The Fargo forum and daily republican., 1909-05-27
Railroad Notes
BANKS LOSE Big
SUMS ANNUALLY
EFFORT IS BEING MADE BY RAIL.
ROADS TO GET A UNIFORM BILL
OF EADING, THAT WILL BE
sAFEeuARDED. BY THE LAW
AND BE RELIABLE,

Large sums Of money, in the opinion
OF railroad men, are every year lost to
banks through the fact that they ac-
'cept bills OF lading which are defective
either in form or endorsement For
this reason, railroad companies have
just undertaken a special campaign
to impress upon bankers the import
ance Of insisting that bills of lading
should have thrown around them the
safeguards common to reliable com
mercial paper a.-.s "sr> ..s
1t has been estimated that the sum
Of at least $4,000, ,00O, 900 is every wear
advanced by banks on bill of IadfnR
collateral 1t is through the so-called
Order" bill of lading that the &C. y
d. movement Of freight il conducted.
shipper, when sending freight, re-
ceiVes from the railroad a bill OF lad
ing which must be surrendered at des-
tination. This is deposited with a
bank, and draft accompanied by the
bill OF lading) is drawn against the
consignee. When the latter pays the
face value of the draft, he obtains from
the bank possession OF the original
bill Of ladirg, and upon presenting II
to the railroad agent, receives the
freight.
Adoptci Uniform Bill.
To place such transactions upon a
stronger basis, railroad companies
have adopted uniform bin of lading.
drawn with extreme care and endorsed
by the interstate commerce commission.
Nevertheless, bankers throughout the
country are negotiating all kinds NJ
unconventional instruments which are
supposed to be bills of lading.
Under the law a carrier cannot make
a delivery OF freight on the basis OF
such imperfectly prepared and en-
dorsed documents. The consequence
is that deliveries are liable TO be de-
layed and consignees subjected to SER
ious hardships by the carelessness OF
some shippers and the negligence OF
bankers in accepting their bills of lad
ing, So defective are some of these
documents that It Is often necessary
to return them to the shipping point
for correction before delivery of the
property which they represent can be
made.
Can Improve Situation.
In recent years, some bankers have
been impressed by the seriousness OF
the situation by the heavy losses
which they have sustained after cases
have been tried in the courts. Prac-
tically all of such losses to banks have
been the results of imperfections in
the bills of lading as collateral. II is
maintained by the railroad companies
that IL bankers, in handling bills Of
lading, would exact the same conyen-
tionalities which are provided by sta
tute and by custom for the protection
OF commercial paper, t1e situation
would be vastly improved.
The Pennsylvania Railroad Co. has
Instructed all of its division agents to
communicate with the banks in their
respective districts with view to per-
suading the officers of these banks 20
decline to accept bills of lading for any
purpose, except when properly en-
dorsed. The company has issued to
its agents elaborate and detailed I'm
structions as to the exact r-cthods Of
preparing bills Of lading which may
be issued for banking collateral and
the company is also taking extra steps
to bring home to its agents and to
representatives OF connecting lines, as
well as to shippers in general the inn
portance of preparing order bills OF
lading correctly