EXCHANGE

exchange, in general, the action of mutual giving and receiving objects, interests, benefits, rights, &c. the word comes through the french from the late lat. _excambium_ (see excambion). the present article deals with the theory and practice of exchange in monetary transactions, but this may conveniently be prefaced by a brief statement as to the law relating to the exchange of property and other matters. in english law exchange is defined as the mutual grant of equal interests, the one in consideration of the other. the ancient common law conveyance had certain restrictions, e.g. identity in quantity of interest, fee-simple for fee-simple, &c., entry to perfect the conveyance, and an implied warranty of title and right of entry by either party in case of eviction. such exchanges are now effected by mutual conveyances with the usual covenants for title. exchanges are also frequently made by order of the board of agriculture under the inclosure acts, and there are also statutes enabling ecclesiastical corporations to exchange benefices with the approval of the ecclesiastical commissioners. the international exchange of territories is effected by treaties. the exchange of prisoners of war is regulated by documents called "cartels" (med. lat. _cartellus_, diminutive of _carta_, paper, bill), which specify a certain agreed-on value for each rank of prisoners. the practice superseded the older one of ransom at the end of a war. by the regimental exchanges act 1875 the sovereign may by regulation authorize exchanges by officers from one regiment to another. (for "labour exchanges" see unemployment.) exchange in relation to money affairs denotes a species of barter not of goods but of the value of goods, a payment in one place being exchanged for a payment in another place. the popular statement of the theory of exchange represents four principals involved in two transactions. a and b are two persons residing in one place different from the domicile of c and d; a sells goods to c; b buys goods from d; a sells his claim on c to b, who remits it to d in satisfaction of his debt, and d receives the cash from c, so that, assuming the two transactions to be of equal value, one piece of paper satisfies the four parties to these two transactions, and the trouble, expense and risk of sending money from both places are avoided. the piece of paper which performs the service may be a telegraphic order, cheque or bill of exchange. in this elementary proposition there would be no difficulty of exchange, as the full value of a's claim on c would be paid for by b, who is under the necessity of sending in exactly similar amount of money to d; but it can be seen that in actual practice the claims of one place on another place would not be exactly balanced by the necessities of the one place to meet obligations in the other place; thus arises the complication of exchange, which may best be described as the price of monetary claims on distant debtors. supposing, for example, that a in london had a claim on c in edinburgh amounting to l100, and that b in london did not require to remit more than l90 to d in edinburgh, it is evident that b in london must be offered some inducement to take over the whole of a's claim. b might give a l99:19:0, and could then, after satisfying his debt to d, have l10 to his credit in edinburgh, which he could retain there at interest until he had incurred further liability to d, or he could have the balance of l10 returned him in coin at an expense, say, of sixpence; this would leave b with a profit of sixpence on the transaction, and, assuming that these figures are reasonable, exchange on edinburgh in london would be one shilling discount per l100. supposing the necessities of b induced him to offer a only l99:14:0 for his l100 claim, a would then prefer that c remitted him l100 in coin, which, on the above scale of expenses would cost 5s. and a would receive l99:15:0 net. on these premises, exchange on edinburgh in london cannot fall below 1/4% discount, and the same circumstances prevent it from rising above 1/4% premium, for b, in no case, would pay more for a's claim than l100 plus the cost of sending coin to scotland. if this basis is appreciated, all exchange problems between different countries can be mastered, and the quotations in the daily papers of cable payments, sight drafts (cheques) and long bills are then understood and supply an interesting indication of the state of international financial relations. as shown above, the balance of indebtedness must eventually be remitted by coin, and consequently when exchange in any city is quoted at one or other of the limit points given in our example as 1/4% discount or 1/4% premium, this exchange immediately acquires a very serious importance, because with the development of modern monetary systems under which enormous trade is carried on with a most moderate foundation of actual coin the weakening or strengthening of that foundation is a very vital matter. while the understanding of the theory is essential for any facile interpretation of an exchange, there are of course innumerable details of practice which require to be known to identify the limit points of exchange in any particular city. the limit points can only be taken advantage of by banking experts, and, although we assume a trader remitting his indebtedness in coin when he is asked to pay too high a price for his bill of exchange, in actual affairs the banker will supply the cheque or bill and himself will do the professional business of sending away bullion. similarly, we have represented one trader drawing on another trader and selling his draft to a third trader who remits the draft to a fourth. in actual practice, however, no. 1 draws on no. 2 and disposes of his draft to a banker; no. 4 draws on no. 3 and sells his draft to a banker; because, speaking generally, whenever goods are shipped, the shipper immediately requires his money; he draws a bill against the goods, and it is the function of a banker to help, as a sort of debt-collecting agency, by buying these drafts; and the bank, being a mart for all forms of remittance, gets an immense variety of demand for cable payments, cheques and bills on all centres. this does not affect the theory, for it must be remembered that the banker is a necessary link between the buyer and seller of exchange, because the seller can only sell what he has and the buyer must have exactly what he wants. to return to the question of limit points: if a universal currency system existed, with the same monetary standard that is used in england, and the coinage kept in a proper condition of weight and fineness, and the coin readily supplied to meet every reasonable claim--if, in fact, the pound sterling were the prevalent coin and the english banking system obtained everywhere, then we should find all exchange quotations as simple as our case of london and edinburgh, that is to say, all exchanges would be quoted at par or a premium or a discount. the limit points in any place of the exchange on london would represent simply and obviously the cost of the transmission of the coin. these limit points would vary at each place according to the distance from london, the cost of freight, the risk involved in the transmission and the local rate of interest. on the continent of europe some advance has been made in the direction of a universal coinage. countries subscribing to the latin union have agreed on the franc as a common unit, and belgium, switzerland, france and italy quote exchange between themselves at a premium or discount. greece, spain and other countries are also parties to the arrangement, but their currencies are in a bad state, and the exchange quotations involve a considerable element of speculation. we have, however, to deal with another factor in international finance, namely, the enormous variety of currency systems; and we have then to discover, in each case, the exchange which represents par and corresponds to our l100 for l100 in the london-edinburgh example. the united states furnishes perhaps the easiest problem, and we must find out how many dollars in gold contain exactly the same amount of the precious metal as is contained in one hundred sovereigns. the answer is 486-5/8, and the arithmetic is a question of the mint laws of the two countries. gold coin in the united states contains one-tenth alloy and in england one-twelfth alloy. ten dollars contain 258 grains of gold, nine-tenths fine. one pound contains 123.274 grains of gold, eleven-twelfths fine, consequently l100 is worth $486-5/8, or, to be exact, $486-2/3, and when cable payments between london and new york are quoted at 4.86-5/8 for the l1 sterling, exchange is about par. as a cable payment is an immediate transfer from one city to another, no question of interest or other charge is involved. owing to the cost of sending gold as detailed above, the new york cable exchange varies from about 4.84 to 4.89-1/2; at the former point gold leaves london for new york, and at the latter point gold comes to england. besides insurance, freight, packing, commission and interest, there must also be considered the circumstance that coin taken in bulk is always a little worn and under full weight, and in the process of turning sovereigns into dollars, the result would not bear out the calculation based on the mint regulations: consequently, when taking gold from london, the demand would first fall on the raw metal as received from south africa or australia to be minted in the united states, then on any stock of american coin the bank of england might have and be willing to sell by weight (which would be accounted by tale in new york), and lastly the demand would be satisfied by sovereigns taken by tale from the bank of england and converted by weight in america. the instance of the american quotation may be further taken to explain some of the numerous points which the study of the exchange involves. in the first place, it will be noted that we have quoted the price in dollars. in london, business in bills, &c., on new york is quoted either in pence or in dollars, that is to say, payments are negotiated for so many dollars either at 49-3/16 pence per dollar, or at the equivalent rate $4.88 for the pound. in practice it is much more convenient to quote in london in the money of the foreign country, as it makes comparison with the foreign rate on london very simple. some foreign countries quote exchange on london in pence, and then, of course, in relation to those countries the same practice will obtain in england, but the majority of the exchange quotations on london are in francs, marks, gulden, lire, kronen or other foreign money. another point which must be explained is the reason why exchange varies between what we have called the limit points; why there is sometimes so much demand for bills on london and why at other times so many bills are being offered. similar causes operate on other exchanges, and if we develop the new york case we shall provide explanations for exchange movements in other countries. at one time the financial relations between england and america were as follows. england was the principal creditor of the united states, and the latter country had to remit continually very large amounts in payment of interest on english money and profits on english investments, in payment for shipping freights, for banking commissions, insurance premiums and an immense variety of services, besides paying for the large imports which crossed the atlantic from english ports. in the fall of the year these payments would be more than offset by the enormous exports of food-stuffs, cotton, tobacco, &c., so that during the first half of the year exchange would be at or about the limit of 4.89-1/2 and gold would have to be sent from new york to supplement the deficient quantity of bills. in the autumn the produce bills would flood the exchange market and gold would be sent from london as exchange got to the other limit point of 4.84. these conditions are still very potent, but latterly another element has entered into the position, and the new development is so powerful as to reverse sometimes what we may call the natural and legitimate movement in the exchange. this new element is the more intimate banking and financial relationship which has been established between the two countries. as american conditions have become more stable, with better security for capital and an assured feeling about the currency of the united states, bankers in london have gladly allowed their banking friends in new york and other large cities to draw bills on london whenever there was a good demand for sterling remittances. we have, therefore, to consider a fresh type of bill of which the drawer has no claim on the drawee, but, on the other hand, incurs a debt to the drawee. to take a very usual method, a banker in wall street, new york, will advance money to stockbrokers, investors and speculators against bonds and shares with a 20% margin. he deposits this security with a trust company in new york which acts both for the american and english banker. the wall street banker then draws a bill at 60 days' sight or 90 days' sight on the banker in lombard street and sells this draft to supply the money he lends the stockbroker. two or three months hence the new york banker must send money to london with which to meet the bill, so that, whereas, in the case of a commercial bill, the produce is despatched and in due course the consignee must find the money for the bill, in the case of a finance bill, as it is called, the bill is drawn and in due course the drawer must send the value with which it is to be honoured. in any event the acceptor, the london banker, has to pay the bill, so that it will be easily understood that relations of the greatest confidence are necessary between the drawer and drawee before finance bills of this class can be created. the profit arising from the transaction we have sketched is realized by the separate parties in this way. the new york banker lends money for three months, say, at 5% per annum, he pays a commission of 1/32% to the trust company which has custody of the security, a charge equivalent to 1/8% interest per annum. he draws on london at 90 days' sight and sells the bill at 4.83-5/8, the cable rate being 4.87-3/4, the buyer of a three months' bill making the allowance for the english bill stamp of 1/2 per mille and the london discount rate of 3%. the drawer of the bill must also pay a commission of 3/16% to the london banker who accepts the draft; this is equivalent to another 3/4% per annum in the rate of discount, so that money raised in this way costs 1/8% for the trust company, 3% the london discount rate, about 1/4% for bill stamps, and 3/4% for london commission--altogether, 4-1/8%; and, as the money is loaned at 5%, there appears to be 7/8% profit to the drawer of the bill. this, however, is on the