The Emporia news. [volume] (Emporia, Kan.) 1859-1881, 1870-03-04
THE CLEARING HOUSE.

The Clearing House is an institution
created by a number of banks associa-
ting themselves together, and meeting,
by their representatives, at a certain
time and place, for the purpose of set
thing their accounts with each other.
Each hank presents statement of all
the checks upon all the others which it
has received from its customers; and,
upon comparing and exchanging these
checks among them all, the balance for
or against each bank is ascertained, the
payment of which either to or by each
bank settles the whole account as be-
tween them for that time. No money
is required, except so much as may be
necessary to pay these several balances.
Bank A, for example, has received 800,
COO in checks upon bank 3, while the
latter has received $4,000 in checks up
on the former. These checks to the
other, leaving 5000 in favor of A, to
be paid in money by b. The effect of
this simple arrangement is TO make the
banks, in relation to the public, practi-
cally one bank. 1t is an immense con-
venience in conducting the exchanges
of business, and making transfers from
one account to another, by econoinizing
both time and capital. It enables the
banks to do a vast amount of business
WIFI IuclE CuSLOLHcTS anu VIII cetCu Otu-
er, while using comparatively small
| amount of money.
By mutual arrangement among the
banks, the balances aseertained by the
| Clearing House of London are not paid
| in money, but by checks on the Bank OF
England. Under this system each bank
is required to keep an account with the
Bank of England. Whatever balance
against it is due in favor of the others is
a lr1 -, a, aaI.
against deposits in the Bank of Eng
land, without the use of single dollar
of money. Sir John Lubbock, in g pa
per presented to the Statistical Society,
i in June, 1866, showed that about 20 pei
cent of banking transactions were set
tied through the London Clearing
House, without any use of money that
about "A percen were settled by mean:
of checks and bills, equally without us
ing money; that nearly So per cent
were settled by the use of bank notes
and little more than y per cent. set.
tied in CON- This estimate was based
upon the statistical history of % mil
lions sterling which had passed through
this bank in a few days and was, more
over, submitted as a fair average of {
general fact.
The total amount of transactions set
tied by the London Clearing House il
1905, was 0,O54.O5SsUuV pOUnuS STERLING
as against "a, PSI, OO0, 600 for 1867 show
ing an increase of over f270,000,O00
This is equal, in round numbers, u
SI7 SIC. 195, COO, All this vast bushes
was finally disposed of by the clerks o
the Bank of England spending a shor
time each day in making the proper en-
tries of debit and credit upon thei
books A few millions of pounds ster
ling in coin deposited in the Bank o
. England suficed as the basis for this i'm
mense system of exchanges in a singh
, year. According to the estimate of MI
Lubbock, the Clearing House, checks
bank notes, and commercial bills trans
act ali the business that passes thFoug
the London banks, with the exceptiO
of about = per cent. which requires tn
use of coin.
I The same general character marks tn
: C1earfnk H0ase system " herever Adepl
J, ed. As a monetary. machine, it is
splendid contrivance to economic time
Q and make small amount Of money d
a large amount Of work. We have 8
E hand some instructive figures in regar
j, to the New York, Clearing Hcuse, an
) propose to present them at Z future pt
rfod.SAN.9T.4 adependsns ca 81 -