Abstract
MOST OF THIS [clearinghouse] currency was illegal, but no one thought of prosecuting or interfering with its issuers.... As practically all of it bore the words 'payable only through the clearing house,' its holders could not demand payment for it in cash. In plain language, it was an inconvertible paper money issued without the sanction of law, . . . yet necessitated by conditions for which our banking laws did not provide.... When banks were being run upon and legal money had disappeared in hoards, in default of any legal means of relief it worked effectively and doubtlessly prevented multitudes of bankruptcies which otherwise would have occurred (Andrew 1908b, p. 516).
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