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Line. 2 2 GENERAL PROVISIONS. 11 to 14 $25,000 banks in places of less than 4,000 inhabitants. 9 21 to 24 10 1 to 3 After transition is completed banks SHALL KEEP their "cash reserve," as nearly as may be, in equal parts of gold coin, silver coin, and "greenbacks of other banks." 19 15 to 20 Any average deficiency in the average total reserve a bank is required to keep, for any month, is taxed at the rate of 6 per cent per annum. 2233 1 to 11 4 to 25 Tax imposed on the deposits of all "commercial banks" that fail to organize under the act, or fail to assume their share of greenbacks, of one-tenth of 1 per cent per annum (that they may be induced to assume their fair share of the obligation of maintaining parity). 23 12 to 20 24 24 1, All commercial banking associations other than national 2 banks, assuming greenbacks, are to make reports to the Comptroller and be examined by national bank examiners. 3 to 14 Associations may require from depositors thirty days' notice of intention to withdraw "deposits" upon which interest is paid for more than seven days, but this does not apply to "that part of the reserves of banks which they are allowed to deposit in other banks." 24 15 to 17 Section 13 goes into effect the first day of the calendar quarter next succeeding the four months next succeeding the passage of the act. All taxes imposed are due and payable on April 1 and All moneys collected under the act to be paid into the EXPENSES, ETC., OF BANKS IN CENTRAL RESERVE CITIES COMPARED WITH BANKS IN TEN SMALL TOWNS AS TO ITEMS OF BANK FUNDS AND AS TO PERCENTAGE OF EXPENDITURES TO VARIOUS FUNDS, ETC. TREASURY DEPARTMENT, OFFICE OF THE COMPTROLLER OF THE CURRENCY, Hon. J. H. WALKER, Chairman Committee on Banking and Currency: Statement showing the amount of expenses and taxes paid by the national banks located in the central reserve cities of New York, Chicago, and St. Louis, as shown by the semiannual reports of earnings and dividends as made to the Comptroller of the Currency for the year ending September 1, 1897. SIR: In compliance with your request of July 26, I inclose herewith a statement showing the expenses and taxes, during six months, of ten banks, "located in the smallest places in which there is a single bank, having capital, surplus, and undivided profits of, approximately, $145,000 to $155,000." THE CLEARING HOUSES IN THE COUNTRY. [Statement prepared by the chairman of the committee.] The clearing house has become indispensable to the conduct of the business of banking. Each bank, large or small, country or city, is indissolubly connected with other banks, and through them, if not directly, with the clearing house. The efficiency of a bank is very largely dependent upon the clearing house. Only through clearing houses can the equality and independence of banks be preserved or their highest efficiency attained. It is as necessary to banks to have incorporated clearing houses as it is to business firms and corporations to have incorporated banks. The incorporation of neither is absolutely necessary. In fact, a large part of banking is done by private firms, but only by reason of the existence of banking "corporations" are they successful. All the banking of the world, or of the country, could not be done outside of the obligations and responsibility imposed in fixed legal rules and the control of banks by positive corporation law. Whatever may be the appearances to the contrary, a bank can not exist by itself alone in this stage of commercial development, like a cotton or woolen factory, which is all the more reason for uniform regulation and control of banks by law. Of seventy-six clearing houses given on page 551 of volume 1, Report of the Comptroller of the Currency for 1897, I have examined the constitution and by-laws of fifty-five at hand, and herein indicate the main provisions of all taken together. I see no reason why each one of these clearing houses could not continue, if incorporated under the Walker bill (H. R. 10333), the doing of its business in such manner as it has chosen for itself and without any substantial alteration of its constitution or by-laws. Of course, the advantages of a broader field and the security of more definite rules, by many of them, are so obvious, it is believed they would soon enter upon a broader and at the same time equally conservative action. There are no substantial provisions in the regulations of any of the fifty-five examined not given under the name of some one of them. None contains any substantial provisions not enumerated under the name of some one of those mentioned. Some forbid what others require, according to the volume or kind of business they do. ST. LOUIS, MISSOURI. Article 1, section 1. "The object of the association shall be the effecting, at one place, of the daily exchanges between the several associated banks and bankers, * * * and the fostering and promoting of sound conservative banking; the regulating of exchanges, the fixing of minimum rates to be charged on outside drafts and collections," etc. * * * Section 3. The committee of management shall have power to suspend any bank by unanimous vote * but shall forthwith call a meet * ing of the association to consider such suspension, etc. Section 8. The action of the clearing house is only that of an agent, and in no case shall this association be held responsible for any loss that may occur by reason of its action. Section 11. Whenever any member of the association shall send and receive through the clearing house the exchanges of any bank in the city or vicinity who are not members, such sending and receiving shall ipso facto and without further notice constitute said member the agent for said bank at the clearing house, etc. Section 13. A standing committee of five bank officers or bankers shall be elected, to be called a committee of arbitration, whose duty it shall be to hear and determine all disputes that may be submitted to it by both parties thereto. A majority decision shall be valid. Section 15. No member shall be added to this association having a paid-up capital of less than $500,000. * * * Section 17. Shall pay an entrance fee of $1,000 and in addition its several assessments for expenses. Article 2, section 1. Each member of the association shall furnish the manager a sworn statement of its condition as often as five times each year * * * and at such other times and of such date as the clearing-house committee may require. * * * The following shall be regarded as cash reserve, viz: Balances due from other banks payable on sight draft, Legal tenders, National-bank notes, Gold and silver certificates, Amount due United States Treasurer, Clearing-house loan certificates. Section 2. Upon a vote of four-fifths of the members of this association a committee of five shall be elected by the association, who may receive from banks, members of the association, bills receivable and other securities to be approved by it, and shall be authorized to issue therefor to such depositing bank loan certificates to an amount not to exceed 75 per cent of the face value of the securities or bills receivable so deposited, etc. ROCHESTER, NEW YORK. Section 24. No member of this association shall clear for any other institution or banking firm not a member. BUFFALO, NEW YORK. Section 7. Any bank, after one day's notice of a hearing before the association, may be expelled from the association and debarred from all the privileges of the clearing house by a four-fifths vote of the whole number of associated banks. Section 8. The clearing-house committee, acting in concurrence with the arbitration committee, may cause an examination to be made of any bank member of the association and shall have power to suspend any bank, etc. * Section 19. Balances shall be paid in— United States Treasury certificates. Gold coin. Gold certificates. Silver certificates. |