New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-12
PRICE FOUR CENTS.
BANKING REFORM.

WHOLE AMOUNT HAS BEEN DEPOSITED
A meeting of the Associated Banks was held yes
terday, at which the report Of the Committee Of
Nine upon Reforms in the Banking Business was
submitted The report makes the following recorn-
mendations:
l. No bank shah pay, or procure to be paid, Interest
upon deposits.
No check shall be certified until the fu amour, IL
| first deposited.
g. Checks upon Associated Banks only rece de-
| post
l. Checks upon places ont OF New-York received At
rates OF discount fixed By Clearing iouse Committee
g. Checks Will be taken at depositors' rsk, and col
| lected through the Clearinghouse.
g. Checks not good will be returned to the depositor
| the day following
The report is supplemented by a draft ~ articles
of association for The New York Clearingbouse As
ISOLATION" which it is proposed shall take the place
| of the old association, and 10 which each bank in
the present association has the privilege Of entering
\ by subscribing 10 articles embodyiDg the above
| rules In addition the report is supplement ted by
the report presented TO the banks March j. 1873 scr
the great panic of 1851, and that of Nov. p. i6D
The report of the Committee of Nine, the fu to2t
of which will be found below, made rbe subject
of debate at the close Of which the following cso-
luton was adopted
Resolred. That the report OF the Committee .
presented be accepted by the Association, AMI printed
copies thereof furnished the members FOR re'eeue
TO their respective Boards OF Directors with the request
that immediate action be taken thereof, and TIA. his
meeting again Thursday. the 2tl in,i., al
O'Clock, for special consideration OF the report.
THE REPORT.
The Committee appointed by the Eew-York CLEARING
house Association, Ito carefully consider and report
what reforms required in the practical operations ~
banks with each other and with the public to
the security Of their business respectfully report That
IN order TO reach the object sought by The resolution. 10
is necessary briefly review the condition and pgdc-
teal working of the banking system in this c.y before
the commencement Of the late panic.
Banks the natural repositories OF the current
capital OF the nation passing into and out 90 actiyo
industry and commerce The balances held ny
them are for the specially reserved ~
their from permanent investment, and
kept subject TO immediate command. They con
stitute a main portion Of the wealth OF the community
which ia not yet ready TO be consolidated iniJtncd
capital or immoysbe FORMS The oustOdians 81 such
funds consequently bound by the very nature II
their trust preserve them in their integrity. aud TO
apply them only in such ways as VIII prevent them
from falling into inactivity. and also hold such pro-
portion in ready cash hand long experience las
proved 10 be necessary, TO meet immediate demands IN
every possible emergency. And it may he confidently
affirm ed that bank banker. who faithfully meets all
these obligations, renders full equivalent .or any
benefits which be honorably derived from The Gus
tody OF such a trust.
No institution in the long purchase deposits
OF money payable demand Of the and at the
time itsefa just aud proper compcnsa-
ton for the business, without violating Of Tug
ditions indispensable 10 the public safety. II must
either use them in ways that egtma.e and peril
Gus. use them in This has been dhunGanily
by innumcrsbe Instances in yenrs pasr ara the
practice paying such deposits unanI-
mousy condemned by the bank officers 1851
the prncpal of the panic that period. the
SILVA In cd NJ hfaba
nexed he reto and to which with the consequent rcsou
tons OF the associated banks. then adopted COM
mittee most respectfully invite attention.
The creation OF many institutions. since fhe iato
civil began, which have considered IT expo cIt
purchase public favor aud thus divert Ia themselves
established channels hes revived she
Of laying Interest upon deposits. ana b., also led
some OF the older banks in seli-leense, TO Weld
or less TO the pressure in tie same direction, vale
has induced Others 10 adopt methods ~ obtaining
patrOna &c equally pernicious
And thus a sharp aud degrading compct.t,oa las not
only prevailed among banks in this city, bot has been
excited a necessary consequence in other places.
where the farreaehiDg enterprise Of Of
cates has led them pursuit OF business. uof from
institutions but from ali classes OF society. Banks
throughout the country have been arouse {" enlist
ia the same destructive practices toward other
and m defense OF their various locauc.
premium has been unnecessarily given Tor bBsi.
ness Which, left Itself would fall without co,i into
it, natural aunels. and ADJUST itself so such Jeaes
as he convenience OF The people aud the beet Interests
OF the country require. without such rivalry the
sources or the nation would be dlfused among tie
banks as to give increased financial strength and ability
TO every part aud only great cause o. mi
tation but add the comfort, efficiency and rrott ~
al. The evil results OF paying Otcrcst upon current
deposits avowed when the internal commerce. OF the
nation conducted upon specie basie, arc greatly
aggravated when it is carried by irreicnicabie
Ma ~
which flows % and the commercial ce;cT Win tie
changes OF the Sach a currency is sgpeT-
abundant in Summer, and instead Of beng then ratur-
ally absorbed and diminished by redemption, dccInu.
ates banks which cannot keep II lie vltJa, loss
OF the interest paid to It's owners Legitimate com
merce does NOT then demand IT, !. Is SIN suhoetto
instant call There consequently NO resource bnt 10
loan IL In Walsr upon stocks and bonds doing Hhrh
so much OF the nations movable capital passes FOR lo
time into fixed and nmoyable forms Of Investment and
its essential character Is instantly changed. Loans
made with facility Ipcn securities which have Strictly
commercial quality, new and unnecessary enterprises
are encouraged, wild specuations stimulated, aud
the thoaghtless and unwary betrayed ntV ruiBgns
operations The autumnai demand finds tie res"nrces
OF the nation unnauraiy diverted from then legitimate
channels. and they can only be turIed Dd'k whh
difficulty and public embarrassment. Sneh has been
our well-snown experience year after year. Inter
est upon money has, as consequence, Gleusted
widely from and 4 per cent per annm II snmmrr,
to Is to 20 per cent the Fall and Winter upon
cal paper and upon stocks at times half even
one per cent a day. Vlclssitudes like these are utterly
destructive TO all legitimate commerce. and
whose operations tend to such eneaJes 10
public welfare. Deposits which derived from
strictly commercial operations cannot 1uctuate
widely from time TO time TO produce disturbance the
community. and banks which confine their business
them, they naturally arise, always reliable aud
regular their treatment Of their dealers, be
with case and comfort TO their