Also the debit and credit slips brought by the settling clerks are of different colors.

The speed with which the business of a clearing-house is transacted seems almost incredible. The actual time required to make the exchanges varies from one and onehalf minutes to ten minutes. When the exchanges are made simultaneously, the time varies, as a rule, in proportion to the number of members. In view of the shortness of the time required to make its exchanges, the New York Clearing-house affords, perhaps, the best example in existence of the success of modern business methods, as compared with the old ways of doing things. The clearances exceed on the average one hundred million dollars a day, and yet this enormous amount of paper is exchanged between the banks in ten minutes, and often in less time.

When the clearings have been made, the next step is for each settling clerk to determine the amount of the balance of his own bank, which is found by taking the difference between the amount brought to the clearinghouse and the amount taken away. There is practically no exception to this rule. A certain amount of time is allowed for the proof, and for each error remaining undiscovered at the expiration of the allotted time a fine is usually imposed. At the end of a certain time thereafter it may be doubled, and still later it is often quadrupled.

In some cases the settling clerks do not remain until the proof is made, but leave for their respective banks as soon as they make out their tickets for the amounts brought, amounts received, and balances. If the manager or his assistant in charge of the proof-sheet finds,

after he has made all the entries and additions, that his work does not prove, he first determines whether the error was made by one of the settling clerks or by himself. If by one of the clerks, it is usually discovered in a short time at the bank, whereupon the latter reports the error to the manager at the clearing-house, either by messenger or by telephone. If the bank fails to report the error in due time, the manager takes the credit and debit slips and finds it.

At Cincinnati no fine is imposed upon a clerk or his bank for an error in a slip, if it is discovered and reported promptly to the manager. At Louisville, however, a fine of two dollars is imposed, without regard to time limitations.

All that has been said thus far applies to those clearinghouses that clear only once a day. But there are in the United States five clearing-houses that make practically two clearings a day. These are at Philadelphia, Pa., Fall River and New Bedford, Mass., Detroit, Mich., and San Francisco, Cal. The details regarding the exchanges at Philadelphia are set forth in the chapter on the Philadelphia Clearing-house. At Fall River an amendment was made to the Constitution, May 27, 1895, as follows:

"The cashier of the clearing-house shall be the manager of the clearing-house, and the settling clerks shall be under his direction while at the clearing-house. An exchange of checks and other items for clearing shall be made daily at II o'clock A.M., and the final clearing at 1.30 P.M. The debtor members shall pay to the manager of the clearing-house the balances against them by 2 P.M., and on or before 2.15 o'clock the creditor members shall

receive the respective balances due them, except that there shall be but one clearing on Saturdays, at II o'clock A.M."

The first clearing at Fall River is made at 11 o'clock, in order that the book-keepers at the banks may have most of the checks for entry as soon as possible. This is simply an exchange of checks, notes, and drafts, payable at the bank, and they are thus placed at the bank where they are payable before noon. The footings of this clearing are carried on the various slips to the second clearing at 1.30 o'clock, when balances are settled. This has been the custom ever since the inauguration of the clearing-house.

At New Bedford, however, from the date of organization in September, 1888, until February, 1890, there was but one clearing a day, namely, at 12 o'clock. For some months prior to the annual meeting in February, 1890, there had been considerable opposition to clearing at that hour, on the part of one member of the association, because thereby it was obliged to carry over, occasionally, large amounts of checks on other banks, taken in payment of notes and cotton-drafts, for which in some cases it was required, by special arrangement with correspondent banks, to remit at par upon the day of payment. strong was this opposition that the question finally threatened to disrupt the organization, and, as a compromise measure, it was at last decided to change the hour to I o'clock for a final clearing, which nominally was and still is the hour of closing for the national and savings banks of the city. At the same time a preliminary exchange was provided for, the same to take place at 12

So

o'clock, and this arrangement worked with partial success until March, 1895, when the hour for the preliminary clearing was changed to 11.30. This was done in order to facilitate the work of the book-keepers in entering the greater part of the day's items.

This preliminary exchange at New Bedford includes all checks received in the ordinary course of business before 11 o'clock, including those received through the early mails, together with the notes and acceptances maturing that day. Probably ninety per cent. of the day's items are thus disposed of before the final clearing. The latter includes comparatively few items, although they frequently exceed in amount the items of the preceding exchange, since cotton-drafts and corporation notes are usually paid between 12 o'clock, noon, and I o'clock.

The association at Detroit, Mich., pursues a method in handling collections unlike that followed anywhere else in the United States. By Section 12 of the Constitution of the Detroit Clearing-house, the hour designated for making the exchanges is fixed at 12.15 P.M. There is. however, a previous exchange at 9.30 A.M., which was authorized by amendment to Section 12 of the Constitution, on November 30, 1898. The following is the text of the amendment:

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Precisely at 9.30 o'clock A.M. on each secular business day, except Saturday, a representative from each member shall be present at the clearing-house, and at that hour such representatives shall deliver to the representative of each of the other members the promissory notes, acceptances, drafts, or other obligations due and payable on that day at the offices of the several members.

Such notes, acceptances, drafts, or other matured paper shall be accompanied by a separate list for the member at whose office it is paid. A duplicate list shall be checked and receipted by the messenger representing the member at whose office the obligations thereon listed are payable, and such receipted list shall be handed back to the representative of the member delivering the items, as above. Precisely at 3 o'clock P.M. a representative of each member shall be present at the clearing-house, and settle with the representatives of such members as shall have delivered items to his bank at the morning meeting of that day, either by returning such items or the proceeds thereof in the shape of the obligation or obligations of his bank payable through the exchanges of the following day. The representative of the member with whom such settlement is made shall surrender to him the receipt taken at the morning meeting for such items; the surrender of such receipts to be an acknowledgment that all items thereon listed have been properly accounted for.

"The manager of the clearing-house shall have charge of the representatives of the members at the meetings for the purpose indicated, and the same fines shall be imposed for failure to be properly represented promptly at any meeting, for errors, or for disorderly conduct, as the members are liable for in the clearing of exchanges; and the work of delivering obligations or settling therefor shall not be delayed longer than five minutes.

"In case of the failure on the part of any member either to return all the obligations received by it or to account therefor as provided above, such action shall be