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THE GIFT OF
CONFERENCE
OF
CLEARING HOUSES
OF THE
UNITED STATES
Proceedings J 906
Compiled by
Fred. E. Farksworth
Secretary of the Section
• •••••- • *
Edited by
James K. Branch
Secretary American Bankers' Association
1906
Press
Daily Banker & Stockholder
Netv York
CONTENTS.
Preface 4
Committees—
American Bankers' Association 5
On Nomination 24
Clearing Houses Invited to Attend Conference 6
Clearing House Section 7
Officers. 1906-1907 7
By-Laws 8
Conference of Clearing Houses Proceedings 9
Walker Hill 12
Committee's Report to American Bankers' Convention. ... 10
List of Delegates and Those Present 13
Financial Report of Secretary 14
Amendments to Constitution and By-Laws American Bankers'
Association Affecting This Conference 14
Reports from Cities 22
Boston 30
Buffalo 22
Chicago 31
Cincinnati 22'
Cleveland 22'
Denver 22
Detroit • 28,
Des Moines 23
Grand Rapids 23
Indianapolis 24
Little Rock 24
Los Angeles 25
Louisville 23
Milwaukee . . . . •. 26
Minneapolis 26
New Orleans .' 26
New York 29
Omaha 27
Pittsburgh 27
Portland, Ore 28
Salt Lake City 28
South Bend 28
St. Louis 30
Adjournment 33
PREFACE.
The inception and inauguration of the movement which resulted in the
organization of a Conference of Clearing Houses of the United States was due
to the Michigan Bankers' Association, being the outcome of resolutions passed
at its Annual Convention held in Port Huron on July 14, 1899, recommending
a Conference of representatives of the clearing house associations in the reserve
cities to consider the unsatisfactory and confused condition with reference to
collection and exchange charges. The first Conference—a largely attended
and successful one—was held in Cleveland at the time of the Annual Convention
of the American Bankers' Association, September, 1899, when a formal organi¬
zation was effected and officers elected.
The Conference or Executive Committee had met annually since the time of
its organization, and, while the movement had not advanced as rapidly as was
desired, considerable interest was always manifested in the work of the - Con¬
ference. It is not expected that en evil which has grown steadfastly for many
years can be eradicated in a short period of time.
At the Conference held in the city of Washington, October 10, 1905, the
organization was formally recognized by the American Bankers' Association in
the appointment of a special committee, to which was intrusted the future work of
the Clearing House Conference. The Conference held in the city of St. Louis,
October 10, 1906, of which the contents of this volume is a report, was the
largest, best and most interesting meeting held since 1899, evidencing the con¬
tinued interest in the work. The report of the special committee of the American
Bankers' Association, which will be found in these proceedings, covers briefly the
work and the accomplishments during the past year, and shows more progress in
the movement than has heretofore been made.
Amendments to the constitution and by-laws, submitted to the American
Bankers' Association, were adopted, thereby organizing a section of the Associa¬
tion to be known as the Clearing House Section, and giving said Section repre¬
sentation on the Executive Council of the American Bankers' Association.
By-laws were adopted by the Conference and officers elected, thus establishing a
third section of the American Bankers' Association, and by the organization,
believed, is destined to perform a very important work in the interests cf the
banks and bankers of the country.
Fred E. Farnsworth,
Secretary.
Detroit, Mich., November 12. 1906.
4
AMERICAN BANKERS' ASSOCIATION COMMITTEE
APPOINTED AT WASHINGTON. D. C.,
OCTOBER 13, 1905.
Walker Hill, Chairman,
President Mechanics' American National Bank, St. Louis, Mo.
August Blum, Vice-Chairman,
Department Manager First National Bank, Chicago, III.
W. T. Fenton,
\'ice-President National Bank of the Republic, Chicago, 111.
George Guckenberger,
President Atlas National Bank, Cincinnati, Ohio.
E. R. Fancher,
Cashier Union National Bank, Cleveland, Ohio.
Fred E. Farnsworth, Secretary, Detroit, Mich.
Secretary Michigan Bankers' Association.
5
CLEARING HOUSES INVITED TO ATTEND THE ST.
LOUIS CONFERENCE. OCTOBER 16. 1906.
Atlanta. Ga.
New Haven, Conn.
Baltimore. Md.
New Orleans, La.
Birmingham. Ala.
New York, N. Y.
Boston. Mass.
Omaha, Neb.
Buffalo, N. Y.
Peoria, 111.
Cedar Rapids, Iowa.
Philadelphia, Pa.
Charleston, S. C.
Pittsburg, Pa.
Chicago. 111.
Portland, Me.
Cincinnati. Ohio.
Portland, Ore.
Cleveland, Ohio.
Providence, R. I.
Columbus. Ohio.
Quincy, 111.
Dallas. Tex.
Richmond, Va.
Denver, Colo.
Rochester, N. Y.
Detroit. Mich.
St. Joseph, Mo.
Des Moines. Iowa.
St. Louis, Mo.
Dubuque. Iowa.
St. Paul, Minn.
Fort Worth, Tex.
Salt Lake City, Utah.
Galveston, Tex.
San Francisco, Cal.
Grand Rapids, Mich.
Saginaw, Mich.
Hartford, Conn.
Savannah, Ga.
Houston, Tex.
Scranton, Pa.
Indianapolis, Ind.
Seattle, Wash.
Kansas City, Kan.
Spokane, Wash.
Kansas City, Mo.
Springfield, Mass.
Lincoln, Neb.
Syracuse, N. Y.
Little Rock. Ark.
Tacoma, Wash.
Los Angeles, Cal.
Toledo, Ohio.
Louisville, Ky.
Troy, N. Y.
Memphis, Tenn.
Waco, Tex.
Milwaukee. Wis.
Washington, D. C.
Minneapolis, Minn.
Wichita, Kan.
Mobile. Ala.
Wilmington, N. C.
Wheeling, W. Va.
6
OFFICERS
OF THE
CLEARING HOUSE SECTION
AMERICAN BANKERS' ASSOCIATION
1906—1907.
PRESIDENT
WALKER HILL.
President Mechanics' American National Bank, St. Louis, Mo.
VICE-PRESIDENT AND SECRETARY
FRED E. FARNSWORTH.
Secretary Michigan Bankers' Association. Detroit, Mich.
CHAIRMAN EXECUTIVE COMMITTEE
AUGUST BLUM.
Department Manager First National Bank, Chicago, III.
EXECUTIVE COMMITTEE
Term Expiring 1907.
George Guckenberger, President Atlas National Bank, Cincinnati. Ohio.
Charles H. Moore, Assistant Cashier National Bank of Commerce, Kansas
City, Mo.
Term Expiring 1908.
