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Payment Systems New Edition

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 1. Not negotiable by agreement alone
2. May be treated as negotiable
3. Writing "not negotiable" defeats negotiability

CHAPTER 2
Holder-in-Due-Course Status and Available Claims, Defenses, Claims in Recoupment, and
Discharg es
I. Introduction
A. Holder-in-due-course status
B. General requirements for holder-in-due-course status
II. Holder Status
A. Introduction
B. Holder need not own instrument
C. Requirements for holder status
D. Ways of acquiring holder status
1. Issuance of instrument
2. Negotiation of instrument
E. Obligation must run to possessor
F. Indorsement
1. Types of indorsements
2. Indorsement must be written on instrument
3. Manner of negotiation depends on last indorsement
4. To whom an instrument is payable
5. When payable to account number
6. Payable to agent for identified person
7. Payable to office or officer
8. Payable to fund or organization
9. Payable to trust or estate
10. Other words of description
11. Two or more payees
G. Depositary bank's status as holder
1. No indorsement necessary
2. Customer liable as indorser
3. Depositary bank's warranty
4. Delivered for collection
III. Value
A. Issued or transferred for value
B. Consideration vs. value
C. Promise of performance as value
 D. Value to the extent performed
1. Formula when partial performance by holder
E. Security interest in instrument as value
1. Security interest in instrument
2. Lien on instrument
3. Value only to extent of amount owed
F. Payment or security for antecedent debt as value
G. Negotiable instrument or irrevocable obligation as value
H. Taking for value by collecting bank
1. Manner of acquiring a security interest
2. U.C.C. §4-210 not exclusive
3. To extent credit given has been withdrawn or applied
4. Applies to debt of customer
5. Withdrawal as a matter of right
6. Makes advance against item
7. Simultaneous deposits
8. Order withdrawn when deposits not simultaneous
IV. Good Faith
A. Definition
B. Subjective element
C. Objective element
V. Notice
A. Notice of infirmities
B. Notice need not relate to defense or claim raised
C. When notice effective
D. Effect of subsequent notice
E. When notice imputed to organization
1. Organization
2. Due diligence
F. Manner of obtaining notice
1. Actual knowledge
2. Notification
3. Reason to know
G. Notice of claim or defense
1. Notice not obtained from public filing
2. Notice not obtained from executory promise
3. Notice from defenses from other transactions
 4. Purchase at a discount
5. Notice of breach of fiduciary duty
6. Notice that an instrument is forged, altered, or otherwise
irregular
7. Notice that instrument is overdue or has been dishonored
8. Notice of discharge
VI. Denial of Holder-in-Due-Course Status to Certain Classes of Purchasers
A. Introduction
B. Acquisition by taking over estate
C. Purchase in execution, bankruptcy, or creditor's sale
D. Purchase in bulk transaction
1. Liquidation sale
2. Organizational change
E. Consumer notes
1. Definitions under FTC rule
2. FTC rule
3. State legislation
4. 2002 amendments and consumer transactions
VII. Defenses, Claims to the Instrument, Claims in Recoupment, and Discharges
A. Introduction
B. Defenses and claims in recoupment to which all persons take
subject
1. Defenses and claims in recoupment assertible against holder
itself
2. Real defenses
C. Defenses available only against a person without the rights of a
holder in due course
1. Ordinary defenses
2. Claims in recoupment
3. Defenses and claims in recoupment of other persons
4. Claims to the instrument
D. Discharges
1. Effect of discharge
2. Discharge by payment
3. Discharge by tender of payment
4. Discharge by cancellation or renunciation
5. Discharge of simple contract
VIII. Admissibility of Evidence Extrinsic to the Instrument
 A. Introduction
B. Agreement as defense
C. Same transaction
D. The parol evidence rule
1. Consistent additional terms admissible
2. Conditions precedent
3. Sham
4. Special purpose or conditional delivery
5. Defenses
6. Ambiguities
IX. Transfer of Instrument and Shelter Provision
A. Introduction
B. What is a transfer?
1. No transfer until delivery
2. Intent to vest rights in transferee
C. Right to transferor's indorsement
D. The shelter provision
1. Transferee acquires rights of holder in due course
2. Same rights as transferor
3. Exceptions to shelter provision
E. Reacquisition by prior holder
1. Reacquisition by negotiation
2. Reacquisition by transfer
X. Defenses and Claims to Bank Checks
A. Introduction
B. Rules not applicable if bank uses bank check
C. Terminology
D. Rules governing obligated bank's right to refuse payment on a
bank check
1. Penalty for wrongfully refusing to pay
2. Consequential damages
3. Bank's defenses to liability for expenses and consequential
damages
4. Third-party claims
XI. Federal Holder-in-Due-Course Status
A. Introduction
B. Federal law governs
 C. Federal holder-in-due-course doctrine
D. D'Oench, Duhme doctrine

