The loanable value of the balance maintained must be determined by each individual bank for itself according to its net earnings. It can be arrived at in various ways but, generally speaking, it averages between four and four and a half per cent.

Two cents per check is considered a low cost per item. Mr. F. W. Thomas of Toledo, an expert in banking cost accounting, places the cost of an ordinary check at two and a half cents while he computes a savings bank check at six and a half cents. Mr. Bordwell of San Francisco, figures that a clearing house check costs 1.22 cents and an out of town item 2.7 cents for bookkeeping only. A customer's check costs 3.13 cents, or 2.87 cents if the customer supplies his own check form. A Chicago bank makes its calculations at 1.516 cents per check, but this figure does not include anything for overhead charges, for management, check blanks and other incidental expenses. It is simply for clerical work, rent, light and heat. The other figures are over all.

The English banks not only charge the customer for postage, check books and the like, but expect a reasonable balance to be maintained; generally a minimum of about 100 in the city or 50 in a country branch.

In arriving at the actual cost per item, it is necessary to include, in addition to the cost of clerical work, the cost of the supervision of the manager and accountant, the apportionment of the rent, stationery, light, heat, and vault and safe accommodation; also an apportionment of head office expenses. This involves extra work, but once a basis for per item cost is established in an office, it will serve for the consideration of all accounts for the year. Even if the bank considers only the salaries of the men actually engaged in handling checks and deposits - namely the teller and ledger-keeper - the cost per check just under this one expense, will be found surprising.

It is seldom realized by a customer, or even by the manager himself, that a check form on safety paper costs $2.50 per thousand or one-fourth cent each.

For the average branch in Eastern Canada a per item cost of 2 cents per check is accurate enough for general purposes, or to put it another way, a steady average balance of between 50 and 60 cents per check issued should be maintained. An account, for instance, which issues one thousand checks per annum should maintain a balance thruout the year of between $500 and $600 to cover the out-of-pocket expenses of the bank in operating the account.