It will be noticed that here, too, a method or system from approved practices has grown up, not only without the sanction of law, but in part actually in defiance of law. I refer to the fact: _First_: That there is no law in any state authorizing the organization of the Clearing House, and yet there are over two hundred and fifty of them in the United States. _Second_: That there is no law authorizing any Clearing House Committee to examine the banks composing it. But in twenty cities at least the Clearing Houses are not only examining their own members, but go even further than that and insist that no bank shall clear through any Clearing House bank which does not submit to an examination by the examiner appointed by the Clearing House. This has been found essential to the safety of the banking situation in these cities, but is no more essential in these twenty cities than in five hundred or one thousand other cities; in fact, essential throughout, and all over every state of the Union. This has come to be an established practice, and is being taken up rapidly, all over the United States, and yet there is no law whatever that authorizes it, suggests it, or by implication justifies it. _Third_: With the consent and approval of public officials, both State and national, but without authority of law, the banks of many of our Clearing Houses are carrying at all times a large part of their reserves at their Clearing Houses for their convenience and as an aid to commerce. Undoubtedly they are doing just what they should do. It is stated upon high authority that the amount of reserves that are now centralized and mobilized at the Clearing Houses today will exceed $200,000,000. This practice is the result of experience, not only in the times of panic, such as 1893 and 1907, but also for the daily needs of their gigantic transactions. _Fourth_: In like manner, not only without law, but actually in defiance of law, these self-contained, self-centred, self-governing Clearing Houses, whenever necessity calls for it, very wisely and properly issue a true credit currency, in principle, at least in the form of Clearing House certificates which serve all the purposes of legal currency itself. They are issued in $1 certificates, $2 certificates, $5 certificates, $10 certificates, $20 certificates, $50 certificates and in denominations of $100, $1,000, $10,000, and on up to as many or more millions. All this is done not only without the authority of law, but in the latter case in actual defiance of law. Here then again we have purely as a result of evolution in modern American banking the second naturally developed unit, the Clearing House, by combining, coördinating and unifying all the banks, or simple units, coming within its jurisdiction. They exist without law and operate without law, and in one respect, as I have just said, in defiance of law. This Clearing House unit consists of the following elements: