Circular

letter of credit. Commonly called traveler’s letter of credit; a demand bill of exchange (draft) i ued by a dealer in exchange and payable in instalments by foreign correspondents of the i uer or for that matter by domestic correspondent. The letter is a circular letter in the fact that it is addre ed to any and all the correspondents of the i uer. When it is. desired to obtain money the letter is presented to a correspon- ‘ dent of the i uer with a check on the i uer for the sum desired. The correspondent usually prepares (fills out) the; check and the holder of the letter signs it in his presence.? The signature must be written exactly as it previously had been written on the letter of credit. The correspondent re-? tains the check, writes in the sum drawn on the letter and, ' then returns the letter to the holder. i For instance, a letter of credit is purchased in New York by a person who is going abroad. In London he may pre- ' sent it to the correspondent of the i uer and draw part of the amount of it in pounds sterling. In Paris he may present it to another correspondent and draw more money, this time in. francs. In Berlin he may draw marks, and so on until the full amount of the credit is exhausted. Circular note. A note for a specified amount i ued by a dealer in exchange and payable by any correspondent of the dealer. It is intended for the use of a traveler. | A traveler purchases a number of these notes, say, for £10 ~ each. The traveler indorses each as he presents it for payment. He is provided with a letter of indication which bears his signature and the signature on the note must correspond with the signature in the letter of indication. 111