.USINESS 
 
 i.-isrHors 
 
 ill ill 
 
 iii i! i 
 
 HET;RY 
 
 
 
MODERN 
 BUSINESS METHODS 
 
MODERN 
 BUSINESS METHODS 
 
 BY 
 
 WILLIAM P. TELLER, Credit Man and Accountant, the Illinois 
 
 Envelope Company, Kalamazoo, Michigan, and 
 
 HENRY E. BROWN, formerly Head of the 
 
 Commercial Department of the 
 
 Rock Island, Illinois, 
 
 High School 
 
 RAND, McNALLY & COMPANY 
 
 Chicago New York London 
 
A FIRST BOOK IN BUSINESS METHODS 
 
 Copyright, 1903, 
 By WILLIAM P. TELLER and HENRY E. BROWN 
 
 Copyright, ion, 
 By WILLIAM P. TELLER and HENRY E. BROWN 
 
 MODERN BUSINESS METHODS 
 
 Published, igiz 
 Copyrighted under above titie 
 
 EJjECTROTYP$D.fc.$TD FJIINTJED BY 
 
 , "JJ/S .* A 
 
THE PREFACE 
 
 IN the preparation of this work an effort has been made to 
 present, in a clear and simple manner, practical information 
 pertaining to everyday business transactions. The design has 
 been to prepare a book which would serve as a guide in ordinary 
 business matters, one that would enable those seeking information 
 regarding modern business methods to obtain the knowledge desired 
 without having to search through a whole library to find it. 
 
 It is believed that there is a demand for such a book and 
 that the work will be found both interesting and useful to a large 
 class of people who desire to become familiar with modern ways of 
 doing business. The intention has not been to cover all lines 
 of business but only to include the facts which every business man 
 should know. 
 
 The authors acknowledge their indebtedness to Professor 
 Henry Rand Hatfield, Dean of the College of Commerce and 
 Administration, The University of Chicago, and Donald L. Morrill, 
 Attorney at Law, Chicago, for reading this book in manuscript, 
 and for many valuable suggestions. 
 
 W. P. T. 
 H. E. B. 
 
 291490 
 
THE TABLE OP CONTENTS 
 
 PAGE 
 
 The Preface . . -. 5 
 
 Chapter I. Letter Writing 1 1 
 
 Chapter II. Bills, Invoices, Statements of Account, 
 
 Receipts 34 
 
 Chapter III. Banking 53 
 
 Chapter IV. Promissory Notes, Interest, Bank Dis- 
 count, Partial Payments 77 
 
 Chapter V. Drafts 106 
 
 Chapter VI. General Postal Information, Post Office 
 Money Orders, Express Money Orders, 
 
 Letters of Credit 116 
 
 Chapter VII. Petitions, Power of Attorney, Commercial 
 
 Agencies, Miscellaneous 132 
 
 Chapter VIII. Railroad and Express Business .... 147 
 
 Chapter IX. Contracts, Leases, Guaranties, Bonds . . 162 
 
 Chapter X. Merchandise Sales, Stocks and Bonds . . 182 
 
 Chapter XL Partnership, Insurance . 196 
 
 [7] 
 
8 
 
 THE TABLE OF CONTENTS 
 
 Chapter XII. Deeds, Mortgages 213 
 
 Chapter XIII. United States Land Surveying .... 234 
 
 Chapter XIV. Wills, Settling of Estates 241 
 
 A List of Signs, Abbreviations, and Contractions used in 
 
 Business 250 
 
 A List of Commercial Words and Phrases . 254 
 
 Suggestions to the Teacher 263 
 
 The Index . 266 
 
The Business Career 
 
 CAN confidently recommend 
 to you the business career as 
 one in which there is abundant 
 roomfo? the exercise of man s 
 highest power, atd of every 
 good quality in human nature. I believe the 
 career of the great merchant, or banker, or 
 captain of industry to be favorable to the 
 development of the powers of the mind, and 
 to the ripening of the judgment upon a wide 
 range of general subjects ; to freedom from 
 prejudice, and the keeping of an open mind. 
 And I do know that permanent success is not 
 obtainable except by fair and honorable deal- 
 ing t by irreproachable habits and correct 
 living, by the display of good sense and rare 
 judgment in all the relations of human life, 
 for credit and confidence fly from the busi- 
 ness man, foolish in word and deed, or 
 irregular in habits, or even suspected of 
 sharp practice. Tj*tj*j*j*j*j*<& 
 
 ANDREW CARNEGIE 
 
MODERN 
 BUSINESS METHODS 
 
 CHAPTER I. 
 
 LETTER WRITING 
 
 I. Business Letters. Everyone should learn to write a 
 good business letter. While it is much easier for some people 
 than for others to express just what they wish to say in clear, 
 forcible, grammatical language, the ability to write a good 
 letter may be acquired by anyone who will give the subject 
 sufficient attention. A letter is rightly looked upon as a 
 photograph of the character, ability, and culture* of the 
 writer, who is rigidly judged by his correspondence. Careful 
 attention should be given to punctuation, the use of capital 
 letters, and the proper construction of sentences; then, by 
 diligent practice and the study of good models, anyone may 
 learn to write a good business letter. 
 
 There are certain forms used by business men in the 
 arrangement of letters, which may be easily learned and 
 which should be carefully observed in writing, as they add 
 much to the neat and orderly appearance of the letter. 
 
12 A FIRST BOOK IN BUSINESS METHODS 
 
 Notice the various parts of a letter as shown in the form 
 outlined below : 
 
 Form I. 
 
 Heading 
 
 Addr_ess 
 Salutation 
 
 Body of Letter 
 
 Body of Letter 
 
 Complimentary Clo_se_ 
 
 Signature 
 
 Outline for a Letter 
 
 2. Paper. Different sizes and shapes of paper are used 
 for different purposes, but for business purposes, letter paper 
 about 8 by 10 inches, or note paper about 7 by 9 inches, is 
 usually preferred. 
 
 White paper is almost always used in preference to tinted 
 paper, and white envelopes may be used for all purposes. 
 
LETTER WRITING 13 
 
 There are several separate and distinct parts to a letter, as 
 follows : 
 
 1. Heading. 
 
 2. Address. 
 
 3. Salutation. 
 
 4. Body of the Letter. 
 
 5. Complimentary Close. 
 
 6. Signature. 
 
 3. The Heading. The heading of the letter indicates 
 when and where the letter was written ; i. e., it gives the 
 address of the writer and the date. It should contain all the 
 information necessary to enable the recipient so to direct his 
 reply that there will be no possibility of a mistake as to where 
 the letter should be sent. If the sender lives in a city of any 
 size the street address should always be given. The heading 
 should be placed in the upper right-hand corner of the sheet, 
 about one and one-half inches from the top, and should be 
 written in a clear, plain hand so as to be perfectly legible. 
 Business men usually have their letterheads printed. The 
 heading may be one, two, or three lines, never more than 
 three. The heading of a business letter usually occupies not 
 more than one line. 
 
 4. Punctuation of the Heading. Care should be taken in 
 the punctuation of the heading. A comma should be placed 
 after the city, county, state, and the day of the month. A 
 period should be placed after the heading and after each 
 abbreviation. Do not use st, d, or th, in dates, if the year 
 follows the day of the month. 
 
 Notice the punctuation of the heading in the forms given 
 on the following page. 
 
14 A FIRST BOOK IN BUSINESS METHODS 
 
 DEAR MR. SMITH: 
 Austin, Tex. 
 DEAR SIR : 
 
 Form II. 
 KALAMAZOO, MICH., July 14, 1901. 
 
 Form III. 
 
 PHOENIX, ARIZ., 
 
 Aug. 23, 1901. 
 MESSRS. ORMSBY & Co., 
 New Orleans, La. 
 GENTLEMEN : 
 
 Form IV. 
 
 AGRICULTURAL COLLEGE, 
 LANSING, MICH., 
 
 July 14, 1901. 
 DEAR MRS. CHATT: 
 Boston, Mass. 
 DEAR MADAM : 
 
 5. The Address. The address contains the name of the 
 person to whom the letter is written, with whatever titles he 
 may have, and his residence or place of business. It may 
 occupy two or three lines, but two are usually sufficient. 
 Street numbers are rarely placed in the address. The city 
 and state are placed on the same line, immediately below 
 the name. Titles are, on account of custom and politeness, 
 given to all persons to whom letters are written, as " Miss " 
 or " Mrs.," " Mr.," " Messrs.," etc. Oftentimes these titles are 
 added to names : " Esq." to that of a lawyer ; " M. D." to that 
 of a Doctor of Medicine ; " LL. D." to that of a Doctor of Laws. 
 
 However two titles of the same class should not be 
 added to the same namej as "Mr. John Smith, Esq.," 
 "Rev. Henry Woodman, D. D." 
 
LETTER WRITING 15 
 
 6. The Salutation. The salutation is a term of politeness, 
 respect, or affection used in addressing the person to whom 
 the letter is written. For example, "Sir" is a formal saluta- 
 tion used chiefly in addressing official persons. "Gentlemen," 
 "Sirs," may also be used. "Sir" is used in addressing a single 
 individual, and "Messrs.," "Sirs," and "Gentlemen" in address- 
 ing more than one. Never abbreviate "Dear" to "Dr.," nor 
 "Gentlemen" to "Gents," nor "Messrs." to "Mess." Do not 
 write "My dear Sir" with a capital D in "dear." Except in 
 very formal letters, however, it is never desirable to use the 
 salutation "Sir," "Dear Sir," or "My dear Sir." It is always 
 preferable to use the proper name, as "My dear Mr. Smith," 
 "Dear Mr. Lapham," or "My dear Mrs. Arnold." 
 
 Form V. 
 FRIEND JONES: 
 
 Your kind letter is received and contents, etc. 
 
 Form VI. 
 
 MESSRS. J. P. WOOD & Co., 
 
 Birmingham, Ala. 
 GENTLEMEN : 
 
 Your favor of the i3th inst, etc. 
 
 . Form VII. 
 MR. E. STORMS, 
 
 Jacksonville, Fla. 
 DEAR SIR: 
 
 We send you by express to-day the goods, etc. 
 
 Form VIII. 
 
 MR. CHAS. JOHNSON, 
 
 Chicago, 111. 
 MY DEAR SIR 
 
 In reply to your favor of November 24, etc. 
 
1 6 A FIRST BOOK IN BUSINESvS METHODS 
 
 7. The Body of the Letter. The body of the letter is 
 that portion which contains the subject-matter or the com- 
 munication. As time is a matter of the greatest moment to 
 the business man, a correspondent should make his letters 
 as brief as possible, using as few words as are consistent with 
 the requirements of good English. 
 
 If the letter refers to more than one matter the points 
 should be taken up in the order of their importance, the 
 most important first, and so on. In writing a reply to a letter 
 received, the same rule should be followed. If the letter is 
 short, it should occupy as nearly as possible the middle of 
 the page, but whatever its length, care should be taken to 
 leave enough space at the bottom of the page for the compli- 
 mentary close and the signature. 
 
 8. Directions. The following directions with regard to 
 the proper construction and composition of a letter are of 
 great importance, and should be noted with care : 
 
 1. A margin of from one-half an inch to one inch should 
 be reserved at the left-hand side of the paper, and all lines 
 with the exception of those commencing a paragraph should 
 begin exactly at this point. 
 
 2. The margin on the right should be approximately 
 from one-fourth to one-half an inch. 
 
 3. The punctuation of the body of the letter should be 
 the same as that of any English composition. Do not put a 
 period after Miss, ist, 2d, 3d, 4th, etc. They are not abbre- 
 viations. 
 
 4. Do not write & for and except in firm names. 
 
 5. Do not abbreviate the names of cities. 
 
 6. Do not begin the names of the seasons with capitals. 
 
 7. Do not make too many paragraphs. 
 
LETTER WRITING 17 
 
 9. The Complimentary Close. The phrase of respect, 
 courtesy, or endearment written at the end of a letter is called 
 the complimentary close. The words used vary according to 
 circumstances. 
 
 The complimentary close of a social letter may be " Yours 
 truly," " Your friend," " Fraternally yours," " Yours as ever," 
 " Very sincerely yours," etc., and should be in conformity with 
 the salutation. The forms most used for business letters are 
 "Yours truly," "Yours very truly," " Respectfully yours," 
 "Very respectfully yours," etc. The complimentary close 
 should be written on the next space below the body of the 
 letter, and should begin not far from half the distance 
 between the left-hand margin (see 8) and the right-hand 
 edge of the paper. 
 
 10. The Signature. The signature is composed of the 
 name of the person or firm writing, and it should be written 
 with care so that it may be easily read. Everyone should 
 adopt some form of signature and always use the same form 
 in signing letters and all business papers. In signing legal 
 documents the first name should always be used, as, for 
 example, "John W. Green" rather than "J. W. Green" or 
 "J.William Green." 
 
 When one person signs a letter or business paper for 
 another, as, for example, a clerk signing a firm name, he 
 should sign the firm name and then, immediately below it, 
 should write, " per - " (his own name), in order to indi- 
 cate by whom the letter or paper was signed. A comma 
 should follow the complimentary close, and a period the sig- 
 nature. ^ The signature should end near the right-hand mar- 
 gin of the paper. For illustration of the preceding, note the 
 arrangement in Form IX. 
 
1 8 A FIRST BOOK IN BUSINESS METHODS 
 
 Form IX. 
 
 SAN FRANCISCO, CAL., July 29, 1901. 
 MESSRS. J. K. JOHNSON & Co., 
 
 City. 
 GENTLEMEN : 
 
 I have just returned to the city, after an absence of 
 several days, and learn with much regret, from yours of the nth 
 inst, that my note has been protested for non-payment. 
 
 I hasten to withdraw it from the bank, and beg to say that such 
 an oversight will not occur again. 
 
 Regretting the trouble it has caused you, I am, 
 
 Yours truly, 
 
 F. O. ROBINSON. 
 
 11. Folding. In folding a business letter of the usual size, 
 the first fold should be from the bottom towards the top, 
 making the fold nearly in the middle of the sheet. See that 
 the edges are exactly even, then press down the fold. Next 
 fold the right side towards the center and then the left over 
 the right. The letter as folded should be slightly shorter 
 and narrower than the envelope. The last two folds should 
 be equal. The letter should be inserted in the envelope so 
 that the loose edges will be at the top and back. 
 
 12. The Address Upon the Envelope. In writing the 
 address upon the envelope the name of the person addressed 
 should be in a straight line, and a little below the middle 
 of the envelope. Care should be taken to commence fat 
 enough to the left so that the blank spaces at either end will 
 be about equal. After the name should come the ^street 
 address, if the residence of the recipient is in a town of any 
 considerable importance. This should be placed below and 
 slightly to the right of the name. The name of the city 
 
LETTER WRITING 
 
 Form X. 
 
 Forms of Address on Envelopes 
 
20 A FIRST BOOK IN BUSINESS METHODS 
 
 or town should follow on the next line, and the name of the 
 state should be placed near the lower right-hand corner. If 
 the ( name of the county is added, it is usually placed in the 
 lower left-hand corner, as is the name of the person in whose 
 care the letter may be sent. The stamp should always be 
 placed in the upper right-hand corner. The address of the 
 sender should always be placed in the upper left-hand corner 
 to insure its return should the postoffice authorities be unable 
 to find the person to whom the letter is addressed. 
 
 13. Letters of Introduction. Letters of introduction are 
 frequently used by business men to introduce a friend to 
 some other business man or firm. A letter of this kind should 
 state briefly the business of the person introduced and give 
 such other information regarding him as the writer desires. 
 It should not be sealed, as it would be very discourteous to 
 the person introduced not to give him an opportunity to see 
 the contents of the letter before presenting it. 
 
 The letter should be so addressed that the person receiving 
 it may know at a glance that it is a letter of introduction. 
 
 Form XI. 
 
 An Addressed Envelope of Introduction 
 
LETTER WRITING 21 
 
 Form XII. 
 
 SEATTLE, WASH., Aug. 14, 1901. 
 MR. GEORGE L. SMITH, 
 
 Buffalo, N. Y. 
 DEAR FRIEND : 
 
 This will introduce to you Mr. Isaac M. Viele of this 
 city, who is a friend of mine and one whom I know you will be 
 glad to meet. He visits your city for the purpose of selecting a 
 suitable location for business. If you can assist him in any way, 
 your kindness will be appreciated by him and also by 
 
 Your sincere friend, 
 
 A. G. THOMPSON. 
 
 Form XIII. 
 
 MERIDEN, CONN., Aug. 14, 1901. . 
 MR. CHARLES H. CARTER, 
 New York, N. Y. 
 DEAR FRIEND : 
 
 You will, I am sure, be glad to know my friend, Mr. 
 George D. Johnson, whom this letter will introduce to you. He 
 visits your city for the purpose of purchasing a stock of goods 
 for a hardware store which he proposes to open in this city in the 
 near future. Any favors which you can render him will be 
 greatly appreciated. Yours very truly, 
 
 HENRY R. MATHEWS. 
 
 14. Letters of Recommendation. Sometimes a letter of 
 recommendation is given with a letter of introduction, but 
 not always. Letters of recommendation are sometimes 
 addressed to a particular person or firm, but usually they 
 are addressed in a general way; as, "To whom it may con- 
 cern," or "To the public." 
 
 There are few people who are not called upon occasionally 
 to furnish such a letter. School officers are often requested 
 
22 A FIRST BOOK IN BUSINESS METHODS 
 
 to give a letter of recommendation to a teacher. Ladies who 
 employ servants in their homes are frequently asked, by those 
 who have worked for them, for letters testifying to their capa- 
 bility and honesty. Business men oftentimes require those 
 whom they employ to bring letters showing the character 
 and ability of the applicant, and his fitness for the position 
 which he expects to fill. As letters of recommendation are so 
 common, it is quite necessary that everyone should know how 
 to write a letter of this kind. Care should be taken not to be 
 too extravagant in praise of the person who is recommended, 
 but to simply state briefly his real merits and capabilities. 
 
 The form given below will show how a letter of recom- 
 mendation is usually written : 
 
 Form XIV. 
 
 BUFFALO, N. Y., Sept. i, 1901. 
 
 TO WHOM IT MAY CONCERN : 
 
 This is to certify that Mr. Charles W. 
 
 Thompson has been in our employ during the past three years. 
 He is a reliable young man, faithful and industrious in his habits, 
 and we take pleasure in recommending him to anyone in need of 
 such service as he is willing to undertake. 
 
 Respectfully, 
 
 WM. B. WlLBERFORCE & Co. 
 
 15. Directions. There are certain titles and forms which, 
 though not always recognized legally, have grown to be 
 necessary through common usage. Here are some examples : 
 
 1. A minister of the Gospel should be addressed as " Rev- 
 erend." 
 
 2. The President of the United States, the Governor of 
 any state, and the Ambassadors of the United States should 
 be addressed as " His Excellency." 
 
LETTER WRITING 23 
 
 3. The Vice-President, Senators, and Representatives of 
 the United States, the Lieutenant-Governor of a state, state 
 Senators, Judges, Mayors, and heads of Departments of the 
 General Government should be addressed as " Honorable." 
 
 4. In official correspondence it is better to address the 
 office than the officer, as, " To the Secretary of State, The 
 Honorable John Hay. Sir : ", instead of " To the Honorable 
 John Hay, Secretary of "State." 
 
 5. The following miscellaneous titles are generally used: 
 His Excellency and Mrs. Theodore Roosevelt ; Governor and 
 Mrs. Hazen S. Pingree; the Honorable and Mrs. William P. 
 Frye; the Rev. Dr. and Mrs. James P. Henson; Prof, and Mrs. 
 Chas. B. White; Mr. and Mrs. W. J. Burdick. 
 
 6. In writing letters to ordinary officials, it is customary 
 to begin with the salutation "Sir:" and close with "I 
 remain your obedient servant," or " I have the honor, Sir, to 
 be your obedient servant." A common form of addressing 
 the President of the United States is, "To the President, 
 Executive Mansion, Washington, D. C.," and the salutation 
 merely, " Mr. President." 
 
 7. In writing a letter to a gentleman, the salutation should 
 be " Dear Sir," " Dear Mr. - ," or if he be an old acquaint- 
 ance, " My dear Sir," " Dear Friend," or " My dear Friend." 
 
 8. In writing a letter to a married woman, the salutation 
 should be " Madam" or " Dear Madam " or " Dear Mrs. - . " 
 If the lady is unmarried the salutation is " Dear Madam " or 
 " Dear Miss ." 
 
 CAUTION. Letters containing blots, erasures, or interlineations 
 should never be posted, but should be rewritten. Careless writers 
 show a lack of respect for the person written to, and the recipient of 
 such a letter is likely to consider it of little importance. 
 
24 A FIRST BOOK IN BUSINESS METHODS 
 
 EXERCISES 
 
 /. Write a letter to a friend who lives in an adjoining 
 state, giving him a cordial invitation to visit you. 
 
 2. You are about to visit a friend who lives in a distant city. 
 Write him a letter telling him when you will arrive, and ask 
 him to meet you at the train. 
 
 j. Write a letter to farmer Rice asking him if he can 
 supply you with a few bushels of choice apples for your 
 winter use. Ask him, also, what varieties he has, and the 
 price per bushel. 
 
 4. You are a young man just beginning business for 
 yourself with a small amount of capital. Write to a whole- 
 sale merchant asking him if he will sell you $500 worth of 
 goods and give you four months' time in which to pay for 
 them. 
 
 5. You receive a quantity of goods and a bill for the same, 
 but you find that, in footing the bill, an error of $10.00 was 
 made in favor of the wholesale merchant. Write him a polite 
 letter calling his attention to the error. 
 
 6. You order a bill of goods from Johnson & Co., No. 231 
 Canal Street, Chicago, but the goods have not been shipped 
 in time for your need. Write a letter countermanding the 
 order. 
 
 7. H. C. Whitney of Downey, Cal., is owing you money 
 which is long past due. Write him in reference to the matter. 
 Mr. Whitney has given your letter no attention. Write him 
 a second letter more pointed than the first. You now find 
 that he does not intend to pay you the amount that he 
 
 .owes unless he is forced to do so. Write a letter to Howard 
 & Johnson, attorneys at law, in Downey, Cal., and instruct 
 them to commence legal proceedings for collection of the 
 account. 
 
LETTER WRITING 25 
 
 8. Answer the following advertisements : 
 
 WANTED-BRIGHT BOY FOB OFFICE WORK. 
 Must be good penman and quick at figures. Ad- 
 dress in own handwriting, A. K., care Telegraph. 
 
 BOY-BRIGHT, SMART, ACTIVE OFFICE BOY; 
 17 or 18 years old ; must be good penman and ac- 
 curate in figures; salary 825 per month. Address, 
 with references, P O 518, Tribune office. 
 
 YOUNG LADY-TO FILL VACANCY IN IMPOR- 
 tant clerical department ; one writing a rapid com- 
 mercial hand preferred ; age from 18 to 23 years ; salary 
 $6 to $7 to start ; when qualified the position pays up 
 to $60 a month; references required. Address N E 51, 
 Tribune office. 
 
 WANTED-BOY, 15 YEARS OR OLDEE ; ONE LFV- 
 Ing with parents preferred. 712 W. Lake st. 
 
 BOYS-IN OFFICE OF LARGE WHOLESALE 
 house ; 15-16 years of age ; must live at home and 
 have good references ; good opportunity for advance- 
 ment; wages $4 to start. Address H 496, Record- 
 Herald. 
 
 ADDRESSER-WELL EDUCATED YOUNG LADY: 
 must be neat, accurate, and write good, plain, rapid 
 hand ; North Side ; fine chance to advance. Address 
 P 258, Tribune office. 
 
 9. You buy a quantity of goods and are allowed four 
 months' time in which to pay for them. At the expiration 
 of the four months you are unable to pay for the whole 
 amount of the goods. Write a letter to the wholesale mer- 
 chant offering to pay one-half of the amount at once, and to 
 give your note due in thirty days for the balance. 
 
 /o. Write to the Representative of your district in Con- 
 gress asking him to send you a copy of his latest speech 
 delivered in the House of Representatives. 
 
 11. Write a letter to The Ransom Mercantile Co., No. 78 
 Centre Street, Denver, Colo., ordering 10 cases of starch and 
 1 5 cases of Royal Blue blackberries to be shipped by freight. 
 In ordering goods the number of articles desired is written 
 in figures, not in words. 
 
 12. Write a letter to The Samuel J. Johnson Co., Birming- 
 ham, Ala., advising of the shipment by express of the dry 
 
26 A FIRST BOOK IN BUSINESS METHODS 
 
 goods ordered of your salesman, Mr. Strang. Thank them 
 for the order, and express the hope that you may receive 
 further orders from them in the near future. 
 
 ij Write out the following exercises, punctuating and 
 arranging each specimen correctly: 
 
 Chicago 111 Jan 17 1901 J F Lamborn Plainfield N J Dear Sir 
 We have your recent letter and beg leave to inform you that we 
 have turned the matter over to our attorneys Messrs Lamb & 
 Jackson of your city Yours truly James & Hackett 
 
 J S Slocum & Co Cotton Brokers New Orleans La No 76 Water 
 St Sept 7 1901 Mr B B Sweet Steamboat Rock Iowa Dear Sir We 
 have received your inquiry with regard to cotton and would 
 advise you to buy now as we are confident that the price will 
 advance materially in the near future kindly advise us by return 
 mail as to your decision and we will endeavor to do the best we 
 can for you Very truly yours J S Slocum & Co 
 
 14. Your friend, C. B. Stimpson, is about to go to Cin- 
 cinnati, O., to seek employment as a stenographer. Write a 
 letter of recommendation for him. To whom is such a letter 
 usually addressed? 
 
 75. Miss Alice Jones has been a successful teacher in 
 your school during the past year, and asks for a letter of 
 recommendation. Write the letter. 
 
 16. Mary Milligan has been employed as servant in your 
 father's family for the past two years and has given entire 
 satisfaction. Write a letter of recommendation for her. 
 
 77. You are a commission merchant in Detroit, and one of 
 your customers is putting up fruit which he ships to you in 
 a very unsatisfactory manner. Write him in regard to the 
 matter. 
 
LETTER WRITING 27 
 
 18. You are shipping produce to Smith Bros., commission 
 merchants, New York. They are slow in sending returns 
 of sales, and have made excessive charges for drayage, etc. 
 Write a polite but pointed letter to them asking for an expla- 
 nation. 
 
 ig. You buy a quantity of goods of a wholesale house. 
 Write the firm, calling their attention to the fact that the 
 goods are not as represented, and refuse to accept them. 
 
 Study the following models for friendly or business letters : 
 
 Form XV. 
 
 SOUTH BEND, IND., Nov. 14, 1901. 
 MR. GEORGE R. EDWARDS, 
 Centerville, 111. 
 
 FRIEND GEORGE: I learned only a few days ago that you are 
 living in Centerville, and take the first opportunity, since learning 
 your address, to write to you. I hope to receive from you in reply 
 a long letter telling me something of yourself and family. It 
 would be a great pleasure to me to see you all again. How have 
 you been all these long years? I hope you are prosperous and 
 happy. 
 
 I have just returned from a visit to our old home in Maine. 
 Many changes have occurred since we were there together. There 
 are, of course, the same hills and the same valleys ; and the same 
 little brook goes rippling along just as it used to do when we were 
 boys and played on its banks. But nearly all of our old friends and 
 schoolmates are gone ; some have died and some have emigrated 
 to the far West in search of new homes. Perhaps you may know 
 where some of them are ; if so, I should be glad to have you send 
 me their addresses so that I may write to them. 
 
 Awaiting the pleasure of your reply, I am as ever, 
 
 Your friend, 
 
 PERRY E. WILLIAMS. 
 
28 A FIRST BOOK IN BUSINESS METHODS 
 
 Form XVI. 
 
 EXCELSIOR SPRINGS, Mo., April 10, 1901. 
 MESSRS. BECKHAM, MCKNIGHT & Co., 
 
 Wholesale Grocers, Kansas City, Mo. 
 GENTLEMEN: 
 
 I have made arrangements to engage in the grocery 
 business, and shall open a new store at this place about May ist. 
 
 I have not yet purchased my stock of goods, and at the urgent 
 request of some of my friends, I have decided to write you to ask 
 what inducements you can offer me. If your prices and terms 
 are satisfactory, I shall be pleased to give you my order for goods. 
 
 I have about $2,000 cash, and am prepared to give good security 
 for any goods which I may wish to purchase in excess of this 
 
 amount. 
 
 Yours truly, 
 
 CHARLES A. MITCHELL. 
 
 Form XVII. 
 
 GRAND TRAVERSE, MICH., Nov. 20, 1901. 
 MESSRS. A. S. FROST & Co., 
 
 Chicago, 111. 
 GENTLEMEN : 
 
 I have shipped you by freight to-day, as per invoice 
 and bill of lading enclosed, twenty barrels of choice winter apples 
 which I wish you to sell for me on commission at the highest price 
 your market will afford. 
 
 These apples have been carefully packed, and as they are of 
 the best quality of winter fruit, I feel confident they will please 
 your customers. If this lot meets with ready sale at satisfactory 
 prices, I shall make another shipment soon. 
 
 Please keep me informed regarding the apple market in your 
 
 city, and oblige, 
 
 Yours truly, 
 
 PETER VAN ZEE. 
 
LETTER WRITING 29 
 
 Form XVIII. 
 
 TACOMA, WASH., Nov. 18, 1901. 
 
 MR. E. J. WOODBRIDGE, 
 
 City. 
 DEAR SIR : 
 
 Enclosed herewith I mail you a statement of your account 
 with me, showing a balance in my favor of $65.45. 
 
 I do not wish to unduly urge you for payment of this account, 
 but I am obliged to use all the funds which I can command, to 
 meet an obligation coming due on the 2ist inst, and if you can 
 accommodate me by payment of the account before that date, I 
 shall esteem it a great favor. 
 
 Kindly let me hear from you at your earliest convenience, and 
 oblige, 
 
 Yours truly, 
 
 W. M. BACON. 
 
 16. Telegrams. Many important business messages sent 
 by one person or firm to another go by telegraph and not by 
 mail, and most individuals find it necessary, occasionally, to 
 send personal messages by telegraph. 
 
 As the cost of sending a telegram depends upon the num- 
 ber of words in the message, they are usually made as brief as 
 possible. In sending a telegram to any part of the United 
 States or Canada the number of words in the body of the mes- 
 sage only are counted, no charge being made for the address 
 or signature. As many words as are necessary may be used 
 in giving the address of the person to whom the message is 
 sent. The body of the message may contain ten words, and 
 no deduction is made if the number is less; but if the body 
 of the message contains more than ten words, each additional 
 word is charged for. The rate of charges depends upon the 
 distance. 
 
30 A FIRST BOOK IN BUSINESS METHODS 
 
 17. Night Rates and Cable Messages. As the telegraph 
 lines are not so busy at night, messages may then be sent at 
 half rates. Business men frequently take advantage of these 
 low rates in sending messages long distances. These mes- 
 sages are delivered in the morning as soon as business offices 
 are opened, and often answer the purpose quite as well as the 
 full rate messages. For the convenience of those who wish 
 to take advantage of the night rates, a special blank is pro- 
 vided, usually printed in red. Night letters, also day letters, 
 of fifty words or more may now be sent at very low rates. 
 
 All messages which go by cable to foreign countries are 
 charged for according to the number of words, including the 
 address and signature. 
 
 1 8. Forms of Telegrams. Blanks are provided by the 
 telegraph companies for the convenience of persons sending 
 messages. In writing the message it is usually not necessary 
 to use any title, as " Mr." or " Messrs.," before the name of the 
 person or persons addressed, and no salutation is used, such as 
 " Dear Sir " or " Dear Madam " or " Gentlemen " ; neither is it 
 necessary to use any complimentary close, such as "Yours 
 truly" or " Respectfully yours." 
 
 Telegrams should not be made so brief for the sake of 
 saving a small expense that they cannot be understood, and 
 important telegrams should be repeated to make sure that 
 they have been sent correctly. 
 
 Example : Let us suppose that Mr. D. W. Simpson, who lives 
 in Jackson, Mich., wishes to telegraph to Messrs. Brown & Ham- 
 mond at Chicago, to send him at once, by express, ten bushels of 
 timothy seed. He would write a message something like that 
 shown in Form XIX. 
 
LETTER WRITING 31 
 
 Form XIX. 
 
 THE WESTERN UNION TELEGRAPH COMPANY 
 
 'INCORPORATED.) 
 
 THOS. T ECKERT, President and General Manager 
 MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE CONDITIONS PRINTED ON OUR FORM NUMBER TWO. 
 
 D the following me..age .ubject to the ) I / 
 
 term. printed on your form number two, } Y (J ^f^tl_ 
 which are h.reb,a*e<. to. ) ~7} 
 
 A Telegram 
 Form XX. 
 
 NIGHT LETTER 
 
 THE WESTERN UNION JTELEGRAPH COMPANY 
 
 25.000 OFFICES IN AMERICA CABLE SERVICE TO ALL THE WORLD 
 
 I '" I 
 
 SEND ..,..,. NIGHT LETTER 
 
 st> T,oul8. Sept. 1,1911 
 
 Rand UoEally & Co.. 
 
 Chicago. Ille. 
 
 Ship. Chicago Alton, fifty Dodge Elementary Geographies. 
 BSTonty Dodge Aflvanoed. one hunrtrefl ilaoe School Histories. twenty itoce 
 Primary, fifty Bueinese Method a. twenty-five Helton Primers. twenty 
 Book One, twenty-five Book Two. twenty -five Book Three Llghta ttf 
 Literature Readers. RuBh. chools open Monday. Back order items out 
 of stock. 
 
 P. H. Perry. 
 
 LPOSTAl COMPANY'S SYSTEM REACHES All IMPORTANT POINTS IN THE UNITED STATES AND BRITISH AMERICA, AND "- COMMERCIAL CABLES, TO/LL THE WORLD, 
 
 A Night Lettergram 
 
32 A FIRST BOOK IN BUSINESS METHODS 
 
 19. Telegraphic Codes. A telegraphic code is a list of 
 words, each one of which may mean a whole sentence or a 
 part of a sentence. Many business firms now use such codes 
 when sending messages by telegraph. It is, of course, neces- 
 sary that the sender and receiver of the message should each 
 have a copy of the code. The person who receives the tele- 
 gram takes each word separately, and by referring to the 
 code he can readily understand the meaning of the message. 
 There are several telegraphic codes in general use, one of 
 which is called the ABC telegraphic code ; another is called 
 the Western Union telegraphic code. 
 
 Example: Suppose S. E. Grove & Co. of Philadelphia, Pa., wish 
 to telegraph to Eldridge Bros., Chicago, this message, " Goods are 
 not same as samples. What discount allowed for cash? Cancel 
 all contracts until further advice.'* If they should use the ABC 
 code in transmitting the message, they would write the message 
 as shown by the form below : 
 
 Form XXI. 
 
 PHILADELPHIA, PA., Oct. 28, 1901. 
 ELDRIDGE BROS., 
 
 Chicago, 111. 
 Glossary, Dismember, Calabrian. 
 
 S. E. JOHNSON & Co. 
 
 The meaning of these words, when translated by the ABC 
 telegraphic code, is as follows . 
 
 " Glossary," Goods are not same as samples. 
 
 " Dismember," What discount allowed for cash ? 
 
 " Calabrian," Cancel all contracts until further advice. 
 
 It will readily be seen that by this method much informa- 
 tion may be transmitted by telegraph at a small cost. These 
 codes are generally used in telegraphing to foreign countries 
 
LETTER WRITING 33 
 
 EXERCISES 
 
 /. Write a telegram not exceeding ten words, ordering 
 3 barrels of granulated sugar of W. M. Hoyt & Co., Chicago, 
 to be shipped at once by freight. 
 
 2. Write a telegram not exceeding ten words to J. R. 
 Thompson, Battle Creek, Mich., asking him to meet you at 
 Battle Creek at the arrival of the three o'clock train east. 
 
 j. Write a telegram, as brief as possible, to Reid, Murdoch 
 & Co., Chicago, informing them that the goods ordered ten 
 days ago have not yet arrived. Ask them why. 
 
 ^. Telegraph George W. Smith, Milwaukee, c/o Pfister 
 House, that his store burned this morning, and ask him to 
 come home at once. 
 
 5. You have ordered of Hibbard, Spencer, Bartlett & Co., 
 Chicago, 10 kegs of nails. Telegraph them to send 15 kegs 
 instead of 10. Make the telegram as brief as possible. 
 
 6. The Thomas J. Eckert Co. of San Jose, Cal., order by 
 telegraph from Sampson, Lahiff & Co., Sioux Falls, S. D., 100 
 bu. timothy seed and 500 bu. clover seed, to be sent by freight. 
 Write the telegram and do not let it exceed ten words. 
 
 7. Telegraph Bruce Davis, No. 741 Center Street, Muncie, 
 Ind., that you cannot fill his order for beans at the price 
 offered, 84C., and advise him that you will explain by letter. 
 Write the letter, confirming your telegram, and give him full 
 explanation. 
 
 CAUTION. Remember that in telegraphing, all figures are 
 counted. If the number ten were expressed in figures, 10 ^vould be 
 counted as two ^vords ; 105 would be counted as three words. 
 Therefore it is better to write out in full all words expressing 
 numbers. 
 
CHAPTER II. 
 
 BILLS, INVOICES, STATEMENTS OF ACCOUNT, 
 RECEIPTS 
 
 20. Bills. A bill is an itemized account of goods bought 
 or work performed. It should contain the names of the parties 
 buying and selling, the date and place of sale, the kind, quan- 
 tity, and price of the goods sold, and the terms of sale. 
 
 If a merchant sells a quantity of goods, a bill is usually made 
 out, giving a list of the articles sold and the price, and if pay- 
 ment is made for the goods, the seller writes at the bottom of 
 the bill, " Paid," or " Received payment," and signs his name. 
 If payment is received by a clerk, he "receipts the bill" by 
 signing the proprietor's name, followed by his own name, as 
 in the following form : 
 
 Form XXII. 
 BILL OF GOODS 
 
 CINCINNATI, O., Sept. i, 1901. 
 MR. J. P. WILSON 
 
 Bought of R. W. Hill & Co. 
 Ibs. Coffee @ 20 cts. 
 Ibs. Canned Peaches @ 10 cts. 
 
 $45-3 
 Received payment. 
 
 R. W. HILL & Co., 
 
 per G. ALLEN. 
 
BILLS, INVOICES. STATEMENTS, RECEIPTS 35 
 
 21. Bills for Labor or Account. In making- out a bill for 
 work performed or for an account which has been running for 
 some time, the heading of the bill is somewhat different from 
 that for goods sold. 
 
 Example : Suppose John D. King has been at work for C. W. 
 Fennel 3^ days at $1.50 per day and has furnished 20 Ibs. of nails 
 at 3% cts. per Ib. and 385 ft. of lumber at $14.50 per 1,000 ft. He 
 would make out a bill something like the following : 
 
 Form XXIII. 
 
 CAMDEN, N. J., Aug. 9, 1901. 
 C. W. FENNEL 
 
 To JOHN D. KING, Dr. 
 
 To 3Y<2 days' labor @ fi.jo fS- 2 S 
 
 " 20 Ibs. Nails @ j% cts. .70 
 
 " 385 ft- Lumber @ $14.50 5.58 
 
 Should John D. King wish to sell the account to O. D. Snyder, 
 it would be necessary to assign the account by writing the assign- 
 ment across the back. The assignment would be as shown in the 
 following form : 
 
 Form XXIV. 
 
 In consideration of - dollars, the receipt of which is hereby 
 acknowledged, 1 hereby sell and assign to O. D. Snyder, the within 
 account ', which is justly due from the within named C. W. Fennel, 
 and I hereby authorize the said O. D. Snyder to collect the same. 
 
 CAMDEN, N. J., Aug. 9, 1901. JOHN D. KING. 
 
 22. Invoices. When a customer buys a quantity of goods 
 from a wholesale house, the firm of whom the goods are pur- 
 chased makes out a list of the various goods bought and the 
 price of each kind, and gives it to the buyer. This itemized 
 
36 A FIRST BOOK IN BUSINESS METHODS 
 
 statement is called by the buyer an invoice, and by the seller 
 a bill. It has, however, become quite customary for both 
 buyer and seller to call it an invoice. An invoice, then, is an 
 itemized statement of goods bought of a manufacturer or 
 dealer, with the place and date of sale, the names of the 
 parties buying and selling, the quantities and prices of the 
 goods, and the terms of sale. 
 
 The first double column to the right of the invoice is the 
 column in which are placed the various amounts showing the 
 cost of the different articles sold, and the carrying out of the 
 cost into this double column is called extension, or extending 
 the amounts. In finding the various amounts of an invoice 
 or bill it frequently occurs that the result involves the frac- 
 tional part of a cent. In such cases it is customary to drop 
 the fractional part of a cent if it is less than one-half, and if 
 it is more than one-half, to call it one cent. If the results 
 obtained contain more than one half cent, the first is called a 
 whole cent and the next half cent is dropped. 
 
 The forms given on page 37 are common forms of invoices 
 or bills. If there are any discounts, ( 24 and 25) they are 
 entered in the first double column and the difference or 
 amount of the bill is carried out into the last column. 
 
 23. Corrected and Duplicate Invoices. Sometimes it is 
 found after an invoice has been sent to the purchaser of the 
 goods that there is an error in the amount shown by the 
 invoice, or the terms of discount are incorrect. It is then 
 necessary to make out a new invoice, mark it "Corrected 
 Invoice/' and send it to him. 
 
 If an invoice which has been sent to a purchaser of goods 
 does not reach him, a new invoice exactly like the first should 
 be made out and at the bottom should be noted that this is 
 
BILLS, INVOICES, STATEMENTS, RECEIPTS 37 
 
 Form XXV. 
 
 JOBBCRS OF GLASS. 
 
 , 3ASH & BLINDS, 
 
 HARDWOOD INTERIOR FIMISH. 
 
 ^4/i Invoice 
 Form XXVI. 
 
 TERMS 
 
 BOUGHT OF 
 
 Ht4SBfll 
 
 S CENTS PER GALLON NOS226,228,230,"NTNETEENTOST. 
 
 - - -OWAHCf S MUST Bt UADf WTHIH five OYS AFTfK KKCIfl Of t 
 HOTPtIO WHtMOUl 
 
 Invoice with Terms of Discount noted 
 
38 A FIRST BOOK IN BUSINESS METHODS 
 
 EDWAROSTrws 
 
 Kendallville, Ind. 
 
 
 2 
 
 d.oz 
 
 Wheelbarrows *14.50 
 
 29 
 
 00 
 
 
 
 
 1 
 
 
 8 ft.. Stand Step Ladder 
 
 14 
 
 no 
 
 
 
 
 >.00 
 
 ITiS 
 
 Sheet Zinc fi .08 
 
 16 
 
 00 
 
 
 
 
 
 
 
 sq_ 
 
 00 
 
 
 
 
 
 
 Less 5jJ trade discount 
 
 2 
 
 95 
 
 
 
 
 
 
 
 
 
 &56 
 
 )5 
 
 
 
 
 
 
 
 
 
 An Invoice with Terms of Discount noted 
 
 a " Duplicate Invoice." This invoice should be sent him 
 to take the place of the one which was lost. 
 
 When a bill or invoice is receipted by the seller, if there 
 is not sufficient room to sign his name at the foot of the 
 invoice, he may write it on the margin of the sheet or across 
 its face. 
 
 24. Trade Discount. In business transactions, reductions 
 or allowances are sometimes made from the amount of an 
 account, a debt, or the face of a note, and these reductions are 
 called discounts. Manufacturers and wholesale dealers some- 
 times allow to their best customers, and to those who buy in 
 large quantities, a discount from the amount of the bill, and 
 this is called trade discount. 
 
BILLS, INVOICES, STATEMENTS, RECEIPTS 39 
 
 Sometimes two or more discounts are given in succession. 
 
 Example: A merchant buys a bill of goods amounting to 
 $150 and is allowed a discount of 10$ and 5$ off from the list 
 price. This does not mean a reduction of 15$ of the amount of 
 
 Form XXVIII. 
 
 We render statements for bills, DUE AND NOT DUE, as per our Ledger, on the first ol 
 each month. This gives opportunity for the correction of errors and in nut a demand 
 for bilU NOT DUE. 
 
 MONTHLY STATEMENT 
 
 IN ACCOUNT WITH EAGLE PENCIL CO . 
 
 Office and Salesroom, 377 and 379 Broadway, 
 
 Statement of Account showing several Debits and no Credit 
 
40 A FIRST BOOK IN BUSINESS METHODS 
 
 Form XXIX. 
 
 PEORIA. lLL.. 
 
 TO THE F. H. PFEIFFER CROCKERY Co., DR. 
 
 326 SOUTH ADAMS STREET 
 
 CROCKERY. LAMPS AND GLASSWARE. 
 
 ^c 
 
 & > 6-0 
 
 Statement showing one Debit and one Credit 
 
 the bill, but it means a reduction of 10$ from $150 and 5$ of 
 the remainder after deducting the amount of the first discount. 
 In the foregoing example, io# of $150 would be $15.00. Sub- 
 tracting this from the amount of the bill gives us the new 
 amount of $135, the amount the merchant is to pay if but one 
 discount is allowed. But there is a second discount of 5$, and 5$ 
 of $135 is $6.75. Now if we subtract $6.75 from $135 we have 
 $128.25, the amount the merchant is to pay, unless he is entitled 
 to a cash discount also. 
 
BILLS, INVOICES, STATEMENTS, RECEIPTS 41 
 
 Form XXX. 
 
 TO THE F. H. PFEIFFER CROCKERY Co,, DR. 
 
 326 SOUTH ADAMS STREET. 
 
 CROCKERY, LAMPS AND GLASSWARE. 
 
 we ftand jw< S(am.t /or 
 Kat htarwj from you tu 
 
 prompt rtmittaM* 
 
 . and (nit you unU tonor tame. We prefer UuA you mutt 
 
 Statement showing one Debit "with several Credits 
 
 We would proceed in the same manner as in the preceding 
 example if there were more than two discounts. Merchants 
 establish a selling price for their goods which they call the 
 list price. As circumstances arise and the prices of their 
 goods have to be changed they change the price to their 
 customers by changing the discounts. Thus, to one not 
 acquainted with the methods of marking, the prices of one 
 
42 A FIRST BOOK IN BUSINESS METHODS 
 
 TOTCMtNT. 
 
 Form XXXI. 
 
 PEORIA. ILL. 
 
 TO THE F. H. PFEIFFER CROCKERY Co,, DR. 
 
 326 SOUTH ADAMS STREET. 
 
 CROCKERY. LAMPS AND GLASSWARE. 
 
 t be prepaid. and all cbecki on conalrj bank! matt Include 3 
 , or read " With Exchange " Our bill* arc payable In Peoria 
 
 35 etott, COM o 
 
 ^ 
 
 . /LV (^/ 
 
 a? 
 
 a* -.a. 
 
 3.7*- 
 
 ?6 
 
 About m hand you Statement for Atamnt peat dw. and rejwf^ n prompt t 
 
 e. V<tf h,**y from you 6y W 4^+**-' / mil make Draft at 
 
 if/CKS J ' siVU. an<7r^-Jw ivtU ftonor ionx. Ife prytr (Aa jwu remit 
 
 Statement showing several Debits and one Credit 
 
 man's goods might appear to be vastly more than those of 
 another, while if he should take into account the discounts, 
 he would find that they were very nearly the same. 
 
 25. Cash Discount. Most business houses give their cus- 
 tomers 30, 60, or 90 days in which to pay their bills, and 
 allow them a certain percentage of the total or gross amount 
 if the bills are paid before they are due. For instance, if the 
 
BILLS, INVOICES, STATEMENTS, RECEIPTS 43 
 
 ISO-*' 
 
 TO THE F. H. PFEIFFER CROCKERY Co., DR. 
 
 326 SOUTH ADAMS STREET 
 
 CROCKERY. LAMPS AND GLASSWARE. 
 
 Above m hand you Statement for Accounant due, and request a prompt remittance 
 
 and tnut you wiU honor tame. We prefer that you remit 
 
 Statement showing several Debits and several Credits 
 
 whole amount be due in 30 days a wholesaler may allow 2,% 
 off from this total amount if paid in 10 days. 
 
 In Form XXXIII. you will notice that the terms given are 
 30 days net or \% off in 10 days, which means that if the cus- 
 tomers wait 30 days before paying, they must pay Scarbrough 
 & Hicks $62.50, but if they pay within 10 days' time, they will 
 be allowed to subtract \% of the amount, or 63 cents, and 
 
44 A FIRST BOOK IN BUSINESS METHODS 
 
 A Bill showing Terms of Discount 
 
 remit the balance, or $61.87. These terms of discount are 
 often written as follows: 2/10, 1/30, or 60 net, which means, 
 of course, that the buyer will be allowed a discount of 2% if 
 he pays within 10 days, and a discount of \%'\i he pays within 
 30 days, but if he waits until the expiration of the 60 days he 
 would not be entitled to any discount, but must pay the whole 
 amount of the bill. 
 
BILLS, INVOICES, STATEMENTS, RECEIPTS 45 
 
 Form XXXIV. 
 
 TO THE F, H. PFEIFFER CROCKERY Co., DR. 
 
 326 SOUTH ADAMS STREET 
 
 CROCKERY. LAMPS AND GLASSWARE. 
 
 part due, and Truest a prompt rtmittante 
 U^i^' *% mH mate Draft at 
 and trust y^J/foi Aonor same. We prefer that you remit. 
 
 Statement of Account Paid 
 
 26. Statements of Account. A statement of account is quite 
 a different thing from an invoice or bill. It shows all the 
 debits and credits of an account as they appear on the books 
 of the seller. If an invoice was made out and delivered to 
 the purchaser when the goods were bought, it is not necessary 
 to make an itemized statement, but simply to give the amount 
 of each purchase and the date "As -per bill rendered." 
 
46 A FIRST BOOK IN BUSINESS METHODS 
 
 Sometimes when goods are sold on account by retail estab- 
 lishments, no bill is made out until the end of the month. In 
 such cases an itemized statement should be rendered, giving 
 a list of all the articles sold. In the retail business these 
 statements are usually made out at the end of each month, 
 and in the wholesale trade, statements are made at the expi- 
 ration of the term of credit. Usually these terms of credit 
 are 30, 60, or 90 days, and sometimes four or five months. 
 
