The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1912-12-10
MAY KEEP Eye ON
CLEARING HOUSES
Money Trust Probers Indicate In.
tention to Recommend Incor-
poration and Regulation.
BANKERS FAVOR FORMER:
STRONGLY OPPOSE LATTER
Committee Hears of Conditions in
Baltimore, Pittsburg and
Philadelphia.

The Money Trust committee of the
House, in the course Of yesterdays hear
ing, indicated pretty clearly that it will
recommend the Incorporation OF clearing
house associations, and probably govern
mental regulation of these institutions.
Samuel Untermyer counsel for the COM
mittee, repeatedly asked witnesses IL any
objection could be made to the incor-
pcration of these powerful banking
agencies, and the replies that he received
from well-known bankers from Balti-
mere, Pittsburg, and Philadelphia were
more favorable than otherwise to the
idea.
Also the committee counsel frequently
questioned witnesses in regard to the
EdViSability Of putting a Limitation upon
some powers Of the clearing houses, nota-
bly, the power TO discontinue clsarances
for banks, and thus practically drive
them out OF business. The form of this
limitation. as suggested by counsel for
the committee, was the, requirement Of
final approval by State banking authori-
ties, In the case OF State banks and trust
companies, and of the Comptroller of the
Currency in the case of national banks.
Conditions Im Pittsburg.
Yesterdays hearing practically completed
the testimony in regard to the clearing
house phase of the investigation. the
Committee having probed into the affairs
Of the New York Clearing House early
in the fall The most interesting dis
closures yesterday related to the Pitts
burg Clearing House Association. II was
shown that that association had not only
adopted a rule regulating the business
affairs of members and nonmembers in
Fittsburg, but also had co-operated with
clearing houses in five other cities to en-
those industrial centers. These rules in
Guided a uniform commission upon out
oi-tOwn drafts and collections and also
thC power TO fix the rate of interest To
be paid by the members and nOnmembers
banks that cleared through the institu-
tons having direct affiliations with the
clearing house.
The cities besides Pittsburg which are
involved i'm this concerted clearing house
movement are Cincinnati, Louisville,
Cleveland. indianapolis and Columbus.
The intimation plainly conveyed by
questions asked by committees coun-
sci was that the cooperation among
these six cities within a somewhat linn
tied area was for the purpose of
Strengthening the hold of each individual
clearing house and the banking facili-
ties OF each city by forecIosing the pos
sibility of customers in one city doing
their banking business with institutions
in a nearby city.
Alfred c. Knox. brother of Secretary
Knox and vice president of the Mellen
National Bank, was one of the witnesses
who told OF the rule passed by the
Pittsburg Clearing House Association.
The PittsburE association has twenty
t"ur members and Il9 nonmembers who
clear indirectly through it.
To Probe stock Exchanges.
Robert Wardrop. president OF the
Pittsburg Clearing House Association,
and also head of the Peoples National
Bank of that city: Francis V. Reeves.
president OF the Girard National Bank
of Philadelphia; W. W. Cloud. president
of the State Bank of MARYLAND, Balti-
more: John r. Bland. president United
States Fidelity and Guarantee Company.
EatimUre: Waldo Newcomer. president
Baltimore Clearing House Association:
Eugene LeverinE, president National
Bank Of Commerce, Baltimore: Henry
Z. Wilcox. member Baltimore Clearing
House Association; Harrison Nesbit
president National Bank of Pittsburg;
{. A. PugsIey. president New York Bank
ers' Association, and W. Z. Frew. presi-
Dent New York Clearing House, also tcs-
dfied.
The Money Trust committee to-day VIII
take up its investigation of the New
York and other stock exchanges. Off
GERS and members of the board OF gov
eTnOrs Of the New York exchange have
been subpoenaed. The members Of the
committee intend 10 make this investiga-
ton most thorough, and it is likely that
several days will be consumed on the
New York Stock Exchange alone