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Author: 
 
 Mechanics and Metals 
 National Bank 
 
 Title: 
 
 Acceptances, their 
 purpose and advantages 
 
 Place: 
 
 New York 
 
 Date: 
 
 [1917] 
 
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 ) 7 2ft • 21 Mechanics & motals national bank. New York 
 M46 Aocoptonoes, their purpose and advantages 
 
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 Columbia ©nitoeraftp 
 
 mtftfCitpofiamgork 
 
 THE LIBRARIES 
 
 GRADUATE 
 
 SCHOOL OF BUSINESS 
 
 LIBRARY 
 
 
Acceptances 
 
 J. 
 
 Their Purpose and 
 Advantages 
 
 SCHOOL Of 
 
 BUSINESS 
 
 LIBRARY 
 
 The Mechanics & Metals National Bank 
 
 20 Nassau Street, New York 
 
 Capital, Surplus and Profits, $18,000,000 
 
D 
 
 ajjuaxjuu:^ 
 
 Copyright by 
 
 The Mechanics & Metals National Bank 
 
 of the City of New York 
 
 
 Contents 
 
 Historical 5 
 
 The American Bank Acceptance 12 
 
 Dollar Acceptances against Imports 15 
 
 Dollar Acceptances against Exports 29 
 
 Dollar Acceptances, Domestic 34 
 
 Trade Acceptances 38 
 
 Advantages of the Trade Acceptance 42 
 
 Advantages to the Buyer 50 
 
I 
 
 I 
 
 
 i" ' 
 
 \ 
 
 Acceptances 
 
 HISTORICAL 
 
 MANY radical changes in the mechan- 
 ism of national and international 
 finance have taken place in the past few 
 years. 
 
 Not the least important of these changes 
 has been the creation of the American Bank 
 Acceptance, the recognition of the Trade 
 Acceptance, and the establishment of the 
 American Discount Market. 
 
 Before speaking of the American Bank 
 Acceptance and analysing it in detail, 
 it might be of interest to touch briefly 
 upon the subject of Bank Acceptances in 
 general, and the experience gained by 
 other nations while the use of the 
 Acceptance was in the process of evolution. 
 
 The Acceptance is the simple and logical 
 product of generations of trade and banking 
 experience. Based upon the scientific sys- 
 tems of the leading European countries, it 
 
 5 
 
ACCEPTANCES 
 
 long ago proved ample to meet all the 
 requirements of commerce and trade. 
 Indeed, it constituted a long step in the 
 upbuilding of commercial banking in 
 Europe. In every sense a commercial 
 document, the Acceptance established a 
 system under which commercial credit 
 assumed a position of pre-eminence as a 
 controlling attraction for liquid capital, a 
 position in the money market to which 
 that form of credit was rightly entitled. 
 
 The first people to lend their credit to 
 others through the medium of the Accep- 
 tance were the English. The names of 
 the London x\cceptance houses of today, 
 called "Merchant Bankers," are known 
 throughout the world. Certain of these 
 Acceptance houses were originally import 
 merchants of exceptionally high standing, 
 who paid for their imports by "accepting" 
 long drafts drawn upon themselves by the 
 shippers in foreign countries. After these 
 drafts were accepted they were discounted 
 with the Deposit Banks or private bankers 
 at rates which had a distinct relation to 
 the standing of the acceptors. 
 
 6 
 
 l 
 
 
 i 
 
 I 
 
 ACCEPTANCES 
 
 It is thus that the development of Accept- 
 ances came about. Merchants of a 
 moderate standing who endeavored to fol- 
 low the procedure of the larger houses 
 encountered obstacles in the early stages, 
 which made the financing of their impor- 
 tations a hardship. They either could 
 not buy against their own Acceptances at 
 all, or, if they could, the rates charged for 
 discount and commission to insure the 
 risk were so high that the final cost of the 
 imported wares left too small a profit to 
 compensate them for their labor. 
 
 These merchants soon found that by 
 borrowing the signature of one of the 
 leading merchants, they could finance their 
 imports more advantageously. They 
 found that the advantages gained far 
 exceeded the small commission paid for 
 the service. At the same time the leading 
 merchants were quick to see the profit 
 for themselves, and for the trade of the 
 country, in lending their signatures by 
 way of accepting drafts for other merchants. 
 
 On account of their intimate knowledge 
 
ACCEPTANCES 
 
 of trade conditions, their knowledge of the 
 various kinds of merchandise which were 
 to be imported and which were pledged 
 as security, of values, seasonal demands 
 and markets, the leading merchants were 
 particularly qualified to grant such credits. 
 In the course of time, these merchants 
 turned more and more to the business of 
 lending their credit in the form of Accept- 
 ances, not only at home, but to foreign 
 merchants, banks and corporations. In 
 connection with this work, and on account 
 of their intimate knowledge of certain 
 overseas countries, they became pioneers 
 in extending loans abroad, and thus exerted 
 a vast influence on the expansion of English 
 foreign trade. 
 
 While thus England was extending its 
 credit all over the world, continental coun- 
 tries, particularly France and Germany, 
 showed an economic growth which resulted 
 in an ever-increasing demand for Accept- 
 ance credits whereby to finance their 
 overseas trade. Having already developed 
 a home market for their domestic Bank 
 and Trade Acceptances, an effort was made 
 
 8 
 
 I 
 
 ■N 
 
 ACCEPTANCES 
 
 by France and Germany to break away 
 from London and establish Franc and 
 Mark Acceptances in the international 
 exchange market. 
 
 The first efforts failed. One main 
 reason for the failure, and for the preference 
 given to the Pound Sterling, was found in 
 the fact that London was the only free 
 gold market in the world, a bill on London 
 meaning gold and nothing but gold if 
 demanded. Another reason was the superi- 
 ority of the London discount market, 
 which, guided by a farsighted discount 
 policy on the part of the Bank of England, 
 was always able and willing to absorb any 
 bills offered in the market. 
 
 In final recognition of this undeniable 
 preference for the Pound Sterling, a number 
 of the most powerful continental banks 
 established branches in London, and the 
 new capital brought into that market was 
 used by these foreign branch banks chiefly as 
 a basis to grant Sterling Acceptance Credits, 
 particularly, of course, for the benefit of 
 customers of the home country. These 
 credits have run into enormous figures. 
 
 9 
 
 i 
 
ACCEPTANCES 
 
 ACCEPTANCES 
 
 Gradually French and German bankers 
 were able to establish a limited market for 
 Franc and Mark Acceptances, but as time 
 went on these came to be used chiefly to 
 finance their own imports. 
 
 Some of the factors found particularly 
 effective in establishing Acceptance markets 
 in foreign countries, which should be of 
 special interest to America in its present 
 endeavor to establish foreign markets for 
 Dollar Acceptances, may be summarized 
 as follows: 
 
 Large exports with which to offset im- 
 ports. 
 
