Starting from the beginning, we may take the case where the foreign department of the Manchester office of one of the joint-stock banks sells to a customer a draft on a foreign country-let us say a draft in kroner on a bank in Stockholm. A number of customers will come in and ask for such drafts, and the bank's balance in Swedish kroner in Stockholm will become exhausted unless replenished. To replenish that balance the branch applies to its head office in London. The London office buys the necessary kroner from a foreign exchange broker

The bill of exchange is in the following form :

No.. . . . . . £100 os. od. Date .....• At ninety days' date pay to our order the sum of one hundred pounds. Value received.