59. Partial Payments

Partial payments should never be made on certificates of deposit, whether time or demand. If a depositor wishes to use a part of the money deposited, pay him what he wants, cancel the old certificate and issue a new one for the balance, putting the appropriate entries through the books.

60. Filing Of Paid And Cancelled Certificates

If a stub is used, the paid and cancelled certificates should be pasted to the stubs as soon as paid. If a pad is used with a separate record, they should be filed in numerical order for ready reference. A spoiled certificate should never be destroyed, but cancelled and filed as if used and paid.

61. Cashier's, Secretary's Or Treasurer's Checks

A cashier's check is a check of the bank on itself. It is an order given by the cashier to the paying teller - so to speak - directing him to pay a sum of money to the order of the party mentioned in the check. The secretary's and treasurer's checks occupy the same position in a trust company. An unpaid cashier's check is a liability of the bank, and ranks with deposits subject to check. The same kind of record is used as is employed for certificates of deposit. It is the usual custom to paste the paid checks back on the stub. This is a very good plan, but there is no objection to filing them carefully in numerical order.

62. Individual Ledgers

The bank is in business to make money for its stockholders. If it relied solely on its own capital to make loans to those who needed money, it would be a dismal failure as a money-making proposition. However, since so large a percentage of our business is transacted by means of checks, etc., it has something valuable to offer the business man, as a depository for his funds. The banker therefore offers to receive the money, checks and drafts of the business man, to collect the same for him and to allow him to draw against the funds so deposited at pleasure, which drafts the banker agrees to honor up to the amount on deposit. If two business men in the same town are compelled to make payments to each other and both issue checks on the same bank, it is obvious that the only money the bank will be called upon to deliver will be the difference between the amounts of the two checks. The banker knows from experience about how much money he will need to keep on hand, to settle his daily balances with other banks. This reserve is comparatively small and he may have the rest of the funds deposited. Thus, with a comparatively small capital, a large line of loans may be made, if the money left on deposit is large. The record of these deposits must be carefully and accurately kept and must be up to date at all times. The individual bookkeeper is responsible for this part of the work. His records have been the cause of a great deal of thought and study and have produced some very clever schemes for the handling of accounts of depositors.

Certificate Of Deposit Register

(Perforated at a-b) b

Figure 45. Individual Ledger.