Negotiability is called also Currency.

material

A simple abstract Right of Action not written down on any is an Incorporeal Chattel, but when it is written down on any material such as paper, it becomes a material commodity just like money.

As these documents are not titles to any specific money, and are only abstract Rights of Action against a person, they do not form one property with the money they may ultimately be paid in, but they are themselves independent Exchangeable, or Economic, quantities, whose value depends on exactly the same principle as the value of anything else, namely, whether they can be exchanged for money at the proper time.

In every system of jurisprudence they are classed as Wealth, Goods, Chattels, vendible Commodities, Merchandise, Incorporeal Chattels, Incorporeal Wealth.

They circulate in commerce exactly like money, and produce exactly the same effects as money on prices and production.

These abstract Rights of Action are termed Jura in personam. They comprehend Bank Notes, Cheques, Bills of Exchange, Promissory Notes, Dividend Warrants, &c., and Postage Stamps. They are termed in Law Valuable Securities.

NOVATION.

μετάθεσις, ἔξταξις: Renewal, or Transfer.

An Obligation, or Credit, or a Debt, may be discharged and extinguished by substituting a new Obligation, Credit, or Des for it. The new Obligation pays, discharges, and extinguishes the preceding one, and the extinguishment of the preceding Obligation is the consideration for the new one.

This is termed Novatio in Roman Law; perábeσis in Greek Law; and Renewal, or Transfer, by us.

This Novation may take place in two ways:

1. The Debtor may give his Creditor a new obligation of his own in payment of the former one, which the Creditor accepts in lieu and substitution of the preceding one. The new Obligation is the price, or payment, of the former one: and the extinguishment of the previous obligation is the consideration for the new one

As, for example, when a banker agrees to renew a Promissory Note for his customer, the new note pays and extinguishes the prior one, the extinction of the preceding Debt is the consideration for the new note, and no Debt, or Duty to Pay, arises until the new note becomes due.

Or when a Creditor has a Debt due to him payable on demand, and he agrees to take a Promissory Note at three months from his Debtor. The note pays, discharges, and extinguishes the Debt payable on demand; the extinction of the Debt payable on demand is the consideration for the Note; and no debt, or Duty to Pay, arises until the Note becomes due.

This form of Novation is termed Renewal by us.

2. The Debtor may, in payment of his own Debt, transfer to his Creditor a Debt due to him from some one else. If the Creditor agrees to receive this Debt due to his Debtor in payment of the Debt due to himself, this Debt due from the Debtor's Debtor pays and extinguishes the Debt due from the Debtor himself.

But the Creditor may retain his own Debtor as surety, in case of the new Debtor's failure to pay.

A familiar instance of this is where a Debtor pays his Creditor in Bank Notes. In payment of his own Debt, he transfers to his Creditor a debt due to him from the banker. If the Creditor agrees to receive the Notes in payment of his Debt the Debtor is discharged, and the Creditor agrees to take the banker as his Debtor. So with a Cheque.

So when a Debtor gives his Creditor a Bill of Exchange upon nother person in payment of his own Debt.

So if a Debtor and Creditor are customers of the same bank, the Debtor may give his Creditor a Cheque on his account in payment of a Debt. If the Creditor accepts the Cheque he pays it into his account: the banker transfers the Credit from the account of the Debtor to that of the Creditor. As soon as this is done the Creditor is paid just the same as if he had been paid in Money. The transaction between the Debtor and the Creditor is finally closed, even though the banker should fail immediately afterwards; the Debt of the banker to the Transferor is discharged, he becomes Debtor to the Transferee; the Transferor is released from his debt to the Transferee, who accepts the banker as his new Debtor.

This form of Novation is termed Transfer.

This Novation is equivalent to a Payment in Money.

When the Debtor's Debtor agreed to the transfer of the Debt, he was called Delegatus, and the transaction was termed Delegatio.

So Ulpian says (Dig. 50, 16, 187)—“ Verbum exactæ pecuniæ non solum ad Solutionem referendum est, sed etiam ad Delegationem."

So Basil, 25, 5, 56— ῥῆμα τῶν ἀπαιτηθέντων χρημάτων οὐ μόνον εἰς καταβολὴν ἀναφέρεσθαι δεῖ, ἀλλα καὶ ἐς ἔξταξιν.”

"The word Payment includes not only Payment in Money, but also the Transfer of a Credit."

So also "Solvit et qui reum Delegat."

"He also pays who transfers another Debtor."

Also "Delegare est vice suâ alium dare Creditori, vel cui jusserit."

"To delegate is to give another Debtor instead of one's self to the Creditor, or to his order."

The most striking example of the use of Novation in modern commerce is the use of Bank Notes and Cheques, by which almost all payments are made. All transfers of Credit in the same bank, and the Clearing-house, which, by an ingenious mechanism, transfers Credits from bank to bank exactly in the same way as Credits are transferred from one account to another in the same bank, are Novations.

The prodigious amount of business settled in this way may be judged of by the fact that in the London Clearing-house alone Credits to the amount of £7,000,000,000 are annually transferred between the London banks; and besides that there is the country Clearing-house, and every city in the country has its own. By this means, with the constantly increasing habit of keeping banking

accounts, these Banking Credits have now become for all practic purposes the Current Coin of the Realm.

A Novation when effected by persons living in different places, i known by the technical name of “An Exchange.” A person living in one country may be Debtor to one person living in another. and Creditor to another. He may pay his Creditor by sending him a Bill, or Order, on his Debtor, and thus the Obligations are extinguished. The mass of reciprocal transactions of this nature which take place between different countries is called the Foreign Exchanges (Exchange).

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PATENTS.

A Patent is one form of Incorporeal Property, and of a Property It is a Right granted by letters patent from the Crown for the exclusive making, using, and selling some commodity, restricted in modern times by Statute to a new invention.

Formerly the Crown claimed the prerogative of granting and selling to private individuals the exclusive Right of importing, manufacturing, and selling commodities.

This abuse proceeded to great lengths under Elizabeth. The revenues granted to her by her Spiritual and Temporal Parliaments together amounted to only £65,000 a year. To eke out these scanty resources, in the seventeenth year of her reign she revived the old system of granting patents for trade monopolies. Almost every conceivable ware-even the writing of Latin grammars—was made a monopoly. These became so oppressive that strong remonstrances were made in the Parliament of 1597. These produced little effect, and monopolies continued to increase. At last, in the Parliament of 1601, a stern and fierce onslaught on them was organized. Bacon, Fleming, and Cecil vapored about the prerogative of the Crown as something so divine that it was to be neither examined, canvassed, nor discussed. But the House was not terrified, and Cecil acknowledged that in all his experience he had never seen such a commotion in the House. The Queen, discerning the true temper of the people, with her usual tact, thanked the House for its care of the public weal, and promised that these abuses should be put a stop to. But they were revived under James I. At last the Statute 21 James I. c. 3 was passed, that all monopolies of trade were contrary to the fundamental laws of the realm, and they were prohibited in future, except only that