the specific legislation which I have explained, will belong to the central body. It will be seen, under the 91st clause, that the classification is not intended to restrict the generality' of the powers previously given to the central Parliament, and that those powers extend to all laws made for the peace, order, and good government' of the Confederation--terms which, according to all precedent, will. I understand, carry with them an ample measure of legislative authority."15

The bill passed through its remaining stages in the House of Lords without division, and was presented for second reading in the Commons on the 28th February. In moving the second reading Mr. Adderley remarked:

"The central legislature will be invested with the general power of providing for the good government and peace of the country; but, without derogating from the general power, certain specific powers are enumerated for the central legislature. It will be seen that by these provisions arrangements are made as far as possible for ensuring the unity and strength of the central government."16

The second reading was passed without division after a short debate. The committee stage was passed in a single evening, and the bill ultimately received the royal assent on the 29th March, 1867.

Upon reading the debates as a whole two points strike the attention. In the first place, no speaker, whether an advocate or an opponent of confederation, seems to have doubted that the Dominion was endowed with a general power to pass all legislation that it might deem to be for the general interest of Canada. Broadly speaking, the distinction between section 91 and section 92 was the distinction between those things that were of general and those that were of merely local importance. The true balance of the constitution is to be found in the opposition between the words "laws for the peace, order, and good government of Canada," in section 91, and the concluding words of section 92-" Generally, all matters of a merely local or private nature in the Province." The detailed enumerations were really intended to be explanatory of these two main principles, subject to the proviso that nothing specifically mentioned in section. 91 should be deemed to be of a local or private nature. No speaker in any of the debates even suggested that the words "property civil rights" were to be treated as a kind of residuary clause covering the whole field of civil law, apart from the specific instances enumer

15 Hansard, Vol. 185, coll. 563, 566.

and

ated in section 91. The true meaning of these words is undoubtedly that laid down in Russell v. The Queen in 1882.17

The second point that will strike the student of these debates is that nobody even thought of the modern idea that the words "peace, order, and good government" were intended to provide a kind of reserve power to be used only in the event of war, pestilence, or similar national calamities. So far as I am aware, this doctrine begins with the judgment in Re the Board of Commerce Act.18 The encroachment upon the sound and lucid doctrine of Russell v. The Queen began much earlier, but it did not at first amount to a denial of the main principle of Confederation. For example, we find Lord Watson saying in the Prohibition Case1o:

"Their Lordships do not doubt that some matters, in their origin local and provincial, may attain such dimensions as to affect the body politic of the Dominion, and to justify the Canadian Parliament in passing laws for their regulation or abolition in the interest of the Dominion. But great caution must be observed in distinguishing between that which is local and provincial, and therefore within the jurisdiction of the provincial legislature, and that which has ceased to be merely local or provincial, and has become matter of national concern, in such sense as to bring it within the jurisdiction of the Parliament of Canada."

In these words we have a clear recognition of the true test of jurisdiction, as laid down by the statesmen of 1867. It may be that in 1896 their Lordships still retained personal memories of the origins of Canadian confederation. Twenty-six years later another Board, unmindful of Canadian history, and debarred by the rules of interpretation from reading it, produces the theory that the words "peace, order and good government" were inserted into our constitution in order to enable the Dominion Parliament to deal with cases of war and pestilence.

Whether the principle of federal government devised by our forefathers or that more recently established by the Privy Council is the better for Canada is a question of policy beyond the scope of this article. I hope that I have written enough to show that they are not the same.

Oxford, June 1st, 1926.

17 7 A.C. 829, at 839.

HERBERT A. SMITH.

18

[1922] 1 A.C. 191.

19

Atty.-Gen. of Ontario v. Atty.-Gen. of Canada, [1896] A.C. 348, at 361.

THE ORIGIN, EARLY HISTORY, AND LATER DEVELOPMENT OF BILLS OF EXCHANGE AND CERTAIN OTHER

NEGOTIABLE INSTRUMENTS.1

It is proposed in this and the succeeding article to sketch in brief outline the origin and historical development of bills of exchange and other negotiable instruments, particularly as relating to the functions of acceptance and indorsement; and also historically to deal with certain liabilities of the parties to such instruments.

