office for the way it had acquitted itself of its duty, which had been in some instances very heavy.

The chairman thanked Mr. Lyon-Caen for these words, which he should not fail to transmit to the Dutch Government and to the manager of the printing office.

Mr. Carlin proposed the following motion:

The chairman shall revise the text of the resolutions together with the rapporteurs upon the basis of the observations which have been accepted.

In order to make the text of the resolutions consistent with that of the proposals of the committee on private international law, to which many questions had been referred, the chairman and the rapporteurs shall confer with this committee, with the aim of framing a draft of a proper character to be submitted to the full conference.

The motion was carried.

The chairman closed the labors of the committee, and declared the sitting terminated at 7 p. m.

V. REPORT OF THE CENTRAL COMMITTEE, PRESENTED TO THE CONFERENCE BY MESSRS. LYON-CAEN AND SIMONS.

The central committee, having examined the responses of the five sections to the questions proposed in the Questionnaire of the Government of the Netherlands, has found that they contain a number of divergences. None, however, appear to be of a nature to render an agreement impossible nor even very difficult.

After having examined successively the responses given by the sections and having discussed each question, the central committee has adopted certain resolutions. In order to reduce them to precision the rapporteurs have thought it necessary to present them in the shape of articles. The principal arguments for these resolutions will be indicated in the present report, to which are annexed the resolutions adopted. Among these there are some which, by reason of their purpose, could not well appear in a uniform law, but it will be useful to set them forth in order that they may serve as a guide to those who may be charged with framing the text of such a law and to decide upon the terms of the international convention to be concluded.

In the explanations which follow we shall observe the order in which the resolutions proposed are arranged in the annex to the present report. It may be necessary to somewhat modify this order in the uniform law.

CHAPTER I.-OF THE CREATION AND THE FORM OF THE BILL OF EXCHANGE.

Article 1.-Phraseology of the bill of exchange.

The central committee has agreed unanimously that the bill of exchange should contain all the particulars which are derived from its character (amount to be paid, name of the purchaser, name of drawee, date of maturity, place and date of issue, place and date of payment, etc.).

It was also decided with unanimity that the bill of exchange need not indicate what value has been given, and also that it might be payable in the place of its issue. Both these requirements have now been dispensed with in most countries.

But the committee found itself divided, as the sections had been, upon the point whether a document, in order to constitute a bill of exchange, should necessarily contain a designation as a bill of exchange in the language of the country in which the document is written.

The solution, absolutely affirmative, provided by the German Wechselordnung and by the laws which are based upon it (Hungarian, Swiss, Scandinavian, and other laws), is justified by very strong considerations. By the requirement in question the attention of

signers and of the holder is drawn to the nature of the document. This may seem necessary by reason of the special and rigorous rules to which the bill of exchange is subject.

But against this system objections have been made of two sorts. It has been criticised by some for creating artificial causes for nullifying the document by refusing the character of a bill of exchange to a document which does not contain this designation, although it includes every other particular constituting a bill of exchange. It is maintained, on behalf of these critics, that it should suffice that a bill contains all the particulars which are derived from its character. This is the system in force in Great Britain and in the United States of America.

Others, without denying the advantages of the German, Hungarian, Swiss, Scandinavian, and other systems, have made the observation that it would be very difficult, if not impossible, to introduce into the countries where it is not at present required that the designation of the bill of exchange should be inserted in the document. They do not think practicable a change in usages which are very old and with which the parties interested declare themselves fully satisfied.

An intermediate system, proposed originally in the name of Switzerland, has therefore been adopted. The uniform law will require, in principle, the insertion of the designation as a bill of exchange; but it will be left to national laws to decide whether the insertion of the clause " to order" shall suffice to constitute the document a bill of exchange without the special designation if it contains the other particulars required.

Thus in all the contracting countries designation as a bill of exchange will confer on a document the character of such a bill; but in countries where the law makes use of the power reserved to them, the insertion of the clause "to order" shall be considered as equivalent. It is to be hoped that in fact in these latter countries the custom of inserting the designation as a bill of exchange will spread and that thus, little by little, this designation will be generally employed.

This solution has great advantages, but it does not satisfy those countries in which neither the designation of the bill of exchange nor the clause "to order" have been required. It has therefore been proposed to leave to the law of the country of the issue of the document to determine the form of the bill of exchange. This solution would have the advantage of taking account of all the laws now in force, but it would have the grave disadvantage, hostile to the end sought, of leaving in force existing diversities in legislation. It is this consideration which has prevented its adoption.

Article 2.-Transfer by indorsement; bills of exchange to order of the drawer, for account of a third party, or drawn upon the drawer himself.

This article contains several provisions.

(a) It provides that every letter of exchange shall be transmissible by indorsement, excepting only the cases dealt with in article 3, those in which the bill of exchange is to bearer or is declared not to be to order. In consequence, in all countries the bill of exchange will be

indorsable. It will be so everywhere by this fact alone, that the designation as a bill of exchange shall be inserted in the document and, by virtue of the clause "to order," in the countries where the law shall have decided that this is sufficient to make the document a bill of exchange.

(b) This article provides, in conformity with the laws of all countries, that the bill of exchange may be made to the order of the drawer himself and that it may be drawn for account of a third party.

The committee do not think there is occasion to enlarge upon the provisions in regard to these two forms of bills. The rules to be applied result from the general principles of law.

The article admits also the bill of exchange drawn by the drawer upon himself. This is a form of bill of exchange employed especially by banks which draw drafts upon their branches. The absolute necessity for these bills of exchange is not manifest, because the same result would be reached by drawing notes to order payable at a branch; but in some countries these bills are very numerous. As, therefore, they present no inconvenience, it is proper to recognize their existence in the uniform law.

Article 3.-Bills of exchange to bearer not transmissible by indorsement (Rektaklausel).

As has been stated above in connection with article 2, bills of exchange are in principle transmissible by indorsement. But is this a rule which is absolutely essential? The central committee did not so consider it. It proposed, by a majority, to permit the bill of exchange to bearer, transmissible in consequence from hand to hand.

Various objections have been made to this proposition. It has been pointed out that in the great majority of countries bills of exchange to bearer are not permitted; that there is no demand for them; that they are less easy to discount than bills to order; and that the creation of such bills of exchange might impair the privileges of the establishments which issue bank notes. But it has been contended that bills of exchange to bearer are permitted in Great Britain and in the United States of America; that in these countries it is not desired to renounce the power of creating them, and that those who desire to have their drafts easily discounted need not give them this form.

Only in order to recognize the exception derived from the privilege of the issue of bank notes, the uniform law will not make obligatory upon the contracting States the admission of bills of exchange to bearer. The laws of each State will be allowed to prohibit this form of bill for those which may be drawn, payable, accepted, or guaranteed within their limits.

It has been proposed to decide that the bill of exchange to bearer might be converted into an instrument to order by means of an indorsement made by a holder. This solution has been rejected. It has been considered that the original form of the document ought not to be capable of modification at the will of a person into whose hands it may have passed. In the absence of this restriction the position of the drawer and of the drawee might be modified without their consent and even without their knowledge.