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FEDERAL RESERVE BANK O F NEW YORK Fiscal Agent of the United States r C ircu lar N o . 5 0 7 1 1 L A u g u st 1 6 ,1 9 6 1 J Deposits of September Tax Collections in Treasury Tax and Loan Accounts T o A ll Treasury T ax and Loan D epositaries in the Second Federal B eserve D istrict: The Treasury Department has advised us that Directors o f Internal Revenue will be instructed to make special deposits with Federal Reserve Banks, during the period September 1 through September 29, 1961, o f checks o f $10,000 or more, representing pay ments o f corporation and individual income taxes due September 15, 1961. Drawee banks qualified as Special Depositaries o f Public Moneys may receive up to 50 per cent o f the amount o f these remittances fo r deposit in Treasury Tax and Loan Accounts, subject, however, to the condition that the Treasury may find it necessary to increase or decrease the percentage amount o f the checks fo r credit to the Tax and Loan Accounts from time to time during the period, if such action is required to prevent undue fluctuations in the account o f the Treasurer of the United States with Federal Reserve Banks. W e will prepare daily a special form of cash letter, with an attached certificate form, fo r the tax checks included in the special deposits o f the Directors o f Internal Revenue during the period. The amount shown in the certificate will be fo r up to 50 per cent o f the amount o f those checks eligible fo r credit to Treasury Tax and Loan Accounts or for such other percentage as the Treasury may subsequently specify. Special depositaries wishing to accept fo r deposit in Tax and Loan Accounts the amount shown in the certificate attached to the cash letter should execute and return the certificate, in accordance with the instructions contained in the cash letter. The Treasury will deny credit to depositaries fo r customers’ tax checks arising out o f sales to the depositaries o f customers’ tax anticipation Treasury bills maturing Sep tember 22, 1961. As the Treasury has in the past stated, it does not look with favor upon such transactions, inasmuch as they increase the amount o f tax anticipation bills pre sented fo r cash redemption in advance of the availability o f Treasury receipts from the income tax installment due on the 15th o f the month and make it more difficult fo r the Treasury and the Federal Reserve System to handle the large income tax collections during the month in a manner that will maintain stability in the money market. Additional copies o f this circular will be furnished upon request. A lfred H ayes, President. f y r F ederal R eserve Ba n k of N ew s o 7 i York N E W Y O R K 45, N.Y. RECTOR 2 - 5 7 0 0 August 18, 1961 Second Progress Report on MICR Program To All Banks in the Second Federal Reserve District: Enclosed is a copy of a press statement and accompanying tables shoving the results of the second semiannual survey of the extent to which com mercial banks throughout the nation are encoding transit number-routing symbol information on checks in magnetic ink characters, as recommended under the Magnetic Ink Character Recognition program of The American Bankers Association. Also enclosed are copies of two tables showing in greater detail the status of banks in this District. One of the Second District tables, showing a breakdown by counties of'all banking offices to which checks are sent by this Bank for payment, in dicates that all such offices in 47 of the 75 counties, and most of the offices in each of the other counties, have begun to encode their checks; six months ago all such offices in only 13 counties had begun to encode their checks. Of the checks sent by this Bank for payment, 38*0 per cent are now encoded, com pared with 19»5 per cent