21. General Organization

The organization of a bank or a trust company depends largely on the volume and kind of business handled. In all financial institutions, except purely mutual associations, such as an incorporated savings bank, the stockholders are the proprietors of the business. They are represented by directors of their own choosing and cannot act except through them. The directors have more or less direct control of the business, depending on whether the board is small or large. If the board is a large one, the actual management is usually left to a few of the directors. The guiding spirits in these small committees are usually, the officers of the institution; thus the board of directors may be merely nominal heads. The directors appoint the officers to whom they delegate the actual operation of the bank. The officers usually employ the clerks, referring appointments of heads of departments and tellers to the board for approval.

In a country bank of discount, the president does not generally devote the whole of his time to the institution. He spends a portion of each day at his desk and passes on the offerings made during the previous day if he calls at the bank in the morning, or those of the current day if he calls in the afternoon. He usually plans how the funds shall be invested and submits his suggestions to the board for approval. The president receives little or no remuneration, but depends upon the dividends from his large holdings of stock.

The vice-president, if there is one, is rarely more than a figurehead.

The cashier is the executive officer of the bank. His duties are referred to in detail in section 64.

The paying and receiving is usually done by a single teller. The teller should have an enclosed cage, with a door having a spring lock. He should not have access to the individual ledger, nor to the pass books left for balancing. He should be relieved by the cashier, if at all. An individual bookkeeper, an assistant and a porter will complete the staff.

22. A Large City Bank Of Discount

The division of the work in a large city bank of discount into departments simplifies the management very much. See Figure 1 on page 21. Responsible men are placed in charge of each department, who have entire control of the men assigned to them, subject to the approval of the cashier. It would be a hard proposition to assign the work of a bank to certain officers, and say that one class of work shall be attended to by the president, that another class shall be handled by the cashier, and so on. Local conditions, personal characteristics, adaptability and previous training determine largely what class of work an officer is fitted for; but they do not always determine whether the title shall be vice-president, cashier or assistant cashier. If the officer has had a wide experience in loan department work, it is natural to suppose that he will be the man to settle the knotty problems that arise in that department and if capable of managing it, given direct supervision. If another has specialized in accounting methods and systems and is capable, he should be given general supervision of the auditing and bookkeeping departments and should be consulted in regard to any changes in the accounting system. Generally speaking, all departments are responsible to all the officers, but directly to the cashier, except the loan, credit and bond departments, which will be under the direct control of either the president or vice-president or both.

Stockholders

Directors

President (a) Vice-President (b) Cashier

Assistant Cashier Assistant Cashier

Credit Department (a) Loan Department (a) Bond Department (a) (b) Paying Teller's Department Receiving Teller's Department Note Teller's Department Mail Department Collection Department Auditor

General Bookkeeper Individual Bookkeepers Check Department Correspondence, General Correspondence, Special Check Files Letter Files Porters Watchmen

Figure 1. Organization Of Staff.

The general correspondence, such as advising customers of receipt of remittances, forwarding items for collection and other regular correspondence, is left to the departments directly interested, and is conducted on regular printed forms or postal cards.

The special correspondence is conducted by the officers, or by the men in charge of special work such as credits, soliciting new business, loans, discounts, safe deposit business, purchase and sale of bonds or transferring of same. These letters should receive special attention, should be typewritten and signed by an officer, who is familiar with the particular branch of the work covered by the letter.

The assistant bookkeepers are often organized into a separate department called the check department. If these clerks keep duplicate records of the ledger accounts the department may be made a very valuable one to the bank. Figure 1 on page 21 shows the necessary departments of a large bank with some slight attempt at subdivision of work. The departments other than those noted are supervised by the cashier and his assistants.