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export trade. Much propaganda was issued to that effect, but this was 

not really the story.

The open-book system, heretofore used entirely by American business 

people, allowed a discount for cash. The acceptance system 

discourages the use of cash, by allowing a discount for credit. The 

open-book system also allowed much easier terms of payment, with 

liberal extensions on the debt. The acceptance does not allow this, 

since it is

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a short-term credit with the time-date stamped upon it. It is out of the 

seller’s hands, and in the hands of a bank, usually an acceptance 

bank, which does not allow any extension of time. Thus, the adoption 

of acceptances by American businessmen during the 1920’s greatly 

facilitated the domination and swallowing up of small business into 

huge trusts, which accelerated the crash of 1929.

Trade acceptances had been used to some extent in the United 

States  before  the  Civil  War.  During  that  war,  exigencies  of  trade  had 

destroyed the acceptance as a credit medium, and it had not come 

back into favor in this country, our people preferring the simplicity and 

generosity of the open-book system. Open-book accounts are a 

single-name commercial paper, bearing only the name of the debtor. 

Acceptances are two-name paper, bearing the name of the debtor 

and the creditor. Thus they became commodities to be bought and 

sold by banks. To the creditor, under the open-book system, the debt is 

a liability. To the acceptance bank holding an acceptance, the debt 

is an asset. The men who set up acceptance banks in this country, 

under the leadership of Paul Warburg, secured control of the billions of