HZS\n 1904 WILLIAMS AND ROGERS SERIES c AT LOS ANGELES WILLIAMS & ROGERS SERIES Modern Illustrative Banking BY E. VIRGIL NEAL AUTHOR MODERN BANKING AND BANK ACCOUNTING AND JOHN H. MOORE DIRECTOR COMMERCIAL DEPARTMENT CHARLESTOWN HIGH SCHOOL, BOSTON, MASS. NEW YORK •:• CINCINNATI •:• CHICAGO AMEEICAN BOOK COMPANY Copyright, 1902 and 1904, by AMERICAN BOOK. COMPANY. BANKING. W. P. II * t < ( * . t * « » " 4 4 t 1 C < f t I 1 1 4 t . , . . 1 i • C € t 1 • '. < 4 ! 1 i i « » 1 .* 4 * • ■ < 1 « «- 1 • 1 c • 1 * > 1 1 t « I CI *i < * It « 4 4 4 4 4 t 4 1 PREFATORY NOTE This text-book on banking is designed to reproduce as nearly as possible the prac. tical workings of a national bank. A detailed account of the organization and practical management of banks is given, but the books are opened from statements showing the condition of a bank that is in operation. For the purpose of illustrating the actual routine of a national bank many attractive incoming documents and an envelope of blank business forms have been prepared to accompany the text. The incoming documents are made the basis of a series of transactions which the student is required to record in the various bank books, and the blank business forms are used in preparing the bank's outgoing documents. The series" of transactions is arranged to cover, in abbreviated form, two days' business of the First National Bank, Rochester, N.Y. During the first day all of the business forms of the bank are handled by the student ; but during the second day the business forms are dispensed with and only the entries for the various transac- tions are recorded, historical data for them being furnished in the text. The work is so classified as to show the ordinary duties devolving upon the various bank officers and clerks. At the close of the second day's practice dividends are declared, statements made, and the books closed. Care has been taken to furnish sufficient material to make these statements and the necessary closing entries illustra- tive of this feature of bank accounting. 389084 CONTEXTS PART I — BANKS AND BANKING The Business of Banking National Banks . State Banks Private Banks and Bankers Savings Banks Loan and Trust Companies Bank Officers and Clerks Banking Customs PART II — BANK ACCOUNTING (With Vouchers) Books Used .... Condition of the First National Bank, Rochester, N.Y Receiving Teller's Work Paying Teller's Work Discount Clerk's Work Collection Clerk's Work Note Teller's W r ORK .Mail Clerk's Work . Individual Bookkeeper's Work General Bookkeeper's Work . PART III — BANK ACCOUNTING (Without Vouchers) General Instructions Receiving Teller's Work Paying Teller's Work Discount Clerk's Work Collection Clerk's Work Note Teller's Work M \n. Clerk's Work . Individual Bookkeeper's Work i.iMKw. Bookkeeper's Work . PAGE I 7 12 12 13 13 14 15 . 24 . 36 . 41 . 44 . 48 . 53 . 55 . 57 . 59 . 61 63 63 64 65 66 67 68 70 71 PART IV — SUBSIDIARY SUBJECTS A Clearing House 75 Foreign Exchange 83 Letters of Credit 85 Travelers' Cheques 87 MODERN ILLUSTRATIVE BANKING PART I. BANKS AND BANKING THE BUSINESS OF BANKING A Bank is primarily a place for the safe keeping of money. A Commercial Bank is an institution organized for the purpose of receiving deposits of money, making loans, discounting paper, making collections, and effecting the transmission of money from one place to another. A Banker is a dealer in money. Sources of Receipts. The available funds of a bank consist of (1) capital paid in by the shareholders ;, (2) notes it can circulate, if it be a national bank ; (3) money deposited with it by its customers ; (-1) money collected for customers and banks (which is frequently held a short time before being paid) ; (5) money received in the course of transmission (sale of exchange), which of course must be repaid in another place ; (6) and bills rediscounted. Sources of Disbursements. A bank's disbursements consist of (1) checks, drafts, etc., cashed by the paying teller ; (2) bills discounted ; (3) time and demand loans made : (4 ) money paid out for current expenses ;' (5) shipments of money to other banks in settlements of balances ; (6) and interest paid on time deposits. Sources of Profits. The profits of a bank arise mainly from discount, interest, dividends on stocks and bonds held, and collection and exchange. Services rendered Depositors. The principal services which a bank renders to its depositors are : (1) it affords a safe and convenient place in which to keep money : (2) it pays checks as directed by the depositors ; (3) it collects checks, notes, drafts, etc. ; (4) it discounts notes for and makes loans to the depositors ; (5) it provides means for the transmission of money. Kinds of Banks. Banks are divided into the following classes: national, state, and private. Banks that issue notes which circulate as money (as national banks) a'"e often termed banks of issue, while those which do a discount business, but do not issue bank notes, are known as hanks of discount . NATIONAL BANKS A National Bank is a bank organized under an art passed by Congress, entitled "The National Bank Act." In addition to doing a general banking business, it has authority to issue circulating notes against bonds deposited with the United States Treasurer. The government does not own nor conduct the bank, but only authorizes 7 8 MODERN ILLUSTRATIVE BANKING its creation and prescribes its mode of doing business. Every banking association doing business under this act is governed by the same principles, is subject to the same inspection, uses the same forms in making reports to the Comptroller of the Currency at Washington, and is liable to the same penalties for the violation of any requirement of the national banking laws. Comptroller of the Currency. National banks are under the direct supervision of the Comptroller of the Currency, Washington, D.C. This officer is appointed by the President, on the recommendation of the Secretary of the Treasury, by and with the advice and consent of the Senate. He holds his office for a term of five years, and receives a salary of $5000 per year. He is required to give bond for $100,000. He must not be interested in any national bank, and must make a report to Congress once a year. He appoints all bank examiners and receivers for insolvent national banks. National Bank Examiners. These officials are appointed by the Comptroller of the Currency to examine the affairs of national banks. They are paid a certain amount for each bank examined. Under the law there is no limit to the number of examiners who may be appointed or the number of times a bank may be examined, both being left to the judgment and discretion of the Comptroller of the Currency. All national banks are examined at least once a year. Powers of National Banks. National banks have power (1) to adopt and use a corporate seal; (2) to have succession for a period of twenty years; (3) to make con- tracts ; (4) to sue and be sued ; (5) to elect directors, and by their boards of directors to elect officers ; (6) to make all needful by-laws not inconsistent with the national bank act ; (7) to discount and negotiate notes, drafts, bills of exchange, etc. ; (8) to receive deposits, buy and sell exchange, coin, and bullion ; (9) to loan money on personal security ; (10) and to issue and circulate their own notes. An act of July 12, 1882, provides that a national bank may, any time within two years previous to the date of the termination of its existence, extend its period of succession for not more than twenty years, by the approval of the Comptroller of the Currency. The words "personal security" are used in contradistinction to real estate security, and do not mean that national banks are limited to loaning money on the security afforded by indorsers or personal sure- ties. On the contrary, national banks have a perfect right to loan mone)' on stocks and bonds, bills of lading, warehouse receipts, choses in action, or other personal chattels. In the absence of collateral, banks usually endeavor to get at least two names to all paper which they discount or upon which they make loans, but such is not obligatory under the statute. Stockholder's Liability. Each stockholder of every national banking association is held individually responsible for all debts and engagements of said banking associa- tion to the extent of the par value of his stock in addition to the amount invested in such stock. In other words, if a stockholder owns $2000 in capital stock of a national bank, and such bank should fail, he may be called upon by the Comptroller of the Currency to pay into the bank -12000 in cash in addition to the loss of his stock, if this be necessary for the adjustment of the bank's liabilities. Real Estate. National banks are prohibited from holding real estate other than the buildings in which they do business, and land mortgaged to secure a loan which ORGANIZATION OF A NATIONAL BANK 9 was made in good faith upon personal security, but such land cannot be held for a longer period than five years. Banks cannot make loans on their own stock except to prevent losses on loans previously made. Reserve. National banks are required to keep on hand at all times a lawful money reserve. This reserve must equal 25% of the deposits, if the bank is located in a large city, and 15% of the deposits, if it is located in a small city. Overcertifying Checks. National banks are prohibited, under severe penalty, from certifying a check in excess of a depositor's account. Dividends and Surplus. The directors of a national bank may semiannually declare a dividend of so much of the profits of the bank as they deem expedient ; but before declaring a dividend one tenth of the net profits for the preceding half year must be carried to surplus fund until the fund amounts to 20% of the capital stock. No national bank may, during the time it continues banking operations, withdraw, either in the form of dividends or otherwise, any part of its capital stock. If losses have been sustained equal to or exceeding the undivided profits on hand, no dividend can be declared ; and no dividend can be declared to an amount in excess of the net profits. Reports. National banks must make at least five reports to the Comptroller of the Currency during the year at such times as he may call for them. ORGANIZATION OF A NATIONAL BANK Number of Persons Necessary. An association for carrying on the business of national banking may be organized by any number of persons not less than five. Capital Required. The national bank act provides that national banks in cities of 50,000 persons or under must have a capital of not less than $100,000. If the population of the city exceeds 50,000 persons, no national bank can be organized with a capital of less than $200,000. In towns of 6000 inhabitants and under, national banks may be organized with a capital of $50,000, and in towns of 8000 inhabitants and under with a capital of $25,000, if approved by the Secretary of the Treasury. Selecting a Name. Only those banks that are organized under the national bank act can make use of the word " national " in their name or title. To use the name "First National Bank," "Second National Bank,"' etc., a bank must be the first, second, etc., national bank organized in any given place. Securing Subscriptions to the Capital Stock. This is usually done by a com- mittee appointed for this purpose. It is generally considered wise to distribute the stock, so far as can conveniently be done, among the varied interests of the city and the surrounding country. The subscriptions are taken upon a blank, which contains a statement of the purpose of the organization ; following this statement are spaces for the date of the subscription, name of the subscriber, address, and the number of shares sub- scribed for. 10 MODERN ILLUSTRATIVE BANKING Notice to the Comptroller of the Currency. When the promoters have selected a name for the bank, the Comptroller of the Currency should be notified and his approval of the title obtained. The notice should be signed by at least five subscribers to the stock. Natural Persons. The corporators must be natural persons ; that is, human beings. Corporations and joint stock companies cannot become organizers of national banks. Partnerships are also excluded under the terms of the statute. If a firm desires to take stock, it must do so through one of the partners until after the corporation is formed, when the stock may be transferred to the firm. Articles of Association. Persons desiring to organize a national bank should enter into articles of association, which specify in general terms the object for which the association is formed. These articles may contain any provisions not inconsistent with the law. They must be signed by five or more of the persons desiring to form the association. One copy of them must be forwarded to the Comptroller of the Currency to be kept on file in his office, and another copy is retained by the bank. Special forms and blanks for the organization of national banks are furnished by the Comptroller of the Currency, and as it is advisable to use official forms, it has been deemed unnecessary to show the special forms in this work. Organization Certificate. The national bank act provides that persons desiring to organize a national bank shall make an organization certificate which shall specifically state (1) the name of the association (which shall be subject to the approval of the Comptroller of the Currency) ; (2) the location, that is, the place where the operations of the bank are to be carried on ; (3) the amount of the capital stock and the number of shares into which it is divided ; (4) the names and residences of the shareholders, and the number of shares held by each of them ; (5) a statement of the fact that the certificate is made to enable such persons to avail themselves of the advantages of the national bank act. Only the persons who signed the articles of association may sign the organization certificate. Each person signing the certificate is required to acknowledge his signature thereto before a notary public or a judge of some court of record. As soon as acknowledged, the certificate should be filed with the Comptroller of the Currency. Electing Directors. After filing the articles of association and the organization certificate, the next step is to elect the directors, which is done at a meeting of the stockholders held for this purpose. Number and Qualifications of Directors. The national bank act requires that every national bank shall have at least five directors, and that each director must own at least ten shares of the stock. The directors must all be citizens of the United States, and at least three fourths of them must have resided in the state or district in which the association is organized for one year immediately preceding their election. The office of bank director is a very responsible one, and no man should accept it if his outside duties are such that he will be unable to give the necessary attention to the ORGANIZATION OF A NATIONAL BANK 11 requirements of the position. Every director must take an oath that he is qualified to fill the office, and that he will faithfully perform the duties thereof. The president of the bank must send the oaths of the directors to the Comptroller of the Currency. Electing Officers. The directors should elect a president, vice president, and cashier. The cashier usually appoints the tellers and employs the clerks and other assistants. Payment of Capital Stock. At least 50% of the capital stock of every national bank must be paid in before the bank will be authorized to commence business. The remainder of the stock must be paid in installments of at least 10% each, as frequently as one installment at the end of each succeeding month from the time the bank is authorized by the Comptroller of the Currency to commence business. The payment of each installment must be certified to by the president or the cashier at the end of the month, and the certification forwarded to the Comptroller of the Currency. Either the president or the cashier may be directed to attend to the collecting of the first pay- ment of 50%. It is customary to collect the amount and deposit it in some bank until the association is ready to begin business. Certificate of Payment of Stock. When 50% of the capital stock has been duly paid, a certificate must be made to the Comptroller of the Currency stating the amount paid in as permanent capital, the name and place of residence of each director and the amount of stock which he owns in good faith, and that the bank has complied with all the conditions prescribed by the national bank act. This statement must be signed and sworn to by a majority of the directors and by the president or the cashier. Deposit of United States Bonds. Every national bank, before it can be author- ized to commence business, must deliver to the Treasurer of the United States United States registered interest-bearing bonds, to an amount not less than one fourth of its capital, if the capital is $150,000 or less. If the capital is in excess of $150,000, ^."iO.OOO in bonds must be delivered. Before the bonds are delivered they must be assigned to the Treasurer of the United States. In making the assignment great care should be taken to give the correct name of the bank. If the word "The" is a part of the corporate name, it should never be omitted.' Coupon bonds may be used, as the Treasurer of the United States is authorized to receive them and issue registered bonds for like amounts. Circulation. A national bank is entitled to receive from the Comptroller of the Currency circulating notes in blank equal in amount to the par value of the bonds deposited with the Treasurer of the United States, unless the bonds should be below par, in which case it may receive circulating notes for only the market value of the bonds. An order for circulating notes should be sent to the Comptroller of the Currency. The bank pays for the engraving of the plates for the notes, but they arc printed by the Treasury Department and forwarded t<> the bank. They must be signed by the president, or vice president, and the cashier of the bank. Tax on Circulation. A national bank is required to pay to the Treasurer of the United States a semiannual tax of ]% of the average circulation secured by 2% gold bonds and ;i semiannual tax of A% of the average circulation secured by all other bonds. 