CHAPTER 3
Nature of Liability on Instruments
I. Liability of Issuer, Drawer, Acceptor, and Indorser
A. Introduction
B. Obligation of issuer of note or cashier's check
C. Obligation of drawer
1. Effect of acceptance
2. Disclaimer of liability
D. Obligation of drawee
E. The obligation of an acceptor
1. Acceptance vs. payment
2. Manner of acceptance
F. Obligation of indorser
1. What is an indorser?
2. Two purposes of indorsement
3. To whom obligation owed
4. Indorsement without recourse
5. Dishonor and notice of dishonor required
6. Discharge if presentment on check delayed
7. Liable in any order
II. Presentment, Dishonor, Notice of Dishonor
A. Dishonor
B. Presentment
1. Manner and time of presentment
2. Where presentment can be made
3. Rights of party to whom presentment is made
4. Effect of delay in presentment
5. When presentment excused
C. Dishonor
1. Dishonor of demand note
2. Dishonor of note not payable on demand
3. Dishonor of check
4. Dishonor of other demand draft
5. Dishonor of draft not payable on demand
6. Dishonor of accepted draft
 D. Notice of dishonor
1. Time within which notice of dishonor must be given
2. When delay in notice of dishonor excused
3. When notice of dishonor excused
III. Transfer Warranties
A. Creating transfer warranties
B. Who makes the transfer warranties
C. To whom transfer warranties are made
D. Content of transfer warranties
1. Warranty that transferor is a person entitled to enforce the
instrument
2. Warranty that all signatures are authentic and authorized
3. Warranty of no alteration
4. Warranty that transferor not subject to any defense or claim in
recoupment
5. Warranty of no knowledge of insolvency proceedings
6. 2002 amendments
IV. Sureties and Accommodation Parties
A. Introduction
B. What is an accommodation party?
1. Both surety and debtor must sign instrument
2. When both do not sign same instrument
3. Collection guaranteed
4. Accommodation party cannot receive direct benefit from
instrument
5. Accommodation party liable in capacity in which she signs
6. 2002 amendments
C. Relationship between accommodation and accommodated parties
1. Right of reimbursement
2. Right of subrogation
3. 2002 amendments
D. Relationship between accommodation parties
1. Right of contribution
2. Subsuretyship
E. Defenses available to accommodation party
1. May not raise lack of consideration
2. Right of accommodation party to raise accommodated party's
defenses
 F. Discharge of indorsers and accommodation parties (suretyship
defenses)
1. Suretyship defenses
2. Limited to accommodation parties and indorsers
3. Release of principal obligor
4. Extensions and modifications
5. Extensions—extent of discharge
6. Modifications—extent of discharge
7. Consent and waiver
8. Impairment of collateral
9. When is collateral impaired?
10. Extent of discharge for impairment of collateral
11. Consent to impairment of collateral
V. Liability of Agents, Principals, and Co-Obligors
A. Represented person and representative
B. Liability of represented person
1. Types of authority
2. Manner of signing
C. Liability of representative
1. Unauthorized signature
2. Authorized signature
D. Liability of persons signing in the same capacity in the same
transaction
1. Right of contribution
2. Liability of indorsers
VI. Effect of Taking Instrument on the Underlying Obligation
A. Introduction
B. Ordinary instruments
1. Obligation suspended
2. Effect of dishonor
3. Effect of discharge
C. Bank checks
1. Only bank liable
2. Party liable if indorses
D. Taking instrument for underlying obligation
VII. Accord and Satisfaction by Use of Instrument
A. Introduction
B. Good faith required
 C. Debtor discharged even if language stricken
D. Exception for lockbox accounts
E. Exception for returning payment
F. Limitation on exceptions
VIII. Procedural Issues Involving Negotiable Instruments
A. Procedural differences for actions on negotiable instruments
B. Persons entitled to enforce instrument
1. Rights of a holder
2. Owner of lost instrument
3. Person from whom payment recovered
C. Burden of proof in negotiable instruments cases
1. Exception to producing instrument
2. Proving signatures
3. Burden on obligor to prove defense
4. After defense proved, duty of plaintiff to prove holder-in-due-
course status
IX. Enforcement of Lost, Destroyed, or Stolen Instruments
A. Lost, destroyed, or stolen ordinary instruments
1. Adequate protection
2. Right to recover on instrument only
3. What claimant must prove
B. Lost, destroyed, or stolen bank checks
1. Who may use U.C.C. §3-312
2. Manner of asserting claim
3. When claim is effective
4. Bank discharged by payment to claimant

