Long exchange for the most part has its origm in merchandise
exports. When an American merchant sells a bill of goods to a
British importer, it is usually with the understanding that he
draw on the importer (or his bank) a long bill of exchange, pay-
able in London, for the invoice value of the merchandise. The
bill is generally made out to mature a specified time "after sight,"
that is, after it has been sent across and been presented to the im-
porter and he has agreed to pay it by writing across its face the
word "Accepted" over his signature. The exact period for which
the bill is drawn in any particular case depends on the length of
the credit the American exporter is extending to his customer, i^
The terms are usually such as to allow the foreign importer ample

86



LONG EXCHANGE 87

time in which to receive and perhaps even to dispose of the
goods before the draft matures. But while the shipper thus ad-
vances credit, he is by no means obliged to wait for his money
returns until the maturity of the bill, as he can reimburse himself
immediately, or at any time during the life of the bill, by selling
or discounting it either in New York or London.
