The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1903-08-10

l thOughaul man VINO mas srdSpeu Tue essst
/ ton must realize that 1t is indeed appais-s
/ ing. and at no. distant day will bring its
| overwhelming disaster said the chairman
| of the COMMITTEES on Banking and Currency
] In House report on January Is. And On
| March 8 the chairman Of the Senate FINANCE
| Committee snamed the. exact time when he
| feared the peoples business would be In
| jured and prosperity destroyed. The rem
| edy proposed in the House was the Fowler
asset-currency bill, in the Senate the AL
drich bill. Both failed to pass. The Demo-
Gratis are responsible for killing these bills.
but would not be responsible for permitting
| a panic to occur In 1903. The party respon-
sibIe for panics Just now Is the Republican,
with its majorities in both houses CT Con-
gress ard President Of It's choice.
l also suggested that merchants should
take preventive measures by forming
clearing house 20 provide themselves with
such facilities as the New York City banks
| enjoy through their clearinghouse In 1885
these banks, able to create resources at
, will. issued to themselves 100000 of clear
ing-house certificates And no member OF
the New York clearinghouse failed during
the panic of that year.
To understand the value of clearins-i
house, take the case of bank that was notl
a member. In May. 1893. the National Bank
of Deposit. located in New York City. APP
pealed for assistance to the Clearinghouse
Committee Upon examination they, instead
"
permanent receiver. appointed on June 9.
1893. finally closed the banks affairs on June
10 1894, having in a single year OF excep-
tionally hard times paid the depositors in
full with interest without assessing the
stockholders. to whom. of the capital $780,
OOO and surplus ESQ. 00D. he returned S5l 600
In cash and 1856 900 nominal value) Of assets.
AT the date OF suspension $95SoO Of the
nominal assets was estimated good and s263.-
eco doubtful. As additional assets S2S,0O
were received later. the estimate Of good as
sets was fully verified by their market value
upon liquidation.
The clearinghouse then. could safely
have guaranteed the deposits upon pledge OF
the assets estimated good and secured to de-
positors the use Of their money without In
PERMISSION. thus averting numerous failures
that followed the closing Of this bank.
Merchants are like this bank without q
clearing house. and. IL denied accommodS
ton by banks. ruined. Then the failure ozx
one causes. in turn the failure Of others.s
and they go topping over like a row Of
bricks set on end. A clearinghouse enables
the New York banks to protect themselves
during financial panic. 1t would do AZ
much for merchants. practically add to the
resources Of every firm and endow those
resources with a quality which they loee
to greater or less degree during panic,
namely. availability. 1t would be worth sew
eral thousand millions of dollars to Amer.
lean commerce and industry.
The plan Of the New York clearinghouse
was devised in 1853 by my father, James
c. Hallock. ST.. who secured its adoption
in the same year. He was employed In the
clearinghouse during the first year, and
while there was addressed in writing as
The Originator of the Clearing house. in
America.
Encouraged by his success he then de-
vised clearinghouse for merchants. Such
clearinghouse would include all thsS
banks. and virtually be a reform in bansSS
ing. relieving the banks of many unrefSt
nlunerative burdens. while opening nev(
and extensive fields of profitable servicG
ihis ciearing-house would not be confined
to any branch of business. to any city or
State. but embrace all banks pervade town
and country throughout the entire Union
and benefit every section.
clearing house for merchants would
make good assets constantly available, and,
IN time of need. afford all such advantages.
practically without limit an are derived
from the use Of clearing -house certificates.
NO merchant with q suf1cisncy Of aood
assets would ever fail. or occasion the fall
ure OF others. because his good assets were
not available. Bad assets, like bad checks.
would be thrown out As soon a. discovered,
meanwhile doing less harm than bad checks
now. Good assets could be put In by the
owner at any thu, and rsckoned on like
q good course OF stone in q substantial
building. The panic this fall which senQA
tors feared might destroy the prosperity ~
the people would never befall merchant III
doing business through . clearing- house ILL.,
this. ~
1t is thirty-ive Year, since, in 1853, I frst
attempted, with my father. to give mar
chants a clearinghouse. In the panics Of
1873 and 1888 tried again. alone. These
attempts were made at homo in my native
city OF New York. In 1900 took M the
matter in Boston. The obstacle has always
been lack Of funds to put the huge enter
prise in motion: excuse enough for me. but
not for the half q million merchants who
would constitute its msmbership. With
that number once enrolled, q membership fee
Of 5 each would start II. The annual ex-
pense would not be much. But II 1t cost,
on the average. only e Per head to obtain
this membership. there would be preiimi-
nary expense of 8. zoe.
The establishment Of q clearing house u
always resisted. My father had to ever
come resistance in New York, and had to do
the same to bring about the clearing Of out
of-town checks in Boston. New York banks
have for years refused to clear out f-town
checks; and in this regard. compared NJ y
London and Boston banks, are only ha-
developed. In 1861 the United Suites Treas
ury refused to use the Nsw York clearing
house and forced the banks to suspend their
specie payments. And In November, 1878,
upon the resumption OF specie payments
the Assistant Treasurer Of the United
States at New York became a member OF
the New York clearing house. There Is al
ways resistance. and always success, when
the matter Is pushed far enough. For twen-
ty-aye years the United States Treasury
did not use, and now for twenty-five years
ha. used, the clearing-hous 80
1t is announced that Congress will meet Sn
extra session on November .. What win
have become Of the panic by that timer Can
the administration say there will be mono
this fall? II SO, why were those fears ex-
pressed last spring? II not, the extra ses-
sion should be called in August. The tina
to prevent panic is before 1t occurs.
JAMES G. HALLOCK. a
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