In order to protect the bank the acknowledgment of receipt of the item for collection contains the following notice: Please read this advice carefully; if not correct notify us at once; always give our number when communicating with us in connection with this item. In connection with this collection, we will exercise care in the selection of responsible correspondents and sub-agents as in the course of our own business, but shall not be liable for any neglect or default of any correspondent or sub agent so selected or any loss of such paper Or its proceeds during transmission.
In the remittance letter are specified the bank's collection number, the amount, the city where the collection is drawn, whether the item is to be protested, the tenor, the documents attached, and any special instructions received from the client, such as " cable payment," "in case of need refer to ," etc.
The letters, with enclosures, are finally assembled and sent to the outgoing mail department; if coupons or bonds are en closed, they are sent to the registered mail department with instructions to cover by insurance. If time drafts are endosed, a return form postcard is included which the correspondent or branch is asked to fill out and mail when the draft is accepted.
The client's letter and the tickets are filed, the latter in special compartments, the credit tickets according to the beneficiary or client remitter and in consecutive order according to the bank's collection number, the debit tickets under the name of the coun try where payable and in numerical order. The acknowl edgments are sent to the mail department, to be forwarded to the remitter.
Record of the Items Between Transmission and Payment When an acknowledgment is received from the correspondent or branch, a clerk checks the number which has been given the item with the number on the bill register book, also the amount and the correspondent's name, and the acknowledgment is stamped with the date. The client is advised of all bills on which advice of acceptance is received from the correspondent or branch, and on this advice are entered the bank's collection number, the client's collection number, the amount of the item, the correspondent's name, where drawn, and the date of acceptance. In the bill register are entered the date of acceptance, the date of the bank's advice to the client, and the date of the advice received from the correspondent.
The tickler clerk keeps a diary, in which entries are made as of the approximate date when each transaction should be attended to. 'When that day arrives, the bill register is examined to see
whether the item has been paid or returned unpaid, or accepted or returned without acceptance, etc. If it has been duly executed, the item is crossed off the diary; but if no notation is found, the debit ticket in the files is examined to see whether any instruc tions have been given by the client to allow an extension of 'time, or whether any advice or refusal to pay or accept has been re ceived from the correspondent. If instructions are found to extend the time, say, 3o days, it is so extended on the diary. If no advice has been received, a tracer is sent to the correspondent and an advice to the client that no advice has been received and that a tracer is being sent.
Payment of the CoHectic% When payment advices are received from the correspondent or branch, the payment clerks extract the proper debit and credit tickets from the files and proceed to the proper distribution of the funds.
If the payments, according to the advice, are in dollars, the bank charges the account of the correspondent or branch with the amount designated; the clerks specify on the debit ticket the date of the advice of payment, the correspondent's collection number, and the value date. This information is required in order to enable the correspondent to reconcile its account when it receives later the statement of its account with the bank.
If the payments, according to the advice, are in foreign cur rency, and it is specified that the funds have been credited by the correspondent or branch to the bank's account with it, the bank is obliged to charge that account. The clerk enters on the ticket the letter date, the bank's collection number, and the value date, which is in this case the date of the correspondent's advice to the bank. The amount is converted into dollars at the buying cable rate for that day as procured from the traders.
When the bank is instructed in the advice of payment to debit the correspondent's account for the proceeds, reference is made to the bookkeepers to ascertain whether the correspondent has suffi.cient funds, and a hold is put through. In case of an overdraft, it is referred to a bank officer, who decides whether to allow it or not. If he knows the account is a good one he may initial the overdraft slip at once, and then it is a proper debit to the account; but if he does not know the account well, he will give instructions that the other departments be canvassed to find if funds are due the account.