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OUR SPECIAL FEATURE PAGE.
*¦" '' the recent stirring events of the I nanclal marts of tbe world, an lnstl ! tstics Bs<firs by HM* to all. but whose real functions and powers but few are Intimately acquainted with, ba* played a most Important role and, together with the efforts of two Individuals, In reality saved this country from the most stupen dous and disastrous panic In Its history. The Institution referred to Is the New fork Clearing House; the Individuals. J. Plerpont Morgan, not only America's, but to* world's foremost financier, and George Brace Cortelyou, a man of middle age but on* who has climbed tbe political ladder. rung by rung, from the modest post of stenographer to a Democratic President of th* TJBlt«d States, to that of 9«retarv of the Treasury, a member of the official family of ths present Republican Chief Executive. To the average followers of financial Rffairs the name of the New York Clearing House i» associated only with weekly bsnk statements, on which brokers trade, and an annual statement of clearances, balances and exchanges, whose figures mount up Into the billion*. wnl<*b are only useful to those employing statistic* in presenting facts In the course of addresses on the commercial greatness of this great nation. Each and every banking day in the year, tbe New York Clearing House performs its functions and performs them systematically and thoroughly. All In ac complished in a staid, quiet and dignified. but thoroughly bnslneßßllke manner. There is little to Indicate In either the ex. terior. or Interior of the substantial look ing structure on Cedar Street, betweeu Nassau and Broadway, of the great things happening nearby. Yet In reality those who conduct the affairs of this Institution are the very pulse of the moey market. Generations' ago when hank* were on heard of our traders and merchants, as well as those who did not engage in "trade" were compelled to either hoard or hide their savings for safe-keeping, or else lug them around concealed about their persons. This proved ' Inconvenient aud hence plans were formulated for a common place of safety for tbe placing of funds In various communities and the con summation of these plans resulted In tbe chain of banks now scattered over tbe world. As banks grew in number the question of clearing, or settling up. one with the other, became dally more perplexing. As tbe banking community became more highly developed and thousands of de positors were clearing their personal deiji's ar'i creo'ts through tbe various banks, the banks themselves began to occupy the «.me relation to each other as rngards tbe transaction of their mutual business as their customers had occupied, co h to the other a generation or two ago. CHE ambition of vvefy American Is to <pend s year, a short six months at least. In tbe Latin Quarter. Most Americans have all kinds of queer notlous about the people who live ou t.ie other sld» of tbe Belne. They ttiink of this part Of Pails as a den of vine and frivol ity. But those who lire there know bet ter. They soon discover thnt crossing the Seine Is like gotng Into another world. This narrow blue ribbon wltb the half-dozn or more bridges Is tbe dividing line. Along tbe Seine Is a great row of queer little bookstalls; on sunny days, aud on Sundays more especially, great crowd* of people throng tbese second band book stores, where they buy stray sheets of music and books slightly worn, for s song. This medley offers a variety of types. First there Is the soldier noticeable for bis gay glittering- uniform; out for a holi day and willing to buy anything be tees, so aoslons Is be to rid himself of the money that barns In bl* pocket*, press ing dose to him Is s little milliner car rying s heavy hat box on her arm. Her head Is quit* bare and she has only a thin knitted shawl drawn across her narrow back, In spite of the aotumn ehflL Her eye rests alternately on tbe sMUer asd tb* title of ths romances. Her THE NEW YORK CLEARING HOUSE A. RICHMOND PARKMURST JR. The check of each bank was a certifi cate of Its own lndebtedney, good «o long as the person to whom it was ten dered believed thut the person who made It bad the funds on deposit In the bank on which It was drawn, and that 1" c bank Itself was solvent. No matter how readily the check was accepted, however. It would have no value unless Its hand ling meant that the actual cash was to lim Its way Into the bands of tbe person to whom the debt was due. So tbe banks, with the savings and deposits of tbelr customers stored safely away In tbelr vaults, made their clearances over their own counters and sent forth their own messengers. In person, wltb cash to pay those tbey owed, who would not come forward to collect. Thus tbe necessity of a clearing-house became hourly more man ifest, until today its Importance Is sec ond ouly to the banks themselves. As tbe commerce of the country ex panded It was found that the weekly clearings ran Into billions of dollars, and the weekly exchanges of credits