Read CHAPTER XXV of The Complete English Tradesman, free online book, by Daniel Defoe, on


As I said that credit is maintained by just and honourable dealing, so that just dealing depends very much upon the tradesman’s punctual payment of money in all the several demands that are upon him.  The ordinary demands of money upon a tradesman are ­

I. Promises of money for goods bought at time.

II.  Bills drawn upon him; which, generally speaking, are from the country, that is to say, from some places remote from where he lives.  Or,

III.  Promissory notes under his hand, which are passed oftentimes upon buying goods:  bought also at time, as in the first head.

IV.  Bonds bearing interest, given chiefly for money borrowed at running interest.

1.  Promises of money for goods bought at time.  This indeed is the loosest article in a tradesman’s payments; and it is true that a tradesman’s credit is maintained upon the easiest terms in this case of any other that belongs to trade; for in this case not one man in twenty keeps to his time; and so easy are tradesmen to one another, that in general it is not much expected, but he that pays tolerably well, and without dunning, is a good man, and in credit; shall be trusted any where, and keeps up a character in his business:  sometimes he pays sooner, sometimes later, and is accounted so good a customer, that though he owes a great deal, yet he shall be trusted any where, and is as lofty and touchy if his credit be called in question, as if he paid all ready money.

And, indeed, these men shall often buy their goods as cheap upon the credit of their ordinary pay, as another man shall that brings his money in his hand; and it is reasonable it should be so, for the ready-money man comes and buys a parcel here and a parcel there, and comes but seldom, but the other comes every day, that is to say, as often as he wants goods, buys considerably, perhaps deals for two or three thousand pounds a-year with you, and the like, and pays currently too.  Such a customer ought indeed to be sold as cheap to, as the other chance customer for his ready money.  In this manner of trade, I say, credit is maintained upon the easiest terms of any other, and yet here the tradesman must have a great care to keep it up too; for though it be the easiest article to keep up credit in, yet even in this article the tradesman may lose his credit, and then he is undone at once; and this is by growing (what in the language of trade is called) long-winded, putting off and putting off continually, till he will bear dunning; then his credit falls, his dealer that trusted him perhaps a thousand pounds previously, that esteemed him as good as ready money, now grows sick of him, declines him, cares not whether he deals with him or no, and at last refuses to trust him any longer.  Then his credit is quite sunk and gone, and in a little after that his trade is ruined and the tradesman too; for he must be a very extraordinary tradesman that can open his shop after he has outlived his credit:  let him look which way he will, all is lost, nobody cares to deal with him, and, which is still worse, nobody will trust him.

2.  Bills drawn upon him from the country, that is to say, from some places remote from where he now dwells:  it is but a little while ago since those bills were the loosest things in trade, for as they could not be protested, so they would not (in all their heats) always sue for them, but rather return them to the person from whom they received them.

In the meantime, let the occasion be what it will, the tradesman ought on all occasions to pay these notes without a public recalling and returning them, and without hesitation of any kind whatsoever.  He that lets his bills lie long unpaid, must not expect to keep his credit much after them.

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

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

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

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

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

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

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

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

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

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

Secondly, it keeps the factor always bare of money, and wounds his reputation, so that he pays those very bills with discredit, which in justice to himself he ought not to pay at all, and the borrower has the money, at the expense of the credit of the lender; whereas, indeed, the reproach ought to be to him that borrows, not to him that lends ­to him that draws where there are no effects to warrant his draft, not to him that pays where he does not owe.

But the damage lies on the circumstances of accepting the bill, for the factor lends his employer the money the hour he accepts the bill, and the blow to his credit is for not paying when accepted.  When the bill is accepted, the acceptor is debtor to the person to whom the bill is payable, or in his right to every indorser; for a bill of exchange is in this case different from a bond, namely, that the right of action is transferable by indorsement, and every indorser has a right to sue the acceptor in his own name, and can transfer that right to another; whereas in a bond, though it be given to me by assignment, I must sue in the name of the first person to whom the bond is payable, and he may at any time discharge the bond, notwithstanding my assignment.

