Bills of exchange are one of the more obscure paper collectibles. A bill of exchange is a form of promissory note requiring a person to make payment to a named payee. There are three parties to a bill of exchange. The payee is the person to receive the money, the drawee pays the money and the drawer is the party requiring the payment to be made.
Bills of exchange were written in duplicate or triplicate. The different versions were referred to First of Exchange, Second of Exchange and Third of Exchange. The three bills were forwarded to the drawer by different means in the event of delay or calamity. The first bill to reach the drawee was paid. The others would be canceled upon receipt by the drawee.
Bills of exchange were common in the 19th century and most often used for international transactions. They were most often used to pay for goods to be imported. The importer was usually the drawer who directed payment to the merchant he was purchasing from. The drawee was typically a banking house in the same country as the merchant who held money belonging to the importer.
Bills of exchange were negotiable instruments and could be transferred by endorsement. Subsequent holders were holders in due course and had the ability to collect the amount due from the drawee or any previous endorser.
The bill of exchange illustrated here is a Second of Exchange. It was written by William Benton Hogg, a purser in the United States Navy. (Hogg would become Paymaster of the Navy shortly before his retirement in 1871). It directs the Secretary of the Navy, James C. Dobbin, to pay $10,000.00 to Commander Cadwalader Ringgold. It is dated November 3, 1853 at Simon’s Bay, a naval facility at Cape Town now known as Simons Town on False Bay in South Africa. It was for payment of expenses for the North Pacific Exploring and Survey Expedition of 1853. Commander Ringgold was in charge of the expedition. His flagship, the USS Vincennes, is noted on the bill.
Ringgold endorsed the bill on the back to Gideon S. Holmes, United States Consul at Cape Town. Holmes, in turn, negotiated it to an indecipherable banking house in Boston. It is probable that Ringgold received payment in Mexican silver pesos rather than US coinage. The Mexican peso coin was the most widely recognized silver coin in the world at this time and was the preferred medium of exchange in East Asia. The Cape Colony was the last stop for the Vincennes before arriving in the Pacific via the Indian Ocean.
The Expedition spent the summer of 1854 charting the islands and rivers in southeast Asia and China from the port of Hong Kong. The flotilla continued north into the Bering Sea before working its way along the Alaskan and Canadian coasts. Ringgold was relieved of command of the Expedition in July 1854 due to a deteriorating mental state caused by a bout of malaria. He was replaced by Lt. John Rodgers. The expedition provided significant data and mapping of the northern Pacific which was used as late as World War II.