UC-NRLF $B 37 SLD ■. I o I ^ O >- BOOKKEEPING BANKING GEORGE W. MINER GINN AND COMPANY V«n«ii itmmn wmmmmmmmmmmm Digitized by the Internet Archive in 2007 with funding from IVIicrosoft Corporation http://www.archive.org/details/bookkeepingbankiOOminerich MOORE AND MINER SERIES BOOKKEEPING BANKING BY GEORGE W. MINER GINN AND COMPANY BOSTON • NEW YORK • CHICAGO ■ LONDON COPYRIGHT, 1902, 1903, BY JOHN H. MOORE and GEORGE W. MINER COPYKIGHT, 1913, BY GEORGE W. MIXER ALL RIGHTS RESERVED 313.1 GINN AND COMPANY • PRO- PRIETORS • BOSTON • U.S.A. PKEFACE As banking is a highly specialized subject, it is treated in a separate book. A reference to the Contents will show the practical character of the work presented. The revised edition has been read in manuscript by George E. Allen, educational director of the American Institute of Banking, and O. Howard Wolfe, secretary of the Clearing House Section of the American Bankers' Association, both of New York City. The helpful and valuable suggestions which they have given increase the value of the text both theoretically and practically. iii 324922 CONTENTS PAGE Banks axd Banking 1 Utility of Banks . 1 National Banks 2 Powers of and Restrictions on National Banks 6 National Bank Officers and Clerks 7 Opening Entries of a National Bank 8 Trust Companies 10 State Banks 11 Private Banks 12 Bank Bookkeeping 14 Work of the Discount Clerk 15 Work of the Collection Clerk 21 AVork of the Receiving Teller 27 Work of the Paying Teller . . 31 . Work of the Note Teller 37 Work of the Correspondence Clerk 40 Work of the Individual Bookkeeper . 46 Work of the General Bookkeeper 50 The Clearing House 82 Letters of Credit 91 Appendix A . 95 Notes on Forms of Record 95 Reconcilement Form 97 Certificate of Protest 98 Notice of Protest 99 Appendix B 100 Commercial Terms defined 100 Index 103 BOOKKEEPING BANKS AND BANKING THE UTILITY OF BANKS A Bank, in its simplest form, is an institution for the safe-keeping of money ; but the commercial bank of to-day is designed to render the public many varied and important services. The general utility of commercial banks may be stated as follows : 1. They provide a place for the safe-keeping of money and securities. 2. They afford a business man an opportunity to borrow money to carry on his enterprises while his capital is locked up in merchandise or in the hands of his debtors. The credit of many mercantile houses is worth as much to them as the capital they possess. ' 3. They save the transmission of money from one place to another, thus avoiding great risks and keeping money in more active circulation. Settlements are effected by issuing to customers (a) bankers' drafts ; (V) bills of exchange ; (c) Jetters of credit. 4. They facilitate the payment of bills by permitting money deposited to be withdrawn upon a simple order called a check. This check when issued serves the business man in various ways, as follows : a. It saves time in paying large sums of money. h. It obviates the risk that attends the handling of money. c. It constitutes a record of expenditures and furnishes the business man convenient data from which to make entries in his books. d. When the check is canceled it serves the purpose of a receipt. Fully 90% of bank bookkeeping grows out of the use and collection of checks and other negotiable instruments. 5. By issuing letters of credit they afford people who travel a means of securing money in distant places without risk. 6. They afford excellent facilities for the collection of negotiable paper, — bills, notes, bonds, coupons, etc. 7. They are often a source of useful business information pertaining to investments and other matters. 1 2 BOOKKEEPING 8. They are a means of organizing capital. 9. They tend to encourage thrift, honesty, and punctuality. Sources of a Bank's Profits. — The principal sources of a bank's profits may be specified as follows : 1. Money earned for discounting business paper and from lending money on good security. The available funds of a bank for lending purposes accrue from a. Amounts paid in by stockholders. h. Amounts deposited by individuals, corporations, bankers, etc. c. Accumulated surplus. 2. Charges for collecting notes, drafts, etc. 3. Interest upon bonds deposited with the United States Treasurer to secure circulation, if it is a national bank. 4. Fees for issuing drafts, bills of exchange, etc. 5. Profit on circulation, if it is a national bank. Sources of a Bank's Expenses. — The prmcipal sources of a bank's expenses may be specified as follows : 1. Interest on special deposits. 2. Fees for collecting foreign paper. 3. Taxes. 4. Salaries and various other office expenses. Kinds of Banks. — Banks may be classified as follows : 1. National. 2. State. 3. Private. NATIONAL BANKS Distinguishing Features. — Some of the distinguishing features of a national bank may be stated as follows : 1. It is organized under the National Bank Act. Note. — Authentic information with reference to the organization of national banks may be obtained upon appUcation to the Comptroller of Currency, Wash- ington, D.C., for a copy of each of the following pamphlets: "National Bank Act " and " Instructions Relative to the Organization and Management of National Banks." These pamphlets contain valuable suggestions for all interested in the business of banking. The Comptroller has also published a valuable book entitled " National Bank Act as Amended." 2. It is always an incorporated institution. 3. It has general authority to issue circulating notes as well as to conduct an ordinary banking business. 4. It is under the direction of the Comptroller of Currency. BANKIKG 3 5. Its general methods of conducting business are consistent with those of every other national bank in the United States. 6. Its stockholders are liable for twice the amount of their subscrip- tion; that is, in case a bank fails and is in need of funds to meet its liabilities, a stockholder who owns $5000 worth of stock is liable to the Comptroller to the amount of $5000 in cash in addition to the loss of his stock. 7. A definite proportion of its stock must be invested in United States bonds. 8. It must have at all times on hand an available lawful money reserve. This amount ranges from 15% to 25% of its deposits, depending upon the city in which the bank is located. 9. It must form a surplus fund. Before making a dividend it must carry to its surplus fund one-tenth of its net profits since the last pre- ceding dividend, until the fund shall amount to at least 20% of the capital stock, thereby establishing a reserve fund from which losses may be met. Organization of a National Bank. — The successive steps required to organize a national bank, together with the prescribed forms of articles of association and by-laws, are given in the pamphlets referred to on page 2. A summary of the necessary steps may be given as follows : 1. There must be at least five persons. Corporations, etc., cannot become organizers of a national bank. 2. No national bank can be organized with a capital smaller than $25,000. The minimum capital stock with which a national bank may organize varies with the size of the town or city ; as : a. Minimum capital for banks organized in towns with a population of not over 3000, $25,000. h. For towns with a population of not more than 6000, $50,000. c. For towns or cities with a population of more than 6000 and less than 50,000, $100,000. d. For towns or cities with a population of 50,000 or more, $200,000. 3. A paper is prepared, which it is expected people will sign, stating the amount of capital it is desired to raise and the number and value of the shares. This paper is circulated until the requisite amount is subscribed. 4. A name must be selected. This may be any name that does not conflict with one already in use in that particular town or city. 4 BOOKKEEPING 5. Written application is made to the Comptroller of Currency at Washington, giving: a. The name and location of the proposed bank. h. The amount of the capital stock. c. The names of at least five persons who are to be stockholders. 6. If the application receives the Comptroller's approval, the sub- scribers unite in Articles of Association. 7. Having executed the articles of association, the stockholders then execute a paper entitled Organization Certificate. This certificate defi- nitely specifies : a. The name and location of the association. h. The capital stock. c. The names and residences of the stockholders and the number of shares held by each. d. A general statement as to why the certificate is made. 8. The Organization Certificate is then signed, acknowledged, and filed with the Comptroller. 9. The stockholders meet and elect directors. To be eligible as a director a stockholder must a. Be a citizen of the United States. h. Own at least 10 shares of the capital stock of the bank if the capi- tal exceeds $25,000 ; if it does not, he must own at least 5 shares. c. Three-fourths of the directors must have resided in the state in which the association is located for a yeai* or more preceding their elec- tion ; they must also continue to reside there while they remain in office. 10. The directors then proceed to elect a president, a vice president, a cashier, etc., and call in at least 50^ of the capital stock. Note. — Fifty per cent of the capital stock of a bank must be paid in before the Comptroller will give it authority to commence business, and the remainder must be paid in in five equal monthly installments. Thus the entire capital stock must be paid in within six months from the time the bank is authorized to commence business. In many cases a surplus fund is created by the payment of an additional sum, this surplus fund serving to enhance the bank's credit and stability. 11. Another certificate is then made and sworn to by a majority of the directors. This paper certifies the following : a. The amount of paid-in capital. h. The name, residence, and number of shares of each stockholder. c. That the bank has complied with the various requirements of the National Bank Act. BANKING 5 12. A portion of the capital stock must then be invested in United States bonds and deposited with the Treasurer of the United States. This amount varies ; as : a. It cannot be less than one-fourth of the capital stock if the capital stock is $150,000 or less. h. If the capital stock is more than $150,000, $50,000 in bonds must be deposited. 13. After the Comptroller has given authority for the bank to do business, a code of by-laws is adopted for the government of the bank. 14. If the Comptroller is assured that all the requirements of the law have been executed, he will give to the bank a certificate stating that it is authorized to commence business. This certificate must be published in the town or the city in which the bank is located, for sixty days or more after it is issued. Circulating Notes of a National Bank. — Whether a bank avails itself or not of the privilege of taking out circulating notes, the law requires the above-mentioned deposit of United States bonds. Having complied with the law in depositing bonds, a national bank is entitled to receive its circulating notes, equal in value to the par value of the bonds depos- ited, unless the bonds should be below par, in which case it may receive circulating notes for only the market value of the bonds. A national bank is not required to take out circulating notes ; but having invested a part of its capital m the above manner, it is usually desirous of utilizing its credit by getting as many notes as the law per- mits. The profits on these circulating notes consist of the interest at the current rate on the amount invested, plus about 1% or 2% on the capital employed. Tax on Circulation. — A national bank is required to pay to the Treas- urer of the United States a tax of l % each half year upon the average amount of notes in circulation, secured by 2% gold bonds, or Panama Canal bonds. Circulating notes secured by all other classes of bonds are subject to a semiannual tax of |%. Interest on United States Bonds. — The Comptroller authorizes the payment of interest on the bonds deposited to the bank depositing them. From this income to the bank no deduction is made for taxation, since United States bonds are exempt from taxation. Redemption Fund with the United States Treasurer. — National banks are required to keep at all times on deposit with the Treasurer of the United States 5% of their circulation. This fund is to be held and 6 BOOKKEEPING used by the Treasurer for the redemption of worn, mutilated, or defaced national bank notes that may be received from time to time and redeemed in sums of |1000 or any multiple thereof. CORPORATE POWERS OF AND RESTRICTIONS ON NATIONAL BANKS The Powers possessed by national banking associations may be enu- merated as follows : 1. To adopt and use a corporate seal. 2. To have succession for twenty years, unless sooner voluntarily dissolved or their franchises become forfeited by some violation of law. 3. To sue and to be sued. 4. To elect and appoint directors, and by the directors to appoint a president, cashier, etc. 5. To adopt necessary by-laws not inconsistent with law. 6. To make contracts. 7. To exercise by the directors such incidental powers as may be necessary to carry on the general business of banking, such as dis- counting paper, receiving deposits, loaning money on personal security, buying and selling exchange, etc., obtaining and issuing circulating notes. The Principal Restrictions placed upon national banking associations may be enumerated as follows : 1. National banks can hold real estate on the following conditions: a. Such as may be needed for their immediate accommodation in the transaction of business. h. Such as may be mortgaged or conveyed to them in good faith by way of security for debts previously contracted. c. Such as they shall purchase at sales under judgments, etc., lield by the association. Possession of real estate under mortgage, or title and possession of any real estate purchased to secure debts due to national banks, cannot be held for a longer period than five years. 2. No increase or reduction of the capital stock of national banks can be made without the approval of the Comptroller. No increase is valid until the full capital stock has been paid. 3. They are prohibited from loaning a person or a firm an amount exceeding one-tenth part of their capital and surplus, providing the amount loaned does not exceed 30% of the capital. This restraint is to prevent excessive loans, which always impair the general usefulness of a bank. BANKING 7 4. They cannot use their own circulating notes to pay for or increase their capital stock. 5. They are expressly prohibited from certifying a check in excess of a depositor's account. 6. They may not establish branches. NATIONAL BANK OFFICERS AND CLERKS Officers, -r- The officers of a national bank are chosen by the board of directors to superintend and direct its affairs. These are usually : President. Vice President. Cashier. Assistant Cashier. Clerks and Employees. — Among the clerks and employees of a bank are : receiving teller, paying teller, note teller, general bookkeeper, indi- vidual bookkeeper, discount clerk, collection clerk, correspondence clerk or transit manager, runner, porter, watchman, and such other assistants as the character and extent of the business may demand. The President is the official head of the bank. The bank is dependent upon him for its standing, and it is therefore important that he should be a man of honor and integrity, with a very considerable knowledge of men and financial affairs. He should, by considerate action, by an accurate knowledge of character, by a keen interest in the movements of trade, have under his command all the forces that tend to enhance his bank's interests. His most important duties may be specified as follows: 1. To preside at all the meetings of the board of directors. 2. To furnish such information concerning the bank's transactions as may be desired by the directors. 3. To adopt a policy which will govern the bank in its operations. 4. To be influential in securing depositors. 5. To sign circulating notes and certificates of stock. 6. To be alert in watching the loans of the bank to see that they do not go beyond safe limits. The Vice President, in the absence of the president, takes his place and performs the duties of the office. In some of the larger banks of the country this officer shares the responsibility of the president and aids in extending the efficiency of the bank's service. The Cashier ranks next to the president and the vice president, and has certain duties to perform. These duties are mentioned in the law under 8 BOOKKEEPING which the bank exists. His most important duties may be stated in a general way as follows : 1. He acts as secretary of the board of directors and keeps a record of all business transacted at their meetings. 2. He supervises various departments of work and sometimes employs clerks and prescribes their duties. 3. He conducts the correspondence of the bank. 4. He signs certificates of stock and circulating notes. 5. He pays out the bank's funds and borrows money in the name of the bank. 6. He indorses all paper that is sent away for collection. 7. He signs the checks of the bank and draws drafts on correspondents. 8. He may indorse the bank's paper for the purpose of securing loans. 9. He should aim to build up the business of the bank and commend it to public favor. The Assistant Cashier is employed only in the larger banking institu- tions of the countiy. His official signature is recognized in everything the same as the cashier's, except in the bank's reports to the Comp- troller of Currency. He assists in performing any of the duties ordi- narily devolving upon the cashier. PROPOSITIONS ILLUSTRATING THE OPENING ENTRIES OF A NATIONAL BANK 1. (a) A national bank is organized with a capital stock of $300,000. (b) The capital stock is fully paid in. (c) Also a surplus fund of $50,000 is created and paid, (d) United States bonds with a par value of $100,000 are purchased for $101,500 cash, (e) Circulating notes to the extent of $100,000 are received from the Comptroller of Currency and duly signed. (/) $5000 is forwarded to the Treasurer of the United States, as provided by banking laws, to redeem worn-out and mutilated circulating notes, (g) Disbursements ordered by the board of directors amount to $2900. Required the necessary opening entries. Give them in ordinary journal form. To THE Student. — The above proposition gives a statement of the usual transactions resulting from the organization of a national bank. If you have the successive steps of organization well in mind you are now ready to study the follow- ing entries. To show the various debits and credits, the entries are all given in journal form. After a careful study of the entries for proposition No. 1, take a sheet of journal paper and make the entries for proposition No. 2. BANKING Necessary Entries (a) Subscription To Capital Stock Cash To Subscription Cash To Surplus Fund (P) $300000 300000 $300000 Premium on U.S. Bonds U.S. Bonds to secure Circulation To Cash (e) Cash To Circulation (/) Redemption Fund with U.S. Treasurer To Cash (,9) Expense To Cash 50000 1500 100000 100000 5000 2900 300000 50000 101500 100000 5000 2900 2. (a) A national bank is organized with a capital stock of $200,000. (5) The first installment of 50% of the capital stock is duly paid. () United States bonds with a par value of $75,000 are purchased for $76,000 cash, (d) Circulating notes are received from the Comptroller of Currency for $75,000 and duly signed by the president and cashier. (e) One of the stockholders makes a further payment of $20,000 to apply on the capital stock. (/) The necessary 5% redemption fund is forwarded to the Treasurer of the United States to redeem worn and mutilated circulating notes, (g) Disbursements ordered by the board of directors amount to $3100. Required the necessary opening entries. Make them in ordinary journal form. To THE Instiiuctor. — The instructor will find it a most helpful exercise to require the students to analyze fully each of the entries called for in the foregoing propo- sitions. This will, at the outset, firmly fix in mind the fundamental principles in the organization of a national bank. 10 BOOKKEEPING TRUST COMPANIES Organization Trust companies are in reality banking institutions organized under and subject to the laws of the different states. The Business of Trust Companies ranks among the important activities of commerce. Since trust companies are state institutions, their man- agement and scope vary in the different states. In general the business of trust companies may be stated as follows : 1. They receive money on deposit, subject to checks, the same as national banks. 2. They allow interest on special deposits, usually on amounts above a specified sum. 3. They make loans in the same careful, conservative way that is so characteristic of national banks. 4. Where they have superseded state banks they undertake the collection of commercial paper. 5. They are usually connected with the clearing house, either directly or through some convenient national bank. 6. They receive on deposit money, government securities, stocks, bonds, coin, jewelry, valuable papers and documents, evidences of debt, etc., upon such terms and conditions as may be agreed upon. 7. They collect and disburse the interest or income, if any, upon property received on deposit and at maturity coUect and disburse the principal of such property as produces interest or income. 8. They act as trustees for widows and children. 9. They act as agents in transferring stocks and bonds. 10. They act as agents for the care and management of invested property. 11. They may be appointed by probate courts as receivers, executors, administrators, etc. 12. They are usually authorized to receive and hold moneys and property in trust and on deposit from courts of law and equity, executors, assignees, guardians, and trustees upon such terms and agreements as may be decided upon. Note. — In Massachusetts and some of tlie other states trust companies are required to maintain a reserve fund similar to the reserve fund of national banks, and to annually set aside 10% of their net earnings as a surplus or guaranty fund until such fund amounts to 25% of their capital stock. The liability of the stock- holders is also the same as that of the stockholders of a national bank. BANKING 11 STATE BANKS Organization. — State banks are organized under and subject to the regulations and restrictions of the banking department of the particular state in which they are located. The preliminary steps necessary in the organization of a state bank are quite similar to those already outlined for national banks. State and National Banks compared. — State and national banks may be compared as follows : 1. Their management is similar. 2. Their scope is nearly the same. 3. They are equally careful and conservative in the matter of making loans. 4. In many cases the protection afforded the creditors of state and national banks is equally strong. State and National Banks contrasted. — State and national banks may be contrasted as follows : 1. National banks are organized under and subject to national law and authority. State banks are purely state institutions, organized under and subject to state law and authority. 2. National banks issue circulating notes, while state banks do not. Note. — Prior to July 1, 1866, state banks issued circulating notes. On that date an amendment to the National Bank Act imposed a tax of 10% on these notes. This tax proved too high to allow any profit to the state banks, and the circulating notes were withdrawn. 3. National banks are subject to examination by persons appointed by the National Government, while state banks are examined by persons appointed by the authority of the given state. 4. National banks are required to invest a portion of their capital in United States bonds. These bonds are deposited with the Treasurer of the United States to secure circulation, and are not available to the bank until all of its circulation has been redeemed. As state banks do not issue circulating notes, they are not required to purchase United States bonds. If a national bank should fail, its circulating notes would be redeemed by the United States government without loss to the holder, but the United States bonds deposited at Washington do not afford security for the payment of depositors. Note In Massachusetts and a few other states there are no state banks, loan and trust companies having superseded them. Authentic information respecting the organization of state banks and trust companies may be obtained by addressing the proper Secretary of State. 