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UP-TO-DATE BUSINESS

HOME STUDY CIRCLE LIBRARY

EDITED BY

SEYMOUR EATON

UP TO DATE
BUSINESS

INCLUDING

LESSONS IN BANKING, EXCHANGE, BUSINESS
GEOGRAPHY, FINANCE, TRANSPORTATION
AND COMMERCIAL LAW

FROM THE CHICAGO RECORD

NEW YORK
THE DOUBLEDAY & McCLURE CO.

1900

Copyright, 1897, 1898, 1899, by the CHICAGO RECORD
COPYRIGHT, 1899 by SEYMOUR EATON
COPYRIGHT, 1899, 1900, by VICTOR F. LAWSON

CONTENTS

I

GENERAL BUSINESS INFORMATION

PAGE

I. Commercial Terms and Usages 3

II. Commercial Terms and Usages (_Continued_) 4

III. Bank Cheques 6

IV. Bank Cheques (_Continued_) 8

V. Bank Cheques (_Continued_) 12

VI. Bank Drafts 15

VII. Promissory Notes 18

VIII. The Clearing-house System 21

IX. Commercial Drafts 26

X. Foreign Exchange 31

XI. Letters of Credit 37

XII. Joint-stock Companies 41

XIII. Protested Paper 46

XIV. Paper Offered for Discount 49

XV. Corporations 51

XVI. Bonds 54

XVII. Transportation 57

XVIII. Transportation Papers 59

Examination Paper 64

II

BUSINESS GEOGRAPHY

TRADE FEATURES

I. The Trade Features of the British Isles 69

II. The Trade Features of France 94

III. " " " " Germany 102

IV. " " " " Spain and Italy 111

V. " " " " Russia 120

VI. " " " " India 129

VII. " " " " China 139

VIII. " " " " Japan 148

IX. " " " " Africa 157

X. " " " " Australia and Australasia 166

XI. " " " " South America 177

XII. " " " " Canada 187

XIII. " " " " The United States 194

Examination Paper 210

III

FINANCE, TRADE, AND TRANSPORTATION

I. National and State Banks 215

II. Savings Banks and Trust Companies 221

III. Corporations and Stock Companies 225

IV. Borrowing and Loaning Money 228

V. Collaterals and Securities 233

VI. Cheques, Drafts, and Bills of Exchange 240

VII. The Clearing-house System 248

VIII. Commercial Credits and Mercantile Agencies 254

IX. Bonds 263

X. Transportation by Rail 267

XI. Freight Transportation 274

XII. Railroad Rates 281

XIII. Stock and Produce Exchanges 288

XIV. Storage and Warehousing 294

Examination Paper 301

IV

COMMERCIAL LAW

I. The Different Kinds of Contracts 309

II. The Parties to a Contract 312

III. The Parties to a Contract (_Continued_) 315

IV. The Consideration in Contracts 318

V. The Essentials of a Contract 321

VI. Contracts by Correspondence 326

VII. What Contracts Must Be in Writing 332

VIII. Contracts for the Sale of Merchandise 336

IX. The Warranties of Merchandise 340

X. Common Carriers 344

XI. The Carrying of Passengers 347

XII. On the Keeping of Things 350

XIII. Concerning Agents 353

XIV. The Law Relating to Bank Cheques 358

XV. The Law Relating to Leases 363

XVI. Liability of Employers to Employes 369

XVII. Liability of Employers to Employes (_Continued_) 373

Examination Paper 377

V

PREPARING COPY FOR THE PRESS AND PROOF-READING

I. Preparing Copy 381

II. On the Names and Sizes of Type 382

III. The Terms Used in Printing 384

IV. Marks Used in Proof-reading 387

ILLUSTRATIONS

I

GENERAL BUSINESS INFORMATION

PAGE

A Poorly Drawn Cheque 7

A Carefully Drawn Cheque 8

A Cheque Drawn so as to Insure Payment to Proper Party 9

A Cheque Payable to Order 11

A Blank Indorsement 11

A Cheque Made to Obtain Money for Immediate Use 13

A Certified Cheque 14

A Cheque for the Purchase of a Draft 16

A Bank Draft 17

Ordinary Form of Promissory Note 18

A Promissory Note Filled Out in an Engraved Blank 19

A Special Form for a Promissory Note 20

The Advantages of the Clearing-house System 22

