The person who places money - or titles to money - securities, or anything of value, in the safe-keeping of a bank, other corporation, or individual, makes a "deposit," and in the act of so doing he "deposits."
Some essential points regarding making deposits in a bank or trust company should be referred to. In the first place, in sending by mail, write a full description of the checks, etc., enclosed; that is, the amount of each and the banks upon which they are drawn, and, if money is sent, describe it in detail. Keep a copy of the letter.
If a deposit is made directly at the institution, a deposit slip or ticket may be obtained, and the blanks should be filled out giving the same general information as suggested above. In the case of a deposit of coupons, envelopes to contain them to their depositors, "call loans " on collateral security are as available as quick assets as what is termed " commercial paper." The banker or broker depends very much upon the sale of the security behind his loan for the ultimate payment of the same, and in times of great financial distress it may be very difficult to realize on anything but the very highest grade stocks and bonds, and not always upon them. An instance pertinent to this question arose during the financial troubles of '93. A national bank suddenly called upon a banker for the repayment of a large " call loan " which he had been carrying with the institution. He confessed his utter inability to pay it. The cashier threatened him with the sale of his collateral if payment were not immediately forthcoming, to which the banker very honestly made the following reply: " Very good, I shall be delighted to have you effect the sale of the same, and will gladly pay you a commission for so doing. I have been using every effort to sell the securities myself for a week without success." The banker truly represented the conditions at the time, and it is needless to say that no further pressure was brought upon him for the repayment of his loan. The bank was obliged to obtain money from other sources.
Will usually be furnished by the bank, with printed blanks upon the outside to be filled in by the depositor, and the amount as shown by the envelopes entered upon the deposit ticket.
A word in regard to indorsing checks for deposit. The simplest form to follow is: "Pay to the order of the Ninth National Bank of Portland" (for example) and then the depositor signing his name immediately below. (For further information upon this subject see "Indorse " and " How to Open a Savings Bank Account.")
This subject needs no further treatment, except to remind those carrying a deposit "subject to check " that they are prone to consider all checks and other items which they may deposit in their bank as cash, and proceed at once to check against them. As a matter of fact, although banks make a habit of crediting checks at once to the depositor, they may not themselves get the benefit of the money for some days, and, to that extent, the depositor obtains previous use of the money. Suppose, however, some of these checks or other items which may have been immediately credited to his account are uncollectable by the bank. They will be returned and charged against the depositor's account; and so it is a thing to bear in mind on the part of those who may be checking their accounts down to the low point, that occasionally some check, etc., may be returned unpaid, and an " overdraft " possibly result.