Foreign Department Boston Clearing-house Association.
The Boston Clearing-house has devised a plan by which its members can, through the agency of the " clearing-house," collect out-of-town checks, etc., on New England points, and not drawn on their own correspondents. These would naturally be collected directly from the correspondent.
The checks are sorted out by each Boston bank in such a way that there will be a package for each out-of-town bank, a list of the checks in each package being attached to the same. These packages are sorted by States, and then the towns in each State are sorted alphabetically, and taken, during the first half of the afternoon of each business day, to the " clearing-house," where they are placed upon certain desks, at which are twenty clerks who in turn sort out the packages by banks, by which method those on each New England bank are brought together. The packages which are to be presented to a given bank are listed upon a letter which accompanies the package. As there are 632 out-of-town banks in New England, to which collections are sent, the packages averaged for the year ending March 31, 1909, 5,491 daily.
The out-of-town banks settle with the clearing-house manager and he, in turn, makes a settlement with each member of the association.
To quote Mr. James C. Hallock:
"To clear his debits and credits, the clearing-house acts as a member of itself, having a desk and number like any member. The banks charge it with the out-of-town checks left for collection, and it charges them with the checks drawn on them and remitted to the manager, also with the New York exchange and currency. The one side balances the other, upon proper adjustments for errors, omissions, and delayed remittances.
"To keep the accounts straight, check tickets are used. The manager checks the amount of each package by the footing on the stub he retains of the slip which accompanied it. He checks the amount of each letter by the footing on its stub which he retains. He checks his receipt for collections by the credit ticket each bank presents, giving the whole amount of checks it claims to have delivered, and the amount on each State. Thus extraordinary accuracy is attained with ease."