It is evident that the total which some of the banks have to receive on balance must equal what the others have to pay, because every cheque has been added in twice, once in favour of, and once against, some bank. If the debtor and creditor columns of the seventh form, being added up, fail to balance, some error of account must have been committed, and all the work is submitted to careful re-examination until the error is detected. When all is correct, it remains only to effect the payments, which is done by means of credit and debit notes, directing transfers in the books of the Branch Bank of England, to or from the accounts of the clearing bankers. The payments are made, indeed, to and from the Clearing House, as a kind of fictitious entity; but as its payments and receipts each day exactly balance, the Clearing House requires no separate ledger account, except for small current expenses, or inconsiderable

errors.

To effect the transfer the clerk of each paying bank fills up the double form, No. 4, as follows:

The coupon on the left-hand side is a draft to be signed by the clerk, if he has authority for the purpose, or else to be carried by him to his principals to be signed, and then paid into the Bank of England. It directs the cashier to credit the Clearing House with the balance, and debit the sum to the paying bank in question. The authorized official of the Bank of England signs the corresponding form on the right hand, when the payment is made, as a receipt for the sum on behalf of the Clearing House.

When, on the other hand, the balance is in favour of a bank, Form No. 5, printed on green paper for the sake of easy discrimination, comes into use. It sufficiently explains itself.

There remains then only the question of the returned cheques. Even these do not require cash payment. The balance at the close of the day is paid only provisionally, and those cheques which have to be dishonoured are returned within an hour to the bank presenting them. Unless the irregularities be explained away, or removed, the presenting cashier then signs the following form, No. 6, which is an acknowledgment that so much money too much was received by him at the last clearing. This form is included by the bank dis

honouring the cheques, in its out-clearing parcel, and the matter is rectified in the balance of the next clearing.

The settlement in the Manchester Clearing House is often effected in less time than it would take to read this account of the method, and the work goes on with noiseless ease, strongly contrasting with the turmoil of the London House. No doubt, the amounts cleared are. comparatively insignificant in Manchester, the average daily sums being, in the years 1872, 1873, and 1874, respectively £226,160, £237,150, and £247,930, or little more than one-hundredth part of the daily transactions. in the Lombard Street House.

The Manchester Clearing House is managed by a committee of bankers, of which the chief agent of the Bank of England in Manchester is the chairman, and

the superintendence of the clearing work is conducted by an official of the Bank of England. Thus the Bank, while naturally taking precedence, harmoniously co-operates with the local bankers.

New York Clearing House.

The New York Clearing House was established in October, 1853, and has become a most important institution, embracing 59 banks, as compared with 26 in London, and settling transactions hardly, if at all, inferior in amount to those of the London house. The general method of settling the business is necessarily much the same as that already described, but it seems to be in some respects better arranged than in London. The work is carried on in a fine large Exchange Room, and there is proper accommodation for the manager and his clerks, instead of the small glass box in which the inspectors sit in the Lombard Street room.

Each New York bank has one settling clerk in the Exchange Room, besides a messenger, who brings and delivers the parcels of cheques and bills. The settling clerks sit in a series of desks arranged in an oval form in the middle of the spacious room, and the exchanges are effected by an equal number of messengers simultaneously walking round the desks, delivering the parcels of "out-clearing," and receiving those of "inclearing," or as they are called in New York the Credit and Debit Exchanges. An account of the institution will be found in Gibbon's work on "The Banks of New