bought, then the rate will be "above par," or at a premium, for the bank will then be at the expense of shipping currency to New York from New Orleans, with which to meet payment of the bills it has sold.

These factors will determine the rate of exchange in the same way between New York and London, or any two other points, the principles being the same in all cases.

PROTEST.

When a promissory note made by one party and endorsed by another matures or becomes due, the rule is to look to the maker for payment. In case he fails to pay at the proper time, then the bank must promptly give notice to the endorser or endorsers of the maker's failure to pay, for if this is not done the rule of law is that the endorser cannot be held responsible. This rule of law is based on the principle that unless the endorser is promptly notified of the nonpayment by the maker he naturally presumes that the note has been paid, but when he is notified he then is able to take prompt measures to protect himself for his liability by procuring security from the maker, or in some other way. This notification is called "protesting" the note for non-payment, and is usually given by a notary public or other officer qualified to administer an oath, after he has presented the note at the bank or other place where it is måde payable by its terms, in the following form:

Notary Public

endorsed by you, has been this day Protested, for non-payment and that the holders look to you for the payment. thereof

To

also to make a memorandum of the date of maturity, as well to state plainly in the note where he desires to pay it, and Any party who gives a promissory note should be careful

as of the amount, for while it is the custom of some banks to send to the maker a notice showing when and where it is due and payable, the failure to receive this, through miscarriage in the mails or from some other cause, will not relieve the maker of any responsibility arising from his failure to pay the note at the place and time agreed.

If the note, by its terms, is made payable at a certain bank, then, before being protested, it should be formally presented for payment at such bank to the "teller," or other proper officer, at the close of business on the day of maturity, the payer having the right to pay it any time before the close of business on said day. If it is made payable "at any bank,” then presentation at any bank in the place named in note will constitute a proper presentation before protesting. If, however, no place of payment is named, then the note should be presented at the place of business of the maker, or if he has no place of business, then at his residence, and if this cannot be found after a reasonably diligent search by the officer charged with the presentation and protest, then the protest may be made without the actual presentation.

Where notes or other obligations requiring protest if not paid are sent by one bank or person to another bank or person for collection at maturity, the bank or person receiving same should require the sender to give specific instructions with regard to protest, and in cases where such instructions. are not given, then the safe rule is to protest any such paper appearing to require this.

CHAPTER IX.

EXCHANGES; COLLECTIONS; LETTERS OF CREDIT.

IN THE chapter on "Loans and Discounts" and that on "Deposits," something has been said about "bills of exchange," "collections," "drafts" and "checks,” all of which are related to the business of buying and selling "exchange," and this, being one of the most valuable services rendered by the present system of commercial banking, deserves a special chapter on the subject.

The word "exchange" is very aptly used to express the process constantly going on between banks all over the world, of "exchanging" checks, drafts, and other instruments calling for the payment of money between each other. Nowadays a bank in any part of the United States is apt to have offered to it for sale or for deposit a check, or draft, drawn on a bank or banker located either in some other part of this country or in some foreign country. The owner of the check will wish either to deposit it with the bank or to sell it. It may be the check of some party on a bank in some other place, or the check of one bank on another bank located elsewhere, like the following form;