more than will bring up its stock to two-thirds of its original quota. 9. The bank seeking or being called upon to buy exchequer bonds from banks in excess of their quota, shall pay for such bonds by a credit on London, at not less than two or more than five days' date, at option of purchaser, and interest for the number of days the drafts may have to run, at rate of exchequer bonds; or pay the amount in gold at the option of the seller of the bonds. 10. Each bank is to be always liable for the incometax on the interest of its original quota of exchequer bonds and no more. 11. The exchanges are to be made at the Bank of Ireland, who undertake to pay to those banks who are creditors in the exchanges, the exchequer bonds received from banks who are debtors in the exchange, but the Bank of Ireland shall not be in any way held responsible for the exchange transactions, or otherwise, soever. 12. The statement of the balances, after they are struck, to be sent to the respective banks from the Clearing Room by their clerks, and the clerks of the banks' creditors to be in waiting to receive the amounts due to them at 2.30 o'clock. 13. Any bank, a party to this agreement, to have the power of withdrawing from it and receiving back its exchequer bonds at par, upon payment of them, if needful, upon giving three months' notice. 14. No bauk, a party to this agreement, shall directly, or through any agent, demand gold from, or pay gold to, any other bank, a party to this agreement, except as hereinbefore provided, unless under special agreement between any two of them, mutually agreeing to pay and receive a sum of gold. 15. All orders payable on demand, whether in Dublin or in country towns, to be passed through the Clearing Room; the orders on provincial towns at the morning clearing only, up to, but not later than 12 o'clock. Deductions for commissions to be distinctly specified in a note attached to the documents previously to their being brought to the Clearing Room. Documents returned dishonoured shall not pass through the Clearing Room. The violation of these regulations by any bank to be considered a virtual withdrawal of that bank from this agreement. SECTION XXXV. BANKERS' CLEARING-HOUSE. THE Clearing-House was established in 1775, by several of the London private bankers, for the purpose of facilitating their exchanges with one another. Every London banker having claims against others, and they against him, used to send out clerks daily to collect the debts due to them, which were settled in cash or notes. The inconvenience of this clumsy method of transacting business, and the necessity it involved of keeping cash in their tills to meet demands made upon them for settlement of these exchanges, led to the formation of this establishment, the example of which had been previously set by the Edinburgh banks; indeed, a similar plan seems to have been adopted, as early as the sixteenth century, by the merchants who met at the great annual fair held in the city of Lyons. They made their bills payable at this fair only. By this means they were relieved from the necessity of keeping coin or bullion to discharge their bills had they been drawn at the usual dates; meanwhile the bills went into circulation, got covered with endorsements, and were yearly set off against each other when adjusting their mutual accounts, so that, as we learn from Boisguillebert, by this means transactions to the amount of £80,000,000 were settled without the need of a single sou in coin. The Clearing-House was at first by no means generally approved, and some of the principal bankers refused to have recourse to it. After the number of clearing bankers had increased, a committee was formed for its government. This committee is composed of a representative of each of the leading bankers, and any new bank that desires to have the privilege of clearing must now apply for permission to the committee. The object the clearing bankers had in view was to exchange bills and cheques against bills and cheques, and thus be enabled to carry on their business with a less amount of capital. But while the bankers endeavoured to promote their own interest, they promoted at the same time the interest of the public. The sums liberated from employment in this way became available for employment in agriculture, manufactures, and commerce. Whenever any banker, therefore, is excluded from the Clearing-House, and is, consequently, obliged to keep a larger amount of cash in his coffers, his available capital is so far reduced, and thus the agriculture, manufactures, and commerce of the country receive less encouragement. The establishment of the Clearing-House has led to new arrangements in several branches of business. The stockbrokers, for instance, now settle all their receipts and payments by cheques to be paid through the Clearing-House. The cheques a broker draws on his banker are paid at the Clearing-House by cheques of other brokers, which he lodges to his credit. The Colonial brokers also, and other classes of commercial men, have fixed days for settling their accounts, and on these days draw cheques on their bankers in the morning, and pay in cheques to meet them at a subsequent part of the day. Thus the institution of the Clearing-House has become entwined with the commerce of the country, and could not be discontinued without deranging every branch of business. It has also received the sanction of the law of the land, the courts of law having decided that the presentment of a bill of exchange at the Clearing-House is a legal presentment. In this case, as in many others, the custom of bankers and merchants has become law. Many of our commercial laws have had the same origin. They have at first been mere regulations established by merchants for their own convenience; these regulations have been adopted by other classes of the community; they have been followed for a number of years, and then the law has recognized them as a portion of the commercial institutions of the country. Such was the origin of allowing three days' grace upon bills of exchange, and such has been the case with the ClearingHouse. The Clearing-House is no longer, therefore, a private subscription room, from which the parties admitted may exclude whomsoever they please at their own caprice. They may exclude improper banking companies, as the Edinburgh banks refuse to exchange with any bank that is not respectable; but they are bound in justice to admit all respectable banks who may apply for admission. "Another amendment which I would propose as connected with the currency of London, would be a regulation of the Clearing-House by the Legislature. Although the Clearing-House was a voluntary association of bankers at first, yet it has now existed for sixty years, and has become interwoven with several branches of London trade; it is therefore, for all practical purposes, a public institution, and like a market or any other public institution, might become the subject of legislative interference. The exclusion of banks in London from the ClearingHouse, whose capital now amounts to about £2,000,000 sterling, and who have about 2,000 partners, is not only a great inconvenience and great loss to those banks, but is a great inconvenience also to the public in general, and such |