$1 Down

Alexander Efron is a strapping White Russian with an appraising eye and a voice as smooth as cream. He was a cadet in the Russian revolution, defended the Winter Palace in St. Petersburg (he never thinks of it as Leningrad), got across the Finnish border with a band of smugglers. Later in Berlin, he traded on the stock exchange, imported Czechoslovak cigaret papers, made a huge success selling Eskimo Pies. Then he went to Brooklyn and entered banking. In 1929, he started in National Safety Bank & Trust Co., rose like spring sap to vice president. Whereupon he invented the CheckMaster Plan for handling checking accounts, a system which has been sufficiently imitated for him to refer to it, with fine Slavic enthusiasm, as "the only major development in deposit banking in the last quarter-century."

Mr. Efron's new idea was really a resurrection of an idea as old as deposit banking itself. Most checking accounts nowadays require sizable minimum balances ($100 up) and banks make their money by loaning out these deposits. But the CheckMaster Plan requires a deposit of only $1, which Mr. Efron makes no effort to loan out. Instead, to cover expenses, he charges depositors a straight service fee--5-c- every time they make a deposit, 5-c- every time they draw a check. CheckMaster is thus the first U. S. example of 100% money banking--a principle advocated by Yale's Professor Irving Fisher because it eliminates the dangers of bank runs since all deposits are kept liquid and because it restrains credit inflation since loans are not pyramided against depositors' cash.

When Mr. Efron launched his $1-down plan, Heavyweight James J. Braddock and a large number of chorus girls allowed themselves to be photographed in the act of opening accounts. In three days, 700 people followed their example. In May 1937, across from its main Manhattan office, National Safety opened a branch devoted solely to CheckMaster accounts. By last week, when Banker Efron and other National Safety executives quietly cut into a cake to celebrate CheckMaster's third anniversary, the idea was an open-and-shut success: the base of deposit banking had been broadened considerably. Sixty-one U. S. banks were using the CheckMaster Plan; 250 more were using similar plans. National Safety had 40,000 active accounts, 35,000 more temporarily inactive, and was collecting $350,000 a year in fees.

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