

MONEY. 



it, less a certain sum for interest. Interest is a 

 charge for the loan of money, and is ordinarily 

 reckoned by per cent. Thus 5 per cent, (or cen- 

 tum) per annum signifies a charge of for every 

 ;ioo for one year, which is equal to a shilling for 

 each pound. The rate of discount or interest 

 depends on the demand for discounts or loans, 

 .and the supply of the money to meet that 

 demand. In this country it is usually about 2 

 to 7 per cent. ; but it sometimes falls below 2, 

 and sometimes reaches 10 per cent The amount 

 of the discount or interest on any transaction 

 depends, of course, not only on the rate, but also 

 on the length of time between the advance of the 

 money and the date when the bill becomes due. 



According to a practice of old standing, bills 

 are not, in this country, presentable for payment 

 till the third day after that which is specified for 

 them to fall due. The three days allowed are 

 called the days of grace. Thus, a bill drawn on 

 the 5th of May, at three months, is not legally due 

 till noon of the 8th of August. In some countries, 

 the period of grace is much longer than three 

 days. 



Bills of exchange are occasionally drawn in the 

 form of promissory-notes ; as, for example : 



.100. LONDON, $tA May 1884. 



Three months after date, I promise to pay to 

 Mr John Nokes, or order, the sum of one hundred 

 pounds, value received. THOMAS STYLES. 



When in this form, no signature is written across 

 the front of the document it is only indorsed by 

 the creditor. Promissory-notes are in every re- 

 spect liable to the same regulations as bills. Both 

 promissory-notes and bills must be written on 

 stamps of the proper price ; if on stamps of an 

 inferior value, they are not negotiable, and cannot 

 be protested. The protesting of a bill is simply 

 the marking of a notary-public that it has not 

 been duly paid on presentation ; which marking, 

 or noting, affords proof that it had been presented. 

 In Scotland, when the protest is written out and 

 recorded, it forms the warrant for the issuing of 

 legal diligence by the competent authorities in a 

 more summary and less expensive way than if no 

 protest had been taken. When the acceptor of a 

 bill fails to pay the amount, the holder can fall 

 back for payment on any of the indorsers, or the 

 drawer, provided these persons be immediately 

 warned that J:he proper debtor has failed to pay. 



Bills are sometimes drawn at sight, or so many 

 days after sight ; for example : 



j5o. LONDON, yh May 1884. 



Ten days after sight, pay me or my order the 

 sum of fifty pounds, value received. 

 To Mr ISAAC WALTERS, JOHN JENKINS. 



Cheapside. 



A bill of this kind is usually drawn by a person at 

 a distance from his debtor, and on writing it out 

 and indorsing it, he transmits it to an agent or 

 probably a creditor of his own in the town in 

 which the debtor resides. The agent having 

 received it, hastens with it to the debtor to be 

 sighted, which consists in the debtor as, for in- 

 stance, the above Mr Walters accepting it, by 

 signing his name, and marking the day on which 

 he has done so. The bill is now a negotiable 

 instrument, and on the third day after the day 

 specified, it is presentable for payment This 



may be called a convenient way of getting ready 

 money or prompt payment of any sum from a 

 debtor. It is very common to draw foreign bills 

 of exchange at so many days after sight. These 

 bills are of precisely the same nature as inland or 

 home bills of exchange ; but for the sake of 

 security in transmission, they are drawn in sets of 

 three. The following is a common form : 



100. MONTREAL, \%th May 1884. 



Sixty days after sight, pay this my first bill of 

 exchange (second and third of the same tenor and 

 amount being unpaid), for the sum of one hundred 

 pounds sterling, value received. 



SAMUEL ROBERTSON. 

 To Messrs BROWN & JONES, 



Merchants, Bristol. 



This bill being indorsed by Mr Robertson, is 

 transmitted to England probably in liquidation 

 of a debt of the same amount and is presented 

 to Messrs Brown & Jones to be sighted, and is 

 afterwards presented to them for payment accord- 

 ingly. The agent or individual to whom it is sent 

 receives by the next packet the second bill of the 

 same tenor. Should the first have been lost by 

 shipwreck, this second is available ; but other- 

 wise it is of no use, and may be destroyed. The 

 third bill of the same tenor is retained by the 

 drawer till he learn whether the first or second 

 has been received ; if both have been lost, it is 

 transmitted. Bills of this description are rarely 

 sent by the actual drawer. They are usually paid 

 away or sold on the spot to another party, who 

 transmits them to a creditor of his own, and he 

 negotiates the payment. The abundance or 

 scarcity of foreign bills of exchange affects their 

 price. If many merchants be in quest of bills of 

 this nature to send abroad, and there be few 

 having them to dispose of, they rise to a premium ; 

 in other words, a merchant in New York may give 

 ^105 for a bill for ^100 payable in England. If, 

 on the contrary, there be many bills and few 

 buyers, they will be disposed of at a discount 

 These differences constitute what is called the 

 difference of exchange. 



The amount of the crirrency or money of the 

 United Kingdom is not known. The bank-notes 

 in circulation vary at different periods of the year, 

 and in different states of the commercial world. 

 The note circulation of the United Kingdom for the 

 month ending September 23, 1882, was (Bankers' 

 Magazine, 1882) as follows : 



Bank of England (month ending Sept 23, 



1882) ^26,267,711 



English Private Banks 1,626,898 



English Joint -stock Banks 1,644,335 



^29,538,944 



Scotch Banks 5,620,458 



Irish Banks 7,108,372 



Total for United Kingdom 1 .42,267,774 



As nearly all large payments, however, are made 

 by bills of exchange and drafts on bankers, 

 there is an enormously large currency of that 

 kind. The centre of all the great money transac- 

 tions of the British empire is London, in which 

 is situated the Bank of England, or principal 

 banking institution. In Scotland, celebrated for 

 its well-conducted banking institutions, the money- 

 currency is almost entirely bank-notes and silver. 



489 



