Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-12-09
Head of Baltimore Institution On
of First Witnesses.
TWO BANKS NOT ADMITTED
Refused Conditional Membership Be-
cause They Could Not Be Bound
by Certain Rules.


by Waldo Newcomer. manager Of the
Baltimore clearing house, one of the first
witnesses examined before the banking
and currency committee OF the House
when it resumed its investigation of the
so-called Money Trust
The committee took up the clearing
house situation in Baltimore and repre-
sentatives of two banks, the State Bank
of Maryland and the Equitable Mortgage
and Trust Company. who had been re-
fused conditional membership in the as
sociatiOn, appeared.
Then Manager Newcomer appeared.
He explained that the banks were not
admitted because, as conditional MEM
bers. they would not be bound by the
rules of the association as to out-of-town
check exchange charges. and other rates.
and would be in a position to compete
at an advantage with the other members
of the association bound by the rules.
Thinks Them Beneficial.
In a prolonged discussion with Samuel
Untermyer. counsel for the committee,
Mr.. Newcomer declared that clearing
houses throughout the country were
beneficial institutions and that any at
tempt at government regulation would
hamper their efforts.
would you object to a law providing
that before a clearing house could close
up bank the government bank inspect
ors should be consulted?" asked Mr..
Cntermyer. "
"Yes," answered the witness. "In times
of stress there would not be time to con-
suit with the government authorities.
When the House committee began the
hearing on the money trust investigation
Chairman Pujo made the following
statement: .-----
'In resuming this inquiry the commit
tee feels that the many unauthorized.
misleading and inspired reports that
have been circulated concerning its
that the public should be warned against
placing any credence in them. There
has been a consistent hostile effort in
certain directions to embarrass the in
quiry No statements have been: or viii
be, made or authorized on behalf of the
committee at any time, except such as
may be openly announced at the hear.
ings.
Denies Report Of Friction.
''At no time has there ever been any
friction, misunderstanding or difference
either among the Members or with or
has prevailed from the beginning and the
REPORTS to the contrary have been sheer
fabrications. Nor is there any authority
for the persistent published report as to
remedies or legislation. The
question never has been before the COM
mittee and it would be premature to con-
slider it. The committee Is not yet in pos
session of the facts on which to base
judgment. 1t has barely reached the
threshold of the inquiry. SO that any opin-
lon as to its action is decidedly prema-
ture, to say the least.
Attention is called to the announce
ment made at the outset of the hearings
last May and since frequently repeated
that the terms of the resolution under
which the committee is acting cannot be
fully carried out unless or until Congress
shall have enacted the bill that has pass
ed the House and is now pending in the
Senate removing all existing doubt as to
the power of the committee to inquire
into the part. If any. that is played by
the national banks in the alleged concen-
ration and control Of money and credit
Meantime the committee will press
forward with the other heads Of the in
Quiry with the view of submitting an
report. accompanied by such
recommendations as may be deemed
wise.
Reason for Postponement.
1.-THE postponement over the presiden-
tial campaign was taken pursuant to the
frequently announced determination that
this important investigation should not
be subject to the criticism or suspicion of
being in any way Influenced by or con-
nected with political exigencies.''
The first witness was William ". Cloud
president Of the State Bank of Maryland.
Samuel Untermeyer. counsel for the COM
Cloud outlined the banking situation in
Baltimore. described the operation of the
Baltimore clearing house. and said his
bank was not a member Of the clearing
house.
He said his bank had applied for clear
ing house privileges. but had been re-
fused. because 1t was not q member of
the clearing house, but desired to clear
through another bank that was a men,
ber Of the clearing house. Other banks.
he said, enjoyed this privilege.
Mr.. Cloud said that his bank had not
applied for full membership in the clear
Ing house, because 1t did not wish to COM
ply with the clearing house rules regard
ing charges for exchange on Out-of-tOwn
checks.
Cannot Make Own Price.
Does the Baltimore clearing house
prescribe rules which prevent a bank
making its own price to a client?" asked
MIR. Untermyer.
Mr.. Cloud.
But that is throttling competition, isn't
it?''
We'll. I wouldn't say throttling." said
the witness.
Among the witnesses who were on hand
to testify today were G. A. Pugsley, pres
ident of the New York Bankers Associa-
ton: w. +. Frew chairman Of the New
York Clearing House Associations: Charles
-. Rushman. counsel for Mr.. Frew;
Robert WardrOp, president Of the People
National Bank Of Pittsburgh. and Harri-
son Nesbit. president of the National
Bank OF Pittsburgh
john r. Bland. president of the United
States Fidelity and Guaranty Company.
followed Mr.. Cloud on the stand
Mr.. Bland said that his company had
been seeking in vain for some time to
secure the privilege of clearing out-Of-
town checks throu .h its banks Of deposit
which were members Of the association
or to secure full membership in the as
sociation. Within the past few weeks.
however. Mr.. Bland said. he had been
given to understand that arrangements
were being made by the clearing house
to take care" OF the trust companies.
Application Refused.
"You had been informed that your ap-