"Returns" are any articles "which may be returned into the clearing unpaid, from want of funds, irregularity of endorsement, no advice, or from any other cause.
It will also be well to give a short account of the various books employed by every banker which bear in any way upon the work of the Clearing-House. But it will of course be understood that although every banker has books which serve the same purpose as those about to be enumerated, it does not follow that the following is an exact description either of the titles of the books or of the system of book-keeping adopted by every banker. Generally speaking, however, the following books, or others somewhat similar, are in common use.
Secondly, there are the Lists, which, among other items, contain clearing cheques and other articles brought in by the walk-clerks from their various rounds.
Then there are the Received-Waste-Books in which are entered the particulars of the credits paid in by customers to the cashiers.
These three books bear indirectly upon the clearing. The bills specified in the first-mentioned book domiciled at clearing banker's are handed over by the bill department to the clearing clerks, and are entered by them in what is called the Morning Bill Book. The cheques, etc, mentioned in the Lists and Waste Books are gathered from the walk and cashiers' departments from time to time during the day by the clearing clerks, and are entered by them at once into their Out-Clearing Book.
The other books which bear upon the clearing in addition to the Morning Bill Book, and the Out-Clearing Book, already mentioned, are the-
The Out Returns,
The In Returns,
The Clearing Balance Book,
The Clearing Difference Book, etc. As the uses of these books are obvious, we shall not stay to describe them, but shall proceed to give a description of the manner in which the clearing is conducted.
It will be seen from the foregoing Rules that there are three clearings during the day-
1st. The Morning Town Clearing,
2nd. The Noon Country Clearing,
3rd. The Afternoon Town Clearing. For the sake of clearness we shall deal with the town clearings first, and afterwards with the country clearing. The morning town clearing opens on ordinary days at 10.30 a.m., when the respective banks deliver to each other charges made up only, as a rule, of bills and marked cheques. These bills are bills which have been discounted by the bank, or held for collection on account of customers. During the afternoon of the day before they fall due, they are passed from the bill department into the clearing department, so as to let the clearing clerks get an early start next morning. On the morning of the day on which they mature, the clearing clerks sort them into various batches, according to where they are domiciled. They sort all those due at the London and Westminster Bank, the National Provincial Bank, Barclay's, Smith Payne's, etc, etc, together, and then proceed to enter the amounts only in the spaces left under the respective headings of the other twenty-six clearing banks in the Morning Bill Book. This book they then sum up, and check the aggregate of the twenty-six totals with the sum supplied to them on a memorandum by the bill department of the bank. If right, their clearing work is checked so far, and they then transfer the various totals into the Out-Clearing Book. Having done this, they then proceed to deal with the "marked cheques." These are cheques which have been paid in by customers on the afternoon of the day before, too late for that day's clearing. Each bank every afternoon sends these cheques out to the other banks upon which they are drawn to get marked for payment. This marking consists of the initials of one of the cashiers being put upon the cheques, which is tantamount to an acknowledgment that they are all right and that they will be duly paid in the clearing next morning. The banks send out these cheques to be marked chiefly for the convenience of their customers, but partly for their own protection in case a cashier might pay against an uncleared cheque which might afterwards prove to be bad. If a banker chose not to send out such cheques for marking, no question could be raised by his customer as to want of due presentation, because it is distinctly stated on the pay-in slips with which each customer is supplied,-or the customer is acquainted in some other form,-that cheques not paid in by half-past three may not be cleared the same day. As has already been said, these marked cheques are sent into the clearing the first thing in the morning along with the bills, and the two together form what is termed the "first charge." Some banks try, and some manage to get, the remittances received in their morning letters into their first charge; but as the morning clearing closes for delivery at eleven o'clock, it is plain that none but those bankers who begin business very early can put through so large an amount of work with any degree of satisfaction in time for the morning clearing.
The afternoon town clearing begins at half-past two and closes at four. But the Clearing-House clock is always kept five minutes behind Greenwich time, so that the representatives of the various banks have always five minutes' grace allowed them.
To the afternoon clearing the banks, as a rule, send in some six or seven "charges" But, of course, in exceptional times, such as during the progress of the payment of railway dividends, or any other kind of dividends, or from any other circumstance which makes business particularly brisk, many more charges are sent in. But in ordinary times some half-dozen is the usual number. At the opening of the afternoon clearing, at half-past two, the first charge delivered is usually composed of the remittances received in the morning letters. Then about three o'clock the second charge is sent in, and is composed of the cheques, etc., received over the counter during the morning by the cashiers, for the credit of customers. Then about every twenty minutes or so, from three o'clock till four, charges of the same description are sent in. And two or three minutes past four (by the bank clock) a final charge, consisting of a few articles of large amount, or articles which for some reason the banker may be particularly anxious to clear, may be sent in.