The payee may indorse by simply writing his name on the back of the note. It is then payable to the holder or bearer. He may write, "Pay to A B-." It is then payable to A- B- only.

He may also write, "Pay to Apayable to any person to whom A

B

or order," and it is then

B

may order it paid.

There are also other forms of indorsement.

320. A note that may be sold or transferred is a Negotiable Note.

To be negotiable, a note must be payable to the order of the payee or to the bearer.

Thus, both of the foregoing notes are negotiable.

321. A note that is payable to the payee only is a NonNegotiable Note.

Thus, if the words "or order" and "or bearer" from the above notes, the notes would be non-negotiable.

were omitted

322. A note is payable at the time specified, but three days of grace are allowed in some states before the note is said to mature. It is then legally due.

Days of grace have been abolished in New York, New Jersey, Pennsylvania, Connecticut, Vermont, Missouri, Massachusetts, and several other states.

WRITTEN EXERCISES.

323. Write the following notes, dating them when and where they are written:

1. A negotiable note for $ 400, making H. H. Sours the payee and G. A. Smith the maker, interest at 5%.

2. Two negotiable notes, differing in form, for $3000, due in four months with interest, payable to H. S. Dudley. 3. Indorse the notes in the preceding exercise to transfer one to the bearer and the other to S. H. Bruce.

4. A non-negotiable note for $715.40, payable on demand, without interest, making Samuel G. Harmon the payee and J. J. Barber the drawer.

5. A note from the following data: face, $600; negotiable; maker, Robert Clark; payee, A. C. Salls; payable in six months; interest at the legal rate.

BANK DISCOUNT.

324. An institution, chartered under the law, to receive money for safe keeping, to loan money, or to issue notes or bills to circulate as money is a Bank.

325. A considerable part of the business of most banks is the paying of notes before they are due.

If the banker becomes satisfied that the note is valid, or properly secured by indorsement, he may advance the sum due less the simple interest for the time the note has yet to run.

326. The number of days from the time a note is discounted to the time when it legally matures is the Term of Discount.

327. Simple interest collected in advance upon the sum due on a note at its maturity is called Bank Discount.

Banks usually demand that notes which they discount be made payable at the bank.

328. The sum due on a note at its maturity, less the bank discount, is called the Proceeds, or Avails, of the note.

WRITTEN EXERCISES.

329. 1. Find the date of maturity, the term of discount, the bank discount, and the proceeds of a note for $500, dated July 15, 1900, for three months, without interest or days of grace, and discounted Sept. 3, 1900, at 6%.

SOLUTION.

The note matures 3 mo. after July 15, or Oct. 15.

The term of discount is from Sept. 3 to Oct. 15, 42 da.

The bank discount is the interest of $500 at 6% for 42 da., which is $3.50.

=

The proceeds $500 - $3.50 = $496.50.

NOTE. Although the time in a note may be expressed in months, the term of discount at a bank is usually reckoned by counting the actual number of days from the date of discount to the date of maturity, 360 days being regarded as a year.

2. Solve the preceding exercise when days of grace are allowed and the note bears interest at 6%.

SOLUTION.

The note matures 3 mo. 3 da. after July 15, or Oct. 18.

The term of discount is from Sept. 3 to Oct. 18, 45 da.

The sum due on the note at its maturity is $500 plus the interest on that sum for 3 mo. 3 da. at 6%, or $507.75.

Then, the bank discount is the interest of $507.75 at 6% for 45 da., which is $3.808+.

The proceeds

NOTE.

- Most notes discounted at a bank do not draw interest; but when interest-bearing notes are offered for discount, the discount is computed upon the amount of the note at its maturity.

