The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1925-12-10
USE OF CHECKS
IS BIC MD To
BUSINESS
careIessness, However, in
Their Handling by custo-
mers Causes Loss
Ry RIGHARD HATTON

By RICHARD HATTON
The use of checks in practically
al financial transactions is a de-
= ivelopment in. business which has.
possibly, done more than any other
thing to facilitate mans COM
mercial activities. 1t would be i'm
possible to carry on modern business
life with each purchaser or each
!. debtor seeking to pay his debt lug
gino around sack of gold OF
silver, or, even, carrying sufficient
paper currency for. his requirements.
In order, however, to transact busi-
ness by means of checks it is nec-
essary to establish a banking con.
nection, to have behind the check d
strong, reliable banking institution
where q balance is kept for the con-
5 veniences of those who draw and
accent checks in business transac-
lions. Often the important service
rendered by the bank in connection
with checking accounts and, there
fore, in practically every business
transaction, is overlooked or accept
ed as an orderly part of system
which works for the convenience OF
the public and the good Of business.
1T is surprising how many people
who use checks misuse them.
There is a tremendous amount OF
scarelessness and ignorance display
ed in taking advantage OF this &C
cepted bank service. approximately
125, 900 checks were returned by
washington banks this year for
various reasons which precluded
their being honored by the bank
upon which they were drawn. Con-
isidering that many Of these checks
we're drawn for large amounts the
actual cash involved reaches into
high figures. Many thousands or
dollars might have been lost ex-
cent for the caution and efficiency
OF the banks. Thousands of dollars
were actually lost through the
thoughtlessness or the carelessness
- those who accepted worthless
checks in payment Of debts.
Had no Accounts
An example of what may happen
when q merchant or any individual
eAshes A check without being GER
tain regarding It's soundness is found
IN the fact that In Washington this
year over 5000 checks were drawn
on banks where the person making
the check had no account what
ever. Unless the person who pre-
senfed the check and received the
cash called for on its face made
kood the amount turned over to
him. the loss fell upon the person
tcnsllfnk the check which was, OF
course. refused when presented to
> the hank upon which It was drawn.
= Practically no loss ID reported by
District OF Columbia hanks on ac-
count Of had checks. Bank organi-
za3ions are constantly, and Of neces-
sitys on guard against this sort OF
fraud or inadvertance, and tellers,
while having moro or less descre-
!, ton In accepting checks when the
maker is known or when an account
nuired, when the slightest doubt
e1lsts-as to the validity Of g. check,
to consult an officer Of the bank
before making payment. However,
while the bulk OF the loss because
OF bad checks falls upon merchants
and others who cash them, con-
siderable extra work Is entailed by
banks when these checks are
handled for depositors who have
accepted them In good faith.
Much Time Wasted
The mere mechanical effort re-
Quired In q bank in handling bad
check causes q waste Of valuable
time and effort. So great is the
loss in this respect In some cities
that a fixed charge Of so cents is
added by the banks where they are
required to take care of worthless
checks deposited by their clients.
A charge Of this kind is not un-
reasonable when the service rem
dered Is considered and there has,
for some time, been talk of adopt
ing tn system of a fixed charge Of
tafa kind In WashfnRt0n
Local bankers strongly advise more
aggressive action by those who in
nocently accept bad checks. The
penalty for passing a worthless
check is one which would cause the
criminally inclined to refrain from
attempting to pass them IL it was
known that the law would be en-
forced. Also, a little wholesome
fear OF the law might act as a
Ettmulent to more care on the part
OF those who issue bad checks
through ignorance or carelessness.
FINALLY. much trouble and great
loss could be avoided, according to
washington bankers, were there q
less promiscuous cashing Of checks
on the part of the public without
proper assurance that there is an
ample account to cover the amount,
The Bank OF Commerce and Saw
ings has declared the regular semi
annual dividend Of per cent, pay
able on January l to stockholders
of record December 20, 1925.
The tremendous work Of distribut-
ing Christmas savings checks can be
realized when it is stated that Wash
snRton banks mailed out over 10000
OF these checks at an approximate
cost to the bank Of cents per
check. The mere handling Of the
checks cost Washington banks in
the neighborhood of $1,000 To this
must be added the cost Of handling
= the accounts by tellers, bookkeepers,
etc.. and through the Clearing
House. All Of this is a distinct
Rratituous service on the part of
the banks which is undertaken in
the interest Of community thrift.