12 • MODERN ILLUSTRATIVE BANKING Certificate of Authority to commence Business. When all the conditions of the national bank act have been complied with, the Comptroller of the Currency issues a certificate authorizing the association to begin business. The bank must publish the certificate for at least sixty days (a weekly insertion is sufficient) in a newspaper published in the city or the county in which the bank is located. STATE BANKS How Organized. State banks are organized under the laws of the state in which they are located. The preliminary steps are much the same as those in the organization of national banks. The subscription list is taken, articles of association and a name are adopted, and a board of directors and officers elected. A copy of the articles of association is filed with the superintendent of banking of the state, when there is such an officer, or with the Comptroller of the Currency, and another copy is filed in the office of the clerk of the county in which the bank is to be located. Circulating Notes. Previous to July 1, 1866, state banks issued notes which circulated as money, but on that date the government imposed a tax of 10% on the circulation of all state banks, which had the effect of withdrawing the circulation, as the rate was too high to allow any profit to the banks. Difference between State and National Banks. National banks are organized under the national bank act, and are under the supervision of the general govern- ment at Washington. State banks are organized under the laws of the various states, and are subject to the restrictions imposed by the statutes of the said states. National banks issue circulating notes ; state banks do not. Advantages of State Banks. It is claimed that state banks possess some advan- tages over national banks, among which are the following : (1) they are not examined so critically ; (2) in some cases they are not required to make returns to state officials, and in no case such full returns as are required by the national bank act ; (3) they can certify checks in excess of the amount which a depositor may have in the bank ; (4) they are not required to hold United States bonds. PRIVATE BANKS AND BANKERS Private Banks. A private bank is organized and operated by an individual or a firm. In opening such a bank no formality is required, unless restricted by statute. There is no responsibility to the government, state or national. The safety of such banks consists in the financial responsibility of the individual or individuals who con- duct them. The business of private banks is much the same as that of state banks. They receive deposits on which they usually allow a small rate of interest ; they buy and sell exchange, commercial paper, etc. Private Bankers. Private bankers are of two kinds : (1) those who conduct a business the same as private banks, (2) and those who deal in foreign exchange. The latter buy commercial bills drawn against grain and other produce shipped to foreign countries, sell drafts on foreign banks, and issue letters of credit to travelers. In New York state all private banks are examined by the state bank examiner, and, with a few exceptions, restrictions are imposed similar to those imposed upon state banks. SAVINGS BANKS 13 Bankers and Brokers. Bankers and brokers usually buy and sell stocks and bonds for their customers, and in addition to this carry on a general banking business, receiving deposits, paying sight drafts, checks, etc. . The}' often permit their customers to overdraw their accounts, as they have for safe keeping the customers' stocks and bonds, and such securities are ample protection for overdrafts to a certain amount. SAVINGS BANKS Purpose. A savings bank, as its name implies, is an institution organized for the purpose of encouraging economy and caring for the savings of the people. The deposits are not subject to check, as in other banks, and the depositor may be required to give thirty days' notice when he wishes to withdraw his funds. How Organized. Savings banks are organized under the statutes of the different states by a number of persons, usually more than ten, who make application in due form for the privilege of organizing such a bank. These associations are mutual. They have no capital like a state, national, or private bank, their available funds consisting of the money put into the bank by the depositors. Every one who puts in money is practically an owner, and the profits are divided among the depositors in proportion to the amount that each has to his credit. Investments. As safety is considered paramount to profit, the law prescribes the character of the investments of the savings institutions. The investments which are usually permitted are loans on pledges of the stocks and bonds, investments in stocks and bonds, and mortgage loans. The stocks and bonds in which savings banks may invest are generally prescribed by the law. In some states they are allowed to invest only in United States government bonds and bonds of their state. Interest. Interest is usually allowed depositors semiannually on the first day of July and the first day of January of each year. The current rate is at present wavering between $% and \°Jo. If the interest is not withdrawn it draws interest the same as a deposit. Difference between Savings Banks and State and National Banks. Savings banks not only provide a place for the safe keeping of money, but undertake to invest judiciously the money received on deposit. State and national banks provide a place for the safe keeping of money and securities, afford a depositor a convenient means of making payment by check, make collections for him, discount his paper, etc., but do not undertake to invest his deposits for him. Savings banks open their doors to savers, to those who wish to lay by a small amount of money from time to time. State and national banks open their doors mainly to business men. LOAN AND TRUST COMPANIES How Organized. Loan and trust companies are organized by a number of persons, usually ten or more, under the laws of the various states. Kinds of Business Transacted. These companies receive deposits and make loans, luit as a rule they do not undertake the collection of commercial paper. They act as agents for corporations in transferring stocks and bonds, make investments, collect interest, act as trustees, receivers, executors, administrators, etc. Many com- 14 MODERN ILLUSTRATIVE BANKING panics have boxes in fire and burglar proof safes which they rent to customers who desire a safe place for the keeping of valuable papers, etc. ; others make a business of examining and insuring titles to real estate. This latter practice has grown quite extensively within recent years. BANK OFFICERS AND CLERKS The officers and clerks of a bank are generally president, vice president, cashier, receiving teller, paying teller, note teller, general bookkeeper, individual bookkeeper, discount clerk, mail clerk, collection clerk, messenger, and porter, together with the necessary assistants in the various departments. President. The president is the chief executive officer of the bank. He presides at the meetings of the board of directors, and generally exercises the authority of the board during its recess. Some banks have a vice president, who assumes the functions of the president during the latter's absence. The circulating notes and certificates of stock are signed by the president, or the vice president, and the cashier. It is also customary for the president to sign the minutes of all business meetings. The receipts for circu- lating notes received from the Comptroller of the Currency are signed by the president or the cashier. In some banks the president attends to making the larger portion of the loans, and devotes his full time to the bank's interests. In such cases he is paid a regular salary ; but when he devotes only a small portion of his time to the bank's interests, the position is frequently considered honorary, and no salary is paid. Cashier. Unless there is a vice president, the cashier ranks next to the president, and is in reality the manager of the bank. He has authority to pay out the bank's funds, and to borrow money in the name of the bank. He may also indorse the bank's paper for the purpose of securing loans. He is appointed by the board of directors, and is required to furnish bonds for the faithful performance of his duties. He keeps a record of the meetings of the board of directors, for whom he is the acting secretary. The certificates of stock issued to shareholders are signed by him as well as b}^ the president, as are also the circulating notes. He signs all drafts drawn on other banks, and indorses personally, or by deputy, all drafts and notes sent away for collection. All notes and drafts received from other banks are indorsed to him. He has charge of the internal workings of the bank and supervision of the clerical force. The Tellers. The paying teller usually pays out all moneys, issues certificates of deposit, certifies all checks that are to be certified, and has charge of that part of the vault containing the working cash of the bank. The receiving teller usually receives all the money coming into the bank, makes the records therefor, and at night turns over to the paying teller all money received during the day. The w r ork of the note teller varies in different banks. The varying duties of, and the necessary qualifications for, the tellers and clerks are fully and clearly explained in subsequent chapters. BANKING CUSTOMS 15 The Bookkeepers. The bookkeepers in a bank are known as the general book- keeper and the individual bookkeeper. The general bookkeeper has charge of the general ledger. The individual bookkeeper has charge of the individual or deposi- tors' ledger. BANKING CUSTOMS Collection and Exchange. It is customary for most banks to charge their deposi- tors a small fee, generally about j^fo, for collecting checks on out-of-town banks. The amount so charged may be deducted from the deposit or it may be paid in cash. The former is the customary way. A small fee ranging from j^fo to ^ l /o is generally charged on discounted paper which is payable out of town. Sometimes an additional amount is charged for the interest for the length of time necessary for the transmission of the money ; e.g. if a note payable in Chicago 30 days after date were discounted in New York city, the New York bank might charge interest for 33 days, the extra three days being allowed for the transmission of the money. In addition to this there might be a fee for collec- tion. This practice is controlled largely by the size of the customer's account and the Sfeneral custom of banks in the different cities. Banks have various agreements with one another for collecting paper. In some instances the collecting bank agrees to remit once a week on a certain day without any charge, the use of the money being considered equivalent to the services rendered in collecting. Others make no charge on cash items but charge from j^fo to ^y 2-&, -6 ^?^^?^ ^ JL £i- fb. :^^^-*-^y^^ ^^ . \ rz-rv. \*a ^/T^?^yjL^j, When the amount is small, a very good method is to write the name on a line with it, as shown on the following page. BANKING CUSTOMS 17 Another Form of Safety Check J>f&JS NAT' B.W 7/;')' .W.*EM3li3N i if. I .:: :*■ H5 / i orth^stPennf ^L l&^/P- ^wj^mzmKW^ / to the orde l^L^. t£e r*£^^h& .dollars The use of stubs, or coupons, on the end of the check, has met with much favor by express companies and others. The following form represents such a check : Form of Stub Check Farmers and TOecljamcs Bank, 22 <^^f f 7^r?^^*d^^^^<^ZS^y-£^7, 7 V * ^L WMtv AMOUNT NOT TO EXCEED THAT EXPRESSED IN WORDS AND FIGURES AT LEFT jOlO^CQ.r- c& -V- 7 ^T^. 'mi u •*''• ;*(v ; ' ' Mb.JL2tJZ- c^L- BANKING CUSTOMS 19 Canceling Checks. When a bank pays cheeks drawn upon itself, they should be canceled in some manner by the paying teller before they are passed to the bookkeeper. The cancellation may be accomplished by placing the checks on spindles, or by the use of punches which cut in the checks the initial of the person who cancels them, or by the use of a rubber stamp which marks the word "Paid" and the date of payment thereon. When a bank has sufficient time, one of the safest plans is for the paying teller to mark the check with a rubber stamp before passing it to the bookkeeper. After it is entered by the individual bookkeeper he should also mark it by cutting the word "Paid" through the check with a machine provided for this purpose. The following represents a check so treated : Form of Canceled Check Ah. 2 ^,3 , $L o ° ° -^Mjc T>\ u J#y;fcMyy / c/'t/efy cT^ 1L y> Whatever method is employed, it should be one which will not materially disfigure the check, as it is frequently a voucher, and as such is valuable evidence in a lawsuit. Forged and Raised Checks. If a bank pays a forged check, the loss invariably falls on the bank, as it is supposed to be familiar with the signatures of its depositors. If a raised check is cashed, the loss falls upon the person or the bank that innocently cashed it, provided ordinary prudence has been exercised by the drawer in filling it out. Tt is generally held that if the drawer of a check leaves a blank which has been so skillfully filled up as to give no evidence of alteration, he may be found guilty of such negligence as will' make liini liable to a bona fide holder for the apparent amount of the indebtedness. (See Thomas on Law of Negligence, p. 105.) If a raised check were cashed by a bank under these circumstances, the loss would, in most states, fall on the drawer. There are some conflicting decisions, however. To relieve himself from any charge of negligence, the drawer of a check is simply required to commence writing at the extreme left-hand end of the blank, and fill up the space (if any) at the right of the written amount with a line made by his pen. The law does noi require him to use any of the devices offered for preventing checks from being raised, although prudence would, in many cases, dictate such a course. Method of Writing up the Bank Book. The custom in regard to writing up this book varies. At the present time a method frequently employed consists in entering the deposits on the left-hand pages and the checks on the right, without giving the dates of the checks. 20 MODERN ILLUSTRATIVE BANKING Many banks enter the checks in detail, giving the date of each in the order in which it was drawn, while others enter only the total, the detailed list being given (without the dates) on a separate slip of paper, or on the envelope in which the checks are returned. The method of writing a detailed list of checks on separate sheets of paper has many advantages for the bank. These slips may be filled out by the use of the registering or adding machine, which saves much time, and insures accuracy. They may also be written up at such times as may be convenient for the bank clerk, so that when a depositor presents his book to be balanced, the checks are practically all written up, and the book may be returned on very short notice. The depositor, however, is liable to lose these detached slips, and from his stand- point such practice is objectionable. Many banks have avoided the undesirable feature of this method by having bank books made with alternate short leaves. Checks are itemized on the loose slips, and these slips are pasted on the short leaves of the bank book. This method is perhaps the best that has yet been devised, although it has not so far come into general use. The following represents a bank book so written up : Form of Bank Pass Book Dr. THE FIRST NATIONAL BANK, In Account with v- i^z^y 7 x* S.yG.-rf, 2.S / h£^f / C?t?l? / 0? / fjrzj- v -^bz^zsrz^Z-- Aff/'fa" Protesting. When a note or draft, formally presented for payment, is not paid at maturity, it should be protested. This is usually done by a notary public, who sends or delivers a formal notice to the indorsers, declaring that the note has been presented for payment, and that such has been refused. It is unnecessary to protest paper on which there are no indorsers, though many banks protest all paper that is not paid when due, unless there are specific instructions to the contrary. When paper is pro- tested, this fact is noted on the face or back thereof, usually in red ink. BANKING CUSTOMS 21 Form of Protested Note /' / yw. ^va^s'.a^»^A^svas»s»s*^»yA^-A«s^»^*tt»v»yB^ ^ ^^»!^5^^s^» ^B^^g ^g^s^g^ 5 K'■ H^ ^^^^^ .■^ g^g gggSJ I gssw-sygs Form of Protest Certificate of Protest. United States of America, ) State of Louisiana. i I, T.HE UNDERSIGNED, one of the Notaries Public In and for Orleans County, Do 1bereb£ • CCCtifg, that on the date below written, I did present the obligation which is hereunto annexed, at the place where it is payable and demanded payment thereof, which was refused. TlfllberCUpon, I.the said Notary, did PROTEST, and by these Presents do publicly and solemnly Protest, as well against the Maker and Indorsers of the same as against all others whom It may concern, for Exchange, and all Costs, Damages, and Interest, already Incurred or to be hereafter incurred, for the want of payment. Bttb "B DO JfUttber Ccrttfp, that on the same day and year below written, due notice of the foregoing Protest — by notice partly printed and partly written, signed by me — was given to the several Indorsers thereon by depositing notices in the Post Office at New Orleans, I*a., postage paid, directed as follows : ^AJL^M^. /^ifav^A^r %^(%JL^/ }< c r^r7-7<^^6^^K^>/-s When paper is protested, it is generally considered as notice to the public that the paver or drawee is either unable, or unwilling, to pay his debts, and for this reason many persons who would lake no notice of an ordinary statement of account and request to remit will pay a draft which is drawn, or which they believe is drawn, subject to protest. Notary Fees. Nearly all banks have their own notary, that is, some officer of the bank who has qualified as a notary public. In many banks this official receives all protest fees, which not infrequently amount to several thousand dollars a year. The notarial work is usually given to the cashier, or to some other faithful official of the bank, in appreciation of his long and efficient services, and the fees may be said to con- stitute one of the perquisites of his position. In some cases, especially in banks new^y organized, the notary fees go to the bank, and form a part of the profits. This work contemplates tin- giving of the notary fees to one of the bank's officials. An account with " Notary Fees" should be opened in the individual ledger, and these fees should be credited to this account. At the end of each quarter, or more frequently if desired, the notary may draw tin- Ices due him by check. PART II. BANK ACCOUNTING (With Vouchers) BOOKS USED The books generally used in a bank are the general balance ledger, individual ledger, general cash book, discount register, collection register, discount tickler, collection GENERAL : l/ *=Jtz^>gz^Zsc-£/ / / iS K^^L~£^ZZ>ZZ^S ^^■^-z^c^z^z^c^^ sOZZ-^l^Z^ 0-7-ZS- / / fat GENERAL ■3 / /a ± ff/J-£ ?j~ / fj#i* ^■/

