But Mr. Jones will make these figures £35,154, and the answer £3 17s. 1d., and upon asking for an explanation he will be told that he has been charged three days’ interest upon the cheques he paid to his credit during the half-year. The banker argues that his client receives credit for the cheques he pays in immediately, whereas he himself has to collect them through the “clearing,” and does not receive the money for two or three days. The argument is somewhat fallacious as to the length of time, but we need not discuss that minutely. Mr. Jones points out that he pays in cash and local cheques as well as cheques upon London and country bankers, and that, therefore, he cannot understand why the manager charges him three days’ interest upon the total sum paid to his credit during the half-year. He will, of course, decline to submit to this charge, and request the manager to refund him 4s. 11d. (three days’ interest upon £756 at 4 per cent. per annum).
With reference to the rate, the average Bank rate from 31st December to 30th June works out at £3 17s. 1d. While his account was overdrawn, however, the official minimum was at 4 the whole time, so the rate is a fair one, but this question has already been discussed in the previous chapter.
His banker owes him 1½ per cent. per annum upon his creditor balances, which are multiplied by the days and extended in our second “total” column. He has, therefore, to receive 1½ per cent. per annum upon £3,891 for one day. Hence:—
| 3,891 × 1½ × 1 | = 3s. 2d. |
| 100 × 365 |
As this is the sum debited in the pass-book, Mr. Jones’ mind is at rest à propos of the correctness of the figures; but it will probably occur to him that the rate might be improved, for the fact that one is borrowing at 4 and lending at 1½ is not conducive to harmonious thinking.
Next, he checks the commission on his turn-over, which he makes £117. He pays ⅛ per cent., of course, upon the amount of the cheques credited in his pass-book during the half-year, and these come to the sum aforesaid. Hence:—
| 117 × 1 | = 2s. 11d. |
| 100 × 8 |
But his banker has charged him ⅛ per cent. on £617. His glance falls upon the balance forward of £500 2s. 6d., and it at once occurs to him that the manager has charged him thereupon, that, in short, a mere banker’s opening entry has been included in his turn-over. Excited by this discovery, Mr. Jones calls upon his banker, and points out to him, with a touch of Celtic intensity, that he sees no earthly reason why he should pay 12s. 7d. simply because the bank has made an entry of its own in his pass-book. Moreover, with a keen eye for mathematics, he clearly demonstrates that he has already paid commission upon the various transactions which resulted in the said balance; so the manager, adjusting his spectacles, and praying Mr. Jones to moderate his language, allows that, in the hurry of business, a little mistake has occurred. A customer, when checking his charges, should see that he does not pay commission upon opening entries of this description, as, needless to say, they are merely there in order to enable the banker to balance his books, and bear no relation whatever to a client’s turn-over, though they are sometimes added to it.
Just referring to the rate of commission, ⅛ per cent. we know, seems too much, so Mr. Jones may be recommended to read Chapter VIII of this book.