STOCK EXCHANGE CLEARING HOUSE. I11 recent years the system of 'clearing' stock exchange transactions. on the plan of the bank clearing house, has been generally adopted by stock ex changes. As introduced on the New York Ex change in 1892, the system provides for the offsetting of securities which a broker has con tracted to deliver by an equivalent amount of the same securities which he may have contracted to receive. Thus, if broker A has sold 1000 New York Central shares to B and bought 1000 of the same shares from C, the two transactions are settled by the delivery of 1000 shares by C to B. The price may be different in the two transactions, but such differences are adjusted by the clearing house. to which the broker is `debtor' or 'creditor' on his daily sheet. The same principle is followed even where the amounts bought and sold do not agree. Thus A, in the above ease, may have sold only 500 shares to B and bought 1000 from C. In that case C
delivers 500 shares to A and 500 to II, and pay ment is made accordingly. The economy consists in the lessening of the number of individual cheeks which must be drawn for settlement, and against which bank balances must he maintained. Supposing the price of New York Central, in the transactions last described, to have been 100, the old plan of individual deliveries would have necessitated drawing of cheeks, for settlement, in the total amount of $150.000. The clearing house plan requires only $100,000. The aggre gate saving in checks drawn, during an ordinary year, has exceeded $500.000.000, The plan was adopted by the Frankfort Stock Exchange in 1867, at Berlin in 1869, at Ham burg in 1S70. at Vienna in 1873, at Londcin in 1876, and by various American stock exchanges between IS$0 and 18S7.