assumption that the cable rate is still 4.87-3/4 when the bill falls due for payment and that the drawer would have to pay that price to telegraph the money to meet the draft. but exchange on london can go up or down between 4.84 and 4.89-1/2, and if at the end of the three months the cable rate is 4.84 the new york banker will be able to cover his bill at almost the same rate at which he sold it and will only be out of pocket to the extent of the commissions and stamps, so that the accommodation will only cost him 1-1/2% and his profit will be 3-1/2%. if he has to pay more than 4.87-3/4 for his cable at the maturity of the bill his profit will be less than 7/8%, and he may even be a loser on the transaction. it is obvious, then, that a high rate of interest in new york, with a high rate of exchange on london and a low rate of discount in england, would induce the creation of these finance bills. the supply of these bills would prevent new york exchange reaching the limit point at which gold leaves the united states, and the maturity of these bills in the autumn would ensure a demand for the produce bills and possibly prevent exchange from falling to the other limit point at which london has to send gold to new york. we have pointed out the essential difference between these finance bills and what we have called produce bills, but there is another very striking difference, that of the question of supply. these finance bills are obviously very difficult to limit in their amounts; produce bills are, of course, limited by the extent of the surplus crops of the united states and by the demand for the produce in europe, but so long as it is mutually satisfactory to the big finance houses in both countries to draw on credit granted in london, so long may these accommodation bills be created, and the pressure of the bills in new york may depress exchange so much that gold leaves london at a time when it is required in other directions. in such a case the embarrassment caused by this artificial drain of the gold reserve would much more than offset the amount of the commission earned by the accepting houses. the bank of england may have to raise its rate of discount at the expense of the entire home trade; probably, also, with the rise in the value of money, consequent on the diminished resources, all investment securities fall in value and more onerous terms must be submitted to by the government, corporations and colonies, in the issue of any loans they may require. it will, therefore, be appreciated that, although these finance bills may be perfectly safe, their excessive creation is viewed with great disfavour, and considerable apprehension is felt when the adventures of speculators in new york make great demands for loans against stocks and shares, and, through the instrumentality of these finance bills, shift the burden on to the shoulders of the london discount market. the effect of this is to level money rates as between new york and london, and in the process the pressure falls on london and the relief goes to america. eventually, of course, the bills must be met and funds sent for that purpose from across the atlantic, but in the meanwhile the disturbance of the gold supply is an inconvenience. we have explained the process of employing credits granted in london to finance wall street; there are, also, many other types of bill to which the acceptor lends his name on the assurance that he will in due course be supplied with the funds required to meet the acceptance. in the case of the produce bills, a london banker will accept the bills in order that they may be more easily marketable than if they were drawn direct on the actual consignee of the cotton, tobacco or wheat. the consignees in liverpool, &c., pay a commission for this assistance and reimburse the london bank as the produce is gradually disposed of. the transaction appears slightly more complicated when english bankers accept bills for produce shipped from the united states to merchants living in hamburg, genoa, singapore and all other great ports, but the principle is the same, and the influence of such business on the exchange affects, in the first instance, the quotation between america and london, but afterwards, when money must be sent to london with which to honour the bills, the exchanges with germany, italy or the straits settlements bear their share in the eventual adjustment, the spinners, tobacco manufacturers and corn factors requiring drafts on london where so much of the trade of the world is financed. we shall have to consider later the reasons which ensure to london this peculiar and predominant position. we have so far used the american exchange as an example to explain causes which produce fluctuations in all the principal exchanges on london and to show the points between which fluctuations are limited. the fact that america is still developing at a much greater rate than the old world makes an important distinction between the financial position in new york and the financial position of the big capitals in europe. there is not in america the huge accumulation of savings and investment money which the old world has collected, so that whereas europe helps to finance the united states, the latter country has so many home enterprises that she can spare none of her funds to assist europe. it would not be possible for london to draw on new york such bills as we have described as finance bills, for they could never be discounted there except on the most onerous terms, and there is nothing in america which corresponds to the london money market. we have to deal with dollars and cents in america, with francs in france, with marks in germany, and different money units in nearly every country; but, given the mint regulations, the theoretical par of exchange and the theoretical limit points are arrived at by simple arithmetic. an exhaustive statement with reference to every country would involve an amount of tedious repetition, so that for the purposes of this article it is more instructive to consider the essential differences between the important exchanges than to go into the details of coinage, which would appeal rather to the numismatist than to the exchange expert. the united states, offering as it does a vast field for profitable investment, must annually remit huge amounts for interest on bonds and shares held by europeans; coupons and dividend warrants payable in america are offered for sale daily in london, and at the end of the quarters the amount of these claims, coupons and drawn bonds is very large, and a considerable set off to the indebtedness of europe for american produce. it is often asserted that the united states is rapidly getting sufficiently wealthy to repurchase all these bonds and shares; but whenever trade conditions are exceptionally good in the states, fresh evidence is forthcoming that assistance from london and europe is essential to finance the commercial development of the united states. this illustrates a feature common to all new countries, and the effect is that they make annual payments to the older countries and especially to england. a government loan or other large borrowing arranged abroad will immediately move the exchange in favour of the borrowing country. a tendency adverse to the united states results from the drafts and letters of credit of the large number of holiday makers who cross the atlantic and spend so much money in europe. when remittance is made of the incomes of americans who have taken up their residence in the old world the exchange is affected in a similar manner. in one respect the united states stands far superior to most of the older countries. there are no restrictions on the free export of gold when exchange reaches the limit point showing that the demand for bills on london exceeds the supply. new york (with london and india) is a free gold market, and this is undoubtedly one of the reasons why money is so readily advanced to the united states, and the finance bills, to which we referred above, would not be allowed to the same extent were it not for the fact that new york will remit gold when other forms of remittance are insufficient to satisfy foreign creditors. when exchange between paris and london reaches the theoretical limit point of 25.32 (25 francs 32 centimes for the l1 sterling), gold does not leave paris for london unless the bank of france is willing to allow it. by law, silver is also legal tender in france, and if the state bank is pressed for gold a premium will be charged for it if it is supplied. gold may be collected on cheaper terms in small amounts from the great trading corporations or from the offices of the railways, but a large shipment can only be made by special arrangement with the bank of france. similarly, in germany, where a gold standard is supposed to obtain, if a banker requires a large amount of gold from the reichsbank he is warned that he had better not take it, and if he persists he incurs the displeasure of the government institution to the prejudice of his business, so that the theoretical limit point of 20 marks 52 pf. to the pound sterling has no practical significance, and gold cannot be secured from berlin when exchange is against that city, and germany has, when put to the test, an inconvertible and sometimes a debased currency. there is no state bank in the united states, and no government interference with the natural course of paying debts. on the other hand, when monetary conditions in new york indicate a great shortage of funds, and rates of interest are uncomfortably high, the united states treasury has sometimes parted with some of its revenue accumulations to the principal new york bankers on condition that they at once engage a similar amount of gold for import from abroad, which shall be turned over to the treasury on arrival. as these advances are made free of interest the effect is to adjust the limit point of 484 to about 485, and the united states treasury seems to have taken a leaf out of the book of the german reichsbank, which frequently offers similar facilities to gold importers and creates an artificial limit point in the berlin exchange. the reichsbank gives credit in berlin for gold that has only got as far as hamburg, and sometimes gives so many days' credit that the agent in london of german banking houses can afford an extravagant price for bar gold and even risk the loss in weight on a withdrawal of sovereigns, although the exchange may not have fallen to the other limit point of 20.32. in england the only effort that is made to attract gold is some action by the bank of england in the direction of raising discount rates; occasionally, also, the bank outbids other purchasers for the arrivals of raw gold from south africa, australia and other mining countries. quite exceptionally, for instance during the boer war, the bank of england allowed advances free of interest against gold shipped to london. many of the principal banking houses in all the important capitals receive continually throughout the day telegraphic information of the tendency and movement of all the exchanges, and on the smallest margin of profit a large business is done in what is called arbitrage (q.v.). for instance, cheques or bills on london will be bought by x in paris and remitted to y in london. x will recoup himself by selling a cable payment on z in new york. z will put himself in funds to meet the cable payment by selling 60 days' sight drafts on y, who pays the 60 days' drafts at maturity out of the proceeds of the cheques or bills received from paris, and this complicated transaction, involving no outlay of capital, must show some minute profit after all expense of bill stamps, discount, cables and commissions has been allowed for. such business is very difficult and very technical. the arbitrageur must be in first-class credit, must make the most exact calculation, and be prompt to take advantage of the small differences in exchange, differences which can be only temporary, as these operations soon bring about an adjustment. the european exchanges with which london is chiefly concerned are paris and berlin, through which centres most of the financial business of the rest of europe is conducted; for example, scandinavia, russia and austria bank more largely with berlin than elsewhere. italy, switzerland, belgium and spain bank chiefly in paris. european claims on london or debts to london are settled mostly through germany or france, and consequently the german and french rates of exchange are affected by the relation of england with the rest of the continent. the exchanges on paris and berlin are therefore most carefully watched by all those big interests which are concerned with the rate of discount and the value of money in london. if the paris cheque falls to 25.12, gold arrivals in the london bullion market will be taken by french bankers unless the profit shown by the exchange on some other country enables other buyers to pay more for the gold than paris can afford. if the paris cheque falls still further, it would pay to take sovereigns from the bank of england for export, and so much would be taken as would satisfy the demand to send money to france, or until the consequent scarcity of money in london made rates of interest so high in england that french bankers would prefer to leave money and perhaps increase their balances. as between london and paris and berlin the greatest factor operating the exchanges is the relative value of money in the three centres. there is no great excess of trade balance at any season in favour of germany or france and against england. on the other hand the banking relations between those countries are very intimate, and if funds can be very profitably employed in one of these places, there will be a good demand for remittance, and exchange will move in favour of that place, that is to say, exchange will go towards that limit point at which gold will be sent. the great pastoral and agricultural countries like south america, egypt and india are in a position to draw very largely on london when their crops or other products are ready for shipment. in the early months of the year gold goes freely to south america to pay for the cereals, hides and meat, and in the autumn egypt and india send such quantities of cotton and wheat that exchange moves heavily in favour of those countries, and gold must go to adjust the trade balance. during the rest of the year the gold tends to return as these countries always require bills on london or some form of payment to meet interest and dividends on european money invested in their government debts, railways and trading enterprises, and to pay for the european manufactures which they import. exchange then moves in favour of england, and the bank of england can replenish its reserve. over the greater part of the world the rate of exchange on london is an indication simply of the trade balance. the