The relation of the trustee to the depositor is that of a cestui que trust—one acting for the benefit of another. The relation of the cor poration to the depositor, however, is one of Contract.
Accounts.—On the opening of an account, the depositor receives a passbook which not only is evidence of his deposit, but the terms under which it is received, and constitutes the contract between him and the bank. This con tract, briefly stated, is, that the bank will invest the funds lawfully, manage wisely, repay the same on demand or on a stated notice and use due care in making payments. The contract of the depositor is that he will take good care of the book and promptly inform the bank of its loss, for its protection against wrongful pay ment, and abide by the bylaws, copy, or part, of which is always embodied in the passbook, and the mere acceptance of the book evi dences his compliance with this contract.
Savings bank accounts are of three kinds: (1) single-name accounts, payable to the indi vidual named in the book and at death to his legal representative; (2) the joint account, payable to either of the parties during life, and at death to the survivor; (3) the trust ac count, payable to the trustee during life and at death to the party named as beneficiary.
Bookkeeping.— The bookkeeping of a say ings bank is simple. A single transaction will indicate its character. Upon making a deposit the depositor signs his name and gives informa tion concerning his age, birthplace, parents, etc., for the purpose of identifying him in future payments. The book is then issued to him and a deposit ticket made out, the name in dexed, and the signature card filed numerically for reference in making payments. Books are always numbered and for every book there is a corresponding ledger account or card. The accounts are kept in groups of one or two thousand or by ledgers for proving purposes. The deposit tickets of the day are sorted ac cording to groups, and entered on a distribution sheet by number and name, with the amount carried to a perforated column at the side. The postings are made directly from the tickets to the card or ledger space. When all postings have been made the proving clerk checks the distribution sheet, from which the stub has been detached, leaving only the num ber and name as a guide. Turning to the num
ber he verifies the name and inserts the amount posted for that day. The total amount must agree with the detached stub, thus showing that the right amount has been posted to the right account. Drafts are put through the same process, but in paying, the signature is compared•with the one on file and as a rule the test questions are asked, the purpose of this process being to show in a court of law, if necessary, that due care has been used to iden tify the depositor. The savings bank is ab solved, in a measure, from the general rule of forgery. If the bank can show that the de positor has written a signature comparing favorably with the original and answered the test questions properly, it is protected against wrongful payment. It is obviously impossible for a savings bank to know personally all its depositors, who, being infrequent patrons, are liable to change handwriting, and the test ques tions act as a measure of protection both to the bank and the depositor.
The big events of the savings bank year are: First, the trial balance, which is a total of all the accounts, which must agree with the general books and in well-organized banks are kept absolutely in agreement by these periodic tests, made as a rule quarterly or semi-annually. In a bank where the transactions run into the millions this is no light task. Second, the in terest computations, which involves the labor of ascertaining the periods for which the vari ous deposits are entitled to interest, computing and posting the same to the various accounts within a period of a few weeks.
Savings banks as a rule pay in terest from quarterly periods, or from the first of the month following the deposit, allowing a certain nuthber of days' grace; thus, money de posited on or before 10 July and remaining in the bank until 1 January, will draw six months' interest; between 10 July and 3 Octo ber — three months' interest. Some banks pay from the first of each calendar month if the money is on deposit at the close of the interest period.