The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1915-08-06
Business and Finance
By W. S. Cousins. Editor The American Banker

ccptances" published last week, have
been of the greatest interest to bank
ers and business men in every part of
the United States. The Inauguration
Of this new system of trade paper will
prove a boon to domestic business,
and a long-felt want will thereby be
filled. The Reserve Board defines a
trade acceptance" as a bill of ex-
change having definite maturity and
payable in the United States, having
the obligation to pay accepted by an
acknowledgment across its face by
the firm of corporation on which it is
drawn To be eligible for rediscount
at Federal Reserve Bank, such trade
acceptance must be endorsed by the
purchaser of goods sold by the drawer
of the bill. Evidence must be given
that the bill is drawn against indebted
ness expressly incurred by the &C
ceptor by the purchase of goods as
enumerated in the bill. The trade &C
ceptance is in reality two-name paper,
and as lower rate will be gwen than
is ordinarily permitted on regular
commercial paper offered for redis-
count it is hoped and expected that a
better market will be established for
this class of paper. This will encour-
age a practice in American business
which is very common in European
countries, but which is not at present
very extensively used in the United
States.
In order to popularize the new pa
per, it is also provided that district
Federal Reserve Banks may estab-
lish rediscount rate somewhat lower
than that prevailing with the regular
commercial paper, and one bank (the
New York Reserve Bank) has already
announced a special 81 per cent rate.
Business men are now advocating a
wider use of the new trade acceptance
as substitute for notes. or for the
open account in commercial transact
oins. The European countries have
for many years adapted the acceptance
system to their business transactions
with excellent satisfaction.
In the United States, under the sys-
tenn heretofore in most common use,
the seller of goods has in reality been
the involuntary banker for the buyer
accepting his note in payment, and as
Stunning all responsibility for the nego-
tldDlllly Ol that uOlC. OlAlJ VI SSNSh-
ty wears ago domestic bills were more
widely used in the United States than
at present. The change was then
made to the system prevailing in re-
cent years, which is not in vogue else
where, with some exceptions in Can
ada. The wider use of the domestic
bill will depend, as rule, upon the
attitude of the bankers, who will
govern the practice by the fact as to
which kind of paper they make most
profitable to the business man. The
draft, it is recognized, makes neater
transaction and tends to give the low,
est interest rate to the borrower al
the bank, as the accepted draft can be
discounted at smaller interest. Or
the other hand, it is found that II
some instances the American bushes:
man likes the discount that he is abl'
to get on the open-account system.
Western Business Conditions.
Quite naturally and inevitably cur
rent business conditions vary with the
prospects of the war and this uncer
tainty breathes hesitation in business
circles. With this qualification, how
ever, business conditions could not b.
better At the outbreak of hostilitie
a year ago everything was thrown int
1 panic and business went to smash
Within few months from that tim
There was very decided recovery AM