six months ago. The other Second District table indi cates that 93*7 per cent of all banks classified within the four deposit categories have begun encoding; six months ago, 73*7 per cent of all such banks had begun encoding. The current survey shows that in the past six months, banks in the Second District have made substantial progress in encoding their checks with magnetic ink characters. We commend those banks that are already encoding their checks and express the hope that in the months ahead those banks which are not now encoding their checks will begin to participate in the MICR pro gram. All banks are urged to solicit the cooperation in the program of their customers who order the printing of their own check forms. ALFRED HAYES, President. S T A T E M E N T f o x * t h e P r e s s F e d e ra l R e s e r v e B a n k o f N ew Y ork N e w Y o r k 4 5 . N .Y . R E cto r 2 -5 7 0 0 - ext. 3 8 4 FOR RELEASE: MONDAY, AUGUST 21 , 1961 The 12 Federal Reserve Banks and their 24 Branches have just completed the second semiannual survey measuring the progress that the nation's hanks and branches are making in preparing their checks for handling by electronic check processing equipment. According to ffercus A. Harris, chairman of the Reserve System's Subcommittee on Collections, the survey indicated that 36 .1 per cent of all checks now carry the magnetic ink characters devised by the American Bankers Association to aid bankers in their biggest job, the collection and handling of checks. This figure represents a marked improvement over the 19*5 per cent recorded at the time of the previous survey. The survey covered checks sent for collection by the 36 Federal Reserve offices to 15,732 par banks and branches throughout the United States. It was found that 12,640 bank offices--or 8O .3 per cent as compared to 52.6 per cent six months ago--have begun to redesign and encode their checks. About 4.2 million of the 11.8 million items handled on an average day by the Reserve Banks now bear the new characters. The Philadelphia Reserve District with 98.3 per cent and the Minneapolis Reserve District with 93*2 per cent lead the nation's Reserve districts with re spect to par banks in their areas using encoded checks. However, commercial banks in the San Francisco District are sending for collection the highest proportion of encoded checks, 54.4 per cent. Banks in the Boston Reserve District showed the most improvement in the past six months with an increase from 18 per cent to 44.2 per cent in the number of preprinted checks. ( M O R E ) 2 Among the 50 states, all of Delaware’s banking offices have begun encoding, while North Dakota and California with 98*3 per cent and 98.1 per cent of their respective banks encoding, trail slightly. Delaware also leads with 69*3 per cent of checks sent for collection being encoded, while California with 60.7 per cent and Pennsylvania with 49*5 per cent follow in this category. In contrast to the February survey, which indicated that banks in the Middle Atlantic, New England, Great Lakes and Far Western States had been the most advanced in their preprinting program, the current survey discloses that a broad range of banks across the entire nation are presently participating in the program. Another related conclusion of this most recent survey encouragingly reveals that country banks are keeping in step with the city banks; as a matter of fact they have shown_ greater progress, in encoding and .redesigning of their..checks in the Boston, New York, Cleveland, and Chicago Reserve Districts. The next survey to evaluate the further growth of the magnetic ink program will be conducted early in February 1962 . The attached tables give in formation on the encoding of checks in the 12 Federal Reserve Districts and in each of the 50 