A Bank Account - Trade Acceptance
( Originally Published 1918 )
Importance of Keeping. A bank account is a matter of great convenience as well as pecuniary benefit to business men and women. Where considerable business is done, money is constantly accumulating, which, when deposited in a reliable bank, is more secure from burglary than else-where. Sometimes money may be lost through robbery or failure of a bank, but of all losses to which business men may be exposed that by failure of banks is the least.
How to Open. One wishing to open an account with a bank should have some one who is acquainted with the bank officials give him an introduction at the bank. If the bank cashier is satisfied that all is right, he will have the prospective depositor write his name in the "Signature Book," so it will be recognized by the bank officials when appearing on checks or other incidental documents signed by the depositor. He is then given a deposit ticket, and proceeds to make his first deposit.
The Deposit Ticket is a blank form which the customer fills out so as to show the date, the amount and kinds of funds deposited.
The Pass Book
If money is deposited in a bank to remain there for an indefinite time, the depositor receives a certificate of deposit, but if he wishes to draw out frequently the bank furnishes him a pass book in which are entered the date and the amount of de-posits. The opposite page shows the amount drawn out. From time to time they are balanced, showing the amount of deposit there is in the bank.
The Check Book
The Check Book contains the blank orders or checks, with a margin on which to write date, amount and to whom the check is given. When filled out the check is taken to the bank, while the memorandum remains in the book.
A Written Order on the Bank directing a certain amount of money to be paid to a person named, or to his order, or to him "or bearer," or simply to "bearer," is called a check. This is the simplest form of negotiable paper. A check requires no set form of wording; any properly dated demand upon a bank, by a depositor, correctly signed, is a check.
When Negotiable. A check made payable to "bearer" is negotiable, and is payable to anyone presenting it, and so is a check that is made payable to someone "or his order," after the payee has written his name upon the back.
Forged Checks. Some forgers can imitate a signature so closely that even the one whose name is forged is not able to distinguish it from his own, and can only swear that he did not make out the check. The responsibility of detecting the forgery is thrown upon the teller. The bank pays every check at its own risk. The person whose name has been forged is not to rectify the forgery, because that would be shielding and encouraging crime.
Raised Checks. To alter the writing and the figures of a check so that it will call for more money than the drawer gave instructions to pay is called raising the check. To prevent this, care should be taken to always fill in the empty spaces with lines. Use words instead of figures. If a raised check is paid by the bank, it can only charge the depositor with the amount for which he himself made out the check, unless he was grossly negligent in giving the amount to be paid. The drawer must take reasonable precaution.
Kinds of Bank Checks. There are four kinds of bank checks: (1) The ordinary check, already described; (2) the certified check; (3) the cashier's check; (4) the bank check for travelers, which see.
Certified Checks. A certified check is one on which the cashier or paying teller of the bank on which it is drawn stamps or writes across its face, "Certified," or the words, "Good when properly indorsed," and signs his name as cashier or teller, as the case may be. The amount of the check is at once charged to the drawer's account, and is the same as cash withdrawn. The bank is solely responsible to the holder of such a check for payment.
Cashier's Checks. These constitute a common form of exchange similar to bank drafts. When a person borrows money from a bank and does not want it placed to his credit in that bank, the cashier gives him a check on an exchange bank for the amount borrowed, signed by him as cashier, which check may be indorsed to somebody else like any other check or deposited in any other bank.
Always Keep the Stub of Your Check Book, and in issuing a check always fill the stub out first. Dating a check on Sunday or holiday does not invalidate it. Giving a check is no payment of an indebtedness unless the check is paid.
The Death of the Maker of a check before presentment to the bank in most states renders the check null and void, but in some states the statute provides that a check may be paid by the bank within a limited time after the death of the maker.
Payment of a Check May Be Stopped by subsequent order to bank by maker before presentment of check.
When Sending a Check Away from your own town or locality always have it certified, as this renders it easier for the person to whom you send it to get it cashed.
Holding Checks Too Long. In most states the law limits the time for which the recipient of a check may, without risk, hold it before collection. The usual limit is thirty days. After that time, collection cannot be enforced. The bank on which it is drawn may fail. In that case the holder cannot go to the maker and ask for another check. Or the drawer's balance may have gone below the sum called for. The time and the rule vary with locality. Every recipient of checks should inform himself of the limits that prevail in his own locality. Only by exact knowledge of the rules can he safely retain the check and hold the maker responsible. The safest plan is to deposit all checks as early as possible. Every business house should deposit all its checks daily.