The Clearing House Association was famous for its accuracy and diligence in tracking the country's payments system when it functioned as the central bank of the United States in the mid-19th and early 20th centuries. In fact, the organization was so confident in the integrity of its numbers that scribes tallied their calculations in pen and ink.
Now 42 ledgers tracing the banking system's response to crises like the financial panic of 1907 are available for all to see and double-check at Columbia University's Rare Book & Manuscript Library. The Clearing House's 20-pound tomes are on permanent loan, along with meeting minutes and correspondence between Clearing House trustees and bank heads.
These documents, which cover the period between the Clearing House's founding in 1853 and 1984, show "moments when the Clearing House really rose to the occasion and became the last line of defense before economic collapse," says Thai Jones, who serves as the American history curator at the Columbia library.
"It's a behind-the-scenes record of some of the most dramatic moments in the history of American finance and capitalism," Jones says, citing the "crucial heroics" of 1907 in which J.P. Morgan, "a major Clearing House figure," rallied his fellow bankers to step in and lend money to troubled institutions in order to avert a market collapse. "That experience was important in creating the drive for the Federal Reserve" in 1913, he explains.
The records will undoubtedly be of interest to economic researchers who need access to historic Clearing House data, according to Paul Saltzman, president of The Clearing House Association (now an advocacy group representing 23 of the largest U.S. banks) and executive vice president and general counsel of The Clearing House Payments Co. Saltzman adds that those with an interest in the workings of private central banking will also find plenty to chew on
"At a time when people are reevaluating the appropriate role of the Fed, it will be interesting for historians and policymakers today to see that time period when the Clearing House served as a central bank," Saltzman says.
Meanwhile, Columbia's library was eager to get its hands on the archives as a way to flesh out its historical collections on three of New York City's major industries: publishing, philanthropy and finance.
"The history of capitalism is one of the most important new trending fields in historical study," Jones says. "In the last few years since the financial crisis, there's been a remarkable turn by historians to try to really understand what capitalists were doing, with a new sensitivity toward working people, women and people of color."
And while Jones admits that the handwritten ledgers are, to his eye, "utterly inscrutable," he says they're easily devoured by the number-crunching set.
"We had the Clearing House [staff] over to celebrate and reconnect with the materials, and we opened up the ledgers to certain key dates" including Black Tuesday in 1929, Jones recalls.
"Everyone was gathered around this 100-year-old book and began searching through the numbers and doing their own calculations," he says. "They were immediately able to make sense of the statistics."