H. J. Keser, Cashier Philadelphia National Bank, Philadelphia, Pa.
Sol. Wexler, Third Vice-President Whitney-Central National Bank, New
Orleans, La.
Term Expiring 1909.
August Blum, Department Manager First National Bank, Chicago, 111.
E. R. Fancher, Cashier Union National Bank, Cleveland, Ohio.
Ex-Oßicio.
Walker Hill, President Mechanics' American National Bank, St. Louis, Mo.
Fred E. Farnsworth, Secretary Michigan Bankers' Association, Detroit, Mich.
7
BY-LAWS OF THE CLEARING HOUSE SECTION.
■Section I. All regularly organized clearing house associations shall be
eligible to membership in this Section.
Sec.' 2. The administration of the affairs of this Section shall be vested in
a President and a First Vice-President of the Section, and an Executive Com¬
mittee of six members, who shall serve until their successors are chosen or
appointed.
Sec. 3. The President and First Vice-President shall also be members
ex-officio of the Executive Committee.
Sec. 4. The Executive Committee shall select its own Chairman from
among its members, and shall also select a Secretary of the Section, who may or
may not be a member of the Section.
Sec. 5. The Executive Committee shall as soon as may be after their orga¬
nization, divide themselves by ballot into three classes of equal number, designated
as the first, second and third class, of which the first class shall remain in office
one year, the second class two years and the third class three years, and at each
annual election members of the Executive Committee shall be elected for a term
of three years to fill the vacancies of the retiring class.
Sec. 6. The Executive Committee shall have power to fill vacancies until
the next annual meeting, and may adopt all necessary rules for the business of
this Section.
Sec. 7. The Section shall meet annually at the time of the Convention of
the American Bankers' Association, and may be called together at any time by
the Executive Committee. At its annual meetings, clearing houses may be repre¬
sented by one delegate for every five banks members of the clearing house. Any
clearing house having less than five members shall be entitled to one delegate,
but other than this no fractional part of five members shall entitle a clearing house
to an additional delegate.
Sec. 8. The Executive Committee may- be called together at any time by
the Chairman thereof, or, on the request of three members of the Executive Com¬
mittee, and shall be vested with full power to transact such business as may have
been authorized by this Section, or as may be required in furtherance of the
interests of the clearing houses, and shall also have authority to expend such annual
appropriation as may be made for the Section by the Executive Council of the
American Bankers' Association.
8
CONFERENCE OF
CLEARING HOUSES
AMERICAN BANKERS' ASSOCIATION
Convention Hall, Planters' Hotel
St. Louis, Mo., October 16, 1906.
The Conference of Clearing Houses was called to order by the
Chairman, Mr. Walker Hill, President Mechanics' American Na¬
tional Bank, St. Louis, Mo., at 10 o'clock a. m. Mr. Fred E.
Farnsworth, Secretary Michigan Bankers' Association, acted as Sec¬
retary.
The Chairman: Perhaps a large number present are not
fully advised as to the object of this Conference. The work which
we are endeavoring to accomplish through the Clearing House Con¬
ference is to bring together the banks of the country and formulate a
plan whereby all this working for nothing will be remedied, instead
of finding ourselves and sending a chromo at the end of the year.
Our first meeting was held at Cleveland in 1 899, Mr. Isaac G.
Lombard, of Chicago, acting as Chairman. Members of the Con¬
ference worked for some time, and the movement was slow. In a
great many cities—St. Louis leading off. New York following, Chi¬
cago and other cities—have adopted rules. I do not believe any two
cities have the same rules. At Washington last year we had the
largest and best Conference. A large number of clearing houses were
represented, and at that meeting they adopted a resolution to ask the
assistance of the American Bankers' Association in furthering the
Conference movement. Before that time all the different cities were
assessed for any expenses that were incurred. The Executive Council
appropriated five hundred dollars last year and the Chairman of the
Council appointed a committee of five, consisting of Messrs. Farns-
worth, of Detroit; Guckenberger, of Cincinnati; Fancher, of Cleve-
9
land; Fenton and Blum, of Chicago, and myself. We held a meet¬
ing in Chicago last May, which showed great progress in the work.
Reports from different cities showed that they were giving the work
considerable thought, even if no definite conclusion had been reached.
A recommendation has been made that a Clearing House Section be
organized by the American Bankers' Association, and I believe
amendments to the constitution and by-laws are now before the
Executive Council and will come before the Convention. I have
before me a report which we expect to make to-morrow to the Con¬
vention, and if there is no objection I will read the same, as I think
this will give you a better idea of what we propose to do:
St. Louis, Mo., October 16, 1905.
To the American Bankers' Association :
The Committee on Conference of Clearing Houses of the United States
appointed by your Executive Council at its last session, held in Washington in
October, 1905, was the direct outcome of an organization which held its first
meeting in Cleveland, September 6, 1699, and which was called together at that
time on the initiative of the Michigan Bankers' Association. These resolutions
adopted in Cleveland are the basis for the work of the Conference:
"Resolved, That the practice of charging exchange for the handling of
out-of-town items is just and proper, and within the scope of legitimate banking;
therefore, all bankers, both city and country, are entitled to receive the benefits
of the same.
"Resolved, That we recommend to all the clearing house associations in
the United States the adoption of a by-law or an amendment to their constitution,
as follows:
"The Clearing House Association shall have the power to establish rules and
regulations regarding collections by members of the association, or banks, or trust
companies, or others clearing through such members, and the rates to be charged
for such collections, and also providing for the enforcement of the same. It may,
from time to time, make any additions to, or changes in, such rules and regulations
as it deems judicious. Any rule or regulation upon the subject must receive a
majority vote of all the members, and when once established it shall not be
altered until it has been in force at least three months, and then only by a
majority vote of the Clearing House Association."
With a banking system that is second to none in the world, with a dollar
that is worth a dollar the world over, with a currency issued by the Government
and the national banks that is always good and is taken for its face value at all
times and everywhere, the banks of the United States do more business for their
customers without compensation than any other country on the face of the globe.
10
In the natural development of the clearing house and its functions it should
be used to regulate all evils in connection with the business.
Unquestionably the evil of country checks and par points is and has been for
some years one of the most important subjects which the banks have had to
consider. You are all familiar with the growth of the use of the country check.
You are also all familiar with the fact that regulation of the country check was
first undertaken by Western clearing houses. St. Joseph, Mo., claims to have
been the first association to take action in this respect. The action of the St.
Louis Clearing House first attracted general attention, but the action of the New
York Clearing House in March, 1899, created the greatest stir in the banking
world.
Since this Conference was organized regular meetings have been held
annually, which have been well attended and much interest manifested. Progress
has been slow, but an evil which has been so deeply rooted in the banking system
of the country cannot be eradicated in a short time. To overcome the evil will,
no doubt, require constant application for many years, and much work on the
part of those who are most interested.