nj^ "c^JuXl &2£> ^.2f€ 14 BOOKS USED 25 tickler, remittance register, draft book, certified check book, certificate of deposit book, and cashier's check book. In addition to the above, many banks use a discount ledger, customers' bill book, foreign register, offering book, paying teller's book, receiving teller's book, and statement book. The books and system of banking herein presented are intended for medium sized bank^. CASH BOOK '7-'/- GENERAL. TOTAL. "?. ■^^y^^yt^a^e^Ci^i 2 /ffft»lst 1MU Di»cou»t Exck.bci. (I.uc) Z 0-J/m^J , 6 /Off * PlOCttM CllMTlO ff* Poii Whom Dikouvtu (fS&^fc^zw^/ *'Vt6W-£s. /f'sSetifjiS' C /z ^ff-^^^^^^ %z*4^z^3r-^, >^5T 9 .siT*. yj££x#Cfya6&n« JS/ '. ZZ, 10— >*r Z0 / 74:00 fO0 discounted by the bank. This record is made at the time the paper is discounted. If the note is not indorsed by anyone other than the discounter, no entry need be made in the column entitled " Indorser and Collateral." The several items in the column "Proceeds Credited" are posted to the individual ledger to the credit of the persons whose names appear in the column "For Whom Discounted." The footing of the column "Collection and Exchange" is entered on the debit side of the general cash book and posted to the credit of Collection and H.rrlmiKie in the general balance ledger. The footing of the column "Interest and Discount" is entered on the debit side of the general cash book and posted to the credit of Interest and Discount. The footing of the column "Amount of Note" is entered on the credit side of the general cash book and posted to the debit of Bills Discounted. The sum of the footings of the columns "Interest and Discount," "Collection and Exchange"" and "Proceeds Credited" should equal the footing of the column "Amount of Note." 28 MODERN ILLUSTRATIVE BANKING When paper is discounted for persons who are not depositors, or persons who draw in cash the pro- ceeds of the notes discounted, it is customary to issue either a sundry discount receipt or a cashier's check. The receipt or check is given by the discount clerk to the person selling the paper. The check, when given, is cashed by the paying teller and charged to the proper account in the individual ledger. Discount Tickler. This book is designed to facilitate the collection of bills dis- counted, by recording under the various days of the year, the notes falling due on such days. All notes due June 20 would be entered under date of June 20 ; all notes due June 21 would be entered under date of June 21, and so on. By this means the dis- count clerk can ascertain immediately the notes to be collected for each day of the entire year. The notes should be entered first in the discount register, after which the entries should be transferred to the tickler. When so transferred, a check mark should be placed in the column provided therefor in the register. At the close of each day the several items to be charged are posted to the debit of the proper accounts, as shown in the Remarks column, and the footing of the tickler is entered on the left side of the general cash book under Bills Discounted. As will be observed, the discount tickler does not afford such a complete history of the note as is given in the discount register. If at any time it is necessary to have more detailed information, reference can be made to the record in the register, which may be quickly found by the number of the note as given in the tickler. Either red or black ink may be used in the Remarks column. The latter is more convenient, but many banks maintain that there is much less danger of omitting a note if the former is used. The student should use red ink unless differently directed by his teacher. COLLECTION WHRN LEPT NO. l^c^z^y. '2 0J0O Jo/ ^J<5S^c^zZ^- ■J.rj l ^ZZ^C^€J2/ c ^A^^.^^y^^A^^^Z^/ ^^ju/A- \ ^^^e^^^^^^i'T^y^4 WHERE PAYABLE. Sundays and Holidays. Paper falling due on Sunday or a legal holiday shoulc be entered under the first business day following. Should a note fall due on Sunday, and the Monday following be a legal holiday, the note would be payable on Tuesday. This has reference to the student's work in this book. The statutes of the different states in regard to ascertaining the due date of commercial paper vary, and the student is referred to the statutes of his state for information on this point. Banks usually use calendars having all holidays printed in red ink. In leap years the added day, or February 29, is not counted in some states. The statutes of New Fork provide that the added day in leap years must not be considered in counting time on notes, iudgments, or anything of this nature. Some states have Supreme Court decisions to this effect, but BOOKS USED 29 in the majority of states this question has never been raised. In the state of New York, a note dated February '20 (in any leap year) payable ten days after date, would fall due March 2, and not March 1, as would be the case if the added day for the leap year were counted. Collection Register. This book should contain a record of all paper received for collection from customers and out-of-town banks. Nothing is written in the column entitled " Indorser," unless the paper is indorsed by some one other than the person or firm for whom it is collected. The column entitled "Amount to be Collected" should show the face of the note, plus the interest accumulated. Most of the paper left for collection will not have accumulated interest. The Check column is used when the entries on the collection register are transferred to the collection tickler. The Remarks column is seldom used. When paper is collected, a notation to this effect is made in the collection tickler. Collection Tickler. After paper received for collection is entered in the collection register, it is transferred to the collection tickler under the date on which it falls due. Usually half a page is allowed for each business day of the year. The collection tickler should be examined every morning to ascertain the amount of paper to be collected for that day, and when such paper is collected or returned, a notation to this effect should be made with red ink in the column provided for this purpose. The several items in this book are posted to the proper accounts at the close of each day. 3Iethod of Handling- Sight Paper. Checks and drafts which are deposited in the bank by customers, and credited to them at the time of the deposit, are not entered in REGISTER D**n o» Norm. WHEN DOE. FOR WHOM COLLECTED. J^z^^J^^S^^^^i^^^,^^. MARKS. Z/J^S> 7?z6 V o / the collection register, nor in the tickler, but are remitted and charged to the banks on which they are drawn. Sight paper which is received for collection from depositors and others should be entered in the collection register and collection tickler, and, if payable out of town, it, should In; sent away for collection. The bank, or banks, to which it is sent are not charged with the paper until the collection is made and the remitting bank has been notified of such collection. Whether or not sight paper should be entered in the collection register depends entirely on whether it was received on deposit and credited to the depositor or received for collection. Remittance Register. All items which affect our accounts with other banks 30 MODERN ILLUSTRATIVE BANKING COLLECTION WHERE PAYABLE TO WHOM SENT <2^c^yp!Z^>, -Aj^ziZ^Zyi j/&. OCc^, \*4 /f 77"* 6006 /00c Each check certified is debited to the drawer in the individual ledger and the total of the checks certified is posted to the credit of Checks Certified in the individual ledger. From this book the number of certified checks outstanding may be easily determined. Draft Book. Bank drafts are usually bound in book form. These books are very similar to an ordinary check book, bank drafts being in reality checks of one bank on another bank. The draft book is provided with a stub similar to that of an ordinary check book. On this stub are recorded the number of the draft, the name of a person in whose favor it is drawn, how paid for, the exchange charged, if any, and the face amount. At the close of the day the total of the Face of Draft column is transferred to the remittance register and the total of the Collection and Exchange column to the left side of the general cash book. BOOKS USED 33 DRAFT BOOK No. ^f/f . Date /^a^-^/^ TnjZOfL 2^7^^?^ For ~-&4 s^r^4>y Amount - Exchange Face ZJ Z^ff-f Zbe (Quaker Cits IHational Bank Philadelphia, Pa. r /VZ*,^ *£ t 9#,i. Pay to the order o f (/-. (J~~Co^z?^^^ $ £^,^x Sr^^/-rr?~%/^^w^^^^(^Zt?->^>^. Cashier. The total certificates issued during the day is posted to the credit of Certificates of Deposit* in the individual ledger. Cashier's Check Book. A cashier's check differs from a depositor's check only in that it is signed by the cashier of the bank; hence a cashier's check book does not CASHIER'S CHECK BOOK No.^u Date. To Amount 7* u w X u in a: < No.-^ THE FIRST NATIONAL BANK Rochester, N. Y., /^^ -*7 ; Pay to the order n fJ<^LA^f3£^/s JL, f pr< ?s^<^^^--^^^^'yZ>-» *- _ Dollars. '^yy-r, 1 9 #4^. »^-^ o/^>-f^i-^^?y Cashier. differ from a depositor's check book. The sum of the cashier's checks issued during the day is posted to the credit of Cashier s % in the individual ledger. HANK l\<. 34 . MODERN ILLUSTRATIVE BANKING Individual Ledger. The individual ledger is a book of original entry for all trans- actions which affect the accounts of depositors. The names of the depositors are writ- ten in alphabetical order in this book. Sometimes the names are printed in when the book is made, and a few blank lines are left after each letter for the purpose of writing in any accounts that may be opened later. The amount of space left for each depositor is determined by the individual bookkeeper, who makes up his estimate from the busi- ness which depositors have done previously, or, in the case of a new depositor, the estimate is made upon the amount of business likely to be done. In some banks the leaves following the first record of names are cut two inches narrower, so that when a leaf on the right is turned over on a left-hand page the names are not covered and the record may be continued without rewriting the names, except on the first of each month or each three months. At the close of banking hours the columns entitled " Checks in Detail," " Total Checks," and " Deposits " are footed. The footings of Checks in Detail and Total Checks columns should be the same. The footing of Deposits column is entered on the left side of the general cash book, and the amount posted to the credit of Deposits in the general balance ledger. The footing of Total Checks column is entered on the right side of the general cash book, and the amount posted to the debit of Deposits in the general balance ledger. In extending balances, each customer's deposit is added to his balance for the pre- vious day, his total checks deducted from this sum, and the new balance extended into the Balance column. Whenever an account is overdrawn the balance is written in red ink. In footing the Balance column the red ink amounts must be omitted and their sum ascertained separately. The sum of the red ink amounts should be written below the sum of the black ink balances, and in proving, the red ink balances must be subtracted from those written in black ink. Add the footing of the Deposits column to the footing of the old balance column, and from their sum subtract the footing of the Total Checks column ; the remainder should agree with the footing of the new Balance column. If there are red ink bal- ances, their sum should be subtracted from the sum of the black ink balances, and the net amount used in making up this proof. The letters O. K. are written after a balance when the bank book has been written up and verified. In case there are too many checks for the space provided in the body of the ledger, the checks may be listed on the margin of the ledger, and reference made thereto by a check mark. (See amount of $2000.00 in column " Checks in Detail," on Friday, after the name of George C. Bain.) The list of the checks composing this item is written on the margin of the ledger. In case the bookkeeper should find it necessary to list checks on the margin very frequently, different characters may be provided for refer- ence to these lists. General Balance Ledger. This book should contain all the general accounts of the bank. Debit, Credit, and Balance columns are provided for each business day of the week. The debit balances are written in red ink and the credit balances in 34 a DAY, JUNE 16, 190 Total hecks. 123 700 *J~£ S3 f ■>ZO 7: c* Deposits. x2^^^S%?JL t lo,. &z&ri£s INDIVIDUAL LEDGER. 34 a Tht asterisks indicate red ink. BOOKS USED 35 black. The sum of the red ink balances should at all times equal the sum of the black ink balances. To the up-to-date banker this form of ledger possesses many advantages over the old form of mercantile ledger. The balance of any account may be ascer- tained immediately, the bookkeeper can prepare a statement of the bank's condition in a few minutes, and clerical labor is reduced to the minimum, the improved form requir- ing less than one third the clerical work necessitated by the old method. GENERAL BALANCE LEDGER Mon-dat June 19, 19— BALANCE. DEBITS. CREDITS. BALANCE. ^/x&C&z£h^>tK^T^se>f ^z^3 ■ -J^d^t^^S&c-i/. /IT0000 /f0000 ptS0006 /f'0006 Z£Uj&tKd //s~0000 J0///Z / 30 0/ 20 \r0 0/ * 30JpZJ3 /J J'J-JSf/' _:J- sJirJJT/ Sf 36 MODERN ILLUSTRATIVE BANKING The auxiliary books used in the organization of a national bank are practically the same as those used in the organization of any other corporation or joint stock company. They may be briefly referred to as follows : 1. The subscription book, in which are recorded the names of the persons subscribing for stock, together with the number of shares desired. 2. The installment book, in which are written the names of the stockholders and the amount paid in by each. 3. The minute book, in which is written a full account of the meetings of the stock- holders and board of directors. 4. The stock certificate book, from which the certificates representing shares of stock are taken and in which the stockholders receipt for the number of shares issued to them. 5. The transfer book, in which is written a brief history of the old certificates can- celed and the new ones issued. 6. The stock ledger, in which are recorded the amount of the capital stock of the bank, and the part of same debited and credited to the several stockholders. 7. The dividend book, in which are written the name of each stockholder, the number of his shares, the amount of his dividend at each dividend period, and his signature at the time dividends are paid. CONDITION OF THE FIRST NATIONAL BANK, ROCHESTER, TO BE ENTERED IN THE GENERAL BALANCE LEDGER The general balance ledger of the First National Bank, Rochester, N the following balances of accounts at the close of business, Saturday, Dec. Debit Balances Stocks and Bonds, Cash, U. S. Bonds to Secure Cir. Furniture and Fixtures, Premium on U. S. Bonds, Bills Discounted, Redemption Fund (5% of Cir.), Sundry Expense, Protested Paper, Chemical Natl. Bk., New York, 50265.40 National Park Bank, New York (approved reserve agent), 50420. Traders Natl. Bk., Buffalo, N.Y., 4221.16 Coml. Natl. Bk., Troy, N.Y., 3418.41 Farmers Natl. Bk., Phil., Pa., 1242.31 Central Natl. Bk., Oswego, N.Y., Wayne Co. Natl. Bk., Lyons, N.Y ., 2014.50 630143.84 Credit Balances 25000. Capital Stock, 317730.22 Circulation, 75000. Deposits, 4200. Undivided Profits, 3750. Surplus Fund, 85290. Collection and Exchange, 3375. Interest and Discount, 4216.84 Dividends, Loss and Gain, N.Y. ,Y., exhibits 15, 19-. 100000. 67500. 421562.50 2132.63 32750. 