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each case cheques on branch offices are received with the same limitation, viz., that the presenting bank has not itself a branch at the place drawn upon. Unpaid cheques are in all cases returned direct to the bank by whom they were presented; at Aberdeen those bearing the stamp of a district branch are returned thereto. The following are the particulars of these clearings:-

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In DUBLIN arrangements for the exchange of notes have been in operation since December 1845, and about twenty years ago they were extended to the collection of cheques. Four banks are parties to the clearing-the Bank of Ireland, the Provincial Bank of Ireland, the National Bank, and the Ulster Banking Company,

The clearing is held in a room belonging to the Bank of Ireland, where the notes are brought for exchange at 10 a.in. At the same hour, and also at noon, charges of cheques are delivered by the banks at each other's offices, and receipts are taken for them. These receipts are brought into the final clearing and settlement which is held at the Clearing Room at two o'clock.

Cheques on country branches of the associated banks may be included in the charges delivered at ten o'clock

The balances having been struck, and statements of the same having been sent to each bank by its clerk, they are settled at 2.30 by transfers of exchequer bonds, of which a certain amount (£400,000) is always held among the banks. The quota to be held by each bank is definitely fixed, and provision is made in the Rules as to the time and manner in which the banks are to readjust their holdings. These bonds being only for £1,000 and £500 each, lesser amounts are paid in notes of the debtor bank.

Unpaid cheques must be returned by 4.0 p.m. direct to the presenting banker, by whom they are paid for in cash. Unpaid cheques on country branches are, in course, to be returned in two days, or even later, if on branches situated beyond one day's post. No record is available of the amounts cleared.

The Rules of the Association are as follows:

1. The hours for making the exchanges to be

Forenoon-For notes and cheques, 10 o'clock.

Afternoon-Final clearing for cheques, 2 o'clock. Except on Satur day, when the hours to be 9.30 o'clock a.m., and 12 o'clock noon. In order to establish punctuality, any bank not represented in the clearing room, fifteen minutes after the hours specified, to be excluded from that exchange.

2. The payments of the balances shall be made in exchequer bonds, except for the fractional parts of £500, which may be paid in notes of the particular bank debtor.

3. The exchequer bonds, which are not to be used for any other purpose. shall bear the distinguishing mark "Dublin exchanges," and the stamp of the original holders, and shall be received at par, with the interest which may be due, when a transfer takes place.

4. The amount of exchequer bonds to be kept in the circle is fixed at £400,000, and is apportioned as follows:-

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and each bank shall maintain its quota at all times, as hereafter provided. 5. The exchequer bonds to be as nearly as practicable of £1,000 and of £500.

6. The amount of exchequer bonds held by each bank shall be stated every day in the clearing room.

7. No bank shall be obliged permanently to hold more than one-third above, or be allowed to reduce more than one-third below its fixed quota of exchequer bonds; when, however, exchequer bonds have accumulated with some banks and are required by others, it shall be imperative on the banks so situated to buy or sell, the bank holding the greatest amount in excess of its quota being bound to sell to the bank deficient the amount required for the legitimate purposes of the exchanges; no bank, however, in such case being bound to reduce its stock below its original quota, and the bank seeking to purchase shall buy from the bank holding the greatest proportionate amount above its quota.

8. When exchequer bonds have accumulated with any bank to more than one-third above its quota, it shall have the power to call upon the bank or banks holding the smallest amount in proportion to their quota, to purchase ;

but it shall not be imperative upon any bank to purchase more than will bring up its stock to two-thirds of its original quota.

9. The bank seeking or being called upon to buy exchequer bonds from banks in excess of their quota, shall pay for such bonds by a credit on London, at not less than two or more than five days' date at option of purchaser, and interest for the number of days the draft may have to run, at rate of exchequer bonds, or pay the amount in gold, at the option of the seller of the bonds.

10. Each bank is to be always liable for the income tax on the interest of its original quota of exchequer bonds, and no more.

11. The exchanges are to be made at the Bank of Ireland, who undertake to pay to those banks who are creditors in the exchanges the exchequer bonds received from banks who are debtors in the exchange, but the bank of Ireland shall not be in any way held responsible for the exchange transactions, or otherwise soever.

12. The statement of the balances, after they are struck, to be sent to the respective banks from the clearing room by their clerks, and the clerks of the bank's creditors to be in waiting to receive the amounts due to them at 2.30 o'clock.

13. Any bank, a party to this agreement, to have the power of withdrawing from it and receiving back its exchequer bonds at par, upon payment of them, if needful, upon giving three months' notice.

14. No bank, a party to this agreement, shall directly, or through any agent, demand gold or pay gold to any other bank, a party to this agreement, except as hereinbefore provided, unless under special agreement between any two of them mutually agreeing to pay and receive a sum of gold.

15. All orders payable on demand, whether in Dublin or on country towns, to be passed through the clearing room, the orders on provincial towns at the morning clearing only, up to, but not later than 12 o'clock.

