Los Angeles herald., 1907-10-27
No suspcnsions During Day

several banks and trust companies SUI
ssdlred withdrawal of funds, these With
U.swals being for the most part by
:, E*eIler deposltors All institutions az
E&ed continued to pay on demand up
WI noon, the usual hour Of Closing Oh
haturday. s,aI
,N.Eirss of Importance in the remedial
IN, aAlres was the clearing house vot-
ing to issue loan certificates for the use
of the banks themselves In setting tneir
daily balances at the clearing house. Inc
certificates will not get into general CIT
culaticn, but their use VIII enaple .ie
banks to- keep in circulation. lot tne
needs of general business large 'I anioun 10 -
nf currency which otherwise would De
rc,1irad for the settlement of the daily
clearing house balances
plans were formulated to extend tne
benefit of clearing house certiilcales ~
lie trust companies, as well as 10 lle
hanks which are at present members VI
the clearing house association.
another extremely important feature ol
+odaI,s news was the announcement py
49, National CITY bank that 1t has en-
srared s5. 900. 900 in gold for import. II Is
baiiove6 bv the bankers and brokers that
tbie engagement is the beginning OF what
viii probably be a continuous moVeinei'
ot gold to New York from abroad. Inc
evisting market is very favorable TOT tne
importation of gold, and 1t is peleveu
no difficulty will be met with IN secur-
ing the metal from Europe so rar as may
b. needed. ~, -,
nba clearing house certificates will be
,ssued to those banks making applica-
tion and proving to the satisfaction Oh
tl.,, committee appointed for the purpose
40 need for the certificates and tnelr
ability to deposit the proper collateral.
No limit was fixed to the amount to be
issued but it is hoped the amount asked
for will be small.
Nav Admit Trust Companies
Another step was taken also OF f1rst
i,,,ncrtance designed to offset the unra-
vorable effect which might be produced
nv the fact that the clearing house pahks
were in a position to obtain certincates.
while the trust companies Were ieA' o"'
Of the arrangement.
rI,o feor that the trust companies would
hs ,,nfavorably affected by such de-
cision was one of the influences whlch ieu
several members of the clearing mouse
tcoiouittee to oppose the issuance OF Ger
fificates. The step taken to offset TINS
dnrge.. was the presentation or a resolu-
tion by the clearing house committee 10
members of the association to the effect
that ne trust companies should be ad-
Mite, TO the clearing house 1t was pro-
vide6 that this resolution might be con-
stdereo az a meeting of the association to
b. held hereafter
rhus far there have been no application
hJ the trust companies for admission to
tbe clearing house and the exact condi-
lion IN which they might be admitted
has not been fixed The requirements
made from banks admitted TO the ciear-
jnr house is that they shall keep In their
own vaults a reserve of 25 per cent of
their deposits. This is larger reserve
than most of the trust companies nave
carried since the requirements OF the
law OF 1906 did not go beyond ~ per
cent in cash on hand or on deposit IN
other banks.
While the action taken today is not
Immediately effective, so far as 1t relates
to trust companies, 1t shows a willing
ness Of the clearing house banks to CO.
operate 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 asso-
ciated banks in the clearing house stood
firmly together.
1t is felt by conservative bankers that
under present conditions it will not be
prudent to pursue narrow policy, and
II 1t is necessary to bring the important
trust companies into full fellowship with
the clearing house it will be done.
The clearing house certificates autnor-
lied today will be issued in substantially
the same form as those authorized from
1860 down to 1893 When bank satlsnes
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