The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1907-11-22
STRANGE ACTION
BY THE BANKERS
Of Los ANGELES
Decide to Make Rennittances
in Clearing House
Funds Only
THIS CITY SURPRISED
Relations With Southern
California Metropolis
Virtually Ended
MOVE is CRITICIZED
Local Concerns Refuse to
THIS CITY SURPRISED
MOVE is CRITICIZED
Local Concerns Refuse tc
Handle Items on Those
Below Tehachapi

Commercial communication between
San Francisco and Los Angeles has
been brought almost to a standstill as
result of the decision of the financial
institutions of the southern city to
meet their San Francisco obligations
in Los Angeles clearing house funds
only. Local bankers were greatly sur
prised at the action taken by the Los
Angeles financiers, and determined TO
adopt precautionary measures at once.
The subject was given prolonged con-
sideration yesterday and it was agreed
that items on Los Angeles designed
either as cash or for collection should
not be accepted as long as the OBJ
jectionable rule remained in force.
The local banks sent out notice of the
decision reached to their depositors
last night. These notices, which fully
explain the situation, are as follows
TO Our Depositors: We have re-
Angeles: Los Angeles clearing house
banks have agreed that all items on
Los Angeles banks coming from san
Francisco banks will be remitted for in
Los Angeles clearing house funds only
Under these circumstances 1t appears
that the Los Angeles banks for the
present will not pay in available funds
for Items forwarded to them from san
Francisco. AS long as this ruling holds
good, therefore, we cannot handle,
either as cash or for collection. items
on Los Angeles or those resulting in
Los Angeles exchange. Please be gov
erned accordingly
COMMERCE MUST SUFFER
Local bankers explained yesterday
that the action they had taken was
forced upon them by Los Angeles. 1t
was stated that trade between the two
cities had been seriously crippled by the
strange action of the southerners. With
the two cities virtually without me-
dunn of exchange, 1t was pointed out,
commerce must suffer.
1t was not known in San Francisco
that the situation in Los Angeles de-
manded the radical action taken there,
and the news brought from the south by
private kilograms caused general sur
prise. It's effect is to tie up in Los An
geles all money due San Francisco or
that may become due San Francfscans
ir the course of business. Naturally the
result is TO bring business between the
two cities almost to a full stop.
In their notices to depositors the local
banks state that they cannot accept the
items on Los Angeles, either for col
lection or for cash. ! Bankers said yes
terday that to advance the money on
Los Angeles items or to take them in
any capacity would simply aggravate
the situation.
we were driven as a matter of self
protection to take the action we did,
said one banker yesterday. "otherwise
we should have had the Los Angeles
situation on our shoulders. The situa-
tion in San Francisco has shown such
vast Improvement that it would be un-
just to our stock holders to assume an
additional burden at this time The
step taken by the Los Angeles banks
was a most remarkable one, to say the
least
Los ANGELES CRITICISED
Criticism of the Los Angeles bankers
was general yesterday in local financial
circles. Various theories were ad-
vanced to explain the attitude of the
southern city The view was expressed
that heavy loans on real estate had
tied up large sums on which nothing
could be realized at the present time.
The opinion was advanced that Los An
geles had felt the pinch acutely. largely
because of its rapid growth, which
necessarily entailed large loans AS
surance was general as to the basic
soundness OF the Los Angeles institu-
tions.
The demand for the 3 per cent gov
ernment certificates of indebtedness
has not reached large proportions in
this city. Twelve more applicants ap-
peared al the subtreasury- yesterday
and subscribed for paper to the value of
s15,7oo This brings the total subscrip-
tions to the certificates to s55.25o In
all there have been A applicants
The subtreasury paid out yesterday
to local banks s75o,ooo on transfers
from the east Almost $4,000. 900 has
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