The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-10-26
UNLIMITED MILLIONS
! POURED into NEW YORK
Encial Institutions Enabled to Stem the Tide
for Another Nerve-Wreck-
ing Day.
Several Trust Companies and One National Bank Suspend
Savings Tied Up by Sxty-day Law.

There was the usual crop of alarmist
reports during the day, one of them
to the effect that a large dry goods
house was seriously involved. but this
as we'll as all the other rumors, proved
to be false.
Clearing House Certificates.
A further encoura ging development
of the afternoon, the good effect of
which can scarcely be overestimated
was the decision arrived at unofficial
ly to issue clearing house certificates,
probably tomorrow. There will be q
full meeting of the Clearing House as
ISOLATION tomorrow morning at 10
o'clock. for the purpose of taking of
fetal action for the issuance of these
certificates. The immediate effect of
this will be to enable the banks to set
tie balances between themselves with
these certificates, and thereby release
large sums of money for the regular
needs of business.
Currency Question Settled.
The decision to issue clearing house
certificates is likely to end any further
anxiety in regard to the supply of cur
rency. The decision means that here
after large balances against any par
tfcular bank in the clearing house can
be settled in clearing house certificates
and the bank allowed to retain It's cash
to meet other demands. The certifi-
Gates will be issued as usual, only upon
the deposit with the clearing house
committee of acceptable securities, and
only in amounts as the clearing house
committee Shall approve, but in the
case OF bank whose affairs are sound.
there will be no arbitrary limit put to
the assistance of this sort to be rem
dered when needed.
Guarantee Against Loss.
The first issue of clearing house
certificates was in 1860, and there were
several issues during the period of the
war. Other issues occurred in 1873 and
1884. The last occasion on which they
were awaited OF was in 1893. The
clearing house certificate is practically
a guarantee by the banks in the clear
ing house that it shall be redeemed at
par, but the clearing house banks are
protected against loss by the fact that
this class of securities, either CONNER
cial paper or stocks and bonds, are
required before the certificates are is
sued. The certificates are used only
between banks IN the settlement of
their balance at the clearing house
They do not appear i'm general circu-
latfon. but by relieving the banks of
the strain of large debit balances at
the clearing house, they enable them
TO keep their cash reserves COMPARE
lively intact. 1t is believed by com
petent bankers that an issue of $780,
100000 will be the outside limit of
what viii be required on the present
occasion.
Expected to Restore Confidence.
1t is believed that the mere fact that
they are to be issued will so far restore
confidence that runs upon banks will
cease, so that it will not be necessary
to keep the certificates outstanding for
any considerable time. Already the
strong city banks are receiving large
deposits from persons who have with
drawn their money from the banks and
trust companies which have fallen I'M
der suspicion. This does not preclude
the fact that considerable amounts
have been put in safe deposit boxes
and thereby withdrawn from circula-
ton. but it is believed that the issue
of clearing house certificates and the
consequent restoration of confidence
will result in the return of this money
to the bank within short time.
Foreign Exchange Lower.
Late in the afternoon a favorable
light was cast upon the prospects of
imports of gold by a sudden fall in the
rates for foreign exchange. The mar
ket has been practically at standstill
for several days, with large offerings of
bills and few takers. This afternoon
however. the rate dropped to S488.
which practically makes imports of
gold impossible at profit. Leading
bankers and foreign exchange houses
have been looking for this development
but hardly expected this morning it
would come so soon. The tide of gold,
once ii sets in this way, will undoubt-
eddy reach a large volume, in view of
the considerable amounts due this
country for outgoing crops and for Sc
curitieS
Chance for Europeans.
While the present market is not one
to encourage the general public to buy
American securities, there are always
shrewd observers in Europe who are
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