The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-10-28

and not for hoariing. This system OF
check credit will operate In the usual
manner, and there will be no incon-
venience to the man who does not make
special effort to obtain currency.
Checks drawn in payment of current
obligations will be received for deposit
by any bank and redeemed through the
clearing house in the usual manner.
except that clearing house balances
against the banks will be settled in
clearing house loan certificates instead
of currency. A man having bank ac-
count will have checks put to his cred
ii as usual and can draw against them
freely without interruption in the
course of his relations with the banks.
1t is not believed that the dearth of
currency VIII be such as to prevent
those requiring small amounts or not
having a regular bank account, from
obtaining it.
Experience of 1898.
It was found in 1898 that. while cur
rency went TO a slight premium in GER
tain cases, the public generally ac-
cepted the suspension of currency pay
ments with equanimity. Runs upon
banks ceased because the object of
such runs, namely, to lock up cur
rency, was defeated by the decision to
clearing house.
A large force of clerks were at the
clearing house today preparing for the
issuance of loan certificates tomor-
row. These are In $1,000. $4,000 and
500. 900 denominations. and in this form:
Form Of Certificate.
This certihes that the (name of
bank has deposited with this commit
tee securities in accordance with the
provisions of a meeting of the asso-
citation upon which this certificate is
issued This certificate will be received
in payment of balances for the sum of
s., 900 from any member of the clear
ing house association.
/ ION the surrender of this certificate
by the depOsiting bank above named,
the committee will endorse the amount
as a payment on the obligations of
said bank. held by them, and surren-
der a proportionate share of the col
lateral securities held Hereunder"
Found of Great Benefit.
This is the form as used in 1893,
when these certificates were last used.
At that time the certificates were of
great benefit and aided materially in
clearing the very serious situation then
existing. In this connection, New
York bankers commended the action
of outside cities in adopting the same
plan for the protection of their sup
plies of cash. They foresee that this
will greatly relieve the strain at out
side points, permitting them to use the
certificate in place of cash, and also
having the salutary effect of keeping
down the drain of outside centers upon
New York. When New York adopted
the certificates in 1893 the system be-
came almost universal throughout the
country, and everywhere the result was
beneficial.
No Business Depression.
! One prominent banker pointed out
that it could not be brought to the at
! tention OF the country at large too
strongly that the present situation is
one dealing solely with the supplies of
currency, and that neither the business
credit of the nation nor it's industrial
and agricultural prosperity is affected
| In this respect there is a sharp con-
trast with the conditions prevalent in
1898. At that time many factories
were closed. railroad business was at
a low ebb, and all parts of the country
were feeling the strain of acute bus
mess depression. Today, on the other
hand, the country is extremely pros
porous; manufacturing plants are run
ming full all the time TO keep up with
orders; railroad earnings are the high
est ever known, and the crop pros
poets are excellent. The banks them
selves, especially in New York, have
in their vaults Understanding secur-
tiles of the best character on which
in all ordinary times they would be
able to realize large sums of money.
It is with these securities and good
| commercial paner as collateral that fhe
clearing house loan certificates will be
issued to the extent of 75 per cent of
their salable value. Thus il will be
seen that every SIS of loan certificates
issued is secured by 800 worth of
property.