It is not intended in this chapter to describe fully the methods of bookkeeping, as excellent books exist on the subject in general, and also on bank bookkeeping.

1. Tendency To Lessen Records

We shall, however, describe the principal books used in a bank. It may be remarked that even in this regard some banks use far more books than others. The tendency.clearly is to cut down the records of banking transactions to narrower limits. Yet every bank uses ledgers in which are recorded all of its business. First of all is the recording of the business of the bank with every depositor. The first record, as we have seen, is the deposit ticket. Many banks post directly from these tickets into ledgers. When money is drawn out, the depositor usually gives a check, though it may be paid out in discharging his note, But in either event there is a written record for the payment, which serves as the basis of the posting of the other side of the account.

2. Ledgers

The recording of these transactions of a bank with its customers forms by far the Larger part of its bookkeeping, In a small bank a single ledger may suffice for several months, perhaps; in a very large bank it is needful to use several ledgers at the same time, and the methods of dividing the record depend on the amount and character of the bank's business. A very common method is to divide the accounts alphabetically, all names, for example, from A to D in one ledger, all 2'3 from E to H in another, and so on. Some banks divide their accounts into those of individuals and of associations or corporations; other banks, having numerous out-of-town accounts, make the first general division into country and city accounts, and then subdivide each of these divisions.

3. Boston Method

It would seem that the method in vogue fifty years ago of ledgerizing accounts was quite simple, but man is constantly seeking how to discover shorter ways of doing things. Out of this feeling has sprung a very considerable change in the methods of ledgerizing. One of the best known of these is called the Boston method, because it is the invention of a Boston cashier, and is perhaps sixty years old or more.

By this method, instead of giving each depositor a page of the ledger, the accounts of several depositors were recorded after each other on the same page in alphabetical order throwing the debit and credit column to the right and carrying the balances down in red ink in, the credit column, in the same manner as under the old system. By this system the ruled cross lines made when balancing were no longer needed. The balances were copied every day into the Daily Balance Book.

To this form some bookkeeper added two balance columns - a credit balance column and a debit balance column, which were placed side by side with the credit and debit columns. Some other bookkeeper conceived the idea of doing away with the debit balance column and recording an occasional overdraft in the credit balance column in red ink. This form of ledger is still used in many banks.

Fifty years ago a still wider departure was made by Mr. Lane, a bookkeeper in a Boston bank. He prepared a form with a wider page which would accommodate three days' work on each. Some one then suggested the adding of the balance column to the form between the rulings of the several days. This was done, and the Daily Balance Book went out of existence.

Then came another change. Instead of preserving the old terms, debit, credit, and balance, the columns were given their true names, deposits, checks, balances. The next improvement was adding the checks in a detail column, and the credits for deposits and debits for checks were made direct from the deposit slips and checks respectively. Thus the Deposit Journal was discarded and the Ledger Balance Book and Journal were combined.

With experience this form was changed and three more columns were added to the opposite page, whereby six days' business could be recorded with one writing of the depositors' names. Later, another bookkeeper conceived the idea of saving more time by narrowing the next leaf on the left-hand side so that the names could be used in connection with it without rewriting them. At first only one short leaf was used; now ledgers are sometimes made with as many as twelve short leaves.

Another change has been made in the printing of the names of depositors; this is done by the larger banks, so that little remains to be done except to enter figures and state balances. But in the smaller banks the names are still written.