(Each bank has a specially printed balance sheet with its own name omitted from the body and placed at the head.)

(This form is printed on green paper for ready distinction.)

It would be interesting to discuss the points of difference between the arrangements of the London Clearing House and those of other great cities. That, however, could hardly be done without giving the details of other systems, and must therefore be postponed to a future occasion. I can only briefly refer to one or two directions in which improvement may be expected.

The constant increase in the Country Cheque Clearing threatens at no very distant date to produce serious inconvenience, both by the difficulty of transacting the business of clearing the cheques themselves, and by the hindrance it will afford to the arrangements necessary for the vast and increasing transactions of the London Clearing. Already, the operations of the Country Clearing are so great that it is impossible to transact the House work alone in the time during which the House is available for the purpose, and the difficulty is only surmounted by sending round to the various banks and collecting portions of the charges before the regular time of clearing.

It would seem, therefore, that the time has arrived that the question should be decided, whether some improvements cannot be introduced into the system, which shall afford some relief in this special work, and shall meet the further expansion of business which may be expected. It would, however, require too much space to give now even a sketch of the various arrangements that might be adopted, but it is to be hoped that such a system may be established as will still further increase the economy and efficiency of the Country Clearing.

A suggestion of minor importance, but still of economic tendency, has lately been made; that the country notes coming into the hands of London bankers should be actually cleared, instead of being carried

round to the various offices as at present. It has been urged, that not only would this effect a considerable saving of time and labour but that it would greatly diminish the risks of the present system. Formerly country notes were cleared together with drafts and bills, but it was found desirable to discontinue the practice, and the present arrangement was substituted. There is certainly much time lost in the visits of upwards of a score of clerks, each to upwards of a score of offices, and it is probable that most of the disadvantages attaching to the clearing of notes indiscrimately with drafts would be avoided by a special clearing for notes only. There is, however, at present, no time of the day when the Clearing House is available for a period sufficient for such a purpose. Further, the risks incurred by carrying the notes through the streets would hardly be avoided, as they would have to be carried to and from the House. The distance would certainly be shorter, but there would be a special element of risk in the circumstance of the clerks engaged in the work being known to leave the House at a special time, instead of leaving their individual offices at various times.

If it were thought desirable to carry out the plan, no doubt these objections could be overcome, but it may be questioned whether it is worth while to make new arrangements for dealing with country notes. The maximum amount issuable decreases almost year by year, and the amount actually in circulation declines at a still greater rate; nor have we at present any reason to expect a reversal of these conditions by a change, either in our banking legislation, or in the commercial habits of the people.

Another suggested application of the clearing principle, and one more in accordance with the course of development of our banking system, is the establishment of a Clearing House for bankers in the western district of London. It has been long suggested, but has not as yet advanced so far as to become a definite project. There would, no doubt, be some difficulties in the way, but they could hardly prove insuperable, and there seems no reason why some at least of the suburban bankers should not take advantage of the clearing system to diminish the risks and trouble now incurred in the collection of drafts.

Any such establishment would hardly realise the same advantages that have attended the parent institution. Considerations of distance would very much modify both its procedure and its possibilities. But there would be considerable convenience and little expense attending the establishment of a post of exchange at some central point. Probably Charing Cross would be found most easily accessible from every outlying branch. Here clerks from the various banks might meet, say twice a day, for the exchange of drafts, and a third time for the delivery of returns and payment of balances. There would be no necessity for any executive depart

ment in such an establishment, as the clerks might settle direct with each other, and pay by drafts on a City clearing bank.

In this case of course it would be necessary that the hour of settlement should be early enough to permit of these drafts being cleared the same day. Or it might be found practicable and advisable to pay and receive through the medium of the West End Branch of the Bank of England. Any way, by judicious arrangements, a balance of advantage and convenience would be found to result from the substitution of system and centralisation for individual effort.

THE POSITION OF THE

GOVERNMENT OF THE

NETHERLANDS ON THE SILVER QUESTION.

THE following important remarks are contained in a reply addressed by the Minister of Finance of the Netherlands, President of the Council, to the Reporters of the 2nd Chamber of the States General, on the Budget of 1882 :

The Government is firmly convinced that, unless some arrangement is made to guarantee the maintenance on a wide basis of a bi-metallic system by means of an International convention, the confusion which, owing to the enormous depreciation of the value of silver, will probably be brought about in all transactions, whether confined to the country or of an International character, will be so serious, that it is scarcely possible either to foresee its extent or, at the present time to estimate the consequences.

For this reason it not only declared its readiness to take part in the International Monetary Conference proposed by France and the United States, which was held at Paris at the commencement of the present year, but its delegates at this conference urged with very great tact and zeal the conclusion of such an International convention.

The Government still continues, within the field of diplomacy, an energetic activity in the same direction, thoroughly convinced that it is rather the logic of facts, the actual experience of the difficulties which must result to monetary interests, which especially have made themselves felt lately, both here and elsewhere, which must decide the vote of the coming conference, adjourned to the month of April next.

There is no hiding the fact that the difficulties here, in this country, where, up to the present time they have been felt only in a high rate of discount, will not fail, and perhaps more quickly than is generally thought, to manifest themselves in a more serious form,

Position of Government of Netherlands on Silver Question. 103

viz., in an agio on gold, in a rise and uncertainty in the exchanges, and in a rise and instability in the price of all things. For some years past we have had a fictitious gold standard which has regulated the value of our money of exchange, consisting chiefly of silver, notwithstanding the diminished value of this last mentioned metal; but who can say how long this condition of things can continue?

The Government has never hidden the precarious state in which, as a consequence, our monetary system stands. This precarious state must manifest itself sooner or later. It has been strikingly apparent, especially of late, owing to the constant and considerable exportation of gold to North America. According to the weekly balances of the bank of the Netherlands, the reserve of gold stood on the 14th August, 1880, at :

against a reserve of silver amounting to florins 81,311,561.31; whereas these reserves, at the present time (12th October, 1881) are so far modified that whilst that in silver has risen to fl, 86,927,644 41, that in gold on the other hand has fallen to fl. 19,082,807.15, which does not include more than fl. 26,057.15 in gold bars; within the last fourteen months almost all the gold bars, over and above gold pieces of ten florins to the value of fl. 21,950,240 have been exported, without counting that which may have been exported from the gold coin in circulation.

If, unfortunately the current continues some time longer in this direction, it is to be feared that soon the value of our money of exchange will no longer be controlled by that of our gold coin. The undersigned, especially in view of the future Monetary Conference, which ought to meet again in April next, is unprepared to submit any measure with a view to ward off this danger. But if, contrary to all expectation, this Conference does not lead to any satisfactory result, the moment will then probably have arrived, when the Government and the States General must decide, either for the demonetisation and sale of a large part of our silver reserve, with a sacrifice of many millions, or for a return to the silver standard together with the terrible consequences resulting from such a

course.