| Show On the Home Front Banks Refuse Saving Accounts Suggest Su You Buy War Bonds By James Marlow and George WASHINGTON April 24 UP P P- PA PA A man walked up to the bank tellers teller's window and said I want to open a savings account The woman teller looked at him Im sorry she said but were we're not receiving any more savings accounts Were We're recommending that you ou put your money into war bonds if you want to save it Puzzled the man asked Howlong Howlong How Howlong long has this been going on The woman said it was a long story She told him to ask the manager The man shuffled off toward the manager The manager told him this story the same story that would be told by bankers widely across the country The volume of savings in recent years has been tremendous Time TUne was when the banks could get large interest by loaning that money to individuals for various business purposes But the need for such loans has been declining Government Securities So more and more the banks invested their funds in government government government govern govern- ment securities which paid paid paid-at at a maximum maximum z per cent interest but ran closer on the average to 2 per cent So banks cut down the interest they had paid on savings accounts to 1 per cent in many cases Handling savings accounts involves involves in in- Involves man power which power which is so short now that that banks banks are operating operating ing tug largely with woman power power- power power- and various kinds of clerical detail that costs money So if a bank did accept a savings savIngs sayIngs sav say ings account it would in turn invest invest in invest in- in vest it in government securities Since that is so the banks feel the depositor could save everyone trouble by doing his own investing InvestIng Investing invest Invest- ing in government securities War bonds That's one side of the picture The banks are and will continue to accept demand deposits deposits- checking accounts which accounts which are piling piling pil pu- I ing up money in the ban banks Its Marriner S. S Eccles chairman of the board of governors of the federal federal fed fed- eral reserve system recently told this startling story The nations nation's banks had less than 30 billion dollars in demand de deposits deposits deposits de- de posits at the peak of the 1929 boom After the depression and spurred by the war those deposits started to climb In 1942 demand deposits Increased increased increased in in- creased by 20 billion and this year will go up another estimated 30 billion an increase of 50 billion dollars in two years Back to Circulation Banks with lots of demand d de deposits deposits de- de posits send their cash to the federal federal federal fed fed- eral reserve system and there get credit for it and with their credit they invest in government ties This money gets back into cir cir- cir cir- For instance In the present war bond drive the treasury treasury treasury treas treas- ury will raise 13 billion dollars and spend it in the next two or three months A shipyard worker a an ali ironworker will get paid by his boss who has a government contract for tor which he is being paid out of treasury funds which in turn come from the war bond money The banks make money out of checking accounts those accounts those which charge for handling the checks checks- but many of them feel that they lose money on the savings accounts accounts ac- ac counts Therefore some bankers will tell you they are keeping their doors open now largely as a favor to the public since it is is the charge on the checking ac accounts that pays expenses and the interest the individual bank gets on a government government government govern govern- ment investment is not large All this of course is not true of every bank in the country country- there are of them them for for some of them still accept savings accounts |
