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The Columbia University Libraries reserve the right to refuse to accept a copying order if, in its judgement, fulfillment of the order would involve violation of the copyright law. Author: Packard, Silas Sadler Title: Bank book-keeping Place: New York Date: [1 897] MASTER NEGATIVE « COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED • EXISTING BIBLIOGRAPHIC RECORD ^^50.72 Packard, S[ilaS] S[adler] 1826-1898. Bank book-keeping; a text-book for business schools and for private students, by S. S. Packard ... New York, S. S. Packard [''ISQ?] 88 p. illus., forms. 28*". Copyright record has ^1898. 1. Banks and banking— Accounting. 2. Bookkeeping. Library of Congress O HG1707.P2 6-23261t .y Wa-^ RESTRICTIONS ON USE: TECHNICAL MICROFORM DATA FILM SIZE: ?)S>myv\ DATE FILMED: REDUCTION RATIO: l(o- 1 IMAGE PLACEMENT: lA IB IIB INITIALS ■.Wi TRACKING # : M5» nesi^n FILMED BY PRESERVATION RESOURCES. BETHLEHEM, PA. f '^i CO b 3 3 05.0 IS So ^ JO N C/D ^-< OOM <^ O ^ ^ ^t:^^ ^'^a .-v^' O .*^* Ca) cn 3 3 cr o > I? ^i ^-< OOM «^ o '*/ CJl 3 3 > 0,0 n m CD O — t^ -r OQ X ^^ •^ o o < X N M 'Pa > ^.^^.-v^' ^^^ ^^7^ M O 3 i V. V/ Ul S 01 r;'"ri;c|:|- yyi i (> 00 b 2.0 mm «aC0fFGMJ«U.MNO°QiKruvWIT; ABCDEFGHIJKLMNOPORSTUVWXYZ abcdefghi|klmnopqrstuvwxy2l234567890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1234567890 fc. g- m o o ■D m -o > C o) I TJ ^ OC/) 5 m o m ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 2.5 mm 1234567890 CJl 3 3 ^cp ^^ & b 3 3 fi> cr >> iSt'^ ^0 5;m 3^m ¥s li 3x IJKLMN nopqrst |2 l3 OPQR uvwxy Kc N C/) ^< IT*-* 5;$ ^>c OlX 00 i; oorsi CT>X ^-< OOM VO 3 3 > o m ^ o o X < N -< tsl „/*! intiit€itpcmmWvk LIBRARY School of Business ( i« I r Ml Mi 11 'ta BANK BOOK-KEEPING A TEXT-BOOK FOR BUSINESS SCHOOLS AND FOR PRIVATE STUDENTS BY S. S. PACKARD PRESIDENT OF PACKARD'S BUSINESS COLLEGE, NEW YORK p NEW YORK S. S. PACKARD, Publisher loi East 230 Strlet ^m^mmm f J THE NEW PACKARD COMMERCIAL ARITHMETIC 360 Pages, 8vo, Cloth, $1.50. KEY TO ABOVE (for Teachers only), $1.00. The New Arithmetic is published both with and without answers. Unless otherwise ordered, books with answers will be sent. THE PACKARD COMMERCIAL ARITHMETIC. School Edition, 300 Paces, 12MO, $1.00. KEY TO ABOVE (for Teachers only), $1.00. The School Edition is an abridgment of the New Packard Commercial Arithmetic, and has been prepared expressly for the commercial departments of high schools and for short course com- mercial schools, including evening classes. THE PACKARD METHOD OF TEACHING BOOKKEEPING. 150 Large 8vo Pages, Cloth, $1.25 TEACHER'S GUIDE OR KEY to above, 62 Pages, 8vo. Price to Teachers, 75 cents. PACKARD'S PROGRESSIVE BUSINESS PRACTICE. Tests 1, II and III now ready. PACKARD'S LESSONS IN MUNSON PHONOGRAPHY. Text-book, supplemented by a large variety of reading matter. Circular on Application. PUBLISHER'S STATEMENT. This is a text-book on Bank Bookkeeping, made to fill the requirements of to-day. The material has been obtained from the leading banks of New York and Chicago, and the methods of doing business followed as closely as possible; the purpose being to give to schools and private learners the readiest and surest means of acquiring a practical knowledge of the subject. The plan was conceived, and has been carried out as faithfully as possible, of so classifying the work as to give to each recording officer or clerk his particular Hne of duties, and of so adjusting these duties that when each has done his part the complete record of the business to its minutest detail will have been made. This is the feature of the book to which attention is particularly called; and which it is believed will commend it not only to teachers but to bankers and practical accountants. The entire scojie of the transactions is divided into four periods, representing four consecutive months, and sufficiently recognizing the movement of time to permit the maturity of l>aper and to illustrate the important feature of earning which comes through loans. In order to make dividends possible the single transactions have been made larger in volume than might ordinarily occur; but the natural sequence has been maintained, and no fictions or eccentricities resorted to. The work has been thoroughly tested, and has, in fact, grown out of the demands of the class room. It is feasible and practical throughout; and if followed according to its design, will accomplish its puqwse. It has been found best to take one period at a time, completing the records of each department through that period, thus following the separate transactions through the various books and departments to the final result in the ledgers. This gives to the student a comprehensive view of the subject, and enables him to work the succeeding periods with comparatively little help. It is not necessary that the entire four periods should be written up, but no earnest student is likely to stop short of the whole. Complete results can be obtained, however, at the end of any period; and It may be advisable to close the ledger accounts and get these results at least once before the conclusion of the entire series. (See last paragraph, page 67.) In order to get directly at the work, the books are opened from a statement showing the condition of a running bank, instead of going through the slow processes of opening a bank and gradually bringing it to a paying condition. Care has been taken, also, to produce sufficient material for all necessary reports and statements, and to conform to all the requirements of a first-class bank. In presenting examples of forms, both as to i>apers and records, the point has been to make them business-like, in very truth. The absence of copy-book exactness in the script forms will be noted and appreciated. The publisher takes this occasion to express his earnest appreciation of the ready service rendered by the several bankers of New York and Chicago who have been freely consulted- and esi>ecially of the valuable aid given by James G. Cannon, Vice-President of the Fourth National Bank, New York, and H. H. Swasey, now Secretary of the Fifth Avenue Trust Company New York, as also for the important assistance of Mr. E. M. Barber, in the detailed presentment of the matter. It is not presumed that the book is perfect or free from errors; and the publisher stands ready to accept criticisms and corrections, and to profit by them. Copyright, igg?, av S. S. PACKARD BANK BOOK-KEEPING. CHAPTER I. BANKS AND THEIR MANAGEMENT. I* A Commercial Bank is an institution designed to aid trade and commerce by offering to the public important services, which may be specified as follows: First. By providing a place where money may be deposited, at times and in amounts to suit the convenience of the de|x>sitor. Second. By permitting the money so deposited to be withdrawn upon a simple order, at such time and in such amounts as the depositor may find convenient, the canceled check when returned by the bank affording proof that the sum has been paid. Third. By undertaking for its dealers the collection of commercial paper, such as bills or notes, mercantile drafts, Iwnds, coupons, etc. Fourth. By issuing bankers' drafts, bills of exchange, and letters of credit, which facilitate the payment of debts at distant places without the actual transfer of funds, and affording people who travel a means of obtaining money in foreign lands, or at points distant from their homes, thus avoiding the risk and danger of carrying it about. Fifth. By issuing certificates of deposit for money left with the bank, payable either on demand or at a specified time, and upon which interest may or may not be allowed, according to the terms of deposit. Sixth. By tendering its superior facilities for the safe-keeping of money. [In the early history of banking the safe-keeping of money was the principal service rendered the public, bnt recent devices, so generally in use in stores and offices for the safe-keeping of valuables of all kinds, have made this feature of the bank of secondary consideration.] Sez'enth. By reducing risk and inconvenience in handling money, through the intervention of orders or checks, which can be cashed only upon proper endorsement. S* The Business of Banking ranks among the chief activities of commerce in Its service to the public, and holds a position as legitimate and honorable as that held by any mercantile pursuit. The object of those who engage in banking is primarily that of gain; and this is sought, as in other kinds of business, through offering to the public what the public needs and will j)ay for. The banker establishes a secure place for the keeping of the money of the merchant and the manufacturer; pays it out on their order; attends to the collection of their notes, drafts, and checks, and serves as an agent for both borrower and lender. 3* Earnings. — The principal source of a bank's earnings is the discounting of business paper and the lending of money on proper security. Charges for collecting notes and drafts, interest upon bonds and returns from such securities as it holds, commissions for the payment of coupons, and premiums for the issuing of drafts to outsiders are also among the sources of income. The bank's outlay includes interest on deposits of banks and bankers, cost of collecting foreign items, taxes, repairs, salaries, and the ordinary office expenses. The funds of a bank available for lending purposes accrue: (i) from the amounts paid in by the stockholders; (2) from accumulated surplus; and (3) from deposits of individual dealers, corporations, banks antl bankers, less such amount as the law requires shall be set aside for the BANK BOOK-KEEPING payment of depositors and the redemption of outstanding notes. Let that at the beginning of the year the condition of the bank is as follows: us se, for example, Resources. Cash $600000 Liabilities* Capital stock ami surplus $100000 Deposits 500000 $600000 $600000 Assuming that it will keep on hand $150,000 as reserve fund, there remains $450,060, or three- fourths of the total amount of cash in its possession, which it may lend, either to its depositors or to such other persons as can furnish security. If these loans were permitted to run for the entire year at a uniform rate of six per cent, allowing for current expenses, the condition of the bank would be as follows: Resources* Loans and discounts $450000 Cash 160000 Expenses 17000 $627000 Liabilities* Capital stock and surplus $100000 Due depositors 500000 Interest 27000 $627000 Deducting the expenses from the earnings we have as net gain $10,000, which, if the total earnings could be divided, would permit a dividend to stockholders of ten per cent. This illustration shows how a bank can afford to receive money on deposit and hold the same subject to the order of the depositor, without direct remuneration. 4* Deakrs or Customers are persons who have regular dealings with a bank by depositing therein their money and issuing against their account checks or orders. Transient customers, or patrons, are persons who use a bank for some specific service, such as the purchase of exchange, the collection of notes or checks, the issue of certificates of deposit, etc., but who are not regular dealers. 5. Officers* — The officers of a bank are those chosen by the Board of Directors to superintend and direct its affairs. Usually, these are a President and Cashier. Many banks have also as active officers, Vice-President and .Assistant Cashier. The necessity of these last named de|)ends upon the location of the bank and the character and extent of its business. 6. The President presides at all meetings of the Board of Directors, and is the executive heap! of the bank. He furnishes such information concerning its transactions as may be desired by the directors. From him is expected to emanate the policy which will govern the Ijank in its operations, and upon him rests the responsibility for its success. He must be active and influential in attracting depositors, and equally alert in declining to discount beyond the limits of safety and prudence. The general standing of a bank in the business world hinges largely upon the integrity and honor of its president. He should possess that happy equanimity of tem|)erament which will save him from inconsiderate action, combined with a ready knowledge of character that will give him the command of forces, both within and without the bank. 7. The Vice-President acts as the executive officer of the bank in the absence of the president. In some of the large banks in the large cities, the vice-president is a high-salaried officer, who not only shares responsibility with the president, but has greatly the direction of the running of the bank. In other cases he is chosen with a view to increasing the efficiency of the bank's service in a given direction, as the management of its credit department, country business, etc. 8. The Cashier is generally the executive officer of the bank. To him belongs the general supervision of various departments, and usually he employs the clerks and prescribes their duties. The correspondence of the bank is conducted in his name. He is appointed by the directors, and "li^StiiiimiMtiiifiV BANKS AND THEIR MANAGEMENT is directly responsible to them. He generally acts as Secretary of the Board of Directors, and as such he keeps a record of all business transacted at their meetings. His name, as well as that of the President, is required upon the certificates of stock. He signs the checks of the bank, which are issued for various purposes, draws drafts on correspondents, signs his name to bills of the bank which circulate as money. Upon him more directly devolves the task of building up the business, and making it profitable, and at the same time commending it to public favor. 9« The Assistant Cashier, where such officer is required, is generally responsible for the performance of specific duties, which would otherwise devolve upon the cashier. He is, in fact, what his name implies, an assistant to the cashier. He is appointed by the Board, and his official signature is recognized in everything, except in rejxjrts to the Comptroller of the Currency. IO« The Chief Qerkt in the absence of an active vice-president and an assistant cashier, has general management of the clerical work of the bank. He settles all matters not involving questions of policy which may be presented by the tellers or book-keepers, and sees that the routine machinery is kept in working order. II* The Check Qerk prepares a list of the paid checks of dealers preparatory to their delivery to the ledger-keeper or dealers' book-keeper. In large banks there are usually a number of such clerks, divided into groups, each group performing a particular part of the work. Thus, one group assorts and lists the checks which come from the clearing-house; another, the checks paid by the paying teller; and still another, those received in the deposits, and by the note teller for the payment of obligations held by the bank. Other clerks, known as " listing clerks," prepare lists of the exchanges which are to be sent to the clearing-house. !*• The Collection Qerk has charge of all the paper to be sent for collection or presentment at distant points. He sees that such paper is properly " timed," and that notices pertaining to collections are sent out properly and promptly. He examines the endorsements on paper passing through his hands, and keeps a record of a i that is received, remitted, paid, dishonored and returned. He keeps the collection ticklers and collection registers, and is responsible for the safe-keeping of the notes, drafts or other items left for collection, and when such paper leaves his hands his records must show at once what disposition has been made of it. 13. The Country Book-keeper keeps the accounts of banks, bankers and depositors at distant places. He receives from all such the letters containing remittances and other items for credit to their accounts. He has charge of the bank and collection ledgers, calculates interest on accounts entitled thereto, and makes the proper entries thereof. He prepares the periodical statements, and compares his own books with the reconcilement sheets and statements of other banks. He must keep a close watch over the payment of checks and drafts drawn by this class of customers and report any case of overdraft. 14. The Dealers' Book-keeper has charge of the city dealers' accounts. The credits for such accounts appear on the credit books as made from deposit slips, and such items as come from the collection and discount departments. The charges against the accounts are made from debit books in which are listed the checks of dealers paid by the paying teller; those received in the deposits or from the clearing-house, certified checks from the certification-book, and unpaid cash items returned through the collection department, notes paid by the bank, etc. The dealers' pass- l)ooks come to him to be written up, and if he does not make up the voucher-lists of canceled checks for delivery to the dealers and balance such books himself, he will see that it is accurately and promptly done. 15* The Ledgfer-'/Ceepers have charge of the balance ledgers, the number of which depends upon the extent of the ousiness and subdivisions of the work. Ordinarily, there is a balance ledger for each ledger con'.Jning accounts of dealers, banks and bankers, both city and foreign, these ledgers being practically duplicates of the regular ledgers. The ledger-keeper must be so familiar with the accounts under his charge as to be able at once to advise the teller concerning any one BANK BOOK-KEEPING that may be inquired about, and to refuse any checks which would cause an overdraft. This is particularly true of city dealers' accounts, which may be questioned at any moment. Aggregates only are carried to these ledgers, the itemized records being made in the ledgers kept by the dealers' book-keepers. 16. The Discount Qerk keeps the record of paper offered for discount and of that dis- counted or purchased by the bank. He has in his possession the greater part of all the notes held by the bank, which often represent the principal part of the bank's resources. He has charge of the offering-book, the discount register, bill-books, discount ticklers, and discount ledgers. From the bill-books and discount *ledgers are ascertained the average amount of a dealer's discounts and hfs liability as endorser of paper held by the bank. 17. The Note Teller usually has charge of all irregular business, but his real duty is to collect time paper on the day that it matures. He receives from the discount clerk the discounted notes, and from the collection clerk the notes that come through that department. Paper payable at the bank the note teller retains at his desk, and that payable at other banks or elsewhere in the city he sends out by messengers. He usually attends to all business with other banks in and out of the city. In some of the large banks this department is divided, giving the mail receipts and clearing-house items to the mail teller and exchange teller, respectively. He has general charge of the messengers or runners, and usually issues certificates of deposit. 18. The Receiving TeUer receives funds as they are presented and credits them on the pass-book, or bank-book, as it is generally called, of the depositor. He must examine the endorse- ments on checks and other cash items brought to him, count the currency and coin, and thus critically go over the deposit tickets before entering the amount in the dealer's pass-book. The receiving teller must be thoroughly posted about counterfeit and spurious money, and is expected to be able to detect a bad bank note the instant he sees it. 19. The Payingf Teller is the principal person to whom is entrusted the funds of the bank. To a certain degree, he is the sole custodian, though generally the cashier shares in this respt)n- sibility. Chiefly, it is the duty of the paying teller to cash the checks of the depositors when presented at his counter. Checks are often presented, however, not for payment but for certification. In cashing dealers' checks or certifying them for payment great care and much experience are required. The teller must know that the signature is correct, that there is a sufficient amount to the dealer's credit, and that the person who offers the check is entitled to draw the money. In certifying checks it is not so necessary to examine the endorsement as it is when they are presented for payment, but it must be known that the signature is genuine. National banks are forbidden by law to overcertify the checks of their customers. The paying teller must make up his statement each day and prove his work before he leaves the bank. The General Book-keeper is the custodian of the accounts and records that show the financial condition of the bank. Most of the data for his work come from the different depart- ments, and in fact his books show a summary of the entire financial operations. He has charge of the general debit book, general credit book, stock ledger, transfer books, statement books, general balance ledger, and general ledger. From these books are prepared the statements required by law to be made from time to time for the information of the Comptroller of the Currency, or of the Banking Deiiartment of the State, as the case may be; the weekly report to the clearing-house; and such daily reports as may be required by the officers of the bank. The general book-keeper must thoroughly understand the system of detail in use in all the different departments of the bank. He should ix)ssess a thorough knowledge of the principles of book-keeping, and his books and exhibits should be models, as to neatness and regularity. He should not be hampered with an unnecessary amount of detail work, but should take time to carefully scrutinize the general system of the bank, occasionally performing the duties of auditor in the different departments, thus furnishing additional safeguards, improving the service of the bank, and satisfying all reasonable demands of the bank's customers, and of the public. ii CHAPTER 11. THE SECOND TELLER. ai. The chief work of the second or receiving teller is receiving deposits of dealers. Many banks require all funds received to pass through the receiving teller's hands, thereby making his records a complete exhibit of all cash received by the bank. The plan of this set permits certain exceptions to this practice, as will be noted under the work of the third teller. aa. The Signature Book* — A person desiring to open an account with a bank, makes application to the cashier. If the cashier is satisfied to receive the account, he requests the applicant to write his name in the "signature-book." The signature-book contains columns also in which the cashier enters the applicant's address, occupation, and the name of the person by whom he was introduced. For the convenience of the bank, an additional signature is frequently required to be written uix)n a card, which caril may be filed in a case alphabetically arranged within the counter of the paying teller. Upon the signature or signatures so preserved only are checks to be honored. If the account is opened in the name of a firm, and it is desired that more than one person shall sign checks, the firm's signature must be left with the bank in the handwriting of the several persons who are to have authority to draw. The applicant is then supplied with a lx)ok of blank checks, a number of deposit tickets, and a pas.s-book. He commences his dealings by making a deposit ; the funds deposited and a properly made out deposit ticket being handed, together with the pass-book, to the receiving teller. aj. The Deposit Ticket.— Banks usually recjuire that the tleposit ticket must show the amounts in coin and bills separately, as also the separate enumeration of checks or other bankable items. A special column is sometimes provided for the separation of "out of town" items. Turning the pass-book face down, and placing the deposit ticket before him with a weight across its top, the teller counts the coin and bills ; if found to agree with the amount on the ticket he checks off the items at the left of the amount. Each check, draft, or other item, is then examined to see that it is properly endorsed by the dejx)sitor and as approved is checked off and classified as follows: If drawn on a bank which is a member of the Clearing House Association the clearing-house number of that bank is placed opposite the item instead of the check mark; if an out-of-town item (unless a separate column is provided on the ticket) a cross (X) is used, meaning "Foreign"; if |>ayable by a private banking-house, or bank not a member of the clearing-house the letter "O" is used, which signifies "Office," a term meaning "at a banking office in the city"; that is, the item must be sent by messenger and payment received in cash, or, more generally, by acceptance payable at a certain bank, after forxi of deposit ticket. BANK BOOK-KEEPING which it can then be returned and entered with the exchanges for the clearing-house the following day; and lastly, checks and drafts drawn u[x>n our own bank are indicated by the letter "H." [The expression "member of the clearing-house" is intended to include those "sub-banks" which, while not direct members, arrange to " clear " their items through some particular bank which is a member. The letters and symbols here used in checking the deposit ticket are purely arbitrary and differ in different banks. In some large banks where the deposits arc heavy the tellers omit all such marking, and merely check each amount by drawing a line through it.) The receipts from depositors then consist of five classes of items; 1. Coin and bills. 2. Checks, drafts, orders, etc., payable through the clearing-house,— generally designated "exchanges." 3. Checks or drafts payable out of town. 4. Checks or drafts payable by bankers in our city who are not members of the clearing-house. 5. Checks and drafts drawn on our own bank, 24. The Pass Book.— The teller completes the transaction by entering in the pass-book the date, his initial, and the total amount of the ticket, which book the dealer holds in his possession as a voucher, serving as a receipt for his deposit. 25. The Receiving: Teller's Records.— The number and arrangement of the books kept by the receiving teller depend ujwn the particular routine of the bank and the classification of the deposit items. In some cases this routine requires an exhibit only of the totals of the deposit tickets, which may be kept upon a sheet of paper and when footed at the close of the day's business, gives only the aggregate of receipts from all sources. In other cases the teller keeps a cash-book or blotter ruled with a number of columns for dividing the receipts according to their character, keeping the receipts in coin, bills, out-of-town items, clearing-house items, etc., separate. The principal purpt)se of these records is to enable the teller to obtain a proof of his receipts and disbursements at the end of the day. In this set the student will prepare a sheet upon which the names of the depositors will be written and the amounts of the tickets extended into columns corresponding with the prescribed arrangement of the dealers' ledgers — the first column containing the deposits of dealers whose names begin with the letters from A to L; the second, those from M to Z. In large banks the deposit tickets are usually transferred immediately to the ledger- keeper who enters the amounts in the balance ledger, after which they are listed upon the dealers' debit book, preparatory to posting to the dealers' accounts in the dealers' ledgers. a6. Listing.— The teller assorts the checks and drafts into four divisions: City; Foreign; Clearing House; and Bank. The clearing- house items are handed to the "settling clerk," who is usually the first as.sistant of the receiving teller and has charge of the clearing-house rack. The process of preparing these items for delivery at the clearing-house will be hereafter explained in the description of the Clearing House. Separate lists are made by the teller or his assistants of each of the three remaining items. The process of "listmg" these items is here suggested, and the aggregate amount of each class is given, which total amount is entered in Depoaitora i • A-L M-Z J. II. Newman I2Q3 II Cooper, Hewitt & Co. 64725 71 Henry Mailbrd 6319 89 Lord & Taylor 589 09 A. Iselin, Jr. 5481 75 Home Debita City Office Poreifn Office : ClMfing Honac 137 10 14 1 02 225 140 99 90 ': 7 96 1300 1 275 10 18 31 07 1839 33 1479 50 123 07 6 as 45 34j 60 29 05 ! 95 42 170 50 61800 274 31 53 1 3462 ro 1000 85 89 50 ! 500 18 40157 01 63 29 933 05 28604 15 *** *» • •« *• »•♦» 22 tt*** «• 258144 74 2034 99 179633 1373517 59 10 THE SECOND TELLER the receiving teller's proof at the end of the day. After being listed, the " City Office " items are handed to the note teller; the "Foreign Office" items to the collection clerk; and the checks on our bank to the ledger-keeper, who charges them to the dealers' accounts. It is imjjortant that the checks on our bank or "Home Debits"— as they are commonly termed— should be listed imme- diately and charged to the dealers' accounts without unnecessary delay that the dealers' balances may be known at any moment. aj. Deposits from Banks. — Deposits from banks, bankers, and individuals at other points sent either by mail or express properly come within the jurisdiction of the receiving teller, and have been included in the receiving teller's proof for this set. The description of the mail and its treatment has, however, been deferred until later, that the student may keep clear in mind the simple requirements of the second teller's department. 