On January 17, 1889, the Cashiers from all the city's banks met in the boardroom of the Fayette National Bank to organize a clearinghouse to promote interbank settlements. The Lexington Clearing House was partially the result of a short-lived fiscal crisis in May 1888. This crisis caused a constriction in the money supply that slowed interbank settlements.
Under the proposed rules, the porters from each bank were scheduled to meet at twelve thirty in the backroom of R. H. Courtney & Company to exchange checks and drafts drawn on the other local banks. Previously porters traveled between banks with checks, ledger books and sacks of currency to "clear" accounts with other banks. These clearing rounds usually took over two hours. Later the meeting place was moved to the boardroom of the First National Bank.
During its first five years of operations, the Clearing House averaged twenty million dollars annually in settlements.
During the Panic of 1907, the restrictions of the amount of currency in circulation caused widespread hoarding of gold and banknotes. Lexington bankers agreed to issue certificates payable though the Lexington Clearing House to facilitate commerce. By the time these certificates were printed, the panic had subsided and they were never issued. During the Banking Crisis of 1933, the use of clearing house certificates was again considered, but with checks now widely accepted, the local banks decided not to issue these certificates. Below are the specimens for $2, $5 and $10 certificates.
On March 5, 1933, newly elected President Roosevelt declared a national bank holiday. This proclamation ordered all banks, including those in Lexington, to close until Thursday, March 9. In response to this crisis, the Lexington Clearing House began meeting twice daily to discuss the situation. On March 6th, in an emergency meeting in the Security Trust's boardroom, the Lexington Clearing House considered plans of issuing Clearing House Certificates to provide a medium of exchange as the currency supply died up. Meeting the next day at the First National Bank, all banks agreed to use checks instead. Businesses in Lexington began advertising that they would accept checks in lieu of cash. The Clearing House Association issued a statement "millions for credit, but not one cent for hoarding."
By 2000, the clearing house was discontinued with the electronic clearing of checks.
