The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-06-15
Holland Denies Clearing House
Makes so Millions
By Charging Exchange ON Out
of Town Checks.
BANKS FORCED TO ACTION
Large Amounts Were Drawn
Before Deposits Were Made.
Charges That Pujo Committee
Acted Unfairly Made.

New York, June 15.-Frank A.
| vanderbilt, president of the National
City bank, would have thought it un-
necessary waste of time to write any
letter to the subcommittee of the Pujo
investigating committee which is now
| IN New York city investigating the re-
| Iations of the clearinghouse COM
m1ttee to the so-called money trust,
had he not received information that
throughout the entire country these
hearings are attracting attention sec
ond only to that occasioned by the
political agitation. In New York city
so long had knowledge and experience
with the Clearing House association
and its work that any insinuations or
limitations, any misleading witnesses
or any testimony which seems to con-
firm the views held by some persons
that the New York Clearing House is
is the real center of vital force of the
socalled money trust, would be regard
ed as unworthy of any answer.
President Vanderlip is in close
touch with every part of the country
on the morning of every banking day.
The Telegram phi, the telephone and cor
respondence communicate each to him
information which in the aggregate
represents the entire United States,
so far as commercial and financial
conditions are concerned. In this way
he learns that throughout the country
the impression has gone that the
banks of the Clearing House associa-
ton of New York city make a net
profit each year of fifty million dol
lars amassed through their charges
for the collection of out-of-town
checks. No intelligent banker in the
United States would have been unwill-
ing to say, offhand, that the statement
is absurd. Yet through the adroit
questionings of the very adroit and
1r~TIl iTap1 Nv i'm
termyer, who is conducting the inves-
tigation, for the Pujo committee, the
report has started upon its travels. 1t
will take a long time to overtake it
and correct it.
President Vanderlip, however,
deemed it expedient, even necessary,
that he should write a letter to the
committee setting forth briefly the err
ror that is in this testimony. That
was done for the purpose of inform
ing the rest of the country that the
truth is not contained in this appar-
ent testimony.
1t Seemed Almost Unfair.
There is one feature of the testi
mony of which the public elsewhere
has no knowledge, although Mr.. I'm
the facts. William Sherer, manager
of the clearing house, who made the
statement, has been one of the ablest
managers of the Clearing House aSso-
citation since it's organization. in 1853.
He is a man whose friends are de-
votedly attached to him and he has
no enemies. The utmost considera-
ton and tenderness have been mani
tested toward him by the entire
Clearing House association for some
two years. He is an invalid, and the
complaint from which he is suffering
is organic. To this fact is attributed
the testimony which Mr.. Untermyer
coaxed from him, which is testimony
Mr.. Sherer would never have given
had he been in perfect health when
he appeared as witness. The fal-
tering way in which he corrected the
testimony the day after it was given
and his statement that he had obtain
ed the information at second hand
would have persuaded any judge that
the testimony was not to be greatly
relied upon.
Charges for Check Collection.
There is, however, a very interest
ing history which tells part of the
story of the modern development of
banking behind the rule of the clear
ing house which provides what the
standard and Interchangeable charges
for the collection of checks upon out
of-towns banks shall be. This history
is best illustrated by one or two con-
crete examples.
more influential banks in the. Clearing |
House association decided to make an
into the character of the |
balances maintained at this bank by |
the managers of one of the largest de- |
partment stores in New York. The |
apparent daily balance averaged about /
s15O. 900. So large a balance as that |
justified the granting of good-sized |
discounts. The clerks of the bank made |
'or some days a record of the items /
deposited by the department store for
which the store received immediate |
,redit upon the books and against |
which the store could draw checks. It
was discovered that much the greater |
lart-9O per cent at least-of these
TENS consisted of checks paid to the
department. store by customers who
lived elsewhere than in New York city.
rhe average cash balance was only
bout $4,000. The bank, therefore, was