18. Duplicate Pass-Books

Where the identification of the depositor is without question, and the manager is fully satisfied that the pass-book has been lost, the balance of the account should be withdrawn by check and a new account opened with a book under a new number. A memorandum, giving the circumstances of the case, should be made on the old account in the ledger.

19. Machine Statements

Nearly all the large city branches of Canadian banks have adopted the practice of rendering machine statements of the customers' accounts in preference to using pass-books for the purpose. The statement system eliminates the dreaded "pass-book night" at the end of the month, relieves the congestion at the ledger wicket, enables the accountant or statement clerk to maintain a constant check on the accuracy of the ledger balances and, above all, lessens the chance of fraud and error by insuring the receipt by each customer of a statement of his account at regular intervals, monthly or weekly as desired. With the pass-book system a mistake might run for several weeks or months thru the failure of the depositor to bring in his pass-book to be balanced. Where a regular statement is sent an error is sure to be detected on receipt.

The adoption of the statement system involves no extra expense in the long run, as the improved service to the customers soon justifies the initial expense of the statement machine and the salary of a statement clerk.

Please Examine At Once And Report Any Difference In The Statement Direct To The Accountant

in account WITH

THE CANADIAN BANK OF COMMERCE ------------------------

month oF

KINDLY NOTIFY THE BANK OF ANY CHANGE OF ADDRESS MONTH OF

No. of

Items

Paid

CHECKS

CHECKS

CHECKS

CHECKS

DATE DEPOSITS

BALANCE

1

BALANCE BROUGHT FORWARD

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Balance Credit

26

27

Index To Abbreviations:

D Discounts Credited C Collections Credited R Returned Items

L List of Checks Debited I Interest

_________________Vouchers Returned

Figure 37

The machine usually used is the Burroughs Adding Subtracting Statement machine and the method of operation is very simple. After the checks and deposits passing thru the current ledger have been checked to the supplementary cash book the first thing in the morning, they are canceled and handed to the statement clerk, who lists them on the various statements. Figure 37 with the perforated balance slip to the left is the form in general use. The operator first records on the machine the last balance shown on the statement and, after making all the previous day's entries, debits and credits, extends the balance to date. As it is necessary to have slips for each entry the ledger-keeper furnishes the statement clerk with a memorandum for each accepted check outstanding, which is replaced by the check itself as soon as it comes in. The statements are filed in ingenious trays so divided that the balance slips of the day's operative accounts project from the general file of statements. Thus the active and inactive accounts for the day are separated without disturbing the alphabetical or numerical arrangement. It is therefore a simple matter to make a comparison of the statement files with the relative ledger balance if desired. Where the employment of a special statement clerk is not warranted, statements can be made up at regular intervals instead of daily, but the work should be so arranged that the entries for only one day should be necessary at the end of the month.

The pass-book is still used in connection with statement accounts, but simply as a receipt for deposits to the customer. A special form is generally used with provision for deposit entries only.

Pass-books will, of course, continue to be used for certain accounts, but the envelop system can be used to advantage for small accounts. An envelop specially ruled with a progressive balance is kept entered up from the ledger or vouchers, the checks being enclosed as entered. With the exception of perhaps a few entries, the statement is always ready to be handed to the customer as opportunity offers. This method, combined with the statement system, is of great assistance in relieving the vaults of an accumulation of checks and vouchers.

Review

What precautions are taken upon opening an account? Who approves the opening of a new account?

What provisions are made in the case of professional partnerships? Of joint stock companies?

To what extent can the bank guard against fraud?

How is interest on savings accounts computed?

What is the value of the monthly statement system?