How Collection Bills Are Handled

When received, the bills from local customers are endorsed frequently in blank, and in a shape that would permit of their being negotiated by anyone obtaining possession of them by improper means. To lessen the danger from this direction the bank's name is stamped plainly on the face, and a further protection is gained by restricting the negotiability of the bill through stamping just above the last endorser's signature the legend, "Pay ............ Bank or order." After being stamped properly, the bill goes into the register under its number, columns being provided for all the details necessary to produce a duplicate bill in case of loss or theft.

The next step is to divide the completed from the uncompleted bills. Some banks make the division before, keeping a separate register for each. When this is done the "remitted" and "local" bills are not separated, as it would be rather much of a nuisance to run four books. The completed bills are ready for diarizing; the uncompleted are to be presented by the junior for acceptance in the case of local bills, and in the case of remitted bills, forwarded to the bank's correspondents for collection. Before these latter are sent forward they, too, must be entered in the diary. That important book, and the manner of its working, will be described after we have accompanied the junior on his round with the bills for acceptance.

Presenting For Acceptance

This task is not so simple or so easy as might be imagined. The drafts are drawn mostly upon the merchants and traders with well-known places of business in the town. Procuring their acceptances is not merely a matter of going to their places of business and of coming away immediately with the signatures required. Frequently it happens that on the junior's appearance with his bill the merchant is busy with his customers, and he will ask to have the bill left till he gets time to look it up. Sometimes the junior is told that the shipment of goods against which the bill is drawn has not arrived, and that the bill must be held a few days; sometimes that the amount, or the term, is not right. All sorts of reasons and excuses are given for not accepting promptly. The upshot of the first trip probably will be that a few acceptances have been secured on presentation; also a few straight refusals to accept, and quite a number of drafts left for the next day's rounds, or to be sent in to the bank by the drawees.

When he goes out next day, with a fresh supply of drafts, much the same thing happens. He may not succeed in getting in the bills left previously, further delays and excuses probably being experienced. This is what confronts him. Behind him are the instructions of his superiors that all the drafts must be disposed of promptly, one way or the other - either accepted or refused. If they are left too long incomplete, the bank as collecting agent may be involved in trouble with its correspondents; it may be involved in loss. If the loss is owing to a failure of his, the junior must make it good.