The Washington times., 1913-05-15
A NEW TRUST COMPANY FOR WASH
INGTON.

With the opening of business today by the Num-
sey Trust Company Washington gains financial In
sttution which starts business with larger capital
than any other banking establishment has ever had
at the time of opening its doors. Further, the an
nouncements which the new company has put forth
indicate that its policy will be to recognize that
money is commodity whose price goes upward with
other things, and that when it is worth more it ought
to bring bigger rate of interest to the depositor
| As prices of other things are high, so the price
of money is high The Munsey Trust Company
recognizes this by announcing that it will pay per
interest daily balances of checking accounts,
and per cent on savings accounts. These are higher
rates than have been paid heretofore in Washington.
Yet the management of the new company calculates
that money is worth these rates. Beefsteak, butter,
everything else, pretty much, that people buy
is worth more than it used to be- People who want
them have to pay more for them Why, then, should
not the people who want money pay more for it,
also?
A banks business is to gather together the small
amounts Of liquid capital into large aggregates avail
able for large operations 1t makes its profit out Of
the margin between what it pays for the deposits,
and the rate at which it loans them out. When the
going rate for money rises then the depositor should
have his share of the advance.
II you were farmer with hogs to sell; and If
hogs we're worth So in the general market; would
you be disposed to accept S6 merely because 4 GER
tain dealer had never paid more than S6, and felt
that sound conservative policy dictated that he
shouldn't go over that figure?
Then if you have money to deposit, and general
financial conditions make that money worth and 4
per cent, why should you take less?
That is the theory on which the new Munsey
Trust Company proposes to operate 1t is going to
divide with the depostors, who after all are the real
backbone Of q bank.
Washington is an over-banked town. No doubt
of that. But the new Munsey Trust Company, with
100000 paid-up capital at the outset and with
the purpose of making its business profitable to its
customers As well to ITSELF with total response
bility, its stock, of $4,000 900; with connections
and facilities which insure the best methods, the !
fullest capacity to accommodate its customers; the
new company starts in the fullest confidence that for
this Sort Of institution there is plenty of demand
and plenty Of room in Washington.
But what means even more to the depositor than
the rate Of interest is that this trust company
will give depositors full measure interest.
That is to say, with its system of figuring interest
on daily balances, 8 per cent will mean per cent
and per cent will mean 4 per cent. Figuring
interest on daily balances means the average daily
balance for the month, not the lowest balance on
any one day Of the month The Munsey Trust Com
pany will compute interest on dspostors' accounts
on this average daily balance.
The custom in financial Washington, as We un-
derstand it. is has been to figure interest de-
positors checking accounts, on the antiquated meth
cd of taking the lowest days balance Of the month
Is the amount on which interest is allowed. This
system cuts great broadsdes in the interest rate. 1t
may cut it in half may reduce it to q quarter or
to three-quarers Of the supposed interest earnings
JUDSON c. WELLIVER.