Evening star., 1924-09-28
BY L. A. FLEMING.


ance on the American Bankers Asso-
citation are debating this week the
matter Of the handling of unprofita-
ble deposit accounts, and in many
sections of the country the same sub
ject is interesting the fraternity.
AT the last convention of the local
Bankers Association, held at White
Sulphur complete analyses of the
accounts of the various local banks
was given to the delegates and many
were the surprises thereat.
1t will also be. remembered that
the statement of one large bank, not
more than thousand miles from
Washington, reported that SO per
cent of its deposit accounts paid 96
per cent of its total deposits, which
might suggest to an economist the
wisdom of eliminating the non-pay-
ing accounts and consistent reduction
in expenses-so that the profits-fur
banks are in the business for profits
might be vastly enlarged.
But it is hard to tell just where to
apply the pruning knife in the matter
of profitable accounts. In large
city there are so many growing ac-
counts, deposits that show steady
accumulation. that it would be ool-
hardy to interfere with growth
that promi es to produce an account
worth having. These accounts are
worth very careful and consistent
nursing along. They will pay
Never ProAtabIe-Dnnge
Then, too. there is the small ac-
count that will never be profitable
but that is always dangerous, and
always costly.
Take the deposit account, and this
one actually existed, where 20 de-
posits were made every three months.
"Overdrawn' was reported every two
or three days and not sufficient
funds" stamped on returned check S
with almost painful regularity-an
account that would not be allowed in
New York or Chicago bank for the
second day. Why not eliminate this
class of business promptly?
Washington is a peculiar city for
the banking business from yet an
other point of view and always has
been. Brothers, sisters. cousins and
other relatives are numerous. many
with fat bank accounts that are well
come. some with small accounts that
are not worth while, but that must
be carried along, forsoothe, for some
relation might feel hurt if it was
eliminated.
Would Avoid Hnrdshipx.
1t is not the intent of bankers in
enforcing a service charge to put
any hardship on the small depositor,
whose account is kept in good or
der, and not too active, with rea
sonable balance and so honored by
its sponsor as to be maintained in
reSpectability.
The intent is to make the Irregular,
erratic, active small account that can
not pay for it's bookkeeping through
accrued interest therefrom. meet its
10 epi a Of he of 10
institution.
One of the larger banks of this city
gave to an assistant cashier the
task of analyZing the deposit ac-
counts. After careful consideration
and a report that startled the direc
tors in the number of deposit ac
counts of the paying order. The
assistant cashier was ordered to com
mence elimination and apply the
remedy-fixing service charge.
A list of 125 accounts. all more or
less active. all more or less dis
honored through repeated repudia-
tion, was submitted to the various Of
ficials of the bank and from the num-
ber % names were stricken as likely
to come through. or where affiliation
made il obligatory.
The other 100 depositors were call
ed to the subcaptain's office and given
d
sity of building up their deposits to
minimum regular balance of 5000,
pending which desired minimum, a
service charge of 81 monthly would
be made. 1t was made plain that
there was but one alternative-if the
depoSitor did not care to pay the
charge or maintain the balance indi-
Gated, he or she might withdraw his
or her balance. There were some es-
pecially Improbable depositors who
were not given any alternative but
the closing of their accounts.
Splendid Results Attained.
The result was a better bunch of
depositors, nearly all, willingly meet
ing the minimum and actually endeav
oring to build up their accounts.
That assistant cashier says: There
is no sense in a 50-cent charge on
minimum deposits. Fifty cents month
does not meet the bookkeeping
expense of caring for such an ac-
count and is not of sufficient inn
portance to impress the depoSitor
with the need of respecting bank
account.
Our second list of 125 is now ready
for submission to our officers and
there will probably be third We
have found that some of our hitherto
unappreciatiVe depOSltorS, now De-
lieve that it is worth while to nave
their accounts in this institution.
Government Workers Reliable.
To the credit of the thousands of
employees of your Uncle Samuel"
they are rarely found wanting in
their relations with banks and bank
ers. Once in while a worthless ac-
count may be charged to an individ-
ual case, but as rule, the Govern
ment workers are careful not to give
trouble and frequently their accounts
grow steadily in Importance.
Considering the enormous number
of worthless checks given in the Dis
trict annually one may rightly Won
der where they do come from and the
only suggested answer, from ire
sponsibles, gives small satisfaction.
Investigation among the banks
shows that the 81 service charge has
been adopted by more than one insti-
tuition, but there has also been intro
duced in the fraternity much more
busine ness-like treatment of the mo
funds depositor and the sneaking
fraternity, in the respectful sugges-
ton, kindly remove your account
from this bank that has been freely
adopted Each account in a bank is
an expense according to its activity,
the cost of bookkeeping and it's pro-
portionate share of the overhead
Costs Difficult to Fix.
While it is a delicate matter to fix
it will be placed the profit, if any,
p.F~