New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-05-11
BANKERS STUDY PLANS
BACK IN CLEARING HOUSE.
Trust Com panies Again Discuss Re
turn to Utilization.

Plans for bringing the trust companies Of the city
back into affiliatIon with the Clearing House are
again under serious discussion. One OF those
Gently presented contemplates the organization of
a state bank which would be admitted 10 the
Clearing House under the usual conditions, the
stock Of which would be owned by the trust com
panies. This bank would have its principal
function the clearance of trust company checks.
A variant this plan which is also being con-
sidered is for the purchase by the trust companies
of institution already a member OF the Clearing
House. These propositions, however, are said by
prominent trust company men to be still embryotic
For several years the trust companies with prac-
tically exceptions, have had no connection with
the Clearing House with one another so that
banks having trust company checks among their
deposits have been obliged to send their messen-
gers to collect them at the trust companies bank
ing offices. The same has been pursued by
the trust companies in the collection Of checks
drawn upon another.
The cumbersomeness of this arrangement and
the possibilities of danger arising from the lack
Of cohesion have always been admitted and were
especially evident during the panic of 1907. Efforts
have been made from time time 10 form
trust company clearing house as a partial i'm
provement the present state of affairs, but with
out success
The first suggestion OF trust company clearing
house was heard in 1899. when the Clearing House
Association adopted resolutions which placed the
trust companies on the same footing with the non
member banks. requiring them to have been in act
Hai operation Tor at least year bSIore DelnR ;iu-
mtted to Clearing House privileges, TO be exam
tned by committee of the Clearing House and to
furnish weekly statement of condition.
In April 1902. amendment TO these resolutions
was adopted. requiring each institution thereafter
permitted clear through the Clearing House to
keep In its vaults such cash reserves the Clear
ing House committee might determine. it being un-
derstood by the trust companies already affiliated
with the Clearing House that this requirement
probably would he extended them.
No stated reserve had up that time been
quired Of the trust companies. and the reserves
maintained by them in many instances ex-
tremely small The Clearing House committee
fixed the reserve at per cent on and after June
I. 1903 7i2 per cent and after February 1, 1904
and from 10 TO Is per cent In the discretion Of the
committee. from June !, 1904
On April Is. 1903. a few weeks before this rule
Iecame operative the Union Trust Company, which
cleared through the Hanover National Bank and
was the first company 70 establish relations with
the Clearing House. withdrew from connection with
the latter institution and the of the next
few months its example was followed by most Of
the other trust companies OF New York and Brook
Ign which had enjoyed Clearing House privileges.
Many efforts have since been made to bring the
trust companies and the Clearing House together
again William A. Nash. president OF the Corn EX-
change Bank. having been especially active in this
movement. In October 1895 the Clearing House
Association unanimously adopted a resolution
offered 10y him. requesting the Clearing House com
uttee consider the situation. to the end that
harmonious relations may be renewed. on a basis
that will insure the return OF the trust companies
TO the Clearing House either members or
through representative banks
One proposition made that the trust com
panles should he admitted associate members.
but without power to vote. II they would agree 70
keep Is per cent reserve but this was not received
with favor by the trust companies. and no action
taken g.
In January. 1895, the Clearing House Association
adopted resolution providing for the admission
Of trust companies full members condition
Of their keeping cash reserve OF not less than
2 per cent. the same percentage as that required
OF member banks. The trust companies are now
obliged by the state law 10. keep Is per cent cash
reserve IN their vaults.