The Indianapolis journal., 1903-06-21
BANKS AND BANKERS.



Detroit Journal.
While every banker knows that small
checking accounts are more bother than
they are worth, and those below 800 or $500
a source of loss instead of profit, it does not
follow that such accounts are always con-
sidered undesirable. The depositors account
may be worthless, and yet his personal in
fluence may be helpful to the bank. He may
have important social or business connec-
tions who will keep their accounts where he
keeps his. He may be man about town,
with many opportunities to say a good word
for the bank, or he may be a young busi-
ness man whose future is promising and
whose account is expected to grow. There
are many reasons why small accounts are
not always unwelcome.
On general principles, however, such ac-
counts are being weeded out all the time in
well-managed banks. The depositor often
starts out well and fails to keep up the
pace. His deposit falls from a respectable
figure to nominal sum. and then the ques-
tion is how to get rid of him without max
ing him a mortal enemy
Some banks make a charge on business
that remains below a certain minimum.
Suppose l. 400 of your accounts under $500
aggregate $126O00, as we found in the case
of our bank. This would average $50. OF the
S126,0O0 represented i'm these deposits under
reserve, leaving $4,000 all that you can loan
out. If you can keep loaned out all the year
round about $4,000 of this $4,000 you will be
doing remarkably we'll If you get per
cent. on this sS0.000. that means $500 gross
returns from your 400 accounts.
ITO handle 400 accounts will require at
least three bookkeepers at $1,000 a year, and
three statement clerks at 5000 year, whose
aggregate salaries will be s4S00. / will not
figure in the time of tellers and others
whose services ought to be considered, nor
the cost of checkbooks, passbooks and other
stationery. The small customer usually
costs more than the big customer, in pro-
portion to his accounts. He draws lot Of
little checks, which are just as much bother
as big ones.
Charging 81 month on accounts of less
than $500 educates the public to appreciate
OF course, Ii is argued that small custom
ers advertise the bank. So they do, among a
small class of people like themselves. They
do not get big fellows in, but little fellows,
who further increase the loss. The little fell
low may grow and sometime keep with his
bank a decent-sized account, but as a rule
l think the money bank spends in ac-
pay 81 per month, is poorly invested
A certain Detroit bank received a call
from a young man who wanted to open a
SoiiECItidl dSCOuHt. Lc ttitti ItLtiltu
to the cashier, who asked him a number Of
questions about his business. the probable
size of his account, how often he would
make deposits, draw checks, ETC., all Of
which the young man seemed to consider
unnecessary and impertinent. Finally sthe
cashier told him the bank could not receive
his account, and the young man went away
highly indignant. Meeting one of the direc-
tors he complained of the cashiers 'imper-
tinence." When the director spoke to the
cashier about it, the cashier said:
THAT young man is only a clerk In a
store, on small pay. He earns. perhaps, SIS
a week If let him open account he
will deposit his salary every week and
check ii out every month to pay bills. His
average account won't be worth mention
ing. / doubt If he will ever have $50 I'm the
bank at one time, and then only for a few
days. What's his little game? Why, merely
to have the pleasure Of drawing checxs; the
feeling of Importance II will give him and
the impression it will make his landlady
and washerwoman. We can't make a cent
on his account, and the bank will be out
for clerk hire, wear and tear of pens. ink.
stationery, ETC., as well as the cost of the
check book, If we let him have one for
nothing.
You can put it down as a rule" added
the cashier, that no commercial account
is worth taking unless ii never falls below
800. We have made 800 the minimum fig
ure in this bank, and my personal opinion
is that the figure is too low"
1t is inquest iOnably true that vanity
causes most of the applications to open
small checking accounts, although in some
cases the depositor gets a fictitious stand
ing which may help him in business way.