It will not be necessary for present purposes to describe the detail of organization of each of the three main classes of banks. The commercial bank plan of organization will serve as a model and, in fact, state laws are often based upon the national bank act in this respect.

So far as organizing a bank is concerned, the law makes no distinction between the large bank and the small; in the eyes of the law they are identical. In the early days, immediately following the independence of the United States, all banks received their charters direct from Congress. Owing to the misconception of banking and the popular distrust of banks, it was a hard matter to secure a charter, consequently abuses developed to such an extent that what were known as "free banking laws" were passed in the several states to correct the political evils incident to bank organization. This plan of procedure obtains to the present day, and any number of "natural" persons, not less than five, may organize a bank. Articles of Association are drawn up and a Certificate of Organization is executed. The capital is subscribed and at least half of it must be paid in in money before the bank may commence business. The balance must be paid in in regular installments within five months. The minimum amount of capital is based on the population of the city or town where the bank is located. The Comptroller of the Currency has power to authorize the organization of a national bank.

The bank must have a president, a cashier, and at least five directors. The directors must own at least ten shares of stock, except when the capital is not more than $25,000, when five shares are required. The directors are elected by, and represent, the stockholders who are the owners of the bank. They meet at least once a month and direct the policy of the bank. The directors elect the officers, a president, vice - president, cashier and assistant cashier, who are the executive heads of the institution and are charged with the duty of administering its affairs. The number of vice-presidents and assistant cashiers depends upon the size of the bank. The clerks divide naturally into two groups, tellers and bookkeepers.

The student must not imagine that each bank, in its internal affairs, is a law unto itself and that the duties and responsibilities of directors, officers and clerks depends upon the size and location of the bank. An acorn dropped into the ground will dig into the soil with its tiny roots, and send up a green shoot bearing two or more perfect leaves. So far as plant organization is concerned, the embryo tree is identical with the giant oak with its sturdy roots and trunk and far-spreading branches and leaves. So it is with banks. The duty goes with the office rather than with the man. The responsibility of the directors is the same in all cases. In the very large banks, we find the board organized into a discount committee, a finance committee, examination committee, etc., in order that the directors may the better keep in touch with the affairs of the bank and fulfill their moral and legal obligations to stockholders and depositors.

In the small country towns the president is usually inactive. He may be a business man who drops into the bank once a day to consult with the cashier who also acts as teller. There will be a bookkeeper, who keeps all the records and acts as general clerk. Such an organization does not mean that the bank has no teller, nor individual ledger bookkeeper, nor discount clerk; the same man (or men) fills several positions, and his responsibilities are those that go with the particular work in hand. Bank work may be roughly grouped into three divisions: executive, teller and bookkeeping, and this classification holds, no matter what the size of the bank or whether it is commercial, trust or savings.

In large banks, for example, discount or loan clerks relieve the officers of the detail work incidental to the making of loans, or a credit man is employed to collect and keep records that in a small bank are kept in the president's head. Instead of a single teller, there will be two or more, one to pay, another to receive, another to make collections, and so on. The work of all tellers is alike in that they come into direct contact with the bank's customers. The book keepers are divided into those who keep the general accounts and those who keep the accounts of individual depositors. These last may be re-divided into alphabetical groups.

Reference to the organization chart shown on page 23 will assist the student in grasping the general plan of bank organization. The chart will also indicate the usual methods of division of the work as the bank increases in size. The administration and organization divisions printed in capitals are common to all banks, although in some cases they may be known by different terms. For instance the directors of a mutual savings bank are called "trustees."

Stockholders who own the bank elect Directors who direct the policy of the bank appoint Discount Committee Executive Committee Examination Committee Officers who manage the bank employ President Vice-President Cashier (or Treasurer or Secretary) Assistant Cashiers, Clerks who do the detail work, classified opposite, Executive Divisions Of Work Loan and Discount Department Credit Department Auditor, Analysis Department New Business Department Trust Department, Teller Divisions Of Work Paying Teller Receiving Teller Note Teller Collection Teller Exchange or Draft Teller, Bookkeeping Divisions Of Work General Ledger Individual Ledgers Savings Accounts Country Bank Accounts Statement Clerks.