The clearing house purpose consists in substantially to facilitate transfer of credits

The clearing house purpose consists in substantially to facilitate transfer of credits. It is explained by the following [249] illustration of low: Assume that Brown colour and Smith
Hold their money for the deposit in Bank A and that Brown colour gives to Smith, its check on 100$ and Smith bring it in bank to its (Smith"s) credit. Officials of bank will subtract 100$ from the account of Brown colour and will add the same quantity to Smith"s account. No actual money should be mentioned. It - simply question of arithmetics and accounts department. The credit has been transferred from Brown colour to Smith. If all people of a city held the money in one central bank there would be no requirement of a clearing house. Bookkeepers of bank would be kept by the occupied credits of transfer from one client to another on bank books. But if Brown colour holds its money in Bank A, and Smith holds the money in Bank B, it is necessary, that Bank A and Bank B unite somewhere that it is convenient to do credit pass, and it actually, that they do in a clearing house. Then, again, if Bank A should be located in San Francisco and Bank B in Boston, difficulty of transfer of the credit is very increased.