The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-06-07
DECLINE TO REPLY
Bankers Do Not Like Questions
About Their Business.
Resent Demand That They Tell
About Business.
TRUST is NOT POSSIBLE
Eastern Bankers Certain There
"Ain't No Such Thing"
State Bankers Decline to An
swer PuiO Questions.
TRUST IS NOT POSSIBLE

| New York, June IA subcommittee
! is to take testimony in New York for
i the full committee identified by Con-
( gresham Pujo's name which has begun
| to investigate banking conditions, chief
| ly with the view of learning whether OF
not a complete or partial monopoly of
funds and banking credit has been or
can be secured. Presumably this SUBJ
committee will begin by making in
uuiries of officers of the Clearing
| House association. Whatever objections
may have been made by national banks
to the demand of the committee that q
list of questions be answered and so
answered that if there are frankness
and thoroughness in the answers then
the entire operations of our national
bank will be exposed to the COMMITTEES,
there will be no objections to the giving
of testimony which shows the relation
of the Clearing House association OF
New York city to the banks of the
city. To be thorough, however. an in
vestigation of this kind should be MADE
in all of the larger cities Of the east
in which clearing house associations
are established.
it is incredible that any investiga-
ton of the relat lions of clearing houses
to the banks can thoroughly be MADE
without disclosing the high develop
ment of the principle of cooperation.
How effective cooperation of that kind
is will be made plain to the committee
if questions are asked the officers OF
the clearing house of New York city
whose answers will show what part the
Clearing House association took in
checking and ultimately overcoming the
monetary panic of 1907 Complete an
swers to questions of this kind will
serve to end the suspicion that that
money panic was engineered in New
Ia cf
chiefly for the purpose of enabling the
United States Steel corporation to Sc
cure control of the Tennessee Coal az
Iron company. For the larger banks OF
New York city, many of whose officers
are identified with the direction of the
Clearing House association, cordially
approved the proposition that ire
clearing house could issue its ceruf-
icates upon the deposit with it of GER
tain of the securities or assets of the
banks, these certificates being good Tor
the payment of balances at the clear
ing house. A large part of the assets
thus negotiated as security for clearing
house certificates was commercial pa
per The experience of New Y ork
Clearing House association. as we'll as
similar associations of other cities OF
the United States, demonstrated con-
clusively that there is no finer secur-
ity upon which to base the issuing OF
currency than commercial paper so
far as is known, not one dollar OF thus
paper failed to respond on the day
when payment became due.
a Good Object Lesson.
So it will be assumed that if the
great banks of New York, some of
which have been associated i'll the pop
ular mind with the so-called money
trust or banking monopoly cordially,
even earnestly, united in approving of
the proposition that the Clearing House
association issue certificates, then there
could be no justification fer the sus-
picion that the so-calleI money trust
SO manipulated banks and credit and
so controlled cash as to make the mon
e. panic Of 1907 inevitable.
4 Great Examination.
The Pujo committee could not pos
sibly investigate the condition of Var1-
Gus trust institutions of New York City
as thoroughly as did a committee Of
the Clearing House association a year
ago. Almost all of the state-chartered
trust institutions of New York City
were anxious a year ago to be admit
ted to full membership in the Clearing
House association. They were compelled
by tbs rules of the clearing house to
submit to such investigation by this
committee as would expose every de-
tail of the condition of the manage
ment of these institutions. The result
OF this work was informally and yet
approved ny the super
intendent of the state banking depart
ment. The committee found almost
all of these institutions not only in a |
healthy condition, but in very strong
condition. The banking methods
adopted by all these institutions are |
suggestions that certain customs be
modified and It was essential, in order /,
to secure admission to the Clearing i
House association. for these institu-
tions to have a capital of not less than |
one million dollars. TIE result of the |
was the admission Of |
about twenty trust institutions, with |
twenty-five millions of capital, to the |
House association The mem :
bers of the committee which made the ,
examination are not onI.- willing to tes-
tify to the Pujo committee, but will
an opportunity to tell the
whole story of these Investigations. ,
They will serve to show that it is prac-
tically impossible in the opinion of |
members of the clearing house COM
nlittee to create any permanent. money
trust or monopoly of banking credit. /
Some of the institutions are absolute i
~ independent of any but the most .
formal business relations with the ma
ticnal banks.
Why They Object.
Nearly all O. the leading national |
banks of New York City have informed |
Chairman Pujo that they cannot, un-
Ter the resolution which empowers the |
to act, answer the ques-
tons which he, as chairman, has SUBJ
mitted to the bankers.
These answers. however, differ in I
the explanation of the refusal Some
Of the bank officers have informed
Chairman Pujo that under the ma
tional banking act they are instructed
to make accurate and detailed reports
o. their condition exclusively to the 1
of the currency. Others
have replied to the demand made by
Chairman Pujo by saying that while.
as matter of courtesy, they would
be willing to answer some of the ques-
ions, they could not, on the other