| Show INLETYFn mLION 1 I Enormous Increase in Bank Clearings for 1892 BUSINESS OF THE BANKS I t Interesting Information Concerning 1 Clearing House Operations What the Clearing House Is and How the Banks Make Iheir Settlements Importance Im-portance of the Association Last Years Figures Ninetyfive millions I This enormous sum represents the amount of business done during 1892 by a Salt Lake institution that neither buys sells nor traffics that does not own a dollars dol-lars worth of property and has not even a corporate existence Every day its transactions run up to from two to four hundred thousand dollars and the volume of its business is taken both at home and abroad as a fair criterion of the state of trade and c commercial prosperity of Salt Lake City How many people know what a clearinghouse clearing-house is i what it is for or how its work is performed Of course the bankers know all about it and a few wellposted business men have a pretty clear idea of its operations but the ordinary run of people intelligent and wellinformed on other subjects simply understand in a vague way that the clearing house is some sort of an institution insti-tution that in some manner indicates the business done by the banks A pretty clear understanding of what is done at the clearing house how and why it is done and the importance and magnitude oi the work may be gathered irom the following follow-ing explanation of the business as it is carried on here in Salt Lake City SETTLEMENTS SIMPLIFIED Everyone knows that when a merchant receives checks in the course of trade he does not take those checks to the bank on which they are drawn but deposits them with his bank and receives credit for so much cash During the day each bank accumulates a great number of these checks drawn on every other bank in the city In order to effect a settlement between the banks it would be necessary for each one to send a messenger to every other bank and pay out or collect very large sums of money To illustrate Yesterday Yester-day the State Bank of Utah held checks against other local banks aggregating about 560000 The other banks held its checks to the amount of 59000 Without With-out a clearing house association it would haye been obliged to collect 510000 from Wells Fargo < fc Co aloneand pay 30000 to some other bank besides other small sums As a matter of fact it did not payout pay-out or receive a cent from any bank directly di-rectly but simply took a ciearing house certificate for its credit balance which was l90u It was to accomplish this result re-sult that the twelve banks of the city organized or-ganized the clearing house association HOWIT IS DONE I At 12 oclock OD each day twelve very Trideawake young men seat themselves around a large table in a room in the Scott Aueibach building They are all picked men selected for their accuracy in computation com-putation and general business reliability I As each enters he tosses to each of the i others the bundle of checks which his bank has received that are drawn on other banks Thus when all are assembled each messenger has before him all the checks that his bank is required to settle I set-tle Every bank is numbered and no names are used in any of the clearing house I transactions until the final settlement is I i I I made Each messenger Is provided with I I a blank slip with two ruled columns one i for the entry of the credits or the amount I I of checks that he holds against the other banks and the other column for the deo I its or the amount of checks brought in I against his bank I Promptly at 1215 ManagerHawley calls the messengers to order and the work I begins The credit column on the slipo I has already been filled at the banks and the messengers proceed to fill up the debit I I column from the checks that have been placed before them As each slip is balanced I bal-anced it is handed to the manager who i enters the amounts in a book provided I for that purpose When all the slips have been balanced each messenger calls out the amount of his debit or credit balance and then the manager proves the correctness of their work If he finds that the amount of the checks handed in by each bank equals the amount of those taken away and the sum total of the credit balances equals the total of the debit balances the computations computa-tions of the messengers are correct and nothing remains to be done but to settle t with those banks that have sent in more checks than have been presented against them METHOD OF SETTLEMENT This settlement is the simplest of the whole proceedings In a few of the larger I cities the debit balances are paid into and the credit balances out of the clearinghouse clearing-house fund by the banks but the Salt Lake association does not handle a single dollar Certain of the banks have presented i pre-sented in the days settlement more checks than have been presented against them the clearing house owes I them the amount of their credit balance i The other banks have more claims to set I I tie than they have presented they owe to I the clearing house the amount of their I debit balances As a matter of course j I the amount to be paid in will just equal I the amount to be paid out and Manager Hawley simply draws clearing house certificates cer-tificates in favor of the credit banks and against the debit banks Thus if the I Deseret National had a credit of 1500 and the Utah National a debit of 52000 Mr I Hawley would draw a certificate on I the latter in favor of the former and a certificate for the remaining 500 of the Utah Nationals debit would be given to some other credit bank So when all the claims of the credit banks are settled all the debits are wined out at the same time This whole transaction of settlement involving on some days half a million dollars dol-lars rarely consumes more than fifteen minutes The total amoudt of checks brought in is the sum sent out each day I as the clearing house exchanges In some of the smaller cities however notably Galveston both the cheeks brought in and those sent out are given which is a computation of the same checks twice and gives the outside world an erroneous idea of the amount of business done In this city the computations are made on the same basis as in the larger eastern cities MUST ATTEND TO BUSINESS Punctuality and accuracy are the watchwords of Manager Hawley If a bank messenger is five minutes late he is fined SI if he is ten minutes late he is fined 3 and if he is fifteen minutes late I his bank is barred from a clearing house 1 settlement that day There are also fines imposed for errors in computation but these rarely occur The total amount of fines for last month was only 350 I THE YEARS BUSINESS I Yesterdays clearing house exchanges I were 5348019 same day last year 219716 increase 2S303 The clearings for the week were 1578 115 same week last year 51216169 increase in-crease 361946 I The clearings for the month were S 064930 same month last year 7313277 increase 751713 The clearings for the year were 95024 115 for 1891 81854820 increase 13 i 169235 which is over a million a month I or about 16 per cent increase over 1891 Following are the clearings for the year by months compared with 1891 One interesting in-teresting fact shown by them is that there was a decrease during the first months of he year and a large increase during the later months 1S91 1892 I January 00 u u J877o4n J7 1CT453 February h < 72H398 6238626 March 61GV690 74GI4S1 I AriLu 1 7U8929 9IOQ510 May 54C7W8 8374002 i June 5821941 7071t50 I July uu 7OnG2 > 83A5IO August 6J4J017 7493757 8Jig6 t JT Seotember 0872Gi 7na9 October uu 6CtS40 78K7 I November 69r2i3i 9481017 Dacembor u 7313277 Stl 900 |
