Currency 6's, bearing interest at 6 %.

5's of 1881, extended, bearing interest at 3%.

44's of 1886, payable after 1886, bearing interest at 4%, in gold. 4's of 1901, payable after 1901, bearing interest at 4 %, in gold.

368. Stocks is a general term applicable to the bonds of governments, and the bonds and shares of incorporated com panies.

Stocks are at par, or at their face value, when quoted at 100; above par when quoted at more than 100; and below par when quoted at less than 100. Thus,

A stock quoted at 96, is at 96 % of its face value.

A COUPON is an interest certificate attached to a bond. BROKERAGE for buying or selling stock is reckoned on the par value of the stock, and usually at the rate of to %.

Exercises.

1. How much must be paid for $5000, U. S. 10-40's, at 110, and brokerage at %? Ans. $5512.50. 2. What amount of U. S. 5's, at 110 and brokerage, can be bought for $5512.50?

3. How many $100 U. S. 4 per cent. bonds, at 91, can be bought with $5460? Ans. 60.

4. How much is the yearly income, in currency, from $20000 in U. S. 5's, when gold is at 105? Ans. $1057.50.

5. What rate of interest will an investment in a 6 % manufacturing stock, at 80, yield? Ans. 7%.

6. At what rate must a 10% bank stock be bought, to pay 8% on the investment?

Ans. 125.

7. At what rate must a 7 % stock be bought, to pay 6 % on the investment?

8. What sum must be invested in an 8 % railroad stock, at 112, to yield a semi-annual income of $600 ? Ans. $16800.

What are Stocks? When are Stocks at par? When below par? When above par? What is a coupon? On what is the brokerage of stocka reckoned?

EXCHANGE.

369. Exchange is the method of remitting money from one place to another, by drafts, or written orders.

370. A Bill of Exchange, or Draft, is a written order directing one person to pay money to another, or to his order.

The DRAWER is the person who signs the bill, or draft; the DRAWEE is the person directed to pay the same; the PAYEE is the person to whom the money is directed to be paid; the INDORSER is the person who transfers his right to a bill, or draft, by indorsing it; and the HOLDER is the person who has legal possession of it.

371. The Indorsement of a bill, or draft, is done by the payee writing his name upon its back.

372. The Acceptance of a bill, or draft, is done by the drawee writing his name after the word "Accepted" across its face.

The drawer, acceptor, and each indorser of a bill, or draft, are liable for its payment. If the drawee declines to pay or accept a bill, or an acceptor to make payment, it is customary for the holder to employ a Notary Public to give a notice called a Protest, to the drawer and each of the indorsers, so as to hold them legally for the payment.

Three days of grace are usually allowed on bills and drafts, after the time specified has expired.

373. The Par of Exchange is the comparative value of the money of two places. Hence,

Exchange is said to be at par, when a bill sells for its face; at a premium, or above par, when for more than its face; and at a discount, or below par, when for less.

374. The Rate of Exchange is a rate per cent. of the face of a bill.

375. The Course of Exchange is the par of exchange as affected by the rate of exchange.

What is Exchange? A Bill of Exchange? How is the Indorsement of a bill done? The Acceptance? Who are liable for the payment of a bill or draft? How many days of grace are allowed? The Par of Exshange? The Rate of Exchange? The Course of Exchange?

DOMESTIC OR INLAND EXCHANGE.

376. Domestic or Inland Exchange is between drawer and drawee in the same country.

CASE I.

377. To find the cost of an inland bill or draft.

1. What is the cost of the following draft, at 1% discount?

$1000.

New York, August 1, 1866.

At sight, pay to Thomas R. Sherwood, or order, One Thousand Dollars, and place to the account of

2. What must be paid in Cleveland for a draft of $2000 on Philadelphia, at 30 days, when exchange is at 2 % premium?

OPERATION.

$1 × 1.02 $1.02, cost of $1 at sight.

=

$2000 "

$2040,
$11, bank dis. for 33 da.
$2029, cost of draft.

At 2% premium, the cost of $1 of exchange at sight will be $1.02.

If the cost of

$1 at sight is

$1.02, the cost of

$2000 will be 2000 times $1.02, or $2040; and, since the bank discount on the face of the draft, for the given rate and time is $11, the cost of the draft must be $2040-$11, or $2029.

RULE. If the bill is at sight, multiply the cost of $1 of exchange, by the number denoting the face of the bill.

What is Domestic or Inland Exchange? Repeat the Rule.

If the bill is payable after sight, reckon the bank discount of the face of the draft for the time and three days' grace, and deduct it from the product.

Examples.

3. What must be paid in Detroit, where the rate of interest is 7 %, for a draft of $500, at 60 days, on Nashville, at % discount? Ans. $491.37.

4. What must be paid at Mobile for a draft of $1940, on Providence, exchange being at 14% premium? Ans. $1964.25. 5. What is the cost of a draft of $920, for 90 days, at 8%, exchange being at a discount of %?

6. A merchant in Portland wishes to discharge a debt of $3000 in New Orleans; required the cost of a draft for that sum, for 2 months, at 6 %, exchange being at 1 % premium. Ans. $2998.50.

378. To find the face of an inland bill or draft.

1. What is the face of a draft on Cincinnati for 60 days, at 1% premium, which can be bought for $1000 ?

At 1% premium, $1 of exchange for 60 days can be bought for $.9995.

If $1 of exchange can be

bought for $.9995, as many dollars of exchange can be bought for $1000, as $.9995 are contained times in $1000, or $1000.50.

RULE. Divide the given sum by the cost of $1 of exchange.

Examples.

2. Required the face of a draft that may be purchased for $6075, exchange being at 14 % premium. Ans. $6000.

Explain the operation. Repeat the Rule of Case II.

3. I wish to remit to a merchant in Charleston, $19490; what is the face of a draft for that amount for 30 days, at 2 % discount? Ans. $20000.

FOREIGN EXCHANGE.*

379. Foreign Exchange is between drawer and drawee in different countries.

Foreign bills are usually drawn in sets, and to prevent loss or delay each bill of the set is remitted in a different manner, and when one of the set has been paid, the others become worthless.

380. The Intrinsic Par of Exchange between countries is the mint value of their coins.

381. Exchange on England is now quoted and reckoned at a certain sum of United States money to a pound sterling, which is represented by a gold coin called the sovereign.

Congress, in 1873, made the legal value of a pound sterling, or sovereign, $4.8665, and established that valuation as the par of exchange between Great Britain and the United States.

A shilling may be written as 5 tenths of a florin, or 5 hundredths of a pound, and 6 pence as 25 hundredths of a florin, or 25 thousandths of a pound. Thus,

£3 7 fl. 1 s. 6 d. may be expressed as £3.775.

382. Exchange on France is quoted and reckoned at a certain number of francs to a dollar.

French money is expressed in francs and centimes:

100 centimes 1 franc.

What is Foreign Exchange? The Intrinsic par of Exchange? What is the legal value of a pound sterling? What is the par of exchange between Great Britain and the United States? How is exchange on England usually reckoned? How is British money usually expressed?

* Optional.