The Cairo bulletin., 1907-11-07
OF
1.-THE CAIRO PLAN
ny UNITED STATES GOVERN
MENT OFFICIALS REMOVES
ALL DOUBT OF LEGALITY.
US. ATTORNEY GENERAL
And Secretary of Treasury Give APP
proval to Clearing House certifI-
Gates as Circulating Medium
How It Started.

1t appears that the Clearing House
Certificate method Of. meeting the
money stringency Of the country II
being adopted very generally--in fact
Throughout the country, During the
last day or two smaller cities and
Towns in this section have followed
Cairos example, the MurphysborO
banks adopting the plan from Cairo
just as the Pulaski county banks did,
and the Chicago banks have decided
to adopt it. 1t is not generally known,
but it is true. that the Cairo banks
We're the first to adopt it in the way
that 1t is now being generally intro
duced. Clearing House certificates
were put into use in New York and
elsewhere for transactions between
banks only; but SO far as known, the
Cairo bankers were first to introduce
them in small denominations for use
by the people in their ordinary bust
ness transactions, and it has met the
approval of the big fellows elsewhere
| Endorsed BY U. S. Government.
| Some We're inclined to raise doubt
as to the right of banks to adopt this
means Of meeting the situation under
| the federal banking laws, and it was
brought to the notice of Secretary of
| Treasury Cortelyou and ex-Attorney
General Olney. In dispatch from
Washington dated Nov. their opin.
ions on the subject are given as fol-
lows:
Washington. D. c., Nov. 5,-Secre.
tary Cortelyou has been in New York
today, and neither he nor Controller
Ridgley would care to go on record in
the matter, but there is scarcely any
doubt that the form of clearing house
checks under consideration by the
Clearing House association in Chi
cago world be held to be legal by the
government. The treasury depart
ment will be guided largely If not en-
tirely G the decision of Attorney
General Olney rendered on Nov /,
1893, in which he held that form OF
clearing house check practically
identical with that outlined by mem
bers Of the Chicago association was
mot a bank note within the meaning
of the statutes imposing a tax of 10
Fer cent on all circulation other than
that secured by United States bonds.
"The opinion of Attorney General
.Olney is SO directly in point 1t would
fully Justify the Chicago Clearing
House in proceeding along the sug-
gested lines of credit checks for
small amounts. which naturally would |
circulate as currency and be secured |
b. securities deposited by the banks |
taking them out"
With this endorsement by the treas |
ury and law departments of the q. S. |
government there can be no question !
raised as to the legality of the forms |
of money issued by the local banks. |
and so far as their security is con |
view Of the strong backing they have !
il. the combined financial strength of |
all the banks The same is true of the |
certificates issued in Pulaski county, |
and of those just issued by the four |
banks OF Murphysboro, which have |
adopted the Cairo plan as stated.
How II Came About.
Perhaps word as to how the plan I
came to be adopted is not out of order i
here. 1t is stated that j. S. Aisthorpe,
president of the First Bank & Trust
presented the plan. Mr..
Aisthorpe stated to a Bulletin re-
porter last night and though reluctant
to talk. admitted that Cairo was en-
titled to credit for starting the plan
which was now being so generally ac-
cepted. He said that heretofore
Clearing House certificates had been
used in the large financial centers two
or three times only. then as now was
only used by banks in settlement of
balances between themselves. He
was in Chicago Wednesday of last
week for the purpose of finding out If
possible the financial situation. he
learned that the banks i'm Chicago
were paying out little currency but
were issuing Cashiers checks. He
talked to some OF the leading bankers
III Chicago about the issue of Clear
ing House certificates i'm small de-
and circulate them in
lieu of currency to the people. This
vas not then regarded as a favorable
plan. Mr. Aisthorpe then came down
10 St Louis again talking over his
ideas Of certificates and some of the
bankers in that city regarded II as at
east good plan Tor small cities in
preference to the issue of Cashiers
checks by individual banks He
,laimed that in his judgment the PEG
lie warld soon learn what was be-
hind certificates issued by a clearing
iouse and would be readily accepted
and circulated Citizens know how
his was inaugurated by the banks in
his city and put in operation last
Friday and by Saturday afternoon
bankers from Illinois. Missouri and
kenturky were making inquiries how
4 was done and today many locafities
Ire now doing what our Cairo bank
srs started In this territory and in {
TACT 4 was not known last Friday
morning that any other city had