Evening star., 1924-06-06
D. C. NATIONAL BANKS
IN RECORD POSITION
Far Outstrip in Growth Similar
Institutions in Other Cities
of Country.
BIG ADVANCE IN DEPOSITS
Essays on Service Versus Serv-
ice" Read at Convention.
BY CHAS. r. SHAEFFER.
Stnff COrrespondent Of The Star.

BY CHAS. r. SHAEFFER.
Staf Correspondent of The Star.
WHITE SULPHUR SPRINGS, w. |
Va, June .6.-National banks of
Washington have far outstripped in
growth national banks of the other
largest cities of the fifth federal
reserve district, and the growth of
these Washington banks during the
period of the operation of the Fed
eral Reserve System has far outstrip-
ped their growth in any other equal
period of time, George F. Seay, COVER
nor of the Federal Reserve Bank Of
Richmond. told the District Bankers
Association here this morning.
Deposits of Washington's national
banks grew from s40,000,000 in 1914
to s101 100000 in 1923. the speaker
said an increase of So1.000,00 or l5o
per cent. Deposits of Richmond's
national institutions increased from
about s39 900, 900 to $92,000,000, or 137
per cent, while those of Baltimore
national banks increased from Ss4,-
600 900 to $131 100000. or 56 per cent.
Washington banks are far ahead of
the ratio of growth of the national
banks of the country generally,
which during the same period was
about lu1 per cent.
Comparisons Explained.
These comparisons, it was ex-
planned, when related to national
banks only, are sometimes affected
by consolidation between national
and state banks, making it difficult
to compare the same things at diff
ferent times.
THE total resources in all your
banks under which the remarkable
expansion from s122,000,000 in 1914
to S251 900, 900 in 1923 is a ratio of
growth of about 1O6 per cent" Gov.
Seay said. Il believe you viii agree
with me when i say that the energy
and activity of Washington bankers
have received a wonderful stimulus
in the last few years. and they have
been crowned with marked success.
The amount of working capital,
including balances in federal re-
serve banks, released for Lending ana
investments in the case OF the aSh-
ington member banks was given as
S120O0,0OO or more than II per cent
of their gross deposits. This cor
responds with 9l2 per cent for Balt-
more institutions
Richmond became a reserve city IN
1914. and was of course required to
carry Increased reserves from then
on. the speaker said. Therefore,
similar comparison cannot readily be
made in her case.
Benefits Washington Banks.
The benefit to Washington banks in
this particular exceeded that OF all other
banks of the district and the average
of the country at large, Gov. Seay SAID
For some reason Washington national
banks were formerly accustomed 10
carry relatively heavy balances with
other banks, an average for nVe years
before the establishment of the Feoeral
Reserve System of more than Il per cent
of the gross deposits. Now they carry
only about per cent, about y per
cent in reserve balances with the fed
eral reserve bank and a little over
per cent in items in progress OF coHec-
ton"
Gov. Seay called attention that Wash
ington banks are now operating WITHIN
their own resources-that Is, they are
not borrowers The total amount at
present under rediscount IS less thah |
$4,000 while their basic lines are
nearly S12,0O0.000. In times past, how
ever they have borrowed nearly up TO
their basic line, which is, or course
justifiable when occasion demands.
"A review of operation makes II clear
that the Washington bankers are en-
titled TO be congratulated the speaker
concluded.
Selected Essays Read.
Delegates TO the convention today us
tened to the reading of the three essays
on bany Service Versus Service" sub
mitted by members of the Washington
CHAPTER American Institute of Bank
ing These essays were adjudged best
by a special committee appointed for the
purpose. the authors of the papers re-
ceiving complimentary privileges of the
convention.
Essay by J. ID. Yerkes.
u Of IA l.
American National Bank. in his paper,
charged the banks render too much serv-
ice gratis-or charge too small a Zee
for such service. In substantiatinS this
he pointed out that for the year June:
1922, to June, 1928, national banks OF
Washington showed a net increase in
capital, surplus and undivided profits of
s639, 900 and paid dividends amounting
to SS40,100, making total OF Sl,4I9,-
ZOO of profits for the year On the total
invested capital for the period the in
come Was equivalent to 1855 per cent.
On capital, surplus and undivided profits
it meant 7.45 per cent average return
per bank; on deposits 1.37 per cent ana
on total working funds l.l6 per cent:
IF capital, surplus and undivided
profits were invested to return per
cent" the speaker continued, the return
upon deposits would be 81 cents per
500, at ) per cent the return would be
67 cents and at per cent the return
Time to Analyze Service"
when conditions are such that
bank must employ force of people to
operate its business, assume the risk
and responsibility contingent with bank
ing and receive net return of SO cents
upon each 500 that has remained in the
institution for year, then the time has
arrived to analyze the service, correct
the faults and begin to realize and re-
it1Sf CnnnpnSatlOnS
due"
Correction of these faults, accord
ing to Mr.. Yerkes, could be accom-
plished, in part, as follows:
be charged for time necessary to
oomplete collection of item
The collection department should
charge 25 cents per payment, re-
gardless of whether payment is made
The minimum interest upon dis
counts to be one dollar.
The maintenance of balances for
checking accounts or service charge
should be sufficient to make the ac-
count attractive to banks.
These corrections, the speaker ex-
plained, would not be penalties, nor
would they be costs for the poor
man. On the other hand they would
represent expense .2n to the e.1sins 6anK Ior Tor
Dor involved to warrant service
that the depositor expects.
Service "KeynOte of Success"
w. M. Seay of the same institution
and author of the second paper stat
ed the age is upon us when service
sounds the keynote of success, even
as the absence of it spells failure
for individuals and corporations
alike. The public of this day and
time, he said. will pay more for serv-
ice than anything else. Without it
great hotels, railroads and industries
of all kinds could not exist.
Mr.. Seay urged a continuance of
the high standard of service that