The Counting House.

Otago Witness, Issue 1244, 2 October 1875, Page 3

The Counting H ouse.

BANKING.

Pbomissoby Notes to Banks.— It i a common, when a person is desirous of having a temporary overdraft, to take his promissory note to the bank accommodating, discount the instrument, and place it to the credit of his current account. The security offered to the banker by this transaction is very slender ; the possession of the note merely saves him the necessity of proving his debt. Such notes should be for brief terms, but in no case payable on demand. It is much more satisfactory, both for the banker and the customer, to have a day fixed for the repayment of the advance. A promissory note payable on demand places the customer too much at the mercy of the banker, and, on the other hand, the possession of such a note by the banker may cause him to delay presentation day after aay and month after month, until it is too late to present it for payment at all. A Lettbb of Hypothecation is a document addressed to a banker by a shipper of goods. The shipper gets an advance on toe goods, hands his draft on the consignee (as also bills of lading), to his banker, and the goods so drawn against remain the property of the banker until he is repaid. The banker forwards the documtnts to Ma agent at the port for which the ship is bound ; the agent usually delivers up the bills of lading when the draft is accepted, collects the drart, and pays the banker at maturity. MBBoumus Business is sometimes engaged m by banks, but the practice caunot be too strongly condemned. .Bankers should stick to banking business entirely.— Manual of Banking pitblished by Reith and Wilhie, JDunedin