The Western news. [volume] (Libby, Mont.) 1933-current, 1940-05-02
Libby Student
Wins Essay Contest
Continued from Page ~

plOSptIOuS times WfleT MONEY ID
steadily being deposited, the sur
plus over the cash resources is not
so much in demand by the people.
The amount of interest that the
bank receives decreases. Thus the |
interest on time deposits fluctuates.
2. From what sources does a |
bank derive its income?
Interest and discount on loans, |
and interest on bonds and invest
/ ments constitute the main source of
income. The larger banks have
trust department in which estates
are handled on a commission basis.
There is small service charge on
money that is sent to foreign coun-
tries. Service charges are also made
on out-of-town checks, bank drafts,
and checking accounts. Commits
sions on loans, insurance, and stock
and bond sales further add to the
income of bank.
g. What are ZONE of the principal
items of expense bank has to pay,
including the different types of
taxes which it must pay?
There are three main types of
expenditures for a bank to con-
slider. The first is the upkeep and
maintenance of the bank building.
Among these expenditures are found
light and water rent, fuel charges,
building repairs, and janitor serv-
ice. The second classification of ex-
pense is that of operation and pro-
lection Salaries, telephone and
telegram, stationery, printing, post
age, filing expense, donations, adj
vertising, legal protection, insur-
ance, official examination, and mem
bership dues to bank protective as
: sociations are the principal items
. under this heading. The third type
of expenditure covers taxes. Some
of the various types of taxes that
: a bank must pay are Federal Capt.
tai Stock Tax, Federal Income Tax,
State Corporation Tax, Federal De
post Insurance Corporation assess
ment and county and city taxes. The
three items that demand the most
money are salaries, taxes and in
{ surance.
{ 4. What is meant by an Activity
! Charge on a checking account2
Checking accounts are really de-
mand deposits. Because the bank
! never knows when the deposition
will want to draw out his money
the deposit cannot be used for the
activities of the bank. This fac
lessons the value of demand de
post to a bank The small active
! checking accounts create much add
" ed expense for the bank. There art
check books, stationery, postage
, and expense of handling an accoun
q which must be paid by the bank
: It is not good sound banking t
4 handle any account at loss. There
! fore a charge, called the "Activit,
q Charge, is levied on all checkin
- accounts. Accounts under fifty dol
= lars are charged fifty cents a month
! Five checks may be drawn free bu
= all over this are charged four cert
! each. This charge is not made 70
/ the profit of the Dank but for bal
:, ance of cost and service.
5. What are some advantages {
: having a checking account in
: bank?
> All through the ages man ha
: tried to make his medium of es
J, change convenient To us now, som
! ! of the commodities that were use
seem ridiculously awkward. Thos
people who adopted these for thei
standards chose them for the pei
lsonal value or for the convenience
IS Our modern medium of exchane
u would have very little personal va
&c ue to us. We cannot hitch our 81
>e yer dollars to a pillow, nor can "
auction our currency as slaves wei
auctioned at one time Every yea
6 new things are discovered for cor
s. venience. In our financial realm
al the most utilized convenience tn;
we have is the check. At any hou
l. in our homes or stores, these checl
IS can be turned into cash. In checl
there is no danger of theft, fl
"a or loss. To person who has
u checking account, all his cash
IN with him, but for the thief the
r is nothing. Another important ia
y, tor in checks is that it is considert
10 a legal receipt. Also, your accou
is computed every month for YOU
convenience.
q g. What are the benefits affor
ed bank depositor by the FEEDER
Deposit insurance Corporation, al
what does it cost a bank to be
member Of this corporation?
The Banking Act Of 1885 create
- the Federal Deposit Insurance &C
poration. This corporation insur
nd depositor's money up to $4,000
p case of bank failure. This insuran
asst covers 50 per cent of all bank d
posts. Besides insuring the depo.
lie tors money against bank failuI
ed the insurance may promote sal
af- banking and less speculation on t
part of the banker. Each insur
re bank pays one-twelfth of per &c
ne on its average deposits to suppe
the Federal Deposit Insurance CT
is poration. All banks belonging
ay. the Federal Reserve System mi
rs. be insured by the Federal Depo