Hammond Times, Volume 10, Number 51, Hammond, Lake County, 7 January 1922 — Page 3

January 7, VJ'SZ.

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FROM the time when cash began to be superseded by checks, drafts and other paper in the transaction of business, it has been natural and necessary that the banks of a community should match the debits and credits with one another daily and make the proper settlement. In London, in the 17tK century, it was the custom of the banks to use "walk clerks" or "collectors," as we would call them, to go to each of the other banks in turn and collect the actual cash to cover checks, drafts and other credits which had accumulated in the previous day's business. About 1 670, two of these walk clerks chanced to meet in a coffee house where each had gone for a little refreshment. It appears that messengers of those davs were no more eager for work than in our own time, for it seemed a clever idea to these youths to effect their exchange right then and there, thus eliminating the long walk and the attendant fatigue. Also permitting more time for refreshments. Their banks did not 'discover the subterfuge and so the simple method was continued, Other clerks learned of

the time and labor-saving scheme of their colleagues and before long the coffee house had become the first clearing house. Manv thousands of pounds changed hands daily, without authority or sanction of the banks, who believed their clerks to be following their tedious rounds instead of disposing of the business in hand in a fraction of the former time. When the practice was discovered, i here was division of opinion among the bankers. Some ordered it stopped forthwith. Others, perceiving the germ of merit in the idea, held out for its development. The latter prevailed and a room was engaged lor the use of the boys. Later, a set of clearing rules was devised and a manager placed m charge of the entire activity. From this informal beginning evolved the London Clearing House, the largest in the world.

Time and the development of American banking brought the system to this country. New York established its Clearing House in 1853, followed by Boston, Philadelphia, Pittsburgh and Chicago. Now, every city of size jx commercial importance has its Clearing: House. All- follow the same

elementary idea of convenience and economy of time and labor, though local conditions make special rules advisable. Wherever a Clearing House Ajssociation is functioning it will be found, us a unit to be leading the banking thought of the community. This is necessarily the fact, not only because the largest and most influential banks of the community are always members of the Association, but also because the continuous operations of the body, through its clearings and the periodical meetings of the Clearing House Committee and the Association, place the organization in an authoritative position with regard to local conditions. The large 'downtown Hank and the smaller though vital neighborhood" institution come into the Association on equal footing. What each gives to the Association in loyalty and cooperation it receives again in dividends of gratification over a responsibility accepted, as well as the knowledge that by its membership it has given to its own customers the last safeguard available for the protection of their funds.

Members of the Hammond Clearing House Association;

First National Bank Citizens National Bank First Trust & Savings Bank

Hammond Trust & Savings Bank American Trust & Savings Bank W. Hammond Trust & Savings Bank

Northern Trust & Savings Bank Standard Trust & Savings Bank State Bank of Hammond