the holder of a particular letter
availed himself of its advantages. It gives the names of the banks to
which he presented his letter, and the amounts paid by each.

With such a letter a traveller could make a trip around the world and
not have in his pocket at any one time more gold or silver or bills
than would be necessary to meet immediate expenses.

Suppose that A. B. is about to make a European trip. He goes to a bank
doing a foreign business, say Brown Bros. & Co. of New York City, and
asks for a circular letter for L1000, for which he is obliged to pay
about $4880. Copies of A. B.'s signature are left with Brown Bros. &
Co., and may perhaps be forwarded to their foreign banking houses.
When A. B. presents himself at a Glasgow or Paris bank with his letter
of credit, and asks for a payment upon it, the banker asks him to sign
a draft on Brown Bros. & Co., New York, or more likely on their London
bank, for the amount required, which amount is immediately indorsed on
the second page of the letter of credit, so that when the indorsements
equal the face the letter is fully paid. A. B. is simply drawing upon
his own account--that is, upon the money he deposited to secure the
letter of credit.

Payment is usually made upon the simple identification or comparison
of signatures. If a traveller should lose his letter of credit he
should notify at once the bank issuing it and, if possible, the banks
upon which drawn.

[Illustration: Second page of a letter of credit (used).]

There are several other forms of travellers' credits in use. The
_Cheque Bank_, an English institution with a branch in New York City,
issues to travellers a book of cheques, each of which can be filled up
only to a limited amount, as shown by printed and perforated notices
appearing on the face. For instance, for L100 one can buy a
cheque-book containing fifty blank cheques, each good, when properly
filled up, for L2. Each of these cheques is really a certified cheque,
only it is certified in advance of issue. Any of the thousand or more
foreign banks which are agents for the _Cheque Bank_ sell these
cheque-books, and cash the cheques when presented. The amounts that
may be short drawn go toward the cost of a new cheque-book, or may be
returned in cash. The American and other express companies have forms
of travellers' cheque-books very similar to those issued by the
_Cheque Bank_.

XII. JOINT-STOCK COMPANIES

To organise a stock company i