Eastern Funds

superheater · **Joined:** Sun Aug 22, 2004 11:54 pm **Posts:** 2605

Response from Monetary Economist George Selgin @ The University of Georgia

Back then, in part because there was little branch banking, it cost more than it does today to move money from one part of the U.S. to another. So "eastern funds" meant simply a bill of exchange or check payable at an eastern bank. Such a bill or check saved the check or bill's recipient, in p;resenting it to his or her (local) bank, from commissions and other fees, much as a check drawn on, say, a U.S. branch or subsidiary of an English bank today saves its U.S. recipient today the commissions and other fees that would apply were the check payable on an English bank only.

I hope that explains it!