The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1893-01-01
Enormous Increase in Bank
Clearings fer 1892.
BUSINESS OF THE BANKS.
Interesting Information Concerning
Clearing House Operations.
What The Clearing House Is and How the
Banks Make their settIements-rm-
rorsance of the Association
Last Years Figures.
Ninety-fve millions,

| NluOty-lit6 IulluOuS-
This enormous sum represents the
amount of business done during 1892 by a
Salt Lake institution that neither buys,
sells nor traffics, that does not own dol
lars worth of property and has not even
corporate existence. Every day its
transactions run up to from two to four
hundred thousand dollars, and the volume
of its business is taken, both at home and
abroad, as lair criterion of the state of
trade and commercial prosperity OF Salt
Lake City.
How many people know what clearing
house is, what it is for or how its work
is performed?
OF course, the bankers know all about
it, and few we'll posted business men
have pretty clear idea of its operations.
but the ordinary run of people, intelligent
and well-informed on other subjects,
simply understand in vague way that
the clearing house is some sort of an insti
tuition that in some manner indicates the
business done by the banks. A pretty
clear understanding of what is done at the
clearing house, how and why it is done,
and the Importance and magnitude OF the
ing explanation of the business as it is
carried on here in Salt Lake City.
SETTLEMENTS sIMPLIFIED.
Everyone knows that when a merchant
receives checks in the course of trade he
does not take those checks to the bank on
which they are drawn, but deposits them
with his bank aud receives credit for SO
much cash. During the day each bank
accumulates a great number of these
checks, drawn on every other bank In the
city.
In order to effect a settlement between
| the banks II would be necessary for each
! one to send a messenger to every other
bank and pay out or collect very large
sums of money. To illustrate: Yester
day the State Bank of Utah held checks
about $50, 600. The other banks held its
checks to the amount of S59 1000. With
out clearing house association it would
+ have been obliged to collect $40, 000 from
/ Wells, Fargo q Co. alone, and pay $50, 600
to some other bank, besides other small
sums. AS matter of fact it did not pay
out or receive cent from any bank di
rectly, but simply took a clearing house
certificate for its credit balance, which
was 81, 90v. 1t was to accomplish this re-
suit that the twelve banks of the city or
gained the clearing house association.
HOW IT Is DONE.
At u clock on each day twelve very
Wide-awake young men seat themselves
around large table in room in the Scott
Auefbach building. They are all picked
men, selected for their accuracy in COM
putation and general business reliability.
As each enters, he losses to each of the
others the bundle of checks which his
bank has received that are drawn on other
banks. Thus, when all are assembled,
each messenger has before him all the
checks that his bank is required to set
tie.
Every bank is numbered, and no names
are used in any of the clearing house
transactions until the final settlement is
made. Each messenger is provided with
blank slip with two ruled columns, one
for the entry OF the credits, or the amount
of checks that he holds against the other
banks, and the other column for the deD-
its or the amount OF checks brought in
against his bank.
Promptly at 1918 Manager Hawley calls
the messengers to order and the work
begins. The credit column on the slips
has already been filed at tie banks and
the messengers proceed to fill up the debit
column from the checks that have been
placed before them. As each slip is bal
anced it is handed to the manager who
SultfS DIle dEiOuuOS III d OOOA p1ON4OSQ
for that purpose.
When all the slips have been balanced
each messenger calls out the amount of
his debit or credit balance, and then the
manager proves the correctness of their
work. If he finds that the amount of the
checks HANDED in by each bank equals the
amount of those taken away, and the sum
total of the credit balances equals the
total of the debit balances the computa-
lions of the messengers are correct, and
nothing remains 10 be done but to settle
with those banks that have sent in more
checks than have been presented against
them.
METHOD OF SETTLEMENT.
This settlement is the simplest of the
whole proceedings. In few of the larger
cities the debit balances are paid into and
the credit balances out Of the clearing
house fund by the banks, but the Salt
Lake association does not handle q single
dollar. Certain of the banks have pre-
scented in the days settlementm more checks
than have been presented against
them; the clearing house owes
them the amount of their credit balance.
The other banks have more claims to set
tie than they have presented; they owe to
the clearing house the amount of their
debit balances. AS a matter of course.
the amount TO be paid in Will just equal
the amount to be paid out, and Manager
HaWley simply draws clearing house GER
tificates in favor of the credit banks and
against the debit banks. Thus, if the