This section is from the "Practical Banking" book, by Albert S. Bolles.
It has already been explained, in connection with the receiving teller, that the moneys received by him are the principal sources of supply to the paying teller, but if the payments at any particular time are running heavier than the receipts, recourse must be had to depository banks for funds. In this case requisition is made on the treasurer, who draws the amount from the nearest bank, and takes the paying teller's receipt on the stub of the check book. The bank accounts are drawn upon for payments to depositors, also, in another way. A depositor frequently prefers to receive his payment in a check on some commercial bank, rather than in money, thus lessening the risk of loss, and in many cases creating additional evidence of his transaction. In this case the paying teller sends the depositor, after verifying his draft, to the secretary's window, and himself hands the draft to the secretary, who gives the check to the depositor. On the return of the draft, the paying teller receipts, as before, in the margin of the check book. Thus, the receipts of the paying teller are, first, from the receiving teller; second, from the treasurer in money drawn from the banks; and, thirdly, in checks which are immediately issued. His payments are almost exclusively to depositors. When, as has already been said, the depositor presents himself at his window with a request for a certain sum of money, the paying teller has to make the following inquiries:
First.—Is the pass book presented?
Second.—Is there sufficient money on the account to pay the draft? In order to ascertain this he requests the bookkeeper, by mentioning the number of the account, to inform him of the present balance, or, if there be sufficient time, examines it himself.
Third.—Is there a properly made out draft for the amount? If not, the teller usually makes it out himself. (See form, page 164.)
Fourth.—Is the signature genuine? To ascertain this, he turns to the signature book (the entire series being near him), and, finding the number of the account, compares the signature of the draft held in his hand with that originally written in the book. It is very frequently the case that there will be some slight disparity, far more frequently than in case of a commercial bank. The last withdrawal was perhaps many years ago, and very naturally some change may have taken place in the character of the handwriting. Any substantial variation, such as writing initials instead of full names, or abbreviations instead of initials, he causes to be corrected by a rewriting of the name on the back, if the depositor is present in person. It is not his duty to refuse payment where the signature is not absolutely identical. He must, using the best of his judgment and discretion, form his opinion as to whether the signature is genuine. A by-law of the bank, which has been sustained as reasonable by the courts of the State, declares that any payment made to any person producing the genuine pass book shall be considered valid, and shall discharge the bank. A payment without the pass book is very exceptional, and is never made without the approval of one of the officers of the bank, noted on the draft itself. In. this case, of course, a perfectly incontestable signature must be presented. In the case of persons who did not write, but made a mark on the opening of their account, the mark is now made in the presence of the teller, and the person is asked the various test questions which were asked at that time. If answered correctly, and the appearance of the person sufficiently answers the description, this, with the presentation of the pass book, is considered sufficient evidence to pay on.
In some of the older Savings banks the signature of the depositor, when coming in person to draw, is not taken. They rely, not on comparison of signatures, but on the asking of the so-called test questions. This seems to us a very improper way of transacting business, of which the only advantage has been, in past years, the saving of two cents for an internal revenue stamp, now abolished. The bank retains no voucher for the payment. It is perfectly easy, especially in our crowded tenement houses, for a person who has abstracted a pass book, to obtain such information as the names of parents, etc., and the writer has no doubt that many cases of fraud have occurred in this way, which even the depositors have not been aware of. The identification by questions should only be employed as a last resort, where comparison of signatures cannot be made.
Fifth.—To whom is the amount payable ? Instead of coming in person, the depositor frequently gives his draft to another. The printed forms given by the bank read "pay to myself, or bearer," and in the forms given in the pass book, the word "bearer," is always recommended to be inserted. Occasionally, a draft is presented, payable to order, In this case, of course, identification is necessary, as in a business bank. The bank claims the right to decline any such draft, as it is no part of its business to verify endorsements, but frequently the difficulty is overcome by paying in check to the order of the payee named. Some drafts are presented through the medium of business banks, having been deposited for collection. These are also usually paid by check. The bank has the right, in case of a financial panic, or similar emergency, to demand sixty days' notice before making any payments whatever. In this case, it is the duty of the paying teller to accept such written notices.
The paying teller keeps a draft book, precisely corresponding to the deposit book already described. His daily report is precisely similar to that of the receiving teller, the footing of his draft book being entered as a credit, and the statistics of the number of drafts, and number of books closed, taking the place of number of deposits and number of accounts opened. When an account is closed, the pass book is always retained by the bank; therefore, at the close of the day, the paying teller should have a pass book for each account which has been closed, and his report of the number closed is made by counting these pass books. The following morning this account is verified by a report from the bookkeepers of the number of accounts actually ruled off on the ledger. In case of a lost book, an envelope, of the size of the pass book, and marked with the number, date, &c, is put in as a substitute or dummy. It is the paying teller's business to keep himself supplied with funds, and to give timely notice to the treasurer, or to the receiving teller, that they may have money ready for him in the morning hours when he has leisure to count it.
Form of Transfer Ticket