CHAPTER 4
Forg ery, Alteration, and Other Fraudulent Activity
I. Unauthorized Signatures
A. Introduction
B. Two consequences of unauthorized signature
C. Person whose name is signed not liable
1. Unauthorized signer liable
2. Loss shifted
D. Effect of forged indorsement in chain of title
1. Person whose signature forged still owner
2. Different result if precluded
 E. Transfer warranties
1. Person entitled to enforce instrument
2. All signatures are authentic
3. 2002 amendments
F. Presentment warranties
1. Persons who make presentment warranties
2. To whom presentment warranties are made
3. Warranties made to drawee of unaccepted draft
4. 2002 amendments
5. Warranties made to other payors
G. Recovery by payor of payment made by mistake
1. Typical mistakes
2. Protected persons under U.C.C. §3-418
3. Consequences when payment is recovered
H. Conversion
1. When taking by transfer constitutes conversion
2. When payment constitutes conversion
3. When taking instrument by agent is conversion
4. Taking instrument for collection
5. Who may bring an action for conversion?
6. Defenses to conversion action
7. Measure of damages for conversion
8. Statute of limitations for conversion
I. Application of rules when signature of maker or acceptor
unauthorized
1. When payment not made
2. When payment made
J. Application of rules when signature of drawer unauthorized
1. When drawee makes payment
2. When drawee does not make payment
3. 2002 amendments
K. Application of rules when indorsement is unauthorized
1. Allocation of loss when check not delivered to payee
2. Allocation of loss after delivery to payee
II. Alterations and Incomplete Instruments
A. What is an alteration?
B. Allocation of loss in case of alteration
 1. Preclusion to assert alteration
2. Payment by drawee
3. When drawer, maker, or acceptor pays
4. When instrument not paid
C. Discharge of party whose obligation is affected
1. Against whom discharge effective
2. Alteration must be fraudulent
D. Incomplete instruments
1. When completion authorized
2. When completion unauthorized
III. Grounds of Preclusion
A. Introduction
B. Ratification
C. Estoppel
D. Preclusion through negligence
1. Who may assert the preclusion?
2. Comparative negligence
3. Failure to exercise ordinary care
4. Substantially contributes
E. Impostors, fictitious payees, and employer's responsibility for
unauthorized indorsements by employees
1. The impostor rule
2. Fictitious payee rule
3. Employer's responsibility for fraudulent indorsement by
employee
F. Customer's duty to review bank statement
1. Applies to items
2. No duty of bank to send statement of account to customer
3. If bank sends statement of account
4. Customer's duty to examine bank statement
5. Duty of bank to prove loss
6. Forgery or alteration by same wrongdoer
7. Good faith and comparative negligence
8. 1-year preclusion
9. Duty of payor bank to raise defense
IV. Restrictive Indorsements
A. Definition
B. Types of restrictive indorsements
 1. For deposit
2. Trust indorsement
C. Does not limit right to negotiate
D. Effect of "for deposit only" indorsement
1. Payor and intermediary banks exempted
2. Depositary bank liable for conversion
3. Nonbank
E. Effect of trust indorsement
1. When taker deals directly with fiduciary
2. When taker does not deal directly with fiduciary

CHAPTER 5
Payor Bank/Customer Relationship
I. When Item Properly Payable
A. Introduction
B. Items creating overdrafts
C. Postdated checks
1. Same procedure as stop payment order
2. Same damages as for payment over stop payment order
D. Bank not obligated to pay stale checks
1. Bank has option to pay
2. Drawer remains liable
E. Bank's right of set-off
1. Account must belong to customer
2. Debts must be matured
3. Notice not required
4. Limitations on consumer debts
F. Death or incompetence of customer
1. Effect of incompetence
2. Effect of death
II. Variation by Agreement
A. Introduction
B. Limitations on agreements
C. Contracts of adhesion
1. Customer's actual knowledge relevant
2. Against public policy
3. Agreements may limit customers' rights
III. Wrongful Dishonor
 A. Introduction
B. Pivotal issue is whether sufficient funds in account
1. Bank may pay checks in any order
2. Time for determining whether sufficient funds exist
C. Duty owed only to customer
1. Payee and other holders
2. Corporate officers or partners not customers
D. Damages
1. Loss of profits
2. Damage to reputation
3. Emotional distress damages
4. Punitive damages
IV. Customer's Right to Stop Payment
A. Introduction
B. Closed accounts
C. More than one customer
D. Payable from customer's account
E. Effect of stop payment order
F. Requirements for stop payment order
1. Adequate description of item
2. Oral or written
G. Timeliness of stop payment order, legal process, notice, and set-
off
1. Test for determining when stop payment order or other legals
come too late
2. Effect of stop payment order or other legal arriving on time
3. Effect of stop payment order or other legal arriving too late
H. Damages for payment in violation of stop payment order
1. Measure of damages
2. Damages also include wrongful dishonor of subsequent items
I. Payor bank's right of subrogation on improper payment
1. What constitutes improper payment
2. Payor bank subrogated to other parties' rights against drawer
3. Payor bank subrogated to drawer's rights
V. Funds Availability Under Regulation CC
A. Introduction
B. Regulation CC
 1. Mandatory funds availability schedule
2. Next-day availability
3. Second-day and fifth-day availability
4. Extensions of mandatory availability schedule
C. Availability under Article 4

