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The ABC Of Banks And Banking | by George M. Coffin



The object of this little volume is to give to the public a simple and concise explanation of the principles and practice of banking in the United States. It is designed to appeal to the reader outside as well as inside of a bank. It is by no means the last word or every word about banking. It may be said that it is a primer covering a field that has hitherto been somewhat neglected. In view of the growth of commercial and economic education the author hopes that the book will be serviceable to teachers and students as well as business men

TitleThe ABC Of Banks And Banking
AuthorGeorge M. Coffin
PublisherS. A. Nelson
Year1901
Copyright1901, S. A. Nelson
AmazonThe ABC of Banks and Banking
The A B C Of Banks And Banking 1
-Preface
The object of this little volume is to give to the public a simple and concise explanation of the principles and practice of banking in the United States. It is designed to appeal to the reader outsid...
-Chapter I. Banking In General
The general term Banking is applied to the business of dealing or trading in money, checks, drafts, promissory notes, bonds, mortgages and other printed or written obligations for the payment of mon...
-Banking In General. Continued
So in banking the lending is more of credit than of money, and whoever borrows this money or credit gives the bank some written evidence of his indebtedness, either a promissory note, a draft, a bond,...
-Chapter II. Various Kinds Of Banking
As stated in the first chapter, the business of banking in the United States, where it has had the widest and highest development, is conducted by institutions which may properly be classified as foll...
-Commercial Banks
The business usually done by and properly belonging to commercial banks may best be defined by the following extract from the National Bank Act, section 5136, paragraph 7, describing the incidental...
-Savings Banks
The business done by these banks is confined to the re-ceiving of deposits in small sums, usually limited not to exceed a certain amount from each depositor, upon which deposits interest is paid at ra...
-Loan And Trust Companies
The business done by loan and trust companies is a combination of that done by commercial banks and by savings banks, together with other kinds of business not allowed to banks of these other two clas...
-Chapter III. Capital Stock: Shareholders' Rights And Liabilities
Before a bank of any kind with capital stock can be organized, those who propose to organize it must first ascertain whether they can induce other parties to join with them in supplying the requisite ...
-Chapter IV. Undivided Profits, Dividends And Surplus
Banking, like every other business, is done with the object of making, or earning, a profit on the capital or funds invested in the business. There are different terms applied to these profits; f...
-Chapter V. Deposits; Checks; Lawful Money Reserve
When money is placed in a bank for safe-keeping, or deposited, it is usually received from the depositor by an officer called the teller. If a bank does a small business, one teller both receive...
-Nature Of Checks
A check on a bank is always payable upon presentation during business hours, and the bank upon which it is drawn is under no obligation to pay it unless the person drawing it has the full amount named...
-Power Of Attorney
Sometimes, on account of the absence or disability of a depositor, especially if he is in some active business, it is necessary to delegate to some clerk or other person the authority to sign checks d...
-Overdrafts
Sometimes a bank will pay the check of a customer when he has not the amount to his credit, and any amount so paid out is called an overdraft. This is equivalent to making a loan to the customer, bu...
-Certificates Of Deposit
Instead of acknowledging the receipt of a deposit by an entry in a pass-book, a bank sometimes issues an obligation called a certificate of deposit, by which it agrees to repay the money to the depo...
-Cashier's Checks
These partake somewhat of the nature of demand certificates of deposit, being vouchers for money deposited, issued in the form of a check drawn by the cashier on his own bank in the following form; ...
-Certifying Checks
Sometimes when the holder of a check wishes to be satisfied that it is good and will be paid by the bank on which drawn when presented, he takes or sends it to the bank and has it certified. The che...
-Lawful Money Reserve Form
The amount of the check is then charged to the account of the depositor drawing same, and the effect is to make the bank liable for payment of the check when presented for payment. By way of illust...
-Chapter VI. Issuing Bank-Notes
The issuing of bank notes to circulate as money has usually been regarded as a natural function belonging to commercial banks. Prior to the organization of the National banking system in 1863, commerc...
-Chapter VII. Borrowing Money
Among the functions usually authorized by law to commercial banks and loan and trust companies is the power to borrow money. The theory of this is that there are seasons of the year when the resources...
-Chapter VIII. Loans And Discounts
