Avoid all banks that promise more than the regular rate of interest. Private banks may be, and usually are, honestly conducted, but to be safe, deposit only with a bank that is regularly chartered and is subject to the inspection of the law. The savings bank is the best for the wage earner. CHAPTER X NOTES--DRAFTS The promissory note is a most useful kind of commercial paper, and it is in general use in business. If a man has not sufficient ready cash to pay for the real estate he is about to purchase, he makes up the difference by a note, which note is secured by a mortgage on the property. Remember the mortgage must always be regarded as security. The note represents the debt. Often wholesalers take a note as part or even full payment for a bill of goods to a retailer. If the wholesaler needs money, he endorses these notes and putting them in his bank draws against them, less the discount he has to pay for the accommodation. As has been shown, an account may be transferred and sold, but a note is more convenient for that purpose. AN ILLUSTRATION As with a check the maker of a note is known as a "drawer," the person in whose favor it is drawn is the "payee." Notes may be written in pencil, but it is better and safer to write with ink on good paper. Supposing you buy a team of horses, or it may be a bill of goods, from John Brown, for $350. Now you have only $100 in cash. What are you to do? Mr. Brown, knowing you to be reliable, says: "That's all right, friend Jones. You pay me the $100 cash for which I will give you a receipt, then I will take your note for six months, payable at my bank." You agree to this; pay out the money, make and deliver the note and take the property in question, which is now yours as much as it had been his before the transfer. The following would be a legal form in which to make the note: $250. Summit, N. J. October 10, 1910. Six months after date I promise to pay to the order of John Brown.............. Two hundred and fifty ...... dollars,.... At the Lincoln National Bank of Summit .......... Value received. George Jones. No. 1. Due April 14, 1911. Now, if before the expiration of this note, you want to make a payment on it of, say, $75, you take the money to Mr. Brown, who endorses on the back of the note, "Received on the within note $75, January 3rd.," if that be the date, and signs, "John Brown." It may be well to remember that while a running account may be collected at any time, the law cannot prevent the maker of a promissory note from selling all his belongings and leaving the country before the note is due. DAYS OF GRACE Notes may be "time" notes, that is where there is a specified time for payment, or "demand" notes. The latter are collectable on presentation.