New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-06-16
CLE1PING house CERTIFICATES.

The issue OF Clearing House certificates
would not be considered by the banks OF this
CITY without serious reason. They best know
what reason EXITS. They are fuly aware that
the step involves grave evils and risks. and
they can best measure the evils and risks which
if is intended 10 avoid. The undertaking to
issue certificates representing accepted assets in
lieu of cash is qualified suspension Oi pay
ments 1t is an admission that some OF the
banks could no' pay cash. and that the others
find it safer and wiser fer Themselves 10 pre-
vent the failure of any. TIE many euphonious
names given to this sep such a " po ing Their
issues, or "conSoli 'a:ing their credits do not
alter the fact that it is voluntary support OF
banks Which are weak by others which are
strong, in order t. prevent a strain which might
prove injurious tc all The act of defence is
therefore an acknowledgement Of danger.
Realizing all this fully. sound bankers have
not considered the issue Of Clearing House
cCriiii, atcs it mast be presumed, without grave
reason When this step has been taken here
toforo at the time Of the Barring failure in
1890. ard at the time Of the Metropolitan Bank
failure in 1884. it showed the great power OF
the banks acting in concert, AID then ability
TO utilize for mutual defence considerable
proportion OF their vast assets. IL j. CT no
consequence ID consider whether the aggregate
Of banks is to-day stronger than it was on
other occasions, for the question is not whether
the banks as a body are solvent, but whether
some Of the number are in position to NEE;
needs that may arise. The banks best know
and the high character and great strength Of
4bns "a in
us;no their credit is - the business community
evidence that the power will not be employed
70 uphold concern. that are not worthy Of as
sisancc.
The example OF the New-YCrk banks is
likely to be followed by those Of many Other
cities, because the pressure has evidently been
greater at many ether points than it has been
here In fact the immediate difficulty al New
York arises mainly from the extraordinary de-
mand, which the West has made within the
last few DAYS But for the drain Of S1J,-
OOO. 900 or more from this city, the banks
of New-York would be in fairly satisfactory
position. Chicago has boosted It's ability TO
meet all reverses hitherto without such con-
certed action by its banks but at this time.
with the Worlds Fair in progress and enor-
nous interests dcpcnIlng on It's success, t1c
banks of that city may be mere ready than
they have been at any other time TO act TO-
gether for mutual protection and the proven
ton of financial disaster
This action of the New-Yorl banks haS one
unfortunate side. 1t will undoubtedly be in
terpreted by the more money lunatcs a a
confession that the supply of currency is too
small since even the SOundcst bankers find
themselves obliged 70 create a new form OF
currency for among themselves. OF cour.e
this will be gross misunderstanding of the
fact The trouble here, and everywhere else
in the country, is the contraction of credits, and
not the lack of circulating medium. fhc
banks of this city find it necessary, nlt 20 get
more currency of one sort or another, but T.
provide themselves with means to use rar; Of
their assets as currency. Were the condition
Of credit, such as it was in October last no such
difficulty could arise, and the one change that
counts since that time is not L change in the
character of the currency. hui an enormous
contra ton Of confidence and credits.