Full text of Mimeograph Letters and Statements of the Board : Inter-district and Intra-district Clearance, Number 430, Volume 2, Page 725

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430

The Federal Reserve Board will approve a system of intra­
district and inter-district clearing and collection of checks
C

which shall be based upon the following named principles, the
details to be worked out by the Governors and Transit Managers
of the various Federal

Reserve Banks:

First:
The system shall be upon a voluntary basis for
all member banks, but every effort shall be made to
offer such reasonable and proper inducements as can
be offered under the law to persuade banks to join
the system of clearing.
In this connection, it may
be pointed out that all clearing operations in this
country have been developed heretofore on the volun­
tary principle and inasmuch as the Federal Reserve
System can not handle, except on a voluntary basis,*
items drawn against non*biemb£r banks, it is desirable
that nothing be done to tear down whatever has already
been established.. No bank joining the System need
bind itself to send its checks for collection or
clearing to the federal Reserve Bank, but in joining i
the System, it agrees to remit for all items sent in
by other members.
Second:
In otder to give banks an opportunity to know
the amount of items which have been drawn against
them, and in most Cases to actually- see the specific
checks, the Board is willing to approve a system of
two days' deferred debit and deferred credit. If,
however, the Reserve Bank of any district, prefers
immediate debit and credit, the Board will approve it,
Hewever, the Board will not approve a deferred
debit extended beyond two days in any district.
For checks of another district, a deferred time
for debit and credit equal to the, one way time be­
tween the Federal Reserve Cities of the two districts
involved will be allowed;




Third:

The Board will approve a scale of penalty charges
to apply on deficiency of reserves where reserves of
member banks are depleted below the legal limit and
beyond the two day debit and credit limit.
Fourth:
In order to facilitate clearing operations and
reduce ''float" the Board will approve arrangements with
clearing houses in reserve cities or with banks or in­
dividuals to act as agencies in the collection of items;
Fifth.:
The Board will approve accepting for collection, from
member banks and with their indorsement, the checks of nonmember banks or bankers with the same stipulation above
made in respect to deferred time;
Sixth:
If it will facilitate the getting in of reserves
and thereby the handling of this problem, the Board is
ready to act as provided in paragraph "e" of Section 11
of the Federal Beserve Act, in the reclassifying of
reserve and central reserve cities and in tho naming of
additional reserve or central reserve cities;
Seventh:
The Board is ready to approve a scale of charges
which member banks may be authorized to charge their
customers for the collection of checks and the remitting
of funds, such charges to be based on actual cost;
Eighth:
,Every member bank entering this voluntary clearance
system Shall be permitted to print upon its checks, in the
form of a distinctive design, mark, or seal, a legend reading:
his check is payable at par through the ____ Federal
Beserve Bank."
November 23, 1915.