greater part of the world receives payment for food stuffs, and has to pay for european manufactures, shipping freights, banking services and professional commissions. the greatest complication in exchange questions arises when we have to deal with a country employing a silver standard, and, fortunately for the development of trade, this problem has disappeared of late years in the case of india, ceylon, japan, mexico and the straits settlements, and now the only important country using silver as a standard is china. when the monetary standard in one country is only a commodity in another country we are as far removed from the ideal of an international currency as can be imagined. we can fix no limit points to the exchange and we cannot settle any theoretical par of exchange. the price of silver in the gold-using country may vary as much as the price of copper or tin, and in the silver-using country gold is dealt in just as any other metal. in both cases the only metal of constant price is the metal which is used as the money standard. the easiest method of explaining the position is to consider that any one in a gold-using country having a claim in currency on a silver-using country has to offer for sale so many ounces of silver, and vice versa the exporter in a silver-using country sending produce to london has to offer a draft representing so many ounces of gold. this introduces a very unsatisfactory element. to take a practical example:--a tea-grower in china has raised his crop in spite of the usual experience of weather and labour difficulties and the endless risks that a planter must face; the tea is then sent to london to take its chance of good or bad prices, and at the same time the planter has a draft to sell representing locally a certain weight of gold; now, in addition to all the risks of weather and trading conditions, and the chances of the fluctuations in the tea market, he is compelled to gamble in the metal market on the price of gold. some years ago when a large number of important countries employed a silver standard it was seriously suggested that a fixed ratio should be agreed internationally at which gold and silver should be exchanged. this advocacy of bimetallism (q.v.) was especially persistent at a time when silver had suffered a very great fall in price and the prominent exponents could generally be identified either as extremely practical men who were interested in the price of silver, or as very inexperienced theorists. the difficulty of the two standards was successfully solved by discarding the use of silver, and the chief silver-using countries adopted a gold standard which has given greater security for the investment of foreign capital, has simplified business and brought about a large increase of trade. in the case of a country of which the government has been subject to great financial difficulties, gold has been shipped to satisfy foreign creditors so long as the supply held out, and the exchange with such a country will continue to move adversely with every fresh political embarrassment and any other economic cause reflecting on the national credit. with the collapse of the monarchy in brazil the value of the milreis fell from 27d. to 5d., and all the spanish-american countries have from time to time afforded most distressing examples of the demoralizing effects on the currency of unstable and reckless administration. in europe similar results have been shown by the mistrust inspired by the governments of spain, greece, italy and some other states. the raising of revenue by the use of the printing press creates an inconvertible and depreciating paper currency which frightens foreign capital and severely taxes the unfortunate country which must make payment abroad for the service of debt and other obligations. with the tardy appreciation of the old proverb that "honesty is the best policy" nearly every country of importance has made strenuous efforts to improve the integrity of its money. exchange quotations are not published from many of the british colonies, as their financial business is in the hands of a comparatively few excellently managed banks, which establish, by agreement, conventional exchanges fixed for a considerable period, notably in the case of australia, new zealand and south africa. the scottish and irish banks supply similar examples of a monopoly in exchange. the following table taken from the money article of a london daily paper indicates the exchanges which are of most interest to england:-- _foreign exchanges._ +-----------------------+-----------------+----------------+----------------+ | | june 14. | june 15. | june 16. | +-----------------------+-----------------+----------------+----------------+ | paris, cheques | 25 f. 18 c. | 25 f. 18 c. | 25 f. 18 c. | | " mkt. discount | 2-1/2-5/8 p.c. | 2-1/2-5/8 p.c. | 2-1/2-5/8 p.c. | | brussels, cheques | 25 f. 23 c. | 25 f. 23-1/2 c.| .. | | berlin, sight | 20 m. 48-3/4 pf.|20 m. 48-3/4 pf.| 20 m. 48 pf. | | " 8 days | 20 m. 46-1/2 pf.|20 m. 46-1/4 pf.|20 m. 45-1/2 pf.| | " mkt. discount | 3-7/8 p.c. | 3-7/8 p.c. | 3-7/8 p.c. | | vienna, sight | holiday |24 kr. 02-1/4 h.|24 kr. 02-3/4 h.| | amsterdam, sight | 12 fl. 13-1/8 c.|12 fl. 13-1/4 c.| .. | | italy, sight | holiday | 25 lire 15 c. | .. | | madrid, sight | " | 27 ps. 68 | .. | | lisbon, sight | " | .. | .. | | st petersburg, 3 ms. | 94 r. 10 | 94 r. 10 | .. | | bombay, t.t. | 1s. 4d. | 1s. 4d. | 1s. 4d. | | calcutta, t.t. | 1s. 4d. | 1s. 4d. | 1s. 4d. | | hong-kong, t.t. | 2s. 1-1/16d. | 2s. 1-1/16d. | 2s. 1-1/16d. | | shanghai, t.t. | 2s. 10-3/4d. | 2s. 10-5/8d. | 2s. 10-5/8d. | | singapore, t.t. | 2s. 4-1/16d. | 2s. 4-1/16d. | 2s. 4-1/16d. | | yokohama, t.t. | 2s. 0-3/8d. | 2s. 0-3/8d. | 2s. 0-3/8d. | |*rio de jan'ro, 90 days| 16-9/16d. | 16-9/16d. | 16-17/32d. | |*valparaiso, 90 days | | | | | coml. | 14-3/8d. | 14-3/8d. | 14-1/4d. | |*b. ayres, 90 days | 48-1/8d. | 48d. | 48d. | +-----------------------+-----------------+----------------+----------------+ * these rates are telegraphed on the day preceding their receipt. in the case of paris and berlin it will be noticed that the local rate of discount is also given, as the value of money in these centres, in relation to the value of money in london, is the most important factor in a movement of the exchange. vienna has become important owing to the improvement in the financial position of austria, and still greater improvement is shown in the case of italy, whose currency stands in the above list better even than that of france. spain, which should stand at about the same rate, still has a depreciated paper currency. lisbon stands also at a discount, as the milreis should be worth 53-1/4 pence. in russia the exchange showing 94.10 roubles to l10 is carefully and cleverly controlled in spite of the bad internal position. the india exchanges move slightly, as the currency is firmly established at the rate of 15 rupees to the l1. hong-kong quotes for the old mexican dollar and a british trade dollar; shanghai for the tael containing on an average 517-1/2 grains of fine silver. the straits settlements have fixed their money on a gold basis at 2s. 4d. per dollar, on the lines of the arrangement made in india. in japan there is a gold standard, and par of exchange is 2s. 0-1/2d. for the yen. brazil, chile and argentina have a depreciated paper currency, and the last quotation of 48d. is for the gold dollar equal to five francs, but there is a premium on gold in the river plate of 127.27-1/2% and for the present a gold standard is re-established on this basis. the letters t.t. with the eastern exchanges signify telegraphic transfer or the rate for payments made by cable. the very important new york rates are always given in another part of the daily paper with other details of american commercial interest. these rates are all quotations for payments in england, and all over the world the exchange on london is the exchange of the greatest importance. this unique position was gained originally, probably, through the geographical position of the united kingdom, and has been maintained owing to several reasons which secure to london a peculiar position by comparison with any other capital. britain's colossal trade ensures a supply of and a demand for english remittances. even when goods or produce are dealt in between foreign countries a credit is opened in london, so that the shipper of the produce can offer in the local market a bill of exchange which is readily saleable. with the highly developed banking system a large amount of deposits is collected in london, and the result is that bills of any usance up to six months can be immediately discounted, and the proceeds, if required, can be handed over in gold. there are in london a great number of wealthy banks and banking houses whose reputation and solidity allow any one of them to accept bills for amounts varying from one to ten millions sterling, whereby large commissions are earned. these four advantages, namely, a free gold market, a huge trade, an enormous accumulation of wealth, and a discount market such as exists nowhere else, have made london an unrivalled financial centre, and consequently bills on london are an international money and the best medium of exchange. authorities.--_a b c of the foreign exchanges_, by george clare; _foreign exchanges_, by goschen; _arbitrage_, by deutsch; _arbitrages et parites_, by ottomar haupt; swoboda, _arbitrage_ (12th edition), by max fuerst. (e. m. ha.) exchequer. the word "exchequer" is the english form of the fr. _echiquier_, low lat. _scaccarium_, and its primary meaning is a chess-board (see chess). as the name of a government department dealing with accounts it is derived from the exchequer or the "abacus" by means of which such accounts were kept, such a contrivance being almost universally in use before the introduction of the arabic notation. in england the department or court of accounts was named originally "the tallies" from the notched sticks or tallies which constituted the primitive means of account-keeping (which were only abolished in 1826), and was only subsequently, probably in the reign of henry i., named the exchequer from the use of the abacus. both the name and the general features of the institution may reasonably be attributed to norman influence, since we find both in normandy and in the norman kingdom of sicily, as well as in scotland and ireland; the two latter cases being directly due to english example. as a court of law the exchequer owed its existence in england, as elsewhere, to the necessity of deciding legal questions arising from matters of account, and its secondary activities soon overshadowed its original functions. we cannot say whether the exchequer, as known in england, is older than the beginning of the 12th century. the treasury, which may be regarded as one of its constituents, dates from before the conquest, and the officers of the exchequer who were drawn from the treasury staff can be traced back to domesday. but our earliest information about the exchequer itself, apart from that afforded by the pipe rolls (see record), rests on a treatise (_dialogus de scaccario_) written about a.d. 1179 by richard, bishop of london and treasurer of england. his father, nigel, bishop of ely, had been treasurer of henry i., and nephew to that king's great financial minister roger, bishop of salisbury. nigel is said to have reconstituted the exchequer after the troubles of stephen's reign upon the model which he inherited from his uncle. the angevin, or rather the norman, exchequer cannot be regarded in strictness as a permanent department. it consisted of two parts: the lower exchequer, which was closely connected with the permanent treasury and was an office for the receipt and payment of money; and the upper exchequer, which was a court sitting twice a year to settle accounts and thus nearly related to the curia regis (q.v.). we dare hardly say that either exchequer existed in vacation; indeed the word (like the word "diet") seems to have been limited at first to the actual sitting of the king's court for financial purposes. the michaelmas and easter exchequers were the sessions of this court "at the exchequer" or chess-board as it had previously sat "at the tallies." the constitution of the court was that of the normal frankish curia. the king was the nominal president, and the court consisted of his great officers of state and his barons, or tenants-in-chief, and it is doubtless due to the fact that the exchequer was originally the curia itself sitting for a special purpose that its unofficial judges retained the name of "barons" until recent times. of the great officers we may probably find the steward in the person of the justiciar, the normal president of the court. he sat at the head of the exchequer table. the butler was not represented. the chancellor sat on the justiciar's left; he was custodian _ex officio_ of the seal of the court, and thus responsible for the issue of all writs and summonses, and moreover for the keeping of a duplicate roll of accounts embodying the judgments of the court. on the left of the chancellor, and thus clear of the table, since their services might be required elsewhere at any moment, sat the constable, the two chamberlains and the marshal. the constable was the chief of the outdoor service of the court, and was responsible for everything connected with the army, or with hunting and hawking. the two chamberlains were the lay colleagues of the treasurer, and shared with him the duty of receiving and paying money, and keeping safe the seal of the court, and all the records and other contents of the treasury. the marshal, who was subordinate to the constable, shared his duties, and was specially responsible for the custody of prisoners and of the vouchers produced by accountants. at the head of the table on the justiciar's right sat, in henry ii.'s time, an extraordinary member of the court, the bishop of winchester. the treasurer, like the chancellor a clerk, sat at the head of the right-hand side of the table. he charged the accountants with their fixed debts, and dictated the contents of the great roll of accounts (or pipe roll) which embodied the decisions of the court as to the indebtedness of the sheriffs and other accountants. these persons with certain subordinates constituted the court of accounts, or upper exchequer, whereas the lower exchequer, or exchequer of receipt, consisted almost exclusively of the subordinates of the treasurer and chamberlains. in the upper exchequer the justiciar appointed the calculator, who exhibited the state of each account by means of counters on the exchequer table, so that the proceedings of the court might be clear to the presumably illiterate sheriff. the calculator sat in the centre of the side of the table on the president's left. the chancellor's staff consisted of the _magister scriptorii_ (probably the ancestor of the modern