Page:EB1911 - Volume 10.djvu/62

 Dukes and counts of the Empire and the Italian reigning princes continued, however, to be “excellencies” for a while longer. In 1593 the bestowal of the title of excellence by Henry IV. of France on the duc de Nevers, his ambassador at Rome, set a precedent that was universally followed from the time of the treaty of Westphalia (1648). This, together with the reservation in 1640 of the title “” (q.v.) to the cardinals, led the Italian princes to adopt the style of “highness” (altezza) instead of “excellency.” In France, from 1654 onwards, the title of excellence was given to all high civil and military officials, and this example was followed in Germany in the 18th century.

The subsequent fate of the title varies very greatly in different countries. In Great Britain it is borne by the viceroy of India, the lord-lieutenant of Ireland, all governors of colonies and ambassadors. In the United States it is part of the official style of the governors of states, but not of that of the president; though diplomatic usage varies in this respect, some states (e.g. France) conceding to him the style of “excellency,” others (e.g. Belgium) refusing it. The custom of other republics differs: in France the president is addressed as excellence by courtesy; in Switzerland the title is omitted; in the South American republics it is part of the official style (Pradier-Fodéré, Cours de droit diplom. i. 89). In Spain the title of excelencia properly belonged to the grandees and to those who had the right to be covered in the royal presence, but it was extended also to high officials, viceroys, ministers, captains-general, lieutenants-general, ambassadors and knights of the Golden Fleece. In Austria the title Exzellenz belongs properly to privy councillors. It has, however, gradually been extended by custom to all the higher military commands from lieutenant-field-marshal upwards. Ministers, even when not privy councillors, are styled Exzellenz. In Germany the title is borne by the imperial chancellor, the principal secretaries of state, ministers and Oberpräsidenten in Prussia, by generals from the rank of lieutenant-general upwards, by the chief court officials, and it is also sometimes bestowed as a title of honour in cases where it is not attached to the office held by its recipient. In Russia the title is very common, being borne by all officers from major-general upwards and by all officials above the rank of acting privy councillor. Officers and officials of the highest rank have the title of “high excellency.” Finally, in Italy, the title eccelenza, which had come to be used in the republics of Venice and Genoa as the usual form of address to nobles, has become as meaningless as the English title of “esquire” or the address of “sir,” being, especially in the south, the usual form of address to any stranger.

In the diplomatic service the title of excellency is technically reserved to ambassadors, but in addressing envoys also this form is commonly used by courtesy.

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 ). 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 .)

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 £100, and that B in London did not require to remit more than £90 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 £99:19:0, and could then, after satisfying his debt to D, have £10 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 £10 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 £100. Supposing the necessities of B induced him to offer A only £99:14:0 for his £100 claim, A would then prefer that C remitted him £100 in coin, which, on the above scale of expenses would cost 5s. and A would receive £99:15:0 net. On these premises, exchange on Edinburgh in London cannot fall below % discount, and the same circumstances prevent it from rising above % premium, for B, in no case, would pay more for A’s claim than £100 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 % discount or % 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