12. A ship worth $120000 was insured for $48000 in one company at 3% premium, $30000 in another at % premium, and in a third for $22000 at §% premium. She was damaged to the extent of $30000 by a violent storm. How much may the owners claim from each company?

13. A stock of goods was insured for one year for $8000 at % premium. At the end of 6 mos. the policy was cancelled at the request of the insured. What was the return premium, the short rate for 6 mos. being %? If this policy had been cancelled at the request of the underwriters at the end of 6 mos., what would have been the return premium? If at the end of 9 mos., what would it have been?

14. My house was insured Sept. 1 for a year for $3000 at 65c. Mar. 1 I cancelled the policy. How much ought the company to return, their short rate for 6 mos. being 40c.? How much would they have returned if they had cancelled at that time instead of me?

15. A company took a risk of $12000 for 2 yrs. at 11% premium, and reinsured of the risk in another company at 90c. What was the company's gain by reinsurance?

16. The British Mercantile Ins. Co. took a risk of $90000 at $1.75, and, finding the risk larger than they wished to carry, reinsured in the Globe Ins. Co. at $1.375, and of the remainder in the Commercial Mutual at $1.40. What was the total gain by reinsurance?

17. A cargo of goods is valued at $3500. For what sum must the owner take out a policy to cover the value and the expenses of insurance, viz., $1.25 for the policy and % premium?

NOTE.

Add the known expenses to the value, and divide the sum by 100% the rate of premium.

18. I wish to insure a consignment valued at $6500 for such a sum that the face of the policy will cover the value of my goods: $1 for the policy, $3.50 for the survey, and 90c. per $100 premium. For what sum shall the policy be drawn?

EXCHANGE.

170. EXCHANGE is a system of paying debts due in distant places by means of written orders, called Drafts, or Bills of Exchange.

171. A DRAFT, or BILL OF EXCHANGE, is an order written. by one person (the DRAWER) requesting a second person (the DRAWEE) to pay to a third person (the PAYEE), or to the payee's order, a certain sum of money and charge the same to the account of the drawer.

172. BILLS OF EXCHANGE are classed as Domestic (or Inland) and Foreign.

173. DOMESTIC OR INLAND BILLS OF EXCHANGE are those drawn and payable at some place in the same state in which they are drawn.

NOTE.

- Domestic Bills are usually called Drafts, and include sight drafts and time drafts.

174. FOREIGN BILLS OF EXCHANGE are those payable at some place in another state or country than that in which they are drawn.

175. An ACCEPTANCE is the agreement of the drawee to pay the sum named in the draft.

176. Bills of exchange are subject to the same conditions as to transfer, indorsement, and protest as are promissory

notes.

177.

The FACE or PAR of a bill of exchange is the sum named in the bill.

NOTE 1.

When bills sell for more than their face, exchange is said to be at a premium; when they sell for less than their face, exchange is said to be at a discount.

NOTE 2. When Boston owes New York the same sum that New York owes Boston, exchange will be at par; but when Boston owes New York more than New York owes Boston, exchange on New York will be at a premium, since there will be more buyers of New York exchange than sellers; and when New York owes Boston more than Boston owes New York, exchange on New York will sell at a discount and exchange on Boston at a premium.

DOMESTIC EXCHANGE.

178. DOMESTIC EXCHANGE is that payable in the same country in which it is drawn.

NOTE 1. Sight drafts are subject to the discount or premium only of exchange; while time drafts are subject to the exchange discount or premium and to bank discount also. Exchange discounts and bank discounts on bills are always in favor of the purchaser; exchange premium is always in favor of the seller. These things are always computed on the face, ~*

NOTE 2.

The rate of premium or discount is given in some places at a certain %, as, %, %, etc.; but in other places the same things are given at so much per $1000 as $1.25, $2.50, etc., meaning $1.25, or $2.50, per $1,000. NOTE 3. The rates of domestic exchange are limited by the cost of shipping the money. Thus, a debtor will not pay greater premium than what would be the cost of shipping the money.

NOTE 4.

In purchasing time drafts due in distant places, bankers sometimes charge interest for the time required for the return of the money after the draft is paid; and when the draft is payable at a certain time after sight, allowance is also made for acceptance. That is, the unexpired time is increased by the addition of either or both of these times, and the draft is discounted for the total time thus found.

179. To find the cost or selling price of a sight draft.

RULE.

Compute the premium or discount on the face, and to the face add the premium, or from the face subtract the discount.

180. To find the cost or selling price of a time draft. RULE.- Figure discount or premium, and interest on the face of the draft given. To the face adil the premium or subtract the discount. From the result subtract the interest. Include all days allowed for acceptance, when reckoning the interest. Rates given in dollars and cents are per $1000.

EXAMPLES.

Find the value of the following time drafts:

1. $2700 drawn at 30 days, interest 6%, exchange % discount.

2. $1500 drawn at 15 days, interest 7%, exchange % discount.

3. $1260 drawn at 45 days, interest 5%, exchange % discount.

4. $975 drawn at 10 days, interest 8%, exchange % premium.

5. $2150 drawn at 60 days, interest 6%, exchange 1% premium.

6. $4200 drawn at 20 days, interest 4%, exchange % premium.

7. Find the cost of a draft drawn in Boston on St. Louis for $8400, and payable 60 days after sight, exchange being at 25c. discount, interest 6%, and 3 days being allowed for acceptance.

8. A banker in Boston discounts a draft for $10000, payable in San Francisco 30 days after sight. What would be the proceeds, exchange being at $2.50 premium and interest 6%, if 7 days are allowed for acceptance?

9. A commission merchant in New Orleans purchased for me a consignment of molasses costing $8500. His commission for buying was 3%. If exchange is at 20c. premium and interest 6%, what shall I pay for a 30-day draft in settlement?

181. To find how large a draft can be purchased with a given sum.

RULE.- Figure the premium or discount, and interest on $1.00 as the fuce. Add the premium or subtract the discount, and subtract the interest from $1.00. Using the proceeds given as the dividend, divide by the proceeds of $1.00. result is the face of the draft required.

The

EXAMPLES.

Find the face of the following bills bought for

$4788 exchange at 1% discount.

2. $3759.375 exchange at 1% premium. 3. $6583.50 exchange at $2.50 discount. 4. $3241.62 exchange at 50c. premium.

$1794.60 at 30 days, exchange at 1% premium, in. terest 6%.

6. $2457.68 at 15 days, exchange at % discount, interest 8%.

7. $2681.775 at 60 days, exchange at % premium, interest 6%.

An agent sold 40 casks of wine, each containing 36 gallons, at $1.50 per gallon, and, after deducting his commission of 3%, remitted the proceeds by a sight draft purchased at 1% premium. What was the face of the draft?

9. A commission merchant sold a consignment of whale oil at 4% commission, for $12600. His charges other than commission amounted to $250. How large a 10-day draft can he buy with the proceeds to remit to the consignor, if exchange is at 3% discount and interest 6% ?

10. An agent sold 250 cases of shoes, each case containing 2 doz. prs., at $3.25 per pr., and deducted 14% commission