1136.54 5062.17 630143.84 CONDITION OF THE FIRST NATIONAL BANK, ROCHESTER, N.Y. 61 * Open accounts in the general balance ledger with the foregoing balances in the order in which they are written in the statement, writing the debit balances first, then the credit balances. Place the balances in the extreme left-hand, or Balance, column of the general balance ledger. Write all debit balances in red ink and all credit balances in black ink. Find the sum of the debit balances, and write the footing in red ink at the bottom of the column. Find the sum of the credit balances, and write the footing in black ink at the bottom of the column. (See form of general balance ledger, page 35.) TO BE ENTERED IN THE INDIVIDUAL LEDGER Ballantine Bros. & Co., 8754.12 Beach, C. W. & Bros., 9271.52 Buffalo, Rochester & Pittsburg R.R. Co., 124008.73 Black, Adler & Co., 38300. Curtis, A. B. & Co., 27291.68 Coit, Moses & Co., 5999.68 Deville, Chas. M., 19173.11 Fidelity Mfg. Co., 110215.70 Keeled Boynton & Co., 9200. Lord & Taylor, 8692.15 Martin Bros., 5926.70 Miner, Geo. W. & Co., 12531.72 Wood, Walter H„ 18215.75 Washburn, C. W., 20211.64 Certified Checks, 2000. Certificates of Deposit, 1200. Cashier's Account, 500. Notary Fees, 70. Enter the above accounts in your individual ledger (see model, page 34 a), writing the balances in the extreme left-hand, or Balance, column. Foot the column at the bottom of the page. In this set you are not opening the books of a bank, but are merely taking charge of the work of a bank which is already in running order. The balances which you are instructed to enter in your books are the balances of the accounts as shown by the books of the bank at the time you take charge of the work. TO BE ENTERED IN THE DISCOUNT TlCKLER Below is a list of unpaid bills discounted now in the hands of out-of-town banks for collection. This paper must appear in the discount tickler ; therefore, enter it in the discount tickler, each item under its date of maturity. Write the following dates, in the order given, in the blank spaces of the discount tickler : Dec. 17, 18, 19, 27, 31, Jan. 2, 5, 6, 7, 8. (See form of discount tickler, pages 26 and 27.) As no entry is made in the discount register at the maturity of paper, it is not necessary to enter bills discounted on hand at this time in your discount register. In the transactions that occur in the regular daily business of the bank, all such paper 'should be entered in both the discount register and the discount tickler. 389084 38 MODERN ILLUSTRATIVE BANKING No. 369. Note of Benjamin K. Decker for $1500, discounted by Geo. W. Miner & Co., payable at Traders National Bank, Buffalo, 2 months from Oct. 17. Sent to Traders National Bank, Buffalo. This note is payable two months from Oct. 17, which would make it due Dec. 17. Make an entry in the discount tickler as follows: In the Number column write 369; under "Payer," Benj. K. Decker; under "Where Payable," Traders Natl., Buffalo; under "To Whom Sent," Traders Natl., Buffalo; under "By whom Discounted," Geo. W. Miner $ Co. ; under " Amount to be Collected," 1500.00. Do not write anything in the Remarks column. No. 300. Note of Lord & Hawley, discounted by Bennett Bros., payable at Farmers National Bank, Batavia, 90 days from Sept. 18, for $2500. Sent to Traders National Bank, Buffalo. In finding the due date of the above note, count 90 days (not 3 months) from Sept. 18. Ninety days from Sept. 18 is Dec. 17. Make an entry in the discount tickler under date of Dec. 17. No. 375. Note of D. W. Smith & Co., discounted by the Fidelity Mfg. Co., at 2 months from Oct. 18, payable at Briggs National Bank, Clyde, for $ 7500. Sent to Wayne Co. National Bank, Lyons. Two months from Oct. 18 is Dec. 18. Under " Dec. 18," in the second blank space of the discount tickler, make an entry similar to those for preceding numbers. No. 396. Note of Billings & Hoyt, discounted by L. J. Pratt & Co., at 30 days from Nov. 18, payable at Merchants National Bank, Troy, for $6900. Sent to Com- mercial National Bank, Troy. No. 378. Note of Conway, Miller & Morgan, discounted by A. B. Curtis & Co., at 60 days from Oct. 19, payable at Commercial National Bank, Troy, for $5400. Sent to Commercial National Bank, Troy. No. 399. Note of J. B. Maxwell & Co., discounted by C. W. Washburn, at 30 days from Nov. 19, payable at Newark National Bank, Newark, for $3000. Sent to Wayne Co. National Bank, Lyons. No. 403. Note of Smith, Brown & Co., discounted by Fidelity Mfg. Co., at 1 month from Nov. 19, payable at Commercial National Bank, Troy, for $1200. Sent to Commercial National Bank, Troy. No. 421. Note of Williams, Hoyt & Co., discounted by Martin Bros., at 30 days from Nov. 27, payable at Farmers National Bank, Philadelphia, for $500. Sent to Farmers National Bank, Philadelphia. No. 1. In your package entitled " Work for Student " you will find a memorandum marked "No. 1," to correspond with the number of this transaction. The vouchers following, marked " No. 1," constitute all of the discounted paper in the possession of the bank at this time. Be sure not to remove any of the other vouchers. (a) These notes should be entered in the discount tickler in the order of dates on which they fall due. The dates on which the notes fall due are written on the face and back of the note, and the numbers on the back. Be sure to enter each item under its date of maturity. When notes are payable at First National Bank, Rochester, N. Y., CONDITION OF THE FIRST NATIONAL BANK, ROCHESTER, N.Y. 39 write Our Bank in the column entitled "Where Payable." The last indorser is the per son by whom the note was discounted. Leave the "To Whom Sent" column blank. Notes are numbered consecutively in the discount register, the number of eacli note being assigned by the bank first discounting it. When making entries in the discount tickler from the discount register, the numbers assigned the notes on the register are carried to the tickler. (6) After you have entered the notes in the discount tickler, arrange them in the order of maturity and compare them with the tickler, to see that you have made no errors in recording. Next find the envelope entitled "Bills and Notes Discounted" among your miscellaneous supplies. Place all the discounted paper in this envelope, which represents the discount clerk's drawer in the bank. (e) If you have entered all the discounted paper in the discount tickler, it shoulu aggregate the same as the balance of Bills Discounted in the general balance ledger. To BE ENTERED IN THE COLLECTION TlCKLER Collection Paper. Banks usually receive daily from customers and out-of-town banks notes and sight and time drafts for collection. The following collections were received in the regular way and sent for collection to the places at which they were made payable. This paper should be shown by the collection tickler. Since there is no entry to be made in the collection register when collections are paid, you need not enter the collections on hand in your collection register. Write the following dates in the collection tickler, and enter each item under the date of its maturity : Dec. 12, 13, 14, 15, 17, 18, 18 (Dec. 18 occupies two spaces), 19, 20, 26, 27, 29, 30, Jan. 2, 3, 6, 7, 9. (See form of collection tickler, pages 30 and 31.) No. 586. For Geo. W. Miner & Co., accepted draft at 10 da} r s from Dec. 5, on J. H. Wing, Lyons, for $584.75. Sent to Wayne Co. National Bank, L} r ons. This paper is due Dec. 15. Make the proper entry in the collection tickler. Do not write anything in the Remarks column. No. 562. For Walter H. Wood, accepted draft at 30 days from Nov. 14, on Wood & Keeler, Newark, for 81250. Sent to Wayne Co. National Bank, Lyons. No. 568. For A.B.Curtis & Co., John B. Sage's note,at 30 days from Nov. 15, payable at First National Bank, Lyons, for $852.75. Sent to Wayne Co. National Bank, Lyons. No. 563. For C. W. Washburn, Burke, Hone & Co.'s note, at 30 days from Nov. 14, payable at Traders National Bank, Buffalo, for $1560. Sent to Traders National Bank, Buffalo. No. 569. For Black, Adler & Co., Williams & Wood's note, at 1 month from Nov. 15, payable at Commercial National Bank, Troy, for *500. Sent to Commercial National Bank, Trow No. 532. For Ballantine Bros. & Co., Geo. B. Hill's note, at 2 months from Oct. 19, payable at Commercial National Bank, Troy, for $500. Sent to Commercial X ; 1 1 tonal Hank, Troy. No. 531. For Fidelity Mfg. ( !o., Rogers, Peet & Co.'s note, at 60 days from Oct. 13, payable at Merchants Dank, Troy, for $211.65. Sent to Commercial National Bank,;Troy. No. 530. For Martin Bros., J. N. Smith's note, at 60 days from Oct. 14. payable at Traders National Bank, Buffalo, for $1200. Sent to Traders National Bank, Buffalo 40 MODERN ILLUSTRATIVE BANKING No. 2. In your package entitled "Work for Student" find the memorandum marked "No. 2." The vouchers following, marked "No. 2," constitute all the paper in the possession of the bank for collection at this time. (a) This paper should.be entered in the collection tickler in the order of maturity. The date of maturity is marked on the face of the paper, and the number on the back. Be careful to make no mistake in recording. If in doubt as to the manner of recording in the collection tickler, refer to the model tickler, pages 30 and 31. (5) The last indorsement shows the person or firm by whom the paper was left for collection. Leave the "To Whom Sent" column blank. If a note has accumulated interest, the interest is added to the face of the note and the entire amount written in the column entitled "Amount to be Collected." (c) After you have entered the paper held for collection in the collection tickler, arrange it in the order of maturity and compare it with the tickler, to find whether it is entered properly. Next find the envelope entitled "Bills and Notes Held for Collection" among your miscellaneous supplies. Place the paper in this envelope, which represents the collection clerk's drawer in the bank. TO BE ENTERED IN THE CERTIFIED CHECK BOOK The following certified checks have not yet been paid. Check of Black, Adler & Co., certified for T. B. Smithson, $1000. Check of A. B. Curtis & Co., certified for D. M. Jennings, $1000. Enter the above checks in your certified check book (see form, page 32). Rule balancing lines across the Amount column, just beneath the last item. These checks are already in the individual ledger and should not be counted when you foot the certified check book at the close of the day. You have made the required entries in the various principal books of the bank, and are now ready for the work of Monday, Dec. 17. General Suggestions Vouchers. All paper and vouchers to be handled will be found in the envelope entitled "Incoming Vouchers." Each clerk's work is plainly marked. Numbering. The various vouchers and papers are numbered to correspond with the numbers of the transactions in this set. Before making the entries, you should care- fully compare the numbers as shown on the papers with the numbers of the transactions which you are recording. Incoming Papers. All papers which you may receive from others are called "Incoming Papers." These papers are made out just as they would be in business. Outgoing Papers. All papers which you give to others are called "Outgoing Papers." Miscellaneous Supplies. The Blank forms which are to be filled out by you are called "Miscellaneous Supplies." To familiarize you with the general details of banking, you will be required to do the work ordinarily performed by a number of officers and clerks in real business. RECEIVING TELLE I! S WORK 41 RECEIVING TELLERS WORK Monday, December 17 Duties. The receiving teller, or, as he is frequently called, the second teller, ranks in position next to the paying teller. He receives deposits from customers, and makes the original credit entries in the bank pass books. He should be rapid and accurate in counting and handling money and able to detect counterfeit bills and coin, and forged negotiable paper. In some banks, all funds received, from whatever sources, pass through the receiving teller's hands ; in others, only the deposits pass through his hands. His duties in this work will be limited to the taking of deposits and the issuing of certificates of deposit and cashier's checks. Examination of Deposits. All items which a customer presents for deposit should be carefully examined. Money should be examined for the purpose of detect- ing counterfeit bills and coins. Checks on our bank should be examined in regard to the indorsements, dates, form, and the genuineness of the signatures of the drawers. Checks on other banks should be examined in regard to dates, indorsements, and form. It matters not whether paper offered for deposit is payable to order or to bearer, the depositor should always be required to place his indorsement thereon. The Bank Pass Book. After the receiving teller has examined the deposit and compared it with the deposit ticket he should enter the amount of it in the depositor's bank book, together with the date, and his (the receiving teller's) initials ; thus : 2~ c5~6> /? / /? (7 ^^y y /"""~ _ / 2. / "-&^sT / 2-/7 / "7^ / 2./? f » / TOTAL DEPOSITED in First National Bank, ROCHESTER, NY. ^^y^rC^y / £ ion p. R.L£A?,E.. LIST EACtU'ttECX SEPARATELY Bills, Gold, . *.._ Silver, ..„ Dollars 2-k 5-/7/7 Cents. Checks, .. .._ T) « tt « « « TOTAL RECEIVING TELLER S WORK 43 Date the cash book, and enter the balance of cash on hand as shown by the general balance ledger. Short-extend the foregoing item of collection and exchange on the left side of the general cash book. (See form of general cash book, pages 24 and 25.) Xos. 7 and 8. If in doubt as to what to do, refer to instructions for No. 3. Certificates of Deposit. Certificates of deposit are practically the checks of a bank upon itself. They are usually issued to persons who do not intend to become regular customers. If the purchaser is a stranger, he should be required to write his name across the stub of the certificate in the certificate of deposit book, so that when the instrument is presented for payment the indorsement may be compared with the original signature. Form of Certificate of Deposit Xo. 0. Ralph W. Frisbee gives you this amount. #4625. for a certificate of deposit. Put the cash in your Receiving Teller's Drawer. Find your certificate of deposit book among your miscellaneous supplies, and make out a certificate in favor of Ralph W. Frisbee, for the amount of his deposit. Make the proper record on the stub of the certificate. Number the certificate 724 (see form above). Sign R. R. Rockwood's name as cashier, per your name. Note. In actual business one could not sign the cashier's name to certificates of deposit, cashier's cheeks, bank drafts, etc., without the proper authority. Tn this work it is assumed that the student has been authorized by power of attorney to sign all papers that would ordinarily be signed by the cashier. I'lace the certificate of deposit in your envelope for outgoing papers. From the stub of the certificate make out a deposit ticket (see form, page 12). I'lace the deposit ticket and cash in your Receiving Teller's Drawer. Number consecutively all certificates issued. No. lO. Be sure to cancel all checks on our bank, as explained in connection with No. 4. Xos. 11, 12, 13. Follow the preceding instructions. If you have taken care of all the deposits as instructed, you are now ready tc proceed as follows : 44 MODERN ILLUSTRATIVE BANKING (a) Take all the checks, drafts, and deposit tickets out of the Receiving Teller's Drawer. Do not take out the currency. Sort the papers you have taken out and make the following classification : Checks on our bank. Checks, drafts, etc., payable in the city. Deposit tickets. Checks, drafts, certificates of deposit, etc., payable at out-of-town banks. Put paper bands around each class of items, and on these bands write From Receiving Teller. To make the above bands, take slips of blank paper about one and one half inches wide and eight inches long. Place the slips around the items and fasten the ends together with a pin or mucilage. (5) Place the deposit tickets in the envelope marked " Individual Bookkeeper's Work for Dec. 17," which you will find among your miscellaneous supplies. (c) Take the paper payable out of town and put it in the envelope entitled " Mail Clerk's Work, Dec. 17," which you will find among your miscellaneous supplies. (c?) Take the checks, etc., payable at our bank, and place them in the Individual Bookkeeper's Work, Dec. 17. (e) Take the checks, etc., payable in the city, and place them in the envelope entitled " Note Teller's Work, Dec. 17," which you will find among your miscellaneous supplies. (/) Count the currency in the Receiving Teller's Drawer. It should aggregate 817,391 ; if it does, take a long blank envelope which you will find among your miscellaneous supplies, and on the outside write, From receiving teller to faying teller at the close of business, Dec. 17. Place this envelope in Paying Teller's Drawer, which you will find among your miscellaneous supplies. PAYING TELLER'S WORK Monday, December 17 Duties. The paying teller is the disbursing officer of the bank, and in position ranks next to the cashier. He must be thoroughly familiar with the banking business, skilled in accounting and handling money, strictly honorable and trustworthy, and a good judge of human nature. He should know the signatures of all the depositors, and be able to detect forged negotiable instruments. He is the custodian of the funds of the bank, and is required to give a bond for the safe keeping of the cash. Usually the vaults of the bank are provided with two or more doors with combination locks, one of which is known only to the cashier, and the other only to the paying teller. By this means it is impossible for either of these officials to enter the vaults alone, thus reducing the great responsibility which would otherwise be imposed upon a single individual. Paying Checks. As the principal part of the paying teller's work consists in making disbursements upon vouchers known as bank checks, it is essential that he should be thoroughly familiar with these instruments, and subject them to the most careful scrutiny before paying them. When a check is presented for payment the cashier should be sure that 1. The signature is genuine. PAYING TELLER'S WORK 45 2. The drawer's account is good for the amount named in it. 3. The person presenting it is the one entitled to receive the money. 4. It is not post dated ; that is, dated ahead. 5. It is made payable to some particular individual or company ; or specifies the title of the account or the particular object for which it was issued. 