ru-:.\ui\<;-in>i si; 



285 



the various banking-houses, l>egan to inter- 

 <li.ni-'- tin' ,1'M-iiinents of iniitiiul imlehtedneas in 

 the street, and sulmemiently at taverns or an\ 

 banking office where they were tolerated. Some 

 lime previous to 1773 a special apartment was 

 devoted by the bankers to the purpose; and in 

 1810 the building in Lombard Street, since known 

 a-* tin- 'Clearing-home,' was set apart for the 

 < IIM ring, under the direction of a committee of 

 bankers, and tin 1 immediate management of two 

 inspectors. The joint stock banks were not 

 admitted to the Hearing-house until 18f>4. Four 

 years later the country-cheque clearing was estab- 

 lished as a department of the clearing-house. In 

 1864 the Hank of England entered, but it clears 

 only tiffiiiimt the other banks. Only twenty-seven 

 banks, including the Southwark branch of the 

 London and Westminster Bank, are members. 

 Other London bankers arrange with clearing banks 

 to represent them. 



The system pursued is as follows : From time to 

 time during the day, each firm transmits to the 

 clearing-house cheques and bills payable by othc p 

 bankers, classified according to the banks retiring 

 them, account being also taken of obligations' 

 coming against their firm. At a certain hour the 

 doors are closed, and the balances struck. Time is 

 allowed for each bank to decide as to honouring 

 the drafts upon it, after which the final adjustment 

 of balances takes place. Subjoined is an actual 

 balance sheet as at the close of a day's clearing. 



Debtors. 



. d. 



2,510 8 6 



12,950 13 2 



3 2 



3,394 8 1 

 61 17 11 



5,136 2 



32,885 19 

 10 

 6 5 



85,444 

 10 



119,772 



26.492 



1,938 



6,494 



651 



4,775 



27 



13,263 



21,246 



8,765 



08,860 



18 8 

 2 9 

 2 4 

 2 2 

 



3 



1 2 



9 



13 11 

 19 8 



14 2 



6 3 



7 

 83,605 18 8 



OLYN & CO. 



Alliance 



Barclay 



Bank of England 



Brown 



Capital and Counties 



Central 



City 



Consolidated 



County 



Dimsdale 



Fuller 



Imperial 



London Joint-stock 



London and Westminster 



Lloyd's 



I.' in, l,,n and South-western 



Martin 



Metropolitan 



National 



National Provincial 



Prescott 



Robarta 



Southwark 



Smith 



Union 



Williams 



Country Clearing 



C.H. 



Creditors. 

 . d. 



254,132 12 6 



4,992 19 11 

 7,904 18 10 



72,068 1 6 



128,138 6 3 



3,644 4 1 



1,956 13 11 



893,158 6 2 



6,311 10 4 Returns 



"399,469 15 6 

 252,355 3 11 Balance 



651,8-24 19 6 



72,668 1 



70,547 16 2 

 30,327 13 10 



646,381 7 1 

 5,443 12 4 



651,824 19 6 



The figures in either column are the sums due to or 

 by Glyn & Co. in account with each of the other 

 members of the clearing-house, after allowing for 

 their mutual indebtedness ; the differences as they 

 occurred that day being also shown interlined ; 

 as well as the total amount of vouchers returned 

 unpaid. The result was that after placing all 

 their claims on the other banks against the 

 claims of the latter on them, there remained a 

 sum of 252,355, as. lid. due by Glyn & Co. 

 on the general balance. This was more than 

 accounted for by the claims of the Bank of 

 England, who only clear on one side. Each 

 bank makes up a similar form. The inspectors 

 having satisfied themselves that the general 

 balance is correct ( all the members having agreed 



between themselves, and the total debtor talances 

 equalling the creditor), warrant** for nettling the 

 balances by transfer at the Bank of England, 

 certified by the inspector*, are pawed between the 

 members. Formerly these llance* were settled 

 in cash. Thus, transactions to the amount of 

 several millions daily are settled without the use of 

 a bank-note or coin. The importance of the system 

 is illustrated by the fact, stated in evidence before 

 the House of Commons, that the London and 

 Westminster Bank, by getting admission to the 

 clearing-house, were enabled to reduce their cash- 

 balance by 150,000. 



The record of the total amount of bills, cheques, 

 ami drafts passing through the clearing-house is 

 regarded as an index of the state of trade ; and as 

 London is the chief centre of trade for the world, 

 this record has a world-wide range. The sums 

 passed through the clearing-house are greatest on 

 certain 'special days.' These are (1) the 4ths 

 of the month, trade bills being mostly dated on the 

 first of the month, and, with three days' grace, 

 falling due on the 4th of some succeeding 

 month; (2) consols settling days, once a month; 

 ( 3 ) Stock Exchange settling days, twice a month. 

 The following figures, commencing with the earli- 

 est record, show the magnitude and growth of 

 the clearing-house work: (1839) 954,401,600; 

 (1868) 3,425,185,000; (1873) 6,070,948,000; 

 (1878) 4,992,398,000; (1883) 5,929,404,000; 

 (1887) 6,077,097,000; (1890) 7,801,048,000; 

 (1893) 6,478,013,000. In most of the large towns 

 in England there is now a clearing-house, and in 

 Scotland. the system, including the separately con- 

 ducted note-exchanges, has been thoroughly organ- 

 ised, so that clearings take place all over the 

 country, balances being settled in Edinburgh. 



The first clearing-house in America was started 

 in New York on llth October 1853, and the system 

 has since assumed enormous proportions through- 

 out the United States ; in 1888 there were upwards 

 of 30 clearing-houses. The progress of the New 

 York clearing-house will be seen from the follow- 

 ing figures for the years ending 30th Septemler 

 (1854) 1,150,091,197; (1868) 5,696,857,727; 

 (1873) 7,092,210,565; (1878) 4,501,687,688; 

 (1883) 8,058,633,051 ; (1891) 8,513,600,000. 



The system has more recently spread to the con- 

 tinent of Europe. La Chambre de Compensation 

 des Banqiiiers de Paris was formed March 1872, 

 the clearing-house of Berlin in 1883, and that of 

 Vienna in 1864 ; but their transactions are greatly 

 less than those of London and New York. While 

 it was in connection with banking that the clear- 

 ing-house system originated, the principle (in 

 modified forms ) has been adopted bv other depart- 

 ments of business. The London Railway Clearing- 

 house was founded in 1842, the Stock Exchange 

 Clearing-house in 1874, and others more recently. 

 See Howarth, Onr Clearing System ( 1886) ; Fram-oi>, 

 Clearing House et Chambres de Compensation ( Lille, 

 1887); The New York Clearing House, its Methods 

 <niil Systems (New York, 1888). 



THE RAILWAY CLEARING-HOUSE is an asso- 

 ciation instituted to enable railway companies in 

 Great Britain to carry on, without interruption, 

 the through traffic in passengers, animals, minerals, 

 and goods passing over different companies' lines of 

 railways, and to afford to the traffic the same facili- 

 ties as if the different lines had belonged to one 

 eonipany. The arrangements are conducted in 

 London by a committee, the members of which 

 are appointed by the directors of the companies 

 who are parties to it ; and the association is regu- 

 lated by the Railway Clearing Act, 1850. The 

 companies are each represented on the committee 

 by a delegate. The committee holds stated meet- 

 ings four times a year, and oftener if necessary. 