12 BOOKKEEPING PRIVATE BANKS Organization. — Private banks are organized in the same manner as ordinary partnerships. They may belong to an individual or a firm. Functions. — The business of private banks varies in different locali- ties. In many cases they possess the principal functions of national banks ; in other cases their attention is directed only to special features of banking, such as the buying and selling of foreign exchange, stocks and bonds, etc. Protection to Creditors. — In a few states private banks are restricted in their operations by statute, in which case they are subject to the inspection of state officials ; but usually their operations are regulated and restricted only by the common laws of business. Thus it will be seen that their safety is dependent upon the integrity and financial responsibility of the individuals conducting them. Note — Private bankers are quite numerous in nearly all large cities, their capital stock aggregating, in some instances, more than the capital stock of national banks. Some private bankers make a specialty of loaning their capital for the promotion of business enterprises, taking for security the stocks and bonds of tlie enterprise pro- moted. These stocks and bonds are disposed of to customers, usually at a good profit. REVIEW QUESTIONS 1. State the principal functions of a commercial bank. 2. Briefly outline the principal advantages of making payments by the ordinary bank check. 3. A busi- ness man is about to pay a bill of $49.75. He finds that there is over $200 in currency in his safe. He has a good -sized bank account. Which would be the more business-like way of paying his bill, by check or in currency ? Why ? 4. Name the principal sources of a bank's profits. 5. From what do the available funds of a bank for lending purposes accrue? 6. State the principal sources of a bank's expenses. 7. Name the three general classes of banking institutions. 8. Name the chief distinguishing features of a national bank. 9. Why are the underlying principles of the national banking system practically uniform? 10. State the indi- vidual liability of the stockholders of a national bank. Illustrate. 11. What lawful money must the national banks in your city have at all times on hand? 12. Define the following: (a) surplus fund; (b) United States bonds; (c) incor- porated institution; (d) National Banking Act. 13. How many persons are required to form a national bank ? 14. Could the number be made up wholly or in part of fictitious persons, as corporations, etc. ? 15. What is the minimum capital under which a bank may organize in yoiu- city ? 16. State the law with reference to the minimum capital required to organize a national bank. 17. A national bank is being organized in your city. There are already a number of national BANKING 13 banks doing business there. Could the new bank adopt the name First National Bank ? There is no other bank of that name in your city. Give reasons for your answer. 18. What per cent of the capital stock of a national bank must be paid in before the bank can be authorized to commence business? 19. State the necessary qualifications for a bank director. 20. What is generally the par value of a share of national bank stock ? ^ 21. Suppose a national bank is formed with a fully paid in capital of $300,000. Another national bank is formed at the same time with a capital stock of $200,000, and a surplus fund of $100,000, both amounts fully paid in. Which bank in your judgment is the stronger institution ? Why ? 22. What proportion of the capital stock of a national bank must be invested in United States bonds ? 23. Why is th^^re no tax levied on United States bonds? 24. Define the following: (a) circulating notes ; (b) redemption fund with the United States Treasurer. 25. Is a bank bound to take out circulating notes ? 26. Do almost all national banks carry circulating notes? Why? 27. What per cent of the bonds deposited may the circulating notes be? 28. What is the market value of United States 2% gold bonds at the present time ? 29. Are circulating notes a source of profit to national banks? 30. What is the yearly tax on national bank notes? 31. Are the United States bonds deposited with the United States Treasurer a source of income to the bank depositing them ? Explain. 32. For what is Redemption Fund with the United States Treasurer created? How is the amount of it determined? 33. A fire occurs in A's warehouse. In the office of this warehouse $500 in national bank bills are burned to ashes. Has anybody gained by this destruction of bank notes? Explain. 34. State the principal corporate powers of national banks. 35. Under what con- ditions may a national bank hold real estate ? 36. How can a national bank increase or diminish its capital ? 37. Why are national banks prohibited from using their own circulating notes to pay for their capital stock ? 38. By whom are the officers of a national bank chosen ? 39. Name the usual officers of a national bank. 40. Name the usual clerks employed in the average national bank. 41. Why should the presi- dent of a bank be a man of extended experience and superior ability? 42. State the principal duties of the average bank president. 43. Where there is a vice president in a bank what are his duties? 44. State the most important duties of the cashier of a national bank. 45. When there is an assistant cashier what are his duties? 46. Give the initial opening entry for a national bank. 47. Give the entry for the payment of the capital stock. 48. Give the entry for the purchase of United States bonds at a premium. 49. Give the entry for taking out circulating notes. 50. Give the entry for the funds remitted to the Treasurer of the United States to redeem worn and mutilated circulating notes. 1 The National Banking Act now requires the shares of stock to have a par value of $100, in harmony with the usual practice of joint-stock companies throughout the country. Some of the state banks, however, were originally organized with shares having a par value of $50. Where these banks were later changed into national banking associations they were given the privilege of forming with shares of a par value of $50. This may account for the fact that some national banks have shares whose par value is less than $100. 14 BOOKKEEPING BANK BOOKKEEPING Object. — The purpose of bank bookkeeping is to set forth first, what assets are in the possession of the bank ; and second, to whom these assets ultimately belong. The form of record is of secondary importance. In a small bank, only one set of books is needed, but as the bank grows, these books are divided and subdivided. However, all the books are parts of the general books. This set is designed to illustrate in as brief a way as possible the practical workings of an ordinary national bank. In order to get at the work directly, the various books are opened from statements showing the condition of a bank that is in operation. To open a bank and grad- ually bring it to a well-organized and paying institution would be a long, unnecessary process. In order to illustrate the closing entries in bank accounting, state- ments are made and dividends declared March 3. Books used. — The books used in this set are : general balance ledger, individual ledger, discount register, discount tickler, collection register, collection tickler, draft register, remittance register, certified check book, general cash book, and paying and receiving tellers' check sheets. Auxiliary Books. — The auxiliary books and records necessary in the organization of a national bank are essentially the same as those of any other joint-stock company or corporation. These books may be briefly referred to as follows : 1. Subscription Book, made up of a record of the names of the persons subscribing for stock and the number of shares wanted. 2. Stock Certificate Book, containing the receipts showmg the number of shares delivered to each stockholder. 3. Installment Book, in which are written the names of the stock- holders and the amount paid by each. 4. Transfer Book, in which is written a history of the certificates canceled and of the new ones issued. 5. Stock Ledger, showing the amount of capital stock and the balance to the credit of each stockholder. 6. Minute Book, in which are recorded the proceedings of the board of directors. 7. Dividend Book, in which are recorded the names of the stock- holders, the number of shares owned, the amount of their dividends at various dividend periods, and receipts for the payment of dividends. BANKING 15 Classified Work. — The work of the set is so classified that the student is made to see the principal duties devolving upon the various officers and clerks in the daily routine of recording the transactions of the bank. This classification gives the student practice in the performance of the chief duties of : 1. Paying teller. 5. Collection clerk. 2. Receiving teller. 6. Correspondence or transit clerk. 3. Note teller. 7. Individual bookkeeper. 4. Discount clerk. 8. General bookkeeper. 9. Cashier. General Directions and Suggestions. — In this set Commercial National Bank is the name under which the banking association is incorporated. The location is Boston, Mass. The student is about to familiarize himself with the details of an ordinary national banking institution, and he will be carefully instructed as to the duties of the various officers and clerks by : 1. Being allowed to examine carefully the present condition of tlie books used. 2. Being specifically instructed as to the powers, responsibilities, and general duties of the various officers and clerks. 3. Being allowed to make further entries in the various books during the progress of each day's business. WORK OF THE DISCOUNT CLERK The records of the discount clerk are to be examined first. These records are found principally in the discount register and discount tickler. The Discount Register contains a full record of all paper accepted for discount. It is the bill book of the bank and gives, in addition to the information ordinarily contained in a common bill book, the amount of discount and collection and exchange charged, the proceeds of the paper, etc. The illustration on pages 16 and 17 is self-explanatory. It shows a day's records, with the necessary check marks, etc. No record is made in the discount register at the maturity of paper; therefore it will not be necessary for the student to enter the discounted paper on hand in the discount register. (See page 95.) The Discount Tickler contains a classified record, with reference to maturity, of all the paper entered in the discount register. These records are made to "tickle," or remind, the discount clerk to have paper presented for payment at the proper time. 16 r>OOKKEEPING Discount DATE DIS- COUNTED FOR WHOM DISCOUNTED MAKER OR PAYER INDORSER WHERE PAYABLE NUM- BER DATE OF PAPER 1^- June 20 20 20 20 D. E. Avery Powers & Sprague E. V. Buckley & Son J. H. Crandall Dodge Bros, Wilson & Son C. Rear don & Co. W. O. Radcliife Frey & Mason Rogers, Peet & Co. Cook Bros. Bates Bros. Alliance Nat'l, City Farmers Bank, Chicago First Nat'l, Syracuse Our Bank Traders Nat'l, Phila. 230 231 252 233 234 ID- Apr. May Apr. June 20 1 1 15 15 As soon as paper is accepted for discount it is entered in the discount register, the due date is written across its face in red ink, and it is recorded in the discount tickler under the proper number and date. After these records have been completed the notes are carefully checked back from the tickler. The tickler is generally ruled in sections for each day in the year. At the top of each section is printed the day and date. The Remarks column is used for noting irregularities in payment, etc. Monday, NO. PAYER WHERE PAYABLE TO WHOM SENT 800 C; W. Hall & Co. Our Bank 821 Morton & Davis First National Bank, Buffalo Traders National, Buffalo 827 C. W. Carey Allston & Co., Bankers, City Tuesday, 782 Raymond Bros. Union Trust Co., City 790 Stickney,Poor&Co. National City Bank, Brooklyn Chemical National Bank, N.Y. 765 F. E. Sherman Our Bank 778 De Young Bros. Citizens Bank, Troy Farmers Bank, Albany Paper to be entered in the Discount Tickler. — The following dis- counted paper is now in the possession of the bank and is shown by the uncanceled records in the discount tickler. Take your discount tic- kler and enter this paper, being guided by the accompanying model. BANKING 17 Register TIME WHEN DUE TERM OF DIS- COUNT RATE OF DIS- COUNT AMOUNT OF PAPER INTEREST AND DISCOUNT COLLECTION AND EXCHANGE PROCEEDS TO BE CREDITED TIC- KLER CK. REMARKS 3 mo. 3 mo. 90 da. 90 da. 30 da. 19- July Aug. June July 20 1 30 14 15 30 da. 42 da. 10 da. 24 da. 25 da. 6% 6% 6% 6% 6% 2000 1500 900 6000 3000 10 10 1 24 12 50 50 50 3 88 75 1990 1487 898 5976 2983 62 50 75 Issued Cashier's Ck. 13400 58 50 5 63 v/ 13335 87 Write dates in the discount tickler as follows : March 1, 2, 3, 4, 5, 6, 9, 11, 12, 16, 25, 26, 29, 31, and April 1. Do not show any totals at this time, as the entries in the general debit and credit books will not be made until the general bookkeeper's work is given. Note. — In this work all paper maturing on Sundays or legal holidays should be entered in the ticklers under the date of the first business day following. The statutes of the different states, however, are not uniform on this point. Feb. 15, 19- Tickler BY WHOM DISCOUNTED AMOUNT TO BE COLLECTED CK. REMARKS Decker Bros. D. E. Avery E. L. Howard 7500 1500 9000 Cash Charged to Traders, Buffalo Certified, Allston & Co., Bankers 18000 Feb. 16. 19- W. I. Pratt £500 V Protested. Fees, $1.75. Charged to Pratt J. 0. Baker 3000 V Charged to C. N. B., New York Powers & Sprague 4500 V Charged to F. E. Sherman 2000 V Charged to Fanners, Albany 12000 V Paper maturing Monday, March 1 No. 889. Note of W. I. Pratt, at 30 days from Jan. 30, discounted for Decker Bros., payable at our bank, for §2750. ^18 BOOKKEEPING No. 866. Note of B. M. Vosburg & Co., at two months from Jan. 1, discounted for Mace, Gilmore & Co., payable at Traders National Bank, Buffalo, for $7500. Sent to Traders National Bank. No. 842. Note of Gregory Mfg. Co., at three months from Dec. 1 last, discounted for Spencer, Mead & Co., payable at Third National Bank, Buffalo, for $5000. Sent to Traders National Bank, Buffalo. No. 893. Note of Dillon Bros., at 30 days from Jan. 30, discounted for D. B. Roberts, payable at Merchants National Bank, City, for $7550. No. 901. Note of D. S. Davenport, at 10 days from Feb. 19, dis- counted for E. L. Howard, payable at Eliot National Bank, City, for $9500. Paper maturing Tuesday, March 2 No. 902. Note of Novelty Mfg. Co., at 10 days from Feb. 20, dis- counted for Fernald, Son & Co., payable at Alliance National Bank, Springfield, Mass., for $18,500. Sent to Alliance National Bank. No. 869. Note of F. M. Elery & Son, at two months from Jan. 2, discounted for Thomas Bennett & Co., payable at Union Bank, Worces- ter, for $32,400. Sent to Alliance National Bank, Springfield. No. 868. Note of Daniels Novelty Co., at 60 days from Jan. 1, discounted for Mace, Gilmore & Co., payable at our bank, for $33,210. No. 895. Note of Powers & Lawler, at 15 days from Feb. 15, dis- counted for W. I. Pratt, payable at Farmers Bank, Albany, for $28,890. Sent to Farmers National Bank, Albany. No. 867. Note of Baush & Lomb, at 60 days from Jan. 1, discounted for C. E. Selover & Co., indorsed by Anderson & Page, payable at our bank, for $16,500. Paper maturing Wednesday, March 3 No. 897. Note of I. M. Lyons, at 15 days from Feb. 16, discounted for D. E. Avery, payable at our bank, for $29,900. No. 882. Note of Kennedy Soap Co., at 20 days from Feb. 11, discounted for J. H. Crandall, payable at Union Trust Co., City, for $24,750. No. 883. Note of Cobb, Bates & Co., at 20 days from Feb. 11, discounted for Burgess & Co., indorsed by Ginn & Co., payable at Colonial National Bank, City, for $12,250. No. 875. Note of Cobb & Co., at 30 days from Feb. 1, discounted for George D. Hatch & Co., payable at Shoe and Leather Bank, City, for $25,625. BANKING 19 Paper maturing Thursday, March 4 No. 884. Note of W. E. Denman, at 20 days from Feb. 12, dis- counted for C. E. Denison, payable at Chemical National Bank, New York, for |37,000. Sent to Chemical National Bank. No. 906. Note of David W. Parker, at 15 days from Feb. 17, dis- counted for C. E. Denison, payable at our bank, for 130,000. No. 907. Note of Marsh & Grant, at 15 days from Feb. 17, dis- counted for Thomas Bennett & Co., payable at our bank, for $17,295. No. 876. Note of G. S. Murray, at 30 days from Feb. 2, discounted for Decker Bros., payable at Chemical National Bank, New York, for 112,460. Sent to Chemical National Bank. No. 857. Note of Fred M. Everitt & Co., at 60 days from Jan. 3, discounted for Fernald, Son & Co., payable at Farmers Bank, Albany, for 116,792. Sent to Farmers Bank. Paper maturing Friday, March 5 No. 908. Note of Stanley Carriage Co., at 10 days from Feb. 23, discounted for J. H. Crandall, payable at Union Trust Co., City, for $23,680. Paper maturing Saturday, March 6 No. 910. Note of Jamison, Baker & Co., at 10 days from Feb. 24, discounted for Freeman, Austin & Co., payable at Park Square National Bank, City, for $31,720. No. 890. Note of Fowler Mfg. Co., at 30 days from Feb. 4, dis- counted for C. E. Selover & Co., payable at Chemical National Bank, New York, for $31,750. Sent to Chemical National Bank. Paper maturing Tuesday, March 9 No. 844. Note of C. B. Conroy & Co., at three months from Dec. 9 last, discounted for Lane, Rowell & Co., payable at our bank, for $25,750. Paper maturing Friday, March 12 No. 847. Note of D. D. Eldred, at three months from Dec. 12 last, discounted for F. E. Sherman, payable at our bank, for $15,950.50. Present the discount tickler to your teacher for approval. The Duties of the Discount Clerk may be specified as follows : 1. He takes charge of the bills receivable accepted for discount. 2. He keeps the records of the loaning department of the bank. 20 BOOKKEEPmG Transactions for the Discount Clerk, March 1 The following paper has been offered and accepted for discount to-day. As discount clerk make the proper records in the discount register. Examine the model for discount register given on pages 16 and 17. Consult your instructor when in doubt on any point. In the following memoranda of transactions, where the paper contains no other indorsement than that of the holder, the indorser is not stated, and the column Indorser in the discount register may be left blank. Unless otherwise stated, discount is computed at 6% per annum. No. 920. Note of Wells, Osborn & Co., at 30 days from March 1, discounted for Mace, Gilmore & Co., payable at Old Colony National Bank, City, for $2960. Discount, $14.80. Proceeds credited. No. 921. Note of Baker & Small, at 30 days from Feb. 23, indorsed by King & Chappell, discounted for Decker Bros., payable at First National Bank, Worcester, for 17500. Discount, f30. Collection and exchange, 17.50. Proceeds credited. No. 922. Note of Wyckoff & Co., at 30 days from March 1, dis- counted for W. I. Pratt, payable at Old Colony National Bank, City, for 11500. Discount, $7.50. Proceeds credited. No. 923. Note of C. A. Seaver & Co., at 15 days from March 1, indorsed by Boswell, Mason & Co., discounted for Wyckoff, Seamans & Benedict, payable at our bank, for $10,000. Discount, $25. Proceeds credited. No. 924. Note of F. E. Harris, at 10 days from March 1, discounted for J. H. Crandall, payable at Farmers Bank, Albany, for $9000. Dis- count, $15. Collection and exchange, $9.50. Collection WHEN LEFT NO. PAYER INDORSER WHERE PAYABLE Feb. 16 610 C. W. Young Union Trust Co., City 16 611 E. 0. Frey & Co. .' Traders Nat'l, Bulfalo 16 612 Geo. A. Ward Wood & Garson Park Nat'l, Providence 16 613 F. E. Brown Scranton & Co. Our Bank 16 614 Mason, Quigley & Co. Our Bank 16 615 Reardon & Ellis Rowland & Haviland Alliance Nat'l, Springfield 16 616 Novelty Mfg. Co. Our Bank 16 617 Ellis Soap Co. Robert Simpson Monroe Bank, City 17 618 C. H, Bryant Our Bank BANKING 21 As discount clerk the student should now proceed as follows : 1. Rule and foot the discount register. Examine the model given. 2. Prove the footings. The total of the Proceeds column plus the total of the Discount and Collection and Exchange columns should equal the total of the Amount column. 3. Post the entries from the discount register to the discount tickler. Leave the columns Where Sent and Remarks in the discount tickler blank for the time being. These will be filled out later as the work progresses. Submit the discount register and discount tickler to your instructor for approval. The Auxiliary Books kept by the discount clerk are of significant importance in a bank, but they are so simple in character and so self- explanatory that it is thought best not to attempt to use them in these records. They are : 1. The Offering Book^ containing information with reference to the parties applying for loans. 2. The Discount Ledger^ contaiuing a record of the amount of paper discounted for each customer. 3. The Customers' Bill Book, containing a detailed statement of the various papers offered for discount by the customers of the bank. WORK OF THE COLLECTION CLERK The records of the collection clerk are now to be examined. They are found principally in the collection register and collection tickler. The Collection Register contains a record of all commercial paper received by the bank for collection. Many banks keep two collection Register DATE OF DRAFT OR NOTE TIME WHEN DUE FOR WHOM COLLECTED AMOUNT TO BE COLLECTED CK. REMARKS Feb. 9 2 mo. April 9 Fields Milling Co. 1650 \/ 2 3 mo. May 2 Charles J. Kennedy 2500 v/ 2 60 da. April 3 E. V. Buclcley & Son 10000 V Jan. 29 3 mo. 29 Wyckoff , Seamans & Benedict 75 20 V IG 4 mo. May 16 F. E. Sherman 1150 22 V 21 4 mo. 21 Freeman, Austin & Co. 95 GO V Feb. 2 GO da. April 3 C. E. Denison 1250 V 3 30 da. March 5 D. E. Avery 9500 v/ 7 2 mo. April 7 Alliance Bank, Springfield 215 90 v^ 9'-) BOOKKEEPING registers, one for city collections and one for collections payable out of town. The paper entered in the collection register is generally num- bered consecutively. The foregoing model is self-explanatory. The column Indorser need not be filled out except when there is an indorser other than the owner of the paper. If any time paper is interest-bearing, the amount of the interest should be added to the face of the paper before it is recorded in the collection register. Since no record is needed in the collection register at the maturity of paper, it will not be necessary for the student to enter the collection paper on hand in the collection register. The Collection Tickler. — As soon as paper is properly recorded in the collection register it is classified in the collection tickler under its date of maturity. The object of the collection tickler is to remind the bank clerks of the maturity of paper leceived for collection. The following collection paper is now in the possession of the bank and is shown by the uncanceled records in the collection tickler. Record it in your collection tickler. (See page 95.) Collection Monday, NO. PAYER WHERE PAYABLE TO WHOM SENT 590 592 593 595 596 C. W. Gray L. 0. Sweetland N. P. Pond D. E. Anderson & Co. Frey, Miller & Co. Our Bank Alliance Nat'l, Springfield Traders Nat'l, Buffalo Union Trust Co., City Park Nat'l, City Alliance Nat'l, Springfield Fourth Nat'l, Buffalo Tuesday, 572 D. O. Dale & Co. First Nat'l, Albany Farmers Bank, Albany 581 Covey & Dudley Co. Traders Nat'l, Albany Farmers Bank, Albany 598 Paine Cutlery Co. Union Bank, Worcester Alliance Nat'l, Springfield 601 F. C. Rowland Our Bank 602 C. E. Reardon Suffolk Nat'l, City 60C Sampson & Newell Mechanics Nat'l, Springfield Alliance Nat'l, Springfield Write dates in the collection tickler as follows : Feb. 25, 2G, March 1, 2, 3, 4, 5, 6, 9, 10, 18, 27, 31, April 1 and 2. Write March 3 twice. BANKING 23 Collections maturing Thursday, Feb. 25 No. 650. Note signed by Wentworth & Son, dated Nov. 25 last, at three months, indorsed by J. K. Miner, payable at Albany, N.Y., for i725. Sent to Farmers Bank. To be collected for E. V. Buckley & Son. No. 702. Note signed by Daly Bros., dated Dec. 25, at two months, payable at Albany, N.Y., for |1200. Sent to Farmers Bank. To be collected for J. O. Baker. No. 723. ,Draft dated Jan. 25, at one month from date, on F. W. Edwards & Son, payable at Fourth National Bank, Brooklyn, for $1005.25. Sent to Chemical National Bank, New York. To be col- lected for Powers & Sprague. Collections maturing Friday, Feb. 26 No. 726. Note signed by E. B. Munroe, dated Jan. 27, at 30 days, payable at Providence, for $4900. Sent to Chase National Bank, Provi- dence. To be collected for Decker Bros. Tickler Feb. 15, 19- FOR WHOM COLLECTED AMOUNTTOBE COLLECTED WHEN AND HOW DISPOSED OF Spencer, Mead & Co. Mace, Gilmore & Co. W. I. Pratt Alliance Nat'l, Springfield Chase Nat'l, Providence 9000 752 1750 7200 1625 50 90 Paid, 2/15. Chgd. Alliance Nat'l, 2/19. Our coll., 750; bank's coll., $1 Chgd. Fourth Nat'l, 2/20. Our coll., 1^1.75; bank's coll., !g2.25 Certified, 2/15, Union Trust Co. Our coll., $7.20 Certified, 2/15, P. N. B. Our coll., $1.65 Feb. 16. 19. W. I. Pratt 2100 Chgd. Farmers Bank, 2/22. Our coll., $2.10; bank's coll., $4 D. E. Avery 1650 Chgd. Farmers Bank, 2/22. Our coll., $1.65; bank's coll., $3 C. E. Denison 662 90 Chgd. Alliance Nat'l, 2/21. Our coll., m
i o
K/he >^nlational ^Jjank of i^ommerce
CLiM-eAt c/. €aM-cy\yvi has deposited in this *Jjanh
zPciycihle to the order of kvm.^&t'l^-^^--^-^^-^^^--^-.^-.^'.^^^^^^
on the return of this (Certificate properly indorsed
(Cashier
Cashier's Checks. — Cashier's checks are quite similar to the ordinary
checks of customers, except that they are signed by the cashier of the
bank on whom they are drawn. They are sometimes used instead of
bank drafts and in paying the proceeds of paper discounted, but are
I
BANKING 29
more frequently employed in paying the general expenses of the bank,
except small incidental items, which are usually paid by means of charge
tickets signed by the cashier.
