may come in the early morning mail and in the city banks it requires a large force of clerks to get these remittances ready for the clearing house.1

95. Discount clerk.—The chief duty of the discount clerk is to take charge of the loans and discounts of the bank after they have been negotiated by the proper officers. He keeps a record of the promissory notes and acceptances offered for discount in an Offering Book, and also of the disposition made of them. He records all notes discounted in a "discount register, " with the makers' names, and those of the indorsers, if any, the place of payment, the due date, the rate of discount and the amount of the loan. In many banks the offering book and the discount register are combined. The discount clerk also keeps a "tickler," a memorandum book divided into days of the month, in which the notes are recorded under their proper due dates. Great care should be taken in calculating the due date as a mistake of a single day may cause serious loss to the bank. The notes discounted are carefully filed in large wallets arranged in the order of due dates. When the day of payment arrives the notes are turned over to the note teller for collection with a proper exchange of memoranda. The discount clerk also has charge of all securities held to secure collateral loans unless the business is so large as to require a collateral loan clerk.

Collateral loans, that is, loans made upon the security of collateral, such as stocks, bonds, or warehouse receipts, constitute a large item in the business of some city banks, especially those having dealings with stock brokers.2 This type of loan requires daily and hourly watching, especially in times of active speculation. Notes given for collateral loans are generally single-name paper, and the bank's only actual security lies in the collateral. The value of the securities deposited may shift rapidly in an active stock market and the collateral clerk must see that the proper margin of security required by the bank is maintained. 1 See Chapter XIV.

2 See Chapter XVI.

The collaterals are constantly being withdrawn and others substituted, and these must be carefully scrutinized, assigned, receipted for, recorded and filed. In banks having a large business of this nature, the position of collateral clerk is a very responsible one.

96. Bookkeeping of the bank. Having described the principal departments of the bank's work, and having noted briefly the systems of record in each, we may now pass to a brief description of the general bookkeeping department, where the records of the various departments are gathered together and recorded.

The individual ledger is the principal book of record for this department. In it are kept the accounts with the bank's depositors showing the deposits, loans and collections on the one hand, and on the other the withdrawals by check. The individual or deposit ledger usually comprises several volumes in which the names of depositors are arranged alphabetically; volume one may contain the names of depositors from A to E, the next volume F to K, and so on. By this arrangement several bookkeepers can be kept at work at the same time.

The bulk of the credit items come, of course, from the receiving teller's department. After carefully listing on his scratcher the totals of the deposit tickets or slips presented by customers with their deposits during the day, the receiving teller sends the slips to the bookkeeping department where, frequently, they are entered on another. scratcher and then posted to the individual ledger. A comparison of the daily proof sheet and scratcher total of the receiving teller with the scratcher total of the bookkeeping department serves as an additional check in the work of bookkeeping.

Other items credited to the account of the depositor arise from the discounting of his notes and drafts. Credit slips covering such transactions are sent to the bookkeeping department by the discount clerk and the amounts are credited to the customer's account in the same way as in the case of items received from the receiving teller. The

proceeds of notes and drafts left by the customer for collection are treated in like manner. Some of the large banks, having many out-of-town customers, keep a separate ledger called the "foreign individual ledger" for these accounts. The debit items in the individual ledgers come from the paying teller's department in the form of checks. Where many checks against a customer's account are received throughout the day, they are usually listed on an adding machine as received by the bookkeeper from the paying teller and posted in the scratcher, from which the totals are carried to the individual ledger accounts.

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There are two types of individual ledger in common use the three-column or Cincinnati ledger and the Boston ledger. In the three-column ledger, the depositor's name is entered at the top of the page, which is divided into two sections, each having headings for the date, debit entries, credit entries and balance. The Boston ledger is arranged to show on a single page the postings for six days. The dates are entered at the top of the page, and the names of the depositors are placed, usually, in a middle section with space for three days' work to the left and to the right. The space for each day is ruled for checks, deposits and balance. The Boston ledger is advantageous where most of the accounts are active, that is, having frequent debit and credit entries, but it is wasteful of time and space in the case of accounts more or less inactive for balances must be extended daily irrespective of any change in the account. In the three-column ledger each account has a sheet of its own and need not be disturbed until a change occurs. Another advantage of the Boston ledger lies in the fact that the scratcher can be dispensed with by adding the items in the "Deposits" column and the column headed "Checks."

The other general books of the bank besides the deposit ledger are the cash book or journal and the general ledger. The size and needs of the bank will determine the particular form of cash book used. In the small bank an ordinary cash book with debit and credit sides may suffice.

The large bank may find it necessary to use two books, a credit journal and a debit journal. The debit items come from the following main sources: individual deposits credited from the receiving teller's department and from the discount register; interest and discount on notes discounted; bills discounted, collected by the note teller; va

rious banks, for remittances received and for collections made by our bank but not remitted; and collections and exchange on the foregoing collections. The credit entries are for individual deposits, debited from the paying teller; bills discounted as reported from the discount clerk; various banks for cash remittances sent to them and for collections made by them but not remitted; collection and exchange, representing deductions made by our correspondents for collecting items; and general expenses of the

bank including salaries of employees, rent, supplies, advertising, etc.1

The general ledger contains a condensed record of the business of the bank from day to day. It is kept by the general bookkeeper in such a way as to show each morning a summary of the previous day's transactions. From it can be drawn at any time a complete statement of the bank's condition showing the total resources and liabilities and their relations to each other. Thus the general ledger will carry such accounts as those relating to capital, surplus, undivided profits, individual deposits, bank deposits, United States Government deposits, cashier's checks, certified checks, circulation, interest and dividends on securities owned. Accounts on the other side of the ledger will include bills discounted, demand loans, time loans, cash, real estate, United States bonds, bonds and securities. The general ledger deals mainly, then, with aggregates which are derived from original entries in the various departments and here summarized in total debits, credits and balances. The profit and loss account, into which is gathered the final balances showing gains and losses from different sources, is usually closed only at the end of the year, half-year or quarter, but it is so kept as to admit of a statement of profit and loss at any time.

Some banks keep a "general balance ledger" which summarizes the aggregate debits, credits and balances of the various accounts in the general ledger. Generally this ledger is kept by some clerk other than the general bookkeeper and so serves as a check and a "proof" upon the latter's work. Again, some banks keep a daily statement book in which aggregate resources and liabilities are still further summarized, thus enabling the officers to see the condition of the various accounts which may serve as a guide in making loans and in other important transactions. This book furnishes the material for making up the periodic reports of condition required by the Comptroller of 1 Moxey: Practical Banking, p. 290.