Pound drafts drawn on Africa are made "payable with ex change as per indorsements, plus English and Colonial stamps." The remittance letter must be similarly stamped and also marked "for negotiation, payment of proceeds to the (correspondent of the New York bank) in London, plus your usual commission." The statement of all time sterling drafts drawn " documents against payment " must bear a stamp reading: Time sterling drafts drawn "documents against acceptance" are sent to the London correspondents with instructions to hold them in their portfolio after acceptance, subject to further in structions. The further instructions are always issued by the traders, who determine when such items are to be discounted in the London market to advantage.
Remittance Letter Covering Dollar Items Dollar items are handled in a different manner. If the dollar item is drawn with exchange on London or the British Colonies and the rate of exchange in New York on London is favorable, it may be converted into a pound draft at the prevailing rate and forwarded as a pound item, and the bank's sterling account is credited with the face amount of the draft. If the rate of ex change prevailing in New York on London were not favorable, the dollar item would be left in dollars and to it would be added the bank's commission charge and the interest charges for the period the bank expects to be out of funds; its remittance statement is stamped as follows: If, on the other hand, the discount charges have been met by the drawer, the bank merely asks for a rate which will enable the bank to debit the correspondent's account for the face amount only.
The remittance letter of dollar drafts drawn on other points and the drafts themselves are always stamped "payable by de mand draft on New York " and this demand draft must be an approved banker's check. Should the correspondent bank not have an account with the sending bank, the statement is stamped: If the drawer has instructed the bank to collect all charges from the drawee, the bank adds its commission charge and stamps the item: Such items are difficult to handle for the reason that the correspondent may not accurately estimate the number of days until the proceeds arrive in New York, in which case the bank is out of funds longer than the period for which it gets interest from the drawee. It is then no longer possible to assess the interest charge upon the drawee, although the drawer's instructions were to collect all charges from the drawee. The question is: Can
the drawer be morally bound for the interest for the few days due to misquotation of the bank's agent? When such a situation arises, all small charges are usually neglected and the larger claims are considered each on its own merits.
The remittance letter of all dollar items is stamped "payable by demand draft on New York." This clause gives the drawee the option of paying at rates calculated by the correspondent, or, if the drawee feels that he is being overcharged, of buying an approved demand draft on New York in the open market and tendering the draft in payment. If a correspondent attempts to enforce its rate to the exclusion of the demand draft, the drawee may refuse to pay the correspondent and remit direct to the drawer.
Items drawn on the Far East and the accompanying remit tance letters are stamped with the so-called "Far Eastern" clause: After all instructions are properly stamped, the original letter is attached to the original draft and documents, and the dupli cate letter to the duplicate set. They are then given a final examination by the responsible member of the department, signed, and sent to the outgoing mail department for attention. Barring complications or errors the item is not heard from again until the acknowledgment, advice of acceptance, or advice of payment is received.
Passing on the Offerings It was shown above that the window man, having examined the documents and checked them against the accompanying letter and having added certain data, passed the letter to the head of the department for review and directions. In accepting any items, it is understood that the window man does so subject to the decision of the department head as to whether or not they will be purchased (or discounted), and upon what terms. Some authority may be lodged with the window man with respect to items from familiar sources. Likewise the degree of authority conferred upon the head of the department by the bank officers varies with the bank. In all cases the offerings must ultimately be approved by the management. Discretionary power lodged with the department expedites business, for the items may be already i n themails by the time the bank officers are able to act. Such delegation of responsibility is not without danger, however, and any item about which the department has any doubt what ever should be straightway referred to the officers.