This section is from the "Practical Banking" book, by Albert S. Bolles.
This is passed to the manager's desk. The amount brought has been already, as before stated, entered in the credit column of the Clearing-house proof. The amount received is now entered in the debit column, and the balance in the column "Due Banks" against the name of the Fourth National Bank. The next bank may have a balance against it, which should be entered in the left-hand column under the heading "Due Clearing-house." When all the balance tickets have been delivered at the manager's desk, and the entries from them made in the proof, the debit and balance columns are footed, the credit column having been already added. As the total amount brought must be the same as the total taken away, the debit and credit columns of the proof will agree if the work is correct, as also the totals "Due Clearing-house" and "Due Banks." If the footings show this agreement, the proof is mader and the settling clerks are allowed to leave. It is a very rare occurrence that the footings agree on the first trial. An inspection of the Clearing-house proof will show that it contains about thirteen hundred figures. Each entry in the proof may represent the result of sixty-three entries in the settling clerk's statement, and these probably contain from 60,000 to 70,000 figures, made and footed with great rapidity, the entries being frequently made with, pencil. The credit column of the settling clerk's statement, too, must be made up and footed within the short time allowed at the Clearing-house. Under these circumstances it is natural that mistakes should frequently occur, any one of which destroys the exact balance which should exist between the debit and credit sides of the proof. When the proof is footed, and the footings fail to agree, the manager or his assistant announces the fact: "The difference is $5,530.25," or whatever the amount may be. While the preparation of the proof has been in progress the clerks have been at work verifying their figures by means of the check tickets and otherwise, and the error or errors may have been discovered as soon as the discrepancy is announced. Usually all errors are discovered and corrected within an hour from the announcement of the clearing, but sometimes an error occurs which defies detection for a long time, and keeps the whole force of clerks at work for two hours or more. Forty-five minutes are allowed for the completion of the settlement. Any delay beyond this subjects the delinquent bank to a fine. At 11.15 a. M. the fines are doubled, and at 12 M. quadrupled, so that the fines accumulate rapidly on the delinquent bank after 11.15. The object is to offer an incentive to the banks to have at the Clearing-house clerks whose figures are distinct and legible, and who are rapid and accurate calculators. If the examination of the check tickets fails to disclose the error or errors, the settling clerks are ordered by turns to pass around to the different desks, each calling off the amount of his exchange to every other. This is usually the final method of revision, and seldom fails to disclose the error. The Settling Sheets are sometimes exchanged to facilitate the detection of errors in the footings.. The corrections as fast as made are incorporated with the proof, and the figures appended to the footings, added or subtracted, as the case may be, preserve a permanent record of each correction. Finally, the manager, or his assistant, calls off from a balance sheet corresponding to the two main columns of the proof, the amount in thousands of dollars to the debit or credit of each bank in the exchanges of the day, also the time at which the proof was announced, and the fines and corrections, which the settling clerks transfer to corresponding blanks in their possession. These they take away for the information of their respective banks, which thus have a record of the Clearing-house dealings of all their associates.
The table on the next page is a specimen "Clearing-house Proof." The totals show the actual transactions on the day named, but the figures are transposed so that they do not show the actual transactions of any single bank, these not being published. Consequently, some of the banks appear as having much larger, and others as having much smaller transactions than they actually had.
It is the custom at some Clearing-houses to add together both the debtor and creditor sides of the proof, thus duplicating their figures, but the footing of one side evidently represents the total amount of the vouchers exchanged. The highest bank number represented below being eighty-two, the natural inference would be that this was the number of members in the Clearing-house. An inspection of the proof will, however, show that there are eighteen missing numbers, leaving but sixty-four members at the date given. The missing numbers represent banks which were once members, but are so no longer, most if not all of them having failed or discontinued business. The number eighty-two represents the total number of members that have ever belonged to the Clearing-house. The failure of the Marine National Bank makes another missing number, leaving only sixty-three members, of which sixty-two are National or State banks, and one the United States Assistant Treasurer at New York, who joined the Clearing-house in 1878. The Assistant Treasurer is almost uniformly debtor to the Clearing-house, and rarely receives a balance from the associated banks.
New York Clearing-house Proof, Thursday, January 17TH, 1884,