CHAPTER 6
The Bank Collection Process
I. Introduction to the Check Collection Process
A. Introduction
B. Bank
C. Branch banking
D. Types of banks under Article 4
1. Payor bank
2. Depositary bank
3. Collecting bank
4. Intermediary bank
5. Presenting bank
E. Types of banks under Regulation CC
1. Paying bank
2. Returning bank
F. Clearinghouses
II. Law Governing the Check Collection Process
A. Introduction
III. Variation by Agreement
A. Introduction
B. Limitations
C. Binding on customer
D. Clearinghouse rules
IV. Duties of Payor Bank
A. Introduction
B. Duty to pay or settle on day of presentment
1. Exception for immediate payment over the counter
2. Exception for on-us checks
3. Failure to settle for demand item on day of receipt
4. Means of dishonoring item
5. Manner of payment
6. Failure to settle or timely return of item
 7. Payor bank's liability on documentary drafts and items not
payable on demand
8. Final payment
9. Duties of paying banks under Regulation CC in returning unpaid
items
V. Duties of Collecting Banks
A. Introduction
B. Collecting bank's status as agent
1. Intermediary and presenting banks
2. Termination of agency status
C. Right of chargeback
1. Right to refund
2. Even if collecting bank negligent
3. Requirements for chargeback
4. Consequences of failing to meet requirements
D. Duty of collecting bank to use ordinary care in collecting and
returning items
1. Acting reasonably
2. Delay excused
3. Liable only for own negligence
4. Measure of damages for failure to exercise ordinary care
5. Electronic presentment
E. Encoding warranties
1. Liability for misencoding

CHAPTER 7
Wholesale Funds Transfers
I. What is a Funds Transfer?
A. Definition of funds transfer
B. Terminology of funds transfers
1. Sender
2. Customer
3. Receiving bank
4. Beneficiary
5. Beneficiary's bank
6. Payment order
7. Originator
8. Originator's bank
 C. What is a funds transfer
1. Includes all payment orders
2. One-bank funds transfer
3. Intermediary bank
D. Funds transfers must be between banks
E. Requirements for a payment order
1. Unconditional
2. Reimbursed by sender
3. Transmitted directly to receiving bank
F. Consumer transactions excluded
II. Payment Obligations in Chain of Title
A. Introduction
III. Duties and Liabilities of Receiving Bank
A. Introduction
B. Rejection
C. Execution of order
1. Execution date
2. Payment date
3. Duty to issue payment order
4. Time when payment order can be accepted
5. Damages for breach of duty by receiving bank
D. Erroneous execution of payment order
1. Duplicative order, order in greater amount than authorized, or
to wrong beneficiary
2. Payment in a lesser amount
3. Duty of sender on receipt of notification of error
IV. Duties of Beneficiary's Bank
A. Overview
B. Manner in which beneficiary's bank accepts payment order
1. Payment
2. Acceptance by notification
3. Acceptance by receipt of payment
4. By inaction
C. Rejection of payment order
1. Time within which rejection must occur
2. No rejection after acceptance
D. Liability for failure to make prompt payment
E. Duty to notify beneficiary
V. Effect of Acceptance on Underlying Obligation
A. When payment is accomplished
VI. Cancellation (Stopping Payment) of Payment Order
A. Introduction
B. Effect of cancellation
C. Right to cancel unaccepted orders
1. Manner of cancellation
2. Cancellation by operation of law
D. Cancellation of order accepted by receiving bank
E. Cancellation of order after acceptance by beneficiary's bank
VII. Liability for Authorized Payment Orders
A. Introduction
VIII. Liability for Unauthorized Payment Orders
A. Introduction
B. Security procedure
C. Requirements for sender's liability for verified payment orders
1. First step
2. Second step
D. Summary of when loss falls on bank
E. Contrary agreement prohibited
F. Duty of customer on receipt of notification of error
IX. Erroneous Payment Orders
A. Introduction
B. Allocation of loss when no security procedure in place
C. Allocation of loss when security procedure in place
D. Sender's duty on receipt of notice of acceptance
X. Misdescriptions
A. Introduction
B. Nonexistent or unidentifiable person or account
C. When beneficiary identified by both name and number
D. Misdescription of intermediary bank or beneficiary's bank
1. Identification by number only
2. Conflict between name and number
XI. Injunction
A. Generally