CO
^
^Boston, ^Mass,, <^e-(^. I^, 79 ^o, 7^0
K//ie ^^latlonal K/janU of fj\.eoemption
^ay to the orden of ^^^y. ^li.'yttU V ^a. //i'f^.^-^
(Bashien
\
Nature of Deposits. — As deposits come in from customers they may
consist of any one, or all, of the following items :
1. Currency.
2. Orders payable through the clearing-house association.
3. Orders payable out of town.
4. Orders payable by our bank.
6. Orders payable by bankers in our city not members of the
clearing-house association.
Classifying Items on the Deposit Ticket. — As a deposit comes in,
the receiving teller places the deposit ticket before him and pro-
ceeds to count the coin and bills. If they are found to agree with
the amounts on the ticket, a check mark ( V) is placed at the left of
the items listed.
Each check, draft, or other bankable instrument is then carefully
examined to see if it is properly indorsed. If this paper is approved,
it is next checked off and classified on the deposit ticket as follows :
1. If payable by a bank which is a member of the clearing-house
association, the clearing-house number of that bank is written at the
left of the item.
2. If payable by an out-of-town bank, a cross ( X ) is written at the
left of the item.
Note. — Sometimes deposit tickets are provided with a separate column for items
payable out of town. In such cases the out-of-town items are sufficiently classified
when the deposit ticket comes in to the receiving teller.
30
BOOKKEEPING
3. If payable by a city bank not a member of the clearing-house
association the letter O is written at the left of the items.
Note. — O is intended to signify Office, a term meaning that the paper is payable
at some banking or business office in the city instead of through the clearing-house
association. These items are sent by runners and payment received in cash or by
an acceptance payable at a clearing-house bank. If the paper is accepted instead
of paid, it is returned and entered with the exchanges for the clearing-house associa-
tion for the following day.
4. If payable by our bank, the letter B is written to the left of the
items.
DEPOSITED IN THE
J^atlonal Citi/ ^ank
3Si/ Jr^imn/i'yb l^ Gcyrul
^Boston. ^^(>- f^, 79-
J^oUars
Cents
Specie v^
^'00
Bills v/
700
Check . ^S7
2^0
c^q
^
/
SOO
60
#/^
/
^00
X.
500
B
700
J
/f/
^Cf
Transactions for the Receiving Teller, March 1
Take the blank for receiving teller's daily check sheets and enter the
following deposits. Study very carefully the form given on page 27,
and if you do not understand any point, consult your instructor. The
nature of the deposit in the following transactions is indicated by the
characters just explained.
BANKING
31
Decker Bros., V $600, B $1500, B $720.50.
Mace, Gilmore & Co., V 1720, V |400,# 61 $1290, #4 $1500, #31 $650.
Spencer, Mead & Co., B $1250.20, B $340.20, X $1340.20, X $1343.46,
$342.90 ; less collection, $2.75.
D. B. Roberts, V$120, V $60, #32 $950.60, O $1625, B $72.60.
Fernald, Son & Co., V $725, B $650.60, O $900, X $1750 ; less col-
lection, $1.75.
W. I. Pratt, V $120, B $1625, X $1900; less collection, $1.90.
F. E. Sherman, O $156.90, B $1750, #15 $165.90, V $7200.
C. E. Denison, X $1590.60, V $2500, B $200, #12 $1560; less col-
5ction, $1.50.
Thomas Bennett & Co., V $400, B $262.90, B $40.50, B $200,
60$4126.20, #11 $2142.10, #5 $1462.90, #3 $2460.10, X $1325.62,
$1462.91, X $142.10; collection, $2.25, paid in cash.
Note. — When the collection charges on any paper deposited are paid in cash
le amount is not deducted from the deposit slip. On the receiving teller's sheet the
items of deposit and collection charges are entered as usual, and, in addition, the
imount of the collection charges is written in the Currency column.
E.L.Howard, V$1450, B $1242.10, X $1121.40, x $24.16, X $142.60 ;
[ess collection, $1.25.
Charles J. Kennedy, V $350, #17 $1210, #27 $1620.40.
E. V. Buckley & Son, x $621.40, x $340, x $4000; less collec-
Lon, $1.
Foot the columns of the receiving teller's daily check sheet. The
mm of the first five columns should equal the sum of the last two.
Make out the Recapitulation and Proof blank. Bills on hand, $10,760 ;
5oin, $987.25. You have given to the paying teller during the day
J2900. The remaining items of the proof are taken from the receiving
jUer's daily check sheet footings.
The debit and credit sides of your proof should balance.
Submit the receiving teller's work to your instructor for approvah
WORK OF THE PAYING TELLER
The records of the paying teller in this set are to be found on the
[paying teller's daily check sheets.
Paying Teller's Daily Check Sheet and Proof. — A great variety of
Eorms of this sheet is used by banks. The nature of the records in this
lepartment would depend upon the general routine and volume of the
[work of any particular bank. The sheet on pages 32 and 33, with
BOOKKEEPING
Paying Teller's Daily
PAYMENTS
CK.
B
OUR BANK
#
CLEARING
HOUSE
X
OUT-OF-TOWN
CITY OFFICE
EXPENSE 1
j
V^
Fields Milling Co.
200
y/
Charles J. Kenned^/
13000
V
C. E. Selover & Co.
720
V
C. E. Dmison {N. Y. D.)
560
75
V
D. E. Avery {N. Y. D.)
240
50
-
V
J. H. Crandall
1001
50
V
W. I. Pratt
Bunker Rill
Traders
Park Square
Traders, Buffalo
Alliance, Springfield
Farmers, Albany
Mechanics
Powers
Coal bill
Carpenter work
238
75
10160
300
560
40
1346
7645
1900
50
90
40
200
150
5
9
50
50
15961
50
11020
40
10892
SO
350
15
Recapitulation
RECEIPTS
1. Cctsh from yesterday
90150
50
2. neceiving Teller
9200
50
3. Note Teller
11420
4. Jteceiving Teller {Special)
14000
5, Collection and Exchange S.oo^ 12. oo
15
6. New York J>ra/ts
2100
7. Balance from, Clearing House
7120
50
. .-
134006
50 *
i
BANKING
33
Check Sheet and Proof
Saturday, April 7, 19
RECEIPTS
SALE OF NEW YORK DRAFTS
SOLD FOR CASH
/. M. Cox & Co.
R. Bdble & Co.
SOLD FOR CHECK
C. E. Denison
D. E. Avery
Balance front yesterday's proof
Receiviny Teller, from yesterday
Note Teller, from yesterday
Receiving Teller (Special)
(< (( (t
Balance from Clearing House
AMOUNT
500
800
560
2100
00
SUNDRY
RECEIPTS
90150
9200
11420
9000
5000
7120
131891
50
50
SUNDRY
COLL. & EXCH.
12
00
and Proof
PAYMENTS
1. Checks on our Bank
15961
50
2. Clearing- House Checks
11020
40
3. Out-of-town Checks
10892
80
4. City Office Items
350
S. Sundry Expense
15
6. Balance to Clearing House
7. Cash on hand
05766
80
134006
50
34 BOOKKEEPi:NrG
slight modifications, is representative of the paying teller's records in
many large banks of the country.
As will be readily seen, all money paid out or received by the paying
teller at the time of such disbursement or receipt is entered on this
daily check sheet.
Recapitulation and Proof. — At the close of each day's business the
paying teller prepares the proof, showing the character and condition
of the cash on hand, and the receipts and disbursements during the
day. The items of this proof may be explained as follows :
Receipts
1. Balance on hand from the previous day's proof.
2. Bills and coin received from the receiving teller at the close of
the previous day's business.
3. Bills and coin received from the note teller at the close of the
previous day's business.
4. Cash transferred from the receiving teller during the day.
5. Receipts for collection and exchange.
6. Receipts for the sale of drafts.
7. Balance (if any) paid by the clearing house.
The clearing-house balance may appear on either side of the paying
teller's proof sheet. If the amount of the checks, drafts, etc., taken to
the clearing house is greater than the amount of checks received there,
the clearing house pays the settling bank the difference, and the amount
is counted among the receipts on the paying teller's proof. If the
amount of the checks received at the clearing house is greater than the
amount of checks brought, the bank settling pays the clearing house
the difference, and this amount is counted among the payments on the
paying teller's proof.
Payments
The items on this side are self-explanatory, since they are merely the
footings of the payments on the check sheet summarized. The cash on
hand is the total bills and coin in the possession of the paying teller at
the close of the day's business. These bills and coin are generally
classified as follows:
1. National bank notes. 5. Silver certificates.
2. Gold coin. 6. Legal-tender notes.
3. Gold certificates. 7. Subsidiary silver coin.
4. Silver dollars. 8. Minor coin.
BANKING 35
The Duties of the Paying Teller may be specified as follows :
1. He is the custodian of the cash, and the general disbursing
officer of the bank.
2. He cashes checks presented by customers and others.
3. He certifies the checks of customers.
4. He may sell bank drafts.
The paying teller's position is charged with more responsibility than
that of any other person in the bank, except the officers. He must be
a man of the -strictest integrity, possessed of tact, and thoroughly con-
versant with the laws governing bank checks and drafts. His most
responsible duty is to see that no money is paid out improperly.
Among the many things that he should have in mind when checks
are presented the most important may be stated as follows:
1. Signatures of customers.
2. New signatures, powers of attorney, notices stopping payments
of checks, etc,
3. Definite knowledge of the parties presenting vouchers.
4. Average balances of customers, so that overdrafts may be
prevented.
When checks, etc. are received the paying teller should note :
1. That they are properly dated.
2. That they are indorsed.
3. That the amounts written in words agree with the amounts
written in figures.
Form of Certified Check
J^o.720
'dollars
1
^tidyyuAf, S'oo
The Certified Check Book. — The paying teller preserves a record of
all checks certified, in a book kept especially for this purpose. From
36
BOOKKEEPING
this book the customer is charged in the individual ledger and Certified
Checks credited. The following is the usual form of this book.
Certified Check Book
^
DATE
CERTIFIED
DRAWER OF CHECK
FOR WHOM CERTIFIED
CK.
AMOUNT OF
CHECK
WHEN PAID
AMOUNT PAID
19—
Peb.
15
15
15
D. B. Roberts
Thos. Bennett & Co.
Spencer, Mead & Co.
W. I. Pratt
J. 0. Baker
Decker Bros.
F. E. Sherman
D. B. Roberts
M. D. Borrows
W. W. Bennett
W. I. Pratt
Elwood & Sperry
Reardon & Smith
F. E. Sherman
V
V
V
6000
1750
2000
19—
Feb.
Feb.
18
17
19
18
23
5000
1750
1500
2000
1500
8750
Feb.
16
16
16
16
1500
2000
7249
1500
20
12249
20
i
Transactions for the Paying Teller, March 1
Take the blank for paying teller's daily check sheets and enter the
following transactions. Study very carefully the form given on pages
32 and 33. Consult your instructor if you need to.
1. Checks on our bank paid to-day are as follows :
Charles J. Kennedy (New York draft), 1420.75; F. E. Sherman,
$1200; Powers & Sprague, $1000; Lane, Rowell & Co., |300;
Wyckoff, Seamans & Benedict, $450 ; Janis, Cooper & Tremper,
11500; Fields Milling Co., $500; J. O. Baker, $1049.75; W. 1.
Pratt, $725.
2. Checks on clearing-house banks paid to-day are as follows :
Bunker Hill National Bank, $920; Suffolk National Bank, $750; Colo-
nial National Bank, $609.05 ; Shoe and Leather Bank, $500 ; Third
National Bank, $400; Metropolitan National Bank, $725 ; Eliot National
Bank, $1250.40; Citizens National Bank, $4120.40; Park Square
National Bank, $2140.50; New England National Bank, $1440.50.
3. Checks on out-of-town banks paid to-day are as follows :
Manufacturers and Traders Bank, Philadelphia, $700.50; collection,
75/. Bank of Commerce, Baltimore, $1300; collection, $1.25. Fourth
National Bank, Hartford, $3250 ; collection, $3. Farmers Bank, Albany,
$1500; collection, $1.50.
4. Checks on banks in our city not members of the clearing house,
paid to-day, are as follows:
Union Trust Co., $300; Powers Bank, $572.50.
I
r
BANKING 37
Sold the following drafts on Chemical National Bank, New York.
1. Sold for cash :
Frey & Thomas Co., $1500; exchange, 81.50. David Gray, 1500;
exchange, 50/. Charles M. Miner, $750; exchange, 75/.
2. Sold for check :
Charles J. Kennedy, $420.50; exchange, 25/.
Enter the above on the paying teller's daily check sheet.
Open the certified check book. There is but one unpaid check, as
follows: check of Wyckoff, Seamans & Benedict, dated Feb. 23,
certified for Elliot Mfg. Co., $17,500.
Draw a double red line immediately under this amount, so that it
will not be counted when the certified checks for to-day are footed.
Certify the following checks: J. H. Crandall, $1200; C. E. Denison,
$500; W. I. Pratt, $600.
Enter the above in the certified check book.
Pay cashier's charge ticket for 2 tons of coal, $9.50.
The items for the Sundry Receipts column are as follows :
Bills and coin from yesterday's proof, $206,710.81; bills and coin
received from the receiving teller at the close of yesterday's business,
$15,280.45 ; bills and coin received from the receiving teller during the
day, $2900; bills and coin received from the note teller at the close of
yesterday's business, $5504.40; received from the clearing house for
to-day's exchanges, $31,863.11.
Add the columns of the paying teller's daily check sheet. Make out
the Recapitulation and Proof blank. A careful count of the cash now
on hand under various heads (subdivisions of bills and coin only) shows
an amount of $237,804.92.
Foot the certified check book. Submit your paying teller's records
to your instructor for approval.
Note. — The paying teller makes out his proof before the cash from the receiv-
ing teller and note teller has been turned over to him. After the receiving teller
and note teller respectively make their proofs they turn over the balance of cash
in their hands to the paying teller. These amounts appear on the paying teller's
proof on the day following.
WORK OF THE NOTE TELLER
The Duties of the note teller are difficult to define, since there is a
wide difference among banks as to the work assigned to this clerk. In
nearly all banks, however, he is required to present for payment such
notes, acceptances, coupons, etc., as are due and payable in the city,
38 BOOKKEEPING
and to collect the city office items turned over to him at the close of
each day by the receiving teller, paying teller, and correspondence clerk.
The Runners of the bank are generally under the supervision of the
note teller. These runners are assigned a definite route, which they
cover daily, and present for payment or acceptance such paper as may
be allotted to them. They keep a route hooh^ in which is recorded a
full description of such paper.
The Note Teller's Records. — As a rule the charge and credit tickets,
letters, or other memoranda which affect the general ledger, the credit
tickets for the proceeds of bills discounted, and collection items for the
individual ledger pass through the note teller's hands before reaching
the general and individual bookkeepers. To make this work as simple
as consistent with approved banking practice, we have deviated from
this plan to the extent of deferring these items until the enumeration
of the memoranda for the general and individual bookkeepers' transac-
tions is given on subsequent pages. The note teller's daily check sheets
and proofs will therefore be omitted. The sagacious student, however,
would soon perceive the offices and possibilities of these sheets in
banks making use of them.
