For which reason
sixty-day bills drawn against shipments of grain--documents deliverable
only on payment under rebate--command a better rate of exchange even
than the very best of cotton "acceptance" bills drawn on banks.

2. _Clean Bills_

[Illustration: Form of Clean Bill]

Where the drafts of the merchants of one country drawn upon the
merchants or bankers of another are unaccompanied by shipping documents
they are said to be "clean." Bills of this kind may originate from the
transfer of capital from one country to another or may represent
drawings against shipments of merchandise previously made. It is not
unusual, indeed, where the relationship between some foreign merchant
and some American merchant is very close, for the one to ship
merchandise to the other without drawing drafts against the shipment
until some little time afterward. It might happen, for instance, that a
cotton manufacturing firm in France wanted to import a lot of raw
cotton from the United States, but did not want to be drawn upon at the
time. Under such circumstances the American house might ship the goods
and send over the documents to the buyer, postponing its drawing for
some time. Eventually, of course, the American house would reimburse
itself by drawing, but the documents having gone forward long before,
the drafts would be what is known as "clean."

Later on, in the chapter on the actual money-making operations of the
foreign department, the risk in buying various kinds of bills will be
fully explained, but in passing it may be mentioned that "clean" bills
are of such a nature that bankers will touch them only when drawn by
the very best houses. With a documentary bill, the banker holds the
bill of lading, and if there is any trouble about the acceptance or
payment of a draft, can simply seize the goods and sell them. But in
the case of a "clean" bill, he has absolutely no security. The standing
of the maker of the bill and what he knows about the maker's right to
draw the bill is all he has to go by in determining whether to buy it
or not.

3. _Documentary Commercial Bills Drawn at Short Sight_

[Illustration: Form of Documentary Commercial Sight Bill]

A comparatively small part of our exports are sold on a basis where the
draft drawn is at less than thirty days' sight, but there are a good
many small bills of this kind continually coming into the market.
Drafts drawn against manufactured articles and against such product