6. It specifies, both in figures and in words, the amount of money that is to be paid. These amounts should agree, and in the event of their not agreeing the check should be returned for correction. The paying teller would be relieved from responsibility in such instances by paying the amount indicated in writing, but the custom of banks is to return a check where there is a disagreement between the figmres and the words. As paying - teller, you will now make payments required for the day. • The work for [laying teller will be found under the memorandum marked "Paying Teller's Work, Dec. 17," in your package of incoming vouchers. The envelope marked "Paying Teller's Drawer" will be used to preserve the daily work of the paying teller. Memoranda of Transactions No. 14. Saturday's proof showed that the cash on hand was $317,730.22. In your package of incoming vouchers for Dec. 17 you will find an envelope marked " Paying Teller's Cash." Take the cash out of the envelope and ascertain whether it is correct or not. If the amount is found to be correct, classify your bills, i.e. put $1000 bills in one pile, $500 bills in another, etc. After the cash has been classified, put a narrow band of blank paper around each pile, and on the slip indicate in pencil the amount of that particular package. Add these amounts ; the total should be the amount of cash on hand. Lay the packages of bills out before you to use in making payments. No. 15. D. M. Morgan has presented this check to be cashed. (a) Examine the check to see if it is properly indorsed ; if it is, pay it. Always make payments in the largest bills possible. Count all money that you pay out three times. Put the money in the envelope for outgoing papers. It will be impossible for you to prove the cash if you do not exercise great care in handling your money. Re- member that any form of carelessness would not be tolerated in actual banking business. (6) Write Paid, Dec. 17, First National' Bank, in red ink, across the face of the check and place it in Paying Teller's Drawer. No. 16. Follow the instructions for No. 15. Cancel all the checks on our bank. No. 17. Unless otherwise specified, all checks, drafts, etc., presented are to be cashed. When in doubt as to what to do, refer to the instructions for No. 15. No. 18. This check does not need to be indorsed. If it were presented by any one other than cither of the drawers, an indorsement would be necessary. Nos. 19, 20. Collection on each, 75^. Deduct the charge for collection from the amount of each check before paying it. Credit Collection and Exchange in general cash book. Do not cancel these cheeks. Certified Checks. One of the most important functions of the paying teller in the larger cities is the certification of checks. 46 MODERN ILLUSTRATIVE BANKING When a check is presented for certification, the paying teller should scrutinize it the same as if the check were presented for payment, and if he has any doubt in regard to the depositor's balance he should apply to the individual bookkeeper for information before making the certification. Form of Certified Check .J<9— ^/^ ' (>, c«(>.» eosTtouiS When a check is certified, the bank becomes responsible for its payment. In many banks the cashier certifies all paper presented for certification. In some banks this work is performed by either the cashier or the paying teller. The greater portion of the business of the brokers of Wall Street (New York) is transacted by certified checks. It would be a very difficult task to count the money for these voluminous transactions, to say nothing of the trouble and care of handling it. A depositor sometimes has a check certified so that he may draw against it. A bank would be unwilling to allow a customer to deposit an uncertified check for twenty thousand dollars, and immedi- ately draw fifteen thousand dollars, before the bank had any opportunity of ascertaining whether or not the check was good. Some banks (notably those of Boston) make it a rule not to certify checks, but, instead, to take up the check, and issue therefor the bank's certificate of deposit, or a cashier's check. The certification of a check does not guarantee the indorsements, nor does it guarantee that the check is properly filled out. When a bank certifies a check, it declares, in effect, that the signature is genuine, and that the customer has the amount named in the check on deposit; but should the bank, without any carelessness on its part, certify a raised check, it can only be held for the amount for which the check was originally drawn. No. 21. Renshaw, Westermann & Co. present this check for certification. (a) Certify the check according to the form given above. Sign your name as paying teller. (5) Place the check in the envelope for outgoing papers. The drawer of a certified check is charged with the amount of the check at the end of the day from the certified check book, and not when the check is presented for payment. (^ M. y/z^ The deposits which banks make with their correspondents in different financial centers are composed principally of drafts and checks on banks, and drafts on firms and individuals in and near the city in which the correspondent bank is located, and money sent to the correspondent bank by express. The drafts remitted to correspondents are received from customers by the different tellers. This is termed "buying exchange." When a bank sells a draft on another bank it is termed " selling exchange." From the above it will be seen that the bank does not sell the same drafts (exchange) that it buys. The drafts purchased are remitted to its correspondents, and drafts are drawn and sold against the balance so created. No. 23. This check is in payment for New York draft No. 340 and exchange upon same. ( a) Find the New York draft book among your miscellaneous supplies, and fill out a blank draft. Sign it as instructed in connection with certificate of deposit No. 9. Make the proper record on the stub of the draft book. Pay out no money. Put the draft in the envelope for outgoing papers and the check in the Paving Teller's Drawer. (See form of New York draft above.) Unless otherwise instructed, always make out New York drafts in favor of the purchaser. Do not enter the exchange on New York drafts in the general cash book until the end of the day, when the total amount should be credited from the draft book. No. 24. This is for New York draft. Follow the instructions for No. 23. Number the (halts consecutively. No. 25. Presented for certification. Follow the instructions for No. 21. 48 MODERN ILLUSTRATIVE BANKING No. 26. The $3245.50 in this envelope was given you by B. T. Kline & Co., in payment for a New York draft. Face of the draft, $3240 ; exchange, $5.50. Write the draft the same as instructed in No. 23. Place the money in the Paying Teller's Drawer. Nos. 27, 28, 29. These papers are presented for payment. Collection and exchange on No. 29, 11.50. Enter the collection and exchange in the general cash book. No. 30. These three checks are presented by a messenger from the Bank of Monroe, City, for payment. Pay the sum of them in cash. Cancel the checks. No. 31. Pay this in cash. Turn to your certified check book and fill out the When Paid and the Amount Paid columns. Place the check in the Paying Teller's Drawer. No. 32. Pay this in cash, and treat it the same as No. 31. At this point take all the papers out of Paying Teller's Drawer, and classify them ; then proceed as follows: (a) Take all the checks drawn on our bank, write From Paying Teller on a slip of paper, place it around the checks, and put them in Individual Bookkeeper's Work, Dec. 17. (b) Take all checks drawn on other city banks, write on a piece of paper From Paying Teller, place it around the checks, and put them in Note Teller's Work, Dec. 17. (;mks count months for the full number of months, and days for the fraction of a month. Others ron nt the actual number of days, while some few count one day more than the actual number of Thus, a customer discounting a note Jan. 1<>, due -Fan. l'O, would be charged with interest for eleven days instead of ten. This is on the hypothesis that the iey is placed to his credit dan. 10, and he can use it on that date if he so desires, so that in reality he has the use of the money eleven days. BANKING — 4 50 MODERN ILLUSTRATIVE BANKING As discount clerk, you will take care of paper offered for discount. The work for this department of the bank will be found among your incoming vouchers under the memorandum marked "Discount Clerk's Work, Dec. 17." The daily work of the discount clerk will be kept in the envelope marked " Bills and Notes Discounted." Memoranda of Transactions You already have a number of notes on hand from previous business in the envelope marked " Bills and Notes Discounted." See if these papers are arranged with reference to maturity ; if not, arrange them, and proceed as follows : («) Turn to your discount tickler. Take all paper maturing on Dec. 17, and compare it with the tickler. Some of the notes and drafts have been sent to out-of- town banks for collection, and these, of course, you should not have on hand. The others should check with the tickler ; if they do, place them in Note Teller's Work for Dec. 17. (6) Place the remaining notes and bills back in Bills and Notes Discounted. The following paper is offered for discount and accepted by the cashier. No. 33. Presented by Martin Bros. ; discounted at 6%. Proceed as follows : (a) Determine when the note is due, and indicate this in red ink, as shown below. Form of entering Due Date on Note Some banks have a special stamp with which to place the number and the due date on a note. Others write the due date across the face or in the lower left-hand corner in either red or black ink. The student may use red ink in making such records. (6) Count the exact number of days from Dec. 17 to the maturity of the note, and find the discount. Be sure your discount is correctly calculated. Do not make mistakes. (c) Enter the note in the discount register. (See model discount register, pages 24 and 25.) Number the note 450, and from this on number all notes consecutively. Where there is no indorsement other than that of the discounter, it is unnecessary to fill out DISCOUNT CLERK S WORK 51 column entitled " Indorser and Collateral " in the discount register. If the note bears several indorsements, record the name of the indorser preceding the discounter. (c?) On the back of the note, in red ink, write the number and the date of maturity. Place note in the Bills and Notes Discounted envelope. No. 34. Discounted at 6%. Follow directions for No. 33. Xotes with Accumulated Interest. If a note which has accumulated interest is offered for discount, the amount of the interest should be ascertained, and both the interest and the value of the note at maturity should be indicated in red ink on the face of the note. If the note is payable out of town, this should be done before the note is sent away for collection. The following illustration represents a note treated in the manner described above. Interest-bearing Note with Value at Maturity Indicated 7^??-ZS^Z7^7^/^ > Ua/ti€//Ucetiw/tmm^nJ6leJ// / ^ //,- : iti. ^ ir??^ ). From the discount register enter each note or draft in the discount tickler under the date on which it becomes due (see model, pages 26 and 27). Check the items transferred. All paper payable oul of town should be sent away from 1<> to 20 days before it is due. 10 x a mi in' the discount tickler, and see if you should send ;m\ notes away : if so, til! out the To Whom Sent column in the tickler, and write letters to hanks to which paper is to be sent. Send Nos. 430 and 438 to Commercial National Bank, Troy; scud 52 MODERN ILLUSTRATIVE BANKING No. 452 to Chemical National Bank, New York. Use printed blanks which will be found among your miscellaneous supplies. (See model letter, below.) Write "Per" and your own name beneath "R. R. Rockwood, Cashier." Form of Letter advising Paper sent for Collection and Credit .'" .y J JS de0ria/$% ' ( hssw s^ .2 tfy/3 - f — =*• —v zz^ Esq., Cashier. Dear Sir : J enclose for collection and credit as stated below : Very respectfully, W. S. SMITH, Cashier. NO. OR DATE. AMOUNT. 7* / ^f<-r ^C-^-Z^' AJ : 7>^.. ^W styrf ^/JLyu^^^ ^A^/I^y^^^^ 2z£-2jZ. Indorse the notes, etc., sent as follows: Pay to the order of (Name of Bank) (Address) First National Bank, Rochester, N.Y., R. R. Rockwood, Cashier, Per (your name). COLLECTION CLERK'S WORK 53 The following is a list of our regular correspondents and the names of their cashiers : Chemical National Bank, New York; cashier, H. A. Seavey. Farmers National Bank, Philadelphia, Pa.; cashier, M. N. Newberry. Traders National Bank, Buffalo, N.Y.; cashier, Robert B. Watson. Commercial National Bank, Troy, N.Y.; cashier, W. B. Smith. Wayne County National Bank, Lyons, N.Y.; cashier, A. M. Hinman. Have the letters approved by your teacher, and then place them in the envelope for outgoing papers. Examine your discount tickler, and see if there are any bills or notes maturing to-day that have been sent to other banks; if so, write Charge and the initials of the bank to be charged in the Remarks column of the discount tickler. (See model, pages 26 and 27.) Bills discounted sent away for collection should be charged on the day of their maturity to the banks to which they were sent. COLLECTION CLERK'S WORK Monday, December 17 Duties. The collection clerk takes charge of all paper received by the bank for collection, and makes the original entries for such upon the proper books of record. He should have a thorough knowledge of the laws and customs relating to promissory notes and drafts, and the rights and duties of parties to such paper. Collection Paper. Paper received by a bank for collection comes from two sources : customers and out-of-town banks. Such paper does not become the prop- erty of the bank. The bank acts only as agent for the owners of the paper^ charging a fee, called "collection," for its services. Entering Collections in the Bank Pass Book. Notes, sight and time drafts left for collection should be entered in the back of the depositor's bank book. When the depositor has a number of collections, it is customary for him to list them on a memo- randum slip, or to record them in a book which is especially provided for this purpose. The teller may receipt for the entire number of items at the bottom of the memoran- dum slip, or immediately beneath the items in the book. Many banks enter paper left for collection in the same part of the bank book as the deposits, and when paper is not collected the amount of it is not extended in the money column. This is termed "entering short." Some banks give no receipt whatever for the paper left for collection. While such practice is quite common in many localities and very convenient for the banks, it can hardly be encour- aged from the standpoint of the accountant. In the event that the paper is lost without being entered on the books of the bank, there would be absolutely nothing to show that the depositor had left it there. Numbering Collections. Some banks number all paper received for collection, the same as paper received for discount. Other banks do not number collections unless such paper already bears a number, in which case the number it bears is recorded. As n matter of convenience for the student it has been thought best for him to number all collections consecutively, the same as he has learned to number discounts. Timing-. When paper is received for collection, the collection clerk should mark on each note or draft the date of maturity (see model, page oO). A careful clerk will always revise the timing of his notes to guard against any errors. II" he should time a note too late, and the drawer should fail to pay, the bank would be liable to the owner. 54 MODERN ILLUSTRATIVE BANKING Notice of protest must be given the indorsers not later than the close of the day following that on which the paper was due, provided the indorsers live in the city in which the paper is protested. If they live at dis- tant points, the notices must be mailed to them not later than the day following the due date of the paper. As collection clerk, you will attend to the collection of paper due to-day, and receive all notes, bills, etc., left for collection. Your work will be found under the memorandum marked "Collection Clerk's Work, Dec. 17." The envelope marked "Bills and Notes Held for Collection" will be used as collection clerk's drawer in the bank. Memoranda of Transactions You already have some notes, etc., on hand in the envelope for Bills and Notes Held for Collection. Proceed as follows : (a) Turn to collection tickler, and compare the paper on hand with that in the tickler. The tickler shows which papers have been sent away. If everything is found correct, put the paper payable in the city Dec. 17 in Note Teller's Work, Dec. 17. (6) Place the remaining notes and drafts back in Bills and Notes Held for Collection. The following paper has been left for collection : No. 37. From Buffalo, Rochester & Pittsburg R. R. Co. (No. 600). Chas. M. Deville (No. 601). Walter H. Wood (No. 602). A. B. Curtis & Co. (No. 603). The last indorsement shows by whom the paper was left for collection. (a) Find the maturity of each item and write it on the face of the draft in red ink as shown on page 50. (b) Enter each of these items in the collection register (see form, pages 28 and 29). Number the collections consecutively, beginning with No. 600. If the paper is not indorsed by any one other than the person for whom it is collected, the Indorser column is left blank. (c) Write the number and date of maturity on the back of each item in red ink and put the paper in Bills and Notes Held for Collection. From the collection register make the proper entries in the collection tickler. Check the items transferred. No. 38. This is from your Buffalo correspondent. The paper is already numbered on the back, but you should number it above the number of the Buffalo bank. (a) Number consecutively from collection register. Number the items in the order that they are listed on the envelope. (5) Time the items the same as you timed No. 37. (c) Enter the paper in collection register, and then place it in Bills and Notes Held for Collection. Place the letter in the Letter File, which will be found among miscel- laneous supplies. (d) From the collection register make the proper entries in the collection tickler. No. 39. Proceed as follows : (a) Compare the items enumerated with the items for corresponding numbers in your collection tickler. If they agree, check the items in the letter of advice. NOTE teller's work 55 (5) Add the columns