Charging Notes to Out-of-Town Banks. — Notes and drafts discounted,
payable out of town, are usually sent away for collection about ten
days before they are due. At the maturity of these notes and drafts
they are charged to the banks to which they are remitted, without
waiting for letters advising collection.
Each morning the discount clerk takes the bills discounted, payable
in the city and falling due on that particular day, from the note file
and compares them with the items listed on the discount tickler, after
which they are handed to the note teller for collection. As the paper is
disposed of a record is made in the Remarks column of the discount
tickler.
Make the proper records in the discount tickler for the paper disposed
of to-day. In the Remarks column write :
For No. 889, Charged to Pratt
For No. 866, Charged to Traders National,
For No. 842, Charged to Traders National,
For No. 893, Certified, M. N B.
For No. 901, Certified, K N, B.
Note. — Nos. 866 and 842 will be charged to the banks specified at their face.
It is customary with banks not to make any record of collection and exchange on
such items until the bank to which the notes were remitted sends notice of collection.
BANKING
39
Rule and foot the discount tickler. (See model, pages 16 and 17.)
Each morning the collection clerk proceeds, in much the same manner as
the discount clerk, to turn over to the note teller the collections payable in
the city and falling due on any particular day. As this paper is disposed
of a record is made in the Remarks column of the collection tickler.
Make records in the collection tickler for the paper disposed of to-day.
In the Remarks column write :
For No. 744, Paid, 3/1.
For Ko. 755, Paid, S/L
Collections are not charged to the banks to which they are sent until a
report of collection has been received. Farmers Bank, Albany, reports
that collections 650 and 702 have been paid and placed to the credit of
your account. In the Remarks column of the collection tickler write :
For No. 650, Charged Farmers Bank, 3/1. Bank's collection,
$1.75; our collection, 75 ff.
For No. 702, Charged Farmers Bank, 3/1. Bank's collection,
$1.20; our collection, $3.
Form of Letter advising of Collections Credited
John 0. Norris, President Robert Hall, Vice President
L. H. PiERSON. Cashier
National Exchange Bank
Albany, N.Y., c^^^. is, 19
Mr. ^Aa^. la. /{-a.^n^lltcyn., Cashier
JSoatcyyv, 7lia-2^^.
Dear Sir, — We credit your account this day for the proceeds of
collections as stated below. Respectfully yours,
L. //-. S'l^x^cy)^, Cashier
YOUR NO.
PAYER
AMOUNT
CHARGES
PROCEEDS
7/6
7/0
^. €. /Scyyvoi
10'. ^. La^uf
800
^00
760
600
2
2
/-
/
60
60
26
7^8
8^7
7^8
60
60
76
2^60
i r
26
2^^2
76
40
BOOKKEEPIKG
WORK OF THE CORRESPONDENCE CLERK
The province of this clerk is to keep the accounts of all the out-of-
town banks with whom we have dealings. All cash items received from
or sent to these banks are handled by this clerk, and so kept entirely
separate from the items received for collection by the collection clerk.
Checks and sight drafts received on deposit, which are payable out
of town, are remitted to our correspondents (out-of-town banks with
whom Ave have regular dealings) the same as cash.
Sometimes the collection clerk handles checks on out-of-town banks
and sight papers payable out of town. If any paper is received for
collection, it should be turned over to the collection clerk, entered in
the collection register, and transferred to the collection tickler. If any
paper is received on deposit, it should be turned over to the corre-
spondence clerk and entered in the remittance register to the credit of
the bank making the remittance. (See page 95.)
Remittance Register and
Chemical National
DATE OF
C. B.
FOLIO
EXPLANATION OF TRANSACTION
DESCRIPTION OF REMITTANCE ITEMS
TRANSACTION
INDORSER
PAYER
Feb.
2
Balance
3
Remitted for credit
F. E. Sherman
A. B. Lyman
Remitted for credit
C. E. Denisou
Ruggles & Co.
Remitted for credit
Powers & Sprague
Filens & Co.
41
Remitted for credit
Fernald, Son & Co.
Moore & Freeman
3
41
Discount No. 590, charged
3
40
Total items received for credit
d^^K
4
41
Discount No. 565, charged
'^^^v
4
40
Total items received for credit
'^^B
4
40
Drafts per draft register
^B
Remittance Register and Out-of-Town Banks Ledger. — This book con-
tains a record of all transactions with out-of-town banks. It serves the
double purpose of registering remittances and giving a full and detailed
ledger account of all out-of-town banks. The aggregate balances of the
accounts in this book should at all times agree with the balance
Out-of-Town Banks account in the general balance ledger.
BANKIKG
41
^■the present time.
W
raders ]N"ational Bank, Buffalo
Manufacturers and Traders Bank, Philadelphia
Bank of Commerce, Baltimore
Fourth iSTational Bank, Chicago
^H Ninth National Bank, Hartford
^B Chase National Bank, Providence
^BChemical National Bank, New York
^■Farmers Bank, Albany
^■Alliance National Bank, Springfield
^Brirst National Bank, New York (Approved Ke
^H serve Agent)
I
Bank. Ne-w York
Dr.
$2754.90
Cr.
$1472.20
648.90
3240.95
15219.65
3752.60
7572.20
75920.50
5214.90
162240.70
Enter the above balances in the remittance register, one account to
a page. The amounts of all balances in this book are written in red ink.
Out-of-Town Banks Ledger
fc
CHARGED
LEDGER STATEMENT OF THE ACCOUNT
1
WHERE PAYABLE
DATE OF PAPER
AMOUNT
DEBIT BALANCES
CHARGES
CREDITS
CREDIT BALANCES
I
IIDO
CO
■
Your bank
Feb.
1
500
90
■
Ninth National
1
650
Traders Nat'l, Brooklyn
2
750
1
Second National
2
920
2820
7500
10320
90
90
9115
75
1000
2G95
3620
6590
10210
75
90
90
95
15
This morning's mail contained the following amounts from the banks
named, for credit. Enter the amounts in the remittance register, being
very careful to record everything correctly. Study the accompanying
model. Only the total remittances are given below, since the items
need not be recorded in the remittance register. The letters containing
an itemized statement of this paper are filed for reference, and may be
42
BOOKKEEPING
examined whenever it is necessary to look up any of the details relating
to any particular remittance.
Traders National Bank, BufPalo $1142.90
Bank of Commerce, Baltimore 1642.95
Fourth National Bank, Chicago 4694.25
Chemical National Bank, New York 560.20
Manufacturers and Traders Bank, Philadelphia 4500.
Chase National Bank, Providence 1721.42
Farmers Bank, Albany 4921.62
Alliance National Bank, Springfield 3752.88
Form of Letter advising Remittance of Cash Items for Credit
HENRY L. MILLER, President GEO. A. DUNKLE. Vice President
G. W. WILLIAMS, Cashier
>,^m.anufacturers and K/raders fjjank
Philadelphia. ^ct„ ^eA. 27, 19—
^Mn, €. ^. ^OLUf-e., Cashier
SDear Sir, 9?lease find herewith for CREDIT to
our account the items listed Below .
DATE
DRAWEE
ITEMS
AMOUNT
CHARGED
c^5^.
2^
23
26
yo-iih ISa/nk
Hid ^otcyyi^f c/iatuyyuLl
760
2^0
600
^/O
/6(fO
c^O
Very respectfully yours,
c^. ^. 14Mtlla.viQ^, Qashier
The following are the drafts drawn on Chemical National Bank, New
York, as per stubs in the draft book.
No. 430, $1500; No. 431, $500; No. 432, $750; No. 433, $420.50.
i
BANKING
43
Enter the foregoing drafts in the draft register. Foot the draft
register and credit Chemical National Bank in the remittance register
for the total. Check the amount transferred.
The Draft Register. — Bank drafts are taken from a book resembling
an ordinary check book. They are in reality checks of one banking
institution upon another banking institution. In due time they find
their way to the banks upon which they are drawn ; they are charged
to the banks drawing them, and then returned in much the same manner
as the checks, of resident depositors. These drafts are transferred from
the draft book to the draft register, — a blank provided with two
columns, one for the numbers, and one for the amounts of the drafts.
At the close of the day the draft register is footed, and the total com-
pared with the footing of the draft column of the paying teller's daily
check sheet, and posted to the remittance register.
^ruft ^i
£>rafts
on
eqtster
(^/lemtcal >^atlonal cSi
arik
DATE
CK. i NO.
AMOUNT 1
DATE
V
NO.
AMOUNT
/9_
f 6
/ 6
/ 6
16
/ 6
/ 6
/ 6
/6
/6
/ 6
326
326
327
328
32^
330
760
260
600
/ 600
760
60
^6
66
1
/6
/6
/6
/6
336
336
337
338
220/
800
608
600
80
20
f/^f
^\
^260
60
S'&(j-.
33/
332
333
33^
720
280
600
700
^0
90
60
220/
80
44 BOOKKEEPING
Special Agents or Correspondents A bank does not enter into busi-
ness relations with every individual bank from which checks and drafts
may be received. In the course of a month a large bank would have
paper for collection payable at many hundred banks located at different
points throughout the country. To send this paper to the various
banks upon which it is drawn would be most inconvenient as well as
expensive. To obviate this, banks have special agents or correspondents
located at convenient centers through which it makes its collections.
This arrangement simplifies the whole business of collecting paper and
reduces the correspondence of the bank to a minimum.
We have this day made the following remittances to out-of-town
banks for credit. (See form for remittance letter, page 42.)
To Traders National Bank, Buffalo.
Check of Bates, Torey & Co., dated Feb. 26, on Second National Bank,
Buffalo, indorsed by Spencer, Mead & Co., for 11340.20; check of A. B.
Murray, dated Feb. 25, on Central Bank, Rochester, indorsed by Manu-
facturers and Traders Bank, Philadelphia, for $1321.72 ; draft of First
National Bank, Worcester, dated Feb. 25, on Traders National Bank,
Buffalo, indorsed by Alliance National Bank, Springfield, for $722.40.
To Bank of Commerce, Baltimore.
Check of F. E. Barry, dated Feb. 25, on Commercial Bank, Balti-
more, indorsed by Spencer, Mead & Co., for $342.90 ; check of M. E.
Gay, dated Feb. 24, on Bank of Commerce, indorsed by Alliance National
Bank, Springfield, for $142.16.
To Fourth National Bank, Chicago.
Check of A. B. Tonner, dated Feb. 23, on First National Bank,
St. Louis, indorsed by Alliance National Bank, Springfield, for $1721.95 ;
check of D. O. Manning, dated Feb. 23, on Commercial Bank, Cincin-
nati, indorsed by Farmers Bank, Albany, for $122.75 ; check of F. W.
Wayne & Co., dated Feb. 23, on Union Bank, Minneapolis, Minn.,
indorsed by Farmers Bank, Albany, for $1420.50.
To Chemical National Bank, New York.
Check of C. E. BoUes, dated Feb. 23, on Eliot National Bank,
Poughkeepsie, indorsed by Spencer, Mead & Co., for $1343.46 ; check
of Morton & Mills, dated Feb. 21, on City National Bank, Peekskill,
indorsed by Thomas Bennett & Co., for $1325.62; check of D. E.
Brown, dated Feb. 21, on Second National Bank, Brooklyn, indorsed
BANKING 45
by Thomas Bennett & Co., for $1462.91; check of Earl & Henderson,
dated Feb. 20, on Merchants Bank, Paterson, indorsed by Thomas Bennett
& Co., for $142.10; check of A. B. King, dated Feb. 24, on Rockland
National Bank, Brooklyn, indorsed by E. L. Howard, for $142.60.
To Alliance National Bank, Springfield.
Check of C. W. Gray, dated Feb. 24, on Bay State Bank, Worcester,
indorsed by C. E. Denison, for $1590.60 ; check of C. H. Thurber, dated
Feb. 26, on A-lliance National Bank, Springfield, indorsed by E.L.Howard,
for $1121.40 ; check of W. H. Greeley, dated Feb. 24, on National City
Bank, Northampton, indorsed by E. L. Howard, for $24.16.
To Ninth National Bank, Hartford.
Check of Jones Dairy Co., dated Feb. 23, on City Bank, Hartford,
indorsed by E. V. Buckley & Son, for $621.40 ; check of Oak Grove
Creamery Co., dated Feb. 23, on Citizens Bank, Torrington, indorsed
by E. V. Buckley & Son, for $340.
To Chase National Bank, Providence.
Check of C. F. Gray, dated Feb. 21, on Second National Bank, Provi-
dence, indorsed by Fourth National Bank, Chicago, for $1694.25 ;
check of E. C. Delano, dated Feb. 21, on Union Bank, Providence,
indorsed by Fourth National Bank, Chicago, for $1500 ; check of C. A.
Snow, dated Feb. 20, on Union Bank, Providence, indorsed by Alliance
National Bank, Springfield, for $1166.37.
To Farmers Bank, Albany.
Check of F. E. Smith, dated Feb. 23, on Central Bank, Troy, indorsed
by Fernald, Son & Co., for $1750 ; check of Crescent Mfg. Co., dated
Feb. 24, on Commercial Bank, Utica, indorsed by W. I. Pratt, for
$1900.
Enter the above paper in the remittance register, showing each item in
detail. The letters containing a description of this paper are sent away,
and unless we take a copy of such letters we have nothing to show in
detail the amounts of our remittances from time to time.
The note teller has advised you, by means of charge tickets, of the
following debits to out-of-town banks.
Traders National Bank, Buffalo, note for $5000 (discount No. 842)
Traders National Bank, Buffalo, note for $7500 (discount No. 866)
Farmers Bank, Albany, proceeds of collection No. 650, $723.25
Farmers Bank, Albany, proceeds of collection No. 702, $1198.80.
46 BOOKKEEPING
Enter the foregoing items in the remittance register. Consult your
instructor if necessary.
Form of Charge Ticket
^Jhe ^Jruders .Rational ^Jjank
Boston, >^ass., f'iuyi& 2, /9
Ghange
7600
7^6
60
S)tscount Slerk
On a line with the last item entered extend the balances for all the
accounts in the remittance register. Note particularly the two columns
for balance. The debit balances are written on the left and the credit
balances on the right in red ink. (See model, pages 40 and 41.)
Present your remittance register to your instructor for approval.
WORK OF THE mDIVIDUAL BOOKKEEPER
The work of this clerk is to be found in the individual ledger.
The Individual Ledger contains all the accounts with depositors. It is
a book of original entry for the various cash transactions which affect
these accounts, the entries being made directly from the deposit tickets,
checks, charge and credit tickets, etc.
The names of the depositors should be written in alphabetical order.
Many large banks have a line of depositors that they can count upon
as regular and permanent, and in such cases have the names of these
depositors printed in the individual ledger when the book is made, a few
blank lines being left after each letter for any additional accounts which
it may be found necessary to open from time to time.
At the close of each day's business the columns of this book are
footed and proved. The totals of the Deposits and the Total Checks
columns are transferred daily to the debit and credit sides of the general
BANKING
47
cash book, crediting and debiting Deposits. The total of the Balance
column shows the total amount on hand to the credit of depositors and
should at all times agree with the balance of the account with deposits
in the general balance ledger. (See page 96.)
Individual Ledger
BALANCE
MONDAY, FEB. 15. 19_
TUESDAY, FEB. 16. 19—
NAME
CHECKS IN
TOTAL
DEPOSITS
BALANCE
CHECKS in!
TOTAL
DEPOSITS
BALANCE
DETAIL
CHECKS
DETAIL 1
CHECKS
42
16
19
20
600
Andrews, E. B.
11258
20
110
100
500
38
171
74
150
11236
46
1400
16
249
40
80
2000
9236
46
Bennett, D. W.
12301
85
4C0
ICOC
1200
12501
85
750
278
20
10
1010
40
2016
40
13501
85
Comer, Geo. A.
6619
99
2400
9019
99
721
4000
90
1000
1750
9769
99
Ernst Mfg. Co.
18044
54
4500
10
238
07
76
49
4500
07
175
D1900
90
13720
37
258
42
12,5
80
11
60
4258
80
2129
40
11590
97
Freeman & Co.
4812
CO
628
70
877
95
500
6334
C5
720
90
225
887
71
2887
71
8334
65
Goodwin & Co.
121'J
CO
1219
00
75
90
124
40
39C
829
60
Jennings, C. W.
9216
40
750
lOD
750
C500
84CC
40
1125
60
1340
2340
CI 000
50
58
9466
90
Moore, Geo. II.
7216
25
9i;o
50
1000
2500
9216
25
42
321
60
80
D1200
92
11417
75
Rowell & T-ane
621
50
150
932
10
200
175
D1119
40
59G
50
250
292
500
60
10
615
18
50
Smith & Seanians
7360
90
1250
2212
10
1460
7728
20
400
1192
10
C192
10
6728
20
Wilson, D. O.
6510
50
140C
7910
50
7910
50
Certificates of Deposit
750
300
500
175C
250C
500
500
2000
Certified Checks
240C
700
1500
lOOC
190C
250
25C
1650
Cashier's Acct.
—
—
V
—
15C0
1500
—
—
—
1500
v/
V
V
Total Balances
.S8332
33
12211
m
12211
86
17730
JO
93850
II
13450
01^
13450
01^
13517
-51
93936
87
Total Overdrafts
18
50
Net Balances
93918
37
The accounts in the individual ledger for the last business day show
the following balances.
Decker Bros., 112,486.18 ; Mace, Gilmore & Co., $19,874.15 ; Spencer,
Mead & Co., $28,652.90; D. B. Roberts, 1752.91; E. L. Howard,
111,216.94; Fernald, Son & Co., $21,724.92; Thomas Bennett &
Co., $12,172.41; W. I. Pratt, $7296.84; D. E. Avery, $15,162.40;
48 BOOKKEEPING
J. H. Crandall, 174,652.40 ; C. E. Denison, $16,240.90 ; Freeman, Austin
& Co., 811,200.50; C. E. Selover & Co., 819,200 ; Lane, Rowell & Co.,
$37,500.06 ; F. E. Sherman, $12,172.45 ; Wyckoff, Seamans & Benedict,
$77,314.31; E.V. Buckley & Son, $24,214.93; J. O. Baker, $51,342.40 ;
Powers & Sprague, $15,294.63; Janis, Cooper & Tremper, $37,582.69 ;
Charles J. Kennedy, $45,272.75 ; Fields Milling Co., $14,352.90 ; Certi-
fied Checks, $17,500; Certificates of Deposit, $5000; Cashier's Checks,
$2000 ; Total, $590,180.57.
Open the above accounts in the individual ledger in alphabetical
order, one account to a line, after which present your ledger to your
instructor for approval.
The Individual Bookkeeper's Duties may be briefly referred to as follows;
1. He takes charge of the bank's accounts with depositors.
2. He meets depositors and answers questions with reference to
their accounts.
3. He writes up the depositors' pass books.
In large city banks there are frequently many thousand accounts with
depositors, and the individual ledger is necessarily subdivided, a section
of accounts being given to each of the several individual bookkeepers
employed.
Note. — The student should remember that the assignment of work to the
various clerks of a bank would necessarily differ with different banking institutions.
In the smaller banks one clerk would fill offices that in larger banks would be
assigned to several clerks, while in the largest banks of the country the work of
many of the departments would be subdivided among different clerks.
Transactions for the Individual Bookkeeper, March 1
The individual ledger being a book of original entry, the bookkeeper
in charge of this department usually makes the entries directly from the
deposit slips, checks, charge and credit tickets, etc., passed on to him by
the receiving teller, paying teller, note teller, and correspondence clerk.
The deposits from customers for to-day may be found in the Amount
Credited column of the receiving teller's daily check sheet. Enter these
deposits in the Deposits column of the individual ledger. Place a check
mark by the side of the customer's account on the receiving teller's sheet.
The note teller has turned over credit tickets for the proceeds of
the following paper collected for customers to-day : Nos. 650, 702, 744,
and 755.
Enter the proceeds of these collections in the Deposits column of the
individual ledger. The amounts are shown by the records in the
BANKING
49
collection tickler. Be sure to deduct all collection charges. Check the
items transferred.
