1. New Accounts

As a rule, no new account is opened in a bank except under the authority of the manager or accountant, expressed by initials on the deposit slip. In other words, the privilege of a checking account should be extended only to persons who are known to be of good character and reputation, and therefore no account should be opened with a stranger until he has been satisfactorily identified. To do otherwise is to leave an opening for fraud. Ledger-keepers are usually held equally responsible with the tellers for any deviation from the regulations laid down in connection with the opening of new accounts, especially with strangers.

2. Opening Accounts

When an account is opened a specimen signature of the depositor duly witnessed should be obtained and placed on file - the card system is the best - for ready reference. In the case of a firm or company a specimen signature of each partner, or of the properly constituted signing officers, respectively, should be taken. If a power of attorney is filed, a specimen of the attorney's signature as such should be placed on file.

Every customer opening an account in the current account ledger should be provided with a pass-book and a book of checks. This does not apply, however, to out-of-town customers, copies of whose accounts are sent monthly usually.

Care should be taken in handing out check books and other supplies to customers. The nature and importance of an account should govern the size of the pass-book and the check book supplied.

3. Particulars To Be Recorded In Ledger

The full name, designation or occupation, and address of each customer is written at the head of every page of the account in the ledger. If the customer is a farmer, his lot, concession, and township as well as his post office address should be recorded. A concise description of the personal appearance or other mark of identification of all customers who cannot write their names should be noted in the ledger or on the signature card. Special care should be taken to record correctly the names of signing officers of benevolent and friendly societies, lodges and other bodies of this kind, their powers and other useful information.

In the case of a firm, the names of the partners and, where there is a special partnership, the date of its expiry should be recorded in the ledger; if a trust estate, the names of the trustees and in the case of corporations, etc., the names of the officials authorized to sign checks.

In the case of powers of attorney or of by-laws authorizing officers of incorporated companies to sign for such companies lodged with the bank, the record should state the date when the power is granted, the names of the persons authorized to sign, the extent of the power and the limitations placed upon its use, if any. Special sheets are usually supplied for recording such information in order to obviate the necessity of carrying forward the particulars from page to page; these are inserted at the front of the account.

4. Partnership Accounts

The law does not recognize co-partnerships of professional men, i.e., in contradistinction to traders; therefore, the individual signature of each member is requisite to paper of all kinds. Otherwise, if an account is opened in the name of a firm of solicitors, architects or other non-trading partnerships, a written agreement should be taken (Figure 29), signed by each of its members, whereby they undertake to be jointly and severally liable for every transaction, by check, note or draft, signed, made or indorsed, entered into with the bank by any individual member of the co-partnership in the firm name, or by any person they may designate to transact business with the bank on their behalf. In the latter case a differently worded form is used.

Non-Trading Partnership Signature By Any Member To Bind

........................191...

To THE MANAGER

The......................................BANK

We, the undersigned, composing the......................firm of

....................................................... do hereby acknowledge and agree that we are and will be jointly liable and responsible to the...........................BaNk for all transactions entered into, or to be entered into, with the said Bank in the name of our said firm by any individual member of the same, and that the signature of the name of our firm by any member of the same to any note, bill, draft, check, receipt or other document shall be as binding on us as if such signature had been affixed by each of us respectively under our own hands.

...................................... ..................................... ....................................... ......................................

Figure 29

5. Conversion Of Partnership Into Joint Stock Company

The conversion of a partnership into a joint stock company entails upon a manager the immediate necessity of obtaining from them and placing on file a copy of the company's by-laws, so that all transactions may be made to conform to legal requirements. Also, it should never be overlooked that a partnership differs from a corporation in that the latter is absolutely restricted by the terms of its charter, and its officers' by the authority conferred upon them by the by-laws. The same reasoning necessarily applies to new customers who are already joint stock companies.

6. Joint Accounts

Where a deposit is made to the credit of two parties jointly, the form which should be used is as follows: "John Smith and Jane Smith, or either of them," and a declaration signed by both should be taken in every instance to the effect that the bank is authorized to pay checks on the account signed by either or both. (See Figure 30.)