Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1907-11-06
FRISCO Holds MONEY.
CLEARING HOUSE SYSTEM
MEASURE OF PROTECTION
Banks Are Absolutely Sound and Ac.
ton Taken Prevents Withdraw
al Of Gold from Circu-
lation

For the first time in its history bust
ness in San Francisco has been put
on clearinghouse basis.
This was decided upon yesterday
afternoon at meeting of the San
Francisco Clearing House, as meas
ure of protection against the Eastern
money markets. 1t is feared that the
shortage Of cash In the East, conse-
quent upon the run on the banks
there, will lead financiers to call on
the West for money.
The action of the clearing house
will keep money here.
clearinghouse certificates will be
issued and the banks will in this way
settle their clearinghouse balances
instead of employing gold as former
ly. Checks passed over the counter
for collection will be certified PAY
| able through the San Francisco
Clearing House." and will then pass
current as money. The banks will
pay cash on small checks as desired
|; nd will provide funds for pay rolls,
but money in unusual amounts will
ne refused unless evidence Is given
that II is wanted in good faith and
not for boarding, the object being to
| prevent the latter.
Conditions Are Sound
Local conditions are sound and
satisfactory and affairs here are de-
| Clared to be on the best possible ba-
sis. The public is specially asked to
candle its funds as near normally as
| possible, as such action will tend to
hasten resumption of normal condi-
tons.
Last night the following explana-
ton of the measure taken was given
out by Homer King, president OF the
san Francisco Clearing Housee
San Francisco has taken the same
action through its clearing house as
that taken by the banks in the East
arn centers. At a meeting of the as
'ociation held yesterday 1t was re-
olved to issue clearinghouse certif-
ates and put the financial business
| Of the city on what has come to be
"alled clearinghouse basis. To
| AIRY this into effect It was decided
iurther that they should follow the
methods in vogue in New York, Chi
4 ago and in all the business centers
a the country-making no payments
IN coin except for the reasonable and
'learly legitimate needs of business.
Will Release Gold
Checks received by members of
the community in regular course OF
business should be deposited as usu-
IL, each in his own bank, and they
will be redeemed through the clear.
ng house Just as they always are, ex.
ept that the clearinghouse balances
between banks will be settled by
clearinghouse certificates instead OF
gold.
Cheeks when presented over the
counter for collection will be certi-
| fed Payable through the San Fran
cisco Clearing House. and then may
ne regularly used for all payments.
Such checks will be freely accepted
on deposit at the counters of the
other banks or In payment OF
amounts due the latter. They will
jlso answer for payment of bills,
and, in short, pass current as money.
such checks under ordinary circum-
tances are preferred to money.
Will Pay on Small Checks
THE banks will pay money on
small checks, as desired, and to pro-
vide funds for pay rolls and other le-
climate uses. Should money be de-
manded In unusual amounts IL will
be refused unless evidence is given
that 1t is required in good faith and
for other purposes than boarding. to |
prevent which Is the main purpose of
this step.
Prosperity Assured
This is the first time that the San
francisco Clearing House has felt 1t |
/. ecessary to pursue such action, al |
though It has been taken several
times heretofore by banks in New
York, Chicago and in other impoN
tant cities.
Local conditions are sound and
satisfactory. We are in the midst of
marketing one of the most valuable
crops the State has ever produced. All
UP and down the Coast we are In re-
ceipt of reports of unexampled pros
perity. With these condition. local
~ our financial affairs are on the
Lest possible basis. Suddenly, how
ever, difficulties arise in the East, the
banks there finding It necessary TO
nnnahlnn ihnlr f..n.l. "a nnnInnI Ihn