Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1897-06-04
INTEREST ON DEPOSITS.
The Timely Paper Read Before the BANK
ers' Convention BY w. g. Wilkinson.

The Timely Paper heau beiore '"o D
ers' Convention BY w. g. wilkinson
Following is the full text Of the paper
read before the State Bankers Conven-
ton. at Parkersburg, Wednesday even
/ ing, by w. G. Wilkinson, Of this city
/ THE question. w..o ought to pay inter-
est on time deposits? IS one that in the
mean future is bound 10 confront the COM
mercial banks. ,-,-.- s,,,,ii-
MANY years ago. when banking facih'
ties were poor ana the rate of discount
! high. when money did not seek the banks
+ but was retained at home. It was then
good thing to offer the people high rate
/ of interest on time deposits in order 10 get
| il into business channels. Those condi-
| tons have. however. become thing OF
/ the past. Discount rates have fallen in all
money centers ana are In a fair way TO go
mucn lower put the rate Of interest on
/ time deposits. although lower, is not off as
much in proportion.
Now. in consideration of these facts
| the question is bound to come up, Is II
good for the commercial banks TO pay
interest on time deposits or daily bal
ances?
III YOU will take up this question. you
/ will find that for the future of good bank
| ing there can be but one answer, and that
is No Therefore it is high time to aool-
/ ish that feature of the business as being
| detrimental 10 commercial lines. AT this
| point arises the query, II the commercial
| banks decline TO pay interest, who VIII
/ take their place? In answer TO this ques-
ton We would first ask TO whom and TO
what class are you paying the greatest
amount of interest? You will find ii pretty
/ evenly divided. First to the workers, who
are LAYING by, some TO buy homes. others
I 10 have something when old age comes on
ITO this class We can sy that the non
I capitalized or mutual savings banks
would be the proper place 10 seek. Such
institutions are needed in all of our work
/ ing communities. Under the special law
authorizing such banks, the money placed
with them can do more good towards
/ building m a town and at the same time
NAY. a better rate of interest to the depos-
I itor than can legitimately be paid by any
\ Of the commercial banks. It can loan III
/ large or small amounts on real estate ana
/ for long periods while the commercial
/ hank is restricted TO short loans, quick
/ turns and should never loan on real es-
/ tate.
THE savings bank law, enacted in 1887
| nv the state Legislature. was made up
/ from a careful examination OF the laws
/ governing such banks in Massachusetts,
| New York and Pennsylvania, and we
! think that the State Of West Virginia has
/ a very good non-capitalzed savings bank
/ law that it would be we'll for our bankers
| to examine and study.
| secondly. YOU will find a large class OF
we'll 10 do individuals who ought TO have
| heir money better employed. This class
! keen their money in bank at 3 per cent
| simply because the banks Will pay II ana
/ save them the trouble of looking up other
| investments that would really pay better
/ Now let the banks all unite and declare
the interest paying feature off and you Will
/ soon find these people looking up other IN
vestments that win be beneficial TO all.
/ 1T is. and so long as continued will be-
| n drawback TO any community for COM
! msrcial banks to pay interest on deposits
! because so many people are satisfied to let
well enough alone. and they will con-
tinus to do so as long as you encourage
them. stop 1t and you will find few new
industries will spring up all around YOU
thereby lettering their condition as well
as yours.
Much talk has been INDUCED In for
some time past about legislation that Will
produce a more elastic and all satisfying
currency. We have had already too much
! legislative tinkering with capital and 1t Is
time TO drop that for a while. You may
! co on from now 10 eternity electing Con-
! gressmen and Senator's for the purpose OF
making laws that will bridge over or :
away with financial trouble, but II Will
! never be accomplished until the banks
. and hanl-ers all over this great country
unite as a legislative body and take such
cor1fi I'D action as will result in resolving
/ THAT II is not good, safe or legitimate
banking TO nav interest on daily balances
or time deposits.
When that is done, then. and not until
the. will it be possible for our Congress to
make good and sufficient laws to meet the
! necessities Of the times.
what is and has been the cry through
out the South and West? Money scarce
and discount rate high. So high in many
cases that it is impossible for the borrower
to pay out and the result is foreclosure,
I which nine times out of ten means less 10
| both sides.
Shall we for matter of mercenary
/ gain (Which is oftimes loss) continue TO
let that cry come TO US, or shall we do all
in our power to help alter it in such 4
way as 70 eQualize the conditions through
out the country?
In almost all large cities ma0y of the
| banks offer as inducements TO the banks
! in smaller towns ? 10 3 per cent. interest
on daily balances. These in turn oifar 5
per cent. interest on time certificates 20
many of their customers. thinking thereby
10 make little more for the stockholders
by adding to the volume OF business.
. Does IL pay? No. In good lively times ii
may seemingly pay. but when depression
| comes manufacturing interests shut down.
| trade Of an kinds drops 10 rock bottom.
prices go away below fair living profit.
then is the time it does not and cannot
nay. and such has been the case for the
past five years Let any banker examine
his profit account during that time and
| ne will find that the non-interest bearing
deposits have decreased. his earnings ca
| pacity has fallen of. but his rate of in
| tersst on time deposits or daily balances
| is still the same.
Who l. paying for al Of this? The