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F e d er a l R eser ve Ba n k DALLAS, TEXAS Dallas of 75222 C i r c u l a r No. 73-85 A p r i l 2 7, 1973 To All Banks and Others Concerned in the Eleventh Federal Reserve District: E n c lo s e d i s a r e v i s e d copy o f Supplem ent B e n t i t l e d " P o s t a l Money O rd e rs" w h ich i s a p a r t o f o u r B u l l e t i n 8 , " C o l l e c t i o n o f Cash I te m s ." T h is r e v i s i o n , w hich "became e f f e c t i v e A p r i l 2 , 1973? c o n s i s t s o f t h e s u b s t i t u t i o n o f U n ite d S t a t e s P o s t a l S e r v ic e f o r P o s tm a s te r G e n e r a l i n two p l a c e s t o more a c c u r a t e l y r e f l e c t t h e c u r r e n t r e l a t i o n s h ip b etw ee n t h e P o s t a l S e r v ic e and t h e F e d e r a l R eserv e B anks. Additional copies of Supplement B will be furnished upon re q u e st. Yours very truly, P. E. Coldwell President E n c lo s u r e This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) BULLETIN 8 FEDERAL RESERVE BANK OF DALLAS m onth in w h ic h su ch c o sts w er e incurred, using Form TR-115, a su p ply of w h ic h w ill be fur n ish e d upon request. 10.30 Methods of shipment Each direct-sending m em b er bank sh ou ld give con sta n t attention to m eth o d s of sh ip m ent and shou ld change the m eth o d in any case in w h ic h sh ip m ent can be m ade by another m eth o d at a lo w e r c o st and w ith o u t lo ss of tim e in p re se n t ment. In c a se s in w h ic h w e pay the transporta tion costs, w e reserve the right to require a change in m e th o d of shipm en t in any situation w here, by the u se o f another m ethod, a m ore efficient handling b y the receivin g Federal R e serve office w ill result, or p resen tm en t can c o n siste n tly be m ad e m ore prom ptly, or at a lo w e r c o s t and w ith o u t lo ss o f time. Section 11, HIGH-SPEED PROCESSING 11.00 Standardization, sorting, routing, and mechanized processing To facilitate the sorting, routing, and m e c h a n ized p r o c e ssin g o f cash item s, and thereby p ro m ote earlier p resen tm en t and earlier return of unpaid item s, it is urged that: (a) In conform ity w ith the A .B.A. M agnetic Ink Character R ecognition Program, the routing sy m b o l and the suffix o f the transit num ber be en c o d e d on all cash item s in m agnetic ink in E-13B type in the m anner prescribed, and at the lo ca tio n assigned, by the A.B.A. (b) T he appropriate transit num ber-routing s y m bol in fractional form be clearly im printed in the upper right corner o f all cash item s payable by or through all par-remitting banks, preferably in G othic type, the face o f w h ic h m easu res at lea st 8 p o ints vertically or 1 / 9 o f an in ch from the top to the b ottom of the ind ivid ual char acters. (c) Cash item s be oth er w ise con form ed to the standards prescribed by the A .B.A., includ ing a m inim um w id th o f 23A inches, a m axim u m w id th o f 32/3 inches, a m inim um length o f 6 inches, and a m a x im u m length of 83A inches, and be re stricted to a single th ick n ess of card or paper. 11.05 Right to encode, assumption of risk by sender If, in our judgment, the p r ocessin g of any cash item b y us requires the inscription th ereon in magnetic ink, or otherwise, of the A.B.A. transit number, the routing symbol, or both, of the pay ing bank (or nonbank payor) or requires the inscription thereon in magnetic ink of the amount of such item, we may so inscribe the item and present, send, or forward it accord ingly; and the sender of such item shall be deemed to assume the risk of loss resulting from delay caused by the act of inscribing such amount or such number, symbol, or both. 11.10 Designation of paying bank or nonbank payor This bank may present, send, or forward any cash item, in accordance with the provisions of Section 210.6 of Regulation J, on the basis of: (a) Any A.B.A. transit number or routing symbol appearing thereon at the time of its receipt by us, whether inscribed by magnetic ink or by other means, and whether or not such transit number or routing symbol is consistent with each other form of designation of the paying b a n k (or n o n b a n k p a y o r) t h e n a p p e a r in g thereon; or (b) Any other form of designation of the paying bank (or nonbank payor) then appearing thereon, whether or not consistent with any A.B.A. transit number or routing symbol then appearing thereon. 11.15 Non-machinable items Any cash item which cannot be processed on our M.I.C.R. high-speed check-processing equip ment and which is received by this bank on Friday or, if that day be a nonbanking day, on Thursday, may be held over and processed on the following Monday, or, if that day be a non banking day, on the next succeeding banking day. Section 12, PHOTOGRAPHIC COPIES In the event we receive, as a cash item, a prop erly prepared photographic copy of a lost or destroyed item which was eligible for handling as a cash item, which copy bears a current en dorsement of the sender and the following legend, or one of equivalent effect, signed by or in behalf of the sender: “This is a photographic facsimile of the original check which was endorsed by the undersigned and reported lost, stolen or destroyed while in the regular course