Evening star., 1932-07-14
BANK CHECK TOTAL
REDUCED BY TAXES
Depositors Have Cut Down
Withdrawals to Avoid
T Federal Levy.
BY EDWARD C. STONE.

While in effect less than month, the
two-cent tax on checks has now been
operating long enough to cause reduc-
ton in the number of checks drawn on
slocal banks and also to influence de-
POSTS. This was anticipated. the same
Situation being reported from all other
parts of the country.
The decrease in checks being issued
varies in the different banks, according
to statements by local bankers. Some
institutions have noticed distinct dif-
ference in the number of checks drawn
while others report only moderate
change in the activity Of their checking
accounts.
Whatever reduction in deposits has
occurred on account of the tax Is due TO
the fact that many people are carrying
more money in their pockets and pay
ing all their small bills, and many
larger ones. from their pocket funds
In many, perhaps most of these cases,
the money is not deposited in the banks
at all. 1t is simply held back after pay
dayS when the remainder Of salary
funds are taken to the bank.
Two new taxes have made it cost five
cent tax on the check and the three
cent postage on the letter. In the banks
where gas and electric light bills can
be paid, there is great difference in
the number of checks presented at the
window. Most of the bills are paid in
cash Many people are also going long
distances to the gas and electric light
main offices to make their monthly pay
mentS in cash.
The new method of paying bills de-
pends largely on the lndlvldual. HostS
of people are spending great zeal
more than cents worth Of time to avoid
ing the even tenor of their ways and
mailing out their monthly checks, as
they have done for years. "On account
.Ci the saving in time, as we'll the con-
yenience, I shall always pay my pllls
by check, regardless of the tax on the
checks and the higher postage rates."
bank depositor said today.
Saving on Small Accounts.
The banks are saving money on small
accounts that have been very active in
Sthe past. Much has been said by the
banking fraternity about these small
accounts and their cost of operation to
the banks. In many instances service
charges have been applied to force de-
poSitorS to draw fewer checks. Banking
costs have been figured to such a point
othat the expense OF handnng eacn
check is known to a fraction OF cent.
From now on, as local banker said
today, less and less is likely to be heard
about the number of checks drawn by
sdifferent deposltors.
- The bookkeeping involved IN record
ing fewer checks has been cut down, put
this saving has been more than offset
by the added records required in keeping
sthe tax records, charging cents against
every check drawn. entering the amount
on the statement of every depositor, and
forwarding the total revenue to the
Treasury Department.
The bookkeeping end of the levy is
absorbing less attention, the main point
now being the effect the tax will have
on deposits It will take several months
to get an accurate line of this phase OF
fthe revenue tax. Reports from other
parts of the country indicate that OBJ
lection to the tax has developed and
some States associations have already
taken the matter up. Later they may
.ask repeal of the tax.
The District Bankers Association
'took 10 official action while the tax was
being considered in Congress. Bankers
.realized that money had to be raised
from many different sources to balance
.the budget.
AifOIHcI 1Tdut rucctlIlS fldnHoU.
The Banking and Industrial Com
mittee of the fifth Federal Reserve
district will hold another meeting at
the Riggs National Bank in this city
on July 81, with the chairman, Edwin
&C. Graham, of Washington, presiding
Surveys on Federal, State and munich
pal construction will be reported at the
meeting and any steps possible will be
taken to speed up this work. Private
projects and the extension of bank
!credit will also come in for further dis
,cussion.
1t is stated by members of the COM
.mittee that there is plenty of money
available for loans in the fifth Federal
Reserve district provided it can be
steered into the right channels.
Subcommittee are working busily
In Washington, Maryland Virginia,
West Virginia and the Carolinas 10 see
what can be done to help both trade
and industry.
The efforts being made here to hasten
ried on by special committees in the
other II Federal Reserve districts.
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