The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1895-06-07


Guiding day OF tho annual meeting Of
tho Wos! Virginia Bankers Aslocla.
ton, tho sessions OF which were hold
in tho rooms OF tho chanlbor OF COM
nerce. Although tho attendance has
becn smaller than wM expected tho
meeting has proved 10 bc tho q most
interesting, instructive and enjoyable
one. THO morning session was called
to order by MIR. John Claypool, ofSpcn.
cor, and after prayer by Rev. DR.. F. D.
T. Buckley, OF Thomson NJ. L. church,
tho election Of officers took place, with
the following result:
Prcaident-Thomas E. Davis, oil Graf.
ton.
Vice ptesidents-First district, L. J.
Bayha, Of Wheeling; Second district.
A. ". Loreatz. pi Morcnntown; Third
District. z. o. Prince. Of Hinton; Fourth
district, John Claypool, ot Spencer.
Secretary and treasuror-P. B. Dob
bins. of Wheeling.
Mr.. Davis wa, elected 10 the presidcn-
cy by acclamasion. Last year he served
as tho vice president from tho Second
district. Mr.. Dobbins was re.clected
secretary and treasurer. in spite OF his
decIination to again serve. Mr.. Dob
bins good work in tho Office, howev er,
determined the association to again
have his services.
The association then took up the mat
ter Of the place for next years meeting
and Fairmont was decided upon.
Mr.. Sands, OF the Exchange Bank,
read paper that had been prepared by
Hon. Thomas Z. Davis, on "Does good
banking pay interest on deposits2"
The discourse follows and was listened
to with great interest:
"MR PRESIDENT AND GENTLEMEN OF
THE BANKERS AssoCIArIoS:-The sub
jecs assigned me to discuss before you at
your first annual meeting is one of great
Importance TO bankers. When your
secretary notified mo that ! was expect.
cd to writo or say something on this
subject, was called away from homo
for week, and since my return ! have
been SO busy and the weather go warm,
l have not given the question that de-
gree OF thought it req uires, but submit
few remarks for your consideration.
Docs good banking pay interest on
deposits? The proper functions OF q
bank are to receive deposits subject to
call, discount notes and bills, deal in e1-
change. securities, ETC., and generally to
be medium through which the busi-
ness transactions Of the community may
be safely and systematically carried on.
When bank pays interest on deposits
the relation between 1t and the customer
with whom such contract is made, is
that OF borrower and investor. Its arti-
cies OF association. charter and bylaws
do not contemplate that relation on the
par. OF tho bank, and while il may not
be prohibited by any Of their instru-
ments, it can be safely said the paying
OF interest on deposits is extra-function.
al, aud therefore not in consonancs with
the principles OF sound banking.
"Whas would DO the effect il bank
should announce TO the public it was
about to place loan on the market.
composed Of its own 8 or 1 por cent
bonds? Would not such an act put in
peril its standing and credit? Why
more SO than when 1t advertises i. will
pay interest on deposits? Tho only
difference is in theiorm OF expression.
In tho ono case It would be brought
forcibly to tho notice OF tho public that
the bank was borrower and be taken
ior granted it must be in need OF money
or it wouldnot oaer its securities Gts
own obhration) for sale. In the other
case the matter would doubtless attract
but littlo attention, the people no.
classifying deposit OF this kind as 4
debt in tho same sense as they do
bond.
"Tho affairs OF bank should be
SO conducted that the clements OF
safety be specially guarded, and this is
tho rule followed by well.managed
banks. Tho practice OF taking deposits
at interest tends to lower the standard
and therefore should bo discounten-
auccd and avoided.
"The deposits are often unduly
swollon by the interest paying debt of
tho bank, owing in some instances 10
tho eagerness to make good showing
to tho stockholdcrs us some look ut it,
forgetting that ! large deposit line.
while it may indicate enterprise aud
activity and source OF profit. is really
not, being liability. aud an elementot
weakness.
"rhcrc is danger that bank with q
large intercst.bearing depoait will tako
moro than ordinary risk in making
loaus in its ondeavor 10 keep its funds
at profit, the interest it
paya being n constant drain on its earn
ings, and then again it is t0mpted to
trench on its reserves, always danger
ous expodieuL
"Tho most depressing period to q
banker is when he has an over supply
OF loanablc funds and can find no in
vcstmonts for them, aud the fccinS is
intensified il ho is paying interest on
his dcposi.s. A panic has Il contrary
ellcct on some: In that there is lifo,
warfare, with nerves at full
There is no longer ary ioar
about finding uSo for his funds: tho
question is whether thorc is enough to
90 round. at such timos tho holders OF
interest certificates bob up sofenely.
and form tho advance guard OF tho army
OF tho ,imid, who all ut once discover
thoy have pressing need for tho money
that tho bank has been taking care OF
for thcm, pcrhaps ut little or no profit
10 itsolf.
"Old bankers will recall the very
3is,atrouu manic of 1871 whon nrlrly nil