Evening star., 1923-10-07
Fifty Years Ago
In The Star

Slowly the financial skies. cleared
fifty years ago, but the storm had
" left much wreckage. In
Shortage Of T The, IS. Star Of. September
suoy'following~ summary Of
the situations .s'.'>.
'.The hopeful financial eutIeek OF
yesterday is sustained today. The
workings OF the system, of certified
checks adopted by the bank, asseci-
atiens of leading cities is getting
familiarized to the public and is
found to serve admirably, in FesteF-
ing confidence and more especially In
preventing a drain OF currency to
New York to the injury Of hsme In
dustry. New York as the great fnap-
cial and business center naturally
draws the funds of ether cities TO 1t,
and when, as at present, premium
of 5 and per cent for currency ever
certified checks is paid. In that city
the impetus of currency in that iirec-
tton. Is greatly accelerated. 1t is
stated that a considerable portion. of
the amount drawn cut yesterday from
the Washington banks that continue
to nay out currency was expressed to
New Fork for sale for the premium,
or for speculative buying OF stock at
the low rates prevailing there. IT is
easy to see that the practical effect
of this is to deplete this city OF our
rency to the great Injury of business.
There Is scarce a merchant or dealer
Ia tha city but finds the prevailing
scarcity Of currency almost a COM
pIete check to business at this time,
and the evil promises to be felt even
mere severely if the present drain is
continued, and the existing AMOUNT
of currency is further drawn upon
to go to New York or to be boarded
in safes and stockings at home. The
course adopted by the bankers of the
leading cities. outside of New York
In issuing certified checks as supple
mentary business fund, and paying
out currency only in small sums when
actually needed for legitimate ases,
is the only way to protect business
people from pantcky orders or np-
soruPuieus ,spscuiators on the needs
of the public" ,eA -.
i5.''.
As a means of protecting the local
financial institutions from this dgata
of currency a'elearl
Clearing House ing house assoei-
.,.o alton was formed,
Csft1Acasos' leading to the fela
lowing discussion in The Star of
October J., 1873: :. a:..1t
'Fhe fact that the oentreliihg COM
mittee of the new banking and clear
inG hanse association Is composed OF
some of the best citizens of the Dis-
triet should inspire our business
community with confidence, and for
the short time in which II Will be
necessary to use certified checks pc
a medium of exchange there seensitu
be no seed reason why cur. meyeafc
tile interesta should suffer. Viewed
in the light Of reason, the shreMd
man Of business cannot fail to see
that he is amply secured. A customer
calls and buys an invoice OF goods,
tenders a national bank note In Bay
mest, and It is received readily. And
why? Because. q rsepth, securities,
covering the whole Issue Of the bank,
are In the custody Of the Eovernmsnt,
Now, what Ia the difference with the
certified ehsekg In point of double
assurance the prepanderance Of safety
10 in its favor, The cheek received,
according to the Laws OF the asspci-
stien, is secured Pct only to its fAes
eeiiaterais' easily. hypothecated and
safsiy deposited in the vaults Of
corporation whose presiding ottleer
tesrfty and honesty. Even in case OF
the failure OF any bank In. the asso-
clation' nothing can be sost. Not ~
check is used by the banks that is
held & daily secured. by collateral.
Should slch a contingency ariee,
Whinh tf ts Idle Z to aiitisipatA,s the
assoclatien takes the seeuritiea OF any
of them ftr- fh 8 redemption .uf tfis
1eerftGed checks "a Z