to the Orkney Islands
Chapter IV. The Letter of Credit
Persons who are not much
accustomed to travelling, or to doing business for themselves in strange
places, sometimes feel a good deal of solicitude when called upon to act
in such cases, from not knowing beforehand exactly what they are to do.
But there is never any occasion for such solicitude. It is not at all
necessary when you have occasion to go to a bank, or to an office of any
kind, or to a railway-station where a great many different trains are
coming and going, that you should know beforehand what you are to do
when you get there. All that is necessary is that you should simply know
what you want, and that you should be able to state it intelligibly. It
is the business of the clerks, or of the persons in charge of the
establishment, whatever it may be, to show you how the business is to be
done, when you once tell them what it is.
It was about eleven o'clock on Monday morning that Grimkie was to set
out with Mrs. Morelle to go and get the letter of credit.
Florence and John were to go too, as they did not wish to be left at the
hotel, but they were to remain in the carriage while Grimkie and his
aunt went into the office.
Grimkie's father was at the hotel at the time that they set out.
“Now, Grimkie,” paid he, while Mrs. Morelle was putting on her bonnet
and shawl, “do you know where you are going?”
“Yes, sir,” said Grimkie, “you gave me the address of the banker, and I
have got it in my pocket.”
“Very good,” said his father.
“And now do you know how to do the business when you get there?”
“No, sir,” said Grimkie.
“Yery good again,” said his father. “It is not necessary that you should
know how to do the business. It is not your duty to know. It is the duty
of the clerks there to do the business for you. But do you know what the
business is that you wish to have done?”
“Yes, sir,” said Grimkie. “To get a letter of credit.” _
“In whose name?” asked his father.
“Mrs. Jane Morelle’s,” said Grimkie.
“For how much?” asked his father.
“For five hundred pounds,” said Grimkie.
“How long to run?” asked his father.
“For one year" said Grimkie.
“Very good" said his father. “That is ali you want to know. And
remember, in all your travels, that if you have any business to do of
any kind, in any strange place, all that is necessary for you is to know
distinctly what you want, and to be able to state it intelligibly. The
people of the establishment will attend to all the rest.”
“Yes, sir,” said Grrimkie. “I will remember it.”
Mrs. Morelle, who had been standing before the glass putting on her
bonnet and shawl during this conversation, listened to it with much
interest, and she felt great satisfaction and relief in hearing it. She
had very naturally felt some uneasiness and apprehension in setting out
upon such a tour, at the thought of being called upon often, as she knew
she must be, at railway stations, and public offices of various kinds,
to transact business without knowing at all how the business was to be
But if all that is necessary in such places, she said to herself, is
that I should know what I want, and be able to state it intelligibly, I
think I shall get along very well.
In fact, Grimkie's father meant what he said much more for Mrs. Morelle
than for Grimkie. He knew very well that boys of Grimkie's age were not
usually very diffident, or distrustful of themselves, in regard to the
transaction of business of any kind, and that they did not usually stand
in need of any special encouragement.
When Grimkie entered the banking-house where he was to procure the
letter, he was at first somewhat abashed by the scene which presented
itself to view. He saw a very large room with doors opening in various
directions into other rooms, all full of desks, and clerks, and people
going and coming. There was a long counter with high desks, surmounted
by little balustrades rising above it, and open spaces here and there,
where people were receiving money, or delivering papers, or transacting
other business. Grimkie was for a moment quite bewildered, but after a
moment's hesitation he recalled to mind the instructions which he had
received, and he went boldly up to the clerk who was nearest to him and
“I came to see about a letter of credit.”
“Second desk to the right,” said the clerk, pointing with his pen, but
without raising his eyes from his work.
Grimkie, followed by Mrs. Morelle, went in the direction indicated. The
desk was a very large and handsome one, and an elderly gentleman of very
respectable appearance was sitting at it writing a letter. He went on
with his work, but in a moment, glancing his eye at Grrimkie, he said,
“Well, my son?”
“I came to see about a letter of credit,” said Grimkie.
“What name?” asked the gentleman.
“Mrs. Jane Morelle,” replied Grimkie.
“Ah!” said the gentleman, and looking up from his work his eye fell upon
Mrs. Morelle, whom he now for the first time saw. He immediately rose
from his seat and offered Mrs. Morelle a chair.
“It is all arranged about your letter of credit,” said he, as he resumed
his seat, “except to take your signatures. You will only wish to draw in
London and Paris, I understand?”