states. # # # # # # # # ENCODING SURVEY BY FEDERAL RESERVE DISTRICTS August 1961 No. of Banking Offices in Survey District No. of Banking Offices Encoding Per Cent Encoding Total Daily Average Check Volume Sent to All Banking Offices Encoded Check Volume Per Cer Encode 1. Boston City Country Total 8 576 5S4 7 435 442 85.7 75.5 75.7 172,000 969,000 1,141,000 48,000 456,000 504 ,000 27.9 47.1 44.2 2. New York City Country Total 92 47.8 93-5 89 .I 292,700 522,300 31.0 1 ,199,200 942 44 795 B39 944,700 850 2,143,900 815,000 38.0 City Country Total 21 681 702 20 670 690 95.2 98.4 98.3 155,500 446,900 602,400 90,600 226,400 317,000 58.3 50.7 52.6 City Country Total 34 1,171 1,205 1,080 1 ,111 31 91.2 92.2 92.2 206,000 80,000 38.8 649,000 254,900 334,900 39.3 39-2 City Country Total 26 18 48,000 144,000 44.9 842 69.2 80.6 107,000 1,045 1,071 860 80.3 192,000 29.9 City Country Total 48 848 36 42,300 30.2 566,500 706,500 112,600 664 75-0 74.1 74.1 140, 000 628 19.9 21.9 City Country Total 87 2,709 2,796 81 2,201 2,282 81.2 81.6 City Country Total 87 1,165 1,252 54 557 6ll 47.8 48.8 135,600 458,200 593,800 City Country Total 707 769 100.0 92.6 145,100 236,400 93.2 3 . Philadelphia 4. Cleveland 5 . Richmond 6 . Atlanta 7* Chicago 8 . St. Louis 9 . Minneapolis LO. Kansas City LI. Dallas L2. San Francisco Total 896 62 62. 655 717 City Country Total 1,808 1,183 City Country Total 1,061 1,126 65 59 849 City Country Total City Country Total 76 1,732 72 1,111 908 93-1 62.1 855,000 536,000 643,000 154,900 1 1 1 ,100 378,500 1,304,900 1,683,400 ■ 43.6 26.9 463,400 574,500 29.4 35.5 34.1 31,000 67,600 22.9 14.8 '957500 16.6 51,400 35-4 381,500 71,300 122,700 30.2 32.2 94.7 64.1 65.4 140,000 664,900 804,900 33,400 75,800 109,200 23.9 11.4 90.8 80.0 80.6 483,700 98,800 582,500 13.6 31,100 110,100 22.8 141,200 24.2 98,600 782,800 59-3 53.8 54.4 31.5 97.3 166,200 90.0 2,581 142 2,191 2,333 90.4 1,455,300 1 ,621,500 752 14,980 15,732 626 83.2 80.2 80.3 2,789,400 958,200 34.4 12,014 12,640 8 ,970,000 3 ,287,200 11,759,400 4,245,400 36.6 36.1 146 2,435 881,400 ENCODING SURVEY BY STATES August 1961 No. of Banking Offices in Survey Alabama Alaska Arkansas Arizona California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Nfeine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyorrting District of Columbia http://fraser.stlouisfed.org/ Total Federal Reserve Bank of St. Louis Per Cent Encoding Total Daily Average Check Volume Sent to All Banking Offices Per Cent Encoded 178 61.8 110,500 17.1 39 138 170 1,498 164 153 37 64.1 45.7 4,100 61,400 44,800 1,065,400 9-9 22.3 60.7 269 137 76 105 979 546 742 593 378 108 99 173 203 477 295 67.1 98.1 92.7 92,200 32.2 88.2 100.0 303,200 49.2 25,700 215,000 69.3 84.8 7 6.6 174,000 55.3 2,700 69.5 45,300 80.4 84.8 78.4 97.7 72.4 85.3 190,000 656,000 584 40.4 122 86.9 421 44 71-3 696 243 58 689 382 248 909 23 128 103 255 989 87 180,300 253,000 69 66 910,000 255,600 67.3 63.2 72.2 56.6 96.9 61.6 305 79 12.2 81.8 97.0 89.8 75.9 160,000 92,900 79,000 24.7 21.8 3-7 28.3 34.4 31-2 21.9 8.7 26.3 18.6 19.0 44.2 47.7 404,500 38.6 230,100 34.9 .26.3 19.9 46,000 349,400 44,500 131,000 18,900 75,000 639,500 22,000 22.2 10.7 43.4 38.7 46.5 26.4 36.1 90.1 69.5 1,549,600 116,000 17.2 98.3 94.8 45-3 94.8 96.9 47.8 46.9 97.1 72.2 24,200 36.4 35.0 15.1 46.0 49.5 40.0 14.0 27.9 17.5 24.4 82.2 586,000 181,000 116,900 657,300 45,000 43,000 39,100 139,000 539,600 17.0 11 78.2 100.0 91,100 59,000 192,000 238,000 80,000 143,600 8,000 29,000 12.5 27.6 15,732 80.3 11,759,400 36.1 69 51.7 79-7 358 83.8 361 182 87.5 96.2 68.4 639 55 27.1 26.6 56.8 32.4 20.2 SECOND DISTRICT ENCODING SURVEY BY COUNTIES August 1961 Banking Offices to Which Checks are Sent by FRBNY New York City Bronx Kings New York Queens Richmond Total New York State Albany Allegany Broome Cattaraugus Cayuga_____ Chautauqua Chemung Chenango Clinton Columbia Cortland Delaware Dutchess Erie Essex Franklin Fulton Genesee Greene Hamilton Herkimer Jefferson Lewis Livingston Madison Monroe Montgomery Nassau Niagara Oneida Onondaga Ontario Orange Orleans Oswego * Per Cent Encoding 0 0 6 81* 83.3 42.0 Total Daily Average Check Volume Sent to All Banking Offices 0 3*600 864,756 Per Cent Encoded 0 28.6 29.2 __1 100.0 2,014 41.3 47.1 91 46.2 877,590 29.3 5 1 0 0 .0 15 9 14 1 0 0 .0 16 100.0 100.0 100.10 100 .'0 75.0 100.0 92.3 100.0 100.0 83.3 100.0 85.7 100.0 100.0 100.0 100.0 92.9 66.7 100.0 100.0 100.0 100.0 98.3 100.0 92.9 100.0 100.0 100.0 75.0 100.0 93,603 3,217 10,976 4,457 4,088 29.1 34.2 36.3 42.5 41.5 39.9 53.8 35.4 75.1 3 6 6 . 7 1 0 0 .0 1 0 0 .0 1 0 0 .0 4 5 4 4 5 13 14 39 6 5 7 8 5 1 9 14 6 6 7 9 7 60 12 14 14 7 20 4 9 7 ,2 2 0 4,426 4,390 4,854 4,223 1,500 2,572 6,263 20,316 41,472 1,836 1,684 3,379 3,056 3,091 264 3,812 3,933 1,173 2,602 3,110 7,396 4,528 118,364 4,522 12,787 24,526 3,699 18,151 1,187 4,422 60.3 44.3 26.3 47.9 57.4 43.8 25.2 24.1 34.2 52.6 12.9 53-9 25.9 11.2 52.8 50.5 36.9 48.6 53.9 52.0 47.7 34.7 41.3 44.2 40.7 31.9 Includes forty-two foreign banking agencies, corporations, and insurance companies whose drafts are collectible through the City Collection Department of the New York Clearing House. (Over) 2 Banking Offices to Which Checks are Sent by FRBNY New York State (Cont'd) Otsego Putnam Rensselaer Rockland St. Lawrence Saratoga Schenectady Schoharie Schuyler Seneca Steuben Suffolk Sullivan Tioga Tompkins Ulster Warren Washington Wayne Westchester Wyoming Yates Total Total New York City and State New Jersey Bergen Essex Hudson Hunterdon Middlesex Monmouth Morris Passaic Somerset Sussex Union Warren 12 Per Cent Encoding 91.7 4 1 0 0 .0 6 1 0 0 .0 9 1 0 0 .0 17 5 2 4 5 14 44 94.1 66.7 1 0 0 .0 50.0 1 0 0 .0 Total Daily Average Check Volume Sent to All Banking Offices Per Cent Encoded 4,640 36.0 3 ,2 5 2 40.0 46.3 38.4 29.3 22.9 41.8 5,104 9,710 ______ 7,748 3,953 6,808 784 925 2*013 6*393 16.3 36.0 11 1 0 0 .0 5 ,1 2 2 7 4 15 1 0 0 .0 2*463 37.4 "48T9 45.1 45.8 57.2 5,880 1 0 .1 1 0 0 .0 1 0 0 .0 1 0 0 .0 75-0 1 0 0 .0 62.5 1 0 0 .0 10 1 0 0 .0 17 1 0 0 .0 10 90.0 2 1 0 0 .0 5 0 ,7 8 3 16*779 4,058 3*673 6,649 88,145 2,495 792 54.0 25-5 29.0 43.0 56.3 49.1 18.8 605 96.7 672,048 44.9 696 90.1 1 ,549,638 36.1 43 97-7 75.0 91.7 68,515 98,824 58,376 57.2 28.7 58.2 39.0 35.1 20 .5 62.1 28 12 8 8 6 25 10 100.0 87.5 80.0 90.0 100.0 100.0 100.0 88.0 100.0 45*803 25*865 36,947 34,176 15*189 7*754 106,538 7*227 201 90.0 512,751 42.6 Connecticut Fairfield 29 89.7 76,203 47-6 Virgin Islands & Puerto Rico 16 31.3 5*289 14.8 942 89.1 2 ,143,881 38.0 Total Total Second District 24 20 10 7 7* 537 63.3 44. 5 30.4 34.5 32.9 SECOND DISTRICT ENCODING SURVEY BY DEPOSIT SIZE August 1961 No. of Banks No. of Banks Encoding Per Cent Encoding 258 71 246 70 95.3 22 21 40 44 38 _2 95-5 95.0 4.5 435 377 86.7 89 57 82 92.1 12 49 12 New York Group I Group II Group III Group IV 1 Unclassified^' Total 98.6 New Jersey Group Group Group Group I II III IV Total 15 15 86.0 100.0 100.0 173 158 91.3 5 3 3 3 Connecticut Group Group Group Group I II III IV Total 0 0 4 4 60.0 100.0 .0 100.0 12 10 83.3 4 _2 1 1 1 2 25.0 50.0 100.0 100.0 9 5 55.6 629 550 87.4 Virgin Islands and Puerto Rico Group Group Group Group I II III IV 2 1 Total Total Second District Legend Group Group Group Group 17 I II III IV deposits deposits deposits deposits under $15 million, from $15 million to $50 million, from $50 million to $100 million, $100 million and over. Certain foreign banking agencies, corporations, and insurance companies whose drafts are collectible through the City Collection Department of the New York Clearing House or the Manhattan, Bronx and Brooklyn Collection Arrangement.
@FedFRASER