A more thorough explanation:

Definition: The first of exchange is an old term used to describe the first in a series of drafts or bills of exchange. These drafts are usually drawn in duplicate or triplicate for safety in their delivery. The intention is that the acceptance and payment of any one of them, usually the first to arrive, cancels the others in the set.

Example: A company in the United States wants to purchase goods from a company in Europe. The European company sends three bills of exchange to the American company, each with the same amount due. The first of exchange is sent by air mail and arrives at the American company's office first. The American company accepts and pays the first of exchange, which cancels the other two bills of exchange.

This example illustrates how the first of exchange works in practice. By sending multiple bills of exchange, the European company ensures that at least one will arrive safely and be accepted and paid by the American company. The first of exchange is the one that arrives first and is therefore the one that is accepted and paid, canceling the other bills of exchange.