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CHECK WRITING

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61. Check writing. The drawing of checks requires extreme care. The words and figures must agree, else the words govern the amount to be paid. Unless the drawer exercises due care to prevent fraud, he cannot hold the bank responsible for resulting errors in paying his orders. He must not write his check for five dollars, so that the amount can be changed to five hundred dollars without showing some signs of alteration. He cannot sign a check blank as to the amount of money to be paid, and deliver it to another person, without himself being responsible, if that person writes it for a larger amount than intended. If the writer uses due care, the risk of forgery and alteration is on the bank. In case of error an entirely new check should be written. A risk borne by the depositor is that an alteration may be so clever he would have difficulty either in proving the alteration or in showing that the bank was to blame. Banks as a precaution are more and more issuing check blanks printed on safety paper, which will show any alteration. While the drawer may not be liable, every bank customer should do all he can to protect his bank, as well as himself, and it has become customary to use perforating machines to denote the amount of the check. Check-writing machines go further and produce every word and figure necessary to complete a check with the exception of the signature. W. H. Kniffin1 states that while "the raising of a check by a clever forger is easy, it can be made difficult, if not quite impossible, by these precautions:

(1) Use safety paper, good ink, and plenty of it. This reduces the chances considerably, though not entirely.

(2) Write the figures well up against the dollar sign. Make the figures strong, the '00/00' in such a way as to leave no room for other ciphers.

1 W. H. Kniffin, Jr., Practical Work of a Bank, p. 122. (Bankers' Publishing Co., New York, 1915.)

(3) Write the words in a heavy hand beginning well to the left and filling all spaces with a bold wavy line. (4) Use the best protecting device that can be found. (5) Issue no checks to strangers.

(6) Balance the book with the check book and prove the indorsements as soon as the vouchers are returned."

On account of the tremendous burden on the banks checks for small amounts should not be written. Many years ago the writer received a check for five cents from a public service commission. It was written to correct an error disclosed by an audit. The check has never been cashed, because the holder has not the nerve. Stamps would have been a convenient means of payment. However, if a business makes it a practice to pay almost everything by check, it may become necessary to draw a check for less than one dollar. Here is one form that has been suggested:

Only Seventy-five cents...

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62. Varieties of check forms. Many corporations have printed forms to tell the purpose for which the check was written. Such are "interest," "dividend," and "pay roll" checks.

If a thousand accounts a month are handled, the postage for mailing receipts amounts to $240 a year. The voucher check seeks to eliminate this waste for the other man and provide a uniform voucher for filing. In addition to being a check it contains a space for a copy of the invoice. Two forms should be used. For accounts of a few items a form with the space for the invoice on the front of the check is most convenient. To show a great many items a form that folds with the invoice on the inside is best. The check should be on the front and room for indorsements on the back to enable the bank to handle it without any necessity for unfolding. Some houses use a voucher which does not become a check until it is receipted. Then

VARIETIES OF CHECK FORMS

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it has to be indorsed. If the receipt is insisted upon, a large proportion of such checks have to be returned to obtain it. Vouchers are often separate from the check, both having the same number, and the check reading "for voucher No.-," but this method requires return mailing. Banks commonly pay all or part of the cost of special

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A voucher check. A record of what the payment is for appears on the left of the check.

forms. Unless the account of a customer is profitable, the customer will be charged for checks printed for him.

Individual credit is not sufficient for every trade. The seller may ask that one's check be certified. The paying teller, or the cashier, of a bank, does this (see 19), and the depositor's account is immediately charged, since the bank has assumed liability for its payment. If not used the check must be returned to obtain credit. The depositor may exchange his check for the bank's check. If the bank gives its check on itself it is called a "cashier's check," a "treasurer's check" (that of a trust company) or sometimes an "official check." If the bank issues its check on a bank in another city, it is known according to the name of the city, as "New York exchange," or a "New York draft." Some banks, as a precaution against

fraud, will not certify a small check. Either cash, or a cashier's check is given.

Checks written payable to the order of "cash," "currency," "pay roll," or any payee known to be fictitious, are payable to the bearer. As a matter of record, in case the check should be no good, a bank has the right to ask the bearer to indorse the check. It is preferable to draw checks to the order of the bank and mark them "for pay roll," "for interest," "for New York exchange," etc.

63. Check register and check stubs. The customer may keep a record of his deposits, checks, and balances, on the stubs of his check book, using the left hand of the stubs as a place to itemize his deposits, or to paste carbon copies of his deposit slips. Simpler than the stub entry for checks is the check register, because it combines the check stub with the cash-book, and one writing is eliminated. Besides columns for checking, the register shows the date of the check, the payee, the amount of the account, the discount, the number of the check, the amount of the check, the total of checks, and, if desired, the date of deposit, the amount of the deposit, and the bank balance. Some check registers have special columns into which the amount of the checks may be distributed according to the accounts which are to be debited.

64. Stale checks. A check is an order for the bank to pay at sight. The drawer expects the holder immediately to attempt collection either by going directly to the bank upon which it is drawn, or by negotiating it to another bank, or person. In practice checks are nearly always deposited as cash in one's own bank by the next day and collected by that bank through the clearing house, or through other banks. If the holder of the check keeps it, it grows old and is called a stale check." There are good reasons why a check should be collected at once. When written the depositor may have ample funds with

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