28* The Proof. — At the close of business each day, when the receipts have been received from all sources, the teller prejiares a proof. FIRST PERIOD. RECEIVING TELLER'S PROOF. Date 1. BILLS 40370 1. CREDITS. A-L 2. COIN 4.4-15 86 M-Z 3. CHECKS ON BANK 258 14-4 74 2. " Banks 992041 19 •4. EXCHANGES 13735 I 7 59 3. THIRD TELLER (Coll. Mall) 186327 33 5. CITY OFFICE 2034 99 4. FIRST TELLER 1817 36 6. FOREIGN OFFICE 179633 22 5. EXCHANGE ACCOUNT 12 52 7. FIRST TELLER (Special) 75000 i - The credit side of this proof consists of: 1. Footing of de|X)sit tickets. 2. Amounts forwarded by banks for credit, consisting of items similar to those deposited by dealers. 3. Remittances from banks in payment of "foreign office" items previously sent to them for collection. 4. Checks and drafts on other banks which have been cashed by the paying teller. 5. When checks and drafts are received in deposit for which a charge is made for collecting, the amount so charged is deducted from the deposit ticket; this deduction must be then credited under Exchange account The debit side represents the character of the receipts and their distribution : I. Gold certificates, legal-tender notes. National bank notes, and silver certificates. Crold, silver, and copper. Checks on our bank received in the deposits which are to be charged to dealers. Exchanges to be sent to the clearing-house received in deposits and from first and third 2. 3- 4- tellers. 5- 6. 7- Checks and drafts on private bankers not payable through the clearing-house. Checks and drafts to be collected from out-of-town banks. Coin and bills transferred to the paying teller during the day. (Numbers i and 2 are transferred at the emf of the day.) [Additional items will sometimes be necessary on the credit siess exchange. 64c Elliot L Butler. $4572.90.... Denny. Poor & Co.. $7840.26. .. Otis Brothers & Co.. $3741. 93. .New York Rubber Co.. $.4036.20.... A. Iselin. Jr.. $557..84. . . .G. G. Haven. $.3170.09. ... H. H. Swasey. $.897.90 Penn- sylvania R. R. Co.. $36238.. 7. . . Bulkley, Dunton & Co.. $2700. . . .G. W. Adams. $.,940.21. less exchange $4.92 •••• Andrew McLean & Co.. $.7948.63 .... H. Mills, Treas.. $9.45. less exchange. $,.38 Willi.im Clark. $65 50.. 2 ...Western Electric Co.. $95600. .. .Morton. Bliss &Co.. $39720.68. .. .Edward King $43-., 50 ...Gilbert Manufacturing Co.. $3.90.85.. Redmond. Kerr & Co.. $38797.71 ... .E. R. Durkee & Co $75400.... Knickerbocker Trust Co.. $2763450. . 2 .... Geo. C. Flint Co.. $.5748.25. . .United .States Leather Co.. $1.8637, .38.... John L. R.ker. $17000. .. Samuel Sloan. $35400. .. .Cooper. Hewitt & Co.. $78240.50 Chas. H. Baker. $6500. less exchange. $7.36. . . .Total Exchange credit. $ 31. Thifd 'Ponod,— December i — Received the following deposits, as per tickets : Pennsylvania R. R. Co.. $35127.06. H. H. Swasey. $2908.01 . . . .G.G. Haven. $.4281. .0. . . . A. Iselin Jr $6682.95. less exchange. $3.94... New York Rubber Co.. $23,47.3. .. .Otis Brothers & Co.. $263082' Denny. Poor & Co.. $8951.37. . . .Elliot L. Butler. $5683.0. ... J. Selwin Tait. $3328.87. less exchange $, 2, ....C. H. Pine. Prest., $4294.31 .• J- H. Newman. $750.29. .. .Lord & Taylor. $16.82.74. less exchange $738 . . . Henry Maillard. $1,925.38. Chas. H. Baker. $5627.9, . . . .Cooper. Hewitt & Co., $67,39.49. Union Mortgage Co., $35000. less exchange, $,4.30. .. VV. F. Wakeman. $5740. .. .United States Leather Co. $,75260.27. . . .Geo. C. Flint Co.. $,6859.36. . . Knickerbocker Trust Co., $252349.0, . . . .E. R. Durkee & Co $76324. 1 8.... Redmond. Kerr & Co.. $4.686.25. .. .Gilbert Manufacturing Co.. $428.. 96. .. .Edward King $5432. 61... Morton. Bliss & Co., $4,200. .. .Western Electric Co.. $872.8.39. .. .William Clark. $7500.. ' H. Mills, Treas.. $.1260. less e.xchange, $4.29. ... Andrew McLean & Co.. $25237.68 .... G. W. Adams $13800.29 ...Bulkley, Dunton & Co.. $2,950. less exchange. $2.39. .. .Steinway & Sons, $45000. .. Tota! Exchange credit. < 3a. Fourth Pexiod*— December j/— Received the following deposits, as per tickets : Steinway & Sons. $4.725.84 .... Bulkley. Dunton & Co.. $.9849.50 . G. W. Adams. $.7500. less exchange. $3.78. .. Andrew McUan & Co.. $3414879 • H. Mills. Treas.. $5400. less exchange. $4.9... U THE SECOND TELLER William Clark. $3.40 Western Electric Co.. $96129.45 Morton. Bliss & Co.. $62798.75 Edward King. $6243.72. . . .Gilbert Manufacturing Co., $,5972., 8. . . .Redmond, Kerr & Co.. $25,00. . . .E. R. Durkee & Co.. $42728.95. .. Knickerbocker Trust Co.. $27,000. .. Geo. C. Flint Co.. $24748.25 United States Leather Co.. $,8,750.25 W. F. Wakeman. $3.27.40. less exchange. $2.76. . . Union MortgageCo., $47238.20, less exchange, $.7.48 ...Cooper, Hewitt & Co., $452 io.,2. .. .Chas. H. Baker. $2925.40. less exchange, 97c Henry Maillard, $,22,0.50 Lord & Taylor, $2,758.76 J. H. Newman, $2,60.54 ...C. H. Pine, Prest.. $2,00. less exchange. $2.98. . . .J. Selwin Tait, $5725. . . .Elliot L. Butler. $2,49.75 Denny. Poor & Co.. $,4708.9, Otis Brothers & Co., $7945.90 New York Rubber Co., $28500 A. Iselin, Jr., $,7620. less exchange, $7.55 G. G. Haven, $35000 H. H. Swasey, $1000 Pennsylvania R. R. Co., $42140.07 ....Total Exchange credit, $____ 13 f I I I CHAPTER III. THE FIRST TELLER. 33. The first or paying teller is the recognized custodian of the cash, and the general disbursing officer of the bank. The incumbent of this position is charged with more resix,nsibility than any other i>erson in the bank with the exception of the officers. 34. Bank Checks.— The principal part of the first teller's duties consists in paying the checks drawn on the bank by dealers. This requires unremitting care as well as e.xjH-rience, and involves special responsibility, as a slight oversight or neglect may result in great loss. A bank check is an order of a dealer on a bank or banker for the payment of money. It should state or set forth several important facts and conditions: [gS o < u .^t^f^t^^Si^^^ FOR.\I OF BANK CHECK. 1. It Should sijecify the amount to be paid, and this should be both written in full and expressed in figures that there shall be no mistake or misinterpretation in jxiying. The amount written in words in the body of the check, however, will govern in case the sums e.xpres.sed by the words and the figures do not correspond. 2. It should give the name of a payee, and that may be a i>erson, firm or concern, or title of account, or si^ecify some purpose or object of payment. 3. It should be signed. 4- It should state if payment is to be made to bearer or to the order of the i)avec 5. It should be dated. ' ^ ' 6. It should be addressed to the bank or banker on whom it is drawn. The paying teller's chief concern is to pay out no money improperlv. This necessitates steadiness of nerve, clear judgment, a reliable memory, and abilitv to read 'character. One test ot his efficiency is readiness to recognize signatures without reference to the signature-book or card, as the case may be. He must keep in mind new signatures, powers of attornev, notices stopping payment of checks, drafts, etc., and his knowledge of the ,«rties presenting checks must be sure; otherwise he should require identification. To prevent overdrafts he must be constantly posted as to the average balances of dealers. In case of doubt he will at once refer to the balance-leilger keeper for exact information. In paying checks presented to him the teller, then, considers three things: first, the genuineness of the dealers signature; second, the identity of the person presenting the check; and third, the condition of the dealer's account. THE FIRST TELLER 35. Certification.— An inqiortant function of the first teller's department is the certifying of dealers' checks. In many lines of business, particularly that of brokers, transactions involving large amounts are daily accomplished which must be settled upon a strictly cash basis. To be comi)elled immediately to present a check and receive in payment the actual money would subject the payee to great inconvenience as well as loss of time. It is customary, therefore, for either the luyee or drawer to present it for certification, which is done by the paying teller writing or stamping across the face of the check the word "Certified," "Good," or "Good when properly endorsed" or some customary equivalent, and signing his name. The check may then be transferred or deposited by the payee with safety, for the certifying bank becomes responsible for the amount certified. This certification, however, does not guarantee the endorsements on the back of the check. The paying teller preserves a record of checks so certified, usually in a book prepared for this purpose, from which the dealer is immediately charged in the balance ledger. A form which is used for this purjKjse is here presented: NEW YORK, SEPTEMBER 29, 1897. Dealers A-L M-Z When Paid Amount WESTERN ELECTRIC CO. 97500 Sep. 30 97500 BULKLEV, DUNTON & CO. 14281 63 1 Oct. 1 14. 14281 63 JAMES G. CANNON 1 65000 Sep. 30 65000 MORTON, BLrSS & CO. 7482 97 Oct. 21 7482 97 H. H. SWASEY 85973 84 Sep. SO 85973 84 In large banks where such accounts are active, several checks being certified for the same dealer daily, the teller usually writes the names of such dealers in this book before the bank opens leaving after each name such a number of blank lines as he presumes will be required during the day. As the checks are certified he enters the name of the dealer in this book, followed usually by the number of the check, and extends the amount in the proper column. The other columns are used when the check has been returned to the bank, either over the tellers' counters or from the clearing-house, the amount being generally written in red ink. This is done primarily for the purpose of comparing the amount of the check when returned with the amount when i.ssued, for ,f it nas been raised -that is, changed to a higher amount than was originally written-it can be returned before closing hours and thus prevent the loss by the bank. This record is also convenient in determining at any time what certified checks are outstanding. in the taT' ^''"''' ^'^ Prohibited from certifying checks beyond the amount which a dealer has Notes and drafts of dealers, payable at our bank, are also certified same as checks, no distinction being necessarily made in the certification-book as to the character of the paper certified. In fact returned through the clearing-house the same as checks. 3^ CanceUation.-Checks and drafts paid by the bank are usually canceled by being thrust u,>on spindles which puncture and disfigure the paper. Different devices are used in different ^'TT^' '^^ "^^'"^ ^"'' character of the puncture may indicate through which department nr!J ; H '*'^' received; it being important to know whether a check was paid by the paving teller presented over the counters of the receiving teller or note teller, or received from the clearing-house. Ik.c ?7' f^ ""^ ^^^ Checks.-The paying teller keeps a book in which he or his assistant chick. "^"'''^^' f'^'' f''' ^'^^^ '"'^'^l^ «^ the drawer or endorser, keeping separate columns for checks on our bank and those on other banks. This is desirable for two reasons: first, that 15 I BANK BOOK-KEEPING reference may be readily made at any future time; and second, that the teller may easily check his work in case of a difference. 38. The Proof. — The paying teller's prtiof shows the character and condition of the cash on hand, and the receipts and disbursements during the day. FIRST PERIOD. PAYING TELLER'S PROOF. Date I. Cash 2503341 1 »3 I. National Bank Notes 2. Second Teller 138466 86 Gold Coin 560000 3. Third Teller 2666 03 Gokl Trrasnry CertiBcates 8670 4. Second Teller Special 75000 Gold C. n. Certificates 1230000 5. Balance from Clearing House I2CX)7 38 Silver Dollars Silver Certificates Subsidiary Silver Coin Minor Coin 1487 71500 6316 544 90 60 - Legal Tender Notes U. S. Certificates of Deposit 472685 IIOOUU 2. Treasury Notes Checks on Bank 105000 35661 13 65 3- Second Teller's Items I8I7 36 4. Third Teller's Items 76426 02 5. Balance to Clearing House _. _ The items on the debit side of this proof may be explained as follows : 1. Balance of cash on hand at the close of the previous day's business, as shown by his proof for that day. 2. Amount of bills and coin received from the second teller at the end of the previous day's business. 3. Cash transferred from the note teller which he has received in payment of "city office" and "cash" items of the previous day. (The sum of these three amounts equals the cash held by the paying teller at the close of October i, as shown in Statement 96.) 4. Cash transferred from the second teller at different times during the day. 5. Cash received from the clearing-house when the exchanges sent are more than those received. (Total exchanges sent, in this instance, $2,015,509.45. Received, $1,999,502.07.) The items on the credit side consist of: 1. Divisions of currency as the titles indicate. Clearing-house certificates and U. S. certificates of deposit cannot be used in payment over the counters, but are restricted to settlements at the clearing-house or between clearing-house banks. 2. Checks on our bank paid during the day, which are to be charged to dealers. 3. Checks on other banks paid during the day, which are to be collected. 4. Cashier's checks, certified checks on our bank, cashier's charge tickets, and city office items. 5. Cash paid to the clearing-house when the exchanges sent are less than those received. [.\dditionaI items may be added to either side to preserve an equalization of receipts and disbursements; for instance, U. S. Treasurer, Cashier Account, Cash Items. E.xchange Teller, etc., while some banks make a provision in the proof for " Overs and Shorts." It not unfrequently happens in balancing the cash at the end of the day that there will be a small •amount short, or a small amount over. An account is usually kept in the general ledger with "Tellers' Differences" 16 THE FIRST TELLER to which over and short amounts are carried, and when such errors have been located the corresponding debit or credit is made. Krrors of this character generally arise from the pressure incidental to rapid work. That troublesome quantity familiarly known to bank clerks as the "difference" is, perhaps, more frequently traceable to illegible figures than to any other source.] In this set the student will prejMire a list on \mper of the paitl checks of dealers in the same manner as required in receiving teller's work (25), and enter the certified checks in the certi- fication-b«>ok as previously explained (35), He will also prepare a proof supplying the amount of "Checks on Bank " from his own work. MEMORANDUM OF TRANSACTIONS. ^9* First Period. — Oitobtr .?— Paid checks of dealers as loUovvs: Redmond, Kerr & Co., $1000 Knickerbocker Trust Co... $45.90. $1654.10, $500. $22965.15 G. W. Adams, $758.13 ...Western Electric Co., $2259.79 Edward King. $36.60 J. H. Newman, $849.25 Geo. C. Flint Co., $3500 Elliot L. Butler. $6.45 United States Leather Co., $1300, $7500 Cot)|K;r. Hewitt & Co., $44750. Certified* the following checks: Ch;is. H. IJaker. $1975.50 Morton. ISiiss & Co.. $2471.87. $29000, $380.06. $9989. 19.... Gilbert Manufacturing Co.. $47>-95 A- Iselin. Jr., $1500 Slcinway & .Sons, 5362545 ...Knickcrlwcker Trust Co., $74'-5o. 5346o, $83409.97 United States Leather Co., $15610.50, $10000, $2400, $60000. 40. Second Period. — Xovcmbcr /—Paid cliecks of dealers as follows: Lord & Taylor, $181.40, $21.63. $328.92... Kni«:kcrl)ocker Trust Co., $178.36, $19450. $428.78 Andrew McLean & Co., $371.62, $7319. $1 292.68.... Uenny, Poor & Co., $18.93. $3712.50. $191.98, $37.42 ... W. F. Wakeman, $95.75.... United Slates Leather Co., $700, $8900.72. .. .G. W. Adams. $175.28, $500, $362.12. .. .E. R. Durkcc & Co.. $47.92. $25. $452.65. $326.98 . . . New York Rubber Co., $4700. $37.20, $195.42 .... Morton. Dliss & Co.. $26000 ....Redmond, Kerr & Co.. $91.40, $3500. $426.54. Certified the following checks: J. 11. Newman. $44-90. . . .G. G. Haven. $7000. . . .United States Leather Co., $1950. $45475. $7360.21. $17840.26 ...Knickerbocker Trust Co.. $12.73, $96782. $36950. $44760.29.... John L. Riker. $400, $11500. .. .Redmond, Kerr & Co.. $37.28, $460.45, $3174.28, $25278.45. .. .Cooper, Hewitt & Co.. $22600, $61.25. S376.98. $4978.25. . . .Bulklcy, Uunton & Co., $72800. 4-'« Third Period. — December /—Paid checks of dealers as follows: G. G. Haven, $1275.80 Lord & Taylor. $4278.40. ... Knickerbocker Trust Co.. $45.76. $31975. $1278.64. $138.29. ... Pennsylvania R. R. Co.. $4500 Redmond. Kerr & Co.. $47.38. $2700. . . Andrew McLean & Co.. $137.28, $478.47, $39.26, $37«-29. . . .Denny, Poor & Co., $495.80. $2750. $63.18. . . .Edward King. $4700, $31.26. $161.75. . • -New York Rubber Co.. $34725, $278.45. $72.69. $4100. Certified the following checks: Samuel Sloan. $4718.26 Chas. H. IJaker. $425.92. ... Union Mortgage Co.. $37.98. $4875. $5000.... A. Iselin, Jr.. $2574.63, $1600. .. .United States Leather Co.. $71950. $4i7.2'5, $5792.18. . . KnickerlK)cker Trust Co.. $8500. $437-5o, $16925.40. $19633.67. . . .W. F. Wakeman. $1238.75. . Western Electric Co., $45000. 4a» Fourth Period. — December ji—VmA checks of dealers as follows: liulkley, Dunton & Co.. $2340.25.... Andrew McLean & Co.. $173-34. $132.67, $3000. . . . Unite.l States Leather Co., $7500, $1433.08 ....Cooper, Hewitt & Co.. $840. $73-91. $780.98. ... New York Rul)i)er Co.. $1351.12, $95.40. $570.20.... Lord & Taylor. $7500. . .Geo. C. Flint Co.. $2190. $312.45 - . .Denny. Poor & Co.. $61.43. $1725.40, $3582.29. Certified the following checks: J. Selwin Tait. $475, $3165.12 ...Elliot L. IJuikr. $72.15. $147.32.... G. G. Haven, $45150. .. .Morton. IJliss & Co.. $13451. $15382. $17124. ... Redmond. Kerr & Co.. $15000 $92.73 . ■ .E. R. Durkee & Co.. $1 2300. $9463.25 . . . .C. H. Pine. Prest., $3000. • Leave fifieeu liue» lu CerUlicaiiuu Uook lor uuiouuMtrng checks which were certified previous to October 2 '^i^lL flPirJKMMiL' jj ''' THE DISCOUNT CLERK of each may ap|x:ar separately under the dealer's account, if the loan were made to a j>erson not a dealer, "Cashier Account" would be written in the "For whom discounted" column of the discount register and a cashier's check issued for the proceeds. The student will not make the entries in the general debit and credit books until the work of the general bookkeeper is given. $7352.69. Charge Credit New York, September 2, 1897. BILLS DISCOUNTED. Morton, Bliss & Co. Discount Exchange $7^90-93 J53't^ 8.58- WILLIAM M. BUSHNELL, Discount Clerk. FORM OF CHARGE TICKET. 46. The Discount Tickler.— As soon as a note becomes the proi^erty of the bank and has been entered in the register, the due date is written across its face, usually in blue pencil, and it is then recorded in the "iliscount tickler." This book is ruled in sections for each day in the year with the day and date printed or written at the top of each section, the left-hand page being generally used for city items and the right-hand page for out-of-town items. " ricklerizing" consists in transferring the items from the register to the tickler. After being ticklerized the notes are carefully checked back from the ticklers. The discount clerk must be familiar with the holiday and grace laws of the several States, and the dates of maturity must be carefully determined. These computations are generally verified by two or more persons. The footing of the ticklers up to the close of business, addetl to the amount of "past due" paper, must equal the balance to the debit of "Hills Discounted" in the general ledger. The notes are next filed away in pocket-books having compartments for each day in the month. The "Remarks" column of the tickler is used in noting the facts in case of ncm-payment or other irregularities. Payments are indicated by drawing a blue pencil line through the amount, followed, when required, by the clearing-house number of the check which has been received in payment. DISCOUNT REGISTER. Dated Where Payable When Due Amount Discount ] II ■ — ! 1 Exchange Proceeds S Date Time No. U 1 1 1 5 60 Days New York Fourth National Oct. '5 25460 15a OS 25307 V5 Aug. (6 43 v' ** Kansas City, Mo. Jan. 5 73S» 69 •S3 18 8 58' 7iqo ■*3 6 Sep. 2 4 mo.^ 125 y/ RoMon Huston, iBt Nat. Nov. afi 150000 "M3 75 ■oo i 148306 25 4» Auk. 28 9o4 8s y/ Chicago New York Oct. J« 14708 18 ■44 63 -J •4563 55 68 1 6 July 3« 3 mo. 59 •J »<)75» 87 1043 1 61 1 ' 1 108 58 i>>53<« 19 r II .^ t BANK BOOK-KEEPING SATURDAY, OCTOBER 2, 1897. No. Maker Discounter Amount Remarka 11400 J. W. O'Neill J. H. Newman 6oc» Protested $1.85. Chgd. Newman 12610 Milmine, Bodnian & Co, G. VV. Adams 14760 37 —61 1 1 562 Hatch & Co. Morton, Bliss & Co. 55000 — Ca.sh 13111 Ciilbert Manufacturing Co. E. R. I>urkee & Co. 42760 18 Chgd. to Maker "745 Metropolitan I>ank, liuffalo Samuel Sloan lououo -85 13120 Union Trust Co. Mutual Life Ins. Co. 175325 92 Certified — S4 13792 Hoatmen's Bank, St. Louis Vermilye Jk Co. 89140 Chgd. Boatmen's Itank 14113 Thomas Hill Thomas Hill I5UO I'rofit and Loss "3W 1st National, Chicago James Cj. Cannon 30000 Certified— 8 14293 Koch & Co. Calhoun, Kobbins & Co. 75735 Certified — 40 14354 Morton, Bliss & Co. Knickerbocker Trust Co, 18235 50 Chgd. to Morton. Bliss & Co. FORM OF DISCOUNT TICKLER. 47. Exchange. — Exchange is sometimes charged on discounted paper payable out of town. This jjractice is arbitrary, however, depending upon the size of the dealer's account and other considerations; but when charged, it is usually based upon the amount of time to elapse before the funds are received. The customary charge is equivalent to the interest upon the amount for the required time. In cases where correspondents remit on regular days of the week a longer time would be estimated than would ordinarily be required. For instance, if the item were collected on Monday and the regular remittance day of the correspondent was Thursday, three e.\tra days would be added. The number of days estimated may be written in the discount register to the right and above the "time" for which the paper was given. 48. Time and Demand Loans. — The foregoing remarks have reference to that kind of paper known as "bills discounted" which has been discounted for dealers or purchased by the bank from note brokers or private bankers,— the interest for the unexpired time l>eing deducted from the amount of the paper at the time the loan is made. Closely connected with the work of the discount clerk, though not necessarily a part of it, is that of the loan clerk who has charge of the two classes of loans technically known as "time" and "demand" loans. Time and demand loans differ from bills discounted principally from the fact that they are made upon deposits of stocks, bonds, warehouse receipts, etc., rather than upon the financial standing or responsibility of the borrower. Time loans are made payable at a specified date and the note is drawn to include the interest upon the sum actually loaned. Demand or "call" loans, as the terms imply, are made payable with interest whenever demanded by the bank,— the note being drawn for the exact sum loaned. Demand loans arise largely from the fluctuations of balances among brokers. Many brokers do business on narrow margins, borrowing money upon a given set of securities. These securities are taken to the bank by the broker and " put up " as collateral for a loan which may be called in at any time desired by the bank. It is the business of the loan clerk to scrutinize the securities as presented, and to watch the drift of the market quotations, that the value of the stocks and bonds so held shall not fall below the amount which the bank has loaned, which is usually from 70 to 80 per cent, of the value of the securities. Under ordinary financial conditions demand loans draw a low rate of interest, but the rate steadily rises as the mobility of money becomes restricted or uncertain. au THE DISCOUNT CLERK 49* Loan Tickets. — The loan clerk prepares a charge ticket at the time the loan is made, specifymg if the sum is to be placed to the dealer's credit— when made to a dealer— t)r if payment is to be made by cashier's check. These tickets should be signed by the loan clerk and counter- signed by the cashier, before the entries are made in the general debit and credit books. The detailed record of time and demand loans may be kept in books in which the particulars are fully stated, including a description of the collateral, and which may be ruled off as the loans are paid; but a special form for this purpose will be presented hereafter. National Union Banic New York. Credit Charge Time Loan No. /^a^6 (^44.^.^-*^^.^/^ /6y3^dy J FORM OF CHARGE TICKET (l.OANS). When time and demand loans are paid the loan clerk issues a credit ticket from which the general bookkeeper makes the proper entries in the general credit book: New York, August jr, 1897. Credit Demand Loans \ iio^ James G. Cannon Interest Time Loans 11125 William H. Rogers % iijo Kissam, Whitney & Co. lOOOO 35857 41900 87775 92 50 42 FORM OF CREDIT TICKET. SO. Collateral Securities.— The condition of the collateral of a bank is an index of its general management. These securities should be systematically arranged in envelopes, alpha- l)etically sorted, and placed in boxes that they may be in readiness at any time for examination, or final delivery to the borrowers. Frequent changes of collateral are quite likely to take place] but at no time should such securities be delivered to the owner without a receipt being taken by the loan clerk or cashier. 5I« Collection of Bills Discounted.— Discounted paper pavable at distant points is handed to the collection clerk a reasonable time before it is due, that it may be forwarded for at f I I BANK BOOK-KEEPING collection. Such paper should be in the hands of the correspondent at least a week or ten days before due ready for notice or presentment to the payer. The correspondent is charged with the face of the paper at the date of its maturity. Notes due in the city are handed t.. the note teller for collection, usually the day before thev are due. If not paid by three o'clock of the maturing day, they are given to the notary for protest. I he protest must be executed the same day that the n«.te is due, though the notices of non-payment to the endorsers need not be sent until the following morning. 5*. Rate of Discotmt.-Unless otherwise indicated, discount will be computed in the following mem.,ramh.m of transactions at the rate of six per cent. ; and for the sake of uniformity exchange w.ll be charged in all cases for the expressed time at the rate of six per cent, per annum] Daysof grace will be allowed on such items as .specified only. • The student will enter these transactions in the discount register and discount tickler a.s explamed beg.nmng the numbering with 15,60. City items may be placed upon the left-hand page of the t.ckler, and foreign items upon the right; a single pair of pages will thus serve for a month, al owmg such space for the foreign items of each date as is indicated on the cover of the ■ckler. In the following memorandum of transactions, if the paper contains no other endorsement than that of the owner, the endorser is not specified. MEMORANDUM OF TRANSACTIONS. * 5^* First Period.— Or/<)*^r .?-Offerings were accepted from tlie following dealers : CA^s H Rikfr- « .5.60. note for $.435 datecl at New York. Aug. 3. nt 90 days, signed G. G. Haven, en.lorsed by J.^es G CT^c^t\''^'I ^'--^'--l «ank. ^,y....Rc,imon.i, A'^r ^ a.-«,s,6,, H. E. Hutchinson's note tor $,5000. dated Aug. ,. at 4 months, payable at Syracuse. N. Y.; exchange 2 days . W F Wakeman t .5.6.. h,s draft dated Sep. .. at 60 days from date, for $6472.50. on N. W. flarris & Co. pav.ble^ C^^Tcag;^ exchange 3 days^ . . AVest.rn Electric G..-;t ,5.63. their note at 90 days from this date fo^ $25000 n avor oi an.payable at the Nafonal Union Bank, rate 5 percent. . . SUin^ay L S.„s-^ ,5,64. note f^S W da ed Bo^rias?"' ?'■ '' ^' ,' ""T'- ^'^"^" '' ''''"• ^- "°^''"' '^^^^"^'^ - ^-'-*' Bank of^ReTrnpt In Boston. Mass.; exchange 4 days, chscount rate 4'4 per cent. . . .4n./rew McUan &- G»._« ,5,65 6o-d.iv note for $,474..6o dated at Chicago. Sep. 3. payable at Bank of California. San Francisco, s^d J. V plrwe,! Co.. endorsed by Cornehus N. Bliss; e.xchange 8 days. . . .f///./ Z. ^«//«r_jj ,5,66. draft for $,6000 datid StTout'exchT "?''';" ^<-^:i'" nry Goods Co.. accepted Aug. 39. payable at Boafmt::^' B l St. Lou.s. exchange 4 days (grace). Also. J ,5.67. note dated Aug. 38. at 4 months, for $493306. signed by Taylor & Galpm. payable at Atlanta. Ga.. endorsed by James W. English (grace). . . .« .5.^ Cash er's check Natifnal" Hnl^n u t~^ '1'^; "°'^^ '"'' '''°'" '^''' "''^^^ ^°'" ^^3.06. signed by G. W. Adams, payable a Na ,ona Union Bank Bu/k/ey, Dunton Sr- Co.-^ ,5,70. their note at 60 days from this date for $.44908 98 !J^/r; ri •?",^"^^«^'^" "T---^ C- '-^ f-- of and payable at National Union Bank, rate 5 per tt^"^* K p . n *^'^7,'' "°'' ^' 90 days from date, his favor for $450. signed by A. S. Frisid. endorsed Sen r't?"' "r ' rZI'^' ^'^""^ Bank....>^„ Z. I^,^Jtrr-t^S^l note dated at Boston. Masi' Sep. 25. at 4 months, for $,600. signed by C. E. Stevens, payable at Hartford. Conn.; exchange 3 days wTtk ' 1 fu^'P' "°'' ^^'"^ ^"^- '^- ^' ^^•'''^''- T'"'''*' «» 4 •"«>"»»'». fo' 578900. signed by UH. Thomas, endorsed by Sunset Compress Co.. payable at City National Bank. Houston; eXnge 7 .Ia>7 rate 4^ per cent. («race • CsAier Account-^ .5.74. note at 30 days from this date for $.2500. Signed by H-O Company, endorsed by Samuel Sloan, payable at Kountze Bros.. New York, rate J % per cent. nnmhTr i"'" r^ cliscounted should appear upon the discount tickler, payable in this city to-day. the S^c.oi « .!^ r'lK "'T * ^°- ^'- ^''- '^''^'"^- 5'+76o.37 . . .j{ ,,563. Hatch & Co.. Morton. Bliss & B^nk bXio'sI. '«;i c '^'"'""^"^'"""S C°- ^- ^ Hurkee & Co.. $42760.8. ...» ,,745. MetroHitan Bank. B, ffalo. Samuel Sloan. $,00000. . . .J ,3,30. Union Trust Co.. Mutual Life Insurance Co.. $,75335 92 M.Hnn.l rr r.' 