Evening star., 1916-08-06
BY I. A. FLEMING.

There are many ways in which n
bank may estimate the value Of a de-
posit account and ascertain whether 1t
is a profitable one for the bank or
whether a cost for service rendered the
depositor should be made.
The First National Bank OF Chicago.
soon after the advent Of James B.
Forgan to Its presidency. fixed mini
mum deposit of $500. and an average
necessary for the account to be carried
without loss to the bank.
If this balance was loaned at 5 per
cent it would pay the bank a matter of
SIS, which would be tho compensation
for stationery. bookkeeping entries, a
proportion of police, light and rent and
of all other charges.
If the active commercial account Is a
large one, with good balance at all
times, there is little question of Its
being profitable. If, as frequently
noticed in Washington. the account is
simply for the convenience of the de-
positor in paying his bills by check.
with salary deposited on pay days and
drawn out Immediately or soon there
after with nominal balance simply
continuing the name on the bank S
books, there is no profit in the account;
it is an expense, unless through the
depositor the bank is able to hold other
profitable accounts.
The entire amount of an account to
the credit of depositor cannot be
used by the bank, which is compelled to
keep Is per cent reserves on demand
deposits, and a large amount of cash on
hand for possibilities of each days re-
quirements.
Banks that pay excessive rates of
interest for deposits find it hard to
make good on loans made. Then, too,
there are many items included in in
terest bearing deposits that are not i'm
mediately available as cash, and on
which interest must be paid while in
transit.
1t would be next to an impossibility
for Washington bankers to force their
depositors to keep minimum balances.
so fierce is the competition for de-
posits. but with the imposition of new
taxes and added costs of doing bust
ness, the time may come when some of
the larger institutions will deem II
necessary
Experts from the various regional
banks have agreed to aid bankers in
analyzing deposit accounts and have
mailed literature intended to give this
information.
This action is being taken in prep
aration for universal collection of
which bankers believe will soon be
made compulsory.
Financing the War.
Great Britain has no serious prob
lens to face in furnishing her share of
the millions required for the conduct of
the war. There are still millions of
dollars in American securities which
will be marketed in due time or made
the security for American loans.
When these are also exhausted then
there are 100000, 900 Of various for
eign securities there, many of them OF
Canadian origin, and, lastly, there are
immense quantities of British securi-
ties that have immense value that
might also be used as collateral for
dollar loans, for this is the one coun-
try where the needed millions can be
obtained at reasonable rates.
The French government is paying
holders of borrowed securities 25 per
cent on their net returns from depos-
tied bonds and stocks.
The manner in which these securities
can be handled in this country is read
lily explainable, after the manner OF
the recent French loan made by the
American Foreign Securities Company
which made the loan on the collateral
Then, too, Canada will be in the
American market for refunding opera
tions.
Local Securities.
All things considered, the local Sc
curity market has given a good ac-
count of itself during the past week
With the Senate enacting. in SO far as
possible. a 75-cent gas ordinance for