The Washington herald., 1917-10-08
VARS EFFECT
ON FINANCES
Holland Tells Import Of the
Clearing House
Report.

to make on October /. said that 1t
was interesting to know that the
total transactions for the twelve
months ending September 90 were
nearly equivalent to the estimated
aggregate wealth OF the United
states. Some have estimated the total
wealth Of the United States as high
as two hundred fifty billion dollars. but
the estimate commonly accepted as
approximately correct fines the value
OF our wealth in dollars at about
two hundred billions. Mr.. Gilpin was
able to point to the figures which re-
ported the transactions in the clear
ing-house for twelve months ending
September % In support OF his state
men,. These figures reach the enor-
NOUS total OF nearly one hundred
and ninety-four billion dollars.
In the brief statistical statement
issued By the clearinghouse associa-
tion Is to be discovered. when a study
Is made OF the figures, some illustra-
ton OF the unsurpassed movements
that havs characterized American
finance, industry. commerce and trade
in the fiscal year of the clearing
house. Clearings alone aggregated
little over one hundred and eighty
billion dollars and approximately
twelve billion dollars were utilized In
the settlement OF balances. Notwith-
standing the enormity Of the figures.
nevertheless. the relation of cash
payments to liquidate balances Is ap-
proximately the very small average
percentage Of balance which has been
maintained for many years.
Comparatively Small.
Large as twelve billion dollars is In
itself. nevertheless it Is comparative
ly trivial when 1t Is referred to the
actual exchanges which have been
made IN twelve months in the clear
ing house. So small an amount of
cash as that was all that was needed
in order to perfect the exchanges.
This OF itself shows to how great an
extent exchanges OF credit are facili-
tated through cooperation and how,
in a mornings hour, the coordination
into q single unit OF the banks of New
York city can be accomplished. Other
cities which maintain clearing house
associations are able in this way to
illustrate the highly skillful and yet
perfectly simple methods by means OF
which the exchange of commodities
and the exchange Of credits can be
secured
Another feature discovered in this
report is the increase OF clearings in
the associations fiscal year just end
ed over the total clearings for the
previous year. This increase in round
numbers amounts to about forty bill
lion dollars. In the early years OF
the clearing house association It was
looked upon as wonderful thing that
IL was able to report that in the five
years that followed its organization
kA a. 4.
over thirty billion dollars. Now the
increase in a single year Is ten bill
lions greater than that amount.
Undoubtedly this increase Is in part
explained by the astounding financing
which the war has entailed; possibly
some Of IL may be explained by the
relation OF the banks to the subscrip-
tons made to the first liberty, loan.
But II Is the opinion Of the members
or the clearing house that the Increase
IN great measure reflects the remark
able speeding up OF American indus
try due chiefly to the demands made
by the government and our allies for
war munitions. equipment and mate
rial Of all kinds
Natural Institution.
IL 1t were possible to make exhaus-
tive analysis OF the checks, drafts and
otner items which were EXCHANGED by
the clearing house association in its
last year. II would undoubtedly be
shown how truly the New York clear
ing house association is q national fn-
stftution- So far as the city of New
York itself is concerned-considered
merely as an Individual municipal
ity-the transactions completed in the
clearing house association each year
are. relatively speaking. of minor i'm
portance. But these billions OF dol
lars reflect not only the extraordinary
conditions made by war. but also no
small part Of the agricultural activi-
ties Of the country. very large part
OF the cotton marketing and export,
as well as export of metals and the
transactions Of the greater indus
tries of the United States. Ultimately
much of the negotiable instruments
Of credit which facilitate the exchange
of commodities find their way direct
" or indirectly through the New
York clearing house association.
Its Indirect Aid
Only In an indirect manner has the
clearing house association aided the
stupendous transactions Of the past
twelve months, notwithstanding the
enorrnity Of many of them, 1t has not
been found necessary, as in the past
IL has been in time OF panic, to Sc
cure the cooperation OF the clearing
house for the purpose of throwing up
defenses against q spread Of panic,
for there has been no panic.
When Albert Gallatin. at the age OF
eighty, made the first suggestion
which, when adopted. formed the
foundation of the New York Clearing
House Association. he could not have
IMAGINED. although his Imagination
always reached far into the future,
the magnitude Of present-day opera
tions of the New York Clearing House
Association Nevertheless. what Mr..
GaIlatin suggested in 1941 contained
the germ Of the New York Clearing
House Association and the growth
from that germ has been normal and
IN perfect sympathy with the develop
rnent Of the material prosperity OF the
United States.
II IL an interesting fact associated
with the clearing house that these
enormous yearly transactions entail
very little cost. relatively speaking.
The largest salary paid Is understood
to be SO. 900 for services given by a
competent examiner whose reports
are confidential.