Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1912-12-10

There is, however, no business
that is so free from mystery or that
is so public in its transactions. The
people themselves, unconsciouSly,
perhaps, but none the less practically,
trust the banker as they trust no n
else in their business dealings. Rich
and poor, widow and orphan, entrust
to the banker, without asking a penny
Of security, their earnings and saw
ings. Such confidence as this cal
only be gained through faithfulne5s
to his trust on the part of the banker.
Banks are necessarily ~altruistic in
stitutions, because they can prosper
only when others prosper, IL they
must, therefore, help others to pros
per. Their success depends upon the
business success of their patrons.
Banks do more for nothing than
any other institution outside of char
liable enterprises. The disposition to
insist that banks pay a higher rate
of interest on their deposits arose
out of a lack of knowledge Of saft
banking methods and of how banks
earn money. Those who thoroughly
understand the banking business, like
l llAG COliiPL1 ~ VI IL AZ 0AA0
the commissioners of banking and in.
~surance, are continually d%eploring. the
high rates of interest paid by banks
on deposits as likely to lead to spec
ulative investments. The bank that
pays a high rate of interest for its
deposits is bound to get a high rate
of return upon it's money and thus to
take a risk which may endanger h
safety of it's depositors.
Banks Wonderful Service.
Think for a moment of the service
which a bank renders g patron. He
| deposits his money for safe keeping.
The bank guards and protects it n
returns it to him on demand; or per-
haps, at his request, sends 1T to Chi
cage or San Francisco, without ex-
pense to him.
If he wants to pay a bill in Boston
or New Orleans or Philadelphia or
New York he simply draws a check
and the bank pays that bill to his
| distant creditor, gets the receipt,
enters it upon the depositor's bank
book and returns it to him without
| expense. II he did this through an
express company he would pay
charges of expressage according to
the amount of the service.
Some years ago a statistician figured
up the amount which the banks saved
to the consumers of this country in
the way of exchange charges in the
payment of the bills from New York
to Chicago and Chicago to New York,
| as compared with what those charges
would be if the money had to be sent
back and forth by freight or express,
and the figures totaled into the nun
dreds of thousands.
A bank keeps the books and ac-
counts of many of its patrons, the
record of their deposits and payments
being a record of their financial
transactions. This saves the patron
the expense of a bookl6eeper.
1t therefore costs much more TO
operate a commercial bank than itdoes
a savings bank, Upon which, as a
rule, checks are not drawn for the
payment of bills.
Checking System.
In most of the European countries
the checking system is used to a very
| EflAH GXlGHl, 1liIO Lit GAPCAAoCS Vi
bank management are corresponding
" less. 1t is the custom of some of
the banks abroad to charge their
customers for the care of small ac-
counts.
In this country depositors want the
bank to pay them interest for taking
care of their accounts. Ninety-five
per cent. of the transactions in this
country are settled without the use OF
cash-solely through the use OF
checks or notes or bills of exchange
These facilities are furnished tht
American public by the banks al
practically little or no expense.
A bank collects for it's dopositors
moneys due them in all parts of the
country. A customer deposits a LheeR
on San Francisco for $1,000, and as
rule receives immediate credit, anc
probably thinks he has $1,000 in tbs
bank. As a matter OF fact ne has mad'
no deposit at all. He has simply
given to the bank a duty to perform
namely, that of collecting that none.
for him from San Francisco, and tn,
bank must do that, either through
messenger or through its method o
loxchange-a service 1t cannot rendel
without expense, and a service 20
: which, as a rule, it charges its Gus
toners nothing.
I, The services above mentioned ar
rendered by the banks of this count.
to their patrons practically withou
e cost. Suppose for q moment that th'
j banks should all disappear today. ar
then try to think how the bushes
transactions could be carried on to
e morrow, and you can realize wha
I service banks render the countr.
Z without charge.
Bank Interest Due to Competition.
g No fair-mlnded person can expec
the banker to work without prof
my more than he expects the mey
r chant to sell his goods without profit
9 or the newspaper to advertise free D
0 charge.
/ The custom Of paying interest Il