of bank collection. All prior BULLETIN 8 FEDERAL RESERVE BANK OF DALLAS and any m issin g e n d o rsem en ts and the validity o f this fa csim ile are h ereb y guaranteed, and u p on p a y m en t h e r e o f in lieu o f the original check, the u n d ersig n ed w ill h old each collecting bank and the payor bank h arm less from any lo ss suffered, p ro v ided the original ch eck is unpaid and p a y m en t is sto pp ed th ereon .” W e w ill handle the cop y as follo w s: (a) W e w ill p resen t or sen d the c o p y as a cash item to the p a y in g bank (or non b an k payor), sub ject to all the rules as to rem ittance for, and return of, cash item s; or (b) If such p a y in g bank (or n on b an k payor) d eclin e s to hand le the cop y as a cash item but is w illin g to handle it as a n o n c a sh item, w e w ill charge back to the sen d er the am ount of the copy and w ill p resent or send the co p y to the paying b ank (or n o n b a n k payor) as a n o n c a sh item under the term s o f our current bulletin relating to the co llectio n o f n o n c a sh items; or (c) If su ch p a ying bank (or n on bank payor) refu ses to hand le the copy, w e w ill charge back the am ount o f the cop y and return the cop y to the sender. Supplement A GOVERNMENT CHECKS A-1.00 Terms of handling G o v ernm en t ch e c k s draw n on the Treasurer of the U n ited States w ill be h an d led by us as cash item s in accordance w ith, and subject to, the p ro v isio n s o f T reasury D epartm ent Circular 21 (31 CFR 360). C opies of that Circular w ill be furnish ed u p o n request. W ith resp ect to matters not cov e r e d b y that Circular, the term s and c o n d itions o f R egulation J applicable to cash item s, o f this bulletin, and o f our time sch ed u les shall be applicable to all su ch G overnm en t checks. A-2.00 Immediate credit W e w ill give im m ediate credit, subject to p a y m en t in actually and finally co llected funds, for G o v ernm en t ch e c k s as provided in our time sch ed u les. Su ch c h eck s w ill be forw ard ed by us to the Treasurer of the U n ited States and shall be subject in all ca ses to exam ination and p a y m en t by the Treasurer. U nder Treasury Circular 21, the Treasurer has reserved the right to e x am ine and to refu se p aym en t o f all G overn m ent ch eck s h a nd led b y the Federal R eserve banks. A-3.00 Returns S ection 210.12 of R egulation }, relating to the return of cash item s b y p aying banks, is not applicable to G overnm ent checks. In the e ven t that the Treasurer of the U nited States refuses p aym en t of any G overnm ent ch eck upon first e xam ination and such check, or photographic cop y thereof, is returned to this bank as outlined in Treasury Circular 21, the am ount of such check w ill be charged back to the account of the sender and sim u ltan eou sly credited to the ac count of the Treasurer. This bank shall h ave no responsibility to the sender of any G overnm ent check, or any other o w n e r or holder thereof, w ith respect to the n o n p a y m e n t of any such check and return by the Treasurer of any such c h e c k or photographic cop y thereof. A-4.00 Claims and actions The attention of senders is directed to 31 U.S.C. 122 and 129, to the effect that (a) claim s on a G overnm ent ch e c k w h ic h appears o f record to h ave b een paid, m ust be m ade w ith in s ix years after the date of issu a n c e of the ch e c k and (b) an action to enforce liability u p on a forged or u n authorized signature or e n d orsem en t or altera tion of any G overnm ent c h eck m u st be c o m m e n c e d w ith in six years after the presen tm en t o f the check, or w ritten n otice o f such a claim given w ith in that period, p rovided that, if a claim given w ith in that period, provided that, if a claim is m ade upon an apparently paid check, the six-year period w ith respect to the c o m m en c e m e n t of an action or the giving of w ritten notice w ill be e x te n d e d an additional 180 days. Supplement B POSTAL MONEY ORDERS B-1.00 Terms of handling Postal m o n e y orders (United States p ostal m o n e y orders; U nited States international postal m o n e y orders; dom estic-international postal m o n e y orders) w ill be handled b y us as cash item s in accordance w ith an agreem ent m ade by the U nited States Postal Service, and b y the Federal Reserve banks as depositaries and fiscal agents of the U nited States pursuant to author ization of the Secretary of the Treasury. W ith respect to matters not covered by that agreement, the terms and conditions of Regulation J ap plicable to cash items, of this bulletin, and of our FEDERAL RESERVE BANK OF DALLAS time sc h e d u le s shall be applicable to all such postal m o n e y orders. B-2.00 Immediate credit W e w ill give im m ed iate credit for p ostal m o n ey orders r e c e iv e d from a send er m aintaining or u sing an a cco u n t w ith us as p rovid ed in our time sch ed u les. S im u ltan eou sly w ith su ch credit, w e w ill debit the am ount of such m o n e y orders against the general accoun t of the Treasurer of the U nited S tates under su ch sy m b o l num bers as m a y be assign ed b y the Treasurer o f the U nited States; and su ch credit to the accou n t of the send er shall then b e co m e final as b e tw e e n us and