'V^' ''°""' ''^'"'"''>" * ^°' 5«9.40. . . .8 ,4..3. Thomas Hill. $,500. . . .«n399 Firs; t ,^ TMort • .u"^:* ^""" ""• '''""°"- *^°°~ • « '4=93. Koch & Co.. Calhoun. Robbins & Co . $7^25. . . Jf ,4354. Morton. Bliss & Co.. Knickerbocker Trust Co.. $,8235.50 (46). 54- Second Period.— A,,t/m*^r /-OfTerings were accepted from the following dealers: 7 //. A'.'«'///a«-Jt 15.75. his note at 30 days from this day in favor of and payable at National Union Banki THE DISCOUNT CLERK $5000 EHiot L. Butler— t\^\l(i, note signed by Ezra Corning, endorsed by James G. Cannon, dated at Tonawanda. N. Y., Aug. 3,. at 4 months, $30000; exchange 5 days Cooper, Hewitt &* C.— 515178. draft at 90 days' sight, accepted October 24. payable at Galveston. Tex., by Ball Electric Light Co., $75000; exchange 8 days (grace) William Clark— J 15179. note signed by Goldberg & Co.. endorsed by Michel & Bros., dated at Omaha, Neb.. Sep. 39, at 60 days. $900; exchange 7 days (grace) Morton, Bliss fi" Co.—^ .5.80. their draft on R. E. Anderson & Co.. at 30 days' sight, accepted Oct. 29. payal)le at National Bank of Commerce. Tacoma. Wash.. $150000; exchange 9 days (grace) Cashier Account— iH 1518,. note favor E. A. McAlpin. signed by George W. White. payal)le at Washington, D. C. dated Oct. 31, at 3 months. $16345; exchange 5 days Gilbert Manufacturint; Co.-r- 8,5182. note signed by Lee. Tweedy & Co., dated Sep. i. at 3 months, payable at Chase National Bank. $287,6.23 7. Selwin Tait—'S, 15,83. his note at 60 days from this date in favor of and payable at National Union Bank. $3500 New York Rubber Co.—% ,5,84. note signed by Edward King, dated Oct. 1. at 2 months. payable at National Union Bank. $15000. rate l% \ytv cent G. G. Haven— 'S.xixZ'^, note signed by Saginaw Milling Co.. endorsed by Isaac Bearinger. dated Aug. 28, at 3 months, payable at Bank of Saginaw. Saginaw. Mich.. $,2700. rate 4 per cent.; exchange 7 days (grace) Cashier Account— %_ ,5,86. note signed by Eibridge Talmer. President, and C. E. Richardson. Cashier, City National Bank. Paducah. Ky.. favor Central Trust Co.. New York, dated July 22. at 6 months. $50000, rate 5 per cent.; exchange 6 days (grace) E. R. Durkee &- Cfl.— 5 ,5187, their draft on Ross & Carnegie, at 90 days, accepted Oct. 2. payable Freehold Bank. Pittsburg. Pa.. $4233.91; exchange 5 days. . ..Redmond, Kerr Sf Gj.— J 15188. note signed by Union Sand Co.. endorsed by Peter Nicholson, dated Oct. 14. at 45 «lays. payable at American Exchange Bank. St. Louis. Mo., $20000. rate 514 per cent.; exchange $35 (grace). . . Cashier Account— 'ix'^x^, F. W. Allen's note, our favor, endorsed by F. I). Tappen. dated Oct. 22. at 40 days, payable at Gallatin National Bank. $17500. Also. Jf '5.90. Kissam. Whitney & Co.'s note, dated Oct. ,2. at 50 days, favor A. D. Juilliard. payable at 35 Wall Street. City. $47318.78! rate 4 per cent G.W. Adams— 'Xx^x^x, his note dated to-day. 90 days, favor Fifth Avenue Trust Co.. $5000! 55. Third '9 vnxA,— December /—Offerings were accepted from the following dealers: Elliot L. Butler— % ,5,93. note signed by Klondike Mining Co.. payable at Macon. Ga.. dated Sep. 39. at 90 days. $,2450' exchange 4 'lays (grace). . . . Cashier Account— t^x $193. note signed by Stern Brothers, endorsed by Goldman.* .Sachs & Co.. dated at New York. Nov. ,6. ai 45 days, payable at Fourth National. $78935. rate 4J^ per cent. . //. //. Swasej'—Xxsi94.noic sign.d by Wallace Mortimer, endorsed by Sheldon & Co.. dated at New York Nov. 22. at 2 months, payable at Portsmouth. N. H.. $,645: exchange 5 days (grace) .... AVw York Rubber G».— 5,5,95. their note dated to-day at 30 days, endorsed by Samuei Sloan, payable at National Union, rate 5 per cent.. $,45000 . IVilliam Cark—t .5.96. Ids draft dated at New York. Nov. 8. at 3 months' sight on Houston Evaporator Co.. accepte.l Nov. ,7. payable at Houston. Tex.. $450; exchange 8 days (grace) Denny, Poor &* Cfl.-tlSi97. note signed by S. Keith, endorsed by J. T. Howell, payable at NashviUe Tenn dated Oct. 26. at 4 months. $4.60.2'-; exchange 4 days (grace). . . . Ca.hier Account-^ ,5,98. note si-ned by Kumfort Shoe Co.. endorsed by Dix & Phyfe. payable at Council Bluffs. Iowa, dated Nov. 28. at 30 days $3.70.95; exchange 7 days (grace). . . . jr. H. Newman-^ 15,99. note signed by Nathan P. Dodge, payable at New Albany. Ind.. dated Oct. 29. at 60 days. $375; exchange 5 days (grace). . . . Chas. H. Baker-^ x^zoo note signed by J. S. Fleming, endorsed by M. L. Reid. payable at Jefferson Citv. Mo., dated Nov. 22. at 2 mdnths $2382 76; exchange 7 days (grace) ...W. F. Wakeman— ^x^zox, his draft dated at New York. Nov. ,9. at <^ days' sight on Suburban Transit Co.. accepted Nov. 28. payable at Wheeling. W. Va.. $13400; exchange 4 days (grace). . . .Andrew AfcLean &* Co.—t ,5202. Hugh Glenn & Co.'s note, payable at Utica. N.Y.. dated Nov 26 at 35 days, rate 5 per cent.. $42952.85: exchange 3 days. . . .Redmond, Kerr &^ O.— Jf ,5203. their note at 93 days, dated at New York. Dec. ,. payable at National Union. $28000 .... Crtj/«Vr ^rr,)««/-:J 15204. note signed by Biermann. Heidelberg & Co.. endorsed by Denscomb & Jennison. payable at National Shoe and Leather. City, dated Dec. I. at 30 days. $6472. . . . Gilbert Manu/acturimr Co.—$ ,5205. note signed by Voigt Herpolsheimer & Co.. endorsed by H. J. Hollister. payable at Grand Rapids. Mich., dated Nov. 10, at 48 days' rate 5^ per cent., $,63,2.50; e.xchange 4 days (grace). 5*» Fourth Period.— /?^rec. 19. at loo days. $3500; exchange 9 days (Rrace). . . . Ca.AiVr AccouHt-t^^^^^ note signed by Smith. Gray & Co.. payable at Bank of New Amsterdam. City, dated Nov. 25 at 2 months' rate 5J4 per cent $4,258.60. ...H. .»/,n7/W_jJ ,52,3. note signed by C. O. Willis, dated Dec ,9 at 60 days' payable at Vicksburg. Miss.. $19400; exchange 7 days (grace). . . . Gilbert Manufacturing Co.-t i^2x± W l' Harrison & Co. s note, endorsed by R. H. Lynn, payable at Leesburg. Va.. dated Dec. 17'. at 2 ntonths $,7oo- exchange 5 days (grace).. Zm/ 6- 7aj./.r-}{ 152.5. their draft dated Dec. 3. at 3 months" si^hr on E. r.. Reade. accepted Dec. 8. payable at Citizens' National. Raleigh. N. C. $,428..25; exchange 5 days 7 Selwm Tatt-txS2x6. note signed by Brooks Elevator Co.. endorsed by Robert Moody, dated at Fargo N d" Dec. 23. at 30 days, payable at Aberdeen. S. D.. $2968; exchange 7 days. . . . Cashier Account-^ ^^M, note signed by John Wanamaker. dated Dec. 3.. at 60 days, payable at National Union, rate 4?^ per cent. $50000 ....Umon Mort^^a^r, c,>.-jj ,52.8. note signe.l by Salem Realty Corporation, dated Dec. 7. at 3 months payable at Salem. Oregon, rate 5 per cent.. $35500; exchange 9 days. . . . Cooper, Hewitt Sr- Co.-t .5219 not^ signed by Garden City Commission Co.. endorsed by M. Malarin. payable at San Jose. Cal.. dated Nov io. at 4 months. $19478.34; exchange 9 days. ' ^ I li I CHAPTER V. THE COLLECTION CLERK. 57. As his title suggests, the collection clerk takes charge of those papers which are left with the bank for collection; at least such as are to be sent out of the city for collection Paper payable m our own city usually passes through the hands of the second or third teller as the case may be excepting sight and time drafts, which are first recorded by the collection clerk and afterwards delivered to the third or note teller for collection by messenger. 58. ForeigTi Checks.— Most banks make it a rule when dealers wish to deposit checks payabe out of town -known as -foreign office" items-to charge a small fee for collecting. Ihis fee IS deducted from the total of the deposit ticket at the time the deposit is made, as explained under the duties of receiving teller (28). 59. Time Coaections.-Notes, sight and time drafts, coupons, etc., left for collection by dealers are entered in the back of the pass-book or in a separate pass-book as may be required and are not placed to the dealer's credit until the returns have been made. When a large number of collection items are presented by a dealer, it is customary for him to prepare a memorandum rece.pt containing a descnpt.on of the items, which may be signed by the teller and held by the dealer instead of the pass-book record. Some banks send all paper payable at distant places direct to a bank at the place where the same .s payable. The additional correspondence required and the lack of knowledge concerning Tlr^Tt ""^ "^ '^" ^^"•'^ ^^•''^ ^^"^^ ^^ ^^""^'^^ '"*" ^^^""«« -ith us, render this plan impracticable in most casea ' 60. Correspondents.— The advantages accruing from the system of having special agents or correspondents with which to transact our business, instead of entering intoUiness relations w.th every individual bank whose checks and drafts may be received by us, are evident when we V^^lrZ IV" I '?"'^' f ' """"'^ ^" ^""'^ ^"^'^ P^P^^ f"-- collection pavable at several hundred banks located at almost as many different points throughout the country By this arrangement our correspondence is reduced to a minimum, and we are relieved from ascertaining the financial standing of the several individual banks. The charges to be made by correspondents for collecting cash and time items remitted to them are usually governed by contract. In some cases the correspondent agrees to remit at a R.ven day once a week at par; that is. it counts the use of the money so collected as an equivalent to a collection charge. Others agree to remit at stated intervals, deducting a uniform charge at remTtlT'' '."'• . ^" ")"'^' ''' '""^"' '''' «' ^^^'^^"^'^ "'^^^-^ '^ -^^ '- -^ the titne of rem.ttance. Some banks make no charge for cash items, but charge for time items at such rates as may be agreed upon. 61. Reciprocal Accounts.-The term "reciprocal accounts" refers to agreements by which correspondents are to keep balances with us on deposit against which they may draw drafts if in re urn we will send them our cash and time collections upon points in their vicinity, for the agreed'TJn '^'^ """' '" '"''''' '""'' ^^"""^^^ """"^ '""'' ^' '"'^ ''™'' ^ "^^ ^ '""'"^"y ir.,..**' CoUection or No. 2 Account.-Correspondents, as a rule, require two accounts to be Kept: one known as a general account, which is credited with all cash item.s-money, city and foreign checks and drafts, etc. -and interest on its average monthly balance, and is debited for an drafts drawn against it, returned cash items previously credited, and such other payments or irmisfers as .t may advise from time to time; the other, technically termed a " collection " or ^o. 2 account, is debited for all cash items sent for collection, advices of time collections ♦5 BANK BOOK-KEEPING paid, and all other charges for which instructions have not been sent requiring them to be debited to their general account, and is credited for all remittances which are in payment of items which have been previously charged to this account. The credits to the collection account consist of drafts upon some New York bank, or upon the general account of the correspondent which in the latter case, would cancel the collection account by reducing the interest-bearing balance of the general account. 63. Collection Banks.-In addition to the banks keeping reciprocal accounts with us and who also make collections for us. most banks find it necessary to send cash and time items payable at other places received both from depositors and correspondents, to still other banks for collection. Collection banks make such charges as may be agreed upcm, and remit immediately or at stated intervals as provided in the contract. These banks differ from reciprocal correspondents from the fact that they keep no general account with us and merely act as agents for their territory They are debited for items sent and credited for returns, the check in payment being New York exchange. Their account then will necessarily balance when all returns have been made. 64. RcmittaiKe Letters.— When items are sent with the desire that immediate returns shall be made upon their collection, the usual form of letter is as follows: CHAS. B. FOSDICK, P„sW. JOHN L. RIKER, V.„-I>.«.t. j. s. CASE. C*,m«. Capital, $300,000. ^ Surplus, $600,000. Second National Bank OF THE CITY OF NEW YORK. Cashier. ^«'i<>'»rt/ iBank of (Sommeice, St. £ouU. DTBo, New York, &>*3. /, 1897. Dear Sir: I enclose for Collection and Returns as stated below. Yours truly, J. S. CASE, Cashier. Number Payer ■ _ — 1 Amomit i4^ dGamilton Bhcftigetatoi (So. t%. ^, £ackland ^65 70 THE H. B. Date Received Drmwer EndorBcr Payer Wb«r« Payakte iSq7 Apr. . May I '7 2 s The 11. B. Clajlin Co. Trowbridge &* Co. //. 7. I/ollister Charles Bard /tice, Stix &' Co. Spring &» Co. Joske Bros. Howe b' Stettm St. Louis, Afo. Grand A'afids, Mich. San Antonio, Texas. Portsmouth, N. H. Ft >RM or THE COLLECTION CLERK In forwarding items to corres,>ondents or to collection banks who remit at stated periods the sums so collected to be held by the collecting bank until its regular remittance day, the'lw . g form IS in general use: ■'' •"•"'» mg The Fourth National Bank OF THE CITY OF NEW YORK. ». COWARO SIMHOMS. MEtT. *lk%. a. CANNON. VICC-MUT. C. N ^«TTCIIW>N, CMMtFR. B. O. WNOCNHIU., AMT. CAaMWII. N E W YORK, ™ f f. 1 89. 7, Sdwazd Qy. ^tcAktey, ^ ^ , . ^ iisq., Cashier, ^odton, dUnaAA. Dear Sir: Enclosed please find items for Collection for our account as stated beloto. Yours respectfully, CHAS. H. PA TTERSON, Cashier. nIJ7.u"T" t?""?' ^""""^"^ '^"" '''"" "'"^''- '""''''"' '■« ^^''^ ''^'^'r. Items lUnr! /T'^ -" "'"'"""^ ''""''^ '' '''"'"'' "" '""' ^"'^ «'>' f'^'^i M the con. ventence of parties. "^ c^cyton iOtif goodA 60, Oiy. (JIB. uGume, <^alem afpzinqman Sf (Bo., (Soncoxd So 3.3 The only description of the paper necessary is the name of the payer. In some cases the date of the Item and its number are also given, but such information is nit essential f«lH 1 ""? V "'^ '*'"^''' ^''' '^'^ ''"'■'^^'^ ^'"^'^ ^'^ P^*"t«> i" duplicate and perforated at the folded edge that a carlx,n sheet may be placed between them. By using a .u„' ^i'^le CLAFLIN CO. Date Time Do* Amount Exchange \ When P aid Remarks Apr. May r 17 3 3 mo. Sight bods. gods. Junr June Aug. 4 -'S 4 10460 4500 '75 '^43 60 98 to 5 I 46 63 »7 Apr. Aug. 7 •27 7 S Returned June 2g 1 (pj \ Protest fees, $1.2^ COLLECTION REGISTER 27 M' BANK BOOK-KEEPING BOSTON. MASS., NATIONAL Date Sent /*7 23 27 Drawer I'nion Aforh^as^c Co. KnkkerhMkfr Trust Co. Atlas Cement Co. Payer Ifo7it ^ Stetson Qmroy &' Co. New F.n;j;hmJ Trust Co. E. Z. Drone WlMr* PajraMc Portsmouth, A'. //. Salem, Mats. Boston AiKktitmi, Me. r«r WhoM Credit The II. /v. r/,/y*/« Co. Morton, Bliss ^ Co. Knickerbocker Trust Co. IV. F. IVakeman FORM OF writing will thus prepare two copies, one of which may be preserved by the bank, thus supplanting the necessity of keeping a separate register of these items. The letter, in this case, should give more complete nif..rmation, and a form suggesting this treatment here follows- NATIONAL UNION BANK MUTUAL LIFE BUILDING }2 NASSAU STREET. New York,. ^. ^. Street, Saq., Jos. C. Hkndrix. President. G. G. Havbn. Vice-Presidenc. Edward O. L«ich. id Vice-Prrnideni and Cashier. H. H. SwASBv, AsaisUnt Cashier. 95^v. 10, .189X Your favor of_ (^fiica^o, QfU, 8th .received with enclosures. Please collect the enclosed for our account. Respectfully yours ^ E. O. LEECH, Cashier. ^"OTEST AND RETURN AT ONCC IF NOT PAID PROM MAKER WHUE PAYABU /j/ oGaitfoxt) &. &G, ^ine ST^DotAe Sc Go, OoeJemption \Dhoma.) uGunt UDimouz cS" &o, young cS- Shield John S)ewolf ^anhetd' 9l5ational lAt National JoUet, SlL SDclavan, *V?iA, 13,5 ^0 69 Owing to the large number of cash items-checks and drafts— received from dealers among their deposits and from correspondents for collection and credit, we have assumed that this latter form of remittance letter would be used in this set for cash items, thus avoiding a large amount of work which the student would be compelled to do in registering these items as sent to other banks for collection. 65. Colkctioa Register. — That the student, however, may understand the process of registering collection items we have adopted that plan for all notes, drafts, etc.. received from dealers and correspondents which are to l)c sent to other banks for collection and credit. Notes and drafts for collection are timed across the face in the same manner as explained under duties of discount clerk (46). excepting that a red jiencil is generally used to distinguish collection items. 38 THE COLLECTION CLERK BANK OF REDEMPTION. Date Time Due Gross Amount Exchange Net Amount When Credited Remarks *ajr — May 3 gods. Aug. 4 »i43 98 / 87 2242 if Altf^r. 7 June ^ 60 " «t 38 3300 3 30 349^ 30 " 30 J>^iy 36 t4 Sight 60 ds. Sep. '3 44793 '38 iS 73 44 So 44730 38 July 3' Returned g/20, fees, S/.4J REMITTANCE REGISTER. Instead of entering these items in a miscellaneous manner as was done in the discount register, it IS more convenient to record a large number of items received from a dealer or correspondent under the separate title of their account. Such dealers and banks as have but few collection items may be entered under the general title of Sundries, in the back part of the collection register. 66. Collection Tickler.— As in the case of bills discounted, items for collection are ne.\t recorded in the tickler. The same arrangement of space may be preserved as in the discount tickler, though the following headings are required: Number. Maker, For Whose Credit, Where Payable, Amount, and Remarks. It is not the general practice to number time collection items unless the paper already bears a number, which number may be preserved. The name of the paver of the paper gives the clearest description of the item. For the aid of the student, however, in identifying collection items as payments are advised and for other references, we have deemed it expedient to number all time Items consecutively as received. Hills discounted which appear in the discount register need not be renumbered, but when sent away will preserve their discount number. ^. Remittance Reg:ister.— Paper payable in the city the collection clerk delivers to the note teller for collection, usually the day before it is due. That payable out of the city must be sent to some correspondent a reasonable time before it is due. The name and address of the corre- spondent to which time items are to be sent for collection are placed at the top of a page in the remittance register and a number of pages allowed for its use, that all items collected by this corresiwndent may be consecutively entered, thereby securing e.x|>ediency in remitting and convenience in charging to the correspondent when payment has been advised. 68. Endorsement.— Paper sent away for collection must be endorsed payable to the bank to which It is remitted. The Supreme Court has handed down a decision which holds that a (jualified or restrictive endorsement on a check or draft de|x>sited for collection, such as, " For Collection," "For Deposit "or ''For .\ccount of," is not binding on the remitting bank; that is to say, that with this form of endorsement the bank that remits the item for collection does not guarantee the correctness and genuineness of either the prior endorsement or the amount. The New York Clearing House requires its members to guarantee such endorsements by an added endorsement This practically enforces the use of a full endorsement in all cases. For their principal corresiJondents most banks use a rubber stamp containing the entire endorsement. In other cases a blank hne is provided in the stam]) in which the name of the cashier of the bank to which the item is sent is afterwards written. The two forms follow: Pay First National Bank, Chicag:o, or Order, National Union Bank, New York. E. O. Leech, Cashier. E n do fwmen U piaraotccd. Pay Cashier, or Order, The Fourth National Bank, New York, September I, 1897. Chas. H. Patterson, Cashier. * BANK BOOK-KEEPING Pay Bank of Mauston, Or Order. Charles H. Grote. Pay American Trust & Savins:s Bank, Qucag^Oy niincMSy OrOftJer. Bank of Mauston. JcH. T. Heath & Co. The acconij>anying illustration pre- sents the endursements of a check drawn on The Fourth National Bank, New York, by Bliss, Fabyan & Co.,* and remitted to Charles H. Grote, Mauston, Wis. It is deposited by him in the Bank of Mauston, which being a Banking Firm, signs its endorsement by the name of the firtn, and forwards the check to its Chicago correspondent for collection. The American Trust & Savings Bank remits it to the National Bank of the Republic, New York, for collection and credit to their account. The National Bank of the Republic sends it to the New York Clearing House, where it is included among other checks and drafts given to The Fourth National Bank in exchange for checks and drafts drawn against the National Bank of the Republic. The Fourth National Bank charges it to the account of Bliss, Fabyan & Co., and returns it to them as a canceled voucher at the end of the month. 69. Advice of Payment.— Time Items are not charged to the account of the bank to whom they have been remitted until an advice of their pay- ment has been received, e.xcepting bills discounted, which are charged at the date of maturity. Where items are not advised within a reasonable time, however, they are usually charged up and the endorsers credited, subject to reversal if its non-payment should sub- sequently be reported. Some banks attach a slip to all time items sent away specifying for whose credit, when sent, payer, and amount, which slip is to be stamped by the collecting bank and returned as a report of its payment. A special letter of advice is usually senf, however, stating the amount of exchange charged and the proceeds of each item, from which the proper memorandum is made in the remit- an'credtd ' Tu '"''' 'V ""'. '^ ''' ^°"^^''°" ''^'^ '"^'-^'"^ ^^« — ^s to be debited The pir ilur w "r^ "' •'"'"' '^" ^'" '"'"'"^^ ''^ P-^"**-*^ «" ^^e following page. 'rr othe the a "T"''' T '"" ^'""*="'"-" '-'"^ charged in one de,,artment and cred.ted the other, the account merely being used as a check on the two de,>artments Pay to the Order of the Natl. Bank of the Republic, N. Y. Sept. 20, 1897. The American Trust & Savings Bank, Chicag:oy IlL J. R. Chapmaiv Cashier. Received Payment Through the New York Clearing House. Sept. 22, 1897. National Bank of the Republic. Charles H. Stout, Cashier. J FORMS OK KNl><)kSK.MKNTS. THE COLLECTION CLERK Collection Clerk's Time Credits. The Fourth National Bank OF THE CITY OF NEW YORK. S New York, 189 CHARGE. Time Collections CREDIT. Sundry Ledgers as per back of ticket For Foreign Time Collections credited dealers this day „ Dollars Collection Clerk. 70. Letter of Advice.— The customary wording of a letter of advice is given below. It should present the main facts in convenient form for record, and should not be encumbered with unnecessary explanation or other irrelevant matter. The letter of advice is the voucher from which the collection clerk makes the proper extensions in the collection and remittance registers. He also authorizes the net amount of the described items to be placed to the credit of dealers, ox payment to be made to transient customers, as the case may be. The First National Bank. CHAS. If. PATTERSON, Esq., CashUr, Fourth National Hank, New York. Chicago, III., Aug. j/, 1897. Dear Sir: Your account has credit for the proceeds of Collections as stated below. Yours respectfully, RICHARD J. STREET, Cashier. Your No. or 0«tc 7 1 it f459^ Payer A\>yal Trust Co. E. C. Deane Place Chitago Racint, Wis. Amount 39475 4Jgo S7 Charges Proceeds I 39 S 48 36 J943S 4^8j 62 St 71. Letter of Advice and Remittance.— The payment of cash items is usually not advised until the proceeds are remitted. The letter of remittance from the collecting bank states the payer of the item, the amount, and the total exchange deducted. If the pavment were to include time Items which have been previously advised, the net amount only of such items would be included in the remittance. A letter of advice and remittance is given on the following page, and requires no further explanation. BANK IJOOK-KKEPING lameu^. '^/igad^^et^ f I.KTTKR OK AlJVICE AND REMITTANCE. 32 THE COLLECTION CLERK 7a. Collection Rates.— Where 110 sixjcial arrangement is made concerning cliarges for collection, the current rate of exchange usually governs. This will de|)end ui)Gn a nun*Iber of things, first among which may be mentioned the movement of merchandise and natural products. For instance, during the months of October, November, and December, at the time when New York checks are being sent in payment of shipments of cotton, the Southern banks will take collection items from New York and collect without charge, owing to the fact that they have a large balance on deposit in New York which they desire to reduce. But later on in the season when the conditions have been nearly reversed the Southern banks will advance their collection rate, often reaching as high as one-fourth per cent. Other banks charge arbitrary rates and having no fi.xed scale will charge such amounts as they deem consistent with the circumstances From these illustrations it will be seen that collection rates are subject to changing conditions •Ihrough the Eastern and Middle States the rates are generally uniform, most banks ciiarging a fixed rate during all seasons of the year. , In other sections, during ordinary conditions, the rate varies from semi-weekly at par up to one-fourth per cent, MEMORANDUM OF TRANSACTIONS. 73. First VtXioL— October 2-\n opening the collection register li.e eight accounts first given below should each be allowed ce-haif page space. The Sundries which follow will then be entered separately as s|iecifietl. The name of the dealer or bank from whom the item is received is "iven in it ilics liulkUy, DuntOH &- Co..- 1 1. note signed by Jacob Meyer & Bro.. endorsed by C. H. Farwell. payable at Chicago, dated June 28. at 4 months. $9295.11 . . . .Jt 2, .Iraft at 60 days' sight on Frederick Cox & Co for $-17? accepted Sep. 25 payable at California State Bank. Sacramento . . jf 3. draft dated Oct. 25, at oo'days "from date, on A. G. Ldwanls & Sons, payable at St. Louis, $785.95 (grace). /^e-w/i^. Poor &- Co.: #4. note signed by Hrown. Durrell & Co.. endorsed by John Munroe & Co.. payable at National Hank of Redemption. Boston, dated Aug. 31. at 60 days. $25260.75 55 draft for $4000 it to days' sight on Rice, .Sti.x & Co., accepted, payable at St. Louis. Sep. 25 (grace). . . 46. Burden. Smith&Co"^ note for $1345.29. endorsed by Robert H. Plant, payable at .Macon, (ia.. dated Sep. 25. at 90 .lavs (.^race) Nnv Vorl- Rubber Co : J 7, their draft on McNear Belting Co.. Oakland, Cal.. for $10000 'dated Autr "4 at 3 months from date ....%%, Raymond Lead Co.'s note dated Aug. 28. at 90 days, endorsed by N. K Fairb'.nk' payable at Chicago. $650. . . .jjQ. t'^eir draft at sight dated to-day on Mulholland Hardware Co Kansas City" Mo., for $3175. (Sight drafts to be forwarded for collection may be tickleri/.ed as due at the date of the following period, or 30 days from die current date, b, bushiess the time of the returns would be estimated ) United States Uathcr Co.: % 10. note signed by J. A.Willard. endorsed by Harvard Mf-. Co dated .Sep "6 at 4 months, for $17500. payable at Granite Falls, Minn, (grace). . . .Jf ,1. sight draft for $1 r2.5o on (] H Allen Co.. Salem. Mass. (gr.nce). . . .% 12, their draft on Simmons Hardware Co., at 90 days' sight, accepted, payable at St. Louis. Sep. 26, $6490.25 (grace). i ' 1 / National Hank of Redemption, Boston: %xi, note signe.I by Col, n & Ber. endorsed by Walker-S iwyer- Stetson Co.. payable at New Orleans. La., dated July 26. at 3 months, for $13500 (grace) % 14 dralt dr uvn by Brown. Durrell & Co.. on John Wanamaker. City, dated Oct. i. at 30 days' sight, for $5000 ..ccepled Oct - payable at Astor Place Bank ...315. Mills & Gibb's note at 90 days from Sep. 2. favor Riverside Worsted Mills, for $2317 35. payable at 464 Broadway. First National, Chica^^o : % 16. note signed by Acker. Merrall & Condit. City, favor Durand & Rasper Co dated Oct. I. at 31 days. $17240 ...517. at 90 days, p.iyahle at this hank. $5000. .% ig. draft at 25 days from Oct. 2 on Douglas & Jordan. Providence* R. I., drawn by Armour & Co.. for $12747.95 (grace). Bank of California. San Francisco: %2o, note signed by E. R. Durkee & Co.. Citv. favor L. A Olive Growers Assn.. dated July i. at 4 months, for $7270.95. ■ • .^21. draft drawn by James IF P.eatty on Hascall Steam Generator Co.. at 90 days' sight, accepted Sep. 2. payable at Chase. National Bank. City $93867 322. George A. Stone's note, favor Bank of Selma, dated Apr. 28, at 6 months, payable at Syracuse N y' $25000. •' , - . ., Boatmen's Bank, St. Uuis : JJ23. F. W. Humphrey & Co.'s 60-day draft on Milmine. Bodman & Co for $47500. accepted Sep. 2. payable at Seaboard National Bank. City . . . .•$. 24. note signed by Bliss. Fabyan & Co favor J. Kennard & Sons, dated Aug. 31. at 4 months. pay..ble at Central National Bank. City $938 67 ^ ->=' Spencer Optical Co.'s note, favor Burbank & Co.. for $.975. dated Aug. 3. at 90 days, pay.i'ble at 15 Maiden 33 BANK BOOK-KEEPING Lane City. . 826, note signed i)y Thos. Coggeshali. payable at Newport. R. I., endorsed by William C.iUnn dated Aug. 29. at 60 days. $4750 (grace). ' ' Sun.lru-s .- For credit of E//ioiL. Butler-t 27. his draft at 60 days from Sep. 23. on G. H. Hobson. Pueblo Colo., for $4500 (grace). . . .For E. R. Durkee Sr- Co.-t 2S. their draft at 90 days from Sep. 24. on Gaylord' Blessing A: Co.. New Orleans, for $,o5c» (grace) ...G.C. Hav.n-'^ 29. note signed by W. R. Drew, payabl^ at f y'""";^^' ^'^f -. ;'f ed Aug. 30. at 2 months. $520. Lerd ^ Taylor-ty>, M. H.Thompson & Co.'s note endorsed by ED. Waldron. payable at Elgin. 111., dated Aug. 3.. at 90 days. $3000. . . .Aforton, Bliss ^ Co.