Tradesmen, then, especially such as are factors, are unaccountably to blame to accept bills for their employers before their goods are sold, and the money received, or within reach:  if the employers cannot wait, the reproach should lie on them, not on the factor; and, indeed, the manufacturers all over England are greatly wrong in that part of their business; for, not considering the difference between a time of demand and a time of glut, a quick or a dead market, they go on in the same course of making, and, without slackening their hands as to quantity, crowd up their goods, as if it were enough to them that the factor had them, and that they were to be reckoned as sold when they were in his hands:  but would the factor truly represent to them the state of the market ­that there are great quantities of goods in hand unsold, and no present demand, desiring them to slack their hands a little in making; and at the same time back their directions in a plain and positive way, though with respect too, by telling them they could accept no more bills till the goods were sold.  This would bring the trade into a better regulation, and the makers would stop their hands when the market stopped; and when the merchant ceased to buy, the manufacturers would cease to make, and, consequently, would not crowd or clog the market with goods, or wrong their factors with bills.

But this would require a large discourse, and the manufacturers’ objections should be answered, namely, that they cannot stop, that they have their particular sets of workmen and spinners, whom they are obliged to keep employed, or, if they should dismiss them, they could not have them again when a demand for goods came, and the markets revived, and that, besides, the poor would starve.

These objections are easy to be answered, though that is not my present business; but thus far it is to my purpose ­it is the factor’s business to keep himself within compass:  if the goods cannot be sold, the maker must stay till they can; if the poor must be employed, the manufacturer is right to keep them at work if he can; but if he cannot, without oppressing the factor, then he makes the factor employ them, not himself; and I do not see the factor has any obligation upon him to consider the spinners and weavers, especially not at the expense of his own credit, and his family’s safety.

Upon the whole, all tradesmen that trade thus, whether by commission from the country, or upon their own accounts, should make it the standing order of their business not to suffer themselves to be overdrawn by their employers, so as to straiten themselves in their cash, and make them unable to pay their bills when accepted.  It is also to be observed, that when a tradesman once comes to suffer himself to be thus overdrawn, and sinks his credit in kindness to his employer, he buys his employment so dear as all his employer can do for him can never repay the price.

And even while he is thus serving his employer, he more and more wounds himself; for suppose he does (with difficulty) raise money, and, after some dunning, does pay the bills, yet he loses in the very doing it, for he never pays them with credit, but suffers in reputation by every day’s delay.  In a word, a tradesman that buys upon credit, that is to say, in a course of credit, such as I have described before, may let the merchant or the warehouse-keeper call two or three times, and may put him off without much damage to his credit; and if he makes them stay one time, he makes it up again another, and recovers in one good payment what he lost in two or three bad ones.

But in bills of exchange or promissory notes, it is quite another thing; and he that values his reputation in trade should never let a bill come twice for payment, or a note under his hand stay a day after it is due, that is to say, after the three days of grace, as it is called.  Those three days, indeed, are granted to all bills of exchange, not by law, but by the custom of trade:  it is hard to tell how this custom prevailed, or when it began, but it is one of those many instances which may be given, where custom of trade is equal to an established law; and it is so much a law now in itself, that no bill is protested now, till those three days are expired; nor is a bill of exchange esteemed due till the third day; no man offers to demand it, nor will any goldsmith, or even the bank itself, pay a foreign bill sooner.  But that by the way.

Bills of exchange being thus sacred in trade, and inland bills being (by the late law for protesting them, and giving interest and damage upon them) made, as near as can be, equally sacred, nothing can be of more moment to a tradesman than to pay them always punctually and honourably.

Let no critic cavil at the word honourably, as it relates to trade:  punctual payment is the honour of trade, and there is a word always used among merchants which justifies my using it in this place; and that is, when a merchant draws a bill from abroad upon his friend at London, his correspondent in London answering his letter, and approving his drawing upon him, adds, that he shall be sure to honour his bill when it appears; that is to say, to accept it.

Likewise, when the drawer gives advice of his having drawn such a bill upon him, he gives an account of the sum drawn, the name of the person it is payable to, the time it is drawn at, that is, the time given for payment, and he adds thus ­’I doubt not your giving my bill due honour;’ that is, of accepting it, and paying it when it is due.

This term is also used in another case in foreign trade only, namely ­a merchant abroad (say it be at Lisbon, or Bourdeaux) draws a bill of L300 sterling upon his correspondent at London:  the correspondent happens to be dead, or is broke, or by some other accident the bill is not accepted; another merchant on the Exchange hearing of it, and knowing, and perhaps corresponding with, the merchant abroad who drew the bill, and loth his credit should suffer by the bill going back protested, accepts it, and pays it for him.  This is called accepting it for the honour of the drawer; and he writes so upon the bill when he accepts it, which entitles him to re-draw the same with interest upon the drawer in Lisbon or Bourdeaux, as above.

