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federal

Reserve Bank o f D allas

DALLAS, TEXAS

75222

Circular No. 81-123
June 18, 1981
Potential Air Traffic Controllers' Strike - June 21, 1981
TO ALL FINANCIAL INSTITUTIONS IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The contract between the Federal Aviation Administration (FAA) and
the Professional Air Traffic Controllers Organization (PATCO) expired on March
14, 1981. Since that time, the two parties have been involved in extensive con­
tract negotiation, but have not been able to reach an agreement. It appears that
PATCO may go on strike at midnight, June 21, 1981, which could result in a sub­
stantial curtailment in air transportation throughout the nation.
Reduced air transportation services, which would vary depending on the
extent of the curtailment, may be expected to disrupt normal Federal Reserve
check collection operations. This disruption would affect direct sending and con­
solidating banks, and Federal Reserve shipments to all other Federal Reserve of­
fices, as well as to some paying banks. Due to an increase in transportation time
if the strike occurs, there may be delays in the return of dishonored items. Banks
should consider this delay when calculating return items. If normal cash letter
crediting policies and operating procedures remained unchanged, Federal Reserve
float would be expected to increase substantially.
Efforts will be made to limit the impact of disruptions in normal air
transportation on Federal Reserve float. Accordingly, the Reserve Banks are de­
veloping contingency plans for that purpose. These plans may include a temporary
suspension of direct sending privileges, changes in deposit deadlines, and changes in
availability on cash le tte r shipments to some intraterritory and interterritory end­
points (including extensions beyond the current two-day maximum deferment policy).
To minimize potential disruptions to the nation's payments mechanism, the Federal
Reserve Banks intend to take advantage of all available transportation facilities.
In addition, presentation to financial institutions in Reserve cities will
be extended wherever possible. This will allow a greater percentage of work to
be processed timely and preserve credit schedules.
If it becomes necessary to implement the contingency plans under de­
velopment, the Federal Reserve will provide notice as early as possible recognizing
that a national strike may dictate limited advanced notice.

B a n k s a n d o t h e r s are e n c o u r a g e d to u s e th e fo llo w in g in c o m in g W A T S n u m b e r s in c o n t a c t in g th is Bank:
1-800-442-7140 (in tr a s t a te ) an d 1-800-527 -920 0 (in te r s ta te ). Fo r c a lls p la c e d lo cally, p l e a s e u s e 651 plus th e
e x te n s io n r e fe rre d to ab ove.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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Please address all
Head Office, (214) 651-6399,
Ext. 244, Louis Moore at the
Gonzales at the San Antonio

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inquiries on contingency planning to Jess Insall at the
Martin Ramsey at the El Paso Branch, (915) 544-4730
Houston Branch, (713) 659-4433 Ext. 21, or Rene
Branch, (512) 224-2141 Ext. 420.
Sincerely yours,

William H. Wallace
First Vice President


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102