While this is being done the settling clerks are checking back from the small tickets to ascertain whether the amounts agree with the amounts listed on their statements from the exchange slips. By this time the proof clerk has footed the four columns on his sheet, namely, the debit and credit exchanges and the debit and credit balances. If the former two agree with the latter two the work is correct, and the result is announced by the manager, who calls off credits and debits: As he calls off these balances, which are named in thou sands of dollars, the hundreds and fractional' parts being omitted, the clerks list the amounts on a special slip pro vided for the purpose, and thereby secure a general report of the balances of the day to take back with them for the inspection of their several cashiers. By these reports the managers of the several banks are informed of those who have balances to be paid to them by the clearing house, and also of those who are to pay amounts into the clearing house.
The time elapsed, since the manager sounded his gong for starting the work, up to the time of the completion of the proof, is perhaps forty-five minutes, or possibly a little more. Three-quarters of an hour is the limit before fines are in order against those who have made the errors that prolong work, but it is not often that it becomes necessary to impose fines. The record time is thirty-five minutes, altho the dates when the proof has been reached in thirty seven to forty minutes from the time the delivery clerks started on their rounds are numerous. When a particu larly good showing in this regard has been accomplished, the announcement of the result by the manager is very likely to be greeted with applause.
But suppose, as not infrequently happens, there is a dis crepancy. The proof sheet does not balance, which clearly indicates that there is an error in the work of one or more of the clerks. The manager immediately announces the dif ference and the clerks proceed to search for it.
Various methods are resorted to, according to the nature of the difference. Usually the manager calls for an ex change of sheets, to the right or to the left, for examination of footings, and in cases of apparent error in entry the amounts are called back. This is the final method of re vision, and if the additions are correct it must make the proof.
Thus far, no money has entered into the transaction. Checks, notes, drafts and other items have passed through the exchanges, but as yet no occasion has arisen for the use of a single penny. Evidently, however, the clearing is
not yet complete. Each member has in his possession paper drawn upon himself, which the other members have credited on their books, and likewise each member has given in ex change to each of the other members the paper drawn upon them, respectively, and which he has credited upon his own books. But the possibility is very remote that the amounts of the items delivered by any member to the other banks will exactly balance the sum total of the items received from them. Indeed, so slight is the chance of such an agreement that in the whole history of the association there has not been a single instance of this kind, altho, as we shall see, the approach on one occasion was within one cent of an exact exchange. Hence, each day after the exchange the general proof will show a debit on the part of some of the banks and a corresponding credit on the part of others. To complete the clearings, therefore, it is necessary for the banks to settle these balances.
Accordingly, before half past 1 o'clock each debtor bank, in compliance with the requirement of the constitution, pays into the clearing house the amount of its debit balance and obtains a receipt for the same, signed by the assistant man ager. After half past 1 o'clock the creditor banks receive at the clearing house their respective balances, and give their receipt for the, same in a book provided for that purpose ; but in no case can a creditor bank receive its balance until all the debtor banks have paid in.
5. Settlement of balances.—There are various ways of settling balances. Most clearing houses settle their balances in money; some require gold coin exclusively; and others accept any kind of money except small silver and minor coins, which are ex cluded, because of their bulk and weight, when counted in large quantities.
Some clearing houses settle their balances by means of manager's checks on the debtor banks. The credi tor banks send to the clearing house for these checks, which may be drawn on any debtor bank. The clerks then present the checks to the debtor banks and secure the money. If the amounts are small, the checks are carried over until the next day and put thru the ex changes, just the same as any other check. When this is done, the liability of the of the clear ing house for their payment ceases at the close of business on the day when the checks are issued, and the creditor bank assumes the risk for carrying them over.