of the letter. See if the sum of the collection and exchange plus the total proceeds is equal to the footing of the Amount column. ( N. Y. 82). The decisions of some other state courts are conflicting. In case of doubt, it is better to have the maker give bis check lor the note. An accepted draft payable at a certain bank would come under the same rule as a note. As note teller, you will attend to the collection of paper due to-day. Your work will he found under memorandum marked "Note Teller's Work, Dec. 17." The 56 MODERN ILLUSTRATIVE BANKING envelope marked "Note Teller's Drawer," which will be found among your miscel- laneous supplies, will be used to preserve the daily work of this department. The following notes were handed over from the discount department : Nos. 439, 368, 390. Find these papers in the envelope marked "Note Teller's Work for Dec. 17," and see if the numbers correspond. . No. 40. This is from Bank of Monroe in payment for discount No. 439. Put the money in the Note Teller's Drawer. Indorse the note over to Bank of Monroe (see form under transaction No. 46), and put it in your envelope for outgoing papers. Turn to the discount tickler, check the amount, and write Paid 12/17 in the Remarks column. No. 41. From James P. Kennedy & Son for No. 368. Put the money in the Note Teller's Drawer ; cancel the note and put it in your envelope for outgoing papers. No. 42. From Traders National Bank in payment for discount No. 390. Proceed as instructed in No. 40. The following paper was handed over from the collection clerk's department: Nos. 592, 596, 588, 565. Find these papers in the envelope marked "Note Teller's Work, Dec. 17," and see if numbers agree. No. 43. No. 596 should be marked Charge K. B. $• Co., 12/17 in the Remarks column of the collection tickler. Cancel the draft and put it in the envelope for outgoing papers. No. 44. This amount, 8240.56, is from W. W. Osgood & Co., in payment for col- lection No. 592 and interest. Your bank charges 25 $ for collection. Credit Collection and Exchange in the general cash book. Write Paid 12/17 ; our coll. 25$ in the Remarks column of the collection tickler. Cancel the note and place it in envelope for outgoing papers. Place the cash in the Note Teller's Drawer. No. 45. This amount, $1500, is in payment for collections Nos. 588 and 565. Write Paid 12/17 in the Remarks column of the collection tickler. Cancel each note, and place it in the envelope for outgoing papers. Place the cash in the Note Teller's Drawer. No. 46. This amount, $2948.29, is for city cash paper which you have collected. It is in payment of the following checks : Chas. M. Harrison, $162.65 Chas. W. Gray & Co., 1249.62 The Knowlton Paper Box Co., 1264.52 Warriner & Co., 121.50 Kelley, Jones & Co., 150.00 Find these checks in " Note Teller's Work, Dec. 17," and indorse them as follows : Pay to the order of (Name of bank on which drawn) First National Bank, R. R. Rockwood, Cashier. Per (your name). Place them in the envelope for outgoing papers. It is assumed that bank messengers brought in the money for these checks from the banks on which they are drawn. MAIL CLERKS WORK 57 Count your cash. You should have on hand 120,938.85. Put this in a blank envelope, and on the outside write From Note Teller to Paying Teller, Bee. 17. Place this envelope in Paying Teller's Drawer. MAIL CLERK'S WORK Monday, December 17 Duties. The mail clerk usually keeps an account with his bank's dealings with out-of-town banks. He handles all remittances of cash items, either to or from these banks. In this way such items are kept entirel}* separate from the collections which are handled by the collection clerk. This work will be found under memorandum marked "Mail Clerk's Work, Dec. 17." All papers received to be retained by you should be placed in Mail Clerk's Drawer, which will be found among your miscellaneous supplies. No. 47. This is from your correspondent at Lyons, N.Y. Proceed as follows: (a) Compare the items enumerated in the letter with the accompanying vouchers, checking the amounts in the letter with a pencil if they agree. (5) Add the columns of the letter, and if found correct, place the vouchers and the letter in your Mail Clerk's Drawer. No. 48. This is from your Buffalo correspondent. Handle the same as No. 47. No. 49. This is from your Philadelphia correspondent. Take the papers out of the Mail Clerk's Drawer, and proceed as follows : (a) Take all the letters you have received from correspondents and from them enter the total amounts to be credited to the different banks in your remittance register (see form, pages 30 and 31). Place the letters in the Letter File. (b) In the envelope marked "Mail Clerk's Work, Dec. 17," you will find a number of checks, drafts, etc., handed over from the receiving teller, paying teller, and note teller, to be sent away to other banks. Take these out and sort them, putting all those to be sent to any particular bank together, and enter them in your remittance register. Remember to itemize in this book everything that is sent away. Remittances that we receive need not be itemized, as the letters containing remittances can be filed away fur reference. Whenever you remit paper for credit, be sure to send checks in the vicinity of Troy, N.Y. , to Commercial National Bank, Troy ; checks in the vicinity of Buffalo, X.Y.. to Traders National Bank, Buffalo; and so on. Checks on banks in other places near you, but not in the vicinity of your regular correspondents, should be scut direct to the banks on which they are drawn, with the request that proceeds be remitted by New York draft. Accounts will have to be opened with these banks, although they are not regarded as regular correspondents. Send the checks on Syracuse hank to Troy, X.Y.; send the Peekskill check and the New Haven check t<> Chemical National Bank; send tin- Oswego check direct to Central National Rank, Oswego (cashier, George W. Savage); send all the other papers to regular correspondents. 58 MODERN ILLUSTRATIVE BANKING Make the body of your letter to the Oswego bank read: "I inclose for collection and immediate returns the items stated below." Form of Advice of Remittance of Cash Items GEORGE W. THAYER, PRESIDENT. W. B. SMITH, Cashier. HENRY C. BREWSTER, ViCE-PRESiOENT. BYRON D. McALPINE, Vice-President. CAPITAL, $150,000. €tn/& '* S^?-f t -/& — Dear Sir : I enclose for credit to our account items as stated below. Very respectfully, W. B. SMITH, Cashier. '/-£L / f~ _Z f- /a r ON WHOM DRAWN. '^^/ 7s^ Z ^7-V-£^?- >. /-x^r J^^^ t ~Ar2^7?-ff-0i/^t. C^U^7^ Total */■ # / 2-0 -?- £_&. 6 ( 7 P 2-t7 /? tf ~7 After making the entries in the remittance register, write letters to the different banks. Use blanks which you will find among your miscellaneous supplies. (See form of letter of remittance above.) After writing the letters, indorse the various items that are to be sent as follows : INDIVIDUAL BOOKKEEPER'S WORK 59 Pay to the order of (Name of bank) (Address) First National Bank, Rochester, N.Y., R. R. Rockwood, Cashier, Per (your name). (a) Compare the items very carefully with the amounts shown in the letters, after which compare the letters with the items shown in the remittance register. If they agree, put the remittances in the letters, direct the letters to the proper banks, and hand them to your teacher for approval. After he has approved the letters and re- turned them to you, place them in your envelope for outgoing papers. (b) Next take your draft book, tilled out by you as paying teller, and foot and rule it. Carry the footing of the Face column to the credit of Chemical National Bank in your remittance register, and the footing of the Exchange column to the credit of Collection and Exchange on the left-hand side of the general cash book. (c) Turn to the collection tickler. Under Dec. 12, No. 531, is marked. Charge C.N.B. 12/17 ; bank's coll. 50 $. This means that the Commercial National Bank has reported the collection of that amount, and that it should be charged for the amount, less 50^. Charge Commercial National Bank in the remittance register for the proceeds. Treat No. 569 in a similar manner. ((T) Take three slips of paper and write From Mail Clerk upon them. Fasten a slip around the checks on our bank, and place them in the Individual Bookkeeper's Work, Dec. 17. (e ) Place the checks, if anj^, on out-of-town banks in Mail Clerk's Work, Dec. 17. (/) Place the checks, drafts, etc., payable in the city in Note Teller's Drawer. (#) Turn to your discount tickler. Under Dec. 17 discounts Nos. 369 and 300 are marked Charge T.N.B. Charge Traders National Bank with each of these discounts. (Ji) Rule and foot the remittance register. INDIVIDUAL BOOKKEEPER'S WORK Monday, December 17 Duties. The individual bookkeeper has charge' of the accounts with depositors. In many banks there are several individual bookkeepers, the individual ledgers being sub- divided in consequence of the large number of accounts therein. The individual bookkeeper should be rapid and accurate in figures, should write a good, plain, business hand, and possess a great deal of patience, for it is generally his duty to meet main <>i the depositors of the bank and answer numerous questions regarding their accounts. No mention of anything regarding a depositor's account should be made to any one outside of the bank, other than the depositor or his representative. The depositor's bank book is usually balanced by this clerk. 60 MODERN ILLUSTRATIVE BANKING As individual bookkeeper, you should now turn to the envelope marked " Indi- vidual Bookkeeper's Work, Dec. 17th." (a) Sort the checks into piles arranged in the alphabetical order of the names of .the drawers. (b~) Begin with the letter B and enter the checks in the Checks in Detail column of the individual ledger (see form, page 34 a). When you have entered the checks under B, take up those under C and proceed in the same manner. As you enter the checks, place them face downward in a pile so that when you have finished the last check you have entered is on the top of the pile. (er 18 The following paper has been discounted. No. 8:j. For Geo. W. Miner & ('<»., draft of J. 1'. Parsons & Co. for $9500, payable at (.in- hank 30 days from Dec. 1 ; discounted at 6%. I • .ant the exact number of days from Dec. L8 to the date of maturity and find the discount. Make tin- proper entries in discount register. No. 84. For Walter H. Wood, note of Lord & Taylor for $8250, payable at our bank 2 months from Nov. 7; discounted at 6%. No. 85. for Fidelity Mfg. Co., note of Lord & Taylor for 87500, payable at our bank 30 days from Dec. 7 ; disc ited at »;%. BANKING — 5 66 MODERN ILLUSTRATIVE BANKING No. 86. For C. W. Beach & Bros., note of Hathaway & Hall for $1000, indorsed by B. B. Babbitts & Son, payable at Commercial National Bank, Troy, N.Y., 1 month from Dec. 7. Discounted at 6% ; collection and exchange, $1.50. No. 87. For Ballantine Bros. & Co., note of Howard & Endrews for $2450, indorsed by Morgan & Benedict, payable at Commercial National Bank, Troy, N.Y., 30 days from Dec. 8. Discounted at 6% ; collection and exchange, $4.50- Foot and rule your discount register. If a note is discounted for some one who is not a depositor, Sundry Discounts should be credited in the individual ledger for the proceeds. Such notes should be entered in the discount register the same as notes offered for discount by regular depositors, and S. D. should be written in red ink after the name of the person or firm in the For Whom Discounted column. The persons offering paper for discount in this manner usually draw in cash the proceeds of the notes at the time they are discounted. This may be done by check or receipt, the latter being commonly used. Some banks credit Cashier's Account for the proceeds of notes discounted for persons other than depositors. In such cases, the cashier always issues a check to the discounter. From the discount register make the proper entries in the discount tickler. The following discounted paper has been sent away for collection. Nos. 457 and 458 to Commercial National Bank, Troy. Make the proper entries in the To Whom Sent column of the discount tickler. All paper payable at out-of-town banks maturing to-day should be marked Charge and the initials of the bank to be charged in the Remarks column of the discount tickler. COLLECTION CLERK'S WORK Tuesday, December 18 The following paper has been received for collection. Enter the items in the col- lection register. No. 88. From Chas. M. Deville, sight draft on Raymond Bros, for $260.10, dated Dec. 18, payable at Philadelphia. No. 89. From Walter H. Wood, sight draft on Gray, Morgan & Co. for $1200, dated Dec. 18, payable at Philadelphia. No. 90. From Keeler, Boynton & Co., sight draft on Smith, Perkins & Co. for $2142.16, dated Dec. 18, payable at Buffalo. No. 91. From Black, Adler & Co., sight draft on D. M. Garson & Co. for $642.68, dated Dec. 18, payable at Buffalo. No. 92. From Fidelity Mfg. Co., note of A. S. Warner for $152.16, payable at our bank 10 days from Dec. 10. No. 93. From Martin Bros., note of Wm. J. Amos & Co. for $200, payable at Bank of Monroe, City, 15 days from Dec. 15. The following paper has been received from other banks for collection. No. 94. From Farmers National Bank, Philadelphia, sight draft on E. M. Mills & Son for $500, dated Dec. 12, payable at Rochester, indorsed by Geo. W. Schwartz ; sight draft on Baker Bros. & Co. for $652.17, dated Dec. 14, payable at Rochester, indorsed by Halliday & Halliday ; acceptance of Thomas M. Pratt & Son for $320.50, NOTE TELLER'S WORK 67 payable at Bank of Monroe, City, 30 clays from Dec. 10, indorsed by M. D. Klett ; note of Myron T. Carey for $900, payable at Bank of Monroe, City, 30 days from Dec. 8, with interest at 6%, indorsed by W. W. Catchpole. No. 95. From Wayne County National Bank, L} T ons, note of Chas. M. Deville for $1200, payable at our bank 15 days from Dec. 10, with interest at 6%, indorsed by Geo. T. Milem & Co. ; note of Walter H. Wood for $400, payable at our bank 1 month from Dec. 1, indorsed by R. E. Gallagher; sight draft on Morrison & Henry for $1000, dated Dec. 17, payable at Rochester, indorsed by Michael M. -Winters. No. 96. From Traders National Bank, Buffalo, acceptance of C. M. DeCarr for $600. payable at Bank of Monroe, City, 1 month from Dec. 3, indorsed by C. C. Cooper & Bro. ; note of Steefel, Moll & Co. for $126.52, payable at Bank of Monroe, City, 1 month from Dec. 1, indorsed by Briggs, Hinman & Co. ; sight draft on B. K. Munn & Co. for $500, dated Dec. 15, payable at Rochester, indorsed by T. B. Welch. From the collection register make the proper entries in the collection tickler. Paper payable at sight should be entered under Dec. 18, unless time is allowed for the collection of such paper, in which case it should be entered under the estimated date of collection. For example : A sight draft, dated Dec. 17, on which ten days are allowed for collection, should be entered under Dec. 27, instead of Dec. 17. Time for collection is allowed only when so stated in the text book. Letters of advice have been received from other banks stating that the followinsf paper has been collected and the proceeds placed to our credit. No. 97. From Traders National Bank, Buffalo, No. 530, collected for Martin Bros. ; No. 563, collected for C. W. Washburn. Collection and exchange charged us on each, $1.25. In the Remarks column of the collection tickler for each item write Charge T. N. B. 12/18; bank's coll. $1.25. No. 98. From Wayne County National Bank, Lyons, No. 562, collected for W. II. Wood ; bank's collection and exchange, $2.00. No. 586, collected for Geo. W. Miner & Co.; bank's collection and exchange, $1.10. No. 568, collected for A. B. Curtis & Co.; bank's collection and exchange, $1.70. Follow the instructions for No. 97. The following collection paper has been sent to other banks for collection. Nos. 607 and 608 to Farmers National Bank, Philadelphia ; Nos. 609 and 610 to Traders National Bank, Buffalo. Make the proper entries in the To Whom Sent column of the collection tickler. NOTE TELLER'S WORK Tuesday, Dcccrnler 18 The following paper received from the discount clerk has been collected as stated below . No. 99. No. -'580. charged to Keeler, Boynton & Co., the makers. Turn to your discount tickler, and write Charge K.. Ti. ,('• Co. in the Remarks column. No. loo. No. 394, charged to Ballantiue Bros. & Co. Follow the instructions for No. 99. 