The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-06-28
President of the Bank OF
Lexington.
GEO. w. MoNTCAsTLE,

lature The repeal OF the law allowing
three days grace VAS strenuously
urged by your committee but it lacked
sufficient support to DE e.ased from our
statute books l would urge upon the In
coming president and Executive Commit
tee that they keep this subject before
the people and educate them up to its
successful passage at the mex; ses ION OF
the Legislature. The law makers, rs
class. are not friendly to our interests.
mad '.populism" and ''pcpuhs,ic ideas
have not been eradicatel eatlely from
our legislative halls so we had best take
courage and thank God the laws are no
worse than they are.
While we have had tight money, more
or less throughout the year-no panicky
feeling has existed except in some locali-
ties where it pays to have little .panlc"
or squeeze" now and then. Money is
getting to a more level rate throughout
the country and country bankers may
as well face the fact that sooner or later
they will have to compete with the
metropolitan bankers on all first class
commercial paper. More and more each
year the city banker is offering induce
ments to the town despositor to forsake
home institutions and come along and do
business where accommodations are un-
limited and rates pretend to be always
low. Most of such offers are. refused. but
it results in better accommodations and
.ower rates by the home institution.
In North Carolina, prosperity seems to
be the rule and not the exception. Our
factories and industries of all kinds bear
the ear marks of the advance. The great
majority of banks are making money and
paying satisfactory dividends. Most of
them are conducted upon safe and con-
servative methods, although in some com
munities, competition is so great that ae-
counts are taken from which profit is i'm
possible and which oftentimes show loss
by reason of the large volume of out-of-
town checks handled without charge. An
other practice / regret to note is on the
increase refer to the paying of interest
on time deposits. / can't see where such
deposits are anything but loss Sup
pose bank has 100000 upon which they
are paving 4 per cent interest? Counting
your average reserve at 20 per cent you
would have 10000 to loan at 6 per cent,
which would give you an income OF $4,000.
You would pay out interest $4,000, and
your expense rate is at least "a per cent
on your loans which would be $500
thus on an income of $4,000 you have an
outlay of $500, or a net loss of $1,000
In estimating the expense feature ] have
figured low. for statistics of several hun
dred banks. with loans from 100000 tc
$1.O00,0O0, show the average to be in ex
cess OF this. / believe the rate on time
certificates should be reduced to 3 pei
cent. as maximum. and even at this rate
there is only small margin of profit.
In the above calculation / have made
no allowance for the loss hazard Wher
you take this into consideration, thu
question of paying interest on time de
posits becomes serious menace to con
servative banking, and one that is en-
tilted to consideration by every bank
that expects to live through adversely
as well as prosperity. No department O
wellmanaged and well-balanced insti
tuition should fail to maintain its pro
portionate part of the general expense
and when this is done still show livine
profit. i know OF banks who strive fo
a large volume of business, irrespectiv,