Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-08
BANKING SERVICE
CHARGE DISCUSSED
Modern Activities Necessi-
tate Measured Cost to Gus
toner, Says Executive.
Special Dispatch to The Star.

Special Dispatch to The Star.
ATLANTIC CITY, October S.-The
banker who buys his funds right, handles
his overhead expenses right and sells
his service and credits right will make
money, Fred B. Brady, vice president
Commerce Trust Co., Kansas City, Mo,
told the meeting Of the State bank
division at the convention of the Ameri-
can Bankers Association here. He said
that the increased modern activity in
banks has carried with it a large volume
| of free services which are being handled
at loss and proving great burden to
| our banking system.
Average Account Smaller.
With increased activity in items, he
said, it has been found that deposits
| have not increased proportionately,
! there having been an increase in the
| number Of accounts and likewise an in
| crease in deposits, but the average &C
count left on deposit is below the former
average. Mr.. Brady brought out infor-
nation on this subject showing that
formerly five accounts would total 81 900,
and with IS checks per month issued
against each account, or total OF 10
| checks, whereas now there are about 20
accounts totaling the 1000 ana 20
checks per month issued against each
account or a total of 500 checks-seven
times the former number.
Mr. Brady said that the CHECKING and
collection activities of banks lave de-
veloped during recent years to the point
that the banks are almost overwhelmed,
| customers having been inclined to forge
balances in asking these services. He
cited a recent survey IN Kansas City,
which developed the fact that there arc
IA checks per month drawn against the
average accounts under 500, IA checks
per month drawn against the aver
age account from 500 to 5000 and
Is checks drawn against the average
account of $500-a difference of chi"
one check month between the account
of small, or no balance, and the ac-
count showing a balance of $500.
Our major problem is buying funds
at fair price and selling them at 2
reasonable profit" said Mr.. Brady.
I'VE must find some accurate way of
fixing cost price on our deposit funds
and the expense in getting returns from
the employment of these funds. We
must refine this evaluation to a point
! where it can be applied to any one
depositor-keeping in mind always that
customer whose account has been a
profitable one has right 10 expect that
the bank require every other account
to be likewise profitable, so that the
stability of the bank may be main
tanned and that the bank may always
be a safe place in which to transact
business and an institution that will
lend money to profitable customer at
rates not tempered by The delinquency
Of other customers whose accounts arr
Improbable
Service Charges.
Mr.. Brady said that in placing
proper and measured service charge or
bank activity it is never made with
the idea of penalizing a customer l.
is means Of equalization between Gus
| toners, he said. and it should always
be borne in mind by the banker that
ANALYSIS and charges are means of
education, for every bank hopes each
time charge is made that next month
the account will show an analysis
profit. To do its full duty, he said, a
bank must try every fair means to con-
vince customer that there are certain
requirements applicable to accounts
generally, and then deal with his &C
count specifically, showing nlesHs for
correcting his ANALYSIS loss