 Direct steamship connections with all im- 
 portant oversea ports. 
 
 Establishment of a charter market. 
 
 The upbmlding of insurance companies 
 to underwrite marine and other risks. 
 
 Direct cable lines to foreign countries. 
 
 Extension of loans to foreign govern- 
 ments, thus encouraging valuable trade 
 relations. 
 
 10 
 
 A strengthening of the financial structure 
 at home and the establishment of a 
 stable yet elastic discount market. 
 
 11 
 
 A 
 

 THE AMERICAN BANK ACCEPTANCE 
 
 Until the establishment of the Federal 
 Reserve System, in 1914, America was one 
 of Europe's best customers in the use of 
 its Acceptance facilities. A large part of 
 America's great import trade was financed 
 via London, Paris and Berlin, through 
 Bank Acceptances. 
 
 The annual tribute paid to Europe for 
 this service was not only an unnecessary 
 burden, but also reflected upon the dignity 
 of a nation of the political and economic 
 importance of the United States of America. 
 The Federal Reserve Act finally gave to 
 national banks the power to "accept". 
 
 The first long drafts drawn in dollars 
 on American banks, when offered in the 
 foreign markets, were looked upon by the 
 foreign bankers with doubtful eyes, and 
 could only be sold by the drawers at a 
 disparity, as compared with the Pound 
 Sterling. 
 
 Before long, however, banks and bankers 
 all over the world began to realize that 
 
 12 
 
 ACCEPTANCES 
 
 America had set its new financial machinery 
 in motion; that a discount market was 
 rapidly being established; and that bank 
 bills drawn on New York could readily be 
 discounted and at advantageous rates. 
 
 As a consequence, foreign bankers began 
 to quote closer rates for such bills— especial- 
 ly since, simultaneously with these offerings 
 of American Bank Acceptances, a strong 
 demand for remittances on New York and 
 other American centers sprang up. 
 
 The reasons for this demand were obvi- 
 ous. America, as a result of the war, 
 suddenly became the world's work-shop; 
 its export trade increased to unparalleled 
 figures. Aside from its trade with Europe, 
 new markets were developed in Central 
 and South America, the Far East, Africa, 
 and Asia. 
 
 Formerly the foreign customer would 
 have remitted to the American shipper a 
 bill on London, Paris, or Berlin in settle- 
 ment of his debt, leaving the risk of 
 exchange to the American merchant, for 
 to have remitted a draft on New York 
 would have been too costly, there being 
 
 13 
 
ACCEPTANCES 
 
 
 no market for such bills and foreign bankers 
 therefore charging arbitrary rates and extra 
 commissions for such service. 
 
 But with the new conditions bankers in 
 foreign countries became ready buyers of 
 American Bank Acceptances, wherewith to 
 create New York funds, selling such funds 
 in turn to their customers who had a debt 
 to meet in the United States. Thus a 
 channel was opened for the ebb and flow 
 of credit transfers between the United 
 States and all other countries, with the 
 result that today the American dollar is 
 quoted at all the principal exchange markets 
 of the world. 
 
 :M 
 
 »•' 
 
 li 
 
 DOLLAR ACCEPTANCES AGAINST 
 IMPORTS 
 
 The Dollar Acceptance has taken a 
 leading position in the world's credit 
 markets, and has established itself firmly 
 in the estimation of the American importer 
 and exporter. Taking the importer first; 
 what are the advantages of the Dollar 
 Acceptance to the American importer.^ 
 
 First: Cutting out of lost motion, and 
 release from the commission formerly 
 paid the London banker. If the 
 American importer desires a sterling 
 credit he must in most cases open it 
 through the medium of an American 
 bank. The commission which he 
 pays must be sufficient to compen- 
 sate the American bank as well as 
 the London bank on which the credit 
 is drawn. In other words, for a 
 sterling credit the importer pays 
 two commissions, while for a dollar 
 credit he pays but one. 
 
 15 
 
 /\ 
 

 
 
 ACCEPTANCES 
 
 Second: Elimination of the risk in 
 exchange. By the use of the Dollar 
 Acceptances the American importer 
 knows exactly what his goods cost 
 him, and there is no ambiguity as to 
 how much money he owes his bank 
 at the time the Acceptance falls due. 
 In case of an Acceptance in foreign 
 money, the risk of exchange is an 
 all-important factor in view of the 
 extreme fluctuations to which the 
 exchanges are sometimes subject. 
 
 Third: Benefit of the money rates quoted 
 in the New York market, which on 
 the average are likely to be lower 
 than those of other money centers. 
 New York has now a well-developed 
 discount market, and the ever in- 
 creasing demand for Bank Accept- 
 ances as a form of investment is 
 plainly in evidence. 
 
 Fourth : Advantage of direct service. Con- 
 tingencies frequently arising in con- 
 nection with foreign shipments can 
 
 16 
 
 ■f 
 
 (MAY BC COnKOl 
 
 APPUCATION FOP. 
 
 COMMERCIAL LEHER OF CREDIT 
 
 The Mechanics Q Metals National Bank 
 
 OF THE-CITY OF NSW YORK 
 
 Foreign Departmtnt, 
 
 " r* City. 
 
 No. 
 
 ADVISED 
 CABLED . 
 ACKNOWLEDGED 
 
 Juiwry 85th, »»1T. 
 
 _, a confirmed , ... mail 
 
 Please open ^vrtaavutmitM documenury credit by 
 
 .iOir 
 
 on Buano* AirM.- 
 
 for account of _ ouraelTM 
 
 not to exceed the sum of .._ About $16,000.00 
 
 in favor of A^. aid CemfUij , 9*»UQ9 kiT99. 
 
 available by drafts for tBL invoice value, 
 
 full 
 drawn at ..-..,-90 .d»y«. •.,-.. »..:♦.. -.,.».. -..r.r..;r,:r..»...r..Tr. .-..-. -.-.-..-.-.-..— r..*^ .r..S5eht 
 
 ai(ki. w TMrv^itoiT, Mmttt Vn%. or rwr tbMk. 
 
 covering shipment(s) of-... 48 h»l*« of »ooI" at SO-e«nti» jwr lb. ._ 
 
 oo«t -♦ .fnXght..lM.vIoffc->.^ _ .,,. 
 
 to lOT..Iork ^. :...... „.. 
 
 nmiMiii. 
 
 against delivery of the following documents : luvoio*, Cooaular ioToleA« 
 
 .. ..bllla of ladii^ to th« onlar of the Mochaaicf aod Hatal* 
 
 lational Bwnk. _. 
 
 Marine . . 
 
 War risk '"durance is to be covered by ounelvea in R«v York 
 
 Credit to be available until larch Slat ..._ 
 
 SPECIAL INSTRUCTIONS: ^ 
 
 Billa of lading auat . ahoH .freight .p»i*id.. 
 
