466 



THE CENTURY BOOK OF FACTS. 



an institution founded not merely upon the 

 idea of saving time and trouble in the use of 

 the precious metals, but also of circulating 

 notes. The Clearing House of London, which 

 was the first of the kind, originated among the 

 bankers of that city, whose transactions in the 

 checks, bills, and drafts drawn upon each 

 other became so large as to call for the daily, 

 and even hourly, use of vast sums in bank- 

 notes by all of them. Appreciating how readily 

 the debts and credits respectively due or held 

 by them might be set off, one against the other, 

 they formed the clearing house, where, up to j 

 four o'clock each day, all drafts, bills, etc., j 

 upon each individual member were taken. 

 This system of the London Clearing House 

 has, however, been much extended and im- 

 proved. Clearing houses exist in New York, 

 Philadelphia, Boston, Chicago, and other cities 

 in the United States. A description of the 

 system in use in Philadelphia will, in the main, 

 answer for all. The clearings are made each 

 morning at 8.30, just before which hour a 

 messenger and a clerk from each bank are at 

 the clearing house. The clerks take their seats 

 at a series of desks arranged in the form of a 

 half oval. The messenger brings with him 

 from his bank a sealed package for each other 

 bank, containing all checks or drafts on such 

 banks. The name of the bank sending, and 

 that of the bank to which it is sent, is printed 

 on each package, and the amount sent is writ- 

 ten thereon. The messengers take their places 

 near the desks of their respective banks, and 

 they have with them tabular statements of the 

 amount sent to each bank, and the aggregate. 

 These are exhibited to the respective clerks 

 and noted by them on the blank forms. At 

 8.30 o'clock precisely, the manager calls to 

 order and gives the word, when all the messen- 

 gers move forward from left to right of the 

 clerks, handing in. to those clerks the packages 

 addressed to their respective banks, and tak- 

 ing receipts for them on their statements. 

 The several clerks then pass around a memo- 

 randum of the debts, credits, and balances, 

 each of his respective bank. When these 

 memoranda have made the circuit, each clerk 

 has on his statement the debts, credits, and 

 balances, whether debtor or creditor, of each 

 bank. If these debits and credits, or debtor 

 or creditor balances, are found to balance, the 

 clerks now leave the clearing house. If not, they 

 remain until the error or errors are discovered. 

 The balances due by the several banks are paid 

 into the clearing house that day by 11.30 

 o'clock A. M., and are receivable by the cred- 

 itor bank by 12.30 P. M. Each bank is 

 obliged daily to furnish to the clearing house 

 a statement of its condition at the end of the 



business on that day, and tables are daily fur- 

 nished to the. several banks of all the banks in 

 the clearing house. 



Freedman's Bank was established in 

 March, 1865, as a charitable enterprise, to 

 encourage frugality and thrift among the 

 newly-liberated slaves. The institution was 

 started at first in Washington, but afterward 

 branch banks to the number of thirty-four 

 were located in different parts of the Union. 

 The bank was not intended to be a money-mak- 

 ing concern, either for bankers or for deposi- 

 tors, but as a place of deposit for the savings 

 of negroes, which savings were to be invested 

 in the stocks, bonds, Treasury notes, and other 

 securities of the United States. During the 

 existence of the bank, nine years, it handled 

 no less than $56, 000, 000 of deposits, the ne- 

 groes being led to believe that the safety of the 

 institution was guaranteed by the Government, 

 which was untrue. The institution was man- 

 aged by a number of trustees of unsavory finan- 

 cial reputation, and, as a consequence, at the 

 expiration of nine years it suspended payment. 

 At the investigation which was made by a com- 

 mittee appointed by Congress a most scandal- 

 ous condition of affairs was discovered. The 

 regulations of the charter had been completely 

 ignored, and the funds had been dissipated by 

 loans made upon inadequate securities. By 

 law the investments of the bank were confined 

 to Government securities alone. Unimproved 

 real estate, unsalable stocks and personal notes, 

 were among the assets of the bank. Deficits 

 and embezzlements at the branch banks also 

 produced many losses. The unsecured debts 

 owed to the depositors amounted to $2,900,000, 

 and the assets yielded about $1,700,000. For 

 some years three bank commissioners were 

 employed, at a salary of $3,000 each, to wind 

 up the affairs of the institution. After $475,- 

 000 had been expended in this " winding-up" 

 process the affairs of the bank were all turned 

 over to the Comptroller of the Currency. Div- 

 idends have been paid at various times: but 

 many small depositors, through ignorance and 

 despair, forfeited their dividends by not calling 

 for them. In all, 77,000 dividends, amount- 

 ing to $112,000, were thus forfeited. 



Revenues of the Government, year 

 ending June 30, 1898: 



From internal revenue, 



From customs, 



From profits on coinage, bullion de- 

 posits, etc., 



From District of Columbia, 



From fees consular, letters patent, and 

 land, 



From tax on national banks, 



From sales of public lands, 



From navy pension and navy hospital 

 funds, 



From miscellaneous. 



From sinking fund for Pacific railways, 



8170,900.041.49 

 149.575.062.35 



4,75ti.4r,!>.71 

 3,693.L'X2.ns 



2,639.7.">0.54 



1,243,129.42 



1.146,590.41 



1.007.H52.96 



781,986.83 