- Ir^';^ c"" ""' ^ '^^' ^^^^'^ ^^P- ^^' **" J°^" ^^'^'^^ ^ ^"- Louisville. Ky.. for $1672094 (grace) H. H. Stuasey-t 32. note signed by John W. Turner, payable at American E.xchange Bank. St. Louis, dated Sep. 9. at 45 days. $18000. .. . SMnwaj^ &» Sons-$ 33. Lyon & Healy's note, endorsed by John C. Black, payable at Contmental National Bank. Chicago, dated July 3.. at 90 days. $37500. . . . tV.sf^n Electric a._t 34. their If T Yrf''\^T' ^- ^- ^°- ^^''''''"' '^^"- ^"^^^' A"&- '°- ^» 75 clays from date. $,,550 (grace) Allan/a NaUonal-^ 35. draft drawn by W. G. Solomon & Co.. Macon. Ga.. on John Dunn. Jr.. Syracuse N Y dated Aug. 29. at 3 months after date. $4275.50. Detroit National-t 3b, note signed by R. H. Macy & Co ' payable at Bank of the MetroiK,lis. City, favor Detroit Stove Works, dated Sep. .. at 2 months. $2500 ' Nuttonal Bank of Kansas City-tyj, note favor of John A. Holmes & Co.. signed by F. R. Cordly. payable at Lowell. Mass. dated Aug. 30. at 2 months. $,7400. .. . Hibernia National-^ 38. draft drawn by Wm. J. Knox on rhomas Woolen Co. Woonsocket. R. I., dated Aug. 27. at 90 days from date. $.9250. . . .The above items will now be entered in the collection tickler. The following items have been forwarded for collection and should be entered in the remittance register under the title of the banks specified : National Bank of Redemption, Boston. Collections 5 4 3 11 5 -9 « 37 First National, Chicago, Collections tLt 33: Discount t I5«62. . . Boatmen's Bank. St. il«,«». Collections ^5. t 32: Discount t 15166. . . Bank of California, San Francisco, Discount t 15165. . . . Commercial Bank Syracuse Collection j{ 22 . . . .National Bank of Commerce. Kansas City. Collections 5 9. 5 34 Hibernia National, New Orleans. Collection jj 13 . . . . Industrial Trust Co.. Providence, Collections S 19. 5 26. 74. Second Vcnod^—Novetnber /—Time items were received for collection as follows : ^«/*/<^ Dunton &- Co.: ^39. note signed by J. Albert Walker, endorsed by Richardson. Hill & Co payable at National Bank of Redemption. Boston, dated Sep. 27. at 60 days. $24719.42. . . 840. their draft on Marks. Rothenberg & Co.. at 90 days' sight, accepted Sep. 24. payable at Meridian. Miss.. $4892.75 (grace) »4«. Lewis & Gregory's note, endorsed by G. Gunby Jordan, for $1752.90. payable at Columbus. Ga.. daied Aug. 25. at 3 months (grace). Denny Hwr &- Co. : J»42. their draft on Sachs Bros. & Co.. for $1 1200. dated Sep. 23. at 3 months from date, payable at San Francisco. Cal. . . .543. Johnson. Price & Co.s note, dated Sep 28. at 90 days, endorsed by J. Ogden Armour, payable at Chicago. $37500. .544. their .— 863. their draft on Bangor Telephone Co.. dated Sep. 24. at 3 months after date, payable at Bangor. Me.. $17800 (grace). . ..Steinway £r* Sons—He^, A. H. Cha.ses note, endorsed by -Mark Hanna. payable at Norwalk, O.. dated Aug. 28. at 90 days, $60000 .... Elliot L. Butler— $6$. his draft at 60 days from Oct. 23, on August Fast. Silverton, Colo., $3600 (grace). . ..Lord &- Taylor— *(Jb. Merk & Son's note, endorsed by G. M. Springman, payable at Waukesha, Wis., dated Sep. 26, at 3 months. $17540 ...H.H. Swasey-tdy. note signed by John White & Co., Louisville. Ky., dated Oct. 27. at 30 days. $25oco (grace).... //ibernia National— ^ 68. note signed by J. Drowd. payable at Syracuse. N. Y., dated July 27, at 5 months. $15000. ..Detroit National— ^6^, note signed by Siegel. Cooper & Co., favor Compton Refri79- Tacoma National, Discount 8 15180. . . Detroit National, Discount 8 15185. 75. Third Period,— December /—Time items were received for collection as follows: Bulkley, Dunton ^ Co.: 371. draft dated Nov. 25. at 30 days from date, drawn on A. G. Edwards & Sons, payable at St. Louis. $7217.55 (grace) .372. draft at 30 days' sight on F. Cox & Co.. for $4000 accepted Nov. 23. payable at Sacramento. Cal. . . .373. note signed by Jacob Meyer & Bro.. endorsed by Edson Keith payable at Chicago, dated Oct. 26. at 2 months. $9360. Denny, Poor &* Co. : 3 74. Burden. Smith & Co.'s note for $2890. endorsed by R. H. Plant, payable at Macon Ga.. dated Oct. 26. at 60 days (grace). .. .3 75. their draft at 30 days' sight on Rice. Stix & Co.. accepted Nov. 25. payable at St. Louis. $50000 (grace). .. .3 76. note signed by Brown. Durrell & Co.. endorsed by Kidder. Peabody & Co.. payable at National Bank of the Republic. Boston, dated Sep. 30. at 90 days $37500 New York Rubber Co. : 877. Raymond Lead Co.'s note, endorsed by N. K. Fairbank. payable at Chica-o dated Oct. 27. at 90 days. $11950. 878. their draft at 30 days from Nov. 23. on Hecla Electric Li^ht Co ' payable at Fresno. Cal., $3245. . 379. "ote signed by Crosby Machine Co., endorsed by James L. Lombard' dated Aug. 22, at 120 days, payable at Kansas City. Mo., $41263.18 (grace). United States Leather Co. : 380, their draft on Plankington Mfg. Co.. at 60 days' sight, accepted Oct -4 payable at St. Louis, $17850 (grace). .. .3 81, note signed by G. H. Allen Co., Salem, Mass.. endorsed by' Edward D. Ropes dated Aug. 27. at 4 months. $3750. .. 3 82, note signed by J. A. Willard, endorsed by T. B. Casey, payable at Minneapolis. Minn., dated Nov. 17, at 90 days. $25000 (ocker Trust Co., accepted Nov. 1, payable at this bank. $75000. . . 588, note signed by American Grocery Co.. favor Durand & Kasper Co.. dated Aug. 1. at 4 months, payable at Franklin National City 9701 0.50. ' ■" Bank of California. San Francisco: 389, draft drawn by Sunset Commission Co. on Seville Packin.r Co ,'\ ,^'P- '^' ^" ^J'^y*' ^'k'^»' ^'^^I*^"' Oct. 2. payable at 77 Hudson St., City, $12000. . . .390. .Iraft drawn by Sibley Shipping Co. on E. R. Durkee & Co., dated Aug. 23, at 90 days' sight, accepted SepT 2, payable at this bank. $^40.. ^.891. Daniel Lepard's note, favor Royal C. Taft. dated June 25. at 6 months payable a Providence. R. I.. $20000 (grace). . j 7 ^ .»i Boatmen's Bank. St Louis : 892. note signed by Goo.Iyear Rubber Co.. favor J. Kennard & Sons dated Aug. I at 4 months. p.-xyable at Hanover National. City. $25000. . . .393. draft drawn by Walker Hill on Frank E. Richmond, at 60 days sight, accepted Nov. i. payable at Merchants' National. Providence R I $q76-> co Sundries: Elliot L Butler-t^, his draft at 60 days from Oct. 23 on Charles Henkel. Pueblo Colo " $17300 (grace). ...ER. Durkee &- O.-895. their draft at 90 days from Nov. 27 on Max Schwabacher New Orleans. La.. $2951.75 (grace). . .Lord &* Taylor-ig6, Clarke & Co.'s note, endorsed by Martin Kin.^man 35 BANK BOOK-KEEPING payahle.at Peoria. III., dated Aug. 26. at 4 months. $8145.20 . . Morton, Bliss &- Co.-tgy, their draft at 00 So»s-t9&. C. F. Summys note, endorsed by J. J. Haltstaedt. payable at First National. Chicago dated Nov. 26. at 30 days. $.2500 . . . . Wr./^« E/,ctrtc Co.-t^, their draft on Eimwoo'« *t Syracuse, N. Y.. !n r r ^ ?r ^::^''""''-« •°'' ^'^^' '^-'-<^ Nov. 28. drawn by Berkey & Gay Co.. at 30 days' sighi /T A ^z^ ^''"' JE"- ^'^y- ^c«P»ed to-day upon presentment, payable at this bank. $63850.94 A'.,rio»a/ Bank 0/ Kansas Ctty-^ .02. note favor Sembrich & Co.. signed by Francis Staley. payable a R^-kport mIss dated July 26. at 5 months. $4370.85. . Hiternia National-^ ,03. draft at 30 days'sight. drawnl^y Wm j" Knox on Lord & Taylor. C.ty. accepted to-day upon presentment, payable at this bank. $.4190 5,04 sieht ^7816.4^'"" ' ' •'"• °" """'""'' ""''^ ''"• '^ ^'--^-'-^' Pay^-^t to be adJi^d by tekgr'ph! ^nf. I«? i^""""'"^ i^-""/ ^r." ''^" fo'^w^'-ded for collection : Bank of Redemption, Collections « 60. t 63 ll I, ! '°'*. • '^'■'•"'* ^^^'l'^^'*""^ ««. »66. jJ73. JJ96. #98. - . .Boat,nrn's. St. Louis, Collections «3. » .2. :U7. 5J49. :I7.. Jt7S. J$8o. .. . /?a„.t ./ CaU/ornia, Collections ^,43. 546. »72. iJ78 • . cV^r^^'r/ 5^ra.«... Collectu^ns 568^^.00; Discounts 5,5.76. tM^o^ ... National pJnt o/L.:nlrce ^^nsas^^^^^ t o. rr ^/?' ^99-^..^'W. AV«,(;.W.. Collections 528. 385 . . . . A./^/././ 7V«./o.. CollectToi;^; It' ^93 -.^'"«^'''' -y''''""''^- Collections 365. 594: Discount 3i5l77... -///..«/« AW/V,W. Collections «6 340 374; Discounts 3.5167. 3.5.9^. ^-«>t ./ A-entuciy, Collections 33«. 397: Di.scount 3.5.99 ' *^^T" ■ ^v 0": rL ^\' ^""''""" '^^ ''"^"'"^'" ^"'''"< ^^''">^'■«C/^«. A C. Discount 3.5.8. . . ..Iron Ctty National, Pittsburg, Discount 3 15.87. » 'S'oi 76' Fourth Period.— />>^r^,«^^r j/-Time items were received for collection as follows • Bulkley Dunton &- Co. .- 3 .05. their draft at 30 days' sight on Aarup & Sternberg, Vicksburg Miss to ?o.:Xmi:g^h::. A^^^r^' "^"^"' ^'^^'-^^ ' •"• '-' '-' ^^ ^ ^^^^ ^^^ ^- - -'^o^ ^^p^^ Denny, Poor &- Co. .- 3 .07. their draft on Sachs Bros. & Co.. San Francisco. Cal., at 30 days from date fdvLtd b-Vr^"' f ; ^^l^^^'^"^' - ^-^ "-^--". Wichita. Kan., with i^struaionf to hav^mem :!u:i^^r^!:::^^^^^^ ' '°^' -^^^ '^-^^ '^ "• '• '• ""-' * ^- ^^^^^ ^- -^ ^ ^^>^' p'^^^'^ A^^c/ r^r>t PuAder Co. : 3 , .0. note signed by I. B. Kleinert Rubber Co., dated Oct. 31. at 2 months payable at 725 ^---d-y. S.3450 . .3 .... note signed by Allerton & Aiken, endorsed by Senauer & Co payab e a^ . "cZ^^saI^x S-. s.:38^2t"' '"^^-^^ • • ' • "• "" '-' '' - ''^' '-- ''- ^^'^ - ^^-'-^ i/«;V^./ 5/^/^rx Z^«M.r a. .- 3 . .3. their sight draft on A. M. Hunter. Lowell, Mass.. $3275 90 ferace) 3 ..4, note s.gned by Jno^S Piilsbury. dated Dec. ,6. at 90 days. $35000. payable at St. Paul. M^„^(g race) ' National Bank 0/ Peremption, Boston: 3.15. note signed by Mitchell-Vance Co.. favor Central Brass sL on G cV' 'r ''i '^'^'^ '' ^'"' °' ^"^ ^°'''^' ^*76oo. . . .3 ..6. sight draft drawn by Ani^h & S.,ns on G. G. Haven Cty. $374.9.82 ... .3 . .7. draft drawn by Kendall. Hooper & Co. on H-O Company at7 dated Dec. 29. at 60 days' sight for acceptance and return. $24000 company, c.ty, f'^'^ ^''''""^\ C^'^'^/ro: 3.. 8. note signed by Lazard Fr^res. City, favor Equitable Trust Co Chicago Co on A? !'a '^y^' P^>'^^'*= ^' ^°-'»^ National. City. $75000. . . .3 . .9. sight'draft drawn by irmrr'& Co. on Anglo-American Provision Co.. . . , Produce Exchange. City. $5328. 09 Bank of California, San Francisco: 3,20. draft drawn by A. J. Crosby on Enrico Casabianca 28^ Washington St. dated Dec. 2.. at 30 days' sight. $39..74. • • .3 .2.. note 'signed by David Trumm tyaNcI^ Providence. R. I., dated Dec. .3. at 30 days. $9275 (grace). ' ^^ *^ Boatmen's Bank St. Louis: 3.22. note signed by Saraband & Galop, favor Templeton Strong payable bv OnTlT";. ''^^t r^'l ""T- '°' '' ' "°"*'"- ^^'"^i- . . .5 .23. sight draft on Eclipse^Mfg. Co.. CUy 'drawn by Opdyke Lean & Co.. $948.25. . 3 .24. draft drawn by Fergusun & Moffat on Splncer Optical Co dated Nov. ..at 60 days from date, accepted, payable at Nassau Bank. City. $7382.95. . ^.25 note sL'ne7bv rohn McCroden favor Sansom Pearl Works, payable at 206 Centre St.. datid Sc. .''at 30 da^;. $.I48 50 ' ^ Sundries: G. IV. Adams-t 126. his draft at 30 days from this date on Bruce Whitcomb & Co Shenandoah lovv^. $5000 (grace). . y. Seisin Tait-^, ,27. his draft a, sight on HerscLy & wL Lule' K. I.. Dec. 28. at 30 days sight, on Aries Bros.. Altoona. Pa.. $9400 National Lafayette Cincinnati days sight. SI.OOO....IKF. Wakeman-t .30. his draft at sight on Mankato Mortgage Co.. Mankato. Minn.. THE COLLECTION CLERK requesting advice of payment by telegraph, no protest. $25000 (grace) . . . Columbia National-t .3.. draft at W6^,« u ?• ''';;" "tT * ^°' ^''^' ''■""" ^y VVoodward & Lathrop. for acceptance and return. $4936.28. . . .Morton, Bliss &- Co.-t 132. their draft at sight on Charles E. Slocum. Defiance. O.. for immediate returns, no protest, $35000. ^ .,7*'^ following items have been forwarded for collection : Bank of Redemption. Collection 3 .,3; Discount 3.5.94..../>r./. Chicago, Collections t77. ^ ux ... .Boatmen's, St. Louis. Discount 3 15200. . . .^«>t ./ ?o,nZrc'l'cTT":: i'°^' IV' ^^^""^^rcial, Syracuse. Discount 3 .5207 .... National Bank of C..«A«.rr. Collecuon 3 .08 ..Hibernia National, Collection 3 .05. . . .Industrial Trust Co., Collection 3 J; ilH f V^T\ -1^ National. Toledo. Collection >i, m .... Atlanta National, Collection 3 .c^. . . Bank of Kentucky. Discount 3.5.86 ... Galveston National. Discount 3 .5,78 .... />V/..///y Trust Co Co lection txzt Tacoma National. Collection 3.27. ...5/. Paul Trust Co.. Collections 310. 3.30 Iron City Aational. Collection 3 128. . ..Merchants' State. Fargo. Discount 3 .52.6. 37 ti CHAPTHk VI. THE THIRD TELLER. 77. The province of the third or note teller is not easily defined, owing to the wide difference of custom among banks as to the duties which he shall perf..rm. In general he is required to present such matured paper— notes, ilrafts, acceptances, cou|>ons, etc.— as are i>ayable in the city From the discount clerk he receives the items jxiyable on the city discount tickler, and from the collection clerk those appearing on the collection tickler. 78. The Messengers.— r he third teller has charge of the messengers, to each of whom he assigns a particular route, and who present for payment «.r acceptance such notes, drafts, etc., as may be allotte.l to them. A full description of the paj^er and its place of payment is recorded in a "route-book." In case of non-payment, a corner of the pai>er is turned down and the messenger records thereon such reasons as may be given for refusal ui>on presentment. Fa|)er payable at a bank is usually certified by the bank, and that payable by firms and individuals is ordinarily accepted payable at a specified bank and afterwards certified that the item may be returned and sent through the clearing-house uixm the day following. This plan minimizes the amount of currency to l)e earned by the messengers, as the returns to the note teller must l>e in money or certified items. A column is provided in the route-lK)ok for entering the clearing-house numlier of checks which have been received, cash payments being indicated by a dash or similar symbf»l. 79. Certificates of Deposit.— Certificates of de|X)sit are issued to such persons as do not intend to l>ecome [^rnianent dealers, and do not care to draw checks against the amount which they desire to deposit. Interest may or may n<.t be allowed, according to circumstances. It is customary for the third teller to issue these certificates, though the receiving teller performs this duty in some instances. The signature of the i)erson is generally written upon the stub of the certificate in the certificate of deposit book, that careful comparison may be made both of the signature and the amount when presented for payment. FORM OF CERTIFICATE OF DEPOSIT. 80. Customs Checks.- Another important feature of the third teller's work in custom-house centers is the provision for the payment ..f tluties by dealers. The Treasury Department requires 38 THE THIRD TELLER duties to be paid in coin, coin certificates, or Treasury notes. To obviate the inconvenience of this ree>o %-£ti. THItr Ctshier FORM OF CUSTOMS CHECK. When the dealer desires to pay duties he draws a check for the amount and sends it to the bank. Instead of paying this check in cash, the teller draws a check on the Assistant Treasurer for the amount, which check will be accepted fnmi the importer by the custom-house officials and returned as a voucher to the bank next day. The subtreasury is not permitted to keep any part of this deposit over night, and at the end of the day the Assistant Treasurer sends his check for the difference l>etween the amount deposited and the a?;gregate of the customs checks which have lieen presented during the day. This Assistant Treasurer's check can be again deposited at the sub- treasury next day, together with enough additional funds to amount to $20000. The dealer's checks are, of course, charged to his account by the bookkeeper, as will be explained hereafter. 81. Cashier's Checks.— A cashier's check differs from a dealer's check simply from the fact that it is signed by the cashier of the bank on which it is drawn. This distinction need not be sjxjcified were it not necessary to emphasize the difference between a cashier's check and a ^i ^^ei^^m!»l^^ ■^-^-m-v-e Mt,^ OF NEW YORK C^W. YiX'fJ WU:£<£ <^ *Jc:r$eta/^^Jaffi>^^»yi«€i FORM OF cashier's CHECK. 39 BANK BOOK-KEKl'ING charge ticket issued by the cashier to authorize the first teller to pay „u>ney. Cashier's checks are usually filled out by the third teller or general bookkeeper, and signed by the cashier. Payments of salaries and general expenses are paid by cashier's checks rather than by tickets to first teller the advantage arising from the enforced endorsement of cashier's checks which serves as a rece.pt of payment. For small items of expense charge tickets are signed by the cashier which authorize the first teller to pay the amounts s,>ecified to the iH-arcr-usually a clerk or official of the bank^ Cas^h.er s checks are usually paid through the clearing-house the day following their issue Most New \ork banks issue cashier's checks instead of drafts on correspondents, for remitl tances to distant points, an.l, inasmuch as exchange on New York is usually at a premium, the propriety of this course is apiiarent. . 8a. Bank DraftJU-Correspondents who keep a deposit in New York draw drafts against the account and sell to their dealers or others for making payments at distant points. These drafts sooner or later are forwarded to New York, and in most cases reach the bank u,>on which hey are drawn through the clearing-house. Correspondents are charged with drafts in essentially the same manner as resident dealers are charged with checks-the -draft" in this instance being in reality the check of the correspondent. New York banks which sell exchange on other cities keep a deposit at those cities In .«me cases a New \ork bank may draw against its collection account and advise its corresiwndent of having done so, and in other cases drafts may be drawn by agreement where no balance is kept but, in general, when drafts are drawn upon another bank, a l>alance is kept at the drawee bank for the purpose of providing funds for their payment. FORM or BANK DRAFT. 83. The Debit and Credit Books.— As a rule, all charge and credit tickets, letters, or other memoranda, which affect the general ledger, pass through this de,>artment before reaching the general bookkeej^er. Most of the transactions which make up the work of the student for the remainder of this period should, therefore, proi>erly ht given as a part of the third teller's memo- randum of transactions. To preserve the simple progression of the student's w..rk, we have deviated from that plan to the extent of reserving all memoranda which directly concern the general debit and credit l)ooks f..r enumeration in the general bookkeejier's memorandum of transactions under Chapter VII. The entries which follow from the third teller's memorandum of transactions are to be made in the debit and credit bwks for deaUrs. banks, and collection banks, as specified in the 40 / / THE THIRD TELLER memorandum, the aggregates to be transferred to the general debit and credit books, as will be indicated in Chapter VII. 84. The Third Teller's Proof —We present but a single proof of the third teller's work for this period. It IS customary, however, in large banks to prepare two proofs daily in this depart- nient-one in the morning, the other in the afternoon. The morning proof is practically a proof of the mail receipts to be credited to corresi>ondents and depositors out of town, and its use is a matter of convenience. The afternoon, or final, proof includes the entire transactions of the day. 1 he sagacious student, however, will soon perceive the iwssibilities which these proofs combine and can readily modify them to suit his purposes should he be called ui«>n to devise a different system. THIRD TELLER'S PROOF. FIRST PERIOD. October 2, 1897. 1. A-L DEBITS M-Z BANKS COLLECTION BANKS 2. GENERAL 3. EXCHANGES 4-, CASH 5. SECOND TELLER e. CASH ITEMS 1474.79 05 237841 27 238267 18 26G868 46 I023983 75 573958 305479 186339 SCO 298371 7 61 32 85 48 I 1. A-L CREDITS M-Z BANKS COLLECTION BANKS 2. GENERAL 3. EXCHANGES FROM C. H. 4. FIRST TELLER 5. SECOND TELLER 6. CITY OFFICE 189181 2503I0 249151 262725 1539570 222703 76426 1 79633 14015 2983717 48 46 43 51 38 05 83 02 22 58 The third teller's proof is derived from the aggregate transactions which have passed through his hands, and comprises all of the entries in the general debit and credit books up to the i>oint at which the totals from the debit and credit books for dealers and banks are tranijferred at the end of the day. The debit side exhibits: 1. Total sums debited to accounts of dealers, banks, and collection banks from general debit book. * 2. Items charged to accounts in the general ledger. 3. Checks and drafts received by the note teller payable through the clearing-house. 4. Bills and coin received during the day. 5. Remittances from collection banks transferred to second teller as clearing-house items and exchange deducted from deposit tickets. ' 6. City office items which have not been collected during the dav. or checks, coui>ons and other Items which are being carried over for payment at a future time. The credit side consists of: I. Total sums credited to accounts of dealers, banks, and collection banks from the general credit book. * 3. Items credited to accounts in the general ledger. 3. Cashier's checks, certified checks on this bank, and other items which were received from the clearing-house, and have been included in the general-ledger debits on the opposite side. 4. Cashier's checks, certified checks, city office items, and charge tickets issued by the third teller which have been |>aid by the first teller during the day. 5. Foreign office items transferred from the second teller, to be sent away for collection. 6. City office items of the previous day which have been paid this dav, with the exception of the «' Cash Items " on the opposite side. 41 BANK BOOK-KEEPING MEMORANDUM OF TRANSACTIONS. 85. Fust Period.— (9r/«»/>^r ^-Accounts should be opened in the dealers' ledgers, creditine each account with its balance as given below : 8 • ^ K cacn ^•'"'T' ^-^-^^^^'; A^lams, $65720.18. . .Chas. H. Baker. $.7082.91 . . . .Bulkley. Dunton & Co.. $322700 Elhot L Butler. $4.800. .. .William Clark. $967.-29. .. .Cooper. Hewitt & Co.. $210000. .. .Denny IW & Co.. $.398.0.20. . . . E. R. Durkee & Co.. $2.8022.62. . . .Geo. C. Flint Co.. $297329.8. Gilbert Manu- facturing Co.. $45400. . . G. G. Haven. $454768.45 ... A. Iselin. Jr.. $325001.30. . . . Edward King. $380000 Knickerbocker Trust Co.. $.652406.95 .... Lord & Taylor, $92843.29. j-»~-" • • Ledger, M-Z-\\. Maillard. $94260.07 .... Andrew McLean & Co.. $125760 H Mills Treas S.8039..4. . .Morton. Bliss & Co.. $399'27.27. • • -J. H. Newman. $,4220.25. . . .New York Rubber Co.'. $.4198;; Otis Brothers & Co.. $215700. ... Pennsylvania R. R. Co.. $4.2500. .. .C. H. Pine. Prest.. $.o;xxdo Redmond. Kerr & Co. $8,7.4.32. . .John L. Riker. $,45575.5o. .. .Samuel Sloan. $.99600. .. .S.einway & Sons. $63407.29. . H. H. Swasey. $29.5... . . .J. Selwin Tait. $698..97. - . .Union Mortgage Co.. $,92900 Umted States Leather Co.. $.298,3995. • -W. F. Wakeman. $..377.98. . • .Western Electric Co.. $274450^ * The following debit balances should appear upon the "collection ledger" under .late of October 3 the city being written first in the headings of accounts : Atlanta. Ga.. Atlanta National. $.8672.99. . . Boise City. Idaho. Boise City National. $3.75.20 Boston Mass.. National Bank of Redemption. $40.99.70. . . .Buffalo. N. Y.. Bank of Buffalo. $,72.10 Chicaeo 111 ' Bankers National. $75225..3. . .Chicago. 111.. First National. $.7420.90. .. .Denver. Colo.. Denver Nati;nai; S,T,r p M'n''J°'''.' ^'""■'' ^°'" * "^'"'^ ^°- «4S.'2 ...Detroit. Mich.. Detroit National $827..23....Fargo.N.D Merchants State. $.2.7.47. •• .Galveston. Texas. Galveston National. $2.7070 Grand Rapids Mich. Old National. $2.5.o.,9. . . . IndianaHis. Ind.. Fletcher's Bank. $2.20.75 Knoxville Tenn.. Knoxville Banking Co.. $6278.84. . .Louisville. Ky.. Bank of Kentucky. $.03.49. • • -New Orleans. La..' Hibern.a National. $89Cxk>. . . .Omaha. Neb.. Fidelity Trust Co.. $742.58. . . Pittsburg. Pa.. Iron City National $452to . . .ProvKience^ R. I.. Industrial Trust Co.. $298o.,2 . . Syracuse. N. Y.. Commercial Bank. $37000 ' San Francisco. Cal.. Bank of California. $20.49.60. St. Louis. Mo.. Boatmen's Bank. $26472.7. . St Paul' M.nn.. St. Paul Trust Co $5200. .. Tacoma. Wash.. Tacoma National. $4087.78 .... Toledo. Ohio. Second National. $2.6.03. .Washington. D. C. Columbia National. $.8440.07. Accourits with the following correspondents will be opened in the "bank ledger." and their balances cred.ted under date of October 2 : Albany. N.Y.. National Commercial. $,9208.50. .. .Atlanta. Ga.. Atlanta National. $24000. Boston iT'^Fi^rr! 1 « ^''^'''^^T' *^'5«« • • ""fl-alo. N. Y.. Metropolitan Bank. $.559^4.09. . . .Chicago! KT ?.o ' 5750000... Cincinnati. Ohio. National Lafayette. $.60327.29 .. .DallasT Texas Cit^ National. $28390.2,. Detroit. Mich.. Detroit National. $.50000. ... Kansas City. Mo.. National Bank of ^nZir., i'^^ M "-r^''"'; ''^•' ''""'* °' ^""^"''>' 5'^°490.43....Milwaukee. Wis.. Wisconsin National. Sy>562.,6. . .NewOrleans. U.. Hibernia National. $.93421.07. . . .Omaha. Neb.. Nebraska National. $95170. .^Philadelphia. Pa.. Fourth National. $38,098.55. • . .Providence. R. I.. Industrial Trust Co.. $302088 25 ..San Francsco. Cal.. Bank of California. $500000. .. .St. Louis. Mo.. Boatmen's Bank. $675000 Minneapolis. Minn.. Flour City National. $.60000. . . .Washington. D. C. Columbia National. $,74998.42. ' Checks and drafts drawn on this bank by dealers and correspondents and received over the counters of the bank, are charged to the dealer or correspondent, as the case may be, from "debit- books, the aggregate of each book being carried to the "general debit-book." In addition to the paid checks Itemized in the i>aying teller's memorandum (39), which will now be charged to the dealers ,n the debit-books, the following checks and drafts have been received by the second teller and will be charged from the respective debit-bioks. When several items are to be charged to the same account the amounts may be itemized in the left-hand column, and the total extended in the right-hand column. focon^'^'pf'^ v"^"^"''; ^"^^ * ^°- ^' **75. 5362.67. $9.28. $3267.58. $45000... Lord & Taylor. $2500. Edward King. $600, $731.98. . . . A. Iselin. Jr.. $7460. $,69.29. $78500. . . . E. R. Durkee & Co.. $70.08. $12.29. $31.64, $750. $9760.20, $34758. Debit Ru^k, J/-Z-Otis Brothers & Co.. $267.93. -Union Mortgage Co.. $7000. $91.62. . . .Steinway & Sons^$900. $750. $3715.75... Henry Maillard. $41.50. $763..8. $7.8.9, ... .Samuel Sloan. $,8400. $.9247. 4« THE THIRD TELLER Debit Book. 7?^«/-j-Albany. National Commercial. $4762.98. $2,8.29. .. .Boston. National Bank of Re.lem,,t.on. $4000. .. .Omaha. Nebraska National. $2500. $760... St. Louis, Boatmen's Bank. $2.20 $460 »23-92. $7- . . . Dallas. City National. $420. . . .Buffalo. Metropolitan Bank, $263.. 8, $250. Checks and drafts were received from the clearing-house as follows, to be charged as specified through the respective debit-books : & 1 b ■ />..i/.r.^-Z_Edward King $9.54. $627. $.429.67. . .Geo. C. Flint Co.. $49.22. $3.29. $760.09. $4762.50 Denny Poor & Co $4750. $,4600. $23.,8. . . . IJulkley. Dunton & Co.. $426.64. $,7 $49.09^ $3348.5.. « !,T. ■ ■ '.^"'■'l ''^,«"f """"S Co.. $4.29. $6.63. $37.87. $409.30. $2.76. $960. %,^:i^.,y. . . L„;;;; & Taylor. I-^i ?^ „ , . . ''^ '^°- **52-6o. $31673.62. $7260. $43.8.9,. $78900. . . .Ciias. H. Baker. $750 Elliot L. Butler. $4.60, $3264.9,, $47260. R ^^^f'^'^'/^-^-U'V"" ^^""Jf-Y Co.. $4600. $3,625.65. $4.67. $3.8.62. $.8..99.$27. $4400. . . .Pennsylvania R. R. Co.. $260.90 $4,260. $329.95. $4,.68. $327.62. . . New York Rubber Co.. $61.07. $376.29, $3,47.60. $23.92 $♦.6.73.^ United States Leather Co.. $20000. $4500. $.7600. $2.6. $38..4....C. H. Pine. Prest., $45.20 Andrew McLean & Co.. $44.36. $329.6.. $,43.75. $.850.23 ... .J. .Sehvin Tait. $4459-80. . . .Samuel Sloan. $74..82 $40. $452.69. $.9000. . . .J. H. Newman, $2.60. . . .Morton. Bliss & Co.. $22000, $66700.08 $,67500 Ai«>C-.-Atlanta. Atlanta National. $49.20. $2.6.29. 543.6o. $2,8.67. $2500. . Boston. National Bank of Re370.9i. Commt*H..f'«f;^?."%~^''"''/''"'' ^'''°""'' ^^^^^^S' 53>8.62. $329.54. $3769.50. .. .Albany. National Commercal $3963.10^ $57,243. $,000. .. .Boston, National Bank of Redemption. $20000. $476o.i8. $35000 $23982. BuflTalo. Metropolitan Bank. $4360.29. $2,68.,2. $7420.95 ... Chicago. First National. $^7000 $ 3>oo. $240000. . . .C.ncmnati. National Lafayette, $3165.70. $2250. $7958.63. . . . Dallas. City National. $237 60 $3400. $.928. $317-95. $7500. Detroit. Detroit National. $3.8.75. $4200. $.2000. ... Kansas City. NaUonai Bank of Coirimerce. $7416.12. $35000. $268.93. . .Louisville. Bank of Kentucky. $6750. $3200. $549..6o $3362.98 $734.-25.... Omaha. Nebraska National. $2000. $3500, $4750. $8361:75.. .Philadelphia. Fourth National. $5000 $,2300. $,3000. $45000. $62500. $75400. .. .Providence. In.lustrial Trust Co.. $5Lo $,4700 $3,540.25. ^2683.7... San Francisco. Bank of California. $43700. $22800. $49000. $95000 $24,695.43 ' S. Louis Boatmens, $75000. $243.2.50. $.37421.60 ...Minneapolis. Flour City National. $246..?2 $3cxx," $5496.25. $.2000, $44000 . .Washington. Columbia National. $30000. $2750, $4500. $29000 Collection letters enclosing cash items were sent to the following collection banks : Atlanta National $2463.90. . .Boise City National, $5290.60 . . .National Bank of Redemption. $6,29,.33 Lo.n & Tn » "ffa I o $9340.20. .Bankers' National. Chicago. $73600. . . . Denver National. $4.4ernia National, New Orleans, $21400; chargt-s, $10.70 ....Fidelity Trust Co., Omaha, $3019.10; charges, $2.12. .. .Iron City National, Pittsburg, $21000*^ charges, $10. 