 When a statement is paid, it should be receipted the same 
 as an invoice or bill, and returned to the person who paid it. 
 
 Form XXXV. 
 
 CREDIT MEMORANDUM 
 
 Pittsburgh, 
 
 Account w.tb Armstrong Cork Company, 
 
 Corner Twenty-fourth and Railroad Streets. 
 
 *, 
 
 at, 
 
 U 
 
 A Credit Memorandum 
 
 27. Credit Memorandum. Sometimes when goods are 
 ordered, they do not prove satisfactory to the purchaser and 
 they are returned, or the price is higher than he expected to 
 pay, or for some other reason a rebate or deduction is made to 
 
BILLS, INVOICES, STATEMENTS, RECEIPTS 47 
 
 the purchaser. In such case a memorandum of credit is made 
 out by the party selling the goods and sent to the purchaser, 
 showing how much credit or reduction will be allowed to him. 
 This memorandum of credit is a statement quite like an 
 invoice in form, except that it shows a credit instead of a 
 debit. Usually, but not always, it is printed in red or green, 
 or some color different from that of the invoice. 
 
 28. Receipts. When one person gives another money or 
 other valuables for goods bought or labor performed, it is 
 customary for the receiver of these valuables to give to the 
 payer a written statement showing that the debt has been 
 paid. This written statement is called a receipt or voucher. A 
 receipt should contain the name of the place where written, 
 the date, the names of the persons interested, and should state 
 for what the valuable consideration was given. Blanks for 
 receipts may be obtained at any stationery store. 
 
 Care should be taken to preserve all receipts of whatever 
 kind, for if there were no receipt or other evidence to show 
 that the debt had been paid, it would perhaps be necessary to 
 pay the account or obligation a second time. 
 
 Form XXXVI. 
 
 RECEIPT TO APPLY ON ACCOUNT 
 
 $25.00 OGDEN, UTAH, July o, 1902. 
 
 Received of Frank Brown, twenty-five dollars, to apply on his 
 account. PETER MORRIS. 
 
 Form XXXVII. 
 
 RECEIPT IN FULL OF ACCOUNT 
 
 $4.2.35 YORK, NEB., June 25, 1002. 
 
 Received of J. W. Thompson, forty-two and 35-100 dollars, in 
 full of account to date. E. P. WOODMAN. 
 
48 A FIRST BOOK IN BUSINESS METHODS 
 
 Form XXXVIII. 
 RECEIPT FOR MERCHANDISE ON ACCOUNT 
 
 $12.60 LAUREL, DEL., March 2, 1002. 
 
 Received of George P. Simpson, forty -two bushels of oats at joe. 
 per bushel, to apply on account. R. P. WATERMAN. 
 
 Form XXXIX. 
 
 RECEIPT IN FULL OF ALL DEMANDS 
 
 $345-35 NORFOLK, VA., Nov. 7, 1001. 
 
 Received of E. Norton, three hundred and forty-five and 3 5-100 
 dollars, in full of all demands to date. WM. DICKINSON. 
 
 Form XL. 
 
 RECEIPT FOR HOUSE RENT 
 
 $12.50 HELENA, MONT., April 30, 1001. 
 
 Received of Samuel Hopkins, twelve and 50-100 dollars for rent 
 of house No. op Grove Street, for one month ending April 30, 1001. 
 
 MRS. SARAH SMITH. 
 
 Form XLI. 
 
 RECEIPT BY PERSON WHO CANNOT WRITE 
 
 $23.00 SHELBY, N. C., July 21, 1001. 
 
 Received of T. G. Benson, twenty -three dollars, in full of all 
 demands to date. His 
 
 Witness: J. W. BLUM. JOHN X SMITH. 
 
 S. E. SANGREN. mark 
 
 NOTE. All receipts and all other documents signed by a person who can- 
 not write should also be signed by witnesses. 
 
BILLS, INVOICES, STATEMENTS, RECEIPTS 49 
 
 Form XLII. 
 
 RECEIPT FOR PAYMENT OF ACCOUNT BY ONE PERSON FOR ANOTHER 
 
 $15.00 CLINTON, IND., /#;/. 5, 1002. 
 
 Received of A. J. Hill, fifteen dollars, to apply on the account of 
 Hiram Cooper. SMITH MANUFACTURING Co., 
 
 Per D. H. MOORE. 
 
 Form XLIII. 
 
 RECEIPT FOR PART PAYMENT ON NOTE 
 
 $100.00 ST. Louis, Mo., Dec. ij, 1001. 
 
 Received of W. O. Billings, one hundred dollars, to apply on his 
 note of three hundred dollars in my favor, dated May 3, ipo. 
 
 H. C. HAMILTON. 
 
 NOTE. The amount of the payment on a note should also be indorsed on 
 the back of the note. (See chapter on Promissory Notes.) 
 
 Form XLIV. 
 RECEIPT FOR MONEY PAID BY ADMINISTRATOR OF AN ESTATE 
 
 $4.50 HARTFORD, CONN., Jan. 2, 1002. 
 
 Received of R. W. Brown, administrator of the estate of H. J. 
 Cole, deceased, four and 50-100 dollars, for services as clerk at 
 auction of property belonging to said estate. A. P. SIMONDS. 
 
 Form XLV. 
 
 RECEIPT FOR MONEY ADVANCED ON CONTRACT 
 
 $25.00 ATLANTIC CITY, N. J., June 5, 1002. 
 
 Received of Homer B. Sparr, twenty -five dollars, as part payment 
 on contract dated April 14., 1901, for furnishing 100 perch of stone 
 at $ i .00 per perch. F. W. TABOR. 
 
50 A FIRST BOOK IN BUSINESS METHODS 
 
 Form XLVI. 
 
 RECEIPT FOR LOST OR STOLEN NOTE 
 
 $125.00 SAN FRANCISCO, CAL., August 8, 1001. 
 
 Received of James R. Powers, one hundred and twenty-five 
 dollars, in full payment of his note in my favor, dated July 8, 1000, 
 without interest. 
 
 Said note has been lost or stolen. G. H. PARKER. 
 
 NOTE. When payment is received for a note which has been lost or stolen, 
 it is usually customary to give a bond, called an indemnity bond. (See form 
 in chapter on Promissory Notes.) 
 
 29. Orders. Orders in the commercial sense mean direc- 
 tions or commands by one person on another to give to the 
 party holding the order that which is mentioned therein. 
 
 The following are common forms of orders : 
 
 Form XLVII. 
 ORDINARY FORM OF ORDER 
 
 DOWAGIAC, MICH., June 6, 1002. 
 MR. W. J. BURDICK : 
 
 Please deliver to W. Buckingham, goods from your store amount- 
 ing to fifteen dollars, and charge to my account. 
 
 L. THORNTON. 
 
 Form XLVIII. 
 
 ORDER PAYABLE IN CASH 
 $25.00 
 
 MR. JOHN C. SMITH : 
 
 Please pay to G. D. Williams, twenty -five dollars, and charge the 
 
 same to my account. 
 
 G. W. POWERS. 
 
BILLS, INVOICES, STATEMENTS, RECEIPTS 51 
 
 From XLIX. 
 
 FORM OF DUE BILL 
 
 $9-75 
 
 Due C. W. Pennell, nine and 75-100 dollars in merchandise 
 from my store. 
 
 O. D. SNYDER. 
 
 QUESTIONS AND EXERCISES 
 
 /. What is the difference, if any, between an invoice and 
 a bill? 
 
 2. What is the difference between an invoice and a state- 
 ment of account ? 
 
 j. If a man comes into your wholesale store and buys a 
 bill of goods, should you give him an invoice or should you 
 make for him a statement of account ? 
 
 4. You sell a bill of goods to R. W. Powers, Oshkosh, 
 Wis., and make out an invoice which you send him, showing 
 the amount of the bill to be $123.50. You afterward discover 
 that you have made an error and the amount should have 
 been $125.50. What would you do? 
 
 5. You sell a bill of goods to D. W. King & Co. of Toledo, 
 O., and send them an invoice of the same. At the expiration 
 of ten days you receive a letter from them stating that no 
 invoice was received from you. What would you do ? 
 
 6. You sell a bill of goods to G. D. Sturgis, Osage, Iowa, 
 amounting to $534.58, due in thirty days. At the end of that 
 time he has not remitted for the goods. Send him a state- 
 ment of account. Write him a letter .dated ten days later, 
 notifying him that his account is past due and make an 
 urgent request for its payment. Ten days later telegraph 
 him that you are greatly in need of the money and must 
 have it. Make the message as brief as possible. 
 
52 A FIRST BOOK IN BUSINESS METHODS 
 
 7. What is a credit memorandum ? 
 
 & J. W. White of Manistee, Mich., buys a quantity of 
 groceries of the W. M. Hoyt Co., Chicago, and from one 
 barrel of syrup, five gallons leak out, worth 33^ cents per 
 gallon. Mr. White asks for a memorandum of credit cover- 
 ing the amount of leakage. Write his letter to W. M. Hoyt 
 Co. Make out the credit memorandum which the W. M. 
 Hoyt Co. sends him. 
 
 Q. Messrs. Shafter & Shafter of Salt Lake City, Utah, 
 order of the Jackson & Steck Mnfg. Co. of Denver, Colo., 20 
 disk harrows to be sent by freight. Write the letter order- 
 ing the goods. Make out the invoice. Trade discount, \o% 
 and 5$. Terms of sale, 2/10, 1/30, net 60. 
 
CHAPTER III. 
 
 BANKING 
 
 30. Uses of Banks. Banks are an absolute necessity to 
 the modern business man. Usually he does not have the 
 conveniences for the safe keeping of money that banks have, 
 and instead of paying for the goods which he buys, and the 
 bills which he owes, in cash, he deposits his cash in the bank 
 and pays his bills by checks. 
 
 There are many business men who find it necessary at 
 times to borrow money to carry on their business. If a man's 
 business reputation is good, or if he can give good security 
 for payment of the money at the expiration of the term of 
 credit, the bank will loan him the necessary amount, and he 
 will thereby be enabled to carry on a much larger and more 
 successful business than would otherwise be possible. Banks 
 make collections of commercial paper, issue foreign and do- 
 mestic bills of exchange, and loan money. 
 
 There is no branch of business which is carried on more 
 systematically than that of banking. Every one who has an 
 income or a salary sufficient to enable him to make even a 
 small saving, should open a bank account. By so doing he not 
 only becomes accustomed to saving, but by keeping an account 
 with a bank he acquires habits of promptness and accuracy 
 which render him more efficient and successful in business. 
 
 [53] 
 
54 A FIRST BOOK IN BUSINESS METHODS 
 
 31. Savings Banks. Banks which receive on deposit small 
 sums of money and return the same to depositors with a mod- 
 erate rate of interest, are called savings banks. Some savings 
 banks will receive on deposit for safe keeping any sum of 
 money from 5 cents up to $1,000, while others prefer not 
 to receive sums of less than $1.00 at a time. These sums are 
 generally the savings of laborers and those who have only a 
 small amount to deposit at a time, but they soon begin to 
 draw interest, and if allowed to remain in the bank, with a 
 little more added each month, the deposit rapidly increases in 
 amount from year to year. Fractional parts of a dollar are 
 not usually reckoned as drawing any interest, and some banks 
 do not allow interest on a deposit until it amounts to $3.00 or 
 over. 
 
 32. Rates of Interest and Dates of Reckoning. The 
 
 rate of interest varies somewhat with the different banks, but 
 usually it is from 3 to 4 per cent. Each bank, too, has its own 
 rules as to the dates at which calculation of interest is made 
 on the various amounts which the depositors have to their 
 credit. 
 
 If the dates for reckoning interest are January ist, April 
 ist, July ist, and October ist, money deposited March 3ist 
 would begin to draw interest the next day, but if deposited 
 April 2d, it would not begin to draw interest until July ist. 
 This, however, should not deter one from making a deposit at 
 any time, for the money will be in a place of safety and will 
 commence drawing interest from the beginning of the next 
 interest term. 
 
 If a depositor withdraws his money from the bank before 
 the close of any interest term, he is not usually allowed inter- 
 est for any part of that term, but the rules of different banks 
 
BANKING 55 
 
 vary in reference to these matters. In some banks, money 
 deposited January loth would draw interest from January ist 
 and for every month thereafter if left for three months or 
 longer. In other banks the interest is reckoned on all 
 moneys that have been in three or more months, even if the 
 depositor has withdrawn his money before the regular inter- 
 est period, and the same is placed to the credit of his account. 
 If he opens his account again, he has this balance to his 
 credit. 
 
 33. Deposit Book. Each depositor is furnished with a 
 book in which he is given credit for his deposits from time to 
 time, and also for whatever interest his money has earned at 
 the end of the term of credit. 
 
 If a depositor wishes to draw out his money, the deposit 
 book must be presented to the paying teller by either the 
 depositor himself or some duly authorized person. The pay- 
 ing teller makes an entry in the book showing the amount 
 withdrawn, and the book is then returned to the depositor. 
 When he has drawn out the whole of his deposit the bank 
 keeps the book. 
 
 A depositor who places his money in a savings bank can- 
 not withdraw it by check. A general rule with savings banks 
 is, that if the bank so desires, sixty days' notice must be given 
 before the withdrawal of money, but unless there is a "run 
 on the bank" or some unusual disturbance of the money mar- 
 ket, it is paid promptly on request. 
 
 34. Commercial Deposit Banks. A commercial deposit bank 
 is one from which the depositor may check out his funds at 
 pleasure, but no interest is allowed on the money while in 
 the bank unless his balance is kept above a certain figure. 
 
56 A FIRST BOOK IN BUSINESS METHODS 
 
 Many savings banks receive commercial deposits, and many 
 commercial deposit banks receive accounts for savings. 
 
 Banks usually require some evidence of the character and 
 integrity of a depositor before opening an account with him. 
 Generally it is only necessary that he be introduced by some 
 person or firm with whom the banker is acquainted. A depos- 
 itor who opens an account with a bank ought not to expect 
 that the bank will issue bills of exchange to him or cash his 
 drafts without charge. They sometimes do this for cus- 
 tomers who are heavy depositors or who borrow large sums of 
 money from them, but they do it only because the patronage 
 of such depositors pays them for this extra work. The cus- 
 tomer who deposits only a small amount in the bank and 
 withdraws it by checks within a few days ought to expect to 
 pay something to the banker for the services rendered. Some 
 banks make charges for deposits of this kind. 
 
 35. Records of Deposits. A depositor should keep a 
 careful record of his dealings with the bank, so that he will 
 always know the state of his account and avoid overdrawing. 
 
 When opening an account with a bank, a depositor is 
 required to leave his autograph in a record book or upon a 
 signature card, authorizing the bank to accept said signature 
 in paying out the depositor's moneys. The bank then pre- 
 sents the depositor with some deposit tickets, or deposit slips, 
 as they are sometimes called, a pass book or bank book, and a 
 book of blank checks. 
 
 The deposit ticket is a blank form for the depositor to fill out 
 when he makes his deposit. It shows who the depositor is, 
 and the date and kind of funds deposited, whether checks, 
 specie, or currency. 
 
 In filling out the deposit slip, the bills, specie, and checks 
 
BANKING 
 
 57 
 
 should be entered separately as shown in the accompanying 
 form. When there are several checks to be deposited, they 
 should be arranged in the order in which they have been 
 entered on the deposit slip. The depositor should foot up the 
 
 . Form L. 
 
 METROPOLITAN NATIONAL BANK 
 
 OF CHICAGO 
 
 DtfosiUd for MCOK* of 
 
 s* 
 
 0V 
 
 
 
 A Bank Deposit Slip 
 
 various amounts, instead of leaving it for the receiving teller 
 at the bank to do. When the deposit slip is ready, it should 
 be taken to the receiving teller with the funds which are to be 
 deposited, and he will enter the amount of the deposit in the 
 bank or pass book, and return it, after he has verified the 
 sums named in the deposit slip. 
 
A FIRST BOOK IN BUSINESS METHODS 
 
 36. The Bank Book. The bank book is a small book that 
 can be conveniently carried in the pocket, in which the 
 banker gives the depositor credit for the amounts of money 
 which he deposits at various times. This bank book is the 
 only receipt which the depositor has for the money which he 
 has left in the hands of the banker. At the end of each month 
 a complete statement of each depositor's account is given him. 
 Usually the banker enters in the bank book the amount of the 
 checks which have been paid and deducts this amount from 
 the total of the credits, the balance showing how much is 
 still in the bank to the credit of the depositor. 
 
 Some banks enter a list of the checks in the bank book, 
 while others list the checks on a separate blank and then 
 enter the whole amount only, in the book. 
 
 37. The Check Book. The check book is a book of blank 
 checks to be used by the depositor whenever he wishes to 
 draw money from the bank. Most check books are so 
 arranged that the- checks may be torn out, leaving a stub in 
 the book which shows in whose favor the check is drawn, the 
 amount, the number, the date, and for what purpose the check 
 is used. (See Form LI.) 
 
 Form LI. 
 
 New Lotnrop. Mien.. 
 
 Bank of New Lothrop 
 
 -Dollars. 
 
 Form for a Check as if appears on the Check Book 
 
BANKING 59 
 
 38. Directions for Writing Checks. A check is a written 
 order on a bank directing that a certain amount of money 
 be paid to some person named in the check, or to his order, 
 and signed by a depositor. No special form of wording is 
 
 Form LII. 
 
 ^PEOPLES BANKING COMPANY 
 
 tjg2tf^u~ 
 
 <? 
 
 Checks Payable to Cash 
 
 necessary. The writing in the body of the check should 
 exactly agree with the figures indicating the amount for 
 which the check is drawn. 
 
 The person who draws the check is called the drawer or 
 maker, and the person to whom the money is to be paid is 
 
60 A FIRST BOOK IN BUSINESS METHODS 
 
 called the payee. In the first check, Form LIIL, Arthur S. 
 Norton is the maker and Thomas W. Miller the payee. 
 
 i . It is best that the stub be filled out first ; otherwise it 
 may be forgotten and the maker would have no record of the 
 check. 
 
 Form LIII. 
 
 Checks for Amount Less than One Dollar 
 
 2. Care should be taken to fill out the stub in exact con- 
 formity with the check. 
 
 3. Should the person having money deposited in a bank 
 wish to draw out some for his own use, he makes the check 
 payable to " Cash," or " Myself," as shown in Form LII. 
 
BANKING 61 
 
 4. Sometimes it is necessary to write a check for a smaller 
 amount than a dollar. In that case the words should be 
 written out in full as in Form LIIL, and the word "Dollars" 
 erased by drawing a pen through it. 
 
 5. If the drawer of the check desires to do so, he may 
 specify in the check that for which it is given, as in Form 
 LIV. 
 
 Form LIV. 
 
 Check Specifying for what Money is to be Used 
 
 6. The amount of a check should be written twice once 
 in figures and once in words. 
 
 7. The check should be carefully written so that there 
 may be no question in reference to the amount or date. 
 
 8. In writing a check or note, always begin at the extreme 
 left and draw lines in the blank space after the amount in 
 figures or letters, so that no one can fraudulently fill in the 
 blank spaces and make the check or note call for a larger 
 amount than it should. If the amount of the check is 
 " raised " by the skillful filling up of the blank spaces, and the 
 signature is genuine, the bank cannot be blamed for making 
 payment, and the loss will properly fall on the drawer of the 
 check, because it came from his negligence. 
 
62 A FIRST BOOK IN BUSINESS METHODS 
 
 If a check for $5.00 were drawn and a blank space left as in 
 Form LV., the amount of the check could be easily " raised " 
 to a much larger amount. 
 
 Form LV. 
 
 S. 
 
 CD 
 
 CD 
 
 Union Stock Yards. 
 
 ih Afwnaliank 0f 
 
 Checks Incorrectly Drawn 
 
 If the blank spaces were filled in as shown in Form LVL, 
 it would be very difficult to change either the writing or the 
 figures without detection. 
 
 As an added precaution against alteration, machines are 
 
BANKING 
 
 Form LVI. 
 
 r WiNNEBAGO NATIONAL BANK 
 ROCKFORD, ILL 
 
 \^^. sC~/ ^^ZZ-irT&tj&^^&t/* 
 
 Checks Correctly Drawn 
 
64 A FIRST BOOK IN BUSINESS METHODS 
 
 sometimes used to stamp or cut out the figures showing the 
 amount of the check. 
 
 If the amount in figures does not correspond with the 
 amount in writing, the written amount will be considered 
 correct. 
 
 9. Some checks are made payable to " bearer," and some 
 to the "order" of the person in whose name they are drawn. 
 If they are made payable to the order of the payee, he must 
 write his name on the back of the check before he can get 
 the money on it, or, if he wishes, he may make the check 
 payable to some other person, by indorsing the check as in 
 Form LVII. 
 
 Form LVII. 
 
 An Indorsed Check 
 
 39. The Indorsement. The word " indorse " comes from 
 two Latin words, in and dorsum, which mean, when com- 
 bined, on the back. Then to indorse means to write on the 
 back, and the purpose of indorsement is to transfer the own- 
 ership of the paper so indorsed. There are several different 
 kinds of indorsement. 
 
BANKING 65 
 
 Example: In the form of indorsement given in Form LVII, 
 A. J. Williams transfers the ownership of the check by indorsing 
 it to J. B. Clay, who in turn may transfer his ownership to some 
 other person, and so on. Checks may have any number of indorse- 
 ments. Any person presenting a check which has been properly 
 indorsed over to him, to the bank on which it is drawn, may 
 receive the money. 
 
 An indorsement of a check is either an indorsement in full 
 or an indorsement in blank. Form LVII. is an example of an* 
 indorsement in full, because the check is made payable by 
 the indorsement to a particular person or his order. 
 
 40. Payable to Bearer or Order. To indorse a check in 
 blank, the person indorsing writes his name across the back 
 of the check, and any person holding it can receive the 
 money on presenting it at the bank. If a check is made 
 payable to " beater," it need not be 'indorsed before present- 
 ing it at the paying teller's window at the bank to get the 
 money on it. Most banks, however, prefer to have an indorse- 
 ment in blank on the check even if it is made payable to 
 "bearer." One should never indorse a check in blank until 
 just before presenting it to the bank for payment, for if the 
 check should be lost when so indorsed, it may be paid to the 
 finder. 
 
 It is always safer, both in writing and indorsing checks, 
 to make them payable to the order of the person who is to 
 receive the money, for he must in turn indorse it, and this 
 indorsement serves as a receipt for the payment. If a person 
 loses a check made payable to his order, the maker can give 
 him another without risk to himself, by simply writing across 
 the face of the second check, so that it may be plainly seen, 
 the word " Duplicate." The bank on which it is drawn should 
 
66 A FIRST BOOK IN BUSINESS METHODS 
 
 De notified of the loss of the check at once, in writing, giving 
 a description of the original check, and a request that it be 
 not paid. Some banks require that a bond shall be issued 
 before stopping the payment of a check. 
 
 NOTE. For other forms of indorsement, see chapter on Promissory Notes. 
 
 41. Post-Dated Checks. A check is usually dated on the 
 day on which it is drawn and is payable on demand, but some- 
 times it bears a different date. 
 
 If a check drawn on the ist of March were dated March 
 loth, it would be a post-dated check, and would show on its 
 face that it should not be paid before the loth of March. 
 
 If a person buys an article and is not sure of its value, he 
 can give in payment a post-dated check; then if he finds 
 that the seller has cheated him and the article is not worth 
 what he agreed to pay for it, he can stop the payment of the 
 check. 
 
 Never give your check dated ahead unless sure that you 
 will have money enough on deposit at that date to meet 
 the obligation. Through some misfortune you might have 
 the check returned unpaid, and thus your credit would be 
 injured. It is advisable for one to be very careful about 
 receiving post-dated checks. In fact it is a good business 
 maxim never to give or accept them. 
 
 42. Checks Should be Cashed Promptly. Checks should 
 be presented for payment at the bank within a reasonable 
 time. If the maker of the check be a responsible party and 
 his credit good, it would not be necessary to have the check 
 cashed immediately; but if there be any doubt as to his 
 responsibility, it should be cashed at once. 
 
 If the person in whose favor the check is drawn does not 
 
BANKING 
 
 67 
 
 present it for payment promptly and the bank then becomes 
 insolvent, the drawer cannot be held responsible for the 
 amount of the check ; for if the maker 'of the check has funds 
 in the bank and the payee has sufficient time to get his check 
 cashed before the bank fails, and he does not do so, the maker 
 is not at fault. 
 
 Form LVIII. 
 
 
 A Check similar to a Bank. Draft 
 
 43. Payment of Exchange. Most checks now used by 
 business men are similar to bank drafts. (See Form LVIII.) 
 
 Some business men draw their checks payable to the 
 order of themselves, and then, by indorsement, make them 
 payable to the order of the person to whom they wish to 
 make the remittance. (See Form LIX.) 
 
 When these checks state on their face that they are " Pay- 
 able in New York or Chicago exchange at par," the payee 
 is not required to pay exchange on them when he has 
 them cashed at his bank. They pass through the banks 
 without payment of exchange by the payee, because they are 
 payable in New York or Chicago exchange at par, and they 
 practically state on their face that the amount called for is 
 
68 A FIRST BOOK IN BUSINESS METHODS 
 
 not only the amount shown in figures, but an amount suffi- 
 cient to pay the exchange also. If any charges are made for 
 exchange on such checks, they are made against the drawer 
 of the check by the bank on which it is drawn. 
 
 Form LIX. 
 
 A Check drawn payable to the order of the signer 
 
 44. Certified Checks. A certified check is an ordinary 
 check upon which the cashier or teller of the bank on which 
 it is drawn has written or stamped the word "Certified" or 
 "Good when properly indorsed," or other equivalent words, 
 with the date and his signature. By certifying the check, 
 the banker guarantees that it will be paid on presentation. 
 Usually an ordinary check will not be paid by the bank 
 unless the depositor has sufficient funds to his credit to cover 
 the amount of the check. 
 
 A business man may wish to present his check for pay- 
 ment at some bank other than that in which his money is 
 deposited and which is some distance from his home. As he 
 does not wish to carry the money around with him, he can 
 
BANKING 
 
 69 
 
 have his check certified at his bank if he has that amount of 
 money on deposit, thus doing away with much of the danger 
 of loss or theft and also the inconvenience of 'carrying money. 
 
 Example : Suppose Mr. John Wood sells a pair of horses to a 
 stranger for $300 and instead of receiving cash payment for 
 the horses, the stranger hands to Mr. Wood a check on the First 
 National Bank for the amount. Before accepting the check in 
 payment for the horses, Mr. Wood ought to be sure that the check 
 is good. He may ask to have the check certified. If the stranger 
 
 Form LX. 
 
 , 7 /;. f-i /? ' ' 
 
 A Certified Check 
 
 should send the check to the bank to have it certified and it is 
 good, the cashier or the teller of the bank would stamp or write 
 across the face of the check, usually in red ink, the words " Certi- 
 fied," or "Good," or "Good when properly indorsed," with the 
 date and his signature. Mr. Wood need then have no hesitancy 
 in accepting the check, for the bank would be responsible for its 
 payment if the signature of the cashier or teller were genuine. 
 
 If you receive a check which you do not wish to use for 
 some time, it is best to have it certified. The bank will then 
 charge the account of the man who drew the check for the 
 
70 A FIRST BOOK IN BUSINESS METHODS 
 
 amount of it, and lie cannot draw all his money from the 
 bank and leave nothing there for the payment of the check 
 which you hold. 
 
 45. Voucher Checks. A form of check, called a voucher 
 check, has come into use within the past few years and is 
 being used more and more by business men. 
 
 The object of a voucher check is to show for what purpose 
 the check is issued or what bill that particular check is 
 intended to pay. Usually the back of the check is used to 
 make a notation upon, showing what bill or account is 
 intended to be paid. Some of these checks are very large 
 and so ruled that a complete statement of an account may 
 be made if desired. 
 
 46. Certificate of Deposit. When money is deposited in 
 a bank which is not a savings bank, with the intention of 
 leaving it there for several weeks or months, the banker 
 
 Form LXI. 
 
 
 Certificate of Deposit 
 
BANKING 71 
 
 usually issues to the person depositing the money, a certificate 
 of deposit as shown in Form LXI. 
 
 If the holder of a certificate of deposit wishes to draw his 
 money from the bank, he must return his certificate to the 
 bank. He cannot get the money by drawing a check on the 
 bank. He may, however, if he chooses to do so, sell his 
 certificate of deposit to some other person, and transfer it 
 by indorsement to the purchaser. If a person holding a 
 certificate of deposit wishes to draw a part of the amount 
 from the bank, the banker sometimes pays the amount desired 
 and indorses the same on the back of the certificate, but usually 
 the certificate of deposit is taken up and a new one issued. 
 
 47. Additional Directions for Writing Checks. There is 
 no commercial paper more common or more universally used 
 than checks; it is, therefore, necessary that all should be 
 familiar with their use and understand how to indorse them 
 properly. By such a knowledge one may avoid annoyance 
 and possible financial loss. Special attention is called to the 
 following suggestions : 
 
 1. Before depositing a check or cashing it at the bank 
 it must be indorsed. This indorsement is valuable as a 
 receipt to the maker and as evidence of ownership to the 
 banker. 
 
 2. In indorsing a check, write across the back of the check, 
 not lengthwise. 
 
 3. Do not indorse wrong end up, write across the top or 
 head of the check, about an inch from the end. The head of 
 a check is the end at the left as it lies before you on the desk. 
 Now to indorse it, turn it over, not endwise, but directly 
 toward you. 
 
 4. Always indorse a check by writing your name exactly 
 
72 A FIRST BOOK IN BUSINESS METHODS 
 
 as it appears on the face. If your name is John T. Smith, and 
 your name appears on the check as J. T. Smith, you may in- 
 dorse it as J. T. Smith. If payable to John T. Smith, indorse 
 it as John T. Smith. If your name is spelled incorrectly on 
 the check, indorse it twice, spelling it once as it is spelled on 
 the check, and once correctly. 
 
 Form LXII. 
 
 A Correctly Indorsed Check 
 
 48. Safety Deposit Vaults. In nearly all cities, and some 
 of the larger towns, are safety deposit vaults, which are very 
 convenient places for the safe keeping of insurance policies, 
 wills, securities, jewelry, and other valuables. These vaults 
 are fireproof, and are provided with all the safeguards neces- 
 sary for absolute protection. 
 
 Any person may rent a box or drawer in a vault of this 
 kind at a small cost per annum. Usually the rent is very 
 reasonable, being from $3.00 up to $25.00 or $30.00 per year, 
 depending upon the size of the box or drawer rented. 
 
 Each renter is provided with a key to the drawer which 
 he rents, and no person except himself or his duly authorized 
 
BANKING 73 
 
 agent can have access to his valuables. Even if his key should 
 be found by some other person, that person would not be 
 allowed access to the box by the man in charge unless he 
 could show that he had a right to be admitted there. 
 
 NOTE. For Letters of Credit, Travelers' Checks, and Bills of Exchange, 
 see Chapter VI. 
 
 EXERCISES ON CHAPTER III. 
 
 /. What is a check ? 
 
 2. Describe the process of depositing money in a bank, 
 j. What is the difference between a bank book and a 
 check book ? 
 
 4. Is it important that the stub of the 'check should be 
 written up first ? What should the stub contain ? 
 
 5. What is the difference between a savings bank and 
 a commercial deposit bank ? 
 
 6. What is meant by an indorsement ? Name two kinds 
 of indorsement and the effect of each. 
 
 7. Where is the proper place on a check to make an 
 indorsement ? 
 
 8. What is an indorsement in blank ? What is an indorse- 
 ment in full ? 
 
 <?. If you receive a check on which your name is mis- 
 spelled or there is an error in one of the initials, how would 
 you indorse the check ? 
 
 10. What is a post-dated check ? 
 
 //. Would it make any difference to the person in whose 
 favor a check is drawn, whether it is made payable to his 
 order or to bearer? Would there be any advantage to the 
 person drawing the check? 
 
 12. If you lose a check made payable to your order, what 
 
74 A FIRST BOOK IN BUSINESS METHODS 
 
 ought you to do ? Could you stop the payment of the check ? 
 How could payment be stopped ? 
 
 ij. If you give a check on the Second National Bank in 
 favor of John P. Wood, and he loses it, what ought you to do 
 if he asks you for another? 
 
 14. Who is the drawer of a check ? Who the payee ? 
 
 75. What is a certified check, and what is the advantage 
 of having a check certified ? 
 
 16. What is a certificate of deposit ? 
 
 77. If you deposit money in a bank and receive a certifi- 
 cate of deposit in place of it, how can you draw the money 
 from the bank ? Can you draw it by check ? 
 
 1 8. How would you write a check for 28 cents ? 
 
 79. How would you write a check to draw money for your 
 own use ? 
 
 20. If you receive a check from John D. Wood for $50.00, 
 how soon ought this check to be cashed ? 
 
 21. Write a letter to H. O. Stone & Bro., Chicago, inclosing 
 your check in their favor in payment of a bill of goods bought 
 some time since, amounting to $16.57. Write the check on a 
 blank piece of paper and inclose it in a letter. 
 
 22. Write out a deposit slip, on a blank piece of paper, 
 depositing in the Maryland National Bank of Baltimore, $28.00 
 in silver, $25.00 in bills, and the following checks : One on the 
 Second National Bank of Baltimore for $543.21 ; one on the 
 Fort Dearborn National Bank of Chicago for $26.43, an d one 
 on the Chemical National Bank of New York for $231.67. 
 
 23. You order a bill of goods from Sargent & Larson of 
 St. Joseph, Mo., amounting to $545.50, and you pay for the 
 same by certified check. Write them a letter explaining the 
 matter, and inclosing the certified check. 
 
 2/j.. When your bank book is written up and returned to 
 
BANKING 75 
 
 you by the bank, you find that your bank book and check book 
 do not agree. What would you do under these circumstances ? 
 
 25. Do banks pay interest on deposits, and if so, when ? 
 
 26. What are the advantages of banks to a community ? 
 
 27. In what way do checks serve as receipts ? 
 
 28. Would you expect to find many banks in Turkey or 
 Africa ? Explain. 
 
 29. What does a large number of banks in a community 
 indicate ? 
 
 GENERAL REVIEW EXERCISES 
 
 /. What is the size of letter paper generally used for a 
 business letter ? 
 
 2. How much margin should there be at the left ? 
 j. How much margin at the right ? 
 
 4. How should the sheet be folded ? 
 
 5. What is the address of a letter ? 
 
 6. What is the salutation of a letter ? 
 
 7. What is a title ? 
 
 8. How should you address a letter to your member of 
 Congress ? 
 
 p. Write a short letter to S. R. Clark calling his attention 
 to the fact that he is owing nearly $30.00 rent, and urge him 
 to make payment of same. 
 
 10. Write to J. W. Stone & Co. and inclose a check for 
 $25.00, stating that the same is to apply on your account. 
 
 11. What is a statement of account ? 
 
 12. What is an invoice ? 
 
 ij. C. W. Wilson buys of you 150 barrels of flour at $6.50 
 per barrel. Should he receive an invoice or a statement of 
 account ? 
 
76 A FIRST BOOK IN BUSINESS METHODS 
 
 14. D. J. Cutler & Co. of Dayton, O., ask for a rebate of 
 $10.00 on their invoice of August 4th, claiming goods were 
 damaged by not being properly packed. Send them a credit 
 memorandum. 
 
 75. G. H. Thornton of Bloomington, 111., bought of you 
 January loth, a bill of goods amounting to $245.30, on sixty 
 days' time. March 3Oth he paid $50.00, and June I2th, $45.00. 
 Send him a statement of his account, and write urging him 
 to pay the balance at once. 
 
 16. Bell & Johnson, Fort Wayne, Ind., buy of you 50 bar- 
 rels of flour at $5.75 per barrel, on which you allow them a 
 cash discount of 6 per cent if paid within ten days or 5 per 
 cent if paid within thirty days. Make out the invoice. 
 
 77. At the end of five days the invoice is returned to you, 
 the firm claiming that they were to be allowed a trade dis- 
 count of 5 per cent in addition to the cash discount. Send 
 them a corrected invoice. 
 
CHAPTER IV. 
 
 PROMISSORY NOTES, INTEREST, BANK DISCOUNT, 
 PARTIAL PAYMENTS 
 
 49. Promissory Notes. Many times in business trans- 
 actions a person wishes to buy something and does not have 
 the money on hand with which to pay for it at the time of 
 purchase. If the business reputation of the buyer is good, the 
 seller may agree to accept the written promise of the buyer 
 to pay the amount of the purchase at some future time. 
 
 This written promise to pay is called a promissory note. 
 The seller of the goods would prefer to take the written 
 promise of the buyer rather than a mere verbal one, because 
 the written promise would usually be sufficient evidence in 
 court to prove that the sale had actually been made, while 
 the mere verbal promise would have to be proved by other 
 evidence should any question ever arise concerning it. 
 
 50. Uses of Promissory Notes. It is more convenient to 
 sell or transfer the ownership of a promissory note than an 
 ordinary account. The original payee of a promissory note 
 can secure money on the note by transferring his right to 
 some other person, at any time after the note is made. Most 
 business men prefer a promissory note to a running account. 
 
 A promissory note then is a written promise to pay a 
 specified sum of money at a specified time. The person who 
 
 [77] 
 
78 A FIRST BOOK IN BUSINESS METHODS 
 
 signs the note, or, in other words, the person who promises to 
 pay, is called the maker, and the person who is to receive the 
 money is called the payee. 
 
 Example : If Mr. N. C. Evans buys a horse of Mr. John Crose 
 for $100 and is not prepared to pay the money when he gets 
 the horse, he may give his promissory note for the amount. The 
 note may be written with pen or pencil, but it is much preferable 
 to write it with ink on good durable paper. 
 
 Form LXIII. 
 
 Ordinary Promissory Note 
 
 The note given by Mr. Evans to Mr. Crose would be something 
 like Form LXIII. 
 
 Now, if Mr. Evans makes a payment on this note of $25.00 to 
 Mr. Crose, August 12, 1902, Mr. Crose would write across the back 
 of the note, " Received on the within note $25.00, August 12, 1902," 
 and sign his name as shown in Form LXIV. 
 
 The maker of a promissory note cannot be hindered from 
 selling all his goods and leaving the country before the ma- 
 turity of the note, if he chooses to do so, while with an ordinary 
 account in which no time of payment is specified, the amount 
 of the account is due and payable at any time. 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 79 
 
 51. Indorsement of a Note. When a person indorses a 
 note, that is, writes his name across the back of it, he becomes 
 responsible for its payment in case the original maker does 
 not pay when the note becomes due. By writing his name 
 across the back of the note he virtually says to all future 
 holders that he knows the maker of it and that he believes he 
 will pay ; and that if the maker does not pay, he, the 
 
 Partial Payment of a Note Indorsed on the Back 
 
 indorser, will do so. The laws regarding the indorsement of 
 notes are somewhat different in the different states. In most 
 states the indorser of a note cannot be held responsible for its 
 payment unless the holder gives him notice that the maker 
 has refused to pay, and this notice must be sent to the indorser 
 within twenty-four hours after the note becomes due. This 
 law prevails in all states where no statutory law has been 
 enacted making protest and notice unnecessary. 
 
 Each indorser is responsible to all indorsers who follow 
 him and also to the holder of the note at its maturity. 
 
8o A FIRST BOOK IN BUSINESS METHODS 
 
 Example : Should Mr. Crose wish to sell the note outlined in 
 the foregoing section to G. A. Allen and obtain the balance of the 
 amount before the note is due, he would write across the back of 
 the note, " Pay to G. A. Allen or order," and sign his name. The 
 effect of this indorsement would be to transfer the ownership of 
 the note from Mr. Crose to Mr. Allen. 
 
 This form of indorsement is called an indorsement in full, and 
 no one can collect the amount due on this note until G. A. Allen 
 writes his name across the back of the note. A note may have 
 any number of indorsements. You will remember that the trans- 
 fer of the ownership of checks is accomplished by the same method 
 (see 39 and 40). 
 
 Had Mr. Crose simply written his name across the back of the 
 note when he sold it to Mr. Allen, the indorsement would be 
 called an indorsement in blank, and Mr. G. A. Allen or any one 
 else who held it could collect the amount of Mr. Evans when the 
 amount became due. 
 
 If, however, Mr. Crose had written across the back of the note, 
 "Pay to G. A. Allen, only," the indorsement would be called a 
 restrictive indorsement, and Mr. Allen would be the only person 
 who could collect from the maker when the note became due, 
 unless he chose to transfer his interest in the note to some other 
 person, by assignment. 
 
 If the indorser did not wish to become responsible for the 
 payment of the note, he would write just above his name, "With- 
 out recourse to me," or "Without recourse." This is called a 
 qualified indorsement. 
 
 52 . Negotiable Notes. This form of note which we have 
 been considering, like all others of a similar nature, is called a 
 negotiable note because it may be sold or transferred from 
 one person to another ; but in order to be negotiable the words 
 " Pay to bearer," or, " Pay to the order of - " (the person 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 81 
 
 who is to receive the money, i. e., the payee), must appear 
 on the face of the note. On the other hand a note which is 
 made payable to the person named in the note, without the 
 word " bearer" or " order" appearing on its face, is called a 
 non-negotiable note, because its ownership cannot be passed 
 from one person to another. 
 
 Negotiable notes, checks, and also drafts, which are con- 
 sidered in the next chapter, are alike in this respect, that they 
 may be transferred from one person to another and that the 
 maker is responsible for payment to the holder of the paper 
 at the time of its maturity. All these forms are called, tech- 
 nically, commercial papers. 
 
 Form LXVII. 
 Form LXV. 
 
 INDORSEMENT IN FULL 
 INDORSEMENT IN BLANK 
 
 A. B. VORHES. Pay toj ' C 'J nes > or order - 
 
 H. GILBERT. 
 
 Form LXVI. Form LXVIII. 
 
 QUALIFIED INDORSEMENT RESTRICTIVE INDORSEMENT 
 
 Without recourse to me. Pay to J. R. Smith, only. 
 
 M. A. LEA CH. ALBERT WILLIAMS. 
 
 53. Joint Makers. Sometimes the payee will not receive 
 a promissory note from the maker unless the maker has some 
 one sign the note with him to insure its payment when due. 
 When two persons sign a note, they are called joint makers. 
 If one signs his name on the back cf a note before it is delivered 
 to the payee, he is not merely an indorser (see 51), but a joint 
 maker ; and if one of the makers refuses to pay the note when 
 it becomes due, the person who signs with him will have to 
 pay, whether he is notified of the other's failure to pay the 
 note when it falls due or not. 
 
82 A FIRST BOOK IN BUSINESS METHODS 
 
 We have seen that notes are divided into at least two 
 classes, negotiable and non-negotiable. They are further 
 divided into demand and time notes, and these may be either 
 interest bearing or non-interest bearing. 
 
 54. Demand Notes. Sometimes the maker of a note 
 promises to pay the amount named in the note at any time 
 when payment is demanded. In such cases the note is usu- 
 ally written like the form given below, and it Is called a 
 demand note. 
 
 Form LXIX. 
 
 A Demand Note 
 
 A note written, "One day after date I promise to pay," 
 etc., is also called a demand note. Demand notes are usually 
 given when money is borrowed for a short time only. 
 
 Days of Grace. By this term is meant an additional period 
 of three days from the maturity of the note, gratuitously 
 allowed to the maker to enable him to provide the funds for 
 payment. Days of grace were formerly allowed in all cases, 
 but the present tendency is to abolish them, and this has been 
 done in many states. 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 83 
 
 55. Interest. Interest is a sum paid for the use of money; 
 it may be for money borrowed, or for accounts which are past 
 due, or for other obligations. The money lent or due is called 
 the principal, and the sum paid for the use of it is called the 
 interest. Interest is reckoned at a certain ratio, or per cent of 
 the principal, yearly. 
 
 Simple interest is that sum which is paid for the use of the 
 principal only. 
 
 Sometimes the interest is not paid when it becomes due, 
 but is added to the principal, the whole sum then drawing 
 interest. When interest accumulates on interest in this way 
 it is called compound interest. The collection of compound 
 interest cannot be enforced, as the laws of the different 
 states generally prohibit it. 
 
 The usual custom is to charge simple interest only, and if 
 the interest is not paid when due, interest on that unpaid 
 interest is not generally collectible. 
 
 56. Bank Discount. When money is borrowed from a 
 bank, it is customary for the borrower to give his note for 
 the amount, and instead of adding the interest the banker 
 deducts a discount from the amount of the note and pays to 
 the borrower the remainder. 
 
 If a business man should give his note at the bank for 
 $500, payable in thirty days, the note would be drawn like 
 Form LXX. This note would not draw any interest until 
 due, but the banker would deduct from the amount a certain 
 percentage or discount, and this is called bank discount. It is 
 simple interest on the principal taken in advance, and in 
 states where three days of grace are allowed, it is reckoned 
 for three days more than the time specified in the note. 
 
 The legal rates of discount and interest are usually the same. 
 
84 A FIRST BOOK IN BUSINESS METHODS 
 
 57. Interest and Date of Maturity. If a note were given 
 February 4th, payable in thirty days, it would be necessary, 
 in order to find the date of maturity, to count thirty days 
 from February 4th, which would make the date of maturity 
 March 6th, or if three days of grace were allowed, March gth ; 
 but if a note were given February 4th, payable one month 
 from date, it would be due March 4th, or March 7th if three 
 days of grace were added. 
 
 Form LXX. 
 
 .^J 
 
 A so-day Note Payable to the Bank 
 
 If a note reads "with interest" and no rate is specified, it 
 draws, from the date of the note, the legal rate of interest in 
 the state where it is made. 
 
 Notes payable on demand draw no interest until after they 
 have been presented for payment unless it is stated in the 
 notes that they are to draw interest. After they have been 
 presented for payment they draw the legal rate. What is the 
 legal rate in your state? (See table, 62.) 
 
 From the fact that notes are usually due a certain number 
 of days after date, great care should be taken to see that the 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 85 
 
 date is indicated plainly on the face of the note. This is so 
 important that many persons place the date of maturity as 
 well as the date of issue on the face, as, for example, " I prom- 
 ise to pay June i, 1901." It is very important to remember 
 that when a note is given payable a certain number of days 
 after date, the actual number of days must be counted ; but if 
 it is payable a certain number of months after date, the calen- 
 dar months are counted. 
 
 Example: Stephen J. Cramer gave a note to J. J. Boardman 
 on February 7, 1901, payable one month after date. The note was 
 due March 7, 1901. If he had made it payable thirty days after 
 date, it would have been due March 9, 1901. 
 
 If no 'time of payment is specified in a note simply a 
 promise to pay the note is due at once, or on presentation 
 to the maker. 
 
 58. Place of Payment. Some place of payment is usually 
 indicated on the face of a note. If no place of payment is 
 indicated, the place of business of the maker, if he has an 
 office, or if he has no regular place of business, his residence 
 address, is the proper place of presentation. 
 
 If a place of payment is indicated, the note must be pre- 
 sented there, and it should be presented for payment on the 
 very day of maturity in states in which no days of grace are 
 allowed ; and in those which do recognize grace, at the expi- 
 ration of grace. It is customary, also, to send to the maker 
 notice of the maturity of a note, several days before it is due. 
 
 Sometimes the making of any demand or the giving of any 
 notice is waived by the maker and indorsers, by making the 
 words " waiving demand and notice " a part of the note or of 
 the indorsement. 
 
86 A FIRST BOOK IN BUSINESS METHODS 
 
 The ordinary form of notice used by a bank is shown in 
 Form LXXI. 
 
 Form LXXI, 
 
 J. R. CHAPMAN, Cashier. 
 
 CHCGtt PRESENTED III PAYHENT MUST BE CERTIFIED. 
 
 Office Hours, 10 to 3; Saturdays, 9 to 12. 
 
 A Bank Notice for Note Due 
 
 59. Protest and Notice. When presentment of a note is 
 made to the maker and he refuses to pay, it is customary to 
 have the note "protested." 
 
 A protest is a statement made by a notary public certifying 
 that the note has been presented for payment and the pay- 
 ment refused, and thereupon he protests against the maker, 
 and indorsers if there are any, for damages and costs. 
 
 The object in protesting a note is to fix the liability of the 
 indorsers and to afford good evidence of the fact of its having 
 been dishonored, in other words, that the note has been pre- 
 sented and payment has been refused, and of giving notice 
 thereupon. 
 
 The maker is said to have dishonored the note when he 
 refuses to pay the note at its maturity. This notice of dis- 
 honor should be sent to the indorser, or if there is more than 
 one, to each of them, within twenty-four hours after such 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 87 
 
 CESTTFICATE OF PROTEST. 
 
 Form LXXII. 
 
 Form No. TL MaM l| lit CMcai.) Lgl N.wi 
 
 23e it "Known, THAT on aw.-.- /./....?&. da, 
 
 x thousand nine hundred 0-**-*^L.../. 
 
 Notary Public, duly commissi.ned a*nj>rn. i 
 
 Whereupon I, the said Notary, at the request of the aforesaid, did PROTEST, and, by these Presents, do Solemnly Protest, 
 
 thereof, as all others whom it may or doth concern, for exchange, re-exchange, and all COSTS, charge*, damage*, and interest already 
 incurred by reason of the MU-^fctf4&3b***ldk ..of the said <&*?*?&& 
 
 And I. the said Notary, do hereby certint. that, on the same day and year above y*Jy, and within forty-eigh! hours from the time of 
 such protest, dne notictof tbe^foregoing Protjst^ras pnt-in the Post office, 
 No,i for_(^ 
 
 for 
 
 Each of the above-named places being th reputed place of residence of the person to whom this Notice was directed. 
 
 In Testimony Whtreof, I have hereunto set my hand and affixed my Official Sea], th* 
 da; and year first above written. 
 
 FEESi-Noting for Protest it, cenrs; Protest 75 cents; Noting Protest 15 ><! Noli. 
 