 19 It. 
 
 Yours truly. 
 
 o^' 
 
 ^ 
 
 .B.. uid Coapany 
 
: 
 
 ACCEPTANCES 
 
 be adjusted more promptly, cheaply, 
 and eflFectively, between the Ameri- 
 can banker and the foreign shipper or 
 his banker, than could be done if such 
 adjustments had to be made via the 
 London banker, as would be neces- 
 sary in using a Sterling credit. This 
 point should not be underestimated. 
 In these days of abnormal fluctuation 
 in prices for all kinds of merchandise, 
 a deal is sometimes made or unmade 
 according to the promptness with 
 which the American bank is able 
 to back up the transaction, either 
 as a whole or in regard to some 
 technical point suddenly raised by 
 the shipper. 
 
 Dollar Acceptances drawn on National 
 Banks against imports are generally drawn 
 against what is known as a Commercial 
 Letter of Credit. A commercial credit is 
 an undertaking on the part of the bank to 
 loan its credit (not its funds), to a customer. 
 The customer, who is the original recipient 
 of this extension of the bank's credit, 
 
 18 
 
 I 
 
fl 
 
 ACCEPT A XCES 
 
 utilizes it by making it available in favor 
 of the foreign shipper. He therefore re- 
 quests the bank to notify the shipper that 
 the latter may draw on the bank, up to a 
 certain amount and within a certain time, 
 provided certain specified shipping docu- 
 ments are attached to the draft. 
 
 For example: A and Co. of New York 
 have bought from B and Co. in Buenos 
 Aires, forty-eight bales of wool at thirty 
 cents a pound, cost freight New York; 
 marine and war risk to be covered by A 
 and Co. in New York, at their own expense. 
 As this contract is subject to the opening 
 of a ninety days sight bank credit, A and 
 Co. file with their New York bank the 
 proper application for a commercial credit 
 (see p. 17). 
 
 The Bank having passed favorably on 
 the application thereupon issues its Letter 
 of Credit (see p. 19). 
 
 A and Co., upon receiving the instrument, 
 forward it by mail to B and Co. in Buenos 
 Aires, or, if necessary, have its contents 
 communicated to the beneficiaries through 
 the bank by cable. 
 
 20 
 
 
 II 
 
 t 
 
 
 New York. 
 
 19 
 
 To THE 
 
 MECHANICS & METALS NATIONAL BANK OF THE CITY OF NEW YORK 
 
 Gentlemen: 
 
 Letter of Credit havingf been issued at ^^ request of which a tn e copy is on the other side, J, hereby agree 
 to its terms, and in consideration thereof J, acree with you to provide in New York, one day previous to the 
 maturity of the bills drawn in virtue there^^^g^^fficient funds in cash, to meet the payment of the same with 
 
 inwr J, undertake to insure or have insured at ^, expense for^our 
 property purchased or shipped pursuant to said Letter of Credit. 
 
 "per cent commi, 
 
 benefit, ag^ainst risk of Fire, Sea 
 in Companies satisfactory to 
 
 ^j agree that the titIo^9a\Wlioperty which shall be purchased or sliipped under the said Credit, the bills of 
 lading thereof, the naU^i^ik^^nsurance thereon and the whole of the proceeds thereof, shall be and remain in 
 you until the pajjjjanr^^ie bills referred to and of all sums that may be due or that may become due on said 
 bills or othew(BS»^nff^til the payment of any and all other indebtedness and liability now existing or now or 
 hereafter crase^or incurred by "," to you on any and all other transactions now or hereafter had with you, with 
 authority to (S((e possession of the same and to dispose thereof at your discretion for your reimbursement as 
 aforesaid: at public or private sale, without demand or notice, and to charge all expenses, including commission 
 for sale and guarantee. 
 
 Should the market value of said merchandise in New York, eitln-r before or after its arrival, fall so that the 
 net proceeds thereof (all expenses, freight, duties, etc., being deducted) would be insuflicient to cover your advances 
 thereagainst with commission and interest, J, further agree to give you on demand any further security you may 
 require, and in default thereof you shall be entitled to sell said merchandise forthwith, or to sell "to arrive." 
 irrespective of the maturity of the acceptances under this Credit, ,', being held responsible to you for any deficit, 
 which „\ bind and oblige „"^Jt"„ to pay you in cash on demand. 
 
 In case J, should hereafter desire to have this Credit confirmed, altered or extended by cable (which will 
 be at "', expense and risk), J, hereby agree to hold you harmless and free from responsibility for such confirmation, 
 alteration or extension and from errors in cabling, whether on the part of yourselves or your Agents, here or 
 elsewhere, or on the part of the cable companies. 
 
 This obligation is to continue in force, and to be applicable to all transactions, notwithstanding any change 
 in the composition of the firm or firms, parties to this contract or in the user of this credit, whether such change 
 shall arise from the accession of one or more new partners, or from the death or secession of any partner or partners. 
 
 It is understood and agreed that if the documents representing the property for which the said Credit has 
 been issued are surrendered under a trust receipt, collateral security satisfactory to the Mechanics & Metals 
 National Bank of the City of New York, such as stocks, bonds, warehouse receipts or other security, shall be 
 given to the Mechanics & Metals National Bank of the City of New York, to be held until the terms of the 
 Credit have been fully satisfied and subject in every respect to the conditions of this agreement. 
 
 It is further understood and agreed in the event of any suspension, or failure, or assignment for the benefit 
 of creditors on JHf, part, or of the non-payment at maturity of any acceptance made by "', or of the ncyifulfillment 
 of any obligation under said Credit or under any other Credit issued by the Mechanics & Metals National Bank 
 of the City of New York on ^, account, or of any indebtedness or liability on ^j", part to you, all obligations, 
 acceptances, indebtedness and liabilities whatsoever shall thereupon, at your option then or thereafte4\exercised, 
 without notice', mature and become due and payable. 
 
 It is understood and agreed that you shall not be held responsible for the correctness ^^pkra^jjify of the 
 documents representing shipment or shipments, nor for the description, quantities. qua^|^j\^i^alue of the 
 merchandise declared therein. 
 
■ 
 
 ^ 
 
 ACCEPT ANCES 
 
 In order to protect the Bank, A and Co. 
 sign an agreement (see p. 21). 
 
 B and Co. in Buenos Aires, upon receiv- 
 ing the credit, and having ascertained that 
 the terms of the credit agree with the terms 
 of sale, place the shipment aboard steamer, 
 prepaying the freight according to contract, 
 and taking out the bill of lading in the name 
 of the New York bank according to the 
 terms of the credit. B and Co. then draw 
 up their draft for the invoice amount 
 
 (see p. 23). 
 