68 MODERN ILLUSTRATIVE BANKING No. 101. Note No. 376, not being paid, is protested for non-payment. Write Protested ; fees, $3.00 in the Remarks column of the discount tickler. When the above transaction is recorded in the general cash book, it will stand : Protested Paper debited and Bills Discounted credited. Some banks make no entry at all when paper is protested, but leave all such paper in the Bills Discounted account until it is paid, a judgment is received, or it is found to be worthless. In case a judgment is obtained, Judgment account is debited for the entire amount — face of note, interest, and costs — Bills Discounted account is credited for the face of the note, and Interest account for the interest upon it. In case the- judgment proves to be worthless, Loss and Gain account is debited and Judgment account credited. The following paper received, from the collection clerk has been collected as stated below. No. 102. No. 580, charged to maker. Make the proper entry in the Remarks column of the collection tickler. No. 103. Received from the Bank of Monroe, City, New York draft for $1550.60, in payment for collections Nos. 570 and 600. Write Paid 12/18 in the Remarks column of the collection tickler for each collection. No. 104. No. 536, charged to Martin Bros. No. 105. Received cash $2152.17 in payment for collections Nos. 613, 614, and 619. Our collection and exchange on Nos. 613 and 614, $1.00 each ; on No. 619, $1.50. Credit Collection and Exchange in the general cash book for each of our charges for collection on above ; also make the proper entry in the Remarks column of the collection tickler. No. lOO. Received cash $500 in payment for collection No. 622. Our collection and exchange, $1.00. No. 107. Received from Bank of Monroe, City, New York draft for $2425.37, in payment for checks received and forwarded to that bank. Make no entry at this time. The New York draft will be sent away by the mail clerk. No. 108. Received from Traders National Bank, City, a New York draft for $1000.50, in payment for checks received and forwarded to that bank. Follow the instructions for No. 107. No. 109. Received cash $752.95 in payment for checks received on Mechanics National Bank, $552.95, and Benjamin Hilton & Co.'s sight draft, $200. The amount of currency in your hands as note teller is $3405.12. This amount is given to paying teller. You have on hand cash items to the amount of $2625.98. MAIL CLERK'S WORK Tuesday, December 18 The following remittances of cash items have been received from other banks. Enter the total of each remittance to the credit of the proper bank in your remittance register* No. HO. From Farmers National Bank, Philadelphia. Sight draft on Vacuum Oil Co., City, for $600 ; certified check of Keeler, Boynton & Co. on our bank for $1200 ; check of Fidelity Mfg. Co. on our bank for $562.12. Letter is dated Dec. 15. mail clerk's work 69 No. 111. From Commercial National Dank, Troy, N.Y. Cheek of Arnold, Ames & Co. on Wayne County National Bank, Lyons, N.Y., for $126.52; check of L. T. Meachum on Wayne County National Bank, Lyons, N.V., for 8150. Letter is dated Dec. 17. No. 112. From Wayne County National Bank, Lyons, N.Y. Sight draft on Bell Telephone Co., City, for $1562 ; check of J. W. Walton on Mechanics National Bank, City, for 1162.46 ; check of Geo. W. Miner & Co. on our bank for 8506.20; check of Wortbington Bros. & Co. on Bank of Monroe, City, for $301.52. Letter is dated Dec. 17. You have sent to other banks the following paper received this day from the receiving teller, paying teller, and note teller. Make the proper entries in the remittance register. No. 113. To Chemical National Bank, New York. Draft of Second National Bank, Syracuse, N.Y., on Exchange National Bank, New York, for $1624.31, dated Dec. 15, indorsed by Martin Bros. ; draft of Union Trust Company, Auburn, N.Y., on Exchange National Bank, New York, for $1500, dated Dec. 11, indorsed by Martin Bros. ; draft of Fidelity Trust Company, Oswego, N.Y., on Exchange National Bank, New York, for $150, dated Dec. 12, indorsed by Black, Adler & Co. ; draft of Union National Bank, L T tica, N.Y., on Chemical National Bank, New York, for $210, dated Dec. 12, indorsed by Black, Adler & Co. ; draft of Bank of Monroe, Cit} r , on Chemical National Bank, New York, for 81550.60, dated Dec. 18; draft of Bank of Monroe, City, on Exchange National Bank, New York, for $2425.37, dated Dec. 18 ; draft of Traders National Bank, City, on Ninth National Bank, New York, for 81000.50, dated Dec. 18. No. 114. To Wayne County National Bank, Lyons, N.Y. Sight draft of T. J. Stewart & Co. on Osgood, Tower & Co., Lyons, N.Y., for 8122.43, dated Dec. 17, indorsed by Martin Bros. ; check of Arnold, Ames & Co. on Wayne County National Bank, Lyons, N.Y., for $126.52, dated Dec. 14, indorsed by Daniel W. Arnold; check of L. T. Meachum mi Wayne County National Bank, Lyons, X.Y., for $150, dated Dec. 14, indorsed by Samuel P. Gould; check of W. B. Shearer on Wayne County National Bank for $1320.40, dated Dec. 15, indorsed by Ballantine Bros. & Co. No. 115. To Traders National Bank, Buffalo, N.Y. Certificate of deposit in favor of 15. E. Valentine from Union Trust Company, Buffalo, N.Y., for $1260, dated Dec. 1, indorsed by Black, Adler & Co.; sight draft (if Fidelity Manufacturing Co. on L. P. Ross & Co., Buffalo, X.Y., for $] 2(14.50, dated I >'•<•. 18, indorsed by Fidelity Manufacturing Co.; cheek of S. S. Slover & Co. on Traders National Bank, Buffalo, N.Y., for $120, dated Dec. 15, indorsed by Ballantine Bros, ov Co. No. 116. To Commercial National Bank, Troy, N.Y. Check of L. L. Bender on Commercial National Bank, Troy, N.Y., for $421.62, dated Dec. 15, indorsed by ('has. M. Deville; cheek of F. F. Findlay on Commercial National Bank, Troy, N.Y., for $750, dated Dec. 15, indorsed by E. E. Frey. No. 117. To Farmers National Bank, Philadelphia. 70 MODERN ILLUSTRATIVE BANKING Check of R. D. McLean on Farmers National Bank, Philadelphia, for $200, dated Dec. 10, indorsed by C. W. Washburn ; check of Stewart McVean on Farmers National Bank, Philadelphia, for $150, dated Dec. 10, indorsed by C. W. Washburn ; check of Masten & Wolven on Farmers National Bank, Philadelphia, for $126.50, dated Dec. 7, indorsed by R. S. Traver ; draft of Bradford National Bank, Bradford, Pa., on Quaker City National Bank, Philadelphia, for $420.62, dated Dec. 10, indorsed by C. B. Moore. Foot your draft book and enter the footings in the remittance register and cash book as explained in the work of Dec. 17. Turn to the collection tickler and charge the proceeds of Nos. 530, 563, 562, 586, and 568 to the banks to which they were sent. Credit Farmers National Bank, Philadelphia, in the remittance register for the proceeds of collections Nos. 613 and 614. Also credit Wayne County National Bank, Lyons, for the proceeds of collection No. 619, and Traders National Bank, Philadelphia, for the proceeds of No. 622. Turn to the discount tickler, and charge Wayne County National Bank, Lyons, in the remittance register for discount No. 375. Also charge Commercial National Bank, Troy, for discounts Nos. 396 and 378. Rule and foot the remittance register. INDIVIDUAL BOOKKEEPER'S WORK Tuesday, December 18 The following checks on our bank were received by the receiving teller and mail clerk and passed on to the individual bookkeeper to be recorded in the individual ledger. Enter each item in the Checks in Detail column of the individual ledger. No. 118. From the receiving teller. Fidelity Manufacturing Co., $2016; Fidelity Manufacturing Co., $1050 ; Martin Bros., $240.10; Chas. M. Deville, $1200; A. B. Curtis & Co., $12,000; C. W. Wash- burn, $6221; C. W. Beach & Bros., $1260; Buffalo, Rochester & Pittsburg R. R. Co.. $1352.18 ; certificate of deposit, $4625. No. 119. From the mail clerk. Certified check, $1200; Fidelity Manufacturing Co., $562.12; Geo. W. Miner & Co., $506.20. Fill out the When Paid and the Amount Paid columns of the certified check book for the $1200 check. The paying teller paid checks on our bank as shown by the paying teller's sheet From Paying Teller to Individual Bookkeeper, Dec. 18. Enter each item in the Checks in Detail column of the individual ledger. Foot your certified check book. Debit the drawers for the separate checks, in the Checks in Detail column, and credit Certified Checks in the Deposits column for the total. Turn to the discount tickler, Dec. 16. In the Checks in Detail column of the in- dividual ledger charge Ballantine Bros. & Co. for No. 394, and Keeler, Boynton & Co. for No. 380. GENERAL BOOKKEEPER'S WORK 71 Turn to the collection tickler, Dec. 18, and charge Martin Bros, for No. 536, and Lord & Taylor for No. 580. Extend the amounts in the Checks in Detail column to the Total Checks column. Be sure that your additions are correct. The cashier's check issued during the day as shown on the stub of the cashiers check book should be posted to the credit of Cashier's Account in the Deposits column of the individual ledger. Deposits were received by the receiving teller as shown by the sheet From Receiving Teller to Individual Bookkeeper, Dec. 18. Enter each item in the Deposits column of the individual ledger. From the discount register credit depositors for the amounts in the Proceeds Credited column. The following credits should be made from the collection tickler: Dec. 13, Martin Bros, for the proceeds of No. 530 ; Dec. 14, Walter H. Wood and C. W. Washburn for the proceeds of Nos.. 562 and 563, respectively ; Dec. 15, Geo. W. Miner & Co. and A. B. Curtis & Co. for the proceeds of Nos. 586 and 568, respectively ; Dec. 18, Black. Adler & Co. for No. 536 and No. 580; C. W. Washburn for No. 570; B., R. & P. R. R. Co. for No. 600. Extend the balances in the individual ledger, foot the columns, and prove the work. GENERAL BOOKKEEPER'S WORK Tuesday, December 18 No. 120. Following the instructions for Dec. 17 make the entries in the general cash book, as follows: (a) Post the footings of the discount register to the general cash book. (b) Rule and foot the discount tickler. Carry the footing to the general cash book. (c) Debit Protested Paper from the discount tickler for discount No. 376. (d) Post the footing of the Total Checks and Deposits columns of the individ- ual ledger to the general cash book. (e) Post the totals of the remittance register to the general cash book. (/) Prove the cash. The difference between the sides of the cash book should equal the amount in the hands of the paying teller, plus the total of city checks, etc., in the hands of the note teller. The paying teller had on hand, Dec. 17, $351,561 .01 . Dec. 18 he paid out $2<>«».">.:52, received from the sale of New York drafts $1567.75, from the receiving teller $16,1.11, and from the note teller $3405.12, making a balance of • $370,50:}. 10.. n hand at the close of Dec. 18. The note teller has cash items on hand amounting to $2625.98. The balance of the general cash book should therefore be $;>>3,219.14. (//) If everything proves, rule, foot, and post the cash book as explained Dec. 17. (A) Post the items of the remittance register to the general balance ledger. (i) Extend the balances in the general balance ledger. licmember that the red ink balances should at all times equal the sum of the black ink balances. If your work proves, make a statement of your general balance ledger similar to the following form: 72 MODERN ILLUSTRATIVE BANKING General Statement of First National Bank, Dec. 18, 19 — Resources. Liabilities. -t Bills Receivable as under: 1. Bills Discounted 2. Protested Paper 120000 3767 10 123767 58000 2500 1683 80799 32348 10 19 86 92 12. Capital Stock 13. Surplus Fund 14. Undivided Profits 15. Circulation 16. Banks we owe Due depositors : 17. Cashier's Checks 18. Certificates of De- posit 19. Certified Checks 20. Notary Fees 21. Individual Deposits 22. Interest and Dis- count 23. Collection and Ex- change 900 500 1500 27 132000 13 100000 11750 2518 45000 200 134927 3483 1219 42 Stocks and Bonds : 3. U. S. Bonds to Secure Circulation 4. Premium on U. S. Bonds 5. Other Stocks and Bonds 50000 1500 6500 01 85 92 Properties : 6. Furniture & Fix. 62026 2250 16523 13 Current Expenses : 7. Sundry Expenses : Banks owing us : 8. National 9. Redemption Fund 10. Due from Reserve Agents 7) 18 11. Cash on hand as under : Bills Fractional Items Cash Papers 30000 148 2200 299099 07 299099 07 1 HOW TO COMPILE A DAILY STATEMENT 1. Balance of Bills Discounted from the general balance ledger. 2. Balance of Protested Paper from the g. b. 1. 3. Balance of U. S. Bonds to Secure Circulation from the g. b. 1. 4. Premium on U. S. Bonds from the g. b. 1. 5. Balance of Stocks and Bonds from the g. b. 1. 6. Balance of Furniture and Fixtures from the g. b. 1. 7. Balance of Sundry Expenses from the g. b. 1. 8. Amount owing us by national banks other than those which are approved reserve agents, as shown by the g. b. 1. 9. Amount deposited with the United States Treasurer for the redemption of circulation, as shown by the g. b. 1. 10. Amount we have deposited with national banks which are approved reserve agents, as shown by the g. b. 1. (National Park Bank, New York.) 11. Cash on hand, as shown by the g. b. 1. 12. Capital Stock paid in, as shown by the g. b. 1. 13. Amount of Surplus Fund, as shown by the g. b. 1. 14. Amount of Undivided Profits, as shown bj r the g. b. 1. 15. Amount of Circulation, as shown bj r the g. b. 1. 16. Banks we owe, as shown by the g. b. 1. GENERAL BOOKKEEPERS WOKK n 17. Balance of Cashier's Checks, as shown by the individual ledger. 18. Balance of Certificates of Deposit issued, as shown by the i. 1. 19. Balance of Certified Checks, as shown by the i. 1. 20. Amount of Notary Fees, as shown by the i. 1. 21. Amount due depositors, as shown by the i. 1. 22. Balance of Interest and Discount, as shown by the g. b. 1. 23. Balance of Collection and Exchange, as shown by the g. b. 1. Every banking association is obliged to make to the Comptroller of the Currency not .ess than five reports during each year, according to the form which may be prescribed by him. verified by the oath and affirmation of the president or the cashier of each association, and attested b} r the signature of at least three of the directors. These reports must exhibit, in detail and under appropriate heads, the resources and liabilities of the association at the close of business of any day specified by the Comptroller. Reports must be transmitted to the Comptroller within five days after his requisition therefor, and they must be published in a local newspaper in substantially the same form in which they are made to the Comptroller. Present your statement to your teacher for examination and approval. If your work is approved, copy the statement in the blank books, and make a statement of losses and gains similar to the form given below. Your furniture and fixtures are inventoried at $1250. Your net gain should be $2121.45. Statement of Losses and Gains, Dec. 18, 19 — Expense excess of debits Furniture and Fixtures • " " " Collection and Exchange excess of credits Interest and Discount " ' ; " Net Gain carried down 1683 100 .'HI 9 19 70 1219 3483 IS 71 4702 89 4702 89 Xet Gain brought down Surplus Fund 10% of net gain Dividends 2% of capital stock Undivided Profits balance of net gain 291 2000 627 97 73 2919 70 2919 70 2919 ■70 In joint stock companies and corporations, where the profits are paid in dividends, the net gain is not carried into Capital Stoek account, but is transferred to the Divi- dend, Surplus, and Undivided Profits accounts. The national banking act provides that the directors of any national banking association may semiannually declare a dividend of so much of the nel profits of the association as they may judge expedient; but before any dividends are declared one tenth of the net profits of the preceding half year must be carried to Surplus Fund account, until the same shall amount to 20% of the capital stock of the asso- ciation. In addition to the reports mentioned above, all national banking associations musl report to the ( Somptroller of the Currency, within ten days after declaring any dividend, 1 4 MODERN ILLUSTRATIVE BANKING the amount of such dividend, and the amount of the net earnings in excess of the same. These reports must be attested by the oath of the president or the cashier of the association. You may divide the net profits ($2121.45) as follows : («) Surplus Fund, 10 % of the net profits. (5) Dividends, 1^ % of the capital stock. ( c) Undivided Profits, the balance of the net profits. Next close the accounts in the general balance ledger showing losses and gains. This is done by making the following entries in the general cash book. (rt) Debit Collection and Exchange for $1200.33, and Interest and Discount for 15182.96. (b) Credit Furniture and Fixtures for $45 (the excess of the debit balance of the account over the inventory for furniture and fixtures). Expense for $4216.84, Loss and Gain for $2121.45 (the net profits). Post the above entries to your balance ledger, under date of Dec. 19th. Next close the Loss and Gain account into Dividends, Surplus Fund, etc. To close this account, the following entries must be made in the general cash book. (a) Debit Loss and Grain for $2121.45. (6) Credit Dividends for $1500, Surplus Fund for $212.15, Undivided Profits for $409.30. As fast as the dividends are paid to the stockholders, Dividends will be debited and CasJi credited. When all dividends have been paid, the Dividend account should balance. Post the above entries to the general balance ledger, and balance, under date of Dec. 19, and rule the general cash book again. Next make another statement of resources and liabilities. The following- form should be* used as a guide. Statement of Resources and Liabilities, Dec. 18, 19 — Cash Hills Discounted Protested Paper United States Bonds Stocks and Bonds Premium on U. S. Bonds Furniture and Fixtures Due from Other Banks Redemption Fund Capital Stock Circulation Deposits Due Other Banks Surplus Fund Dividends Undivided Profits on hand notes discounted and unpaid notes protested to secure circulation on hand amount above par value per inventory total debit balances 5 % of circulation amount invested bank notes in circulation total due depositors total credit balances credit balance, Dec. 15, 10 % of net gain, Dec. 18 2% of capital stock credit balance, Dec. 15, balance of net gain Dec. 18, 32348 92 120000 3767 Id 50000 6500 1500 2400 78549 86 2250 100000 4501111 134927 200 13 11750^ 291^ 12042 2000 60 2518" 627^ 3146 15 297315 88 297315 88 Present all your work to your teacher for examination and approval. PART IV. SUBSIDIARY SUBJECTS A CLEARING HOUSE ■ A Clearing House is a place where associated banks meet daily to effect exchanges and settle balances resulting from snch exchanges. The aggregate amount of exchanges represents the clearing for the day. At the present time all large cities have clearing houses, and nearly all the banks in these cities are members. Each clearing house elects its own officers and appoints its own committees. The officers are usually a president, a vice president, a secretary, a treasurer, and a manager. The committees comprise a committee of management, a committee on conferences, a nomination committee, a committee on admission, and an arbitration committee. The manager has full charge of the settling clerks and the messengers from the different banks while they are at the clearing house. He directs the clerical force of the clearing house and dictates the manner of conducting the daily business transactions. Preparation of Exchanges. Ranks usually have a case containing compartments, or pigeon holes, for each bank which is a member of the clearing house. This case is technically known as the "rack." All paper for the clearing is first indorsed with a rubber stamp, and then placed in the pigeon hole for the bank on which it is drawn. At the close of the day the items are taken out of the compartments and the amounts of them listed on an envelope, across the end of which is printed (1) the number and name of the bank at which they are payable, and (2) the number and name of the bank send- ing them to the clearing house. A duplicate list is afterward made by an assistant and pre- served by the bank for reference. The items are then placed within the proper envelopes. On the following morning, the items received in the early mail, called " morning additions," are assorted and listed, and then put within the proper envelopes. The accompanying illustration shows eleven pieces "t paper, aggregating *!U4x. :">«;, which is the amounl of the exchanges carried by No. G3, the Second National Bank, to the clearing house against No. 23, the National Bank of Commerce. 