 Certificate and Seal 25 cenls; Postage- 4 ( Vol-7..^. ; Page_fc^.Z.._ t~~ 
 
 A Certificate of Protest 
 
88 A FIRST BOOK IN BUSINESS METHODS 
 
 dishonor. The notice of dishonor should be served on the 
 indorser personally, if possible, and if not possible, it should 
 be sent through the mails so as to reach him the next busi- 
 ness day if he lives in the same city with the maker. If 
 the indorser or indorsers do not live in the city in which 
 the maker resides, the notice or notices should bear the post- 
 mark date of not later than twenty-four hours after dishonor. 
 Notice may be served either by the holder of a note or by his 
 notary. The notice should be in writing. 
 
 The following would be a good form of notice : 
 
 Form LXXIII. 
 MR. JAMES P. SMITH, 
 
 SIR : A certain note now in my possession, drawn by Charles 
 Wood in your favor, for the sum of Eight Hundred Dollars, pay- 
 able in three months from the 8th of March last, and by you 
 indorsed to me, was duly presented by me to Charles Wood this 
 day and payment refused. 
 
 Please take notice that I look to you for payment of the same. 
 
 Yours truly, 
 
 LAFAYETTE, IND., June n, 1901. G. W. HOWE. 
 
 The following form is in common use when the notice is 
 served by a notary public : 
 
 Form LXXIV. 
 
 LAFAYETTE, IND., June n, 1901. 
 MR. JAMES P. SMITH, 
 
 Take notice that the note for $800 made by Charles Wood, 
 dated March 8, 1901, payable three months after date at Lafayette, 
 Ind., and indorsed by you, has this day been presented to him 
 and demand made for payment thereof, which has been refused. 
 Said note has been duly protested for non-payment, and the 
 holder now looks to you for payment of the same. 
 
 W. D. ALLEN, 
 
 Notary Public. 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 89 
 
 60. Accommodation Notes. Sometimes a note is given 
 simply as an accommodation to the person in whose favor the 
 note is drawn. The maker of the note does not expect to pay 
 it, and the payee does not intend that it shall be paid by the 
 maker. It is made for the accommodation of the payee, so 
 that he may transfer it to some other party by indorsement 
 and secure money on it. Nothing of value has been given 
 for the note, and the maker cannot be compelled to pay it 
 to the payee. But should a third party obtain the note by 
 indorsement, then the maker would have to pay it at maturity, 
 if the payee refuses to do so. 
 
 Example : Suppose Mr. Henry Cole, who has but small means, 
 wishes to use some money, say $500, and his note will not be 
 accepted at the bank. He goes to his friend, Mr. W. J. Burdick, 
 whose note will be good at any bank, and asks Mr. Burdick to 
 give him an accommodation note. Mr. Burdick writes a note 
 payable to Mr. Cole, and the note is drawn just like any other 
 promissory note. 
 
 When Mr. Burdick has signed this note, Mr. Cole may take it 
 to the bank and get the money on it. At the end of the sixty 
 days, when the note is due, Mr. Cole is expected to protect it ; i. e., 
 pay it, and return it to his friend, Mr. Burdick. By this means 
 Mr. Cole has had the use of the money, and Mr. Burdick has been 
 at no expense whatever. He has, of course, run some risk, which 
 he did simply to accommodate his friend. This note could not be 
 collected from Mr. Burdick by Mr. Cole, because there was no 
 "value received' 1 by Mr. Burdick. -If, however, the note had 
 been bought by some person who was an innocent holder , i. e., one 
 who bought it in good faith, believing it to be good, Mr, Burdick 
 would have had to pay it if Mr. Cole failed to do so. 
 
 If Mr. Cole had wished to do so, he could have drawn a note 
 payable to the order of the bank and had Mr. Burdick sign the 
 note with him. Again, Mr. Cole might have drawn a draft on Mr. 
 
90 A FIRST BOOK IN BUSINESS METHODS 
 
 Burdick for $500, and if Mr. Burdick had accepted the draft, he 
 could have had it discounted at the bank just as well as if it had 
 been a note. 
 
 In any of these cases Mr. Burdick would be termed an accom- 
 modation party, for an accommodation party to a note or bill is 
 one who has signed as drawer, maker, indorser, or acceptor, with- 
 out receiving value, and for the purpose of lending his name to 
 some other person as a means of credit. 
 
 61. Lost Notes. If a note has been lost or stolen, it does 
 not release the maker from responsibility. He must pay it 
 at the time of maturity the same as if the note had not been 
 lost. A person who buys a lost or stolen note, before matur- 
 ity, has a right to collect the value of the note from its maker, 
 provided he has no notice of the loss and the note is payable 
 to bearer. 
 
 Form LXXV. 
 
 BOND OF INDEMNITY ON PAYING LOST NOTE 
 
 KNOW ALL MEN, etc. (as in common bond). Whereas, the said - , 
 on the - day of - , 18 , did make, execute, and deliver unto the 
 above bounden - , for a valuable consideration, his promissory note, for 
 the sum of - dollars, written, due and payable on or before the - day 
 of - , then next, with interest, which said promissory note the said - , 
 since the delivery of the same to him as aforesaid, has in some manner, to him 
 unknown, lost out of his possession ; and whereas, the said - hath this 
 day paid unto the said - the sum of - dollars, the receipt whereof the 
 doth hereby acknowledge, in full satisfaction and discharge of the 
 
 said note, upon the promise of the said - to indemnify and save harmless 
 the said - in the premises, and to deliver up the said note, when found, 
 to the said - , to be canceled. Now, therefore, the condition of this obli- 
 gation is such, that if the above bounden - , his heirs, executors, or admin- 
 istrators, or any of them, do and shall, at all times hereafter, save and keep 
 harmless the said - , his heirs, executors, and administrators, of, from, and 
 against the promissory note aforesaid, and of and from all costs, damages, and 
 expenses that shall or may arise therefrom ; and also deliver, or cause to be 
 delivered, up the said note, when found, to be canceled, then this obligation to 
 be void, else to remain in full force and virtue. 
 Sealed, etc. (as in common bond. See 116). 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 91 
 
 If the maker of a note which has been lost or stolen pays 
 the amount to the original payee, he should receive from the 
 payee a bond of indemnity (see Form LXXV.) to secure him 
 against a second payment. 
 
 This indemnity bond is held by the maker of the note as 
 a protection in case the original note should be found and 
 presented to him for payment. 
 
 62. Outlawed Notes. If no part of a note or interest on it 
 be paid within a specified time, fixed by law, it is said to be 
 outlawed, and cannot be collected. 
 
 The time in which a note, account, or judgment will outlaw 
 varies in the different states. (See table below, which shows 
 also what the legal rate of interest is in the various states.) 
 
 INTEREST AND STATUTE OF LIMITATIONS 
 
 STATES. 
 
 INTEREST. 
 
 LIMITATIONS. 
 
 STATES. 
 
 INTEREST. 
 
 LIMITATIONS. 
 
 Legal rate. 
 
 1 
 
 Judgments. 
 
 , 
 
 j 
 
 } 
 
 1 
 
 Judgments. 
 
 , 
 
 3 
 
 Alabama 
 Arizona 
 
 P.ct. 
 
 8 
 G 
 
 P.ct. 
 
 8 
 10 
 Any 
 Any 
 Anv 
 
 7 
 
 10 
 
 8 
 12 
 7 
 8 
 8 
 10 
 6 
 8 
 Any 
 6 
 Any 
 
 10 
 10 
 8 
 Any 
 
 Yrs. 
 
 20 
 10 
 5 
 5 
 20 
 t 
 20 
 U 
 20 
 7 
 6 
 20 
 20 
 20 
 
 & 
 
 10 
 20 
 12 
 20 
 6-10 
 10 
 7 
 10 
 10 
 
 y .7- 
 
 5 
 5 
 4 
 6 
 
 3 
 5 
 
 5 
 10 
 10 
 10 
 5 
 15 
 5 
 
 tte 
 
 3 
 6 
 6 
 6 
 6 
 10 
 8 
 
 rr. 
 
 3 
 3 
 2 
 
 5 
 3 
 
 115 
 3 
 
 3 
 6 
 6 
 6 
 3 
 5 
 5 
 
 Nebraska 
 Nevada 
 New Hampshire 
 
 P.ct. 
 
 7 
 6 
 
 6 
 6 
 6 
 6 
 8 
 
 P.ct. 
 
 10 
 A. y 
 
 ,1 
 
 HJ 
 
 12 
 8 
 10 
 10 
 6 
 
 A 7 
 
 12 
 6 
 10 
 12 
 6 
 6 
 12 
 6 
 10 
 12 
 
 Trs. 
 
 5 
 
 6 
 20 
 20 
 7 
 20 
 10 
 10 
 5 
 1-5 
 10 
 20 
 20 
 20 
 10-20 
 10 
 10 
 8 
 8 
 10-20 
 6 
 10 
 20 
 5 
 
 Yrs. 
 
 5 
 6 
 6 
 6 
 6 
 6 
 "3 
 6 
 15 
 5 
 6 
 6 
 6 
 6 
 6 
 6 
 4 
 6 
 8 
 6-10 
 6 
 10 
 6 
 6 
 
 Yrs. 
 
 4 
 
 4 
 6 
 6 
 4 
 6 
 3 
 6 
 6 
 3 
 6 
 
 6 
 6 
 6 
 G 
 2 
 4 
 6 
 2-3 
 3 
 5 
 6 
 8 
 
 California 
 Colorado 
 Connecticut 
 Delaware . 
 District of Columbia. 
 Florida 
 
 New Mexico 
 New York 
 North Carolina 
 North Dakota 
 Ohio 
 Oklahoma 
 Oregon 
 Pennsylvania 
 Rhode Island 
 South Carolina 
 South Dakota 
 Tennessee. 
 
 Georgia 
 Idaho 
 Illinois 
 Indiana 
 Iowa 
 
 Kansas 
 Kentucky 
 Louisiana 
 
 Maine 
 
 Utah 
 Vermont 
 Virginia 
 Washington 
 West Virginia 
 Wisconsin 
 
 Massachusetts 
 Michigan 
 Minnesota 
 Mississippi 
 Missouri 
 Montana 
 
 
 * Under seal. 10. t No law. t Negotiable notes, 6; non-negotiable, 17. Building and Loan Associa- 
 tions may charge 12 per cent interest and premium together. 1 Actions on merchants' accounts must be 
 commenced in two years, tt Under seal, 20. Any rate legal on call loans $5,000 or upwards on collateral 
 security, it Under seal, 8. 
 
92 A FIRST BOOK IN BUSINESS METHODS 
 
 63. Payment Before Due. If the maker of a note wishes 
 to have the note drawn so that he may pay it at any time and 
 thus stop the interest, he writes it so that it will read " On or 
 before," etc., " I promise to pay," etc. 
 
 Example: Suppose Mr. John Crose borrows $500 of W. B. 
 Cooley for one year at 8 per cent interest, on the i4th day of 
 November, 1900. Mr. Crose does not wish to obligate himself 
 to pay the note before the i4th day of November, 1901, but his 
 circumstances may be such that he can pay the money within 
 three or four months, so he has the note written as follows : 
 
 Form LXXVI. 
 
 $500.00. MONTGOMERY, ALA., November 14., /poo. 
 
 For value received, on or before the i^th day of November, 1901, 
 I promise to pay W. B, Cooley or order y Five Hundred Dollars, with 
 interest from date at 8 per cent* JOHN CROSE. 
 
 64. Partial Payments. Sometimes the drawer or maker 
 of a note cannot pay the whole amount when the note becomes 
 due, but is obliged to make small payments. These are called 
 partial payments. 
 
 The usual form of an indorsement of a partial payment on 
 the back of a note is as follows : 
 
 Form LXXVII. 
 Received on the within note, January 10, 1902, $50.00. 
 
 It has, however, become quite common to make the indorse- 
 ment as simple as possible, and many times the indorsement 
 is written as in Form LXXVIII. Payments should be made 
 as often as possible, to reduce principal and interest. 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 93 
 
 If the amount paid is more than enough to cover the 
 interest due on the note at the time the payment is made, 
 the balance is applied to the principal. 
 
 A Simple Paid Indorsement 
 
 65. United States Rule for Partial Payments. In order 
 to find out how much is still due on a note after one or more 
 partial payments have been made, the United States Rule 
 for partial payments is ordinarily used. The rule is given 
 below and should be carefully studied. 
 
 RULE. Compute the interest on the principal from the date of 
 the note to the time of the first payment. If the payment equals or 
 exceeds the interest, add the interest to the principal and subtract 
 the payment. If the payment does not equal or exceed the interest, 
 take no notice of it until oiher payments have been made which in 
 all equal or exceed the interest due. Subtract the sum of the pay- 
 ments from the amount due and treat the remainder as a new 
 principal. 
 
94 A FIRST BOOK IN BUSINESS METHODS 
 
 66. Table of Time in Days. In finding the interest on 
 a note, thirty days are considered as one month, and 360 days 
 as one year. The usual method for rinding the time a note 
 has to run is to subtract one date from another. When the 
 exact number of days is desired, the following table will be 
 of assistance in finding the number of days between any two 
 dates in the year. Tables of this kind are frequently used 
 by bankers and others who loan money for short periods of 
 time. 
 
 Jan. 
 
 Feb. 
 
 March 
 
 April 
 
 May 
 
 June 
 
 July 
 
 Aug. 
 
 Sept. 
 
 Oct. 
 
 Nov. 
 
 Dec. 
 
 1 
 
 32 
 
 60 
 
 91 
 
 121 
 
 152 
 
 182 
 
 213 
 
 244 
 
 274 
 
 305 
 
 335 
 
 2 
 
 33 
 
 61 
 
 92 
 
 122 
 
 153 
 
 183 
 
 214 
 
 245 
 
 275 
 
 306 
 
 336 
 
 3 
 
 34 
 
 62 
 
 93 
 
 123 
 
 154 
 
 184 
 
 215 
 
 246 
 
 276 
 
 307 
 
 337 
 
 
 35 
 
 63 
 
 94 
 
 124 
 
 155 
 
 185 
 
 216 
 
 247 
 
 277 
 
 308 
 
 338 
 
 5 
 
 36 
 
 64 
 
 95 
 
 125 
 
 156 
 
 186 
 
 217 
 
 248 
 
 278 
 
 309 
 
 339 
 
 6 
 
 37 
 
 65 
 
 96 
 
 126 
 
 157 
 
 187 
 
 218 
 
 249 
 
 279 
 
 310 
 
 340 
 
 7 
 
 38 
 
 66 
 
 97 
 
 127 
 
 158 
 
 188 
 
 219 
 
 250 
 
 280 
 
 311 
 
 341 
 
 8 
 
 39 
 
 67 
 
 98 
 
 128 
 
 159 
 
 189 
 
 220 
 
 251 
 
 281 
 
 312 
 
 342 
 
 9 
 
 40 
 
 68 
 
 99 
 
 129 
 
 160 
 
 190 
 
 221 
 
 252 
 
 282 
 
 313 
 
 343 
 
 10 
 
 41 
 
 69 
 
 100 
 
 130 
 
 161 
 
 191 
 
 222 
 
 253 
 
 283 
 
 314 
 
 344 
 
 II 
 
 42 
 
 70 
 
 101 
 
 131 
 
 162 
 
 192 
 
 223 
 
 254 
 
 284 
 
 315 
 
 345 
 
 12 
 
 43 
 
 71 
 
 102 
 
 132 
 
 163 
 
 193 
 
 224 
 
 255 
 
 285 
 
 316 
 
 346 
 
 13 
 
 44 
 
 72 
 
 103 
 
 133 
 
 164 
 
 194 
 
 225 
 
 256 
 
 286 
 
 317 
 
 347 
 
 14 
 
 45 
 
 73 
 
 104 
 
 134 
 
 165 
 
 195 
 
 226 
 
 257 
 
 287 
 
 318 
 
 348 
 
 15 
 
 46 
 
 74 
 
 105 
 
 135 
 
 166 
 
 196 
 
 227 
 
 258 
 
 288 
 
 319 
 
 349 
 
 16 
 
 47 
 
 75 
 
 106 
 
 136 
 
 167 
 
 197 
 
 228 
 
 259 
 
 289 
 
 320 
 
 350 
 
 17 
 
 48 
 
 76 
 
 107 
 
 137 
 
 168 
 
 198 
 
 229 
 
 260 
 
 290 
 
 321 
 
 351 
 
 18 
 
 49 
 
 77 
 
 108 
 
 138 
 
 169 
 
 199 
 
 230 
 
 261 
 
 291 
 
 322 
 
 352 
 
 19 
 
 50 
 
 78 
 
 109 
 
 139 
 
 170 
 
 200 
 
 231 
 
 262 
 
 292 
 
 323 
 
 353 
 
 20 
 
 51 
 
 79 
 
 110 
 
 140 
 
 171 
 
 201 
 
 232 
 
 263 
 
 293 
 
 324 
 
 354 
 
 21 
 
 52 
 
 80 
 
 111 
 
 141 
 
 172 
 
 202 
 
 233 
 
 264 
 
 294 
 
 325 
 
 355 
 
 22 
 
 53 
 
 81 
 
 112 
 
 142 
 
 173 
 
 203 
 
 234 
 
 265 
 
 295 
 
 326 
 
 356 
 
 23 
 
 54 
 
 82 
 
 113 
 
 143 
 
 174 
 
 204 
 
 235 
 
 266 
 
 296 
 
 327 
 
 357 
 
 24 
 
 55 
 
 83 
 
 114 
 
 144 
 
 175 
 
 205 
 
 236 
 
 267 
 
 297 
 
 328 
 
 358 
 
 25 
 
 56 
 
 84 
 
 115 
 
 145 
 
 176 
 
 206 
 
 237 
 
 268 
 
 298 
 
 329 
 
 359 
 
 26 
 
 57 
 
 85 
 
 116 
 
 146 
 
 177 
 
 207 
 
 238 
 
 269 
 
 299 
 
 330 
 
 360 
 
 27 
 
 58 
 
 86 
 
 117 
 
 147 
 
 178 
 
 208 
 
 239 
 
 270 
 
 300 
 
 331 
 
 361 
 
 28 
 
 59 
 
 87 
 
 118 
 
 148 
 
 179 
 
 209 
 
 240 
 
 271 
 
 301 
 
 332 
 
 362 
 
 29 
 
 
 88 
 
 119 
 
 149 
 
 180 
 
 210 
 
 241 
 
 272 
 
 302 
 
 333 
 
 363 
 
 30 
 
 
 89 
 
 120 
 
 150 
 
 181 
 
 211 
 
 242 
 
 273 
 
 303 
 
 334 
 
 364 
 
 31 
 
 
 90 
 
 
 151 
 
 
 212 
 
 243 
 
 
 304 
 
 
 365 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 95 
 
 Example : Suppose we wish to find the number of days from 
 March i4th to September 3d of the same year. March i4th is num- 
 bered 73 and September 3d is numbered 246. Subtract 73 from 
 246 and we will have the exact number of days intervening, or 173 
 days. If February 2pth occurs in the time, add an additional day. 
 The day a note is made is not included in its time to run. If the 
 note were dated April 8th, to run 60 days, and were given in a state 
 which recognizes days of grace, we would add the three days of 
 grace, making 63 days. Now April 8th is numbered 98; adding 63 
 days equals 161, which is June loth, or the time when the note 
 falls due. 
 
 67. Merchants' Rule for Computing Interest. The Com- 
 mercial or Merchants' Rule is frequently used in finding the 
 amount due on notes and accounts. The rule is as follows : 
 
 RULE. Find the amount of the principal from the time it 
 begins to draw interest to the day of settlement. Find also the 
 interest on each payment from the time it was made to the date of 
 settlement and subtract the sum of the payments and the interest on 
 the same from the amount of the principal. The remainder will be 
 the sum due at the time of settlement. 
 
 68. Usury. When a higher rate of interest is charged for 
 the use of money than the law allows, it is called usury, and 
 it cannot be collected legally. Usury laws were passed to 
 protect the borrower from having hard and impossible condi- 
 tions imposed upon him by the lender. 
 
 Sometimes a person is placed in such a position that he 
 must have money, and this absolute necessity to borrow 
 money would enable those who have money to lend, to 
 charge an excessive rate of interest for the money they loan. 
 In some instances 50 per cent or as high as 100 per cent has 
 been charged the borrower. The usury laws were framed to 
 
96 A FIRST BOOK IN BUSINESS METHODS 
 
 prevent these exorbitant charges. They have not proved so 
 satisfactory as was anticipated, nor have they wholly accom- 
 plished the object for which they were enacted, so that now 
 the laws regarding usury are much changed from what they 
 formerly were, and in some of the states there are no usury 
 laws whatever. Parties may charge any rate of interest that 
 is agreed upon. 
 
 In many of the states where there are usury laws in force 
 any charge above the legal rates simply forfeits the excess. 
 This is the law in Michigan, Indiana, Minnesota, Ohio/ Penn- 
 sylvania, and several other states. In some of the states, 
 however, to charge usury forfeits all interest and a part of 
 the principal, while in others, as in Illinois, the interest is 
 forfeited and a fine imposed for the usury. What is the law 
 regarding usury in your state ? 
 
 69. " Ironclad " or Judgment Notes. In some parts of 
 the United States an additional clause is sometimes inserted 
 in a promissory note, providing that in case it becomes neces- 
 sary to resort to an action at law to enforce payment, the 
 
 Form LXXIX. 
 
 n 
 
 \J... 
 
 /^.., 
 
 . ^/ W<<W 
 
 at.&.jt,^ cent Jfci annu-n, *fte4. <3&g*t4be*<!SS***^...^~^ 
 
 "'"it any time htriuft". 
 ;ellier witli creits, and _ 
 
 ,o b> Tinue liercofT ' 
 
 .....^I^L.__ 
 
 LE^s^<. 
 
 A Judgment Note 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 97 
 
 maker of the note will pay an additional amount to cover 
 attorney's fees and expense of collecting. 
 
 Some of the states have a form of note called a judgment 
 note. This form of note contains a " power to confess judg- 
 ment" in case the note is not paid at maturity. A power 
 to confess judgment authorizes the court to take immediate 
 possession of as much of the maker's property as will cover 
 
 Form LXXX. 
 
 A common form of Promissory Note 
 
 the amount of the note and costs. It is necessary to give 
 a notice of such action to the maker of the note. This judg- 
 ment could be secured from any court of record. When a 
 note contains a clause of this description it is frequently 
 called an ironclad note. One should be extremely careful 
 about giving such a note, and, in fact, it never should be given 
 if it can be avoided. 
 
 In some of the states a note of this description would be 
 considered illegal on the ground that it may afford cover for 
 usury, and the payee of a note should be careful to ascertain 
 what the law is in the state where he is doing business before 
 inserting a clause of this kind in a promissory note. 
 
98 A FIRST BOOK IN BUSINESS METHODS 
 
 70. Joint Notes. When two persons give a note they 
 make it in either of two ways. They may write it, "we 
 jointly and severally promise to pay," or, " we promise to pay," 
 and both sign their names. In the former case the note is 
 called a joint and several note, and in the latter a joint note. In 
 case any question arises as to the payment of the above, the 
 makers of a joint and several note may be sued separately, 
 and in a joint note they must be sued jointly, that is, together, 
 but in some states this distinction is abolished by law. 
 
 Form LXXXI. 
 
 JOINT NOTE 
 
 $216.00 Sioux FALLS, S. D., August 10, 1001. 
 
 Sixty days from date, for value received, we promise to pay E. 
 VV. Hazard, or order ; Two Hundred and Sixteen Dollars, with 
 interest. B. J. HENSHAW. 
 
 C. D. SNOOK. 
 
 Form LXXXII. 
 
 JOINT AND SEVERAL NOTE 
 
 $600.00 SOUTH BEND, IND., May 28, 1001. 
 
 Thirty days after date, for value received, we jointly and sever- 
 ally promise to pay to the order of R. L. Peters, Six Hundred Dollars, 
 with use. ROBERT BEARDSLEY. 
 
 GEORGE JOHNSON. 
 
 71. Collateral Notes. A collateral note differs somewhat 
 from an ordinary promissory note, and is used when the 
 person in whose favor the note is drawn receives and holds 
 as security for the payment of the amount named in the note, 
 certain property belonging to the maker. This is called " col- 
 lateral security," and if the maker of the note does not keep 
 his promise faithfully to pay the note when due, the holder 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 99 
 
 of the collateral security is empowered to sell trie property, 
 keeping a sufficient amount of the proceeds to cover his own 
 claims, and restoring the remainder to the maker of the note. 
 
 Form LXXXIII. 
 
 COLLATERAL NOTE. SHORT FORM 
 
 Primed and for sale by M D. Riot., ! 
 
 after date fot value received ^ promise to pay to tne order'of 
 
 and ^K . hereby give the said legal holder his her or their assign or assigns, authority to sell the same, or any part thereof on 
 the maturity of this Note, or at any time thereafter, or before, in the e*ent of said security depreciating in value, at public or private 
 sale, without advertising the same, or demanding payment, or giving obtfct^and to^jpply so much of the proceeds thereof to t 
 payment of this Note, as may be necessary to pay the same, with all tnt'erest duo lt*mS&. and ftfso ft>%ie payment of all expens 
 
 g the.salc of the said collaterals, and i 
 
 the proceeds of the sale*f 
 
 penses 
 lhe Principal Inter 
 
 is hereby 
 
 . , 
 
 expenses ^ promise to pay the deficiency forthwith after such sale* wTtft ti5ere*t at* ,..per ^n^tJ 
 
 agreed and understood thai il recourse is had to said collateral, any money realized o\saTe thetul o^e,\cess of the amount due upon 
 this Note shall be applicable to the payment of any other note or cl**J[*h thg said legal HMf\*yzy have against^i^/ and 
 in eve of any exchange of or addition to the collateral above o*ftfe2. 'the ($? of.tnit'NcJe shall extend to such neu or 
 
 * 
 
 additional collateral. 
 
 --v-.w *iv^;' 
 
 -**.* Vr.jj- .; ) 22. : 
 
 Form for a Collateral Note 
 
 A collateral note is used in many cases where the maker 
 borrows money and wishes to make his promise of payment 
 as secure and satisfactory as possible without asking any of 
 his friends to sign the note with him. The property left as 
 a pledge is described in the body of the note itself. Stocks, 
 bonds, and negotiable notes are often used for this purpose. 
 
ioo A FIRST BOOK IN BUSINESS METHODS 
 
 Form LXXXIV. 
 
 NOTE PA YABLE BY INSTALLMENTS 
 
 $275.00 CLEVELAND, O.,fune n, 1001. 
 
 For value received, I promise to pay to George D.Johnson or order, 
 the sum of Two Hundred and Seventy-five Dollars, with interest 
 from date at 6 per cent per annum as follows : One Hundred Dollars 
 on or before May 5, 1002, One Hundred Dollars on or before August 
 /, ioo2 y and Seventy-five Dollars on or before December n, 1002. 
 
 C. D. SMITH. 
 
 Form LXXXV. 
 
 NOTE PAYABLE ON OR BEFORE A CERTAIN DATE 
 
 $5-75 MILWAUKEE, Wis., May j, 1001. 
 
 On or before the twelfth day of January, 1002, 1 promise to pay 
 to G. McDonald or order, Fifty-six and T Yo Dollars, with interest 
 from date at j per cent. Value received. 
 
 G. P. TRUESDALE. 
 
 Form LXXXVI. 
 
 PRODUCE NOTE 
 
 $25.00 BUCHANAN, MICH., September 5, 1001. 
 
 For value received, I promise to pay to George D. Johnson, on 
 demand, Twenty -five Dollars in produce at my feed store. 
 
 M. W. BROWN. 
 
 NOTE. A produce note is one payable in produce. 
 
 72. Special Things to Remember About Notes. The sub- 
 ject of promissory notes is a very extensive one, and only a 
 few of the many important things pertaining to it can be 
 mentioned here. The following are of special interest and 
 should be carefully noted : 
 
 1. A note made on Sunday is void in some states. 
 
 2. A note made under duress or compulsion is void. 
 
NOTES, INTEREST, DISCOUNT, 'PAYMENTS 101 
 
 3. Notes obtained by fraud, or made by a person when 
 intoxicated, usually cannot be collected. 
 
 4. Notes bear interest only when so stated in the note, 
 except after maturity, when they draw the legal rate of 
 interest in the state where they are issued. 
 
 5. The holder of a note has a legal claim against every 
 person who has indorsed it, and each indorser is responsible 
 to all indorsers who follow him. 
 
 6. A note may be written on any paper, with pen or pen- 
 cil, and it will be valid. 
 
 7. If a note be lost or stolen, the maker is not necessarily 
 released from payment. 
 
 8. If no time of payment is specified in a note simply a 
 promise to pay the note is due at once. 
 
 9. A note made in one state and payable in another must 
 be governed by the laws of the state in which it is to be paid. 
 
 10. Notes payable on demand draw no interest until after 
 they have been presented for payment, unless it is stated in 
 the note that they are to draw interest. After they have been 
 presented for payment they draw the legal rate of interest. 
 
 11. If a note reads "with interest," but no rate is speci- 
 fied, it draws the legal rate of interest in the state where it 
 was given, from the time it was made. 
 
 12. If a note falls due on a Sunday or on a legal holiday, it 
 should be paid the day before unless otherwise provided by law. 
 
 13. Notes payable "on demand" are not entitled to days 
 of grace. 
 
 14. If no place of payment is mentioned in the note, it 
 should be presented to the maker personally, or at his place 
 of business during business hours. 
 
 15. The misspelling of a word will in no case invalidate 
 the note. 
 
102 A 'FIRST 'BOOK IN BUSINESS METHODS 
 
 1 6. If a note is given by a person who cannot write, it 
 is important to have a witness who can testify to the genuine- 
 ness of his mark. 
 
 17. The promisors of a joint note must be sued jointly, 
 while either promisor of a joint and several note may be sued 
 alone. 
 
 1 8. A note payable on demand is due as soon as the 
 demand is made; but if it is payable "one day from date," 
 three days of grace are allowed for payment in most of the 
 states. 
 
 19. If both figures and words are used in a note, the words 
 take precedence in a case of doubt or disagreement. 
 
 20. The figures are usually placed in the upper left-hand 
 corner of the note, and the words in the body of the instru- 
 ment. 
 
 21. If a note is signed by a firm, it may be collected from 
 either of the partners. 
 
 22. If a note is given on the 8th day of February, payable 
 one month after date, it would be due on the 8th day of March, 
 but if the note is given on the 8th of February and is pay- 
 able thirty days after date, the exact number of days must be 
 counted in order to find just when it falls due. 
 
 23. If a note has been lost or stolen, the holder must 
 make a formal demand for its payment, and must offer an 
 indemnity bond in case the maker pays. 
 
 24. If a payment is made on a note which is secured by a 
 mortgage, the amount of the payment is indorsed on the back 
 of the note, not on the mortgage". 
 
 25. A note given by a minor is void unless it is given for 
 actual necessities, such as food and clothing. If, however, the 
 note is given when the maker is under age, and when he has 
 become of legal age he ratifies the note, it is binding. 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 103 
 
 EXERCISES ON CHAPTER IV. 
 
 /. What is a promissory note ? 
 
 2. What is the difference between a note and a check ? 
 j. Is a note signed with a lead pencil good at law? 
 Would you advise signing them that way ? Why ? 
 
 4. If no time of payment is specified in a note, when is it 
 due? 
 
 5. A note is drawn payable one month after date, and is 
 dated February 2, 1898; when is it due? If made payable 
 thirty days after that date, when would it be due ? 
 
 6. A note is given by a young man eighteen years of age, 
 who has property of his own; can the note be collected? 
 Supposing the note had been given for board or for neces- 
 saries of life, would that make any difference about collect- 
 ing the amount of the note ? 
 
 7. What is an accommodation note ? Describe two forms 
 of accommodation notes, and tell which, in your judgment, 
 would be the better form. 
 
 8. What is a judgment note ? Why should one not sign 
 a judgment note unless absolutely necessary? 
 
 p. Supposing no rate of interest is mentioned in a note, 
 does it draw any interest, and if so at what rate? When 
 would it commence to draw interest ? 
 
 10. If the holder of a note sells it to a third person and 
 transfers it by indorsement, is he responsible for its payment ? 
 How can he indorse it so as not to hold himself responsible 
 for its payment ? 
 
 IT. If a man sign a note on its face as security, is he one 
 of the makers of the note or is he an indorser ? 
 
 12. If you hold a note against P. W. Van Arsdale and the 
 note is destroyed by fire, can the amount of the note be 
 
104 A FIRST BOOK IN BUSINESS METHODS 
 
 collected? How would you proceed if Mr. Van Arsdale 
 refuses to pay the note ? 
 
 7j. If the figures in the left-hand corner of a note showed 
 the principal to be $120.25, and the writing in the body of the 
 note showed one hundred thirty and 45-100 dollars, which 
 would be considered correct ? 
 
 7^. You sell a horse to H. W. Gilson for $125, and in 
 payment receive his note due in six months. R. W. Powers 
 signs the note with him as security. Write the note with 
 signatures. 
 
 75. At the end of six months H. W. Gilson pays $100. 
 Make the indorsement on the note. One month later you sell 
 the note to A. C. Howe and transfer it to him by indorsement. 
 Make the proper indorsement. How could you make the 
 indorsement so as not to hold yourself responsible for its 
 payment? 
 
 1 6. Define and give examples on paper of the following: 
 Indorsement in blank, indorsement in full, qualified indorse- 
 ment, and restrictive indorsement. 
 
 77. When may a note be transferred without indorsement? 
 
 18. What is the object of protesting a note and how is it 
 done? 
 
 7p. How many years will it take to outlaw a note in your 
 state if no part of the principal or interest is paid ? 
 
 20. Distinguish between a joint and a joint and several 
 note. 
 
 21. Write a letter to Johnson, Forbes & Co. of Little Rock, 
 Ark., informing them that a note made on the 2oth day of May 
 last by F. C. Larkin and indorsed over to you by Johnson, 
 Forbes & Co., is now due, and that presentation has been made 
 to Mr. Larkin, who dishonored the note. Tell Johnson, Forbes 
 & Co. that therefore you look to them for payment. 
 
NOTES, INTEREST, DISCOUNT, PAYMENTS 105 
 
 GENERAL REVIEW EXERCISES 
 
 /. In an invoice of goods sold, what is the first double col- 
 umn to the right of the invoice used for? 
 
 2. Which is the extension column ? 
 
 j. What other things are noted in an invoice besides the 
 quantities and prices of the goods? 
 
 4. What is meant by trade discount ? 
 
 5. Is there any difference between a trade discount and a 
 cash discount ? 
 
 6. You receive an invoice of goods from Simpson & Brown, 
 St. Louis, Mo., and find that they have overcharged you. 
 Write a polite letter to them, calling their attention to the 
 overcharge, and ask them for a corrected invoice. 
 
 7. Of what use are banks ? 
 
 8. What is the difference between a savings bank and a 
 bank of deposit ? 
 
 p. Describe the method of opening an account with a 
 bank of deposit. 
 
 10. Will bankers accept deposits of money from anyone 
 who wishes to open an account with them ? 
 
 11. When a depositor places money in a commercial 
 deposit bank, what does he hold as a receipt to show the 
 amount of his deposit ? 
 
 12. Can money which is deposited in a savings bank be 
 withdrawn by check ? 
 
 ij. You buy of T. D. Wood & Co. a bill of goods amount- 
 ing to $245.35. Write a check in payment, making it payable 
 to their order. 
 
 14. If you owe William Smith $23.45 on account and give 
 him a check in payment, would it be necessary for him to give 
 you a receipt showing that the account has been paid ? 
 
CHAPTER V. 
 
 DRAFTS 
 
 73. Uses of Drafts. A draft is a written order or request 
 by one party to a second to pay to a third a certain sum of 
 money at a specified time. There are always three parties to 
 a draft : the drawer, the drawee, and the payee. The drawer of 
 a draft is the person who draws it or signs his name to it. 
 The drawee is the person on whom the draft is drawn, or the 
 one who is to pay the draft. The payee is the person to whom 
 the payment is to be made. It is customary in writing a 
 draft to place the address of the person who is to pay the 
 draft in the lower left-hand corner. 
 
 A very common method used by business men for collect- 
 ing accounts is by draft. 
 
 Example : Let us suppose that Mr. Charles Green, who lives 
 in Muskegon, Mich., owes Mr. George D. Johnson, a wholesale mer- 
 chant of Chicago, $45.50 for a bill of goods purchased. If Mr. 
 Green does not send the remittance for the amount due for the 
 goods after a certain time which is usually specified in the invoice, 
 Mr. Johnson would probably draw a draft on him for the amount 
 due. The draft might be drawn "on demand" or "at sight" or 
 any number of days after sight or demand. If it were drawn pay- 
 able " at sight," it would be drawn like Form LXXXVII. 
 
 When Mr. Johnson has drawn the draft, he will take it to some 
 
 Cio6] 
 
DRAFTS 
 
 107 
 
 Form LXXXVII. 
 
 Commercial bight Drafts 
 
 bank in Chicago, the First National Bank in this instance, and it 
 will be indorsed over to some bank in Muskegon and be sent 
 there for collection. If Mr. Johnson had wished to do so he could 
 just as well have drawn the draft payable to some bank in Muske- 
 gon, and sent it direct to the banker there for collection instead of 
 asking the banker in Chicago to attend to the collection for him. 
 If Mr. Green had happened to live in some small place where 
 there was no bank, Mr. Johnson could have sent the draft to the 
 postmaster or some other responsible person for collection. When 
 the banker in Muskegon receives the draft to be collected, he sends 
 
io8 A FIRST BOOK IN BUSINESS METHODS 
 
 it to Mr. Green by one of the bank clerks whose business it is to look 
 after collections. As it is a sight draft, Mr. Green will be given 
 three days of grace after he has accepted it, but he would not be 
 allowed this time in states where days of grace have been abol- 
 ished. If he is willing to pay the draft, he writes across its face, 
 usually in red ink, "Accepted," and the date, and also states where 
 he will pay it, and signs his name as in the form following: 
 
 Form LXXXVIII. 
 
 Form of an Accepted Draft 
 
 Mr. Green is not obliged to accept the draft unless he ch'ooses 
 to do so, but when he has accepted it he is obliged to pay it when 
 it becomes due, just as he would be obliged to pay a note. 
 
 After the draft has been accepted the clerk takes it back to the 
 bank and waits until the expiration of the time when the accept- 
 ance is due. He then leaves it at the place designated by Mr. 
 Green for payment, and when the draft is paid the proceeds are 
 remitted to Mr. Johnson by bank draft, and the whole cost to him 
 will not be more than 20 or 25 cents. 
 
 One should be careful not to draw on a person unless he 
 has been notified of the intention. Many business men pre- 
 fer to be notified of the dates their accounts become due, and 
 to make arrangement for payment by other means. 
 
DRAFTS 109 
 
 74. Indorsement "for Collection." It frequently happens 
 that a person holding a bill or note finds it necessary to send 
 it for collection to some place where there is no bank, and if 
 he has little or no acquaintance with the person whom he asks 
 to make the collection for him, he should indorse and add the 
 words, "for collection." This checks the further transfer of 
 the paper, because any one to whom it may be offered can see 
 that it was the business of the person presenting it to him to 
 collect it on the indorser's account. It is not customary, how- 
 ever, to do this where collections are made through banks, and 
 some banks refuse to accept drafts indorsed " for collection." 
 
 75. Dishonoring a Draft. Thousands of drafts are col- 
 lected by banks every day. Some business men do not send 
 a remittance for goods purchased, preferring to wait until a 
 draft is drawn upon them for the amount due. Some people 
 are more likely to pay drafts drawn upon them for amounts due 
 than they are to send a remittance for the amount if a state- 
 ment of account is sent them. A business man is not obliged 
 to accept a draft when presented, even if the account for which 
 the draft is drawn is past due; but if he refuses to accept the 
 draft, he should give some reason for refusing, so that a brief 
 explanation may be made on the back of the draft before it 
 is returned to the drawer. Business men often borrow money 
 of banks, and should they habitually refuse to honor drafts on 
 them the banks would soon refuse to extend them credit. 
 
 A person who refuses to pay or to accept a draft that is 
 drawn upon him is said to have dishonored it. Many business 
 men draw on their customers and then discount these drafts 
 at their bank. Some of the drafts are dishonored when pre- 
 sented to the drawee, but the drawer is, of course, responsible 
 for the payment of any drafts which he has discounted at his 
 
no A FIRST BOOK IN BUSINESS METHODS 
 
 bank, and he must make good the shortage caused by any drafts 
 which are dishonored. 
 
 76. Protest of Drafts. Drafts which are not accepted or 
 paid when due are usually protested in the same manner that 
 notes are protested, but not for the same reason. Notes, you 
 will remember, are protested in order to hold the indorsers 
 liable (see 59). Drafts are protested usually to serve as a 
 notice to the drawer of non-payment or non-acceptance, or, if 
 the drafts have been discounted, to hold the drawer or maker 
 liable. Drafts may be transferred by indorsement the same 
 as notes and checks, and the same rules as to indorsement 
 apply. 
 
 77. Bank Drafts. Nearly all banks keep money on deposit 
 to their credit with some metropolitan bank or some bank in 
 a commercial center. As New York is the commercial center 
 of the United States, most large banks keep a deposit in some 
 New York bank. Usually they have money on deposit in one 
 or two cities in the West and one or two cities in the East. 
 
 Example: Let us suppose that Mr. George L. Peters of 
 Madison, Wis., owes Scott, Jackson & Co. of New York $35.75, 
 and wishes to pay his bill. He does not care to send them the 
 money, for there would be considerable expense connected with 
 paying the bill in that way. The express companies would charge 
 him for carrying the money, and if he should send it through the 
 post office there would be some delay. He would much prefer, 
 and it would be much safer, cheaper, and more convenient, for 
 him to go to his banker and buy a draft on a New York bank for 
 the amount he owes, and send it to Scott, Jackson & Co. The 
 bank in Madison, Wis., would charge Mr. Peters a little more 
 than the amount of the draft, $35.75 enough more to pay them 
 for the trouble of drawing the draft. 
 
DRAFTS 
 
 in 
 
 The draft which Mr. Peters would receive from the bank in 
 Madison would be something like the first form given below. 
 
 Form LXXXIX. 
 
 No. 659. 
 
 Madison, Wis , Nov. 2nd, 1901. 
 FIRST NATIONAL BANK OF MADISON. 
 
 Pay xo the order of Scott, Jackson & Co , $35. 75 
 
 Thirty five and 75/100 Dollars 
 
 To FIRST NATIONAL BANK 
 New JTorX 
 
 & Cashier. 
 
 MATTEVSON, WttSOtt .& CO. 
 
 BAIVKERS. 
 
 " 
 
 DUPLICATE UNPAI o 
 
 o FIRST NATIONAL BANK. 
 CHICAGO. ILL. 
 
 Forms of Bank Draft 
 
 If Mr. Peters had wished to do so he could have had the draft 
 drawn payable to himself and then indorsed it over to Scott, Jack- 
 son & Co. of New York, by writing across the back of the draft, 
 " Pay to the order of Scott, Jackson & Co.," and signing his name. 
 As all drafts are finally returned to the banks where they 
 were issued, they may be used if necessary to prove that pay- 
 ment has been made. 
 
H2 A FIRST BOOK IN BUSINESS METHODS 
 
 78. Uses of Bank Drafts. Business men use bank drafts 
 more than any other method for sending money remittances 
 from one part of the country to another. There are, however, 
 several other methods by which one may send money from 
 one place to another. 
 
 Any of the New York banks would accept the draft drawn 
 by the Madison bank on a bank in New York. In fact, almost 
 any bank in the United States would cash a bank draft on 
 New York or Chicago or any of the other commercial centers. 
 Banks in which other banks have deposits are called by them 
 correspondents or correspondent banks. 
 
 Nearly all banks furnish application blanks for drafts as 
 shown in Form XC. 
 
 Form XC. 
 
 1901 
 
 
 i 
 
 I 
 
 illllUlllllllIlli 
 
 Form of Request for a Draft 
 
 In buying a draft at a bank it is always best to have it 
 made payable to yourself, and then indorse it in favor of the 
 party to whom you intend to transfer it. This draft will 
 then serve as a receipt if proof of payment is necessary. 
 
DRAFTS 113 
 
 EXERCISES ON CHAPTER V. 
 
 /. How many parties are there to a draft ? Name them. 
 
 2. J. B. Shearer & Co. of Flagstaff, Ariz., owe you $73.29. 
 Draw a sight draft on them for the amount. Write a letter 
 to them advising them of your action. To whom would you 
 send this draft for collection? Suppose J. B. Shearer & Co. 
 do not accept the draft on presentation, what would be 
 done? 
 
 j. Where are the drawee's and payee's names placed on 
 a draft? 
 
 4. What is the object of protesting a draft ? 
 
 5. Render Merritt F Oilman of Moberly, Mo., a state- 
 ment of account containing three debits and one credit item. 
 Draw on him at ten days' sight, and have the draft discounted 
 at the bank. Write him with reference to the matter, advis- 
 ing him of your action. Mr. Oilman dishonors the draft 
 because, as he thinks, there is a mistake in your statement of 
 account. Write his letter to you. r 
 
 6. In your opinion, is it best to draw on a good customer 
 without his consent ? Why ? 
 
 7. How can payment of a check be stopped ? 
 
 8. V. Y. McClure transfers a draft to you by blank 
 indorsement. Can you pay a bill which you owe to Oeorge 
 McMurray & Co. with the same ? Why ? 
 
 p. Explain fully the difference between a note, a check, 
 and a draft. 
 
 10. Which would you prefer to receive in payment of a 
 bill : a check, a note signed by one person without indorse- 
 ment, or a bank draft ? Why ? 
 
 IT. Explain acceptance, indorsement in full, and indorse- 
 ment in blank, as applied to commercial paper. 
 
 12. What do we mean by commercial paper? 
 
H4 A FIRST BOOK IN BUSINESS METHODS 
 
 GENERAL REVIEW EXERCISES 
 
 7. How would you address a letter to the Governor of your 
 state? 
 
 2. Mention the proper titles for three different people with 
 whom you are acquainted. 
 
 j. To whom is a general letter of recommendation ad- 
 dressed ? 
 
 4. Write a short letter to C. J. Williams & Co. acknowledg- 
 ing the receipt of a check for $250 to apply on their account, 
 and thanking them for same. 
 
 5. Mr. John W. Adams sends you a check to settle his 
 account, but has deducted a trade discount of 10 per cent 
 amounting to $14.50, to which he is not entitled. Write a 
 letter to him calling his attention to the matter, and return 
 the check to him with the request that a check for the full 
 amount be sent. 
 
 6. What is an invoice ? 
 
 7. On May 2oth you sell to C. D. Davis & Co., Topeka, 
 Kan., 40 barrels flour at $5.50 per barrel, 2,245 pounds corn 
 meal at $1.15 per hundred, 345 pounds oatmeal at 5 cents per 
 pound. Make out an invoice of same. 
 
 8. What is an indorsement ? 
 
 p. Where is the proper place for an indorsement on a 
 check ? 
 
 10. How can you determine whether it is necessary that 
 a check be indorsed or not before presenting it for payment ? 
 
 77. Why should a check not be indorsed until just before 
 having it cashed ? 
 
 12. Why is the existence of promissory notes necessary ? 
 
 7j. Why is a written promise to pay better than a verbal 
 one? ^ 
 
 14. What does negotiability mean ? 
 
DRAFTS 
 
 TJ. How many parties are there to a note, and what are 
 they called ? 
 
 16. What is meant by the maturity of a note ? 
 
 77. If a man holds a note which is already indorsed in 
 blank, and transfers it by mere delivery, what responsibility 
 does he assume ? 
 
 1 8. When is a note said to be dishonored ? 
 
 /p. What is meant by days of grace ? 
 
 20. If a note falls due on a holiday, when should it be pre* 
 sented for payment? 
 
 
CHAPTER VI. 
 
 GENERAL POSTAL INFORMATION, POST OFFICE 
 
 MONEY ORDERS, EXPRESS MONEY ORDERS, 
 
 LETTERS OF CREDIT 
 
 79. General Postal Information. The postal service of 
 the United States is maintained by the Government for 
 the benefit of the people, and is one of the most important 
 branches of the public service. It is not intended as a money- 
 making institution, but to provide a safe and convenient 
 method of transmitting mail matter of various kinds and at 
 small expense. 
 
 Mail matter is divided into four classes, and a different rate 
 is charged for each class. 
 
 DOMESTIC POSTAGE RATES 
 
 LETTERS AND POSTAL CARDS WITHIN 
 UNITED STATES. 
 
 Per oz. 
 
 Letters to any part . . 
 
 2cts. 
 2cts. 
 1 ct. each 
 
 10 cts. 
 10 cts. 
 
 City drop letters 
 
 Postal cards to any part 
 
 Registration fee In addition to regular 
 
 For immediate delivery, in addition to 
 regular postage 
 
 face of a postal card, using space indicated. A card 
 containing any threat, offensive dun, or any scur- 
 rilous or jndeceut communication will not be fi 
 
 FIRST-CLASS MATTER. This class Includes let- 
 ters, postal cards, and anything sealed or other- 
 wise closed against Inspection, or anything con- 
 taining writing not allowed as an accompaniment 
 to printed matter under class three. 
 
 Nothing must be added or attached to a postal 
 card, except that a printed address slip may be 
 pasted on the address or message side. The addi- 
 tion of anything else subjects the card to letter 
 postage. A message may now be written on the 
 
 warded. The rule that has heretofore existed 
 excluding from the face of a postal card words 
 indicating the occupation or business of the 
 addressee has been revoked. These additions, or 
 others of a like general character, are now held to 
 be constructively a part of the address, and theie- 
 tore permissible. Cards that have been spoiled in 
 printing or otherwise will not be redeemed. 
 
 "Private Mailing Cards" bearing written mes- 
 sages may be transmitted in the ni:iils at the rate 
 of a cent apiece, stamps to be affixed by the sender; 
 Bach cards to be sent openly in the mails, to be no 
 larger, and ro be approximately of the same form, 
 quality, and weight as the stamped postal c >rd 
 no\yiu ireneral use in the United States, Private 
 mailing cards sent to foreign countries, except to 
 those where there is a special rafe, require a 2c 
 stamp. 
 
