Important Facts about Checks

A check may be signed either with pencil or ink.
Checks made out on Sunday are good.

A paid check becomes a receipt.

A check is either all good or else not good at all. Partial payment cannot be made.

If a check is indorsed in blank or made payable to bearer and is lost, it can be collected by any one.

Checks are not good for more than one's balance in the bank.

Payment of a check may be stopped by notifying the bank on which it is drawn.

Writing Checks

If possible, secure blank check forms from a local bank. If you cannot do this conveniently, cut pieces of paper about the size of ordinary checks and follow the form shown on page 107.

1. Using the name of a local bank, make out a check for $7.50, payable to Arthur Roberts.

2. Make out another check for $8.75, payable to William Johnson.

3. Make out a check for $10.20, payable to some store in your town or city.

4. Make out a check for $1.25, payable to one of your classmates, and ask him to indorse it properly.

5. Make out a check for $2.80, payable to one of your classmates, and ask him to indorse it, making it payable to Raymond Hartley.

6. Mr. James T. Shannon has an account in the Merchants National Bank of Rochester, N. Y. He pays a

bill of $51.85 to Wheeler and Johnson. Make out the check.

7. Mr. Walter F. Thompson has a checking account in the Commercial National Bank of Jackson, Miss. He pays a bill of $17.90 to Marshall and Peters by check. out the check.

Make

8. Mr. George S. Sherman has a checking account in the First National Bank of Harrisburg, Pa. He sends a check for $16 to Henry M. Travers, who indorses it and makes it payable to William F. Johnson. Make out the check.

Keeping a Checking Account

By stubs or other devices, checkbooks usually provide means of keeping checking accounts. Some books have a record page after every three checks. Here is a sample record page.

At certain times or upon request banks issue a statement of each depositor's account and return to him all the checks they have paid.

He should compare his own account with the bank statement and make any necessary corrections. The paid checks should be kept as receipts.

Find the balances of these checking accounts.

1. March: Brought forward: $73.28. Deposits: $15.00, $9.00. Checks: $4.60, $11.15, $14.76.

2. June: Brought forward: $151.16. Deposit: $85.00. Checks $8.15, $60.00, $19.30, $23.08.

Deposits: $7.00,

3. January: Brought forward: $80.09. $5.00. Checks: $1.25, $2.30, $6.75, $8.90, $4.12.

4. Brought forward: $216.70. Deposits: $81.75, $16.90, $138.40. Checks: $5.80, $76.45, $115.25, $42.16, $12.55.

5. Brought forward: $653.41. Deposits: $80.00, $91.75, $116.50, $72.60. Checks: $115.00, $56.70, $18.30, $38.10, $270.08.

6. Brought forward: $176.93. Deposits: $75.00. Checks: $10.18, $25.00, $6.15, $17.28, $1.50, $8.35.

7. Brought forward: $1,062.28. Deposits: $276.81, $301.14, $195.30, $256.70. Checks: $375, $51.35, $129.50, $74.80, $15.43, $429.78.

Deposits: $10.36,

8. Brought forward: $588.66. $114.50, $39.49, $67.65, $110.30, $92.17. Checks: $108.30, $74.20, $15.07, $264.28, $9.96, $58.19.

DRAFTS

Bank Drafts

For sending money to distant places where personal checks might be questioned or delayed in payment, bank drafts are often used. A bank draft is a check made out by a bank and signed by its cashier. Nearly all banks keep checking accounts in some New York or Chicago bank. When a bank draft is made payable at a New York bank, it is called a "draft on New York." If it is made payable at a Chicago bank, it is called a "draft on Chicago."

We will suppose that Charles M. Green of Richmond, Va., wishes to send $125 to Herbert R. Dudley of Newark, N. J., by bank draft.

He goes to the Jefferson National Bank and purchases a bank draft for $125, like the one below.

Instead of getting a bank draft made out to himself, Mr. Green may have a draft made out directly to Herbert R. Dudley. In that case Mr. Green does not need to indorse it.

1. Using the name of some local or near-by bank, make out a bank draft on the National City Bank of New York, for $85, payable to Karl R. Shepard.

2. Make out a bank draft for $150 on the State Bank of Chicago, payable to Richard S. Chase.

3. Make out a bank draft for $250 on the American Exchange National Bank of New York, payable to Daniel F. Mason and indorsed by him and made payable to Henry K. Bidwell.

4. Richard T. Crandall secured from the Lincoln National Bank of Milwaukee, Wis., a bank draft of $175, payable to John H. Smith at the First National Bank of Chicago. Make the draft, signing your own name as cashier.

5. Chester T. Hudson secured from the First National Bank of Wilmington, Del., a bank draft of $140.50, payable to John Wanamaker & Co., of New York City. Make out the draft, signing your own name as cashier.

Commercial Drafts

A commercial draft is a written order to one person to pay to another person or to a bank a certain sum of money at a definite time.

The amount of money stated on the draft is called the face of the draft.

Commercial drafts are of two kinds, those payable "at sight" and those payable at a certain time after sight or after a certain date.

The first are called sight drafts and the others are called time drafts.

We will suppose that Alfred R. Lane of Des Moines, Iowa, wishes to collect $75 from Curtis R. Sheldon of Cedar Rapids, who owes him that amount. He sends to Mr. Sheldon a sight draft like that at the top of the next page.

If Mr. Sheldon accepts the draft, he writes "Accepted" across it, dates and signs it, and sends it back to Mr. Lane, who can deposit it in his bank for collection or can use it like any other promissory note.