clearing house
    n 1: a central collection place where banks exchange checks or
         drafts; participants maintain an account against which
         credits or debits are posted

Clearing \Clear"ing\, n.
   1. The act or process of making clear.
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            The better clearing of this point.    --South.
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   2. A tract of land cleared of wood for cultivation.
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            A lonely clearing on the shores of Moxie Lake. --J.
                                                  Burroughs.
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   3. A method adopted by banks and bankers for making an
      exchange of checks held by each against the others, and
      settling differences of accounts.
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   Note: In England, a similar method has been adopted by
         railroads for adjusting their accounts with each other.
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   4. The gross amount of the balances adjusted in the clearing
      house.
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   Clearing house, the establishment where the business of
      clearing is carried on. See above, 3.
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CLEARING HOUSE, com. law. Among the English bankers, the clearing house is  
a place in Lombard street, in London, where the bankers of that city daily 
settle with each other the balances which they owe, or to which they are 
entitled. Desks are placed around the room, one of which is appropriated to 
each banking house, and they are: occupied in alphabetical order. Each clerk 
has a box or drawer along side of him, and the name of the house he 
represents is inscribed over his head. A clerk of each house comes in about 
half past three o'clock in the afternoon, and brings the drafts or checks on 
the other bankers, which have been paid by his house that day, and deposits 
them in their proper drawers. The clerk at the desk credits their accounts 
separately which they have against him, as found in the drawer. Balances are 
thus struck from all the accounts, and the claims transferred from one to 
another, until they are so wound up and cancelled, that each clerk has only 
to settle with two or three others, and the balances are immediately paid. 
When drafts are paid at so late an hour that they cannot be cleared that 
day, they are sent to the houses on which they are drawn, to be marked, that 
is, a memorandum is made on them, and they are to be cleared the next day. 
See Gilbert's Practical Treatise on Banking, pp. 16-20, Babbage on the 
Economy of Machines, n. 173, 174; Kelly's Cambist; Byles, on Bills, 106, 
110; Pulling's Laws and Customs of London, 437.