The Route of a Cheque 24

Backs of Two Paid Cheques 25

A Sight Draft Developed from Letter 27

A Sight Draft 28

An Accepted Ten-day Sight Draft 28

An Accepted Sight Draft 29

A Time Draft 29

Foreign Exchange 32

A Bill of Exchange (Private) 35

A Bill of Exchange (Banker's) 36

First Page of a Letter of Credit 38

Second Page of a Letter of Credit 40

A Certificate of Stock in a National Bank 42

A Certificate of Stock in a Manufacturing Company 43

A Protest 48

A Private Bond 55

A Shipping Receipt ("Original") 60

A Steamship Bill of Lading 61

A Local Waybill 62

II

BUSINESS GEOGRAPHY

London the Natural Centre of the World's Trade 72

British Mercantile Marine 74

London Bridge 76

The Coal-fields of England 80

The Manchester Ship Canal 84

The Great Manufacturing Districts of England 88

France Compared in Size with the States of Illinois and
Texas 95

Street Scene in Paris, Showing the Bourse 97

Approximate Size of the German Empire 104

North Central Germany, Showing the Ship Canal and
the Leading Commercial Centres 109

Spain Compared in Size with California 113

Italy and its Chief Commercial Centres 117

Russia, the British Empire, and the United States
Compared 121

Moscow 127

Comparative Sizes of India and the United States 133

China and its Chief Trade Centres 145

Japan's Relation to Eastern Asia 155

The Partition of Africa 159

Australia 171

The Most Prosperous Part of South America 183

Trade Centres of Canada and Trunk Railway Lines 192

Export Trade of United States and Great Britain Compared 198

United States Manufactures and Internal Trade Compared
with the Manufactures and Internal Trade of all
Other Countries 199

Principal Articles of Domestic Exports of the United
States 205

III

FINANCE, TRADE, AND TRANSPORTATION

The Bank of England 216

Showing Cheque Raised from $7.50 to $70.50 241

A Certified Cheque 244

A Bank Draft 245

A Bill of Exchange 246

Illustrating Cheque Collections 252

A Mercantile Agency Inquiry Form 259

Specimens of Interest Coupons 266

Judge Thomas M. Cooley, First Chairman of the Interstate
Commerce Commission 287

The Paris Bourse 289

Interior View of New York Stock Exchange 290

V

PREPARING COPY FOR THE PRESS AND PROOF-READING

A Printer's Proof 390

A Printer's Corrected Proof 391

GENERAL BUSINESS INFORMATION

I. COMMERCIAL TERMS AND USAGES

[Illustration]

There is a distinction between the usage of the names COMMERCE and
BUSINESS. The interchange of products and manufactured articles
between countries, or even between different sections of the same
country, is usually referred to as _commerce_. The term _business_
refers more particularly to our dealings at home--that is, in our own
town or city. Sometimes this name is used in connection with a
particular product, as the _coal_ business or the _lumber_ business,
or in connection with a particular class, as the _dry-goods_ business
or the _grocery_ business. The name _commerce_, however, seldom admits
of a limited application. In the United States TRADE is synonymous
with _business_. The word TRAFFIC applies more especially to the
conveyance than to the exchange of products; thus we refer to
_railroad_ traffic or _lake_ traffic. PRODUCTS, when considered
articles of trade, are called _merchandise, goods, wares_. The term
MERCHANDISE has the widest meaning, and includes all kinds of movable
articles bought or sold. GOODS is applied more particularly to the
supplies of a merchant. WARES is commonly applied to utensils, as
_glassware_, _hardware_, etc.

