Los Angeles herald., 1907-11-03
ELLIOTT
SUGGESTS
REMEDY
NATIONAL CLEARING HOUSE is
NEEDED
BANKER SAYS UNITED STATES is
ENORMOUSLY RICH
Tells City Club That Congressman
Should Put Their Heads Together
and Help Country Out Of
Dilemma

President j. M. Elliott of the First Ma
tional bank, in addressing the City clus
| Yesterday on the financial situation, advo-
Gated a national clearing house which
would serve as check on bad banking
Mr. Elliott said he favored referring to
this national body all cases of misconduct
| or speculative tendencies on the part OF
bankers so that they would be punished II
they endangered banking by their prac-
tees.
| The attendance at the meeting was
tlarge, for the membership of the club now
numbers 275.
| Mr. Elliott said that clearing house GER
tifcates were now in use in all large
cities. they being practically. promlssory
notes. the recipient banks depositing Sc
curities with the clearing house and boz
rowing upon their credit to the extent of
70 per cent.
Funds Held East
The issuance of these certificates was
made necessary it was explained, because
large funds on deposit in the east be-
longing to Los Angeles banks could not
be had at present and thus the system
was put in practice simultaneously in all
large cities.
BY using caution. treating all customers
alike and outstanding their resources. the
Los Angeles banks could help the great
which will be but temporary.
II hope to live to see the day." he said,
when the Clearing House associations of
the United States will be stronger than
they are at present.
1T has been hobby with me that the
time will come when they will scrutinizo
men going into the banking business and
when 1t is seen that start is made to do
business in an unsafe way that the Clear
ing House association will tell those men:
Unless you do your business in way
that will warrant us in saying that ii is
safe we will not indorse you, and no
clearing house bank in the United States
will take your paper.
IF that is done these panics will not be
likely to occur
BIames Small Minority
1.-THE best element of the banking men
in the United States has done it's best 10
avoid something of this kind, but egged
on by small minority it and a lot of its
brethren is bearing the burden.
81 have been asked how long this thing
is likely to continue. l can merely say
that when it happened before it took two
or three months before the clearing house
loan certificates finally were surrendered
and the paper which had been put up for
their use taken up.
I'VE are unfortunate in having laws
that permit OF no eldStlClLy. In Cdndud
they are better off The situation can be
relieved there, but we cannot do it.
Congress- from time to time, has
seemed as if it was about to take some
financial step to remedy this situation.
II hope that this trouble will be lesson
to the congressman.
They should put their heads togeth or
and arrange something that will help the
United States. rich and powerful nation
as it is. out of the condition in which II
finds itself at present
'If it could be arranged at once, ma
chinery should be put in motion to relieve
credit, which seems to be crippled tenn
porarily. AS / say, it required two Or
three months before to get these things
in ordinary shape.
There is this to be said: This country
at the present day is enormously rich. I'll
is inclined to be a little extravagant, but
it is we'll able to afford it.
"The wealth is spread over wide area
and in the pockets of a large number OF
people.
Look at Kansas. where for several years
farmers mortgaged their homes. Now
they have money to loan. Cotton is bring
ing good prices, and other commodities.
but these commodities have got to go out
Of the country and flood of money has
got to come back to pay for it.
II think we have been extravagant and
we must stop being extravagant."