 Rates on specially delivered letters, ten cents or 
 each letter in addition to the regular postap 
 
 [i 1 6] 
 
GENERAL POSTAL INFORMATION 
 
 117 
 
 This entitles the letter to immediate delivery by 
 special messenger. Ordinary stamps, to the 
 amount of ten cents, affixed to a letter bearing 
 regular postage, entitles it to special delivery, if 
 it is so marked. 
 
 Letter rates are charged on all productions by 
 the typewriter or manifold process, and on all 
 printed imitations of typewriting or manuscript, 
 unless such reproductions are presented at post- 
 office windows In the minimum number of twenty 
 Identical copies. 
 
 Letters (but no other class of mall matter) will 
 be returned to the sender free, if a request to that 
 effect is printed or written on the envelope. 
 There Is no limit of weight for first-class matter. 
 
 Prepaid leiters will be reforwarded from one 
 post-office to another upon the written request of 
 the person addressed, without additional charge 
 for postage. The direction on forwarded letters 
 may be changed as many times as may be neces- 
 sary to reach the person addressed. 
 
 SECOND-CLASS si ATT KR which embraces news- 
 papers, magazines, and periodicals published not 
 less than four times a year, when mailed by pub- 
 lisher or news-agent to regular subscribers, one 
 cent, prepaid, per pound, or fraction thereof. 
 Second-class matter mailed by other persons than 
 publishers or news-agents becomes special mat- 
 ter, specially entitled to pass through the malls at 
 one cent for each four ounces or fraction thereof. 
 No limit as to weight. 
 
 TillKD-CLASS MATTER. Mail matter of the third 
 class Includes printed books, pamphlets, engrav- 
 ings, circulars (in print or by the hectograph, 
 electric-pen, or similar process), and other matter 
 wholly in print, proof-sheets, corrected proof- 
 sheets, and manuscript copy accompanying the 
 same. 
 
 The rate on matter of this class is one cent for 
 each two ounce* or fraction thereof. 
 
 Manuscript unaccompanied by proof-sheets 
 must pay letter rates. 
 
 Third-class matter must admit of easy inspec- 
 tion, otherwise it will be charged letter rates on 
 delivery. It must be fully prepaid, or it will not 
 be forwarded. 
 
 The limit of weight is four pounds, except single 
 books in separate packages, on which the weight 
 is not limited. It is entitled, like matter of the 
 other classes, to special delivery when ten cents in 
 stamps are affixed in addition 10 the regular 
 postage. 
 
 Upon matter of the third class, or upon the 
 wrapper or envelope inclosing the same, or the 
 tag or label attached thereto, the sender may 
 write his own name, occupation, and residence or 
 business address, preceded by the word "from," 
 and may make marks other than by written or 
 printed words to call attention to any word or 
 passage In the text, and may correct any typo- 
 graphical errors. There may be placed upon the 
 blank leaves or cover of any book, or printed 
 matter of the third class, a simple manuscript 
 dedication or Inscription not of the nature of a 
 personal correspondence. Upon the wrapper or 
 envelope of third-class matter, or the tag or label 
 attached thereto, may be printed any matter 
 mailable as third-class, but there must be left on 
 the address side a space sufficient for the legible 
 address and necessary stamps. 
 
 FOURTH.CLASS MATTER. Fourth-class matter Is 
 all mailable matter not included In the three pre- 
 ceding classes, which is so prepared for mailing 
 
 , as to be easily withdrawn from the wrapper and 
 examined. It embraces merchandise and samples 
 of every description, and coin or specie. 
 
 Kate of postage, one cent for each ounce or 
 fraction thereof (except seeds, roots, bulbs, 
 cuttings, coins, and plants, the rate on which 
 is one cent for each two ounces or fraction 
 thereof). This matter must be fully prepaid, or 
 it will not be forwarded. The affixing of ten cents 
 in stamps in addition to the regular postage 
 entitles fourth-class matter to special delivery. 
 
 Articles of this class that are liable to injure or 
 deface the mails, such as glass, sugar, needles, 
 nails, pens, etc., must be first wrapped In a bag, 
 box, or open envelope, and then secured In another 
 outside tube or box, made of metal or hard wood, 
 without sharp corners or edges, and having a slid- 
 ing clasp or screw lid, thus securing the articles 
 In a double package. 
 
 Poisons, explosives, or inflammable articles, live 
 animals, insects, or substances exhaling a bad odor 
 will not be forwarded. 
 
 Firearms may only be sent In detached parts. 
 
 The regulations respecting the mailing of liq- 
 uids are as follows: Liquids, not ardent, vinous, 
 spirituous, or malt, and not liable to explosion, 
 spontaneous combustion, or ignition by shock 01 
 jar, and not Inflammable ( such as kerosene, naph- 
 tha, or turpentine), may be admitted to the mails 
 for transportation within the United States. 
 When in glass bottles or vials, such bottles or 
 vials must be strong enough to stand the shock 
 of handling in the malls, and must be enclosed in 
 a metal, wooden, or papier mache block or tube, 
 not less than three-sixteenths of an inch thick In 
 the thinnest part, strong enough to support the 
 weight of mails piled in bags and resist rough 
 handling; and there must be provided, between 
 the bottle and said block or tube, a cushion of 
 cotton, felt, or some other absorbent sufficient to 
 protect the glass from shock in handling; the 
 block or tube to be closed by a tightly fitting lid 
 or cover, so adjusted as to make the block or tube 
 water tight and to prevent the leakage of the 
 contents in case of breaking the glass. When in- 
 closed in a tin cylinder, metal case, or tube, such 
 cylinder, case, or tube should have a lid or cover 
 so secured as to make the case or tube water- 
 tight, and should be securely fastened In a wooden 
 or papier iviache block (open only at one end) , and 
 not less in thickness and strength than above de- 
 scribed. Manufacturers or dealers intending to 
 transmit articles or samples In considerable quan- 
 tities should submit a sample package, showing 
 their mode of packing, to the postmaster at the 
 mailing office, who will see that the conditions of 
 this section are carefully observed. The limit 
 of admissible liquids and oils is not exceeding 
 four ounces, liquid measure. 
 
 Limit of weight of fourth-class matter (except- 
 ing liquids), four pounds. 
 
 The name and address of the sender, preceded 
 by the word "from," also any marks, numbers, 
 names, or letters used for description, such as 
 prices, quantity, etc., may be written on the wrap, 
 per of tourth-cliiss matter without additional post- 
 age charge. A request to the delivering post- 
 master may also be written asking him to notify 
 the sender in case the package is not delivered. 
 
 CANADA. -Same as In the United States, except 
 seeds, scions, bulbs, cuttings and roots are one 
 cent per ounce. 
 
 CT'BA.-The United States domestic rates of 
 postage and classification apply to all mail mat- 
 ter passing between the United States and Cuba 
 
ii8 A FIRST BOOK IN BUSINESS METHODS 
 
 MEXICO. Same as in the United States. Limit Commercial Papers 5c for the first 10 ounces or 
 
 of weight of single package, 1 Ibs. and 6 OK., ex-" less, and Ic for each additional 2 ounces or frac- 
 
 cept single printed books, which may weigh more. tion thereof. Limit of weight, 4 pounds and 6 
 
 Merchandise must be sent by parcel post. ounces. 
 
 Samples of Merchandise 2c for the first 4 ounces 
 
 . _..._. ~ or less, and Ic for each additional 2 ounces or frac- 
 
 FOREICN POSTAGE RATES tion thereof. Limit of weight. 12 ounces. 
 
 Parcel Post Exchange A parcel sent as parcel 
 
 Letters 5c fortlie first ounce or fraction thereof, post musr not be pot-ted in a letter box, but must 
 
 and 3c for each additional ounce. be mailed at the Foreign Branch, General Post 
 
 This rate applies to all countries in Postal Union, Office, or at uny postal station. Postage, 12c a pound 
 
 except countries above named, also letter mail to or fraction thereof. Limit of weight, 11 pounds. 
 
 Great Britain, Ireland, Germany (in German Ordinary letters for any foreign country (except 
 
 steamers only), and Newfoundland, for which see Canada, Cuba, and Mexico) must be forwarded 
 
 U. S. rates. whether any postage is paid on them or not. All 
 
 Postal Cards Single, 2c each; double, 4c each. other mailable matter must be prepaid, at least 
 
 Registration Fee on letters or other articles, lOc partially, 
 
 each. . U.S. Army and Navy-Rates on mail addressed to 
 
 Printed Matter Ic for each 2 ounces or fraction a member of the U. 8. Army or Navy, repardless of 
 
 thereof. Limit of weight, 4 pounds and 6 ounces. where stationed, are the same as domestic. 
 
 So. Post Office Money Orders. The method used by 
 most business men for paying accounts or obligations in a 
 distant city is by bank draft. There are, however, other 
 methods as safe and almost as convenient. One is by post 
 office money order, a method which positively insures the 
 sender against loss. All post offices are not money order 
 offices, and post office money orders may be used to send 
 money only to those places where there are such offices. 
 The cost varies with the amount of the order issued. 
 
 At all money order offices, money order blanks like 
 that shown in Form XCI. will be found. On this blank 
 the sender makes a written application for the money order 
 which he wishes to send. 
 
 81. Collection of Post Office Money Orders. After the 
 application is made out and the money for the order and 
 the charges for same are paid to the postmaster, the pur- 
 chaser is given an order by the postmaster which, after 
 detaching and retaining the receipt at the right, he will send 
 to the person to whom he wishes to pay the money. The 
 money order contains the name of the sender and of the 
 payee, who must be identified when he presents the order 
 to the postmaster at the place where it is to be paid. No 
 
GENERAL POSTAL INFORMATION 
 
 ng 
 
 Form XCI. 
 
 Dollars Cents 
 
 Stamp of IssuJnc Office 
 
 $ 
 
 (Form No. 6001) 
 
 The Postmaster 
 will Insert 
 
 here 
 
 the office drawn on, when the office named by the remitter in the body 
 of this application Is not a Money Order Office. 
 
 Spaces above this line are for the Postmaster's record, to be filled in by him. 
 
 Application for Domestic Money Order 
 
 Spaces below to be filled in by purchaser, or, If necessary, 
 by another person for him 
 
 Amount 
 
 Dollars Cents 
 
 Pay to I 
 
 Order of / 
 
 (Name of person or firm for whom order Is intended) 
 
 Whose 
 Address 
 
 is j No Street 
 
 Post ) 
 
 Office f _ 
 
 State , 
 
 Sent by 
 
 (Name of Seuder) 
 
 Address ) 
 
 ol y 
 seuder J No. Street 
 
 PURCHASER MUST SEND ORDER (ON BLUE PAPER) TO PAYEE 
 
120 A FIRST BOOK IN BUSINESS METHODS 
 
 Form XCII. 
 
 Fees for Money Orders drawn on 
 Domestic Form 
 
 Payable in the United States (which includes Hawaii 
 and Porto Rico) and its possessions comprising the Canal 
 Zone (Isthmus of Panama), Guam, the Philippines and 
 Tutuila, Samoa ; also for Orders payable in Bermuda, British 
 Guiana. British Honduras, Canada, Cuba, Mexico, Newfound- 
 land, the United States Postal Agency at Shanghai (China), 
 the Bahama Islands, and certain other Islands in the West 
 Indies mentioned in Register of Money Order Post Offices. 
 
 For Orders From S 0.01 to 5 2.50 3 cents. 
 
 From 5 2.51 to S 5.00 . .... Scents. 
 
 From $ 5.01 to S 10.00 
 FromS10.0l to$ 20.00 
 From $20.01 to 8 30.00 
 From $30.01 to 8 40.00 
 From $40.01 to 8 50.00 
 From 850.01 to 8 60.00 
 From 860.01 to $ 75.00 
 From 875.01 to 8100.00 
 
 8 cents. 
 
 ....10 cents. 
 ....12 cents. 
 
 15 cents. 
 
 ....18 cents. 
 . . . .20 cents. 
 . . . .25 cents. 
 30 cents. 
 
 Memoranda of Issuing Postmaster: 
 
 NOTB. The maximum amount for which >i single Money Order may be issued is $100. When 
 * larger sum is to be sent additional Orders must be obtained. Any number of Orders, may be 
 drawn on any Money Order office: but. if Orders are dr&wn in excess of $200 on any one day 
 apon an office of the 4th class, notice of the fact by letter for Form 6037 ) is to be promptly sent the 
 Department by the issuing Postmaster so that provision, may be made for payment. 
 
 Applications must be preserved at the office of issue for four years from date of issue. 
 (BoitioN December, 1909.) 
 
GENERAL POSTAL INFORMATION 
 
 121 
 
 money passes between one office and the other, merely the 
 order from one postmaster to the other to pay the amount 
 on the presentation of the order by the proper party. This 
 order from one postmaster to another is very similar then to 
 a bank draft. The postmaster will not pay the order to the 
 person named until he has satisfactory proof that the person 
 holding the order is the person named therein. 
 
 Form XCIII. 
 
 10100 
 
 Chicago, in. 
 
 171434 
 
 171434 
 
 171434 
 
 RECEIPT 
 
 Form for a Postal Money Order 
 
 Before paying the order the postmaster will require the 
 holder to receipt it. It is well, when one wishes to have a 
 postal money order cashed in a strange city, to have some 
 person identify him. If this is not practicable, he will 
 doubtless be required to exhibit papers of some kind through 
 which he may establish his identity to the satisfaction of the 
 postmaster. 
 
 A post office money order may be transferred by indorse- 
 ment, but only once. Banks frequently accept money orders 
 on deposit from their customers, but stamps of banks through 
 whose hands the order has passed are not regarded as indorse- 
 ments. 
 
122 A FIRST BOOK IN BUSINESS METHODS 
 
 82. Express Money Orders. All the leading express 
 companies issue money orders payable at any of their offices. 
 As these companies have offices in the principal cities of 
 Europe, where such orders may be cashed, this is a very 
 convenient means of carrying credit when traveling. Express 
 money orders may be secured at any office by making a writ- 
 ten application and paying a small fee. These orders are 
 negotiable to any extent, and are received by banks on deposit 
 as readily as checks or drafts. When the order is purchased, 
 the agent gives a receipt which should be preserved, for, 
 should the order be lost, the amount of the order can be 
 secured by giving the company an indemnity bond similar 
 to the one given in the case of a lost or stolen note. 
 
 Form XCIV. 
 
 II- 3556953 I 1 1" 355695s" 
 
 
 PAY TO THE ORDER OF . 
 
 THE SUM OF : ,-^ .-.-^. _ TooDoLLARS 
 
 An American Express Company Money Order 
 
 At times it is necessary to send money by telegram. This 
 method is very expensive, and for this reason it is used only 
 in case of great necessity. Comparatively few of the tele- 
 graph offices in the United States are money order offices. 
 The charge is i per cent of the amount, plus twice the toll 
 of a single fifteen-word message between the two places. 
 
GENERAL POSTAL INFORMATION 123 
 
 83. Registered Packages. The United States Govern- 
 ment, through its mail department, registers letters and 
 packages of all descriptions for the trifling sum of 10 cents 
 above the regular postage. Money is oftentimes sent by this 
 method, but the registration carries only a fifty-dollar guar- 
 anty that it will be delivered. Much currency and valuable 
 paper is, however, sent through the registered mail, the pack- 
 age being often insured in an insurance company. Every 
 post office through which it passes must keep track of it, and 
 should the package be stolen, the post office officials will make 
 a strong effort to discover the thief. The name and address of 
 the sender must be given on the outside of the envelope or 
 wrapper of all registered articles. All letters sent through the 
 mails should bear the name of the sender, so that they may 
 be returned to the writer if necessary. All post offices are 
 register offices, and money is sent by registered mail usually 
 from such offices as are not money order offices or such towns 
 as do not have express offices. 
 
 84. Coin or Bullion by Expre-ss. By far the safest method 
 of sending actual coin, currency, or bullion from one place to 
 another is by express. The money is placed in an envelope 
 by the shipper and is not counted by the express companies. 
 They simply guarantee the safe delivery of the package. 
 The cost of shipping money by this method varies with the 
 amount sent and the distance traveled. Large shippers of 
 money secure a special rate from the company. The United 
 States is given the very low rate of 15 cents for every $1,000 
 in currency, but as large amounts are carried the business is 
 profitable. Express companies have occasionally carried as 
 much as $16,000,000 at one time between Washington and 
 New York. 
 
124 A FIRST BOOK IN BUSINESS METHODS 
 
 85, Letters of Credit. Many persons visit foreign coun- 
 tries each year for pleasure or for the purpose of buying 
 goods or live stock, or of doing other kinds of business. 
 They do not wish to carry the amount of money with them 
 which they may need, for it would be both inconvenient and 
 unsafe ; therefore, they take with them either letters of 
 credit or bills of exchange. 
 
 A letter of credit is a letter issued by a bank, in which the 
 writer authorizes the person addressed to pay a certain sum 
 of money to the bearer. The bearer must be fully identified 
 and comply strictly with all the conditions of the letter before 
 he can receive the money. 
 
 On the paper called the letter of credit is printed a list 
 of the correspondents of the issuing bank, and the buyer of 
 the letter can secure all or any part of the value at any of the 
 banks mentioned. These banks are located in the principal 
 cities of one or various foreign countries. If the traveler 
 wishes, he may have.the letter made out payable in the money 
 of any of the countries. If in England, it would be payable 
 in pounds ; if in France, in francs ; if in Germany, in marks. 
 When the traveler receives the letter of credit, he signs his 
 name on its face and also gives the issuing banker various 
 other signatures, which are forwarded to the correspondent 
 banks. The signature of the holder in the presence of the 
 banker will then serve as an identification. As various sums 
 are drawn, the amounts are entered on the back of the letter, 
 thus enabling the correspondent banker to -see readily how 
 much is due the holder. When the last of the money is 
 drawn, the letter is taken up, canceled, and returned to the 
 issuing bank. This letter of credit answers the same pur- 
 pose as a bank draft. Should it be lost, the issuing and cor- 
 respondent banks should be immediately notified. 
 
GENERAL POSTAL INFORMATION 125 
 
 Example: Suppose Mr. Henry Thompson of Chicago wishes 
 a letter of credit to the amount of $5,000, on some banking house 
 in Leipzig, Germany. He may go to one of the banks in his city 
 and leave as security money or bonds or other articles of value, 
 and the bank will then issue to him a letter of credit. The money 
 expressed in the letter of credit would be in marks, as that is the 
 unit of value of German money. The value of a mark is equal to 
 about 23.3 cents of United States money, and $5,000 would be equal 
 to a little more than 2 1,000 marks. The letter of credit would read 
 as follows : 
 
 Form XCV. 
 
 LETTER OF CREDIT 
 
 CHICAGO, ILL., June 28, 1896. 
 MESSRS. KNAUTH, NACHOD & KUHNE, 
 Leipzig, Germany. 
 
 GENTLEMEN: We take pleasure in introducing to you Mr. 
 Henry Thompson, who purposes visiting Germany and France, 
 and desires us to open a credit with you for him for twenty-one 
 thousand marks. You will please honor his drafts to an amount 
 not exceeding the above-named sum, and charge the same to us, 
 with advice. 
 
 The signature of Mr. Thompson accompanies this. 
 Yours very respectfully, 
 
 BROWN & WILSON. 
 
 [Signature of Henry Thompson.] 
 
 Messrs. Brown & Wilson also send to the banking house of 
 Knauth, Nachod & Kuhne, by mail, a letter similar to the form 
 given below, notifying them that they have issued to Mr. Thomp- 
 son a letter of credit to the amount of 21,000 marks, and giving 
 them a description of him. If the letter of credit is not accepted 
 by the person to whom it is addressed, the writer of the letter 
 should at once be notified. 
 
126 A FIRST BOOK IN BUSINESS METHODS 
 
 Form XCVI. 
 
 LETTER SENT BY MAIL 
 
 CHICAGO, ILL., June 28, 1896. 
 MESSRS. KNAUTH, NACHOD & KUHNE, 
 Leipzig, Germany. 
 
 GENTLEMEN : We have to-day granted a letter of credit 
 on your house (as per enclosed duplicate) to Mr. Henry Thomp- 
 son, for 21,000 marks. Mr. Thompson is forty-five years of age, 
 five feet nine inches tall, has a light complexion, with light hair 
 and blue eyes. Yours very truly, 
 
 BROWN & WILSON. 
 
 Mr. Thompson, having his letter of credit, needs to take only 
 enough money for his journey to Leipzig. Arriving in that city, 
 he may draw from the banking house of Knauth, Nachod & Kiihne 
 any amount not exceeding 21,000 marks. They will run no risk, 
 because they have the letter from the bank in Chicago giving a 
 description of Mr. Thompson, and also agreeing to be responsible 
 for any amount Mr. Thompson may draw not exceeding 21,000 
 marks. Mr. Thompson could have taken a bill of exchange, but 
 when he wished to have it cashed at some banking house in 
 Germany he would need to be identified, and if he had no acquaint- 
 ances there, it would be difficult to get some one to do this. 
 The letter written by the bank giving a complete description of 
 him enables him to establish his identity to the banking house 
 of Knauth, Nachod & Kiihne. 
 
 However, people may purchase bills of exchange (see 87) 
 to take with them when traveling in foreign countries. 
 Sometimes they take bank drafts on some bank in New York. 
 These drafts may be cashed at any banking house in Europe 
 by paying a small amount for exchange and by being properly 
 identified. 
 
GENERAL POSTAL INFORMATION 
 
 127 
 
 86. Travelers' Checks. Travelers checks are now issued 
 by express companies and by the American Bankers Associa- 
 tion. These are largely taking the place of letters of credit, 
 bills of exchange, and bank drafts. When these checks are 
 
 Form XCVII. 
 
 Travelers' Checks 
 
 purchased the purchaser signs his name on the check, and 
 when the check is cashed he again places his name on it, 
 which establishes his identity. 
 
 These checks may be had in any quantity and in the 
 denominations of $10, $20, $50, and $100 (express companies 
 
128 A FIRST BOOK IN BUSINESS METHODS 
 
 issue a check for $200) with the exact amount of foreign money 
 paid therefor in the principal countries of Europe printed on 
 each check. As these checks may be cashed in any of the 
 principal cities of the world, they afford a very convenient 
 and safe form of travelers' credit. 
 
 Form XCVIII. 
 
 1346 CHICAGO, ILL., Oct - **> 19 01 
 
 MARKS, 1^75.85 
 
 Thirty days AFTER D ATE (DUPLICATE UNPAID) PAY TO THE 
 
 ORDER OF Knauth, Nachod & Kuhne, 
 
 One thousand eight hundred and seventy-five and 85 MARXS 
 
 100 
 
 VALUE RECEIVED, AND CHARGE THE SAME TO OUR ACCOUNT. 
 
 . Wilson & Co. 
 
 A Foreign Draff f he Original 
 
 134G CHICAGO, in.., Oct. 
 
 1875.85 
 
 Thirty days AFTFR DATE (ORIGINAL UNPAID) PAY TO THE 
 ORDER OF _ Knauth, Nachod & Kuhne, __ 
 One thousand eight hundred and seventy -five and 85 MAR[CS 
 
 100 
 
 VALUE RECEIVED, AND CHARGE THE SAME TO OUR ACCOUNT. 
 
 **!?* Janes H.WUson* Co. 
 
 The Duplicate of the above Foreign Draft 
 
GENERAL POSTAL INFORMATION 129 
 
 87. Bills of Exchange. A draft drawn by one bank on 
 another in its own country is sometimes called an inland bill 
 of exchange. If it is drawn upon a bank in another country it 
 is called a foreign bill of exchange. 
 
 Foreign bills of exchange were formerly drawn in sets of 
 two or three and were sent by different mails, so that if one 
 should get lost the other would probably reach its destination 
 and thereby save any unnecessary delay and annoyance ; for 
 the person in whose favor the bill of exchange was drawn 
 could get the one that reached him first cashed at once. 
 
 Drafts drawn on private individuals or on business firms in 
 foreign countries were also drawn in duplicate, and this method 
 is still used to some extent, especially if the draft is for pay- 
 ment of goods, and is attached to a bill of lading; for, if a 
 single draft be drawn and is lost, the consignee could not get 
 his goods until a duplicate could be obtained. It has become 
 customary for banks in nearly all cases to issue foreign bills of 
 exchange singly. 
 
 QUESTIONS AND EXERCISES ON CHAPTER VI. 
 
 /. What is meant by first-class mail matter ? 
 
 2. What is second-class mail matter? 
 
 3. Name some articles which are third-class mail -matter ; 
 fourth-class. 
 
 ^. How much would it cost to send by mail a package of 
 merchandise weighing six ounces ? 
 
 5. Name some articles which cannot be sent by mail. 
 
 6. How much would it cost to send a letter from Chicago, 
 111., to London, England? How much to send a letter from 
 Detroit, Mich., to Mexico ? 
 
 7. What is the limit of weight for third-class matter? 
 
130 A FIRST BOOK IN BUSINESS METHODS 
 
 8. What is a post office money order ? 
 
 9. Do all post offices issue money orders ? 
 
 10. For how large an amount may a post office money 
 order be purchased ? 
 
 //. What is the cost of having a letter or package regis- 
 tered ? 
 
 *2. What is a letter of credit? 
 
 ij. What is a domestic bill of exchange ? 
 
 7^. What is a foreign bill of exchange ? 
 
 75. Is a letter of credit more convenient for a person 
 traveling in Europe, and if so, why ? 
 
 16. Why are foreign bills of exchange usually drawn in 
 sets of two or three ? 
 
 GENERAL REVIEW EXERCISES 
 
 7. J S. Harwood is owing you $125 on account, which 
 is past due. He sends you a check for $75.00 in part pay- 
 ment, and asks for more time in which to pay the balance. 
 Write a letter thanking him for the remittance, and also 
 grant his request for more time for payment of the balance, 
 but stipulate when the money shall be paid. 
 
 2. You receive a letter from H. B. Miller & Co. of Rock- 
 ford, Iowa, claiming that the goods you sent them in your last 
 shipment were of inferior quality, and asking for a rebate of 
 $25.00. Write their letter. 
 
 j. Write a polite reply to their letter, declining to allow 
 them a rebate, and tell them why. 
 
 4. What is the object in post-dating a check? 
 
 5. Why is it better to have a check drawn payable to the 
 " order" of the payee than to "bearer"? 
 
 6. If a person has a check which he does not wish to use 
 for some days, why is it better to have it certified ? 
 
GENERAL POSTAL INFORMATION 131 
 
 7. What is a restrictive indorsement ? 
 
 8. What is meant by the term " joint makers " ? 
 
 p. What does the expression " without recourse " mean? 
 
 10. Of what use are drafts ? 
 
 11. Explain how collections are made by drafts. 
 
 12. If a draft is drawn by one person upon another who is 
 in his debt, is the drawee obliged to accept the draft ? 
 
 ij. If he did not accept it, what object would there be in 
 having it protested ? 
 
 14. What is an accommodation note ? 
 
 /5. What is the object in signing as an accommodation 
 party ? 
 
 16. When is a note said to be outlawed? 
 
CHAPTER VII. 
 
 PETITIONS, POWER OF ATTORNEY, COMMERCIAL 
 AGENCIES, MISCELLANEOUS 
 
 88. Forms of Petitions. Most people, whether living in 
 a city, town, or in the country, sometimes have occasion to 
 petition those in authority for some improvement which they 
 wish to have made, or the abatement of some nuisance, or for 
 the granting of some favor, or the enactment of some law. 
 While it is a very simple matter to write a petition, those who 
 have had but little experience in matters of this kind may 
 find the following forms of assistance : 
 
 Form XCIX. 
 
 PETITION FOR OPENING A STREET 
 
 To the Mayor and Aldermen of the City of Burlington, in Common 
 
 Council assembled: 
 
 GENTLEMEN: The undersigned respectfully solicit your hon- 
 orable body to open and extend Walnut Street, which now termi- 
 nates at Adams Street, through blocks Nos. 10 and 12 in Hall's 
 Addition, to Benton Street, thereby making Walnut Street a 
 nearly straight and continuous street for two miles, and greatly 
 accommodating the people in that portion of the city. 
 
 (Here insert city, state, and date.) 
 
 (Signed by two hundred taxpayers, more or less.) 
 
 [132] 
 
PETITIONS 133 
 
 Form C. 
 
 PETITION TO SCHOOL BOARD 
 
 To the Honorable Members of the Board of Education of the City 
 
 of Racine : 
 
 GENTLEMEN: We, the undersigned citizens of the city of Racine, 
 are personally acquainted with Mr. John Wood of this city, and 
 know him to be an industrious and reliable man who we believe 
 would fill the position of janitor of our High School building in a 
 very satisfactory manner. As he is desirous of obtaining this 
 position, we respectfully petition your honorable body to appoint 
 him to fill the place. 
 
 (Here insert city, state, and date.) 
 
 Form CI. 
 
 PETITION TO A GOVERNOR 
 
 To His Excellency , the Governor of the State of. : 
 
 The petition of the subscribers, citizens of , in the 
 
 County of , State of , respectfully shows that, etc. 
 
 (as in the above forms). 
 
 89. Heading for a Subscription Paper. It is a very sim- 
 ple matter to arrange the heading for a subscription paper, 
 but for one who has had no experience in such matters, the 
 following form may be of assistance : 
 
 Form CII. 
 
 We, the undersigned, hereby subscribe and agree to pay the amount set 
 opposite our respective names to William Wood, for the purpose of defraying 
 
 the expenses of a Street Fair to be held in the city of , October 4th, 
 
 5th, and 6th, 1901. 
 
 Name. Amount. Name. Amount. 
 
 NOTE. The writing should be very plain and the wording as brief as pos- 
 sible to explain fully the object for which the money is subscribed. 
 
134 A FIRST BOOK IN BUSINESS METHODS 
 
 90. Proxy. A proxy is a writing" by which one person 
 authorizes another to vote in his place. 
 
 Form CHI. 
 
 KNOW ALL MEN BY THESE PRESENTS, That /, Hiram S. Cole 
 
 of , do hereby appoint George W. Woodworth of , 
 
 my attorney for me in my stead, to vote as my proxy, at a certain election of 
 
 directors of the Company, to be held on the day of , 
 
 1902, according to the number of votes / should be entitled to cast if per- 
 sonally present. 
 
 Witness my hand and seal thisyfrj/ day of November^ 1902. 
 
 HIRAM S. COLE. 
 
 91. Power of Attorney. It is sometimes necessary for a 
 firm or an individual doing a large business to employ others 
 to act as collectors or agents, and .they are frequently required 
 to transact business a long distance - from the home office, 
 where it may be necessary for the agent to sign a deed or 
 execute a mortgage. In such cases the agent is given what is 
 termed a power of attorney, which permits him to exercise the 
 same authority as the principal would have. 
 
 Form CIV. 
 
 KNOW ALL MEN BY THESE PRESENTS, That /, Charles W. 
 
 Carson of Jackson, in the County of Jackson and State of Michigan, have 
 made, constituted, and appointed, and by these presents do make, constitute, 
 and appoint Glen W. Rogers of Sal 'em , County of Marion and State of 
 Illinois, a true and lawful attorney for me, and in my name ; place, and stead, 
 and in my behalf, to [here insert the things which the attorney is to do], 
 hereby giving and granting unto my said attorney full power and authority in 
 the premises to do and perform all such acts, matters, and things as my said 
 attorney shall deem necessary and expedient for the completion of the authority 
 hereby given, as fully as / might or could do if personally present, hereby 
 ratifying and confirming all that my said attorney shall lawfully do or cause 
 to be done by virtue hereof. 
 
 In witness whereof, / have hereunto set my hand and seal, this third 
 day of June, in the year of our Lord one thousand eight hundred and ninety- 
 seven. 
 
 Signed and sealed in the presence of ) CHARLES W. CARSON. 
 \ [SEAL.] 
 
COMMERCIAL AGENCIES 135 
 
 Form CV. 
 
 REVOCATION OF POWER OF ATTORNEY 
 
 KNOW ALL MEN BY THESE PRESENTS, That whereas, /, John 
 E. Smith, in and by my letter of attorney bearing date August 4, 1897, did 
 make, constitute, and appoint Samuel Jones my attorney, as by the said letter 
 of attorney will more fully and at large appear : 
 
 Now know ye, that /, the said John E. Smith, have revoked, counter- 
 manded, and made void, and by these presents do revoke, countermand, and 
 make void, the said letter of attorney above mentioned, and all power and 
 authority thereby given or intended to be given to the said Samuel Jones. 
 
 In witness whereof, /have hereunto set my hand and seal this jd day of 
 December, 1897. 
 
 In the presence of ) JOHN E. SMITH. 
 
 fohn Tones, \ 
 
 George Wilson. } [SEAL.] 
 
 If power is given to convey lands, the same regulations 
 regarding its acknowledgment by husband and wife are 
 required as would be required in a deed, and as a general rule 
 a power of attorney should be acknowledged before a notary 
 public. 
 
 92. Commercial Agencies. The two largest commercial 
 or mercantile agencies in this country are Dun & Co.'s and 
 Bradstreet's. These firms publish reports of the credit or 
 financial standing of men in all lines of business. They get 
 their information from their agents, who are located in all 
 parts of the country, and from various other sources. The 
 service has been so much improved of late years that the 
 information which they furnish is of great assistance to the 
 business man who gives credit to his customers. 
 
 Example : Suppose Mr. John Smith, who lives in Smithtown, 
 should order a bill of goods from some firm which has no business 
 acquaintance with Mr. Smith and which has no knowledge of his 
 financial standing. It would be quite necessary that the firm of 
 whom he ordered the goods should get some information as to 
 
136 A FIRST BOOK IN BUSINESS METHODS 
 
 Mr. Smith's ability to pay, before giving him much credit. This 
 information they may get from Dun & Co.'s or Bradstreet's com- 
 mercial reports. If they do not get the desired information from 
 these commercial reports, they can get a special report by apply- 
 ing for it at the offices of these agencies. 
 
 The information which these commercial agencies furnish 
 is obtained by their agents, from individuals, and by consult- 
 ing the tax lists, deed, mortgage, and judgment records, etc., 
 and this information may generally be relied upon. The 
 expense to subscribers is small in comparison with the bene- 
 fit which they derive from the reference books and the reports 
 of the agencies. If a business man in any part of the country 
 places a mortgage upon his goods or becomes bankrupt, the 
 subscribers of these commercial agencies are notified by the 
 reports which the agencies publish. 
 
 Form CVI. 
 
 INSIDE COVER OF REFERENCE BOOK 
 
 This book is tJie property of the 
 Commercial Agency. 
 
 It is loaned to subscribers under a 
 certain specific agreement, and is to 
 be returned as per conditions of the 
 agreement under which it is loaned. 
 
COMMERCIAL AGENCIES 
 
 137 
 
 Form CVII. 
 
 KEY 
 
 The omission of a rating is not intended to reflect upon a party's credit. It 
 simply implies that we have not the information upon which to base a rating. 
 
 f- 
 
 9 m n Eb W we. 
 
 u i n 
 
 1st 
 
 2d 
 
 3d 
 
 
 $1,000,000 and 
 
 above. | 
 
 
 
 
 
 500,000 to 
 
 $1 ,000, 000 j 
 
 Aa 
 
 A 
 
 B 
 
 J 
 
 400,000 to 
 
 500,0001 
 
 
 
 
 
 300,000 to 
 
 400,000 
 
 
 
 
 
 250 000 to 
 
 300 000 I 
 
 
 
 
 
 
 
 200,000 to 
 
 250,000 i 
 
 
 
 
 
 150,000 to 
 
 200, 000 j 
 
 
 
 
 
 100,000 to 
 
 150,0001 
 
 
 
 
 
 75,000 to 
 
 100,000 1 
 
 
 
 
 
 50,000 to 
 
 75 000 1 " 
 
 
 
 
 
 D 
 
 
 35,000 to 
 
 50, 000 J 
 
 
 
 
 
 20,000 to 
 
 35,0001 
 
 
 
 
 
 10 000 to 
 
 20 000 1 - 
 
 
 Q 
 
 f 
 
 
 
 5,000 to 
 
 10 000 )' 
 
 
 
 
 
 3,000 to 
 
 5,0001 
 
 
 
 
 
 2,000 to 
 
 3,000 1- - - 
 
 ....D 
 
 
 
 
 
 1,000 to 
 
 2,OOOJ 
 
 
 
 
 Y 
 
 500 to 
 
 1,000) 
 
 
 
 
 
 to 
 
 500 j 
 
 
 
 
 
 
 
 
 
 
 GRADES OF CREDIT 
 
 The division sign (-T-) indicates more than one business. 
 
 93. Reference Books of Commercial Agencies. The com- 
 mercial agencies publish reference books quarterly, in January, 
 March, July, and September of each year. They also publish 
 notification sheets, which appear more frequently; some of 
 them weekly and some monthly. These notification sheets 
 
138 A FIRST BOOK IN BUSINESS METHODS 
 
 record the names of new firms, changes in old ones, fires, 
 failures, judgments, etc. 
 
 The forms below will show how the pages of the reference 
 books and the notification sheets are made up, and the nature 
 of the information : 
 
 Form CVIII. 
 PART OF PAGE OF STATE REFERENCE BOOK 
 
 KANSAS 
 
 DRURY, [S. E. C.] Sumner. 
 
 40 
 On Kansas Southwestern R. R. Pop. 11 
 
 Tel., *, Ex. and $ South Haven, 5J^ 
 
 miles. 
 
 McDougall Edward Gen. Store W E 
 
 Raypholtz William M iller T C 
 
 DRYWOOD, [S. E.] Crawford. 
 
 40 
 
 Six and one-half miles from Pawnee Sta- 
 tion Pop. 12 Tel. and Ex. Pawnee 
 Station * Cato, 1% miles t Arcadia, 
 
 8 miles. 
 
 Beebe E. C Blacksmith 
 
 Coonrod Bros Gen. Store X D 
 
 WashburnJ.E Grocer Z E 
 
 DUBUQUE, [C.] Russell. 
 
 40 
 Eleven miles from Dorrance Pop. 20 Tel., 
 
 * and Ex. Dorrance t Wilson, 13 miles. 
 WeberN Gen. Store -* S C 
 
 DUN, [S. E.] Wilson. 
 
 On Kansas Division St. Louis & San Fran- 
 cisco R. R. Pop. 38 Tel-, *, Ex. and % 
 Neodesha, 5 miles. 
 
 AdellC. S ....Gen. Store 
 
 Browning V. L Mill E 
 
 DUNAVANT, [N. E. C.] Jefferson. 
 
 40 
 On Kansas City & Northwestern R. R.Pop. 
 
 50- Tel. *- Pacific Ex. -I Winchester, 5 
 
 miles. 
 
 Becker Charles Hardware, &c X D 
 
 Becker Henry & Co ..Lumber V D 
 
 Jacquemiu C. N. & Co Gen. Store T C 
 
 EDSON [N. W.] Sherman. 
 
 40 
 
 On Chicago, Rock Island & Pacific R. R. 
 Pop. 15 Tel., *, Ex. and J ' Ooodland, 
 
 9 miles. 
 
 Day A Gen. Store W D 
 
MISCELLANEOUS 139 
 
 Form CIX. 
 
 PART OF A NOTIFICATION SHEET SHOWING CORRECTIONS AND 
 
 CHANGES 
 
 MISSOURI 
 
 Anabel Overstreet G. W..G. 8.... .Sold out 
 
 Ash Grove Rose & Co..D. G. &c Cannon & Strader 
 
 succeed 
 
 Auxvasse Adams Bros.-G. S A. C. Adams deceased 
 
 Boonville-Eppstein & Hain..G. S Veit Eppstein 
 
 Carthage Carp H . . D. G. &c Moved to Joplin 
 
 Head&Baird..-Blksths Dissolved 
 
 Cassville MarbutT. A..Gro Selling out 
 
 Clarksville-Nicklin W. P. & Co.. Drugs.... W. P. Nicklin 
 
 succeeds 
 
 Clinton Wright- Austin Candy Co Dissolved 
 
 Commerce -Ireland A. N..G. S Sold to B. C. Moore 
 
 Hannibal Bowles & Tray nor.. Clo.&c. . J. J. Bowlessuc'ds 
 Harrisonville Frazier J. A. .Gro . .. . . Bill of sale $350 
 
 94. Legal Tender. That kind of money which has been 
 declared by law to be suitable to offer for the payment of a 
 debt is called legal tender. 
 
 Under the United States Statutes, legal tender is as fol- 
 lows : Gold coin is legal tender at its nominal or face value 
 for all debts, public and private, when not below the standard 
 weight and limit of tolerance prescribed by law; and when 
 below such standard and limit of tolerance it is legal tender 
 in proportion to its weight. Standard silver dollars are legal 
 tender at their nominal or face value in payment of all debts, 
 public and private, except where otherwise expressly stipu- 
 lated in the contract. Subsidiary silver is legal tender for 
 amounts not exceeding $10 in any one payment. The minor 
 coins of nickel and copper are legal tender to the extent 
 of 25 cents. Treasury notes of the act of July 14, 1890, are 
 legal tender for all debts, public and private, except where 
 
140 A FIRST BOOK IN BUSINESS METHODS 
 
 otherwise expressly stipulated in the contract. United States 
 notes are legal tender for all debts, public and private, except 
 duties on imports and interest on the public debt. 
 
 Gold certificates and silver certificates are receivable for all 
 public dues. National-bank notes are receivable for all public 
 dues except duties on imports, and may be paid out by the Gov- 
 ernment for all salaries and other debts and demands owing- by 
 the United States to individuals, corporations, and associations 
 within the United States, except interest on the ptiblic debt and in 
 redemption of the national currency. 
 
 95. How to Make Change. The most convenient and 
 accurate way to make change is by addition. 
 
 Example: If you buy something that costs $3.37 and in pay- 
 ment hand the salesman a five-dollar bill, he would not subtract 
 $3.37 from $5.00 to find out how much change you should receive. 
 He would first get 3 cents from the money drawer and add it to 
 the amount of your bill, $3.37, making $3.40; then perhaps he 
 would add a dime to the $3.40, making $3.50; then 50 cents, 
 making $4.00; then $1.00 more, making in all $5.00. 
 
 The salesman does not know, perhaps, just how much 
 change he gave you, nor is it necessary that he should know, if 
 the money you receive, added to the amount of your purchase, 
 equals the amount of the bill which you handed to him. In 
 counting your change, add just as the salesman did and you 
 will find it a more convenient method than subtracting. 
 
 96. Marking Goods. Merchants have various ways for 
 marking goods so that the cost price may be known to the 
 salesman only. Many use a word or a combination of words 
 containing ten different letters, each letter representing a 
 single figure. 
 
MISCELLANEOUS 141 
 
 Example : For illustration, let us take the word 
 
 PURCHASING 
 1234567890 
 as a marking key. 
 
 Now if the cost of an article be $2.75 the mark would be USH 
 and if the cost be $3.50 the mark would be RHG. 
 
 Sometimes an extra letter called a repeater is used to prevent 
 repetition. For example, we will use X for the repeater. Now if 
 the cost of an article be $2.55, instead of marking it UHH the 
 mark would be UHX. 
 
 Below are a few words and phrases which may be used as 
 marking keys : 
 
 Authorized Previously 
 
 Importance Sent by mail 
 
 Parchments Cash profit 
 
 Now be quick Hard moneys 
 
 97. Suggestions for Pen-Lettering and Brush-Marking. 
 
 Everyone should learn how to mark neatly and plainly, with 
 pen or brush, packages, boxes, and bulletins ; and this is some- 
 thing which may be so easily learned that any person, by a 
 little practice, can do the work as well as the copies given 
 on page 142, which are taken from actual work. 
 
 1 . Care should be taken to have the letters slant well back 
 to the left and to have the heaviest part of the down stroke 
 come just on the line. 
 
 2. A very good way to mark packages and small signs is 
 to use a flexible steel pen. Until one has learned the forms 
 of the letters, a pen is much better to practice with than a 
 brush. The ability to make a nice sign comes from practice, 
 but by practice almost anyone may learn to do good work. 
 
 3. If a brush is used, get a good one of red sable, with 
 
142 A FIRST BOOK IN BUSINESS METHODS 
 
 long hair, No. 6 or 8. Then get a can of Ivory black paint, 
 Distemper color of any good brand, ground in water. 
 
 4. If you do not wish to expose a sign to the rain, water 
 colors are much better than oil, for they are cleaner and 
 cheaper, and the brushes and hands may be washed clean, 
 with water, in a moment. 
 
 5. Put a small quantity of the Ivory black in a separate 
 cup or pot and thin it down with water to about the consist- 
 ency of writing ink. A little mucilage should be added to 
 
 Form CX. 
 
 An Alphabet for Brush-Marking' 
 
 the paint to prevent it from rubbing off, and if you wish it to 
 dry quickly, add a little alcohol. 
 
 6. Do not get enough paint on the brush so that it will 
 drip. Get some old pieces of paper or cardboard, take your 
 brush between the thumb and index finger and you are ready 
 to begin. 
 
 7. The hand may be steadied by letting the little finger 
 rest lightly on the card or desk. 
 
 By following these suggestions and the copies given above, 
 any one may soon learn to make a good plain sign or to mark 
 a box or package very well. 
 
MISCELLANEOUS 143 
 
 QUESTIONS AND EXERCISES ON CHAPTER VII. 
 
 7. What is a petition ? 
 
 2. Draw up a petition addressed to the proper authorities, 
 asking that a street lamp be placed on the corner near your 
 house. 
 
 j. Write a petition asking that a night watch be appointed 
 for that part of the city in which you live. 
 
 4. Mr. Charles Wood wishes to be appointed postmaster 
 of the town in which he lives, and he asks you to write a 
 petition which he may have signed by his friends and neigh- 
 bors who approve of his appointment. Write his petition. 
 
 5. Write a suitable heading for a subscription paper for 
 raising money with which to purchase a piano for the public 
 school in your town. 
 
 6. Write a suitable heading for a subscription paper for 
 the purpose of raising funds for defraying the expenses of an 
 appropriate celebration on the Fourth of July in your city. 
 
 7. What is a power of attorney? 
 
 8. How may a power of attorney be revoked ? 
 
 p. Is it necessary to have a power of attorney acknowl- 
 edged before a notary ? Are any witnesses required ? 
 
 10. Could a mortgage be executed by a power of attorney 
 which would be legal ? 
 
 77. Name two of the leading commercial agencies in the 
 United States. 
 
 12. Of what use are these agencies to business men ? 
 
 7j. May the information which they furnish be relied 
 upon? 
 
 7^. How do they get their information regarding the 
 business standing of individuals and firms doing business in 
 various parts of the country ? 
 
144 A FIRST BOOK IN BUSINESS METHODS 
 
 75. Your store, No. 430 State Street, is rented to J. W. 
 Simpson, who pays you $27.50 for one month's rent. Write 
 a receipt for the amount paid. 
 
 16. Write a due bill for the balance of your account, due 
 S. N. Howe, $25.65, payable in goods from your store. 
 
 77. Write an order on C. H. Groves & Co., dealers in cloth- 
 ing, in favor of your hired man, William Smith, for $28.25. 
 
 1 8. You buy a horse of L. W. Rowley for $135 and give 
 him your note at sixty days in payment. Write the note, 
 making it to draw interest at 6 per cent from date. At the 
 end of the sixty days you figure up the amount due and give 
 him a check on the First National Bank for the amount. 
 Write the check, making it payable to "order." Ten days 
 after, Mr. Rowley notifies you that he has lost the check and 
 asks you to give him a duplicate check. Write the duplicate 
 check. 
 
 7p. H. W. Peters, who lives at Manistee, Mich., owes you 
 $145.35. Draw a sight draft on him for the amount and 
 notify him that you have drawn on him. 
 
 20. R. B. Thompson buys a bill of goods of you amount- 
 ing to $345.75 and gives you in payment a check on the First 
 National Bank. Write the check and ask him to have it 
 certified. Write the certification in its proper place on the 
 check. You sell the check to Howe & Powers and indorse it 
 over to them. Write the indorsement. 
 
 21. You owe Johnson Bros., grocers, Chicago, $125.45, and 
 they draw a draft on you for the amount, at sight. Accept 
 the draft when presented. When will the draft be due ? The 
 exchange on the draft is 25 cents. Write a check on the City 
 National Bank for the whole amount of draft and exchange. 
 
 22. You ship to D. W. Kingsley, Michigan City, Ind., 
 13,500 feet of lumber at $14.50 per 1,000 feet, and they ask for 
 
MISCELLANEOUS 145 
 
 a rebate of $15.00 on account of the poor quality of some of 
 the lumber. Make out a credit memorandum for them. 
 
 23. You ship to Packard & Jones, Chicago, to be sold on 
 commission : 
 
 42 bbls. Baldwin apples. 
 
 35 " greenings. 
 
 10 " pears. 
 
 Make out the shipping invoice. 
 
 24.. You ship to G. H. Woodham & Sons, Toronto, Canada 
 
 23 bbls. Baldwin apples, @ $3.25 
 
 50 " Wagner " @ 3.00 
 
 400 baskets grapes, @ .15 
 
 What invoices and other papers are necessary ? 
 
 They send you a New York draft in payment, and by mis- 
 take they have the initials of your name wrong. How can 
 you get the money on the draft ? 
 
 GENERAL REVIEW EXERCISES 
 
 /. How should a letter be addressed to the President of 
 the United States ? 
 
 2. How should a letter be addressed to the Lieutenant- 
 Governor of your state ? 
 
 j. You wish to write a letter to the president of a college. 
 Show how the heading should be arranged, including the 
 address and salutation, and the proper punctuation. 
 
 4.. Show how a billhead should be arranged for a quantity 
 of goods which you sell to S. R. Woodbridge. 
 
 5. You work in the office of Culver & Smith three days 
 and two hours at $2.25 per day. Make out your bill for same. 
 
 6. J. C. Fillmore owes you for twelve cords of wood at 
 10 
 
146 A FIRST BOOK IN BUSINESS METHODS 
 
 $2.20 per cord. Make out your bill. You sell the account to 
 H. M. Powers. Write the assignment of the account. 
 
 7, You send a shipment of goods to G. W. Haywood, 
 Cedar Rapids, Iowa, and mail him an invoice of same. At 
 the expiration of ten days he writes you that no invoice has 
 been received. What should you do? 
 
