The Washington times., 1926-01-02
BANKS MAY ADD
SERVICE TOLL
BY RICHARD HATTON

WITH more anu - AHStSSCAACOb
the problem of the Improbable &C
count Is forcing itself on the at
tentions of Washington bankers. 1t
is not new problem, either In
Washington or in any other local.
ity, but it is a problem or increas-
fng Importance in those locaHtles,
where it has not been solved.
The Improbable account, nore.
over. is not exclusively bankers
problem. 1t also concerns the bank
customer and, If the customer only
realized il. it is a matter of the
utmost Importance to him as well
as to the bank where he carries his
business.
Fortunately the improbable ac-
count problem is one which Is not
difficult of solution In the first
place, the American public is q
reasonable and reasoning puDhc.
The average bank customer is an
independent, straight forward sort
OF person who can understand
plain business proposition and who.
moreover, is not looking for free
service from his bank or from any
other business source.
Edually as fortunate is the -atti-
tude of large majority OF bank
ers upon this important subject. for
this majority is now uniting to Grad
icste an evil which has long been
one of the most serious drags upon
ethical business practice in bank
ing institutions.
One Way Out
Unfortunately there are a few
bankers in every community who
fear to adopt the only possible cure
for the improbable adHount evil
q moderate charge for service where
an account is so small as to be
unable to pay its way This is
unfortunate because the banking
public is very generally In accord
with the service charge idea and
g. concerted move upon the part~ of
al banking Institutions to adopt
stilis reasonable practice would un-
d0ubtedly meet with the approval
Of their customers. This has been
clearly demonstrated in those sec
tons of the coHngry and in those
large cities where the "un has
been taken out OF 'unprofitable
by a concerted bank move TOR bet
ter business methods.
An example of the reasonableneSs
Of the customer in regard to the
service charge is found in st. Louis
where q service charge for checking
accounts having an average balance
Of less than $500 is levied. This
charge in st. Louis is 81 and con-
frary to the expectations Of many
when the rate was made known
to the banking public there was
very little, if any resentment or
objection registered.
In the case of st. Louis the pub
lie was given the facts in regard
{ othe Improbable account in adj
to the Improbable account OF the
service charge and the public re
sponded to this confidence by nc
cepting the businessIike action Of
the banks without a murInur In
many places in. New England the
same situation exists and the public
and the banks are now working in
harmony in tie matter of Il service
charge to the benefit of botr.
Lack Of Understanding
In a comprehensive article in the
Bankers Home Magazine, Dale Ora
ham. of the Mississippi VaIlay Trust
Company, says:
There is a woeful lack of under.
standing upon the part OF the
public not only upon the subject
Of how banks operate, but also
why they exist ard the important
place they fill In the community.
The average person does not re-
alize that our complicated system
of civilization could not function
without banks"
Possibly this statement is a bit |
broad, but the average American
does realize, when he thinks about
the matter at all, that without the
banks, business would be practically
Impossible and saving would become
q hazardous proposition. What the |
average person does fail to realize |
or to visualize, is the tremendous
cost Of the service and the pro- |
lection afforded him by his hank |
and the source OF the income which |
must be expended in this service.
1t Is not altogether the fault |
OF the banking individual that he
evinces SO little interest in the cost |
OF maintenance of the institution /
wherein he keeps his deposit and
whereon he draws his checks. Many /
times considerable effort has been
expended by the bank to secure his
account and he is Invariably ac-
corded the most courteous and con-
sIderate treatment by bank officials.
He is made so welcome with his
account, be it large or small, that
he gets the impression he is doing
the bank a favor by patronizing it.
This is partially the fault of the /
banker, or of the system of com
petition between banks, The in
dividual. If he be at fault at. all,
Is in error in not realizing that |
1t costs money to run a banking |
business just as it costs money to |
run any other business and the |
bigger and better the bank the |
more the cost of maintenance and
service.
Publicity as Corrector
This erroneous conception can be
overcome and is being overcome |
IN many places by full and frank
publicity upon the matter of the |
Improbable account on the part of |
the banks coupled with the insti. |
tuition BY all banks of a reason |
able charge for service where the |
amount OF the account is below the |
requirements demanded to make its |
acceptance and its continuance by
the bank profitable
Banks in Washington are now fac.
OBSERVATION-DISCLOSURES