BANKING.

Otago Witness, Issue 1241, 11 September 1875, Page 3

BANKING.

Bills.— This is perhaps the safest and most satisfactory method for a banker to make advances. It certainly is iho method that every banker likes beat, and it is also the simplest. The person discounting sdh his interest in certain bills to his banker, who would not nave purchased the debt unless he had thought that both drawer and acceptor were in a good position. Discounting is not a borrowing on the part •of the customer and a lending by the banker. It is an absolute sale ; the customer simply sells bills to the banker, who buys them, and pays cash for them, less discount. When it becomes necessary for a person to discount a bill, he endorses it, and takes it to his banker, who, if satisfied of the soundness of the drawer and acceptor, undertakes to purchase it, i.c. } discount it. Over the drawer's endorsement are written the words, "Pay the Bank of or order," and when tMn i#<to, the properly in the bin pasjej

absolutely to. the banker, who keeps the document till it matures, and then he repays himself. In the event of the bill proving unproductive,- i.e., in the event of its being dishonoured . at maturity, the banker can recover against any person whose name appears on the bill, either as drawer, acceptor, or endorser. . ' Drafts.— These are bills of exchange drawn by one banker on another, the drawee being directed to pay a certain sum to the order of a certain person or firm (named in the body of the draft). Ou endorsement drafts become payable to bearer They may be drawn on demand, at sight, or at so many days after si^ht A person receiving a draft has simply to write his name on the back of it and present it to the drawee for cash, or pay it in to his banking account. —M am{ «z of ' Banking, pnblisliei by Reith and Wilkie