By H. K. Brooks

The basis of a foreign bill of exchange is, as its name implies, a commercial transaction of international character, which consists in the purchase of goods or commodities in one country for export to another country.

The draft represents the money value of the goods which is due the exporter.

The bill of lading is the contract between the transportation company and the shipper for carrying of the goods, and also serves as the order for their delivery.

The insurance certificate is the certification of the marine insurance company of reimbursement in case goods are lost by fire or accident while en route on the ocean.

These three documents - the draft, bill of lading, and insurance certificate - constitute what is termed a foreign commercial bill of exchange. They are almost invariably issued in duplicate for fear one set may be lost in its transmission abroad by mail, one of each set being marked "original," the other "duplicate;" or sometimes one of the drafts will read "first of exchange," the other "second of exchange."

Foreign commercial bills of exchange are also known as "documentary bills of exchange," by reason of the bill of lading and insurance certificate accompanying the draft. It is customary to send the originals of the three documents by first steamers, the duplicates or seconds by following steamer. If the original set is lost, the duplicate will serve the same purpose.