You pass from Broad street into the basement of a brown stone building
just below the Stock Exchange, and find yourself in a long, dimly-lighted
passage way, which leads into a small courtyard. Before you is a steep
stairway leading to a narrow and dirty entry. At the end of this entry
is a gloomy looking door. Pass through it, and you are in the famous
Gold Exchange.
This is a showy apartment in the style of an amphitheatre, with an ugly
fountain in the centre of the floor. An iron railing encloses the
fountain. Against the New street end is the platform occupied by the
President and Secretary, and on the right of this is the telegraph
office. There are two galleries connected with the room, one for the use
of visitors provided with tickets, and the other free to all comers.
There is an indicator on the outer wall of the building on New street,
from which the price of gold is announced to the crowd without. It is a
common habit with sporting men of the lower class to frequent New street
and bet on the indicator.
There are but few benches in the Gold Room. The members of the Board are
too nervous and excitable to sit still, and seats would soon be broken to
pieces in their wild rushing up and down the floor.
The business of the day begins about ten o'clock. The rap of the
President's gavel opens the session, and as there is but one thing dealt
in--gold--the bids follow the sound of the mallet. The noise and
confusion are greater here than in the Stock Board or the Long Room, and
it seems impossible to a stranger that the President should be able to
follow the various transactions. When the excitement is at its height,
the scene resembles "pandemonium broken loose." The members rush wildly
about, without any apparent aim. They stamp, yell, shake their arms,
heads, and bodies violently, and almost trample each other to death in
their frenzied struggles. Men who in private life excite the admiration
of their friends by the repose and dignity of their manner, here join in
the furious whirl, and seem more like maniacs than sensible human beings.
And yet every yell, every gesture, is fraught with the most momentous
consequences. These seeming maniacs have a method in their madness, and
are changing at every breath the value of the currency upon which the
whole business of the country rests. When the fluctuations are very
great, fortunes are made and lost here every hour.
Connected with the business of the Gold Room are the Gold Exchange Bank
and the Clearing House. The method of settlement with these
institutions, which are indispensable where gold passes so rapidly from
hand to hand in the Exchange, is as follows: "On or before half past
twelve o'clock, a statement of all the purchases or sales made by each
broker on the preceding day must be rendered to the bank. If the gold
bought be in excess of that sold, a check for the difference must
accompany the statement. If deposits in gold or currency are not kept in
the bank, the coin must be delivered at every deficiency. The Board
adjourns at twelve, in order to enable tardy dealers to complete their
accounts. Provided all contracts are honored, the bank must settle by
two P.M. In case of default, the amount in abeyance is debited or
credited to the broker who suffers by the failure."
The Clearing House Association was created in 1853, and represents the
sum of the financial business of the city. "The Association is located
in the third story of the building of the Bank of New York. The centre
of the room is occupied by a bank counter, extending on four sides, with
a passage inside and out. Fifty-nine desks are placed on the counter for
the use of the fifty-nine banks represented in the Association. Each
desk bears the name of the bank to which it belongs. Fitted up in each
desk are fifty-nine pigeon holes for the checks of the various banks.
Two clerks represent each bank. One remains at the desk and receives all
the checks on his bank. He signs the name of the bank to the sheet which
each outside clerk holds in his hand. These outside clerks go from desk
to desk and leave the checks received the day before, with the banks on
which they are drawn. Banks do not begin public business till ten; but
clerks have to be on hand at eight, when all checks are assorted and
arranged for delivery at the Clearing House.
"At ten minutes before ten the bank messengers begin to assemble and take
their places. As they enter they leave with the messenger a slip
containing an exact account of the bank they represent. These statements
are put on a sheet prepared for that purpose, and must conform precisely
to the checks received inside, before the Clearing House closes its
duties. If there is any error or discrepancy, the bank is immediately
notified by telegraph, and the clerks kept until the matter is
satisfactorily adjusted. At ten, promptly, business begins. Clerks come
rushing in with small trunks, tin boxes, or with bundles in their arms,
and take their seats at the desks. On the side of the room entered only
from the manager's office is a desk, not unlike a pulpit. Precisely at
ten the bell rings, the manager steps into his box, brings down his
gavel, and the work of the day begins. Quiet prevails. No loud talking
is allowed, and no confusion. A bank late is fined two dollars; a party
violating the rules, or guilty of insubordination, is fined two dollars
and reported to the hank. On repetition, he is expelled the Clearing
House. The daily transactions of the Clearing House varies from
ninety-eight to one hundred millions. The system is so nicely balanced
that three millions daily settle the difference. Each bank indebted to
the Clearing House must send in its check before half after one.
Creditors get the Clearing House check at the same hour. Daily business
is squared and all accounts closed at half after three. Every bank in
the city is connected with the Clearing House by telegraph. The morning
work of clearing one hundred millions, occupies ten minutes. Long before
the clerks can reach the bank, its officers are acquainted with the exact
state of their account, and know what loans to grant or refuse. Through
the Clearing House each bank is connected with every other in the city.
If a doubtful check is presented, if paper to be negotiated is not
exactly clear, while the party offering the paper or check is entertained
by some member of the bank, the telegraph is making minute inquiries
about his financial standing. Before the conference closes, the bank
knows the exact facts of the case."