gn bank is usually called a BILL OF
EXCHANGE.

[Illustration: A cheque for the purchase of a draft.]

Cheques have come to be quite generally used for the payment of bills
even at long distances. If a business man desires to close an
important contract requiring cash in advance he sends a bank draft, if
at a distance, or a certified cheque, if in the same city. If he
desires simply to pay a debt he sends his own personal cheque. Bank
drafts are quite generally used by merchants in the West to pay bills
in the East. A draft on New York bought in San Francisco is cash when
it reaches New York, while a San Francisco cheque is not cash until it
returns and is cashed by the bank upon which it is drawn. In the
ordinary course of business cheques are considered cash no matter upon
what bank drawn. The bank receiving them on deposit gives the
depositor credit at once, even though it may take a week before the
value represented by the cheque is in the possession of the bank.

[Illustration: A bank draft.]

All wholesale transactions and a large proportion of retail
transactions are completed by the passing of instruments of
credit--notes, cheques, drafts, etc.; a part only of the retail trade
is conducted by actual currency-bills and "change." Banks handle the
bulk of these transferable titles and deal to a very small
extent--that is, proportionally--in actual money. The notes, drafts,
bills of exchange, and bank cheques are representative of the property
passing by title in money from the producers to the consumers. A small
proportion--perhaps six or eight per cent.--of these transactions is
conducted by the use of actual bank or legal-tender notes. This trade
in instruments of credit amounts in the United States to fifty
billions of dollars yearly.

VII. PROMISSORY NOTES

[Illustration: Ordinary form of promissory note.]

A PROMISSORY NOTE is a written promise to pay a specified sum of
money. At the time of the note's issue--that is, when signed and
delivered--two parties are connected with it, the _maker_ and the
_payee_. The maker is the person who signs or promises to pay the
note; the payee is the person to whom or to whose order the note is
made payable. NEGOTIABLE in a commercial sense means _transferable_,
and a negotiable note is a note which can be transferred from one
person to another. A note to be made negotiable must contain the word
_bearer_ or the word _order_--that is, it must be payable either _to