New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-11-12
BANKS MAY CURTA|L
DAY LOAN" BUSINESS
Supreme Court Decision Leads
TO Protective Means Be-
ing Discussed.
STREET STIRRED BY TALK
PROPOSAL of Stock Exchange
Taking Care of Mem
bers' Transactions
Revived.

| In view of the determination OF sew
, eral large Wall street national banks 10
change the present system Of day or
clearance loans" TO Stock Exchange
houses. as result Of the recent decision
Of the Supreme Court against the Ma
tionaI city Bank in the so-callcd Hooking
! pool case. il was learned Yesterday that
the brokers have been reviving the old
rumors of Stock Exchange bank.
Such an institution. it was stated. would
contain all the deposits Of the Stock EX-
change houses which. instead of going
to outside banks. could obtain sufficient
! loans for the days requirements at their
own bank Opponents Of this plan claim
! that # would not work out in practice
and that dissensons would result III
charges OF favor!tism.
There was much excitement after tie
publication on one Of the news tckers
that "at a secret meeting of the Ma
tional City, the Chase National. Chatham
Mechanics and Metals and other banks
which make large loans to brokers. the
chairman OF the committee being Vice
/ President Kllborne OF the National city
Bank. it vas decided that in the future
| they would not allow any generalization
Of checks"
This announcement was at first taken
at It's face value by the brokers. ami
there was wondcrment over what Would
be the banks method Of procedure in the
future Of Offering the stock brokers credit
on a DAYS business.
MIR Kpborne vas much surprised when
asked 10 disclose the full nature OF yes
terday's meeting and to explain the plan
which the banks had in mind. He denied
that a secret meeting had been held ana
charged that some person who claimed
10 represent him had called up the news
agency and given It false information.
1T is true. nevertheless added Mr..
Eilborno. that the decision Of the United
States Supreme Court in the Hooking pool
case will result in some plan which will
AMPLY protect the National city Bank In
the future But the Stock Exchange
members can rest assured that they viii
be afforded ample time in which to pre-
pare themselves for any changes n the
present system"
n f. understood that the National CITY
Bank has ALREADY decided TO change us
present system OF making day loans.
and that several other OF the larger ma
,ional banks will do likewise. To this end
the banks probably will put the case be-
fore the Stock Exchange officials and
sock their cooperation. IL IS probable.
however. that such action will be deferred
until the bankers themselves can agree
on definite course.
one broker commenting upon the sug-
gcstion made by several bank officers
that the Stock Exchange authorities form
a guaranty company. with a large capt
taIization. 10 protect the banks against
losses characterized II as ridiculous iIe
declared that the banks made FUZZY
81 10000 year out Of tho balances de-
posted by brokers. and that the losses
sustained on Stock Exchange losses have
been innnitcsimal compared with the
profits.
IT has also been suggested that sys-
tom Of fortnishtly settlements be instl-
tuted between the Stock Exchange houses
and the banks. as obtains In London. IL
vas stated that what would happen in
this case however. would be that the
risk Of trading would fall more upon the
individual traders. as between themselves,
rather than between tho banks and their
customers This involves question
which makes IT particularly doubtful
whether the Stock Exchange would favor
such a proposal.
The impression prevailed yesterday that
there will be no concerted action by any
Of the banks. but that each institution
Will act Individually with its clients