If the drawer of a draft owes some one in the same city with the person upon whom he draws, that is, if he has a creditor and a debtor in the same city, he can draw on the debtor in favor of the creditor and forward the draft by mail to the creditor. The creditor will deposit it for collection in the ordinary way, usually after indorsing it.

"No Protest."

We often see attached to the end of a draft a little slip with the words "No Protest; tear this off before presenting." This is simply private advice to the banker informing him that the drawer does not wish to have the draft protested. It may be that he does not wish to wrong, or injure the credit of, or add to the expense of his debtor, or it may be that he considers the account doubtful and does not wish to add to his own loss that of protest fees.

Discounting Drafts. It is a common thing to have drafts discounted before they are accepted. For instance, a wholesale merchant may have accounts out amounting to $100,000 and he may need immediate working capital. He draws on his customers and sells his drafts to a bank either directly or through a note broker. The amount of discount depends upon the money market. The drafts are as good as one-name notes. Some of them, of course, will be dishonored, but these are met by the drawer as soon as returned, or he may set aside an agreed-upon percentage of the entire amount to cover the drafts likely to be returned.

Drafts attached to bills of lading and other securities are frequently discounted when placed in the hands of the bank. Such drafts are usually drawn at sight or at one day.