The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1925-04-09
BANKS CHARGES
FOR CHECKS
NEEDFUL
D. C. institutions Would Lose
Money on Small Accounts
Otherwise
By RICHARD HATTON.

r. is undoubtedly automatic that
a bank is as much a public service
institution as is any business cor
poration which serves the public.
Banks have become, in fact, sucn
a public necessity that 1t Is I'M
possible to conceive Of the business +.
life of the country functioning
without their services. To the
individual, possibly, the thought
never occurs of what it means to
stem into a bank and have check
cashed or to pay a bill by simply
writing a check for the amount
due. When the money is paid the
matter is closed, so far as the
individual is concerned.
But, the transaction is far from
ended with the cashing or the
check.
The process which covers the
carrying OF an individual account
or the cashing of an individual
check by a bank is, of necessity,
an intricate ana expensive one
when both the bank and the GUS
toner are properly protected.
The individual check passes
through many hands and the &C.
counting operations necessary to
maintain proper records, credits
and debts require the services OF
many efficient officials.
Multiply the individual account
or the individual check by many
thousands a day for every banking
day in the year and slight con-
ception may be had of the tremen'
dous amount Of work entailed In
handling just the ordinary check
ing accounts of banks.
That banks actually lose money
upon some OF the accounts which
they handle will be surprise 10
many people, yet, this is the case
and it is because of the tremen-
dous loss which is possible through
the expense entAned in handling
numerous checking accounts that
some banking institutions in the
country have found 1t necessary TO
impose a small charge for service
or to refuse very small active ac-
counts.
If is quite clear that when an
account on deposit is so small ana
the number OF checks written is SO
large that the bank cannot make
enough money on the loanable pal
ance to pay the cost OF the SER
vice which it must render the
customer the bank is losing money
on that account.
A general expression of opinion
gathered from q number OF WASH
ington bankers is to the effect that
where the average balance Is less
than 800, and the number OF checks
written in each month exceeds five,
the account is carried by the oank
at a loss.
II is hardy necessary to state
no people actually desire to receive
the benefits If banking facilities that
entail a loss, nor to make the
farther statement that it would be
quite impossible for banks to carry
or and perform their important
functions, should the unprofltable
accounts reach a number great
enough to impair the loanable bal
ance of the bank, or the 10 per cent
of the total amount or checking
accounts, and the per cent OF
the total amount of savings &C.
counts which must be constantly
retained as a reserve.
While the bank has a field OF
public service quite as important
as those of the telephone companies,
the light companies and the gas
companies, it has not yet produced
a meter which viii register cash
value for this service to be paid
by those who receive the benefit.
All that the bank can hope to
receive is a small return from using
temporarily and under very def
mite legal restrictions the loanable
balance of it's deposits.
Every banking institution in the
country is anxious to assist the
small depositor. Every bank is
anxious to see the small depositor
become a large depositor.
Bankers are personally interested
in seeing the accounts and the say
ings of their clients grow. There
Is an obvious mutually of advan-
tage in this. But no bank can, in
justice to itself, to it's stockholders
and to it's depositors in general,
H.