Don't exchange checks to get twenty-four hours' credit. This is often done. The banks call it "kiting."

If your bank finds that kiting is included in your business methods, do not be surprised if you are asked to withdraw your account. Banks cannot afford to lend you money even for twenty-four hours without interest or security.

To illustrate, suppose it is 12 o'clock noon - after the bank-clearing at the clearing-house. A is short and needs $500. He gives B his check for $500 and takes B's check for $500. B's check may not be any better than A's but A deposits it and has ample time before three o'clock to draw on the deposit and use some of the money. B may do the same with A's check. Other checks or cash are deposited in the morning before clearing-house hours so that the $500 checks may be met when they come in for collection. A may accomplish the same end by having accounts in two banks and by depositing a check on the one in the other.

Forged Checks. Who is liable when a forged check has been paid? This question is often asked, and the answer varies with circumstances. Ordinarily the bank must stand the loss, but if the fraud is the result of carelessness on the part of the person whose name is forged, the bank is not liable. Business men should not only make use of the most approved methods of protecting their checks but they should take every possible precaution to prevent improper use of the blank forms by keeping them in places inaccessible to anyone but those of their own counting-rooms who are authorized to write up their checks.