75 Form of Clearing-house Envelope &{?■ 23. IRational Bank of Commerce. From oAfo. 63. SECOND NATIONAL BANK. ^66?22^/Jr/Z^l9- 76 MODERN ILLUSTRATIVE BANKING The Delivery Clerk's Statement shows the amount of exchanges we have for the different banks. It is prepared as soon as the clearings are listed on the envelopes, the No. 12. Form of Delivery Clerk's Statement NEW YORK CLEARING HOUSE from CHEMICAL NATIONAL 15 Nat'l Butchers' & Drovers' Bank, £ 2^/2 6 '6 2t? • 17 Greenwich Bank. / 4^f6 18 Leather Manuf'rs National Bank, 327 £Z 19 Seventh National Bank, /3T£2* 20 Bank of State of N. Y., Z-^33-/ 2 6 'ft 21 American Exch. National Bank, 6 23 rd? /*2 23 National Bank of Commerce. 1 Bank of N.Y. Natl Bkg. Ass'n. 1 / 7f3~^/2 7 / / f^r^/2 £ / 2 I 2 Bank of the Manhattan Co.. • jr^/ 2 2 / 3 ^22// f */ 2 3 Merchants' National Bank, 3~^^/23 / / 2 */# C 3 f 2 k3"& 3 4 Mechanics' National Bank, 623- 2 f 2 3 / / s/2 / y 16 17 Greenwich Bank, /42f# 2£ /J" 17 18 Leather Manuf'rs National Bank, 3 2/ 6 2. / 2/62 *2 # 18 19 Seventh National Bank, 23~d 2? ff 27 6 7f. Settling Clerk. Routine of Business at the Clearing- House. Each bank sends to the clearing house a delivery clerk and a settling clerk. As the settling clerk enters the clearing house, he leaves at the desk of the manager a credit ticket (see form, page 77), showing the aggregate of the exchanges brought to the clearing house. This ticket is entered by the manager on the clearing-house proof under the title " Banks Cr." The desks at the clearing house are usually arranged in longitudinal rows, one desk for a bank. The settling clerk takes a seat at the desk, while the delivery clerk stands directly in front of it, with his packages for other banks. At the hour of the clearing, which is usually 10 o'clock, a gong is rung, and each delivery clerk advances one desk at a time and delivers to each settling clerk the items and the clearing house ticket for rack settling clerk's bank, taking a receipt therefor on the delivery clerk's statement (see form, page 76). The settling clerk enters the amount on his own statement (see form, page 78). After the circuit of the desks is completed, the delivery clerk gathers up the packages which have been left on the settling clerk's desk for his bank, and with these packages and his delivery clerk's statement he returns to his bank. He also takes with him a memorandum of the approximate balance in favor of or against his hank. The settling clerk foots his statement, ascertains the balance due to or by his bank, and makes out a balance ticket (see form above), which is sent to the manager's desk. The amounts received, as shown by the balance tickets, are entered on the clearing- house proof (sec form, page 80) in the "Banks Dr." column. The credit balances due banks are entered in the column entitled " Due Banks." The debit balances due the clearing house are entered in the column entitled -Due Clearing House." The clearing-house proof is now footed. The " Banks Dr." and the kw Banks ('v." columns 80 MODERN ILLUSTRATIVE BANKING NEW YORK CLEARING BOUSE PROOF '.JUe^sSj-0. 19- No BANKS. DUE CLEARING HOUSE BANKS Cn. DUE BANKS. I 2 3 < 6 7 8 10 12 M l|4 IS 16 17 18 19 20 21 23 25 2/ 29 29 30 31 32 33 34 36 40 42 44 45 47 ."' S3 94 59 61 62 Bank of NY Nat'l Bkg. Ass"n. Bank of the Manhattan Co.. Merchants' National Bank. Mechanics' National Bank. Bank of America. Phenix National Bank. National City Bank. Tradesmen's National Bank. Chemical National Bank. Merchants' Exch. Nat. Bank. Gallatin National Bank. Natl Butchers' & Drovers' Bank. Mechanics' & Traders' Bank. Greenwich Bank Leather Manufrs National Bank. Seventh National Bank. Bank of State of N Y . American Exch National Bank National Bank of Commerce. National Broadway Bank, vlercantile National Bank: Pacific Bank. National Bank of the Republic, hatham National Bank, People's Bank. National Bank of North America. Hanover National Bank. Irving National Bank. National Citizens' Bank. Nassau Bank. Market & FuJlon National Bank. National Shoe & Leather Bank. Com Exchange Bank. Continental National Bank. Oriental Bank. Importers & Traders National Bank National Park Bank. East River National Bank. Fourth National Bank Central National Bank. 33 6zf/3f JSC?3~3'73* /207/6J3 64X3-64/7^33^ / #74/4*// 'V2f6f / 66 / Z64//Z7 » 1 © 33 . Z St •a: J M as o : * ■ m ify -■■■■■■■ T No. 26. New York Clearing House, \f<^^7^s^ / 2-tf_ 19 — Received irom the FIRST NATIONAL BANK, Dollars in full for balance due the Associated Banks. %^Z^2A^Z£z Ass't [Manager. If a bank brought more to the clearing house than it received from the clearing house, the balance would be due the bank, and payment would have to be made by the clearing house, in which case the receipt given would be similar to the following. Form of Credit Balance Receipt 3 New York,_ Received of the New York Clearing House, $ /cf^-^y^ ^ ^^M^^^ ( ^^^i - r ^^^^^^\^W^^^/ - Dollars, In full for balance due from Associated Banks this day. CHEMICAL NATIONAL "BANK. No. 12. Cashier. In the smaller cities, balances are usually settled by issuing drafts on New York, Boston, Chicago, or other financial centers. In St. Louis, Cincinnati, and several West- ern cities, the practice is to settle at once with the credit banks by drawing managers' checks on the debit banks. Weekly Statement. Some clearing houses require their members to furnish a weekly statement showing the average amount of their loans and discounts, specie, legal tender notes, circulation, and deposits. FOREIGN EXCHANGE 83 FOREIGN EXCHANGE Many of the larger banks make a practice of selling bills of exchange, or drafts, od the principal financial centers of England, France, Germany, and other countries. These drafts are generally used for making remittances, though travelers sometimes purchase them instead of letters of credit. The method of handling them does not differ from that employed for domestic drafts. The bank which draws the draft must keep a deposit with the bank on which it draws. As the drafts are paid they are charged the drawer the same as checks. FOEM OF FOKEIGN BlLL OF EXCHANGE Coo O O OqO _J> f /&.& n -*J7 St*. Rochester, N. K, .J7 ^s^S 2- 19 u. s. A On demand, pay this SOLE BILL OF EXCHANGE, to the Order of y^ / .Pounds Sterling. Value Received. No. 190 — s %^? i/Z^m-frT^Tz^ Cashier. A record of a foreign bill of exchange is made on the stub, thus : Letters of Advice. It is customary for the bank which draws either foreign or do- mestic drafts to send a letter of advice to the drawee bank. This letter should state the date, number, and amount of the draft, and in whose favor it is drawn. Foreign bills of exchange may be divided into three classes : (1) Bankers' bills, which are drawn by bankers on bankers. (2) Com- mercial bills (sight and time drafts), which are drawn by merchants on their customers. (3) Documentary bills, which arc drawn by merchants on shippers and are accompanied by bills of lading. The form of a documentary bill is th<' Stub of Foeeign Bill of Exchange No. 190 Rochester, N. Y., ^ 2^-tf ~ 19 - Received from Z^Z —G %^-rty the sum of $ Q. £z for a Draft of this date and number, in favor of iting to f ; y /? /? 77^^J^ ~7C3^^^^^c=J^srf!*rn^ 7 £22 . FARMERS AND MERCHANTS BANK. (/J%o^ 2& Cashie r. 84 MODERN ILLUSTRATIVE BANKING same as that of an ordinary sight or time draft. Its name is derived from the fact that it is attached to a bill of lading which the consignee must present to the steam- ship company before the goods will be delivered to him. As possession of the bill of lading can be obtained only by honoring the draft, payment is thus made for the consignor's goods before they actually go out of his possession. It is practically the same as making C. O. D. shipments in the express business. Posted or Nominal Rates. In every large city there are a number of firms and persons that make it their business to buy and sell foreign bills of exchange. The rates that they daily post upon their bulletins for the use of the general public are knowr as the posted, or nominal, rates of exchange, as distinguished from the actual, or real, rates — the inside terms made to brokers. Buying and Selling Exchange. If I owe a person in London £10,000, I can ship him -148,665.00 (the par value of a pound sterling being 14.8665) in United States gold, or I can purchase a foreign bill of exchange for XI 0,000, and remit it to him. The cost of shipping the gold would be \% for freight, \°Jo for insurance, and from nothing to £% f° r abrasion. If I cannot buy a bill of exchange without paying more than $4.89 for it, the cheaper way would be to ship the gold. If a person in London owes me £ 10,000, and I must bear the cost of collecting, I can draw a draft on him, or have the gold shipped to me to be sold here at its market value. If I cannot sell the draft for more than $4.84, the cheaper way would be to have the gold shipped to me. If our sales of wheat, cotton, provisions, etc., to England are greater than our purchases of silks, woolens, and fancy goods from English manufacturers, it is evident that England will owe us more than we owe her, and the balance of trade will be in our favor. In such a case there would be more persons in New York, Boston, and other financial centers offering drafts for sale (which they had drawn on persons to whom they had sold goods) than there would be persons desiring to buy drafts to settle accounts owed to English firms, and exchange would be low ; that is, below the par value ($4.8665) . When exchange decreased in price to a certain point, the gold would flow into this country, as it would be expedient to pay the cost of shipping the gold from England to this country, in pay- ment of a debt due, rather than sell a draft on an English concern for $4.83 or $4.84. Drawing Drafts through Foreign-exchange Bankers. . Certain bankers in New York, San Francisco, and other financial centers make it their principal business to deal in foreign exchange. They often act as agents for banks having no foreign correspond- ents, permitting such banks to draw their drafts directly on a large list of banks vari- ously located, so as to cover practically every quarter of the civilized world. At the time of drawing the drafts, the bank sends its cashier's check covering the face of the drafts and the commission, together with a letter of advice, to the foreign-exchange banker (in this country), who immediately instructs his correspondents to honor the drafts as drawn. When the drafts are paid, the foreign banker charges them to the foreign-exchange banker in this country, and not to the drawer. Thus the bank draw- ing the drafts is relieved of the trouble and expense incident to keeping deposits with foreign banks, while it possesses practically all the advantages such deposits would afford. LETTERS OF CREDIT 85 LETTERS OF CREDIT Letters of Credit are usually issued to travelers, who are thus enabled to obtain the current money of whatever country they may visit, in such amounts as are best suited to their convenience. By subscribing his name at the bottom, the holder of a letter of credit provides a simple, yet effective, means of identification, and whenever he wishes money he has only to present his letter to any of the banks (usually four or five hundred in number) named in the list furnished him at the time of purchase, and this bank will fill out a draft on the London banker to whom the letter is directed. The traveler signs the draft, and if the signature corresponds to that shown at the bottom of the letter, the amount desired is inscribed on the inside thereof, and payment is immediately made. The letter denotes at all times the amount still available, and is a guide to any banker to whom it may be presented. The bank cashing the draft which exhausts the credit is required to remit it to the London bank. Form of Letter of Credit front Circular Letter of Gredit jvb.M&^M/// & '' CM Di'liv ADDRESSED TO THE CORRESPONDENTS *" Knauth,JVachod & Kuhne. &^£w. ^Z"s>-*bm, ^U;f//e/^s2^^//*/t'i',s-Ae7i.y:&*,'*4j£,a/t,M; -7 7- 86 MODERN ILLUSTRATIVE BANKING Letters of credit are usually drawn in pounds sterling, which, at the present time, is the most generally used and least fluctuating money in the world. The drafts, how- ever, are paid in the current money of the country in which they are negotiated. The letters are drawn against cash deposits, or collateral affording sufficient guarantee of repayment, and at the time of issue a letter of advice containing a full description of the credit is forwarded to the drawee bank and to all correspondents to whom it is likely to be presented. Banks usually charge lj*<~~ e>C%^*/ flft*/ 4**1/4 /J~o tJLt ^ <£? -V^-a— -/Cf*«d f_ ^r^ « h ncazf lOAincia* anrztrf f~<^ Da Twfintsche Banfrreree liging, y^-^****-*^7 f>S**-~ JLsl*^s*~£y ""rt^tfioh. Jf7f- c^ fit. ^CREDIT LYONNAIS AMSTERDAM Mi. hi «to(t»wt \ ****** it u^Mbyc ^C-<^tJC^k^ ^^ Z / ^^»ll|liflvll\lA13 |ufil< •»(i«9 Co BfiriB* ► * ^^V *»Wf V W ^* T vT^\ • vaitti * Lt — •'(• Sana. cohb. f ' man Cka^9C^>/6 Treasurer. INDEX Auxiliary books, 36. Balance ticket, 7!». Bank, bookkeepers of, 15. books of, 24. cashiers of, 14. definition of, 7. directors of, 1<>. president of, 14. tellers of, 14. Bank book, 41. entering collections in, 53. form of, 20. method of writing, 19. Bank drafts, 47. Banker. 7. Hankers and brokers, 13. Banking customs, 15. Bank officers and clerks, 14. Banks, business of, 7. kinds of, 7. Capital stock, payment of, 11. securing subscriptions to, 9. Cashier's check, 65. Cashier's check book. 53. Certificate of authority to commence business, 12. Certificate of deposit book, 33. Certificate of payment of stock, 11. Certificates of deposit, 43. « i tified check book. 32. ( !erl iti'-ii checks, l<>. Check raising, devices for preventing, 15. Checks, forged and raised, L9. method of canceling, 1'.). method of paying. 1 1. stopping payment of, 17. Circulating notes, 12. Circulation, 1 1. Clearing house, a, 75. committees of, 75. Clearing house, a. managers of, 75. officers of, 75. payment of balances of, 81. preparing exchanges of, 75. routine of business at, 79. weekly statements of, 82. Clearing-house proof, 81. Collection and cash items distinguished, 32. Collection and exchange, 15. Collection clerk, duties of, 53. work for, 53, 66. Collection paper, 39, 53. Collection register, 29. Collection tickler, 29. Commercial bank. 7. Comptroller of the currency, 8. Credit ticket, 77. Days of grace, 49. Delivery clerk's statement, 76. Deposits, examination of, 41. Directors, election of, 10. number and qualifications of, 10. Disbursements, sources of, 7. Discount clerk, duties of, 48. work for, 48, 65. Discount register, 26. Discount tickler. 28. Dividend book, 36. Dividends and surplus, 9. Draft 1 k. 32. Exchange, method of buying and selling, 84c posted or nominal rates of, si. Foreign exchange, 83. General balance ledger, 34. General bookkeeper, duties of, 61. work for, 61, 71. 89 90 INDEX General cash book, 26. Incoming papers, 40. Individual bookkeeper, duties of, 59. work for, 59, 70. Individual ledger, 34. Installment book, 36. Letter of credit, a, 85. Letters of advice, 83. Loan and trust companies, how organized, 13. business of, 13. Loans, 48. Mail clerk, duties of, 57. work of, 57, 68. Messengers, 55. Minute book, 36. Miscellaneous supplies, 40. National bank, a, 7. capital of, 9. examiners of, 8. liability of stockholders of, 8. name of, 9. organization of, 9. powers of, 8. reports of, 9. reserve of, 9. Notary fees, 23. Notes, accumulated interest on, 51. method of finding due date of, 49. method of paying, 55. when charged to a depositor, 55. Note teller, duties of, 55. work for, 55, 67. Notice to comptroller of the currency, 10. Officers, of a bank, 11. of a clearing house, 75. Organization certificate, 10. Organization of a national bank, 9. Outgoing papers, 40. Overcertifying checks, 9. Paying teller, duties of, 44. work for, 44, 64. Persons, number necessary to organize a national bank, 9. Powers of national banks, 8. Private bankers, 12. Private banks, 8. Profits, sources of, 7. Protest, certificate of, 21. notice of, 22. Protesting, 20. Real estate, 8. Receipts, sources of, 7. Receiving teller, duties of, 41. work for, 41, 63. Remittance register,. 29. Savings banks, how organized, 13. compared with state and national banks, 13c interest allowed depositors in, 13. investments of, 13. purpose of, 13. Settling clerk's statement, 77. Sight paper, method of handling, 29. received for credit of others, 32. remitted for our credit, 31. State banks, how organized, 12. advantages of, 12. circulating notes of, 12. compared with national banks, 13. Statement, general daily, 72. of losses and gains, 73. of resources and liabilities, 74. Stock certificate book, 36. Stock ledger, 36. Subscription book, 36. Sundays and holidays, 28. Tax on circulation, 11. Time for discounting notes, 49. Timing, 53. Transfer book, 36. Travelers' cheques, 87. United States bonds, 11. Vouchers, 40. UNIVERSITY OF CALIFORNIA AT LOS ANGELES THE UNIVERSITY LIBRARY This book is DUE on the last date stamped below 4 « ' Form L-9 20m -1, '42(8519) XJNIV . CALIFORNIA AT LOS ANGELES HG 1G11 Neal- K25m i-odern illustrat 1904 — ive "banking DEMCO 234N m 1611 N25m 1904 . u .