Find the bank discount and proceeds of the following notes, no days of grace being allowed:

3. Face, $300; term of discount, 2 mo. 15 da.; rate of discount, 6%.

4. Face, $580; term of discount, 3 mo. 18 da.; rate of discount, 5%.

5. Face, $640; date, Sept. 20, 1900; time, 2 mo.; date of discount, Oct. 3, 1900; rate of discount, 4%.

6. Face, $800; date, Dec. 10, 1900; time, 3 mo.; date of discount, Jan. 21, 1901; rate of discount, 6%.

7. Face, $1000; date, Mar. 7, 1900; time, 4 mo; date of discount, Apr. 26, 1900; rate of discount, 8%; the note bears interest at 6%.

Find the bank discount and proceeds of the following notes, days of grace being allowed:

8. Face, $560; date, Apr. 24, 1899; time, 2 mo.; date of discount, May 22, 1899; rate of discount, 6%.

9. Face, $1200; date, May 14, 1898; time, 4 mo.; date of discount, July 25, 1898; rate of discount, 6%.

10. Face, $1600; date, June 17, 1900; time, 3 mo.; date of discount, July 16, 1900; rate of discount, 6%; the note bears interest at 7%.

GENERAL REVIEW.

330. 1. What will 50 sheep cost if 75 are worth $375? 2. How many years is it since the Declaration of Independence was signed?

3. A rope 13 yd. 2 ft. 6 in. long was cut into 3 equal parts. How long were they?

4. A farmer sold at one time 3 bu. 3 seed, and at another 5 bu. 2 pk. 6 qt. sell?

pk. 7 qt. of clover How much did he

5. A wagon wheel is 15 ft. 8 in. in circumference. How many revolutions will it make in going 5 miles?

6. James spent 57 cents, which was of all the money he had. How much money had he?

7. A father gave his children $8 apiece. If he had given them $12 apiece it would have taken $40 more. How many children were there?

8. The larger of two fractions is 14, and the difference between them is . What is the smaller fraction?

9. If of an acre of land produces 125 bushels of potatoes, how many bushels will 3 acres produce?

10. A can do a piece of work in 10 days, and B can do it in 8 days. In what time can both do it?

11. A man who owned of a factory sold of his share for $3500. What was the factory worth at that rate ?

12. Two boys did some work for 65 cents. If one of them earned 15 cents more than the other, how much did each earn?

13. A man who spent

found that he had $15 left.

of his money and $12 more How much had he at first?

14. A man died leaving to his 3 children a farm of 317 A. 115 sq. rd. to be divided equally among them. What was each one's share of the land?

15. How many acres of land, at $45 per acre, can I get for 90 oxen at $37.75 per head?

16. Mr. David Rounds purchased from D. Henderson & Co. 13 yd. muslin @ 8, 8 yd. sheeting @ $.111, 25 yd. ribbon @7 per yd., 10 lb. cotton batting at 81, 2 pr. gloves @$1.25, 3 doz. pearl buttons @ $.27. Make out a receipted bill.

17. How long will it take a person to count $1,000,000 if he counts $5 per second for 10 hours per day?

18. If a railroad train runs at the rate of 521 mi. per hour, how far will it run in 8 hr. 40 min. ?

19. How many feet board measure are there in 45 joists, each 18 ft. long, 16 in. wide, and 2 in. thick?

20. A farmer sold 3 T. 18 cwt. 85 lb. of hay at $9.50 per How much did he get for it?

ton.

21. A cask of wine contained 58 gal. 3 qt. 1 pt. How much was it worth at $2.75 per gallon?

22. A silversmith sold some silver plate at $1.50 per ounce, receiving for it $93. How much did he sell?

23. A merchant had 320 yd. of cloth, which he made into suits which required 6 yd. 2 ft. each. How many suits did he make?

24. What will be the expense of painting a gable roof 48 ft. long and 25 ft. wide at $.30 per sq. yd.?

25. How many yards of matting, 1 yd. wide, will be required to cover a floor 7 yd. 2 ft. 7 in. wide, and 18 ft. long? What will be the cost of it at $.70 per lineal yd.?

26. A man has a lot containing 10 acres that is 25 rods wide. How long is it?