The Democratic press. [volume] (Ravenna, O. [Ohio]) 1868-1901, 1893-01-18
THE OPERATION OF KlTINc DRAFTS
How to Become a Napoleon of Finance
on No Capital at All.

How to Become Napoleon OF FINANCE
on No Capital at All.
"You haven't got an x that you
could lend me?" said the shabby mar
with six days growth OF beard.
"Why, certainly, old fellow" replied
his friend, handing over bank note.
"But what is the matter? Ihe last
time we met you seemed on the flood
tide of prosperity"
$50 l was," replied the other sadly.
Unfortunately, my business has gone
to smash irretrievably."
"What was it?"
20, it was something in a sort of
speculative line, very light and profit
able as long as it lasted. don't mind
telling you about it, strictly in CONT
dence. My occupation was what is
known as 'kiting drafts" ;"
"What on earth is that?"
"Well, it is something in the way of
financiering-a method of making
money by theory rather than practice.
Had it not been for an unjustifed lack
of confidence on the part of persons
with whom 1 had business relations l
might still be doing very well. The
basis of the whole business is credit,
without which the world could not get
along and all industries would have to
come to standstill. To begin with,
let US say that borrow $100."
"Yes, that's easy enough so far"
"Gn the contrary, my dear fellow.
that is the only difficult part of the
whole performance. Once having OBJ
tanned the 800 the rest is easy enough.
I give my note for the amount at sixty
days. Now, you know that live in
Baltimore and that until recently l
was employed in one of the depart
ments."
Eyes, certainly"
"On that point the speculative plan
hinges to certain extent. just be-
fore the note comes due I make draft
in Washington on myself in Baltimore
at ten days sight for an amount suffi-
cient to cover the note and interest.
This draft 1 have discounted and with
the money l pay the note"
"That is clear as mud"
"Now, you observe that have got
the note out of the way. All have to
do is to pay the draft ten days later.
But day or two before it comes due
1 draw in Baltimore on myself in
Washington for sum large enough to
cover the first draft. This second
draft l have discounted, paying the
first draft, and am not obliged to pay
the second draft until ten days later.
l pay it by drawing from Washington
on myself in Baltimore"
| "But you can't keep that up indef-
nitely."
"On the contrary, that was my mod
est effort. 1t goes without saying that
so long as 1 could keep the thing 60
ing on that plan l need never pay the
original 500. Obviously, would be
that much ahead on the speculation.
"But you couldn't live on that very
long"
"Of course not. But it was possible
for me to repeat the thing again and
again, and so multiply my operations
indefinitely. Inasmuch as my notes
and drafts were always promptly PAID
when they fell due my credit was nee
essarily first-rate. All l needed was
credit to conduct speculative bust
ness such as describe. Beginning ir
every case by borrowing a sum o.
money on my note. I could pay up and
yet retain the money for an endless
i period by kiting drafts to cover it bacE
!; and forth between Washington anC
. Baltimore. I did not need to borrow
the cash from any bank, which woulc
have required an indorser. | got al
the money / required from two ol
|, three friends in sums of 800 or 5000
The notes l gave them were alway!
paid, with interest, SO that they len
} me the same amounts again and again
and [ was enabled each time to start {
new series of drafts.
! "That was certainly a great scheme.
"Immense. Why, my dear sir, haC
drafts flying so thick between here anC
Baltimore that l must have addeC
considerably to the banking business
, between the two cities. My desk a
, the department was covered ever.
morning with letters from the banks
containing notifications, etc. begar
J to feel like a veritable Napoleon O
finance. In fact, the occupation en-
: crossed so much of my attention tina
} | had very little time to devote to ny
office duties. Consequently, some
what to my surprise, found mysel
| suddenly bounced one fine day. /
would not have mattered much, m,
J speculative scheme being in such
) prosperous way, only that during th'
same week my Baltimore bank, TO
| some unaccountable reason, refused t.
discount one of my drafts. L coulC
not procure the money otherwise a
short notice, and the result was tina
) my entire speculation fell to pieces
, Ny credit vanished and my draft
were protested by the score. At pres
ent several actions at law are threaten
l ing me in Baltimore, and that is tn
reason why I am in Washington
? Much obliged to you for the 80, oil
man. p Washington Star.