The Bingham County news. [volume] (Blackfoot, Idaho) 1918-1930, 1923-04-06


Of articles explaining just how
Of these, which make mighty
The bank plays such an essentia
part In the life Of every communit
that every one ought to have . clea
conception of what It IL, and why
goes hand in hand with human prog
ross. Ono Of our large city bankers
whose boyhood had been spent in I
small town, was recently telling SOM
friends about his early ideas con
corning banks. To his youthful mind
the town bank was merely a larger
model Of the small dime bank he kep,
ct homo. He believed that the larger
bank was just good, safe strongbo1
IN which people could deposit their
money. Each day the boy saw people
leave their money in care Of the
bank, the duty of which he supposed
to be the protection Of the money I'M
til 1t was again needed, when the de.
positors could draw 1t out.
Very soon certain things began to
puzzle this small boy, for he knew
that the officers and clerks Of the
bank were drawing salaries. One day
he asked his father some questions
about the bank. The boys first ques-
uon was: Father, If q man takes
. hundred dollars to the bank today,
can he 80 to the bank tomorrow, and
draw 1t all out again?" Every cent
Of It," said the father. "Then," said
the lad, 81 want to know how q bank
can make any money for itself, and
pay salaries and other expenses"
The father gave the following an
Swer:
when our bank was organized,
the gentleman chosen as presi-
dent, because he was one Of our
leading business mon, asked me to
buy some shares Of stock at one hun
dred dollars each. had hoped for Z
long time that q bank would be or
ganixed in our town. For years, the
men who were operating the iron
mills had to send to Z neighborilg
city for money to pay their employees.
Our merchants had always had din
Guilty In taking care Of the money re-
csivsd in their business, and there
had been NO place to care for the peo-
pies money. I was glad to buy some
Of the shares. In 4 short time, the
president told me that fifty thousand
dollars had been paid in by different
people Of the town buying shares.
This money made up what Is called
the capital stock. The capital stock,
IN addition to furnishing money with
which to start q bank, also serves as
q protection to all those who place
their money on deposit.
How Banks Operate
"The bank opened for business and
soon deposits came IN from mer-
chants, manufacturing plants, farm
srs, churches, lodges, and other or
borough and township
treasurers, wage earners, and women
and children, until at the end Of the
drst month about one hundred thou
sand dollars had been deposited. The
bank then had fifty thousand dollars
Iupplsd by its stockholders and one
hundred thousand dollars which be-
onged to its depositors, or total Of
,ne hundred and fifty thousand dol
ars. The capital stock and the de-
,osits are referred to a. liabilities Of
| bank.
Nov listen closely" continued the
ather. "WhIIe II 10 true that the de-
,osIters could 90 to the bank the
,ery next day and draw out all they
lad previously put In, experience has
III swn that this 10 never done by all
leposItors ut the Same time. There
ore, the bank does not need to keep
n hand all the money that is brought
n, but only enough to pay those who
nay wish to draw out part, OF all, OF !