 To this draft are attached the invoice, 
 consular invoice and full set of bills of 
 lading. B and Co. take these to their 
 banker in Buenos Aires, producing at the 
 same time the Letter of Credit of the 
 New York bank. The Buenos Aires banker 
 thereupon buys the draft with the docu- 
 ments attached, at the current rate for 
 bank drafts at ninety days sight on New 
 York, paying B and Co. the equivalent 
 in Argentine currency. 
 
 B and Co. get a high price for their 
 dollar draft; because — 
 
 1. The discount for the ninety days, 
 
 22 
 
 I- 
 
 1, 
 
 I 
 
 t 
 
 I 
 
INTENTIONAL SECOND EXPOSURE 
 
 ACCEPTANCES 
 
 In order to protect the Bank, A and Co. 
 sign an agreement (see p. 21). 
 
 B and Co. in Buenos Aires, upon receiv- 
 ing the credit, and having ascertained that 
 the terms of tlie credit agree witli the terms 
 of sale, place the shipment aboard steamer, 
 prepaying the freight according to contract, 
 and taking out the bill of lading in the name 
 of the New York bank according to the 
 terms of the credit. B and Co. then draw 
 up their draft for the invoice amount 
 (see p. 23). 
 
 To this draft are attached the invoice, 
 consular invoice and full set of bills of 
 lading. B and Co. take tliese to their 
 banker in Buenos Aires, producing at the 
 same time the Letter of Credit of the 
 New York bank. The Buenos Aires banker 
 thereupon buys the draft with the docu- 
 ments attached, at the current rate for 
 bank drafts at ninety days sight on New 
 York, paying B and Co. the equivalent 
 in Argentine currency. 
 
 B and Co. get a high price for their 
 dollar draft; because — 
 
 1. The discount for the ninety days, 
 
 22 
 
 i 
 
 I 
 
 I • 
 
 ii 
 
 I 
 
 i 
 
ACCEPT AX CES 
 
 which the draft has to run after it is 
 accepted, is figured according to the New 
 York discount market, which on the 
 average is Hkely to be considerably below 
 that of any other money center. 
 
 2. No bill stamp is charged in New York 
 as would be the case of London or the con- 
 tinent. 
 
 B and Co., the shippers, having knowl- 
 edge of these advantages, were therefore 
 able to quote to A and Co. a lower selling 
 price for the merchandise than would have 
 been possible had A and Co. offered a Pound 
 Sterling or other credit. In other words, 
 the American importer is enabled to derive 
 the full benefit growing out of the use of 
 the dollar credit. 
 
 The Buenos Aires banker in the mean- 
 time has forwarded the draft and the docu- 
 ments to his New York correspondents, 
 who, upon arrival, present them to the 
 drawee bank for acceptance, in this case 
 to the Mechanics and Metals National 
 Bank. The latter, upon verifying the 
 draft and documents with the terms of the 
 credit, "accepts" the draft by affixing its 
 
 24 
 
 I 
 
 n 
 
INTENTIONAL SECOND EXPOSURE 
 
 .1 CCEPT A y C E S 
 
 which the draft has to run after it is 
 accepted, is figured according to the New 
 York discount market, which on the 
 average is Hkely to be considerably below 
 that of any other money center. 
 
 2. No bill stamp is charged in New York 
 as would be the case of London or the con- 
 tinent. 
 
 B and Co., the shippers, having knowl- 
 edge of these advantages, were therefore 
 able to quote to A and Co. a lower selling 
 price for the merchandise than would have 
 been possible had A and Co. offered a Pound 
 Sterling or other credit. In other words, 
 the American importer is enabled to derive 
 the full benefit growing out of the use of 
 the dollar credit. 
 
 The Buenos Aires banker in the mean- 
 time has forwarded the draft and the docu- 
 ments to his New York correspondents, 
 who, upon arrival, present them to the 
 drawee bank for acceptance, in this case 
 to the Mechanics and Metals National 
 Bank. The latter, upon verifying the 
 draft and documents with the terms of the 
 credit, ''accepts" the draft by affixing its 
 
 1 
 
 > ■ 
 
 i 
 
 ( 
 
 24 
 
f 
 
 
 1 
 
 ACCEPTANCES 
 
 stamp and signature, returning the same 
 to the party that presented it, retaining, 
 however, the shipping documents. 
 
 For fac-simile of draft after it has been 
 accepted see p. 25. 
 
 The presenting bank either holds the 
 draft until maturity or discounts it in the 
 open market, in accordance with the 
 instructions of the South American banker. 
 In the meantime the steamer carrying the 
 wool has arrived and A and Co. request 
 delivery of the shipping documents in 
 order to enable them to make custom 
 house entry and take possession of the 
 goods. It will be readily understood that 
 by giving up the shipping documents the 
 New York bank is giving up its only 
 collateral. The bank's interest must be 
 protected and the documents are therefore 
 surrendered against cash, under rebate for 
 the unexpired time the draft has to run, or 
 against approved security; or, if the client 
 is of good financial and moral standing and 
 has the confidence of the bank, against 
 what is called a "Trust Receipt". (See 
 p. 27.) 
 
 26 
 
 
 r D Na m 
 
 TRUST RECEIPT. 
 
 New York, April Sud 1917. 
 
 SrrriDrd from The Mechanics & Metals National Bank of the City of New York, 
 
 the merchandise specified in the Bills of Lading per ... .3/1 fPwJMWx" 
 
 Buenos Aitet dated Jla«cb let 19lT..viz: 
 
 Marks and Nos. 
 
 P.... .C ,.. . 
 
 155/200 
 
 f . P ^%s^ 48 bales of wool 
 
 consigned to me (us) by them for sale on their account, and in consideration, ^ 
 I (we) A....and..COBpaiiy 
 
 of 
 
 Be* Tork hereby agree to hold said goods in trust for 
 
 The Mechanics & Metals National Bank, and at their disposal for the purpose of selling 
 the same, and, in case of sale, to deliver as soon as received, the full net proceeds thereof 
 direct to said Mechanics & Metals National Bank, as security for due provision for the 
 
 acceptances of .thA MecbaaicA . and Jletals .Jl«tioD&l. Buk of the 
 
 City of. .Mew lark 
 
 I (we) further agree to keep said property insured against fire, payable in case of 
 loss to The Mechanics & Metals National Bank, of the City of New York, with the under- 
 standing that they are not to be chargeable with any insurance incurred thereon, hereby waiving 
 any lien which I (we) might otherwise have, as regards The Mechanics & Metals National Bank 
 of the City of New York, for insurance, duties, or charges to be paid thereon. 
 
 Amount of Acceptance* $15,348.50 due June 29th, 1917. 
 
 Credit dated January 26th, 1917 
 lo. M-704 
 
 s^^, 
 
 

 
 ACCEPTANCES 
 
 According to the Trust Receipt the 
 customer is obligated to hold the goods in 
 trust for the bank, and, when sold, to turn 
 the proceeds over to the bank immediately 
 upon collection of the money, which is to be 
 used in liquidation of the amount of the 
 Acceptance. As we have seen from the 
 *' Agreement", the money to meet the 
 Acceptance must be paid to the accepting 
 bank at the latest one dav before the 
 maturity of the draft. By that time (after 
 ninety days) the goods have usually been 
 disposed of and these acceptances are 
 therefore essentially self -liquidating. 
 
