All cash items are drawn in dollars, at sight, without docu ments, items not so drawn being handled as collection or discount items.
Early in the morning checkers check the cash items on the remittance letters; that is, they designate after each item the drawee; for clearing house items the clearing house number of the drawee is used, and for the others some abbreviated designa tions. The cash items are then sorted into the five classes above mentioned. The totals of these five groups of items are proved in batches, as convenience warrants, against the total amounts of the cash letters. The items are finally disposed of as follows: The items against the bank itself are sent to the check desk of the domestic division, as are also the clearing house and treasury items; the large sights are sent to the city collection department, and the small ones to the foreign tellers' department.
The foreign bookkeeper's department uses the remittance letters as credit tickets and posts the totals of cash items directly to its ledgers. The letters are then given to a typist, who pre pares the proper credit advices. If the transaction is a straight credit, an advice is sent to the remitter only; but if it is a cross credit, both the remitter and the beneficiary are advised hat funds have been placed at the disposal of the designated beneficiary.
Cash items are credited to the account on the day they are received by the bank. This is an advantage to the beneficiary, for if they were taken on a collection basis credit would be delayed until proceeds were realized.
Items are often returned unpaid through the city collection department, which has charged the foreign collection department with the face amount. The foreign collection department then debits the account formerly credited and recovers the relating credit advice before it is mailed. If any of the unpaid items warrant it the department, unless otherwise instructed by the remitter, has them protested. Items returned, whether protested or not, are held in a return box a week or ten days before they are returned to the remitter. This delay gives the drawee time to communicate with the drawer and possibly to arrive at an agree ment to honor the draft before it is returned. In the case of both
cash and collection items for, say, $5oo or over, which have not been accepted or paid, the department cables advice to the re mitter unless specifically instructed to the contrary. This ad vice enables the remitter immediately to protect his interests if the refusal to pay or accept be inimical thereto.
The Handling of Collection Items Collection items consist of the following: 1. Items drawn in foreign currencies.
2. Checks payable anywhere in the United States and Canada.
3. Items drawn at more than sight, ranging from one day up to, say, six months from sight or date, as the case may be.
4. Items received without a draft, that is, bills of lading, insurance policies, and other negotiable documents received with a request to surrender them to a named party upon payment of a stipulated sum of money.
5. Drafts with documents attached.
The mail checkers ring these items on the remittance letter if they are listed with the cash items; but if listed on a separate letter, the items are kept with that letter. Each item is stamped with a collection number after its notation in the collection register. In this register data about the draft or document are entered in columns which record: their number, our number, the remitter and his address, the beneficiary and his address, the instructions, amounts, tenor, date of acceptance, date of ma turity, documents attached, place where payable, and fate. The beneficiary may or may not have an account with the bank; in the latter case he is paid either by draft or cable transfer, according to the instructions.
After the item is entered in the collection register, entry is made in the drawees' book, which gives the following information: the name of the drawee, the date of receipt, the amount, docu ments attached, the number, and the tenor. If the draft is drawn in a foreign currency, it is converted into dollars at the rate specified by the traders. The accuracy of this conversion is carefully checked. Should the drawee be dissatisfied with the conversion rate used by the department, he may buy a prime banker's check on London in the market and tender this in payment.