The Washington herald., 1907-10-27

New York, Oct. 25.-The Clearing House
Association decided to-day. as q further
relief measure, to put the clearinghouse
certificate plan into effect at once. Three
fourths Of the days debit balances Of the
various banks were paid TO the creditor
banks in certificates, put out by a newly
appointed committee as soon as possible
after the association took action
At about the same time that this Issue
Of loan certificates We're voted, the clear
ing house learned by kilograms from the
clearing house associations at Pittsburg.
Philadelphia. Baltimore. and Boston that
the same plan viii be carried into effect in
all probability in these cities on Monday.
Secretary Cortelyou considered it mad
visable for the government 10 enter the
foreign exchange market, and gave no as
sistance 10 efforts for the importations Of
gold.
Engagements for imports were made
nevertheless. the National City Bank def
nitely completing the arrangements to
bring in 10000. The engagement was
everywhere considered a strong factor for
further improvement, but IL was realized
that the money could not arrive until
after this week, the Treasury Department
making no deposits against the engage
ment Of gold for import
Decrease fn Surplus.
The associated banks IN their weekly
statements showed a decrease Of S2.-
ooJ.ooo in surplus reserve; an increase OF
So S55. o10 in loans; a decrease Of S1291I. 600
in cash holdings, and a decrease Of s. .s3g.-
oo0 In deposits. tt was apparent that the
increase in loans was due to the assist
ance rendered 70 banks from which there
have been Withdrawals and that the de-
crease in cash holdings was caused partly
by such Withdrawals and partly by ship
ments Of currency to the interior.
The demands 4, cash from Brooklyn
I Institutions were very heavy on account
Of q withdrawal Of deposits in that bor-
ough. consequent upon the temporary sus-
/ pension Of certain Brooklyn banks and
trust companies.
The interior also drew heavily and in
many cases. in The opinion OF many bank
/ ers. unnecessarily.
These Influences, combined with the al
ready noted fact that import engage
ment Of gold did not supply ready avail
able funds. influenced the clearing house
committee TO call a meeting Of the as
/ sociation 70 act upon the question of Is
suing certificates.
Elasticity l. Needed.
BY bankers who favored the issue Of
certificates il was also argued that an In
/ creased elasticity in currency was also
/ demanded by the condition of the foreign
/ exchange market. in which quotations
were largely nominal, and as a concur
/ rent incident by the cessation IN exports
( Of cotton and the cereals.
A free movement Of the crops from this
TO other countries. il was everywhere
! argued, was one Of the most important
things remaining To be brought about
/ In no way. il was argued, could Il more
/ easily be brought about than by the use
/ OF the supply Of circulating money in
/ loans 20 answer TO purchase Of exchange
I bills. which, of course, can be made more
plentiful under an arrangement whereby
/ the banks pay their Indebtedness TO one
another in certificates secured by cOIlat-
! eraI, leaving the cash holdings for the use
/ Of depOsitors And for the promotion Of the
commerce and business Of the city and
/ country.
The interests Of bank depositors are IN
no way prejudiced by the Issuing OF clear
ing-hOusa certificates These pass en-
tirely between banks and under no cir
! cumstances pass beyond the banks.
Foreign Exchange Weaker.
The foreign exchange market to-day
was weaker than on any previous occa-
sion in the recollection Of many we'll
known exchange experts. Gables sold at
the extraordinary low rate Of 4S2l2, and
there were some transactions in demand
bills at the almost unheaTd of price
of 4A Ii. in fact. il was possible 20
secure bills at almost any price. The
great difficulty IN the market was
scarcity Of bidders There was an over
abundance Of offerings
As on Friday, all transactions in the
stock market were for cash, and the to-
tai sales was but $4,000 shares. There
was little feature to the market with the
exception that generally IT was fairly
firm. The close was irregular with ad-
vances in most speculative shares
The clearinghouse committee advanced
about S200o.000 to the banks from which
there had been heavy Withdrawals. Most
of the advances were due to Withdrawals
in Brooklyn. The advances of to-day
made a total since the movement began
ral4l ll1