 28 
 
 1 
 
 
 DOLLAR ACCEPTANCES AGAINST 
 EXPORTS 
 
 The procedure of financing exports 
 through the medium of Dollar Acceptances 
 differs somewhat from that use 1 in financing 
 imports. 
 
 A foreign buyer has bought goods in the 
 United States. The American exporter 
 who sold the goods demands a bank credit 
 against which he can draw when shipment 
 has been effected. The buyer abroad 
 arranges with his local bank for the credit, 
 and the foreign bank in turn requests its 
 New York bank correspondent to open a 
 credit in favor of the American shipper, 
 available by the latter's ninety days sight 
 drafts .on the New York bank, such drafts 
 to be accompanied by certain shipping 
 documents which are then specified. The 
 American shipper, after having effected 
 shipment and secured the bill of lading 
 and other documents required, draws his 
 draft and presents the lat ter to the New 
 York bank for acceptance, together with 
 
 29 
 

 ACCEPTANCES 
 
 the required shippincj papers. The New 
 York bank "accepts" the draft, to fall due 
 in ninety days, and returns the accepted 
 draft to the shipper, forwardincj the ship- 
 ping documents Jb^y first mail to the foreign 
 bank. 
 
 The foreign bank turns these documents 
 over to its client, the buyer of the goods, 
 against such security as it may see fit. 
 Funds to meet the Acceptance on the due 
 date are guaranteed and furnished by the 
 foreign bank to the New York bank. This 
 part of the transaction lies entirely between 
 the two banks. 
 
 In the mean time, the American shipper, 
 who in payment for his shipment now holds 
 a "Bank Acceptance", either discounts 
 that Acceptance with his own bank, or 
 sells it in the open market at what is 
 called "the ruling rate for Member Bank 
 Acceptances", thus receiving his money. 
 
 The advantages of the Dollar Acceptance 
 in this case are obvious: The foreign buyer 
 wants ninety days' time at the lowest cost; 
 this the American seller gives him. Know- 
 ing that he can sell the Acceptance which 
 
 30 
 
 ACCEPTANCES 
 
 he receives from the New York bank at the 
 lowest possible rate, he (the seller) adds 
 only a small percentage to his selling price 
 in order to cover himself for this discount. 
 The American seller thus is enabled to 
 quote lower prices than at any time before 
 the passage of the Federal Reserve Act, 
 when he was compelled to draw on some 
 foreign bank, which procedure compelled 
 him to add to his price a good margin to 
 protect himself against loss in the exchange, 
 against a higher discount, and against 
 f the cost of the bill stamps. 
 ^ It may be said here that the American 
 exporter who demands a bank credit to 
 cover his sale is still too insistent upon 
 receiving a "sight" credit, under which he 
 receives "cash against documents". If 
 we are to remove a positive restriction 
 from our export trade it is imperative that 
 our exporters consent to drawing "long" 
 drafts on the American banks which open 
 the credits, if so requested by the foreign 
 buyers. The latter want time in which to 
 make a "turnover", and this can easily 
 be granted by the American sellers at low 
 
 31 
 
ACCEPTANCES 
 
 cost and little or no risk. The excuse of 
 some business houses that they do not care 
 to be contingently liable as drawers of such 
 Acceptances is irrelevant, since such con- 
 tingent liability is unimportant in view 
 of the fact that the acceptors of such 
 drafts are strong banks which have become 
 still stronger on account of being members 
 of the Federal Reserve System. 
 
 Not all exports are covered by "Bank 
 Credits", in fact, the majority are not. 
 Notwithstanding, Bank Acceptances have 
 been successfully employed in the financing 
 of such exports, particularly exports to 
 South and Central America, the banks 
 paying with their credit by giving their 
 "acceptance" instead of paying with funds 
 when purchasing documentary drafts on 
 those countries. 
 
 ' Bank Acceptances may be employed in 
 anticipation of actual exports. For in- 
 stance: A merchant has a large order for 
 an export shipment; he may, upon having 
 made proper arrangement with his bank, 
 draw long drafts on the latter, using the 
 funds thus created for the purchase or 
 
 32 
 
 ■<« I, 
 
 I 
 
 i 
 
 I 
 
 L 
 
 ACCEPTANCES 
 
 preparation of the shipment. After the 
 shipment has been made, the draft on the 
 foreign purchaser or the foreign purchaser's 
 bank, together with the relative shipping 
 documents, are handed in to the bank for 
 discount or collection, the bank in turn 
 using the proceeds of this draft in liquida- 
 tion of the original Acceptance. 
 
 This method has been successfully used 
 since the outbreak of the war, and due 
 credit should be given to the Federal 
 Reserve Board for its intelligent and prac- 
 tical interpretation of the law. 
 
 33 
 
I 
 
 I! 
 tf 
 
 
 a 
 
 <( 
 
 ii. 
 
 DOLLAR ACCEPTANCES 
 
 Against domestic shipment of goods, 
 providing shipping documents convey- 
 ing or securing title are attached at the 
 time of acceptance. " 
 
 Secured at the time of acceptance by the 
 warehouse receipt or other such docu- 
 ment conveying or securing title cover- 
 ing readily marketable staples, " 
 
 In order to finance his purchases and 
 take advantage of the cash discount, the 
 merchant formerly went to his bank and 
 borrowed on his promissory note such funds 
 as he required. The rate of interest which 
 he had to pay varied according to the state 
 of the money market, while the money 
 market in turn always showed the effect 
 of our old banking system, with its lack of 
 rediscount facilities and its consequent 
 tendency to sudden and abnormal fluctua- 
 tions. 
 
 Today, the merchant who wants to bor- 
 row is privileged to pursue a different 
 
 34 
 
 
 I' 
 
 IE 
 
 
 I 
 
 ACCEPTANCES 
 
 course. Take the case of a buyer who has 
 to meet a draft for $50,000, covered by 
 domestic shipping documents. 
 
 The buyer, having made the proper 
 arrangements with his bank, authorizes 
 the latter to '* accept" the seller's draft for 
 $50,000 drawn upon the bank — {not upon 
 the buyer) provided the draft is accom- 
 panied by certain specified documents, such 
 as invoices, railroad bills of lading, etc. 
 There are instances when it is more practi- 
 cable that the customer himself draw upon 
 the bank instead of the seller. However, 
 the other method is the more usual one. 
 The draft is presented by the seller, ac- 
 cepted by the bank and returned to the 
 seller. The documents are withheld by 
 the bank and turned over to the customer 
 against the familiar trust receipt. 
 
