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F e d er a l Re s er v e

bank

OF DALLAS

Dallas, Texas, February 29, 1960

To All Banks in the
Eleventh Federal Reserve District:
I know that you are familiar with the check mechanization program. The years of careful
planning by the American Bankers Association are behind us, and it is now time to implement
the program.
Check mechanization became a practical possibility last year with the final adoption by banks,
business machines manufacturers, and check printers — under ABA auspices — of the common
machine language employing magnetic ink character recognition. In the past year, many banks
have ordered electronic equipment and have begun preprinting their checks with magnetic ink
characters. The twelve Federal Reserve banks have adopted a program under which installations
will be made in five of their offices to test the equipment of different manufacturers for per­
formance capability and for operational and economic feasibility in a variety of work situations.
The offices selected are the Federal Reserve Banks of Boston, Chicago, New York, Philadelphia,
and San Francisco. In addition, this Bank is now preprinting the transit number-routing symbol
in magnetic ink on its official checks and is supplying preprinted check forms to member banks
for drawing on their accounts with us.
As you know, the economies which are to be gained by mechanized check operations cannot
be realized until most checks are prepared for mechanized handling. We want to urge you, there­
fore, if you have not already done so, to take the necessary steps to have the check forms which
you furnish your depositors preprinted with the transit number-routing symbol in magnetic ink
characters. In addition, it would also be a great help to the program if you would encourage your
depositors who have checks printed elsewhere to discuss the possible need for redesign with you
before reordering supplies. After some initial difficulties, check printers can now produce magnetic
character printing which can be “ read” satisfactorily by electronic machines. We feel sure that
you will find your printer thoroughly familiar with the common machine language program and
ready to assist you.
We hope you will join with us in promoting the common machine language program of the
American Bankers Association, and we believe that whatever additional cost may be involved
will be a small price to pay in the interest of a more efficient check collection system.
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)

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