In large cities checks representing millions of dollars are deposited in the banks every day. The separate collection of these would be almost impossible, were it not for the clearing-house system.

Each large city has its clearing-house. It is an establishment formed by the banks themselves, and for their own convenience. The leading banks of a city connect themselves with the clearing-house of that city, and through other banks with the clearing-houses of other cities, particularly New York. Country banks connect themselves with one or more clearing-houses through city banks which do their business for them. The New York banks, largely through private bankers, branches of foreign banking houses, connect themselves with London. So that each bank in the world is connected indirectly with every other bank in the world, and in London is the final clearing-house of the world. The daily clearings in New York in 1909 averaged $326,505,468 (for 51 banks) and the average daily balances paid in money amounted to $13,797,644.

Usually once a week the banks of a city make to their clearing-house a report based on daily balances, of their condition.