Dictionary of Banking

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DICTIONARY OF

BANKING

A CONCISE ENCYCLOPAEDIA OF

RANKING LAW AND PRACTICE

BY WILLIAM THOMSON

BANK INSPECTOR

LONDON

SIR ISAAC PITMAN & SONS, LTD., 1 AMEN CORNER, E.C. BATH AND NEW YORK

FROM THE SAME PUBLISHERS

Bank Organisation, Management, and

Accounts. By J. F. Davis, D.Lit., M.A., LL.B. (Lond.), Lecturer in Banking and Finance at the City of London College. In demy 8vo, cloth

gilt, 5s. net.

i comprehensive

Printed by Sir Isaac 1'itman & Sons, Ltd., London, I3atu and New York

PREFACE

The Dictionary of Banking has been compiled in order to provide, in one volume,

the means of obtaining information, with the minimum of trouble, upon any

subject connected with the business of banking.

Hitherto it has been a matter of continual difficulty with many bank officials to know exactly where to turn for information upon certain subjects ; but it is hoped and believed that the present volume will meet this difficulty, and that

it will enable anyone to find in its pages a read\' and reliable reference whenever

the occasion arises. The following pages include, as far as possible, a reference to all the various terms and matters which come within the scope of a banker's ordinary duties, as well as to other matters which arise out of, or are associated with, the business

of banking, such as bankruptcy, company regulations, partnerships, stamp duties, stock exchange, winding up, etc. The book is furnished with many cross-references, and at the end of each

leading subject, e.g., Accounts, Bankruptcy, Bill of Exchange, Cheque,

Companies, Insurance, Mortgage, Stamp Duties, Stock Exchange, Title Deeds, will be found a hst of the principal articles connected with that subject, which should facilitate the discovery of any particular point. The whole of the Bills of Exchange Act, 1882, is given, the sections being

distributed under the appropriate headings. Under the title Bills of Exchange

Act, 1882, references are supplied to the various articles in which the different sections have been placed. ]Many sections from other Acts, which are useful and interesting to bankers,

are also included under the proper headings. For example, if information is required respecting the registration of a charge given by a company, the actual words of the Companies (Consolidation) Act, 1908, on that subject are quoted under Registration of Mortgages and Charges ; and respecting the registra- tion of a mortgage of a ship, the provisions of the Merchant Shipping Act, 1894, are set forth under Ship-Mortgage, etc., and so in many other cases, an endeavour

having been made, wherever practicable and necessary, to quote the sections

of the Acts relating to matters of importance. There is probably no subject of greater interest to branch managers and 221045

PREFACE

senior clerks than that of securities for advances, and consequently aU matters connected with the examination of title deeds and the investigation of titles have been treated in the Dictionary in accordance with their importance.

In addition to the article on Title Deeds, deahng with the matter in a general way, there is an article on Title Deeds—Notes re Title, wherein is set out a number of the principal points which it is thought will prove useful

in indicating what a banker should attend to when examining a parcel of deeds

of freehold, leasehold, or copyhold property. If further information should be required on any of the points raised, the subject can be referred to in its alphabetical order in the book. A few questions relating to the value of a property which is offered as security are added to that article, and additional hints

as to valuations, particularly for the benefit of younger managers, may be found under Advanxes, Farm Stock, Licensed Property, Ship—Valuation

OF, Valuation. With regard to securities other than title deeds, articles such as the following may be referred to :

—

American Railroad Certificates, Bearer Bonds

Bill of Lading, Bill of Sale, Bond of Credit, Certificate, Debenture,

Debts—Assignment of. Dock Warrant, Guarantee, Inscribed Stock, Life Policy, Negotiable Instruments, Shares, etc. A list of many of the abbreviations which are used in bank offices is supplied under Abbreviations. The article Bankrupt Person contains separate headings relating to a bankrupt drawer, partner, pa3-ee, surety, etc. ; and under Statute of Limitations the various sub-headings show how the statute affects the different matters with which a banker is concerned, such as a bank note, a biU of exchange, the drawer of a cheque, a guarantee, memorandum of deposit, promissory note, etc. A series of articles is supphed dealing with the position upon a death, e.g., Death of Acceptor, Administrator, Dr.\wer, Guarantor,

Joint Customer, Partner, Shareholder, Trustee, etc. Specimens of indorsements which are usually accepted, as well as examples

of those which are not, as a rule, passed by a banker, are given in tabular form under Indorsement. The Report of the Gold Reserves Committee in 1909 is given under Gold

Reserves ; and under Unification of Laws of Bills of Exchange the various rules recommended by the conference of the National Law Association

at Budapest in 1908 and at London in 1910 are set forth for the consideration

of those who are interested. The results of law cases have been given, wherever necessary, and in many

PREFACE

instances the words of the judges are quoted. References are added to the various cases, and the abbreviations in the quotation of reports are explained on page vii. To facilitate reference being made to law reports other than those that

are quoted in the text, the date of the decision has been given in every

instance. The following books amongst others have been consulted in the preparation

of the present volume : —

•

Grant's Law of Banking The Law of Banking ...... Heber Hart, LL.D. (Lond.) The Law of Banking ...... Sir John R. Paget, Bart, K.C. The Practice of Banking (4 Vols.) . . . John Hutchison Banking and Negotiable Instruments . . Frank Tillyard, M.A.