Into hun dreds of luiillous. For each bunk to keep on hand all the cash needed to meet the demands of all IU depositors, every day. meant tbat practically all of the assets, representing active accounts, must be available at an Instant's notice, for It would not do to delay a depositor or creditor making demand for his money longer than It required to brlug the cash from tbe vaults to tne teller's window. There was both danger and waste in snch a system as this. The danger that the bank*, compelled to keep so large an amount of cash on hand, would have THE DEAL LATIN QUARTER Delia Austrian cheeks flush as she thinks vow she would like to have a certain novel; but she remembers the one small franc In her purse and she has not the courage to go without her dejeuuer. She moves on and tbe vacant place is filled by two men, tiie one wears a threadbare coat and a skull cap drawn down on bis head. B* has more money In his pocket than hit shabby appearance would indicate. But much of bis time and spare money go lv gathering old books. A very different type is his neighbor. The short velvet jacket, the black silk scarf, and the ltrgs LOS ANGELES HERALD SUNDAY SUPPLEMENT to shut down on their customers when ever a stringency In the money-market ensued, lest they cripple their own re sources, and place themselves In n posi tion of being unnble to meet all the de mands made upon them. Tbe element of waste lay In the necessity of keeping snch a large sum of money lying Idle In tbe vaults, thereby placing a tremend ous limitation upon the Investments which tbe banks could safely make wltb profit to themselves from the funds placed In their keeping by their custom ers. It therefore remained, for them to devise some means by which tbelr cash outlay could be figured on a net, Instead of on a gross, basis. The system of banking by the old method can best be illustrated by- tbe employment of figures. Suppose tbat a bank bad demands on a given day for the payment of $75,000 over Its counter by the presentation of checks by its de positors or bearers of checks drawn by depositors. Then suppose tbat Itti checks, aggregating $500,000. are sent to other banks by their depositors for collection, and that checks on these same banks for $450,000 are deposited with tbe first bank for collection. Should the bank be mak ing its own clearings It would bo com pelled to keep on band for its Immediate use. In addition to the $75,000 for over the counter payments, the $500,000 re quired for all of Its checks sent to other banks for collection. In spite of the fact tbat before tne any Is over $450,000 will come In from these other banks, thus making tbe net result of tbe day's op erations a debit balance of but $50,000, felt bnt Indicate that this young man is an artist, who Is as particular about bis appearance as be Is In selecting his models. Though the bookstalls attractive they fill only a small part of tbe pic ture. Tbe Seine Is thronged with small passenger boats;- some carrying passen gers, others are heavily laden wltb great baskets of vegetables that are grown lv tbe outskirts of Paris. Before the Ecole dcs Beam Arts are many art students waiting Impatiently for the doors to open so they may com as regards tbe rest of the banks, and a cash requirement of but $75,000. It Is needless to say that moderu business methods, in which tb* elimination of waste, and the saving of time, are the chief essentials, would devise a tneaua of overcoming a system so cumbersome! and so uneconomic, and tbe present Clearing House is the result of the Ingeuulty of those who get to work to evolve thla sys tem. Wltb tbe advent of tbe Clearing House came a mutual confidence which In reality Is based nj Information con veyed from the bead of one bank to another and so on until each is In posses sion of facts bearing on tbe financial needs and standing of tbe other. With the advent of the Clearing House its member* were in tbe habit of mak ing, each to the other, a dally confession of condition of tbe affairs of the banks under each respective head. Business grew apace and It was goon demonstrated that a weekly confession greatly facili tated matters, although tbe right was ex tended to those In control of tbe Clearing House to enter any bank, a member of the association, and make a minute ex amination Into Its physical condition nt any time they so pleased or thought nec essary; for the real purpose and function of the Clearing House is to take from each bank belonging to the Association a statement of Its claims against other bunks, members of the association of course, to balance these statements, col lect the balances due from the debit banks, and turn the credits over to tbe banks entitled to them. The Clearing House has not been called mence a long day's work. Not ull of tbe art students are gathered here. Many of the advanced pupils are on tbe way to the Luxembourg Gallery to copy tbe works of modern masters. Farther op In the Rue Boneparte Paris presents a dif ferent kind of picture. Tbe streets are lined wltb small shops dealing