EXAMPLE III.-A 6-months' bill for £820 was drawn on the 13th of July, and discounted at 24 per cent. on the 23rd of August: find the commercial, and also the true, discount. The six months having expired on the 13th of January, the bill was legally due on the 16th of January; when discounted, therefore, (on the 23rd of August,) the bill had is 73000 days Aug., 8 Sept., 30 Oct., 31 Nov., 30 Dec., 31 Jan., 16 146 lating the true discount, we proceed as follows :— Interest of £100 for 146 days, at 2 per cent.= £100 X 146 X 5. 73000 =£1; amount of £100 for the same time, and at the same rate=101. a= £ £ Then— IOI : 100 :: 820: a 01 =(820 × 100÷101=) £811 178.7 d., the true presentworth; and £820-£811 178. 71d.=£8 28. 452d., the true discount. When a bill arrives at maturity, the holder—that is, the person in whose possession it happens to be at the timeapplies to the acceptor, as a matter of course, for payment. In the event of his failing to obtain the amount, the holder at once takes the bill to a Notary Public,* * The services of a Notary Public can be-and occasionally aredispensed with when the holder is himself prepared to prove that the bill was presented for payment at the proper time and place; but such proof is never required in the case of a bill which has passed through the hands of a Notary, whose noting is always accepted, in a court of law, as conclusive evidence on the point. by whom payment is again demanded on the same day, and who, if unsuccessful in his mission, protests the bill, by writing across the face of it "Protested for . non-payment.' A written notification of the acceptor's default is next forwarded, without delay, to each of the indorsers, all of whom (the drawer included) are then bound-"jointly and severally"-to indemnify the holder. It is worthy of remark, however, that the indorsers would be released from all liability if the holder, in advising them of the non-payment of the money, allowed any avoidable delay to occur― -if, for instance, he wrote by a certain post, when he could have written by the preceding post. The indorsers would also be released from liability if the holder neglected to apply to the acceptor for payment on the very day on which the bill arrived at maturity. But such negligence on the holder's part would be no bar to subsequent proceedings against the acceptor. When obliged to proceed against the indorsers for the recovery of the amount, (the acceptor having been found unable to pay,) the holder of a protested or "dishonoured" bill naturally selects, in the first instance, the person whom he considers most solvent. Should the full amount be obtained from this indorser, all the earlier indorsers would then be bound to indemnify him; but the later indorsers would be released from their liability.* * Such bills as we have hitherto been considering are called INLAND bills, in contradistinction to another class, known as FOREIGN bills. By a "foreign" bill is meant a bill drawn in one country, and accepted in another; the drawer, for instance, residing in London, and the acceptor in Paris; or the drawer residing in New York, and the acceptor in Dublin. A foreign bill is always made payable to a third person-called the PAYEE-residing in the same country as the acceptor. Thus, when (in the language of mercantile people) Smyth of New York draws upon Taylor of Dublin in favour of Robinson-also of Dublin, Smyth is the "drawer;" Taylor, the "acceptor;" and Robinson, the "payee." On account of the uncertainty and risk incidental to their transmission, foreign bills are usually drawn in sets of three each-the parts of a set being marked 1st, 2nd, 3rd, respectively, and forwarded by different ships. The part which first reaches its destination then becomes the bill, and is payable a certain number of days "after sight"—that is, after presentation to, and acceptance by, the acceptor. (See EXCHANGE.) Promissory Notes.-A written promise to pay money on a future day is sometimes in the form of a promissory note, which runs thus : [Stamp.] £500 0 0 Patrick-street, Cork, 21st April, 1872. Three months after date, I promise to pay Mr. James Browne or order the sum of five hundred pounds sterling— for value received. John Jones. Jones (the debtor) would be called the MAKER of this promissory note, which would be quite as valuable to Browne as the bill of exchange referred to at page 251. In fact, the word "drawer" being omitted, and "maker" substituted for " acceptor," all that has been said about a bill of exchange is equally applicable to a promissory note-the two documents differing only in form. Every bank-note is a "promissory" note note-payable on demand," and therefore not entitled to "days of grace." 66 187. Formerly, when more money was required for Imperial purposes than could, at the time, be raised in taxes, the necessary sum was borrowed, at a certain rate of interest, upon the security of the State. All the outstanding loans thus obtained, from time to time, constitute what is called the NATIONAL DEBT. Notwithstanding the largeness of this amount,-occasioned chiefly by the wars with France and America,— there was no National Debt, properly so called, until the reign of William III. Previously to that time, loans for short periods used occasionally to be raised by the Sovereign, upon the security of the Crown revenues-the earliest such loan on record being one raised by Richard I. to defray the expenses of his Crusade to the Holy Land; but no debt of a NATIONAL character had been contracted until the year 1694, when Parliament borrowed the capital of the Bank of England, £1,200,000, at 8 per cent., on the understanding that, so long as the interest continued to be regularly paid, the State should be bound to no particular time for repayment of the principal. * The National Debt had increased to (in round numbers) £52,000,000 at the Peace of Utrecht, in 1713; to £79,000,000 at the Peace of Aix La Chapelle, in 1748; to £133,000,000 at the Peace of Paris, in 1763; to £249,000,000 at the close of the American War, in 1783; and to £770,000,000 at the close of the Great War, which lasted from 1793 till 1815. The Debt subsequently increased to upwards of £800,000,000-the largest increment being a sum of £20,000,000, borrowed in 1835-6, and paid to the planters in the West Indies, as compensation for their losses consequent upon the abolition of Slavery. The exact amount of the Debt is now (October, 1882) £763,045,040. 188. A person to whom the State owes any portion of the National Debt is said to be the holder * The capital of the Bank has since increased very considerablyGovernment holding at present some £11,000,000 of it. of GOVERNMENT STOCK, or to have money in "The Funds." Such a person receives interest at the rate of 5, 31, 3, or 2 per cent.—according to the kind of stock he holds. The fact that there are different kinds of stock, bearing interest at different rates, is quite intelligible when we remember that the National Debt was not all contracted at the same time, and that the State was obliged-as private borrowers are obliged-to offer a higher rate of interest at one time than at another. Occasionally, too,— when the state of the money-market renders the scheme feasible, a quantity of "old" is converted into " stock, and the rate of interest lowered; the holders of the old stock receiving due notice of the contemplated conversion, and the amount of his claim being paid, in cash, to anybody dissatisfied with the terms offered by Government.* new At the present day, every 20 shillings raised in taxes are spent in this way : Expenses of Army, Navy, &c., Interest of National Debt, S. d. 7 9 4 2 8 I So that we shall be very near the truth in saying that two-fifths of the amount realised by taxation-i.e., £2 out of every £5-go in payment of the interest of the National Debt. 189. Stock can, at any time, be converted into ready-money-the holders being at liberty to transfer their claims to others, and there being always a number of persons anxious to purchase such claims. * Here is a parallel case: C lends D £1,000, at 5 per cent., on the understanding that the principal can be returned whenever D pleases. After some time, money becomes more plentiful, and is to be had at 4 per cent. D, therefore, naturally gives notice that, from a certain day, he will pay only 4 per cent.; and C is obliged either to accept the lower rate or to take up the principal-D, in the latter case, borrowing (if necessary) £1,000 from somebody else, at 4 per cent., in order to pay C. K |