New-York tribune., 1908-01-10
CLEARING HOUSE PLAN
1skoc;afion to Discuss admission of
y Trust Companies.

.-L firsar,ne House committee issued a call yes
.e-say tor a special meeting Of the Clearing House
Association next Monday. when the question OF
san,,ttins trust companies TO membership viii be
.aten I'D and probabiy disposed OF. The commit
see Il was learned, would after several weeks
consideration OF tie subject, recommend to the
association the trust companies be admitted as
members on this plan: Companies carrying fat
= per cent reserve ali deposits full members.
companies carrying Is per cent cash reserve as
associate members.
F-ol,r years ago virtually all the trust companies
reiinauished their Clearing House privileges the
adoption OF the original cash reserve law, and the
action that the association Will take Monday
viii be the most important taken since that time.
Tie plan to take in the trust companies was de-
cided upon after discussion with the officials
of tho companies. which have asked for admission
on some reasonable basis.
Anpiication 10 be admitted as full hedsed men,
hers OF the Clearing House has been made by all
Of the larger companies. On becoming members
the viii be under the obligation to maintain the
same cash reserve that the national banks are
now required TO carry. The contemplated arrange
Viii place the trust companies on an equality
with the banks, and also place them under the
supervision Of the Clearing House This means
that the latter VIII give them the same protection
times Of stress is afforded the banks Ire
plan outgrowth OF tire financial furry Of last
October.
Il Is believed that with tie new plan n effect
Clark Williams. Superintendent Of the State Bank
ing Department, is likely 20 modify his require
uaen1 for 2 weekly statement by the trust COM
panies. Their admission Will make necessary a
change in the constitution Of the Clearing House
Association.
The percentage of reserve 70 be maintained by
81 trust companies entering the Clearing House. as
either full or associate members. applies 70 all
deposits. Of whatever class, il was learned yes
terdav.
An important result of the admission of the trust
companies TO the Clearing House -yil os the Win "
dravaI OF many millions Of dollars OF cash from
the money market between now ana July l. "Lleh
rhe trust conlpanies, desirous of Clearing House
membership will be admitted. If the recommended
ZION Of the Clearing House Committee Is adopted
bv the Clearing House Association a. the meeting
called for next Monday. The trust companies OF
,be citv had on August q deposits aggregatirg
ss4s ass 600 which had shrunk by December 19 the
date OF the last call bv the State Superintendent
Of Banks for reports of condition, to S52l524,eo
falling of Of ss21 SIS o9, which is large TO
suggest in the view of bankers, the value Of
Clearing House membership for those institutions.
assuming that all Of the trust companies would
enter the Clearing House full members, the cash
reserve necessary 10 be held in their respective
vaults would be = Per cent CT the $52l,52i9o. or
sI50SS,cn0
E1t on December % the trust companies held
g. a eo0 specie and $4,000 legal tenders or total
cash resources OF 81 a0ao; that the increasing
ri the reserves By JUy 1 70 the full . per cent
would mean the withdrawal and locking UP of
more than $50 6ro6J6 cash. OF course, not all OF
the trust companies Will so in as full members, and
soma Of the large ones, which never had Clearing
House afhation in the past, will not go IN at ALL
ur estimates by bankers that about so 0oo0 coo
cash would be taken out OF the market the out
come of an arrangement such is in conteTn-
plation
The constitution Of the Clearing House Assoca-
tlon Is 10 be amended II is understood. 10 make
the red1Iireneni of . per cent reserve by mem
isr institutions obligatory Al present the only
basis FOR this requirement is usage.