During the first few years of the existence of the Birmingham Municipal Bank, the cash flow at branches was positive. The majority of transactions were both small in amount and they were deposits. Withdrawals of cash on any sort of scale only occurred at such peak times as Christmas. At branches, the maximum amount a depositor could withdraw on demand was £5, as stipulated in the Bank's Regulations.
In a report to the Bank's Committee of Management dated January 6th 1928, the General Manager stated:
Payments on demand
At present payments on demand are limited to £5 at branches, with discretionary power vested in me to pay on demand sums of a higher amount. In turn, I have authorised the Branch Managers to meet cases of demand payments up to £10, on being satisfied as to the desirability. The Branch Managers have to specially record these transactions, thus adding to their work without any advantage. I suggest that all Branch Managers be authorised to meet cases of emergency (either by demand payment or shortened notice), as may suit the depositor, whenever they can do so without difficulty.
By 1928 the proportion of the amount of withdrawals to the amount of deposits had risen from 47.6% in 1921 to 79.5%. At the same January 1928 meeting, the General Manager also reported as follows:
The issue of Cash Orders to Branch Managers is rendered laborious owing to the small balance retained at Branches over-night. This balance represents £50 in addition to sums under notice, and was fixed when the business was small as compared with to-day. I suggest that daily branches be authorised to retain cash balances of £250 in addition to sums under notice, and thus avoid using so many Cash Orders and making so many journeys for cash to the Joint Stock Bank.
The system of Cash Orders was the method by which branches obtained cash to meet the demands of depositors. At the Bank's commencement the inflow of cash mentioned above was sufficient to meet such demands unless a depositor gave notice of a specific withdrawal over the £5 limit. One week's notice was required for such large withdrawals and these requests were recorded in a book kept for that purpose. The branch manager arranged to obtain cash to meet the amounts under notice and he was allowed to add these amounts to his 'nominal' maximum holding. The maximum withdrawal of £5 on demand at branches was amended to £30 from July 1st 1930.
Cash Orders were a document issued to branches by Head Office. Signed by two senior officers (see below), they authorised a branch of Lloyds Bank, Midland Bank, or Barclays to pay a specific sum to the local BMB branch manager. The BMB branch manager would present the Cash Order to the local branch of one of these three Joint Stock Banks with which Head Office had set up an agency arrangement, and receive the value of the Cash Order.
Branch Instruction No 10 (applicable to Branch Managers) covered this arrangement:
10 Cash Orders
(a) Cash orders will be supplied by Head Office in such denominations as may be fixed by the General Manager.
(b) The reference numbers of cash orders received or used must be stated on the Daily Return, and entered in a Record Book. Cash orders to replace orders used will be issued by Head Office.
(c) In case of emergency, cash orders may be obtained on personal application at Head Office or on application by telephone.
(d) When more than £500 is required on a particular day, the Joint Stock Bank concerned should be appraised in sufficient time so as to be able to meet the requirements.
In regard to Cash generally, the branch manager was also instructed as follows:
8 (a) The Branch Manager will be responsible for seeing that there is always sufficient cash in hand to meet the requirements of the Branch, and for the safe custody of cash.
(b) The maximum amount of cash which may be retained overnight in the strong room must not exceed the amount which will be notified by Head Office.
(c) Two officers should always make the journey together when paying money to, or obtaining money from the Joint Stock Bank allocated to the Branch. The conspicuous conveyance of cash should be avoided as far as possible.
Using two officers to carry cash to/from the Joint Stock Bank would frequently be impossible, particularly where the branch had a staff of only two or three officers. Amazingly, despite the fact that large amounts of cash (particularly in the 1950s and 1960s) were frequently carried through the streets, there were no incidences of staff being attacked.
The Record Book stipulated to document the branch's Cash Orders was kept in the following manner:
The system of Cash Orders, and the transmission of cash from and to a local Joint Stock Bank by BMB branches, ceased in April 1969 when a cash delivery system using Securicor Limited was introduced.
The following report was made by the General Manager to the Bank's Committee of Management on January 22nd 1924. It concerns the arrangement for the signing of Cash Orders by senior officers in Head Office. At this time the only Joint Stock Bank used for the Cash Order system was Midland; Lloyds and Barclays were added at a later date.
Obtaining supplies of money from the Midland Bank Limited
The Chairman (Councillor Appleby) and General Manager have reviewed the working of the Cash Order system, and have considered whether any alteration is desirable or not in the instructions issued to the Branch Managers.
The arrangement works quite smoothly and satisfactorily, except in one particular which it is now proposed to alter.
At present the orders are signed by the General Manager and Mr Carver jointly, or in the absence of both or either by the Assistant General Manager and Mr Parsonage acting jointly. This prevents a little difficulty as, when Mr Carver has signed such orders, if the General Manager happens to be away such orders are useless. Similarly in the case of Mr Ellison and Mr Parsonage.
It is therefore proposed for the future that, irrespective of whether the orders are signed by Mr Carver or Mr Parsonage, the second signature shall be that of the General Manager, and where the latter is not available or unable so to act that Mr Ellison (Assistant General Manager) be authorised to give the second signature.
The safeguard is in no sense weakened by this alteration which is desirable from an administrative point of view, and it is recommended that instructions be given to the Midland Bank Limited accordingly.