Development of Documentary Transfer and Southeast Asian Trade
When the conditions of trade change, law regarding transfer of property must adapt. Such adaptation is written in countless judgments of exceptional common law judges over the centuries. English law of transfer developed in feudal England in the context of transfers of land, immovables or chattels. As England became mercantile, the common law came under pressure to adopt some of the dynamic trade practices developed by merchants and financiers. One such method, striking at the time and routine now, was documentary transfer.
Documentary transfer is the transfer of property via a ‘negotiable instrument’, i.e. a document that gives the bearer rights to property regardless of how that document was obtained. Initially this system met with stiff resistance with common law judges. The idea of being able to give good title to gold held in a bank vault, or selling goods aboard a ship in Bombay to someone in Liverpool, just by selling a piece of paper that promises the bearer the property would still raise eyebrows when the buyer shows up at the bank or the ship demanding their property holding nothing but a note with a promise on it, were it not for centuries of acclimatisation through every-day commercial practice.
This project attempts to discover the course of our history when it comes to the adoption and adaptation of this system in Southeast Asian trade. Merchants in London, Manchester and Liverpool in England, and in Hong Kong and Singapore in Southeast Asia used the law of documentary transfer to solve the dilemma of either having to trust a commercial agent halfway across the world, or not to engage in transnational trade at all. With documentary transfer, trust was placed on a reliable third party – a carrier, a banker or a court. This enabled European trade to penetrate China and Southeast Asia and in turn played its part in European colonial history.