It will, of course, be understood that the operations above described of one clearing bank is illustrative of the operations of all the clearing banks, and that while there has been a clerk running between each bank and the
Clearing-House, from time to time, delivering the charges he has upon the other banks, there has also been a clerk representing the same bank all the time in the Clearing-House, receiving and entering up all the charges which all the other banks had against him.
It will also be understood that the Out-Clearing Book (which is written up inside the bank and is carried to the Clearing-House at four o'clock for the purpose of checking) of the delivering banker, is a counterpart of the In-Clearing Book of the receiving banker. Thus the two books of the two banks check each other and render the discovery of errors very easy. Here again one case illustrates the whole. What is done between two banks is done with each other between the whole twenty-seven.
The first charge sent into the Clearing-House during the day is marked on the back of the last cheque thereof, with the total amount, so that the receiving clerk when he has entered it in his In-Clearing Book may add it up and agree it with the amount marked, thereby keeping his work well checked up, and so rendering the final adjustment of the balances very simple.
Country notes are not paid at the Clearing-House, but are taken round to the bankers who are agents for the country bankers, and exchanged for tickets which are passed through the afternoon clearing.
We have described the process by which cheques are paid into the clearing, and have already explained that the Out-Clearing Book of one banker is a counterpart of the In-Clearing Book of the other. And in a sentence we may say that as soon as the receiving banker's representative in the Clearing-House enters the cheques upon him in his In-Clearing Book, he sends them immediately away to his own bank, where they are critically examined, and, if correct, posted in the ledgers. Should there be anything wrong with any of them, should there be insufficient funds, or should the endorsement be irregular, or should they be irregular in any way, they are sent back to the clearing and returned to the delivering banker with a distinct answer marked upon each cheque of the cause of return. These returns must be sent back to the Clearing-House not later than five o'clock, and are debited on the balance sheet in the final balancing for the day.
It will be understood that the clearing clerks do not wait for the returns before they begin the balancing for the day. The moment the Clearing-House clock strikes four (five minutes past by Greenwich time) they begin the process of balancing, leaving the returns, if any ,to be debited afterwards.
Notwithstanding the immense amount of work which is put through the Clearing-House daily, the aptitude of the clerks for their particular work renders errors of infrequent occurrence. The system also of marking the amount of the first and largest charge on the back, facilitates the balancing, by the opportunity it gives to each clerk of checking the major part of his work early in the day.
The In-Clearing Book of each clerk ought to agree, of course, with the portions relating to him of the Out-Clearing Books of the other twenty-six clerks. Each clerk agrees his balance one by one with the other twenty-six. If he is right with all, then he balances, and there is no further trouble, but if he is wrong with any, to any large amount, he is bound to discover his error before leaving the house. A difference of £1500 over (the In-Clearing clerk being always supposed to be right), or of less than £1000 short, is allowed to stand over till the following day if it cannot readily be discovered.
The country clearing (which was introduced by Sir John Lubbock in 1858) opens on ordinary days at twelve o'clock and closes for delivery of cheques thereinto, and also for returns, at half-past twelve. The country cheques delivered to and by the respective banks must all be agreed, and the country clearing must close by 2.15 o'clock. The course of the manipulation of the country clearing is obvious. Every bank in London receives during the day a large number of cheques upon country bankers. Upon these cheques the name of the London agent is printed. Every clearing banker in London is the agent for one or more of the country banks. The London and Westminster Bank is the London agent for the North and South Wales Bank, the Nottingham and Notts Bank, and Hall, Lloyd and Co., Brighton, for instance. Barclay, Bevan and Co. are the London agents for the Cumberland Union Bank, Gurney's Birkbeck and Co., and J. Backhouse and Co. On the cheques of the six country banks mentioned, the names of the London and Westminster Bank, or Barclay, Bevan and Co., are printed as their respective agents. So when the clearing clerks of each bank get such cheques from the cashiers, and from the correspondence department, and from all the other sources whence they may come, they proceed to deal with them as they do with the town cheques. That is to say, they sort them out in batches according to the London agents' names, then enter the amounts in their books, and then deliver them in the clearing to the respective London bankers, agents for the country bankers. No credit is given in the clearing for these country cheques on the day on which they are delivered. The amounts are simply agreed by the delivering clerks and the receiving clerks, and then the articles are taken to the respective banks, whence they are sent by post the same evening to the country bankers upon whom they are drawn. If these cheques, on reaching their destination, are found to be in order, they are credited in account with the London agent and advised; but if any of them are not in order, either through insufficient funds, or irregular indorsement, or any other cause, such irregular cheques are returned direct to the banker whose crossing they bear. All country cheques not returned, or advised, by the morning of the third day, are assumed to be paid, and credit is accordingly given for them in the clearing of that day, and the amount is settled for, along with those advised paid, in the final balance. All country cheques held by London bankers returned unpaid, must be returned into the hands of the clerk representing the delivering bank by half-past twelve on the morning of the third day, and they are simply deducted from the total of the country cheques on the day of settlement, and the balance only is settled in the final amount.