A form of note or promise to pay, the borrower having the right to pay off the loan at any time - presumably not the same day it is made - and likewise the lender the right to demand payment, Sundays and legal holidays being excepted in each case.

In New York the custom prevails for parties to demand loans either wishing to make or receive payment, to give notice to that effect before one o'clock p. m., and for payment to be made before 2.15 p. m. that same day. It is not customary to call loans there on Saturday, Friday loans carrying over until Monday. In that State any rate of interest is permitted on collateral call loans of $5,000 or upwards.

Unless written otherwise in the note, a " demand note " bears legal interest after demand for payment has been made; it is payable on presentation without " grace." The laws differ in various States as to the length of time an indorser is held on a " demand note," but generally for a limited time only.

Rate of interest may be stated in a note of this nature, but it is quite customary for borrowers of " call money " (as it is otherwise known) to have no stipulated agreement as to the rate with the lender, his charge for interest varying from time to time in accordance with the money market. In case of any change it is customary for the holder of the note to notify the borrower of the rise or fall of interest upon the loan; such action being referred to as " marking up rates," or "marking down rates." At times the rate of interest may seem excessive to the borrowing party and he may prefer to exercise his right to pay the loan off, either with cash on hand or by borrowing elsewhere. In the latter event, it is known as " shifting loans."

"Demand," or as they are more commonly termed, "call loans," are at present mostly made by bankers and brokers borrowing on collateral securities, and are not so much in vogue among other classes of borrowers.1

1 Conant, Bolles, and others, raise the question as to whether, in times when banks may suddenly be called upon to return large amounts of money.