Straight deposits require no explanation in the individual ledger, but
discounts and collections are generally designated by writing D and C
respectively before the amounts. (See model individual ledger, page 47.)
Qommerciul ^^atlonal KJjartk
en^dlt ^Boston, ^Mass,, ^dy. 26, 79—
NUMBER OF
COLLECTION
ACCOUNT TO BE CREDITED
1
1 PROCEEDS
720
6(f0
7fO
^62
7/2
8^/
60
^0
20
jahw /if. CLvynyUZ&acL,
Credit tickets have also been received from the note teller for paper
discounted for customers to-day.
Enter the proceeds of these notes in the Deposits column of the indi-
vidual ledger. Refer to the discount register for the amounts. Check
the items transferred.
The total of the checks certified for to-day, as reported by the paying
teller, is 12300. Enter the amount in the Deposits column, opposite
Certified Checks. Check the amount in the certified check book.
Checks of depositors have been received by the paying teller and
turned over to the individual bookkeeper, as shown in the Our Bank
column of the paying teller's daily check sheet. Enter these items in
the Checks in Detail column of the individual ledger opposite the names
of the drawers. Check the items transferred.
Charge tickets have been received from the paying teller on account
of certified checks. Refer to the certified check book for the amounts
of these tickets. Enter the amounts in the individual ledger the same
as regular checks. Check the items transferred.
Checks of depositors have been received by the receiving teller, entered
on his check sheets, and turned over to the individual bookkeeper. A
ist of these checks, with the names of the drawers, is as follows ;
50 BOOKKEEPING
Mace, Gilmore & Co., $720.50, $1500; Decker Bros., 81250.20;
Spencer, Mead & Co., $340.20; Fernald, Son & Co., $72.60; W. I.
Pratt, $650.60; F. E. Sherman, $1625; C. E. Denison, $1750; Thomas
Bennett & Co., $200, $1242.10; E. L. Howard, $40.50; Charles J.
Kennedy, $200, $262.90.
Enter the above items in the Checks in Detail column.
The note teller has turned over a charge ticket for discount No. 889.
Refer to the discount tickler for the amount. Check the item transferred.
The following depositors' checks have come in from the clearing house.
D. E. Avery, $625, $127.52; J. O. Baker, $1275; Thomas Bennett
& Co., $2500 ; E. V. Buckley & Son, $115.40 ; J. H. Crandall, $462.50;
Decker Bros., $1200, $750.42, $500; Freeman, Austin & Co., $1750;
E. L. Howard, $75.40; Charles J. Kennedy, $400.60; Mace, Gilmore
& Co., $120, $40.50; D. B. Roberts, $22.40; WyckofP, Seamans &
Benedict, $167.50, $125; F. E. Sherman, $750, $211.40, $600.
Enter the above in the Checks in Detail column.
The correspondence clerk has turned over the depositors' checks
received from out-of-town banks. Enter them in the Checks in Detail
column.
Spencer, Mead & Co., $650; Fields Milling Co., $850; Janis,
Cooper & Tremper, $560; Lane, Rowell & Co., $721.42; Powers &
Sprague, $1000.
Extend the sum of the checks drawn by each depositor into the
Total Checks column of the individual ledger. Foot the Checks in Detail,
Total Checks, and Deposits columns. The sum of the Total Checks
column should agree with the sum of the Checks in Detail column.
Determine the new balance to the credit of each depositor by adding the
deposits and subtracting the total checks for the day. Enter the new
balance in the Balance column for March 1. Foot the Balance column.
Prove the correctness of the individual ledger as follows :
Add the total deposits for to-day to the total balances for yesterday.
From this sum subtract the total checks for to-day. If no error has
been made, the difference so found should be the same as the total
balances for March 1.
Present your individual ledger to your instructor for approval.
WORK OF THE GENERAL BOOKKEEPER
The records of the general bookkeeper are principally found in the
general balance ledger and general cash book.
BANKING
51
The General Balance Ledger contains a summary of the entire operations
of the bank, systematically collated from the various departments. It
is provided with three columns for each business day in the week.
The first column contains the balances of the various accounts. The
debit balances are written in black ink, and the credit balances in red
ink. It is a regular double entry ledger; therefore the total of the red
ink balances should at all times equal the total of the black ink balances.
The next two columns are for daily debit and credit additions to the
accounts in this ledger. Among the advantages of this form of ledger
over the old form of mercantile ledgers are :
1. It furnishes more convenient data for preparing the daily
statement of the bank.
2. It requires less clerical work.
3. It serves the purpose of a trial balance.
General Balance Ledger
Monday, Feb. 5, 19
BALANCE
DEBITS
CREDITS
BALANCE
Cash
281600
28
70605
90
58665
90
299690
28
Out-of-Town Banks
121200
72
75240
10
81240
16
115200
72
Bills Discounted
129640
CO
32500
32129
84
130010
46
Redemption Fund
4500
4500
Furniture and Fixtures
6000
6000
Premium on U. S. Bonds
2000
2000
Real Estate
7500
7500
Expense
240
50
04
290
04
U.S. Bonds
100000
100000
Capital Stock
200000
200000
Circulation
100000
100000
Collection and Exchange
2002
34
120
10
3022
44
Deposits
220008
57
72840
10
84840
10
242008
57
Surplus Fund
100000
100000
Undivided Frofits
12500
75
12500
75
Discount
7350
G4
300
10
7659
74
052771
30
665191
50
652771
30
257296
20
257296
20
665191
50
The General Cash Book contains a record of all amounts affecting the
general balance ledger of the bank. Any account that does not appro-
priately belong to the special books already referred to is recorded
directly in this book. It is not essentially different from the cash book
used by mercantile houses. The left side is provided with four
52
BOOKKEEPING
General
Monday,
F
ACCOUNT AND EXPLANATION
COLLEC-
TION AND
EXCHANGE
OUT-OF-
TOWN
BANKS
GENERAL
TOTALS
Balance On hand
162W0
50
3
Bills Discounted D. T.
12000
v/
Alliance Nat'l Bank, Springfield
2400
50
^
Bank of Commerce, Baltimore, ISOO.w, 729.«»
2529
40
\/
Farmers Bank, Albany, 200.oo, 821.oo
1021
>/
Fourth Nat'l Bank, Chicago
12000
\/
Coll. and Exch. Disc. R.
72
40
3
Interest and Discount Disc. R.
270
50
s/
Coll. and Exch. 11. Teller
14
50
V
Coll. and Exch. T. Teller, S.'-o, 11 .»
14
70
y/
Coll. and Exch. C. T., l.», 2.oo, i.:o
4
75
3
3
3
Deposits I. L.
Coll. and Exch. Total for day
Out-of-Town Banks Total for day
Is
90
178240
lOG
17950
95
35
90
208CC8
lOG
17950
70
371509
20
n
11
1
columns, one for collection and exchange, one for receipts from banks,
one for sundry receipts, and one for totals. The right side is pro-
vided with three columns, one for cash remittances to banks, one for
sundry payments, and one for totals.
The difference between the sides of this book should at all times
show the balance of cash on hand.
The General Bookkeeper in a largo bank occupies a position of special
responsibility. He is the chief accountant of the bank, all the work in
each of the several departments coming under his general supervision.
Upon him devolves the work of classifying the general results of the
bank and the rendering of statements required by the board of directors
and by the regulations of the bank.
He usually has personal charge of the general cash book and the
general balance ledger.
Transactions for the General Bookkeeper, March 1
The general balance ledger exhibited the following balances at the
close of Saturday, Feb. 27,
BANKING
53
Cash Book
Feb. 15, 19.
F
ACCOUNT AND EXPLANATION
1 OUT-OF-
1 TOWN
BANKS
GENERAL
TOTALS
3
V
Bills Discounted
Alliance Nat'l Bank, Springfield
Chemical Nat'l Bank, N.Y., 7240 .«>, 2500.oo
Farmers -Bank, Albany
Chase Nat'l Bank, Providence, 120.«>, 4(X).<»
Ninth Nat'l Bank, Hartford
Traders Nat'l Bank, Buffalo, 2500.oo, 320.*"
Disc. n.
1
1
7500
9740
7240
520
162
2820
50
11
50
40
40
125C0
3
3
Deposits
Out-of-Town Banks
r Paying Teller's Currency
I. L.
Total for day
166901.^^
152240
27983
95
91
192724
27983
91
8C
Balance < Clearing-House Checks on hand
112407^
178784
34
[^ Cash Items {City and Foreign) on
hand 642.^
-^-^^
=
371509
20
Credit Balances
V
Capital Stock
$400000.
V
Circulation
200000.
V
Collection and Exchange
21275.10
V
Deposits
590180.57
Interest and Discount
16240.10
Surplus Fund
100000.
Undivided Profits
Loss and Gain
Protest Fees
Debit Balances
6728.14
V
Cash
$238995.66
Bills Discounted
496722.60
Protested Paper
V
Out-of-Town Banks
273795.30
Due from U.S. Treasurer
2000.
V
U.S. Bonds to secure Circulation
200000.
Salaries
4750.
Stocks and Bonds
62500.
\
Real Estate
27500.
Redemption Fund with the U.S. Treasurer
10000.
Furniture and Fixtures
12625.50
Premium on U.S. Bonds
4000.
Expense
214.96
Taxes
320.
54 BOOKKEEPING
Enter the above balances in the general balance ledger. Write the
credit balances in red ink and the debit balances in black ink. When the accounts
are properly opened ascertain if the footings of the debits and credits
are equal. Present your work to your instructor for approval.
Write the balance of cash on hand, $238,995.66, in the general cash
book. (See model, pages 52 and 53.)
In practice the general bookkeeper would have before him charge and
credit tickets, letters, etc., from which to make entries in the general
cash book. These entries are generally made when the day's trans-
actions have been completed. Then all the tickets can be assorted so
that they may be recorded conveniently.
The debits and credits for the general cash book March 1 are as
follows :
1. From the discount register debit Bills Discounted for the total
of the Amount of Paper column, and credit Collection and Exchange for
the total of the Collection and Exchange column, and Interest and Dis-
count for the total of the Interest and Discount column. Properly check
these totals in the discount register.
2. From the discount tickler credit Bills Discounted for the total of the
Amount to he Collected column. Properly check the item transferred.
3. From the remittance register credit the several banks for the
amounts in the Credits column, and debit them for the amounts in the
Charges column. Properly check the items transferred.
If there is more than one item in the debit or the credit column, short
extend the amounts in the general cash book.
4. From the individual ledger credit Deposits for the total of the
Deposits column, and debit Deposits for the total of the Total Checks
column. Properly check.
5. From the collection tickler credit Collection and Exchange for
our collection charges on Nos. 650 and 702.
6. Fro::i the receiving teller's daily check sheet credit Collection
and Exchange for the total of the Collection and Exchange column.
Properly check.
7. From the paying teller's daily check sheet debit Expense for the
total of the Expense column, and credit Collection and Exchange for
the totals of the Sundry Collection and Exchange and Exchange columns.
Properly check.
Prove the cash. The amount of bills and coin on hand is
1258,884.32. Clearing-house items on hand amount to $26,205.
Cash items (city and foreign) on hand amount to $11,623.
(
BANKING 55.
Rule and foot the general cash book. Proceed carefully and make
absolutely no errors. Study the model given on pages 52 and 53.
Before bringing down your balance for Tuesday, March 2, present your
general cash book to your instructor for approval and suggestions.
Post the general cash book to the general balance ledger. Post only
the totals of the Collection and Exchange and Out-of-Town Banks
columns. Debit Cash in the general balance ledger for the total
receipts, and credit it for the total payments for the day.
Foot the D'ehit and Credit columns of the general balance ledger. If
correct, they should agree. Determine the new balances in the general
balance ledger. Foot these new balances. If correct, the red and
black ink totals should agree.
Compare your balance ledger with the model given on page 51, and
see if anything remains to be done. If not, present all your books to
your instructor for criticism.
Transactions for the Discount Clerk, March 2
The following paper has been offered and accepted for discount.
Make proper records for it in the discount register. Deduct the dis-
count for the time notes have to run.
No. 925. Note of Boyd Bros., at 60 days from Jan. 31, discounted
for F. E. Sherman, payable at Manufacturers and Traders Bank, Phila-
delphia, for .'117,250. Collection and exchange, $17.50. Proceeds
credited.
No. 926. Note of Peterson Bros. & Co., at three months from
Jan. 1, discounted for D. B. Roberts, payable at Fourth National
Bank, Chicago, for $11,390. Collection and exchange, 111.50. Pro-
ceeds credited.
No. 927. Note of C. P. Jameson, at 15 days from March 1, indorsed
by Janis, Cooper & Tremper, discounted for D. E. Avery, payable at
our bank, for $9275.80. Proceeds credited.
No. 928. Note of A. P. Littlo & Co., at 30 days from Feb. 23,
indorsed by Merrill & Co., discounted for Fields Milling Co., payable
at First National Bank, Worcester, for $6290. Collection and exchange,
$6.30. Proceeds credited.
No. 929. Note of W. I. Pratt, at 30 days from March 2, payable at
Merchants Bank, Torrington, Conn., indorsed by Wells, Osborn & Co.,
discounted for Charles J. Kennedy, for $12,795. Collection and
exchange, $12.75. Proceeds credited.
56 BOOKKEEPING
No. 930. Note of Powers and Sprague, at 30 days from Feb. 24,
discounted for Thomas Bennett & Co., payable at our bank, for 13275.
Proceeds credited.
No. 931. Note of W. V. Brown, at 30 days from Feb. 27, discounted
for Spencer, Mead & Co., payable at our bank, for $1500. Proceeds
credited.
Rule and foot the discount register. Prove the footings as explained
at the close of discount clerk's work March 1.
Post the entries from the discount register to the discount tickler.
Follow instructions to the discount clerk March 1. Be sure to properly
check all items transferred.
Transactions for the Collection Clerk, March 2
The following is a list of paper received for collection to-day. Enter
it in the collection register.
No. 806. Note signed by D. Appleton & Co., dated Feb. 8, at 30
days, indorsed by C. W. Ellis, payable at our bank, for $7200. To be
collected for Ninth National Bank, Hartford.
No. 807. Note signed by Scott & Lucas, payable two months from
Jan. 4, at Park Square National Bank, City, for $5162.50. To be col-
lected for Fourth National Bank, Chicago.
No. 808. Note signed by Fanning & Cook, payable in 60 days from
Jan. 4, at Union Trust Co., City, for $2750. To be collected for Bank
of Commerce, Baltimore.
No. 809. Draft dated Jan. 8, at 60 days from date, on Trenholm Bros.,
payable at Briggs Bank, Westfield, for $2152.90. To be collected for
Farmers Bank, Albany.
No. 810. Draft dated Jan. 8, at 60 days from date, on W. S. Stanton,
Springfield, for $1500. To be collected for Fourth National Bank,
Chicago.
No. 811. Sight draft dated March 2, on Taylor Bros., City, in favor of
Powers & Sprague, payable at our bank, for $1950. To be collected
for Powers & Sprague.
No. 812. Sight draft dated March 2, on William Sloan & Son, Pough-
keepsie, in favor of Lane, Rowell & Co., for $2750. To be collected for
Lane, Rowell & Co.
No. 813. Sight draft dated March 3, drawn on E. C. Baldwin, Spring-
field, in favor of E. L. Howard, for $1357.60. To be coUected for
E. L. Howard.
BANKING 57
No. 814. Note of David Wells, at 30 days from Feb. 16, with
interest at 6%, payable at our bank, for $750. To be collected for
J. H. Crandall.
Compute the interest on the $750 for 30 days. Add this interest to
the face of the note and write the total in the Amount column of the
collection register. This should be done with all interest-bearing paper.
No. 815. Note of L. F. Chappell, payable at Fourth National Bank,
Chicago, at three months from Jan. 1, for 11250. To be collected for
Thomas Bennett & Co.
No. 816. Note of W. B. Burdick, at two months from Jan. 27, with
interest, payable at Merchants Bank, St. Louis, Mo., for $2790. To
be collected for Thomas Bennett & Co.
No. 817. Sight draft dated March 2, on Bradley & Co., Buffalo, N.Y.,
[for 1290.50. To be collected for Thomas Bennett & Co.
No. 818. Sight draft dated March 1, on Winslow & Co., Rochester,
[N.Y., for $375.62. To be collected for Decker Bros.
Post the collection register to the collection tickler. (See instructions
to collection clerk, March 1.)
Transactions for the Receiving Teller, March 2
The following are the regular deposits for to-day. Enter them on
the receiving teller's daily check sheet.
Wyckofe, Seamans & Benedict, V $1600, V $562, B $2500, B $750,
B $12,200.
Spencer, Mead & Co., V $1740, V $190, #61 $400, #4 $800, #16
$1290.
D. E. Avery, B $14,270, B $640.70, X $1162.95, X $1436.52,
X $1349.20; less collection, $4.15.
J. O. Baker, V $11,400, V$45, B $1600, B $9250, B $5450, x $1400;
[less collection, $1.40.
Thomas Bennett & Co., V $240, V $60, #7 $1950, #9 $2325, #15
^600, O $400.
J. H. Crandall, X $2400, X $1500; less collection, $4.
Decker Bros., V $3700, B $5210, O $900, x $4500, less collec-
^tion, $4.50.
Freeman, Austin & Co., # 21 $2145, # 27 $1360.
E. L. Howard, V $2400, B $3262.90, B $3040.50, B $6200.
Janis, Cooper & Tremper, V $1500, B $1100, B $2400, # 3 $1140.60,
[#27 $11,000.
58 l^OOKKEEPING
Charles J. Kennedy, #17 f2410, v/ $4000, x '^1621.40; less collec-
tion, li'l.GS.
Mace, Gilmore & Co., O '$1100, B f6270, x 11125.60, #25 -$1460,
#31 $1652; less collection, $1.25.
Foot the columns of the receiving teller's daily check sheet. Make
out Recapitulation and Proof blank. Balance on hand: coin, $712;
bills, $18,000. You have given to the paying teller during the day
$8725. The debit and credit sides of y^ur proof should always balance
if the work is correct.
Transactions for the Paying Teller, March 2
The following are lists of checks paid by the paying teller to-day.
Enter them on the paying teller's daily check sheet.
1. Checks on our bank:
Wyckoff, Seamans & Benedict (New York draft), $14,260 ; Spencer,
Mead & Co. (New York draft), $4500 ; F. E. Sherman (New York draft),
$3762.50; D. B. Roberts (New York draft), $1000; Powers & Sprague,
$7265; W. I. Pratt, $1217.50 ; Mace, Gilmore & Co., $8290 ; Charles
J. Kennedy, $400; E. L. Howard, $350; Freeman, Austin & Co.,
$2790; Fields Milling Co. (New York draft), $1400.
2. Checks on clearing-house banks :
Bunker Hill National Bank, $1940 ; Suffolk National Bank, $1875
Colonial National Bank, $2750.06; Shoe & Leather Bank, $2500
Third National Bank, $400; Metropolitan National Bank, $1700
Park Square National Bank, $3400.60 ; Citizens National Bank,
$6250.50; Eliot National Bank, $4000; New England National
Bank, $3257.
3. Checks on out-of-town banks :
Traders National Bank, Buffalo, $17,500, $750, and $1600; collec-
tion, $19.85. Bank of Commerce, Baltimore, $400, $1450, and $1725;
collection, $3.60. Manufacturers and Traders Bank, Philadelphia,
$8500; collection, $8. Fourth National Bank, Chicago, $4685; col-
lection, $4.75. Chase National Bank, Providence, $4500.50 ; collec-
tion, $4.50. Ninth National Bank, Hartford, $3250; collection, $3.25.
Chemical National Bank, New York, $1100, $2500, $1650, $9250;
collection, $14.50. Eliot National Bank, Springfield, $4792.50 ; collec-
tion, $4.60.
4. Checks on banks in our city not members of the clearing house :
Powers Bank, $172.50; Union Trust Co., $150.
BANKING 59
Sold the following drafts on Chemical National Bank, New York.
