New-York tribune., 1907-11-03
CLEARING HOUSE WORK
INFLUENCE IN PANICS
Interesting individuality of the Hen
Who Rule the association.

IS'"' In the semi-panic of 1SSf in the convuIs;
brought about by the London allure of Farin-
Brothers in 1880. in the hard times and busI,o-s
depression of 1885, and again, in the Las, :.
weeks' the Clearing House Association OF NJ
YORK has proved its prodigious resources -,
strength both as a moral and as a financial 80
III these days everybody knows what a cIa,~,
house is and what it is designed for. AN 80 -.
/ large interior cities. well as New York b.,, %
established clearing house associations T t ven
pose OF doing away with the enormous Iabo- -,
"ouiu De involved in having each companv So
e@ch day IN cash, its credit debit balances ,,
| every other company. But. of course all these -
terror associations are overshadowed and -
Dy the magnitude of the transactions OF TIE ~
YORK Clearing House Association the claa-, ~
winch have for the last four years shown ro+sIs -
foiIo"s 1sS $65.97O 3S7 Os; 1904 SIS SO s1s 50 -
I'vo $S3S2Zo $50 2Ol 81; 1906. S1O4 S75s .65S Il
III time OF trouble. such New York has ,
been experiencing the Clearing House Assoot.s
acts as tower of strength to the yvho1a si,., On
It's usefulness is demonstrated In MANY diver.
ways CIT
suppose for instance that some one bank in ~.
association Is perfectly solvent. but for one reaso
OF ahother' becomes short Of cash. or has a m,
upon II, or is unable to realize quickly uror a.,
resources. In such e1ent the Cleari,e Hon. -
mIttee' acting under the powers conferred uror =.
by the constitution OF the Clearing Housa vvsr,
quietly into the bank and makes a thorough exan,
hduon OF It's affairs If such examination provo,
IS rfa-flr-
vent and deserves help, then the Clearing LI,--.
CON- ttee decides upon the amount OF bsI, -
shal De extended TO it. and selects from its asset.
SUCH ponds, notes or other resources as NAV h.
good collateral, and against this collateral aa
Eahces such cash as may be necessary To carry
along the bank which is in trouble The CIearinz
Rouse committee holds this collateral for the bepa
mt OF all the banks together and each one of tbss
banks chips in its share Of the required cash q,
proportion 10 its resources.
Wien the trouble began in New York. with tba
sudden drop IN the price Of United Copper stock
suspicion at once attached to the Mercantile Ma
tional Bank. in which the Heinzes VINO were deaDIv
interested in United Copper held a controlling in
terest. The Clearing House committee had an az
animation OF the bank made and found that de-
spite some questionable loans. the institution was
entirely solvent. and consequently the committee
decided to render it proper assistance
.; gay or SO later suspicion rested upon the Ne
thai tbst A boG UL North America, for the reason
EniIlSs w Morse. who was deeply Interested WIKI
Here again examination was made bS- al rs t,
TeT1 IlS rouse committee and it was decided 10
I lions: In the instances OF both these banks he
mttee was s5o P0"fT G OF the Clearing House COM
Heinze and Nj NIora ~ It's us, ACTON IN o3hs1ng Mr..
and to retire from the directories. but maTs
coneIIinS s@1G % VIII them al their friends and in
ol All Ine men representing these particular Inter
eSts. There was no legal right possessed by the
Clearing House committee al this junctIrs' nm
1Ile moral force was more powerful than any tech
baL aa,II'orlIy could have been, and there proba-
oiy VIII never be another instance that Will 20
seSsed by the Clearing House AssocisTion vtibsn
y 9eIleVeS tnat the banking situation 4 New YORK
controlling interest in the banks named and vst
iinS,,iebO i It IlortI suaSion compelled them
+h Ihe case or the trust companies in New YOrS
ent position. for the reason that the trust COM
tpdnleS are not members OF the association But
tions upon which runs were being made hsd de-
situation materially hence Tbs % @ecI Ine whole
ms ms partner, George w Perkins and SecTetsrv
stqat the men with Wh6 thsy @h v52s 5as Whole hole
or The 9Is,~j ~o az every point We're the members
IN turn appointed subcommittee OF prO-Tirs1T
sibility in various parallel situations tbat 5Ir
tsresf ~ rIy I1S oe a matter or good deal Of in
MIteeS nut and to have LITTLE personal view of these
YORK dI1 mo nVS oeen saving the situation in New
the clearing House Association is AlaNarde~ f,il-
Fulton National Bank The Ciearing Houss cana ana
49, = ina9e 2 up or James t Woodward. presi-
man president OF the National CITY sank. VIII
Bank; Dumont Clarke president OF The 4HIari-sT
ISSAcIStnSe National; Edward Townsend president
9L Rar the importers and Traders National ana A.
b3rton Hepburn. president OF the Chase National
ty ci'eSe Ltst names mentioned perhaps the best
time Superintendent OF Banks in this state and
OF the Currency at washington I1nS ~ his 80 aI-s ire
nent from that office he flled slccessfvelv various
at the head Of @ s9SS IN InsF1f5 sis f5y and nd is noT
authorty on all matters of currency and mas writ
sought 2l{ upon every critical occasion
"a rATt.Iu Hr townsend. president ~ the Importers
Oldest and most conservatives inStltuTiors In tbs
CITY, one OF those known as being seldom il ever
the Old school OF bankers that caters 10 an excss-
always on the side or prudence
Another well known banker working with thess-
men has been William II. Porter president Of the
Chemical National Bank which has a rational
reputation for absolute stability and enormous cash
resources. Until recently when a change vas rSais
under the amendment to the national ba7Lins act
@ Ine Snenlcal, on a capital OF $4,000, has had a
Acting In conjunction with tie Clearing IIouss
committee. as described above. there has been q
Special committee designated by the Clearing
House. and this special COMMITTEES has been mads
up from among some of the younger but almOs,
equdIiy Wen known bankers I'm the city. UDOn this
special committee has fallen the task in rianv in
stances OF examining these banks which have been
was proper 10 assist them This COMMITTEES is con-
pSsGd as IoIows; Henry ?. DAWSON vice-president
al tne itst Satonal; Gates W. McCiarragh. pres
dent OF the Mechanics National: Albert III Wiggin
REV. Vice president OF the Corn Exchangs Bank
9nd James c. Cannon. vce-pFeside1t of the Fourth
1t IS curious fact that not only the men Just
mentioned but also several of those on the Clear
personal and social wav and vS6aT iS -1C~s tbev
all happen to be directors OF one New York banking
conservative oid line method tT,Sst compsHies in
tne cIy; and a great deal of interest has always
ssttt9ChSd 10 II since It's organization. because on
It's board II combined so many national bankers In
1, 1s respect II has been differentiated from any
for that matter; for. whereas in New York most ot
banks. this particular one. known as the Bankers
nLrust tL company, acts constantly in harmony with
looked upon OF the safest INSTITUTIONS OF its
TTiSs Ti t9r, although not member OF the Clearing
dicayo cay OF t9e sreat Clearing House banks One IL
tsttcas ~ M M Sourt order signed by one OF Jne
SbSrobsrat,' T., me SgRrsne Court directing the lily