Using the Bank (1947)

the bank offers us many services and like Mr Frank Adams most of us use the bank thing the bank is a good place to keep money and here is Mr Adams filling out a deposit slip he lists cash and checks separately the total $623 is the amount he is going to deposit in his savings account he takes the cash the check the deposit slip and his bank book to the teller at the savings window the teller places the Bank book in an adding recording machine into the bank book she punches the amount of his deposit and the New Balance which is the total amount that Mr Adams now has in his savings account there's the amount of the deposit $62.5 the pages of the bank book show the record of Mr Adams savings account 8 years ago one March he made his first deposit of $50 as he made Regular deposits from his earnings his balance grew but his balance actually became greater than the sum of all his deposits for at the end of each six Monon interest period the bank added interest to his balance which therefore kept on growing the teller puts Mr Adams deposit slip with other deposit slips in this basket these slips are a record of the money that has come into the bank and up here they're checked in the proving machine the bank's careful methods give Mr Adams confidence that his savings are secure and so does the federal government's Insurance guarantee some of the money of the depositors is kept behind the great door of this Vault part of the money that comes into a bank is kept in cash but the rest of it must be put to work to earn a profit for the bank and so the bank invests much of its money according to law these Investments must be safe Investments such as government bonds municipal bonds and mortgages the bank also invests its customers money in personal and business loans to Reliable people here is Mr Adams with the president of the elmville National Bank they're discussing a loan saved over $4,000 that's right Mr Smith I've saved 80% of the capital I'll need to start my Hardware business I see and now you would like to borrow an additional $11,000 from us that's right in your letter here you explained why you feel this town needs another hardware store tell me Mr Adams uh how much experience have you had in the hardware business I worked as a sales for 3 years with the Lewis Wholesale Hardware in Johnstown and I have managed the Appliance Department in the king hardware store here in elmville for the past 8 years that should certainly be enough and you've been promised a location on Washington Street yes I have Mr Smith good place for a hardware store well I think we can make you this longan oh that's fine will the bank need security no I don't think so as you say you're putting up 80% of the capital from your own savings besides you've lived in this town bank with us for quite a while you have a good reputation we know you're reliable I'm glad you think so now here's the note and this is where you signed you better read it over carefully first let's see for Value received I promis to pay to the elmville National Bank $11,000 in monthly installments of $50 beginning one month from the date of this note this seems okay fine and since you're paying the loan back on a monthly basis we will calculate the interest on a monthly basis too the tables in this book will give us the exact figure now let's see 20 months at our usual rate it comes to just $20.43 now we will subtract the uh interest from the principal and give you a check for the balance that sounds all right how much will it come to it comes to exactly $979 57 that's fair enough M Jenkins will you please make out a check to Mr Frank Adams for 97957 right away Mr Smith thanks now how about opening a checking account for your new business yes I like to do that right away so I can start paying for my furnishings and my merchandise by check I'll start my checking account Mr Adams finds his new checking account very useful to pay for the $150 worth of merchandise which he has ordered he is going to draw a check on his bank here is the stub of his check to the balance brought forward he has added his most recent deposit from the total he subtracts the amount of his present Che check $150 he keeps a complete record of his checking account on his stubs the check itself is drawn on the elmville National Bank that means it is an instruction to the bank to pay to the order of the Miller Supply Company the sum of $150 Mr Adams writes the amount in words so there can be no mistake the elmville bank on which this check is drawn will pay out the $150 as soon as the Miller Supply Company endorses or signs the check and presents it for payment All That Remains for Mr Adams is to mail the check with his order to the Miller Supply Company which can collect the money as soon as it endorses the check and here is the check arriving at the Miller Supply Company the girl stamps or endorses it but instead of collecting the money direct from the elmville National Bank the company does it through its own bank where the check is arriving right now this bank can collect $150 once it places its own endorsement on the check as it is doing here but instead of collecting the money directly it uses a more convenient method like many other Banks it sends its checks to the Federal Reserve Bank for collection the Federal Reserve Bank is set up to handle thousands of checks from hundreds of banks in a single day all these Banks save themselves a great deal of trouble by collecting on checks through the Reserve Bank the Federal Reserve Bank collects the money direct from the banks on which the checks are drawn and Returns the checks to these Banks and so Mr Adams check reaches the elmville National Bank where it is cancelled to show that $150 has been paid out of Mr Adams account as proof the cancelled check will be sent to him along with his monthly statement and here Mr Adams is serving a customer in his hardware store he has building up a prosperous business with the help of his bank loan and the money he has saved over the years in his savings account and there is the lady's change but speaking of change the store is beginning to run short of it yes there is just time to change his coat and get to the bank before closing time Mr Adams finds his local bank very convenient not only because it can always give him all the small needs but also because of its other services such as his savings account the loan which it gave him and the checking account which makes it possible for him to pay for his orders by check at the teller's window he is getting his Small Change conveniently wrapped in paper and labeled nickels dimes quarters and half dollars Mr Adams is a good customer of the bank in return the bank provides many services for him and for everyone who uses the bank