New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-12-10
To increase Earnings"


seeking an injunction to prevent its OPP
Grafton
To Increase Earnings"
Robert w. Wardrop. president Of the
Pittsburgh Clearing House Association
told the committee the collection OF out
of-town checks free Of charge did not
embarrass the banks financially, but that
the imposition of a rate OF exchange was
10 increase the earnings"
How much does your bank earn?
asked Mr.. Untermyer.
About % or % per cent on its capitali-
cation" answered Mr.. Wardrop.
Isn't that a pretty fair return
Yes. that's pretty good"
But with rate Of exchange it would
be better: is that itY''
Yes, it would be better"
Mr. Untermyer placed in the record the
rules of the Clearing House Association
OF salt Lake City, which prescribe an
ironbound series of regulations governing
the charges TO be made by its members
for practically every service performed
for depositor. A. c. Knox. Of Pittsburgh,
president OF the Mellon National Bank,
characterized these rules as unreasonable,
declaring they practically took control Of
the bank out Of the hands OF its officers.
The operation of the clearing house sec
ton Of the American Bankers Association
was described by Charles A. Pugsley of
New York. formerly a member OF the
executive committee of the association.
He said the section embraced about one
hundred and twenty OF the two hundred
or more clearing houses In the country.
II had made no effort, he said, TO pre-
scribe rules for its members for the con-
duct of their business.
When the committee adjourned for the
day w. r. Frew. president Of the New
York Clearing House Association. was
sworn. His examination will begin to-
morrow's session.
When the committee began the hearing
on the money trust investigation to-day
Chairman Pujo made a statement denying
misleading and inspired" reports Of frlc
ton in the committee.
Barred Out in Baltimore.
The first witness was william w Cloud.
president Of the State Bank of Maryland,
who said his bank had applied for clear
ing house privileges, but had been re-
fused because IL was not member OF
the Baltimore Clearing House, but desired
TO clear through another bank that was
Does the Baltimore Clearing House
prescribe rules which prevent bank
making its own price for exchange on
Cutoff town checks?' asked Mr. INTER
myer
Yes. IT amounts to that" answered
Mr.. Cloud.
But that is throttling competition,
isn't it?"
We'll, wouldn't say thrcttlng,'" said
the witness.
John r. Bland, president OF the United
States Fidelity and Guaranty Company,
who followed Mr.. Cloud, said his COM
pany had sought in vain 10 secure the
privilege Of clearing out-Of-town checks
through its banks OF deposit, which were
members of the association, or TO secure
full membership in the association. With
in the last few weeks. however. he had
been given TO understand that arrange
ments were being made by the clearing
house to take care or the trust COM
panies.
Must Submit to Rules.
Waldo Newcomer, manager of the Bal
timore Clearing House, under questioning
by Mr.. Untermyer. explained that the
clearing house had decided that no
more banks were to be admitted to clear
ing house privileges without submitting
10 the rules of the clearing house.
4hav Were thus admitted he said
they might proceed by unconservative
methods to cut rates of exchange"
Henry Is. Wilcox president OF the First
National Bank OF Baltimore, said he was
one of the members OF the Clearing House
Association who voted against extending
a conditional membership to the State
Bank of Maryland and the Equitable
Mortgage and Trust Company. He said
he had no objection TO both banks COM
ing in az fun members.
A. &. Knox, vice-president Of the Mel
Ion National Bank. OF Pittsburgh, and
brother Of Secretary Knox, testified that
the Pittsburgh Clearing House would like
10 prescribe rates of interest on deposits,
commissions on out-of-town checks Tor
his hank. "and generally run our busi-
ness" He said IL his bank were defeated
in the pending lawsuit and barred from
tho Clearing House Association II would
lose half its business. Then Mr.. Inter
myer asked the question which ne put
10 every witness during the day:
Would you favor a law requiring that
a clearing house before closing up bank
by denying II clearance must consult the
banking authorities and secure the con-
sent of the state authorities In the case
OF a state bank and the national authol-
ties IN the case Of a national bank?
Mr. Knox said he thought such law
would be beneficial