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banking 121 only 387. The nominal assets of these National Banks II. Laws affecting Banks and their Customers. aggregated $235,636,778. Upon the assets of 375 of these there had been collected on 31st October 1899, either from Apart from the question of the issue of bank notes the stockholders or from the liquidation of assets, 73’92 per modern tendency of legislation and legal decision alike cent. appears to favour the expansion and facilitate the operaThere is a large number of private bankers in the United tions of banking. . With regard to note issue, the legisStates, particularly in the central-western States. In lation which culminated in the Bank Charter Acts of 1899, 756 of these had total assets of over $87,000,000, 1844 and 1845 secured to the Bank of England the of which about $14,000,000 represented the investment or absolute monopoly of the note issue within the City of other holding of individual capital and about $65,000,000 London and a three-miles radius. Outside that radius, depositors’ funds. and within sixty-five miles of the City, there is a conThe New York Clearing House Association, instituted current right in banks, consisting of six or less than in 1853, is the foremost clearing organization in the six persons, established before 1844, and issuing notes at Clearing United States. The largest banks in the city that date; beyond the sixty-five-miles radius the privilege Houses. send representatives each morning to the clear- may be exercised by all banks established before 1844, ing building, where all the cheques received on and then issuing notes, who have not since lost their deposit during the previous day by each bank on other right to do so by bankruptcy, abandonment of business, Clearing House banks are exchanged. At precisely ten or temporary suspension of issue. According to some o clock, on the stroke of the manager’s bell, the clerks of authorities, the effect of 20 and 21 Viet. cap. 49, sec. 12 was the banks begin to pass from desk to desk, delivering to sanction the increase in the constitution of any bank packages of cheques to the settling clerk of each bank. issuing notes outside the three-miles and within the sixtyThe average length of time required for effecting this five-miles radius from six to ten persons without affecting exchange of cheques is nine minutes, and the cheques are the power to issue notes. This is the view accepted by immediately taken away to the banks on which they are Chalmers, Macleod, and Byles; while, on the other hand, drawn. The aggregates of cheques received, as per the Lord Lindley, Grant, Chitty, Douglas Walker, and footings made by all the settling clerks, is made to balance Cavanagh legard the constitution of such banks as limited against the aggregates, previously prepared, of all the to six persons. Consideration of the various statutes cheques which have been brought to the Clearing House. appears to support the view of the latter authorities, and Forty-five minutes usually suffices to ascertain the amount the rule as laid down above is believed to be the correct in which each bank has become a debtor or creditor with one. The increase in the number of Joint. Stock Banks the Clearing House. Each debtor bank then has until and the gradual absorption of the smaller and older 12.30 o’clock to turn in to the manager of the Clearing concerns have had the effect of diminishing the output of House in cash the amount of its debit balance, settlement notes other than those issued by the Bank of England, with creditor banks being made, also in cash, by 1.30 and, as exemplified by the case of The Attorney-General v. o clock. Tardiness as well as inaccuracies in listings or Birkheck, 12 Q. B. D. 57, it would seem impossible to devise footings subjects the banks to fines. During 1900 a any scheme by which the note-issuing power of an absingle cheque for $17,000,000 was cleared. In the sorbed bank could be continued to the new or amalgamated previous year one bank had a credit balance after body. making its day’s exchanges of $13,462,379.78. The The functions of a bank as what is somewhat incortotal clearings of the New York institution during 1899 rectly termed a bank of deposit, as opposed to a bank of were $57,368,230,771. The average daily clearings issue, are of more everyday importance. The term “ bank amounted to $189,961,029. The total balances for that of deposit” gives a mistaken idea of the real relation year between members were $3,085,971,370, the average banker and customer. So long ago as 1848 it each day being $10,218,448, involving the handling of over between was decided by the House of Lords in Foley v. Hill, 250,000 daily cheques. Similar Clearing House arrange- 2 H. of L. 28, that the real relation between banker and ments obtain in 71 other American cities. The total customer was that of debtor and creditor, not in any clearings of all these institutions were $38,526,000,000 in sense that of trustee and cestui que trust, or depositee and 1879 ; $56,175,000,000 in 1889; and $88,909,671,776 as had been formerly supposed and contended. in 1899. The New York Association was, in 1900, com- depositor, The ordinary process by which a man pays money in to posed of 63 banks and the U.S. sub-treasury at New his account at his banker’s is in law simply lending the York. Ninety-five banks have been members of the Asso- money to the banker; it fixes the banker with no fiduciary ciation since it was organized. The loss in numbers is due relation, and he is in no way responsible to the to failures, retirements, and consolidations. Of the first Baaker 25 members, 19 still remained in 1900. The Association customer for the use he may make of the money is composed only of National and State banks, but these so paid in. And as being a mere debt, a cus- customer. right to recover money paid in is barred provide clearing accommodations for 78 other banking tomer’s on the expiration of six years by the Statute of Limitainstitutions, trust companies, which do an individual tions, if there has been no payment meantime on account of deposit business, and smaller neighbouring banks. No principal or interest, and no acknowledgment sufficient to bank can become a member of the New York Clearing bar the statute (Pott v. Cleyy, 16 M. & W. 321). Such House, or is allowed to clear its cheques through the bank a state of affairs, however, is hardly likely to arise, inaso a member, until its Board of Directors by resolution gives permission to the Clearing House Committee to much as, in the absence of specific appropriation, earlier drawings out are attributed to the earlier payments in, as examine into its financial condition at any time without in ordinary case of current accounts, and so the items notice. The Clearing House issues every Saturday a on the the credit and debit side cancel each other. An statement showing the condition of all the banks by apparent exception to this system of appropriation exists a re Sg gates, averaged for the week, and giving surplus over required reserve. This statement is regarded as in cases where a man wrongfully pays into his own account monies held by him in a fiduciary capacity. In important by financial circles throughout the U.S. such circumstances he is presumed to have drawn out his as ln dicating bj’ comparison tendencies in the money own monies rather than those affected by the trust, and market. (T. L. G.) so long as the account is in credit, any balance will be S. IL — 16