THE BANK OF ENGLAND AND THE CLEARING HOUSE.

Otago Witness, Issue 659, 16 July 1864, Page 2

THE BANK OF ENGLAND AND THE C LEA RING HOUSE.

(From the Economist, 23.d April,) H'therto the Clearing House ofthe London bankers has included only a majority of the private and joint stock banks. The Bank of EnglaDd has carried on its exchanges with the bankers, private aud joint stock, by means of a separate collection and sefc'letnent with ewh. la point of tact, the Bank of England, so far as its own operations weie concerned, has ignored the existence of the Clearing House, or nearly so. Vanous ciuses have contribute! to this result. Practical reasons uf u-age and convenience have had much tj do with it. and there iiave been other considerations which it is probable fully justified the Bank of England and the Clearing bankers in persevering in the old mode of adjusting their dai>y demands on each other.

It hiv? n>w appealed, however, to the TJank Courr, icidueace't, it h believe-t, to a great extent by the views of the present Goeernor, that tlie tune Iris come, when it will b; for the interest ot the banking community and for the conveuienco oftho public, for the Bank of England to be.oine a nrmber ofthe Clearing House, and to be leprasent d there daily iv the "usual way by a stiff of clerks sufficient to eriect the Bank Clearing iv accord .nee with the established rules.

At present the Bank of Kogland effects with each Uat.ker a settlement. twL-e a day of t!ie demaii'ls, it may have upon the banker, aud these settlement 4 aie accomplished by collecting clerks taking prescribed wtiks. Under the future plan, the Bank of England will save itstlf and the bankers the troub c and delay of these bidaily fceitlemeuts, and will on the one hand pass into the Clearing House all tha '• article.-*" it lias to receive, andobiaiu from the Clearing House all ilia " arliclei" it lias to payj discharging or receiving at the end of the day the balance against or lor in (the Bink), as the cisc may be, aud by a simple transfer entry in the Clearing tlovse account kept by itself.

The simplification is one of detail, and it will not iijfl 'ence the public in nny appreciable degree, but it brings one degree nearer to parfection the machinery ot banking facilities now existing* in London. It is not very long- ago that the Clearing House differences at the end of the day were settled iv bank notes, hut the risk and tivjub^ of bank notes was found to be considerable, and lor a lout? time past all differences have been paid by transfers from oiiajiccoaatj-to - aijpther at the Bank of--BnglfrnU.' Bank Notes ~an~<r"Uofri* may bs-said lo have now no official value at the Clearing House.

The plairof cleanug couutry cheques th ougb. the London correspondents of the Couatry banks übo answered very well, audvis now fully ett ibiistied. To a rargo 'extent It* gives to the customers of c.untry bants ihe facilities of a London banking account, and saves trouble, time, riok, ntid expense to all parti s. The general effect of all these refinements, rapidities, find economies ot banking practice is to iedu.ee more and more the importance and influence of that whiih used to be anxiously wato ed as the main moving power of the money ln.u-keb- -namely, the amount of tue note circulation of tlie Bmk of England and the country banks. The circu'atijn bf the Bank of England has been stationary or slightly retrogressive for :>ome years past, notwithstanding the increase of trade, wealth, and population; and the circulation ot the country batiks of England and Wales may be said to be in gradual process of exiiuctim. The authorities even of the famous system of monetiry philosophy known as the Currency Principle, no longer insist upon the variatio.is of the bank-note circulation as the symptoms to be chiefly regarded. They, wita the rest of the world, have discovered tiiat the state oi the banking reserve at the Bank of bngland, the condition ot credit, and the effects of a high or low rate of interest, are the circumstances which really control the financial phenomena of the count! y from week to week and month io month.

In the meantime, both the Bank Courts and the clearing bankers are entitled to the thanks of the public for having adopted mears whereby still greater expedition and ease will be introduced mto the practice of London banking.

Why is a man who beats his wife like an exquisitely formed dog?— Because he's a perfect brute, *