St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-16
TO ACT AS A UNIT.
Clearing House Certificates
to Be Issued to New
York Banks.
This Will Make Available a
Vast Amount Of Uncup-
rent Assets.
Burden Of Accommodations
Will Be Distributed More
Equally.
Short-Time Paper Being Sent
to New York for Re-
discount.

New YORK, June 15.-The clearing
house association this afternoon adopt
cd resolution that committee OF five
he appointed to receive from the banks
members of the association bills re-
ceivable and other securities to be APP
proved by said committee, who shall be
authorized to issue therefor to such de-
posting banks loan certificates bearing
per cent interest per annum, and such
loan certificates shall not be in excess
of rs per cent of the market value
of the securities or bills receiva-
BILE deposited, and such certif-
Gates shall be received and paid i'll
settlement Of balances at clearing
house, and all the rules and regula-
tons heretofore aG opted in the issue
Of such certificates shall be in
force in the present issue. No clearing
house certificates have yet been applied
for. The loan committee of the asso-
citation, of which President Frederick
d. Tappan, of the Gallatin National
bank, is chairman. will meet tomorrow
morning to receive applications. The
certificates will be supplied in Demon
nations of $4,000, $4,000 and $4,000.
The previous occasions on which GER
tifcates were Issued and the amounts
were: 1873, $26, 800, 900; 1884, S25, 100000,
and 1890, SIG, 500, 900.
Reason of the Issue.
This action was taken to enable the
New York banks to give their country
oil hn oicta
ble OF course. the duty of the clearing
house banks are to themselves and their
own customers. And it was virtually
decided that all three interests would
derive the greatest benefit from
the resources on hand if the
banks should act as unit in their
efforts to restore confidence. The New
\ ork banks as whole do not propose,
however. to act single-handed in their
efforts to conduct the business of
the country with minimum of
friction. They will, it is under
stood, endeavor, through the manifold
channels at their command. to persuade
the banks at all other important reserve
centers to adopt the same policy that
they favor. The end in view can be OBJ
tanned only by the issuing of clearing
house loan certificates. That would
make available for use between banks
a vast amount Of perfectly good assets
which are now uncurrent. In word,
it distributes the burden of accOnmo-
dation among the banks so that the en-.
tire clearing house practically acts as a
unit in relation to borrowers.
1t is learned from number of trust
worthy sources that there is no specific
reason for this action that is, no par
Ia. no
port and cooperation OF the clearing
house as a whole. The course referred
to is advocated simply OH the
Grounds OF Public Policy,
and with the view of anticipating any
strain that may develop. The last time
clearing house loan certificates were
taken out was during the Barring
trouble, and then the example of the
New York banks was promptly followed
by Boston and Philadelphia, but Chi
cago, which is just now particularly
under pressure, did not pool its re-
sources.
In the opinion of the most sagacious
and conservative bank officers of this
city, long step towards the restoration
of confidence will be taken if every
clearing house center would at once de-
eide to issue clearing house loan certifi-
Gates, even though the actual taking of
them out should be deferred until the
demands upon them compel such action.
This course would virtually make each
clearing house group Il single bank OF
discount, and would thus distribute the
burden of accommodations to business
more equally than at present and en-
able institutions that might be tempo
rarily short of cash to obtain it from
their neighbors without attracting
attention OF creating distrust. The
adoption of this policy would. it is
believed, result in an easier money
market throughout the country. 1t Ger
tainly would put stop to the scram~
bling of every institution to secure
greater supply of cash than its neigh
Dor.
Demands From the West.
Speaking of the money stringency
and the shipment of large amounts of
currency, particularly to the West and
Northwest, the president of one of the
larger national banks said to reporter
today that the demand from the country
banks for rediScOunt was larger at
present than at any time in his long
experience, and particularly from banks
i'll the Northwest and West. The de-
mand was ensral, however, and eX-
tended from The Pacific to the
Atlantic. 1t set in, he said, nearly
three months ago, and has gradually in
creased until it has assumed its present
large proportions. AS, however, the
banks which were asking for redis-
counts this week were sending in their
shortest time paper, paper maturing in
a month or six weeks. that was regard
ed as an indication that the country
bankers did not expect the demand to
last much longer, and it was therefore
hoped that it had reached its height.
The demands from the South, it is said,
were only such as were expected at this
time of the year, and were not unusually
large. There had been
Fewer Failures
in the South, it was said, than in any
other part OF the country. and some of
the large Southern cities were not ask