Your committee met in Chicago, at the First National Bank, May 28, 1906,
every member of the committee being present. Reports were received from various
cities and these reports all indicated that the movement was progressing. Your
committee find that many of the clearing houses of the country have a poor system
of rules, and some of them without even an effective organization.
An investigation of the clearing houses of the country develops the following
conditions in the various cities from whom reports were received.
Chicago.—In effect on January 1, 1906, of a plan for the collection of
exchange charges on country checks.
Cincinnati.—A plan similar to the St. Louis plan is now before the Clearing
House, and which, it is expected, will soon be adopted.
Cleveland.—A plan submitted some five years ago, but not adopted; early
action expected.
St. Louis.—A plan which has been in operation since 1894 and which is
working out very satisfactory.
Louisville.—Adopted certain measures in 1901, which have been in force
since that time.
New York.—Plan adopted March 13, 1899, and the fact that no changes
have been made since that time indicates that New York bankers are satisfied.
Boston.—Plan adopted September, 1899; no changes since original rules
were adopted.
Rochester.—Rules adopted; reports that they give entire satisfaction to all
concerned.
Milwaukee.—Waiting until Chicago rules have been thoroughly tested and
settled.
II
Kansas City, Mo.—Adopted rules one year ago; pushing the matter along
and make a better showing each month.
Spokane.—Well in line with the suggestion of the Conference; already
adopted and in operation.
New Orleans.—Adopted a complete set of new rules July 16, 1905,
which, up to the present time, are giving satisfaction to the banks, and its cus¬
tomers are beginning to see the justice of the change. These rules are quite
general, and a charge made for the so-called country checks covering the entire
country, with a few discretionary points.
Detroit.—The Detroit Clearing House Association has rescinded all
previous rules covering the charges to be made by banks in its membership for the
collection of items on Detroit and Michigan, adopting in place thereof the
following:
"On all items on Detroit coming from, or bearing the indorsement of, any
bank, banker or trust company in the cities of New York, Boston, Philadelphia,
Albany, Pittsburg, Chicago, St. Louis, Kansas City, Omaha, Indianapolis, Louis¬
ville, Minneapolis, St. Paul or Duluth, the charge shall be in everv case not
less than one-twentieth of one per cent, on the aggregate.
' On all items on Michigan, other than Detroit, coming from the same
sources, the charge shall be not less than one-tenth of one per cent, on the
aggregate.
"On all items coming from any other source, bearing the indorsement of any
individual, firm, corporation, bank, banker or trust company, located in any State
other than that from which the items are received, the charge shall be not less than
one-tenth of one per cent, on the aggregate.
"Minimum charge in all cases, ten cents.
"Bank, banker or trust company drafts on Detroit discretionary."
Your committee is satisfied that great good can be accomplished for the banks
of the country by the continuation of this work, but believe that the work should
be carried out on broader lines and more scope. We heartily recommend to this
Association the adoption of the proposed amendment to the by-laws of the
American Bankers' Association by the addition of a section to be known as the
Clearing House Section, and also that said Section be given representation on the
Executive Council. A Section, if so organized, will then be in position to
vigorously push the work in hand.
Walker Hill,
George Guckenberger,
August Blum, ¡.Committee.
E. R. Fancher,
W. T. Fenton,
Fred E. Farnsworth, Secretary.
The roll was called by the Secretary, who read a list of the
delegates appointed from the clearing houses of the country.
12
The delegates and others najned, with a star affixed, were present.
Bay City—*F. P. Browne.
Boston—*CharIes A. Ruggles, *F. B.
Sears, *F. A. Curtiss.
Buffalo—*E. C. McDougal.
Cedar Rapids—J. A. Ingwerson,
John Burianek, Jr.
Charleston—*E. P. Grice.
Chicago—* August Blum.
Cincinnati—*Geo. Guckenberger, *G.
P. Griffith, *T. J. Davis.
Cleveland—-^E. R. Fancher, ^Charles
A. Paine.
Denver—*Edward S. Irish.
Detroit—*Geo. E. Lawson, *John T.
Shaw, *Irvine B. Unger, *Fred E.
Farnsworth, Secretary.
Des Moines—*G. D. Ellyson, *W. E.
Coffin.
Grand Rapids—*CIay H. Hollister,
Daniel McCoy.
Indianapolis—*Oscar F. Frenzel, *W.
F. C. Golt, S. A. Fletcher.
Toledo—*T.
Little Rock—*Geo. W. Rogers, *C.
T. Walker, C. A. Pratt, Oscar
Davis, Charles McKee.
Los Angeles—*W. C. Patterson, *T.
E. Newlin.
Louisville—*H. C. Walbeck, Owen
Tyler, Ben C. Weaver.
Memphis—J. W. Keyes.
Milwaukee—'Frederick Kasten, J. K.
Ilsley.
Minneapolis—*A. A. Crane.
New Orleans—'Sol. Wexler, A. Bre¬
ton, A. C. Wuerpel.
New York—'Wm. Scherer.
Omaha—'Luther Drake.
Philadelphia—*W. H. Carpenter.
Pittsburg—'W. A. Wardrop.
Portland, Ore.—'Benj. I. Cohen.
St. Louis—'Walker Hill.
South Bend—'Myron Campbell.
Salt Lake City—'L. S. Hills, 'Frank
Knox.
C. Stevens.
Mr. W. H. Carpenter, President Union National Bank,
Philadelphia: I don't think the clearing house in Philadelphia was
notified that this meeting would be held.
The Secretary: I find this is the case in a great many in-
stcmces; I know a notice was sent to the chairman of the clearing
house of Philadelphia, but I understand that both the president and
chairman of your clearing house died within the last few days.
Mr. Carpenter: It may be for that cause that we have not
been informed.
The Secretary: The committee was very desirous of having
Phila.delphia represented here, and, before sending out the notices, on
the suggestion of the Chairman of the Clearing House Conference, I
communicated with three or four Philadelphia bankers, asking them
to see that their clearing house was represented.
The Secretary then rendered financial statement of the Con¬
ference, as follows:
13
CONFERENCE OF CLEARING HOUSES OF THE
UNITED STATES.
REPORT OF THE SECRETARY OF THE COMMITTEE.
At the meeting held in Washington, D. C., October 10, 1905, action was
taken to provide revenue to pay an indebtedness to the Michigan Bankers' Asso¬
ciation for amounts expended by the Association for the Conference since its
organization; and also for publishing proceedings. Eleven clearing houses were
represented at the meeting, and it was agreed to proportion among the representa¬
tives present the sum of $30, making a total of $330 for the two items mentiond.
receipts.
Eleven clearing houses at $30 each $330.00
expenditures.
Amount paid to Michigan Bankers' Association, being reimbursement
mentioned above $120.00
Printing proceedings 206.00
Incidentals, postage, etc 4.00
$330.00
Fred E. Farnsworth,
Secretary.
