certified and then not use it,
deposit it in your bank, otherwise your account will be short the
amount for which the cheque is drawn. In Canada all cheques are
presented to the "ledger-keeper" for certification before being
presented to the paying teller.

[Illustration: A certified cheque.]

THE USEFULNESS OF BANKS

Banks are absolutely necessary to the success of modern commercial
enterprises. They provide a place for the safe-keeping of money and
securities, and they make the payment of bills much more convenient
than if currency instead of cheques were the more largely used. But
the great advantage of a banking institution to a business man is the
opportunity it affords him of borrowing money, of securing cash for
the carrying on of his business while his own capital is locked up in
merchandise or in the hands of his debtors. Another important
advantage is to be found in the facilities afforded by banks for the
collection of cheques, notes, and drafts.

VI. BANK DRAFTS

A draft is a formal demand for the payment of money. Your bank cheque
is your sight draft on your bank. It is not so stated, but it is so
understood. A cheque differs from an ordinary commercial draft, both
in its wording and in its purpose. The bank is obliged to pay your
cheque if it holds funds of yours sufficient to meet it, while the
person upon whom your draft is drawn may or may not honour it at his
pleasure. A cheque is used for paying money to a creditor, while a
draft is used as a means of collecting money from a debtor.

Nearly all large banks keep money on deposit with one or more of the
banks located in the great commercial centres. They call these
centrally located banks their _correspondents_. The larger banks have
correspondents in New York, Chicago, Boston, and other large cities.
As business men keep money on deposit with banks to meet their
cheques, so banks keep money on deposit with other banks to meet their
drafts.

A BANK DRAFT is simply the bank's cheque, drawn upon its deposit with
some other bank. Banks sell these cheques to their customers, and
merchants make large use of them in paying bills in distant cities.
These drafts, or CASHIERS' CHEQUES, as they are sometimes called, pass
as cash anywhere within a reasonable distance of the money centre upon
which they are drawn. Bankers' drafts on New York would, under
ordinary financial conditions, be considered cash anywhere in the
United States. A draft on a forei