CHAPTER 8
Consumer Electronic Fund Transfers
I. Law Governing Consumer Electronic Fund Transfers
 A. Introduction
II. What is an Electronic Fund Transfer?
A. Introduction
B. Typical electronic fund transfers
C. How initiated
III. Consumer's Liability for Unauthorized Transfers
A. Introduction
B. What is an unauthorized fund transfer?
1. No longer authorized after notification
2. Obtained through robbery or fraud
C. Conditions to consumer's liability for unauthorized fund
transfers
1. Transfer through accepted access device
2. Means to identify consumer
3. Disclosures
D. Limitation of consumer liability
E. Failure to report loss of device
F. Failure to report unauthorized transfers on periodic statement
G. Combination of failure to report lost device and failure to report
unauthorized transfers
IV. Stopping Payment of Electronic Fund Transfers
A. Introduction
B. No right to reverse ordinary fund transfer
1. EFTA
2. State law
C. Stopping payment on preauthorized electronic fund transfers
1. Manner of stopping payment
2. Damages for failing to stop preauthorized fund transfer
V. Consumer Liability to Third Parties in the Event of System Malfunction
A. Introduction
VI. Restrictions on Issuance of Access Devices
A. Introduction
VII. Special Rules for Preauthorized Transfers
A. Introduction
B. Transfers to consumer's account
1. Notice that transfer made
2. Notice that transfer not made
3. Readily available telephone line
 C. Transfers from consumer's account
VIII. Documentation Requirements
A. Introduction
B. Receipts at electronic terminals
C. Periodic statements
IX. Error Resolution Procedures
A. Introduction
B. What is an "error"?
C. Notice of error
D. Bank's duty to investigate
1. Does not recredit
2. Recredits
E. After the bank makes its determination
X. Liability for Failing to Make Correct Fund Transfer
A. Introduction
XI. Civil Liability
A. Enforcement actions provided by EFTA
B. Individual consumers
C. Class actions
D. Treble damages
E. Defenses to liability
1. Bona fide error
2. Offers to pay damages

CHAPTER 9
Lender Credit Cards
I. Terminology in Credit Card Transactions
A. Introduction
II. Law Governing Credit Card Transactions
A. Introduction
B. Federal law
1. Primarily consumer protection
2. Other law
III. Liability for Unauthorized Use
A. Introduction
B. Conditions to liability
1. Accepted card
2. Disclosures
Another random document with
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 TOM REYNOLDS AND MORIYAMA.

“Fun,” exclaimed Tom Reynolds, “You couldn’t have more fun than
I had. No boy could stand it.”
This was said to a boy-friend after Tom had come home from
Japan.
And Tom was right. He had had a splendid time.
Tom Reynolds was an American boy, whose father was engaged
in business which made it necessary for him to visit Yokohama in
Japan. It is probable that he would not have thought of taking Tom
with him on this trip if it had not been for Moriyama. This yellow
youth put the idea into Tom’s head, and Tom, who was as good a
talker as he was a walker, which is saying a great deal, managed to
convince his father that nothing would be of as great advantage to
him as a journey to Japan.
School was nothing to a trip like this, Tom argued, and he argued
so much that the end of it was he went to Japan.
Moriyama was a Japanese boy, and a first-rate fellow. He was one
of the many Japanese youths who came to America to be educated,
and he went to Tom’s school.
There these two boys became great friends. Moriyama was a very
quick, bright youth. He could speak English very well, and he was
rather better at English grammar than most of the other fellows in
that school. The other fellows explained this by saying that Moriyama
didn’t know anything about our grammar except what he had learned
from books, and of course the books were right. But they had
learned their grammar from all sorts of people, ever since they were
little bits of chaps. And so they had learned all sorts of grammar, and
had a good deal to unlearn when they came to the school.
But the fact was that Moriyama was as thoroughly in earnest about
his studies as most boys are about base-ball. So it was no wonder
that he succeeded.
He was not a large boy nor was he very young. As Tom put it, he
was a good deal smaller than he was young. There were plenty of
fellows in the school who could have whipped him, if they had
wanted to, but they didn’t want to, for two reasons. He was a quiet,
obliging boy, who seldom offended any one, and if any one had tried
to whip him they would first have had to whip Tom Reynolds, which
was no easy job. Tom had a fist as heavy as one end of a dumb-bell,
and the muscles on his arms swelled up a good deal like the other
end of a dumb-bell.

