[Illustration: A bill of exchange.]
Nearly all banks keep money on deposit in other banks in large
commercial centres--for instance, in New York or Chicago. They call
these banks their New York or Chicago correspondents. A bank draft is
simply the bank's cheque drawing upon its deposit with some other
bank. (See illustration, p. 245.) Banks sell these cheques to their
customers, and merchants make large use of them in making remittances
from one part of the country to another. These drafts or cashiers'
cheques, as they are sometimes called, pass as cash anywhere within a
reasonable distance of the money centre upon which they are drawn.