Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:134:\"Declaration of views_handler_filter::options_validate() should be compatible with views_handler::options_validate($form, &$form_state)\";s:5:\"%file\";s:109:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:589;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_handler_filter::options_submit() should be compatible with views_handler::options_submit($form, &$form_state)\";s:5:\"%file\";s:109:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:589;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:151:\"Declaration of views_handler_filter_term_node_tid::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state)\";s:5:\"%file\";s:131:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/modules/taxonomy/views_handler_filter_term_node_tid.inc\";s:5:\"%line\";i:303;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:154:\"Declaration of views_handler_filter_boolean_operator::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state)\";s:5:\"%file\";s:126:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter_boolean_operator.inc\";s:5:\"%line\";i:149;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:148:\"Declaration of views_handler_filter_node_status::operator_form() should be compatible with views_handler_filter::operator_form(&$form, &$form_state)\";s:5:\"%file\";s:125:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/modules/node/views_handler_filter_node_status.inc\";s:5:\"%line\";i:14;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_plugin_row::options_validate() should be compatible with views_plugin::options_validate(&$form, &$form_state)\";s:5:\"%file\";s:104:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/plugins/views_plugin_row.inc\";s:5:\"%line\";i:135;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:126:\"Declaration of views_plugin_row::options_submit() should be compatible with views_plugin::options_submit(&$form, &$form_state)\";s:5:\"%file\";s:104:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/plugins/views_plugin_row.inc\";s:5:\"%line\";i:135;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-paper/clearing-arrangements-united-states-federal-reserve-system', '', '54.36.148.252', 1602743782) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128
Clearing Arrangements in the United States Before the Federal Reserve System | CFSP | Consortium on Financial Systems and Poverty

Clearing Arrangements in the United States Before the Federal Reserve System

Warren Weber
Publication Type: 
Working Papers
Publication Article File: 
Publication Year: 
2012

This paper examines two different clearing arrangements for bank liabilities. One was a profit-maximizing private entity, the Suffolk Banking System. It cleared notes for New England banks between 1827 and 1858. The other was a nonprofit collective, the clearinghouses organized in many cities beginning in 1853. The paper examines how well these arrangements prevented bank failures and acted as lenders of last resort. It finds the Suffolk system had fewer failures but acted less like a lender of last resort. It argues that these differences can be explained by the different incentives facing the Suffolk Bank and the members of clearinghouses.

This paper came out of the 2011 CFSP workshop on the Optimal Design of Payment Systems. By reviewing the history of early clearing house arrangements in the United States, it is hoped that insights relevant to the emergence of electronic payment systems in developing countries will be revealed.

JEL Codes: 
E42, N21
Region: 
United States and Canada
Country: 
USA
Topic: 
Economic History
Topic: 
Payments Systems