noun
Definition 1
Variously referred to as "bill", "trade bill" or "bill of exchange", it is a three-party executable instrument in which the first party (drawer) draws an order for the payment of a sum certain on a second party (drawee, normally the drawer's bank) for payment to a third party (payee) at a definite future time.
Source: Invertext, from Fitzroy Dearbon Encyclopedia of Banking and Finance
Context: The bill of exchange originated as a method of settling accounts in international trade. Arab merchants used a similar instrument as early as the 8th century A.D., and the bill in its present form attained wide use during the 13th century among the Lombards of northern Italy.
Source: New Encyclopaedia Britannica, 15th edition (entry: exchange, bill of)
Note
The progress in encrypted telecommunications over the last half century has severely curtailed the use of bills of exchange, although smaller exporters, with little credit to their name, still use them extensively. This extract from a letter of Mr John Grout to the Financial Times, published on 09/10/2008, confirms the trend: "Little used today in corporate funding, bankers' acceptances, bills relating to current trade, and banks' purchase of trade bills drawn and accepted by companies used to be important."
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