The Birmingham age-herald., 1907-10-26
Financial Institutions sf New York Show Strength h
 Disaster
MORE BANKS SUSPEND
 BUT ILL ARE SOLVENT
New Plan Is Formed of Issuing Clear ina House Certificates In Order To Protect the Available
 Cash Supply.

New York October 25.--Anoth CT nerve-r tracking day has passed but the financial institutions of New York have shown extraordinary power of resist ance. While several minor institutions have been forced to close, yet two things should be said about them first that the amount involved was not so great as to exert any marked in fluence on the general situation as these banks were in residential quar- ters and did not come in touch with the larger financial institutions; and, second there is every reason to believe that these banks and trust companies are solvant and that their difficulties will prove only temporary, and due to inability to secure ready cash. Of course, the cessation of business by these companies caused trouble to ' many persons, but not as great as 1t might seem as the depositors are. for the most part, located in the well-to- sdo quarters of the city.
 h the light of the general excite ment the savings banks thought it wise to put into effect the rule re quiring thirty to sixty days notice for
 
 they continued to make payments, would be obliged to withdraw funds from national banks, thereby causing an additional strain on the general sit uation. There was not the slightest hint that any of the savings institu- tions was in anything but the sound est condition and it was pointed out that the savings banks of this state are so restricted by law In investing their money that there can be no ques- tion that all of the securities in the cir possession are of good values.
 Six Banks Close.
 The institutions which closed their doors today, with the sums due deposit tors were: The United States Exchange hank, Harlem, s6Oo.OO0; International Trust company, about $loo,ooo; stne Borough Bank of Brooklyn. $4O00,0OO; the Brooklyn Bank, s2300,Ooo; Will liamsburg Trust company, Brooklyn, S7500 O0O and the First National Bank of Brooklyn, $3.500 900. The First National Bank ofsBrooklyn. the Williamsburg Trust company and the International Trust company were ,llied institutions. None of these conn panies had important business connec- tions with the larger banks.
 On the other hand, some favorable features marked the day. The Trust Company of America and the Lincoln Trust company, the organizations wnlvA suffered most from runs. have been slowly paying their depositors and closed today with all demands met. In the case of the Trust Company or America, the run has well nigh spent it's force, as the great bulk of deposi- tors has been paid off At the close in, limo 1t the Lincoln Trust company, but also there was marked reduction in the number of anxious depositors
 Morgan Money Pool.
 The most favorable incident of the day was that the stock exchange was pro- vided with funds ample to meet its in- mediate necessities by a money pool, headed by J. P. Morgan, which sent in about $15,0O0000 this afternoon. The stock , market had held relatively firm all day, but when the pool money was offered in the loan corner there was immediate upturn and the market closed strong at the best prices of the day As all or the loans made today hold over until Monday the stock exchange situation VII. not be a banking feeler tomorrow. This afternoon Clark Williams, the newly ap- pointed state superintendent of banks, affirmed the solvency of the local in stitutions in the following statement:
 By the facts within my knowledge and information received from reliable sources I have been convinced that great inn proyement in the situation has occurred during the morning.
 If depositors are not unreasonable, look for continuance Of this improve ment. CLARK WlLLlAMS,
 Superintendent of Banks"
 AIarmist Reports.
 There was the usual crop of alarmist reports afloat during the day. one of them that a large dry goods house was serious ly involved, but this as well as other similar rumors proved false.
 A further encouraging development was the decision arrived at unoficially to is- sue clearing house certificates probably tomorrow.
 There will be full meeting of the clearing house association tomorrow morning to consider the issuance of these certificates. The immediate effect of this will be to enable the banks to settle the balances between themselves with these certificates and thereby release large sums for regular needs.
 The decision to issue clearing house certificates is likely to end any further anxiety in regard to the supply of cur renev The certificates will be issued as usual only upon the deposit with the clearing house committee of acceptable securities. and only in such amounts as the cledIluB houoo S'Hiiiii''SS s'i"'i of- prove But in the case of a bank whose affairs are sound, there will be no arbi- trary limit to the assistance of this sort.
 History of Certificates.
 |. The first issue of clearing house cer- tjfjcates was in 1860 and there were sew cral more during the war. Other issues occurred in 1883 and 1884 The last oc- casion on which they were used was in 1s93 The clearing house certificate is practically guarantee by all banks In the clearing house that the certificates shall be redeemed at par. but the clear ing house banks are secured against loss by the fact that first class securities of either commercial paper or stocks and bonds are required before the certificates are issued The certificates are used only between banks and do not appear in gen- erai circulation, but by relieving the