These paper representatives supply the place of a certain
quantity of gold; and, being much cheaper, a large portion of the
expense of a metallic circulation is saved by their employment.
172. As commercial transactions increase, the transfer of
bank-notes is, to a considerable extent, superseded by shorter
processes. Banks are established, into which all monies are paid,
and out of which all payments are made, through written orders
called checks, drawn by those who keep accounts with them. In a
large capital, each bank receives, through its numerous
customers, checks payable by every other; and if clerks were sent
round to receive the amount in banknotes due from each, it would
occupy much time, and be attended with some risk and
inconvenience.
173. Clearing house. In London this is avoided, by making all
checks paid in to bankers pass through what is technically called
The Clearing House. In a large room in Lombard Street, about
thirty clerks from the several London bankers take their
stations, in alphabetical order, at desks placed round the room;
each having a small open box by his side, and the name of the
firm to which he belongs in large characters on the wall above
his head.
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