Ann It's very interesting.

Nick When we deliver the machine to the shipping company, we receive a bill of

lading. It's a receipt from the shipping company and it's also the foreign

company's claim to the computer when it gets to England.

Ann And what's then?

Nick Then we write draft or check which direct the British company to pay a sum in

British pounds to a third party in, let's say, 90 days. We call it a "bill of

exchange", which includes the rate of exchange at the time and, in addition, the

interest. It must be paid in the 90 day extension of credit.

Ann That is hard time getting the money, isn't it?

Nick No. We take the draft, the bill of lading and other necessary papers to our New York bank. The draft is sold at discount, it means without interest change, for the face value and get dollars. That's the way.

Ann Well, but you get your money from the bank. How does the British company pay? Who do they pay?

Nick It's quite simple, New York bank sends the documents and the draft to its branch

in London or to a British bank. The transaction is finished usually by accepting

British pounds into a checking account in a London bank.

Ann It seems rather complicating.

Nick It only seems so. The US supplied a computer, exported the merchandise and got

back a checking account deposit in a London bank, importing claim on British

goods and services.

Ann Could you have dollars instead?

Nick Sure, but in this case we would have reduced the existing British claim on American goods and services.

Ann So what?

Nick If some nations pile up continuing capital surpluses and other continuing deficits the problem can arise in international economics.

Ann I see that I must study the subject thoroughly before we can continue.

Nick Yes, may be.

Active Vocabulary

expertise спеціальні знання, компетентність

to advance просуватися, йти вперед

to sell abroad продавати за кордон

net income чистий прибуток; (амер.) прибуток, що підлягає оподаткуванню

transmission пересилання

engine двигун

axle вісь, вал

bill of lading квитанція, яка реєструє відвантажений

receipt квитанція

claim вимога

draft чек, видаток

party юридична сторона

extension of credit продовження кредиту

face value чиста вартість

branch філіал, відділення

to pile up накопичувати, збільшувати

capital surpluses надлишковий капітал

Vocabulary Practice

Exercise 1. Use the structure of the model to respond the following sentences.

Model: Is it basically a Japanese corporation? (Yes)

It's basically a Japanese corporation, isn't it?

Is the overseas branch open? (No)

The overseas branch isn't open, is it?

1. Are many businessmen piling up capital surpluses? (Yes)

2. Is USSR the part of the Common Market? (No)

3. Is the New York bank accepting Ukrainian Hryvnas? (No)

4. Is Britain one of the Common Market countries? (No)

5. Is the company starting a branch in China? (Yes)

6. Is internationalism a modem trend? (Yes)

7. Is the subject clear? (No)

Exercise 2. Change the sentences according to the model.

Model: Why would you sell automobiles to a company in Japan? (Tell me, please)

Tell me, please, why you would sell automobiles to a company in Japan.

1. How does this bank deal with different currencies? (Explain)

2. Where will you deliver the computer? (Let me know)

3. When did they order the merchandise? (I don't know)

4. How did they sell the draft at discount? (It's hard to say)

5. How did they get the extension of credit? (Explain)

Exercise 3. Answer the questions.

1. Do you have plans for international cooperation for your business?

2. What obstacles are there on the way of development of international cooperation in this country?

3. What branches of business will develop fast in the sphere of international cooperation?

4. Do you think that internationalism will help to solve many social problems?

5. What place do you think this country will take in international economy?

Exercise 4. Translate into English.

1. Багато міжнародних корпорацій виникло в результаті об’єднання відомих компаній

2. Супутниковий зв’язок сприяє розвитку міжнародних корпорацій.

3. Банк вимагав чеки.

4. Компанія просить продовження кредиту.

5. Зверніться за кредитом в наш британський філіал.

6. Чистий прибуток від продажу цього товару буде дуже високим.

7. Нам необхідно накопичувати капітал для реконструкції виробництва.

8. Британська сторона відповідає за пересилання.