New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-04-30
CASH RESERVE REQUIRED
HOW CLEARING HOUSE RESOLUTIONS
MAY AFFECT NEW TRUST COM
PASIES AND NEW BANKS

ireuiars containing the following important
resolution. which has been unanimously ADOPT
ed by the Clearing House committee were sent
Yesterday 10 all banks members of the New
York Clearing House Association
Resolved. That acting under the authority
given this committee by the aineno Ia - -,
constitution, adopted October II io'o- Hiu ~ -
Their amended December p. 1896. the C4IC H5
issued November G, 1899. be amended 10 fe"u
as follows: ...s az
F,rst-Ho institution snail be permitted 10
clear through any member of this assoeiai ioii'
unless such Institution shall nave pei ~, 90 time
tual operation for at least one year al liio ~
Of making the application ,-o. ~, any,
bank member of this ASSOCIATION u1l u,,sa com
have been examined by the Clearing House 80
,47ttee or some Other committee OF the dsSoo
zion duly appointed for such purpose 100.
Third Every institution which hereafter nc
he rranted permission to clear through 4 HleL
her of this association shall furnlSl q =; +ba
statement of its condition 10 me nlanas - ~ ro1
same manner as weekly statements OF huI
members clearing through this assoelaiioh -
now rendered or in such form as may pe f
ecr,hed nv the Clearing House committee. 60,
Fa',r.4 F,e,,, institution which hereafter
may he granted permission To clear thr9 3 a
member OF this association shan DC =. a.. a.
keen in its vaults such cash reserve - ~ -
,,oei-r as the Clearing House conlfillt't -.
determine. The percentage OF SuNIi - ,orr,e
,.o,re,.er &c NOT 10 exceed that required OF naLhs
members of the Clearing House Asspe'@''''l
THE circular Of November g. 1899. OF winch
.o-o,oi,,,, resolution is an amendment
brought under the jurisdiction OF the SIea',"e
1Io,,.. committee the trust companies clearing
,brorpb Clearing House member or non-1'eiAO'
hanks and provided first. that no trust CUM
many should be permitted TO make suCh C'e''
ance unless il should have been in actual oPel
,ion for at least a year prior 10 'N'
,-s application for the privilege seooiD' mo
examination by a committee Of the S'sN''I-7
r5orse Association should be conoitloh ~
senr n the granting Of permission u
-hro7,rh Z member non-mefllpeT lfS'i~
srd third that every trust company creams
,n-o,,rb = member of the association must FUR.
,,eb - he manager Of the association a "teh's
statement Of its condition. These provisions are
a, 100 .,l,,,os+ identical with those Of the nrst
-. ,.-asrarhs Of the resolution just adopteu'
-. Nv. of difference being that the amend
~t ror,-es 10 bring under the Clearing HOUSE
--,,,ee NOW hanks as well as the trust coInfaIiis
The regulation making il necessary loi an HI
stitutfon &c have been IN actual opera'loh hoi a
1aost a wear before II can apply LOT Iile ''1
s,cA privilege is looked upon in wall street d
,y,al,- 70 rrove TO some extent a oetelieI' "
the rresent activity in organizing ne" oaLf' II"
this CITY as although inconvenience "ouiu IL
-, - ire+,-u+ions dealing with bank not haV-
ing Clearing House privileges ra1hel ma
.ucn bank itself. knowledge Of the TACT tha'
-, a,5 MT have Clearing House relations
would naturally make II dlflcull Ioi lie ~
rurion 10 attract customers
The fourth clause Of the resolution, hoNeNel'
&c regarded as of the chief significance ana Hi
ro-tance II seems obviously directed al Il Us'
companies which may hereafter clear thioNs "
banks Of the Clearing House Assoclalloh' 'U
although trust companies now making suCi'
clearinEs are excepted from its PROVISIONS II le
said that they also may in time pe lhciuue1
Few if any. Of the trust companies keep Oh
hand cash reserves % any size. their cuS'oiii
being 10 keep practically all Of their FUNDS on
6enosit in the hanks which themselves hold
cash reserves of barely more than the fequit eU
% per cent The trust companies have "lder
field of operation than the banks. being ena pee
n engage in such profitable business as IallN a.
reorganization and the financing OF lhuuS,II 70
combinations. well as TO conducI q eeneio
banking business; and with those acQllohal oP-
,or-unifies for profit their deposits have in
creased much more rapidly than nave 1hose %
the banks, while. as notably was aecldIeu =!
governor Cder last winter. they have dlsunc!
advantage in lower taxation than that imposed
,,non the hanks Moreover. the trust companies
have not been held so strictly to account a.
have the banks in the important hdIttr %
maintaining cash reserve instantly aNallaDle
and adequate in amount TO meet the requlie
,nen-s Of safety AS the trust companies
which NAV hereafter clear through Clearing
House members AT least, the maintenance o.
Fuch a reserve will henceforth be compulsory
although the point was made Yesterday that the
v-sv for a conceivable. hut altogether unlikely
DENOMINATION unfair to some institutions nigh
he opened by the provision that the Clearing
1Iouse committee should have the power arb
trariy 10 fix the amounts Of the cash reserves
20 he kent on hand by the several trust com
NAMES Surprising. ii vas said, that al SOM
+iroe in the future some powerful financla
i7terest should dominate in the membership o.
the ~lea ring House committee. what would pre-
vent the committee from directing trust com
,snx hostile TO the committees interests TO keei
4, IFS vaults the maximum cash reserve re
o1lired by the resolution, - per cent, and al
1o,rinp another trust company Of no create
STABILITY TO keep cash reserve of only : OF
ger cent?