THE CLEARING HOUSE.

ORIGINALLY it was the practice with London bankers, as it is now in the provinces, to present over the counter every bill and cheque upon other banks; but about eighty years ago the Clearing House system was established in London, whereby bills and cheques are exchanged between banks during business hours, and whereby also, at the close of the day each bank, pays to, or receives from, the Clearing House the final balance.

The objects effected by this change of method were economy of time and labour, and economy of notes and other currency. Before the Clearing House was established bankers required more clerks to transact the same amount of business, and much more notes, gold, and silver.

As at the time the Clearing House was instituted there were only what are now termed private banks, the Clearing House belonged to private bankers exclusively; and when joint-stock banks were first established, some forty years ago, they were not admitted to the Clearing House, very much to the prejudice of their business. A stockbroker, for instance, whose money transactions are, perhaps, larger than those of any other trader, could not keep a banking account with a joint-stock bank before its admission to the Clearing House, for the reason that, if his cheques were presented for payment as soon as given, while his receipts were chiefly placed to his credit after the clearing, his banking account would have been generally overdrawn throughout the day's business hours.

Joint-stock banks were not admitted to the Clearing House until June, 1854, and the reluctance of private bankers to concede to them this privilege was not without reason when the stride made by joint-stock banking since that date is considered, and when it is clear, almost beyond question, that much of the competition between joint-stock and private banks, and the progress of banking under the joint-stock system, has been due in a great degree to their admission to the Clearing House of the private bankers.

In 1858 a system of country clearing was established.

The vast and increasing volume of the business transacted by the London Bankers' Clearing House, will be seen from the following official statistics :

"The working of the Clearing House for the year ending on the 30th April, 1873, the sixth during which these statistics have been collected. The total amounts for the six years have been

550,622,000 142,270,000 594,763,000 148,822,000 635,946,000 169,141,000

1867-683,257,411,000 147,113,000 444,443,000 132,293,000 1868-693,534,039,000 161,861,000 1869-70 3,720,623,000 168,523,000 1870-714,018,464,000 186,517,000 1871-72 5,359,722,000 229,629,000 942,446,000 233,843,000 1872-736,003,335,000 265,965,000 1,032,474,000 243,561,000

"The total amount of bills, cheques, &c., paid at the Clearing House during the year ending 30th April, 1873, shows, therefore, an increase of £643,613,000 over 1872, and of £2,745,924,000 over 1868."

METROPOLITAN BOARD OF WORKS.

For the purpose of effecting much-needed improvements in London, powers were granted to this Board, under the "Metropolis Local Management Act of 1855," to levy rates upon the whole of the rateable property within the Metropolitan area, as defined by the Act. Statistics show that an aggre gate rental of £20,287,709 is at present yielded annually by this property; and that, therefore, a rate of a penny in the pound produces upwards of £84,500 per annum. This power to levy rates, and the revenue derived from the great works completed under the control of the Board, form the guarantee for the Loans from time to time contracted by that body, and which are now dealt in in the Stock Exchange by the name of "Metropolitan Consols." The total of this Metropolitan 3 per cent. Consolidated Stock now amounts to £5,411,012, with interest payable quarterly at the Bank of England; and it is a

special feature that trustees and executors are empowered to invest in this Stock with the same facility as in the public Funds. The security offered is therefore regarded much in the light of a Government guarantee.

In November, 1869, tenders were invited for 3 per cent. Stock to the extent of £2,500,000 with interest, payable quarterly, on the 5th January, April, July, and October, and the principal at par in October, 1929, or previously, by market purchases. The loan was speedily subscribed at the minimum of 941.

In August, 1871, a fresh issue of these Consols was made sufficient to produce £900,000 sterling, to rank in every particular with the "2,593,673 Stock already on the market."

In March, 1873, a further Loan of £1,800,000 was contracted upon the same security, the minimum issue price being 951, with instalments payable over a period of thirteen months, and interest in full accruing from July, 1873.

Some of the principal features of the prospectus ran as follows:

METROPOLITAN CONSOLIDATED STOCK.

Interest at £3 10s. per Cent. per Annum.

Loan of £1,800,000 Sterling.

Authorized by Her Majesty's Treasury under Act 32 & 33 Vict., cap. 102, and the Acts extending or amending the same.

The Metropolitan Board of Works give notice that they will be prepared to receive, on Thursday, the 6th of March next, at the Bank of England, sealed Tenders for a further Loan of £1,800,000 sterling, upon security of Stock to be created under the statutes above mentioned.