GROSS commonly means coarse or bulky. In trade it is used with
reference to both money and goods. The _gross_ weight of a package
includes the weight of the case or wrappings. The larger sum in an
account or bill--that is, the sum of money before any allowance or
deductions are made--is the _gross_ amount of the bill. The word NET
is derived from a Latin word meaning neat, clean, unadulterated, and
indicates the amount of goods or money after all the deductions have
been made. To say that a price is _net_ is to indicate that no further
discount will be made.

The word FIRM relates to solidity, establishment, strength, and in a
business sense signifies two or more persons united in partnership for
the purpose of trading. The word HOUSE is very frequently used in the
same sense. In mercantile usage _house_ does not mean the building in
which the business is conducted, but the men who own the business,
including, perhaps, the building, stock, plant, and business
reputation. The name CONCERN is often used in a very similar way.

The name MARKET expresses a locality for the sale of goods, and in
commerce is often used to denote cities or even countries. We say that
Boston is a leather market, meaning that a large number of Boston
merchants buy and sell leather. In the same sense we call Chicago a
grain market, or New Orleans a cotton market. In its more restricted
sense the name _market_ signifies a building or place where meat or
produce is bought and sold. We say that the _market is flooded_ with a
particular article when dealers are carrying more of that article than
they can find sale for. There is _no market_ for any product when
there is no demand. The money market is _tight_ or _close_ when it is
difficult to borrow money from banks and money-lenders.

II. COMMERCIAL TERMS AND USAGES (_Continued_)

THE NATURAL RESOURCES of a country are mainly the mineral commodities
and agricultural produce that it yields. The lumber and fish produced
in a country are also among its natural resources. The positions and
industries of cities are usually fixed by natural conditions, but the
most powerful agent is the personal energy of enterprising and
persevering men, who, by superior education, or scientific knowledge,
or practical foresight, have often been able to found industrial
centres in situations which no geographical considerations would
suggest or explain.

COMMISSION MERCHANTS receive and sell goods belonging to others for a
compensation called a commission. A SELLING AGENT is a person who
represents a manufacturing establishment in its dealings with the
trade. The factory may be located in a small town, while the selling
agent has his office and samples in the heart of a great city. As
regards the quantity of goods bought or sold in a single transaction,
trade is divided into WHOLESALE and RETAIL. The wholesale dealer sells
to other dealers, while the retail dealer sells to the consumer--that
is, the person who _consumes_, or uses, the goods. A JOBBER is one who
buys from importers and manufacturers and sells to retailers. He is
constantly in the market for bargains. The names JOBBER and WHOLESALER
are often used in the same sense, but a jobber sometimes sells to
wholesalers. WHOLESALE has reference to the quantity the dealer sells,
and not to the source from which he buys, or the person to whom he
sells. The wholesaler, as a rule, deals in STAPLES--that is, goods
which are used season after season--though of course there are
wholesalers in practically all businesses.

Wholesale dealers send out TRAVELLERS or DRUMMERS, who carry samples
of the goods. Frequently the traveller starts out with his samples
from six months to a year in advance of the time of delivery. It is
quite a common thing for the retailer to order from samples
merchandise which at the time of placing the order may not even be
manufactured.

By the PRICE of a commodity is meant its value estimated in money, or
the amount of money for which it will exchange. The exchangeable value
of commodities depends at any given period partly upon the expense of
production and partly upon the relation of supply and demand. Prices
are affected by the creation of monopolies, by the opening of new
markets, by the obstructing of the ordinary channels of commercial
intercourse, and by the anticipation of these and other causes. It is
the business of the merchant to acquaint himself with every
circumstance affecting the prices of the goods in which he deals.