 The seller now has the "Bank Accept- 
 ance" for $50,000 which he can readily 
 discount in the open market. Thus the 
 actual funds are provided under competition 
 by the banking and investing community 
 at large. 
 
 The procedure to create Dollar Accept- 
 
 35 
 
 
 n 
 

 i 
 
 • 
 
 ACCEPTANCES 
 
 ances secured by warehouse receipts or 
 other documents covering readily market- 
 able staples does not vary materially from 
 that outlined, except that the customer 
 of the bank usually does not designate any 
 third party to draw the draft on the bank, 
 but draws it himself. 
 
 The advantages of these acceptances are 
 
 four-fold : 
 
 First: In the case of the seller, he receives 
 his money promptly. 
 
 Second: The bank's customer has obtained 
 his loan (or rather credit) at a lower 
 cost than by the use of the promis- 
 sory note, the rate for a three 
 months' promissory note, all other 
 things being equal, being higher 
 than the discount rate for a three 
 months' Bank Acceptance plus ac- 
 ceptance commission. This differ- 
 ence is eloquently illustrated by the 
 different valuation applied by 
 European bankers to an investment 
 of ready negotiability — as compared 
 
 36 
 
 * p 
 
 ACCEPTANCES 
 
 with one that locks up the funds 
 of the bank. 
 
 Third: The bank is able to accommodate 
 its customer more readily, since it 
 advances only its credit, the ultimate 
 buyer of the Acceptance advancing 
 the actual money. 
 
 Fourth: It has a balancing effect on the 
 money market. 
 
 Thus, through the use of the Bank 
 Acceptance the bank can take care of the 
 needs of its customers without carrying 
 the merchant's paper in its portfolio. 
 
 In other words, the bank, when granting 
 accommodations, is not dependent upon the 
 amount of loanable funds it has available. 
 
 37 
 
I 
 
 TRADE ACCEPTANCES 
 
 There is a fundamental difference be- 
 tween a Trade Acceptance and a promissory 
 
 note. 
 
 A Trade Acceptance is an order of the 
 seller on the buyer to pay, and its self- 
 liquidating character is prima facie. 
 
 A note is a promise by tKelnaker to pay, 
 and its self-liquidating character is not 
 prima facie. 
 
 A Trade Acceptance must be drawn by 
 the seller on the purchaser for goods sold, 
 while there is nothing to indicate the origin 
 of a promissory note. 
 
 While domestic Bank Acceptances cover 
 commodities such as grain, cotton, coffee, 
 copper, etc., usually involving large 
 amounts, the Trade Acceptances are used 
 in financing the ordinary business trans- 
 action between buyer and seller on direct 
 sales of a bill of goods. 
 
 If, for instance, a merchant has sold a 
 bill of goods on the terms of, let us say, 
 2/10/60 (sixty days net, 2% discount if 
 
 38 
 
 I. 
 
 ! 
 
 * » 
 
 ' I 
 
 ACCEPTANCES 
 
 paid within 10 days), at the time the invoice 
 is rendered, the invoice is accompanied by a 
 sixty days' sight draft duly filled out, drawn 
 on the buyer, together with a letter request- 
 ing the buyer to "accept" and to return 
 the draft, or, if he should prefer, to pay 
 the bill less two per cent within ten days 
 and return the draft unaccepted. 
 
 Should a customer develop the habit of 
 postponing the "sighting" of the draft un- 
 duly long, thus automatically extending the 
 due date for a corresponding period, the 
 seller should draw on such customer at a 
 fixed number of days after date, say sixty 
 days after date. By the use of such "days 
 date" bills, although acceptance may be de- 
 layed, the due date is not affected. In 
 case the seller does not wish the buyer to 
 take possession of the goods unless the 
 latter has accepted the draft, the shipping 
 documents, such as railroad bill of lading, 
 etc., are attached to the draft. The draft 
 is marked "D/A" (documents to be de- 
 livered against acceptance) and then given 
 to the bank for the purpose of obtaining 
 the Acceptance. 
 
 39 
 
i 
 
 ACCEPTANCES 
 
 Shipping documents should if possible 
 be in negotiable form, i. e., the l)ill of lading 
 should be made out to shipper's order en- 
 dorsed in blank. 
 
 Some business houses, recognizing the 
 importance of the Trade Acceptance, and 
 in an endeavor also to make it advantageous 
 to their customers, are granting special 
 inducements, either by allowing what is 
 termed an "Acceptance discount'' or by 
 granting additional time, or some other 
 concession in consideration of obtaining an 
 Acceptance. The form of Trade Accept- 
 ances varies, of course, according to the 
 nature of the business. The one shown 
 on the adjoining page is a common form 
 and is recommended for general use. It 
 has been adopted and approved by the 
 American Trade Acceptance Council. 
 
 40 
 
 'V I • 
 
 
 
 1 
 
 lars 
 
 with 
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 urch 
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 The 
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 Sut< 
 
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 3DNVJLd3DDV 3avai 
 
ADVANTAGES OF THE TRADE 
 ACCEPTANCE 
 
 Trade Acceptances have been used in 
 European countries for generations on ac- 
 count of their proven economic value. 
 They are used to put Book-Credits into 
 negotiable form, and constitute a system 
 by which Book-Credits may promptly be 
 converted into cash. 
 
 Our present system of open book ac- 
 counts, to which we have clung so 
 tenaciously, is productive only of dead 
 capital, and is therefore economically wrong 
 in that it creates immobile credit instead 
 of mobile credit. By converting an open 
 book account into a Trade Acceptance, the 
 credit represented by the account becomes 
 immediatelv available for further use by 
 the seller, because a Trade Acceptance may 
 readily be discounted with the bank, thus 
 enabling the merchant to re-invest in his 
 business the amount of capital represented 
 by the account. 
 
 The use of the Trade Acceptance also re- 
 
 42 
 
 
 I 
 
 ACCEPTANCES 
 
 moves from merchants and manufacturers 
 the necessity of acting as bankers for their 
 customers by way of open accounts. The 
 old practice results in loss of interest on 
 overdue accounts, and waste and loss from 
 slow collections. 
 
 Through the use of the Trade Accept- 
 ance the necessity of furnishing credit falls 
 where it belongs, namely, upon the banks. 
 The function of our commercial banks is to 
 deal in credits, and in case of necessity they 
 can rediscount these Acceptances with the 
 Federal Reserve Banks, furnishing the latter 
 with eligible paper which may be used as a 
 basis for currency, and thus creating an 
 elastic currency system which will expand or 
 contract according to the needs of the 
 country. 
 
 The Trade Acceptance curtails the buyer 
 in taking unearned or unauthorized dis- 
 counts. 
 
