Phillips County herald., 1923-04-05
A HARDWORKINC
PIECE OF PAPER
The Bank Check and How It Per-
forms Many Different Sery-
ices for Business.

Americans are the greatest users
Of bank checks In the world. Less
tnan eight per cent Of all business
transactions In tho United States Is
conducted with money, or. to put Il
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 II ia one
OF the simplest yet most efficient bust.
ness devices ever invented. The bank
transactions OF Mr. Smith. the store.
keeper, illustrate in a general wav
those OF all other business people.
Storekeeper Smiths customers nav
nim 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
nave amounted to. say. $500. What
does he do with this money? He owes
q 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 I'm Mr..
smiths town. and others are located
at some distance from 1t. Even small
business would be clumsy, eompIi.
Gated and time.wastinp affair unless Il
were for the facility Of the bank check.
When Check 10 Useful
Mr.. Smith could pay his bills hv
sending cash by mall. 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 Tor the amounts due, but to do
this regularly would require a great
deal Of his time. and would involve
needless expense. Besides. a money
order does only half the work a bank
check does. Although It Is In reality
kind OF check drawn by the ex.
press company, or by the post office,
In favor OF some person or firm, Il is
not returned to Mr.. Smith after It has
been cashed. but goes back to the ex.
press company or to the post ONCE
that issued 1t. On the other hand, a
cashed check after II comes back to
the bank and Ia cancelled is returned
to Mr.. Smith. who can keep II as re.
ceipt In proof OF the f..ct that his bill
has been paid.
More than this. in order to keen
accurate records Mr.. Smith wants to
have one account In which all his re.
ceipts can DO entered and out OF
which all payments can he made. He
therefore adopts the course that most
other business men and women fol.
low. He takes his $500 to tho bank,
where II Is safely kept and can be
drawn upon as needed. The teller en-.
ters the7amount 10 q small pass book.
which 70 record OF deposits. The
pass book Is issued IN Mr.. Smiths
name and is handed 10 him. toKethsr
with 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 DO received at any
bank where the Endorsement of the
person TO whom II Is made payable.
which Is written or stamped on the
back Of the check. Il known to be
genuine. Tho bank receiving the
check will either pay or credit It to
the payee. and then send II on to the
bank In which Mr.. Smith deposits his
money. where tho amount will be d..
Quoted from his $500 balance. The
check. after being properly cancelled.
will be returned to him at the end Of
tho month. lie will then have com.
plete record showing thpt he deposit.
ed $500. that he drew checks OF. say.
$3.50 10 pay some Of his bills. that he
has a balance left OF s3s0-and that his
bills have been duly paid as shown by
the cancelled checks with the indorsc.
ments upon them.
The bank will pay nil checks pre-.
scntcd TO II bearing Mr.. Smiths sig.
nature as given on his signature card
In any sums cover d by the amount OF
his bank balance. which he contin.
ually Increases by deposits and dc.
creases by checks drawn against hlB
account. This process o; making de-
posits and issuing checks continues
day after day. both the deposl,or ana
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 ono year more than two hundred
and ffty billions Of dollars In checks
have passed through the New York
Clearing House nionc. Payments Of
these vast sums are made without the
use OF any actual money. A wonder.
ful system has been built up by tho
use Of the small slip Of paper wc call
tho bank check. The check is essen.