Suppose A, of Chicago, receives an order for a bill of goods amounting to $1,000 from B, of Minneapolis. A does not wish to ship the goods without being assured that payment will be promptly made (perhaps he does not know B, or B's credit is not very good). The best way to be sure of this is to ship the goods "C. O. D." (Collect on Delivery - to be paid for when delivered) by freight. This is usually done by means of an "order" form of bill of lading with draft attached. A would send the goods to the order of himself at Minneapolis, being both consignor and consignee. He would also indorse the bill of lading and attach it to a draft drawn on B. The draft would be put in his own local bank which would send it to its Minneapolis correspondent for collection from B. When B pays the draft the bank will turn over to him the bill of lading, and he can then get the goods, since the bill has already been indorsed to him. B would be informed of the start of the shipment, and also advised how the goods were shipped.

Notice By Bank To Consignor That Draft With Bill Of Lading Attached Has

Not Been Paid

The Institute National Bank

......................, 192....

..................................................

.................................................

Dear Sir:

We have received your favor of................

enclosing Draft.......with Bill of Lading attached on

................................................................................................

................................................................................................

................................................................................................

We have made presentation to consignee.....and answer is made that the goods are not yet here, and that the Draft.....will receive attention as soon as the goods arrive.

We have no way of ascertaining the arrival of goods except by notice from the consignee............, and unless we receive instructions from you to the contrary we will hold the Draft.....here until the consignee............inform us that the goods are in.

We shall be pleased to comply with any special instructions that you may wish to give us.

Yours very truly,

Cashier.