Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1923-04-19
A HARDWORKING
PIECE OF PAPER
The Bank Check and How 1t Per-
forms Many Different Serv-
ices for Business.

Americans are the greatest users
Of bank checks in the world. Less
than eight per cent of all business
transactions in the United States is
conducted with money, or to put 1t
another way, more than nine out of ten
transactions are conducted with com
mercial instruments, of which one of
the most important is the check.
The use of the check has become
universal in America because it is one
Of the simplest yet most efficient bust
ness devices ever invented. The bank
transactions of Mr.. Smith, the store
keeper, illustrate in general way
those Of all other business people.
Storekeeper Smiths customers pay
him for the goods he sells to them
both with cash and checks At the end
Of the day he counts up the proceeds Of
the days business and finds his sales
have amounted to, say, $500 What
does he do with this money? He owes
a large part Of 1t to the other business
concerns from which he purchased at
wholesale the goods he is selling.
Some of these companies are In Mr.
Smiths town, and others are located
at some distance from It. Even small
business would be a clumsy, complI-
Gated and tIme-wasting affair unless It
were for the facility Of the bank check.
When a Check Is Useful
Mr.. Smith could pay his bills by
sending cash by mail, but this method
OF payment would be unwise, because
Of the danger of the money being
lost in transit. Again, he might go out
and buy express or postal money or
ders for the amounts due, but to do
this regularly would require a great
deal of his time, and would involve
needless expense. Besides, money
order does only half the work bank
check does. Although 1t is in reality
q kind of a check drawn by the ex-
press company, or by the post office,
in favor of some person or firm, 1t Is
not returned to Mr. Smith after 1t has
been cashed, but goes back to the ex-
press company or to the post Office
that issued 1t. On the other hand, a
cashed check after it comes back to
the bank and is cancelled is returned
70 Mr. Smith, who can keep 1t as a re-
ceipt in proof of the fact that his bill
has been paid.
More than this, in order to keep
accurate records Mr. Smith wants to
have one account in which all his re-
ceipts can be entered and out Of
which all payments can be made He
therefore adopts the course that most
other business men and women fol-
low. He takes his $500 to the bank,
where It is safely kept and can be
drawn upon as needed. The teller en-
ters the amount in small pass book,
which is a record of deposits. The
pass book is issued in Mr. Smiths
name and is handed to him, together
with a supply Of blank checks. Mr..
Smith is now ready to pay his bills
by checks up to a total of $500.
A Complete Record
His check will be received at any
bank where the Endorsement of the
person to whom 1t is made payable,
which is written or stamped on the
back of the check, Is known to be
genuine The bank receiving the
check will either pay or credit 1t to
the payee, and then send 1t on to the
bank in which Mr.. Smith deposits his
money. where the amount will be de-
Quoted from his $500 balance. The
check, after being properly cancelled,
will be returned to him at the end of
the month He will then have COM
plete record showing that he deposit
ed $500, that he drew checks of, say,
$3.50 to pay some of his bills, that ne
has balance left Of $3.50 and that his
bills have been duly paid as shown by
the cancelled checks with the indorse.
ments upon them.
The bank will pay all checks pre-
sented to 1t bearing Mr.. Smiths sig
nature as given on his signature card
IN any sums covered by the amount Of
his bank balance, which he contin-
ually increases by deposits and de-
creases by checks drawn against his
account This process of making de-
posits and issuing checks continues
day after day, both the deposition and
the bank keeping their own records
Millions of such transactions are
handled every day by the banks and
trust companies of the United States
In one year more than two hundred
and fifty billions of dollars in checks
have passed through the New York
Clearing House alone. Payments OF
these vast sums are made without the
use of any actual money. A wonder
full system has been built up by the
use of the small slip of paper we call
the bank check. The check is essen
tial to the business and commercial
life Of the present day.