In rare books, engravings, prints and rare bric-a brac. The streets are so narrow tbat the houses appear to touch, In some places It Is Impossible for a cart and auto mobile to pass at once. There are many kinds of queer looking shops In these upon since 1593 to demonstrate its use fulness In time of crisis until late lv 06 tober. when the eyes of the world were focugsed on Wall Street and with bated breath tbe financial giants of tbe Old and New Worlds waited developments; hardly during to hope tbat the banks could weather tbe storm which broko with all Its fury over "Tbe Street." Way back In 1893 people were compelled to draw heavily on the banks, cash balances being reduced to that low ebb where only Hiililclent funds were left on deposit to keep their, accounts "alive." It was not tbat the people distrusted the hanks that this drain was made upon the Institutions, but because they really needed every penny they could lay their bauds on to meet constantly growing obligations. With withdrawals being made at such an alarming rate, there was not a sufficient sum of cash od hand at tbe disposal of the banks to meet tbe demands of tbelr customers. The bankers were face to face with the most serious problem of tbelr careers. If they failed Jo ni«*t these ob lgatloDß they would Immediately be de clared Insolvent aud forced to suspend; yet their assets were far .aud above their liabilities, tbe drawback lying In tbelr inability to quickly realize on tbese as sets without suffering a suvcro pecuniary loss. A group of men whose names In the financial world were synonomous with so lidity, solvency and conservatism, gath thered in the office of the Manager of tbe Clearing House and settled down for action. These men constituted them selves Into a committee, known as the Clearing House Loan Committee. Its plan was to eliminate entirely the exchange of cash between banks in settling their bal ances with each other, by means of n system of Clearing House loans aud cred its. If a bank had a debit balance of queer looking street!, lln one window are teen ;so • many ¦ loaves '-. of bread ' one might Imagine : that the r people In . this neighborhood ' subsisted ..' on ¦. bread . alone. Far more Interesting If the great display of spring 'b»t»:»howo Id • tbe shop win dow - next '. door. . Though ~. they < are all marked five ; trance , these , straw headgear are trimmed with - every ¦' kind ' of, flower grown' In a French garden. .-¦". . ¦•. i<. *¦¦ Iv l'aris everytmng la put to some nse. It Is not unusual to see this placard be fore a butcher shop: "Occasionally a horse or donkey for tale." Tbe matti look so half a million dollars It would be re quired to deposit 'with the Committee good 'collateral on which a loan was negotiated for this amount. If. on the other hand, a bank had a credit totalling this, or any other sum, the Clearing House Committee . would immediately Issue Mi that b«»k a certificate which carried with It a pledge for this sum backed up by the other associated banks. Thus It be came possible for (be banks to make Im mediate use of all thn funds on hand for their, "over-the-counter" business, with out having to cripple themselves by re serving a large percentage of their cash to settle up their obligations each day at the Clearing Home. ... .¦ . ¦ , ; , Those who recall; the ' stringency that existed for a time In 1893. i however, will remember that not a bank Included In the Clearing House Association ' suspended payment for a second and the Impending p*n!o trim wifely passed. • ' . ..' ; The names of those men: H. W. Can uou, president of the Chase National Bank; T. D.Tappan, then president of the Gallntin National: G. G. Williams, then president of the Ch mlcal National Bank; William A. Nash, • then and still president of the Corn Exchange National Bank: J. Edward Simmons, president of the Fourth National Bank have ben banded down In the annals of banking history as . tbe real heroes and pioneers of modern and sane banking methods, which ' now form the bulwarks of the solidity of tbe financial sinews of this nation. . Just such a crisis confronted our New York banks a short time ugo. Money was held at prohibitive premiums and Trust Companies were falling by the wayside at an alarming rate.. This was solely due to the unprlnclpalcd methods of a speculating clique, who were manipu lating tbe funds in tbe vaults of banks and trust companies controlled by them for their own speculative purpose.