signed the note with you. Date the note December 1 of the current year, make it payable at your nearest bank with interest at 5 %, and find what this note is worth at maturity. (Reckon interest for 9 mo.)

8. June 1 of the current year W. H. Jones accommodates you by becoming your security on a 60-day note to enable you to borrow $50 from your nearest bank; write the note.

9.

CLEVELAND, O., April 3, 1912.

Ninety days after date I promise to pay to the order of William F. Davis at

The First National Bank of Cleveland

Two hundred twenty

Dollars

Value received, with interest at 41%.

L. J. DRIGGS.

Name the parties to the above note.

When is it due? How much is due at maturity? Who pays the note when due? Who receives the note when paid?

IO. How much interest is due at maturity on a note for $500 dated Indianapolis, Ind., June 2, of the current year, and payable in 6 months with interest at the legal rate? (Reckon interest for 6 mo.)

II. When is a note due that is dated December 31, 1915, payable in 2 months?

DRAFTS

328. A draft, or bill of exchange, is a written order whereby one party directs another to pay a specified sum of money to the order of a certain party at a certain time.

$5000

Sight Draft

Lansing, Mick, Mays, 1913.
At sight Pay to

the order of B. Cochran

Value recoved and charge the same to account of

Fifty

To L. R. Ambler

No. 24

Detroit, Mich

Dollars

John Clark

329. The drawer of a draft is the party who signs it and thereby orders its payment. The drawee is the party who is ordered to pay. The payee is the party to whom it is made payable. The face is the amount named in the draft.

Thus, in the above draft, John Clark is the drawer, L. R. Ambler the drawee, and C. B. Cochran the payee. Fifty dollars is the face.

330. A sight draft is a draft that is payable whenever presented to the drawee for payment.

331. The purpose of the sight draft in Section 328 may be explained thus: John Clark, desiring to pay C. B. Cochran fifty dollars, orders L. R. Ambler, who owes him at least that amount, to pay the

same to C. B. Cochran, or his order, at sight, and sends the draft to C. B. Cochran, who may collect it from L. R. Ambler.

332. A time draft is a draft payable at a certain time after sight or after date.

333. All time drafts must be presented to the drawee for acceptance.

334. To accept a draft, the drawee writes across the face the word "accepted" or "seen," together with the date of acceptance and his name, unless the draft is payable "after date," in which case the date of acceptance may be omitted.

A time draft made payable a certain number of days after sight becomes due that number of days after acceptance; but when made payable at a certain time after date, it becomes due at the expiration of that time after date.

335. The purpose of the draft in Section 332 may be explained thus: E. L. Hastings desires to pay A. D. Sharples $75. He orders S. B. Graham, who owes him at least that sum, to pay the same to the order of A. D. Sharples, to whom the draft is sent. A. D.

Sharples presents it to S. B. Graham, who accepts it, as shown in the draft.

336. A draft, used merely for the purpose of collecting a debt, is sometimes called a two-party draft.

337. The purpose of this two-party draft may be explained thus: P. J. Henderson wishes to collect a debt of $60 from William Alexander of Columbus, O. He makes himself the payee, then indorses the draft, and deposits it in a Cincinnati bank for collection. The Cincinnati bank forwards it to a bank in Columbus, and this bank collects it from William Alexander.

NOTE 1. P. J. Henderson might also collect the above sum by making the bank in which he is a depositor the payee.

NOTE 2. Two-party drafts may also be time drafts.

Bank Draft

338. A bank draft is a draft drawn by one bank upon another in which it has deposits. It is used mainly to transmit money from one place to another.

339. The purpose of the draft in Section 338 may be explained thus: N. C. Cameron of West Chester, Penn., desiring to send $5 to C. E. Karlson of Cleveland, O., purchases the draft of the First National Bank of West Chester, Penn., indorses it "pay to the order of C. E. Karlson, N. C. Cameron" and sends it to C. E. Karlson, who then indorses it and presents it for payment to a bank in Cleveland, which bank cashes it and collects it from the Fourth National Bank of New York City.

Exercise 85

1. In the sight draft, page 246, who directs that payment to be made? Who is ordered to pay? When is the draft due? Who is expected to pay it when due?

2. In the time draft, page 247, name the drawer; the drawee; the payee. When is the draft due? Who pays it when due? Who receives it when paid?

3. Write a sight draft for $ 5, making yourself drawer, E. W. Hayes drawee, and William Brown payee; date the draft July 15 of the current year.