the sender. B-3.00 Claims, returns The agreem ent b e tw e e n the U nited States Postal S ervice and the Federal R eserve b anks provides, in effect, that no claim for refund or o th erw ise w ith respect to an y p ostal m o n e y order debited against the general accou nt of the Treasurer of the U n ited S tates and d elivered to the repre sen ta tiv e of the U n ited S tates P ostal Service as p rovided in said agreem ent (other than a claim b ased upon the n egligen ce o f a Federal R eserve bank) shall be m ade against or through any Federal R eserve bank; that, if the U n ited States P ostal Service m akes any su ch claim w ith respect to any such m o n e y order su ch m o n e y order w ill n ot be returned or sent to a Federal R eserve bank, but the U nited States P ostal S ervice w ill deal directly w ith the bank or the party against w h ic h such claim is m ade; and that the Federal R eserve banks w ill assist the U n ited States P ostal Service in asserting such claim, in cluding m aking their records and an y relevan t e v id e n c e in their p o s se ss io n available to the U nited States Postal Service. S ectio n 210.12 of R egulation J, relating to the return of cash item s b y the p ayin g banks is not applicable to postal m o n e y orders. Supplement C FOOD COUPONS C-1.00 General Food co u po n s w ill be h an dled b y us as cash item s in accordance w ith an agreem ent m ade by the Secretary of Agriculture, in b eh a lf of the U nited States, and b y the Federal R eserve banks as d epositories and fiscal agents of the U n ited States pursuant to authorization of the BULLETIN 8 Secretary of the Treasury. W ith respect to m a t ters not cov e r e d by such agreem ent, the term s and con d ition s of R egulation J applicable to cash items, of this bulletin, and of our time sc h e d u le s shall be applicable to such coupons. W e w ill re c eive fo o d cou p on s only from m em ber banks and nonm em ber banks w h ic h h ave arranged w ith us to sen d c oupons to us for collectio n for credit to the account of a m em ber bank on our books. A ll such banks sending coupo ns to us should fo llo w the instructions set forth in an outline of procedures for com m ercial banks in handling such cou p on s under the current Food Stamp Program, prepared by the U nited States D epartm ent of Agriculture. C-2.00 Terms and conditions W e w ill accept fo o d coupons rece iv e d b y us in accordance w ith the fo llo w in g terms and c o n d i tions: (a) R ed e e m e d fo o d c oupons should be forw arded to the office of this bank m aintaining the reserve account to w h ic h the proceeds of the cou pons are to be credited. W e w ill give im m ediate credit for d e p osits of r e d eem ed fo o d coupons as pro v id ed in our time schedules. Such credit w ill not be final and w ill be subject to reclam ation and adjustment. (b) Food cou p on s should be separately sorted by d e nom inations and should be d e p osited in a separate cash letter. The sending b a n k ’s trans mittal letter should be clearly stam ped or marked “ F O O D C O U P O N S . " T h e t r a n s m it t a l le t t e r should s h o w the total num ber of, and the total am ount of, each d e nom ination of cou p on s e n closed. Food cou p on s should be forw arded to us by the m ean s ordinarily u sed by the sender for checks and other cash items; such shipm ents w ill be at the risk of the D epartm ent of A gricul ture, only to the ex te n t and under the conditions stated in 7CFR 272.5(c). Sending banks should retain c u sto m e r s’ d ep o sit slips and any other per tinent records w h ic h w o u ld assist in su b sta n tiating reim bursem ent claim s against the D epart m ent of Agriculture for cou p on s lost in transit. (c) In accordance w ith the regulations o f the U nited States D epartm ent of Agriculture (7 CFR 2), a portion of a fo o d cou p on c o n sistin g of less than three-fifths of a w h o le c oupon shall not be accep ted for redem ption. A n y cou pon accep ted for redem ption shall s h o w on its back either (i) the A U T H O R I Z A T I O N N U M B E R or BULLETIN 8 FEDERAL RESERVE BANK OF DALLAS (ii) the name of the authorized retail food store and, if involved, the authorized wholesale food concern. Each coupon shall also be cancelled by the first bank which receives it by indelibly marking “ P A ID ” or “ CA N C E LLE D " together with the name of the bank or its A.B.A. transit number, on the face of the coupon by means of an appropriate stamp. No coupon should be en dorsed by any bank. (d) Additional information concerning the col lection of food coupons will be furnished by us upon request C-3.00 Nonmember banks Nonmember banks which have not arranged with us to deposit food coupons for collection for credit to an account of a m em ber bank on our b ooks should forw ard red eem ed fo o d coupons through ordinary collection channels. Supplement D FOOD CERTIFICATES D-1.00 General Food certificates w ill be handled by us on the sam e basis as food coupons. Senders should c o n sult 7CFR 265.11 (b) for inform ation regarding the e x ten t to w hich, and the con d ition s under w hich, the Departm ent of Agriculture assu m e s the risk of lo ss of certificates w h ile in the course of shipm ent.
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