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THE MANCHESTER BANKERS' CLEARING HOUSE.

Just one hundred years after the opening of the first bank in MANCHESTER the bankers of that city determined to establish a Clearing among themselves. At that time their practice was to keep running accounts with each other, paying in to credit daily at each office all the cheques they held upon that bank, and taking the next morning a cheque upon the Bank of England for the amount in round figures. This arrangement was cumbrous as compared with clearing, but still had son.e points of advantage over the plan of presenting charges and waiting for their examination and payment. After several efforts, a Clearing was established, and commenced operations in July, 1872, under the superintendence of one of the officials of the Branch Bank of England, in which manner it is still conducted. The Manchester Bank Clearing now includes twelve banks, of which two only are private banks. Two of their number, the Manchester and Liverpool District Bank and the Manchester and Salford Bank, clear also separately on account their King Street and St. Ann's Street branches respectively,f making fourteen accounts in the settlement. The clearing also includes cheques cn all branches of such banks as have their head offices in Manchester; thus, covering the transactions of fourteen city offices, of twenty suburban, and one hundred and thirty country branches scattered over a considerable area.

There are two clearings daily. The first opens at 10.45 a.m., from which time drafts may be exchanged up till 11.15, when the clearing closes. All parcels of drafts are accompanied by lists, giving the individual items and the totals. Several deliveries may be made in each clearing, but as the time extends only over halfan-hour, the parcels cannot be numerous, and, as a matter of fact, are generally no more than one. The clerk receiving the cheques counts them to see that they correspond in number to the entries

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The following remarks continue an enquiry into the origin and working of some of the principal Clearing Houses in this country and elsewhere, which was commenced by the note on the London Clearing House, in the February Number of this Journal, pp. 89-102.

† The first named of these was until 1863, the business of Messrs. Lloyd, Entwisle & Co.; and the latter, till 1873, the office of Messrs. Heywood Brothers & Co.

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on the list, and enters the total on the "In" side of his balancesheet. It is not generally found necessary to check the items or the castirgs of the lists before taking them up to the Clearing House, as the banks usually agree the work before sending it out. No settlement is made at this Clearing, the charges to and froin each bank Leing entered in the left-hand column of each side of the balance-sheet, and the total carried forward to be added 10 the amount of the second clearing. This opens at 1.45 p.m. and closes at 2.15. On Saturdays the banks close at noon, and but one clearing is held, at 11.15 a.m. At the close of the second clearing the representative of each bank, having previously entered the amount of his claims on every other bank in the second column of the “Out” side of his sheet, enters their respective claims on his own bank in the second column of the “In" side ; and, after bring. ing in the total of the first clearing, a balance to pay or receive is shown at foot. This is settled by transfer to or from accounts at the Bank of England, and upon tickets similar to those in use at the London Clearing House, the counterparts of which are at once signed by the Bank official in charge of the clearing.

Unpaid cheques are not returned to the House, but delivered at the office of the bank by whow they were presented; they are accompanied by a debit-slip, which is signed by the cashier to whom ihey are delivered, and in the next clearing is cleared as a draft. Unpaid cheques on any head office must be so returned within one hour of the close of the cleari in which they were presented. Cheques on branches within one mile and a half of St. Ann's Square must be returned within one hour of the close of the next clearing. Those on country branches are returned in course

of post.

The amounts cleared in Manchester have been :1872 (July to December)

£32,341,000 1873

72,806,000 1874

76,113,000 1875

81,114,000 1976

81,273,000 1877

85,896,000 1878

85,706,000 1879

83,509,000 1880

102,678,000 1881

108,541,000 Following are the Rules of the Clearing, together with copies of the lists delivered with charges; of the balance-sheet; and of debits given for unpaid cheques.

RULES. 1.-The representatives of these Banks shall form a Committeo, to be summoned at intervals not exceeding threo months by one of the Agents of the Bank of England, as Chairman, in order to discuss matters affecting the Banking Community; and a meeting shall be called at any time on the requisition of three members, specifying the question to be submitted.

II.—No new member shall be admitted except by a vote of the Committee. III.—There shall be two Clearings, viz., at 11.15 A.M. and at 2.15 P.m., on all ordinary days of business, except Saturdays, when one only shall be held at 11.15 A.M. On other Half-holidays there shall be one Clearing only, which shall be held one hour before the closing of the Bank doors.

