sent down to agree the various claims. This is done by correcting errors in casting, and marking out any differences in the items. These latter are altered by the "out" clearing bank to accord with the books of the "in" clearing bank, subject, of course, to production of the drafts, and revision of disputed items. Comparison of the charges is facilitated by the coincidence of the intermediate totals, which is secured by reversing the last cheque in each casting. The amount of the casting is frequently placed on such cheques, but it is not generally found practicable to agree the amounts during the progress of the work. When the totals have been agreed, the balance between "out" and "in" amounts is struck by each bank with every other one, and the last returns are charged and allowed on either side. All these balances in turn form the items of a general balance-sheet prepared by the head clearer of each bank, which shows at the foot a final balance to pay or receive. This is settled with the Clearing House by means of a ticket addressed to the Bank of England, and signed by the respective banker, directing the transfer of the requisite sum to or from the Clearing House account, and from or to that of the bank in question. It is obvious that, if these settlements have all been correctly made, the transfers from the accounts of such bankers as have to pay will exactly balance those to the accounts of the remainder. As a matter of fact, it will be readily understood that this ultimate agreement is not arrived at quite so easily, although there have been days, when, even with exceptionally heavy clearings, the House has "tried right." When it is remembered that the House settlement includes the variations in, and agreement between, twenty-seven town balance-sheets, and the same number for the country clearing; and that the total entries on each side of these sheets will probably number at least three thousand, besides returned articles numbering sometimes a thousand more, it will be seen that to reconcile these entries must often be a work of extreme difficulty. This labour is performed by the Inspectors of the House, and any errors detected by them are settled subsequently by charging or crediting the respective banks. For this purpose a line is provided in the general balance-sheet of each bank. Errors of £1,000 and upwards are settled the same evening by supplementary transfer, blank tickets being left with the Inspectors for the purpose. The Country Clearing opens at noon, and is, in the features apparent at the House, very similar to the proceedings during the remainder of the day. All cheques are delivered between twelve o'clock and half-past; they are taken down in the "in" clearing books immediately, and up to 2.15 p.m., at which time the House closes. At the same time the settlement for cheques delivered and received two days previous is completed by the payment of balances between "out" and "in" charges, less amount of returned cheques on either side. Of these the greater part are not received in London at all, but are returned direct to the presenting bankers, as denoted by their crossing stamps. The banker so returning an unpaid cheque, advises his London Agent of the fact, quoting the amount, with name, and town, of banker to whom it has been returned. The amount is then charged and allowed between the respective London Agents upon delivery of a ticket giving particulars of the return, which, again, forms a voucher whereupon to charge the country banker. As the London Agents have themselves no knowledge of the cheques that have been refused, all such claims are settled subject to repayment if subsequently found to be in error. A balance-sheet is made out by each bank; but the general balance resulting is not settled with the Clearing House, being carried forward as an item in the balance-sheet of the town clearing. It will be readily seen from the foregoing sketch, that, although the Clearing House is the centre and focus of the country cheque clearing, the work actually performed there forms by no means the greater or more important part of the labour involved in the system. Before the clearing opens, the whole mass of cheques have to be collated with the bankers' remittance lists, assorted according to the respective London agents, and made up in "out" charges. After the House closes, these labours are surpassed by those requisite for distributing the "in" charges between all the separate banks or branches; recording items and totals to their debit; and listing and despatching the cheques by post. We might trace the system further back, and point out that, for country bankers, the clearing really commences with the despatch of their remittances on the day previous to their reception in London, and closes on the third day with the receipt of unpaid cheques. Indeed, it might be more strictly said that the London bankers are not principal parties in the country clearing, except on the "out" side in respect of the cheques collected on account of their own customers. The clearing cheques sent by country bankers are remitted for a special purpose, and the London agents have not, with respect to them, the ordinary liability of bankers receiving cheques for collection. They are responsible only for their safe delivery into the channel selected by the country bankers. On the "in" side they are not principals at all. They receive the cheques by mutual request of holders and drawees, and incur no liability in respect of them, beyond that of their due despatch, and payment of their amount upon advice, and if in receipt of funds. In order to render the preceding description more readily intelligible, I append a time table of the clearings, the general rules of the house, and of the country clearing, and copies of some of the forms in use. Morning Clearing. Country Clearing. Afternoon Clearing. Clearing Last Clearing Clearing Last Clearing Clearing Last Last The total amount of the Morning and Country Delivery shall be agreed by each Clearer before leaving the Clearing House. All Clerks that are in the Clearing House by the time appointed for final delivery, shall be entitled to deliver their articles, though they may not have been able to pass them to the different desks before the clock strikes. All Returns in the course of delivery upon the stroke of the clock of the time appointed for final delivery, must be received by the Clearers, and credited the same day. Any Bank which has accepted and paid an article returned to it in error, may require repayment through the Clearing House on the following day. Notice shall be entered upon a Board at the Clearing House giving monthly statements of those settling days at the Stock Exchange, upon which the time for receiving Returns is to be 5.15. With regard to all Drafts not crossed, and all Bills not receipted, sent to the Clearing House as Returns, the Clearer holding them must fully announce the particulars to the Clearing House, and if not claimed, the case must be represented to the Inspectors; but on no account can the Clearer be allowed to debit the Clearing House with the amount until an owner can be found. No Return can be received without an answer in writing on the Return why payment is refused. It shall be sufficient in order that a Return shall be received and credited, that it shall have on it an answer, why returned; and no Clearer shall refuse to pass to credit any Return that shall be so marked. All Returns charged upon the Balance Sheet must be marked up and agreed by the Clearer charging the same. All the differences arising from Marked Articles beyond the sum of £50 must be finally ascertained and placed to account, before the Clearer makes up his Balance Sheet. No Clearer shall be allowed to charge out Drafts in the Clearingout Book at the Clearing House. All differences of more than £1,000 that may have been accidentally passed over at night, shall be settled by a transfer at the Bank of England, the first thing the next morning. The Inspectors are charged with the preservation of order and decorum in the Clearing House, and are instructed to report to the Committee of Bankers disorderly conduct on the part of any persons, calculated, in their opinion, to obstruct the adjustment of the business of the House. Rules for the Conduct of a Clearing of Country Cheques in London. 1. A clearing to be held in the middle of each day for the interchange, among the London bankers, of cheques on their correspondents in the country, placed in their hands for collection. 2. Each London banker to remit for collection to his country correspondents the cheques drawn upon them, saying, "Please say if we may debit you £ for cheques enclosed." 3. Country bankers wishing to avail themselves of this clearing to remit their country cheques to their own London agent, to stamp across them their own name and address, and that of their London agent. 4. Any country bank not intending to pay a cheque sent to it for collection, to return it direct to the country bank, if any, whose name and address is stamped across it. 5. Each country banker to write by return of post to its London agent in reply, "We credit you £ to us for collection in yours of for cheques forwarded Adding, in case of non payment of any such cheques "having deducted £ cheque returned to Messrs. returned to Messrs. at at and £ for |