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New York Clearing House Association records, 1853-2006

Summary Information

Abstract

New York Clearing House Association (now The Clearing House Association) was founded in 1853 as the first banking clearing house in the United States. The records include amicus briefs, constitutions and amendments, letter books, meeting minutes, financial ledgers and statements, photographs, publications, and reports.

At a Glance

Call No.: MS#1464
Bib ID 7094252 View CLIO record
Creator(s) New York Clearing House Association
Title New York Clearing House Association records, 1853-2006
Physical Description 154 linear feet (85 record cartons, 47 document boxes, 6 flat boxes, 3 card files, and 84 ledgers in custom boxes)
Language(s) English .
Access

This collection is located off-site. You will need to request this material at least three business days in advance to use the collection in the Rare Book and Manuscript Library reading room.

This collection has no restrictions.

Arrangement

Arrangement

This collection is arranged in nine series and several subseries: Series I: Associations and Committees, 1853-2004 Subseries I.1: Clearing House Association, 1862-1995; Subseries I.2: Clearing House Committee, 1854-2000; Subseries I.3: Steering Committee, 1932-2004; Subseries I.4: Other Committees, 1853-1998; Series II: Correspondence, 1892-1993 Subseries II.1: Letter Books, 1925-1969; Subseries II.2: Circular Letters, 1892-1948, 1984-1993; Series III: Financial Ledgers and Statements, 1853-1995 Subseries III.1: Daily Proof Ledgers, 1868-1986; Subseries III.2: Weekly Statements for New York Clearing House Members, 1874-1985; Subseries III.3: Weekly Statements of Non-Member Banks, 1897-1928; Subseries III.4: Percentage of Reserves Statements for State Banks, 1888-1911; Subseries III.5: Quarterly Statements on the Condition of State Banks, National Banks, Trust Companies, and Commercial Banks in the City of New York, 1867-1983; Subseries III.6: Other Ledgers and Statements, 1853-1995; Series IV: Reports, Studies, and Publications, 1885-2006 [Bulk Dates: 1982-1985] Subseries IV.1: Annual Reports, 1892-1985; Subseries IV.2: Other Reports, Studies, and Publications, 1885-2006; Series V: Constitutions, Rules and Regulations, 1881-1982; Series VI: Return Item Exchange Agreements, 1940-1947, 1956, 1970-1971; Series VII: Photographs and Other Images, 1858-1987, undated; Series VIII: Amicus Briefs, 1963-1988; Series IX: General Historical Records, 1853-2000

Description

Summary

New York Clearing House Association (now The Clearing House Association) was founded in 1853 as the first banking clearing house in the United States. The records include amicus briefs, constitutions and amendments, letter books, meeting minutes, financial ledgers and statements, photographs, publications, and reports.

The collection includes documentation of the organization's governance, decision and policy making, membership, and advocacy work on banking and financial issues. These records include meeting minutes and files from the Clearing House Association, Clearing House Committee, Steering Committee, and other committees, such as the Bank Officers, Committee on Admissions and Loan Committees, as well as documentation of who served on these committees. In addition, the records include amicus briefs, annual reports, constitutions and amendments, exchange agreements, letter books, and publications.

The records also document the organization's daily work as a banking clearing house. For decades, daily exchanges were documented in the settlement statements in the collection's proof ledgers. The records include documentation of daily transactions for most of 1868-1972, as well as annual figures for 1853-1883. The records also include information on the health of both member and non-member banks, documented in the weekly and quarterly statements of member banks, state banks, national banks, commercial banks, and trust companies in the metropolitan area of New York City.

Lastly, the records include articles, photographs, publications, and general historical records that speak to the history of the organization, and document persons, buildings, and events associated with that history.

  • Series I: Associations and Committees, 1853-2004

    This series contains minute books for the Clearing House Association, Clearing House Committee, and other committees, including the Bank Officers, Committee on Admissions, Loan Committees, Nomination Committee, and Tax Committee. There is some additional material on committees in Series IX: General Historical Records.

    The series also includes 20th century meeting files for the Clearing House Association, Clearing House Committee, and the Steering Committee.

