Finally, some rational advice on bank fees -- from 1909

Red dollar sign on a crack

It's been a wild ride lately with the big banks doing the Hokey-Pokey over debit card fees: You put your card fee in, you yank your card fee out, you shake it all about, et cetera.

In the middle of this clumsy dance, I stumbled upon an online flashback page out of American Banker from a century ago that provided a much-needed reality check. Turns out it's not us -- it's the banks that have lost all perspective.

The headline on the archived article really caught my eye: "Discouraging Deposits with a $1 Monthly Fee."

At first glance, I thought it was a new Bank of America strategy. But no, this was way, way back in April 1909, though no less controversial in those days of hoop skirts and bowler hats.

The uproar was over a small group of New York banks that had opted to collect a $1 monthly fee from customers who failed to maintain a $200 balance in their account. American Banker clearly opposed this move, citing economic conditions that sound remarkably like our own:

"The country is not prosperous, the recent recession in business, the closed factories, and the unsettled Government position are having their effect upon everyone. The banks themselves are feeling them. They have no such demand for currency that they need to call every dollar. What folly therefore, to add at this particular time even a feather's weight to the slowly returning faith of the people."

Even back then, banks were griping about having to service small depositors. But it was interesting, and strangely reassuring, to read how the banking magazine reasoned with the renegades to back off the fee idea:

"The banker cannot look at the subject entirely from a selfish point of view. Every depositor means that much more confidence, one more friend, and while it may not definitely add to the influencing of larger accounts and balances, it has a potent effect upon the general public feeling toward banking. The depositor looks at the subject from his side and naturally questions whether or not it is fair that he should be required to pay a bank for allowing him to have faith enough in it to entrust his money to their keeping. In other words, that he should pay the bank for allowing him to have some of his own money."

One hundred years ago, banks viewed fairness and public confidence as paramount to their very livelihood.

Every one of them would do well to re-embrace those principles today.

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