This is, indeed, a case peculiar to foreign commerce, and is not often practised in home trade, and among shopkeepers, though sometimes I have known it practised here too:  but I name it on two accounts, first ­to legitimate the word honourable, which I had used, and which has its due propriety in matters of trade, though not in the same acceptation as it generally receives in common affairs; and, secondly, to let the tradesman see how deeply the honour, that is, the credit of trade, is concerned in the punctual payment of bills of exchange, and the like of promissory notes; for in point of credit there is no difference, though in matter of form there is.

There are a great many variations in the drawing bills from foreign countries, according as the customs and usages of merchants direct, and according as the coins and rates of exchange differ, and according as the same terms are differently understood in several places; as the word usance, and two usance, which is a term for the number of days given for payment, after the date of the bill; and though this is a thing particularly relating to merchants, and to foreign commerce, yet as the nature of bills of exchange is pretty general, and that sometimes an inland tradesman, especially in seaport towns, may be obliged to take foreign accepted bills in payment for their goods; or if they have money to spare (as sometimes it is an inland tradesman’s good luck to have), may be asked to discount such bills ­I say, on this account, and that they may know the value of a foreign bill when they see it, and how far it has to run, before it has to be demanded, I think it not foreign to the case before me, to give them the following account: ­

1.  As to the times of payment of foreign bills of exchange, and the terms of art ordinarily used by merchants in drawing, and expressed in the said bills:  the times of payment are, as above, either ­

(1.) At sight; which is to be understood, not the day it is presented, but three days (called days of grace) after the bill is accepted:  (2.) usance:  (3.) two usance.

Usance between London and all the towns in the States Generals’ dominions, and also in the provinces now called the Austrian Netherlands [Belgium], is one month.  And two usance is two months; reckoning not from the acceptance of the bill, but from the date of it.  Usance between London and Hamburgh is two months, Venice is three months; and double usance, or two usance, is double that time.  Usance payable at Florence or Leghorn, is two months; but from thence payable at London, usance is three months.  Usance from London to Rouen or Paris, is one month; but they generally draw at a certain number of days, usually twenty-one days’ sight.  Usance from London to Seville, is two months; as likewise between London and Lisbon, and Oporto, to or from.  Usance from Genoa to Rome is payable at Rome ten days after sight.  Usance between Antwerp and Genoa, Naples or Messina, is two months, whether to or from.  Usance from Antwerp or Amsterdam, payable at Venice, is two months, payable in bank.

There are abundance of niceties in the accepting and paying of bills of exchange, especially foreign bills, which I think needless to enter upon here; but this I think I should not omit, namely ­

That if a man pays a bill of exchange before it is due, though he had accepted it, if the man to whom it was payable proves a bankrupt after he has received the money, and yet before the bill becomes due, the person who voluntarily paid the money before it was due, shall be liable to pay it again to the remitter; for as the remitter delivered his money to the drawer, in order to have it paid again to such person as he should order, it is, and ought to be, in his power to divert the payment by altering the bill, and make it payable to any other person whom he thinks fit, during all the time between the acceptance and the day of payment.

This has been controverted, I know, in some cases, but I have always found, that by the most experienced merchants, and especially in places of the greatest business abroad, it was always given in favour of the remitter, namely, that the right of guiding the payment is in him, all the time the bill is running; and no bill can or ought to be paid before it is due, without the declared assent of the remitter, signified under his hand, and attested by a public notary.  There are, I say, abundance of niceties in the matter of foreign exchanges, and in the manner of drawing, accepting, and protesting bills; but as I am now speaking with, and have confined my discourse in this work to, the inland tradesmen of England, I think it would be as unprofitable to them to meddle with this, as it would be difficult to them to understand it.

I return, therefore, to the subject in hand, as well as to the people to whom I have all along directed my discourse.

Though the inland tradesmen do not, and need not, acquaint themselves with the manner of foreign exchanges, yet there is a great deal of business done by exchange among ourselves, and at home, and in which our inland trade is chiefly concerned; and as this is the reason why I speak so much, and repeat it so often to the tradesman for whose instruction I am writing, that he should maintain the credit of his bills, so it may not be amiss to give the tradesman some directions concerning such bills.