    There are two volumes, New York Clearing House Association Officers and Members of Committees Since Organization, in Series IX: General Historical Records. One volume (Box 123) is arranged by name (1853-2000) and the second volume (Box 150) is arranged chronologically (1854-1970). These volumes document the membership of organization's committees in two comprehensive volumes.

    There are also two volumes of duplicate minutes (1853-1875) in Boxes 172 and 173, which include the minutes of the New York Clearing House Association, Bank Officers, and various other committees in chronological order.

  • Series II: Correspondence, 1892-1993

    This series contains letter books and circular letters. There are no correspondence files, as such, prior to 1892.

  • Series III: Financial Ledgers and Statements, 1853-1995

    This series contains financial ledgers with daily settlement statements, as well as weekly financial statements for both member and non-member banks. In addition, there are statements detailing the condition of state, national, and commercial banks, as well as trust companies.

  • Series IV: Reports Studies and Publications, 1885-2006 [Bulk Dates: 1892-1985]

    This series contains annual reports, memoranda, newsletters, pamphlets, press releases, reports, statements, and studies issued by the New York Clearing House Association, as well as a file on the history of the organization.

  • Series V: Constitutions, Rules, and Regulations, 1884-1982

    This series contains files documenting revisions to the Constitution of the New York Clearing House Association, and its Rules and Regulations. Folders are filed by date of the revision and include the Constitution and/or Rules and Regulations, with the new amendments. Most documents are originals; a few are photocopies of the originals.

    The series also includes two volumes containing the Constitution of the New York Clearing House Association and revisions for 1941-1943.

  • Series VI: Return Item Exchange Agreements, 1940-1947, 1956, 1970-1971

    This series consists of correspondence and copies of agreements and resolutions from member and sometimes non-member banks pertaining to exchanges and Saturday closings.

  • Series VII: Photographs and Other Images, 1858-1987, undated

    This series includes photographs, as well as other images, such as architectural renderings and drawings from Harper's magazines.

    The images include officers and other staff, buildings, events, images used for publications, and photographs taken to document art and portraits owned by the Clearing House.

  • Series VIII: Amicus Briefs, 1963-1988

    This series consists of files containing correspondence, legal case materials, and amicus briefs filed by the New York Clearing House Association.

  • Series IX: General Historical Records, 1853-2000

    This series consists of four boxes (Boxes 125-129, and a few oversized items) labeled as "Miscellaneous Historical Records" by the New York Clearing House Association, as well as materials from unlabeled boxes. These files include bank histories, volumes with comprehensive lists of officers and members of committees of the New York Clearing House Association (circa 1853-2000), histories, membership applications, sample certificates and forms, and subject files on the City Collection Department, Federal Reserve, National Currency Association, New York Clearing House Building Company, Gold Fund Committee, as well as committees, exchanges, taxes, and other topics.

    There is additional information on the history of the New York Clearing House Association in Subseries IV.2: Other Reports, Studies, and Publications.

Using the Collection

Rare Book and Manuscript Library

Restrictions on Access

This collection is located off-site. You will need to request this material at least three business days in advance to use the collection in the Rare Book and Manuscript Library reading room.

This collection has no restrictions.

Terms Governing Use and Reproduction

Single photocopies may be made for research purposes. The RBML maintains ownership of the physical material only. Copyright remains with the creator and his/her heirs. The responsibility to secure copyright permission rests with the patron.

Preferred Citation

Identification of specific item; Date (if known); Name of Collection; Box and Folder; Rare Book and Manuscript Library, Columbia University Library.

Accrual

No additions are expected

About the Finding Aid / Processing Information

Columbia University Libraries, Rare Book and Manuscript Library

Processing Information

Records processed (Boxes 1-42, primarily proof ledgers) in March 2009 by Justin Jackson, GSAS 2012. Additional records processed by Catherine C. Ricciardi, 2016-2018.

Finding aid, including the historical note, was written in March 2009 by Justin Jackson, GSAS 2012. Additions were made by Catherine C. Ricciardi, 2016-2018.