*, to tbe detriment and peril of hundreds of other Institutions wboee methods were legitimate. Money soared above the 100 per cent, figure and the scenes of "Back Friday" were vividly recalled as . stocks came tumbling at an alarming rate and none could see the; end In sight. v - Then it was that J. Pli-rpout . Morgan, that Napoleon of finance, Jumped Into the breath aid hurled millions upon mil lions of dollars Into the vortex of the financial whirlpool, and five minutes thereafter muney | was jto be had at the normal rate of Interest In such quanti ties as to ease the situation until the same band of conservatives, who met in 1b93, could again come together, .discuss the sltuat on, and ' devise ways and means of effectually restoring confidence, and stem the flow of gold from - the vaults of banks which were speedily . be coming depleted by the , th nsands of terrified depositors who ' were | pulling their deposits out In millions. j - Their ¦ first step was to peremptorily expel Helnze aud Thomas and their as fresh and the price* are so -noderate one wonders where tbe profits are made, un til some resident In tbe quarter explains that much donkey and horse meat are Bold In French butcher shops. Tbe busiest of tbese thoroughfares lc tbe Rue Vauglrard. By nine the roadway Is so crowded with push carts It Is bard for a driver to move his horse faster than a walk unil to avoid running down pedes trians. The air Is loud with the cries of vendors offering their fruits, vegetables, and fleli Others carry great baskets of roses and violets; some .ire taking them to the shops aii'l others are offering them for a song. The narrow pavements are all too small for the old women lv linen caps and heavy sabots starting out to do tbe marketing. Some brush by showing they have no time to spare while more stop to gossip before a butcher or baker shop with some neigh bor. A short way up the street Is a great line of women. From n illHtanoe It Is Im possible to believe <t can be nnythlng else hut a run on a bank. Uut it is Monday and tli* bargain hunters me busy buying underwear, ribbons and shirtwaist* from the large counters on the street. Great crowds of students are gathered before the Ecole de Medicine, they are making it demonstration In the court yard. The cries and threats are so alarm- Ing It would seem they intend to demol ish the building. The quarrel la about two professors. The head professor bus dis charged one of bia assistants and the pupilß wish to have him reinstated. By five o'clock most of tbe students have left the Sorbonne and are hastening toward tbe boulevard St. Michael. Here tuev nice- Minn*. Marie, and Margott*. who hare been workiug behind counters or posing before artists all afternoon. But happy Minne, Marie and Marqottn bavt* no time for Be.rlous thought, they have thrown all care to'thi. wind They are out for a lark, and are proud of their fine togs. Relaxation, not work. Is the keynote of the hour. Oce art student In amusing himself by making a rapid sketch of two lovers which bt will call "Their First Attempt." That beautiful gir> who comes snunter'ng along witn an old man. old enough to bo her father, is a high class mode' and her companion Is a well known painter. At a tabu Ik n gronp of imisi 'inns, drinking absinthe and discussing Mi fcsenot's new opera Aphrodite. Fakers, beggars, aud vagrauts in Rrer 4 numbers give an added touch of color to the pic ture. Some are hawking mechanical toys, others are vending postal cards. By eight o'clock tbe throng of men and women who filled the boulevard St. Ml cbael are beginning to scatter. Many co to the Tivein dv Pantheon to see tbe crowds gathering there nightly, and to eujor the college songs snog by a half-dozen America.! students. . Some prefer French songs, and .bey go to one of the stu dent's irons where there Is lively mimic and laughter until late hour*. The Moulin Rouge used to be the great dancing place of the Quarter, bat Id the Uut few years It has changed Its char acter and Is practically a vaudeville hail. Tbe dancers who used to frequent the Moulin Rouge now go to Ball BulHer. and tbongb there Is dancing every night, Thursday Is the great night of tbe week. To gain admission on Thursday on* must go early for there is always a crowd of pleasure seekers waiting to buy a ticket for two francs. The doors fere hardly soclates and tools 1 from the Clearing House Association, thus driving several of the Institiitions they controlled Into bankruptcy. Then tho Loan Committee, formed by such men as Alexander Gil bert, president of the Clearing Houm Association; James T. Woodtvard, presi dent of tiie Hanover National Bank, and ottrer hankers of «qu*J Mfratt, Incltjd lng William A. Nash. James Stlllman, George F. Baker and William Sherer. the Clearing House manager. Ditmont t'liirke, bead of the American Exchange National: Edward Towusend, of the Im porters and Traders', and A. Barton Hepburn, the present president of tbe Chaae National, met and .after a session lasting all night several millions of dol lars were raised and pledged to tide over those banks which were Imperiled by ths never ceasing drain on tbelr re sources. This action was repeated sev eral times until aid from tbe National Treasury, through George B. Cortelyou. arrived in the form of $25,000,000 and once more the banking circles of New York, as well as those of tbe entire world breathed easier and another panic was averted. Cutll the Clearing House Association stepped Into the breach and put tbe Morse- Helnre-Thomas chain of banks out of busi ness a system of bank kiting In New York was being Indulged In at such au alarming rate