1b

la

As the main subject of this article is so nearly connected with representative money, some slight reference may be made to a few of the early media of exchange. Before coinage was instituted in the seventh century B.C., either by Pheidon, king of Argos, or by the Lydians, the principal media of exchange consisted of cattle and skins, and in later times of cubes or strips of precious or other metals, which varied in value according to weight. The early monetary system was both cumbersome and unsafe, notwithstanding the advent of coinage: particularly when any large amount had to be transmitted from one place to another. Therefore, even in very carly times the great advantage of a system of representative money had made itself apparent, and the ingenuity of the ancients was exercised in devising such a system. As we shall see later, whilst trade instruments were well known in ancient times, skins were perhaps the earliest form of representative money; and we find that probably as early as in the eleventh century B.C., certain lengths of silk and cloth were accepted as currency in China.3 "Leather money" also made its appearance in the far East long before the Christian Era: also in Carthage. In China this "money" consisted of small pieces of leather or parchment, varying in size according to the value represented, stamped with an official seal and sometimes also bearing the signature of an official or officials. Marco Polo, the Venetian traveller, who resided at the Court of Kublai Khan from 1275-1284, writing of his travels in China," refers to the practice he found existing there of using the inner bark of the mulberry tree for the manufacture of representative money, which was treated as currency, not only by the inhabitants of the territories over which the Khan ruled, but by foreigners trading in those territories. The Carthaginian leather money appears to have differed from the Chinese, in that it was not official, but consisted of a promise, inscribed on leather or parchment,

to pay the bearer so much metal on demand; and this, bearing the seal of any reputable merchant, passed as currency.

That negotiable securities and various kinds of credit instruments were commonly in use amongst the Eastern people long before the Christian Era seems certain.

Mr. Spencer Brodhurst, in his excellent article on "The Merchants of the Staple," suggests that certain Assyrian tablets in the British Museum may be specimens of early promissory notes. This suggestion cannot be disregarded, when it is borne in mind that the Assyrians were a Semitic race, to whom credit instruments were certainly known."

Та

Sir John Lubbock, referring to Assyrian contract tablets, speaks of "obligations payable to a third person" and "drafts drawn upon one. place payable in another," and gives a copy of an Assyrian draft of the sixth century B.C. (selected from the work of M. Lenormant). This draft consists of an acknowledgment of the receipt of the purchase price of the draft, a statement of the name of the purchaser, and an undertaking to pay a stated sum to a certain person on a certain date. This document is witnessed, and closely approximates the contract of "cambium" which appears in Europe in the twelfth century and to which we shall refer later; and Sir John Lubbock statesb that "these Assyrian drafts were negotiable," but did not admit of indorsement. The fact that they did not admit of indorsement will be readily understood, when we remember that these tablets were made of clay, upon which when soft the contract was inscribed by the aid of a stylus; after which the tablet would be hardened by baking. In this way, of course, the tablet did not admit of anything being added. Therefore, in order to make the instrument transferable from hand to hand, the name of the payee was left in blank. Sir John Lubbock also speaks of letters of credit having been in use before the institution of coinage-i.e. before the seventh century B.C.74

The Babylonians were great traders and bankers; and from the thousands of tablets which are available and have been examined by scholars it is evident that contract in its multiform application was highly developed amongst the Babylonians even in very early times. Sales, leases, loans of all kinds, mortgages of both real and personal property (especially antichretic pledges, or, as we should call them. "Welsh mortgages,"), exchanges of property, formation of partnerships, partitions, were all of common occurrence; and the Code of Hammurabi (c. 2100 B.C.) made elaborate provisions regarding the

8b

Some

anner in which these transactions should be carried out. notice must be taken of this wonderful Code, which was written in clear, simple language, so that all might read and understand it.a Writers have vied with each other in eulogizing it, styling the Code "one of the most important documents in the history of the world, "one of the most remarkable historical monuments that has ever been recovered from the buried cities of the ancient world," etc.; and it is correctly styled a Code in the modern acceptation of that term, in that it was compiled almost wholly from old Sumerian and Akkadian laws which had long been in force in Babylonia. The laws which the Hammurabi legislation codified, therefore, were merely those which had been law for many hundreds of years previous to such codification,se and these laws so promulgated regulated the affairs of the then known civilized world. Many writers see in the Code the basis of the later Mosaic law; but more recent writers are inclined to doubt this, accounting for the similarities in style and substance by the fact that in ancient times conditions of existence were much the same throughout the civilized world, and would call for similar treatment wherever laws were promulgated. In Babylon there was also a complete system of judicature and pleading; and the law relating to agency and partnership was remarkably advanced and "modern" in its incidents. The conception of negotiability was ever present, and nearly every business transaction was required to be evidenced by a document. Anything capable of being the subject of ownership was negotiable, whether it were land, a debt, or anything else having a value. Debts and other choses in action were freely assignable; and we are told, that "any formal acknowledgment of indebtedness could be treated like a negotiable bill;"10 and further that "trade was facilitated because the promises" (ie.,, the promises by debtors to pay the prices of purchases in ordinary market transactions) "circulated as cash."11

A great authority on the period 12 shows that the practice of transmitting money by means of a banker's draft was adopted, and that bonds for the payment of money were negotiable at the time we speak of. The freedom and ease with which any kind of property could be dealt with in ancient Babylonia is one of the outstanding features of the law of those times. The giving of bills and notes in satisfaction of debts was common, and those bills and notes might either be payable on demand or at some future date mentioned in the instrument.13 Having regard to the tortuous path by which, as we shall later see, the conception of negotiability and assignability of