"On the debit side of the deposit journal appear all checks and certificates of deposit paid; on the credit side are deposits received and certificates of deposit issued. The footings only of this book are journalized. The footings are made direct to the depositors' ledger. The account in the general ledger of "Deposits" is charged and credited from the journal.

"Our ledgers are provided with balance columns, the general ledger having one account to a page, the deposit ledger two. In the general ledger there are four money columns, two for items and two for balances. In the deposit ledger there are but three columns, Dr., Cr., and balance. In the balance column over-drafts are distinguished from credit balances by being entered in red ink.

"We use only one collection register. It is made to serve a double purpose, viz.: it is a record of bills, etc., brought in by our customers to be sent out for collection, and also of collections received from our correspondents and others, excepting sight drafts. After the record is made in the collection register, it is entered in the tickler under the day on which it falls due. When the collection is paid we make the proper notation in the tickler and either credit our correspondent or remit direct to the sender according to directions. In case the collection is not paid and is protested, immediate notice is given. Of sight drafts received for collection we make no book record. The letter accompanying the collection is the original and only entry we have. After presenting the draft for payment we note on the accompanying letter how it was disposed of—whether paid or returned. If paid and belonging to a correspondent it is properly credited. If it does not come from a correspondent we remit for it immediately, so noting on the letter. The letter is then filed as a history of the transaction. Our letter-copying book furnishes a history of all collections passing through our hands."

The cashier of a well regulated and carefully managed country bank says:

"Three persons do all the work in our bank. The president attends to the correspondence and takes charge of the loans and discounts. I perform the work of paying and receiving tellers and general bookkeeper, besides the ordinary duties of cashier. An assistant keeps the customer's ledger and helps me in some of the details about the other books. Our loans and discounts range from one hundred and fifty thousand to two hundred thousand dollars. The depositors' balances are in the aggregate usually not far from the loans and discounts. We hold readily convertible stocks and bonds to the amount of forty thousand to sixty thousand dollars. Our capital is two hundred thousand and circulation one hundred and sixty-two thousand. Cash on hand seldom gets "below twenty thousand dollars, and our surplus is fifty thousand. The net profits enable us to pay the stockholders seven per cent., and we generally carry two or three per cent, to the surplus. A dull season occasionally cuts our dividends down to half the usual amount. We have run so close that no dividends were declared for a year.

"My aim in the routine work is to avoid all unnecessary labor. I use as few books as possible. A few years ago I thought a huge journal was indispensable, but I have so systematized the work that I now have no use for it. In fact I have not used a journal at all for more than a year. The bookkeeping is done in such a manner that I can make up a verified statement of our condition within an hour any day after we close. Besides the general ledger I keep only the ordinary balance ledger for depositors' accounts. In this I also keep the accounts of banks and bankers. The accounts in the "balance ledger are arranged alphabetically, and this book is kept so closely posted that the last check paid and last deposit made are entered up within a few minutes after the bank is closed for the day. We have only a few depositors who draw more than four or five checks in a day on an average. For these special cases I provide by giving their account a double space in the balance ledger. In posting the checks and deposits my assistant makes his entry direct from the checks and deposit slips. As the entry is made he marks the page by leaving projecting at the top of the book a narrow strip of colored paper. This enables him to turn at once to the pages on which changes have been made during the day. These pages are footed, and the footings compared with the columns in my cash book, headed "depositors' debits" and "depositors' credits." The comparison furnishes a proof that all checks and deposits for the day have been posted. An additional test comes when the balances of all the accounts are extended for the next day and the footings compared with the general ledger account of "depositors" after the totals of the various books have been posted. I do not enter in my cash the names, but merely the amounts of debits and credits belonging to the depositors' accounts. After the work has been proven I take the balance ledger and have my assistant read over the checks and I compare his postings to satisfy myself that the postings are all properly made. When this is done I run over the general ledger, the postings to that having been made, and carry the balances to the daily balance sheet. This proves the entire work of the day."

The Daily Balance Sheet is a device for proving the work of the bank bookkeeper and for preserving, in a concise and regular formr daily statements of the bank's condition. The new balances are arrived at daily through debit and credit differences. The illustration given in this chapter, though not a complete showing of all the accounts upon the specimen pages furnished for the purpose, will serve to demonstrate the principles of the work. For example in explanation see the first account, viz.: Loans and Discounts. The balance on the evening of August 15 was 167,15073. The following day there were payments in excess of new loans and discounts to amount of 311.44. This credit difference is subtracted from the debit balance, leaving the new debit balance 166,839.29. Again; the balance against the First National of Philadelphia on the evening of August 15 is 40,737.31. On the following day the remittance to that bank in excess of credits given it were 23,513.10. The debtor difference is added to the debit balance, and the new balance is 64,250.41. The first or upper line of footings represent the total balances of banks and bankers' accounts, the lower line of footings are the proofs or trial balance. All the entries in this book may be made in either ink or pencil as may be desired. Ink is, of course, preferable, but as they form only an auxiliary proof and leave a record for future reference, if desired, there is no special objection to pencilings.

General Ledger Accounts not Appearing on Illustration of Daily Balance Sheet. {See opposite page)

Circulating Notes Received. Unpaid Dividends. Certificates of Deposit. Cashier's Checks. Remittances.

Notes of this Bank.

Notes of other National Banks.

U. S. Legal Tenders.

Gold Coin.

Silver $           Nickels $

Treasurer of United States. Comptroller of the Currency. Suspense Account.


Daily Balance Sheet Of the National Bank