The entire world is the field of the modern merchant. He buys raw and
manufactured products wherever he can buy cheapest, and he ships to
whatever market pays him the highest price. Our corner grocer or
produce-dealer may furnish us with beef from Texas, potatoes from
Egypt, celery from Michigan, onions from Jamaica, coffee from Java,
oranges from Spain, and a hundred other things from as many different
points; and yet, so complete is the interlocking of the world's
commercial interests, and so great is the speed of transportation,
that he can supply us with these necessaries under existing conditions
more easily and readily than if they were all grown on an adjoining
farm.

III. BANK CHEQUES

A CHEQUE is an order for money, drawn by one who has funds in the
bank. It is payable on demand. In reality, it is a _sight draft_ on
the bank. Banks provide blank cheques for their customers, and it is a
very simple matter to fill them out properly. In writing in the amount
begin at the extreme left of the line.

The illustration given below shows a poorly written cheque and one
which could be very easily _raised_. A fraudulent receiver could, for
instance write, "_ninety_" before the "_six_" and "9" before the
figure "6," and in this way raise the cheque from $6 to $96. If this
were done and the cheque cashed, the maker, and not the bank, would
become responsible for the loss. You cannot hold other people
responsible for your own carelessness. A cheque has been raised from
$100 to $190 by writing the words "_and ninety_" after the words "_one
hundred_." One of the ciphers in the figures was changed to a "9" by
adding a tail to it. It is wise to draw a running line, thus ~~~~~~,
after the amount in words, thus preventing any additional writing.

[Illustration: A poorly drawn cheque.]

The illustration on page 8 shows a cheque carefully and correctly
drawn. The signature should be in your usual style, familiar to the
paying teller. Sign your name the same way all the time. Have a
characteristic signature, as familiar to your friends as is your face.

A cheque is a draft or order upon your bank, and it need not
necessarily be written in the prescribed form. Such an order written
on a sheet of note-paper with a lead-pencil might be in every way a
legally good cheque.

[Illustration: A carefully drawn cheque.]

Usually cheques should be drawn "_to order_." The words "_Pay to the
order of John Brown_" mean that the money is to be paid to John Brown,
or to any person that he _orders_ it paid to. If a cheque is drawn
"_Pay to John Brown or Bearer_" or simply "_Pay to Bearer_," any
person that is the bearer can collect it. The paying teller may ask
the person presenting the cheque to write his name on the back, simply
to have it for reference.

In writing and signing cheques use good black ink and let the copy dry
a little before a blotter is used.

_The subject of indorsements will be treated in a subsequent lesson._

IV. BANK CHEQUES (_Continued_)

The banks of this country make it a rule not to cash a cheque that is
drawn payable to order, unless the person presenting the cheque is
known at the bank, or unless he satisfies the paying teller that he is
really the person to whom the money should be paid. It must be
remembered however, that a cheque drawn to order and then indorsed in
blank by the payee is really payable to bearer, and if the paying
teller is satisfied that the payee's signature is genuine he will not
likely hesitate to cash the cheque. In England all cheques apparently
properly indorsed are paid without identification.

[Illustration: A cheque drawn so as to insure payment to proper
party.]

In drawing a cheque in favour of a person not likely to be well known
in banking circles, write his address or his business after his name
on the face of the cheque. For instance, if you should send a cheque
to John Brown, St. Louis, it might possibly fall into the hands of the
wrong John Brown; but if you write the cheque in favour of "John
Brown, 246 West Avenue, St. Louis," it is more than likely that the
right person will collect it.

If you wish to get a cheque cashed where you are unknown, and it is
not convenient for a friend who has an account at the bank to go with
you for the purpose of identification, ask him to place his signature
on the back of your cheque, and you will not likely have trouble in
getting it cashed at the bank where your friend keeps his account. By
placing his signature upon the back of the cheque he guarantees the
bank against loss. A bank is responsible for the signatures of its
depositors, but it cannot be supposed to know the signatures of
indorsers. The reliable identifier is in reality the person who is
responsible.

