New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-05-10
ADMITS TRUST COMPANIES
Clearing House Association
Changes Its Constitution.
TO END "WILDCAT BANKING"
Association Also Adopts Plan LOT
Expert Examination OF
It's Members.

Ths Clearing House Association u! @
practically unanimous vote, Only
hanks being recorded in the hes'u'.'
o6o,,od Yesterday afternoon the aihe"u
,nents 10 the constitution when were Pi'
.asoS a ua.l arc IRE effect will he 10
admit 10 full membership in the ASSOCIATE"
any trust company desiring a0n''SS''"
uninpaired capital stock OF WHO" Is e.
oooDol or more and which agrees 10 heeP
IN its own vaults d cash reserve equs' 10
u per cent of its legal net depoSl's' an"
on deposit with Clearing House memoer
hanks an additional 10 per cent the % per
cent total being the same proportion oi re-
serve 10 deposits which member banks are
required 10 maintain. In the case OF the
latter institutions. however the entire re-
serve must he represented by cash held ny
each bank
The association also adopted the resolu-
Ton recommended by the Clearing House
committee last week in regard 10 a pan
FOR examination of its members. ana al
-ected the committee to organize a depart
ment for the purpose on the lines sue-
,es,e6 in its report. These recommends
lions provide for the appointment of ar
examiner and such assistants as may be
needed. at adequate salaries, whose terms
n Office shall he five years, but who may
Re removed within that time in the dis
cretion OF the Clearing House committee.
Tie examiners are TO bind themselves
~, 20 enter the service Of any bank or
banker or person engaged in any business
owe6 with the banking business where
-. information acquired in their capacity
examiners misht be useful TO such con-
Germ or individual within five years after
leaving the service Of the Clearing House.
The examinations 10 be made of Clear
ing House banks and trust companies are
n be absolutely secret and confidential and
the information acquired is 10 be made
known 10 the Clearing House authorities
only II unsafe or irregular conditions are
disclosed by the inquiry. The result of
these examinations. it is hoped will he the
virtual ending Of wildcat banking ex-
smples Of which have been furnished in
his city within very recent years. in the
case OF both banks and trust companies.
Seven trust companies have already
made application for admission 10 Clearing
House membership. while a number of
those qualified for admission, including the
"old-lne companies" are expected to re-
NAN independent The plan OF eXamina-
tons by a highly qualified force Of ex-
rerts. who would make more frequent Wis
rs 10 the various institutions than is pos
sio!e for the examiners Of the state Bank
Ing Department and whose inspections
would be more searching, would completely
safeguard the local banking field II all the
hanks and trust companies were members
az the Clearing House, as Is The case in
some Western cities in which the plan is
.n successful operation
But a considerable number Of the banks
o. this city are "non-member' institutions.
and therefore not within the jurisdiction
Ct the Clearing House, and, in addition 10
the trust companies which will elect not 10
become members. nine OF the trust COM
ranies Of this borough and seven in Brook
in have less than 100000 capital stock,
and thus are prohibited from gaining adj
mission as members Of the Clearing House