master of the rolls), whose duties are not stated; a clerk (the modern chancellor of the exchequer) who settled the form of all writs and summonses, charged the sheriff with all fines and amercements, and acted as a check on the treasurer in the composition of the great roll; and a scribe (afterwards the comptroller of the pipe), who wrote out the writs and summonses and kept a duplicate of the great roll, known as the chancellor's roll. the constable's subordinates were the marshal and a clerk, who, besides the duty of paying outdoor servants of the crown, had the special task of producing duplicates of all writs issued by the curia regis. the treasurer and chamberlains, being colleagues, had a joint staff, the clerical or literate members of which were servants of the treasurer, while the lay or illiterate members depended on the chamberlains. hence while the treasurer and his clerks kept their accounts by means of rolls, the chamberlains and their serjeants duplicated them so far as possible by means of tallies. thus the great roll was written by the treasurer's scribe (the engrosser, afterwards the clerk of the pipe), while the payments on account and other allowances to be credited to the sheriff were registered by the tally cutter of the chamberlains. in the exchequer of receipt the staff was similarly divided between the treasurer and chamberlains; the treasurer having a clerk who kept the issue and receipt rolls (the later clerk of the pells) and four tellers, while each of the chamberlains was represented by a knight (afterwards the deputy chamberlains), who controlled the clerk's account by means of tallies, and held their lands by this serjeanty; these three had joint control of the treasury, and could not act independently. the other serjeants were the knight or "pesour" who weighed the money, the melter who assayed it, and the ushers of the two exchequers. it should be noted that all the lay offices of the treasury in both exchequers were hereditary. henry ii. had also a personal clerk who supervised the proceedings personally in the upper, and by deputy in the lower, exchequer. the business of the ancient exchequer was primarily financial, although we know that some judicial business was done there and that the court of common pleas was derived from it rather than from the curia proper. the principal accountants were the sheriffs, who were bound, as the king's principal financial agents in each county, to give an account of their stewardship twice a year, at the exchequers of easter and michaelmas. half the annual revenue was payable at easter, and at michaelmas the balance was exacted, and the accounts made up for the year, and formally enrolled on the pipe roll. the fixed revenue consisted of the farms of the king's demesne lands within the counties, of the county mints, and of certain boroughs (see borough) which paid annual sums as the price of their liberties. danegeld was also regarded as fixed revenue, though after the accession of henry ii. it was not frequently levied. there were also rents of assarts and purprestures and mining and other royalties. the casual revenue consisted of the profits of the feudal incidents (escheat, wardship and marriage), of the profits of justice (amercements, and goods of felons and outlaws), and of fines, or payments made by the king's subjects to secure grants of land, wardships or marriages, and of immunities, as well as for the hastening and sometimes the delaying of justice. besides this, there were the revenues arising from aids and scutages of the king's military tenants, tallages of the crown lands, customs of ports, and special "gifts," or general assessments made on particular occasions. for the collection of all these the sheriff was primarily responsible, though in some cases the accountants dealt directly with the exchequer, and were bound to make their appearance in person on the day when the sheriff accounted. we gather both from tradition and from the example of the scottish exchequer that the farms of demesne lands were originally paid in kind, by way of purveyance for the royal household, and although such farms are expressed even in domesday book in terms of money, the tradition that there was a system of customary valuation is a sufficient explanation, and not of itself incredible. at some date, possibly under the administration of roger of salisbury, the inconvenience of this arrangement led to the substitution of money payments at the exchequer. the rapid deterioration of a small silver coinage led to successive efforts to maintain the value of these payments, first by a "scale" deduction of 6d. in the l for wear, then by the substitution of payment by weight for payment by tale, and finally by the reduction of most of such payments to their pure silver value by means of an assay, a process originally confined to payments from particular manors. only the farms of counties, however, were so treated, and not all of those. the amount to be deducted in these cases was settled by the weighing and assaying of a specimen pound of silver in the presence of the sheriff by the pesour and the melter in the lower exchequer. the casual revenue was paid by tale, and for the determination of its amount it was necessary to have copies of all grants made in the chancery on which rents were reserved, or fines payable. these were known first as _contrabrevia_ and later as _originalia_; the profits of justice were settled by the delivery of "estreats" from the justices, while for certain minor casualties the oath of the sheriff was at first the only security. at a later date many of them were determined by copies of inquisitions sent in from the chancery. all this business might be transacted anywhere in england, and though convenience placed the exchequer first at winchester (where the treasury was), and afterwards usually at westminster, it held occasional sessions at other towns even in the 14th century. the angevin exchequer, described by richard the treasurer, remained the ideal of the institution throughout its history, and the lineaments of the original exemplar were never completely effaced; but the rapid increase both of financial and judicial business led to a multiplication of machinery and a growing complexity of constitution. even in the time of henry ii. we gather that the great officers of state, except the treasurer and chancellor, commonly attended by deputy. in the reign of henry iii. the chancellor had also ceased to attend, and his clerk acquired the title of chancellor of the exchequer. to the same period belongs the institution of the king's and lord treasurer's remembrancers. these at first had common duties and kept duplicate rolls, but by the ordinance of 1323 their functions were differentiated. henceforward the king's remembrancer was more particularly concerned with the casual, and the lord treasurer's remembrancer with the fixed revenue. the former put all debts in charge, while the latter saw to their recovery when they had found their way on to the great roll. hence the preliminary stages of each account, the receiving and registering of the king's writs to the treasurer and barons, and the drawing up of all particulars of account, lay with the king's remembrancer, and he retained the corresponding vouchers. the lord treasurer's remembrancer exacted the "remanets" of such accounts as had been enrolled, as well as reserved rents and fixed revenue, and so became closely connected with the clerk of the pipe. before the end of the 14th century these three offices had already crystallized into separate departments. in the meantime the increasing length and variety of accounts, as well as the growth of judicial business, had led to various efforts at reform. as early as 22 henry ii. it became necessary to remove from the great roll the debts which it seemed hopeless to levy, and further ordinances to the same end were made by statute in 54 henry iii. and in 12 edward i. by this last a special "exannual roll" was established in which the "desperate debts" were recorded, in order that the sheriff might be reminded of them yearly without their overloading the great roll. but the largest accession of financial business arose from the "foreign accounts," that is to say, the accounts of national services, which did not naturally form part of the account of any county. these did not in the reign of henry ii. form a part of the exchequer business. such expenses as appear on the pipe roll were paid by the sheriffs, or by the bailiffs of "honours"; payments out of the treasury itself would only appear on the receipt and issue rolls, and the "spending departments" probably drew their supplies from the camera curie, and not directly from the exchequer. in the course of the 13th century the exchequer gradually acquired partial control of these national accounts. even in 18 henry ii. there is an account for the forests of england, and soon the mint, the wardrobe and the escheators followed. the undated statute of the exchequer (probably about 1276) provides for escheators, the earldom of chester, the channel islands, the customs and the wardrobe. during the reign of edward i., the wardrobe account became unmanageable, since it not only financed the household, army, navy and diplomatic service, but raised money on the customs independently of the exchequer. the reform of 1323-1326, due to walter de stapledon, in remedying this state of things, greatly increased the number of "foreign accounts" by making the great wardrobe (the storekeeping department), the butler, purveyors, keepers of horses or of the stud, the clerk of the "hamper" of the chancery (who took the fees for the great seal), and the various ambassadors, directly accountable to the exchequer. at the same time the sheriffs' accounts were expedited by the further simplification of the great roll, and by appointing a special officer, the "foreign apposer," to take the account of the "green wax," or estreats, so that two accounts could go on at once. another baron (the 5th or cursitor baron) was appointed, and the whole business of foreign accounts was transferred to a separate building where one baron and certain auditors spent their whole time in settling the balances due on the accounts already mentioned, as well as those of castles, &c., not let to farm, wales, gascony, ireland, aids (clerical and lay), temporalities of vacant bishoprics, abbeys, priories and dignities, mines of silver and tin, ulnage and so forth. these balances were accounted for in the exchequer itself, and entered on the pipe roll, but the preliminary accounts were filed by the king's remembrancer, and enrolled separately by the treasurer's remembrancer as a supplement to the pipe roll. the next important change, about the end of the 15th century, was the gradual substitution of special auditors appointed by the crown, known as the auditors of the prests (the predecessors of the commissioners for auditing public accounts), for the auditors of the exchequer. accounts when passed by them were presented in duplicate and "declared" before the treasurer, under-treasurer and chancellor. of the two copies, one, on paper, was retained by the auditors, the other, on parchment, was successively enrolled by the king's and lord treasurer's remembrancers, and finally by the clerk of the pipe, to secure the levying of any "remanets" or "supers" by process of the exchequer. besides the two great difficulties of the postponement of financial to legal business, and of preventing the sheriffs from exacting the same debt twice, the exchequer was, as has been seen, hampered in its functions by the interference of other departments in financial matters. its own branches even acquired a certain independence. the exchequer of the jews, which came to an end in 18 edward i., was such a branch. in 27 henry viii. the court of augmentations was established to deal with forfeited lands of monasteries. this was followed in 32 & 33 henry viii. by the courts of first-fruits and tenths and of general surveyors. these were reabsorbed by the exchequer in 1 mary, but remained as separate departments within it. but the development of the treasury, which succeeded to the functions of the camera curie or the king's chamber, ultimately reduced the administrative functions of the exchequer to unimportance, and the audit office took over its duties with regard to public accounts. so that when the statute of 3 & 4 william iv. cap. 99, removed the sheriff's accounts also from its competence, and brought to an end the series of pipe rolls which begins in 1130, the ancient exchequer may be said to have come to an end. (c. j.) in 1834 an act was passed abolishing the old offices of the exchequer, and creating a new exchequer under a comptroller-general, the detailed business of payments formerly made at the exchequer being transferred to the paymaster-general, whose office was further enlarged in 1836 and 1848. and in 1866, as the result of a select committee reporting unfavourably on the system of exchequer control as established in 1834, the exchequer was abolished altogether as a distinct department of state, and a new exchequer and audit department established. the ancient term exchequer now survives mainly as the official title of the national banking account of the united kingdom. this central account is commonly called the exchequer, and its statutory title is "his majesty's exchequer." it may also be described with statutory authority as "the account of the consolidated fund of great britain and ireland." this account is, in fact, divided between the banks of england and ireland. at the head office of each of these institutions receipts are accepted and payments made on account of the exchequer; but in published documents the two accounts are consolidated into one, the balances only at the two banks being shown separately. operations affecting the exchequer are regulated by the exchequer and audit departments act 1866. section 10 prescribes that the gross revenue of the united kingdom (less drawbacks and repayments, which are not really revenue) is payable, and must sooner or later be paid into the exchequer. section 11 directs that payments should be made from the fund so formed to meet the current requirements of spending departments. sections 13, 14, 15 lay down the conditions under which money can be drawn from the exchequer. drafts on the exchequer require the approval of an officer independent of the executive government, the comptroller and auditor-general. but the description of the formal procedure required by statute cannot adequately express the actual working of the system, or the part it plays in the national finance. the simplicity of the system laid down by the act of 1866 has been disturbed by the diversion of certain branches or portions of revenue from the exchequer to "local taxation accounts," under a system initiated by the local government act 1888, and much extended