Evening star., 1934-05-29
ANALYS|SOF BANK
ACCOUNTS URGED
Addison Tells D. c. Session
Close Study Needed to
Cut Losses.
BY EDWARD c. STONE.
STAFF Correspondent of The Star.


upon much more frequently to pay
service charges when individual ac-
counts fail to yield a profit, was
strongly indicated here today by Fran
els G. Addison, jr., president of the
Security Savings & Commercial Bank,
in an address before the sixteenth an
nual convention of the District of
Columbia Bankers Association. New
methods are keeping the banks more
closely informed as to the profit and
loss status of each account.
Other speakers at today's session
at the Greenbrier Hotel were Merle
Thorpe, editor Nations Business, and
Ralph Endlcott, assistant treasurer
Washington Loan & Trust Co. I'm
portant annual reports were also pre-
Sented, Vice President F. P. H. Sid
dons presiding.
Mr.. Addison in his address on the
Analysis of Accounts" developed the
thought that more and more will 1t
be necessary for banks to analyze the
accounts carried with them by their
customers. Where customer cannot
or will not, maintain balance that
will earn the cost of the service re-
qu1red on that particular account, he
insisted that a fair and reasonable
metered charge should be made.
The Washington banker declared
that the public wants intelligent and
safe banking service, and in return
assumes that in rendering this service
the banks somehow make a reasonable
profit. 1T is, therefore, not the fault
of the public that we now find our
selves in the position of having in
Vlted customers to do business with
us without any arrangement as to
how we should be compensated, if a
customers balance could not earn the
cost of servicing his particular &C
count" Mr. Addison added.
Explains Experiences.
In explaining some of his expert
ences with metered service charges.
the banker expressed the hope that
thi method would be universally en-
ployed and understood by both banks
and customers. The future of COM
mercial banks in no small degree de-
, pends upon the extent to which all
appreciate how vital it is to the well
1are OF the banks, the welfare of their
customers and of the city, that banks
operate at a profit from banking
operations, and are, therefore, sue
ceSSful.
Banks, Mr. Addison said, should be
successful enough to serve their Gus
toners intelligently and reasonably:
successful enough to compensate their
employees and to reward them for their
loyalty and to make it worthwhile for
educated and ambitious young men
and women to seek banking as their
profession, and successful enough to
pay dlVldendS to stockholders. thus
making it possible to attract sufficient
additional capital when a banks de-
poSitS increase.
ATTENTION was called by Mr. Addison
10 the relatively small charge for
hanollng OF checks by banks, COM
pared with the charges of the Post
once Tor issuance of money orders.
quoting from schedule, it was shown
that 1t costs to obtain money orders
IN increasing amounts up to cost of
~ cents for one of from $50 to SlOO.
Thorpe Defends Banker,
In defending the banker against
much of the general undertaking
which has been going on, Merle
Thorpe, editor, Nations Business, said
the banker who lends money and
charges interest is usurer and the
one who doesn't is called a tight-wad
Good management and improved eff
cheney OF bank executives cannot be
supplied by law, he asserted. At one
point in his address, he stated that
the banker should not be expected. any
more than any other man, to FORE
see the unforeseeable, or to predict the
unpredictable, especially where mass
thinking and mass action are con-
cerned. The basic difficulties of bank
ing institutions have been created be-
yond the controls of management
There are but relatively few excep-
tions to this. All over the land, sound
and sagacious men, placing discharge
OF duty before personal profit. have
enabled American banking to weather
a storm of unprecedented proportions.
1t is true that the record of many
banks is not creditable, Mr.. Thorpe
said. There have been losses, but
even these have not been as great as
fervid reformers would lead the public
great as in mar other fields. The
realized losses of depositors since jan
uary l, 1923-more than II years
have been less than 5 per cent of the
average deposits of the banks active
during that periol This is an annual
average of less han one-half of l per
cent of all active deposits. I appre-
ciate that this is cold comfort to the
depositor who has lost all But even
he should consider the picture as a
whole before advocating violent
changes in our banking system.
Cites Good Banks.
America has good banks and good
bankers. 1t is interesting, in our
present state of self-criticism, to note
that very recently there were those in
both Canada and England who were
advocating our banking system for
their countries. There is room for
Improvement, as always, but in seeking
improvement we should avoid making
restrictions, aimed at preventing a
repetition of recent mistakes. that
would hamper the development OF
banking functions so desirable in
normal times. In good times there is
no criticism of banks for giving too
much credit, although, in fact, such
a mistake is usually more productive
o. widespread community injury than
the other extreme Of failing to meet
every insistent demand.
1T is my observation at Washing
ton," the speaker concluded, that
many so-called reforms are urged be-
cause of resentment against the oc-
casional banker. who, by crookedness
or bad judgment, has brought ruin to
his institution The desire is to pun
ish bankers quite as much as it is to
safeguard banks. Such a motive is
scarcely conducive to sound banking
legislation. Bitter impulses never
write good law"
Endicott Is Speaker.
Savings deposits have grown so fast
that banks are now bulging with them