Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1907-10-26

sums Of currency for the regular needs
| of business
| The decision to issue Clearing House
| certificates is likely to end any further
anxiety in regard to the supply of ourren-
cy. The decision means that hereafter
large balances against any particular
bank al the Clearing House can be settled
in Clearing House certificates and the
bank allowed to retain it's cash to meet
other demands. The certificates will be
issued as usual only upon the deposit
with the Clearing House committee of ac-
| ceptahie securities and only in such
| amounts as the Clearing House commit
tee shall approve; but in the case Of a
bank whose affairs are sound. there will
be no arbitrary limit put to the assist
ance of this sort to be rendered when
needed.
The first issue of Clearing House certifi-
Gates was in 1860 and there were several
issues during the period of the war. Other
issues occurred in 1878 and 1854 The last
occasion on which they were awaited of
was In 1923. The Clearing House certfi-
cate IS practically a guarantee by all the
banks in the Clearing House that the
certificates shall be redeemed at par. but
the Clearing House banks are protected
against loss by the fact that first-class
securities, either commercial paper or
stocks in bonds, are required before the
certificates are issued. The certificates
are used only between banks in the set
Element of their balance at the Clear.
ing House. They do not appear in gener-
q! circulation, but by relieving the banks
of the strain of large local balances they
enable them to keep their cash reserves
comparatively intact.
1t is believed by competent banks that
an issue of so, DOE 600 will he outside limit
of what will be required in the present
occasion. 1t is believed also that the
very fact that they are to be issued will
50 far restore confidence that runs upon
banks will cease so that it will not be
necessary to keep the certificates out
standing for any considerable time. Al
ready the strong city banks are receiv-
ing large deposits from persons who have
withdrawn their money from the banks
and trust companies which have fallen
under suspicion. This does not preclude
the fact that considerable amounts have
been put in safe deposit boxes and there
lv withdrawn from circulation, hut It is
believed that the issue of Clearing House
certificates ard the consequent restora-
ton OF confidence will result in the return
Of tits money TO the banks within a short
time. Late in the afternoon n favorable
light was cast upon the prospect of i'm
ports Of gold by a sudden fall in the rates
for foreign exchange. The market has
been practically at standstill for sever
al days. with large offerings of bills and
few takers. This afternoon. however, the
rate dropped to ass. which practically
makes imports of gold possible at a prof
it. Leading bankers and foreign exchange
houses have been looking for this devel-
opmcnt. hut hardly expected this morning
that it would come so soon. The tide Of
gold. once it sets this way, will undoubt-
cdly reach a large volume in view of the
considerable amounts due this country for
the outgoing crops and for securities
While the present market is not one to
encourage the general public TO buy
American securities, there are always
shrewd observers in Europe who are dis
posed to buy at times like the present.
and some of them have been in the mar
l1et during the past few days. II will be
possible. even by the process of loans, to
transfer part Of the burden of carrying
stocks from New York to London and
Paris. but this las been dore thus far
only to a limited extent
The fact that the banks and the Stock
Exchange will be omen for huSineSS h,t
two hours tomorrow and that Sunday,
with all its opportunities of calming pub