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F e d e r a l R e s e r v e Ba n k
OF DALLAS

Dallas, Texas, July 16, 1956

To all Banks in the
Eleventh Federal Reserve District:
Printed on the reverse of this letter is the text of a press statement
issued by the Treasury Department announcing a new form of Government
check to be issued beginning August 1, 1956. The new check will be a buffcolored (light brown) card check and is designed to replace the paper
Treasury check now in use.
The new buff-colored checks, as well as other Government checks, will
be accepted as cash items for immediate credit by this bank and its branches
when received from member and nonmember clearing banks in accordance
with the provisions of our Bulletin No. 8.
It will be observed from the press statement that the buff-colored
checks will require special handling at the Federal Reserve banks. Accord­
ingly, in sending these checks to our head office and branches, it would be
appreciated if they are listed in separate cash letters.
Yours very truly,
Watrous H. Irons
President

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

RELEASE MORNING NEWSPAPERS,
Monday, July 16,1956.

The Treasury Department announced today that beginning about August 1, 1956, a
number of Government disbursing officers will issue a new form of government check
different in appearance from the familiar green-colored punch card and conventional paper
checks drawn on the Treasurer of the United States.
The new checks will be buff-colored (light brown), in punch card form, and will have
a diagonal cut in the upper right corner. They will replace the comparatively few paper
checks now issued by the government.
Green punch card checks, which have a diagonal cut in the upper left corner, will
continue in use.
The buff-colored checks will be introduced in connection with the adoption of high­
speed electronic machines to process the payment and reconciliation of government checks.
The new machines, which will go into use August 1, were installed after two years’ study
by the Treasury, General Accounting Office and the Bureau of the Budget, as another step
to reduce costs by improving Government procedures. As previously announced, upon
complete conversion to the system, annual savings of $2,250,000 are expected.
The electronic machines, capable of accurately “ remembering” facts and figures, will
both process checks for payment and reconcile the checks after payment. Facts concerning
each check issued, such as the serial number and amount, will be fed into the machines.
When the check comes back to the Treasury for payment, the machines will either verify
or throw it out as incorrect. The machines will also provide information at any time on
checks still outstanding, thereby simplifying the reconciliation of accounts of disbursing
officers. Costly recording and auditing procedures in check processing, performed by several
hundred persons, will no longer be necessary.
The new buff-colored checks will be used primarily by disbursing officers presently
issuing paper checks prepared by hand. They will require special punching at the Federal
Reserve Banks, which is not necessary in the case of the more generally used green card­
board checks. The buff-color was adopted to simplify the separation of these checks.
About 350,000,000 checks are issued each year by the government, of which 30,000,000
are now paper checks. The paper checks will be eliminated beginning August 1, and will
disappear completely as those outstanding at that time are cashed.
TREASURY DEPARTMENT,
Washington, July 16,1956.

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