Lexington weekly intelligencer. (Lexington, Mo.) 1871-1887, 1873-10-22
discovered, and In somc associations

tho person mnkihg them IL fined n
saiaii amount. When tic statements
nre completed md prgyoi, each CLERK
goes back 10 his bank, Bearing with
ltiat n stsiesltnt oil assured CORRECT.
icss, show ing The toia. amount thv
bank owes NIL tho others. ntid tie
amount owed each, or, ~ The case
may he, tho amount drawn from
each. Later In tho day-at l =. NJ
In Now York, tho debtor banks be-
gin to send to the clearing house the
amouhtss til yseveraliy owe, as slio wii
by tho statements, 6nd these are sent
in single sum, 80 that the First
National sends iM one package MI the
monry II owes Ill the other banks.
Tho clearing house manager receipts
for each amount aud then distributes
clerks of the other banks arrive. each
receives IN a single pilo the amount
duo his haik from all The others.
Thus It Happens that for the time
being the clearing house Is the CON-
ImOn debtor aud common creditoy al
Mi The banks. 1t owes the creditor
banks tho balance duo them, and thu
debtor banks owe Tie clearing huusc
u sum sufficient to liquida,c the
balances due all other banks.
THE GREAT ADVANTAGE or THU
SYSTEM
is shown hv the nyoidcpce Of errors
between banks aud by the saving of
time. The amount of money to lie
clearing house is very small compared
will, the bulk of the exchanges. In
the first five years Of the establish
Mcnt of the New York clearing house
from 1883 to 1S5S-the cicnrings
amounted to $50, 9S3,556 81, white
the amount of specie AID coin Ger.
tiiicatrs in which the balances were
then paid was $l,57i,i3o, $50 is. Eni
tho transfer and counting OF this
amount of specie was found to bc
troublesome. aud before the clearing.
house had existed i've wears. the sys.
TEN of coin aud certificates was
Established. The Bank Of America
was made n common depository, and
each of the associated banks scmt
there its coin and received in OK.
change ccrtiiicatca which were good
in settling balances NJ the clearing
house. This plan rendered the
amount of specie used in settling bal.
anccs very small. although its rep
rcsrutativc was still current, and
iiually the last vcstigc nf solid money
Iii appeared from the clearinghouse,
when the l"%al-,cElcr act OF 1862 wen
into fun effect.
THE CrsiIoT OF TIE WHOLE MATTEL
Is that the clearinghouse il sbalIk
viii, hanks inr dealers. Just H. tn,
institution we ca. Il Gauk has inGi
vIhUais Tor customers. John Jones
who does business ut the Ei.s
National. agrees To pay :!l la, n"ic'
aud all the drafts upon him III tila'
bank; he also takes there all The nutc:
Of his cn]ii,iuncr-, and the cl,ccks an,
drafts paid iIiui, as well rs the none,
lac collects, aud ~, 3 T.. NJ. daily L.,
must make the two sides of his ac
count balance, or he is broken: t.,
amount le has to pay to fleet this j:
his debtor balance: the amount Il,
has left over Ut ) o'clock is his rrr,,
i."r balance. The Firs, National an,
all other banks send 10 the clearing
house the demands they have 81, c.ci,
and the balance must be mat.r Mp il
cash or The bank Ealing 10 do So il
broken. In other case the settlement
effected by transfers uf cash bctWrrl
Tie parties is reduced to the srnai!esI
possible amount. A. between Junc:
and the public. the bank is the ON
EIon debtor and common creditor; st
l,ei the FIRST National and ti.t
other bauh>, the cicarin. house sus
tails exactly the san!e relationship