 8. How is a check certified ? 
 
 p. What is a stub of a check, and of what use is it ? 
 
 10. If a person holds a certificate of deposit for $100 on 
 the First National Bank and wishes to use $50.00 of the 
 amount, how can he get the money? 
 
 11. What is the difference between a promissory note and 
 a bill of exchange ? 
 
 12. When may commercial paper be transferred without 
 any indorsement? 
 
 7j. Is there any difference between a bank draft and a 
 domestic bill of exchange ? 
 
 14.. What is a post office money order? 
 
 75. Are post office money orders more convenient for 
 making remittances than bank drafts? 
 
 16. Why are post office money orders used in some cases 
 in preference to bank drafts ? 
 
 77. What is the maximum amount for post office money 
 orders ? 
 
CHAPTER VIII. 
 
 RAILROAD AND EXPRESS BUSINESS 
 
 98. Shipping Orders and Bills of Lading. When goods 
 are shipped by railroad or by steamboat, the person shipping 
 the goods, who is called the consignor, fills out a skipping order, 
 which is a written statement of the goods shipped, conditions 
 of shipment, etc. 
 
 Form CXI. 
 
 MICHIGAN CENTRAL RAILROAD HOMPANY 
 
 THIS SHIPPING ORDER <*t*l* .. UKMi *. 
 
 RECEIVE, jubjtct to the cU<tion. / ^od uria.io .Sect OD the <bu of IIK ol ibis Shipping Ode, 
 
 _la HI . Cl 
 
 M.arii.CM.1 M| nmi 
 
 J8 
 
 I? 
 
 &PCIALW 
 
 Shipping Order 
 (147) 
 
148 A FIRST BOOK IN BUSINESS METHODS 
 
 FormCXII. 
 
 MICHIGAN HENTRAL RAILROAD COMPANY 
 
 STRAIGHT BILL OF LADING ORIGINAL NOT NEGOTIABLE. Sh "" > "* "" 
 
 lES'H-SrS'H'l^H;^ 
 
 Tbertteollrngbllrom. 
 
 ' """' JL'- 
 
 Bill of Lading 
 
 Form CXI. shows how a railroad shipping order should be 
 filled out. At the same time a shipping order is made, a bill 
 of lading and a memorandum of same are also made. (See 
 Forms CXI., CXIL, CXIII.) The shipping order, the bill of 
 lading, and memorandum are much alike, but the heading of 
 each is different. 
 
 The shipping order is signed by the consignor and is for 
 the use of the railroad agent. The bill of lading is signed 
 by the railroad agent and is for the consignor, it being his 
 
RAILROAD AND EXPRESS BUSINESS 
 
 149 
 
 receipt for the goods which he has left with the railroad 
 company for shipment. As a rule the consignor sends his 
 copy of the bill of lading to the consignee, who is the person 
 to whom the goods are shipped. When the consignee receives 
 his bill of lading of goods shipped to him, he has something 
 to show that the goods are his and that they should be 
 delivered to him. 
 
 The memorandum is an acknowledgment that a bill of 
 lading has been issued; it is usually retained by the shipper 
 and filed by him for record. 
 
 Form CXIII. 
 
 Form of Railroad Memorandum 
 
 99. Railroad Expense Bills. The cost for freight on 
 goods shipped from one place to another by railroad is 
 not paid until the goods reach their destination; then the 
 
150 A FIRST BOOK IN BUSINESS METHODS 
 
 railroad agent where the goods are delivered to the consignee 
 makes out what is called an expense bill, showing all the 
 statement of transportation charges. Two copies of this bill 
 are made, one of which is signed by the consignee to show 
 that he has received the goods. This copy the railroad agent 
 keeps. The other is signed by the railroad agent and is 
 retained by the consignee as a receipt for the money which 
 he paid for freight on the goods. 
 
 Form CXIV. shows an ordinary railroad expense bill. 
 
 Form CXIV. 
 
 FREIGHT BILL 
 
 CONSIGNEE 
 
 DESTINATION- 
 
 To Chicago, Burlington & Qumcy Railway ^7, Dr. 
 
 I ^ -V M - V - ' 
 ARTICLES AND MARKS 
 
 NO. dr PKOS 
 
 RATE FREIGHT ADVANCES TOTAL 
 
 _____ , -- ____________ ,- 
 
 'on, V.I.AI A> O.MI.U .w. Original Paid Freight Bills should accompany all Claims tor Overcharge, Los* or Damage 
 
 Form of Railroad Expense Bill or Freight Bill 
 
 loo. Manifest of Articles Exported from the United States. 
 
 When goods are shipped by railway for exportation from 
 the United States to any foreign country, it is necessary for 
 
RAILROAD AND EXPRESS BUSINESS 
 
 the shipper to make out what is called a manifest, which 
 he delivers to the freight agent with the regular shipping 
 receipt. Blank manifests may be obtained from any railroad 
 company. 
 
 The manifest is a statement showing what goods are 
 shipped, and their value, and it is for the use of the custom 
 house officers. (See Form CXV.) 
 
 When goods are shipped by express for export, the shipper 
 delivers to the express agent a copy of the invoice, showing 
 the kind and value of the goods shipped, and to this the 
 manifest is attached. 
 
 Form CXV. 
 
 MICHIGAN 
 
 OWNER'S OR AGENT'S MANIFEST OF ARTICLES EXPORTED BY RAILWAY 
 
 List or manifest of articjeffof comestic production or manufacture, and of for 
 
 J>n.M. r rf.rlh,p*j.fyf ^^^t^V^^^^^^^^J^f-f^^-.^ ,,. , tO the 
 
 eign articles, free of duty or duty 
 MICHIGAN CENTRAL RAILROAD COMPANY, 
 
 
 for cxpirtatiarStn <^#r<J& (glU^/^ ,/ a ^f^^^ 
 
 Hu t ,o...K.4.adMi,^,.lol,.o,..u,. <l.^l u i r . n i.U.V.S..b.U.Udu U b<.fa n l(.cc. U 7 
 
 MASITfl ABB OTKIEBS OF t AOKAOa 
 
 DESCBIPTIOH OF ABTIOLE9. 
 
 DOMESTIO AfiTIOLES. 
 
 rinffl inicla rra of Wtr or tuiy r.,1 
 
 QautHia. 
 
 Vilna. 
 
 ^*BSfe^ 
 
 Vilua 
 
 /5L~ ;<&> - <& 
 
 ^^^, &<Z&t& 
 
 ; . 
 
 !^r*2 
 
 
 ^^s~^&^J?. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 *** certify that tht atovt U a full anJLtrue ttatement of the kindi. Quantities and 
 
 valuet. and destination of all Uu>\article> delivered by m / exportation a, af 
 
 A Railroad Manifest 
 
152 A FIRST BOOK IN BUSINESS METHODS 
 
 101. Sending Goods by Express. When goods are shipped 
 by express the package should be plainly marked, not only 
 with the name and address of the person to whom the goods 
 are shipped, but also with the name and address of the shipper. 
 Observance of this rule would save much trouble and annoy- 
 ance to those who receive many packages by express, for it fre- 
 quently occurs that the consignee is unable to determine who 
 is the rightful owner of packages which come to him, even 
 if he receives a letter stating that a package has been sent. 
 
 Express agents will always give a receipt for the packages 
 taken into their charge if requested to do so, and the shipper 
 should always get such a receipt, for it may be of particular 
 value if a package should be damaged, delayed, or lost on the 
 way. Express companies are always responsible for losses 
 caused by carelessness of their agents. The sender should 
 place his name on the outside of the express package ; then if 
 the person for whom the goods are intended cannot be found, 
 the express company will promptly notify the sender. 
 
 The receiver of an express parcel is obliged to sign a 
 receipt when he takes the parcel from the express company's 
 agent. If any other person than the one addressed receives 
 the package, he should first sign the name of the proper 
 consignee, and just below that, his own name. 
 
 If the goods are perishable articles, like fruit or flowers, 
 the package should be marked " Perishable," so as to show 
 the need of haste in forwarding ; and if the package contains 
 glass or articles which may be easily broken, it should be 
 marked " Glass" or " Handle with Care." 
 
 Generally the charges may be prepaid or not, as .the sender 
 prefers. * Charges vary according to the character, weight, and 
 value of the goods sent and the distance traveled, the state- 
 ment of the sender as to the value being accepted. 
 
RAILROAD AND EXPRESS BUSINESS 153 
 
 102. Collections by Express Companies. Nearly all of 
 the express companies now have arrangements by which they 
 undertake the collection of accounts or notes, at any place on 
 their line where they have an agent. The expense of collec- 
 tion in this way is small, and the collections are attended to 
 promptly. If the collection cannot be made, notice will be 
 given promptly, with reasons for refusal. 
 
 Form CXVI. 
 
 ADAMS EXPRESS COMPANY. 
 
 SPECIAL IM8TRUCTIOHS. REMARKS: 
 
 ^4 Adams Express Special Collection Envelope 
 
 When a collection is to be made by an express company 
 a statement of the account should be made and placed in a 
 special collection envelope, as shown by the form above; this 
 envelope containing the statement of the account is then 
 handed to the express agent. A small fee is charged by the 
 express company for undertaking the collection, and if the 
 collection cannot be made, there are no further charges, but 
 if they make the collection, a small additional fee is charged 
 for return of the money. The whole expense for collecting 
 an account of $12.00 or $15.00 by this method is not more than 
 20 or 25 cents. 
 
154 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXVII. 
 
 164) 
 
 No.. 
 
 for Collection. 
 
 Charges for Return of Money. 
 .Total Amount to be returned,. 
 
 From 
 
 Rock Island, III., 
 
 Bill to be collected on delivery of goods. 
 
 Goods billed to 
 
 NOTICE TO SHIPPERS. 
 
 ems. If the m.>r.ey-tt> bc-collecied from the consienee ornialivery 
 of ihe property described beretu fs not paid wiihHi thirty dayslrom date of this 
 Company s receipt, the shipper aprees that this Company may return said 
 property to fcim at the -exniration of that time subject to the conditions of 
 this Company's receipt, that he -will pay ihe charges for transportation both 
 ways and ihat ihe liability of this Company, for suc"j property, -while rn 
 its pnmexxian, for the purpose of making such collection, shall be thai of 
 
 NOTICE TO AGENTS. 
 
 Agents and all employes concerned are referred to the Company's Book of 
 Rules and Instructions concerning C. O. D.'s and will be held to strict account* 
 ability for compliance therewith. -.. 
 
 REMARKS. 
 
 Counted and Seated by 
 
 A United States Express C. O. D. Envelope 
 
RAILROAD AND EXPRESS BUSINESS 155 
 
 103. Sending Goods C. O. D. by Express. If goods are 
 sent C. O. D. (Collect on Delivery), which means that they are 
 to be paid for when delivered, the sender makes out a bill of 
 the goods and places it in an envelope called a C. O. D. envel- 
 ope, which he sends with the goods. When the goods are 
 delivered by the express company to the person to whom 
 they are addressed, it collects the charges for delivering the 
 goods and also the amount of the bill. Sometimes, too, they 
 collect charges for the return of the money to the shipper. 
 If the charges for the return of the money are to be col- 
 lected, the amount of the charges should be shown on the 
 C. O. D. envelope. 
 
 The bill which the sender makes out to be sent with the 
 goods should be receipted, for the expressman will not deliver 
 the goods to the purchaser until the C. O. D. bill has been 
 paid. 
 
 Form CXVII. shows a return C. O. D. envelope properly 
 filled out. 
 
 104. Bill of Lading with Draft Attached. Sometimes 
 when a man who does not have very high credit in the com- 
 mercial world, orders a bill of goods from a wholesale firm, 
 they have some hesitation in shipping the goods without 
 being assured that prompt payment will be made. If the 
 goods to be shipped are too heavy to go by express, they 
 may be shipped C. O. D. by freight. This is usually done 
 by means of a bill of lading with draft attached. The ship- 
 per bills the goods to himself at the place where the pur- 
 chaser lives. He does not, however, send the bill of lading 
 direct to the purchaser of the goods, but draws a draft on 
 him to which the B/L is attached, and the draft is sent 
 through the bank to him for collection. Before 'the B/L is 
 
156 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXVIII. 
 
 The Lake Shore & Michigan Southern Railway Company 
 
 STRAIGHT BILL OF LADING ORIGINAL NOT NEGOTIABLE **"*""" 
 
 /?'// >/ Lading to which Draft is attached 
 
 sent, it is indorsed to him, and when he has paid the draft the 
 B/L is turned over to him and he can get the goods. 
 
 Example : Suppose Marshall Field & Co. of Chicago receive 
 an order for a bill of goods amounting to $450 from H E. Mason 
 & Co. of Coldwater, Mich., with a request that the goods be 
 shipped by freight. If they desire to ship the goods C. O. D. 
 or with B/L attached to draft, the B/L would be like Form 
 CXVIII., Marshall Field & Co. appearing as the consignees. The 
 
RAILROAD AND EXPRESS BUSINESS 
 
 157 
 
 indorsement on the B/L is an order to the railroad freight agent 
 at Coldwater to deliver the goods to H. E. Mason & Co. A draft 
 on H. E. Mason & Co., with B/L attached, is sent to the bank at 
 Coldwater, with instructions to deliver the B/L to H. E. Mason & 
 Co. when the draft is paid. (See Form CXIX.) 
 
 A bill of the goods is also sent to H. E. Mason & Co. with a 
 letter advising them how the goods were shipped. 
 
 Form CXIX. 
 
 CHICAGO, ILL., Nov. 19, 1899. 
 CASHIER NATIONAL BANK, 
 
 Coldwater, Mich. 
 
 DEAR SIR : Inclosed herewith we mail you draft attached to 
 B/L and drawn on H. E. Mason & Co. of your city for $450. 
 Please collect of H. E. Mason & Co. the amount of the draft, and 
 when same is paid deliver to them the B/L. Send proceeds to 
 us, less collection and exchange, and oblige, 
 
 Yours truly, 
 
 MARSHALL FIELD & Co. 
 
 Draft to be attached to above Bill of Lading 
 
 This method is used only in cases where the consignee 
 does not have good business credit, and it is unsafe to ship 
 
158 A FIRST BOOK IN BUSINESS METHODS 
 
 him goods in any other way. The consignee should under- 
 stand before the goods are shipped that they must be paid 
 for when delivered, for if he refuses them, the shipper must 
 pay the freight. 
 
 105. Shipping Invoice. When goods are shipped away 
 to be sold on commission, an invoice should be made out 
 showing the amount and kind of goods shipped. The goods 
 
 Form CXX. 
 
 SHIPPING INVOICE 
 
 Form Z 
 
 INVOICE 
 
 and consi 
 to be sold 
 
 SHIPPING INVOICE. 
 
 J 50 > W 9_ 
 
 GALESBURG, MICH. , _ .?_?...__* ... 
 
 OF MERCHANDISE shipped by J amesW - Miller, 
 
 Buck & Co. , nf Chicago, 111. , 
 
 gned to ". :?. .:. - :_ 
 on commission. 
 
 
 
 120 bbls. Baldwin Apples 
 
 
 
 
 
 
 84 Bartlett Pears 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 should be plainly marked, not only with the name and 
 address of the person to whom they are shipped, but with the 
 name of the shipper also, so that the commission merchant 
 can see at a glance whose goods they are. 
 
 NOTE. For laws in regard to Common Carriers, see 120. 
 
RAILROAD AND EXPRESS BUSINESS 159 
 
 QUESTIONS AND EXERCISES ON CHAPTER VIII. 
 
 7. What is a bill of lading ? 
 
 2. How many copies of the bill ^f lading are usually 
 made? 
 
 j. Who fills out the bill of lading, the person who ships 
 the goods or the railroad agent ? 
 
 ^. Which party is the consignee ? Which the consignor ? 
 
 5. Does the consignor send his copy of the railroad bill 
 of lading to the consignee or retain it himself ? 
 
 6. You wish to send four barrels of choice winter apples 
 to John W. Horton & Co., commission merchants, Detroit, 
 Mich. Make out the shipping receipt and sign your copy. 
 
 7. What is a railroad expense bill ? 
 
 8. Who makes out the railroad expense bill, the railroad 
 agent or the consignee ? How many copies are usually made ? 
 
 p. Of what use is it to the consignee to have the railroad 
 agent sign his copy of the railroad expense bill ? 
 
 10. Of what use to the railroad agent is the signature of 
 the' consignee on a railroad bill of lading ? 
 
 n. What is a railroad manifest ? 
 
 12. When is it necessary to furnish a manifest to the rail- 
 road agent ? 
 
 13. Who fills out the manifest ? 
 
 14. In shipping goods to Canada from the United States, 
 what is required besides the usual invoice ? Of what use is a 
 certified invoice ? 
 
 75. What is the object in getting a receipt from the 
 express agent when sending goods by express ? 
 
 16. Is it usually necessary to prepay express charges ? 
 
 77. George W. Whitney of Centerville, Ind., orders of you 
 fifteen bushels of Crawford peaches at $1.25 per bushel, and 
 
160 A FIRST BOOK IN BUSINESS METHODS 
 
 asks you to send them by express, C. O. D. Make out all nec- 
 essary papers for sending the peaches as requested. 
 
 18. Morton & Goodyear of Indianapolis, Ind., order of you 
 100 bushels of Crawford peaches, and ask you to draw on them 
 for the amount of same, with bill of lading attached to draft. 
 Write all necessary papers and notify them that the peaches 
 have been shipped. 
 
 /p If you receive by express a package addressed to 
 your friend, what name would you sign to the receipt ? 
 
 20. Is a bill for goods sent C. O. D. by express different 
 from any other bill of goods ? 
 
 21. Who usually pays the return charges on the money 
 received from a C. O. D. bill ? 
 
 22. Explain how goods are sent C. O. D. by freight. 
 
 23. What is the object in attaching a draft to a bill of 
 lading ? 
 
 24.. You receive an order from John W. Williams, Indian- 
 apolis, Ind., for a bill of merchandise amounting to $260.40. 
 Wishing to be sure of your pay, you draw a draft on him and 
 attach it to the bill of lading. Write the draft. Make out 
 the bill of lading. Write a letter to him, notifying him of 
 the shipment, and that you have drawn on him. 
 
 25. When produce is shipped away to be sold on commis- 
 sion, is it necessary to send a shipping invoice ? 
 
 26. You have 340 dozen eggs and 125 pounds of butter to 
 ship to J. W. Emery, commission merchant, Chicago, to sell 
 on commission. Make out a shipping bill ; also write him a 
 letter telling him not to sell the butter at less than 22 cents 
 per pound. When the produce is shipped you should of 
 course get a shipping receipt or railroad bill of lading from 
 the railroad company. Do you hold the shipping receipt 
 or do you send it to the man to whom you ship the goods? 
 
RAILROAD AND EXPRESS BUSINESS 161 
 
 <?/. Suppose you wish to send a cook stove weighing 
 350 pounds from La Grange, Ind., to Niles, Mich Make out 
 the proper shipping bill. You ship the stove and it is badly 
 damaged by carelessness in handling. Write a letter to the 
 railroad company claiming damage on the stove amounting 
 to $10.00. 
 
 GENERAL REVIEW EXERCISES 
 
 7. What is the difference between a check and a bank 
 draft? 
 
 2. What are safety deposit vaults? 
 j. What is a bank draft ? 
 
 4. What is meant by protesting a draft? 
 
 5. What is a collateral note ? 
 
 6. If you hold a note against a man living in a distant 
 city, how would you proceed to collect it ? 
 
 7. What is meant by partial payments? 
 
 8. A man living in Milwaukee, Wis., wishes to pay a bill 
 in St. Louis, Mo. Which would be better, to send a New York 
 draft or a Chicago draft ? 
 
 p. Would it make any difference to the payee if he lived 
 in Richmond, Va., whether he received a New York draft or 
 a Chicago draft ? 
 
 10. What other methods are there for making remittances 
 besides bank drafts and post office money orders ? 
 
 n. What are travelers' checks ? 
 
 12. By whom are they issued ? 
 
 7j. What is meant by " proxy " ? 
 
 14. Explain how an individual or firm may give to an 
 agent authority to execute a deed or a mortgage. 
 
 75. When such authority has been properly given, how 
 may it be terminated? 
 11 
 
CHAPTER IX. 
 
 CONTRACTS, LEASES, GUARANTIES, BONDS 
 
 1 06. Contracts. A contract is an agreement between two 
 or more persons to do or not to do certain stated things. 
 Contracts are of so much importance that it will be well to 
 consider some of the things necessary to their validity. 
 
 1. The thing to be done must be possible. This does not 
 mean that a person may make a contract and afterward be 
 relieved from performing it because of a lack of money, or 
 sickness, or something which makes it impossible for him to 
 fulfill his agreement; but if the thing agreed to be done is 
 something which, in its nature, is impossible, the law will 
 not hold the maker of the contract responsible for its per- 
 formance. 
 
 2. Any contract which the law forbids is not binding. A 
 contract for smuggling goods would not be valid; neither 
 would a contract for robbery or bribery be valid, for the law 
 will not compel a man to do that which it forbids him to do. 
 
 3. Any contract which by its performance is injurious to 
 the public is not valid. 
 
 4. Contracts made on Sunday are not valid in some states. 
 
 5. The parties to the contract must be competent to make 
 a contract or it will not be valid. A contract with a drunken 
 
CONTRACTS 163 
 
 person is not binding upon him, neither is one made by an 
 idiot, or an insane person, or a minor, unless the contract is 
 for necessaries, such as food, clothing, shelter, or education. 
 6. Before a contract can be binding upon either party, 
 there must be a mutual understanding between them. There 
 is a popular saying that it takes two to make a bargain, 
 and that is true. If it can be proved that there was any mis- 
 understanding on either side in regard to the essential parts 
 of the contract, there is no agreement, and the contract is 
 voidable. 
 
 107. Valid Consideration. In order that the contract be 
 binding, there must be some consideration. If I tell you that 
 I will give you a new suit of clothes, and afterward refuse to 
 do so, the law will not "compel me to make you a present of a 
 new suit of clothes, because there was no consideration. If, 
 however, you had agreed to work for me a couple of days and 
 I had agreed to supply you with a new suit of clothes in pay- 
 ment, the contract would then be binding, for there would be 
 a mutual understanding between us, and there would also be 
 some recompense or consideration for the clothes. If I should 
 make you a present of the suit of clothes, I could not compel 
 you to give them back to me. 
 
 108. Written Contracts. There are certain contracts 
 which must be in writing in order to be binding. 
 
 1. Any contract for the sale of real estate must be in writ- 
 ing, and any contract which is not to be performed within a 
 year must be in writing to be binding. 
 
 2. A lease for more than one year would not be binding 
 unless the contract or agreement were in writing. 
 
 3. Every contract to answer for the debts of another must 
 
164 A FIRST BOOK IN BUSINESS METHODS 
 
 be in writing to be binding. If a man goes into a store and 
 buys a pair of shoes on credit, and his friend says to the 
 merchant, " If this man does not pay for the shoes, I will," 
 the merchant could not hold the friend responsible for the 
 payment unless the agreement was in writing. 
 
 4. In some states all contracts for the sale of goods 
 amounting to more than $50.00 must be in writing in order 
 to be binding, unless part of the purchase price is paid at the 
 time the contract is made, or unless part of the goods have 
 been delivered. The part payment is sometimes called earnest 
 money and does away with the necessity of having the contract 
 in writing. 
 
 109. Verbal Contracts Unsafe. If the parties to a con- 
 tract place their agreement in writing, it must be wholly in 
 writing. It cannot be partly written and partly verbal, for the 
 law will recognize only the written agreement. 
 
 There are many important contracts which are not required 
 by law to be in writing, but it is better in most cases if the 
 parties to a contract have their agreement placed in writing 
 and each person interested furnished with a copy. People who 
 rely on a verbal contract are apt to forget just what the agree- 
 ment was, and many times there are misunderstandings and 
 dissatisfactions which might have been avoided if the agree- 
 ment had been placed in writing. Very often this important 
 matter is neglected because the person with whom the con- 
 tract is made is a relative or friend, and it is thought that 
 there is no need of a written contract with a person in whom 
 one has implicit confidence. The fact that the parties to a 
 contract are intimate friends is, however, a greater reason 
 why their contract should be in writing, so that no misunder- 
 standings may arise to break their friendship. 
 
CONTRACTS 165 
 
 no. Formal Articles Not Necessary. It is not necessary, 
 even in matters of great importance, to draw up articles of 
 agreement with great formality, and the law which requires 
 certain contracts to be in writing does not state what shape 
 the writing shall .assume. It is not a difficult matter to pre- 
 pare ordinary articles of agreement, if one understands what 
 the agreement is and will express that agreement in plain, 
 simple language, being careful to state precisely and fully 
 just what is meant. 
 
 Persons who are not lawyers should use as simple language 
 as possible, and avoid the use of legal terms which they do 
 not understand. 
 
 It is not necessary that a contract be sealed or witnessed. 
 Contracts are usually drawn similar to the form given below : 
 
 Form CXXI. 
 
 CONTRACT TO PERFORM WORK 
 
 This agreement made this fourth day of March, A. D. 1901, 
 between John W. Thompson of the city of Springfield, State of 
 Missouri, and Robert P. Smith of the same place, witnesseth: 
 That the said John W. Thompson agrees to work for the said 
 Robert P. Smith as a farm hand, on the farm of the said Robert 
 P. Smith, near the city of Springfield, during a period of eight 
 months, beginning March 15, 1901, and ending November 14, 1901. 
 
 In consideration of the services so performed, the said Robert 
 P. Smith agrees to pay to the said John W. Thompson the sum 
 of Twenty Dollars per month, to be paid at the end of each month 
 of said term. 
 
 In witness whereof, we have hereunto set our hands and seals 
 the day and year first above written. 
 
 Witnesses : , ^ . 
 
 T. D. FULLER. JOHN W. THOMPSON. ! L. s. { 
 
 O. W. JONES. ( > 
 
 ROBERT P. SMITH. 
 
1 66 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXXII. 
 
 Hgreement, **. *. 
 
 CCUtr.eSaCtb, Tku the laid party o< die nt put^ha^ agreed to let, and hereby eV. t* Wt to the said pana of 
 the second part, amd the said f^ft of the second put n. agreed to take, and hereby do M nVr from Ike asU 
 
 i--* -> ,h. 6n> 
 &-fc 
 
 prtfa of t 
 
 venint^labil yv^t^^ - will not uigc thu leaje. Mr k, 
 
 undeilet -Jit whole or in; part ol die uid premltn, not make .1,7 .Itention theryf, witkoul die wriuen cociser.! of the uid 
 ol forleiiore ud danuga; nd UUt-.^L*-/ _ wili not occgpj or B.r the uid 
 
 E first part, under the penalty 
 
 , nor permit the ,a= to be occupied or used for ar,, bu. 
 without the like consent, under the like penalty. 
 
 HnO The^aid pr,y_of dK<d p funhe, coven. 
 
 first part, or A4** 'gent, to show the premises to per 
 
 of February tiert preceding the expiration of tie lerm. wi-' .rmi 
 
 .ill permit me laid partj^ f the 
 
 HnO a(50, Tb*t )l the said premises, or any part thereof, shall become vacant -during die said term, the Mid psitj/ .of 
 represenuliye, may re-enter die same, either by force or otherwise, without being Cble 
 
 Hn6 The said pma of I 
 .aid rent, o, ,., j-r, dtereof. a, ,h 
 greements herein contained, die said hiring, and the relation of landlord and tenant, at die option of die laid paru-^of tie 
 
 tnd Ike aud put^L-of the aecond put hereby epreI, 
 f n OTltne08 TOUeteOt The pmia to tte preso-u h.,, 
 
 Form of Lease (front) 
 
LEASES 
 
 Form CXXIII. 
 
 
 
 
 
 
 
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 a tbe expreaa condition, however, that the aaiignor ihtll remain liable for the prompt payment of the rent and performance 
 of the covenanta on the part of the second party ei therein mentioned, and that no further assignment of .aid Leau or anb. 
 
 t 
 
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 I I 
 
 af me and agree to male all the pavmehta and perform all the coyenanta and condition] of the within Lease, bj laid party ol 
 the .eeond part to be made and performed. 
 
 For aToe nctntl tierebt aaalgn all right, title and inlereel In and to the within Lease nnto 
 - - . heir, and aeaigna. and in consideration 
 
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 Form of Lease (back) 
 
i68 A FIRST BOOK IN BUSINESS METHODS 
 
 in. Leases. A contract made between two parties, by 
 which real estate is rented for a specified time, is called a 
 lease. A person who leases real estate to another is called a 
 
 Form CXXIV. 
 
 LANDLORD'S FIVE DAY NOTICE.- FOB CNICAQ9. FORM No. 238. 
 
 Cents, being rent for the premises situated in the City of Chicago. 
 
 in Gtftk County, in the State of Illinois, and knnum and described as. follows, viz. : 
 
 tt At C Uf CT otlC, That payment of said sum so due has been ana 
 is hereby demandaA of you, and that unless payment thereof is made on. or before the 
 
 D 190_2^your lease of said 
 hereby authorised to 
 
 s erey emana o you, an a uness paymen 
 ____ ......... /...A.. ....... S^L ..... _. ............ ____ day. of ____ ^2^^^ _____ 
 
 premises will be terminated. 
 receive said rent so due. 
 this. 
 
 Notice to Quit (front) (Used in Illinois) 
 
 landlord, and the person to whom he leases the real estate is 
 called a tenant. In law, the person giving the lease is termed 
 the lessor , and the person to whom the lease is made is termed 
 the lessee. 
 
 A verbal lease for more than one year is void; therefore, 
 
LEASES 
 
 169 
 
 when a promise to rent for more than a year is made, it 
 should be in writing. No particular form of wording is 
 
 Form CXXV. 
 
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 Notice to Quit (back) 
 
 necessary, but it is important that the lease state in a plain, 
 straightforward manner, all the conditions of the agreement, 
 so that there may be no misunderstanding. It must include 
 
i;o A FIRST BOOK IN BUSINESS METHODS 
 
 the whole agreement, for if a lease or contract of any kind be 
 made in writing, any additional verbal agreement is of no avail 
 in law. Each of the parties should have a copy of the lease. 
 
 The tenant must pay the rent provided for in his lease, 
 strictly in accordance with his agreement. Even if the prem- 
 ises are rendered useless by unavoidable accident of fire, or 
 flood, or tempest, the tenant will still be liable for the payment 
 of the rent. But leases generally contain a clause providing 
 for a suspension of the payment of the rent during the time 
 the premises are rendered untenantable by reason of any of 
 these causes. 
 
 If the tenant use the premises for any purpose not contem- 
 plated by the letting, it may terminate the lease. 
 
 112. Repairs and Subletting 1 . The statutes of some of 
 the states provide that the landlord must keep the premises in 
 repair, but in others there is no such provision. The parties 
 to the lease may make such agreement in their lease respect- 
 ing repairs as they see fit. If the landlord agrees to keep 
 the premises in repair and fails to do so, the tenant may 
 deduct from his rent as much as he has been compelled to pay 
 out for such repairs as the landlord agreed to make ; but in 
 order to do this he must have given due notice to the landlord 
 of the necessity of such repairs. 
 
 When the lease is made, a definite understanding should 
 be had by the parties regarding repairs, and the agreement 
 concerning the matter should be fully written out in the 
 lease. 
 
 If the terms of the lease do not prohibit the lessee from 
 subletting the premises, he may, if he wishes, sublet any 
 part or the whole of them, but he will still be liable for the 
 payment of the rent if the sub-tenant does not pay it. If a 
 
GUARANTIES 171 
 
 landlord consents to take a substitute, the first tenant is 
 released. 
 
 113. Notice to Quit. If the lessee does not remove from 
 the premises when his term of lease has expired, his right to 
 possession cannot be taken away except by a notice to quit. 
 The notice to quit may be served upon the lessee or any per- 
 son holding under him. The notice should state that posses- 
 sion of the premises is demanded, and that the tenant must 
 vacate within the time specified in the notice. 
 
 114. Guaranty. A guaranty is an agreement to answer 
 for the liability of another, and a person who guarantees the 
 fulfillment of another's agreement is called a guarantor. If a 
 man gives his note for a certain amount, or makes a contract 
 to do a certain piece of work, or leases some property for 
 which he agrees to pay a certain sum per month, in any of 
 these cases it might be necessary to have some friend guar- 
 antee the fulfillment of his promise. In order that the 
 guarantor may be held, the guaranty should be in writing 
 and signed by him. 
 
 Although no special words are necessary to constitute a 
 guaranty, the guarantor must clearly show that it is his inten- 
 tion to guarantee the fulfillment of the agreement. The 
 guarantor cannot be held for the fulfillment of the agree- 
 ment unless the conditions of the guaranty are strictly fol- 
 lowed, and he can be held only for the amount agreed upon 
 or for the time mentioned in the guaranty. If the guaranty 
 is for the payment of a debt, and the principal fails to pay, it 
 is usually necessary that the guarantor be notified, but in 
 some states a mere indorsement is equivalent to a guaranty, 
 and the indorser need not be notified (see p. 172). It is a part 
 of business courtesy, however, to notify. 
 
172 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXXVI. 
 
 GUARANTY OF RENT TO BE ATTACHED TO A LEASE 
 
 In consideration of the letting of the premises above mentioned to the 
 above named C. C. , and of the sum of one dollar to me paid by the said party of 
 the first part, /do hereby covenant and agree, to and with the party of the first 
 part above named, and with his legal representative, that if default shall at 
 any time be made by the said C. C. in the payment of the rent and performance 
 of the covenants above contained on his part to be paid and performed, that / 
 will well and truly pay the said rent, or any arrears thereof that may remain due 
 unto the said party of the first part, and also all damages that may arise in con- 
 sequence of the non-performance of said covenants, or either of them, without 
 requiring notice of any such default from the said party of the first part. 
 
 Witness my hand and seal this day of , in the year of our Lord 
 
 one thousand nine hundred and 
 
 [Name of witness.] [Signature.] 
 
 Form CXXVII. 
 
 GUARANTY OF PAYMENT OF NOTE 
 
 For value received, I hereby guarantee the payment of the 
 within note. 
 
 [Date.] [Signature,] 
 
 Form CXXVIII. 
 
 GUARANTY OF PAYMENT OF BOND 
 
 In consideration of the sum of one dollar to me in hand paid 
 by G. P., I hereby guarantee the payment of the foregoing bond. 
 Witness my hand (and seal), the day of , 19 .. 
 
 [Signature, with or without seal.] 
 
 115. Bill of Sale. A bill of sale is an agreement in writ- 
 ing by which one person transfers his interest in personal 
 property to another. Like many other legal documents, no 
 special prescribed form is necessary; the seller of the "chat- 
 tels" or personal property simply shows by his bill of sale 
 
BILL OF SALE 173 
 
 that he has transferred his interest in the property to some 
 one else. 
 
 Form CXXIX. 
 
 BILL OF SALE 
 
 KNOW ALL MEN BY THESE PRESENTS, That 7, James Stone 
 of Salinas, County of Monterey and State of California, in consideration 
 of One Hundred and Fifty dollars, to me paid by William Irving, of the 
 same place, have bargained and sold to said William Irving, the following 
 goods and chattels, to wit : one gray horse, one carriage, and three cows. 
 
 In witness whereof , /have hereunto set my hand and seal, this 2oth day of 
 October, A. D. iqoi. 
 
 Signed, sealed, and delivered ) j / 
 
 in presence of j" 1 f 
 
 Although the above is the usual form of a bill of sale, the 
 following would be equally binding and would answer every 
 purpose ; 
 
 Form CXXX. 
 
 SHORT FORM OF BILL OF SALE 
 
 SALINAS, CAL., October 20, 1001. 
 
 I have tJiis day sold to William Irving, one gray horse, one car- 
 riage, and three cows. 
 
 JAMES STONE. 
 
 116. Bonds. A bond is a writing under seal by which 
 the maker acknowledges some debt, liability, or duty. It is 
 called a bond because it binds the maker of it. The maker of 
 a bond is called the obligor, and the person in whose favor it 
 is made is called the obligee. 
 
 A bond first states an indebtedness, and then a condition that 
 if the obligor performs some particular act, the obligation is 
 
174 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXXXI. 
 
 ftnoro all Wen b ttyse prwente, Th m*_ 
 " 
 
 Or-.h/^-oertain attorney, executors, administrators or assigns, for which payment well and truly to be made, 
 we bind ourselves, onr heirs, executors, and admjnfotrators, jointly and severally, flrmly by these present* 
 
 Sealed with our Seals. Dated the.....X-<^-^?~::I~~-~-*'y of...^^^^^.__ in the year 
 
 one thousand eight hundred and 
 W*r*i*....ies- 
 
 4* 
 
 d for Fidelity of Clerk (front ) 
 
BONDS 
 
 175 
 
 Form CXXXII. 
 
 
 i this obligation to be void; otherwise to remain in full force and virtue. 
 Signed. Scaled and Delivered In Pnsenct of 
 
 Bond for Fidelity of Clerk (back) 
 
1 76 A FIRST BOOK IN BUSINESS METHODS 
 
 void; otherwise it shall remain in full force and virtue. The 
 penalty in a bond is usually fixed at double the amount of 
 the real debt. This is for the purpose of securing the full 
 debt with interest and cost if necessary. Let us examine the 
 working of a bond. 
 
 Example : Suppose John Wood agrees to build a house for 
 Peter Brown and to have it finished according to certain specifi- 
 cations on or before a certain day. Peter Brown requires John 
 Wood to give a bond for two thousand dollars, in which he guar- 
 antees that the house shall be completed in good workmanlike 
 manner, etc., at the time specified. Let us suppose that John 
 Wood goes to work and completes the house and does everything 
 exactly according to agreement, except that he is a month late in 
 completing his undertaking. Now, according to the strict terms 
 of the bond, he is indebted to Peter Brown to the amount of two 
 thousand dollars, and, under the early common law, the whole 
 amount of the bond would be payable to Peter Brown, no matter 
 how much or how little damages or inconvenience Peter Brown 
 had suffered on account of the delay. It would, however, be 
 exceedingly hard if John Wood were made to pay all this money 
 on account of a trifling default, and now the law will not compel 
 him to pay any more than a sufficient amount to compensate Mr. 
 Brown for any loss or inconvenience which the delay has caused 
 him. 
 
 It is customary to have one or two sureties to a bond, and 
 the sureties are bound the same as the obligor, unless the 
 bond states otherwise. 
 
 The sureties to a bond are usually required to " justify" 
 in a certain amount. This means that they must swear to 
 being worth a certain amount of money above all their 
 indebtedness. 
 
 Although it is not necessary that bonds be witnessed and 
 
BONDS 177 
 
 acknowledged, it is sometimes desirable to have it done, such 
 as in cases where the signer cannot write, and is obliged to 
 sign by his mark, or in any other case where a question may 
 arise regarding the genuineness of the signature. 
 
 Form CXXXIII. 
 
 COMMON FORM OF BOND 
 
 KNOW ALL MEN BY THESE PRESENTS, That 7 , 
 
 of , County and State of , am held and firmly bound 
 
 unto , of the same place, in the sum of dollars, lawful money of 
 
 the United States, to be paid to the said , his certain attorney, execu- 
 tors, administrators, or assigns ; to which payment well and truly to be made, 
 / do bind myself, my heirs, executors, and administrators, firmly by these 
 
 presents ; sealed with my seal, and dated this day of A. D. one 
 
 thousand eight hundred and 
 
 The condition of this obligation is such, that if the above-bounden 
 
 his heirs, executors, administrators, or any of them, shall and do well and truly 
 pay or cause to be paid, unto the aforesaid , his executors, adminis- 
 trators, or assigns, the full and just sum of ... dollars, lawful money, as afore- 
 said, with legal interest for the same, on or before the . . . day of next, 
 
 without fraud or further delay, then this obligation to be void and of no 
 effect, otherwise to be and remain in full force and virtue. 
 
 Signed, sealed, and delivered") 
 in the presence of 
 
 [SEAL] 
 
 117. Bonds for Faithful Service. Persons who hold posi- 
 tions of trust or responsibility are usually required to give a 
 bond signed by some person or company, thus guaranteeing 
 faithful service and agreeing to make good any loss caused 
 by defalcation or carelessness. 
 
 If a young man obtains a responsible position and it is 
 necessary for him to give a bond guaranteeing faithful per- 
 formance of his duties, and he has no personal friend who 
 will become his bondsman, he may, if he has good character 
 
 12 
 
178 A FIRST BOOK IN BUSINESS METHODS 
 
 and good habits, arrange with a surety company to sign his 
 bond. 
 
 There are now several surety companies which give bonds 
 for any one whom they consider " a good risk " When an 
 application is made, it is necessary to give three references, 
 with whom the company corresponds, and they make very 
 careful inquiries concerning the character and habits of the 
 applicant before signing his bond. The amount of the surety 
 bond in any position depends, of course, upon the position ; 
 but any young man or woman with good habits and a good 
 record has no difficulty in securing bonds for five or ten 
 thousand dollars by paying a small sum annually. 
 
 NOTE. For Stocks and Bonds, see 127-129. 
 
 EXERCISES ON CHAPTER IX. 
 
 /. May a contract be partly verbal and partly written? 
 
 2. If a man promises to give a suit of clothes to his neigh- 
 bor, is the promise legally binding ? 
 
 j. Need there be any witnesses to a written contract? 
 
 </. If you make your friend a present of a pair of shoes, 
 can you compel him to give them back to you ? 
 
 5. If a man make a contract to commit a forgery, would 
 the contract be binding upon him ? 
 
 6. What is a bond and why is it called a bond ? 
 
 7. There are usually two parts to a bond; what are they? 
 
 8. Who is the obligee in a bond? 
 p. Who is the obligor ? 
 
 70. If a man sign a bond to perform a piece of work before 
 a certain day and there is a slight default in the performance 
 of the work, does the whole sum become due ? 
 
 n. What is the surety of a bond ? 
 
BONDS 179 
 
 12. Is it necessary to have a bond witnessed and acknowl- 
 edged ? 
 
 7j. Name some kinds of officers who have to give bonds. 
 
 7^. If a man have no personal friend to sign his bond, what 
 can he do ? 
 
 75. Which is considered better, a bond signed by a per- 
 sonal friend or one which is signed by a surety company ? 
 Why? 
 
 16. Will a surety company sign a bond for any one who 
 applies, if the regular fee is paid ? 
 
 77. What is a landlord ? 
 
 1 8. What is a lease ? 
 
 7p. Can you make a verbal contract which will be bind- 
 ing for renting a house for more than one year ? 
 
 20. Is any special wording necessary to make a written 
 lease binding? 
 
 21. Suppose you rent a house for a year and the house 
 burns down after one month, would you be obliged to pay 
 rent for the whole year ? 
 
 22. Is it necessary to have witnesses to a written lease ? 
 
 23. What is a notice to quit? 
 
 24.. May a tenant sublet any part of a house which he 
 has rented? 
 
 25. You have a house known as No. 340 West Main 
 Street, Bloomington, 111., which you rent to D. W. Miller for 
 one year, at $12.00 per month. Write the lease. May the 
 lease be partly written and partly verbal ? 
 
 26. What is a guaranty ? What is a guarantor? 
 
 27. Is a guaranty usually in writing ? Would it be bind- 
 ing if it were not in writing ? 
 
 28. Are any special words necessary to constitute a guar- 
 anty ? If the principal fails to pay, what ought to be done ? 
 
i So A FIRST BOOK IN BUSINESS METHODS 
 
 29. Name some conditions under which a guaranty is used. 
 
 jo. What is a contract ? 
 
 j/. Name three cases in which the law requires a con- 
 tract to be in writing. 
 
 32. Is a contract with a drunken person binding ? 
 
 jj. Is a contract with an insane person binding? 
 
 34.. What is a minor ? 
 
 jj". Would a contract made with a minor be binding 
 upon him? 
 
 GENERAL REVIEW EXERCISES 
 
 /. If Thomas ]. Ward owes you $24.60 on account, how 
 would you proceed to collect it ? 
 
 2. If Mr. Ward pays no attention to your first notice, what 
 would your next step be ? And the next? 
 
 j. If a person signs his name on the back of a check and 
 then adds the words, " Without recourse to me," what kind of 
 an indorsement is that ? 
 
 4. What advantage would there be in making such an 
 indorsement? 
 
 5. When is a sight draft payable ? 
 
 6. If no place of payment is mentioned in a note, where 
 should it be presented for payment ? 
 
 7. What is meant by the legal rate of interest ? 
 
 8. How do business men get information regarding the 
 financial standing of their customers ? 
 
 o. Name some of the companies or agencies which fur- 
 nish such information. 
 
 10. If the name of a business man is omitted from their 
 reports, does that indicate that his business credit is not 
 good? 
 
BONDS 181 
 
 u. How often are new reports gotten out by these 
 agencies ? 
 
 12. Give an explanation of the best method for making 
 change. 
 
 7j. When goods are shipped by railroad or by steam- 
 boat, what is the person called who ships the goods ? 
 
 14.. What is the person called who receives the goods ? 
 
 75. The person making the shipment usually receives a 
 receipt for the goods shipped. What is this receipt called ? 
 
 16. Does he receive more than one copy of this receipt, 
 and if so, how many ? What is the object in having more 
 than one copy ? 
 
 77. When goods are shipped by express, why is it neces- 
 sary that the name of the sender be placed upon the package ? 
 
 1 8. What advantage is there in marking a package of fruit 
 or flowers, " Perishable " ? 
 
 7p. Give an explanation of a bill of lading with draft 
 attached. 
 
CHAPTER X. 
 
 MERCHANDISE SALES, STOCKS AND BONDS 
 
 118. Merchandise Sales. There are many little matters 
 pertaining to the sale of merchandise and the laws governing 
 the same, with which every person who buys or sells any 
 amount of goods ought to be familiar, but the subject is such 
 an extensive one that it is impossible to more than touch upon 
 a few of the most important points in a work of this kind. 
 
 A business man ought to know, of course, when a written 
 contract is necessary in making a sale ; what a warranty is 
 worth ; when goods may be stopped in transitu ; how far a 
 common carrier is responsible, etc. 
 
 In those states where no statutory laws governing these 
 matters have been enacted, a part of the common law, or what 
 is known as the statute of frauds, prevails. The common law 
 provides that " no contract for the sale of any goods, wares, or 
 merchandise, for the price of $50.00 or more, shall be allowed 
 to be good unless the buyer shall accept a part of the goods 
 so sold, and actually receive the same or give something in 
 earnest to bind the bargain, or in part payment, or some note 
 or memorandum in writing of said bargain to be made and 
 signed by the parties to be charged by such contract, or by 
 their agents, thereunto lawfully authorized." 
 
 [182] 
 
SALES, STOCKS AND BONDS 183 
 
 Example I : A man goes into a wholesale establishment to pur- 
 chase a supply of hats for his retail store. He looks the stock over 
 and finds a lot of six dozen hats which seem to be satisfactory in 
 price and quality. He informs the merchant in the wholesale store 
 that he will take the hats, and asks that they be set aside for him, 
 at the same time saying that he will send for them. 
 
 Although there are several opportunities to sell the hats to 
 those who are anxious to buy, they are held for the retail merchant 
 who promised to send for them, until it is too late in the season to 
 dispose of the hats. Now this was very unjust to the wholesale 
 dealer, but the man who ordered the goods was not obliged to take 
 them if he did not choose to do so, because he had not taken any 
 part of the goods with him, and had signed no memorandum nor 
 agreement, nor had he paid anything down on the goods. Had he 
 made a small payment on them, or taken away even one of the 
 hats, or had he ordered the goods by letter, then the agreement 
 would have been binding upon him. If the price of the articles 
 sold had been less than $50.00, then a verbal or oral contract 
 would have been binding. 
 
 If a man who purchases goods or chattels pays a part of the 
 purchase price down, even $1.00, and the seller accepts it, the 
 bargain is binding upon both parties, providing each is com- 
 petent to make a contract. 
 
 Example 2 : A farmer sold to a drover a yoke of cattle for 
 $100, and, as part payment on the cattle, the drover paid $5.00 
 down and agreed to pay the balance and take the cattle away 
 within a week. Before the expiration of a week the farmer had 
 an opportunity to sell the cattle for $125, which he did. When 
 the drover returned to get his cattle the farmer offered to return 
 the $5.00 which he had received, thinking that would settle the 
 matter ; but the drover sued the farmer for the amount which 
 he claimed he could have made as profit on the cattle, "and col- 
 lected it. 
 
1 84 A FIRST BOOK IN BUSINESS METHODS 
 
 If the seller of goods sells them for cash and the purchaser 
 does not pay the cash as per agreement, he cannot, of course, 
 take possession of the goods ; and if the payment is delayed 
 an unreasonable time, the seller may sell them over again. 
 
 If goods are sold on credit and the man to whom they 
 are sold fails to pay as he agreed to do, the seller cannot go 
 to the purchaser's store and reclaim the goods on the ground 
 that they are not paid for. He must collect the debt in the 
 regular way. 
 
 119. Stoppage in Transitu. Although the seller of the 
 goods cannot go to the store of the purchaser and reclaim 
 them in case the purchaser fails to pay for them, he can stop 
 the delivery of the goods before they reach the purchaser if 
 he should find that the purchaser has become insolvent. This 
 is called stoppage in transit 21. It can only be exercised when 
 the buyer is insolvent and the goods are not paid for. 
 
 Example I : If a wholesale firm in New York sells to a retail 
 dealer in Indiana a quantity of goods on credit, and before the 
 goods are delivered, the sellers are informed through Dun's or 
 Bradstreet's commercial agency, or in some other way, that the 
 buyer has become insolvent and is unable to pay his debts, they 
 can at once telegraph the railroad company not to deliver the 
 goods. The railroad company is now bound to hold the goods, 
 subject to the order of the seller. 
 