that there Is no telling where It would have ended, or what banks would have been swallowed In the specu lative whirlpool If this summary action had not been taken. It was simply a rea sonably safe and sure means of using other people's funds for another's private purposes, provided of course tbe market "was right," but In this Instance the mar ket veered unexpectedly and exposure, loss and ruin speedily followed. But tbe lesson taught by tbe exposure Is a valuable one and it will not be easy for another band of stock raiders and traders to operate with tbe funds controlled by tbe banks which they, in turn, have got control of by nefarious means and sharp practices, without being' exposed before tbelr opera tions have gotten under full headway. The eyes of the' Association are wider open today than ever before and the con servative element of Wall street is grati fied to know that Helnze and those of his Ilk are no longer a factor In the financial reckonings of the street. It Is highly probable that after the storm the banking Interests of New York have Just weathered that every Institution doing a banking business will be safeguarded by more stringent laws and tbat tbe powers and functions of Clearing Houses will be even more far-reaching In tbe future than tbey have been In tbe past. But one fact stands glaringly forth and that Is: The New York Clearing House Association saved the day. With Morgan and Cortel you at its back It threw millions into a seemingly dark and bottomless abyss, but not a dollar failed to again come to the surface and find it's way back to where it belonged. opened when the ball is filled with •lancers and others are waiting to take their turn There Is merry laughter everywhere, the orchestra roars until th« c<>llo and the violin sound as though they would break. The men whirl faster »n<l faster until the girls begin to pant for breath. Bag! Bas! comes tbe cry from every corner. The appreciation la so great the conductor it forced to repeat every number a second time. The noise reaches Its height when two or three hunu'red art students who have had sup per at one of the restaurants or In *B atelier come to Bullier's In a body. To know the art created In this Quar- I ter and what the. men and women who live here enjoy, one should visit some of the cabarets. Though .I* GrUloo Is one .of the beet known, there are several. It Is to toes* haunts that the true Bohemian loves to go where he may enjoy ¦ happy hour free from wild strains of music and' noisy laughter. Here be listens to some of tbe best satire and tome of the clever eat songs that ar written In Paris. ';^;.' ' These are composed and : sung by men of - genius, . destined for one - reason or another jto . die without achieving | fame. , There Is scarcely a man well known in France, who is not caricatured In one of these cabarets. They know It and take it good naturedly, realising the humor of i the verses. ¦ To know the Latin Quarter, at Its ' best i one ' should be- familiar - wit i tbe Bal dcs Quarts Arts given by to* Art Students In April at the Moulin Rouge. Months ' before the students .of tbe different ateliers are. • busy • planning costumes - and - tableaux ¦¦¦' for ; - this .' gala event. Tbe floats . represent ' everything One can imagine from Venn* rising from the Sea to a Flower Girl. The ball be gins at eleven and lasts I until 1 morning. Only those having cards < are . admitted, . and these are not transferable. Everyone who ... goes \ on • the floor s must " wear a masque. ¦• .._ '¦:.. ¦ ,', -, ¦ 1 ,"¦. V'-v, ¦"¦"" : Not all the ffayety of the quarter takes place at night. . In the Spring the Lux embourg : Gardens are . lively . with * artists and students of tbe quarter. Some come >to copy the Medici ' fountains $ and | gar dens, others to rest and to drink In the balmy fresh air. Friday afternoon iis tbe ' day when women come from all part* of ' Paris to • enjoy ; the > foliage, * the r, flower j ; beds and listen to tbe music of the great brass band. •¦.'.¦.-•••..'.¦.,: ?•' .'¦.¦-,"¦,; ¦¦ 7T1.W.-.-JE." • ' In the . outskirts of the Quarter", along . the ' Hue Vanglrard the streets ¦ become more ' deserted; the .bouses are ' mo i hovel-like, ¦¦ while squatters , and , gypsies abound. On Sunday : the p people of > the/ Quarter come here to enjoy the shooting j galleries, the carousals and the .tent elr-j ens. '.It Is here one sees the cockneys of J Parts. The girls who walk with a swag-? ger, not tbe chic shop girl everyone must admire. The men are no less grotesque! with the large Checked vests and imlta.* tlon diamonds that flash on their vests. ? Tbe stranger comes to the Latin Quar ter to see wild ' and ; foolish >. excitement and ha finds to his surprise that love UM the note struck here— love for art, know edge, > borne > and ; woman. The gayety, m ! only ¦ the j overture, i tbe ¦ theme , Is Jot ' Sometimes j gay, ( sometimes ft sad, «°«n times | poetic, and sometimes • tragic, bjH always love. This Is why the Latin QuaH ter Is fascinating and . should b« csJlsH tbe Heart of Paris.