Pitman's Bills, Cheques, and Notes

English Practical Banking . . . . T. B. Moxon

The Country Banker ..... George Rae

Lombard Street ....... Walter Bagehot

Pitman's Business Man's Guide . . . J. A. Slater, B.A., LL.B. (Lond.) Present-Day Banking . . . . . F. E. Steele Banking and Currency ..... Ernest Sykes, B.A. My Banker and I . . . . . . J. G. Kiddy The Country Banker's Handbook ... History, Principles, and Practice of Banking . J. W. Gilbart Money Market Primer ..... George Clare The Elements of Banking . . . . . H. D. Macleod, M.A. Handbook on Joint Stock Companies . . F. Gore-Browne, M.A., K.C,

and W. Jordan Banking Law ....... W. Wallace, M.A. and A. IMcNeil Questions on Banking Practice Journal of the Institute of Bankers

Bankers' Magazine Banking Almanac

I have to express my deep indebtedness to the many friends who have been kind enough to supply most useful information and to read and correct the

sheets as they have passed through the press, and I desire especially to acknowledge the valuable assistance which I have received from Mr. J. A. Slater

of the Middle Temple, Barrister-at-Law, in checking the points referring to banking law. W. THOMSON.

Newcastle-on-Tyne.

January, 1911.

PREFACE

senior clerks than that of securities for advances, and consequently all matters connected with the examination of title deeds and the investigation of titles have been treated in the Dictionary in accordance with their importance. In addition to the article on Title Deeds, dealing with the matter in a

general way, there is an article on Title Deeds—Notes re Title, wherein is set out a number of the principal points which it is thought will prove useful

in indicating what a banker should attend to when examining a parcel of deeds

of freehold, leasehold, or copyhold property. If further information should be required on any of the points raised, the subject can be referred to in its alphabetical order in the book. A few questions relating to the value of a property which is offered as security are added to that article, and additional hints

as to valuations, particularly for the benefit of younger managers, may be found under Advances, Farm Stock, Licensed Property, Ship—Valuation

OF, Valuation. With regard to securities other than title deeds, articles such as the following may be referred to :

—

American Railroad Certificates, Bearer Bonds

Bill of Lading, Bill of Sale, Bond of Credit, Certificate, Debenture, Debts—Assignment of. Dock Warrant, Guarantee, Inscribed Stock, Life Policy, Negotiable Instruments, Shares, etc. A list of many of the abbreviations which are used in bank offices is supplied under Abbreviations. The article Bankrupt Person contains separate headings relating to a bankrupt drawer, partner, payee, surety, etc. ; and under Statute of Limitations the various sub-headings show how the statute affects the different matters with which a banker is concerned, such as a bank note, a bill of exchange, the drawer of a cheque, a guarantee, memorandum of deposit, promissory note, etc. A series of articles is supplied dealing with the position upon a death, e.g., Death of Acceptor, Administrator, Drawer, Guarantor,

Joint Customer, Partner, Shareholder, Trustee, etc. Specimens of indorsements which are usually accepted, as well as examples

of those which are not, as a rule, passed by a banker, are given in tabular form under Indorsement. The Report of the Gold Reserves Committee in 1909 is given imder Gold

Reserves ; and under Unification of Laws of Bills of Exchange the various rules recommended by the conference of the National Law Association

at Budapest in 1908 and at London in 1910 are set forth for the consideration

of those who are interested. The resvilts of law cases have been given, wherever necessary, and in many

^\ PREFACE

instances the words of the judges are quoted. References are added to the

various cases, and the abbreviations in the quotation of reports are explained on page vii. To facihtate reference being made to law reports other than those that

are quoted in the text, the date of the decision has been given in every

instance. The following books amongst others have been consulted in tlie preparation

of the present volume :

—

Gr.\nt's Law of Banking The Law of Banking ...... Heber Hart, LL.D. (Lond.) The Law of Banking ...... Sir John R. Paget, Bart, K.C. The Practice of Banking (4 Vols.) . . . John Hutchison Banking and Negotiable Instruments . . Fr.\nk Tillyard, M.A.

Pitman's Bills, Cheques, and Notes

English Practical Banking . . . . T. B. Moxon

The Country Banker ..... George Rae

Lombard Street ....... Walter Bagehot

Pitman's Business Man's Guide . . . J. A. Slater, B.A., LL.B. (Lond.) Present-Day Banking . . . . . F. E. Steele Banking and Currency ..... Ernest Sykes, B.A. My Banker and I . . . . . . J. G. Kiddy The Country Banker's Handbook ... History, Principles, and Practice of Banking . J. W. Gilbart Money Market Primer ..... George Clare The Elements of Banking . . . . . H. D. Macleod, M.A. Handbook on Joint Stock Companies . . F. Gore-Browne, M.A., K.C,

and W. Jordan Banking Law ....... W. Wallace, M.A. and A. McNeil

Questions on Banking Practice Journal of the Institute of Bankers

Bankers' Magazine Banking Almanac

I have to express my deep indebtedness to the many friends who have been

kind enough to supply most useful information and to read and correct the

sheets as they have passed through the press, and I desire especially to acknowledge the valuable assistance which I have received from Mr. J. A. Slater

of the Middle Temple, Barrister- at- Law, in checking the points referring to banking law. W. THO:\ISON.

