England has three bank clearing-houses and France one. The clearing principle is used in England to adjust the complicated accounts of the through traffic of connecting railroads, and to simplify the fortnightly-deliveries of stock on the London Stock Exchange. Every clearing-house bank in London, and the clearinghouse itself, keep accounts with the Bank of England, and differences are settled by transfers from one account to another.

London originated the clearing-house. It was formed spontaneously by the clerks of the London private bankers, who, to save themselves the trouble of going about to each bank, got into the habit of meeting in a central room to settle their mutual claims. A similar practice arose among French merchants, in old times, of making their bills payable at the great annual fair in Lyons, where they met to balance their debts, and pay the differences.

If gold were to be used instead of the clearing-house machinery in either New York or London, the weight to be moved every day over long distances would exceed 200 tons. The clearing-house establishes a fellowship among banks that has already proved in times of money panics of the greatest service to themselves and the community.

Deposit Slip.

Deposit Slip.