Certification

In guarding the bank's interests the first thing is to be satisfied that the cheque is good. Is the drawer's signature genuine? Has he sufficient funds at his credit? These are matters for the ledger-keeper to pass on. He has, in his ledger, the record of the customer's balance. He also has the custody of the specimen signatures. Theoretically, all cheques should be presented to the ledger-keeper for certification before being presented to the teller for cash. In large offices the paying teller will hardly look at a cheque till it has been been duly certified by the ledger-keeper. Business could scarcely be conducted in the cities in any other way.

But in the small offices the rule is not so rigidly insisted upon. In them, the tellers quickly get thoroughly familiar with the state of the customers' balances and with the signatures as well. There is doubt only about some few weak or inactive accounts. The teller is able to pass instantly, without the ledger-keeper's aid, on most of the cheques presented. In performing his duties he in time becomes almost as conversant as the ledger-keeper about these matters, even in the larger offices; and he is expected to use this knowledge as a check upon the ledger-keeper. That officer might be deceived by a false signature, or he might attempt to defraud the bank by certifying worthless cheques. In either case a wideawake teller might be able to check him. So, the good men do not accept blindly everything certified by the ledger-keeper. Mentally, and almost unconsciously, they check him up in a great many transactions.

The Question Of Identification

The cheque being pronounced "good," the next thing is to get for the bank a proper discharge or release for the payment it is about to make. If the cheque is payable to bearer, an effective discharge is obtained through the mere getting possession of the document by paying it. If it is payable to order, the payee's signature is required on the back. Furthermore, the signature on the back must really be that of the person named in the body of the cheque. This brings up the question of identification, which has, perhaps, furnished food for argument among bank officers more than any other subject. The differences of opinion and the difficulty in settling the question arise as follows:Every day quite a number of cheques payable to order are presented by strangers. When one of them hands in his cheque to the teller, his first question is: "Are you So-and-So" (naming the party mentioned in the cheque)? The stranger replies in the affirmative. The teller then asks: "Are you known to anyone in the office?" The stranger says, "No." What is to be done? If it is a cheque of $5 or $10 there is not much difficulty about it. The man's word can be taken, as hardly anybody would commit a penitentiary offence for the sake of that much. But if the amount is near $100 or $200, the question is not so easy. If the teller cashes one of these cheques without identification he does so at his own risk.

In case of his accepting a forged endorsement he will probably have to make good the amount of the cheque out of his own pocket to the rightful owner. "But," some people will say, "why not insist on identification in every case?" The answer is, that to do so would cause friction and loss of time all through the day. A great many of the payees of cheques do not understand the necessity for identification. When they are tola that identification is required they are apt to take it as an affront, or they think the teller is officious and putting them to needless trouble. The strict enforcement of the rule, which is quite right and proper for the bank's protection, results in endless wrangling and ill-feeling, which disposes some tellers, and managers, too, to take a little more risk in the matter of identifications.

So long as the law makes the banks responsible for paying "order" cheques to the right parties it is hard to see how they can avoid making strangers get identified. It would seem equitable if the banks generally gave their tellers to understand that they (the banks) would accept any loss from waiving identification on small cheques - the tellers to be held responsible for everything over an agreed upon maximum. With regard to the larger cheques the friction is lessened when the teller studies to phrase his demands so as to give the minimum of offence, and to retain, if possible, the payee's good-will.