[a. OF. arbitracion, -tion, ad. L. arbitrātiōn-em, n. of action f. arbitrāt-: see ARBITRATE and -TION.]
† 1. A deciding according to one’s will or pleasure; uncontrolled or absolute decision. Obs.
c. 1386. Chaucer, Melib., ¶ 787. That a man … putte hym al outrely in the arbitracion and Iuggement … of hise enemys.
c. 1400. Apol. Loll., 63. He demiþ after þe lawe, & doþ no þing aftur his oune arbitracoun.
1651. Hobbes, Govt. & Soc., VII. § 4. 113. The arbitration of War, and Peace.
2. The settlement of a dispute or question at issue by one to whom the conflicting parties agree to refer their claims in order to obtain an equitable decision.
1634. Brereton, Trav. (1844), 8. To mediate in a friendly manner in a way of arbitration.
a. 1716. Blackall, Wks., 1723. I. 109. To put their Differences to the Arbitration of some of their Brethren.
1840. Macaulay, Clive, 45. To submit the points in dispute to the arbitration of Meer Jaffier.
b. attrib., as in arbitration bond, rate, etc.
1768. Blackstone, Comm., III. i. Arbitration-bond … a bond entered into by two or more parties to abide by the decision of an arbitrator.
1878. F. Williams, Midl. Rail., 212. Running powers over the line at arbitration rates.
3. Arbitration of Exchange (cf. F. arbitrage in same sense): The determination of the rate of exchange to be obtained between two countries or currencies, when the operation is conducted through a third or several intermediate ones, in order to ascertain the most advantageous method of drawing or remitting bills.
1811. P. Kelly, Univ. Cambist (1821), II. 108. In the foregoing questions, the profit or loss is ascertained on an operation already completed: but in arbitration it is ascertained beforehand, and the different results are compared in order to determine the most advantageous mode of proceeding.
1844. Pract. Arith. (Sc. Schoolbk. Assoc.). Arbitration of Exchange is, when the rates of exchange between three or more places are given, to find a proportionate rate between the first and last.
1852. McCulloch, Dict. Comm., 581. In compound arbitration, or when more than 3 places are concerned.
1866. Crump, Banking, vii. 146. A circuitous mode of payment … called the ‘arbitration of exchanges.’
