The New York herald., 1879-11-02
CAN STOCKS BE CLEARED?

CAN SlOCkS De CLEARED(
JOINT MEETING OF THE BANKERS AND BROKERS
coMMIrrEEs-How THE PHILADELPHIA sys.
TEN WORKS
In answer to the request of the bankers commit
tee Mr. Brayton Ives, the president of the Stock
Exchange, appointed Q brokers' committee to
fer with the former on the subject of . stock
clearing system. At three o'clock Friday the repre-
sentstives met jointly. those of the banks being
Mr. Joseph D. Fry. president OF the Bank Of New
York; Mr.. Tappen. president Of the Gallstin Ma
tional Bank. and Mr.. Hayes president OF the Union
National Bank. and those OF the stock Exchange
beine Mr. Donald MacKay. Of vermilyea &
Co.; Mr.. Henry Graves. ana Mr.. Henry
Meigs The place Of meeting was the
Bank of New York. The proceedings consisted of
general discussion upon the reasons for and the
diticuties in the way of establishing method for
clearing stocks. The bankers urged the new move
nent on the ground that it would simplify business
for all hands besides reducing the responsibility Of
the banks in over-certincation Of checks. The two
committees were not quite unanimous regarding the
extent of the present danger to the banks.
though all were agreed upon the ex-
pediency of simplifying business in every
practicable way The three bankers appeared sstis-
fed that there method of clearing stocks with
out drawback confusion, but the brokers could
not conceive of feasible plan where stocks were 50
numerous and transactions SO large as they were In
New York. The meeting adjourned without reach
ing definite result of any kind. They will likely
meet again tomorrow. when plan will be
submitted for consideration, modelled upon that
adopted in Vienna. These sessions will necessarily
develop more in the way of information than prac-
tice. since the brokers' committee were not ap-
pointed by the Governing Committee OF the Ex-
change and the bankers committee were not created
by the Clearing House Association. The former can
EXTENT OF cERTIFIcATIoN.
Mr.. Charles A. Megs the National Bank Examiner.
has completed his performance OF the Comptroller's
order, having visited only the sixteen downtown
banks that are convenient to the business Of the
street. Mr.. Meigs said he did not suppose IL
the Comptroller's intention to proceed at
once against the banks which had violated the
a% ana ' suitable length % si%e for a' disoon nS1s
tinuing the practice. After fifty years in
could see seen no danger In the way oersifostion had
been conducted It was to the interest of banks to
do that sort Of business cautiously. and as proof
loss that had ever occurred from the practice. He
said there doubt however as to the intention
troller's actions would have beneficial effect on
the street. Weak operators would. he thought. be
compelled to reduce the extent of their speculaions.
A man. for instance. who carrying 100000
worth of stock on $4,000 would have to reduce his
line to $4,000.
Two banks doing large business with brokers
have acted on the hint from the Comptroller 1t is
thought that all the brokers banks will begin to
ercise discrimination and exact better security
in their dealings with their clionts. The effects
two banks alluded to have thus far boon salutary,
since they retain the customers who have means in
and dispense with those who well enough
dispensed with.
HINT FROM PHILADELPHIA
Among the projects discussed for clearing stock
sales has been the plan now used in Philadelphia,
and claimed by some to be equally adapted for the
ago the President of the Continental National Bank
Edmund D. Randolph. issued an open letter to s. J.
Sc he Of ns
feasible as that Of gold. in the establishment of
which latter was one Of tho first movers. Both
have long been in successful operation in Phila.
delphia, where the dealings. although second to
ours. still Of sufficient volume to afford
thorough test; and the greater magnitude of our
own market makes only louder demand for relief
from the evils of our present system"
s since sho aPPesraoe @ OF TINS open lot
has renewed his proposition. but no favorable ac-
tion taken by the Stock Exchange. Last week
he republished the original letter. "as suggest
ing relief especially desirable in the pres.
ent pressure OF business" The objection urged by
ton t is a that the % transactions in PhaaeipSis,
amounting to little more than the balances
smaller than here the trial in Philadelphia could not
be admitted as a test for New York. Tho HERALD
porter called upon Mr.. Randolph to get idea Of
the system he advocated. and the banker said: "A
gold clearing house was established in PhiIadel-
pbia think. early as 1865 long before New York
stock clearing house was inaugurated two
years later. It originally managed by the
First National Bank, and has passed successfuiiy
through many trials since. such the Hestonvills
Railroad corner for instance. which involved nearly
every operator on the street in heavy loss very
busy days sales there, about equivalent to q days
sales here in ordinary times has been disposed by
that system without the slightest confusion. The
vania Central. for instance to b. @ and D. and has
made purchases from and F. He has printed
balance sheet for Pennsylyania Central transao.
b. G. D. and do the same thing.
The balance sheets 20 to the Clearing House, where
there has to be separate clearance for each of the
principal stocks may have sold more Peunsyl.
vania Central than he bought SO there is balance
due him in money. b may have bought moro than
he sold and thero is balance due him in stock. In
this way as in gold clearing house. only the differ
snces need to De settled 40 not see why the larger
from the same experiment. The larger the business
the greater the necessity for having system Of set
tement.
"BRoKERs WON'T HAVE IT."
The reporter called upon the manager of the Clear
feasible system '" or eearns 70 socks %hsn he oe
tered the Office two bank presidents were discussing
that very subject with Mr.. Camp. One OF the
visitors appeared convinced that such . system
that described by Mr.. Randolph might be adopted
with advantage: but, pshawl' no said. 'it never
afraid somebody will get wind Of their business"
When the speaker left the reporter asked Mr. Campif
he indorsed that opinion and received the answer:-
II believe the objection he named is paramount in
the minds of large operators. Yet," with . weary
smile. 'ft puzzles me to know who in clearing
house could afford time or would have patience
enough to inform himself of another mans busi-
ness in that way" MIR. Camp said q great many
other obstacles presented themselves to the system
demanded by the banks, and while he believed there
must be some method of accomplishing the desired
reform he did not know just where to look for 1t.
He could understand the method of clearing or
two or three stocks separately but when It came
twenty he saw the danger OF confusion and com.
plicRtion.
The Bankers and Brokers' Association, which died
with the failure Of its president. Mr.. Bonner. was
virtually clearing house for stock sales in its orig
nal Device and has often been dragged into the pres
ent discussion by opponents OF any change in the
present methods of dealing. Before that associa-
ton collapsed had relapsed into q simple place OF
exchange. There was nothing TO compel brokers
to settle their transactions through the
cation. and that of the reasons
of It's failure, said bank officer, who
believes in clearing system for stocks Until the
Stock Exchange passes law for its members which
oblges them to send all their transactions to the
1t must be compulsory in every case. it win ro