At four o’clock all the boxes are removed, and each clerk adds up the amount of the checks put into his box and payable by his own to other houses.  He also receives another book from his own house, containing the amounts of the checks which their distributing clerk has put into the box of every other banker.  Having compared these, he writes out the balances due to or from his own house, opposite the name of each of the other banks; and having verified this statement by a comparison with the similar list made by the clerks of those houses, he sends to his own bank the general balance resulting from this sheet, the amount of which, if it is due from that to other houses, is sent back in bank-notes.

At five o’clock the Inspector takes his seat; when each clerk, who has upon the result of all the transactions a balance to pay to various other houses, pays it to the inspector, who gives a ticket for the amount.  The clerks of those houses to whom money is due, then receive the several sums from the inspector, who takes from them a ticket for the amount.  Thus the whole of these payments are made by a double system of balance, a very small amount of bank-notes passing from hand to hand, and scarcely any coin.

174.  It is difficult to form a satisfactory estimate of the sums which daily pass through this operation:  they fluctuate from two millions to perhaps fifteen.  About two millions and a half may possibly be considered as something like an average, requiring for its adjustment, perhaps, L200,000 in bank notes and L20 in specie.  By an agreement between the different bankers, all checks which have the name of any firm written across them must pass through the clearing house:  consequently, if any such check should be lost, the firm on which it is drawn would refuse to pay it at the counter; a circumstance which adds greatly to the convenience of commerce.

The advantage of this system is such, that two meetings a day have been recently established—­one at twelve, the other at three o’clock; but the payment of balances takes place once only, at five o’clock.

If all the private banks kept accounts with the Bank of England, it would be possible to carry on the whole of these transactions with a still smaller quantity of circulating medium.

175.  In reflecting on the facility with which these vast transactions are accomplished—­supposing, for the sake of argument, that they form only the fourth part of the daily transactions of the whole community—­it is impossible not to be struck with the importance of interfering as little as possible with their natural adjustment.  Each payment indicates a transfer of property made for the benefit of both parties; and if it were possible, which it is not, to place, by legal or other means, some impediment in the way which only amounted to one-eighth per cent, such a species of friction would produce a useless expenditure of nearly four millions annually:  a circumstance which is deserving the attention of those who doubt the good policy of the expense incurred by using the precious metals for one portion of the currency of the country.