Show 4 HOW w CHECKS ARE CLEARED 1 I Data by E A A James Bank Bark Examiner of the Salt Lake Lake and Ogden Clearing House Associations 4 1 ARTICLE NO 2 In the first article ot of o this thit eerie WaS sketched In itt rough outline the origin of ot the London clearing clearinghouse hou p prototype p of nit alt similar In- In institutions In Institutions now In exl existence lenee In a succeeding article It will wilt he be shown that the Clearing House association of 01 any city now nosY performs functions of t broader broder to the ch civic Ic wel- wel welfare wel welfare fare of ot Ih the community than are rendered by the fulfillment of ot Its primary purpose that of striking a daily balance balanc in cash between een V banks after mutual debits and credits hn have hate e been cancelled The present article will III deal entire entire- entirely entirely ly Iy with the th process for which the fIrst clearing house houe was as founded and which Is still the definite rca rea- reason rea reason son tor for II its being It IC bank A has accumulated accumulate In Ina ina Ina a day days 8 business In checks and drafts on bank hanh B n and bank B BIn RIn In turn has hs apper alper payable by bank bankA bankA A amounting to the sim sins sins- simple pIe way WilY of ot coming to a n balance Is for tor each ach to present the debits to the other at t a common meeting place and for bank B in addItion to present bank A with cash for 10 BOO to sett settle the difference eny enough But when there thero are arc meat banks Involved the procedure 5 become bome exceedingly labor labor- laborious Iou ious bus without a It 1 I developed time saving method of ot controlling detail Such a method Is In op- op operation operation op operation every business day ot of the year In the clearing house The clearing begins when a chock chek I Is presented at the Ing tellers window of any bank in the city All cheeks checks so 0 cd are arc lettered then sorted to the banks on which they are arc drawn Checks on out of ot to town ton n banks arc are forwarded to 10 the correspondent In those towns for tor collection by the clearing clearinghouse clearinghouse I hOu house e there thre Local checks are list list- listed list listed ed Nl and entered on statement sheets Both checks an are enclosed In a IL package for tor or pre pro at nt the clearing house day The statement sheet bears bear the ot of o each bank In the clear clehr- cle clearing r- r rIng ing house with the amount of debits opposite each aCh A credit ticket Is made out showing the I total of all nit Items brought I In for tor clearing and this ticket Is gIven to the manager er of ot the clear clear- clearIng clearing IsI I ing lag hou house for tor entry on his balance sheet het Clearing begins begin each morn morn- mornIng morning I ing lag at nt 10 30 o'clock except on Sit Sit- urda it urda urda when hen the start is at nt 10 These pr preliminaries are all i disposed ot of f before the opening hour 1 The clearing takes place around I In n a table with a n place for tor each member bank and a desk for the manager The clerks are seated at nt this table while the dell delivery ery clerks are sta- sta sta stationed tinned right TIght behind Vo with their bundle of ot checks already checks already for the time to start clearing Clearing does docs not begin until all the banks are represented and there Is a atine afine afine tine fine for tardiness Promptly Prompt on the hour the line to mo move mote Each Ench clerk hands hande to the first settlement clerk be- be vond be-vond ond where he Is st standing the thet t package of ot checks by that bank with the total on the state state- statement statement ment sheet This clerk entera enters on his settlement sheet the amount of the checks and the tho name of ot the bank presenting them Then each delhery clerk moves forward and the process Is continued until each one has hM stopped at the section or of er bank In the association and ered the pa payable able by that bank The entire operation operation- operation Involving about 2 dally daily for Salt Lake rake City and nd a proportionate am for tor Ogden Ogden-Is Ogden Is completed In three minutes The delivery clerks clerics noW return to their banks with the checks from every other bank Meanwhile each binks bink's settle seUle- settlement ment meat clerk ha has remained behind to 10 prove hl his work By comparing the totals total of ot checks received from other banks and of o checks present presented Id I'd by them he learns whether hI hl bank bank- owes the tho clearing house or 01 has a balan balance due from It He sends hi his result to the managers rs The manager who has ab- ab absolute ab absolute solute rge ch of ot the clearing opera opera- operations from beginning to end now makes the general enral proof Fines are arc Im Imposed for tor errors bv by the clerks When the balance Is struck the manager reads rends off oft the amounts duo due to and from each member hank bank These Thee figures are taken down by th the settlement clerks for forthe forthe the Information of ot their banks and the total transactions transaction ore given to the newspapers tor for publication Balances due to the clearing clearinghouse howie houe must bo be paid between bet 1130 and 12 o'clock with certified or cashier s 8 check chek on the Federal Pedral Re-I Re Re- Re nerve Re-nerve Credits are paid to the banks banko b the federal oderal Reserve bank bankI I b cashiers cashier's chock check or by acknowledgment acknowledgment acknowledgment of a deposit to their so- so ac account count based on ins clearing house hous report The entire pro pro- proceedings pro proceedings are arc concluded In about 45 minutes and ond the clearing house Is Ia IaIn In again each ach mem mera- member her ber hank bank read for the same op- op operation op operation on the following mornIng Through th this process the tho amount of actual cash em Is reduced to Its proportionate place in mod mod- modern modera modern ern era business A comp comparatively email sum Burn of af cash I Is required to effect the clearing TOme Time labor I and cash cosh reserves are arc saved sated by this highly systematized od method The Th chee check for 10 0 or grinds through the mill with equal ern- ern effi efficiency clency The small customer or the small bank receives the same amo s mo ice service as the larger customer or the large bank All Is devised for tor or con COD convenience con convenience to the tho member banks and to the entire business community Once business was conducted without It h u t checks and without thc clearing house Once also we knew nothing of ot the telephone Itt n nour our day we demand the quickest sa safo to means of doing business Editors Editor's NoK- NoK NOR NoI Tills is I the u thc nd of a 1 E series ot of fhe IsO Ic by Mr I James JamS on house hooe thAt will t-IU appear Jr on the he financial In pa of The Standard from Unto Jo to |