50.... Industrial Trust Co.. $3613529; charges, $7.40 ...Commercial, Syracuse, $106165.39; charges! $4.80. . . .Bank of California, $27162.82; charges, $15. . . Boatmen's, St. Louis, $37941.12; charges, $8.98. . St. Paul Trust Co., $3251.75; charges, $3.25. . . Second National, Toledo, $63435.20: charges. $3.50. . . .Tacoma National, $155050; charges, $5.20. . . .Columbia National, Washington, $4010.50; charges. $5.01. 47 i \i CHAPTER VII. THE GENERAL BOOK-KEEPER. 89* The general book-keeper of a large bank occupies a position of marked resjwnsibility. In the line of promotion his rank is usually considered below that of either the l>aying or the receiving teller. By many, however, his jjosition is considered outside the ordinary line of advancement. The performance of his duties requires a s|x:cial preparation not to be acquired in any of the other departments of the institution. In fact, one may pass, by promotion, through the various departments, performing satisfactorily the duties in each, from messenger to cashier, and ytt not be thoroughly qualified as the general bocrativc that they should be. 90. The General Ledger. — The general ledger contains a summary of the entire operations of the bank systematically collated from the several dc|>artmcnts. From the accounts therein comes the information for officers, directors, or stockholders concerning the condition of the bank, its assets and liabilities, profits and losses, investments and net earnings. 'I'he general debit and credit books are the media through which the transactions are collated, arranged and put in convenient form for being jx)sted to the general ledger. Where a large number of subordinate ledgers are in use the entries uixin the general debit and credit books are usually condensed into what are known as "supplementary" books from which the general book -keeper {Xists to the general ledger. That the student may have no difficulty in understanding the use of the general debit and credit books, the work for the first iierioil has been i)resented in full. The student will, therefore, write up his own books from the following memorandum of transactions, as illustrated, deferring the opening of the general ledger until the general debit and credit books for the first period have been completed. 91. The General Debit and Credit Books. — In practice the general book-keeper would have before him the letters, charge and credit tickets, or other memoranda from which the entries would be made. To facilitate posting both to the general balance ledger and the general ledger, he would not begin the writing up of the general debit and credit books until the day's transactions had been completed, and could therefore assort the debit and credit tickets, cashier's checks, letters, etc., etc., that all the items affecting each account in the ledger might be grou|)ed together. .Accounts alK>ut which he might be in doubt would be left until the last, or such an amount of s|)ace left blank after each as his experience might suggest. This explanation will account for the grouping of items under Interest, Exchange, C!ashier Account, etc., in the general debit and credit books, as illustrated. The memorandum of transac- tions for the first period is given below, and the general debit and credit books immediately follow. The student will write up both books in full before proceeding further. MEMORANDUM OF TRANSACTIONS. 92* First Period. — October 2— Tht loan clerk reports demand loans made as follows: Loan JJ 1257, Harvey Fisk & Sons, $50000. . . Loan 1 1258. Dunham, Buckley & Co., $34750 Loan 5 1259, Goldman, Sachs & Co., $47280.15. . . .Loan 5 1260, Vermilye & Co., $195000 (All cashier's checks given during this period will be specified under " cashier's checks issued " and will not be entered at this point.) Time loans : 5 1261 for 30 days to Steinway & Sons ; proceeds creditet! to their account, $12500; interest, $62.50; total, $12562.50. .. .S 1262 credited to Gilbert Manufacturing Co.. $5000; interest for 60 days. $50; tot.il, $5050. .. .5 1263 credited to Redmond. Kerr & Co., $16492.19; interest for 90 days. $247.38: total, $16739.57 .. 5 1264 by cashier's check to VV. H. Kimball lor $8762.50; interest for 30 days. $43.81: total 48 THE GENERAL BOOK-KEEPER amount, $8806.31 ...Total interest credited, $403.69. (Give Interest account four lines space as shown in general credit book.) Paid note made by Hibernia National, New Orleans, cjue to-day, payable at this bank, for $40000. as per charge ticket issued by third teller. (In most cases of this character the note would be certified.). .. .Bills discounted debited as per discount register. $387035.19. . . .Exchange, Discount. Dealers, and Cashier Account, credited as per discount register for this day. The following loans were paid to day: Demand—^ 1225, C. H. White & Co., $37600; interest. $12.70 1 1216. Union Trust Co.. $125000; interest. $208.33. . • -t '204. Kountze Bros.. $18213.62; interest. $10.17. . Total interest credit. $231.20. ... 7I»/^— 5 1221, Laidlaw & Co.. $7129.50... Jf 1206. Spencer Trask & Co.. $33180... 8 1 198. F. M. Lockwood, $74000. .. .Denny. Poor & Co. request us to charge their account with loan ^ 1208 due to-day. $8750. Bills discounted due to-day per tickler have been paid in cash, with the following exceptions: Discount #11400 has been protested for non-payment and charged to J. H. Newman; protest fees. $1.85. .. Gilbert Manufacturing Co. request us to charge their account with discount J 13111 . ..Boatmen's Bank. St. Louis, telegraph us to charge discount JJ 13792 to their account. .. .Thomas Hill having failed, we charge discount 1 14« 13 to Profit and Loss. . . .Discount J 14354 being payable at this bank is charged to the account of Morton, Bliss & Co., notice of this dis|>osition being sent them by letter. First National, Chicago, enclose draft on their general account for $17420.90 with instructions to place to credit of their collection account. Hibernia National, New Orleans, enclose their draft on us for $54000 and advise us to credit their collection account. Detroit National requests us by letter to charge its general account $4758.62 for credit of its collection account, the items having been previously advised and exchange deducted at time of advice. Letters advising tlie collection ol time items were received as follows, the proceeds being charged to their collection accounts from the general debit book : National Bank of Redemption, $14295; charges. $14.30. .. .Bankers' National. $17521.60; charges, $17.52 • . .Denver National, $954 35; charges, 48c . . . Central Loan & Trust Co.. $12980.40; charges. $12.98 Galveston National, $125.50; charges, 30c. .. .Old National. $13950.75; charges. $13.95. . . .Hibernia National. $1275; charges. 64c ...Bank of California. $174-25; charges. 17c. .. .Boatmen's Bank, $12900; charges, $6.45... Second National, $425.37; charges, 55c. .. .Columbia National. $15720; charges. $19.65. .. .Total exchange debit, $86.99. The above time collection advices include credits to be made to the following accounts: Bills discounted. $20000. . . .Atlanta National. $2117.50, less exchange. $2.12. . . .First National, Chicago. $7340.75. no exchange .... Detroit National. $1050. less exchange. $1.05 .... Boatmen's Bank. St. Louis. $14290.18. less exchange. $7.15. .. .Columbia National. Washington. $4150. less e.xchange. $4.15. .. .Bank of California. $3726.49. less exchange. $9.32. . . .Bulkley. Dunton & Co.. $4697.18, less exchange. $4.70. . . .Denny. Poor & Co.. $8260. less exchange. $10.33. .. .New York Rubber Co.. $4395.40. less exchange. $4.40... Stemway & Sons. $1980. less e.xchange. 99c.... United States Leather Co.. $12124.50. no e.xchange.... W. F. Wakeman. $6190.22, less exchange, $7.74. . . .Total exchange credit, $51.95. [When dealers and correspondents are charged the same amount of exchange as we pay to have the items collected, the net amount may Iw credited and no entry made for the exchange except in case of bills discounted. In this latter case', we would debit Exchange account for the amouiit deducted, inasmuch as it would be the only loss on exchange which we would sustam. In the above entries we have debited exchange for the amount charged by our correspondents, and credited exchange for the different amounts which we have deducted from the credits to dealers and corres,iondents for whom the items were collected.] Checks certified this day as per certification-book of first teller: A-L. $91558.92; M-Z, $133477.07. National Bank of Redemption, Boston, instructs us by telegram to transfer $25000 to the account of Flour City National. Minneapolis. ... Paid express charges on currency sent by City National. Dallas, $21.75. Metropolitan Bank, Buffalo, notify us by letter to forward $7500 to Columbia National. Washington. D. C. for credit of their account (cashier's check) . . .Paid express charges on couiwns forwarded by Bank of California Sep. 29. $1.13. Paid expenses as follows: Mutual Life Insurance Company, rent for 3 months /rom Oct. i, $3000.... Corhes. Macy & Co., stationery, $37.18. . .Thomas & Son, coal. $22.50. . . .Director fees. $45. . . Telegrams. $3-40. . . .Electric Light Co.'s bill. $6.93 September salaries. $3350. (Such of these expense items as were paid by cashier's check will l>e found itemized under "cashier's checks issued.") Received check from Treasurer U.S. in payment of quarterly interest on $200000 U. S. Bonds. 4 per cent.. $2000. . . .Received quarterly dividend of 2 per cent, on $50000 Hoffman Maciiine Co.'s stock, $1000. 49 BANK BOOK-KEEPING The following collection items clue in this city to-day have been protested for non-payment and returned, the protest fees being charged to the correspondent which forwarded the paper for collection : National Bank of Redemption— Hunt & Co.'s note; protest fees paid to notary in cash. $1.85. . . First National, Cliicago— draft on E. O. Lawson; fees, $1.30 Detroit National— note signed by Stroeter & Son; fees. $1.50. Industrial Trust Co. return unpaid check signed by J. A. Stuart, remitted to us by Hibernia National, New Orleans. $47-28. . We return check remitted to us by Columbia National. Washington, payment being refused by Court & Co., City. $372.85. . . .Bank of California returns note unpaid, left with us for collection by Morton, Bliss & Co., and charges our account with protest fees, $1.95, [Checks returned to correspondents must be charged to their general account, as they were previously credited under that account when the checks were received as a deposit. Checks returned unpaid which were deposited by a dealer, arc usually sent to the dealer and his check requested to cover the amount.] The following notes due in this city to-day as per collection tickler have lieen collected for credit as specified: National Lafayette. Cincinnati, Porter & Co.'s note. $25450; exchange. $25.45. . .. Detroit National. R. E. Lamar. $470.80; exchange. 47c. . . Flour City National. Minneapolis. Hazard & Son. $9258.67; exchange^ $9.26.... Metropolitan Bank. Buffalo. Daniel Frohman. $36395.40; exchange. $18.20 ... First National. Chicago. Western Electric Co., $78500; no charges. Charged to Western Electric Co. as per instructions. National Commercial. Albany. L. E. Quigg. $7260; exchange. $3.63 .... National Bank of Commerce, Kansas City. John Monroe & Co.. $33296.87; exchange. $33.30. . . .Total exchange credit, $90 31. Certificates of deposit issued to-day: Ashley Ladue. $375... Mrs. Gertrude H. Murdough. $500. Charles H. Parkhurst, $3000 . . .Edward A. MacDowell. $750. Cashier's checks issued to-day: JJ7601. Harvey Fisk & Sons. $50000. . . .JJ7602. Dunham. Buckley & Co., $34750 ...JJ 7603, Goldman. Sachs & Co.. $47280.15. . .5 7604. Vermilye & Co.. $195000.. #7605 W H* Kimball. $8762.50. .:? 7606. U. C. Varick. $313558. . ■ .57607. H-O Company. $1244271 • . . J7608. Columbia National. Washington. D. C. $7500. .. .57609. Mutual Life Insurance Co.. $3000. .. .57610. Corlies. Macy & Co.. $37.18. .57611, J. C. Hendrix. $833.33. ■ 576i2. E. O. Leech, $416.67 . . .57613, H. H. Swasey. $533.33 ...57614. N.J. Stone. $166.66. .. .57615. H. K. Nevius. $125. . .57616, W. M. Bushncll, $125 57617 J. W. O'Neill. $100 . . .57618, Bertha Crocker. $60. . . .57619. Charles Mann. $45. . . .57620, S. Mountain, $75.' Customs checks issued to-day: 5381. Denny. Poor & Co.. $3560.20. .. .5 382, New York Rublicr Co., $1170 .5383, Edward King, $825. . .5384. Andrew McLean & Co.. $349.27. . . .5385. Denny. Poor & Co." $24.75 -5 386, New York Rubl>er Co., $13.45 ... .5 387. Andrew McLean & Co.. $92. 18. The following checks and certiticates were paid by the first teller, or received from the clearing-house : CasAur's Checks— 'X 7^X2. James G. Cannon. $8152 50. .. .57535. Wm. H. Porter. $1942.21 ...57589 J. Edward Simmons. $92.46 . . .57592. Ellis H. Roberts. $160.48. . . .57594. W. H. Rogers. $38.04. . . .57599 Morton. Bliss & Co.. $20000. .. .5 7611. J. C. Hendrix. $833.33. .. .5 7612. E. O. Leech. $416.67.. 57613" H. H. Swasey. $333-33 -..57614. N. J. Stone, $166.66. .. .5 7616. W. H. Bushnell. $125 57617 I W O'Neill, $100. . . .57618, Bertha Crocker. $60. " J- - Certificates 0/ Deposit— Chsirhs Dudley Warner. $2500... R. W. Gilder, $490 ...E. C. Stedman $72.16 Mrs. William C. Whitney. $3450.90. Customs checks returned by Assistant Treasurer: 5374. $358.29 . . .5375. $183.40. . . .5376. $1269.95 5377. $76.19 ...5378. $17-25... 5 379. $250... 5 380. $332.82. Certified checks paid this day (these checks will first be entered in the certification-book under date of October 2, the amounts written in red ink and the total carried to the general debit book): Bulkley. Dunton & Co.. $48700.... Knickerbocker Trust Co.. $75000. .. .Morton, Bliss & Co.. $35000. .. Samuel Sloan $25000 $8618.14 .. .Total, $192318.14. The following correspondents should be credited for i month's interest upon the average monthly balance of their accounts at the rate of 2 per cent, per annum : Atlanta National, average balance, $15000. ..First National. Chicago, average balance, $451900.... Bank of Kentucky, average balance, $107300. [Correspondents who keep a deposit with us are allowetl interest upon the average amount of their credit balances. The credit of interest to banks is usually made upon the last day of the month and an interest slip mailed to each bank, showing the balance for each day during the month, taken from the balance ledger after the exchanges frr,m the clearing-house have been deducted for that day.] Received certificate from Treasurer U. S. of the destruction of $3840 of mutilated notes belonging to this bank. Deposited this amount in subtreasury of N«w York in legal tenders. [This amount is charged to Circulation account inasmuch as the circulation is reduced that amount for the time being National banks pay a semi-annual tax of one-half per cent, upon the average amount of their circulation, it is therefore 50 THE GENERAL BOOK-KEEPER evident that this sum which is temporarily withdrawn from circulation should be deducted until the new notes have been received to replace them. The new notes will be forwarded from Washington upon advice of deposit by Assistant Treasurer and upon their receipt Circulation account will be credited.] Forwarded to Treasurer U. S. for redemption $20000 notes of other National banks, requesting him to send us $1 com certificates in exchange. ^ [This will be charged to the account of " Other Funds with Treasurer U. S.." which account will also be credited when the new cert.hcates are received. 1 he Treasury I>epartment provides that the account of " 5 per cent. Redemption Fund " shaJI remain at a fixed amount, which necessitates the keeping of sums sent to be redeemed, separate from tLt account Ihe express charges on amounts sent fur redemption are paid one-half by the bank and one-half by the Treasury Depart^ mat. 1 ne charges are deducted by the Treasurer from the amount to be returned, expense being debited when the funds Z.T1 T r "";■ ^r"*"*^' "''" ''^" ^'"'°"^' '^"'^ "«^- -^ redeemablV at any subtreasurv of the UnU^ States, no entry being required as U. S. Certificates of Deposit or other funds would be received in immediate return.] Exchange account debit: On foreign time collections which would have been entered in collection and ^.ttance registers as per letters of advice, $86.99. . - -On cash collection remittances from collection credit DOOK, #1/1. 25* Exchange account credit: On bills discounted as per discount register, $172.85.. Deducted from deposit tickets as shown under second teller's proof, $,2.52. . . On foreigiwime collectio'is credited to del e" UcklerSI". "''■ *^'-^^ •••''" '''' '""' ^""""°"=* -'^^"^d to correspondents as per city collection FIRST PERIOD. GENERAL DEBIT BOOK. New York, October 2, 1897. Accounts Explanation Demand Loans Tint* Loans Hibernia Nat.. New Orleans Bills Discounted ^ Denny, Poor A Co. J. H. Newman Gilbert Manufacturing: Co. Boatmen's, St. Louis Profit and Loss Morton, Bliss A Co. First National. Chicago Hibernia National Detroit National Nat. Bank of Redemption. Boston Bankers' National, Chicago Denver National Central Loan and Trust Co., Des Moines Galveston National Old National. Grand Rapids Hibernia National Bank of California Boatmen's. St. Louis Second National. Toledo Haney Fisk & Sons jf 1257 Dunham, Buckley & Co. jj 1258 Goldman, Sachs & Cu. f 1259 Vermilye & Co. f 1360 Steinway it Sons $ ia6t Gilbert Mfg. Co. f 1,62 Redmond, Kerr & Co. #1263 W.H.Kimball 9,364 I'aid nole as per letter, 9/29 Per Discount Register Time loan 3(1208, chg. to acct., as per letter. lo/i Discount 1 1 1400, protested Protest fees on above Discount #13111, chg. to their •cct., as advised Discount Hi 3792. as per telegram Discount #14113. ThomasHill having failed Discount #14354 Draft for credit Collection acct. Advice of Time Collections A-L U-Z Banks 8750 42760 18 40000 Collec. tions 6000 .85; 18235 SO 89140 17420^90 54000 475862 General I 500001 I 34750 4728015 195000 12562 50 5050 "6739 57 880631 387035 >9 1500 1428070 1750408! 953,87 i 1 2967 '42 1 25 '20 1393680 « 274136 174,08 '289355 424,82 5* BANK BOOK-KEEPING GENERAL DEBIT BOOK— Continued. Accounts Explanation A-U MX Banks 1 ColUc- 1 tions : General Columbia Nat., Washington Advice of Time Collections 15700 35 Exchange On Time Collections advised per Collection Rexister 8699 On Cash Collections as per Col- lection Credit Book 171 25 Certifications Nat. Bank of Redemption City National, Dallas Dealers per Certification Boolt Transferred to credit of Flour City Nat., as per telegram Express ch>{s. on currency 91558 92 '33477 07 25000 21 75 Metropolitan Bank, Buffalo Forwarded per cashier's check to Columbia Nat., WashinKton 7500 Bank of California 1 •3 Expense Rent— Mutual life Ins. Co. for 3 mu*. in advance Stationery —Corlics, Macy * Co. Coal— Thomas ft Son Directors' fees Telegrams Electric Light Co.'s bill 3000 37 22 45 3 6 18 50 40 93 Nat. Bank of Redemption September salaries Protest feeson HuntftCo.'snute I 85 3350 First National, Chicago K. O. Uwson 1 30 Detroit National Stroeter & Son I 50 Hibernia National J. A. Stuart's check returned by Industrial Trust Co. 47 28 Columbia Nat., Washington Court & Co.'s check returned 372 85 Morton. Bliss A Co. Western Electric Co. Note returned by Bank of California, protest fees Note, City Coll. Tickler, chgd. as per letter of instructions 1 78500 95 Denny, Poor A Co. Customs check ^(381 3560201 New York Rubber Co. " #385 24 75 1170 Edward King Andrew McLean A Co. " «386 " «383 82s «3 349 45 27 Cashier Account " 8 »87 $7413, James G. Cannon 1 7515. Wro. H. Porter 92 18 8152 1942 50 21 1 7S8<), J. Edward Simmons tlSV, Ellis H. Roberts tTS-M. W. H. Rogers 9246 16048 3804 f 7SWi Morton, Bliss & Co. 20000 «76ii, J. C. Hendrix «76i2. E. Uech ^33 33 41667 87613. H. H. Swasey «76u. N.J.Stone 333 166 33 66 #7616, W. M. Bushnell 125 «76i7, J. W. oNeill too S7618, Iterthu Crebit Books 495857 643336 28 485974 77 04 ,1140236 I1378503 30; 48; •79633 22 33 723816 269868 45 1023983 75 26986845 '37850348 72381604 643336 33 403950805 GENERAL CREDIT BOOK. FIRST PERIOD. New York, October 2, 1897. Accounta Explanation A-L u z Banks 1 Collec- tions General Stelnway A Sons Time Loans Stj6i 12500 Gilbert Manufacturing Co. «i26a 5000 Redmond, Kerr A Co. " " «"«3 16492 •9 Interest On Time I.oans made this day On I>emand I.<>ans paid this day U. S. Bonds, 4S, $200000 950000 Hoffman Machine Co.'s stock 403 231 2000 1000 69 20 Exchange Per Discount Register t>73.85 Second Teller's deposits 12.52 Time Collections, Foreign 51.95 City Q0.31 327 63 Discount Charged Sundries per Discount Register 3403 49 Bills Discounted Collected this day per Discount Tickler Charged 10 Collection Agents, as per letters of advice 608446 20000 97 Chas. H. Baker Credited per Dis. Reg. f 15160 I417 87 Redmond. Kerr A Co. #15161 14845 W. F. Wakeman #15162 643690! Western Electric Co. «i5«63 24687 50 Stelnway A Sons #,5,64 56534150 Andrew McLean A Co. #15165 14648 23 Elliot L. Butler " *• " #15166 15909 33 #«5"67 485906' Ceo. C. Flint Co. # 151601 490839! Bulkley, Dunton A Co. " " •* #.5.70! :'437o« 4'l 53 BANK BOOK-KEEPING GENERAL CREDIT BOOK— Continued. Accounta Explanation William Clark John L. Riker Morton, Bliss St Co. Demand Loans Time Loans First National, Chicaero HIbernia Nat.. New Orleans Detroit National Atlanta National First National, Chicago Detroit National Boatmen's, St. Louis Columbia Nat., Washinarton Bank of California Buikley, Dunton & Co. Denny, Poor & Co. New York Rubber Co. Steinway A Sons United States Leather Co. W. F. Wakeman Certified Account Flour City Nat., Minneapolis Industrial Trust Co. Bank of California Nat. Lafayette, Cincinnati Detroit National Flour City National Metropolitan Bank, Buffalo First National, Chicago Nat. Commercial, Albany National Bank of Commerce. Kansas City Certificates of Deposit Credited per Dis. Reg. f 15171 «iS«7a «'5«73 # lias. C. H. While * Co. tf 1116, Union TrtiM Co. )tiao4, Kountze Bros. $ 1131, l.aidUw & Co. 9 iao6, Spencer Trask & Co. f ii<)8, F. M. Lockwood # iao8. Denny. Poor & Co. Draft for credit of Collection acct. I>raft for credit Coll. acct. Time Collections per Coll. Reg. A-L 443 Checks certified by tint Teller Transferred from acct. of Nat. Bank of Redemption J. A. Stuart's check retomed unpaid Protest fees on note relumed Time Coll. as per City Tickler Cashier Account Ashley Ladoe Mrs. Gertrude H. Murdoogh Charles H. Parkhurst Edward A. MacT>owell f 7«oi, Harvey Fisk A Sons 1 7*»». Dunham, Buckley & Co. $ 7*103, Goldman, Sachs Jk Co. 1 7604, Vermilye A Co. f 7«o5, W. H. Kimball t7M>, U. C. Varick f7«o7, H-O Company f 7&>8. Columbia Nat., Wash- ington 1 7609, Mutual Life Ins. Co. S 76>o, Corlics, Macy A Co. #7«ii, J. C. Hendri* «76", E.G. Leech 25 U-Z 156880 779*032 Banka 469248 824967 439» 1 97901 1212450 618248 211538 734075 104895 1428303 4t45 3717 35000 '95 25424j55 470:33 9249:41 3637720 78500 7256 33263 37 S7 Coliec- tiona General I7420I9O 54000] 4758 6j| 37600! 125000 1821362 712950 33180 74000 8750 47 28 225035 99 375 500 30CO 750 500CO 34750 47280 195000 8762 3' 35 12442 7500 3000 37 833 41667 »S 50 58 71 18 33 THE GENERAL BOOK-KEEPER GENERAL CREDIT BOOK— Continued. Accounta Explanation A-L M-Z Banks Collec- tions General Cashier Account #7613. H. H. Swasey «7enny, Poor A Co. #382, New York Rubber Co. t 383, Edward King #384, Andrew Mclean & Co. 1 385, Denny, Poor & Co. , $386, New York Rubber Co. j 45 75 3560 1170 825 349 24 13 20 27 75 45 Atlanta National Jf 387, Andrew Mcl^ean & Co. Interest on average balance 2% 25 178 992041 92 18 First National, Chicago Bank of Kentucky, Louisville Credits .t it ,, Footings of Credit Rooks 369932 559"4 89 35 382985 II •7 83 '9 70 186498 58 633295 54 I241192 262725 38 '53957005 26272538 1 1241 192 633295 S59"4 70 54 35 4235898 02 93* The General Balance Le<)g:er. — After writing up the general debit and credit books for ihe first period, the student will transcribe the general balance ledger as illustrated on pages 56 and 57. The general ledger will then be opened from the general balance ledger, beginning with the balances under each account as shown under date of October i. The small figures below the balances represent the total debit and credit to each account as posted from the general debit and credit books at the close of business, October i. These latter amounts should appear in the general balance ledger in red ink, and are to be posted to the general ledger by the student after he has transferred to it the balances under date of October i. The pur|)ose of the balance ledger follows from the necessity of preparing a statement of the bank's condition each morning before ten o'clock. This statement affords the president the facts upon which to base his decisions for the day. It being impossible, therefore, to post all of the previous day's transactions in detail to the general ledger, the single total, both debit and credit of each account, is thus jxjsted from i>encil footings in the general debit and credit l>ooks to the general balance ledger, and the new balance carried forward. These new balances give the material for the .Statement, and will also serve as a trial balance of the general ledger when posted. All of the balances will be transferred to the general ledger as given, r.xrf/>/i//j^ under Customs^ Certificates of Deposit, ami Cashier accounts. Items under these accounts should be posted sei^arately, and the debit amount posted /// every case opjxjsite the credit amount. The red-ink footings shown on the general balance ledger will not l)e entered under these three accounts, but itemized in detail as s|>ecified on the following pages. Payment of items l)elonging to these accounts should not be made without first comparing with the amount entered in the ledger when issued. Certified checks when paid are entered in the certification-book as explained under duties of paying teller (35) and need not be itemized in the ledger. SS BANK BOOK-KEEPING GENERAL BALANCE LEDGER— DEBITS. October 1. October 2. BILLS DISCOUNTED DEMAND LOANS TIME LOANS STOCKS AND BONDS U.S. BONDS TO SECURE CIRCULATION PREMIUM ON U. S. BONDS EXPENSE TAXES EXCHANGE INTEREST TO CORRESPONDENTS COLLECTION BANKS CASH FIVE PER CENT. REDEMPTION FUND TREASURER U. S. Dr. 3549153 aj»oS4 3006659 3504Q0 2939826 320175 486704 600000 4«4a4 32231 17' 24000 31362 34SO 418843 170750 4760638 3228742 rfooo lOOOO toooo «5»aW44 7« 97 75 3a 45 66 22 /6 26 Si 58 oS 70 9« Cr. 459000 175120 400000 lojao It H0470 33 1 93 92 toooo Dr. i33"38 3x81929 2860001 476384 ot 54 4<»4a4 32403 24000 34813 479"3 4669999 27000 lOOOO I57673I7 75 59 32 45 66 38 07 60 05 87 Cr. The following certified checks are outstanding and are to be entered in the certification-book under date of October i, preceding those which have already been entered from the paying teller's work for the first period: Bulkley. Dunton & Co.. $48700.... G. G. Haven. $61480.50. .. .John L Hiker. $275.45 ...Morton, Rliss & Co., $20000. $35000. $6981.86 Knickerbocker Trust Co.. $75000. $469.25. $372.75 Samuel Sloan'. $50000, $25000. $8618.14. These amounts should be checked off, the dealers having been previously debited. The outstanding items under the following accounts should be entered separately in the general ledger: Cashier Account— k^^x. 10, 33250. Hazard & Co.. $21.69; Sep. 27. #7412. James G. Cannon. $8152.50; Sep. 28. 37480. Lazard Fr^res. $12320; Sep. 29. 37535. \Vm. H. Porter. $1942.21; Sep. 30. 37560. C. K. Sprague! $4127.58; Sep. 30. 37582. Speyer &Co.. $25000; Sep. 30. 57586. .Seth Low. $4985.42; .Sep. 30. 37589. J. Edward Simmons. $92.46; Oct. i. 37591. D. O. UnderhiU. $800; Oct. 1. 37592, Ellis H. Roberts. $160.48; Oct. i. 37594. VV. H. Rogers. $38.04; Oct. i. 37507. Allen Durand. $11.27; Oct. i, 37598. Blair & Co., $9726.62; Oct. I, 37599. Morton. Bliss & Co., $20000; Oct. i, 37600. United States Leather Co.. $7870. [The number of a cashier's check does not sufficiently establish its identity, consequently the name of the person to whom it is given should be entered in the ledger when issued. Cashier's checks, excepting for salaries of clerks, are rarely presented for payment the same day as issued, but arc generally returned among the exchanges from the clearing-house on the day following.] THE GENERAL BOOK-KEEPER GENERAL BALANCE LEDGER -CREDITS. October 1 . October 2. Dr. Cr. Dr. Cr. CAPITAL STOCK 1200000 1200000 SURPLUS FUND 600000 600000 PROFIT AND LOSS 22326 04 22326 04 DISCOUNT II9617 4SO 70 120067 70 INTEREST 102725 J90 64 19 IO3315 83 EXCHANGE /*/ S5 375 iqo 09 60 383 84 COMMISSION 4434 23 99 4457 89 PROFIT ON BONDS 1000 1000 CIRCULATION 540000 540000 BANKS 370400 46I237I 410005 67 90 4652577 57 A-L LEDGER t>/S3t>4 4330620 557300 90 to 4272557 M>Z LEDGER 59037» 70 3967I7I 421840 21 2/ 3798638 75 CERTIFICATES OF DEPOSIT aooo 2II6I 3197 73 40 22359 13 CERTIFIED ACCOUNT 216400 273457 274840 88 07 331897 95 CASHIER ACCOUNT 425700 I 1974 I 401207 09 iS 95248 27 CUSTOMS CHECKS 1 1S40 97 1 1840 24S7 15926844 97 90 91 2487 90 15767317 87 Customs Ckfcks—OcX. I. G. G. Haven, 3374, $358.29 ...Denny. Poor & Co.. 3375, $183.40; 3376. $126995. . . .Bulkley. Dunton & Co.. 3377. $76.19. . . E. R. Durkee & Co., 3378, $17.25. . . .Gilbert Manufac- turing Co., 3379. $250 New York Rubber Co., 3380. $332.82. Certificates of Deposit— Feb. 14. 1896. Baul & Co.. $1359.13; Mar. 12. 1897. Henry H. Rogers, $4500; Apr. 27, R. S. Hayes. $5000; June 2, Charles Dudley Warner. $2500; July i, R. W. Gilder, $490; July 17, Whitelaw Reid. $2120.60; Aug. 25, E.C.Stedman. $72.16; Sep. i, F.Cromwell, $278.50; Sep. 19, Mrs. William C. Whitney. $345090; Oct. i. F. P. Olcott. $2587.84. 94« Posting;. — .As has been explained, posting to the general balance ledger precedes posting to the general ledger and the student will follow that order. In |>osting to the general ledger from the general debit and credit books, the student will post in detail under Customs, Certificates of Deposit, and Cashier accounts, making full explanation of each item in the ledger. The book- keeper finds it convenient where such accounts cover several pages, to keep a loose sheet within the ledger containing the account in brief; that is, merely posting the total debit and credit as in 57 ! BANK BOOK-KEEPING other accounts, and afterwards posting the items to the ledger account in full. The total debit and cred.t as posted under each account is added to the pencil footings of the pre iou da^^ "^r^^:!