The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-06-07

| thls power as 'morstrous,' and also
raised the question as to whether the
association did not violate the inter
state commerce laws In the banking
Operations Of it's members with out
of-town banks.
The clearing house committee. com
J posed of Frank y. Nandcrlip. president
of the National City Bank. the largest
lin tho country: James G. Cannon.
president OF the Fourth National Bank:
Walter l.. Frcw. president OF tho Corn
Exchange Bank; Richard Dclafeld.
president Of the National Park Bank.
and Otto T. Barnard. president Of the
New York Trust Company. had full
lpower over tho admissions to mcm-
bcrs hip. according to the testimony of
| the witness. and the power OF sus-
pension
Then 1t rests with these hvc men
las to whether they can keep COM
petitor out OF the association" in
lquired Mr. Unternyer Don't YOU
think that is n mnnstrous regulation
for an Institution doing an inter-
/ state business"
.'rhe average banker has moral
] status 10 maintain" replied MY. Shetf'
/ He realizes that he can make more
money by walking straight than crook
ed have never known honorable
men who arc able to fulfil the imam
Q
refused. If the committee took the
| narrow view OF keeping out compel
| itor IL would react against them.
! Merchants and business men, VINO arc
| inc hanks largest customers. would
| never stand for unjust discrimination.
| IF am not speaking OF motives" pur-
| sued the attorney but OF the unbridled
and unlicensed power OF these men.
| Don't YOU think this power should he
! subject 10 jud!-ial review and control!
Mr.. sierr then expressed that the
| Clearing House Association was a vol
urtary Institution, similar TO private
! club. and that no court would hold that
! a voluntary institution could De com
| PEELED TO acccpt as Il member any one
| who could not comply with It's regula-
| tons.
but you know that this great power
exists. Should it not be judiciaily con
| trollcd?"
Il agree with YOU" finally conceded
Mr.. SHEER. Where there is wrong
| II should be corrected"
And this mere whlm. determine
| lion. or order. whatever you are to
| call it. TO stop clearing for non
member banks. Don't YOU think that
| is too great a power without judicial
| review
The witness again gave an amrma
| tive answer. but asserted that In the
exercise OF the power 1T is not so bad
| as il looks citing recent instance
! where the committees power was eN-
| crcised to prevent an institution whose
| officers were mot OF good character"
| from obtaining membership by buying
| out and merging with clearing
house bank.
Good character often depends upon
which group OF banks you belong 70.
doesn't it," qucrier Mr.. Untermyer
"Oh. don't admit that" said the
witness.
Mr. untermycr raised the question
OF the violation OF the interstate laws
when he brought out from the wit
ness that by taxing the collection of
checks on out-of-town banks. the
New York clearinghouse institutions
levied ON the country a tribute OF
over siS.O00.0O0 annually.
This tax, which was the irst i'm
posed by the clearing house in 1899,
amounts to onc-quarter of per cent,
Cr one-tenth of per cent, according
tc the territory from finch the check
originates. Mr. Sherr said, and any bank
charging a less amount is subject, ac-
cordng to the rules. to expulsion after
second offense.
Don't you realize that the collection
Of out of town checks in this manner
Is in restraint OF trader" asked Mr..
Untcrmyer. after pointing out that ii
was impossible for the clearing house
banks 10 compete with each other for
a customers account by offering. for
example, TO collect their checks for
nothing.
Mr.. Sherr admitted that the clear
ing house was IAN important factor in
interstate commerce. bur again point
cd out that it was Il purely voluntary
organization and that bank not car
ing to pay the tax imposed, he said. to-
I 4 vr,tt =.
draw. After Mr.. Untermyer had read
into the record evidence that the cost
OF collecting checks in Boston was
only cents on $1,000. compared with
the charge in New York of from 81 to-
s. 80 per $1,000. be remarked:
"Ranks have been obliged to close
mp because their clearing house privi-
leges has been withdrawn, hoven't
thcy?"
Yes" said Mr.. Sherr
lust a rumor that 1t Is to be eX
PEELED will cause run on the bank,
! won't it?''
"That is liable to he true"
well, then, the idea of a bank al
lowing itself to be expelled on ac
count of the collection rule is incon-
ccivabe" commente dthc attorney.
Il think that il were president
of bank and felt that I was being
! unjustly used could announce that
| fact and withdraw withou& any danger
| to my institution" said he witness.
| He admitted the imposition of the col
| lection tax was not properly function
] nf clearing house associatiOn