The Richmond Virginian. (Richmond, Va.) 1910-1920, 1914-09-17
FINANCIAL HISTORY
REPEATS ITSELF
EXISTING EMERGENCY MEASURES
SIMILAR TO THOSE USED
IN 1914.

now existing bear a striking resem %
blance 10 those described In the minutes
of the board of directors OF the Bank
OF Manhattan for August and Septem-
Der of 1914. In that year the United
States passed through tho most serious
phase OF Its war with England. which
lasted until February OF 1915.
According to those minutes. parts of
which have been printed in pamphlet
form, committees from all the banks
of New York held tho first general
conference Monday. August %. 1914. at
the office Of the Bank of Manhattan, 40
Wall Street. The second meeting was
held August 2b, while the city of wash
ington was still burning. to consider
the following resolution Of "A commit
tee of merchants and traders of the
city Of New York:
Resolved. That a committee OF seven
persons be appointed to wait on the d.
krectors of the respective banks OF this
city, and request of them that they viii
suspend their payments of specie on
the 25th. and that this meeting pledge
themselves to receive bank paper In
payment as usual
In reply the general committee OF
| banks passed the following resolu-
lions:
| Resolved unanimously. That in tho
| opinion OF this meeting there does not
| exist any necessity for a suspension OF
| payments In specie.
| Resolved That IL 10 the duty of the
| banks TO make every effort and every
| necessary sacrifice. TO continue their
| payments in specie, and that with a
continuance of tho public confidence.
| 1T ia the unanimous opinion Of this meet
| ing that there is no doubt they Will
| be able to do 30.
| AT the next meeting of the general
committee. on August ~. the spirit of
/ cooperation among American bankers
was evidenced in the following resoiu-
| ton:
Resolved. That II any bank shall be
called upon for payment of specie be-
| yond its present ability to pay, every
aid shall be given by the other insti-
tutions. consistent with their own
safety.
An Emergency system.
| Despite the strong efforts TO main
| tain specie payments, the financial
tstrain became SO great that It became
necessary to suspend such payments,
| and an emergency system for settling
| daily balances was worked out. This
WAS without doubt the foundation of
| the system of clearing house loan GER
tifieates. which since the foundation OF
the New York clearing house In 1853
!
! In effect at the present moment. The
regulations adopted on August q. 1914,
read in part as follows:
That banks In the city OF New York
viii continue to receive each others
notes in payment of all bills and in
| deposits.
That they will continue to receive
4 In payment from the public and from
each other. as they have heretofore
a L. ~ -.
city for the redemption OF which ade-
quate funds shall be placed In a bank
In the city. and that a credit in bank
! In the city shall be considered as con =
! shutting such a fund. Providing the
exchange is made daily, and provided
the sum sent by any one bank shall
not exceed $4,000 OF any one country
| bank. Remittances from country banks
to be reported before they are finally
I received
/ That exchanges shall continue TO be
smade every morning as usual and In
/ terest at the rate of Z per cent per
annum shah be charged on the balance
appearing due after the exchange from
/ one bank to another, and not to be
varied until the next mornings ex-
change. Interest to commence on the
| LIST of September.
! That any debt which shall so be-
come due from one bank to another
! shall be considered as entitled to be
| discharged after three months notice,
I In specie or in what the general com
mittee shall consider as equivalent, and
/ In preference to any other debt due
I by the institution: any bank shall he
at liberty at any time 10 discharge the
debt. or a part OF II. by a payment in
/ specie.
/ At a meeting of the directors of the
Rank of Manhattan held on October 3,
/ 1914. the following resolution was
passed:
The board agreed to loan the corpor
! alton OF the city of New York $50, 600,
money being wanted by the corpora
tion for the defence OF the city"