FUSI-YAMA.
Moriyama’s time at school was up, and he had to go to Japan.
Tom’s time wasn’t up, but he promised to study ever so hard when
he came back—with his mind improved by travel—and so the three
of them, Tom, Tom’s father, and Moriyama, sailed for Yokohama.
This story will not be long enough for me to tell anything about the
journey—how they sailed from New York to Aspinwall, and went
across the Isthmus of Panama by railroad, and then took another
steamship and crossed the Pacific Ocean; and how, at last they
steamed up the bay of Yedo, and saw towering up to the sky, the
great extinct volcano, Fusi-yama, the sacred mountain of Japan.
I cannot even tell about their landing at Yokohama, nor even very
much about Tom’s adventures in Japan, but I can give you some of
his experiences, and if you ever meet him, he can tell you the rest.
And he will be very apt to do it, too, if you are the right kind of a boy
or girl, for Tom is a great talker, and very sociable.
When they arrived at Yokohama Tom’s father took lodgings for
himself and his son at the house of an American merchant in the
town, but Moriyama went into the country where his family lived.
Of course it was very natural that he should want to see his father
and mother, and brothers and sisters, but Tom could not help feeling
sorry about it. It would have been such a capital thing to have had
Moriyama to take him around at the very beginning of his visit, and
tell him about all the curious things he saw.
But Tom had to do his sight-seeing pretty much by himself, at first,
for his father was very busy, and the Americans that he met did not
have much time to go about with a boy.
But Tom was not a bad fellow to take care of himself, and as his
father engaged for him a horse and a betto, as a man who attends
horses in Japan is called, he had every opportunity of going about as
much as he wanted to.
When Tom’s horse was brought out for him the first time there
were two bettos in attendance. One of them had clothes enough on,
but the other one looked as if he were just ready to take a swim.
 JAPANESE BETTOS.
This fellow was the one who accompanied Tom wherever he went.
He was a good-natured man and very ready to talk, and if Tom could
have understood a word he said, he might have been very
interesting.
But they got along capitally together, and Tom rode about
Yokohama all day, and came home at night, and asked questions of
his father. In this way he got some information about the things he
had seen, but in many cases he had to make up theories of his own
about things. And some very curious theories he made.
There was a porter who had a lodge at the door of the house
where they lived, and he used to strike on a gong every time any one
entered. Sometimes he struck once, and sometimes two or three
times, and Tom could not imagine what he did it for. He might have
asked his father about this, but he made up his mind that he would
find it out for himself.
You must not suppose that Tom’s father was not a good-natured
man, or that he objected to giving information to his son. But the
truth was that Mr. Reynolds was not only very busy all day, and very
often at night, with his merchant friends, but he did not know a great
deal about Japanese life himself.
As soon as he had got through with the most pressing part of his
business, he intended to go about and see Japan. He had never
been there before.
At first Tom thought that when he heard one crack on the gong it
meant that that was the first time he had come in. But when he heard
only one stroke the second and the third time, while some other
people got two taps the first time they came, he knew that this must
be a mistake.
Before he found out what these taps really meant Moriyama
returned to town. Tom greeted him heartily enough, and as they went
into the house together that morning the porter struck, first two taps,
then one.
“What is that banging for?” cried Tom. “I’ve been trying to find out
ever so long, but it’s too much for me.”
“Why two taps are for me and one is for you,” said Moriyama.
“How’s that?”
“He taps once for a citizen or a merchant,” said Moriyama, “and
twice for an officer or an interpreter—I didn’t tell you I had been
appointed an interpreter since I returned—and for a governor or a
consul he’d strike three times, and four times for an admiral or higher
officer.”
“Once for me and twice for you,” said Tom. “What a fool the man
must be!”
“He does what he has to do, according to our laws,” said
Moriyama.
“But anybody ought to know better than that,” cried Tom. “Look
here! I’m going to talk to him and then you can interpret what I say,
Mr. Two-taps.”
So Tom stepped up to the porter and remarked:
“I say old shaven head——how many bangs would he give for the
Prince of Wales, Moriyama?”
“Four, I think.”
“Well then, old fellow, princes belong to the set that they take kings
from, and I belong to the set that they take presidents from, and so
we’re even, and I want you to pound four times every time I come in
the house. Do you hear that? Tell him it, upside down, Moriyama.”
Moriyama, who was laughing at this speech, said something to the
porter in Japanese, but I do not think that he translated Tom’s words.
But Tom never got but one bang when he came in, though he used
to shake his fist at the porter every time he heard it.
Moriyama was very anxious that Tom should visit Yedo with him,
and so after a few days spent in further sight-seeing in Yokohama,
the two friends set off for the metropolis of Japan.
 ENTRANCE TO A JAPANESE TAVERN.

