BILLS OF EXCHANGE. A Bill of Exchange is an order addressed to some person at a distance, directing him to pay a certain amount to the person in whose favor the bill is drawn, or to his order. A merchant in Chicago, owing a sum of money for goods to a merchant in London, instead of remitting money or goods to the amount of the debt, goes into the bank and buys from the banker, who keeps an account in London, a bill of exchange for the amount, and sends it to his creditor; in this way the creditor gets payment from a person in his own city, generally a banker, who keeps an account with some American banker for the purpose of paying such drafts. dollars, which is the amount he thinks he may require while in England. The banker also having money deposited in Paris, perhaps, and also in Vienna, he takes a bill for a thousand on a bank in each of those places. With these bills in his possession, he commences his journey, with only money in his pocket sufficient to pay the incidental expenses of the trip, and draws on the London, Paris, and Vienna bankers as occasion requires. The object of this arrangement is to secure travelers against loss, the bankers affording this accommodation to merchants and travelers for a percentage, which is paid them when they sell the bill of exchange. In issuing these bills of exchange, it is customary for the banker to issue a set of two or three, worded nearly alike. One of these is kept by the purchaser, to be presented by him to the foreign banker, the other two are transmitted by mail, at different times, to the same bank. Thus, if the first bill is lost, the second or third, that goes by mail, will still be available, and the holder can obtain the money without being subjected to the delay of writing to America for another bill. These bills are worded as follows: Set of Foreign Bills of Exchange. Letters of Credit have come largely into use, of late years, with tourists abroad, though Bills of Exchange are yet frequently used by persons who wish to travel in foreign countries. Thus, if A, an American, wishes to travel over Europe, he estimates the expense of the journey, and finds it to be, perhaps $3,000. To carry this with him, in gold, would be unsafe and troublesome. He, therefore, goes to a banHe, therefore, goes to a banker and gets a bill of exchange for a thousand DRAFTS. A draft may properly be called an inland bill of exchange. It is customary for the bankers in all large cities, to make deposits with bankers in other large cities, and also for the banks in the interior towns to make deposits with some one bank in the nearest metropolis. Thus, the bankers of Milwaukee, Chicago, and St. Louis, have deposits in New York, so that any person wishing to pay a certain sum of money to another person, East, has only to step into a bank and purchase a draft for the amount on New York, which he sends by mail to the creditor, who can usually get the amount the draft calls for, at the nearest bank. The banker, as with bills of exchange, charges a certain commission to pay him for his trouble, which is termed "Exchange." There being less liability to lose these inland bills, only one is usually issued. The merchant in the interior town, or other person, wishing to send money to Milwaukee, St. Louis, Cincinnati, or any other E RULES, DIRECTIONS, AND FORMS FOR KEEPING BOOKS OF ACCOUNT. VERY person having occasion to keep an account with others, is greatly benefited by a knowledge of book-keeping. There are two systems of keeping books in use: one known as SINGLE ENTRY; the other, as DOUBLE ENTRY. In this chapter it is the design to give simply an outline of Single Entry, a method of keeping books which answers every purpose with the majority of people, besides being a system so plain and simple as to be readily comprehended. The books used in Single Entry are generally a Day-book, in which are recorded each day's sale of goods, or labor performed, and money, service, or goods received; and a Ledger, in which the sum total of each transaction is put in its proper place, so arranged as to show, on a brief examination, how the account stands. These books, of different sizes, may be found at the bookstores; though, in case of necessity, they can easily be made with a few sheets of foolscap paper, ruled as hereafter shown. Persons having many dealings with customers should use a Daybook, in which is written each transaction; these being afterwards transferred to the Ledger. Where, however, accounts are few, the account may be made complete in the Ledger, as shown in several forms on the following page. In making charges in a book and giving credit, it is necessary to keep clearly in mind whether the person of whom we write gives or receives. If the individual gives he is a creditor, which is designated by the abbreviation, Cr. If the person receives, he is a Debtor, the sign or which is Dr. In the passage from the creditor to the debtor of any article, we get the word "To," with which the creditor commences the account. In the reception by a debtor of an article from a creditor, we get the word "By." The following forms show the manner of keeping an account by Arthur Williams, a merchant, with Chas. B. Strong, a farmer, who buys goods and settles his bills, usually, at the end of every month; in the meantime taking to the store various kinds of produce, for which the merchant gives credit according to the market value. Mr. Williams keeps two books, a Day-book and Ledger. LEDGER. Charles B. Strong. 