( Originally Published Early 1900's )
The question of what travel funds to carry is one which should receive your careful attention.
Carrying currency is decidedly unwise for the same reasons that cautious people do not carry large sums on their persons at home. There is always the possibility of loss or theft and in the case of currency the loss is generally irretrievable.
In place of currency there are two safe means of carrying funds abroad; letters of credit and travel cheques.
Letters of credit are issued by banks and serve as an introduction of the holder to certain specified foreign banks in specified cities. They are an authorization to the banks named to advance the holder money up to the total amount for which they are written. If, for example, you have a letter of credit for $5000 and draw $500.00 on it at a bank in London, that amount is entered on your letter, leaving a balance of $4500, against which you may draw when you again need currency.
The letter of credit is of undoubted advantage to the traveler, particularly if he expects to be away from home for an extended period and needs to have available a fairly large sum of money. It has certain limitations, however. For example, it makes the holder dependent on banking hours and is usually cashable only in the larger centers. They are rarely, if ever, issued for a face amount of less than $500.00 while many banks never recommend them for amounts of less than $1000. An-other possible limitation lies in the fact that foreign banks do not like to bother with smaller drafts against letters of credit.
In any case, the traveler will find it wise to carry part of his funds in the form of travel cheques. For the all-round purposes of the average traveler they are the ideal method of carrying funds abroad. They have all the safety of the letter of credit but are vastly more convenient for daily use.
Travelers cheques can be purchased at your bank. They come in denominations of $10.00, $20.00, $50.00 and $100.00 and are supplied to you in a handy leather wallet of pocket size. Two spaces are provided for your signature on the face of each cheque. You sign in one space when you purchase the cheques; you countersign in the other space when you cash them. The comparison of the two signatures establishes your identity.
The principal advantages of travel cheques are their safety and convenience. If you lose currency you have no redress. But on lost or stolen travel cheques you will get your money back providing you have not countersigned them. They are generally accepted at hotels, ticket offices and shops, as well as at banks, thus making the holder independent of banking hours. They save you the embarrassment of being unable to obtain money on the frequent and often unexpected bank holidays and the trouble of exchanging currencies when going from one country to another.
Travel cheques are issued by some steamship and forwarding companies as well as by individual banks. Obviously, the thing that determines the value of any particular cheque to the average traveler is: how widely is it known and how readily is it cashed.
From my experience the best cheque in those respects is the A.B.A. Cheque of the American Bankers Association. This cheque has other advantages which commend it to the discriminating traveler. It is a certified cheque and only certified cheques may be accepted by American customs officials in lieu of currency. As the official cheque of the American Bankers Association it commands real prestige in all parts of the world and brings the holder unusual courtesies and consideration from foreign banks. It is carefully engraved on special, acid-proof, safety paper and may be said to be completely forgery-proof.
The only inconvenience I have ever suffered with these cheques was once in a little hill town in Spain. They knew the cheque and were perfectly willing to cash it. For some reason, though, the town was practically depleted of paper currency and the entire amount had to be taken in coppers and other small change.
It is well to bear these things in mind in using travel cheques. Do not be surprised if hotels and shops do not give you quite as good a rate of exchange as banks. The former cash them only as a convenience to their clients and as exchange rates sometimes fluctuate quite rapidly, they would often be faced with a considerable loss by the time they turned your cheque in at the bank if they did not guard against it by always paying a little less than the current market rate.
Keep a record of the number of your cheques and strike them off as you cash them. Blanks for that purpose are generally supplied when you purchase them. By so doing you may expedite your refund in case of loss or theft. In case of loss, inform your bank immediately giving, if possible, full details including numbers of uncashed cheques. Never countersign them in advance; do it only in the presence of the person to whom they are offered for encashment. Upon your return, uncashed cheques will be redeemed by your bank.
The cost of travel cheques is a small amount to pay for "care-free money." For A.B.A. Cheques, for example, you pay your bank only 75c for each $100 in addition to the face amount of the cheques.