Series 1 > Records of a Scottish cloth manufactory at New Mills, Haddingtonshire, 1681-1703

INTRODUCTION
XXV
ent coins, or, in other words, the relative value at which two
given coins, both unworn, would exchange. In many cases,
however, where purchases had been made, payment was ad¬
justed by means of bills of exchange, when the settlement was
effected under the conditions of the rate of exchange ruling
at the time. It has been shown by Thorold Rogers how
much England suffered by the high rate of exchange that had
to be paid on remittances abroad during the early years of the
reign of William in.,1 and there are occasional references to the
onerous rates Scotland had also to pay even at a later period.
Hitherto, however, it has not been possible to estimate the
extent of the burden quantitatively, but the discovery of the
second part of the New Mills’ minutes should provide material
for making the necessary calculations. It is perhaps scarcely
safe to endeavour to reconstruct the mechanism of so intricate
a department of business as the foreign exchange, but in view
of the importance of the subject the attempt is worth making,
always subject to the proviso that the information is obtained
from a single source, and is therefore subject to correction
should further data come to light.
As the subject, at this early period, is very complex, I
venture to assume on the part of the reader a general
acquaintance with the principles of foreign exchange. But
in the early eighteenth century there was no direct cancella¬
tion of indebtedness by means of bills of exchange between
Scotland and, say, Holland. The Scottish merchant had to
calculate the rate from Edinburgh to London and from
London to Amsterdam, the total rate being a compound of
the two; and to make a reliable calculation it is necessary
to arrive at these three rates so as to check one by the
other.
There is a passage in the minutes (though one of con-
1 The First Nine Years of the Bank of England, pp. 37-39