148                           BILLS OF EXCHANGE.

BILLS OF EXCHANGE.
A Bill of Exchange is an order addressed.to
some person at a distance, directing him to pay
a certain amount to the person in whose favor
the bill is drawn, or to his order. A merchant
in Chicago, owing a sum of money for goods to
a merchant in London, instead of remitting
money or goods to the amount of the debt, goes
into the bank and buys from the banker, who
keeps an account in London, a bill of exchange
for the amount, and sends it to his creditor; in
this way the creditor gets payment from a person
in his own city, generally a banker, who keeps
an account with some American banker for the
purpose of paying such drafts.
Letters of Credit have come largely into use,
of late years, with tourists abroad, though Bills
of Exchange are yet frequently used by per-
sons who wish to travel in foreign countries.
Thus, if A, an American, wishes to travel
over Europe, he estimates the expense of the
journey, and finds it to be, perhaps $3,000. To
carry this with him, in gold, would be unsafe
and troublesome. He, therefore, goes to a ban-
ker and gets a bill of exchange for a thousand

dollars, which is the amount he thinks he may
require while in England. The banker also
having money deposited in Paris, perhaps, and
also in Vienna, he takes a bill for a thousand
on a bank in each of those places. With these
'bills in his possession, he commences his journey,
with only money in his pocket sufficient to pay
the incidental expenses of the trip, and draws
on the London, Paris, and Vienna bankers as
occasion requires. The object of this arrange-
ment is to secure travelers against loss, the
bankers affording this accommodation to mer-
chants and travelers for a percentage, which is
paid them when they sell the bill of exchange.
In issuing these bills of exchange, it is cus-
tomary for the banker to issue a set of two or
three, worded nearly alike. One of these is
kept by the purchaser, to be presented by him
to the foreign banker, the other two are trans-
mitted by mail, at different times, to the same
bank. Thus, if the first bill is lost, the second
or third, that go by mail, will still be available,
and the holder can obtain the money without
being subjected to the delay of writing to
America for another bill. These bills are
worded as follows:

Set of Foreign Bills of Exchange.

3                Chicagw, .7uly- xo, x8-.
E xchange  for   d  8 a t
:L2    ty da     r sf%*4gi of this
Our THIRD OF EXCHANGE (tr t an second
o the same tenor and date npatd), vow to
tn uordero Abet Vu¢mtminge, Two Hundred
Pounds  Wtrn, valuerecetved, and charge
the sante, without further advice, to
Henry Greenebaum &     Co.
To the Union Bank of London,
No. 840.          London, Lng.

DRAFTS.
A daft may properly be called an inland bill
of e change. It is customary for the bankers
in all large cities, to make deposits with bankers
in other large cities, and also for the banks in
the interior towns to make deposits with some
one bank in the nearest metropolis. Thus, the
bankers of Milwaukee, Chicago, and St. Louis,
have deposits in New York, so that any person
wishing to pay a certain sum of money to another
person, East, has only to step into a bank and

purchase a draft for the amount on New York,
which he sends by mail to the creditor, who
can usually get the amount the draft calls for,
at the nearest bank.
The banker, as with bills of exchange, cnharges
a certain commission to pay him for his trouble,
which is termed "Exchange." There being less
liability to lose these inland bills, only one is
usually issued. The merchant in the interior
town, or other person, wishing to send money to
Milwaukee, St. Louis, Cincinnati, or any other

Exchange for    Chicago, IlL,     xo,8-.
;60.SJXk1s days after gt
Of this our FIRST OF 9XCHANGE (sen
and third of the same tenor and dat un-
V,aid)hanto the order of Abel Cumm ings,
O     ndred Pound* ktertng, value re-
cetet, and charge the same to
Vno the or'   onon
No.840 .          Lno,B

Exhng    c      Ckicapo, Yuly rc,  xg--.
Exohange ftr I
;E2OO. fSiZxty days after Viht, afthus
0UT SO0ND OFK XHANGE JtrS and third
Iof the same tenor and date unpaid pay to
the order of Abet CuningS, T' o Hundred
Pou1ds Sterl, valuer       and charge
the same wthout further advice, to
Henry Greenehaun &    Co.
To the Union Bank of London,
No. 840.          London, Eng.

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