Moved, seconded and carried that the report of the Secretary
be spread on the minutes of this meeting.
The Chairman: We have here a copy of the proposed by¬
laws for the Clearing House Section. If the constitution and by-laws
of the American Bankers' Association is amended, as will be neces¬
sary to do, to admit this Section, in order for us to conform to these
proposed changes, we should elect officers, as the present organization
will not conform to the contemplated amendments, so if it is agreeable
to you, I will read these by-laws, and if there are any criticisms you
can make them as I go along.
The Secretary then read the proposed by-laws, as follows:
BY-LAWS FOR THE CLEARING HOUSE SECTION.
Section 1. All clearing houses of reserve cities shall be eligible to mem¬
bership in this Section.
Sec. 2. The administration of the affairs of this Section shall be vested
in a President and a First Vice-President of the Section and an Executive Com¬
mittee of six members who shall serve until their successors are chosen or
appointed.
14
Sec. 3. The President and First Vice-President shall also he members
ex-officio of the Executive Committee.
Sec. 4. The Executive Committee shall select its own Chairman from among
its members, and shall also select a Secretary of the Section, who may or may
not be a member of the Section.
Sec. 5. The Executive Committee shall, as soon as may he after their
organization, divide themselves by ballot into three classes of equal number, desig¬
nated as the first, second and third class, of which the first class shall remain in
office one year, the second class two years, and the third class three years, and at
each annual election members of the Executive Committee shall be elected for a
term of three years to fill the vacancies of the retiring class.
Sec. 6. The Executive Committee shall have power to fill vacancies until
the next annual meeting, and may adopt all necessary rules for the business of
this Section.
Sec. 7. The Section shall meet annually at the time of the Convention of
the American Bankers' Association, and may be called together at any time by the
Executive Committee. At its annual meetings, clearing houses may be represented
by one delegate for every five banks members of the clearing house. Any clearing
house having less than five members shall be entitled to one delegate, but other
than this no fractional part of five members shall entitle a clearing house to an
additional delegate.
Sec. 8. The Executive Committee may be called together at any time by
the Chairman thereof, or, on the request of three members of the Executive
Committee and shall be vested with full power to transact such business as may
have been authorized by this Section, or as may be required in the furtherance
of the interests of the clearing houses, and shall also have authority to expend
such annual appropriation as may be made for the Section by the Executive Coun¬
cil of the American Bankers" Association.
Mr. George W. Rogers, Cashier Bank of Commerce, Little
Rock, Ark. : Those by-laws would not include Little Rock, because
it is not a reserve city.
The Secretary: In regard to the American Bankers' Asso¬
ciation, these sections are separate and distinct by themselves. They
hold their meetings separately and elect their own officers. They are
under the general supervision of th American Bankers' Association,
and the appropriation is made by the Executive Council of the Asso¬
ciation for the necessary expenses of the sections, but the Association
has nothing whatever to do with the election of the officers.
A Member: Who are the proposed members of the Council
from this Section?
15
The Secretary: The President, First Vice-President and
Chairman of the Executive Committee. It is proposed to make an
amendment to the constitution and by-laws of the American Bankers"
Association to entitle the different sections to representation in that
way.
Same Member: Is the Chairman of the Executive Committee
included?
The Secretary: Yes, this proposed amendment contemplates
these three officers—President, First Vice-President and Chairman
of the Executive Committee.
Sections three and eight were again read.
A Member: And in case of vacancy has the Executive Com¬
mittee the power to fill it until the next election and not for the unex¬
pired term?
The Secretary: Yes, sir. For the information of the Con¬
ference it might be well for me to read the proposed amendments to
the constitution and by-laws of the American Bankers' Association.
They are as follows:
Amendment to Section 1, Article III., of the constitution, offered
by Mr. John L. Hamilton, vice-president Hamilton & Cunningham,
Hoopeston, 111. :
Insert after the words five members of the Executive Council shall be annually
chosen by the • delegates from the several State associations of banks and bankers
"In addition there shall be elected three members of the Executive Council divided
into three classes representing the Trust Company Section, three members repre¬
senting the Savings Bank Section, ^nd the same additional representation to be
given to a Clearing House Section or such other sections as may hereafter be
created."
Amendment to the by-laws of the American Bankers' Association
by the addition of Section 6, offered by Mr. Fred E. Farnsworth.
Sixth.—A section of the Association to be known as the Clearing House
Section is hereby established, which shall meet annually in connection with the
meeting of this Association; its scope shall embrace all matters relating especially
to work which should be taken up by clearing houses in their respective localities
in the interest of its members, with a similar programme and proceedings as the
Trust Company Section, and it shall be under the supervision of the Executive
Council.
16
Amendments to Sections I and 2, Article III., of the constitution,
offered by a committee appointed to revise the constitution:
* * * and the Presidents, First Vice-Presidents, and Chairmen of the
Executive Committees of the different Sections authorized by this constitution
and by-iaws shall also be members ex-officio. * * *
Motion made and seconded that the by-laws be adopted as read.
Mr. Blum, of Chicago, 111.: Is the paragraph which speaks
of the qualification for membership the first paragraph?
The Secretary: The first paragraph provides that clearing
houses of reserve cities shall be eligible to membership.
Mr. Blum: How would that effect clearing houses of cities
that are not reserve cities?
The Chairman: They would not be eligible to membership
in this Section.
Mr. Blum: Was this provision made intentionally, and for
what purpose?
The Secretary: No reason, Mr. Blum, except that at the
committee meeting held in Chicago the question was asked, who
should be invited to this Conference and it was generally agreed,
there to take the reserve cities. I think other places should be desig¬
nated, Little Rock, for instance, here represented, and many other
cities should be added.
A Member: Would it not be advisable to include in the sec¬
tion referring to membership a provision whereby every clearing house,
whether reserve cities or not, could become members ? It seems to me
we would want to get into this Section all the clearing houses of the
country. The rule is one we must necessarily adopt, and if we
confine it to reserve cities, seems to me it is a mistake. We want to
have this work spread over the entire country and we want the co¬
operation of not only the large cities, but the small ones. I would
like to office the suggestion as an amendment, that all clearing houses
shall be eligible to membership.
Mr. Rogers: The Little Rock Clearing House has fourteen
members and only three national banks in Little Rock. There are
thirty-one in the State of Arkansas. There are three hundred and
fifty banks in Arkansas, and three hundred and twenty-nine of them
are State banks, and only thirty-one national
17
Mr. a. a. Crane, Cashier National Bank of Commerce, Min¬
neapolis, Minn. : I would like to add one suggestion, to be confined
to bank clearing houses. Many cities have stock exchange clearing
houses or check or commission clearing houses. We might as well
be definite in our requirements for membership.
