The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-06-15

allowing the department store available
credit against which to draw its own
checks while at the same time these
checks were in process of collection.
Returns were not received from man.
of them under a week and from some
of them under two weeks. But whe4f
the bank officers asked the managers
of the department store if they woui
be willing to be charged a small amount
for the collection of these checks, the
equivalent, approximately, to the in
terest upon the money represented by
the checks, the managers refused, say
ing that there were plenty of banks in
New York that would be glad to get
the account.
Another Example.
Another large bank had the accoun:
of the publishers of one of the leadir :
low-priced magazines of New York. The
average apparent balance was about
g. hundred thousand dollars. This bal
ance was made up chiefly of checks
sent to the publisher from all parts o
the United States, almost all of them
for small amounts Sometimes it re-
quired two weeks to collect these
checks, yet the publisher was permitted
to draw his own checks against this
apparent balance. He was told that in
justice to itself the bank would be
compelled to charge him for the col
lection of the checks. Thereupon he
took his account away.
A Bad Principle.
There is no competent banker in the
United States who would not say that
the principle is a bad one. In the in
tense competition which has prevailed
in recent years, and which has justified
some banks in paying interest upon
daily balances, banks were disposed tc
accept out-of- town checks and give i'm
mediate credit balances for them al
though the checks were in process OF
collection. The clearing house at last
some Is years ago, made careful in
vestigation into this matter. This in
vestigation led to the practically unan
imous opinion that, in order to put an
end to a bad banking practice and III
order to stop unfair discrimination, the
associated banks of the clearing house
would do we'll if they agreed upon
standard rates for the collection OF
these checks, basing those rates upor.
the zone systematic more distant bank
upon which the check was drawn the |
larger the, rate. !
Furthermore, in order to prevent un- |
foir practices the associated bank |
agreed to exact penalties for violation |
of the rules and to expel if violations |
were continued
out of that rule has grown the ac- |
cusation. apparently fortified by testi-H
nony. afterward contradicted, that the /
ton are making some 80 millions year |
profit through their charges for the |
of out-of-town checks. Re
liable and detailed testimony could be |
given by every bank in New York |
which would serve to show that little |
mr. no profit is made in this way the
banks doing we'll if their charges for
the collection of out-of-town checks,
which is really no more than a charge
for exchange have enabled them &c
come out about even.
It must be reported that the atti
tude taken by the counsel for the Pujo
committee as he has examined wit
nesses has not been such to inspire
confidence that he is anxious accurate
". impartial1y and thoroughly to in
,orm the committee respecting the New
York Clearing House association. Mr.
rrntermyer might produce testimony
hat would be of very great public in
crest and Importance. Some of it
would be sensational, but in a highly
honorable way. If he were able TO
show, for instance, how one of the more
members of the New York
House association, in Coop
ration with the Riggs National bank
II washington and the utilization of >
;pecial train service between Washing
on and Baltimore, was able on the
Instant to save one of the Baltimore |
rust institutions, then he would fur
,ish the country with an object lesson |
which would be of value. If he were
.bIe to bring out upon the witness
stand the fact that one of the great |
banks of New York within a few hours
after the San Francisco earthquake |
sent one of it's executive officers with
million dollars to San Francisco foi |
The y,14rDoSo of aiding the hanks in that