or thousands of miles away. Somebody may pay with a check on a savings bank with the pass book attached. There may be in its possession a bond and some interest coupons that are almost due. In the course of the day it may draw sight or time drafts on other concerns in all parts of the world. The bank relieves this house of all trouble in getting the time drafts accepted and in collecting any of the other paper. For record a list is made, a receipt is taken, and the bank does the work. Some of the items are treated as cash, and some are taken for collection to be credited after payment, of which notice is always given. Collection costs the bank clerk hire, space, equipment, postage, perhaps loss of interest, and often a commission for each item, which the bank where it is payable deducts from its face. Member banks of the Federal reserve system are now obliged to pay at par checks drawn upon them, but the Federal reserve bank does not allow the bank for whom it collects checks to count them as reserve until they are collected, the further away the bank the greater the loss of interest. The Chicago Clearing House rules provide that charges made by Chicago banks for checks on Cook County (Illinois), Boston, New York, Philadelphia, and St. Louis banks shall be discretionary; for other items the charges are, on items of $50 or under a minimum charge of 5 cents per item, on items over $50 a minimum charge of three cents per item plus 12 cents to $1.00 a thousand depending on the location of the banks. The bank may, or may not, collect checks free, but it is necessary to charge a small fee for other items. This varies with the cost to the bank from 1% to 1% commission. On domestic items the usual fee is 1%, but no item for less than 10 or 15 cents. On large items a lower rate is obtained. These fees are usually charged only upon the items paid, but some banks have been burdened with so 40 NECESSITY OF PROPER INTRODUCTION 59 many worthless drafts, that a charge is made for every item unless a fair proportion of the collections is successful. Banks may require the fee in advance especially if their instructions are to place the paper, if unpaid, in the hands of an attorney. A state bank reports that it requires a fee of 10 cents or 15 cents before presenting a draft. If this small fee is sent the bank tries to collect the draft and charges its usual rates for exchange when it remits a New York draft in payment. This bank does not charge any exchange on checks of five dollars or less, but charges % except on large checks when the rate is 75 cents on the thousand (see 73-76). Below is the full schedule of charges governing the collection of out-of-town items as prescribed by the Chicago Clearing House Association. These charges are applicable only to checks deposited as cash over the counter. 54. Necessity of a proper introduction. The relation of banker to customer is one of mutual confidence. Each should know the other, otherwise an introduction should THE NATIONAL TRADERS BANK COLUMBUS, OHIO This will Introduce M Whose signature you will find below Signature of Person Introduced Introduction card used by some banks when a customer goes to another city. be made by some one who is well acquainted with both. The customer wants a bank of strength, integrity, and helpfulness. The bank wants a customer of capacity and character. The customer runs a risk if the bank is unsafe; the bank is endangered if the customer is dishonest, or crafty. He might impose on the bank's confidence by overdrawing and cashing or getting credit for bogus checks, or raised drafts. In May, 1913, a man raised a check paySCHEDULE OF CHARGES ON OUT-OF-TOWN ITEMS In effect on and after August 3 1916 On items of $50.00 or under. a minimum charge of 5 cents per item. On items over $50.00 on the following cities, a minimum charge of 3 cents per item, plus 122 cents per thou sand dollars: Cincinnati, O. Cleveland, 0. Detroit, Mich. Kansas City, Mo. On items over $50.00 on the following states and cities, a minimum charge of 3 cents per item, plus 25 cents per thousand dollars: +Illinois(Except Chicago) Buffalo, N. Y. New Orleans, La. Omaha, Neb. Pittsburgh, Pa. Richmond, Va. Minneapolis, Minn. St. Paul, Minn. On items over $50.00 on the following cities a minimum charge of 3 cents per item, plus 371⁄2 cents per thousand dollars: El Paso, Tex. Helena, Mont. Houston, Tex. Jacksonville, Fla. On items over $50.00 on the following states and cities, a minimum charge of 3 cents per item, plus 50 cents per OPENING A CHECKING ACCOUNT On items over $50.00 on the following states a minimum charge of 3 cents per item, plus 75 cents per thousand On items over $50.00 on the following states and cities, a minimum charge of 3 cents per item, plus $1.00 per thousand dollars: On the following cities the charges are discretionary: † Also Discretionary: New York, N. Y, Philadelphia, Pa. †Cook County outlying banks as shown on reverse side of this card. Charges on items drawn on or by, or deposited by the United States Gove [ernment, State of Illinois, County of Cook, City of Chicago or the Board of Education of the City of Chicago. Chicago, Ill., March 1, 1921 61 able to him from $8.12 to $1800.12 and had it certified at the bank on which it was drawn. He then opened an account with the Corn Exchange Bank, deposited the raised check and was duly credited. Before the fraud was detected he drew out the entire amount. The loss fell on the Corn Exchange Bank. It is a common practice, especially with banks, to introduce a person by sending a card upon which the bearer's signature is certified. 55. Opening a checking account. The account is opened at the window of "new accounts," "receiving teller," or "teller," depending upon the size and practice of the bank. The customer agrees, if required, to the rules of the bank as to minimum balances, fills out a card upon which are spaces for address, business, by whom introduced, and check signature. All checks must be signed in the same 5 157 N. Y. Supp. 316. Briefed in Bankers Magazine, June 1916, p. 729. manner as this card. The responsible tellers and bookkeepers compare the signatures on the checks with this on the signature card to test genuineness, and soon know the customer's signature as well as or a good deal better than they know his face. If the account is not payable except upon a joint order, each person who is to join in drawing We hereby certify that the will sign signatures written above are the duly authorized signatures of the members of this Firm, and that if more than one signature is required, chocks or vouchers will be signed by Doing business as any change in signatures or instructions will necessitate the filing of a new card Signature card of partnership |