Commercial loan rate

To protect holders of bills of lading, English merchant banks continued to buy the lion's share of the world's sterling documentary drafts during the remainder of the 19th century. English central banking policy was a major contributor to the development of this, the first worldwide, sterling denominated, documentary draft and bill of lading market. The Bank of England adopted a policy of encouraging " self liquidating " commercial loans . A transaction that conveyed title to readily marketable staples by endorsement of the bill of lading or warehouse receipt to the commercial, and subsequently to the central banker was encouraged.

A similar official encouragement became apparent in United States central banking policy in the middle of the 19th century. 2.3 The Merchantability of the Bill of Lading: Cleanliness and On Board Requirements From a merchant banker's standpoint, a desirable bill of lading has to be " merchantable " i.e., it has to be easily resalable.In order to be easily resalable, it must allow quick and low cost possession of readily marketable goods. Hence, whenever possible, bankers require bills of lading that contain no notations stating defective conditions in the goods or their packaging.

These are referred to as " clean " bills of lading, and are contrasted with " foul, " " unclean, " or " claused " bills, which do contain qualifying statements or notations. Furthermore, from a banker's standpoint a bill that indicates that the merchandise has been " shipped " or placed " on board " is preferable to one which merely states that it has been received for future shipment.