. Introduction to the study of economics,. veagents, or corresponding banks, in the nearest clearing CREDIT. 273 house city, so that every clearing house performs thiswork of settling accounts for the banks of the adjacentterritory. Then the New York clearing house acts as acentral clearing house for the banks of the entire coun-try, since every important city bank corresponds withsome New York bank that is a member of the clearinghouse. In 1895 the total transactions of the clearinghouses of the country amounted to 151,111, New York clearing house effected 128,264,379,126of these t
. Introduction to the study of economics,. veagents, or corresponding banks, in the nearest clearing CREDIT. 273 house city, so that every clearing house performs thiswork of settling accounts for the banks of the adjacentterritory. Then the New York clearing house acts as acentral clearing house for the banks of the entire coun-try, since every important city bank corresponds withsome New York bank that is a member of the clearinghouse. In 1895 the total transactions of the clearinghouses of the country amounted to 151,111, New York clearing house effected 128,264,379,126of these transactions. The following diagram, takenfrom President Andrews Institutes of Economics,page 152, illustrates the operations of a national clear-ing system: — Providence New Orleans Chicago San Francisco ABC DEFGHI JKL MNO PQR STUVWX \i/\i/\!/\l/\^\4/\KM/ 1st Natl 2d Natl 3d Natl 4th Natl 5th Natl 6th Natl 7th Natl 8th NatlBank Bank Bank Bank Bank Bank Bank Bank Metropolitan New York Clearing House BanksChemical Stuyyesant Manufacturers. New YorkClearing House § 164. A bill of exchange, or draft, is a written orderby which the person who draws the bill orders a secondperson, the drawee, to pay a specified sum of money 18 274 PRINCIPLES OF ECONOMICS, to a third person. Such bills may be payable at sightor after a specified time. They are made payable toa specified person, but by indorsement mayexchange and be transferred to other persons. When this^^^* is done, a single bill may serve to pay sev- eral debts before the drawee is called upon to makefinal payment. Bankers are willing to buy bills of ex-change drawn by responsible persons upon their , they are willing to sell drafts to persons who wishto make payments in distant places. These drafts thebankers draw upon the banks with which they corre-spond in distant cities. Then the bills of exchange andthe drafts bought and sold in one city may be set offagainst bills and drafts bought and sold by correspond-ing ba
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