Checks drawn upon out-of-town banks are, in this country, collected through so-called correspondents. Each bank enters into an arrangement with a few other banks, distributed throughout the country and conveniently located for the purpose, by which the correspondent bank agrees to conduct with it a checking account on which it will credit at par or at a stipulated discount the checks sent it for collection and debit checks drawn against such an account. A comparatively small number of such correspondents suffices, since certain banks in the larger cities, by making a business of such collections, conduct checking accounts with a large number of banks, and can thus make collections by mere transfers of credits on their own books or by the use of the local clearing house. The so-called reserve cities in this country constitute clearing centers for the territories contiguous to them, and New York, Chicago, and St. Louis, for the entire country. Checks received from correspondents and drawn against themselves are debited to the accounts of the customers who drew them and returned as vouchers in the same manner as checks received through the clearing house or paid over their own counters. Through this interchange of checks between banks and the conduct of checking accounts with each other, intermunicipal and international exchanges are conducted through the bookkeeping processes of commercial banks with the same ease and economy as are exchanges between people living in the same town. _6. Domestic Exchange_ The accounts of a bank with its correspondents are a record of the transactions of its customers with the outside world, the checks they receive as a result of sales to outsiders of merchandise, real estate or other property, or as a result of gifts by outsiders to them being credited on such accounts, while the checks they draw or the drafts they purchase in payment for merchandise, real estate or other property purchased of outsiders, or of gifts made to them are debited. When in a given period, say a day or a week, the receipts of the customers of a bank from outsiders, as a result of current or past sales and gifts, exceed the payments made by them as a result of purchases and gifts, its credit balances with its correspondents will increase, and under opposite conditions they will decrease. If the payments should continue in excess for a considerable period, the credit balances of a bank with its correspondents would be exhausted and some means of replenishing them would have to be found, and under the opposite conditions too large a portion of the bank's resources would accumulate with its correspondents and some means of withdrawing funds would have to be found.