Foreign bills of exchange are thought to have been invented by the Florentine and Venetian merchants in the 12th or 13th century as a means of transmitting credit from one country to another without the need of actually transferring money. The time of their first use in England is uncertain. Bills of exchange were not at first negotiable, and did not pass from hand to hand as they now do, but became so in the 16th or in the early part of the 17th century.
Inland bills and promissory notes came into use in England about the middle of the 17th century. One of the Judges of England, Lord Holt, in the early part of the 18th century, doubted the negotiability of promissory notes,8 and the Statute of 3 and 4 Anne, c. 9, was passed to declare them negotiable.
Bills and notes were first negotiable by the custom of merchants and then by reason of the universality of such
7. Street, Foundations of Legal Liability, Vol. 2, Ch. 31.
8. Clerke v. Martin, 2 Ld. Raym. 757.
custom, by the common law. Many statutes have since been passed in respect to such instruments, but are in declaration of or addition or amendment to the common law whereby they were first negotiable. Lord Holt's opinion in respect to promissory notes is believed to have been error.
In 1878 Judge M. D. Chalmers published a Digest of the English Law of Bills, Notes and Checks. His work attracted much attention and praise, and his services were procured to draft a bill which should put the law of England in the form of a Code, and in 1882 the English Bills of Exchange Act was enacted by Parliament.
By the adoption of the common law the American states adopted the law of negotiable paper. And the law has developed therein according to the needs of the commercial world.
The American commonwealths adopted the English common law. They thereby adopted the law of negotiable instruments as it was at the date which governs the adoption. Statutes have been passed from time to time which amend the common law, but this legislation up to very recently has been of a detached sort. After Judge Chalmers' Act was passed in England, the need of a similar codification was felt in this country. It was really much more needed on account of the arbitrary division of our country into various legislative jurisdictions. In 1890 the legislature of New York had authorized the appointment of commissioners to confer with commissioners from other states in respect to uniformity in legislation. Shortly afterwards commissioners were appointed by other states and the Commissioners on
Uniformity of Legislation came to be widely representative. These commissioners procured in 1895 the services of Mr. J. J. Crawford to draw up a Code; and the results of his labors were adopted in 1896 and recommended to the various states for passage. New York was the first state to act upon such recommendation but the Uniform Negotiable Instruments Law, with some minor changes in various instances, has been adopted as noted in Appendix A in which the text of said Act is set out verbatim.