METHODS OF WORKING.
The methods adopted in the London Bankers' Clearing House differ little in principle from those of the clerks in the tavern. Every morning the Head Office receives by post froM its branches throughout the country the cheques to be cleared. These are',Sorted into bundles according_-to the bank drawn npOn and then they are taken over to the Clearing House to be . handed, to representatives of the banks concerned. Similarly each bank receives cheques drawn upon itself. Scores of adding machines soon prOduce totals and these 'are agreed. Settlement, how- ever, does not take place-between two banks alone. but at the end of the day a comprehensive balance is struck. .Aceording to the result, each .bank then either makes or receives payment through its account ' at the Bank of "England.
Although payment is made immediately, such payment is made on faith, as nothing-ii;known regarding-the fate :of the cheques- that have been exchanged. The cheques received by a bank are at once sent to the branches on which they are drawn, where they are examined by a skilled official to ensure that they are correctly drawn, signed and endorsed; and that funds are available for payment. If, for any reason, a cheque is not paid, it is returned to the collecting bank, which repays the amount :received, recovering it in due course from its customer. "The number of cheques returned unpaid is extremely 'small and, of these, the overwhelming majority are sent back for technical irregularities rather than for lack of funds to meet them. .
For convenience in handling, cheques are divided into _thiee categories, each of which is cleared separately. The Town Clearing includes only those on banking offices in the heart of the City, the Metropolitan Clearing embraces the other London branches, while the Country :Clearing consists of cheques on provincial branches.
The mystic signs of \ V M and 0 which appear in the left hand bottom corner of our cheques indicate to which clearing they belong.
Previous page
