The Roswell daily record. [volume] (Roswell, N.M.) 1903-current, 1907-11-05

large sum of money on deposit ia the
large cities. l think the banks in this
city, each of them, have money on
deposit in Kansas City, Denver, St.
Louis and New York. They do so that
they can give you exchange on the
different cities. If you want to pay a
person in St. Louis an obligation you
go to the AMI and they give you a
draft on st. Louis, but they must
have the money on deposit in that
bank to meet hat draft when it gets
there. That is why the banks have
these deposits in these cities. Now
the banks in these larger cities nave
wired here today mat they will not
ship any currency out in payment of
these deposits; that they will only
pay in clearing house certificates.
substantially all cities of any i'm
portance in the United States have
taken that action, so it became a ques-
ton for our banks here to take some
action, and after consultation today
it was decided to organize a clearing
house in Las Vegas. A clearing house
in New Mexico has heretofore been
unknown, but clearing houses through
out the country have been known for
a great many years.
IA 1860, and several times during
the Civil War, in 1873, in 1884, and
in 1898, the principal banks of the
country toe the same action as they
are taking today. and l want to say
this to you that in my opinion the
reason why the panic of 1898 conui1-
ued as long as it did, why times were
hard as long as they were after the
panic of 1898, was because the banks
of the country did not organize clear
they did. OF can see at once what
the effect would be if a clearing house
were not organized. People would
come to the banks and withdraw their
deposits. The banks would give them
their money in specie. or in gold or
currency; they would take it away,
and put it in some stocking, pocket,
closet or misunderstanding it abso-
lutely from business-just the same
as so much blood drawn from the hui
that when the banks undertook to
continue business upon a normal basis
without the use of the clearing house,
that they will have that mucn less
money with which to resume business
in a normal way. Now, you can see
tho+ - 80 d. .e IT, ka- = ~.
country do as We are doing now, when
confidence is restored and business
commences upon a normal basis and
in the usual way, You can at once e
the hanks of the country have got all
the money that the country has ever
had and that they will have that mon
ey to esum business in the ordinary
way; whereas, if they were to allow
it to be withdrawn and hid away they
would have that much less to act with
when they got ready to act.
Now, this action on the part of the
banks ought not to interfere with the
business in the community to any
e extent AS soon as the people of
the community understand the plan.
business should go ahead just the
same as if this step had not been talk
en-. In order to avoid the issuance of
currency on payment of obligations
the banks have decided to issue what
is called a clearing house certificate.
In order that clearing house certif-
Gates may be accepted in just the
same way as cash, your bankers have
undertaken to formulate a plan which
will throw around these certificates
all of the security which it is possible
to throw around anything of that sort.
In addition to the security which
will be thrown around these certif-
Gates. this clearing house will issue
certificates only to the banks. In or
der for these banks to come in on the
certificates of the clearing house. they
viii deposit with the clearing house
collateral security which shall be APP
proved by the board of directors of
the clearing house. For these securi-
ties thus approved the bank win rel