The Complete English Tradesman (1839 ed.)

by Daniel Defoe

Besides, the late law for noting and protesting inland bills, alters the case very much. Bills now accepted, are protested in form, and, if not punctually paid, are either returned immediately, or the person on whom they are drawn is liable to be sued at law; either of which is at best a blow to the credit of the acceptor.

A tradesman may, without hurt to his reputation, refuse to accept a bill, for then, when the notary comes he gives his reasons, namely, that he refuses to accept the bill for want of advice, or for want of effects in his hands for account of the drawer, or that he has not given orders to draw upon him; in all which cases the non-acceptance touches the credit of the drawer; for in trade it is always esteemed a dishonourable thing to draw upon any man that has not effects in his hands to answer the bill; or to draw without order, or to draw and not give advice of it; because it looks like a forwardness to take the remitter's money without giving him a sufficient demand for it, where he expects and ought to have it.

A tradesman comes to me in London, and desires me to give him a bill payable at Bristol, for he is going to the fair there, and being to buy goods there, he wants money at Bristol to pay for them. If I give him a bill, he pays me down the money upon receipt of it, depending upon my credit for the acceptance of the bill. If I draw this bill where I have no reason to draw it, where I have no demand, or no effects to answer it, or if I give my correspondent no advice of it, I abuse the remitter, that is, the man whose money I take, and this reflects upon my credit that am the drawer, and the next time this tradesman wants money at Bristol fair, he will not come to me. 'No,' says he, 'his last bills were not accepted.' Or, if he does come to me, then he demands that he should not pay his money till he has advice that my bills are accepted.

But, on the other hand, if bills are right drawn, and advice duly given, and the person has effects in his hands, then, if he refuses the bill, he says to the notary he does not accept the bill, but gives no reason for it, only that he says absolutely, 'I will not accept it—you may take that for an answer;' or he adds, 'I refuse to accept it, for reasons best known to myself.' This is sometimes done, but this does not leave the person's credit who refuses, so clear as the other, though perhaps it may not so directly reflect upon him; but it leaves the case a little dubious and uncertain, and men will be apt to write back to the person who sent the bill to inquire what the drawer says to it, and what account he gives, or what character he has upon his tongue for the person drawn upon.

As the punctual paying of bills when accepted, is a main article in the credit of the acceptor, so a tradesman should be very cautious in permitting men to draw upon him where he has not effects, or does not give order; for though, as I said, it ought not to affect his reputation not to accept a bill where it ought not to be drawn, yet a tradesman that is nice of his own character does not love to be always or often refusing to accept bills, or to have bills drawn upon him where he has no reason to accept them, and therefore he will be very positive in forbidding such drawing; and if, notwithstanding that, the importunities of the country tradesman oblige him to draw, the person drawn upon will give smart and rough answers to such bills; as particularly, 'I refuse to accept this bill, because I have no effects of the drawer's to answer it.' Or thus, 'I refuse to accept this bill, because I not only gave no orders to draw, but gave positive orders not to draw.' Or thus, 'I neither will accept this bill, nor any other this man shall draw;' and the like. This thoroughly clears the credit of the acceptor, and reflects grossly on the drawer.

And yet, I say, even in this case a tradesman does not care to be drawn upon, and be obliged to see bills presented for acceptance, and for payment, where he has given orders not to draw, and where he has no effects to answer.

It is the great error of our country manufacturers, in many, if not in most, parts of England at this time, that as soon as they can finish their goods, they hurry them up to London to their factor, and as soon as the goods are gone, immediately follow them with their bills for the money, without waiting to hear whether the goods are come to a market, are sold, or in demand, and whether they are likely to sell quickly or not; thus they load the factor's warehouse with their goods before they are wanted, and load the factor with their bills, before it is possible that he can have gotten cash in his hand to pay them.

This is, first, a direct borrowing money of their factor; and it is borrowing, as it were, whether the factor will lend or no, and sometimes whether he can or no. The factor, if he be a man of money, and answers their bills, fails not to make them pay for advancing; or sells the goods to loss to answer the bills, which is making them pay dear for the loan; or refuses their bills, and so baulks both their business and their credit.

But if the factor, willing to oblige his employers, and knowing he shall otherwise lose their commission, accepts the bills on the credit of the goods, and then, not being able to sell the goods in time, is also made unable to pay the bills when due—this reflects upon his credit, though the fault is indeed in the drawer whose effects are not come in; and this has ruined many an honest factor.

First, it has hurt him by drawing large sums out of his cash, for the supply of the needy manufacturer, who is his employer, and has thereby made him unable to pay his other bills currently, even of such men's drafts who had perhaps good reason to draw.