They traveled on horseback accompanied by their bettos and

other servants. They rode along the Tokaido, or great highway of
Japan, and they were by no means the only travelers, for the road
was crowded with foot passengers, men on horseback, and people
in palanquins. The whole road was one lively scene, and to Tom it
was a very interesting one. And the best of it was, that there was
nothing, no matter how curious or outlandish, that Moriyama could
not explain to him.
 They stopped on the way at a tavern, which was rather different
from anything of the kind that Tom had ever imagined.
When they reached the door they found a group of three or four
persons examining the goods of a man who seemed to be a peddler.
He was very anxious that his goods—and he did not seem to have
many of them—should be appreciated, and the bystanders were
quietly and earnestly listening to what he had to say.
But no one took notice of the newly arrived party.
After a little while, the landlord made his appearance, and though
he seemed glad to see them, and brought them a few eggs and
some other trifling refreshments, he soon went away again, and they
saw no more of him until several hours later when they took their
leave.
But their own servants cooked them a good dinner of things they
had with them, and seemed to make themselves perfectly at home in
the household of the tavern.
Tom said it was a good deal like working your passage on a ship,
but Moriyama could see no objection to it. He was sure, he said, that
he would rather be waited on by his own servants than by any one
likely to be found at a roadside tavern, and he was sure their own
provisions were better than anything likely to be found there.
This was all true enough, but Tom could not help thinking what a
row would be kicked up in an American tavern, no matter how small
and mean it might be, if the guests brought their own provisions, and
cooked them in the tavern kitchen.
They stopped at other places, at one tea-house in particular,
where there were plenty of waiters, plenty of guests, and a very
great plenty of tea.
They were two days on the road, although the distance was only
about thirty miles.
It is impossible to tell one half that these two boys did and saw in
Yedo.
 They saw all sorts of shops, with curious signs, tea-houses
thronged with customers; people at work at various trades—in
workshops that were entirely exposed to the view of passers-by, and
almost everything arranged in a different way from what Tom thought
was right and proper.

JAPANESE BLACKSMITHS.
Here were a couple of blacksmiths with scarcely a stitch of clothes
on, sitting down to their work, and one of them blowing the bellows
with his heel.
 LITTLE JUGGLERS IN STREETS OF YEDO.
Then they came upon a troupe of boy-jugglers directed by a man
who sang horribly sounding words in a rasping voice, while he
played upon a tambourine with two drum-sticks.
The boys’ heads were stuck into bags surmounted by hideous
masks, and as they twisted themselves into all sorts of distorted
positions, one of them standing on his hands on the stomach of
another, who leaned backwards until his hands touched the ground,
Tom thought they would certainly dislocate their spines.
He had turned many a handspring, and was quite expert on the
horizontal bar at the gymnasium, but he never saw such body-
twisting as this.
He would have watched these boys as long as they chose to
perform, if Moriyama had not forced him away to look at other things.
 They visited the parade ground,
where they saw the soldiers drilling
and practising with swords and
muskets. The Japanese soldiers
now use firearms, but they still carry
one or two of their old-fashioned
swords, and when they are in full
costume they wear paper hats.
Some of the fencing was very
interesting to Tom. He had fenced a
little at home, himself, but this
vigorous work with swords was new
to him.

JAPANESE SOLDIER.
 NOON SCENE ON A JAPANESE CANAL.
The weather was quite warm during Tom’s visit to Yedo, and about
the middle of the day the streets—especially the canals which take
the place of streets, presented a very peculiar scene. Scarcely a soul
was visible. Empty boats were fastened all along the shores, and all
the houses, glistening in the hot sun, seemed as if they had been
deserted. Not a sound was to be heard; and it was but very seldom
that a moving thing was to be seen.
It was very much, as Tom said, like the enchanted city in the
Arabian Nights, where all the inhabitants were changed into stone.
“But if you were to go poking about into some of those houses,”
said Moriyama, “you’d soon find that these people are not changed
into stone.”
Here and there the boys could see, between the screens that
stood at the entrances of the houses, the people inside eating their
dinners. The straw table-cloth—if there can be such a thing where
there is no table—was always spread upon the floor, and the family
sat around it eating rice. Sometimes they had meat or fish and
vegetables, but Moriyama said their principal food was rice. And
from the way they were eating it, they seemed to like it.
One night the boys went out on one of the many bridges in the
city, and saw hundreds of small boats cruising about in all directions,
with different colored lanterns hung about them; and besides these
there were rafts from which fireworks were continually set off. The
scene was charming, and Tom would have enjoyed it thoroughly had
it not been for the music. This was so unearthly and hideous that
poor Tom would have put his fingers in his ears had he not been
afraid of offending the people around him.
But before he left Japan he became used to this music, and
sometimes even fancied that he could make out some kind of a tune
from the curious sounds of the samsins and the gottos, which are
Japanese guitars and harps.
One day the boys saw a very jolly sort of a game which Tom
determined to introduce in his school when he returned to the United
States.
A long cable was stretched over one of the bridges, and two
parties were formed, with about a hundred men in each.
One of these parties went to one end of the bridge and the other to
the opposite end, and then the men seized the rope, and each party
endeavored to pull the other over the bridge.
They pulled and tugged and yelled, until one side, finding that it
was losing ground, suddenly, at a signal, let go the rope and over
backwards went every man on the other side, pell-mell in one great
kicking heap. Sometimes, Moriyama said, the rope broke and then
everybody went over backward.
When the game was finished, they all went off laughing to some of
the nearest tea-houses, and had a jolly time together, friends and
enemies, all in the same crowd.
 Among the most interesting places visited was a Japanese school.
This was the rarest school that Tom ever saw. The little shaven-
headed boys and girls were all seated on the floor, and the master
sat on the floor too. In front of him was an affair like a stunted music-
stand, on which he put his book, and the old tyrant leaned forward
and cracked the bad boys with his fan. Think of an American teacher
whipping his scholars with a fan.
Some of the youngsters were bare-footed, and some wore
stockings made something like mittens, with a separate place for the
big toe. The books were full of such a curious mixture of what
seemed to Tom like black blots and scratches that he thought the
Japanese youngsters must be extraordinarily smart to be able to
make any sense out of them.
When Tom heard that these characters were read from top to
bottom of the page instead of across he expressed the opinion that
the Japanese probably added up their letters as they stood in the
columns so as to find out what the whole thing came to.
The more he learned about the language of Japan, its different
dialects, and its two alphabets, the greater became his respect for
those who obtained a Japanese education.
“It must take you all your lives to learn how to read and write,” said
he to Moriyama.
“We believe,” said the Japanese boy, “that it takes all of a person’s
life to learn anything.”
 A JAPANESE SCHOOL.
That this was a common opinion in Japan Tom soon found out for
himself. Whatever the trade or profession in which a man was
engaged, he seemed to have been at it all his life, and ten to one his
father and his great-grandfather before him had followed the same
business, and each one of the family had given so much time and
attention to his business that he became almost perfect in it—as far
as Japanese perfection went.
 JAPANESE WRESTLERS.
For instance Tom went to a wrestling match, where the wrestlers,
great powerful fellows, all belonged to a tribe or guild that according
to their account, had existed ever since the third year of the first
Mikado, which in our chronology would be the year 658 B.C.
 JAPANESE BALANCING FEATS.

