0, in which year the
number of banking houses who settled their accounts with each other at the
"Clearing House" was forty-six (Gilbart's _History and Principles of
Banking_, p. 78). The Bank of England has never been a member of the
Clearing House, though it "clears on one side," _i.e._ its claim on the
clearing bankers is made through the Clearing House, but the claims of the
clearing bankers on the bank are forwarded direct to Threadneedle Street
twice or thrice daily. Nor did the banks in Fleet Street or at Charing
Cross belong to it. In 1858 the clearing of country cheques was added
through arrangements made by Lord Avebury, then Sir John Lubbock. The
"country clearing" is a great assistance to business, as it enables a
cheque drawn on the most distant village in England to be dealt with as
conveniently as a cheque on London. Of the forty-nine banks in London in
1844, twenty-six were connected with the Clearing House. At that time only
private banks were allowed to be members. In 1854 the joint-stock banks
made their way into that body, and in 1906 the numbers were one private
bank and eighteen joint-stock banks who joined in the clearing--nineteen
banks in all.

Practically at the present time every large transaction in the United
Kingdom is settled by cheque, that is, by a series of ledger transfers,
notes and specie being but the small change by which the fractional amounts
are paid. A large proportion of these transactions are arranged through the
operation of the London Clearing House. This is facilitated by the fact
that every bank in the United Kingdom has an agent in London.

The annual circulation shown by the London Clearing House is more than
L12,000,000,000. No one asks what stock of gold is held by the bank on
which the cheques are drawn, or what the bank itself keeps in reserve. The
whole is taken in faith on a well-founded trust. It is the most easily
worked paper circulation and circulating medium in existence. Like the
marvellous tent of the fairy Paribanou, it expands itself to meet every
want and contracts again the moment the strain is passed. (See the article
by R. H. Inglis Palgrave on "Gold and the Banks," _Quarterly Review_,
January 1906.)

If we add to the returns of the London Clearing House those of the clearing
houses in the large towns of England, Ireland and Scotland, and the
numerous exchanges which occur daily, and the large number which the
different offices of banks with a great