 Example 2 : Suppose a farmer ships a carload of grain to a 
 grain dealer in a distant city, with the understanding that the 
 payment for the grain shall be made at some future time. While 
 the grain is on the road, the farmer learns from a friend that the 
 orain dealer has become insolvent. The farmer at once tele- 
 graphs the agent of the railroad company to hold the grain subject 
 to his order, and the railroad' company will be obliged to do so. < 
 
SALES, STOCKS AND BONDS 185 
 
 120. Common Carrier. A common carrier is one who 
 undertakes for hire, to carry goods or passengers from one 
 point to another. This includes only those who make a regu- 
 lar business of carrying goods or passengers, or both, such as 
 railroads and express companies. There are certain laws 
 governing the duties of a common carrier. He is required to 
 carry all goods which are offered, such as he is accustomed to 
 carry or proposes to carry. He cannot discriminate in favor 
 of any one person, and when once he receives goods for the 
 purpose of carrying them from one point to another, he must 
 deliver them safely. If the goods are lost or stolen or burned 
 while in his possession, he must pay for them unless he can 
 show that the loss or destruction of the goods was caused by 
 what is called "an act of God or by a public enemy." Violent 
 storms, lightning, floods, cyclones, etc., are things which can- 
 not be foreseen, and a common carrier would not be held 
 responsible for any damage caused by them. If the goods 
 are destroyed by fire while in possession of a common* car- 
 rier, he is usually held responsible for their full value, but if 
 the fire was caused by a stroke of lightning, the loss must 
 be borne by the owner of the goods. 
 
 121. Market Quotations. Nearly every issue of the news- 
 papers published in our large cities contains a record of the 
 market quotations of the day, and every person, no matter 
 whether he be a business man or not, should be sufficiently 
 familiar with these quotations to understand their meaning. 
 They include not only the market prices of grain, provisions, 
 and live stock, but also the quotations of the principal stocks 
 and bonds, together with their fluctuations in price. The quo- 
 tations are obtained from the actual sale of these commodities 
 in the principal market centers of the country. 
 
1 86 A FIRST BOOK IN BUSINESS METHODS 
 
 122. Boards of Trade. In most of the larger cities of the 
 United States there are associations of business men organized 
 for the purpose of furthering commercial interests and the 
 enactment of rules for the regulation of trade. 
 
 An association of this kind is called a board of trade, chamber 
 of commerce, produce exchange, or a stock exchange. Grain and 
 provisions, as well as many other commodities, including 
 stocks and bonds, are bought and sold there. Some of these 
 associations are devoted to transactions in single classes of 
 commodities or investments, as cotton, corn, or in stocks and 
 bonds, as the New York Stock Exchange. 
 
 The principal board of trade of the United States devoted 
 to the sale of grain and provisions is the Chicago Board of 
 Trade, located in Chicago. It is a corporation organized under 
 the laws of the state of Illinois, and its members buy and sell, 
 on the floor of this exchange, the larger portion of the cereals 
 and meat products of the Mississippi Valley and the West. 
 
 Chicago is, in fact, the greatest wheat market in the world. 
 The price of wheat in Chicago determines the price of wheat 
 for future delivery in Europe, South America, Asia, and 
 Africa. The millers of this and foreign countries wish to 
 know what their grain will cost them in any given month, 
 and the future price of grain as determined by the Chicago 
 Board of Trade is the price relied upon by foreign com- 
 mission merchants in selling their grain for delivery at some 
 future time. 
 
 The board of trade keeps an open market for handling 
 all the grain of the world, and by having an open market it 
 makes the cornering of the grain business an absolute 
 impossibility. 
 
 The margin of profit between the consumer and the pro- 
 ducer of grain is probably the smallest of any commodity in 
 
SALES, STOCKS AND BONDS 187 
 
 which the middleman has a transfer. The margin is not 
 more than three cents per bushel. The local grain man finds 
 it necessary to take two cents and Chicago commission houses 
 not more than one-half cent. 
 
 The services performed for the producer and local dealer 
 of grain through the market reports by means of the 
 telegraph and telephone is very great, and any hour of 
 the day the producer of grain or the owner of the elevator 
 in the small town may secure the market price, and in conse- 
 quence the elevator owner may pay the producer the highest 
 price and handle his business on this very narrow margin, 
 as he knows what he can sell grain for at any special time. 
 
 123. Sales and Values. The sales in this board of trade 
 determine the price of such commodities for the United States 
 and practically for the world. Provisions are bought and sold 
 on the board of trade for present or future delivery. When 
 grain is sold to be delivered at once, it is called cash grain, 
 and one who deals in grain to be delivered at some future 
 time is said to be dealing in futures. The usual time for 
 future delivery is in May, July, September, and December. 
 
 The changes in the market from day to day or from hour 
 to hour are dependent on the actual sales. Whenever a sale 
 is made, if it changes in price ever so little from the price of 
 the last amount sold, this price constitutes a change in the 
 market price. These changes are sometimes very frequent, 
 the prices of the commodities ranging higher or lower accord- 
 ing to the opinion of the buyer or seller as to what the prices 
 will be at the time of delivery, be it in the months of May, 
 July, September, or December. 
 
 A person who buys grain or provisions, hoping to sell later 
 at a profit, is said to be long on grain or provisions; and one 
 
1 88 A FIRST BOOK IN BUSINESS METHODS 
 
 who sells them, hoping to buy later at a lower price and 
 thus make a profit on the transaction, is said to have sold short. 
 
 124. Brokers Bulls and Bears. Only members can deal 
 on the floor of the board of trade, and should any one not a 
 member desire to buy or sell grain there, he must do so 
 through some one who is a member. This person who buys 
 and sells for another is called a broker, or commission 
 merchant. The prices charged for such sale or purchase are 
 regulated by the rules of the board, and on grain range from 
 one-eighth of a cent to one cent a bushel, according to the 
 kind and quantity of the grain bought or sold. 
 
 Form CXXXIV. 
 
 SATURDAY'S RANGE OF PRICES 
 
 The following shows the range of prices Saturday 
 on the Chicago Board of Trade: 
 
 -- Closing 
 Fr 
 Men. 7. 
 
 Saturday, Friday, 
 Men. 8. 
 
 Wheat Open. 
 March. $ .75 
 
 E'. 
 . 
 
 Corn- 
 March 
 May. 
 July. 
 Sept. 
 Dec.. 
 
 Oats 
 March 
 May. 
 July. 
 Sept . . 
 
 Flax- 
 
 Por'k 
 
 March 1510 
 
 May.... 15.32J-6 15.32^ 15.25 15.30 
 
 July.... 15.50 15.52J^ 15.42^ 15.47^ 
 
 Lard- 
 March.. 9.27J6 
 
 lay.... 9.42*6 9.42^ 9.37J^ 9.42Ji 
 
 uly.... 9.52^ 9.52^ 9.47j| 9.52fi 
 
 )t.... 9.62J 9.62^ 9.62>g 9.62J^ 
 
 1.72 
 
 1.72 
 
 15.20 
 15.40 
 15.57H 
 
 9.30 
 
 9.55 
 9.67^ 
 
 Persons who buy grain or other provisions believing that 
 they will sell for a greater price in the future, are called 
 
SALES, STOCKS AND BONDS 189 
 
 bulls. This name came to be applied to such, operators on 
 the board because of the tendency of a bull to elevate every- 
 thing with which he comes in contact. Those traders who 
 sell provisions believing that prices will decline in the future 
 are called bears. 
 
 We often read comments in the newspapers on the 
 market prices as they go higher or lower, and such state- 
 ments may be seen as the following: "The bulls had things 
 their own way to-day," which means that prices had an 
 upward tendency ; or "The bears had their inning," indicating 
 a falling market. 
 
 The opening, high, low, and closing prices of commodities 
 are usually given. (See Form CXXXIV.) 
 
 125. Inspection and Grading. The prices of provisions 
 dealt with on the board of trade are regulated, as are the 
 prices on commodities sold in other places, by the demand 
 and the supply ready to fill such demand. The grain and 
 provisions sold on all regular boards of trade are inspected 
 and graded by experts, who are either appointed by the board 
 or by the state governments. 
 
 In some cases such inspection is regulated by statute and 
 carried on by officers of the state. Grain is graded according 
 to its nearness to or remoteness from a certain standard, as 
 No. I, No. 2, No. 3, No. 4, or "sample grade," as the case may 
 be. No. i is the best and "sample grade" the poorest quality. 
 In some states four grades of wheat and corn have been 
 decided upon, five of barley, five of oats, and three of 
 rye. The quality is determined by the size, color, and full- 
 ness of the kernel, together with its weight, dryness, and 
 freedom from dirt. This grading of grain greatly facilitates 
 trade, because it establishes a basis of comparison for both 
 buyer and seller. 
 
A FIRST BOOK IN BUSINESS METHODS 
 
 125 a. Bucket Shop. The Chicago Board of Trade has 
 been declared by the Supreme Court of the United States a 
 legitimate and desirable organization, as a large portion of 
 the grain of the United States passes inspection in Chicago 
 and is handled on the board of trade. 
 
 But there are organizations of men formed purely for 
 speculating in the future rise and fall of prices of commodities 
 that have no connection with the board of trade and buy 
 and sell no grain. These organizations, called bucket shops, 
 have been declared illegal by the courts, over three thousand 
 of them being closed in the years 1908-1911 by the United 
 States government authorities because they had no legitimate 
 trading functions and were gambling organizations. 
 
 126. Stock Companies. When several persons desire to 
 organize a company other than a partnership, they come 
 together and make out a statement to the effect that they desire 
 to organize such a company, stating its name, the place and kind 
 of business they wish to transact, together with the amount of 
 capital and the division of this capital in the form of shares. 
 This certificate is then sent to the Secretary of State, who will 
 grant them a charter which defines their rights and powers. 
 
 The money or capital of the company is called the capital 
 stock, and this stock is divided into shares of equal amounts. 
 The usual par or face value of a share is one hundred dollars. 
 
 Every person who joins the company, or, in other words, 
 subscribes and pays for stock, receives a certificate of stock 
 showing the amount of his holdings, and he is called a share- 
 holder or stockholder. These certificates of stock may be trans- 
 ferred from one person to another by indorsement. Each 
 shareholder has voting power in the company or corporation 
 according to the number of shares he holds. 
 
SALES, STOCKS AND BONDS 191 
 
 If the company makes profits, they are divided among 
 the stockholders according to the number of shares held by 
 each, and such divided profits are called dividends. Dividends 
 are declared on a percentage basis; i. e., a certain number of 
 hundredths of the capital stock. Dividends are declared 
 quarterly, semi-annually, or annually. 
 
 127. Stocks and Bonds. Stocks are of two kinds, pre- 
 ferred and common. Preferred stock is that which entitles the 
 owners to dividends out of the net profits in preference to the 
 common stock. Common stock entitles the owners to an equal 
 proportionate dividend of the corporate profits and assets, with 
 one shareholder or class of shareholders having no advantage, 
 priority, or preference over another. Dividends are declared 
 first on the preferred then on the common stock. 
 
 Should a stock company wish to borrow money for any 
 purpose, as, for example, to increase its plant or to acquire 
 more money to carry on the business, it may issue bonds or 
 certificates of indebtedness, bearing interest. These bonds 
 may be transferred the same as stock. They are issued for a 
 number of years and have coupons attached which are cut off 
 at stated intervals and presented to the officers of the com- 
 pany for the payment of interest. Bonds are secured by a 
 mortgage or trust deed on the property of the corporation. 
 A sum is usually set apart annually to redeem or pay for 
 these bonds when they become due. This sum is called a 
 sinking fund. The owners of these bonds run less risk of loss 
 than the shareholders, for the bonds bear interest whether 
 the company is able to pay dividends on its stock or not. 
 If the company is very successful, however, the shareholders 
 may fare better than the bondholders, for the latter are 
 entitled to the interest stipulated in the bond only, while 
 
192 A FIRST BOOK IN BUSINESS METHODS 
 
 the shareholders may receive large dividends. The United 
 States Government issues bonds from time to time; that is, it 
 borrows money and issues certificates of indebtedness which 
 bear interest for the amount. These bonds usually bear 
 interest at 2, 3, or 4 per cent, and are called Government twos, 
 three 's, and fours. 
 
 128. Stock Exchanges. Stocks and bonds, especially of 
 the larger corporations, are frequently bought and sold, and 
 in order to have a place where people wishing to buy and 
 sell can come together, stock exchanges have been formed in 
 the leading cities of this and other countries. The principal 
 stock exchange in the United States is the New York Stock 
 Exchange in New York City. There the members buy and 
 sell stocks and bonds for themselves and others, the same as 
 grain and other commodities are bought and sold in the 
 Chicago Board of Trade. The market prices of these stocks 
 and bonds are quoted in the financial columns of our daily 
 papers, as are the different prices of other commodities. 
 
 In the table of prices on page 193 it will be noted that both 
 the common and preferred stocks are quoted, and also that 
 some of them, as, for example, the Colorado & Southern, have 
 first and second preferred stock. The abbreviation used to 
 distinguish the preferred from the common stock is pfd. All 
 stocks not otherwise marked are common stocks. 
 
 129. Of the Quotation's Value. The value of the stocks 
 quoted on the following page depends upon a number of con- 
 siderations, some of which are the reputation of the managers 
 of the various corporations, the amount and regularity with 
 which dividends havebeen paid in the past, the amount of bonds 
 outstanding, the earning capacity, present and prospective. 
 
SALES, STOCKS AND BONDS 
 
 193 
 
 Form CXXXV. 
 RANGE OF PRICES ON THE NEW YORK STOCK EXCHANGE 
 
 The following table shows the range of prices on the New York Stock Exchange March 8, 
 the number of shares traded in each stock, and the net 
 
 March 7, 1902: 
 
 changes from the closing prices 
 
 STOCKS. 
 
 Am. Sugar... 
 
 Am. Loco 
 
 Am. Cot. Oil. 
 
 Dopfd 
 
 Am. Smelting. 
 
 Dopfd 
 
 Am. Gr. Tw... 
 Am. Linseed.. 
 
 Dopfd 
 
 Am. CarFdy.. 
 
 Dopfd 
 
 Am. Ice 
 
 Dopfd 
 
 Atchison 
 
 Dopfd 
 
 Anaconda 
 
 Amal. Copper. 
 Bkln. R. T.... 
 
 B.&O 
 
 C.&N.W.... 
 Chi. & Alton.. 
 C., M. & St. P 
 C.,St. P.,M.&0 
 C., R. I. & P. . 
 Chi.Terml 
 
 Dopfd 
 
 Can. Pacific... 
 Cn. Gas (N.Y.) 
 Colo. & So.... 
 
 DolBtpfd. . 
 
 Do2dpfd... 
 C..I.&L 
 
 4,900 
 800 
 
 1,700 
 200 
 400 
 100 
 
 100 
 3,200 
 
 100 
 2,700 
 
 600 
 2,000 
 9,000 
 
 600 
 13,000 
 1,000 
 4,000 
 1,100 
 1,200 
 3,200 
 
 100 
 4,400 
 
 300 
 
 100 
 1,100 
 2,000 
 7,800 
 
 800 
 1,200 
 1,500 
 
 STOCKS. 
 
 M M K. & T. pf 
 Met. St. Ry.<. 
 Mex. C. (Ltd.). 
 Mo. Pacific.... 
 Mex. N. ctfa... 
 
 Dopfd 
 
 M. & St. L ... 
 Nat. Biscuit. . 
 National Salt.. 
 N. Y. Central . 
 Norfolk& W. 
 
 Dopfd 
 
 North Am. Co. 
 N. Y., O. & W. 
 N. Y., C. & S. L 
 N. Y. Dock pf. 
 P. & Eastern.. 
 Peopled Gas... 
 Pa. R. R . . . 
 Pacific Mail . 
 Pressed Stl. C. 
 
 Dopfd 
 
 Pacific Coast . 
 
 Do 2d pfd . . 
 Quicksilver... 
 
 Dopfd ... . 
 Reading 
 
 Do2dpfd... 
 Rubber Good*,. 
 Rep. Iron &S.. 
 
 Dopfd 
 
 Rutland pfd.... 
 
 300 
 
 800 
 
 1,100 
 
 6,000 
 
 17,200 
 
 7,100 
 
 2,300 
 
 100 
 
 100 
 
 600 
 
 400 
 
 100 
 
 1,700 
 
 600 
 
 100 
 
 200 
 
 100 
 
 400 
 
 12,900 
 
 2,700 
 
 300 
 
 100 
 
 1,000 
 
 600 
 
 700 
 
 600 
 
 3,400 
 
 3,300 
 
 1,100 
 
 8,TOO 
 
 74i* 
 
 200 
 
 47^ 
 
 50^ 
 
 151 >| 152 
 
 47% - 
 
 72 
 
 : 
 
 It will be noted that some of the stocks sold at very much 
 above par the Chicago & North Western Railroad at two 
 hundred and thirty dollars ($230) per share, and the Consoli- 
 dated Gas Company of New York at two hundred and twenty- 
 one dollars and seventy-five cents ($221.75) per share; i. e. y one 
 share of Consolidated Gas stock was one hundred and twenty- 
 one dollars and seventy-five cents ($121.75) above par. It 
 will also be noted that others sold at very much below par. 
 Quicksilver stocks sold at four cents ($.04) on the dollar or at 
 four dollars ($4.00) a share, and Chicago Terminal stock sold 
 at seventeen and three-fourths cents ($.17!) on the dollar. 
 
I 9 4 A FIRST BOOK IN BUSINESS METHODS 
 
 In the following quotation of bonds the interest is given, 
 as, Northwestern Elevated 4's, meaning the Northwestern 
 Elevated Railroad bonds bearing 4 per cent interest. 
 
 Form CXXXVI. 
 
 PRICES OF BONDS 
 
 Chicago Gas 5s 1 
 
 Northwestern Elevated 4s 
 
 West Chicago con. 5s 
 
 Met. Elevated gold 4s 101 
 
 Consumers' Gas 5s 108 
 
 Lake Street deb. 5s ,103^ 
 
 Con. Traction 4^8 70 
 
 North Chi. City Ry. 4^8 106$ 
 
 Pearsons-Taft 4.40s 99M 
 
 QUESTIONS ON CHAPTER X. 
 
 /. From what source are the market quotations given 
 in the newspapers derived ? 
 
 2. What is a board of trad,e ? 
 
 j. Is there any difference between a board of trade and 
 a stock exchange ? 
 
 4. Of what use is a board of trade? 
 
 5. What is cash grain? What is "dealing in futures" ? 
 
 6. What makes the changes in prices of commodities 
 bought and sold in the market? 
 
 7. Who can buy and sell on the floor of the board of 
 trade ? 
 
 8. What is a broker? 
 
 o. What is meant by the term "bear"? By "bull"? 
 
 10. How many grades of wheat are there in some grain 
 markets ? How many of corn ? How many of oats and rye? 
 
 n. What is meant by capital stock ? By par value of stock? 
 
 12. What is meant by dividends ? 
 
 ij. What determines the value of stocks and bonds sold 
 in the market ? 
 
SALES, STOCKS AND BONDS 195 
 
 14.. What is common stock? What is preferred stock? 
 75. Does capital stock draw interest? 
 
 16. Where is the leading stock exchange of the United 
 States? 
 
 1 7. Of what value are boards of trade and stock exchanges 
 to a community? 
 
 18. Telegraph your broker in Chicago to buy for you 
 50,000 bushels of corn. 
 
 GENERAL REVIEW EXERCISES. 
 
 7. What is the usual size of a sheet of paper for & 
 business letter ? How should it be folded ? 
 
 2. What is meant by the address of a letter ? 
 
 j. What is the salutation ? 
 
 ^. What is the phrase "Yours truly" called when placed 
 at the end of a letter? 
 
 5. What is a telegraphic code ? 
 
 6. What advantage is there in using these codes ? 
 
 7. Are the words in the address and signature of a tele- 
 gram counted in the cost for sending the message ? 
 
 8. After sending a customer an invoice of goods purchased 
 by him, you find that you have made a mistake in the footing, 
 and the amount is $10.00 too much. Would you send him a 
 corrected invoice or a credit memorandum for the amount? 
 
 p. What is a check ? Is it legal tender ? 
 
 70. What advantage is there in having a check certified? 
 
 77. What is meant by the term "ironclad note"? 
 
 12. What is a collateral note ? 
 
 7j. You wish to send a package by express C. O. D. to H. 
 G, Hulbert, Stillwater, Minn What papers are you required 
 to make out? What is the express agent required to do? 
 
CHAPTER XL 
 
 PARTNERSHIP, INSURANCE 
 
 130. Partnership. A partnership is an association of two 
 or more persons for the purpose, of carrying- on business. 
 Each member of the firm should contribute something 
 toward the success of the enterprise, but it is not necessary 
 that each contribute an equal amount of capital, nor need 
 their investments in the enterprise be all of the same kind. 
 Sometimes one will invest capital without undertaking any 
 personal service, while others contribute labor or experience. 
 The division of the profits is usually in proportion to the 
 value of that which each partner puts into the business. If 
 there be no special agreement among the members as to the 
 division of the profits, the law will presume that the partners 
 intend to divide the profits equally. 
 
 When a partnership of two or more individuals is formed, 
 the agreement which they enter into regarding matters of 
 detail should be in writing. Although there is no provision 
 of law which positively requires that an agreement for a part- 
 nership should be in writing-, there are many matters per- 
 taining to any business which may cause dissatisfaction among 
 partners, and it is best in all cases to have a written agree- 
 ment specifying the kind of business in which the firm is to 
 engage, the names of the parties, and the period during which 
 
PARTNERSHIP, INSURANCE 197 
 
 the partnership is to last, the amount which each partner is 
 to contribute to the business, the nature of the duties which 
 any of them undertake to perform, and any other matters of 
 moment pertaining to the business. 
 
 The duration of the partnership should be specified, because 
 if that is not done any partner may withdraw when he chooses, 
 although he could not, by withdrawing, rid himself of any 
 responsibilities which had already been incurred. (See 133.) 
 If one of the partners dies, the firm is dissolved, unless the 
 others agree to continue the business. 
 
 If the profits of the firm are not to be divided equally 
 among the partners, the manner of their division should be 
 clearly stated. 
 
 131. Silent and Nominal Partners. Sometimes a person 
 invests capital in the business, but takes no active part in its 
 management. Such a person is called a silent partner. He 
 usually has a share in the gain, and is as fully responsible for 
 the debts of the firm as though he took an active part in the 
 management of the business. 
 
 Sometimes a person lends his name to a partnership for 
 the purpose of giving credit to the business, and he is then 
 said to be a nominal partner. Although he has no capital in 
 the business and gets no profit out of the transaction, he is 
 responsible for the obligations of the firm, because those 
 who do business with the firm are perhaps induced to do 
 so on account of his connection with it. It is not a common 
 occurrence for a person to become a nominal partner, and he 
 does so only as an unusual accommodation to his friends, 
 having implicit faith in the honesty and integrity of the 
 other partners, just as a man has who signs for a friend an 
 accommodation note. 
 
198 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXXXVII. 
 
 4 
 A 
 
 ait Barliri .ton nimcd to. ojred 
 
 tta. /or IV WJPM <wt nuuvniM f in uid t.uiu, l 
 ,11! U 151 
 
 tenors and to Iko fcfmosf of their tkill and pout? exert Ikemulvts /or their joint interest 
 
 (to ou-wi. e/braoil-. ,3.< (. I*a( lte fUl end .01 a all lima i a rin, Ik, 
 t. bar, po. <nd durturje toiuUy irtimn (ken. JI mto oi tr uftnxt ttol moj i. 
 >^nn out non V nm( tf tk, uid tasiw, md. Out ell faint, pr&l, and increan 
 
 Articles of Copartnership 
 
PARTNERSHIP, INSURANCE 
 
 199 
 
 Form CXXXVIII. 
 
 jjlnJ il i)! fanti i <*i irtn Ik. oii Jrtfcl. M (km ikil fa *o<i oxJ t^l <d dl tow, 
 nnn (k> Mnliiiiujit. o/ (tor a-porlwrikj, jn^cl, >rt, J MM took df Keoutf, kmin nek iff Ikt 
 Mfcf ca-tartntn ihal! mtv and in torn, u nil oB My (k or rtkn- o/ Om mriuil. paid, 
 laid cut. mi uptiut, i, uJ dixtt tl* mid tuvua, la alto all axd,, > 
 
 'id tutnui. and (k. lum^mnl (Vtm,/, 
 
 i Mwem (k. wtd eo-portturt, sa that either of them may haM 
 
 allfrafit, and inereau ij (km, or ri(krr tf (km, jwloiW, mi oj<o, all 
 
 and all cO*r thing, ty .(km mod., recriiol, duoar<(. ortrA done, or mftrtif in 
 
 Ira., jiat. and foal account of all tHaift nlatiaa to (Mr tod teiwM. and >n < 
 
 tamt, a*d alt v*l nt,y Ih, ,txh and tttdu. o> wH ai (k. aaiiu and iumu. (ktrm/. .kifk <kall o 
 
 Articles of Copartnership 
 
 132. Liability of Partners. In all matters of ordinary 
 business, each partner has authority to act for the firm, and 
 his acts will be binding upon the firm ; but this would apply 
 only to transactions in their regular line of business.^- One 
 partner cannot execute a bond by which the firm becomes a 
 
200 A FIRST BOOK IN BUSINESS METHODS 
 
 surety, or make a deed of real estate belonging to trie firm, 
 or confess judgment in the name of the firm, unless his asso- 
 ciates concur with him. 
 
 Every partner in an ordinary firm is liable, together with 
 the others, for the whole indebtedness of the firm, and if a 
 firm becomes embarrassed so that it cannot pay its creditors 
 in full, they can proceed against the firm and take any real 
 or personal property belonging to it which can be found. If 
 there is not a sufficient amount of property belonging to the 
 firm to pay its indebtedness, they can collect from the private 
 property of any or all of the partners. 
 
 If one of the partners of a firm becomes privately indebted 
 so that he cannot pay his creditors in full, they can get judg- 
 ment against him and take such of his property as is not 
 exempt from execution, and if there is not a sufficient amount 
 of his private property to pay his indebtedness, they can take 
 proceedings to have the interest which he holds in the firm 
 applied to the payment of his debts. But they could not take 
 in execution any specific piece of property belonging to the 
 firm, as his share, and apply it to the payment of his debts. 
 An accounting must first be had, showing how much the firm 
 is owing him as his share in the business,, and this must be 
 done in a manner prescribed by law. 
 
 A new partner admitted into the business is not responsible 
 for the debts of the old firm unless he has previously agreed 
 to become so responsible. 
 
 133. Methods of Dissolution. A partnership may be dis- 
 solved by mutual agreement of the partners or by a decree of 
 a court of equity. 
 
 If one of the members of a firm should conduct himself 
 in suoh a way that the firm is likely to become financially 
 
PARTNERSHIP, INSURANCE 201 
 
 embarrassed, and should refuse to agree to a dissolution of 
 the partnership, the partners wishing to have the partnership 
 closed up may apply to a court of equity for a decree of dis- 
 solution. 
 
 A member of the firm cannot withdraw from the partner- 
 ship at any time he chooses to do so and thus rid himself of 
 any obligation or indebtedness which the firm has already 
 incurred. Some provision must first be made for paying the 
 debts of the firm. 
 
 If a member of the firm withdraws from the partnership, 
 he should, in order to protect himself from any obligations 
 which the firm may incur after he has retired, publish a notice 
 of his withdrawal in the newspapers, and he should also send 
 a notice to those with whom the firm has been doing business. 
 
 Form CXXXIX. 
 
 NOTICE OF DISSOLUTION 
 
 The copartnership heretofore existing between R. Blair and 
 L. Allen, under the firm name of Blair & Allen, is this day dis- 
 solved by mutual consent. 
 
 The business will be continued by R. Blair, who is authorized 
 to settle the accounts of the late firm. 
 
 August 10, 1901. R. BLAIR. 
 
 L. ALLEN. 
 
 134. Limited or Special Partnership. The laws of many 
 of the states provide for a limited or special partnership. This is 
 an arrangement by which a person can put a certain amount 
 of money into a business and receive a proportion of the 
 profits without being liable to lose any more money than 
 he has invested in the business. A partnership of this kind 
 can be formed only under positive statutes. 
 
202 A FIRST BOOK IN BUSINESS METHODS 
 
 135. Insurance. Insurance, although known to the ancients, 
 has had its principal development during modern times. It 
 was first applied to shipping. The fear of partial or total loss 
 of a cargo, through the action of the elements or foes on the 
 high seas, tended to check the growth of commerce. Few 
 people were so wealthy that they alone could afford to suffer the 
 great loss of a ship and cargo. By dividing the risk among 
 many, it was seen that the proportion of loss to each might be 
 small. Associations were formed for the purpose of protect- 
 ing the members from losses of this nature, and out of such 
 associations have grown the modern insurance companies. 
 
 The insurance business has grown to mammoth propor- 
 tions during the last century, until now no prudent man will 
 allow his property to be without the protection of insurance. 
 The object of insurance, then, is to distribute any losses which 
 may occur to one or more persons among a great many per- 
 sons, and to scatter a large number of risks over a wide terri- 
 tory and during a long period of time, so that the loss to each 
 person will be small. 
 
 Example : Suppose that one hundred buildings out of every 
 five thousand should burn every year. No one can tell which 
 hundred this will be, but if each owner of the five thousand build- 
 ings pays his pro rata share of the value of the one hundred 
 buildings, the loss will fall but lightly on each, where otherwise 
 some might be totally ruined. 
 
 Insurance may be defined as a contract whereby one person 
 agrees to protect another against loss. The written contract 
 by which one guarantees to protect another is called a policy, 
 and the amount paid for such a guarantee is called the 
 premium. Both parties are bound by the conditions named in 
 the policy. 
 
PARTNERSHIP, INSURANCE 203 
 
 136. Fire Insurance. There are many kinds of insurance 
 and a great variety of risks. The farmer sometimes insures 
 his property against loss by storms ; the manufacturer against 
 loss by boiler explosions; the banker against loss from a 
 robbery; but the most common kinds of insurance are fire 
 insurance, life insurance, and marine insurance. The most 
 important of all these is fire insurance, and as the underlying 
 principles are the same for all, we will consider at length 
 only this most common form. 
 
 By a careful compilation of statistics, insurance companies 
 are enabled to determine approximately what the fire loss 
 will be for a certain year and upon certain classes of prop- 
 erty, if there are no extraordinary conflagrations. The rates 
 of insurance are based upon this estimate and the sums so 
 collected, though small in each particular case, reach large 
 proportions in the aggregate. A portion of the amounts col- 
 lected in premiums is applied to the paying of losses. An 
 effort is made by insurance companies to keep the sum col- 
 lected very close to the actual loss. The profit to all companies 
 doing business in the United States for the past ten years, on 
 insurance written, has been one-third of a cent out of each 
 dollar received. In other words the people of the United 
 States have received their insurance practically at cost. 
 
 137. Classes of Companies. There are two general classes 
 of companies, mutual companies and "Old Line" companies. In 
 the former, each person insured is a shareholder, and the 
 losses are apportioned among them according to the amount 
 of loss suffered by such shareholders. In the "Old Line'' 
 companies, a company is formed whose shareholders assume 
 all liability for loss and reap all the gain, if there be any. 
 The "Old Line" companies depend for their profits for the 
 
204 A FIRST BOOK IN BUSINESS METHODS 
 
 most part on the interest of the money paid them in pre- 
 miums. For example, should the premiums paid in to such 
 a company equal $1,000,000 a year, this company would have 
 the use of approximately $500,000 a year. This money is 
 invested by the companies in the best securities and yields 
 them a fair interest. Thus we see that insurance is of advan- 
 tage to both parties. It relieves the person who takes out 
 the policy of a risk he would otherwise have to assume and 
 leaves a margin of profit for the insurer on account of the risk 
 of loss he takes. 
 
 138. Policies. Policies of insurance are of two kinds, open 
 and valued. The usual form of policy is the open policy, 
 which leaves the question of value to be determined after 
 the loss has occurred. Some states, however, have by law 
 declared all policies on buildings to be valued policies, which 
 means that the value of the property insured is fixed at the 
 time of writing the policy, and that that amount must' be 
 paid whenever a total loss occurs regardless of whether or 
 not it can be shown that the building may be replaced for a 
 less amount. These laws have been strenuously opposed by 
 the insurance companies because they claim that it puts a 
 premium on crime, for, should a building be insured for more 
 than its value, the owner might be tempted to destroy the 
 building in order to secure the amount of the policy. 
 
 The policy holder must have an insurable interest in the 
 property he insures or the policy is void. Insurable interests 
 are of many kinds. Whoever owns property or has any inter- 
 est in it, or stands in the nature of a trustee, executor, or 
 administrator, or is a mortgagee or part owner, may insure 
 it for that interest. The law will not permit one to insure 
 property for a greater amount than his insurable interest. If 
 
PARTNERSHIP, INSURANCE 205 
 
 he owns a house, he may insure it for its insurable value. If 
 he owns any portion of a piece of property, say one-half, he 
 may insure for that portion, but that portion only. 
 
 139. What Policies Contain. The policies in a fire insur- 
 ance contract, although there are usually a multiplicity of 
 conditions, always contain the following principal elements : 
 
 1. A description of the property insured. 
 
 2. The amount for which the insurance policy is given. 
 
 3. The length of time the policy is to run. 
 
 4. The amount of premium to be paid. 
 
 If the property insured is a building, the description 
 includes the location, the materials of which it is constructed, 
 the way in which it is heated and lighted, the location of "the 
 nearest buildings and the materials of which they are con- 
 structed, the use to which the building is to be put, the interest 
 of the insured and the mortgages, if any, that are carried on 
 the property, and the amount, if any, of insurance already 
 carried. 
 
 If it is personal property that is insured, a general de- 
 scription of the property is given, and its value; also the kind 
 of building in which it is placed, with a description of the 
 surrounding buildings, as above. 
 
 There is usually, also, a clause forbidding the storage of 
 explosives, such as gunpowder and dynamite, excepting very 
 small quantities, or inflammable oils, such as kerosene, gas- 
 oline, or benzine, in the building or within a certain distance 
 of the building, excepting such an amount as shall be neces- 
 sary for lighting or heating. This clause does not prevent 
 persons in business from selling gunpowder and inflammable 
 oils in the way of trade, because the insurer is supposed to 
 know the nature of the business before he issues the policy. 
 
206 A FIRST BOOK IN BUSINESS METHODS 
 
 140. Forms of Risks. In fire-insurance policies the risk 
 taken by the insurer is the danger of loss by fire and does not 
 include loss by lightning or wind storms unless such loss 
 causes fire, or is particularly provided for in the policy. It 
 does, however, include the damage sustained by putting out a 
 fire. This is very often greater than the loss actually caused 
 by the fire itself. 
 
 As so many elements enter into an insurance policy, it may 
 be readily seen that anything which tends to alter the risk 
 will be of supreme importance to the insurer. Therefore, any 
 alteration of the building, or change in surrounding buildings, 
 or in the use to which the building is to be put, would change 
 the risk. A change in the ownership of such building would 
 also change -the risk. A change of the risk must have the 
 assent of both parties, since an insurance policy is a contract. 
 The insurance company should, therefore, be immediately 
 notified of any contemplated changes in order that the policy 
 may not be rendered void. 
 
 Should an insured building be vacant for any length of 
 time, the insurer should be notified. Vacant buildings are 
 very hazardous risks, because they are earning nothing for the 
 owner and it is presumed, and the presumption is based on 
 experience, that unproductive buildings are more likely to be 
 set on fire than those which are earning something for the 
 owner. So also, if a building is sold, the policy become's void 
 unless the company is notified, because the risk is changed ; 
 and furthermore, because the insured has no insurable interest 
 in it. 
 
 141. Protection from Fraud. It is of the utmost impor- 
 tance to the community as well as to the insurer, that, in 
 the event of total loss, the insured must himself suffer loss. 
 
PARTNERSHIP, INSURANCE 207 
 
 Therefore, policies are never knowingly written for the full 
 value of the property insured. If it is insured to the full 
 value, the owner may be tempted to commit fraud or crime 
 in order to reap the benefit of his insurance. 
 
 Insurance companies usually ask the applicant many ques- 
 tions concerning the building, its contents, the interest of the 
 insured in the building, etc., and the applicant must give a 
 truthful answer to these inquiries in order to hold the compa- 
 nies responsible. These answers, or warranties, are made a 
 part of the policy, and should they prove untrue, whether 
 knowingly false or not, they will affect the validity of the 
 policy, provided they are of a material nature. The inten- 
 tional withholding of facts that would affect the risk would 
 also render the contract voidable; that is, would allow the 
 insurer to declare it void should loss occur. 
 
 142. Proportion of Insurance to Value. The amount for 
 which property is insured, or an insurance policy is written, 
 merely represents the maximum amount the insurer is willing 
 to pay should a loss occur. The amount, however, is the sum 
 on which the premium is based, and should only a partial loss 
 occur, the insured is the loser of a proportion of his premiums. 
 It is a full and complete protection to the property for that 
 amount, and, should the property be totally destroyed, the 
 insured would receive full compensation. But if only a 
 partial loss occurs, the insured will be reimbursed for the 
 actual loss as ascertained by appraisers after the fire. The 
 policy will continue in force on the uninjured portion for the 
 amount less the insurance paid. 
 
 Example : If a man insures a building worth $2,500, for $1,500, 
 and a loss occurs amounting to $1,000, the insurance company can 
 only be held for the loss of $1,000, and the remainder of the policy 
 
208 A FIRST BOOK IN BUSINESS METHODS 
 
 would be in force for $500. Should the building be totally 
 destroyed, the owner will suffer a loss of $1,000, for the company 
 cannot be compelled to pay a greater amount than the policy calls 
 for. 
 
 Most insurance policies contain a provision that the insur- 
 ers may rebuild the building destroyed or replace a stock 
 rather than pay the cash, value of the loss to the insured. 
 Thus, if an insurance company suspects that a man has 
 burned his building for the purpose of collecting the insur- 
 ance, the company can rebuild at, perhaps, a less amount than 
 the policy called for. 
 
 Some policies require that the owner shall exercise due 
 diligence in protecting his property from fire. Thus, if the 
 owner should discover a blaze of such insignificant propor- 
 tions that it could easily be extinguished, and should fail to 
 extinguish it, though fully within his power, and the property 
 insured should be destroyed, the owner could not recover from 
 the company, because of his failure to exercise due diligence. 
 Should the owner of insured property injure or destroy such 
 property in attempting to save it from destruction by fire, 
 the company would be liable for such injury. So the insurers 
 are liable for loss or injury sustained by the blowing up of 
 buildings to prevent the progress of fire, but not for a loss 
 which cannot be directly traced to the fire. 
 
 143. Duration of Policies. Policies usually run for one, 
 two, three, or five years, and the very hour of day on which 
 they are to expire is indicated. Policies are usually written to 
 expire at twelve o'clock noon by standard time. Agents of 
 the companies usually notify the insured of the expiration of 
 the policy some time before such expiration. Should the 
 insured wish to renew his policy in the same company, an 
 
PARTNERSHIP, INSURANCE 209 
 
 entirely new policy is written, to the conditions of which the 
 insured agrees. 
 
 All persons buying insurance protection should read their 
 insurance policies before accepting them. Many more con- 
 ditions than those named above are inserted in policies, and 
 one should be careful to know their nature, because, on the 
 compliance with these provisions will depend the ability of 
 the insured to collect the amount in case of loss. 
 
 QUESTIONS ON CHAPTER XL 
 
 7. What is a partnership ? 
 2. What may the several partners contribute ? 
 j. Need an agreement for a partnership be in writing ? 
 4.. If there is no special agreement as to the division of 
 profits, how are they divided ? 
 
 5. Why is it necessary to state in the agreement what 
 length of time the partnership is to last ? 
 
 6. What is a nominal partner ? 
 
 7. If one member of a firm dies, does that dissolve the 
 partnership ? 
 
 8. Are the acts of each partner binding upon the firm ? 
 p. How may a partnership be dissolved ? 
 
 10. Can one member of the firm withdraw at any time and 
 thus rid himself of any indebtedness of the firm ? What must 
 first be done ? 
 
 //. What is the use of publishing a notice of dissolution 
 of a partnership ? 
 
 12. What is a limited partnership ? 
 
 ij. What is meant by insurance ? 
 
 14.. How many kinds of insurance are there ? 
 
 75. What is a mutual insurance company? 
 
 14 
 
210 A FIRST BOOK IN BUSINESS METHODS 
 
 16. What is the difference between a mutual insurance 
 company and a corporation or " Old Line " company? 
 //. What is meant by a policy ? 
 1 8. What is meant by a premium ? 
 /p. What is meant by an open policy ? 
 
 20. What is meant by a valued policy ? 
 
 21. May a person have property which is not his own 
 insured ? 
 
 22. Are policies ever written for the full value of the 
 property insured ? 
 
 23. What does the description of property insured include ? 
 24.. Is it necessary to notify the insurance company if the 
 
 premises are at any time vacant or unoccupied ? 
 
 25. Will an insurance company knowingly insure property 
 for its full value, and if not, why ? 
 
 26. Write a letter to a local insurance agent telling him 
 that you desire to make some additions to your building 
 which is insured in his company. 
 
 GENERAL REVIEW EXERCISES 
 
 /. In indorsing checks, what form of indorsement is most 
 frequently used? 
 
 2. Name two other kinds of indorsement, 
 j. Define a bill of exchange. 
 
 4. You draw a draft on T. J. Whitman, Nashville, Tenn., 
 for amount of his account, and the draft is returned to you 
 unpaid. Write him, asking for an explanation. 
 
 5. You receive a letter from one of your customers in 
 which he claims that the goods recently received from you 
 were of inferior quality, and asks for a rebate of $10.00. Write 
 a polite letter in reply declining to grant his request. 
 
PARTNERSHIP, INSURANCE 211 
 
 6. Give an example of stoppage in transit u. 
 
 7. What is the difference between a railroad bill of lading 
 and a railroad expense bill ? 
 
 8. What special form of invoice is required when goods 
 are exported to Canada? 
 
 9. When goods are exported from the United States, a 
 statement must be furnished by the shipper showing the kind 
 and value of the goods. What is this statement called ? 
 
 10. Of what use is this statement ? 
 
 //. Will express companies undertake the collection of 
 accounts ? 
 
 12. Is that a good way to make collections ? 
 
 7j. What is a tenant ? 
 
 7^. Why is it necessary that a lease of property for more 
 than one year be in writing ? 
 
 75. What is the person called who gives the lease ? 
 
 16. What is the person called to whom the lease is made ? 
 
 77. What is a guaranty ? 
 
 18. You sell a bicycle to Harry G. Smith. Write a bill of 
 sale for him. 
 
 7p. Name some things which are necessary to the validity 
 of a contract. 
 
 20. Name some contracts which would not be binding. 
 
 21. Would a contract made by a drunken person be bind- 
 ing upon him ? 
 
 22. Name some cases in which a writing is necessary to 
 make a sale binding upon both parties. 
 
 -27. In sales of what amount does the law generally require 
 a writing ? 
 
 24. A dealer in buggies and wagons sells a wagon for $49.00 
 to a farmer who promised to take the wagon, but no money was 
 paid down and no written contract was made ; is the farmer 
 
212 A FIRST BOOK IN BUSINESS METHODS 
 
 obliged to take the wagon? If the wagon had been sold for 
 $60.00, and no written contract was made, how could the con- 
 tract have been made binding? 
 
 25. A man sells goods for cash and the buyer cannot at 
 once pay cash as agreed ; what can the seller do ? 
 
 26. If a man sells goods on credit and the buyer fails to 
 pay as agreed, can the seller take the goods back without the 
 buyer's consent ? What can he do ? 
 
 27. A wholesale dealer sells goods and ships them to the 
 purchaser by freight, and before the goods reach their desti- 
 nation the seller learns that the buyer is bankrupt ; can he 
 stop the goods, and if so, how ? 
 
 28. What is stoppage in transitu f 
 
 29. Is a railroad company obliged to hold goods when 
 ordered to do so by the shipper ? 
 
 jo. What is a common carrier ? 
 
 31. Is a common carrier obliged to carry any and all goods 
 offered ? 
 
 32. Is a common carrier responsible for the goods while in 
 his possession? Suppose the goods were destroyed by fire, 
 would the common carrier be obliged to stand the loss ? 
 
 33. Name some ways in which a partnership can be dis- 
 solved. 
 
 34. What is a limited or special partnership ? 
 
 jj*. Can persons become limited partners in a firm simply 
 by agreeing to be regarded as such ? 
 
CHAPTER XII. 
 
 DEEDS, MORTGAGES 
 
 144. Deeds. When a person buys real estate, he usually 
 receives from the person selling the property, a deed, which is 
 a written instrument showing that the title to or interest in the 
 property has been transferred from the seller to the buyer ; 
 and before the deed is signed and delivered, it is important 
 to the seller, as well as to the buyer, to know that the seller 
 has a good title to the property. This is a matter of so much 
 importance that, as a rule, the title should be examined by 
 some one who has a thorough knowledge of real-estate law. 
 It is better to employ a good lawyer, at considerable expense if 
 need be, than to have any uncertainty in reference to the title. 
 
 145. Abstracts of Title. The person who expects to buy 
 the property should require the seller to furnish him with 
 an abstract of title, as this is of the utmost importance in 
 determining the validity of the title. An abstract of title is 
 a brief memorandum taken from the records, and showing 
 the history of the title from the United States Government 
 to the date of the examination. Abstracts of title are gen- 
 erally prepared by the recording officer or by other persons 
 who make it a business to do such work. The seller of the 
 property should also furnish the purchaser with a certificate 
 
 [213] 
 
214 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXL. 
 
 ..\ 
 
 o7 WITNESSETH. That the sajd part/^f the first part tor and in cooperation of the sum of 
 -s.<l&eji/ ~&ttd:t4&i!ntMA~s. *S/o. 2%fe**7^*^2<e<^...<??afca^z^/./^^.^^.^^<i/ 
 
 o.^^fe^*-. io h nd pa' d by the said parU..of the second part, the receipt whereof is hereby confessed 
 and acknowledged do .by these preseots^grant, bargain, sell, remise, release, alien and confirm unto tbe said 
 
 part v V.ot the second part, and. < 2^r^Ji'...heirs and assigns, FOREVER, Att.^iCfeXLrj. -i-l~ 
 
 certain piece. .or parcel. .of Land, situate and being in the 
 
 State of Michigan.. rT~T~~ ..and described as foUowKto-wil: 
 
 Together with all and singular, the hered 
 ppertainingi To Have and to Hold the said premises, 
 unto the said pirt .U .of the second part, and to. 
 
 belonging or 
 
 with the appurtenance* 
 *** > "ins, FOREVER. And the sud 
 
 Warranty Deed 
 
DEEDS, MORTGAGES 
 
 215 
 
 Form CXLI. 
 
 part^lof the first part,^H^/^^^.-^....neirs, executors and <$.M. 
 
 covenant, grant, bargain and agree, to and with the said part^.. of the second part..-;^^ heirs and 
 
 that at the time of the ensealing and delivery of theie presents, ...*&y..<^. well seized of the 
 
 granted premises in Fee Simple; that they are free from all incumbrances whatever;..- _. 
 
 - -. _ and that^.-iX7 < fc...will-, nd..c5%'...heirs, executors. 
 
 In Witness Whereof. The said p'art/^.of the 
 
 Ddi^and seal:;! the day and year first above written. 
 
 State of Michigan, 
 
 Hl^&&U&UK 
 
 the vear one thousand nine Mndred 
 
 
 -....shall Warrant and Defend the same against all lawful 
 
 .in and for said County, personally appeared 
 
 ^&^^...d.^^ 
 
 be the same person.-^escribed in and who executed the within instrument, who 
 
 kee act and deed. 
 
 t 
 
 
 
 a 
 
 Il ? 
 
 43* 
 
 * 
 
 2 f^HrJ 1 
 
 !$] ^ 
 
 ! I ii^ 
 
 -tiijlh 
 !f?53*. 
 
 t; 
 
 Warranty Deed (continued) 
 
216 A FIRST BOOK IN BUSINESS METHODS 
 
 from the proper officer showing whether or not all taxes 
 assessed against the property have been paid. Abstracts of 
 title are not furnished in many of the older states where the 
 origin of the titles antedates the existence of the United 
 States Government. 
 
 In looking up the title, the records of the various instru- 
 ments affecting the ownership of the property should be 
 carefully examined, and if there have been any mortgages, 
 attachments, liens, or tax-claims, it is important to see that 
 they have all been properly discharged. 
 
 146. Title Guarantee Companies. In many of the larger 
 cities there are companies who will undertake the examination 
 of titles, and will issue policies guaranteeing the validity of 
 the title. A guarantee policy is a binding agreement by which 
 the company undertakes to defend at its own expense any 
 litigation against the title insured by it. These companies 
 employ examiners who have made a life study of real-estate 
 law, and after they have examined the title, and the policy has 
 been issued guaranteeing the validity of the same, the policy 
 holder is protected, to the extent of the amount of the policy, 
 by the company from any losses which may arise if the title 
 should prove to be imperfect. 
 
 This is a form of insurance business which has reached 
 large proportions in recent years. 
 
 147. Parties to a Deed. The person selling the land is 
 called the grantor, and the person buying it is called the 
 grantee. In order to have the deed binding upon the grantor, 
 he must be twenty-one years of age or over, and be of sound 
 mind. It is not necessary, however, that the grantee be of 
 legal age or of sound mind in order to make the deed binding 
 upon the grantor. 
 
DEEDS, MORTGAGES 217 
 
 The laws of some states require that if the grantor be 
 a married man, his wife shall sign the deed with him, for 
 if she did not do so the grantee would not have a clear title. 
 The grantor's wife would still have an interest in the property, 
 which is called the right of dower. This right of dower is the 
 right of the wife to use a portion of her husband's real estate 
 as long as she lives after her husband's death ; and if she sur- 
 vives her husband she may immediately institute proceedings 
 to have her portion of the real estate set off to her own use 
 during the remainder of her life. 
 
 If the grantor of the deed is a married woman, it is gener- 
 ally necessary that her husband should join with her in the 
 execution of the deed, but this is not required in some states. 
 
 The deed should be written or printed, or it may be partly 
 written and partly printed. Blank deeds may be purchased at 
 almost any stationery store. It is much better for the ordi- 
 nary person to use a printed form, because they have been 
 drawn up very carefully by competent lawyers. 
 