since. while the exchequer is, as already stated, the central account, it is not directly in contact with the details of either revenue or expenditure. as regards revenue, the produce of taxes and other sources of income passes, in the first instance, into the separate accounts of the respective receiving departments--mainly, of course, those of the customs, inland revenue and post office. a not inconsiderable portion is received in the provinces, and remitted to london or dublin by bills or otherwise, and the ultimate transfers to the exchequer are made (in round sums) from the accounts of the receiving departments in london or in dublin. thus, there are always considerable sums due to the exchequer by the revenue departments; on the other hand, as floating balances are (for the sake of economy) used temporarily for current expenses, there are generally amounts due by the exchequer to the receiving departments; such cross claims are adjusted periodically, generally once a month. the finance accounts of the united kingdom show the gross amounts due to the exchequer from the departments, and likewise the amounts payable out of the gross revenue in priority to the claim of the exchequer. on the expenditure side a similar system prevails. no detailed payments are made direct from the exchequer, but round sums are issued from it to subsidiary accounts, from which the actual drafts for the public services are met. for instance, the interest on the national debt is paid by the bank of england from a separate account fed by transfers of round sums from the exchequer as required. similarly, payments for army, navy and most civil services are met by the paymaster-general out of an account of his own, fed by daily transfers from the exchequer. this system has two noticeable effects. firstly, it secures the simplicity and finality of the exchequer accounts, and therefore of all ordinary statements of national finance. every evening the chancellor of the exchequer can tell his position so far as the exchequer is concerned; on the first day of every quarter the press is able to comment on the national income and expenditure up to the evening before. the annual account is closed on the evening of the 31st of march, and there can be no reopening of the budget of a past year such as may occur under other financial systems. the second effect of the system is to introduce a certain artificiality into the financial statements. actual facts cannot be reduced to the simplicity of exchequer figures; there is always (as already explained) revenue received by government which has not yet reached the exchequer; and there must always be a considerable outstanding liability in the form of cheques issued but not yet cashed. the suggested criticism is, however, met if it can be shown that, on the whole, the differences between the true revenue and the exchequer receipts, or between the true (or audited) expenditure and the exchequer issues, are not, taking one year with another, relatively considerable. the following figures (000's omitted) illustrate this point:-- _expenditure._ +-----------+----------+--------------+------------ | year. |exchequer | audited | difference.| | | issues. | expenditure. | | +-----------+----------+--------------+------------+ | 1888-1889 | l85,674 | l86,070 | l+396 | | 1889-1890 | 86,083 | 86,033 | - 50 | | 1890-1891 | 87,732 | 87,638 | - 94 | | 1891-1892 | 89,928 | 90,125 | +197 | | 1892-1893 | 90,375 | 90,164 | -211 | | 1893-1894 | 91,303 | 91,530 | +227 | | 1894-1895 | 93,919 | 93,818 | -101 | | 1895-1896 | 97,764 | 97,667 | - 97 | | 1896-1897 | 101,477 | 101,543 | + 66 | | 1897-1898 | 102,936 | 103,010 | + 74 | +-----------+----------+--------------+------------+ | total for |l927,191 | l927,598 | l+407 | | 10 years | | | | +-----------+----------+--------------+------------+ _revenue._ +-----------+----------+--------------+------------+ | year. |exchequer | actual | difference.| | |receipts. | revenue. | | +-----------+----------+--------------+------------+ | 1888-1889 | l88,473 | l88,038 | l-435 | | 1889-1890 | 89,304 | 89,416 | +112 | | 1890-1891 | 89,489 | 89,282 | -207 | | 1891-1892 | 90,995 | 91,428 | +433 | | 1892-1893 | 90,395 | 90,181 | -214 | | 1893-1894 | 91,133 | 91,265 | +132 | | 1894-1895 | 94,684 | 94,873 | +189 | | 1895-1896 | 101,974 | 102,031 | + 57 | | 1896-1897 | 103,960 | 104,089 | +129 | | 1897-1898 | 106,614 | 106,691 | + 77 | +-----------+----------+--------------+------------+ | total for | l947,011 | l947,294 | l+273 | | 10 years | | | | +-----------+----------+--------------+------------+ _surplus._ +-----------+----------=--------------+------------+ | |exchequer |diff. between | | | year. | accounts.| actual rev. | difference.| | | | and aud. exp.| | +-----------+----------+--------------+------------+ | 1888-1889 | l2,799 | l1,968 | l-831 | | 1889-1890 | 3,221 | 3,383 | +162 | | 1890-1891 | 1,757 | 1,644 | -113 | | 1891-1892 | 1,067 | 1,303 | +236 | | 1892-1893 | 20 | 17 | - 3 | | 1893-1894 | -_170_ | -_265_ | - 95 | | 1894-1895 | 765 | 1,055 | +290 | | 1895-1896 | 4,210 | 4,364 | +154 | | 1896-1897 | 2,473 | 2,546 | + 73 | | 1897-1898 | 3,678 | 3,681 | + 3 | +-----------+----------+--------------+------------+ | total for | l19,820 | l19,696 | l-124 | | 10 years | | | | +-----------+----------+--------------+------------+ the third column in the above shows the price which has to be paid (in the form of discrepancies between facts and figures) for the simplicity secured to statements and records of the national finance by the present system embodied in the term exchequer. probably few will think the price too high in consideration of the advantages secured. the principal official who derives a title from the exchequer in its living sense is, of course, the chancellor of the exchequer. he is the person named second in the patent appointing commissions for executing the office of lord high treasurer of great britain and ireland; but he is appointed chancellor of the exchequer for great britain and chancellor of the exchequer for ireland by two additional patents. although, in fact, the finance minister of the united kingdom, he has no _statutory_ power over the exchequer apart from his position as second commissioner of the treasury; but in virtue of his office he is by statute master of the mint, senior commissioner for the reduction of the national debt, a trustee of the british museum, an ecclesiastical commissioner, a member of the board of agriculture, a commissioner of public works and buildings, local government, and education, a commissioner for regulating the offices of the house of commons, and has certain functions connected with the office of the secretary of state for india. the only other exchequer officer requiring mention is the comptroller and auditor-general, whose functions as comptroller-general of the exchequer have been already described. the ancient name of the national banking account has been attached to two of the forms of unfunded national debt. exchequer bills, which date from the reign of william and mary (they took the place of the tallies, previously used for the same purpose), became extinct in 1897, but exchequer bonds (first issued by mr gladstone in 1853) still possess a practical importance. an exchequer bond is a promise by government to pay a specified sum after a specified period, generally three or five years, and meanwhile to pay interest half-yearly at a specified rate on that sum. government possesses no general power to issue exchequer bonds; such power is only conferred by a special act, and for specified purposes; but when the power has been created, exchequer bonds issued in pursuance of it are governed by general statutory provisions contained in the exchequer bills and bonds act 1866, and amending acts. these acts create machinery for the issue of exchequer bonds and for the payment of interest thereon, and protect them against forgery. some traces may be mentioned of the ancient uses of the name exchequer which still remain. the chancellor of the exchequer still presides at the ceremony of "pricking the list of sheriffs," which is a quasi-judicial function; and on that occasion he wears a robe of black silk with gold embroidery, which suggests a judicial costume. in england the last judge who was styled baron of the exchequer (baron pollock) died in 1897. in scotland the jurisdiction of the barons of the exchequer was transferred to the court of session in 1856, but the same act requires the appointment of one of the judges as "lord ordinary in exchequer causes," which office still exists. in ireland lord chief baron palles was the last to retain the old title. a street near dublin castle is called exchequer street, recalling the separate irish exchequer, which ceased in 1817. the old term also survives in the full title of the treasury representative in scotland, which is "the king's and the lord treasurer's remembrancer in exchequer," while his office in the historic parliament square is styled "exchequer chambers." (s. e. s.-r.) bibliography.--for the early exchequer thomas madox's _history and antiquities of the exchequer_ (london, 1711) remains the standard authority, and in it the _dialogus de scaccario_ of richard the treasurer (1179) was first printed (edited since by a. hughes, c.g. crump and c. johnson, oxford, 1902). the publications of the pipe roll society (london, 1884 et seq.), the pipe rolls and chancellor's roll, printed by the record commission (london, 1833 and 1844), and h. hall's edition of the _receipt roll of the exchequer 31 henry ii._ (london, 1899) should also be consulted. a popular account is in h. hall's _court life under the plantagenets_ (london, 1901), and a careful study in dr parow's thesis, _compotus vicecomitis_ (berlin, 1906). for the 13th and 14th centuries h. hall's edition of the _red book of the exchequer_ (london, rolls series, 1896) is essential, as also the public record office _list of foreign accounts_ (london, 1900). later practice may be gathered from the similar _list and index of declared accounts_ (london, 1893), and from such books as sir t. fanshawe's _practice of the exchequer court_, written about a.d. 1600 (london, 1658); christopher vernon's _the exchequer opened_ (london, 1661), or sir geoffrey gilbert's _treatise on the court of exchequer_ (london, 1758), as well as from the statutes abolishing various offices in the exchequer. h. hall's _antiquities of the exchequer_ (london, 1891) gives many interesting details of various dates. for the scottish exchequer _the exchequer rolls of scotland_ (edinburgh, 1878 et seq.) should be consulted, while gilbert's book noted above gives some details on that of ireland. see also appendix 13 to the great account of _public income and expenditure from 1688 to 1869_, in three volumes, prepared for parliament by h.w. chisholm (1869); and for sidelights on the working of the office from 1825 to 1866 the reminiscences of the same author (the last chief clerk of the exchequer) in _temple bar_ (january to april 1891). excise (derived through the dutch, _excijs_ or _accijs_, possibly from late lat. _accensare_,--ad, to, and census, tax; the word owes something to a confusion with _excisum_, cut out), a term now well known in public finance, signifying a duty charged on home goods, either in the process of their manufacture, or before their sale to the home consumers. this form of taxation implies a commonwealth somewhat advanced in manufactures, markets and general riches; and it interferes so directly with the industry and liberty of the subject that it has seldom been introduced save in some supreme financial exigency, and has as seldom been borne, even after long usage, with less than the ordinary impatience of taxation. yet excise duties can boast a respectable antiquity, having a distinct parallel in the _vectigal rerum venalium_ (or toll levied on all commodities sold by auction, or in public market) of the romans. but the roman excise was mild compared with that of modern nations, having never been more than _centesima_, or 1%, of the value; and it was much shorter lived than the modern examples, having been first imposed by augustus, reduced for a time one-half by tiberius, and finally abolished by caligula, a.d. 38, so that the roman excise cannot have had a duration of much more than half a century. its remission must have been deemed a great boon in the marts of rome, since it was commemorated by the issue of small brass coins with the legend _remissis centesimis_, specimens of which are still to be found in collections. the history of this branch of revenue in the united kingdom dates from the period of the civil wars, when the republican government, following the example of holland, established, as a means of defraying the heavy expenditure of the time, various duties of excise, which the royalists when restored to power found too convenient or too necessary to be abandoned, notwithstanding their origin and their general unpopularity. on the contrary, they were destined to be steadily increased both in number and in amount. it is curious that the first commodities selected for excise were those on which this branch of taxation, after great extension, had again in the period of reform and free trade been in a manner permanently reduced, viz. malt liquors, and such kindred beverages as cider perry and spruce beer. the other excise duties remaining are chiefly in the form of licences, such as to kill game and to use and carry guns, to sell gold and silver plate, to pursue the business of appraisers or auctioneers, hawkers or pedlars, pawnbrokers or patent-medicine vendors, to manufacture tobacco or snuff, to deal in sweets or in foreign wines, to make vinegar, to roast malt, or to use a still in chemistry or otherwise. it may be presumed that the policy of the licence duties was at first not so much to collect revenue, though in the aggregate they yielded a large sum, as to guard the main sources of excise, and to place certain classes of dealers, by registration and an annual payment to the exchequer, under a direct legal responsibility. the excise system of the united kingdom as now pruned and reformed, however, while still the most prolific of all the sources of revenue, is simple in process, and is contentedly borne as compared with what was the case in the 18th, and the beginning of the 19th century. the wars with bonaparte strained the government resources to the uttermost, and excise duties were multiplied and increased in every practicable form. bricks, candles, calico prints, glass, hides and skins, leather, paper, salt, soap, and other commodities of home manufacture and consumption were placed, with their respective industries, under excise surveillance and fine. when the duties could no longer be increased in number, they were raised in rate. the duty on british spirits, which had begun at a few pence per gallon in 1660, rose step by step to 11s. 8-1/4d. per