“Yes, sir,” said Mrs. Morelle. “Mr. Jay thought that that would be all
that we should require.” _
The gentleman then called to a handsome-looking young clerk who was
writing at a desk near by, and asked him if he would be kind enough to
take Mrs. Morelle’s signature. So the clerk conducted her to a table at
a little distance, near a window, where there were writing materials,
and asked her to write her name three or four times, at some little
distance apart, upon a sheet of paper which he gave her. Grimkie
followed his aunt to the table, and the clerk, after having given the
directions, went away and left Mrs. Morelle to write at her leisure.
“I'mm all in a trepidation," said Mrs. Morelle, taking the pen, “and it
won't be written well."
“That will be just right, then, Auntie," said Grimkie, “for you will be
all in a trepidation when you go to draw the money in the foreign
cities, and so the writing will be the same."
Mrs. Morelle smiled, and then proceeded to write her name four times, in
a column on the left hand side of the paper, each signature being at the
distance of two inches from the other.
By the time that she had finished writing, the clerk came and took the
paper. He then said to her that if she would remain seated a few
minutes, he would bring the letter of credit to her.
Accordingly, in a few minutes he returned, bringing with him a letter
folded and enclosed in a very strong envelope. Mrs. Morelle took the
envelope, and then bowing to the clerk, and also to the gentleman at the
desk, she and Grimkie retired.
As soon as they had returned to the hotel, Grimkie was curious to open
the letter of credit and read it. He found that it was a handsomely
printed form, covering one side of a sheet of letter paper, with the
blanks filled up by a pen. It was as follows:
"New York, May 28, 1860.
“Messrs. de Rothschild Brothers, Paris.
“Messrs. N. M. Rothschild and Son, London.
“This letter will be presented to you by Mrs. Jane Morelle, in whose
favor we beg to open a credit with you collectively, for the sum of £500
— say Five Hundred Pounds, to which extent be pleased to furnish
payments in sums as required, without deduction, and against receipts,
inscribing the amounts paid on the reverse of this letter, and
reimbursing yourselves in accordance with our letter of advice,
transmitting receipts at the same time.
“(Signed) Yours, most respectfully,
“August Belmont and Co.
“This credit is in favor for two years from date,
The parts of the letter which are printed in Italics, were in manuscript
in the original. The rest was the printed form. You will observe that
the parts which were in manuscript comprise all those portions of the
letter which would require to be varied for different travellers
applying for letters, while the printed portion consists of what would
be the same for all.
Besides the letter of credit, Grimkie's father recommended to Mrs.
Morelle to take a considerable supply of English gold with her—as much
as she could conveniently carry—to use when she first landed; for she
might desire, he said, to travel about England for a while before going
to London, which was the first place where her letter of credit could be
“Besides," said he, “it is a little cheaper for you to carry gold. The
gold which you buy here and take with you, does not cost quite so much
as that which you obtain there, through your letter of credit; for,
besides being repaid for the actual value of the gold, the bankers
require something for themselves, as their profit on the transaction."
“That's fair," said Grimkie. “But, then why can't we take it all in
gold, and so get it all cheaper?"
“Because then you lose in interest money more than you save," said his
father. “Suppose, for example, a person is going to spend three thousand
dollars in a year, in travelling in Europe — fifteen hundred dollars the
first six months, and fifteen hundred in the second. Now the last
fifteen hundred, if he leaves it at home, well invested, will bring in,
during the first half of the year, say forty or fifty dollars, which
will much more than pay the banker's commission. So it is better for him
to leave it invested, and take it from the banker's when the time comes
for using it. And then, besides, the danger of being robbed is very much
greater in taking a very large sum in gold with you. It is best,
therefore, for you to rely upon your letter of credit, except for what
you require at the outset, and that it is well to take with you in
So it was arranged that Grimkie should go with Mrs. Morelle to a money
broker's in Wall-street, whose address his father gave him, to get some
A money-broker is a man who keeps the different kinds of money of all
the different foreign nations for sale. Merchants, shipmasters,
travellers and other persons coming home from foreign parts, are always
bringing home certain quantities of this money. As it will not pass
current in this country, they usually take it to a money-broker's and
sell it. He pays them for it a little less than its intrinsic value. In
this way he keeps a supply of all kinds of foreign money constantly on
hand, and in passing by his office you often see these coins in the
-window for sale, just as you see books in the window of a bookstore, or
toys in that of a toy-shop, and travellers who wish to visit any foreign
countries, or persons who wish to send money there for any pur pose, go
to these brokers and buy the kind of money which they require though, of
course, they have to pay for it a little more than its intrinsic value,
just as those who brought it into the country were obliged to sell it
for a little less. The difference is the broker's profit.