INDORSING CHEQUES

In indorsing cheques note the following points:

1. Write across the back--not lengthwise.

2. If your indorsement is the first, write it about two inches from
the top of the back; if it is not the first indorsement, write
immediately under the last indorsement.

3. Do not indorse wrong end up; the top of the back is the left end of
the face.

4. Write your name as you are accustomed to write it, no matter how it
is written on the face. If you are depositing the cheque write or
stamp "For Deposit" or "Pay to ______BANK______," as may be the
custom, over your signature. This is hardly necessary if you are
taking the cheque yourself to the bank. A cheque with a simple or
blank indorsement on the back is payable to bearer, and if lost the
finder might succeed in collecting it; but if the words "For Deposit"
appear over the name the bank officials understand that the cheque is
intended to be deposited, and they will not cash it.

5. If you wish to make the cheque payable to some particular person by
indorsing, write "PAY TO ______(NAME)______ or ORDER," and under this
write your own name as you are accustomed to sign it.

6. Do not carry around indorsed cheques loosely. Such cheques are
payable to bearer and may be collected by any one.

7. If you receive a cheque which has been transferred to you by a
BLANK indorsement (name of indorser only), and you wish to hold it a
day or two, write over the indorsement the words "PAY TO THE ORDER OF
(yourself--writing your own name)." This is allowable legally. The
cheque cannot then be collected until you indorse it.

[Illustration: A cheque payable to order and a blank indorsement.]

8. An authorised stamped indorsement is as good as a written one.
Whether such indorsements are accepted or not depends upon the
regulations of the clearing-house in the particular city in which
they are offered for deposit. The written indorsement is considered
safer for transmission of out-of-town collections.

9. If you are indorsing for a company, or society, or corporation,
write first the name of the company (this may be stamped on) and
then your own name, followed by the word "TREAS."

10. If you have power of attorney to indorse for some particular
person, write his name, followed by your own, followed by the
word "ATTORNEY" or "ATTY.," as it is usually written.

11. It is sometimes permissible to indorse the payee's name thus,
"BY ______(your own name)." This may be done by a junior member of
a concern when the person authorised to indorse cheques is absent
and the cheques are deposited and not cashed.

12. Do not write any unnecessary information on the back of your
cheque. A story is told of a woman who received a cheque from
her husband, and when cashing it wrote "Your loving wife" above
her name on the back.

V. BANK CHEQUES (_Continued_)

If you wish to draw money from your own account, the most approved
form of cheque is written "Pay to the order of _Cash_." This differs
from a cheque drawn to "_Bearer_." The paying teller expects to see
yourself, or some one well known to him as your representative, when
you write "Cash." If you write "Pay to the order of (_your own
name_)" you will be required to indorse your cheque before you can get
it cashed.

If your note is due at your own bank and you wish to draw a cheque in
payment, write "Pay to the order of _Bills Payable_." If you wish to
write a cheque to draw money for wages, write "Pay to the order of
_Pay-roll_." If you wish to write a cheque to pay for a draft which
you are buying, write "Pay to the order of _N. Y. Draft and
Exchange_," or whatever the circumstances may call for.

[Illustration: A cheque made to obtain money for immediate use.]

If you wish to stop the payment of a cheque which you have issued you
should notify the bank at once, giving full particulars.

Banks have a custom, after paying and charging cheques, of cancelling
them by punching or making some cut through their face. These
cancelled cheques are returned to the makers at the end of each month.

If you have deposited a cheque and it is returned through your bank
marked "_No Funds_," it signifies that the cheque is worthless and
that the person upon whose account it was drawn has no funds to meet
it. Your bank will charge the amount to your account. The best thing
to do in such a case is to hold the cheque as evidence of the debt,
and write the person who sent it to you, giving particulars and asking
for an explanation.

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