1. Sold for check :
Wyckoff, Seamans & Benedict, $14,260; exchange, 114.25. Spencer,
Mead & Co., $4500 ; exchange, |4.50. D. B. Roberts, $1000 ; exchange,
II. Fields Milling Co., $1400; exchange, $1.40. F. E. Sherman,
$3762.50; exchange, $3.75.
Note. — The exchange items on the above drafts were, in this instance, paid in
cash. The record on the paying teller's sheet will be identically the same as where
these items are covered by check. By referring to the checks covering these drafts
on the left side of the sheet it will be seen that the amounts entered are for the face
of the drafts only.
2. Sold for cash:
A. L. Hopkins, $2000; exchange, $1. T. Y. Smith, $1500;
exchange, 75^.
Certified the following checks. Enter them in the certified check book.
Lane, Rowell & Co., $11,250 ; Charles J. Kennedy, $7295 ; Decker
Bros., $1254; J. O. Baker, $9265.
Pay cashier's charge tickets for the following items :
Postage, $12.50 ; stationery, etc., $25.90 ; blank books, $142.60.
The items for the Sundry Receipts column are as follows :
Bills and coin from yesterday's proof, $237,804.92 ; bills and coin
received from the receiving teller at the close of yesterday's business,
$11,747.25; bills and coin received from the receiving teller during the
day, $8725; bills and coin received from the note teller at the close of
yesterday's business, $9332.15; received from the clearing house for
to-day's exchanges, $28,349.17.
Add the columns of the paying teller's daily check sheet. Make out
Recapitulation and Proof blank. A careful count of the cash now on
hand under various heads (subdivisions of bills and coin only) shows
an amount of $187,006.03. Foot the certified check book.
Transactions for the Note Teller, March 2
Make the proper records in the discount tickler for the paper disposed
of to-day. In the Remarks column write :
For No. 902, Charged Alliance National Bank.
For No. 869, Charged Alliance National Bank.
For No. 868, Paid, S/2.
For No. 895, Charged Farmers Bank.
For No. 867, Paid, 3/2.
60 BOOKKEEPING
Rule and foot the discount tickler.
Advices have been received that the following collections have been
paid. Make records in the collection tickler for these collections. In
the Remarks column write :
For No. 723, Charged to Chemical National Bank. Bank's col-
lection, $1; our collection, ^1.10.
For No. 726, Charged to Chase National Bank. Bank's collection,
$If; our collection^ $5,
For No. 742, Charged to Chase National Bank. Bank's collection,
$5; our collection, $5.20.
For No. 743, Charged to Bank of Commerce, Baltimore. Bank's
collection, $1; our collection, $1.25.
Collections Nos. 756, 800, and 811 have been paid. In the Remarks
column of the collection tickler write :
For No. 756, Paid,
For No. 800, Paid,
For No. 811, Paid,
Transactions for the Correspondence Clerk, March 2
This morning's mail contained the following remittances from the
banks named, for credit. Enter in the remittance register.
Traders National Bank, Buffalo $9273.40
Bank of Commerce, Baltimore 4213.93
Manufacturers and Traders Bank, Philadelphia 5272.50
Fourth National Bank, Chicago 6395.40
Ninth National Bank, Hartford 5427.30
Chase National Bank, Providence 8216.50
Farmers Bank, Albany 5324.80
Alliance National Bank, Springfield 4152.70
The following are the drafts drawn on Chemical National Bank, New
York, as per stubs in the draft book.
No. 484, 114,260 ; No. 435, $4500 ; No. 436, $3762.50 ; No. 437,
$1500; No. 438, $1000; No. 439, $2000; No. 440, $1400. Enter
these drafts in the draft register. Credit Chemical National Bank in
the remittance register for the total.
We have this day made the following remittances to out-of-town banks
for collection. In the To Whom Sent column of the collection tickler
write the name of the bank to which the paper is sent. No other record
BANKING
61
is needed at this time. Nos. 804, 805, 809, 810, 813, sent to Alliance
National Bank, Springfield; No. 812 sent to Farmers Bank, Albany;
Nos. 815 and 816 sent to Fourth National Bank, Chicago; Nos. 817
and 818 sent to Traders National Bank, Buffalo.
Form of Letter to accompany Paper remitted for Collection and Credit
C. H. THURBER, PRESIDENT J. W. MACE, VICE PRESIDENT
CHAS. W. HAMILTON, CASHIER
MERCHANTS NATIONAL BANK
Boston, Mass., SeA. d, I9_
€. W-. S>&aA(>d^, Esq., Cashier
cAeAA^ yanJc (^IXa^
Dear Sir, — I inclose for collection and credit the itcnis stated below.
NO.
PAYER
AMOUNT
720
6(^0
7ff
fcyulom., 7J'HvQ.k V ^.
72^0
^72
f26f
16
Please advise us of the payment of the items inclosed. Paper not paid at
maturity should be returned to us at once.
Very respectfully yours
^kcM^. Zi^. /"foAmltcyyi, Cashier
We have this day made the following remittances to out-of-town banks
for credit. Enter them in the remittance register.
To Chemical National Bank, New York.
Check of C. W. Ellis, dated Feb. 26, on Ninth National Bank, Brook-
lyn, indorsed by E. L. Brown, for fllOO; check of Daniel L. Coon,
dated Feb. 25, on Union Bank, Peekskill, indorsed by C. W. Gray, for
62 BOOKKEEPING
$2500; check of D. A. McMillan, dated Feb. 24, on Union Bank,
Peekskill, indorsed by Bailey & Bailey, for $1650 ; check of Arthur
R. Briggs & Co., dated Feb. 24, on Second National Bank, Brooklyn,
indorsed by Novelty Mfg. Co., for $9250 ; check of Brown Bros., dated
Feb. 23, on Second National Bank, Brooklyn, indorsed by D, E. Avery,
for $1162.95 ; check of Wilson & Co., dated Feb. 25, on Second National
Bank, Brooklyn, indorsed by D. E. Avery, for $1436.52.
To Farmers Bank, Albany.
Check of Hillis Mfg. Co., dated Feb. 25, on Farmers Bank, indorsed
by Temple & Co., for $1500 ; check of R. E. Porter, dated Feb. 24, on
Commercial Bank, Troy, indorsed by D. E. Avery, for $1349.20; check
of Garson & Myers, dated Feb. 25, on Merchants Bank, Utica, indorsed
by J. O. Baker, for $1400.
To Chase National Bank, Providence.
Check of Warren & Sprague, dated Feb. 24, on Second National
Bank, Providence, indorsed by J. H. Crandall, for $1500 ; check of J. M.
Evans, dated Feb. 23, on Union Bank, Providence, indorsed by J. H.
Crandall, for $2400 ; check of Whitman & Smith, dated Feb. 24, on Chase
National Bank, Providence, indorsed by Brown Bros., for $4500.50.
To Ninth National Bank, Hartford.
Check of E. L. Conway & Co., dated Feb. 23, on City Bank, Hart-
ford, indorsed by Decker Bros., for $4500 ; check of Wheeler Mfg. Co.,
dated Feb. 23, on Fourth National Bank, Hartford, indorsed by Dorman
& Co., for $3250; check of Freeman & Co., dated Feb. 24, on Ninth
National Bank, indorsed by Briggs, Slote & Co., for $3250.
To Alliance National Bank, Springfield.
Check of Wheeler & Wilson, dated Feb. 25, on Eliot National Bank,
Springfield, indorsed by Fulton Boiler Works, for $4792.50 ; check of
Salisbury & Gray, dated Feb. 24, on National City Bank, Northampton,
indorsed by Charles J. Kennedy, for $1621.40 ; check of E. L. Howard,
dated Feb. 23, on Bay State Bank, Worcester, indorsed by Traders
National Bank, Buffalo, for $1324.40 ; check of Simpson & Frey, dated
Feb. 23, on Bay State Bank, Worcester, indorsed by Traders National
Bank, Buffalo, for $1142.60.
To Fourth National Bank, Chicago.
Check of Jones Dairy Co., dated Feb. 24, on Fourth National Bank,
indoi-sed by D. W. Manning & Son, for $4685 ; check of Raymond &
BANKraG 63
Son, dated Feb. 24, on First National Bank, St. Louis, indorsed by
Alliance National Bank, Springfield, for $1427.52 ; check of Armour &
Co., dated Feb. 23, on Commercial Bank, Cincinnati, indorsed by Chase
National Bank, Providence, for 13142.50.
To Traders National Bank, Buffalo.
Check of R. H. White & Co., dated Feb. 25, on Traders National
Bank, indorsed by Mason & Hamlin, for $1600; check of E. W. Bloser,
dated Feb. '24, on Traders National Bank, indorsed by A. J. Graham,
for $750 ; check of Cushman Bros., dated Feb. 23, on Traders National
Bank, for $17,500 ; check of A. L. Gilbert, dated Feb. 23, on Com-
mercial B.ank, Rochester, N.Y., indorsed by Alliance National Bank,
Springfield, for $372.70.
To Bank of Commerce, Baltimore.
Check of J. W. Walker, dated Feb. 24, on Bank of Commerce,
indorsed by Mason & Hamlin, for $400 ; check of J. E. Seaver, dated
Feb. 23, on Bank of Commerce, indorsed by Mason & Hamlin, for
$1450; check of H. G. Healey, dated Feb. 24, on Bank of Commerce,
indorsed by D. E. Avery, for $1725; check of J. A. Kinsley, dated
Feb. 23, on Union Bank, Washington, indorsed by Chase National Bank,
Providence, for $4126.30 ; check of D. Appleton & Co., dated Feb. 23,
on Central National Bank, Paterson; N. J., indorsed by Fourth National
Bank, Chicago, for $3162.50; check of Charles H. Dean, dated Feb. 25,
on Bank of Commerce, indorsed by W. I. Pratt, for $1300.
To Manufacturers and Traders Bank, Philadelphia.
Draft of Union Bank, Schenectady, dated Feb. 23, on First National
Bank, Philadelphia, indorsed by J. H. Crandall, for $700.50 ; draft of
Commercial Bank, Albany, dated Feb. 21, on Manufacturers and
Traders Bank, indorsed by Taylor Bros., for $8500.
Letters requesting Immediate Returns. — When paper is sent for
collection to out-of-town banks that are not our regular agents or corre-
spondents, it is usually accompanied by letters asking for immediate
returns. The model on page 64 is suggestive of the form of letter used.
The note teller has advised you, by means of charge tickets, of the
following debits to out-of-town banks. Enter these items in the remit-
tance register.
Alliance National Bank, Springfield, for discount No. 902, $18,500 ;
Alliance National Bank, Springfield, for discount No. 869, $32,400;
L
64
BOOKKEEPING
Farmers Bank, Albany, for discount No. 895, $28,890 ; Chemical
National Bank, New York, for the proceeds of collection No. 723,
$1004.25 ; Chase National Bank, Providence, for the proceeds of
collection No. 726, $4896; Chase National Bank, Providence, for the
proceeds of collection No. 742, $5195 ; Bank of Commerce, Baltimore,
for the proceeds of collection No. 743, $1249.
Letter requesting Immediate Returns
W. J. MILLER, President J. H. MERRILL, Vice President
D. M. GOSNELL, Cashier
The Commercial National Bank •
Boston, Mass., S'eA. 7, 19
Mr. W-. d. f-fvYiAyvouyv, Cashicr
Dear Sir, — I inclose for COLLECTION and RETURNS the
paper listed below.
NUMBER
PAYER
AMOUNT
6^2
la. /if, ^iemmAf V ^.
Roo^eA>-dt V ^cyyi
7/S
70
60
Unless otherwise instructed, properly protest and return to us at once
all paper not paid in due course.
Yours very truly
3. m. ^omveR, Cashier
The note teller has also advised you that collection No. 756
has been paid and credited to Farmers Bank, Albany, at its face,
$79.23.
Extend the balances on the remittance register as explained March 1.
Present your remittance register to your instructor for approval.
BANKING 65
Transactions for the Individual Bookkeeper, March 2
Enter the deposits from customers in the individual ledger. The
amounts are found on the receiving teller's daily check sheet.
The note teller has turned over credit tickets for the proceeds of the
following collection paper collected for depositors to-day: Nos. 723,
726, 742, 743, 800, and 811. Enter the proceeds of these collections
in the Deposits column of the individual ledger as explained March 1.
Credit tickets have also been received from the note teller for paper
discounted for customers to-day. Enter the proceeds of these notes to
the credit of depositors in the individual ledger.
The total of checks certified to-day as reported by the paying teller
is $29,064. Enter to the credit of Certified Checks as explained
March 1.
Checks of depositors have been received by the paying teller and
turned over to the individual bookkeeper as shown on the paying
teller's daily check sheet. Enter these items in the individual ledger
as explained March 1.
Charge tickets have been received from the paying teller on account
of certified checks. Refer to the certified check book for the amounts
and enter them in the individual ledger.
Checks of depositors have been received by the receiving teller,
entered on his check sheet, and turned over to the individual book-
keeper. A list of these checks with the names of the drawers is given
below. Enter these items in the individual ledger.
Wyckoff, Seamans & Benedict, $6200, $2400 ; Mace, Gilmore &
Co., $1100; F. E. Sherman, $3262.90; C. E. Selover & Co., $3040.50;
J. O. Baker, $6270, $5210; Thomas Bennett & Co., $5450; E. V.
Buckley & Son, $9250; Powers & Sprague, $1600; Lane, Rowell &
Co., $14,270, $640.70- Fernald, Son & Co., $12,200; Spencer, Mead
& Co., $750, $2500.
The following depositors' checks have come in from the clearing house.
D. E. Avery, $1205 ; J. O. Baker, $916 ; Thomas Bennett & Co.,
$500; E. y. Buckley & Son, $702.50 ; J. H. Crandall, $19,500 ; Decker
Bros., $620.50 ; C. E. Denison, $40.90 ; Fields Milling Co., $700 ; Free-
man, Austin & Co., $1200; E. L. Howard, $240; Janis, Cooper &
Tremper, $700, $800 ; Lane, Rowell & Co., $1200, $1500 ; Mace, Gil-
more & Co., $5260; W. I. Pratt, $60; Powers & Sprague, $75.90;
C. E. Selover & Co., $370.50; Spencer, Mead & Co., $2160; Wyckoff,
66 BOOKKEEPING
Seamans & Benedict, f 17,300; F. E. Sherman, 11764; Certificate of
Deposit, $2500 ; Certified Checks, $17,500.
Certified checks are credited when issued and debited when paid.
Debit Certified Checks for the $17,500 above and show the payment in
the certified check book.
The correspondence clerk has turned over the following depositors'
checks received from out-of-town banks.
D. B. Roberts, $1272.50 ; Charles J. Kennedy, $1100.40; Fernald,
Son & Co., $1500.90 ; Spencer, Mead & Co., $1100.50 ; Wyckoff, Sea-
mans & Benedict, $7250.
Extend the balances of the customers' accounts in the individual
ledger. Foot and prove the individual ledger.
Present your individual ledger to your instructor for approval.
Transactions for the General Bookkeeper, March 2
Make the records in the general cash book as outlined March 1.
1. Enter the items from the discount register.
2. Enter the items from the discount tickler.
3. Enter the items from the remittance register.
4. Enter the items from the individual ledger.
5. From the collection tickler credit Collection and Exchange for our
collection charges on collections Nos. 723, 726, 742, and 743.
6. From the receiving teller's daily check sheet credit Collection and
Exchange for the collection items listed there.
7. From the paying teller's daily check sheet debit Expense for the
total expense items, and credit Collection and Exchange for the totals
of the Sundry Collection and Exchange and Exchange columns.
Prove the cash. The amount of bills and coin on hand is $215,819.76.
Clearing-house checks on hand amount to $49,710. Cash items (city
and foreign) on hand amount to $7848.10.
Rule and foot the general cash book. Post the general cash book to
the general balance ledger. Extend the new balances on the general
balance ledger. Prove the general balance ledger.
Present all your books to your instructor for approval.
Transactions for the Discount Clerk, March 3
The following paper has been offered and accepted for discount.
No. 932. Note of Mason & Hamlin, at 30 days from Feb. 24, payable
at our bank, discounted for J. O. Baker, for $2500. Proceeds credited.
BANKING 67
No. 933. Note of Zaner & Bloser, at 60 days from Jan. 25, payable
at our bank, discounted for Fields Milling Co., for $4250. Proceeds
credited.
No. 934. Note of Gilbert Bros., at 30 days from March 1, payable at
Commercial Bank, Rochester, N.Y., indorsed by Cushman Bros., dis-
counted for Freeman, Austin & Co., for $5250. Collection and exchange,
$5.25. Proceeds credited.
No. 935. -Note of D. Appleton & Co., at one month from Feb. 25,
payable at First National Bank, Springfield, indorsed by M. E. Graham,
discounted for E. L. Howard, for $7352. Collection and exchange,
$7.35. Proceeds credited.
No. 936. Note of M. O. White, at two months from Feb. 1, payable
at Traders National Bank, Buffalo, discounted for D. E. Avery, for
$9000. Collection and exchange, $9. Proceeds credited.
No. 937. Note of D. B. Roberts, at three months from Jan. 1, dis-
counted for C. E. Selover & Co., payable at our bank, for $7000.
Collection and exchange, $7. Proceeds credited.
No. 938. Note of C. A. Wesp, at three months from Jan. 1, discounted
for C. E. Denison, payable at Commercial Bank, Rochester, N.Y., for
$8750. Collection and exchange, $8.75. Proceeds credited.
Rule and foot the discount register. Prove the footings. Post the
entries to the discount tickler.
Traksactions for the Collection Clerk, March 3
The following is a list of the paper received for collection to-day.
No. 819. Sight draft dated March 1, on Walker Bros., City, for
$12,265. To be collected for Traders National Bank, Buffalo.
No. 820. Sight draft dated March 1, on Morgan & Allen, City, for
$5723.60. To be collected for Manufacturers and Traders Bank,
Philadelphia.
No. 821. Sight draft dated March 1, on Gilman & Brown, City, for
$7321. To be collected for Ninth National Bank, Hartford.
No. 822. Sight draft dated March 2, on Healey & Kinsley, City,
for $3721.50. To be collected for Chase National Bank, Providence.
No. 823. Sight draft dated March 2, on F. E. Smith, City, for
$2129.74. To be collected for Farmers Bank, Albany.
No. 824. Note signed by Curtis & Bender, dated Feb. 8, at 30 days,
payable at Merchants National Bank, City, for $5625. To be collected
for Alliance National Bank, Springfield,
68 BOOKKEEPING
No. 825. Note signed by Arnold & Co., payable two months from
Jan. 4, at Park Square National Bank, City, for $1365. To be collected
for Spencer, Mead & Co.
No. 826. Note signed by Ray & Co., payable at 60 days from Jan. 4,
at Union Trust Co., City, for $3000. To be collected for J. O. Baker.
No. 827. A draft dated Jan. 8, at 60 days from date, on Joiner & Co.,
payable at Briggs Bank, Westfield, for $175.40. To be collected for
Thomas Bennett & Co.
No. 828. Draft dated Feb. 1, at 30 days from date, on Houghton &
Button, City, for $426.50. To be collected for J. H. Crandall.
No. 829. Sight draft dated March 3, on E. L. Grant, City, in favor
of Freeman, Austin & Co., for $725. To be collected for Freeman,
Austin & Co.
No. 830. Note of Gardner & Son, at 30 days from Feb. 16, payable
at Park Square National Bank, City, with interest, for $2000. To be
collected for Wyckoff, Seamans & Benedict.
No. 831. Note of Frank Miller, at three months from Jan. 1, for
$1724.50, payable at Union Trust Co., City. To be collected for Farmers
Bank, Albany.
No. 832. Note of I. A. Wilcox, at two months from Feb. 2, payable
at Merchants Bank, St. Louis, Mo., with interest, for $3000. To be
collected for Chase National Bank, Providence.
Post the collection register to the collection tickler.
Transactions for the Receiving Teller, March 3
The following are the regular deposits for to-day.
