Front Page Titles (by Subject) Advantages of the Cheque and Clearing System. - Money and the Mechanism of Exchange
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Advantages of the Cheque and Clearing System. - William Stanley Jevons, Money and the Mechanism of Exchange 
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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Advantages of the Cheque and Clearing System.
Returning to the subject of the bankers' Clearing Houses, it is to be remarked concerning the vast system of relations which now exists between English banks, that it has grown spontaneously, uninvented, unauthorized by the legislature, and only recognized by the judges when firmly established as a matter of business custom. No Act of Parliament has been passed to facilitate the operations of clearing, and it is only by an understanding between the banks, that the presentation of cheques and bills through the Clearing House, or their settlement by the payment of a balance, is regarded as legally valid.
The advantages of the system are evidently of enormous magnitude. All the larger payments are made with a minimum of risk, loss of time, trouble, or use of the precious metals. While the cheque representing a payment is travelling about the country, the money which it is transferring is reposing in the vaults of some bank, or rather, not being needed in the operation at all, is lent or sent out of the country, so that its interest is saved. We found in p. 165 that the loss of interest upon the metallic money now circulating or stored up in the United Kingdom, amounts to between four and five millions annually. If payments were now made by coin only, many times as much metallic money would be needed.
The security with which the payments are effected is also an element of importance. Specie when transmitted in large sums, is always a temptation to thieves, and has usually to be accompanied by one or more guards. Through the agency of banks, whether by crossed cheques or credit notes, the largest payments may be made with almost absolute immunity from risk. The cheques, bills, and other documents transferred in the clearing houses are, as a general rule, so crossed or endorsed as to be of no value to any one but the legal owners, and in any case are regarded by thieves as "duffer," with which they dare not meddle.