The balance only of the country clearing is brought into the final settlement on the town clearing balance sheet, as will be seen on reference to the form given on page 333.

The C. H. on the same form means "Clearing-House," and is meant for the adjustment of differences.

Having given a description of the operations of the clearing and the means by which these are carried out, it now remains for us to describe the process of the final balancing and the mode of settlement of the entire clearing.

We shall suppose that each clerk has balanced with his twenty-six neighbours. He then proceeds to fill in the balances, in his favour or against him, as the case may be, on his Clearing Balance Sheet (see form). For the sake of example we shall take the National Provincial Bank's balance sheet, and shall suppose that three-fourths of the other clearing bankers are due that bank balances of various amounts aggregating the sum of 999,000 19s.lld., and that that bank are due the remaining fourth of the clearing bankers various balances amounting in the aggregate to the sum of 762,956 17s. 9d. There is thus a balance in favour of the National Provincial Bank of 236,044 2s. 2d. This balance is not brought into the till of the National Provincial Bank in cash and bank notes, as would have been the case prior to 1854. It is simply transferred to the credit of their account at the Bank of England, out of the account kept at the same institution called the " Clearing Bankers' Account."

The following are the forms used in making such a transfer.

(No. 1.)

Settlement at the Clearing-House.

London, ______________, 1880.

To the Cashiers of the Bank of England.

Be pleased to credit our account the sum of Two hundred and thirty-six thousand and forty-four pounds 2s. 2d. out of the money at the credit of the account of the Clearing Bankers.

For the National Provincial Bank of England, 236,044 2s. 2d. A B

Seen by me Inspector at the Clearing-House.

For which the Bank gives the following certificate:-

(No. 2.)

Settlement at the Clearing-House.

Bank of England.

--------------------, 1880.

The account of the National Provincial Bank of England has this evening been credited with the sum of Two hundred and thirty-six thousand and forty-four pounds 2s. 2d. out of the money at the credit of the account of the Clearing Bankers.

For the Bank of England,

236,044 2s. 2d.

On the other hand, let us suppose that the final balance of the clearing instead of being in favour of a banker is against him. For the sake of further example, we shall suppose that Barclay and Co. are due two-fifths of the other clearing bankers various balances amounting in all to 736,504 3s. 8d., and that the remaining three-fifths are due them various balances amounting in all to 685,302 19s. 6d. In this case it will be seen that instead of having to receive from, they have to pay to, the clearing the sum of 51,201 4s. 2d. And here again, instead of having to receive so many bank notes and gold, silver, and copper, from those bankers whose balances were in favour of Barclay and Co., and paying in a similar manner those bankers whose balances were against them, as they would have had to do prior to 1854, Barclay and Co. now would have to settle the final balance against them by simply giving the following order on the Bank of England :-

Settlement at the Clearing-house.

London, -------------------, 1880.

To the Cashiers of the Bank of England.

Be pleased to transfer from our account the sum of Fifty-one thousand two hundred and one pounds 4s. 2d., and place it to the credit of the account of the Clearing Bankers, and allow it to be drawn for by any of them (with the knowledge of either of the Inspectors signified by his countersigning the Drafts).

Barclay and Co.

51,201 4s. 2d.

For which the Bank signs the following certificate:-

Settlement at the Clearing-House.

Bank of England.

--------------------, 1880.

A transfer for the sum of Fifty-one thousand two hundred and one pounds 4s. 2d. has this evening been made at the Bank from the account of Messrs. Barclay and Co. to the account of the Clearing Bankers.

For the Bank of England,

51,201 4s. 2d.

This certificate has been seen by me Inspector.

It is plain that by the operation of the account of the clearing bankers kept at the Bank of England, into which those clearing bankers whose balances are against them, pay, and out of which those bankers whose balances are in their favour, draw, the gigantic transactions of the London

Clearing-House are day by day settled without the aid of a single penny.

To show the enormous operations passed annually through the Clearing-House, and the economic effects involved therein, we append a table of the statistics collected by Sir John Lubbock during the past thirteen years:-

Table showing the total amount of Bills, Cheques, etc, paid at the Clearing-House during each year {ending April 30th) from 1867-8 till 1879-80, together with the amounts on the fourths of the month, on the Stock Exchange Settling Dags, and on the Consols Settling Lays.

Total for the Year.

On Fourths of the Month.

On Stock Exchange Account Days.

On Consols Settling Days.

1867-1868

3.257,411,000

147.113,000

444,443,000

132.293,000

1868-1869

3,534,039,000

161,861,000

550,622,000

142.270,000

1869-1870

3.720,623,000

168,523,000

594,763,000

148,822,000

1870-1871

4,018,464,000

186.517,000

635,946,000

169,141,000

1871-1872

5,359,722,000

229.629,000

942,446,000

233.843.000

1872-1873

6,003,335,000

265,965,000

1,032,474,000

243,561,000

1873-1874

5,993,586,000

272,841,000

970,945,000

260,072,000

1874-1875

6,013,299,000

255.950,000

1,076,585,000

260,338,000

1875-1876

5,407,243,000

240,807,000

962,595,000

242,245.000

1876-1877

4.873,000,000

231.630.000

718,793,000

223,756,000

1877-1878

5,066,533,000

224.190,000

745,665,000

233,385,000

1878-1879

4,885,091,000

212.241,000

811,072,000

221,264,000

1879-1880

5,265,976,000

218,477,000

965,533,000

233,143,000

There are also clearing-houses established in Manchester, Liverpool, and Newcastle. In Ireland, also, the system has long been in operation; while in Scotland, as has already been said, the plan of clearing was first introduced into this country, and was first reduced to a scientific system. All clearing-houses in the country perform precisely the same functions as the London Clearing-

House, and therefore no lengthened description of them is necessary. No doubt their arrangements and systems differ in some cases in detail, but for all practical purposes the description of the London system will be sufficient.

As an example of the economy of labour which can often be effected, it may be worth mentioning that in Scotland the banks use clearing books having every alternate sheet perforated down the inside margin. The charges against the other banks are written up in pencil on the unper-forated sheets, and by the aid of a sheet of carbonized paper placed underneath, an impression of the items is taken on the perforated sheets. These duplicates are then torn out and handed over with the relative articles to the clerks of the other banks, who simply compare the one with the other and so save the time and trouble of taking down afresh in their own books the amounts of the various articles. When the clerks return to their respective banks, these duplicates are gummed upon the margins from which their own delivering sheets had been detached, and so in one book there is a handy record of the articles delivered to, and the articles received from, each bank, following each other.