Contrary to the practice of English banks, German banks will discount documentary payment bills and place the proceeds to the credit of the foreign bank's account.
Cash items and remittances are credited to the ac count "value" (by value is meant the date from which interest is credited or debited) the day following the date of actual payment, instead of "value" the date of payment as in London.
In the case of sight bills drawn with documents against acceptance, the first of exchange is generally forwarded direct to the point on which it is drawn for the purpose of fixing the date of maturity of the bill at the earliest possible moment. The second of ex change is forwarded direct to Berlin or other central town in which the foreign bank keeps its account, for discount and credit.
It is not customary to indorse the first of exchange, but indorsements by the bank may be made to the order of its correspondent in Berlin, to whom the duly indorsed seconds are remitted in due course.
Importers in Germany as a rule will not accept drafts against importations until the duplicate docu ments (duplicate draft, bill of lading, etc.) are pre sented, and in order to have the original draft ac cepted immediately upon its arrival, banks in this country when forwarding such bills for acceptance and collection, will attach to the original draft a mem orandum agreement to the effect that the duplicate bill of lading is in their possession and that the dupli cate documents will be delivered in due course.
In the case of bills which are not payable in Ham burg or Berlin, a commission charge varying from to %o is made for collection. This charge should of course be taken into consideration in calculating the value of a bill.
5. German quotations.—Berlin quotes on an eight day basis,' marks per foreign unit or hundred unit: London marks per £1 Latin Union 81.30 GCper 100 francs Austria 85.30 " per 100 crowns Russia 216. per 100 roubles Amsterdam 168.70 per 100 florins New York 4.22 44 per $1 6. American quotations.—Quotations at so many cents (about 23.87) to the mark are used only in minor exchange operations and for drafts drawn on small German towns. In the case of large transac
tions marks are generally quoted 95%. or 95%, etc. (advancing by %Ali of a cent per 4 marks) which means that four marks are worth 95% or 95%, etc., cents. When this method is used, it is necessary, when making calculations, to multiply or divide by four, in order to obtain the rate per dollar or per mark.
For all ordinary transactions this method of quota tion is sufficient, but in wholesale transactions, where the quotations are necessarily close, the shading is effected by increasing or decreasing the quotations by %4 of 1 per cent of the dollar amount.
Where the fractional rate of plus or minus is used, it applies only to the amount in dollars. Therefore in converting dollars into marks: (a) A plus fraction means that fewer marks will be obtained, so deduct the fraction from the marks.
(b) A minus fraction means that more marks will be obtained, so add the fraction to the marks.
A study of the following table will make the use of these equivalents clear. It will be noticed that a minus sign before the fraction decreases the dollars, and increases the marks, and a plus sign before the fraction increases the dollars and decreases the marks.
7. Conversions.—As Germany uses the decimal system, additions, subtractions, etc., are performed in the same manner as for dollars.
To convert marks into dollars.—Multiply the amount in marks by the rate in cents.
3,000 marks at .238 per mark = 3000 X.238 = $714.
To convert dollars into marks.—Divide the rate into the amount in dollars.
$714 at .238 = 714 = 3,000 marks.
The same rules apply when the special quotation of cents per four marks is used; care, however, must be used to divide by four when converting marks into dollars and multiply by four when converting dollars into marks.
(a) Marks 1,466 at 9514 = $350.
(b) $350 at 95% = 4 (350=.955) = 366.492 X 4 =-= Mks. 1465.968.
In converting marks into dollars when fractional rates are used, find the amount in dollars at the clean rate as in (a), then add or deduct the fraction, as the case may be, to or from the amoimt.