Wyckofe, Seamans & Benedict, V $4900, B $1700, B $1200, B $1400,
X $1100, #61 $750, #4 $300 ; less collection, $1.10.
Certificate of Deposit, V $200, V $400.
Spencer, Mead & Co., #7 $500, #9 $1720.40, #21 $850.60.
F. E. Sherman, V $500, B $1900, B $5273.50.
C. E. Selover & Co., #27 $60, ^ $^300, B $1950, #3 $1430.40.
J. O. Baker, V $1100, B$1340, #11 $1500, #7 $1324.
Thomas Bennett & Co., X $1590.40 ; less collection, $1.60.
Decker Bros., X $2462.50 ; less collection, $2.45.
E. V. Buckley & Son, V $4900, ^/ $60, #12 $2163.40.
D. E. Avery, X $1590.60 ; less collection, $1.60.
J. H. Crandall, B $11,290, B $14,360 ; #7 $9353.60, O $240.50,
O $130.60.
BANKING 69
Freeman, Austin & Co., O ^7320, #9 812,950, #14 $7110.50.
Charles J. Kennedy, V '^5800, X $1724.50 ; less collection, $1.75.
C. E. Denison,V $4900, V $16.50, #1 $1150.60, #7 $1200, #15
$1900, #31 $6200.
Fernald, Son & Co., V $2400, B $500, B $6000.
Fields Milling Co., X $240, x $1200, x $1500 ; collection, $2.95,
paid in cash.
Janis, Cooper & Tremper, X $1500, X $3000 ; collection, $4.50, paid
in cash.
Powers & Sprague, V$1100, V $260, X $5000, x $50.32; collection,
$5, paid in cash.
Lane, Rowell & Co., O $1212.50.
Foot the columns of the receiving teller's daily check sheet. Make
out Recapitulation and Proof blank.
Balance on hand; coin, $848.95; bills, $18,800. You have given
to the paying teller during the day $7200.
Transactions for the Paying Teller, March 3
The following are lists of checks paid by the paying teller to-day.
1. Checks on our bank:
Certificate of Deposit, $1000; E. L. Howard (New York draft),
$562.50 ; Mace, Gilmore & Co. (New York draft), $1100 ; W. I. Pratt
(New York draft), $4150; Spencer, Mead & Co. (New York draft),
$62.50; Freeman, Austin & Co., $6409.50; E. V. Buckley & Son,
$4150.90; D. B. Roberts, $9250; F. E. Sherman, $800; Lane, Howell
& Co., $2150 ; E. L. Howard, $8790.50.
2. Checks on clearing-house banks :
Old Colony National Bank, $1200 ; Park Square National Bank, $1500;
Bunker Hill National Bank, $2100 ; SufPolk National Bank, $1100.50;
Colonial National Bank, $3160; Shoe and Leather Bank, $3750; Third
National Bank, $900 ; Metropolitan National Bank, $2160.50 ; Citizens
National Bank, $1325; Eliot National Bank, $5260; New England
National Bank, $150 ; Mechanics Bank, $52.60.
3. Checks on out-of-town banks :
Traders National Bank, Buffalo, $400 ; collection, 50/. Bank of
Commerce, Baltimore, $160, $200 ; collection, 40/. Manufacturers
and Traders Bank, Philadelphia, $750, $1200; collection, $2. Fourth
National Bank, Chicago, $500, $1500 ; collection, $2. Merchants Bank,
New York City, $1200, $1100 ; collection, $2.25. Farmers Bank, Albany,
70 BOOKKEEPING
$100 ; collection, 15/. Union Bank, Albany, $400, $200 ; collection,
75/. Merchants and Traders Bank, Providence, $1500 ; collection,
$1.50. Peoples Bank, Worcester, $1200; collection, $1.25.
4. Checks on banks in our city not members of the clearing-house
association :
Powers Bank, $400.
Sold the following drafts on Chemical National Bank, New York.
1. Sold for check :
E. L. Howard, $562 ; exchange, 50/. Mace, Gilmore & Co., $1098.90 ;
exchange, $1.10. W. I. Pratt, $4145.85; exchange, $4.15. Spencer,
Mead & Co., $62.25 ; exchange, 25/.
2. Sold for cash :
Smith, Perkins & Co., $1475 ; exchange, $2. Hendricks & Son,
$1100; exchange, $1.25. Hopkins & Weeks, $350; exchange, 50/.
E. V. Rhodes, $100; exchange, 25/.
Certified the following checks :
Freeman, Austin & Co., $1200 ; C. E. Selover & Co., $3200 ; Thomas
Bennett & Co., $2700.
Pay cashier's charge tickets for the following items :
Coal, $42.50 ; telephone service, $40.50 ; cleaning bank, $9.50.
The items for the Sundry Receipts column are as follows :
Bills and coin from yesterday's proof, $187,006.03 ; bills and coin
received from the receiving teller at the close of yesterday's business,
$18,712; bills and coin received from the receiving teller during the
day, $7200 ; bills and coin received from the note teller at the close of
yesterday's business, $10,101.73; received from the clearing house for
to-day's exchanges, $14,503.50.
Make out the paying teller's proof. Cash on hand, $174,451.06.
Foot the certified check book.
Submit your paying teller's records to your instructor for approval.
Transactions for the Note Teller, March 3
Make records in the discount tickler for the paper disposed of to-day.
In the Remarks column write :
For No. 897, Protested,
For No. 882, Paid, 3/S.
For No. 883, Certified, C, JST. B.
For No. 875, Certified, S. ^ L. B,
Rule and foot the discount tickler.
BANKIKG 71
Advices have been received that the following collections have been
paid. Make the proper records in the collection tickler. In the
Remarks column write:
For No. 752, Charged to Alliance National Bank. Bank's collec-
tion^ 75fi; our collection^ 75 f.
For No. 757, Charged to Traders National Bank. Bank's collec-
tion^ $1.75; our collection., $2.
Collections Nos. 765, 819, 820, 829, 822, 823, and 828 have been
paid. In the Remarks column of the collection tickler write :
For No. 765, Paid, 3/S.
For No. 819, Paid, 3/3; collection, $12.25,
For No. 820, Paid, 3/3; collection, $5.75.
For No. 829, Paid, 3/3.
For No. 822, Paid, 3/3; collection, $3.75.
For No. 823, Paid, 3/3; collection, $2.15.
For No. 828, Paid, 3/3.
Collection No. 821 has been protested. In the Remarks column
write: Protested, 3/3; fees, $3.25.
Transactions for the Correspondence Clerk, March 3
This morning's mail contained the following remittances from the
banks named, for credit :
Chemical National Bank, New York $1350.25
Alliance National Bank, Springfield 3200.90
Traders National Bank, Buffalo 3160.50
Bank of Commerce, Baltimore 4200.
Manufacturers and Traders Bank, Philadelphia 7371.80
Chase National Bank, Providence 5150.20
Ninth National Bank, Hartford 2625.80
Fourth National Bank, Chicago 1200.52
The following are drafts on Chemical National Bank, New York, as
per stubs in the draft book.
No. 441, $562; No. 442, 11098.90; No. 443, 11475; No. 444,
14145.85; No. 445, fllOO; No. 446, |100; No. 447, 1350; No. 448,
$62.25.
Enter the above drafts in the draft register. Foot the draft register
and credit Chemical National Bank in the remittance register for the
total. Check the amount transferred.
72 BOOKKEEPING
We have this day made the following remittances to out-of-town
banks for collection. In the To Whom Sent column of the tickler
write the name of the bank to which the paper is sent. No other
record is needed at this time. Discounts Nos. 921 and 928 sent to
Alliance National Bank, Springfield; discount No. 926 sent to
Fourth National Bank, Chicago ; discount No. 929 sent to Ninth
National Bank, Hartford ; discount No. 925 sent to Manufacturers
and Traders Bank, Philadelphia; collection No. 827 sent to Traders
National Bank, Buffalo.
We have this day made the following remittances to out-of-town
banks for credit.
To Farmers National Bank, Albany.
Check of Sears & Co., dated Feb. 27, on Farmers Bank, indorsed by
J. W. Cook, for $100 ; check of Ginn & Co., dated Feb. 27, on Union
Bank, Albany, indorsed by Day Bros., for $400; check of Talton
Bros., dated Feb. 26, on Union Bank, Albany, indorsed by Howard &
Brown, for $200 ; check of Seymour & Co., dated Feb. 25, on First
National Bank, Albany, indorsed by Wyckoff, Seamans & Benedict,
for $1100.
To Chemical National Bank, New York.
Check of C. G. Warner & Co., dated Feb. 25, on Ninth National
Bank, Brooklyn, indorsed by Thomas Bennett & Co., for $1590.40 ;
check of W. C. Lord, dated Feb. 26, on Second National Bank, Brook-
lyn, indorsed by Decker Bros., for $2462.50; check of AV. L. Howard,
dated Feb. 24, on Merchants Bank, New York City, mdorsed by Frey «&
Co., for $1200 ; check of A. L. Allen, dated Feb. 25, on JNlerchants
Bank, New York City, indorsed by S. C. Williams, for $1100 ; check
of M. M. Shea, dated Feb. 26, on City National Bank, New York,
indorsed by D. E. Avery, for $1590.60.
To Manufacturers and Traders Bank, Philadelphia.
Draft of Union Bank, Poughkeepsie, dated Feb. 25, on Bank of the
Republic, Philadelphia, indorsed by Cliarles J. Kennedy, for $1724.50;
draft of City Bank, Utica, dated Feb. 25, on First National Bank, Phila-
delphia, indorsed by Fernald, Son & Co., for $1500; draft of Merchants
Bank, Rochester, N.Y., dated Feb. 25, on Manufacturers and Traders
Bank, indorsed by Smith & Co., for $1200 ; draft of Commercial Bank,
BACKING 73
Buffalo, dated Feb. 26, on Manufacturers and Traders Bank, indorsed
by John Stuart, for $750.
To Traders National Bank, Buffalo, N.Y.
Check of J. W. Cody, dated Feb. 27, on Traders National Bank,
indorsed by Charles Good, for $400 ; check of W. D. Adams, dated Feb.
27, on Central National Bank, Rochester, N.Y., indorsed by Fields
Milling Co., for |1200; check of W. D. McKay, dated Feb. 25, on
Merchants Bank, Rochester, N.Y., indorsed by Fields Milling Co.,
for 1240.
To Bank of Commerce, Baltimore.
Check of C. W. Smith, dated Feb. 24, on Bank of Commerce, indorsed
by C. W. White, for $160; check of Perdy & Co., dated Feb. 23, on
Bank of Commerce, indorsed by Allen & Co., for $200 ; check of Carter
& Co., dated Feb. 24, on Central Bank, Baltimore, indorsed by Janis,
Cooper & Tremper, for $3000; check of Clay & Co., dated Feb. 25,
on Bank of Commerce, indorsed by Janis, Cooper & Tremper, for $1500.
To Fourth National Bank, Chicago.
Draft of Briggs Bank, Westfield, dated Feb. 28, on Commercial Bank,
Chicago, indorsed by Powers & Sprague, for $50.32 ; draft of Merchants
Bank, Providence, dated Feb. 24, on Central National Bank, Chicago,
indorsed by Powers & Sprague, for $5000 ; check of Simpson & Frey,
dated Feb. 24, on Fourth National Bank, indorsed by Frost & Co., for
$500 ; check of W. A. Harris, dated Feb. 24, on Fourth National Bank,
indorsed by W. W. West, for $1500.
To Chase National Bank, Providence.
Check of Graham & Co., dated Feb. 25, on Merchants and Traders
Bank, Providence, indorsed by C. W. Hunter, for $1500; check of
White, Hayes & Co., dated Feb. 24, on Chase National Bank, indorsed
by Chemical National Bank, New York, for $1350.25.
To Alliance National Bank, Springfield.
Check of Hyde & Page, dated Feb. 27, on Peoples Bank, Worcester,
indorsed by Fourth National Bank, Chicago, for $1200.52.
The note teller has advised you of the following charges to banks.
Alliance National Bank, Springfield, proceeds of collection No. 752,
$721.75 ; Traders National Bank, Buffalo, proceeds of collection No. 757,
$1748. 25.
74
BOOKKEEPING
Letter of Advice and Remittance. — When banks remit by New York
draft for collections a form similar to the following is used.
F. E. ROGERS, President S. C. WILUAMS, Vice President '
CHAS. H. PALMER. Cashier
K/Zie (chemical >^atlonal ^Jjank
J^eiv yonk, ^eA. 2S, 79—
fi'-. UK €U^, Ssq., CasAlef
^A>t(yyiial cAatuyyuA.1 SoLnk
JS(>^t(yyi, 7lla^^'.
£bean Sir, Please find heneiuitk oun draft ^o, //^-T
on S'k& cAaluyyial BamJo o-f R&cLeAn/JdA/yyv for ^///^.^^ in pay=
ment of collections as stated 6eloiv,
YOUR NO.
DATE OF
YOUR LEHER
PAYER
AMOUNT
6/^
<^^^.
/
R. UK ffcdt
/060
720
/O
fS. €. li^tiia^n.2^
^72
60
72^
/o
(l. E S've.if V d'o^
700
7^2
/f
€. UK ^n^oM^ V' ^.
Uotal collected
6000
7722
60
Uess Collection and Exchange
>Ji mount remitted
7
72
77f^r
7S
Very respectfulli/ yours
^kaof. fi^. ^aZ'yyv&v, Qashier
The note teller has also advised you that the following collections
have been paid and the proceeds credited to the banks named.
Proceeds of No. 752, credited to Traders National Bank, Buffalo,
$721 ; proceeds of No. 757, credited to Alliance National Bank, Spring-
field, $1746.25 ; proceeds of No. 819, credited to Traders National Bank,
Buffalo, $12,252.75 ; proceeds of No. 820, credited to Manufacturers and
Traders Bank, Philadelphia, $5717.85 ; proceeds of No. 822, credited to
Chase National Bank, Providence, $3717.75; proceeds of No. 823,
credited to Farmers Bank, Albany, $2127.59.
BANKING 75
The note teller advises that collection No. 821 has been protested
and the protest fees, $3.25, charged to Ninth National Bank, Hartford.
Extend the balances in the remittance register.
Transactions for the Individual Bookkeeper, March 3
Enter the deposits from customers in the individual ledger from the
receiving teller's daily check sheet.
The note teller has turned over credit tickets for the proceeds of
collection paper, collected for depositors to-day as follows : Nos. 765,
828, and 829. Enter the proceeds of these collections in the individual
ledger.
Credit tickets have also been received from the note teller for paper
discounted for customers to-day. Enter these notes to the credit of
depositors directly from the discount register.
The total of checks certified to-day, as reported by the paying teller,
is $7100. Enter this amount to the credit of Certified Checks.
Checks of depositors have been received by the paying teller and
turned over to the individual bookkeeper, as shown on the paying
teller's daily check sheet. Enter these items in the individual ledger.
Charge tickets have been received from the paying teller on account
of certified checks. Refer to the certified check book for these amounts,
and enter them in the individual ledger.
Checks of depositors have been received by the receiving teller,
entered on liis sheet, and turned over to the individual bookkeeper. A
list of these, with the names of the drawers, is given below. Enter the
items in the individual ledger.
Spencer, Mead & Co., $1900 ; Wyckoff, Seamans & Benedict,
$5273.50, $1950, $14,360; E. V. Buckley & Son, $1400, $1200; C. E.
Selover & Co., $1700 ; Fernald, Son & Co., $1340 ; Powers & Sprague,
$500; Decker Bros., $11,290; F. E. Sherman, $6000.
Checks of depositors have come in from the clearing house as follows :
Wyckoff, Seamans & Benedict, $17,700; Spencer, Mead & Co.,
$15,000, $1800; F. E. Sherman, $960.50; C. E. Selover & Co., $300;
D. B. Roberts, $750; Powers & Sprague, $1200; Janis, Cooper &;
Tremper, $2400; Mace, Gilmore & Co., $1500; Lane, Rowell & Co.,
$1250 ; D. E. Avery, $900 ; J. O. Baker, $1700 ; Thomas Bennett &
Co., $3100 ; E. V. Buckley & Son, $9150.60 ; J. H. Crandall, $45,120 ;
Decker Bros., $15,200; C. E. Denison, $25,300; Fernald, Son & Co.,
$1300 ; Fields Milling Co., $10,500.
76 BOOKKEEPING
The correspondence clerk has turned over depositors' checks received
from out-of-town banks.
Wyckoff, Seamans & Benedict, 1625.80, $2000 ; Charles J. Kennedy,
$150.20, $2500 ; W. I. Pratt, $2500.
Extend the balances of customers' accounts in the individual ledger.
Foot and prove the individual ledger.
Transactions for the General Bookkeeper, March 3
Make the records in the general cash book for the following.
1. Items from the discount register.
2. Items from the discount tickler.
3. Items from the remittance register.
4. Items from the individual ledger.
5. From the collection tickler credit Collection and Exchange for our
collection charges on tho following collections: Nos. 752, 757, 819, 820,
822, and 823.
6. From the receiving teller's daily check sheet credit Collection
and Exchange for the collection and exchange items listed there.
7. From the paying teller's daily check sheet debit Expense for the
total expense items, and credit Collection and Exchange for the totals
of the Exchange and Sundry Collection and Exchange columns.
8. From the collection tickler credit Protest Fees for $3.25, the
notary's charges for protesting collection No. 821.
9. From the discount tickler debit Protested Paper for discount
No. 897, $29,900.
Note. — Nearly all national banks have some bank official qualified as a notary
public. In the majority of cases this official receives all protest fees which are
paid to the bank for protesting paper. He is usually a person of high standing
in the bank, such as cashier, discount clerk, etc. When these fees go to an official
of the bank they are charged to Protest Fees in the general balance ledger. At the
end of any given period the notary may draw such fees by check. No protest fees
are entered on discount No. 897 at this time. They are not recorded until collected,
unless they are charged to an out-of-town bank.
Prove the cash. Tho amount of bills and coins on hand is $222,624.52 ;
clearing-house checks, $33,997.04 ; cash items, $15,229.20.
Rule and foot the general cash book. Post the general cash book to
the general balance ledger. Extend the new balance in the general
balance ledger. Prove the general balance ledger.
Submit your book to your instructor for approval.
BANKING
77
Closing the Banking Set
Inventories, March 3, 19 —
Real Estate :
Banking house and lot $27000
Furniture and Fixtures :
Estimated value $12500
United States Bonds :
At cost $200000
Stocks and Bonds :
Present value ' $63750
Interest and Discount :
Accrued on United States bonds $650
Trial Balance. — No trial balance is necessary in this set, as the
general balance ledger is in itself a trial balance of the general ledger
accounts of the bank.
Dividends. — It is customary for national banks to declare dividends
semiannually and close their books. Before any dividend can be
declared every national bank must carry at least one-tenth part of its
net profits for the half-year immediately preceding to its surplus fund,
until the same shall amount to 20% of its capital stock. After the
surplus fund has been deducted the directors may declare a dividend of
so much of the profits remaining as they deem expedient.
Statement of Resources and Liabilities. — A statement of resources
and liabilities is usually made out daily in all large national banks.
Such a statement gives the condition of all the general ledger accounts
of the bank, together with a detailed exhibit of the cash account. All
items of information entered on this statement are properly classified,
thus furnishing data for the computation of the bank's reserve, and for
the necessary reports to the Comptroller of Currency. The National
Bank Act also requires that every national bank shall make to the
Comptroller of the Currency not less than five reports during each
year. These reports must be made in accordance with a prescribed
form and be published in a newspaper where the bank is established.
They exhibit in detail the resources and liabilities of the bank, the
amount of each dividend, and the net earnings in excess thereof.
In this set you will make but one general statement of resources and
liabilities. Carefully study the form given on pages 78 and 79, and
then proceed to make your statement of resources and liabilities.
