The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-12-10
CLEARING HOUSES
SUBJECT OF PROBE
Their Domination OF Banks In
CURED Into by Money Trust
Committee.
ELEVEN BANKERS ON STAND
Evidence Given That Iron-Bound
Rules Hamper Conduct OF
Financial Institutions.

Washington. December Clearing
house domination of banking institu-
lions was the subject of the first days
examination OF witnesses in the House
Banking and Currency Committees in
vestigation Of the sO-called money
trust" to-day. Eleven bankers. repre-
serting institutions in Pittsburgh.
Philadelphia and Baltimore and New
York testified. Samuel UnteTmyer.
counsel fo.- the committee. in conduct
!ry the examination. endeavored 20
show that there was a general move
ment among clearing houses to impose
on banks rule enforcing the coIlec-
ton OF commissions on out-Of-town
checks collected by banks In this
connection he ascertained that the
Baltimore clearing house declined 10
admit the State Bank Of Maryland TO
a membership because, as clearing
member. It would not abide by the
clearing house rule enforcing such col
lections.
From the Pittsburgh bankers MI.
Uaterrnyer ELECTED that a suit was
pending in the courts TO prevent the
enforcement OF d rule for collecting
commissions on Out-of-town checks,
which was adopted in conjunction wisn
clearing houses in Cincinnati. Cleve-
tionai. Farmers Deposit and Lincoln
National Banks. Of Pittsburgh. declined
to accept the rule. and now are seek
Ing an injunction to prevent its opera
ton.
Robert ". Wa-drop. president OF
the Pittsburgh Clearing House Asso-
citation. told the committee that the
collection OF out-of-tcwn checks free
Of charge did not cmbarrass the banks
financially. but that the imposition 81
a rate Of exchange was fcr the purpose
of Increasing the earnings"
Mr. Un;ermyer placed in the record
the rules Of the Clearing House Asso-
citation Of salt Lake CITY. which pre-
scribcd an iron-5ouud series % reEu
latlons governing the charges 20 b.
made By its members fc- practicaliy
every service performed for for q de-
poSitor. =. 9. Knox. Of PittsbuTgh.
president 81 the Mellon National Bank.
declared these rules practically took
control Of The bank out 81 the han1s
Of It's officers.
Tho operation % the clearing house
section OF the American Banker Assoc
citation was described hy e.. y. Iugslcy.
% New YORK forrlsriy member ~
the executive committrc ~ ere assoc
clation fIe said thr section embraced
about 1e0 e The 2H1 vr more clearing
houses in thc country 10 had made
no effort ne said. 90 prescribe rules for
ffs members IN connection with the
conduct 81 their business.
\ general dcfeusr ~ The clearing
house system of balk.nr and O. decd
ed stand against government rfruia-
ton 81 clearing houses wcrc made TO-
day BY waldo Nevcomcr. manager OF
tho Baltimore Clearing House.
Tho committee took MP thc clearing
house situation IN baltimore. reports
o. two BANKS. which had been refused
conditional ricmi'crsh.p in the ASSOC
ciasion. arncorcd Managcr Newcomer
explained that the banks we're not adj
r-ittcd because as conditional members
they would not BE- bound p The rules
Of the association a. % out-of-tovn
check cxchange charges and 60 other
(Coatinacd on seventh PsgeJ