New-York tribune., 1899-03-25
THE CHECK TAX OPPOSED.
FIGHT on THE CLEARING HOUSE AsSO-
CATIONS RULE.
GENERAL BELIEF THAT IT WILL HURT THE
BUSINESS OF THIS CITY. AS WE'LL AS
THAT OF OTHER PLACES.


the New-York Clearing House Association FOR col
lection of checks drawn or out-of-town banks are
10 beco0e operative April 2. As tnat day draws
nearer. the opposition 20 the proposed change ap-
parontly IS becoming widespread and earnest
The country banks" OF course. are opposed TO IT,
as the result Of putting the new regulations in
force will he tn diminish their business But FAR
moro serious matter is the effec. which these
charges VIII have or the business interests ~ New
York City Itself. Tho great department stores FOR
instance. have built mp trade. wHich In tho az
gregate may be called vast. in mail orders y
customer IN the suburbs sees advertised an article
costing dollar or less and writes to order Il. in
closing IN payment q check on the bank IN inc
town in which he or she may live. on this check
under the new regulations. somebody must pay
charge % 10 cents even r. the check be for only /"
certs-and that somebody Is the New-f OK 'liy
house from which the article was ordered or one
may send IN an order for new book costing dol
lar or TWO. or FOR magazine or newspaler SUD
scription and the firm 20 whose order the check ~
drawn must pay the same charge or lo oeh's d
check-a prohibitory rate on such business.
The rates too OF checks of larger size are re-
Eardod by many as opprossivcly high Tor n
stance on checks drawn on banks in Georgia me
minimum collection charge Is one-fourth OF p"'
cent. or e - on S. 90, exchange on NeW-hofK can
he bought IN Savannah az - cents on $l"" Ilo''''
X is understood tnat leading object o. the GEAR
/ !ng House Association IN fixing It's schecuies ''
one-tenth and one-fourth of per cent respectively
for the various groups OF States "a classhcauo" o'
which will be found below was 10 force ou'-o--
town customers OF local merchants 10 make remit
tances by drafts or NewYork. which are prac'lo"l-
~ cash rernittances ard 20 cease sending mere
checks on the banks their several cities oT t'"N''
The present system OF collection OF out-o4-'o""
checks undoubtedly involves consideTao'e expense
10 the Clearing House banks, IN clerical .aoo.' III
postage and in loss OF interest these sums dA7'
eating perhaps 81 10000 year. When country
check is deposited in New-Nork bank III" Gus
toner IS at once credited with the amount '''
the bank itself must lose the interest on 'Ae sum
for the number OF days Il takes 10 ior"ai" '.'e
check 20 the out-of-town bank and co4iecl ''le
cash-somctimes as long as two weeks some ~
The CITY banks for example collect cheeks On
hanks I'm Pcnnevlvaria towns through Philadelphia
the Philadelphia bank RENTING or certain o"'
each week the average time necessary JOY cone
ton being nine days during which the oca' p""A
loses its interest besides having 70 pay a SHlH
collection fee 10 its Philadelphia correspondents
BANKS IN OTHER CITIES MAY COMBINE.
on the other hand in various cities banks coHect
for Nev-York City banks free Of charge che'As
drawn on other banks in their respective ''A',.'''
oe sneclal accommodation In exchange for similar
rc~yces done them Dy the banks here, p"1 4' %
highly probable that such institutions WI" "..,e
forth combine 10 secure for themselves the conli'
sions on the collection OF these checks siNce NV"
York has imposed a charge on thls oi''"''o.''
amount or QepoSllS mere 4Ni'-
sented by country checks is estimated al constant
IL about go 90 ooo and while practically none of
,his sum is earning interest still TINS business j.
the uocessary accompaniment OF q NaSlF I"i-'4
volume Of deposits which do earn srDstan'i'I l''''
est part Of tho latter class being tunds "l- "''
denosit here by the country banks on these l'hds
about uer cent interest IS paid 70 the oui-oi-i'"h
hanks the CITY banks Of course earning nor q Ill-
-lo more by lending the money. The d'p'Siis li
The city banks have increased enormous.y ~ l.e
atei,: and vim The ssils the profits from tlem
to lie banks The income from few miiioh ION
dollars Of these additional loans pa, pa, on on he
creased deposits wnich IL bIsss tuI ar tpaTsaccd hy
cover the cost of collection OF all the od-ol loN'
checks. and it Is a Question Won ON o. 70 tak@ the
chance Of suffering very serious diminuron IN ai,
~ E Business because Of dissatsfac
zion with the new collection charges sou" ' "e
Aiready banks IN Phlladephia. Boston and Ch-
caG1 are UNDERSTOOD 10 haEe HNt,eO -,ii -, iii,e -
Of New-York accounts WIN th.Is' prom. P.'l''-'-
accept country checks e. par ana Var''IS r ee,d
ing ont circulars 20 the banking houses III New
York city that thov Will take their account WI
Of business will make charge Tor COLLECTION. and
that the checks of wei el-recognlzed accounts ca ne
- no, u lT5pSi,nlnria or Boston on account of
collection the amount OF extra labor vlich would
he necessary and the inferior facilities Of tho banks
~ tboso citjes as comnsred with the New-York in
sfitItiors Moreover. Boston and Philadelphia are
'GscTeuonary points. the Nt~-l OK naIE5 not
those cities But II a New-York firm. f. s. pointed
out desiring evade the New-Iork charges
should deposit al its out-of-town checks with say
q Philadelphia bank FOR COLLECTION and hen draw
the money here through its New-1 ork bank. the
Clearing House Committee would probably RET aliate
promptly by compelling ali the CIeaflns rouse
banks 10 charge onepuarter ~ one per cent for the
collection OF all checks on tho Philadelphia inst-
tuition Heavy penalties are prescrlpfd Tor failure
fE any bank IN the Clearing House Association or
any bank or trust company clearing through that
INSTITUTION 20 follow rigdlv the schedule NJ cOlec-
do not clear through the NeV-YOrk Clearing House
and 81 is not improbable that some Of these lnsti-
Associated Banks hy receiving extensive deposits
heretofore lodged with Clearing House Banks
especially as the trust companies Pay interest on
deposits. and even with this concession md their
business so profitable that their number Is
stantlv increasing IN this city.
DISCRETIONARY POINTS
The following are the discretionary points. Bos-
ton Albany Jersey City Ho5oken Bayonne Phgs-
delpha. Providence Troy Newark and Baltimore
on aH points IN these States a minimum rate ~
one-tenth Of per cent is imposed for collection.
no check 70 pay less than 10 cents Connecticut
NeW-Hampshire NeW-York. PENNSYLVANIA. Yer
mont. West Virginia District of Columbia Illinois
Maine, Massachusetts. Missouri, NeW-Jersey Ohio,
Rhode Island. Virginia and Wisconsin.
These States and Territories are 70 pay q mini
mum OF one-fourth of per cent. with az least 10
barna Arkansas Colorado Georgia. Indian Terri
tory. Kansas. Minnesota Montana. Nevada North
Carolina. Oklahoma. South Carolina. Tennessee.
Iowa. Louisiana, Mississippi Nebraska. New-Mexi-
co. North Dakota, oregon. South Dakota, Texas
Washington and the Dominion o. Canada
-
BRING THE BANKERS TO THEIR SENSES
To the Editor Of The Tribune
cfr Z ,~f1a ---G-