-;::::^. - ''- -^-^'^ -^- - --^p^- -th the j^ian^sh^::^ The footings of the sjx^cial columns are next p<«ted to their respective accounts after which the aggregate of the general debit book will be posted to the creiit of Cash account and he aggregate of the general credit book to the debit of Cash account. . 1??* 7^ ^^«*^««' Ledgers.— The amounts in the special columns of the general debit and credit books may now be posted to the dealers', bank, and collection ledgers. The certification- bTthe^"t' :t at iLr' 'TT' '"^ '-'''-'^ '^"^^' ^-^ ^""^^^'"" '-^^ win als^^Xd by the student at th.s po.nt. The Uems are simply checked off as posted, the ledger folios not met^h^oTfh ' " •^"7""- '" '''^' '^"^^^^ *^^ ^^^-"^« -- --"«-^ According to the vowe method, the position of an account being thus readily located th. H^^r'*"^ to the dealers' ledgers the following abbreviations are in use as explanations- If the debit amount consists of but a single check, no explanation is made; if more than one a check mark is made in the explanation column; if a certified item, the letter C, followed by a chick mark if more than on e^ Straight deposits require no explanation. N for note, R f c em^tance I) for discount and other symbols may be used with discretion. Collection it^ms are designed by the name of the payer. Dates should always be entered, the current date governing in ^e of Items advised by correspondents. K"vcrning m case ot n,.1.7^', ';'^7'1!"'k', ^"^^^'" ''^""''^ ^ '^^'^"^^^ ^' '^^ ^"^ "f ^^^h month. The student will make a list o the balances of each of these ledgers and compare the total with the balance shown m the general ledger at the end of each period. MORTON, BLISS & CO. 1^ Aug. I • V 8316 52 Aug. I Balance 165 180 Q7 c ^ Note— .Speyer & Co. 21374 9500 60 Kimball & Co. 26209 316 25 50 Express on coupons Exchange— Dallas, Tex. I 4 75 83 H. W. Lewis Coupons— C. & A. R. R. 2790 150Q 2 V c v/ Draft— Armour & Co. Dis— Smith & Son 31210 44750 17813 6ono 18 22 a Dis jj 12845 Randolph & Co. Kidder, Peabody & Co. 95000 54102 2600 lOOOO 47 Protest fees on above — . I 35 A. 11. NichoU 450 FORM OF dealers' LEDGER. On the following page is presented the form of what is generally known as the " Boston" ledger, which has found favor among many banks where the force is small. The B<,ston system does away with debit and credit books, requires but a single ledger, and the entries being mac" direct from the deposit tickets and checks, the use of duplicate balance ledgers is thereby av«rded rhe best system however, and particularly for large banks, is one that requires the use of duplicate edgers as in this set one the old style or dealers' ledger, and the other a skeleton or l^lance ledger^ The balance ledger should be proved everyday, and frequent comparisons should be made with the corresponding dealers' ledger. The postings in the dealers' ledger should be called back and checked from the debit and credit books as a guard against error. To facilitate this process, two sets of debit and credit books may be employed, and the checking done on alternate days. THE GENERAL BOOK-KEEPER THE BOSTON LEDGER. Monday, November x, 1897 Tuesday, November 3. 1897 NaniM Balance Oeposita 1 Check* in Detail Total Checks Balance 1 Depositt Checks in ; Detail 1 Total 1 Checks Balance A. B. Anderson 1258 20 150 42 19 no 10 238 628 16 30 38 161 74 1246 46 D500 317 24 36 213 90 50 250 40 66 1813 30 Kenson & Ruring 4812 60 Di9no 500 76 49 70 877 95 6334 65 C981 1200 75 100 328 175 612 16 50 1215 7300 74 Certificates of Deposit 16848 25 400 19248 25 1500 17748 25 Forward 22929 05 4950 1039 69 26829 36 2998 99 < t 2966 06 26862 29 DEALERS' BALANCE LEDGER. NaoMs Monday Tuesday Wednesday Thursday Noveml>er i, 1897 November 3, 1897 November 3, 1897 I November 4, 1897 Aarons, Julius E. 260 3500 15400 28 25 50 I 25 25 40 30000 2784 16240 17 1 '49S 395 t2 50 4000 33569 52 34675 1 1 9C Abbott & Parkman IJOOO 4000 10 15461 5ucx)u IJOOO 2ono 20000 49461 28 25 22600 500 1 60000 12400 50461 28 99761 28 Allerton.J.W.&Son iOOOO 5000 32400 85226 31260 so 80 20 45000 102626 1 75«x) 2S5CX) 1 16365 75 40 219865 75 American Trust Co. 26r43o 30000 320942 541650 12 tsnss 45000 120000 185200 58II72 40 S3IOOO 36000 405300 709604 547904 40 Forward S9 BANK BOOK-KEEPING @2^^^^=^^^^y The National Union Sank, RESOURCES. LOANS AND DISCOUNTS. Viz: DEMAND LOANS. •* •• TO BROKERS, TIME LOANS. MLLS DISCOUKTED, BONDS AND STOCKS, U. 8. BONDS DEPOSITED WITH U. 8. TREA8. PREMIUM PAID ON U. S. BONDS. CDRRRNT EXPENSES. TAXES PAID. eXCHANOE, INTEREST PAID, DQE FROM NATIONAL BANKS. ** ** 8TATI BANKS. CASH. Viz: EXCHANGES FOR CLEARING HOUSE. CASH ITEMS, NOTES OF THIS BANK ON HAND, ''gold coin. gold trea9. certificates. " clearing house crfs. SPECIE. Vlzi/ SILVER DOLLARS. SILVER CERTIFICATES. SUBSIDIARY SILVER COIN. ^MINOR COIN, LEGAL TENDER NOTES. U. S. CERTIFICATES OF DEPOSIT. TREASURY NOTES. H REDEMPTION FUND WITH TREAS. U. S. OTHER FUNDS WITH TREAS. U. 8. ^ J^ ^f5o 33/ ^^6^ It /// ^c in^ f ^^ Hi) i^^i^C?C> 3^7 iV, -^'o// ^0 3 ^HSri3> ^>C^i /^o/'^ /f/^ 3^ ///// 0^0 ooc I^1±hi1i1 oy 6o THE GENERAL BOOK-KEEPER ofe^n ^U3>(oC i-i ^^y INDIVIDUAL DEPOSITS LESS EXCHANGES AND CASH ITEMS. ULL::^. ^f7 I (poo ffl U^3 /•4-t Ll^ f3 13 4k f yy^yi/in^lp S^o ooc ^icp^y^-^-^i^ .fYt i1 V4, on'd^^i^f<^ o4 63^ I9(ii/f^ii\^i O P 6l FIRST PERrOD. BANK BOOK-KEEPING GENERAL BOOK-KEEPER'S PROOF. New York, October 2, 1807. Notes of this Bank Gold Coin Treasury Certificates C. H. Certificates Silver Dollars Certificates Subsidiary Silver Coin Minor Coin l^al Tender Notes U. S. Certificates of Deposit Treasury Notes First Teller's Total Mixed Currency (Third Teller) Exchanges (Second Teller) (Third Teller) City Office Foreign Office Cash Items CASH (Balance Oct. i) Credits, A-L " M-Z Banks Collection Banks General I>ebits, A-L *• M-Z " Banks Collection Banks General FlrM Teller 560000 8670 1230000 1487 71510 6216 S44 472685 1 10000 105000 3566112 305479 2871591 I 3735 > 7 573958 ao34 500 20 45 65 32 97 59 61 99 559«i4 633295 1341193 262725. •539570 35 54 70 38 05 643336 33 723816 04 '378503 48 269868 45 1023983 75 ■•cmid Teller 3000 30370 1.^)0 «5 aoooo Tatal 86 44785 86 563000 8670 1230000 1487 91880 7616 560 492685 I 10000 105000 305*79 20 31 2916377 32 83 I950011 4866389 «9 09 4669999 4235898 8905897 05 OS 07 4039508 4866389 02 THE GENERAL BOOK-KEEPER 96* The Dealers' Balance Ledgfer* — The form of dealers' balance ledger on page 59 is in general use in banks where duplicate ledgers are used for dealers' accounts. The credit balances are carried forward each day in pencil, and the total deposits, collections, etc., written immediately above, in order. On the debit side, the aggregate amount of checks paid through the clearing-house is entered in red ink to distinguish them from those paid over the counter, that they may be added separately and proved with the settling clerk's statement. The aggregate balances should agree, daily, with the balance of the corresponding dealers' ledger as shown in the general balance ledger. 97« The General Proof. — The general book-keeper's proof on preceding page will be readily understood if carefully studied in connection with the three proofs previously presented (28), (38), (82). Inasmuch as the dealings of a bank concern themselves with cash as a commodity, their final expression will be found in the Cash account and the fluctuations of the business therein faithfully traced. If to the previous day's balance be added the total of the general credit book, and from this sum the total of the general debit book deducted, the remainder should agree with the actual cash on hand. In the accompanying proof it will be seen that the cash held by the third teller has been entered as "mixed currency." Owing to the extra demands upon the time of the incumbent of this position, the classification of his currency before delivery to the first teller is usually not required. 98* The Daily Statement. — The titles of the accounts in daily statement book are usually printed that the amounts may be quickly entered as compiled from the general balance ledger and the general book-keeper's proof. It shows the condition of the general ledger as condensed in the general balance ledger, together with a detailed exhibit of the Cash account. From this statement are obtained the data for computation of reserve, as also the principal facts required in preparing reports to the Comptroller of the Currency. In addition to the daily statement indicated above, the regulations of the clearing-house enforce the use of a statement book which will show the daily averages for the week of loans, discounts, specie, deposits, circulation, etc. A desirable form for this purpose should provide for the following columns: Date, Due to Banks, Certified Checks, Gross Deposits, Uncollected Checks, Net Deposits, Commercial Loans, Total Loans and Discounts, Circulation, Required Reserve, Excess, Legal Tenders, Specie, Redemption Fund. By dividing the total of each column at the end of the week by six, the daily average is found, and complete information for the clearing-house statement is at once available. The Daily Statement presented on pages 60 and 61 exhibits the condition of the general ledger at the opening of this set. As the student will be required to prepare a similar statement from his own work at the close of the first period, the photo-engraved form there presented cannot be too carefully studied at this point. The method of computing reserve will be explained in detail under Chapter VIII. MEMORANDUM OF TRANSACTIONS-Continued. 99* Second Period. — November i — The loan clerk reports demand loans made as follows : it 1265. W. C Sheldon & Co.. $45000. . . .Jf 1266, A. M. Kidder & Co., $21871.60. . . .jj 1267, Dominick & Dickermann, $38900 1 1268, Day & Heaton, $75000. Time Loans: jj 1269, proceeds credited to Redmond. Kerr & Co.. $40000; interest 30 days. $_-__; total, $ 31270. proceeds credited to Lord & Taylor. $25000; interest 60 days, $ ; total, T #1271. cretlited to William Clark. $4362.50; interest 90 days, $ ; total, $ jf 1272, by cashier's check to Strong, Sturgis & Co., $95000; interest 30 days. total, $. .Total interest credited. Hills discounted debited as per discount register, register for this day. . Exchange, Discount, Dealers, crediteo as per discount 63 BANK BOOK-KEEPING The following loans were paid to-day: Demand— t fny Hirvev FUlr tr <;««= *.. • ft 12 !Q Goldman Sirhe «.r^ c,o , , * '"57. "arvey »• »sk & Sons. $50000; interest, $250 . Jisr^lr'" ''""""'• '^""'"S""' "''""^ """ o" '" K-cra. accoun. for crcdi, collection .cco„„, .h. p^rdetrz c:ir;i;e^iTc"artirhar;™';r '"- '°",°"'"'-' —»"-"«. f~- -i-ici, « IS165 charees i 10 romr.r i* c ^""'""^ ^ '5i66. charges i 20. . . . Bank of California. Discount Kansas City 'co e Ln N s'T^ h/rgTr ' "^^ ^^''''"^' ^-"^ of g,„.n,erce Orleans. Collection J ,3 larl; 4 ^Lu!J^'^^^ ^ '**»'°"^'- ^ew l/l- Dehir Pvrh, f , ' -° ••'"'^"^•"^1 Trust Co.. Providence. Collection Nos. 19 26 changes r-u ' . ^''f^^*"^'*= ^'"' ''^'^'S':^ on Discount Nos. 15166 and 15165 as above. ^ Checks certified this day as per certification-book. A-L $ • M-Z $ Paid expenses as follows: Directors' fees. $45 .... Telegrams. $7.25 October salaries S»co Expressage on $22000 certificates and notes from Treasurer U S $3 30 ^^^ * " ' * Received quarterly dividend of ,,^ per cent, on $300000 Klondike Improvement bonds. :=:i, ?,s j: ^^S^':s£S3S^^^^^ Commercial Bank, Syracuse, re.urns unpaid check remitted to u> for credit by Fourth National Phil,rf 1 tz. ^n-^an ^Xlt"' "■"""" "• - "' ""'-' '^°""""'^''' -'^•" '■ P°y-»^n;';r d'hy J^ ^,6« r r rK • . *"'""' »M3 M- . . .!t7633. Allen Durand. $300. , 7^^ E £ ^a °- r .*,?','■ '^■,''- Ch'^'-an. $=00 .S7636. David E. Austin. Receiver of Ta„s Jijo ' ,„ rr t"i ''^-'' •»■"- -"- -j;^' ert Manufactunnir Co tf in-* ^^;inw^TL::^^.^--j:tS--^^ The following checks and certificates were paid by the first teller or received from the clearing-house • CasAurs CA,cAs-i(74So. Lazard Fr^res. $12320. .. .37582. Speyer & Co $2^000 «tc«A% „ ,' 8 7633. Allen Durand. $300. . . .1 76^ E E Esdaile i^co *,/;«, u r^ / -.' ^"^^^^y^ *333.33. • . . i-. ^-tf . r r. . . tsuaile, J250. . . .;f 7607, H-O Company. $12442.71 C.r/.A./..,//>;^.«/ Henry H. Rogers. $4500. .. .Whitelaw Reid. $2.20.60 Ashl^ lldue $,7, Mrs. Gertrude H. Murdough. $500. .. . Edward A. MacDowell $750 ^ ^^^ ' ' " ' .3«.twr.'',tr4^'s. *^^^-- •■■*^'=- "•^>-«3»3. m....>M S34,......,385, »=«.r5.... CVr/j/f^,/ a«;t._(To be entered also in the cerlilication-book)-Chas. H. Baker $io7! to C C Haven, $6,480.50. . . . A. Isclin. Jr., $.500. . . .Knickerbocker Trust Co., ,74..5o, S3460, uJ^^'X^^fs'.^: THE GENERAL BOOK-KEEPER Morton. Bliss & Co., $29000, $9989.19, $20000. $6981.86. .. .John L. Riker, $275.45 Samuel Sloan, $50000 Steinway & Sons, $3625.45 United Slates Leather Co., $15610.50, $10000, $2400, $60000. The following correspondents should be credited for interest on their average monthly balances, rate 2 per cent, per annum (accurate): National Hank of Redemption. Boston. $378194.88. . . . Detroit National, $151881.11 Wisconsin National, $65342.68 Industrial Trust Co., Providence. $392988.25 Bank of California. $570557.26 Hiberiiia National. New Orleans, $99373.79. Received from Treasurer U. S. $20000 coin certificates in exchange for National bank notes remitted him for redemption October 2; also $3840 new bank notes to replace those destroyed October 2 (page 50). Forwarded to Treasurer U. S. for redemption $10000 notes of other National banks. _ Received $2000 notes of this bank redeemed by Treasurer U. S. Deposited same amount with Assistant Treasurer in U. S. notes. Amount charged off for taxes, $3360. [It is customary among banks to distribute the annual amount paid for State and City taxes among the several months of the year. Supposing that the tax rate should be fixed at 114 and that the assessed value of the stock were 200. the tax then upon each share of stock would be $2.28. Multiplying by 12000 (the number of shares comprising the capital stcx:k), and we liave a total of $27300 to be paid let us say on November i. The jjencral ledger shows that a total of $24000 has already t)een piid, or $24ix> each month, leaving a difTerencc to be paid at this date of $33(10. DifTerent plans may be pursued in making credits for the several monthly payments. Some open a Contingent account, others issue certificates of deposit for the several sums, etc. In this instance, the payment being the final one, a cashier's check will be issued.] IOO« Third Period* — December i — The loan clerk reports demand loans made as follows : ^1273. J. S. Baclie & Co.. $120000 51274, Ladenburg, Thalmann & Co., $64300 51275. C. C. Edey & Son. $80000 51276. J. W. Davis & Co., $140000 51277, Rogers & Gould, $19575. Time Loans: 5 '278. proceeds credited to Otis Brothers & Co., $60000; interest 60 days, $ ; total, $ 5'279. proceeds credited to Chas. H. Baker, $12600; interest 38 days, $ ; total, f 51280, proceeds credited to G. W. Adams, $17000; interest 44 days, $ ; total, f . . .51281, proceeds credited to J. H. Newman. $20000; interest 30 days, $ ; total, $- Blake Bros., $75000; interest 30 days at 4 per cent., $ ; total, $ 5 1282, by cashier's check to Bills discounted debited as per discount register. . . .Exchange, Discount. Dealers, credited as per discount register for this day. The following loans were paid to-day : Demand— jf 1265, W. C. Sheldon & Co.. $45000; interest, $225 5 1268, Dly & Heaton. $75000; interest, $375 51 190, Speyer & Co., $400000; interest. $2738.76 51 160, Kountze Bros., $750000; interest, $3924.50 Total interest credited Time — 5 1262, Gilbert Manufacturing Co., $5050 5 1269, Redmond, Kerr & Co.. $40200 5 1272. Strong. Sturgis & Co., $95475. Bills discounted due in this city to-day as per city discount tickler have been paid in cash. Debit Atlanta National for draft on general account, their collection account having been previously credited for same. $1247.65. Letters advising payment of time collections were received from the following correspondents, from which the proper debits and credits are to be made, less exchange, and the particulars extended in full in the collection and remittance registers, collection and discount ticklers: National Bank of Redemption, Boston, Collection 539, Discount 5 1 5164 less i, 10 per cent ...First National. Chicago. Collection Nos. 8. 30, 45, no charges. . . .Boatmen's, .St. Louis, Discount 5 15188 less i, 20 Bank of California, San Francisco. Collection Nos. 2. 7 less i 10 Commercial Bank. Syracuse. Collection Nos. 35. 56, 61. Discount 5 •5'6i less i 20 Industrial Trust Co., Providence, Collection Nos. 38, 53, 59 less I/12 Denver National, Collection 527 less l 20 Second National. Toledo, Collection 564 less i/io ... Atlanta National. Collection 541 less 18 Bank of Kentucky, Louisville, Collection 5 67 less 18 Galveston National, Discount 515168 less 14 Fidelity Trust Co.. Discount 515179 less i/io Tacoma National, Discount 515180 less i, 10 Detroit National. Discount 5 15185 less i 15 Debit Exchange for charges on Discount Nos. 15161, 15164. 15168. 15179, 15180, 15185, 15188 as above. Checks certified this day as per certification-book, A-L, $ ; M-Z, f Boatmen's Bank, St. Louis, telegraphs us to transfer $35000 to Hanover National, City, for credit of Tootle, Lemon & Co., St. Joseph, Mo. (cashier's check"). Paid expenses as follows: Stationery. Homer Lee Bank Note Co., $235.48 Telegrams, $13.25.... Directors' fees, $45 November salaries, $3678.50 Expressage on $10000 U. S. notes from Treasurer U.S.. $1.50. Sold $300000 Klondike Improvement Bonds at 165 and commission at 1/8 per cent. The following items due in this city to-day as per collection tickler have been paid and credited, less exchange, as specified: National Bank of Redemption. Nos. 15 and 51. exchange 1/20 First National, 65 ^la.ii !' BANK BOOK-KEEPING Chicago, Nos. i8. 54, and 88. ft 18 charged to E. R. Durkee & Co Bank of California. Nos. 21, 57. 89. and 90. exchange i/i2. . . .Boatmen's, St. Louis, Nos. 62 and 92, exchange I/8. . . .Detroit National, #69. exchange l/io Hibernia National, Jf 104, exchange 1,8 Total exchange credited. Industrial Trust Co. return unpaid check remitted to us for credit by National Bank of Commerce, Kansas City, $1200... We return check remitted to us by National Lafayette. Cincinnati, payment refused by Querrara & Somborn, $312.50. Cashier's checks issued to-day: ^7637, Goldman. Sachs & Co.. $78629.03. . . .87638. Dix & Phyfe. $3151.40 ....87639. Denscomb & Jennison, $6439.64 .... ft 7640. Blake Bros., $75000. .. 87641, Hanover National. $3 5000... ft 7642, Homer Lee Bank Note Co., $235.48. Certificates of deposit issued to-day : Hamilton W. Mabie, $2450. . . .Bradford Rhodes. $20000. ...CM. Depew, $14750. .Frank Thompson. $9000. . . .John A. McCall, $35000. . . .Geo. W. Bidwell.' $3000. Customs checks issued to-day to be charged to dealers: ft4oo, Gilbert Manufacturing Co., $4758.12. . . ft4oi, Bulkley, Dunton & Co.. $3118.50. . . .ft402. Lord & Taylor. $9768.45. . . .8403, Denny. Poor & Co., $34.75 . . . .8404. H. Maillard. $123.98. . . 8405. Andrew McLean & Co.. $367.28. The following checks and certificates were paid by the first teller or received from the clearing-house: Cashier's Checks— t^ifM, C. E. Sprague, $4127.58. .. .8 759'. t)- O- Underhiii. $800. .. .ft 7597, Allen Durand, $11.27. . ft 7601, Harvey Fisk & Sons, $50000. . . .ft 7606. U. C. Varick, $3135.58 . . .87608. Columbia National, $7500. .. 87615, H. K. Nevius. $125. .. .57619, Charles Mann, $45. .. .87620, S. Mountain. $75 ... . ft762i, Holbrook & Co.. $16069.01 ... .ft7622. liUike Bros:. $49359-72 •• .87623. F. VVallen. $17412.50. .. .ft 7624. Kissam. Whitney & Co.. $47161.05.. . .ft 7625, W. C. Sheldon & Co.. $45000 . . .ft 7626, A. M. Kidder & Co.'. $21871.60 .57627, Dominick & Dickermann. $38900. .. .ft 7628, Day & Hcaion, $75000. .. .ft 7629, Strong. Sturgis & Co., $95000. Certificates of Deposit— Q. H. Parkhurst. $3000... R. S. Hayes, $5000.... F. Cromwell, $278.50 F. P. Olcott, $2587.84. . . Mrs. Theodore Sutro, $400. . . .Thomas Hunter, $200. . . .Walter L Hervev $700 Baul &Co., $1359.13. ' ■■■■ Customs Checks-tiZ'i, $192.87. .. .ft 389, $1200. . ..ft 390. $3160. .. .ft 391. $5843. .. .ft 392, $49082 ft 393. $4462.80. ... 8 394. $43362 .... 8 395. $378.43 ... 8 396. $18. 16 .... 8 397. $4471-35 .... 8 398. $2000 ft 399. 5875.43- Certified Checks— (To be entered also in the certification-book)— Morton. Bliss & Co.. $2471.87, $380 06 Knickerbocker Trust Co.. $372.75. $12.73. $36950. $44760.29. . .J. H. Newman, $44.90. . . .G. G. Haven. $7000 . . . .United States Leather Co., $1950. $45475. $17840.26. . . .Gilbert Manufacturing Co.. $471.95 Redmond Kerr & Co.. $3«74.28, $25278.45. . . .Cooper. Hewitt & Co.. $22600, $61.25, $4978.25. . . .Bulkley. Dunton & Co.." $72800. . . .John L. Riker, $11500. The following correspondents should I>e credited for interest on their average monthly balances, rate 3 per cent, per annum (accurate): National Bank of Redemption, $392688.13. . ..City National. Dallas. $43498.37 .... Columbia National. Washington, $158801.02 National Commercial. Albany, $21289.23. Forwarded to Treasurer U, S. for redemption $15145 notes of other National banks. Received $10000 coin certificates in exchange for National bank notes remitted for redemption November I. lOX. Fourth Fetiod,— December j/— The loan clerk reports demand loans made as follows : ft 1283. Heiddbach, Ickelheimer & Co.. $500000. .. .81284. J. & W. Seligman & Co., $60000. .. 8 "285. Winslow Lanier & Co.. $15000. . . .81286, Hatch & Foote, $34360. . . 81287. Brown Brothers & Co., $50000' 81^88' August Belmont & Co.. $100000. . 81289, Chrystie & Janney, $75000. . . 81290, H. B. Hollins & Co.. $25000 . . . .81291, Kuhn, Loeb & Co.. $12000. . . .81292. Henry Clews & Co.. $1385000. Time Loans: 81293. proceeds credited to Steinway & Sons, $25000; interest 15 days, f ; total. $ 8 »294, proceeds credited to Morton, Bliss & Co.. $30000; interest 7 days. $ ; total. $ !_ 81295, proceeds credited to Denny. Poor & Co.. $12000; interest 19 days, $ ; total,' $ 81296 proceeds credited to Lord & Taylor. $17300; interest 28 days. $ ; total. $ .8 "297. by cashier's check to Acker. Merrall & Condit. $30000; interest 30 days. $ ; total. $ 8 '298, by cashier's check to Arnold, Constable & Co., $11900; interest 45 days, $1 B. Altman & Co., $19800; interest 35 days, $ ; total, total. .81299. by cashier's check to .Exchange. Discount, Dealers, credited as per discount Bills discounted debited as per discount register, register for this day. The following loans were paid to-day: Demand— i^ 1266, A. M. Kidder & Co.. $21871.60 and 60 days' mterest. . .81267. Dominick & Dickermann. $38900 and 60 days' interest. . . .^1273, J- S. Bache & Co. $120000 and 30 days' interest. . 8 1276. J. W. Davis & Co.. $.40000 and 30 clays' interest. . . .8 1 198, Simon Borg & Co.. $49«85o and 98 days' interest at 2>i per cent 8 > "63. Maitland, Coppell & Co.. $74Sooo and 123 days' interest 66 THE GENERAL BOOK-KEEPER at 3 per cent 8 "78, Corbin Banking Co., $98543.58 and 103 days' interest at 3}4 per cent Time—I^ 1263, Reank for reference. The items are then placed with- in each envelojK; until the following morning, when such items are added — known as the " morning addition" — as are received by mail or among the dejK)sits before ten o'clock. I05« The Settling: Clerk's Statement contains a printed list of the names and numbers of the members of the clearing-house, with columns for the respective debit and credit amounts. When the final footing of each envelope has l)een obtained, the numbers and amounts are usually called off from the enveloi>es by an assistant, while the settling clerk enters each amount in the left-hand column of his statement, opi>osite the name of the bank corresp'onding to the number on the enveloj)e. No. 90. NATIONAL UNION BANK. DELIVERY CLERK'S STATEMENT. (Date) FORM <»1 ( . H. ENVELOPE. N.. Bank*. Amount Dr. Signature. I Hank of -N. V. Natl. IJkjj. Assn. 135 408 00 2 M:inhatt.-in Comjxtny 73 821 97 3 Merchants' National Uank 2 446 82 4 Mechanics' National liank 27 96S 33 6 ISank of America 65 386 41 7 I'henix National liank 5 835 06 8 National City Hank 282 301 90 • • * • • « * ' « * • Another clerk prepares at the same time the delivery clerk's statement, or receipt list, which is a copy of the settling clerk's statement with the credit column omitted, followed by an added column for the signatures of the settling clerks at the clearing-house. A third assistant copies the amounts ujwn small tickets, each ticket also bearing the name and nnml>er of both the sending and receiving banks. These tickets are taken by the delivery clerk to the clearing-house and left at the appropriate desks of the settling clerks to enable them to check off the amounts received from other banks, in case of a difference. No. 8. NATIONAL CITY BANK. From No. 90, National Union Bank %2er banks prepare their ex- changes in the same manner as direct members, the several envelojjes being deliv- ered to the respective clearing-house agents sufficiently early in the morning for the total of each envelope or package to be adtled to the endosing envelope of the clearing bank and included in the settling clerk's statement. lo6. The Daily Routine— Each bank sends to the clearing-house a delivery clerk and a settling clerk. As he enters the clearing- house, each settling clerk leaves at the desk of the manager a "credit ticket" showing the total amount of exchanges which he has brought against the other banks. The amount of this ticket is entered by a clerk on the Clearing House Proof, under head of " Banks Cr." The aggregate of the several tickets represents the total sum sent in by the several banks, and is called the Credit Exchange. The desks at the ckaring-house are ar- ranged in four longitudinal rows, one desk being prt)vided for each member. A few min- utes before ten o'clock the settling clerks are found at the desks of their respective banks, opposite their corresponding delivery clerk, each of whom has brought his respective case of envelopes from the bank which he repre- sents. Each settling clerk has before him his statement the debit column of which shows the amount of checks, etc., his bank has against each of the other banks. On the credit side of this statement, which is now blank, will be entered the amounts received from the other banks. At precisely ten o'clock a gong rings, and the line of march begins. Each delivery clerk advances one desk at a time and delivers to the settling clerk the proper envelope of checks with its aggregate of contents attached, and drops at the same time the corresjwnding ticket through a slot in the desk. The set- tling clerk compares the amount on the envelope with the amount on the delivery clerk's statement, and, if correct, signs his initials opposite the amount and returns the lO.NATTONAL UNION BANK SUBSIDIARY SUBJECTS No. 90. New York Clearing House. _ ^(Pf Credit National Union Bank, % A^ ^r^ 7S- SetUing Clerk. FORM OF CREDIT TICKET. receipted statement to the delivery clerk. He then enters the amount on his own statement in the credit column op|>osite the name of the proper bank. The delivery clerk advances to the next desk, where the same operation is repeated, and this is continued until he has passed the other sixty-five desks and again stands before the desk of his own bank. The circuit of the desks is completed in about eight minutes. The sheet of each delivery clerk has appended to it the signatures of the sixty-five settling clerks, which serves as his voucher to his bank that he has delivered all the enveloi)es entrusted to him. The settling clerk has now on his desk the packages received from each of the other banks, which the delivery clerk gathers u|> and returns to his bank. He also takes with him a memorandum of the approximate balance in favor of his bank or against it. s: ! I No. 90. 9np f 01k ^titriimi §mr. .189 M\\ National Union Bank, Am't rec'd. s Z.>C_3^^^f, ^ creiit " " " brought. $ >i!Mt Bmimnee Dum Clearing Hotue. Or. *«!. 4«M National Union Ban Satlim^ Clerk. ZZ^ FORM OF BALANCE TICKET. The settling clerk carefully revises the addition of the credit column of his statement, after which a Balance Ticket is prepared and sent to the manager's desk showing the amount brought, the amount received, and the balance owing to the bank or payable by it. The amounts received are entered on the Clearing House Proof under head of " Banks Dr.," and the balances extended in the proper column. It is evident that the footing of the " Banks Dr." column should equal the footing of the "Banks Cr." column, and also that the debit balances should equal the credit balances. Should there l>e an error in the proof the announcement is made by the manager at 10:45 o"* earlier. The settling clerks have been revising their work from the tickets which were distributed by the delivery clerks, and errors of transcription can thus be found though the checks have been 71 BANK BOOK-KEEPING NEW YORK CLEARING HOUSE PROOF.. K*. I 1 3 4 < 7 a 10 M 13 14 IS 1« 17 18 1> M » U " tl ti M 30 31 31 S3 S4 S« 40 a 41 47 4* n M » n •s <4 ts •7 70 71 7« 74 7S 7. ■AMU. Bnk of N. T. Hatt Bk'g AMc-a. Bnk of Um Muihkttu CoB|Hiy, HochaalB' NatioiiBl Buk. KcdiaBios' NatuMMl Buk. ■■Bk o( Ameitei, FlMsii Nstiooatl Bank, Mational City Buk, Tndamen't National Baak, ChMBical Natioaal Bank. Meraianli' Bieluutga Natl Baak, Oallatia Natioaal Bank, Natl Batcinn' A Diotms' BwA, If •chauoif' & Tndoa' Baak, Omnvieh Bank, UaikMr Hanorn Natl Bank, SeraoUi National Bank, Baak oC th* State of New York, Amoncan Ctclianga Nat'l Ehnk National Bauk of ConaaiM Natiaaal Broadway Bank, Mercantile National Bank, hoifleltanc. National Buk of the Repablie, Chatham National Hue, Ttafl»'t Bank, National Buk of North AiMriea, HanoTor Mati«n»l Bank, Irrinit Natioaal Bank, National CiliMMT Buk, NiMnBank, Ifarkot ft Kottoa National Bkak, National Shoo ft Leather Buk, Cms Bnhaaca Buk, CutiBMlal Natioul BMk, OrirataiBuk, iBoerian' ft Tiatfan* Natn Buk, MUioMl Pferk Buk, Bat Bitror National Bank, ronrth National Buk, CoMnl National Bank, Saaoad NatioMl Bank, Ninth Watienal Bank, Tint Hatioul Buk, N. T. Natioul Bnhaa«e Bkak, N. T. Comity Natiaul Bbak. Oonnaa-ABMrioaa Bank, Gkaae Natioaal Bkak, AneH Tnaunr U. & at W. T. VUlh Afaoe liaak. _189 on CLEARING HOUSE. ^. fVif£ U ''>*- /L3 J^'. s-j/i/ ■AKKS. u mC u >i'i' Ls-g r //■/ 5V^ / /f3 f¥J 77 ys yro /r 7¥> 3 1 o j^x S ft 1 1 Jf 'n >u "I e>> 7 ?7''^7 Vi-' i^ ^7 /i. /o 7 / 6" // r.7 ^7 ■AMU. J fC^/fS i. /. 