9. If two persons jointly and severally give their note (see No. 3), it may be collected of either of them.

10. The words, "For value received," should be expressed in every

note.

11. When a note is given, payable on a fixed day, and in a specific article, as in wheat or rye, payment must be offered at the specified time; and if it is not, the holder can demand the value in money.

12. DAYS OF GRACE are days allowed for the payment of a note after the expiration of the time named on its face. By mercantile usage, a note does not legally fall due until 3 days after the expiration of the time named on its face, unless the note specifies "without grace." For example, No. 2 would be due on the 4th of November, and the three additional days are called days of grace.

When the last day of grace happens to be a Sunday, or a holiday, such as New Year's day, or the 4th of July, the note must be paid the day before; that is, on the second day of grace.

13. There are two kinds of notes discounted at banks: 1st. Notes given by one individual to another for property actually sold; these are called business notes, or business paper. 2d. Notes made for the purpose of borrowing money, which are called accommodation notes, or accommodation paper. The first class of paper is much preferred by the banks, as more likely to be paid when it falls due, or, in mercantile phrase, “when it comes to maturity."

BANK DISCOUNT.

289. BANK DISCOUNT is the deduction made by a bank from the face of a note due at a future time.

Bank discount, by custom, is the interest of the face of the note, calculated from the time when it is discounted to the time when it falls due; in which time three days of grace are always included (see remark 12). The interest on notes discounted at bank is always paid in advance.

THE PROCEEDS of a note is the difference between its face and the discount.

289. What is bank discount? How is interest calculated? When is it paid? What are the proceeds of a note?

290. To find the bank discount.

Rule.—Add 3 days to the time which the note has to run, and then calculate the interest for that time at the given rate.

Examples.

1. What is the bank discount on a note of $300, for 4 months, at 6 per cent. per annum.

2. What is the bank discount on a note of $200, payable in five months, at 9 per cent.?

3. What is the bank discount and proceeds of a note of $500, at 6 per cent., payable in 8 months?

4. What is the cash value of a note, payable at bank, of $1255.38, and due in 4 months, at 7 per cent. ?

5. What was the bank discount on a note of $500, due August 13th, 1855, and discounted July 1st, 1855, reckoning interest at 7 per cent.?

6. I bought 4368 bushels of wheat, at $1.25 a bushel, and sold it the same day for $1.30 a bushel on a note of 4 months. If I get this note discounted, at bank, at 7 per cent., what do I gain or lose?

7. What is the difference between the true and bank discount, of $7000, payable in 7 months, at 6 per cent.?

8. What is the difference between the true and bank discount, of $10000, payable in 4 months, at 8 per cent.?

9. January 1st, 1855, a note was given for $1000, at 5 per cent., to be paid May 1st, next following: what was its cash value at bank?

10. A holds a note against B for $1500, to run 6 months from Aug. 1st, without interest. Oct. 1st, he wishes to pay a debt at the bank of $1000, and turns in the note at a discount of 5 per cent. in payment: how much should he receive back from the bank?

290. How do you find the bank discount?

291. To draw a note due at a future time, whose proceeds shall be a given amount.

1. For what sum must a note be drawn at 4 months and 12 days, so that, when discounted at bank, at 6 per cent., the proceeds shall be $400.

ANALYSIS.-The face of the note must be such, that the interest for the given time, subtracted from the face, shall leave the required proceeds. Hence, the proceeds correspond to the difference; the rate of interest of $1 for the given time, to the rate; and the face of the note to the base (Art. 267).

Rule.-Divide the given proceeds by 1 minus the rate of $1 for the given time, and the quotient will be the face of the

2. For what sum must a note be drawn at 7 per cent., payable in 6 months, so that when discounted at a bank it shall produce $285.95.

3. How large a note must I make at a bank, at 6 per cent., payable in 6 months and 9 days, to produce $674.89?

4. For what sum must a note be drawn, at 5 per cent., payable in 9 months and 15 days after date, so that when discounted at bank, it shall produce $1000.

5. Marsh, Dean & Co. purchase of John Jones 380 barrels of flour, at $9.12 a barrel, for which they give him a note at 90 days, for such sum, that if discounted at 6 per cent., he shall receive the above price for his flour: what was the face of the note?

291. How do you draw a note whose proceeds shall be a given amount?

STOCKS.

292. CAPITAL or STOCK is the amount of money paid in to carry on the business of a corporation.

STOCKHOLDERS are the owners of the stock.

CERTIFICATES are the written evidences of ownership.

293. UNITED STATES or STATE STOCKS are the bonds of the United States, or of a State, bearing a fixed interest.

A COUPON is a due-bill for interest, attached to bonds or certificates of stock, and payable at specified times.

294. PAR VALUE of stock is the number of dollars named in each share, generally 100; sometimes 50, and sometimes 25.

MARKET VALUE of a stock, is what it brings per share, when sold for cash.

295. PREMIUM is the rate per cent. which a stock sells for above its par value.

DISCOUNT is the rate per cent. which a stock sells for below its par value.

296. DIVIDEND is a profit divided among the stockholders, and is generally estimated at a certain rate per cent. on the par value of the stock.

297. BROKERAGE is a commission made to an agent for buying and selling stock, uncurrent money, or bills of exchange.

NOTES.-1. The brokerage in the city of New York is generally one-fourth of one per cent. on the par value.

2. In questions of stocks, the par value is always the base.

3. In the examples, the shares are $100 each, unless another amount is named.

298. To find the dividend on a given amount of stock.

1. What is the percentage on 25 shares, $100 each, of Kings County Insurance Company, the dividend being 25 per cent.?

ANALYSIS.-Here, the base and rate are given to find the percentage (Art. 259).

2. The Atlantic Fire Insurance Co. declares a semi-annual dividend of 41% on the capital stock: what is the annual dividend of 43 shares at that rate?

3. The Atlantic Bank of Brooklyn has declared a semiannual dividend of 5%: what is the dividend on 18 shares?

4. A bankrupt is indebted to A, $5416, and to B, $6795: what does each receive, when the dividend to the creditors is 471 per cent.?

5. A mining company, shares $25 each, declared a dividend of 17% : what was the dividend on 36 shares?

299. To find the value of stock which is above or below par.

1. What is the value of $5600 of stock, reckoned at par, when the stock is at a premium of 9 per cent.?

ANALYSIS.-In this class of examples, the base and rate are given. When the stock is above par, the amount is required (Art. 265); when it is below par, the difference (Art. 266).

2. What is the cost of 56 shares of New York Central Railroad stock, at 5 per cent. below par, and the brokerage per cent.?

3. I bought 36 shares in the Pennsylvania Coal Company, at a discount of 12 per cent., and sold them at a premium of 7 per cent., paying per cent. brokerage in each case: how much did I make by the operation?

4. What is the market value of 216 shares of bank-stock, each share $75, and the premium 7% ?

292. What is capital or stock? Who are stockholders? What are certificates?-293. What are United States stocks? What is a coupon?-294. What is the par value of a stock? What is market value?-295. What is premium? What is discount?-296. What is dividend?-297. What is brokerage? What is the general rate in the city of New York? What is the base, in stocks?-298. How do you find the dividend on stock?-299. How do you find the value of stock when it is above or below par?