Manufacturers and wholesale merchants usually sell their goods _on time_, as it is called, say three or six months. Debts are thus created, or to say the same thing in other words, Credits are thus given. The manufacturer or wholesaler is creditor and the jobber or retailer is debtor. But a debt is property; and the creditor in this case wishes to avail himself of his property at once for further production; so he either takes a Promissory Note from his debtor, or draws a Bill of Exchange upon him, and this piece of property is ready for sale. Neither piece mentions _interest_ expressly, but the face sum virtually covers it as contemplating discount. Banks have been organized for the express purpose of buying for their own profit and for the convenience of business such pieces of property; some banker, accordingly, buys this particular piece, that is to say, this creditor passes over to this banker the commercial right to demand payment from this debtor at the end of three months, and receives in return from the banker either money direct or so much of the banker's credit, that is, a deposit in favor of the creditor on the banker's books. For furnishing this creditor either with ready money or a more available credit in lieu of his mercantile paper, the banker charges of course _a percentage_. This is _Discount_. _Discount is the difference between the face and the price of the paper._ This percentage called discount is the chief source of profit in ordinary banking. It is virtually compound interest on the sum advanced till the maturity of the paper, when the banker realizes from the debtor its full face. The following is a common form of a bankable note:-- $1,000 WILLIAMSTOWN, Mass., Nov. 10, 1889. Three months after date I promise to pay to the order of JOSHUA SWAN, one thousand dollars, payable at the Williamstown National Bank, value received. Due Feb. 10/13. LEANDER ALLEN. When Swan has put his name on the back of this note, that is in bank phrase, has _indorsed_ it, in token that he thereby at once sells and guarantees it to the bank, it is then discounted on the strength of the two _names_, Allen and Swan. As Allen technically takes the advance from the bank for his own benefit, he is technically expected to take up the note when it matures, and if he do not, the bank falls back on Swan, who is equally bound with Allen to see that it is paid at the proper time. Two names are nearly always, not always, requisite to a note acceptable for discount at a bank; and more names merely strengthen the note, since it is discounted on the combined validity of all the names upon it.