The Providence news. (Providence [R.I.]) 1891-1906, 1905-10-04
THE TRUST
COMPANY
DANGER

New York Oct i-Charges that the
| statement Of the condition of The New
York banks issued weekly has become
farce and that the action OF trust com
pauics In extending large credits without
maintaining adequate cash reserves con-
stitutes a great danger were made 10 the
Clearing House association yesterday by
the President OF the corn Exchange Bank.
William A. Nash.
The Corn Exchange Bank is one OF the
most important financial institutions of
the city. having average deposits of about
SiO0OoOo0.
Mr. Nash denounced the existing state
OF Affairs by which trust companies opcr-
ating outside sof the Clearing House and
not subject TO its rules are not Obliged 10
maintain the cash reserve OF one-fourth
OF the sum OF deposits. which reserve isre-
quired OF national banks by Federal law
and OF other Clearing House banks ~ the
rules OF that institution.
Mr.. Nash urged that measures be taken
TO bring tho trust companies under the
regulations OF the Clearing House
FRAUGHT WITH DANGER.
Mr. Nash alluded 10 the eptrangemcnt
which now exists between tho BANKS and
trust companies. This condition he said,
will have 10 be earnestly dealt with, OF
the situation troughout the country would
be fraught with danger.
IT was his opinion that the trust com
panies ought 10 he made ful-hedged mem
bers OF the Clearing House sssOcIation or
falling that. they could be made 10 clear
through banks Of the Clearing House as
is now done by non-mcmbers banks.
lie suggested that perhaps the rules oI
tho association dealing with trust com
panies may be too harsh I'm their reserve
requirements. that the trust compaues
ought 10 be accorded the same privileges
as those granted TO state banks.
Rngar riding the weekly hank statement.
which in his opinion was now sadly liz
adequate. Mr.. Nash suggested that IL be
changed 50 as 10 make clear I'm separate
tables the condition OF the national banks,
the state banks and the trust companies
After much discussion n resolution was
unanimously adopted directly the Clearing
House committee 10 take the matter under
consideration. with view 10 enecung the
results advocated by Mr. Nash
The committee consists OF w. III. Porter.
president OF the Chemical National Bank,
Chairman: V. - snyder. president OF the
National Bank OF Commerce; James still
man. president Of the National city Bank;
Fourth National Bank. and Richard Della
acld. president Of the Park National Bank.
CRITICISM or STATEMENT.
Criticism Of tho bank statement issued
a tho close OF every business week. whtch
had been I'm progress for some time. be-
came general I'm the financial district last
Saturday when the market was caught
entirely off it's guard by the figures con-
tanned IN lie statement lSSu'u ltlat udA
All OF Fridays compilations from the
bank movements of the week agreed that
at least e.. 10000 had gone out " the cash
reserves and traders had carried on their
operations on the basis OF bank state
ment showing this condition. When tho
report was issued. however. instead OF "A
decrease Of more than seven millions, II
reported an increase of 81 $3.50.
rho statement also reported reduction
of SiSl0.c00 I'm loans while unofficial COM
ptlations had shown the loan account to
have been increased during the week,
The methods employed In reaching the
totals given I'm tho statements have not
heon explained but ~ is suggested that
gold engaged in London and also that I'm
transit from Europe 10 America may have
been credited 20 tho banks by which It,
had bocu engaged. The reduction uf
loans.it was suggested, had heen brought
about by transferring large borrowings
from clearing House bank 10 trust COM
panics.