The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1914-08-15
The Banks and Their Deposltors.

Ihere are a few plain things which
the people who have money in the
banks, more especially in savings
banks, should understand The banks
are asking 80 and 60 days notice be-
lore paying deposits in full as a
measure of self protection and also
IN the interest Of the depositors
themselves. It is wrong to think
bank can or should pay on demand
all the money it owes depositors.
. L it could do that it would be a
warehouse and not bank and would
not be able to lend money or to pay
interest on deposits.
On the contrary, il it.Wera a ware
house the depositor would be required
to pay for the privilege Of putting his
money IN a safe place, just as he
has to- pay for the use of a safe de-
5posit box. That is the kind of an in
stltution a bank would be If it were
IN a position to pay out at once all
the money it has taken in.
Suppose bank be started and
have s1,000,000 deposits. Being
bank it undertakes to serve the com
munity by lending out a part of this
5, 100000. It may lend s750,000 OF
this sum to those in need of credit
TO carry on business. It accepts the
aotes Of the borrowers and may az
So have additional security. These
aotes are presumed to be as good as
money loaned on them But when
the bank has loaned $750,000 of its
81 1,o00,0 600 deposits to borrowers it
mas placed the money out Of its own
reach for thirty days, sixty days.
ninety days, or possibly six months
That s750,oo0 cannot be returned
10 depositors until it has been paid
back to the bank by the borrowers.
That is the reason a bank cannot
pay every depositor on demand all
the money it owes him. When all
the borrowers have repaid their
loans, then the bank can pay its de-
positors III full
The usefulness of a bank lies in
is ability to lend to John Jones to
help him in his business the money
which John Smith does not need in
mis- and has deposited in his bank.
The money loaned to John Jones
brings in sufficient interest TO ena-
Die the bank to pay 8 per cent inter-
est on savings deposits. In ordinary
zines 10 per cent in cash of a say
.ngs banks deposits is sufficient. It
IS only when people become scared
and all rush to their bank to get the
money that cannot possibly be there
that 10 per cent in cash is INSULT
cient.
Requiring sixty days notice before
paying out savings deposits ena5les
a bank to collect at least 81 part Of
its outstanding loans.
But in panicky times the sixty
lays notice serves a still better pur-
pose. It is a guarantee that every
depositor will be treated alike. No
one can go to the bank ahead of you
and get your money, nor can you go
to the bank ahead of any one else
and get his money. The money OF
all is kept safe and all are treated
alike
This should give the greatest de-
gree of confidence and comfort in
stead Of creating disturbed state
OF mind.-Chicago Tribune.
The band concert in City Park
Wednesday evening under the aus
pices Of the Civic League was a most
enjoyable affair and attracted a
large crowd Of music lovers to the
pretty playground. The weather was
delightfully."- cool, and the popular rag
time and operate selections rendered
by the crack Peerless braes band,
under the skillful leadership Of C1ai-
borne Williams, We're greatly enjoy.
ed by the interested audience. In
connection with the musicale light
refreshments were sold by the la
dies of the Civic League for the bene
fit of the fund to continue these
open-air entertainments throEghou
the summer. All the good things OF
hand We're disposed of, the neat sur
OF S25.81 being realized.
The great South Louisiana fair i
less than two months off, BETTER he