Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1908-04-14
THE CLEARING HOUSE.
Its Genesis and Manner of Settling
Balances Among Banks.

Its Genesis and Manner of Settling
Balances Among Banks.
In its primary and simplest form, the
form in which the fathers of the clear
ing house system knew 1t, clearing
house Is merely a centrally located
place where checks, drafts, bills, notes,
or other kinds of credit instruments
coming into the possession Of the
banks are brought to be exchanged for
their equivalent in other similar credit
instruments or for cash. Just as In
the old original Exchange" where
merchants met to buy and sell COM
modities, so do the banks through
clerks meet the exchange checks or
money for other checks or obligations
they owe or owed. To illustrate we
must compare the old system Of ex-
changing claims against the respective
banks with that now in vogue in nearly
all the cities of the world having any
pretension to financial Importance.
Under the old system porter chosen
for his strength perhaps as much as
for his known honesty took all the
checks upon other banks that came
into his own banks possession and went
the rounds from bank to bank collect
ing his claims in the form OF cash,
whether bank bills or gold The result
was the carrying Of large sums or
money through the streets, with the
consequent danger Of loss by robbery
or carelessness. AS the banks increas-
ed in number an informal meeting Of
the pOrters at one central point to eX-
change checks for cash was a natural
evolution. This, however, was cum
bersome and oftentimes unsatisfactory
because of the lack Of knowledge in
advance Of the claim that would be
presented and of the sums necessary
to meet them. Finally the banks took
cogniZance of the necessities Of the
case and arranged for a CEN
tral place Of exchange, with
manager and clerks to supervise and
conduct the exchanges. This was the
genesis of the clearing house as 1t eX-
lists today and it may be said also that
a great many clearing houses are today
merely places of exchange for items
held by banks against other banks.
AS to the present method Of clearing
at, say. any Of the larger clearing
houses, the system in vogue at the New
York Clearing House may be cited as
exemplifying the modern plan OF ac-
ton. Two clerks come from each bank
that is a member of the clearing house
each business day at $50. Exchanges
are made at 10 a. m. Each bank has
a desk assigned it, behind which sits
one of the clerks, prepared to receive
checks or other claims against his
bank. The other or delivery clerk, has
a bag filled with checks against other
banks At the stroke of bell the line
of delivery clerks moves slowly down
and around the room, stopping at each
other bank desk in turn, laying down
the respective bundle of checks, get
ting receipts therefor and passing OH
until they have made the round Of all
the bank desks and return to their own
desks. When the delivery clerk re-
turns to his own desk he finds it piled
high with checks left by other delivery
clerks. After comparing the totals Of
these checks with his fellow clerks list
he takes them to his bank. The clerk
remaining adds his totals of checks re-
ceived from other banks and compares
it with his original list of checks
against other banks which he made up
before he left his own bank. The diff
ference between his two totals Of checks
for and against his own bank Is the
amount Of balance his bank owes or
is owed If his bank owes more than
he receives from the other banks he
fills out debit slip and hands it to the
manager If the total he receives Is
less than what he has brought from his
bank he fills out a credit slip