A LESSON IN BANKING

New Zealand Mail, Issue 1651, 21 October 1903, Page 26

A LESSON IN BANKING

A bank cheque is really a sight draft on the depositor's bank. It differs from ai draft in "wording, and is used; in paying a creditor whereas a draft is commonly used as the means of collecting money from a debtor. The bank is obliged to pay h if it ih-as turrets enough of t]?- drawer to meet it, but the person on whom a draft is drawn may or may not honour it at pleasure. Another use to which merchants put drafts is in sending remittances from one part of the country to another for as banks keep money on deposit in all of the large comanerdial centres, a bank draft is simply the bank's cheque drawing on its deposit from some other bank which it calls its co-respondent. Banks sell these drafts or " cashier cheques" to* customers.. When buying drafts at a bank, says the “ Housekeeper," a woman should hare them drawn payable to her own order, and. then endorsed over to the party she wishes to pay ; they should not be endorsed in blank, for then they can be drawn by anyone- If Mary King Oegcod wishes to send a certain sum of money, she should get a draft payable to her order, and; on the back make the following endorsement : —Pay to the ordei' of Mary King Osgood. This draft will give a complete history of the transaction, ehowing date, amount, names, and sigxiatures. All drafts are cancelled and returned to the bank issuing them, and may bo seen by the customers should occasion require.