The daily star-mirror. (Moscow, Idaho) 1911-1939, 1923-07-21

lO w dIlQ WHY OclllhS w VI ~.
mighty interesting reading, S
The bank plays such an essen
tial part In the life of ever com
munity that every one ought to
have q clear conception OF what it
is, and why it goes hand in hand
with human progress. One Of our
large city banl ers, whose boyhood
had been spent In a small town,
was recently telling some friends
about his early ideas concerning
banks. To his youthful mind, the
town bank was merely a larger
model of the small dime bank
he kept at home. He be.
lieved that the larger bank was
just good, safe stronghold in
which people could deposit Their
money. Each day the hoy saw
people leave their money III care
of the bank, the duty of which be
supposed to be the protection of
the money until It was again need
ed, when the jepositors could
draw it oui,
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 question was Father,
IL a man takes a hundred dollars
to the bank today. can he go to
the bank tomorrow and draw it all
out AGAIN." Every cent OF it,"
said the father. Then" said the
lad. Il want to know how bank
can makes any money for itself,
and pay salaries and other ex-
pensas" The father gave the fol-
lowing answer;
when our bank was organized
the gentleman chosen as president.
because he was one of our leading
business men, asked ME to buy
some shares of stock at one hun
dred dollars each had hoped for
long time that a bank would be CT
ganized in our town. For years.
the men who were operating the
iron mills had to send to neigh
boring city for money to pay their
employees. Our merchants had al
WAYS had difficulty in taking care
of the money received in their
business, and there had been no
Mace to care for the peoples
money. l was glad to buy some OF
the shares. In a short time, the
president told me that fifty thou
sand dollars had been paid in by
different people of the town buy
ing 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 a pro-
lection to all those who place their
money on deposit.
How Banks Operate
Tho bank opened for business
and soon deposits came in from
merchants, manufacturing plants,
farmers, churches, lodges. and 9TH
or organizations, borough and town
ship treasurers, wage earners, and
women and children, until at the
end of the first month about one
hundred thousand dollars had been
deposited. The bank then had fifty
thousand dollars supplied by Its
stockholders and one hundred
thousand dollars which belonged
TO its depositors, or total of one
hundred and fifty thousand dollars.
The capital stock and the deposits
are referred to as liabilities Of a
bank.
Nov listen closely" continued
the father. "WhiIe it Is true that
the deposItors could 90 to the bank
the worry next day and draw out
al they had previously put in, sx-
perIenoe has shown that this 10
never done by all deposItlrs at the
same time. Therefore, the bank
does not need to keep on hand all
tho money that Is brought In, but
only enough to pay those who may
wish to draw out part, or all, OF !
their deposits. Since every do