Verification Of Remitted Bills

These remitted bills are to be verified. Clerks are set to work to make out verification slips. One of these slips is headed up for each correspondent, and on it are recorded the particulars of all bills which the branch books show to be held by that correspondent. Each slip is added. A summary list is made of the totals shown by each slip. The addition of this summary should give the total of the remitted bills.

When the verification slips are completed and balanced, the inspector takes them and checks off each item on them with the items on the bills' discounted sheets. Then he sees that the slips are mailed to the respective correspondents, whose names they bear, arranging the procedure so that additions or alterations cannot be made after he has checked them, without his knowledge. The envelopes are closed directly under his eye, and he himself, or his assistant, mails them. Each slip is headed up with the announcement that it purports to be a list of bills held by the correspondent on account of the branch unpaid on the evening of the certain date on which the inspection commenced. The correspondent is asked to check the list over, and, if correct, to verify it and send it to the inspector's department at the head office; if the list is incorrect, the correspondent is expected to notify, not the branch, but the inspector's department.

When, for every item on his sheets, the inspector has either seen the bill itself or seen its particulars entered on a verification slip and the slip despatched to the correspondent said to hold the bill, the correctness of loans and discounts as entered on the balance sheet is considered to be established, as far as can be.

Of Collections, Collaterals and Securities.

In exactly the same way, the collateral notes and the collection bills are listed and examined. All the warehouse receipts, stock certificates, bonds, debentures, hypothecations, etc., are examined in detail. The inspector demands to see everything; and he does not pass anything till he satisfies himself that it is exactly as represented on the books, that it is formal and legally proper in every respect, and that the bank has a clear title where it should have one. If names on notes are signed by power of attorney or procuration, he requires to see the documents by which the powers have been delegated.

Of The Deposit Ledger

The inspection of the deposits also is done with great care and thoroughness. The current account ledger is taken first. The ledger-keeper has first to balance it, then to make out a complete list, on forms furnished by the inspector, of the individual balances-debit and credit-making up the total. The total, of course has to agree with what the balance sheet shows as held by the branch in the current account ledger. Formerly it was the custom in practically all of the banks for the inspector to send a notice to each depositor showing the amount at his credit in the bank's books. On the ledger-keeper's completing his list of balances, he was given a quantity of printed letter cards, headed with the name of the bank and of the branch, and reading as follows:"The books of the bank show standing at your credit (or debit) in current account at this branch, on the evening of............the sum of............

"Should you not reply to this notice, it will be assumed that you find the amount correct. In the event of your discovering any difference or discrepancy you are requested to correspond direct with the Inspector's Department, ............ Bank, ............, Montreal (or Toronto)."

On all of these cards the date of the inspection was first stamped in, then one was addressed to each one of the names shown on the list, and the amount of the balance written in. This done, the ledger-keeper handed over the list of balances and the cards to the inspector. The inspector took the list, and with it before him went through the ledger, carefully checking every account for suspicious entries and untidy or inefficient work. He checked off each balance with the list. The checking of the ledger and the balances finished, he satisfied himself as to the additions of the list, and, if its total agreed with the amount shown on the balance sheet opposite current accounts, the correctness of the list was regarded as established. Then he took the letter cards and checked each one to see that the name and amount on it were exactly the same as given on the list. The cards were not allowed out of his sight or possession after being checked. A clerk was called to close them up ready for mailing, this being done under his eye. Then the inspector himself, or his assistant, took them to the post-office.