7 ro 7 7 A7^f\; 3 oSt J. "i-i/n VC / r/>yb ^7 7 fit s,4 f/ 7ys3CCsJ f H^i y.Js-C / tas- r/^ -i^ 7a e^ ■ /J- 7/ cv yjy^ 7^C 7y, S't^ 3i^3o fly •3s fp4 4r/J/3 '77 a3 1^ xs- / '^33 fj i\f-f V/S¥f9yf ^fs-^ry>yt ?J* iff • ^/ y\s-s-M^ >3 mn BANKS. i^J?. 7'r^7 VJrt r3 f,. o. / 7 '^ft,Sf ^-/^i ¥/f 77 ^7 i^s-i /-^ ¥>(■ H' fV/ 7' f^^. 'o>yS-3fS- 44 JSiS' f^f^oS: f ^S-o oUi 7" so 11 *3 SS S7 30 31 31 S3 S4 3S 40 4S jj-i ' /o ^/ /J> 47 4t •* S4 St <1 a •3 •4 M «7 70 71 71 74 TS n SUBSIDIARY SUBJECTS n 7S 7t 10 SI SI B3 St St •s r SS so •1 M M Oerau Eichange Bank. Oeraania Baak, Cailad Slatei National Bank. OaiAdi Matiaaai Baak. Fifth Natioaal Bank, Baak of the MetrapoUa, Weet Side Bank, 8aab«rd National Buk. Biitk National Bank, Woiteni National Bank, Firat Natioaal Baak, BUyn, Natioaal Uaion Buk. LOiarty Natioaal Bank, N. T. Prodnea g"-hii^ Bk^. Bkak of Mew i 73%- Sfif f/r /^7 /L 3i.o /// >f3 Si. \3! 77 ft f -J t^ ^i^ f¥>fis¥j ys /f L, 71 ¥ff\ry>\3C 7* 7>i -^rn/[>^:u|T^ 9oSys-yW \8U y;- 'f>. ¥L^S'of-j> /A- t/:ia £^cf y > X, n \fytj ^3S- A ^^3 / n af ¥f yyCSy ¥p X7. ^ / "^7^ 7\ii i-rt w^ > -js~ 71A.I1. / o o 7' 7^ y\F3i ^o^^i-o f y^- 7)^¥3 U n /^^fS rs\3 »3 ^, 7 f ac 4C I r3> 77 rs 79 80 81 81 83 £4 83 SS 87 88 90 »1 93 93 >/i,' M taken away. To correct errors in addition, the statements are passed to the right and added by another clerk. If the error is not then discovered, clerk of Bank No. i passes down the line with his statement and calls back the amount he has received from each bank. Clerk No. 77 inmiedi- ately follows NO. 1, and calls off his amounts. This operation sometimes begins, for convenience, with No. 20, who leads off, and is followed by No. 93. Should the difference still remain undis- covered, a committee is apix)inted com|x>sed of the ten settling clerks who hold the best records in the clearing-house. They revise the additions of all the statements, and this must correct all errf)rs. The accompanying Clearing Mouse Proof, and tlie Settling Clerk's Statement, tickets, etc., are photo-engraved from the actual forms used in a given day's transactions at the New York (bearing House, the date being puriv)sely omitted in all of the documents. The two unusually large balances, shf)wn in the proof, of $•'^,537,811.77, due the National City Bank, and of $7,125,801.67, due the Clearing House by the Fourth National Bank, were consequent to a pay- ment made to the (iovernment, on account of the re-organization of the Union Pacific Railroad. 1070 Debtor and Creditor Banks. — If the aggregate amount of checks and items brought by one bank against all other banks is less than the aggregate of checks and items brought by other banks against it, the bank is said to be "Debtor"; that is, that it owes the clearing- house, the difference or debit balance of such aggregates. But if the checks and items brought amount to more than the aggregate against it, the bank is said to be "Creditor," which signifies that it is entitled to receive from the clearing-house the difference of such aggregates. No. 90. |[rip f 0vb (Skaritig l^tmt, feretrrl/^ Me NATIONAL UNION BANZ; J8g ^0^^<-.^«.- x-< ^>v_t _af <3:=::^.=*^t^._r/^ 2 DoUars in full for balance due the Assoc ASSISTANT MANAGER S RECEIPT. 73 BANK BOOK-KEEPING Between the hours of 12:30 and 1:30 o'clock the debtor banks must pay to the manager the balances against them either in actual coin, U. S. legal-tender notes, or in clearing-house certificates. Receipts are signed by the manager, which are held by the banks making the payments. * After 1:30 o'clock, or as soon thereafter as the amount can be made up and proved the creditor banks may receive from the manager the respective balances due to them Receipts for the amounts taken by the creditor banks are made by signature opposite the amount received in a book specially prepared for the purpose. * 108. Adjustment of GUims.— All checks, drafts, notes, or other items in the exchanges returned as " not good," or mis-sent, must be returned the same day directly to the bank from which they were received, and the said bank must immediately refund an equivalent amount in specie or legal-tender notes; usually, however, unless the item is of large amount, or the reserve of the returning bank is approaching its limit, such payments are made by cashier's check or tellers ticket. But checks, drafts, notes, or other items to be returned for endorsement or informality may, after being certified by the bank returning them, and not exceeding $5000 in amount to any one bank, be returned through the exchanges the following morning. Checks and other items bearing any qualified or restrictive endorsement cannot be sent through the clearing-house unless all endorsements thereon are guaranteed by the sending bank. 109. Checks from Oearing: House.— The bundles of checks brought from the clearing-house are perforated with an awl, the number and arrangement of the holes indicating the bank from which the checks were received. This is done to ensure identity in case the endorsement of the sending bank may have been omitted; or the examination of the end.^rsements may be made first, and the perforations omitted. The envelopes are next opened and the contents of each checked against the accompanying slip or envelope, to see that no errors or omissions have been made. 1 he checks are next assorted that each dealer's checks may be grouped together after which they are written in the debit books. The checks are next delivered to the balance ledger-keeper, who enters the aggregate to each dealer's debit, that his balance may be known at once. I he signatures of the checks, drafts, etc., are next examined by the paying teller I he debit books are not posted to the dealers' ledgers until a proof of the items brought from the clearing-house has been obtained. This proof shows the different kind of items received as classified for the several ledgers, which may be made upon the back of the balance ticket and preserved with it. When the checks have been examined as to genuineness and regularity they are canceled by a cutter or " Paid " punch. Mis-sent, not good, and informal items niust be returned before being cut. 110. Scale of Fines,— Firsf. All errors on the credit side of settHng clerk's state- ment (that IS, in the amount brought) whether of footing or entry, and all errors causing disagreement between the credit entries, the check tickets, and the exchange slips, each $3.00 Aw//./. Errors in making the debit (that is, amount received) entries, each 2 .00 TAird. Errors in the tickets reported to the clearing-house, causing disagreement be- tween the balances and aggregate, each Fourth. Errors in footing the amount received , ^^ Fifth. Disorderly conduct of clerk or delivery clerk, at the clearing-house, or disregard of the manager's instructions, each offense ^ ^^ Sixth. Clerk or delivery clerk failing to attend punctually, with statements and tickets complete, at the morning exchanges, each 2 ^^ Sei'enth. Debtor banks failing to appear to pay their balances before 1 130 p. m 3.00 Eighth. Errors in delivery or receipt of exchanges, each , . 00 74 SUBSIDIARY SUBJECTS Forty-five minutes from the hour of commencing, viz., 10 o'clock a. m., will be allowed for a proof. For all errors remaining undiscovered at 11:15 a. m., the fines will be doubled, and at 12 M., quadrupled. III. Rules of the Clearing House Association.— /VW/. Return of checks, drafts, etc., for informality, not good, mis-sent, guarantee of endorsement, or for any other cause, should be made before three o'clock of the same day. Second. Reclamation for errors of any kind, in packages of legal-tender notes from the clear- ing-house, in settlement of balances, should be made before one o'clock on the following day. Third. In no case should checks, drafts, etc., be returned through the exchanges, except for informality or endorsement, and then, in each case, they should be certified, and the amount limited to $5000 to each bank. Fourth. In case of a missing item in an exchange, the claim should be made at once, by returning the entire exchange with a memorandum stating the nature of the claim. IL-COMPUTATION OF RESERVE. IIS. For exact and complete information concerning the restrictions upon reserve fund imposed by the National Bank Act, the student is referred to paragraphs 92 to 106 of the act itself as incorporated in the annual report of the Comptroller of the Currency for 1896. In general, the act provides that every national banking association in the cities of Albany, Baltimore, Boston, Cincinnati, Chicago, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Phila- delphia, Pittsburg, St. Louis, San Francisco and Washington, shall keep on hand at least 25 per cent, of the aggregate amount of its deposits; all other associations are required to keep 15 per cent. One-half of the net reserve of banks in the alwve-mentioned reserve cities may consist of l)alances owing by banks approved by the Comptroller. The reserve of banks outside of the reserve cities may consist of three-fifths of such balances. Banks in New York City must keep the entire amount of the net reserve in their own jjossession. The reserve shown on statement page 61 was calculated as follows: Subtract from the total due to banks, the total due from banks as shown by the bank and collection ledgers; to this amount add the total of individual deposits, consisting of balances due as per dealers' ledgers, and including outstanding certificates of deposit, cashier's checks, certified checks, customs checks and un|>aid dividends as shown by the general ledger ; deduct the exchanges for clearing-house and cash items as shown under heading of cash on debit side of statement, also amount of national bank notes should there he any on hand; one-fourth of this remainder is the required reserve, or $2,667,779.48. The actual cash on hand consists of the remaining items on the debit side of the statement below the item "Notes of this bank on hand," which is found by addition to be $2,681,474.02, or nearly $14,000 more than the required reserve. This shows that the bank could not lend more than $14,000 before it would be compelled to increase its cash on hand, which might be done by calling in some of its demand loans. The form of blank used in making reports to the Comptroller of the Currency is presented on the following page, and will be readily understood if carefully studied. The calculation there given applies to the statement presented on page 61, which should be referred to in connection herewith. In blanks provided for banks not located in the reserve cities, the wording "twenty-five per cent, of this total amount, etc." is changed to fifteen per cent., and "one-half of the Net Reserve" is changed to three-fifths and tivo-fifths respectively. The student should compute the reserve from the statements given on page 77, one of which is taken from a New York bank where 25 per cent, is the required reserve, and the other from a smaller city, where only 15 per cent, is required. In close computations it will be observed that nickel and copper coins cannot be counted as a part of the legal reserve. National bank notes on hand cannot be counted as part of the reserve, but they may be deducted from the liabilities, as shown under the form of re|>ort to the Comptroller of the Currency on the following page, which form should be followed by the student in computing the reserve from the statements to follow. 75 mr BANK BOOK-KEEPING 5-»» \ GTluk Kneton iftoaM bwr ia miai tku SMtioa 51910 1 XariMd autatoi. fcrbU. a ■..k •. by new loM. or 4i««KmU. « to 4,,Ui» wiy din4«U rtTiirMlin^ iT^ M« * But It iMrma i|g ihMlMa, FORM ^.-Calculation of the Lawful Money Reserve of National Banks located in Rese"^ • Cities a nd Central Reserve CiUes. «eaerve NouofBuk Report rf Ike •late oftawfiil money iwerre of the. Lo«tad«t *.i6:^^...^<^fc£^.. ,sui. of ____c^ H. R.— If ibi* aoeofflpuNs • Report of Coodiiioo it thoald be •%ii(d by Ifit aeeompaDica • Report of E««miii»tioo it »hooU he »igmd by .A^. ■~>>d^.«f€ioA^^.m^ ^^^^^^i^U^^^d/j^^ If SbooM the afgtregBte " Doe from " ezoeed the Mmre- (5rte "Doe to" Buka, both items must be ooitled from the caJcu- ITEMS ON WHICH RESERVE IS TO BE COMPUTED. Uabilities. Doe to N.tion.1 Benirs ...., ltd. Due to State Buiks sml Rink... / fU^ ix ^ *^'7'7 ¥^S' Due from other NatJooal Bkoka Dm fi«B State fiuiU and fiaoken .. | f( Dividends unpaki.. Individual Deptaiti United States Deposito DepoMta of U. a Disbaniag Offioer^ Groas amooni. DEDUCTIONS ALLOWED. EnAugM for Ckaring-HoiMe Chaeka «■ other Banka in the same place ~ IBnkNotea Twenty-five per cent of thia total amount, !• the entire Reaerve required, which ia '^ISli^'^'-JSS^y'S *''*' '"''**"«' "• 8- NctR(aerve«ob«heM rr.. .. ^ a%5 'S26 03 jLt^Z^ ^7 0.00 ..... ITEMS COMPOSING THE NET RESERVE AND DISTR.BUTION"o7THEliX;^ nts DeieiaBiy with Reaarre Agenta «**-^N^R..,n,i, J^^E3^ r^i„n-»L.. '-torndtenpthes^n., ' ' Itema in fiank'a vis Fractional Silver.. Silver Dolkis Silver TriMwy Orfa . 0«>W Coin jTjO TcA :..... CSoJd TrcMoiy Ctert's .^ Legal-Tender Note* U. &. Cert's of DepcMt for Legal-Trnden ■J..hJ praj ^6..^. ^/^. y OJa. — Z ^JU Q.i 0.b.Q E«ee8B in ibe entire Reserve •If f«ip««U «»„.« «. k^ .itt, ««^ .^^ „,y ^ Excess in itema MA by the Bank De«cien<7 •«> '•«"» beW by the Bank RECAPITULATION. Defidency ia the eatii* Ifmsiii haM, |._ >A ^^ nft anooBi do* Ami rach agMU i* aTsiUUs tor itsiiii. U- B-— BMik» in N«« York City mmI Is eUJM ■ - ' amm»«l « .b.».,i« Om, ,,, ^l^mL^SL '»"-'«»« C«ii»j %^„, ciU« .«|.r tk. Mt Mw«k *. ■m. msI Vi y thawM* net BMtrva lafalMl, wh« '••«»• i"*^ •• uwi» ■•,««, ^e»,4,ii«i SUBSIDIARY SUBJECTS Stutcuicnl where 25 |)er cent, reserve is required: FOURTH NATIONAL BANK, NEW YORK. J. EnWARD SlMMDNS, PreiidcHt. No. 290. Ch.vrles II. rATTKRSON, Cashier. Reaourcea. Liabilities. Loans and discounts $24,288,705.76 i Capital stock paid in $3,200,000.00 Overdrafts 1,536.61 Surplus fund 2,000,000.00 U. S. bonds to secure circulation 50,000.00 Undivided profits, less current expenses U. S. bonds to secure deposits and taxes paid 56,677.86 U. S. bonds on hand National bank notes outstanding 45,000.00 rretniums on U. S. bonds State bank notes outstanding Stocks, securities, etc. 115,400.00 Due to other national banks 15,404,071,27 Iktnkiiig-house, furniture, and fixtures 600,000.00 Due to State banks and bankers 1 , 9(^,864. (M) Other real estate and niortga^jcs owned Dividends unpaid 7.252.71 Due from other national banks I. '50,305. 38 1 Individual deposits 20,283,655.17 l)uc from State banks and bankers. .j«j,477f'4 Certified checks 3,557,158.20 i )ue from approved reserve ajjents United States deposits Cliccks and other cash items 71,042.50 ; Deposits of U. .S. disbursing officers Exchanges for clearinjj-house 7.S32,fH;7.93 Notes and bills rcdiscounted Itills of other national banks 9,809.00 ISills payable Fractional currency, nickels, cents 10.58 i Liabilities other than those alj«ivc elated Sp«ie 3,701,3*14.50 j I.cual-tcnder notes 1,311,050.00 ' U. S. ccrlilicales of de|K>sit 7,310,000.00 1 Kedemptiim fund with Treasurer U. S. 2,250.00 . Uuc from Treasurer U. S. 10,000.00 $♦6,544,679.90 Ti.tal Total $46,544,679.90 Statement where 15 |>er cent, reserve is required: EUFAULA NATIONAL BANK, EUFAULA. S. II. Dkm. PnsUittt. No. 230J. E. B. Young, Cashier. Reaourcea. . Liabilitiea. Loans and discounts $217,534.85 : Capital stock paid in $100,000.00 Overdrafts 24,514.56 Suri)lus fund 25,000,00 U. S. bonds to secure circulation 25,000.00 Undivided profits, less current exiK-nses U. S. bonds to secure de|X)sits and taxes paid 6,262.54 U. S. Imnds on hand National bank notes outiitanding 22,51X).00 I'reniiunis on U . S. iMjnds State bank notes outstanding Stocks, securities, tic. 12,921.13 Due to other national hanks 4.931.67 Itanking-housc, furniture, and fixtures I5,tX30.sitors. Every creditor of a bank is therefore nracticallv either a stockholder or a depositor. The first class is subdivided into (.) ;;ita, stek ZTs^i- mg sums paul n. by and due to the stockholders; (.) surplus, which is ma le up 7lfits al^v xpenses and d.vulends and is, therefore, at the immediate dis,x,sition of the stockholder' (^ und.vKled profits, earn.ngs accrued since declaration of previous dividend less current expanses am axes-pract.cally same as surplus; (4) unpaid dividends, sums which have been vote Uo s^^ int the ;. if ': ""' ''' 'T '"^"'- ''" "^""' ^'^^-^ '"^'"^'^^ (') '^^ --"'-^'"^ -'- outsL" - .ng, the l.uklcr be.ng m reahty a preferred holder of a demand cert.ficate of deposit; (.) individual d.p..sus cons.st.ng of deposits represented by pass-books, sums due banks as de'^>osi i. o ta d"g t.ficates of deposu customs checks, cashier's checks, certified checks, and dividend checks (^ _bWlspayable, compr.smg notes issued by the bank for money borrowed, notes rediscounted etc ^^ — Kesources comprise three classes: (,) loans and discounts; (.) real estate; and U) cash The first class consists of (.) time and demand loans; (.) bills discounted; (3) ^verdrahs w ich a c practicaly loans to depositors; (4) stocks and bonds, which are loan^ represented by tads o m banl ' ['^'''-"T'"' "" """''' '""^' ''" ^'^'""^ ^"^'-^ i"^ -^-- •••»- --n^« ^'-s embrace .) bank ng-house, furniture, and fixtures; (.) real estate and mortg'ages acquired to protect its oans and securities. The third class consists of cash-either actual mtney in' bank, baLs due trivXXanrnr^^^ ''- ^"^^'"^■'°"^^* -'-'- -- ^'-^ '-'-- — ^ ^^ ^- Current expenses and taxes paid, when given as resources, represent cash which has been actua ly paid out for the purposes indicated, but the vouchers are held over until thr. ext dividend period and charged to Undivided Profits before the dividend is declared W.J- ^T ^T '^''r'""'^' ^- ^•" ^""^'^^^ principally of notes .,f other national banks forwarded to Washington for redemption; this amount, therefore, is considered as part of the cash reserve The National Bank Act provides that every national bank shall make to the Comptroller of the Currency not less thaii five reports during each year, according to the prescribed form given on le preceding page, which reports shall also be published in a news,>aper where the bank is established 1 he amount of each dividend and the net earnings in excess thereof must also be reported U h. e much may be learned from an inspection of a single statement of a bank's condition it is not prudent to predicate the real character of any bank from a single statement. Ordinarily a large surplus and iindivided profits indicate a prosfx^rous business, but the real condition hinges ..,,..„ the quality of the loans and discounts, <.r .>f the stocks and lx>nds held. Stocks bonds mortgages, etc., may be proved by actual count. Real knowledge of the loans and discounts' i.owever, can be obtained ..nly by co-operation of the l>oard of directors, who should be able to ''f!^'""""*= ^'"^ regularity and validity of every loan that has been authorized by them part.cularlv if the same items are compared and the increase or decrease carefullv noted I the amount of the reser^-e fund remains constantly below what constitute; the legal reserve It indicates that the bank is lending more than is prudent. Should the items of surplus and undivided profits steadily diminish, the suspicion would attach that the earnings of the bank do not cover Its expenses, dividends, and losses. IV.-ORGANIZATION OF NATIONAL AND STATE BANKS. 114. Students and others desiring authentic informati<,n concerning the organization of national banks are advised to address a request to the Comptroller of the Currency, Washington D. C, for a copy of a pamphlet entitled " Instructions and Suggestions of the Comptroller of the SUBSIDIARY SUBJECTS Currency relative to the Organization and Management of National Banks." Ample suggestions are given as to the successive steps required to organize a national bank, and the forms of articles of associati-)!! and by-laws prescribed. Desirable information as to their general supervision and man- agement is also incorporated, concluding with a summary of the princijjal restrictions and require- ments of the National Bank Act. The thoughtful student of banking and finance will find much that is stimulating and helpful in the current rejwrt of the Comptroller of the Currency. This report comprises two large volumes, and may be had upon proper appHcation. The first volume embodies the result of the Comptroller's comprehensive and suggestive investigation on extent of the use of credit instruments in daily payments, a revised edition of the National Bank Act, a digest of Federal and State court decisions affecting the business of banking, besides valuable comparative tables and statistical abstracts fnmi reports of State banks, loan and trust companies, savings and private banks. The second volume conuins reports of the condition of every national bank in the United States. State banks are organized subject to the laws of the several States, and they must conform to the regulations and restrictions of the Banking Department of the State in which they are located. Information respecting the organization of a State bank may be obtained by addressing the proper Secretary of State. State banks are taxed 10 per cent, on their circulating notes, which practically prohibits their issue, but they may lend money upon real estate and other forms of security not permitted by the National Bank Act. Private banks are formed in the same manner as ordinary copartnerships, and their responsi- bility hinges u[K>n the integrity and credit of the individuals associated in their management. The auxiliary books and records used in the organization of a national bank are the same as those required in any other corporation or joint-stock company, comprising (1) the subscription book, which contains the names of the persons subscribing for the stock and the number of shares desired ; (2) the instalment book, containing a list of the stockholders and the amounts paid in by each stockholder; (3) the minute book, in which is recorded full proceedings of the meetings of stockholders and the board of directors ; (4) the stock certificate book, which contains receipts certifying to the number of shares held by each stockholder ; (5) the transfer book, showing the history of certificates as canceled and new ones issued ; (6) the stock ledger, representing the Capital Stock account, each stockholder being credited when the stock is issued and debited when transferred ; and (7) the dividend book, showing the name of each stockholder, the number of his shares, and the amount of dividend he is entitled to at each dividend period, providing also for receipts by signature as the payments are made to the stockholders. The opening credits in the general books are as follows : (i) Ca/>i/a/ S/>vk, for the sum actually paid in by the stockholders ; (2) Circulation, for the amount of notes received from the Comptroller of the Currency, equal to 90 |>er cent, of U. S. Registered Bonds deposited. The opening debits in the general books include : {}) U. S. Bonds to Secure Circulation, par value of bonds bought and forwarded to the Treasurer of the United States ; (2) Premium on U. S. Bonds, being the sum above |)ar paid for U. S. Bonds to secure circulation ; {i) 5 per cent. Redemption Fund, for cash forwarded to Treasurer of United States to redeem worn-out and mutilated circu- lating notes ; (4) Expense, for whatever disbursements may be ordered by the Board of Directors or Cashier. v.— LETTERS OF CREDIT. I15« A Letter of Oedit is an instrument issued by a banker and addressed to several correspondents, by which the holder may receive funds at different specified places in amounts to suit his convenience, the total drawn not to exceed the sum designated in the letter of credit. A traveler desiring funds, presents his letter of credit to the proper banker at the place where he may happen to be visiting. The banker will prepare a sight draft on the London banker mentioned in the letter of credit, which draft the holder of the letter will be required to sign. If the signature on the draft and the letter of credit correspond, the amount of the draft will be promptly paid to him in the currency of the country and without further identification. 79 BANK BOOK-KEEPING The bankers who cash the successive drafts endorse the amounts on the back of the letter, which is reduced iu value to that extent, leaving the balance to be drawn upon through the next correspondent to whom application is made. When the London banker |wys the drafts so drawn, the amount of each draft is charged to the American banker who issued the letter, together with commission and interest charges according to agreement. The commission charges, to the purchaser, for a letter of credit for less than ^^500, is usually one i>er cent. Credits are issued either against cash payment, deposits of approved collateral or satisfactory guarantee of repayment. .tmmttmc ■■*■ m •/' >i^ H ^4;:i^u^ci^^M mm. ^ j::i l;v> ? ^ ^>^ J >^^v> ^ J^i 4:v^^ Banks having no correspondents in foreign countries, frequently draw direct drafts for the use of their dealers through the agency of foreign exchange bankers. The draft is drawn, in this instance, upon a correspondent of the foreign exchange banker, a list of whose correspondents is furnished to such banks as intend to draw direct. A cashier's check for the amount of the draft including the commission, together with a complete description t)f the draft as issued, is imme- diately sent to the foreign exchange banker, who at once advises his correspondent by letter to honor the described draft ujxjn presentment. The letter of advice will thus be carried by the same steamer and reach its destination at the same time or before the arrival of the tiraft. The issuing bank becomes, therefore, simply a purchaser of exchange, and thereby avoids the necessity of keeping deposits at foreign places, or of making further provision for the payment of its own drafts. VL— DEMAND LOANS. 116. The accompanying illustration presents a plan of keeping the original records of demand loans on separate sheets instead of in books. The form provides for part |iayments, increase or decrease of rate at any date, and substitution of collaterals. The maker of a collateral note is privileged to withdraw any or all of his securities provided he replaces them with other securities of equal value, acceptable to the bank making the loan. These substitutions may l)e indicated by drawing a red line through the withdrawn securities and writing a description of the substituted 80 SUBSIDIARY SUBJECTS securities in red ink on the lower |>art of the same sheet. .Margins to the extent of 20 per cent, above the market value of the securities are usually required, and the current quotations are carefully watched that this mar- gin is not encroached upon by depreciation of the securities. The record of a change of rate and the subtraction of part pay- ments will be readily understood from an inspection of the accom- panying form. The form of collateral note exacted from borrowers in mak- ing demand loans, is given below. Description of the collateral is frequ^intly omitted from the body of tl e note and the w«)rding ".\s per list" inserted instead, securities are filed away : this securiti s are received. No. Sham ^ '^O ^Cc "y^o SECURmr cm bkc(^^dMt 'j€i^ ^^-y^ l:t^C. /^^c^A^/ Price f^ ^/ m ^ Value ^ f^ /7 /^^ / -j-c OtP c> 'T^C €> er ^ *> ir The collateral is then listed upt^n the envelope in which the plan is invariably followed when a large number of different $/fc ^0.000 00 Kew York, ■* ■ ««■■ < ■ \Jn UcnidncL, for value received, the undersigned promise to pay to The Fourth National Bank of the City of New York, or order, a. u, Banking Office in New York Cilj^ in funds current at the New Yo^l^learing House, wuh interest from the date hereof at the rate o\^j^%^ix cent. per annun ~A«~DoLLARS ; having deposited with the said Bank as collateral .ecuriiy for the payment of this and an'y other liability or liabilities of the undersigned to the said Bank, doe or to become due. or which may hereafter be contracted or^xistiiu^ the fonowinR property, viz.: - e/^W^ (ySjCC^^— /¥Qo and the undersigned also hereby give to the said Bank a lien for the amount of all the said liabilities upon all the property or securities at any time given unto or left in the possession or custody of the said Bank by or for the under- tigned, lor safe keeping or otherwise, and also upon the balance of the deposit account of the undersigned with the said Bank, existing from lime to lime. " In case of decline in the market value of the securities at any time pledged for any of the above named liabilities, the undersigned •grce 10 deposit with the said Bjnk, without notice or dem.ind. additional securities sufficient to maintain a margin of market value of the •ecuriiies pledged equal lo twenty per centum of the said liabilities ; and in case of failure so to do forthwith, this note shall become at once Oue and payable without demand of payment therebf, and the said Bank may immediately sell and apply the said securities in ihe manner and with the ellect at hereinafter provided. 