Separated Materials

A copy of Sections 2, 3, and 4 of Financial New York : a history of the banking and financial institutions of the metropolis by William Ten Eyck Hardenbrook was separately cataloged.

Revision Description

2009-05-02 File created.

2009-06-02 xml document instance created by Lea Osborne.

2016-10-25 xml document instance updated by Catherine C. Ricciardi.

2018-09-20 xml document instance updated by Catherine C. Ricciardi.

2019-05-20 EAD was imported spring 2019 as part of the ArchivesSpace Phase II migration.

Subject Headings

The subject headings listed below are found in this collection. Links below allow searches at Columbia University through the Archival Collections Portal and through CLIO, the catalog for Columbia University Libraries, as well as ArchiveGRID, a catalog that allows users to search the holdings of multiple research libraries and archives.

All links open new windows.

Genre/Form

Heading "CUL Archives:"
"Portal"
"CUL Collections:"
"CLIO"
"Nat'l / Int'l Archives:"
"ArchivedGRID"
Ledgers (account books) Portal CLIO ArchiveGRID
Letter books Portal CLIO ArchiveGRID
Minute books Portal CLIO ArchiveGRID
Photographs Portal CLIO ArchiveGRID

Subject

Heading "CUL Archives:"
"Portal"
"CUL Collections:"
"CLIO"
"Nat'l / Int'l Archives:"
"ArchivedGRID"
Banks and banking -- Accounting Portal CLIO ArchiveGRID
Banks and banking -- New York (State) Portal CLIO ArchiveGRID
Banks and banking -- New York (State) -- New York Portal CLIO ArchiveGRID
Clearinghouses (Banking) -- New York (State) -- New York Portal CLIO ArchiveGRID
Finance -- New York (State) Portal CLIO ArchiveGRID
Finance -- United States Portal CLIO ArchiveGRID
Finance -- United States -- Accounting Portal CLIO ArchiveGRID
New York Clearing House Association Portal CLIO ArchiveGRID

History / Biographical Note

Historical Note

The New York Clearing House Association was the first and largest bank clearing house in the United States. Established before the Civil War, this entity was intended by its founders to systematize and rationalize previously disorganized exchanges and settlements between New York City's banks. These institutions which established the Clearing House became the very heart of American finance in the late nineteenth century as the nation developed a financial system increasingly autonomous from the English and European banks on which Americans had previously depended for credit and capital investment. During the American Civil War, the federal government intervened in a growing financial sector and developed fiscal and monetary policies adequate to the Union's military and industrial needs. In the war's aftermath, New York's banks, and the credit the banks made available, financed a rapid expansion of American industry and transportation infrastructure which made the United States a global economic power and conquered the American West by the end of the nineteenth century. In the twentieth century, some of the New York Clearing House's member banks, symbolized in American society, politics, and culture by "Wall Street," came to represent both the awesome power of a robust American financial sector and the greed and irresponsibility which many believed precipitated the disastrous stock market crash of 1929 and the Great Depression of the 1930s.

The California Gold Rush and an explosion in railroad construction marked the four years before 1853, when the Clearing House was founded. In this same period the number of New York City's banks more than doubled, from 24 to 57. Before the Clearing House, banks had settled their accounts in a laborious manner, employing porters to travel from bank to bank to exchange checks for gold specie. This process became a daily event as the number of banks multiplied. However, the actual reckoning of accounts between banks typically occurred on Fridays in front of a Wall Street bank, in what came to be called the "Porter's Exchange." This practice necessarily led to errors in records and abuse. Several bankers looked to London's Clearing House system as a model for resolving the cumbersome weekly settlement process as others expressed frustration with the current system. In 1831, Albert Gallatin, previously the Secretary of the Treasury for the United States and President of the National Bank of New York, wrote that the lack of a daily exchange of drafts among banks "produces relaxations, favors improper expansions and is attended with serious inconveniences."