The coin which Mrs. Morelle wished to buy was sovereigns. The value of
the sovereign is a pound. It is divided into twenty shillings, which are
represented by silver coins of nearly the size of an American quarter of
The sovereign is a gold coin, nearly as large as an American five dollar
piece. There is gold enough in a new sovereign fresh from the mint, to
come to four dollars and eighty-six cents, as determined by the assaying
officers of the United States. The average amount of gold in the
sovereigns in circulation is, however, only four dollars and eighty-four
cents. That is, the new ones have two cents worth of gold in them more
than the average of those in circulation.
How much you have to pay for sovereigns when you go to buy fhem at a
broker's depends upon how many he has in hand, or expects soon to
receive, and upon the demand for them. When a great many sovereigns are
wanted and the supply is not large, of course the price rises, and in a
reverse of circumstances it falls. Grimkie's father told him that
probably he would have to pay four ninety, or four ninety-one for them
on the day when he went with Mrs. Morelle to purchase them.
If, instead of purchasing sovereigns at the broker’s, the traveller
obtains them of the banker’s through a letter of credit, they cost him,
on account of commissions and charges, nearly five dollars apiece.
American travellers, therefore, generally reckon the sovereigns which
they expend in Europe in their travels, and in the purchases which they
make, as so many times five dollars.
On entering the broker's office, Mrs. Morelle and Grimkie at once heard
a great chinking of coin, as people were counting it out, either paying
or receiving it. There was a long counter on one side of the room, with
clerks behind it, and beyond the clerks, against -the wall, were shelves
with boxes of coin, and little heaps of coin, some in piles, and some in
rolls, enveloped in paper. A man, who looked like a seafaring man, was
standing at the counter in one place, with a bag of gold which he had
just opened, and he was now pouring out the coin from it. It was a bag
of doubloons which he had brought from some Spanish country. Near by was
a young man, who was just counting and putting into a bag a quantity of
sovereigns which he had been purchasing. There were various others at
different places along the counter engaged in similar transactions.
Mrs. Morelle had concluded to reserve about seventy-five dollars, for
her expenses in going to Boston, and to invest all the rest of the money
which she had with her in sovereigns. But Grimkie, who seemed to want to
get hold of as many sovereigns as possible, said to her as they were
coming in the carriage toward the office that he thought that
seventy-five dollars was more than would be necessary to take them to
Boston. But she said that possibly some accident might happen which
would lead to extra expense, and it was always best to have enough.
“And then if I have anything left over," said she, “we can purchase
sovereigns with it in Boston, the morning before we sail."
Accordingly Grimkie, holding in his hands eight bills of a hundred
dollars each, went with Mrs. Morelle to a vacant place at the counter,
and said that he wished to buy some sovereigns, and asked the price.
“How many will you want?” asked the clerk.
“About a hundred and sixty,” said Grimkie. He had previously made a
calculation that he could have rather more than a hundred and sixty for
the eight hundred dollars.
“I have got eight hundred dollars here,” said Grimkie, “which I wish to
change into sovereigns.”
“We can let you have them for four ninety,” said the clerk.
Then taking a little slip of paper and a pencil he made a calculation,
and presently said,
“You can have a hundred and sixty-three sovereigns, and a little over,
for the eight hundred dollars.”
“How much will one hundred and sixty-five cost?” asked Mrs. Morelle.
The clerk, after figuring a little more on his paper, said that they
would come to eight hundred and eight dollars and fifty cents exactly.
“Then let us take a hundred and sixty-five,” said Mrs. Morelle, “and I
will pay the eight dollars fifty.” .
So Mrs. Morelle took eight dollars and fifty cents from her purse, and
put it with the eight hundred dollars, and Grimkie gave the whole to the
clerk. He counted it and put it away, and then proceeded to count out
the sovereigns, laying them in piles, as he counted them, of fifty each.
“Would you like a bag to put them in?” asked the clerk.
Grimkie said he would like one very much.
So the clerk gave him a small, brown linen bag, large enough to contain
the coin. While Grimkie was putting the money into the bag, it occurred
to him that perhaps it would be well to have a little English silver.
“We shall also have need of a little change, Auntie,” said he, “when we
first land, for the porters or the cabmen.”
“I can give you silver for one of the sovereigns,” said the clerk, “if
So Grimkie gave back one of the sovereigns to the clerk, and the clerk
in lieu of it counted out twenty silver coins not quite so large as a
quarter of a dollar. He left them on the counter for Grimkie to count
over after him, and began to attend to another customer.
“That's right, Auntie,”said Grimkie: “twenty is right. Twelve pence make
a shilling; twenty shillings make a pound.”
Grimkie wrapped up the twenty shillings in a piece of paper, and put
them into the mouth of his bag, and then putting the bag in his pocket,
he assisted Mrs. Morelle into the carriage, and after getting in
himself, he ordered the coachman to drive to the hotel.
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