BANKING.

Putaruru Press, Volume IV, Issue 146, 19 August 1926, Page 4

BANKING.

INTERESTING ADDRESS. Before Chamber of Commerce. Mr. A. C. Thompson, manager of the Bank of New Zealand at Puta- ] ruru, gave an interesting address be- ! ; fore the Putaruru Chamber of Com- ! ' merce on matters apertaining to bank- < ing. Points of interest culled from the address are as follows: BANKER A DEALER. Originally a banker was a person with whom money was deposited for safe custody only. Nowadays a bank- ; er was recognised as a dealer whose ! special stock-in-trade was money and credit. Money paid into a bank was bought by the banker, and credit given in return. The same applied to bills j of exchange, promissory notes, which J special business was termed discounting. The granting of loans to carry on the business of the world was the principal source of profit of a bank. Money is deposited with a bank either in current account or on fixed deposit. The former might be drawn upon at any time, but the latter was for a fixed term and carried interest. Current accounts were for the con- I venience of business, and without these business could not be carried on owing to an insufficiency of money. | ACCOUNTS. | A person might have several accounts at a bank and if he did not say which account money was to be credited to, the banker could please himself on this question. A credit balance of a personal account could not be retained by a banker against a debit in a partnership account without signed authority. PARTNERSHIP. I Any person who by word or deed led others to believe he was a partner in a firm, or who knowingly allowed 1 such an assertion to be made openly, was liable on any contract entered into with the firm upon the security of his name, even though actually he I might not be a partner at all. A banker therefore in all cases endeavoured to obtain a written statement of the liability of every partner. The death or bankruptcy of a partner affected only his private account so far the banker was concerned. A retiring partner must inform the creditors of the firm of his withdrawal to escape liability. j JOINT ACCOUNTS. ■ If two or more persons, not being partners, opened an account in their joint names, on the death of one of them the balance belonged to the sur- . vivor. Proof of death, however, had jto be supplied. Sometimes the bank required a form to be signed before the account was operated upon as to the disposal of the balance in case of death. Unless special instructions were given, all persons in a joint aci count must sign cheques. This applied equally to an account in the I name of husband and wife. QUESTIONS. I The difference between a cheque ! crossed with two lines only, and one . marked “ not negotiable,” was that the latter was a distinct crossing and anyone handling such a cheque did so at their own risk. Neither cheque could be cashed over the counter. The signatures on cheques for a limited company was decided by special resolution of the company. J To cross a cheque with the words , “ account payee only ” was a distinct safeguard as the cheque could then only be paid into the account of the person or firm whose name appeared on the cheque. A cheque drawn to a number was purely for purposes of privacy by the firm drawing the cheque. | It was not necessary to write the | word “ order ” on a cheque after havj ing crossed out the word “ bearer.” j