In 1851, George D. Lyman, a New York bank's bookkeeper, suggested in an anonymous article that banks should consider sending and receiving checks through a central office. On August 18, 1853, he repeated his proposal in another article to which he affixed his name, and asked interested cashiers to contact him if they endorsed his plan. The city's banks responded enthusiastically. On October 4, 1853, the New York Clearing House was officially established by a group of cashiers led by Francis E. Edmonds of the Mechanics Bank. On October 11, in the basement of 14 Wall Street, 52 banks participated in the first transaction, exchanging checks worth $22.6 million. Two decades later, the average daily clearing approached $100 million. At the new Clearing House, specie certificates replaced gold as the means of settling balances. Porters exchanging certificates for gold deposited at the Clearing House's member banks now no longer exchanged specie, thus experiencing fewer errors and risks. The use of specie certificates also relieved the strain of the banks' cash flows and reduced the potential for runs on deposits. Requirements for all member banks, such as weekly audits, minimum reserve levels, and a daily settlement of all balances, ensured increasingly efficient and regularized exchanges.

Lyman retired from his position as manager of the Clearing House in 1864, and was succeeded by William A. Camp. Camp had previously been appointed in 1855 as a discount clerk in the Importers and Traders' Bank of New York. Appointed first teller of the Artisans' Bank the next year, Camp in 1857 was hired as the assistant manager at the Clearing House. He was manager for the Clearing House for the years in which the first volumes of these records began to be kept. "To executive ability of a high order," Albert S. Bolles wrote of Camp and his Clearing House in Practical Banking (1884), Camp "unites unusual accuracy and promptness in the dispatch[sic] of business, as well as a wide acquaintance, both theoretical and practical, with financial subjects...":

"It speaks volumes for the care and scrupulous accuracy with which the business has been conducted, that in the entire history of the Clearing-house, extending over nearly thirty-one years, its transactions have always balanced to a cent. The only instance on record of an error in any statement emanating from it occurred a few years ago in the weekly bank statement, and this was due to an error of one of the clerks in transcribing the figures. In making the entries, the officials at the Clearing-house and their subordinates use ink only. The clerks sent by the banks may at their option make their entries in pencil."

The New York Clearing House naturally became an instrument of financial self-regulation in the numerous economic downturns and financial panics that occurred on average every five-and-a-half years between 1853 and 1913, in a rapidly expanding American economy. Leading Clearing House member banks first attempted to stabilize a tottering financial system in the 1857 panic. When specie payments were suspended, Clearing House banks, in an effort to shorten the panic's duration and increase public confidence, started to issue "Clearing House Loan Certificates." Effectively a kind of currency, these certificates were backed not by gold but by discounted county and state bank notes held by member banks. Printed with the words "Payable Through the Clearing House," these loan certificates were the joint liability of all Clearing House member banks, making them a far more secure form of payment. They were issued in smaller denominations in the 1873 panic, and were maintained by member banks as a substitute currency in later financial crises, including the depression which began in 1893-1894. Though it has been argued that these certificates violated federal laws against privately-issued currencies, a contemporary once wrote that the Clearing House's loan certificates "performed so valuable a service...in moving the crops and keeping business machinery in motion, that the government...wisely forbore to prosecute."

Because of their stability during financial panics, the Clearing House Loan Certificate's value became a reliable measure of the financial health of the American economy as a whole. Bolstered by discounted collateral, each Loan Certificate was worth more than its dollar equivalent. The currency premium, or exchange rate, between Clearing House money and greenbacks (or gold specie) thus operated as an indicator of the gradual restoration in bank money. When the premium dropped to zero, a one-to-one relationship obtained between certificates and currency, making substitution unnecessary. In 1913, the passage of the Federal Reserve Act by the U.S. Congress established a clearing house system at the federal government level, modeled after the private New York Clearing House and other similar financial exchange institutions across the nation. The Federal Reserve system subsequently and effectively assumed the role which private clearing houses had played in stabilizing and regularizing exchanges and mitigating financial panics.

Since the creation of the Federal Reserve System, the New York Clearing House Association has concentrated on facilitating the completion of financial transactions by clearing the payments involved in these transactions. The Clearing House also continues to function as a banking association, and promotes the interest of its members, while also serving as a proactive resource to promote common interests and help shape the United States banking industry.