The Chairman: I would suggest that the provision include
only bank clearing houses.
A Member: Let it read in this manner: All cities having a
regularly organized clearing house are eligible to membership. I
think that would take in every city with a properly organized clearing
house and eliminate all that cannot conform to the provision of eligi¬
bility.
A Member: I would suggest that we add one qualification,
say "clearing house associations."
The Secretary: The amended resolution would read as
follows: "All cities having a regularly organized clearing house
association shall be eligible to membership in this Section."
A Member: Or, "clearing houses of all cities having regu¬
larly organized clearing house."
A Member: There are some cities which clear without having
any association. They have a system of their own by which they
meet and clear checks without taking care of any of the interests that
come to the regular association.
Mr. Guckenberger, of Cincinnati, Ohio: I believe we can
cover that point by changing two words: "All clearing houses reg¬
ularly organized shall be eligible to membership in this Section."
The Chairman: Do you offer that as a substitute covering all
previous suggestions that have been offered?
Mr. Guckenberger: That is a suggestion to eliminate the
reserve cities.
A Member: My suggestion was this: "All regularly or¬
ganized clearing house associations shall be eligible to membership,"
and I offer that as a final suggestion substituted for all previous mo¬
tions.
Motion was seconded and unanimously carried.
18
The Chairman announced that the adoption of the by-laws as a
whole was the next order of business.
Motion made, seconded and carried to adopt the by-laws as a
whole.
The CttAIRMAN: Under these by-laws provision is made for
the election of a President, First Vice-President and six members of
the Executive Committee and the committee elects its own chairman
and secretary. In order that we may not put the cart before the
horse, if the Association does not make us a Section, this stands as a
committee, appointed by the Executive Council of the Association.
But we should elect officers and a committee to conform to the pro¬
posed amendments.
Mr. Crane: I was going to make this point, and that is that
this organization, as I understand it, is purely a provisional one and
only takes effect in the event that the Executive Council recognizes us
as one of the sections.
The Chairman: • That is true, but if the Association does not
recognize this Section, we do not want the work we have done to go
for naught; hence we will remain as a Clearing House Conference,
but the Chairman of the Executive Council of the American Bankers'
Association will have the power to appoint a committee.
Mr. Crane: We want to get that perfectly clear in our minds.
The Chairman: We will have the power to elect the com¬
mittee if the Section is recognized by the Association, and, in such
case, it would be a Section of its own, just like the Trust Company
and Savings Bank sections.
A Member: In the matter of election of officers; in the first
place, if we elect officers, does that mean that the clearing houses in
the cities designated here or represented by the delegates are bound by
the action of this meeting. We are not sure that we are going to
adopt certain rules and measures. I am not willing, as far as I am
concerned, to bind myself by action taken here to-day, and I think
some of you will feel the same; therefore, would it not be better to
find out just what we have here. If we are unanimous, well and
good, but if we can't agree to abide by the actions of this committee,
then I say that we should find out what our thought and desire is
before we commit ourselves. For instance, if we elect a person for
19
President or Vice-President and he should not be in sympathy with
the movement, it would throw cold water on the work. He would
not work with you as he should ; whereas, if he is heartily in sympathy
with us he would be a better officer.
Mr. Clay H. Hollister, Cashier Old National Bank, Grand
Rapids, Mich. : It seems to me any action on the part of this Con¬
ference would not bind any particular clearing house, unless it chose
to fall into line. I cannot see why this formal action of adopting by¬
laws, etc., would be of much importance, so far as any individual
clearing house is concerned. That is for each individual clearing
house to determine. This is a body for conference rather than for
decision.
The Secretary: I would like to say in this connection that
this Conference was never organized or called together for the purpose
of taking any definite action for the various clearing houses, or saying
what they should do. The resolutions read by Chairman Hill cover
practically all that we are here for, and that is that we should make
recommendations to the clearing houses that they get in line on some
policy. We have had six or seven sessions and have not yet adopted
any particular plan. This Conference is our largest Conference,
and if we discuss this question and then go home, and if the institu¬
tions you represent are inclineed to take hold of the movement and
push it, you are at liberty to do so. There has never been a sugges¬
tion or motion to adopt any rigid rules for the clearing houses of the
country. That would not be practicable.
A Member: I should like to say that the scope of this Section
should be wider than the mere regulating of charges by individual
clearing houses. There are many ways by which the co-operation of
the clearing houses would be most fruitful, and we are providing
merely for co-operation which has a bearing much wider than the
mere regulation of exchange charges.
Mr. GuckeNBERGER: In order to properly bring the matter
before the Association, I desire to make a motion that the Chairman
appoint a committee of three as a Nominating Committee, to present
names to serve as officers and Executive Committee for this Section,
if the American Bankers' Association establish a Clearing House
Section.
20
Motion seconded.
Mr. E. C. McDougal, President Bank of Buffalo, Buffalo,
N. Y. : I presume a great many of the gentlemen here have not had
an opportunity to give thought as to who they would like to have as
officers and committee. I would like to ask whether it is understood
that the nomination of these names constitutes an election or whether
the gentlemen here who may have names to propose or nominate—
whether they will have an opportunity to do so; also whether the
names put in under this resolution shut out all other nominations.
The idea is this: The gentlemen here are from all parts of the
country. It is not possible to know the names of all the good men
here, and if we are going to elect committeemen and officers I think
it is essential that we start right and that every member should have
an opportunity to consider the subject and brig his nominee in, if he
wishes to do so.
The Chairman: This committee, if appointed, is the servant
of this assembly, and if it makes a recommendation, any delegate on
the floor can nominate his own friend or any one he thinks better.
This is not shutting out any one.
A Member: We will have to find out what representation is
here. From the list called oirt by the Secretary, it appears that a very
small proportion of the members are present. It was an open ques¬
tion whether we should include clearing houses not located in reserve
cities.
The Chairman: We have fully arranged for that part and
the assembly understands the matter. The question is on the motion
of Mr. Guckenberger that the Chair appoint a committee of three to
report back to this assembly its recommendations.
This motion was unanimously carried.
The Chair thereupon appointed as this committee: Messrs. T.
J. Davis, cashier First National Bank of Cincinnati; George W.
Rogers, of Little Rock, and Sol. Wexler, of New Orleans.
The Chairman: While that committee is out, I think we can
get some very good information by calling on the different clearing
houses as to what progress they have made, and what the prospects
are. If there is no other business, I will call the names of the differ-
21
ent cities, but it is distinctly understood that these reports must be
brief. It is suggested by the Secretary that the largest cities we have
just read reports from and we know all about them, such as Chicago,
New York, Boston, Detroit and New Orleans, be skipped and that
we take up those that are still out of the fold and see what the pros¬
pect is of getting them in.
