New-York tribune., 1878-12-20
DETAILS OF THE SYSTEM.


DETAILS OF THE SYSTEM.
FOUNDING OF THE NEw-YoRK CLEARING HOUSE
MAGNITUDE Cd IFS BUSINESS FOR QUARTER OF
A CENTURY,
limited States Assistant Treasurer HillhOuse
was represented first time on November 20, AT
the NewYork Clearing House, and the new order for
having drafts OF the banks the New-Iork banks
was carried into effect. The amount OF chechS
cleared that day S3JO.OOO, al OF Whch
were settled before O'Clock. In describingth meou
OF the new system q bank president SAID:
Under the rule sixty bank messengers visited inc
subTreasury daily and stood in row, each with one OF
two hundred drafts to be examined. aud then 10 DC
maid one by one-which necessarily consumed large
portion Of the banking hours Of this number Oh men
Now each makes out slip OF paper list OF the
amounts drafts upon the Treasury when Win the
drafts ia enclosed In sealed envelope upon the back
OF which Is printed the OF the bank owning the
drafts aud in writing the total amount due. These
packages are handed the Treasury Clerk at the Clear
ing House, who simply gives his receipt FOR the I'M
opened package. After they have all been delivered
and receipted tho clerk takes tnom 10 'he
sub-Treasnry where they examined one by one,
and tho gross amount due 10 the banks ls pau
70 the Clearing House Manager, VINO immS
dately settles with each bank. The ne" system
makes a saving Of time Of sixty men, dspenses Wth
q crowd at the Treasury and saves drawing the ualH
number OF checks and drafts on the treasury
which are presented Dy the banks. II the
Assistant Treasurer holds checks on the oahAs'
he puts them in in the way ana the total amount
OF these is deducted the amount which the clearing
House may receive from the banks against the SUB
treasury The new system has no special significance,
further than as mechanical arrangement to economise
time and to prevent mistakes"
At tue Sub Treasury 1t stated that the new pan
worked satisfactorily and would result in great saving
Of time and trouble to the Treasury Department.
"The Clearing House SYSTEM so necessary to the
l1N unfQF IA
outside community" said recsntly a gentleman in
terested in the subject, From conversations with
George g. Coe, II. c. FahnestOck and General Man
ager Camp, The TRIBUNE is enabled to FUR
nsh an interesting sketch Of the system from
its earliest introduction as aid to banking with
special reference to operations Of the New-Iork
Clearing House.
The system was first established at London In 1870
But only within the past twelve years has the London
Clearing House furnished any statistics OF It's opera
tions It is mentioned significant fact that, not
wthsandng London the great financial centre Of the
world the annual transactions Of Clearing House are
about the same as those of the Clearing House in
this city. The New-York Clearing House was the
first Of the kind established America, and began its
operations October H. 1853 II then consisted OF htty-
two banks Since that time Clearing Houses have been
established in all the principal cities of the country
there now being twenty-five IN the United States The
Increasing business Of exchanges by the banks, II Is
claimed by bankers, made the organization OF
such an association q necessity. Each bank
in its daily dealings receives many bills OF other
banks and cheeks dawn them that at the close OF
business every bank has in Its drawers various
thus due il by the banks 1t is in like manner,
the debtor OF other banks which received its bills
and cheeks. Before the Clearing House was established
up its with other bank and 20 send mes
senger TO ne debtor panks 10 present acGohs d a bi %
finally became abOriOus dangerous and complicated
that balances were arranged weekly every FrGGy The
Clearing House 0bviated this Its settlements are made
rapidly that the transactions edlnsted thG"nGh ~
have amounted in single day to $2O6O34'S2O 5l-al
300 6snk ledger accounts with numerous daily
I'm and enabled the banks settle with each other
little trouble 1t also brought the bank officers INTO init
mate and friendly relations aud enabled them
oy united action 10 aid and Strengthen one
another IN times OF excitement and financial danger
e STeSSRg Sg5 oh & e p@ House m
loans to the Government to carry on the war These
loans amounted 10 over $500 100000.
The panic of 1873 was checked by similar action, the
experience OF the war enabling the banks
resources by the use OF loan certhcates-amOunlinG
to S250O00OO-as to sustain themselves against
panic the results OF which were greatly mod
fed by their action.
HOW CLEARANCEs ARE MADE.
The Hew-York Clearing House is in the old Common
wealth Building Nassau and Pine-sts. The Gearing
Room Is on the third floor, and provided with
tinuous line Of desks, ffty-eight in number These
are the form OF ellpse. Each bank has
desk which bears its name and number.
Desk No. Is occupied by the Bank OF NewYork which
was the first bank organized IN New-YOrk and OF which
for q long time Alexander Hamilton a director and
Aaron Burr depOsitor The Clearing House is opened
promptly at 10 a. m. by Manager Camp. The banks are
each represented by two clerks, a messenger who
brings with him the checks and other evidences
indebtedness that his bank has received upon other
banks during the previous day These called the
exchanges" and are assorted for each bank
and placed 10 envelopes On the outside of each
veope slip on which the OF the various
items which IL contains. These are arranged on the
places on line outside the row Of desks each opposite
the desk assigned TO his bank which is occupied ny the
banks clerk who has printed list OF all the banks in
the Clearing House and the amounts this mes
senger has against other bank At
platform each messenger moves forward to the desks
OF the other banks beginning with the next in line,
for the bank represented by that desk The clerk
ceiyes the l returns II checked and signed and the
clerk has been visited and tue has returned
his original position in the line. This system OF
exchanges" is accomplished in ten minutes. Under
the old order OF exchanges would have required seven
In ADDITION great saving Of time by the present
method it Is claimed tina; bank knows at the
the clerks showing the difference between the total
amounts received and brought by the banks and the
bank these accounts made up the clerks report
Columns Sen on uha is tefmed If ne efforS
arc found the clerks are permitted to return to their
anime aud revise work and uutil every
has been ecr,seed can the clerks be relieved from duty
reporting entering and proving daily accounts must be
collected from the offending bank.
The debit banks are required 10 pay to the Manager
balances dne before 1880 p and the credit banks
receive the money Immediately thereafter. that by
completed record kept of the daily transactions OF
each bank in tho Clearing House. aud weeks
deposits and circulation must be made to the Manager
the condition aud business Of bank be