How The Branches Are Watched

In the department the records of all inspection reports are kept so that they can be quickly and easily referred to; also, the clerks follow up and investigate the discrepancies, etc., that come to light through the sending out from the branches of notices regarding depositors' balances, securities, etc. For example, a depositor writes, stating that his balance at such and such a branch should be $1,310 instead of $1,110, as stated on the inspection notice. That case would be referred at once to the chief inspector. It might signify that the teller at that branch had stolen $200 of the depositor's money; and again, the depositor may have made a mistake in calculating his balance. Every such case is thoroughly investigated at once. The chief inspector decides whether an explanation is to be asked by letter from the branch manager, or whether an inspector is to be sent to the branch to make a closer investigation. Then all the branch returns are studied carefully in some department of the head office. Anything in them that seems queer or irregular is made the subject of investigation. If it is not important enough to warrant the sending of an inspector to the branch forthwith, or the despatch of a letter demanding explanations from the branch manager, a memo may be made so that the inspector will look into it on the occasion of his next visit there.

It may be said that the inspectors' department, and the other head office departments also for that matter, suspect and challenge more or less all the statements and returns sent in by the branches. When they are being examined the possibility that they contain untruths or misstatements of fact is never lost sight of. The function of the inspector's department is to detect falseness and fraud wherever they lurk, and at the same time to prevent wrongdoing by making it apparent to the men that it will be promptly discovered and punished.

The Chief Accountant's Department

It is in the chief accountant's department that all the balance sheets and accounts sent in by the branches are combined so as to show the position and profits of the bank as a whole. The general ledger is a condensed representation of the whole business of the bank. The balance of the capital, of the rest, profit and loss, and of other funds belonging to the stockholders or proprietors, will appear in its pages. With regard to a number of the books - the general ledger being one of them - they are not open to the curiosity of the staff. The chief accountant himself, or a trusted officer designated by him, makes the entries, does the balancing and other work connected therewith. The books themselves are either provided with lock and key, securing the covers, or else kept in locked compartments; and none are allowed to examine them. There is a very good reason for this. Though all the employees of the bank are under strict obligation to maintain the closest secrecy about the affairs of the bank and of its customers, it is impossible for all of them to observe the stipulation to the letter. Bank clerks have their special friends and associates, some of whom will belong to other banks, and the temptation to discuss important events that have happened is sometimes irresistible.

Of course, when this is done there is no intention on the part of the men engaged in the discussion to reveal important secrets, or anything that could be used against their respective banks. But sometimes, through slips of the tongue or inadvertence, important information will come out, and perhaps be made use of by a competitor. So the safest plan is not to let the rank and file of the employees know too much. If the secrets of the chief accountant's department were not closely kept there would be danger of advance information as to profits, appropriations for losses, and other things leaking out in a manner to permit stock exchange speculators to engineer booms in the stock or to depress it unduly. The banks are all very particular in their desire to have these things kept close till the proper time for announcing them comes round. The idea in this is to prevent anyone's securing an unfair or undue advantage in buying or selling the stock.

And in reference to the keeping of the head office books it would undoubtedly be objectionable to any bank to have its particular methods revealed. So, in dealing with the chief accountant's department, the author will merely essay to describe the working of the circulation, the transfer of the profits from branches to head office, appropriations for losses, for reserves of one kind and another, distribution of dividends, and recording of stock holdings.