BANKERS’ CLEARING HOUSE

Shannon News, 31 July 1925, Page 2

BANKERS’ CLEARING HOUSE

HANDLING HUGE SUMS. £100,000,000 A DAY. Can one imagine a building in which tlie sum of £35,000,000,000 is handled in a year? Changed into bundles of £1 Treasury notes, and placed one on top of the other, the amount would form a pile over 2500 miles high. Yet in a recent year the Bankers’ Clearing House in Lombard Street, London,' dealt with cheques and bills to the enormous amount of £34,930,559,000. The wonderful system came into operation at the suggestion of a banker’s clerk in 1775. Every morning the banks connected with the Clearing House send there all the cheques on other banks which have been collected. These are made up in bundles and arranged in alphabetical order, having first, been entered in a special book by the clerks of the dispatching hank. At the back of the last cheque of each bundle is written the total amount of the value of its contents.

At the Clearing House each bundle is placed on the desk of a representative of the bank on which the cheques are drawn. It is the business of this man to check all the cheques in the bundle and see that the total shown on the last cheque is correct. If he should find any inaccuracy it is his business to inform the bank in whose bundle the error has occurred. The highest total for one day in 1921 for the Town and Metropolitan area was £2.18,395,000. This figure is not a record, however, as it was exceeded by nearly £11,000,000 one day the previous year.

For such a colossal business the Clearing House had quite a small beginning. The banker’s clerk, whoso name was Irving, suggested that a small room should be hired where the* banks’ representatives could facilitate the exchange of cheques and bills. Tim rriginal room was at No. 7 Lombard Street, but it was removed to No. 2 in ISI4 owing to the increase; in 'business. Until 1 854 the Clearing House was restricted to private banks. There are now 29 names, including Ih-tf of the Bank of England, associated with the Clearing House. To many this number may seem small, but in recent years many of the smaller concerns have been amalgamated with the great companies which transact the financial business’ of this country