Drafts are much used by business men to collect accounts. For instance, A, living in Minneapolis, owes B, a dealer in Chicago, $500 for goods purchased. If A does not send the money after a certain time, which is usually specified in the invoice, then B may draw a draft on A for the amount due. It would be in substantially this form: "To A. Pay to C $500. B." C would very often be a bank. It might in this case be a Chicago bank, or B might have drawn it payable to some bank in Minneapolis, if he had regular business dealings with a bank in that city. If it were a Chicago bank that bank would have indorsed it to some bank in Minneapolis and sent it there for collection. B has really made the Chicago bank his agent for the collection of the money. Or he may have sent it direct to the Minneapolis bank. In either case, the Minneapolis banker, when he gets the draft, will send it around to A by one of the clerks whose business it is to look after collections. If the draft is a time bill, and if A is willing to pay the draft, he writes across its face "accepted," with the date, and signs his name. Of course, he is not bound to accept it, but after he does accept it he is obliged to pay it when it becomes due. In the case of a "sight" or "demand" draft, acceptance should be shown only by payment. Suppose A had lived in some place without a bank. Then B could have sent the draft to the postmaster or some other responsible person for collection. Very small charges are made by banks for collecting bills of exchange. Suppose this was a draft payable in thirty days. B may not wish to wait so long to get his money. In that case, the bank that he has constituted his agent may, after the draft is accepted, if it considers the advance safe, discount it - that is, credit B with the amount of the draft less the interest on it, calculated from the date the draft is discounted to the date the draft is due.

Notice Of Irregularities In Draft Drawn On A Bank And Paid By It

ST. Louis, Mo________________________19___

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Dear Sirs: - Your Draft On Us NO.__________________________

For $______________________Was Presented To Us Today With

The Irregularities Noted Below;

Irregularities

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We Paid The Draft, However, Believing This To Be In Accordance With Your Wishes And We Will Ask You To Kindly Confirm Our Action.

Yours Truly,

Confirmation.

Date_________________________________19-----

To The Institute National Bank,

Dear Sirs:-

We Hereby Confirm Your Action In Paying The Above Described Draft.

Yours Truly,

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Addressee Will Please Sign And Return This Sheet