gallon in 1820; and the duty on salt was augmented to three or fourfold its value. the old unpopularity of excise, though now somewhat out of date, must have had real enough grounds. it breaks out in english literature, from songs and pasquinades to grave political essays and legal commentaries. blackstone, in quoting the declaration of parliament in 1649 that "excise is the most easy and indifferent levy that can be laid upon the people," adds on his own authority that "from its first original to the present time its very name has been odious to the people of england" (book i. cap. 8, tenth edition, 1786); while the definition of "excise" gravely inserted by dr johnson in the _dictionary_, at the imminent risk of subjecting the eminent author to a prosecution for libel--viz. "a hateful tax levied upon commodities, and adjudged not by the common judges of property, but wretches hired by those to whom excise is paid"--can hardly be ever forgotten. the duties of excise in the united kingdom were, until the passing of the finance act 1908, under the control of the commissioners of inland revenue; they are now under the control of the commissioners of customs; the amount raised, apart from changes in the rate, shows a fairly constant tendency to increase, and is usually regarded as one of the best tests of the prosperity of the working classes. the _spirit duty_ is levied according to the quantity of "proof spirit" contained in the product of distillation, and the charge is taken at three different points in the process of manufacture, the trader being liable for the result of the highest of the three calculations. what is known as "proof spirit" is obtained by mixing nearly equal weights of pure alcohol and water, the quantity of pure alcohol being in bulk about 57% of the whole. owing to the high rate of duty as compared with the volume and intrinsic value of the spirits, the whole process of manufacture is carried on under the close supervision of revenue officials. all the vessels used are measured by them and are secured with revenue locks; the premises are under constant survey; and notice has to be given by the distiller of the materials used and of the several stages of his operations. though the charge for duty is raised at the time when the process of distillation is completed, the duty is not actually paid until the spirits are required for consumption. in the meanwhile they may be retained in an approved "warehouse," which is also subject to close supervision. the _beer duty_ dates from 1880, in which year it was substituted for the duty on malt. the specific gravity of the worts depends chiefly on the amount of sugar which they contain, and is ascertained by the saccharometer. excise _licences_ may be divided into--(a) licences for the sale or manufacture of excisable liquors, (b) licences for other trades, such as tobacco dealers or manufacturers, auctioneers, pawnbrokers, &c., (c) licences for male servants, carriages, motors and armorial bearings, and (d) gun, game and dog licences. nearly the whole of the licence duties is paid over to the local taxation account. the _railway passenger duty_, which was made an excise duty by the railway passenger duty act 1847, applies only to great britain. it is levied on all passenger fares exceeding 1d. per mile, the rate being 2% on urban and 5% on other traffic. the other items which go to make up the excise revenue are the charges on deliveries from bonded warehouses, and the duties on coffee mixture labels and on chicory. for more detailed information reference should be made to highmore's _excise laws_, and the annual reports of the commissioners of inland revenue, especially those issued in 1870 and 1885. see also taxation; english finance. excommunication (lat. _ex_, out of, away from; _communis_, common), the judicial exclusion of offenders from the rights and privileges of the religious community to which they belong. the history of the practice of excommunication may be traced through (1) pagan analogues, (2) hebrew custom, (3) primitive christian practice, (4) medieval and monastic usage, (5) modern survivals in existing christian churches. 1. among pagan analogues are the gr. [greek: chernibon eirgesthai] (demosth. 505, 14), the exclusion of an offender from purification with holy water. this exclusion was enforced in the case of persons whose hands were defiled with bloodshed. its consequences are described aesch. _choeph._ 283, _eum._ 625 f., soph. _oed. tyr._ 236 ff. the roman _exsecratio_ and diris _devotio_ was a solemn pronouncement of a religious curse by priests, intended to call down the divine wrath upon enemies, and to devote them to destruction by powers human and divine. the druids claimed the dread power of excluding offenders from sacrifice (caes. _b.g._ vi. 13). primitive semitic customs recognize that when persons are laid under a ban or taboo (_herem_) restrictions are imposed on contact with them, and that the breach of these involves supernatural dangers. impious sinners, or enemies of the community and its god, might be devoted to utter destruction. 2. _hebrew custom._--in a theocracy excommunication is necessarily both a civil and a religious penalty. the word used in the new testament to describe an excommunicated person, [greek: anathema](1 cor. xvi. 22, gal. i. 8-9, rom. ix. 3), is the septuagint rendering of the hebrew _herem_. the word means "set apart" (cf. harem), and does not distinguish originally between things set apart because devoted to god and things devoted to destruction. lev. xxvii. 16-34 defines the law for dealing with "devoted" things; according to v. 28 "no devoted thing that a man shall devote unto the lord, of all that he hath, whether of man or beast, or of the field of his possession, shall be sold or redeemed. none devoted shall be ransomed, he shall surely be put to death." as in greece and rome whole cities or nations might be devoted to destruction by pronouncement of a ban (numbers xxi. 2, 3, deut. ii. 34, iii. 6, vii. 2). occasionally israelites as well as aliens fall under the curse (judg. xxi. 5, 11). a milder form of penalty was the temporary separation or seclusion (_niddah_) prescribed for ceremonial uncleanness. this was the ordinary form of religious discipline. in the time of ezra the jewish "magistrates and judges" among their ecclesiastico-civil functions have the right of pronouncing sentence whether it be unto death, or to "rooting out," or to confiscation of goods, or to imprisonment (ezra vii. 26). there is also a lighter form of excommunication which "devotes" the goods of an offender, but only separates him from the congregation. both major and minor kinds of excommunication are recognized by the talmud. the lesser (_niddah_) involved exclusion from the synagogue for thirty days, and other penalties, and might be renewed if the offender remained impenitent. the major excommunication (_herem_) excluded from the temple as well as the synagogue and from all association with the faithful. spinoza was excommunicated (july 16, 1656) for contempt of the law. seldon (_de jure nat. et gen._, iv. 7) gives the text of the curse pronounced on the culprit. the _exemplar humanae vitae_ of uriel d'acosta also deserves reference. the practice of the jewish courts in new testament times may be inferred from certain passages in the gospels. luke vi. 22, john ix. 22, xii. 42 indicate that exclusion from the synagogue was a recognized penalty, and that it was probably inflicted on those who confessed jesus as the christ. john xvi. 2 ("whosoever killeth you," &c.) may point to the power of inflicting the major penalty. the talmud itself says that the judgment of capital cases was taken away from israel forty years before the destruction of the temple. "forty" is probably a round number without historical value, but the circumstance recorded by this tradition and confirmed by the evangelist's account of the trial of jesus is historical, and is to be regarded as one of several restrictions imposed on the jewish courts in the time of the roman procurators. 3. _primitive christian practice._--the use of excommunication as a form of christian discipline is based on the precept of christ and on apostolic practice. the general principles which govern the exclusion of members from a religious community may be gathered from the new testament writings. matt. xviii. 15-17 prescribes a threefold admonition, first privately, then in the presence of witnesses (cf. titus iii. 10), then before the church. this is a graded procedure as in the jewish synagogue and makes exclusion a last resort. nothing is said as to the nature and effects of excommunication. the tone of the passage when compared with the disciplinary methods of the synagogue indicates that its purpose was to introduce elements of reason and moral suasion in place of sterner methods. its object is rather the protection of the church than the punishment of the sinner. the offender is only treated as a heathen and publican when the purity and safety of the church demand it. in the _locus classicus_ on this subject (1 cor. v. 5) paul refers to a formal meeting of the corinthian church at which the incestuous person is "delivered unto satan for the destruction of the flesh that the spirit may be saved in the day of the lord jesus." these are mysterious words implying (1) a formal ecclesiastical censure, (2) a physical penalty, (3) the hope of a spiritual result. the form of penalty which would meet these conditions is not explained. there is a reference in 2 cor. ii. 6-11 to a case of discipline which may or may not be the same. if it be the same it indicates that the excommunication had not been final; the offender had been received back. if it be not the same it shows the corinthian church exercising discipline independently of apostolic advice. up to this point there is no established formal practice. 1 tim. i. 20 ("hymenaeus and alexander whom i delivered unto satan that they might be taught not to blaspheme") seems to refer to an excommunication, but it does not appear whether the apostle had acted as representing a church, nor is there anything to explain the exact consequences or limits of the deliverance to satan. 1 cor. xvi. 22, gal. i. 8, 9, rom. ix. 3 refer to the practice of regarding a person as anathema. taking these passages as a whole they seem to point to an exclusion from church fellowship rather than to a final cutting off from the hope of salvation. in the pastoral letters there is already a formal and recognized method of procedure in cases of church discipline. 1 tim. v. 19, 20 requires two or three witnesses in the case of an accusation against an elder, and a public reproof. tit. iii. 20 recognizes a factious spirit as a reason for excommunication after two admonitions (cf. tim. vi. and 2 john v. 10). in 3 john v. 9-10 diotrephes appears to have secured an excommunication by the action of a party in the church. it is clear from these illustrations that within the new testament there is development from spontaneous towards strictly regulated methods; also that the use of excommunication is chiefly for disciplinary and protective rather than punitive purposes. a process which is intended to produce penitence and ultimate restoration cannot at the same time contemplate handing the offender over to eternal punishment. 4. _medieval and monastic usage._--the writings of the church fathers give sufficient evidence that two degrees of excommunication, the [greek: aphorismos] and the [greek: aphorismos panteles], as they were generally called, were in use during, or at least soon after, the apostolic age. the former, which involved exclusion from participation in the eucharistic service and from the eucharist itself, though not from the so-called "service of the catechumens," was the usual punishment of comparatively light offences; the latter, which was the penalty for graver scandals, involved "exclusion from all church privileges,"--a vague expression which has sometimes been interpreted as meaning total exclusion from the very precincts of the church building (_inter hiemantes orare_) and from the favour of god (bingham, _antiquities of christian church_, xvi. 2. 16). for some sins, such as adultery, the sentence of excommunication was in the 2nd century regarded as [greek: panteles] in the sense of being irrevocable. difference of opinion as to the absolutely "irremissible" character of mortal sins led to the important controversy associated with the names of zephyrinus, tertullian, calistus, hippolytus, cyprian and novatian, in which the stricter and more montanistic party held that for those who had been guilty of such sins as theft, fraud, denial of the faith, there should be no restoration to church fellowship even in the hour of death. on this point the provincial synods of illiberis (elvira) in 305 and of ancyra in 315 subsequently came to conflicting decisions, the council of elvira forbidding the reception of offenders into communion during life, and the council of ancyra fixing a limit to the penalty in the same cases. but the excommunication was on all hands regarded as being "medicinal" in its character. it is noteworthy that the word [greek: anathema] had fallen into disuse about the beginning of the 4th century, and that, throughout the same period, no instance of the judicial use of the phrase [greek: paradounai to satana] can be found. a new chapter in the history of the church censure may be said to have begun with the publication of those imperial edicts against heresy, the first of which, _de summa trinitate et fide catholica_, dates from 380. till then exclusion from church privileges had been a spiritual discipline merely; thenceforward it was to expose a man to serious temporal risks. excommunication still continued to be occasionally used in the spirit of genuine christian fidelity, as by ambrose in the case of theodosius himself (390); but the temptation to wield it as an instrument of secular tyranny too often proved to be irresistible. the church fell back on carnal weapons in her warfare and invoked the secular powers to uphold the ecclesiastical. in the formula used by synesius (410) which is to be found in bingham's _antiquities_, we already find the attention of magistrates specially called to the censured person. the history of the next thousand years shows that the magistrates were seldom slow to respond to the appeal. even the hastiest survey of that long and interesting period enables the student to notice a marked development in the theory and practice of excommunication. one or two points may be specially noted. (1) when the empire became nominally christian and the quality of the church life was sacrificed to the quantity of its adherents, the original character of excommunication was lost. the power of excommunication was transferred from the community to the bishop, and was liable to abuse from personal motives: gregory the great rebukes a bishop for using for private ends power conferred for the public good (_epist._ ii. 34). excommunication became a common penalty applied in numberless cases (see the _penitential_ of archbishop theodosius: haddan and stubbs, _councils and documents_, iii. 1737), and was invested with superstitious terrors. (2) while it had been held as an undoubted principle by the ancient church that this sentence could only be passed on living individuals whose fault had been distinctly stated and fully proved, we find the medieval church on the one hand sanctioning the practice of excommunication of the dead (morinus, _de poenit._ x. c. 9), and, on the other hand, by means of the papal interdict, excluding whole countries and kingdoms at once from the means of grace. the earliest well-authenticated instance of such an interdict is that which was passed (998) by pope gregory v. on france, in consequence of the contumacy of king robert the wise. other instances are those laid respectively on germany in 1102 by gregory vii. (hildebrand), on england in 1208 by innocent iii., on rome itself in 1155 by adrian iv. (3) while in the ancient church the language used in excommunicating had been carefully measured, we find an amazing recklessness in the phraseology employed by the medieval clergy. the curse of ernulphus or arnulphus of rochester (c. 1100), often quoted by students of english literature, is a very fair specimen of that class of composition. with it may be compared the formula transcribed by dr burton in his _history of scotland_ (iii. 317 ff.). to the spoken word was added the language of symbol. by means of lighted candles violently dashed to the ground and extinguished the faithful were graphically taught the meaning of the greater excommunication--though in a somewhat misleading way, for it is a fundamental principle of the canon law that _disciplina est excommunicatio, non eradicatio_. the first instance, however, of excommunication by "bell, book and candle" is comparatively late (c. 1190). 