Your bank check is really your sight draft on your bank. Of course it differs from an ordinary commercial draft, not only in its wording, but in its purpose. A check is used for paying money to a creditor, while a draft is used as a means of collecting money from a debtor. The bank is obliged to pay your check if it has funds of yours sufficient to meet it, while the person upon whom your draft is drawn may or may not honor it at his pleasure.

Banks keep money on deposit in one or more other banks located in some of the commercial centers. Nearly all large banks keep money on deposit with one or more of the New York City banks. They call these banks their New York correspondents.

A bank draft- is simply the bank's check, drawing on its deposit with some other bank. Banks sell these checks to their customers. Merchants make large use of these drafts, or cashier's checks as they are sometimes called, in making remittances from one part of the country to another. These drafts or checks pass as cash anywhere within a reasonable distance of the money center upon which they are drawn. Banker's drafts on New York would, under ordinary financial conditions, be considered cash anywhere in the United States.

A draft on a foreign bank is commonly called a bill of exchange. Bills of exchange are usually drawn in duplicate, one of which is forwarded and the other retained. They are so worded that when the original is paid the duplicate becomes void. They are drawn in the currency of the country where they are made payable. These drafts are used to pay accounts in foreign countries just as drafts on New York are used to pay indebtedness at home.