Mr. McDougaL: I am heartly in sympathy with this move¬
ment for establishing fair charges on checks, as it does not seem to be
possible to accomplish this in any other way. I am in favor of this
being done through a Clearing House Association. So far we have
not accomplished anything in Buffalo. We have not been able to get
the banks to agree on any definite plan.
Mr. GuckenbERGER: The Cincinnati Clearing House Asso¬
ciation has held several meetings and has formulated a plan similar to
the St. Louis plan, but up to the present time it has not adopted same.
We are in hopes of getting some of our most able bankers interested
in the movement and adopt the plan unanimously.
Mr. C. a. Payne, Cashier Central National Bank, Cleve¬
land, Ohio: We are in pretty much the same position as Buffalo.
No formal action has been taken. Nothing has been brought before
the Clearing House Committee in a formal way. We have held
informal meetings of the banks and are ready to adopt some system,
if we can decide on any. Two or three banks are inclined to lay
the matter aside, thinking the time is not ripe. If we could have the
encouragement of this Association, we could bring about a movement
that would be effective and beneficial.
Mr. Edward S. Irish, Assistant Cashier Denver National
Bank, Denver: We have a very good clearing house organization
and a very good understanding among its members. We have
an established rate for exchange charges on country checks.
Our customers are very well educated and we believe they see for
themselves that the bank is entitled to some compensation for handling
these checks. Our rate for charges on these checks is of very great
advantage to the banks in Denver. I believe if the banks in other
cities would adopt similar rules they would find it a great advantage.
I do not believe our system could be very much improved.
22
Mr. C. D. EllYSON, President Marquardt Savings Bank,
Des Moines: We have a little association for exchanging
checks, but I do not know whether we have arrivecf at
the dignity of a clearing house or not. There has been a sort of
comedy enacted between the Des Moines Association and this Asso¬
ciation. We didn't know we were members. We were invited to
attend, but did not know what steps were necessary to make us a
member of this Association. I received a letter from the Secretary.
Myself and Mr. Coffin, of the Valley National Bank, were elected
as delegates and we are here to obtain information. We have some
rules for the collection of exchange, and rates of interest, which we
believe are adhered to as religiously as they are in most places, but
we realize there is much room for improvement in our association.
We want to lend a hand and gain what we may from this organiza¬
tion.
The Secretary: I would like to correct the gentleman from
Des Moines. The invitation was sent to Des Moines and I have a
letter from the manager in which he stated that he would be present at
the conference in Washington, so they were invited last year. The
invitation was extended then, and I have his letter of acceptance.
The Same Member: You afterward wrote a letter to Mr.
Arthur Reynolds, which was the opening wedge to our being here.
The Secretary: That came about solely thorugh a mis¬
understanding of the thirty-dollar assessment that was levied.
The Same Member: It was voted at our last meeting.
The Secretary: I have received the money and settled the
bills.
Mr. Hollister : I wish to state that we have a very excellent
clearing house organization and have a very good set of rules indeed,
which we have been working under for som.e time. We have clear¬
ing house certificates, forms prepared for emergencies. I hope the
currency question will be so arranged that we will have no need to use
them. We have been farsighted so far as that is concerned. We
have agreements which are operative, controlling rates of interest on
bank deposits, and there is no disposition that amounts to anything
to break away from our agreement. We have no agreement in re¬
gard to charges on checks, although I am in hopes that will even-
23
tually be brought about. We have been waiting on the action of
some of the large cities. I think when the time comes we will be
ready to take action on the matter. On the whole, our clearing
house agreement is very satisfactory.
Mr. O. N. Frenzel, President Merchants' National Bank,
Indianapolis, Ind. : Unfortunately, we have no rule in the Indian¬
apolis Clearing House whereby we can make charges for collections.
The matter has been considered three or four times, but, unfortunately,
every one seems to be afraid and in doubt as to the best procedure.
Mr. C. T. Walker, Secretary-Treasurer Little Rock Trust
Company, Little Rock, Ark.; I speak for Little Rock, although
Mr. Rogers is the deelgate. I dislike to deprive Mr. Rogers
of this opportunity to speak, because I know he will regret it.
At Little Rock we have a regularly organized clearing house, but on
the subject of charges no action has been taken as a body. The
question has been considerably agitated recently among the different
members, and it will likely lead to definuite action very soon. So
far, however, nothing has been done through our clearing house.
The Chairman: Gentlemen, the committee has returned, and,
if there is no objection, we will hear the report of the Committee on
Nominations.
Committee on Nominations made the following report:
For President, Walker Hill, of St. Louis; for Vice-President,
Fred E. Farnsworth, of Detroit; for members of the Executive Com¬
mittee, August Blum, of Chicago; H. J. Keser, of Philadelphia;
George Guckenberger, of Cincinnati; Sol. Wexler, of New Orleans;
E. R. Fancher, of Cleveland; Charles H. Moore, of Kansas
City, Mo.
A Member: I would like to ask how the different divisions of
the committee are arranged for the different terms.
A Member: That is arranged for by the provisions of the
by-laws.
The Secretary: The members of the committee will prob¬
ably cast lots.
It was moved, seconded and carried that the report of the Nom¬
inating Committee be adopted.
24
The Secretary then announced that the report of the committee
was adopted and the gentlemen named were declared elected to the
respective offices.
The Chairman: I thank you for my election, but you know
that the work of this committee must be done by Mr. Farnsworth; he
is a retired capitalist and I am a working man. He must go around
and get the sinners in. We must have one officer who will go to
the different cities and see what the difficulty is, why they do not want
to make money, and the only way to do that is to go there and find
out who the sorehead is, pour some oil on his head and cure the
disease of working for other people for nothing.
The Chair announced that the next order of business was the con¬
tinuation of the reports from clearing houses.
Mr. W. C. Patterson, Vice-President First National Bank,
Los Angeles, Cal. : I am quite in harmony with the funda¬
mental principle embodied in the report read by the Chair¬
man that banks are, not through choice, but rather by force of circum¬
stances, compelled to do a- great deal of work for nothing. In Los
Angeles we have an arrangement in our clearing house by which we
receive pay for a great deal of the work we do, and the item of
exchange collected from the banks for handling outside items is not a
small one. I quite agree with what has already been said that some¬
thing should be done by which a revenue could be derived from the
handling of country checks. I would also like to see some movement
through this organization, by which the clearing houses throughout
the country could become stronger bodies than they are now, should
become incorporated, as it were. Without clearing house associa¬
tions, in order to bring about an arrangement for the collection of
charges on outside checks, it requires a unanimous agreement. I
should like to see the various associations become corporations and
the majority given controlling power.
