The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-07-28

New York. and IL was therefore least az
Iected, perhaps of any Of the banks here.
oy the financial stringency from which
we now seem to be recovering. For years
osiore us coming he had been prominently
Identified with the clearing house. and at
the beginning of the depression was sery,-
ing as chairman of its loan committee. The
Importance of this Office cannot be over
estimated Its incumbent Is as powerful in
american finances as the governor of the
Bank Of England in English finances. since
the clearing house bears very much the
same relation to our financial system that
the venerable institution of Threadnee,ile
street does 10 the British
Mr.. Tappen was one of the first men of
the BANKERS Wall street TO appreciate
the situation during the peyilous times of
1915 one day in July he saw that crisis
was at hand; for weeks things had been
going from bad to worse On the day men
TONED he had a chat with President
Sturges OF the stock exchange. Mr.. Sturges
confirmed Mr.. Tappen's apprehensions. He
SAID there was a money famine. Brokers
could not get currency at any cost and
unless relief came from some quarter some
must lie down under their burdens. Mr.
sturges said further, that without such
relief Ii would probably be necessary tenn
porarily TO close the stock exchange. Such
action must have brought about extern
sive runs upon the banks and a general
panic compared with which the real stu
alton at its worst in '93 would have been
almost infinitely preferable.
Few people anywhere have forgotten
that crisis, but few understand that 1t was
largely through the genius the daring and
the endurance of Mr.. Tappen that the
worst results were averted 1t was Mr.
Happen who called the bank representa-
yves IN the clearing house together to talk
over the situation. II was he who laid the
facts before the meeting. When he had
finished this part of his talk he unfolded
a plan of action which he was satisfied
would certainly relieve the tension for the
time being. Concerning this plan nothing
mas ever been said in print before. II was
clear to Mr.. Tappen's hearers that il
would work, so far as immediate relief
was concerned, but its after results could
only be guessed at. They might be of the
most serious nature. Mr.. Tappen agreed
fully with this view and added that he had
another plan which he was in favor of
trying before resorting to the one already
explained. This other plan he then pro-
ceeded TO outline. 1t was the one finally
adopted, providing for the issuing of clear
ing house certificates based upon unim-
peachable securities to such banks as be-
longed to the association. Then these GER
tificates were to be used in lieu of cash in
day. When this scheme, which has gone
into financial history of America as
master stroke had been agreed up
on resolution was adopted unanimously
though after some hesitation, that in case
the issue Of certificates did not answer, the
first plan propounded by Mr. Tappen
should be taken up and put into opera,
ton by the association.
Still another resolution was adopted at
this irnnOrfanf hot gr,
the first plan was not carried out, its ma
ture should never be revealed to the pub
lie, and before the meeting adjourned each
member solemnly pledged his word that he
would never violate the secrecy thus as
sumed. To this day no one has broken
this pledge, nor was it made known until
recently, even in whispers, that there was
a plan for relief other than that for the
issuing Of certificates. and that If the
latter had proven Inadequate, still more
radical measures would have been taken
to prevent a general financial smash.
When the members of the association
were called upon 10 make certificate sub
scriptions. it was Mr.. Tappen himself who
led off with one for half million dollars
worth. thus paving the way for the issue
OF six millions that was provided for upon
the spot 1t was Mr. Tappen, too, who
bore the brunt of the immense labor and
strain the plan involved. During the time
the certificates were issuing he was I'M
doubtedly one of the hardest worked men
in this town He so arranged matters at
the Gallatin National Bank that he would
not have to give its conduct any personal
attention to speak of, and proceeded to
give up all his time to the clearing house.
He is perhaps the best judge of the value
of securities in the United States He
knows them all by heart, and in examining
them is never Obliged to refer to memoir
anda or lists. When the banks began to
send securities TO the clearing house in re,
turn for certificates, he pulled off his coat,
seated himself at a table in his shirt
sleeves and personally went through every
bundle of bonds, mortgages and stocks
that was offered
Hour after hour during many sue
cessive hot summer days, Mr.. Happen sat
at this little table. rapidly running over
the bundles that were brought to him,
while the clerks of the loan committee
wrote out the certificates to be signed
and issued. The conformation of Mr..
Tappens countenance is such that he
has often been said TO resemble Bis
marck, when at his best. In July and
August, 1892 Mr.. Tappen showed quail
ties very like those of the German states
man. The plan and its execution, like
those of Bismarck, were bold in the ex
IRENE, and Mr.. Tappen's judgment, like
-
the event, for the issuing of certificates
stopped the panic as if by magic. and in
due time. as predicted. they were all
redeemed by the banks to which they had
been issued. 1t was an interesting CO.
Incidence that the last of the $39, 100000
worth of outstanding certificates were
cancelled at almost the same moment
President Cleveland signed the bill re-
pealing the Sherman purchasing law.
The workings of the clearing house GER
tifcate plan have often been elucidated.
1t was most adversely criticized in some
quarters at the time, and it was claimed
that the United States government had
the power and was under obligations to in
terfere, yet, when it was remembered
that in effect the scheme was virtually
Identical with the swapping of notes" by
private individuals for mutual protection,
il will appear that the criticisms were
hardly based upon sound reasoning
One member of the clearing house there
was. who, perhaps. because he shared in
the unreasoning distrust of Mr.. Tappen's
plan. refused point blank to take out any
| of the certificates. Tappen urged, and
pleaded, but in vain, and then disguised
beyond measure. turned loose upon the
recalcitrant banker such torrent of Wig
IL y Ha NNH b.