1875 July 10 To D 14 2 25 July 19 By D 38 66 19 4 10 840 38 24 66 S will be seen by the example in the Ledger, the first column contains months; second, day of the month; third, "To D" means To Day-book. In the fourth column, the 14, 38, and 80 refer to the No. of the page in the Day-book which by reference fully explains the transaction. The fifth and sixth columns contain the totals of each purchase or sale as recorded in the Day-book. The Ledger should have an index in the first part which, under the head of S, will contain "Strong, Chas. B.," opposite which is the number 66, showing that Strong's account may be found on page 66 of the Ledger. When the account is balanced and closed, a sloping line is drawn down the space containing the least writing and double lines are made beneath the totals, indicating that the account is "closed." The Day-Book. In the foregoing example only Chas. B. Strong's account is shown on a page of the Day-book. This is, however, a long book usually, each page being of sufficient length to contain the accounts of several customers. At the top of each page, the day of the week, day of the month, and year, should always be written. If the day's entries commence in the middle of the page, write the day of the week and day of the month distinctly above the first, and thus at the beginning of each day's entries. When the total of the entry on the Day-book is transferred to the Ledger, the No. of the page in the Ledger where the account is kept, is placed beside the entry in the Day-book, which shows that the account has been "posted" to the Ledger. Importance of Book-Keeping. Farmer's Account with the Merchant.-Chas. B. Strong, having but few accounts, requires only the Ledger in which to keep them. He records his transactions with the merchant as follows: seem, there are but very few people who can keep the simplest form of account correctly. Most individuals are evidently deterred from learning correct forms, from the supposition that the art of book-keeping is difficult to master. The fact is, however, all the bookkeeping necessary to be understood by people having few accounts, is very easily learned, as will be seen by studying, for a little time, the accompanying forms. The importance of this knowledge cannot be over-estimated. THE MERCHANT who is successful in business, keeps his accounts in a form so condensed and clear, that his assets and liabilities can be determined in a few minutes of examination. THE FARMER who would be prosperous keeps his books in such a manner, that he can tell at a glance what product is most profitable to raise, what he owes, and what is due him from any source. THE MECHANIC who keeps himself free from litigation, and conducts his business successfully, has his dealings all clearly expressed in his accounts, and settles with his customers, if possible, once a month. THE TREASURER of an association, whose accounts are clear, explicit, and correct, is justly appreciated for the evident honesty of the financial exhibit, and is selected for other places of responsibility and trust. THE HOUSEKEEPER who avoids misunderstandings with her servants, has her account written so clearly that no mistake is made, and no ill feeling is thus engendered in her settlements. ALL PERSONS, in short, who have occasion to keep accounts with others, should have a plain condensed form, which will show at a glance how the account stands. The accompanying forms show the correct methods of keeping accounts in the Ledger, according to the established principles of book-keeping by Single Entry. 10c. 10c. Farmer's Account with Hired Man.-A Memorandum in the back part of the Ledger should state the contract between the farmer and hired man. The Ledger shows how the account stands. Farmer's Account with Crops.-That the farmer may know the profit on any of his crops, he may keep an account as follows. In like manner, an account may be kept with any enterprise. Blacksmith's Account with Farmer where Day-book and Ledger are Kept. When the account is not settled at the end of the month, it may be "closed," and the balance carried over into the next month, as follows: • The figures in this column refer to the number of the page in the Day-book; a book in which should be fully recorded each day's transactions. Book-Keeping for Housekeepers.-The following form of account, with the servant, is applicable to all domestic affairs; such as accounts with groceryinen, boarders, etc. Book-Keeping for Treasurers and Others.-Treasurers of Societies are shown the correct method of keeping their accounts in the following form: |