Mr. H. C. Walbeck, Cashier German Insurance Bank,
Louisville, Ky. : We have a clearing house and have uniform
charges, made up by the different banks, but some of our merchants
and manufacturers disagreed with us and moved their accounts across
the river where they take the items, on which we charge, free of
25
charge, and thereby we have lost a great deal of business. I do not
know how he will overcome the difficulty.
Mr. Frederick Kasten, Vice-President Wisconsin National
Bank, Milwaukee, Wis. : As reported by our Secretary, nothing
has as yet been done in Milwaukee about exchange charges,
except that we have a committee appointed, and hâve had several
conversations with Chicago regarding exchange charges, but nothing
has yet been accomplished. We expect to fall in line and adopt
rules similar to those adopted in Chicago, as soon as we are advised
that everything is in working order there.
Mr. Crane: The Minneapolis Clearing House is exceedingly
well organized. We have six members who work in the utmost har¬
mony. We have already some very excellent clearing house rules
providing for remuneration for the work we do. Our plan of charg¬
ing exchange on country checks is unique. We do not clear country
checks at par, except when able to do so ourselves, charging back to
the bank issuing the check in every instance. That eliminates to
some extent the desirability of having clearing house rules. However,
the sentiment is rapidly growing that we should charge on all country
checks, following the lead of Chicago. We have a situation that is
unique, in that Minneapolis can accomplish very little without the
co-operation of St. Paul. The St. Paul Clearing House is not as
well organized as ours, it is true, and it is very difficult for us, so far,
to get any definite co-operation, but we think, as we grow larger and
become more interested in getting something for our work, that the two
cities will finally unite on some plan which will be in harmony with
the movement of this body.
Mr. Sol WexLER: New Orleans has a thoroughly organized
clearing house composed of seven members. For a number of
years attempts were made to enforce charges on items de¬
posited by a customer in the city and items coming in from country
correspondents other than banks. The plan failed, for the reason
that our clearing house organized for the purpose of clearing checks.
Consequently, it required a unanimous vote of all members to change
the policy. We have had opposition from some bankers, to changing
this rule, and we have organized under clearing house rules, pro¬
viding that a three-fourths vote would be necessary to pass any
26
measure. We decided that a three-fourths vote should enforce this
charge, and we notified the dissenting banks that unless they signified
their willingness to abide by the new clearing house rules they
would themselves be excluded from membership. Also that after a
certain date there would be a charge of $2,500 for admission into
the clearing house, so that if they did not signify their willingness
within three days, and decided to come in at a later date, it would
cost them $2,500. Within three days they all came in, and the
result is we have a perfectly organized clearing house that charges
a fixed price on every item we receive for collection for their account.
A fine of $5,000 is imposed for any infringement of that rule, which
has been in efiect since the sixteenth of July. The difference in
profit to our bank has been $1 1,000 since that date. We have had
a few protests by the Board of Trade, who waited on us with a com¬
mittee, requesting us to change the minimum charge of ten cents on
small items to about five cents, which, however, we declined to do ; in
other words, we declined to alter our present rules one iota. We
have come to the conclusion that our charges are fair and people
should pay them. This rule covers all banks within the parishes in
which New Orleans is located just the same, and any bank in these
parishes claiming it is not a New Orleans bank must pay the same
charges as anybody else, because it would be very easy for a bank to
locate just outside the city and take collections there. We should
be very glad to send a copy of our rules to any city that wishes to
adopt the same rigid rules.
Mr. Luther Drake, President Merchants' National Bank,
Omaha, Neb. : So far as Omaha is concerned, as far back as
1894, our banks recognized the necessity of clearing house rules.
They formed an institution which regulates the purchase and
sale of exchange, the payment of interest on country bank balances,
discounting of checks, and also the payment of interest on deposits.
We also have the proper penalty for any violation of the rules. Our
organization is progressing very well.
Mr. Robert Wardrop, President People's National Bank,
Pittsburg, Pa.: We have no rules whatever in Pittsburg covering
collections on out-of-town checks or the payment of interest on
balances. We are about to revise our constitution and by-laws and I
27
think the matter has reached the point where possibly some action will
be taken.
Mr. Benjamin I. Cohen, President Portland Trust Com¬
pany, Portland, Ore. : Our clearing house is merely a place for
exchanging checks. Some years ago there was an effort to
enforce rules, but the movement was defeated by the fact that
certain members would not live up to the agreement. I was recently
asked by the president of the clearing house to address a letter on this
subject and take the position that a strong clearing house could be
formed, through which rules could be put in force covering exchange
and other matters. I have no doubt it would be an excellent thing,
and when I get home I shall prepare to advocate this idea.
Mr. Louis S. Hills, President Deseret National Bank, Salt
Lake City, Utah: Salt Lake City has a clearing house and has had
for some seventeen years. We have rigid rules in regard to the col¬
lection of checks, charging exchange, etc., which are adhered to and
give general satisfaction, I think.
Mr. Myron Campbell, Cashier South Bend National Bank,
South Bend, Ind.: South Bend, Indiana, has not been called. I
only arise to make the report as to what we are doing and probably
what the greater number of country banks will do. We are regularly
organized as a clearing house for clearing checks, but we have no rules
covering charges on checks and we are religiously conforming to those
rules, or lack of rules, and it is likely we will adhere to them as long
as we are able to find city banks who are willing to clear our checks
for nothing.
The Ch.AIRMAN: I know you are all pleased with the Ku
Klux Klan methods of handling people in New Orleans. I think if
some of our clearing houses would adopt the same methods there
would be no working for nothing.
The latest convert to the clearing house system, and we would
like to hear from there; Mr. Lawson, how do you feel?
Mr. George E. Lawson, Cashier People's Savings Bank,
Detroit, Mich. : Mr. President, I heard only the last of your re¬
marks, in which you said something about our being a late convert.
We take pride in the fact. We have one of the largest clearing
houses in the country. Our rules have worked out to great advan-
28
tage and give satisfaction. They were, however, rather cumbersome
and we were obliged to eliminate certain provisions. Consequently,
during the past few months we appointed a committee which has been
at work to bring these rules into a more simple form. We hope the
plan will prove to the satisfaction of all who send us items for collec¬
tion and simplify the work. We know we will get just as much ex¬
change out of them.
The Chairman: We have a gentleman here from a small
village called New York. We do not know whether this is the
first time he has been this far West or not; he told me he was not
accustomed to traveling. Mr. William Sherer, the manager of the
New York Clearing House. (Applause.)
Mr. William Sherer; Mr. President and gentlemen of the
Conference of Clearing Houses, I was asked last evening by one of
the members of the American Bankers' Association if I came here
prepared with an address, and I asked him if he remembered in our
boyhood days that good old story of the Roman chief who said: "I
came not here to talk."
