Los Angeles herald., 1907-07-14
LOCAL BANKING NOTES
AND INSURANCE LAW
OVER s1,2oo,ooo PAID OUT IN LOS
ANGELES
Manager Gist's Definition of Bank
CIearings-Savings Banks In
surance Is Now In Force
In Massachusetts,

The term "bank clearings" is not gen.
orally understood by the people. The
meaning is explained by James B. Gist
of the Los Angeles clearing house briefly
as follows
1.-THE term bank clearings' signifies the
total amount of business passing through
the clearing house. For instance, all the
checks accumulated In the forty-seven
banks and trust companies of this city
are cleared through the twelve members
of the Los Angeles clearing house once
every business day. The exchanges are
the checks, drafts and other negotiable
instruments drawn on the various mem
Der banks and affiliated banks, and re-
ceived in the course of business on de-
post by other members and exchanged
at the clearing house. The exchanges are
effected in about five minutes, the aver
age business passing through the Los An
geles clearing house being about $4,000, 900
daily. This figure would be known as
bank clearings."
An earnest of the prosperity of Los An
geles is the sum of 81, 2OO,OOO which was
paid on July / in interest to depositors
and dividends to stockholders in her vari-
GUS banks. This amount represents the
earnings upon deposits of over $113OOO,O 900,
over $40,000,000 of which is in savings
banks to the account of the working men
and women of the city. Three of the saw
ings banks alone carry over $4,000 ac-
counts, with deposits of nearly 1913 900, 900.
On dividend day." as above indicated.
depositors drew out about 100000 and
stockholders about $685.
Governor Guild of Massachusetts has
signed the bill permitting savings banks
of that state to engage in the life insur-
ance business, and institutions enough
have promised to give the plan trial
to guarantee a fair test of the expert
ment If nothing more, says the New York
Financier. The new bill Is very restrict
i've in character and practically limits the
insurance to be issued to the industrial
class-that is, the maximum sum permit
ted is $500, or an. annuity not to exceed
$500 a year. Furthermore, the banks are
not permitted to employ canvassers or
collectors, the aim of the measure being
to provide facilities for protection at or
nearly cost price. Credit for the new
scheme, at least in it's Introductory feat
ures, Is due to l.. D. Brandes, whose ar
guments in pamphlet form and otherwise
have received wide attention. Briefly, the
contention made by Mr.. Brandeis was
this The cost of management of existing
industrial insurance companies ate up
over 81 per cent of the premiums paid
whereas the cost of management of the
Massachusetts savings banks was less
than ~ per cent-1.47 per cent, to be
exact. 1t was not contended that the
extra cost of Industrial insurance, as
heretofore sold, was due to msappropri-
alton. Rather the high ratio was trace
able to the necessarily costly work of So
Letting, collection and other charges that
aierIaf Hn oil mo Tod thn hon 70
engage in the business. The banks will
not try to force large volume of insur-
ance as competitors in a common field,
but they will supply it if their customers
desire, and at prices which will bring the
payments very near actual cost rates.