5. _modem survivals in existing christian churches._--at the reformation the necessity for church discipline did not cease to be recognized; but the administration of it in many reformed churches has passed through a period of some confusion. in some instances the old episcopal power passed more or less into the hands of the civil magistrate (a state of matters which was highly approved by erastus and his followers), in other cases it was conceded to the presbyterial courts. in the anglican church the bishops (subject to appeal to the sovereign) have the right of excommunicating, and their sentence, if sustained, may in certain cases carry with it civil consequences. but this right is in practice never exercised. in the law of england sentence of excommunication, upon being properly certified by the bishop, was followed by the writ _de excommunicato capiendo_ for the arrest of the offender. the statute 5 eliz. c. 23 provided for the better execution of this writ. by the 53 geo. iii. c. 127 (which does not, however, extend to ireland) it was enacted that "excommunication, together with all proceedings following thereupon, shall in all cases, save those hereafter to be specified, be discontinued." disobedience to or contempt of the ecclesiastical courts is to be punished by a new writ, _de contumace capiendo_, to follow on the certificate of the judge that the defender is contumacious and in contempt. sect. 2 provides that nothing shall prevent "any ecclesiastical court from pronouncing or declaring persons to be excommunicate on definite sentences pronounced as spiritual censures for offences of ecclesiastical cognizance." no persons so excommunicated shall incur any civil penalty or incapacity whatever, save such sentence of imprisonment, not exceeding six months, as the court shall direct and certify to the king in chancery. in the churches which consciously shaped their polity at or after the reformation the principle of excommunication is preserved in the practice of church discipline. calvin devotes a chapter in the _institutes_ (bk. iv. chap. xii.) to the "discipline of the church; its principal use in censure and excommunication." the three ends proposed by the church in such discipline are there stated to be, (1) that those who lead scandalous lives may not to the dishonour of god be numbered among christians, seeing that the church is the body of christ; (2) that the good may not be corrupted by constant association with the wicked; (3) that those who are censured or excommunicated, confounded with shame, may be led to repentance. he differentiates decisively between excommunication and anathema. "when christ promises that what his ministers bind on earth shall be bound in heaven, he limits the power of binding to the censure of the church; by which those who are excommunicated are not cast into eternal ruin and condemnation, but by having their life and conduct condemned are also certified of their final condemnation unless they repent. for excommunication differs from anathema: anathema which ought to be very rarely, or never, resorted to, in precluding all pardon, execrates a person, and devotes him to eternal perdition: whereas excommunication rather censures and punishes his conduct. yet in such a manner by warning him of his future condemnation it recalls him to salvation" (_inst._ bk. iv. chap. xii. 10). the reformed churches in england and america accepted the distinction between public and private offences. the usual provision is that private offences are to be dealt with according to the rule in matt. v. 23-24, xviii. 15-17; public offences are to be dealt with according to the rule in 1 cor. v. 3-5, 13. the public expulsion or suspension of the offender is necessary for the good repute of the church, and its influence over the faithful members. the expelled member may be readmitted on showing the fruits of repentance. in scotland three degrees of church censure are recognized--admonition, suspension from sealing ordinances (which may be called temporary excommunication), and excommunication properly so-called. intimation of the last-named censure may occasionally (but very rarely) be given by authority of a presbytery in a public and solemn manner, according to the following formula:--"whereas thou n. hast been by sufficient proof convicted (here mention the sin) and after due admonition and prayer remainest obstinate without any evidence or sign of true repentance: therefore in the name of the lord jesus christ, and before this congregation, i pronounce and declare thee n. excommunicated, shut out from the communion of the faithful, debar thee from privileges, and deliver thee unto satan for the destruction of thy flesh, that thy spirit may be saved in the day of the lord jesus." this is called the greater excommunication. the congregation are thereafter warned to shun all unnecessary converse with the excommunicate (see _form of process_, c. 8). formerly excommunicated persons were deprived of feudal rights in scotland; but in 1690 all acts enjoining civil pains upon sentences of excommunication were finally repealed (burton's _history_, vii. 435). the question whether the power of excommunication rests in the church or in the clergy has been an important one in the history of english and american churches. hooker lays down (_survey_, pt. 3, pp. 33-46) four necessary conditions for the execution of a sentence involving church discipline. "(1) the cause exactly recorded is fully and nakedly to be presented to the consideration of the congregation. (2) the elders are to go before the congregation in laying open the rule so far as reacheth any particular now to be considered, and to express their judgment and determination thereof, so far as appertains to themselves. (3) unless the people be able to convince them of errors and mistakes in their sentence, they are bound to joyn their judgment with theirs to the compleating of the sentence. (4) the sentence thus compleatly issued is to be solemnly passed and pronounced upon the delinquent by the ruling elder whether it be of censure or excommunication." in this passage it is clear that the effective power of discipline is regarded as being wholly in the power of the individual church or congregation. hooker expressly denies the power of synods to excommunicate: "that there should be synods, which have _potestatem juridicam_ is nowhere proved in scripture because it is not a truth" (_survey_, pt. 4, pp. 48, 49). the confession of faith issued by the london-amsterdam church (the original of the pilgrim fathers' churches) in 1596 declares that the christian congregation having power to elect its minister has also power to excommunicate him if the case so require (walker, _creeds and platforms of congregationalism_, p. 66). in 1603 the document known as "points of difference" (i.e. from the established anglicanism) submitted to james i. sets forth: "that all particular churches ought to be so constituted as, having their owne peculiar officers, the whole body of every church may meet together in one place, and jointly performe their duties to god and one towards another. and that the censures of admonition and excommunication be in due manner executed, for sinne, convicted, and obstinately stood in. this power also to be in the body of the church whereof the partyes so offending and persisting are members." the _cambridge platform_ of 1648 by which the new england churches defined their practice, devotes ch. xiv. to "excommunication and other censures." it follows in the main the line of hooker and calvin, but adds (s 6) an important definition: "excommunication being a spirituall punishment it doth not prejudice the excommunicate in, nor deprive him of his _civil_ rights, therfore toucheth not princes, or other magistrates, in point of their civil dignity or authority. and, the excommunicate being but as a publican and a heathen, heathen being lawfully permitted to come to hear the word in church assemblyes; wee acknowledg therfore the like liberty of hearing the word, may be permitted to persons excommunicate, that is permitted unto heathen. and because wee are not without hope of his recovery, wee are not to account him as an enemy but to admonish him as a brother." the savoy declaration of 1658 defines the theory and practice of the older english nonconformist churches in the section on the "institution of churches and the order appointed in them by jesus christ" (xix.). the important article is as follows:--"the censures so appointed by christ, are admonition and excommunication; and whereas some offences are or may be known onely to some, it is appointed by christ, that those to whom they are so known, do first admonish the offender in private: in publique offences where any sin, before all; or in case of non-amendment upon private admonition, the offence being related to the church, and the offender not manifesting his repentance, he is to be duely admonished in the name of christ by the whole church, by the ministery of the elders of the church, and if this censure prevail not for his repentance, then he is to be cast out by excommunication with the consent of the church." in contemporary english free churches the purity of the church is commonly secured by the removal of persons unsuitable for membership from the church books by a vote of the responsible authority. (d. mn.) excretion (lat. _ex_, out of, _cernere_, _cretum_, to separate), in plant and animal physiology, the separation from an organ of some substance, also the substance separated. the term usually refers to the separation of waste or harmful products, as distinguished from "secretion," which refers to products that play a useful or necessary part in the functions of the organism. execution (from lat. _ex-sequor_, _exsecutus_, follow or carry out), the carrying into effect of anything, whether a rite, a piece of music, an office, &c.; and so sometimes involving a notion of skill in the performance. technically, the word is used in law in the _execution_ of a deed (its formal signing and sealing), an _execution_ (see below) by the sheriff's officers under a "writ of execution" (the enforcement of a judgment on a debtor's goods); and _execution of death_ has been shortened to the one word to denote capital punishment (q.v.). _civil execution_ may be defined as the process by which the judgments or orders of courts of law are made effectual. in roman law the earliest mode of execution was the seizure, legalized by the _actio per manus injectionem_, of the debtor as a slave of the creditor. during the later republic, imprisonment took the place of slavery. under the regime of the _actio per manus injectionem_, the debtor might dispute the debt--the issue being raised by his finding a substitute (_vindex_) to conduct the case for him. by the time of gaius (iv. 25) the _actio per manus injectionem_ had been superseded by the _actio judicati_, the object of which was to enable the creditor to take payment of the debt or compel the debtor to find security (_pignus in causa judicati captum: cautio judicatum solvi_), and in a.d. 320 constantine abolished imprisonment for debt, unless the debtor were contumacious. the time allowed for payment of a judgment debt was by the xii. tables 30 days; it was afterwards extended to two months, and ultimately, by justinian, to four months. the next stage in the roman law of execution was the recognition of bankruptcy either against the will of the bankrupt (_missio in bona_) or on the application of the bankrupt (_cessio bonorum_; and see bankruptcy). lastly, in the time of antoninus pius, judgment debts were directly enforced by the seizure and sale of the debtor's property. slaves, oxen and implements of husbandry were privileged; and movable property was to be exhausted before recourse was had to land (see hunter, _roman law_, 4th ed. pp. 1029 et seq., sohm, _inst. rom. law_, 2nd ed. pp. 302-305). great britain.--the english law of execution is very complicated, and only a statement of the principal processes can here be attempted. _high court.