IV.-The business of the Clearing House shall be conducted under the control of an Officer, appointed by the Bank of England.

V.-In case of the non-payment of any article it shall be returned to the Bank which has sent it in, within an hour from the close of the Clearing at which it was presented, and be exchanged for a Debit Note to go in at the next Clearing; if the return be made after the second Clearing, then a Cheque on the Bank of England may be given in exchange.

VI.-The Cheques on Country Branches of Banks, having their head office in Manchester, shall be passed through the Clearing provisionally, subject to return in course of post against a Debit Note, to be passed through the next Clearing following such return.

VII. That Cheques on Branches within one mile and a half from the centre of St. Ann's Square, measured as for the cab fares, shall be passed throngh the Clearing provisionally, subject to return within one hour after the close of the following Clearing, against a Debit Note to be passed through the next Clcaring following such return; but Cheques on such Branches which shall be passed through on Saturdays, or other Half-holidays, shall be subject to retuin not later than one hour after the close of the first Clearing on the first following working day.

VIII.-It shall be permissible for any Bank, in the intervals of Clearing hours, to apply for the acceptance of a Cheque by the Bank on which it is drawn, or for a Debit Note for the next Clearing in exchange for such Cheque.

IX. - The expense incurred by the Bank of England in managing the Clearing shall be borne equally by the respective Clearing Banks.

X.-All forms to be adopted shall have the consent of the Committee, and no change shall be made except with such consent.

MANCHESTER BANK CLEARING.

Mem. of Cheques delivered by

to

Clearing.

18

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That two establishments, dealing with the same class of business, and having in view the same ends, should adopt methods so dissimilar as are those of the London and Manchester Clearings, has naturally provoked remark and comparison, but it may be questioned, whether the bankers of each city have not adopted the plans best suited to their particular need. The system of delivering charges complete and accompanied by lists has obvious advantages, both with regard to order, and, if properly carried out, to correctness also, but it would entail additional labour on the collecting banks in having to prepare lists as well as to charge out the drafts.

On the “In "side there would be less time required to compare the cheques with the lists than to take them down afresh, and there would be an advantage in having

the work done at the banking office, instead of at the Clearing House. Ou the “Out” side there would be a gain in correctness and much advantage to the Daily.. Balance; but any errors that might be made would be not unlikely to be overlooked by the paying bank, and therefore a high standard of accuracy in the lists would be absolutely necessary. In the Manchester Clearing the necessity of duplicate entries has not been felt. The work is so moderate in amjunt that it is, I believe, a general practice to charge out the drafts upon the clearing lists only, and, before sending them to the House, to agree the total of those lists with that of the Waste Book or Receiving Book columns. This method, so complete and effective, would be altogether impracticable where the work assumes such vast proportions as in the london Clearing. The method of complete and listed deliveries has as yet also been tried only in conjunction with early clearings. In Manchester with two clearings, the latest is at 2.15 p.m.

In London, we should hardly deem it desirable to hold over till the following morning all drafts received during the day, and it would be impossible to present the whole mass after the close of the hank counters. It would therefore necessitate three or four deliveries during the afternoon, and then the "In" clearing would be contained in so large a nun.ber of lists as to be highly inconvenient. On the other hand, as the paying banks would have less work to perform with regard to the "In" clearing, the time of making tbe last delivery might be extended by such a period as would permit of the whole receipts being passed through, and thus the present systems of "marking" might be abolished.

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MISCELLANEA.

BILLS OF EXCHANGE_BANKRUPTCY_PARTNERSHIP--PURCHASE OF GOVERNMENT STOCK THROUGH THE Post OFFICE-COMPANIES Acts AMENDMENT—DEMONETIZATION OF SILVER. —The subjoined resolutions on these subjects were adopted at the twenty-second annual meeting of the Association of Chambers of Commerce of the United Kingdom, held in London on February 28th and following days :

Bills of Exchange. "That the thanks of the Association be given to Sir John Lubbock and the President for re-introducing the Bills of Exchange Bill, which has been read a second time and referred to a Select Committee.

“That the Committee of the Council be re-appointed to watch the progress of this Bill through Parliament, and to suggest such amendments as may seem desirable."

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