This Stock will be consolidated with that now outstanding, which amounts to £3,527,978 0s. 2d., and bears interest at the rate of £3 10s. per cent. per annum, payable quarterly at the Bank of England (dividend warrants being transmitted by post, if desired) in January, April, July, and October, on the same days on which the Government dividends are payable; and it will be redeemed at par on the 6th October, 1929, should the same not have been previously cancelled by purchase in the open market under the operation of the Redemption Fund constituted by the principal Act.

The Books of Metropolitan Consolidated Stock are kept at the Bank of England, where all assignments and transfers are made, and holders of the Stock are able to take out Stock Certificates, transferable to Bearer, with Coupons attached, if they so desire.

All Transfers and Stock Certificates are free of Stamp Duty.

Under the above statutes, a special fund has been constituted for paying the dividends on, and redeeming the principal of, this Stock; and the Lords Commissioners of Her Majesty's Treasury control the sum to be raised annually by the Consolidated Rate to meet the charges on this Fund.

Special attention is invited to the following clause of the Metropolitan Board of Works Loans Act of 1871:

"A Trustee, Executor, or other person empowered to invest money in public Stocks or Funds or other Government Securities may, unless forbidden by the will or other instrument under which he acts, whether prior in date to this Act or not, invest the same in Consolidated Stock."

Parties who desire it may, on or after the 13th of March, pay up in full, and a discount at the rate of 2 per cent. per annum will be allowed.

Interest on the total amount of the Stock (calculated from the 6th of July, 1873) will be payable on the 6th of October following. Scrip Certificates, to bearer, with Coupons attached, for the dividends payable on the 6th of October, 1873, the 6th of January and the 6th of April, 1874, will be issued in exchange for the provisional receipts.

The Stock will be inscribed in the Bank books on or after the 9th of April, 1874; but any Scrip paid up in full, on or after the 13th of March, 1873, and up to or on the 3rd of June, 1873, may, upon payment of a quarter's dividend to the Bank of England-viz., 17s. 6d. per cent.-be inscribed as Stock, and Stock Certificates thereupon, transferable to bearer, be issued, if required, and the first dividend will be due on the 6th of July, 1873.

The estimated expenditure of the Metropolitan Board of Works for the year ending the 31st of December, 1873, as working expenditure, was £517,382 18s. 6d. The estimate for metropolitan improvements, &c., was £938,000, to be provided for by the last issue of Metropolitan Consolidated Stock.

The security thus described must not be mistaken for that offered by the Corporation of the City of London, which body levy rates within the City area. Various Loans have been contracted under this separate guarantee, of which the following are quoted in the Stock Exchange List :

:

. April and October. 1882

The liability on Loans of the Corporation stood at the end of 1872 as follows:

The receipts and expenditure of the Corporation for 1872, kept under the head of "City's Cash," were as follows:-The receipts amounted in all to £424,575. This sum is made up of a considerable number of items, of which the following are the principal:-Balance in hand on the 31st of December, 1871, £63,122; rents and quit rents, £79,191; interest on Government securities, £9989; markets, £75,255; metage and groundage of corn, £6112; fruit metage' £2006; brokers' rents and fines, £7484; justiciary fees, £1100; reimbursements on account of prisons and criminal prosecutions, £3931; Mayor's Court fees, £9142; officers' surplus fees and profits, £3959; casual, sundry, and incidental receipts, £5429; cash from reserve fund (new library and museum), £16,895; reimbursements on account of New Foreign Cattle Market, £5602; sale of property, £7915; and loans raised, £124,000. The expenditure in the same time was £372,083. The following were the chief items:-Cost of collection and management of the estates, £4057; rent charges, rates, and other obligatory charges, £4575; charges on markets-viz., Metropolitan Market, Islington, £32,462; Metropolitan Meat and Poultry Market, £39,319; Leadenhall, £734; Farringdon, £950; Smithfield, £98; Billingsgate, £2644; Columbia Market, £1073; and general market charges and expenses, £522; charges on corn and fruit metages, £6639; expenses of magistracy, £9374; police expenses (City's portion), £18,624; expenses of the City prisons, £16,926; expenses of the administration of criminal justice, £7210; expenses of the office of Coroner, £1120; expenses of civil government, £39,221; pensions, £5856; charitable donations, £1730; expenses of the. City of London and Freemen's Orphan Schools, £7828; Bills in Parliament, £3948; sundry, miscellaneous, and incidental expenditure, £6794; City Library, £1394; expenses of the reception of Her Majesty on Thanksgiving-day, £9617; erection of new library and museum, £20,266; construction of a new Foreign Cattle Market, £70,824; enlargement of Billingsgate Market, £22,534; purchase of property, £1777; investment, £1499; transfer to reserve fund, £6416; loan discharged, £24,000. This left a balance of cash on the 31st of December, 1872, to the amount of £52,491.