Evening star., 1935-06-15
BANKERS TO KEEP
SERVICE CHARGES
State Groups Find System
Works Well and Expect
1t to Spread.
BY EDWARD C. STONE.

b1 EDWA u
That the service charges adopted by
q great many banks all over the United
States are here to stay, are working
well, are being constantly perfected
and will continue to include more and
more banks are among the conclusions
presented at annual meetings of vari-
GUS State bankers conventions. In
discussing every angle of the banking
business, especially the problem of
MANAGEMENT, the service charge has
come in for a good deal of special at
tention.
One of the most complete and inter
esting reports was presented at the
annual convention of the Kansas
Bankers Association. at Topeka. by
E. S. Woosley of Louisville, KY. He
presented the results of clinic" on
the subject, which is of special interest
to this city, where the measured service
charge has been in operation for long
time in all the banks. He said in part:
Not a single bank regretted the in
stallation of service charges.
Accounts lost were typified by the
bank which lost 200 accounts amount
ing to total of $1,000.
"It was found that the average an
nual income from such charges ranged
from $4,000 to $4,000 per million dol
lars of checking accounts.
I'm some instances the service
charge income is running up to $4,000
per million.
Hundreds of banks are paying their
dividends from service charges.
Deposits Have Increased.
TIN every instance deposits have in
creased.
I'VE have found some large busi-
nesses declining to keep deposits in
banks where there is no system of
service charges. They say it indi-
Gates bad management.
at was found that large active ac-
counts sometimes pay so per cent of
the charges collected. In our bank
we found accounts with ledger bal
ances of 100000 and over showing
losses running up to 5000 per month.
1T was found that the measured
charge is the most acceptable sno the
only fair and scientific charge.
In practically every bank, charges
we're installed with little or no addi-
tional expense.
We were convinced that the whole
service charge program is in a process
of evolution. The lob is not done with
the installation OF such a program
We finally came to the point where
such charges will be standard and
based on factual cost findings"
Large Capital Advocated.
Iowa bankers were told by D. w.
Bates. Ohio superintendent Of bank
ing, that no new banks would be
allowed in his State with less than
SIS 900 capital. He also said further
reductions in interest or savings ac-
counts would be necessary until bank
earnings improve.
The Iowa association urged an ex-
tension of time py the Reconstruction
Finance Corp. Tor the retirement of
preferred stock Reduction of interest
to 2lA per cent was also urged.
Indiana bankers renewed allegiance
to the dual system of banking and
passed a resolution opposing nolitical
control of banking as feared by sug-
gested changes in the Federal Reserve
System
Bankers in Ohio were asked by Pres
1dent Wellman to forsake their former
aloofness on public questions and
speak out loudly On all matters per-
tanning to finance.
Low interest. rates have been de-
plored in many of the resolutions.
While the Government has saved very
large sums by Iefinancing at lower
rates the investor has been forced to
switch to lower and lower yields, to his
great disadvantage, the resolutions
state. While scores of other Opinions
and resolutions might be cited, these
show general conclusions regarding
some of the biggest problems N the
barking world.
Mortgage Firm Pays Dividend.
Directors of the Real Estate Mort
gage IL Guaranty Corp have declared
a dividend of 2 per cent on the out
standing preferred stock, payable
June 80 to stockholders of record
June 20. The company's preferred
stock Is listed on the Washington
Stock Exchange, the last sale being
made at 4, the market closing yester-
day with ga bid and Az asked.
Thomas P. Morgan, Washington
agent of the Mutual Life Insurance
Co. of New York, recently received
word from the home Office regarding |
what Is said to be the oldest mutual |
life policy issued by any company in |
the United States. 1t was issued on |
May l, 1855; on the life of Henry
Bull, and had been in existence 80 |
years on May l. The insured now
lives in New Jersey, was IL years old
when the policy was written and is
now well toward 90 years of age.
Several Washington banks reported
today that they had received a good |
many requests from holders of First |
Liberty Loan bonds, which are being
redeemed today by the Treasury, that |
the collections be made for them by
the bank officials. Many patrons said
they had entirely forgotten that the
First Liberties had been called and
would have lost considerable interest
II the matter had not been called to