Association has thirty-four members, embracing eighteen head offices and sixteen branches. The Kobe Clearing-house Association has ten members, of which four are head offices and six are branches. The Kioto Clearing-house Association has twelve members, of which seven are head offices and five are branches.

Clearings in all of these are made once a day. The Tokio Clearing-house opens at 10.30 A.M., and closes at II A.M. The Osaki Clearing-house opens at 1 P.M. and closes at 1.30. Similar short periods of time are observed by the clearing-houses at Kioto and Kobe.

Bills of exchange, promissory notes, certificates of deposit, and checks are regarded as good clearing-matter and are allowed to pass through the clearing-houses as regular exchanges. The average daily clearings and balances in the four clearing-houses named are as follows:

Balances are borrowed and loaned on interest by the bank officials. The central bank (the Bank of Japan) settles the balances by means of transfers between current accounts. Each bank in the clearing-houses has an account with the central bank. The central bank is located in Tokio, but has branches in various cities.

The expenses of the clearing-houses are met as follows: One-half of the total expenses is borne by the banks comprising the clearing-house in equal shares.

The other half is paid by the banks in proportion to the amount of items presented by them at the clearinghouse.

Country banks are not allowed to clear their bills and checks through the clearing-houses, but banks in the cities are permitted to clear their bills through a member of the clearing-house. A clearing-house bank clearing items for a non-member is required to apprise all the members of the clearing-house of this fact.

The Tokio Clearing-house, as before mentioned, dates back to 1879. At the beginning the association was composed of twelve banks. The business methods of the clearing-house at that time were so imperfect that it was finally compelled to discontinue business. This occurred after an existence of about three years. There then followed a careful investigation of the various systems employed in different parts of the world, which resulted in the formation of a new clearing-house in February, 1891. The new clearing-house was organized under the name of the Tokio Clearing-house and it commenced business in March of that year. It was modelled upon the lines of the London Clearing-house. The special features adopted are indicated by the following rules:

(1) The settlement of the daily balances will be effected by transfers on the books of the Bank of Japan. (2) The Bank of Japan will clear its notes and checks as a special member.

(3) Items received by clearing-house banks are to be passed through the clearing-house. Direct exchange between members of the clearing-house will not be al

lowed. For the violation of this rule, an appropriate penalty is provided.

(4) Each member shall deposit as security with the clearing-house five per cent. government bonds, to the amount of ten thousand yens, face value.

The members of the Tokio Clearing-house, at the time of its organization, were as follows: The First National Bank, the Third National Bank, the Fifteenth National Bank, the Twentieth National Bank, the Twentyseventh National Bank, the One Hundred and Nineteenth National Bank, the Mitsui Bank, the Yasuda Bank, Branch of the Thirteenth National Bank, Branch of the Thirty-second National Bank, and one other. In addition to this number, there was the Bank of Japan, which is a special member. In January, 1895, the Kawasaki Bank and the Imperial Commercial Bank were admitted to membership. In February of 1896, five additional banks joined the association—namely, the Tokai Bank, the Forty-first National Bank, the Seventyseventh National Bank, the Seventy-eighth National Bank, and the One Hundred and Thirteenth National Bank. Since May, 1896, the Tokio Clearing-house has occupied a room in the new building erected by the Bank of Japan.

The growth of the clearing-house business in Japan is shown by the following table, which gives in the first column the number of items, and in the second their amount for each year, from 1887 to October, 1897, inclusive:

The arrangement of the banks in the clearing-room of the clearing-house is as follows: The desks are in two parallel rows, at some little distance apart. Between them, at one end and projecting outwardly, somewhat beyond the ends of the rows, are the desks of the manager and secretary, respectively. The first desk at the right of the manager is the Bank of Japan. Following in order down this row are the First National Bank, the Third National Bank, the Fifteenth National Bank, the Twentieth National Bank, the Twenty-seventh National Bank, the One Hundredth National Bank, the One Hundred and Nineteenth National Bank, and the One Hundred and Thirteenth National Bank. The row at the left of the manager has banks in the following order: Mitsui, Yesuda, Konoike, Thirty-second National Bank, Imperial Commercial Bank, Kawanaki, Tokai, Forty-first National Bank, Seventy-seventh National Bank, and Seventy-eighth National Bank. This list includes only those banks which have been previously designated in this description as head offices.

The following abstract of the rules and regulations of the Tokio Clearing-house will give a general idea of the organization and conduct of this institution. The other Japanese clearing-houses are largely modelled upon the same plan, and, of course, are subject to the same general laws:

This clearing-house shall be named the Tokio Clearing-house, and it shall be located within the precincts of the Bank of Japan, Honriokae Cho (street), Niphonbashi Ku (district). The object of this clearing-house is to exchange bills and checks of various descriptions, received by member-banks.

Claims arising from the non-payment of bills and checks, or from the mistakes of clearing, shall be settled between the banks concerned, and the clearing-house shall not be responsible therefor.

The rules for clearing are as follows: The clearinghouse will open at 10.30 A.M. and close at II A.M. exactly. These hours are subject to change by the board. Only those bills and notes payable at member-banks can be cleared. Daily balances shall be settled by means of transfers in the current accounts of the various banks in the Bank of Japan. The settling clerk of each clearingbank must list bills and checks, and endorse each of them. The settling clerk shall also prepare slips and lists, which must accompany the items brought to the clearing-house.

The settling clerk of each bank, after the exchanges are made, shall fill out the debtor side of his list, strike a balance, and prepare a balance sheet, which he shall submit to the manager of the clearing-house. The man