Deductions for commission to be distinctly specified in a note attached to the documents, previously to their being brought to the clearing room. Documents returned dishonoured shall not pass through the clearing

room.

The violation of these regulations by any bank to be considered a virtual withdrawal of that bank from this agreement.

THE COLONIES.

In our COLONIES the only example of the Clearing System is in Australia. In Canada, though the banks are numerous and important, and notwithstanding the rapid spread of the clearing among their immediate neighbours, there is no Clearing House. One was started in Montreal some twelve years ago, but was very shortly afterwards discontinued. In Toronto, cheques and notes received during the day are sent round on the following morning to the other banks in sealed packets and placed to account. no regular time for settlement: a creditor bank draws a cheque on There is a debtor one just as it wants the money. These balances are never paid for in coin, but in government legal tender notes, in which the banks are required to hold 40 per cent, of their reserves, and the

largest of which, those for $1,000 each, are generally used by them for this purpose.

In Australia, although in relation to population and trade, banking accommodation is more ample than in any other country, the clearing system has as yet made but little progress, the only Clearing House being that at Melbourne. This, which is an important and well organised institution, was established in 1868, and includes the ten principal banks in the city, who appoint among themselves three representatives as a committee of management. The Clearing is now held in a handsome building in Collins Street West, one of the principal business thoroughfares of Melbourne. This edifice was erected in 1878, and comprises a lofty and commodious hall lighted from the roof, together with an antechamber and offices. Ranged on either side are the desks of the various banks, each bank having a separate enclosed space, and a desk bearing in front a brass plate engraved with its name. Upon a raised platform at one end of the room is a desk for the inspectors. There are six clearings daily on Tuesday, Wednesday, Thursday, and Friday; eight clearings on Monday, and four on Saturday. These include special clearings for the exchange of notes, and also of country and suburban cheques.

The details of the operations of the house will be best described by the following extracts from Mr. Hamilton's "Law and Practice of Banking in Australia and New Zealand," to which work I am also indebted for many of the particulars here quoted :-

"Each bank requires at least two clerks to represent it in the house, one sitting at the desk to receive the "charges," i.e., the claims against the bank in respect of cheques and bills, and the other to deliver the documents domiciled at the other banks, at the desks of the respective representatives. At the times fixed for the several clearings, each bank promptly deposits on the desks of the other nine banks a folded packet of cheques, &c., accompanied by a printed memorandum with the amount filled in. The "in-clearing" or receiving clerk rapidly enters the vouchers in his book, and on agreeing the total, initials the slip, which is then reclaimed by the delivering clerk and forms his warrant for a claim to that extent against the receiving bank. At the subsequent clearings later in the day, the same initialled slip is again left with fresh" charges" of cheques and an added amount, until at the close of the day it represents the total amount of the holder's claim for documents he has surrendered, and forms the basis upon which the inspector makes up his general statement, balancing the total transactions of the day and certifying how much is due to, or by, each of the ten banks represented. *

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"The rules with regard to closing the doors at specified times are most rigidly enforced, and it occasionally happens that a bank is shut out and has to await the ensuing clearing. To ensure uniformity, and prevent excuses from diversity of clocks, the clock at the Clearing House is connected by telegraph with that of each bank in the city, and the whole are controlled by the standard at the Observatory."

The times for returning dishonoured articles vary. Town cheques are charged back in the next clearing after the one in which they were received. Dishonoured bills may be retained until the last or "return" clearing. Suburban and country cheques must be returned in course of post as prescribed in the rules inserted below. Balances are settled weekly, on Tuesdays, including all transactions to the close of the previous day Special settlements are also made with each of the banks on such days as they balance their accounts.

The balances are paid, as to even sums of £500 and upwards in gold, or gold certificates; for smaller amounts the banks hand their cheques to the inspector.

The gold certificates used in settlement of the balances are parchment certificates of £1,000 each, representing a part of a sum of £420,000, jointly deposited by the various banks in special safes and under triple keys. Each bank is required to hold a certain amount of these certificates, determined in relation to its capital, and when holding its full quota of certificates may demand gold in payment of clearing balances due to it. On the other hand, any bank holding less than its proper amount, is called upon by the inspector to take up the balance by paying gold for them. These arrangements do not minimise the movements of gold coin quite as much as might be expected. To quote from Mr. Hamilton again :

"The figures for the year 1879, £98,650,000, were settled by weekly payments aggregating, £4,450,000 in certificates, and £1,800,000 in coin. The prime disturbingielement in the operation of the certificate principle is found in the transactions of the Royal Mint. A very large proportion of the gold received from the mines is sold by the banks to the Mint for coinage, and is paid for by the Deputy Master's cheques on their bankers, the Oriental, to provide for which cheques, gold coin is paid in. The exchanges under such circumstances will naturally be pretty continuously against this bank, and must be settled in coin, since the magnitude of the transactions would soon exhaust its fair proportion of the certificates.”

The amounts settled at the Melbourne Clearing House since its establishment have been :—

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