New-York tribune., 1907-10-27
TRUSTS WANT TO CLEAR
APPLY. TO Association.
May BE admitted at Neat Meeting
Strengthening Measure.

At the meeting OF the Clearing House Asso-
citation yesterday morning an application from
several trust companies of New York City to be-
come members of the association received.
A motion was passed to consider it at the next
meeting. which will be held tomorrow. II is
understood that the application will be acted
upon favoraby. and that the constitution and
bylaws Of the association viii be amended to
admit the trust companies.
The admission of the trust companies to the
Clearing House will strengthen the local bank
ing position greatly. it will enable the COM
panes to obtain Clearing House loan certih-
Gates privilege of which they cannot take ad-
vantage at present. 1t will also weld the bank
ing institutions together into n much stronger
association for mutual protection
Thus far there have been formal applica-
tiOns by the companies for admission. and the
exact conditions which they may be ad
mitted have not been fixed The requirement
made from banks to the Clearing House is
that they shall keep in their own vaults re-
serve of % per cent OF their deposits. Tho re-
serve to be required from trust companies, II is
understood. is IL per cent
While the action taken is not Immediately eff
fective-sO far as IT relates to trust companies
it shows a willingness OF the Clearing House
banks 10 cooperate with the trust companies.
which greatly relieves the situation and removes
the danger which some have feared-that each
individual trust company would be left to shift
for itself while the associated banks IN the
Clearing House stood firmly together. It is felt
by conservative bankers that under present
conditions It will not be prudent to pursue
narrow policy. and. II II IS necessary to bring
the important trust companies into full fellow
ship with the Clearing House 1t Will be done.
one great advantage of having the trust COM
panies IN the Clearing House viii be that the
weekly bank statement. which has long been
criticised for It's incompeteness. will become
a more comprehensive indication Of the condi-
tion Of the clty's banking institutions Hereto
fore the figures have given the condition Of the
Clearing House banks only.
When the trust companies we're formerly
affiliated with the Clearing House, several years
ago. they cleared through member banks and
never enjoyed full membership the right to
vote or take part IN the conduct of Clearing
House affairs No institution will be admitted
to Clearing House privileges which does not
Up TO the high standard set by the 1850
citation.
WHEN TRUST COMPANIES WITHDREW.
Almost all the prominent trust companies OF
the city were members of tho Clearing House
several years ago, but withdrew. Indeed. tho
KnickerboCker Trust Company has been the
only institution oS this class which has con-
I'm recent years. the other trust companies pre-
ferrtng 20 pay checks over the counter.
In February. 1903. the Clearing House Asso-
citation, feeling that the trust companies must
share part OF the burden of maintaining fnau-
cIal stability IN this city. adopted certain
amendments to its constitution requiring the
trust companies which cleared through Clear
ing House members to maintain fixed percen-
tage OF cash reserves against deposits. II was
ordered that this reserve start at = per cent and
Increase to 10 per cent by juno l. 1904. and 10 II
per cent by December l, 1904 The trust COM
panies did not take kindly TO this new ruling
Tho first of the trust companies 10 sever rela-
tions with the Clearing House tho Union
Trust Company. which withdrew on April 10,
1903. 1t had not been II member OF the Clearing
House Association. but had cleared through
the Hanover National Bank. No reason was
given for the companys action, as 1t always
kept a large gold reserve in it's vaults, but dis
satisfaction with the new reserve rule was sup
posed TO be the cause.
At this time there were twenty-siX trust COM
panfes in New York and Brooklyn which cleared
through members Of the New York Clearing
House and one trust company at Bayonne, n. j.,
which enjoyed the privilege. These COM
panies were the Atlantic. City, Colonial CONT
mental. Fifth Avenue Morton, Title Guarantee
and Trust. Washington, Metropolitan Manhat-
tan New York Security and Trust, Real Estate,
United States Mortgage and Trust Union, Trust
Company OF America Mercantile, Knicker-
booker Nassau, Brooklyn. Flatbush. Franklin.
WILLIAMSBURG Long Island Loan and Trust.
Hamilton. Peoples and Kings County. In
Guided I'm the list OF trust companies which did
not clear checks through the New York Clear
ing House at that time were the United States.
Central Farmers Loan and Trust. New York
Life Insurance and Trust Equitable, Empire
State. North American, Eastern. Bowling Green,
Central Realty Bond and Trust. Broadway. Lin
coin Mutual Alliance. Guarantee. Guardian Nc
Vickar Realty Standard. Van Norden. Trust
Company OF the Republic, Holland. Merchants
and Windsor
The example OF the Union Trust Company was
soon followed by many others. and when, ON
June /. 1904 the 10 per cent reserve rule became
operative the Title Guarantee and Trust Com