The employment on a large scale of this extremely useful device for the transaction of domestic exchanges belongs to very recent times. The oldest clearing-house in existence is doubtless that of the city of London, which was founded in the year 1775. The New York clearing-house, the next oldest, dates back to 1853. Most of the others are of very much later, indeed of comparatively recent, origin. The clearing system may, therefore, be said to be in its infancy, and an extensive development along this line is quite certain to characterize the immediate future. It is most widely extended and perfected in the United States. At the present time there are more than one hundred clearing-houses in this country, with a total membership of considerably more than one thousand banking institutions. The centre of the system is in New York City. Nearly every bank in the country has a correspondent there, and, on account of its great commercial importance and the peculiarities of our national banking system, a large proportion of the financial transactions of the country there take place, the amount of paper which passes through the New York clearing-house annually constituting more than one-half of the total clearings of the entire United States for the same period. The extensive use of the system here is explained in part by the high development of the business of deposit banking in this country and by the fact that we lack a centralized banking system like that of England, France, or Germany. Most of our banking institutions being local and independent in character, some means of associating them becomes necessary, and the clearinghouse has proved useful to that end.

The clearing system in the United States has developed certain peculiarities which deserve mention, and which are doubtless explained in part by the facts already described. The clearing-houses are supported and established by voluntary associations of bankers, and, owing chiefly to the absence of a dominant institution, they are employed for various other purposes besides that of making exchanges, for any purpose indeed for which community of action on the part of the banks in question is desired. Among the special services which they have rendered may be mentioned the granting of loans to the United States government on one or two important occasions, the introduction of uniformity in rates of interest on deposits, in rates of exchange, and in charges on collections, and the issuing of clearinghouse loan certificates. By their power to expel unworthy members from the association and to refuse to do business with banks that persist in faulty or dangerous practices they have also exercised an elevating and controlling influence over the entire banking system of the country.

In England the bankers' clearing-house of the city of London constitutes the centre of the clearing system of the British Isles. Practically every bank in England, Scotland, and Wales has a London correspondent through which, directly or indirectly, its paper reaches the clearing-house. The statistics of that institution are, therefore, indicative of the magnitude and fluctuations of the business of the whole country. There are local clearing-houses in the most important cities of the kingdom, but the number is not so great in comparison with the population as in the United States.

In continental Europe the system is being quite rapidly extended at the present time, but is of comparatively recent origin. It was not until the year 1884 that any considerable number of clearing-houses were established in the German Empire, the Imperial Bank, through its various branches, being in a position to economically! conduct over its own counters a large proportion of the exchanges of the empire. Since 1884, however, it has been extended to include the most important banks. In Austria-Hungary the system dates back to 1872, but has only extended itself widely during the last decade. The centre of the system is in the city of Vienna, and the leading role is played by the Austro-Hungarian bank. In France the system has not been extended outside of the city of Paris, which has had its clearing-house since 1872. The Bank of France with its numerous branches plays the same important role in that country as does the Imperial Bank of Germany within the territory of the German Empire. In Italy and the various other European countries, in Canada, Australia, the various other British colonies, and Japan the system has been introduced, and is being rapidly extended.