endorsement is arranged, the banks usually fix the rate for the term which they consider most favourable to themselves.

Documentary Bills. We now repeat the documents which are usually attached to a "documentary bill." They are as follows:To the "First "-Invoice, Bill of Lading, Policy of Insurance, and Letter of Hypothecation.

66

To the "Second" and Third"-Invoice, Bill of Lading, and (when the Letter of Hypothecation is made out in triplicate, as is sometimes the case) the Letter of Hypothecation.

Each draft (First, Second, and Third) and each copy of the Bill of Lading, is endorsed in blank by the drawer, when these documents are made out to his "order," as is usually the case.

The above-named documents being all ready, and attached (i.e., pinned together) as described, they are handed to the bank, which advances the money against them as may have been previously arranged-in some cases the full amount; in others only 90, 80, or 75 per cent., or even less, as the case may

be.

The bank forwards the drafts, with the documents attached, to its branch abroad, at the place on which they are drawn. The branch bank presents the bill to the drawee for acceptance. If accepted, the amount of the bill is generally paid at maturity, and, if in sterling, at the specified rate of exchange, plus interest at the agreed-upon rate from the date of the draft to the approximate time it will take for the money to be remitted to and reach London. The Bills of Lading and Policy are then handed to the drawee, and the transaction is ended so far as the bank is concerned. The goods are usually landed and warehoused by the bank, and if, as is often the case, the drawee wishes to take delivery of a portion of the goods, but not the whole, before the bill is due, he pays to the bank the value of such portion, and the bank gives him an order for the goods required. If he requires the whole of the goods before the bill is due, he may retire the bill under discount. Should the drawee "fail," or suspend payment while the bill is running, or for some reason or other refuse to pay the bill at maturity, the bank may sell the goods and recover the balance, if any, from the shipper.

Sometimes a documentary bill is drawn "documents to be surrendered against acceptance," but this is very rarely done, and then only when the drawees are firms of a very good standing.

Advice of Drafts.—When a bill is drawn (whether "clean" or documentary") advice thereof must be at once sent to the drawee. The following is an example of such an advice :

Messrs. Bunder, Abbas & Co.,

Dear Sirs,

:

MANCHESTER, 29th September, 1898.

Calcutta.

BA
C

We had this pleasure last on the 15th inst., and now beg to advise shipment of your Indent No. 1500, viz., 1000/1004 = 5 Bales Grey Dhooties, per steamer "Barrister," sailing to-morrow.

For the invoice amount thereof, viz., Rs.2,125, we have drawn upon your goodselves by our draft No. 4,586, documents attached, at 60 d/s, and have negotiated the same through the Chartered Bank of India, Australia, and China.

Recommending our draft to your kind protection,

We are, Dear Sirs,

Yours faithfully,

HENRY STEPHENSON & Co.

Letter of Hypothecation.-To "hypothecate" means to pledge or mortgage. A Letter of Hypothecation is a printed form filled in with particulars of the drafts drawn and of the goods. against which they are drawn, and authorises the bank to sell the goods if the drawee fails to "accept" when the drafts are presented or does not pay at maturity. The following is a specimen of this document:

We have negotiated through your London office...a...Bill drawn by..." on.. Messrs. Oscar Wilson & Co., Bombay for £ 140: 5 : 5 and, as collateral security, have delivered with the said Bill shipping documents for the following goods:— Invoice for..... packages amounting to £140: 5:5

The Freight on which amounting to £ 1:17 10 is paid by us.
These documents are to be given up on payment of the Bill.

In case the said Bill should suffer dishonour, either by non-acceptance on presentation or non-payment, we hereby authorise you to cause the said goods to be sold according to your discretion, such sale being for our account, at our sole risk, and subject to the usual charges for commission, and all incidental expenses it being understood that The Mofussil Bank of India, Limited, is to be free from all responsibility whatever in respect of such sale. The proceeds of the goods, if sold under this authority, you will account for here, and we hereby undertake and agree to pay you, with a re-exchange of 10 per cent. thereon, the amount of any deficiency which may arise between the said Bill and the proceeds of the goods; and should any surplus be realised, we consent to your retaining a general lien thereon against any other liabilities we may have incurred to your Bank.

In case of any loss arising, for which you may recover under the Insurance effected on these goods, you are hereby authorised to hold the amount so recovered at the disposal of Messrs. Oscar Wilson & Co.

provided said Bill shall have received due honour. But in the event of the dishonour of the Bill, either by non-acceptance on presentation or non-payment, we hereby give you authority to retain the amount so recovered for our account, subject to any claim the bank may have thereon.

We are, Gentlemen,

Yours faithfully,

MONSON & CO.

THE EXPORTATION OF GOODS-Continued

SHIPPING GOODS "ON CONSIGNMENT."

A "consignment" means a quantity of goods shipped to a firm abroad for sale on commission for account of the shipper. Such shipments generally result in a loss, and are therefore not popular with British traders.

There is practically no difference between a Consignment Invoice and a "Loco" Invoice except in the heading.

Sometimes the charges are given in the total (instead of in detail, as in the "loco" invoice), as in the following example :

INVOICE of

Invoice No. 10.-Consignment.

Liverpool per S.S.

1 Case White Mulls

"Branksome Hall'

and consigned to. Messrs. Brown, Jones & Brown and risk of TIMOTHY JONES & Co.

Strictly speaking, this is not an invoice; it is really in the nature of a Proforma Invoice. If you are familiar with bookkeeping, you will remember that when entering an invoice of goods shipped on consignment, you do not debit the amount to the account of the person to whom the goods are consigned, but to an impersonal account called "consignment account." The invoice is sent chiefly as a guide for the sale of the goods; but it is also necessary for Customs purposes.

The word "proforma" means for form's sake, i.e., imaginary or fictitious. It is used chiefly in connection with invoices and account sales. A Proforma Invoice is sent to show a correspondent abroad what would be the charges on a certain class, or a particular lot, of goods, so as to enable him to ascertain the approximate total cost laid down at that place. A Proforma Account Sale is used for much the same purpose, viz., to enable a person to ascertain whether he could realise a profit by sending a consignment of goods which he may have on hand or may think he may find a profitable market for-e.g., a manufacturer in Lancashire or a cotton dealer in India or the United States. There is no apparent difference between a proforma and a bona-fide invoice or account sales, except that the former is always headed "Proforma Invoice" or "Proforma Account Sale," as the case may be.

An Account Sale (or account sales) naturally follows a shipment of goods on consignment. An account sale is the converse of an invoice. An invoice is a statement of goods bought; an account sale is a statement of goods sold. An account sale, like an export invoice, must contain the marks, numbers, and particulars of the goods, and also the prices at which they have been sold and all charges paid, such as freight, landing charges, storing, fire insurance, import duty (if any), and agent's commission. These charges are, of course, deducted from the gross amount realised for the goods. The balance is called the "net proceeds."

The following is an account sale for the goods comprised in Invoice No. 10: