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(Ebook) Java 1: Basic Syntax and Semantics Software Development by Poul Klausen ISBN 9788740316896, 8740316890

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0% found this document useful (0 votes)
10 views81 pages

(Ebook) Java 1: Basic Syntax and Semantics Software Development by Poul Klausen ISBN 9788740316896, 8740316890

The document provides information about various ebooks related to Java programming and software development, including titles by authors like Poul Klausen and Timothy Lethbridge. It emphasizes the importance of understanding Java's syntax and semantics for beginners and outlines the structure of the book series, which includes exercises and problems to enhance learning. Additionally, it discusses the use of tools like NetBeans for programming and the fundamentals of Java as an object-oriented language.

Uploaded by

smoutchicak4
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© © All Rights Reserved
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Poul Klausen

Java 1: Basic syntax and


semantics
Software Development
Java 1: Basic syntax and semantics: Software Development

1st edition

© 2017 Poul Klausen & bookboon.com

ISBN 978-87-403-1689-6

Peer review by Ove Thomsen, EA Dania

Contents
Foreword 6
1 Introduction 8
2 Hello World 11

2.1 NetBeans 11

2.2 The source code 15


2.3 Run the program 16

2.4 The NetBeans project 17

2.5 Gedit 19

2.6 Something about comments 21

2.7 Example: Kings 22

Exercise 1 23

Exercise 2 23

3 Commands and console programs 24

3.1 Commands 24

3.2 Example: PrintAddress 27

Problem 1 28

3.3 Console programs 29

Problem 2 32

4 Variables and data types 33

Exercise 3 38

4.1 Operators 38

Exercise 4 44
Exercise 5 45

4.2 Literals 46

4.3 Objects 49

Exercise 6 59

Problem 3 59

4.4 Example: Cubes 63

Exercise 7 65

4.5 Arrays 67

Exercise 8 71

4.6 Example: CupProgram 72

4.7 Multidimensional arrays 76

Exercise 9 78

5 Program control 79

5.1 The if statement 79

Exercise 10 81

Problem 4 82

Problem 5 83
5.2 do and while statements 84

Exercise 11 85

Problem 6 87

5.3 The for statement 88

Exercise 12 92

Exercise 13 92

Problem 7 94

5.4 The switch statement 94

Exercise 14 96

5.5 Return statement 97

5.6 Break and continue 97

Problem 8 101

Problem 9 102

6 ArrayList 104
7 Comparison and sorting 107
8 Files 114

8.1 Text files 114


Excercise 15 118

8.2 Serialization of objects 119

Exercise 16 121

9 Final example 123

9.1 Design 126

9.2 Programming and test 130

Appendix A 131
Foreword
This book is the first in a series of books on software development.
The programming language is Java, and the language and its syntax
and semantics fills obviously much, but the books have also largely
focus on the process and how to develop good and robust
applications. The subject of the current book is an introduction to
the programming language Java with an emphasis on basic language
syntax and semantics, but it is also a book about what programming
in general is and how to practically write and test simple programs.
The book requires no knowledge about programming or the
language Java, and the goal is to show how to get started writing
computer programs. After reading the book and worked through the
book’s exercises and problems, the reader should be able to write
simple console applications in the language Java.

As the title says this series of books deals with software


development, and the goal is to teach the reader how to develop
applications in Java. It can be learned by reading about the subject
and by studying complete sample programs, but most importantly by
yourself to do it and write your own programs from scratch.
Therefore, an important part of the books is exercises and problems,
where the reader has to write programs that correspond to the
substance being treated in the books. All books in the series is built
around the same skeleton and will consist of text and examples and
exercises and problems that are placed in the text where they
naturally belongs. The difference between exercises and problems is
that the exercises largely deals with repetitions of the substance that
is presented in the text, and furthermore it is relatively accurately
described what to do. Problems are in turn more loosely described,
and are typically a little bigger and there is rarely any clear best
solution. These are books to be read from start to finish, but the
many code examples, including exercises and problems plays a
central role, and it is important that the reader predict in detail
studying the code to the many examples and also solves the
exercises and problems or possibly just studying the recommended
solutions.

All books ends with one or two larger sample programs, which focus
primarily is on process and an explanation of how the program is
written. On the other hand appears the code only to a limited extent
– if at all – and the reader should instead study the finished program
code perhaps while testing the program. In addition to show the
development of programs that are larger than the examples, which
otherwise is presented, the aim of the concluding examples also is to
show program examples from varying fields of application.

Most books also ends with an appendix dealing with a subject that
would not be treated in the books. It may be issues on the
installation of software or other topics in computer technology, which
are not about software development, but where it is necessary to
have an introductory knowledge. If the reader already is familiar
with the subject, the current appendix can be skipped.
The programming language is, as mentioned Java, and besides the
books use the following products:

NetBeans as IDE for application development

MySQL to the extent there is a need for a database server (from


the book Java 6 onwards)

GlassFish as a web server and application server (from the book


Java 11 onwards)

It is products that are free of charge and free to install, and there is
even talk about products, where the installation is progressing all by
itself and without major efforts and challenges. In addition, there
are on the web detailed installation instructions for all the three
products. The products are available on Windows and Linux, and it
therefore plays no special role if you use Linux or Windows.

All sample programs are developed and tested on machines running


Linux. In fact, it plays no major role, as both Java and other
products work in exactly the same way whether the platform is one
or the other. Some places will be in the books where you could see
that the platform is Linux, and this applies primarily commands that
concerning the file system. Otherwise it has no meaning to the
reader that the programs are developed on a Linux machine, and
they can immediately also run under Windows unless a program
refers to the file system where it may be necessary to change the
name of a file.
Finally a little about what the books are not. It is not “how to write”
or for that matter reference manuals in Java, but it is as the title
says books on software development. It is my hope that the reader
when reading the books and through the many examples can find
inspiration for how to write good programs, but also can be used as
a source collection with a number of examples of solutions to
concrete everyday programming problems that you regularly face as
a software developer.
1 Introduction
A computer program is a series of commands executed in a certain
order, and together they solve a specific task. A program is written
as a text document that contains all the necessary commands. This
document is called the program code or source code. The individual
commands must be written in a very precise way for the computer
to understand them, and it is here that programming languages
comes into the picture. A programming language lays down precise
rules for how the commands should be entered. There are many
programming languages, and although they are different, each with
their advantages and disadvantages, the similarities outweigh the
differences, and once you have learned a language, it is easy to
learn the next. The following are used throughout the Java
programming language, which is a widely used languages on many
platforms. How the individual commands and orders exactly must be
written is called the language’s syntax. What the individual
commands are doing or performing is called the language’s
semantics.

As mentioned above, a program is written as a text document (in


practice several or many), and it is simply a document of commands.
Commands are also called statements. These commands or
statements being only text, the machine can not immediately
perform the comands, but they must be translated into an internal
format that the computer understands. This process is called
translation or compilation and is performed by a program that can
convert statements written in a particular programming language to
the computer’s internal commands. The program is usually called a
compiler. During the translation the program is checked for errors,
and if there are errors, you get an error message, and the errors
must then be corrected before the program is translated again. Not
all errors are found during translation, but only syntax errors, which
covers the issue where a statement is not written in accordance with
the programming language’s rules. A translated program can easily
contain errors, for example a miscalculation.

To write a program you must of course learn the programming


language that is selected, but also you must learn how the solution
of a task can be formulated by statements in the language. It is the
latter that is the most difficult, and there is rarely a clear solution. A
solution of a problem by means of a program is also called an
algorithm. Programming is largely a matter of writing algorithms,
something that I will return to several times.

When you have to write software, you need a tool that can be used
to enter the program code, and in principle you could use a simple
input program (a text editor) and then the compiler, but in practice
you will always use a specific development tool, as it makes the job
much easier. In the following I will everywhere use NetBeans, a
development tool for a wide variety of tasks, including writing code
in Java. It is an integrated software package, which includes all the
tools necessary for the development of a number of different types
of programs.

Java is an object oriented programming language. The fundamental


architectural element in a program is a class, and from the
programmer’s point of view a Java program consists of a family of
classes that collectively define all the application’s features and
functionality. Writing a program is thus to define – design – and
write the code to the program’s classes. Nothing in Java exists
outside of a class. A program will also always apply other classes
that are not written by the programmer, but classes coming from the
Java API, and thus is available for the programmer as finished
components. One of the program’s classes have a special role as the
program’s “entry point” and the place where the program starts and
this class should be written with a special naming, but it is almost
the only formal requirements for the architecture of a Java program.

Java is technically both a platform and a programming language.


Seen as a programming language, it is a high-level language, which
is characterized by

it is a simple language

it is an object-oriented language

the language is architecture neutral

Java programs are portable

it supports development of multithreaded applications


it supports the development of distributed applications

it supports the development of programs with strong security

development of effective programs

development of robust programs

development of maintenance-friendly and dynamic programs

All Java code are as mentioned written as plain text files – which
filename must have the extension .java – and then these files are
translates to .class files. The translation is performed by the Java
compiler called javac. Java class files do not contain machine code
for a particular platform, but rather so-called bytecode, which is the
machine code for the Java Virtual Machine, which is a virtual
computer, commonly referred to as VM or JVM. The program
(consisting of a set of class files) can then be carried out by the
virtual machine, which is a program that is running on a particular
machine. Since Java and thus the virtual machine is available for
many different operating systems, the same class files can run on
many machines for example Windows, Solaris, Linux, etc.

With a platform wee understand the hardware and software, where


a program is running, and in relation to an usual PC you can think of
Windows, Linux and Mac machines. Compared to this is a Java
platform a software-only solution that runs on a different hardware
based platform. The Java Platform consists in principle of two parts:

JVM, the Java Virtual Machine


an API, the Java Application Programming Interface

where the last is a large collection of ready to use software


components that a program can use. They are grouped into libraries
called packages, which consists of classes and interfaces.

The result of the above technology is that Java programs, in


principle, is a bit slower than programs translated into an actual
physical machine. However, since Java was born there has been an
incredible number of improvements and optimizations of both the
compiler and the virtual machine, so the difference in performance is
negligible if at all measurable.
2 Hello World
The subject of this chapter is to show how to write and run a Java
program using NetBeans and the aim is solely to get started. There are
several kinds of programs, or you can say that the programs can be
categorized in several ways, but in the first books I will look at three
types of programs:

commands, which is a program that is typically performed from a


command window (a Terminal ) where you enters the program’s
name that may be followed by one or more arguments

consol applications, which also is performed at a command prompt,


but here the program runs in a dialogue with the user, where the
user must enter values when the program is executed

GUI-programs, where the program opens one or more windows with


components as buttons and input fields used by the user to interact
with the program

This division is only for practical reasons, as I will sometimes


characterize the program examples in relation to this, but common to the
three types of programs is that they are standalone applications that run
on a single machine and without using resources on other machines.

I’ll start with the classic Hello World program, a program that prints a
text on the screen. It is an example of a command, but it is also an
example of a program that has absolutely no practical interest. Although
it is a simple program, it will nevertheless treat a number of basic
principles that apply to all Java programs.
2.1 NetBeans
As mentioned a Java program is written as text files, which will then be
translated. When the files are translated without errors the program can
be executed by the virtual machine. In practice is always used a
development tool, which is a program or software package that
integrates all the functions that a developer needs. Such a tool is usually
called an IDE (Integrated Development Environment), and there are
several, but I will everywhere use NetBeans, which contains everything
that is needed, and the following requires that both Java and NetBeans
are installed on the machine. Do not have it, you can start by reading
Appendix A which explains how to download and install both Java and
NetBeans.

To write the first Java program, open NetBeans and create a new
project. In the menu, choose

File | New Project (see below)

A NetBeans project creates all the necessary files required to develop


and test the program and eliminates a variety of configurations that are
otherwise necessary. Using NetBeans you can build and run the program
just by clicking the menu. To create the project, you must note that in
this case,

Java is marked in Categories

Java Application is selected in Projects

but otherwise I have not done anything in the first window.


When you then click Next you get the following window:

Here I:
Entered HelloWorld as Protect Name

Selected /home/pa/doc/noter/note01 for Project Location

Regarding the latter, it is just a question that I have decided that the
project should be created in the /home/pa/doc/notes/note01 direcory. I
have also decided that the project should be called HelloWorld. NetBeans
will then create a folder

/home/pa/doc/noter/note01/HelloWorld

and all project files are placed by NetBeans in this folder. You should
note that there is a checkmark in the Create Main Class, which is
important.

When you then click Finish, the project is created and NetBeans displays
multiple windows:
Projects window, where all the project’s components are organized in
a hierarchy

Source Editor, where there is an open file called HelloWorld.java

Navigater, which can be used to quickly find a specific item

Source Editor contains the program’s code, and as you can see,
NetBeans automatically creates a skeleton for a program. Actually, it’s a
full-fledged program – it performs nothing not yet. The program code
consists of Java statements and comments. Comments are removed by
the compiler and does not affect the finished program. They are inserted
solely for the sake of us people who should read and understand the
program code.

2.2 The source code


Below I’ve shown the finished program after I have changed or removed
the comments that NetBeans has generated and written a single
statement:

There is only one comment back, which is at the top and says something
about what the program does. The rest of the code is Java statements. A
Java program consists of classes, and in this case there is one class
called HelloWorld and thus has the name that I chose as project name.
The class consists of a method called main(), which has a single
statement – not created by NetBeans, but as I entered. It is a statement
that prints a text on the screen.

The code is simple, and so far you just accept that it should be written,
as shown above, but there is however a few things that you should note.

Java is case-sensitive, so everywhere you must distinguish between


uppercase and lowercase letters.
Every Java program consists as already mentioned by at least one class
here called HelloWorld. A class consists of variables and methods. In this
case, the class has only one method called main(), which is the method
that is called when the program starts. A method consists of statements
that can be perceived as commands that perform one or other on the
machine. That a method is called means that the methods statements is
performed. Note that the method main() must be prefixed by the words
public static void. The explanation will follow. In this case, main() has
only a single statement, that write a text on the screen.
System.out.println() is actually a method in a class PrintStream, that
among other things, represents the screen. When the program is
running, nothing happens than the println() statement in main() is
performed that prints a text on the screen.

Note that in Java, each statement ends with a semicolon – above there
is a semicolon after System.out.println(). It tells the compiler where a
statement ends.

In Java classes are grouped in so-called packages. A class’s full name


consists of the package that the class it is grouped under, as well as the
class name. NetBeans automatically define a package for a program that
is the application name written in lowercase, and the first statement is a
package statement indicating the class’s package. A package statement
must be the first statement in the file that contains a class, but can be
prefixed by a comment. Note that in Java you generally has to place
each class in its own file, but more on that later.

2.3 Run the program


When the program is written as above (without errors), you can from the
menu in NetBeans choose

NetBeans will automatically translate the program, and if it not contains


errors, the program will be performed:

If the program contains errors, the result could be the following:

The program then is not performed, and the translator instead offers an
error message, and the error must then be corrected before trying to run
the program again.

2.4 The NetBeans project


If you open Files you can as shown below find the class file, which is the
translated program:
HelloWorld.class is an example of a complete Java program that can run
on a specific machine. Apparently, the program is tied closely to
NetBeans and performed using NetBeans, but it is not the case. In the
menu in NetBeans choose

and the program is translated again, and if you opens Files you will
discover that that there is created another folder called dist, which
contains two files (see below). Here is HelloWorld.jar a package (actually
a compressed zip file) containing the program files – only the translated
class files and other ancillary files that are necessary for the program to
run. In this case, there are actually only two.
If you copy the file HelloWorld.jar to a folder – for example temp – and if
you open a Terminal, stand in this folder and perform the following
command:

the program is performed:

Here the command java is a message to Linux to start the Java runtime
system and execute the program HelloWorld.

2.5 gedit
Above I have written and performed a Java program using NetBeans,
and in the following, all programs will be developed in this way.
NetBeans is a large and complex program, and until this place, you have
seen only a very small fraction of what the program can. The program is
relatively user-friendly, and I will not give any general description of the
program and its possibilities, but I will mention important features as I
need them in the individual examples. NetBeans is similar to all other
IDEs for software development, so the forces you use to learn more
about the program, is definitely not wasted. Using an IDE for developing
applications provides in practice such large benefits that it makes no
sense to develop programs in other ways, but in principle you can, and I
will in this section show how to write the program Hello World without
NetBeans.

I start by creating a directory named Hello in my home directory. Then I


open gedit and enter the code below. It is important to enter the code
exactly as shown below, and especially you should be aware that it is
case-sensitive. You should also be aware that you do not insert extra
spaces. Note also that the text is displayed in several colors. This is
because gedit know Java, and thus highlights reserved words.

When the program is written, I save it in the folder Hello and call it
HelloWorld.java. Again, please note upper and lower case and the
filename must have the extension java written in lower case. Then I
open a Terminal and set the current directory to the folder Hello. Here I
performs the following command:

javac is the name of the compiler, and the result is that the program is
being translated, and creates a file with the translated program called
HelloWorld.class:

Then you can execute the program as follows:

As mentioned, I practically always use NetBeans, and even if the above


is not of great practical interest, it may nevertheless serve to illustrate
what NetBeans is doing. It is basically an advanced editor program that
help you when you enter code and point out incorrect entries. Moreover
NetBeans calls both the javac compiler and the runtime system java.
NetBeans will provide support to the programmer and support the
development of large and complex applications. Therefore even small
NetBeans projects contains many directories and files, and it can hide
what really is the program itself. This example can show how little it
really is.

2.6 Something about comments


As you have seen, NetBeans inserts comments in the program’s code.
They will as mentioned be ignored by the compiler and are inserted for
the sake of the people who must read and understand the code.

There are three types of comments. The first starts with /* and ends
with */ and everything in between these character combinations is
considered as a comment, for example

which is the comment that NetBeans inserts at the beginning of a new


source file. Another kind of comments start with the characters /** and
ends with */, for example

Again, everything between the start and end character combinations is


comments, but there can be inserted special symbols that are
interpreted by a tool to generate html documentation of the program
code, but about that later. The last type of comment has the form
That comment can be inserted anywhere, and all after the characters //
to the end of the line are considered as a comment.

This is the syntax for inserting comments in the code, but a whole other
thing is what you should write. Also I come back to that later, but
generally you have to write what you think might be valuable at a later
reading of the code. What it is, is certainly not unique, and it can be
good inspiration to examine what comments others have inserted into
programs.

2.7 Example: Kings


The example is a program called Kings, in principle it is written in the
same way as HelloWorld, but the program prints the following text:

The final code is shown below:


The only difference compared to HelloWorld is that this time there are
several System.out.println() statements.

Exercise 1
Write a program, as you can call Digits, that on the screen prints the
following table:

Exercise 2
Write a program that you can call Label, that prints your name, your
address and your email address, for example
3 Commands and console
programs
In the previous section I divided the programs into three categories,
and in this chapter I will look at commands and console programs. In
principle there is no big difference, and the division alone has to do
with how the user is transferring data to the program. Both
HelloWorld and the example Kings from the previous chapter are
examples of commands.

3.1 Commands
Every Java program must have a main() method that has the
following signature:

For the moment you should ignore the meaning of the words public,
static and void and just accept that they should be there, but the
main() method is the place where the program starts. After the
method name is a parameter in parentheses, indicating arguments
from the command line that can be transferred to the program.
Consider the following program:
args is an array, as I explains later, but the arguments that are
transferred on the command line, are in the program referred to as

and so on. An argument is a text string, and arguments are


separated by spaces. If, for example you copy the file Command.jar
to the temp folder, the program can be perform as follows:

There are two arguments, called respectively Svend and Knud, and
the program prints the two arguments of the screen. If you execute
the program in the following way:
the result is the same. This time there is three arguments, but only
the first two are used in the program. If, however, the application
performs without having two arguments, you get an error:

The reason is that the second argument does not exist, and therefore
fails the statement:

The example shows, what I will understand by a command. Another


question is how to test the application from NetBeans when you has
to transferre arguments. This can be done through the menu to
choose

Here you must select the category Run, where you will be able to
enter the arguments:
Note that contains the argument spaces, it is necessary to specify
them in quotes.

3.2 Example: PrintAddress


The following program will print the name and address of a person,
but so that the values to be printed are transferred on the command
line. The program is therefore a command. The program is called
PrintAddress, and threre must be transfered four arguments on the
command line. Arguments on the command line are separated by
spaces, and if an argument contains spaces, it is necessary to put the
argument in quotes. Then the runtime system will perceive it as one
argument. An example of running the program could, for example be
as shown below:
For writing the program I have in NetBeans created a project called
PrintAddress. The program code can then be written as follows:

The statements in the main() method is all System.out.println()


statements that prints a line on the screen. The first only prints a
text, while the second prints a blank line. The third prints a text
followed by the value of args[0], which is the person’s name. Note
particularly the plus operator, which means string concatenation,
wherein the text is added after the other. The last two
System.out.println() statements works in principle in the same way.

A program like the above are not robust, as it will fail if not
transferred the right number of arguments. You should also note that
the program does not test the arguments (which incidentally is also
not so easy), but simply prints the arguments as they are.

Problem 1
You should write a program for a library that can print a recall of a
book. When the program is executed, you must on the command line
transfer five arguments:

borrower’s name

borrower’s address

borrower’s zipcode and town

ISBN of the book

the books title

An example of an execution of the program might be:


3.3 Console programs
Compared to a command a console program (in this books) is a
program that performs a dialogue with the user, where the user must
enter data.

Above I have shown a program that prints the name and address of a
person when the values are passed as arguments on the command
line. Below is the same program, but this time the user must enter
the values during running the program. There is thus a dialogue with
the user.
As you can see, the code has been substantially larger, and there is
also new things that has to be explained.

To enter text, you must have an object that represents the keyboard
and provides a service available for entering text. In addition I apply
a Scanner that use the objekt System.in that just represents the
keyboard. Scanner is a class that is not readily available, and
therefore there is added an import statement that refers to the
package containing the class Scanner. in is then an object that can
be used to enter a text. The next line prints a text on the screen,
telling the user to enter the name. It happens with
The text that the user enters, must be stored somewhere, and for
that purpose a variable is used. Variables are considered in the next
chapter, but a variable is a place where you can store a value. An
example could be the statement

Here, the text that the user enters is stored in the variable name. The
next statements are identical in principle and are used for entering
other values. The last statements are used to print the result and is
similar in principle to the previous version of the program, but the
arguments args[0], args[1], … are replaced with variables. If you run
the program (from NetBeans), the result could be as shown below:

Today it is rarely – if ever – developing console applications, and


when is a need for a program with a user dialogue (and it is of
course often), you write a Windows or GUI program. Console
programs may, however, for testing and learning be useful, and
therefore it is excellent to know how to write a simple console
program.
Problem 2
You must solve the same task as in problem 1, but instead of
transferring values as arguments on the command line, you must
enter information about

borrower’s name

borrower’s address

borrower’s zipcode and town

ISBN of the book

the books title

when then the program is running in a dialogue with the user. The
program should print the same recall as in problem 1.
4 Variables and data types
Programs has to deal with data, and for that they need a way where
to save or store data. To that purpose programs use variables that
are items, where the program may store a value. You must note that
I have already used variables associated with data entry. A variable is
characterized by

a name

a type

operators

Variables must have a name, so you can refer to them in the


program. Java is similar to other modern programming languages
relatively flexible in terms of naming variables, but the following shall
(should) be met:

a variable name must start with a letter, a dollar sign ‘$’ or an


underscore ‘_’

a variable name should always start with a lowercase letter, and


one should avoid ‘$’ and only occasionally use ‘_’

then have to follow any number of characters consisting of letters,


digits, $ and _

a name must not contain spaces


the name of a variable must not be a reserved word, that is a
word that has specific meaning in Java

In addition a variable name should tell something about what it is


used for. Use whole words instead of cryptic abbreviations. It will
make the code easier to read and understand. If you have long
names consisting of several words, you can increase readability by
letting a word (except the first) start with a capital letter such as
customerAddress. Alternatively, is there anyone who writes
customer_address, but generally avoid very long names.

If you do not break these rules, you have never problems with names
of variables, but some other characters are actually allowed.

Variables has a type that indicates which values can be stored in


them, and how much a variable is filling in the machine’s memory.
The type determines simultaneously the operations that can be
performed on a variable, that is what to do with it.

Variables must be created or declared before they can be used. This


is done by a statement of the form:

type name = value;

That is, to write the type first, then the variable name and finally
assign it a value, for example
Here is declared a variable called number, that has type int and the
value 23. Variables should always be initialized, else you can get a
translation error.

When variables must be declared, it is because the compiler must


allocate space in the machine’s memory, and that when the name
appears somewhere in the code, the compiler must know what the
name mean to check if the variable is used in the proper context. If
not, the compiler will come up with an error message. The program
can only be used when it is compiled without errors.

Java has the following built-in primitive or simple data types:

byte, which is a data type for an integer. A variable occupies 8


bits, and may contain values from -128 to 127 (both inclusive).

short, which is a data type for integers. A variable takes up 16 bits


and may contain values from -32,768 to 32,767 (both inclusive).

int, which is a data type for an integer. A variable occupies 32 bits


and can contain values from -2147483648 to 2147483647 (both
inclusive). It is the default type for an integer.

long, which is a data type for an integer. A variable occupies 64


bits and can contain values from -9,223,372,036,854,775,808 to
9223372036854775807 (both inclusive).

float, which is a data type for floating point numbers and can thus
be used for decimal numbers. A variable occupies 32 bits and can
represent decimal numbers with 7–8 significant digits. It is
important to note that the value is always a rounded result.
double, which is a data type for floating point numbers and can
thus be used for decimal numbers. A variable occupies 64 bits and
can represent decimal numbers with 14 significant digits. It is
important to note that the value is always a rounded result. This
type is the default type for a floating point.

boolean, which is a data type with only two values: false or true.
The type is important to be able to write conditions and is used
specially for program control.

char, used for characters, and a variable of the type char takes up
16 bits. Values are numeric codes with values from 0 to 65535
(both inclusive), and each character is represented by a numeric
codes. For example has a large A the code 65.

The smallest unit you can use on a digital computer is a bit, and the
whole computer’s memory consists of a number of devices that can
store one bit. One bit can represent one of two values, commonly
referred to as 0 and 1, and the contents of the computer’s memory is
always a large number of 0s and 1s. In practice, you cat not directly
refer to the individual bits, but they are organized in groups of 8 bits,
and such a group is called a byte. A byte is a pattern consisting of 8
bits, for example

What that means depends on how a program uses the pattern. Since
each of the 8 places in a byte, may have two values, a byte therefore
can represent different values. As is clear from the above the simple
data types are different in how many bits they use to a variable of
that type. For example uses an int 32 bits (or 4 bytes), and this
means that one can represent different integers that is interpreted as
the numbers starting from -2147483648 to and including
2147483647.

In addition to the eight primitive data types mentioned above, there


is, as already mentioned a type String which can contain any text
string. For example you can write

The statement creates a variable of the type String. You should note
that you specify the value in quotes. The type String is not a primitive
type, but it is instead a class, but for now you can ignore it, and
variables of the type String is used in principle in the same way as
other variables.

Primitive variables are assigned a default value of the compiler. The


type boolean have the default value false, a char has a space as the
default value, while the other primitive types have the default value
0. A String (which is not a primitive type) has no value, which is
defined as null.

As an example, the following statements creates three variables, all


of the type int:
The first two variables are initialized with numbers, while the last is
initialized to the sum of the first two. The last statement prints the
values of the three variables.

Consider as an example the following program, which is a command


to be performed on the command line with three arguments which
must be integers, and the program prints the sum of the three
numbers:

If you execute the program with arguments 13, 17 and 19, the result
will be:

Arguments for a command or data that is entered into a console


application, has always the type String, and they can not be directly
used in the calculations. It is first necessary to convert the values
Other documents randomly have
different content
workmen in thirty years, workmen who were never highly paid and
who trained themselves to do these things.
They meet every year, the eight thousand members, and vote on the
price of bread. Sometimes it is one cent higher than the commercial
rate, but their dividends more than cover this.
In Brussels is the famous "Maison du Peuple," the House of the
People. It, too, began with a small bakery, employing two men and
turning out five hundred and fifty-two loaves the first week. Today
the "Maison" has twenty-five thousand members, two great
bakeries, six warehouses, four butcher shops, twenty-five grocery
stores, and numerous shops where various articles are made.
This "House," standing on Rue Joseph Stephen, cost $375,000 and
was paid for by the Brussels workingmen out of their coöperative
funds. The café, seating eight hundred people, is an animated place;
every one seems content. The office of the savings bank is doing a
rushing business, women and children bringing in the savings of the
family for the week; the committee rooms are full of workmen
planning some new enterprise. In the evening the lecture hall or
theatre is crowded, the two thousand five hundred seats all taken, to
see a play produced by an amateur company, all members of the
"Maison."
All this, and more, in the form of coöperation. In 1907-8 the
"Maison" made a profit of $134,000; of this about three-quarters
was distributed as personal dividends to shareholders. The rest was
spent on social benefits and a reserve fund.
In Belgium, then, you find all the coöperative activities united in
each city under one general management. It includes groceries and
clothing, medical aid, insurance, savings bank, clubhouse privileges,
lectures, libraries, entertainments.
There are one hundred, and sixty-one distributive societies with
119,581 members; sixteen productive societies with 1,583 members.
The Productive Societies include weaving, printing, cabinetmaking,
tobacco and cigars, hardware and bakery. The total coöperative
business is $6,800,000 a year, a large amount when you consider
the diminutive size of the country and the poverty of the people.
The fact that in all of these countries coöperation is growing at a
rate of increase of 20 per cent to 40 per cent proves that a need for
it exists.
Now, Uncle Sam, we are starting these coöperative stores here, and
the question with us and the one we are constantly asking, is what
protection are we going to have from the trusts and monopolies
which can, if permitted to do so, destroy us with low prices at any
point, while they rob the people at some other point, to make up the
losses, while ruining us. What we must have is legislation, to protect
us, and if we can get it into this bill, I want it.
Uncle Sam: I do not see how any phase of what you have said can be
governed by a financial and banking bill. It is true, that incidentally
you may do a banking business in your coöperative societies. So far
as you do, you ought to conform your practices with whatever we
may decide upon in the way of banking laws. So far as you buy and
sell, or manufacture, you are engaged in production and commerce,
and not in the banking business. Under the circumstances, you are
entitled to an answer, although a little aside from the subject in
hand. Let me tell you, however, right here, and you may set it down
as settled. That, if you start any coöperative associations for the
production or distribution of goods of any kind, you shall have a
square deal. I have been waiting patiently, but getting ready all the
while, to put some of the managers of these monopolies in jail. You
can take my word for it. You are going to have equal opportunities
under the operation of just laws, if there is any way of giving them
to you. And if your Uncle Samuel understands the situation, I think
there is. Unfair chances, special privileges and monopolies cannot
naturally and properly have any place in a country where all men are
born free and equal under the law. The fact is, the law is sufficient
now, but there is not a public sentiment strong enough to compel
the courts to put men in jail for robbing their fellows through the
forms of law; even if it is known that the laws by which they rob
their fellows or are permitted or enabled to rob their fellows were
passed expressly for that purpose. That is the fault of the times
through which we have just passed. The time is now at hand when
all this is to be reversed. The people have come to realize and
appreciate the fact that it is ethically, morally, and justly speaking, as
wrong to rob a man through the forms of law, as for the bully to fell
a man in the streets and pick his pockets. The people are forming
new ideals, and the judges are getting new ideas. These new ideals,
and these new ideas, will soon handcuff and incarcerate the
business culprits, the business bullies, just as the ancient ideals of
the people, and the old ideas of the judges have, in the past, put the
physical bully and the material thief in the dark, dank dungeon. I
have altogether too many men, who are always inquiring how near
they can go to the jail door and not get in. You mark my word, I am
going to push some of them in very soon now. What I want is a
nation of men who are imbued with a sense of justice and fair play
in business; and who will regard business relations as moral
obligations, and paramount to the technical letter of the law. When
that day comes, one banker will not want his fellow-bankers to carry
his reserves for him. The principle is the same, whatever the relation
of men may be; therefore, you can take my word for it, that all
those who want to coöperate to secure a greater degree of the
profits of their labor, a greater degree of justice among their fellows,
will find Uncle Samuel coöperating with them, in the preparation and
execution of those laws which will make for a juster Government.
Since this Government springs from the people, and belongs to the
people, no part of the people, certainly no small part of the people,
should be able to take unfair advantages and undue profits, by any
legalized special privileges, or by the power of monopoly. I say to
you now, that these should be, and will be destroyed, and that all
men shall be equal before and under the law. This is the predestined
purpose of this Government, and it will never come into its
fulfillment until you learn, my boys, that you are your brother's
keepers.
Mr. Merchant: Uncle Sam, that's pretty good preaching; but how are
you going to apply it to this banking question?
Uncle Sam: Did not Mr. Laboringman just appeal to me to find out
whether coöperative societies were going to have a fair show? I
have just told him "Yes," and I intend they shall have it, and I know
of no better place to begin than here and now. I am going to
construct two or three pieces of machinery—a guillotine for the
monopolies, and an electric chair for special privileges, and concoct
a barrel of anesthetics for stealthy, statutory stealing.
Mr. Lawyer: But all this kind of legislation must come under the
sphere of the Sherman Anti-Trust Law. I think no one will contend
that any aspect of coöperation, as represented by Mr. Laboringman,
should be incorporated in our banking bill.
Mr. Banker: I agree with both Mr. Farmer and Mr. Lawyer, that we
cannot make any provision for it at this stage of its development in
this country; but who shall prophesy about a movement that has
spread over the world, as this has, and is now growing at such a
rapid rate? It is estimated that at least ten million in Great Britain
are interested in it; more than five million in Germany, and that the
outstanding coöperative investments in Continental Europe must
exceed $5,000,000,000 by this time. Of course, these figures mean
some banking sooner or later, in this country, when the movement
once gets under way.
Mr. Farmer: Yes, I agree to that, but any attempt on our part at this
time to legislate in advance, would do more harm than good.
Mr. Laboringman: That is probably true, as it might interfere, as you
say, with the movement. All I ask then, is that we have a fair field,
so that we can develop along natural lines, and be protected in the
exercise of our mutual coöperative rights. I thank you, gentlemen,
for giving me, and my particular cause, so much of your time.
Uncle Sam: Mr. Laboringman, your cause is their cause. Your cause is
my cause. Your cause is our cause. Your cause is the cause of
humanity. The principles upon which your cause rests, pushed to
their logical conclusion, will secure social and industrial justice.
There are many who have taken millions, yes, hundreds of millions,
through the forms of law, but without any ethical right whatever.
From them these millions will be taken away in time, through the
forms of law; through the power of taxation by progressive income
and inheritance taxes, and the injustice of today will be righted by
the justice of tomorrow.
Mr. Banker: Uncle Sam, you have suggested a programme outside of
banking legislation; but I must confess incidental to the cause
presented by Mr. Laboringman.
Mr. Farmer: Gentlemen, we have stayed longer tonight than on any
previous night, and I must go now. So, good night.
Uncle Sam: Mr. Farmer has forced an adjournment.

THIRTEENTH NIGHT
THE CLEARING HOUSE
Uncle Sam: We are on the very last lap tonight, as I understand the
situation. We have had the Standard of Value, Money, Currency,
Exchange, Value, Price, Property, Wealth, Credit, Reserves, the Bank;
and now comes the settlement of the claims against the bank in the
shape of checks, drafts and bills of exchange.
When we finish this conversation we can, I hope, begin to put things
together, that is, make use of our material.
Mr. Banker: Uncle Sam is right, we shall be ready to do some
constructing when we have disposed of the Clearing House, which is
destined to play a gigantic part in the future of American banking.
This is true because the Clearing House is bound to become the
machinery by which all American banks are to coöperate and protect
themselves through their combined strength; and it will be a
splendid exhibition of what true coöperation can accomplish.
The character and origin then of the Clearing House, its present and
prospective function, must be carefully studied by us, if this
assumption is correct.
Mr. Merchant: The character of the Clearing House, or the principle
upon which it works, is simple enough; although its operations are
vast, and its achievements in times of financial stress have been
most striking, even though not always satisfactory.
The principle of clearing is, as I have just said, simple indeed. If I
have a claim against Mr. Manufacturer, and he has an equal claim
against me, we clear them by exchanging our claims with each
other. If one of you gentlemen should sue another for one hundred
dollars, and the other should make a defense by pleading an offset
of one hundred dollars, and the court should allow both claims, you
would clear them through the court, the one offsetting the other;
that is all there is of the principal involved.
Mr. Banker: Mr. Merchant, you have put this matter more simply than
any book has ever done. Indeed, I had not reduced the transaction
to such simple terms. To put it in the form of a definition, as you
stated, it would read this way: "To offset one claim against another,
and pay the balance, if any, is clearing them."
I had thought that it would be my particular task to explain this
transaction of clearing, and after a good deal of meditation I had
worked out a thought which I am sure is next best, after your
definition; and it will take us one step nearer to the Clearing House,
without getting into any of its complexities. My illustration is this: if
there were but one bank in a town, and all the people did their
business through this single bank, by depositing their money and
checks, and then paid all their bills, with checks on the bank, apart
from any outside business, every debt in the town would be paid by
check, and there would be no need of any money at all as the claims
and debts would be exactly equal, and would always cancel each
other to a cent.
Mr. Lawyer: What you have said about one bank in a town is equally
true of two, three or four, or any number of banks, if you assume
that every person in town does his entire business through the
banks, providing, of course, that the banks get together, and offset
all the checks and drafts they receive during the day. There might be
something to pay from day to day for the time being, but all would
be adjusted in the end, without any variation or difference.
Mr. Banker: Precisely so, but when you get those bankers together,
for the purpose of trading checks, you have created a Clearing
House.
Stephen Colwell says: "Clearing is beyond all question, the simplest,
the most economical, and when applicable, the most efficient of all
modes of paying debts; it is precisely analogous to balancing
accounts."
James G. Cannon, author of the leading work upon the history of
American Clearing Houses, describes a Clearing House "as an office,
established by the banks of a city, where their representatives meet
daily to exchange drafts and checks, and adjust balances." Again,
"as a device to simplify and facilitate the daily exchanges of items,
checks, drafts and bills of exchange, and the settlement of balances
among the banks, and a medium for muted action upon all questions
affecting their mutual welfare."
You would think that the Clearing House was such a simple matter,
and such a great advantage that a Clearing House would have been
thought of, and put into operation as soon as banks got under way,
but not so. Their development and establishment, as we know them
today, has been slow indeed, and the early history of their origin
most interesting.
Jevons says: "About the year 1775, a few of the London bankers
hired a room where their clerks could meet to exchange notes and
bills, and settle their mutual debts. The society was of the nature of
a strictly private club; the public knowing nothing about it, and the
transactions being conducted in perfect secrecy. Mr. Gilbart tells us
that even in this form it was regarded as a questionable innovation,
and some of the principal bankers refused to have anything to do
with it. By degrees, however, the convenience of the arrangement
made itself apparent, more bankers were admitted to the Society,
and a distinct committee and set of rules were formed for its
management. Although it remains to the present day a private and
voluntary association, unchartered, and in fact unknown to the law,
the Clearing House has steadily grown in importance, and in the
publicity of its proceedings.
"Several important extensions of the clearing work have been made
in the last twenty-five years. After the rise of the London joint stock
banks, subsequent to 1833, they were for a long time refused
admittance to the Clearing House; but in June, 1854, they were at
last allowed to join the Association. The Bank of England long
remained entirely outside of the confederation, but more recently, it
has become a member." (Written in 1875.)
The establishment of Clearing Houses in English cities, outside of
London, did not take place until a century, almost, after that in
London went into operation, or as late as 1872, which was just five
years short of a century later.
As early as 1831 Albert Gallatin presented a plan for a Clearing
House in New York, and so perfectly outlined the scheme, finally
adopted, that I want to read it to you. And I want to impress upon
you the fact that Gallatin was one of the very ablest economists that
we have ever produced.
"There is a measure which though belonging to the administration of
banks, rather than to legal enactment, is suggested on account of its
great importance. Few regulations would be more useful in
preventing dangerous expansion of discounts and issues on the part
of the city banks, than a regular exchange of notes and checks, and
an actual daily or semi-weekly payment of the balances. It must be
recollected that it is by this process alone that a bank of the United
States has ever acted or been supposed to act as a regulator of the
currency. Its action would not in that respect be wanted in any city,
the banks of which would, by adopting the process, regulate
themselves. It is one of the principal ingredients of the system of the
banks of Scotland. The bankers of London, by the daily exchange of
drafts at the Clearing House, reduce the ultimate balance to a very
small sum; and that balance is immediately paid in notes of the Bank
of England. The want of a similar arrangement among the banks of
this city produces relaxation, favors improper expansion, and is
attended with serious inconvenience. The principal difficulty in the
way of an arrangement for that purpose is the want of a common
medium other than specie for effecting the payment of balances.
Those are daily fluctuating; and a perpetual drawing and redrawing
of specie from and into the banks is unpopular and inconvenient.
"In order to remedy this it has been suggested that a general cash
office might be established, in which each bank should place a sum
in specie, proportionate to its capital, which would be carried to its
credit in the books of the office. Each bank would be daily debited,
or credited, in those books for the balance of its account with all the
other banks. Each bank might, at any time, draw for specie on the
office for the excess of its credit, beyond its quota; and each bank
should be obliged to replenish its quota whenever it was diminished
one half, or in any other proportion agreed on. It may be that some
similar arrangement might be made in every other county, or larger
convenient district of the State. It would not be necessary to
establish then a general cash office. Each of the banks of Scotland
has an agent at Edinburgh, and the balances are there settled twice
a week, and paid generally by drafts on London. In the same
manner the balances due by the banks in each district might be paid
by draft on New York, or any other place agreed on."
James C. Hallock, the highest authority in this country upon Clearing
House operations, has so succinctly stated how the checks were
disposed of, before the Clearing House was established, that I am
going to read that to you, and show you two diagrams, which we
will keep on file for future reference. "In 1853, the Banks of New
York City organized a Clearing House, the first in America; until then
they had done business without one. The method had been
laborious.
"Each of the fifty-two banks had daily received over its counter, or by
mail, checks on every other bank in town. To collect them the banks
had opened deposit accounts with one another. Each had become a
depositor in fifty-one city banks. Each also had had the others as
depositors and kept fifty-one accounts with them. The pass books
used had been of the ordinary form as 'Merchants' Bank, in account
with Chatham Bank.'
"According to the common usage of depositors, each bank would
have sent messengers to fifty-one banks daily, and each would have
had fifty-one messengers come to its own counter from the other
banks. They had done a little better than that. The Chatham Bank,
for instance, would have checks on the Merchants' Bank. It would
list them on a deposit slip, charge the Merchants' Bank with the
amount in its pass book, and place the checks in the book which the
messenger would now carry to the Merchants' Bank, and deliver to
its Receiving Teller. The latter would remove the checks, and having
some on the Chatham Bank with list attached, he would credit his
bank with the amount in the pass book, place the package in it and
hand it back, thus refilled to the messenger.
"This exchange of checks by two banks at the counter of one was a
rudimentary clearing which, like all bank clearings, saved labor, time
and trouble. To deposit these checks in the customary manner would
have required two messengers and two pass books. By this clearing
arrangement one messenger and one pass book sufficed. Perceiving
the sensibleness of this saving, the New York banks had for many
years tacitly agreed that each should send messengers to one-half of
the banks for six months, and the other half for the next six months.
They had thus reduced the number of banks to be visited daily by
each from fifty-one to twenty-six banks, and accordingly reduced the
number of pass books in use by each.
"The accompanying diagram representing the banks arranged in a
circle, with two of them sending messages to twenty-six each,
indicates how toilsome the exchange of checks still was, up to the
formation of the New York Clearing House, which commenced
operations on Oct. 11, 1853; though only two banks are represented
as sending, in fact, all were really sending, or being sent to; for
every bank sent to all others that did not send to it.

Without a Clearing House in New York.


Diagram showing a Bank Messenger's 26 Trips to Exchange Checks
with other Banks.
"When two banks exchanged checks the amounts were almost
always unequal, leaving a balance for one to pay and the other to
receive. Every day every bank, if they had settled daily, would have
had fifty-one balances to pay, or receive. They were payable in coin.
Instead of attempting the daily adjustment of accounts, which would
have consumed hours, and caused much annoyance, it had become
a tacit agreement that a weekly settlement of balances should be
made after the exchange of Friday morning. On settlement day, the
cashier of each bank would draw checks for every debt due to him
by other banks, and send out the messengers to collect them. Over
fifty porters were out all at once, wrote a bank officer of the time,
with an aggregate of several hundred bank drafts in their pockets,
balking each other, drawing specie at some places, and depositing it
in others, and the whole process was one of confusion, disputes and
unavoidable blunders of which no description could give an exact
impression.
"The second diagram, representing the fifty-two banks in a circle
around the Clearing House, indicates how completely all this
misdirection and waste of energy stopped upon the installation of
that marvelous method which affects such amazing economy. Every
bank now sends straight to a common point. Every bank sends there
all the checks it has on all the city banks, and charges the whole
amount against an imaginary debtor—the Clearing House. Every
bank receives there all the checks all the other city banks have on it,
and admits its indebtedness for the whole amount to an imaginary
creditor—the Clearing House. The balance can now be struck. If the
bank loses, it pays the Clearing House the difference. If the bank
gains, the Clearing House pays the bank; and there is the end of it,
reached by the shortest path with the greatest ease and quickness.
"The principal results may be summarized:
"The Clearing House saved every bank in New York City on the
average twenty-six trips daily to exchange checks with other banks.
It abolished sending to other banks for this purpose. It substituted
one trip to the Clearing House—an economy of 96½ per cent.
"The Clearing House saved every bank in New York the payment or
receipt, mostly in coin, of fifty balances on settlement day (Friday).
It abolished settling at the counter of banks, except for checks, sent
through the clearing and returned 'not good.' It substituted one
payment, or receipt, of a net balance to or from the Clearing House,
an economy of 98 per cent.
With a Clearing House in New York.
Diagram showing Single Trips to Exchange Checks with all other
Banks in the City.
"The Clearing House saved the banks of New York all the drudgery,
irritation and anxiety which had made daily settlements
impracticable. It abolished the weekly settlement; it substituted daily
settlements to the Clearing House—an economy of considerable
importance.
"The Clearing House saved all the banks of New York the trouble of
keeping accounts with one another. It abolished accounts of city
banks with city banks—closed 2,652 accounts. It substituted one
account for each bank with the Clearing House—an economy of 98
per cent.
"These savings, not to mention others, proved beyond dispute, that
clearing checks economizes."
It was twenty-two years before Gallatin's suggestion was adopted,
and a Clearing House was established, which, as stated, was in
1853. The first clearing was effected on Oct. 11, 1853, and
amounted to $22,648,109.87. The balances amounted to
$1,290,522.28.
Boston followed in the footsteps of New York, and established a
Clearing House in 1856, and Philadelphia in 1858.
The next step in the line of progress, in the matter of bank clearings,
came, as Hallock says, as a result of cheap postage and the railroads
in England, and included country checks.
He says: "Somewhat less than half a century ago London recognized
the fact that the out-of-town check was an indispensable instrument
of civilized man, at least in Great Britain. He would use it, contrary to
custom, and despite the remonstrances of city bankers, who thought
only London drafts should be sent to London.
"A product of modern times and method, country checks came to
London with the railroads. Few at first, when the average postage on
a letter consisting of a single sheet, was nine pence, and another
sheet, or any enclosure, however small, doubled the rate, making
the postage on a letter enclosing a check thirty-six cents, on the
average. With penny postage established in 1840, regulating the
rate on a letter by its weight (one penny per half ounce), without
regard to the number of sheets, or enclosures, country checks began
to stream into London.
"In 1858 the city bankers, perceiving their inability to suppress, or
exclude them, decided to adopt the suggestion of some country
bankers, and collect English and Welsh checks through the Clearing
House.
"The idea originated in the spring of 1858 with a young country
banker, William Gillett, the son and grandson of country bankers. He
visited the provincial banks, and interested them in the project.
When prepared to carry it out the country bankers met in London on
Sept. 29th of that year, and communicated the plan to the London
clearing banks to obtain their support. The Londoners opposed it;
they suggested doubt as to the utility and feasibility of any change in
existing systems. However, their coöperation being solicited, the
London bankers held a meeting at the Clearing House on Oct. 12th,
to take the matter into consideration, and appointed a special
committee to confer with the country bankers.
"Then, on reflection, it appeared to another young man, the son and
grandson of clearing bankers, that the organization of a large and
entirely new establishment, which the country bankers proposed,
was unnecessary, as the London bankers could give them all the
facilities they required, without any great additional labor, or
expense. This junior officer in the private bank of which his father
was the head, has since gained world-wide celebrity in science and
literature as Sir John Lubbock (now Lord Avebury). Even with the aid
of such talent and opportunities as his, it required unflinching
resolution to establish country clearing in London. After devising a
method that conformed as closely as practicable to actual usage in
clearing city banks, young Lubbock had to call at every London
bank, at most of them several times, and explain fully the exact
manner in which he proposed to carry out the system. It was very
difficult for him to convince his brother bankers. Finally the special
committee requested him to meet the principal clerks of the different
banks. These clerks unanimously recommended the adoption of his
plan.
"The London bankers then adopted it, and on Nov. 16th submitted it
to their country correspondents. The plan for an independent
country Clearing House was abandoned by the country Bankers'
Committee on Nov. 19th, and the clearing of country checks
commenced in London on Nov. 23, 1858. In less than eight weeks,
after the idea was broached in London, it was put in practice there."
This system covers 60,000 square miles.
Mr. Hallock says, "Sedalia bankers unconsciously imitated the London
plan, but modified it, as had been done abroad elsewhere; for out-
of-town checks are cleared, not only in London, but also in other
English cities, as Manchester, Liverpool, Birmingham, Newcastle-on-
Tyne, Leeds, Sheffield and Bradford, in some eight Scotch towns and
Dublin."
The next advance, which is undoubtedly destined to revolutionize
clearing in the United States, was started in Boston in 1899 by
making New England a free check zone.
Hallock says: "The clearing of out-of-town checks, though opposed
for years by a small minority of Boston banks, was successfully
established at Boston in 1899. The system includes checks on all
points in New England, and maintains a free zone of nearly equal
extent.
"Proposed in 1877 and 1883, the Boston movement at first resulted
in a deadlock, based on the supposed importance of having certain
city banks, who declined to come in, participate. After twenty-two
years through another movement started among the Connecticut
banks, the deadlock was broken by substituting the manager of the
Boston Clearing House for any abstaining members, and giving him
checks on their correspondents to collect. The association finally
decided that all checks passed through the out-of-town clearing
should be collected by him.
"The only opposition exhibited by country banks has been in the
refusal of a few to pay the Clearing House in full for their checks,
deducting so-called exchange. Boston checks passed through the
Clearing House are paid in full, or not at all. New England checks
should be. This can be effected, either as in London, by Boston
banks returning checks, drawn on such banks, as not collectible
through the Boston Clearing House, or by the manager, charging to
collect checks, bearing indorsement of the non-par banks, which
would cut them off from the use of the New England free list, now
enjoyed by them, without reciprocity; that is, without being
themselves on the free list."
Mr. Charles A. Ruggles, manager of the Boston Clearing House, says:
"In the thirteen years that we have made collections in this way, we
have collected over eight thousand million dollars ($8,000,000,000).
"Our cost now is, and has been for ten years, seven cents for a
thousand dollars. That includes the clerk hire of fifteen men, postage
and stationery, and we collect seven or eight hundred million dollars
a year; furthermore, 90 per cent of the banks in New England remit
at par. We collect 95 per cent of it in twenty-eight hours."
It is an interesting and important historical fact that the country
banks of England and Wales forced the clearing of country checks at
London; so, too, the banks of Connecticut, thirty of them in number,
by combining under the advice and leadership of Mr. James C.
Hallock, succeeded in having the plan adopted by the Boston
Clearing House. As a result New England became a free check zone.
I think we should note in this connection that the father of Mr.
James C. Hallock was the organizer, if not, indeed, the originator of
the New York Clearing House in 1853.
Mr. Laboringman: Mr. Lawyer, you talk and talk and talk, when you
could say what you really have to say, in one-tenth of the time, and
in about as many words. We have spent a whole hour in the history
of the origin of the Clearing House, and have just learned what I
could repeat in about two minutes.
First: London, in a kind of a sneaking way, began to clear checks in
1775, and kept a Clearing House in a blind alley. Nothing more was
done in England by way of advance until 1858, when the country
banks of England and Wales, covering a territory of 60,000 square
miles, by threatening to start their own Clearing House in London,
compelled the London banks to clear their checks. Not till 1872,
nearly one hundred years later, did any other city adopt it. But today
many cities in Great Britain are clearing country checks.
Second: Gallatin proposed a Clearing House for New York in 1831.
Hallock established it in 1853. Boston and Philadelphia followed in
three and five years, respectively. In 1899, New England became a
free check zone, all checks being received at par at Boston. Since
then several other cities have followed suit. Atlanta, Macon,
Nashville, Sedalia and Kansas City. Now, I have said everything you
said. Next!
Uncle Sam: Mr. Laboringman always gets a "B" line on things.
Mr. Lawyer: That is true in substance, but the very fact that Mr.
Laboringman has stated the case so well is the greatest compliment
he could pay us. It is only by iteration and reiteration, word upon
word, and precept upon precept, that has made this whole subject
so plain to all of us. We have made haste by going slowly, and we
don't want to get into a hurry now.
Mr. Banker: I agree with you, Mr. Lawyer, patience has been our best
and truest friend in all these talks, and we should not desert her
now.
Mr. Laboringman: That's all right, but let us get down, right down to
business. Just where are we at now? And where are we going to in
the Clearing House matter?
Mr. Banker: We are now going to discuss the Clearing House from
five points of view.
First: The Clearing House, from its original standpoint—New York
was the pioneer, and is probably our highest type. Its clearings are
certainly by far the largest in the world.
Second: The clearing of country checks, of which Boston was the
pioneer in a large way, although preceded in point of time by
Sedalia, Mo., a country city of only 15,231 people in 1900.
Third: The examination of all banks clearing through the Clearing
House, of which Chicago was the pioneer, starting June 1, 1906—
and probably the best type, although there are today about twenty
cities following in her footsteps, including the following: Minneapolis,
Feb. 1, 1907; St. Paul, May 1, 1908; St. Louis, Oct. 11, 1907; Los
Angeles and San Francisco following upon the heels of St. Louis;
Kansas City, March 1, 1908; St. Joseph, the early part of 1909;
Philadelphia, April 5, 1909; New York, 1912, with others, not
mentioned, making twenty in all.
Fourth: The centralization of the reserves of the banks at the
Clearing Houses, as a matter of convenience in settling balances,
and carrying on their common business generally, but subsequently
for the purpose of facilitating the issuance of Clearing House
certificates.
Mr. Lawyer: Let me repeat to you, gentlemen, what may have been
stated before, that there is no law providing for the existence of the
London Clearing House, nor is there a single law in a single state in
any way authorizing or affecting a single Clearing House in the
United States. Therefore, all that they have done has been without
any authority of law. They are a law unto themselves; and it is not at
all certain that that has not been wise. Indeed, I am of the opinion
that it has been most fortunate for the business interests of the
country. What do you think, Mr. Banker?
Mr. Banker: I am of the same opinion; in confirmation let us return to
the consideration of the points suggested.
First: The New York Clearing House, as stated, had its first clearing
Oct. 11, 1853. Mr. Cannon says that not until August, 1854, did the
New York Clearing House have a constitution. This instrument, with
the subsequent changes, is in force today, and constitutes as perfect
an illustration of the evolution of law by practice, as can be found
anywhere.
This institution had various homes until it took up its present
quarters in one of the most beautiful buildings in the whole country
—worthy in every way of its use and purpose. It has cost $1,130,000
and is owned by the Clearing House Banks of New York, under the
name of the Clearing House Building Company.
Mr. Cannon says: "The administration of the Clearing House is vested
in a President, Secretary, Manager, Assistant Manager, and five
standing committees.... The manager under the control of the
Clearing House committee, has full charge of all business at the
Clearing House, but before entering upon his duties, he is required
to give bond, in the sum of $10,000.... Although the Constitution
provides for the appointment of a manager, annually, it is the custom
to retain the same one in office, year after year. As a matter of fact,
there have been only three managers in the whole history of the
association.... The Clearing House committee is clothed with almost
absolute power, being second in authority only to the association
itself. The ablest and most experienced bank officers, therefore, are
usually chosen to serve on it. The committee is elected annually. The
association at present, 1912, consists of sixty-three members and
twenty-two non-members, and the United States Sub-Treasury,
located at New York. The latter makes its exchanges only at the
Clearing House, its balances being settled at its own counter. It has
no voice in the government of the association, and pays a nominal
sum for actual expenses. The privilege which the Sub-Treasury
enjoys of making its exchanges through the Clearing House is a
matter of great accommodation, both to the Sub-Treasury and to the
banks. The New York post office clears through one of the members,
but renders no compensation to the association for the privilege.
"The membership of the association, since its organization, has been
constantly changing, owing to the admission and expulsion of
members and voluntary withdrawals, as provided by the
constitution.... A bank, the capital of which does not exceed
$5,000,000, must pay $5,000; a bank, the capital of which exceeds
$5,000,000, must pay $7,500. Any member increasing its capital is
required to pay in accordance with those rates."
In 1899, the large number of trust companies that had come into
existence attracted the attention of the Clearing House and the
Clearing House Committee adopted a rule that no trust company
could clear that had not been in existence for at least one year, and
that every trust company clearing through a member shall furnish a
weekly statement of its condition to the manager of the association.
The New York State law did not then provide that any trust company
should carry cash reserves, although state banks were required to
have 15 per cent cash in their vaults. It was tacitly understood that
all banks clearing, should have 25 per cent reserve. Of course the
trust companies could ride the banks, and they took advantage of
their opportunity. This caused great dissatisfaction, and rightly so.
On Feb. 11, 1903, the association passed a resolution requiring that
every institution (not a bank required to maintain specified reserves)
"shall after June 1, 1903, keep in its vaults a cash reserve, equal to
5 per cent; after Feb. 1, 1904, 7½ per cent; after June 1, 1904, not
less than 10 per cent, nor more than 15 per cent, as the association
might determine."
The trust companies kicked and protested, and almost, without
exception, withdrew from the Clearing House; but, after the panic of
1907, the New York legislature passed a law requiring them to carry
15 per cent cash reserves.
On June 13, 1908, the association passed a resolution compelling all
trust companies, who were members, to carry a cash reserve of 25
per cent, and on Jan. 16, 1908, the association for the first time in
its history made a rule compelling all its members to keep a cash
reserve of 25 per cent.
Every member of the New York Clearing House is required to furnish
to the manager, weekly, for publication, a statement showing its
condition, showing the average amount of loans, and discounts,
specie, legal tender, notes in circulation and deposits. The capital
and net profits are also given, this being the only association which
gives the latter item.
Along the same line of legislation controlling the action or conduct of
its members, the Clearing House committee, having plenary power
to do so, passed a rule—determining just what every member and
bank, clearing through members, should charge for collections.
The rule made some cities free, that is, there were no charges for
collection made compulsory. Some cities were under a fixed charge
of one-tenth of one per cent, and others under a fixed charge of
one-quarter of one per cent. Upon April 3, 1899, this rule became
obligatory, and if any member violated it, the penalty was $5,000 for
the first offense; for the second offense it might be expelled from
the association.[1]
Mr. Laboringman: That is precisely the same rule we have in our
Union, only our limit is not so high. We fine a member $5.00 for his
first offense, and for the second offense we take away his card. By
Jove, that is a hot proposition. And these are the very fellows who
are always cussing us because of our Union rules.
Mr. Lawyer: I want to tell you something else, gentlemen, that
combination among the banks is clearly in restraint of trade and in
violation of the Sherman Anti-Trust Law. Anybody who wants to can
bring those banks to time.
Mr. Banker: Now, gentlemen, don't you perceive that this institution,
step by step, has evolved its own laws, or rules of action, slowly
developing its present system, and regulating and controlling the
conduct of those outside institutions which enjoy its privileges? The
story of this Clearing House is the record of all of them in principle.
They are, each and every one of them, self-centered, self-contained,
and a law unto themselves.
The operation of the New York Clearing House is practically that of
all the others. Its room is sixty feet square. Four rows of desks
occupy the floor. Each member has its own numbered desk
separated from its neighbors' by a wire net work.
At one minute to ten o'clock the manager sounds the gong and all
are instantly ready for the exchange which begins promptly at ten
o'clock.
At the expiration of forty-five minutes usually, but sometimes in
thirty-seven minutes, and even in thirty-five minutes, every member
of the association has in its possession all the paper drawn upon
itself, which the other members have credited on their books, and
has delivered all the paper drawn upon all the other members of the
association in exchange which it has credited upon its books.
Mr. Cannon states that the amount delivered by any member has
never been exactly equal to the amount received but has come
within one cent upon a single occasion. To complete the clearing
transaction, it is necessary, of course, for those who owe anything to
pay it to the Clearing House, and for the Clearing House in turn to
distribute what is paid to it among those who are entitled to receive
it.
As a matter of convenience for the purpose of settling the balances,
the members of the Clearing House deposit with the Clearing House
gold coin, gold certificates, silver certificates and legal tender notes,
and receive clearing house certificates, therefor, in denominations of
$1,000, $2,000, $3,000, $4,000, $5,000, $10,000, $20,000, $50,000
and $100,000 each. All notes of a smaller denomination than $5.00
should, according to practice, be put up in packages of not more
than $5,000. All packages are sealed and marked with the name of
the institution depositing them with the amount, date and kind of
money they contain.
The banks, also, deposit at the Sub-Treasury in New York gold coin,
for which certificates are issued by the Assistant United States
Treasurer. These certificates are in two denominations, $5,000 and
$10,000 each; the holders of these certificates are the absolute
owners of them.
It is stated upon high authority that the amount of such money now
deposited at the various Clearing Houses throughout the United
States exceeds the sum of $200,000,000. In other words, that we
have today in the United States centralized our reserves to that
extent for certain purposes.
Mr. Merchant: Mr. Banker, your history of the development of the
Clearing House and your description of its operations have certainly
been very clear, and most interesting. The second point you
mention, the clearing of country checks, will appeal to all the
business men of the country as it has to me for a long time;
especially since I have a great deal of business up in New England,
where this practice has been in force since 1899. I was up there the
other day, and my partner took me to see Mr. Charles A. Ruggles,
the manager of the Boston Clearing House. After he had described
the system of clearing country checks, he handed me a little
pamphlet giving the history of its development in Boston and setting
forth its reasons and advantages so graphically, that I am going to
quote from it in telling you gentlemen about it.
Let me say to you that I am confident that when this principle is fully
understood, and carried out, as it soon will be, to its logical
conclusion, checks, precisely like our bank notes, will be par
everywhere in the United States. I am fully aware that you are
greatly surprised at this statement; but take my word for it and
remember that what I have prophesied is going to happen. Free
zones are going to increase until every check will be free within its
own zone, and almost immediately as a consequence, the zone
centers will settle with each other daily; that is all checks will not
only be free in their own zones, but will be free between all zones,
that is all checks will be par everywhere.
However, let me tell you how it developed in New England. Ruggles
describes it in these words:
"That the use of checks has increased rapidly in the past ten years is
an undisputed fact, and the question of how to handle them to
advantage, or without loss, is a problem that has caused much
discussion. All large cities have had the same experience, and have
dealt with the question in various ways. Rather than ask his bank to
draw exchange, the country merchant sent his check to Boston in
payment of his account, and in this way, he was encouraged by the
city merchants who deposited the check in his bank, where it was
received at par. This continued until the volume handled reached
such proportions as to make the item of exchange quite prominent
in the expense account, which the city bankers sought to reduce by
various methods. In many cases checks were not sent directly to the
banks upon which they were drawn, some other route being
selected to avoid exchange charges; as, for example, a check on
Stonington, Conn., deposited in Westerly, R.I., only six miles distant,
after many days, during which it traveled one thousand miles,
perhaps, passed through Providence, Boston, Newport, then New
Haven and New London and reached its destination bearing the
endorsement of nine banks. Mr. Cannon in his work on Clearing
Houses cites a remarkable case of zigzagging to avoid collection
charges; a check on Sag Harbor, N.Y., paid to a Hoboken firm was
eleven days reaching its destination. Had it been collected through
the New York Clearing House ten days' time, fifteen hundred miles of
travel and a vast amount of clerical work might have been saved."
Here are two diagrams showing the route and the indorsements of
the check to which Mr. Cannon referred, taken from Mr. Cannon's
work on Clearing Houses.
Mr. Ruggles further says: "The subject of the collection of the
country check in a more expeditious and economical method than
that then in force in Boston, was first agitated in 1877, when a
committee of five was appointed to consider the question. A majority
reported that the annual cost to the banks of Boston was two
hundred and twenty-nine thousand dollars for collecting New
England checks and recommended that the business be
consolidated, which would very materially reduce labor and expense.
This report was received and placed on file. A minority report was
also submitted in opposition to any change, on the ground that it
would sever the social and business relations which then existed,
and the clerical force required to handle the entire business would
incur so heavy an expense that the cost of collecting would be as
much, if not more, than was the case by the method then existing.
No further action was taken until 1883, when another committee
was appointed to consider the same question. They reported that
returns from all the banks showed that double the business reported
by the former committee was then being transacted and that the
probable cost was four hundred thousand dollars; they suggested
that an agency similar to the Clearing House be established for the
purpose of making the collections. The banks failed to endorse this
proposition and the matter was dropped until 1898, when a
committee was appointed by the Bank Presidents' Association to
again consider this important question; in their report it was
recommended that the Clearing House Association act on the matter
and undertake to make the collections. A committee was appointed
by that body, who endorsed the previous report. Their report was
accepted and the Clearing House Association authorized the Clearing
House committee to put in operation the present system, and the
banks of Massachusetts were first addressed on the subject on April
14, 1899, the result being a conference between the Massachusetts
Bank Cashiers' Association and the Clearing House committee. This
conference revealed a decided difference of opinion at first, but both
sides were brought to a clear understanding of the situation
eventually. The position taken by the Clearing House was that it did
not propose to dictate to the country banker how he should transact
his business or coerce him into acting in conjunction with the
Clearing House; nevertheless, the Boston banks claimed the right to
use their own methods in making collections, and should the country
banker decide to charge exchange, checks on his bank would not be
accepted at par in Boston, and might be collected by express or such
other means as was thought advisable. Comparatively few of the
banks in Massachusetts appeared in opposition when the subject
had been fully discussed. At a second conference the Cashiers'
Association asked the privilege of making payments in New York
Exchange if more convenient for them, and this request was readily
complied with. They also asked that they might ship currency when
necessary, at the expense of the Boston banks; this request was also
granted, and in a few months all were remitting at par and checks
from all the Boston banks were being collected through the Clearing
House. On Sept. 21st, Maine was added to the list, followed by
Rhode Island and Connecticut on Nov. 9th, and New Hampshire and
Vermont in January, 1900.
Fac-simile of the Back of the Check, Showing the Numerous Indorsements it
Bore on Finally Reaching the Bank on which it was Drawn.
From James G. Cannon's Work on Clearing Houses.
"The first year the amount collected was $541,000,000 at a cost of
ten cents per thousand dollars; the second year $565,000,000 at a
cost of eight cents; the third year $607,000,000 with cost reduced to
seven cents. Since the opening of the Foreign Department, as we
term it, the average yearly business has been six hundred million
dollars, and the average cost seven cents. The expenses are met by
an assessment levied on the banks based on their daily average
business. There are at present in New England six hundred and
thirty-seven banks and trust companies to whom checks are sent
daily, and the number of packages handled will average five
thousand."
Map Showing the Check's Itinerary.
From James G. Cannon's Work on Clearing Houses.
Mr. Banker: Mr. Merchant, I am very much surprised that you have
made such a thorough study of this feature of the banking problem,
but I am also equally gratified. You have certainly explained the
question so clearly and fully that no one can fail to be impressed
with the future possibilities of this plan of clearing country checks,
and I am convinced that you are absolutely right that the time is not
far distant when every check in the United States will be par
everywhere precisely as our bank notes are today; and why should
they not be so, since both are identically the same thing in principle.
Mr. Lawyer: I can see what a tremendous advantage that would be
to our commerce, indeed, incalculable, and I can see that there is no
substantial difference between a check on a bank and a bank note,
which is a check of the bank on itself; both are mere credits, and as
you say, when fully comprehended and rightly understood, will be
treated in precisely the same way in the exchanges of the country.
But it does seem to me as though we shall have to have a better
knowledge of our banks, and the business houses of the country,
too, if this great reform is to be brought about.
Mr. Banker: That is true, but the bankers of the country have realized
for a long time that their greatest peril came from the unsound
practices and reckless methods of some of their own number and
have already taken steps to protect themselves against such
practices.
You, gentlemen, will all of you, no doubt, remember the Walsh
failure at Chicago in 1906. You will also remember that Walsh had
control of three different banks with approximately $30,000,000
resources; one was a National Bank, under national supervision; one
a Trust Company and one a Savings Bank; both of the latter being
under State supervision. This enabled Walsh to flim-flam the
examiners, one examiner being national and the other state, by
juggling the assets and then finally diverting practically all of the
deposits into his own enterprises; certainly the best part of them
was used in promoting his business schemes. It took this kind of an
earthquake to wake up Chicago and bring into the banking fraternity,
or business world, one of the greatest reforms of the commercial life
of the country. I say commercial world advisedly because about the
same time Chicago had an experience with a fish house that was
really the biggest fish story that was ever told. The sad thing about
this fish story was that it was true and cost the fishermen, the
Chicago banks, and the fishermen and bankers elsewhere, about
$3,000,000.
These two experiences capped the climax and illustrated perfectly
the need of just what followed in the Clearing House at Chicago.
This brings me naturally to the third point that I mentioned as
important and vital in the evolution of the American Clearing House.
On June 1, 1906, the Clearing House Association of Chicago, Illinois,
acting upon a resolution introduced by Mr. Fenton, Vice-President of
one of its banks, established an independent system of Clearing
House bank examinations. Only recently the chairman of the
Clearing House used this language:
"The result of our experience in Chicago is most satisfactory and
gratifying. The banks have almost unanimously adopted every
suggestion made by the Clearing House Committee for their
betterment and strength. In several instances the Committee, from
its wider knowledge of the financial situation, has been able to save
some of the smaller institutions from loss by enabling them to take
hold of conditions in time. I cannot properly go into such details as
would illustrate the effectiveness of Clearing House examinations as
we have experienced it, and can only say in a general way that it
has been even more satisfactory than I anticipated it would be
before it was undertaken."
Mr. Lawyer: Right on this point I want to read to you a letter I have
just received from the Clearing House examiner of Los Angeles,
California.

Dear Sir:
Replying to your inquiry of December 9th, will say that Clearing
House examinations were begun in Los Angeles on May 1, 1908.
Since the inauguration of the system there have been no bank
failures, because the Executive Committee of the Clearing
House Association will not permit banks to reach the danger
point.
We have had one instance where, after watching a bank for
three years, giving it a chance to correct its bad methods and
put itself in good condition, the Clearing House finally compelled
it to assign all of its assets to a trustee, and the public was
notified that all claims would be paid on demand....
National and State examinations have improved greatly during
the last ten years, but they will always lack the strongest
element—the calm, clear judgment of the local executive
committee, whose demands are founded on knowledge of the
situation, and whose mind is not warped by political strings.
Yours very truly,
(Signed) John W. Wilson,
Examiner, Los Angeles
Clearing House Assn.

Mr. Cannon in his admirable work on Clearing Houses, says:


In substantially his own words the Chicago examiners operate under
the following conditions: The examinations extend to all the
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