MODERN BANKING METHODS AND PRACTICAL BANK BOOKKEEPING BY ALBERT R. BARRETT, C.P.A. FORMERLY BANK EXPERT FOR UNITED STATES TREASURY DEPARTMENT AND BANK ILLUSTRATED WITH OVER TWO HUNDRED FORMS OF BANK BOOKS, RECORDS AND BLANKS NEW YORK BRADFORD RHODES & COMPANY 1902 69427 2 Mar 1903 HN •B27 PREFACE This book is the result of many years' experience as a banker, a bank examiner, and a public accountant, and is presented to the banking fraternity in the hope that it may be of some service. Many courtesies have been extended to me by the office of the Comptroller of the Currency and by various banks and clearinghouses, among which I will mention: The Fourth Street National Bank, Philadelphia; Bankers National Bank, Chicago; Chase National Bank and Mercantile National Bank, New York; Northwestern National Bank, Minneapolis; First National Bank, Birmingham, Ala.; First National Bank and the Traders' National Bank, Scranton, Pa., and the clearing-houses of New York, Boston, Philadelphia, Chicago, Minneapolis and Scranton, Pa. I am grateful for the aid thus received. A. R. BARRETT. MODERN BANKING METHODS CHAPTER I. ORGANIZING A BANK. The first thing to be decided in starting a bank is whether the bank is needed. This is no doubt a trite observation; and yet many mistakes are made by starting banks where they are not needed. Usually the mistake is not in selecting a town where the business is too small to support a bank, but in establishing another bank where such facilities are already adequate. Over-competition has practically destroyed banking profits in many localities. Therefore, before starting a bank, be sure that it is needed. Having become satisfied, after diligent investigation, that the business of a particular locality requires a new bank, the next question of importance for the mover of the enterprise is to select the men whom it is desirable to interest in the organization. Naturally, the men who have capital will be the first to suggest themselves; but it is well not to lose sight of the fact that character is also a most desirable constituent of those who are starting a bank. Some men bear such high reputations that they are known to be incapable of associating themselves with anything unworthy of public support. Such men will add strength to a bank, though their moneyed capital may not be large. When enough good men can be interested-say ten or twelvea preliminary meeting should be called and a spokesman selected to explain the reasons for launching the bank, its prospects for success and who are expected to take stock. The importance of starting right suggests the propriety of having a legal adviser, so that all laws relating to incorporation may be fulfilled. One of the first questions to arise is, shall the bank be organized under the State or the National banking laws; in other words, shall it be a State bank or a National bank? A careful examination of both the State and National banking laws will show that while there is much similarity in the powers granted by both, it is evident that |