Volume 2 - ElectricCanadian.com

APPENDIX IX.THE BRANCH CLEARINGS SYSTEM.One of the problems created by the extension of branchbanking in a country of such vast distances as Canada has beenthe devising of a satisfactory method of adjusting the accountsof the various branches with each other. The need for this hasbeen feltthe more because of the statutory requirements ofthe monthly returns to the Government. It is true that inother countries, Great Britain in particular, the banks havelarge numbers of branches, but as these are not so far apart,advice of inter-branch entries can easily reach a centralpoint within a day or two at most, whereas in thiscountryweeks may elapse before similar advices can be receivedfrom branches in outlying districts. As a result the numberof entries which must perforce be outstanding at the endof each month, when the government returns are compiled,is necessarily very large, and it is the difficulty of dealingwith these incomplete transactions that creates the problem.When the customer of a bank in Halifax, N.S., deposits withhis bank a cheque or other item payable in the Yukon, or someother outpost of civilization which the mails may not reachmore often than once a week, it does not occur to him that hisbank has to make a monthly return to the Government showingthe position of its affairs, and that for this purposeit has toinclude such items under certain headings set out in the BankAct, long before it knows whether or not they have reachedtheir destination and been paid. A modern bank has at alltimes thousands of such incomplete transactions on its books,and hi order to avoid errors and protect itself, must dispose ofthem as rapidly as possible.When a bank is small, this is not a difficult matter. In