The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-02-14
SMALL ACCOUNTS.
A Disposition by Banks to Charge for
Handling Them.

The Financier
One or more Chicago banks, according to
information published i'll this paper last
week. supplemented by additional particu-
lars given in our Chicago letter this week,
have determined to place their business on
a paying basis so far as heretofore unproft-
able accounts are concerned, and to that end
have decided to make charge for handling
deposits which do not reach a certain maxi
mum. Further than that they are discussing
the question of paying interest on minimum
current accounts for the month rather than
on the maximum sum of deposits. These
and other reforms, we are advised, are not
the result of a concerted agreement, but
rather are the outgrowth of common-sense
view of the matter by the ofhclals OF sew
eral institutions.
The change is radical, hut in the light OF
present conditions it is logical. Whether it
can be put into permanent operation Is an
other matter. In New York the business OF
banking has been classified that the ques-
ton has solved itself to a large extent
through the distribution of business in GER
tain directions Still, every bank Is troubled
more or less with accounts from which no
profit Is derived. 1t IS not always the small
deposit, however comparatively inactive
that causes the most trouble. The wildly
fluctuating account that represents a large
credit one day and an almost immediate re
duction to zero the next is quite as much a
source Of trouble as the obscure deposit rep
resenting a salary accumulation or the pro-
ceeds or a minor business. Why banks
should popularity be supposed TO WELCOMES
and invite such balances is one of the un-
solved problems as between the public and
the institution II needs no mathematical
demonstration TO prove that the time wasted
in looking after such business more than
counterbaIances any profit that might be
derived to say nothing of the losses that
frequently arise. In short the banks can no
longer attempt to follow the customs of
former years They are loanfng money to-
day on a smaller margin than ever, and
are often unable to find employment for
funds that are left with them A consider
able amount of clerical labor is expended
on business which Is admittedly Improbable
and unless some offset in the way of charges
for doing what has been up 10 this time
gratuitous work is found the outlook for
dividends is cOrreSpOndingly Iessened. OF
course. the United States has only recently
advanced to the position defined as that Of
a creditor nation. Money has not been a
3-per-cent commodity and profits have been
of expense. But this period has passed, for
the present at least, and perhaps per-
manently. The new era involves, as we
pointed out last week. Il reduction OF ex-
penses or COMPENSATION for labor heretofore
granted as an accommodation and the
action of the Chicago banks only emphasizes
the remarks noted We have no doubt that
a few depositors will he mortally offended
at the formal notification that their business
is Improbable but after they have with
drawn their accounts and awaited I'm vain
the closing of the bank they may begin to
realize that after all the banker was right
The majority Of small depositors, we
imagine, will take more common-sense
view of the question and will consent to a
moderate charge. AT any rate, while the
bank may lose d small percentage Of busi-
ness its officers can console themselves with
the thought thar while they are not swelling
their deposits they are mt least losing MOTH
ing. The Chicago experiment will be
watched with considerable interest.