It is important to remember that by head office is meant the executive office of the bank. Usually the head office building will contain the principal branch of the bank, as well as the executive offices. Though housed together, the two are entirely distinct. The principal branch is operated as other branches are; it has its manager and full complement of staff; the manager conducts the business with the same degree of responsibility to head office as do the managers of branches more remote.

Executive Office Distinct From Principal Branch

Of course, being the principal branch, it transacts some peculiar kinds of business - a large part of the bank's cash reserves will be carried by it, and the call loans to stock brokers, already referred to, will have considerable importance if the principal branch is in Montreal or Toronto. But head office itself transacts no actual banking business with the public. It is merely the place where the executive authority and the machinery for watching and keeping the records of the branches are lodged. It would hardly be practicable to describe the head office routine in minute detail. In all probability the practice of the various institutions would not be uniform. It will serve the purpose if the several chief departments, found more or less developed in all head offices, are briefly described and their functions explained. They may be said to be four in number: the stationery department, the inspector's department, the chief accountant's department, the general manager's department.

Stationery Department

As each one of the important banks has a large number of branches requiring to be supplied with cheque and statement forms, paper, pens, ink, blank ledgers, registers, and other books, and stationery of all kinds, it is found to be advantageous to systematize the purchase of the articles. Of course, each one of the hundred or so branches might buy its stationery where it chose and as it wanted the articles. But it is easy to see that much is to be gained if, instead of such desultory buying, it is arranged so that practically the whole of the stationery required by all the branches for a whole year is bought at one time by one man. He can place large orders in one place and get all the advantage that goes with wholesale buying. That is the function of the head of the stationery department.

Each branch is required to send in to him by a certain date in every year its requisition for stationery-He buys it and ships the goods to the branches. This purchase of stationery by the banks is quite an important element in the stationery and bookbinding: business. The various firms compete in a lively manner for the bank orders. Sometimes a good deal of friction and ill-feeling develops as a result of the placing of the orders; and the stationery clerk has to exercise considerable diplomacy in awarding them, lest he offend some valuable customers of the bank.

Inspector's Department

The inspector's department is the headquarters of the bank's staff of inspectors. At the head of this staff stands the chief inspector. This officer fills a highly important place. In some banks one officer holds the dual position of chief inspector and superintendent of branches. However, it is not necessary that those two positions be rolled into one. When it is, the officer who holds it will be virtually an assistant or lieutenant to the general manager. His relations with the latter will be very similar to the relations of the branch accountant to his manager. He is under the authority of the general manager, but the directors expect him to check up his superior. In the event of the chief executive proving unfaithful to the bank or of his giving orders that would clearly result in loss of the bank's money or in the placing of it in extreme jeopardy, the chief inspector and superintendent of branches would be expected to go straight to the board on his finding it out. Especially since it turned out that the Czar-like rule of the late general manager of the failed Ontario Bank had such disastrous results, have the bank boards shown a disposition to place checks and safeguards about the power of the general managers. In most of the large banks those safeguards existed before the Ontario Bank troubles came to light. The systems of branches had grown so extensively as to call for the employment in the head offices of several highly paid men of large capacity - men heavy enough to take a firm stand in opposition if the general manager showed a disposition to speculate as the Ontario's general manager speculated. The chief inspector, therefore, can be regarded as being in a measure responsible to the directors, though under the authority of the general manager. He may personally conduct the inspections of the principal branches, and supervise and direct the other inspectors in their work of examining the rest of the branches.