Guards Against Fraud

There are two other principal means of protection against this class of fraud. One is the bank's custom of shifting its officers from one post to another; the other is inspection of the branch. Any day there may come word for the teller to proceed to another branch. The orders being from the general manager, and, perhaps, designed as a check on this particular teller, he has no choice but to go; and, with a new man in the box who knows nothing of what has been done, the whole edifice of fraud tumbles down as soon as the owners of the accounts that have been tampered with begin to transact business with him.

Then, at the inspection of the branch, which may happen at any time, the inspector may take the deposit and savings bank ledgers and mail to every depositor a letter-card showing the amount of his balance, as shown by the bank's books on the date of the inspection, and requesting him, in the event of any difference being discovered, to correspond directly with the inspector at the head office - the request being printed in large letters and heavily underlined. The inspector is particular to mail these cards with his own hands after personally checking off the names and amounts with the ledger. There is every probability that the despatch of these notices will discover any important frauds. They would not, however, reach depositors whose whole deposits had been taken by the teller, and whose names, therefore, would not figure in the bank's ledgers at all.

It is the banks and not the depositors who lose in these cases; for they invariably make good to the depositors the sums taken, on their being satisfied that the deposits were actually made. They do this partly as a matter of policy - to dispute their liability would make depositors generally feel somewhat insecure; and partly because they would have trouble getting out of the liability even if they wished to do so. Any depositor who could prove that he paid in his deposit to the officer appointed by the bank for receiving deposits could probably establish his claim. The law would likely hold that it was no concern of his what the bank officer did with the money after receiving it.

Ledger-Keeper Must Initial Books

Needless to say the best tellers are very careful to adhere strictly to the rules in the matter of entering and initialling deposits in customers' pass books. There is hardly the same objection to the teller's entering and initialling the pass books of other banks, since the other banks' balances are checked up closely every day, and it would not be easy to conceal fraudulent entries. But with regard to the general deposits, the best plan is for the teller to keep clear of the pass books, and to insist, all the time, on his depositors having their deposits properly entered and initalled by the ledger-keeper, or on their taking some acknowledgment or receipt from an officer other than himself.

Paying Cheques

Of the payments made by the teller the most numerous will be those called for by cheques on current account. The bank's regular customers have almost every day payments to make locally, and the most convenient way to make the greater part of them is by cheque on the bank. Those which are given to customers of other banks, and those which come into the hands of customers of other banks, will reach the bank mostly through the bank deposits, which have already been described. But there will be a large proportion presented at the counter for cash. These may be drawn for various purposes. They may be for wages or for services performed; they may represent settlement for live stock, produce, or other goods purchased; they may represent investments of money in securities, in personal or real property, or the withdrawal of money from those investments; they may represent the payment of dividends, profits, or other distributions.

Whatever they represent, the teller has three parties to consider in every transaction in them. He must consider the bank. It is to be saved from risk or loss; and it has a right to expect him to so conduct the operation as to give it the maximum of benefit. He must consider the drawer of the cheque - the payment in prospect, when a cheque is presented, is one the bank is about to make on the instructions and on behalf of its customer. So the teller has to keep his interests in mind. Lastly, he must consider the payee, who holds the bank's obligation, and will expect to have his con-venience respected.