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.