He is to consider, that, in general, bills pass through a number of hands, by indorsation from one to another, and that if the bill comes to be protested afterwards and returned, it goes back again through all those hands with this mark of the tradesman’s disgrace upon it, namely, that it has been accepted, but that the man who accepted it is not able to pay it, than which nothing can expose the tradesman more.

He is to consider that the grand characteristic of a tradesman, and by which his credit is rated, is this of paying his bills well or ill.  If any man goes to the neighbours or dealers of a tradesman to inquire of his credit, or his fame in business, which is often done upon almost every extraordinary occasion, the first question is, ’How does he pay his bills?’ As when we go to a master or mistress to inquire the character of a maid-servant, one of the first questions generally is of her probity, ‘Is she honest?’ so here, if you would be able to judge of the man, your first question is, ’What for a paymaster is he?  How does he pay his bills?’ ­strongly intimating, and, indeed, very reasonably, that if he has any credit, or any regard to his credit, he will be sure to pay his bills well; and if he does not pay his bills well, he cannot be sound at bottom, because he would never suffer a slur there, if it were possible for him to avoid it.  On the other hand, if a tradesman pays his bills punctually, let whatever other slur be upon his reputation, his credit will hold good.  I knew a man in the city, who upon all occasions of business issued promissory notes, or notes under his hand, at such or such time, and it was for an immense sum of money that he gave out such notes; so that they became frequent in trade, and at length people began to carry them about to discount, which lessened the gentleman so much, though he was really a man of substance, that his bills went at last at twenty per cent, discount or more; and yet this man maintained his credit by this, that though he would always take as much time as he could get in these notes, yet when they came due they were always punctually paid to a day; no man came twice for his money.

This was a trying case, for though upon the multitude of his notes that were out, and by reason of the large discount given upon them, his credit at first suffered exceedingly, and men began to talk very dubiously of him, yet upon the punctual discharge of them when due, it began presently to be taken notice of, and said openly how well he paid his notes; upon which presently the rate of his discount fell, and in a short time all his notes were at par; so that punctual payment, in spite of rumour, and of a rumour not so ill grounded as rumours generally are, prevailed and established the credit of the person, who was indeed rich at bottom, but might have found it hard enough to have stood it, if, as his bills had a high discount upon them, they had been ill paid too.  All which confirms what I have hitherto alleged, namely, of how much concern it is for a tradesman to pay his bills and promissory notes very punctually.

I might argue here how much it is his interest to do so, and how it enables him to coin as many bills as he pleases ­in short, a man whose notes are currently paid, and the credit of whose bills is established by their being punctually paid, has an infinite advantage in trade; he is a bank to himself; he can buy what bargains he pleases; no advantage in business offers but he can grasp at it, for his notes are current as another man’s cash; if he buys at time in the country, he has nothing to do but to order them to draw for the money when it is due, and he gains all the time given in the bills into the bargain.

If he knows what he buys, and how to put it off, he buys a thousand pounds’ worth of goods at once, sells them for less time than he buys at, and pays them with their own money.  I might swell this discourse to a volume by itself, to set out the particular profit that such a man may make of his credit, and how he can raise what sums he will, by buying goods, and by ordering the people whom he is to pay in the country, to draw bills on him.  Nor is it any loss to those he buys of, for as all the remitters of money know his bills, and they are currently paid, they never scruple delivering their money upon his bills, so that the countryman or manufacturer is effectually supplied, and the time given in the bill is the property of the current dealer on whom they are drawn.

But, then, let me add a caution here for the best of tradesmen not to neglect ­namely, as the tradesman should take care to pay his bills and notes currently, so, that he may do it, he must be careful what notes he issues out, and how he suffers others to draw on him.  He that is careful of his reputation in business, will also be cautious not to let any man he deals with over draw him, or draw upon him before the money drawn for his due.  And as to notes promissory, or under his hand, he is careful not to give out such notes but on good occasions, and where he has the effects in his hand to answer them; this keeps his cash whole, and preserves his ability of performing and punctually paying when the notes become due; and the want of this caution has ruined the reputation of a tradesman many times, when he might otherwise have preserved himself in as good credit and condition as other men.

All these cautions are made thus needful on account of that one useful maxim, that the tradesman’s all depends upon his punctual complying with the payment of his bills.