 148. Forms of Deeds. Deeds are not all alike. They may 
 be general warranty deeds, or special warranty deeds, or quit- 
 claim deeds. But a purchaser of property always desires a 
 general warranty deed if he can get it, for in a general warranty 
 deed the grantor agrees for himself, his heirs, executors, 
 administrators, and assigns, that, at the time of the ensealing 
 of the deed, he is lawfully seized of the premises described in 
 the deed, that they are free from all encumbrance, and that 
 he will warrant and defend the grantee and his heirs and 
 assigns against all lawful claims whatsoever. 
 
 In a quit-claim deed the grantor simply conveys any interest 
 which he has in the property to the grantee. He does not 
 warrant the title to the property, nor warrant the grantee 
 
218 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXLII. 
 
 $*BTO ^ 
 
 ... .&. .jt^.p&:J^S&lk/, 
 
 ffeal 
 
 _../ 7*toir County, in the Statt of Indiana,, 
 
 -*-*CONVEY AND QUIT CLAIM 
 
 rrr.GYwHfy, >UA wo<e tf^eaat^a^^. ^./JT M 
 
 sw? o/_.. j^-i^ ^^%gg^^ <a;<^/ J&erxtf^s^cst pnrMKs, 
 
 the receipt whereof is hereby acknowledged, the follcuing REAL ESTATE, in Elkhart County 
 in the State of Indiana, to-wit: 
 
 STATE OF INDIANA, ELKHART COUNTY, ss: 
 
 Before the undersigned, a Notary Public in and for said County, personally came 
 
 and acknowledged the execution of the annexed Deed. (^f- 
 
 WITJfESS my hand and Notarial Seal, this -- / ----- day of 
 
 . 
 
 ___Jfa^<2^^^ 
 
 My commission 
 
 Quit -Claim Deed 
 
DEEDS, MORTGAGES 219 
 
 against any other claims to the property. He quits his claim 
 to it. 
 
 149. Special Warranty Deed. A special warranty deed 
 covenants and warrants only against the acts of the grantor 
 and those claiming under him. 
 
 150. Signing 1 , Sealing, and Delivery. After the deed is 
 properly drawn it is ready to be signed, sealed, and delivered 
 to the grantee. 
 
 If the grantor is a married man, his signature should pre- 
 cede that of his wife. If either of them is unable to write, 
 the signature may be made by a mark or cross, in the man- 
 ner following : 
 
 Form CXLIII. 
 
 His 
 
 JOHN X SMITH. 
 Witness mark. 
 
 The laws of some states require that deeds be signed by 
 one or more persons as witnesses to the signature of the 
 grantor, but in others no witnesses are required. 
 
 The acknowledgment is the act of admitting before a justice 
 or notary public that the signatures are genuine and are vol- 
 untarily made. The notary public then stamps the document 
 with his official seal and adds his written signature. This 
 formal signing and sealing of the document by an officer of 
 the law gives a certain solemnity and validity to the signa- 
 tures of the grantor and grantee, and generally no other 
 proof of the execution of the deed is required. 
 
 In some states it is necessary to have a paper or wax seal 
 affixed to the instrument in order to make it legal, while in 
 others a simple scroll of the pen or the letters L. S. are all 
 that are necessary. 
 
220 A FIRST BOOK IN BUSINESS METHODS 
 
 After the deed is signed, sealed, and acknowledged, it must 
 be delivered to the grantee. This is absolutely necessary, 
 for unless the deed is delivered it is of no value, even after 
 it is signed before witnesses, and sealed and acknowledged. 
 
 The delivery of a deed means that the grantor must indi- 
 cate by acts or words, or both, his intentions that the deed be 
 delivered to the grantee. The grantor may direct the grantee 
 to take the deed lying upon the table, and if the grantee takes 
 it there will be a good delivery, and if the grantor throws the 
 deed upon the table with the intention that the grantee shall 
 take it, though nothing be said to indicate the intention, it 
 will be a good delivery. 
 
 A man may make a deed for a piece of land which has 
 already been paid for. and intend to deliver it at the first 
 opportunity, but if he dies before doing so the deed is of no 
 effect. A deed taken from a grantor by fraud, deceit, or com- 
 pulsion is voidable. 
 
 151. Deed in Escrow. A deed is sometimes delivered in 
 escrow, which means that it is deposited with a third party to 
 be by him delivered to the grantee when certain conditions 
 have been fulfilled or certain time has elapsed. When these 
 conditions have been fulfilled and the deed is turned over to 
 the grantee, it takes effect upon his receiving it, the same as 
 though the grantor had delivered it to him personally. 
 
 152. Recording of Deeds. As soon as the grantee 
 receives his deed he should have it recorded. If he did not 
 do so, the grantor, if he were dishonest, might sell the land 
 to some one else, and if the subsequent purchaser bought it in 
 good faith and his deed were placed on record first, his title to 
 the property would probably be good. If the subsequent pur- 
 chaser had notice or knowledge of the unrecorded deed, his 
 
DEEDS, MORTGAGES 221 
 
 title would not be good, even if he had paid full value for the 
 land. But uncertainties are never safe, and in business mat- 
 ters prompt attention to details is of the utmost importance. 
 In every county of the United States there is a public 
 office for the recording of deeds and mortgages, and usually 
 this office is at the county court house. To have the deed 
 recorded, the grantee takes it to the registrar of deeds, who 
 makes an exact copy of the deed in a book kept for that 
 purpose. After the deed has been recorded the grantee may 
 have it returned to him again. The cost of having the deed 
 recorded is usually paid by the grantee, and the cost of draw- 
 ing the deed and having it acknowledged before a notary 
 public, is paid by the grantor. 
 
 153. Trust Deeds. A trust deed is used to convey prop- 
 erty for the use of some other person who is entitled to the 
 proceeds, profits, or use of the property. Trust deeds are 
 very often used as a means of securing the payment of a debt, 
 or the fulfillment of an obligation in the nature of a debt, 
 and in some states they have entirely superseded mortgages. 
 Instead of giving a mortgage to secure the payment of a 
 debt, property is deeded to a third person called a trustee, who 
 becomes the agent for both parties, and he must perform his 
 duties with strict impartiality. The deed specifies the nature 
 of the debt or obligation intended to be secured, and it some- 
 times confers upon the trustee the power, in case the debt or 
 obligation is not paid, to sell the property and pay the debt 
 out of the proceeds, but in many states such a power is con- 
 trary to law. This deed is, in substance and effect, a mortgage. 
 
 As a general rule, the grantor in a trust deed is entitled 
 to the rents and profits of the property therein described 
 until foreclosure unless otherwise stipulated in the deed. 
 
222 A FIRST BOOK IN BUSINESS METHODS 
 
 Upon the payment of the indebtedness secured by a trust 
 deed, it becomes the duty of the trustee to execute an instru- 
 ment called a release deed, which, when recorded, discharges 
 the lien created by the trust deed. 
 
 The forms of trust deeds used in the various states are 
 quite different, and so also are the laws regarding the execu- 
 tion and recording of the deed ; and if sale of the property is 
 made by the trustee, it must be done strictly in accordance 
 with the laws of the state in which the property is located. 
 
 The following shows a simple form of a trust deed : 
 
 Form CXLIV. 
 
 THIS INDENTURE WITNESSETH, THAT THE GRANTOR. . , of the in the County of 
 
 and State of. . . for and in consideration of the sum of Dollars, in hand paid, Convey ..and Warrant. . 
 
 to of the County of and State of... the following described Real Estate, to wit: 
 
 situated in the County of , in the State of , hereby releasing 
 
 and waiving all rights under and by virtue of the Homestead Exemption Laws of the State of , and 
 
 all right to retain possession of said premises after any default in payment or a breach of any of the 
 covenants or agreements herein contained, in trust, nevertheless, for the following purposes : 
 
 WHEREAS, The said Grantor, .herein justly indebted upon Promissory Note.., bearing 
 
 even date herewith, payable to the order of 
 
 Now, If default be made in the payment of the said . . .Promissory Note . , or of any part thereof, 
 or the interest thereon, or any part thereof, at the time and in the manner above specified for the pay- 
 ment thereof, or in case of waste, or non-payment of taxes or assessments on said premises, or ot a 
 breach of any of the covenants or agreements herein contained, then in such case the whole of said 
 principal sum and interest, secured by the said Promissory Note. ..shall thereupon, at the option of 
 the legal holder or holders thereof, become immediately clue and payable ; and, on the application of 
 the legal holder of said Promissory Note. ., or either ot them, it shall be lawful for the said grantee, or 
 his successor in trust, to enter into and upon and take possession of the premises hereby granted, or 
 any part thereof, and to collect and receive all rents, issues and profits thereof; and, in his own name 
 or otherwise, to file a bill or bills in any court having jurisdiction thereof against the said party of the 
 first part, heirs, executors, administrators and assigns, to obtain a decree for tne sale and convey- 
 ance of the whole or any part of said premises for ttie purposes herein specified, by said party or the 
 second part, as such trustee or as special commissioner, or otherwise, under order of court, and out of 
 the proceeds of any such sale to first pay the costs of such suit, all costs of advertising, sale and con- 
 veyance, including the reasonable fees and commissions of said party of the second part, or person 
 
 who may be appointed to execute this trust, and Dollars attorney's and solicitor's fees, and also 
 
 all other expenses of this trust, including all moneys advanced for insurance, taxes and other liens or 
 assessments, with interest thereon at seven per cent, per annum, then to pay the principal of said 
 note.., whether due and payable by the terms thereof or the option of the legal holder thereof, and 
 interest due on said note.. up to the time of such sale, rendering the overplus, if any, unto the said 
 
 party of the first part, legal representatives or assigns, on reasonable request, and to pay any rents 
 
 that may be collected after such sale and before the time of redemption expires, to the purchaser or 
 purchasers of said premises at such sale or sales, and it shall not be the duty of the purchaser to see to 
 the application of the purchase money. 
 
 WHEN The said note. . and all expenses accruing under this Trust Deed shall be fully paid, the said 
 grantee or his successor or legal representatives shall re-convey all of said premises remaining unsold 
 
 to the said grantor or heirs or assigns, upon receiving bis reasonable charges therefor In case of 
 
 the death, resignation, removal from said County, or other inability to act of said grantee 
 
 " made successor in trust herein, with like power and 
 . . shall pay all costs and 
 said note in any suit in 
 
 which either of them may be o'dihtiff or'defendant, by reasou of being a party to this Trust Deed, or a 
 holder of said note.., and fch&'J the same shall be a lien on said premises, and maybe included in any 
 decree ordering the sale of laid premises and taken out of the proceeds of any sale thereof. 
 
 WITNESS, The hand .. and seal of the said grantor ,this day of A. D. 190.. 
 
 [SKAL] 
 
 [SEAL] 
 
 the death, resignation, removal from said County, or other inability to 
 
 then of said. .. is hereby appointed and made successor in trust her 
 
 authority, as is hereby vested in said grantee. It is agreed that said grantor, 
 attorney's fees incurred or paid l"y said grantee or the holder or holders of BJ 
 
DEEDS, MORTGAGES 223 
 
 154. Mortgages. A mortgage is a conveyance of the title 
 of property, either personal or real, given to secure the pay- 
 ment of a debt, or as a guaranty for the performance of some 
 special duty. When the debt is paid or the duty performed 
 the mortgage becomes void. 
 
 Example : Suppose a person buys a farm but is not able to 
 pay the whole amount of the purchase price ; in order to secure 
 the payment of the balance, he gives a mortgage on the farm. Or 
 suppose he borrows some money, and as security for its payment 
 he gives a mortgage on his team of horses. When the money 
 which was borrowed has been repaid, principal and interest, the 
 mortgage, after it has been discharged, is of no value. (See 157.) 
 
 Form CXLV. 
 
 Note Secured by Mortgage 
 
 155- Forms of Mortgage. If a person borrow money, the 
 payment of which he proposes to secure to the lender by giv- 
 ing a mortgage, a note is usually given in which he promises 
 to pay the debt, and the mortgage is given to secure the pay- 
 ment of the note. The note is quite like any other prom- 
 issory note, except that when it is secured by a mortgage 
 this fact is stated in the note. This note accompanying a 
 
224 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXLVI. (a) 
 
 k>^.C2^ __ 
 
 together with all tene 
 
 ment of the sum 
 
 with mterest at the rate of 
 
 and appurtenances thereunto belonging, to 
 
 the re-pay- 
 Dollars. 
 
 percent per annum, payable annually..' 
 
 her the date hereof, 
 
 
 according to the conditions ot.02i. . .certain feZ~&ti&&&!y J2&&/.bezttng even date herewith. 
 
 of the second part, to which these presents are collateral, and also to secure the fulfillment of the folding 
 agreements on the part of said pan/fit of the first part, made in consideration of said sum of money, the 
 receipt of which is hereby acknowledged, viz.: 
 
 It it Agreed, That if the interest.!. , above stipulated to be paid. 
 
 shall remain unpaid for the space of, X<3 days", after the same shall fall due, the whole amount of 
 
 principal, viz.:.C?(?%C^2^2<^r*t...z ^ Dollars. 
 
 is well as said interest, shall thereupon become due and payable forthwith, notwithstanding the time first 
 ibove limited for the payment of said principal shall not then have expired. 
 
 It is Agreed, That said parUAzof the first part shall pay all taxes and assessments which shall be 
 levied on said premises whenever the same shall be payable, and in case said part^.of the second part shall' 
 pay the same, the amount so paid shall be a lien on said premises, secured hereby and payable forthwith, 
 with interest at the rate of *S> per cent, per annum 
 
 It i Ayreed, That should aov proceeding be taken to foreclose this mortgage, said first part j^j? 
 shall pay to said second party.. SeiOZMtfef-fa^... ^ '.. ._'. ..dollars, Attorney Fee 
 
 Mortgage 
 
DEEDS, MORTGAGES 
 
 225 
 
 Form CXLVI. (b) 
 
 It Is Fartftur I&cpresaly Agreed, By and between the parties hereto, that the said part^of the 
 first part shall and will keep the buildings erected and to be erected upon the lands above conveyed, insured 
 against loss and damage by fire, in an amount and by insurers approved by said party__of the second part 
 and assign the policy and certificates thereof to the said part.of .the second part, and in default thereof. 
 the whole amount of the principal, va..^iLLC^&^f<ha^i^L/ __ 
 Dollars, as well as the interest thereon, shall thereupon become due and payable forthwith, at the option of 
 the said party, of the second part, notwithstanding the time first above limited for the payment of said 
 principal shall not then have expired. 
 
 Upon default being made in any agreement herein, or in case of non-payment of said sum ot 
 i. _______________ ..... ______ Dollars, or the interest. 
 
 or any part thereof, at the time, place, and in the manner above specified, it shall be lawful for sai 
 of the second part,. r^^TT ..... heirs, executors, administrators or assigns, and said partf^of 
 
 part, &oflt^fJ>^- empower said parttyof the second part,. ^U/t^ _____ heirs, executors, administrators 
 
 or assigns, to grant, bargain, sell anoVonvey said premises at public vendue. and on said sale, to make and 
 execute to the purchaser, his heirs and assigns, forever, good-and sufficient deeds of conveyance, pursuant to 
 the Statute, rendering the surplus money, (if any there should be), to said part^of the first par7/^*t. 
 heirs, executors or administrators, after deducting the amount then due, said attorney fee. and the costs 
 and charges of said vendue. 
 
 In Witness Whereof,Sztd pzityyol the first part haWhereunto set.T^C^i. ....... hand.^. 
 
 ana seaU*., thi? ---- /$* ..... day rf . _Z2&Utf*s. ..... in the year one th 
 
 hundr 
 
 SI 
 
 -- 
 
 STATE Q|uMicHiGAN. 
 
 Count 
 
 Before me. the subset . &!_ _ . 
 
 JactJt*. 
 _ --- .... --- ..... ---- . . . ___ ....__.. _ . . . ___ in and for 9Mt County. 
 
 this : r^r^-. /.&. .rrrrr: -. -day of. 3ff&ndi . ..-.- . A. D/^.42 personally appeared 
 
 ^ 
 
 known to me to be the person^. described in and who executed the above Mortgage, and _ 
 acknowledged the execution thereof to beTtft&Sb. .frec^act and deed. 
 
 15 
 
 Mortgage (continued} 
 
226 A FIRST BOOK IN BUSINESS METHODS 
 
 mortgage is really a part of the mortgage, and in case of 
 doubt, each may be used to explain the meaning of the other. 
 
 A mortgage is similar to a deed except that there is an 
 additional clause called the defeasance, which provides that if 
 the grantor pays a certain sum of money the mortgage shall 
 be void. 
 
 A mortgage on real estate is called a real estate mortgage, 
 and a mortgage on personal property is called a chattel mort- 
 gage. The man who mortgages his property is called the 
 mortgagor, and the man in whose favor the mortgage is made 
 is called the mortgagee. 
 
 156. Recording of Mortgages. When real estate is mort- 
 gaged the mortgage must be properly acknowledged, signed, 
 sealed, and witnessed, like a deed, before a notary public or 
 other legal officer. Like a deed, too, the mortgage must be 
 recorded. A mortgage on real estate should be recorded 
 in the office of the registrar or recorder of deeds at the 
 
 Form CXLVII. 
 
 CHATTEL MORTGAGE NOTE. 
 
 
 1JP * _ I 
 
 
 
 after date for 
 
 Value Rcceiucd, pro , 
 
 nise to pay to the 
 the 
 
 Order of . 
 
 sum of 
 
 DOLLARS, 
 
 at . with 
 
 interest thereon 
 annually. 
 
 at the rate of per cent per annum, payable 
 
 This note is secured by a Chattel Mortgage to 
 
 of even 
 
 date herewith, on personal property in 
 
 , and 
 
 is to bear interest at the rate of per cent per annu 
 
 no. 
 
 m after 
 
 
 
 
 Form for a Chattel Mortgage Note 
 
DEEDS, MORTGAGES 227 
 
 county-seat, and a chattel mortgage is recorded in the same 
 place, or in such other office as the law directs. The laws of 
 the different states vary somewhat in reference to the record- 
 ing of chattel mortgages, and they are frequently required to 
 be recorded in the office of the township or city clerk. 
 
 When a married man gives a mortgage on real estate to 
 secure the payment of a note, his wife should sign the mort- 
 gage with him, as is required by law in some states, but she 
 need not sign the note. In most states where the law 
 requires that a wife shall sign with the husband in giving a 
 mortgage, it is not necessary to have her signature in cases 
 where the mortgage is given to secure a part of the purchase 
 price of the property. 
 
 157. Payments on Mortgages. A person who loans 
 money and takes as security for its payment a mortgage on 
 buildings which are insured against fire, should see that 
 the insurance policy is made in his favor, so that in case the 
 buildings are destroyed by fire the owner of the property 
 could not collect the money on the insurance policy and leave 
 the land only as security for the money borrowed. 
 
 When a part payment is made for the money borrowed, 
 the amount paid is indorsed on the note. When a payment 
 is made on a mortgage which is not sufficient to pay the 
 whole debt, it is first applied to the payment of the interest 
 due and the balance is to be applied on the principal. 
 
 When the whole amount has been paid it is the duty of the 
 mortgagee to have the mortgage discharged. Sometimes this 
 is done by giving a satisfaction of mortgage (see Form CXLVIIL), 
 which the mortgagor takes to the registrar's office and has 
 placed on record to show that the mortgage has been paid. 
 Sometimes the mortgagee has the mortgage discharged by 
 
228 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXLVIII. 
 
 OF MORTGAGE. 
 
 inoui all PECW t>g Qhest presents, 
 
 . :. and State of. 
 
 Do Hereby Certify, That a certain Indenture .^Mortgage bearing date the 
 day <*:.&.&Ci^tnSU ...... ......one thousand eight hundred 
 
 made and executed ty _.&_ 
 
 of the first part, to . 
 
 of the second part, and recorded in thi-Kcgister's oflfce for the Counsel 
 
 in Liber ' . ./.(? ":. ;. .. of Mortgages, on Vtff>.~^f..'7.jG.~~ on the .... 
 day of <2).jesfc&43&fa4>.. on thousand eight hundred 
 
 In Witne* Whereof, 
 day of 
 
 r^_ 1 is folly paid, satisfied and t 
 
 '1/L. hereunto set../?**** hand...and seal, the .^ 
 
 hundradi 
 
 STATE F/fcCHIOAN. ) 
 
 County of d^ttj^^ . J* On this 5&J&. day of .. 
 
 .- .: before me, a :'_. 
 
 .... in and for said County, personally came the above i 
 
 ^^^^L^a^t^g^a^.^:.^ 
 
 known tojne to be the person . . named in and who executed the above Instrument, and acknowledged 
 _ -3& executed the same for the intents and pnrBOges therein mentioned. 
 
 Satisfaction of Mortgage 
 
DEEDS, MORTGAGES 229 
 
 going to the office where the mortgage is recorded and signing 
 on the margin of the recorded mortgage a statement showing 
 that the mortgage has been paid. 
 
 158. Assignment of Mortgages. A mortgage may be 
 sold like any other property. Suppose a person holds a mort- 
 gage which is not yet due and he wishes to use the money ; 
 he may sell it to some one else and let him hold it until it 
 becomes due. In order to transfer his title to it he must 
 make what is called an assignment of mortgage (see Form 
 CXLIX.), and this assignment should be recorded the same 
 as a mortgage. 
 
 159. Redemption of a Mortgage. It used to be the rule 
 that if the mortgagor did not pay the debt when it became 
 due, he lost the property which he had mortgaged, and could 
 not redeem it, no matter how small the debt was or how 
 valuable the property which he had mortgaged. If he did 
 not pay exactly on the day the debt was due or before, he 
 could not pay it afterwards. But now the law is more leni- 
 ent, and a mortgagor always has a period of time for redeem- 
 ing his property by paying the entire debt which has been 
 secured by the mortgage, with all interest and expenses. 
 Lenders foreclose mortgages less often than one would sup- 
 pose. If the interest is promptly met, many lenders are con- 
 tent to let the mortgage run as an investment. 
 
 160. Equity of Redemption. This right to redeem the 
 property is called an equity of redemption, and it continues 
 until it is extinguished by the foreclosure of the mortgage 
 and a failure to redeem within the time provided by law. 
 When default is made in the payment of principal or interest 
 the mortgagee may foreclose the mortgage, which is a proceeding 
 
230 A FIRST BOOK IN BUSINESS METHODS 
 
 Form CXLIX. 
 
 all |jett fcg these foments, 
 
 of the first part, for and in consideration of the sum of. 
 
 of the United States of JUnerica, U r5^..<?#^. 
 
 ........ in hand paid by 
 
 ' 
 
 .. 
 
 of the seconcfpiftt, t or. before the ensealing or defivery of these presents, the receipt whereof is hereby 
 acknowledged, have granted,, bargained, sold, assigned, transferred and set over, and by these present* do grant, 
 bargain, sell, assign, transfer and set over unto the said part.C?r..of the second part, a certain Indenture of 
 Mortgage, bearing date the ........ g?/. ............... day of ....^kifew*<fc*< ...... one thousand eight 
 
 hundred *v&9Mn&f./ttt?tAj_ _______ made ..... . .... 
 
 >3uwi44tt *&. 
 
 * 
 
 ____ _ _.. and recorded in the Register 1 * 
 
 Office for the County of .. j^^5Z^^\.Z7.. . ..State of Michigan, in Liber . ~*/ of 
 
 Mortgages, at Page. vTy 7 / - with *" and sin e nlar the P"ises 'herein mentioned and described, to- 
 gether with the...%0^fc.... ...or obligation therein also mentioned, and the moneys now due, and the interest 
 
 that ma'y hereafter grow due thereon; To Have and to Hold the same unto the said part.y..of the second 
 
 part, .tT^fcg heirs and assigns, FOREVEB, subject only to the proviso in the said indenture of 
 
 Mortgage mentioned. And^c?* do hereby authorize and appoint the said partQfr df the second part, 
 
 OftM ;._..trne and lawful attorney, irrevocable in. ff?f<u. . name or otherwise, buYat^&K... proper costo 
 and charges, to have, use and take all lawful ways and means for the recoveryof the sum or sums of money now 
 due and owing, or hereafter to become due and owing, upon the 8aid..CZ&...._." ."_ ..and mortgage; and 
 
 in case of payment to give acquittance or other sufficient discharge, as fully as.. ^.. might or could do if 
 
 these presents were not made; and .../ do hereby for#^<*/ heirs, executors and 
 
 > and with the said partft#;..of the second part, that there is 
 ....... due M' 
 
 ^r|}^*W.-x*^..-^^ 
 
 Mortgage the 
 
 nd that -Z2 _ haKlgood, rightand lawful authority lo grant, bargain and sell the same in manner aforesaid. 
 fto^d and' Delivered *v^_ %. , "^ ' ' ' 
 
 teethe year one thoosandl^ hundred and...-^UOt....... ~ before me^ the subscriber, a 
 
 "o^.-Q/tt^feL...:., .......,. * 1 f' ^d County, personally appeared 
 
 Sferf, 
 
 to me known to be the same perepn-describid in and who executed Of/ within Instrument, who 
 
 acknowledge ' the same to be...!WZ J. free act and deed. 
 
 Assignment of Mortgage 
 
DEEDS, MORTGAGES 231 
 
 in a proper court by which the property described in the mort- 
 gage is sold to pay the debt thereby secured. In some states, 
 after the foreclosure of the mortgage and a sale of the prop- 
 erty, there is a further period of redemption, varying from 
 sixty days to six years. 
 
 The mode of foreclosure differs in the several states. Gen- 
 erally a foreclosure of the mortgage includes a sale of the 
 mortgaged property, which is done under the direction of an 
 officer of the court. The proceeds from the sale of the prop- 
 erty are used to pay the mortgage debt and the interest, and 
 if there is anything left it is turned over to the mortgagor, 
 whose rights to the property are then entirely cut off. 
 
 QUESTIONS ON CHAPTER XII. 
 
 / How is the title of land conveyed from one person to 
 another ? 
 
 2. What is an abstract of title ? 
 
 j. Where may an abstract of title be had? 
 
 ^. What is a deed ? 
 
 5. Who is the grantor in a deed? 
 
 6. What is the person buying the property called ? 
 
 7. If a man sell a piece of real estate, is it necessary that 
 his wife sign the deed ? 
 
 8. If a woman sell a piece of real estate, is it necessary 
 that her husband sign the deed with her ? 
 
 p. What is meant by "right of dower"? 
 
 10. What is a general warranty deed ? 
 
 //. What is a quit-claim deed ? 
 
 12. If you were going to purchase a farm or a house and 
 lot, which would you prefer a warranty deed or a quit-claim 
 deed? Why? 
 
232 A FIRST BOOK IN BUSINESS METHODS 
 
 7j. If a man who sells a piece of real estate is unable to 
 write, how can he sign the deed ? 
 
 14. How many witnesses are required to a deed ? 
 
 75. After the deed is drawn, what is the next thing to be 
 done? 
 
 1 6. What is meant by the acknowledgment of a deed? 
 
 77. Where should a deed be recorded ? 
 
 1 8. Whose duty is it to have the deed recorded ? 
 
 7p. What is the object in having a deed recorded? 
 
 20. Who pays the cost of having the deed recorded ? 
 
 21. What becomes of the deed itself? 
 
 22. What is meant by the delivery of a deed ? 
 
 23. If a married man sell real estate, and his wife does not 
 unite with him in executing the deed, what consequences 
 may follow? 
 
 24. What is a mortgage ? 
 
 25. What is a chattel mortgage ? 
 
 26. Who is the mortgagee ? Who is the mortgagor? 
 
 27. Is it necessary to have a mortgage recorded? 
 
 28. Is a note usually given with a mortgage? 
 
 29. If part payment is made of the amount due, is the 
 indorsement made on the note or on the mortgage ? 
 
 jo. What is an assignment of mortgage? What is meant 
 by foreclosure? 
 
 j7. Where should a real estate mortgage be recorded ? 
 
 j2. What is a discharge of mortgage ? 
 
 jj. What is meant by equity of redemption? 
 
 34.. If the amount due on a mortgage is $1,200 and the 
 property is sold for $1,800 by the mortgagee, what becomes 
 of the balance ? 
 
 jj. Name two ways of having a mortgage discharged: 
 
 j6. Where should a chattel mortgage be recorded ? 
 
DEEDS, MORTGAGES 233 
 
 GENERAL REVIEW EXERCISES 
 
 /. Give an example showing where it would be necessary 
 to make an assignment of an account. 
 
 2. You wish to draw a draft on E. D. Matthews who lives 
 in Cedar Rapids, Iowa, and who owes you $50.75. In whose 
 favor would you draw the draft? 
 
 j. What is the difference between a silent partner and a 
 nominal partner? 
 
 ^. What is meant by " Ltd." placed after a firm name, as 
 Brown, Wilson & Co., Ltd.? 
 
 5. What is the difference between a copartnership and a 
 stock company ? 
 
 6. What is the difference between a mutual insurance 
 company and an " Old Line" company? 
 
 7. What is a board of trade ? 
 
 8. What is a certificate of stock ? 
 
 p. What is the difference between common stock and pre- 
 ferred stock ? 
 
 10. What are coupon bonds ? 
 
 11. Is there any difference between a board of trade and 
 a stock exchange ? 
 
 12. When a mortgage is paid in full and the mortgage 
 and note are turned over to the mortgagee, does that dis- 
 charge the mortgage ? 
 
 ij. Name two methods used for discharging a mortgage 
 when payment has been made in full. 
 
 14. Is it necessary to have a discharge of mortgage 
 recorded ? 
 
CHAPTER XIII. 
 
 UNITED STATES LAND SURVEYING 
 
 161. Surveying Meridians. In surveying the public lands 
 of the United States, lines are established at different points, 
 some running north and south, which are called surveying 
 meridians, meridian lines, or principal meridians, and some run- 
 ning east and west, at right angles to the meridian lines, 
 which are called base lines. 
 
 These meridian and base lines are shown upon the large 
 maps of the United States, published by the General Land 
 Office, and are also severally .shown upon the various official 
 state maps. Some of the meridian lines are numbered and 
 others have local names, as the Tallahassee principal merid- 
 ian, which governs the United States land surveys in the state 
 of Florida ; or the St. Stephens principal meridian, governing 
 the land surveys in the states of Alabama and Mississippi. 
 The state of Michigan has a distinct meridian, and its base 
 line crosses the lower peninsula of the state from Lake St. 
 Clair to Lake Michigan. 
 
 162. Townships. Lines running east and west from the 
 meridian line and north and south from the base line divide 
 the land into squares containing thirty-six square miles. 
 Each square is called a township. A series of townships 
 between any two lines running north or south from the base 
 line is called a range. 
 
 [234] 
 
LAND SURVEYING 
 
 235 
 
 The illustration below shows a principal meridian line and 
 a base line. 
 
 Form CL. 
 
 Base 
 Line. 
 
 
 
 
 
 
 
 
 
 
 
 3N. 
 
 
 
 
 
 
 
 
 2 W. 
 
 
 
 
 
 
 2N. 
 
 2N. 
 
 
 
 
 2N. 
 
 
 
 4 W. 
 
 3 W. 
 
 
 I 
 
 
 
 2E. 
 
 
 
 
 1 N. 
 
 IN. 
 
 a 
 
 1 
 
 
 
 
 
 3 W. 
 
 2 W. 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 1 S. 
 
 
 
 
 
 
 
 
 3 E. 
 
 
 
 2 S. 
 
 2 S. 
 
 
 
 2 S. 
 
 
 
 
 3 W. 
 
 2W. 
 
 
 
 2E 
 
 
 
 
 
 
 
 
 
 3 S. 
 
 
 
 
 
 
 
 
 3 E. 
 
 
 
 
 
 
 
 
 
 
 The description of a township which is three north from 
 the base line and two west from the principal meridian line 
 would be : Township number three north and range two 
 west. 
 
 Each township, though said to be square, is not exactly so, 
 for since the meridians are not exactly parallel to. each other, 
 because they all meet at the poles, the townships are longer 
 on their southern boundaries than on their northern ones. 
 This is corrected as far as practicable by establishing sub- 
 ordinate meridian lines called correction lines. In Michigan, 
 a correction line is taken at every tenth township along the 
 range, and in newer states and territories they are much 
 more frequent. 
 
236 A FIRST BOOK IN BUSINESS METHODS 
 
 163. Sections. Each township is divided into thirty-six 
 squares, and each square is called a section and contains 640 
 acres, or nearly that. See diagram of township below. 
 
 Form CLI. 
 
 6 
 
 5 
 
 4 
 
 3 
 
 2 
 
 1 
 12 
 
 7 
 13 
 
 8 
 
 17 
 
 9 
 16 
 
 10 
 15 
 
 11 
 
 14 
 23 
 
 13 
 24 
 
 19 
 
 20 
 
 21 
 
 22 
 
 30 
 
 29 
 
 28 
 33 
 
 27 
 34 
 
 26 
 35 
 
 25 
 
 36 
 
 31 
 
 32 
 
 A Township 
 
 The sections in each township are numbered. Beginning 
 with number one in the northeast corner of the township, 
 they are numbered back and forth to number thirty-six (36) 
 in the southeast corner. 
 
 This system furnishes a very simple method of describing 
 a piece of land so that it may be readily located. 
 
 Sections are subdivided into half sections, quarter sections, 
 and sometimes into eighths and sixteenths. 
 
 Form CLII. 
 
 N. 1 A 
 N. W. J4. 
 S- c. 2. 
 
 w.^. 
 
 N.EM 
 
 Sec. 2. 
 80 acr's 
 
 
 80 acres. 
 
 B.W.J4 
 
 Sec. 2. 
 160 acres. 
 
 
 N.K.M 
 
 S.E.g 
 Sec. 2 
 40 acr's 
 
 
 
 Section (640 acres) with subdivisions 
 
LAND SURVEYING 
 
 237 
 
 The diagram given below shows how land in any shape 
 may be measured, so that the area can be ascertained by the 
 simple method of using triangles. 
 
 Form CLIII. 
 
 25 
 
 35 
 
 Example : Suppose the portion of land shown in the diagram 
 has a crooked creek running across it, and it is desired to find how 
 much land there is on the right-hand side of the creek. If the 
 average width of the land is multiplied by the length it will, of 
 course, give the area. Now suppose a measurement is taken from 
 the first bend in the creek to the section line and is found to 
 be 10 rods, and a measurement from the next bend in the creek 
 to the section line is found to be 20 rods ; the next measurement 
 15 rods ; the next 25 rods, and the next 35 rods. Now the sum 
 of all the measurements taken is 105 rods, and if we divide this 
 sum by the number of measurements, the result will show the 
 average width of the land. 
 
238 A FIRST BOOK IN BUSINESS METHODS 
 
 In this case five measurements were taken. 
 
 ist measurement .... 10 rods 
 
 2d " .... 20 " 
 
 3d " .... 15 " 
 
 4th .... 25 " 
 
 5th .... 35 " 
 
 Sum of the measurements, 105 rods 
 
 Dividing the sum of the measurements (105) by 5, the number 
 of measurements taken, we have 2 1 rods as the average width of 
 the land. Now, if the average width of the land is 2 1 rods and the 
 length 40 rods, the number of square rods in the piece of land 
 would be 40 times 21, which equals 840 rods, which, divided by 160 
 (the number of square rods in an acre), would show the number 
 
 of acres. 
 
 Operation: 840 divided by 160 = 5J acres. 
 
 If desired, the operation may be performed by cancellation and 
 the work be much shortened. 
 
 A.OI v 91 
 
 A ^i- = 5i acres. ' 
 
 164. Lands Not Included in the United States' Surveys. 
 
 The system of survey by which the public lands of the 
 United States and the position of any plot described could be 
 located was adopted in 1786. The original thirteen states, 
 together with Maine, Vermont, Kentucky, Tennessee, and 
 certain parts of Ohio, never were public lands of the United 
 States and are not included in the surveys. Indian reserva- 
 tions, and lands that were owned by individuals or companies 
 before the territory in which they were situated became a 
 part of the United States, are also omitted. The public lands 
 of Texas are the property of that state and have a system of 
 their own. 
 
LAND SURVEYING 239 
 
 QUESTIONS ON CHAPTER XIII. 
 
 /. Tell where two of the principal meridian lines are 
 located. 
 
 2. Which one of the principal meridian lines is nearest to 
 where you live ? 
 
 j. Is this system of land surveying used in the state in 
 which you live ? 
 
 ^. If so, where is the base line located? 
 
 5. Are the townships exactly square ? 
 
 6. What is the usual size of a township ? 
 
 7. How many sections are there usually in a township ? 
 
 8. What is a correction line ? 
 
 p. How long is one side of a section of land ? 
 
 GENERAL REVIEW EXERCISES 
 
 /. Why should you not send your check away indorsed in 
 blank? 
 
 2. If a check is indorsed to you and the indorsement is 
 placed across the back of a check at the wrong end, where 
 would you indorse it ? 
 
 j. If you hold a certificate of deposit for $100 on the 
 First National Bank, and wish to get the money from the 
 bank, how would you indorse the certificate ? 
 
 4. Would you make any different indorsement on it if you 
 wished to sell it to H. B. Osgood ? 
 
 5. You receive from C. T. Davis, for collection, a note 
 against George P. Fletcher for $500; the note is made pay- 
 able to you by indorsement. You find that you cannot collect 
 the amount of the note; how would you indorse it so as to 
 transfer it back to C. T. Davis? 
 
240 A FIRST BOOK IN BUSINESS METHODS 
 
 6. If your name is on the back of the note, would you be 
 responsible for its payment ? 
 
 7. You wish to send a quantity of merchandise worth 
 $245.60 to R. A. Hunger, Dallas, Texas, by freight, and to 
 collect payment for the goods before they are delivered. 
 Explain how this can be done. 
 
 8. You wish to send a quantity of goods by freight to H. 
 A. Jennings & Co., Toronto, Can. What papers would be 
 required ? 
 
 p. If goods are sold and before they reach the buyer it is 
 found that he is insolvent, can the goods be stopped ? 
 
 10. Can a railroad company carry a part of the freight 
 offered and refuse a part if they choose to do so? 
 
CHAPTER XIV. 
 
 WILLS, SETTLING OF ESTA TES 
 
 165. Wills. Any person who is twenty-one years of age 
 or more, and of sound mind, may, if he chooses to do so, make 
 a valid will, stating what disposition he wishes to have made 
 of his property after his death. The law varies somewhat in 
 the different states in reference to wills, but as a rule a per- 
 son may dispose of his property in any way he wishes. In a 
 few of the states a married woman is not entitled to dispose 
 of her property by will, but this restriction does hot gener- 
 ally exist. 
 
 166. Kinds of Wills. There are two kinds of wills 
 written and unwritten. Unwritten wills are called nuncupa- 
 tive wills. The latter are used only when the maker meets 
 with some accident, or by persons in the military or naval 
 service who are called upon to make a will under circum- 
 stances which will not admit of delay. Unwritten or verbal 
 wills must have reliable witnesses, and generally apply to 
 personal property only. An unwritten will is unsafe, and 
 should never be used when it is possible to make a written 
 will. 
 
 No exact form of words is necessary in making a will, but 
 the maker must state in plain language just what disposition 
 he wishes to have made of his property after his death. A 
 16 [241] 
 
242 A FIRST BOOK IN BUSINESS METHODS 
 
 will may be canceled or modified at any time before the 
 maker's death. The last will annuls the force of all preced- 
 ing wills, unless it be simply an addition to a will previously 
 made. Such an addition is called a codicil. If the person who 
 makes the will is a man, he is called the testator , but if the 
 maker is a woman, she is called the testatrix. 
 
 167. Limitation of Bequests. No husband can make a 
 will which will deprive his wife of her interest in his real 
 estate and appurtenances, which is called her right of dower. 
 If he devises to her other property in lieu of dower, she need 
 not accept it unless she chooses to do so, but she can renounce 
 the provisions of the will and take the share allowed to her 
 by law. The dower interest which the wife has in her hus- 
 band's estate is only an estate for life, and upon her death 
 the property goes to the heirs, the same as though there had 
 been no widow. In some states the right of dower has been 
 abolished. 
 
 168. Making of a Will. It is preferable to make a will 
 rather than to leave the property to be divided 'after death. 
 Litigation among the heirs is thus often prevented. A 
 person may write his own will if he chooses to do so, but 
 unless he is accustomed to drawing legal papers it is safer to 
 employ some thoroughly capable person for that purpose. 
 The person making the will should appoint some person to 
 carry out its provisions, who is called an execiitor. No person 
 can serve as an executor of a will who is under twenty-one 
 years of age at the time of the proving of the will ; nor can 
 he serve if he be a convict, or drunkard, or a lunatic. No 
 person appointed as an executor is obliged to serve against 
 his will. 
 
WILLS, SETTLING OF ESTATES 
 
 243 
 
 169. Witnesses. There must be two witnesses to a will, 
 and in some states three witnesses are required. They need 
 not know the contents of the will, but must know that the 
 instrument which they sign as witnesses is a will. Only such 
 
 1 Form CLIV. 
 
 7, of in the County of 
 
 and State of being of sound 
 
 mind and memory, hereby make, ordain, publish 
 and declare, this to be my last H^iU and STtfiittllHttlt ; 
 
 jFirfift, / order and direct that my Execut 
 
 hereinafter named pay all my just debts and 
 funeral expenses as soon after my decease as con~ 
 veniently may be. 
 
 ^CCOIttt, After the payment of such funeral ex- 
 penses and debts, I give, devise, and bequeath 
 
 Lastly, I make, constitute and appoint 
 
 to be Execut. . .of this, my last Will and Testament* 
 hereby revoking all former Wills by me made. 
 3Tn Witnt&8 33? !)ereof, / have hereunto subscribed 
 
 my name and affixed my seal, the day of 
 
 in the year of our Lord one thousand nine 
 
 hundred j T^TT \ 
 
 This instrument was, on the day of the date thereof signed, 
 
 published and declared by the said testator 
 
 to be h. . .last Will and Testament, in the presence of us who 
 at h... request have subscribed our names thereto as wit- 
 nesses, in h.. presence, and in the presence of each other. 
 
 A short form of Will 
 i 
 
 witnesses as are competent to testify should be selected 
 They should not be beneficiaries under the will, for by the 
 common law a will so witnessed was void, and although the 
 statutes of some states provide that a will so witnessed is 
 valid, the witnesses cannot receive their legacies. 
 
244 A FIRST BOOK IN BUSINESS METHODS 
 
 Witnesses should write their respective places of residence 
 after their names, and their signatures should be made in the 
 presence of each other and in the presence of the testator. If 
 the testator has children and does not provide for them nor 
 make any mention of them in his will, the law sometimes 
 presumes that they were forgotten, and will generally give 
 them the same share as though there had been no will. 
 
 In all wills the testator's name should be written in full at 
 the end of the will, after which follow the certificate and sig- 
 natures of the witnesses. 
 
 170. Duties of an Executor. The executor of a will is 
 the personal representative of the person making the will, 
 and after his death it is the duty of the executor to see that 
 the will is carried into effect. Any one who is competent to 
 make a will is legally qualified to act as an executor. The 
 executor is generally required to give a bond for the faithful 
 discharge of his duties as an executor. The bond is usually 
 about twice the amount of the personal property involved. 
 If no executor is named in the will, or if the one named does 
 not wish to act, or dies, or resigns, the court appoints a per- 
 son to act in his place, and the person so appointed is called 
 an administrator with the will annexed. 
 
 The court having jurisdiction of the estates of deceased 
 persons is called the probate court in most of the states ; in 
 some states, however, it is called the surrogate court, and in 
 others, the orphans court. 
 
 171. Administrators. If a person dies without making a 
 will and leaves any property, an administrator is appointed by 
 the judge of the probate court, or surrogate court, to settle 
 the estate of the person deceased. A petition is presented to 
 
WILLS, SETTLING OF ESTATES 245 
 
 the judge by some one who is interested in the settlement 
 of the estate, asking him to appoint an administrator. If a 
 woman is appointed she is called an administratrix. 
 
 The administrator must give a bond similar to that of an 
 executor, and his duties regarding the settlement of the estate 
 are substantially the same as those of an executor, except in 
 the division of the property after the debts are paid. In the 
 settlement of the estate the administrator should be guided 
 by the law and by the instructions given him at the probate 
 office. He is required to make an itemized statement of all 
 property belonging to the estate, and the value of the personal 
 property is determined by persons called appraisers, who are 
 appointed by the court for that purpose. The administrator 
 must account to the court for all property that comes into his 
 possession or control. 
 
 The administrator first pays the debts of the deceased. 
 These are paid out of the personal property, and if there is 
 not a sufficient amount of personal property to pay the in- 
 debtedness and there is any real estate belonging to the 
 estate, he may sell a part or the whole of it if permission is 
 given him to do so by the court. The debts of the deceased 
 must be paid in the order prescribed by law. Although the 
 law is not the same in all states, the debts are usually paid in 
 the following order : 
 
 First, the funeral expenses and expenses of the last illness. 
 Second, the widow's award or allowance. 
 Third, the debts due the state. 
 Fourth, claims of other creditors. 
 
 If anything is left after paying the debts, the remainder is 
 divided among the legal heirs of the estate, under the direc- 
 tion of the court and in the manner required by law. 
 
246 A FIRST BOOK IN BUSINESS METHODS 
 
 172. Payment of Debts. The administrator, executor, or 
 other officer appointed by the court for that purpose, publishes 
 a notice in one or more papers in the county, stating when 
 and where claims' against the estate may be presented for 
 adjustment. The administrator then settles all claims against 
 the estate as adjusted by the court, and its decision regard- 
 ing the settlement relieves him of much responsibility in the 
 matter. Six months is the time usually allowed for the settle- 
 ment of debts, but claims may be allowed at any time before 
 the final settlement of the estate. 
 
 All expenses connected with the settlement of an estate, 
 including the fees of executors, administrators, appraisers, 
 and officers of the court, are paid from the funds belonging to 
 the estate. 
 
 173. Final Settling of an Estate. When the debts are 
 all paid and the residue divided among the legal heirs as 
 instructed by the court, an account of all his proceedings is 
 made and filed by the administrator. Notice by the court is 
 then given that a final hearing of the administrator's account 
 will be had, at which any one interested may appear and 
 object to its allowance. But if the account is allowed and no 
 appeal is taken, the executor or administrator is given his 
 discharge and the estate is closed. 
 
 As there is considerable expense incurred in settling an 
 estate, parties who are interested sometimes desire to have 
 the estate settled out of court. This may be done if all 
 parties interested agree to it, and there are no disputed claims 
 against the estate, but it is better to have an estate settled in 
 the regular way and the full record of the settlement filed in 
 the probate court, so that there can never be any question as 
 to its legality. 
 
WILLS, SETTLING OF ESTATES 247 
 
 QUESTIONS ON CHAPTER XIV. 
 
 /. What is a will ? 
 
 2. Who is competent to make a will ? 
 
 j. When is an unwritten will used ? 
 
 ^. What is an unwritten will called ? 
 
 5. Is any special form necessary in making a will? 
 
 6. After a will has been made, may it be changed ? 
 
 7. Can a man make a will so that his wife shall have no 
 sjiare of his property ? 
 
 8. What is meant by the word " dower " ? 
 
 p. Can a person make his own will, or is it necessary to 
 employ a lawyer to make it for him ? 
 
 10. What is meant by the executor of a will ? 
 
 //. Can any one act as an executor of a will ? 
 
 12. Is a person who has been appointed executor of a will 
 obliged to act ? 
 
 /j. Need there be any witnesses to a will ? What persons 
 could not serve as witnesses to a will ? 
 
 14. If the testator of a will has children and makes no 
 mention of them in the will, what provision does the law 
 make for them ? 
 
 75. What court has jurisdiction of the estates of deceased 
 persons ? 
 
 16. What other names are sometimes given to this court ? 
 
 77. What is meant by the term administrator? By whom 
 is he appointed ? 
 
 1 8. What are his duties? 
 
 19. If a woman is appointed to settle the estate of a 
 deceased person, what is she called ? 
 
 20. Is an administrator required to give a bond? 
 
248 A FIRST BOOK IN BUSINESS METHODS 
 
 21. Who pays the expenses of settling the estate of a 
 deceased person ? 
 
 22. Can an estate be settled without having an adminis- 
 trator appointed ? 
 
 GENERAL REVIEW EXERCISES 
 
 /. What is meant by the maturity of commercial paper? 
 2. What is meant by legal tender ? What is the effect of 
 a legal tender on the payment of an obligation ? 
 j. What is the general purpose of drafts ? 
 
 4. Name some kinds of officers who are required to give 
 bonds. 
 
 5. What is the object in fixing the amount of a bond at 
 double the amount of the debt ? 
 
 6. Name some cases in which it is necessary to have wit- 
 nesses to a bond. 
 
 7. Why should a partnership agreement be in writing ? 
 
 8. Why should the duration of a partnership be specified 
 in the agreement ? 
 
 o. Name some things which one member of a firm cannot 
 do without the consent of the other. 
 
 10. Why should a notice of dissolution of partnership be 
 published in the newspapers ? 
 
 //. If property is insured against fire, and loss occurs 
 from putting the fire out instead of from the fire itself, can 
 the owner collect the insurance ? 
 
 12. If a house which has been insured becomes vacant, 
 why should the insurance company be notified ? 
 
 /?. Why are vacant buildings called hazardous risks? 
 
 14. Why are not insurance policies usually written for 
 the full value of the property ? 
 
WILLS, SETTLING OF ESTATES 249 
 
 75. What is the difference between a quit-claim deed and 
 a general warranty deed ? 
 
 1 6. How old must the grantor be before he can make a 
 deed which will be binding upon him ? 
 
 77. May a boy who is twelve years of age buy a piece of 
 property and get a deed for it which would be binding ? 
 
 1 8. Suppose a man who cannot write, sells a piece of land ; 
 how can the deed be signed ? 
 
 10. What is the object in having witnesses to a deed? 
 
 20. What is the seal to a deed ? 
 
 21. What is important about the delivery of a deed ? 
 
 22. What is meant by the recording of a deed ? 
 
 23. Why should a person who loans money and receives 
 as security a mortgage on a building, have the insurance on 
 the building made payable to him ? 
 
 24.. When the full amount due on a mortgage has been 
 paid, how is the mortgage discharged ? 
 
