(d) Hotels, department stores and private bank ers often hand travelers' checks paid by them to a local bank for redemption, such third parties being allowed a commission of, say, %o of 1 per cent, which is added by the local bank to its own commission when forwarding the check to a central correspondent for redemption.
10. Letter of purchaser of trav elers' checks is furnished with a letter of indication (Figure 5) , usually bound with the list of paying agents, specifying the numbers of the travelers' checks sold to him and signed by the purchaser and the officer who countersigned. the checks. It is indispensable to the security of the holder that this letter of indication be carried separately from the travelers' checks.
A few institutions do not issue a letter of indica tion with their travelers' checks. In these cases two spaces, one at the top and one at the bottom (see Figure 6), are provided on the check form for the signature of the holder. The first signature is made in the presence of the officer who issues the checks, and the second in the presence of the paying agent, who compares the two signatures to establish their identity. This system, however, readily lends itself to forgery should the checks be lost or stolen, as the presenter of the checks has a copy of the necessary signature before him while signing the checks, or the signature may be lightly traced in pencil in the space provided before presentation and covered with ink in the presence of the paying agent.
During 1913 the Federation Universelle des Soci etes d'Hoteliers (with which the principal hotels of the world are associated) addressed a circular letter to the various issuers of travelers' checks stating that in view of the risk involved, payment by the leading hotels of travelers' checks of this form would there after be more or less uncertain, and suggesting that the banks adopt the safer method whereby the speci men signatures of the purchaser and the countersign ing officer are given in a separate letter of indica tion.
11. Lost travelers' checks.—The same care should he taken of travelers' checks as of money, and due precautions taken to avoid risk of loss. Should this occur, however, the holder is advised to communicate immediately by telegraph with one of the redemption agencies of the issuing bank or the branch at which the checks were obtained, so that the presenter of such checks may be traced without delay.
The issuing bank will usually refund to the owner the face value of lost or destroyed checks, or will issue a new supply in their stead, upon receipt of sufficient evidence of loss or destruction thereof and the execu tion of a satisfactory bond of indemnity, provided the holder immediately notifies the bank by telegraph of the loss as mentioned above.
Travelers' checks are useful for those carrying com paratively small sums of money, as they can be nego tiated at hotels, department stores, etc., where.it is im possible to secure funds under letters of credit, but those who require to provide themselves with large sums, say, $1,000 or over, will find a letter of credit more convenient. A good plan for many travelers is to carry both.
12. Letters of principal banks of the world issue letters of credit designed specially for the use of travelers. They are accompanied by a letter of indication (see Figure 7), and are of two kinds, namely : (a) Domestic, drawn in local currency for use in the country where they are issued (Figures 8 and 8A), and, (b) Foreign, usually drawn in sterling (Figures 9 and 9A) .
The holder of one of these credits may draw any sum he desires, up to the amount of the credit, thru correspondents at all the principal places visited by business men and tourists thruout the world. A list of paying agents is supplied to each purchaser.
13. Payment to the holder.—The holder draws a draft on the central correspondent of the issuing bank designated in the letter of credit for the amount of money he requires, and presents it to one of the pay ing agents designated in the list of paying agents. The paying agent then compares the signature on the draft with that given in the relative letter of indica tion, and authenticates the signature of the officers appearing on the letter of credit by means of the spec imens he has on file. If the signatures are in order he makes payment and enters the particulars of the draft on the back of the letter of credit.