 The Trade Acceptance, in legal proceed- 
 ings, is superior to the open book account, 
 since it is a written acknowledgment of 
 debt, and a promise to pay on a fixed due 
 
 43 
 
 i 
 
ft 
 
 f\ 
 
 ACCEPTANCES 
 
 date. In some of the foreign countries 
 the law provides that judgment may be 
 obtained within three to five days on the 
 evidence of an unpaid Acceptance and 
 protest, provided the protest is taken 
 within the time Hmit set by law. This 
 illustrates the position of importance which 
 the Acceptance holds in the economic 
 structure of the countries abroad. 
 
 By the use of the Trade Acceptance, 
 friction between the buyer and seller is 
 reduced to a great extent. Not being able 
 any longer to take advantage of his position 
 the buyer cannot return goods without 
 justification or indulge in other abuses — 
 abuses which in the past arose from the 
 granting of the too-generous credit which 
 resulted from the open book account 
 system. Indirectly the retailer is paying 
 dearly for this privilege. Elimination of 
 the abuse referred to, when completely 
 in eflFect, will mean the elimination of a 
 great economic waste, and will tend ma- 
 terially to lower the cost of distribution 
 from manufacturer to consumer. 
 
 The Trade Acceptance does not interfere 
 
 44 
 
 .iii'fi 
 
 . 
 
 ACCEPTANCES 
 
 with the cash discount. Those houses 
 which have been in the habit of putting 
 out their own promissory notes in order 
 to raise funds with which to take advantage 
 of cash discounts, are now in a position 
 to use the Trade Acceptances which they 
 obtain from their own customers, discount- 
 ing such acceptances with the bank. 
 
 From the bank's point of view Trade 
 Acceptances constitute the safest, most 
 liquid, and therefore most desirable asset, 
 second only to Bank Acceptances. While 
 Bank Acceptances, on account of their 
 security, great liquidity, and consequent 
 low discount rates, make an ideal ''second- 
 ary reserve", the Trade Acceptance is more 
 desirable as a permanent investment, which 
 in case of need, however, may readily be 
 converted into cash. 
 
 In lending on single name paper the 
 banker lends on a security the self -liquidat- 
 ing character of which is not prima facie, 
 and about the origin of which the banker 
 usually has no definite knowledge. A 
 Trade Acceptance, on the other hand, 
 covers a definite transaction, the details 
 
 45 
 
ACCEPTANCES 
 
 of which may readily be ascertained; its 
 self-liquidating character is prima facie. 
 It carries two names instead of one as 
 security and is therefore infinitely stronger 
 than the promissory note. 
 
 Another feature which adds to the de- 
 sirability of the Trade Acceptance for 
 banks, as an investment, is its eligibility 
 for rediscount with the Federal Reserve 
 Bank. 
 
 The Trade Acceptance (aside from the 
 Bank Acceptance) constitutes the ideal col- 
 lateral for the issuance of Federal Reserve 
 notes. In fact, under the banking system 
 of no other country of importance in the 
 world, where credit forms the basis of 
 currency, can single name paper be redis- 
 counted with the central banks, while on 
 the other hand, two name Acceptances are 
 re(iuired, and in some cases even an addi- 
 tional endorser is necessary. 
 
 The Federal Reserve Board, recognizing 
 tlie importance and advantages of the Trade 
 Acceptance, has authorized special low 
 rates for this class of paper; these rates are 
 generally one-half per cent lower than the 
 
 46 
 
 • • 
 
 ACCEPTANCES 
 
 rate for promissory notes. Although, ex- 
 cept in some special cases, the law does 
 not permit the Federal Reserve banks to 
 discount a Trade Acceptance having a 
 longer maturity than ninety days, this 
 does not mean that Trade Acceptances 
 must not be drawn for a longer period. In 
 case of a four months' Acceptance, for 
 instance, the commercial bank simply 
 carries it until it comes within the ninety 
 days' limit, when it may be discounted 
 with the Federal Reserve Bank. 
 
 There is still another advantage in the 
 use of Triade Acceptances in their relation 
 to the banks: Under section 5200 of the 
 National Bank Act, all national banks are 
 limited in their loans to any single borrower 
 to ten per cent of their capital and surplus. 
 This ten per cent limitation, however, does 
 not apply where a national bank discounts 
 its customers' Trade Acceptances. 
 
 Section 5200 of the National Bank Act 
 makes the following provision in regard to 
 such discounts: "But the discount of bills 
 of exchange drawn in good faith against 
 actually existing values, and the discount 
 
 47 
 
 I 
 
ACCEPTANCES 
 
 of commercial or business paper actually 
 owned by the person negotiating the same 
 shall not be considered as money bor- 
 rowed. " 
 
 The advantage of the Trade Acceptance 
 in view of the above is obvious, particularly 
 to the smaller banks. In many cases, 
 these banks, on account of their location, 
 count large mills and industrial concerns 
 among their customers, who usually are 
 large borrowers. Having loaned them up 
 to their ten per cent limit, the banks are 
 unable to extend further accommodation. 
 The result is that these concerns have to 
 go outside of their own city in order to 
 obtain additional loans, while the banks 
 have to look for other loans in which to 
 invest their money — loans which might 
 not be as desirable as those which they 
 had to forego. If, now, these firms elim- 
 inate their open book account system and 
 sell their goods against Trade Acceptances, 
 they are enabled to turn these Trade Ac- 
 ceptances over to their bank, which is then 
 in a position to grant accommodation with- 
 out regard to the ten per cent limitations. 
 
 48 
 
 i 
 
 I 
 
 ACCEPTANCES 
 
 The advantage to the banker in discount- 
 ing his customers' Trade Acceptances 
 instead of his promissory notes, in case his 
 customer goes into bankruptcy, need hardly 
 be enlarged upon. Although a promissory 
 note is backed by the entire assets of the 
 maker, including the Accounts Receivable, 
 these Accounts Receivable become part of 
 the assets of the bankrupt's estate, while the 
 holder of the note merely becomes a creditor 
 along with the other creditors. In case of 
 a Trade Acceptance, the holder collects 
 from the acceptor when due, keeping the 
 money, whether or not the "Drawer" in the 
 meantime has become a bankrupt. 
 
 
 
 49 
 
^. 
 
 ADVANTAGES OF TRADE ACCEPTANCES 
 TO THE BUYER 
 
 Having spoken of the advantages of the 
 Trade Acceptances to the seller and the 
 banker, what now are the advantages to the 
 buyer? 
 
 First of all, those merchants who agree 
 to settle their purchases by Trade Accept- 
 ances, will be looked upon by the sellers as 
 belonging to a class of preferred customers. 
 The man who, instead of buying against the 
 open account, is willing to accept a draft 
 and thus go on record that he owes the 
 shipper a certain sum of money, agreeing 
 to pay at a certain fixed future date, will 
 naturally be considered as one who has the 
 affairs of his business well in hand. This 
 fact will soon find recognition in an advan- 
 tageous mercantile rating. In other words 
 the use of the Trade Acceptance by the 
 buyer in settling his obligations enhances 
 his commercial standing. 
 
