Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1899-06-03
How Clearinss Between Different Cities and
Countries arc Effected.
DRAFTS AND CHECKS ARE THE MEDIUM.
Bank Charge, Nay Vary for Drafts Between Cities and The Par
Of Exchange Varies Between Different
Countries.

I YOU have rlil ard cent 90 them for cole
] lection. WIU fhHy uufH
$50. we are constantly drawing on
"iIou do SOU 10 it1"
'Thr merchants here have bills fo
nay loo Co., EaH COR r1ois purchased.
Th.F have 90 fDmlt in nIy their bills.
ThHN have money deposited with this
hlnk They Hrnl Zoo hu order accom- s
panied hY % chick against their uNu
aDruuntH aud payable tn us. asking 81
tl MAX. dfaft- iu tneuucivc1 payable
in he East We make the iufiH ana
charge thH person ordering % with The
amount drawn. plus small charge Tor
the draft"
What ia o. good definition Of "a
inugH
"a iriu o. d check drawn by ono
bank 0n another 4 ON ~ exchange =
% drtft 10 iH uu order from one bank
to another asking the latter 10 pay Co
% certain person certain sum and Co.
charge enc amount 20 paid To- The bank
sending The order"
Thus % comes about that che money
owed Co uH hN tho EASTERN banks lH
paid t1 uH hy the local merchants. who
owe money Joe tha East Thry pay uH
the money wo draw the draft request.
lng TIE EASTERN banks 90 pay me bills
ont nf what thry are owlnr ua fur their
rhorkH cnHhrd by Ourselves aa before
stated"
Tho merchants CT ihrlr money back
ION The yale NJ rO0iH Go their patrlna
and thrre ln turn who ORE the bulk ~
tho lnhlhlnuH VI che community, rrt
tnrlf money from sale ~ their wheat
fruit sold. Lead. silver copper wool.
hides. etc., or Tor their lnhor. and thus
D. ihc circulation Kept up
'Whrn shipments % bullion nr other
products arc made 60 the East ls
money shipped back In payment Cor
mo. che shipper receives draft
from tho East. which he rHahfa nf Che
banks here, cog che bankers or brokers
may advance him ihe money here and
then collect Il in The East"
FoREidN ENcuANGEa
Forirn exchange o. precisely dmlinf
hut 10 quoted in terms uf the money
used hy dinorcnt uatiuna u person
iu this country has "a hill 20 pay in Lon.
don. BE- buys exchange IN terms M the
Englllh pound aicrling. iio may pay
from $50 90 fipn f0r tho pound. accord.
ing 10 whether the exchange lH ln favor
81 or against this country.
IN utr iall nnd curly Nlntor after the
hnrvnrtiQN ani Hale abroad NJ Amrri.
can farm cmpa, there o. large amount
~ money due Go America ln Europe.
chiefly in ENGLAND. rhrn Go save The
trouble 90 shipping this money 90 Am.
erica, the owners prefer O. Hull ~ ut
some discount tu people no America who
have debts 90 pay IN England.
Tho pound sterling may az such times
D. bought in this country Tor iraf than
flhi. which ~ The normal figure for o.,
ana ln inglln1 American money would
in spring ana early SUMMER. ON the
other hand ihr shipment VI goods fuum
England ana EUROPE iH greater thnu Dr.
thH counter fhluWrnt from this country.
ana money in Sow York d. due Coz
suniH purchased in London and riHo.
who're Hence exchange lan t such times
lu favor uf Europe, and money ln Am.
vriea win hn sold tn Europeans alta lila.
count hN thr foreign banks. AZ such
times ihH pound sterling will cost more
than SIS. ana may reach itFo
in ans ClHc If VIII hU observed that
The ratio exchange b. just tho Same way
nH d. ihu favorable balance uf trade.
when ihr balance NJ trade o. boz favor
NJ America. ihHt Dr.. when thlH country
moro Foods 90 other Countries than
have hrHn imported from abroad thHu
thr ratio ~ exchange On in favor VI this
country, ana money exchange can hs
sent Co. Europe 40 tho rate uf say ttNa
ilr each pound sterling
N NNW NNN NNNNNNN ANNNM % lu iANur
m Europe that il whfn Europe has sent
more goods 90 this county than this
country has sent Co Europe. then tho
rate NJ exchange viii De against this
country ana lt win cost sny ftV Co
plN Cor each pound sterling sent Gas
crliD tn England.
The reason iH that Whom much money
n due from ono country o. another the
rate M exchange riars Cor the rrarlu
that Hl much money trrHdllsl iH gulug
in one direction la tu make Unmptr-
alive scarcity OF money iu thn country
iuw which % On rnlnT. Of Hlucr thrr,
10 much money due to people in ono
locality from those in another. the FORE
mrr prefer Go Hell that money ut dis
count tu amy ono iu their own country
who viii Give them ready money fur d.
rather than incur thr expense. uHk.
uui delay ol shipping iu the money
frum abroad
Thy money Itself mroly moves. n
American cities perhaps Y5 per cent nf
tho actual transactions OF lnY ono day
arc mad. without money. hy means 90
tho transfer uf credits ln ths shape uf
bank rhU.kH, notes bills ut exchange
and thr IKE. Money rarely moves hs-
tween different uItle iu amy great
amounts nor between uIUprnuI rUuu o.