I am sure that I wanted to come here to visit this Conference and
meet the gentlemen interested in the clearing house work. As you all
know, the New York Clearing House Association in 1899 adopted a
set of rules and regulations governing these matters. Since that
time there have been no amendments made to those rules. There
have been some constructions made to their bearing in certain classes.
These rules were unanimously adopted by the association, almost
without debate. Since their adoption we have had to administer
discipline very severely in one case only—where the bank, through
its enterprising officers, went beyond the rules and violated them ; • I
do not believe so much as intending to maintain thier position, because,
after it was explained to them, the officers admitted their mistake.
They were fined $5,000 and paid it promptly. We have the same
rules now, and our members live as closely to them as to the associa¬
tion itself. We have had very few complaints. Some complaints I
have undertaken to run down and have found they were largely due to
the imagination of the depositor, where he couldn't get released from
a charge at one bank, and he would say he could secure it from
another bank, but we have not been able to prove any of these asser-
29
lions. Since the adoption of these rules some of the banks have
agreed to accept country checks for nothign, hoping thereby to attract
some of the regular business of the depositors. The result was all
they used these banks for was for the purpose of depositing their little
checks. Those banks liquidated in two or three months, as they
were not successful. It seemed at first they would make a success,
but they did not. One of the institutions recently organized has
advertised that they will take collections for nothing, but I predict
that they will soon abandon the plan. The fact is, our exchange
accounts, instead of being debit accounts, are almost all credit
accounts. Investigating the subject before the rules were adopted, I
found that an average of one out of five checks were accepted free
of charge. It seemed entirely fair and just that the merchants, the
honorable merchants and manufacturers, the men who have the inter¬
ests of the business of the country at heart, not only his own pros¬
perity, but that of others—because no man can prosper alone—that
he will see the justice and propriety and equity of the banks charging
these customers for that which it costs them money to carry, and I be¬
lieve this will be a matter of education. You will find many nearby
cities who have not these rules in force take the position that it is inore
profitable for them, because of their people, not to charge, because
they will get more business. That, of course, is human nature, but
they will soon find out that they cannot undersell the market and
succeed. Although I have been for twenty years in Wall Street, I
have never yet acquired the title of a banker, but do my best to keep
the business moving.
Mr. Charles A. Ruggles, Manager Boston Clearing House,
Boston, Mass. : I have nothing new to bring from Boston
in the way of exchange accounts. We organized our
foreign department seven years ago and have the same
per cent. You all know our system. We send thesè checks out
daily and they remit at par on receipt of same. If they don't remit
at par we charge one-tenth. Our rules are practically the same as
New York. There have been no changes in our organization since
we organized. The business is continually growing, and the ex¬
change is on the credit side. I remember one of our banks, when
asked what the difference in expenses was, said: "I wouldn't dare
to tell you how much the cost was before and how much the profit is
30
now." Some charge interest, and some don't but the principle is
the same—what it costs us nothing to collect we take free, otherwise
we charge.
The Chairman: For fear some of you might think that St.
Louis is jealous of the little town three hundred miles north of here,
we would like to hear from Mr. Blum, of the Windy City.
Mr. Blum: I think you all know that after many struggles
and many weary wanderings we have at last reached the promised
land of a system of charges of out-of-town items, and we are pleased
with the transition. Our system is confined to items deposited by
city customers. We should have been very glad to have extended it
to items received from country correspondents. We appointed a
committee to come here to this great and noted city, hoping that we
could co-operate with them on a plan similar to the one so success¬
fully introduced in New York. We found most of the gentlemen
here are quite willing to follow the lead, but "there are others" who
don't quite see it, and therefore we could not carry it out as rapidly
and as perfectly as New Orleans or New York, or South Bend.
But we are satisfied with what we have achieved. We have also
changed the item of exchange from the debit to the credit side, and in
the most satisfactory manner. I am not quite posted on the figures,
but I know that the change is very marked and correspondingly grat¬
ifying. I wish to say one word more, and that is chiefly addressed
to my friend, Mr. Guckenberger, a most strenuous apostle to a system
of charges, a big man down in Chicago, who for years, in conventions
and in meetings, advised what he thought the strongest kind of an
argument against an agreement. This man is now a tower of
strength in the exchange movement, and you know there is "more joy
in heaven over one sinner that repents than over the ninety and nine
that went not astray."
The Chairman: We have nothing further to discuss, unless
some gentleman desires to ask further questions. This organization,
as I said in the beginning, is rather crude, but it does look as if we
were getting together, and if the American Bankers' Association gives
us a charter to work under their wing, I think we can do a great deal
more than we have done.
A Member: I came here for information. I would like to
31
know how many clearing house associations are represented here, have
rules covering non-member banks, ^^e are revising our constitution
and by-laws, and, at the present time, we have no rules at all that
govern our non-members, and we wish to adopt some.
The Chairman: I will send you a copy of the St. Louis rules.
The Same Member: We have those.
Mr. WexleR: I can tell the gentleman how it is provided for
in our city. Every non-member bank has to clear through some¬
body, or has to send his items to some bank for collection. If they
clear through another member bank, then they must conform to the
same articles which that member bank is bound by. If they send
their items outside of the city and they are returned to New Orleans
through some correspondent, the items sent to the New Orleans bank
for collection are charged for the same as if we received them direct
in New Orleans. For instance, when the plan was first presented
we feared that some of our large people would open accounts in Baton
Rouge, and that our Baton Rouge correspondents would send them
to us, but, under our rules, when a check comes that bears the indorse¬
ment of a New Orleans bank, we levy the charge on that item the
same as if it had been presented direct to us. In that way we
prevent our accounts from being scattered throughout the small banks
in the country. We charge them identically the same as we charge
individuals.
A Member: Does the Clearing House Association charge the
non-member bank for the privileges of the association?
Mr. WexleR: Yes, there is a charge, dependent upon the
capital of the bank. Referring to the practical side of the matter
which we have undertaken here, I would like to say a few words. It
would be impossible to formulate one general rule to fit all cities of
the United States, because the conditions vary so much in different
sections. In my opinion the methods to obtain practical results will
have to be adapted to the different clearing house cities.
A Member: I would like to know whether any of the gentle¬
men present have met the proposition that we have in Cincinnati in
regard to clearing house charges. A great many people object
because the cities across the river from us, all of whom have banks,
32
have not been making these charges, and even now they are sending
across the river to gather up business that belongs to Cincinnati banks.
If we attempt to make charges we will be in position to lose a good
many of our accounts. That is one thing that we have to contend
with in Cincinnati. I wonder if any of the gentlemen can explain
what effect that has if similar conditions are experienced.
The Chairman: After we adopted our rules in St. Louis, we
heard Chicago was going to get our accounts, and all hoped that they
would get them, because we would like to put our non-paying business
on them, and we would keep the good business, but they found it did
not work. In a short time they returned to us.
On motion the Conference adjourned sine die.
33