 25. If a man cannot pay the mortgage which he owes 
 when it becomes due, does he lose his title to the property ? 
 
 26. What is the difference between a chattel mortgage 
 and a real-estate mortgage ? 
 
 2j. In United States land surveying, what is meant by a 
 meridian line ? 
 
 28. What are base lines ? 
 
 29. What is a range ? 
 
 jo. How many principal meridian lines are there ? 
 j7. How large is a township ? 
 32. What is meant by range three west ? 
 jj. How large is a section of land ? 
 34. How many sections in a township ? 
 . How are sections numbered ? 
 
SSGNS, ABBREVIATIONS, AND CONTRACTIONS 
 USED IN BUSINESS 
 
 ij Check mark ; also radical sign. 
 " (It. Ditto) The same as above. 
 
 Degrees. 
 
 Primes. Minutes. Feet. 
 
 Seconds. Inches. Thus : 7 10' 4" in circular measure, or 7' 10" 4'" 
 in duodecimal long measure. Also used for ditto marks. 
 
 1 1 One and one-fourth. 
 
 1 2 One and one-half. 
 
 1 3 One and three-fourths. 
 
 + (L. Plus, more) Addition. 
 
 (L. Minus, less) Subtraction. 
 
 X (By or into) Multiplication. Also, area, as 7X9, read 7 by 9, 
 means 7 wide and 9 long. 
 
 -4- (Divided by) Division. The : alone is also a sign of division 
 as used in ratio, thus 4.: 7 ; and the alone is a sign of divi- 
 sion as used in writing fractions, thus A. 
 
 = (Equality) Equals. The double colon, :: , as used in propor- 
 tion, is also a sign of equality, thus 4:71:12:21. 
 
 % Per Cent. The upper o represents a numerator and the lower 
 the denominator 100; thus: 7$ was formerly written T -J-g-. 
 
 f> Per. (L. By or through) 
 
 $ Dollars ; said to be a contraction of U upon S for United States 
 money. 
 
 tf Means " Number " if written before a figure, as #40 ; but 
 " pounds " if written after, as 40$. 
 [250] 
 
SIGNS, ABBREVIATIONS, CONTRACTIONS 251 
 
 @ (L. ad.) To or at. 
 
 A i. First Class. 
 
 A.orAns. Answer. 
 
 Acc. t Acct., or a/c. Account. 
 
 Adv. (L. According to value) 
 
 Ad valorem. 
 Admr. Administrator. 
 Admx. Administratrix. 
 Adv. Advertisement. 
 Agt. Agent. 
 Amt. Amount. 
 a/s. At sight or Account sales. 
 Ass'd. Assorted. 
 Asst. Assistant. 
 Bal. Balance. 
 B. B. Bill Book. 
 Bbl. Barrel; Barrels. 
 Bdls. Bundles. 
 B/E. Bill of Exchange. 
 Bgs. Bags. 
 Bk. Bank ; Book. 
 Bkts. Baskets. 
 B/L. Bill of Lading. 
 Elk. Black. 
 Bis. Bales. 
 Bot. Bought. 
 B. P. Bills Payable. 
 
 B. Rec. Bills Receivable. 
 Bro't. Brought. 
 
 Bu. Bushel. 
 
 Bx. Box or Boxes. 
 
 Cash. Cashier. 
 
 C. B. Cash Book. 
 Chgs. Charges. 
 
 Chts. Chests. 
 
 C. H. Court House ; Custom 
 House. 
 
 C. I. F. Costs, Insurance, 
 Freight. 
 
 Cks. Casks or Checks. 
 
 Clk. Clerk. 
 
 Co. Company ; County. 
 
 C. O. D. Cash (or Collect) on 
 Delivery. 
 
 Col. Collection. 
 
 Com. Commission. 
 
 Const. Consignment. 
 
 Cor. Sec. Corresponding Secre- 
 tary. 
 
 Cr. Credit; Creditor. 
 
 C. S. B. Commission Sales 
 Book. 
 
 Ct. or $. Cent. (L. Centum, a 
 
 hundred.) 
 Cts. Cents. 
 Cw t. A hundred weight. 
 
 D. B. Day Book. 
 d/d. Days after date. 
 
 Dept. Department ; Deponent. 
 Dft. Draft; Defendant. 
 Disct. Discount. 
 Div. Dividend ; Division ; IX- 
 
 vide ; Divisor. 
 Do. (It. Ditto) The same. 
 Doz. Dozen. 
 Dr. Debtor; Doctor. 
 Dray. Drayage. 
 d/ s or d. s. Days after sight. 
 
252 A FIRST BOOK IN BUSINESS METHODS 
 
 ea. Each. 
 
 E. E. Errors excepted ; Ells 
 
 English. 
 e.g. (L. Exempli gratia) For 
 
 example. 
 End. Enclosed. 
 
 E. & O. E. Errors and omis- 
 sions excepted. 
 
 et al. (L. et alii) And others. 
 Exch. Exchequer ; Exchange. 
 Exec, or Exr. Executor. 
 Execx. or Ex'x. Executrix. 
 Exp. Export ; Exporter ; Ex- 
 pense. 
 
 Fahr. Fahrenheit. 
 Fav. Favor. 
 Fir. Firkin. 
 Fo. or Fol. Folio. 
 
 F. O. B. Free on Board. 
 Fo'd. Forward. 
 
 fr. From. 
 Fr't. Freight. 
 Gal. Gallon ; Gallons. 
 Gr. Grain ; Grains. 
 Guar. Guarantee. 
 Hdkf. Handkerchief. 
 Hf. chts. Half chests. 
 Hkd. Hogshead. 
 Hon. Honorable. 
 Hund. Hundred. 
 /. B. Invoice Book. 
 i.e. (L. idest) That is. 
 Incor. Incorporated. 
 Ins. Insurance. 
 
 inst. Instant in the present 
 
 month. 
 
 Int. Interest. 
 In trans. (L. In transitii) In 
 
 the passage. 
 Inv. Invoice. 
 Inv't. Inventory. 
 Jr. Junior. 
 Kg. Keg. 
 L. or Ib. (L. Libra) A pound in 
 
 weight. 
 
 L/C. Letter of credit. 
 Led. Ledger. 
 L. F. Ledger Folio. 
 L. S. Left Side ; (L. Locus Sig- 
 
 illi) Place of the Seal. 
 M. One thousand. 
 Manuf. Manufacture ; Manu- 
 facturer. 
 
 Mdse. Merchandise. 
 Mem. Memorandum. 
 Messrs, or MM. (F. Messieurs) 
 
 Gentlemen, Sirs. 
 Mf'd. Manufactured. 
 Mfst. Manifest. 
 Mme. Madame. Mmes. Mes- 
 
 dames. 
 Mo. Month. 
 Mol. Molasses. 
 Mr. Master or Mister. 
 Mrs. Mistress. 
 Mtg. Mortgage. 
 N. A. North America. 
 Nav. Navigation. 
 
SIGNS, ABBREVIATIONS, CONTRACTIONS 253 
 
 N. B. (L. Nota Bene) Note 
 Well or Take Notice. 
 
 No. or ft. Number. 
 
 N. P. Notary Public. 
 
 O. B. Order Book. 
 
 O. K. All Correct. 
 
 oz. Ounce or ounces. 
 
 /. Page ; pint ; pole ; part. 
 
 Payt. Payment. 
 
 pcs. Pieces. 
 
 Pd. Paid. 
 
 Per. an. or/, a. (L. per annum) 
 By the year. 
 
 f , per cent., per ct. (L. per cen- 
 tum) By the hundred. 
 
 Pk. Peck. 
 
 Pkg. Package. 
 
 P. & L. Profit and Loss. 
 
 P. O. D. Pay on Delivery. 
 
 P. O. O. Post-office Order. 
 
 pp. Pages. 
 
 Pr. or per. By. 
 
 Prem. Premium. 
 
 Prop'r. Proprietor. 
 
 Prox. (L. Proximo mense) Next 
 month. 
 
 P. S. Postscript. 
 
 Pub. Publisher; Public. 
 
 Pwt. Pennyweight. 
 
 Qr. Quarter (28 pounds) ; Quire. 
 
 Qf. Quart; Quantity. 
 
 Reed. Received. 
 
 Retd. Returned. 
 
 R. R. Railroad. 
 
 Ry. Railway. 
 
 5. B. Sales Book. 
 
 Schr. Schoonef. 
 
 Shipt. Shipment. 
 
 S. O. Seller's Option. 
 
 Sig. Signature. 
 
 S. 5. Steamship. 
 
 St. Saint; Street; Sight. 
 
 St. Dft. Sight Draft. 
 
 Stor. Storage. 
 
 Sir. Steamer. 
 
 Sunds. Sundries. 
 
 Supt. Superintendent. 
 
 T. B. Time Book. 
 
 Treas. Treasurer. 
 
 Ult. or ulto. (L. Ultimo mense) 
 Last, or of the last month. 
 
 U.S.A. United States of Amer- 
 ica ; United States Army. 
 
 U. S. M. United States Mail. 
 
 U. S. N. United States Navy. 
 
 Ves. Vessel. 
 
 via. (L.) By way of. 
 
 Vice. Pres. Vice-President. 
 
 viz. (Contraction from L. vide- 
 licet) Namely ; to wit. 
 
 Vol. Volume. 
 
 vs. (L. versus) Against. 
 
 W. B. Waybill. 
 
 Wt. Weight. 
 
 X. Extra. 
 
 XX. Doubly Extra. 
 
 Y. or Yr. Year. 
 
 Yd. Yard. 
 
COMMERCIAL WORDS AND PHRASES 
 
 Account Current. A running account. A detailed statement of 
 the transactions between two persons or firms. 
 
 Account Sales. A detailed statement of the sales of goods by a 
 commission merchant, showing also the expenses, after 
 charges, and net proceeds. 
 
 Administrator. A man appointed by the court to settle the estate 
 of a person deceased. 
 
 Administratrix. A woman appointed by the court to settle the 
 estate of a person deceased. 
 
 Ad valorem. (L.) According to value. A custom-house term, 
 relating to the estimating of duties upon the value of im- 
 ported goods. 
 
 Affidavit. A written declaration under oath. 
 
 Annuity. A sum to be paid yearly, to continue for a given num- 
 ber of years or for life ; an annual allowance. 
 
 Annul. To make void ; to cancel. 
 
 Ante-date. To date before the actual time of writing. 
 
 Appraisal. The act of placing a value on goods. 
 
 Appraiser. A person appointed to value real or personal property. 
 
 Arbitration. The adjustment of a disputed point by a person or 
 persons chosen by the parties in dispute. 
 
 Assets. The funds, property, and total resources of a person in 
 business. 
 
 Assignee. A person to whom the property of a bankrupt or an 
 insolvent debtor is transferred for adjustment, for the bene- 
 fit of the insolvent's creditors. 
 
 [254! 
 
COMMERCIAL WORDS AND PHRASES 255 
 
 Assignment. The act of transferring property to the assignee. 
 
 Attachment. A warrant for the purpose of seizing a man's prop- 
 erty. 
 
 Balance Sheet. A statement in condensed form showing the con- 
 dition and progress of the business. 
 
 Bankable. Receivable at a bank at par value. 
 
 Bank Balance. Net amount on deposit at bank. 
 
 Bear. Among stock brokers, one who having " sold short" that 
 is, sold what he has not yet bought desires the price of 
 the stock to fall so that he may buy at a lower rate than he 
 has sold at, and thus make a profit. He will do all he can 
 to "bear down " the price. 
 
 Bill of Lading. A written account of goods shipped and the con- 
 dition of shipment, having the signature of the carrier's 
 Agent, and given to the shipper as a receipt. 
 
 Bill of Sale. A writing given by the seller to the buyer, trans- 
 ferring the ownership of personal property. 
 
 Board of Trade. An association of business men for the regula- 
 tion and advancement of commercial interests. 
 
 Bona Fide. (L.) In good faith. 
 
 Bond. An instrument under seal by which a person binds him- 
 self, his heirs and assigns to certain stipulations. 
 
 Bonded Goods. Goods which are stored in a bonded warehouse 
 (see below) or in bonded cars, the owner having given 
 bonds securing the payment of import duties or of internal 
 revenues upon their removal or their arrival at some inland 
 city of entry, and before a specified time. 
 
 Bonded Warehouse. A building or warehouse in which goods 
 subject to revenue duties are stored until the importei 
 either pays the duties or re-exports the goods, or, where 
 goods subject to an internal revenue tax are held, until the 
 tax is paid. 
 
 Bondsman. One who gives security for the faithful performance 
 of a contract. 
 
256 A FIRST BOOK IN BUSINESS METHODS 
 
 Bonus. A premium for a loan or for other privileges. 
 
 Broker. An agent or middle-man between the buyer and seller. 
 
 Bull. One who operates to increase the values of stocks in the 
 market that he may sell his own at a better advantage. He 
 labors to "toss up " the price. 
 
 Bullion. Uncoined gold or silver. 
 
 Charter. A paper from government defining the rights and privi- 
 leges of corporations ; to hire or let an instrument of trans- 
 portation, as a ship, a railway car. 
 
 Charter Party. A written contract for hiring or chartering a ship. 
 
 Chattel. Any kind of property except real estate, as merchandise, 
 notes and accounts, animals, leases of real estate, etc. 
 
 Check. An order on a bank drawn by^a depositor. 
 
 Clearing House. A kind of banking exchange established in some 
 of the large cities for the convenience of daily settlements. 
 The drafts and checks of the various banks on each other are 
 mutually exchanged without individual presentation at the 
 banks, and a balance struck; the balance only is paid in cash. 
 
 Collateral. Pledges ui: stocks, notes, or chattels for security of 
 loans and other indebtedness. 
 
 Commerce. The business of exchanging commodities between 
 different places ; mercantile business in general, as carried 
 on between individuals or companies of different countries, 
 or of the same country ; and, in a restricted sense, the ship- 
 ping which belongs to a country. 
 
 Commission Agent. One who does business on commission. 
 
 Common Law. The unwritten law which receives its binding 
 force from immemorial usage, in distinction from the writ- 
 ten or statute law. 
 
 Consignee. The agent or person to whom goods are sent to be 
 sold on commission. The goods are said to be consigned, 
 and are called by the one who receives them a consignment 
 The person to whom merchandise is addressed by a bill of 
 lading or otherwise. 
 
COMMERCIAL WORDS AND PHRASES 257 
 
 Consignor. The party who consigns his goods to an agent. A 
 shipper of merchandise. 
 
 Contra. (L.) On the opposite side. 
 
 Copartnership. The. joining of two or more persons into one firm 
 for the purpose of carrying on any enterprise. It has the 
 same meaning as partnership. 
 
 Coupon. An interest note or a certificate attached to a bond or 
 principal note which is cut off and collected when the note 
 or certificate is due. 
 
 Credentials. Testimonials giving authority. 
 
 Demurrage. Money forfeited for detaining a vessel beyond the 
 time specified in her charter party. 
 
 Dishonor. A failure to pay an obligation when due. A failure to 
 accept a draft when presented for acceptance. 
 
 Dockage. Charge for the use of a dock. 
 
 Dower. The right of a widow to a one-third interest in all the real 
 estate owned by her husband at any time after their mar- 
 riage. 
 
 Draft. A written order or request for the payment of money at a 
 certain time. 
 
 Drawee. One on whom the draft is drawn. The payer. 
 
 Drawer. The person who draws the draft, and thus asks the 
 drawee to pay to the payee named. 
 
 Duress. Personal restraint from fear of personal injury or im- 
 prisonment. 
 
 Earnest. Part of purchase money paid or part of goods delivered 
 to bind a verbal contract. 
 
 Effects. Goods or property of any kind, including debts due. 
 Resources. 
 
 Embargo. An order of the government prohibiting ships from 
 departing or landing. 
 
 Equity. The principles of right and justice, especially as applied 
 to the correction of statute law in extreme cases. 
 
 Equity of Redemption. The right allowed a mortgagor of a rea- 
 sonable time to redeem lands mortgaged. 
 
 B 
 
258 A FIRST BOOK IN BUSINESS METHODS 
 
 Execution. A writ which authorizes an officer to carry into effect 
 the judgment of the court. 
 
 Fee Simple. A title to real estate held by a person in his own 
 right and without conditions. 
 
 Forced Sale. Sale made under compulsion. 
 
 Forwarder. An agent who attends to the conveyance of goods, 
 especially re-shipping. 
 
 Gross Weight. Weight of merchandise, including the case or 
 wrapping. 
 
 Guarantee or Guaranty. A surety for the performance of a con- 
 tract in case the party making the contract fails to keep it. 
 A security against loss. 
 
 Honor. To accept a draft or to pay it when due. 
 
 Impost. Duty on goods paid by the importer. 
 
 Indemnify. To recompense for injury or loss. 
 
 Indemnity. A guarantee against loss. Insurance. 
 
 Indenture. A writing containing a contract. 
 
 Indorse. To write one's name on the back of a note, draft, or 
 other document. 
 
 Injunction. A legal writ by which a party is restrained from doing 
 a certain act. 
 
 Inland Bill. A draft between parties in the same country. 
 
 Insolvency. Inability to pay debts. Bankruptcy 
 
 Intestate. Dying without having made a will. 
 
 In transitu. (L.) In a state of going from one place to another. 
 
 Inventory. An itemized schedule or list of goods and other prop- 
 erty, with their value as then estimated. 
 
 Invoice Book. A book in which invoices are copied or placed. 
 
 Jettison (also Jetson). The goods voluntarily thrown overboard 
 to lighten a ship in cases of extreme peril. 
 
 Jobber. One who buys goods from the manufacturers and import- 
 ers and sells them to retailers. 
 
 fob Lot. An irregular assortment. Miscellaneous goods unsold 
 at the end of the season. 
 
COMMERCIAL WORDS AND PHRASES 259 
 
 Judgment. The decision of a court. 
 
 Lease. A contract granting possession and use of property for a 
 specified time. 
 
 Legacy. A bequest ; a gift of property by will. 
 
 Lessee. One to whom a lease is made. 
 
 Letter of Credit. An open letter authorizing the bearer to receive 
 money on the credit of the writer. (Generally issued by 
 banking houses to travelers in foreign countries.) 
 
 License. A legal permit to carry on a certain business. 
 
 Lien. (Fr. bond) A legal claim on property, and power to pre- 
 vent sale of the property without satisfying the claim. 
 
 Lighter. A flat-bottomed boat used in loading and unloading 
 vessels that cannot sail up to the wharf. 
 
 Lighterage. Charges for the use of a lighter. 
 
 Manifest. A list of articles comprising a ship's cargo. 
 
 Margin. Variance between an article's buying and selling price. 
 
 Marine. Pertaining to the sea. 
 
 Maturity. The date when commercial paper becomes due. 
 
 Mercantile Agency. A company whose business it is to obtain 
 and circulate among its patrons information as to the busi- 
 ness standing of merchants and traders. 
 
 Mercantile Law. Law pertaining to business transactions. 
 
 Mortgagee. The person in whose favor a mortgage is given. 
 
 Mortgagor. The person who gives a mortgage. 
 
 Negotiable. That which is transferable by delivery, assignment, 
 or indorsement. 
 
 Net. Clear of all charges and deductions. 
 
 Net Proceeds. The remainder after deducting charges from sales. 
 
 Net Weight. Weight after deducting all allowances. 
 
 Nominal. Existing in name only. 
 
 Notary or Notary Public. An officer authorized by law to admin- 
 ister oaths, take acknowledgments of deeds and other 
 papers, and to protest notes and drafts for non-acceptance 
 or non-payment. 
 
26o A FIRST BOOK IN BUSINESS METHODS 
 
 Open Account. An unsettled account with a firm or individual. 
 
 Outlawed. A term applied to a debt which has run beyond the 
 time when the law will enforce payment. 
 
 Par Value. The nominal value ; usually the printed or written 
 value of any commercial paper. 
 
 Parol. Not written ; especially not written and sealed. 
 
 Pawn-Broker (also written pawnbroker}. One who lends money 
 on goods, possessing the goods and the power to dispose of 
 them if the money is not returned according to contract. 
 
 Payee. A person to whom money is to be paid. 
 
 Payer. A person who pays or promises to pay. 
 
 Plant. The entire outfit necessary to carry on a trade or mechan- 
 ical business. It includes the real estate as well as the tools 
 and machinery. 
 
 Post-date. (After date.) To date after the real time of writing. 
 
 Power of Attorney. A written instrument giving an agent author- 
 ity to act for his principal in matters requiring such written 
 delegation of power. 
 
 Price Current. A list of merchandise with market values annexed. 
 
 Primage. A percentage allowed to the master of a vessel on the 
 amount of freight earned. 
 
 Prima Facie. On the first view. 
 
 Pro Rat a. (L. In proportion} A proportional distribution. 
 
 Protecting a Draft. Accepting or paying a draft to prevent its 
 being dishonored or protested. 
 
 Protest. A formal declaration made by a notary public, that a 
 note was not paid at maturity, or that a bill of exchange was 
 not accepted when presented, or was not paid when due. 
 (2) An official statement by the master of a vessel that 
 damage to ship or cargo was caused by stress of weather 
 and not by negligence. 
 
 Receiver. A person appointed to take charge of a corporation on 
 its dissolution, and to distribute its property according to 
 law. 
 
COMMERCIAL WORDS AND PHRASES 261 
 
 Rescind. To revoke ; to annul ; to countermand. 
 
 Resources. Money, property, or that which can be converted into 
 
 property, as claims against other people either on written or 
 
 verbal promises. 
 Revocation. The recall of authority conferred on another, as the 
 
 revocation of agency. 
 Salvage. The allowance made by law to persons who voluntarily 
 
 assist in saving a ship or her cargo from peril. 
 Shipping Clerk. A person who attends to the shipping of goods. 
 Silent Partner. One who shares in the profits of a business, but 
 
 whose name does not appear in the firm name, and who 
 
 takes no active part in the business. 
 Sinking Fund. A sum of money set apart for the redemption of 
 
 debts. 
 Stock. Capital invested in trade. Goods on hand. 
 
 Capital Stock. The capital of a corporation as represented by 
 
 the shares. 
 Common Stock. That stock which entitles the owner to an equal 
 
 proportionate dividend of the corporate profits and assets 
 
 with one shareholder or class of shareholders, having no 
 
 advantage, priority, or preference over another. 
 Preferred Stock. That stock which entitles the owner to divi- 
 dends out of the net profits before or in preference to the 
 
 holder of the common stock. 
 Watered Stock. Stock which purports to represent, but does not 
 
 represent in good faith, money paid into the treasury of the 
 
 corporation or money's worth actually contributed. 
 Stock Exchange. A place where brokers and bankers meet to buy 
 
 and sell stocks, bonds, etc. - 
 Stockholder. One who owns shares in a joint stock company or 
 
 corporation. 
 Stoppage in transitu. The right which the seller has to stop the 
 
 goods he has shipped any time before they reach the buyer, 
 
 if he discovers that the buyer is insolvent. 
 
262 A FIRST BOOK IN BUSINESS METHODS 
 
 Syndicate. A number of capitalists who unite to conduct some 
 
 great commercial enterprise. 
 Tare. (Fr.) An allowance for the weight of boxes, barrels, etc., 
 
 in which goods are shipped. 
 
 Tenant. One who holds or occupies property under a lease. 
 Tender. An offer ; a proposal for acceptance. 
 Tickler. A book containing a memorandum of notes and debts 
 
 arranged in the order of their maturity. 
 Time Draft. A draft maturing at a future specified time. 
 Trade Discount. A discount or series of discounts from list prices 
 
 made to dealers, or because of a change in prices. 
 Trustee. One to whom any business or property is committed as 
 
 a trust. 
 Underwriter. One who insures ; so called from writing his name 
 
 under the conditions of the policy. 
 
 Usury. The taking of more than the legal rate of interest. 
 Voucher. Such papers or documents as prove the truth of ac- 
 counts thus, a receipt is a voucher for the payment of 
 
 money. 
 
 Waybill. A document containing a list of goods sent by railroad. 
 Wharfage. Money paid for the use of a wharf. 
 Wharfinger. The owner or keeper of a wharf. 
 Wholesale. (To sell whole.) To sell goods in large quantities, 
 
 usually in unbroken packages. 
 Writ. An order issued from a court of law to one of its officers, 
 
 as in the case of a writ of attachment ; or to one or more 
 
 litigants, as in the case of an injunction writ. 
 
THE INDEX 
 
 A BBREVIATIONS, in letters, 13, 15, 16 ; 
 used in business, list of, 250-253. 
 Abstracts of Title, 213-216. 
 
 Accommodation Notes, 89-90. 
 
 Account, statements of, see Statements. 
 
 Acknowledgment of Signature, 219. 
 
 Adams Express Company Collection En- 
 velope, 153. 
 
 Address, in the heading of a letter, 13 ; in- 
 side the letter, 12, 14 ; upon the envelope, 
 18-20 ; forms for envelope, 19 ; for envel- 
 ope of letter of introduction, 20. 
 
 Administrator, 244-245. 
 
 Administratrix, 245. 
 
 Agencies, see Commercial. 
 
 Appraisers, 245. 
 
 Articles of Agreement, 165. 
 
 Assignment of Mortgage, 229; form, 230. 
 
 Attorney, power of, 134; revocation of, 135. 
 
 BANK Book, 58. 
 Bank Discount, 83. 
 Bank Drafts, 110-112. 
 Banking, 53-76. 
 Banks, uses of, 53 , savings, 54 ; commercial 
 
 deposit, 55-56; correspondent, 112. 
 Base Lines, in surveying, 234. 
 Bears and Bulls, 188. 
 
 Bills, 34-35 ; forms for, 34, 35 ; assignment 
 of, 35 ; form showing discount, 44. See 
 also Invoices. 
 
 Bills of Exchange, see Exchange. 
 Bills of Lading, 147-149; with draft at- 
 tached, 155-158. 
 
 Bills of Sale, 172-173; forms, 173. 
 
 Boards of Trade, 186-187; sales and values. 
 187-188; brokers bulls and bears, 188-189; 
 range of prices, 188; inspection and grad- 
 ing, 189. 
 
 Bondholders, 191. 
 
 Bond of Indemnity, 91. 
 
 Bonds, 173-178; forms, 174, 175, 177; for fidel- 
 ity of clerk, 174-175; for faithful service, 
 177-178; sureties, 176; surety companies, 
 178; and stocks 191; government, 192; 
 prices of, 194. 
 
 Bonds, stocks and, 191-192. 
 
 Bradstreet's Commercial Agency, 135. 
 
 Brokers, 188. 
 
 Brush-marking, directions for, 141-142; 
 form, 142. 
 
 Bucket Shops, 190. 
 
 Bulls and Bears, 188-189. 
 
 Business Letters, 11-12; form for, 12; suit- 
 able paper for, 12; parts of, 13; body of, 
 16; directions for, 16; models for, 18, 28-29; 
 folding, 18. 
 
 CABLE Messages, 30. 
 Capital Stock, 190. 
 Carriers, common, 185. 
 Cash Discount, 42-44. 
 Cash Grain, 187. 
 
 Certificate of Deposit, 70-71; form, 70. 
 Certificates of Stock, 190. 
 Chamber of Commerce, 186. 
 Change, how to make, 140. 
 Chattel Mortgage, 226; note, 226. 
 
264 A FIRST BOOK IN BUSINESS METHODS 
 
 Check Book, 58. 
 
 Checks, forms, 58, 59, 60, 61, 62, 63, 64, 67, 68, 
 69 , directions for writing, 59-64, 71-72 ; 
 indorsement of, 64-65 ; payable to bearer 
 or order, 65-66 ; post-dated, 66 ; exchange 
 on, 67-68; certified, 68-70; travelers', 127- 
 128; voucher, 70. 
 
 Codes, telegraphic, 32. 
 
 Codicil of a Will, 242. 
 
 Coin or Bullion by Express, 193. 
 
 Collateral Notes, 98-99. 
 
 Collection, indorsement for, 109. 
 
 Collection by Express Companies, 153-155- 
 
 Collection Envelopes, forms, 153, 154. 
 
 Commerce, Chamber of, 186. 
 
 Commercial Agencies, 135-139; reference 
 books, 137-139 ; forms of reference books, 
 
 137. 138, 139- 
 Commercial Words and Phrases, list of, 
 
 254-262. 
 
 Common Carriers, 185. 
 Common Stock, 191. 
 Complimentary Clcse of a Letter, position 
 
 of, 12, 17 ; forms of, 17. 
 Compound Interest, see Interest. 
 Consignee, 149. 
 Consignor, 147. 
 Contractions used in Business, list of, 250- 
 
 253- 
 Contracts, 162-165; valid consideration 
 
 necessary, 163 ; written, 163-164 ; verbal, 
 
 164 ; articles of agreement, 165 ; form, 
 
 165. 
 
 Copartnership, articles of, 198-199. 
 Correction Lines, in surveying, 235. 
 Correspondent Banks, 112. 
 Courts, equity, 200 ; probate, 244 ; surrogate, 
 
 244 ; orphans', 244. 
 
 Credit, letters of, 124-127 ; forms, 125, 126. 
 Credit Memorandum, 46-47 ; form, 46. 
 Credits, on statements of account, 39, 40, 41, 
 
 42> 43- 
 
 DATE of Maturity, of note, 84-85. 
 Dates of Reckoning Interest, 54-55. 
 Days of Grace, 82. 
 Debits, on statements of account, 39, 40, 41, 
 
 4 2 > 43- 
 
 Deeds, 213-222 ; warranty, 214-215 ; parties 
 to, 216-217 ; general warranty, 217 ; quit- 
 claim, 217 ; form, 218 ; special warranty, 
 219 ; signing, sealing, and delivery, 219- 
 220; in escrow, 220; recording of, 220-221; 
 trust, 221-222 ; registrar of, 221. 
 
 Defeasance, 226. 
 
 Delivery of Deed, importance of, 220. 
 
 Deposit, certificate of, 70-71 ; form, 70. 
 
 Deposit Book, 55. 
 
 Deposits, in savings banks, 54, 55 ; records 
 of, 56-57; in metropolitan banks, no. 
 
 Deposit Slip or Ticket, 56-57 ; form, 57. 
 
 Directions, for letter writing, 16 ; for use of 
 titles, 22-23; for writing checks, 59-64, 
 71-72 ; for pen lettering, 141-142. 
 
 Discount, trade, 38-42 ; cash, 42-44 ; bank, 83. 
 
 Dishonoring a Draft, 109-110. 
 
 Dissolution of Partnership, 200-201 ; notice 
 
 Of, 201. 
 
 Dividends, 191. 
 
 Dower, right of, 217, 242. 
 
 Drafts, 106-115 ; uses of, 106-108 ; forms, 107, 
 108, in, 112, 128, 156, 157 ; indorsement of 
 "for collection," 109 ; dishonoring, 109-110 ; 
 protest of, no; bank, 110-112; uses of 
 bank, 112 ; foreign, 128 ; attached to bill 
 of lading, 155-158. 
 
 Drawee, of a draft, 106. 
 
 Drawer, of a check, 59 ; of a draft, 106. 
 
 Due Bills, form, 51. 
 
 Dun & Company's Commercial Agency, 135. 
 
 EQUITY, court of, 200. 
 Equity of Redemption, 229-231. 
 Escrow, deed in, 220. 
 
 Estates, settling of, 244-246. 
 
 Exchange, on checks, 67-68 ; payable at par, 
 67 ; foreign bill of, 127, 129 ; inland bill 
 of, 129. 
 
 Exchanges, stock, 186, 19*; produce, 186. 
 
 Executor, 242 ; duties of, 244. 
 
 Expense or Freight Bills, railroad, 149-150. 
 
 Express, coin or bullion sent by, 123. 
 
 Express Business, 152-155 ; collections by 
 express companies, 153; express collec- 
 tion envelopes, 153, 154. 
 
 Express Money Orders, 122 ; form, 122. 
 
THE INDEX 
 
 265 
 
 FOREIGN Bills of Exchange, see Ex- 
 change. 
 
 Foreign Drafts, see Drafts. 
 Forms, I., outline for a letter, iz ; II.-IV., 
 headings of letters, 14; V.-VIIL, forms 
 of salutation, 15; IX., model letter, 18; 
 X., forms of address on the envelope, 19; 
 XL, addressed envelope of introduction, 
 20 ; XII.-XIIL, letters of introduction, ax; 
 XIV., letter of recommendation, 22 ; XV. 
 -XVIIL, friendly and business letters, 
 27-29; XIX., a telegram, 31; XX., night 
 lettergram, 31; XXI., illustration of tele- 
 graphic code, 32 ; XXII. , bill of goods, 34; 
 XXIII., bill, 35; XXIV., assignment of 
 account, 35 ; XXV., invoice, 37 ; XXVI.- 
 XX VII., invoices with terms of discount, 
 37, 38; XXVIII. -XXXII., statements 
 showing debits and credits, 39-43; 
 XXXIII., bill showing discount, 44 ; 
 XXXIV., statement of account paid, 45 ; 
 XXXV., credit memorandum, 46; 
 XXXVI.-XLVL, receipts, 47-50; XLVIL, 
 ordinary order, 50 ; XLVIII., order pay- 
 able in cash, 50; XLIX., due bill, 51; L., 
 bank deposit slip, 57; LI., check with 
 coupon, 58 ; LIL, checks payable to cash, 
 59 ; LIIL, checks for less than one dollar, 
 60 ; LIV., check specifying for what used, 
 6 1 ; LV., checks incorrectly drawn, 62 ; 
 LVL, checks correctly drawn, 63 ; LVIL, 
 indorsed check, 64 ; LVIII., check similar 
 to draft, 67 ; LIX., check payable to order 
 of signer, 68 ; LX., certified check, 69 ; 
 LXL, certificate of deposit, 70; LXIL, 
 indorsed check, 72 ; LXIII., promissory 
 note, 78 ; LXIV., partial payment of note 
 indorsed on back, 79; LXV.-LXVIIL, 
 kinds of indorsements, 81 ; LXIX., de- 
 mand note, 82 ; LXX., so-day note pay- 
 able to bank, 84 ; LXXL, bank notice for 
 note due, 86; LXXIL, certificate of pro- 
 test, 87 ; LXXIII.-LXXIV., notices of dis- 
 honor, 88 ; LXXV., bond of indemnity, 
 90; LXX VI., note with date of payment, 
 92 ; LXX VII., indorsement of partial pay- 
 ment on note, 92 ; LXX VIII., simple paid 
 indorsement on note, 93 ; LXXIX., judg- 
 ment note, 96; LXXX., promissory note, 
 
 Forms continued. 
 
 97; LXXXL, joint note, 98; LXXXIL, 
 joint and several note, 98; LXXXIIL, 
 collateral note, 99; LXXXIV., note pay- 
 able by installments TOO; LXXXV., note 
 payable on or before certain date, 100; 
 LXXXVL, produce note, 100; LXXXVIL, 
 drafts payable at sight, 107; LXXXVIIL, 
 accepted draft, 108; LXXXIX., bank 
 drafts, in ; XC., request for a draft, 112 ; 
 XCL, application for money order, 119; 
 XCIL, fees for money orders, 120 ; XCIII., 
 postal money order, 121 ; XCIV., Ameri- 
 can Express Company money order, 122 ; 
 XCV., letter of credit, 125 ; XCVL, letter 
 of credit sent by mail, 126; XCVIL, a 
 travelers' check, 127; XCVIII., original 
 and duplicate foreign drafts, 128; XCIX., 
 petition for opening street, 132; C., peti- 
 tion to school board, 133; CL, petition to 
 governor, 133; CIL, heading for sub- 
 scription paper, 133; CIIL, proxy, 134; 
 CIV., power of attorney, 134 ; CV., revo- 
 cation of power of attorney, 135 ; CVL, 
 inside cover of commercial agency ref- 
 erence book, 136 ; CVIL, key to reference 
 book of commercial agency, 137 ; CVIII., 
 page of commercial agency state ref- 
 erence book, 138 ; CIX., notification sheet 
 of commercial agency, 139 ; CX., alphabet 
 for brush-marking, 142 ; CXI., shipping 
 order, 147; CXIL, shipping receipt or bill 
 of lading, 148; CXIII., railroad memoran- 
 dum, 149; CXIV., railroad expense bill or 
 freight bill, 150; CXV., railroad manifest, 
 151 ; CXVL, Adams Express collection 
 envelope, 153; CXVIL, United States 
 Express C. O. D. envelope, 154 ; CXVIIL, 
 bill of lading to which draft is attached, 
 156 ; CXIX., draft to be attached to bill 
 of lading, 157; CXX., shipping invoice, 
 158; CXXL, contract to perform work, 
 165; CXXII.-CXXIIL, lease (front and 
 back), 166-167; CXXIV.-CXXV., notice 
 to quit (front and back), 168-169 ; CXXVL- 
 CXXVIIL, guaranties, 172 ; CXXIX., bill 
 of sale, 173; CXXX., short form bill of 
 sale, 173; CXXXI.-CXXXIL, bond for 
 fidelity of clerk (front and back), 174-175 ; 
 
266 A FIRST BOOK IN BUSINESS METHODS 
 
 Forms ^-continued, 
 
 CXXXIIL, bond, 177; CXXXIV., prices 
 on Chicago Board of Trade, 188; CXXXV., 
 prices on New York stock exchange, 
 193; CXXXVI., prices of bonds, 194; 
 CXXX VII. -CXXX VIII., articles of co- 
 partnership, 198-199; CXXXIX., notice of 
 dissolution, 201 ; CXL.-CXLL, warranty 
 deed, 214-215; CXLIL, quit-claim deed, 
 218; CXLIIL, signature of person who 
 cannot write, 219; CXLIV., trust deed, 
 222; CXLV., note secured by mortgage, 
 223 ; CXLVI. (a) and (b), mortgage, 224- 
 225; CXLVIL, chattel mortgage note, 
 226; CXLVIIL, satisfaction of mortgage, 
 228; CXLIX., assignment of mortgage, 
 230; CL., meridian and base lines, 235; 
 CLI., township, 236; CLIL, section, 236; 
 CLIIL, measurement of irregular tracts 
 of land, 237; CLI V., short form of will, 
 243- 
 
 Frauds, statute of, 182. 
 
 Freight or Expense Bills, railroad, 149- 
 150. 
 
 Futures, 187. 
 
 GENERAL Warranty Deed, 217. 
 Government Bonds, 192. 
 Grace, days of, 82. 
 Grain, cash, 187. 
 Grantee, 216. 
 Grantor, 216. 
 Guarantee Policy, 216. 
 Guaranties, 171-172 ; forms, 172. 
 
 HEADING, of a letter, 12, 13; punctu- 
 ation of, 13 ; forms, 14. 
 How to Make Change, 140. 
 
 TNDEMNITY, bond of, 91, 122. 
 
 Indorsement, of checks, 64-65 ; of notes, 
 79-80, 93; forms, 81 ; of drafts "for col- 
 lection," 109 ; of money order, 121. 
 Inland Bills of Exchange, 129. 
 Inspection and Grading, 189. 
 Insurable Interests, see Insurance. 
 
 Insurance, 202-209 ; fire, 203 ; companies, 203- 
 204 ; policies, 204-209 ; insurable interests, 
 204-205 ; risks, 206 ; proportion of insur- 
 ance to value, 207-208. 
 
 Interest, on deposits, 54 ; rates of, 54-55, 84 ; 
 dates of reckoning, 54-55 ; simple, 83 ; 
 compound, 83; date of maturity, 84-85; 
 table of, 91 ; merchants' rule for, 95. 
 
 Invoices, 35-38 ; corrected and duplicate, 36- 
 38 ; forms of, 37-38 ; forms showing dis- 
 count, 37, 38; shipping, 158. 
 
 "Ironclad," or judgment, notes, 96-97. 
 
 JOINT Makers of a Note, 81. 
 Joint Notes, 98. 
 
 LiDING, bills of, see Bills of Lading. 
 Landlord, 168. 
 
 Land Surveying, United States, 234- 
 240 ; surveying meridians, 234 ; base lines, 
 234 ; townships, 234-235 ; sections, 236-238 ; 
 ranges, 234-235 ; lands not included, 238. 
 
 Leases, 166-172 ; forms, 166, 167 ; forms of 
 notice, 168, 169; repairs and subletting, 
 170-171 ; notice to quit, 171 ; guaranties, 
 171-172. 
 
 Legal Tender, 139-140. 
 
 Lessee, 168. 
 
 Lessor, 168. 
 
 Lettergram, 30-31. 
 
 Lessor, 168. 
 
 Letters, of introduction, 20-21 ; of recom- 
 mendation, 21-22. 
 
 Letters of Credit, 124-127 ; forms, 125, 126. 
 
 Letter Writing, 11-33- 
 
 Liability, of partners, 199-200. 
 
 Limitations, statute of, 91. 
 
 Limited or Special Partnership, 201. 
 
 "Long," brokers' phrase, 187. 
 
 Lost Notes, 90-91. 
 
 MAKER, of a check, 59. 
 Manifest, railroad, 150-151. 
 Margin, of a business letter, 16. 
 Market Quotations, 185. 
 Marking Goods, private codes, 140-141. 
 Maturity, date of, 84-85. 
 
THE INDEX 
 
 267 
 
 Memorandum of Credit, see Credit. 
 Merchandise Sales, 182-190. See also Sales. 
 Merchants' Rule for Computing Interest, 
 
 95- 
 
 Meridians, surveying, 234. 
 Money, telegraphing of, 122. 
 Money Orders, post office, 118-121 ; forms, 
 
 119, 120, 121 ; express, 122 ; form of express 
 
 order, 122. 
 Mortgagee, 226. 
 Mortgages, 223-231; as security for note, 
 
 223 ; ordinary form, 224-225 ; defeasance, 
 
 226 ; real estate, 226 ; chattel, 226 ; chattel 
 
 note, 226 ; satisfaction of, 227 ; form of 
 
 satisfaction, 228 ; recording of, 226-227 ; 
 
 payments on, 227-229 ; assignment of, 229; 
 
 redemption of, 229-231 ; foreclosure of, 
 
 229-231. 
 
 Mortgagor, 226. 
 Mutual Insurance Companies, 203-204. 
 
 PARTIAL Payments, 92-93 ; United 
 States rule for, 93. 
 Partners, silent, 197; nominal, 197; 
 liability of, 199-200. 
 
 Partnership, 196-201 ; dissolution of, 200-201; 
 notice of dissolution, 201 ; limited or 
 special, 201. 
 
 Payee, of a check, 60 ; of a draft, 106. 
 
 Pen Lettering, 141-142. 
 
 Petitions, 132-133. 
 
 Phrases, commercial words and, list of, 254- 
 262. 
 
 Policies, insurance, 204-209; open and val- 
 ued, 204 ; guarantee, 216. 
 
 Post-Dated Checks, 66. 
 
 Premium, in insurance, 202. 
 
 Probate Court, 244. 
 
 Produce Exchange, 186. 
 
 NEGOTIABLE Notes, 80-81. 
 New York Stock Exchange, table 
 of prices, 193. 
 
 Night Rates for Telegrams, 30. 
 
 Nominal Partner, 197. 
 
 Notes, promissory, 77-82 ; forms of, 78, 79, 
 82, 84, 86, 87, 93, 96, 97, 98, 99, 100 ; indorse- 
 ment of, 79-80 ; forms of indorsement, 81 ; 
 negotiable, 80-81 ; joint makers of, 81 ; de- 
 mand, 82; accommodation, 89-90; lost, 
 90-91 ; outlawed, 91 ; " Ironclad," or judg- 
 ment, 96-97; joint, 98; collateral, 98-99; 
 special points about, 100-102 ; secured by 
 mortgage, 223, 226. 
 
 Notice and Protest, 86-88. 
 
 Notice to Quit, 171 ; forms, 168, 169. 
 
 Notification Sheets of Commercial Agen- 
 cies, 137-139; form of , 139. 
 
 Nuncupative Wills, 241. 
 
 OBLIGEE, 173. 
 Obligor, 173. 
 
 "Old Line" Insurance Companies, 
 203-204. 
 
 Orders, 50 ; forms, 50. 
 Orphans' Court, 244. 
 Outlawed Notes, 91. 
 
 Q 
 
 UIT-CLAIM Deed, 217. 
 
 Quotations, market, 185 ; of stocks 
 and bonds, 192-194. 
 
 RAILROAD Business, 147-161; bills of 
 lading, 147-149; memorandum. 149; 
 expense bills, 149-150; manifests, 150- 
 151; bill of lading with draft, 155-158; 
 shipping invoice, 158. 
 
 Ranges, in surveying, 234-235. 
 
 Rates of Interest, 54-55. 
 
 Real Estate Mortgage, 226. 
 
 Receipts or Vouchers, 47-50; forms, 47-50. 
 
 Recording of Deeds, 220-221. 
 
 Redemption, of mortgage, 229; equity of, 
 229-230. 
 
 Reference Books of Commercial Agencies, 
 I 37~ 1 39- 
 
 Registered Packages, 123. 
 
 Registrar of Deeds, 221. 
 
 Repairs and Subletting, 170-171. 
 
 Right of Dower, 217, 242. 
 
 Risks, insurance, 206. 
 
 Rules, United States rule for partial pay- 
 ments, 93 ; merchants' rule for comput 
 ing interest, 95. 
 
268 A FIRST BOOK IN BUSINESS METHODS 
 
 SAFETY Deposit Vaults, 72-73. 
 Sale, bills of , 172-173. 
 Sales, merchandise, 182-189 ; stoppage 
 in transitu, 184 ; common carriers, 185 ; 
 market quotations, 185 ; boards of trade, 
 186-187; sales and values, 187-188; brok- 
 ers bulls and bears, 188; inspection and 
 grading, 189; bucket shops, 190. 
 
 Salutation, in a letter, 12, 15 ; forms, 15. 
 
 Satisfaction of Mortgage, 227-229; form, 
 228. 
 
 Savings Banks, 54. 
 
 Sections, in surveying, 236-238 ; form, 236. 
 
 Settling of Estates, 244-246. 
 
 Shareholders, 190. 
 
 Shares of Stock, 190. 
 
 Shipping Order, 147; receipt, 148-149; memo- 
 randum, 149; invoice, 158. 
 
 "Short," brokers' phrase, 188. 
 
 Signature, of a letter, 12, 17 ; form, -17. 
 
 Signs used in Business, list of, 250-253. 
 
 Silent Partner, 197. 
 
 Simple Interest, see Interest. 
 
 Sinking Fund, 190. 
 
 Statements of Account, 45-46; forms, 39, 
 40, 41, 42, 43, 45. 
 
 Statute of Frauds, 182. 
 
 Statute of Limitations, 91. 
 
 Stock, preferred, 191; common, 191; certifi- 
 cate of, 190. 
 
 Stock Companies, 190-191. 
 
 Stock Exchanges, 192; New York, 193-194. 
 
 Stocks and Bonds, 191-192; exchanges, 193; 
 value of quotations, 192; tables of prices, 
 
 iQ3 *94. 
 
 Stoppage in transitu, 184. 
 Subletting, 170-171. 
 Subscription Paper, heading for, 133. 
 Sureties to a Bond, 176. 
 Surety Companies, 178. 
 Surrogate Court, 244. 
 Surveying, United States land, see Land 
 
 Surveying. 
 
 of Interest and Statute of 
 Limitations, 91 ; table of time in 
 days, 94. 
 Telegrams, 29-33; cable messages, 30 
 
 forms, 31. 
 
 Telegraphic Codes, 32. 
 Telegraphing Money, 122. 
 Tenant, 168. 
 Testator, 242. 
 Testatrix, 242. 
 Time, table of, 94. 
 Title, abstracts of, 213-216. 
 Title Guarantee Companies, 216. 
 Titles, in the address of a letter, 14 ; general 
 
 directions for use of, 22-23. 
 Townships, 234-235 ; form, 236. 
 Trade, boards of, 186-189. See also Boards. 
 Trade Discount, 38-42. 
 Travelers' Checks, 127-128. 
 Trust Deeds, 221-222 ; form, 222. 
 Trustee, 221-222. 
 
 UNITED States Express Company 
 C. O. D. envelope, 154 
 United States Land Surveying, 234- 
 240. See also Land Surveying. 
 United States Rule for Partial Payments, 
 
 93- 
 Usury, 95-96. 
 
 VALID Consideration, necessary to 
 contract, 163. 
 Voucher Check, 70. 
 Vouchers, see Receipts. 
 
 WARRANTY Deeds, see Deeds. 
 Wills, 241-248; kinds of, 241-242; 
 making of, 242 ; short form, 243 ; 
 witnesses to, 243-244 ; executor, 242 ; 
 duties of executor, 244 ; administrator, 
 244-245 ; settling of estate, 244-246. 
 Witnesses, 243-244. 
 
 Words and Phrases, commercial, list of, 
 254-262. 
 
WHERE THE MIND AND HAND 
 WORK TOGETHER 
 
 THE SELDEN SERIES OF MANUAL 
 TRAINING WORKS 
 
 By FRANK HENRY SELDEN 
 
 Director of Manual Training, State Normal School, 
 Valley City, N. D. 
 
 ELEMENTARY WOODWORK 
 
 "The instructions in Elementary Woodwork are 
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 every manual training teacher has felt in elementary 
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 D. K. CLARKE, Superintendent of Manual Training, 
 Woodstock College, Woodstock, Ont. 
 
 ELEMENTARY TURNING 
 
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 ELEMENTARY CABINETWORK 
 
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 in the hands of the student who is pursuing a course in 
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 The books are profusely illustrated with half-tones. 
 Cloth. Price each $1.00 
 
 RAND McNALLY & COMPANY 
 
 CHICAGO NEW YORK 
 
SERVICE BY WIRE and RAIL 
 
 FOR STUDENT AND MAN OF BUSINESS 
 
 TWENTIETH CENTURY MANUAL OF RAILWAY 
 AND COMMERCIAL TELEGRAPHY 
 
 BY FREDERICK L. MEYER 
 
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 Fully illustrated. Cloth. Price $1.00 
 
 TWENTIETH CENTURY MANUAL OF RAILWAY 
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 RAND McNALLY & COMPANY 
 
 CHICAGO NEW YORK 
 
THIS BOOK IS DUB ON THE LAST DATE 
 STAMPED BELOW 
 
 FEB 7 1916 
 DEC 
 
 ->MM 20 
 
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