The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1916-08-17
SOME BANKERS MAY
CHARGE TO HANDLE
SMALL BALANCES
Most Institutions Have no
Set Rule About Taking
Small Balances
w. P. G.. HARDING
HIGHLY REGARDED
Birmingham Man, Now Governor, Is
Given Much Credit for Making
Reserve System
Success
BY HOLLAND

minimum amount acceptable to his bank
was by any one who desired to open an
account with the bank. He was told that
some of the New York banks did not
care to open new accounts unless there
were deposited sometimes as much as
$4,000 and in the case of one bank more
In reply, this great authority said that
there was no minimum amount named by
his bank to any one who desired to open
an account with the bank. The bank
might accept as small an amount as 81 to
open an account. 1t all depended upon
the man. He might pc customer who
not having himself command of large
funds, nevertheless would be influential
in bringing important business to the
bank 1t was a matter of discretion and
good judgment, in the opinion OF this
expert.
In order the better to explain his views,
he spoke of one or two cases where mis-
takes had been made by bank officers
either in refusing to open new accounts
with small deposits or in intimating to
depositors that their balances were not
profitable. One of these cases is likely,
he said, to become traditional in banking
circles. 1t was intimated to a depositor
that his balance, which averaged about
$500, was not profitable. Probably it was
not, so far as the earning power of this
small balance was concerned, but the de-
positor was associated with those who
commanded great capital and large funds.
OF course, he closed his account and
within year it was known to the man.
ayers of the bank who had objected to
his account because it was so small that
he had been influential in bringing very
large business to other banks
From Boston, and, in fact, other parts
of the country there have come within a
few days limitations that some of the
bankers are contemplating either request
ing depositors who have small deposits
less than $300-to withdraw their accounts,
or else to inform these depositors that
they would be charged a small amount
for carrying charges.
AS 1T WAS IN GREAT BRITAIN
Were depositors who carry small bal
ances informed that they would be
charged for that service, then there
would be in the United States adoption
of policy which years ago prevailed in
some parts of Great Britain. For it was
tn ecustom of bankers there to exact a
fee from their depostors so that thereby
they could make the account profitable.
This movement seems to be the reac-
ton from a tendency that prevailed some
years ago which encouraged the opening
of small accounts. In New York city
this tendency resulted in some remarka-
BILE successes. When the friends of the
late Thomas c. Acton, after his service
as assistant treasurer of the United
State at New York was ended, under
took to find some employment for him
which would yield him a rea sonable in
come, they at last decided to open a bank
under state charter near the Metropolis
tan opera house and in the theatre dis
trict of New York. They announced that
they would welcome accounts no matter
how small the amount. They figured that
if they got large number of depositors
whose balances were small the aggregate
of these deposits would be sufficient to
bring profit to the bank.
Their reasoning proved to be sound
Some 5000 accounts were opened within
a year or two, many of them with bal
ances of less than $780, 1t was found that
a majority of these depositors did not re-
duce their balances by checking out Ul-
timately the institution was sold to a
would-be banker who was trying to Gre
ate a chain of banks, the stock COM
price which brought hand
some profit to the organizers of the in
stitution.
When William H. Vanderbilt and Will
liam r. Grace, at that time mayor of
New York. with others, organized
bank whose offices were to be within a
stones throw of the Grand Central sta
ton, and called Thomas L. James from
the postmaster generalship at Washing
ton to the presidency of this institution,
1t was agreed that the bank should en-
courage the opening of small accounts.
That policy was adopted. 1t proved to be
very successful. There were several
thousand small accounts and probably
the average balances of these accounts
were not much over $500, but the aggre-
gate was large and there was indirect
benefit to the bank because the depositors
brought new business to the institution.
The Boston News bureau reports that
in Boston the feeling is general that the
minimum balance upon which interest is
paid will probably be hereafter $1,000.
Nevertheless the competition between
banks to gain new business is now and
has been for some years so great that
1t is not likely that a movement Of this
kind will become general. The American
public Is becoming more and more IA
miliar with the advantages associated
with having bank accounts. Even the
ia rmers of the far west have found 1t
convenient to pay their farm hands in
checks and in some Of the eastern centers
almost all accounts, not only business. but
family, even servants WAGES, dTS pdlQ Dy
check, and it frequently happens that
these checks go to the bank issuing them
or other banks with depositors who carry
small accounts
THE NEW FEDERAL GOVERNOR
There is no member of the federal re-
serve board at Washington. for whom
New York bankers have higher regard
than w. p. G. Harding. His service as
member of the board. especially at the
time of the cotton emergency early in
1915, and his profound knowledge Of in
dustrial. agricultural and banking institu-
lions of the south. are spoken of as hav-
ing been of inestimable service in estab-
fishing favorable opinion for the federal
reserve system throughout that part Of
the United States 1t was therefore with
pleasur that New York bankers. learned
that Mr.. Harding had been appointed
governor of the federal reserve board to
serve for one year.
Crushed Boys Skull
Fort Payne. August 16.-(special,