The profits of banking are derived chiefly from lending out the money, funds or credits represented by capital stock and also by deposits made with the bank, or, in other words, by making loans and d...
-Business Or Commercial Paper
When a promissory note is given by one party to another for some valuable consideration, as money loaned, goods sold, or services rendered, such note, in the hands of the party to whom it is given by ...
-Drafts Or Bills Of Exchange
Besides promissory notes, another form of obligation given for money loaned is the draft, or bill of exchange, like the following specimen: A bill of exchange may properly be defined as a d...
-Protest
When a promissory note made by one party and endorsed by another matures or becomes due, the rule is to look to the maker for payment. In case he fails to pay at the proper time, then the bank must pr...
-Chapter IX. Exchanges; Collections; Letters Of Credit
In the chapter on Loans and Discounts and that on Deposits, something has been said about bills of exchange, collections, drafts and checks, all of which are related to the business of buy...
-Letters Of Credit
Banks which deal in foreign exchange usually furnish what are known as letters of credit to travellers and others needing funds in countries outside of the United States. For instance, a person in...
-Chapter X. Bonds, Mortgages And Stocks
As Banks lend money on the security of bonds, stocks, mortgages and similar instruments and hold them as investments, the following description of these is given: A bond is an obligation, written o...
-Chapter XI. Bank Reports - Examinations
A matter of considerable interest to the shareholders of a bank, as well as to its depositors or other creditors, is its condition, and so far as these interested parties and the general public are ...
-Chapter XII. Directors - Executive Officers - Their Powers And Duties
The legal management of commercial banks and loan and trust companies is vested in officers called directors, elected by the shareholders, and of savings banks in trustees, in the case of stock saving...
-Chapter XIII. Internal Administration And Bookkeeping
IN every line of business good administration and bookkeeping is of the utmost importance, and in the banking business it is especially necessary not only that all transactions should be recorded in a...
-Receiving Teller's Work
When a deposit is made by a customer, the teller receiving it should see that the deposit slip clearly shows the amount deposited and the details of coin, notes, checks, etc., composing same; and afte...
-Paying Teller's Work
While the receiving teller commences the day without any money on hand, the paying teller must be provided with a sufficient amount to meet the ordinary demands of the day at least, and should see bef...
-Paying Teller's Balance Book
Monday, March 30, 1896. Balance - cash on hand, close of business, March 28.............. $150 422 73 Amount received from receiving ...
-Exchanges For Clearing House
Wherever there is a group of banks located, the usual custom is to form what is known as a Clearing House Association, for the convenience of exchanging checks on each other received during the prev...
-Individual Ledgers
The ledgers in which accounts with depositors are kept are called individual ledgers, and in the keeping of these the greatest accuracy, simplicity and clearness should be attained. They should be s...
-Form Balance Column Individual Ledger
Henry Brown. Date. Items. Debits. Credits. Balance. 1896 Mar. ...
-Form Daily Balance Ledger
Names. Mar. 9 March 10,1896. March 11, 1896. Balances. Debits. Credits. Balances. De...
-Discount Clerk's Work
All paper representing loans and discounts made by a bank, after having been authorized by the directors or the discount committee, should be numbered sequentially, so as to give each piece an individ...
-Maturity Notice
MR. James BrowN. Your note for.............. $100 00 With Interest........................................ 3 00 $103 ...
-Mail Clerk's Work
As a bank usually receives by mail a large number of checks, drafts, etc., for collection or in payment for items forwarded to other banks for collection, the opening of the mail Lb an important matte...
-Exchange Clerk's Work
As an important branch of a bank's business is to sell drafts or checks on foreign points, in a large bank this occupies the time of one or perhaps more clerks, whose business it is to fill out the dr...
-Stock Ledger
When all the capital stock of a bank has been paid in, and the stock certificates issued to the shareholders, the record of such certificates and all future transfers of same should be recorded in a b...
-General Bookkeeper's Work
This should be entrusted to a reliable and competent accountant, for it is on the general ledger of a bank that its business should be simply and faithfully recorded, and this is the common centre t...
-Profit And Loss Account
The profit and loss account, into which all subordinate profit, loss and expense accounts should be covered at the end of each dividend period, should be kept by periods so as to show the balance on...
-Chapter XIV. Other Suggestions
A competition in banking compels the doing of many things involving clerical labor and expense, for which no direct charge can be made, much economy can be effected by adopting simple methods of bookk...









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