CREDITS AND COLLECTIONS 329 



yi. Selling on Sight Drafts or Time Drafts. — This prac- 

 tice may not be followed entirely because of fear that the one 

 receiving the goods will not be able to pay therefor. However, 

 it is the safe system by which to ship goods to persons or firms 

 that are not able to satisfy the shipper as to their financial 

 responsibility. The smaller creameries are often, when ship- 

 ping butter or cheese to commission merchants, making out 

 sight drafts for part value and at times when the butter has been 

 contracted for at a definite price the shipper will draw a sight 

 draft for part or at times for the total value of the products 

 shipped. By this method the creamery is receiving cash for its 

 products and will require less money for carrying on its busi- 

 ness. 



The sight draft when used for such a purpose is attached 

 to the bill of lading and is forwarded through the local bank 

 to the bank on which it is drawn, this bank being located in 

 the city to which the goods are being shipped. The sight draft 

 is presented to the consignee for payment who on payment 

 thereof receives the bill of lading for goods covered by draft. 



Some shippers, especially shippers of carload lots, make 

 all collections on time drafts. These are similar to the sight 

 drafts except that they are not payable on sight but payable in 

 five, ten, or fifteen days or may be made out for any time agreed 

 upon between the shipper and the consignee. Such a draft is 

 sent through the bank in a similar manner as the sight draft, but 

 when presented by the bank to the consignee the draft is accepted 

 by the consignee who in return receives the bill of lading. When 

 accepting a time draft the word "accepted" is written across 

 the face of the draft and signed by an officer of the firm ac- 

 cepting the draft. The banker who holds the draft will present 

 it to ihe consignee for collection the day it becomes due. 



