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Institutions established in the United States about 1853, for the convenience and economy of banking institutions in large cities. The system originated in London. By it the banks of a city become, in certain operations, as an individual in work; for it dispenses with the individual clerical labor of each bank associated, in the matter of the exchange of checks and drafts and bills coming in from abroad. Formerly each bank employed a man to go around every day and collect all checks and drafts drawn upon it by other banks in the city. Now, at the clearing-house, a messenger and a clerk from each bank appear every morning, each clerk taking a seat at the desk of his designated bank, arranged in the form of a hollow ellipse. Each messenger brings with him from his bank a sealed package for every other bank, properly marked with the amount enclosed, containing all the checks or drafts on each bank. The messengers take their places near the desks of their respective banks, with tabular statements of the amount sent to each bank and the aggregates. These are exhibited to the respective clerks and noted by them on blank forms. At a prescribed hour the manager of the clearing-house calls to order and gives the word for proceeding, when all the messengers move forward front left to right of the desks, handing in to them the packages addressed to their respective banks, and taking receipts for them on their statements. These clerks make a mutual exchange of all claims, and the balances, if any, are struck, each bank paying in cash the amount of such balance. This operation occupies about one hour, within which time all accounts are adjusted. The balances due to the several banks are paid into the clearinghouse within about another hour.

The extent of the system, the vast amount of money handled by it, and the enormous saving of time through. its operations are clearly detailed in the report of the comptroller of the currency. In 1900 there were eighty-four clearing-houses in the United States, and in the year ending Sept. 30 the aggregate of exchanges was $84,546,685,444, a decrease in a year of $4,281,987,089. In New York City the exchanges amounted to $51,964,588,572; in Boston, to $6,299,128,611; in Chicago, to over $6,800,000,000; in Philadelphia, to over $4,600,000,000; and in St. Louis, Baltimore, and Pittsburg, to over $1,000,000,000 each.

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