 50 
 
 ■ 
 
 '^ 
 
 8^ 
 
 ACCEPTANCES 
 
 \ 
 
 ^^ 
 
 <9 
 The buyer who insists upon conductmg />. 
 
 his business on the open book account basis / 
 
 pays dearly for doing so; the open book 
 account spells high prices, in fact, highest 
 prices. On the other hand, the buyer who 
 is willing to give his "Acceptance" for the 
 debt which he has incurred, receives the 
 full benefit of this method by obtaining for 
 himself either what is termed an "Accept- 
 ance Discount" or, if he prefers, additional 
 time in which his Acceptance is to fall due. 
 
 Trade Acceptances place the buyer in a 
 position to secure lower prices, and thus 
 compete on favorable terms with those 
 who are able to take the cash discount, 
 while he is far out-distancing those who 
 buy on open account. 
 
 It is a poor rule that does not work both 
 ways; the rule of Trade Acceptances does 
 work both ways. It enables the retailer 
 to ask his customer for Acceptances on 
 sales which he makes on a "time" basis. 
 Acceptances thus obtained can be redis- 
 counted by turning them over to the jobber 
 and wholesaler or to the bank. 
 
 51 
 
 ^; 
 
 % 
 
ACCEPTANCES 
 
 The use of Trade Acceptances would 
 receive its greatest impetus if large mer- 
 chants, manufacturers and corporations 
 were to lead the way by using this method 
 in settling their own obligations. Aside 
 from the good example, the use of Trade 
 Acceptances, or Bank Acceptances, would 
 prove a distinct advantage to large con- 
 cerns that are now in the habit of taking 
 cash discounts. By conducting their busi- 
 ness on an Acceptance basis, these concerns 
 would be able to considerably increase their 
 turnover without an increase in the capital 
 investment. They could do the same 
 volume of business on smaller capital, 
 or with less borrowed capital. On the 
 other hand, the method of taking cash 
 discounts instead of acceptance discounts, 
 necessitates the accumulation of cash to be 
 held in readiness, during which period it 
 lies idle and is therefore unproductive. 
 
 The business community of this country 
 must be taught to look at the question of 
 Acceptances in its broader aspects; it must 
 be made to realize that by using the facilities 
 
 52 
 
 » « 
 
 » • 
 
 f 
 
 ACCEPTANCES 
 
 for liquid credit which the country now 
 offers, by using the Trade Acceptances and 
 resorting to Bank Acceptances when neces- 
 sary or advisable, it is not alone doing 
 something decidedly beneficial to itself, 
 but it is also performing a patriotic duty. 
 
 t 
 
 I 
 
 53 
 
 ' 
 
( 
 
 k 
 
 Foreign Exchange 
 Letters of Credit, 
 Drafts, Cable Transfers 
 
 The Mechanics & Metals National Bank 
 finances exports and imports, opens 
 credits, attends to ship disbursements, 
 issues drafts, and effects cable transfers to 
 
 All parts of the World. 
 
 We offer special facilities for financing 
 trade with Central and South American 
 countries. We have our own direct cor- 
 respondents in all of these countries, and 
 handle transactions either in dollars or in 
 other currencies. 
 
 On application, we will authorize banks 
 and bankers to draw their own drafts on 
 our foreign correspondents all over the 
 world. 
 
 Our service is at your disposal. 
 
 n 
 
 •f 
 
 ^ (* 
 
 Bills on 
 South America 
 
 We are prepared to purchase, or send 
 for collection, as desired, bills on the 
 following; countries: 
 
 Argentina 
 
 Bolivia 
 
 Brazil 
 
 British Guiana 
 
 British West Indies 
 
 Chile 
 
 Colombia 
 
 Costa-Rica 
 
 Cuba 
 
 Dutch Guiana 
 
 Dominican Republic 
 
 Dutch West Indies 
 
 Ecuador 
 
 Guatemala 
 Honduras, British 
 
 Honduras, Spanish 
 
 Martinique 
 
 Nicaragua 
 Panama 
 
 Paraguay 
 Peru 
 
 Puerto-Rico 
 San Salvador 
 
 Uruguay 
 Venezuela 
 
 
Established 1810 
 
 » # 
 
 Directors 
 
 1 
 
 The Mechanics & Metals National Bank 
 
 of the City of New York 
 20 Nassau Street, New York 
 
 Officers 
 
 GATES W. McGARRAH, President 
 
 Vice-Presidents 
 
 JOHN McHUGH HARRY H. POND 
 
 FRANK O. ROE SAMUEL S. CAMPBELL 
 
 WALTER F. ALBERTSEN NORTH McLEAN 
 
 JOSEPH S. HOUSE, Cashier 
 
 Assistant Cashiers 
 
 JOHN ROBINSON 
 ERNEST W. DAVENPORT 
 
 ARTHUR M. AIKEN 
 WILLIAM E. LAKE 
 
 ALEXANDER F. BRYAN, Auditor 
 
 NORTH McLEAN, Vice-President 
 Manager of Foreign Department 
 
 I 
 
 *'■ • 
 
 DANIEL BARNES, 
 
 President Seamen's Rank for 
 Savintjs 
 
 JAMES M. BECK. 
 
 Former Assistant U. S. Attorney 
 General 
 
 WILLIAM E. COREY, 
 
 Chairman of the Board of Directors 
 Midvale Steel and Ordnance Co- 
 
 W. R. CRAIG 
 
 W. R. Craig & Co. 
 
 WM. E. S. GRISWOLD, 
 
 i6 Broadway 
 
 HENRY O. HAVEMEYER, 
 
 President Brooklyn Eastern 
 District Terminal 
 
 WILLIAM A. JAMISON. 
 Arbuckle Bros. 
 
 L. F. LOREE. 
 
 President Tlic Delaware & Hudson 
 Co. 
 
 V. EVERIT MACY. 
 
 New York 
 
 T. FRANK MANVILLE. 
 
 President H. W. Johns-Manville 
 Co. 
 
 GATES W. McGARRAH, 
 
 President 
 
 JOHN McHUGH, 
 Vice-President 
 
 CHARLES M. PRATT, 
 26 Broadway 
 
 ROBERT C. PRUYN, 
 
 Chairman of the Board of Directors 
 National Commercial Bank, 
 Albany. N. Y. 
 
 SAMUEL F. PRYOR. 
 
 1st Vice-President The Remington 
 Arms, Union Metallic Cartridge 
 Co , Inc. 
 
 FERDINAND W. ROEBLING, JR.. 
 Treasurer J. A. Roebling Sons' Co. 
 
 HENRY H. ROGERS. 
 
 Director Anaconda Copper Mining 
 Co. 
 
 JOHN D. RYAN, 
 
 New York 
 
 F. DB C. SULLIVAN, 
 
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