151. Coupon Department, Receiving

A coupon is an interest warrant attached to a bond, payable to bearer on the interest due date. The coupons usually mature semi-annually on the first of the month in which they are payable, though the coupons of some bonds are payable quarterly, and some are payable on some day other than the first. A bond having fifty years to run must have one hundred interest coupons attached to it, and if these coupons were of any size, a large block of bonds would occupy a great deal of space. The coupons are therefore very small and consequently very annoying to handle. Most of the railroads of the country have fiscal agents in New York City for the payment of coupons. A large percentage of these coupons is collected through the banks and trust companies. They are so hard to identify, unless the number of the bond is taken, that great care must be exercised in handling them, or serious losses may occur.

In the first place it will be found worth while to have some one person charged with the responsibility of receiving all coupons and collecting same. If the coupons are due or past due and payable, on presentation they may be credited as cash. If not yet due or payable outside of the city, they should be taken for col-. lection, the same as any other obligation not yet due. They may be received by the bank through any of the following channels: In a deposit at the receiving teller's window; enclosed in a special remittance letter; by express or registered mail if in large quantities; in an ordinary letter with items for the clearing house; routes, collections, etc.; cut from bonds held by the special deposit department for safe keeping, or by the loan clerk from the bonds held as collateral for loans. Through whatever channel received, the coupon receiving or collecting clerk will receipt for the coupons delivered to him. In a great majority of cases, the coupons are enclosed in an envelope of some sort bearing the name of the coupon, the number contained in the envelope and the amount. The name of the owner usually appears somewhere on the envelope.

Coupons of.....................................................................................................................................................

Due.................................................................................................................................................................

Payer................................................................................................................................................................

Owner..............................................................................................................................................................

Received...................................................................... Paid and Advised......................................................

Figure 124. Coupon Envelope.

The first thing to be done is to get the coupons in some uniform wrapper, so that any entries or references may be easily made. For this purpose the bank should have envelopes printed showing on the top line the name of the coupon followed by due date, the payee, the owner, etc., as shown in Figure 124 on page 261. These envelopes should be about five and one-half inches by three in size, and should open at the side, and never at the end. Two colors of envelopes should be used, one for cash coupons and the other for collection coupons. All the information obtained from the envelopes, slips or whatever accompanies the coupons, should be written on the company's envelopes. Each coupon should be marked in some way so that if it is dropped on the floor or lost in any way and subsequently found, it may be identified. The writer knows of no better way than by the use of a collection number. These numbers are taken from the sequence of registering each lot of coupons in a coupon collection register shown in Figure 125 on page 263. Before sorting the coupons into the envelopes, the clerk may number a few envelopes beginning at the first open number on his register, and then write or stamp the collection number on each coupon before putting them in the envelopes. After numbering and enclosing in properly labelled envelopes, all coupons received, the data on the envelopes should be listed on the collection register previously shown in Figure 125 on page 263.

Coupon Register

Figure 125. Coupon Register.

Since the coupon clerk receipted for every coupon in his possession, he should obtain a receipt from every one to whom he delivers coupons. Most fiscal agents require that coupons be enclosed in their own envelopes, so that the messenger will have to take the coupons from the envelopes at the office of the agent and list them on theirs. He should be instructed to bring back the bank's envelope with the money, check or refused coupons, writing the reason for refusal in the remarks column. When the messenger returns to the bank he hands the envelopes and returns to the coupon clerk, who first prepares the credit entries for the individuals from the envelopes. He should then check off the paid items in his coupon register from the credit slips, using a dating stamp in the paid and credited column. The customer should then be advised from the envelope on the regular advice card, and the date stamped on the envelope by the clerk advising. If the coupons are unpaid the credit entry will be omitted. Prompt advice should be sent to the correspondent of unpaid coupons and further advice requested. If the coupons have been taken for cash, the credit will have been set up on the day of receipt. After the customer has been advised of the proceeds to his account, the envelopes are useless, but it is advisable to keep them for a few weeks before destroying. When they are destroyed, every envelope and piece of paper should be carefully inspected to see that no coupons are still sticking there.