First.

SEVILLE, 1st January, 1901.

£600.

At sixty days after date of this First of Exchange (Second and Third of 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.

In need, with Messrs. Knight & Co., for honour of C. D.

In case of need, with Messrs. Williams, Marshall, & Co., for honour of O. & Co.

The words in Spanish mean "pay to the order of," and the explanation of the bill with these endorsements is that Olando & Co., the drawers, in Seville, having credit or value with Smith & Dawson, in London, and desiring to pay Gil Perez & Co., in Seville, £600, they draw a bill for the amount on Smith & Dawson, and give it to Gil Perez & Co. in satisfaction of the debt. Gil Perez & Co. in their turn sell the bill to Mr. Carlos Dantas in Barcelona for its equivalent value in Spanish money, or they transfer it to him in payment

of a debt, and they therefore endorse the bill to him as shown in the first endorsement, so that he now becomes the party entitled to receive the money for it. Carlos Dantas, in the same way, passes on the bill to E. Latour & Co., in Paris, and transfers the bill by endorsing it as shown in the second endorsement. E. Latour & Co., in Paris, doubtless in exchange for value received, now transfer the bill to Thomas White & Co., in London, as shown in the third endorsement. Thomas White & Co. will now get the bill accepted and hold it till it matures. They are termed the Holders, and they and no others are the persons now entitled to receive the money, but the bill will require their signature, and, when paid, the endorsements will appear as follows:

From the foregoing illustrations it will be apparent

that it is possible for a bill of exchange to travel about a great deal in various parts of the world before it reaches the hand of a final payee, or even before it is presented to the drawee for his acceptance.

But we will suppose that our bill was drawn at sixty days' sight, instead of sixty days' date. In such a case Gil Perez & Co. would have sent the first via to their

THOMAS WHITE & CO.

London correspondent to get accepted, and would have endorsed the second to Mr. Carlos Dantas by writing on the face of it "first accepted with " the name of their correspondent, as explained on page 242.

The amount of a foreign bill is usually expressed in the money of the country in which it is to be paid, but sometimes it is drawn in the money of the country of the drawer of the bill; thus, in this kingdom, mercantile bills for shipments, or for settlements of accounts, and especially those remitted from the country for negotiation or sale in London, are frequently drawn in sterling money, and then the amount which is to be paid abroad is fixed by the rate of exchange at which it is first negotiated being stated on the bill, usually in the endorsement.

in some

The times for which bills are drawn vary, measure, according to the usages of different places; but more generally they are according to the purposes for which they are drawn. Bills at sight, or to be peremptorily paid on their being presented, are for reimbursement on account, commonly, of returned or dishonoured bills. Those at short sight, as three days' sight, are usually for returns for operations in bills, bullion and foreign stock. Bills at one month have no particular character; those at two months are commonly mercantile bills; and those at three months, for banking operations, which latter bills are drawn at this long period, in order to afford full time for waiting to take advantage of any rise in the rates of exchange, or for their being sent about from place to place, wherever there is a probable opportunity of making a profit.

USANCE.

Bills at usance are at the customary time of drawing upon or from the given place, but very few bills are now so drawn. In this country, usance from France, Holland and Germany means thirty days' date; from Spain and Portugal sixty days' date; and from Italy three months' date.

THE MATURITY OF A BILL OF EXCHANGE.

The maturity of a bill is at the expiration of the term for which it is drawn, plus three days called Days of Grace, except for bills payable At Sight, On Demand, or On Presentation, which are, of course, payable as soon as they are presented.

When the maturity of a bill falls on a Sunday or legal holiday, the bill must be presented for payment the day preceding; but when the maturity falls on one of the Bank Holidays, the bill is payable on the following day.

PRESENTATION FOR ACCEPTANCE.

When a bill matures it must be presented to the acceptor, or (where he has named one) to his banker for payment, and the presentation for payment must be made during the usual business hours. It is the custom of merchants to pay the accepted bills which they have received into their bankers, who attend to their collection on the due dates.

The consequence of not presenting a bill for payment at maturity is that, although the acceptor still continues liable upon it, all the other parties to the bill-the

drawer and endorsers-become discharged from liability should the acceptor fail to pay.

The acceptor of a bill has the whole of the day of maturity to pay in.

When a bill is not made payable at a bank, it is not necessary that the presentation for payment be made to the acceptor personally; it is sufficient to present the bill to his clerk or to any one else who may be found at his place of business during business hours, and should the bill not be met the holder can Protest it.

If the acceptor of a bill should have become bankrupt, the bill must still be presented to him for payment at maturity.

PROTESTING A BILL FOR NON-ACCEPTANCE OR

NON-PAYMENT.

A bill is "Dishonoured" by non-payment when it is duly presented for payment and payment is refused, or cannot be obtained, or when presentment is excused and the bill is overdue and unpaid, and this brings us to the formality of protesting a bill.

When a foreign bill is refused acceptance or payment by the drawee, it is necessary to have it protested; this is done by a Notary, who again presents the bill to the drawee for acceptance or payment, as the case may be, and in the event of his meeting with a refusal, he draws up a formal document called a Protest. This begins with a verbatim copy of the bill, and goes on to state at whose request it was presented for acceptance or payment, states what was the answer given, and winds up with a protest signed by the notary against the drawer and endorsers for re-exchange and charges