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For the purpose of negotiation, bills are mostly drawn payable to a third party or to his order as follows:

Example of a Bill of Exchange Payable to a Third Party or to his Order.

£100 Os. Od.

LIVERPOOL, 1st January, 1901.

Six months after date pay to Samuel Johnson or order One Hundred Pounds, value received.

To Mr. JAMES REED,

Leadenhall St., London.

FRANK JONES.

Here the bill is payable to Johnson, or to his order by endorsement—that is, he may order the bill to be paid to another party by endorsing the name of the party to whom he wishes the payment to be made, and the Endorsee thus named may in turn endorse the bill over to another person, thus passing on the bill from hand to hand in payment of a debt until the bill is due, when the last holder will present it to James Reed for payment.

To avoid the risk of loss in transmission, bills are usually drawn in sets of three, all of the same wording, except that they are specified as First, Second, or Third; and when one of these is paid, the others are of no use or effect whatever. It is a common practice among merchants to send one of these three "Vias," as they are sometimes called, usually the First unendorsed to their correspondents in the city on which the bill is drawn, to get it accepted, keeping the others for negotiation, and when the bills are sold a merchant will put an indication on them to the effect that the accepted via is

in the hands of his correspondents, naming them by writing across the face of the bill:

"First accepted with Messrs. HALL & SONS" (the name of his correspondent).

His correspondent, having got the bill accepted, will keep it, and deliver it up to the party presenting one of the endorsed vias. By this means the risk of sending accepted bills backwards and forwards by post is avoided.

It very often happens that only one bill is drawn, called a Sola bill, or, when a set is drawn and the others are not to hand, the single via is sent forward for acceptance in the usual way, and a copy of it made and negotiated. In such cases the party to whom the bill is sent to get accepted will hand it over to the presenter of the endorsed copy.

A clerk, in copying a bill, should do so very exactly, and should write the word copy legibly on the face of his copy. If there are any endorsements, he must copy them on the back of his copy, and having done so, he should write thereon directly after the last endorsement, "Thus for copy," so that all the writing above these words shall be taken as a true copy of the original. Even if there are any mistakes in the true spelling of a word he should copy the original exactly.

CHAPTER XII.

FOREIGN BILLS OF EXCHANGE.

Foreign bills of exchange are those drawn in one country, but made payable in another.

Example of a Foreign Bill of Exchange drawn Abroad.

First.

SEVILLE, 1st January, 1901.

£500

At sixty days after date of this First of Exchange (Second and Third of the same tenor and date not being paid), Pay to the order of Messrs. Gil Perez & Co. the sum of Five hundred pounds sterling, and charge the same to account as advised by

To Messrs. SMITH & DAWSON,

London.

OLANDO & CO.

Here Messrs. Olando & Co. are the Drawers, Messrs. Smith & Dawson the Drawees, and Messrs. Gil Perez & Co. the Payees.

Now the Payees can transfer their right to the money to another party by endorsement, and if Gil Perez & Co. wished to transfer the money to A. Jones & Co. they would endorse the bill:

Pay to the order of
A. Jones & Co.
GIL PEREZ & CO.

Here Gil Perez & Co. become the Endorsers, the

writing itself is called the Endorsement, and A. Jones & Co. are the Endorsees.

If A. Jones & Co. kept the bill they would become the Holders, and when the bill became due, the Payees; but before they could get payment for the bill it would require their endorsement under Gil Perez & Co. as follows:

Pay to the order of
A. Jones & Co.
GIL PEREZ & CO.

A. JONES & CO.

But A. Jones & Co. might endorse it to James Brown

as follows, when A. Jones & Co. would become the Endorsers, and James Brown the Endorsee :

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and so on ad infinitem, the last Endorsee being the Payee, and therefore the person entitled to receive the money as soon as the bill became due.

AN ALLONGE.

Should a bill not be large enough to carry all the endorsements which may be wanted to be made, a piece of paper, called an Allonge, can be pasted on to it, and the further endorsements written thereon. Any important alteration will invalidate a bill, so that if a mistake is made in the amount, date, or time of payment, it must not be amended, but the bill must be drawn afresh.

Foreign bills are drawn payable on Demand, at Sight, and so many days or months After Sight or After Date. Immediate advice of bills drawn should be sent by the drawer to the drawee, so that the latter may be prepared to meet them.

A SET OF BILLS OF EXCHANGE.

The three copies of a bill forming a set would appear as follows:

:

Example of a Set of Foreign Bills of Exchange.

1.

First.

SEVILLE, 1st January, 1901.

£600.

At sixty days after date of this First of Exchange (Second and Third of the same tenor and date not being paid), Pay to the order of Messrs. Gil Perez & Co., the sum of Six hundred pounds sterling, and charge the same to account as advised by

To Messrs. SMITH & DAWSON,

London.

OLANDO & CO.

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