At any rate, they were men whose ancestors for hundreds of years
had been wrestlers, and they themselves gave up all their time and
thought to the attainment of perfection in their art.
 Consequently they were splendid wrestlers.
Other gymnastic performers were equally proficient in different
lines. Some of them had great long noses fitted to their faces, and on
these noses they balanced themselves and each other, and did
many other astonishing feats.
One man laid on his back supporting on one foot a fellow who
stood on his nose, while, on the prostrate man’s nose, another man
stood, balancing on his nose an umbrella, while he kept five or six
balls flying in the air, catching each one as it fell and tossing it up
again, never allowing one of them to drop.
Each of these performers, no matter what else he was doing, held
a fan in one hand, which was kept constantly in motion.
And in all the performances there was never a mishap or a
mistake. Every man was absolutely perfect in his part.
When Tom went back to Yokohama he told his father that he had
made up his mind that he was going to be absolutely perfect in some
one thing. If the Japanese could succeed in this, he was sure he
could.
He had not made up his mind what he would do, but it was to be
something.
His father commended this resolution, and suggested arithmetic.
Tom did not feel altogether certain about arithmetic, but as soon as
he could think of a good thing, he intended to commence the study
of perfection.
When his father laughed a little at his enthusiasm Tom said that
one great difficulty would be that he was afraid he could not find out
what his father and grandfather had been perfect in. If he could do
that, it would help him very much.
But we cannot mention all the curious things that Tom and
Moriyama saw in Japan.
It would require a book to tell about the wonderful processions,
such as that of the white elephant, which, by the way, Tom thought
was a real animal, until he saw that its legs did not move, and that
under each of its feet were two human legs belonging to the men
who carried the huge stuffed creature—and the many other strange
things that they saw in the streets and houses of Japan.

PROCESSION OF THE WHITE ELEPHANT.

Suffice it to say, that since Tom came home—and it has been

some years since his trip to Japan—he has earnestly endeavored to
discover what particular thing it would be best for him to learn
thoroughly and completely.
I am not sure that he has even yet made up his mind upon the
subject, but he is convinced that if his experience among the
Japanese had no better effect than to teach him that to know how to
do something perfectly well, it is greatly to be desired, and well worth
striving for—no matter how much time and toil it may require.
 LUMINOUS INSECTS.

The fire-flies that flit about so merrily on our pleasant summer

evenings, emit little sparkles of light, that seem like tiny stars, shining
among the grass and trees. Sometimes the air is full of these
twinkling lights, which are very pretty, though not sufficiently brilliant
to help us to find our way on a dark night, or to bring into our houses
to save the expense of candles or kerosene.

HUT LIGHTED BY BEETLES.

Occasionally we see, at night, in the grass by the roadside, or in a
field, a very small trail of a bright-green light; and, on stooping down
to examine into this singular appearance, we find on the ground an
insignificant little ugly worm, to which Nature has given the power of