[Volume XXV
THE CHICAGO BANKER
10
The Wisconsin National Bank
OF MILWAUKEE
CAPITAL -	$2,000,000
SURPLUS -	1,000,000
OFFICERS
L. J. PETIT, President	HERMAN F. WOLF, Cashier
FRED'K KASTEN, Vice-President	L. C. BOURNIQUE, Asst. Cashier
CHAS. E. ARNOLD, 2nd Vice-President	W. L. CHENEY, Asst. Cashier
WALTER KASTEN, Asst. Cashier
DIRECTORS
L. J. Petit	Frederick Kasten	R. W. Houghton	Oliver C. Fuller
Herman W. Falk	Ceo. D. Van Dyke	Gustave Pabst	Charles Schriber
Isaac D. Adler	Frank L. Vance	Patrick Cudahy
Wisconsin Trust Company
MILWAUKEE
CAPITAL	-	$500,000
SURPLUS -	100,000
OFFICERS
OLIVER C. FULLER, President	GARDNER P. STICKNEY Treasurer
FRED’K KASTEN, Vice-President	FRED. C. BEST, Secretary
R. L. SMITH, Asst. Secretary
DIRECTORS
L. J. Petit, Chairman Frederick Kasten R. W. Houghton Oliver C. Fuller Herman W. Falk Charles Schriber Gustave Pabst Gardner P. Stickney Isaac D. Adler	Frank L. Vance Patrick Cudahy
sœaâÂam	misë ®mm.
moneys of all other nations combined. This gave rise more than one hundred and fifty years ago to the need of safe and economical means of effecting those settlements. In the same way and for the same reasons the financial supremacy of New York on this continent was established and the bulk of trade settlements of this country are for like reasons effected there. It is not surprising then that the first clearing house of which we have any fairly authentic record was established in London. This was done about the year 1773. The date is a matter of doubt, but if the London clearing house had an earlier existence it was apparently not as an organized body, and it had neither power, influence, nor any recognized financial status. It was then, and has always remained an unincorporated, voluntary association, without capital; and it was established primarily for convenience and economy.
_ Prior to its establishment every bank in the city had been obliged at considerable risk and expense to make the round with tellers and settling clerks once or more a day in order to present checks and claims received during the course of business and to collect the
adjusted. Actual money is used only to pay the differences between debits and credits.
The subject of international exchange is too broad and too intricate to permit in a paper of this nature even superficial consideration of details. The most that can be done will be to present a few illustrations of a general nature. As a part of the intellectual equipment of a banker who desires to keep abreast the times, and to possess a comprehensive g׳rasp of the forces which influence domestic and foreign trade, and a knowledge of the various ways in which this influence is exerted, nothing could be more helpful than a complete understanding.^ or I might better say, a thorough appreciation of that branch of the clearing system which we call “exchange.” Before going into that phase of the subject, however, we shall first consider as briefly as possible the development and operation of modern clearing houses, and take a glimpse of some of the possible and even probable extensions of their powers, functions, and usefulness in the future.
While more than one city lays claim to the honor of being the first to establish a system of daily settlements of reciprocal demands between banks through the agency of a clearing house, the fact seems fairly settled that as the trade of Great Britain grew and flourished until it extended to every quarter of the globe, the financial supremacy of London became more and more firmly established. Eventually the increasing volume of trade settlements of the world were of necessity focused in that city. Though the trade of other nations has grown, and the financial power of numerous other cities has waxed in strength it still remains a fact that in the settlement of international trade obligations more exchange is drawn in pounds sterling—the bulk of which is of course drawm on London—than in the
setting these mutual debts and credits between the several banks at a common time and place, and the payment in cash of the resulting balances. Here we have the inception of the idea embodied in modern clearing houses. One more step takes us to the settlement of balances growing out of trade between banks in one city and those in another city by drafts upon a central point instead of by remittances of cash. These settlements give rise to exchange “quotations” between cities. Finally the last step brings us to international exchanges, which are conducted in practically the same manner as domestic exchanges, and from this point of vantage we shall be able to enjoy a full view of the means and methods of financing the commerce and settling the trade balances of the whole world. The principles employed in these transactions are identical. The individual pays his debts not with actual cash, but out of balances due to him; he uses a check because it is safer, less expensive and more convenient. Between themselves banks do likewise. So also the settlements between our domestic cities and between nations are
ORGANIZED 1810
Commercial & Farmers
National Bank of Baltimore, Md.
Federal, Stale and Municipal Depositary
Bankers are invited to open Reserve or Active Accounts on Liberal Terms. Extensive Banking Connections enable us to render effective service. Correspondence invited
James M. Easter, Pres,	Frank V. Baldwin, Cashier
Harry M. Mason, Vice-Pres.