78
BOOKKEEPING
Statement of
(Commercial >^citional cBank,
Cash
Resources
Bills and Coin
Exchanges for Clearing House
Cash Items (City and Foreign)
Bills Receivable
Bills Discounted
Protested Paper
Stocks and Bonds
U.S. Bonds with U.S. Treasurer (per inventory)
Premium on U.S. Bonds
Other Stocks and Bonds (per inventory)
Properties
Real Estate (per inventory)
Fixtures (per inventory)
Out^of-Town Banks, Dr.
Due from Reserve Agents
United States Treasurer
5% Redemption Fund
Due from U.S. Treasurer
Overdrafts
243700
55166
6240
405750
7200
150000
6000
103500
17500
5200
7500
1000
40
305107
412950
259500
22700
22940
100000
8500
620
1132318 72
32
ft
40
60
40
Statement of
So/n/nefcia/ ^^ational ^ank.
Losses
Current Expenses
Salaries, due and paid
Taxes, due and paid
Incidental Expenses, total paid
Depreciation
Furniture and Fixtures
Real Estate
Dividends, 4% of Capital Stock
Surplus Fund, 10% of Net Gain
Undivided Profits, balance of Net Gain
4500
960
240
150
500
93
5700
650
IGOOO
2415
5735
30501 09
93
14
BANKING
79
Resources and Liabilities
SBoston, .^ass., Marcli 3, 19 —
LiaUlities
•
Capital Stock
400000
Surplus Fund
93630
16
Undivided Profits
9250
60
Circulation
160000
Out-of-Town Banks, Cr.
12650
90
Deposits
Cashier's Checks
Certificates of Deposit
Certified Checks
Individual Deposits
Protest Fees
4050
17500
19295
401750
90
60
40
442696
140
90
Undinided Prqfits {Net Gain)
24150
16
^^^^^^^
1132318
72
Losses and Gains
-"
SBoston, ^m/TLass., Marcli 3, 19
Gains
Revenue Receipts
Interest and Discount, net amount earned
Collection and Exchange, net amount earned
Interest (per inventory), due on U.S. Bonds
Stocks and Bonds, increase in value
16500
12500
600
29501
1000
09
30601 09
80
BOOKKEEPING
Hand your statement of resources and liabilities to your instructor
for approval.
Statement of Losses and Gains. — Preparatory to declaring dividends
and closing the ledger make a statement of losses and gains. Before
proceeding with this statement carefully study the form given on pages
78 and 79. The net gain will be divided as follows: To Dividend
account, 4<^ of the capital stock; to Surplus Fund, 10% of the net
gain ; to Undivided Profits, the balance of the net gain.
Hand your statement of losses and gains to your instructor for approval.
Closing the Ledger. — When a bank employs the form of ledger used
in this set, the loss and gain accounts should be closed by journal entries.
To take the gains out of the several gain accounts and carry them to
the Loss and Gain account, an entry similar to the following should be
made in the journal.
Interest and Discount
Collection and Exchange
Stocks and Bonds
Interest
To Loss and Gain
Net amount earned
Net amount earned
Increase in value
Due on U.S. bonds
Total gains
1C500
12500
1000
500
40
30501
09
To take the losses out of the several loss accounts and carry them to
the Loss and Gain account, an entry similar to the following should be
made in the journal.
Loss and Gain
To Expense
Salaries
Taxes
Real Estate
Furniture and Fixtures
Total losses
Incidental expenses
Due and paid
Due and paid
Depreciation
Depreciation
C350
93
240
4500
960
600
150
93
To close the Loss and Gain account, an entry similar to the following
should be made in the journal.
Loss and Gain
To Dividends
Surplus Fund
Undivided Profits
Net gain
4% of capital stock
10% of net gain
Balance of net gain
24150
16
16000
2415
5735
After making the necessary entries to close the loss and gain accounts
post them to the general balance ledger.
Dividends are usually paid by cashier's checks. Dividend account is
debited and Cashier's Checks account is credited when dividends are
BANKING
81
paid. You will omit the dividend checks, as no list of stockholders has
been given.
Extend the new balances in the general balance ledger.
Prove the general balance ledger.
Prove the correctness of the out-of-town banks ledger by an abstract
similar to the following. ^-
Abstract of Out-of-Town Banks Ledger, March 3, 19
Union Bank, Troy
Traders National Bank, Buffalo
Chemical National Bank, New York
Merchants Bank, Philadelphia
Mechanics National Bank, Baltimore
City Bank, Providence
Balance as per Out-of- Town Banks in G. B. L.
7200
31250
2692
1790
429.34
906
1200
42934
See if Deposits account in the general balance ledger agrees with the
individual ledger.
Prove the discount tickler. The total of the unpaid notes shown in
the discount tickler should equal the balance of Bills Discounted account
in the general balance ledger.
Present all your books to your instructor for examination.
82 BOOKKEEPING
THE CLEARING HOUSE
A Clearing House is an institution organized by associated banks to
simplify and facilitate daily exchanges of items and settlements of
balances resulting from such exchanges.
Many clearing-house associations also look after the mutual welfare
of their members by prescribing rules to govern in various important
matters ; as, uniform rates of collection and exchange, interest, etc.
Origin. — Before clearing houses were organized each bank in a given
city had to keep an account with practically every other commercial
bank in that city. Statements of these accounts were made up daily
and given to "runners," who took them, together with the items of
charge, to the debtor banks for settlement. All amounts were usually
paid in gold. In the larger cities this work was very laborious and
unsatisfactory. To facilitate matters these runners conceived the idea
of meeting at a given point and adjusting balances. From these first
crude gatherings has sprung the stupendous clearing-house system.
The Officers of a clearing-house association are usually president, vice
president, secretary, treasurer, manager, and clearing-house committee.
Frequently there are one or more special committees ; as, conference
committee, nominating committee, arbitration committee, etc.
Preparing Exchanges for Delivery. — When exchangeable paper is
received at a bank it is classified according to the bank at which it is
payable. The work of assorting the items for delivery to the clearing
house is facilitated by the use of a case of compartments. This case is
provided with a compartment for each member of the clearing house.
The compartments are designated by the clearing-house numbers of the
banks. Before the items are placed in these compartments they are
stamped with the receipted indorsement usually required by clearing-house
associations. The form of this indorsement is not always the same, but it
should always indicate the channel through which the paper has passed.
Received Payment
through the
Boston Clearing House,
Feb. 16, 19—.
WiNTHROP National Bank.
The above is a common form of indorsement used for items paid
through the clearing house.
BANKING
83
At the close of the day, or at intervals during the day, the exchanges are
taken from the compartments, and the amounts listed on a blank entitled
Exchange Slip^ as shown in the accompanying illustration.
The first total on the ex-
change slip represents the
amount of exchanges received
by No. 24 before the close of
banking hours on Feb. 15, to
be sent to the clearing house
the following day. The addi-
tional items represent the morn-
ing exchanges which are received
by mail or among the deposits
before ten o'clock. The second
total is, then, the amount of
claims carried to the clearing
house by No. 24, Faneuil Hall
National Bank, against No. 22,
the National Bank of Commerce.
A separate exchange slip,
appropriately labeled, is pre-
pared for each member of the
clearing house.
Duplicate lists of all items
taken to the clearing house are
made by the bank and preserved
for future reference.
The totals of the exchange
slips are next copied on a blank
entitled Settling Clerk'' s State-
ment.
The Settling Clerk's Statement
contains a printed list of the
names and numbers of all the
banks connected with the
clearing-house association. The first debit column of this sheet is
usually made up from the exchange slips at the close of each busi-
ness day, thus completing the heaviest part of the work the day before
clearing. On the morning of clearing the second debit column is filled
out from the final totals of the exchange slips. The credit column is
1
EXCHANGED SIvIP
NO. 22
COIVLIVIERCE
KRONl NO. 24
Date S^&(^. /6, /^
62¥-0
760
^00
fO
7666
60
^60
76
36^2
60
^00
6600
/^2
SS
^
6/
/200
^0
660
2886/
6^
760
60
(fO
6^
2^26/-
84
BOOKKEEPING
Settling Clerk's Statement
No. 37- NATIONAL BANK OF REDEMPTION
Tuesday, May 20, 19
NO.
BANKS
FIRST DEBIT
ADDITIONS
TOTAL DEBIT
BANKS CR.
NO.
1
Massachusetts National
G5198
11
29827
71
1
2
National Union
29767
29
19569
67
2
3
Old Boston National
1.3413
12
1904
81
3
4
State National
74646
39
46131
40
4
5
New England National
87391
81
79384
08
6
12
Atlantic National
17604
30
19678
91
12
13
Merchants National
92694
99
122665
24
13
15
National Hamilton
40635
19
20446
16
15
17
Second National
92069
05
199000
35
17
18
Atlas National
71649
76
30921
52
18
20
National Shawmut
642618
69
385833
63
20
21
National Exchange
84249
17
77924
75
21
22
Nat'l B'k of Commerce
130984
52
^ ■
249681
75
22
24
Faneuil Hall National
39426
09
5206
56
24
Z5
National Webster
1950
83
2251
64
25
26
Eliot National
214234
90
248014
63
26
28
Suffolk National
85573
82
39980
14
28
31
Freemans National
9192
09
19051
61
31
32
Boylston National
6854
45
13825
75
32
37
Nat'l B'k Redemption
37
39
First National
12132
91
66300
81
39
41
Nat'l B'k of Republic
171745
26
123536
76
41
C3
Mt. Veraon National
6345
06
2614
90
43
^_6
National Security-
8697
70
10800
38
46
-iS
Central National
89203
36
25580
27
49
CO
Colonial National
21438
57
12175
44
50
51
Fourth National
36105
94
102526
31
61
52
Metropolitan National
13667
09
•
5600
66
52
53
Winthrop National
67338
76
10159
08
53
55
Mechanics National
8947
19
13280
66
55
56
Commercial National
14849
40
13940
64
56
100
Boston Clearing House
165844
36
411388
32
14
09
100
Footings
2416470
23
09
14
Balance
Gain
=
2409865
6605
0605
2409865
2416470
23
BANKING
85
left blank to be filled out at the clearing house when each settling clerk
has received from the various members all the items to be paid by his bank.
When the exchange slips have been completed, and the amounts have
been transferred to the settling clerk's statement, each slip is attached
to the package of items which it represents.
Note. — The Boston banks have the settUng clerk's statement arranged with
four columns, but these banks usually make use of but two columns, as shown on
page 84. "W^ere but two columns are used only the final totals of the exchange
slips are copied on the settling clerk's statement.
The Check Ticket. — The
amounts of the exchange slips
are also entered on Check Tick-
ets. A check ticket is made
out for each member of the
clearing-house association and
delivered to the proper settling
clerk at the clearing house to
enable him to check off the
amounts he receives from other
banks, in case there is an error.
The Credit Ticket. — Before going to the clearing house the settling
clerk foots and proves the Total Debit column of the settling clerk's
statement. If this footing is correct it should agree with the totals of
the clearing-house checks on the receiving, paying, and note tellers' and
correspondence clerk's daily check sheets. When this footing has been
proved correct the settling clerk enters it on a Credit Ticket.
J{o, 26
S/iot National, ^ank
From No. 51
%Tourth ymA/atlonal t/janli
Form of Credit Ticket
LU
LU
No. 21. Boston Clearing House
Credit
National Exchange Bank
S^eA. /6, I9_
f. If. BeyyidsA., Settling Clerk
How Non-Members clear. — Besides the regular members, there are
a number of trust companies that make their clearings at the Boston
86 BOOKKEEPING
Clearing House through the agency of other banks which are members.
These non-members keep adequate funds on deposit at their clearing
bank, as a compensation for services rendered and as a guarantee
against loss. They prepare their exchanges in practically the same
manner as the regular members, but deliver their packages of items to
their agents for deposit instead of to the clearing house for settlement.
These agents classify and distribute the paper of the non-members just as
they do the regular items received on deposit. The return exchanges for
non-members at the clearing house are delivered to the clearing agents just
as if they were payable by them. After these items are charged to the
non-members by the clearing agents they are promptly transmitted by
runners to the banks where they are to be paid.
Procedure in making Clearings. — Each business day at ten o'clock
the exchanges take place between the banks. About five minutes
before the hour designated the clerks begin to arrive. These clerks
are usually two in number, each bank sending to the clearing house a
delivery clerk and a settling clerk. On his arrival at the clearing house
the settling clerk leaves at the desk of the proof clerk, sitting in the
manager's office, his credit ticket showing the amount of exchanges with
which his bank is to be credited. The proof clerk immediately tran-
scribes this amount under Banks Cr, on a blank called the Clearing-
House Proofs as illustrated on page 87.
The aggregate of the credit tickets presented to the proof clerk rep-
resents the total exchanges sent in by the various banks, and is called
Credit Exchanges,
The desks in a clearing house are usually arranged in long rows, one
desk being provided for each member. At one minute before ten
o'clock the manager sounds a gong as a signal for the clerks to take
their proper places. The settling clerks occupy their separate desks on
the inside of the counter, while the delivery clerks form on the outside
with their exchanges arranged for convenient distribution. Promptly at
ten o'clock the manager again sounds the gong, and the delivery of the
exchanges begins. Each delivery clerk advances, one desk at a time,
with military precision. At each desk he hands over to the settling
clerk the exchange package for that particular bank. At the same
time, in an opening in the desk provided for that purpose, he deposits
a check ticket, corresponding in amount to the amounts listed on the
exchange slips. The settling clerk takes the amount on the exchange
slips and enters it to the credit of the proper bank on his own state-
ment. After the circuit has been completed each delivery clerk is at
BANKING
87
Boston Clearing House Proof
Tuesday, May 20, 19
NO.
BANKS
BALANCES
DUE TO CLEARING
HOUSE
EXCHANGES
BANKS D:^. banks CR.
BALANCES
DUE TO THE BANKS
NO.
1
Massachusetts National
137116
01
691195
70
554079
09
1
2
National Union
87417
48
391522
85
354105
37
2
3
Old Boston National
8G101
85
243422
29
157320
44
3
4
State National
454779
21
567671
69
112892
48
4
5
New England National
190038
36
240816
86
50778
50
5
12
Atlantic National
146654
11
227212
02
80557
91
12
13
Merchants National
132056
29
1351212
39
1219156
10
13
15
National Hamilton
C4170
54
395649
79
341479
25
15
17
Second National
613635
51
1104116
94
490481
43
17
18
Atlas National
1025G8
01
398617
81
296049
80
18
20
National Shawmut
335824
88
4109685
56
3773860
68
20
21
National Exchange
38771
98
938973
65
900201
67
£1
22
Nat'l B'k of Commerce
908658
45
1174063
77
265405
32
22
24
Faneuil Hall National
23898
97
189501
57
165602
60
24
25
National Webster
54331
39
65216
89
10885
50
25
26
Eliot National
89495
03
1196253
14
1106758
11
26
28
Suffolk National
94489
10
690275
61
595786
51
28
31
Freemans National
111167
50
155111
74
43944
24
31
32
Boylston National
68422
21
81747
05
13324
84
S2
37
Nat'l Bank Redemption
2409865
14
2416470
23
6605'
09
37
39
First National
122675
28
539383
18
416707
90
39
41
Nat'l Bank of Republic
1086691
28
1279888
23
193196
95
41
43
Mt. Vernon National
11046
74
76455
77
65409
03
43
46
National Security
4121
63
74626
44
70504
81
46
49
Central National
68804
57
317969
52
249164
95
49
50
Colonial National
3338
12
262315
20
258977
08
50
51
Fourth National
371878
03
476835
03
104957
51
52
Metropolitan National
2830
85
78607
03
75776
18
52
53
Winthrop National
210240
230718
68
20478
68
53
55
Mechanics National
• 34286
67
108049
77
73763
10
55
56
Commercial National
14493
34
144410
69
129917
35
56
100
Boston Clearing House
1816532
10
1816532
10
100
Aggregates
1393507
94
20641021
25
20641021
25
1393507
94
88 BOOKKEEPING
the point from which he started, and the settling clerk has on his
desk exchange packages received from each of the other banks.
Being now at lil^erty, each delivery clerk gathers up tlic packages
against his bank, usually called Debit Exchanges, and returns with
them, while the settling clerks remain until the clearing-house proof
has been made.
After the amounts of all the exchange packages have been properly
entered, the settling clerk proceeds to foot his statement and ascertain
the amount his bank is to receive or pay. He then makes out a balance
ticket, which is sent to the proof clerk's desk. This ticket shows the
total exchanges brought to and received at the clearing house, together
with the balance to be received or paid by his bank.
Form of Balance Ticket
UJ
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^
No. 1. Boston Clearing House
Dr. Massachusetts National Bank, Am't Rcc'd. %2^6,/37.''
Cr. '• €1 « Am't Bro't. $J^i',^c5'^.^'
Balance $ — ^^-^duc Clearing House, %
Balance due the Massachusetts National Bank, $ 67,0^7°"^
f. f-f. Be/yLcUv, Settling Clerk
When the proof clerk receives the balance tickets from the several
settling clerks he immediately transcribes the debit exchanges (the
amount received by any bank) in the Banks Dr. column, and the dif-
ference between the debit and credit exchanges in the Due Banks or
the Due Clearing House column, as the case may be, on the clearing-
house proof. The credit exchanges having been previously entered, the
proof clerk now proceeds to complete his proof. As the total exchanges
brought must be the same as the total exchanges taken away, the debit
and credit columns of the proof should agree if the work is correct, as
also the total due banks and the total due the clearing house.
While the preparation of the proof is in progress the settling clerks
are verifying their work by means of check tickets. If there are no
BANKING 89
errors in the clearing-house proof the manager announces the fact and
the settling clerks return to their banks. If there is an error, and this
is not infrequently the case, the proof clerk announces the difference to
the manager. The manager then announces the difference to the set-
tling clerks, who proceed to search for it. When this announcement is
made the settling clerks have usually completed a revision of their
statements, and can many times locate discrepancies as soon as they are
announced -by the manager.
Various methods are resorted to in locating differences. Usually the
manager calls for an exchange of sheets to the right or to the left for
an examination of footings, and in cases where an error in entry is
apparent the amounts are called back. This revision i3 final, and if the
additions are correct it must make the proof balance.
The accompanying Clearing-House Proof and Settling Clerk's State-
ment are actual forms used in transactions at the Boston Clearing House.
Debtor and Creditor Banks. — Thus far no money has entered into the
exchanges at the clearing house. The clearing, however, is not yet
complete. If the total of the items brought to the clearing house by
any particular bank is less than the total of the items brought by other
banks against it, the bank owes the clearing house the difference between
such totals. On the other hand, if the items brought to the clearing
house by any bank are greater than the totals brought against it, that
bank u entitled to receive from the clearing house the difference between
such totals. To complete the clearing, therefore, it is necessary to make
settlement for the debit and credit balances.
Form of Manager's Receipt
1
No. 50. Boston Clearing House
in
?9raA^
s, 19—
1-
Received from COLONIAL NATIONAL BANK
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S^W'emty-Q^eA)-em. ^ko-vxuM^cL c^C^& /f^^m-dv&d ofi/ycti^
^ Dollars
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in full for balance due the Clearing House.
1
Manager
90 BOOKKEEPIKG
At 12.15 P.M. each day except Saturday, and then at 11.30 a.m., the
debtor banks must pay to the manager at the clearing house the balances
due from them respectively, either in coin or in such other currency as
the laws of the United States shall require, or in such certificates as
shall be authorized by the clearing-house association, excepting sums
less than one thousand dollars, which may be paid in bills of the debtor
banks.
Receipts signed by the manager are given to the banks making the
payments. (See page 89.)
At 1.30 P.M. each day except Saturday, and then at 12 M., the creditor
banks shall receive from the manager at the clearing house the balances
due them respectively.
Receipts signed by the cashiers of the creditor banks are given to the
manager of the clearing house.
Form of Cashier's Receipt
National Security Bank
% 2^,6^0. *>^ Boston. InoA^k 26, \^
Received from C A. RUGGLES. Manager of the Boston
Clearing House, by /^o-6-£aZ 10^. ^va,rX , Messenger of this Bank,
^w-€/nty-j(yuA^ ij^k