GENTLEMEN, We beg to introduce to you to whom you will please furnish such funds as may require up to the aggregate amount of Pounds sterling against sight drafts on our Head Office, London, each draft to be plainly marked as drawn under this Letter of Credit No.
and to be signed in accordance with specimen signature which you will find on our Letter of Indication of the same number to be produced herewith.
We engage that such drafts shall meet with due honour if negotiated within months from this date, and request you to buy them at the rate at which you purchase demand drafts on London.
The amount of each draft must be in scribed on the back of this letter. The letter itself must be cancelled, and attached to the final draft drawn.
We are, Gentlemen, Your obedient servants, To Messieurs the Bankers mentioned in the Letter of Indication which must be produced herewith.
N.B.—The bearer, for purposes of security, is requested to carry this Letter of Credit apart from the Letter of Indication.
On the back of the Letter of Credit particulars of the various payments must be noted, viz. :— Date when paid ; By whom paid ; Name of town where paid ; Sterling amount expressed in words ; Amount in figures.
When a payment is to be made under a Letter of Credit, the signatures of the grantor on the Letter of Indication and Letter of Credit should be verified, as well as the signature of the person requiring the money, with the specimen on the Letter of Indica tion. It is necessary, as a matter of pre caution, that the signature of the bearer of the letter should be written in the banker's presence.
The Letter of Credit should be read carefully and the various points attended to. The total amount already paid should be ascertained from the indorsements, and care must be taken, in making a payment, to s_e that the amount expressed in the letter is not exceeded, also that the period within which the credit is available has not expired.
When a Letter of Credit is issued, the amount is debited to the customer's account and credited to a separate account to meet drafts drawn by the grantee. (See LETTER OF INDICATION.)