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sociation. The Chicago innovation appealed to financiers. When the Missouri-Lincoln Trust company was closed, prior to the panic of October, 1907, the St. Louis banks arranged for clearing house investigation. The St. Louis clearing house maintains a complete bureau of examination. The annex is in charge of trained examiners, formerly in the government and state service. The examiners investigate the assets, records and affairs of all banks and trust companies in the entire St. Louis district affillated with the St. Louis clearing house. Case of Missouri-Lincoln Trust. The Missouri-Lincoln Trust company would not have been forced into liquidation if the clearing house had created the examination bureau two years earlier. The bank would have been saved. After the institution was in a deteriorated condition, the only means of guaranteeing depositors against loss was for the clearing house to assume the liability, and this was done. Had the clearing house bureau been organized in ample time, there would have been no occasion for a guaranty. Loss would have been prevented. The St. Louis and Chicago Clearing House association operate on the principle that losses should be obviated. Their object is to prohibit improper banking and thereby remove or reduce the chance of hazard. The deposit guaranty law does not succeed in preventing losses, but aims at protecting depositors, and the result is that it encourages injudicious banking and tends to impair the capital and surplus of financial institutions. A. M. Young, state bank commissioner of Oklahoma, said he did not underestimate the precautionary importance and force of clearing house supervision. In fact, he expressed decided approbation, intimating that the clearing house could produce more good than the federal or state governments. He thought clearing house supervision would be highly desirable in the cities of Oklahoma, but he believed the guaranty law would be necessary for country banks.
