Bill of Credit

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Bill of Credit

1. A bill issued by a government that may be traded as money and may be redeemed by the holder for actual money on a given day.

2. A request for payment by a third party. For example, if one writes a check to a seller, the seller demands payment from the bank out of the funds it holds on behalf of the buyer. In this case, the check is a bill of credit.

References in periodicals archive ?

(173.) 4 COMYNS, infra note 344, at 239 ("A Bill of Credit is, when a Merchant sends a Letter by a Servant, or Agent to another Merchant, within the Realm, or in foreign Parts, whereby he desires him to give Credit to the Bearer for Goods or Money, to such a Value.").

(175.) HUGH VANCE, AN INQUIRY INTO THE NATURE AND USES OF MONEY, in 3 COLONIAL CURRENCY REPRINTS, infra note 344, at 365, 432 (1740) (arguing that the name "Bill of Credit" is not appropriate, because after the first emission, the bills were issued intending them to be money).

Currency that appears on its face to be pure legal tender fiat money rather than a governmental debt was sometimes labeled a "bill of credit." See, e.g., NEWMAN, infra note 344, at 239 (reproducing a 1744 Pennsylvania fiat note apparently called a "bill of credit").

at 295 (reproducing a 1780 Rhode Island bill of credit redeemable in Spanish milled dollars on Dec.