The Clearing House, on Cedar Street near Broadway, occupies a building which is one of the handsomest in New York. In design and adornment, the white marble structure is in fit keeping with the dignity and importance of an institution whose daily transactions are regarded as a barometer of the financial condition of the country. Visitors are not admitted.

The Clearing House Association in Wall Street, comprises forty-eight banks and fifteen trust companies (these representing also numerous others), which meet here to settle their accounts with one another. In the course of its business, each one of the banks receives checks and drafts drawn against some or all of the others. Instead of each one sending to collect these checks from the others, all the banks come together in the Clearing House and turn in the checks drawn on each. After a system of exchange, a balance is struck and the sum is ascertained which each bank must pay in or which must be paid to it to clear its account. By this system of paying differences it is practicable to settle enormous accounts in a way extremely simple and expeditious and involving the actual payment of amounts which are comparatively small.

The clerks representing the banks meet in the Clearing House at ten o'clock, and the balances are ascertained by 12:30. A bank which is a debtor to the Clearing House must pay its balance by 1:30 of the same day, either in cash or Clearing House certificates. Banks which are creditors receive checks for the balance due them the same day.

Go To Next Page