Newcastle-on-Tyne.

January, \Q\\.

ABBREVIATIONS USED IN THIS BOOK WHEN

REFERRING TO LAW CASES

A.C. [Appeal Cases, Law Reports. App. Cas. •' B. & Ad., Barnewall & Adolphus.

B. & C, Barnewall & Cresswell. Burr., Burrows.

Be., Beavan.

C.B., Common Bench.

C.B.N.S., „ ,, New Series. C.P.D., Common Pleas Division, Law

Reports.

Ch., Chancery, Law Reports.

Ch.D., Chancery Division, Law Reports.

CI. & Fin., Clark & Finelly. Cox C.C, Cox's Criminal Cases. E. & B., Ellis & Blackburne.

Eq., Equity Cases, Law Reports.

H.L.C., Clark's House of Lords' Reports.

Ir R C L 1 ^"^^ Common Law Reports.

I.R., Irish Reports.

J. & H., Johnson & Hemming.

K.B., King's Bench, Law Reports.

L.J., C.P., Law Journal, Common Pleas.

L.J., Ch., ,,

,, Chancery.

L.J., Q.B., ,, ,, Queen's Bench.

L.R., Ex., Law Reports, Exchequer.

L.R., Ch., „ „ Chancery.

L.R., Q.B., ,, ,, Queen's Bench.

L.T., Law Times Reports. M. & S., Maule & Sehvyn. Macq. H.L.R., Macqueen's Appeal Cases

(Scotch). Mer., Merivale.

Q.B., Queen's Bench Cases. Q.B.D., ,, ,, Division.

Sol. J., Solicitors' Journal. T.L.R., Times Law Reports.

T.R., Terms Reports. W.R., Weekly Reporter.

Dictionary of Banking

ABBREVIATIONS] @. At. A/C, Account. A/C, Account Current. A/D., After Date. A/c, Account of. A/S., After Sight. Acce., Acceptance.

Agt., Agreement.

Assigt., Assignment.

B.B., Branch Bill. B/C, Bills for Collection. B.D., Bill Discounted. B/E., Bill of Exchange.

B.L., Bill Lodged.

B/L., Bill of Lading.

Bs/L., Bills of Lading.

B.N.. Bank Note.

B.O., Branch Office. B/P., Bills Payable.

B.P.B., Bank Post Bill. B/R.. Bills Receivable.

B/S., Bill of Sale. C, Copper. C, Country.

C/-, Coupon.

C.A., Credit Account. C%. C/A., Current Account.

C.B., Country Bill. C/B., Cash Book.

C.C, Cash Credit. C.C, Country Cheque.

C.C, Country Clearing. CD., Cum Dividend.

C.H., Clearing House.

C.N., Country Note. CO., Cash Order.

C. of B., Confirmation of Balance.

C.O.D., Cash on Dehvery.

C.P., Charter Party.

Cf. (Lat. confiV). Compare.

Chq., Cheque.

Ck., Cheque.

Cp., Compare.

Com., Commission.

Contra, Against.

Cr., Creditor, Credit. Cum D., With Dividend.

Cur., Curt., Current.

^ABBREVIATIONS

D., a penny. D is the first letter in deuarius

(Latin). D., Deeds.

D.A., Deposit .Account.

D/.\., Days after Acceptance. D/B., Day Book. D/D., Days after Date.

D.P.B., Deposit Pass Book. D/R.. Deposit Receipt. Deb., Debenture.

Dft., Draft.

Dis., Disct., Discount.

Div., Dividend.

Dols., Dollars.

Dr.. Debtor.

D/S., Days after Sight. E.E., Errors Excepted.

e.g. (Lat.. exempli gratia). For example. E/L, Endorsement Irregular. E. & O.E., Errors and Omissions Excepted.

at seq. (Lat., et sequentcs). And the following. Ex. Cp. or x/cp., E.x Coupon. Ex D. or x/d.. Ex Dividend. Ex. Int., E.x Interest. Exch., Exchange.

Exct., Exec, Executor.

Execx., Executrix.

Exor., Executor.

P.. Franc.

F.A.S., Free Alongside Ship. F.O.B., Free on Board.

F/P.. Fire Policy.

P.p., Fully Paid.

Fi. Fa., Fieri Facias, [q.v.) Fo., FoL, Folio.

G., Gold.

G., Guarantee.

H.jM.C, His Majesty's Customs.

H.M.S., His Majesty's Service. H.O., Head Office.

lb.. Ibid. (Lat., ibidem), In the same place.

Id. (Lat., idem). The same.

I/L, Indorsement Irregular.

Ins., Insurance.

Inst., Instant, Of the Present Month.

Int., Interest.