1 he undersigned do hereby authorize and empower the said Bank, at its option, at any time, to appropriate and apply to the pay ment and extinguishment of any of the above-named obligations or liabilities, whether now existing or hereafter contracted, any and all moneys now or hereafter in the hands of the said Bank, on deposit or otherwise, to the credit of or belonsing to the undersigned, whether the S3id obligations or liabilities are then due or not due ; and further agree that in the event of the insolvency of the undersigned, all the said Obligations and liabiliiics shall become and be immediately due and payable without demand of payment. r II *t'** f'"!!'' '* .*'*'^*'*'' '"'horiied, upon ihe non payment of any of the liabilities above mentioned when due, to sell, assign and de- liver the whole of the said securities, or any pnrt thereof, or any siibsiiiules therefor, or any additions thereto, or any other securities or property given unto or left in the possession or custody of the said Bink by or for the undersigned, at any Broker's Board or at public or private sale, at the option of lire said Bank, without eiiher advertisement or notice, which are hereby expressly waived. • w. i *1 securities or property are sold at public sale, the said Bank may itself purchase the whole or any part thereof, free from an* nghl of redemption on the part of the undersigned which is hereby waived and released. In c*»e of »-«le for any cause, after deducting all costs or expenses of every kind for collection, sale or delivery, the said Bank may apply the residue of the proceeds of the sale or sales so made, to pay either one or more or all of the said liabilities to the said Bank, wneiner then due or not. as it shall deem proper, miking propir rebate for interest on liabilities not then due, and returning the overplus, U any, to the undersigned who agree to be and remain liable to the said Bank for any deSciency arising upon such sale or sales. FORM OF COLL.\TERAL NOTE. 81 BANK BOOK-KEEPING Vn.— KINDS OF UNITED STATES MONEY. 117. Below is presented a table prepared by Mr. Maurice L. Muhlenian, Deputy Assistant United States Treasurer, New York, which epitomizes much that is authoritatively discussed in a volume by the same author entitled " Monetary Systems of the World." This table is jjariicubrly valuable to the student as it presents, in condensed form, the legal status of the entire stock of circulating currency of the country. In addition to the general circulating currency presented in the table, there are two forms of clearing-house certificates which are used by the associated banks to settle clearing-house balances. The first form consists of certificates which represent actual deposits of gold coin at a depositary chosen by the Clearing House Association. These are known as Gold Clearing House Certificates, their principal purj)ose being to save the inconvenience, expense and abrasion incidental to the handling of coin. Another form of certificates has been used among banks in the larger clearing-house cities, which are issued by a constituted authority of the Clearing House Association, usually called a "loan committee," on deposits of securities. These securities are generally of such character as render them readily convertible into cash if necessity arises, and the certificates are usually issued only to the extent of 75 per cent, of the value of the securities. They are issued during jxiriods of financial stringency and are restricted to circulation among banks forming the association. In New York, following the panic of 1873, between September 30, 1873, and January 14, 1874, the issue of such certificates amounted to $26,565,000. TABLE SHOWING THE PRESENT STATUS OF THE MONEYS OF THE UNITED STATES. Weight. Fineness Ratio tu Guld . . Limit of Issue, . Denominaliona . Legal Tender. . Receivable Exchangeable... Gold Coin. 25.8 grains to the dollar. 900-1000 Gold Certifi- cates. Redeemable . Unlimited coinage free. 10 1% Unlimitctl. Ktir all dues. For lertifi- (.ates under the limita- tion. Issue sus- pended so long as free gold in Treasury i* below $100,000,000 $10,000 5,000 1,000 500 100 50 Not a tender. For all public dues. For gold coin at the Treasury, or any other moneys. In Kold coin at the Treasury. Silver Dollars. Silver Certifl. cates. United States Notes. 413.5 grams. goo-ioQo 15.98S to I Require- ment to redeem Treasury Notes. $• Unlimited unless iithcrwise L-ontracled. For all dues. For stiver certificates or smaller coin at the Treasury. And may be deposited for .silver certificalcs. Silver dollars in use. $1,000 500 lOO 50 lO 10 5 3 I Not a tender. For all public dues. For dol- lars »r smaller coin at the Treasury. lu silver dollars. U. S. Ctfa. of Deposit for Icfal tenders. Treasury Notes of $346.Mi/>i6 $1,000 joo too 50 ao 10 S a I Unlimited unless otherwise contracted. For all dues.* For all kinds of moneys except gold certificates. In coin at sub-treasury in New Vttrk and San Franctscn in samsof $jo and iMrer. The same as United States Nstional- Bank Noua.t $10,0110 5,000 Not a tender. Not receivable. For United Sutes In United Sutes notes at sub-treasury where iisaed. -Silver bullion and dollars of 1I90 in Treasury. $1,000 Soo lOD 50 so ■o 5 a t Unlimited unless otherwise contracted. For all dues, For all kinds of moneys except gold certificates. In coin at the Treasury. Subsidiary Silver Coin. Volume of United Stales bonds and their cost. $1,000 300 loo JO ao 10 5 Not a tender. For all dues except duties on imports and interest on public deU. For silver and mim>r coin. In '* lawful money " at the 'I reas- ury or bank oif ■ j8j.8 gr. to the dollar. 900-1000 •♦•953 t« • Needs of the country. 50 cents. as cents. 10 cents. Not to exceed $io. To the amount of $10 for all dues. Fur minor coin. In "Uwful m«»ne}r " at the Ireas- ury in sunu of $aoorBny multiple. Minor Coln.t 5C pieie. 77. 16 grains. 75 (copper. 35)1 nickel, ic piece, 48 grains. 95 % copper. i% tin and xioc. Needs of the country. 5 cents. • cent. Not to exceed as ocMs. To the amount of as cents for all dues. In lawful money at the 'I'rcas- ury in sums of $aoor more. * Duties on imports by regtilation only, t Not available for bank reserves. 82 SUBSIDIARY SUBJECTS Vra.— BANK EXAMINATIONS. 118. The question of honesty is not the only question to be settled by an outside exam- ination of financial records; and more and more is it growing to be the custom of large corporations to have the books e.xamined at regular periods by expert accountants, both to establish the competency of the method, and to prove the correctness of the showing. In many of the States, and particularly in New York, a guild of public accountants has been organized. In New York this body is under the Board of Regents, and the members having passed the requisite examination are entitled to the degree of "Certified Public Accountant." These experts find ready employment, not only in unraveUng complicated entries, and suggesting better methods of book-keeping, but' in examining business books of large concerns with a view to auditing the records. A bank, beyond all other corporations, is a public institution. It represents the people in a peculiarly sacred sense. It keeps their money on trust, and is their financial agent in ways that demand the strictest integrity, and the greatest candor. To such an extent is this true that both the State and the Nation are called upon to exercise supervisory powers; and beyond this, detective devices are used by the banks themselves both to intercept dishonesty on the part of employees and to afford to the honest clerk the means of holding himself free from suspicion. Notwithstanding these precautions and safeguards, a bank offers peculiar opportunities for the practice of fraud, which even the best systems of supervision cannot wholly prevent. Among these opportunities may be mentioned (1) working in collusion with the depositor, by destroying a paid check and omitting the amount from the pass-book and ledgers; (2) carrying a credit temporarily from one depositor's account to another's, thereby permitting the latter to overdraw his account; (3) using the same vouchers or coupons more than once; (4) changing amount of deposit ticket before entering, substituting a new deposit ticket, increasing an amount previously entered to the depositor's credit, or decreasing the amount of a check that has been paid. There are various more or less sure methods of guarding against these and other fraud devices; the best of which is to use such a system of book-keeping and such safeguards as will make false entries difficult and hazardous, and then keep constant watch of the books, first by frequent transfers of clerks from one department and from one set of books to another, and next, by having the books frequently examined by skilled bank accountants.. The suppression or substitution of deposit tickets, charge tickets, etc., can be prevented by requiring all tickets to be signed or punched, in a manner not easily imitated, and recorded by the teller through whose department they pass before being delivered to the book-keepers. It is desirable that deposit tickets and ])aid checks as received from the book-keepers should be assorted,, and each depositor's checks and tickets filed away by themselves. The credit tickets for loans, collections, etc., having been signed by the cashier and cut by a teller, it becomes impossible for fal.se entries to be made from these tickets without discovery. The accounts of each depositor can also be checked directly from the vouchers without reference to his pass-book. One of the most essential safeguards is the use of two ledgers for dealers' accounts,— a dealers' ledger and a skeleton balance ledger (see pages 58 and 59),_kept by different clerks, one ledger thus forming a constant check upon the other. A convenient form of dealers' ledger contains three columns, a debit, a credit, and a balance column. This latter column facilitates the comparison of balances with the skeleton balance ledger, which may be done each morning before banking hours by some clerk other than the book-keepers. As an additional safeguard the same lx)ok-keeper should not be i>ermitted to take off two successive trial balances of the same ledger. Pass-books should not be settled by the book- keepers, nor should they have access to vouchers or retain statements. Another book that is an essential part of an efficient system is a register of pass-books. This book should be kept by a special clerk or auditor, who should settle the pass-books and compare each balance with the duplicate accounts in the ledgers. A convenient form of this register pro- vides a space at the left for the names of depositors followed by twelve money columns, representing each month in the year. When the pass-book is settled the date and balance are entered in the proper column. A glance at this book would show an officer how often each dealer's pass-book had 83 I { BANK BOOK-KEEPIN(; been setileil and the successive balances at the time of settlement; and he would know, what is even more important, what pass-hooks had not been settled, and could have them promptly called in for settlement. The efficiency of this record may be still further enhanced by having columns which show when the pass-book was received, number of vouchers, the name of the person to whom delivered, and the date when delivered. Pass-books should be balanced regularly each month, and checked with the dealers' ledgers, omitted credits being checked from the receiving teller's records and from the collection and discount departments. Canceled checks should be listed by date and amount upon a special sheet of voucher-list. This list may be written up daily, ready for delivery to the dealer when the pass- book is settled, thereby avoiding the necessity of writing the checks in the pass-book. Frequent examinations of the entire records of the bank should be maintained, and careful count made of the cash, securities, collateral, etc. Opinions differ among bank managers as to the best method of bank examinations. Some select an examining committee from among the clerks; others employ ex{>erts to make a complete audit of all dei)artments once or twice a year; others shift the clerks at unexjiected intervals; while still others employ an auditor to examine one department monthly, the succession of the departments so audited l>eing constantly changed. The latter plan, which permanently provides for the position of auditor, has been adopted in many New York banks, and possesses advantages that are apparent. The auditor examines the different departments at irregular intervals, and reports the result of the investigation direct to the cashier. In addition to his duties as auditor he furnishes information to de|>ositors concerning their accounts, balances and delivers pass-books, receives reconcilements from correspondents, and thus effectively prevents collusive communication between the book-keepers and the bank's customers. A competent bank auditor should possess thorough familiarity with bank routine, a compre- hensive knowledge of bank accounting, clear information concerning tellers' and l)ook-keepers' proofs and their relation to each other, and have had much experience in the actual practice of bank examining. The first requisite of a careful bank examination, whether made by an examiner or auditor, is that the department to be examined should receive no information of it in advance; if the least chance be given beforehand to prepare for the examination, a defaulter can generally defeat the best of systems. As suggestive of the various points to be covered by the auditor, the following outline fof examination of the different departments is submitted: Count all cash and compare same with amount called for by the paying teller's proof. List all checks that have been paid during the day, and scrutinize all charges made by him to the tellers, cash items, so-called, clearing-house transactions, and all irregular entries. Note what tickets are held in his cash, and see that the total cash on hand together with the checks paid during the day, added to the amounts charged to other tellers, etc., equals the amount of his cash at the close of the previous day. Verify receiving teller's proof by counting his cash and listing all checks drawn on other banks received among the deposits during the day, and see that all checks intended for the clearing-house have been properly transferred to the clearing-house sheet. Carefully examine city and foreign office items, being certain that nothing is held which is not collectible next day or cannot be properly charged to corresjx)ndents. List all checks drawn on the bank, received among the deposits during the day, which together with checks on other banks, city and foreign office, and his cash, should each equal the total amount of deposits received, which should also be listed and footed. Great care should be taken that none of the checks drawn on o^her banks are fictitious, or have not properly come through other departments of the bank. Check third teller's proof and count his ca.sh. Carefully examine all charges made to out-of- town correspondents from the foreign office of the previous day, proving same. Check city office of the previous day, noting that everything has been collected which is called for by the proof of that day. Carefully call back all mail received on day of examination, observing that the proper SUBSIDIARY SUBJECTS entries have been made for same. Prove additions to the clearing-house sheet, and scrutinize ali items which appear to come from other departments and check back to their source. Examine all notes left for collection, past-due items, irregular items, and see that no checks are fictitious, and that there are no checks taken from the mail that have not been credited. Notes left for collection may be proved by the tickler ordinarily, but if any have been purposely omitted by the collection clerk the correct amount can only be determined by examination of the pass-book of the depositor, which contains a memorandum in the back of the book; notes and items sent away for collection should be verified by correspondence. M • imriH M Ml tprt II HMat w cimvMtaft iM iniHi iMii u If tlplv H flM M 1^ To Tkt Ftmrik Nmtumal B*nk of tk* CUy of Ntw York. J8g •fi- Your statement of aeeount rendered to. hmt been examined and agrees with our books with exceptions {if any) noted below. ..showing balance Dr. THB rODBTB lATlOliL Bill OF THE CITT OF lEf TOBL n aooouit WITB- JiTIOIAL Bill OF ... RKCONCILEMENT OF ACCOUNTS TO. ..Cashier. Cr. .18Q ▼• B*Mt (not in your aceouot.) ItaittMMiaTnadt, Tm BiUt (not o« oar Books.) TNr(«tkV.T.Ii]aMi) >S>' .C' 1^- Wt CMit (not in your account,) finfti bnud (OuUtanding) Not Toa (Sndit (not on our Books,) OvSaluoi, Cnitt; uid alM wbMhw jiifHIi ALtSTofM AafHial* dnili, plmi ^ will ooafv • f«Tor by filUiif np and rebirniog the above bUak. In reporting DiSerencm be particulv to tute DATE of Charge or charted or ereditad by yoo. In referrlB( to renituncei pleaie adviie DATE of letter containing them. WHEM due and WHERE ■■g DRAFTS ia daairad for refereocc in eaae of inquiry ; iu>t neeoaary. boweeer, giving in detail tlwae laat itauad. Wtaen iuaing I* twr accoaBta nodarcd yoa. aad advlae-ua of auch iaaaa and eaanhiatioi^ FORM OF RECONCILEMENT. List bills discounted or compare with discount register and prove same with general ledger. Any bills discounted that are away for acceptance, collection, etc., must be proved by letter, noting particularly that all have been actually sent, as some may have been ordered back, prepaid, etc. Report all past-due paper, collateral loans not covered by required margin, and any collateral for 8$ BANK BOOK-KEEPING which no quotations can be found. Compare special deposits with list, see that proper receipts have been taken for those delivered, and list any securities which are not held as special deposiu or collateral to loans. Take proof of general ledger. Count and prove all bonds, stocks, and mortgages called for by the general ledger, verifying by correspondence those that are held elsewhere. Examine current expenses, taxes paid and Premium account, being certain that no irregular entries have been made. List and prove cashier's checks outstanding, and verify Certified account. Write reserve agent and all correspondents to advise the auditor at his private address the balance due the bank at close of business on date of examination. After the auditor has taken charge of the book-keeping department, the general book-keeper should be instructed to take off a proof of the general ledger, and the book-keepers should not be again permitted to touch the dealers' ledgers until every balance has been struck and carefully taken off by the auditor or his assistants. The differences, if any, may be found and checked up at any time later. Accounts in the general ledger may be proved in most cases by the vouchers connected therewith. Bonds to secure circulation and redemption fund are proved by receipts and letters of advice from Treasurer U. S.; certificates of deposit, cashier's checks, etc., by stub of books; securities, by actual count; expenses, by receipts; bank balances, by reconcilements— an excellent form for this purpose being given on page 85. A record of reconcilements should be kept in a book arranged similar to the register of pass-books, previously described. It should show the date at which the reconcilement blank was mailed to the correspondent and the date upon which it wa» returned, together with the balance. Reconcilements should be required monthly and all errors, discrepancies, etc., promptly investigated and adjusted. DC— THE BASIS OF LOANS. 119. It has been shown that the earnings of a bank come mainly through the loaning of its money; and it is easily seen that if the money paid in by stockholders were the only available fund for loaning it would be impossible to pay the running expenses, to say nothing of earning dividends. In fact, it is the depositors' money that is loaned; and hence the bank is bound to see that the least possible risk is encountered. As far as it can, the bank should make sure of the repayment of its loans before they are ventured. To the greatest extent this is done by requiring the deposit • of collateral security in the way of marketable paper, which can be realized upon at once in default of payment. It is customary, also, to require in each case one or two additional names as endorsers; although it has now become the prevailing practice for banks to invest quite extensively in what is technically known as "single-nam6 paper." This species of paper is issued by well- known houses who sell their goods on open account, and as the old method of settlement by note has nearly disappeared in all lines of trade, the merchant who does a large business, and who desires to pay promptly for his purcha.ses, is obliged to borrow, which he does, upon his open accounts. But upon whatever basis bank loans are made the question of personal credit or responsibility is an important factor; and hence it is that every well-conducted bank must have within itself the means of knowing the standing of its dealers. It is even the custom of banks to require of new depositors such assurance of their standing as will render the future relations equitable and unembarrassed. The credit man of a bank, whether he be one of its regular officers or especially appointed for that work, should be not only a shrewd and far-seeing man but should possess an even temperament, and no end of patience. He should have a clear insight into business, as well as into the motives of men; should be able to detect at a glance any evidence of crookedness or even of weakness. The borrower of money is interested in making a fair showing, not only of his financial ability but of his integrity; and if there are any loop-holes in either, he will do his best to conceal them. It is the credit man's business, however, to discern them; and he must do it without disclosing his method or giving offense. It is a delicate matter to refuse accommodation to a dealer; but some- times it must be done, and it can be done by a tactful man without disturbing friendly relations. 86 SUBSIDIARY SUBJECTS The three things requisite in a borrower are: (1) character, (2) capacity, and (3) capital. The first two are ascertained by general repute, personal investigation, and the consulting of reliable authorities. There are many things that enter into what is known as business character. Integrity, of course, lies at the bottom of it; but personal habits have to do with integrity, and so the credit man is careful to note personal habits, as well as personal history. Is the man in the habit of meeting his engagements promptly ? Is he economical in his living ? Is he conservative or is he reckless in his business ? Does he give extensive credits, and is he slow in collecting his debts ? Does he frequent saloons ? Is he careful as to his associates ? Does he gamble ? Is he frequently tempted to take a "flyer" in the stock market ? Is he strictly honest, and unfalteringly truthful ? How does he stand in the estimation of his neighbors ? These are little questions in themselves, but viul to the credit man, and he never fails to consider them. As to cai>acity, he must ascertain if the would-be borrower is a man of experience and of broad views; if he is what is known as level-headed. Can he see the end from the beginning ? Is he a good judge of men ? Does he give i>ersonal attention to his affairs, and is he a master of detail ? Does he watch his competitors, and know just what is hapi)ening in his line ? Does he keep up with the times ? Is his store attractive and popular ? Does he advertise his business judiciously ? Is he interested in outside enterprises ? Even if all these considerations are in his favor the matter of capital should be seriously con- sidered, and to this end it is not unusual to require a detailed signed statement of the financial condition. Such a requirement is no impugnment of unsoundness; it is simply a business proposi- tion which should be cheerfully and promptly met, and which the borrower would do well to voluntarily offer. The National Association of Credit Men thus characterizes the propriety and fitness of the signed statement: "Good credit in the markets of the worid enables every merchant to add to his ability to do business. It gives him the use of enlarged capital, thus enabling him to carry a more complete stock, increase his sales, and enlarge his profits. Large means are not always necessary to the creation of credit; what is most desirable is that credit be in proper proportion to the actual means, and in harmony with the conditions which create and maintain it. A merchant's capital is the sum of his net available resources, plus his credit— the giver of credit is a contributor of capital, and becomes, in a certain sense, a partner of the debtor, and as such has a perfect right to the fullest information concerning the debtor's condition at all times." The questions asked on a Correct Statement blank are of a nature not only to show the condition of the business but tend to indicate the character, prudence and business sagacity of the man. Many a merchant has been saved a loss and had his condition much improved by the thoughtful and observing credit man suggesting an increase of insurance, a decrease in the rate of interest, a cutting down of indebtedness through the reduction of surplus stock, and even urging the collection of large outstanding accounts. And all this is for the benefit of the man who has made a full showing of his affairs. If a bank is called upon to show preference in the applicants for loans it will, other things being equal, prefer its own best dealers; those who keep the largest and most uniform balances, and who are not its most frequent borrowers; and while there is no rule requiring it, a reasonable view of its position as a conservator of business prosperity will incline it to favor good commercial paper rather than that based on the more purely speculative ventures. It is along these lines and from these considerations that a bank is properiy defined to be "a trader in money for the security of creditors and the convenience of debtors." 87 INDEX. I ■ Advice of payment, 30, 31, 32 Analysis of bank statements, 78 Assistant cashier, 7 Auditor, 84 Auxiliary books, 79 Bank management, 5, 83 Bank deposits, 11 Balance ledgers. 55. 56, 57, 59 Balance ticket, 71 Basis tor loans, 86 Bills discounted, 18, 21, 22 Book-keepers, 7, 8, 48 Boston system, 59 Call loans, 20, 80 Cancellation, 15, 74, 84 Capital stock, 6, 78, 79 Cashier, 6 Cashier's checks, 39, 56 (note) Cash items, 16, 41 Certification, 15 Certificates of deposit, 38 Charge tickets, 18. 19, 21, 31, 40 Check clerk, 7 Check, form of, 14, 39 Chief clerk, 7 Circulation, 50 (note), 78, 79 City office, 11, 12, 16. 38, 41 Clearing-house, 9, 10, 68 Association, 68 Balance ticket, 71 Certificates, 82 Claims, 74 Credit ticket, 71 Delivery clerk's statement, 69 Exchanges from, 74 Fines, 74 Manager's receipt, 73 Preparation of exchanges. 68 Proof, 72, 73 Routine, 70 Rules, 75 Settling clerk's statement, 69. 70 Collateral, 20, 21, 81 Collateral note, 81 Collection accounts, 25, 26 Collection clerk, 7, 25 Collection charges, 25, 33 Collection register. 26, 28 Computation of reserve. 75, 76, 77 Credit-books, 40, 42, 43. 48. 53 Credit department, 86 Credit tickets, 18, 21. 31, 71 Customs checks, 38, 39 Debit-books, 40. 42. 48, 51 Delivery clerk, 69 Demand loans, 20, 80 Dei>osit ticket, 9 Discount clerk, 8, 18 Discount register, 18 Discount tickler, 19, 20 Dividend-book, 79 Drafts, 40 Duplicate ledgers, 58. 83 Duties, how paid, 38, 39 Earnings. 5 Endorsements, 29, 30 Examinations, 83 Exchange, 11, 20. 40. 49 (note) Exchanges, 10, 68. 70, 74 First teller. 8. 14, 15, 16 Foreign office. 11, 12, 25, 41 General balance ledger. 55, 56. 57 (General book-keeper, 8. 48. 62. 63 General credit-book, 48, 53 General debit-book. 48, 51 General ledger. 48 General proof, 62, 63 Instalment-book, 79 Interest, 22, 50 (note) Kinds of U. S. money, 82 Ledger-keeper. 7. 58, 59 Ledgers. 48, 56, 58. 59. 84 Letter of advice, 26, 31, 32 Letter of credit, 79. 80 Liabilities, 61. 78 Listing clerk, 7, 10, 69 Loan tickets, 21 Manager clearing-house, 68, 73. 74 Messengers, 38 Minute-book, 79 Note teller, 8, 38, 40, 41 Officers, 6 88 Offering- book, 18 Opening entries, 79 Organization of banks, 78 Overdrafts, 14, 78 Pass-book, 10. 83, 84 Paying teller, 8, 14 l»osting. 55, 57. 58 Preparation of exchanges, 10, 68 President. 6 Private banks, 79 Protest, 22 Qualified endorsements, 29 Receiving teller, 8, 9 Reconcilements, 85. 86 Reciprocal accounts. 25 Redemption fund, 51 (note). 78. 79 Remittance letters, 26, 27, 28, 31, 32 Remittance register. 28, 29 Reserve fund, 6. 61, 75, 78 Resources, 60, 78 Returned checks, 50 (note). 74 Route-book, 38 Second teller, 9 Securities, 20, 21, 80, 85 Settling clerk. 10. 69, 70 Signature-book, 9 State banks, 79 Statement, 60, 61, 63, 70. 77 Statement of condition. 60, 77, 78 Stock certificate-l>ook. 6. 79 Subscription-lx>ok. 79 Supplementary books. 48 Surplus, 78 Table of U. S. money. 83 Taxes, 65 (note). 78 Tellers' differences, 16 (note) Third teller. 8. 38 Tickets, 18, 19, 21, 31,40 Ticklerizing, 19, 29 Time collections, 25, 30, 31 Time loans, 20 Transfer-book, 79 Undivided profits, 67, 78 United States money, 82 Vice-president, 6 t ■lUN 1 1 ,i,2ii Date Due ' TBHIil 1 > 1^ ♦ :i ft r'' I Packard Bank book- keeping mSH C NEH PBB9 1832 END OF TITLE