--fieri facias._ a judgment for the recovery of money or costs is enforced, as a rule, by writ of _fieri facias_ addressed to the sheriff, and directing him to cause to be made (_fieri facias_) of the goods and chattels of the debtor a levy of a sum sufficient to satisfy the judgment and costs, which carry interest at 4% per annum. the seizure effected by the sheriff or his officer, under this writ, of the property of the debtor, is what is popularly known as "the putting-in" of an execution. the seizure should be carried out with all possible despatch. the sheriff or his officer must not break open the debtor's house in effecting a seizure, for "a man's house is his castle" (_semayne's case_ [1604], 5 coke rep. 91); but this principle applies only to a dwelling-house, and a barn or outhouse unconnected with the dwelling-house may be broken into. the sheriff on receipt of the writ endorses on it the day, hour, month and year when he received it; and the writ binds the debtor's goods as at the date of its delivery, except as regards goods sold before seizure in market overt, or purchased for value, without notice before actual seizure (sale of goods act 1893, s. 26, which supersedes s. 16 of the statute of frauds and s. 1 of the mercantile law amendment act 1856). this rule is limited to goods, and does not apply to the money or bank notes of the debtor which are not bound by the writ till seized under it (_johnson_ v. _pickering_, oct. 14, 1907, c.a.). the mere seizure of the goods, however, although, subject to such exceptions as those just stated, it binds the interest of the debtor, and gives the sheriff such an interest in the goods as will enable him to sue for the recovery of their possession, does not pass the property in the goods to the sheriff. the goods are in the custody of the law. but the property remains in the debtor who may get rid of the execution on payment of the claim and fees of the sheriff [as to which see sheriffs act 1887, s. 20, and order of 21st of august 1888, _annual practice_ (1908), vol. ii. p. 278]. the wearing apparel, bedding, tools, &c., of the debtor to the value of l5 are protected. competing claims as to the ownership of the goods seized are brought before the courts by the procedure of "interpleader." after seizure, the sheriff must retain possession, and, in default of payment by the execution debtor, proceed to sell. where the judgment debt, including legal expenses, exceeds l20, the sale must be by public auction, unless the court otherwise orders, and must be publicly advertised. the proceeds of sale, after deduction of the sheriff's fees and expenses, become the property of the execution creditor to the extent of his claim. the bankruptcy act 1890 (53 & 54 vict. c. 71, s. 11 [2]) requires the sheriff in case of sale under a judgment for a sum exceeding l20 to hold the proceeds for 14 days in case notice of bankruptcy proceedings should be served upon him (see bankruptcy). the form of the writ of _fieri facias_ requires the sheriff to make a return to the writ. in practice this is seldom done unless the execution has been ineffective or there has been delay in the execution of the writ; but the judgment creditor may obtain an order calling on the sheriff to make a return. a sheriff or his officer, who is guilty of extortion in the execution of the writ, is liable to committal for contempt, and to forfeit l200 and pay all damages suffered by the person aggrieved (sheriffs act 1887 [50 & 51 vict. c. 55], s. 29 [2]), besides being civilly liable to such person. imprisonment for debt in execution of civil judgments is now abolished except in cases of default in the nature of contempt, unsatisfied judgments for penalties, defaults by persons in a fiduciary character, and defaults by judgment debtors (debtors act 1869 [32 & 33 vict. c. 62]; bankruptcy act 1883 [46 & 47 vict. c. 52], ss. 53, 103). imprisonment for debt has been abolished within similar limits in scotland (debtors [scotland] act 1880 [43 & 44 vict. c. 34] and ireland, debtors [ireland] act 1872, 35 & 36 vict. c. 57). there may still be imprisonment in england, under the writ--rarely used in practice--_ne exeat regno_, which issues to prevent a debtor from leaving the kingdom. _writ of elegit._--the writ of _elegit_ is a process enabling the creditor to satisfy his judgment debt out of the lands of the debtor. it derives its name from the election of the creditor in favour of this mode of recovery. it is founded on the statute of westminster (1285, 13 ed. i. c. 18), under which the sheriff was required to deliver to the creditor all the chattels (except oxen and beasts of the plough) and _half_ the lands of the debtor until the debt was satisfied. by the judgments act 1838 the remedy was extended to _all_ the debtor's lands, and by the bankruptcy act 1883 the writ no longer extends to the debtor's goods. the writ is enforceable against legal interests whether in possession or remainder (_hood-barrs_ v. _cathcart_, 1895, 2 ch. 411), but not against equitable interests in land (_earl of jersey_ v. _uxbridge rural sanitary authority_, 1891, 3 ch. 183). when the debtor's interest is equitable, recourse is had to equitable execution by the appointment of a receiver or to bankruptcy proceedings. the writ is directed to the sheriff, who, after marking on it the date of its receipt, at once in pursuance of its directions holds an inquiry with a jury as to the nature and value of the interest of the debtor in the lands extended under the writ, and delivers to the creditor at a reasonable price and extent in accordance with the writ, the lands of which the debtor was possessed in the bailiwick. when the sheriff has returned and filed a record (in the central office of the high court) of the writ and the execution thereof, the execution creditor becomes "tenant to the elegit." where the land is freehold the creditor acquires only a chattel interest in it; where the land is leasehold he acquires the whole of the debtor's interest (_johns_ v. _pink_, 1900, 1 ch. 296). the creditor is entitled to hold the land till his debt is satisfied, or enough to satisfy it is tendered to him, and under the judgments act 1864 the creditor may obtain an order for sale. until the land is delivered on execution and the writs which have effected the delivery are registered in the land registry, the judgment does not create any charge on the land so as to fetter the debtor's power of dealing with it. land charges registration acts 1888 and 1900. (see r.s.c., o. xliii.) _writs of possession and delivery._--judgments for the recovery or for the delivery of the possession of land are enforceable by writ of possession. the recovery of specific chattels is obtained by writ of delivery (r.s.c., o. xlvii., xlviii.). _writ of sequestration._--where a judgment directing the payment of money into court, or the performance by the defendant of any act within a limited time, has not been complied with, or where a corporation has wilfully disobeyed a judgment, a writ of sequestration is issued, to not less than four sequestrators, ordering them to enter upon the real estate of the party in default, and "sequester" the rents and profits until the judgment has been obeyed (r.s.c., o. xliii. r. 6). _equitable execution._--where a judgment creditor is otherwise unable to reach the property of his debtor he may obtain equitable execution, usually by the appointment of a receiver, who collects the rents and profits of the debtor's land for the benefit of the creditor (r.s.c., o. l. rr. 15a-22). but receivers may be appointed of interests in personal property belonging to the debtor by virtue of the judicature act 1873, s. 25 (8). _attachment._--a judgment creditor may "attach" debts due by third parties to his debtor by what are known as garnishee proceedings. stock and shares belonging to a judgment debtor may be charged by a charging order, so as, in the first instance, to prevent transfer of the stock or payment of the dividends, and ultimately to enable the judgment creditor to realise his charge. a writ of attachment of the person of a defaulting debtor or party may be obtained in a variety of cases akin to contempt (e.g. against a person failing to comply with an order to answer interrogatories, or against a solicitor not entering an appearance in an action, in breach of his written undertaking to do so), and in the cases where imprisonment for debt is still preserved by the debtors act 1869 (r.s.c., o. xliv.). contempt of court (q.v.) in its ordinary forms is also punishable by summary committal. _county courts._--in the county courts the chief modes of execution are "warrant of execution in the nature of a writ of _fieri facias_"; garnishee proceedings; equitable execution; warrants of possession and delivery, corresponding to the writs of possession and delivery above mentioned; committal, where a judgment debtor has, or, since the date of the judgment has had, means to pay his debt; and attachment of the person for contempt of court. if the judgment debtor assaults the bailiff or his officer or rescues the goods, he is liable to a fine not exceeding l5. scotland.--the principal modes of execution or "diligence" in scots law are (i.) arrestment and furthcoming, which corresponds to the english garnishee proceedings; (ii.) arrestment _jurisdictionis fundandae causa_, i.e. the seizure of movables within the jurisdiction to found jurisdiction against their owner, being a foreigner; this precedure, which is not, however, strictly a "diligence," as it does not bind the goods, is analogous to the french _saisie-arret_, and to the obsolete practice in the mayor's court of london known as "foreign attachment" (see glyn and jackson, _mayor's court practice_, 2nd ed., vii. 260); (iii.) arrestment under _meditatione fugae_ warrant, corresponding to the old english writ of _ne exeat regno_, and applicable in the case of a debtor who intends to leave scotland to evade an action; (iv.) arrestment on dependence, i.e. of funds in security; (v.) poinding, i.e. valuation and sale of the debtor's goods; (vi.) sequestration, e.g. of tenant's effects under a landlord's hypothec for rent; (vii.) action of adjudication, by which a debtor's "heritable" (i.e. real) estate is transferred to his judgment creditor in satisfaction of his debt or security therefor. in scots law "multiplepoinding" is the equivalent of "interpleader." ireland.--the law of execution in ireland (see r.s.c., 1905, orders xli.-xlviii.) is practically the same as in england. british possessions.--the judicature acts of most of the colonies have also adopted english law. parts of the french _code de procedure civile_ are still in force in mauritius. but its provisions have been modified by local enactment (no. 19 of 1868) as regards realty, and the rules of the supreme court 1903 have introduced the english forms of writs. quebec and st lucia, where french law formerly prevailed, have now their own codes of civil procedure. the law of execution under the quebec code resembles the french, that under the st lucia code the english system. in british guiana and ceylon, in which roman dutch law in one form or another prevailed, the english law of execution has now in substance been adopted (british guiana rules of court, 1900, order xxxvi.)., ceylon (code of civil procedure, no. 2 of 1889); the modes of execution in the south african colonies are also the subject of local enactment, largely influenced by english law (cf. the sheriffs' ordinance, 1902, no. 9 of 1902), (orange river colony) and (proclamation 17 of 1902), transvaal (nathan, _common law of south africa_, vol. iv. p. 2206); and generally, van zyl, _judicial practice of south africa_, pp. 198 et seq. united states.--execution in the united states is founded upon english law, which it closely resembles. substantially the same forms of execution are in force. the provisions of the statute of frauds making the lien of execution attach only on delivery to the sheriff were generally adopted in america, and are still law in many of the states. the law as to the rights and duties of sheriffs is substantially the same as in england. the "homestead laws" (q.v.) which are in force in nearly all the american states exempt a certain amount or value of real estate occupied by a debtor as his homestead from a forced sale for the payment of his debts. this homestead legislation has been copied in some british colonies, e.g. western australia (no. 37 of 1898, pt. viii.), quebec (rev. stats., ss. 1743-1748), manitoba (rev. stats., 1902, c. 58, s. 29, c. 21, s. 9), ontario (rev. stats., 1897, c. 29), british columbia (rev. stats., 1897, c. 93), new south wales (crown lands act 1895, pt. iii.), new zealand (family homes protection act 1895, no. 20 of 1895). france.--provisional execution (_saisie-arret_) with a view to obtain security has been already mentioned. execution against personalty (_saisie-execution_) is preceded by a _commandement_ or summons, personally served upon, or left at the domicile of the debtor calling on him to pay. the necessary bedding of debtors and of their children residing with them, and the clothes worn by them, cannot be seized in execution under any circumstances. objects declared by law to be immovable by destination (_immeubles par destination_), such as beasts of burden and agricultural implements, books relating to the debtor's profession, to the value of 300 francs, workmen's tools, military equipments, provisions and certain cattle cannot be seized, even for a debt due to government, unless in respect of provisions furnished to the debtor, or amounts due to the manufacturers or vendors of protected articles or to parties who advanced moneys to purchase, manufacture or repair them. growing fruits cannot be seized except during the six weeks preceding the ordinary period when they become ripe. execution against immovable property (_la saisie immobiliere_) is preceded also by a summons to pay, and execution cannot issue until the expiry of 30 days after service of such summons (see further code proc. civ., arts. 673-689). imprisonment for debt was abolished in all civil and commercial matters by the law of 22nd of july 1867, which extends to foreigners. it still subsists in favour of the state for non-payment of fines, &c. the french system is in substance in force in belgium (code civ. proc., arts. 51 et seq.), the netherlands (code civ. proc., arts. 430 et seq.), italy (code civ. proc., arts. 553 et seq., 659 et seq.), and spain. germany.--under the german code of civil procedure (arts. 796 et seq.), both the goods and (if the goods do not offer adequate security) the person of the debtor may be seized (the process is called _arrest_) as a guarantee of payment. the debtor's goods cannot be sold except in pursuance of a judgment notified to the debtor either before or within a prescribed period after the execution (art. 809 [3], and law of 30th of april 1886). imprisonment for debt in civil and commercial matters has been abolished or limited on the lines of the french law of 1867 in many countries (e.g. italy, law of the 6th of december 1877; belgium, law of the 27th of july 1871; greece, law of the 9th of march 1900; russia, decree of the 7th of march 1879). authorities.--anderson, _execution_ (london, 1889); _annual practice_ (london, 1908); johnston edwards, _execution_ (london, 1888); mather, _sheriff law_ (london, 1903). as to scots law, mackay, _manual of practice_ (edinburgh, 1893). as to american law, bingham, _judgments and executions_ (philadelphia, 1836); a.c. freeman, _law of execution_, civil cases (3rd ed., san francisco, 1900); h.m. herman, _law of executions_ (new york, 1875); american notes to _tit._ "execution," in _ruling cases_ (london and boston, 1897); bouvier, _law dict._, ed. rawle (1897), s.v. "execution."